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EX-32 - CERTIFICATE PURSUANT TO SECTION 18 U.S.C. PURSUANT TO SECTION 906 OF THE SARBANE - VISIUM TECHNOLOGIES, INC.exhibit32-2.htm
EX-32 - CERTIFICATE PURSUANT TO SECTION 18 U.S.C. PURSUANT TO SECTION 906 OF THE SARBANE - VISIUM TECHNOLOGIES, INC.exhibit32-1.htm
EX-31 - CERTIFICATION PURSUANT TO RULE 13A-14(A)/15D-14(A) CERTIFICATIONS SECTION 302 OF - VISIUM TECHNOLOGIES, INC.exhibit31-2.htm
EX-31 - CERTIFICATION PURSUANT TO RULE 13A-14(A)/15D-14(A) CERTIFICATIONS SECTION 302 OF - VISIUM TECHNOLOGIES, INC.exhibit31-1.htm
EX-21 - SUBSIDIARIES OF THE REGISTRANT - VISIUM TECHNOLOGIES, INC.exhibit21.htm
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-K
 
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the fiscal year ended June 30, 2020
 
or
[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from ___________ to ___________
 
Commission file number 000-25753
 
VISIUM TECHNOLOGIES, INC.
(Exact Name of Registrant as specified in its Charter)
 
Florida
 
7371
 
87-0449667
(State or other jurisdiction of
incorporation or organization)
 
(Primary Standard Industrial
Classification Number)
 
(I.R.S. Employer
Identification Number)
 
4094 Majestic Lane, Suite 360
Fairfax, VA 22033
(Address of Principal Executive Office)(Zip Code)
 
(703) 273-0383
(Registrant’s telephone number, including area code)
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered
Common Stock, $0.0001 Par Value
 
VISM
 
OTC PINK
 
Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.0001
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [  ] No [X]
 
Indicate by check mark if the registrant is required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [X] No [  ]
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for shorter period that the registrant as required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [  ]
 
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [X] No [  ]
 
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer [  ]
 
Accelerated filer [  ]
Non-accelerated filer [  ]
 
Smaller reporting company [X]
 
 
Emerging growth company [  ]
 
If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] No [X]
 
The aggregate market value of the common equity voting shares of the registrant held by non-affiliates on December 31, 2019 was $216,315, at a share price of $0.0019 on that date. For purposes of this calculation, an aggregate of 113,850,143 shares of Common Stock were held by non-affiliates of the registrant on December 31, 2019 and have been included in the number of shares of Common Stock held by affiliates.
 
The number of the registrant’s shares of Common Stock outstanding as of October 9, 2020 is 2,127,470,956.
 
In this Annual Report on Form 10-K, the terms the “Company,” “Visium,” “we,” “us” or “our” refers to Visium Technologies, Inc., unless the context indicates otherwise.
 
 
 
 
 
 
 
 
  FORWARD LOOKING STATEMENTS
 
We make forward-looking statements in this Annual Report and the documents incorporated by reference herein within the meaning of the Securities Litigation Reform Act of 1995. These forward-looking statements relate to expectations or forecasts for futureevents, including without limitation our earnings, revenues, expenses or other future financial or business performance or strategies, or the impact of legal or regulatory matters on our business, results of operations or financial condition. These statements may be preceded by, followed by or include the words “may,” “might,” “will,” “will likely result,” “should,” “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “continue,” “target” or similar expressions. These forward-looking statements are based on information available to us as of the date of this Annual Report and on our current expectations, forecasts and assumptions, and involve substantial risks and uncertainties. Actual results may vary materially from those expressed or implied by the forward-looking statements herein due to a variety of factors We do not undertake any obligation to update forward-looking statements as a result of as a result of new information, future events or developments or otherwise.
 
 
2
 
 
 
 
 
 
 
 
 
2020 ANNUAL REPORT ON FORM 10-K
 
Table of Contents
 
PART I
4
 
 
Item 1. Business.
4
Item 1A. Risk Factors.
4
Item 1B. Unresolved Staff Comments.
7
Item 2. Properties.
7
Item 3. Legal Proceedings.
7
Item 4. Mine Safety Disclosures.
7
 
 
PART II
8
 
 
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
8
Item 6. Selected Financial Data.
9
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
9
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
14
Item 8. Financial Statements and Supplementary Data.
14
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
14
Item 9A. Controls and Procedures.
14
Item 9B. Other Information.
15
 
 
PART III
16
 
 
Item 11. Executive Compensation.
19
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters.
20
Item 13. Certain Relationship and Related Party Transactions, and Director Independence.
20
Item 14. Principal Accountant Fees and Services.
22
 
 
PART IV
23
 
 
Item 15. Exhibits and Financial Statement Schedules.
23
 
 
3
 
 
 
 
 
 
 
 
 
PART I
 
Item 1. Business
 
Overview
 
Visium Technologies, Inc. initially was incorporated in the State of Nevada as Jaguar Investments, Inc. during October 1987. During March 2003, a wholly owned subsidiary of the Company merged with Freight Rate, Inc., a development stage company in the logistics software business. During May 2003, the Company changed its name to Power2Ship, Inc. During October 2006, the Company merged with a newly formed, wholly owned subsidiary, Fittipaldi Logistics, Inc., a Nevada corporation, with the Company surviving but its name changed to Fittipaldi Logistics, Inc. effective November 2006. During December 2007, the Company merged with a newly formed, wholly owned subsidiary, NuState Energy Holdings, Inc., a Nevada corporation, with the Company surviving but renamed NuState Energy Holdings, Inc. effective December 2007. In March 2018, the Company changed its name to Visium Technologies, Inc.
 
Visium is a provider of cyber security visualization, analytics, and automation. Visium operates in the traditional cyber security space, as well as in the cloud-based technology and Internet of Things spaces. Visium provides cybersecurity technology solutions, tools, and services to support commercial enterprises and government’s ability to protect their data. Visium’s CyGraph technology provides visualization, advanced cyber monitoring intelligence, data modeling, analytics, and automation to help reduce risk, simplify cyber security, and deliver better security outcomes. 
 
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 provides advanced analytics for cybersecurity situational awareness that is scalable, flexible, and comprehensive.
 
During fiscal 2020 we have engaged in significant research and development efforts aimed at commercializing our licensed technology, and actively pursuing business development opportunites.
 
A novel strain of coronavirus, the COVID-19 virus, may adversely affect our business operations and financial condition.
 
In December 2019, an outbreak of the COVID-19 virus was reported in Wuhan, China. On March 11, 2020, the World Health Organization declared the COVID-19 virus a global pandemic and on March 13, 2020, President Donald J. Trump declared the virus a national emergency in the United States. This highly contagious disease has spread to most of the countries in the world and throughout the United States, creating a serious impact on customers, workforces and suppliers, disrupting economies and financial markets, and potentially leading to a world-wide economic downturn. It has caused a disruption of the normal operations of many businesses, including the temporary closure or scale-back of business operations and/or the imposition of either quarantine or remote work or meeting requirements for employees, either by government order or on a voluntary basis. The pandemic may adversely affect our potential customers’ operations, our employees and our employee productivity. It may also impact the ability of our subcontractors, partners, and suppliers to operate and fulfill their contractual obligations, and result in an increase in costs, delays or disruptions in performance. These supply chain effects, and the direct effect of the virus and the disruption on our employees and operations, may negatively impact both our ability to meet customer demand and our revenue and profit margins. Our employees are working remotely and using various technologies to perform their functions. We might experience delays or changes in customer demand, particularly if customer funding priorities change. Further, in reaction to the spread of COVID-19 in the United States, many businesses have instituted social distancing policies, including the closure of offices and worksites and deferring planned business activity. The disruption and volatility in the global and domestic capital markets may increase the cost of capital and limit our ability to access capital. Both the health and economic aspects of the COVID-19 virus are highly fluid and the future course of each is uncertain. For these reasons and other reasons that may come to light if the coronavirus pandemic and associated protective or preventative measures expand, we may experience a material adverse effect on our business operations, revenues and financial condition; however, its ultimate impact is highly uncertain and subject to change.
 
Employees
 
At October 9, 2020, we had 3 full time employees.
 
Our principal offices are located at 4094 Majestic Lane, Suite 360, Fairfax, Virginia 22033. Our telephone number is (703) 273-0383.
 
Our common stock is quoted on the OTC Pink under the symbol “VISM”.
 
Item 1A. Risk Factors
 
The common shares of our Company are considered speculative. You should carefully consider the following risks and uncertainties in addition to other information in this annual report in evaluating our Company and our business before purchasing our common shares. Our business, operating or financial condition could be harmed due to any of the following risks:
 
Management and our auditors have raised substantial doubts as to our ability to continue as a going concern.
 
Our financial statements have been prepared assuming we will continue as a going concern. Since inception we have experienced recurring net losses which losses caused an accumulated deficit of approximately $48 million as of June 30, 2020. These factors, among others, raise substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
 
The IT security market is rapidly evolving within the increasingly challenging cyber threat landscape and the continuing use of hybrid on-premise and cloud-based environments. As a result of unanticipated market, industry or company developments our sales may not continue to grow at current rates or may decline, and our share price could decrease.
 
We operate in a rapidly evolving industry focused on securing organizations’ IT systems and sensitive data. Our solutions focus on safeguarding privileged accounts, credentials, and secrets. Privileged accounts are those accounts within an organization that give users, applications, and machine identities the highest levels of access, or “privileged” access, to IT systems and infrastructure, industrial control systems, applications and data both on-premises and in cloud environments. While breaches of such privileged accounts have continued to gain media attention in recent years, IT security spending within enterprises is often concentrated on endpoint and network security products designed to stop threats from penetrating corporate networks. Organizations may allocate all or most of their IT security budgets to these products and may not adopt our solutions in addition to such products. Organizations are moving portions of their IT systems to be managed by third parties, primarily infrastructure, platform and application service providers, and may rely on such providers’ internal security measures.
 
Further, security solutions such as ours, which are focused on disrupting cyber attacks by insiders and external perpetrators that have penetrated an organization’s on-premise or cloud environment, represent a security layer designed to respond to advanced threats and more rigorous compliance standards and audit requirements. However, advanced cyber attackers are skilled at adapting to new technologies and developing new methods of gaining access to organizations’ sensitive data. As our customers’ technologies and business plans evolve and become more complex, we expect them to face new and increasingly sophisticated methods of attack. We face significant challenges in ensuring that our solutions effectively identify and respond to such attacks without disrupting the performance of our customers’ IT systems. As a result, we must continually modify and improve our products, services, and licensing models in response to market and technology trends to ensure we are meeting market needs and continue providing valuable solutions that can be deployed in a variety of environments, including cloud and hybrid.
 
We cannot guarantee that we will be able to anticipate future market needs and opportunities or be able to develop or acquire product enhancements or new products to meet such needs or opportunities in a timely manner or at all. Delays in developing, completing or delivering new or enhanced products could cause our offerings to be less competitive, impair customer acceptance of our solutions and result in delayed or reduced revenue for our solutions.
 
In addition, any changes in compliance standards or audit requirements that reduce the priority for the types of controls, security, monitoring and analysis that our solutions provide would adversely impact demand for our solutions. It is therefore difficult to predict how large the market will be for our solutions. If our solutions are not viewed by organizations as necessary, or if customers do not recognize the benefit of our solutions as a critical layer of an effective security strategy, then our revenues may not continue to grow at their current rate or may decline, which could cause our share price to decrease in value.
 
 
Our reputation and business could be harmed based on real or perceived shortcomings, defects or vulnerabilities in our solutions or the provision of our services, or due to the failure of our customers, channel partners, managed security service providers, or subcontractors to correctly implement, manage and maintain our solutions, resulting in loss of existing or new customers, lawsuits or financial losses.
 
Security products and solutions are complex in design and deployment and may contain errors that are not capable of being remediated or detected until after their deployment. Any errors, defects, or misconfigurations could cause our products or services to not meet specifications, be vulnerable to security attacks or fail to secure networks and could negatively impact customer operations and harm our business and reputation. In particular, we may suffer significant adverse publicity and reputational harm, including a downgrade in our industry leadership position by industry analysts, if our solutions (or the services we provide in relation to our solutions) are associated, or are believed to be associated with, or fail to reasonably protect against, a significant breach or a breach at a high profile customer, managed service provider network, or third party system utilized by us as part of our cloud-based security solution.
 
Further, the third party data hosting facilities used for the provision of our SaaS solutions may experience damages, interruptions or other unanticipated problems that could result in disruptions in the provision of these solutions. Any disruptions or other performance problems with our SaaS solutions could harm our reputation and business, damage our customers’ businesses, subject us to potential liability, cause customers to terminate or not renew their subscriptions to our SaaS solutions and make it more challenging for us to retain existing customers and acquire new customers.
 
False detection of threats (referred to as “false positives”), while typical in our industry, may reduce perception of the reliability of our products and may therefore adversely impact market acceptance of our products. If our solutions restrict legitimate privileged access by authorized personnel to IT systems and applications by falsely identifying those users as attackers or otherwise unauthorized, our customers’ businesses could be harmed.
 
Our solutions not only reinforce but also rely on the common security concept of placing multiple layers of security controls throughout an IT system. The failure of our customers, channel partners, managed service providers or subcontractors to correctly implement and effectively manage and maintain our solutions (and the environments in which they are utilized), or to consistently implement and utilize generally accepted and comprehensive, multi-layered security measures and processes in customer networks, may lessen the efficacy of our solutions. Additionally, our customers or our channel partners may independently develop plug-ins or change existing plug-ins or APIs that we provided to them for interfacing purposes in an incorrect or insecure manner. Such failures or actions may lead to security breaches and data loss, which could result in a perception that our solutions failed. Further, our failure to provide our customers and channel partners with adequate services or inaccurate product documentation related to the use, implementation and maintenance of our solutions, could lead to claims against us.
 
An actual or perceived cyber attack, other security breach or theft of our customers’ data, regardless of whether the breach or theft is attributable to the failure of our products, SaaS solutions or the services we provided in relation thereto, could adversely affect the market’s perception of the efficacy of our solutions and our industry standing, cause current or potential customers to look to our competitors for alternatives to our solutions and subject us to lawsuits, indemnity claims and financial losses, as well as the expenditure of significant financial resources to analyze, correct or eliminate any vulnerabilities. In addition, provisions in our license agreements that attempt to limit our liabilities towards our customers, channel partners and relevant third parties may not withstand legal challenges, and certain liabilities may not be limited or capped. Additionally, any insurance coverage we may have may not adequately cover all claims asserted against us or may cover only a portion of such claims. An actual or perceived cyber attack could also cause us to suffer reputational harm, lose existing customers and potential new customers, or deter new and existing customers from purchasing or implementing our products.
 
 
We face intense competition from a wide variety of IT security vendors operating in different market segments and across diverse IT environments, which may challenge our ability to maintain or improve our competitive position or to meet our planned growth rates.
 
The IT security market in which we operate is characterized by intense competition, constant innovation, rapid adoption of different technological solutions and services, and evolving security threats. We compete with a multitude of companies that offer a broad array of IT security products that employ different approaches and delivery models to address these evolving threats.
 
We may face competition due to changes in the manner that organizations utilize IT assets and the security solutions applied to them, such as the provision of privileged account security functionalities as part of public cloud providers’ infrastructure offerings, or cloud-based identity management solutions. Limited IT budgets may also result in competition with providers of other advanced threat protection solutions such as McAfee, LLC, Palo Alto Networks, Splunk Inc., and NortonLifeLock, Inc. (formerly known as Symantec Corporation acquired by Broadcom Inc.). We also may compete, to a certain extent, with vendors that offer products or services in adjacent or complementary markets to privileged access management, including identity management vendors and cloud platform providers such as Amazon Web Services, Google Cloud Platform, and Microsoft Azure. As the privileged access management market has matured significantly over the recent years, the entry barrier is now lower and it is easier for competitors to compete in the market. Some of our competitors are large companies and have wider technical and financial resources and broader customer bases used to bring competitive solutions to the market. These companies may already have existing relationships as an established vendor for other product offerings, and certain customers may prefer one single IT vendor for product security procurement rather than purchasing solely based on product performance. Such companies may use these advantages to offer products and services that are perceived to be as effective as ours at a lower price or for free as part of a larger product package or solely in consideration for maintenance and services fees, which could result in increased market pressure to offer our solutions and services at lower prices. They may also develop different products to compete with our current solutions and respond more quickly and effectively than we do to new or changing opportunities, technologies, standards or client requirements or enjoy stronger sales and service capabilities in certain regions. Additionally, niche vendors are developing and marketing lower cost solutions with limited privileged access management functionality that may impact our ability to maintain premium market pricing.
 
Our competitors may enjoy potential competitive advantages over us, such as:
greater name recognition, a longer operating history and a larger customer base, notwithstanding the increased visibility of our brand in recent years since our initial public offering;
larger sales and marketing budgets and resources;
broader distribution and established relationships with channel partners, advisory firms and customers;
increased effectiveness in protecting, detecting and responding to cyber attacks;
greater or localized resources for customer support and provision of services;
greater speed at which a solution can be deployed and implemented;
greater resources to make acquisitions;
larger intellectual property portfolios; and
greater financial, technical and other resources.
 
Our current and potential competitors may also establish cooperative relationships among themselves or with third parties that may further enhance their resources and capabilities. Current or potential competitors have been acquired and consolidated or may be acquired by third parties with greater resources in the future. As a result of such acquisitions, our current or potential competitors may be able to adapt more quickly to new technologies and customer needs, devote greater resources to the promotion or sale of their products and services, initiate or withstand substantial price competition, take advantage of other opportunities more readily or develop and expand their product and service offerings more quickly than we do. Larger competitors with more diverse product offerings may reduce the price of products that compete with ours in order to promote the sale of other products or may bundle them with other products, which would lead to increased pricing pressure on our products and could cause the average sales prices for our products to decline. Similarly, we may also face increased competition following an acquisition of new lines of business that compete with providers of such technologies or from security vendors or other companies in adjacent markets extending their solutions into privilege access management. Wemay be at a competitive disadvantage to our privately-held competitors, as they may not face the same accounting, auditing and legal standards we do as a public company. Such privately-held competitors may face less public scrutiny than we do and may be less risk-averse than we are, and therefore may have greater operational flexibility.
 
Furthermore, an increasing number of independent industry analysts and researchers, regularly evaluate, compare and publish reviews regarding the functionality of IT security products, including ours. These reviews may significantly influence the market perception of our products, and our reputation and brand could be harmed if they publish negative reviews of our products or increasingly positive reviews of our competitors’ products, or do not view us as a market leader.
In addition, other IT security technologies exist or could be developed in the future by current or future competitors, and our business could be materially and adversely affected if such technologies are widely adopted. We may not be able to successfully anticipate or adapt to changing technology or customer requirements on a timely basis, or at all. If we fail to keep up with technological changes or to convince our customers and potential customers of the value of our solutions even in light of new technologies, our business, results of operations and financial condition could be materially and adversely affected.
 
We currently have a working capital deficit and negative cash flow from operations and are uncertain if and when we will be able to pay our current liabilities.
 
Our working capital deficit was approximately $3.4 million as of June 30, 2020. This deficit consists of $30,251 in current assets, offset by $3,411,011 in current liabilities. In addition, we had negative cash flow from operations for the year ended June 30, 2020 of approximately $107,000. We do not have any liquid or other assets that can be liquidated to pay our current liabilities while we continue to incur additional liabilities to our officer and certain service providers who are working to prepare the documents required to be filed with the Securities and Exchange Commission to enable our common shares to be registered for trading. Since we currently have limited operations, the only ways we have of paying our current liabilities are to issue our common or preferred shares to our creditors or to issue unsecured promissory notes which may include certain features such as convertibility into common or preferred shares or warrants to purchase additional common or preferred shares in the future.
 
We currently do not have sufficient capital to finance the anticipated recurring costs of being a publicly traded company.
 
As of October 9, 2020, we had approximately $2,600 in cash on hand. We anticipate incurring incremental annual costs of approximately $180,000 related to maintaining a publicly traded company. We will need to raise additional capital to support our public-company-related activities.
 
 
4
 
 
 
We had $1,883,784 of convertible notes, notes payable, and accrued interest payable as of June 30, 2020, of which $1,853,784 of this amount is past due, and we do not have the funds necessary to pay these obligations.
 
In addition to funding our operating expenses, we need capital to pay various debt obligations totaling approximately $1.9 million as of June 30, 2020 which are either currently past due or which are due in the current fiscal year. Currently, there is $822,962 principal amount of the convertible notes payable which is past due, $205,000 principal of the notes payable which is past due, and $677,857 of accrued interest which is past due. The interest on the past due principal amounts will continue to accrue monthly at their stated rates. Holders of past due notes do not have a security interest in our assets. The existence of these obligations provides additional challenges to us in our efforts to raise capital to fund our operations.
 
In the event we consummate a transaction with a profitable company, we may not be able to utilize our net operating loss carryover which may have a negative impact on your investment.
 
If we enter into a combination with a business that has operating income, we cannot assure you that we will be able to utilize all or even a portion of our existing net operating loss carryover for federal or state tax purposes following such a business combination. If we are unable to make use of our existing net operating loss carryover, the tax advantages of such a combination may be limited, which could negatively impact the price of our stock and the value of your investment. These factors will substantially increase the uncertainty, and thus the risk, of investing in our shares.
 
Economic conditions may affect our ability to obtain financing and to complete a merger or acquisition.
 
Due to general economic conditions, rapid technological advances being made in some industries, and shortages of available capital, our management believes that there are numerous firms seeking even the limited additional capital which we will need. In the presence of these economic conditions, we may have difficulty raising sufficient capital to support the investigation of potential business opportunities, and to consummate a merger or acquisition. These factors substantially increase the uncertainty, and thus the risk, of investing in our shares.
 
In December 2019, a novel coronavirus (“COVID-19”) emerged and has subsequently spread worldwide. The World Health Organization has declared COVID-19 a pandemic resulting in federal, state, and local governments mandating various restrictions, including travel restrictions, restrictions on public gatherings, stay at home orders and advisories and quarantining of people who may have been exposed to the virus.
 
As the COVID-19 pandemic is complex and rapidly changing, the full extent and duration of the impact of COVID-19 on the Company’s operation and financial performance is currently unknown and depends on future developments that are uncertain and unpredictable, including the duration and spread of the pandemic, its impact on capital and financial markets.
 
There are a number of factors related to our common stock which may have an adverse effect on our shareholders.
 
Shareholders’ interests in our Company will be diluted and investors may suffer dilution in their net book value per share if we issue additional shares or raise funds through the sale of equity securities. In the event that we are required to issue additional shares, enter into private placements to raise financing through the sale of equity securities or acquire business interests in the future from the issuance of shares of our common stock to acquire such interests, the interests of existing shareholders in our Company will be diluted and existing shareholders may suffer dilution in their net book value per share depending on the price at which such securities are sold. If we do issue additional shares, it will cause a reduction in the proportionate ownership and voting power of all existing shareholders.
 
We have certain provisions in our Articles of Incorporation and Bylaws, and there are other provisions under Florida law, that may serve to make a takeover of our Company more difficult.
 
Provisions of our articles of incorporation and bylaws may delay or prevent a takeover which may not be in the best interests of our stockholders. Provisions of our articles of incorporation and bylaws may be deemed to have anti-takeover effects, which include when and by whom special meetings of our stockholders may be called, and may delay, defer, or prevent a takeover attempt. In addition, certain provisions of Florida law also may be deemed to have certain anti-takeover effects which include that control of shares acquired in excess of certain specified thresholds will not possess any voting rights unless these voting rights are approved by a majority of a corporation’s disinterested stockholders.
 
 
5
 
 
 
Voting power of our shareholders is highly concentrated by insiders.
 
Our officers and directors control, either directly or indirectly, a substantial portion of our voting securities. As of June 30, 2020, our executive officer and directors beneficially owns 390,312,564 shares of Common Stock, or approximately 25% of our outstanding shares of Common Stock. In addition, our executive officer owns the only issued and outstanding share of Series AA Convertible Preferred Stock which entitles him to 51% of the Common votes on any matter requiring a shareholder vote. Therefore, our management may significantly affect the outcome of all corporate actions and decisions for an indefinite period of time including the election of directors, amendment of charter documents and approval of mergers and other significant corporate transactions.
 
Our common stock is quoted in the over the counter market on the OTC Pink.
 
Our common stock is quoted on the OTC Pink. OTC Pink offers a quotation service to companies that are unable to list their securities on an exchange or for companies, such as ours, whose securities are not eligible for quotation on the OTC Bulletin Board. The requirements for quotation on the OTC Pink are considerably lower and less regulated than those of the OTC Bulletin Board or an exchange. Because our common stock is quoted on the OTC Pink, it is possible that even fewer brokers or dealers would be interested in making a market in our common stock which further adversely impacts its liquidity.
 
The tradability of our common stock is limited under the penny stock regulations which may cause the holders of our common stock difficulty should they wish to sell their shares.
 
Because the quoted price of our common stock is less than $5.00 per share, our common stock is considered a “penny stock,” and trading in our common stock is subject to the requirements of Rule 15g-9 under the Exchange Act. Under this rule, broker/dealers who recommend low-priced securities to persons other than established customers and accredited investors must satisfy special sales practice requirements. The broker/dealer must make an individualized written suitability determination for the purchaser and receive the purchaser’s written consent prior to the transaction. SEC regulations also require additional disclosure in connection with any trades involving a “penny stock,” including the delivery, prior to any penny stock transaction, of a disclosure schedule explaining the penny stock market and its associated risks. These requirements severely limit the liquidity of securities in the secondary market because few broker or dealers are likely to undertake these compliance activities and this limited liquidity will make it more difficult for an investor to sell his shares of our common stock in the secondary market should the investor wish to liquidate the investment. In addition to the applicability of the penny stock rules, other risks associated with trading in penny stocks could also be price fluctuations and the lack of a liquid market.
 
 
6
 
 
 
Item 1B. Unresolved Staff Comments.
 
Not applicable.
 
Item 2. Properties.
 
We rent our principal executive offices from an unrelated third party on a month-to-month basis for a monthly rental of $496.
 
Item 3. Legal Proceedings.
 
In July 2018, the Company was named as the defendant in a legal proceeding brought by Tarpon Bay Partners LLC (the “Plaintiff”) in the Judicial District Court of Danbury, Connecticut. Plaintiff asserts that the Company failed to convert two convertible notes held by Plaintiff. The Company is vigorously contesting this claim. Since the onset of the COVID-19 pandemic, no substantive work has been conducted on this case.  There are no other proceedings in which any of our directors, officers, or affiliates, or any registered or beneficial stockholder, is an adverse party or has a material interest adverse to our interest.
 
Item 4. Mine Safety Disclosures.
 
Not applicable.
 
 
7
 
 
 
 
 
 
 
 
 
PART II
 
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities.
 
Our common shares are quoted on the OTC Pink Quotation System under the symbol “VISM,” but trade infrequently.
 
The high and low bid prices of our common stock for the periods indicated below are as follows:
 
Fiscal Year Ended June 30, 2020
 
High
 
 
Low
 
 
 
 
 
 
 
 
Quarter Ended September 30, 2019
 $0.1000 
 $0.0050 
Quarter Ended December 31, 2019
 $0.0160 
 $0.0015 
Quarter Ended March 31, 2020
 $0.0034 
 $0.0007 
Quarter Ended June 30, 2020
 $0.0020 
 $0.0002 
 
Fiscal Year Ended June 30, 2019
 
High
 
 
Low
 
 
 
 
 
 
 
 
Quarter Ended September 30, 2018
 $1.44 
 $0.16 
Quarter Ended December 31, 2018
 $0.47 
 $0.06 
Quarter Ended March 31, 2019
 $0.30 
 $0.01 
Quarter Ended June 30, 2019
 $0.23 
 $0.04 
 
Stockholders
 
As of October 9, 2020, there were 930 stockholders of record of our Common Stock.
 
Dividend Policy
 
We have not paid any cash dividends and do not anticipate or contemplate paying dividends in the foreseeable future.
 
Recent Sales of Unregistered Securities
 
During the year ended June 30, 2020 the Company issued 954,210,518 shares of its common stock related to the conversion of $333,219 of principal and accrued interest of its convertible notes payable, at an average contract conversion price of $0.0004 per share.  The fair value of the shares issued was $1,059,572, resulting in a loss on debt settlement of $593,907.
 
Stock Based Compensation and Stock Based Consulting Services Expense
 
During the year ended June 30, 2020 the Company issued 199,850,000 shares of its $0.0001 par value common stock to five consultants, as compensation for services rendered. The shares were valued at $198,735, or $0.006 per share.
 
During the year ended June 30, 2020 the Company issued 348,000,000 shares of its $0.0001 par value common stock to our Directors and Officer, as compensation for services rendered. The shares were valued at $148,000, or $0.00186 per share.
 
 
 
8
 
 
 
Rule 10B-18 Transactions
 
During the year ended June 30, 2020, there were no repurchases of the Company’s common stock by the Company
 
Item 6. Selected Financial Data.
 
As a “smaller reporting company”, we are not required to provide information required by this item.
 
 
 
 
 
 
 
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
 
The following information should be read in conjunction with our financial statements and accompanying notes included in this Annual Report on Form 10-K.
 
Overview
 
The Company was incorporated in Nevada as Jaguar Investments, Inc. during October 1987. During March 2003, a wholly owned subsidiary of the Company merged with Freight Rate, Inc., a development stage company in the logistics software business. During May 2003, the Company changed its name to Power2Ship, Inc. During October 2006, the Company merged with a newly formed, wholly owned subsidiary, Fittipaldi Logistics, Inc., a Nevada corporation, with the Company surviving but its name changed to Fittipaldi Logistics, Inc. effective November 2006. During December 2007, the Company merged with a newly formed, wholly owned subsidiary, NuState Energy Holdings, Inc., a Nevada corporation, with the Company surviving but renamed NuState Energy Holdings, Inc. effective December 2007. In March 2019, the Company changed its name to Visium Technologies, Inc.
 
Since February 12, 2018 Mark Lucky has served as Chairman and CEO. He currently also serves as CFO. 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. 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, the Company entered into a license agreement with The MITRE Corporation to commercialize and sell CyGraph, a cybersecurity application that is a tool for cyber warfare analytics, visualization, and knowledge management.
 
Results of Operations
 
Selling, General, and Administrative Expenses
 
For the year ended June 30, 2020, selling, general and administrative expenses were $917,993 as compared to $2,721,467 for the year ended June 30, 2019, a decrease of $1,803,474 or approximately 67.1%. For the years ended June 30, 2020 and 2019 selling, general and administrative expenses consisted of the following:
 
 
 
2020
 
 
2019
 
 
Increase/
(Decrease)
 
 
% Change
 
Accounting expense
 
$
5,581
 
 
$
11,000
 
 
$
(5,419
)
 
 
(49.3
)%
Consulting fees
 
 
103,800
 
 
 
125,500
 
 
 
(21,700
 
 
(17.3
)%
Salaries
 
 
336,000
 
 
 
320,000
 
 
 
16,000
 
 
 
5.0
%
Legal and professional fees
 
 
59,550
 
 
 
82,630
 
 
 
(23,080
 
 
(27.9
)%
Travel expense
 
 
9,786
 
 
 
3,342
 
 
 
6,444
 
 
 
192.8
Occupancy expense
 
 
4,719
 
 
 
9,319
 
 
 
(4,600
 
 
(49.4
)%
Telephone expense
 
 
3,600
 
 
 
3,600
 
 
 
-
 
 
 
0.0
%
Marketing expense
 
 
8,199
 
 
 
-
 
 
 
8,199
 
 
 
N/A
 
Website expense
 
 
2,951
 
 
 
2,555
 
 
 
396
 
 
 
15.5
%
Investor relations expense
 
 
20,000
 
 
 
28,500
 
 
 
(8,500
 
 
(29.8
)%
Stock based consulting expense
 
 
198,735
 
 
 
174,500
 
 
 
24,235
 
 
 
13.9
%
Stock based compensation
 
 
148,000
 
 
 
1,901,500
 
 
 
(1,753,500
 
 
(92.2
)%
Other
 
 
17,072
 
 
 
59,021
 
 
 
(41,949
 
 
(71.1
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
917,993
 
 
$
2,721,467
 
 
$
(1,803,474
 
 
(66.3
)%
 
The decrease in selling, general and administrative expenses during fiscal 2020, when compared with the prior year, is primarily due to a decrease in stock-based compensation, legal expenses, and salaries, offset by increases in salary expense, and stock-based consulting expense.
 
 
9
 
 
 
Amortization Expense
 
 
 
Years Ended
 
 
 
 
 
 
June 30,
 
 
%
 
 
 
2020
 
 
2019
 
 
Change
 
Customer relationships
 $- 
 $141,970 
  (100 
  )%
 
The increase in amortization expense is due to the amortization of the customer relationships intangible asset resulting from the acquisition of Threat Surface Solutions Group, LLC in  2018.
 
Change in Fair Value of Derivative Liability
 
 
 
Years ended
 
 
 
June 30,
 
 
 
2020
 
 
2019
 
Gain (loss) on change in fair value of derivative liabilities
 $385,367 
 $(183,130 
  ) 
 
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 2020 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
 
 
 
Years Ended
 
 
 
 
 
 
June 30,
 
 
%
 
 
 
2020
 
 
2019
 
 
Change
 
Derivative liability expense
 
$
61,396
 
 
$
341,423
 
 
 
82.0
%
 
The Company issued convertible notes in January 2019 and October 2019 which provisions contained variable price conversion terms, resulting in a derivative liability expense, measured as of the issuance date of the notes.
 
Interest Expense
 
 
 
Years Ended
 
 
 
 
 
 
June 30,
 
 
%
 
 
 
2020
 
 
2019
 
 
Change
 
Interest Expense
 
$
323,021
 
 
$
276,087
 
 
 
17.0
%
 
Interest expense represents the stated interest of notes and convertible notes payable as well as the amortization of debt discount. The increase in interest expense during fiscal 2020 is primarily due to higher amortization of debt discount of $158,333.
 
Gain on Debt Write-Off
 
 
 
Years Ended
 
 
 
June 30,
 
 
 
2020
 
 
2019
 
Gain (loss) on debt write off/conversions
 
$
(593,907
 
$
2,303,147
 
 
During the twelve months ended June 30, 2020 the Company incurred losses on the convertible note conversions, which were valued at fair value on the date of the respective conversions, totaling $593,907.
 
In March 2019, the Company obtained a legal opinion to extinguish aged debt totaling $2,292,162 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.
 
Accounts payable and accrued expenses
 
$
312,001
 
Accrued interest expense
 
 
1,184,214
 
Convertible notes payable
 
 
671,706
 
Promissory notes payable
 
 
65,241
 
 
 
$
2,292,162
 
 
 
 
10
 
 
 
Loss on impairment
 
 
 
Years Ended
 
 
 
June 30,
 
 
 
2020
 
 
2019
 
Loss on impairment
 
$
-
 
 
$
407,002
 
 
In June 2019 Management determined that the intangible asset attributed to the purchase of Threat Surface Solutions Group, LLC had no future benefit to the Company. As a result, the net book value of the asset was written off in full, as follows:
 
Net intangible asset as of date of impairment
 
$
459,317
 
Reversal of contingent liability
 
 
(52,315
)
Loss on impairment
 
$
407,002
 
 
 
Liquidity and Capital Resources
 
 
 
Balance at June 30,
 
 
 
2020
 
 
2019
 
Cash
 
$
30,251
 
 
$
18,668
 
Accounts payable and accrued expenses
 
 
(333,805
)
 
 
(213,805
)
Accrued compensation
 
 
(652,529
)
 
 
(316,529
)
Notes, convertible notes, and accrued interest
 
 
(1,883,784
)
 
 
(1,863,898
)
 
At June 30, 2020 and 2019, 100% of our total assets consisted of cash.
 
We do not have any material commitments for capital expenditures.
 
The objective of liquidity management is to ensure that we have ready access to sufficient funds to meet commitments and effectively implement our growth strategy. Our primary sources are financing activities such as the issuance of notes payable and convertible notes payable. In the past, we have mostly relied on debt and equity financing to provide for our operating needs.
 
We were unable to generate sufficient funds from operations to fund our ongoing operating requirements through June 30, 2020. As of October 9, 2020, we had approximately $2,600 on hand. We may need to raise funds to enhance our working capital and use them for strategic purposes. If such need arises, we intend to generate proceeds from either debt or equity financing.
 
We intend to finance our operations using equity financing. We do not anticipate incurring capital expenditures for the foreseeable future. We anticipate that we will need to raise approximately $180,000 per year in the near term to finance the recurring costs of being a publicly traded company.
 
 
11
 
 
 
Going Concern
 
The accompanying financial statements have been prepared on a going concern basis. The Company has used net cash in its operating activities of $106,757 and $566,745 during the years ended June 30, 2020 and 2019, respectively, and has a working capital deficit of approximately $3.4 million and $3.2 million at June 30, 2020 and 2019, 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 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.
 
 
 
Years Ended
 
 
 
June 30,
 
 
 
2020
 
 
2019
 
Cash flows from operating activities:
 
 
 
 
 
 
 
 
Net loss
 
$
(1,542,450
)
 
$
(1,757,932
)
Non-cash Adjustments:
 
 
 
 
 
 
 
 
Gain (loss) on debt settlement and write off expense
 
 
593,907
 
 
 
(2,303,147
)
Stock based compensation
 
 
346,735
 
 
 
2,076,000
 
Amortization of debt discount
 
 
206,249
 
 
 
283,637
 
Derivative liability expense
 
 
61,396
 
 
 
341,423
 
(Gain) loss on change in derivative liability
 
 
(385,367
 
 
183,130
 
Impairment expense
 
 
-
 
 
 
407,002
 
Changes in assets and liabilities
 
 
 
 
 
 
 
 
Accrued interest
 
 
145,941
 
 
 
133,189
 
Accrued compensation
 
 
336,000
 
 
 
160,704
 
Accounts payable and accrued expenses
 
 
130,832
 
 
 
(90,751
)
Net cash used in operations
 
 
(106,757
)
 
 
(566,745
)
 
 
 
 
 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
 
 
 
 
Advance from officers
 
 
40,340
 
 
 
41,000
 
Proceeds from sale of common stock
 
 
-
 
 
 
250,501
 
Proceeds from issuance of convertible notes payable, net of debt issuance costs
 
 
78,000
 
 
 
282,500
 
Net cash provided by financing activities
 
 
118,340
 
 
 
574,001
 
 
 
 
 
 
 
 
 
 
Net increase in cash
 
$
11,583
 
 
$
7,256
 
 
 
12
 
 
 
Year ended June 30, 2020
 
Net cash used in operations in fiscal year 2020 decreased by $459,987 or 81% from fiscal year 2019. This cash was obtained through the sale of three convertible notes that netted the Company $78,000, and through advances of cash made to the Company by its officers and directors of $40,340.
 
Year ended June 30, 2019
 
Net cash used in operations in fiscal year 2019 increased by $504,328 or 840% from fiscal year 2018. This cash was obtained through the sale of 2,505,500 shares of the Company’s $0.0001 par value common stock, at a per share price of $0.10, or $250,501, the sale of convertible notes totaling $300,000, which netted the Company $282,500, and advances from directors of $41,000.
 
Capital Raising Transactions
 
Issuance of Convertible Notes Payable
 
We generated net proceeds of $78,000 and $282,500 during fiscal 2020 and 2019, respectively, from the issuance of convertible notes payable.
 
Convertible Notes Payable
 
The Company had convertible promissory notes aggregating approximately $873,000 and 1.075 million outstanding at June 30, 2020 and 2019, respectively. The accrued interest amounted to approximately $503,000 and $435,000 at June 30, 2020 and 2019, 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 10% and 18% per annum. Interest is generally payable monthly. The Convertible Notes Payable are generally convertible at rates ranging between $0.0002 and $22,500 per share, at the holders’ option. At June 30, 2020, all convertible promissory notes have matured.
 
 
 
Balance at
 
 
Balance at
 
 
 
June 30, 2020
 
 
June 30, 2019
 
Convertible Notes Payable
 
$
852,962
 
 
$
1,075,428
 
Discount on convertible notes
 
 
-
 
 
 
(158,333
)
Notes Payable, net of discount
 
$
852,962
 
 
$
917,095
 
 
Convertible notes payable to ASC Recap LLC
 
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 that was never consummated and therefore there was no performance by ASC to earn the notes. As a result, while the Company continues to carry the balance of these notes on its balance sheet, it does not believe the notes payable balances are owed. 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 50% of the lowest closing bid price of our common stock for the twenty days prior to conversion.
 
Notes Payable
 
The Company had promissory notes aggregating approximately $205,000 at June 30, 2020 and 2019, respectively. The related accrued interest amounted to approximately $175,000 and $159,000 at June 30, 2020 and 2019, respectively. There is no provision in the note agreements for adjustments to the interest rates on these notes in the event of default. The notes payable bear interest at rates of 16% per annum. Interest is generally payable monthly. All promissory notes have matured as of June 30, 2020.
 
Common Stock Warrants
 
In January 2020 we issued 500,000 warrants with a three-year life and a conversion price of $0.15 per share. These warrants have price protection provisions that allow for the reduction in the current exercise price upon the occurrence of certain events, including the Companys issuance of common stock or securities convertible into or exercisable for common stock, such as options and warrants, at a price per share less than the exercise price then in effect. For instance, if the Company issues shares of its common stock or options exercisable for or securities convertible into common stock at an effective price per share of common stock less than the exercise price then in effect, the exercise price will be reduced to the effective price of the new issuance. 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 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.
 
A summary of the status of the Company’s outstanding common stock warrants as of June 30, 2020 and changes during the period ending on that date is as follows:
 
 
 
Number of
 
 
Weighted Average
 
 
 
Warrants
 
 
Exercise Price
 
Common Stock Warrants
 
 
 
 
 
 
 
 
Balance at June 30, 2019
 
 
500,000
 
 
 $
0.15
 
Granted
 
 
-
 
 

-
 
Exercised
 
 
-
 
 
 
-
 
Forfeited
 
 
-
 
 
 
-
 
Balance at June 30, 2020
 
 
500,000
 
 
$
0.15
 
 
 
 
 
 
 
 
 
 
Warrants exercisable at end of period
 
 
500,000
 
 
$
0.15
 
 
 
 
 
 
 
 
 
 
Weighted average fair value of warrants granted during the period
 
 
 
 
 
$
-
 
 
Derivative Liability
 
The Company recognizes all derivative financial instruments on its balance sheet at fair value.
 
 
13
 
 
 
Off-Balance Sheet Arrangements
 
We have no off-balance sheet arrangements.
 
Climate Change
 
Our opinion is that neither climate change, nor governmental regulations related to climate change, have had, or are expected to have, any material effect on our operations.
 
Critical Accounting Policies
 
The Company’s critical accounting policies are as follows:
 
Convertible Instruments - The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with 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 in accordance with EITF 00-19. 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 that term is described).
 
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 the provisions of ASC 470 20 “Debt with Conversion 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 when necessary 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.
 
The Company believes the certain conversion features embedded in convertible notes payable are not clearly and closely related to the economic characteristics of the Company’s stock price. Accordingly, the Company has recognized derivative liabilities in connection with such instruments. The Company uses judgment in determining the fair value of derivative liabilities at the date of issuance at every balance sheet thereafter. The Company uses judgment in determining which valuation is most appropriate for the instrument (e.g., Cox, Ross & Rubinstein Binomial Tree valuation model), the expected volatility, the implied risk-free interest rate, as well as the expected dividend rate.
 
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
 
Not applicable.
 
Item 8. Financial Statements and Supplementary Data.
 
The information required by this item is included in Item 15 of this Annual Report on Form 10-K.
 
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
 
None.
 
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, 2020 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, 2020, 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.
 
 
14
 
 
 
 
 
 
 
 
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, 2020. 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, 2020, 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 four 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, 2020.
 
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, 2020, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
 
Item 9B. Other Information
 
None.
 
 
15
 
 
 
 
 
 
 
 
 
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, 2020:
 
Name
 
Age
 
Position
Mark Lucky
 
61
 
Chairman of the Board, Chief Executive Office, Chief Financial Officer
Thomas Grbelja (1)(2)
 
61
 
Director
Emmanuel Esaka, MD
 
47
 
Director
Paul Favata (1)(2)
 
55
 
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.
 
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.
 
There are no family relationships among our directors or executive officers.
 
 
16
 
 
 
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.
 
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.
 
 
17
 
 
 
 
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 2020, 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.
 
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.
 
 
18
 
 
 
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
 
Name and Principal Position
 
Year
 
Salary ($)(1)
 
 
Bonus ($)
 
 
Stock Awards
 
 
Option Awards ($)
 
 
Non-Equity Incentive Plan Compensation ($)
 
 
Non-Qualified Deferred Compensation Earnings
 
 
All Other Compensation ($)
 
 
Total ($)
 
Mark Lucky (1)
 
2020
 
 
336,000
 
 
 
-
 
 
 
87,000
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
423,000
 
Chief Executive Officer and Chief Financial Officer
 
2019
 
 
320,000
 
 
 
-
 
 
 
565,000
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
885,000
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Henry Holcombe
 
2020
 
 
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
Former Chief Executive Officer
 
2019
 
 
 
 
 
 
 
 
 
 
205,000
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
205,000
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)
Amounts represent accrued compensation for Mr. Lucky. Actual amounts paid to Mr. Lucky were $0 and $0 for 2020 and 2019, respectively.
 
 
 
 
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
 
There are no outstanding equity awards held as of June 30, 2020 by our Executive Officers and Directors.
 
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 February and April 2019 Messrs. Favata and Grbelja each received restricted stock grants as compensation for their Board services. In October 2019 Dr. Esaka received a restricted stock grant as compensation for his Board services. The restricted stock grants vest over thirty-six months. In March 2020, the remaining unvested restricted shares issued to the directors were vested and the corresponding expense was recognized as stock-based compensation and included in general and administrative expense in the statement of operations for the year ended June 30, 2020. The following table sets forth the restricted stock grants issued to Messrs. Favata, Grbelja, and Dr. Esaka as compensation for their Board service:
 
 
 
FY2020
 
 
FY2019
 
 
 
Common Shares
 
 
 
 
 
Common Shares
 
 
 
 
Name
 
Granted/Vested
 
 
Expense
 
 
Granted/Vested
 
 
Expense
 
Tom Grbelja
 
 
58,000,000
 
 
 $
43,000
 
 
 
4,416,666
 
 
$
220,000
 
Paul Favata
 
 
20,000,000
 
 
 
6,000
 
 
 
4,275,000
 
 
 
211,500
 
Emmanuel Esaka
 
 
40,000,000
 
 
 
12,000
 
 
 
1,500,000
 
 

675,000
 
 
 
 
118,000,000
 
 
 $
61,000
 
 
 
10,191,666
 
 
$
1,106,500
 
 
 
19
 
 
 
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters.
 
At October 9, 2020, we had 2,127,470,956 shares of our Common Stock outstanding. The following table sets forth information regarding the beneficial ownership of our Common Stock as of October 9, 2020 by:
 
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
 
 
306,812,564
 
 
 
14.42
%
 
 
1
 
 
 
100
%
 
 
58.07
%
Tom Grbelja
 
 
103,666,667
 
 
 
4.87
%
 
 
 
 
 
 
 
 
 
 
2.39
%
Emmanuel Esaka
 
 
44,500,000
 
 
 
2.09
%
 
 
 
 
 
 
 
 
 
 
1.02
%
Paul Favata
 
 
25,333,333
 
 
 
1.19
%
 
 
 
 
 
 
 
 
 
 
0.58
%
Officers and directors as a group
 
 
480,312,564
 
 
 
22.58
%
 
 
1
 
 
 
100
%
 
 
62.07
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
480,312,564
 
 
 
22.58
%
 
 
1
 
 
 
100
%
 
 
62.07
%
 
(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 October 9, 2020. On that date, we had 2,127,470,956 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.
 
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, 2020.
 
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
 
 
      
 
 
 
        
 
 
 
        
 
2012 Employee Stock Compensation Plan
 
 
-
 
 
 
-
 
 
 
-
 
Equity compensation plans not approved by security holders
 
 
-
 
 
 
-
 
 
 
-
 
Total
 
 
-
 
 
 
-
 
 
 
-
 
 
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.
 
 
20
 
 
 
Common Stock
 
Issuances of Common Stock During 2020
 
During fiscal 2020 we issued shares of our common stock as follows:
 
Convertible Notes Payable
 
During the year ended June 30, 2020 the Company issued 954,210,518 shares of its common stock related to the conversion of $333,219 of principal and accrued interest of its convertible notes payable, at an average contract conversion price of $0.0003 per share. The fair value of the shares issued was $1,059,572, resulting in a loss on debt settlement of $593,907.
 
Sale of Restricted Common Stock
 
None.
 
Stock Based Compensation
 
During the year ended June 30, 2020 the Company issued 348,000,000 shares of its $0.0001 par value common stock as compensation to its directors and officers. The shares were valued at $148,000, or $0.00043 per share, based on the share price at the time of the transactions.
 
During the year ended June 30, 2020 the Company issued and vested 199,850,000 shares of its $0.0001 par value common stock to four consultants, as compensation under four separate consulting agreements. The shares were valued at $198,735, or $0.001 per share, based on the share price at the time of the transactions.
 
Issuances of Common Stock During 2019
 
During fiscal 2019 we issued shares of our common stock as follows:
 
Convertible Notes Payable
 
During the year ended June 30, 2019 the Company issued 1,985,327 shares of its common stock related to the conversion of $201,054 of principal and accrued interest of its convertible notes payable, at an average contract conversion price of $0.101 per share.
 
Sale of Restricted Common Stock
 
During the year ended June 30, 2019 the Company issued 2,505,000 shares of its common stock related to the sale of its common stock resulting in proceeds of $250,501, at an average price of $0.10 per share.
 
Acquisition of Threat Surface Solutions Group, LLC
 
During the year ended June 30, 2019 the Company issued 1,538,387 shares of its common stock related to its acquisition of Threat Surface Solutions Group, LLC, valued at $500,000, or an average price of $0.325 per share.
 
Stock Based Compensation
 
During the year ended June 30, 2019 the Company issued 23,427,759 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 $1,901,500, or $0.081 per share, based on the share price at the time of the transactions.
 
During the year ended June 30, 2019 the Company issued and vested 3,233,341 shares of its $0.0001 par value common stock to four consultants, as compensation under four separate consulting agreements. The shares were valued at $174,500, or $0.054 per share, based on the share price at the time of the transactions.
 
 
 
 
21
 
 
 
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
 
2020
 
 
2019
 
Audit Related Fees Paid to Assurance Dimensions, Inc. (1)
 
$
35,500
 
 
$
30,000
 
Tax Fees (2)
 
 
-
 
 
 
-
 
All Other Fees
 
 
-
 
 
 
-
 
 
 
 
 
 
 
 
 
 
Total Fees
 
$
35,500
 
 
$
30,000
 
 
(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.
 
 
22
 
 
 
 
 
 
 
 
 
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, 2020 and 2019
F-3
Consolidated Statements of Operations for each of the two years in the period ended June 30, 2020
F-4
Consolidated Statements of Changes in Stockholders’ Deficit for each of the two years in the period ended June 30, 2020
F-5
Consolidated Statements of Cash Flows for each of the two years in the period ended June 30, 2020
F-6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-7 - F-21
 
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
 
 
 
 
2.2
 
 
 
 
2.3
 
 
 
 
2.4
 
 
 
 
3.1
 
 
 
 
3.2
 
 
 
 
3.3
 
 
 
 
3.4
 
 
 
 
3.5
 
 
 
 
3.6
 
 
 
 
3.7
 
 
 
 
3.8
 
 
 
 
3.9
 
 
 
 
3.10
 
 
 
 
3.11
 
 
 
 
3.12
 
 
 
 
3.13
 
 
 
 
3.14
 
 
 
 
3.15
 
 
 
 
3.16
 
 
 
 
3.17
 
 
 
 
3.18
 
 
 
 
4.1
 
 
 
 
4.2
 
 
 
 
4.3
 
 
 
23
 
 
 
4.4
 
 
 
 
4.5
 
 
 
 
4.6
 
 
 
 
4.7
 
 
 
 
4.8
 
 
 
 
4.9
 
 
 
 
4.10
 
 
 
 
4.11
 
 
 
 
4.12
 
 
 
 
4.13
 
 
 
 
4.14
 
 
 
 
4.15
 
 
 
 
4.16
 
 
 
 
4.17
 
 
 
 
4.18
 
 
 
 
4.19
 
 
 
 
4.20
 
 
 
 
4.21
 
 
 
 
4.22
 
 
 
 
4.23
 
 
 
 
4.24
 
 
 
 
4.25
 
 
 
 
4.26
 
 
 
 
4.27
 
 
 
 
4.28
 
 
 
 
4.29
 
 
 
 
4.30
 
 
 
 
4.31
 
 
 
 
4.32
 
 
 
 
4.33
 
 
 
 
4.34
 
 
 
 
4.35
 
 
 
 
4.36
 
 
 
 
4.37
 
 
 
24
 
 
 
4.38
 
 
 
 
4.39
 
 
 
 
4.40
 
 
 
 
4.41
 
 
 
 
4.42
 
 
 
 
4.43
 
 
 
 
4.44
 
 
 
 
4.45
 
 
 
 
4.46
 
 
 
 
4.47
 
 
 
 
4.48
 
 
 
 
4.49
 
 
 
 
4.50
 
 
 
 
10.1
 
 
 
 
10.2
 
 
 
 
10.3
 
 
 
 
10.4
 
 
 
 
10.5
 
 
 
 
10.6
 
 
 
 
10.7
 
 
 
 
10.8
 
 
 
 
10.9
 
 
 
 
10.10
 
 
 
 
10.11
 
 
 
 
10.12
 
 
 
 
10.13
 
 
 
 
10.14
 
 
 
 
10.15
 
 
 
 
10.16
 
 
 
 
10.17
 
 
 
 
10.18
 
 
 
 
10.19
 
 
 
 
10.20
 
 
 
 
10.21
 
 
 
 
10.22
 
 
 
 
10.23
 
 
 
 
10.24
 
 
 
 
10.25
 
 
 
 
10.26
 
 
 
 
10.27
 
Amendment to License Agreement between MITRE Corporation and Visium Analytics, LLC (39)
 
 
 
14.1
 
 
 
 
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.**
 
 
25
 
 
 
*
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
 
 
 
 
 
 
26
 
 
 
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 9, 2020
 
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 9, 2020
 
 
 
(principal accounting officer)
 
 
 
 
27
 
 
 
 
 
 
 
 
TABLE OF CONTENTS
 
Report of Independent Registered Public Accounting Firm
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-17
 
 
F-1
 
 
 
 
 
 
 
 
 
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 consolidated balance sheets of Visium Technologies, Inc. (the Company) as of June 30, 2020 and 2019, and the related consolidated statements of income, stockholders’ deficit and cash flows for each of the years in the two-year period ended June 30, 2020, and the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2020 and 2019, and the results of its operations and its cash flows for each of the years in the two-year period ended June 30, 2020, in conformity with accounting principles generally accepted in the United States of America.
 
Explanatory Paragraph- Going Concern
The accompanying consolidated 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 for the year ended June 30, 2020 the Company had a net loss of $1,542,450, had net cash used in operating activities of $106,757, and had negative working capital of $3,380,760. 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 consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated 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 consolidated 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 consolidated 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 consolidated 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 consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
 
 
/s/ Assurance Dimensions
 
 
 
We have served as the Company’s auditor since 2017.
 
Margate, Florida
 
October 9, 2020
 
 
 
F-2
 
 
 
 
 
 
 
 
 
VISIUM TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEETS
 
 
 
June 30,
 
 
 
2020
 
 
2019
 
ASSETS
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
Cash
 
$
30,251
 
 
$
18,668
 
 
 
 
 
 
 
 
 
 
Total current assets
 
 
30,251
 
 
 
18,668
 
 
 
 
 
 
 
 
 
 
Total assets
 
$
30,251
 
 
$
18,668
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS’ DEFICIT
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
Accounts payable and accrued expenses
 
$
333,805
 
 
$
213,805
 
Accrued compensation
 
 
652,529
 
 
 
316,529
 
Accrued interest
 
 
677,857
 
 
 
593,838
 
Convertible notes payable to ASC Recap LLC
 
 
147,965
 
 
 
147,965
 
Convertible notes payable, net of discount of $0 and $158,333, respectively
 
 
852,962
 
 
 
917,095
 
Derivative liabilities
 
 
438,553
 
 
 
807,053
 
Notes payable
 
 
205,000
 
 
 
205,000
 
Due to officers
 
 
102,340
 
 
 
62,000
 
Total current liabilities
 
 
3,411,011
 
 
 
3,263,285
 
 
 
 
 
 
 
 
 
 
Commitments and contingencies (Note 10)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stockholders’ deficit:
 
 
 
 
 
 
 
 
Preferred stock
 
 
 
 
 
 
 
 
Series A Convertible Stock ($0.001 par value; 20,000,000 shares authorized, 13,992,340 shares issued and outstanding as of June 30, 2020 and 2019, 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, 2020 and 2019, 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, 2020 and 2019)
 
 
0
 
 
 
0
 
Common stock, $0.0001 par value, 10,000,000,000 shares authorized: 1,544,793,446 shares issued and 1,544,126,787 outstanding at June 30, 2020, and 45,610,716 shares issued and 42,066,269 outstanding at June 30, 2019, respectively (See Note 6)
 
 
154,413
 
 
 
4,207
 
Additional paid in capital
 
 
44,441,085
 
 
 
43,184,984
 
Accumulated deficit
 
 
(47,991,578
)
 
 
(46,449,128
)
Total stockholders’ deficit
 
 
(3,380,760
)
 
 
(3,244,617
)
 
 
 
 
 
 
 
 
 
Total liabilities and stockholders’ deficit
 
$
30,251
 
 
$
18,668
 
 
See accompanying notes to consolidated financial statements.
 
 
F-3
 
 
 
 
 
 
 
 
 
VISIUM TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
 
 
 
FOR THE YEAR ENDED
 
 
 
June 30, 2020
 
 
June 30, 2019
 
 
 
 
 
 
 
 
Net revenues
 
$
-
 
 
$
-
 
 
 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
 
Selling, general and administrative
 
 
917,993
 
 
 
2,721,467
 
Development expense
 
 
35,500 
 
 
 
 
 
Amortization expense
 
 
-
 
 
 
141,970
 
Total operating expenses
 
 
953,493
 
 
 
2,863,437
 
 
 
 
 
 
 
 
 
 
Loss from operations
 
 
(953,493
)
 
 
(2,863,437
)
 
 
 
 
 
 
 
 
 
Other income (expense)
 
 
 
 
 
 
 
 
Gain (loss) on change in fair value of derivative liabilities
 
 
385,367
 
 
 
(183,130
)
Derivative liability expense
 
 
(61,396
)
 
 
(341,423
)
Interest expense
 
 
(323,021
)
 
 
(276,087
)
Gain (loss) on debt settlement/write-offs
 
 
(593,907
 
 
2,303,147
 
Impairment expense
 
 
-
 
 
 
(407,002
)
Other income
 
 
4,000
 
 
 
10,000
 
Total other income (expense)
 
 
(588,957
 
 
1,105,505
 
 
 
 
 
 
 
 
 
 
Net loss
 
$
(1,542,450
)
 
$
(1,757,932
)
 
 
 
 
 
 
 
 
 
Weighted average common shares
 
 
 
 
 
 
 
 
Basic and diluted
 
 
312,626,670
 
 
 
22,992,865
 
 
 
 
 
 
 
 
 
 
Net loss Per Common Share –Basic and Diluted:
 
$
(0.005
)
 
$
(0.076
)
 
See accompanying notes to consolidated financial statements.
 
 
F-4
 
 
 
 
 
 
 
 
 
VISIUM TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
FOR THE YEARS ENDED JUNE 30, 2020 AND 2019
 
 
 
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, 2018
 
 
13,992,340
 
 
$
13,992
 
 
 
1,327,640
 
 
$
1,328
 
 
 
1
 
 
$
0
 
 
 
9,376,442
 
 
$
937
 
 
$
40,160,699
 
 
$
(44,691,196
)
 
$
(4,514,240
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares issued as compensation to directors and officers
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
23,427,772
 
 
 
2,343
 
 
 
1,899,157
 
 
 
 
 
 
 
1,901,500
 
Shares issued for consulting services
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3,233,341
 
 
 
323
 
 
 
174,177
 
 
 
 
 
 
 
174,500
 
Proceeds from sale of common stock
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,505,000
 
 
 
251
 
 
 
250,250
 
 
 
 
 
 
 
250,501
 
Shares issued for conversion of notes payable
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,985,327
 
 
 
199
 
 
 
200,855
 
 
 
 
 
 
 
201,054
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Acquisition of TSSG
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,538,387
 
 
 
154
 
 
 
499,846
 
 
 
 
 
 
 
500,000
 
Net loss for the year ended June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1,757,932
)
 
 
(1,757,932
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at June 30, 2019
 
 
13,992,340
 
 
$
13,992
 
 
 
1,327,640
 
 
$
1,328
 
 
 
1
 
 
$
0
 
 
 
42,066,269
 
 
$
4,207
 
 
$
43,184,984
 
 
$
(46,449,128
)
 
$
(3,244,617
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares issued as compensation to directors and officers
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
348,000,000
 
 
 
34,800
 
 
 
113,200
 
 
 
 
 
 
 
148,000
 
Shares issued for consulting services
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
199,850,000
 
 
 
19,985
 
 
 
178,750
 
 
 
 
 
 
 
198,735
 
Shares issued for conversion of notes payable
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
954,210,518
 
 
 
95,421
 
 
 
964,151
 
 
 
 
 
 
 
1,059,572
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net loss for the year ended June 30, 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1,542,450
)
 
 
(1,542,450
)