What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-10-07 compared with 2024-09-30 · 44 added, 66 removed, 180 unchanged (38% of the section changed)

19 unchanged sentences

The Company’s headquarters is located at 4094 Majestic Lane, Suite 360, Fairfax, VA 22124.

Since February 2018, the Company has focused on creating a world-class cybersecurity/digital risk management company, with a focus on network security, threat visualization, pinpoint threat identification, and big-data analytics.

Since February 2018, the Company has focused on creating a world-class cybersecurity/digital risk management company, with a focus on artificial intelligence, network security, threat visualization, pinpoint threat identification, and big-data analytics.

Our solutions address the growing security and compliance complexities and risks resulting from the increasing adoption of cloud computing and the proliferation of geographically dispersed IT assets.

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 Cybersecurity, based on graph database technology.

The development of the technology was sponsored by, and is currently in use by United States 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.

During fiscal 2022 the Company rebranded Cygraph as TruContext TM to reflect the enhanced version of the software tool which resulted from significant proprietary development of the software.

The Company is entering the digital transformation and data center design and construction market after it landed a contract in November, 2023 valued at over $20 million from its partner, Cybastion Institute of Technology.

Visium has developed a proprietary data analytics platform called TruContext TM that provides advanced analytics for cybersecurity situational awareness that is scalable, flexible, and comprehensive.

The Company has entered the digital transformation and data center design and construction market after it landed a contract in November, 2023 valued at over $20 million from its partner, Cybastion Institute of Technology.

The contract is to oversee the design and construction of data centers in the Republic of Côte d’Ivoire and the Republic of Benin.

1 unchanged sentence

The scope of work includes data center architecture and design, power civil engineering, controls and distribution systems, rack layouts, network topology, vendor high availability, and a comprehensive security stack solution which will include Visium’s proprietary TruContext TM cybersecurity platform.

As of June 30, 2024 no activity has occurred pursuant to this contract.

As of September 30, 2025 no activity has occurred pursuant to this contract.

Results of Operations

2 unchanged sentences

Selling, General, and Administrative Expenses

For the year ended June 30, 2024, selling, general and administrative expenses were $2,501,775 as compared to $2,198,639 for the year ended June 30, 2023, an increase of $303,136 or approximately 14%.

For the year ended June 30, 2025, selling, general and administrative expenses were $1,649,817 as compared to $2,501,776 for the year ended June 30, 2024, a decrease of $851,959 or approximately 34%.

For the years ended June 30, 2025 and 2024 selling, general and administrative expenses consisted of the following:

7 unchanged sentences

Website expense

Investor relations expense

Stock based consulting expense

Stock based compensation

The increase in selling, general and administrative expenses during fiscal 2024, when compared with the prior year, is primarily due to an increase in stock-based consulting expense of $388,885, an increase in legal and professional fees of $25,694, and an increase in consulting fees of $29,980, offset by a decrease in salaries of $97,088, a decrease in investor relations expense of $13,688, and a decrease in stock-based compensation expense of $14,743.

The decrease in selling, general and administrative expenses during fiscal 2025, when compared with the prior year, is primarily due to a decrease in stock-based consulting expense of $402,251, a decrease in stock-based compensation of $444,132, a decrease in consulting fees of $45,000, a decrease in salaries of $94,270, and a decrease in accounting expense of $8,047, offset by an increase in legal and professional fees of $125,264 and other expense of $26,110.

Change in Fair Value of Derivative Liability

1 unchanged sentence

Changes in fair value of derivative liabilities results from the changes in the fair value of the derivative liability due to the application of ASC 815, resulting in either income or expense, depending on the difference in fair value of the derivative liabilities between their measurement dates.

The increase in fair value of derivative liabilities recognized during fiscal 2024 is primarily due to a change in accounting estimate related to the accounting for derivative liabilities as a result of a decrease in share price.

Derivative Liability Expense

Derivative liability expense

The Company issued convertible notes in January 2023 and June 2023 which provisions contained variable price conversion terms, resulting in a derivative liability expense, measured as of the issuance date of the notes.

The decrease in fair value of derivative liabilities recognized during fiscal 2025 is primarily due to a change in accounting estimate related to the accounting for derivative liabilities as a result of a decrease in share price.

Interest Expense

1 unchanged sentence

Interest expense represents the stated interest of notes and convertible notes payable as well as the amortization of debt discount.

The decrease in interest expense during fiscal 2024 is primarily due to lower discount amortization expense of $59,600 in fiscal 2024.

Loss on extinguishment of debt

In September 2022 we issued 138,667 warrants with a five-year life, and a fixed exercise price of $1.35 per share, as part of a modification to three outstanding convertible notes payable.

The Company evaluated these amendments under ASC 470-50, “ Debt - Modification and Extinguishment” , and concluded that the issuance of these warrants in exchange for deferring the interim interest payments that were due resulted in significant and consequential changes to the economic substance of the debt and thus resulted in accounting for these modifications as an extinguishment of the debt.

Under ASC 470-50, the issuance of these warrants resulted in a loss on the extinguishment of debt, as follows:

Value of warrants issued

Write-off of unamortized debt discount

Loss on extinguishment of debt

During the year ended June 30, 2023, we recorded a loss on the payoff of convertible note totaling $12,062, which is recorded in the Consolidated Statement of Operations as loss on extinguishment of debt.

A recap of the Loss on extinguishment of debt during fiscal 2023 is as follows:

Loss on extinguishment of debt related to warrants

Loss on extinguishment of debt related to note conversions

The increase in interest expense during fiscal 2025 is primarily due to interest on the delinquent convertible notes payable.

Interest Income

Interest income

Employee Retention Credit (ERC) - The Company qualified for federal government assistance during the calendar 3rd and 4 th quarters of 2022 in the amount of approximately $255,500 through ERC provisions of the Consolidated Appropriations Act of 2021.

The purpose of the ERC was to encourage employers to keep employees on the payroll, even if they are not working during the covered period due to the effects of the coronavirus outbreak.

These funds were recorded when the Company was notified by the IRS that the ERC had been approved and would be paid to the Company and is included in the Consolidated Statements of Operations for the fiscal year ended June 30, 2025 as an offset to salary expense.

Interest accrued associated with the payment of the ERC to the Company totaled $12,767.

Gain (loss) on extinguishment of debt

In July 2024 the Company obtained a legal opinion to extinguish aged debt totaling $725,059 as detailed in the following table.

Each of the individual debt instruments were determined to be beyond the statute of limitations and it was determined that the Company has a complete defense to liability related to this debt under the applicable statute of limitations.

For the year ended June 30, 2025 the gain on extinguishment of debt was:

Accrued interest expense

Convertible notes payable

Promissory notes payable

Gain on extinguishment of debt for the year ended June 30, 2025

Liquidity and Capital Resources

5 unchanged sentences

$ (1,852,431 )

At June 30, 2024 our total assets consisted of cash.

At June 30, 2025 our total assets consisted of cash and a prepaid license fee of $7,500.

At June 30, 2024 100% our total assets consisted of cash.

4 unchanged sentences

We were unable to generate sufficient funds from operations to fund our ongoing operating requirements through June 30, 2025.

As of September 30, 2024, we had approximately $11,000.

We may need to raise funds to enhance our working capital and use them for strategic purposes.

6 unchanged sentences

The Company has used net cash in its operating activities of $411,177 and $488,319 during the years ended June 30 2025 and 2024, respectively, and has a working capital deficit of approximately $5.8 million and $5.1 million at June 30, 2025 and 2024, respectively.

The Company’s ability to continue as a going concern is dependent upon its ability to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due, to fund possible future acquisitions, and to generate profitable operations in the future, once a merger with an operating company is consummated.

Management plans may continue to provide for its capital requirements by issuing additional equity securities and debt and the Company will continue to find possible acquisition targets.

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, and to generate profitable operations in the future.

Management plans may continue to provide for its capital requirements by issuing additional equity securities and debt.

The outcome of these matters cannot be predicted at this time and there are no assurances that, if achieved, the Company will have sufficient funds to execute its business plan or generate positive operating results.

3 unchanged sentences

Non-cash Adjustments:

Loss on debt settlement and expense write off

(Gain) loss on debt settlement and expense write off

Stock based compensation

Amortization of debt discount

Derivative liability expense

Gain on change in derivative liability

1 unchanged sentence

Accrued interest

Change in prepaid assets

Accrued compensation

4 unchanged sentences

Repayment of convertible notes payable

Proceeds from sale of common stock

Proceeds from issuance of short-term notes payable

5 unchanged sentences

Net cash used in operations in fiscal year 2025 decreased by $77,142 or 15.8% from fiscal year 2024.

Cash from financing activities was obtained through the sale of convertible notes that netted the Company $122,960, and the sale of promissory notes that netted the Company $465,000.

Cash from financing activities was obtained through the sale of promissory notes that netted the Company $569,200, and advances from officers and directors of $95,225.

Year ended June 30, 2024

Net cash used in operations in fiscal year 2024 decreased by $35,567 or 6.8% from fiscal year 2023.

Cash from financing activities was obtained through the sale of common stock that netted the Company $40,250, the sale of convertible notes that netted the Company $140,000, and the sale of promissory notes that netted the Company $190,000.

Cash from financing activities was obtained through the sale of convertible notes that netted the Company $122,960, and the sale of promissory notes that netted the Company $465,000.

Capital Raising Transactions

Issuance of Convertible Notes Payable

We generated net proceeds of $122,960 and $140,000 during fiscal 2024 and 2023, respectively, from the issuance of convertible notes payable.

Convertible Notes Payable

The Company had convertible promissory notes aggregating approximately $534,361 and $937,576 outstanding at June 30, 2024 and 2023, respectively.

The accrued interest amounted to approximately $251,455 and $324,031 at June 30, 2024 and 2023, respectively.

There is no provision in the note agreements for adjustments to the interest rates on these notes in the event of default.

The convertible notes payable bear interest at rates ranging between 0% and 18% per annum.

Interest is generally payable monthly.

The Convertible Notes Payable are generally convertible at rates ranging between $0.0042 and $30,375,000 per share, at the holders’ option.

June 30, 2024

June 30, 2023

Convertible notes payable

Discount on convertible notes

Convertible notes payable, net of discount

We generated net proceeds of $569,200 during fiscal 2025 from the issuance of promissory notes, and $122,960 from the issuance of convertible notes payable during fiscal 2024.

Notes Payable

3 unchanged sentences

The notes payable bear interest at rates between 0% and 20% per annum.

Interest is generally payable monthly.

Interest is generally payable at maturity.

$535,000 of these notes have matured as of June 30, 2025.

5 unchanged sentences

Notes payable, net of discount

Convertible Notes Payable

The Company had convertible promissory notes aggregating approximately $183,873 and $534,361 outstanding at June 30, 2025 and 2024, respectively.

The accrued interest amounted to approximately $247,563 and $251,455 at June 30, 2025 and 2024, respectively.

There is no provision in the note agreements for adjustments to the interest rates on these notes in the event of default.

The convertible notes payable bear interest at rates ranging between 0% and 18% per annum.

Interest is generally payable monthly.

The Convertible Notes Payable are generally convertible at rates ranging between $0.0042 and $121.50 per share, at the holders’ option.

June 30, 2025

June 30, 2024

Convertible notes payable

Discount on convertible notes

Convertible notes payable, net of discount

Common Stock Warrants

In January and February 2021, we issued 39,371 warrants with a two-year life, and fixed exercise prices ranging from $0.0055 to $0.02 per share.

An additional 9,239,130 warrant shares were issued due to repricing certain warrants with a $0.02 exercise price to a $0.0115 exercise price.

In September 2022, we issued 138,667 warrants with a five year life, and a fixed exercise price of $1.35 per share, as part of a modification to three outstanding convertible notes payable.

Under ASC 470-50, the issuance of these warrants resulted in a loss on the extinguishment of debt, as follows:

Value of warrants issued

Write-off of unamortized debt discount

Loss on extinguishment of debt

A summary of the status of the Company’s outstanding common stock warrants as of June 30, 2025 and changes during the fiscal year ending on that date is as follows:

62 unchanged sentences

We are required to estimate the expected forfeiture rate and recognize expense only for those shares expected to vest.

We account for share–based payments granted to non–employees in accordance with ASC 505–50, “Equity Based Payments to Non–Employees.” We determine the fair value of the stock–based payment as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more readily determinable.

If the fair value of the equity instruments issued is used, it is measured using the stock price and other measurement assumptions as of the earlier of either (1) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty’s performance is complete.

Derivative Instruments

9 unchanged sentences

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

Financial Statements and Supplementary Data.

The financial statements and supplementary data of the Company required by this Item are described in Item 15 of this Annual Report on Form 10-K and are presented beginning on page F-1.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis