VISIUM TECHNOLOGIES, INC.

NOTE 1: ORGANIZATION, GOING CONCERN AND BASIS OF PRESENTATION

Visium Technologies, Inc., or the Company, is a Florida-based corporation originally incorporated in Nevada in October 1987. The company has undergone several name changes over its history, reflecting its evolving focus. It was known as Jaguar Investments, Inc. (1987–2003), Power2Ship, Inc. (2003–2006), Fittipaldi Logistics, Inc. (2006–2007), and NuState Energy Holdings, Inc. (2007–2018) before adopting its current name in March 2018.

Visium specializes in cybersecurity visualization, big data analytics, and automation, operating across traditional cybersecurity domains, cloud-based technologies, and the Internet of Things (IoT). In March 2019, Visium entered a software license agreement with MITRE Corporation to utilize CyGraph, a patented tool for cyber warfare analytics, visualization, and knowledge management. CyGraph, a military-grade, highly scalable big data analytics solution, was developed with sponsorship from the U.S. Army and is currently used by the U.S. Army Cyber Command. Visium has significantly enhanced CyGraph to commercialize it asTruContext™, adding functionalities such as cloud-native capabilities, multi-user and multi-tenant support, an intuitive graphical user interface (GUI), and advanced dashboard and reporting features. TruContext™ empowers cybersecurity analysts by providing real-time actionable insights into network data, enabling a comprehensive understanding of asset relationships, communication patterns, and vulnerabilities within enterprise environments.

In November 2023, Visium expanded its scope by securing a $20 million contract through 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. The project includes developing data center architecture, power and civil engineering, network topology, vendor high availability solutions, and a comprehensive security stack that integrates TruContext™. As of March 31, 2025, no activities have commenced under this contract.

In April 2021, Visium establishedJAJ Advisory, LLC, a Virginia-based subsidiary for non-cybersecurity-related business opportunities. As of March 31, 2025, this subsidiary has not undertaken any activities.

Going Concern

The accompanying consolidated financial statements have been prepared on a going concern basis. For the nine months ended March 31, 2025 we had a net loss of $423,221, and had net cash used in operating activities of $253,891 and negative working capital of $5,285,197. 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 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, 2024, contained in the Company’s Annual Report on Form 10-K filed with the SEC on September 30, 2024. The results of operations for the nine months ended March 31, 2025, are not necessarily indicative of results to be expected for any other interim period or the fiscal year ending June 30, 2025.

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Fiscal Year

The fiscal year ends on June 30. References to fiscal year 2025, for example, refer to the fiscal year ending June 30, 2025.

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 nine months ended March 31, 2025 and year ended June 30, 2024.

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 March 31, 2025 and June 30, 2024, the Company did not exceed these FDIC limits.

Derivative Liabilities

The Company assessed the classification of its derivative financial instruments as of March 31, 2025 and June 30, 2024 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 Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“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 reporting period 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 March 31, 2025 of $18,411.

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:

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 2024 the Company issued convertible securities with variable conversion provisions that resulted in derivative liabilities.

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.

Share-Based Payments

The Company accounts for stock-based compensation in accordance with Accounting Standards Update (“ASU”) 2023-07, 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.

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 March 31, 2025, the Company had not filed tax returns for the tax years ending June 30, 2008 through 2024 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.

Segment Reporting

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

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.

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. In periods when losses are reported, the diluted weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive.

For the three and nine months ended March 31, 2025 and 2024, the Company incurred net losses, and as such, the impact of potentially dilutive securities was excluded from the computation of diluted earnings per share as their effect would have been anti-dilutive. Accordingly, basic and diluted net loss per share are the same for all periods presented.

The following table sets forth the weighted-average number of shares outstanding and the potentially dilutive securities that were excluded:

NOTE 3: 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 March 31, 2025 and June 30, 2024 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 $23,155 and a loss of $57,496 for the nine months March 31, 2025 and 2024, respectively in the Company’s consolidated statements of operations, under the caption “Gain on change of fair value of derivative liability”. The fair value of the warrants at March 31, 2025 and June 30, 2024 was $0 and $0, respectively. The fair value of the derivative liability related to the convertible debt at March 31, 2025 and June 30, 2024 is $18,411 and $41,566, respectively, which is reported on the consolidated balance sheets under the caption “Derivative liability”. There were no conversions of these convertible notes during the nine months ended March 31, 2025.

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:

Changes in the derivative liabilities during the nine months ended March 31, 2025 is as follows:

NOTE 4: ACCRUED INTEREST

Changes in accrued interest payable during the nine months ended March 31, 2025 is as follows:

NOTE 5: CONVERTIBLE NOTES PAYABLE

At March 31, 2025 and June 30, 2024 convertible debentures consisted of the following:

The Company had seventeen convertible promissory notes aggregating $214,502 and $534,361 at March 31, 2025 and June 30, 2024, respectively. The related accrued interest amounted to approximately $132,685 and $251,445 at March 31, 2025 and June 30, 2024, 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 $22,500 per share, and two of them have variable convertible prices that caused the derivative treatment for embedded derivative options. See Note 3 for further details. At March 31, 2025, approximately $193,020 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:

For the nine months ended March 31, 2025, the following summarizes the conversion of debt for common shares:

The remaining balance on the Mast Hill convertible note is $0 as of March 31, 2025.

In July 2024 the Company obtained a legal opinion to extinguish aged debt totaling $725,059 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. For the nine months ended March 31, 2025 the gain on extinguishment of debt was:

NOTE 6: NOTES PAYABLE

Notes Payable

The Company had promissory notes aggregating $876,181 and $777,954 at March 31, 2025 and June 30, 2024, respectively. The related accrued interest payable amounted to approximately $136,405 and $288,661 at March 31, 2025 and June 30, 2024, respectively. The notes payable bear interest at rates ranging from 0% to 16% per annum and are payable monthly. Promissory notes totaling $485,000 have matured as of March 31, 2025, and are in default.

In December 2024, the Company entered into a Securities Purchase Agreement with an accredited investor (“the Lender”), pursuant to which the Lender made a loan to us, evidenced by a promissory note in the principal amount of $67,200 (the “Note”). An original issue discount of 15% ($11,200) was applied on the issuance date, and the Company reimbursed the Investor for expenses for legal fees and due diligence of $6,000, resulting in net loan proceeds to us of $50,000. In addition, aone-time interest charge of 15% ($10,080) was applied on the issuance date. Accrued, unpaid interest and outstanding principal, subject to adjustment, is required to be paid in four (4) payments; the initial payment in the amount of $46,368; with the final three (3) payments in the amount of $10,304.00 (a total payback to the Holder of $77,280.00). The loan closed on December 30, 2024.

The Company has the right to prepay the Note at any time with no prepayment penalty.

Upon the occurrence and during the continuation of any Event of Default, the Note shall become immediately due and payable and we will be obligated to pay to the Lender, in full satisfaction of our obligations, an amount equal to 150% times the sum of (w) the then outstanding principal amount of the Note plus (x) accrued and unpaid interest on the unpaid principal amount of the Note to the date of payment plus (y) default interest, if any, at the rate of 22% per annum on the amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed to the Holder pursuant to the conversion rights referred to below.

Following a default, the Lender may in its option, convert the outstanding principal and interest on the Note into shares of our common stock at a conversion price per share equal to 65% of the lowest trading price for the common stock during the twenty (20) trading days prior to the conversion date. We agreed to reserve a number of shares of our common stock equal to four (4) times the number of shares of common stock which may be issuable upon conversion of the Note at all times.

The Note provides for standard and customary events of default such as failing to timely make payments under the Note when due, the failure of the Company to timely comply with the Securities Exchange Act of 1934, as amended, reporting requirements and the failure to maintain a listing on the OTC Markets. The interest rate on the Note increases to 22% upon the occurrence of an event of default. The Note also contains customary positive and negative covenants. The Note includes penalties and damages payable to the Lender in the event we do not comply with the terms of the Note, including in the event we do not issue shares of common stock to the Lender upon conversion of the Note within the time periods set forth therein. Additionally, upon the occurrence of certain defaults, as described in the Note, we are required to pay the Lender liquidated damages in addition to the amount owed under the Note.

At no time may the Note be converted into shares of our common stock if such conversion would result in the Lender and its affiliates owning an aggregate of in excess of 4.99% of the then outstanding shares of our common stock.

In the event that the Note is not repaid and the Lender declares a default, our shareholders may suffer significant dilution if, and to the extent that, the balance of the Note is converted into common stock.

NOTE 7: STOCKHOLDERS’ DEFICIT

Common Stock

On September 18, 2024, the Company adopted and on October 21, 2024, filed the Articles of Amendment to its Articles of Incorporation to increase the number of authorized shares of Common Stock from 1,000,000,000 shares to 3,000,000,000 shares. The board increased the authorized shares to provide for the flexibility to raise additional capital and to execute on the business plan and potential upcoming opportunities.

At March 31, 2025, the Company had 3,000,000,000 authorized common shares.

At March 31, 2025, the Company has 282,094,861 common shares issued and outstanding.

Issuances of Common Stock During the Nine Months Ended March 31, 2025

During the nine months ended March 31, 2025 the Company issued 50,291,270 shares of its common stock related to the conversion of $211,224 of principal, accrued interest, and fees for one of its convertible notes payable, at an average contract conversion price of $0.0042 per share with no gain or loss

Stock Based Compensation

During the nine months ended March 31, 2025 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 fair valued at $52,500, or $0.0042 per share, based on the share price at the time of the transactions, and the related expense is included in Selling, general and administrative expense on the Consolidated Statement of Operations.

During the nine months ended March 31, 20255,350,000 shares of its $0.0001 par value common stock vested to consultants, as compensation under consulting agreements. The shares were fair valued at $23,270, or $0.00435 per share, and the related expense is included in Selling, general and administrative expense on the Consolidated Statement of Operations.

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 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). There were no Series C Convertible Preferred shares outstanding as of March 31, 2025.

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.

NOTE 7: STOCKHOLDERS’ DEFICIT**, continued**

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 March 31, 2025 and changes during the fiscal year ending on that date is as follows:

The following table summarizes information about common stock warrants outstanding at March 31, 2025:

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. For the nine months ended March 31, 2025 and 2024, 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 nine months ended March 31, 2025 and 2024, the Company did not recognize any 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 March 31, 2025, 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 March 31, 2025.

A summary of the status of the Company’s outstanding stock options as of March 31, 2025 and changes during the period ending is as follows:

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock price of $0.003 for the Company’s Common Stock on March 31, 2025 and the closing stock price of $0.0042 for the Company’s Common Stock on June 30, 2024.

The following table summarizes information about employee stock options outstanding at March 31, 2025:

As of March 31, 2025, the Company had $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 nine months ended March 31, 2025 is presented in the following table:

As of March 31, 2025 the Company had no unrecognized pre-tax non-cash compensation expense.

NOTE 9: GAIN ON EXTINGUISHMENT OF DEBT

In July 2024 the Company obtained a legal opinion to extinguish aged debt totaling $725,059 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. For the nine months ended March 31, 2025 the gain on extinguishment of debt was:

NOTE 10: RELATED PARTY TRANSACTIONS

Equity transactions with related parties, if any, 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 March 31, 2025 there was $278,159 outstanding of such advances made to the Company.

NOTE 11 - ACCRUED COMPENSATION

Accrued compensation consist 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 March 31, 2025.

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 March 31, 2025, 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 March 31, 2025, 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 13: SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the date of filing of this Quarterly Report on Form 10-Q, and there were no events or transactions that require recognition or disclosure in the consolidated financial statements.