SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported): December 30, 2018
VISIUM TECHNOLOGIES, INC.
(Exact name of Registrant as specified in its charter)
(State or other jurisdiction
11325 Random Hills Road, Suite 360
Fairfax, Virginia 22030
(Address of principal executive offices, including zip code)
(Registrant’s telephone number, including area code)
Check the appropriate box below if the 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:
|[ ]||Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)|
|[ ]||Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)|
|[ ]||Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))|
|[ ]||Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).|
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company [ ]
If an emerging growth company, indicate by check mark 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. [ ]
Item 1.01 Entry into a Material Definitive Agreement
On December 30, 2018, Visium Technologies, Inc., a Florida corporation (the “ Company ”), entered into that certain Amendment to Membership Purchase Agreement (the “ Amendment ”), effecting amendment to that certain Membership Interest Purchase Agreement (the “ Original Purchase Agreement ”), dated September 4, 2018 (the “ Original Closing Date ”), by and among the Company, as purchaser, and the sellers (the “ Sellers ”) of Threat Surface Solutions Group, LLC, a Virginia limited liability company (“ TSSG ”). Pursuant to the Amendment, the payment obligations under the Original Purchase Agreement were modified to reflect an earnout (the “ Earnout ”) to be calculated as follows: ten percent (10%) of sales generated by TSSG (the “ TSSG Sales ”) beginning on the Original Closing Date and ending on October 12, 2021, capped at $25,000,000 in TSSG Sales, for a total Earnout not to exceed $2,500,000, divided proportionally between the Sellers. The Earnout shall be paid quarterly, within thirty (30) days of the end of the fiscal quarter in which the TSSG Sales are collected.
The above descriptions of the Original Purchase Agreement and the Amendment do not purport to be complete and are qualified in their entirety by the full text of the forms of such documents, which are provided as exhibits 2.1 and 2.1, respectively to this Current Report on Form 8-K and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
|2.1||Membership Interest Purchase Agreement by and Among Threat Surface Solutions Group, LLC, Acquired Data Solutions, Inc., Ramparts, LLC, and Kevin Anderson, an Individual, and Visium Technologies, Inc. (incorporated by reference to Visium Technologies, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 10, 2018)|
|2.2||Amendment to Membership Interest Purchase Agreement *|
* filed herewith
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: January 4, 2019
|VISIUM TECHNOLOGIES, INC.|
|By:||/s/ Mark Lucky|
|Chief Financial Officer|
FIRST AMENDMENT TO MEMBERSHIP INTEREST PURCHASE AGREEMENT
THIS FIRST AMENDMENT (this “ Amendment ”) TO MEMBERSHIP INTEREST PURCHASE AGREEMENT (the “ Agreement ”) is entered into as of December 17, 2018 (“ Amendment Date ”) by and among: (i) THREAT SURFACE SOLUTIONS GROUP, LLC , a Virginia limited liability company (the “ Company ”), party of the first part; (ii); ACquired Data Solutions , INC., a Maryland corporation (“ADS”); Ramparts , LLC, a Maryland limited liability company (“Ramparts”); and KEVIN ANDERSON, an individual (“Anderson”) ( ADS, Ramparts and Anderson shall be referred to, jointly and severally, as the context requires, as “Sellers”), parties of the second part; and (iii) VISIUM TECHNOLOGIES, INC. , a Florida corporation (“ Purchaser ”), party of the third part.
A. The Company, Sellers and Purchaser (hereinafter collectively, the “ Parties ”) entered into the Agreement as of September 4, 2018 (the “ Agreement Date ”).
B. Certain facts have been revealed since the Parties entered into the Agreement on the Agreement Date. These facts existed on the Agreement Date. Among these facts,
|(1)||Contemplated revenue that was to be generated by and through the Company has not materialized and was not matured as a source of revenue, as represented in the Agreement;|
|(2)||Certain of the sources of the revenue that was to be generated by and through the Company are not going to materialize in the near term, if ever;|
|(3)||Between the Agreement Date and the Amendment Date, the Company has not generated any revenue, and a full calendar quarter has elapsed;|
|(4)||Certain intellectual property that was to be developed and was under development for the Company (“ Contemplated IP ”) has been rendered obsolete by intellectual property already developed by third parties;|
|(5)||The value in the purchase price for the Company that was based on the Contemplated IP has been reduced to zero;|
C. As a result of these events, Sellers, Purchaser, and the Company have determined that the Agreement should be amended to reflect the actual value of the Company on the Agreement Date, as confirmed through the Amendment Date;
D. Were the Parties to not amend the MIPA, Purchaser would judicially seek to rescind the MIPA (“ Rescission ”);
E. A Rescission of the MIPA would not be in the best interests of the Parties; and
F. The Parties have agreed that entering into this Amendment, thereby adjusting the consideration for the Purchaser’s purchase of the Company, is fair and equitable, and will enable the Parties to work together in the spirit of cooperation, to build value in the Company and thereby benefit all the Parties.
NOW, THEREFORE , in consideration of the Recitals above, the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties do hereby agree as follows:
1. The Recitals above are incorporated as covenants of this Agreement to the same extent as if said Recitals were set forth herein as covenants.
2. The Agreement is hereby amended as follows:
(a) The Purchaser common stock (“ Common Stock ”) issued to the Sellers or to their designees will be retained by the Sellers or their designees as and for the consideration paid as of the Agreement Date.
(b) The “ Purchase Price ” as that term is defined in Article I, Section 1.62 of the Agreement is deleted. In its place the following Section 1.62 is inserted:
“1.62 “ Purchase Price ” means the total consideration payable by the Purchaser to the Sellers for the Acquisition. The total Acquisition Consideration payable by the Purchaser to the Sellers is: (I) $500,000.00 in Purchaser Common Stock at Closing payable proportionately to each of the Sellers, valued at the lower of (a) the closing price on the business day prior to Closing, or (b) the thirty (30) day trailing VWAP for the thirty (30) business days prior to Closing; AND (II) an earnout of up to $2,500,000.00 (“ Earnout ”) as that term is further defined in Section 2(d) below.”
(c) The Purchase Money Note is cancelled and shall be returned to Purchaser. There shall be no Financing Event and, therefore, no payment of $1,000,000.00 to Sellers upon completion of the Financing Event.
(d) The balance of the Purchase Price shall be payable contingently through an Earnout as follows: Sellers will be paid in the proportions their Membership Interests in the Company bear each to the other, their proportionate share of ten percent (10%) of sales generated by the Company (“ Company Sales ”) beginning on the Agreement Date and ending on October 12, 2021, capped at US TWENTY-FIVE MILLION DOLLARS (US $25,000,000) in sales, for a total Earnout not to exceed US TWO MILLION FIVE HUNDRED THOUSAND DOLLARS (US $2,500,000). The Earnout compensation shall be paid on Company Sales closed in immediately available funds and will be paid out of said funds quarterly, within thirty (30) days of the end of the fiscal quarter in which the Company Sales are collected.
(e) Article II, Section 2.9 of the Agreement, entitled “Earnout” is deleted.
3. The Parties acknowledge that a former member of the Company is contesting certain actions by the Sellers and the Company in connection with said former member’s status as a former member of the Company (“ Former Member Controversy ”). To the extent any of the representations of the Sellers or the Company in the Agreement are inconsistent with the Former Member Controversy, the Agreement is hereby amended to reflect the agreement of the Parties that the representations of the Sellers and the Company in the Agreement inconsistent with the Former Member Controversy are all subject to the Former Member Controversy facts. The Sellers and the Company are hereby released by the Purchaser from any liability arising from the Former Member Controversy, and Purchaser hereby agrees to hold the Sellers and the Company free and harmless from any liability in connection with the Former Member Controversy.
4. Schedule 3.14 to the Agreement, entitled “Company Contracts” is hereby amended. In lieu of the three Company Contracts listed in Schedule 3.14 the word “NONE” shall be inserted.
5. To the extent this Amendment is inconsistent with the Agreement, this Amendment shall prevail. Otherwise, the Agreement shall continue in full force and effect.
(SIGNATURES FOLLOW ON PAGE 4)
IN WITNESS WHEREOF, the Company, the Members, and the Purchaser, have caused this First Amendment to Membership Interest Purchase Agreement to be executed, all as of the Amendment Date.
|THREAT SURFACE SOLUTIONS GROUP, LLC,|
|a Virginia limited liability company|
|By:||/s/ Kevin Anderson|
|Kevin Anderson, Manager,|
|also designated Managing Partner|
|ACQUIRED DATA SOLUTIONS, INC.,|
|a Maryland corporation|
/s/ Steven Seiden
|Steven Seiden, President/CEO|
|a Maryland limited liability company|
/s/ Colin Bowers
|Colin Bowers, President/CEO|
|KEVIN ANDERSON, Individually|
/s/ Kevin Anderson
|VISIUM TECHNOLOGIES, INC.,|
|a Florida corporation|
/s/ Mark Lucky
Mark Lucky, CFO and
Chairman of the Board of Directors
[THIS IS THE SIGNATURE PAGE TO THE FIRST AMENDMENT TO MEMBERSHIP INTEREST PURCHASE AGREEMENT BY AND AMONG THREAT SURFACE SOLUTIONS GROUP, LLC, COMPANY; ACQUIRED DATA SOLUTIONS, INC., RAMPARTS, LLC, & KEVIN ANDERSON, SELLERS; AND VISIUM TECHNOLOGIES, INC., PURCHASER]