The following discussion of our financial condition and results of operations
should be read in conjunction with the financial statements and related notes
included elsewhere in this report. Certain statements in this discussion and
elsewhere in this report constitute forward-looking statements. See ''Cautionary
Statement Regarding Forward Looking Information'' elsewhere in this report.
Because this discussion involves risk and uncertainties, our actual results may
differ materially from those anticipated in these forward-looking statements.
Overview
Visium Technologies, Inc. was incorporated in Nevada as Jaguar Investments, Inc.
during October 1987. During March 2003, a wholly owned subsidiary of the Company
merged with Freight Rate, Inc., a development stage company in the logistics
software business. During May 2003, the Company changed its name to Power2Ship,
Inc. During October 2006, the Company merged with a newly formed, wholly owned
subsidiary, Fittipaldi Logistics, Inc., a Nevada corporation, with the Company
surviving but its name changed to Fittipaldi Logistics, Inc. effective November
2006. During December 2007, the Company merged with a newly formed, wholly owned
subsidiary, NuState Energy Holdings, Inc., a Nevada corporation, with the
Company surviving but renamed NuState Energy Holdings, Inc. effective December
2007. In March 2018, the Company brought in a new management team and changed
its name to Visium Technologies, Inc.
Visium is a provider of cyber security visualization, big data analytics, and
automation that operates in the traditional cyber security space, as well as in
the 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 is a
military-grade highly scalable big data analytics tool for Cybersecurity, based
on graph database technology. The development of the technology was sponsored
by, and is currently in use by US Army Cyber Command. CyGraph provides advanced
analytics for cybersecurity situational awareness that is scalable, flexible,
and comprehensive. Visium has completed significant proprietary product
development efforts to commercialize CyGraph whch the Company as rebranded as
TruContext.
Plan of Operation
Visium operates in the traditional cyber security space, and provides solutions,
tools and services related to Security information and event management (SIEM).
Our TruContext technology provides visualization, advanced cyber monitoring
intelligence, data modeling, analytics and automation to help reduce risk,
simplify cyber security and deliver better security outcomes. Visium currently
plans to generate revenue in three primary ways -
? through a virtual appliance model, primarily targeted to the Federal
government, charging a seat license
? through a SaaS model, charging a recurring monthly license fee for
TruContext; and
? through professional services to support and deliver cybersecurity solutions
and services to its customers
The Company has developed integration partnerships with larger established
technology companies and is using these partnerships as part of its go-to-market
strategy. In addition, the Company has partnered with value-added resellers that
sell to the federal government and commercial markets. The Company is focused on
digital risk management, cybersecurity solutions, and technology services for
network physical security, the Cloud, and mobility solutions. We solve
mission-critical problems.
Employees
As of September 30, 2021, we had eight (8) full time employees.
Third-Party Service Providers
We are heavily reliant on our technology and infrastructure to provide our
products and services to our customers. For example, we host many of our
products using third-party data center facilities, and we do not control the
operation of these facilities. In addition, we rely on certain technology that
we license from third parties, including third-party commercial software and
open source software, which is used with certain of our solutions.
Governmental Regulation
We collect, use, store or disclose an increasingly high volume, variety, and
velocity of personal information, including from employees and customers, in
connection with the operation of our business. The personal information we
process is subject to an increasing number of federal, state, local, and foreign
laws regarding privacy and data security.
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Competition
The markets for our solutions are highly competitive, and we expect both the
requirements and pricing competition to increase, particularly given the
increasingly sophisticated attacks, changing customer preferences and
requirements, current economic pressures, and market consolidation. Competitive
pressures in these markets may result in price reductions, reduced margins, loss
of market share and inability to gain market share, and a decline in sales, any
one of which could seriously impact our business, financial condition, results
of operations, and cash flows. We may face competition due to changes in the
manner that organizations utilize IT assets and the security solutions applied
to them, such as the provision of privileged account security functionalities as
part of public cloud providers' infrastructure offerings, or cloud-based
identity management solutions. Limited IT budgets may also result in competition
with providers of other advanced threat protection solutions such as McAfee,
LLC, Palo Alto Networks, Splunk Inc., and 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.
Available Information
All reports of the Company filed with the SEC are available free of charge
through the SEC's website at www.sec.gov. In addition, the public may read and
copy materials filed by the Company at the SEC's Public Reference Room located
at 100 F Street, N.E., Washington, D.C. 20549. The public may also obtain
additional information on the operation of the Public Reference Room by calling
the Commission at 1-800-SEC-0330.
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".
VISIUM TECHNOLOGIES, INC.
RESULTS OF OPERATIONS
Discussion of Results for Three Month Period Ended September 30, 2021 and 2020
Increase/ Increase/
Three-month period ended (Decrease) (Decrease)
September 30, in $ 2021 in % 2021
2021 2020 vs 2020 vs 2020
Operating expenses:
Selling, general and
administrative $ 1,200,030 $ 193,196 $ 1,024,335 530.2 %
Development expense 110,413 95,000 15,413 16.2 %
Total operating expenses 1,310,443 288,196 1,039,748 360.8 %
Operating loss (1,310,443 ) (288,196 ) 1,039,748 360.8 %
Other expense:
Gain (loss) on change in
fair value of derivative
liabilities (18,908 ) 124,332 (143,240 ) (115.2 )%
Loss on extinguishment of
debt - (154,901 ) (114,487 ) 100.0 %
Interest expense (486,464 ) (26,908 ) (459,556 ) 1,707.9 %
(505,372 ) (57,477 (447,895 ) (779.3 )%
Net loss $ (1,815,815 ) (345,673 ) $ (1,487,643 ) 430.4 %
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Selling, General, and Administrative Expenses
For the three months ended September 30, 2021, selling, general and
administrative expenses were $1,200,030as compared to $193,196 for the three
months ended September 30, 2020, an increase of $1,024,335 or approximately
530%. For the three months ended September 30, 2021 and 2020 selling, general
and administrative expenses consisted of the following:
Three Months Ended
September 30, Increase/
2021 2020 Decrease % Change
Accounting expense $ 23,071 $ 22,950 $ 121 0.5 %
Consulting fees 7,500 - 7,500 100.0 %
Salaries 158,981 84,000 74,981 89.3 %
Legal and professional fees 267,530 10,500 257,030 2,447.9 %
Occupancy expense 567 - 567 100.0 %
Telephone expense 1,149 900 249 27.7 %
Website expense 6,498 651 5,847 898.2 %
Marketing Expense 1,156 - 1,156 100.0 %
Stock based consulting expense 367,273 27,000 340,273 1,260.3 %
Stock based compensation 345,000 45,000 300,000 1,185.0 %
Other 21,305 2,195 19,110 870.6 %
$ 1,200,030 $ 193,196 $ 1,006,834 521.1 %
The increase in selling, general and administrative expenses during fiscal Q1 of
2021, when compared with the prior year, is primarily due to an increase in
stock-based consulting expense of $340,273, stock-based compensation expense of
$300,000, legal and professional expenses of $257,030, higher salaries expense
of $68,030.
We believe that our selling, general, and administrative expenses will decrease
as the stock based consulting and compensation expenses and legal and
professional expenses are not recurring expenses. Other expenses may increase as
we increase our business activity over the remainder of fiscal 2022.
Development Expense
Three-Months Ended
September 30, %
2021 2020 Change
Development expense $ 110,413 $ 95,000 16.2 %
Development expense represents the expense of further enhancing and
commercializing CyGraph. We believe that our development expense will continue
at a lower expense rate for the remainder of fiscal 2021.
Interest Expense
Three-Months Ended
September 30, %
2021 2020 Change
Interest expense $ 486,464 $ 26,908 $ 1,707.9 %
Interest expense represents stated interest of notes and convertible notes
payable, along with the amortization of debt discount. The increase in interest
expense during the three-month period ended September 30, 2021 is primarily due
to the acceleration of interest expense related to the repayment of outstanding
notes payable held by Labrys Fund, LP. In addition, there was an increase in
discount amortization expense primarily related to the repayment outstanding
notes payable of $410,922.
Liquidity and Capital Resources
Balance at
September 30, June 30,
2021 2021
Cash $ 999,769 $ 125,166
Accounts payable and accrued expenses 443,032 425,804
Accrued compensation 732,529 672,529
Notes, convertible notes, and accrued interest
payable $ 1,268,523 $ 1,753,057
At September 30, 2021 and June 30, 2021, our total assets consisted of cash and
prepaid expenses.
We do not have any material commitments for capital expenditures.
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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 cannot ascertain that we have sufficient funds from operations to fund our
ongoing operating requirements through June 30, 2022. 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 a mix of equity and debt 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. In
the long-term, we anticipate we will need to raise a substantial amount of
capital to complete an acquisition. We are unable to quantify the resources we
will need to successfully complete an acquisition. If these funds cannot be
obtained, we may not be able to consummate an acquisition or merger, and our
business may fail as a result.
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
approximately $22,815 and $19,110 during the thee-month periods ended September
30, 2021 and 2020, respectively, and has a working capital deficit of
approximately $3.4 million and $3.4 million at September 30, 2021 and June 30,
2021, 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.
Three months ended September 30, 2021
Net cash used in operations during the three months ended September 30, 2021
increased by $487,580 or 2,137% over the same period during fiscal year 2020.
Capital Raising Transactions
In September 2021 the Company entered into two securities purchase agreements
(the "Purchase Agreements") with a single institutional investor (the
"Purchaser") resulting in the raise of $1,500,000 in gross proceeds to the
Company. Pursuant to the terms of the Purchase Agreements, the Company agreed to
sell, in a registered director offering, an aggregate of 300,000,000 shares (the
"Shares") of the Company's common stock, par value $0.0001 per share (the
"Common Stock") at a purchase price of $0.005 per Share (the "Offering"). The
Offerings closed on September 15, 2021 and September 27, 2021, respectively.
Other outstanding obligations at September 30, 2021
Convertible Notes Payable
The Company had convertible promissory notes aggregating $317,431 outstanding at
September 30, 2021. The accrued interest amounted to approximately $163,168 as
of September 30, 2021. The Convertible Notes Payable bear interest at rates
ranging between 0% and 18% per annum. Interest is generally payable monthly. The
Convertible Notes Payable are generally convertible at rates ranging between
$0.00483 and $22,500 per share, at the holders' option. At September 30, 2021,
approximately $317,000 of the promissory notes have matured.
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.
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Notes Payable
The Company had promissory notes aggregating $430,000 at September 30, 2021. The
related accrued interest amounted to approximately $213,000 at September 30,
2021. The Notes Payable bear interest at a rate of 16% per annum. Interest is
payable monthly. All promissory notes have matured as of September 30, 2021.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
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