VISIUM TECHNOLOGIES, INC. 10-K

Item 9A. Controls and Procedures. Evaluation of Disclosure Controls and Procedures Our management, with the participation of our Chief Executive Officer, who at June 30, 2022 was also our principal executive and financial officer, has evaluated the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Based upon that evaluation, our Chief Executive Officer concluded that, as of June 30, 2022, our disclosure controls and procedures were not effective in ensuring that material information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, including ensuring that such material information is accumulated and communicated to our Chief Executive Officer to allow timely decisions regarding required disclosure. Management Report on Internal Control over Financial Reporting 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 June 30, 2022. 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 June 30, 2022, 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 consists of six members, however, we lack the resources and personnel to implement proper segregation of duties or other risk mitigation systems. A material weakness is “a significant deficiency, or a combination of significant deficiencies, that 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, concluded that our internal control over financial reporting was not effective as of June 30, 2022. This annual 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 annual report. Changes in Internal Control over Financial Reporting There was no change in our internal control over financial reporting during the fiscal quarter ended June 30, 2022, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information None. 17 Table of Contents PART III Item 10. Directors, Executive Officers and Corporate Governance. The following table sets forth the names, ages and principal position of our executive officers and directors as of June 30, 2022: Name Age Position Mark Lucky 63 Chairman of the Board, Chief Executive Office, Chief Financial Officer Thomas Grbelja (1)(2) 63 Director Emmanuel Esaka, MD 49 Director Paul Favata (1)(2) 57 Director Wayne Monk 63 Director Solomon Adote 43 Director (1) Member of the Compensation Committee (2) Member of the Audit Committee Mr. Mark Lucky has served as the Company’s Chief Executive Officer, Treasurer, Secretary, and Chairman of the Company’s Board of Directors since February 2019. Mr. Lucky has been a certified public accountant and has more than 15 years of experience serving as a public company chief financial officer. His professional experience includes working with start-ups, development-stage and mature companies in a wide variety of industries. From May 2014 until February 2019 Mr. Lucky has worked as a consultant to various public and private companies, including Visium Technologies, Inc., Intelligent Living America, Inc. (OTCBB: ILIV), and Ronn Motor Group, Inc. Prior to that, Mr. Lucky served as the CFO for IceWeb Inc. (OTCBB: IWEB) from March 2007 to May 2014. From 2004 to 2005 he served as Vice President of Finance and Administration at Galt Associates, Inc., a Sterling, Virginia informatics/ technology and medical research services company and from 2001 to 2004 he was Vice President of Finance and Administration of MindShare Design, Inc., a San Francisco, California based internet technology company. During his career Mr. Lucky has also been employed by Axys Pharmaceuticals, Inc (NASDAQ: AXPH) a San Francisco, California-based early-stage drug discovery biotech company, PriceWaterhouseCoopers, LLC, COMPASS Management and Leasing, Inc., Mindscape, Inc., The Walt Disney Company and KPMG. Mr. Lucky formerly served as a member of the board of directors of Intelligent Living America, Inc., VOIS Inc. and HASCO Medical, Inc. Mr. Lucky received a B.A. degree in Economics from the University of California, Los Angeles. We believe that Mr. Lucky’s extensive senior management and operational experience brings valuable knowledge to our board of directors and that these experiences, qualifications, and attributes have led to our conclusion that Mr. Lucky should be serving as a member of our board of directors. Mr. Thomas Grbelja previously served as a director of Realbiz Media Group, Inc. (OTCBB: RBIZ), and served as their Chief Financial Officer from June 19, 2015 to January 2, 2017. Mr. Grbelja has spent over 30 years as a Certified Public Accountant providing a wide variety of professional accounting, tax and financial consulting services to professional service, manufacturing, and construction industry participants. Since 1990 he has served as the President and a Founding Member of Burke Grbelja & Symeonides, LLC, Certified Public Accountants, an accounting firm based in Rochelle Park, New Jersey. In addition, between 1983 and 1990, Mr. Grbelja worked as an accountant at Coopers & Lybrand, where he was responsible for the overall audit engagement, including filings with the SEC, for certain large, publicly traded companies. He received his undergraduate degree in accounting at Fairleigh Dickinson University and is a Certified Public Accountant. Based on his business experience the Company believes that Mr. Grbelja is well-qualified to serve on the Company’s Board of Directors. Mr. Paul Favata is a 29-year Wall Street veteran who began his career on the American Stock Exchange (AMEX), working for two smaller member firms, before moving to the New York Stock Exchange (NYSE). After five years with one of the largest specialist firms on the floor, Mr. Favata left the exchange in 1992 to work on the sell-side. Mr. Favata spent the bulk of the 1990’s with a small boutique firm working in both the retail and institutional sales areas. Mr. Favata held the position of Senior Vice President of Finance at a small, privately held consulting firm that advised clients on acquisitions and long-term financing strategies. Since 2008, Mr. Favata has held various C-level executive positions including as Chief Financial Officer of a $60 million annual revenue telecom provider having management oversight and responsibility for all financial functions while overseeing all revenues, costs, capital expenditures, investments, and debt. Most recently, President of a publicly traded company specializing in the acquisition and integration of IT and Cloud Technology service providers and Internet and web technologies. Mr. Favata resides, with his family, in Saint Petersburg, Florida. We believe that Mr. Favata’s extensive senior management and operational experience brings valuable knowledge to our board of directors and that these experiences, qualifications, and attributes have led to our conclusion that Mr. Favata should be serving as a member of our board of directors. 18 Table of Contents Dr. Emmanuel Esaka. Dr. Esaka brings decades of experience as a successful surgeon. He has earned an MBA from Auburn University, and graduated Cum Laude with Highest Honors from Università Degli Studi di Bologna, Italy School of Medicine and Surgery. He is the Founder, Owner, and CEO of Advanced Care Obstetrics and Gynecology PA in Wilmington, Delaware, Co-Founder and Managing Director of 3N Pharma USA, Inc., Founder and CEO of Cameroon American Health System, Inc., and Co-Founder of Caritas Home Health Services, Inc. Dr. Osaka also served as attending obstetrics and gynecology at Irwin Army Community Hospital, and serves as a Director of Meiger Health, Inc. We believe that Dr. Esaka’s extensive experience and business background adds valuable knowledge to our board of directors and that these experiences, qualifications, and attributes have led to our conclusion that Dr. Esaka should be serving as a member of our board of directors. Wayne Monk. Mr. Monk has over 35 years of enterprise solution sales, marketing and alliance management experience working with technology companies to drive growth and develop their partner ecosystem to reach new customers and markets. Mr. Monk has a unique blend of sales and marketing leadership with the right level of technical expertise and proven business experience to help organizations accelerate their growth to new heights. Mr. Monk has held leadership positions at ASG Technologies, Skytap, Informatica, HP Software, Mercury, and Computer Associates. Mr. Monk holds a BS in Computer Science from Virginia Tech. We believe that Mr. Monk’s extensive experience and business background, particularly involving his background in technology sales and channel development, adds valuable knowledge to our board of directors. Solomon Adote. Mr. Adote currently serves as the Chief Security Officer for the State of Delaware. Mr. Adote brings great experience designing comprehensive information security programs and deploying some of the industry's leading technologies. He has also developed hybrid-managed and in-house Security Operations Centers (SOC) and led the architecture and implementation of secure computing environments for both public and private clouds. Prior to his role with the State of Delaware, he led FMC, Inc.'s global IT cyber security team for six years. He was responsible for the security of a complex, 90-site international manufacturing and corporate network. His team covered all aspects of cyber security from network security, application security, incident response, identity, and access lifecycle management, to internet and remote access. Mr. Adote also previously worked as an IT security technical lead at QVC Inc., the third-largest e-commerce company in North America, where he secured a dynamic Payment Card Industry (PCI) compliant credit card processing environment with a web presence in multiple countries. Mr. Adote holds a Master of Science in Computer Information Technology degree from Regis University and various industry-leading certifications including Computer Information Security Management (CISM), Certified Information System Security Professional (CISSP), Cisco Certified Network Profession in Security (CCNP-S), Certified Ethical Hacker (C|EH), and SANs Firewall Security Analyst, among others. We believe that Mr. Adote’s extensive technology experience and business background, particularly involving network security, adds valuable knowledge to our board of directors. There are no family relationships among our directors or executive officers. Committees of the Board of Directors Our Board of Directors has established an Audit Committee, and a Compensation Committee, and meet as a whole to fulfill the functions of the Nominating Committee. Audit Committee . Mr. Favata and Mr. Grbelja are members of the Audit Committee. The Audit Committee of our Board of Directors was formed to assist the Board of Directors in fulfilling its oversight responsibilities for the integrity of our consolidated financial statements, compliance with legal and regulatory requirements, the independent registered public accounting firm’s qualifications and independence, and the performance of our internal audit function and independent auditors. The Audit Committee will also prepare the report that SEC rules require be included in our annual proxy statement. The Audit Committee has adopted a charter which sets forth the parameters of its authority The Audit Committee Charter provides that the Audit Committee is empowered to: ● Appoint, compensate, and oversee the work of the independent registered public accounting firm employed by our company to conduct the annual audit. This firm will report directly to the audit committee; ● Resolve any disagreements between management and the auditor regarding financial reporting; ● Pre-approve all auditing and permitted non-audit services performed by our external audit firm; ● Retain independent counsel, accountants, or others to advise the committee or assist in the conduct of an investigation; ● Seek any information it requires from employees - all of whom are directed to cooperate with the committee’s requests - or external parties; ● Meet with our officers, external auditors, or outside counsel, as necessary; and ● The committee may delegate authority to subcommittees, including the authority to pre-approve all auditing and permitted non-audit services, provided that such decisions are presented to the full committee at its next scheduled meeting. 19 Table of Contents Each Audit Committee member is required to: ● satisfy the independence requirements of Section 10A(m)(3) of the Securities Exchange Act of 1934, and all rules and regulations promulgated by the SEC as well as the rules imposed by the stock exchange or other marketplace on which our securities may be listed from time to time, and ● meet the definitions of “non-employee director” for purposes of SEC Rule 16b-3 and “outside director” for purposes of Section 162(m) of the Internal Revenue Code. Each committee member is required to be financially literate and at least one member is to be designated as the “financial expert,” as defined by applicable legislation and regulation. No committee member is permitted to simultaneously serve on the audit committees of more than two other public companies. As we expand our Board of Directors with additional independent directors the number of directors serving on the Audit Committee will also increase. A copy of the Audit Committee Charter is available on our website at www.visiumtechnologies.com under “Investor Relations”. Compensation Committee . Mr. Favata and Mr. Grbelja are members of the Compensation Committee. The Compensation Committee was appointed by the Board to discharge the Board’s responsibilities relating to: ● compensation of our executives, ● equity-based compensation plans, including, without limitation, stock option and restricted stock plans, in which officers or employees may participate and ● arrangements with executive officers relating to their employment relationships with our company, including employment agreements, severance agreements, supplemental pension, or savings arrangements, change in control agreements and restrictive covenants. The Compensation Committee has adopted a charter. The Compensation Committee charter provides that the Compensation Committee has overall responsibility for approving and evaluating executive officer compensation plans, policies, and programs of our company, as well as all equity-based compensation plans and policies. In addition, the Compensation Committee oversees, reviews, and approves all of our ERISA and other employee benefit plans which we may establish from time to time. The Compensation Committee is also responsible for producing an annual report on executive compensation for inclusion in our proxy statement and assisting in the preparation of certain information to be included in other periodic reports filed with the SEC. Each Compensation Committee member is required to: ● satisfy the independence requirements of Section 10A(m)(3) of the Securities Exchange Act of 1934, and all rules and regulations promulgated by the SEC as well as the rules imposed by the stock exchange or other marketplace on which our securities may be listed from time to time, and ● meet the definitions of “non-employee director” for purposes of SEC Rule 16b-3 and “outside director” for purposes of Section 162(m) of the Internal Revenue Code. Pursuant to our Compensation Committee Charter, the Compensation Committee is charged with evaluating and recommending for approval by the Board of Directors the compensation of our executive officers. In addition, the Compensation Committee also evaluates and makes recommendations to the entire Board of Directors regarding grants of options which may be made as director compensation. The Compensation Committee does not delegate these authorities to any other persons, nor does it use the services of any compensation consultants. Compliance with Section 16(a) of the Exchange Act Section 16(a) of the Securities Exchange Act of 1934 requires our officers and directors, and persons who own more than ten percent of a registered class of our equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Such persons are required by SEC regulations to furnish us with copies of all Section 16(a) reports they file. To our knowledge, based solely on our review of the copies of such reports furnished to us and written representations that no other reports were required to be filed during fiscal 2020, we believe that for fiscal 2021, all required reports were filed on a timely basis under Section 16(a), except for Dr Esaka, who had not yet filed his initial Form 3 or subsequent Form 4 and Form 5. Code of Ethics We have adopted a Code of Ethics and Business Conduct to provide guiding principles to our principal executive officer, principal financial officer, and principal accounting officer or controller of our company in the performance of their duties. Our Code of Ethics and Business Conduct also strongly recommends that all directors and employees of our company comply with the code in the performance of their duties. Our Code of Ethics and Business Conduct provides that the basic principle that governs all of our officers, directors and employees is that our business should be carried on with loyalty to the interest of our stockholders, customers, suppliers, fellow employees, strategic partners and other business associates. We believe that the philosophy and operating style of our management are essential to the establishment of a proper corporate environment for the conduct of our business. 20 Table of Contents Generally, our Code of Ethics and Business Conduct provides guidelines regarding: · conflicts of interest, · financial reporting responsibilities, · insider trading, · inappropriate and irregular conduct, · political contributions, and · compliance with laws. Item 11. Executive Compensation. The following table sets forth, for the last two completed fiscal years, all compensation paid, distributed or accrued for services rendered to us by (i) all individuals serving as our principal executive officer or acting in a similar capacity during the last completed fiscal year, regardless of compensation level; (ii) our two most highly compensated executive officers other than the principal executive officer who were serving as executive officers at the end of the last completed fiscal year and whose total compensation exceeded $100,000; and (iii) up to two additional individuals for whom disclosure would have been provided pursuant to (ii) above but for the fact that the individual was not serving as our executive officer at the end of the last completed fiscal year: Summary Compensation Table Non- Equity Non-Qualified Incentive Plan Deferred All Other Name and Principal Position Year Salary ($)(1) Bonus ($) Stock Awards Option Awards ($) Compensation ($) Compensation Earnings Compensation ($) Total ($) Mark Lucky (1) 2022 $ 400,000 $ $ 690,000 $ $ $ $ $ 1,090,000 Chief Executive Officer and Chief Financial Officer 2021 $ 374,000 $ $ 1,906,000 $ $ $ $ $ 2,280,000 (1) Amounts includes accrued compensation for Mr. Lucky. Employment Agreements Currently no employees are party to any employment agreement with the Company. We anticipate that as we complete certain acquisition transactions, the Company will enter into employment agreements with key executives. Pension, Retirement or Similar Benefit Plans There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. Our directors and executive officers may receive stock options at the discretion of our Board in the future. Outstanding Equity Awards at Fiscal Year-End The following table provides information concerning equity incentive plan awards for each named executive officer outstanding as of June 30, 2022: OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END STOCK AWARDS Equity Equity Incentive Incentive Plan Market Plan Awards: Number Value Awards: Market of of Number or Payout Shares Shares of Value of or or Unearned Unearned Units Units Shares, Shares, of of Units or Units or Stock Stock Other Other That That Rights Rights Have Have That That Not Not Have Not Have Not Vested Vested Vested Vested Name (#) ($) (#) (#) (a) (g) (h) (i) (j) None - $ - - - 21 Table of Contents Director Compensation Our Board of Directors is comprised of Mr. Paul Favata, Mr. Tom Grbelja, Dr. Emmanuel Esaka, and Mr. Mark Lucky, who is also an executive officer of our company. In March 2021, Messrs. Favata and Grbelja each received restricted stock grants as compensation for their Board services. The following table sets forth the restricted stock grants issued to Messrs. Favata, Grbelja, and Dr. Esaka as compensation for their Board service: FY2022 FY2021 Common Shares Common Shares Name Granted/Vested Expense Granted/Vested Expense Tom Grbelja 8,894 138,000 56,296 $ 857,000 Paul Favata 2,967 46,000 1,481 23,000 Emmanuel Esaka 2,967 46,000 1,481 23,000 Wayne Monk 18,519 95,000 - - Solomon Adote 19,260 145,000 - - 52,607 470,000 59,258 $ 903,000 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters. At September 25, 2022, we had 2,896,396 shares of our Common Stock outstanding. The following table sets forth information regarding the beneficial ownership of our Common Stock as of September 25, 2022: ● each person known by us to be the beneficial owner of more than 5% of our Common Stock; ● our director; ● each of our executive officers named in the compensation tables in Item 11; and ● all of our executive officers and director as a group. Amount and Nature of Beneficial Ownership COMMON STOCK Series AA Preferred Stock Ownership AMOUNT OF AMOUNT OF % OF VOTING BENEFICIAL % OF BENEFICIAL % OF CONTROL NAME OWNERSHIP CLASS OWNERSHIP CLASS (1 ) Mark Lucky 339,465 11.70 % 1 100 % 56.73 % Tom Grbelja 115,169 3.97 % 1.94 % Paul Favata 23,214 0.80 % 0.39 % Emmanuel Esaka 75,688 2.61 % 1.28 % Wayne Monk 21,483 0.74 % 0.36 % Solomon Adote 23,707 0.82 % 0.40 % Officers and directors as a group 598,726 20.63 % 1 100 % 61.11 % Total 598,726 20.63 % 1 100 % 61.11 % (1) Percent of Voting Control is based upon the number of outstanding shares of our common stock and our Series AA Preferred Stock as of September 30, 2022. On that date, we had 2,901,590 outstanding shares of common stock with one vote per share, and 1 share of Series AA Preferred Stock outstanding with voting rights equal to 51% of the outstanding common shares. 22 Table of Contents The following table sets forth securities authorized for issuance under any equity compensation plans approved by our stockholders as well as any equity compensation plans not approved by our stockholder as of June 30, 2022. Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) Weighted-average exercise price of outstanding options, warrants and rights (b) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) Equity compensation plans approved by security holders 2021 Employee Stock Compensation Plan 2,222 $ 27.00 88,888 Equity compensation plans not approved by security holders - - - Total 2,222 $ 27.00 88,888 Item 13. Certain Relationship and Related Party Transactions, and Director Independence. Other than compensation arrangements, we describe below, transactions during our last fiscal year, to which we were a party, in which: ● The amounts involved exceeded or will exceed the lesser of $120,000 or 1% of the average of our total assets at year-end for the last two completed fiscal years; and ● Any of our directors, executive officers, or holders of more than 5% of our common stock, or any member of the immediate family of the foregoing persons, had or will have a direct or indirect material interest. Common Stock Issuances of Common Stock During Fiscal 2022 During fiscal 2022 we issued shares of our common stock as follows: Convertible Notes Payable During the year ended June 30, 2022 the Company issued 146,701 shares of its common stock related to the conversion of $828,797 of principal and accrued interest of its convertible notes payable, at an average contract conversion price of $5.66 per share. The fair value of the shares issued was $831,048. Sale of Restricted Common Stock During the year ended June 30, 2022, the Company sold 222,223 shares of its $0.0001 par value common stock valued at $1,500,000, or $6.75 per share. Commitment Shares During the year ended June 30, 2022, we issued 86,667 shares of its common stock as commitment shares related to four financing transactions that raised an aggregate $1,170,000. The fair value of the commitment shares totaled $236,567 and was accounted for as discount on the related notes payable, which is being amortized over the term of the note. Stock Based Compensation During the year ended June 30, 2022, the Company issued 100,758 shares of its $0.0001 par value common stock as compensation to its directors and officers. The shares were valued at $1,134,118, or $11.25 per share, based on the share price at the time of the transactions. During the year ended June 30, 2022, the Company issued and vested 53,334 shares of its $0.0001 par value common stock to three consultants, as compensation under three separate consulting agreements. The shares were valued at $763,036, or $13.88 per share, based on the share price at the time of the transactions. During the year ended June 30, 2022, the Company issued and vested 54,955 shares of its $0.0001 par value common stock to its employees, as compensation. The shares were valued at $255,033, or $4.78 per share, based on the share price at the time of the transactions. 23 Table of Contents Issuances of Common Stock During Fiscal 2021 During fiscal 2021 we issued shares of our common stock as follows: Convertible Notes Payable During the year ended June 30, 2021, the Company issued 388,550 shares of its common stock related to the conversion of $188,460 of principal and accrued interest of its convertible notes payable, at an average contract conversion price of $0.50 per share. The fair value of the shares issued was $2,422,722. Sale of Restricted Common Stock During the year ended June 30, 2021, the Company issued 166,667 commitment shares related to convertible note transactions, with 4 investors. Stock Based Compensation During the year ended June 30, 2021, the Company issued 162,963 shares of its $0.0001 par value common stock as compensation to its directors and officers. The shares were valued at $2,809,000, or $17.55 per share, based on the share price at the time of the transactions. During the year ended June 30, 2021, the Company issued and vested 41,975 shares of its $0.0001 par value common stock to three consultants, as compensation under three separate consulting agreements. The shares were valued at $354,000, or $8.43 per share, based on the share price at the time of the transactions. Director Independence Although our common stock is not listed on any national securities exchange, for purposes of independence we use the definition of independence applied by The Nasdaq Stock Market. The Board has determined that each of Paul Favata, Tom Grbelja, and Dr. Emmanuel Esaka are “independent” in accordance with such definition. Item 14. Principal Accountant Fees and Services During the two most recent fiscal years and through the Engagement Date, neither the Company, nor any one on its behalf, consulted with Assurance Dimensions, Inc. in regard to the application of accounting principles to any specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s financial statements, or any other matters or reportable events as defined in Item 304(a)(2)(i) and (ii) of Regulation S-K. The following table summarizes the fees of Assurance Dimensions, Inc., our independent registered public accounting firm billed for each of the last two fiscal years for audit services and other services: Fee Category 2022 2021 Audit Related Fees Paid to Assurance Dimensions, Inc. (1) $ 35,500 $ 35,500 Tax Fees (2) - All Other Fees - Total Fees $ 35,500 $ 35,500 (1) Consists of fees for professional services rendered in connection with the financial statements included in our Annual Report on Form 10-K and quarterly reports on Form 10-Q. (2) Consists of fees relating to any tax compliance and tax planning. 24 Table of Contents PART IV Item 15. Exhibits and Financial Statement Schedules a. Index to Financial Statements and Financial Statement Schedules Page Report of Independent Registered Public Accounting Firm F-2 Consolidated Balance Sheets as of June 30, 2022 and 2021 F-3 Consolidated Statements of Operations for each of the two years in the period ended June 30, 2022 F-4 Consolidated Statements of Changes in Stockholders’ Deficit for each of the two years in the period ended June 30, 2022 F-5 Consolidated Statements of Cash Flows for each of the two years in the period ended June 30, 2022 F-6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS F-7 - F-18 All other schedules for which provision is made in the applicable accounting regulations of the SEC are not required under the related instructions, or are inapplicable, and therefore have been omitted. b. Exhibits Exhibit No. Description of Exhibit 2.1 Merger Agreement Between Jaguar Investments, Inc., Freight Rate, Inc., and Jag2 Corporation (1) 2.2 Agreement and Plan of Merger Between Fittipaldi Logistics, Inc. and State Petroleum Distributors, Inc. (30) 2.3 Membership Interest Purchase Agreement by and Among Threat Surface Solutions Group, LLC, Acquired Data Solutions, Inc., Ramparts, LLC, and Kevin Anderson, an Individual, and Visium Technologies, Inc. (36) 2.4 Amendment to Membership Interest Purchase Agreement (37) 3.1 Articles of Incorporation (2) 3.2 Certificate of Amendment to Articles of Incorporation (3) 3.3 Certificate of Amendment to the Articles of Incorporation (4) 3.4 Certificate of Voting Powers, Designations, Preferences and Rights to Series B Convertible Preferred Stock (10) 3.5 Certificate of Voting Powers, Designations, Preferences and Rights to Series C Convertible Preferred Stock (10) 3.6 Certificate of Voting Powers, Designations, Preferences and Rights to Series Y Preferred Stock (5) 3.7 Certificate of Correction of Certificate of Voting Powers, Designations, Preferences and Right to Series Y Preferred Stock (5) 3.8 Certificate of Amendment to Articles of Incorporation Increasing Authorized Shares of Common Stock to 250,000,000 filed on August 13, 2004 (9) 3.9 Certificate of Voting Powers, Designations, Preferences and Rights to Preferred Stock of Series X Convertible Preferred Stock (5) 3.10 Bylaws (2) 3.11 Amended Bylaws dated March 31, 2003 (5) 3.12 Certificate to Set Forth Designations, Preferences and Rights to Series D Convertible Preferred Stock (23) 3.13 Certificate to Set Forth Designations, Preferences and Rights to Series E Convertible Preferred Stock (29) 3.14 Certificate to Set Forth Designations, Preferences and Rights to Series F Convertible Preferred Stock (29) 3.15 Certificate to Set Forth Designations, Preferences and Rights to Series G Convertible Preferred Stock (29) 3.16 Certificate to Set Forth Designations, Preferences and Rights to Series H Convertible Preferred Stock (29) 3.17 Certificate to Set Forth Designations, Preferences and Rights to Series I Convertible Preferred Stock (29) 3.18 Certificate to Set Forth Designations, Preferences and Rights to Series J Convertible Preferred Stock (35) 4.1 Form of Common Stock Purchase Warrant to Newbridge Securities Corporation for Business Advisory Agreement (10) 4.1 Form of Unsecured Promissory Note to Talos Victory Fund, LLC and Mast Hill Fund, L.P. for $270,000 Principal Amount (40) 4.1 Form of Unsecured Promissory Note to Investor for $270,000 Principal Amount (41) 4.2 Form of 14.25% secured convertible debenture (35) 4.3 $100,000 principal amount promissory note pursuant to settlement agreement with Stokes Logistics Consulting, LLC (35) 25 Table of Contents 4.4 $100,000 principal amount 8% secured convertible promissory note (35) 4.5 Letter of agreement dated February 8, 2008 evidencing $25,000 principal promissory note to Canberra Financial Services II, Inc. (35) 4.6 $14,000 principal 12.5% promissory note for services (35) 4.7 Form of unsecured promissory note (35) 4.8 Form of non-plan option agreement (10) 4.9 Form of common stock purchase warrant (10) 4.10 Form of Common Stock Purchase Warrant re: 14.25% secured convertible debentures (10) 4.11 Form of Common Stock Purchase Warrant issued to Newbridge Securities Corporation as Placement Agent for 14.25% secured convertible debentures (10) 4.12 Form of Series C 10% unsecured convertible debenture (20) 4.13 Form of Warrant for Series C 10% unsecured convertible debenture offering (35) 4.14 Form of Series D 8% unsecured convertible debenture (35) 4.15 Form of 10% convertible debenture (35) 4.16 Form of Warrant for Series D 8% unsecured convertible debenture (22) 4.17 Articles of Merger between Power2Ship, Inc. and Fittipaldi Logistics, Inc. (25) 4.18 Form of Term Sheet for Purchase of Outstanding Debentures (Version 2) (28) 4.19 Form of Term Sheet for Purchase of Outstanding Debentures (Version 1) (28) 4.20 Form of Non-Plan Stock Option Agreement for Employees (29) 4.21 Form of Non-Plan Stock Options Agreement for Executives (29) 4.22 Articles of Merger between Fittipaldi Logistics, Inc. and Visium Technologies, Inc. (31) 4.23 $10,000 principal amount 12% convertible promissory note (35) 4.24 $5,000 principal amount 12% convertible promissory note (35) 4.25 $25,000 principal amount 12% convertible promissory note (35) 4.26 $25,000 principal amount 12% convertible promissory note (35) 4.27 $20,000 principal amount 12% convertible promissory note (35) 4.28 $20,000 principal amount 12% convertible promissory note (35) 4.29 $5,000 principal amount 12% convertible promissory note (35) 4.30 $20,000 principal amount 12% convertible promissory note (35) 4.31 $25,000 principal amount 12% convertible promissory note (35) 4.32 $25,000 principal amount 18% convertible promissory note (35) 4.33 $12,000 principal amount 12% convertible promissory note (35) 4.34 $10,000 principal amount 12% convertible promissory note (35) 4.35 $20,000 principal amount 12% convertible promissory note (35) 4.36 $18,000 principal 12.5% promissory note for services (35) 4.37 $30,000 principal amount 12% convertible promissory note (35) 26 Table of Contents 4.38 $15,000 principal amount 12% convertible promissory note (35) 4.39 $10,000 principal amount 12% convertible promissory note (35) 4.40 $25,000 principal amount 18% convertible promissory note (35) 4.41 $25,000 principal amount 18% convertible promissory note (35) 4.42 $15,000 principal amount 12% convertible promissory note (35) 4.43 $25,000 principal amount 12% convertible promissory note (35) 4.44 $10,000 principal amount 12% convertible promissory note (35) 4.45 $25,000 principal amount 12% convertible promissory note (35) 4.46 $10,000 principal amount 12% convertible promissory note (35) 4.47 Form of Promissory Note issued to FirstFire Global Opportunities Fund, LLC (37) 4.48 Form of Warrant issued to FirstFire Global Opportunities Fund, LLC (37) 4.49 Form of Promissory Note issued to Auctus Fund, LLC (38) 4.50 Form of Warrant issued to Auctus Fund, LLC (38) 4.51 Form of Unsecured Promissory Note (40) 4.52 Form of Unsecured Promissory Note (41) 4.53 Form of Unsecured Promissory Note (42) 4.54 Form of Warrant (42) 10.1 Securities Purchase Agreement (6) 10.2 Investor Registration Rights Agreement (6) 10.3 2001 Employee Stock Compensation Plan (3) 10.4 Employment Agreement with Richard Hersh (8) 10.5 Form of Intellectual Property Assignment Agreement between Power2Ship, Inc. and each of Richard Hersh, Michael J. Darden and John Urbanowicz (10) 10.6 Security Agreements for 14.25% secured convertible debentures (10) 10.7 Registration Rights Agreement for 14.25% secured convertible debentures (10) 10.8 Asset Purchase Agreement with GFC, Inc. (14) 10.9 Mutual Agreement with Commodity Express Transportation, Inc. (15) 10.10 Asset Purchase Agreement with GFC, Inc. (16) 10.11 Form of Unsecured Promissory Note (13) 10.12 Separation and Severance Agreement with Richard Hersh (23) 10.13 Consulting Agreement with Richard Hersh (23) 10.14 Consulting Agreement with David S. Brooks and S. Kevin Yates (as amended) (23) 10.15 Software Transaction Agreement Between Visium Technologies, Inc., Rentar Environmental Solutions, Inc. and the organizers of a new company to be formed (33) 10.16 Capital Contribution Agreement Between Rentar Logic, Inc., Rentar Environmental Solutions, Inc. and Visium Technologies, Inc. (33) 10.17 Rentar Logic, Inc. Shareholders Agreement (33) 10.18 Voting Trust Agreement Between Rentar Logic, Inc., Rentar Environmental Solutions, Inc. and Visium Technologies, Inc. (33) 10.19 Visium/Rentar Agreement April 2010 (35) 10.20 Employment Agreement with Kevin Yates (35) 10.21 Consulting Agreement with Will Williams (35) 10.22 Consulting Agreement with Mobile Software Team, LLC (35) 10.23 Consulting Agreement with C3i Sports, LLC (35) 10.24 Exclusive License Agreement between George Mason Research Foundation, Inc. and Visium Technologies, Inc.(36) 10.25 Securities Purchase Agreement by and between the Company and FirstFire Global Opportunities Fund, LLC (37) 10.26 Securities Purchase Agreement by and between the Company and Auctus Fund, LLC (38) 10.27 Amendment to License Agreement between MITRE Corporation and Visium Analytics, LLC (39) 10.28 Form of Securities Purchase Agreement (40) 10.29 Form of Registration Rights Agreement (40) 10.30 Form of Securities Purchase Agreement (41) 10.31 Form of Registration Rights Agreement (41) 10.32 Form of Securities Purchase Agreement (42) 10.33 Form of Amendment #1 (42) 14.1 Code of Ethics (11) 21.1 Subsidiaries of Registrant (20)* 31.1 Section 302 Certificate of Chief Executive Officer.* 31.2 Section 302 Certificate of Principal Financial Officer.* 32.1 Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002* 32.2 Certification of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002* 101. The following materials from the Company’s Annual Report on Form 10-K for the year ended June 30, 2013, formatted in XBRL (eXtensible Business Reporting Language): (i) the Balance Sheets, (ii) the Statements of Operations, (iii) the Statements of Cash Flows, and (iv) related notes to these financial statements.** 27 Table of Contents * Filed herewith. ** Furnished herewith. (1) Incorporated by reference to Current Report on Form 8-K filed on March 26, 2003. (2) Incorporated by reference to registration statement on Form 10-SB, as amended. (3) Incorporated by reference to definitive Schedule 14C Information Statement filed on February 2, 2001. (4) Incorporated by reference to definitive Schedule 14C Information Statement filed on April 22, 2003. (5) Incorporated by reference to Annual Report on Form 10-K for the fiscal year ended December 31, 2002. (6) Incorporated by reference to Current Report on Form 8-K filed on July 8, 2004. (7) Incorporated by reference to Current Report on Form 8-K filed on January 3, 2002. (8) Incorporated by reference to Quarterly Report on Form 10-QSB for the period ended March 31, 2003. (9) Incorporated by reference to Preliminary Information Statement on Schedule 14C filed on July 8, 2004. (10) Incorporated by reference to registration statement on Form SB-2, SEC File No. 333-118792, filed on September 3, 2004. (11) Incorporated by reference to Amendment No. 1 to registration statement the Form SB-2, SEC File No. 333-118792, filed on October 20, 2004. (12) Incorporated by reference to Amendment No. 3 to the registration statement on Form SB-2, SEC File No. 333-118792, filed on December 15, 2004. (13) Incorporated by reference to Quarterly Report on Form 10-QSB for the period ended December 31, 2004 filed on February 14, 2005. (14) Incorporated by reference to Current Report on Form 8-K/A filed on February 25, 2005. (15) Incorporated by reference to Current Report on Form 8-K filed on March 25, 2005. (16) Incorporated by reference to Current Report on Form 8-K filed on March 28, 2005. (17) Incorporated by reference to Quarterly Report on Form 10-QSB for the period ended March 31, 2005. (18) Incorporated by reference to Current Report on Form 8-K filed on June 3, 2005. (19) Incorporated by reference to Current Report on Form 8-K filed on July 28, 2005. (20) Reserved (21) Incorporated by reference to Current Report on Form 8-K filed on February 17, 2006. (22) Incorporated by reference to Amendment No. 1 to registration statement the Form SB-2, SEC File No. 333-131832 filed on May 5, 2006. (23) Incorporated by reference to Annual Report on Form 10-K for the fiscal year ended June 30, 2006 filed on October 13, 2006. (24) Incorporated by reference to Current Report on Form 8-K filed on October 17, 2006. (25) Incorporated by reference to Current Report on Form 8-K filed on October 24, 2006. (26) Incorporated by reference to Current Report on Form 8-K filed on January 26, 2007. (27) Incorporated by reference to Current Report on Form 8-K filed on April 30, 2007. (28) Incorporated by reference to Current Report on Form 8-K filed on July 25, 2007. (29) Incorporated by reference to Annual Report on Form 10-KSB filed on October 15, 2007. (30) Incorporated by reference to Current Report on Form 8-K filed on November 15, 2007. (31) Incorporated by reference to Current Report on Form 8-K filed on December 31, 2007. (32) Incorporated by reference to Current Report on Form 8-K filed on March 25, 2008. (33) Incorporated by reference to Current Report on Form 8-K filed on June 13, 2008. (34) Incorporated by reference to Current Report on Form 8-K filed on October 16, 2008. (35) Incorporated by reference to Registration Statement on Form 10-12G/A filed on June 14, 2013. (36) Incorporated by reference to Current Report on Form 8-K filed on July 27, 2019. (37) Incorporated by reference to Current Report on Form 8-K filed on January 10, 2019. (38) Incorporated by reference to Current Report on Form 8-K filed on January 16, 2019. (39) Incorporated by reference to Current Report on Form 8-K filed on May 13, 2020 (40) Incorporated by reference to Current Report on Form 8-K filed on February 11, 2022 (41) Incorporated by reference to Current Report on Form 8-K filed on March 4, 2022 (42) Incorporated by reference to Current Report on Form 8-K filed on September 22, 2022 28 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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. By: /s/ Mark Lucky Mark Lucky Chief Executive Officer Date: October 4, 2022 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. SIGNATURE TITLE DATE By: /s/ Mark Lucky Chief Executive Officer and Chief Financial Officer October 4, 2022 (principal accounting officer) 29 Table of Contents TABLE OF CONTENTS Report of Independent Registered Public Accounting Firm 5036 F-2 Financial Statements: Consolidated Balance Sheets F-3 Consolidated Statements of Operations F-4 Consolidated Statements of Changes in Stockholders’ Deficit F-5 Consolidated Statements of Cash Flows F-6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS F-7 - F-18 F-1 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Visium Technologies, Inc. Opinion on the Financial Statements We have audited the accompanying balance sheets of Visium Technologies, Inc (the Company) as of June 30, 2022 and 2021, and the related statements of operations, stockholders’ deficit and cash flows for each of the years in the two year period ended June 30, 2022, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the two year period ended June 30, 2022, in conformity with accounting principles generally accepted in the United States of America. Explanatory Paragraph – Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses as of June 30, 2022. For the year ended June 30, 2022, the Company had a net loss of $5,193,515 and net cash used in operating activities of $2,224,572, and had negative working capital of $2,793,558. These factors raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Valuation of Derivatives Description of the Matter The Company has issued various debt and equity offerings in the past. Convertible notes have various terms, including a conversion feature and warrants. The Company accounts for derivative instruments in accordance with Accounting Standards Codification 815, Derivatives and Hedging (“ASC 815”), which establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in the conversion feature and its warrants. Significant judgment is exercised by the Company in accounting and valuation of the financial instruments by using a Cox, Ross & Rubinstein Binomial Tree simulation to value them at inception and on any subsequent valuation dates. How We Addressed the Matter in Our Audit The primary procedures we performed to address this critical audit matter included evaluating all debt instruments, confirmation of significant balances, reviewing inputs used in the valuation of the derivative instruments, and performing a reasonableness test the accuracy of the Company’s calculations. We have served as the Company’s auditor since 2017. Margate, Florida October 4, 2022 F-2 Table of Contents VISIUM TECHNOLOGIES, INC. CONSOLIDATED BALANCE SHEETS June 30, 2022 2021 ASSETS Current assets: Cash $ 136,990 $ 125,166 Prepaid license fee - 55,418 Total current assets 136,990 180,584 Total assets $ 136,990 $ 180,584 LIABILITIES AND STOCKHOLDERS’ DEFICIT Current liabilities: Accounts payable and accrued expenses $ 596,463 $ 425,804 Accrued compensation 614,589 672,529 Accrued interest 404,712 366,149 Convertible notes payable to ASC Recap LLC - 147,965 Convertible notes payable, net of discount of $ 412,944 and $ 396,033 , respectively 1,074,487 809,195 Derivative liability 35,297 184,381 Notes payable, net of discount of $ 0 and $ 18,252 , respectively 205,000 411,748 Total current liabilities 2,930,548 3,017,771 Commitments and contingencies (Note 11) 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 June 30, 2022 and 2021, 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 June 30, 2022 and 2021, respectively) 1,328 1,328 Series AA Convertible Stock ($ 0.001 par value; 1 share authorized, 1 share issued and outstanding as of June 30, 2022 and 2021) 0 0 Common stock, $ 0.0001 par value, 1,000,000,000 shares authorized: 2,903,804 shares issued and 2,896,385 outstanding at June 30, 2022, and 2,280,202 shares issued and 2,182,423 outstanding at June 30, 2021, respectively (See Note 7) 288 218 Additional paid in capital 53,749,386 48,512,312 Accumulated deficit ( 56,558,552 ) ( 51,365,037 ) Total stockholders’ deficit ( 2,793,558 ) ( 2,837,187 ) Total liabilities and stockholders’ deficit $ 136,990 $ 180,584 See accompanying notes to consolidated financial statements. F-3 Table of Contents VISIUM TECHNOLOGIES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEAR ENDED June 30, 2022 June 30, 2021 Revenues $ - $ 25,000 Operating expenses: Selling, general and administrative 4,316,191 3,879,158 Development expense 361,298 258,168 Total operating expenses 4,677,489 4,137,326 Loss from operations ( 4,677,489 ) ( 4,112,326 ) Other income (expense) Gain on change in fair value of derivative liabilities 1,119 1,844,460 Derivative liability expense - ( 1,059,282 ) Interest expense ( 705,075 ) ( 442,171 ) Gain (loss) on debt settlement 187,930 28,863 Gain on debt write off - 578,408 Warrant exercise expense - ( 211,411 ) Total other income (expense) ( 516,026 ) 738,867 Net loss $ ( 5,193,515 ) $ ( 3,373,459 ) Weighted average common shares Basic and diluted 2,505,011 1,467,777 Net loss Per Common Share –Basic and Diluted: $ ( 2.07 ) $ ( 2.30 ) See accompanying notes to consolidated financial statements. F-4 Table of Contents VISIUM TECHNOLOGIES, INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT FOR THE YEARS ENDED JUNE 30, 2022 AND 2021 Preferred Preferred Preferred Stock - Stock - Stock - Common Series A Series B Series AA Stock $0.001 $0.001 $0.001 $0.0001 Additional Total Par Value Par Value Par Value Par Value Paid-in Accumulated Stockholders’ Shares Amount Shares Amount Shares Amount Shares Amount Capital Deficit Deficit Balance at June 30, 2020 13,992,340 $ 13,992 1,327,670 $ 1,328 1 $ 0 1,143,798 $ 114 $ 44,595,384 $ ( 47,991,578 ) $ ( 3,380,760 ) Shares issued as compensation to directors and officers 162,963 16 2,808,984 2,809,000 Shares issued for consulting services 41,975 4 353,996 354,000 Shares issued for conversion of notes payable 388,550 39 391,000 391,039 Commitment shares issued pursuant to financings 166,667 17 133,012 133,029 Shares issued upon exercise of stock warrants 278,470 28 211,383 211,411 Amortization of deferred compensation 18,553 18,553 Net loss for the year ended June 30, 2022 ( 3,373,459 ) ( 3,373,459 ) Balance at June 30, 2021 13,992,340 $ 13,992 1,327,670 $ 1,328 1 $ 0 2,182,423 $ 218 $ 48,512,312 $ ( 51,365,037 ) $ ( 2,837,187 ) Shares issued as compensation to directors and officers 100,758 10 1,173,790 1,173,800 Shares issued as compensation to employees 54,955 5 762,832 762,837 Shares issued for consulting services 53,334 5 241,795 241,800 Shares issued for conversion of notes payable 146,701 15 831,032 831,047 Shares issued pursuant to sale of common stock 222,222 22 1,499,978 1,500,000 Commitment shares issued pursuant to convertible notes payable 86,667 9 236,558 236,567 Benefical conversion feature with convertible debt 239,564 239,564 Shares issued upon exercise of stock warrants 4,881 0 - - Shares issued pursuant to settlement of litigation 44,444 4 107,996 108,000 Amortization of deferred compensation 143,529 143,529 Net loss for the year ended June 30, 2022 ( 5,193,515 ) ( 5,193,515 ) 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 ) See accompanying notes to consolidated financial statements. F-5 Table of Contents VISIUM TECHNOLOGIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED June 30, 2022 June 30, 2021 Cash flows from operating activities: Net loss $ ( 5,193,515 ) $ ( 3,373,459 ) Adjustments to reconcile net loss to net cash used in operating activities: Amortization of debt discounts 571,081 305,499 Stock based payments for consultants, directors, and officers 2,178,437 3,163,000 (Gain) loss on debt settlement ( 187,930 ) ( 607,271 ) Gain on change in fair value of derivative liabilities ( 1,119 ) ( 1,844,460 ) Amortization of deferred compensation 143,529 - Amortization of prepaid expense 55,417 - Warrant conversion expense - 211,411 Derivative liability expense - 1,059,282 Changes in operating assets and liabilities: Accounts payable and accrued expenses 169,538 445,850 Accrued compensation ( 57,940 ) 20,000 Accrued interest 97,926 96,007 Prepaid license fee - ( 55,417 Discount on notes payable - ( 213,082 ) Net cash used in operating activities ( 2,224,572 ) ( 792,640 ) Cash flows from financing activities: Advance from officers - ( 102,340 Proceeds from convertible notes payable 1,076,400 838,595 Proceeds from short term notes payable - 225,000 Proceeds from sale of common stock 1,500,000 - Repayment of short term notes payable ( 225,000 ) - Repayment of convertible notes payable ( 115,000 ) ( 73,700 ) Net cash provided by financing activities 2,236,400 887,555 Net increase in cash 11,824 94,915 Cash at beginning of year 125,166 30,251 Cash at end of year $ 136,990 $ 125,166 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid for: Interest $ 30,231 $ 39,755 Income taxes $ - $ - Issuance of common stock for conversion of notes payable and accrued interest $ 831,047 $ 188,460 Commitment shares issued pursuant to convertible notes payable 236,567 - Shares issued pursuant to settlement of litigation 108,000 - Beneficial conversion feature with convertible debt $ 239,564 - See accompanying notes to consolidated financial statements. F-6 Table of Contents VISIUM TECHNOLOGIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2022 AND 2021 NOTE 1: ORGANIZATION, DESCRIPTION OF BUSINESS AND GOING CONCERN Visium Technologies, Inc., or the Company, is a Florida corporation that was originally incorporated in Nevada in October 1987. It was formerly known as Jaguar Investments, Inc. between October 1987 and May 2003, Power2Ship, Inc. between May 2003 and November 2006, Fittipaldi Logistics, Inc. between November 2006 and December 2007, and as NuState Energy Holdings, Inc. between December 2007 and March 5, 2018 when it changed its name to Visium Technologies, Inc. Visium is a provider of cyber security visualization, big data analytics and automation that operates in the traditional cyber security space, as well as in the cloud-based technology and Internet of Things spaces. In March 2019, Visium entered into a software license agreement with MITRE Corporation to license a patented technology known as CyGraph, a tool for cyber warfare analytics, visualization and knowledge management. CyGraph is a military-grade, highly scalable big data analytics tool for cyber security, based on graph database technology. The development of the technology was sponsored by the US Army and is currently in use by the U.S. Army Cyber Command. CyGraph provides advanced analytics for cybersecurity situational awareness that is scalable, flexible and comprehensive. Visium has completed significant proprietary product development efforts to commercialize CyGraph which the Company has rebranded as TruContext TM . The commercialization efforts included adding functionality to the core technology to make it a native cloud application, adding multi-user and multi-tenant capability, enhancing the graphical user interface, (“GUI”) to make the application more intuitive to use, and adding enhanced dashboard and reporting capabilities. TruContext would typically be deployed by an enterprise and be used by the cyber analyst to intuitively understand the massive amount of data flowing through the network environment, giving him actionable information in real-time to ensure that the network is protected from threats. The analyst will understand the relationships of the assets in the data center, the communication patterns, and cybersecurity exposures, in real-time. In April 2021 the Company created JAJ Advisory, LLC, a Viriginia limited liability company. The LLC was established to account for non-cybersecurity related business activities that the Company may pursue. As of June 30, 2022 there has been no activity in this subsidiary. On June 20, 2022 a majority of the common shareholders approved certain corporate actions, and the Company filed an amendment to its Articles of Incorporation with the State Department of Corporations in the State of Florida to effect the following changes, effective September 22, 2022: (i) reverse the Common stock by a ratio of one thousand six 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 principal effects of the Reverse Split include the following: ● 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. Going Concern The accompanying consolidated financial statements have been prepared on a going concern basis. For the year ended June 30, 2022 we had a net loss of $ 5,193,515 , had net cash used in operating activities of $ 2,224,572 and had negative working capital of $ 2,793,558 . These matters raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the date of this filing. The Company’s ability to continue as a going concern is dependent upon its ability to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due, to fund possible future acquisitions, and to generate profitable operations in the future. Management plans to provide for the Company’s capital requirements by continuing to issue additional equity and debt securities. The outcome of these matters cannot be predicted at this time and there are no assurances that, if achieved, the Company will have sufficient funds to execute its business plan or generate positive operating results. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reporting amounts of revenues and expenses during the reported period. Actual results will differ from those estimates. Included in these estimates are assumptions used in Cox, Ross & Rubinstein Binomial Tree stock-based compensation and derivative liabilities valuation methods, such as expected volatility, risk-free interest rate, and expected dividend rate and in the valuation allowance of deferred tax assets. Cash and Cash Equivalents The Company considers all highly liquid, temporary, cash equivalents or investments with an original maturity of three months or less when purchased, to be cash equivalents. The Company had no cash equivalents during the years ended June 30, 2022 and 2021. Concentration of Credit Risks The Company is subject to a concentration of credit risk from cash. The Company’s cash account is held at a financial institution and is insured by the Federal Deposit Insurance Corporation, or FDIC, up to $ 250,000 . Derivative Liabilities The Company assessed the classification of its derivative financial instruments as of June 30, 2022 and 2021, 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. F-7 Table of Contents VISIUM TECHNOLOGIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2022 AND 2021 NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued The Company uses judgment in determining the fair value of derivative liabilities at the date of issuance and at every balance sheet thereafter and in determining which valuation method is most appropriate for the instrument, the expected volatility, the implied risk-free interest rate, as well as the expected dividend rate, if any. The Company recorded a derivative liability as of June 30, 2022 of $ 35,297 . 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, 2020 $ 438,663 Increase due to issuance of convertible note 1,059,282 Derivative liability adjsutments as a result of note discounts 530,896 Gain on change in fair value of derivative liability ( 1,844,460 ) Derivative liability at June 30, 2021 $ 184,381 Derivative liability reduced as a result of debt settlement ( 147,965 ) Gain on change in fair value of derivative liability ( 1,119 ) Derivative liability at June 30, 2022 $ 35,297 Additional Disclosures Regarding Fair Value Measurements The carrying value of cash, accounts payable and accrued expenses, accrued compensation, notes payable, convertible promissory notes payable, approximate their fair value due to the short maturity of these items or the use of market interest rates. At June 30, 2022 and 2021, the fair value of derivative liabilities is estimated using the Cox, Ross & Rubinstein Binomial Tree valuation model using inputs that include the expected volatility, the implied risk-free interest rate, as well as the expected dividend rate. The derivative liabilities are the only Level 3 fair value measures. Convertible Instruments The Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with ASC 470-20, Debt with Conversion and Other Options. Accordingly, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their earliest date of redemption. The Company also records deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. ASC 815-40, Contracts in Entity’s own Equity, generally provides that, among other things, if an event is not within the entity’s control, such contract could require net cash settlement and shall be classified as an asset or a liability. The Company determines whether the instruments issued in the transactions are considered indexed to the Company’s own stock. During fiscal years 2014 through 2020 the Company’s issued convertible securities with variable conversion provisions that resulted in derivative liabilities. See discussion above under derivative liabilities that resulted in a change in derivative liability accounting. F-8 Table of Contents VISIUM TECHNOLOGIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2022 AND 2021 NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued Revenue Recognition All revenues are recorded in accordance with ASC 606, which is recognized when: (i) a contract with a client has been identified, (ii) the performance obligation(s) in the contract have been identified, (iii) the transaction price has been determined, (iv) the transaction price has been allocated to each performance obligation in the contract, and (v) the Company has satisfied the applicable performance obligation over time. Income Taxes The Company accounts for income taxes pursuant to the provisions of ASC 740-10, “Accounting for Income Taxes,” which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized. The Company follows the provisions of ASC 740-10, “Accounting for Uncertain Income Tax Positions”. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits. The Company has adopted ASC 740-10-25, “ Definition of Settlement” , which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion of an examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. As of June 30, 2022, the Company had not filed tax returns for the tax years ending June 30, 2008 through 2021 and such returns, when filed, potentially will be subject to audit by the taxing authorities for a minimum of three years beyond the filing date under the three-year statute of limitations. The Company has not accrued any potential tax penalties associated with not filing these tax returns. Due to recurring losses, management believes such potential tax penalties, if any, would not be material in amount. Share-Based Payments The Company accounts for stock-based compensation in accordance with ASU 2020-07, Compensation – Stock Compensation (Topic 718). This update is intended to reduce cost and complexity and to improve financial reporting for share-based payments issued to non-employees (for example, service providers, external legal counsel, suppliers, etc.). The ASU expands the scope of Topic 718, Compensation—Stock Compensation, which currently only includes share-based payments issued to employees, to also include share-based payments issued to non-employees for goods and services. Consequently, the accounting for share-based payments to non-employees and employees is substantially aligned. Under ASC Topic 718, “Compensation - Stock Compensation”. Under the fair value recognition provisions of this topic, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as an expense on a straight-line basis over the requisite service period, which is the vesting period. The Company has elected to use the Cox, Ross & Rubinstein Binomial Tree valuation model to estimate the fair value of its options, which incorporates various subjective assumptions including volatility, risk-free interest rate, expected life, and dividend yield to calculate the fair value of stock option awards. Compensation expense recognized in the statements of operations is based on awards ultimately expected to vest and reflects estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Segment Reporting The Company operates in one business segment which technologies are focused on cybersecurity. F-9 Table of Contents VISIUM TECHNOLOGIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2022 AND 2021 NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued Recent Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) – Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for the exceptions. The ASU also simplifies the diluted net income per share calculation in certain areas. The new guidance is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, and early adoption is permitted. The Company is currently evaluating the impact of the adoption of the standard on the financial statements. In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40). The new ASU addresses issuer’s accounting for certain modifications or exchanges of freestanding equity-classified written call options. This amendment is effective for all entities, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The Company adopted ASU 2021-04 on January 1, 2022. There is no impact of the adoption of the standard on the financial statements. All other newly issued accounting pronouncements but not yet effective have been deemed immaterial or nonapplicable. Basic and Diluted Earnings Per Share Basic earnings per share are calculated by dividing income available to stockholders by the weighted-average number of shares of Common Stock outstanding during each period. Diluted earnings per share are computed using the weighted average number of shares of Common Stock and the dilutive Common Stock share equivalents outstanding during the period. Dilutive Common Stock share equivalents consist of shares issuable upon the exercise of in-the-money stock options and warrants (calculated using the modified-treasury stock method) and conversion of other securities such as convertible debt or convertible preferred stock. Potential common shares includable in the computation of fully diluted per-share results are not presented in the financial statements for the year ended June 30, 2022 and 2021 as their effect would be anti-dilutive. Potential common shares that would be as follows: For the Years ended June 30, 2022 2021 Weighted average common shares outstanding 2,505,011 1,464,777 Effect of dilutive securities-when applicable: Convertible promissory notes 482,472 105,244 Preferred Stock converted to common stock 11,348 11,348 Common stock options 2,222 11,852 Warrants 5,049 9,011 Fully diluted earnings per share—adjusted weighted-average shares and assumed conversions 3,006,102 1,602,232 F-10 Table of Contents VISIUM TECHNOLOGIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2022 AND 2021 NOTE 3: PREPAID LICENSE FEE In April 2021, the Company entered into a two-year software license agreement to enable product development. The license fee is prepaid annually at a rate of $ 70,000 annually. The prepaid license fee is amortized on a straight-line basis over the term of the license agreement, and is included in Development expense in our Statement of Operations. The license fee term starts on July1 each year. NOTE 4: DERIVATIVE LIABILITY Derivative liability - warrants The Company issued warrants in connection with convertible notes payable which were issued in January, February, and July 2021. These warrants have price protection provisions that allow for the reduction in the exercise price of the warrants in the event the Company subsequently issues stock or securities convertible into stock at a price lower than the stated conversion for each warrant, ranging from $0.0055 to $0.02 per share exercise price of the warrants . Simultaneously with any reduction to the exercise price, the number of shares of common stock that may be purchased upon exercise of each of these warrants shall be increased or decreased proportionately, so that after such adjustment the aggregate exercise price payable for the adjusted number of warrants shall be the same as the aggregate exercise price in effect immediately prior to such adjustment. Because it is indeterminate whether there is a sufficient number of authorized and unissued shares exists at the assessment date, the Company calculates a derivative liability associated with the warrants in accordance with FASB ASC Topic 815-40-25. Accounting for Derivative Warrant Liability The Company’s derivative warrant instruments have been measured at fair value at June 30, 2022 using the Cox, Ross & Rubinstein Binomial Tree valuation model. The Company recognizes the derivative liability related to those warrants that contain price protection features in its consolidated balance sheet as liabilities. The liability is revalued at each reporting period and changes in fair value are recognized currently in the consolidated statements of operations. The initial recognition and subsequent changes in fair value of the derivative warrant liability have no effect on the Company’s cash flows. Derivative liability – convertible notes The Company has certain convertible notes with variable price conversion terms. Upon the issuance of these convertible notes and as a consequence of their conversion features, the convertible notes give rise to derivative liabilities. The Company’s derivative liabilities related to its convertible notes payable have been measured at fair value at June 30, 2022 and June 30, 2021 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 $ 1,119 and $ 1,844,460 for the years ended June 30, 2022 and 2021, respectively in the Company’s consolidated statements of operations, under the caption “Gain in change of fair value of derivative liability”. The fair value of the warrants at June 30 2022 and June 30, 2021 was $ 3,947 and $ 69,334 , respectively. The fair value of the derivative liability related to the convertible debt at June 30, 2022 and June 30, 2021 is $ 31,350 and $ 115,047 , respectively, which is reported on the consolidated balance sheet under the caption “Derivative liability”. The Company has determined its derivative liability to be a Level 3 fair value measurement. The significant assumptions used in the Cox, Ross & Rubinstein Binomial Tree valuation of the derivative are as follows: Year Ended June 30, 2022 2021 Effective exercise price $ 0.972 – $ 27.00 $ 4.87 – $ 10.39 Effective market price $ 1.755 $ 8.10 Expected volatility 113 % to 248 % 96.4 % to 304.0 % Risk-free interest 1.68 %- 2.92 % 0.05 %- 0.25 % Expected terms 60 - 824 days 60 - 711 days Expected dividend rate 0 % 0 % F-11 Table of Contents VISIUM TECHNOLOGIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2022 AND 2021 NOTE 5: CONVERTIBLE NOTES PAYABLE AND NOTE PAYABLE Convertible Notes Payable At June 30, 2022 and June 30, 2021 convertible debentures consisted of the following: June 30, 2022 2021 Convertible notes payable $ 1,487,431 $ 1,205,228 Discount on convertible notes ( 412,944 ) ( 396,033 ) Convertible notes, net 1,074,487 809,195 Convertible notes payable to ASC Recap - 147,965 Total $ 1,074,487 $ 957,160 The Company had convertible promissory notes aggregating $ 1,487,431 and $ 1,205,228 at June 30, 2022 and June 30, 2021, respectively. The related accrued interest amounted to approximately $ 261,300 and $ 149,800 at June 30, 2022 and June 30, 2021, respectively. The convertible notes payable bear interest at rates ranging from 0 % to 18 % per annum. The convertible notes are generally convertible, at the holders’ option, at rates ranging from $ 2.43 to $ 22,500 per share, as a result of the two reverse stock splits. At June 30, 2022, approximately $ 324,000 of convertible promissory notes had matured, are in default and remain unpaid. There are no punitive default provisions included in the terms of these convertible promissory notes. On July 22, 2013 and May 6, 2014, the Company issued to ASC Recap LLC (“ASC”) two convertible promissory notes with principal amounts of $ 25,000 and $ 125,000 , respectively. These two notes were issued as a fee for services under a 3(a)10 transaction. While the Company continues to carry the balance of these notes on its balance sheet, management is disputing the notes and does not believe that the balances of these notes are owed. See Note 11 – Commitments and Contingencies in the footnotes to the financial statements. The July 22, 2013 note matured on March 31, 2014 and a balance of $22,965 remains unpaid. The May 6, 2014 note matured on May 6, 2016 and remains unpaid. The notes are convertible into the common stock of the Company at any time at a conversion price equal to (i) 50% of the lowest closing bid price of our common stock for the twenty days prior to conversion or (ii) fixed price of $0.15 or $0.30 per share. On May 9, 2022 the company entered into a global settlement agreement to satisfy any and all claims with i) Tarpon Bay Partners LLC, (ii) J.P. Carey Enterprises Inc., and (iii) Anvil Financial Management LLC to resolve all litigation amongst the parties. The terms of the agreement included J.P. Carey Enterprises Inc. and Anvil Financial Management LLC receiving 44,444 shares of the Company's $ 0.0001 par value common stock, valued at $ 108,000 , or $ 2.43 per share. The agreement also calls for the retirement of the notes payable to Tarpon Bay Partners LLC (ASC Recap) in the amount of $ 147,965 . The settlement of this litigation resulted in a gain of $ 39,965 . In June 2021, the Company obtained a legal opinion to extinguish aged debt totaling $ 787,272 as detailed in the following table. Each of the individual debt instruments were determined to be beyond the statute of limitations and it was determined that the Company has a complete defense to liability related to this debt under the applicable statute of limitations. Accrued interest expense $ 385,803 Convertible notes payable 401,469 $ 787,272 For the year ended June 30, 2022, 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 Labrys Funds 146,701 $ 772,797 $ 56,000 $ 2,250 $ 831,047 $ 5.66 Total 146,701 $ 772,797 $ 56,000 $ 2,250 $ 831,047 $ 5.66 Transactions Convertible Notes Payable In February 2022, the Company entered into three Securities Purchase Agreements with three investors pursuant to which each investor purchased a promissory note, each with a face value of $ 270,000 , made by the Company in favor of the Investors in the total combined principal amount of $ 810,000 for a combined purchase price of $ 745,200 . These Notes bear an aggregate original issue discount of $ 64,800 , each bear interest of 8 % per year and mature in February 2023 . The Notes are convertible into shares of the Company’s common stock at a conversion price of $ 2.43 per share, subject to adjustment as provided therein. 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 Investors 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 Agreements, the Company issued to the Investors an aggregate 60,000 commitment shares of the Company’s common stock (the “Commitment Shares”) as a condition to closing. The commitment shares were valued at $ 291,600 , or $ 4.86 per share and recorded as a discount. In April 2022, the Company entered into a Securities Purchase Agreement with an investor pursuant to which the investor purchased a promissory note with a face value of $ 360,000 , made by the Company for a purchase price of $ 331,200 . The Note bears an original issue discount of $ 28,800 , bears interest of 8 % per year and mature in April 2023. The Note is convertible into shares of the Company’s common stock at a conversion price of $ 2.43 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 Note contains events of defaults and certain negatives covenants that are typical in the types of transactions contemplated by the Purchase Agreement. Pursuant to the Purchase Agreement, the Company issued to the Investor 26,667 commitment shares of the Company’s common stock (the “Commitment Shares”) as a condition to closing. The commitment shares were valued at $ 54,915 , or $ 2.06 per share and recorded as a discount. During the year ended Jun 30, 2022, the total shares issued with these convertible notes payable was 86,667 with a total relative fair value $ 236,567 and also a beneficial conversion feature of $ 239,564 The Company recognized interest expense on convertible notes payable of approximately $ 111,530 and $ 108,000 during the fiscal years 2022 and 2021, respectively. Notes Payable The Company had promissory notes aggregating $ 205,000 and $ 411,748 at June 30, 2022 and 2021, respectively. The related accrued interest amounted to approximately $ 226,343 and $ 204,912 at June 30, 2022 and June 30, 2021, respectively. The notes payable bear interest at rates ranging from 0 % to 16 % per annum and are payable monthly. Promissory notes totaling $205,000 that are outstanding as of June 30, 2022 have matured, are in default, and remain unpaid. There is no provision in the note agreements for adjustments to the interest rates on these notes in the event of default. The Company recognized interest expense on promissory notes payable of approximately $ 21,430 and $ 28,400 during the fiscal years 2022 and 2021, respectively. F-12 Table of Contents VISIUM TECHNOLOGIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2022 AND 2021 NOTE 6: ACCRUED INTEREST PAYABLE Changes in accrued interest payable during the year ended June 30, 2022, is as follows: Accrued interest payable at June 30, 2021 $ 366,149 Interest expense on notes payable for the year ended June, 2021 133,994 Payments of accrued interest ( 39,431 ) Conversion of accrued interest into common stock ( 56,000 ) Accrued interest payable at June 30, 2022 $ 404,712 Interest expense for year ended June 30, 2022 was comprised of the following: Interest expense for the year ended June 30, 2022 $ 133,994 Amortization of debt discount 571,081 Total interest expense for the year ended June 30, 2022 $ 705,075 NOTE 7: STOCKHOLDERS’ DEFICIT Common Stock At June 30, 2022, the Company had 1,000,000,000 authorized common shares. At June 30, 2022, the Company has 2,903,804 common shares issued of which 2,896,396 were outstanding, which is net of 7,408 unvested shares issued for the restricted stock awards granted during the year. The Company effected a reverse split of our Common stock by a ratio of one thousand three hundred fifty for one (1,350:1). The board of directors was authorized to implement the reverse stock split effective September 22, 2022. The reverse stock split adjusted the then outstanding Common shares of the company from 3,916,144,800 Common Shares to a total of 2,896,396 Common Shares. This action also reduced the number of Authorized common shares of the Company from 10,000,000,000 to 1,000,000,000 . Issuances of Common Stock During 2022 During the year ended June 30 2022, the Company issued 146,701 shares of its common stock related to the conversion of $ 828,797 of principal and accrued interest of its convertible notes payable, at an average contract conversion price of $ 5.66 per share. The fair value of the shares issued was $ 2,422,722 . Stock Based Compensation and Stock Based Consulting Services Expense During the year ended June 30, 2022 the Company issued 53,334 shares of its $0.0001 par value common stock to three consultants, as compensation for services rendered. The shares were valued at $ 255,033 , or $ 4.78 per share. During the year ended June 30 2022, the Company issued 54,955 shares of its $ 0.0001 par value common stock to six employees, as compensation for services rendered. The shares were valued at $ 763,041 , or $ 13.89 per share. During the year ended June 30 2022, the Company issued 100,758 shares of its $ 0.0001 par value common stock to our Directors and Officer, as compensation for services rendered. The shares were valued at $ 1,134,118 , or $ 11.26 per share. Warrants During the fiscal year ended June 30 2022, the Company issued 4,881 shares of its $0.0001 par value common stock pursuant to the cashless exercise of warrants. The warrant shares were valued at $ 211,411 , or $ 43.32 per share. Funding In September 2021 the Company entered into two securities purchase agreement (the “Purchase Agreements”) with a single institutional investor (the “Purchaser”) resulting in the raise of $ 1,500,000 in gross proceeds to the Company. Pursuant to the terms of the Purchase Agreements, the Company agreed to sell, in a registered director offering, an aggregate of 222,222 shares (the “Shares”) of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) at a purchase price of $ 6.75 per Share (the “Offering”). The Offerings closed on September 15, 2021 and September 27, 2021, respectively. During the fiscal year ended June 30, 2022 the Company issued 86,667 shares of its $ 0.0001 par value common stock to three investors as commitment shares pursuant to the issuance of promissory notes. The shares were valued at $ 236,567 , Litigation Settlement During the fiscal year ended June 30, 2022 we issued 44,444 shares of its common stock pursuant to the settlement of litigation with ASC Recap. The shares were valued at $ 108,000 , and resulted in a gain of $ 39,965 . Issuances of Common Stock During the Year ended June 30, 2021 Convertible Notes Payable During the fiscal year ended June 30 2021, the Company issued 388,550 shares of its common stock related to the conversion of $ 188,460 of principal and accrued interest of its convertible notes payable, at an average contract conversion price of $ 0.50 per share. The fair value of these conversions was $ 2,031,402 . F-13 Table of Contents VISIUM TECHNOLOGIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2022 AND 2021 Stock Based Compensation During the fiscal year ended June 30 2021, the Company issued 162,963 shares of its $ 0.0001 par value common stock as compensation to its directors and officers related to the vesting of restricted stock grants. The shares were valued at $ 2,809,000 , or $ 17.28 per share, based on the share price at the time of the transactions. During the fiscal year ended June 30 2021, we issued 41,975 shares of its common stock to consultants, as compensation. The shares were valued at $ 8.44 , the market price on the date of issuance for a total value of $ 354,000 . The expense is included in general and administrative expenses and was recognized on the date the stock was issued or vested. Common Stock Warrants A summary of the status of the Company’s outstanding common stock warrants as of June 30, 2022 and 2021 and changes during the fiscal years ending on these dates is as follows: Year ended June 30, 2022 Year ended June 30, 2021 Number of Weighted Average Number of Weighted Average Warrants Exercise Price Warrants Exercise Price Common Stock Warrants Balance at beginning of year 9,012 $ 14.85 370 $ 202.50 Granted 2,781 $ 14.85 34,695 $ 14.85 Granted due to repricing - - 257,601 0.27 Exercised 0.27 0.27 Forfeited 0.27 0.27 Balance at end of period 5,049 $ 14.85 9,012 $ 14.85 Warrants exercisable at end of period 5,049 $ 14.85 9,012 $ 14.85 The following table summarizes information about common stock warrants outstanding at June 30, 2022: Warrants Outstanding Warrants Exercisable Range of Exercise Price Number Outstanding At June 30, 2022 Weighted Average Remaining Contractual Life Weighted Average Exercise Price Number Exercisable At June 30, 2022 Weighted Average Exercise Price $ 7.425 1,212 0.54 Years $ 7.425 1,212 $ 7.425 $ 10.395 631 1.03 Years $ 10.395 631 10.395 $ 12.285 1,339 2.26 Years $ 12.285 1,339 12.285 $ 20.385 811 2.26 Years $ 20.385 811 20.385 5,049 1.78 Years $ 14.85 5,049 $ 14.85 Preferred Stock Series A, B, and AA issued and outstanding shares of the Company’s convertible preferred stock have a par value of $ 0.001 . All classes rank(ed) prior to any class or series of the Company’s common stock as to the distribution of assets upon liquidation, dissolution or winding up of the Company or as to the payment of dividends. All preferred stock shall have no voting rights except if the subject of such vote would reduce the amount payable to the holders of preferred stock upon liquidation or dissolution of the company and cancel and modify the conversion rights of the holders of preferred stock as defined in the certificate of designations of the respective series of preferred stock. Series A Convertible Preferred Stock The Series A Preferred Stock has a stated value of $ 750 per share. Each one share of Series A Preferred Stock is convertible into one (1) share of Common Stock. In the event the Common Stock price per share is lower than $0.10 (ten cents) per share then the Conversion shall be set at $ 0.035 per share. The Common Stock shares are governed by Lock-Up/Leak-Out Agreements. Series B Convertible Preferred Stock Thirty million (30,000,000) shares of preferred stock were designated as a new Series B Preferred stock in April 2016. This new Series B Preferred Stock has a $ 0.001 par value, and each 300 shares is convertible into one share of the Company’s common stock, with a stated value of $ 375 per share. Series AA Convertible Preferred Stock In March 2019, the Company authorized and issued one (1) share of Series AA convertible preferred stock which provides for the holder to vote on all matters as a class with the holders of Common Stock and each share of Series AA Convertible Preferred Stock shall be entitled to 51% of the common votes on any matters requiring a shareholder vote of the Company. Each one share of Series AA Convertible Preferred Stock is convertible into one (1) share of Common Stock. Mark Lucky, our Chief Executive Officer, is the holder of the one (1) share of Series AA Convertible Preferred Stock. F-14 Table of Contents VISIUM TECHNOLOGIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2022 AND 2021 NOTE 8 - STOCK-BASED COMPENSATION The Company adopted an Incentive Stock Plan on April 18, 2021. This plan is intended to provide incentives which will attract and retain highly competent persons at all levels as employees of the Company, as well as independent contractors providing consulting or advisory services to the Company, by providing them opportunities to acquire the Company’s common stock or to receive monetary payments based on the value of such shares pursuant to Awards issued. While the plan terminates 10 years after the adoption date, issued options have their own schedule of termination. Options to acquire shares of common stock may be granted at no less than fair market value on the date of grant. Upon exercise, shares of new common stock are issued by the Company. Under the 2021 Stock Incentive Plan, the Company has issued options to purchase 11,852 shares at an average price of $0.015 with a fair value of $ 0.00 . For the years ended June 30, 2022 and 2021, the Company issued options to purchase no shares. Upon exercise, shares of new common stock are issued by the Company. For the years ended June 30, 2022 and 2021, the Company recognized an expense of approximately $ 143,529 and $ 18,554 , respectively, of non-cash compensation expense (included in General and Administrative expense in the accompanying Consolidated Statement of Operations) determined by application of a binomial option pricing model with the following inputs: exercise price, dividend yields, risk-free interest rate, and expected annual volatility. As of June 30, 2022, the Company had approximately $ 0 of unrecognized pre-tax non-cash compensation expense. The Company used straight-line amortization of compensation expense over the one-year requisite service or vesting period of the grant. The Company recognizes forfeitures as they occur. There are options to purchase approximately 2,222 shares that have vested as of June 30, 2022. 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: Year ended June 30, 2022 2021 Expected volatility - % 369.76 % - 496.27 % Expected term - 4 Years Risk-free interest rate - % 0.76 %- 0.84 % Forfeiture Rate - % 0 % Expected dividend yield - % 0 % The expected volatility was determined with reference to the historical volatility of the Company’s stock. The Company uses historical data to estimate option exercise and employee termination within the valuation model. The expected term of options granted represents the period of time that options granted are expected to be outstanding. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury rate in effect at the time of grant. A summary of the status of the Company’s outstanding stock options as of June 30, 2022 and 2021 and changes during the periods ending on that date is as follows: Year Ended June 30, Year Ended June 30, 2022 2021 Weighted Weighted Average Aggregate Average Aggregate Exercise Intrinsic Exercise Intrinsic Price Value Price Value Stock options Balance at beginning of year 11,852 $ 20.25 - $ - $ Granted - 0.00 11,852 $ 20.25 - Exercised - $ 0.00 - $ - - Forfeited ( 9,630 ) $ ( 18.69 ) - $ - Balance at end of year 2,222 $ 27.00 $ - 11,852 $ 20.25 $ - Options exercisable at end of year 2,222 $ 27.00 $ - 1,173 $ 20.25 $ - The following table summarizes information about employee stock options outstanding at June 30, 2022: Outstanding Options Vested Options Number Number Outstanding Weighted Weighted Exercisable Weighted Weighted at Averaged Averaged at Averaged Averaged June 30, Remaining Exercise June 30, Exercise Remaining Range of Exercise Price 2022 Life Price 2022 Price Life $27.00 2,222 3.84 $ 27.00 2,222 $ 27.00 3.84 Outstanding options 2,222 3.84 $ 27.00 2,222 $ 27.00 3.84 F-15 Table of Contents VISIUM TECHNOLOGIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2022 AND 2021 Restricted Stock Awards Restricted stock awards are awards of common stock that are subject to restrictions on transfer and to a risk of forfeiture if the holder leaves the Company before the restrictions lapse. The holder of a restricted stock award is generally entitled at all times on and after the date of issuance of the restricted shares to exercise the rights of a shareholder of the Company, including the right to vote the shares. The value of stock awards that vest over time was established by the market price on the date of its grant. A summary of the Company’s restricted stock activity for the year ended June 30, 2022 and 2021 is presented in the following table: For the Year ended June 30, 2022 June 30, 2021 Weighted Weighted Average Average Grant Date Grant Date Shares Fair Value Shares Fair Value Unvested at beginning of period 97,778 $ 15.53 494 $ 81.00 Granted 41,481 $ 10.66 146,667 $ 15.53 Forfeited ( 8,025 ) 10.80 0 Vested ( 123,827 ) $ 14.85 ( 49,383 ) $ 15.53 Unvested at end of period 7,407 $ 13.50 97,778 $ 15.53 Unrecognized compensation expense related to outstanding restricted stock awards to consultants as of June 30, 2022 was $ 91,800 and is expected to be recognized over a weighted average period of 0.5 years. NOTE 9: INCOME TAXES The Company has not filed its corporate tax returns since fiscal 2007. Due to recurring losses, the Company’s tax provision for the years ended June 30 2022 and 2021 was $ 0 . The difference between the effective income tax rate and the applicable statutory federal income tax rate is summarized as follows: 2022 2021 Statutory federal rate ( 21.7 )% ( 21.7 )% State income tax rate, net of federal benefit ( 3.6 )% ( 3.6 )% Permanent differences, including stock-based compensation 8.6 % 8.6 % Change in valuation allowance 16.7 % 16.7 % Effective tax rate 0.0 % 0.0 % At June 30, 2022 and 2021 the Company’s deferred tax assets were as follows: June 30, 2022 June 30, 2021 Tax benefit of net operating loss carry forward $ 7,768,000 $ 7,245,000 Intangible - - Total deferred tax assets 7,768,000 7,245,000 Less: valuation allowance ( 7,768,000 ) ( 7,245,000 ) Net deferred tax assets $ - $ - As of June 30, 2022, the Company had unused net operating loss carry forwards of approximately $ 36.9 million available to reduce future federal taxable income. Net operating loss carryforwards expire through fiscal years ending 2040 . Internal Revenue Code Section 382 places a limitation on the amount of taxable income that can be offset by carryforwards after a change in control (generally a greater than 50 % change in ownership). F-16 Table of Contents VISIUM TECHNOLOGIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2022 AND 2021 NOTE 9: INCOME TAXES, continued The Company’s ability to offset future taxable income, if any, with tax net operating loss carryforwards may be limited due to the non-filing of tax returns and the impact of the statute of limitations on the Company’s ability to claim such benefits. Furthermore, changes in ownership may result in limitations under Internal Revenue Code Section 382. Due to these limitations, and other considerations, management has established full valuation allowances on deferred tax assets relating to net operating loss carryforward, as the realization of any future benefits from these assets is uncertain. The Company’s valuation allowance at June 30, 2022 and 2021 was $ 7,768,000 and $ 7,245,000 , respectively. The change in the valuation allowance during the year ended June 30, 2022 was an increase of approximately $ 523,000 . Effective December 22 2018, a new tax bill was signed into law that reduced the federal income tax rate for corporations from 35 % to 21.7 % for the year ended June 30, 2022. Going forward the blended rate will be 25.4 % for future years. NOTE 10: RELATED PARTY TRANSACTIONS Equity transactions with related parties are described in Note 7. From time to time we have borrowed operating funds from Mr. Mark Lucky, our Chief Executive Officer and from certain Directors, for working capital. The advances were payable upon demand and were interest free. $ 0 in advances remain outstanding as of June 30, 2022. Mr. Lucky is owed $ 1,481 for out-of-pocket expenses as of June 30, 2022, which is included on the balance sheet in Accounts payable and accrued expenses. 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 June 30, 2022. F-17 Table of Contents VISIUM TECHNOLOGIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2022 AND 2021 NOTE 11: COMMITMENTS AND CONTINGENCIES, continued Contingencies The Company accounts for contingent liabilities in accordance with Accounting Standards Codification (“ASC”) Topic 450, Contingencies . This guidance requires management to assess potential contingent liabilities that may exist as of the date of the financial statements to determine the probability and amount of loss that may have occurred, which inherently involves an exercise of judgment. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. For loss contingencies considered remote, no accrual or disclosures are generally made. Management has assessed potential contingent liabilities as of June 30, 2022, 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 sellers of Threat Surface Solutions Group, LLC includes a provision for a royalty payment based on ten percent (10%) of sales generated by Threat Surface Solutions Group beginning on the Agreement Date and ending on October 12, 2021, capped at a maximum royalty of $ 2,500,000 . As of June 30, 2022, we have not generated any revenue related to these license agreements. Our license agreements with George Mason University and The MITRE Corporation include provisions for a royalty payment on revenues collected of 5% and 6%, respectively. As of June 30, 2022, we have not generated any revenue related to these license agreements. Note 12 – Fair Value Measurement Fair value measurements At June 30, 2022 and 2021, the fair value of derivative liabilities is estimated using the Cox, Ross & Rubinstein Binomial Tree valuation model using inputs that include the expected volatility, the implied risk-free interest rate, as well as the expected dividend rate. The derivative liabilities are the only Level 3 fair value measures. At June 30, 2022, the estimated fair values of the liabilities measured on a recurring basis are as follows: Fair Value Measurements at June 30, 2022: (Level 1) (Level 2) (Level 3) Derivative liability – Convertible notes 31,350 Derivative liability – Warrants $ - $ - $ 3,947 Total derivative liability $ - $ - $ 35,297 At June 30, 2021, the estimated fair values of the liabilities measured on a recurring basis are as follows: Fair Value Measurements at June 30, 2021: (Level 1) (Level 2) (Level 3) Derivative liability – Convertible notes 115,047 Derivative liability – Warrants $ - $ - $ 69,334 Total derivative liability $ - $ - $ 184,381 NOTE 13: SUBSEQUENT EVENTS In the quarter ended September 30 2022, our consultants vested 1,482 shares of our $ 0.0001 par value common stock, valued at $ 23,000 , or at an average price per share of $ 15.53 . In the quarter ended September 30 2022, our directors and officers vested 3,705 shares of our $ 0.0001 par value common stock, valued at $ 34,412 , or at an average price per share of $ 9.29 . In September 2022 the Company amended the terms of four convertible notes held by three individual investors. The amendment to each of the notes waived the requirement for an interim note payment to be made by the Company. In exchange for this the Company issued the noteholders warrants for an aggregate 138,667 common shares. The warrants have a five year life and a conversion price of $ 0.001 per share. F-18