VISM 10-Q
Visium Technologies, Inc. (VISM)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ___________ to ___________.
Commission file number
(Exact name of registrant as specified in its charter) |
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(State of Incorporation) |
| (IRS Employer Identification No.) |
(Address of principal executive offices)
(
Registrant’s telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
| Trading Symbol(s) |
| Name of each exchange on which registered |
N/A |
| N/A |
| N/A |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer | ☐ | Accelerated filer | ☐ |
☒ | Smaller Reporting Company | ||
Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
The number of shares outstanding of the registrant’s Common Stock, $0.0001 par value per share, as of May 20, 2026, was
When used in this quarterly report, the terms “Visium,” “the Company,” “we,” “our,” and “us” refer to Visium Technologies, Inc., a Florida corporation.
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are based on our management's current beliefs, estimates and assumptions and on information currently available to management that we believe may affect our financial condition, results of operation, business strategy and financial need. Such statements involve substantial risk and uncertainties. All statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, including statements regarding our future operating results and financial position, our business strategy and plans, market growth and trends, and objectives for future operations are forward-looking statements. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions.
These risks and uncertainties include, among other things, risks related to our expectations regarding global macro-economic conditions, including the effects of inflation, rising and fluctuating interest rates and market volatility on the global economy; our ability to estimate the size and growth of our total addressable market, and the development of the market for our products, which is new and evolving; our ability to effectively sustain and manage our growth and future expenses, achieve and maintain future profitability, attract new customers; the effects of increased competition in our market and our ability to compete effectively; our ability to expand use cases within existing customers and vertical solutions; our ability to expand our operations and increase adoption of our platform internationally; our ability to expand our direct sales force, customer success team and strategic partnerships around the world; the sufficiency of our cash and capital resources to satisfy our liquidity needs; our ability to hire, retain and motivate qualified personnel, including executive level management; and our ability to successfully manage and integrate executive management transitions; uncertainties regarding the impact of general economic and market conditions, including as a result of regional and global conflicts or related government sanctions.
Most of these factors are difficult to predict and are generally beyond our control. Therefore, you should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. We undertake no obligation to update any forward-looking statements after the date of this Quarterly Report on Form 10-Q or to conform such statements to actual results or revised expectations, except as required by law. Further information on potential factors that could affect our business is described under “Item 1A. Risk Factors” in our Annual Report on Form 10-K as filed with the United States Securities and Exchange Commission, or the SEC, on October 7, 2025. Readers are also urged to carefully review and consider the various disclosures we have made in this Quarterly Report on form 10-Q and in our Annual Report on Form 10-K.
2 |
VISIUM TECHNOLOGIES, INC. AND SUBSIDIARIES
INDEX
| 3 |
| Table of Contents |
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
VISIUM TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEETS
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| March 31 2026 |
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| June 30, 2025(1) |
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ASSETS |
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Current assets: |
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Cash |
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Prepaid expenses |
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Total current assets |
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Total assets |
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LIABILITIES AND STOCKHOLDERS’ DEFICIT |
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Current liabilities: |
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Accounts payable and accrued expenses |
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Accrued compensation |
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Accrued interest |
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Due to officer |
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Convertible notes payable, net of discount of $ |
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Derivative liabilities |
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Notes payable, net of discount of $ |
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Total current liabilities |
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Commitments and contingencies (Note 11) |
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Stockholders’ deficit: |
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Preferred stock |
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Series A Convertible Stock ($ |
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Series B Convertible Stock ($ |
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Series C Convertible Stock ($ |
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Series AA Convertible Stock ($ |
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Common stock, $ |
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Additional paid in capital |
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Accumulated deficit |
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Total stockholders’ deficit |
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Total liabilities and stockholders’ deficit |
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(1) Derived from audited financial statements.
See Notes to Unaudited Consolidated Financial Statements.
| 4 |
| Table of Contents |
VISIUM TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
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| Three Months Ended |
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| Nine Months Ended |
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| 2026 |
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| 2025 |
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Net revenues |
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Operating expenses: |
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Selling, general and administrative |
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Development expense |
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Total Operating Expenses |
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Loss from Operations |
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Other income (expenses): |
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Gain (loss) on change in fair value of derivative liabilities |
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Gain (loss) on extinguishment of debt |
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Interest expense |
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Total other income (expenses) |
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Loss before income taxes |
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Provision for income taxes |
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Net Loss |
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Loss per common share basic and diluted |
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Weighted average common shares outstanding – basic and diluted |
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See Notes to Unaudited Consolidated Financial Statements.
| 5 |
| Table of Contents |
VISIUM TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2026
(UNAUDITED)
Nine Months ended March 31, 2026
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| Preferred |
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| Stock - |
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| Stock |
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| $0.001 |
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| $0.001 |
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| $0.001 |
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| $0.0001 |
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| Additional |
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| Total |
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| Par Value |
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| Paid-in |
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| Accumulated |
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| Stockholders’ |
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| Shares |
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Balance at June 30, 2025 |
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Shares issued as compensation to directors and officers |
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Shares issued as compensation to employees |
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Shares issued for consulting services |
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Commitment shares issued pursuant to financings |
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Shares issued for conversion of notes payable |
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Net income (loss) for the Nine Months ended March 31, 2026 |
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Balance at March 31, 2026 |
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Three months ended March 31, 2026
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| Par Value |
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| Paid-in |
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Balance at December 31, 2025 |
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Shares issued as compensation to directors and officers |
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Commitment shares issued pursuant to financings |
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Shares issued for conversion of notes payable |
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Net income (loss) for the three months ended March 31, 2026 |
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Balance at March 31, 2026 |
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| 6 |
| Table of Contents |
VISIUM TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2025
(UNAUDITED)
Nine months ended March 31, 2025
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| Preferred Stock - Series A $0.001 Par Value |
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| Preferred Stock - Series B $0.001 Par Value |
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| Preferred Stock - Series C $0.001 Par Value |
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| Preferred Stock - Series AA $0.001 Par Value |
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| Common Stock $0.0001 Par Value |
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| Additional Paid-in |
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| Accumulated |
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| Total Stockholders’ |
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| Shares |
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| Amount |
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| Amount |
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| Capital |
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| Deficit |
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Balance at June 30, 2024 |
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|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued as compensation to directors and officers |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Shares issued for consulting services |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Shares issued for conversion of notes payable |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Net loss for the nine months ended March 31, 2025 |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | ||||||
Balance at March 31, 2025 |
|
|
|
|
|
|
|
|
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) | |||||||||||
Three months ended March 31, 2025
|
| Preferred Stock - Series A $0.001 Par Value |
|
| Preferred Stock - Series B $0.001 Par Value |
|
| Preferred Stock - Series C $0.001 Par Value |
|
| Preferred Stock - Series AA $0.001 Par Value |
|
| Common Stock $0.0001 Par Value |
|
| Additional Paid-in |
|
| Accumulated |
|
| Total Stockholders’ |
| ||||||||||||||||||||||||||||
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Capital |
|
| Deficit |
|
| Deficit |
| |||||||||||||
Balance at December 31, 2024 |
|
|
|
|
|
|
|
|
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for conversion of notes payable |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Net loss for the three months ended March 31, 2025 |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | ||||||
Balance at March 31, 2025 |
|
|
|
|
|
|
|
|
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) | |||||||||||
See Notes to Unaudited Consolidated Financial Statements.
| 7 |
| Table of Contents |
VISIUM TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
| Nine-months ended |
| |||||
|
| March 31, |
| |||||
|
| 2026 |
|
| 2025 |
| ||
Cash flows from operating activities: |
|
|
|
|
|
| ||
Net loss |
| $ | ( | ) |
| $ | ( | ) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
|
|
|
| ||
Amortization of debt discount |
|
|
|
|
|
| ||
(Gain) Loss on change in fair value of derivative liability |
|
| ( | ) |
|
| ( | ) |
(Gain) loss on extinguishment of debt |
|
|
|
|
| ( | ) | |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
|
|
|
|
|
| ||
Prepaid license fee |
|
| ( | ) |
|
|
| |
Accrued interest |
|
|
|
|
|
| ||
Accrued compensation |
|
|
|
|
|
| ||
Net cash used in operating activities |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
Proceeds from promissory notes payable |
|
|
|
|
|
| ||
Repayment of promissory notes payable |
|
| ( | ) |
|
| ( | ) |
Advances from officers |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Net cash provided by financing activities |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash |
|
| ( | ) |
|
|
| |
|
|
|
|
|
|
|
|
|
Cash, beginning of period |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Cash, end of period |
| $ | 665 |
|
| $ | 22,211 |
|
|
|
|
|
|
|
|
|
|
Supplemental disclosures of cash flow information: |
|
|
|
|
|
|
|
|
Cash paid for interest |
| $ |
|
| $ |
| ||
Cash paid for income taxes |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
Non-cash investing and financing activities: |
|
|
|
|
|
|
|
|
Issuance of common stock for conversion of notes payable, accrued interest, and fees |
| $ |
|
| $ |
| ||
See Notes to Unaudited Consolidated Financial Statements.
| 8 |
| Table of Contents |
VISIUM TECHNOLOGIES, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
NOTE 1: ORGANIZATION, GOING CONCERN AND BASIS OF PRESENTATION
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 advanced data analytics and Agentic Artificial Intelligence solutions, along with IT infrastructure professional services that include network engineering, system engineering, converged infrastructure deployment, software development, and cybersecurity services. Visium’s proprietary data analytics cyber security visualization and automation platform operates in the Agentic Artificial Intelligence space, with an emphasis on cyber security, as well as the Internet of Things and data analytics. Visium’s proprietary technology, TruContextTM is an agentic AI platform that is highly scalable for big data analytics and cyber security use cases. TruContextTM provides advanced analytics for cybersecurity situational awareness that is scalable, flexible and comprehensive. TruContextTM would typically be deployed by an enterprise and be used by the security analyst to intuitively understand the massive amounts of data flowing through the network environment, giving the analyst actionable information in real-time to ensure that the network is protected from threats. The analyst will understand the relationships of the assets in the data center, the communication patterns, and cybersecurity exposures, in real-time.
Central to this transformation is the latest advanced version of TruContext™, Visium’s flagship platform which is now enhanced with next-generation Agentic AI capabilities. Unlike traditional AI that simply analyzes data, Agentic AI can independently reason, plan, and execute complex tasks, acting as a trusted partner to human operators. The TruContext approach solves the “Hallucination” problem which is common with traditional analytics or generic LLMs. TruContext’s unique architecture grounds AI decisions in verifiable facts, offering the "glass box" transparency and audit trails required by highly regulated sectors like defense and utilities.
In April 2021 the Company created JAJ Advisory, LLC, a Virginia limited liability company. The LLC was established to account for non-cybersecurity-related business activities that the Company may pursue. As of March 31, 2026 there has been no activity in this subsidiary.
Going Concern
The accompanying consolidated financial statements have been prepared on a going concern basis. For the nine months ended March 31, 2026 we had a net loss of $
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, 2025, contained in the Company’s Annual Report on Form 10-K filed with the SEC on October 7, 2025. The results of operations for the nine months ended March 31, 2026, are not necessarily indicative of results to be expected for any other interim period or the fiscal year ending June 30, 2026.
| 9 |
| Table of Contents |
VISIUM TECHNOLOGIES, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Fiscal Year
The fiscal year ends on June 30. References to fiscal year 2026, for example, refer to the fiscal year ending June 30, 2026.
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, 2026 and year ended June 30, 2025.
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 $
Derivative Liabilities
The Company evaluates its convertible instruments to determine if those contracts or embedded components of those contracts qualify as derivatives. Upon the occurrence of an event of default, certain promissory notes may become convertible at variable rates or trigger penalty provisions that require the bifurcation of embedded conversion options. In such instances, the Company recognizes the fair value of the derivative liability on the date of default, with a corresponding charge to discount on convertible notes, which is then amortized as interest expense over the remaining life of the note.
The Company assessed the classification of its derivative financial instruments as of March 31, 2026 and June 30, 2025 which consist of convertible instruments and rights to shares of the Company’s common stock, and determined that such derivatives meet the criteria for liability classification under ASC 815.
ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional, as described.
The Company uses judgment in determining the fair value of derivative liabilities at the date of issuance and at every balance sheet thereafter and in determining which valuation method is most appropriate for the instrument, the expected volatility, the implied risk-free interest rate, as well as the expected dividend rate, if any. The Company recorded derivative liabilities as of March 31, 2026 of $
| 10 |
| Table of Contents |
VISIUM TECHNOLOGIES, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
Fair Value of Financial Instruments
The Company accounts for assets and liabilities measured at fair value on a recurring basis, in accordance with ASC Topic 820, Fair Value Measurements and Disclosures, or ASC 820. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring fair value, and expands disclosure about such fair value measurements.
ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:
Level 1: | Observable inputs such as quoted market prices in active markets for identical assets or liabilities. |
|
|
Level 2: | Observable market-based inputs or unobservable inputs that are corroborated by market data. |
|
|
Level 3: | Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. |
The following is the Level 3 activity for the Company’s derivatives:
Derivative liability at June 30, 2025 |
| $ |
| |
Discount of convertible notes payable |
|
|
| |
Gain on change in fair value of derivative liability |
|
| ( | ) |
Derivative liability at March 31, 2026 |
| $ |
|
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 2026 the Company 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.
| 11 |
| Table of Contents |
VISIUM TECHNOLOGIES, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
Share-Based Payments
The Company accounts for stock-based compensation in accordance with ASU 2018-07, 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, 2026, the Company had not filed tax returns for the tax years ending June 30, 2008 through 2025 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.
| 12 |
| Table of Contents |
VISIUM TECHNOLOGIES, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
Segment Reporting
The Company operates in a single business segment, with all technologies, products, and services focused on cybersecurity and data analytics. This includes advanced AI-driven cybersecurity solution development, related IT infrastructure professional services, and digital transformation initiatives, all managed as an integrated business. The proprietary TruContext platform, together with professional services for deployment and integration within complex enterprise environments, represents the core of operations.
In accordance with ASC 280, Segment Reporting, the Company’s Chief Operating Decision Maker (CODM), the Chief Executive Officer, reviews financial performance and makes resource allocation decisions on a consolidated basis. All significant operational and strategic decisions are made considering the Company as a single operating unit.
As a result, the Company does not have multiple operating segments with separate financial results, and segment reporting is not applicable. All revenues, operating results, and assets are attributable to this single cybersecurity segment, encompassing both product and service offerings, consistent with how the CEO evaluates performance and allocates resources.
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 loss per share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during each period. Diluted loss per share is computed using the weighted-average number of shares of common stock and all potentially dilutive common stock equivalents outstanding during the period. Potentially dilutive common stock equivalents consist of shares issuable upon the exercise of in-the-money stock options and warrants (calculated using the treasury stock method) and upon the conversion of convertible promissory notes and convertible preferred stock.
Because the Company reported a net loss for all periods presented, all potentially dilutive securities are anti-dilutive and are therefore excluded from the computation of diluted loss per share. Accordingly, the weighted-average shares outstanding used to compute basic loss per share and diluted loss per share are identical for all periods presented.
The following table sets forth the computation of basic and diluted loss per share for the three and nine months ended March 31, 2026 and 2025:
|
| Three Months Ended March 31, 2026 |
|
| Three Months Ended March 31, 2025 |
|
| Nine Months Ended March 31, 2026 |
|
| Nine Months Ended March 31, 2025 |
| ||||
Numerator |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net loss |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
Denominator |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding — basic |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Effect of dilutive securities |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Weighted-average common shares outstanding — diluted |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Loss per common share — basic and diluted |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
The following potentially dilutive securities were excluded from the computation of diluted loss per share for the nine months ended March 31, 2026 and 2025, respectively, because their inclusion would have been anti-dilutive:
|
| Nine Months Ended March 31, 2026 |
|
| Nine Months Ended March 31, 2025 |
| ||
Convertible promissory notes |
|
|
|
|
|
| ||
Convertible preferred stock |
|
|
|
|
|
| ||
Common stock options |
|
|
|
|
|
| ||
Warrants |
|
|
|
|
|
| ||
Total potentially dilutive securities excluded |
|
|
|
|
|
| ||
NOTE 3: DERIVATIVE LIABILITIES
Derivative liability – convertible notes
During the three months ended March 31, 2026, five separate notes went into default. These defaults triggered variable conversion features and penalty provisions that met the criteria for liability classification under ASC 815. Consequently, the Company recorded an initial discount on convertible notes of $
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, 2026 and June 30, 2025 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 $
| 13 |
| Table of Contents |
VISIUM TECHNOLOGIES, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
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:
|
| Nine Months ended March 31, |
| |||||
|
| 2026 |
|
| 2025 |
| ||
Effective exercise price |
| $ |
|
| $ |
| ||
Effective market price |
| $ |
|
| $ |
| ||
Expected volatility |
|
| % |
| % | |||
Risk-free interest |
|
| % |
|
| % | ||
Expected terms |
|
|
|
| ||||
Expected dividend rate |
|
| % |
|
| % | ||
Changes in the derivative liabilities during the nine months ended March 31, 2026 is follows:
Derivative liability at June 30, 2025 |
| $ |
| |
Initial recognition upon note defaults (charged to debt discount) |
|
| |
|
Gain on change in fair value of derivative liability |
| $ | ( | ) |
Derivative liability at March 31, 2026 |
| $ |
|
NOTE 4: ACCRUED INTEREST PAYABLE
Changes in accrued interest payable during the nine months ended March 31, 2026 is as follows:
Accrued interest payable at June 30, 2025 |
| $ |
| |
Conversion of accrued interest into common stock |
|
| ( | ) |
Interest expense paid in cash |
|
| ( | ) |
Interest expense accrued for the nine months ended March 31, 2026 |
|
|
| |
Write off of accrued interest payable |
|
|
| |
Accrued interest payable at March 31, 2026 |
| $ |
|
At March 31, 2026, accrued interest payable included amounts related to notes currently in default, some of which bear punitive interest rates ranging up to
NOTE 5: CONVERTIBLE NOTES PAYABLE AND NOTES PAYABLE
Convertible Notes Payable
At March 31, 2026 and June 30, 2025 convertible debentures consisted of the following:
|
| March 31, |
|
| June 30, |
| ||
|
| 2026 |
|
| 2025 |
| ||
Convertible notes payable |
| $ |
|
| $ |
| ||
Discount on convertible notes |
|
| ( | ) |
|
|
| |
Convertible notes, net |
| $ |
|
| $ |
| ||
The Company had convertible promissory notes net of discount aggregating approximately $
| 14 |
| Table of Contents |
VISIUM TECHNOLOGIES, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
The changes in the convertible notes payable balance are summarized below:
Convertible payable at June 30, 2025 |
| $ |
| |
Convertible notes issued during the nine months ended March 31, 2026 |
|
|
| |
Promissory notes reclassified as Convertible notes upon default |
|
|
| |
Increase in discount on convertible notes payable |
|
| ( | ) |
Conversion of convertible notes payable into common stock |
|
| ( | ) |
Convertible payable at March 31, 2026 |
| $ |
|
For the nine months ended March 31, 2026, the following summarizes the conversion of debt for common shares:
|
|
|
|
| Amount of |
|
| Amount of |
|
|
|
|
|
|
|
| Conversion |
| ||||||
|
| Shares |
|
| Converted |
|
| Converted |
|
| Conversion |
|
|
|
|
| Price |
| ||||||
Name |
| Issued |
|
| Principal |
|
| Interest |
|
| Expense |
|
| Total |
|
| Per Share |
| ||||||
FirstFire |
|
|
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||||
Labrys II |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
1800 Diagonal |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total |
|
|
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||||
In the nine months ended March 31, 2026 the noteholders converted the principal and interest related to these notes at an average conversion rate of $
Notes Payable
The Company had promissory notes aggregating $
NOTE 6: 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
At March 31, 2026, the Company had
At March 31, 2026, the Company has
Issuances of Common Stock During the Nine Months ended March 31, 2026
Convertible Notes Payable
During the nine months ended March 31, 2026 the Company issued
Commitment Shares
During the nine months ended March 31, 2026 the Company issued
| 15 |
| Table of Contents |
VISIUM TECHNOLOGIES, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
Stock Based Compensation
During the nine months ended March 31, 2026 the Company issued
During the nine months ended March 31, 2026 the Company issued
During the nine months ended March 31, 2026 the Company issued
Preferred Stock
Series A and B issued and outstanding shares of the Company’s convertible preferred stock have a par value of $
Series A Convertible Preferred Stock
The Series A Preferred Stock has a stated value of $
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
Series C Convertible Preferred Stock
Thirty thousand (
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.
Common Stock Warrants
In September 2022 we issued
| 16 |
| Table of Contents |
VISIUM TECHNOLOGIES, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
Due to the price protection features of these warrants, the Company issued
The Company has outstanding common stock purchase warrants that include full-ratchet anti-dilution provisions. Under these provisions, if the Company issues common stock or securities convertible into common stock at a price lower than the then-current warrant exercise price, the warrant exercise price is automatically adjusted to the lower issuance price.
The Company issued equity securities at a price below the then-current warrant exercise price of $
This repricing:
| · | Did not change the number of warrants outstanding. |
|
|
|
| · | Reduced the weighted-average exercise price from $ |
|
|
|
| · | Increased the intrinsic value of the warrants. |
A summary of the status of the Company’s outstanding common stock warrants as of March 31, 2026 and changes during the nine months ended on that date is as follows:
|
|
|
|
| Weighted Average |
| ||
|
| Number of Warrants |
|
| Exercise Price |
| ||
Common Stock Warrants |
|
|
|
|
|
| ||
Balance at June 30, 2025 |
|
|
|
| $ |
| ||
Granted |
|
| - |
|
|
| - |
|
Exercised |
|
|
|
|
|
| ||
Forfeited |
|
|
|
|
| - |
| |
Effect of full-ratchet repricing |
|
| - |
|
|
| ( | ) |
|
|
|
|
|
|
|
|
|
Warrants exercisable at March 31, 2026 |
|
|
|
| $ |
| ||
The following table summarizes information about common stock warrants outstanding at March 31, 2026:
|
|
| Warrants Outstanding |
|
| Warrants Exercisable |
| |||||||||||||
Range of Exercise Price |
|
| Number Outstanding At March 31, 2026 |
|
| Weighted Average Remaining Contractual Life |
| Weighted Average Exercise Price |
|
| Number Exercisable At March 31, 2026 |
|
| Weighted Average Exercise Price |
| |||||
| $ |
|
|
|
|
|
| $ |
|
|
|
|
| $ |
| ||||||
|
|
|
|
|
|
|
| $ |
|
|
|
|
| $ |
| |||||
| 17 |
| Table of Contents |
VISIUM TECHNOLOGIES, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
NOTE 7: GAIN ON DEBT WRITE-OFF
In July 2024 the Company obtained a legal opinion to extinguish aged debt totaling $
Accrued interest expense |
| $ |
| |
Convertible notes payable |
|
|
| |
Promissory notes payable |
|
|
| |
Gain on extinguishment of debt for the nine months ended 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
Under the 2021 Stock Incentive Plan, the Company has issued options to purchase
For the nine months ended March 31, 2026 and 2025, under the 2021 Stock Incentive Plan 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, 2026, 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
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:
|
| Nine months ended March 31, |
|
| Year ended June 30, |
| ||
|
| 2026 |
|
| 2025 |
| ||
Expected volatility |
|
| - | % |
| - | % | |
Expected term |
|
| - |
|
|
| - |
|
Risk-free interest rate |
|
| - | % |
| - | % | |
Forfeiture Rate |
|
| - | % |
| - | % | |
Expected dividend yield |
|
| - | % |
| - | % | |
The expected volatility was determined with reference to the historical volatility of the Company’s stock. The Company uses historical data to estimate option exercise and employee termination within the valuation model. The expected term of options granted represents the period of time that options granted are expected to be outstanding. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury rate in effect at the time of grant.
| 18 |
| Table of Contents |
VISIUM TECHNOLOGIES, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
The following table summarizes information about employee stock options outstanding at March 31, 2026:
|
|
| Outstanding Options |
|
| Vested Options |
| |||||||||||||||||||
|
|
| Number |
|
|
|
|
|
| Number |
|
|
|
|
| |||||||||||
|
|
| Outstanding |
|
| Weighted |
|
| Weighted |
|
| Exercisable |
|
| Weighted |
|
| Weighted |
| |||||||
|
|
| at |
|
| Averaged |
|
| Averaged |
|
| at |
|
| Averaged |
|
| Averaged |
| |||||||
|
|
| March 31, |
|
| Remaining |
|
| Exercise |
|
| March 31, |
|
| Exercise |
|
| Remaining |
| |||||||
Range of Exercise Price |
|
| 2026 |
|
| Life |
|
| Price |
|
| 2026 |
|
| Price |
|
| Life |
| |||||||
$27.00 |
|
|
|
|
|
|
|
| $ |
|
|
|
|
| $ |
|
|
|
| |||||||
Outstanding options |
|
|
|
|
|
|
|
| $ |
|
|
|
|
| $ |
|
|
|
| |||||||
As of March 31, 2026, the Company had approximately $
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, 2026 is presented in the following table:
|
| For the nine months ended |
| |||||
|
| March 31, 2026 |
| |||||
|
|
|
|
| Weighted |
| ||
|
|
|
|
| Average |
| ||
|
|
|
|
| Grant Date |
| ||
|
| Shares |
|
| Fair Value |
| ||
Unvested at June 30, 2025 |
|
| - |
|
| $ |
| |
Granted |
|
|
|
|
|
| ||
Forfeited |
|
| - |
|
|
|
| |
Vested |
|
| ( | ) |
|
|
| |
Unvested at March 31, 2026 |
|
| - |
|
| $ |
| |
As of March 31, 2026 the Company had no unrecognized pre-tax non-cash compensation expense.
NOTE 9: RELATED PARTY TRANSACTIONS
Equity transactions with related parties are described in Note 6.
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, 2026 there was $
| 19 |
| Table of Contents |
VISIUM TECHNOLOGIES, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
NOTE 10 - ACCRUED PAYROLL
Accrued payroll consist of the following at:
|
| March 31 |
|
| June 30 |
| ||
|
| 2026 |
|
| 2025 |
| ||
Accrued Payroll - officers |
| $ |
|
| $ |
| ||
Accrued payroll - staff |
|
|
|
|
|
| ||
|
| $ |
|
| $ |
| ||
NOTE 11: COMMITMENTS AND CONTINGENCIES
Operating Leases
The Company operates virtually, with no office space rented. The Company has no future minimum annual payments under non-cancelable operating leases at March 31, 2026.
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, 2026, 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
Legal Claims
The Company is subject to litigation, claims, investigations, and audits arising from time to time in the ordinary course of business. Although legal proceedings are inherently unpredictable, the Company believes that it has valid defenses with respect to any matters currently pending against the Company and intends to defend itself vigorously. The outcome of these matters, individually and in the aggregate, is not expected to have a material impact on the Company’s cash flows, results of operations, or financial position.
NOTE 12 – FAIR VALUE MEASUREMENT
Fair value measurements
At March 31, 2026 and June 30, 2025, 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 March 31, 2026 the estimated fair values of the liabilities measured on a recurring basis are as follows:
|
| Fair Value Measurements at |
| |||||||||
|
| March 31, 2026: |
| |||||||||
|
| (Level 1) |
|
| (Level 2) |
|
| (Level 3) |
| |||
Derivative liability – Convertible notes |
| $ |
|
| $ |
|
| $ |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
Total derivative liability |
| $ |
|
| $ |
|
| $ |
| |||
At June 30, 2025, the estimated fair values of the liabilities measured on a recurring basis are as follows:
|
| Fair Value Measurements at |
| |||||||||
|
| June 30, 2025: |
| |||||||||
|
| (Level 1) |
|
| (Level 2) |
|
| (Level 3) |
| |||
Derivative liability – Convertible notes |
| $ |
|
| $ |
|
| $ |
| |||
Derivative liability – Warrants |
|
|
|
|
|
|
|
|
| |||
Total derivative liability |
| $ |
|
| $ |
|
| $ |
| |||
| 20 |
| Table of Contents |
VISIUM TECHNOLOGIES, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2026
NOTE 13: SUBSEQUENT EVENTS
The Company evaluated subsequent events through May 20, 2026, the date the consolidated financial statements were available to be issued, in accordance with ASC 855-10-50-2. The following material events, substantially all Type 2 (non-recognized), have been identified. All equity issuances were effected pursuant to the private placement exemption under Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) of Regulation D, with verified accredited investors.
Equity Issuances On April 6, 2026, the Company issued
In April 2026, the Company filed Articles of Amendment with the Florida Division of Corporations increasing authorized Series AA Convertible Preferred Stock to
1.
Also in April 2026, the Company issued
In April 2026 the Company issued
In May 2026 the Company issued
Governance and Legacy Cleanup (April 7, 2026) The Board accepted the resignations of directors Paul Anthony Favata and Thomas Grbelja with no disagreements cited. The Company filed Certificates of Designation for Series A and Series B Preferred Stock and adopted a 125-day Remediation Plan for legacy Series A and Series B holders. The likelihood of any future conversion of legacy Preferred Series A or Preferred Series B shares is considered remote, and they have been excluded from diluted EPS calculations.
Debt Settlements and Additional Preferred Actions
| · | April 10, 2026: The Company settled all Labrys Notes (carrying amount ≈ $ |
| · | April 13, 2026: Newly designated Series D Convertible Preferred Stock par value $ |
| · | April 14, 2026: The Company designated and issued four shares of Series G Governing Preferred Stock (pari passu with Series AA and senior to all other classes), carrying veto rights over any action benefiting Preferred Series A or B holders. |
| · | April 16, 2026: The Company designated Series E Convertible Preferred Stock (no shares issued) to support the contemplated ConnexUS transaction. |
Leadership Changes (April 27, 2026) Paul R. Taylor was appointed Chairman and Chief Executive Officer; Cheddi Rai was appointed Chief Operating Officer and Chief Technology Officer. Mark Lucky continues as Chief Financial Officer.
PTNA Acquisition Corp. By unanimous written consent, the Board authorized formation of PTNA Acquisition Corp., a wholly owned Delaware C-Corporation subsidiary, as a bankruptcy-remote, liability-segregated strategic acquisition and capital-markets vehicle (targeting AI Capital UK and AI Capital Indonesia, among others), with full corporate separateness protocols to preserve limited liability.
Pending ConnexUS AI Acquisition (Type 2 Non-Recognized Event) On March 29, 2026 (countersigned March 30),
These events strengthen the Company’s balance sheet, governance, and strategic positioning without material adverse effect on liquidity or going-concern status. Reference is made to the Form 8-K filings dated April 7, 14, 16, 27, and 29, 2026 (and exhibits, including PPM-1, PPM-2, the LOI, Series A/B/D/E/G Certificates of Designation, Labrys Settlement, and PTNA Board Resolution) for additional information.
| 21 |
| Table of Contents |
ITEM 2. Management’s Discussion and Analysis and Results of Operations
The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and related notes included elsewhere in this report. Certain statements in this discussion and elsewhere in this report constitute forward-looking statements. See “Cautionary Statement Regarding Forward Looking Information” elsewhere in this report. Because this discussion involves risk and uncertainties, our actual results may differ materially from those anticipated in these forward-looking statements.
Overview
Visium Technologies, Inc. (“Visium”) was incorporated in Nevada as Jaguar Investments, Inc. during October 1987. During March 2003, a wholly owned subsidiary of the Company merged with Freight Rate, Inc., a development stage company in the logistics software business. During May 2003, the Company changed its name to Power2Ship, Inc. During October 2006, the Company merged with a newly formed, wholly owned subsidiary, Fittipaldi Logistics, Inc., a Nevada corporation, with the Company surviving but its name changed to Fittipaldi Logistics, Inc. effective November 2006. During December 2007, the Company merged with a newly formed, wholly owned subsidiary, NuState Energy Holdings, Inc., a Nevada corporation, with the Company surviving but renamed NuState Energy Holdings, Inc., effective December 2007. In March 2018, the Company brought in a new management team and changed its name to Visium Technologies, Inc.
Business Transformation and Strategic Pivot
Over the past 18 months, Visium Technologies has undergone a comprehensive transformation from a traditional cybersecurity solutions provider into a pure-play agentic AI company serving defense, critical infrastructure, and government sectors globally. This strategic pivot positions the Company at the forefront of the rapidly expanding agentic AI market, which is projected to reach $1.3 trillion by 2030.
Visium is now a global provider of agentic artificial intelligence solutions for cybersecurity, public safety, and critical infrastructure protection. The Company delivers mission-critical intelligence through its flagship TruContext™ platform and expanded product suite, which includes Tru-InSight™ for AI-powered video intelligence and TruTrack™ for IoT asset tracking and monitoring.
The Company's technology foundation originated from a March 2019 software license agreement with MITRE Corporation for CyGraph, a patented military-grade technology for cyber warfare analytics, visualization, and knowledge management. CyGraph, developed with sponsorship from the U.S. Army and currently deployed by U.S. Army Cyber Command, provides advanced analytics for cybersecurity situational awareness that is scalable, flexible, and comprehensive.
Visium completed extensive proprietary development to commercialize CyGraph as TruContext™, transforming it into an agentic AI platform that eliminates hallucinations and delivers verifiable, actionable intelligence. Key enhancements included developing native cloud architecture, implementing multi-user and multi-tenant capabilities, creating an intuitive graph-based user interface, and integrating advanced agentic AI capabilities that enable autonomous threat detection, response, and remediation.
TruContext™ Agentic AI Platform
TruContext™ represents the next generation of cybersecurity and intelligence platforms, powered by agentic AI that operates autonomously to detect, analyze, and respond to threats in real-time. Unlike traditional AI systems that require constant human oversight, TruContext™'s agentic capabilities enable it to:
| · | Autonomously monitor and analyze massive data streams across network environments, identifying anomalies and threats without human intervention |
| · | Execute automated response protocols when threats are detected, reducing response time from hours to seconds |
| · | Continuously learn and adapt to evolving threat landscapes through advanced machine learning algorithms |
| · | Correlate signals across disparate systems to provide comprehensive situational awareness |
| · | Operate transparently with full explainability, eliminating the "black box" problem common in AI systems |
The platform leverages graph database technology to visualize and analyze highly connected data in real-time, providing security analysts and decision-makers with contextualized intelligence that enables immediate, informed action. TruContext™ ingests data from any source, unifies fragmented security information across siloed systems, and presents comprehensive visualizations that allow analysts to intuitively understand their security posture at a glance.
TruContext™'s agentic AI architecture addresses critical market needs by eliminating false positives, prioritizing genuine threats, and automating previously manual security operations tasks. This enables security teams to focus on strategic initiatives rather than routine monitoring and analysis. The platform's no-code interface empowers business users to engage with complex security data, perform sophisticated analysis, and generate actionable insights without requiring technical specialists.
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| Table of Contents |
Expanded Product Portfolio
In September 2025, Visium launched Tru-InSight™, an AI-powered cloud-native video intelligence module that transforms existing camera networks and video management systems from passive recording tools into proactive intelligence networks. Tru-InSight™ ingests video events and snapshots from virtually any camera or VMS through webhook connectors, lightweight adapters, or standard integrations, enabling enterprises and government agencies to anticipate and mitigate threats before they escalate—without costly infrastructure replacement.
Tru-InSight™ features include:
| · | The Unified Intelligence Whiteboard for real-time collaboration and data visualization |
| · | Predictive analytics and behavioral analysis for proactive threat identification |
| · | Anomaly detection across video surveillance networks |
| · | Integration with IREX.AI's Searchveillance™ technology for facial recognition and license plate detection |
| · | Open architecture design enabling deployment across smart cities, retail, critical infrastructure, educational institutions, and public safety operations |
The Company's TruTrack™ solution provides IoT-based asset tracking and environmental monitoring for insurance, logistics, fuel distribution, and industrial applications. TruTrack™ leverages the TruContext™ Graph Analytics Platform to deliver real-time asset visibility, route optimization, fraud prevention, and predictive maintenance capabilities.
Use Cases and Applications
TruContext™ and the expanded product suite address critical needs across multiple sectors:
Cybersecurity and Critical Infrastructure: The platform provides real-time threat intelligence, forensics, and root cause analysis for IT/OT environments. Organizations facing sophisticated cyber threats can deploy TruContext™ to detect breaches that might otherwise go unnoticed for months. For example, attacks similar to the SolarWinds breach (which went undetected for 14 months) would be quickly identified and remediated through TruContext™'s real-time network analysis and agentic threat response capabilities.
TruContext™ enables proactive threat hunting, using the MITRE ATT&CK® framework and open-source intelligence to identify malicious activity beyond physical network boundaries. When sensitive data exfiltration occurs, the platform automatically identifies the activity, traces the attack path, and provides alerts with full context for immediate remediation.
Public Safety and Law Enforcement: Through Tru-InSight™, law enforcement agencies can analyze highly connected data in real-time from multiple sources, making rapid connections between persons, objects, locations, and events using the POLE (Person, Object, Location, Event) model. This generates insights into patterns, behaviors, and incidents that enable proactive crime prevention rather than reactive investigation.
Smart Cities and Government Operations: Visium's integrated platform provides municipal governments and national agencies with comprehensive situational awareness across public safety, transportation, critical infrastructure, and emergency response systems. The agentic AI capabilities enable automated coordination across multiple agencies and systems during crisis events.
Enterprise Security Operations: Organizations deploy TruContext™ to unify their security technology stack, eliminating data silos created by disparate point solutions. The platform ingests data from existing security tools and provides comprehensive visualization and automated analysis, significantly improving security analyst productivity while reducing complexity and operational costs.
According to CrowdStrike research, the average time from breach to harm caused by threat actors is 75 minutes, making real-time threat identification and automated response capabilities critically important. TruContext™'s agentic AI architecture addresses this challenge by continuously monitoring network environments and executing immediate response protocols when threats are detected.
Revenue Model and Market Strategy
Visium generates revenue through three primary channels:
1. Enterprise and Government Licensing: The Company provides virtual appliance and SaaS-based licensing models, with pricing based on network environment size, number of nodes (TruContext™ Identifiers), and feature sets. Annual seat licenses for federal government deployments and recurring monthly SaaS fees for commercial and international government clients provide predictable recurring revenue streams.
2. Professional Services: Visium delivers IT infrastructure, cybersecurity integration, and implementation services through service contracts. These engagements include data science services, custom analytics development, system integration, and ongoing support for TruContext™, Tru-InSight™, and TruTrack™ deployments.
3. Infrastructure Projects: The Company serves as systems integrator and cybersecurity provider for large-scale digital infrastructure projects, including national data centers, smart city deployments, and critical infrastructure protection programs.
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| Table of Contents |
Strategic Contracts and Market Position
The Company has established a strong foundation for growth in emerging markets across South America and Africa, securing multi-year contracts that demonstrate the commercial viability of its agentic AI platform:
West Africa - National Data Center Cybersecurity: In November 2023, through its partnership with Cybastion Institute of Technology, Visium secured a contract valued at over $20 million as part of the U.S. Export-Import Bank's (EXIM) $100+ million financing initiative for Africa's digital infrastructure development. The project encompasses cybersecurity integration and systems management for national data centers in Côte d'Ivoire and Benin, including data center architecture and design, power and civil engineering, network topology, vendor management, and comprehensive security stack solutions powered by TruContext™. EXIM provided a $66 million guarantee for Côte d'Ivoire's national data center and a $47 million guarantee for digitalization of government ministries.
Peru - AI-Powered Public Safety: Through partnership with IREX.AI, Visium is working with the Peruvian National Police (PNP) on a multi-year project deploying Tru-InSight™ for AI-driven situational awareness across municipal public safety operations. The initial engagement includes a two-year contract with an option for three additional years. The deployment combines video surveillance with intelligent analytics for threat identification and response across 50,000+ cameras deployed throughout 25 regions.
Democratic Republic of Congo - National Infrastructure: The Company is pursuing opportunities for comprehensive digital infrastructure and addressing system projects, including national mapping initiatives and critical infrastructure protection programs.
These strategic opportunities establish proof points for Visium's technology and promise to create recurring revenue streams while demonstrating the platform's applicability across diverse use cases and geographic markets.
Partnership Ecosystem
Visium leverages strategic partnerships to accelerate market penetration and enhance platform capabilities:
Technology Partnerships: The Company maintains alliances with technology providers focused on security analytics, network and infrastructure security, threat platforms, orchestration, and automation. These partnerships enable integration of TruContext™ with complementary security tools and extend the platform's reach through partner distribution channels.
Key partnerships include:
| · | IREX.AI: Joint development and deployment of Tru-InSight™ video intelligence solutions, including integration with Searchveillance™ facial recognition technology |
| · | Seko Energy - Eldoret |
| · | GB Group Global: Partnership supporting representation at international business summits and market development activities |
Government and Export Finance Support: Visium benefits from U.S. government support for technology exports to emerging markets through EXIM Bank financing programs. These programs provide competitive advantages when pursuing large-scale international infrastructure projects.
Visium relies on third-party data center facilities to host cloud-based product offerings and licenses certain commercial and open-source software components that are integrated with its solutions. The Company maintains relationships with cloud infrastructure providers to ensure global availability and performance of its SaaS offerings.
Technology Infrastructure and Competitive Advantages
Visium's competitive positioning is based on several key differentiators:
Agentic AI Architecture: Unlike traditional cybersecurity tools that require extensive human analysis and intervention, TruContext™'s agentic capabilities enable autonomous operation, dramatically reducing response times and analyst workload while improving detection accuracy.
Transparent and Explainable AI: The platform eliminates the "black box" problem common in AI systems by providing full visibility into decision-making processes. This transparency is critical for defense, critical infrastructure, and government applications where explainability and auditability are mandatory requirements.
Graph-Based Analytics: The underlying graph database technology enables visualization and analysis of highly connected data that is impossible to comprehend using traditional relational databases or SIEM tools. This provides security analysts with intuitive understanding of complex network relationships and attack patterns.
Platform Integration: TruContext™'s ability to ingest data from any source and unify information across disparate security tools addresses a critical market need. Organizations typically deploy 20-50 security point solutions that create data silos; TruContext™ eliminates these silos by providing a comprehensive analytics layer across the entire security stack.
No-Code Interface: The platform's intuitive GUI enables business users and security analysts to perform sophisticated queries, create custom visualizations, and generate reports without coding or database expertise. This democratizes access to advanced analytics capabilities.
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| Table of Contents |
Emerging Market Focus: Visium's strategic focus on underserved emerging markets in Africa, South America, and other regions provides access to high-growth opportunities with reduced competition compared to saturated North American and European markets.
Competition
The markets for cybersecurity and AI solutions are highly competitive and fragmented. The Company faces competition from established enterprise security vendors, emerging AI security startups, and cloud platform providers:
Enterprise Security Vendors: Large security companies such as Palo Alto Networks, Splunk Inc., CrowdStrike, and McAfee, LLC offer comprehensive security suites that may include capabilities that compete with certain TruContext™ features. However, these vendors typically do not offer the graph-based analytics and agentic AI capabilities that differentiate TruContext™.
SIEM and Analytics Platforms: Security Information and Event Management (SIEM) vendors provide log aggregation and analysis capabilities that address some of the same use cases as TruContext™. However, traditional SIEM solutions lack the real-time graph-based visualization and agentic automation capabilities of TruContext™.
AI and Machine Learning Security Tools: Emerging vendors are incorporating AI and machine learning into security products for threat detection and automated response. Visium differentiates through its transparent, explainable agentic AI architecture and comprehensive platform approach versus point solutions.
Video Intelligence and Physical Security: In the video intelligence market, Tru-InSight™ competes with traditional video management systems, analytics overlays, and specialized AI video analysis tools. The platform's differentiation comes from integration with the broader TruContext™ ecosystem and its ability to correlate video intelligence with cybersecurity, IoT, and other data sources.
Cloud and Identity Providers: Large cloud platforms such as Amazon Web Services, Microsoft Azure, and Google Cloud Platform provide native security tools and identity management services that may compete for customer budgets. Additionally, identity and access management vendors such as Okta and business intelligence platforms such as Tableau compete in adjacent market segments.
Competitive pressures may result in price reductions, reduced margins, loss of market share, inability to gain market share, and declining sales, any of which could materially impact the Company's business, financial condition, results of operations, and cash flows. The Company addresses competitive threats through continuous innovation, strategic partnerships, focus on underserved markets, and differentiation based on its unique agentic AI capabilities and government heritage.
Market Opportunity
The global market for AI-powered cybersecurity solutions is experiencing rapid growth driven by increasing cyber threats, expanding attack surfaces, shortage of cybersecurity professionals, and regulatory requirements for enhanced security controls. Industry analysts project the agentic AI market to reach $1.3 trillion by 2030, representing significant expansion opportunity for platforms that can deliver autonomous, transparent, and verifiable intelligence.
Emerging markets in Africa, South America, Asia, and the Middle East represent particularly attractive opportunities as these regions invest heavily in digital infrastructure, smart cities, and government modernization programs. These markets often lack established legacy security infrastructure, creating opportunities for modern, cloud-native solutions like TruContext™ to become the foundation for national cybersecurity and public safety programs.
The Company's strategic focus on government contracts, critical infrastructure projects, and large-scale deployments in emerging markets positions it to capture significant market share in high-growth segments with long contract durations and recurring revenue characteristics.
Forward-Looking Strategy
Visium's strategic objectives include:
| · | Expanding the agentic AI capabilities of TruContext™ to address broader use cases beyond cybersecurity, including fraud detection, supply chain analytics, healthcare analytics, and compliance monitoring |
| · | Accelerating revenue growth through execution of existing contracts in Peru and West Africa while pursuing additional opportunities in underserved international markets |
| · | Expanding the partner ecosystem to include additional technology alliances, reseller channels, and system integrators |
| · | Pursuing strategic acquisitions or partnerships that enhance platform capabilities or accelerate market penetration |
| · | Investing in sales and marketing infrastructure to support commercial expansion in enterprise and government sectors |
The Company's transformation into a pure-play agentic AI company positions it to capitalize on the convergence of artificial intelligence, cybersecurity, and critical infrastructure protection. As organizations worldwide face increasingly sophisticated threats and complexity in their security operations, Visium's platform provides a differentiated solution that automates threat detection and response while maintaining the transparency and explainability required for mission-critical applications.
| 25 |
| Table of Contents |
Employees
As of March 31, 2026, we had four (4) full time employees.
Available Information
All reports of the Company filed with the SEC are available free of charge through the SEC’s website at www.sec.gov. In addition, the public may read and copy materials filed by the Company at the SEC’s Public Reference Room located at 100 F Street, N.E., Washington, D.C. 20549. The public may also obtain additional information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330.
Our principal offices are located at 4094 Majestic Lane, Suite 360, Fairfax, Virginia 22033. Our telephone number is (703) 273-0383.
Our common stock is quoted on the OTC Pink under the symbol “VISM.”
| 26 |
| Table of Contents |
VISIUM TECHNOLOGIES, INC.
RESULTS OF OPERATIONS
Three- and Nine-Month Periods Ended March 31, 2026 and 2025
|
| Three Months Ended March 31, |
|
| Nine Months ended March 31, |
| ||||||||||
|
| 2026 |
|
| 2025 |
|
| 2026 |
|
| 2025 |
| ||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
| $ | 359,108 |
|
| $ | 257,019 |
|
| $ | 1,150,520 |
|
| $ | 907,968 |
|
Development expense |
|
| - |
|
|
| - |
|
|
| - |
|
|
| 75 |
|
Total Operating Expenses |
|
| 359,108 |
|
|
| 257,019 |
|
|
| 1,150,520 |
|
|
| 908,043 |
|
| ||||||||||||||||
Loss from Operations |
|
| (359,108 | ) |
|
| (257,019 | ) |
|
| (1,150,520 | ) |
|
| (908,043 | ) |
| ||||||||||||||||
Other income (expenses): | ||||||||||||||||
Gain on change in fair value of derivative liabilities |
|
| 78,478 |
|
|
| (12,876 | ) |
|
| 80,293 |
|
|
| 23,155 |
|
Gain (loss) on extinguishment of debt |
|
| - |
|
|
| - |
|
|
| - |
|
|
| 725,059 |
|
Interest expense |
|
| (307,214 | ) |
|
| (98,161 | ) |
|
| (468,179 | ) |
|
| (263,392 | ) |
Total other income (expenses) |
|
| (228,736 | ) |
|
| (111,037 | ) |
|
| (387,886 | ) |
|
| 484,822 |
|
| ||||||||||||||||
Net loss |
| $ | (587,844 | ) |
| $ | (368,056 | ) |
| $ | (1,538,406 | ) |
| $ | (423,221 | ) |
Selling, General, and Administrative Expenses
Nine Month Period Ended March 31, 2026 and 2025
For the nine months ended March 31, 2026, selling, general and administrative expenses were $1,150,520 as compared to $907,968 for the nine months ended March 31, 2025. For the nine-month periods ended March 31, 2026 and 2025 selling, general and administrative expenses consisted of the following:
|
| Nine Months ended March 31, |
|
| Increase/ |
|
|
| ||||||||
|
| 2026 |
|
| 2025 |
|
| Decrease |
|
| % Change |
| ||||
Accounting expense |
| $ | 46,805 |
|
| $ | 45,007 |
|
| $ | 1,798 |
|
|
| 4.0 | % |
Consulting fees |
|
| 90,000 |
|
|
| 90,000 |
|
|
| - |
|
|
| 0.0 | % |
Salaries |
|
| 603,653 |
|
|
| 650,122 |
|
|
| (46,469 | ) |
| (7.1%) |
| |
Legal and professional fees |
|
| 31,500 |
|
|
| 31,500 |
|
|
| - |
|
|
| 0.0 | % |
Travel expense |
|
| 700 |
|
|
| 154 |
|
|
| 546 |
|
|
| 357.6 | % |
Occupancy expense |
|
| 25 |
|
|
| 153 |
|
|
| (128 | ) |
| (83.6%) |
| |
Telephone expense |
|
| 4,047 |
|
|
| 3,784 |
|
|
| 263 |
|
|
| 6.9 | % |
Website expense |
|
| 860 |
|
|
| 696 |
|
|
| 164 |
|
|
| 23.6 | % |
Investor relations expense |
|
| 2,500 |
|
|
| - |
|
|
| 2,500 |
|
|
| N/A |
|
Stock based consulting expense |
|
| 4,300 |
|
|
| 23,270 |
|
|
| (18,970 | ) |
| (81.5%) |
| |
Stock based compensation |
|
| 347,850 |
|
|
| 52,500 |
|
|
| 295,350 |
|
|
| 562.6 | % |
Other |
|
| 18,280 |
|
|
| 10,782 |
|
|
| 7,498 |
|
|
| 69.5 | % |
|
| $ | 1,150,520 |
|
| $ | 907,968 |
|
| $ | 242,552 |
|
|
| 26.7 | % |
The increase in selling, general and administrative expenses of $242,552 during fiscal 2026, when compared with the prior year, is primarily due to an increase in stock-based compensation of $295,350, higher travel expenses of $546, an higher accounting expense of $1,798, offset by a decrease in stock-based consulting expense of $18,970, and lower salary expense of $46,469.
We believe that our selling, general, and administrative expenses will be lower over the rest of the current fiscal year, driven by an anticipated decrease in stock-based compensation expense, offset by an increase in expenses related to greater business activity over the remainder of fiscal 2026.
| 27 |
| Table of Contents |
Development Expense
|
| Nine-Months Ended |
|
| |||||||
|
| March 31, |
|
| % | ||||||
|
| 2026 |
|
| 2025 |
|
| Change | |||
Development expense |
| $ | - |
|
| $ | 75 |
|
| (100.0 | %) |
Development expense represents the expense to further enhance and commercialize our products.
Change in Fair Value of Derivative Liabilities
|
| Nine-Months Ended |
|
| |||||||
|
| March 31, |
|
| % | ||||||
|
| 2026 |
|
| 2025 |
|
| Change | |||
Gain (loss) on change in fair value of derivative liabilities |
| $ | 80,293 |
| $ | 23,155 |
|
| (246.8 | %) | |
The Company recorded a gain on the change in fair value of derivative liabilities of $80,293 for the nine months ended March 31, 2026. This fluctuation is a result of the period-end revaluation of the aforementioned liabilities using the Cox, Ross & Rubinstein Binomial Tree model, driven largely by changes in the per-share price of the Company’s common stock.
Interest Expense
|
| Nine-Months Ended |
|
|
|
| ||||||
|
| March 31, |
|
| % |
| ||||||
|
| 2026 |
|
| 2025 |
|
| Change |
| |||
Interest expense |
| $ | 468,179 |
|
| $ | 263,392 |
|
|
| 77.8 | % |
Interest expense represents stated interest of notes and convertible notes payable as well as amortization of debt discount.
Gain (loss) on extinguishment of debt
|
| Nine-Months Ended |
|
|
| ||||||
|
| March 31, |
|
| % | ||||||
|
| 2026 |
|
| 2025 |
|
| Change | |||
Gain (loss) on extinguishment of debt |
| $ | - |
|
| $ | 725,059 |
|
| (100 | %) |
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, 2024 the gain on extinguishment of debt was:
Accrued interest expense |
| $ | 361,559 |
|
Convertible notes payable |
|
| 208,500 |
|
Promissory notes payable |
|
| 155,000 |
|
Gain on extinguishment of debt for the Nine Months ended March 31, 2025 |
| $ | 725,059 |
|
Three Month Period Ended March 31, 2026 and 2025
For the three months ended March 31, 2026, selling, general and administrative expenses were $359,108 as compared to $257,019 for the three months ended March 31, 2025. For the three months ended March 31, 2026 and 2025 selling, general and administrative expenses consisted of the following:
|
| Three Months Ended |
|
|
|
|
| |||||||||
|
| March 31, |
|
| Increase/ |
|
|
| ||||||||
|
| 2026 |
|
| 2025 |
|
| Decrease |
|
| % Change |
| ||||
Accounting expense |
| $ | 18,125 |
|
| $ | 10,301 |
|
| $ | 7,824 |
|
|
| 76.0 | % |
Consulting fees |
|
| 30,000 |
|
|
| 30,000 |
|
|
| - |
|
| - | % | |
Salaries |
|
| 201,749 |
|
|
| 201,460 |
|
|
| 289 |
|
| 0.1 | % | |
Legal and professional fees |
|
| 10,500 |
|
|
| 10,500 |
|
|
| - |
|
| - | % | |
Travel expense |
|
| 60 |
|
|
| - |
|
|
| 60 |
|
|
| 0 | % |
Telephone expense |
|
| 1,476 |
|
|
| 1,320 |
|
|
| 156 |
|
|
| 11.8 | % |
Website expense |
|
| 44 |
|
|
| - |
|
|
| 44 |
|
|
| 0 | % |
Stock based compensation |
|
| 91,200 |
|
|
| - |
|
|
| 91,200 |
|
|
| 0 | % |
Other |
|
| 5,954 |
|
|
| 3,438 |
|
|
| 2,516 |
|
|
| 73.1 | % |
|
| $ | 359,108 |
|
| $ | 257,019 |
|
| $ | 102,089 |
|
|
| 39.7 | % |
| 28 |
| Table of Contents |
The increase in selling, general and administrative expenses of $102,089 for the three months ended March 31, 2026, when compared with the prior year period, is primarily due to an increase in stock-based compensation expense of $91,200, and an increase in accounting expense of $7,824.
Change in Fair Value of Derivative Liabilities
|
| Three-Months Ended |
|
|
| |||||||
|
| March 31, |
|
| % |
| ||||||
|
| 2026 |
|
| 2025 |
|
| Change |
| |||
Gain (loss) on change in fair value of derivative liabilities |
| $ | 78,478 |
|
| $ | (12,876 | ) |
|
| 709.5 | % |
The change in fair value of derivative liabilities results from the changes in the fair value of the derivative liability due to the application of ASC 815, resulting in either income or expense, depending on the difference in fair value of the derivative liabilities between their measurement dates driven by the change in the per share price of the Company’s common stock.
Interest Expense
|
| Three-Months Ended |
|
|
|
| ||||||
|
| March 31, |
|
| % |
| ||||||
|
| 2026 |
|
| 2025 |
|
| Change |
| |||
Interest expense |
| $ | 307,214 |
|
| $ | 98,161 |
|
|
| 213 | % |
Interest expense represents stated interest of notes and convertible notes payable as well as amortization of debt discount. Interest expense is higher for the three months ended March 31, 2026 due to higher debt discount amortization as compared to the prior year period.
Liquidity and Capital Resources
|
| Balance at |
| |||||
|
| March 31, |
|
| June 30, |
| ||
|
| 2026 |
|
| 2025 |
| ||
Cash |
| $ | 665 |
|
| $ | 60,144 |
|
Accounts payable and accrued expenses |
|
| 1,584,350 |
|
|
| 1,472,933 |
|
Accrued compensation |
|
| 2,899,379 |
|
|
| 2,556,428 |
|
Notes, convertible notes, and accrued interest payable |
| $ | 1,801,805 |
|
| $ | 1,593,484 |
|
At March 31, 2026 and June 30, 2025, our total assets consisted of cash and prepaid expenses. We do not have any material commitments for capital expenditures.
The objective of liquidity management is to ensure that we have ready access to sufficient funds to meet commitments and effectively implement our growth strategy. Our primary sources are financing activities such as the issuance of notes payable and convertible notes payable. In the past, we have mostly relied on debt and equity financing to provide for our operating needs.
We cannot ascertain that we have sufficient funds from operations to fund our ongoing operating requirements through June 30, 2026. We may need to raise funds to enhance our working capital and use these funds for strategic purposes. If such a need arises, we intend to generate proceeds from either debt or equity financing.
We intend to finance our operations using a mix of equity and debt financing. We do not anticipate incurring capital expenditures for the foreseeable future. We anticipate that we will need to raise approximately $180,000 per year in the near term to finance the recurring costs of being a publicly-traded company.
Going Concern
The accompanying financial statements have been prepared on a going concern basis. The Company has used net cash in its operating activities of $370,143 and $253,891 during the nine-month periods ended March 31, 2026 and 2025, respectively, and has a working capital deficit of approximately $6.86 million and $5.84 million at March 31, 2026 and June 30, 2025, respectively. 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 may continue to provide for its capital requirements by issuing additional equity securities and debt. 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.
| 29 |
| Table of Contents |
Nine Months ended March 31, 2026
Net cash used in operations during the nine months ended March 31, 2026 increased by $116,252 or 46% over the same period during fiscal year 2025. The cash provided by financing activities was obtained through advances from directors totaling $85,500 and the issuance of promissory notes that netted the Company $420,691 during the nine months ended March 31, 2026.
Nine Months ended March 31, 2025
Net cash used in operations during the nine months ended March 31, 2025 decreased by $113,658 or about 31% from the same period during fiscal year 2024. The cash provided by financing activities was obtained through advances from directors totaling $95,526, the issuance of promissory notes that netted the Company $332,000 during the nine months ended March 31, 2025.
Capital Raising Transactions
During the nine months ending March 31, 2026 we generated net proceeds of $420,691 from the issuance of eleven promissory notes.
Other outstanding obligations at March 31, 2026
Convertible Notes Payable
The Company had convertible promissory notes, net of discount, aggregating $191,199 outstanding at March 31, 2026. The accrued interest amounted to approximately $226,376 as of March 31, 2026. The Convertible Notes Payable bear interest at rates ranging between 0% and 24% per annum. Interest is generally payable monthly. The Convertible Notes Payable are generally convertible at rates ranging between $0.00097 and $121.50 per share, at the holders’ option. At March 31, 2026, $191,199 of the convertible promissory notes have matured and are in default.
Notes Payable
The Company had promissory notes aggregating $1,118,200 at March 31, 2026. The related accrued interest amounted to approximately $266,030 at March 31, 2026. The Notes Payable bear interest at rates ranging between 0% and 18% per annum. Interest is generally payable at maturity of the note. At March 31, 2026, $835,000 of the promissory notes have matured and are in default.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable to a smaller reporting company.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. Our management assessed the effectiveness of our internal control over financial reporting as of March 31, 2026. In making this assessment, our management used criteria issued by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control Over Financial Reporting – Guidance for Smaller Public Companies.
During our assessment of the design and the effectiveness of internal control over financial reporting as of March 31, 2026, management identified the following material weaknesses:
| ● | While we have processes in place, there are no formal written policies and procedures related to certain financial reporting processes; |
|
|
|
| ● | There is no formal documentation in which management specified financial reporting objectives to enable the identification of risks, including fraud risks; |
|
|
|
| ● | Our Board of Directors consisted of three members; however, we lack the resources and personnel to implement proper segregation of duties or other risk mitigation systems. |
30 |
| Table of Contents |
A material weakness is “a significant deficiency, or a combination of significant deficiencies, which result in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected by us in a timely manner.” A significant deficiency is a deficiency or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of the registrant’s financial reporting.
We intend to gradually improve our internal control over financial reporting to the extent that we can allocate resources to such improvements. We intend to prioritize the design of our internal control over financial reporting starting with our control environment and risk assessments and ending with control activities, information and communication activities, and monitoring activities. Although we believe the time to adapt in the next year will help position us to provide improved internal control functions into the future, in the interim, these changes caused control deficiencies, which in the aggregate resulted in a material weakness. Due to the existence of these material weaknesses, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that our internal control over financial reporting was not effective as of March 31, 2026.
This quarterly report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s independent registered public accounting firm pursuant to the rules of the SEC that permit smaller reporting companies to provide only the management’s report in this quarterly report.
Management is committed to remediating the material weaknesses identified above. The following remediation measures have been identified and are in various stages of planning and implementation:
Material Weakness 1 — Absence of Formal Written Policies and Procedures. Management has initiated a review of all key financial reporting processes, including accounts payable and accrual recognition, debt and equity transaction recording, and period-end close procedures. Management intends to document these processes in formal written accounting policies and procedures manuals. The Company expects to complete the drafting and initial implementation of these policies during the fiscal year ending June 30, 2027, subject to the availability of internal resources.
Material Weakness 2 — Absence of Formal Financial Reporting Objectives and Risk Assessment Documentation. Management intends to develop and maintain a formal, written risk assessment that identifies the Company's financial reporting objectives, the risks that could prevent those objectives from being achieved, and the controls in place to mitigate those risks, including fraud risks. This risk assessment will be reviewed and updated at least annually and will be presented to the Board of Directors for review. The Company expects to complete an initial risk assessment document during the fiscal year ending June 30, 2027.
Material Weakness 3 — Inadequate Segregation of Duties. The Company acknowledges that its current size and limited personnel make full segregation of duties impractical in the near term. As a compensating control, management has implemented, or intends to implement, the following measures: (i) enhanced review procedures by the Chief Financial Officer of all journal entries and account reconciliations prepared by other personnel; (ii) quarterly review of all significant transactions by the Chief Executive Officer and Chief Financial Officer jointly; and (iii) engagement of the Company's independent registered public accounting firm to perform agreed-upon procedures on high-risk account balances on a quarterly basis, to the extent resources permit. The Company will continue to evaluate the feasibility of adding qualified financial reporting personnel as its financial condition improves.
Management believes that the foregoing remediation steps, when fully implemented, will remediate the identified material weaknesses. However, the material weaknesses will not be considered remediated until the applicable controls have operated effectively for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. There can be no assurance that the remediation measures described above will be fully implemented within the timeframes described, or that they will be effective in remediating the identified material weaknesses, given the Company's limited resources.
Changes in Internal Control Over Financial Reporting
During the quarter ended March 31, 2026, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting, other than the identification of the material weaknesses described above and the initiation of the remediation measures described herein.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
At March 31, 2026 the Company is not the subject of, or party to, any pending or threatened, material legal actions.
From time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.
Item 1A. Risk Factors.
In addition to the other information set forth in this report, you should carefully consider the factors discussed under the heading “Risk Factors” in our Annual Report on Form 10-K filed on October 7, 2025, which could materially affect our business operations, financial condition or future results. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business operations and/or financial condition. There have been no material changes to our risk factors since the filing of our Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Convertible Notes Payable
During the nine months ended March 31, 2026 the Company issued 58,834,782 shares of its common stock related to the conversion of $180,884 of principal, accrued interest, and fees for four of its convertible notes payable, at an average contract conversion price of $0.003 per share.
Commitment Shares
During the nine months ended March 31, 2026 the Company issued 2,625,000 shares of its common stock valued at $18,788 or an average price of $0.0072 per share, pursuant to the issuance of two promissory notes.
Stock Based Compensation
During the nine months ended March 31, 2026 the Company issued 65,000,000 shares of its $0.0001 par value common stock as compensation to its directors and officers. The shares were valued at $337,100, or $0.0052 per share, based on the share price at the time of the transactions.
During the nine months ended March 31, 2026 the Company issued 1,000,000 shares of its $0.0001 par value common stock as compensation to employees. The shares were valued at $4,300, or $0.0043 per share.
During the nine months ended March 31, 2026 the Company issued 2,250,000 shares of its $0.0001 par value common stock as compensation to a consultant. The shares were valued at $10,750, or $0.0048 per share.
Item 3. Defaults Upon Senior Securities.
As of March 31, 2026, the Company was in default on certain of its senior debt obligations, specifically its outstanding promissory notes and convertible promissory notes. The defaults primarily relate to the failure to pay principal and accrued interest upon the maturity dates of the respective instruments.
Promissory Notes At March 31, 2026, the Company had promissory notes outstanding with an aggregate principal balance of $1,118,200. Of this amount, promissory notes with an aggregate principal balance of $835,000 have matured and are currently in default due to non-payment. The related accrued and unpaid interest on all promissory notes amounted to approximately $266,030 as of March 31, 2026.
Convertible Notes Payable At March 31, 2026, the Company had convertible promissory notes outstanding with an aggregate principal balance of $191,199. All $191,199 of these convertible promissory notes have matured and are currently in default due to non-payment. The accrued and unpaid interest on the convertible notes amounted to approximately $226,376 as of March 31, 2026.
The Company has resolved the defaulted amount as of the date of this filing.
Item 4. Mine Safety Disclosures.
Not applicable to our operations.
Item 5. Other Information.
None
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Item 6. Exhibits
* | Filed herewith. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| VISIUM TECHNOLOGIES, INC. |
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| By: | /S/ Paul R. Taylor |
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May 20, 2026 |
| Paul R. Taylor |
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| CEO, principal executive officer |
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| By: | /S/ Mark Lucky |
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May 20, 2026 |
| Mark Lucky |
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| CFO, principal accounting officer |
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