Xeriant (XERI) 10-Q 2025 Q2 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

☒     Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended December 31, 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.)
3651 FAU Blvd., Suite 400 Boca Raton, Florida	33431
(Address of principal executive offices)	(Zip code)

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol	Name of exchange on which registered
N/A	N/A	N/A

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 such files). Yes ☒     No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, and an “emerging growth 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 13(a) of the Securities Act. ☐

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of February 13, 2025, the Registrant had outstanding 658,568,559 shares of common stock.

XERIANT, INC.

FORM 10-Q

TABLE OF CONTENTS

		Page
Special Note regarding Forward-looking Statements			3
PART I – Financial Information
Item 1.	Condensed Consolidated Financial Statements (Unaudited)		F-1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		4
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		10
Item 4.	Controls and Procedures		10
PART II – Other Information
Item 1.	Legal Proceedings		11
Item 1A.	Risk Factors		11
Item 2.	Unregistered Sales of Equity Securities		11
Item 3.	Defaults Upon Senior Securities		11
Item 4.	Mine Safety Disclosures		11
Item 5.	Other Information		11
Item 6.	Exhibits		12
Signatures			13

2

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This document contains certain statements of a forward-looking nature. Such forward-looking statements, including but not limited to statements regarding projected growth, trends and strategies, future operating and financial results, financial expectations and current business indicators are based upon current information and expectations and are subject to change based on factors beyond the control of the Company. Forward-looking statements typically are identified by the use of terms such as “look,” “may,” “should,” “might,” “believe,” “plan,” “expect,” “anticipate,” “estimate” and similar words, although some forward-looking statements are expressed differently. The accuracy of such statements may be impacted by a number of risks and uncertainties that could cause actual results to differ materially from those projected or anticipated, including but not limited to those set forth herein and in our Annual Report on Form 10-K.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Except as required by the federal securities laws, we undertake no obligation to update forward-looking information. Nonetheless, the Company reserves the right to make such updates from time to time by press release, periodic report or other method of public disclosure without the need for specific reference to this Report. No such update shall be deemed to indicate that other statements not addressed by such update remain correct or create an obligation to provide any other updates.

3

PART I – FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial statements

XERIANT, INC.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

(UNAUDITED)

INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Condensed Consolidated Balance Sheets as of December 31, 2024 (Unaudited) and June 30, 2024	F-2
Condensed Consolidated Statements of Operations for the three and six months ended December 31, 2024 and 2023 (Unaudited)	F-3
Condensed Consolidated Statements of Stockholders’ Deficit for the three and six months ended December 31, 2024 and 2023 (Unaudited)	F-4
Condensed Consolidated Statements of Cash Flows for the six months ended December 31, 2024 and 2023 (Unaudited)	F-6
Notes to Unaudited Condensed Consolidated Financial Statements	F-7

F-1

XERIANT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
	As of			As of
	December 31, 2024			June 30, 2024
Assets
Current assets
Cash	$	254,195		$	653,117
Prepaids		14,427			2,931
Note receivable		-			8,163
Total current assets		268,622			664,211
Deposits		-			12,546
Property & equipment, net		3,239			3,995
Operating lease right-of-use asset		4,738			32,253
Total assets	$	276,599		$	713,005
Liabilities and stockholders' deficit
Current liabilities
Accounts payable and accrued liabilities	$	927,381		$	1,211,533
Accrued liabilities, related party		12,500			20,000
Shares to be issued		25,000			75,200
Convertible notes payable, net of discount - in default		5,900,000			5,850,000
Convertible notes payable, net of discount		2,095,803			2,132,529
Lease liability, current		5,392			36,197
Total liabilities		8,966,076			9,325,459
Commitments and contingencies (Note 9)
Stockholders' deficit
Series A Preferred stock, $0.00001 par value; 100,000,000 authorized; 3,500,000 designated; 682,216 and 705,895 shares issued and outstanding at December 31, 2024 and June 30, 2024, respectively		7			7
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; 606,379,671 and 524,853,304 shares issued and outstanding at December 31, 2024 and June 30, 2024, respectively		6,064			5,248
Common stock to be issued		97,900			51,950
Additional paid in capital		21,564,889			20,899,187
Accumulated deficit		(27,483,811	)		(26,708,915	)
Total stockholders' deficit		(5,814,941	)		(5,752,513	)
Non-controlling interest		(2,874,536	)		(2,859,941	)
Total stockholders' deficit		(8,689,477	)		(8,612,454	)
Total liabilities and stockholders' deficit	$	276,599		$	713,005

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

F-2

XERIANT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS UNAUDITED
	For the three months ended						For the six months ended
	December 31,						December 31,
	2024			2023			2024			2023
Operating expenses:
Consulting and advisory fees	$	36,137		$	102,650		$	125,120		$	154,345
Related party consulting fees		128,000			77,000			251,000			174,500
General and administrative expenses		145,621			72,849			202,066			125,248
Professional fees		25,810			34,691			89,616			125,005
Research and development expense		15			52,753			26,576			79,735
Total operating expenses		335,583			339,943			694,378			658,833
Loss from operations		(335,583	)		(339,943	)		(694,378	)		(658,833	)
Other expenses:
Amortization of debt discount		(25,472	)		-			(42,274	)		-
Interest expense		(51,379	)		(846,654	)		(112,996	)		(867,328	)
(Loss) gain on extinguishment of debt		(4,835	)		(20,298	)		60,157			(20,298	)
Change in fair value of convertible bridge loans		-			-			-			(2,448	)
Total other expense		(81,686	)		(866,952	)		(95,113	)		(890,074	)
Net loss before income tax expense		(417,269	)		(1,206,895	)		(789,491	)		(1,548,907	)
Income tax expense		-			-			-			-
Net loss		(417,269	)		(1,206,895	)		(789,491	)		(1,548,907	)
Less net loss attributable to noncontrolling interest		(7,219	)		(7,712	)		(14,595	)		(15,634	)
Net loss attributable to common stockholders	$	(410,050	)	$	(1,199,183	)	$	(774,896	)	$	(1,533,273	)
Net loss per common share - basic and diluted	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Weighted average number of common shares outstanding - basic and diluted		596,196,491			423,465,699			571,876,754			408,569,551

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

F-3

XERIANT, INC.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2024
UNAUDITED
	Series A Preferred Stock					Series B Preferred Stock				Common Stock				stock   to be		Additional Paid in			Accumulated			Non- Controlling
	Shares			Amount		Shares		Amount		Shares		Amount		issued		Capital			Deficit			Interest			Total
Balance June 30, 2024		705,895		$	7		1,000,000	$	10		524,853,304	$	5,248	$	51,950	$	20,899,187		$	(26,708,915	)	$	(2,859,941	)	$	(8,612,454	)
Stock issued for services		-			-		-		-		11,902,182		119		-		217,393			-			-			217,512
Conversion of Series A Preferred to Common Stock		(6,479	)		-		-		-		6,479,000		65		-		(65	)		-			-			-
Conversion of convertible notes payable and accrued interest into common stock		-			-		-		-		26,950,000		270		-		269,231			-			-			269,501
Net loss		-			-		-		-		-		-		-		-			(364,846	)		(7,376	)		(372,222	)
Balance September 30, 2024		699,416			7		1,000,000		10		570,184,486		5,702		51,950		21,385,746			(27,073,761	)		(2,867,317	)		(8,497,663	)
Stock issued for services		-			-		-		-		967,000		10		-		14,495			-			-			14,505
Conversion of Series A Preferred to Common Stock		(17,200	)		-		-		-		17,200,000		172		-		(172	)		-			-			-
Conversion of convertible notes payable and accrued interest into common stock		-			-		-		-		16,500,000		165		45,950		164,835			-			-			210,950
Cashless exercise of warrants		-			-		-		-		1,528,185		15		-		(15	)		-			-			-
Net loss		-			-		-		-		-		-		-		-			(410,050	)		(7,219	)		(417,269	)
Balance December 31, 2024		682,216		$	7		1,000,000	$	10		606,379,671	$	6,064	$	97,900	$	21,564,889		$	(27,483,811	)	$	(2,874,536	)	$	(8,689,477	)

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

F-4

XERIANT, INC.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2023
UNAUDITED
															Common
	Series A Preferred Stock						Series B Preferred Stock				Common Stock				Stock   To Be		Additional Paid in			Accumulated			Non- Controlling
	Shares			Amount			Shares		Amount		Shares		Amount		Issued		Capital			Deficit			Interest			Total
Balance June 30, 2023		757,395		$	8			1,000,000	$	10		389,433,144	$	3,894	$	51,950	$	19,789,793		$	(23,638,461	)	$	(2,827,294	)	$	(6,620,100	)
Conversion of Series A Preferred to Common Stock		(5,000	)		-			-		-		5,000,000		50		-		(50	)		-			-			-
Conversion of convertible notes payable and accrued interest into common stock		-			-			-		-		6,600,000		66		-		65,934			-			-			66,000
Net loss		-			-			-		-		-		-		-		-			(334,090	)		(7,922	)		(342,012	)
Balance September 30, 2023		752,395		$	8			1,000,000	$	10		401,033,144	$	4,010	$	51,950	$	19,855,677		$	(23,972,551	)	$	(2,835,216	)	$	(6,896,112	)
Conversion of Series A Preferred to Common Stock		(18,500	)		(1	)		-		-		18,500,000		185		-		(185	)		-			-			(1	)
Conversion of convertible notes payable and accrued interest into common stock		-			-			-		-		25,511,500		255		-		254,860			-			-			255,115
Net loss		-			-			-		-		-		-		-		-			(1,199,183	)		(7,712	)		(1,206,895	)
Balance December 31, 2023		733,895		$	7			1,000,000	$	10		445,044,644	$	4,450	$	51,950	$	20,110,352		$	(25,171,734	)	$	(2,842,928	)	$	(7,847,893	)

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

F-5

XERIANT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS UNAUDITED
	For the six months ended
	December 31,
	2024			2023
Cash Flows from Operating Activities
Net Loss	$	(789,491	)	$	(1,548,907	)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization		756			756
Stock option expense		-			-
Stock issued for services		284,006			-
(Gain) loss on extinguishment of debt		(60,157	)		20,298
Change in fair value of convertible bridge loans		-			2,448
Amortization of debt discount		42,274			-
Amortization of right of use asset		27,515			24,628
Changes in operating assets and liabilities:
Prepaids and deposits		1,050			(1,755	)
Accounts payable and accrued liabilities		(214,320	)		897,545
Accrued liability, related party		(7,500	)		(12,500	)
Shares to be issued		(4,250	)		-
Lease liabilities		(30,805	)		(26,994	)
Net cash from operating activities		(750,922	)		(644,481	)
Cash Flows from Investing Activities
Cash issued for notes receivable		-			(139,947	)
Cash repayments for notes receivable		-			131,784
Net cash from financing activities		-			(8,163	)
Cash Flows from Financing Activities
Proceeds from convertible bridge loans		352,000			630,000
Net cash from financing activities		352,000			630,000
Net change in cash		(398,922	)		(22,644	)
Cash at beginning of period		653,117			61,625
Cash at end of period	$	254,195		$	38,981
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	$	480,451		$	66,000
Cashless exercise of warrants	$	15		$	-

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

F-6

XERIANT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED

NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS

Company Overview

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

Operating History

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

Advanced Materials

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

Throughout the second half of 2023, Xeriant began developing its own advanced materials, including proprietary flame-retardant technology for polymers contained in recycled materials.  In 2024 the Company began testing a number of production processes to manufacture its eco-friendly, patent pending, composite construction panel called NEXBOARD^™ that can be competitive in the market and produced at industrial scale. Xeriant intends to initially manufacture these wallboards through a contract manufacturer to meet current existing demand indicated by several homebuilders and developers.  NEXBOARD will be available in varying thicknesses and sizes, including standard 48” x 96” sheets.  The Company will need to have this product certified for use in the construction industry, which is in process.  If Xeriant decides to set up its own manufacturing facilities it will need to raise significant capital, which may or may not be available depending on market conditions and other factors.  Xeriant has had ongoing discussions with an investment bank interested in financing these facilities and operations through a series of green bond issuances.

F-7

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

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

Aerospace

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

In the area of aerospace, management believes that 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 partner companies such benefits as improved access to capital, higher valuations and lower risk through the shared ownership of a diversified portfolio, while allowing these entities to maintain independence in their distinct operations to focus on their fields of expertise. Cost savings and efficiencies may be realized from sharing non-operational functions such as finance, legal, tax, sales & marketing, human resources, purchasing power, as well as investor and public relations.

F-8

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The unaudited condensed consolidated financial statements, which include the accounts of the Company, American Aviation Technologies, LLC and BlueGreen Composites, LLC, its subsidiaries, are prepared in conformity with generally accepted accounting principles in the United States of America (U.S. GAAP) for interim information and in accordance with the instructions to Form 10Q and Article 8 of Regulation S-X of the United States Securities and Exchange Commission (the “SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. All significant intercompany balances and transactions have been eliminated. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the period presented. The unaudited condensed 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 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 Company’s fiscal year end is June 30. The interim results for the six months ended December 31, 2024 are not necessarily indicative of the results to be expected for the year ending June 30, 2025 or for any future periods.

Going Concern

These condensed 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 $27,483,811 as of December 31, 2024. During the six months ended December 31, 2024, the Company’s net loss was $789,491 and at December 31, 2024, the Company had a working capital deficit of $8,697,454. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Based on its historical rate of expenditures, the Company expects to expend its available cash in approximately three months from February 14, 2025. Management’s plans include raising capital through the issuance of common stock and debt to fund operations and, eventually, the generation of revenue through its business.

Failure to raise adequate capital and generate adequate revenues could result in the Company having to curtail or cease operations. The Company’s ability to raise additional capital through the future issuances of the common stock is unknown. Additionally, even if the Company does raise sufficient capital to support its operating expenses and generate adequate revenues, there can be no assurances that the revenue will be sufficient to enable it to develop to a level where it will generate profits and cash flows from operations. These matters raise substantial doubt about the Company’s ability to continue as a going concern; however, the accompanying unaudited condensed 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 unaudited condensed 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

The unaudited condensed consolidated financial statements include the accounts of Xeriant, Inc., American Aviation Technologies, LLC (“AAT”) and BlueGreen Composites, LLC. The Company owns a 64% controlling interest in AAT; and a 100% interest in BlueGreen Composites, LLC. All intercompany balances and transactions have been eliminated. 

F-9

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 unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant assumptions and estimates relate to the valuation of warrants associated with convertible debt. Actual results could differ from these estimates.

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 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 condensed 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 condensed consolidated financial statements together with other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit risk. Where practicable the fair values of financial assets and financial liabilities have been determined and disclosed; otherwise only available information pertinent to fair value has been disclosed.

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

Cash and Cash Equivalents

For the purposes of the condensed 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.

F-10

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 three and six months ended December 31, 2024 and 2023, there were no impairments.

Convertible Debentures

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

Share-based Compensation

The Company from time to time may issue stock options, warrants and restricted stock as compensation to employees, directors, officers and affiliates, as well as to acquire goods or services from third parties. The Company measures the cost of goods or services received in exchange for equity incentive awards based on the grant date fair value of the award. The Company uses the Black-Scholes valuation model to calculate the fair value of stock options granted to employees or consultants. Stock-based compensation expense is recognized over the period during which the employee is required to provide services in exchange for the award, which is usually the vesting period. The Company uses the fair value of the Company’ stock price to calculate the fair value of restricted stock. During the six months ended December 31, 2024 and 2023, the Company recognized $232,017 and $0 in share-based compensation expense, respectively. During the three months ended December 31, 2024 and 2023, the Company recognized $14,505 and $0 in share-based compensation expense, respectively. Share-based compensation is included in the condensed consolidated statements of operations under operating expenses.

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 straight-line basis over the lease term and is presented in operating expenses on the unaudited condensed consolidated statements of operations.

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

F-11

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

Investments

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

Research and Development Expenses

Expenditures for research and development are expensed as incurred. The Company incurred research and development expenses of $26,576 and $79,735 for the six months ended December 31, 2024 and 2023, respectively. The Company incurred research and development expenses of $15 and $52,753 for the three months ended December 31, 2024 and 2023, respectively.  

Advertising and Marketing Expenses

The Company expenses advertising and marketing costs as they are incurred and are included in the general and administrative expenses section of the statement of operations. The Company recorded advertising expenses in the amount of $57,336 and $3,858 for the six months ended December 31, 2024 and 2023, respectively. The Company recorded advertising expenses in the amount of $55,301 and $1,336 for the three months ended December 31, 2024 and 2023, respectively.

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.

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.

F-12

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:

	Six months ended December 31,
	2024		2023
Warrants		118,968,828		104,802,161
Stock options		2,250,000		21,250,000
Convertible notes payable		881,681,703		723,513,736
Preferred stock		682,216,000		733,895,000
Total		1,685,116,531		1,583,460,897

Segment Reporting

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

Recent Accounting Pronouncements

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

NOTE 3 – JOINT VENTURE

Joint Venture with XTI Aircraft

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

F-13

On 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 May 31, 2023, the joint venture was terminated according to an Acceleration Event, which was 24 months from the start of the joint venture.  On June 5, 2023, after suspecting that the obligations under the Letter Agreement were possibly being evaded, the Company transmitted a formal demand letter to XTI requesting compliance with the provisions outlined in the Letter Agreement, and in accordance with section 8 of the JV Agreement with XTI.  On July 25, 2023, Inpixon filed an 8-K, announcing their intention to merge with XTI having executed an Agreement of Plan and Merger with XTI. The filing also showed that XTI had engaged in a transaction with Inpixon on March 10, 2023, receiving $300,000 in funding, which was a compensation triggering event. Inpixon subsequently filed an S-4/A registration statement on October 6, 2023.  On December 6, 2023, the Company initiated legal proceedings against XTI.

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 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 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. 

The Company includes the assets and liabilities related to the VIE in the condensed consolidated balance sheets. All significant intercompany balances and transactions have been eliminated in consolidation of the VIE. Xeriant, Inc. provides cash to the VIE to fund its operations. The carrying amounts of the consolidated VIE's assets and liabilities associated with the VIE subsidiary were as follows:

	December 31, 2024		June 30, 2024
Assets
Cash	$	-	$	-
Total Assets	$	-	$	-
Liabilities
Due to Xeriant Inc.	$	4,475,155	$	4,475,155
Total Liabilities	$	4,475,155	$	4,475,155

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 December 31, 2024, and June 30, 2024, the Company had $0 in excess of FDIC insurance.

F-14

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. Subsequent to the COVID-19 pandemic, the Company decided to continue to have all employees work from home and intends to build out the office space by the end of December 2023 to allow employees to work from the office beginning in January of 2024. 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 general and administrative expenses on the condensed consolidated statements of operations. During the six months ended December 31, 2024 and 2023, the Company recorded $26,494 and $26,550 in rent expense in general and administrative expenses on the condensed consolidated statements of operations. During the three months ended December 31, 2024 and 2023, the Company recorded $13,237 $13,266 in rent expense in general and administrative expenses on the condensed consolidated statements of operations.

Right-of-use asset is summarized below:

	December 31, 2024			June 30, 2024
Office lease	$	220,448		$	220,448
Less accumulated amortization		(215,710	)		(188,195	)
Right of use assets, net	$	4,738		$	32,253

Operating lease liability is summarized below:

	December 31, 2024			June 30, 2024
Office lease	$	5,392		$	36,197
Less: current portion		(5,392	)		(36,197	)
Long term portion	$	-		$	-

F-15

Maturity of lease liabilities are as follows:

Year ended June 30, 2025	$	5,392
Total future minimum lease payments		5,392
Less: Present value discount		-
Lease liability	$	5,392

 NOTE 6 – CONVERTIBLE NOTES PAYABLE, IN DEFAULT

The carrying value of convertible notes payable as of December 31, 2024, and June 30, 2024, was $5,900,000 and $5,850,000, respectively.

	December 31,		June 30,
Convertible Notes Payable	2024		2024
Convertible notes payable issued October 27, 2021 (0% interest) – Auctus Fund LLC	$	5,900,000	$	5,850,000
Total face value	$	5,900,000	$	5,850,000

Auctus Fund LLC Senior Secured Note

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

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

F-16

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

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

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

As of September 30, 2024, and June 30, 2024, a total of $50,000 remained outstanding, and was recorded within accounts payable and accrued liabilities on the unaudited condensed consolidated balance sheets. As of December 31, 2024, the $50,000 accrued liability was consolidated into the balance of the convertible note payable.  During the year ended June 30, 2024, the Company recorded $1,070,729 in default interest related to the note. On October 6, 2023, Auctus converted $200,115 in interest into 20,011,500 shares of common stock and on April 5, 2024, Auctus converted $227,067 in interest into 22,706,700 shares of common stock. As of December 31, 2024, and June 30, 2024, the balance of accrued interest of this note was $643,546, which is recorded in the accounts payable and accrued liabilities section of the balance sheet.

F-17

NOTE 7 – CONVERTIBLE NOTES PAYABLE

The carrying value of convertible notes payable, net of discount at December 31, 2024 and June 30, 2024 was as follows:

	December 31,			June 30,
Convertible Notes Payable	2024			2024
Convertible notes payable (10% interest)	$	2,101,000		$	2,180,000
Less unamortized discount		(5,197	)		(47,471	)
Total face value	$	2,095,803		$	2,132,529

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

During the six months ended December 31, 2024, $395,000 in principal and $39,500 in accrued interest was converted into 43,450,000 shares of common stock.

During the six months ended December 31, 2024 and 2023, the Company recorded $112,996 and $42,298 in interest expense related to these notes, respectively. During the three months ended December 31, 2024 and 2023, the Company recorded $54,380 and $21,624 in interest expense related to these notes, respectively. As of December 31, 2024 and June 30, 2024, the balance of accrued interest related to these loans was $172,271 and $101,724, respectively.

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

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%

F-18

NOTE 8 – RELATED PARTY TRANSACTIONS

Consulting fees

During the six months ended December 31, 2024 and 2023, the Company recorded $108,500 and $94,500 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. During the three months ended December 31, 2024 and 2023, the Company recorded $53,500 and $37,000, respectively, in consulting fees to Ancient Investments, LLC. As of December 31, 2024, and June 30, 2024, $0 was accrued.

For the six months ended December 31, 2024 and 2023, the Company recorded $60,000 and $41,000 respectively, in consulting fees to Edward DeFeudis, a Director of the Company. During the three months ended December 31, 2024 and 2023, the Company recorded $30,000 and $20,000 respectively, in consulting fees to Edward DeFeudis. As of December 31, 2024, and June 30, 2024, $15,000 was accrued.

During the six months ended December 31, 2024 and 2023, the Company recorded $57,500 and $29,000 respectively, in consulting fees to AMP Web Services, a Company owned by the Company’s CTO, Pablo Lavigna. During the three months ended December 31, 2024 and 2023, the Company recorded $29,500 and $15,000 respectively, in consulting fees to Pablo Lavigna. As of December 31, 2024, and June 30, 2024, $10,500 and $0 was accrued, respectively.

During the six months ended December 31, 2024 and 2023, the Company recorded $25,000 and $10,000 respectively, in consulting fees to Keystone Business Development Partners, a Company owned by the Company’s CFO, Brian Carey. During the three months ended December 31, 2024 and 2023, the Company recorded $15,000 and $5,000 respectively, in consulting fees to Keystone Business Development Partners. As of December 31, 2024, and June 30, 2024, $0 and $5,000 was accrued, respectively.

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

NOTE 9 – 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.

Board of Advisors Agreements

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

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

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

F-19

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

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

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

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

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

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

There were no Advisory Agreements executed during the six months ended December 31, 2024, or the year ended June 30, 2024.

Litigation

On October 19, 2023, Xeriant filed a complaint in the United States Southern District of New York (Case no.1:23-cv-09200) against Auctus Fund LLC, to invalidate allegedly illegally designed contractual agreements, including contesting the enforceability of the related note and amendments, and to set aside improper and unlawful securities transactions effectuated in violation of Section 15(a)(1) of the Exchange Act (15 U.S.C. § 78o(a)(1)) by the Defendant, alleging breaches of fiduciary duty and related claims. On February 9, 2024, the case was dismissed. The Company filed a Notice of Civil Appeal on March 13, 2024, primarily based on public welfare because of the pending litigation between the SEC and Auctus Fund Management, LLC, which complaint was filed on June 1, 2023. On June 19, 2024, the Company filed an appeal in the United States Court of Appeals for the Second Circuit (Case no. 24-682-cv), which is still pending. The foregoing descriptions of the legal actions do not purport to be complete and are subject in their entirety by the full text of the court filings.

On December 6, 2023, the Company initiated legal proceedings against XTI Aircraft Company in the Federal District Court for the Southern District of New York (Case no. 1:23-cv-10656-JPO), along with other unnamed defendants, seeking to enforce the terms of the Letter Agreement, and alleging fraudulent acts, deceptive maneuvers and intentional breaches, seeking a range of remedies. These include the recovery of losses, expenses, attorneys’ fees, punitive damages and a compensatory damage award exceeding $500 million. The legal action aims to address the alleged misconduct comprehensively and to protect the Company’s interests in the face of XTI’s actions. The foregoing description of the legal action does not purport to be complete and is subject in its entirety by the full text of the complaint, a copy of which was filed in an 8-K on December 12, 2023, Exhibit 99.1. On February 29, 2024, the Company filed a Second Amended Complaint 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.

F-20

NOTE 10 – EQUITY

Common Stock

As of December 31, 2024, and June 30, 2024, the Company had 5,000,000,000 shares of common stock authorized with a par value of $0.00001. There were 606,379,671 and 524,853,304 shares issued and outstanding as of December 31, 2024, and June 30, 2024, respectively.

Series A Preferred Stock

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

· 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 upon not less than 30 days written notice to the holders. It is not mandatorily redeemable.

As of December 31, 2024, and June 30, 2024, the Company had 682,216 and 705,895 shares of Series A preferred stock issued and outstanding, respectively.

Series B Preferred Stock

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

F-21

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 $0 and $515,917 for these options for the six months ended December 31, 2024 and 2023, respectively. As of June 30, 2024, there was $0 of total unrecognized compensation cost related to non-vested portion of options granted.

As of December 31, 2024, there are 2,250,000 options outstanding, of which 2,250,000 are exercisable. The weighted average remaining term is 0.01 years.

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, 2024		21,250,000		$	0.12		1.11
Granted		-
Exercised		-			-
Canceled		(19,000,000	)		-
Outstanding at December 31,2024		2,250,000		$	0.12		0.01	$	-
Exercisable at December 31,2024		2,250,000		$	0.12		0.01	$	-

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-22

Warrants

As of December 31, 2024, and June 30, 2024, the Company had 118,668,828 and 120,497,013 warrants outstanding. The warrants have a term of two to five years, and an exercise price range from $0.021 and $0.1187. The Company evaluated the warrants under ASC 815, Derivatives and Hedging (“ASC 815”) and determined that they did not require liability classification. The warrants were recorded in additional paid-in capital under their aggregate relative fair values. As of December 31, 2024, the weighted average remaining useful life of the warrants was 2.05. The warrants are detailed as follows:

Number of Warrants	Number of Warrants			Weighted- Average Exercise Price		Weighted- Average Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding at June 30, 2024		120,497,013		$	0.09		2.50	$	-
Granted		-
Exercised		(1,528,185	)
Canceled		(300,000	)
Outstanding at December 31, 2024		118,668,828		$	0.09		2.05	$	-
Vested at December 31, 2024		118,668,828		$	0.09		2.05	$	-
Exercisable at December 31, 2024		118,668,828		$	0.09		2.05	$	-

NOTE 11 – SUBSEQUENT EVENTS

Litigation Against XTI Aircraft Company

On February 29, 2024, Xeriant, Inc. (the “Company”) filed an Amended Complaint in the United States District Court for the Southern District of New York against XTI Aircraft Co. (“XTI”), the wholly owned and principal operating subsidiary of XTI Aerospace Inc. (Nasdaq: XTIA). alleging that XTI, engaged over a period of time in (1) intentional fraudulent conduct against Xeriant, (2) fraudulent concealment, (3) breach of contract, (4) quantum meruit, (5) unjust enrichment, (6) unfair competition, and (7) misappropriation of confidential information, and sought, among other things, damages in excess of $500 million.  XTI moved before the Court on March 13, 2024, seeking to dismiss all Xeriant’s claims except for breach of contract.  Xeriant argued before the Court that all of these claims were legitimately alleged and should not be dismissed.  On January 14, 2025, the Court agreed with Xeriant’s position that its claims were validly alleged and denied all of XTI’s arguments in their entirety. The Court has ordered that XTI must file an Answer to the Amended Complaint, and Xeriant intends to proceed to take discovery.  On January 22, 2025, the Company issued a press release and an 8-K relating to the Court’s decision.

F-23

Item 2. 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 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.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements, including without limitation, statements related to our plans, strategies, objectives, expectations, intentions and adequacy of resources. Investors are cautioned that such forward-looking statements involve risks and uncertainties including without limitation the following: (i) our plans, strategies, objectives, expectations and intentions are subject to change at any time at our discretion; (ii) our plans and results of operations will be affected by our ability to manage growth; and (iii) other risks and uncertainties indicated from time to time in our filings with the Securities and Exchange Commission.

In some cases, you can identify forward-looking statements by terminology such as ‘‘may,’’ ‘‘will,’’ ‘‘should,’’ ‘‘could,’’ ‘‘expects,’’ ‘‘plans,’’ ‘‘intends,’’ ‘‘anticipates,’’ ‘‘believes,’’ ‘‘estimates,’’ ‘‘predicts,’’ ‘‘potential,’’ or ‘‘continue’’ or the negative of such terms or other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of such statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We are under no duty to update any of the forward-looking statements after the date of this Report.

This section of the report should be read together with Footnotes of the Company’s audited financials for the year ended June 30, 2024. The unaudited condensed consolidated statements of operations for the six months ended December 31, 2024 and 2023 are compared in the sections below.

Executive Summary

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

4

Joint Venture with XTI Aircraft

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

On May 17, 2022, 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 May 31, 2023, the joint venture was terminated according to an Acceleration Event, which was 24 months from the start of the joint venture.  On June 5, 2023, after suspecting that the obligations under the Letter Agreement were possibly being evaded, the Company transmitted a formal demand letter to XTI requesting compliance with the provisions outlined in the Letter Agreement, and in accordance with section 8 of the JV Agreement with XTI.  On July 25, 2023, Inpixon filed an 8-K, announcing their intention to merge with XTI having executed an Agreement of Plan and Merger with XTI. The filing also showed that XTI had engaged in a transaction with Inpixon on March 10, 2023, receiving $300,000 in funding, which was a compensation triggering event. Inpixon subsequently filed an S-4/A registration statement on October 6, 2023.  On December 6, 2023, the Company initiated legal proceedings against XTI.  See Litigation section below for a summary of the related legal proceedings.  

Stock Sales

None.

Convertible Notes Issued

During the six months ended December 31, 2024, the Company received $346,000 from issuance of convertible debt.

Litigation

On October 19, 2023, Xeriant filed a complaint in the United States Southern District of New York (Case no.1:23-cv-09200) against Auctus Fund LLC, to invalidate allegedly illegally designed contractual agreements, including contesting the enforceability of the related note and amendments, and to set aside improper and unlawful securities transactions effectuated in violation of Section 15(a)(1) of the Exchange Act (15 U.S.C. § 78o(a)(1)) by the Defendant, alleging breaches of fiduciary duty and related claims. On February 9, 2024, the case was dismissed. The Company filed a Notice of Civil Appeal on March 13, 2024, primarily based on public welfare because of the pending litigation between the SEC and Auctus Fund Management, LLC, which complaint was filed on June 1, 2023. On June 19, 2024, the Company filed an appeal in the United States Court of Appeals for the Second Circuit (Case no. 24-682-cv), which is still pending. The foregoing descriptions of the legal actions do not purport to be complete and are subject in their entirety by the full text of the court filings.

On December 6, 2023, the Company initiated legal proceedings against XTI Aircraft Company in the Federal District Court for the Southern District of New York (Case no. 1:23-cv-10656-JPO), along with other unnamed defendants, seeking to enforce the terms of the Letter Agreement, and alleging fraudulent acts, deceptive maneuvers and intentional breaches, seeking a range of remedies. These include the recovery of losses, expenses, attorneys’ fees, punitive damages and a compensatory damage award exceeding $500 million. The legal action aims to address the alleged misconduct comprehensively and to protect the Company’s interests in the face of XTI’s actions. The foregoing description of the legal action does not purport to be complete and is subject in its entirety by the full text of the complaint, a copy of which was filed in an 8-K on December 12, 2023, Exhibit 99.1. On February 29, 2024, the Company filed a Second Amended Complaint 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.

See Note 11, Subsequent Events for additional information on Litigation occurring subsequent to December 31, 2024.

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.

5

Six months ended December 31, 2024, Results of Operations Compared with six months ended December 31, 2023

	For the six months ended
	December 31,						Variance
	2024			2023			$
Operating expenses:
Consulting and advisory fees	$	125,120		$	154,345		$	(29,225	)
Related party consulting fees		251,000			174,500			76,500
General and administrative expenses		202,066			125,248			76,818
Professional fees		89,616			125,005			(35,389	)
Research and development expense		26,576			79,735			(53,159	)
Total operating expenses		694,378			658,833			35,545
Operating loss		(694,378	)		(658,833	)		(35,545	)
Other expenses:
Amortization of debt discount		(42,274	)		-			(42,274	)
Interest expense		(112,996	)		(867,328	)		754,332
Loss on extinguishment of debt		(4,835	)		(20,298	)		15,463
Gain on extinguishment of debt		64,992			-			64,992
Change in fair value of convertible bridge loans		-			(2,448	)		2,448
Total other (expense)		(95,113	)		(890,074	)		794,961
Net loss	$	(789,491	)	$	(1,548,907	)	$	759,416

Consulting and advisory fees

Total consulting and advisory expenses were $125,120 and $154,345 for the six months ended December 31, 2024 and 2023, respectively, a decrease of $29,225. In the prior period, there were increased expenses due to stock issuances for services relating to advisory agreements. 

Related Party Consulting Fees

Total related party consulting fees were $251,000 and $174,500 for the six months ended December 31, 2024 and 2023, respectively, an increase of $76,500. The primary reason for the increase was increased available funds. Payments to related parties are variable based upon Company’s ability to make payments.

General and administrative expenses

Total general and administrative expenses were $202,066 and $125,248 for the six months ended December 31, 2024 and 2023, respectively, an increase of $76,818. The primary reason for the increase was increased expenses related to our subsidiary BlueGreen Composites, LLC. Expenses for BlueGreen Composites, LLC, relate to research, testing and business development costs for the Company’s advanced materials operations.

6

Professional Fees

Total professional fees were $89,616 and $125,005 for the six months ended December 31, 2024 and 2023, respectively, a decrease of $35,389. The primary reason for the decrease was higher auditing fees and legal costs associated with a patent in the prior period.

Research and Development Expenses

Total research and development expenses were $26,576 and $79,735 for the six months ended December 31 2024 and 2023, respectively, a decrease of $53,159. The primary reason for the decrease was increased testing and related travel costs in the prior period.

Other Income (Expenses)  

Total other expenses consist of amortization of debt discount, interest expense related to convertible notes, loss and gain on extinguishment of debt and change in fair value of the convertible bridge loans. Total other expenses were $95,113 for the six months ended December 31, 2024, compared to $890,074 for the six months ended December 31, 2023. The decrease of $794,961 was primarily due to recording the Auctus default interest in the prior period.

Net loss

Total net loss was $789,491 for the six months ended December 31, 2024, compared to $1,548,907 for the six months ended December 31, 2023, a decrease of $759,416. The decrease of $759,416 was primarily due to recording the Auctus default interest in the prior period.

Three months ended December 31, 2024 Results of Operations Compared with three months ended December 31, 2023

	For the three months ended
	December 31,						Variance
	2024			2023			$
Operating expenses:
Consulting and advisory fees	$	36,137		$	102,650		$	(66,513	)
Related party consulting fees		128,000			77,000			51,000
General and administrative expenses		145,621			72,849			72,772
Professional fees		25,810			34,691			(8,881	)
Research and development expense		15			52,753			(52,738	)
Total operating expenses		335,583			339,943			(4,360	)
Operating loss		(335,583	)		(339,943	)		4,360
Other expenses:
Amortization of debt discount		(25,472	)		-			(25,472	)
Interest expense		(51,379	)		(846,654	)		795,275
Loss on extinguishment of debt		(4,835	)		(20,298	)		15,463
Total other (expense)		(81,686	)		(866,952	)		785,266
Net loss	$	(417,269	)	$	(1,206,895	)	$	789,626

7

Consulting and advisory fees

Total consulting and advisory expenses were $36,137 and $102,650 for the three months ended December 31, 2024 and 2023, respectively, a decrease of $66,513. In the prior period, there were increased expenses due to stock issuances for services relating to advisory agreements. 

Related Party Consulting Fees

Total related party consulting fees were $128,000 and $77,000 for the three months ended December 31, 2024 and 2023, respectively, an increase of $51,000. The primary reason for the increase was increased available funds. Payments to related parties are variable based upon Company’s ability to make payments.

General and administrative expenses

Total general and administrative expenses were $145,621 and $72,849 for the three months ended December 31, 2024 and 2023, respectively, an increase of $72,772. The primary reason for the increase was increased expenses related to our subsidiary BlueGreen Composites, LLC. Expenses for BlueGreen Composites, LLC, relate to research, testing and business development costs for the Company’s advanced materials operations.

Professional Fees

Total professional fees were $25,810 and $34,691 for the three months ended December 31, 2024 and 2023, respectively a decrease of $8,881. The primary reason for the decrease was higher auditing fees and legal costs associated with a patent in the prior period.

Research and Development Expenses

Total research and development expenses were $15 and $52,753 for the three months ended December 31 2024 and 2023, respectively, a decrease of $52,738. The primary reason for the decrease was reduced research and development expenses relating to BlueGreen Composites, LLC, during the current quarter.

Other Income (Expenses)  

Total other expenses consist of amortization of debt discount, interest expense related to convertible notes, loss and gain on extinguishment of debt and change in fair value of the convertible bridge loans. Total other expenses were $81,686 for the three months ended December 31, 2024, compared to $866,952 for the three months ended December 31, 2023. The decrease of $785,266 was primarily due to recording the Auctus default interest in the prior period.

Net loss

Total net loss was $417,269 for the three months ended December 31, 2024, compared to $1,206,895 for the three months ended December 31, 2023. The decrease of $789,626 was primarily due to recording the Auctus default interest in the prior period.

8

Liquidity and Capital Resources

The Company's condensed 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 December 31, 2024, and June 30, 2024, the Company had $254,195 and $653,117 in cash, respectively, and $8,697,454 and $8,661,248 in negative working capital, respectively. On December 31, 2024, the principal balance of the Auctus Senior Secured Promissory Note was $5,900,000. The Note matured on March 15, 2023, and the company has been in discussions with Auctus to resolve the liability. For the three months ended December 31, 2024 and 2023, the Company had a net loss of $417,269 and $1,206,895, respectively. For the six months ended December 31, 2024 and 2023, the Company had a net loss of $789,491 and $1,548,907, respectively. Continued losses may adversely affect the liquidity of the Company in the future. Therefore, the factors noted above raise substantial doubt about our ability to continue as a going concern. The recoverability of a major portion of the recorded asset amounts shown in the accompanying unaudited condensed consolidated balance sheets is dependent upon continued operations of the Company, which in turn is dependent upon the Company’s ability to raise additional capital, obtain financing and to succeed in its future operations. The unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. To implement its business plan, the Company must raise sufficient funds in the form of equity, debt, or a combination thereof.  Until the Company develops profitable operations, it is dependent upon management continually raising funds.

During the six months ended December 31, 2024, the Company’s operating activities used $750,922 of net cash used compared to using $644,481 of net cash used in our operating activities during the six months ended December 31, 2023. This difference primarily related to stock issued for services in the current period. During the six months ended December 31, 2024, our investing activities were $0 compared to $8,163 of net cash used in our investing activities during the six months ended December 31, 2023. This difference related to net cash issued for notes receivable during the six months December 31, 2023.  During the six months ended December 31, 2024, our financing activities were $352,000 compared to $630,000 of net cash added in our financing activities during the six months ended December 31, 2023. This difference related to the additional issuances of convertible notes during the six months ended December 31, 2023.

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.

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 condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these condensed 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 condensed consolidated financial statements for the six months ended December 31, 2024 and 2023 contained in this filing). On an ongoing basis, we evaluate our estimates. The Company bases 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.

9

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As a smaller reporting company, the Company has elected not to provide the disclosure required by this item.

Item 4. Controls and Procedures

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 December 31, 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 their evaluation of our disclosure controls and procedures, they concluded that, at December 31, 2024, our disclosure controls and procedures are effective.

Changes in Internal Control Over Financial Reporting

There has been no change in the Company’s internal control over financial reporting, as defined in Rules 13a-15(f) of the Exchange Act, during the Company’s most recent fiscal quarter ended December 31, 2024, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

10

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

On October 19, 2023, Xeriant filed a complaint in the United States Southern District of New York (Case no.1:23-cv-09200) against Auctus Fund LLC, to invalidate allegedly illegally designed contractual agreements, including contesting the enforceability of the related note and amendments, and to set aside improper and unlawful securities transactions effectuated in violation of Section 15(a)(1) of the Exchange Act (15 U.S.C. § 78o(a)(1)) by the Defendant, alleging breaches of fiduciary duty and related claims.  On February 9, 2024, the case was dismissed.  The Company filed a Notice of Civil Appeal on March 13, 2024, primarily based on public welfare because of the pending litigation between the SEC and Auctus Fund Management, LLC, which complaint was filed on June 1, 2023.  On June 19, 2024, the Company filed an appeal in the United States Court of Appeals for the Second Circuit (Case no. 24-682-cv), which is still pending.  The foregoing descriptions of the legal actions do not purport to be complete and are subject in their entirety by the full text of the court filings.

On December 6, 2023, the Company initiated legal proceedings against XTI Aircraft Company in the Federal District Court for the Southern District of New York (Case no. 1:23-cv-10656-JPO), along with other unnamed defendants, seeking to enforce the terms of the Letter Agreement and alleging fraudulent acts, deceptive maneuvers and intentional breaches, seeking a range of remedies.  These include the recovery of losses, expenses, attorneys’ fees, punitive damages and a compensatory damage award exceeding $500 million. The legal action aims to address the alleged misconduct comprehensively and to protect the Company’s interests in the face of XTI’s actions. The foregoing description of the legal action does not purport to be complete and is subject in its entirety by the full text of the complaint, a copy of which was filed in an 8-K on December 12, 2023, Exhibit 99.1.  On February 29, 2024, the Company filed a Second Amended Complaint 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.

See Note 11, Subsequent Events for additional information on Litigation occurring subsequent to December 31, 2024

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 1A. Risk Factors

Our business is subject to numerous risks and uncertainties including but not limited to those discussed in “Risk Factors” in our Annual Report on Form 10-K.

Item 2. Unregistered Sales of Equity Securities

None.

Item 3. Defaults Upon Senior Securities

Refer to Note 6 relating to Auctus Senior Secured Promissory Note

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

To the best of the Company’s knowledge, during the fiscal quarter ended December 31, 2023, no director or officer (as defined in Rule 16a-1(f) of the Exchange Act) of the Company adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements. 

11

Item 6. Exhibits

The following exhibits are filed herewith

Exhibit Number	Document
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 Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

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SIGNATURES

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

	XERIANT, INC.
Date: February 14, 2025	By:	/s/ Keith Duffy
		Keith Duffy Chief Executive Officer (Principal Executive)

Date: February 14, 2025	By:	/s/ Brian Carey
		Brian Carey Chief Financial Officer

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