Company: XERI
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001477932-25-001010
Chunk: 87

Company: XERIANT, INC.
Filing Date: 2025-02-14
Form: 10-Q
Item: Part II, Item 8
Chunk 87
---
 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. Finance leases are recorded as a finance lease liability and property, plant 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.

 F-11Table of Contents

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. Investments The Company follows ASC 325-20, Cost Method Investments, to account for its ownership interest in noncontrolled entities. Under ASC 325-20, equity securities that do not have readily determinable fair values (i.e., non-marketable equity securities) and are not required to be accounted for under the equity method are typically carried at cost (i.e., cost method investments). Investments of this nature are initially recorded at cost. Income is recorded for dividends received that are distributed from net accumulated earnings of the noncontrolled entity subsequent to the date of investment. Dividends received in excess of earnings subsequent to the date of investment are considered a return of investment and are recorded as reductions in the cost of the investment. Investments are written down only when there is clear evidence that a decline in value that is other than temporary has occurred.  Research and Development Expenses Expenditures for research and development are expensed as incurred. The Company incurred research and development expenses of $26,576 and $79,735 for the six months ended December 31, 2024 and 2023, respectively. The Company incurred research and development expenses of $15 and $52,753 for the three months ended December 31, 2024 and 2023, respectively.   Advertising and Marketing Expenses The Company expenses advertising and marketing costs as they are incurred and