Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis should be read in conjunction with our financial statements and the related notes thereto. The management's discussion and analysis contain forward-looking statements, such as statements of our plans, objectives, expectations, and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words "believe," "plan," "intend," "anticipate," "target," "estimate," "expect" and the like, and/or future tense or conditional constructions ("will," "may," "could," "should," etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties, including those under "Risk Factors," which appear elsewhere in this Annual Report, that could cause actual results or events to differ materially from those expressed or implied by such forward-looking statements. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors. Except as required by applicable law, we undertake no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Annual Report.

Overview

In April 2026, Paul R. Taylor was named Chairman and CEO. Prior to that and since February 2018, Mark Lucky served as Chairman and CEO. Mr. Lucky currently serves as CFO. Since February 2018, the Company has focused on creating a cybersecurity and digital risk management company, with a focus on artificial intelligence, network security, threat visualization, and big-data analytics. Visium has developed a proprietary data analytics platform called TruContext™ that provides advanced analytics for cybersecurity situational awareness.

Results of Operations

For the year ended June 30, 2026, selling, general and administrative expenses were $1,364,165 as compared to $1,649,817 for the year ended June 30, 2025, a decrease of $285,652 or approximately 17.3%. The decrease was primarily due to decreases in salaries, legal and professional fees, and stock-based consulting expense. Development expense was $0 for fiscal 2026, compared with $325 for fiscal 2025.

Interest expense increased to $765,013 during fiscal 2026 from $463,424 in fiscal 2025, primarily due to interest on delinquent notes and convertible notes payable and amortization of debt discount.

During the year ended June 30, 2026, the Company recorded a gain on extinguishment of debt of $2,923,004, primarily from the settlement of accrued compensation with common stock, the exchange of debt and former-director advances for Series D Convertible Preferred Stock recorded at its fair value, the separate forgiveness of related accrued interest, and negotiated cash settlements of debt at a discount. The Company also recorded a loss of $199,115 on the terminated ConnexUS AI strategic acquisition initiative and a loss of $10,000 on the write-off of an advance paid in connection with a proposed financing that did not close (see Note 10).

Net income for the year ended June 30, 2026 was $856,102, compared to a net loss of $1,341,979 for the year ended June 30, 2025.

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For the years ended June 30, 2026 and 2025 selling, general and administrative expenses consisted of the following:

		2026				2025				Increase/ (Decrease)				% Change
Accounting expense		$	62,226			$	74,242			$	(12,016	)			(16.2	)%
Consulting fees			125,000				120,000				5,000				4.2	%
Salaries			749,302				816,006				(66,704	)			(8.2	)%
Legal and professional fees			42,000				192,108				(150,108	)			(78.1	)%
Travel expense			700				153				547				357.5	%
Occupancy expense			589				753				(164	)			(21.8	)%
Telephone expense			4,970				5,006				(36	)		(0.7%)
Investor Relations expense			3,448				-				3,448				N/A
Website expense			860				696				164				23.6	%
Stock based consulting expense			10,750				60,860				(50,110	)			(82.3	)%
Stock based compensation			341,400				323,400				18,000				5.6	%
Other			22,920				56,593				(33,673	)			(59.5	)%
		$	364,165			$	1,649,817			$	(285,652	)			(17.3	)%

The decrease in selling, general and administrative expenses during fiscal 2026, when compared with the prior year, is primarily due to a decrease in salaries of $66,704 due to lower headcount, a decrease in legal and professional fees of $150,108, a decrease in stock based consulting expense of $50,110, and a decrease in accounting expense of $12,016, offset by an increase in consulting fees of $5,000 and an increase in stock based compensation of $18,000.

Change in Fair Value of Derivative Liability

		Years Ended
		June 30,								%
		2026				2025				Change
Gain on change in fair value of derivative liabilities		$	271,391			$	33,761				704	%

The gain on change in fair value of derivative liabilities of $271,391 in fiscal 2026 (compared with $33,761 in fiscal 2025) consists of $263,586 from the derecognition, upon conversion or repayment of the related notes, of derivative liabilities initially recognized during the year and $7,805 from the remeasurement of the derivative liability outstanding at June 30, 2025. The initial fair value of the derivative liabilities recognized during the year ($263,586) was recorded as debt discount and amortized to interest expense.

Interest Income

		Years Ended
		June 30,								%
		2026				2025				Change
Interest income		$	-			$	12,767				(100	)%

The Company did not record interest income during the year ended June 30, 2026, compared to $12,767 for the year ended June 30, 2025. The prior year interest income was associated with the Employee Retention Credit (ERC) payment received from the IRS.

Gain (loss) on extinguishment of debt

		Year Ended
		June 30,								%
		2026				2025				Change
Gain on extinguishment of debt		$	2,923,004			$	725,059				303	%

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During the year ended June 30, 2026, the Company recorded a gain on extinguishment of debt of $2,923,004. For the year ended June 30, 2026, the gain on extinguishment of debt was:

Component	Reference	Amount (2026)	Notes
Gain on equitization of accrued salaries and consulting fees	Note 13 / MD&A	$1,248,079	40,000,000 shares issued at $0.0033 FV to settle $2,834,819 of accrued obligations. Third-party portion recognized in earnings; related-party portion to APIC.
Gain on extinguishment - promissory-note principal (Series D exchange, fair value basis)	Note 7 / Note 9	$955,188	Fair value of Series D shares issued ($0.058/share) was $58,812 against $1,014,000 of extinguished promissory-note principal.
Gain on extinguishment - convertible-note principal (Series D exchange, fair value basis)	Note 7 / Note 9	$63,585	Fair value of Series D shares issued ($0.058/share) was $3,915 against $67,500 of extinguished convertible-note principal.
Gain on extinguishment - advances from former directors (Series D exchange, fair value basis)	Note 7 / Note 12	$338,328	Fair value of Series D shares issued ($0.058/share) was $20,831 against $359,159 of advances owed to Messrs. Grbelja and Favata, who had resigned as directors before the settlement date and were not related parties.
Gain on forgiveness of accrued interest payable (Series D exchange)	Note 6	$279,230	Accrued interest extinguished upon issuance of 1,081,500 Series D shares for notes (promissory + convertible).
Loss on write-off of unamortized debt discount (Series D exchange)	Note 6 / Note 9	$(10,013)	Unamortized discount on extinguished promissory notes written off at the April 16, 2026 exchange date.
Gain on extinguishment of note payable (cash settlement at discount)	Note 9 / Note 5	$26,584	Carrying value $176,584 settled for $150,000 cash payment; full release obtained.
Gain on settlement of vendor payables	Note 9	$22,023	Trade payables with carrying value $42,023 settled for $20,000 cash; full releases obtained. Unrelated third-party vendors.
Total Gain on Extinguishment of Debt - Year Ended June 30, 2026		$2,923,004

In the prior year ended June 30, 2025, the Company obtained a legal opinion to extinguish aged debt totaling $725,059. Each of the individual debt instruments were determined to be beyond the statute of limitations and it was determined that the Company has a complete defense to liability related to this debt under the applicable statute of limitations. For the year ended June 30, 2025, the gain on extinguishment of debt was:

Accrued interest expense		$	361,559
Convertible notes payable			208,500
Promissory notes payable			155,000
Gain on extinguishment of debt for the year ended June 30, 2025		$	725,059

Liquidity and Capital Resources

		Balance at June 30,
		2026				2025
Cash		$	22,212			$	60,144
Accounts payable and accrued expenses			(1,536,672	)			(1,472,933	)
Accrued compensation			(89,158	)			(2,556,428	)
Notes, convertible notes, and accrued interest		$	(355,714	)		$	(1,593,484	)

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At June 30, 2026, we had cash of $22,212 and total current assets of $30,252, compared with current liabilities of $1,981,544, resulting in a working capital deficit of $1,951,292. We used $913,888 of cash in operating activities during the year ended June 30, 2026.

Management estimates that the Company requires approximately $50,000 to $70,000 per month to maintain its status as a reporting company and to fund minimal operations. This estimate consists primarily of salaries, which have been only partially paid with the balance accrued, and professional services, including audit, legal, transfer agent, EDGAR and XBRL services, and dues and subscriptions. It assumes the continued partial deferral of salaries; if salaries under the Company's executive employment agreements were paid in full, the Company's monthly cash requirements would be substantially higher. As of the date of this Annual Report, the Company has no committed financing sources. Continued operations are dependent upon the Company's ability to raise additional equity or debt capital on acceptable terms. There can be no assurance that such capital will be available.

Dilution / Liquidity

The following table summarizes the potential dilutive effect of our outstanding convertible preferred stock and convertible notes as of October 13, 2026, the filing date of this Annual Report, on an as-converted basis. The table does not give effect to future anti-dilution adjustments, additional payment-in-kind ("PIK") dividends on the Series D Convertible Preferred Stock, or issuances of blank-check preferred stock, and it is not a weighted-average earnings-per-share denominator.

Security		Shares / Units Outstanding		Conversion / Exercise Terms		Potential Common Shares
Common stock outstanding		1,269,509,667		-		1,269,509,667
Series A and Series B Convertible Preferred Stock		13,992,340 (Series A); 1,327,670 (Series B)		Series A: 1:1; Series B: 1 preferred share : 5 common shares		20,630,690
Series AA Convertible Preferred Stock		4		1:1		4
Series D Convertible Preferred Stock		1,479,859		Fixed conversion price of $0.05 per common share		29,597,180
Accrued but undeclared Series D dividends (if settled in PIK shares)		21,439		20 common shares per Series D share (calculated using unrounded accrued dividends)		428,786
Convertible notes payable (if-converted)		-		Fixed conversion price of $121.50 per share; remaining notes after the September 21, 2026 exchange (see Note 4)		1,019
Subtotal - currently quantifiable potential common shares						1,320,167,346

The convertible notes payable row reflects the convertible notes that remained outstanding after four notes were exchanged for Series D Convertible Preferred Stock on September 21, 2026. All convertible notes outstanding at June 30, 2026 were convertible into approximately 1,783 shares of common stock (see Note 4).

Contingent / Unissued / Non-Convertible Instruments
Series E Convertible Preferred Stock	Authorized; number of shares never fixed; none issued	15,000 common shares per preferred share at $0.05 fixed conversion price	Contingent - if issued in the amount originally contemplated for the terminated ConnexUS AI transaction, would have represented approx. 40% of fully diluted equity
Series G Governing Preferred Stock	0 authorized (previously 100; designation withdrawn September 11, 2026 - see Note 7)	Not convertible (voting rights only: 100,000 votes per share)	None (voting only)
Blank-check preferred stock	Approx. 100,000,100 remaining authorized	Terms to be fixed by the Board of Directors	Unquantifiable
Warrants and stock options	None outstanding	-	-

(1) All capitalization amounts and potential shares in this table are as of October 13, 2026. Potential shares reflect the terms and outstanding securities disclosed in this Annual Report and are not a weighted-average EPS denominator.

The 1,320.2 million potential common-share count above exceeds the 1,269.5 million shares of common stock currently outstanding by approximately 50.7 million shares, or approximately 4.0%, before giving effect to future financings, additional PIK dividends on the Series D Preferred Stock, or anti-dilution adjustments. The Series D conversion price is subject to broad-based weighted-average anti-dilution protection. Any future issuance of common stock or securities convertible into common stock at a price below $0.05 per share will reduce the Series D conversion price and increase the number of common shares issuable upon conversion. The Series AA Convertible Preferred Stock carries voting rights equal to 51% of the total votes on any matter submitted to stockholders, regardless of the number of shares of common stock outstanding. Combined with the 620,000,000 shares of common stock beneficially owned by PT Smart Green Technologies, voting control remains highly concentrated. The Board of Directors retains the authority to fix the number of authorized shares of Series E Convertible Preferred Stock and to issue such shares without further stockholder approval. Management expects that near-term capital raises will be effected primarily through the issuance of equity or equity-linked securities, which would further increase the potential common-share count.

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, 2026. 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.

Going Concern

The accompanying financial statements have been prepared on a going-concern basis. The conditions described above raise substantial doubt about the Company's ability to continue as a going concern for a period of one year from the date of issuance of these financial statements. Management's plans include the continued issuance of 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. The Company has used net cash in its operating activities of $913,888 and $411,177 during the years ended June 30, 2026 and 2025, respectively, and has a working capital deficit of approximately $1.95 million and $5.8 million at June 30 2026 and 2025, 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, and to generate profitable operations in the future. Management plans may continue to provide for its capital requirements by issuing additional equity securities and debt.

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		For the Years Ended
		June 30, 2026				June 30, 2025
Cash flows from operating activities:
Net income		$	856,102			$	(1,341,979	)
Adjustments to reconcile net income to net cash used in operating activities:
Stock based compensation			352,150				384,260
Common stock issued for note conversion fees			3,500				-
Amortization of debt discount			79,963				67,194
Gain on change in fair value of derivative liability			(271,391	)			(33,761	)
Gain on extinguishment of debt			(2,923,004	)			(725,059	)
Changes in operating assets and liabilities:
Accounts payable and accrued expenses			79,963				312,195
Accrued interest payable and default amounts added to note principal			201,260				363,323
Accrued compensation			367,548				570,150
Change in prepaid expenses			(540	)			(7,500	)
Net cash used in operating activities		$	(913,888	)		$	(411,177	)
Cash flows from financing activities:
Advances from officers and directors, net			85,500				95,225
Repurchase of warrants			(4,000	)			-
Repayment of notes payable and convertible notes payable			(400,824	)			(201,560	)
Proceeds from sale of common stock			375,000				-
Proceeds from sale of preferred stock			300,000				-
Proceeds from short term note payable			528,000				569,200
Payment of debt issuance costs			(7,720	)			-
Net cash provided by financing activities		$	875,956			$	462,865
Net increase (decrease) in cash		$	(37,932	)		$	51,688

Cash Flows

Year ended June 30, 2026

During fiscal 2026, the Company's primary source of liquidity was financing activities. Net cash used in operating activities was $913,888, compared with $411,177 in fiscal 2025, an increase of $502,711, or 122.3%, reflecting, among other things, $121,793 of interest paid (compared with $20,016 in fiscal 2025) and $199,115 advanced to ConnexUS AI Inc. in connection with the terminated acquisition (see Note 10). Net cash provided by financing activities was $875,956, compared with $462,865 in fiscal 2025. The Company had no investing activities in either year. Cash decreased by $37,932 in fiscal 2026, compared with an increase of $51,688 in fiscal 2025.

Financing cash flows in fiscal 2026 consisted of $528,000 of net proceeds from the issuance of promissory notes, $375,000 from the sale of 500,000,000 shares of common stock and $300,000 from the sale of three shares of Series AA Convertible Preferred Stock to PT Smart Green Technologies, and $85,500 of net advances from officers and directors, partially offset by $400,824 of repayments of notes payable and convertible notes payable, $7,720 of debt issuance costs and a $4,000 payment to cancel a warrant.

Year ended June 30, 2025

Net cash used in operations in fiscal year 2025 decreased by $77,142 or 15.8% from fiscal year 2024. Cash from financing activities was obtained through the sale of promissory notes that netted the Company $569,200, and advances from officers and directors of $95,225.

Notes Payable and Convertible Notes Payable

At June 30, 2026, the Company had promissory notes payable with a face amount of $144,600 ($122,589, net of $22,011 of unamortized discount), compared with $991,567 at June 30, 2025, and convertible notes payable of $108,009, compared with $183,873 at June 30, 2025. Accrued interest on promissory notes and convertible notes was $16,438 and $108,678, respectively, at June 30, 2026, and all of these obligations are classified as current liabilities. The reduction in debt during fiscal 2026 reflects the April 2026 exchange of $1,014,000 of promissory-note principal and $67,500 of convertible-note principal for Series D Convertible Preferred Stock (with $279,230 of related accrued interest separately forgiven), the conversion of $131,737 of convertible-note principal and $181,798 of accrued interest into common stock, and cash repayments, partially offset by promissory notes with a face amount of $658,500 issued during the year. On September 21, 2026, four convertible notes with $35,000 of principal and $57,211 of accrued interest were exchanged for 35,000 shares of Series D Convertible Preferred Stock. See Notes 4, 5, 6 and 16 to the consolidated financial statements.

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The Company had promissory notes aggregating $122,589, net of unamortized discount of $22,011 (face value of $144,600), at June 30, 2026 and $991,567 at June 30, 2025. During fiscal 2026, the Company extinguished or repaid twenty-nine promissory notes, including notes issued in prior years.

		Balance at				Balance at
		June 30, 2026				June 30, 2025
Notes payable		$	144,600			$	1,017,720
Discount on notes payable			(22,011	)			(26,153	)
Notes payable, net of discount		$	122,589			$	991,567

As of April 16, 2026, the outstanding principal balance of the promissory notes totaling $1,014,000 was exchanged for 1,014,000 shares of Series D Convertible Preferred Stock, resulting in a gain on extinguishment of accrued interest of $254,975 and, together with the fair value measurement of the Series D shares issued, a gain on extinguishment of promissory-note principal of $955,188 (see Note 9). See Note 7 - Stockholders' Deficit for a summary of the terms of the Series D Convertible Preferred Stock, Note 6 - Accrued Interest Payable for the April 2026 issuance, and Note 16 - Subsequent Events for the September 2026 exchange.

Convertible Notes Payable

The Company had $108,009 of convertible notes payable outstanding at June 30, 2026, compared to $183,873 at June 30, 2025. Accrued interest related to convertible notes payable amounted to approximately $108,678 and $247,563 at June 30, 2026 and 2025, respectively. See Note 4 for the debt balances and Note 7 for the potential dilution disclosure.

		Balance at				Balance at
		June 30, 2026				June 30, 2025
Convertible notes payable		$	108,009			$	183,873
Discount on convertible notes			-				-
Convertible notes payable, net of discount		$	108,009			$	183,873

Common Stock Warrants

In April 2026, all outstanding common stock purchase warrants, exercisable for 5,112,426 shares of common stock in the aggregate and held by Talos Victory Fund, LLC and FirstFire Global Opportunities Fund, were cancelled, the Talos warrant for no consideration and the FirstFire warrant for a $4,000 cash payment that was recorded as a reduction of additional paid-in capital. No warrants were outstanding at June 30, 2026 (see Note 7).

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A summary of the status of the Company's outstanding common stock warrants as of June 30, 2026 and changes during the fiscal year ending on that date is as follows:

		Number of				Weighted Average
		Warrants				Exercise Price
Common Stock Warrants
Balance at beginning of year			5,112,426			$	0.0169
Granted			-				-
Exercised			-				-
Acquired and retired			(5,112,426	)			0.0169
Balance at end of period			-			$	-
Warrants exercisable at end of period			-			$	-

Derivative Liability

The Company recognizes derivative financial instruments, including embedded conversion features that require bifurcation, on its balance sheet at fair value. The Company had no derivative liabilities at June 30, 2026, compared with $7,805 at June 30, 2025 (see Note 3).

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.

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Critical Accounting Estimates

The preparation of our consolidated financial statements requires management to make estimates and judgments that affect reported amounts and related disclosures. We consider an estimate critical when it requires assumptions about highly uncertain matters and a reasonably likely change in the estimate could materially affect our financial condition or results of operations. The estimates described below were the most significant in preparing the fiscal 2026 financial statements.

Fair Value of Series D Convertible Preferred Stock and Debt Extinguishments

In April 2026, we issued 1,444,859 shares of Series D Convertible Preferred Stock in debt-for-equity exchanges. Management estimated the fair value at $0.058 per share, or $83,802 in the aggregate, using a conversion-parity methodology based on a $0.0029 eight-trading-day VWAP for the period ended April 14, 2026 (the date the Board adopted the Certificate of Designation; management considers these inputs appropriate for the April 16, 2026 exchange date because the market price of the common stock did not change significantly between April 14 and April 16, 2026) and the initial 20-to-one conversion ratio. The measurement is classified as Level 3 because management assessed the effect of the Series D dividend, liquidation preference, anti-dilution protection, and redemption terms. A $0.001 change in the VWAP input would change the aggregate conversion-parity value by approximately $28,897 and would correspondingly change the gain recognized on the exchanges. See Notes 7, 9 and 15.

Going Concern

Management evaluated whether conditions and events raise substantial doubt about our ability to continue as a going concern for the one-year period following issuance of these financial statements. The evaluation requires judgment about expected operating cash flows, debt maturities, the availability and timing of financing, and the feasibility of management's plans. The accompanying financial statements include the related going-concern disclosure; they do not include adjustments that could result if the Company is unable to continue as a going concern.

Deferred Tax Assets and Valuation Allowance

Management records deferred tax assets for deductible temporary differences and tax attributes and assesses whether a valuation allowance is needed based on all available evidence. Because of the Company's cumulative losses, unfiled historical tax returns, and uncertainty as to the realizability and potential limitation of tax attributes, the Company recorded a full valuation allowance against its net deferred tax assets. See Note 11.

Debt, Convertible Instruments and Derivatives

Management evaluates the contractual terms of debt and equity-linked instruments to determine classification, the need for derivative bifurcation, and measurement of discounts and issuance costs. These conclusions require judgment about conversion, anti-dilution, redemption and settlement provisions. See Notes 3, 4, 5 and 7.

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