Visium Technologies, Inc 10-Q/A for FY2023 Q2

Visium Technologies, Inc. (VISM)

10-Q/A 2023-03-06 For: 2022-12-31

Added on April 10, 2026

About this 10-Q/A

Visium Technologies, Inc filed this 10-Q/A on March 6, 2023, covering the quarter ended December 31, 2022 (FY2023 Q2).

Headline figures

Quarter ended December 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $0; compared with $0 a year earlier
Net loss: $721.52K; compared with a net loss of $1.29M a year earlier

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Florida		87-0449667
(State of Incorporation)		(IRS Employer Identification No.)

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller Reporting Company	☒
Emerging growth company	☐

PART I - FINANCIAL INFORMATION	3
Item 1. Financial Statements	3
Consolidated Balance Sheets – December 31, 2022 (unaudited) and June 30, 2022	3
Consolidated Statements of Operations - Three and Six Months ended December 31, 2022 and 2021 (unaudited)	4
Consolidated Statements of Changes in Stockholders’ Deficit (unaudited) – Three and Six Months ended December 31, 2022 and 2021	5
Consolidated Statements of Cash Flows - Six Months Ended December 31, 2022 and 2021 (unaudited)	7
Notes to Consolidated Financial Statements (unaudited)	8
Item 2. Management’s Discussion and Analysis and Results of Operations	21
Item 3. Quantitative and Qualitative Disclosures About Market Risk	28
Item 4. Controls and Procedures	28
PART II - OTHER INFORMATION	29
Item 1. Legal Proceedings.	29
Item 1A. Risk Factors.	29
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.	29
Item 3. Defaults Upon Senior Securities.	29
Item 4. Mine Safety Disclosures.	29
Item 5. Other Information.	29
Item 6. Exhibits	29
SIGNATURES	30

	December 31, 2022			June 30, 2022(1)
	(Unaudited)
ASSETS
Current assets:
Cash	$	31,391		$	136,990
Prepaid license fee		35,000			-

Total current assets		66,391			136,990

Total assets	$	66,391		$	136,990

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current liabilities:
Accounts payable and accrued expenses	$	643,402		$	596,463
Accrued compensation		1,025,017			614,589
Due to officer		67,500			-
Accrued interest		437,093			404,712
Convertible notes payable, net of discount of $0 and $412,944		1,558,481			1,074,487
Derivative liabilities		127,298			35,297
Notes payable		205,000			205,000
Total current liabilities		4,063,791			2,930,548

Commitments and contingencies (Note 10)

Stockholders’ deficit:
Preferred stock
Series A Convertible Stock ($0.001 par value; 20,000,000 shares authorized, 13,992,340 shares issued and outstanding as of December 31, 2022 and June 30, 2022, respectively)		13,992			13,992
Series B Convertible Stock ($0.001 par value 30,000,000 shares authorized, 1,327,640 shares issued and outstanding as of December 31, 2022 and June 30, 2022, respectively)		1,328			1,328
Series AA Convertible Stock ($0.001 par value; 1 share authorized, 1 share issued and outstanding as of December 31, 2022 and June 30, 2022, respectively)		0			0
Common stock, $0.0001 par value, 1,000,000,000 shares authorized: 5,486,121 shares issued and 3,986,103 outstanding at December 31, 2022, and 2,903,804 shares issued and 2,896,385 outstanding at June 30, 2022, respectively (See Note 7)		398			288
Additional paid in capital		54,304,833			53,749,386
Accumulated deficit		(58,317,951	)		(56,558,552	)
Total stockholders’ deficit		(3,997,400	)		(2,793,558	)

Total liabilities and stockholders’ deficit	$	66,391		$	136,990

	Three Months Ended						Six Months Ended
	December 31,						December 31,
	2022			2021			2022			2021
Net revenues	$	-		$	-		$	-		$	-

Operating expenses:
Selling, general and administrative		533,892			1,264,592			893,581			2,464,629
Development expense		47,060			85,912			101,952			196,325
Total Operating Expenses		580,952			1,350,504			995,533			2,660,954

Loss from Operations		(580,952	)		(1,350,504	)		(995,533	)		(2,660,954	)

Other income (expenses):
Gain (loss) on change in fair value of derivative liabilities		(45,233	)		75,253			(33,862	)		56,345
Derivative liability expense		(58,139	)		-			(58,139	)		-
Gain (loss) on extinguishment of debt		-			-			(504,925	)		-
Interest expense		(37,199	)		(15,211	)		(166,940	)		(501,675	)
Total other income (expenses)		(140,571	)		60,042			(763,866	)		(445,330	)

Net loss	$	(721,523	)	$	(1,290,462	)	$	(1,759,399	)	$	(3,106,284	)

Loss per common share basic and diluted	$	(0.22	)	$	(0.50	)	$	(0.57	)	$	(1.28	)

Weighted average common shares outstanding – basic and diluted		3,271,675			2,604,885			3,085,138			2,424,513

	Preferred Stock - Series A $0.001 Par Value				Preferred Stock - Series B $0.001 Par Value				Preferred Stock - Series AA $0.001 Par Value				Common Stock $0.0001 Par Value				Additional Paid-in			Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Capital			Deficit			Deficit
Balance at September 30, 2022		13,992,340		13,992		1,327,670	$	1,328		1	$	0		2,901,590	$	290	$	53,979,338		$	(57,596,428	)	$	(3,601,480	)

Shares issued for consulting services														10,000		1		3,099						3,100
Shares issued as compensation to employees														235,001		23		72,827						72,850
Shares issued as compensation to directors and officers														522,207		52		172,552						172,604
Shares issued for conversion of notes payable														248,550		25		77,024						77,049
Shares issued for exercise of warrants														68,755		7		(7	)					0
Net loss for the three months ended December 31, 2022																					(721,523	)		(721,523	)

Balance at December 31, 2022		13,992,340	$	13,992		1,327,670	$	1,328		1	$	0		3,986,103		398		54,304,833			(58,317,951	)		(3,997,400	)

	Preferred Stock - Series A $0.001 Par Value				Preferred Stock - Series B $0.001 Par Value				Preferred Stock - Series AA $0.001 Par Value				Common Stock $0.0001 Par Value				Additional Paid-in			Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Capital			Deficit			Deficit
Balance at June 30, 2022		13,992,340	$	13,992		1,327,670	$	1,328		1	$	0		2,896,385	$	288	$	53,749,386		$	(56,558,552	)	$	(2,793,558	)

Shares issued for consulting services														11,482		2		18,871						18,873
Shares issued as compensation to employees														235,001		23		72,827						72,850
Shares issued as compensation to directors and officers														525,930		53		199,760						199,813
Warrants issued on extinguishment of debt																		186,972						186,972
Shares issued for conversion of notes payable and accrued interest														248,550		25		77,024						77,049
Shares issued for exercise of warrants														68,755		7		(7	)					0
Net loss for the six months ended December 31, 2022																					(1,759,399	)		(1,759,399	)
Balance at December 31, 2022		13,992,340	$	13,992		1,327,670	$	1,328		1	$	0		3,986,103		398		54,304,833			(58,317,951	)		(3,997,400	)

	Six-month period ended
	December 31,
	2022			2021
Cash flows from operating activities:
Net loss	$	(1,759,399	)	$	(3,106,284	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation		291,536			1,547,332
Amortization of debt discount		94,956			410,922
Derivative liability expense		58,139
(Gain) loss on change in fair value of derivative liability		33,862			(56,345	)
Amortization of deferred compensation		-			81,048
Loss on extinguishment of debt		504,925			-
Changes in operating assets and liabilities:
Accounts payable and accrued expenses		50,467			90,353
Prepaid license fee		(35,000	)		35,000
Accrued interest		71,981			64,368
Accrued compensation		410,434			10,000
Net cash used in operating activities		(278,099	)		(923,606	)

Cash flows from financing activities:
Proceeds from sale of common stock		-			1,500,000
Repayment of convertible notes payable		-			(115,000	)
Proceeds from convertible notes payable		105,000			-
Repayment of promissory notes payable		-			(225,000	)
Advances from officers		67,500			-

Net cash provided by financing activities		172,500			1,160,000

Net increase (decrease) in cash		(105,599	)		236,394

Cash, beginning of period		136,990			125,166

Cash, end of period	$	31,391		$	361,560

Supplemental disclosures of cash flow information:
Cash paid for interest	$	-		$	22,011
Cash paid for income taxes	$	-		$	-

Non-cash investing and financing activities:
Issuance of common stock for conversion of notes payable and accrued interest	$	77,049		$	831,047
Warrants issued on extinguishment of debt	$	186,972		$	-

(i)	reverse our common stock by a ratio of one thousand three hundred for one (1,350:1). The board of directors was authorized to implement the reverse stock split.

(ii)	Reduce the number of shares of common stock that the Company is authorized to issue to one billion (1,000,000,000) from ten billion (10,000,000,000).

●	the number of outstanding shares of the Company’s common stock and treasury stock is decrease based on the Reverse Split ratio of 1,350:1;
●	the number of shares of the Company’s common stock held by individual stockholders will decrease based on the Reverse Split ratio selected by the Board, and the number of stockholders who own “odd lots” of less than 100 shares of our common stock will increase;
●	the number of shares common stock reserved for issuance under our stock incentive plans are reduced proportionally based on the Reverse Split ratio of 1,350:1 (along with any other appropriate adjustments or modifications); and
●	the exercise price of our outstanding stock options and warrants and the conversion price of our outstanding convertible securities, including preferred stock, and the number of shares reserved for issuance upon exercise or conversion thereof are adjusted in accordance with their terms based on the Reverse Split ratio of 1,350:1.

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.

	Six Months Ended December 31,
	2022			2021
Effective exercise price	$	0.058		$	4.8735 – $27.00
Effective market price	$	0.081		$	8.10
Expected volatility		256.8	%	96.4% to 304.0		%
Risk-free interest		4.41	%	0.05%-0.25		%
Expected terms		60 days		60 - 711 days
Expected dividend rate		0	%		0	%

Derivative liabilities at June 30, 2022	$	35,297
Derivative liability expense		58,139
Loss on change in fair value of derivative liabilities		33,862
Derivative liabilities at December 31, 2022	$	127,298

Accrued interest payable at June 30, 2022	$	404,712
Interest expense accrued for the six months ended December 31, 2022		71,980
Conversion of accrued interest into common stock		(39,599	)
Accrued interest payable at December 31, 2022	$	437,093

	December 31,		June 30,
	2022		2022
Convertible notes payable	$	1,558,481	$	1,487,431
Discount on convertible notes		-		(412,944	)
Convertible notes, net		1,558,481		1,074,487

Convertible payable at June 30, 2022	$	1,487,431
Convertible notes issued during the six months ended December 31, 2022		105,000
Conversion of convertible notes payalbe into common stock		(33,950	)
Convertible payable at December 31, 2022	$	1,558,481

Value of warrants issued	$	186,972
Write-off of unamortized debt discount		317,953
Loss on extinguishment of debt	$	504,925

			Amount of		Amount of						Conversion
	Shares		Converted		Converted		Conversion				Price
Name	Issued		Principal		Interest		Expense		Total		Per Share
Talos Victory Fund		150,000	$	33,950	$	10,800	$	1,750	$	46,500	$	0.31
Mast Hill		98,550		0		28,799		1,750		30,549		0.31
Total		248,550	$	33,950	$	39,599	$	3,500	$	77,049	$	0.31

Expected volatility		285.9	%
Expected term	5 years
Risk-free interest rate		3.54	%
Forfeiture Rate		0	%
Expected dividend yield		0	%

	Number of			Weighted Average
	Warrants			Exercise Price
Common Stock Warrants
Balance at beginning of year		5,049		$	14.85
Granted		138,667		$	1.35
Exercised		(68,755	)		1.35
Forfeited		(5,912	)		1.35
Balance at end of period		69,049		$	2.37

Warrants exercisable at end of period		69,049		$	2.37

		Warrants Outstanding					Warrants Exercisable
Range of Exercise Price		Number Outstanding at December 31, 2022		Weighted Average Remaining Contractual Life	Weighted Average Exercise Price		Number Exercisable at December 31, 2022		Weighted Average Exercise Price
$	1.35		64,000	4.67 Years	$	1.35		64,000	$	1.35
$	7.425		1,212	0.03 Years	$	7.425		1,212	$	7.425
$	10.395		631	0.53 Years	$	10.395		631	$	10.395
$	12.285		1,339	1.75 Years	$	12.285		1,339	$	12.285
$	20.385		811	1.75 Years	$	20.385		811	$	20.385
$	27.00		1,056	0.11 Years	$	27.00		1,056	$	27.00
			69,049	4.39 Years	$	2.37		69,049	$	2.37

	Six months ended December 31,		Year ended June 30,
	2022		2022
Expected volatility	370% - 497%		370%-497%
Expected term	4 Years		4 Years
Risk-free interest rate	0.76%-0.84%		0.76%-0.84%
Forfeiture Rate		0.00%	0.00%
Expected dividend yield		0.00%	0.00%

			Weighted Average		Grant Date		Aggregate		Weighted Average
			Exercise		Fair		Intrinsic		Remaining
	Shares		Price		Value		Value		Term (Yrs)
Options
At June 30, 2022		2,222	$	27.00	$	-	$	0	3.33
Granted		-		-		-		-	-
Exercised		-		-		-		-	-
Forfeiture and cancelled		-		-				-	-
At December 31, 2022		2,222	$	27.00	$	-	$	0		3.33

	For the Six months ended
	December 31, 2022
				Weighted
				Average
				Grant Date
	Shares			Fair Value
Unvested at June 30, 2022		7,407		$	7.35
Granted		2,305,000		$	0.31
Forfeited		(40,000	)	$	0.31
Vested		(772,407	)	$	0.38
Unvested at December 31, 2022		1,500,000		$	0.43

·	through a virtual appliance model, primarily targeted to the Federal government, charging a seat license
·	through a SaaS model, charging a recurring monthly license fee for TruContext; and
·	through professional services to support and deliver cybersecurity solutions and services to its customers

	Six-Months Ended
	December 31,				%
	2022		2021		Change
Development expense	$	101,952	$	196,325		85	%

	Three-Months Ended
	December 31,				%
	2022		2021		Change
Development expense	$	47,060	$	85,912		681	%

	Balance at
	December 31, 2022			June 30, 2022
Cash	$	31,391			136,990
Accounts payable and accrued expenses		(643,402	)		(596,464	)
Accrued compensation		(1,025,017	)		(614,589	)
Notes, convertible notes, and accrued interest payable	$	(2,200,574	)		(1,684,199	)

	●	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 four members, however we lack the resources and personnel to implement proper segregation of duties or other risk mitigation systems.

31.1	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *

31.2	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *

32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 *

32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 *

	VISIUM TECHNOLOGIES, INC.

	By:	/S/ Mark B. Lucky
March 6, 2023		Mark B. Lucky
		CEO, principal executive officer

	By:	/S/ Mark Lucky
March 6, 2023		Mark Lucky
		CFO, principal accounting officer

1.	I have reviewed this Form 10-Q of Visium Technologies, Inc. for the quarter ended December 31, 2022;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;

4.	The small business issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:

	(a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	(b)	evaluated the effectiveness of the small business issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	(c)	disclosed in this report any change in the small business issuer’s internal control over financial reporting that occurred during the small business issuer’s most recent fiscal quarter (the small business issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting.

	(a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer’s ability to record, process, summarize and report financial information; and

	(b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer’s internal control over financial reporting.

By:	/s/ Mark Lucky
	Mark Lucky
	Chief Financial Officer, principal financial and accounting officer