Company: XERI
Filing Date: 2025-10-02
Form Type: 10-K
Source: 0001477932-25-007303
Chunk: 227

Company: XERIANT, INC.
Filing Date: 2025-10-02
Form: 10-K
Item: Item 1B
Chunk 227
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 the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

 F-1Table of Contents

Convertible Debentures

As described in Note 2 to the Company’s consolidated financial statements, the Company adheres to ASU 2020-06 which simplifies an issuer’s accounting for convertible instruments and its application of the derivatives scope exception for contracts in its own equity. When the Company issues debt that contains a warrant feature, the Company estimates and records the fair value using the Black-Scholes valuation model. Also, as discussed in Note 12 to the Company’s consolidated financial statements, the Company evaluates warrants issued through debt under ASC 815, Derivatives and Hedging, to determine if they require liability classification.

We identified the Company’s application of the accounting for convertible notes and warrant features as a critical audit matter. The principal considerations for our determination of this critical audit matter related to the high degree of subjectivity in the Company’s judgments in determining the qualitative factors. Auditing these judgments and assumptions by the Company involves auditor judgment due to the nature and extent of audit evidence and effort required to address these matters.

The primary procedures we performed to address these critical audit matters included the following:

 ·Reviewed agreements for all relevant terms.    ·Tested management’s identification and treatment of agreement terms.    ·Recalculated management’s fair value based on the terms in the agreements.    ·Assessed the terms and evaluated the appropriateness of management’s application of their accounting policies, along with their use of estimates, in the determination of the amortization of the debt discount.

 We have served as the Company’s auditor since 2024. Astra Audit & Advisory LLCTampa, FloridaOctober 2