VISIUM TECHNOLOGIES INC

VISIUM TECHNOLOGIES, INC.

NOTE 1: ORGANIZATION, DESCRIPTION OF BUSINESS AND GOING CONCERN

Visium Technologies, Inc., or the Company, is a Florida corporation that was originally incorporated in Nevada in October 1987. It was formerly known as Jaguar Investments, Inc. between October 1987 and May 2003, Power2Ship, Inc. between May 2003 and November 2006, Fittipaldi Logistics, Inc. between November 2006 and December 2007, and as NuState Energy Holdings, Inc. between December 2007 and March 5, 2018 when it changed its name to Visium Technologies, Inc.

Visium is a provider of cyber security visualization, big data analytics and automation that operates in the traditional cyber security space, as well as in the cloud-based technology and Internet of Things spaces. 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 TruContext TM. 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. TruContext TM would typically be deployed by an enterprise and be used by the cyber analyst to intuitively understand the massive amount of data flowing through the network environment, giving him 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.

In April 2021 the Company created JAJ Advisory, LLC, a Viriginia limited liability company. The LLC was established to account for non-cybersecurity related business activities that the Company may pursue. As of June 30, 2024 there has been no activity in this subsidiary.

The Company is entering the digital transformation and data center design and construction market after it landed a contract in November 2023 valued at over $20 million from its partner, Cybastion Institute of Technology. The contract is 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 civil engineering, controls and distribution systems, rack layouts, network topology, vendor high availability, and a comprehensive security stack solution which will include Visium’s proprietary TruContext TM cybersecurity platform. As of June 30, 2024 no activity has occurred pursuant to this contract.

Going Concern

The accompanying consolidated financial statements have been prepared on a going concern basis. For the year ended June 30, 2024 we had a net loss of $2,878,090, had net cash used in operating activities of $488,319 and had negative working capital of $5,148,969. 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.

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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 and derivative liabilities valuation methods, such as expected volatility, risk-free interest rate, and expected dividend rate and in the valuation allowance of deferred tax assets.

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 years ended June 30, 2024 and 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 June 30, 2024 and 2023, the Company did not exceed these FDIC limits.

Derivative Liabilities

The Company assessed the classification of its derivative financial instruments as of June 30, 2024 and 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 a derivative liability as of June 30, 2024 of $41,566.

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:

The following is the Level 3 activity for the Company’s derivatives:

Additional Disclosures Regarding Fair Value Measurements

The carrying value of cash, accounts payable and accrued expenses, accrued compensation, notes payable, convertible promissory notes payable, approximate their fair value due to the short maturity of these items or the use of market interest rates. At June 30, 2024 and 2023, the fair value of derivative liabilities is estimated using the Cox, Ross & Rubinstein Binomial Tree valuation model using inputs that include the expected volatility, the implied risk-free interest rate, as well as the expected dividend rate. The derivative liabilities are the only Level 3 fair value measures.

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 2020 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.

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 June 30, 2024, 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 2020-07, 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 cybersecurity.

Recent Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) – Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for the exceptions.

The ASU also simplifies the diluted net income per share calculation in certain areas. The new guidance is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, and early adoption is permitted. The Company is currently evaluating the impact of the adoption of the standard on the financial statements.

All other newly issued accounting pronouncements but not yet effective have been deemed immaterial or nonapplicable.

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 includable in the computation of fully diluted per-share results are not presented in the financial statements for the year ended June 30, 2024 and 2023 as their effect would be anti-dilutive. Potential common shares that would be as follows:

NOTE 3: DERIVATIVE LIABILITY

Derivative liability – warrants

The Company may issue warrants with price protection provisions that allow for the reduction in the exercise price of the warrants in the event the Company subsequently issues stock or securities convertible into stock at a price lower than the stated conversion for each warrant. There were no derivative liabilities on warrants as of June 30, 2024 and 2023.

Accounting for Derivative Warrant Liability

The Company’s derivative warrant instruments have been measured at fair value at June 30, 2024 and 2023, respectively, using the Cox, Ross & Rubinstein Binomial Tree valuation model. The Company recognizes the derivative liability related to those warrants that contain price protection features in its consolidated balance sheet as liabilities. The liability is revalued at each reporting period and changes in fair value are recognized currently in the consolidated statements of operations. The initial recognition and subsequent changes in fair value of the derivative warrant liability have no effect on the Company’s cash flows.

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 June 30, 2024 and June 30, 2023 using the Cox, Ross & Rubinstein Binomial Tree valuation model.

The revaluation of the warrants and convertible debt liabilities 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 $39,141 and $17,363 for the years ended June 30, 2024 and 2023, respectively in the Company’s consolidated statements of operations, under the caption “Gain in change of fair value of derivative liability”. The fair value of the warrants liability at June 30 2024 and June 30, 2023 was $0 and $0, respectively. The fair value of the derivative liability related to the convertible debt at June 30, 2024 and June 30, 2023 is $41,566 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:

NOTE 4: CONVERTIBLE NOTES PAYABLE AND NOTE PAYABLE

At June 30, 2024 and June 30, 2023 convertible debentures consisted of the following:

The Company had convertible promissory notes aggregating $534,361 and $937,576 at June 30, 2024 and June 30, 2023, respectively. The related accrued interest amounted to approximately $251,455 and $324,031 at June 30, 2024 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 $0.0042 to $30,375,000 per share, as a result of the two reverse stock splits. At June 30, 2024, approximately $481,383 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.

In September 2022, the Company entered into Amendment #1 with each of the three Investors (the “Amendments”), pursuant to which the following amendments were made to the respective Purchase Agreements, Notes and other transaction documents: (i) the Investors waived the Company’s obligations to make interim payments; (ii) the time period for the Company to file a registration statement for the resale of the shares underlying the Notes was extended until October 31, 2022. Pursuant to the Amendments, the Company issued to each of the Investors a warrant to purchase 138,667 shares in the aggregate of the Company’s common stock (the “Warrants”). The Warrants are exercisable for a period of five years and exercise may be cashless under certain circumstances. The Warrants were exercisable at a price of $1.35 See Note 6.

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.

For the year ended June 30, 2024, the following summarizes the conversion of debt for common shares:

Transactions

In August 2023, the Company entered into a Securities Purchase Agreements with an investor pursuant to which the Company issued a promissory note with a face value of $39,900 in favor of the investor for a purchase price of $38,000. The Note bears an original issue discount of $1,900, and bears interest of 10% per year. The Company reimbursed the Investor for expenses for legal fees and due diligence of $5,000, resulting in net loan proceeds to us of $33,000. The Note matures 12 months after the date of issuance. The Note is convertible into shares of the Company’s common stock at any time during the period the Note is outstanding, at afixed conversion price of $1.50 within 180 days following the issue date and at a variable conversion price of 65% multiplied by certain lowest trading price of the Company’s common stock thereafter. If the Note is paid off in full within 60 days following the issue date a prepayment percentage of 120% will apply for amounts owed. If the Note is paid off from day sixty-one (61) following the issue date to day one hundred eighty (180) days following the Issue Date a prepayment percentage of 125% will apply for amounts owed. After the conversion of principal of $39,900 this Note had been fully repaid as of June 30, 2024.

In September 2023, the Company entered into a Securities Purchase Agreements with an investor pursuant to which the Company issued a promissory note with a face value of $47,000 in favor of the investor for a purchase price of $45,000. The Note bears an original issue discount of $2,000, and bears interest of 10% per year. The Company reimbursed the Investor for expenses for legal fees and due diligence of $5,040, resulting in net loan proceeds to us of $39,960. The Note matures 12 months after the date of issuance. The Note is convertible into shares of the Company’s common stock at any time during the period the Note is outstanding, at afixed conversion price of $1.50 within 180 days following the issue date and at a variable conversion price of 65% multiplied by certain lowest trading price of the Company’s common stock thereafter. If the Note is paid off in full within 60 days following the issue date a prepayment percentage of 120% will apply for amounts owed. If the Note is paid off from day sixty-one (61) following the issue date to day one hundred eighty (180) days following the Issue Date a prepayment percentage of 125% will apply for amounts owed. After the conversion of principal of $15,000 and a payment of $43,172 in cash, this Note had been fully repaid as of June 30, 2024. The repayment amount included a repayment penalty of 25% of the then-outstanding principal and interest, resulting on a loss on extinguishment of debt of $9,106.

In March 2024, the Company entered into a Securities Purchase Agreement with an Investor pursuant to which the Investor purchased a promissory note with a face value of $60,000 made by the Company for a purchase price of $50,000. The Note bears an original issue discount of $10,000, and bears interest of 15% per year. The Note is convertible into shares of the Company’s common stock at a fixed conversion price of $0.10 per share.

During the year ended June 30, 2024, the total shares issued upon conversion of these convertible notes payable at the contractual rate was 85,586,379 with a total principal and interest of $751,784.

The Company recognized interest expense on convertible notes payable of approximately $178,206 and $213,836 during the fiscal years 2024 and 2023, respectively.

Notes Payable

The Company had promissory notes aggregating $777,954 and $380,013 at June 30, 2024 and 2023, respectively. The related accrued interest amounted to approximately $288,661 and $224,010 at June 30, 2024 and June 30, 2023, respectively. The notes payable bear interest at rates ranging from 0% to 20% per annum and are payable monthly. Promissory notes totaling $355,000 that are outstanding as of June 30, 2024 have matured, are in default, and remain unpaid. There is no provision in the note agreements for adjustments to the interest rates on these notes in the event of default.

In July 2023 the Company issued two notes totaling $75,000. The notes have a term of one year, and bear interest at 15%.

In September 2023 the Company issued two notes totaling $60,000. The notes have a term of one year, and bear interest at 15%.

In November 2023 the Company issued a note totaling $50,000. The note has a term of one year, and bears interest at 15%.

In December 2023 the Company issued a note with a face value of $57,500. The note includes an original issue discount of 15% ($7,500), and the Company reimbursed the Investor for expenses for legal fees and due diligence of $5,000, resulting in net loan proceeds of $45,000 In addition, a one-time interest charge of 15% ($8,625) was applied on the issuance date. Accrued, unpaid Interest and outstanding principal, subject to adjustment, is required to be paid in nine (9) payments; the initial six (6) payments in the amount of $9,000.00; the seventh (7 th) payment in the amount of $6,000.00; and the final two (2) payments in the amount of $3,062.50 (a total payback to the Holder of $66,125). This note was repaid in cash in June 2024.

In January 2024 the Company issued a note totaling $50,000. The note has a term of one year, and bears interest at 15%.

In March 2024 the Company issued a note with a face value of $60,000. The note includes an original issue discount of 20% ($10,000), resulting in net loan proceeds of $50,000, has a term of one year, and bears interest at 15%.

In April 2024 the Company issued a note with a face value of $54,900. The note includes an original issue discount of $9,900, and the Company reimbursed the Investor for expenses for legal fees and due diligence of $5,000, resulting in net loan proceeds of $40,000 In addition, a one-time interest charge of 20% ($10,980) was applied on the issuance date. Accrued, unpaid interest and outstanding principal, shall be paid in four payments as follows: October 15, 2024 -$39,528: November 15, 2024 - $8,784; December 15, 2024 $8,784; and January 15, 2025 $8,784, resulting in a total payback to the Holder of $65,880.

In May 2024 the Company issued a note totaling $50,000. The note has a term of one year, and bears interest at 15%.

In June 2024 the Company issued a note with a face value of $60,180. The note includes an original issue discount of $9,180, and the Company reimbursed the Investor for expenses for legal fees and due diligence of $5,000, resulting in net loan proceeds of $45,000 In addition, a one-time interest charge of 15% ($9,027) was applied on the issuance date. Accrued, unpaid Interest and outstanding principal, subject to adjustment, shall be paid in nine (9) payments. The first payment shall be due July 15, 2024; and eight (8) subsequent payments shall be due on the 15th of each month thereafter. The first eight (8) payments shall each in the amount of $8,525.88 and the final payment shall be in the amount of $1,000, for a total payback to the Holder of $69,207.

The Company recognized interest expense on promissory notes payable of approximately $71,551 and $24,920 during the fiscal years 2024 and 2023, respectively.

NOTE 5: ACCRUED INTEREST PAYABLE

Changes in accrued interest payable during the year ended June 30, 2024 and 2023, is as follows:

Interest expense for year ended June 30, 2024 and 2023 was comprised of the following:

NOTE 6: STOCKHOLDERS’ DEFICIT

Common Stock

At June 30, 2024, the Company had 1,000,000,000 authorized common shares. At June 30, 2024, the Company has 213,953,591 common shares issued and outstanding.

Issuances of Common Stock During 2024

During fiscal 2024 we issued shares of our common stock as follows:

During the year ended June 30, 2024 the Company issued 85,586,379 shares of its common stock related to the conversion of $723,784 of principal and accrued interest of its convertible notes payable, at an average contract conversion price of $0.0088 per share, with a cost of $28,000, for a total of $751,784.

During the year ended June 30, 2024, the Company issued 60,960,000 shares of its common stock as compensation to its directors and officers. The shares were valued at $646,624, or $0.0106 per share, based on the quoted share price at the time of the transactions.

During the year ended June 30, 2024, the Company issued and vested 24,742,499 shares of its $0.0001 par value common stock to consultants, as compensation. The shares were valued at $463,118, or $0.0187 per share, based on the quoted share price at the time of the transactions.

During the year ended June 30, 2024, the Company issued and vested 12,820,000 shares of its $0.0001 par value common stock to its employees, as compensation. The shares were valued at $120,908, or $0.0094 per share, based on the quoted share price at the time of the transactions.

Issuances of Common Stock During the Year ended June 30, 2023

During fiscal 2023 we issued shares of our common stock as follows:

During the year ended June 30, 2023 the Company issued 19,235,473 shares of its common stock related to the conversion of $718,325 of principal and accrued interest of its convertible notes payable, at an average contract conversion price of $0.039 per share, with a cost of $48,334, for a total of $766,659. The fair value of the shares issued was $753,394, which created a loss of conversion of $12,062.

Sale of Restricted Common Stock

During the year ended June 30, 2023, the Company sold 2,012,500 shares of its $0.0001 par value common stock valued at $40,250, or $0.02 per share.

Commitment Shares

During the year ended June 30, 2023, we issued 66,668 shares of its common stock as commitment shares related to a financing transaction that raised an aggregate $150,000. The relative fair value of the commitment shares totaled $14,000 and was accounted for as discount on the related notes payable, which is being amortized over the term of the note.

During the year ended June 30, 2023, the Company issued 4,045,928 shares of its $0.0001 par value common stock as compensation to its directors and officers. The shares were valued at $564,125, or $0.14 per share, based on the quoted share price at the time of the transactions.

During the year ended June 30, 2023, the Company issued and vested 664,002 shares of its $0.0001 par value common stock to three consultants, as compensation under three separate consulting agreements. The shares were valued at $74,196, or $0.11 per share, based on the quoted share price at the time of the transactions.

During the year ended June 30, 2023, the Company issued and vested 855,002 shares of its $0.0001 par value common stock to its employees, as compensation. The shares were valued at $218,155, or $0.26 per share, based on the quoted share price at the time of the transactions.

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. As a result of this transaction the difference between the amount of the fair value of the current exercise price and reduced exercise price amounting to $145,704 is recorded as a deemed dividend with a corresponding increase and decrease in additional paid in capital as of June 30, 2023. Additionally, for the year ended June 30, 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.

A summary of the status of the Company’s outstanding common stock warrants as of June 30, 2024 and 2023 and changes during the fiscal years ending on these dates is as follows:

The following table summarizes information about common stock warrants outstanding at June 30, 2024:

In September 2022 we issued 138,667 warrants with a five year life, and a fixed exercise price of $1.35 per share, as a modification fee 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:

During the year ended June 30, 2023 we recorded a loss on the conversion of convertible note totalling $12,062, which is recorded in the Consolidated Statement of Operations as loss on extinguishment of debt.

A recap of the Loss on extinguishment of debt follows:

Preferred Stock

Series A, B, and AA issued and outstanding shares of the Company’s convertible preferred stock have a par value of $0.001. All classes ranked 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 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. In the event of any liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or involuntary, the holder of Series A Preferred Stock shall be entitled to receive, on parity with other Preferred Share Holders, assets of the Corporation available for distribution to the holders of capital stock of the Corporation. The Series B Preferred Stock shall have priority and preference with respect to any distribution of any of the assets of the Corporation to Common Stock shareholders.

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 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. In the event of any liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or involuntary, the holder of Series B Preferred Stock shall be entitled to receive, on parity with other Preferred Share Holders, assets of the Corporation available for distribution to the holders of capital stock of the Corporation. The Series B Preferred Stock shall have priority and preference with respect to any distribution of any of the assets of the Corporation to Common Stock shareholders.

Series C Convertible Preferred Stock

Thirty thousand (30,000) shares of preferred stock were designated as a new Series C Preferred stock in October 2023. This new Series C Preferred Stock has a $0.001 par value, and has a stated value of $100 per share. The Series C shares are convertible into shares of the Company’s common stock at the price of $0.075 per share, subject to customary adjustment, including in the event of certain issuances at a price lower than $0.075 per share, as set forth in the Certificate of Designations for the Series C Preferred. The shares of the Series C Preferred shall rank (i) senior to the Company’s Common Stock and any other class or series of capital stock of the Company hereafter created, the terms of which specifically provide that such class or series shall rank junior to the Series C Preferred (each of the securities in clause (i) collectively referred to as “Junior Stock”) and (ii)pari passuwith the Company’s Series A Preferred Stock, Series B Preferred Stock, Series AA Preferred Stock and any class or series of capital stock of the Company hereafter created and specifically ranking, by its terms, on par with the Series C Preferred, in each case as to dividend distributions or distributions of assets upon liquidation, dissolution or winding up of the Company or a Deemed Liquidation Event, whether voluntary or involuntary. Holders of the Series C Preferred will vote together with the holders of the Company’s Common Stock on an as-converted basis on each matter submitted to a vote of holders of Common Stock (whether at a meeting of shareholders or by written consent).

Series AA Convertible Preferred Stock

In March 2018, the Company authorized and issued one (1) 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 Chief Executive Officer, is the holder of the one (1) share of Series AA Convertible Preferred Stock.

NOTE 7 -STOCK-BASED COMPENSATION

The Company adopted an Incentive Stock 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 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 2,222 shares at an average price of 27.00 with a fair value of $0.00. For the years ended June 30, 2024 and 2023, the Company did not issue any options to purchase shares. Upon exercise, shares of new common stock are issued by the Company.

For the years ended June 30, 2024 and 2023, the Company recognized an expense of approximately $0 and $0, respectively, of non-cash compensation expense (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 June 30, 2024, the Company had approximately $0 of 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 June 30, 2024.

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:

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.

A summary of the status of the Company’s outstanding stock options as of June 30, 2024 and 2023 and changes during the periods ending on that date is as follows:

The following table summarizes information about employee stock options outstanding at June 30, 2024:

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. The holder of a 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. Please refer to Note 6 for a description of the restricted stock awards granted during the fiscal year and the expense of these awards.

A summary of the Company’s restricted stock activity for the year ended June 30, 2024 and 2023 is presented in the following table:

Unrecognized compensation expense related to outstanding restricted stock awards to consultants as of June 30, 2024 was $0.

NOTE 8: LOSS ON EXTINGUISHMENT OF DEBT

During the year ended June 30, 2024 we recorded a loss on the conversion of convertible note totaling $21,141, which is recorded in the Consolidated Statement of Operations as loss on extinguishment of debt.

A recap of the Loss on extinguishment of debt in fiscal 2024 follows:

In September 2022 we issued 138,667 warrants with a five year life, and a fixed exercise price of $1.35 per share, as a modification fee 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:

During the year ended June 30, 2023 we recorded a loss on the conversion of convertible note totaling $12,062, which is recorded in the Consolidated Statement of Operations as loss on extinguishment of debt.

A recap of the Loss on extinguishment of debt follows:

NOTE 9: INCOME TAXES

The Company has not filed its corporate tax returns since fiscal 2008.

Due to recurring losses, the Company’s tax provision for the years ended June 30, 2024 and 2023 was $0.

The difference between the effective income tax rate and the applicable statutory federal income tax rate is summarized as follows:

At June 30, 2024 and 2023 the Company’s deferred tax assets were as follows:

As of June 30, 2024, the Company had unused net operating loss carry forwards of approximately $40.6 million available to reduce future federal taxable income. Net operating loss carryforwards expire through fiscal years ending 2040. Internal Revenue Code Section 382 places a limitation on the amount of taxable income that can be offset by carryforwards after a change in control (generally a greater than 50% change in ownership).

NOTE 9: INCOME TAXES, continued

The Company’s ability to offset future taxable income, if any, with tax net operating loss carryforwards may be limited due to the non-filing of tax returns and the impact of the statute of limitations on the Company’s ability to claim such benefits. Furthermore, changes in ownership may result in limitations under Internal Revenue Code Section 382. Due to these limitations, and other considerations, management has established full valuation allowances on deferred tax assets relating to net operating loss carryforward, as the realization of any future benefits from these assets is uncertain.

The Company’s valuation allowance at June 30, 2024 and 2023 was $8,416,000 and $8,119,000, respectively. The change in the valuation allowance during the year ended June 30, 2024 was an increase of approximately $297,000.

The Company has no uncertain tax positions that require the Company to record a liability.

The Company had no accrued penalties and interest related to taxes as of June 30, 2024.

NOTE 10: 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. $182,633 in advances remain outstanding as of June 30, 2024. Mr. Lucky is owed $1,341 for out-of-pocket expenses as of June 30, 2024, which is included on the balance sheet in Accounts payable and accrued expenses.

NOTE 11 - ACCRUED COMPENSATION

Accrued compensation consists of the following at:

NOTE 12: 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 June 30, 2024.

NOTE 12: COMMITMENTS AND CONTINGENCIES, continued

Contingencies

The Company accounts for contingent liabilities in accordance with Accounting Standards Codification (“ASC”) Topic 450,Contingencies. This guidance requires management to assess potential contingent liabilities that may exist as of the date of the financial statements to determine the probability and amount of loss that may have occurred, which inherently involves an exercise of judgment. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. For loss contingencies considered remote, no accrual or disclosures are generally made. Management has assessed potential contingent liabilities as of June 30, 2024, and based on the assessment there are no probable loss contingencies requiring accrual or disclosures within its financial statements.

License Contingent Consideration

Our license agreement with The MITRE Corporation includes a provision for a royalty payment on revenues collected of 6%. As of June 30, 2024 and 2023, we have not generated any revenue related to these license agreements.

NOTE 13 – FAIR VALUE MEASUREMENT

Fair value measurements

At June 30, 2024 and 2023, the fair value of derivative liabilities is estimated using the Cox, Ross & Rubinstein Binomial Tree valuation model using inputs that include the expected volatility, the implied risk-free interest rate, as well as the expected dividend rate. The derivative liabilities are the only Level 3 fair value measures.

At June 30, 2023, the estimated fair values of the liabilities measured on a recurring basis are as follows:

At June 30, 2024, the estimated fair values of the liabilities measured on a recurring basis are as follows:

NOTE 14: SUBSEQUENT EVENTS

On July 25, 2024, Visium Technologies, Inc. (“Company”) received the written resignations of Wayne Monk, Solomon Adote, and Dr. Emmanuel Esaka from their positions as Directors of the Company. Their resignations were attributed to personal and professional reasons, and there were no disagreements between these Directors and the Company or its management.

In August 2024 the Company issued 12,500,000 shares of its $0.0001 par value common stock as compensation to its directors and officers. The shares were valued at $52,500, or $0.0042 per share, based on the quoted share price at the time of the transactions.

In August 2024 the Company issued and vested 2,350,000 shares of its $0.0001 par value common stock to four consultants, as compensation under four separate consulting agreements. The shares were valued at $10,670, or $0.0045 per share, based on the quoted share price at the time of the transactions.

In August 2024 the Company issued 10,691,000 shares of its common stock related to the conversion of $43,152 of principal and accrued interest of its convertible notes payable, at an average contract conversion price of $0.0042 per share.

In September 2024 the Company obtained a legal opinion to extinguish aged debt totaling $787,272 as detailed in the following table. Each of the individual debt instruments were determined to be beyond the statute of limitations and it was determined that the Company has a complete defense to liability related to this debt under the applicable statute of limitations.

The Company will record this debt extinguishment in the quarter ending September 30, 2024.