UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

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

 

For the quarterly period ended December 31, 2023

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ___________ to ___________.

 

Commission file number 000-25753

 

VISIUM TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

  

Florida

 

87-0449667

(State of Incorporation)

 

(IRS Employer Identification No.)

 

4094 Majestic Lane, Suite 360

Fairfax, VA 22033

(Address of principal executive offices)

 

(703) 273-0383

Registrant’s telephone number, including area code:

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

N/A

 

N/A

 

N/A

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities 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 every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definition 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 number of shares outstanding of the registrant’s Common Stock, $0.0001 par value per share, as of February 10, 2024, was 105,838,642.

 

When used in this quarterly report, the terms “Visium,” “the Company,” “we,” “our,” and “us” refer to Visium Technologies, Inc., a Florida corporation.

 

 

 

 

CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION

 

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are based on our management’s current beliefs, estimates and assumptions and on information currently available to management that we believe may affect our financial condition, results of operation, business strategy and financial need.  Such statements involve substantial risk and uncertainties. All statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, including statements regarding our future operating results and financial position, our business strategy and plans, market growth and trends, and objectives for future operations are forward-looking statements. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions.

 

These risks and uncertainties include, among other things, risks related to our expectations regarding global macro-economic conditions, including the effects of inflation, rising and fluctuating interest rates and market volatility on the global economy; our ability to estimate the size and growth of our total addressable market, and the development of the market for our products, which is new and evolving; our ability to effectively sustain and manage our growth and future expenses, achieve and maintain future profitability, attract new customers; the impact of the coronavirus pandemic (the “COVID-19 pandemic”) or its abatement, on our business, results of operations, financial condition, and future profitability and growth; the impact of the evolving COVID-19 pandemic on the businesses of our customers, partners and suppliers, and the economy; the effects of increased competition in our market and our ability to compete effectively; our ability to expand use cases within existing customers and vertical solutions; our ability to expand our operations and increase adoption of our platform internationally; our ability to expand our direct sales force, customer success team and strategic partnerships around the world; the sufficiency of our cash and capital resources to satisfy our liquidity needs; our ability to hire, retain and motivate qualified personnel, including executive level management; and our ability to successfully manage and integrate executive management transitions; uncertainties regarding the impact of general economic and market conditions, including as a result of regional and global conflicts or related government sanctions;.

 

Most of these factors are difficult to predict and are generally beyond our control. Therefore, you should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. We undertake no obligation to update any forward-looking statements after the date of this Quarterly Report on Form 10-Q or to conform such statements to actual results or revised expectations, except as required by law. Further information on potential factors that could affect our business is described under “Item 1A. Risk Factors” in our Annual Report on Form 10-K as filed with the United States Securities and Exchange Commission, or the SEC, on October 6, 2023. Readers are also urged to carefully review and consider the various disclosures we have made in this Quarterly Report on form 10-Q and in our Annual Report on Form 10-K.

 

 

 

 

vism_10qimg1.jpg

 

VISIUM TECHNOLOGIES, INC. AND SUBSIDIARIES

 

INDEX

 

PART I - FINANCIAL INFORMATION

 

 

3

 

Item 1. Financial Statements

 

 

3

 

Consolidated Balance Sheets – December 31, 2023 (unaudited) and June 30, 2023

 

 

3

 

Consolidated Statements of Operations - Three and Six Months ended December 31, 2023 and 2022 (unaudited)

 

 

4

 

Consolidated Statements of Changes in Stockholders’ Deficit (unaudited) – Three and Six Months ended December 31, 2023 and 2022

 

 

5

 

Consolidated Statements of Cash Flows - Six Months Ended December 31, 2023 and 2022 (unaudited)

 

 

7

 

Notes to Consolidated Financial Statements (unaudited)

 

 

8

 

Item 2. Management’s Discussion and Analysis and Results of Operations

 

 

20

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

 

27

 

Item 4. Controls and Procedures

 

 

27

 

PART II - OTHER INFORMATION

 

 

28

 

Item 1. Legal Proceedings.

 

 

28

 

Item 1A. Risk Factors.

 

 

28

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

 

28

 

Item 3. Defaults Upon Senior Securities.

 

 

28

 

Item 4. Mine Safety Disclosures.

 

 

28

 

Item 5. Other Information.

 

 

28

 

Item 6. Exhibits

 

 

29

 

SIGNATURES

 

 

30

 

 

 
2

Table of Contents

 

PART I - FINANCIAL INFORMATION

 

Item 1. Consolidated Financial Statements

 

VISIUM TECHNOLOGIES, INC.

CONSOLIDATED BALANCE SHEETS

 

 

 

December 31,

2023

 

 

June 30,

2023(1)

 

 

 

(Unaudited)

 

 

 

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash

 

$8,478

 

 

$9,982

 

Prepaid license fee

 

 

38,893

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Total current assets

 

 

47,371

 

 

 

9,982

 

 

 

 

 

 

 

 

 

 

Total assets

 

$47,371

 

 

$9,982

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$1,019,019

 

 

$845,502

 

Accrued compensation

 

 

1,699,379

 

 

 

1,371,879

 

Due to officer

 

 

139,633

 

 

 

99,578

 

Accrued interest

 

 

512,542

 

 

 

548,041

 

Convertible notes payable, net of discount of $2,437 and $0 as of December 31, 2023 and June 30, 2023, respectively

 

 

772,065

 

 

 

937,576

 

Derivative liabilities

 

 

48,018

 

 

 

80,707

 

Notes payable, net of discount of $15,872 and $26,805 as of December 31, 2023 and June 30, 2023, respectively

 

 

581,628

 

 

 

380,013

 

Total current liabilities

 

 

4,772,284

 

 

 

4,263,296

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies (Note 11)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 December 31, 2023 and June 30, 2023, respectively)

 

 

13,992

 

 

 

13,992

 

Series B Convertible Stock ($0.001 par value 30,000,000 shares authorized, 1,327,670 shares issued and outstanding as of December 31, 2023 and June 30, 2023, respectively)

 

 

1,328

 

 

 

1,328

 

Series C Convertible Stock ($0.001 par value 30,000 shares authorized, 10,000 shares issued and outstanding as of December 31, 2023 and 0 shares issued and outstanding as of June 30, 2023

 

 

-

 

 

 

-

 

Series AA Convertible Stock ($0.001 par value; 1 share authorized, 1 share issued and outstanding as of December 31, 2023 and June 30, 2023, respectively)

 

 

-

 

 

 

-

 

Common stock, $0.0001 par value, 1,000,000,000 shares authorized: 96,813,626 shares issued and 96,501,142 outstanding at December 31, 2023, and 37,199,647 shares issued and 29,844,713 outstanding at June 30, 2023, respectively (See Note 7)

 

 

9,652

 

 

 

2,987

 

Additional paid in capital

 

 

57,400,982

 

 

 

55,597,779

 

Accumulated deficit

 

 

(62,150,867)

 

 

(59,869,400)

Total stockholders’ deficit

 

 

(4,724,913)

 

 

(4,253,314)

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders’ deficit

 

$47,371

 

 

$9,982

 

 

(1)

Derived from audited financial statements.

 

See Notes to Unaudited Consolidated Financial Statements.

 

 
3

Table of Contents

 

VISIUM TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net revenues

 

$-

 

 

$-

 

 

$-

 

 

$-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

1,083,168

 

 

 

533,892

 

 

 

1,591,308

 

 

 

893,581

 

Development expense

 

 

19,446

 

 

 

47,060

 

 

 

47,809

 

 

 

101,952

 

Total Operating Expenses

 

 

1,102,614

 

 

 

580,952

 

 

 

1,639,117

 

 

 

995,533

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from Operations

 

 

(1,102,614 )

 

 

(580,952 )

 

 

(1,639,117 )

 

 

(995,533 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expenses):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain (loss) on change in fair value of derivative liabilities

 

 

93,085

 

 

 

(45,233 )

 

 

32,689

 

 

 

(33,862 )

Derivative liability expense

 

 

-

 

 

 

(58,139 )

 

 

-

 

 

 

(58,139 )

Loss on extinguishment of debt

 

 

(66,765 )

 

 

-

 

 

 

(12,035 )

 

 

(504,925 )

Interest expense

 

 

(132,014 )

 

 

(37,199 )

 

 

(178,544 )

 

 

(166,940 )

Total other income (expenses)

 

 

(105,694 )

 

 

(140,571 )

 

 

(157,890 )

 

 

(763,866 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

(1,208,308 )

 

 

(721,523 )

 

 

(1,797,007 )

 

 

(1,759,399 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock deemed dividend

 

 

-

 

 

 

-

 

 

 

(484,460 )

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to common stockholders

 

$(1,208,308 )

 

$(721,523 )

 

$(2,281,467 )

 

$(1,759,399 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss per common share basic and diluted

 

$(0.02 )

 

$(0.22 )

 

$(0.04 )

 

$(0.57 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding – basic and diluted

 

 

78,899,929

 

 

 

3,271,675

 

 

 

57,608,052

 

 

 

3,085,138

 

 

See Notes to Unaudited Consolidated Financial Statements.

 

 
4

 

  

VISIUM TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2023

(UNAUDITED)

 

For the three months ended December 31, 2023

 

 

 

 

Preferred

Stock -

Series B

$0.001

Par Value

 

 

Preferred

Stock -

Series A

$0.001

Par Value

 

 

Preferred

Stock -

Series C

$0.001

Par Value

 

 

Preferred

Stock -

Series AA

$0.001

Par Value

 

 

Common

Stock

$0.0001

Par Value

 

 

Additional Paid-in

 

 

Accumulated

 

 

Total Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Deficit

 

Balance at September 30, 2023

 

 

13,992,340

 

 

$13,992

 

 

 

1,327,670

 

 

$1,328

 

 

 

-

 

 

$-

 

 

 

1

 

 

$0

 

 

 

45,522,379

 

 

$4,554

 

 

$56,306,851

 

 

$(60,942,559)

 

$(4,615,834)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued for consulting services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,990,833

 

 

 

499

 

 

 

258,250

 

 

 

 

 

 

 

258,749

 

Shares issued as compensation to employees

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,080,000

 

 

 

508

 

 

 

84,844

 

 

 

 

 

 

 

85,352

 

Shares issued as compensation to directors and officers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

27,240,000

 

 

 

2,724

 

 

 

455,032

 

 

 

 

 

 

 

457,756

 

Shares issued for conversion of notes payable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13,667,930

 

 

 

1,366

 

 

 

296,005

 

 

 

 

 

 

 

304,234

 

Net loss for the three months ended December 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,208,308)

 

 

(1,208,308)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2023

 

 

13,992,340

 

 

$13,992

 

 

 

1,327,670

 

 

$1,328

 

 

 

-

 

 

$-

 

 

 

1

 

 

$0

 

 

 

96,501,142

 

 

$9,652

 

 

$57,400,982

 

 

$(62,150,867)

 

$(4,724,913)

 

For the six months ended December 31, 2023

 

 

 

Preferred

Stock -

Series A

$0.001

Par Value

 

 

Preferred

Stock -

Series B

$0.001

Par Value

 

 

Preferred

Stock -

Series C

$0.001

Par Value

 

 

Preferred

Stock -

Series AA

$0.001

Par Value

 

 

Common

Stock

$0.0001

Par Value

 

 

Additional Paid-in

 

 

Accumulated

 

 

Total Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Deficit

 

Balance at June 30, 2023

 

 

13,992,340

 

 

$13,992

 

 

 

1,327,670

 

 

$1,328

 

 

 

-

 

 

$-

 

 

 

1

 

 

$0

 

 

 

29,844,713

 

 

$2,987

 

 

$55,597,779

 

 

$(59,869,400)

 

$(4,253,314)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued for consulting services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6,129,999

 

 

 

613

 

 

 

305,487

 

 

 

 

 

 

 

306,100

 

Shares issued as compensation to employees

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,320,000

 

 

 

532

 

 

 

88,876

 

 

 

 

 

 

 

89,408

 

Shares issued as compensation to directors and officers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30,960,000

 

 

 

3,096

 

 

 

517,528

 

 

 

 

 

 

 

520,624

 

Shares issued for conversion of notes payable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

24,246,430

 

 

 

2,424

 

 

 

406,852

 

 

 

 

 

 

 

409,276

 

Deemed dividend

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

484,460

 

 

 

(484,460)

 

 

-

 

Net loss for the six months ended December 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,797,007)

 

 

(1,797,007)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2023

 

 

13,992,340

 

 

$13,992

 

 

 

1,327,670

 

 

$1,328

 

 

 

-

 

 

$-

 

 

 

1

 

 

$0

 

 

 

96,501,142

 

 

$9,652

 

 

$57,400,982

 

 

$(62,157,731)

 

$(4,724,913)

 

See Notes to Unaudited Consolidated Financial Statements.

 

 
5

Table of Contents

 

VISIUM TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2022

(UNAUDITED)

 

For the three months ended December 31, 2022

 

 

 

Preferred

Stock -

Series A

$0.001

Par Value

 

 

Preferred

Stock -

Series B

$0.001

Par Value

 

 

Preferred

Stock -

Series AA

$0.001

Par Value

 

 

Common

Stock

$0.0001

Par Value

 

 

Additional Paid-in

 

 

Accumulated

 

 

Total Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Deficit

 

Balance at September 30, 2022

 

 

13,992,340

 

 

$13,992

 

 

 

1,327,670

 

 

$1,328

 

 

 

1

 

 

$0

 

 

 

2,901,590

 

 

$290

 

 

$53,979,338

 

 

$(57,596,428 )

 

$(3,601,480 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued for consulting services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10,000

 

 

 

1

 

 

 

3,099

 

 

 

 

 

 

 

3,100

 

Shares issued as compensation to employees

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

235,001

 

 

 

23

 

 

 

72,827

 

 

 

 

 

 

 

72,850

 

Shares issued as compensation to directors and officers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

522,207

 

 

 

52

 

 

 

172,552

 

 

 

 

 

 

 

172,604

 

Shares issued for conversion of notes payable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

248,550

 

 

 

25

 

 

 

77,024

 

 

 

 

 

 

 

77,049

 

Shares issued for exercise of warrants

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

68,755

 

 

 

7

 

 

 

(7 )

 

 

 

 

 

 

0

 

Net loss for the three months ended December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(721,523 )

 

 

(721,523 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2022

 

 

13,992,340

 

 

$13,992

 

 

 

1,327,670

 

 

$1,328

 

 

 

1

 

 

$0

 

 

 

3,986,103

 

 

$

398

 

 

$

54,304,833

 

 

$

(58,317,951 )

 

$

(3,997,400 )

 

For the six months ended December 31, 2022

 

 

 

Preferred

Stock -

Series A

$0.001

Par Value

 

 

Preferred

Stock -

Series B

$0.001

Par Value

 

 

Preferred

Stock -

Series AA

$0.001

Par Value

 

 

Common

Stock

$0.0001

Par Value

 

 

Additional Paid-in

 

 

Accumulated

 

 

Total Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Deficit

 

Balance at June 30, 2022

 

 

13,992,340

 

 

$13,992

 

 

 

1,327,670

 

 

$1,328

 

 

 

1

 

 

$0

 

 

 

2,896,385

 

 

$288

 

 

$53,749,386

 

 

$(56,558,552 )

 

$(2,793,558 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued for consulting services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11,482

 

 

 

2

 

 

 

18,871

 

 

 

 

 

 

 

18,873

 

Shares issued as compensation to employees

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

235,001

 

 

 

23

 

 

 

72,827

 

 

 

 

 

 

 

72,850

 

Shares issued as compensation to directors and officers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

525,930

 

 

 

53

 

 

 

199,760

 

 

 

 

 

 

 

199,813

 

Warrants issued  on extinguishment of debt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

186,972

 

 

 

 

 

 

 

186,972

 

Shares issued for conversion of notes payable and accrued interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

248,550

 

 

 

25

 

 

 

77,024

 

 

 

 

 

 

 

77,049

 

Shares issued for exercise of warrants

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

68,755

 

 

 

7

 

 

 

(7 )

 

 

 

 

 

 

0

 

Net loss for the six months ended December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,759,399 )

 

 

(1,759,399 )

Balance at December 31, 2022

 

 

13,992,340

 

 

$13,992

 

 

 

1,327,670

 

 

$1,328

 

 

 

1

 

 

$0

 

 

 

3,986,103

 

 

$398

 

 

$54,304,833

 

 

$(58,317,951 )

 

$(3,997,400 )

 

See Notes to Unaudited Consolidated Financial Statements.

 

 
6

Table of Contents

 

VISIUM TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

Six-months ended

 

 

 

December 31,

 

 

 

2023

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$(1,797,007 )

 

$(1,759,399 )

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

916,132

 

 

 

291,536

 

Amortization of debt discount

 

 

19,896

 

 

 

94,956

 

Derivative liability expense

 

 

-

 

 

 

58,139

 

(Gain) loss on change in fair value of derivative liability

 

 

(32,689 )

 

 

33,862

 

Loss on extinguishment of debt

 

 

12,035

 

 

 

504,925

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

 

173,512

 

 

 

50,467

 

Prepaid license fee

 

 

(38,893 )

 

 

(35,000 )

Accrued interest

 

 

152,306

 

 

 

71,981

 

Accrued compensation

 

 

327,500

 

 

 

410,434

 

Net cash used in operating activities

 

 

(267,208 )

 

 

(278,099 )

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from promissory notes payable

 

 

235,000

 

 

 

-

 

Repayment of convertible notes payable

 

 

(44,250 )

 

 

-

 

Proceeds from convertible notes payable

 

 

86,717

 

 

 

105,000

 

Repayment of promissory notes payable

 

 

(51,818 )

 

 

-

 

Advances from officers

 

 

40,055

 

 

 

67,500

 

 

 

 

 

 

 

 

 

 

Net cash provided by financing activities

 

 

265,704

 

 

 

172,500

 

 

 

 

 

 

 

 

 

 

Net decrease in cash

 

 

(1,504 )

 

 

(105,599 )

 

 

 

 

 

 

 

 

 

Cash, beginning of period

 

 

9,982

 

 

 

136,990

 

 

 

 

 

 

 

 

 

 

Cash, end of period

 

$8,478

 

 

$31,391

 

 

 

 

 

 

 

 

 

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

 

 

Cash paid for interest

 

$7,560

 

 

$-

 

Cash paid for income taxes

 

$-

 

 

$-

 

 

 

 

 

 

 

 

 

 

Non-cash investing and financing activities:

 

 

 

 

 

 

 

 

Issuance of common stock for conversion of notes payable and accrued interest

 

$409,276

 

 

$77,049

 

Warrants on extinguishment of debt

 

$-

 

 

$186,972

 

 

See Notes to Unaudited Consolidated Financial Statements.

 

 
7

Table of Contents

 

VISIUM TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

 

NOTE 1: ORGANIZATION, GOING CONCERN AND BASIS OF PRESENTATION

 

Visium Technologies, Inc. is focused on professional technology services, digital risk management, and cybersecurity for network physical security, the Cloud, mobility solutions, critical infrastructure security, and the Internet of Things (“IOT”).

 

In April 2021 the Company created JAJ Advisory, LLC, a Viriginia limited liability company. The LLC was established to account for non-technology/cybersecurity related business activities that the Company may pursue.

 

Recent Developments

 

The Company is entering the West Africa data center construction market after it landed a contract valued at over $20 million from its partner, Cybastion Institute of Technology, to oversee the design and construction of data centers in the Republic of Côte d’Ivoire and the Republic of Benin.  Visium is tasked with creating data centers that meet specific requirements and standards, ensuring optimal performance and reliability. The scope of work includes data center architecture and design, power controls and distribution systems, rack layouts, network topology, vendor high availability, and a comprehensive security stack which will includes Visium’s proprietary TruContextTM cybersecurity platform.

 

Going Concern

 

The accompanying consolidated financial statements have been prepared on a going concern basis. For the six months ended December 31, 2023 we had a net loss of $1,797,007, had net cash used in operating activities of $267,208 and had negative working capital of $4,724,913. 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 continuing to issue additional equity and debt securities. 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.

 

Basis of Presentation

 

The unaudited interim consolidated financial information furnished herein reflects all adjustments, consisting only of normal recurring items, which in the opinion of management are necessary to fairly state Visium Technologies, Inc.’s (the “Company” or “we”, “us” or “our”) financial position, results of operations and cash flows for the dates and periods presented and to make such information not misleading. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to rules and regulations of the United States Securities and Exchange Commission (“SEC”), nevertheless, management of the Company believes that the disclosures herein are adequate to make the information presented not misleading.

 

These unaudited consolidated financial statements should be read in conjunction with the Company’s audited financial statements for the year ended June 30, 2023, contained in the Company’s Annual Report on Form 10-K filed with the SEC on October 6, 2023. The results of operations for the six months ended December 31, 2023, are not necessarily indicative of results to be expected for any other interim period or the fiscal year ending June 30, 2024.

 

 
8

Table of Contents

 

VISIUM TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

 

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Fiscal Year

 

The fiscal year ends on June 30. References to fiscal year 2024, for example, refer to the fiscal year ending June 30, 2024.

 

Principles of Consolidation

 

The accompanying unaudited consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles and include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been 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 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. Included in these estimates are assumptions used in Cox, Ross & Rubinstein Binomial Tree stock-based compensation valuation methods, such as expected volatility, risk-free interest rate, and expected dividend rate and in the valuation allowance of deferred tax assets and derivative liability.

 

Cash and Cash Equivalents

 

The Company considers all highly liquid, temporary, cash equivalents or investments with an original maturity of three months or less when purchased, to be cash equivalents. The Company had no cash equivalents during the six months ended December 31, 2023 and year ended June 30, 2023.

 

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 December 31, 2023 and June 30, 2023, the Company did not exceed these FDIC limits.

 

Derivative Liabilities

 

The Company assessed the classification of its derivative financial instruments as of December 31, 2023 and June 30, 2023 which consist of convertible instruments and rights to shares of the Company’s common stock and determined that such derivatives meet the criteria for liability classification under ASC 815.

 

ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional, as described.

 

The Company uses judgment in determining the fair value of derivative liabilities at the date of issuance and at every balance sheet thereafter and in determining which valuation method is most appropriate for the instrument, the expected volatility, the implied risk-free interest rate, as well as the expected dividend rate, if any. The Company recorded derivative liabilities as of December 31, 2023 of $48,018.

 

 
9

Table of Contents

 

VISIUM TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

 

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

 

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.

 

Additional Disclosures Regarding Fair Value Measurements

 

The carrying value of cash, accounts payable and accrued expenses, accrued compensation, notes payable and convertible promissory notes payable, approximate their fair value due to the short maturity of these items or the use of market interest rates.

 

Convertible Instruments

 

The Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with ASC 470-20, Debt with Conversion and Other Options. Accordingly, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their earliest date of redemption. The Company also records deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note.

 

ASC 815-40, Contracts in Entity’s own Equity, generally provides that, among other things, if an event is not within the entity’s control, such contract could require net cash settlement and shall be classified as an asset or a liability.

 

The Company determines whether the instruments issued in the transactions are considered indexed to the Company’s own stock. During fiscal years 2014 through 2023 the Company’s issued convertible securities with variable conversion provisions that resulted in derivative liabilities. See discussion above under derivative liabilities that resulted in a change in derivative liability accounting.

 

Revenue Recognition

 

All revenues are recorded in accordance with ASC 606, which is recognized when: (i) a contract with a client has been identified, (ii) the performance obligation(s) in the contract have been identified, (iii) the transaction price has been determined, (iv) the transaction price has been allocated to each performance obligation in the contract, and (v) the Company has satisfied the applicable performance obligation over time.

 

 
10

Table of Contents

 

VISIUM TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

 

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

 

Income Taxes

 

The Company accounts for income taxes pursuant to the provisions of ASC 740-10, “Accounting for Income Taxes,” which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized.

 

The Company follows the provisions of ASC 740-10, “Accounting for Uncertain Income Tax Positions”. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits.

 

The Company has adopted ASC 740-10-25, Definition of Settlement”, which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion of an examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. As of December 31, 2023, the Company had not filed tax returns for the tax years ending June 30, 2008 through 2023 and such returns, when filed, potentially will be subject to audit by the taxing authorities for a minimum of three years beyond the filing date under the three-year statute of limitations. The Company has not accrued any potential tax penalties associated with not filing these tax returns. Due to recurring losses, management believes such potential tax penalties, if any, would not be material in amount.

 

Share-Based Payments

 

The Company accounts for stock-based compensation in accordance with ASU 2022-07, Compensation – Stock Compensation (Topic 718). This update is intended to reduce cost and complexity and to improve financial reporting for share-based payments issued to non-employees (for example, service providers, external legal counsel, suppliers, etc.). The ASU expands the scope of Topic 718, Compensation—Stock Compensation, which currently only includes share-based payments issued to employees, to also include share-based payments issued to non-employees for goods and services. Consequently, the accounting for share-based payments to non-employees and employees is substantially aligned.

 

Under ASC Topic 718, “Compensation – Stock Compensation”. Under the fair value recognition provisions of this topic, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as an expense on a straight-line basis over the requisite service period, which is the vesting period.

 

The Company has elected to use the Cox, Ross & Rubinstein Binomial Tree valuation model to estimate the fair value of its options, which incorporates various subjective assumptions including volatility, risk-free interest rate, expected life, and dividend yield to calculate the fair value of stock option awards. Compensation expense recognized in the statements of operations is based on awards ultimately expected to vest and reflects estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

 

Segment Reporting

 

The Company operates in one business segment which technologies are focused on professional services, data analytics, and cybersecurity.

 

 
11

Table of Contents

 

VISIUM TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

 

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

 

Recent Accounting Pronouncements

 

All new accounting pronouncements issued but not yet effective are not expected to have a material impact on our results of operations, cash flows or financial position. There have been no new accounting pronouncements not yet effective that have significance to our consolidated financial statements.

 

 NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

 

Basic and Diluted Earnings Per Share

 

Basic earnings per share are calculated by dividing income available to stockholders by the weighted-average number of shares of Common Stock outstanding during each period. Diluted earnings per share are computed using the weighted average number of shares of Common Stock and the dilutive Common Stock share equivalents outstanding during the period. Dilutive Common Stock share equivalents consist of shares issuable upon the exercise of in-the-money stock options and warrants (calculated using the modified-treasury stock method) and conversion of other securities such as convertible debt or convertible preferred stock. Potential common shares that would be as follows:

 

 

 

December 31,

 

 

June 30,

 

 

 

2023

 

 

2023

 

Weighted average common shares outstanding

 

 

57,608,052

 

 

 

6,306,120

 

Effect of dilutive securities-when applicable:

 

 

 

 

 

 

 

 

Convertible promissory notes

 

 

24,712,177

 

 

 

38,998,249

 

Preferred stock

 

 

11,348

 

 

 

11,348

 

Common stock options

 

 

2,222

 

 

 

2,222

 

Warrants

 

 

5,114,576

 

 

 

5,115,207

 

Fully diluted earnings per share—adjusted weighted-average shares and assumed conversions

 

 

87,448,375

 

 

 

50,433,146

 

 

NOTE 3: PREPAID LICENSE FEE

 

In April 2022, the Company entered into two-year software license agreement to enable product development. The license fee is prepaid  at a rate of $77,850 annually, beginning July 1 of each year. The prepaid license fee is amortized on a straight-line basis over the term of the license agreement, and is included in Development expense in our Statement of Operations. As of December 31, 2023, the prepaid license fee was $38,893.

 

 
12

Table of Contents

 

VISIUM TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

 

NOTE 4: DERIVATIVE LIABILITIES

 

Derivative liability – convertible notes

 

The Company has certain convertible notes with variable price conversion terms. Upon the issuance of these convertible notes and as a consequence of their conversion features, the convertible notes give rise to embedded derivative liabilities. The Company’s derivative liabilities related to its convertible notes payable have been measured at fair value at December 31, 2023 and June 30, 2023 using the Cox, Ross & Rubinstein Binomial Tree valuation model.

 

The revaluation of the warrants and convertible debt at each reporting period, as well as the charges associated with issuing additional convertible notes, and warrants with price protection features, resulted in the recognition of a gain of $32,689 and a loss of $33,862 for the six months December 31, 2023 and 2022, respectively in the Company’s consolidated statements of operations, under the caption “Loss in change of fair value of derivative liability”. The fair value of the warrants at December 31, 2023 and June 30, 2023 was $0 and $0, respectively. The fair value of the derivative liability related to the convertible debt at December 31, 2023 and June 30, 2023 is $48,018 and $80,707, respectively, which is reported on the consolidated balance sheet under the caption “Derivative liability”.

 

The Company has determined its derivative liability to be a Level 3 fair value measurement. The significant assumptions used in the Cox, Ross & Rubinstein Binomial Tree valuation of the derivative are as follows:

 

 

 

Six Months Ended December 31,

 

 

 

2023

 

 

2022

 

Effective exercise price

 

$0.0082

 

 

$0.058

 

Effective market price

 

$0.0169

 

 

$0.081

 

Expected volatility

 

 

268.04%

 

 

256.8%

Risk-free interest

 

 

5.59%

 

 

4.41%

Expected terms

 

60  days

 

 

60 days

 

Expected dividend rate

 

 

0%

 

 

0%

 

Changes in the derivative liabilities during the six months ended December 31, 2023 is follows:

 

Derivative liabilities at June 30, 2023

 

$80,707

 

Derivative liability expense

 

 

-

 

Gain on change in fair value of derivative liabilities

 

 

(32,689 )

Derivative liabilities at December 31, 2023

 

$48,018

 

 

 
13

Table of Contents

 

VISIUM TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

 

NOTE 5: ACCRUED INTEREST PAYABLE

 

Changes in accrued interest payable during the six months ended December 31, 2023 is as follows:

 

Accrued interest payable at June 30, 2023

 

$548,041

 

Conversion of accrued interest into common stock

 

 

(187,805 )

Interest expense paid in cash

 

 

(7,560 )

Interest expense accrued for the six months ended December 31, 2023

 

 

159,866

 

Accrued interest payable at December 31, 2023

 

$512,542

 

 

NOTE 6: CONVERTIBLE NOTES PAYABLE AND NOTES PAYABLE

 

Convertible Notes Payable

 

At December 31, 2023 and June 30, 2023 convertible debentures consisted of the following:

 

 

 

December 31,

 

 

June 30,

 

 

 

2023

 

 

2023

 

Convertible notes payable

 

$774,502

 

 

$973,576

 

Discount on convertible notes

 

 

(2,437 )

 

 

-

 

Convertible notes, net

 

$772,065

 

 

$973,576

 

 

The Company had convertible promissory notes aggregating $772,065 and $973,576 at December 31, 2023 and June 30, 2023, respectively. The related accrued interest amounted to approximately $259,183 and $324,031 at December 31, 2023 and June 30, 2023, respectively. The convertible notes payable bear interest at rates ranging from 0% to 18% per annum. The convertible notes are generally convertible, at the holders’ option, at rates ranging from $0.0019 to $22,500 per share, as a result of the two reverse stock splits. At December 31, 2023, approximately $694,000 of convertible promissory notes had matured, are in default and remain unpaid. There are no punitive default provisions included in the terms of these convertible promissory notes.

 

The changes in the convertible notes payable balance are summarized below:

 

Convertible payable at June 30, 2023

 

$937,576

 

Convertible notes issued during the six months ended December 31, 2023

 

 

86,717

 

Convertible notes repaid in cash

 

 

(44,250 )

Discount related to convertible notes payable

 

 

(2,437 )

Conversion of convertible notes payable into common stock

 

 

(205,724 )

Convertible payable at December 31, 2023

 

$772,065

 

 

For the six months ended December 31, 2023, the following summarizes the conversion of debt for common shares:

 

 

 

 

 

 

Amount of

 

 

 Amount of

 

 

 

 

 

 

 

 

Conversion

 

 

 

Shares

 

 

Converted

 

 

 Converted

 

 

Conversion

 

 

 

 

 

Price

 

Name

 

Issued

 

 

Principal

 

 

Interest

 

 

Expense

 

 

Total

 

 

Per Share

 

Talos Victory Fund

 

 

778,500

 

 

$7,474

 

 

$3,826

 

 

$1,750

 

 

$13,050

 

 

$0.0169

 

FirstFire

 

 

6,000,000

 

 

 

101,400

 

 

 

-

 

 

 

-

 

 

 

101,400

 

 

 

0.0169

 

Mast Hill

 

 

17,467,930

 

 

 

96,850

 

 

 

183,978

 

 

 

14,000

 

 

 

294,826

 

 

 

0.0169

 

Total

 

 

24,246,430

 

 

$205,724

 

 

$187,805

 

 

$15,750

 

 

$409,276

 

 

$0.0169

 

 

The Company repaid a convertible note in cash in September 2023. The repayment terms included a premium provision, resulting in a loss on the extinguishment of this debt of $12,035.

 

 
14

Table of Contents

 

A recap of the Gain on extinguishment of debt follows:

 

Loss on extinguishment of debt related to payoff of convertible note

 

$(12,035 )

 

 

$(12,035 )

 

In February 2022, the Company entered into a Securities Purchase Agreements with three investors pursuant to which each investor purchased a promissory note, The Notes are convertible into shares of the Company’s common stock at a conversion price of $2.43 per share, subject to adjustment as provided therein.

 

These notes had price protection provisions that allow for the reduction in the current conversion price upon the occurrence of certain events, including the Company’s issuance of common stock or securities convertible into or exercisable for common stock, such as options and warrants, at a price per share less than the conversion price then in effect. For instance, if the Company issues shares of its common stock or options exercisable for or securities convertible into common stock at an effective price per share of common stock less than the exercise price then in effect, the conversion price will be reduced to the effective price of the new issuance.

 

Due to the price protection features of these convertible notes, the difference between the amount of the fair value of the current conversion price and reduced conversion price calculated using the outstanding principal balances of the notes affected at the time of the conversion at the lower conversion price amounted to $484,460 and is recorded as a deemed dividend with a corresponding increase and decrease in additional paid in capital as of December 31, 2023. Additionally, for the six months ended December 31, 2023, it is reflected as a reduction to the net loss for the year to arrive at the net loss attributable to common shareholders to recognize the effect of the price protection provisions.

 

Notes Payable

 

The Company had promissory notes aggregating $581,628 and $380,013 at December 31, 2023 and June 30, 2023, respectively. The related accrued interest amounted to approximately $253,358 and $224,010 at December 31, 2023 and June 30, 2023, respectively. The notes payable bear interest at rates ranging from 0% to 16% per annum and are payable monthly.

 

Promissory notes totaling $205,000 have matured as of December 31, 2023.

 

NOTE 7: STOCKHOLDERS’ DEFICIT

 

Common Stock

 

At December 31, 2023, the Company had 1,000,000,000 authorized common shares.

 

At December 31, 2023, the Company has 96,813,626 common shares issued of which 96,501,142 were outstanding, which is net of approximately 312,476 unvested shares issued for the restricted stock awards granted during the year.

 

Issuances of Common Stock During the Six Months Ended December 31, 2023

 

Convertible Notes Payable

During the six months ended December 31, 2023 the Company issued 24,246,430 shares of its common stock related to the conversion of $409,276 of principal and accrued interest, at an average conversion price of $0.0169 per share.

 

Stock Based Compensation

During the six months ended December 31, 2023 the Company issued 30,960,000 shares of its $0.0001 par value common stock as compensation to its directors and officers. The shares were valued at $520,624, or $0.0168 per share, based on the share price at the time of the transactions. The shares vested during the period were issued at different dates, hence, different quoted prices. The grant-date quoted price of the shares that vested for directors and officers ranged from $0.0168 to $0.0169.

 

During the six months ended December 31, 2023 6,129,999 shares of its $0.0001 par value common stock vested to its consultants, as compensation under separate consulting agreements. The shares were valued at $306,100, or $0.05 per share. The shares vested during the period were issued at different dates, hence different quoted prices. The grant-date quoted price of the shares that vested for consultants ranged from $0.0168 to $0.3100. Consultants were granted stock awards in January 2023, at a time when stock prices were trading $0.31, Some of these granted stocks were vested in Q2 2024. Directors, officers, and employees did not receive a stock award on the same date.

 

During the six months ended December 31, 2023 the Company issued 5,320,000 shares of its $0.0001 par value common stock as compensation to its employees. The shares were valued at $89,408, or $0.0168 per share, based on the share price at the time of the transaction.

 

 

 
15

Table of Contents

 

VISIUM TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

 

NOTE 7: STOCKHOLDERS’ DEFICIT, continued

 

Preferred Stock

 

Series A and B issued and outstanding shares of the Company’s convertible preferred stock have a par value of $0.001. All classes rank(ed) prior to any class or series of the Company’s common stock as to the distribution of assets upon liquidation, dissolution or winding up of the Company or as to the payment of dividends. All preferred stock shall have no voting rights except if the subject of such vote would reduce the amount payable to the holders of preferred stock upon liquidation or dissolution of the company and cancel and modify the conversion rights of the holders of preferred stock as defined in the certificate of designations of the respective series of preferred stock.

 

Series A Convertible Preferred Stock

 

The Series A Preferred Stock has a stated value of $750.00 per share. Each one share of Series A Preferred Stock is convertible into one (1) share of Common Stock. In the event the Common Stock price per share is lower than $0.10 (ten cents) per share then the Conversion shall be set at $0.035 per share. The Common Stock shares are governed by Lock-Up/Leak-Out Agreements.

 

Series B Convertible Preferred Stock

 

Thirty million (30,000,000) shares of preferred stock were designated as a new Series B Preferred stock in April 2016. This new Series B Preferred Stock has a $0.001 par value, and each 300 shares is convertible into one share of the Company’s common stock, with a stated value of $375 per share.

 

Series C Convertible Preferred Stock

 

Thirty thousand (30,000) shares of preferred stock were designated as Series C Preferred stock in October 2023. This Series C Preferred Stock has a $0.001 par value, and each share is convertible into the Company’s common stock at a conversion price of $0.075 per share, with a stated value of $100 per share.  There were no Series C Convertible Preferred shares outstanding as of December 31, 2023.

 

Series AA Convertible Preferred Stock

 

In March 2018, the Company authorized and issued one share of Series AA convertible preferred stock which provides for the holder to vote on all matters as a class with the holders of Common Stock and each share of Series AA Convertible Preferred Stock shall be entitled to 51% of the common votes on any matters requiring a shareholder vote of the Company. Each one share of Series AA Convertible Preferred Stock is convertible into one (1) share of Common Stock. Mark Lucky, our CEO and CFO, is the holder of the one share of Series AA Convertible Preferred Stock.

 

Common Stock Warrants

 

In September 2022 we issued 138,667 warrants with a five year life, and a fixed exercise price of $1.35 per share, as part of a modification to three outstanding convertible notes payable. The Company evaluated these amendments under ASC 470-50, “Debt - Modification and Extinguishment”, and concluded that the issuance of these warrants in exchange for deferring the interim interest payments that were due resulted in significant and consequential changes to the economic substance of the debt and thus resulted in accounting for these modifications as an extinguishment of the debt.  The Company recorded a loss of extinguishment of debt of $504,925. These warrants had price protection provisions that allow for the reduction in the current exercise price upon the occurrence of certain events, including the Company’s issuance of common stock or securities convertible into or exercisable for common stock, such as options and warrants, at a price per share less than the exercise price then in effect. For instance, if the Company issues shares of its common stock or options exercisable for or securities convertible into common stock at an effective price per share of common stock less than the exercise price then in effect, the exercise price will be reduced to the effective price of the new issuance. Simultaneously with any reduction to the exercise price, the number of shares of common stock that may be purchased upon exercise of each of these warrants shall be increased proportionately, so that after such adjustment the aggregate exercise price payable for the adjusted number of warrants shall be the same as the aggregate exercise price in effect immediately prior to such adjustment.

 

Due to the price protection features of these warrants, the Company issued 5,048,426 warrant shares to these warrant holders. The difference between the amount of the fair value of the current exercise price and reduced exercise price was treated as deemed dividend.

 

A summary of the status of the Company’s outstanding common stock warrants as of December 31, 2023 and changes during the fiscal year ending on that date is as follows:

 

 

 

Number of

 

 

Weighted Average

 

 

 

Warrants

 

 

Exercise Price

 

Common Stock Warrants

 

 

 

 

 

 

Balance at beginning of year

 

 

5,115,207

 

 

$0.025

 

Granted

 

 

-

 

 

 

-

 

Exercised

 

 

-

 

 

 

-

 

Forfeited

 

 

(631)

 

 

10.395

 

Balance at end of period

 

 

5,114,576

 

 

$0.023

 

 

 

 

 

 

 

 

 

 

Warrants exercisable at end of period

 

 

5,114,576

 

 

$0.023

 

 

 
16

Table of Contents

 

VISIUM TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

 

NOTE 7: STOCKHOLDERS’ DEFICIT, continued

 

The following table summarizes information about common stock warrants outstanding at December 31, 2023:

 

 

 

 

Warrants Outstanding

 

 

Warrants Exercisable

 

Range of

Exercise Price

 

 

Number

Outstanding 

At December 31,

2023

 

 

Weighted

Average

Remaining

Contractual Life

 

Weighted

Average

Exercise

Price

 

 

Number

Exercisable 

At December 31,

2023

 

 

Weighted

Average

Exercise

Price

 

$

0.0169

 

 

 

5,112,426

 

 

3.67 Years

 

$0.0169

 

 

 

5,112,426

 

 

$0.0169

 

 

12.285

 

 

 

1,339

 

 

0.75 Years

 

 

12.285

 

 

 

1,339

 

 

 

12.285

 

 

20.385

 

 

 

811

 

 

0.75 Years

 

 

20.385

 

 

 

811

 

 

 

20.385

 

 

 

 

 

 

5,114,576

 

 

3.67 Years

 

$0.023

 

 

 

5,114,576

 

 

$0.023

 

 

Note 8 - STOCK-BASED COMPENSATION

 

The Company adopted a Stock Incentive Plan on April 18, 2021. This plan is intended to provide incentives which will attract and retain highly competent persons at all levels as employees of the Company, as well as independent contractors providing consulting or advisory services to the Company, by providing them opportunities to acquire the Company’s common stock or to receive monetary payments based on the value of such shares pursuant to Awards issued. While the 2021 Plan terminates 10 years after the adoption date, issued options have their own schedule of termination. Options to acquire shares of common stock may be granted at no less than fair market value on the date of grant. Upon exercise, shares of new common stock are issued by the Company.

 

Under the 2021 Stock Incentive Plan, the Company has issued options to purchase 11,852 shares at an average price of $20.25 with a fair value of $0.00. For the six months ended December 31, 2023 and 2022, the Company did not issue any options to purchase shares, respectively. Upon exercise, shares of new common stock are issued by the Company.

 

For the six months ended December 31, 2023 and 2022, the Company did not recognize any, respectively, of non-cash compensation expense (which would be included in General and Administrative expense in the accompanying Consolidated Statement of Operations) determined by application of a binomial option pricing model with the following inputs: exercise price, dividend yields, risk-free interest rate, and expected annual volatility. As of December 31, 2023, the Company had no unrecognized pre-tax non-cash compensation expense. The Company used straight-line amortization of compensation expense over the one-year requisite service or vesting period of the grant. The Company recognizes forfeitures as they occur. There are options to purchase approximately 2,222 shares that have vested as of December 31, 2023.

  

The Company uses a binomial option pricing model to estimate the fair value of its stock option awards and warrant issuances. The calculation of the fair value of the awards using the binomial option-pricing model is affected by the Company’s stock price on the date of grant as well as assumptions regarding the following:

 

 

 

Six months ended December 31,

 

 

Year ended June 30,

 

 

 

2023

 

 

2023

 

Expected volatility

 

 

-

%

 

-

%

Expected term

 

 

-

 

 

 

-

 

Risk-free interest rate

 

 

-

%

 

-

%

Forfeiture Rate

 

 

-

%

 

-

%

Expected dividend yield

 

 

-

%

 

-

%

 

The expected volatility was determined with reference to the historical volatility of the Company’s stock. The Company uses historical data to estimate option exercise and employee termination within the valuation model. The expected term of options granted represents the period of time that options granted are expected to be outstanding. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury rate in effect at the time of grant.

 

 
17

Table of Contents

 

VISIUM TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

 

Note 8 - STOCK-BASED COMPENSATION, continued

 

A summary of the status of the Company’s outstanding stock options as of December 31, 2023 and June 30, 2023 and changes during the periods ending on that date is as follows:

 

 

 

 

 

 

Weighted Average

 

 

Grant Date

 

 

Aggregate

 

 

Weighted

Average

 

 

 

 

 

 

Exercise

 

 

Fair

 

 

Intrinsic

 

 

Remaining

 

 

 

Shares

 

 

Price

 

 

Value

 

 

Value

 

 

Term (Yrs)

 

Options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At June 30, 2023

 

 

2,222

 

 

$27.00

 

 

$-

 

 

$0

 

 

 

2.33

 

Granted

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Exercised

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Forfeiture and cancelled

 

 

-

 

 

 

-

 

 

 

 

 

 

 

-

 

 

 

-

 

At December 31, 2023

 

 

2,222

 

 

$27.00

 

 

$-

 

 

$0

 

 

 

2.33

 

 

The following table summarizes information about employee stock options outstanding at December 31, 2023:

 

 

 

 

Outstanding Options

 

 

Vested Options

 

 

 

 

Number

 

 

 

 

 

 

Number

 

 

 

 

 

 

 

 

Outstanding

 

 

Weighted

 

 

Weighted

 

 

Exercisable

 

 

Weighted

 

 

Weighted

 

 

 

 

at

 

 

Averaged

 

 

Averaged

 

 

at

 

 

Averaged

 

 

Averaged

 

 

 

 

December 31,

 

 

Remaining

 

 

Exercise

 

 

December 31,

 

 

Exercise

 

 

Remaining

 

Range of Exercise Price

 

 

2023

 

 

Life

 

 

Price

 

 

2023

 

 

Price

 

 

Life

 

$27.00

 

 

 

2,222

 

 

 

2.33

 

 

$27.00

 

 

 

2,222

 

 

$27.00

 

 

 

2.33

 

Outstanding options

 

 

 

2,222

 

 

 

2.33

 

 

$27.00

 

 

 

2,222

 

 

$27.00

 

 

 

2.33

 

 

As of December 31, 2023, the Company had approximately $0 of unrecognized pre-tax non-cash compensation expense.

 

Restricted Stock Awards

 

Restricted stock awards are awards of common stock that are subject to restrictions on transfer and to a risk of forfeiture if the holder leaves the Company before the restrictions lapse or the vesting conditions of the award are not met. The holder of a vested restricted stock award is generally entitled at all times on and after the date of issuance of the restricted shares to exercise the rights of a shareholder of the Company, including the right to vote the shares. The value of stock awards that vest over time was established by the market price on the date of its grant. A summary of the Company’s restricted stock activity for the six months ended December 31, 2023 is presented in the following table:

 

 

 

 

 

Weighted

 

 

 

 

 

Average

 

 

 

 

 

Grant Date

 

 

 

Shares

 

 

Fair Value

 

Unvested at June 30, 2023

 

 

7,297,475

 

 

$0.06

 

Granted

 

 

35,425,000

 

 

$0.0169

 

Forfeited

 

 

-

 

 

$-

 

Vested

 

 

(42,409,999 )

 

$0.022

 

Unvested at December 31, 2023

 

 

312,476

 

 

$0.289

 

 

Unrecognized compensation expense related to outstanding restricted stock awards to employees and directors as of December 31, 2023 was $90,208 and is expected to be recognized over a weighted average period of 0.5 years. The recognition of expense related to vested shares is accounted for as stock-based consulting expense and stock-based compensation expense for a total of $916,132 for the six months ended December 31, 2023.

 

 
18

Table of Contents

 

VISIUM TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

 

NOTE 9: RELATED PARTY TRANSACTIONS

 

Equity transactions with related parties are described in Note 7.

 

From time to time we have borrowed operating funds from Mr. Mark Lucky, our Chief Executive Officer and from certain Directors, for working capital. The advances were payable upon demand and were interest free. At December 31, 2023 there was $139,633 outstanding of such advances made to the Company.

 

NOTE 10 - ACCRUED PAYROLL

 

Accrued payroll consist of the following at:

 

 

 

December 31

 

 

June 30

 

 

 

2023

 

 

2023

 

Accrued Payroll - officers

 

$1,042,362

 

 

$900,846

 

Accrued payroll - staff

 

 

657,017

 

 

 

471,033

 

 

 

$1,699,379

 

 

$1,371,879

 

  

NOTE 11: COMMITMENTS AND CONTINGENCIES

 

Operating Leases

 

The Company operates virtually, with no office space rented. The Company has no future minimum annual payments under non-cancelable operating leases at December 31, 2023.

 

 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 December 31, 2023, and based on the assessment there are no probable loss contingencies requiring accrual or disclosures within its financial statements.

 

License Contingent Consideration

 

Our license agreements with The MITRE Corporation include provisions for a royalty payment on revenues collected of 6%. As of December 31, 2023, we have not generated any revenue related to these license agreements.

 

Legal Claims

 

The Company is subject to litigation, claims, investigations, and audits arising from time to time in the ordinary course of business. Although legal proceedings are inherently unpredictable, the Company believes that it has valid defenses with respect to any matters currently pending against the Company and intends to defend itself vigorously. The outcome of these matters, individually and in the aggregate, is not expected to have a material impact on the Company’s cash flows, results of operations, or financial position.

 

NOTE 12: SUBSEQUENT EVENTS

 

In January 2024 our consultants vested 5,037,500 shares of our $0.0001 par value common stock to three employees as compensation, valued at $94,958, or an average price per share of $0.0189

 

In January 2024 the Company issued 4,300,000 shares of its $0.0001 par value common stock upon the conversion of principal and interest of $74,243 of its outstanding promissory notes, valued at $0.0173 per share.

 

 
19

Table of Contents

 

ITEM 2. Management’s Discussion and Analysis and Results of Operations

 

The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and related notes included elsewhere in this report. Certain statements in this discussion and elsewhere in this report constitute forward-looking statements. See “Cautionary Statement Regarding Forward Looking Information” elsewhere in this report. Because this discussion involves risk and uncertainties, our actual results may differ materially from those anticipated in these forward-looking statements.

 

Overview

 

Visium Technologies, Inc. (“Visium”) was incorporated in Nevada as Jaguar Investments, Inc. during October 1987. During March 2003, a wholly owned subsidiary of the Company merged with Freight Rate, Inc., a development stage company in the logistics software business. During May 2003, the Company changed its name to Power2Ship, Inc. During October 2006, the Company merged with a newly formed, wholly owned subsidiary, Fittipaldi Logistics, Inc., a Nevada corporation, with the Company surviving but its name changed to Fittipaldi Logistics, Inc. effective November 2006. During December 2007, the Company merged with a newly formed, wholly owned subsidiary, NuState Energy Holdings, Inc., a Nevada corporation, with the Company surviving but renamed NuState Energy Holdings, Inc. effective December 2007. In March 2018, the Company brought in a new management team and changed its name to Visium Technologies, Inc.

 

Visium is a provider of cyber security visualization, big data analytics, automation, and IT infrastructure services. In March 2019, Visium entered into a software license agreement with MITRE Corporation to license a patented technology known as CyGraph, a tool for cyber warfare analytics, visualization, and knowledge management. CyGraph is a military-grade, highly scalable big data analytics tool for cyber security, based on graph database technology. The development of the technology was sponsored by the US Army and is currently in use by the U.S. Army Cyber Command. CyGraph provides advanced analytics for cybersecurity situational awareness that is scalable, flexible and comprehensive. Visium has completed significant proprietary product development efforts to commercialize CyGraph, which the Company has rebranded as TruContextTM. The commercialization efforts included adding functionality to the core technology to make it a native cloud application, adding multi-user and multi-tenant capability, enhancing the graphical user interface, (“GUI”) to make the application more intuitive to use, and adding enhanced dashboard and reporting capabilities. TruContextTM would typically be deployed by an enterprise and be used by the security analyst to intuitively understand the massive amount of data flowing through the network environment, giving the analyst actionable information in real-time to ensure that the network is protected from threats. The analyst will understand the relationships of the assets in the data center, the communication patterns, and cybersecurity exposures, in real-time.

 

TruContextTM provides visualization, advanced cyber monitoring intelligence, threat hunting, forensic and root cause analysis, data modeling, analytics, and automation to help reduce risk, simplify security, and deliver better security outcomes. Our mission is to help people see and understand data, empowering decision-makers to make more informed and more timely decisions. Our solutions put the power of data into the hands of everyday people, allowing a broad population of business users to engage with their data, ask questions, solve problems, and create value.

 

Our products dramatically reduce the complexity and expense associated with traditional business intelligence applications. Our software allows people to access information, perform analysis, and share results without assistance from technical specialists. By putting powerful analytical technology directly into the hands of people who make decisions with data, we accelerate the pace of informed and intelligent decision-making. Our TruContextTM platform enables our customers to reduce or streamline their siloed and layered security products, simplifying operations while providing a comprehensive solution. Our solution automates certain previously manual tasks, freeing up personnel to focus on their most important objectives.

 

TruContextTM can be deployed in a broad range of use cases such as cyber security threat intelligence and forensics, IT/OT critical infrastructure security, supply chain analytics, anti-fraud, law enforcement, compliance, and health care. For example, a breach of your network might go undetected for months, as was the case with the Solar Winds hack that occurred in 2019-2020. In that case the hackers went undetected for 14 months. A Solar Winds type breach may not be preventable, but with TruContextTM analyzing streaming network data in real-time, this hack would almost certainly have been identified and remediated very quickly by the affected enterprise.

 

TruContextTM is a highly effective tool for proactively and iteratively searching through networks to detect and isolate advanced threats that evade existing security solutions. Should a breach occur, TruContextTM can quickly perform forensics and root cause analysis, identifying when an incident occurred, how it occurred, and the downstream effects of the incident to the network.

 

One of the top challenges faced by Security practitioners is to keep up with the increase in new cyber attacks while investigating and remediating existing threats. Time is of the essence while investigating potential threats and determining the scope and root-cause of a potential reach.

 

A shortage of resources and experienced personnel continues to limit the ability of companies to conduct thorough investigations. Root cause analysis and forensics are key to intelligently securing the network.

 

 
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TruContextTM directly addresses these challenges by:

 

Providing real-time comprehensive visualized information on security events, that

 

 

·

allow the cyber warrior to immediately pinpoint the root cause of the breach; and

 

·

know with certainty the priority and required remediation.

 

The real-time ingestion of and visualization of massive amounts of data simplifies the cyber effort, allowing the cyber analyst to intuitively understand the security posture of the organization at a glance.

 

Using TruContextTM makes the cyber analyst significantly more productive by eliminating false positives and prioritizing threat events.

 

TruContextTM ingests cyber data from any source, making the data generated by other cyber tools easily understood and actionable. TruContextTM gives the security analyst the ability to combine, layer, filter, and query data with a no-code user interface in a way that no other analytics platform can do.

 

There are many sophisticated and powerful cybersecurity tools currently available, but they all lack one thing – providing a comprehensive contextualized understanding of the data. Analysts have too many tools that do not communicate, creating silos of data/information. TruContextTM brings all the information for a comprehensive visualization.

 

Our information technology consulting services division was launched in September 2023 to provide network engineering, system engineering, converged infrastructure deployment, software development, and cybersecurity services.

 

Visium currently plans to generate revenue in three (3) primary ways:

 

 

·

through a virtual appliance model, primarily targeted to the Federal government, charging an annual seat license, with the seat license fee increasing based on the size of the network environment ;

 

·

through a SaaS model, charging a recurring monthly license fee for TruContextTM based on the size of the network environment and the number of TruContextTM Identifiers (nodes); and

 

·

through professional services to support and deliver project management, engineering, cybersecurity solutions and services to its customers, typically billed on an hourly basis, and delivered through a service contract.

 

Partnership Ecosystem

 

We work with a number of technology alliance partners to design go-to-market strategies that combine our platform with products or services provided by our technology alliance partners. These partner integrations deliver more secure solutions and an improved end user experience to their customers. Our technology alliance partnerships focus on security analytics, network and infrastructure security, threat platforms and orchestration, and automation.

 

Visium heavily relies on our technology and infrastructure to provide our products and services to our customers. For example, we host many of our products using third-party data center facilities, and we do not control the operation of these facilities. In addition, we rely on certain technology that we license from third parties, including third-party commercial software and open-source software, which is used with certain of our solutions.

 

Competition

 

The markets for our solutions are highly competitive, and we expect both the requirements and pricing competition to increase, particularly given the increasingly sophisticated attacks, changing customer preferences and requirements, current economic pressures, and market consolidation. Competitive pressures in these markets may result in price reductions, reduced margins, loss of market share and inability to gain market share, and a decline in sales, any one of which could seriously impact our business, financial condition, results of operations, and cash flows. We may face competition due to changes in the manner that organizations utilize IT assets and the security solutions applied to them, such as the provision of privileged account security functionalities as part of public cloud providers’ infrastructure offerings, or cloud-based identity management solutions. Limited IT budgets may also result in competition with providers of other advanced threat protection solutions such as McAfee, LLC, Palo Alto Networks, Splunk Inc., and Dynatrace. We also may compete, to a certain extent, with vendors that offer products or services in adjacent or complementary markets to privileged access management, including identity management vendors and cloud platform providers such as Okta and Tableau.

 

Employees

 

As of December 31, 2023, we had eight (8) full time employees.

 

Available Information

 

All reports of the Company filed with the SEC are available free of charge through the SEC’s website at www.sec.gov. In addition, the public may read and copy materials filed by the Company at the SEC’s Public Reference Room located at 100 F Street, N.E., Washington, D.C. 20549. The public may also obtain additional information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330.

 

Our principal offices are located at 4094 Majestic Lane, Suite 360, Fairfax, Virginia 22033. Our telephone number is (703) 273-0383.

 

Our common stock is quoted on the OTC Pink under the symbol “VISM.”

 

 
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VISIUM TECHNOLOGIES, INC.

RESULTS OF OPERATIONS

 

Three- and Six-Month Periods Ended December 31, 2023 and 2022

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

$1,083,168

 

 

$533,892

 

 

$1,591,308

 

 

$893,581

 

Development expense

 

 

19,446

 

 

 

47,060

 

 

 

47,809

 

 

 

101,952

 

Total Operating Expenses

 

 

1,102,614

 

 

 

580,952

 

 

 

1,639,117

 

 

 

995,533

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from Operations

 

 

(1,102,614 )

 

 

(580,952 )

 

 

(1,639,117 )

 

 

(995,533 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expenses):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain (loss) on change in fair value of derivative liabilities

 

 

93,085

 

 

 

(45,233 )

 

 

32,689

 

 

 

(33,862 )

Derivative liability expense

 

 

-

 

 

 

(58,139 )

 

 

-

 

 

 

(58,139 )

Gain (loss) on extinguishment of debt

 

 

(66,765 )

 

 

-

 

 

 

(12,035 )

 

 

(504,925 )

Interest expense

 

 

(132,014 )

 

 

(37,199 )

 

 

(178,544 )

 

 

(166,940 )

Total other income (expenses)

 

 

(105,694 )

 

 

(140,571 )

 

 

(157,890 )

 

 

(763,866 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$(1,208,308 )

 

$(721,523 )

 

$(1,797,007 )

 

$(1,759,399 )

 

Selling, General, and Administrative Expenses

 

Six Month Period Ended December 31, 2023

 

For the six months ended December 31, 2023, selling, general and administrative expenses were $1,591,308 as compared to $893,581 for the six months ended December 31, 2022. For the six-month periods ended December 31, 2023 and 2022 selling, general and administrative expenses consisted of the following:

 

 

Six Months Ended

 

 

 

December 31,

 

 

 

2023

 

 

2022

 

Accounting expense

 

$47,710

 

 

$25,357

 

Consulting fees

 

 

105,000

 

 

 

10,000

 

Salaries

 

 

459,189

 

 

 

535,280

 

Legal and professional fees

 

 

31,344

 

 

 

15,900

 

Travel expense

 

 

6,616

 

 

 

249

 

Occupancy expense

 

 

1,100

 

 

 

1,056

 

Telephone expense

 

 

2,687

 

 

 

2,150

 

Marketing expense

 

 

550

 

 

 

292

 

Website expense

 

 

-

 

 

 

40

 

Investor relations expense

 

 

-

 

 

 

288

 

Stock based consulting expense

 

 

306,095

 

 

 

18,906

 

Stock based compensation expense

 

 

610,032

 

 

 

272,659

 

Other

 

 

20,985

 

 

 

11,404

 

 

 

$1,591,308

 

 

$893,581

 

 

The increase in selling, general and administrative expenses of $697,727 during fiscal 2024, when compared with the prior year, is primarily due to an increase in stock-based consulting expense of $287,189, an increase in stock-based compensation expense of $337,373, higher consulting expense of $95,000, higher legal and professional fees expense of $15,444, and higher accounting expense of $22,353, offset by lower salaries expense of $76,091.

 

We believe that our selling, general, and administrative expenses will be lower over the rest of the current fiscal year, driven by decreased stock-based compensation expense, offset by an increase in expenses related to greater business activity over the remainder of fiscal 2024.

 

 
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Development Expense

 

 

 

Six-Months Ended

 

 

 

 

 

 

December 31,

 

 

%

 

 

 

2023

 

 

2022

 

 

Change

 

Development expense

 

$47,809

 

 

$101,952

 

 

(53

%)

 

Development expense represents the expense to further enhance and commercialize CyGraph. We believe that we will incur an additional $50,000 of development expense during the remainder of fiscal 2024.

 

Change in Fair Value of Derivative Liabilities

 

 

 

Six-Months Ended

 

 

 

 

 

 

December 31,

 

 

%

 

 

 

2023

 

 

2022

 

 

Change

 

Gain (loss) on change in fair value of derivative liabilities

 

$32,689

 

 

$(33,862)

 

(196

%)

 

The change in fair value of derivative liabilities results from the changes in the fair value of the derivative liability due to the application of ASC 815, resulting in either income or expense, depending on the difference in fair value of the derivative liabilities between their measurement dates driven by the change in the per share price of the Company’s common stock.

 

Derivative Liability Expense

 

 

 

Six-Months Ended

 

 

 

 

 

 

December 31,

 

 

%

 

 

 

2023

 

 

2022

 

 

Change

 

Derivative liability expense

 

$-

 

 

$(58,139)

 

(100

%)

 

The Company issued convertible notes in October 2022 which provisions contained variable price conversion terms, resulting in a derivative liability expense, measured as of the issuance date of the notes.

 

Interest Expense

 

 

 

Six-Months Ended

 

 

 

 

 

December 31,

 

 

%

 

 

 

2023

 

 

2022

 

 

Change

 

Interest expense

 

$178,544

 

 

$166,940

 

 

 

7%

 

Interest expense represents stated interest of notes and convertible notes payable as well as amortization of debt discount. Interest expense is higher for the six months ended December 31, 2023 due to higher note balances, offset by lower debt discount amortization of $75,060 as compared to the prior year period.

 

Loss on extinguishment of debt 

 

 

 

Six-Months Ended

 

 

 

 

 

December 31,

 

 

%

 

 

 

2023

 

 

2022

 

 

Change

 

Loss on extinguishment of debt

 

$(12,035)

 

$(504,925)

 

 

97.6%

 

In September 2022 we issued 138,667 warrants with a five year life, and a fixed exercise price of $1.35 per share, as part of a modification to three outstanding convertible notes payable. The Company evaluated these amendments under ASC 470-50, “Debt - Modification and Extinguishment”, and concluded that the issuance of these warrants in exchange for deferring the interim interest payments that were due resulted in significant and consequential changes to the economic substance of the debt and thus resulted in accounting for these modifications as an extinguishment of the debt.  Under ASC 470-50, the issuance of these warrants resulted in a loss on the extinguishment of debt, as follows:

 

Value of warrants issued

 

$186,972

 

Write-off of unamortized debt discount

 

 

317,953

 

Loss on extinguishment of debt

 

$504,925

 

 

 
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Three Month Period Ended December 31, 2023

 

For the three months ended December 31, 2023, selling, general and administrative expenses were $1,083,168 as compared to $533,892 for the three months ended December 31, 2022. For the three months ended December 31, 2023 and 2022 selling, general and administrative expenses consisted of the following:

 

 

 

Three Months Ended

 

 

 

December 31,

 

 

 

2023

 

 

2022

 

Accounting expense

 

$17,131

 

 

$4,823

 

Consulting fees

 

 

29,999

 

 

 

-

 

Salaries

 

 

215,799

 

 

 

258,618

 

Legal and professional fees

 

 

10,804

 

 

 

15,200

 

Travel expense

 

 

1,720

 

 

 

-

 

Occupancy expense

 

 

518

 

 

 

504

 

Telephone expense

 

 

1,488

 

 

 

1,062

 

Marketing expense

 

 

550

 

 

 

120

 

Stock based consulting expense

 

 

258,748

 

 

 

3,100

 

Stock based compensation expense

 

 

543,108

 

 

 

245,450

 

Other

 

 

3,303

 

 

 

5,015

 

 

 

$1,083,168

 

 

$533,892

 

 

The increase in selling, general and administrative expenses of $549,276 for the three months ended December 31, 2023, when compared with the prior year period, is primarily due to an increase in stock-based consulting expense of $255,648, an increase in stock-based compensation expense of $297,658, and an increase in consulting fee expense, offset by lower salaries expense of $42,819, and lower legal and professional fees expense of $4,396.

 

Development Expense

 

 

 

Three-Months Ended

 

 

 

 

 

 

December 31,

 

 

%

 

 

 

2023

 

 

2022

 

 

Change

 

Development expense

 

$19,446

 

 

$47,060

 

 

(58.78

%)

 

Change in Fair Value of Derivative Liabilities

 

 

 

Three-Months Ended

 

 

 

 

 

 

December 31,

 

 

%

 

 

 

2023

 

 

2022

 

 

Change

 

Gain (loss) on change in fair value of derivative liabilities

 

$93,085

 

 

$(45,233)

 

 

306%

 

The change in fair value of derivative liabilities results from the changes in the fair value of the derivative liability due to the application of ASC 815, resulting in either income or expense, depending on the difference in fair value of the derivative liabilities between their measurement dates driven by the change in the per share price of the Company’s common stock.

 

Derivative Liability Expense

 

 

 

Three-Months Ended

 

 

 

 

 

 

December 31,

 

 

%

 

 

 

2023

 

 

2022

 

 

Change

 

Derivative liability expense

 

$-

 

 

$(58,139)

 

(100

%)

 

The Company issued convertible notes in October 2022 which provisions contained variable price conversion terms, resulting in a derivative liability expense, measured as of the issuance date of the notes.

 

 
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Loss on extinguishment of debt

 

 

 

 

Three-Months Ended

 

 

 

 

 

December 31,

 

 

%

 

 

 

2023

 

 

2022

 

 

Change

 

Loss on extinguishment of debt

 

$(66,765)

 

$-

 

 

 

100%

 

Interest Expense

 

 

 

Three-Months Ended

 

 

 

 

 

December 31,

 

 

%

 

 

 

2023

 

 

2022

 

 

Change