# EDGAR Filing Document

**Accession Number:** 0001481504
**File Stem:** 0001477932-25-007303
**Filing Date:** 2025-10
**Character Count:** 267865
**Document Hash:** 468a5779f746d172407f6b657a6f82fe
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001477932-25-007303.hdr.sgml**: 20251002

**ACCESSION NUMBER**: 0001477932-25-007303

**CONFORMED SUBMISSION TYPE**: 10-K

**PUBLIC DOCUMENT COUNT**: 67

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20251002

**DATE AS OF CHANGE**: 20251002

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** XERIANT, INC.
- **CENTRAL INDEX KEY:** 0001481504
- **STANDARD INDUSTRIAL CLASSIFICATION:** AIRCRAFT [3721]
- **ORGANIZATION NAME:** 04 Manufacturing
- **EIN:** 271519178
- **FISCAL YEAR END:** 0630

**FILING VALUES:**
- **FORM TYPE:** 10-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-54277
- **FILM NUMBER:** 251370014

**BUSINESS ADDRESS:**
- **STREET 1:** INNOVATION CENTRE #1, 3998 FAU BLVD.
- **STREET 2:** SUITE 309
- **CITY:** BOCA RATON
- **STATE:** FL
- **ZIP:** 33431
- **BUSINESS PHONE:** 561-491-9595

**MAIL ADDRESS:**
- **STREET 1:** INNOVATION CENTRE #1, 3998 FAU BLVD.
- **STREET 2:** SUITE 309
- **CITY:** BOCA RATON
- **STATE:** FL
- **ZIP:** 33431

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Banjo & Matilda, Inc.
- **DATE OF NAME CHANGE:** 20131112

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** EASTERN WORLD SOLUTIONS, INC.
- **DATE OF NAME CHANGE:** 20121116

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Encom Group, Inc.
- **DATE OF NAME CHANGE:** 20120420

?xml version='1.0' encoding='ASCII'? xeri_10k.htm

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-K**

(Mark One)

**☒** **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

For the fiscal year ended **<u>June 30, 2025</u>**

or

**☐** **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

For the transition period from ____________ to ____________

**Commission file number 000-54277**

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| **XERIANT, INC.** |
| (Exact name of registrant as specified in its charter). |

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| **Nevada** | **27-1519178** |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| **3651 FAU Boulevard, Suite 400**<br>**Boca Raton, Florida** | **33431** |
| (Address of principal executive offices) | (Zip code) |

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Registrant's telephone number, including area code: **<u>(561) 491-9595</u>**

Securities registered under Section 12(b) of the Act:

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| **Title of Each Class** | **Trading Symbol(s)** | **Name of Each Exchange On Which Registered** |
| **N/A** | **N/A** | **N/A** |

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**Securities registered under Section 12(g) of the Act:** 

**Common Stock, $0.00001 par value**

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐&nbsp;&nbsp;&nbsp;&nbsp; No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐&nbsp;&nbsp;&nbsp;&nbsp; No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒&nbsp;&nbsp;&nbsp;&nbsp; No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒&nbsp;&nbsp;&nbsp;&nbsp; No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

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| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| Non-accelerated Filer | ☒ | Smaller reporting company | ☒ |
|  |  | Emerging growth company | ☐ |

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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. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously filed financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10 D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

The aggregate market value of the registrant's common stock held by non-affiliates as of December 31, 2024, the last day of the registrant's most recently completed second fiscal quarter, based upon the closing price of the registrant's common stock as reported by the OTCQB Marketplace on such date, was approximately $11.6 million. Shares of common stock held by each officer and director, and by each person who owns 10% or more of the outstanding common stock, have been excluded in that such persons may be deemed to be affiliates. This calculation does not reflect a determination that persons are affiliates for any other purposes.

Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date. As of October 2, 2025, the registrant had 749,053,035 outstanding shares of common stock.

Documents Incorporated by Reference: None.

**TABLE OF CONTENTS**

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|  |  | **Page** |
| [PART I.](#p1) |  |  |
| [Item 1.](#i1) | [Business.](#i1) | 4 |
| [Item 1A.](#i1a) | [Risk Factors.](#i1a) | 11 |
| [Item 1B](#i1b) | [Unresolved Staff Comments](#i1b) | 27 |
| [Item 1C](#i1c) | [Cybersecurity](#i1c) | 27 |
| [Item 2.](#i2) | [Properties.](#i2) | 27 |
| [Item 3.](#i3) | [Legal Proceedings.](#i3) | 27 |
| [Item 4.](#i4) | [Mine Safety Disclosures.](#i4) | 27 |
| [PART II.](#p2) |  |  |
| [Item 5.](#i5) | [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.](#i5) | 28 |
| [Item 6.](#i6) | [Reserved.](#i6) | 29 |
| [Item 7.](#i7) | [Management's Discussion and Analysis of Financial Condition and Results of Operations.](#i7) | 29 |
| [Item 8.](#i8) | [Financial Statements and Supplementary Data.](#i8) | 35 |
| [Item 9.](#i9) | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.](#i9) | 36 |
| [Item 9A.](#i9a) | [Controls and Procedures.](#i9a) | 36 |
| [Item 9B.](#i9b) | [Other Information.](#i9b) | 37 |
| [Item 9C](#i9c) | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspection](#i9c) | 37 |
| [PART III.](#p3) |  |  |
| [Item 10.](#i10) | [Directors, Executive Officers and Corporate Governance.](#i10) | 38 |
| [Item 11.](#i11) | [Executive Compensation.](#i11) | 41 |
| [Item 12.](#i12) | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.](#i12) | 43 |
| [Item 13.](#i13) | [Certain Relationships and Related Transactions, and Director Independence.](#i13) | 44 |
| [Item 14.](#i14) | [Principal Accounting Fees and Services.](#i14) | 44 |
| [PART IV.](#p4) |  |  |
| [Item 15.](#i15) | [Exhibits, Financial Statement Schedules.](#i15) | 46 |
| [Item 16](#i16) | [Form 10-K Summary](#i16) | 46 |

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**CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS**

This Annual Report on Form 10-K (this "Report") contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Any statements about our expectations, beliefs, plans, predictions, forecasts, objectives, assumptions, or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as "anticipate," "believes," "can," "could," "may," "predicts," "potential," "should," "will," "estimate," "plans," "projects," "continuing," "ongoing," "expects," "intends," and similar words or phrases. Accordingly, these statements are only predictions and involve estimates, known and unknown risks, assumptions, and uncertainties that could cause actual results to differ materially from those expressed in them. Our actual results could differ materially from those anticipated in such forward-looking statements as a result of several factors more fully described in Item 1A of this Report under the caption "Risk Factors" and elsewhere in this Report, including the exhibits hereto.

All forward-looking statements are only estimates of future results, and actual results may differ materially from expectations. The inclusion of this forward-looking information should not be regarded as a representation by us or any other person that the future plans, estimates, or expectations contemplated by us will be achieved. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, and financial needs. You are cautioned not to place undue reliance on such statements, which should be read in conjunction with the other cautionary statements that are included elsewhere in this Report. Any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws.

**Use of Certain Defined Terms**

Except where the context otherwise requires and for the purposes of this Report only:

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| In this annual report, references to "Xeriant", "Banjo", "XERI", "BANJ" or "the Company," or "we," or "us," and "our" refer to Xeriant, Inc. f/k/a Banjo & Matilda, Inc. |
| "Exchange Act" refers to the Securities Exchange Act of 1934, as amended. |
| "SEC" refers to the Securities and Exchange Commission. |
| "Securities Act" refers to the Securities Act of 1933, as amended. |

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**PART I.**

**Item 1. Business**

Xeriant, Inc. (the "Company") is dedicated to the discovery, development and commercialization of disruptive technologies in advanced materials and aerospace which can be successfully integrated and commercialized for deployment across multiple industrial sectors. The Company seeks to partner with and acquire strategic interests in visionary companies that accelerate this mission. Xeriant's advanced materials line<u>,</u> when available, will be marketed under the DUREVER™ brand, and includes NEXBOARD™, an eco-friendly, patent-pending composite construction panel made from plastic and fiber waste, designed to replace products such as drywall, plywood, OSB, MDF, MgO board and other materials used in construction.

**Corporate History**

***Formation of Company***

The Company was originally incorporated in Nevada on December 18, 2009, under the name Eastern World Solutions, Inc. The name was changed to Banjo & Matilda, Inc. on September 24, 2013. Effective June 22, 2020, the Company changed its name from Banjo & Matilda, Inc. to Xeriant, Inc.

***Share Exchange with American Aviation Technologies***

On April 16, 2019, the Company entered into a Share Exchange Agreement with American Aviation Technologies, LLC ("AAT"), an aircraft design and development company focused on the emerging segment of the aviation industry of autonomous and semi-autonomous vertical take-off and landing (VTOL) and unmanned aerial vehicles (UAVs).

On June 28, 2019, the Company spun out two wholly owned subsidiaries: Banjo & Matilda (USA), Inc. and Banjo & Matilda Australia Pty LTD.

On September 30, 2019, the acquisition of AAT closed, and AAT became a wholly owned subsidiary of the Company.

***Joint Venture with XTI Aircraft***

Effective May 31, 2021, the Company entered into a Joint Venture with XTI Aircraft Company ("XTI"), named Eco-Aero, LLC, with the purpose of completing the preliminary design review ("PDR") of XTI's eVTOL fixed wing aircraft. XTI and the Company each own 50 percent of the XTI JV, and it is managed by a management committee consisting of five members, three appointed by the Company and two by XTI. The Company invested approximately $5.5 million into the joint venture after borrowing the funds from Auctus Fund LLC ("Auctus") through a Senior Secured Promissory Note, through an introduction from Maxim Group, LLC, the Company's investment banker at the time. The borrowed funds from Auctus were intended to be a bridge loan that would be resolved through an IPO (Initial Public Offering) and uplist to Nasdaq in a merger with XTI, which did not occur because XTI refused to move forward with the merger. The PDR was completed during the first quarter of 2022 according to XTI, which was the purpose of the joint venture.

On May 17, 2022, the Company signed a Letter Agreement with XTI related to the introduction of XTI to Inpixon, a Nasdaq-listed company. Under this Letter Agreement, if there was a combination or other transaction between XTI and Inpixon, the Company would receive compensation of six (6) percent of XTI fully diluted pre-merger shares, and XTI would assume the obligations of Xeriant's Senior Secured Note with Auctus Fund, LLC. On May 31, 2023, the joint venture was terminated according to an Acceleration Event, which was 24 months from the start of the joint venture. On June 5, 2023, after suspecting that the obligations under the Letter Agreement were possibly being evaded, the Company transmitted a formal demand letter to XTI requesting compliance with the provisions outlined in the Letter Agreement, and in accordance with section 8 of the JV Agreement with XTI. On July 25, 2023, Inpixon filed an 8-K, announcing their intention to merge with XTI having executed an Agreement of Plan and Merger with XTI. The filing also showed that XTI had engaged in a transaction with Inpixon on March 10, 2023, receiving $300,000 in funding, which was a compensation triggering event. Inpixon subsequently filed an S-4/A registration statement on October 6, 2023. On December 6, 2023, the Company initiated legal proceedings against XTI. See Litigation Section at Note 8 below for a summary of the related legal proceedings.

***Auctus Fund, LLC Senior Secured Note***

Through Maxim Group, LLC, the Company was introduced to Auctus Fund LLC ("Auctus") for the purpose of providing bridge loan funding to satisfy the requirements of a pending merger with XTI Aircraft under a letter of intent signed in September 2021. On October 27, 2021, the Company issued a convertible note payable with Auctus with the principal of $6,050,000, consisting of $5,142,500, which was the actual amount funded, plus an original issue discount in the amount of $907,500 for interest on the unpaid principal amount at the rate of zero percent per annum from the issue date until the note becomes due and payable. The closing costs were $433,550, which included $308,550 in fees paid to Maxim and professional fees for completing the transaction. The Note had an initial due date of October 27, 2022. The Auctus Note provides the holder has the option to convert the principal balance to common stock of the Company at a conversion price of the lesser of (i) $0.1187 or (ii) 75% of the offering price per share divided by the number of shares of common stock. The Auctus Note is secured by the grant of a first priority security interest in the assets of the Company. In connection with the Auctus Note, the Company issued warrants indexed to an aggregate of 50,968,828 shares of common stock. The warrants have a term of five years and an exercise price of $0.1187. The exercise price can be adjusted downward to match the price of the Company's most recent issuance of common shares.

Effective August 1, 2022, the Company entered into an Amendment to the Senior Secured Promissory Note (the "First Amendment") with Auctus pursuant to which the parties agreed to amend the Auctus Note. The Amendment (i) extended the maturity date of the Auctus Note to November 1, 2022, and (ii) extended the dates for the completion of the acquisition of XTI Aircraft and the uplist of the Company's common stock to a national securities exchange to November 1, 2022. In consideration of the Amendment, the Company agreed to (i) grant to Auctus a new Warrant to purchase 25,000,000 shares of common stock dated July 26, 2022 (the "Warrant") at an exercise price of $0.09 per share and 5-year term; (ii) make a prepayment of the Note in the amount of $100,000; and (iii) cause a director of the Company to cancel his 10b-5(1) Plan.

Effective December 27, 2022, the Company entered into a Second Amendment to the Senior Secured Promissory Note (the "Second Amendment") with Auctus pursuant to which the parties agreed to further amend the Auctus Note. The Second Amendment (i) extended the maturity date of the Note, the obligation to uplist to a national securities exchange and acquisition of XTI Aircraft Company to March 15, 2023, and (ii) extended the date to file an S-1 registration statement to uplist the Company's common stock to a national securities exchange to January 15, 2023. In consideration of the Amendment, the Company agreed to (i) grant to Auctus a new Warrant to purchase 250,000,000 shares of Common Stock dated December 27, 2022 (the "New Warrant") at an exercise price of $0.09 per share and 5-year term, and (ii) make two pre-payment installments of $50,000 on January 15, 2023, and February 15, 2023. On October 6, 2023, the Company received a conversion notice to issue 20,011,500 shares of the Company's common stock to Auctus which shares were subsequently issued by the Company's stock transfer agent and the value of the relating shares applied to interest on the Note. The Company is contesting the legality of this conversion and issuance which is a subject of the Company's legal proceedings against Auctus.

The Company tested the first modification ("First Amendment") under ASC 470-50-40 to determine if the modification resulted in an extinguishment. It was determined the present value of the cash flows under the terms of the new debt instrument was at least 10 percent different from the present value of the remaining cash flows under the terms of the original instrument. As a result, the modification resulted in a loss on an extinguishment in the amount of $3,570,366 for the year ended June 30, 2023. The Company tested the second modification ("Second Amendment") under ASC 470-50-40 to determine if the modification resulted in an extinguishment. It was determined the present value of the cash flows under the terms of the new debt instrument was at least 10 percent different from the present value of the remaining cash flows under the terms of the original instrument. As a result, the modification resulted in a loss on an extinguishment in the amount of $689,621 for the year ended June 30, 2023.

On October 19, 2023, Xeriant filed a complaint against Auctus. See Litigation Section at Note 8 below for a summary of the related legal proceedings.

As of June 30, 2024, a total of $50,000 remained outstanding, and was recorded within accounts payable and accrued liabilities on the consolidated balance sheets. As of June 30, 2025, the $50,000 accrued liability was consolidated into the balance of the convertible note payable. During the year ended June 30, 2024, the Company recorded $1,070,729 in default interest related to the note. On October 6, 2023, Auctus converted $200,115 in interest into 20,011,500 shares of common stock and on April 5, 2024, Auctus converted $227,067 in interest into 22,706,700 shares of common stock. As of June 30, 2025 and 2024, the balance of accrued interest of this note was $6,543,546, which is recorded in the accounts payable and accrued liabilities section of the consolidated balance sheets.

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**OUR BUSINESS SUMMARY**

**Introduction**

Transformative aerospace technologies, including eco-friendly specialty materials, have been successfully commercialized and integrated across multiple industry sectors, and have led to a more prosperous and interconnected global economy. These advancements are producing next-generation materials that can affect every facet of our lives with improved safety, durability and decreased environmental impact.

**Company Overview**

Xeriant, Inc. (the "Company") is dedicated to the discovery, development and commercialization of disruptive technologies in advanced materials and aerospace. The Company seeks to partner with and acquire strategic interests in visionary companies that accelerate this mission. Xeriant's advanced materials line is marketed under the DUREVER™ brand, and includes NEXBOARD™, an eco-friendly, patent-pending composite construction panel made from plastic and fiber waste, designed to replace products such as drywall, plywood, OSB, MDF, MgO board and other materials used in construction.

***Advanced Materials***

A primary focus of the Company is the development and commercialization of eco-friendly advanced materials, especially in the area of nanotechnology, which have applications across a broad range of industries and the potential to generate significant near-term revenue. The Company's strategy encompasses licensing arrangements, joint ventures, or combinations which could allow for more rapid access to the market with reduced capital requirements and financial risk. Some partner companies may provide production and distribution infrastructure, which could streamline testing and certification as well as add brand recognition. Once the Company establishes sufficient production capabilities, the advanced materials may be sold as standalone products, enhancements to existing products, or used in the development of proprietary products under new trademarked brands owned by the Company. The Company is exploring manufacturing and branding opportunities for specific products derived from advanced materials acquired or developed, which would involve setting up production facilities, equipment, systems and supply chains.

Starting in 2023, the Company began developing its own advanced materials, including proprietary flame-retardant technology for polymers contained in recycled materials. In 2024, the Company began testing a number of production processes to manufacture its eco-friendly, patent pending, composite construction panel called NEXBOARD so that it can be competitive in the market and produced on an industrial scale. The Company plans to initially manufacture its wallboards through contract manufacturers to meet expected demand indicated by a number of homebuilders and developers.

During the first quarter of 2025, the Company appointed two Senior Advisors who are experts in nanomaterials, which helped to expand the Company's portfolio of advanced materials and products, which now includes access to specific nanotechnologies for addressing deficiencies in the properties of wood, asphalt, concrete, and plastic composites, as well as addressing the performance of fuel and stopping the spread of wildfires. Management believes that incorporating nanotechnology in NEXBOARD will significantly improve its fire resistance and thermal stability based on internal testing. NEXBOARD will be available in varying thicknesses and sizes, including standard 48" x 96" sheets. The Company will need to have this product certified for use in the construction industry, which is in process. If the Company decides to set up its own manufacturing facilities it will need to raise significant capital, which may or may not be available depending on market conditions and other factors. The Company has had ongoing discussions with an investment bank interested in financing these facilities and operations through a series of green bond issuances although no engagement agreement has been entered into.

On August 12, 2022, the Company filed a trademark application with the U.S. Patent and Trademark Office for "NEXBOARD," with respect to construction panels, namely, composite sheets and panels composed primarily of plastic, reinforcement materials and fire-retardant chemicals for use in walls, ceilings, flooring, framing, siding, roofing and decking. The trademark filing was intentionally broad and based upon demand for a general all-purpose construction panel made from a mixture of fire-retardant and recycled materials. Xeriant has also filed a trademark application for "DUREVER™."

On March 31, 2023, the Company filed a provisional patent application titled "Multilayered Fire-Resistant Polymer Composite and Method for Producing Same," for a method of producing a unique fire-resistant thermoplastic and fiber composite material which may be formed or shaped into various construction products of different thicknesses and dimensions. This green material will be composed primarily of recycled plastic, cellulose and ecofriendly fire-retardant chemicals, including but not limited to use in walls, ceilings, flooring, framing, siding, roofing, molding, and decking, used in construction. On April 1, 2024, the Company filed a non-provisional U.S. patent application claiming priority to the filing date of the 2023 related provisional patent application described herein. Subject to available capital, the Company is planning to build manufacturing facilities in the United States for the production of NEXBOARD™ in order to meet market demand or alternatively license the technology and process. The Company is already working with companies for near-term contract manufacturing, has potential locations identified for a pilot plant and larger manufacturing facilities, received bids for specialized manufacturing equipment, developed timetables related to the action plan, and selected a managing director with decades of experience who would like to oversee the startup of production, expansion and operations.

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**Aerospace**

The Company seeks to develop or acquire and commercialize disruptive, high-growth-potential technologies in aerospace, including next-generation air and spacecraft, that have potential applications in other industries. The areas of focus that are reshaping the future of aerospace include advanced materials, advanced air mobility, unmanned aerial systems (drones), AI, hypersonics, communications, cybersecurity, satellites, and renewable energy technology. The Company's initial concentration was on the emerging aviation market called advanced air mobility (AAM), the transition to more efficient, eco-friendly, automated and convenient flight operations, enabled by the convergence of technological advancements in design and engineering, composite materials, propulsion systems, battery energy density and manufacturing processes. Next-generation aircraft being developed for this market offers low-cost, on-demand flight for passengers and cargo, utilizing lower altitude airspace and bypassing the traditional hub-and-spoke airport network with vertical takeoff and landing (VTOL) capabilities. Many of these lightweight aircraft are electrically powered through either hybrid or pure battery systems, which allows for quieter, low emission flights over urban areas, however with limited speed and range. Hydrogen powered aircraft have already been prototyped and are expected to become more prevalent over the next decade. The development of solid-state hydrogen technology may address the safety, large-area storage requirement limitations for gaseous-state hydrogen. The Company plans to partner with and acquire strategic interests in visionary companies that accelerate our mission of commercializing critical breakthrough aerospace technologies which enhance sustainability, performance, and safety.

In the area of aerospace, management believes that the Company can grow expeditiously by acquiring technology and assets primarily through acquisitions, joint ventures, strategic investments, and licensing arrangements. As a publicly traded company, the Company offers partner companies such benefits as improved access to capital, higher valuations and lower risk through the shared ownership of a diversified portfolio, while allowing these entities to maintain independence in their distinct operations to focus on their fields of expertise. Cost savings and efficiencies may be realized from sharing non-operational functions such as finance, legal, tax, sales & marketing, human resources, purchasing power, as well as investor and public relations.

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**Industry Overview**

**Advanced Materials**

Aerospace innovation has been at the forefront of many important scientific, technological, design and engineering breakthroughs which have had broad implications across non-aerospace sectors of the economy. Research and development initiatives originally intended for aerospace applications have contributed to advances in composites and other advanced materials, health care, transportation, telecommunications, agriculture, and manufacturing, and have led to the commercialization of new technologies and products that have positively impacted our daily lives.

One of the most recognized areas of research where the aerospace industry has played a major role is polymer chemistry, which includes the development of plastics technologies and fire retardants in plastics, coatings and adhesives. Technical improvements in aircraft design have shifted from a focus on speed and range to efficiency and sustainability, creating the need for advanced materials in aerostructures and engines that are lightweight and resistant to extreme heat. Plastic composites using carbon fiber are increasingly used in the structural components of aircrafts, replacing aluminum. Additionally, aircraft interior design incorporates lighter, flame-resistant polymer materials and engineered alloys for panels, seats and various components to reduce weight.

Advanced polymer materials with superior performance characteristics, including flame-resistance with non-toxic gases, have wide applicability in the construction industry. Plastic composite boards may be fabricated from a range of polymers, including polypropylene (PP), polyethylene (PE), polystyrene (PS), polyvinyl chloride (PVC) and polyamide (PA), which are inherently water-resistant, and reinforced with a variety of materials, including cardboard or cellulose fiber, wood, various minerals, fiberglass, or carbon, which provide increased mechanical strength. Additives, surface treatments and decorative finishes can further enhance the properties construction products like wallboards, which can be manufactured in standard sizes and become a replacement for gypsum and wood-based structural panels such as drywall, plywood, Oriented Strand Board (OSB) and Medium Density Fiberboard (MDF), and flooring. Composite boards made from recycled plastic and fiber are considered green building products, not only because they decrease the amount of waste materials from landfills, but because they have insulating properties that can cut energy costs. When infused with a non-toxic flame retardant, these eco-friendly composite panels can be an effective passive fire protection system, providing superior safety and minimizing property damage from flame spread and smoke.

The construction industry is seeing an accelerating demand for sustainable building practices, which is expected to drive the market growth of green building materials, as well as promote the use of non-toxic chemicals, including flame retardants. Green building materials are an environmentally friendly solution because they are produced from safe, recyclable products, which help in conserving non-renewable resources and mitigating environmental and human health considerations. Moreover, green building materials have become a durable and energy-efficient solution that makes them suitable for various infrastructure applications. As part of a major rebuilding of aging infrastructure across the globe, investments in renovations and retrofit construction, including the replacement of decaying underground materials, often mandate the use of green materials and building methods. New construction of governmental buildings, office complexes, schools and residential structures is increasingly employing eco-friendly alternatives for insulation, concrete, wallboard and rebar, which often have similar or superior performance when compared with conventional materials. Several developing countries are launching programs with subsidies and incentives to spur growth in the market and spread awareness about alternative construction methods with the goal of supplying affordable and sustainable housing. In the U.S., LEED (Leadership in Energy and Environmental Design) is the most widely used rating system for green building practices.

***The Need to Replace Gypsum Wallboards***

Traditional drywall, primarily made from gypsum, poses environmental challenges, necessitating its replacement. Gypsum, when landfilled, can release hydrogen sulfide gas, a toxic and odorous compound that harms air quality and poses health risks. Additionally, gypsum contributes to landfill leachate, contaminating soil and groundwater. Sustainable alternatives, such as nanotechnology-enhanced composites like NEXBOARD, offer eco-friendly solutions. These materials, often made from recycled components, provide superior strength, fire resistance, and water resistance without hazardous byproducts. Replacing gypsum-based drywall reduces environmental impact, aligns with green construction goals, and supports the industry's shift toward sustainable, high-performance building materials.

***The Need to Replace Wood Products in Construction***

Wood products in construction raise safety and environmental concerns, driving the need for alternatives. Wood is susceptible to fire, rot, and pest damage, compromising structural integrity and safety. Environmentally, deforestation for timber contributes to habitat loss, biodiversity decline, and carbon emissions, with the construction industry consuming significant natural resources. Sustainable alternatives, like nanotechnology-enhanced composites such as NEXBOARD, offer superior fire resistance, durability, and eco-friendliness, often using recycled materials. Replacing wood reduces deforestation, lowers environmental impact, and aligns green construction goals, supporting a shift toward safer, sustainable building materials for a resilient future.

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**Aerospace**

The aerospace industry is undergoing a transformative phase, driven by innovative technologies that enhance performance, sustainability, and efficiency. Among these, advanced materials, particularly those enabled by nanotechnology, play a pivotal role, alongside additive manufacturing, artificial intelligence (AI), and sustainable propulsion systems. These advancements are reshaping aircraft design, manufacturing, and operations to meet the demands of a rapidly evolving global market. The aerospace industry continues to evolve and adapt as market conditions change and as technological innovation enables the development of aircraft with new capabilities, applications and business cases. Next-generation aircrafts are more efficient, sustainable, reliable, automated and safer through technological improvements in design optimization and modeling, composites and advanced materials, artificial intelligence (AI), sensors, autonomy, alternative propulsion systems and manufacturing processes. Many of the airframe configurations enabled by these developments are being designed for the emerging aviation market called Advanced Air Mobility (AAM), the integration of new aircraft designs and flight technologies to move people and cargo between places not usually served by existing ground or air transportation. Increasing automobile traffic congestion in many urban environments demands alternative transportation solutions such as eco-friendly air taxi services and urban air mobility to improve the quality of life for city residents. In addition to being quieter with less or no carbon emissions, it is anticipated that these new aircraft will have lower operating, maintenance, and repair costs compared with other aircraft, including helicopters. For widespread adoption, it is critical that AAM services provide consumers with a strong value proposition to become an alternative to traditional ground transportation.

Advanced Materials and Nanotechnology: Advanced materials, such as carbon fiber composites and nanomaterials, are revolutionizing aerospace engineering. Carbon fiber reinforced polymers (CFRP) offer high strength-to-weight ratios, reducing aircraft weight and improving fuel efficiency. Nanotechnology enhances these materials by embedding nanoparticles, like carbon nanotubes or graphene, into composites, resulting in superior strength, thermal resistance, and durability. For instance, nano-enhanced coatings protect against corrosion and extreme temperatures, extending component lifespans. These materials also enable lightweight structures, critical for next-generation aircraft and spacecraft, reducing emissions and operational costs. The smart nano-construction materials market, valued at USD 12.5 billion in 2023, is projected to reach USD 17.7–18.7 billion by 2032, reflecting growing adoption in aerospace applications.

Additive Manufacturing (3D Printing): Additive manufacturing is transforming aerospace production by enabling complex, lightweight components that traditional methods cannot achieve. 3D-printed parts, such as turbine blades and fuel nozzles, reduce material waste and production time while allowing for customized designs. Companies like Boeing and Airbus use additive manufacturing for prototyping and producing critical components, improving supply chain efficiency and reducing costs. The technology also supports the integration of advanced materials, further enhancing performance.

Artificial Intelligence and Autonomy: AI is revolutionizing aerospace through predictive maintenance, flight optimization, and autonomous systems. Machine learning algorithms analyze sensor data to predict component failures, minimizing downtime and enhancing safety. AI-driven flight control systems optimize fuel consumption and navigation, while autonomous drones and urban air mobility vehicles, such as eVTOLs (electric vertical takeoff and landing aircraft), are redefining short-range transport. These advancements improve operational efficiency and pave the way for fully autonomous aircraft.

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**Intellectual Property**

On March 31, 2023, the Company filed a provisional patent application titled "Multilayered Fire-Resistant Polymer Composite and Method for Producing Same," for a method of producing a unique fire-resistant thermoplastic and fiber composite material which may be formed or shaped into various construction products of different thicknesses and dimensions. This green material will be composed primarily of recycled plastic, cellulose and ecofriendly fire-retardant chemicals, including but not limited to use in walls, ceilings, flooring, framing, siding, roofing, molding, and decking, used in construction. On April 1, 2024, the Company filed a non-provisional U.S. patent application claiming priority to the filing date of the 2023 related provisional patent application described herein.

The Company owns a 64% interest in its subsidiary, American Aviation Technologies, LLC ("AAT"), which owns a patented VTOL drone/aircraft concept called Halo. All intellectual property rights to Halo, including patents and applications for patents, were acquired on October 2, 2018. A Halo utility patent was filed on September 28, 2018, which was a continuation of U.S. Patent Application Serial No. 12/157,180, filed June 5, 2008, which claimed the benefit of and priority to U.S. Patent Application Serial No. 60/941,965, filed June 5, 2007, with both prior applications fully incorporated in their entireties and for all purposes. With respect to the first and subsequent utility patent application filings we have received the following U.S. Patents, namely, U.S. Patent No. 10,450,063 issued on October 22, 2019; U.S. Patent No. 10,814,974 issued on October 27, 2020; and U.S. Patent No. 11,597,512 issued on March 7, 2023.

The Company has filed trademark applications with the U.S. Patent and Trademark office with for the following marks currently pending: Xeriant name, "Innovation Soaring," "Evolution in Flight," "NEXBOARD™," "BlueGreen," "Technologies that define the future," and "DUREVER™."

**Market Opportunity**

The Company focuses on disruptive and transformative technologies with broad applications across high value industries, identifying those with exceptional market opportunities, which can be the basis for potential acquisitions, strategic partnerships or licensing arrangements. Early-stage technology companies as well as established companies that have developed breakthrough, high-market-potential technologies, unique intellectual property, that are past the concept/seed capital stage or may be at an inflection point for growth, can be the basis for potential acquisitions, strategic partnerships, licensing arrangements, or initial public offerings. Some companies may already be generating revenue while others have a clear path to revenue, while others have the potential for a combination or roll-up. In some cases, their technology originated and was developed out of an academic environment. As a strategic partner or acquiror, the Company can provide individuals and companies with access to capital, liquidity through an exchange of equity, new market opportunities and synergistic contacts, and university relationships for research and grants, while maintaining partners' operational independence. The Company believes that entrepreneurial spirit, passion, and vision are critical to success, and that it can provide entrepreneurial teams with strategic guidance to execute their business plan, access to financial markets, and investor liquidity.

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<u>Advanced Materials</u>

A few years ago, the Company recognized the rapidly growing green construction materials market, and began working to develop advanced materials as a critical area of technology to address the need for next generation building products. The Company has developed a nanotechnology-enhanced composite construction panel, called NEXBOARD, made from plastic and fiber waste to replace products such as drywall, plywood, OSB, MDF, MgO board and other materials used in construction. NEXBOARD is resistant to fire, water, mold and insects.

This innovation has generated strong interest from key players in the real estate development and construction industries as well as building materials wholesalers and retailers in the U.S. These companies are looking to participate in the circular economy and for alternatives to the hazardous waste created from drywall, toxic chemicals used in some flame retardants, and wood because of deforestation and its degradation when exposed to fire or water, a major safety issue as many have experienced with storms that cause massive flooding and with devasting wildfires. In addition to applications related to building materials, because of their exceptional fire- and water-resistant properties, the Company's nanotechnology-enhanced composites have high utility value in a multitude of industries, including but not limited to recreational vehicles, boats, containers and pallets, furniture, and cabinetry, so there will be ongoing opportunities for revenue growth. If and when available, the Company's advanced materials line will be marketed under the DUREVER brand.

NEXBOARD is initially poised to capitalize on the burgeoning green construction materials market, projected to reach USD 1.8 trillion by 2030, per a 2024 World Economic Forum report. The construction industry, consuming 60% of natural resources and contributing 40% of global carbon dioxide emissions, faces increasing demand for sustainable alternatives. NEXBOARD's lightweight design, exceptional fire resistance, and water, mold, and insect resistance position it as a superior substitute for traditional materials like gypsum drywall, plywood, and OSB.

The smart nano-construction materials market, valued at USD 12.5 billion in 2023, is expected to grow to USD 17.7–18.7 billion by 2032 (CAGR 4.5–4.9%), driven by demand for high-performance, eco-friendly materials. NEXBOARD's nanotechnology, incorporating engineered nanoparticles, enhances strength, durability, and fire-retardant properties without toxic additives, aligning with stringent safety and LEED certification requirements. This gives the Company a first-mover advantage in the nanocomposite segment, particularly in North America, where regulatory tailwinds and sustainability goals fuel adoption. By replacing environmentally harmful materials like gypsum, which releases toxic gases in landfills, NEXBOARD addresses both safety and sustainability, capturing a significant share of the growing green construction market.

<u>Aerospace</u>

The aerospace industry is experiencing a transformative wave driven by new technologies, particularly advanced materials and nanotechnology, with significant market opportunities. The global aerospace materials market, valued at USD 43.23 billion in 2024, is projected to reach USD 74.29 billion by 2032, growing at a CAGR of 7% (Fortune Business Insights). Similarly, the smart nano-construction materials market, relevant to aerospace applications, was valued at USD 12.5 billion in 2023 and is expected to reach USD 17.7–18.7 billion by 2032 (CAGR 4.5–4.9%), reflecting nanotechnology's growing role.

Advanced materials, such as carbon fiber composites and titanium alloys, are critical for reducing aircraft weight, improving fuel efficiency and lowering emissions, which account for a 2% reduction in global carbon dioxide output. Nanotechnology enhances these materials by embedding nanoparticles like carbon nanotubes or graphene, boosting strength, thermal resistance, and corrosion protection. For instance, nano-enhanced coatings extend component lifespans, while lightweight nanocomposites enable more efficient aircraft and spacecraft designs. These advancements align with the industry's push for sustainability, driven by regulatory pressures and net-zero goals.

Beyond materials, additive manufacturing (3D printing) is revolutionizing production by enabling complex, lightweight components, with the aerospace 3D printing market expected to grow from USD 2.1 billion in 2024 to USD 6.7 billion by 2030 (CAGR 21.5%). Artificial intelligence optimizes flight operations and predictive maintenance, while sustainable propulsion systems, like electric and hydrogen-based engines, leverage advanced materials for efficiency. North America dominates due to robust R&D, with companies like Boeing integrating nanotechnology into next-generation aircraft.

The aerospace industry's demand for high-performance, eco-friendly solutions positions advanced materials and nanotechnology as key growth drivers, with significant opportunities in commercial aviation, defense, and space exploration through 2030 and beyond.

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**CONSIDERATIONS RELATED TO OUR BUSINESS**

**Item 1A. Risk Factors**

*An investment in our common stock involves a high degree of risk. Before making an investment decision, you should give careful consideration to the following risk factors, including our financial statements and related notes, before deciding whether to invest in shares of our common stock. The occurrence of any of the adverse developments described in the following risk factors could materially and adversely harm our business, financial condition, results of operations or prospects. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment.*

**RISKS RELATING TO OUR FINANCIAL POSITION AND CAPITAL NEEDS**

***We are in our development stage and have a limited operating history.***

We are a development-stage enterprise with a limited operating history with no sales, and operating losses since its inception. We will need to continue building our organization and team to competently evaluate and secure business opportunities for the development of sophisticated technologies. As an early-stage business we will likely encounter unforeseen costs, expenses, competition and other problems to which such businesses are often subject. Our likelihood of success will depend on the problems, uncertainties, unexpected costs, difficulties, complications and delays frequently encountered in developing and expanding a new business and the competitive environment in which we plan to operate. If we fail to successfully address these risks, our business, financial condition and results of operations would be materially harmed.

***We anticipate** **operating losses to continue into the foreseeable future and substantial additional capital may be required that may not be available on acceptable terms**.*

Currently, there is no revenue being generated and we have significant operating losses that are expected to continue into the foreseeable future. There is no assurance that we will be able to raise the capital that will be required to commence and sustain operations and execute our business plan, which involves raising capital for acquisitions as well as developing and commercializing technologies. We are especially focused on the green construction materials business, namely DUREVER™ building products, which includes a line of composite products primarily made from recycled thermoplastics, reinforcement materials and fire-retardant chemicals for use in walls, ceilings, flooring, framing, siding, roofing, molding and decking. The production of green building materials requires establishing manufacturing operations in the United States, whether through contract manufacturing or setting up our own facilities. Should we be unable to raise sufficient capital required to set up manufacturing facilities to produce NEXBOARD<sup>TM</sup> products, we would lose the ability to deliver NEXBOARD to interested buyers and incur continued operating losses.

We expect capital outlays and operating expenditures to increase as we expand our product offerings and marketing activities. Our business or operations may change in a manner that would consume available funds more rapidly than anticipated, and substantial additional funding may be required to maintain operations, fund expansion, develop new or enhanced products or services, acquire complementary products, businesses or technologies or otherwise respond to competitive pressures and opportunities. Furthermore, any equity or debt financings, if available at all, may be on terms which are not favorable to the Company (and therefore its shareholders) and, in the case of a new equity offering by the Company, existing shareholders will be diluted unless they purchase their proportionate share of the equity offering. If adequate capital is not available on economically viable terms and conditions, the Company's business, operating results and financial condition may be materially adversely affected.

***We will need to meet or otherwise resolve the obligations required by the Auctus Fund LLC Senior Secured Note and the Amendment to the Note.***

The Company has Senior Secured Promissory Note with Auctus Fund LLC ("Auctus"), which became due and payable on March 15, 2023. At this time, there is no assurance that the Company will work out a favorable resolution of its obligations related to this note. If Auctus elects to enforce the Note, we may lose all or substantially all of our assets. If Auctus elects to convert the note into shares of our Common Stock, our shareholders could experience substantial dilution.

On October 19, 2023, the Company filed a complaint in the United States Southern District of New York (Case no.1:23-cv-09200) against Auctus Fund LLC, to invalidate allegedly illegally designed contractual agreements, including contesting the enforceability of the related note and amendments, and to set aside improper and unlawful securities transactions effectuated in violation of Section 15(a)(1) of the Exchange Act (15 U.S.C. § 78o(a)(1)) by the Defendant, alleging breaches of fiduciary duty and related claims. On February 9, 2024, the case was dismissed. The Company filed a Notice of Civil Appeal on March 13, 2024, primarily based on public welfare because of the pending litigation between the SEC and Auctus Fund Management, LLC, which complaint was filed on June 1, 2023. On June 19, 2024, the Company filed an appeal in the United States Court of Appeals for the Second Circuit (Case no. 24-682-cv). On June 25, 2025, the appellate court affirmed the lower court's decision. The Company's counsel is in the process of filing an appeal to the United States Supreme Court to challenge this decision, which went against precedent decisions in other districts. In addition to the pending legal matters, the Company is currently in discussions with Auctus in an attempt to come up with a settlement. The Company's ongoing lawsuit against XTI Aircraft Company has a connection to the Auctus matter in that the Company's obligations to Auctus were, according to the Company's complaint, to be assumed by XTI as provided in a Letter Agreement. The foregoing descriptions of the legal actions do not purport to be complete and are subject in their entirety by the full text of the court filings.

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***Not obtaining sufficient financing will jeopardize our operations and the ability to execute our business plan.***

We need to raise additional debt and/or equity financing to fund future operations and to provide working capital. However, there is no assurance that such financing will be consummated or obtained in sufficient amounts necessary to meet our needs. If cash resources are insufficient to satisfy our on-going cash requirements, the Company will be required to scale back or discontinue its product development programs or obtain funds if available (although there can be no certainties) through strategic alliances that may require us to relinquish rights to its technology, substantially reduce or discontinue its operations entirely. No assurance can be given that any future financing will be available or, if available, that it will be in terms that are satisfactory to us. Even if we are able to obtain financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in the case of equity financing. As a result, we can provide no assurance as to whether or if we will ever be profitable. If we are not able to achieve and maintain profitability, the value of our company and our common stock could decline significantly.

***Our recurring operating losses have raised substantial doubt regarding our ability to continue as a going concern.***

Our recurring operating losses raise substantial doubt about our ability to continue as a going concern. This condition is expected to continue for the foreseeable future until we can produce sufficient revenues to cover our costs as we seek to raise funding and invest in our operations as well as our sales and marketing efforts. Given this financial situation, no assurances can be given that we will be able to raise capital in the future on acceptable terms, or at all. As a result, our independent registered public accounting firm included an explanatory paragraph in its report in our consolidated financial statements for the most recent fiscal years with respect to this uncertainty. The perception of our ability to continue as a going concern may make it more difficult for us to obtain financing for the continuation of our operations and could result in the loss of confidence of investors, partners and employees.

**RISKS RELATING TO OUR BUSINESS OPERATIONS**

***There is no assurance that we or our affiliates will be able to accomplish the design and engineering needed to demonstrate that the technologies that are undertaken will perform or operate as planned.***

Because of unanticipated technological hurdles or the inability to assemble a qualified team to address these challenges, we may not be able to meet the technology development and performance objectives that are needed to be competitive in the various targeted markets.

***The development timeline for the development of certain technologies could expand.***

Due to unexpected challenges, the length of time to develop certain technologies may become expanded, causing cost overruns and potentially demanding the infusion of large amounts of capital and other financing, which may not be available. Because of the long timeline, there is also uncertainty regarding the uniqueness or advantages of the technologies at the time they are introduced into the market.

***Some technologies are still being developed and specific market applications have not been finalized.***

Because some of the anticipated technologies will be in an early stage of development, there is no certainty as to which market applications will be prioritized and targeted as well as the associated timelines and costs involved when we reach that point of determination after a technology has been proven. There is no assurance that the required selling price of our technologies will be competitive.

***We will face significant industry competition.***

Most of the targeted technologies will face significant competition from industry leaders or from well-funded entrants in the marketplace. We could face significant competition from companies who have developed or are developing alternative technologies that could render acquired technologies less competitive than planned. Many existing potential competitors are well-established, have or may have longer-standing relationships with customers and potential business partners, have or may have greater name recognition, and have or may have access to substantially greater financial, technical and marketing resources.

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***If we are unable to effectively manage our growth, our ability to implement our business strategy and our operating results will likely be materially adversely affected.***

Implementation of our business plan will place a significant strain on our management who must develop administrative, operating and financial infrastructures. To manage our business and planned growth effectively, we must successfully develop, implement, maintain and enhance our financial and accounting systems and controls, identify, hire and integrate new personnel and manage expanded operations. Salaries and benefits of additional personnel can be expected to place significant stress on our financial condition and the availability of such qualified personnel may be limited. There is no assurance that we will be able to manage the operational requirements related to implementing our business strategy.

***We are dependent on key personnel.***

Our success depends on our ability to identify, hire, train and retain highly qualified, specialized and experienced management and technical personnel. In addition, as we enter new areas of technology, we will need to hire additional highly skilled personnel. Competition for personnel with the required knowledge, skill and experience may be significant, and we may not be able to attract, assimilate or retain such personnel. The inability to attract and retain the necessary managerial and technical personnel could have a material adverse effect on our business, results of operations and financial condition.

***We are dependent on developing competitively priced, superior-performance, and industry-certified DUREVER***™ ***and NEXBOARD***™ ***products.***

A significant part of our projected operations is expected to come from the sale of DUREVER™ products and NEXBOARD™ composite wallboards that are primarily made from recycled materials that use our proprietary eco-friendly industrial flame retardants and nanomaterials. We are in the process of obtaining certification of NEXBOARD for the construction industry and other applications, however, there is no assurance that the required certifications will be obtained.

***Operations could be adversely affected by interruptions from suppliers of components that are beyond our control.***

Our technology, product development and sales could be adversely affected by interruptions in the supply of necessary components which are sourced from a variety of domestic and international vendors, suppliers and distributors, especially chemicals. We are also dependent upon third parties to timely deliver supplies that meet our specifications at competitive prices. Shortages or interruptions in the supply of these items, including electronic components, raw materials and chemicals could adversely affect the availability, quality and cost of items we sell. If such shortages result in increased cost of our supplies, we may not be able to pass along all of such increased costs to our customers. Such shortages or disruptions could be caused by transportation issues, inclement weather, natural disasters, increased demand, problems in production or distribution, restrictions on imports or exports, the inability of vendors to obtain credit, political instability in the countries in which suppliers and distributors are located, the financial instability of suppliers and distributors, suppliers' or distributors' failure to meet our standards, product quality issues, inflation, the price of gasoline, other factors relating to the suppliers and distributors and the countries in which they are located, safety regulations, warnings or advisories or the prospect of such pronouncements, the cancellation of supply or distribution agreements or an inability to renew such arrangements or to find replacements on commercially reasonable terms, or other conditions beyond our control. A shortage or interruption in the availability of certain electronic components, like servos and switchboards for industrial manufacturing equipment, chemicals, raw materials or supplies could increase costs and limit the availability of products critical to our operations, which in turn could lead to a significant reduction in our revenue.

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***Changes in the economy could have a detrimental impact on the Company.*** 

Changes in the general economic climate could have a detrimental impact on our revenue. It is possible that recessionary pressures and other economic factors (such as declining incomes, future potential rising interest rates, higher unemployment and tax increases) may adversely affect the Company. A worsening economy such as we experienced due to the Covid-19 pandemic may have a material adverse effect on our financial results and on your investment.

***Our business, results of operations and financial condition may be adversely impacted by pandemics or other significant public health conditions**.*

The COVID-19 pandemic negatively affected the U.S. and global economy several years ago, resulting in significant travel restrictions, including mandated closures and orders to "shelter-in-place," and created significant disruption of supply chains and the financial markets. The extent to which our operations may be impacted by the re-occurrence of this pandemic or other public health conditions cannot be accurately predicted, including actions by government authorities to contain an outbreak or treat its impact. We may experience materially adverse impacts on our business due to a number of potential economic conditions. The impact of significant public health conditions may also exacerbate other risks discussed in these risk factors, any of which could have a material effect on us.

***Our success is dependent upon our keeping pace with the advances in technology.***

We are positioned as a technology company. Some of our initiatives will be dependent on the technology of other companies. Systems and components may be impacted by rapid changes in technology, including the emergence of new industry standards and practices that could require us to make modifications to its platform. Our performance will depend, in part, on our ability to continue to enhance our existing technology or develop new technology that addresses the increasingly sophisticated and varied needs of the market, license leading technologies and respond to technological advances and emerging industry standards and practices on a timely and cost-effective basis. The development of our proprietary technology entails significant technical as well as business risks. We may be unsuccessful in using new technologies effectively or adapting its systems or other proprietary technology to the requirements of emerging industry standards. If we are unable to adapt to these changes and demands, our results of operations and financial condition could be materially and adversely affected.

***We could face liability or disruption from security breaches.***

Our technology and development process involves the storage of critical, secure and proprietary information. Our communications and computer infrastructure are potentially vulnerable to both physical and electronic invasions, such as cyberattacks and security breaches. We may be required to expend significant capital and other resources to defend against and lessen or correct the adverse effects of these invasions. Any such invasion could result in significant damage to us. A person who is able to circumvent the security measures employed by us could capture proprietary information; alter or destroy our information; or cause interruptions of our operations.

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***Litigation may adversely affect our business, financial condition, and results of operations.***

From time to time in the normal course of our business operations, we may become subject to litigation that may result in liability material to our financial statements as a whole or may negatively affect our operating results if changes to our business operations are required. The cost to defend such litigation may be significant and may require a diversion of our resources. There also may be adverse publicity associated with litigation that could negatively affect customer perception of our business, regardless of whether the allegations are valid or whether we are ultimately found liable. Insurance may not be available at all or in sufficient amounts to cover any liabilities with respect to these or other matters. A judgment or other liability in excess of our insurance coverage for any claims could adversely affect our business and the results of our operations.

***Our insurance coverage may be inadequate to cover all significant risk exposures.***

While we intend to maintain insurance for certain risks, the amount of our insurance coverage may not be adequate to cover all claims or liabilities, and we may be forced to bear substantial costs resulting from risks and uncertainties of our business. It is also not possible to obtain insurance to protect against all operational risks and liabilities. The failure to obtain adequate insurance coverage on terms favorable to us, or at all, could have a material adverse effect on our business, financial condition, and results of operations. We do not have any business interruption insurance. Any business disruption could result in substantial costs and diversion from executing our business plan.

**RISKS RELATED TO OUR DEPENDENCE ON THIRD PARTIES**

***We may fail to retain or recruit necessary personnel, and we may be unable to secure the services of consultants.***

As of the date of this filing, our management team of four people is currently paid as consultants or independent contractors. We also have engaged and plan to continue to engage outside consultants called Senior Advisors to advise us and have been and will be required to retain additional consultants and employees. Our future performance will depend in part on our ability to successfully integrate newly hired officers into our management team and our ability to develop an effective working relationship among senior management.

Certain of our directors, officers, advisors, and consultants serve as officers, directors, advisors, or consultants of other companies that might be developing competitive products. Other than corporate opportunities, none of our directors are obligated under any agreement or understanding with us to make any additional products or technologies available to us. Similarly, we can give no assurance, and we do not expect, and stockholders should not expect, that any product or technology identified by any of our directors or affiliates in the future would be made available to us other than corporate opportunities. We can give no assurance that any such other companies will not have interests that are in conflict with its interests.

Losing key personnel or failing to recruit necessary additional personnel would impede our ability to attain our development objectives. There is intense competition for qualified personnel in the technology field, and we may not be able to attract and retain the qualified personnel we need to develop our business.

We rely on independent organizations, advisors and consultants to perform certain services for us, including handling substantially all aspects of regulatory approval, manufacturing, marketing, and sales. We expect that this will continue to be the case. Such services may not always be available to us on a timely basis.

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***We may be subject to claims that our consultants or independent contractors have wrongfully used or disclosed alleged trade secrets of their other clients or former employers to us.***

As is common in the technology industry, we engage the services of consultants to assist in the development of our products. Many of these consultants were previously employed at or may have previously been or are currently providing consulting services to other technology companies, including our competitors or potential competitors. We may become subject to claims that we or our consultants have inadvertently or otherwise used or disclosed trade secrets or other proprietary information about our former employers or their former or current customers. Litigation may be necessary to defend against these claims. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management.

**RISKS RELATED TO OUR INTELLECTUAL PROPERTY**

***Misappropriation of our intellectual property and proprietary rights could impair our competitive position.***

Our success will depend to some extent upon our proprietary patented technology. The legal protections available to us can afford only limited protection, and these means of protecting our intellectual property may be inadequate. We rely, and will continue to rely, on patents, trademarks, trade secrets and copyright laws, confidentiality agreements, employment agreements, work for hire agreements, and technical measures to protect its intellectual property. We cannot ensure that the steps taken by it will prevent misappropriation of its technology or that the agreements entered into for that purpose will be enforceable. Effective trademark, service mark, copyright and trade secret protection may not be available in every jurisdiction in which our products and services are made available online. Our intellectual property may be subject to even greater risk in foreign jurisdictions, as the laws of many countries do not protect intellectual property to the same extent as the laws of the United States. As part of its confidentiality procedures, we generally will enter into agreements with our employees and consultants and limit access to our trade secrets and technology. We cannot assure or assume, however, that former employees will not seek to start or enhance other competing products or services to our detriment, our business, results of operations and financial condition. Nevertheless, management believes that the technical and creative skills of its personnel, continued development of its proprietary systems and technology, as well as brand name recognition and development are more essential in establishing and maintaining a competitive market position.

Despite efforts to protect our proprietary rights, unauthorized persons may attempt to copy aspects of our products or services or to obtain and use information that we regard as proprietary. Policing unauthorized use of our proprietary rights is difficult and requires constant attention. We may be required to spend significant resources to monitor and police our intellectual property rights. We may not be able to detect infringement and may lose our competitive position in the market before we are able to ascertain any such infringement. In addition, competitors may design around our proprietary technology or develop competing technologies.

Intellectual property litigation may be necessary in the future to enforce our intellectual property rights, to protect our trade secrets, to determine the validity and scope of the proprietary rights of others or to defend against claims of infringement by us. Other companies, including competitors, may obtain patents or other proprietary rights that would prevent, limit or interfere with our ability to make, use or sell its products and services. Any such litigation by or against us, whether the claims are valid or not, could result in our incurring substantial costs and diversion of resources, including the attention of senior management. If we are unsuccessful in such legal proceedings, we could be subjected to significant damages; be required to license technology that is critical to our operations, if a license is available at a cost which we can pay; or be required to develop replacement technologies at substantial cost to us in money and time. Any of these results could materially and adversely affect our business, results of operations and financial condition.

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***We rely on patents and patent applications and various regulatory exclusivities to protect some of our product candidates, and our ability to compete may be limited or eliminated if we are not able to protect our products.***

The patent positions of companies such as ours are uncertain and involve complex legal and factual questions. We may incur significant expenses in protecting our intellectual property and defending or assessing claims with respect to intellectual property owned by others. Any patent or other infringement litigation by or against us could cause us to incur significant expenses and divert the attention of our management.

Others may file patent applications or obtain patents on similar technologies that compete with our products or those of our joint ventures. We cannot predict how broad the claims in any such patents or applications will be and whether they will be allowed. Once claims have been issued, we cannot predict how they will be construed or enforced. We and/or our joint ventures may infringe upon intellectual property rights of others without being aware of it. If another party claims we are infringing their technology, we could have to defend an expensive and time-consuming lawsuit, pay a large sum if we are found to be infringing, or be prohibited from selling or licensing our products unless we obtain a license or redesign our products, which may not be possible.

***We may incur substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property rights, as well as costs associated with lawsuits.***

If any other person filed patent applications, or is issued patents, claiming technology also claimed by us, we may be required to participate in interference or derivation proceedings in the U.S. Patent and Trademark Office to determine priority and/or ownership of the invention. Our licensors or we may also need to participate in interference proceedings involving issued patents and pending applications of another entity.

The intellectual property environment in our industry is particularly complex, constantly evolving and highly fragmented. Other companies and institutions have issued patents and have filed or will file patent applications that may issue into patents that cover or attempt to cover products, processes or technologies similar to ours. We have not conducted freedom-to-use patent searches on all aspects of our product candidates or potential product candidates and may be unaware of relevant patents and patent applications of third parties. In addition, the freedom-to-use patent searches that have been conducted may not have identified all relevant issued patents or pending patent applications. We cannot provide assurance that our proposed products in this area will not ultimately be held to infringe one or more valid claims owned by third parties which may exist or come to exist in the future or that in such case we will be able to obtain a license from such parties on acceptable terms.

We cannot guarantee that our technologies will not conflict with the rights of others. In some foreign jurisdictions, we could become involved in opposition proceedings, either by opposing the validity of others' foreign patents or by persons opposing the validity of our foreign patents.

We may also face frivolous litigation or lawsuits from various competitors or from litigious securities attorneys. The cost of any litigation or other proceeding relating to these areas, even if deemed frivolous or resolved in our favor, could be substantial and could distract management from its business. Uncertainties resulting from initiation and continuation of any litigation could have a material adverse effect on our ability to continue our operations.

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***If we infringe the rights of others, we could be prevented from selling products or forced to pay damages.***

If our products, methods, processes, and other technologies are found to infringe the rights of other parties, we could be required to pay damages or may be required to cease using the technology or to license rights from the prevailing party. Any prevailing party may be unwilling to offer us a license on commercially acceptable terms.

***We cannot be certain we will be able to obtain patent protection to protect our product candidates and technology.***

We cannot be certain that all patents applied for will be issued. If a third party has also filed a patent application relating to an invention claimed by us or one or more of our licensors, we may be required to participate in an interference or derivation proceeding declared or instituted by the United States Patent and Trademark Office, which could result in substantial uncertainties and cost for us, even if the eventual outcome is favorable to us. The degree of future patent protection for our product candidates and technology is uncertain. For example:

● we, or our licensors, might not have been the first to make the inventions covered by our issued patents, or pending or future patent applications;

● we, or our licensors, might not have been the first to file patent applications for the inventions;

● others may independently develop duplicative, similar or alternative technologies;

● it is possible that our patent applications will not result in an issued patent or patents, or that the scope of protection granted by any patents arising from our patent applications will be significantly narrower than expected;

● any patents under which we hold ultimate rights may not provide us with a basis for commercially viable products, may not provide us with any competitive advantages or may be challenged by third parties as not infringed, invalid, or unenforceable under United States or foreign laws;

● any patent issued to us in the future or under which we hold rights may not be valid or enforceable; or

● we may develop additional technologies that are not patentable, and which may not be adequately protected through trade secrets; for example, if a competitor independently develops duplicative, similar, or alternative technologies.

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In addition, disputes may arise regarding intellectual property subject to a license agreement, including:

● the scope of rights granted under the license agreement and other interpretation-related issues;

● the extent to which our technology, products, methods and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement;

● our diligence obligations under the license agreement and what activities satisfy those obligations;

● if a third party expresses interest in an area under a license that we are not pursuing, under the certain terms of our license agreement, we may be required to sublicense rights in that area to the third party, and that sublicense could harm our business; and

● the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us.

If disputes over the intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates.

We may need to obtain licenses from third parties to advance our research to allow commercialization of our product candidates. We may fail to obtain any of these licenses at a reasonable cost or on reasonable terms, if at all. In that event, we would be unable to further develop and commercialize one or more of our product candidates, which could harm our business significantly.

***We may infringe the intellectual property rights of others, which may prevent or delay our product development efforts and stop us from commercializing or increase the costs of commercializing our product candidates.***

Our success will depend in part on our ability to operate without infringing the proprietary rights of third parties. We cannot guarantee that our products or product candidates, or manufacture or use of our products or product candidates, will not infringe third-party patents. Furthermore, a third party may claim that we are using inventions covered by the third party's patent rights and may go to court to stop us from engaging in our normal operations and activities, including making or selling our product candidates or products. These lawsuits are costly and could affect our results of operations and divert the attention of managerial and scientific personnel. Some of these third parties may be better capitalized and have more resources than us. There is a risk that a court would decide that we are infringing the third party's patents and would order us to stop the activities covered by the patents. In that event, we may not have a viable way to get around the patent and may need to halt commercialization of the relevant product candidate(s) or product(s). In addition, there is a risk that a court will order us to pay the other party damages for having violated the other party's patents. In addition, we may be obligated to indemnify our licensors and collaborators against certain intellectual property infringement claims brought by third parties, which could require us to expend additional resources. The aerospace and technology industries have produced a proliferation of patents, and it is not always clear to industry participants, including us, which patents cover various types of products or methods. The coverage of patents is subject to interpretation by the courts, and the interpretation is not always uniform.

If we are sued for patent infringement, we would need to demonstrate that our products or methods either do not infringe the claims of the relevant patent or that the patent claims are invalid or unenforceable, and we may not be able to do this. Proving invalidity is difficult. For example, in the United States, proving invalidity requires a showing of clear and convincing evidence to overcome the presumption of validity enjoyed by issued patents. Even if we are successful in these proceedings, we may incur substantial costs and divert management's time and attention in pursuing these proceedings, which could have a material adverse effect on us. If we are unable to avoid infringing the patent rights of others, we may be required to seek a license, which may not be available, and then we will have to defend an infringement action or challenge the validity of the patent in court. Patent litigation is costly and time consuming. We may not have sufficient resources to bring these actions to a successful conclusion. In addition, if we do not obtain a license, fail to develop or obtain non-infringing technology, fail to defend an infringement action successfully or have infringed patents declared invalid or unenforceable, we may incur substantial monetary damages, encounter significant delays in bringing our product candidates to market and be precluded from manufacturing or selling our product candidates.

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We cannot be certain that others have not filed patent applications for technology covered by our pending applications, or that we were the first to invent the technology, because:

● some patent applications in the United States may be maintained in secrecy until the patents are issued;

● patent applications in the United States are typically not published until 18 months after the priority date; and

● publications in scientific literature often lag behind actual discoveries.

Our competitors may have filed, and may in the future file, patent applications covering technology similar to ours. Any such patent applications may have priority over our patent applications, which could further require us to obtain rights to issued patents covering such technologies. If another party has filed US patent applications on inventions similar to ours that claims priority to any applications filed prior to the priority dates of our applications, we may have to participate in an interference proceeding declared or a derivation proceed instituted by the USPTO to determine priority of invention in the United States. The costs of these proceedings could be substantial, and it is possible that such efforts would be unsuccessful if, unbeknownst to us, the other party had independently arrived at the same or similar inventions prior to our own inventions, resulting in a loss of our U.S. patent position with respect to such inventions. Other countries have similar laws that permit secrecy of patent applications, and thus the third party's patent or patent application may be entitled to priority over our applications in such jurisdictions.

Some of our competitors may be able to sustain the costs of complex patent litigation more effectively than we can because they have substantially greater resources. In addition, any uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect on our ability to raise the funds necessary to continue our operations.

***We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed alleged trade secrets.***

As is common in the aerospace and technology industries, we may employ individuals who were previously employed at aerospace and technology companies, including our competitors or potential competitors. Although we try to ensure that our employees, consultants and independent contractors do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of their former employers. Litigation may be necessary to defend against these claims. If we fail to defend any such claims, in addition to paying monetary damages, we could lose valuable intellectual property rights or personnel, which could adversely impact our business. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management.

***Our intellectual property may not be sufficient to protect our products from competition, which may negatively affect our business as well as limit our partnership or acquisition appeal.***

We may be subject to competition despite the existence of intellectual property we license, or we or our joint ventures own. We can give no assurance that our intellectual property will be sufficient to prevent third parties from designing around the patents we own or license and developing and commercializing competitive products. The existence of competitive products that avoid our intellectual property could materially adversely affect our operating results and financial condition. Furthermore, limitations, or perceived limitations, in our intellectual property may limit the interest of third parties to partner, collaborate or otherwise transact with us if third parties perceive a higher than acceptable risk to commercialization of our products or future products.

Our approach involves filing patent applications covering new methods of use and/or new formulations of previously known, studied and/or marketed devices. Although the protection afforded by patents issued from our patent applications may be significant, when looking at our patents' ability to block competition, the protection offered by our patents may be, to some extent, more limited than the protection provided by patents claiming the composition of matter previously unknown. If a competitor were able to successfully design around any method of use and formulation patents we may have in the future, our business and competitive advantage could be significantly affected.

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We may elect to sue a third party, or otherwise make a claim, alleging infringement or other violation of patents, trademarks, trade dress, copyrights, trade secrets, domain names or other intellectual property rights that we either own or license. If we do not prevail in enforcing our intellectual property rights in this type of litigation, we may be subject to:

● paying monetary damages related to the legal expenses of the third party;

● facing additional competition that may have a significant adverse effect on our product pricing, market share, business operations, financial condition, and the commercial viability of our products; and

● restructuring our company or delaying or terminating select business opportunities, including, but not limited to, research and development, and commercialization activities, due to a potential deterioration of our financial condition or market competitiveness.

A third party may also challenge the validity, enforceability or scope of the intellectual property rights that we license or own; and the result of these challenges may narrow the claim scope of or invalidate patents that are integral to our product candidates in the future. There can be no assurance that we will be able to successfully defend patents we own or licensed in an action against third parties due to the unpredictability of litigation and the high costs associated with intellectual property litigation, amongst other factors.

The laws of some jurisdictions do not protect intellectual property rights to the same extent as the laws or rules and regulations in the United States and Europe, and many companies have encountered significant difficulties in protecting and defending such rights in such jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets and other intellectual property protection, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally. Proceedings to enforce our patent rights in other jurisdictions, whether or not successful, could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated, rendered unenforceable or interpreted narrowly and our patent applications at risk of not issuing, and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license. Furthermore, while we intend to protect our intellectual property rights in our expected significant markets, we cannot ensure that we will be able to initiate or maintain similar efforts in all jurisdictions in which we may wish to market our products or product candidates. Accordingly, our efforts to protect our intellectual property rights in such countries may be inadequate, which may have an adverse effect on our ability to successfully commercialize our product candidates in all of our expected significant foreign markets. If we or our licensors encounter difficulties in protecting, or are otherwise precluded from effectively protecting, the intellectual property rights important for our business in such jurisdictions, the value of these rights may be diminished, and we may face additional competition from others in those jurisdictions.

Changes to patent law, for example the Leahy-Smith America Invests Act, AIA or Leahy-Smith Act, of 2011 and the Patent Reform Act of 2009 and other future article of legislation in the U.S., may substantially change the regulations and procedures surrounding patent applications, issuance of patents, prosecution of patents, challenges to patent validity, and patent enforcement. We can give no assurances that our patents and those of our licensor(s) can be defended or will protect us against future intellectual property challenges, particularly as they pertain to changes in patent law and future patent law interpretations.

In addition, enforcing and maintaining our intellectual property protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by the U.S. Patent and Trademark Office and courts, and foreign government patent agencies and courts, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

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***If we are not able to protect and control our unpatented trade secrets, know-how and other technological innovation, we may suffer competitive harm.***

We also rely on proprietary trade secrets and unpatented know-how to protect our research and development activities, particularly when we do not believe that patent protection is appropriate or available. However, trade secrets are difficult to protect. We will attempt to protect our trade secrets and unpatented know-how by requiring our employees, consultants, collaborators, and advisors to execute a confidentiality and non-use agreement. We cannot guarantee that these agreements will provide meaningful protection, that these agreements will not be breached, that we will have an adequate remedy for any such breach, or that our trade secrets will not otherwise become known or independently developed by a third party. Our trade secrets, and those of our present or future collaborators that we utilize by agreement, may become known or may be independently discovered by others, which could adversely affect the competitive position of our product candidates.

***We may incur substantial costs enforcing our patents, defending against third-party patents, invalidating third-party patents or licensing third-party intellectual property, as a result of litigation or other proceedings relating to patent and other intellectual property rights.***

We may be unaware of or unfamiliar with prior art and/or interpretations of prior art that could potentially impact the validity or scope of our patents, pending patent applications, or patent applications that we will file. We may have elected, or elect now or in the future, not to maintain or pursue intellectual property rights that, at some point in time, may be considered relevant to or enforceable against a competitor.

We take efforts and enter into agreements with employees, consultants, collaborators, and advisors to confirm ownership and chain of title in intellectual property rights. However, an inventorship or ownership dispute could arise that may permit one or more third parties to practice or enforce our intellectual property rights, including possible efforts to enforce rights against us.

We may not have rights under some patents or patent applications that may cover technologies that we use in our research, product candidates and particular uses thereof that we seek to develop and commercialize, as well as synthesis of our product candidates. Third parties may own or control these patents and patent applications in the United States and elsewhere. These third parties could bring claims against us or our collaborators that would cause us to incur substantial expenses and, if successful against us, could cause us to pay substantial damages. Further, if a patent infringement suit were brought against us or our collaborators, we or they could be forced to stop or delay research, development, manufacturing or sales of the product or product candidate that is the subject of the suit. We or our collaborators therefore may choose to seek, or be required to seek, a license from the third-party and would most likely be required to pay license fees or royalties or both. These licenses may not be available on acceptable terms, or at all. Even if we or our collaborators were able to obtain a license, the rights may be nonexclusive, which would give our competitors access to the same intellectual property. Ultimately, we could be prevented from commercializing a product or product candidate or forced to cease some aspect of our business operations, as a result of patent infringement claims, which could harm our business.

There has been substantial litigation and other legal proceedings regarding patent and other intellectual property rights in the broad technology industry. Although we are not currently a party to any patent litigation or any other adversarial proceeding, including any interference or derivation proceeding declared or instituted before the United States Patent and Trademark Office, regarding intellectual property rights with respect to our products, product candidates and technology, it is possible that we may become so in the future. We are not currently aware of any actual or potential third-party infringement claim involving our product candidates. The cost to us of any patent litigation or other proceeding, even if resolved in our favor, could be substantial. The outcome of patent litigation is subject to uncertainties that cannot be adequately quantified in advance, including the demeanor and credibility of witnesses and the identity of the adverse party, especially in the aerospace and technology related patent cases that may turn on the testimony of experts as to technical facts upon which experts may reasonably disagree. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their substantially greater financial resources. If a patent or other proceeding is resolved against us, we may be enjoined from researching, developing, manufacturing or commercializing our products or product candidates without a license from the other party and we may be held liable for significant damages. We may not be able to obtain any required license on commercially acceptable terms or at all.

Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could harm our ability to compete in the marketplace. Patent litigation and other proceedings may also absorb significant management time.

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***If we are unable to protect our intellectual property rights, our competitors may develop and market products with similar features that may reduce demand for our potential products.***

The following factors are important to our success:

● receiving patent protection for our product candidates;

● preventing others from infringing our intellectual property rights; and

● maintaining our patent rights and trade secrets.

We will be able to protect our intellectual property rights in patents and trade secrets from unauthorized use by third parties only to the extent that such intellectual property rights are covered by valid and enforceable patents or are effectively maintained as trade secrets.

Because issues of patentability involve complex legal and factual questions, the issuance, scope and enforceability of patents cannot be predicted with certainty. Patents may be challenged, invalidated, found unenforceable, or circumvented. United States patents and patent applications may be subject to interference and derivation proceedings, United States patents may also be subject to post grant proceedings, including re-examination, derivation, *Inter Partes* Review and Post Grant Review, in the United States Patent and Trademark Office and foreign patents may be subject to opposition or comparable proceedings in corresponding foreign patent offices, which could result in either loss of the patent or denial of the patent application or loss or reduction in the scope of one or more of the claims of the patent or patent application. In addition, such interference, derivation, post grant and opposition proceedings may be costly. Thus, any patents that we own or license from others may not provide any protection against competitors. Furthermore, an adverse decision in an interference or derivation proceeding can result in a third-party receiving the patent rights sought by us, which in turn could affect our ability to market a potential product to which that patent filing was directed. Our pending patent applications, those that we may file in the future, or those that we may license from third parties may not result in patents being issued. If issued, they may not provide us with proprietary protection or competitive advantages against competitors with similar technology. Furthermore, others may independently develop similar technologies or duplicate any technology that we have developed. Many countries, including certain countries in Europe, have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. For example, compulsory licenses may be required in cases where the patent owner has failed to "work" the invention in that country, or the third-party has patented improvements. In addition, many countries limit the enforceability of patents against government agencies or government contractors. In these countries, the patent owner may have limited remedies, which could materially diminish the value of our patents. Moreover, the legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents and other intellectual property protection, which makes it difficult to stop infringement.

In addition, our ability to enforce our patent rights depends on our ability to detect infringement. It is difficult to detect infringers who do not advertise or otherwise promote the compositions that are used in their products. Any litigation to enforce or defend our patent rights, even if we prevail, could be costly and time-consuming and would divert the attention of management and key personnel from business operations.

We will also rely on trade secrets, know-how and technology, which are not protected by patents, to maintain our competitive position. We will seek to protect this information by entering into confidentiality agreements with parties that have access to it, such as strategic partners, collaborators, employees, contractors and consultants. Any of these parties may breach these agreements and disclose our confidential information or our competitors might learn of the information in some other way. If any trade secret, know-how or other technology not protected by a patent were disclosed to, or independently developed by, a competitor, our business, financial condition and results of operations could be materially adversely affected.

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**RISKS RELATED TO OWNING OUR COMMON STOCK**

***We do not intend to pay cash dividends on our common stock in the foreseeable future.***

We currently anticipate that we will retain all future earnings, if any, to finance the growth and development of our business and do not anticipate paying cash dividends on our common stock in the foreseeable future. Any payment of cash dividends will depend upon our financial condition, capital requirements, earnings and other factors deemed relevant by our board of directors.

***If we are unable to establish appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations, result in the restatement of our financial statements, harm our operating results, subject us to regulatory scrutiny and sanction, cause investors to lose confidence in our reported financial information and have a negative effect on the market price for shares of our Common Stock.***

Effective internal controls are necessary for us to provide reliable financial reports and to effectively prevent fraud. We maintain a system of internal control over financial reporting, which is defined as a process designed by, or under the supervision of, our principal executive officer and principal financial officer, or persons performing similar functions, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

As a public company, we have significant additional requirements for enhanced financial reporting and internal controls. We are required to document and test our internal control procedures in order to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, which requires annual management assessments of the effectiveness of our internal controls over financial reporting. The process of designing and implementing effective internal controls is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to expend significant resources to maintain a system of internal controls that is adequate to satisfy our reporting obligations as a public company.

We cannot assure you that we will, in the future, identify areas requiring improvement in our internal control over financial reporting. We cannot assure you that the measures we will take to remediate any areas in need of improvement will be successful or that we will implement and maintain adequate controls over our financial processes and reporting in the future as we continue our growth. If we are unable to establish appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations, result in the restatement of our financial statements, harm our operating results, subject us to regulatory scrutiny and sanction, cause investors to lose confidence in our reported financial information and have a negative effect on the market price for shares of our Common Stock.

***The price of our common stock may be volatile and fluctuate substantially.***

Our stock price has been and is likely to continue to be volatile. The stock market in general and the market for companies with smaller public floats in particular have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. As a result of this volatility, our stockholders may not be able to sell our common stock at or above the price they paid for it. The market price for our common stock may be influenced by many factors, including:

· the timing, results and capacity of our manufacturing operations;

· the success of existing or new competitive products or technologies;

· announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures, collaborations or capital commitments;

· establishment or termination of collaboration of our joint ventures or development programs;

· failure of discontinuation of any of our development programs;

· the success of our competitors' new products entering the marketplace;

· regulatory or legal developments in the United States and other countries;

· developments or disputes concerning patent applications, issued patents or other proprietary rights;

· the recruitment or departure of key personnel;

· the level of expenses related to any of our product candidates or development programs;

· the results of our efforts to discover, develop, acquire or license additional products;

· actual or anticipated changes in estimates as to financial results or production and development timelines;

· announcement or expectation of additional financing efforts;

· sales of our common stock by us, our insiders or other stockholders;

· variations in our financial results or those of companies that are perceived similar to us;

· changes in estimates or recommendations by securities analysts, if any, that cover our stock; and

· general economic, industry and market conditions.

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***Our directors and executive officers can exert significant control over our business and affairs and have actual or potential interests that may depart from those of investors in the subsequent financings.***

The interests of our directors and officers may differ from the interests of our other stockholders, including purchasers of our securities, in future financings. As a result, based on their board seats and offices, such persons will have significant influence over and control all corporate actions requiring stockholder approval, irrespective of how the Company's other stockholders, may vote, including the following actions:

● to elect or defeat the election of our directors;

● to amend or prevent amendment of our Amended and Restated Articles of Incorporation or By-laws;

● to effect or prevent a merger, sale of assets or other corporate transaction; and

● to control the outcome of any other matter submitted to our stockholders for vote.

This concentration of ownership by itself may have the effect of impeding a merger, consolidation, takeover or other business consolidation, or discouraging a potential acquirer from making a tender offer for the Common Stock which in turn could reduce our stock price or prevent our stockholders from realizing a premium over our stock price.

***We may issue more shares in a future financing or pursuant to existing agreements which will result in substantial dilution.***

Our Amended and Restated Articles of Incorporation authorize the issuance of a maximum of 5,000,000,000 shares of Common Stock and a maximum of 100,000,000 shares of Preferred Stock. Any future merger or acquisition effected by us would result in the issuance of additional securities without stockholder approval and the substantial dilution in the percentage of our Common Stock held by our then existing stockholders. Moreover, the Common Stock issued in any such merger or acquisition transaction may be valued on an arbitrary or non-arm's-length basis by our management, resulting in an additional reduction in the percentage of Common Stock held by our then existing stockholders. Additionally, we expect to seek additional financing in order to provide working capital to the operating business. Our Board of Directors has the power to issue any or all of such authorized but unissued shares without stockholder approval. To the extent that additional shares of Common Stock or Preferred Stock are issued in connection with and following a business combination or otherwise, dilution to the interests of our stockholders will occur and the rights of the holders of Common Stock might be materially and adversely affected.

***Our Board of Directors is authorized to issue Preferred Stock without obtaining shareholder approval.***

Our Amended and Restated Articles of Incorporation authorize the issuance of up to 100,000,000 shares of Preferred Stock with designations, rights and preferences determined from time to time by the Board of Directors. Accordingly, our Board of Directors is empowered, without stockholder approval, to issue Preferred Stock with dividend, liquidation, conversion, voting, or other rights which could adversely affect the voting power or other rights of the holders of the Common Stock. In the event of issuance, the Preferred Stock could be utilized, under certain circumstances, as a method of discouraging, delaying or preventing a change in control of the Company. Although we have no present intention to issue any shares of Preferred Stock, there can be no assurance that the Company will not do so in the future.

***An active trading market for our common stock may not develop, and you may not be able to sell your common stock.***

There has been a limited public market for our common stock. An active trading market for shares of our common stock may never develop or be sustained following this offering. If an active trading market does not develop, you may have difficulty selling your shares of common stock at an attractive price, or at all. An inactive market may also impair our ability to raise capital by selling our common stock, and it may impair our ability to attract and motivate our employees through equity incentive awards and our ability to acquire other companies, products or technologies by using our common stock as consideration.

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***Market and economic conditions may negatively impact our business, financial condition and share price.***

Concerns over medical epidemics, energy costs, geopolitical issues such as the issues in the Ukraine and the Middle East, the U.S. mortgage market and a deteriorating real estate market, unstable global credit markets and financial conditions, and volatile oil prices have led to periods of significant economic instability, diminished liquidity and credit availability, declines in consumer confidence and discretionary spending, diminished expectations for the global economy and expectations of slower global economic growth, increased unemployment rates, and increased credit defaults in recent years. Our general business strategy may be adversely affected by any such economic downturns such as public health conditions, volatile business environments and continued unstable or unpredictable economic, market, and geopolitical conditions, such as the current situation in the Ukraine. If these conditions continue to deteriorate or do not improve, it may make any necessary debt or equity financing more difficult to complete, more costly, and more dilutive. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance, and share price and could require us to delay or abandon development or commercialization plans.

***Future sales and issuances of our common stock could result in additional dilution of the percentage ownership of our stockholders and could cause our share price to fall.***

We expect that significant additional capital will be needed in the future to continue our planned operations, including increased marketing, hiring new personnel, commercializing our product, and continuing activities as an operating public company. To the extent we raise additional capital by issuing equity securities, our stockholders may experience substantial dilution. We may sell common stock, convertible securities or other equity securities in one or more transactions at prices and in a manner we determine from time to time. If we sell common stock, convertible securities or other equity securities in more than one transaction, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution for our existing stockholders, and new investors could gain rights superior to our existing stockholders.

***We may be at risk of securities class action litigation.***

We may be at risk of securities class action litigation. If we face such litigation, it could result in substantial costs and a diversion of management's attention and resources, which could harm our business and result in a decline in the market price of our common stock.

***Our Amended and Restated Articles of Incorporation and our Amended and Restated Bylaws, and Nevada law may have anti-takeover effects that could discourage, delay or prevent a change in control, which may cause our stock price to decline.***

Our Amended and Restated Certificate of Incorporation and our Amended and Restated Bylaws, and Nevada law could make it more difficult for a third party to acquire us, even if closing such a transaction would be beneficial to our stockholders. We are authorized to issue up to 100,000,000 shares of preferred stock. This preferred stock may be issued in one or more series, the terms of which may be determined at the time of issuance by our Board of Directors without further action by stockholders. The terms of any series of preferred stock may include voting rights (including the right to vote as a series on particular matters), preferences as to dividend, liquidation, conversion and redemption rights and sinking fund provisions. The issuance of any preferred stock could materially adversely affect the rights of the holders of our common stock, and therefore reduce the value of our common stock. In particular, specific rights granted to future holders of preferred stock could be used to restrict our ability to merge with, or sell our assets to, a third party and thereby preserve control by the present management.

Provisions of our Articles of Incorporation and our Amended and Restated Bylaws and Nevada law also could have the effect of discouraging potential acquisition proposals or making a tender offer or delaying or preventing a change in control, including changes a stockholder might consider favorable. Such provisions may also prevent or frustrate attempts by our stockholders to replace or remove our management. In particular, the certificate of incorporation and bylaws and Nevada law, as applicable, among other things:

● provide the board of directors with the ability to alter the bylaws without stockholder approval;

● place limitations on the removal of directors;

● establishing advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted upon at stockholder meetings; and

● provide that vacancies on the board of directors may be filled by a majority of directors in office, although less than a quorum.

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***Financial reporting obligations of being a public company in the U.S. are expensive and time-consuming, and our management will be required to devote substantial time to compliance matters.***

As a publicly traded company we incur significant additional legal, accounting and other expenses. The obligations of being a public company in the U.S. require significant expenditures and will place significant demands on our management and other personnel, including costs resulting from public company reporting obligations under the Exchange Act and the rules and regulations regarding corporate governance practices, including those under the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, and the listing requirements of the stock exchange on which our securities are listed. These rules require the establishment and maintenance of effective disclosure and financial controls and procedures, internal control over financial reporting and changes in corporate governance practices, among many other complex rules that are often difficult to implement, monitor and maintain compliance with. Moreover, despite recent reforms made possible by the JOBS Act, the reporting requirements, rules, and regulations will make some activities more time-consuming. In addition, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance. Our management and other personnel will need to devote a substantial amount of time to ensure that we comply with all of these requirements and to keep pace with new regulations, otherwise we may fall out of compliance and risk becoming subject to litigation or being delisted, among other potential problems.

***There will be a substantial number of common shares eligible for future sale from the conversion of Series A Preferred shares.***

There were 664,996 shares of our Series A Preferred Stock outstanding as of June 30, 2025. Each preferred share is convertible into 1,000 common shares. Once converted, these shares are eligible for resale under Rule 144. The sale, or availability for sale, of the foregoing shares could adversely affect the market price of our common stock or impair our ability to raise capital through future sales of our common stock.

**Item 1B. Unresolved Staff Comments**

Not Applicable.

**Item 1C. Cybersecurity**

**Risk Management and Security**

The Company's Cybersecurity Policy outlines our guidelines and provisions for preserving the security of our data and technology infrastructure. The more the Company relies on technology to collect, store and manage information, the more vulnerable to severe security breaches the Company becomes. Human errors, hacker attacks and system malfunctions could cause significant financial damage and may jeopardize the Company's reputation. For this reason, the Company has implemented extensive security measures, has prepared instructions in order to mitigate security risks, and has outlined both provisions in this policy.

**Governance**

Our Board of Directors oversees our risk management, including our information and cybersecurity policies and risk assessments. Our management reports to our Board of Directors on information security as necessary, regarding any significant cybersecurity incidents.

**Item 2. Properties**

The Company's headquarters consists of leased office space located in the Research Park at Florida Atlantic University, 3651 FAU Blvd., Suite 400 Boca Raton, FL 33431.

**Item 3. Legal Proceedings**

On October 19, 2023, Xeriant filed a complaint in the United States Southern District of New York (Case no.1:23-cv-09200) against Auctus Fund LLC, to invalidate allegedly illegally designed contractual agreements, including contesting the enforceability of the related note and amendments, and to set aside improper and unlawful securities transactions effectuated in violation of Section 15(a)(1) of the Exchange Act (15 U.S.C. § 78o(a)(1)) by the Defendant, alleging breaches of fiduciary duty and related claims. On February 9, 2024, the case was dismissed. The Company filed a Notice of Civil Appeal on March 13, 2024, primarily based on public welfare because of the pending litigation between the SEC and Auctus Fund Management, LLC, which complaint was filed on June 1, 2023. On June 19, 2024, the Company filed an appeal in the United States Court of Appeals for the Second Circuit (Case no. 24-682-cv), which is still pending. On June 25, 2025, the appellate court affirmed the lower court's decision. Xeriant's counsel is in the process of filing an appeal to the United States Supreme Court to challenge this decision, which went against precedent decisions in other districts. In addition to the pending legal matters, the Company is currently in discussions with Auctus in an attempt to come up with a settlement. Xeriant's ongoing lawsuit against XTI Aircraft Company has a connection to the Auctus matter in that the Company's obligations to Auctus were, according to Xeriant's complaint, to be assumed by XTI as provided in a Letter Agreement. The foregoing descriptions of the legal actions do not purport to be complete and are subject in their entirety by the full text of the court filings.

On December 6, 2023, the Company initiated legal proceedings against XTI Aircraft Company in the Federal District Court for the Southern District of New York (Case no. 1:23-cv-10656-JPO), along with other unnamed defendants, seeking to enforce the terms of the Letter Agreement, alleging fraudulent acts, deceptive maneuvers and intentional breaches, and seeking a range of remedies. These include the recovery of losses, expenses, attorneys' fees, punitive damages and a compensatory damage award exceeding $500 million. The legal action aims to address the alleged misconduct comprehensively and to protect the Company's interests in the face of XTI's actions. The foregoing description of the legal action does not purport to be complete and is subject in its entirety by the full text of the complaint, a copy of which was filed in an 8-K on December 12, 2023, Exhibit 99.1. On February 29, 2024, the Company filed a Second Amended Complaint alleging seven counts including intentional fraud, fraudulent concealment, breach of contract, unjust enrichment, unfair competition, quantum meruit, and misappropriation of confidential information. XTI filed a Motion to Dismiss on March 13, 2024, seeking to dismiss all the Company's claims except for breach of contract. The Company filed a Memorandum of Law in Opposition to XTI's Motion to Dismiss on April 10, 2024, and on January 14, 2025, the Court agreed with Xeriant's position that its claims were validly alleged and denied all of XTI's arguments in their entirety. On February 18, 2025, XTI filed its answer to the Company's Second Amended Complaint adding two counter claims, including breach of fiduciary duty and breach of contract. The Company responded on March 18, 2025, moving to dismiss both counterclaims and on April 1, 2025, XTI filed a Second Amended Answer and Counterclaims to the Second Amended Complaint. On April 28, 2025, the Company filed a Motion to Dismiss XTI's Second Amended Answer and Counterclaims. On May 12, 2025, XTI filed a Memorandum of Law in Opposition to Xeriant's Motion to Dismiss XTI's Second Amended Counterclaim. On May 20, 2025, Xeriant filed a Memorandum of Law in Support of its Motion to Dismiss XTI's Second Amended Answer with Counterclaims. The foregoing descriptions of the legal actions do not purport to be complete and are subject in their entirety by the full text of the court filings.

On July 2, 2025, the Company was served with a complaint from Midland Compounding for breach of contract in the payment of an invoice in the amount of $57,600 related to a purchase order for consulting services related to improving the Company's intumescent fire-retardant layer for NEXBOARD. On August 20, 2025, the Company filed an Answer and Affirmative Defense, essentially stating that Midland Compounding had not performed the services it was contracted to provide.

To our knowledge, none of our directors, officers, five (5%) shareholders or affiliates are party to any legal proceedings that would have a material adverse effect on our business, financial condition, or operating results.

**Item 4. Mine Safety Disclosures.**

Not Applicable.

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**PART II**

**Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.** 

**Market Information**

Our common stock is quoted on OTC Markets under the symbol "XERI."

Shares of our common stock have historically been thinly traded, and as a result, our stock price as quoted by OTC Markets may not reflect an actual or perceived value. The following table sets forth the approximate high and low bid prices for our common stock for the last two fiscal years and interim periods. The quotations reflect interdealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.

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| **Period** | **High Bid** | **Low Bid** |
| July 1, 2024, through September 30, 2024 | $0.025 | $0.012 |
| October 1, 2024, through December 31, 2024 | $0.020 | $0.019 |
| January 1, 2025, through March 31, 2025 | $0.030 | $0.025 |
| April 1, 2025, through June 30, 2025 | $0.015 | $0.014 |
| **Period** | **High Bid** | **Low Bid** |
| July 1, 2023, through September 30, 2023 | $0.052 | $0.020 |
| October 1, 2023, through December 31, 2023 | $0.038 | $0.017 |
| January 1, 2024, through March 31, 2024 | $0.022 | $0.014 |
| April 1, 2024, through June 30, 2024 | $0.040 | $0.017 |

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**Our Transfer Agent**

The Company's stock transfer agent is ClearTrust, LLC ("ClearTrust"). ClearTrust's address is 16540 Pointe Village Drive, Suite 210, Lutz, Florida 33558 and their telephone number is (813) 235-4490. The transfer agent is responsible for all record-keeping and administrative functions in connection with our shares of common stock.

**Holders**

As of June 30, 2025, there were 220 holders of record of our common stock.

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**Dividends**

We have not declared any cash dividends, nor do we intend to do so in the foreseeable future.

**Penny Stock Regulations**

The SEC has adopted regulations which generally define so-called "penny stocks" to be an equity security that has a market price less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exemptions. The Registrant's common stock is a "penny stock" and is subject to Rule 15g-9 under the Exchange Act, or the Penny Stock Rule. This rule imposes additional sales practice requirements on broker-dealers that sell such securities to persons other than established customers and "accredited investors" (generally, individuals with a net worth in excess of $1,000,000 or annual incomes exceeding $200,000, or $300,000 together with their spouses). For transactions covered by Rule 15g-9, a broker-dealer must make a special suitability determination for the purchaser and have received the purchaser's written consent to the transaction prior to sale. As a result, this rule may affect the ability of broker-dealers to sell our securities and may affect the ability of purchasers to sell any of our securities in the secondary market, thus possibly making it more difficult for us to raise additional capital.

For any transaction involving a penny stock, unless exempt, the rules require delivery, prior to any transaction in penny stock, of a disclosure schedule required by the SEC relating to the penny stock market. Disclosure is also required to be made about sales commissions payable to both the broker-dealer and the registered representative and current quotations for the securities. Finally, monthly statements are required to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stock.

There can be no assurance that the Registrant's common stock will qualify for exemption from the Penny Stock Rule. Even if the Registrant's common stock were exempt from the Penny Stock Rule, the Registrant would remain subject to Section 15(b)(6) of the Exchange Act, which gives the SEC the authority to restrict any person from participating in a distribution of penny stock, if the SEC finds that such a restriction would be in the public interest.

**Securities Authorized for Issuance under Equity Compensation Plans**

The Registrant does not have any equity compensation plans and accordingly there are no shares authorized for issuance under an equity compensation plan.

**Item 6. Reserved.**

**Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations**

*The following discussion of our financial condition and results of operations should be read in conjunction with the audited and unaudited consolidated financial statements and the notes to those statements included elsewhere in this Report. This discussion contains forward-looking statements that involve risks and uncertainties. You should specifically consider the various risk factors identified in this Report that could cause actual results to differ materially from those anticipated in these forward-looking statements.*

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**Financial Results**

The following discussion of the results of operations constitutes management's review of the factors that affected the financial and operating performance for the fiscal years ended June 30, 2025 and 2024. This discussion should be read in conjunction with the consolidated financial statements and notes thereto contained elsewhere in this report. The Company has a June 30 fiscal year end.

**Executive Summary**

Xeriant, Inc. is dedicated to the discovery, development and commercialization of disruptive technologies in advanced materials and aerospace which can be successfully integrated and commercialized for deployment across multiple industrial sectors. We seek to partner with and acquire strategic interests in visionary companies that accelerate this mission. The Company's advanced materials line is marketed under the DUREVER™ brand, and includes NEXBOARD™, an eco-friendly, patent-pending composite construction panel made from plastic and fiber waste, designed to replace products such as drywall, plywood, OSB, MDF, MgO board and other materials used in construction.

***Joint Venture with XTI Aircraft***

Effective May 31, 2021, the Company entered into a Joint Venture with XTI Aircraft Company ("XTI"), named Eco-Aero, LLC, with the purpose of completing the preliminary design review ("PDR") of XTI's eVTOL fixed wing aircraft. XTI and the Company each own 50 percent of the XTI JV, and it is managed by a management committee consisting of five members, three appointed by the Company and two by XTI. The Company invested approximately $5.5 million into the joint venture after borrowing the funds from Auctus Fund LLC ("Auctus") through a Senior Secured Promissory Note, through an introduction from Maxim Group, LLC, the Company's investment banker at the time. The borrowed funds from Auctus were intended to be a bridge loan that would be resolved through an IPO (Initial Public Offering) and uplist to Nasdaq in a merger with XTI, which did not occur because XTI refused to move forward with the merger. The PDR was completed during the first quarter of 2022 according to XTI, which was the purpose of the joint venture.

On May 17, 2022, the Company signed a Letter Agreement with XTI related to the introduction of XTI to Inpixon, a Nasdaq-listed company. Under this Letter Agreement, if there was a combination or other transaction between XTI and Inpixon, Xeriant would receive compensation of 6 percent of XTI fully diluted pre-merger shares, and XTI would assume the obligations of the Company's Senior Secured Note with Auctus Fund, LLC. On May 31, 2023, the joint venture was terminated according to an Acceleration Event, which was twenty-four (24) months from the start of the joint venture. On June 5, 2023, after suspecting that the obligations under the Letter Agreement were possibly being evaded, the Company transmitted a formal demand letter to XTI requesting compliance with the provisions outlined in the Letter Agreement, and in accordance with section 8 of the JV Agreement with XTI. On July 25, 2023, Inpixon filed an 8-K, announcing their intention to merge with XTI having executed an Agreement of Plan and Merger with XTI. The filing also showed that XTI had engaged in a transaction with Inpixon on March 10, 2023, receiving $300,000 in funding, which was a compensation triggering event. Inpixon subsequently filed an S-4/A registration statement on October 6, 2023. On December 6, 2023, the Company initiated legal proceedings against XTI. See Litigation Section at Note 9 below for a summary of the related legal proceedings.

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*Stock Sales*

During the year ended June 30, 2025, the Company received $0 by selling shares of common stock.

*Convertible Notes Issued*

During the year ended June 30, 2025, the Company received $676,000 from the issuance of convertible debt.

*Litigation*

On October 19, 2023, the Company filed a complaint in the United States Southern District of New York (Case no.1:23-cv-09200) against Auctus Fund LLC, to invalidate allegedly illegally designed contractual agreements, including contesting the enforceability of the related note and amendments, and to set aside improper and unlawful securities transactions effectuated in violation of Section 15(a)(1) of the Exchange Act (15 U.S.C. § 78o(a)(1)) by the Defendant, alleging breaches of fiduciary duty and related claims. On February 9, 2024, the case was dismissed. The Company filed a Notice of Civil Appeal on March 13, 2024, primarily based on public welfare because of the pending litigation between the SEC and Auctus Fund Management, LLC, which complaint was filed on June 1, 2023. On June 19, 2024, the Company filed an appeal in the United States Court of Appeals for the Second Circuit (Case no. 24-682-cv), which is still pending. On June 25, 2025, the appellate court affirmed the lower court's decision. The Company's counsel is in the process of filing an appeal to the United States Supreme Court to challenge this decision, which went against precedent decisions in other districts. In addition to the pending legal matters, the Company is currently in discussions with Auctus in an attempt to come up with a settlement. The Company's ongoing lawsuit against XTI Aircraft Company has a connection to the Auctus matter in that the Company's obligations to Auctus were, according to the Company's complaint, to be assumed by XTI as provided in a Letter Agreement. The foregoing descriptions of the legal actions do not purport to be complete and are subject in their entirety by the full text of the court filings.<br>On December 6, 2023, the Company initiated legal proceedings against XTI Aircraft Company in the Federal District Court for the Southern District of New York (Case no. 1:23-cv-10656-JPO), along with other unnamed defendants, seeking to enforce the terms of the Letter Agreement, alleging fraudulent acts, deceptive maneuvers and intentional breaches, and seeking a range of remedies. These include the recovery of losses, expenses, attorneys' fees, punitive damages and a compensatory damage award exceeding $500 million. The legal action aims to address the alleged misconduct comprehensively and to protect the Company's interests in the face of XTI's actions. The foregoing description of the legal action does not purport to be complete and is subject in its entirety by the full text of the complaint, a copy of which was filed in an 8-K on December 12, 2023, Exhibit 99.1. On February 29, 2024, the Company filed a Second Amended Complaint alleging seven counts including intentional fraud, fraudulent concealment, breach of contract, unjust enrichment, unfair competition, quantum meruit, and misappropriation of confidential information. XTI filed a Motion to Dismiss on March 13, 2024, seeking to dismiss all the Company's claims except for breach of contract. The Company filed a Memorandum of Law in Opposition to XTI's Motion to Dismiss on April 10, 2024, and on January 14, 2025, the Court agreed with the Company's position that its claims were validly alleged and denied all of XTI's arguments in their entirety. On February 18, 2025, XTI filed its answer to the Company's Second Amended Complaint adding two counter claims, including breach of fiduciary duty and breach of contract. The Company responded on March 18, 2025, moving to dismiss both counterclaims and on April 1, 2025, XTI filed a Second Amended Answer and Counterclaims to the Second Amended Complaint. On April 28, 2025, the Company filed a Motion to Dismiss XTI's Second Amended Answer and Counterclaims. On May 12, 2025, XTI filed a Memorandum of Law in Opposition to Xeriant's Motion to Dismiss XTI's Second Amended Counterclaim. On May 20, 2025, the Company filed a Memorandum of Law in Support of its Motion to Dismiss XTI's Second Amended Answer with Counterclaims. The foregoing descriptions of the legal actions do not purport to be complete and are subject in their entirety by the full text of the court filings.<br>On July 2, 2025, the Company was served with a complaint from Midland Compounding for breach of contract in the payment of an invoice in the amount of $57,600 related to a purchase order for consulting services related to improving the Company's intumescent fire-retardant layer for NEXBOARD. On August 20, 2025, the Company filed an Answer and Affirmative Defenses, essentially stating that Midland Compounding had not performed the services it was contracted to provide. <br>To our knowledge, none of our directors, officers, five (5%) shareholders or affiliates are party to any legal proceedings that would have a material adverse effect on our business, financial condition, or operating results.<br>

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**Fiscal Year 2025 Results of Operations Compared with Fiscal Year 2024** 

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| | | |
|:---|:---|:---|
|  | **For the years ended** | **For the years ended** |
|  | **June 30, 2025** | **June 30, 2024** |
| Operating expenses: |  |  |
| Consulting and advisory fees | $327991 | $731128) |
| Related party consulting fees | 438000 | 388000 |
| General and administrative expenses | 309107 | 282249 |
| Professional fees | 221119 | 308109) |
| Research and development expense | 69274 | 196422) |
| Total operating expenses | 1365491 | 1905908) |
| Operating loss | (1365491) | (1905908) |
| Other expenses: |  |  |
| Amortization of debt discount | (51006) | (19189) |
| Interest expense | (225566) | (1183885) |
| Loss on extinguishment of debt | (4835) | (20298) |
| Gain on extinguishment of debt |  | 28627 |
| Change in fair value of convertible bridge loans | - | (2448) |
| Total other (expense) | (281407) | (1197193) |
| Net loss | $(1646898) | $(3103101) |

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*Consulting and advisory fees*

Total consulting and advisory expenses were $327,991 and $731,128 for the years ended June 30, 2025 and 2024, respectively, a decrease of $403,137. The primary reason for the decrease was there were increased expenses due to stock issuances for advisory board and legal services in the amount of $374,906 in the prior period.

*Related Party Consulting Fees*

Total related party consulting fees were $438,000 and $388,000 for the years ended June 30, 2025 and 2024, respectively, an increase of $50,000. In addition to the consulting agreement amounts, the Company will pay additional consulting fees to related parties when the Company has increased available funds. In the current period, the Company had increased funds to pay consulting fees.

*General and administrative expenses*

Total general and administrative expenses were $309,107 and $282,249 for the years ended June 30, 2025 and 2024, respectively, an increase of $26,858. The primary reason for the increase was increased expenses related to our subsidiary BlueGreen Composites, LLC. Expenses for BlueGreen Composites, LLC, relate to testing and business development costs for the Company's advanced materials operations.

*Professional Fees*

Total professional fees were $221,119 and $308,109 for the years ended June 30, 2025 and 2024, respectively, a decrease of $86,990. The primary reason for the decrease was higher auditing fees relating to change in audit firms and excess fees charged by prior firm and higher legal costs in the prior period.

*Research and Development Expenses*

Total research and development expenses were $69,274 and $196,422 for the years ended June 30, 2025, and 2024, respectively, a decrease of $127,148. The primary reason for the decrease was increased research and development expenses related to testing and initial product development schedule in the prior period.

*Other (Expenses)*

Total other expenses consist of amortization of debt discount related to convertible notes, interest expense related to convertible notes, loss on extinguishment of debt, gain on extinguishment of debt and change in fair value of the convertible bridge loans. Total other expenses were $281,407 for the year ended June 30, 2025, compared to $1,197,193 for the year ended June 30, 2024, a decrease of $915,786. The primary reason for the decrease was in the prior period, the Company recorded default interest in the amount of $1,070,729 related to the Auctus note.

*Net loss*

Total net loss was $1,646,898 for the year ended June 30, 2025, compared to $3,103,101 for the year ended June 30, 2024, a decrease of $1,456,203. The decreased net loss was primarily related to less operating expenses in the current year offset by more interest expense in the prior year.

**Liquidity and Capital Resources**

The Company's consolidated financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. On June 30, 2025 and 2024, the Company had $44,850 and $653,117 in cash, respectively, and $8,712,005 and $8,661,248 in negative working capital, respectively. On June 30, 2025, the principal balance of the Auctus Senior Secured Promissory Note was $5,900,000. The Note matured on March 15, 2023, and the company has been in discussions with Auctus to resolve the liability. For the years ended June 30, 2025 and 2024, the Company had a net loss of $1,646,898 and $3,103,101, respectively. Continued losses may adversely affect the liquidity of the Company in the future. Therefore, the factors noted above raise substantial doubt about our ability to continue as a going concern. The recoverability of a major portion of the recorded asset amounts shown in the accompanying unaudited consolidated balance sheets is dependent upon continued operations of the Company, which in turn is dependent upon the Company's ability to raise additional capital, obtain financing and to succeed in its future operations. The unaudited consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. To implement its business plan, the Company must raise sufficient funds in the form of equity, debt, or a combination thereof. Until the Company develops profitable operations, it is dependent upon management continually raising funds.

During the year ended June 30, 2025, the Company's operating activities used $1,288,505 of net cash used compared to using $1,430,345 of net cash used in operating activities during the year ended June 30, 2024. This difference primarily related to an decreased net loss in the prior period of $1,558,375 offset by a decreased change in accounts payable and accrued liabilities in the prior period in the amount of $1,335,117. During the year ended June 30, 2025, the Company's investing activities used cash of $1,762 compared to using cash of $8,163 during the year ended June 30, 2024. In the current year the Company purchased property and equipment in the amount of $1,762. During the year ended June 30, 2025, the Company's financing activities were $682,000 compared to $2,030,000 of net cash added in financing activities during the year ended June 30, 2024. This difference related to the fact the Company raised more money from convertible notes during the year ended June 30, 2024 than June 30, 2025.

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**Funding Strategy**

To date, our operations have been funded primarily through private investors. Some of these investors have verbally committed additional funding for the Company, as needed. We have had a number of discussions with broker-dealers regarding the funding required to execute the Company's business plan, which is to acquire and develop breakthrough technologies or business interests in those companies that have developed these technologies. We plan on issuing an offering document to obtain funding for certain acquisitions that are in the discussion stages.

**Off Balance Sheet Items**

We do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as "special purpose entities" (SPEs).

**Critical Accounting Policies**

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements requires us to make estimates and judgments which affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities (see Note 2, Summary of Significant Accounting Policies, contained in the notes to the Company's consolidated financial statements for the years ended June 30, 2025 and 2024 contained in this filing). On an ongoing basis, we evaluate our estimates. We base our estimates on historical experience and on various other assumptions which we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities which are not readily apparent from other sources. Actual results may differ from these estimates based upon different assumptions or conditions; however, we believe that our estimates are reasonable.

Management is aware that certain changes in accounting estimates employed in generating financial statements can have the effect of making the Company look more or less profitable than it actually is. Management does not believe that the Company has made any such changes in accounting estimates.

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**Item 8. Financial Statements and Supplementary Data**

**XERIANT, INC.** 

**CONSOLIDATED FINANCIAL STATEMENTS** 

**JUNE 30, 2025 and 2024**

**INDEX TO CONSOLIDATED FINANCIAL STATEMENTS**

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|:---|:---|
| [Report of Independent Registered Public Accounting Firm](#re)(PCAOB ID # 6920) | F-1 |
| [Consolidated Balance Sheets as of June 30, 2025 and 2024](#bs) | F-3 |
| [Consolidated Statements of Operations for the Years Ended June 30, 2025 and 2024](#so) | F-4 |
| [Consolidated Statements of Stockholders' Deficit for the Years Ended June 30, 2025 and 2024](#sc) | F-5 |
| [Consolidated Statements of Cash Flows for the Years Ended June 30, 2025 and 2024](#cf) | F-6 |
| [Notes to Consolidated Financial Statements](#nt) | F-7 |

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![xeri_10kimg4.jpg](xeri_10kimg4.jpg)

To the Board of Directors and

Stockholders of Xeriant, Inc.

**Opinion on the Financial Statements**

We have audited the accompanying consolidated balance sheets of Xeriant, Inc. (the Company) as of June 30, 2025 and 2024, and the related statements of operations, stockholders' deficit, and cash flows for each of the years in the two-year period ended June 30, 2025, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the two-year period ended June 30, 2025, in conformity with accounting principles generally accepted in the United States of America.

**Substantial Doubt about the Company's Ability to Continue as a Going Concern**

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2, the Company has incurred net losses and negative cash flow from operations since inception. These factors, and the need for additional financing in order for the Company to meet its business plans raises substantial doubt about the Company's ability to continue as a going concern. Our opinion is not modified with respect to that matter.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding 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.

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| F-1 |
| *[**Table of Contents**](#fs)* |

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*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.

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|:---|
| <br>![xeri_10kimg3.jpg](xeri_10kimg3.jpg) |
| We have served as the Company's auditor since 2024. Astra Audit & Advisory LLC |
| Tampa, Florida |
| October 2, 2025 |

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| F-2 |
| *[**Table of Contents**](#fs)* |

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**XERIANT, INC.** 

**CONSOLIDATED BALANCE SHEETS**

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| | | |
|:---|:---|:---|
|  | **As of** <br>**June 30, 2025** | **As of** <br>**June 30, 2024** |
| Assets |  |  |
| Current assets |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash  | $44850 | $653117 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaids | 11827 | 2931 |
| &nbsp;&nbsp;&nbsp;&nbsp;Note receivable | - | 8163 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 56677 | 664211 |
| Deposits |  | 12546 |
| Property & equipment, net | 4158 | 3995 |
| Operating lease right-of-use asset, net | 7384 | 32253 |
| Total assets | $68219 | $713005 |
| Liabilities and stockholders' deficit |  |  |
| Current liabilities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued liabilities | $1000975 | $1211533 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued liabilities, related party |  | 20000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Shares to be issued | 7000 | 75200 |
| &nbsp;&nbsp;&nbsp;&nbsp;Convertible notes payable, net of discount - in default | 5900000 | 5850000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Convertible notes payable, net of discount  | 1853323 | 2132529 |
| &nbsp;&nbsp;&nbsp;&nbsp;Lease liability, current | 4279 | 36197 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 8765577 | 9325459 |
| Lease liability, long-term | 3105 | - |
| Total liabilities | 8768682 | 9325459 |
| Commitments and contingencies (Note 8) |  |  |
| Stockholders' deficit |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;**Preferred stock,** $0.00001 par value; 100,000,000 shares authorize |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Series A Preferred stock, 3,500,000 designated; 664,996 and 705,895 shares issued and outstanding at June 30, 2025 and 2024, respectively | 7 | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;Series B Preferred stock, 1,000,000 designated; 1,000,000 issued and outstanding | 10 | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock, $0.00001 par value; 5,000,000,000 shares authorized; 695,746,625 and 524,853,304 shares issued and outstanding at June 30, 2025 and 2024, respectively | 6958 | 5248 |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock to be issued | 97900 | 51950 |
| &nbsp;&nbsp;&nbsp;&nbsp;Additional paid-in capital | 22410416 | 20899187 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated deficit | (28338606) | (26708915) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' deficit | (5823315) | (5752513) |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-controlling interest | (2877148) | (2859941) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' deficit | (8700463) | (8612454) |
| Total liabilities and stockholders' deficit | $68219 | $713005 |

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The accompanying notes are an integral part of these consolidated financial statements.

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| F-3 |
| *[**Table of Contents**](#fs)* |

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**XERIANT, INC.** 

**CONSOLIDATED STATEMENTS OF OPERATIONS** 

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| | | |
|:---|:---|:---|
|  | **For the years ended** | **For the years ended** |
|  | **June 30,** | **June 30,** |
|  | **2025** | **2024** |
| Operating expenses: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consulting and advisory fees | $327991 | $731128 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Related party consulting fees | 438000 | 388000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and administrative expenses | 309107 | 282249 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Professional fees | 221119 | 308109 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Research and development expense | 69274 | 196422 |
| Total operating expenses | 1365491 | 1905908 |
| Loss from operations | (1365491) | (1905908) |
| Other expenses: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of debt discount | (51006) | (19189) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense | (225566) | (1183885) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on extinguishment of debt | (4835) | (20298) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on extinguishment of debt |  | 28627 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of convertible bridge loans | - | (2448) |
| Total other expense | (281407) | (1197193) |
| Net loss before income tax expense | (1646898) | (3103101) |
| Income tax expense | - | - |
| Net loss | (1646898) | (3103101) |
| Less net loss attributable to noncontrolling interest | (17207) | (32647) |
| Net loss attributable to common stockholders | $(1629691) | $(3070454) |
| Net loss per common share - basic and diluted | $(0.00) | $(0.01) |
| Weighted average number of common shares outstanding - basic and diluted | 620875226 | 443262234 |

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The accompanying notes are an integral part of these consolidated financial statements.

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| F-4 |
| *[**Table of Contents**](#fs)* |

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**XERIANT, INC.**

**CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT**

**FOR THE YEARS ENDED JUNE 30, 2025 AND 2024**

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Series A Preferred** <br>**Stock**  | **Series A Preferred** <br>**Stock**  | **Series B Preferred** <br>**Stock**  | **Series B Preferred** <br>**Stock**  | **Common Stock**  | **Common Stock**  | | | | | |
|  | **Shares** | **Amount**  | **Shares** | **Amount**  | **Shares** | **Amount**  | **Common stock**<br>**to be**<br>**Issued**  | **Additional Paid-In** <br>**Capital**  | **Accumulated**<br>**Deficit**  | **Non-Controlling**<br>**Interest**  |<br> **Total**  |
| Balance June 30, 2023 | **757395** | **8** | **1000000** | **10** | **389433144** | **3894** | **51950** | **19789793** | **(23638461)** | **(2827294)** | **(6620100)** |
| Stock issued for services |  |  |  |  | 17001960 | 170 |  | 374736 |  |  | 374906 |
| Conversion of Series A Preferred to Common Stock | (51500) | (1) |  |  | 51500000 | 515 |  | (515) |  |  | (1) |
| Conversion of convertible notes payable and accrued interest into common stock |  |  |  |  | 66918200 | 669 |  | 668513 |  |  | 669182 |
| Warrants associated with convertible debt |  |  |  |  |  |  |  | 66660 |  |  | 66660 |
| Net Loss | - | - | - | - | - | - | - | - | (3070454) | (32647) | (3103101) |
| Balance June 30, 2024 | **705895** | $**7** | **1000000** | $**10** | **524853304** | $**5248** | $**51950** | $**20899187** | $**(26708915)** | $**(2859941)** | $**(8612454)** |
| Stock issued for services |  |  |  |  | 20727248 | 208 |  | 442418 |  |  | 442626 |
| Conversion of Series A Preferred to Common Stock | (40899) |  |  |  | 40899000 | 409 |  | (409) |  |  |  |
| Conversion of convertible notes payable and accrued interest into common stock |  |  |  |  | 107738888 | 1078 | 45950 | 1034023 |  |  | 1081051 |
| Warrants associated with convertible debt |  |  |  |  |  |  |  | 35212 |  |  | 35212 |
| Cashless exercise of warrants |  |  |  |  | 1528185 | 15 |  | (15) |  |  |  |
| Net Loss | - | - | - | - | - | - | - | - | (1629691) | (17207) | (1646898) |
| **Balance June 30, 2025** | **664996** | $**7** | **1000000** | $**10** | **695746625** | $**6958** | $**97900** | $**22410416** | $**(28338606)** | $**(2877148)** | $**(8700463)** |

---

The accompanying notes are an integral part of these consolidated financial statements.

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| F-5 |
| *[**Table of Contents**](#fs)* |

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**XERIANT, INC.** 

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

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| | | |
|:---|:---|:---|
|  | **For the years ended** | **For the years ended** |
|  | **June 30,** | **June 30,** |
|  | **2025** | **2024** |
| **Cash Flows from Operating Activities** |  |  |
| Net loss | $(1646898) | $(3103101) |
| Adjustments to reconcile net loss to net cash used by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 1599 | 1512 |
| &nbsp;&nbsp;&nbsp;&nbsp;Stock issued for services | 442626 | 374906 |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss on extinguishment of debt | 4835 | 20298 |
| &nbsp;&nbsp;&nbsp;&nbsp;Gain on extinguishment of debt |  | (28627) |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of convertible bridge loans |  | 2448 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of debt discount | 51006 | 19189 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of right of use asset | 24869 | 50658 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaids and deposits | 3650 | 1598 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued liabilities | (53179) | 1286773 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued liability, related party | (20000) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares to be issued | (68200) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lease liabilities | (28813) | (55999) |
| Net cash from operating activities | (1288505) | (1430345) |
| **Cash Flows from Investing Activities** |  |  |
| Cash issued for notes receivable |  | (139947) |
| Cash repayments for notes receivable |  | 131784 |
| Purchase of property and equipment | (1762) | - |
| Net cash from financing activities | (1762) | (8163) |
| **Cash Flows from Financing Activities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from convertible bridge loans | 682000 | 2030000 |
| Net cash from financing activities | 682000 | 2030000 |
| Net change in cash | (608267) | 591492 |
| Cash at beginning of period | 653117 | 61625 |
| Cash at end of period | $44850 | $653117 |
| Supplemental Cash Flow Information |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash paid for interest | $- | $- |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash paid for income taxes | $- | $- |
| Non-cash investing and financing activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Conversion of convertible notes payable and accrued interest | $1081051 | $669182 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cashless exercise of warrants | $15 | $- |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Warrants issued with convertible notes payable | $35212 | $66660 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Right of use asset | $8719 | $- |

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The accompanying notes are an integral part of these consolidated financial statements.

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| F-6 |
| *[**Table of Contents**](#fs)* |

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 **XERIANT, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEAR ENDED JUNE 30, 2025**

**NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS**

**Company Overview**

Xeriant, Inc. (the "Company") is dedicated to the discovery, development and commercialization of disruptive technologies in advanced materials and aerospace which can be successfully integrated and commercialized for deployment across multiple industrial sectors. The Company seeks to partner with and acquire strategic interests in visionary companies that accelerate this mission. Xeriant's advanced materials line is marketed under the DUREVER™ brand, and includes NEXBOARD™, an eco-friendly, patent-pending composite construction panel made from plastic and fiber waste, designed to replace products such as drywall, plywood, OSB, MDF, MgO board and other materials used in construction.

**Operating History**

The Company is a development-stage enterprise with a limited operating history with no sales, and operating losses since its inception. The Company had two joint ventures, one in the area of aerospace that was effective May 31, 2021, and terminated on May 31, 2023, the other involving advanced materials that was effective April 2, 2022, and terminated June 30, 2023.

**Advanced Materials**

A primary focus of the Company is the development and commercialization of eco-friendly advanced materials, especially in the area of nanotechnology, which have applications across a broad range of industries and the potential to generate significant near-term revenue. The Company's strategy encompasses licensing arrangements, joint ventures, or combinations which could allow for more rapid access to the market with reduced capital requirements and financial risk. Some partner companies may provide production and distribution infrastructure, which could streamline testing and certification as well as add brand recognition. Once the Company establishes sufficient production capabilities, the advanced materials may be sold as standalone products, enhancements to existing products, or used in the development of proprietary products under new trademarked brands owned by the Company. The Company is exploring manufacturing and branding opportunities for specific products derived from advanced materials acquired or developed, which would involve setting up production facilities, equipment, systems and supply chains.

Throughout the second half of 2023, the Company began developing its own advanced materials, including proprietary flame-retardant technology for polymers contained in recycled materials. In 2024 the Company began testing a number of production processes to manufacture its eco-friendly, patent pending, composite construction panel called NEXBOARD<sup>™</sup> that can be competitive in the market and produced at industrial scale. Xeriant intends to initially manufacture these wallboards through a contract manufacturer to meet current existing demand indicated by several homebuilders and developers. During the first quarter of 2025, the Company appointed two Senior Advisors who are experts in nanomaterials, which will help expand the Company's portfolio of advanced materials and products. NEXBOARD will be available in varying thicknesses and sizes, including standard 48" x 96" sheets. The Company will need to have this product certified for use in the construction industry, which is in process. If the Company decides to set up its own manufacturing facilities it will need to raise significant capital, which may or may not be available depending on market conditions and other factors. The Company has had ongoing discussions with an investment bank interested in financing these facilities and operations through a series of green bond issuances although no engagement agreement has been entered into.

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| F-7 |
| *[**Table of Contents**](#fs)* |

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On August 12, 2022, the Company filed a trademark application with the U.S. Patent and Trademark Office for "NEXBOARD," with respect to construction panels, namely, composite sheets and panels composed primarily of plastic, reinforcement materials and fire-retardant chemicals for use in walls, ceilings, flooring, framing, siding, roofing and decking. The trademark filing was intentionally broad and based upon demand for a general all-purpose construction panel made from a mixture of fire-retardant and recycled materials. Xeriant has also filed a trademark application for "DUREVER™."

On March 31, 2023, the Company filed a provisional patent application titled "Multilayered Fire-Resistant Polymer Composite and Method for Producing Same," for a method of producing a unique fire-resistant thermoplastic and fiber composite material which may be formed or shaped into various construction products of different thicknesses and dimensions. This green material will be composed primarily of recycled plastic, cellulose and ecofriendly fire-retardant chemicals, including but not limited to use in walls, ceilings, flooring, framing, siding, roofing, molding, and decking, used in construction. On April 1, 2024, the Company filed a non-provisional U.S. patent application claiming priority to the filing date of the 2023 related provisional patent application described herein. Subject to available capital, the Company is planning to build manufacturing facilities in the United States for the production of NEXBOARD™ in order to meet market demand or alternatively license the technology and process. The Company has identified companies for near-term contract manufacturing, has potential locations identified for a pilot plant and larger manufacturing facilities, received bids for specialized manufacturing equipment, developed timetables related to the action plan, and selected a managing director with decades of experience who would like to oversee the startup of production, expansion and operations.

**Aerospace**

The Company seeks to develop or acquire and commercialize disruptive, high-growth-potential technologies in aerospace, including next-generation air and spacecraft which have potential applications in other industries. The areas of focus that are reshaping the future of aerospace include advanced materials, advanced air mobility, unmanned aerial systems (drones), AI, hypersonics, communications, cybersecurity, satellites, and renewable energy technology. The Company's initial concentration was on the emerging aviation market called advanced air mobility (AAM), the transition to more efficient, eco-friendly, automated and convenient flight operations, enabled by the convergence of technological advancements in design and engineering, composite materials, propulsion systems, battery energy density and manufacturing processes. Next-generation aircraft being developed for this market offers low-cost, on-demand flight for passengers and cargo, utilizing lower altitude airspace and bypassing the traditional hub-and-spoke airport network with vertical takeoff and landing (VTOL) capabilities. Many of these lightweight aircraft are electrically powered through either hybrid or pure battery systems, which allows for quieter, low emission flights over urban areas, however with limited speed and range. Hydrogen powered aircraft have already been prototyped and are expected to become more prevalent over the next decade. The development of solid-state hydrogen technology may address the safety, large-area storage requirement limitations for gaseous-state hydrogen. The Company plans to partner with and acquire strategic interests in visionary companies that accelerate our mission of commercializing critical breakthrough aerospace technologies which enhance sustainability, performance, and safety.

In the area of aerospace, management believes that the Company can grow expeditiously by acquiring technology and assets primarily through acquisitions, joint ventures, strategic investments, and licensing arrangements. As a publicly traded company, the Company offers partner companies such benefits as improved access to capital, higher valuations and lower risk through the shared ownership of a diversified portfolio, while allowing these entities to maintain independence in their distinct operations to focus on their fields of expertise. Cost savings and efficiencies may be realized from sharing non-operational functions such as finance, legal, tax, sales & marketing, human resources, purchasing power, as well as investor and public relations.

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| F-8 |
| *[**Table of Contents**](#fs)* |

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**NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

<u>Basis of Presentation</u>

The consolidated financial statements, which include the accounts of the Company, American Aviation Technologies ("AAT"), Eco-Aero, LLC, and BlueGreen Composites, LLC, are prepared in conformity with generally accepted accounting principles in the United States of America (U.S. GAAP). The consolidated financial statements, which include the accounts of the Company and its subsidiaries, and related disclosures have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). The financial statements have been prepared using the accrual basis of accounting in accordance with U.S. GAAP and presented in US dollars. The fiscal year end is June 30.

<u>Going Concern</u>

These consolidated financial statements have been prepared on a going concern basis, which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred net losses since inception and has an accumulated deficit of $28,338,606 as of June 30, 2025. During the year ended June 30, 2025, the Company's net loss was $1,629,691 and at June 30, 2025, the Company had a working capital deficit of $8,708,900. These factors raise substantial doubt about the Company's ability to continue as a going concern. Based on its historical rate of expenditures, the Company expects to expend its available cash in approximately three months from October 2, 2025. Management's plans include raising capital through the issuance of common stock and debt to fund operations and, eventually, the generation of revenue through its business.

Failure to raise adequate capital and generate adequate revenues could result in the Company having to curtail or cease operations. The Company's ability to raise additional capital through the future issuances of the common stock is unknown. Additionally, even if the Company does raise sufficient capital to support its operating expenses and generate adequate revenues, there can be no assurances that the revenue will be sufficient to enable it to develop to a level where it will generate profits and cash flows from operations. These matters raise substantial doubt about the Company's ability to continue as a going concern; however, the accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. These consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classifications of the liabilities that might be necessary should the Company be unable to continue as a going concern.

<u>Principles of Consolidation</u>

The consolidated financial statements include the accounts of Xeriant, Inc., AAT, Eco-Aero, LLC and BlueGreen Composites, LLC. The Company owns a 64% controlling interest in AAT; and a 100% interest in BlueGreen Composites, LLC. All intercompany balances and transactions have been eliminated.

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| F-9 |
| *[**Table of Contents**](#fs)* |

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<u>Use of Estimates</u>

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant assumptions and estimates relate to the valuation of warrants associated with convertible debt. Actual results could differ from these estimates.

<u>Fair Value Measurements and Fair Value of Financial Instruments</u>

The Company adopted Accounting Standards Codification ("ASC") Topic 820, *Fair Value Measurements*. ASC Topic 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

Level 1: Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

Level 2: Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.

Level 3: Inputs are unobservable inputs which reflect the reporting entity's own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.

The estimated fair value of certain financial instruments, including all current liabilities are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.

The inputs to the valuation methodology of warrants were under level 3 fair value measurements.

ASC subtopic 825-10, *Financial Instruments* ("ASC 825-10") requires disclosure of the fair value of certain financial instruments. The carrying value of cash and cash equivalents, accounts payable and accrued liabilities as reflected in the consolidated balance sheets, approximate fair value because of the short-term maturity of these instruments. All other significant financial assets, financial liabilities and equity instruments of the Company are either recognized or disclosed in the consolidated financial statements together with other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit risk. Where practicable the fair values of financial assets and financial liabilities have been determined and disclosed; otherwise only available information pertinent to fair value has been disclosed.

The Company follows ASC subtopic 820-10, *Fair Value Measurements and Disclosures* ("ASC 820-10") and ASC 825-10, which permits entities to choose to measure many financial instruments and certain other items at fair value.

<u>Cash and Cash Equivalents</u>

For the purposes of the consolidated statements of cash flows, the Company considers highly liquid investments with an original maturity of three months or less to be cash equivalents. The Company has no cash equivalents.

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| F-10 |
| *[**Table of Contents**](#fs)* |

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<u>Impairment of Long-Lived Assets</u>

In accordance with ASC 360-10, *Impairment and Disposal of Long-Lived Asset*s, the Company, on a regular basis, reviews the carrying amount of long-lived assets for the existence of facts or circumstances, both internally and externally, that suggest impairment. The Company determines if the carrying amount of a long-lived asset is impaired based on anticipated undiscounted cash flows, before interest, from the use of the asset. In the event of impairment, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the asset. Fair value is determined based on appraised value of the assets or the anticipated cash flows from the use of the asset, discounted at a rate commensurate with the risk involved. During the years ended June 30, 2025 and 2024, there were no impairments.

<u>Convertible Debentures</u>

The Company adheres to the guidance in Accounting Standards Updated ("ASU") 2020-06, *Accounting for Convertible Instruments and Contracts in an Entity's Own Equity on July 1, 2022*. ASU 2020-06 simplifies an issuer's accounting for convertible instruments and its application of the derivatives scope exception for contracts in its own equity. Additionally, ASU 2020-06 removes the requirements for accounting for beneficial conversion features.

<u>Share-based Compensation</u>

The Company from time to time may issue stock options, warrants and restricted stock as compensation to employees, directors, officers and affiliates, as well as to acquire goods or services from third parties. The Company measures the cost of goods or services received in exchange for equity incentive awards based on the grant date fair value of the award. The Company uses the Black-Scholes valuation model to calculate the fair value of stock options granted to employees or consultants. Stock-based compensation expense is recognized over the period during which the employee is required to provide services in exchange for the award, which is usually the vesting period. The Company uses the fair value of the Company' stock price to calculate the fair value of restricted stock. During the years ended June 30, 2025 and 2024, the Company recognized $442,626 and $374,906 in share-based compensation expense, respectively. Share-based compensation is included in the consolidated statements of operations under consulting and advisory fees.

<u>Leases</u>

The Company accounts for leases under ASU 2016-02. At the inception of a contract the Company assesses 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 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.

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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.

<u>Research and Development Expenses</u>

Expenditures for research and development are expensed as incurred. The Company incurred research and development expenses of $69,274 and $196,422 for the years ended June 30, 2025 and 2024, respectively.

<u>Advertising and Marketing Expenses</u>

The Company expenses advertising and marketing costs as they are incurred and are included in the general and administrative expenses section of the consolidated statements of operations. The Company recorded marketing expenses in the amount of $133,791 and $4,855 for the years ended June 30, 2025 and 2024, respectively.

<u>Income Taxes</u>

The Company recognizes the effect of income tax positions only if those positions are more likely than not to be sustained. Recognized income tax positions are measured at the largest amount that is more likely than not of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest and penalties related to unrecognized tax benefits as a component of general and administrative expenses. The Company's consolidated federal tax return and any state tax returns are not currently under examination.

The Company follows ASC subtopic 740-10, *Income Taxes* ("ASC 740-10") for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability during each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change. Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods.

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<u>Basic Income (Loss) Per Share</u>

Under the provisions of ASC 260, "*Earnings per Share*", basic loss per common share is computed by dividing net loss available to common shareholders by the weighted average number of shares of common stock outstanding for the periods presented. Diluted net loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that would then share in the income of the Company, subject to anti-dilution limitations. The following potential common shares were excluded from the calculation of diluted net income (loss) per share available to common stockholders because their effect would have been antidilutive:

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| | | |
|:---|:---|:---|
|  | **Years ended** <br>**June 30,** | **Years ended** <br>**June 30,** |
|  | **2025** | **2024** |
| Warrants | 111568828 | 118968828 |
| Stock options |  | 21250000 |
| Convertible notes payable | 865878677 | 882527009 |
| Preferred stock | 664116000 | 705895000 |
| Total | 1641563505 | 1728640837 |

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<u>Segment Reporting</u>

We have determined that we have one reportable segment, which includes discovery, development and commercialization of disruptive technologies in advanced materials and aerospace which can be successfully integrated and commercialized for deployment across multiple industrial sectors. The single segment was identified based on how the Chief Operating Decision Maker, who we have determined to be our Chief Executive Officer, manages and evaluates performance and allocates resources.

<u>Recent Accounting Pronouncements</u>

All recent accounting pronouncements issued by the Financial Accounting Standards Board, did not or are not believed by management to have a material impact on the Company's present or future consolidated financial statements.

**NOTE 3 – CONCENTRATION OF CREDIT RISKS**

The Company maintains accounts with financial institutions. All cash in checking accounts is non-interest bearing and is fully insured by the Federal Deposit Insurance Corporation (FDIC). At times, cash balances may exceed the maximum coverage provided by the FDIC on insured depositor accounts. The Company believes it mitigates its risk by depositing its cash and cash equivalents with major financial institutions. On June 30, 2025 and 2024, the Company had $0 in excess of FDIC insurance.

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**NOTE 4 – OPERATING LEASE RIGHT-OF-USE ASSET AND OPERATING LEASE LIABILITY**

The Company leased 2,911 square feet of office space located in the Research Park at Florida Atlantic University, Innovation Centre 1, 3998 FAU Boulevard, Suite 309, Boca Raton, Florida. The Company entered into a lease agreement commencing on November 1, 2019, through January 31, 2025, in which the first three months of rent were abated. The lease expired on January 31, 2025, and was not renewed.

On February 13, 2025, the Company executed an agreement to lease office space at 3651 FAU Boulevard, Suite 400, Boca Raton, FL 33431. The lease commencement date is March 1, 2025, and is not to exceed twenty-four (24) months. The base rent is $399 per month.

Operating lease right-of-use asset and liability are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value is the Company's incremental borrowing rate, estimated to be 10%, as the interest rate implicit in most of the Company's leases is not readily determinable. Operating lease expense is recognized on a straight-line basis over the lease term. Since the common area maintenance expenses are expenses that do not depend on an index or rate, they are excluded from the measurement of the lease liability and recognized in general and administrative expenses on the consolidated statements of operations. During the years ended June 30, 2025 and 2024, the Company recorded $47,800 and $52,632 in rent expense, respectively, in general and administrative expenses on the consolidated statements of operations.

**Right-of-use asset is summarized below:**

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| | | |
|:---|:---|:---|
|  | **June 30,**<br>**2025** | **June 30,** <br>**2024** |
| Office lease | $8719 | $220448 |
| Less accumulated amortization | (1335) | (188195) |
| Right of use assets, net | $7384 | $32253 |

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**Operating lease liability is summarized below:**

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| | | |
|:---|:---|:---|
|  | **June 30,**<br>**2025** | **June 30,** <br>**2024** |
| Office lease | $7384 | $36197 |
| Less: current portion | (4279) | (36197) |
| Long term portion | $3105 | $- |

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**NOTE 5 – CONVERTIBLE NOTES PAYABLE, IN DEFAULT**

The carrying value of convertible notes payable in default as of June 30, 2025 and 2024 is as follows.

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| | | |
|:---|:---|:---|
|  | **June 30,** | **June 30,** |
| **Convertible Notes Payable** | **2025** | **2024** |
| Convertible notes payable issued October 27, 2021 (0% interest) – Auctus Fund LLC | $5900000 | $5850000 |
| Total face value | $5900000 | $5850000 |

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<u>Auctus Fund LLC Senior Secured Note</u>

Through Maxim Group, LLC, the Company was introduced to Auctus Fund LLC ("Auctus") for the purpose of providing bridge loan funding to satisfy the requirements of a pending merger with XTI Aircraft under a letter of intent signed in September 2021. On October 27, 2021, the Company issued a convertible note payable with Auctus with the principal of $6,050,000, consisting of $5,142,500, which was the actual amount funded, plus an original issue discount in the amount of $907,500 for interest on the unpaid principal amount at the rate of zero percent per annum from the issue date until the note becomes due and payable. The closing costs were $433,550, which included $308,550 in fees paid to Maxim and professional fees for completing the transaction. The Note had an initial due date of October 27, 2022. The Auctus Note provides the holder has the option to convert the principal balance to common stock of the Company at a conversion price of the lesser of (i) $0.1187 or (ii) 75% of the offering price per share divided by the number of shares of common stock. The Auctus Note is secured by the grant of a first priority security interest in the assets of the Company. In connection with the Auctus Note, the Company issued warrants indexed to an aggregate of 50,968,828 shares of common stock. The warrants have a term of five years and an exercise price of $0.1187. The exercise price can be adjusted downward to match the price of the Company's most recent issuances of common shares.

Effective August 1, 2022, the Company entered into an Amendment to the Senior Secured Promissory Note (the "First Amendment") with Auctus pursuant to which the parties agreed to amend the Auctus Note. The Amendment (i) extended the maturity date of the Auctus Note to November 1, 2022, and (ii) extended the dates for the completion of the acquisition of XTI Aircraft and the uplist of the Company's common stock to a national securities exchange to November 1, 2022. In consideration of the Amendment, the Company agreed to (i) grant to Auctus a new Warrant to purchase 25,000,000 shares of common stock dated July 26, 2022 (the "Warrant") at an exercise price of $0.09 per share and 5-year term; (ii) make a prepayment of the Note in the amount of $100,000; and (iii) cause a director of the Company to cancel his 10b-5(1) Plan.

Effective December 27, 2022, the Company entered into a Second Amendment to the Senior Secured Promissory Note (the "Second Amendment") with Auctus pursuant to which the parties agreed to further amend the Auctus Note. The Second Amendment (i) extended the maturity date of the Note, the obligation to uplist to a national securities exchange and acquisition of XTI Aircraft Company to March 15, 2023, and (ii) extended the date to file an S-1 registration statement to uplist the Company's common stock to a national securities exchange to January 15, 2023. In consideration of the Amendment, the Company agreed to (i) grant to Auctus a new Warrant to purchase 250,000,000 shares of Common Stock dated December 27, 2022 (the "New Warrant") at an exercise price of $0.09 per share and 5-year term, and (ii) make two pre-payment installments of $50,000 on January 15, 2023, and February 15, 2023. On October 6, 2023, the Company received a conversion notice to issue 20,011,500 shares of the Company's common stock to Auctus which shares were subsequently issued by the Company's stock transfer agent and the value of the relating shares applied to interest on the Note. The Company is contesting the legality of this conversion and issuance which is a subject of the Company's legal proceedings against Auctus.

On October 19, 2023, the Company filed a complaint against Auctus. See Litigation at Note 8 section below for a summary of the related legal proceedings.

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As of June 30, 2024, a total of $50,000 remained outstanding, and was recorded within accounts payable and accrued liabilities on the consolidated balance sheets. As of June 30, 2025, the $50,000 accrued liability was consolidated into the balance of the convertible note payable. During the year ended June 30, 2024, the Company recorded $1,070,729 in default interest related to the note. On October 6, 2023, Auctus converted $200,115 in interest into 20,011,500 shares of common stock and on April 5, 2024, Auctus converted $227,067 in interest into 22,706,700 shares of common stock. As of June 30, 2025, and 2024, the balance of accrued interest of this note was $643,546, which is recorded in the accounts payable and accrued liabilities section of the consolidated balance sheets.

**NOTE 6 – CONVERTIBLE NOTES PAYABLE**

The carrying value of convertible notes payable, net of discount at June 30, 2025 and 2024, was as follows:

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| | | |
|:---|:---|:---|
| <br>**Convertible Notes Payable** | **June 30,**<br>**2025** | **June 30,**<br>**2024** |
| Convertible notes payable (10% interest) | $1885000 | $2180000 |
| Less unamortized discount | (31677) | (47471) |
| Total face value | $1853323 | $2132529 |

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Between January 13, 2023 and December 16, 2024, the Company issued convertible bridge loans with an aggregate face value of $2,746,000. The notes have a coupon rate of 10% and a maturity date of one year. The Notes are convertible at a fixed price of $0.01 per share. In connection with the Notes, holders of $150,000 in principal were issued 15,000,000 warrants during the fiscal year ended June 30, 2024. These warrants have an exercise price of $0.01 per share and have a three-year expiration date.

During the year ended June 30, 2025, $971,000 in principal and $97,050 in accrued interest was converted into 105,538,888 shares of common stock.

During the years ended June 30, 2025 and 2024, the Company recorded $225,566 and $113,156 in interest expense related to these notes, respectively. As of June 30, 2025 and 2024, the balance of accrued interest related to these loans was $230,241 and $101,724, respectively.

The Company evaluated the detachable warrants under the requirements of ASC 480 and concluded that the warrants do not fall within the scope of ASC 480. The Company next evaluated the notes under the requirements of ASC 815 "*Derivatives and Hedging*" and concluded the warrants meet equity classification. The warrants were issued during the year ended June 30, 2024, were valued using Black-Scholes Merton ("BSM") and were determined to have a value of $66,660.

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Significant inputs and results arising from the BSM process are as follows for the redemption feature component of the warrants:

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| | |
|:---|:---|
| Quoted market price on valuation date | $0.016 - $0.022 |
| Effective contractual conversion rates | $0.01 |
| Contractual term to maturity | 3 years |
| Market volatility: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Volatility | 137.43% - 137.86% |
| Risk-adjusted interest rate | 4.33% - 4.39% |

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**NOTE 7 – RELATED PARTY TRANSACTIONS**

*Consulting fees*

During the years ended June 30, 2025 and 2024, the Company recorded $203,000 and $207,000 respectively, in consulting fees to Ancient Investments, LLC, a Company owned by the Company's CEO, Keith Duffy and the Company's Executive Director of Corporate Operations, Scott Duffy. As of June 30, 2025 and 2024, $0 and $5,000 was accrued, respectively.

For the years ended June 30, 2025 and 2024, the Company recorded $80,000 and $78,500 respectively, in consulting fees to Edward DeFeudis, a Director of the Company. As of June 30, 2025 and 2024, $0 and $10,000 was accrued, respectively.

During the years ended June 30, 2025 and 2024, the Company recorded $95,000 and $67,000 respectively, in consulting fees to AMP Web Services, a Company owned by the Company's CTO, Pablo Lavigna. As of June 30, 2025 and 2024, $0 was accrued.

During the years ended June 30, 2025 and 2024, the Company recorded $60,000 and $35,000 respectively, in consulting fees to Keystone Business Development Partners, a Company owned by the Company's CFO, Brian Carey. As of June 30, 2025 and 2024, $0 and $5,000 was accrued, respectively.

The above transactions are not necessarily indicative of what third parties would agree to.

**NOTE 8 – COMMITMENTS AND CONTINGENCIES**

During the normal course of business, the Company may be exposed to litigation. When the Company becomes aware of potential litigation, it evaluates the merits of the case in accordance with FASB ASC 450-20-50, *Contingencies*. The Company evaluates its exposure to the matter, possible legal or settlement strategies and the likelihood of an unfavorable outcome. If the Company determines that an unfavorable outcome is probable and can be reasonably estimated, it establishes the necessary accruals.

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***Board of Advisors Agreements***

The Company has entered into Advisor Agreements with various advisory board members. The agreements provide for the following:

On July 1, 2021, the Company agreed to issue to an advisor 100,000 common shares, and $2,500 per meeting paid in cash, common shares, or a combination, an additional bonus of $25,000 paid in common shares issued at the end of each year of service, an option to purchase 5,000,000 common shares at $0.12 per share, vesting quarterly over 24 months, and for each of the following three years (beginning July 1, 2022), an option to purchase an additional 1,000,000 common shares per year thereafter at a 25% discount to the average market price for the preceding 10 trading days. The agreement also provides for a 1% finder's fee.

On July 6, 2021, the Company provided an option to an advisor to purchase 5,000,000 common shares at $0.12 per share, vesting quarterly over 24 months, a bonus of 250,000 common shares issued upon a strategic partnership with a major airline, $2,500 per formal meeting paid in common shares, and an additional bonus of $25,000 paid in common shares issued at the end of each year of service. Advisory agreement is open ended and can be terminated by consent of both parties upon written notice.

On July 28, 2021, the Company agreed to issue to an advisor 250,000 common shares immediately, an option to purchase 5,000,000 common shares at $0.12 per share, vesting quarterly over 24 months, a bonus of 5,000,000 common shares for bringing in a strategic partner that significantly strengthens the Company's market position, $2,500 per formal meeting paid in cash, common shares or a combination, and an additional bonus of $25,000 paid in common shares issued at the end of each year of service. The agreement also provides for a 30% commission. Advisory agreement is open ended and can be terminated by consent of either party upon written notice.

On August 9, 2021, the Company agreed to issue to an advisor 50,000 common shares vesting over the first year, $2,500 per meeting paid in cash, common shares, or a combination, and an additional bonus of $25,000 paid in common shares issued at the end of each year of service. Advisory agreement is open ended and can be terminated by consent of either party upon written notice.

On August 20, 2021, the Company agreed to issue to an advisor 100,000 common shares, and $2,500 per meeting paid in cash, common shares, or a combination, an additional bonus of $25,000 paid in common shares issued at the end of each year of service, an option to purchase 4,000,000 common shares at $0.12 per share, vesting quarterly over 24 months. Advisory agreement is open ended and can be terminated by consent of either party upon written notice.

On January 20, 2022, the Company agreed to issue to an advisor 150,000 common shares vesting monthly over one year, and $2,500 per meeting paid in cash and an additional bonus of $25,000 paid in common shares issued at the end of each year of service. Advisory agreement is open ended and can be terminated by consent of either party upon written notice.

On March 1, 2022, the Company agreed to issue to an advisor 150,000 common shares vesting monthly over one year, $2,500 per meeting paid in cash, and an additional bonus of $25,000 paid in common shares issued at the end of each year of service. Advisory agreement is open ended and can be terminated by consent of either party upon written notice.

On March 20, 2022, the Company agreed to issue to an advisor 150,000 common shares vesting monthly over one year, and $2,500 per meeting paid in cash and an additional bonus of $25,000 paid in common shares issued at the end of each year of service. Advisory agreement is open ended and can be terminated by consent of either party upon written notice.

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On January 1, 2025, the Company agreed to issue to two advisors 1,000,000 common shares each, vesting and issued quarterly, beginning June 30, 2025, and $2,500 per meeting paid in cash and an additional bonus of $25,000 paid in common shares issued at the end of each year of service. Advisory agreement is open ended and can be terminated by consent of either party upon written notice.

On January 22, 2025, the Company agreed to issue a new advisor 1,000,000 common shares, vesting and issued quarterly, beginning April 21, 2025, and $2,500 per meeting paid in cash and an additional bonus of $25,000 paid in common shares issued at the end of each year of service. Advisory agreement is open ended and can be terminated by consent of either party upon written notice.

***Litigation***

On October 19, 2023, Xeriant filed a complaint in the United States Southern District of New York (Case no.1:23-cv-09200) against Auctus Fund LLC, to invalidate allegedly illegally designed contractual agreements, including contesting the enforceability of the related note and amendments, and to set aside improper and unlawful securities transactions effectuated in violation of Section 15(a)(1) of the Exchange Act (15 U.S.C. § 78o(a)(1)) by the Defendant, alleging breaches of fiduciary duty and related claims. On February 9, 2024, the case was dismissed. The Company filed a Notice of Civil Appeal on March 13, 2024, primarily based on public welfare because of the pending litigation between the SEC and Auctus Fund Management, LLC, which complaint was filed on June 1, 2023. On June 19, 2024, the Company filed an appeal in the United States Court of Appeals for the Second Circuit (Case no. 24-682-cv), which is still pending. On June 25, 2025, the appellate court affirmed the lower court's decision. The Company's counsel is in the process of filing an appeal to the United States Supreme Court to challenge this decision, which went against precedent decisions in other districts. In addition to the pending legal matters, the Company is currently in discussions with Auctus in an attempt to come up with a settlement. The Company's ongoing lawsuit against XTI Aircraft Company has a connection to the Auctus matter in that the Company's obligations to Auctus were, according to Xeriant's complaint, to be assumed by XTI as provided in a Letter Agreement. The foregoing descriptions of the legal actions do not purport to be complete and are subject in their entirety by the full text of the court filings.

On December 6, 2023, the Company initiated legal proceedings against XTI Aircraft Company in the Federal District Court for the Southern District of New York (Case no. 1:23-cv-10656-JPO), along with other unnamed defendants, seeking to enforce the terms of the Letter Agreement, alleging fraudulent acts, deceptive maneuvers and intentional breaches, and seeking a range of remedies. These include the recovery of losses, expenses, attorneys' fees, punitive damages and a compensatory damage award exceeding $500 million. The legal action aims to address the alleged misconduct comprehensively and to protect the Company's interests in the face of XTI's actions. The foregoing description of the legal action does not purport to be complete and is subject in its entirety by the full text of the complaint, a copy of which was filed in an 8-K on December 12, 2023, Exhibit 99.1. On February 29, 2024, the Company filed a Second Amended Complaint alleging seven counts including intentional fraud, fraudulent concealment, breach of contract, unjust enrichment, unfair competition, quantum meruit, and misappropriation of confidential information. XTI filed a Motion to Dismiss on March 13, 2024, seeking to dismiss all the Company's claims except for breach of contract. The Company filed a Memorandum of Law in Opposition to XTI's Motion to Dismiss on April 10, 2024, and on January 14, 2025, the Court agreed with the Company's position that its claims were validly alleged and denied all of XTI's arguments in their entirety. On February 18, 2025, XTI filed its answer to the Company's Second Amended Complaint adding two counter claims, including breach of fiduciary duty and breach of contract. The Company responded on March 18, 2025, moving to dismiss both counterclaims and on April 1, 2025, XTI filed a Second Amended Answer and Counterclaims to the Second Amended Complaint. On April 28, 2025, the Company filed a Motion to Dismiss XTI's Second Amended Answer and Counterclaims. On May 12, 2025, XTI filed a Memorandum of Law in Opposition to Xeriant's Motion to Dismiss XTI's Second Amended Counterclaim. On May 20, 2025, Xeriant filed a Memorandum of Law in Support of its Motion to Dismiss XTI's Second Amended Answer with Counterclaims. The foregoing descriptions of the legal actions do not purport to be complete and are subject in their entirety by the full text of the court filings.

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On July 2, 2025, the Company was served with a complaint from Midland Compounding for breach of contract in the payment of an invoice in the amount of $57,600 related to a purchase order for consulting services related to improving the Company's intumescent fire-retardant layer for NEXBOARD. On August 20, 2025, the Company filed an Answer and Affirmative Defenses, essentially stating that Midland Compounding had not performed the services it was contracted to provide.

To the Company's knowledge, none of our directors, officers, five (5%) shareholders or affiliates are party to any legal proceedings that would have a material adverse effect on its business, financial condition, or operating results.

**NOTE 9 – EQUITY**

*Common Stock*

As of June 30, 2025 and 2024, the Company had 5,000,000,000 shares of common stock authorized with a par value of $0.00001. There were 695,746,625 and 524,853,304 shares issued and outstanding as of June 30, 2025 and 2024, respectively.

*Series A Preferred Stock*

There are 100,000,000 shares authorized as preferred stock, of which 3,500,000 are designated as Series A preferred stock having a par value of $0.00001 per share. The Series A preferred stock has the following rights:

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| <u>Voting</u>: The preferred shares shall be entitled to 1,000 votes to every one share of common stock. |
| <u>Dividends</u>: The Series A preferred stockholders are treated the same as the common stockholders except at the dividend on each share of Series A convertible preferred stock is equal to the amount of the dividend declared and paid on each share of common stock multiplied by the Conversion Rate. |
| <u>Conversion</u>: Each share of Series A Preferred Stock is convertible, at the option of the holder thereof, at any time into shares of Common Stock on a 1:1,000 basis. |
| The shares of Series A Preferred Stock are redeemable at the option of the Corporation upon not less than 30 days written notice to the holders. It is not mandatorily redeemable. |

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As of June 30, 2025 and 2024, the Company had 664,996 and 705,895 shares of Series A preferred stock issued and outstanding, respectively.

*Series B Preferred Stock*

On March 25, 2021, the Certificate of Designation for the Series B Preferred was recorded by the State of Nevada. There are 100,000,000 shares authorized as preferred stock, of which 1,000,000 are designated as Series B Preferred Stock having a par value of $0.00001 per share. The Series B preferred stock is not convertible, grants 5,000 votes and no liquidation preference.

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*Stock Options*

A summary of the Company's stock options activity is as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Number of** <br>**Options**  | **Weighted-**<br>**Average** <br>**Exercise** <br>**Price** | **Weighted-**<br>**Average** <br>**Contractual** <br>**Term**<br>**(in years)** | **Aggregate** <br>**Intrinsic** <br>**Value** |
| Outstanding at June 30, 2023 | 21250000 | $0.12 | 0.97 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Granted |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Exercised |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Canceled | - |  |  |  |
| Outstanding at June 30, 2024 | 21250000 | $0.12 | 0.13 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Granted |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Exercised |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Canceled | (21250000) |  |  |  |
| Outstanding at June 30, 2025 | - |  |  | $- |
| Exercisable at June 30, 2025 | - |  |  | $- |

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Significant inputs and results arising from the Black-Scholes process are as follows for the options:

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| | |
|:---|:---|
| Quoted market price on valuation date | $0.169 - $0.23 |
| Exercise prices | $0.12 |
| Range of expected term | 1.55 Years – 2.49 Years |
| Range of market volatility: |  |
| Range of equivalent volatility | 181.21% - 275.73% |
| Range of interest rates | 0.20% - 1.08% |

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*Warrants*

As of June 30, 2025 and 2024, the Company had 111,568,828 and 118,968,828 warrants outstanding. The warrants have a term of two to five years, and an exercise price range from $0.021 and $0.1187. The Company evaluated the warrants under ASC 815, *Derivatives and Hedging* ("ASC 815") and determined that they did not require liability classification. The warrants were recorded in additional paid-in capital under their aggregate relative fair values. As of June 30, 2025, the weighted average remaining useful life of the warrants was 1.90. The warrants are detailed as follows:

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| F-21 |
| *[**Table of Contents**](#fs)* |

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| | | | | |
|:---|:---|:---|:---|:---|
| **Number of Warrants** | **Number of Warrants** | **Weighted-**<br>**Average**<br>**Exercise**<br>**Price** | **Weighted-**<br>**Average**<br>**Contractual**<br>**Term**<br>**(in years)** | **Aggregate**<br>**Intrinsic**<br>**Value** |
| Outstanding at June 30, 2023 | 104802161 | $0.11 | 3.79 | $- |
| &nbsp;&nbsp;&nbsp;&nbsp;Granted | 15000000 | $0.01 | 3.00 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Exercised |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Canceled | (833333) |  |  |  |
| Outstanding at June 30, 2024 | 118968828 | $0.09 | 2.50 | $- |
| &nbsp;&nbsp;&nbsp;&nbsp;Granted | 7900000 | $0.01 | 3.00 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Exercised |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Canceled | (15300000) |  |  |  |
| Outstanding at June 30, 2025 | 111568828 | $0.095 | 1.90 | $- |
| Vested at June 30, 2025 | 111568828 | $0.095 | 1.90 | $- |
| Exercisable at June 30, 2025 | 111568828 | $0.095 | 1.90 | $- |

---

**NOTE 10 – INCOME TAXES**

The Company did not provide any current or deferred US federal income tax provision or benefit for the years ending June 30, 2025 and 2024, as they incurred tax losses during both periods.

When it is more likely than not that a tax asset cannot be realized through future income, the Company must record an allowance against any future potential future tax benefit. The Company has provided a full valuation allowance against the net deferred tax asset, consisting of net operating loss carry forwards, because management has determined that it is more likely than not that the Company will not earn income sufficient to realize the deferred tax assets during the carry forward periods.

The Company has not taken a tax position that, if challenged, would have a material effect on the consolidated financial statements for the years ended June 30, 2025 and 2024 as defined under ASC 740, "*Accounting for Income Taxes*."

The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before provision for income taxes.

The sources and tax effects of the differences for the periods presented are as follows:

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| | | |
|:---|:---|:---|
|  | **Years ended**  | **Years ended**  |
|  | **June 30, 2025** | **June 30, 2024** |
| U.S. statutory federal income tax rate | 21% | 21% |
| State income taxes, net of federal income tax | 4% | 4% |
| Change in valuation allowance | (25%) | (25%) |
| Effective income tax rate | 0% | 0% |

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| F-22 |
| *[**Table of Contents**](#fs)* |

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A reconciliation of the income taxes computed at the statutory rate is as follows:

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| | | |
|:---|:---|:---|
|  | **Years ended** | **Years ended** |
|  | **June 30, 2025** | **June 30, 2024** |
| Tax credit (expense) at statutory rate (25%) | $407423 | $767614 |
| Increase in valuation allowance | (407423) | (767614) |
| Net deferred income tax asset | $— | $— |

---

At June 30, 2025 and 2024, the significant components of the deferred tax assets are summarized below:

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| | | |
|:---|:---|:---|
|  | **June 30,**<br>**2025** | **June 30,**<br>**2024** |
| Net operating loss carry-forward | $7084652 | $6677229 |
| Valuation allowance | (7084652) | (6677229) |
| Net deferred tax asset (liability) | $- | $- |

---

As of June 30, 2025 and 2024, the Company had a federal net operating loss carryforward of $28,338,606 and $26,708,915, respectively. The federal net operating loss carryforwards do not expire but may only be used against taxable income to 80%. No tax benefit has been reported in the consolidated financial statements. The annual offset of this carryforward loss against any future taxable profits may be limited under the provisions of Internal Revenue Code Section 381 upon any future change(s) in control of the Company.

**NOTE 11 – SUBSEQUENT EVENTS**

*Litigation* 

On July 2, 2025, the Company was served with a complaint from Midland Compounding for breach of contract in the payment of an invoice in the amount of $57,600 related to a purchase order for consulting services related to improving the Company's intumescent fire-retardant layer for NEXBOARD. On August 20, 2025, the Company filed an Answer and Affirmative Defenses, essentially stating that Midland Compounding had not performed the services it was contracted to provide.

*Stock Issuances* <br>On July 8, 2025, the Company issued 2,673,077 common shares for services.<br>On July 15, 2025, the Company issued 5,500,000 common shares that were converted from a convertible note with a principal amount of $50,000 and accrued interest of $5,000.<br>On August 11, 2025, the Company issued 5,000,000 common shares that were converted from 5,000 Series A preferred shares.<br>On August 20, 2025, the Company issued 7,700,000 common shares that were converted from a convertible note with a principal amount of $70,000 and accrued interest of $7,000.<br>On September 8, 2025, the Company issued 10,000,000 common shares that were converted from 10,000 Series A preferred shares.<br>

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On September 10, 2025, the Company issued 19,250,000 common shares that were converted from a convertible note with a principal amount of $175,000 and accrued interest of $17,500.

On September 15, 2025, the Company issued 1,100,000 common shares that were converted from a convertible note with a principal amount of $10,000 and accrued interest of $1,000.

*Convertible Notes* 

On July 22, 2025, the Company issued a convertible note in the amount of $25,000. In connection with the convertible note, the Company issued 2,500,000 warrants with an exercise price of $0.01 and a three-year term.

On August 5, 2025, the Company issued convertible notes in the amount of $30,000. In connection with the convertible notes, the Company issued 3,000,000 warrants with an exercise price of $0.01 and a three-year term.

On August 6, 2025, the Company issued convertibles notes in the amount of $30,000. In connection with the convertible notes, the Company issued 3,000,000 warrants with an exercise price of $0.01 and a three-year term.

On August 7, 2025, the Company issued a convertible note in the amount of $10,000. In connection with the convertible note, the Company issued 1,000,000 warrants with an exercise price of $0.01 and a three-year term.

On August 8, 2025, the Company issued convertible notes in the amount of $30,000. In connection with the convertible notes, the Company issued 3,000,000 warrants with an exercise price of $0.01 and a three-year term.

On August 15, 2025, the Company issued a convertible note in the amount of $10,000. In connection with the convertible note, the Company issued 1,000,000 warrants with an exercise price of $0.01 and a three-year term.

On September 2, 2025, the Company issued a convertible note in the amount of $15,000. In connection with the convertible note, the Company issued 1,500,000 warrants with an exercise price of $0.01 and a three-year term.

On September 18, 2025, the Company issued a convertible note in the amount of $25,000. In connection with the convertible note, the Company issued 2,500,000 warrants with an exercise price of $0.01 and a three-year term.

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| F-24 |
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**Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.**

None.

**Item 9A. Controls and Procedures.**

**Evaluation of Disclosure Controls and Procedures**

Our management is responsible for maintaining disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that the Registrant files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. In addition, the disclosure controls and procedures must ensure that such information is accumulated and communicated to the Registrant's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required financial and other required disclosures.

At June 30, 2025, an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13(a)-15(e) and 15(d)-15(e) of the Exchange Act) was carried out under the supervision and with the participation of Keith Duffy our Chief Executive Officer and Brian Carey our Chief Financial Officer. Based on his evaluation of our disclosure controls and procedures, he concluded that, at June 30, 2025, our disclosure controls and procedures are effective.

**Management's Annual Report on Internal Control over Financial Reporting**

Our management is responsible for establishing and maintaining adequate internal control over our financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP.

Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions; (ii) provide reasonable assurance that transactions are recorded as necessary for preparation of our financial statements; (iii) provide reasonable assurance that receipts and expenditures of company assets are made in accordance with management authorization; and (iv) provide reasonable assurance that unauthorized acquisition, use or disposition of Company assets that could have a material effect on our financial statements would be prevented or detected on a timely basis.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because changes in conditions may occur or the degree of compliance with the policies or procedures may deteriorate.

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Our management has conducted an evaluation, under the supervision and with the participation of Keith Duffy, our Chief Executive Officer, and Brian Carey, our Chief Financial Officer, of the effectiveness of our internal control over financial reporting as of June 30, 2025. This evaluation was based on criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO, Internal Control-Integrated Framework. Based upon such assessment, Keith Duffy concluded that our internal controls over financial reporting are effective, based upon the Company's size and staff size, and that there are no apparent material weaknesses in our internal controls over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis.

This Report shall not be deemed to be filed for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, and is not incorporated by reference into any filing of the Registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. The rules of the Securities and Exchange Commission do not require an attestation of the Management's report by our registered public accounting firm in this annual report.

**Changes in Internal Controls**

There have been no changes in our internal control over financial reporting that occurred during the fourth quarter of our fiscal year ended June 30, 2025, that have materially affected, or are reasonable likely to materially affect, our internal control over financial reporting.

**Item 9B. Other Information**

None.

**Item 9C. Disclosures Regarding Foreign Jurisdictions that Prevent Inspections**

Not applicable.

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**PART III**

**Item 10. Directors, Executive Officers and Corporate Governance.** 

**Directors and Executive Officers of Xeriant, Inc.**

The following sets forth information about our directors and executive officers:

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| | | |
|:---|:---|:---|
| **Name** | **Age** | **Position** |
| Keith Duffy | 63  | Chairman of the Board and CEO |
| Scott Duffy | 63 | Executive Director |
| Mark Sternberg | 58 | Director |
| Pablo Lavigna | 53 | Chief Information Officer |
| Brian Carey | 62 | Chief Financial Officer |

---

<u>Keith Duffy, Chairman of the Board and CEO</u>

Mr. Duffy has over thirty years of experience in investment banking, management, finance, strategic planning and operations, and has been a principal in a number of start-up companies. He arranged the merger of American Aviation Technologies with a public company. He was formerly the founder and CEO of a public company and the founder and CEO of two bank holding companies, a software development company and a biotech company now trading on NASDAQ. Mr. Duffy trained to be a private pilot when he was 16 years old and worked at an FBO at the Palm Beach International Airport after college to further his knowledge of the aviation industry. He has held a variety of management, accounting, and finance positions over the years. He has been a licensed securities broker and currently holds a real estate license and a NMLS mortgage broker's license in Florida. He has also served on the Florida Bar Grievance Committee. Mr. Duffy attended Wake Forest University and Rollins College, where he earned a B.A. Degree in Business Administration and Mathematics in 1982.

<u>Scott M. Duffy, Executive Director, Corporate Operations</u>

Scott Duffy has over thirty years of experience in management, operations, strategic planning, information technology, statistical analysis, marketing and promotion, and sales development. He has collaborated with his brother Keith over many years to develop plans and research for a wide range of start-up companies, including American Aviation Technologies and the Halo project. As Senior Vice President, Operations and Administration at Globe Marketing Services, he was responsible for planning and coordinating the activities of internal management and the support staff to meet corporate objectives. As Newsstand Circulation Director at American Media, one of the largest publishers in North America, he was responsible for the $545 million retail sales division, overseeing both international and domestic distribution. Over his career he has been instrumental in increasing profitability though optimizing core competencies. Mr. Duffy was a co-founder and principal in a number of real estate development projects beginning in 2006. Mr. Duffy trained to be a private pilot when he was 16 years old and has always been interested in aviation. He attended Wake Forest University and Rollins College, where he earned a B.A. in Business Administration and Mathematics in 1982.

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<u>Mark Sternberg, Director</u>

An industry leader in the field of nanotechnology, Mark Sternberg has more than 30 years of experience in the development and commercialization of innovative nanomaterials for the industrial, biotech and construction markets. Over his impressive career, he has been responsible for product management, manufacturing, sales, licensing, IP, finance, marketing and distribution. He has held senior executive roles at both public and private companies and holds multiple patents in nanomaterials and coatings. As President and CEO of Moyco Precision Abrasives, he oversaw the development of nanomaterial and submicron abrasive formulations, coatings, quality control, and research and development, and effectuated the company's sale to Saint-Gobain, a $50B global leader in advanced materials. Following the acquisition, he became National Sales Manager and Product Manager for Saint-Gobain Abrasives, a division with $2B in sales. Among his many accomplishments, he was a pioneer in producing nanodiamonds, the first in the U.S., which can be used for many industrial and biomedical applications, including metal coatings, polishing of semiconductors, ophthalmic lenses, lubrication, drug delivery, and energy production. As CFO for Debina Diagnostics, a biotechnology firm, he developed fluorescent nanodiamond particles for medical imaging applications and was recognized by the Journal of Nanomedicine. Because of his unique background and expertise, he is highly regarded as a consultant for large multi-national corporations and private companies.

<u>Pablo Lavigna, Chief Information Officer</u>

Pablo Lavigna has over twenty years of experience in the Information Technology and Software Engineering field. He developed extensive experience as Director of Information Technology operations at a private firm. Mr. Lavigna has developed and implemented network security procedures and developed software for multiple industries. He holds several Microsoft and CompTIA certifications including Microsoft Certified System Engineer (MCSE), Microsoft Certified System Administrator (MCSA), and Microsoft Certified Professional (MCP), and CompTIA Security+. Mr. Lavigna attended Florida International University where he earned his degree in Information Technology and Business with Magna Cum Laude Honors.

<u>Brian Carey, Chief Financial Officer</u>

Brian Carey is an entrepreneur and business development specialist who built and ran a successful accounting, tax and business management firm for over 30 years. He started a financial management/insurance and investment firm in 1984, then expanded it to add accounting, tax preparation and business planning and management services in 1986 called Carey Associates Accounting and Tax Services. More recently, Mr. Carey started Palm Beach Business Development Group, LLC. This company provides business start-up and development services to a limited number of client/partner companies. He holds a Bachelor of Accounting Degree from Penn State University.

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**Director Independence**

We are not currently a "listed company" under SEC rules and are therefore not required to have a Board comprised of a majority of independent directors or separate committees comprised of independent directors.

<u>Director Independence; Standing Committees</u>

The Company's common stock is traded on OTCQB under the symbol "XERI." The OTCQB trading platform does not maintain any standards regarding the "independence" of the directors for our Board of Directors, and we are not otherwise subject to the requirements of any national securities exchange or an inter- dealer quotation system with respect to the need to have a majority of our directors be independent.

The Company's Board presently has no functioning standing committees.

<u>Board Leadership Structure and Role in Risk Oversight</u>

Although we have not adopted a formal policy on whether the Chairman and Chief Executive Officer should be separate or combined, we have traditionally determined that it is in the best interests of the Company and its shareholders to combine these roles due to the small size and early stage of the Company.

<u>Family Relationships</u>

Keith Duffy, Chairman and CEO, and Scott Duffy, Executive Director, are brothers.

**Board Committees**

<u>Audit Committee</u>

We do not have a separately designated audit committee of the board. Audit committee functions are performed by our board of directors. None of our directors are deemed independent. Two directors also hold positions as our officers. Our Board of Directors is responsible for: (1) selection and oversight of our independent accountant; (2) establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal controls and auditing matters; (3) establishing procedures for the confidential, anonymous submission by our employees of concerns regarding accounting and auditing matters; (4) engaging outside advisors; and, (5) funding for the outside auditory and any outside advisors' engagement by the audit committee.

**Nominees**

There have been no material changes to the procedures by which security holders may recommend nominees to the Registrant's board.

**Section 16(a) Beneficial Ownership Reporting Compliance**

Section 16(a) of the Securities Exchange Act of 1934 requires our directors, executive officers and beneficial owners of more than 10% of our common stock to file with the SEC reports of their holdings of, and transactions in, our common stock. Based solely upon our review of copies of such reports and written representations from reporting persons that were provided to us, we believe that our officers, directors and 10% stockholders complied with these reporting requirements with respect to our fiscal year ended June 30, 2025.

**Code of Ethics**

The Registrant has adopted a corporate code of ethics. The Registrant believes its code of ethics is reasonably designed to deter wrongdoing and promote honest and ethical conduct; provide full, fair, accurate, timely and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting of code violations; and provide accountability for adherence to the code.

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**Item 11. Executive Compensation.**

For the year ended June 30, 2025, all officers and directors were compensated as independent contractors based upon respective consulting agreements as noted in Table below.

The following table shows information regarding the compensation earned for the years ended June 30, 2025 and 2024 by our named executive officers:

**EXECUTIVE COMPENSATION TABLE**

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Executive** | **Year** | **Salary**<br>**($)** | **Bonus**<br>**($)** | **Stock Awards ($)** | **Option Awards**<br> **($) (1)** | **Non-Equity Incentive Plan Compensation ($)** | **Non-Qualified Deferred Compensation Earnings ($)** | **All Other Compensation ($)** | **Total**<br>**($)** |
| Keith Duffy (1) | 2025 | $101500 |  |  |  |  |  |  | $101500 |
|  | 2024 | $103750 |  |  |  |  |  |  | $103750 |
| Scott Duffy (1) | 2025 | $101500 |  |  |  |  |  |  | $101500 |
|  | 2024 | $103750 |  |  |  |  |  |  | $103750 |
| Pablo Lavigna (2) | 2025 | $95000 |  |  |  |  |  |  | $95000 |
|  | 2024 | $67000 |  |  |  |  |  |  | $67000 |
| Brian Carey (3) | 2025 | $60000 |  |  |  |  |  |  | $60000 |
|  | 2024 | $25000 |  |  |  |  |  |  | $25000 |

---

(1) Paid as consulting fees for the years ended June 30, 2025 and 2024 to Ancient Investments, LLC, a company owned by Keith Duffy, CEO and Scott Duffy, Executive Director of Operations. The Company recorded $0 in accrued liabilities related to unpaid compensation for Keith Duffy, for the year ended June 30, 2025.

(2) Paid as consulting fees for the years ended June 30, 2025 and 2024 to AMP Web Services, LLC, a company owned by Pablo Lavigna, CIO.

(3) Paid as consulting fees for the years ended June 30, 2025 and 2024 to Keystone Business Development Partners, LLC, a company owned by Brian Carey, CFO. The Company recorded $0 in accrued liabilities related to unpaid compensation for Brian Carey, for the year ended June 30, 2025.

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**Director Compensation**

The following table shows information regarding the compensation earned during the years ended June 30, 2025, and 2024 by the members of our board of directors.

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **DIRECTOR COMPENSATION TABLE** | **DIRECTOR COMPENSATION TABLE** | **DIRECTOR COMPENSATION TABLE** | **DIRECTOR COMPENSATION TABLE** | **DIRECTOR COMPENSATION TABLE** | **DIRECTOR COMPENSATION TABLE** | **DIRECTOR COMPENSATION TABLE** | **DIRECTOR COMPENSATION TABLE** | **DIRECTOR COMPENSATION TABLE** | **DIRECTOR COMPENSATION TABLE** |
| **Executive** | **Year** | **Salary**<br> **($)** | **Bonus**<br>**($)** | **Stock Awards ($)** | **Option Awards**<br>**($) (1)** | **Non-Equity Incentive Plan Compensation ($)** | **Non-Qualified Deferred Compensation Earnings ($)** | **All Other Compensation ($)** | **Total**<br>**($)** |
| Keith Duffy | 2025 |  |  |  |  |  |  |  |  |
| Director | 2024 |  |  |  |  |  |  |  |  |
| Scott Duffy | 2025 |  |  |  |  |  |  |  |  |
| Director | 2024 |  |  |  |  |  |  |  |  |
| Edward C. DeFeudis (1) | 2025 | $80000 |  |  |  |  |  |  | $80000 |
| Director | 2024 | $78500 |  |  |  |  |  |  | $78500 |
| Mark Sternberg  | 2025 | $- |  |  |  |  |  |  | $- |
| Director | 2024 | $- |  |  |  |  |  |  | $- |

---

(1) Paid as consulting fees for the years ended June 30, 2025, and 2024 to Edward C. DeFeudis, a member of the board of directors. The Company recorded $0 in accrued liabilities related to unpaid compensation for Edward DeFeudis, for the year ended June 30, 2025.

**Executive Compensation Policies as They Relate to Risk Management**

Management has considered whether our compensation policies might encourage inappropriate risk taking by the Company's executive officers and other employees. The Compensation Committee has determined that the current compensation structure aligns the interests of the executive officers with those of the Company without providing rewards for excessive risk taking by awarding a mix of fixed and performance-based or discretionary bonuses with the performance-based compensation focused on profits as opposed to revenue growth.

**Option Exercises and Fiscal Year-end Option Value Table**

None of the named executive officers exercised any stock options during the year ended June 30, 2025, or held any outstanding stock options as of June 30, 2025.

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**Incentive Plan**

The Registrant does not have any equity compensation plans.

**Consulting Agreements**

None, although the officers are currently paid as related party consultants of the Company.

**Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.** 

The table below sets forth as of June 30, 2025, information with respect to beneficial ownership of the Company's common stock by:

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| |
|:---|
| Each person known to the Company to own beneficially more than 5% of our outstanding common stock, either before or immediately after the merger. |
| Each of the post-Merger directors and executive officers of the Company. |
| All of our post-Merger directors and executive officers as a group. |

---

Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission. Shares of common stock subject to any warrants or options that are presently exercisable or exercisable within 60 days of June 30, 2025, are deemed outstanding for the purpose of computing the percentage ownership of the person holding the warrants or options but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. The numbers reflected in the percentage ownership columns are based on a fully diluted basis of the Company's common stock outstanding after a conversion of the Series A Preferred Stock into Common Shares. The persons named in the table have sole voting and sole investment power with respect to all shares beneficially owned, subject to community property laws where applicable.

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Number of** <br>**Shares of** <br>**Common** <br>**Stock** | **Number** <br>**of Series A Preferred** <br>**Stock** | **Total Fully** <br>**Diluted** <br>**Shares** | **Percentage Represented** <br>**on a Fully** <br>**Diluted** <br>**Basis** |
| <br>**Name of Beneficial Owner** |  |  |  |  |
| Micha Holdings, LLC <sup>(1)</sup> |  | 44800 | 44800000 | 1.92% |
| Ancient Investments, LLC <sup>(2)</sup> |  | 200000 | 200000000 | 8.55% |
| Basil Consulting, LLC <sup>(3)</sup> | 5000000 | 77362 | 82362000 | 3.52% |
| Christopher Sawchuk | 16890791 | 100000 | 116890791 | 5.00% |
| Pablo Lavigna <sup>(4)</sup> | 13454545 |  | 13454545 | 0.58% |
| Brian Carey <sup>(5)</sup> | 203025 |  | 203025 | 0.01% |
| All directors and executive officers as a group (five persons**)** | 13657570 |  | 213657570 | 9.14% |
| Total shares | 695746625 | 664996 | 1360742625 |  |

---

(1) Alberto Silva has control and dispositive power over Micha Holdings, LLC and is the beneficial owner of Micha Holdings, LLC.

(2) Keith Duffy is the Chairman and Chief Executive Officer of the Company, and is a beneficial owner of Ancient Investments, LLC.

(3) Cameron Cox is the beneficial owner or Basil Consulting, LLC.

(4) Pablo Lavigna is the Chief Information Officer of the Company and the beneficial owner of these shares, which are under his personal name and his company, AMP Web Services, LLC.

(5) Brian Carey is the Chief Financial Officer of the Company.

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**Item 13. Certain Relationships and Related Transactions, and Director Independence**

**Director Independence**

We are not currently a "listed company" under SEC rules and are therefore not required to have a Board comprised of a majority of independent directors or separate committees comprised of independent directors. We currently do not have any independent directors as the term "independent" is defined by the rules of the Nasdaq Stock Market.

**Item 14. Principal Accounting Fees and Services.**

The following is a summary of the fees billed to us by Astra Audit & Advisory, LLC for professional services rendered for the fiscal years ended June 30, 2025 and 2024:

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| | | |
|:---|:---|:---|
|  | **Fiscal Year Ended** | **Fiscal Year Ended** |
|  | **June 30, 2025** | **June 30, 2024** |
| Audit Fees | $72037 | $89605 |
| Audit Related Fees |  |  |
| Tax Fees |  |  |
| All Other Fees | - | - |
|  | $72037 | $89605 |

---

<u>Audit Fees</u>. Consists of fees billed for professional services rendered for the audit of our consolidated financial statements and review of interim consolidated financial statements included in quarterly reports and services that are normally provided in connection with statutory and regulatory filings or engagements.

<u>Audit Related Fees</u>. Consists of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under "Audit Fees".

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<u>Tax Fees</u>. Consists of fees billed for professional services for tax compliance, tax advice and tax planning. These services include preparation of federal and state income tax returns.

<u>All Other Fees</u>. Consists of fees for product and services other than the services reported above.

<u>Board of Directors' Pre-Approval Policies</u>

Our Board of Directors' policy is to pre-approve all audit and permissible non-audit services provided by the independent auditors. These services may include audit services, audit related services, tax services, and other services. Pre-approval is generally provided for up to one year, and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. The independent auditors and management are required to periodically report to the Board of Directors regarding the extent of services provided by the independent auditors in accordance with this pre-approval and the fees for the services performed to date. The Board of Directors may also pre-approve particular services on a case-by-case basis.

Our Board of Directors has reviewed and discussed with Astra Audit & Advisory ("Astra") our audited consolidated financial statements contained in this Annual Report on Form 10-K for the fiscal years ended June 30, 2025 and 2024, respectively. The Board of Directors also has discussed with Astra the matters required to be discussed pursuant to SAS No. 61 (Codification of Statements on Auditing Standards, AU Section 380), which includes, among other items, matters related to the conduct of the audit of our consolidated financial statements.

Based on the review and discussions referred to above, the Board of Directors determined that the audited consolidated financial statements be included in our Annual Report on Form 10-K for our fiscal year ended June 30, 2025, for filing with the SEC.

---

| |
|:---|
| 45 |
| *[**Table of Contents**](#toc)* |

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**PART IV**

**Item 15. Exhibits, Financial Statement Schedules**

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| | |
|:---|:---|
| **Exhibit**<br>**Number** | **Document** |
| [3.1](http://www.sec.gov/Archives/edgar/data/1481504/000100201410000057/exh31.htm) | [Articles of Incorporation for Eastern World Solutions, Inc. dated December 18, 2009 (incorporated by reference to Exhibit 3.1 to Current Report on Form S-1 dated January 25, 2010.](http://www.sec.gov/Archives/edgar/data/1481504/000100201410000057/exh31.htm) |
| [3.2](http://www.sec.gov/Archives/edgar/data/1481504/000100201410000057/exh32.htm) | [Bylaws of Eastern World Solutions, Inc. (incorporated by reference to Exhibit 3.2 to Current Report on Form S-1 dated January 25, 2010.](http://www.sec.gov/Archives/edgar/data/1481504/000100201410000057/exh32.htm) |
| [3.3](http://www.sec.gov/Archives/edgar/data/1481504/000147793221007355/xeri_ex42.htm) | [Certificate of Designation of Series A Preferred shares effective September 30, 2019.](http://www.sec.gov/Archives/edgar/data/1481504/000147793221007355/xeri_ex42.htm) |
| [3.4](http://www.sec.gov/Archives/edgar/data/1481504/000147793221007355/xeri_ex43.htm) | [Certificate of Designation of Series B Preferred shares effective February 22. 2021.](http://www.sec.gov/Archives/edgar/data/1481504/000147793221007355/xeri_ex43.htm) |
| [10.4](http://www.sec.gov/Archives/edgar/data/1481504/000147793221007820/xeri_ex41.htm) | [Senior Secured Promissory Note (incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K filed on November 4, 2021).](http://www.sec.gov/Archives/edgar/data/1481504/000147793221007820/xeri_ex41.htm) |
| [10.5](http://www.sec.gov/Archives/edgar/data/1481504/000147793221007820/xeri_ex42.htm) | [Warrant (incorporated by reference to Exhibit 4.2 to Current Report on Form 8-K filed on November 4, 2021).](http://www.sec.gov/Archives/edgar/data/1481504/000147793221007820/xeri_ex42.htm) |
| [10.6](http://www.sec.gov/Archives/edgar/data/1481504/000147793221007820/xeri_ex101.htm) | [Security Agreement (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on November 4, 2021).](http://www.sec.gov/Archives/edgar/data/1481504/000147793221007820/xeri_ex101.htm) |
| [10.7](http://www.sec.gov/Archives/edgar/data/1481504/000147793222005599/xeri_ex101.htm) | [Amendment to Secured Promissory Note (incorporated by reference to Current Report on Form 8-K filed on August 3, 2022).](http://www.sec.gov/Archives/edgar/data/1481504/000147793222005599/xeri_ex101.htm) |
| [14.1](http://www.sec.gov/Archives/edgar/data/1481504/000100201411000057/exh141.htm) | [Code of Ethics (incorporated by reference to Exhibit 14.1 to the Form 10-K filed on February 15. 2011.](http://www.sec.gov/Archives/edgar/data/1481504/000100201411000057/exh141.htm) |
| [31.1](xeri_ex311.htm) | [Certification of the principal executive officer pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](xeri_ex311.htm) |
| [31.2](xeri_ex312.htm) | [Certification of the principal financial officer pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](xeri_ex312.htm) |
| [32.1](xeri_ex321.htm) | [Certification of the principal executive officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](xeri_ex321.htm) |
| [32.2](xeri_ex322.htm) | [Certification of the principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](xeri_ex322.htm) |
| 101.INS | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document). |
| 101.SCH | Inline XBRL Taxonomy Extension Schema |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation |
| 101.DEF | Inline XBRL Taxonomy Extension Definition |
| 101.LAB | Inline XBRL Taxonomy Extension Label |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation |
| 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |

---

**Item 16. Form 10-K Summary**

None.

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|:---|
| 46 |
| *[**Table of Contents**](#toc)* |

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**SIGNATURES**

In accordance with the Section 13 and 15(d) of the Securities and Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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| | | |
|:---|:---|:---|
|  | **XERIANT, INC.** | **XERIANT, INC.** |
| Date: October 2, 2025 | By: | */s/ Keith Duffy* |
|  |  | Keith Duffy |
|  | Title: | President and Chief Executive Officer (Principal Executive) |
| Date: October 2, 2025 | By: | */s/ Brian Carey* |
|  |  | Brian Carey |
|  | Title: | Chief Financial Officer |

---

---

| | | |
|:---|:---|:---|
| Date: October 2, 2025 | By: | */s/ Scott Duffy* |
|  |  | Scott Duffy |
|  | Title:  | Executive Director, Corporate Operations |

---

## Exhibit 31.1

**EXHIBIT 31.1**

**CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND** 

**PRINCIPAL EXECUTIVE OFFICER**

**PURSUANT TO RULE 13a-14(a) UNDER THE EXCHANGE ACT**

I, Keith Duffy, certify that:

1. I have reviewed this annual report on Form 10-K of Xeriant, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Dated: October 2, 2025 | By: | */s/ Keith Duffy* |
|  |  | Keith Duffy |
|  |  | Chief Executive Officer (Principal Executive Officer) |

---

## Exhibit 31.2

**EXHIBIT 31.2**

**CERTIFICATION OF CHIEF FINANCIAL OFFICER AND** 

**PRINCIPAL FINANCIAL OFFICER**

**PURSUANT TO RULE 13a-14(a) UNDER THE EXCHANGE ACT**

I, Brian Carey, certify that:

1. I have reviewed this annual report on Form 10-K of Xeriant, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Dated: October 2, 2025 | By: | */s/ Brian Carey* |
|  |  | Brian Carey |
|  |  | Chief Financial Officer (Principal Financial Officer) |

---

## Exhibit 32.1

**EXHIBIT 32.1**

**CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER** 

**PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002** 

**(18 U.S.C. SECTION 1350)**

In connection with the Annual Report of Xeriant, Inc., a Nevada corporation (the "Company"), on Form 10-K for the year ended June 30, 2025, as filed with the Securities and Exchange Commission (the "Report"), Keith Duffy, Chief Executive Officer of the Company, does hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. ss. 1350), that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

---

| | | |
|:---|:---|:---|
| Date: October 2, 2025 | By: | */s/ Keith Duffy* |
|  |  | Keith Duffy |
|  |  | Chief Executive Officer (Principal Executive Officer) |

---

## Exhibit 32.2

**EXHIBIT 32.2**

**CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER** 

**PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002** 

**(18 U.S.C. SECTION 1350)**

In connection with the Annual Report of Xeriant, Inc., a Nevada corporation (the "Company"), on Form 10-K for the year ended June 30, 2025, as filed with the Securities and Exchange Commission (the "Report"), Brian Carey, Chief Financial Officer of the Company, does hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. ss. 1350), that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

---

| | | |
|:---|:---|:---|
| Date: October 2, 2025 | By: | */s/ Brian Carey* |
|  |  | Brian Carey |
|  |  | Chief Financial Officer (Principal Financial Officer) |

---