VISIUM TECHNOLOGIES, INC. 10-K

Item 1. Business Overview Visium Technologies, Inc. (“Visium”) was incorporated in Nevada as Jaguar Investments, Inc. during October 1987. During March 2003, a wholly owned subsidiary of the Company merged with Freight Rate, Inc., a development stage company in the logistics software business. During May 2003, the Company changed its name to Power2Ship, Inc. During October 2006, the Company merged with a newly formed, wholly owned subsidiary, Fittipaldi Logistics, Inc., a Nevada corporation, with the Company surviving but its name changed to Fittipaldi Logistics, Inc. effective November 2006. During December 2007, the Company merged with a newly formed, wholly owned subsidiary, NuState Energy Holdings, Inc., a Nevada corporation, with the Company surviving but renamed NuState Energy Holdings, Inc. effective December 2007. In March 2018, the Company brought in a new management team and changed its name to Visium Technologies, Inc. Visium is a provider of cyber security visualization, big data analytics and automation that operates in the traditional cyber security space, as well as in the Internet of Things and data analytics spaces. In March 2019, Visium entered into a software license agreement with MITRE Corporation to license a patented technology known as CyGraph, a tool for cyber warfare analytics, visualization and knowledge management. CyGraph is a military-grade, highly scalable big data analytics tool for cyber security, based on graph database technology. The development of the technology was sponsored by the US Army and is currently in use by the U.S. Army Cyber Command. CyGraph provides advanced analytics for cybersecurity situational awareness that is scalable, flexible and comprehensive. Visium has completed significant proprietary product development efforts to commercialize CyGraph, which the Company has rebranded as TruContext TM . The commercialization efforts included adding functionality to the core technology to make it a native cloud application, adding multi-user and multi-tenant capability, enhancing the graphical user interface, (“GUI”) to make the application more intuitive to use, and adding enhanced dashboard and reporting capabilities. TruContext would typically be deployed by an enterprise and be used by the security analyst to intuitively understand the massive amount of data flowing through the network environment, giving the analyst actionable information in real-time to ensure that the network is protected from threats. The analyst will understand the relationships of the assets in the data center, the communication patterns, and cybersecurity exposures, in real-time. TruContext provides visualization, advanced cyber monitoring intelligence, threat hunting, forensic and root cause analysis, data modeling, analytics, and automation to help reduce risk, simplify security, and deliver better security outcomes. Our mission is to help people see and understand data, empowering decision-makers to make more informed and more timely decisions. Our solutions put the power of data into the hands of everyday people, allowing a broad population of business users to engage with their data, ask questions, solve problems, and create value. Our products dramatically reduce the complexity, and expense associated with traditional business intelligence applications. Our software allows people to access information, perform analysis, and share results without assistance from technical specialists. By putting powerful analytical technology directly into the hands of people who make decisions with data, we accelerate the pace of informed and intelligent decision-making. Our TruContext platform enables our customers to reduce or streamline their siloed and layered security products, simplifying operations while providing a comprehensive solution. Our solution automates certain previously manual tasks, freeing up personnel to focus on their most important objectives. TruContext can be deployed in a broad range of use cases such as cyber security threat intelligence and forensics, IT/OT critical infrastructure security, supply chain analytics, anti-fraud, law enforcement, compliance, and health care. For example, a breach of your network might go undetected for months, as was the case with the Solar Winds hack that occurred in 2019-2020. In that case the hackers went undetected for 14 months. A Solar Winds type breach may not be preventable, but with TruContext analyzing streaming network data in real-time, this hack would almost certainly have been identified and remediated very quickly. TruContext is a very effective tool for proactively and iteratively searching through networks to detect and isolate advanced threats that evade existing security solutions. Should a breach occur, TruContext can quickly perform forensics and root cause analysis, identifying when an incident occurred, how it occurred, and the downstream effects of the incident to the network. One of the top challenges faced by Security practitioners is to keep up with the increase in new cyber attacks while investigating and remediating existing threats. Time is of the essence while investigating potential threats and determining the scope and root-cause of a potential reach. Shortage of resources and experienced personnel continues to limit the ability of companies to conduct thorough investigations. Root cause analysis and forensics are key to intelligently securing the network. TruContext directly addresses these challenges by: Providing real-time comprehensive visualized information on security events, that · allow the cyber warrior to immediately pinpoint the root cause of the breach; and · know with certainty the priority and required remediation. The real-time ingestion of and visualization of massive amounts of data simplifies the cyber effort, allowing the cyber analyst to intuitively understand the security posture of the organization at a glance. Using TruContext makes the cyber analyst significantly more productive by eliminating false positives and prioritizing threat events. TruContext ingests cyber data from any source , making the data generated by other cyber tools easily understood and actionable. TruContext give the security analyst the ability to combine, layer, filter, and query data with a no-code user interface in a way that no other analytics platform can do. 4 Table of Contents There are some sophisticated and powerful cybersecurity tools currently available, but they all lack one thing – providing a comprehensive contextualized understanding of the data. Analysts have too many tools that don’t communicate, creating silos of data/information. TruContext brings all the information for a comprehensive visualization. On average, according to CrowdStrike, the time from breach to harm caused by threat actors is 98 minutes making the ability to: 1. Identify malicious hacks in real time; and 2. Perform threat hunting critically important for the security analyst Using the MITRE ATT&CK framework, TruContext can hunt threats beyond the physical network boundary so that the analyst fully understands his security posture in real time. TruContext leverages MITRE’s ATT&CK ® framework, which is a globally-accessible knowledge base of adversary tactics and techniques based on real-world observations. The ATT&CK knowledge base is used as a foundation for the development of specific threat models and methodologies in the private sector, in government, and in the cybersecurity product and service community. A use case example for TruContext would be in the event sensitive data is being exfiltrated from your network to an external IP address. TruContext has the capability to identify this activity and provide alerts that would allow the cyber analyst to quickly remediate the problem. Another example for TruContext would be the analysis of millions of unemployment insurance claims by a state government that identifies patterns to identify potential fraud. If 30 claims are submitted that are tied to a single bank account, or address, or social security number, TruContext would be able to identify these anomalies in real-time. TruContext offers new methods of uncovering fraud rings and other complex scams with a high level of accuracy through advanced contextual link analysis, and is capable of stopping advanced fraud scenarios in real time. This is currently a significant problem in every state, costing billions of dollars annually. One last example of how TruContext can be used by law enforcement in the context of police investigations. TruContext can analyze highly connected data in real time from any source and make connections which help police solve crime. Connections are quickly made between persons, objects, locations, and events (the POLE model), generating insights into patterns of behaviors and incidents. Using real-time data with TruContext helps investigators be proactive and prevent crime or other incidents, rather than only reacting after an incident has occurred. Visium currently plans to generate revenue in three (3) primary ways: ● through a virtual appliance model , primarily targeted to the Federal government, charging an annual seat license, with the seat license fee increasing based on the size of the network environment ; ● through a SaaS model , charging a recurring monthly license fee for TruContext based on the size of the network environment and the number of TruContext Identifiers (nodes); and ● through professional services to support and deliver cybersecurity solutions and services to its customers, billed on an hourly basis, and delivered through a service contract for implementation and data science services. Partnership Ecosystem We work with a number of technology alliance partners to design go-to-market strategies that combine our platform with products or services provided by our technology alliance partners. These partner integrations deliver more secure solutions and an improved end user experience to their customers. Our technology alliance partnerships focus on security analytics, network and infrastructure security, threat platforms and orchestration, and automation. Visium heavily relies on our technology and infrastructure to provide our products and services to our customers. For example, we host many of our products using third-party data center facilities, and we do not control the operation of these facilities. In addition, we rely on certain technology that we license from third parties, including third-party commercial software and open-source software, which is used with certain of our solutions. Competition The markets for our solutions are highly competitive, and we expect both the requirements and pricing competition to increase, particularly given the increasingly sophisticated attacks, changing customer preferences and requirements, current economic pressures, and market consolidation. Competitive pressures in these markets may result in price reductions, reduced margins, loss of market share and inability to gain market share, and a decline in sales, any one of which could seriously impact our business, financial condition, results of operations, and cash flows. We may face competition due to changes in the manner that organizations utilize IT assets and the security solutions applied to them, such as the provision of privileged account security functionalities as part of public cloud providers’ infrastructure offerings, or cloud-based identity management solutions. Limited IT budgets may also result in competition with providers of other advanced threat protection solutions such as McAfee, LLC, Palo Alto Networks, Splunk Inc., and Dynatrace. We also may compete, to a certain extent, with vendors that offer products or services in adjacent or complementary markets to privileged access management, including identity management vendors and cloud platform providers such as Okta and Tableau. Employees At September 30, 2022, we had 8 full time employees. Our principal offices are located at 4094 Majestic Lane, Suite 360, Fairfax, Virginia 22033. We currently operate in a virtual office arrangement. Our telephone number is (703) 273-0383. Our common stock is quoted on the OTC Pink under the symbol “VISM”. Recent Developments Appointment of Directors On December 13, 2021, the Company’s Board of Directors appointed Wayne H. Monk as a member of the Board of Directors. On December 16, 2021, the Company’s Board of Directors appointed Solomon Adote as a member of the Board of Directors. Approval of Reverse Stock Split and Reduction of Authorized Stock On June 20, 2022, the Company held a special meeting of stockholders, pursuant to which the stockholders of the Company voted in favor of an amendment to the Company’s Amended and Restated Certificate of Incorporation to effect a reverse stock split at a ratio not less than 1-for-600 and not greater than 1-for-1,600, with the exact ratio to be set within that range at the discretion of the board of directors without further approval or authorization of the stockholders, together with the simultaneous reduction of the number of shares of Common Stock that the Company is authorized to issue to one billion (1,000,000,000), was approved as follows: Financing Transactions On February 7, 2022, the Company entered into two securities purchase agreements with two separate institutional investors. Under these agreements, each investor separately purchased a promissory note with a face value of $270,000, for a total combined principal amount of $540,000 and a combined purchase price of $496,800. The closing of the purchase agreements occurred on February 7, 2022. Each promissory note was issued with original issue discount of $21,600 ($43,200 in the aggregate), each bear interest of 8% per year and mature on February 7, 2023. The promissory notes are convertible into shares of the Common Stock at conversion price of $0.0018 per share, subject to adjustment (the “Conversion Shares”). The Company has the right to prepay each promissory note in full, including accrued but unpaid interest, without prepayment penalty provided an event of default, as defined therein, has not occurred. The promissory notes contain events of defaults and negatives covenants customary for transactions of this nature. Pursuant to the securities purchase agreements, the Company issued to the investors an aggregate 54,000,000 commitment shares of the Company’s common stock (the “Commitment Shares”) as a condition to closing. In connection with the securities purchase agreements, the Company entered into a Registration Rights Agreements with each of the investors, pursuant to which the Company is obligated to file a registration statement covering the sale of the Commitment Shares and the shares of the Company’s common stock that may be issued to the investors pursuant to the conversion of the promissory notes. Resale of the Commitment Shares is being registered with the registration statement that this primary offering prospectus forms a part, with alternate disclosures for a resale prospectus that this registration statement also forms a part. On February 23, 2022, the Company entered into a securities purchase agreement with one institutional investor. Under this agreement, the investor separately purchased a promissory note with a face value of $270,000 and a purchase price of $248,400. The closing of the purchase agreements occurred on February 23, 2022. The promissory note was issued with original issue discount of $21,600, bears interest of 8% per year and mature on February 23, 2023. The promissory note is convertible into Conversion Shares at conversion price of $0.0018 per share, subject to adjustment. The Company has the right to prepay the promissory note in full, including accrued but unpaid interest, without prepayment penalty provided an event of default, as defined therein, has not occurred. The promissory note contains events of defaults and negatives covenants customary for transactions of this nature. Pursuant to the securities purchase agreement, the Company issued to the investors an aggregate 27,000,000 commitment shares of the Company’s common stock (the “Commitment Shares”) as a condition to closing. In connection with the securities purchase agreement, the Company entered into a Registration Rights Agreements with the investor, pursuant to which the Company is obligated to file a registration statement covering the sale of the Commitment Shares and the shares of the Company’s common stock that may be issued to the investor pursuant to the conversion of the promissory note. Resale of the Commitment Shares is being registered with the registration statement that this primary offering prospectus forms a part, with alternate disclosures for a resale prospectus that this registration statement also forms a part. On April 18, , the Company entered into a Securities Purchase Agreement with one institutional investor, pursuant to which the investor purchased a promissory note with a face value of $360,000, made by the Company in favor of the investors for a purchase price of $331,200. The Note bear an original issue discount of $28,800, bears interest of 8% per year and matures on April 20, 2023. The Note is convertible into shares of the Company’s common stock at conversion price of $0.0018 per share, subject to adjustment as provided therein. The Company has the right to prepay each Note in full, including accrued but unpaid interest, without prepayment penalty provided an event of default, as defined therein, has not occurred. In the seven (7) trading days prior to any prepayment the Investor shall have the right to convert their Notes into Common Stock of the Company in accordance with the terms of such Note. The Notes contain events of defaults and certain negatives covenants that are typical in the types of transactions contemplated by the Purchase Agreements. Pursuant to the Purchase Agreement, the Company issued to the Investor 36,000,000 commitment shares of the Company’s common stock (the “Commitment Shares”) as a condition to closing. On September 16, 2022, the Company entered into Amendment #1 with each of the investors party to the February 7, 2022, February 23, 2022 and March 1, 2022 transactions (the “Amendments”), pursuant to which the following amendments were made to the respective Purchase Agreements, Notes and other transaction documents: (i) such investors (the “Investors”) waived the Company’s obligations to make interim payments; (ii) the time period for the Company to file a registration statement for the resale of the shares underlying the Notes was extended until October 31, 2022. Pursuant to the Amendments, the Company issued to each of the Investors a warrant to purchase 43,200,000 shares of the Company’s common stock (129,600,000 shares in the aggregate) (the “Warrants”). The Warrants are exercisable at a price of $0.001, provided, however, that if the Company consummates an Uplist Offering (as defined in the Warrant to refer to an offering resulting in the Company’s stock being listed with a national stock exchange), then the exercise price shall equal the offering price per share of Common Stock (or unit, if units are offered in the Uplist Offering) at which the Uplist Offering is made (the “Uplist Exercise Price”), subject to adjustment as provided in the Warrant. The Warrants are exercisable for a period of five years and exercise may be cashless under certain circumstances.