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 June 30, ~~2023~~2024

☐	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

XERIANT, INC.

(Exact name of registrant as specified in its charter).

Nevada		27-1519178
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Innovation Centre 1 3998 FAU Boulevard, Suite 309 Boca Raton, Florida		33431
(Address of principal executive offices)		(Zip code)

Registrant's telephone number, including area code: (561) 491-9595

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

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

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 ☐ 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 ☐ 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 ☒ 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 ☒ 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.

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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, ~~2022~~2023, 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 $308.42 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 127, ~~2023~~2024, the registrant had ~~401~~581,~~033~~184,~~144~~486 outstanding shares of common stock.

Documents Incorporated by Reference: None.

TABLE OF CONTENTS
		Page
PART I.
Item 1.	Business.	4
Item 1A.	Risk Factors.	14
Item 2.	Properties.	30
Item 3.	Legal Proceedings.	30
Item 4.	Mine Safety Disclosures.	30
PART II.
Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	31
Item 6.	Selected Financial Data.	32
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations.	32
Item 8.	Financial Statements and Supplementary Data.	39
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.	40
Item 9A.	Controls and Procedures.	40
Item 9B.	Other Information.	41
PART III.
Item 10.	Directors, Executive Officers and Corporate Governance.	42
Item 11.	Executive Compensation.	45
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	47
Item 13.	Certain Relationships and Related Transactions, and Director Independence.	48
Item 14.	Principal Accounting Fees and Services.	48
PART IV.
Item 15.	Exhibits, Financial Statement Schedules.	50

TABLE OF CONTENTS

		Page
PART I.
Item 1.	Business.	4

Item 1A.	Risk Factors.	13

Item 1B	Unresolved Staff Comments	30

Item 1C	Cybersecurity	30

Item 2.	Properties.	30

Item 3.	Legal Proceedings.	30

Item 4.	Mine Safety Disclosures.	30

PART II.
Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	31

Item 6.	Reserved.	32

Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations.	32

Item 8.	Financial Statements and Supplementary Data.	39

Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.	40

Item 9A.	Controls and Procedures.	40

Item 9B.	Other Information.	41

Item 9C	Disclosure Regarding Foreign Jurisdictions that Prevent Inspection	41

PART III.
Item 10.	Directors, Executive Officers and Corporate Governance.	42

Item 11.	Executive Compensation.	45

Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	47

Item 13.	Certain Relationships and Related Transactions, and Director Independence.	48

Item 14.	Principal Accounting Fees and Services.	48

PART IV.
Item 15.	Exhibits, Financial Statement Schedules.	50

Item 16	Form 10-K Summary	50

Table of Contents

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 ~~necessarily~~ 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:

· In this annual report, references to “Xeriant”, “Banjo”, “XERI”, “BANJ” or “the Company,” or “we,” or “us,” and “our” refer to Xeriant, Inc. or 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.

Table of Contents

PART I.

Item 1. Business

Xeriant, Inc. ~~(“Xeriant” or the “Company”)~~ is dedicated to the discovery, development and commercialization of advanced materials and technology related to next generation air and spacecraft, 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. Xeriant’s advanced materials line will be marketed under the DUREVER™ brand, and includes ~~NexBoard~~NEXBOARD™, an eco-friendly, patent-pending composite building panel made from plastic and cellulose waste and a proprietary flame retardant, primarily designed to ~~replace~~be ~~products~~a replacement for traditional building materials such as drywall, plywood, OSB, MDF, MgO board and other materials used in construction ~~and is dependent on the availability of capital and feedstock~~. Xeriant is located at the Research Park at Florida Atlantic University in Boca Raton, Florida adjacent to the Boca Raton Airport.

Corporate History

WeFormation ~~were~~of ~~originally incorporated in Nevada on December 18, 2009, under the name Eastern World Solutions, Inc. The name 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.~~

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. ~~On June 22, 2020, the name was changed from Banjo & Matilda, Inc. to Xeriant, Inc.~~

~~On May 31, 2021, the Company entered into a Joint Venture Agreement with~~ XTI Aircraft ~~Company~~Joint (“XTI”) to form a new company, called Eco-Aero, LLC (the “JV”), with the purpose of completing the preliminary design of XTI’s TriFan 600, a 5-passenger plus pilot, hybrid electric, vertical takeoff, and landing (eVTOL) fixed wing aircraft. Under the Agreement, Xeriant has contributed capital, technology, and strategic business relationships, and XTI was contributing intellectual property, licensing rights and know-how. XTI and the Company each own 50 percent of the JV. The Company is the controlling Member and, as such, accounts for the JV as a consolidated entity. Preliminary design of the aircraft was completed during the first quarter of fiscal year 2022 according to XTI.Venture

On May 1731, ~~2022~~2021, the Company entered into a ~~Letter~~50/50 Joint Venture Agreement with XTI ~~whereby~~Aircraft ~~Xeriant~~Company ~~would~~(“XTI”) ~~receive~~to ~~compensation~~form ~~for~~a ~~introducing~~new ~~Inpixon~~company, acalled ~~Nasdaq~~Eco-~~listed company~~Aero, toLLC ~~XTI~~(the ~~for~~“JV”), awith ~~combination~~the orpurpose ~~any~~of ~~other~~completing ~~transaction. Should~~the apreliminary ~~combination~~design orreview ~~any~~(“PDR”) ~~other~~of ~~transaction~~XTI’s ~~occur~~TriFan 600, ~~the~~a ~~compensation~~5-passenger ~~due~~plus topilot, ~~Xeriant~~hybrid ~~would~~electric, ~~include~~vertical atakeoff, ~~six~~and ~~percent~~landing (6%VTOL) ~~fully~~fixed ~~diluted~~wing ~~interest~~aircraft. Xeriant ininvested ~~XTI~~approximately ~~upon~~$5.5 ~~dissolution~~million ofinto ~~its~~the ~~Joint~~joint ~~Venture~~venture ~~with~~after ~~Xeriant,~~borrowing ~~and~~the ~~XTI~~funds ~~would~~from ~~assume~~Auctus ~~Xeriant’s~~Fund, ~~obligations~~LLC ~~under~~(“Auctus”) ~~its~~through a Senior Secured Promissory Note, ~~with~~through ~~Auctus~~an ~~Fund,~~introduction ~~LLC. On~~from ~~July~~Maxim 25Group, ~~2023~~LLC, ~~Inpixon~~the ~~filed~~Company’s aninvestment ~~8-K~~banker ~~announcing~~at ~~that~~the ~~they~~time. The ~~had~~PDR ~~signed~~was ancompleted ~~Agreement~~during ofthe ~~Plan~~first ~~and~~quarter ~~Merger~~of ~~with~~2022 according to XTI. OnThe ~~October~~borrowed 6,funds ~~2023,~~from ~~Inpixon~~Auctus ~~filed~~were anintended ~~S4/A~~to ~~for~~be ~~the~~a ~~business~~bridge ~~combination~~loan ~~with~~that ~~XTI.~~would ~~Due~~be toresolved ~~the~~through ~~disclosures~~an inIPO ~~the~~(Initial ~~XTI~~Public Offering) and ~~Inpixon~~uplist ~~filings, we believe Xeriant is entitled~~ to ~~the~~Nasdaq ~~compensation provided~~ in ~~its~~a ~~Letter~~merger ~~Agreement~~ with XTI~~. As of the date of this filing~~, wewhich ~~remain~~did ~~engaged~~not inoccur ~~dialogue~~because ~~with~~ XTI refused to ~~enforce~~move ~~compliance~~forward with the ~~Letter~~merger ~~Agreement~~in ~~and~~accordance towith ~~find~~the anterms ~~amicable~~outlined ~~resolution,~~in ~~although~~the noBinding ~~assurance~~Term ~~can~~Sheet bedated ~~given~~December ~~that~~5, ~~such a resolution will be achieved~~2021.

~~Effective~~On ~~April~~May 217, 2022, after failed merger negotiations, the Company entered into a ~~Joint~~Letter ~~Venture~~Agreement with ~~Movychem~~XTI ~~s.r.o.,~~whereby aXeriant ~~Slovakian~~would ~~limited~~receive ~~liability~~compensation ~~company~~for ~~(“Movychem”)~~introducing Inpixon, ~~called~~a ~~Ebenberg,~~Nasdaq-listed ~~LLC~~company, ~~setting~~to ~~forth~~XTI ~~the~~for ~~terms~~a ~~for~~combination ~~the~~or ~~establishment~~any ofother transaction. Should a ~~joint~~combination ~~venture~~or toany ~~exploit~~other transaction occur, the ~~Movychem~~compensation ~~Intellectual~~due ~~Property~~to Xeriant would include a six percent (6%) fully diluted interest in XTI upon dissolution of its Joint Venture with Xeriant, and ~~the~~XTI ~~Purchased~~would ~~Patents~~assume Xeriant’s obligations under its Senior Secured Note with Auctus. On ~~The~~March JV10, ~~was~~2023, ~~organized~~Inpixon asissued a ~~Florida~~note ~~limited~~receivable ~~liability~~to ~~company~~XTI ~~and~~for ~~was~~$300,000, ~~owned~~a ~~50%~~“Transaction” byas ~~each~~defined ofby the ~~Company~~Letter ~~and Movychem~~Agreement. ~~Effective~~On ~~June~~July 3025, 2023, ~~the~~Inpixon ~~Joint~~filed ~~Venture~~an ~~was~~8-K ~~terminated,~~announcing ~~and~~that ~~the~~they ~~entity~~had ~~will~~signed bean ~~subsequently~~Agreement ~~dissolved~~of Plan and Merger with XTI.

Table of Contents

On December 6, 2023, the Company initiated legal proceedings against XTI 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, and alleging fraudulent acts, breach of contract and misappropriation of intellectual property.

On February 29, 2024, the Company filed a Second Amended Complaint against XTI, along with other unnamed defendants, and on March 13, 2024 XTI filed a partial Motion to Dismiss.

On March 12, 2024, XTI merged with Inpixon, the Nasdaq-listed company introduced to XTI by Xeriant, arranged through Xeriant’s investment banker at that time, Maxim Group, LLC.

On April 10, 2024, the Company filed a Memorandum of Law in Opposition to XTI’s Motion to Dismiss the Company’s Second Amended Complaint and is waiting for the court to rule on the matter.

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.

Auctus Fund LLC Senior Secured Promissory Note

On October 27, 2021, the Company was issued a convertible note payable to Auctus in the principal amount of $6,050,000, consisting of $5,142,500, which was the net amount funded due to the original issue discount 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 became due and payable on October 27, 2022, plus closing costs, which included $308,550 paid to Maxim Group, LLC. Xeriant was introduced to 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 19, 2023, Xeriant filed a complaint in the United States Southern District of New York (Case no.1:23-cv-09200) against Auctus, 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. 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.

Movychem Joint Venture

Effective April 2, 2022, the Company entered into a Joint Venture with Movychem s.r.o., a Slovakian limited liability company (“Movychem”), called Ebenberg, LLC, setting forth the terms for the establishment of a joint venture to develop and exploit certain polymer-related advanced materials. The JV was organized as a Florida limited liability company and was owned 50% by each of the Company and Movychem. Effective June 30, 2023, the Joint Venture was terminated, and the entity was subsequently dissolved.

OUR BUSINESS SUMMARY

Introduction

The Space Race fueled global competition to own the skies, and led to break-neck innovations in aerospace, technology and advanced materials. From the first manned space flight to the first man on the Moon, aerospace has been at the leading edge of some of the most important technological, design and engineering breakthroughs that have ever impacted global industry. The commercialization of transformative aerospace technologies, including eco-friendly specialty materials, has been successfully deployed and integrated across multiple industry sectors, and has 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.

45 Table of Contents

Company Overview

Advanced Materials

A ~~primary~~major focus of our Company is the development, acquisition and commercial exploitation of eco-friendly, advanced materials ~~and chemicals~~ which have applications across a broad range of industries and the potential to generate significant near-term revenue. Our commercialization strategy encompasses licensing arrangements, mergers, and joint ventures, which ~~would~~could allow for more rapid access to the market with reduced capital requirements and financial risk. InSome ~~addition~~partner tocompanies ~~providing~~may ~~the~~provide production and distribution infrastructure, ~~these~~which ~~established~~could ~~partnering companies can~~ streamline testing and certification ~~and~~as well as add brand recognition ~~value~~. Once ~~manufacturing~~the ~~has~~Company ~~been~~establishes ~~established at~~ sufficient production capabilities, the advanced materials ~~and chemicals~~ may be sold as standalone products, enhancements to existing products, or used in the development of proprietary products under a new trademarked ~~brand~~brands owned by the Company. We are currently exploring manufacturing and branding opportunities for specific products derived from advanced materials ~~and chemicals acquired or developed~~, which would involve setting up production facilities, equipment, systems and supply ~~chain~~chains.

~~Effective~~On ~~April~~August 212, 2022, wethe ~~entered~~Company ~~into~~filed athe ~~Joint~~trademark ~~Venture~~“NEXBOARD” ~~Agreement~~for ~~with~~construction ~~Movychem s.r.o~~panels, ~~a Slovakian chemical company~~namely, ~~setting~~composite ~~forth~~sheets ~~the~~and ~~terms~~panels ~~for~~composed aprimarily ~~joint~~of ~~venture~~plastic, ~~(referred~~reinforcement tomaterials ~~herein~~and asfire-retardant ~~the~~chemicals ~~Movychem~~for ~~JV)~~use toin ~~exploit~~walls, ~~the~~ceilings, ~~Movychem~~flooring, ~~Intellectual~~framing, ~~Property~~siding, roofing and ~~the Purchased Patents~~decking. The ~~Movychem~~trademark ~~JV,~~filing ~~owned~~was ~~50%~~intentionally bybroad ~~Xeriant~~ and ~~50%~~based byupon ~~Movychem,~~demand ~~subject~~for toa ~~certain~~general ~~funding~~all-purpose ~~conditions,~~construction ~~was~~panel ~~granted~~made ~~the~~from ~~exclusive~~a ~~worldwide~~mixture ~~rights~~of ~~to the intellectual property related to Retacell®, an industrial flame~~fire-retardant, and ~~would~~recycled ~~be responsible for developing applications and commercializing products~~materials.

OnBeginning ~~June~~in 8mid-2023, ~~2022~~the Company began testing two high-volume production processes for NEXBOARD, ~~Xeriant~~so ~~announced~~our ~~the~~construction ~~development~~panels ofcould abe ~~multi~~cost-~~purpose~~effectively produced in the United States, ~~high-strength~~at ~~fire-~~industrial scale. After significant research and ~~water-resistant~~development, the Company expects that it will be able to manufacture its composite ~~panel~~materials ~~made~~into ~~from~~green aconstruction ~~formulation~~products of ~~Retacell®~~various shapes and asizes. High ~~cardboard~~volume ~~fiber-reinforced~~production ~~polymeric~~of ~~resin.~~certified ~~The~~consistent ~~panel~~construction ~~described~~panels inwill ~~the~~unlock ~~press~~existing ~~release~~demand ~~was~~indicated ~~initially~~by ~~produced~~several homebuilders, green building products companies, and transportation companies seeking our environmentally friendly construction panels in avarying ~~benchtop~~thicknesses ~~setting~~and sizes, including standard 48” x 96” sheets.

~~After~~On ~~experiencing~~March 31, 2023, the Company filed a ~~number~~provisional patent application titled “Multilayered Fire-Resistant Polymer Composite and Method for Producing Same” for a method of ~~issues~~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, cellulosic fiber, and a proprietary ecofriendly fire retardant, including but not limited to ~~Movychem’s~~use ~~unwillingness~~in towalls, ~~provide~~ceilings, ~~material~~flooring, ~~documentation~~framing, ~~processes~~siding, roofing, molding, and ~~information~~decking, ~~required~~used ~~for~~in ~~the~~construction. On ~~exploitation~~April of1, ~~Retacell®~~2024, the Company ~~independently~~filed ~~developed~~a annon-provisional ~~upcycled~~U.S. ~~construction~~patent ~~panel,~~application ~~without~~claiming ~~the~~priority ~~inclusion~~to ofthe ~~Retacell®,~~filing ~~outside~~date of the ~~Movychem~~2023 JVrelated provisional patent application described herein.

On July 1131, 2023, Xeriant ~~announced~~filed the ~~successful~~trademark ~~testing~~“DUREVER” offor agreen ~~proprietary~~composite ~~high-volume~~construction ~~production~~products ~~process~~made ~~for~~from anrecycled ~~environmentally~~materials ~~friendly~~that ~~patent-pending~~could ~~composite~~include construction ~~panel~~panels, ~~(“NexBoard”)~~framing, ~~that~~support ~~can~~beams, beflooring, ~~produced~~sheathing, inroofing, ~~the~~decking, ~~United~~trim, ~~States~~doors, atand ~~industrial~~window ~~scale~~casings. ~~This~~ The ~~approach~~Company’s ~~will~~advanced ~~enable~~composites ~~the~~could ~~Company to~~also ~~unlock~~be ~~existing~~used ~~demand~~as ~~indicated~~a bymore ~~several~~durable ~~homebuilders~~wood ~~and~~replacement ~~developers~~for ~~seeking~~furniture, ~~environmentally~~cabinets, ~~friendly~~pallets, ~~construction~~and ~~panels~~potentially ina ~~varying~~variety ~~thicknesses~~of ~~and~~aerospace, ~~sizes~~automotive, ~~including~~and ~~standard~~marine ~~48”~~components xthat ~~96”~~would ~~sheets,~~also ~~economically~~be ~~and~~marketed ~~with~~under ~~consistency~~the DUREVER brand. The Company may also develop and ~~efficiency~~market additional fire-retardant products under DUREVER.

~~Because~~During ofthe ~~Movychem’s~~second ~~non-performance~~fiscal asquarter ~~described~~of ~~above~~2024, ~~Xeriant~~the ~~ceased~~Company ~~paying~~was ~~Movychem~~engaged ~~$25,000 per month as required~~ in the ~~Joint~~development ~~Venture~~and ~~beginning~~testing ~~December~~of ~~2022. On~~its ~~February~~proprietary ~~13,~~eco-friendly ~~2023,~~flame ~~Movychem~~retardants ~~formally~~for ~~requested~~use ~~dissolution~~in of its ~~Joint~~construction ~~Venture with Xeriant~~panel, ~~Ebenberg, LLC~~NEXBOARD. OnThese ~~February~~fire ~~24,~~retardants ~~2023,~~are ~~Xeriant~~effective ~~provided~~when aincorporated ~~formal~~in ~~response~~a tovariety ~~Movychem,~~of ~~highlighting~~thermoplastics ~~its multiple~~ and ~~sustained~~fiber ~~lapses~~composite inmaterials, ~~collaborative~~allowing ~~efforts related to~~ the ~~commercialization~~DUREVER ~~of the Retacell® technology. Subsequent to this communication~~products, ~~Xeriant~~including ~~expressly~~NEXBOARD ~~repudiated Movychem’s proposition for dissolution and their proposition~~ to ~~take~~be ~~an exclusive territory to market Retacell®~~fire-resistant. ~~Because~~The ~~Xeriant~~Company is ~~focused~~considering onfiling ~~the~~a ~~commercialization~~patent ~~and~~application ~~industrial-level~~for ~~production~~its ofproprietary ~~eco-friendly~~flame ~~composite construction panels, and has moved beyond the Retacell® technology, the Company agreed to dissolution of the Ebenberg, LLC Joint Venture effective June 30, 2023~~retardants.

OnAfter ~~March 31, 2023, we filed~~ a ~~provisional~~series ~~patent application titled “Multilayered Fire-Resistant Polymer Composite and Method for Producing Same,” for a method~~ of ~~producing~~research ~~a unique fire-resistant thermoplastic~~ and ~~fiber~~development 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 eco-friendly fire~~-retardant~~ ~~chemicals~~tests, ~~including~~the ~~but~~Company ~~not~~is ~~limited~~now topursuing ~~use~~the infinal ~~walls,~~certification ~~ceilings,~~of ~~flooring, framing, siding, roofing, molding, and decking, used in construction~~NEXBOARD. Subject to available capital and certification, wethe ~~are~~Company is planning to build manufacturing facilities in the United States for the production of ~~NexBoardTM~~NEXBOARD in order to meet market demand, or alternatively license the technology and process. WeIn ~~have~~the interim, the Company has identified potential sites for near-term contract manufacturing, a pilot plant, and ~~large~~larger manufacturing facilities, received bids for specialized manufacturing equipment, developed timetables related to the action plan, and hired a managing director with decades of experience to oversee the ~~projects~~project.

On6 ~~July~~Table ~~30,~~of ~~2023, we filed the trademark BlueGreen for ecofriendly composite building products and Durever™ for the same categories on July 31, 2023.~~Contents

5 Table of Contents

Aerospace

~~Another~~The ~~area~~Company seeks to develop, 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 ~~interest~~focus ~~for~~that ~~our~~are reshaping the future of aerospace include advanced materials, advanced air mobility, unmanned aerial systems, AI, hypersonics, communications, cybersecurity, satellites, and renewable energy technology. The Company’s ~~continues~~initial toconcentration bewas on the emerging aviation market called ~~Advanced~~advanced ~~Air~~air ~~Mobility~~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 offer 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. ~~The~~Hydrogen ~~adoption~~powered aircraft have already been prototyped and ~~integration~~are ofexpected ~~niche~~to ~~aerial~~become ~~services~~more ~~through~~prevalent ~~AAM~~over isthe ~~expected~~next todecade. The ~~provide~~development ~~benefits~~of ~~throughout~~solid-state hydrogen technology may address the ~~economy~~safety, large-area storage requirement limitations for gaseous-state hydrogen. The WeCompany ~~plan~~plans to partner with and acquire strategic interests in visionary companies that accelerate our mission of commercializing critical breakthrough ~~AAM~~aerospace technologies which enhance ~~performance~~sustainability, ~~increase safety~~performance, and ~~enable and support more efficient, autonomous, and sustainable flight operations, including electric and hybrid-electric passenger and cargo transport aircraft capable of vertical takeoff and landing~~safety. ~~Our plan to source and acquire strategic interests in leading aerospace companies developing breakthrough VTOL aircraft began in the second quarter of fiscal year 2021.~~

~~Effective~~In May ~~27,~~of 2021, wethe ~~entered~~Company ~~into~~executed a ~~Joint~~joint ~~Venture~~venture ~~Agreement~~ with XTI Aircraft Company (“XTI”), ato ~~privately~~further ~~owned~~the ~~Original~~development ~~Equipment~~of ~~Manufacturer~~the ~~(OEM)~~TriFan ~~based~~600, inpurported ~~Englewood~~to become the world’s fastest, ~~Colorado~~longest-range commercial VTOL airplane, ~~for~~funding ~~the~~approximately ~~purpose~~$5.5 ofmillion. Preliminary ~~completing~~Design Review was completed in early 2022 and XTI claims that the ~~preliminary~~TriFan ~~design~~600 could enter service by the end of 2027. XTI’s has recently stated in public announcements that the TriFan 600 has over $7 billion in conditional preorders. On March 12, 2024, XTI merged with a 5Nasdaq-~~passenger~~list ~~plus~~company. Under ~~pilot~~an agreement with XTI, ~~hybrid~~the ~~electric~~Company ~~vertical~~was ~~takeoff~~to receive certain compensation and ~~landing~~interest ~~(eVTOL)~~in ~~fixed~~XTI. The Company filed suit against XTI on December 6, 2023, to pursue a number of claims against XTI. Note 1 on page F-~~wing~~8 ~~aircraft~~of this filings provides a further explanation, however, the full text of the complaint was filed with an 8-K on December 12, 2023, under Exhibit 99.1.

~~Through~~Since ~~our joint venture with XTI~~2022, ~~(referred~~the toCompany ~~hereinafter~~has asbeen ~~the~~developing ~~“XTI~~advanced ~~JV”),~~materials wefocused ~~were~~on ~~involved~~high-performance infire-resistant ~~the~~polymer ~~successful~~composites ~~completion~~for ofpotential ~~the~~applications ~~preliminary~~in ~~design~~aerospace ofas ~~their~~well ~~TriFan~~as ~~600~~other ~~eVTOL aircraft~~industries. The ~~TriFan~~Company ~~600~~has iscreated ~~being designed to become the fastest~~proprietary, ~~longest~~eco-~~range~~friendly ~~VTOL~~flame ~~aircraft~~retardants ~~in the world~~ and ~~the~~a ~~first commercial fixed~~patent-~~wing~~pending ~~VTOL~~methodology ~~airplane,~~for ~~with~~efficiently ~~current~~incorporating ~~pre-orders~~this oftechnology ~~approximately~~into ~~seven~~polymer ~~billion~~composites ~~dollars~~to increate ~~gross~~heat-resistant, ~~revenue~~superior ~~upon~~strength-to-weight ~~delivery of those aircraft~~properties.

~~The~~In ~~purpose~~the area of aerospace, management believes that the ~~XTI~~Company JVcan grow expeditiously by acquiring technology and assets primarily through acquisitions, ~~preliminary~~joint ~~design~~ventures, ~~review~~strategic ~~(PDR)~~investments, ~~had~~and ~~been~~licensing ~~achieved~~arrangements. ~~during~~As a publicly traded company, we offer our growth partners such benefits as improved access to capital, higher valuations and lower risk through the ~~first~~shared ~~quarter~~ownership of ~~fiscal~~a ~~year~~diversified ~~2022~~portfolio, while allowing these entities to maintain independence in their distinct operations to focus on their fields of expertise. At ~~that~~Cost ~~point~~savings and efficiencies may be realized from sharing non-operational functions such as finance, ~~Xeriant~~legal, ~~had~~tax, ~~funded~~sales ~~approximately~~and ~~$5.5~~marketing, ~~million~~human ~~into~~resources, ~~the~~purchasing ~~XTI~~power, JVas well as investor and public relations.

On May 17, 2022, Xeriant signed a Letter Agreement with XTI related to the introduction of XTI to the Nasdaq company, Inpixon. 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 on a pre-merger basis, and XTI would assume the obligations of Xeriant’s Senior Secured Note with Auctus Fund, LLC. On July 25, 2023, Inpixon filed an 8-K, announcing their intention to merge with XTI having executed an Agreement of Plan and Merger. The filing also showed that XTI had engaged in a transaction with Inpixon on March 10, 2023, receiving $300,000 in funding. Inpixon subsequently filed an S-4/A registration statement on October 6, 2023. Due to the disclosures in the XTI and Inpixon filings, we believe Xeriant is entitled to the compensation provided in its Letter Agreement with XTI. XTI and Inpixon are disputing the fact that the Letter Agreement gives rise to compensation to the Company. Please refer to the discussion in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a discussion of the dispute. As of the date of this filing, we remain engaged in dialogue with XTI to enforce compliance with the Letter Agreement and to find an amicable resolution, although no assurance can be given that such a resolution will be achieved.

In the area of aerospace, management believes that Xeriant can grow expeditiously by acquiring technology and assets primarily through acquisitions, joint ventures, strategic investments, and licensing arrangements. As a publicly traded company, we offer our subsidiaries 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 and marketing, human resources, purchasing power, as well as investor and public relations.

The Company is trading on the OTCQB Venture Market under the stock symbol, XERI.

67 Table of Contents

Industry Overview

~~Aerospace~~Advanced 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 health care, transportation, telecommunications, agriculture, manufacturing and materials, and have led to the commercialization of new technologies and products that have positively impacted our daily lives.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 aircraft, 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 fiber, fiberglass, wood or carbon, which provide increased mechanical strength. Additives, surface treatments and decorative finishes can further enhance the properties of the boards, 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. ~~Plastic~~Composite ~~composite~~ boards made from recycled ~~plastics~~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.

7 Table of Contents

Below are some compelling statistics and forecasts in support of the development and commercialization of green building products, including non-toxic flame-retardant chemicals:

	·	Sustainable investments total USD 35.3 trillion, or 36% of all assets in five of the world's biggest markets, according to a report from the Global Sustainable Investment Alliance.
	·	According to Research and Markets, global investments in sustainable and green technologies for smart cities and megaprojects is expected to reach USD 6.96 trillion by 2030, which represents a Compound Annual Growth Rate (CAGR) of 24.2%, which is expected to result in a rising demand for wood plastic composites and creating opportunities for interior construction manufacturers.

· The global green building materials market exceeded USD 265 billion in 2021 and is poised for a 12% CAGR from 2022 to 2028, reaching USD 586 billion by 2028, based on a report by Global Market Insights. · The global green building materials market from residential applications is set to account for USD 330 billion by 2028, according to Global Market Insights. · The global drywall and gypsum board market size is estimated to grow from USD 50.22 billion in 2020 to USD 95.15 billion in 2027, registering a CAGR of 11.24% during the forecast period (2021-2027), based on a report by Market Statsville Group. · The global plywood market size is estimated to be valued at USD 80.5 billion in 2022 and is expected to reach a valuation of USD 115 billion by 2028, based on a CAGR of 6.1%, according to Future Market Insights. · According to Allied Market Research, the global OSB market size was valued at USD 25.6 billion in 2020 and is projected to reach USD 44.3 billion by 2030, growing at a CAGR or 5.4% from 2021 – 2030. · The global medium-density fiberboard market (MDF) size reached USD 22.4 billion in 2021, and is expected to reach USD 33.3 billion by 2027, exhibiting a CAGR of 6.7% during 2022-2027, based on a study by IMARC Group. · The global wood plastic composites market size was estimated at USD 5.76 billion in 2021 and is expected to grow at a CAGR of 11.5% from 2022 to 2030, reaching USD 15.34 billion by 2030, according to Grand View Research. · Emergen Research estimates the global structural insulated panels (SIPs) market was USD 409.4 million in 2020 and is expected to register a CAGR of 5.2% during the forecast period, reaching USD 583.8 million in 2027. · Approximately 367 million metric tons of plastic waste are produced globally each year, of which the U.S. generates 42 million metric tons, more than any other country. · 12% of the global waste composition is plastic waste, which partially consists of plastic packaging among other plastic products and materials.

Table of Contents

· Over 66 million metric tons of plastic is collected for recycling, according to TheRoundup.org. · There are currently 5.25 trillion pieces of plastic in our oceans, according to TheRoundup.org. · According to the World Bank, paper and cardboard make up 17% of the global waste generated, the second-highest amount after food and green waste. · 23.05% of the municipal solid waste generated in the U.S. in 2018 consisted of paper and paperboard, which was the #1 highest amount generated of all materials including glass, metals, wood, textiles, and more, according to the EPA. · Countries all over the world are facing a housing crisis, with a massive shortage of homes for expanding populations. and 100 million are homeless, according to United Nations’ statistics. · India’s drive to bring homes to the country’s 1.3 billion people, rising incomes and the best affordability in two decades will unleash a $1.3 trillion wave of investment in housing over the next seven years, according to CLSA India Pvt. · The Indian government has provided initiatives like the Green Rating for Integrated Habitat Assessment (GRIHA) to promote green buildings, as reported by Mordor Intelligence. · By 2030, UN-Habitat estimates that 3 billion people, about 40 per cent of the world’s population, will need access to adequate housing, which translates into a demand for 96,000 new affordable and accessible housing units every day. · An estimated 1.6 billion people live in substandard housing, 100 million people worldwide are homeless, and one in four people live in conditions that are harmful to their health, safety and prosperity, according to United Nations’ statistics. · By 2050, the world population is projected to reach 9.8 billion, according to the United Nations.Aerospace

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 aircraft 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. ~~Common~~Increasing ~~technologies~~automobile traffic congestion in ~~AAM~~many ~~include~~urban ~~electric~~environments ~~propulsion,~~demands ~~short~~alternative ~~and~~transportation ~~vertical~~solutions ~~takeoff/landing~~such ~~techniques,~~as ~~composite~~eco-friendly ~~materials,~~air taxi services and ~~the~~urban ~~ability~~air mobility to ~~remotely~~improve orthe ~~autonomously~~quality ~~pilot~~of ~~aircraft.~~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.

According to information extracted from a Fortune Business Insights and a July 2024 report, those aircraft servicing the 100 to 300-mile range are expected to dominate the global market during the forecast period due to growing demand for longer range vertical take-off and landing aircraft for intercity travels. The growth of the 300-1,000-mile range aircraft segment is facilitated by increasing demand of VTOL (Vertical Takeoff and Landing) vehicles for military applications.

A major obstacle restraining growth in AAM transportation is the lack of infrastructure required to enable convenient access, including development of landing sites with charging stations and staffing, which is a high cost, and may be undesirable to consumers in many areas because of safety as well as noise and visual pollution concerns.

The establishment of regulatory frameworks and support from aviation authorities is crucial for the growth of the eVTOL market. Regulatory bodies such as the Federal Aviation Administration (FAA) and European Union Aviation Safety Agency (EASA) are working on developing guidelines and certifications specific to eVTOL operations. This regulatory clarity is essential for ensuring safety, standardization, and public trust in eVTOL aircraft.

The development and improvement in battery energy density and the emergence of other energy technologies, like solid state hydrogen, are significant drivers for the VTOL aircraft market growth. As batteries become more powerful, lighter, and capable of faster charging times, eVTOL (Electric VTOL) aircraft can fly longer distances with shorter downtimes, making them more practical and appealing for urban air mobility and other applications.

Various manufacturers are making significant investments in the development of the complex technologies needed to address the safety and operational challenges of urban air mobility, bringing next generation VTOL aircraft closer to certification and commercialization. These innovations include real-time situational awareness and collision avoidance systems to identify and navigate in unsafe operating environments, as well as the designs, engineering and systems needed for redundant energy, propulsion, and effective vectored thrust for control. The integration of autonomous technologies into eVTOL designs is a significant driver for market growth. Autonomy in aviation can increase safety by reducing human error, enhance efficiency through optimized route planning, and eventually reduce operational costs by potentially eliminating the need for pilots. The ongoing development of AI and machine learning, algorithms, sensors, and flight control systems paves the way for fully autonomous eVTOL services in the future.

Table of Contents

Below are some compelling statistics and forecasts in support of the development and commercialization of aerospace technologies related to AAM:

· Investment bank Morgan Stanley forecasts a USD 1 trillion total addressable market for electrically powered autonomous passenger and cargo air transport vehicles by 2040, and USD 9 trillion by 2050. · Nearly half of all flights globally are short-haul routes, less than 500 miles, which presents a significant opportunity for electrically powered aircraft. · Almost 3,000 general aviation airports in the U.S. have no scheduled passenger flights but are being maintained by the federal government through funds appropriated by Congress. These airports can be utilized for flights by electrically powered aircraft to connect underserved areas, ultimately creating a more distributed air transportation network.

· Between now and 2040, there will be an estimated global demand for almost 40,000 new passenger and cargo aircraft, 75 percent of which are smaller airliners targeting short-haul routes, according to Airbus. · Optimization of airframe configurations to improve aerodynamics, including propulsion- airframe integration, can contribute as much as 20-25 percent in fuel consumption reduction. · In December 2019, the FAA (Federal Aviation Administration) issued new proposed rules for remote identification of unmanned aircraft, indicating its serious intent to integrate these aircraft systems into the national airspace. · Agility Prime was recently created by the U.S. Air Force to help accelerate the regulatory process for the integration of commercial advanced air mobility vehicles, like flying cars, into our air transportation system. · In June 2020, the FAA in collaboration with NASA (National Aeronautics and Space Administration) and industry organizations published the Concept of Operations for Urban Air Mobility to describe the envisioned operational environment that supports the expected growth of flight operations in urban areas. · The United Nations projects that by 2050, 68 percent of the world’s population will live in urban areas, up from 55 percent today, resulting in increased traffic congestion, stress and air pollution. · Airlines for America (A4A), the industry trade organization representing the leading U.S. airlines, has committed to the recommendations of the International Civil Aviation Organization (ICAO), the United Nations body that sets standards and recommended practices for international aviation, including carbon-neutral growth from 2020 with an aspirational goal of a 50 percent reduction in CO2 by 2050 relative to 2005 levels. · The Advisory Council for Aeronautics Research in Europe has set goals of a 75 percent reduction in CO2 emissions per passenger and a 65 percent reduction in perceived noise emissions by 2050.

10 Table of Contents

The Research Park at Florida Atlantic University

In August 2019, Xeriant was approved by the Florida Atlantic Research and Development Authority to become a member and tenant of the Research Park at Florida Atlantic University (FAU) in Boca Raton, Florida, which is part of the university and adjacent to the Boca Raton Airport. FAU is one of the top engineering schools in the state, and part of the National Science Foundation’s Industry/University Cooperative Research Center Program called the Center for Advanced Knowledge Enablement (CAKE). The 70-acre Research Park, home to many technology companies and research-based organizations, is the site of Xeriant’s main office. FAU recently opened a center for Artificial Intelligence and Connected Assured Autonomy through their College of Engineering and Computer Science, which is applicable to advanced aircraft systems. The Company is engaging with FAU’s academic team, both faculty and students, to assist in screening and validating various technologies and to work together in a series of joint research initiatives. The relationship with FAU gives Xeriant credibility, since few companies are selected for membership in its research park and may provide access to grant programs and financing opportunities. Universities continue to be an indispensable source for novel discoveries in science and technology, with an impressive history of innovations that changed the world. Research parks have become the intermediaries between these academic institutions and industry, a hybrid of two diverse cultures that foster a dynamic innovation ecosystem of technology transfer, economic development and the generation of skilled labor. Faculty members often play a direct role in furthering the commercialization of technologies by launching new companies.

Intellectual Property

Xeriant owns a 64% interest in its subsidiary, American Aviation Technologies, LLC (“AAT”)., ~~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. WeWith ~~received~~respect ato ~~Notice of Allowance from~~ the ~~U.S.~~first ~~Patent~~ and ~~Trademark~~subsequent ~~Office~~utility ~~dated June 10, 2019, on the major claims in the~~ patent application, ~~which~~filings ~~indicated~~we ~~the~~have ~~agency’s~~received ~~intent~~the tofollowing ~~issue a patent~~U.S. ~~AAT~~Patents, ~~received~~namely, anU.S. ~~additional~~Patent ~~Notice~~No. of10,450,063 ~~Allowance~~issued ~~dated~~on ~~June~~October 22, ~~2020,~~2019; ~~covering~~U.S. ~~additional~~Patent ~~Halo claims~~No. ~~AAT~~10,814,974 ~~received~~issued ~~patent US 2020/0062385 A1~~ on ~~February~~October 27, 2020,; and ~~patent~~U.S. USPatent 10No. 11,~~814~~597,~~974~~512 B2issued on ~~October~~March 277, ~~2020~~2023.

Xeriant has filed trademark applications with the U.S. Patent and Trademark office with for the following marks, ~~including~~currently ~~names, logos and slogans~~pending: Xeriant name, ~~Xeriant logo,~~ “Innovation Soaring,” “Evolution in Flight,” “~~Evolution of Flight~~NEXBOARD™,” “~~NexBoard,” “~~BlueGreen,” and “~~Durever~~DUREVER™.”

Market Opportunity

~~Xeriant~~The ~~has~~Company ~~identified~~focuses ~~emerging~~on ~~areas~~disruptive ofand ~~technology~~transformative technologies with broad applications across high value industries, identifying those with exceptional market opportunity, which iscan be the basis for potential acquisitions, strategic partnerships or licensing arrangements. ~~We have identified early~~Early-stage technology companies, as well as established companies that have ~~been confined to a limited geographical area, have~~ developed breakthrough, high-market-potential technologies, ~~and~~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 ~~are~~may be already generating revenue while others have a clear path to revenue., ~~Many~~while ~~are~~others ~~acquisition targets or~~ 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, weXeriant can provide 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. WeThe ~~believe~~Company believes that entrepreneurial spirit, passion, and vision are critical to success, and ~~we believe~~ that weit can provide entrepreneurial teams with strategic guidance to execute their business plan, access to financial markets, and investor liquidity.

Table of Contents

Advanced Materials

A few years ago, Xeriant 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 patent-pending composite construction panel, called NEXBOARD™, made from plastic and fiber waste, and a proprietary flame retardant to replace products such as drywall, plywood, OSB, MDF, MgO board and other materials used in construction. Xeriant’s advanced materials line will be marketed under the DUREVER brand. This innovation has generated strong interest from key players in the real estate development and construction industries as well as building materials 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. The total addressable market for green construction materials, according to Fortune Business Insights, is projected to hit $1.2 trillion by 2032. Xeriant’s composite and flame-retardant compositions have applications in a multitude of industries, including steel, transportation, furniture and cabinetry, so there will be ongoing opportunities for revenue growth.

Aerospace

In 2019, the Company identified Advanced Air Mobility (“AAM”) as a disruptive market segment with high growth potential. The AAM category refers to the next generation of aircraft designed to create more-convenient, eco-friendly on-demand flight, using new technologies including advanced materials and electric power. In our early stage, we developed and patented a prototype VTOL (vertical takeoff and landing) aircraft with unique capabilities, targeted for commercial drone applications. Subsequently, in May 2021, Xeriant identified XTI Aircraft Company (“XTI”), which was developing a revolutionary VTOL aircraft with the convenience of a helicopter and the speed and range of a business jet. The aircraft’s unique design elements along with the $1 billion in pre-orders and reservations, enticed Xeriant to establish a 50/50 joint venture with XTI and invest $5.5 million to complete the preliminary design review of the TriFan 600 VTOL aircraft. According to recent press releases, there are approximately 700 presales or reservations for the TriFan 600 representing approximately $7 billion in potential future revenue for XTI. Upon dissolution of the joint venture back in May 2023, Xeriant was entitled to receive a direct interest in XTI aircraft. The Company is in litigation with XTI to enforce its rights and realize shareholder value from its investment. Further descriptions of the legal proceedings are found throughout this report.

Xeriant continues to be dedicated to the successful development and commercialization of next-generation technologies with applications in the aerospace industry. Advancements in science and engineering across a broad spectrum of disciplines are reshaping the future of air and space travel, enhancing capabilities, safety, efficiency and performance, while providing solutions to environmental concerns. The innovations in advanced materials, AI, sensors, communications, and energy technology can have a positive impact on our daily lives.

These breakthroughs are also making possible revolutionary aircraft concepts, manufacturing processes and propulsion systems, creating new business opportunities throughout the transportation ecosystem. Anticipated to become a reality in the near future, urban air mobility using electrically powered VTOL-capable aircraft or air taxis, is made possible through the convergence of numerous technological innovations. The push for electrically powered flight, known as the "third wave of aeronautics," has produced a flurry of aerospace research activity, including a comprehensive reexamination of the aircraft development process aimed at design optimization. Multidisciplinary design optimization in aircraft development requires the analysis and integration of all relevant technologies related to aerodynamics, structure, flight controls and propulsion systems. The Company is continually striving to recognize technology trends at an early stage, discover new and disruptive innovations and identify synergistic opportunities.

Table of Contents

Over the past couple of years, the Company has been involved with developing and commercializing ecofriendly building products made with a proprietary flame retardant and recycled materials, now branded Durever™, and NexBoardTM as a replacement for drywall and other building products. This innovation has generated strong interest from key players in the real estate development and construction industry and building materials retailers in the U.S., who 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. The global green construction materials market, estimated at USD 318 billion in 2021, is projected to reach $575 Billion by 2027, based on a report by Emergen Research. The global market for green building materials is forecasted to reach $951 billion by 2030 according to a report by Fortune Business Insights.

According to Grand View Research, the global building materials market related to gypsum wallboards, plywood, OSB, flooring and siding was valued at USD 838.1 billion in 2021 and is forecasted to reach USD 1,092.4 billion by 2025. The green building materials market was valued at USD 256.5 billion in 2021 and is projected at USD 350.3 billion in 2025, based on a study by Allied Market Research.

On May 31, 2021, the Company entered into a 50-50 joint venture with XTI Aircraft Company to complete the preliminary design phase in the development of the TriFan 600, a hybrid-electric fixed-wing VTOL aircraft that uses three ducted fans for vertical lift. The TriFan 600 would be the fastest and longest-range VTOL aircraft in the world, and the first commercial fixed-wing VTOL airplane. The TriFan 600 has a maximum cruise speed of 345 mph and a range of over 850 miles with conventional takeoff and landing, and 700 miles when taking off and landing vertically, which is far superior to other leading eVTOL aircraft in development. In comparison, Lilium Jet, Joby Aviation’s S4, and the Archer Maker have published maximum cruise speeds of 175 mph, 200 mph, and 200 mph respectively, with ranges of 150 miles, 150 miles, and 60 miles respectfully. The TriFan 600 can be configured with the standard six seats (5 passengers + pilot), nine seats for air taxi routes (8 passengers + pilot), or as an emergency medical aircraft. As a scalable platform, there is also a cargo variant called the TriFan 200 and a 12-15 seat model. XTI’s management team includes the former top executives of Aereon Supersonic, Gulfstream, Citation, Skunk Works, Textron, Cessna Aircraft, and AVX Aircraft who, combined, have developed and certified more than 40 new aircraft designs over their careers. There are approximately 700 presales or reservations for the TriFan 600 representing approximately $7 billion in potential future revenue. Upon dissolution of the joint venture, Xeriant will receive a direct interest in XTI aircraft.

Under a Letter Agreement executed on May 17, 2022, between Xeriant and XTI, in conjunction with their joint venture, Xeriant would receive additional compensation for its introduction of XTI to Inpixon, a Nasdaq-listed company, if a combination or any other transaction occurs between the parties. On July 25, 2023, it was announced through an 8-K filed by Inpixon, that an Agreement of Plan and Merger had been executed between XTI and Inpixon. Due to the disclosures in the XTI and Inpixon filings, we believe Xeriant is entitled to the compensation provided in its Letter Agreement with XTI. As of the date of this filing, we remain engaged in dialogue with XTI to enforce compliance with the Letter Agreement and to find an amicable resolution, although no assurance can be given that such a resolution will be achieved.

A cross-section of Morgan Stanley Research’s equity analysts last year detailed how investment in autonomous flying aircraft is accelerating. The BluePaper described implications for the future of passenger travel, military and defense applications, and freight and package transportation, and projected a total addressable market of $1.5 trillion for autonomous aircraft by 2040.

Xeriant focuses on disruptive technology with broad applications across high value industries. Categories include a broad range of disciplines impacting areas such as advanced materials, AI, sensors, communications, navigation and defense. Target companies and technologies should have significant upside potential, unique I/P, roll up or combination potential, have a quality team in place to execute their business plan, and need funding for execution or growth.

12 Table of Contents

Development Strategy

Xeriant is dedicated to the acquisition, development and commercialization of ~~transformative~~disruptive ~~aerospace~~and transformative technologies, including eco-friendly ~~specialty~~advanced materials which can be successfully deployed and integrated across multiple industry sectors, and ~~disruptive~~ innovations related to the emerging aviation market called Advanced Air Mobility (“AAM”), which include next-generation aircraft. We seek to partner with and acquire strategic interests in visionary companies that accelerate this mission.

The Company is planning to commercialize a slate of ~~ecofriendly~~green building products under the ~~Durever~~DUREVER™ brand. After completing product development with a proven production system, ~~mainly~~initially planned through a contract manufacturing arrangement and then setting up its own manufacturing plant, Xeriant will seek licensing arrangements with major industry leaders, which would allow for more rapid access to the market with reduced capital requirements and financial risk. ~~Our~~The Company’s flagship product is a multi-purpose, high-strength fire- and water-resistant composite panel made from a formulation of a proprietary flame retardant and a ~~cellulose~~ fiber-reinforced polymeric resin, called ~~NexBoardTM~~NEXBOARDTM, which will be sourced from recycled materials. Implementation of the Company’s business plan depends on certification of the final product and the availability of capital.

The Company is currently ~~investigating~~working with a contract manufacturer for near-term production and is also determining the requirements to buildout manufacturing facilities in the ~~United~~U.S. ~~States and Eastern Europe~~ to meet the projected demand for its composite wallboards. WePotential ~~have identified potential~~ sites, ~~located~~ and ~~priced~~much of the specialized manufacturing equipment, ~~started~~has tobeen ~~formulate~~identified ~~timetables,~~ and ~~hired~~priced aout. A ~~managing~~renowned ~~director~~global executive with decades of experience has expressed strong interest in taking the lead role to oversee the advanced materials division. ~~Our~~ The Company’s success will be dependent on ~~available~~the availability and cost of ~~capital~~feedstock, including recycled materials and ~~feedstock~~flame-retardant chemicals, as well as access to capital.

Xeriant maintains ~~its~~a strong interest in ~~AAM~~aerospace ~~through~~technologies, ~~its~~including ~~investment~~AAM, inand ~~the~~is ~~XTI~~currently ~~joint~~exploring ~~venture~~relationships aswith itseveral ~~believes~~aerospace ~~the~~companies ~~market~~that ~~segment~~either ~~and~~have ~~its~~aircraft ~~related~~platforms ~~technological~~or ~~advancements~~are ~~will~~working ~~lead~~ to asolve ~~more~~issues ~~sustainable~~related ~~future.~~to ~~The~~lightweighting, ~~Company~~hypersonics, ~~was~~additive ~~involved~~manufacturing, inminiaturization, ~~the~~AI, ~~successful~~safety, ~~completion~~autonomy, ofwireless ~~the~~connectivity, ~~preliminary~~electric ~~design~~propulsion, ofbatteries, ~~their~~hydrogen, ~~TriFan~~navigation ~~600~~systems, ~~eVTOL~~computer ~~aircraft.~~processing, ~~The~~camera ~~TriFan 600 is being designed to become the fastest~~systems, ~~longest-range~~stabilization ~~VTOL aircraft in the world and the first commercial fixed-wing VTOL airplane~~equipment, ~~with~~imaging ~~current~~sensors ~~pre-orders~~ and ~~reservations~~analytics ~~of approximately $7 billion in gross revenues upon delivery of those aircraft~~software. ~~Morgan~~Xeriant ~~Stanley~~ is ~~forecasting~~pursuing astrategic $1alliances ~~trillion~~with ~~total~~companies ~~addressable~~that ~~global~~provide ~~market~~complementary ~~for eVTOL~~ aircraft platforms and ~~AAM by 2040~~technologies, ~~which~~and isaccess ~~projected~~ to ~~reach~~new ~~$9 trillion by 2050~~markets.

~~Xeriant~~Morgan Stanley is ~~currently~~forecasting ~~exploring~~a ~~relationships~~$1 ~~with~~trillion ~~several~~total ~~aerospace~~addressable ~~companies~~global ~~that~~market ~~have~~for eVTOL aircraft ~~platforms,~~and orAAM ~~are~~by ~~working to solve issues related to lightweighting~~2040, ~~hypersonics,~~which additive manufacturing, miniaturization, AI, safety, autonomy, wireless connectivity, electric propulsion, batteries, hydrogen, navigation systems, computer processing, camera systems, stabilization equipment, imaging sensors and analytics software. Xeriant is ~~pursuing~~projected ~~strategic~~to ~~alliances~~reach ~~with~~$9 ~~companies~~trillion ~~that~~by ~~provide complementary aircraft platforms and technologies and access to new markets~~2050.

1312 Table of Contents

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 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~~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 ~~build~~set up manufacturing facilities to produce ~~NexBoardTM~~NEXBOARDTM products, we would lose the ability to deliver ~~NexBoard~~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 ishas inSenior ~~active~~Secured ~~negotiations~~Promissory Note with Auctus Fund, LLC, ~~to extend the maturity date of the Senior Secured Promissory Note~~(“Auctus”), which became due and payable on March 15, 2023. On June 1, 2023, the SEC filed a complaint against Auctus claiming that the company was operating as an unlicensed broker-dealer and the loans could result in cancellation. At this time, there is no assurance that the SEC will be successful in its effort, or the Company will work out a favorable extension of this note. One of the related obligations of the Company is to uplist to a major exchange. If we do not perform under the Note, and 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.

OnAt ~~May~~this 17time, ~~2022,~~there ~~the~~is ~~Company~~no ~~entered~~assurance ~~into~~that athe ~~Letter~~SEC ~~Agreement~~will ~~with~~be ~~XTI~~successful ~~whereby~~in ~~Xeriant~~its ~~would receive compensation for introducing Inpixon~~effort, aor ~~Nasdaq-listed~~the ~~company,~~Company towill ~~XTI~~work ~~for~~out a ~~combination~~favorable orextension ~~any~~of ~~other~~this ~~transaction~~note. ~~Should~~ aOne ~~combination~~of orthe ~~any~~related ~~other~~obligations ~~transaction~~of ~~occur,~~ the ~~compensation~~Company ~~due~~is to ~~Xeriant~~uplist ~~would~~to ~~include~~ a ~~six~~major ~~percent~~exchange. If ~~(6%)~~we ~~fully~~do ~~diluted~~not ~~interest~~perform ~~in XTI upon dissolution of its Joint Venture with Xeriant, and XTI would assume Xeriant’s obligations~~ under ~~its~~the ~~Senior Secured~~ Note ~~with Auctus Fund~~, ~~LLC. On July 25, 2023, Inpixon filed an 8-K announcing that they had signed an Agreement of Plan~~ and ~~Merger~~Auctus ~~with~~elects ~~XTI. On October 6, 2023, Inpixon filed an S4/A for the business combination with XTI. Due~~ to ~~the~~enforce ~~disclosures in~~ the ~~XTI and Inpixon filings~~Note, we ~~believe~~may ~~Xeriant~~lose isall ~~entitled~~or tosubstantially ~~the~~all ~~compensation~~of ~~provided~~our ~~in its Letter Agreement with XTI~~assets. As ofIf ~~the~~Auctus ~~date~~elects ~~of this filing, we remain engaged in dialogue with XTI~~ to ~~enforce~~convert ~~compliance with~~ the ~~Letter~~note ~~Agreement~~into ~~and~~shares toof ~~find~~our anCommon ~~amicable resolution~~Stock, ~~although~~our noshareholders ~~assurance~~could ~~can~~experience besubstantial ~~given that such a resolution will be achieved~~dilution.

Table of Contents

In an effort to resolve the Auctus obligation, on May 17, 2022, the Company entered into a Letter Agreement with XTI Aircraft Company (“XTI”) whereby Xeriant would receive compensation for introducing Inpixon, a Nasdaq-listed company, to XTI for a combination or any other transaction. Should a combination or any other transaction occur, the compensation due to Xeriant would include XTI assuming Xeriant’s obligations under its Senior Secured Note with Auctus and Xeriant would receive a six percent (6%) fully diluted interest in XTI upon dissolution of its Joint Venture with Xeriant. On July 25, 2023, Inpixon filed an 8-K announcing that they had signed an Agreement of Plan and Merger with XTI. On October 6, 2023, Inpixon filed an S4/A for the business combination with XTI. On March 12, 2024, XTI merged with Inpixon, the Nasdaq-listed company introduced to XTI by Xeriant, arranged through Xeriant’s investment banker at that time, Maxim Group, LLC.

On June 1, 2023, the U.S. Securities and Exchange Commission (“SEC”) filed a complaint in the U.S, District Court in Massachusetts (Case no. 1:23-cv-11233) against Auctus Fund Management, LLC, and its principals, Louis Posner and Alfred Sollami, predicated on their alleged failure to duly register as securities dealers in compliance with SEC regulations.

The SEC complaint charges Auctus Management, Mr. Sollami, and Mr. Posner with breaches of Sections 15(a)(1) and 20(b) of the Securities Exchange Act of 1934. Pursuant to these charges, the SEC is actively seeking the imposition of permanent injunctions, disgorgement of any unauthorized proceeds coupled with the associated prejudgment interest, civil pecuniary sanctions, proscriptions related to penny stock dealings, and other forms of just and equitable relief. Additionally, the SEC complaint incorporates Auctus Fund as a relief defendant and thereby endeavors to secure disgorgement from Auctus Fund, of ill-gotten gains from the activities of Auctus Management, Mr. Sollami, and Mr. Posner.

Based primarily on the SEC case, 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. 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. 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.

The Company’s counsel believes that the Auctus obligation will be resolved in either the pending SEC or appellate cases, although there is no certainty of an outcome favorable to the Company.

Table of Contents

On June 1, 2023, the U.S. Securities and Exchange Commission (hereinafter referred to as the "SEC") filed a complaint against Auctus Fund Management, LLC and its principals, Louis Posner and Alfred Sollami, predicated on their alleged failure to duly register as securities dealers in compliance with SEC regulations.

The SEC complaint imputes Auctus Management, Mr. Sollami, and Mr. Posner with breaches of Sections 15(a)(1) and 20(b) of the Securities Exchange Act of 1934. Pursuant to these charges, the SEC is actively seeking the imposition of permanent injunctions, disgorgement of any unauthorized proceeds coupled with the associated prejudgment interest, civil pecuniary sanctions, proscriptions related to penny stock dealings, and other forms of just and equitable relief. Additionally, the SEC complaint incorporates Auctus Fund as a relief defendant and thereby endeavors to secure disgorgement from Auctus Fund, of ill-gotten gains from the activities of Auctus Management, Mr. Sollami, and Mr. Posner.

From page three of the complaint, “The Commission requests that this Court enjoin Defendants from committing further violations of the federal securities laws as alleged in this Complaint, and order the Defendants along with Relief Defendant Auctus Fund to disgorge ill-gotten gains along with prejudgment interest thereon, order the Defendants to pay monetary penalties based upon these violations, order penny stock bars as to the Defendants, and order the surrender and cancellation of any securities (including convertible notes, warrants, and shares) obtained by Auctus in connection with its convertible notes business between 2012 and 2021, which are still held by Auctus.”

Given that Auctus issued a Senior Secured Promissory Note to Xeriant on October 27, 2021, we believe the SEC's order to surrender and cancel any securities obtained by Auctus in connection with its convertible notes business between 2012 and 2021 (including convertible notes, warrants, and shares), may result in the extinguishment of the Xeriant Senior Secured Promissory Note. However, since the SEC’s proceedings are in process and our Company remains in technical default with respect to the maturity of the Senior Secured Promissory Note as of June 30, 2023, we are actively engaged in negotiations to arrive at a potential settlement agreement with Auctus. There is no assurance that the Company will be successful in these efforts.

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.

Table of Contents

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 ~~specialized~~developing ~~industrial~~effective eco-friendly flame retardants for use in the production of our ~~Durever~~DUREVER™ and ~~NexBoard~~NEXBOARD™ products.

A significant part of our projected operations is expected to come from the sale of ~~Durever~~DUREVER™ and ~~NexBoard~~NEXBOARD™ products primarily made from recycled materials that use our proprietary eco-friendly industrial flame retardants. We continue testing several different ~~eco~~flame-~~friendly~~retardant ~~flame~~formulas ~~retardants~~ to insure ~~availability~~effective performance in the required fire tests for the construction industry and ~~best~~other ~~performance~~applications.

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.

Table of Contents

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 are currently experiencing 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 ~~COVID-19~~pandemics or other significant public health conditions.

The COVID-19 pandemic negatively affected the U.S. and global economy over the past ~~two~~few years, 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 ~~COVID-19 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.

Many of the regulations involving Advanced Air Mobility (AAM), including VTOL (Vertical Takeoff and Landing) aircraft and Unmanned Aerial Vehicles (UAV) are still being established and may affect our investment in XTI Aircraft Company.

The USDOT, FAA (Federal Aviation Administration) and other agencies at the federal, state and local levels are beginning to address some of the numerous certification, regulatory and legal challenges associated with AAM, including VTOL aircraft, UAV and unmanned aerial systems (UAS). A comprehensive set of standards and enforcement procedures for these new transport systems will need to be developed. New aircraft and their operators must undergo rigorous testing and certification, which may require new or modified airworthiness certification standards. These aircraft will also need to comply with existing regulations or be the subject of new regulations to cover their activities. Current regulations govern operating BVLOS (beyond visual line of sight), passenger transport, operating over people and public streets, privacy, transporting commercial cargo across state lines and instrument-based flight. The integration of UAS and UAM into the National Airspace System and air traffic management is a critical factor, requiring a remote identification process for these aircraft. The FAA’s Unmanned Aircraft System Integration Pilot Program (IPP) will provide certification necessary to operate UAVs for certain applications. It is uncertain how new or changed laws and regulations will affect the introduction of new aerial platforms into the marketplace. The time and costs involved in obtaining these certifications and regulatory compliance may adversely impact the development process.

Table of Contents

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 a 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 ~~our~~ 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 five 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 assurances, 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 assurances 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.

Table of Contents

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 ~~its~~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 ~~its~~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 ~~its~~our proprietary rights is difficult and requires constant attention. We may be required to spend significant resources to monitor and police ~~its~~our intellectual property rights. We may not be able to detect infringement and may lose ~~its~~our competitive position in the market before itwe isare 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.

Table of Contents

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, and/or our joint ventures, also rely on trade secrets and proprietary know-how to develop and maintain our, or our joint venture’s, competitive position. Some of our current or former employees, consultants, scientific advisors, contractors, current or prospective corporate collaborators, may unintentionally or willfully disclose our confidential information to competitors or use our proprietary technology for their own benefits. Furthermore, enforcing a claim alleging the infringement of our trade secrets would be expensive and difficult to prove, making the outcome uncertain. Our competitors may also independently develop similar knowledge, methods, and know-how or gain access to our proprietary information through some other means.

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.

Table of Contents

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.

Table of Contents

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.

Table of Contents

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 the 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 assurances 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.

Table of Contents

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.

Table of Contents

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.

Table of Contents

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.

Table of Contents

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; and · the other factors described in the “Risk Factors” sections of our Form 10-K for the years ended June 30, 2023, 2022 and in our Quarterly Reports on Form 10-Q for the periods ended September 30, December 31, 2022 and March 31, 2023, and in subsequent filings, which are incorporated by reference into this registration statement.

Table of Contents

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.

Table of Contents

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 ~~the~~public ~~recent~~health ~~downturn related to the COVID-19 pandemic)~~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 to our existing stockholders, and new investors could gain rights superior to our existing stockholders.

We do not intend to pay cash dividends on our shares of common stock so any returns will be limited to the value of our shares.

We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Any return to stockholders will therefore be limited to the increase, if any, of our share price.

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.

Table of Contents

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 ~~757~~705,~~395~~895 shares of our Series A Preferred Stock outstanding as of June 30, ~~2023~~2024. 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 2,911 square feet of leased office space located in the Research Park at Florida Atlantic University, Innovation Centre 1, 3998 FAU Blvd., Suite 309 Boca Raton, FL 33431. The lease term ends during the Company’s fourth fiscal quarter in 2024.

Item 3. Legal Proceedings

On September 1, 2021, Xeriant ~~Inc.~~ brought a cause of action in the Southern District of Florida against a former shareholder for claims, including but not limited to, breach of contract, misrepresentation, and asserting claims to recoup monetary and in-kind distributions made to the shareholder by the Company. The defendant submitted an affirmative defense and counterclaim on October 29, 2021, which was subsequently dismissed.

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, and alleging fraudulent acts, breach of contract and misappropriation of intellectual property. 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 against XTI, along with other unnamed defendants, on February 29, 2024, and on March 13, 2024, XTI filed a partial Motion to Dismiss. On April 10, 2024, the Company filed a Memorandum of Law in Opposition to XTI’s Motion to Dismiss the Company’s Second Amended Complaint and is waiting for the court to rule on the matter.

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. 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.

There is no pending litigation against the Company and to our knowledge no litigation is contemplated or threatened. To our knowledge, none of our directors, officers, 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.

Table of Contents

PART II

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 inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.

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
Period	High Bid		Low Bid
July 1, 2022, through September 30, 2022	$	0.089	$	0.031
October 1, 2022, through December 31, 2022	$	0.053	$	0.024
January 1, 2023, through March 31, 2023	$	0.054	$	0.021
April 1, 2023, through June 30, 2023	$	0.031	$	0.017
Period	High Bid		Low Bid
July 1, 2021, through September 30, 2021	$	0.240	$	0.143
October 1, 2021, through December 31, 2021	$	0.171	$	0.061
January 1, 2022, through March 31, 2022	$	0.214	$	0.080
April 1, 2022, through June 30, 2022	$	0.119	$	0.065

Our Transfer Agent

The company recently changed stock transfer agents from Olde Monmouth Stock Transfer Company to ClearTrust, LLC, with offices at ~~200~~16540 ~~Memorial~~Pointe ~~Parkway~~Village Dr, ~~Atlantic~~Suite ~~Highlands~~210 Lutz, ~~New~~Florida ~~Jersey~~33558 ~~07716,~~for isshareholder ~~the~~and ~~transfer~~issuer ~~agent~~services ~~for~~related to our shares of common stock. 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, ~~2023~~2024, there were ~~194~~202 holders of record of our common stock.

Table of Contents

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. ~~Selected Financial Data~~Reserved.

Not applicable because we are a smaller reporting company.

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.

Table of Contents

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, ~~2023~~2024 and ~~2022~~2023. 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 advanced materials and technology related to next generation air and spacecraft, which can be successfully integrated and commercialized for deployment across multiple industrial sectors. WeThe ~~seek~~Company seeks to partner with and acquire strategic interests in visionary companies that accelerate this mission. Xeriant’s advanced materials line will be marketed under the DUREVER™ brand, and includes ~~NexBoard~~NEXBOARD™, an eco-friendly, patent-pending composite building panel made from plastic and ~~cardboard~~cellulose waste and a proprietary flame retardant, primarily designed to ~~replace~~be ~~products~~a replacement for traditional building materials such as drywall, plywood, OSB, MDF, MgO board and other materials used in construction.

Xeriant, Inc. is dedicated to the acquisition, development and commercialization of transformative aerospace technologies, including eco-friendly specialty materials which can be successfully deployed and integrated across multiple industry sectors, and disruptive innovations related to the emerging aviation market called Advanced Air Mobility, which include next-generation aircraft. We seek to partner with and acquire strategic interests in visionary companies that accelerate this mission. The Company is located at the Research Park at Florida Atlantic University in Boca Raton, Florida.

Joint Venture with XTI Aircraft

On May 31, 2021, wethe Company entered into a Joint Venture Agreement (the “Agreement”) with XTI Aircraft Company (“XTI”), a Delaware corporation, to form a joint venture with XTI (the “XTI JV”), named Eco-Aero, LLC, with the purpose of completing the preliminary design review (“PDR”) of XTI’s TriFan 600, a 5-passenger plus pilot, hybrid electric, ~~vertical takeoff, and landing (~~eVTOL) fixed wing aircraft. Under the Agreement, Xeriant iswould ~~contributing~~contribute capital, technology, and strategic business relationships, and XTI iscontributed ~~contributing~~ intellectual property licensing rights and know-how. XTI and the Company each ~~own~~owned 50 percent of the XTI JV, and itwould isbe managed by a management committee consisting of five members, three appointed by Xeriant and two by XTI. The ~~Agreement~~Company ~~was~~invested ~~effective~~approximately on$5.5 ~~June~~million 4,into ~~2021~~the joint venture after borrowing the funds from Auctus Fund LLC (“Auctus”) through a Senior Secured Promissory Note, ~~with~~through an ~~initial~~introduction ~~deposit~~from ofMaxim ~~USD1~~Group, ~~million~~LLC, ~~into~~ the ~~XTI~~Company’s JVinvestment banker at the time. ~~Our~~The ~~financial~~borrowed ~~commitment~~funds ~~was~~from upAuctus were intended to ~~USD10~~be ~~million,~~a ~~contributed~~bridge asloan ~~needed~~that towould ~~complete~~be ~~the~~resolved ~~preliminary~~through ~~design~~an ofIPO ~~the~~(Initial ~~aircraft. XTI~~Public ~~completed~~Offering) ~~Preliminary~~and ~~Design~~uplist ~~Review~~to ~~during~~Nasdaq ~~the~~in ~~first~~a ~~quarter~~merger ofwith ~~2022~~XTI, which did not occur because XTI refused to move forward with the merger. The PDR was completed during the ~~purpose~~first quarter of ~~the~~2022 ~~XTI~~according JVto XTI.

On May 17, 2022, weafter ~~executed~~failed merger negotiations, the Company entered into a confidential Letter Agreement with XTI whereby Xeriant would receive compensation for introducing Inpixon, a Nasdaq-listed company, to XTI for a combination or any other transaction. Should a combination or any other transaction occur, the ~~material~~compensation ~~terms~~due to Xeriant would include a six percent (6%) fully diluted interest in XTI upon dissolution of ~~which~~its ~~are~~Joint ~~briefly~~Venture ~~delineated~~with asXeriant, ~~follows:~~and XTI would assume Xeriant’s obligations under its Senior Secured Note with Auctus.

~~Xeriant~~The ~~would~~material beterms ~~entitled~~of tothe ~~compensation~~May ~~for~~17, ~~its~~2022 ~~role~~Letter inAgreement ~~introducing~~with XTI toare ~~Inpixon,~~briefly adelineated ~~Nasdaq-listed~~as ~~company, contingent upon the occurrence of any merger, combination, or transactional event between XTI and Inpixon.~~follows:

	·	Xeriant would be entitled to compensation for its role in introducing XTI to a Nasdaq-listed company, contingent upon the occurrence of a combination or any other transaction between XTI and the Nasdaq company, which has since been identified as Inpixon.

	·	Should a combination or any other transaction occur, XTI would assume the financial obligations related to the Senior Secured Promissory Note with Auctus Fund, LLC, including the $6.05 million principal balance of the note and warrant obligations. Additionally, Xeriant was to be granted a fully diluted equity interest amounting to 6% in XTI, issued immediately prior to any prospective combination with Inpixon.

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.

Table of Contents

~~XTI~~On ~~would~~July ~~assume~~25, ~~the~~2023, ~~financial~~Inpixon ~~obligations~~filed ~~related~~an to8-K ~~the~~announcing ~~Senior~~that ~~Secured~~they ~~Note~~had ~~with~~signed ~~Auctus~~an ~~Fund,~~Agreement ~~LLC,~~of ~~including~~Plan ~~the~~and ~~$6.05~~Merger ~~million~~with ~~principal~~XTI. Despite ~~balance~~the ofCompany’s ~~the~~pivotal ~~note~~role ~~and~~in ~~warrant~~facilitating ~~obligations.~~this ~~Additionally~~merger, ~~Xeriant~~as ~~was~~memorialized toin ~~be granted~~ a ~~fully~~formal ~~diluted~~agreement, ~~equity interest amounting to 6% in~~ XTI, ~~issued~~repeatedly ~~immediately~~publicly ~~prior~~disclaimed to any ~~prospective~~obligation ~~combination~~to ~~with~~compensate ~~Inpixon~~Xeriant.

On ~~June~~December 56, 2023, ~~after~~the ~~suspecting~~Company ~~that~~initiated legal proceedings against XTI in the ~~obligations~~Federal ~~under~~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, ~~were~~and ~~possibly~~alleging ~~being~~fraudulent ~~evaded~~acts, wedeceptive ~~transmitted~~maneuvers and intentional breaches, seeking a ~~formal~~range ~~demand~~of ~~letter~~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 ~~XTI~~address ~~requesting~~the ~~compliance~~alleged ~~with~~misconduct comprehensively and to protect the ~~provisions~~Company’s ~~outlined~~interests in the ~~Letter~~face ~~Agreement~~of XTI’s actions. The foregoing description of the legal action does not purport to be complete and is subject in ~~accordance~~its ~~with~~entirety ~~Section~~by 8the full text of the JVcomplaint, ~~Agreement~~a ~~with~~copy ~~XTI~~of which was filed in an 8-K on December 12, 2023, Exhibit 99.1.

On ~~July~~February 2529, ~~2023~~2024, ~~Inpixon publicly disclosed~~ the ~~execution~~Company offiled a ~~definitive~~Second ~~merger~~Amended ~~agreement~~Complaint ~~with~~against XTI ~~in the 8-K filing~~, ~~confirming~~along ~~our~~with ~~suspicions.~~other Weunnamed ~~learned in that filing that XTI was funded $300~~defendants,~~000~~ ~~by Inpixon~~ on ~~March~~February 1029, ~~2023~~2024, ~~followed~~and byon ~~additional~~March ~~fundings aggregating~~13, ~~at the time of Inpixon’s July 25~~2024, ~~2023, 8-k filing, to $525,000 under a $2,313,407 Senior Secured Promissory Note from Inpixon to fund~~ XTI. Wefiled ~~believe this transaction is covered under the Letter Agreement as~~ a ~~trigger~~partial ~~for~~Motion ~~compensation due~~ to ~~Xeriant as outlined above~~Dismiss.

WeOn ~~also~~March ~~found out that~~12, ~~as a condition of closing of the merger with Inpixon~~2024, XTI’s ~~obligations~~merged towith ~~Xeriant would need to be settled. The July 25, 2023,~~ Inpixon ~~8-K~~, ~~Exhibit~~a ~~2–1~~ Nasdaq-listed the Agreement of Plan and Merger, Section 8(g) – Conditions Precede–t - page 67 states “The Company [XTI], Parent and their respective successors, assigns and Affiliates shall have received an unconditional full release of claims from Xeriant and its Affiliates in form and substance acceptable to Parent and the Companycompany.”

~~The~~On ~~chronology~~April of10, ~~key~~2024, ~~meetings and events disclosed in~~ the ~~Inpixon~~Company ~~and~~filed ~~XTI~~a ~~S-4/A~~Memorandum ~~filing~~ of ~~October~~Law 6,in ~~2023,~~Opposition ~~discloses~~to ~~that discussions between Inpixon and~~ XTI’s ~~started~~Motion ~~May~~to ~~18,~~Dismiss ~~2022, one day after~~ the ~~Letter~~Company’s ~~Agreement~~Second ~~was~~Amended ~~executed~~Complaint ~~between Xeriant~~ and ~~XTI. That~~is ~~meeting~~waiting ~~included~~for ~~Mr.~~the ~~Ali,~~court ~~CEO~~to ofrule ~~Inpixon,~~on ~~and~~the Mrmatter. ~~LaBelle, CEO of XTI.~~

~~Due~~The toforegoing descriptions of the ~~disclosures~~legal inactions ~~the~~do ~~XTI~~not ~~and~~purport ~~Inpixon~~to ~~filings,~~be wecomplete ~~believe~~and ~~Xeriant~~are issubject ~~entitled~~in totheir ~~the~~entirety ~~compensation~~by ~~provided~~the infull ~~its~~text ~~Letter~~of ~~Agreement~~the ~~with~~court ~~XTI~~filings.

In Inpixon’s July 25, 2023, 8-K, Exhibit 99.5 – Unaudited financial statements of XTI Aircraft Company as of and for the three months ended March 31, 2023, note 8, page 19, XTI states that it “believes it has no obligation to Xeriant under the May 17, 2022 letter agreement and intends to vigorously defend any litigation filed.”

Under the XTI JV Operating Agreement, under Management Committee, section 5.1I requires approval of all of the members of the Management Committee for determination of a Liquidity Event, Acceleration Event or Completion Event as defined in the JV Agreement. This approval has not been obtained by XTI. In addition, section 10.3 specifies the procedures regarding liquidation of the XTI JV, which are to be directed unanimously by the Management Committee. Section 11.3, under Equitable Remedies, the breach of any obligations by one of the parties shall “be entitled to equitable relief, including a temporary restraining order, and injunction, specific performance and any other relief that may be available from a court of competent jurisdiction (without and requirement to post bond).”

The Joint Venture Agreement, under section–8 - Dispute Resolution outlines the procedures to follow in the event of dispute between the parties. Xeriant has followed sections 8.1 and 8.2 regarding notice given and attempts to resolve the dispute between executive management. Non-binding mediation is the next step provided in the JV Agreement, followed by arbitration. These procedures need to be followed by Xeriant and XTI.

Section 10 of the JV Agreement, under Assignability of a Party’s Interest, states that “no party shall, without the prior written consent of the majority of the members of the Management Committee including at least one member from each Party (which consent may be withheld for any reason) sell, transfer, assign, hypothecate or make a gift of all or any portion of such Party’s interest in the JV.” Xeriant has not provided its consent through the Management Committee to XTI’s pending transfer of interest to Inpixon nor to any transfer of the intellectual property created in the XTI JV, including but not limited to the VTOL technology as defined in the JV Agreement. In the Security and Pledge Agreement between XTI and Inpixon, XTI pledged all of its assets to Inpixon in connection with its Senior Secured Note with Inpixon in violation of the XTI JV’s Operating Agreement and JV Agreement with Xeriant.

Due to the disclosures in the XTI and Inpixon filings, we believe Xeriant is entitled to the compensation provided in its Letter Agreement with XTI. XTI and Inpixon are disputing the fact that the Letter Agreement gives rise to compensation to the Company. As of the date of this filing, we remain engaged in dialogue with XTI to enforce compliance with the Letter Agreement and to find an amicable resolution, although no assurance can be given that such a resolution will be achieved.

Recent Developments

Joint Venture with Movychem

OnEffective April 2, 2022, the Company entered into a Joint Venture ~~Agreement~~ with Movychem s.r.o., a Slovakian limited liability company (“Movychem”), called Ebenberg, LLC, setting forth the terms for the establishment of a joint venture to develop and ~~commercialize~~exploit acertain ~~flame-retardant~~Movychem ~~called~~intellectual ~~Retacell®~~property that would be exploited by the joint venture. The ~~Joint~~JV ~~Venture~~was is organized as a Florida limited liability company ~~under~~and ~~the~~was ~~name Ebenberg, LLC,~~ owned 50% by each of the Company and Movychem. Essentially, the Company would contribute certain funding for its capital contribution and Movychem would provide an exclusive license and assignment of its intellectual property.

~~For~~The ~~its~~Company ~~capital~~analyzed ~~contribution~~the totransaction ~~the~~under ~~Joint~~ASC ~~Venture~~810, ~~pursuant~~Consolidation, to adetermine ~~Patent~~if ~~and~~the ~~Exclusive~~joint ~~License~~venture ~~and~~classifies ~~Assignment~~as ~~Agreement~~a ~~(the~~Variable ~~“Patent~~Interest ~~Agreement~~Entity (“VIE”),. ~~Movychem~~The ~~would transfer to the~~ Joint Venture ~~all~~qualifies ofas ~~its~~a ~~interest~~VIE tobased on the ~~know-how~~fact ~~and~~the ~~intellectual~~JV ~~property~~does ~~relating~~not tohave ~~Retacell~~sufficient ~~exclusive~~equity ofto ~~all~~operate ~~patents,~~without ~~and~~financial ~~the~~support ~~Company~~from ~~would~~both ~~contribute~~parties. ~~the~~According ~~amount~~to ofASC $2810-25-38,~~600,000~~ ~~payable (~~a) ~~$600,000~~reporting atentity ~~the~~shall ~~rate~~consolidate ofa ~~$25,000~~VIE ~~per~~when ~~month~~that ~~over~~reporting aentity ~~24-month~~has ~~period~~a ~~and~~variable interest (b)or ~~$2,000,000~~combination ~~within~~of ~~five~~variable (5interests) ~~business~~that ~~days~~provides ofthe areporting ~~closing~~entity ofwith a ~~financing~~controlling infinancial ~~which~~interest on the ~~Company~~basis ~~receives net proceeds~~ of atthe ~~least~~provisions ~~$3,000,000, but~~ in noparagraphs ~~event~~810-10-25-38A ~~later~~through ~~than~~25-38J. ~~six~~The ~~months~~reporting ~~from~~entity ~~the~~that ~~Effective~~consolidates ~~Date.~~a AtVIE ~~such~~is ~~time~~called as the ~~Company~~primary ~~makes~~beneficiary aof ~~$2,000,000~~that ~~payment~~VIE. ~~(and~~According ~~assuming~~to the ~~Company~~JV isoperating ~~current~~agreement, ~~with~~the ~~its~~ownership ~~then~~interests ~~monthly~~were ~~capital~~50/50 ~~contributions),~~and ~~pursuant to~~ the ~~Patent~~agreement ~~Agreement,~~provides ~~Movychem~~for ~~would~~a ~~transfer~~Management ~~all~~Committee of ~~its~~five ~~rights,~~members. ~~title~~Two ~~and~~of ~~interest~~the tofive ~~all~~members ofare ~~the~~from ~~patents~~Xeriant ~~related~~and toMovychem, ~~Retacell~~respectively ~~for~~and anone ~~amount~~is ~~equal~~appointed toby ~~aggregate~~mutual ~~cash~~agreement ~~contributions~~ of the ~~Company~~parties. Movychem is transferring to the Joint Venture ~~plus~~all ~~40%~~ of ~~all~~its ~~royalty~~interest ~~payments~~to ~~received~~certain byknow-how ~~the~~and ~~Joint~~intellectual ~~Venture~~property, ~~for~~and the ~~licensing~~Company ofis ~~Retacell~~contributing ~~products~~cash. ~~Pending~~As ~~assignment~~such, ofboth ~~the~~parties ~~patents~~do tonot ~~the~~have ~~Joint~~substantial ~~Venture,~~capital ~~pursuant~~at torisk. ~~the~~Based ~~Patent~~on ~~Agreement~~these two factors, ~~Movychem~~the ~~would~~conclusion ~~grant~~is tothat no one is the ~~Joint~~primary ~~Venture~~beneficiary anof ~~exclusive~~the ~~worldwide~~VIE. ~~license~~Accordingly, ~~under~~Xeriant has not consolidated the ~~patents~~VIE.

34After ~~Table~~funding the JV during the remainder of ~~Contents~~2022, the Company notified Movychem that in its determination it had not performed its obligations under the Joint Venture Agreement and discontinued payments until there was a resolution, which was followed by Movychem formally requested dissolution of the JV, which the parties agreed to and was effective June 30, 2023.

Under the Joint Venture Agreement, the Company had agreed to grant to certain individuals affiliated with Movychem five-year warrants (the “Warrants”) to purchase an aggregate of 170,000,000 shares of the Company’s common stock at an exercise price of $0.01 per share with vesting depending on the satisfaction of various milestones as described therein.

The Joint Venture Agreement granted to Movychem the right to dissolve the Joint Venture in the event that the Company fails to make any of its capital contributions in which case the Joint Venture will be required to grant back to Movychem all joint venture intellectual property and the assignment to Movychem of any outstanding licenses. After working with Movychem over the past year and experiencing a number of issues, including but not limited to Movychem’s unwillingness to provide material documentation, processes and information required for the exploitation of Retacell®, the Company has independently developed an upcycled construction panel, without the inclusion of Retacell®, outside of the Movychem JV. This approach will enable us to unlock existing demand indicated by several homebuilders and developers for industrial scale production of environmentally friendly construction panels in varying thicknesses and sizes, including standard 48” x 96” sheets.

The Company analyzed the transaction under ASC 810 Consolidation, to determine if the joint venture classifies as a Variable Interest Entity (“VIE”). The Joint Venture qualifies as a VIE based on the fact the JV does not have sufficient equity to operate without financial support from both parties. According to ASC 810-25-38, a reporting entity shall consolidate a VIE when that reporting entity has a variable interest (or combination of variable interests) that provides the reporting entity with a controlling financial interest on the basis of the provisions in paragraphs 810-10-25-38A through 25-38J. The reporting entity that consolidates a VIE is called the primary beneficiary of that VIE. According to the JV operating agreement, the ownership interests are 50/50 and the agreement provides for a Management Committee of five members. Two of the five members are from Xeriant and Movychem, respectively and one is appointed by mutual agreement of the parties. Movychem is transferring to the Joint Venture all of its interest to the know-how and intellectual property relating to Retacell exclusive of all patents, and the Company is contributing cash. As such, both parties do not have substantial capital at risk. Based on these two factors, the conclusion is that no one is the primary beneficiary of the VIE. Accordingly, Xeriant has not consolidated the VIE.

Because of Movychem’s non-performance as described above, Xeriant ceased paying Movychem $25,000 per month as required in the Joint Venture beginning December 2022. On February 13, 2023, Movychem formally requested dissolution of its Joint Venture with Xeriant, named Ebenberg, LLC. On February 24, 2023, Xeriant provided a formal response to Movychem highlighting its multiple and sustained lapses in collaborative efforts related to the commercialization of the Retacell technology. Subsequent to this communication, Xeriant expressly repudiated Movychem’s proposition for dissolution and their proposition to take an exclusive territory to market Retacell®. Because Xeriant is focused on the commercialization and industrial-level production of the eco-friendly composite construction panels, and has moved beyond the Retacell® technology, the Company agreed to dissolution of the Ebenberg, LLC Joint Venture effective June 30, 2023. As such, the accumulated “Investment in Ebenberg JV” as of June 30, 2023, of $156,460 was fully impaired as of that date and reported as “Loss on Impairment of Investment”.

As of June 30, 2023, the Company had paid $312,919 to the Joint Venture.

Table of Contents

Stock Sales

During the year ended June 30, ~~2023~~2024, the Company received $0 by selling shares of common stock.

Convertible Notes Issued

During the year ended June 30, ~~2023~~2024, the Company received $~~370~~2,030,000 from the issuance of convertible debt.

Litigation

On ~~September 1~~October 19, ~~2021~~2023, Xeriant ~~Inc.~~filed ~~brought~~ a ~~cause~~complaint ~~of action~~ in the United States Southern District of ~~Florida~~New ~~against~~York a(Case ~~former~~no.1:23-cv-09200) ~~shareholder~~against ~~for~~Auctus ~~claims~~Fund LLC, ~~including~~to ~~but~~invalidate ~~not~~allegedly ~~limited~~illegally todesigned contractual agreements, ~~breach~~including contesting the enforceability of ~~contract,~~the ~~misrepresentation,~~related note and ~~asserting~~amendments, ~~claims~~and to ~~recoup~~set ~~monetary~~aside improper and unlawful securities transactions effectuated in~~-kind~~ ~~distributions~~violation ~~made~~of toSection 15(a)(1) of the ~~shareholder~~Exchange Act (15 U.S.C. § 78o(a)(1)) by the ~~Company~~Defendant, alleging breaches of fiduciary duty and related claims. On February 9, 2024, the case was dismissed. The ~~defendant~~Company ~~submitted~~filed ana ~~affirmative~~Notice ~~defense~~of ~~and~~Civil ~~counterclaim~~Appeal on ~~October~~March 2913, ~~2021~~2024, primarily based on public welfare because of the pending litigation between the SEC and Auctus Fund Management, LLC, which complaint was ~~subsequently~~filed ~~dismissed~~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. 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.

Table of Contents

Fiscal Year ~~2023~~2024 Results of Operations Compared with Fiscal Year ~~2022~~2023

	For the years ended
	June 30, 2023			June 30, 2022			$
	June 30, 2024			June 30, 2023			$
Operating expenses:
Consulting and advisory fees	$	1731,~~101,573~~128		$	31,~~031~~147,~~959~~398		$	(1416,~~930,386~~270	)
Related party consulting fees		~~353~~388,000			~~432~~353,~~425~~000			~~(79~~35,~~425~~000	)
General and administrative expenses		~~302~~282,~~693~~249			1280,~~184,654~~216			~~(881~~2,~~961~~033	)
Professional fees		~~271~~308,~~021~~109			~~444~~271,~~012~~021			~~(172~~37,~~991~~088	)
Advertising and marketing expense		23,348			651,567			(628,219	)
Research and development expense		196,422			-			196,422
Research and development expense		-			5,267,581			(5,267,581	)
Total operating expenses		1,905,908			2,051,635			(145,727	)
Total operating expenses		2,051,635			11,012,198			(8,960,563	)
Operating loss		(1,905,908	)		(2,051,635	)		145,727
Operating loss		(2,051,635	)		(11,012,198	)		8,960,563
Other expenses:
Amortization of debt discount		(~~461~~19,~~842~~189	)		(4461,~~629,089~~842	)		4442,~~167,247~~653
Financing fees		-			(43,750	)		43,750
Interest expense		(1,183,885	)		(10,566	)		(1,173,319	)
Interest expense		(10,566	)		(138,944	)		128,378
Decrease (increase) in fair value of convertible bridge loans		(2,448	)		(57,368	)		54,920
Decrease (increase) in fair value of convertible bridge loans		(57,368	)		-			(57,368	)
Loss on impairment of investment		-			(156,460	)		156,460
Loss on impairment of investment		(156,460	)		-			(156,460	)
Loss from Ebenberg JV		-			(98,781	)		98,781
Loss from Ebenberg JV		(98,781	)		(57,678	)		(41,103	)
Gain on extinguishment of debt		28,627			-			28,627
Loss on extinguishment of debt		(420,~~259,987~~298	)		(~~536~~4,259,987	)		(4,~~259~~239,~~451~~689	)
Total other (expense)		(51,~~045~~197,~~004~~197	)		(45,~~869~~045,~~997~~004	)		~~(175~~3,~~007~~847,811	)
Net loss	$	(73,~~096~~103,~~639~~101	)	$	(157,~~882~~096,~~195~~639	)	$	83,~~785~~993,~~556~~538

Table of Contents

Consulting and advisory fees

Total consulting and advisory expenses were $1731,~~101,573~~128 and $31,~~031~~147,~~959~~398 for the years ended June 30, ~~2023~~2024 and ~~2022~~2023, respectively. In the prior period, there were increased expenses due to stock issuances for services.

Related Party Consulting Fees

Total related party consulting fees were $~~353~~388,000 and $~~432~~353,~~425~~000 for the years ended June 30, ~~2023~~2024 and ~~2022~~2023, respectively. The related party consulting fees for the year ended June 30, ~~2023~~2024, consisted of (i) $~~170~~207,~~000~~500 to Ancient Investments, LLC, a company owned by Keith Duffy, CEO and Scott Duffy, Executive Director of Operations, (ii) $5667,000 for AMP Web Services, LLC, a company owned by Pablo Lavigna, CIO, (iii) $~~102~~78,~~000~~500 to Edward DeFeudis, Director, and (iv) $2535,000 for Keystone Business Development Partners, LLC, a company owned by Brian Carey, CFO. The related party consulting fees for the year ended June 30, ~~2022~~2023, consisted of (i) $~~184~~170,000 to Ancient Investments, LLC, (ii) $8656,000 for AMP Web Services, LLC, (iii) $~~122~~102,000 to Edward DeFeudis, and (iv) $4025,~~425~~000 for Keystone Business Development Partners, LLC, .

General and administrative expenses

Total general and administrative expenses were $~~302~~282,~~693~~249 and $1280,~~184,654~~216 for the years ended June 30, ~~2023~~2024 and ~~2022~~2023, respectively. The increase was primarily related to increased travel expenses.

Professional Fees

Total professional fees were $~~271~~308,~~021~~109 and $~~444~~271,~~012~~021 for the years ended June 30, ~~2023~~2024 and ~~2022~~2023, respectively. The ~~prior~~current period increased amount was due toprimarily ~~legal fees relating~~ to increased JVaudit ~~activity~~fees.

Advertising and marketing expenses

Total advertising and marketing expenses were $23,348 and $651,567 for the years ended June 30, 2023, and 2022, respectively. During the year ended June 30, 2022, the Company’s advertising and marketing expenses were associated with social media marketing campaigns, events and press releases that were not continued in the fiscal year ended June 30, 2023.

Research and Development Expenses

Total research and development expenses were $0196,422 and $~~5,267,581~~0 for the years ended June 30, ~~2023~~2024, and ~~2022~~2023, respectively. The research and development expenses in the fiscal year ended June 30, ~~2022~~2024, were in connection with our ~~Eco-Aero,~~NEXBOARD™ ~~LLC~~development ~~joint~~operations ~~venture~~through ~~with~~BlueGreen ~~XTI~~Composites, ~~Aircraft~~LLC, ~~Company~~a ~~for~~consolidated ~~funding~~disregarded ~~the~~entity ~~preliminary design phase in the development~~ of ~~an aircraft, called~~ the ~~TriFan 600~~Company. ~~There were no expenses for the joint venture for the year ended June 30, 2023. Research & Development Expenses relating to Movychem/Ebenberg JV are accounted for through Ebenberg, LLC.~~

Other (Expenses)

Total other expenses consist of amortization of debt discount related to convertible notes, interest expense related to convertible notes, change in fair value of the convertible bridge loans, loss on impairment of investment, loss from Ebenberg JV and loss on extinguishment of debt. Total other expenses were $51,~~045~~197,~~004~~197 for the year ended June 30, ~~2023~~2024, compared to $45,~~869~~045,~~997~~004 for the year ended June 30, ~~2022~~2023. The ~~increase~~decrease was primarily due to recording the loss on extinguishment of debt for the year ended June 30, 2023, in the amount of $4,259,987.

Net loss

Total net loss was $73,~~096~~103,~~639~~101 for the year ended June 30, ~~2023~~2024, compared to $157,~~882~~096,~~195~~639 for the year ended June 30, ~~2022~~2023. The decrease was primarily related to ~~amortization~~loss on extinguishment of debt ~~discount~~ of $4,~~629~~259,~~089~~987 ~~and~~for ~~$5,267,581 of research and development expenses in~~ the ~~prior~~year ~~period~~ended ~~versus~~June ~~$0 of research and development expenses and $461~~30,~~842~~ ~~of amortization of debt discount in the current period~~2023. The difference was partially offset by ~~the~~an ~~loss~~increase ~~on extinguishment of debt~~ in ~~the~~interest ~~amount~~expense of $41,~~259~~183,~~987~~885 for the current period.

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, ~~2023~~2024 and ~~2022~~2023, the Company had $61653,~~625~~117 and $161,~~065,945~~625 in cash, respectfully, and $68,~~684~~661,~~867~~248 and $36,~~072~~684,~~483~~867 in negative working capital, respectively. On June 30, ~~2023~~2024, the principal balance of the Auctus Senior Secured Promissory Note was $5,850,000 including accrued liability of $50,000. The Note matured on March 15, 2023, and the ~~company~~Company has been in discussions with Auctus to resolve the liability. For the years ended June 30, ~~2023~~2024 and ~~2022~~2023, the Company had a net loss of $73,~~096~~103,~~639~~101 and $157,~~882~~096,~~195~~639, 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 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 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. The Company’s existence is dependent upon management’s ability to develop profitable operations and resolve its liquidity problems. The Company has been funded primarily through the issuance of convertible debt.

During the fiscal year ended June 30, ~~2023~~2024, our operating activities used $1,~~174~~430,~~190~~345 of net cash used compared to using $61,~~927~~174,~~249~~190 of net cash used in our operating activities during the fiscal year ended June 30, ~~2022~~2023. This difference primarily related to aan ~~decrease~~increase in stock-based compensation and ~~stock~~an ~~issued for services and amortization of debt discount and offset by~~ increase in ~~loss~~the onchange ~~extinguishment of debt~~ in ~~fiscal~~accounts ~~year 2023~~payable. During the fiscal year ended June 30, ~~2023~~2024, our investing activities used $~~200~~8,~~130~~163 of net cash compared to using $~~135~~200,~~346~~130 of net cash used in our investing activities during the fiscal year ended June 30, ~~2022~~2023. ~~This~~The ~~difference~~primary ~~related~~reason tofor anthe ~~increase~~difference inis ~~investment~~the $197,563 in ~~Movychem~~the JVprior ~~and~~period ~~offset~~related byto ~~decrease~~Investment in ~~purchase~~Movychem ~~of property and equipment in fiscal year 2023~~JV. During the fiscal year ended June 30, ~~2023~~2024, our financing activities added $~~370~~2,030,000 of net cash compared to adding $7370,~~166,~~000 of net cash in our financing activities during the fiscal year ended June 30, ~~2022~~2023. This difference related to a substantial ~~decrease~~increase in the issuance of convertible notes ~~and~~in nothe ~~sales~~current fiscal year. The Company continues to raise capital through the issuance of ~~stock~~convertible ornotes ~~cash~~and has received commitments from ~~exercise~~key ofinvestors ~~warrants~~that inadditional funds are available upon request. The Company maintains a fiscal ~~year~~policy ~~2023~~to limit the issuance of convertible notes to our current and projected funding needs. The Company is confident that funding through this process will be adequate to cover required operating and development expenditures until cash flow from operations is sufficient.

Table of Contents

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, ~~2023~~2024 and ~~2022~~2023 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.

Table of Contents

Item 8. Financial Statements and Supplementary Data

XERIANT, INC.

CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, ~~2023~~2024 and ~~2022~~2023

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm (PCAOB ID # 3289)		F-1
Report of Independent Registered Public Accounting Firm (PCAOB ID # 6920)		F-1
Consolidated Balance Sheets as of June 30, 2023 and 2022		F-3
Consolidated Balance Sheets as of June 30, 2024 and 2023		F-6
Consolidated Statements of Operations for the Years Ended June 30, 2023 and 2022		F-4
Consolidated Statements of Operations for the Years Ended June 30, 2024 and 2023		F-7
Consolidated Statements of Stockholder’s Deficit for the Years Ended June 30, 2023 and 2022		F-5
Consolidated Statements of Stockholders’ Deficit for the Years Ended June 30, 2024 and 2023		F-8
Consolidated Statements of Cash Flows for the Years Ended June 30, 2023 and 2022		F-6
Consolidated Statements of Cash Flows for the Years Ended June 30, 2024 and 2023		F-9
Notes to Consolidated Financial Statements		F-710

Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and ~~Stockholders of Xeriant, Inc.~~

Stockholders of Xeriant, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance ~~sheets~~sheet of Xeriant, Inc. (the Company) as of June 30, ~~2023 and 2022~~2024, and the related consolidated statements of operations, changes in stockholders’ deficit, and cash flows for ~~each of~~ the ~~years in the two-~~year ~~period~~ ended June 30, ~~2023~~2024, and the related notes and schedules (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, ~~2023 and 2022~~2024, and the results of its operations and its cash flows for ~~each of~~ the ~~years in the two-~~year ~~period~~ ended June 30, ~~2023~~2024, 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~~audit. 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~~audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the ~~audits~~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~~audit, 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~~audit 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~~audit 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~~audit ~~provide~~provides a reasonable basis for our opinion.

Critical Audit Matters

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

F-1

Table of Contents

Convertible Debentures

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

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

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

We obtained debt and warrant related agreements and performed the following procedures:

	-	Reviewed agreements for all relevant terms.

	-	Tested management’s identification and treatment of agreement terms.

	-	Recalculated management’s fair value based on the terms in the agreements.

	-	Assessed the terms and evaluated the appropriateness of management’s application of their accounting policies, along with their use of estimates, in the determination of the amortization of the debt discount.

We have served as the Company’s auditor since 2024.

Tampa, Florida

October 8, 2024

F-2

Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Xeriant, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Xeriant, Inc. (the Company) as of June 30, 2023, and the related consolidated statements of operations, changes in stockholders’ deficit, and cash flows for the year ended June 30, 2023, and the related notes and schedules (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, 2023, and the results of its operations and its cash flows for the year ended June 30, 2023, 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

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 audit. 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 audit 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 audit, 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 audit 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 audit provides a reasonable basis for our opinion.

Critical Audit Matters

F-3

Table of Contents

Derivatives

As described in Note 2 to the Company’s consolidated financial statements, ~~during the year ended June 30, 2022,~~ prior to the adoption of ASU 2020-06, when the Company issues debt that contains a conversion feature that provided for a rate of conversion that is below market value at issuance, this feature was characterized as a ~~3001 N. Rocky Point Dr. East, Suite 200 i Tampa, Florida 33607 i 813.367.3527~~ beneficial conversion feature and recorded as a debt discount pursuant to ASC 470-20, Debt with Conversion and Other Options. 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 debt modification 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.

F-1 Table of Contents

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

We obtained debt and warrant related agreements and performed the following procedures:

	-	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.

Stock-Based Compensation

As described in Note 2 to the Company’s consolidated financial statements, the Company measures the cost of employee services rendered 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.

We identified the Company’s application of equity incentive awards 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:

We obtained related agreements and performed the following procedures:

	-	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.

F-4

Table of Contents

Variable Interest Entities

As described in Note 3 to the Company’s consolidated financial statements, the Company analyzes investment transactions under ASC 810, Consolidation, to determine if the transaction classifies as a variable interest entity (VIE). According to ASC 810-25-38, a reporting entity shall consolidate a VIE when that reporting entity has a variable interest that provides the reporting entity with a controlling financial interest on the basis of the provisions in paragraphs 810-10-25-38A – 25-38J. The reporting entity that consolidates a VIE is called the primary beneficiary of that VIE.

We identified the Company’s accounting for its investments and determination of whether a VIE exists as a critical audit matter. The principal considerations for our determination of this critical audit matter related to the significant risks associated with the proper accounting for these transactions, as well as the nature and extent of audit effort required to address the matter.

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

	·	We obtained and reviewed all relevant agreements and documents associated with the joint ventures.

	·	We obtained management’s analysis on the accounting for the joint ventures and the determination of whether these were VIEs that should be consolidated and performed the following procedures:

	-	Reviewed the analysis.

	-	Tested supporting documentation related to management’s conclusion of whether the joint venture was a VIE that should be consolidated.

	-	Evaluated the appropriateness of management’s application of their accounting policies in the determination that any VIEs identified were properly consolidated.

We have served as the Company’s auditor since 2023.

Tampa, Florida

October 15, 2023

PCAOB ID# 3289

F-25 Table of Contents

XERIANT, INC. CONSOLIDATED BALANCE SHEETS

XERIANT, INC.
CONSOLIDATED BALANCE SHEETS

	As of			As of
	June 30, 2024			June 30, 2023

Assets
Current assets
Cash	$	653,117		$	61,625
Prepaids		2,931			4,529
Note receivable		8,163			-
Total current assets		664,211			66,154

Deposits		12,546			12,546
Property & equipment, net		3,995			5,507
Operating lease right-of-use asset, net		32,253			82,911
Total assets	$	713,005		$	167,118

Liabilities and stockholders' deficit
Current liabilities
Accounts payable and accrued liabilities	$	1,211,533		$	402,568
Accrued liabilities, related party		20,000			20,000
Shares to be issued		75,200			75,200
Convertible notes payable, net of discount - in default		5,850,000			5,850,000
Convertible notes payable, net of discount		2,132,529			100,000
Convertible bridge loans, at fair value		-			247,254
Lease liability, current		36,197			55,999
Total current liabilities		9,325,459			6,751,021

Lease liability, long-term		-			36,197
Total liabilities		9,325,459			6,787,218

Commitments and contingencies (Note 11)

Stockholders' deficit
Series A Preferred stock, $0.00001 par value; 100,000,000 authorized; 3,500,000 designated; 705,895 and 757,395 shares issued and outstanding at June 30, 2024 and 2023, respectively		7			8
Series B Preferred stock, $0.00001 par value; 100,000,000 authorized; 1,000,000 designated; 1,000,000 issued and outstanding		10			10
Common stock, $0.00001 par value; 5,000,000,000 shares authorized; 524,853,304 and 389,433,144 shares issued and outstanding at June 30, 2024 and 2023, respectively		5,248			3,894
Common stock to be issued		51,950			51,950
Additional paid in capital		20,899,187			19,789,793
Accumulated deficit		(26,708,915	)		(23,638,461	)
Total stockholders' deficit		(5,752,513	)		(3,792,806	)
Non-controlling interest		(2,859,941	)		(2,827,294	)
Total stockholders' deficit		(8,612,454	)		(6,620,100	)
Total liabilities and stockholders' deficit	$	713,005		$	167,118

	As of			As of
	June 30, 2023			June 30, 2022
Assets
Current assets
Cash	$	61,625		$	1,065,945
Prepaids		4,529			756
Total current assets		66,154			1,066,701
Deposits		12,546			12,546
Property & equipment, net		5,507			4,409
Operating lease right-of-use asset		82,911			128,342
Investment in JV with Ebenberg LLC		-			57,678
Total assets	$	167,118		$	1,269,676
Liabilities and stockholders' deficit
Current liabilities
Accounts payable and accrued liabilities	$	402,568		$	56,836
Accrued liabilities, related party		20,000			22,000
Shares to be issued		75,200			75,200
Convertible notes payable, net of discount - in default		5,850,000			3,936,185
Convertible notes payable, net of discount		100,000			-
Convertible bridge loans, at fair value		247,254			-
Lease liability, current		55,999			48,963
Total current liabilities		6,751,021			4,139,184
Lease liability, long-term		36,197			92,197
Total liabilities		6,787,218			4,231,381
Commitments and contingencies (Note 11)
Stockholders' deficit
Series A Preferred stock, $0.00001 par value; 100,000,000 authorized; 3,500,000 designated; 757,395 and 781,132 shares issued and outstanding at June 30, 2023 and 2022, respectively		8			8
Series B Preferred stock, $0.00001 par value; 100,000,000 authorized; 1,000,000 designated; 1,000,000 issued and outstanding		10			10
Common stock, $0.00001 par value; 5,000,000,000 shares authorized; 389,433,144 and 365,239,001 shares issued and outstanding at June 30, 2023 and 2022, respectively		3,894			3,652
Common stock to be issued		51,950			51,950
Additional paid in capital		19,789,793			16,351,791
Accumulated deficit		(23,638,461	)		(16,571,505	)
Total stockholder's deficit		(3,792,806	)		(164,094	)
Non-controlling interest		(2,827,294	)		(2,797,611	)
Total stockholders' deficit		(6,620,100	)		(2,961,705	)
Total liabilities and stockholders' deficit	$	167,118		$	1,269,676

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

F-36 Table of Contents

XERIANT, INC. CONSOLIDATED STATEMENTS OF OPERATIONS

XERIANT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS

	For the years ended
	June 30,
	2024			2023
Operating expenses:
Consulting and advisory fees	$	731,128		$	1,147,398
Related party consulting fees		388,000			353,000
General and administrative expenses		282,249			280,216
Professional fees		308,109			271,021
Research and development expense		196,422			-
Total operating expenses		1,905,908			2,051,635

Loss from operations		(1,905,908	)		(2,051,635	)

Other expenses:
Amortization of debt discount		(19,189	)		(461,842	)
Interest expense		(1,183,885	)		(10,566	)
Change in fair value of convertible bridge loans		(2,448	)		(57,368	)
Loss on impairment of investment		-			(156,460	)
Loss from Ebenberg JV		-			(98,781	)
Loss on extinguishment of debt		(20,298	)		(4,259,987	)
Gain on extinguishment of debt		28,627			-
Total other expense		(1,197,197	)		(5,045,004	)

Net loss		(3,103,101	)		(7,096,639	)

Less net loss attributable to noncontrolling interest		(32,647	)		(29,683	)

Net loss attributable to common stockholders	$	(3,070,454	)	$	(7,066,956	)

Net loss per common share - basic and diluted	$	(0.01	)	$	(0.02	)

Weighted average number of common shares outstanding - basic and diluted		443,262,234			339,759,839

	For the years ended
	June 30, 2023			June 30, 2022
Operating expenses:
Consulting and advisory fees	$	1,101,573		$	3,031,959
Related party consulting fees		353,000			432,425
General and administrative expenses		302,693			1,184,654
Professional fees		271,021			444,012
Advertising and marketing expense		23,348			651,567
Research and development expense		-			5,267,581
Total operating expenses		2,051,635			11,012,198
Loss from operations		(2,051,635	)		(11,012,198	)
Other expenses:
Amortization of debt discount		(461,842	)		(4,629,089	)
Financing fees		-			(43,750	)
Interest expense		(10,566	)		(138,944	)
Change in fair value of convertible bridge loans		(57,368	)		-
Loss on impairment of investment		(156,460	)		-
Loss from Ebenberg JV		(98,781	)		(57,678	)
Loss on extinguishment of debt		(4,259,987	)		(536	)
Total other expense		(5,045,004	)		(4,869,997	)
Net loss		(7,096,639	)		(15,882,195	)
Less net loss attributable to noncontrolling interest		(29,683	)		(2,580,925	)
Net income attributable to common stockholders	$	(7,066,956	)	$	(13,301,270	)
Net loss per common share - basic and diluted	$	(0.02	)	$	(0.04	)
Weighted average number of common shares outstanding - basic and diluted		375,098,691			345,160,167

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

F-47 Table of Contents

XERIANT, INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT FOR THE YEARS ENDED JUNE 30, ~~2023~~2024 AND ~~2022~~2023

	Series A Preferred Stock						Series B Preferred Stock				Common Stock				AdditionalPaid in			Common stockto be			Accumulated			Non-Controlling
	Shares			Amount			Shares		Amount		Shares		Amount		~~AdditionalPaid inCapital~~Capital			~~Common stockto be~~ issued			~~AccumulatedDeficit~~Deficit			~~Non-ControllingInterest~~Interest			Total
Balance June 30, 2021		788,270		$	8			1,000,000	$	10		293,815,960	$	2,938	$	4,138,181		$	51,090		$	(3,270,235	)	$	(216,686	)	$	705,306
Balance June 30, 2022		781,132		$	8			1,000,000	$	10		365,239,001	$	3,652	$	16,351,791		$	51,950		$	(16,571,505	)	$	(2,797,611	)	$	(2,961,705	)
Sale of common stock		-			-			-		-		39,366,666		394		2,166,057			(87,950	)		-			-			2,078,501
Shares issued as equity kicker		-			-			-		-		250,000		3		43,747			-			-			-			43,750
Exercise of warrants		-			-			-		-		4,308,600		43		128,507			-			-			-			128,550
Conversion of Series A Preferred to Common Stock		(7,138	)		-			-		-		7,138,000		71		(71	)		-			-			-			-
Conversion of convertible notes and accrued interest		-			-			-		-		14,828,224		148		429,761			(3,090	)		-			-			426,819
Inducement of conversion–- interest expense		-			-			-		-		845,936		8		134,921			-			-			-			134,929
Stock issued for services		-			-			-		-		4,685,615		47		670,007			91,900			-			-			761,954
Stock option compensation		-			-			-		-		-		-		3,248,181			-			-			-			3,248,181
Beneficial conversion feature associated with convertible debt		-			-			-		-		-		-		2,615,419			-			-			-			2,615,419
Warrants associated with convertible debt		-			-			-		-		-		-		2,777,081			-			-			-			2,777,081
Net loss		-			-			-		-		-		-		-			-			(13,301,270	)		(2,580,925	)		(15,882,195	)
Balance June 30, 2022		781,132			8			1,000,000		10		365,239,001		3,652		16,351,791			51,950			(16,571,505	)		(2,797,611	)		(2,961,705	)
Stock issued for services		-			-			-		-		457,143		5		47,995			-			-			-			48,000
Conversion of Series A Preferred to Common Stock		(23,737	)		-			-		-		23,737,000		237		(237	)		-						-			-
Warrants associated with convertible debt		-			-			-		-		-		-		2,688,128			-			-			-			2,688,128
Stock option compensation		-			-			-		-		-		-		702,116			-			-			-			702,116
Net Loss		-			-			-		-		-		-		-			-			(7,~~096~~066,956	)		(29,683	)		(7,096,639	)
Balance June 30, 2023		757,395		$	8			1,000,000	$	10		389,433,144	$	3,894	$	19,789,793		$	51,950		$	(23,638,461	)	$	(2,827,294	)	$	(6,620,100	)
Stock issued for services		-			-			-		-		17,001,960		170		374,736			-			-			-			374,906
Conversion of Series A Preferred to Common Stock		(51,500	)		(1	)		-		-		51,500,000		515		(515	)		-						-			(1	)
Conversion of convertible notes payable and accrued interest into common stock		-			-			-		-		66,918,200		669		668,513			-						-			669,182
Warrants associated with convertible debt		-			-			-		-		-		-		66,660			-			-			-			66,660
Net Loss		-			-			-		-		-		-		-			-			(3,070,454	)		(32,647	)		(3,103,101	)
Balance June 30, 2024		705,895		$	7			1,000,000	$	10		524,853,304	$	5,248	$	20,899,187		$	51,950		$	(26,708,915	)	$	(2,859,941	)	$	(8,612,454	)

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

F-58 Table of Contents

XERIANT, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS

XERIANT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the years ended
	June 30,
	2024			2023

Cash Flows from Operating Activities
Net Loss	$	(3,103,101	)	$	(7,096,639	)
Adjustments to reconcile net loss to net
cash used by operating activities:
Depreciation and amortization		1,512			1,469
Stock option expense		-			702,116
Stock issued for services		374,906			48,000
Change in fair value of convertible bridge loans		2,448			57,368
Gain on extinguishment of debt		(28,627	)		-
Loss on extinguishment of debt		20,298			4,259,987
Loss from Ebenberg JV		-			98,781
Loss on impairment of investment		-			156,460
Amortization of debt discount		19,189			461,842
Amortization of right of use asset		50,658			45,431
Changes in operating assets and liabilities:
Prepaids		1,598			(3,763	)
Accounts payable and accrued liabilities		1,286,773			145,722
Accrued liability, related party		-			(2,000	)
Lease liabilities		(55,999	)		(48,964	)
Net cash from operating activities		(1,430,345	)		(1,174,190	)

Cash Flows from Investing Activities
Cash issued for notes receivable		(139,947	)		-
Cash repayments for notes receivable		131,784			-
Investment in JV Movychem		-			(197,563	)
Purchase of property and equipment		-			(2,567	)
Net cash from financing activities		(8,163	)		(200,130	)

Cash Flows from Financing Activities

Proceeds from convertible bridge loans		2,030,000			370,000
Net cash from financing activities		2,030,000			370,000

Net change in cash		591,492			(1,004,320	)

Cash at beginning of period		61,625			1,065,945

Cash at end of period	$	653,117		$	61,625

Supplemental Cash Flow Information
Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	-		$	-

Non-cash investing and financing activities:
Conversion of convertible notes payable and accrued interest	$	669,182		$	-
Warrants issued with convertible notes payable	$	66,660		$	2,688,128

	For the years ended
	June 30, 2023			June 30, 2022
Cash Flows from Operating Activities
Net Loss	$	(7,096,639	)	$	(15,882,195	)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization		1,469			15,581
Stock option expense		702,116			3,248,181
Stock issued for services		48,000			761,954
Financing fees		-			43,750
Inducement of conversion of debt		-			134,929
Change in fair value of convertible bridge loans		57,368			-
Loss on extinguishment of debt		4,259,987			-
Loss from Ebenberg JV		98,781			57,678
Loss on impairment of investment		156,460			-
Amortization of debt discount		461,842			4,629,089
Amortization of right of use asset		45,431			40,867
Changes in operating assets and liabilities:
Prepaids		(3,763	)		480
Accounts payable and accrued liabilities		145,722			(7,120	)
Accrued liability, related party		(2,000	)		(3,000	)
Shares to be issued		-			75,200
Lease liabilities		(48,964	)		(42,643	)
Net cash from operating activities		(1,174,190	)		(6,927,249	)
Cash Flows from Investing Activities
Investment in JV Movychem		(197,563	)		(115,356	)
Purchase of property and equipment		(2,567	)		(19,990	)
Net cash from financing activities		(200,130	)		(135,346	)
Cash Flows from Financing Activities
Sale of common stock		-			2,078,500
Cash from exercise of warrants		-			128,550
Proceeds from convertible notes payable		-			4,958,950
Proceeds from convertible bridge loans		370,000			-
Net cash from financing activities		370,000			7,166,000
Net change in cash		(1,004,320	)		103,405
Cash at beginning of period		1,065,945			962,540
Cash at end of period	$	61,625		$	1,065,945
Supplemental Cash Flow Information
Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	-		$	-
Non-cash investing and financing activities:
Conversion of convertible notes payable and accrued interest	$	-		$	426,819
Warrants issued with convertible notes payable	$	2,688,128		$	2,777,081
Beneficial conversion feature arising from convertible notes payable	$	-		$	2,615,419

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

F-69 Table of Contents

XERIANT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS

Company Overview

Xeriant, Inc. (the “Company”) is dedicated to the discovery, development and commercialization of advanced materials and technology related to next generation air and spacecraft, 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 iswill be marketed under the DUREVER™ brand, and includes ~~NexBoard~~NEXBOARD™, an eco-friendly, patent-pending composite building panel made from plastic and cellulose waste and a proprietary flame retardant, primarily designed to ~~replace~~be ~~products~~a replacement for traditional building materials 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 ~~has~~ had two joint ventures, one in the area of aerospace that was effective May 2731, 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 ~~acquisition~~development and ~~commercial~~commercialization ~~exploitation~~ of eco-friendly, advanced materials ~~and chemicals~~ which have applications across a broad range of industries and the potential to generate significant near-term revenue. The Company’s ~~commercialization~~ strategy encompasses licensing arrangements, ~~and~~ joint ventures, or combinations which ~~would~~could allow for more rapid access to the market with reduced capital requirements and financial risk. InSome ~~addition~~partner tocompanies ~~providing~~may ~~the~~provide production and distribution infrastructure, ~~these~~which ~~established~~could ~~partnering companies can~~ streamline testing and certification ~~and~~as well as add brand recognition ~~value~~. ~~The~~Once ~~advanced~~the ~~materials~~Company ~~and~~establishes ~~chemicals~~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 a new trademarked ~~brand~~brands owned by the Company. The Company is exploring manufacturing and branding opportunities for specific products derived from advanced materials ~~and chemicals~~ acquired or developed, which would involve setting up production facilities, equipment, systems and supply ~~chain~~chains.

Effective April 2, 2022, the Company entered into a Joint Venture Agreement with Movychem s.r.o., a Slovakian ~~chemical~~ company, ~~setting forth the terms for a joint venture (referred~~ to ~~herein as the Movychem JV) to~~ exploit ~~the~~ Movychem’s ~~Intellectual~~intellectual ~~Property~~property ~~and~~related ~~Purchased~~to ~~Patents~~advanced materials. The ~~Movychem~~joint ~~JV,~~venture was owned 50% by Xeriant and 50% by Movychem, ~~subject~~and ~~to certain funding conditions,~~ was ~~granted~~terminated ~~the~~effective ~~exclusive~~June ~~worldwide rights to the intellectual property related to Retacell®~~30, ~~an industrial flame-retardant, and would be responsible for developing applications and commercializing products~~2023.

OnThroughout ~~June~~the 8,second ~~2022~~half of 2023, Xeriant ~~announced~~began ~~the~~developing ~~development~~its ofown aadvanced ~~multi-purpose~~materials, ~~high-strength~~including ~~fire~~proprietary flame-retardant ~~and~~technology ~~water-resistant~~for ~~composite~~polymers ~~panel~~contained ~~made~~in ~~from~~recycled materials. The Company also began testing a ~~formulation~~number of ~~Retacell®~~production ~~and~~processes ato ~~cardboard~~manufacture ~~fiber~~its eco-~~reinforced~~friendly, ~~polymeric~~patent ~~resin.~~pending, ~~The~~composite construction panel ~~described~~called NEXBOARD™ that can be competitive in the ~~press~~market ~~release~~and ~~was~~produced at industrial scale. Xeriant intends to initially ~~produced~~manufacture inthese wallboards through a ~~benchtop~~contract ~~setting~~manufacturer to meet current existing demand indicated by several homebuilders and developers. NEXBOARD will be available in varying thicknesses and sizes, including standard 48” x 96” sheets.

~~After~~F-10 ~~experiencing~~Table ~~a number~~ of issues, including but not limited to Movychem’s unwillingness to provide material documentation, processes and information required for the exploitation of Retacell®, the Company independently developed an upcycled construction panel, without the inclusion of Retacell®, outside of the Movychem JV. Contents

On ~~July~~August 1112, ~~2023~~2022, ~~Xeriant~~the ~~announced~~Company ~~the~~filed ~~successful~~a ~~testing~~trademark ofapplication awith ~~proprietary~~the ~~high-volume~~U.S. ~~production~~Patent ~~process~~and Trademark Office for an“NEXBOARD,” ~~environmentally~~with ~~friendly~~respect ~~patent-pending~~to construction panels, namely, composite ~~construction~~sheets ~~panel~~and ~~(NexBoard”)~~panels ~~that~~composed ~~can~~primarily beof ~~produced~~plastic, inreinforcement ~~the~~materials ~~United~~and ~~States~~fire-retardant atchemicals ~~industrial~~for ~~scale. This~~use ~~approach~~in ~~will~~walls, ~~enable~~ceilings, ~~the~~flooring, ~~Company to~~framing, ~~unlock~~siding, ~~existing~~roofing ~~demand~~and ~~indicated~~decking. byThe ~~several~~trademark ~~homebuilders~~filing was intentionally broad and ~~developers~~based ~~seeking~~upon ~~environmentally~~demand ~~friendly~~for a general all-purpose construction ~~panels~~panel inmade ~~varying~~from ~~thicknesses~~a ~~and~~mixture ~~sizes,~~of ~~including~~fire-retardant ~~standard~~and ~~48”~~recycled xmaterials. ~~96”~~Xeriant ~~sheets,~~has ~~economically~~also ~~and~~filed ~~with~~a ~~consistency~~trademark ~~and~~application ~~efficiency~~for “DUREVER™. ”

FOn March 31, 2023, the Company filed a provisional patent application titled “Multilayered Fire-7Resistant ~~Table~~Polymer Composite and Method for Producing Same,” for a method of ~~Contents~~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.

On August 12, 2022, the Company filed the trademark “NexBoard,” for 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.

Because of Movychem’s non-performance, as described above, Xeriant ceased paying Movychem $25,000 per month as required in the Joint Venture beginning December 2022. On February 13, 2023, Movychem formally requested dissolution of its Joint Venture with Xeriant, Ebenberg, LLC. On February 24, 2023, Xeriant provided a formal response to Movychem, highlighting its multiple and sustained lapses in collaborative efforts related to the commercialization of the Retacell® technology. Subsequent to this communication, Xeriant expressly repudiated Movychem’s proposition for dissolution and their proposition to take an exclusive territory to market Retacell®. Because Xeriant is focused on the commercialization and industrial-level production of eco-friendly composite construction panels, and has moved past the Retacell® technology, the Company agreed to dissolution of the Ebenberg, LLC Joint Venture effective June 30, 2023.

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. 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 potential sites for near-term contract manufacturing, a pilot plant, and larger manufacturing facilities, received bids for specialized manufacturing equipment, developed timetables related to the action plan, and hired a managing director with decades of experience to oversee the projects.

Aerospace

~~Another~~The ~~area~~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 ~~interest~~focus ~~for~~that are reshaping the future of aerospace include advanced materials, advanced air mobility, unmanned aerial systems, AI, hypersonics, communications, cybersecurity, satellites, and renewable energy technology. The Company’s isinitial concentration was on the emerging aviation market called ~~Advanced~~advanced ~~Air~~air ~~Mobility~~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 offer 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. ~~The~~Hydrogen ~~adoption~~powered ~~and~~aircraft ~~integration~~have ofalready ~~niche~~been ~~aerial~~prototyped ~~services~~and ~~through~~are ~~AAM is~~ expected to ~~provide~~become ~~benefits~~more ~~throughout~~prevalent over the ~~economy~~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 ~~AAM~~aerospace technologies which enhance ~~performance~~sustainability, ~~increase safety~~performance, and ~~enable and support more efficient, autonomous, and sustainable flight operations, including electric and hybrid-electric passenger and cargo transport aircraft capable of vertical takeoff and landing~~safety. ~~The Company’s plan to source and acquire strategic interests in leading aerospace companies developing breakthrough VTOL aircraft began in the second quarter of fiscal year 2021.~~

Effective May 2731, 2021, the Company entered into a 50/50 Joint Venture Agreement with XTI Aircraft Company (“XTI”), ~~a privately owned OEM based in Englewood, Colorado~~ for the purpose of completing the preliminary design review (“PDR”) of XTI’s TriFan 600, a 5-passenger plus pilot, hybrid electric vertical takeoff and landing (~~eVTOL~~VTOL) fixed-wing aircraft. The aircraft’s unique design elements along with the $1 billion in pre-orders and reservations, enticed Xeriant to invest $5.5 million to complete the PDR, which was accomplished in the first quarter of 2022 according to XTI. The TriFan 600 was purported to become the fastest, longest-range VTOL aircraft in the world and the first commercial fixed-wing VTOL airplane. According to recent public disclosures by XTI, pre-orders and reservations of the TriFan 600 total approximately $7 billion.

Through the joint venture with XTI, (referred to hereinafter as the “XTI JV”), the Company was involved in the successful completion of the preliminary design of the TriFan 600 eVTOL aircraft. The TriFan 600 is being designed to become the fastest, longestF-~~range~~11 ~~VTOL~~Table ~~aircraft in the world and the first commercial fixed-wing VTOL airplane, with current pre-orders~~ of ~~approximately $7 billion in gross revenue upon delivery of those aircraft.~~ Contents

FOn May 17, 2022, Xeriant 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 Xeriant’s Senior Secured Note with Auctus Fund, LLC. On July 25, 2023, Inpixon filed an 8-K, ~~Table~~announcing their intention to merge with XTI having executed an Agreement of ~~Contents~~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.

~~The~~On ~~purpose~~December of6, ~~the XTI JV~~2023, ~~preliminary~~the ~~design~~Company ~~review~~initiated ~~(PDR),~~legal ~~had~~proceedings ~~been~~against ~~achieved~~XTI ~~during~~in the ~~first~~Federal ~~quarter~~District ofCourt ~~fiscal~~for ~~year~~the ~~2022. At~~Southern ~~that~~District ~~point,~~of ~~Xeriant~~New ~~had~~York ~~funded~~(Case ~~approximately $5~~no.5 ~~million~~1:23-cv-10656-JPO), ~~into~~along ~~the~~with ~~XTI~~other ~~JV. On~~unnamed ~~May 17~~defendants, ~~2022,~~seeking ~~Xeriant signed a Letter Agreement with XTI related~~ to enforce the ~~introduction~~terms of ~~XTI~~the ~~to Inpixon, a Nasdaq-listed company. Under this~~ Letter Agreement, ifand ~~there~~alleging ~~was~~fraudulent ~~a combination or other transaction between XTI and Inpixon~~acts, ~~Xeriant~~breach ~~would receive compensation~~ of 6contract ~~percent of XTI fully diluted pre-merger shares,~~ and ~~XTI~~misappropriation ~~would assume the obligations~~ of ~~Xeriant’s~~intellectual ~~Senior Secured Note with Auctus Fund, LLC~~property. On ~~July~~The ~~25,~~foregoing ~~2023,~~description ~~Inpixon~~of ~~filed~~the anlegal ~~8-K,~~action ~~announcing~~does ~~their~~not ~~intention~~purport to ~~merge~~be ~~with~~complete ~~XTI~~and ~~having~~is ~~executed~~subject anin ~~Agreement~~its ofentirety ~~Plan~~by ~~and~~the ~~Merger~~full ~~with~~text ~~XTI.~~of ~~The~~the ~~filing~~complaint, ~~also~~a ~~showed~~copy ~~that~~of ~~XTI~~which ~~had~~was ~~engaged~~filed in aan ~~transaction~~8-K ~~with Inpixon~~ on ~~March~~December 1012, 2023, ~~receiving~~Exhibit ~~$300,000 in funding~~99. ~~Inpixon~~1. ~~subsequently~~Litigation ~~filed~~is anstill ~~S-4/A registration statement on October 6, 2023~~pending.

In the area of aerospace, management believes that Xeriant 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 ~~its~~partner ~~subsidiaries~~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.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements, which include the accounts of the Company, American Aviation Technologies ("AAT"), Eco-Aero, LLC, and ~~Eco-Aero~~BlueGreen Composites, LLC, its subsidiaries, are prepared in conformity with generally accepted accounting principles in the United States of America (U.S. GAAP). All significant intercompany balances and transactions have been eliminated. 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.

Going Concern

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 $2326,~~638~~708,~~461~~915 as of June 30, ~~2023~~2024. During the year ended June 30, ~~2023~~2024, the Company’s net loss was $73,~~096~~103,~~639~~101 and at June 30, ~~2023~~2024, the Company had a working capital deficit of $68,~~684~~661,~~867~~248. 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 ~~two~~three months from October 128, ~~2023~~2024. 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. The Company does not expect to generate any significant revenue the foreseeable future. The Company is in immediate need of further working capital and is seeking options, with respect to financing, in the form of debt, equity or a combination thereof.

F-912 Table of Contents

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.

~~Principles of Consolidation~~Reclassification

~~The~~Certain ~~consolidated~~amounts ~~financial~~included ~~statements~~in ~~include~~prior ~~the~~year ~~accounts~~financial ofstatements ~~Xeriant,~~have ~~Inc.,~~been ~~American~~reclassified ~~Aviation~~to ~~Technologies,~~conform ~~LLC~~to ~~(“AAT”),~~the ~~and~~current ~~Eco-Aero,~~year ~~LLC~~presentation. ~~The~~These ~~Company~~reclassifications ~~owns~~did anot ~~64%~~have ~~controlling interest of AAT; and~~ a ~~50%~~material ~~interest~~impact inon ~~Eco-Aero, LLC, with control exercised through a majority membership in~~ the ~~management~~Company’s ~~committee.~~previously ~~All~~reported ~~significant~~financial ~~intercompany balances and transactions have been eliminated~~statements.

Use of Estimates

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 beneficial conversion features and warrants associated with convertible debt. Actual results could differ from these estimates.

Fair Value Measurements and Fair Value of Financial Instruments

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 stock options and 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.

F-10 Table of Contents

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.

F-13

Table of Contents

Cash and Cash Equivalents

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.

Impairment of Long-Lived Assets

In accordance with ASC 360-10, Impairment and Disposal of Long -Lived Assets, 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 year ended June 30, 2024, there was no impairment. During the year ended June 30, 2023, the Company fully impaired its investment in JV with Ebenberg LLC in the amount of $156,460.

Convertible Debentures

The Company adopted 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. The Company adopted ASU 2020-06 utilizing the modified retrospective method, which resulted in an immaterial impact to the Company.

The Company adopted ASU 2020-06 utilizing the modified retrospective method, which resulted in an immaterial impact to the Company. Prior to adoption of ASU 2020-06, if the conversion features of conventional convertible debt provided for a rate of conversion that is below market value at issuance, this feature was characterized as a beneficial conversion feature ("BCF").

A BCF was recorded by the Company as a debt discount pursuant to ASC Topic 470-20 "Debt with Conversion and Other Options." In those circumstances, the convertible debt was recorded net of the discount related to the BCF, and the Company amortized the discount to interest expense, over the life of the debt. During the year ended June 30, 2022, the Company recorded a BCF in the amount of $2,615,419.

Stock-based Compensation

The Company measures the cost of employee 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. During the years ended June 30, ~~2023~~2024 and ~~2022~~2023, the Company recognized $~~702,116~~0 and $3702,~~248~~116,~~181~~ ~~in stock-based compensation expense,~~ respectively.

Leases

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 straightF-~~line~~14 ~~basis~~Table ~~over the lease term and is presented in operating expenses on the unaudited condensed consolidated statements~~ of ~~operations.~~Contents

~~Finance~~Operating ~~leases~~lease ~~are~~right ~~recorded~~of asuse a(“ROU”) ~~finance~~assets represents the right to use the leased asset for the lease ~~liability~~term and ~~property,~~operating ~~plant~~lease ~~and~~liabilities ~~equipment~~are ~~asset,~~recognized based on the present value of the future minimum lease payments over the lease term at commencement date. ~~The~~As ~~asset~~most isleases ~~depreciated~~do not provide an implicit rate, ~~and~~the Company uses an incremental borrowing rate based on the ~~liability~~information available at the adoption date in determining the present value of future payments. Lease expense for minimum lease payments is amortized ~~with~~on ~~interest~~a ~~expense~~straight-line ~~incurred~~basis over the ~~life~~lease ofterm and is presented in operating expenses on the ~~lease~~consolidated statements of operations.

Finance leases are recorded as a finance lease liability and property and equipment asset, based on the present value of lease payments. The asset is depreciated, and the liability is amortized with interest expense incurred over the life of the lease.

As permitted under the new guidance, the Company has made an accounting policy election not to apply the recognition provisions of the guidance to short term leases (leases with a lease term of twelve months or less that do not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise); instead, the Company will recognize the lease payments for short term leases on a straight-line basis over the lease term.

Investments

The Company follows ASC 325-20, Cost Method Investments, to account for its ownership interest in noncontrolled entities. Under ASC 325-20, equity securities that do not have readily determinable fair values (i.e., non-marketable equity securities) and are not required to be accounted for under the equity method are typically carried at cost (i.e., cost method investments). Investments of this nature are initially recorded at cost. Income is recorded for dividends received that are distributed from net accumulated earnings of the noncontrolled entity subsequent to the date of investment. Dividends received in excess of earnings subsequent to the date of investment are considered a return of investment and are recorded as reductions in the cost of the investment. Investments are written down only when there is clear evidence that a decline in value that is other than temporary has occurred. During the year ended June 30, 2023, the Company fully impaired its investment in JV with Ebenberg LLC in the amount of $156,460.

Research and Development Expenses

Expenditures for research and development are expensed as incurred. The Company incurred research and development expenses of $0196,422 and $~~5,267,581~~0 for the years ended June 30, ~~2023~~2024 and ~~2022~~2023, respectively.

Advertising and Marketing Expenses

The Company expenses advertising and marketing costs as they are incurred. The Company recorded advertising expenses in the amount of $234,~~348~~854 and $~~651~~23,~~567~~348 for the years ended June 30, ~~2023~~2024, and ~~2022~~2023, respectively, and are included within general and administrative expenses on the consolidated statements of operations.

Income Taxes

The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is 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.

F-1115 Table of Contents

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.

Basic Income (Loss) Per Share

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:

	Years ended June 30,
	2023		2022
	2024		2023
Warrants		~~104~~118,~~802~~968,~~161~~828		55104,~~512~~802,161
Stock options		21,250,000		21,250,000
Convertible notes payable		62882,~~283~~527,~~909~~009		5062,~~968~~283,~~829~~909
Preferred stock		~~757~~705,~~395~~895,000		~~781~~757,~~132~~395,000
Total		~~945~~1,~~731~~728,~~070~~640,837		~~908~~945,~~862~~731,~~990~~070

Recent Accounting Pronouncements

InAll ~~August~~other ~~2020,~~recent ~~the~~accounting ~~Financial~~pronouncements ~~Accounting~~issued ~~Standards~~by ~~Board~~the ~~(FASB”)~~Financial ~~issued~~ Accounting Standards ~~Updated~~Board (“~~ASU~~FASB”) ~~2020-06~~, ~~Accounting~~did ~~for~~not ~~Convertible~~or ~~Instruments~~are ~~and~~not ~~Contracts~~believed inby anmanagement ~~Entity’s~~to ~~Own~~have ~~Equity,~~a ~~which~~material ~~will~~impact ~~simplify~~on anthe ~~issuer~~Company’s ~~accounting~~present ~~for~~or ~~convertible~~future ~~instruments~~consolidated ~~and~~financial ~~its application of the derivatives scope exception for contracts in its own equity~~statements. Additionally, ASU 2020-06 removes the requirements for accounting for beneficial conversion features. The guidance is effective for smaller reporting companies for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company adopted this guidance effective July 1, 2022.

~~On June 2016, the FASB issued ASU No. 2016~~F-~~13, Credit~~16 ~~Losses~~Table ~~- Measurement~~ of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 requires entities to use a forward-looking approach based on current expected credit losses (“CECL”) to estimate credit losses on certain types of financial instruments, including trade receivables. This may result in the earlier recognition of allowances for losses. The Company implemented ASU 2016-13 on July 1, 2022. The impact on the consolidated financial statements was not material.Contents

F-12 Table of Contents

NOTE 3 – JOINT VENTURE

Joint Venture with XTI Aircraft

OnEffective May 31, 2021, weXeriant entered into a Joint Venture Agreement (the “Agreement”) with XTI Aircraft Company (“XTI”), a Delaware corporation, to form a joint venture with XTI (the “XTI JV”), named Eco-Aero, LLC, with the purpose of completing the preliminary design review (“PDR”) of XTI’s TriFan 600, a 5-passenger plus pilot, hybrid electric, eVTOL fixed wing aircraft. Under the Agreement, Xeriant iscontributed ~~contributing~~ capital, technology, and strategic business relationships, and XTI iscontributed ~~contributing~~ intellectual property licensing rights and know-how. 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 Xeriant and two by XTI. The ~~Agreement~~Company ~~was~~invested ~~effective~~approximately on$5.5 ~~May~~million ~~27,~~into ~~2021~~the joint venture after borrowing the funds from Auctus Fund LLC (“Auctus”) through a Senior Secured Promissory Note, ~~with~~through an ~~initial~~introduction ~~deposit~~from ofMaxim $1Group, ~~million~~LLC, ~~into~~ the ~~XTI~~Company’s JVinvestment banker at the time. The ~~Company’s~~borrowed ~~financial~~funds ~~commitment~~from isAuctus upwere intended to ~~$10~~be ~~million,~~a ~~contributed~~bridge asloan ~~needed~~that would be resolved through an IPO (Initial Public Offering) and uplist to ~~complete~~Nasdaq ~~the~~in ~~preliminary~~a ~~design~~merger ofwith XTI, which did not occur because XTI refused to move forward with the ~~aircraft~~merger. ~~XTI~~ ~~completed~~The ~~Preliminary~~PDR ~~Design~~was ~~Review~~completed during the first quarter of ~~fiscal~~2022 ~~year~~according ~~2022~~to XTI, which was the purpose of the ~~XTI~~joint JVventure. 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 May 17, 2022, wethe Company executed a confidential Letter Agreement with XTI, the material terms of which are briefly delineated as follows:

• Xeriant would be entitled to compensation for its role in introducing XTI to ~~Inpixon,~~ a Nasdaq-listed company, contingent upon the occurrence of any merger, combination, or transactional event between XTI and the Nasdaq company, which has since been identified as Inpixon. XTI would assume the financial obligations related to the Senior Secured Note with Auctus Fund, LLC, including the $6.05 million principal balance of the note and warrant obligations. Additionally, Xeriant was to be granted a fully diluted equity interest amounting to 6% in XTI, issued immediately prior to any prospective combination with Inpixon.

• XTI would assume the financial obligations related to the Senior Secured Note with Auctus Fund, LLC, including the $6.05 million principal balance of the note and warrant obligations. Additionally, Xeriant was to be granted a fully diluted equity interest amounting to 6% in XTI, issued immediately prior to any prospective combination with Inpixon.

FOn July 25, 2023, Inpixon filed an 8-13K, ~~Table~~announcing their intention to merge with XTI having executed an Agreement of ~~Contents~~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. Inpixon filed an S-4 registration statement on August 14, 2023, and subsequently filed an S-4/A amended registration statement on October 6, 2023.

AsOn ofDecember 6, 2023, the ~~date~~Company initiated legal proceedings against XTI in the Federal District Court for the Southern District of ~~this~~New ~~filing~~York (Case no. 1:23-cv-10656-JPO), wealong ~~remain~~with ~~engaged~~other inunnamed ~~dialogue~~defendants, ~~with~~alleging fraudulent acts, breach of contract and misappropriation of intellectual property. In the complaint, the Company contends that XTI, toutilizing ~~enforce~~false ~~compliance~~promises, induced substantial investments from the Company, in terms of millions of dollars together with valuable intellectual property, for the ~~Letter~~development ~~Agreement~~of ~~and~~the toTriFan ~~find~~600 anvertical ~~amicable~~takeoff ~~resolution~~and landing (VTOL) aircraft.

The Company analyzed the transaction under ASC 810, Consolidation, to determine if the joint venture classifies as a Variable Interest Entity (“VIE”). The JV qualifies as a VIE based on the fact the JV does not have sufficient equity to operate without financial support from Xeriant. According to ASC 810F-~~25-38,~~17 aTable ~~reporting entity shall consolidate a VIE when that reporting entity has a variable interest (or combination~~ of variable interests) that provides the reporting entity with a controlling financial interest on the basis of the provisions in paragraphs 810-10-25-38A through 25-38J. The reporting entity that consolidates a VIE is called the primary beneficiary of that VIE. According to the JV operating agreement, the ownership interests are 50/50. However, the agreement provides for a Management Committee of five members. Three of the five members are from Xeriant. Additionally, Xeriant had a right to invest up to $10,000,000 into the JV. As such, Xeriant has substantial capital at risk. Based on these two factors, the conclusion is that Xeriant is the primary beneficiary of the VIE. Accordingly, Xeriant has consolidated the VIE.Contents

The Company ~~includes~~believes that the ~~assets~~completed ~~and~~designs ~~liabilities~~of ~~related~~the TriFan 600, a product of the Company’s significant investment, were integral to XTI’s merger with Inpixon. Despite the ~~VIE~~Company’s pivotal role in facilitating this merger, as memorialized in a formal agreement, XTI has publicly disclaimed any obligation to compensate the ~~consolidated~~Company. ~~balance~~In ~~sheets~~response to XTI’s alleged fraudulent conduct, deceptive maneuvers and intentional breaches, the Company is seeking a range of remedies. ~~Xeriant~~These include the recovery of losses, ~~Inc~~expenses, attorneys’ fees, punitive damages and a compensatory damage award exceeding $500 million. ~~provides~~The ~~cash~~legal action aims to address the ~~VIE~~alleged misconduct comprehensively and to ~~fund~~protect ~~its~~the ~~operations.~~Company’s interests in the face of XTI’s actions. The ~~carrying~~foregoing ~~amounts~~description of ~~consolidated~~the ~~VIE's~~legal ~~assets~~action does not purport to be complete and ~~liabilities~~is ~~associated~~subject ~~with~~in its entirety by the ~~VIE~~full ~~subsidiary~~text ~~were~~of asthe ~~follows:~~Complaint, a copy of which was filed in an 8-K on December 12, 2023, Exhibit 99.1. Litigation is still pending.

	June 30, 2023		June 30, 2022
Assets
Cash	$	-	$	4,516
Total Assets	$	-	$	4,516
Liabilities
Due from Xeriant Inc.	$	4,475,155	$	4,479,547
Total Liabilities	$	4,475,155	$	4,479,547

The Company analyzed the transaction under ASC 810, Consolidation, to determine if the joint venture classifies as a Variable Interest Entity (“VIE”). The JV qualifies as a VIE based on the fact the JV does not have sufficient equity to operate without financial support from Xeriant. According to ASC 810-25-38, a reporting entity shall consolidate a VIE when that reporting entity has a variable interest (or combination of variable interests) that provides the reporting entity with a controlling financial interest on the basis of the provisions in paragraphs 810-10-25-38A through 25-38J. The reporting entity that consolidates a VIE is called the primary beneficiary of that VIE. According to the JV operating agreement, the ownership interests were 50/50. However, the agreement provides for a Management Committee of five members. Three of the five members are from Xeriant. Additionally, Xeriant invested approximately $5.5 million in the JV. As such, Xeriant has substantial capital at risk. Based on these two factors, the conclusion is that Xeriant is the primary beneficiary of the VIE. Accordingly, Xeriant has consolidated the VIE.

~~F-14~~The ~~Table~~Company includes the assets and liabilities related to the VIE in the condensed consolidated balance sheets. Xeriant provides cash to the VIE to fund its operations. The carrying amounts of ~~Contents~~the consolidated VIE's assets and liabilities associated with the VIE subsidiary were as follows:

	June 30, 2024		June 30, 2023
Assets
Cash	$	-	$	-
Total Assets	$	-	$	-

Liabilities
Due from Xeriant Inc.	$	4,475,155	$	4,475,155
Total Liabilities	$	4,475,155	$	4,475,155

Joint Venture with Movychem

OnEffective April 2, 2022, the Company entered into a ~~Joint~~joint ~~Venture~~venture ~~Agreement~~(“JV”) with Movychem s.r.o., a Slovakian limited liability company (“Movychem”), called Ebenberg, LLC, setting forth the terms for the establishment of a joint venture to develop and exploit ~~the~~certain Movychem ~~Intellectual~~intellectual ~~Property~~property ~~and~~that would be exploited by the ~~Purchased~~joint ~~Patents~~venture. The ~~Joint~~JV ~~Venture~~was is organized as a Florida limited liability company ~~under~~and ~~the~~was ~~name Ebenberg, LLC,~~ owned 50% by each of the Company and Movychem. Essentially, the Company would contribute certain funding for its capital contribution and Movychem would provide an exclusive license and assignment of its intellectual property.

~~For~~The ~~its~~Company ~~capital~~analyzed ~~contribution~~the totransaction ~~the~~under ~~Joint~~ASC ~~Venture~~810, ~~pursuant~~Consolidation, to adetermine ~~Patent~~if ~~and Exclusive License and Assignment Agreement (~~the ~~“Patent~~joint ~~Agreement”),~~venture ~~Movychem~~classifies ~~would~~as ~~transfer~~a toVIE. ~~the~~The Joint Venture ~~all~~qualifies ofas ~~its~~a ~~interest~~VIE tobased on the ~~know-how~~fact ~~and~~the ~~intellectual~~JV ~~property~~does ~~relating~~not tohave ~~Retacell®~~sufficient ~~exclusive~~equity ofto ~~all~~operate ~~patents,~~without ~~and~~financial ~~the~~support ~~Company~~from ~~would~~both ~~contribute~~parties. ~~the~~According ~~amount~~to ofASC $2810-25-38,~~600,000~~ ~~payable (~~a) ~~$600,000~~reporting atentity ~~the~~shall ~~rate~~consolidate ofa ~~$25,000~~VIE ~~per~~when ~~month~~that ~~over~~reporting aentity 24has ~~month~~a ~~period~~variable ~~and~~interest (b)or ~~$2,000,000~~combination ~~within~~of ~~five~~variable ~~business~~interests) ~~days~~that ofprovides athe ~~closing~~reporting ofentity with a ~~financing~~controlling infinancial ~~which~~interest on the ~~Company~~basis ~~receives net proceeds~~ of atthe ~~least~~provisions ~~$3,000,000 but~~ in noparagraphs ~~event~~810-10-25-38A ~~later~~through ~~than~~25-38J. ~~six~~The ~~months~~reporting ~~from~~entity ~~the~~that ~~Effective~~consolidates ~~Date.~~a AtVIE ~~such~~is ~~time~~called as the ~~Company~~primary ~~makes~~beneficiary aof ~~$2,000,000~~that ~~payment~~VIE. ~~(and~~According ~~assuming~~to the ~~Company~~JV isoperating ~~current~~agreement, ~~with~~the ~~its~~ownership ~~then~~interests ~~monthly~~were ~~capital~~50/50 ~~contributions),~~and ~~pursuant to~~ the ~~Patent~~agreement ~~Agreement,~~provides ~~Movychem~~for ~~would~~a ~~transfer~~Management ~~all~~Committee of ~~its~~five ~~rights,~~members. ~~title~~Two ~~and~~of ~~interest~~the tofive ~~all~~members ofare ~~the~~from ~~patents~~Xeriant ~~related~~and toMovychem, ~~Retacell~~respectively ~~for~~and anone ~~amount~~is ~~equal~~appointed toby ~~aggregate~~mutual ~~cash~~agreement ~~contributions~~ of the ~~Company~~parties. Movychem is transferring to the Joint Venture ~~plus~~all ~~40%~~ of ~~all~~its ~~royalty~~interest ~~payments~~to ~~received~~certain byknow-how ~~the~~and ~~Joint~~intellectual ~~Venture~~property, ~~for~~and the ~~licensing~~Company ofis ~~Retacell~~contributing ~~products~~cash. ~~Pending~~As ~~assignment~~such, ofboth ~~the~~parties ~~patents~~do tonot ~~the~~have ~~Joint~~substantial ~~Venture,~~capital ~~pursuant~~at torisk. ~~the~~Based ~~Patent~~on ~~Agreement~~these two factors, ~~Movychem~~the ~~would~~conclusion ~~grant~~is tothat no one is the ~~Joint~~primary ~~Venture~~beneficiary anof ~~exclusive~~the ~~worldwide~~VIE. ~~license~~Accordingly, ~~under~~Xeriant has not consolidated the ~~patents~~VIE.

~~Under~~After funding the ~~Joint~~JV ~~Venture~~during ~~Agreement,~~ the ~~Company~~remainder ~~agreed~~of to2022, ~~grant~~the toCompany ~~certain~~notified ~~individuals affiliated with~~ Movychem ~~five-year~~that ~~warrants~~in ~~(the~~its ~~“Warrants”)~~determination toit ~~purchase~~had annot ~~aggregate~~performed ofits ~~170,000,000~~obligations ~~shares~~under of the ~~Company’s~~Joint ~~common~~Venture ~~stock~~Agreement atand andiscontinued ~~exercise~~payments ~~price~~until ofthere ~~$0.01~~was ~~per~~a ~~share~~resolution, ~~with~~which ~~vesting~~was ~~depending~~followed onby ~~the~~Movychem ~~satisfaction~~formally requested dissolution of ~~various~~the ~~milestones~~JV, aswhich ~~described~~the ~~therein.~~parties ofagreed ~~which~~to ~~none~~and ~~have~~was ~~yet~~effective toJune ~~occur~~30, 2023.

~~The~~As Company analyzed the transaction under ASC 810, Consolidation, to determine if the joint venture classifies as a Variable Interest Entity (“VIE”). The Joint Venture qualifies as a VIE based on the fact the JV does not have sufficient equity to operate without financial support from both parties. According to ASC 810-25-38, a reporting entity shall consolidate a VIE when that reporting entity has a variable interest (or combination of ~~variable~~June interests) that provides the reporting entity with a controlling financial interest on the basis of the provisions in paragraphs 810-10-25-38A through 25-38J. The reporting entity that consolidates a VIE is called the primary beneficiary of that VIE. According to the JV operating agreement30, ~~the ownership interests are 50/50 and the agreement provides for a Management Committee of five members. Two of the five members are from Xeriant and Movychem~~2023, ~~respectively and one is appointed by mutual agreement of~~ the ~~parties. Movychem is transferring to the Joint Venture all of its interest to the know-how and intellectual property relating to Retacell exclusive of all patents, and the~~ Company iscontributed ~~contributing cash. As such~~$312,919 ~~both~~to ~~parties do not have substantial capital at risk. Based on these two factors,~~ the ~~conclusion~~joint ~~is that no one is the primary beneficiary of the VIE~~venture. ~~Accordingly, Xeriant has not consolidated the VIE.~~

The Joint Venture Agreement granted to Movychem the right to dissolve the Joint Venture in the event that the Company fails to make any of its capital contributions in which case the Joint Venture will be required to grant back to Movychem all joint venture intellectual property and the assignment to Movychem of any outstanding licenses. After working with Movychem over the past year and experiencing a number of issues, including but not limited to Movychem’s unwillingness to provide material documentation, processes and information required for the exploitation of Retacell®, the Company independently developed an upcycled construction panel, without the inclusion of Retacell®, outside of the Movychem JV.

Because of Movychem’s non-performance as described above, Xeriant ceased paying Movychem $25,000 per month as provided in the Joint Venture beginning December 2022. On February 13, 2023, Movychem formally requested dissolution of its Joint Venture with Xeriant, named Ebenberg, LLC. On February 24, 2023, Xeriant provided a formal response to Movychem, highlighting its multiple and sustained lapses in collaborative efforts related to the commercialization of the Retacell technology. Subsequent to this communication, Xeriant expressly repudiated Movychem’s proposition for dissolution and their proposition to take an exclusive territory to market Retacell®. Because Xeriant is focused on commercialization and industrial-level production of eco-friendly composite construction panels, and has moved beyond the Retacell® technology, the Company agreed to dissolution of the Ebenberg, LLC Joint Venture effective June 30, 2023.

F-15 Table of Contents

As of June 30, 2023 and 2022, the Company contributed $312,919 and $115,356 to the joint venture.

During the year ended June 30, 2023, the Company fully impaired its investment in JV with Ebenberg LLC in the amount of $156,460.

F-18

Table of Contents

NOTE 4 – 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, ~~2023~~2024 and ~~2022~~2023, the Company had $0403,117 and $~~811,429~~0 in excess of FDIC insurance, respectively.

NOTE 5 – OPERATING LEASE RIGHT-OF-USE ASSET AND OPERATING LEASE LIABILITY

The Company leases 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 1, 2025, in which the first three months of rent were abated. Due to the COVID-19 pandemic, the Company decided to have all employees work from home and intends to build out the office space by the end of October 2023 to allow employees to work from the office beginning in November of 2023. The following table illustrates the base rent amounts over the term of the lease:

Base Rent Periods

November 1, 2019 to October 31, 2020	$	4,367
November 1, 2020 to October 31, 2021	$	4,498
November 1, 2021 to October 31, 2022	$	4,633
November 1, 2022 to October 31, 2023	$	4,772
November 1, 2023 to October 31, 2024	$	4,915
November 1, 2024 to January 31, 2025	$	5,063

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 ~~other~~ general and administrative expenses on the consolidated ~~statement~~statements of operations. During the years ended June 30, ~~2023~~2024 and ~~2022~~2023, the Company recorded $5352,~~327~~632 and $5453,~~393~~327 in rent expense, respectively in ~~other~~ general and administrative expenses on the consolidated ~~statement~~statements of operations.

F-16 Table of Contents

Right-of-use asset is summarized below:

	June 30, 2023			June 30, 2022
	June 30, 2024			June 30, 2023
Office lease	$	220,448		$	220,448
Less accumulated amortization		(~~137~~188,~~537~~195	)		(92137,~~106~~537	)
Right of use assets, net	$	8232,~~911~~253		$	~~128~~82,~~342~~911

Operating lease liability is summarized below:

	June 30, 2023			June 30, 2022
	June 30, 2024			June 30, 2023
Office lease	$	9236,~~196~~197		$	~~141~~92,~~160~~196
Less: current portion		(5536,~~999~~197	)		(4855,~~963~~999	)
Long term portion	$	~~36,197~~-		$	9236,197

F-19

Table of Contents

Maturity of lease liabilities are as follows:

Year ended June 30, 2024	$	62,201
Year ended June 30, 2025	$	37,112
Year ended June 30, 2025		37,112
Total future minimum lease payments		37,112
Total future minimum lease payments		99,313
Less: Present value discount		(915	)
Less: Present value discount		(7,117	)
Lease liability	$	36,197
Lease liability	$	92,196

NOTE 6 – CONVERTIBLE NOTES PAYABLE, IN DEFAULT

The carrying value of convertible notes payable, ~~net of discount,~~ as of June 30, ~~2023~~2024 and ~~2022~~2023, was ~~$5,850,000~~as ~~and $3,936,185, respectively~~follows.

	June 30,		June 30,
Convertible Notes Payable	2023		2022
Convertible Notes Payable, in default	2024		2023
Convertible notes payable issued October 27, 2021 (0% interest) – Auctus Fund LLC	$	5,850,000	$	65,~~050~~850,000
Total face value	$	5,850,000	$	65,~~050~~850,000
Less unamortized discount		-		(2,113,815	)
Carrying value	$	5,850,000	$	3,936,185

F-17 Table of Contents

Auctus Fund LLC Senior Secured Note

Through Maxim Group, LLC, Xeriant was introduced to Auctus Fund, LLC (“Auctus”) for the purpose of providing a bridge loan funding to satisfy the requirements of a pending merger with XTI Aircraft under a ~~binding~~letter ~~term~~of ~~sheet~~intent signed in September 2021. On October 27, 2021, the Company was issued a convertible note payable with Auctus ~~Fund, LLC (the “Auctus Note”)~~ 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 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. AsOn ofOctober ~~June 30~~6, 2023, the Company received a ~~total~~conversion ofnotice ~~$50~~to issue 20,~~000~~011,500 ~~remains~~shares ~~outstanding~~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 ~~recorded~~contesting ~~within~~the ~~accounts~~legality ~~payable~~of this conversion and ~~accrued~~issuance ~~liabilities~~which inis a subject of the ~~consolidated~~Company’s ~~balance~~legal ~~sheets~~proceedings against Auctus.

FThe Company tested the first modification (“First Amendment”) under ASC 470-1850-40 ~~Table~~to determine if the modification resulted in an extinguishment. It was determined the present value of ~~Contents~~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.

~~Since~~On October 19, 2023, Xeriant filed a complaint in the ~~Note~~United ~~was~~States ~~issued~~Southern ~~pre-adoption~~District of ~~ASU~~New ~~2020-06,~~York ~~Accounting~~against ~~for~~Auctus ~~Convertible~~Fund ~~Instruments~~LLC, ~~and~~to ~~Contracts~~invalidate inallegedly anillegally ~~Entity’s~~designed ~~Own~~contractual ~~Equity~~agreements, including contesting the ~~Company~~enforceability ~~was~~of ~~required~~the related note and amendments, and to ~~determine~~set ifaside ~~the~~improper ~~debt~~and ~~contained~~unlawful asecurities ~~beneficial~~transactions ~~conversion~~effectuated ~~feature~~in violation of Section 15(~~“BCF”~~a),(1) ~~which~~of isthe ~~based~~Exchange onAct ~~the~~(15 ~~intrinsic~~U.S.C. ~~value~~§ on78o(a)(1)) by the ~~date~~Defendant, alleging breaches of ~~issuance~~fiduciary duty and related claims. On February 9, 2024, the case was dismissed. The Company ~~recorded~~filed a ~~beneficial~~Notice ~~conversion~~of ~~feature~~Civil inAppeal ~~the~~on ~~amount~~March of13, $22024,~~365,419~~ inprimarily ~~additional~~based ~~paid-in~~on ~~capital.~~public ~~The~~welfare ~~BCF~~because ~~resulted~~of inthe apending ~~debt~~litigation ~~discount~~between the SEC and isAuctus ~~amortized~~Fund ~~over~~Management, ~~the~~LLC, ~~life~~which ofcomplaint ~~the~~was ~~note.~~filed on June 1, 2023.

~~The~~As ~~Company~~of ~~tested~~June ~~the~~30, ~~first~~2024, ~~modification~~a ~~(“First~~total ~~Amendment”)~~of ~~under ASC 470-~~$50~~-40~~,000 toremains ~~determine~~outstanding, ifand ~~the~~is ~~modification~~recorded ~~resulted~~within inaccounts anpayable ~~extinguishment.~~and Itaccrued ~~was~~liabilities ~~determined~~on the ~~present~~consolidated ~~value~~balance ofsheets. During the ~~cash~~year ~~flows~~ended ~~under~~June ~~the~~30, ~~terms~~2024, of the ~~new~~Company ~~debt~~recorded ~~instrument~~$1,070,729 ~~was~~in atdefault ~~least~~interest 10related ~~percent~~to ~~different~~the ~~from~~note. ~~the~~On ~~present~~October ~~value~~6, of2023, ~~the~~Auctus ~~remaining~~converted ~~cash~~$200,115 ~~flows~~in ~~under~~interest ~~the~~into ~~terms~~20,011,500 shares of ~~the~~common ~~original~~stock ~~instrument.~~and Ason aApril ~~result~~5, ~~the~~2024, ~~modification~~Auctus ~~resulted~~converted $227,067 in ainterest ~~loss~~into on22,706,700 anshares ~~extinguishment~~of incommon ~~the~~stock. ~~amount~~As of $3June 30,~~570~~ 2024,~~366~~ ~~for~~ the ~~year~~balance ~~ended~~of ~~June~~accrued ~~30,2023.~~interest ~~The~~of ~~loss~~this onnote ~~extinguishment~~ was ~~determined as follows:~~$643,546.

Reacquisition Price:
Modified convertible debt instrument	$	5,950,000
Fair value of warrants		1,918,393
Cash payment		100,000
	$	7,968,393
Carrying Value of Original Instrument
Original convertible debt instrument	$	6,050,000
Debt discount - warrant		(707,585	)
Original issue discount		(341,692	)
Debt discount - BCF		(602,696	)
Carrying value of original debt		4,398,027
Loss on extinguishment	$	3,570,366

F-20

Table of Contents

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. The loss on extinguishment was determined as follows:

F-19 Table of Contents

Reacquisition Price:
Modified convertible debt instrument	$	5,850,000
Fair value of warrants		689,621
Accrued Short-term Liability		100,000
	$	6,639,621
Carrying Value of Original Instrument
Carrying value of original debt		5,950,000
Loss on extinguishment	$	689,621

For the years ended June 30, 2023 and 2022, the Company recorded $461,842 and $4,369,735 in amortization of debt discount related to the Auctus note, respectively. As of June 30, 2023 and 2022, the carrying value of the Auctus note was $5,850,000 and $3,936,185, respectively.

NOTE 7 – CONVERTIBLE BRIDGE LOANS – AT FAIR VALUE

Between January 13, 2023, and March 31, 2023, the Company issued convertible bridge loans with an aggregate face value of $270,000. The notes have a coupon rate of 10% and a maturity date of one year. If the Company has a liquidity event (i.e. the Company has a public offering of common stock (or units consisting of common stock and warrants to purchase common stock), resulting in the listing for trading of the common stock on the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, or the New York Stock Exchange), the notes and any accrued interest automatically convert into common stock. The Liquidity Event Conversion Price is the lesser of (a) $0.09 and (b) the product of (x) the Liquidity Event Price multiplied by (z) 75%. In the event a liquidity event does not occur, the Holder has the option to convert the Notes on the maturity date at a conversion price of $0.09.

In addition to the Notes, the holders received an aggregate 2,700,000 warrants. The warrants have an exercise price of $0.09 per share and have a five-year exercise term.

The Company analyzed the Convertible Bridge Loans to determine if they were within the scope of ASC 480 Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity. The Contract embodies a conditional obligation to transfer a variable number of shares in which the monetary value of the obligation is based solely or predominantly on, among other things, a fixed monetary amount known at inception. Additionally, the obligation is, in substance, a “traditional” debt arrangement, with the stock of the issuer used as the form of currency for repayment. As a result, the instruments are recorded at fair value pursuant to ASC 480-10-30-7. As of June 30, 2023 and 2022, the fair value of the Convertible Bridge Loans was $247,254 and $0, respectively. During the years ended June 30, 2023, and 2022, the Company recorded $10,083 and $0 in interest expense related to these loans, respectively. During the years ended June 30, 2023, and 2022, the Company recorded $57,368 and $0 in decrease in fair value of Convertible Bridge Loans, respectively.

~~The~~In ~~Company~~October ~~evaluated~~2023, the ~~detachable~~holders ~~warrants~~of ~~under~~the convertible bridge loans agreed to modify the ~~requirements~~conversion ofprice ~~ASC~~to ~~480~~a ~~and~~fixed ~~concluded~~$0.01 ~~that~~per share. As a result, the ~~warrants~~loans doare ~~not~~no ~~fall~~longer ~~within~~required ~~the~~to ~~scope~~be ofrecorded pursuant to ASC 480-10-30-7. The Company ~~next~~tested ~~evaluated~~the modification under ASC 470-50-40 to determine if the ~~notes~~modification resulted in an extinguishment. It was determined the present value of the cash flows under the ~~requirements~~terms of ~~ASC~~the ~~815~~new ~~“Derivatives~~debt ~~and~~instrument ~~Hedging”~~was ~~and~~at ~~concluded~~least 10 percent different from the ~~warrants~~present ~~meet~~value ~~equity~~of ~~classification.~~the ~~The~~remaining ~~warrants~~cash ~~were~~flows ~~valued~~under ~~using~~the ~~Black-Scholes~~terms ~~Merton~~of ~~(“BSM”)~~the ~~and~~original ~~were~~instrument. ~~determined~~As toa ~~have~~result, the modification resulted in a ~~value~~loss on an extinguishment in the amount of $8020,~~114~~298 for the year ended June 30, ~~which~~2024. isThe ~~recorded~~loss on extinguishment in the ~~consolidated~~amount ~~statement~~of $20,298 resulted in the loans being marked up from their aggregate fair value of ~~stockholders’~~$249,702 ~~equity~~to their face value of $270,000 and reclassified within the consolidated balance sheets under convertible notes payable.

F-20 Table of Contents

NOTE 8 – CONVERTIBLE NOTES PAYABLE

~~Between~~The ~~May~~carrying ~~13, 2023, and June 28, 2023, the Company issued convertible bridge loans with an aggregate face~~ value of ~~$100,000.~~convertible ~~The~~ notes ~~have~~payable, anet ~~coupon rate~~ of ~~10%~~ ~~and~~discount ~~a maturity date of one year. The Notes are convertible~~ at aJune ~~fixed price of $0.01 per share. Since the Company adopted ASU 2020-06~~30, ~~Accounting~~2024 ~~for Convertible Instruments~~ and ~~Contracts~~2023 ~~in an Entity’s Own Equity, on July 1, 2022, it~~ was ~~not required to determine if the debt contained a beneficial conversion feature (“BCF”). As such, the Note was recorded~~ as ~~straight debt. During the year ended June 30, 2023, the Company recorded $483 in interest expense related to these notes.~~follows:

	June 30,			June 30,
Convertible Notes Payable	2024			2023
Convertible notes payable (10% interest)	$	2,180,000		$	100,000
Less unamortized discount		(47,471	)		-
Total face value	$	2,132,529		$	100,000

Between July 17, 2023 and June 26, 2024, the Company issued convertible bridge loans with an aggregate face value of $2,030,000. 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 years ended June 30, 2024 and 2023, the Company recorded $90,068 and $483 in interest expense related to these notes, respectively.

As mentioned in Note 7, the Company marked up convertible bridge loans from their aggregate fair value of $249,702 to their face value of $270,000 and reclassified within the consolidated balance sheets under convertible notes payable. During the years ended June 30, 2024 and 2023, the Company recorded $23,089 and $0 in interest expense related to these notes, respectively.

During the year ended June 30, 2024, $220,000 in principal and $22,000 in accrued interest was converted into 23,200,000 shares of common stock.

F-21

Table of Contents

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.

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

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

NOTE 9 – FAIR VALUE MEASUREMENTS

The following table presents the fair value hierarchy for the Company’s assets and liabilities measured at fair value on a recurring basis as of June 30, ~~2023~~2024 and ~~2022~~2023:

	June 30, 2023						June 30, 2022
	June 30, 2024						June 30, 2023
Description	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Assets
Convertible Bridge Loans	$	—	$	—	$	~~247,254~~—	$	—	$	—	$	—247,254

Fair values determined by Level 1 inputs utilize unadjusted quoted prices in active markets for identical assets. Level 3 instruments are characterized by unobservable inputs that are supported by little or no market activity, which require management judgment or estimation. The fair value of the Convertible Bridge Loans ~~have~~has three components: (i) principal, (ii) interest, and (iii) a redemption feature. The first two components (i.e. principal and interest) were valued using an income approach. For the ~~Redemption~~redemption ~~Feature~~feature, the Company uses a Black-Scholes Merton (“BSM”) valuation technique because it believes that this technique is reflective of all significant assumption types, and ranges of assumption inputs, that market participants would likely consider in transactions involving this component. Such assumptions include market price, strike price, term, market trading volatility and risk-free rates.

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

	Inception Dates	~~Year Ended~~
Quoted market price on valuation date	$0.027 - $0.05	$	~~0.024~~
Effective contractual conversion rates	$0.09 - $0.012	$	~~0.09~~
Contractual term to maturity	0.4 -1 year	~~0.25 – 0.75 year~~
Market volatility:
Volatility	115% - 135%	~~93.58% - 105.56%~~
Risk-adjusted interest rate	4.32% - 5.14%	~~5.40% – 5.47%~~

F-2122 Table of Contents

The following table summarizes the total carrying value of the Company’s Level 3 instruments held as of June 30, ~~2023~~2024, including cumulative unrealized gains and losses recognized during the years ended June 30, ~~2023~~2024 and ~~2022~~2023:

	Period Ended
	Year Ended June 30,			Year Ended June 30,
	June 30,
	2024			2023
	2023			2022
Balances at beginning of period	$	247,254		$	-
Balances at beginning of period	$	-		$	-
Issuances:
Convertible Bridge Loans		~~189,886~~-			-189,886
Changes in fair value inputs and assumptions reflected in income		572,~~368~~448			-57,368
Balances at end of period	$	247,254		$	-
Reclassified from fair value to straight debt		(249,702	)		-
Balances at end of period	$	-		$	247,254

NOTE 10 – RELATED PARTY TRANSACTIONS

Consulting fees

During the years ended June 30, ~~2023~~2024 and ~~2022~~2023, the Company recorded $~~170~~207,~~000~~500 and $~~184~~180,000 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, ~~2023~~2024 and ~~2022~~2023, $105,000 and $1510,000 was ~~recorded in~~ accrued, ~~liabilities respectfully~~respectively.

For the years ended June 30, ~~2023~~2024 and ~~2022~~2023, the Company recorded $~~102~~78,~~000~~500 and $~~122~~92,000 respectively, in consulting fees to Edward DeFeudis, a Director of the Company. As of June 30, ~~2023~~2024 and ~~2022~~2023, $510,000 and $05,000 was ~~recorded in~~ accrued ~~liabilities respectfully~~.

During the years ended June 30, ~~2023~~2024 and ~~2022~~2023, the Company recorded $5667,000 and $8656,000 respectively, in consulting fees to AMP Web Services, a Company owned by the Company’s CTO, Pablo Lavigna. As of June 30, ~~2023,~~2024 and ~~2022~~2023, $0 ~~and $7,000~~ was ~~recorded in~~ accrued ~~liabilities respectfully~~.

During the years ended June 30, ~~2023~~2024 and ~~2022~~2023, the Company recorded $2535,000 and $4025,~~425~~000 respectively, in consulting fees to Keystone Business Development Partners, a Company owned by the Company’s CFO, Brian Carey. As of June 30, ~~2023~~2024 and ~~2022~~2023, $5,000 ~~and $0~~ was ~~recorded in~~ accrued ~~liabilities respectfully~~.

The above amounts and terms are not necessarily what third parties would agree to.

NOTE 11 – 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.

F-22 Table of Contents

Financial Advisory Agreements

On August 10, 2021, the Company entered into an Advisory Agreement with an outside firm to assist the Company with fundraising activities. In connection with the agreement, the Company has the following commitments:

· Issue 500,000 shares payable at the date of the agreement, 500,000 shares payable three months from the date of the agreement, 500,000 shares payable nine months from the date of the agreement. · Pay a financing fee of 1.5% of gross proceeds received by the Company up to $100,000,000; a financing fee of 1.25% of gross proceeds received by the Company from $100,000,000-$200,000,000, and a financing fee of 1% of gross proceeds received by the Company over $200,000,000. · M&A fee of 1.5% of the value of a business or asset sold up to $50,000,000; an M&A fee of 1.25% of value of a business or asset sold from $50,000,000-$100,000,000, an M&A fee of 1% of value of a business or asset sold from $100,000,000-$200,000,000, and an M&A fee of 0.5% of value of a business or asset sold over $200,000,000.

During the year ended June 30, 2022, the Company issued all 1,500,000 shares under the agreement.

On August 19, 2021, the Company entered into an Advisory Agreement with an outside firm to assist the Company with fundraising activities. In connection with the agreement, the Company has the following commitments:

· Issue 2,225,000 common shares payable at the date of the agreement, and 2,225,000 common shares payable upon an uplisting of the Company’s common stock to a national exchange. · Pay a cash fee of seven percent 7% of the amount of capital raised, invested or committed; and deliver a warrant (the “Agent Warrant”) to purchase shares of the common stock equal to seven percent (7%) of the number of shares of common stock underlying the securities issued in the Financing. · Pay a cash fee for entering into a transaction including, without limitation, a merger, acquisition or sale of stock or assets equal to one- and one-half percent (1.5%), or in the event a transaction is consummated with a party that was in communication with the Company prior to the date of this contract, then the fee shall equal one half percent (0.5%).

During the year ended June 30, 2022, the Company issued the initial 2,225,000 shares. There were no additional shares issued during the fiscal year ended June 30, 2023.

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 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% finders fee.

F-23

Table of Contents

On July 61, 2021, ~~provided~~the anCompany ~~option~~agreed to ~~purchase~~issue 5to an advisor 100,000~~,000~~ common shares, atand $~~0.12~~2,500 per ~~share,~~meeting ~~vesting~~paid ~~quarterly~~in ~~over~~cash, 24common ~~months~~shares, or a combination, an additional bonus of ~~250~~ $25,000 paid in common shares issued ~~upon~~at athe ~~strategic~~end ~~partnership~~of ~~with~~each ayear ~~major~~of ~~airline~~service, $2an option to purchase 5,~~500~~000,000 common shares at $0.12 per ~~formal~~share, ~~meeting~~vesting ~~paid~~quarterly inover ~~common~~24 ~~shares~~months, and for each of the following three years (beginning July 1, 2022), an ~~additional~~option ~~bonus~~to ofpurchase ~~$25~~an additional 1,000,000 ~~paid in~~ common shares ~~issued~~per year thereafter at a 25% discount to the ~~end~~average ofmarket ~~each~~price ~~year~~for ofthe ~~service~~preceding 10 trading days. The agreement also provides for a 1% finder’s fee.

On July 286, 2021, the Company ~~agreed~~provided toan ~~issue 250,000 common~~option ~~shares~~to ~~immediately,~~ an ~~option~~advisor to purchase 5,000,000 common shares at $0.12 per share, vesting quarterly over 24 months, a bonus of 5250,000~~,000~~ common shares ~~for~~issued ~~bringing~~upon in a strategic ~~partner~~partnership ~~that~~with ~~significantly~~a ~~strengthens~~major ~~the Company’s market position~~airline, $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. Advisory ~~The~~ agreement ~~also~~is ~~provides~~open ~~for~~ended aand ~~30%~~can ~~commission~~be terminated by consent of both parties upon written notice.

On ~~August~~July 928, 2021, the Company agreed to issue to an advisor 50250,000 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 ~~first~~Company’s ~~year~~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 both parties upon written notice.

On August 209, 2021, the Company agreed to issue to an advisor ~~100~~50,000 common shares, ~~and~~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,. anAdvisory ~~option~~agreement tois ~~purchase 4,000,000 common~~open ~~shares~~ended atand ~~$0.12 per~~can ~~share,~~be ~~vesting~~terminated ~~quarterly~~by ~~over~~consent 24of ~~months~~both parties upon written notice.

On ~~March~~August 120, ~~2022~~2021, the Company agreed to issue to an advisor ~~150~~100,000 common shares, ~~vesting~~and ~~monthly over one year,~~ $2,500 per meeting paid in cash, ~~and~~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 both parties upon written notice.

On ~~January~~March 201, 2022, the Company agreed to issue to an advisor 150,000 common shares vesting monthly over one year, ~~and~~ $2,500~~.00~~ 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 both parties upon written notice.

On ~~March~~January 20, 2022, the Company agreed to issue to an advisor 150,000 common shares vesting monthly over one year, and $2,500~~.00~~ 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 both parties upon written notice.

~~There~~On ~~were~~March no20, 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 ~~Advisory~~bonus ~~Agreements~~of ~~executed~~$25,000 paid ~~during~~in common shares issued at the ~~fiscal~~end of each year of service. Advisory agreement is open ended ~~June~~and ~~30,~~can ~~2023~~be terminated by consent of both parties upon written notice.

There were no Advisory Agreements executed during the years ended June 30, 2024.and June 30, 2023

F-24

Table of Contents

NOTE 12 – EQUITY

Common Stock

As of June 30, ~~2023~~2024 and ~~2022~~2023, the Company had 5,000,000,000 shares of common stock authorized with a par value of $0.00001. There were ~~389~~524,~~433~~853,~~144~~304 and ~~365~~389,~~239~~433,~~001~~144 shares issued and outstanding as of June 30, ~~2023~~2024 and ~~2022~~2023, respectively.

~~Fiscal~~During ~~Year~~the ~~2022~~year ~~Issuances~~ended June 30, 2024, the Company issued 51,500,000 shares of common stock in exchange for the conversion of 51,500 shares of Series A Preferred Stock.

During the year ended June 30, ~~2022~~2024, $220,000 in ~~connection~~principal ~~with~~and ~~one of the subscription agreements~~$22, ~~the Company issued 250,~~000 ~~shares~~ asin anaccrued ~~equity~~interest ~~kicker~~was ~~valued~~converted atinto ~~$43~~23,~~753~~200,000 ~~which~~shares ~~has~~of ~~been~~common ~~expensed as financing costs~~stock.

During the year ended June 30, ~~2022~~2024, ~~the~~Auctus ~~Company~~converted ~~issued 4~~$427,~~308,600 shares~~182 ofin ~~common~~interest ~~stock~~into as42,718,200 ashares ~~result~~ of ~~warrant~~common ~~exercises in the aggregate proceeds of $128,550~~stock.

During the year ended June 30, 2022, the Company issued 4,685,615 shares of common stock for services, valued at $761,954.

During the year ended June 30, 2022, the Company sold 39,366,666 shares of common stock for aggregate proceeds of $2,078,501.

During the year ended June 30, 2022, the Company issued 7,138,000 shares of common stock in exchange for the conversion of 7,138 shares of Series A Preferred Stock.

During the year ended June 30, 2022, the Company issued 10,598,544 shares of common stock for the conversion of $167,550 in principal and $4,984 in accrued interest. This resulted in a loss on extinguishment of debt in the amount of $536.

F-24 Table of Contents

During the year ended June 30, 2022, the Company issued 4,229,680 shares of common stock for the conversion of $250,000 principal balance of convertible notes payable and $3,749 accrued interest.

During the year ended June 30, 2022, the Company issued 845,936 shares of common stock in exchange for the inducement to the convertible notes holders to convert at fair value of $134,929.

Fiscal Year 2023 Issuances

During the year ended June 30, 2023, the Company issued 1,000,000 shares of common stock in exchange for the conversion of 1,000 shares of Series A Preferred Stock.

During the year ended June 30, 2023, the Company issued 457,143 shares to a consultant for services valued at $48,000.

During the year ended June 30, 2023, the Company issued 10,237,000 shares of common stock in exchange for the conversion of 10,237 shares of Series A preferred stock.

During the year ended June 30, 2023, the Company issued 5,000,000 shares of common stock in exchange for the conversion of 500 shares of Series A preferred stock.

During the year ended June 30, 2023, the Company issued 7,500,000 shares of common stock in exchange for the conversion of 7,500 shares of Series A preferred stock.

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:

· Voting: The preferred shares shall be entitled to 1,000 votes to every one share of common stock. · Dividends: 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. · Conversion: 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 at any time after September 30, 2022 upon not less than 30 days written notice to the holders. It is not mandatorily redeemable.

As of June 30, ~~2023~~2024 and ~~2022~~2023, the Company had ~~757~~705,~~395~~895 and ~~781~~757,~~132~~395 shares of Series A preferred stock issued and outstanding, respectively.

F-25 Table of Contents

On July 11, 2022, the Company issued 1,000,000 shares of common stock in exchange for the conversion of 1,000 shares of Series A preferred stock.

On October 24, 2022, the Company issued 10,237,000 shares of common stock in exchange for the conversion of 10,237 shares of Series A preferred stock.

On March 17, 2023, the Company issued 5,000,000 shares of common stock in exchange for the conversion of 5,000 shares of Series A preferred stock.

On May 26, 2023, the Company issued 7,500,000 shares of common stock in exchange for the conversion of 7,500 shares of Series A preferred stock.

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.

Stock Options

In connection with certain advisory board compensation agreements, the Company issued an aggregate 21,250,000 options at an exercise price of $0.12 per share for the year ended June 30, 2022. These options vest quarterly over twenty-four months and have a term of three years. The grant date fair value was $3,964,207. The Company recorded compensation expense in the amount of $~~702,116~~0 and $3702,~~248,181~~116 for these options for the years ended June 30, ~~2023~~2024 and ~~2022~~2023, respectively. As of June 30, ~~2023~~2024, there was $0 of total unrecognized compensation cost related to non-vested portion of options granted.

AsF-25 ofTable ~~June 30, 2023, there are 21,250,000 options outstanding,~~ of ~~which 20,687,500 are exercisable. The weighted average remaining term is 1.11 years.~~Contents

F-26 Table of Contents

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

	Number of Options		Weighted-Average Exercise Price		Weighted-Average Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding at June 30, 2021		-		-
Outstanding at June 30, 2022		21,250,000	$	0.12		1.80
Granted		~~21,250,000~~-	$	~~0.12~~
Exercised		-		-
Canceled		-		-
Outstanding at June 30, 2022		21,250,000	$	0.12		2.1
Outstanding at June 30, 2023		21,250,000	$	0.12		0.97
Granted		-
Exercised		-		-
Canceled		-		-
Outstanding at June 30, 2023		21,250,000	$	0.12		1.11	$	-
Outstanding at June 30, 2024		21,250,000	$	0.12		0.13	$	-
Exercisable at June 30, 2023		20,687,500	$	0.12		1.11	$	-
Exercisable at June 30, 2024		21,250,000	$	0.12		0.13	$	-

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

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%

F-26

Table of Contents

Warrants

As of June 30, ~~2023,~~2024 and ~~2022~~2023, the Company had ~~104~~118,~~802~~968,~~161~~ 828 and 55 104,~~512~~802,161 warrants outstanding, respectively. The warrants have a term of two to five years and an exercise price range from $0.~~021~~01 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. ~~During~~The ~~the year ended June 30, 2022, holders of~~ warrants ~~exercised~~are ~~warrants~~detailed ~~for 4,308,600 shares~~as offollows: ~~common stock for aggregate proceeds of $128,550. As of June 30, 2023, the weighted average remaining useful life of the warrants was 3.79.~~

	Number of Options			Weighted- Average Exercise Price		Weighted- Average Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding at June 30, 2022		55,512,161		$	0.11		4.70
Granted		52,700,000		$	0.0865		5.00
Exercised		-			-
Canceled		(3,410,000	)		-
Outstanding at June 30, 2023		104,802,161		$	0.11		3.79
Granted		15,000,000		$	0.01		3.00
Exercised		-			-
Canceled		(833,333	)		-
Outstanding at June 30, 2024		118,968,828		$	0.09		2.50	$	-
Exercisable at June 30, 2024		118,968,828		$	0.09		2.50	$	-

F-27

Table of Contents

AsNOTE of13 ~~June~~– ~~30,~~INCOME ~~2023 and 2022, the Company had 104,802,161 and 55,512,161 warrants outstanding respectively. The warrants are detailed as follows:~~ TAXES

Number of Warrants	Number of Warrants			Weighted-Average Exercise Price		Weighted-Average Contractual Term(in years)		Aggregate Intrinsic Value
Outstanding at June 30, 2021		8,848,333		$	0.0300		0.94	$	-
Granted		50,968,828		$	0.1187		4.6	$	-
Exercised		(4,305,000	)
Canceled		-
Outstanding at June 30, 2022		55,512,161		$	0.1110
Granted		52,700,000		$	0.0865		5.003
Exercised		-
Canceled		(3,410,000	)
Outstanding at June 30, 2023		104,802,161		$	0.1015		3.791	$	-
Vested and expected to vest at June 30, 2023		104,802,161		$	0.1015		3.7905	$	-
Exercisable at June 30, 2023		104,802,161		$	0.1015		3.7905	$	-

The Company accounts for income taxes in accordance with the provisions of FASB ASC 740, Accounting for Uncertainty in Income Taxes. Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The current effective tax rate is 21%.

~~NOTE~~At 13June -30, ~~NON-CONTROLLING~~2024 ~~INTEREST~~and 2023, the significant components of the deferred tax assets are summarized below:

None

	June 30,			June 30,
	2024			2023

Net operating loss carry-forward	$	8,112,065		$	7,460,414
Valuation Allowance		(8,112,065	)		(7,460,414	)
Net Deferred Tax Asset (Liability)	$	-		$	-

~~NOTE~~The 14Company –periodically ~~INCOME~~evaluates ~~TAXES~~the likelihood of the realization of deferred tax assets and adjusts the carrying amount of the deferred tax assets by the valuation allowance to the extent the future realization of the deferred tax assets is not judged to be more likely than not. The Company considers many factors when assessing the likelihood of future realization of its deferred tax assets, including its recent cumulative earnings experience by taxing jurisdiction, expectations of future taxable income or loss, the carryforward periods available to the Company for tax reporting purposes, and other relevant factors. The change in valuation was $651,651 and $1,600,005 for the years ending June 30, 2024 and 2023, respectively.

~~The~~Future ~~Company~~changes ~~accounts for income taxes~~ in ~~accordance with~~ the ~~provisions~~unrecognized oftax ~~FASB~~benefit ~~ASC~~will ~~740,~~have ~~Accounting~~no ~~for~~impact ~~Uncertainty in Income Taxes. Deferred taxes are provided~~ on athe ~~liability~~effective ~~method whereby deferred~~ tax ~~assets~~rate ~~are~~due ~~recognized~~to ~~for~~the ~~deductible~~existence ~~temporary~~of ~~differences~~the ~~and~~valuation ~~operating~~allowance. ~~loss~~The ~~and~~Company ~~tax~~estimates ~~credit~~that ~~carry~~the ~~forwards~~unrecognized ~~and deferred~~ tax ~~liabilities~~benefit ~~are~~will ~~recognized~~not ~~for~~change ~~taxable~~significantly ~~temporary~~within ~~differences. Temporary differences are~~ the ~~differences~~next ~~between~~twelve ~~the~~months. ~~reported~~The ~~amounts~~Company ofwill ~~assets~~continue ~~and~~to ~~liabilities~~classify ~~and~~income ~~their~~ tax ~~bases.~~penalties ~~Deferred~~and ~~tax~~interest ~~assets~~as ~~are~~part ~~reduced~~of bygeneral aand ~~valuation~~administrative ~~allowance~~expenses ~~when,~~ in ~~the~~its ~~opinion~~consolidated ofstatements ~~management, it is more likely than not that some portion or all~~ of ~~the deferred tax assets will not be realized~~operations. ~~Deferred~~There ~~tax~~were ~~assets~~no ~~and~~interest ~~liabilities~~or ~~are~~penalties ~~adjusted~~accrued ~~for~~as ~~the effects~~ of ~~changes~~June in30, ~~tax laws and rates on the date of enactment~~2024.

NOTE 14 – SUBSEQUENT EVENTS

Stock Issuances

Subsequent to June 30, 2024, the Company issued 26,950,000 additional shares of common stock for conversion of convertible notes with a total face value of $245,000 and accrued interest of $24,500.

Subsequent to June 30, 2024, the Company issued 11,982,182 additional shares of common stock for compensation for services rendered with a total of $225,000.

F-28

Table of Contents

At June 30, 2023 and 2022, the significant components of the deferred tax assets are summarized below:

	June 30,			June 30,
	2023			2022
Net operating loss carry-forward	$	7,460,414		$	5,860,409
Valuation Allowance		(7,460,414	)		(5,860,409	)
Net Deferred Tax Asset (Liability)	$	-		$	-

The Company periodically evaluates the likelihood of the realization of deferred tax assets and adjusts the carrying amount of the deferred tax assets by the valuation allowance to the extent the future realization of the deferred tax assets is not judged to be more likely than not. The Company considers many factors when assessing the likelihood of future realization of its deferred tax assets, including its recent cumulative earnings experience by taxing jurisdiction, expectations of future taxable income or loss, the carryforward periods available to the Company for tax reporting purposes, and other relevant factors.

Future changes in the unrecognized tax benefit will have no impact on the effective tax rate due to the existence of the valuation allowance. The Company estimates that the unrecognized tax benefit will not change significantly within the next twelve months. The Company will continue to classify income tax penalties and interest as part of general and administrative expenses in its consolidated statements of operations. There were no interest or penalties accrued as of June 30, 2023.

NOTE 15 – SUBSEQUENT EVENTS

On August 7, 2023, the Company established a wholly owned subsidiary, BlueGreen Composites, LLC, to better manage the business operations of the green building products business line. As of the date of this filing, no bank account was opened, no contracts or agreements were executed, and no business operations were undertaken.

On July 30, 2023, we filed the trademark BlueGreen for ecofriendly composite building products and “Durever” for the same categories on July 31, 2023.

From July 1, 2023, through October 12, 2023, a total of $461,000 in convertible notes were issued.

F-29 Table of Contents

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Effective ~~August~~July 318, ~~2023~~2024, ~~the Company engaged~~ Accell Audit &and Compliance, ~~PA, replacing BF Borgers CPA~~ P.CA. (“Accell”) resigned as the Company’s independent registered ~~public~~ accounting firm. ~~The~~Accell ~~engagement~~advised the Company that it was ~~approved~~ceasing byto provide PCAOB audit services, and that certain of the audit principals of Accell were now a part of Astra Audit and Advisory, LLP (“Astra”). Accell issued the auditor’s report on the Company’s financial statements for the fiscal years ended June 30, 2023 and 2022. Effective July 17, 2024, the Board of Directors of the Company approved the appointment of Astra as its independent registered public accountant. A Form 8-K was filed by the company as of July 8, 2024.

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, ~~2023~~2024, 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, ~~2023~~2024, 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.

Table of Contents

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, ~~2023~~2024. 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, with the exception of one incident noted below, 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. As noted above, there was an incident in which a necessary adjustment of approximately $145,000 was necessary to correct a calculation error related to the valuation of stock issued for advisory board member services, which is now accurately reflected in the consolidated financial statements. The Company utilizes a public company financial reporting qualified CPA to review its financial reporting on a quarterly and annual basis and has implemented additional procedures to substantially reduce the likelihood of such an error occurring in the future.

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, ~~2023~~2024, that have materially affected, or are reasonable likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

None.

41Item ~~Table~~9C. ofDisclosures ~~Contents~~Regarding Foreign Jurisdictions that Prevent Inspections

~~PART~~Not ~~III~~applicable.

Table of Contents

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:

Name	Age	Position
Keith Duffy	6263	Chairman of the Board and CEO
Scott Duffy	6263	Executive Director
Edward C. DeFeudis	5051	Director
Pablo Lavigna	5253	Chief Information Officer
Brian Carey	6162	Chief Financial Officer

Keith Duffy, Chairman of the Board and CEO

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 ~~and established the relationship with Florida Atlantic University (FAU), preparing the white paper that was presented to the Research Park at FAU Authority~~. 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.

Scott M. Duffy, Executive Director, Corporate Operations

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.

Table of Contents

Edward C. DeFeudis, Director

Mr. DeFeudis is a venture investor and serial entrepreneur spanning multiple industries. His investments focus on late seed, bridge, and Series A rounds. He understands complex disruptive technology and enjoys finding rare opportunities that create first mover advantage. Mr. DeFeudis is a financial professional who has served on the executive management team and board of directors of several early-stage companies. He has structured and secured multiple financings while serving as point person to investors, funds, and investments banks, which has led to hundreds of millions of dollars in capital formation. He is extremely detail oriented and understands complex legal positioning.

Pablo Lavigna, Chief Information Officer

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.

Brian Carey, Chief Financial Officer

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 ~~was~~started ~~the~~Palm ~~owner~~Beach ~~and~~Business ~~manager~~Development ofGroup, ~~BCGR Tax and Financial Services~~LLC. This company ~~also~~ 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.

Table of Contents

Director Independence

Director Independence; Standing Committees

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.

Board Leadership Structure and Role in Risk Oversight

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.

Family Relationships

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

Board Committees

Audit Committee

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, ~~2023~~2024.

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.

Table of Contents

Item 11. Executive Compensation.

For the ~~years~~year ended June 30, ~~2023~~2024, 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, ~~2023~~2024 and ~~2022~~2023 by our named executive officers:

EXECUTIVE COMPENSATION TABLE

Executive	Year	Salary($)		Bonus($)		Stock Awards ($)		Option Awards ($) (1)		Non-Equity Incentive Plan Compensation ($)		Non-Qualified Deferred Compensation Earnings ($)		All Other Compensation ($)		Total($)
Keith Duffy (1)	~~2023~~2024	$	85103,~~000~~750		-		-		-		-		-		-	$	85103,~~000~~750
	2022	$	92,000		-		-		-		-		-		-	$	92,000
	2023	$	85,000		-		-		-		-		-		-	$	85,000
Scott Duffy (1)	~~2023~~2024	$	85103,~~000~~750		-		-		-		-		-		-	$	85103,~~000~~750
	2022	$	92,000		-		-		-		-		-		-	$	92,000
	2023	$	85,000		-		-		-		-		-		-	$	85,000
Pablo Lavigna (2)	~~2023~~2024	$	5667,000		-		-		-		-		-		-	$	5667,000
	2022	$	86,000		-		-		-		-		-		-	$	86,000
	2023	$	56,000		-		-		-		-		-		-	$	56,000
Brian Carey (3)	~~2023~~2024	$	25,000		-		-		-		-		-		-	$	25,000
	2022	$	40,425		-		-		-		-		-		-	$	40,425
	2023	$	35,000		-		-		-		-		-		-	$	35,000

	(1)	Paid as consulting fees for the years ended June 30, ~~2023,~~2024 and ~~2022~~2023 to Ancient Investments, LLC, a company owned by Keith Duffy, CEO and Scott Duffy, Executive Director of Operations. The Company recorded $105,000 in accrued liabilities related to unpaid compensation for Keith Duffy, for the year ended June 30, ~~2023~~2024.
	(2)	Paid as consulting fees for the years ended June 30, ~~2023,~~2024 and ~~2022~~2023 to AMP Web Services, LLC, a company owned by Pablo Lavigna, CIO.
	(3)	Paid as consulting fees for the years ended June 30, ~~2023,~~2024 and ~~2022~~2023 to Keystone Business Development Partners, LLC, a company owned by Brian Carey, CFO. The Company recorded $5,000 in accrued liabilities related to unpaid compensation for Brian Carey, for the year ended June 30, ~~2023~~2024.

Table of Contents

Director Compensation

The following table shows information regarding the compensation earned during the years ended June 30, ~~2023~~2024, and ~~2022~~2023 by the members of our board of directors.

DIRECTOR COMPENSATION TABLE

Executive

Year

Salary ($)

Bonus($)

Stock Awards ($)

Option Awards($) (1)

Non-Equity Incentive Plan Compensation ($)

Non-Qualified Deferred Compensation Earnings ($)

All Other Compensation ($)

Total($)

Keith Duffy

~~2023~~2024

Director

~~2022~~2023

Scott Duffy

~~2023~~2024

Director

~~2022~~2023

Edward C. DeFeudis (1)

~~2023~~2024

~~102~~78,~~000~~500

Director

~~2022~~2023

~~122~~102,000

(1) Paid as consulting fees for the years ended June 30, ~~2023~~2024, and ~~2022~~2023 to Edward C. DeFeudis, a member of the board of directors. The Company recorded $510,000 in accrued liabilities related to unpaid compensation for Edward DeFeudis, for the year ended June 30, ~~2023~~2024.

Executive Compensation Policies as They Relate to Risk Management

Management ~~have~~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, ~~2023~~2024, or held any outstanding stock options as of June 30, ~~2023~~2024.

Table of Contents

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, ~~2023~~2024, information with respect to beneficial ownership of the Company’s common stock by:

	·	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, ~~2023~~2024, 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.

	Number of Shares of Common Stock		Number of Series A Preferred Stock		Total Fully Diluted Shares		Percentage Represented on a Fully Diluted Basis
Name of Beneficial Owner
Micha Holdings, LLC (1)		-		9257,000		9257,000,000		84.0263	%
Ancient Investments, LLC (2)		-		200,000		200,000,000		1716.4425	%
Basil Consulting, LLC (3)		75,~~500~~000,000		89,362		9694,~~862~~362,000		87.4567	%
Christopher Sawchuk		2116,~~927~~890,~~637~~791		100,000		~~121~~116,~~927~~890,~~637~~791		109.6350	%
Spider Investments, LLC (4)		2250,~~667,130~~000		7780,~~000~~333		7980,~~667~~583,~~130~~000		6.7455	%
Pablo Lavigna (5)		13,454,545		-		13,454,545		1.1709	%
Brian Carey (6)		203,025		-		203,025		0.02	%
All directors and executive officers as a group (four persons)		1613,~~324~~907,~~700~~570		-		~~290~~294,~~907~~240,570		2523.3691	%
Total shares		~~389~~524,~~443~~853,~~144~~304		~~757~~705,~~395~~895		1,~~146~~230,~~828~~748,~~144~~304

(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)	Edward C. DeFeudis is a Director of the Company and has control and dispositive power over Spider Investments, LLC and is the beneficial owner of Spider Investments, LLC.
(5)	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.
(6)	Brian Carey is the Chief Financial Officer of the Company.

Table of Contents

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 BF Borgers CPA, PC, and Accell Audit & Compliance, PA, for professional services rendered for the fiscal year ended June 30, ~~2023~~2024 and ~~2022~~2023:

	Fiscal Year Ended
	June 30, 2023		June 30, 2022
	June 30, 2024		June 30, 2023
Audit Fees	$	~~132~~114,~~205~~480	$	64132,~~300~~205
Audit Related Fees		-		-
Tax Fees		-		-
All Other Fees		-		-
	$	~~132~~114,~~205~~480	$	64132,~~300~~205

Audit Fees. 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.

Audit Related Fees. 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”.

Table of Contents

Tax Fees. 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.

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

Board of Directors' Pre-Approval Policies

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”) and Accell Audit & Compliance, PA (“Accell”) our audited consolidated financial statements contained in this Annual Report on Form 10-K for the fiscal years ended June 30, ~~2023~~2024 and ~~2022~~2023, respectively. The Board of Directors also has discussed with ~~Accell~~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, ~~2023~~2024, for filing with the SEC.

Table of Contents

PART IV

Item 15. Exhibits, Financial Statement Schedules

Exhibit Number		Document

3.1		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.

3.2		Bylaws of Eastern World Solutions, Inc. (incorporated by reference to Exhibit 3.2 to Current Report on Form S-1 dated January 25, 2010.

3.3		Certificate of Designation of Series A Preferred shares effective September 30, 2019.

3.4		Certificate of Designation of Series B Preferred shares effective February 22. 2021.

10.1		Exchange Agreement by and among Banjo & Matilda, Inc. American Aviation Technologies, LLC, and the Members of American Aviation Technologies, LLC (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on April 23, 2019.

10.2		Employment Agreement for Keith Duffy dated February 19, 2021 (incorporated by reference to Exhibit 10.6 to Current Report on Form 10-K/A dated October 15, 2021).

10.3		Joint Venture Agreement dated May 31, 2021, by and between Xeriant, Inc. and XTI Aircraft (incorporated by reference to Exhibit 2.1 to Current Report on Form 8-K filed on June 9, 2021, with redactions).

10.4		Senior Secured Promissory Note (incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K filed on November 4, 2021).

10.5		Warrant (incorporated by reference to Exhibit 4.2 to Current Report on Form 8-K filed on November 4, 2021).

10.6		Security Agreement (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on November 4, 2021).

10.7		Amendment to Secured Promissory Note (incorporated by reference to Current Report on Form 8-K filed on August 3, 2022).

10.8		Joint Venture Agreement dated as of April 2, 2022 between Xeriant Inc. and Movychem S.R.O. (incorporated by reference to Exhibit 10.1 to the Form 10--Q filed on May 16, 2022).

10.9		Patent and Exclusive License Agreement between Movychem S.R.O. and (incorporated by reference to Exhibit 10.2 to the Form 10--Q filed on May 16, 2022).

10.10		Services Agreement between Ebenberg, LLC and Xeriant, Inc. dated as of April 2, 2022 (incorporated by reference to Exhibit 10.3 to the Form 10-Q filed on May 16, 2022).

14.1		Code of Ethics (incorporated by reference to Exhibit 14.1 to the Form 10-K filed on February 15. 2011.

31.1		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.

31.2		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.

32.1		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.

32.2		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.

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)

50Item ~~Table~~16. ofForm ~~Contents~~10-K Summary

~~SIGNATURES~~None.

In50 ~~accordance~~Table ~~with the requirements~~ of ~~the Exchange Act, the Company caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.~~Contents

	XERIANT, INC.
Date: October 16, 2023	By:	/s/ Keith Duffy
		Keith Duffy
		Chief Executive Officer (Principal Executive)
Date: October 16, 2023	By:	/s/ Brian Carey
		Brian Carey
		Chief Financial Officer

SIGNATURES

Date: October 16, 2023	By:	/s/ Scott Duffy
		Scott Duffy
		Executive Director, Corporate Operations
Date: October 16, 2023	By:	/s/ Edward DeFeudis
		Edward DeFeudis
		Director

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.

	XERIANT, INC.

Date: October 8, 2024	By:	/s/ Keith Duffy
		Keith Duffy
	Title:	President and Chief Executive Officer (Principal Executive)

Date: October 8, 2024	By:	/s/ Brian Carey
		Brian Carey
	Title:	Chief Financial Officer

Date: October 8, 2024	By:	/s/ Scott Duffy
		Scott Duffy
	Title:	Executive Director, Corporate Operations

Date: October 8, 2024	By:	/s/ Edward DeFeudis
		Edward DeFeudis
	Title:	Director

Filing Compare · XERIANT, INC.