Company: XERI
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001477932-25-008494
Chunk: 53

Company: XERIANT, INC.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 1
Chunk 53
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es whether the contract is, or contains, a lease. The Company’s assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the period, and (3) whether it has the right to direct the use of the asset. The Company will allocate the consideration in the contract to each lease component based on its relative stand-alone price to determine the lease payments. Operating lease right of use (“ROU”) assets represents the right to use the leased asset for the lease term and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the adoption date in determining the present value of future payments. Lease expense for minimum lease payments is amortized on a straight-line basis over the lease term and is presented in operating expenses on the unaudited condensed consolidated statements of operations as rent expense. Finance leases are recorded as a finance lease liability and property and equipment asset, based on the present value of lease payments. The asset is depreciated, and the liability is amortized with interest expense incurred over the life of the lease. As permitted under the new guidance, the Company has made an accounting policy election not to apply the recognition provisions of the guidance to short term leases (leases with a lease term of twelve months or less that do not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise); instead, the Company will recognize the lease payments for short term leases on a straight-line basis over the lease term. Research and Development Expenses Expenditures for research and development are expensed as incurred. The Company incurred research and development expenses of $53,966 and $26,561 for the three months ended September 30, 2025 and 2024, respectively.  Advertising and Marketing Expenses The Company expenses advertising and marketing costs as they are incurred. The Company recorded advertising expenses in the amount of $1,794 and $2,035 for the three months ended September 30, 2025 and 2024, respectively, as general and administrative expenses. Income Taxes The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is