NOTES
TO UNAUDITED FINANCIAL STATEMENTS
MARCH
31, 2018
NOTE
1: ORGANIZATION, DESCRIPTION OF BUSINESS, GOING CONCERN AND BASIS OF PRESENTATION
Organization
Visium
Technologies, Inc.
,
or the Company, is currently a Florida corporation that was originally incorporated in Nevada in October
1987. It was formerly known as Jaguar Investments, Inc. between October 1987 and May 2003, Power2Ship, Inc. between May 2003 and
November 2006, Fittipaldi Logistics, Inc. between November 2006 and December 2007, and as NuState Energy Holdings, Inc. between
December 2007 and March 5, 2018.
The
company is focused on digital risk management, cybersecurity, and technology services for network physical security, the Cloud
and the Internet of Things (“IOT”). We have entered into a collaboration agreement with Waverley Labs, LLC to develop
a digital risk reduction capability based on Waverly’s leading software defined perimeter technology which we plan on bringing
to market in early fiscal 2019.
The
Company named Mark Lucky as its Chief Executive Officer in February 2018 to provide strategic expertise in pursuing its business
plans.
Going
Concern
The accompanying financial statements have
been prepared on a going concern basis. For the nine months ended March 31, 2018 we had a net loss of $697,526, had net cash
used in operating activities of $44,874, and had negative working capital of approximately $4,492,793 million These matters
raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the
date of this filing. The Company’s ability to continue as a going concern is dependent upon its ability to obtain the
necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due,
to fund possible future acquisitions, and to generate profitable operations in the future. Management plans to provide for the
Company’s capital requirements by continuing to issue additional equity and debt securities. The outcome of these matters
cannot be predicted at this time and there are no assurances that, if achieved, the Company will have sufficient funds to execute
its business plan or generate positive operating results. The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
Management
is seeking to identify an operating company and engage in a merger or business combination of some kind or acquire assets or shares
of an entity actively engaged in a business that generates sustained revenues. We are considering several potential acquisitions
and are investigating various candidates to determine whether they would have the potential to add value to us for the benefit
of our stockholders.
We
do not intend to restrict our consideration to any particular business or industry segment, and we may consider, among other businesses,
finance, brokerage, insurance, transportation, communications, services, natural resources, manufacturing or technology. Because
we have limited resources, the scope and number of suitable candidates to merge with is relatively limited. Because we may participate
in a business opportunity with a newly formed firm, a firm that is in the development stage, or a firm that is entering a new
phase of growth, we may incur further risk due to the inability of the target’s management to have proven its abilities
or effectiveness, or the lack of an established market for the target’s products or services, or the inability to reach
profitability in the next few years.
Any
business combination or transaction will likely result in a significant issuance of shares and substantial dilution to our present
stockholders. As it is expected that the closing of such a transaction will result in a change in control, such transaction is
expected to be accounted for as a reverse merger, with the operating company being considered the legal acquiree and accounting
acquirer, and we would be considered the legal acquirer and the accounting acquiree. As a result, at and subsequent to closing
of any such transaction, the financial statements of the operating company would become our financial statements for all periods
presented.
Basis
of Presentation
The
unaudited interim financial information furnished herein reflects all adjustments, consisting only of normal recurring items,
which in the opinion of management are necessary to fairly state Visium Technologies, Inc.’s (the “Company”
or “we”, “us” or “our”) financial position, results of operations and cash flows for the dates
and periods presented and to make such information not misleading. Certain information and footnote disclosures normally included
in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America
have been omitted pursuant to rules and regulations of the Securities and Exchange Commission (“SEC”), nevertheless,
management of the Company believes that the disclosures herein are adequate to make the information presented not misleading.
These
unaudited financial statements should be read in conjunction with the Company’s audited financial statements for the year
ended June 30, 2017, contained in the Company’s Annual Report on Form 10-K filed with the SEC on September 28, 2017. The
results of operations for the nine months ended March 31, 2018, are not necessarily indicative of results to be expected for any
other interim period or the fiscal year ending June 30, 2018.
NOTE
2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use
of Estimates
The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements and the reporting amounts of revenues and expenses
during the reported period. Actual results will differ from those estimates. Included in these estimates are assumptions used
in Black-Scholes valuation methods, such as expected volatility, risk-free interest rate, and expected dividend rate.
Cash
and Cash Equivalents
The
Company considers all highly liquid, temporary, cash equivalents with an original maturity of three months or less when purchased,
to be cash equivalents. The Company had no cash equivalents during the nine months ended March 31, 2018 and 2017.
Concentration
of Credit Risks
The
Company is subject to a concentration of credit risk from cash.
The
Company’s cash account is held at a financial institution and is insured by the Federal Deposit Insurance Corporation, or
FDIC, up to $250,000. During the nine months ended March 31, 2018 and 2017, the Company had not reached a bank balance exceeding
the FDIC insurance limit.
Derivative
Liabilities
The
Company assessed the potential classification of its derivative financial instruments as of March 31, 2018 and June 30, 2017,
which consist of convertible instruments and rights to shares of the Company’s common stock and determined that such derivatives
meet the criteria for liability classification under ASC 815.
ASC
815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments
and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a)
the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic
characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument
and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with
changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative
instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception
to this rule when the host instrument is deemed to be conventional, as described.
During
the year ended June 30, 2017, the Company determined that there was no active market for the Company’s common stock, and
because of this lack of liquidity and market value, there was no derivative liability associated with these convertible notes.
The Company uses judgment in determining the fair value of derivative liabilities at the date of issuance and at every balance
sheet thereafter and in determining which valuation method is most appropriate for the instrument (e.g., Black-Scholes-Merton),
the expected volatility, the implied risk-free interest rate, as well as the expected dividend rate, if any. The derivate liability
that had previously been recognized was recorded as a gain through the change in fair value of derivative liability on the statement
of operations as of June 30, 2017, and there was no derivative liability recorded as of March 31, 2018.
VISIUM
TECHNOLOGIES, INC.
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
MARCH
31, 2018
NOTE
2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
Fair
Value of Financial Instruments
The
Company accounts, for assets and liabilities measured at fair value on a recurring basis, in accordance with ASC Topic 820, Fair
Value Measurements and Disclosures, or ASC 820. ASC 820 establishes a common definition for fair value to be applied to existing
generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring
fair value, and expands disclosure about such fair value measurements.
ASC
820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize
the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:
|
Level
1:
|
Observable
inputs such as quoted market prices in active markets for identical assets or liabilities.
|
|
|
|
|
Level
2:
|
Observable
market-based inputs or unobservable inputs that are corroborated by market data.
|
|
|
|
|
Level
3:
|
Unobservable
inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.
|
Additional
Disclosures Regarding Fair Value Measurements
The
carrying value of cash, accounts payable and accrued expenses, accrued compensation, notes and convertible promissory notes payable
approximate their fair value due to the short maturity of these items.
Convertible
Instruments
The
Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated
from their host instruments) in accordance with ASC 470-20, Debt with Conversion and Other Options. Accordingly, the Company records,
when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based
upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and
the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the
related debt to their earliest date of redemption. The Company also records deemed dividends for the intrinsic value of conversion
options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment
date of the note transaction and the effective conversion price embedded in the note.
ASC
815-40, Contracts in Entity’s own Equity, generally provides that, among other things, if an event is not within the entity’s
control, such contract could require net cash settlement and shall be classified as an asset or a liability.
Income
Taxes
The
Company accounts for income taxes pursuant to the provisions of ASC 740-10, “Accounting for Income Taxes,” which requires,
among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires
the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between
the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred
tax assets for which management believes it is more likely than not that the net deferred asset will not be realized.
VISIUM
TECHNOLOGIES, INC.
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
MARCH
31, 2018
NOTE
2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
Income
Taxes, continued
The
Company follows the provisions of ASC 740-10, “Accounting for Uncertain Income Tax Positions”. When tax returns are
filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others
are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained.
In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the
period during which, based on all available evidence, management believes it is more likely than not that the position will be
sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset
or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the
largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing
authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above
should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest
and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all
highly certain of being upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits.
The
Company has adopted ASC 740-10-25,
“
Definition of Settlement”
,
which provides guidance on how an entity
should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits
and provides that a tax position can be effectively settled upon the completion of an examination by a taxing authority without
being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax
benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical
merits and the statute of limitations remains open. As of March 31, 2018, the Company had not filed tax returns for the tax years
ending June 30, 2008 through 2017 and such returns, when filed, potentially will be subject to audit by the taxing authorities
for a minimum of three years beyond the filing date under the three-year statute of limitations. The Company has not accrued any
potential tax penalties associated with not filing these tax returns. Due to recurring losses, management believes such potential
tax penalties, in any, would not be material in amount.
Share-Based
Payment
The
Company accounts for stock-based compensation in accordance with ASC Topic 718, Compensation-Stock Compensation, or ASC 718. Under
the fair value recognition provisions of this topic, stock-based compensation cost is measured at the grant date based on the
fair value of the award and is recognized as an expense on a straight-line basis over the requisite service period, which is the
vesting period.
The
Company has elected to use the Black-Scholes-Merton, or BSM, option-pricing model to estimate the fair value of its options, which
incorporates various subjective assumptions including volatility, risk-free interest rate, expected life, and dividend yield to
calculate the fair value of stock option awards. Compensation expense recognized in the statements of operations is based on awards
ultimately expected to vest and reflects estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant
and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.
Recent
Accounting Pronouncements
Recent
accounting pronouncements have been issued but deemed by management to be outside the scope of relevance to the Company.
VISIUM
TECHNOLOGIES, INC.
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
MARCH
31, 2018
NOTE
2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
Basic
and Diluted Earnings Per Share
The Company effected a 3,000 for 1 reverse
stock split on March 5, 2018. Basic earnings per share are calculated by dividing income available to stockholders by the weighted-average
number of shares of Common Stock outstanding during each period. Diluted earnings per share are computed using the weighted average
number of shares of Common Stock and dilutive Common Stock share equivalents outstanding during the period. Dilutive Common Stock
share equivalents consist of shares issuable upon the exercise of in the money stock options and warrants (calculated using
the modified-treasury stock method) and the conversion of convertible notes payable and convertible preferred stock. Potential
common shares includable in the computation of fully-diluted per-share results are not presented in the financial statements as
their affect would be anti-dilutive.
VISIUM
TECHNOLOGIES, INC.
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
MARCH
31, 2018
NOTE
2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
Basic
and Diluted Earnings Per Share
The
weighted-average potentially dilutive common share equivalents outstanding at March 31, 2018 and 2017 are as follows:
|
|
|
2018
|
|
|
2017
|
|
|
Series A Convertible Preferred Stock
|
|
|
113
|
|
|
|
113
|
|
|
Series AA Convertible Preferred Stock
|
|
|
1
|
|
|
|
-
|
|
|
Series B Convertible Preferred Stock
|
|
|
4
|
|
|
|
4
|
|
|
Convertible notes payable
|
|
|
4,705,698
|
|
|
|
357,780
|
|
|
Total
|
|
|
4,705,816
|
|
|
|
357,897
|
|
NOTE
3: DERIVATIVE LIABILITY
The
Company accounts for the embedded conversion features included in its convertible instruments as derivative liabilities. The aggregate
fair value of derivative liabilities at March 31, 2018 and June 30, 2017 amounted to $0 and $0, respectively. For the nine months
ended March 31, 2018 and 2017, the Company recorded a gain related to the change in fair value of the derivative liability amounting
to $0 and a loss of $26,699, respectively. Management had a change in accounting estimate during the year ended June 30, 2017.
The Company determined that all of the underlying convertible notes were past due and in default, and that there was no active
market for the Company’s common stock. Because of this lack of liquidity and market value, there was no derivative liability
associated with these convertible notes. At each measurement date, the fair value of the embedded conversion features was based
on the Black-Scholes-Merton method using the following assumptions:
|
|
|
Nine Months
Ended March 31,
|
|
|
|
|
2018
|
|
|
2017
|
|
|
Expected
Exercise price
|
|
|
N/A
|
|
|
$
|
0.001875
|
|
|
Expected
Market price
|
|
|
N/A
|
|
|
$
|
0.0042
|
|
|
Volatility
|
|
|
N/A
|
|
|
|
488
|
%
|
|
Risk-free interest
|
|
|
N/A
|
|
|
|
0.13
|
%
|
|
Terms
|
|
|
N/A
|
|
|
|
90 days
|
|
|
Expected dividend rate
|
|
|
|
|
|
|
0
|
%
|
NOTE
4: ACCRUED INTEREST PAYABLE
Changes
in accrued interest payable during the nine months ended March 31, 2018 and 2017 are as follows:
|
Accrued interest payable at June 30, 2017
|
|
$
|
1,493,014
|
|
|
Accrued interest expense forgiven as part of debt settlement
|
|
|
(46,632
|
)
|
|
Interest expense for the nine months ended March 31, 2018, excluding amortization of debt discount of $27,083
|
|
|
195,117
|
|
|
Accrued interest payable at March 31, 2018
|
|
$
|
1,641,499
|
|
VISIUM
TECHNOLOGIES, INC.
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
MARCH
31, 2018
NOTE
5: CONVERTIBLE NOTES PAYABLE AND NOTE PAYABLE
Convertible
Notes Payable
At
March 31, 2018 and June 30, 2017 convertible debentures consisted of the following:
|
|
|
March 31, 2018
|
|
|
June 30, 2017
|
|
|
Convertible notes payable
|
|
$
|
1,707,484
|
|
|
$
|
2,201,914
|
|
|
Unamortized debt discount
|
|
|
-
|
|
|
|
(27,083
|
)
|
|
Total
|
|
$
|
1,707,484
|
|
|
$
|
2,174,831
|
|
The Company had convertible promissory notes
aggregating approximately $1,707,000 million and $2,180,000 million at March 31, 2018 and June 30, 2017, respectively. The accrued
interest amounted to approximately $1,199,500 and $1,035,000 at March 31, 2018 and June 30, 2017, respectively. 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 from $0.15 to $3.75 per share, at the holders’ option.
At March 31, 2018, all of the convertible promissory notes had matured, are in default, and remain unpaid.
Changes
in convertible notes payable during the nine months ended March 31, 2018 was as follows:
|
Convertible notes payable @ 06/30/2017
|
|
$
|
2,201,914
|
|
|
Convertible Notes payable issued for cash
|
|
|
37,500
|
|
|
Exchange of notes payable for common stock
|
|
|
(51,930
|
)
|
|
Forgiveness of principal on convertible note due to former
officer (included in additional paid-in capital)
|
|
|
(480,000
|
)
|
|
Balance of convertible notes payable @ 03/31/2018
|
|
$
|
1,707,484
|
|
For
the nine months ended March 31, 2018, the following summarizes the conversion of debt for common shares:
|
Date
|
|
|
Name
|
|
Shares Issued
|
|
|
Amount Converted
|
|
|
Conversion Price Per Share
|
|
|
|
07/10/17
|
|
|
GOLD COAST CAPITAL LLC
|
|
|
60,000
|
|
|
$
|
9,000
|
|
|
$
|
0.15
|
|
|
|
07/10/17
|
|
|
ENTERPRISE SOLUTIONS LLC
|
|
|
29,767
|
|
|
|
8,930
|
|
|
$
|
0.30
|
|
|
|
07/31/17
|
|
|
ENTERPRISE SOLUTIONS LLC
|
|
|
33,333
|
|
|
|
5,000
|
|
|
$
|
0.15
|
|
|
|
08/08/17
|
|
|
ENTERPRISE SOLUTIONS LLC
|
|
|
33,333
|
|
|
|
10,000
|
|
|
$
|
0.30
|
|
|
|
08/28/17
|
|
|
ENTERPRISE SOLUTIONS LLC
|
|
|
33,333
|
|
|
|
5,000
|
|
|
$
|
0.15
|
|
|
|
09/06/17
|
|
|
ENTERPRISE SOLUTIONS LLC
|
|
|
14,000
|
|
|
|
2,100
|
|
|
$
|
0.15
|
|
|
|
10/09/17
|
|
|
ROYAL PALM CONSULTING SERVICES LLC
|
|
|
39,667
|
|
|
|
5,950
|
|
|
$
|
0.15
|
|
|
|
10/03/17
|
|
|
ROYAL PALM CONSULTING SERVICES LLC
|
|
|
39,667
|
|
|
|
5,950
|
|
|
$
|
0.15
|
|
|
|
|
|
|
Total
|
|
|
283,100
|
|
|
$
|
51,930
|
|
|
$
|
0.18
|
|
Transactions
During
the nine months ended March 31, 2018 we issued convertible notes to three investors, totaling $37,500. The notes bear interest
at 12% and have a term of sixty days.
Notes
Payable
The
Company had promissory notes aggregating $270,241 at March 31, 2018 and June 30, 2017, respectively. The related accrued interest
amounted to approximately $234,000 and $222,400 at March 31, 2018 and June 30, 2017, respectively. The notes payable bear interest
at rates ranging from 8% to 16% per annum which is payable monthly. All promissory notes outstanding as of March 31, 2018 have
matured, are in default, and remain unpaid.
VISIUM
TECHNOLOGIES, INC.
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
MARCH
31, 2018
NOTE
6: STOCKHOLDERS’ DEFICIT
Reverse
Stock Split
In March of 2018 the Company effectuated a
3,000 to 1 reverse stock split. All share and per share amounts in these financial statements and the notes thereto have
been adjusted for all periods presented to reflect this change.
Common
Stock
At
March 31, 2018, the Company had 10,000,000,000 authorized common shares.
During
the nine months ended March 31, 2018 the Company issued 283,100 shares of its common stock related to the conversion of $51,930
of principal of its convertible notes payable, at an average contract conversion price of $0.18 per share.
During
the quarter ended March 31, 2018 the Company issued a restricted share award of 166,667 shares of its $0.0001 par value common
stock to its new CEO, Mark Lucky, as compensation. The shares were valued at $50,000, or $0.30 per share on a post reverse split
basis. On a pre- reverse split basis, the shares were issued at par value as there was no active market in our common stock.
During
the quarter ended March 31, 2018 the Company issued a restricted share award of 166,667 shares of its $0.0001 par value common
stock to its new board member, Tom Grbelja, as compensation for services rendered. The shares were valued at $50,000, or $0.30
per share on a post reverse split basis. On a pre- reverse split basis, the shares were issued at par value as there was no active
market in our common stock
During
the quarter ended March 31, 2018 the Company issued a restricted share award of 83,334 shares of its $0.0001 par value common
stock to its new board member, Paul Favata, as compensation for services rendered. The shares were valued at $25,000, or $0.30
per share on a post reverse split basis. On a pre- reverse split basis, the shares were issued at par value as there was no active
market in our common stock
During
the quarter ended March 31, 2018 the Company issued 191,669 shares of its $0.0001 par value common stock to four consultants,
as compensation under four separate consulting agreements. The shares were valued at $57,500, or $0.30 per share on a post reverse
split basis. On a pre- reverse split basis, the shares were issued at par value as there was no active market in our common stock
During
the quarter ended March 31, 2018 the Company issued 95,238 shares of its $0.0001 par value common stock to satisfy a liability
owed to a Company controlled by our CEO. The shares were valued at $60,000, or $0.63 per share on a post reverse split basis,
the weighted average market price for the ten preceding days from the date that the shares were issued.
Preferred
Stock
During
the three months ended March 31, 2018, the Company authorized and issued one share of Series AA convertible preferred stock
which provides for the holder to vote on all matters as a class with the holders of Common Stock and each share of Series AA Convertible
Preferred Stock shall be entitled to 51% of the common votes on any matters requiring a shareholder vote of the Company. Each
one share of Series AA Convertible Preferred Stock is convertible into one (1) share of Common Stock. Mark Lucky, our CEO,
is the holder of the one share of Series AA Convertible Preferred Stock.
Series A and B issued and outstanding shares
of the Company’s convertible preferred stock have a par value of $0.001. All classes rank(ed) prior to any class
or series of the Company’s common stock as to the distribution of assets upon liquidation, dissolution or winding up of
the Company or as to the payment of dividends. All preferred stock shall have no voting rights except if the subject of such vote
would reduce the amount payable to the holders of preferred stock upon liquidation or dissolution of the company and cancel and
modify the conversion rights of the holders of preferred stock as defined in the certificate of designations of the respective
series of preferred stock.
Series A Convertible Preferred Stock
The
Series A Preferred Stock has a stated value of $750.00 per share. Each one share of Series A Preferred Stock is convertible into
one (1) share of Common Stock. In the event the Common Stock price per share is lower than $0.10 (ten cents) per share then the
Conversion shall be set at $0.035 per share. The Common Stock shares are governed by Lock-Up/Leak-Out Agreements.
Series B Convertible Preferred Stock
Prior
to cancellation, the Series B Preferred Stock had a stated value of $5.00 per share. Each share of Series B Preferred Stock was
convertible into 20 shares of the Company’s common stock. In addition, the holders of the preferred stock were entitled
to receive annual cumulative dividends of 10% payable in cash or shares of the Company’s common stock, at the Company’s
option. At March 31, 2018, the Company had not declared the payment of cumulative dividends aggregating approximately $673,200.
Thirty
million (30,000,000) shares of preferred stock were designated as a new Series B Preferred stock in April, 2016. This new Series
B Preferred Stock has a $0.001 par value, and each 300 shares is convertible into one share of the Company’s common stock,
with a stated value of $375 per share.
VISIUM
TECHNOLOGIES, INC.
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
MARCH
31, 2018
NOTE
7: RELATED PARTY TRANSACTIONS
Equity
transactions with related parties are described in Note 6.
From time to time we have borrowed operating
funds from Mr. Mark Lucky, our Chief Executive Officer and from certain Directors, for working capital. The advances were payable
upon demand and were interest free. During the three months ended March 31, 2018 Mr. Lucky advanced $26,000, and Mr. Grbelja advanced
$20,000 to the Company. These amounts remain outstanding as of March 31, 2018.
NOTE
8: SUBSEQUENT EVENTS
On April 24, 2018 the Company was notified
by FINRA that its Corporate Actions to change the Company name from NuState Energy Holdings, Inc. to Visium Technologies, Inc
had been approved; that the change of the ticker symbol on the Company’s common stock from NSEH to VISM had been approved;
and that the Company’s 1:3000 reverse split of its $0.0001 par value common stock had been approved. The Company amended
its Articles of Incorporation in the State of Florida on March 5, 2018, to effect these changes.