Xeriant Estimates Four Months of Cash at June 30
Management estimated that available cash would last approximately four months from June 30, 2026, while Xeriant reported a working capital deficit.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Filing Summary
Xeriant, Inc. (XERI) reported net income of $392,278 for the year ended June 30, 2026, compared with a net loss of $1,646,898 in fiscal 2025. Fiscal 2026 income included a $2,810,278 gain on extinguishment of debt.
Operating activities used $791,756 of cash, compared with $1,288,505 in fiscal 2025. Cash was $87,594 and the working capital deficit was $4,897,313 at June 30, 2026. Management estimated available cash would last approximately four months from that date, and management and the auditor stated substantial doubt about Xeriant’s ability to continue as a going concern. Xeriant recorded a $3,500,000 Auctus settlement liability and reported no cash payments under the settlement as of June 30, 2026; settlement terms were extended through October 31, 2026.
Xeriant remains a development-stage company with no sales. It reported completing 16 NexBoard certification tests as of the report date, and its patent covering proprietary technology was issued July 14, 2026.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Hollow bars mark forward-looking points. How the balance works
Positive
- Moderate pointXeriant reported $392,278 of net income in fiscal 2026, compared with a $1,646,898 net loss in fiscal 2025; fiscal 2026 included a $2,810,278 gain on extinguishment of debt. 30% of market cap
Negative
- Major point. Forward-looking: it has not happened yet and may not happen.Going-concern uncertainty: the working capital deficit was $4,897,313 at June 30, 2026, and management estimated available cash would last approximately four months from that date.
- Major pointAuctus settlement liability: $3,500,000 was recorded at June 30, 2026, with no cash payments under the settlement reported as of that date. 38% of market cap
Filing Explained
The 46,138,100 issued shares reduce existing holders’ percentage ownership, while Auctus’s warrants were extended by two years.
This audited annual report reports that Xeriant issued 46,138,100 common shares to Auctus as consideration for a May 2026 settlement extension. A September 23 agreement extended the settlement through
The company reported 1,086,360,294 common shares outstanding as of
Key Figures
Key Terms
going concern financial
working capital deficit financial
gain on extinguishment of debt financial
variable interest entity financial
convertible debentures financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What was XERI's net income in fiscal 2026?
How long did XERI expect its available cash to last?
Does XERI have sales?
How many certification tests has XERI completed for NexBoard?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ____________ to ____________
Commission file number
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Securities registered under Section 12(b) of the Act:
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Securities registered under Section 12(g) of the Act:
Common Stock, $0.00001 par value
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐
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.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously filed financial statements.
Indicate by check mark whether any of those error corrections are restatements that required recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10 D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes
The aggregate market value of the registrant’s common stock held by non-affiliates as of December 31, 2025, the last day of the registrant’s most recently completed second fiscal quarter, based upon the closing price of the registrant’s common stock as reported by the OTCQB Marketplace on such date, was approximately $
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. As of September 25, 2026, the registrant had
Documents Incorporated by Reference: None.
TABLE OF CONTENTS
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PART I. |
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Item 1. | Business. |
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Item 1A. | Risk Factors. |
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Item 1B | Unresolved Staff Comments. |
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Item 1C | Cybersecurity. |
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Item 2. | Properties. |
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Item 3. | Legal Proceedings. |
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Item 4. | Mine Safety Disclosures. |
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PART II. |
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Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. |
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Item 6. | Reserved. |
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Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
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Item 8. | Financial Statements and Supplementary Data. |
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Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. |
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Item 9A. | Controls and Procedures. |
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Item 9B. | Other Information. |
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Item 9C | Disclosure Regarding Foreign Jurisdictions that Prevent Inspection. |
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Item 10. | Directors, Executive Officers and Corporate Governance. |
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Item 11. | Executive Compensation. |
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Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. |
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Item 13. | Certain Relationships and Related Transactions, and Director Independence. |
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Item 14. | Principal Accounting Fees and Services. |
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Item 15. | Exhibits, Financial Statement Schedules. |
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Item 16 | Form 10-K Summary |
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K (this “Report”) contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Any statements about our expectations, beliefs, plans, predictions, forecasts, objectives, assumptions, or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “anticipate,” “believes,” “can,” “could,” “may,” “predicts,” “potential,” “should,” “will,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “intends,” and similar words or phrases. Accordingly, these statements are only predictions and involve estimates, known and unknown risks, assumptions, and uncertainties that could cause actual results to differ materially from those expressed in them. Our actual results could differ materially from those anticipated in such forward-looking statements as a result of several factors more fully described in Item 1A of this Report under the caption “Risk Factors” and elsewhere in this Report, including the exhibits hereto.
All forward-looking statements are only estimates of future results, and actual results may differ materially from expectations. The inclusion of this forward-looking information should not be regarded as a representation by us or any other person that the future plans, estimates, or expectations contemplated by us will be achieved. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, and financial needs. You are cautioned not to place undue reliance on such statements, which should be read in conjunction with the other cautionary statements that are included elsewhere in this Report. Any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws.
Use of Certain Defined Terms
Except where the context otherwise requires and for the purposes of this Report only:
| · | In this annual report, references to “Xeriant”, “Banjo”, “XERI”, “BANJ” or “the Company,” or “we,” or “us,” and “our” refer to Xeriant, Inc. f/k/a Banjo & Matilda, Inc. |
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PART I.
Item 1. Business
Xeriant, Inc. (the “Company) is dedicated to the discovery, development, and commercialization of transformative technologies, with a focus on advanced materials that can be successfully integrated and deployed across multiple industrial sectors. Xeriant’s advanced materials line is marketed under the DUREVER™ brand and includes NexBoard™, a high-performance eco-friendly composite construction panel made from recycled plastic and fiber waste, and NexPatch™, its companion fire-resistant joint compound. Both products use the Company’s proprietary fire-retardant technology, called Durazite™. NexBoard™ has shown exceptional resistance to fire, water, mold, insects, cracking, abrasion, compression and puncture, and was designed to become a universal panel to replace products such as drywall, plywood, OSB, MDF, MgO board, cement board and other materials used in construction. Durazite also has potential uses in many industries looking to improve the performance of their products. The Company seeks strategic partners in the building materials industry and other industries for immediate access to their distribution networks and markets.
Corporate History
Formation of Company
The Company was originally incorporated in Nevada on December 18, 2009, under the name Eastern World Solutions, Inc. The name was changed to Banjo & Matilda, Inc. on September 24, 2013. Effective June 22, 2020, the Company changed its name from Banjo & Matilda, Inc. to Xeriant, Inc.
Share Exchange with American Aviation Technologies
On April 16, 2019, the Company entered into a Share Exchange Agreement with American Aviation Technologies, LLC (“AAT”), an aircraft design and development company focused on the emerging segment of the aviation industry of autonomous and semi-autonomous vertical take-off and landing (VTOL) and unmanned aerial vehicles (UAVs).
On June 28, 2019, the Company spun out two wholly owned subsidiaries: Banjo & Matilda (USA), Inc. and Banjo & Matilda Australia Pty LTD.
On September 30, 2019, the acquisition of AAT closed, and AAT became a wholly owned subsidiary of the Company.
Joint Venture with XTI Aircraft
Effective May 31, 2021, 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.
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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 at Note 9 below for a summary of the related legal proceedings.
Auctus Fund LLC Senior Secured Note
Through Maxim Group, LLC, the Company was introduced to Auctus Fund LLC (“Auctus”) for the purpose of providing bridge loan funding to satisfy the requirements of a pending merger with XTI Aircraft under a letter of intent signed in September 2021. On October 27, 2021, the Company issued a convertible note payable with Auctus with the principal of $6,050,000, consisting of $5,142,500, which was the actual amount funded, plus an original issue discount in the amount of $907,500 for interest on the unpaid principal amount at the rate of zero percent per annum from the issue date until the note becomes due and payable. The closing costs were $433,550, which included $308,550 in fees paid to Maxim and professional fees for completing the transaction. The Note had an initial due date of October 27, 2022. The Auctus Note provides the holder has the option to convert the principal balance to common stock of the Company at a conversion price of the lesser of (i) $0.1187 or (ii) 75% of the offering price per share divided by the number of shares of common stock. The Auctus Note is secured by the grant of a first priority security interest in the assets of the Company. In connection with the Auctus Note, the Company issued warrants indexed to an aggregate of 50,968,828 shares of common stock. The warrants have a term of five years and an exercise price of $0.1187. The exercise price can be adjusted downward to match the price of the Company’s most recent issuances of common shares.
Effective August 1, 2022, the Company entered into an Amendment to the Senior Secured Promissory Note (the “First Amendment”) with Auctus pursuant to which the parties agreed to amend the Auctus Note. The Amendment (i) extended the maturity date of the Auctus Note to November 1, 2022, and (ii) extended the dates for the completion of the acquisition of XTI Aircraft and the uplist of the Company’s common stock to a national securities exchange to November 1, 2022. In consideration of the Amendment, the Company agreed to (i) grant to Auctus a new Warrant to purchase 25,000,000 shares of common stock dated July 26, 2022 (the “Warrant”) at an exercise price of $0.09 per share and 5-year term; (ii) make a prepayment of the Note in the amount of $100,000; and (iii) cause a director of the Company to cancel his 10b-5(1) Plan.
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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 25,000,000 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 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.
As of June 30, 2024, a total of $50,000 remained outstanding, and was recorded within accounts payable and accrued liabilities on the consolidated balance sheets. As of June 30, 2025, the $50,000 accrued liability was consolidated into the balance of the convertible note payable. During the year ended June 30, 2024, the Company recorded $1,070,729 in default interest related to the note. On October 6, 2023, Auctus converted $200,115 in interest into 20,011,500 shares of common stock and on April 5, 2024, Auctus converted $227,067 in interest into 22,706,700 shares of common stock. As of June 30, 2026, and 2025, the balance of accrued interest of this note was $0 and $643,546, respectively, which is recorded in the accounts payable and accrued liabilities section of the consolidated balance sheets.
Effective October 29, 2025, Xeriant entered into a Settlement Agreement with Auctus to restructure the Auctus Note and related Xeriant obligations. The Settlement Agreement provides, inter alia, the following:
1. The Company will issue to Auctus 30,000,000 unrestricted shares of the Company’s Common Stock (the “Conversion Shares”) pursuant to an existing Notice of Conversion dated February 24, 2025.
2. The Company will pay Auctus $3,500,000 as follows: (A) $1,000,000 on or before 75 days from October 29, 2025; (B) $1,000,000 on or before 105 days from October 29, 2025;(C) $1,000,000 on or before 135 days from October 29, 2025; and (D) $500,000 on or before 165 days from October 29, 2025.
3. Within ten (10) business days of receipt by the Company of any money or any other consideration pertaining to the legal action brought by the Company against XTI Aircraft Company, the Company will transfer litigation proceeds to Auctus on a preferred basis and share on a percentage basis thereafter net of legal fees not to exceed $250,000.
4. Provided that the Company timely makes all payments with respect to the $3,500,000, Auctus will return to Company (a) a Warrant dated July 26, 2022, to purchase 25,000,000 shares of the Company’s Common Stock and (b) a Warrant dated December 27, 2022, to purchase 25,000,000 shares of the Company’s Common Stock.
5. So long as the Company makes all payments as set forth above, Auctus will suspend any further exercise of its conversion rights under the Note.
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6. The Company has issued a full and unconditional release to Auctus regarding any claims that the Company has against Auctus with respect to the Note and all agreements relating to the Note.
7. The Company agrees that it will not pursue, file or permit to be pursued. any civil action against Auctus with regard to the released claims.
8. Provided that no event of default has occurred under the Settlement Agreement, Auctus will not pursue, file, or assert any action, suit or legal proceeding against the Company seeking equitable or monetary relief in connection with the Note.
9. Auctus will be entitled to retain its original warrant to purchase 50,968,828 shares of the Company’s Common Stock.
The foregoing summary of the Settlement Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions set forth in Form 8-K filed with the SEC on November 12, 2025.
The Company and Auctus have also entered into a Leak-Out Agreement regarding the sale by Auctus of common stock received by Auctus pursuant to a conversion or exercise of any security held by Auctus.
As of June 30, 2026, the Company has not made any cash payments in connection with the settlement agreement.
The Company tested the modification 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 of the modification, the Company extinguished the $5,900,000 principal amount and $643,546 in accrued interest, in exchange for recording a settlement liability of $3,500,000 along with common stock at $300,000 (30,000,000 shares valued at $0.01 per share). This resulted in the Company recording a gain on extinguishment in the amount of $2,743,546. On May 18, 2026, Xeriant and Auctus agreed to an extension of the settlement terms through July 31, 2026, for an extension fee of 46,138,100 shares of Xeriant common shares, which are subject to the leak-out agreement that was part of the Settlement Agreement. On September 23, 2026, Xeriant and Auctus extended the terms of the Settlement Agreement through October 31, 2026, which included a two-year extension of the warrants previously issued to Auctus. The Company is diligently working on securing the funding needed to fulfill its obligations.
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OUR BUSINESS SUMMARY
Introduction
Transformative aerospace technologies, including eco-friendly specialty materials, have been successfully commercialized and integrated across multiple industry sectors, and have led to a more prosperous and interconnected global economy. These advancements are producing next-generation materials that can affect every facet of our lives with improved safety, durability and decreased environmental impact.
Company Overview
Xeriant, Inc. (the “Company) is dedicated to the discovery, development, and commercialization of transformative technologies, with a focus on advanced materials that can be successfully integrated and deployed across multiple industrial sectors. Xeriant’s advanced materials line is marketed under the DUREVER™ brand and includes NexBoard™, a high-performance eco-friendly composite construction panel made from recycled plastic and fiber waste, and NexPatch™, its companion fire-resistant joint compound. Both products use the Company’s proprietary fire-retardant technology, called Durazite™. NexBoard™ has shown exceptional resistance to fire, water, mold, insects, cracking, abrasion, compression and puncture, and was designed to become a universal panel to replace products such as drywall, plywood, OSB, MDF, MgO board, cement board and other materials used in construction. Durazite also has potential uses in many industries looking to improve the performance of their products. The Company seeks strategic partners in the building materials industry and other industries for immediate access to their distribution networks and markets.
Advanced Materials
A primary focus of the Company is the development and commercialization of eco-friendly advanced materials, including nanotechnology, which have applications across a broad range of industries and the potential to generate significant near-term revenue. Xeriant has developed a very effective fire-retardant technology, called Durazite, that has been incorporated into its proprietary construction materials, namely NexBoard and NexPatch. The Company’s strategy includes potential licensing arrangements, joint ventures, or combinations which could allow for more rapid access to various markets with reduced capital requirements and financial risk. Xeriant is having discussions with potential partner companies in the building materials industry that may provide production and distribution infrastructure, as well as supply chain and financial support. The Company’s advanced materials can also be licensed to companies with products that are not related to construction, to enhance performance and safety, or used in the joint development of new products. For near-term production of its construction materials to meet expected demand indicated by a number of homebuilders and developers, Xeriant has been working with contract manufacturers and its supply chain andplans to scale up production with manufacturing partners that have equipment and systems needed to optimize quality and output. If the Company decides to set up its own manufacturing facilities it will need to raise significant capital, which may or may not be available depending on market conditions and other factors. The Company has had ongoing discussions with potential strategic partners and an investment bank interested in financing these facilities and operations through a series of green bond issuances although no engagement agreement has been entered into at this time, primarily waiting for the production of NexBoard through the contract manufacturing and providing samples to potential buyers who have expressed interest.
As a brief background, starting in 2023, the Company began developing its own advanced materials, including proprietary flame-retardant technology for polymers to be deployed in recycled materials. In 2025, the Company began testing a number of production processes to manufacture its eco-friendly, patented, composite construction panel called NexBoard so that it can be competitive in the market and produced on an industrial scale. In early 2025, the Company began working with nanomaterials, which will help to expand the Company’s portfolio of advanced materials and products. During 2025, the Company also began working with a number of leading manufacturers in other industries, interested in incorporating the Company’s technology into their products. The collaboration is ongoing, and Xeriant expects to begin executing licensing agreements during the fourth quarter of 2026, which should generate revenue.
The Company started its certification testing in June 2026, successfully completing 16 different tests as of the date of this report, in the areas of fire performance, thermal performance, impact resistance, mechanical strength, surface and finish performance, indoor air quality, water and moisture resistance, mold/biologic resistance, and chemical and salt spray resistance. Almost all of the third-party testing needed for NexBoard’s use for interior wallboards used in construction have been completed. Because of the exceptional test results, NexBoard will also be marketed for exterior applications as a potentially universal wallboard. NexBoard will be available in varying thicknesses and sizes including standard 4’ x 8’ panels.
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Factor X Research Group
Factor X Research Group is Xeriant's advanced research and innovation engine, that was first publicly announced in November 2025. The concept was created by Brigadier General (Ret.) Blaine D. Holt, Xeriant’s Aerospace and Defense Senior Advisor since 2023, who was appointed as its President. The group's mandate spans sectors where Xeriant sees near-term commercialization potential, including aerospace and defense, advanced construction materials, critical infrastructure, and AI-enabled platforms. Factor X is intended to function not as a single product development program but as a systematic technology evaluation and commercialization engine, identifying breakthrough technologies, assessing their commercial readiness across the technology readiness level spectrum, and positioning the Company to pursue partnerships, licensing arrangements, joint ventures, or acquisitions that accelerate value creation for shareholders. Implementation of this division may require access to substantial capital which the Company does not presently have.
The Company believes that the breadth of Factor X's domain coverage, combined with the cross-sector integration of its findings, creates a differentiated capability that few companies of Xeriant's size possess. Factor X has identified seven mission-critical domains, including Materials Science and Nanotechnology, Aerospace and Advanced Flight Systems, Quantum Computing, Data Security and Encryption, Artificial Intelligence, Advanced Quantum-Based Energy Concepts, and Supply Chain Innovation, each selected because it represents a domain where near-term technical breakthroughs are converging with large, addressable commercial markets. These domains were selected to reflect sectors where the Company believes significant near-term and long-term commercialization potential exists, and where convergence across disciplines can create durable competitive advantage.
In the area of Materials Science and Nanotechnology, Factor X's work directly supported the Company's DUREVER™ brand, which includes NexBoard™ and NexPatch™. The Company's proprietary Durazite™ fire-retardant technology, which originated from aerospace research into fire-resistant polymers for aircraft components, exemplifies the Factor X model: a technology platform that crosses from one industry into another, creating compounding commercial value. In the Aerospace and Advanced Flight Systems domain, Factor X monitors the convergence of autonomous UAV systems, hypersonic propulsion, space-based additive manufacturing, and electric vertical takeoff and landing platforms, with emphasis on dual-use applications across military and commercial markets. In Quantum Computing, the division evaluates near-term commercial viability across drug discovery, financial modeling, logistics optimization, and AI acceleration, tracking hardware architectures and error correction milestones as the field approaches practical deployment. The Data Security and Encryption domain focuses on post-quantum cryptography, zero-trust architectures, and AI-driven threat detection, technologies with urgency given that NIST has established 2030 as the post-quantum security compliance deadline for critical systems. Artificial Intelligence research within Factor X encompasses autonomous robotics, predictive analytics, computer vision, and large language models, with particular attention to manufacturing, defense, healthcare, and financial market applications. The Advanced Quantum-Based Energy Concepts domain investigates quantum-enhanced energy harvesting, next-generation fusion concepts, quantum battery architectures, and topological energy transfer, technologies with potential to fundamentally disrupt global energy infrastructure. Finally, Supply Chain Innovation evaluates AI-driven logistics optimization, blockchain-based provenance tracking, autonomous warehousing, and digital twin supply networks, with an emphasis on supply chain resilience and cost reduction across manufacturing, defense, and global trade.
Factor X is designed to function as a modern counterpart to Lockheed Martin's legendary Skunk Works, uniting elite scientific and engineering talent under a single mission: compress development cycles, integrate breakthrough systems across disciplines, and drive disruptive technologies from early discovery into scalable deployment. The unifying conviction of Factor X is that the most consequential technologies of the next decade will not emerge from within a single discipline, but from the collision of several at once. Factor X identifies, evaluates, and commercializes technologies with transformative potential across defense, critical infrastructure, energy, and industry. The Factor X model is not simply to track emerging technology, but to evaluate it rigorously, identify commercialization pathways, and position Xeriant to capture value at the moment a technology crosses from early stage promise into scalable, deployable reality. The division is composed of a network of world-class experts in science and technology and represents one of the Company's core trademarks: Technologies that Define the Future™. Factor X was established to create a force multiplier where top talent collaborates to shift outdated paradigms and accelerate breakthrough innovation. General Holt's appointment builds on his expanded strategic role within the Company, which includes identifying acquisition candidates and high-impact technologies across artificial intelligence, quantum computing, and data science.
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Industry Overview/Market Opportunity
Advanced Materials
Aerospace innovation has historically served as one of the most consequential drivers of broader scientific and technological progress, producing breakthroughs in polymer chemistry, composites science, fire retardant technology, thermal management, and structural engineering that have ultimately found their way into construction, transportation, healthcare, electronics, and manufacturing. Research initiatives originally developed to solve extreme performance challenges in aircraft design, particularly the need for materials that are simultaneously lightweight, structurally superior, and resistant to heat, flame, and environmental degradation have created the foundation for an entirely new category of commercial materials that are now reshaping industries far beyond aerospace.
The global advanced materials market was valued at approximately $72.3 billion in 2025 and is projected to reach $127.6 billion by 2033, expanding at a compound annual growth rate of approximately 7.4 percent during the forecast period. The U.S. Department of Energy has announced nearly $1 billion in funding to strengthen the domestic critical minerals and advanced materials supply chain, reflecting the national strategic priority placed on this sector. Growth is being driven by simultaneous demand from aerospace and defense, automotive and electric vehicle manufacturing, electronics, energy systems, healthcare, and construction, a cross-sector demand profile that makes advanced materials one of the most broadly addressable markets in the global economy. (Futuredatastats, Research Nester)
One of the most recognized and commercially significant areas within advanced materials is polymer chemistry, encompassing the development of plastic composites, fire retardants, and engineered surface systems. Technical improvements in aircraft design have shifted emphasis from speed and range toward efficiency and sustainability, creating sustained demand for structural materials that are lightweight, flame-resistant, and dimensionally stable across extreme temperature ranges. Plastic composites using carbon fiber are increasingly used in aircraft structural components, displacing aluminum, while aircraft interiors increasingly incorporate engineered polymer panels, flame-resistant materials, and lightweight alloys to reduce overall aircraft weight and improve fuel efficiency. These aerospace-grade material innovations are now being translated into construction and industrial applications, where the performance requirements, namely fire resistance, moisture resistance, structural integrity, and environmental sustainability, map closely onto the performance envelope that aerospace materials were originally developed to satisfy.
Composites represent one of the fastest-growing segments within the advanced materials market, driven by technologies such as additive manufacturing, nanotechnology, and advanced composite engineering that are transforming material design and manufacturing processes. Advanced polymer composites can be fabricated from a broad range of polymer matrices, including polypropylene, polyethylene, polystyrene, polyvinyl chloride, and polyamide, which are inherently water-resistant, and reinforced with materials including fiberglass, carbon fiber, cellulose fiber, various minerals, or wood to provide enhanced mechanical strength. Additives, nanotechnology-enhanced surface systems, and decorative finishes can further enhance properties to achieve fire resistance, mold resistance, chemical resistance, and dimensional stability that conventional materials cannot match. When manufactured at standard commercial dimensions from recycled plastic and fiber waste, these composite panels qualify as green building products, reducing landfill burden, incorporating post-consumer and post-industrial recycled content, and contributing to energy efficiency through improved insulation performance. (Skyquestt)
The construction industry is experiencing accelerating demand for sustainable building practices, which is driving market growth for advanced materials that meet or exceed the performance requirements of conventional building products while addressing their environmental limitations. Green building materials have become a durable and energy-efficient solution applicable across a wide range of infrastructure applications, and new construction of governmental buildings, office complexes, schools, healthcare facilities, and residential structures is increasingly specifying eco-friendly alternatives. The U.S. Leadership in Energy and Environmental Design (LEED) rating system, the most widely used green building certification program in the country, and comparable international programs are creating procurement requirements that favor advanced composite materials over conventional gypsum and wood-based panels. Several major economies have launched programs with subsidies and incentives to promote green construction methods with the goal of delivering affordable, sustainable, and resilient housing at scale. As part of ongoing global infrastructure investment, renovation and retrofit construction programs, including the replacement of aging building envelopes and interior systems, frequently mandate the use of green materials, creating additional near-term demand for performance-superior alternatives to the conventional drywall and wood panel products that currently dominate the construction market.
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The environmental limitations of conventional building materials are increasingly well documented and are becoming codified into regulatory and procurement requirements that accelerate the transition to advanced alternatives. Gypsum-based drywall, when landfilled, can release hydrogen sulfide gas, a toxic, corrosive, and flammable compound that harms air quality, poses serious health risks, and contaminates soil and groundwater. Drywall manufacturing is among the most energy-intensive and carbon-producing processes in the construction materials sector. Wood-based structural panels, including plywood, oriented strand board (OSB), and medium density fiberboard (MDF), contribute to deforestation, which generates approximately 17 percent of global greenhouse gas emissions and incorporate formaldehyde-based resin binder systems that off-gas hazardous air pollutants throughout the service life of the building. The construction industry's growing recognition of these environmental and health liabilities, combined with tightening regulatory standards and the increasing cost of conventional disposal, is creating a structural, long-term market opportunity for performance-superior, environmentally responsible advanced composite materials.
Construction Materials — Wallboards and the NexBoard™ Opportunity
The global market for interior and structural construction panels, encompassing gypsum-based drywall, plywood, OSB, MDF, cement board, and magnesium oxide (MgO) board, represents one of the largest and most mature segments of the global construction materials industry. The global drywall market alone reached approximately $44.8 billion in 2024 and is projected to grow at a compound annual growth rate of approximately 6.2 percent through 2034, reaching nearly $81.7 billion. The global wood-based panel market, encompassing plywood, OSB, MDF, and particleboard, was valued at approximately $260 billion in 2024 and is projected to reach $462 billion by 2033, growing at a CAGR of 6.6 percent. Together, these markets represent a combined addressable opportunity that the Company estimates at approximately $56.7 billion in the United States alone across drywall, plywood, OSB, MDF, and MgO board segments. Despite the size and maturity of these markets, the products that dominate them, gypsum drywall, plywood, and OSB, have seen little fundamental innovation in their core material chemistry for decades, and each carry well-documented performance limitations and environmental liabilities that create a structural opening for a genuinely superior alternative. (Research And Markets, Straits Research)
Gypsum-based drywall, which represents the largest single segment of the interior panel market, is susceptible to moisture damage and mold growth, is among the least structurally capable of any panel in common use, poses significant environmental hazards at end of life through hydrogen sulfide gas release in landfills, and requires a minimum of three coats of joint compound, with associated labor time and material waste, due to the high shrinkage characteristics of conventional finishing compounds. Standard drywall absorbs 25 to 35 percent of its weight in water under 24-hour immersion conditions, delaminating and structurally failing under sustained moisture exposure.
Wood-based panels including plywood, OSB, and MDF carry fire performance limitations that render them unsuitable for commercial and institutional applications without additional protective assemblies; all three fail the demanding NFPA 286 full-room corner burn test outright and are classified Class C or Class B–C under ASTM E84 surface burning testing. OSB and MDF are particularly susceptible to formaldehyde off-gassing from their resin binder systems, posting VOC content of 100 to 300 grams per liter, far exceeding the thresholds required for LEED, EPA, and GREENGUARD certification. MgO board and cement board, while offering some improvement in moisture and fire performance, present significant weight disadvantages, workability limitations, and in the case of certain MgO board formulations, documented long-term moisture absorption and corrosion issues at fastener locations.
NexBoard™, Xeriant's DUREVER™ brand advanced composite wall panel, is the Company's primary commercial product and is designed to address each of these limitations simultaneously across a single panel platform. Manufactured with post-consumer and post-industrial recycled plastic and fiber waste and incorporating the Company's proprietary Durazite™ nanotechnology-enhanced intumescent fire-retardant chemistry, NexBoard has been independently certified through accredited third-party laboratory testing across a comprehensive range of performance standards that collectively position it as a credible candidate for designation as a universal construction panel capable of replacing drywall, plywood, OSB, MDF, MgO board, and cement board across a broad range of construction applications. The Company holds U.S. Patent No. 12,679,047 covering NexBoard's specialized manufacturing process, novel composition, and layering architecture.
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Under fire performance testing, NexBoard achieved a Class A fire rating under ASTM E84 with virtually no flame spread and zero smoke, and passed the demanding NFPA 286 full-room corner burn test with zero smoke and combustion. These results qualify NexBoard for commercial and institutional fire code applications in which OSB, MDF, and plywood cannot be used without additional protective assemblies. Under structural and mechanical performance testing, NexBoard recorded a tensile strength, compressive strength, and fastener pull-through resistance significantly greater than standard drywall. Under impact resistance testing, NexBoard exceeded Level 3, the highest defined impact classification. Under moisture resistance testing, NexBoard recorded only 3.47 percent water absorption compared to 25 to 35 percent for drywall, and remained structurally sound through seven days of continuous immersion, conditions under which conventional drywall undergoes complete structural failure. Under extreme conditioning at 160°F and 97% relative humidity, NexBoard recorded less than one percent moisture absorption after 28 days. NexBoard achieved a perfect score of 10 under the mold resistance test, the highest possible rating, indicating zero mold growth after 28 days. Under chemical resistance testing, NexBoard showed no change after 168-hour exposure to 14 chemical reagents and showed no corrosion at fastener locations after 96 hours of salt spray exposure. Surface layer adhesion testing returned the highest possible rating, indicating that NexBoard's Durazite™ surface layer can immediately accept paint, epoxies, urethanes, and specialty finishes without primer or surface preparation. VOC content measured below the threshold required for EPA, CARB, LEED, and GREENGUARD certification.
This combination of independently certified performance results across fire, structural, moisture, mold, chemical, and environmental categories, and that no single competing product achieves equivalent performance across all of these dimensions simultaneously, supports the Company's positioning of NexBoard as a universal construction panel with the potential to address multiple large, distinct market segments from a single product platform. The Company's near-term commercial strategy as production volume ramps up, is to focus on the residential and commercial construction markets for specialty wallboard applications, with particular emphasis on homebuilders, commercial contractors, restaurant, healthcare and institutional facilities, and coastal and high-humidity applications where NexBoard's moisture and mold resistance provides the most immediate and compelling value proposition relative to conventional materials.
The Company estimates its total addressable U.S. market across the panel categories NexBoard is designed to replace at approximately $56.7 billion. Theinitia. The construction panel market is large, mature, geographically distributed, and supply-chain-intensive, and the Company recognizes that achieving commercial scale may require substantial investment in manufacturing capacity, distribution infrastructure, and market development. The Company believes that NexBoard's certified performance advantages, its sustainability profile as a product manufactured from recycled materials and fully recyclable at end of life, and the growing regulatory and market preference for performance-superior green building materials together represent a durable and strategically significant commercial opportunity.
NexPatch™ - Joint Compound Market Opportunity
NexPatch™, the Company's DUREVER™ brand fire-resistant finishing compound, is the purpose-engineered joint treatment system for NexBoard™ installations and a standalone commercial product addressing a U.S. joint compound market estimated at approximately $940 million in annual revenue. NexPatch is formulated with the same proprietary Durazite™ intumescent fire-retardant chemistry as NexBoard, ensuring that the Class A fire rating and NFPA 286 performance of the NexBoard assembly carry through continuously across every joint, seam, and repair, a capability that no conventional joint compound product can provide. Under independent testing, NexPatch recorded only 0.92 percent shrinkage after 28 days with no surface cracking, compared to shrinkage of 15 to 25 percent by volume for conventional premixed joint compounds, which require a minimum of three application coats and associated drying time to build a flush, finished surface. NexPatch's near-zero shrinkage enables a single-pass application, eliminating the tape coat and multiple filler coats required by standard products, directly reducing labor hours, material consumption, and project completion time. NexPatch also achieved a perfect score of 10 for mold resistance testing, the highest possible rating, and demonstrated zero water absorption on the Durazite™ surface, while conventional joint compounds are fully hydrophilic and disintegrate under sustained moisture exposure. The Company estimates its NexPatch total addressable U.S. market at approximately $940 million.
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Intellectual Property
On March 31, 2023, the Company filed a provisional patent application titled “Multilayered Fire-Resistant Polymer Composite and Method for Producing Same,” for a method of producing a unique fire-resistant thermoplastic and fiber composite material which may be formed or shaped into various construction products of different thicknesses and dimensions. This green material will be composed primarily of recycled plastic, cellulose and ecofriendly fire-retardant chemicals, including but not limited to use in walls, ceilings, flooring, framing, siding, roofing, molding, and decking, used in construction. On April 1, 2024, the Company filed a non-provisional U.S. patent application claiming priority to the filing date of the 2023 related provisional patent application described herein. On March 31, 2026, the Company received a Notice of Allowance issued by the United States Patent and Trademark Office (USPTO) for the Company’s patent application (Serial No. 18/623,359) covering its proprietary technology. The formal patent was issued to Xeriant on July 14, 2026. Just prior to that date, Xeriant filed a continuation patent application seeking additional patent claim coverage for the inventions described in the application, and a PCT (Patent Cooperation Treaty) application, an international patent application that extends the deadline for pursuing patent protection in desired PCT member countries.
The Company owns a 64% interest in its subsidiary, American Aviation Technologies, LLC (“AAT”), which owns a patented VTOL drone/aircraft concept called Halo. All intellectual property rights to Halo, including patents and applications for patents, were acquired on October 2, 2018. A Halo utility patent was filed on September 28, 2018, which was a continuation of U.S. Patent Application Serial No. 12/157,180, filed June 5, 2008, which claimed the benefit of and priority to U.S. Patent Application Serial No. 60/941,965, filed June 5, 2007, with both prior applications fully incorporated in their entireties and for all purposes. With respect to the first and subsequent utility patent application filings we have received the following U.S. Patents, namely, U.S. Patent No. 10,450,063 issued on October 22, 2019; U.S. Patent No. 10,814,974 issued on October 27,2020; and U.S. Patent No. 11,597,512 issued on March 7, 2023.
The Company has been issued registered trademarks for the name Xeriant and for the tag line “Innovation Soaring.” The following trademark applications have been filed with the U.S. Patent and Trademark office and are pending: “Evolution in Flight,” “NexBoard™,” “Technologies that define the future,” “DUREVER™,” “NexPatch,” and “NexWool.” “Durazite,” “Nex-Gen of Building Materials,” and another Xeriant application are in the process of being filed.
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CONSIDERATIONS RELATED TO OUR BUSINESS
Item 1A. Risk Factors
An investment in our common stock involves a high degree of risk. Before making an investment decision, you should give careful consideration to the following risk factors, including our financial statements and related notes, before deciding whether to invest in shares of our common stock. The occurrence of any of the adverse developments described in the following risk factors could materially and adversely harm our business, financial condition, results of operations or prospects. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment.
RISKS RELATING TO OUR FINANCIAL POSITION AND CAPITAL NEEDS
We are in our development stage and have a limited operating history.
We are a development-stage enterprise with a limited operating history with no sales, and operating losses since its inception. We will need to continue building our organization and team to competently evaluate and secure business opportunities for the development of sophisticated technologies. As an early-stage business we will likely encounter unforeseen costs, expenses, competition and other problems to which such businesses are often subject. Our likelihood of success will depend on the problems, uncertainties, unexpected costs, difficulties, complications and delays frequently encountered in developing and expanding a new business and the competitive environment in which we plan to operate. If we fail to successfully address these risks, our business, financial condition and results of operations would be materially harmed.
We anticipate operating losses to continue into the foreseeable future and substantial additional capital may be required that may not be available on acceptable terms.
Currently, there is no revenue being generated and we have significant operating losses that are expected to continue into the foreseeable future. There is no assurance that we will be able to raise the capital that will be required to commence and sustain operations and execute our business plan, which involves raising capital for acquisitions as well as developing and commercializing technologies. We are especially focused on the green construction materials business, namely DUREVER™ building products, which includes a line of composite products primarily made from recycled thermoplastics, reinforcement materials and fire-retardant chemicals for use in walls, ceilings, flooring, framing, siding, roofing, molding and decking. The production of green building materials requires establishing manufacturing operations in the United States, whether through contract manufacturing or setting up our own facilities. Should we be unable to raise sufficient capital required to set up manufacturing facilities to produce NexBoardTM products, we would lose the ability to deliver NexBoard to interested buyers and incur continued operating losses.
We expect capital outlays and operating expenditures to increase as we expand our product offerings and marketing activities. Our business or operations may change in a manner that would consume available funds more rapidly than anticipated, and substantial additional funding may be required to maintain operations, fund expansion, develop new or enhanced products or services, acquire complementary products, businesses or technologies or otherwise respond to competitive pressures and opportunities. Furthermore, any equity or debt financings, if available at all, may be on terms which are not favorable to the Company (and therefore its shareholders) and, in the case of a new equity offering by the Company, existing shareholders will be diluted unless they purchase their proportionate share of the equity offering. If adequate capital is not available on economically viable terms and conditions, the Company’s business, operating results and financial condition may be materially adversely affected.
The high capital requirements of building materials manufacturing may require us to seek large-scale financing, including potential green bond financing or similar structured debt instruments, that may not be available on terms acceptable to us or at all.
Our long-term manufacturing strategy contemplates the potential use of large-scale financing structures, including green bond financing or similar instruments, to fund dedicated NexBoard manufacturing facilities and equipment. Green bond financing is subject to certification requirements, use-of-proceeds restrictions, and ongoing reporting obligations that could restrict our operational flexibility. If market conditions change, interest rates rise materially, investor appetite for green bond instruments declines, or our financial condition or project economics do not meet underwriting standards, we may be unable to complete such financing on acceptable terms or at all. The failure to secure large-scale manufacturing financing when needed could prevent us from scaling production to meet commercial demand, resulting in the loss of customer orders, damage to our market reputation, and material harm to our business and financial condition.
We will need to resolve the obligations required by the Auctus Fund LLC Senior Secured Note.
The Company has a Senior Secured Promissory Note with Auctus Fund LLC (“Auctus”), which became due and payable on March 15, 2023, after two Amendments. Effective October 29, 2025, Xeriant entered into a Settlement Agreement with Auctus to restructure the Auctus Note and related Xeriant obligations. The Settlement Agreement terms were extended through October 31, 2026. If Auctus elects to convert the note into shares of our Common Stock, our shareholders could experience substantial dilution.
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Not obtaining sufficient financing will jeopardize our operations and the ability to execute our business plan.
We need to raise additional debt and/or equity financing to fund future operations and to provide working capital. However, there is no assurance that such financing will be consummated or obtained in sufficient amounts necessary to meet our needs. If cash resources are insufficient to satisfy our on-going cash requirements, the Company will be required to scale back or discontinue its product development programs or obtain funds if available (although there can be no certainties) through strategic alliances that may require us to relinquish rights to its technology, substantially reduce or discontinue its operations entirely. No assurance can be given that any future financing will be available or, if available, that it will be in terms that are satisfactory to us. Even if we are able to obtain financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in the case of equity financing. As a result, we can provide no assurance as to whether or if we will ever be profitable. If we are not able to achieve and maintain profitability, the value of our company and our common stock could decline significantly.
Our recurring operating losses have raised substantial doubt regarding our ability to continue as a going concern.
Our recurring operating losses raise substantial doubt about our ability to continue as a going concern. This condition is expected to continue for the foreseeable future until we can produce sufficient revenues to cover our costs as we seek to raise funding and invest in our operations as well as our sales and marketing efforts. Given this financial situation, no assurance can be given that we will be able to raise capital in the future on acceptable terms, or at all. As a result, our independent registered public accounting firm included an explanatory paragraph in its report in our consolidated financial statements for the most recent fiscal years with respect to this uncertainty. The perception of our ability to continue as a going concern may make it more difficult for us to obtain financing for the continuation of our operations and could result in the loss of confidence of investors, partners and employees.
RISKS RELATING TO OUR BUSINESS OPERATIONS
Our business is substantially concentrated in the building materials industry, and adverse conditions in that industry could materially harm our results of operations.
A substantial portion of our anticipated revenues and commercial activities is dependent on the construction and building materials industry, and specifically on the market for interior and exterior wall panels, and finishing compounds for residential, commercial, and institutional construction applications. Accordingly, our business is subject to risks specific to that industry, including cyclical downturns in residential and commercial construction activity driven by rising interest rates, declining housing starts, reduced consumer spending, tightening credit conditions, and adverse real estate market conditions. Construction activity is historically one of the most interest-rate-sensitive sectors of the economy, and periods of elevated borrowing costs can suppress new construction starts for sustained periods. In addition, our anticipated customer base, including homebuilders, commercial contractors, institutional facility managers, and building material distributors, is itself subject to economic pressures that could delay or reduce purchasing decisions. Our heavy concentration in a single industry means that we do not have diversified revenue streams that could offset a downturn in building materials demand. If construction activity declines materially, or if our target customer segments reduce capital expenditures or defer purchasing decisions, our revenues, cash flow, and results of operations could be materially and adversely affected.
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Widespread acceptance of NexBoard™ as a replacement for conventional building materials may be slow, uncertain, and more costly than anticipated due to established procurement relationships and resistance to change.
The construction industry is characterized by deeply entrenched purchasing habits, long-standing supplier relationships, established specification standards, and significant institutional resistance to the adoption of new materials, even when those materials offer demonstrably superior performance characteristics. Builders, contractors, architects, and building owners often default to familiar materials, including drywall, plywood, and OSB, not because those materials are optimal but because they are familiar, widely distributed, and supported by established installation practices, workforce training, and supply chain infrastructure. Gaining acceptance of NexBoard as a substitute for these conventional materials will require extensive education of architects, specifiers, contractors, and building inspectors; investment in training programs for installation crews; inclusion in building codes and specification guides that currently reference only conventional materials; and a sustained period of demonstrated field performance to build market confidence. We may encounter resistance from established industry participants, including drywall manufacturers, distribution networks, and trade organizations, who may have economic interests in maintaining the status quo. Even if NexBoard's technical performance advantages are widely recognized, the transition from awareness to specification to procurement to widespread adoption may take significantly longer and require significantly more marketing and business development investment than we currently anticipate. If we are unable to achieve broad industry acceptance within a commercially reasonable timeframe, our ability to generate revenues and reach profitability could be materially and adversely affected.
The manufacture of NexBoard™ at commercial scale requires substantial capital investment that we may be unable to raise on acceptable terms or at all.
The transition from contract manufacturing to dedicated, internally operated manufacturing facilities capable of producing NexBoard at commercial scale requires substantial capital investment in specialized equipment, which may include injection molding tooling and equipment, sheet extrusion equipment, coating systems equipment, and associated production infrastructure. A fully operational, dedicated manufacturing facility capable of meeting anticipated market demand would require capital outlays that significantly exceed our current resources and near-term financing plans. The specialized nature of the equipment required means that off-the-shelf solutions are not available and lead times for custom equipment procurement are extended. If we are unable to raise the capital necessary to fund manufacturing infrastructure on terms that are economically viable, or if equipment procurement, installation, and commissioning encounters delays, cost overruns, or technical challenges, our ability to fulfill commercial orders, meet customer commitments, and scale revenues could be severely impaired. Additionally, the construction of or transition to owned manufacturing facilities will introduce fixed cost structures, lease or mortgage obligations, and employee headcount that could increase our operating losses in the near term before manufacturing scale and revenue growth provide adequate cost coverage.
Our reliance on contract manufacturing introduces risks of quality control, production capacity, delivery reliability, and confidentiality that are outside of our direct control.
We depend on contract manufacturing partners for the production of NexBoard This reliance introduces risks that we cannot fully control or mitigate, including the risk that our contract manufacturers may not maintain the quality standards required to produce NexBoard to our specifications, experience capacity constraints that limit our ability to fulfill customer orders, fail to meet delivery timelines that could damage our customer relationships, or, in the case of the termination of a manufacturing relationship, leave us without production capacity for an extended period while we identify and qualify alternative manufacturers. Contract manufacturing relationships are also subject to the risk that the manufacturer could, intentionally or inadvertently, disclose, replicate, or reverse-engineer our proprietary Durazite™ formulation or manufacturing processes, which could compromise our competitive position even if those processes are protected by our U.S. Patent No. 12,679,047. While we believe our patent provides meaningful protection, the risk of trade secret misappropriation in a contract manufacturing environment is inherently difficult to eliminate entirely.
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We face pricing pressure from established, well-capitalized competitors in the construction materials market who benefit from economies of scale, entrenched distribution networks, and lower per-unit production costs.
Our primary competitors in the construction panel market, manufacturers of gypsum drywall, plywood, OSB, and MDF, include some of the largest building materials companies in the world. These companies benefit from fully depreciated manufacturing facilities, decades of production optimization, established nationwide distribution infrastructure, existing relationships with major homebuilders and commercial contractors, and per-unit production costs that reflect the advantages of very high-volume manufacturing. NexBoard, as a new entrant with a novel material composition and manufacturing process, is unlikely to achieve comparable per-unit costs in the near to medium term, and we may face pricing pressure from incumbent products whose manufacturers are willing to reduce margins to defend their market position. If we are unable to price NexBoard competitively relative to conventional alternatives while still maintaining margins sufficient to support our operations, or if established competitors respond to NexBoard's market entry with aggressive pricing strategies, our commercial prospects and financial condition could be materially and adversely affected.
Our products may be subject to building code approval processes, certification requirements, and regulatory compliance obligations that could delay or restrict commercialization.
The construction materials industry is subject to extensive building codes, fire safety regulations, environmental regulations, and product certification requirements at the federal, state, and local levels, including the International Building Code, NFPA standards, EPA and CARB VOC emission standards, and LEED certification requirements. NexBoard has obtained a number of important independent laboratory certifications, including ASTM E84 Class A fire rating and NFPA 286 passage, but there is no assurance that NexBoard will be accepted in all jurisdictions without additional testing, local code approval processes, or product listing by recognized testing laboratories such as UL or ICC-ES. Building inspectors and local authorities having jurisdiction may be unfamiliar with composite polymer panels and may require additional documentation, testing, or approvals before allowing NexBoard to be installed in buildings subject to their oversight. Any delays in obtaining required local approvals, or any failure to obtain or maintain necessary certifications, could restrict our ability to market and sell NexBoard in affected markets and could materially harm our revenues and competitive position.
Our operations and products may be subject to environmental, health, and safety regulations that could increase our costs or restrict our operations.
The manufacture of NexBoard incorporates recycled thermoplastics, fire-retardant chemicals, and nanotechnology-enhanced materials that may be subject to environmental, health, and safety regulations at the federal, state, and local levels, including regulations administered by the Environmental Protection Agency, the Occupational Safety and Health Administration, and state environmental agencies. Changes in applicable environmental regulations, including regulations relating to chemical manufacturing, volatile organic compounds, nanomaterial handling and disclosure, and end-of-life product disposal, could require us to modify our manufacturing processes, reformulate our products, or incur additional compliance costs. Although we believe our products are designed to meet or exceed current environmental standards, we cannot predict the nature or timing of future regulatory changes that could affect our products or operations.
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If we are unable to effectively manage our growth, our ability to implement our business strategy and our operating results will likely be materially adversely affected.
Implementation of our business plan will place a significant strain on our management who must develop administrative, operating and financial infrastructures. To manage our business and planned growth effectively, we must successfully develop, implement, maintain and enhance our financial and accounting systems and controls, identify, hire and integrate new personnel and manage expanded operations. Salaries and benefits of additional personnel can be expected to place significant stress on our financial condition and the availability of such qualified personnel may be limited. There is no assurance that we will be able to manage the operational requirements related to implementing our business strategy.
We are dependent on key personnel.
Our success depends on our ability to identify, hire, train and retain highly qualified, specialized and experienced management and technical personnel. In addition, as we enter new areas of technology, we will need to hire additional highly skilled personnel. Competition for personnel with the required knowledge, skill and experience may be significant, and we may not be able to attract, assimilate or retain such personnel. The inability to attract and retain the necessary managerial and technical personnel could have a material adverse effect on our business, results of operations and financial condition.
Operations could be adversely affected by interruptions from suppliers of components that are beyond our control.
Our technology, product development and sales could be adversely affected by interruptions in the supply of necessary components which are sourced from a variety of domestic and international vendors, suppliers and distributors, especially chemicals. We are also dependent upon third parties to timely deliver supplies that meet our specifications at competitive prices. Shortages or interruptions in the supply of these items, including electronic components, raw materials and chemicals could adversely affect the availability, quality and cost of items we sell. If such shortages result in increased cost of our supplies, we may not be able to pass along all of such increased costs to our customers. Such shortages or disruptions could be caused by transportation issues, inclement weather, natural disasters, increased demand, problems in production or distribution, restrictions on imports or exports, the inability of vendors to obtain credit, political instability in the countries in which suppliers and distributors are located, the financial instability of suppliers and distributors, suppliers’ or distributors’ failure to meet our standards, product quality issues, inflation, the price of gasoline, other factors relating to the suppliers and distributors and the countries in which they are located, safety regulations, warnings or advisories or the prospect of such pronouncements, the cancellation of supply or distribution agreements or an inability to renew such arrangements or to find replacements on commercially reasonable terms, or other conditions beyond our control. A shortage or interruption in the availability of certain electronic components, like servos and switchboards for industrial manufacturing equipment, chemicals, raw materials or supplies could increase costs and limit the availability of products critical to our operations, which in turn could lead to a significant reduction in our revenue.
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Changes in the economy could have a detrimental impact on the Company.
Changes in the general economic climate could have a detrimental impact on our revenue. It is possible that recessionary pressures and other economic factors (such as declining incomes, future potential rising interest rates, higher unemployment and tax increases) may adversely affect the Company. A worsening economy such as we experienced due to the Covid-19 pandemic may have a material adverse effect on our financial results and on your investment.
Our business, results of operations and financial condition may be adversely impacted by pandemics or other significant public health conditions.
The COVID-19 pandemic negatively affected the U.S. and global economy several years ago, resulting in significant travel restrictions, including mandated closures and orders to “shelter-in-place,” and created significant disruption of supply chains and the financial markets. The extent to which our operations may be impacted by the re-occurrence of this pandemic or other public health conditions cannot be accurately predicted, including actions by government authorities to contain an outbreak or treat its impact. We may experience materially adverse impacts on our business due to a number of potential economic conditions. The impact of significant public health conditions may also exacerbate other risks discussed in these risk factors, any of which could have a material effect on us.
Our success is dependent upon our keeping pace with the advances in technology.
We are positioned as a technology company. Some of our initiatives will be dependent on the technology of other companies. Systems and components may be impacted by rapid changes in technology, including the emergence of new industry standards and practices that could require us to make modifications to its platform. Our performance will depend, in part, on our ability to continue to enhance our existing technology or develop new technology that addresses the increasingly sophisticated and varied needs of the market, license leading technologies and respond to technological advances and emerging industry standards and practices on a timely and cost-effective basis. The development of our proprietary technology entails significant technical as well as business risks. We may be unsuccessful in using new technologies effectively or adapting its systems or other proprietary technology to the requirements of emerging industry standards. If we are unable to adapt to these changes and demands, our results of operations and financial condition could be materially and adversely affected.
We could face liability or disruption from security breaches.
Our technology and development process involves the storage of critical, secure and proprietary information. Our communications and computer infrastructure are potentially vulnerable to both physical and electronic invasions, such as cyberattacks and security breaches. We may be required to expend significant capital and other resources to defend against and lessen or correct the adverse effects of these invasions. Any such invasion could result in significant damage to us. A person who is able to circumvent the security measures employed by us could capture proprietary information; alter or destroy our information; or cause interruptions of our operations.
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Litigation may adversely affect our business, financial condition, and results of operations.
From time to time in the normal course of our business operations, we may become subject to litigation that may result in liability material to our financial statements as a whole or may negatively affect our operating results if changes to our business operations are required. The cost to defend such litigation may be significant and may require a diversion of our resources. There also may be adverse publicity associated with litigation that could negatively affect customer perception of our business, regardless of whether the allegations are valid or whether we are ultimately found liable. Insurance may not be available at all or in sufficient amounts to cover any liabilities with respect to these or other matters. A judgment or other liability in excess of our insurance coverage for any claims could adversely affect our business and the results of our operations.
Our insurance coverage may be inadequate to cover all significant risk exposures.
While we intend to maintain insurance for certain risks, the amount of our insurance coverage may not be adequate to cover all claims or liabilities, and we may be forced to bear substantial costs resulting from risks and uncertainties of our business. It is also not possible to obtain insurance to protect against all operational risks and liabilities. The failure to obtain adequate insurance coverage on terms favorable to us, or at all, could have a material adverse effect on our business, financial condition, and results of operations. We do not have any business interruption insurance. Any business disruption could result in substantial costs and diversion from executing our business plan.
RISKS RELATED TO OUR DEPENDENCE ON THIRD PARTIES
We may fail to retain or recruit necessary personnel, and we may be unable to secure the services of consultants.
As of the date of this filing, our management team of four people is currently paid as consultants or independent contractors. We also have engaged and plan to continue to engage outside consultants called Senior Advisors to advise us and have been and will be required to retain additional consultants and employees. Our future performance will depend in part on our ability to successfully integrate newly hired officers into our management team and our ability to develop an effective working relationship among senior management.
Certain of our directors, officers, advisors, and consultants serve as officers, directors, advisors, or consultants of other companies that might be developing competitive products. Other than corporate opportunities, none of our directors are obligated under any agreement or understanding with us to make any additional products or technologies available to us. Similarly, we can give no assurance, and we do not expect, and stockholders should not expect, that any product or technology identified by any of our directors or affiliates in the future would be made available to us other than corporate opportunities. We can give no assurance that any such other companies will not have interests that are in conflict with its interests.
Losing key personnel or failing to recruit necessary additional personnel would impede our ability to attain our development objectives. There is intense competition for qualified personnel in the technology field, and we may not be able to attract and retain the qualified personnel we need to develop our business.
We rely on independent organizations, advisors and consultants to perform certain services for us, including handling substantially all aspects of regulatory approval, manufacturing, marketing, and sales. We expect that this will continue to be the case. Such services may not always be available to us on a timely basis.
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We may be subject to claims that our consultants or independent contractors have wrongfully used or disclosed alleged trade secrets of their other clients or former employers to us.
As is common in the technology industry, we engage the services of consultants to assist in the development of our products. Many of these consultants were previously employed at or may have previously been or are currently providing consulting services to other technology companies, including our competitors or potential competitors. We may become subject to claims that we or our consultants have inadvertently or otherwise used or disclosed trade secrets or other proprietary information about our former employers or their former or current customers. Litigation may be necessary to defend against these claims. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management.
RISKS RELATED TO OUR INTELLECTUAL PROPERTY
Unauthorized disclosure or reverse engineering of our proprietary fire-retardant formulation could materially compromise our competitive position, even if patent protection is in place.
Our competitive advantage is substantially dependent on our proprietary fire-retardant formulation, which is incorporated into both NexBoard™ and NexPatch™. While we hold U.S. Patent No. 12,679,047 covering our specialized manufacturing process, novel composition, and layering architecture, the value of that patent protection is limited by our ability to detect and pursue infringement, and by the scope of the patent claims relative to alternative formulations that competitors might develop. Patent protection does not prevent competitors from independently developing alternative materials that achieve similar performance characteristics through different chemical approaches, nor does it prevent the misappropriation of trade secrets and know-how that is not captured within the patent claims. If our proprietary formulation were reverse engineered, disclosed by a former employee, consultant, or contract manufacturer, or independently replicated by a well-resourced competitor, our competitive differentiation could be substantially reduced and our investment in research and development could be significantly devalued. We may not detect such misappropriation until significant commercial harm has already occurred, and the cost and uncertainty of litigation to enforce our rights could be prohibitive.
Third parties may challenge the validity or enforceability of U.S. Patent No. 12,679,047, and an adverse outcome could materially harm our competitive position and commercial prospects.
We hold U.S. Patent No. 12,679,047, which we believe provides meaningful protection for key aspects of NexBoard's manufacturing process and composition. However, this patent may be challenged through post-grant proceedings at the U.S. Patent and Trademark Office, including inter partes review and post-grant review, or through invalidity claims raised as defenses in litigation. The outcome of patent validity proceedings is inherently uncertain, and a determination that our patent is invalid, unenforceable, or narrower in scope than we believe could significantly weaken our ability to prevent competitors from manufacturing and selling products that compete directly with NexBoard. In addition, because our patent was issued in connection with a novel and proprietary process, and because the prior art landscape in polymer composites and fire-retardant chemistry is complex, there is a risk that prior art exists of which we are unaware that could be cited against our patent in a validity challenge. Any such challenge, regardless of its ultimate outcome, could require us to expend significant financial and management resources in defense, and could create uncertainty regarding our intellectual property position that negatively affects investor confidence, partnership discussions, and commercial relationships.
If competitors develop products that design around our patents or independently achieve comparable performance characteristics, our competitive advantages may be diminished.
Our existing patent covers specific aspects of NexBoard's manufacturing process, composition, and layering architecture. It may be possible for competitors, particularly well-resourced building materials manufacturers or chemical companies, to develop composite panel products that achieve performance characteristics similar to NexBoard through alternative polymer matrices, different fire-retardant chemistries, or modified manufacturing processes that do not infringe our patent claims. The construction materials market has a history of rapid product innovation, and if a large, established manufacturer were to develop a competing product with comparable or superior performance, that competitor's existing manufacturing scale, distribution infrastructure, and customer relationships would represent significant competitive advantages over us. We cannot assure that our patent protection will be sufficient to prevent such competitive development or to maintain our current performance-based differentiation over the long term. We will also rely on trade secrets, know-how and technology, which are not protected by patents, to maintain our competitive position. We will seek to protect this information by entering into confidentiality agreements with parties that have access to it, such as strategic partners, collaborators, employees, contractors and consultants. Any of these parties may breach these agreements and disclose our confidential information or our competitors might learn of the information in some other way. If any trade secret, know-how or other technology not protected by a patent were disclosed to, or independently developed by, a competitor, our business, financial condition and results of operations could be materially adversely affected.
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We may incur substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property rights, as well as costs associated with lawsuits.
If any other person filed patent applications, or is issued patents, claiming technology also claimed by us, we may be required to participate in interference or derivation proceedings in the U.S. Patent and Trademark Office to determine priority and/or ownership of the invention. Our licensors or we may also need to participate in interference proceedings involving issued patents and pending applications of another entity.
The intellectual property environment in our industry is particularly complex, constantly evolving and highly fragmented. Other companies and institutions have issued patents and have filed or will file patent applications that may issue into patents that cover or attempt to cover products, processes or technologies similar to ours. We have not conducted freedom-to-use patent searches on all aspects of our product candidates or potential product candidates and may be unaware of relevant patents and patent applications of third parties. In addition, the freedom-to-use patent searches that have been conducted may not have identified all relevant issued patents or pending patent applications. We cannot provide assurance that our proposed products in this area will not ultimately be held to infringe one or more valid claims owned by third parties which may exist or come to exist in the future or that in such case we will be able to obtain a license from such parties on acceptable terms.
We cannot guarantee that our technologies will not conflict with the rights of others. In some foreign jurisdictions, we could become involved in opposition proceedings, either by opposing the validity of others’ foreign patents or by persons opposing the validity of our foreign patents.
We may also face frivolous litigation or lawsuits from various competitors or from litigious securities attorneys. The cost of any litigation or other proceeding relating to these areas, even if deemed frivolous or resolved in our favor, could be substantial and could distract management from its business. Uncertainties resulting from initiation and continuation of any litigation could have a material adverse effect on our ability to continue our operations.
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We cannot be certain we will be able to obtain patent protection to protect our product candidates and technology.
We cannot be certain that all patents applied for will be issued. If a third party has also filed a patent application relating to an invention claimed by us or one or more of our licensors, we may be required to participate in an interference or derivation proceeding declared or instituted by the United States Patent and Trademark Office, which could result in substantial uncertainties and cost for us, even if the eventual outcome is favorable to us. The degree of future patent protection for our product candidates and technology is uncertain. For example:
| ● | we, or our licensors, might not have been the first to make the inventions covered by our issued patents, or pending or future patent applications; |
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| ● | we, or our licensors, might not have been the first to file patent applications for the inventions; |
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| ● | others may independently develop duplicative, similar or alternative technologies; |
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| ● | it is possible that our patent applications will not result in an issued patent or patents, or that the scope of protection granted by any patents arising from our patent applications will be significantly narrower than expected; |
| ● | any patents under which we hold ultimate rights may not provide us with a basis for commercially viable products, may not provide us with any competitive advantages or may be challenged by third parties as not infringed, invalid, or unenforceable under United States or foreign laws; |
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| ● | any patent issued to us in the future or under which we hold rights may not be valid or enforceable; or |
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| ● | we may develop additional technologies that are not patentable, and which may not be adequately protected through trade secrets; for example, if a competitor independently develops duplicative, similar, or alternative technologies. |
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In addition, disputes may arise regarding intellectual property subject to a license agreement, including:
| ● | the scope of rights granted under the license agreement and other interpretation-related issues; |
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| ● | the extent to which our technology, products, methods and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; |
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| ● | our diligence obligations under the license agreement and what activities satisfy those obligations; |
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| ● | if a third party expresses interest in an area under a license that we are not pursuing, under the certain terms of our license agreement, we may be required to sublicense rights in that area to the third party, and that sublicense could harm our business; and |
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| ● | the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us. |
If disputes over the intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates.
We may need to obtain licenses from third parties to advance our research to allow commercialization of our product candidates. We may fail to obtain any of these licenses at a reasonable cost or on reasonable terms, if at all. In that event, we would be unable to further develop and commercialize one or more of our product candidates, which could harm our business significantly.
We may infringe the intellectual property rights of others, which may prevent or delay our product development efforts and stop us from commercializing or increase the costs of commercializing our product candidates.
Our success will depend in part on our ability to operate without infringing the proprietary rights of third parties. We cannot guarantee that our products or product candidates, or manufacture or use of our products or product candidates, will not infringe third-party patents. Furthermore, a third party may claim that we are using inventions covered by the third party’s patent rights and may go to court to stop us from engaging in our normal operations and activities, including making or selling our product candidates or products. These lawsuits are costly and could affect our results of operations and divert the attention of managerial and scientific personnel. Some of these third parties may be better capitalized and have more resources than us. There is a risk that a court could decide that we are infringing the third party’s patents and would order us to cease the activities covered by the patents. In that event, we may not have a viable way to get around the patent and may need to halt commercialization of the relevant product candidate(s) or product(s). In addition, there is a risk that a court will order us to pay the other party damages for having violated the other party’s patents. In addition, we may be obligated to indemnify our licensors and collaborators against certain intellectual property infringement claims brought by third parties, which could require us to expend additional resources. The aerospace and technology industries have produced a proliferation of patents, and it is not always clear to industry participants, including us, which patents cover various types of products or methods. The coverage of patents is subject to interpretation by the courts, and the interpretation is not always uniform.
If we are sued for patent infringement, we would need to demonstrate that our products or methods either do not infringe the claims of the relevant patent or that the patent claims are invalid or unenforceable, and we may not be able to do this. Proving invalidity is difficult. For example, in the United States, proving invalidity requires a showing of clear and convincing evidence to overcome the presumption of validity enjoyed by issued patents. Even if we are successful in these proceedings, we may incur substantial costs and divert management’s time and attention in pursuing these proceedings, which could have a material adverse effect on us. If we are unable to avoid infringing the patent rights of others, we may be required to seek a license, which may not be available, and then we will have to defend an infringement action or challenge the validity of the patent in court. Patent litigation is costly and time consuming. We may not have sufficient resources to bring these actions to a successful conclusion. In addition, if we do not obtain a license, fail to develop or obtain non-infringing technology, fail to defend an infringement action successfully or have infringed patents declared invalid or unenforceable, we may incur substantial monetary damages, encounter significant delays in bringing our product candidates to market and be precluded from manufacturing or selling our product candidates.
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We cannot be certain that others have not filed patent applications for technology covered by our pending applications, or that we were the first to invent the technology, because:
| ● | some patent applications in the United States may be maintained in secrecy until the patents are issued; |
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| ● | patent applications in the United States are typically not published until 18 months after the priority date; and |
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| ● | publications in scientific literature often lag behind actual discoveries. |
Our competitors may have filed, and may in the future file, patent applications covering technology similar to ours. Any such patent applications may have priority over our patent applications, which could further require us to obtain rights to issued patents covering such technologies. If another party has filed US patent applications on inventions similar to ours that claims priority to any applications filed prior to the priority dates of our applications, we may have to participate in an interference proceeding declared or a derivation proceed instituted by the USPTO to determine priority of invention in the United States. The costs of these proceedings could be substantial, and it is possible that such efforts would be unsuccessful if, unbeknownst to us, the other party had independently arrived at the same or similar inventions prior to our own inventions, resulting in a loss of our U.S. patent position with respect to such inventions. Other countries have similar laws that permit secrecy of patent applications, and thus the third party’s patent or patent application may be entitled to priority over our applications in such jurisdictions.
Some of our competitors may be able to sustain the costs of complex patent litigation more effectively than we can because they have substantially greater resources. In addition, any uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect on our ability to raise the funds necessary to continue our operations.
We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed alleged trade secrets.
As is common in the aerospace and technology industries, we may employ individuals who were previously employed at aerospace and technology companies, including our competitors or potential competitors. Although we try to ensure that our employees, consultants and independent contractors do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of their former employers. Litigation may be necessary to defend against these claims. If we fail to defend any such claims, in addition to paying monetary damages, we could lose valuable intellectual property rights or personnel, which could adversely impact our business. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management.
If we are not able to protect and control our unpatented trade secrets, know-how and other technological innovation, we may suffer competitive harm.
We also rely on proprietary trade secrets and unpatented know-how to protect our research and development activities, particularly when we do not believe that patent protection is appropriate or available. However, trade secrets are difficult to protect. We will attempt to protect our trade secrets and unpatented know-how by requiring our employees, consultants, collaborators, and advisors to execute a confidentiality and non-use agreement. We cannot guarantee that these agreements will provide meaningful protection, that these agreements will not be breached, that we will have an adequate remedy for any such breach, or that our trade secrets will not otherwise become known or independently developed by a third party. Our trade secrets, and those of our present or future collaborators that we utilize by agreement, may become known or may be independently discovered by others, which could adversely affect the competitive position of our product candidates.
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RISKS RELATED TO OWNING OUR COMMON STOCK
We do not intend to pay cash dividends on our common stock in the foreseeable future.
We currently anticipate that we will retain all future earnings, if any, to finance the growth and development of our business and do not anticipate paying cash dividends on our common stock in the foreseeable future. Any payment of cash dividends will depend upon our financial condition, capital requirements, earnings and other factors deemed relevant by our board of directors.
If we are unable to establish appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations, result in the restatement of our financial statements, harm our operating results, subject us to regulatory scrutiny and sanction, cause investors to lose confidence in our reported financial information and have a negative effect on the market price for shares of our Common Stock.
Effective internal controls are necessary for us to provide reliable financial reports and to effectively prevent fraud. We maintain a system of internal control over financial reporting, which is defined as a process designed by, or under the supervision of, our principal executive officer and principal financial officer, or persons performing similar functions, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
As a public company, we have significant additional requirements for enhanced financial reporting and internal controls. We are required to document and test our internal control procedures in order to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, which requires annual management assessments of the effectiveness of our internal controls over financial reporting. The process of designing and implementing effective internal controls is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to expend significant resources to maintain a system of internal controls that is adequate to satisfy our reporting obligations as a public company.
We cannot assure you that we will, in the future, identify areas requiring improvement in our internal control over financial reporting. We cannot assure you that the measures we will take to remediate any areas in need of improvement will be successful or that we will implement and maintain adequate controls over our financial processes and reporting in the future as we continue our growth. If we are unable to establish appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations, result in the restatement of our financial statements, harm our operating results, subject us to regulatory scrutiny and sanction, cause investors to lose confidence in our reported financial information and have a negative effect on the market price for shares of our Common Stock.
The price of our common stock may be volatile and fluctuate substantially.
Our stock price has been and is likely to continue to be volatile. The stock market in general and the market for companies with smaller public floats in particular have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. As a result of this volatility, our stockholders may not be able to sell our common stock at or above the price they paid for it. The market price for our common stock may be influenced by many factors, including:
| · | the timing, results and capacity of our manufacturing operations; |
| · | the success of existing or new competitive products or technologies; |
| · | announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures, collaborations or capital commitments; |
| · | establishment or termination of collaboration of our joint ventures or development programs; |
| · | failure of discontinuation of any of our development programs; |
| · | the success of our competitors’ new products entering the marketplace; |
| · | regulatory or legal developments in the United States and other countries; |
| · | developments or disputes concerning patent applications, issued patents or other proprietary rights; |
| · | the recruitment or departure of key personnel; |
| · | the level of expenses related to any of our product candidates or development programs; |
| · | the results of our efforts to discover, develop, acquire or license additional products; |
| · | actual or anticipated changes in estimates as to financial results or production and development timelines; |
| · | announcement or expectation of additional financing efforts; |
| · | sales of our common stock by us, our insiders or other stockholders; |
| · | variations in our financial results or those of companies that are perceived similar to us; |
| · | changes in estimates or recommendations by securities analysts, if any, that cover our stock; and |
| · | general economic, industry and market conditions. |
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Our directors and executive officers can exert significant control over our business and affairs and have actual or potential interests that may depart from those of investors in the subsequent financings.
The interests of our directors and officers may differ from the interests of our other stockholders, including purchasers of our securities, in future financings. As a result, based on their board seats and offices, such persons will have significant influence over and control all corporate actions requiring stockholder approval, irrespective of how the Company’s other stockholders, may vote, including the following actions:
| ● | to elect or defeat the election of our directors; |
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| ● | to amend or prevent amendment of our Amended and Restated Articles of Incorporation or By-laws; |
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| ● | to effect or prevent a merger, sale of assets or other corporate transaction; and |
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| ● | to control the outcome of any other matter submitted to our stockholders for vote. |
This concentration of ownership by itself may have the effect of impeding a merger, consolidation, takeover or other business consolidation, or discouraging a potential acquirer from making a tender offer for the Common Stock which in turn could reduce our stock price or prevent our stockholders from realizing a premium over our stock price.
We may issue more shares in a future financing or pursuant to existing agreements which will result in substantial dilution.
Our Amended and Restated Articles of Incorporation authorize the issuance of a maximum of 5,000,000,000 shares of Common Stock and a maximum of 100,000,000 shares of Preferred Stock. Any future merger or acquisition effected by us would result in the issuance of additional securities without stockholder approval and the substantial dilution in the percentage of our Common Stock held by our then existing stockholders. Moreover, the Common Stock issued in any such merger or acquisition transaction may be valued on an arbitrary or non-arm’s-length basis by our management, resulting in an additional reduction in the percentage of Common Stock held by our then existing stockholders. Additionally, we expect to seek additional financing in order to provide working capital to the operating business. Our Board of Directors has the power to issue any or all of such authorized but unissued shares without stockholder approval. To the extent that additional shares of Common Stock or Preferred Stock are issued in connection with and following a business combination or otherwise, dilution to the interests of our stockholders will occur and the rights of the holders of Common Stock might be materially and adversely affected.
Our Board of Directors is authorized to issue Preferred Stock without obtaining shareholder approval.
Our Amended and Restated Articles of Incorporation authorize the issuance of up to 100,000,000 shares of Preferred Stock with designations, rights and preferences determined from time to time by the Board of Directors. Accordingly, our Board of Directors is empowered, without stockholder approval, to issue Preferred Stock with dividend, liquidation, conversion, voting, or other rights which could adversely affect the voting power or other rights of the holders of the Common Stock. In the event of issuance, the Preferred Stock could be utilized, under certain circumstances, as a method of discouraging, delaying or preventing a change in control of the Company. Although we have no present intention to issue any shares of Preferred Stock, there can be no assurance that the Company will not do so in the future.
An active trading market for our common stock may not develop, and you may not be able to sell your common stock.
There has been a limited public market for our common stock. An active trading market for shares of our common stock may never develop or be sustained following this offering. If an active trading market does not develop, you may have difficulty selling your shares of common stock at an attractive price, or at all. An inactive market may also impair our ability to raise capital by selling our common stock, and it may impair our ability to attract and motivate our employees through equity incentive awards and our ability to acquire other companies, products or technologies by using our common stock as consideration.
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Market and economic conditions may negatively impact our business, financial condition and share price.
Concerns over medical epidemics, energy costs, geopolitical issues such as the issues in the Ukraine and the Middle East, the U.S. mortgage market and a deteriorating real estate market, unstable global credit markets and financial conditions, and volatile oil prices have led to periods of significant economic instability, diminished liquidity and credit availability, declines in consumer confidence and discretionary spending, diminished expectations for the global economy and expectations of slower global economic growth, increased unemployment rates, and increased credit defaults in recent years. Our general business strategy may be adversely affected by any such economic downturns such as public health conditions, volatile business environments and continued unstable or unpredictable economic, market, and geopolitical conditions, such as the current situation in the Ukraine. If these conditions continue to deteriorate or do not improve, it may make any necessary debt or equity financing more difficult to complete, more costly, and more dilutive. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance, and share price and could require us to delay or abandon development or commercialization plans.
Future sales and issuances of our common stock could result in additional dilution of the percentage ownership of our stockholders and could cause our share price to fall.
We expect that significant additional capital will be needed in the future to continue our planned operations, including increased marketing, hiring new personnel, commercializing our product, and continuing activities as an operating public company. To the extent we raise additional capital by issuing equity securities, our stockholders may experience substantial dilution. We may sell common stock, convertible securities or other equity securities in one or more transactions at prices and in a manner we determine from time to time. If we sell common stock, convertible securities or other equity securities in more than one transaction, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution for our existing stockholders, and new investors could gain rights superior to our existing stockholders.
We may be at risk of securities class action litigation.
We may be at risk of securities class action litigation. If we face such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business and result in a decline in the market price of our common stock.
Our Amended and Restated Articles of Incorporation and our Amended and Restated Bylaws, and Nevada law may have anti-takeover effects that could discourage, delay or prevent a change in control, which may cause our stock price to decline.
Our Amended and Restated Certificate of Incorporation and our Amended and Restated Bylaws, and Nevada law could make it more difficult for a third party to acquire us, even if closing such a transaction would be beneficial to our stockholders. We are authorized to issue up to 100,000,000 shares of preferred stock. This preferred stock may be issued in one or more series, the terms of which may be determined at the time of issuance by our Board of Directors without further action by stockholders. The terms of any series of preferred stock may include voting rights (including the right to vote as a series on particular matters), preferences as to dividend, liquidation, conversion and redemption rights and sinking fund provisions. The issuance of any preferred stock could materially adversely affect the rights of the holders of our common stock and therefore reduce the value of our common stock. In particular, specific rights granted to future holders of preferred stock could be used to restrict our ability to merge with, or sell our assets to, a third party and thereby preserve control by the present management.
Provisions of our Articles of Incorporation and our Amended and Restated Bylaws and Nevada law also could have the effect of discouraging potential acquisition proposals or making a tender offer or delaying or preventing a change in control, including changes a stockholder might consider favorable. Such provisions may also prevent or frustrate attempts by our stockholders to replace or remove our management. In particular, the certificate of incorporation and bylaws and Nevada law, as applicable, among other things:
| ● | provide the board of directors with the ability to alter the bylaws without stockholder approval; |
|
|
|
| ● | place limitations on the removal of directors; |
|
|
|
| ● | establishing advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted upon at stockholder meetings; and |
|
|
|
| ● | provide that vacancies on the board of directors may be filled by a majority of directors in office, although less than a quorum. |
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Financial reporting obligations of being a public company in the U.S. are expensive and time-consuming, and our management will be required to devote substantial time to compliance matters.
As a publicly traded company we incur significant additional legal, accounting and other expenses. The obligations of being a public company in the U.S. require significant expenditures and will place significant demands on our management and other personnel, including costs resulting from public company reporting obligations under the Exchange Act and the rules and regulations regarding corporate governance practices, including those under the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, and the listing requirements of the stock exchange on which our securities are listed. These rules require the establishment and maintenance of effective disclosure and financial controls and procedures, internal control over financial reporting and changes in corporate governance practices, among many other complex rules that are often difficult to implement, monitor and maintain compliance with. Moreover, despite recent reforms made possible by the JOBS Act, the reporting requirements, rules, and regulations will make some activities more time-consuming. In addition, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance. Our management and other personnel will need to devote a substantial amount of time to ensure that we comply with all of these requirements and to keep pace with new regulations, otherwise we may fall out of compliance and risk becoming subject to litigation or being delisted, among other potential problems.
There will be a substantial number of common shares eligible for future sale from the conversion of Series A Preferred shares.
There were 547,592 shares of our Series A Preferred Stock outstanding as of June 30, 2026. Each preferred share is convertible into 1,000 common shares. Once converted, these shares are eligible for resale under Rule 144. The sale, or availability for sale, of the foregoing shares could adversely affect the market price of our common stock or impair our ability to raise capital through future sales of our common stock.
Item 1B. Unresolved Staff Comments
Not Applicable.
Item 1C. Cybersecurity
Risk Management and Security
The Company’s Cybersecurity Policy outlines our guidelines and provisions for preserving the security of our data and technology infrastructure. The more the Company relies on technology to collect, store and manage information, the more vulnerable to severe security breaches the Company becomes. Human errors, hacker attacks and system malfunctions could cause significant financial damage and may jeopardize the Company’s reputation. For this reason, the Company has implemented extensive security measures, has prepared instructions in order to mitigate security risks, and has outlined both provisions in this policy.
Governance
Our
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Item 2. Properties
The Company’s headquarters consists of leased office space located in the Research Park at Florida Atlantic University, 3651 FAU Blvd., Suite 400, Boca Raton, FL 33431.
Item 3. Legal Proceedings
Effective October 29, 2025, Xeriant terminated its previously disclosed litigation proceedings with Auctus Fund, LLC and entered into a Settlement Agreement with Auctus to restructure the Auctus Note and related obligations. A summary of the terms of the Settlement Agreement is discussed on the Liquidity and Capital Resources section below. Xeriant is currently working on securing funding to fulfill its obligations under the Settlement Agreement and has ongoing discussions with Auctus regarding extending the cash payments based on the Company’s timelines in executing its business plan, particularly certification testing of NEXBOARD. The Company’s ongoing lawsuit against XTI Aircraft Company has a connection to the Auctus matter in that the Company’s obligations to Auctus were, according to Xeriant’s complaint, to be assumed by XTI as provided in a Letter Agreement. Separately, Auctus Fund, LLC sued XTI related to the Letter Agreement.
On December 6, 2023, the Company initiated legal proceedings against XTI Aircraft Company in the Federal District Court for the Southern District of New York (Case no. 1:23-cv-10656-JPO), along with other unnamed defendants, seeking to enforce the terms of the Letter Agreement, alleging fraudulent acts, deceptive maneuvers and intentional breaches, and seeking a range of remedies. These include the recovery of losses, expenses, attorneys’ fees, punitive damages and a compensatory damage award exceeding $500 million. The legal action aims to address the alleged misconduct comprehensively and to protect the Company’s interests in the face of XTI’s actions. The foregoing description of the legal action does not purport to be complete and is subject in its entirety by the full text of the complaint, a copy of which was filed in an 8-K on December 12, 2023, Exhibit 99.1. On February 29, 2025, the Company filed a Second Amended Complaint alleging seven counts including intentional fraud, fraudulent concealment, breach of contract, unjust enrichment, unfair competition, quantum meruit, and misappropriation of confidential information. XTI filed a Motion to Dismiss on March 13, 2025, seeking to dismiss all the Company’s claims except for breach of contract. The Company filed a Memorandum of Law in Opposition to XTI’s Motion to Dismiss on April 10, 2025, and on January 14, 2025, the Court agreed with the Company’s position that its claims were validly alleged and denied all of XTI’s arguments in their entirety. On February 18, 2025, XTI filed its answer to the Company’s Second Amended Complaint adding two counter claims, including breach of fiduciary duty and breach of contract. The Company responded on March 18, 2025, moving to dismiss both counterclaims and on April 1, 2025, XTI filed a Second Amended Answer and Counterclaims to the Second Amended Complaint. On April 28, 2025, the Company filed a Motion to Dismiss XTI’s Second Amended Answer and Counterclaims. On May 12, 2025, XTI filed a Memorandum of Law in Opposition to Xeriant’s Motion to Dismiss XTI’s Second Amended Counterclaim. On May 20, 2025, Xeriant filed a Memorandum of Law in Support of its Motion to Dismiss XTI’s Second Amended Answer with Counterclaims. On September 23, 2025, Xeriant’s Motion to dismiss XTI’s Second Amended Answer with Counterclaim was denied by the Court. The parties have completed discovery and the legal process is continuing. The foregoing descriptions of the legal actions do not purport to be complete and are subject in their entirety by the full text of the court filings.
On July 2, 2025, the Company was served with a complaint from Midland Compounding for breach of contract in the payment of an invoice in the amount of $57,600 related to a purchase order for consulting services related to improving the Company’s intumescent fire-retardant layer for NexBoard. On August 20, 2025, the Company filed an Answer and Affirmative Defenses, essentially stating that Midland Compounding had not performed the services it was contracted to provide. On August 6, 2026, the Company settled the lawsuit with Midland Compounding by agreeing to make three $10,000 payments by September 30, 2026, and in return getting back equipment and chemicals previously provided by Xeriant. The first two payments were submitted and the third payment will be paid by September 20, 2026.
Except as set forth above, there is no pending litigation against the Company and to our knowledge no litigation is contemplated or threatened. To our knowledge, none of our directors, officers, 5% shareholders or affiliates are party to any legal proceedings that would have a material adverse effect on our business, financial condition, or operating results
Item 4. Mine Safety Disclosures.
Not Applicable.
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PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market Information
Our common stock is quoted on OTC Markets under the symbol “XERI.”
Shares of our common stock have historically been thinly traded, and as a result, our stock price as quoted by OTC Markets may not reflect an actual or perceived value. The following table sets forth the approximate high and low bid prices for our common stock for the last two fiscal years and interim periods. The quotations reflect interdealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.
Period |
| High Bid |
|
| Low Bid |
| ||
July 1, 2025, through September 30, 2025 |
| $ | 0.013 |
|
| $ | 0.006 |
|
October 1, 2025, through December 31, 2025 |
| $ | 0.016 |
|
| $ | 0.004 |
|
January 1, 2026, through March 31, 2026 |
| $ | 0.014 |
|
| $ | 0.006 |
|
April 1, 2026, through June 30, 2026 |
| $ | 0.030 |
|
| $ | 0.004 |
|
|
|
|
|
|
|
|
|
|
Period |
| High Bid |
|
| Low Bid |
| ||
July 1, 2024, through September 30, 2024 |
| $ | 0.025 |
|
| $ | 0.012 |
|
October 1, 2024, through December 31, 2024 |
| $ | 0.020 |
|
| $ | 0.019 |
|
January 1, 2025, through March 31, 2025 |
| $ | 0.030 |
|
| $ | 0.025 |
|
April 1, 2025, through June 30, 2025 |
| $ | 0.015 |
|
| $ | 0.014 |
|
Our Transfer Agent
The Company’s stock transfer agent is ClearTrust, LLC (“ClearTrust”). ClearTrust’s address is 16540 Pointe Village Drive, Suite 210, Lutz, Florida 33558 and their telephone number is (813) 235-4490. The transfer agent is responsible for all record-keeping and administrative functions in connection with our shares of common stock.
Holders
As of June 30, 2026, there were 227 holders of record of our common stock.
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Dividends
We have not declared any cash dividends, nor do we intend to do so in the foreseeable future.
Penny Stock Regulations
The SEC has adopted regulations which generally define so-called “penny stocks” to be an equity security that has a market price less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exemptions. The Registrant’s common stock is a “penny stock” and is subject to Rule 15g-9 under the Exchange Act, or the Penny Stock Rule. This rule imposes additional sales practice requirements on broker-dealers that sell such securities to persons other than established customers and “accredited investors” (generally, individuals with a net worth in excess of $1,000,000 or annual incomes exceeding $200,000, or $300,000 together with their spouses). For transactions covered by Rule 15g-9, a broker-dealer must make a special suitability determination for the purchaser and have received the purchaser’s written consent to the transaction prior to sale. As a result, this rule may affect the ability of broker-dealers to sell our securities and may affect the ability of purchasers to sell any of our securities in the secondary market, thus possibly making it more difficult for us to raise additional capital.
For any transaction involving a penny stock, unless exempt, the rules require delivery, prior to any transaction in penny stock, of a disclosure schedule required by the SEC relating to the penny stock market. Disclosure is also required to be made about sales commissions payable to both the broker-dealer and the registered representative and current quotations for the securities. Finally, monthly statements are required to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stock.
There can be no assurance that the Registrant’s common stock will qualify for exemption from the Penny Stock Rule. Even if the Registrant’s common stock were exempt from the Penny Stock Rule, the Registrant would remain subject to Section 15(b)(6) of the Exchange Act, which gives the SEC the authority to restrict any person from participating in a distribution of penny stock, if the SEC finds that such a restriction would be in the public interest.
Securities Authorized for Issuance under Equity Compensation Plans
The Registrant does not have any equity compensation plans and accordingly there are no shares authorized for issuance under an equity compensation plan.
Item 6. Reserved.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion of our financial condition and results of operations should be read in conjunction with the audited and consolidated financial statements and the notes to those statements included elsewhere in this Report. This discussion contains forward-looking statements that involve risks and uncertainties. You should specifically consider the various risk factors identified in this Report that could cause actual results to differ materially from those anticipated in these forward-looking statements.
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| Table of Contents |
Financial Results
The following discussion of the results of operations constitutes management’s review of the factors that affected the financial and operating performance for the fiscal years ended June 30, 2026 and 2025. This discussion should be read in conjunction with the consolidated financial statements and notes thereto contained elsewhere in this report. The Company has a June 30 fiscal year end.
Executive Summary
Xeriant, Inc. (the “Company) is dedicated to the discovery, development, and commercialization of transformative technologies, with a focus on advanced materials that can be successfully integrated and deployed across multiple industrial sectors. Xeriant’s advanced materials line is marketed under the DUREVER™ brand and includes NexBoard™, a high-performance eco-friendly composite construction panel made from recycled plastic and fiber waste, and NexPatch™, its companion fire-resistant joint compound. Both products use the Company’s proprietary fire-retardant technology, called Durazite™. NexBoard™ has shown exceptional resistance to fire, water, mold, insects, cracking, abrasion, compression and puncture, and was designed to become a universal panel to replace products such as drywall, plywood, OSB, MDF, MgO board, cement board and other materials used in construction. Durazite also has potential uses in many industries looking to improve the performance of their products. The Company seeks strategic partners in the building materials industry and other industries for immediate access to their distribution networks and markets.
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 at Note 9 below for a summary of the related legal proceedings.
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| Table of Contents |
Stock Sales
During the year ended June 30, 2026, the Company did not sell any common stock.
Convertible Notes Issued
During the year ended June 30, 2026, the Company received $837,500 from the issuance of convertible debt.
Litigation
Effective October 29, 2025, Xeriant terminated its previously disclosed litigation proceedings with Auctus Fund, LLC and entered into a Settlement Agreement with Auctus to restructure the Auctus Note and related obligations. A summary of the terms of the Settlement Agreement is discussed in the Liquidity and Capital Resources section below. Xeriant is currently working on securing funding to fulfill its obligations under the Settlement Agreement and has ongoing discussions with Auctus regarding extending the cash payments based on the Company’s timelines in executing its business plan, particularly certification testing of NEXBOARD. The Company’s ongoing lawsuit against XTI Aircraft Company has a connection to the Auctus matter in that the Company’s obligations to Auctus were, according to Xeriant’s complaint, to be assumed by XTI as provided in a Letter Agreement. Separately, Auctus Fund, LLC sued XTI related to the Letter Agreement.
On December 6, 2023, the Company initiated legal proceedings against XTI Aircraft Company in the Federal District Court for the Southern District of New York (Case no. 1:23-cv-10656-JPO), along with other unnamed defendants, seeking to enforce the terms of the Letter Agreement, alleging fraudulent acts, deceptive maneuvers and intentional breaches, and seeking a range of remedies. These include the recovery of losses, expenses, attorneys’ fees, punitive damages and a compensatory damage award exceeding $500 million. The legal action aims to address the alleged misconduct comprehensively and to protect the Company’s interests in the face of XTI’s actions. The foregoing description of the legal action does not purport to be complete and is subject in its entirety by the full text of the complaint, a copy of which was filed in an 8-K on December 12, 2023, Exhibit 99.1. On February 29, 2025, the Company filed a Second Amended Complaint alleging seven counts including intentional fraud, fraudulent concealment, breach of contract, unjust enrichment, unfair competition, quantum meruit, and misappropriation of confidential information. XTI filed a Motion to Dismiss on March 13, 2025, seeking to dismiss all the Company’s claims except for breach of contract. The Company filed a Memorandum of Law in Opposition to XTI’s Motion to Dismiss on April 10, 2025, and on January 14, 2025, the Court agreed with the Company’s position that its claims were validly alleged and denied all of XTI’s arguments in their entirety. On February 18, 2025, XTI filed its answer to the Company’s Second Amended Complaint adding two counter claims, including breach of fiduciary duty and breach of contract. The Company responded on March 18, 2025, moving to dismiss both counterclaims and on April 1, 2025, XTI filed a Second Amended Answer and Counterclaims to the Second Amended Complaint. On April 28, 2025, the Company filed a Motion to Dismiss XTI’s Second Amended Answer and Counterclaims. On May 12, 2025, XTI filed a Memorandum of Law in Opposition to Xeriant’s Motion to Dismiss XTI’s Second Amended Counterclaim. On May 20, 2025, Xeriant filed a Memorandum of Law in Support of its Motion to Dismiss XTI’s Second Amended Answer with Counterclaims. On September 23, 2025, Xeriant’s Motion to dismiss XTI’s Second Amended Answer with Counterclaim was denied by the Court. The parties are presently involved in the discovery process. The foregoing descriptions of the legal actions do not purport to be complete and are subject in their entirety by the full text of the court filings.
On July 2, 2025, the Company was served with a complaint from Midland Compounding for breach of contract in the payment of an invoice in the amount of $57,600 related to a purchase order for consulting services related to improving the Company’s intumescent fire-retardant layer for NexBoard. On August 20, 2025, the Company filed an Answer and Affirmative Defenses, essentially stating that Midland Compounding had not performed the services it was contracted to provide. On August 6, 2026, the Company settled the lawsuit with Midland Compounding by agreeing to make three $10,000 payments by September 30, 2026, and in return getting back equipment and chemicals previously provided by Xeriant.
Except as set forth above, 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
| 34 |
| Table of Contents |
Fiscal Year 2026 Results of Operations Compared with Fiscal Year 2025
|
| For the years ended |
|
|
| |||||||
|
| June, |
|
|
| |||||||
|
| 2026 |
|
| 2025 |
|
| $ |
| |||
|
|
|
|
|
|
|
|
|
| |||
Operating expenses: |
|
|
|
|
|
|
|
|
| |||
Consulting and advisory fees |
| $ | 293,525 |
|
| $ | 327,991 |
|
| $ | (34,466 | ) |
Related party consulting fees |
|
| 296,000 |
|
|
| 438,000 |
|
|
| (142,000 | ) |
General and administrative expenses |
|
| 185,285 |
|
|
| 309,107 |
|
|
| (123,822 | ) |
Professional fees |
|
| 183,509 |
|
|
| 221,119 |
|
|
| (37,610 | ) |
Research and development expense |
|
| 99,905 |
|
|
| 69,274 |
|
|
| 30,631 |
|
Total operating expenses |
|
| 1,058,224 |
|
|
| 1,365,491 |
|
|
| (307,267 | ) |
Operating loss |
|
| (1,058,224 | ) |
|
| (1,365,491 | ) |
|
| 307,267 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of debt discount |
|
| (214,194 | ) |
|
| (51,006 | ) |
|
| (163,188 | ) |
Interest expense |
|
| (68,525 | ) |
|
| (225,566 | ) |
|
| 157,041 |
|
Loss on extinguishment of debt |
|
| (1,061,176 | ) |
|
| (4,835 | ) |
|
| (1,056,341 | ) |
Gain on extinguishment of debt |
|
| 2,810,278 |
|
|
| - |
|
|
| 2,810,278 |
|
Total other income (expense), net |
|
| 1,466,383 |
|
|
| (281,407 | ) |
|
| 1,747,790 |
|
Income tax expense |
|
| (15,881 | ) |
|
| - |
|
|
| (15,881 | ) |
Net income (loss) |
| $ | 392,278 |
|
| $ | (1,646,898 | ) |
| $ | 2,039,176 |
|
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| Table of Contents |
Consulting and advisory fees
Total consulting and advisory expenses were $293,525 and $327,991 for the years ended June 30, 2026 and 2025, respectively, a decrease of $34,466. The decrease was primarily related to an decrease in consulting fees in the amount of $80,466 relating to less reliance on consultants offset by an increase in advisory board fees in the amount of $46,000.
Related Party Consulting Fees
Total related party consulting fees were $296,000 and $438,000 for the years ended June 30, 2026 and 2025, respectively, a decrease of $142,000. In the current period, the Company had reduced funds to pay consulting fees and the related parties agreed to accept reduced amounts of compensation for the same amount of services rendered. Additionally, in the prior period, the Company paid consulting fees to a former director.
General and administrative expenses
Total general and administrative expenses were $185,285 and $309,107 for the years ended June 30, 2026 and 2025, respectively, a decrease of $123,822. The primary reasons for the decrease was (i) a decrease in rent expense of $45,923 due to the Company entering into a new agreement in February 2025 for substantially less and (ii) $128,281 less in advertising and marketing expenses in the current period. This was slightly offset by an increase in travel expenses in the amount of $51,143.
Professional Fees
Total professional fees were $183,509 and $221,119 for the years ended June 30, 2026 and 2025, respectively, a decrease of $37,610. The primary reason for the decrease was reduced legal fees of $46,565.
Research and Development Expenses
Total research and development expenses were $99,905 and $69,274 for the years ended June 30, 2026, and 2025, respectively, an increase of $30,631. The primary reason for the increase was increased research and development expenses related to testing and initial product development schedule in the current period.
Other (Expenses)
Total other expenses consist of amortization of debt discount related to convertible notes, interest expense related to convertible notes, loan extension fee, loss on extinguishment of debt, and gain on extinguishment of debt. Total other income was $1,466,383 for the year ended June 30, 2026, compared to other expense of $281,407 for the year ended June 30, 2025, a change of $1,747,790. The reason for the other income in the current period was the Company recorded a gain on extinguishment of debt in the amount of $2,810,278, of which $2,743,546 was related to the settlement with Auctus. This was offset somewhat by a loss on debt extinguishment in the amount of $1,061,176 related to shares issued to Auctus for the extension of an agreement.
Net income (loss)
Total net income was $392,278 for the year ended June 30, 2026, compared to a net loss of $1,646,898 for the year ended June 30, 2025, a change of $2,039,176. The decreased net loss was primarily related to less operating expenses in the current year offset by more interest expense in the prior year and the Company recording a gain on extinguishment of debt in the amount of $2,818,025, of which $2,743,546 was related to the settlement with Auctus.
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Liquidity and Capital Resources
The Company’s consolidated financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. On June 30, 2026 and 2025, the Company had $87,594 and $44,850 in cash, respectively, and $4,897,313 and $8,708,900 in negative working capital, respectively. For the years ended June 30, 2026 and 2025, the Company had net income of $392,278 and a net loss of $1,646,898, respectively. The net income for the year ended June 30, 2026, was generated by a gain on extinguishment of debt in the amount of $2,810,278 of which $2,743,546 was related to the Auctus Settlement. Continued losses may adversely affect the liquidity of the Company in the future. Therefore, the factors noted above raise substantial doubt about our ability to continue as a going concern. The recoverability of a major portion of the recorded asset amounts shown in the accompanying consolidated balance sheets is dependent upon continued operations of the Company, which in turn is dependent upon the Company’s ability to raise additional capital, obtain financing and to succeed in its future operations. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. To implement its business plan, the Company must raise sufficient funds in the form of equity, debt, or a combination thereof. Until the Company develops profitable operations, it is dependent upon management continually raising funds.
During the year ended June 30, 2026, the Company’s operating activities used $791,756 of net cash used compared to using $1,288,505 of net cash used in operating activities during the year ended June 30, 2025. This difference related to the change in net income (loss) in the amount of $2,039,176 along with an aggregate increase of $1,471,066 in depreciation and amortization, amortization of debt discount, loss on extinguishment of debt, prepaids and deposits, accounts payable and accrued liabilities, accrued liability-related party, shares to be issued, taxes payable and lease liabilities, offset by an aggregate decrease of $3,013,493 in stock issued for services, gain on extinguishment of debt, and amortization of right of use asset. During the year ended June 30, 2026, the Company’s investing activities used cash of $3,000 compared to $1,762 in the prior period. In the current period, the Company acquired $3,000 in equipment. The cash provided by financing activities in both periods was from proceeds from convertible notes payable. During the year ended June 30, 2026, the Company’s financing activities provided cash of $837,500 compared to $682,000 in the prior period. The cash provided by financing activities in both periods was from proceeds from convertible notes payable.
Effective October 29, 2025, Xeriant entered into a Settlement Agreement with Auctus to restructure the Auctus Note and related Xeriant obligations. The Settlement Agreement provides that the Company pay Auctus $3,500,000 as follows: (A) $1,000,000 on or before 75 days from October 29, 2025; (B) $1,000,000 on or before 105 days from October 29, 2025;(C) $1,000,000 on or before 135 days from October 29, 2025; and (D) $500,000 on or before 165 days from October 29, 2025. In addition, within ten (10) business days of receipt by the Company of any money or any other consideration pertaining to the legal action brought by the Company against XTI Aircraft Company, the Company will transfer litigation proceeds to Auctus on a preferred basis and share on a percentage basis thereafter net of legal fees not to exceed $250,000. The Settlement Agreement was subsequently extended through July 31, 2026, and again extended through October 31, 2026. There is no assurance that the Company will raise the funds necessary to meet these obligations of the Settlement Agreement or that there will be proceeds from the litigation against XTI Aircraft. The foregoing terms from the Settlement Agreement relate to liquidity and are only a portion of those found in the Settlement Agreement. This paragraph is qualified in its entirety by the terms and conditions set forth in Form 8-K filed with the SEC on November 12, 2025.
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Off Balance Sheet Items
We do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as “special purpose entities” (SPEs).
Critical Accounting Policies
Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements requires us to make estimates and judgments which affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities (see Note 2, Summary of Significant Accounting Policies, contained in the notes to the Company’s consolidated financial statements for the years ended June 30, 2026 and 2025 contained in this filing). On an ongoing basis, we evaluate our estimates. We base our estimates on historical experience and on various other assumptions which we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities which are not readily apparent from other sources. Actual results may differ from these estimates based upon different assumptions or conditions; however, we believe that our estimates are reasonable.
Management is aware that certain changes in accounting estimates employed in generating financial statements can have the effect of making the Company look more or less profitable than it actually is. Management does not believe that the Company has made any such changes in accounting estimates.
| 38 |
| Table of Contents |
Item 8. Financial Statements and Supplementary Data
XERIANT, INC.
CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 and 2025
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm (PCAOB ID # |
| F-1 |
|
|
|
|
|
Consolidated Balance Sheets as of June 30, 2026 and 2025 |
| F-3 |
|
|
| ||
Consolidated Statements of Operations for the Years Ended June 30, 2026 and 2025 |
| F-4 |
|
|
| ||
Consolidated Statements of Stockholders’ Deficit for the Years Ended June 30, 2026 and 2025 |
| F-5 |
|
|
| ||
Consolidated Statements of Cash Flows for the Years Ended June 30, 2026 and 2025 |
| F-6 |
|
|
| ||
Notes to Consolidated Financial Statements |
| F-7 |
|
39 |
| Table of Contents |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of Xeriant, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Xeriant, Inc. (the Company) as of June 30, 2026 and 2025, and the related consolidated statements of income, stockholders’ deficit, and cash flows for each of the years in the two-year period ended June 30, 2026, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2026 and 2025, and the results of its operations and its cash flows for each of the years in the two-year period ended June 30, 2026, in conformity with accounting principles generally accepted in the United States of America.
Substantial Doubt about the Company’s Ability to Continue as a Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2, the Company has incurred net losses and negative cash flow from operations since inception. These factors, and the need for additional financing in order for the Company to meet its business plans, raises substantial doubt about the Company’s ability to continue as a going concern. Our opinion is not modified with respect to that matter.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
| F-1 |
| Table of Contents |
Convertible Debentures
As described in Notes 2 and 10 to the Company’s consolidated financial statements, the Company issues convertible debt instruments that may include detachable warrants and conversion features. The Company applies the guidance in ASU 2020-06 and evaluates such instruments under ASC 815, Derivatives and Hedging, to determine the appropriate accounting treatment and classification. Warrants that do not qualify for equity classification are recorded as liabilities and measured at fair value. The fair value of the warrants is estimated using the Black-Scholes option pricing model.
We identified the accounting for convertible notes and related warrant features as a critical audit matter. The principal considerations for our determination were the complexity of the contractual provisions contained in certain financing arrangements and the significant auditor judgment required to evaluate whether the warrants qualified for equity classification or required liability treatment under ASC 815. In addition, auditing the determination of fair value involved subjective assumptions, including expected volatility, expected term, and other valuation inputs used in the Black-Scholes model.
The primary procedures we performed to address this critical audit matters included the following:
| · | Reviewing debt and warrant agreements and evaluating relevant contractual provisions, including conversion, settlement, adjustment, and anti-dilution features. |
| · | Assessing management's evaluation of the instruments under ASC 815 and ASC 470-20, including whether the warrants met the conditions necessary for equity classification. |
| · | Testing management’s identification of terms that could affect classification and measurement. |
| · | Recalculating the fair value of selected warrant issuances using independently developed assumptions and comparing the results to management’s estimates. |
| · | Evaluating the reasonableness of significant valuation assumptions, including expected volatility, expected term, and the risk-free interest rate. |
| · | Testing the calculation and amortization of debt discounts associated with the convertible debt instruments. |
| · | Assessing the adequacy of related disclosures included in the consolidated financial statements. |
We have served as the Company’s auditor since 2024.
September 28, 2026
| F-2 |
| Table of Contents |
XERIANT, INC.
CONSOLIDATED BALANCE SHEETS
|
| As of |
|
| As of |
| ||
|
| June 30, 2026 |
|
| June 30, 2025 |
| ||
|
|
|
|
|
|
| ||
Assets |
|
|
|
|
|
| ||
Current assets |
|
|
|
|
|
| ||
Cash |
| $ |
|
| $ |
| ||
Prepaids |
|
|
|
|
|
| ||
Total current assets |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Property & equipment, net |
|
|
|
|
|
| ||
Operating lease right-of-use asset |
|
|
|
|
|
| ||
Total assets |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
Liabilities and stockholders' deficit |
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
| $ |
|
| $ |
| ||
Shares to be issued |
|
|
|
|
|
| ||
Convertible notes payable, net of discount - in default |
|
|
|
|
|
| ||
Convertible notes payable, net of discount |
|
|
|
|
|
| ||
Settlement liability |
|
|
|
|
|
| ||
Taxes payable |
|
|
|
|
|
| ||
Lease liability, current |
|
|
|
|
|
| ||
Total current liabilities |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Lease liability, long-term |
|
|
|
|
|
| ||
Total liabilities |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Commitments and contingencies (Note 9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' deficit |
|
|
|
|
|
|
|
|
Preferred stock, $ |
|
|
|
|
|
|
|
|
Series A Preferred stock, $ |
|
|
|
|
|
| ||
Series B Preferred stock, $ |
|
|
|
|
|
| ||
Common stock, $ |
|
|
|
|
|
| ||
Common stock to be issued |
|
|
|
|
|
| ||
Additional paid in capital |
|
|
|
|
|
| ||
Accumulated deficit |
|
| ( | ) |
|
| ( | ) |
Total stockholders' deficit |
|
| ( | ) |
|
| ( | ) |
Non-controlling interest |
|
| ( | ) |
|
| ( | ) |
Total stockholders' deficit |
|
| ( | ) |
|
| ( | ) |
Total liabilities and stockholders' deficit |
| $ |
|
| $ |
| ||
The accompanying notes are an integral part of these consolidated financial statements.
| F-3 |
| Table of Contents |
XERIANT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
|
| For the years ended |
| |||||
|
| June 30, |
| |||||
|
| 2026 |
|
| 2025 |
| ||
Operating expenses: |
|
|
|
|
|
| ||
Consulting and advisory fees |
| $ |
|
| $ |
| ||
Related party consulting fees |
|
|
|
|
|
| ||
General and administrative expenses |
|
|
|
|
|
| ||
Professional fees |
|
|
|
|
|
| ||
Research and development expense |
|
|
|
|
|
| ||
Total operating expenses |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Loss from operations |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
Other income (expenses): |
|
|
|
|
|
|
|
|
Amortization of debt discount |
|
| ( | ) |
|
| ( | ) |
Interest expense |
|
| ( | ) |
|
| ( | ) |
Loss on extinguishment of debt |
|
| ( | ) |
|
| ( | ) |
Gain on extinguishment of debt |
|
|
|
|
|
| ||
Total other income (expense), net |
|
|
|
|
| ( | ) | |
|
|
|
|
|
|
|
|
|
Net income (loss) before income tax expense |
|
|
|
|
| ( | ) | |
|
|
|
|
|
|
|
|
|
Income tax expense |
|
| ( | ) |
|
|
| |
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
|
|
|
| ( | ) | |
|
|
|
|
|
|
|
|
|
Less net loss attributable to noncontrolling interest |
|
|
|
|
| ( | ) | |
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to common stockholders |
| $ |
|
| $ | ( | ) | |
|
|
|
|
|
|
|
|
|
Basic and diluted earnings per share on net income (loss) |
|
|
|
|
|
|
|
|
Basic |
| $ |
|
| $ | ( | ) | |
Diluted |
| $ |
|
| $ | ( | ) | |
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding |
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
| ||
Diluted |
|
|
|
|
|
| ||
The accompanying notes are an integral part of these consolidated financial statements.
| F-4 |
| Table of Contents |
XERIANT, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
FOR THE YEARS ENDED JUNE 30, 2026 AND 2025
|
| Series A Preferred Stock |
|
| Series B Preferred Stock |
|
| Common Stock |
|
| Common stock to be |
|
| Additional Paid-In |
|
| Accumulated |
|
| Non-Controlling |
|
|
|
| ||||||||||||||||||||
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Issued |
|
| Capital |
|
| Deficit |
|
| Interest |
|
| Total |
| |||||||||||
Balance June 30, 2024 |
|
|
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock issued for services |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conversion of Series A Preferred to Common Stock |
|
| ( | ) |
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conversion of convertible notes payable and accrued interest into common stock |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrants associated with convertible debt |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cashless exercise of warrants |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) |
|
| ( | ) | |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance June 30, 2025 |
|
|
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock issued for services |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conversion of Series A Preferred to Common Stock |
|
| ( | ) |
|
| ( | ) |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
|
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conversion of convertible notes payable and accrued interest into common stock |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Stock issued in connection with settlement agreement |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock issued as consideration for extension |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrants associated with convertible debt |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance June 30, 2026 |
|
|
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) | ||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-5 |
| Table of Contents |
XERIANT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
| For the years ended |
| |||||
|
| June 30, |
| |||||
|
| 2026 |
|
| 2025 |
| ||
|
|
|
|
|
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Cash Flows from Operating Activities |
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Net Income (Loss) |
| $ |
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| $ | ( | ) | |
Adjustments to reconcile net income (loss) to net |
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cash used by operating activities: |
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Depreciation and amortization |
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Stock issued for services |
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Amortization of debt discount |
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Loss on extinguishment of debt |
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Gain on extinguishment of debt |
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Amortization of right of use asset |
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Changes in operating assets and liabilities: |
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Prepaids and deposits |
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Accounts payable and accrued liabilities |
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Accrued liability, related party |
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| ( | ) | |
Shares to be issued |
|
| ( | ) |
|
| ( | ) |
Taxes payable |
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Lease liabilities |
|
| ( | ) |
|
| ( | ) |
Net cash used in operating activities |
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| ( | ) |
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Cash Flows from Investing Activities |
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|
Purchase of property and equipment |
|
| ( | ) |
|
| ( | ) |
Net cash from financing activities |
|
| ( | ) |
|
| ( | ) |
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Cash Flows from Financing Activities |
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Proceeds from convertible bridge loans |
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Net cash provided by financing activities |
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Net change in cash |
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Cash at beginning of period |
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Cash at end of period |
| $ |
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| $ |
| ||
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Supplemental Cash Flow Information |
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Cash paid for interest |
| $ |
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| $ |
| ||
Cash paid for income taxes |
| $ |
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| $ |
| ||
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Non-cash investing and financing activities: |
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Conversion of convertible notes payable and accrued interest |
| $ |
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| $ |
| ||
Warrants issued with convertible notes payable |
| $ |
|
| $ |
| ||
Stock issued in connection with settlement agreement |
| $ |
|
| $ |
| ||
Cashless exercise of warrants |
| $ |
|
| $ |
| ||
Right of use asset |
| $ |
|
| $ |
| ||
Stock issued for loan extension |
| $ |
|
| $ |
| ||
The accompanying notes are an integral part of these consolidated financial statements.
| F-6 |
| Table of Contents |
XERIANT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2026
NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS
Company Overview
Xeriant, Inc. (the “Company) is dedicated to the discovery, development, and commercialization of transformative technologies, with a focus on advanced materials that can be successfully integrated and deployed across multiple industrial sectors. Xeriant’s advanced materials line is marketed under the DUREVER™ brand and includes NexBoard™, a high-performance eco-friendly composite construction panel made from recycled plastic and fiber waste, and NexPatch™, its companion fire-resistant joint compound. Both products use the Company’s proprietary fire-retardant technology, called Durazite™. NexBoard™ has shown exceptional resistance to fire, water, mold, insects, cracking, abrasion, compression and puncture, and was designed to become a universal panel to replace products such as drywall, plywood, OSB, MDF, MgO board, cement board and other materials used in construction. Durazite also has potential uses in many industries looking to improve the performance of their products. The Company seeks strategic partners in the building materials industry and other industries for immediate access to their distribution networks and markets.
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, including nanotechnology, which have applications across a broad range of industries and the potential to generate significant near-term revenue. Xeriant has developed a very effective fire-retardant technology, called Durazite, that has been incorporated into its proprietary construction materials, namely NexBoard and NexPatch. The Company’s strategy includes potential licensing arrangements, joint ventures, or combinations which could allow for more rapid access to various markets with reduced capital requirements and financial risk. Xeriant is having discussions with potential partner companies in the building materials industry that may provide production and distribution infrastructure, as well as supply chain and financial support. The Company’s advanced materials can also be licensed to companies with products that are not related to construction, to enhance performance and safety, or used in the joint development of new products. For near-term production of its construction materials to meet expected demand indicated by a number of homebuilders and developers, Xeriant has been working with contract manufacturers and its supply chain, but as soon as practicable plans to scale up manufacturing with the equipment and systems needed to optimize quality and output. If the Company decides to set up its own manufacturing facilities it will need to raise significant capital, which may or may not be available depending on market conditions and other factors. The Company has had ongoing discussions with potential strategic partners and an investment bank interested in financing these facilities and operations through a series of green bond issuances although no engagement agreement has been entered into at this time, primarily waiting for the production of NexBoard through the contract manufacturing and providing samples to potential buyers who have expressed interest.
| F-7 |
| Table of Contents |
As a brief background, starting in 2023, the Company began developing its own advanced materials, including proprietary flame-retardant technology for polymers to be deployed in recycled materials. In 2025, the Company began testing a number of production processes to manufacture its eco-friendly, patented, composite construction panel called NexBoard so that it can be competitive in the market and produced on an industrial scale. In early 2025, the Company began working with nanomaterials, which will help to expand the Company’s portfolio of advanced materials and products. During 2025, the Company also began working with a number of leading manufacturers in other industries, interested in incorporating the Company’s technology into their products. The collaboration is ongoing, and Xeriant expects to begin executing licensing agreements during the second fiscal quarter of 2026, which should generate revenue.
The Company started its certification testing in June 2026, successfully completing 16 different tests as of the date of this report, in the areas of fire performance, thermal performance, impact resistance, mechanical strength, surface and finish performance, indoor air quality, water and moisture resistance, mold/biologic resistance, and chemical and salt spray resistance. Almost all of the third-party testing needed for NexBoard’s use for interior wallboards used in construction have been completed. Because of the exceptional test results, NexBoard will also be marketed for exterior applications as a potentially universal wallboard. NexBoard will be available in varying thicknesses and sizes including standard 4’ x 8’ panels.
Related Intellectual Property
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 trademark applications for “DUREVER™,” “NexPatch,” and “NexWool.” Trademark applications for “Durazite,” and “Nex-Gen of Building Materials” are in the process of being filed.
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, 2025, 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. Effective March 31, 2026, the Company received a Notice of Allowance issued by the United States Patent and Trademark Office (USPTO) for the Company’s patent application (Serial No. 18/623,359) covering its proprietary technology. The formal patent was issued to Xeriant on July 14, 2026. Just prior to that date, Xeriant filed two continuing applications adding additional claims, and a PCT (Patent Cooperation Treaty) application, an international patent application that streamlines the process of pursuing patent protection in multiple countries.
Factor X Research Group
Factor X Research Group is Xeriant's advanced research and innovation engine, that was first publicly announced in November 2025. The concept was created by Brigadier General (Ret.) Blaine D. Holt, Xeriant’s Aerospace and Defense Senior Advisor since 2023, who was appointed as its President. The group's mandate spans sectors where Xeriant sees near-term commercialization potential, including aerospace and defense, advanced construction materials, critical infrastructure, and AI-enabled platforms. Factor X is intended to function not as a single product development program but as a systematic technology evaluation and commercialization engine, identifying breakthrough technologies, assessing their commercial readiness across the technology readiness level spectrum, and positioning the Company to pursue partnerships, licensing arrangements, joint ventures, or acquisitions that accelerate value creation for shareholders.
| F-8 |
| Table of Contents |
The Company believes that the breadth of Factor X's domain coverage, combined with the cross-sector integration of its findings, creates a differentiated capability that few companies of Xeriant's size possess. Factor X has initially identified seven mission-critical domains, including Materials Science and Nanotechnology, Aerospace and Advanced Flight Systems, Quantum Computing, Data Security and Encryption, Artificial Intelligence, Advanced Quantum-Based Energy Concepts, and Supply Chain Innovation, each selected because it represents a domain where near-term technical breakthroughs are converging with large, addressable commercial markets. These domains were selected to reflect sectors where the Company believes significant near-term and long-term commercialization potential exists, and where convergence across disciplines can create durable competitive advantage.
In the area of Materials Science and Nanotechnology, Factor X's work directly supported the Company's DUREVER™ brand, which includes NexBoard™ and NexPatch™. The Company's proprietary Durazite™ fire-retardant technology, which originated from aerospace research into fire-resistant polymers for aircraft components, exemplifies the Factor X model: a technology platform that crosses from one industry into another, creating compounding commercial value. In the Aerospace and Advanced Flight Systems domain, Factor X monitors the convergence of autonomous UAV systems, hypersonic propulsion, space-based additive manufacturing, and electric vertical takeoff and landing platforms, with emphasis on dual-use applications across military and commercial markets. In Quantum Computing, the division evaluates near-term commercial viability across drug discovery, financial modeling, logistics optimization, and AI acceleration, tracking hardware architectures and error correction milestones as the field approaches practical deployment. The Data Security and Encryption domain focuses on post-quantum cryptography, zero-trust architectures, and AI-driven threat detection, technologies with urgency given that NIST has established 2030 as the post-quantum security compliance deadline for critical systems. Artificial Intelligence research within Factor X encompasses autonomous robotics, predictive analytics, computer vision, and large language models, with particular attention to manufacturing, defense, healthcare, and financial market applications. The Advanced Quantum-Based Energy Concepts domain investigates quantum-enhanced energy harvesting, next-generation fusion concepts, quantum battery architectures, and topological energy transfer, technologies with potential to fundamentally disrupt global energy infrastructure. Finally, Supply Chain Innovation evaluates AI-driven logistics optimization, blockchain-based provenance tracking, autonomous warehousing, and digital twin supply networks, with an emphasis on supply chain resilience and cost reduction across manufacturing, defense, and global trade.
Factor X is designed to function as a modern counterpart to Lockheed Martin's legendary Skunk Works, uniting elite scientific and engineering talent under a single mission: compress development cycles, integrate breakthrough systems across disciplines, and drive disruptive technologies from early discovery into scalable deployment. The unifying conviction of Factor X is that the most consequential technologies of the next decade will not emerge from within a single discipline, but from the collision of several at once. Factor X identifies, evaluates, and commercializes technologies with transformative potential across defense, critical infrastructure, energy, and industry. The Factor X model is not simply to track emerging technology, but to evaluate it rigorously, identify commercialization pathways, and position Xeriant to capture value at the moment a technology crosses from early stage promise into scalable, deployable reality. The division is composed of a network of world-class experts in science and technology and represents one of the Company's core trademarks: Technologies that Define the Future™. Factor X was established to create a force multiplier where top talent collaborates to shift outdated paradigms and accelerate breakthrough innovation. General Holt's appointment builds on his expanded strategic role within the Company, which includes identifying acquisition candidates and high-impact technologies across artificial intelligence, quantum computing, and data science.
| F-9 |
| Table of Contents |
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The consolidated financial statements, which include the accounts of the Company, American Aviation Technologies (“AAT”), and Eco-Aero, LLC are prepared in conformity with generally accepted accounting principles in the United States of America (U.S. GAAP). The consolidated financial statements, which include the accounts of the Company and its subsidiaries, and related disclosures have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The financial statements have been prepared using the accrual basis of accounting in accordance with U.S. GAAP (“United States Generally Accepted Accounting Principles”) and presented in US dollars. The fiscal year end is June 30.
Going Concern
These consolidated financial statements have been prepared on a going-concern basis, which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred net losses since inception and has an accumulated deficit of $
Failure to raise adequate capital and generate adequate revenues could result in the Company having to curtail or cease operations. The Company’s ability to raise additional capital through the future issuances of the common stock is unknown. Additionally, even if the Company does raise sufficient capital to support its operating expenses and generate adequate revenues, there can be no assurances that the revenue will be sufficient to enable it to develop to a level where it will generate profits and cash flows from operations. These matters raise substantial doubt about the Company’s ability to continue as a going concern; however, the accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. These consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classifications of the liabilities that might be necessary should the Company be unable to continue as a going concern.
Principles of Consolidation
The consolidated financial statements include the accounts of Xeriant, Inc., AAT, Eco-Aero, LLC, XTI Aircraft (a variable interest entity) and BlueGreen Composites, LLC. The Company owns a 64% controlling interest in AAT. As of April 1, 2026, BlueGreen Composites, LLC has been deconsolidated as the Company has shut down the entity. All intercompany balances and transactions have been eliminated.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant assumptions and estimates relate to the valuation of warrants associated with convertible debt. Actual results could differ from these estimates.
Reclassification of Prior Year Presentation
Certain prior year amounts have been reclassified to conform to the current year presentation. Specifically, Convertible notes payable, net of discount and Convertible notes payable, net of discount–in default in the Consolidated Balance for the year ended June 20, 2025, were presented to provide additional detail for notes not in default and notes in default. The reclassifications had no effect on previously reported total assets, total liabilities, stockholders’ deficit, net loss or cash flows.
| F-10 |
| Table of Contents |
Fair Value Measurements and Fair Value of Financial Instruments
The Company adopted Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements. ASC Topic 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:
Level 1: Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.
Level 2: Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.
Level 3: Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.
The estimated fair value of certain financial instruments, including all current liabilities are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.
The inputs to the valuation methodology of stock options and warrants were under level 3 fair value measurements.
ASC subtopic 825-10, Financial Instruments (“ASC 825-10”) requires disclosure of the fair value of certain financial instruments. The carrying value of cash and cash equivalents, accounts payable and accrued liabilities as reflected in the consolidated balance sheets, approximate fair value because of the short-term maturity of these instruments. All other significant financial assets, financial liabilities and equity instruments of the Company are either recognized or disclosed in the consolidated financial statements together with other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit risk. Where practicable the fair values of financial assets and financial liabilities have been determined and disclosed; otherwise only available information pertinent to fair value has been disclosed.
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 consolidated statements of cash flows, the Company considers highly liquid investments with an original maturity of three months or less to be cash equivalents. The Company has no cash equivalents.
Impairment of Long-Lived Assets
In accordance with ASC 360-10, Impairment and Disposal of Long-Lived Assets, the Company, on a regular basis, reviews the carrying amount of long-lived assets for the existence of facts or circumstances, both internally and externally, that suggest impairment. The Company determines if the carrying amount of a long-lived asset is impaired based on anticipated undiscounted cash flows, before interest, from the use of the asset. In the event of impairment, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the asset. Fair value is determined based on appraised value of the assets or the anticipated cash flows from the use of the asset, discounted at a rate commensurate with the risk involved. During the years ended June 30, 2026 and 2025, there were no impairments.
| F-11 |
| Table of Contents |
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.
Stock-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 years ended June 30, 2026 and 2025, the Company recognized $
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 consolidated statements of operations included in general and administrative expenses.
Finance leases are recorded as a finance lease liability and property and equipment asset, based on the present value of lease payments. The asset is depreciated, and the liability is amortized with interest expense incurred over the life of the lease.
As permitted under the new guidance, the Company has made an accounting policy election not to apply the recognition provisions of the guidance to short term leases (leases with a lease term of twelve months or less that do not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise); instead, the Company will recognize the lease payments for short term leases on a straight-line basis over the lease term.
Research and Development Expenses
Expenditures for research and development are expensed as incurred. The Company incurred research and development expenses of $
| F-12 |
| Table of Contents |
Advertising and Marketing Expenses
The Company expenses advertising and marketing costs as they are incurred. The Company recorded advertising expenses in the amount of $
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.
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 are as follows:
|
| Years ended June 30, |
| |||||
|
| 2026 |
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| 2025 |
| ||
Warrants |
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| ||
Convertible notes payable |
|
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| ||
Preferred stock |
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| ||
Total |
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| ||
For the year ended June 30, 2026, the Company had net income. As such, the above potential common shares have been included in the diluted net income per share for the years ended June 30, 2026. For year ended June 30, 2025, the Company had a net loss. As a result, those shares have been excluded from the diluted net loss per share calculations for those periods because the effect of including them would be anti-dilutive.
| F-13 |
| Table of Contents |
Segment Reporting
The Company has determined that it has one reportable segment, which includes discovery, development and commercialization of transformative technologies, including advanced materials, which can be successfully integrated and deployed across multiple industrial sectors. The single segment was identified based on how the Chief Operating Decision Maker, who was determined to be the Company’s Chief Executive Officer, manages and evaluates performance and allocates resources.
Recent Accounting Pronouncements
All recent accounting pronouncements issued by the Financial Accounting Standards Board, did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements.
NOTE 3 – 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
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,
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 $
| F-14 |
| Table of Contents |
The Company includes the assets and liabilities related to the VIE in the consolidated balance sheets. All significant intercompany balances and transactions have been eliminated in consolidation of the VIE. Xeriant provided 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:
|
| June 30, 2026 |
|
| June 30, 2025 |
| ||
Assets |
|
|
|
|
|
| ||
Cash |
| $ |
|
| $ |
| ||
Total Assets |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
Due to Xeriant Inc. |
| $ |
|
| $ |
| ||
Total Liabilities |
| $ |
|
| $ |
| ||
NOTE 4 – CONCENTRATION OF CREDIT RISKS
The Company maintains accounts with financial institutions. All cash in checking accounts is non-interest bearing and is fully insured by the Federal Deposit Insurance Corporation (FDIC). At times, cash balances may exceed the maximum coverage provided by the FDIC on insured depositor accounts. The Company believes it mitigates its risk by depositing its cash and cash equivalents with major financial institutions. On June 30, 2026, and June 30, 2025, the Company had $
NOTE 5 – OPERATING LEASE RIGHT-OF-USE ASSET AND OPERATING LEASE LIABILITY
On February 13, 2025, the Company executed an agreement to lease office space at 3651 FAU Boulevard, Suite 400, Boca Raton, FL 33431.
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
Right-of-use asset is summarized below:
|
| June 30, 2026 |
|
| June 30, 2025 |
| ||
Office lease |
| $ |
|
| $ |
| ||
Less accumulated amortization |
|
| ( | ) |
|
| ( | ) |
Right of use assets, net |
| $ |
|
| $ |
| ||
| F-15 |
| Table of Contents |
Operating lease liability is summarized below:
|
| June 30, 2026 |
|
| June 30, 2025 |
| ||
Office lease |
| $ |
|
| $ |
| ||
Less: current portion |
|
| ( | ) |
|
| ( | ) |
Long term portion |
| $ |
|
| $ |
| ||
Maturity of lease liabilities are as follows:
Year ended June 30, 2027 |
| $ |
| |
Total future minimum lease payments |
|
|
| |
Less: Present value discount |
|
| ( | ) |
Lease liability |
| $ |
|
The weighted average remaining lease term is 0.59 years. The weighted average remaining discount rate is
NOTE 6 – CONVERTIBLE NOTES PAYABLE, IN DEFAULT
The carrying value of convertible notes payable in default as of June 30, 2026, and 2025, is as follows.
|
| June 30, |
|
| June 30, |
| ||
Convertible Notes Payable |
| 2026 |
|
| 2025 |
| ||
Convertible notes payable issued October 27, 2021 (0% interest) – Auctus Fund LLC |
| $ |
|
| $ |
| ||
Convertible notes payable (10% interest) |
|
|
|
|
|
| ||
Total face value |
| $ |
|
| $ |
| ||
Auctus Fund LLC Senior Secured Note
Through Maxim Group, LLC, the Company was introduced to Auctus Fund LLC (“Auctus”) for the purpose of providing bridge loan funding to satisfy the requirements of a pending merger with XTI Aircraft under a letter of intent signed in September 2021. On October 27, 2021, the Company issued a convertible note payable with Auctus with the principal of $
| F-16 |
| Table of Contents |
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
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
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 $
As of June 30, 2024, a total of $
Effective October 29, 2025, Xeriant entered into a Settlement Agreement with Auctus to restructure the Auctus Note and related Xeriant obligations. The Settlement Agreement provides, inter alia, the following:
1. The Company will issue to Auctus
2. The Company will pay Auctus $3,500,000 as follows: (A) $
| F-17 |
| Table of Contents |
3. Within ten (10) business days of receipt by the Company of any money or any other consideration pertaining to the legal action brought by the Company against XTI Aircraft Company, the Company will transfer litigation proceeds to Auctus on a preferred basis and share on a percentage basis thereafter net of legal fees not to exceed $250,000.
4. Provided that the Company timely makes all payments with respect to the $3,500,000, Auctus will return to Company (a) a Warrant dated July 26, 2022, to purchase
5. So long as the Company makes all payments as set forth above, Auctus will suspend any further exercise of its conversion rights under the Note.
6. The Company has issued a full and unconditional release to Auctus regarding any claims that the Company has against Auctus with respect to the Note and all agreements relating to the Note.
7. The Company agrees that it will not pursue, file or permit to be pursued. any civil action against Auctus with regard to the released claims.
8. Provided that no event of default has occurred under the Settlement Agreement, Auctus will not pursue, file, or assert any action, suit or legal proceeding against the Company seeking equitable or monetary relief in connection with the Note.
9. Auctus will be entitled to retain its original warrant to purchase
The foregoing summary of the Settlement Agreement does not purport to be complete, and is qualified in its entirety by the terms and conditions set forth in Form 8-K filed with the SEC on November 12, 2025.
The Company and Auctus have also entered into a Leak-Out Agreement regarding the sale by Auctus of common stock received by Auctus pursuant to a conversion or exercise of any security held by Auctus.
As of June 30, 2026 the Company has not made any cash payments in connection with the settlement agreement.
As a result of the agreement, the Company extinguished the $
On May 18, 2026, the holder agreed to extend the terms of the agreement until July 31, 2026. As consideration for the extension, the Company agreed to issue
| F-18 |
| Table of Contents |
Convertible notes payable (10% interest), in default
Between January 2023 and June 2025, the Company issued multiple convertible notes payable with a coupon rate of 10% and a maturity date of one year. The Notes are convertible at a fixed price of $
During the years ended June 30, 2026, $
During the years ended June 30, 2026 and 2025, the Company recorded $
NOTE 7 – CONVERTIBLE NOTES PAYABLE
The carrying value of convertible notes payable, net of discount at June 30, 2026, and 2025, was as follows:
|
| June 30, |
|
| June 30, |
| ||
Convertible Notes Payable |
| 2026 |
|
| 2025 |
| ||
Convertible notes payable (10% interest) |
| $ |
|
| $ |
| ||
Less unamortized discount |
|
| ( | ) |
|
| ( | ) |
Total face value |
| $ |
|
| $ |
| ||
Between July 2025 and June 2026, the Company issued multiple convertible notes payable with a coupon rate of
During the year ended June 30, 2026, $
During the years ended June 30, 2026 and 2025, the Company recorded $
| F-19 |
| Table of Contents |
The Company evaluated the detachable warrants under the requirements of ASC 480 and concluded that the warrants do not fall within the scope of ASC 480. The Company next evaluated the notes under the requirements of ASC 815 “Derivatives and Hedging” and concluded the warrants meet equity classification. The warrants issued were valued using Black-Scholes Merton (“BSM”) and were determined to have an aggregate value of $
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 |
| $ |
|
Effective contractual conversion rates |
| $ |
|
Contractual term to maturity |
|
| |
Market volatility: |
|
|
|
Volatility |
|
| |
Risk-adjusted interest rate |
|
|
NOTE 8 – RELATED PARTY TRANSACTIONS
Consulting fees
During the years ended June 30, 2026 and 2025, the Company recorded $
During the years ended June 30, 2026 and 2025, the Company recorded $
During the years ended June 30, 2026 and 2025, the Company recorded $
The above transactions are not necessarily indicative of 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.
| F-20 |
| Table of Contents |
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
On July 6, 2021, the Company provided an option to an advisor to purchase
On July 28, 2021, the Company agreed to issue to an advisor
On August 9, 2021, the Company agreed to issue to an advisor
On August 20, 2021, the Company agreed to issue to an advisor
On January 20, 2022, the Company agreed to issue to an advisor
On March 1, 2022, the Company agreed to issue to an advisor
On March 20, 2022, the Company agreed to issue to an advisor
| F-21 |
| Table of Contents |
On January 1, 2025, the Company agreed to issue to two advisors
On January 22, 2025, the Company agreed to issue an advisor
On October 10, 2025, the Company agreed to issue a new advisor
Litigation
Effective October 29, 2025, Xeriant terminated its previously disclosed litigation proceedings with Auctus Fund, LLC, and entered into a Settlement Agreement with Auctus to restructure the Auctus Note and related obligations. Xeriant is currently working on securing funding to fulfill its obligations under the Settlement Agreement and has ongoing discussions with Auctus regarding extending the cash payments based on the Company’s timelines in executing its business plan, particularly certification testing of NEXBOARD. The Company’s ongoing lawsuit against XTI Aircraft Company has a connection to the Auctus matter in that the Company’s obligations to Auctus were, according to Xeriant’s complaint, to be assumed by XTI as provided in a Letter Agreement. Separately, Auctus Fund, LLC, sued XTI related to the Letter Agreement.
On December 6, 2023, the Company initiated legal proceedings against XTI Aircraft Company in the Federal District Court for the Southern District of New York (Case no. 1:23-cv-10656-JPO), along with other unnamed defendants, seeking to enforce the terms of the Letter Agreement, alleging fraudulent acts, deceptive maneuvers and intentional breaches, and seeking a range of remedies. These include the recovery of losses, expenses, attorneys’ fees, punitive damages and a compensatory damage award exceeding $
| F-22 |
| Table of Contents |
On July 2, 2025, the Company was served with a complaint from Midland Compounding for breach of contract in the payment of an invoice in the amount of $
To the Company’s knowledge, none of its directors, officers, five (5%) shareholders or affiliates are party to any legal proceedings that would have a material adverse effect on its business, financial condition, or operating results.
NOTE 10 – EQUITY
Common Stock
As of June 30, 2026, and 2025, the Company had
During the year ended June 30, 2026, the Company issued
Series A Preferred Stock
There are
| · | Voting: The preferred shares shall be entitled to |
|
|
|
| · | 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 |
|
|
|
| · | 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. |
During the year ended June 30, 2026,
As of June 30, 2026 and 2025, the Company had
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
As of June 30, 2026 and 2025, the Company had
| F-23 |
| Table of Contents |
Warrants
As of June 30, 2026 and 2025, the Company had
|
|
Number of Warrants |
|
|
Weighted- Average Exercise Price |
|
| Weighted- Average Contractual Term (in years) |
|
|
Aggregate Intrinsic Value |
| ||||
Outstanding at June 30, 2024 |
|
|
|
| $ |
|
|
|
|
| $ | - |
| |||
Granted |
|
|
|
| $ |
|
|
|
|
| $ | - |
| |||
Exercised |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
Canceled |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at June 30, 2025 |
|
|
|
| $ |
|
|
|
|
| $ | - |
| |||
Granted |
|
|
|
| $ |
|
|
|
|
| $ | - |
| |||
Exercised |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
Canceled |
|
| - |
|
|
|
|
|
|
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|
|
|
|
|
|
Total at June 30, 2026 |
|
|
|
| $ |
|
|
|
|
| $ | - |
| |||
Exercisable at June 30, 2026 |
|
|
|
| $ |
|
|
|
|
| $ | - |
| |||
NOTE 11 – INCOME TAXES
The Company did not provide any current or deferred US federal income tax provision or benefit for the periods ending June 30, 2025, as they incurred a tax loss during that period. The Company did provide a deferred US federal income tax provision for the years ended June 30, 2026 as they did have net income.
When it is more likely than not that a tax asset cannot be realized through future income, the Company must record an allowance against any future potential future tax benefit. The Company has provided a full valuation allowance against the net deferred tax asset, consisting of net operating loss carry forwards, because management has determined that it is more likely than not that the Company will not earn income sufficient to realize the deferred tax assets during the carry forward periods.
The Company has not taken a tax position that, if challenged, would have a material effect on the consolidated financial statements for the years ended June 30, 2026 and 2025 as defined under ASC 740, “Accounting for Income Taxes.”
The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before provision for income taxes.
| F-24 |
| Table of Contents |
The sources and tax effects of the differences for the periods presented are as follows:
|
| Years Ended |
| |||||
|
| June 30, 2026 |
|
| June 30, 2025 |
| ||
U.S. statutory federal income tax rate |
|
| % |
|
| % | ||
State income taxes, net of federal income tax |
|
| % |
|
| % | ||
Change in valuation allowance |
|
| ( | )% |
|
| ( | )% |
Effective income tax rate |
|
| 0 | % |
|
| 0 | % |
A reconciliation of the income taxes computed at the statutory rate is as follows:
|
| Years Ended |
| |||||
|
| June 30, 2026 |
|
| June 30, 2025 |
| ||
|
|
|
|
|
|
| ||
Tax credit (expense) at statutory rate (26.5%) |
| $ | ( | ) |
| $ |
| |
Increase (decrease) in valuation allowance |
|
|
|
|
| ( | ) | |
Income tax expense |
| $ | ( | ) |
| $ |
| |
At June 30, 2026, and June 30, 2025, the significant components of the deferred tax assets are summarized below:
|
| June 30, |
|
| June 30, |
| ||
|
| 2026 |
|
| 2025 |
| ||
|
|
|
|
|
|
| ||
Net operating loss carry-forward |
| $ |
|
| $ |
| ||
Valuation allowance |
|
| ( | ) |
|
| ( | ) |
Net deferred tax asset (liability) |
| $ |
|
| $ |
| ||
As of June 30, 2026, and 2025, the Company had a federal net operating loss carryforward of $
NOTE 12 – SUBSEQUENT EVENTS
Stock Issuances
On July 1, 2026, the Company issued
On July 6, 2026, the Company issued
On July 9, 2026, the Company issued
On July 22, 2026, the Company issued
On July 22, 2026, the Company issued
| F-25 |
| Table of Contents |
On August 3, 2026, the Company issued
On August 12, 2026, the Company issued
On August 12, 2026, the Company issued
Convertible Notes
On July 28, 2026, the Company issued a convertible note in the amount of $
On August 21, 2026, the Company issued a convertible note in the amount of $
On August 25, 2026, the Company issued a convertible note in the amount of $
On September 4, 2026, the Company issued a convertible note in the amount of $
On September 8, 2026, the Company issued a convertible note in the amount of $
Auctus Settlement Agreement
On September 25, 2026,
Midland Compounding Litigation
On August 6, 2026, the Company settled the lawsuit with Midland Compounding by agreeing to make three $
Intellectual Property
On July 14, 2026, a formal patent was issued by the United States Patent and Trademark Office (USPTO) related to NexBoard, 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 were issued to Xeriant. Just prior to that date, Xeriant filed two continuing applications adding additional claims, and a PCT (Patent Cooperation Treaty) application, an international patent application that streamlines the process of pursuing patent protection in multiple countries.
| F-26 |
| Table of Contents |
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management is responsible for maintaining disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that the Registrant files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. In addition, the disclosure controls and procedures must ensure that such information is accumulated and communicated to the Registrant’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required financial and other required disclosures.
At June 30, 2026, an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13(a)-15(e) and 15(d)-15(e) of the Exchange Act) was carried out under the supervision and with the participation of Keith Duffy our Chief Executive Officer and Brian Carey our Chief Financial Officer. Based on his evaluation of our disclosure controls and procedures, he concluded that, at June 30, 2026, our disclosure controls and procedures are effective.
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over our financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP.
Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions; (ii) provide reasonable assurance that transactions are recorded as necessary for preparation of our financial statements; (iii) provide reasonable assurance that receipts and expenditures of company assets are made in accordance with management authorization; and (iv) provide reasonable assurance that unauthorized acquisition, use or disposition of Company assets that could have a material effect on our financial statements would be prevented or detected on a timely basis.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because changes in conditions may occur or the degree of compliance with the policies or procedures may deteriorate.
| 40 |
| Table of Contents |
Our management has conducted an evaluation, under the supervision and with the participation of Keith Duffy, our Chief Executive Officer, and Brian Carey, our Chief Financial Officer, of the effectiveness of our internal control over financial reporting as of June 30, 2026. This evaluation was based on criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO, Internal Control-Integrated Framework. Based upon such assessment, Keith Duffy concluded that our internal controls over financial reporting are effective, based upon the Company’s size and staff size, and that there are no apparent material weaknesses in our internal controls over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.
This Report shall not be deemed to be filed for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, and is not incorporated by reference into any filing of the Registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. The rules of the Securities and Exchange Commission do not require an attestation of the Management’s report by our registered public accounting firm in this annual report.
Changes in Internal Controls
There have been no changes in our internal control over financial reporting that occurred during the fourth quarter of our fiscal year ended June 30, 2026, that have materially affected, or are reasonable likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information
None.
Item 9C. Disclosures Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
| 41 |
| Table of Contents |
PART III
Item 10. Directors, Executive Officers and Corporate Governance.
Directors and Executive Officers of Xeriant, Inc.
The following sets forth information about our directors and executive officers:
Name |
| Age |
| Position |
| ||||
Keith Duffy |
| 65 |
| Chairman of the Board and CEO |
Scott Duffy |
| 65 |
| Executive Director |
Mark Sternberg |
| 59 |
| Director |
Pablo Lavigna |
| 55 |
| Chief Information Officer |
Brian Carey |
| 63 |
| Chief Financial Officer |
Keith Duffy, Chairman of the Board and CEO
Mr. Duffy has over thirty years of experience in investment banking, management, finance, strategic planning and operations, and has been a principal in a number of start-up companies. He arranged the merger of American Aviation Technologies with a public company. He was formerly the founder and CEO of a public company and the founder and CEO of two bank holding companies, a software development company and a biotech company now trading on NASDAQ. Mr. Duffy trained to be a private pilot when he was 16 years old and worked at an FBO at the Palm Beach International Airport after college to further his knowledge of the aviation industry. He has held a variety of management, accounting, and finance positions over the years. He has been a licensed securities broker and currently holds a real estate license and a NMLS mortgage broker’s license in Florida. He has also served on the Florida Bar Grievance Committee. Mr. Duffy attended Wake Forest University and Rollins College, where he earned a B.A. Degree in Business Administration and Mathematics in 1982.
Scott M. Duffy, Executive Director, Corporate Operations
Scott Duffy has over thirty years of experience in management, operations, strategic planning, information technology, statistical analysis, marketing and promotion, and sales development. He has collaborated with his brother Keith over many years to develop plans and research for a wide range of start-up companies, including American Aviation Technologies and the Halo project. As Senior Vice President, Operations and Administration at Globe Marketing Services, he was responsible for planning and coordinating the activities of internal management and the support staff to meet corporate objectives. As Newsstand Circulation Director at American Media, one of the largest publishers in North America, he was responsible for the $545 million retail sales division, overseeing both international and domestic distribution. Over his career he has been instrumental in increasing profitability though optimizing core competencies. Mr. Duffy was a co-founder and principal in a number of real estate development projects beginning in 2006. Mr. Duffy trained to be a private pilot when he was 16 years old and has always been interested in aviation. He attended Wake Forest University and Rollins College, where he earned a B.A. in Business Administration and Mathematics in 1982.
| 42 |
| Table of Contents |
Mark Sternberg, Director
An industry leader in the field of nanotechnology, Mark Sternberg has more than 30 years of experience in the development and commercialization of innovative nanomaterials for the industrial, biotech and construction markets. Over his impressive career, he has been responsible for product management, manufacturing, sales, licensing, IP, finance, marketing and distribution. He has held senior executive roles at both public and private companies and holds multiple patents in nanomaterials and coatings. As President and CEO of Moyco Precision Abrasives, he oversaw the development of nanomaterial and submicron abrasive formulations, coatings, quality control, and research and development, and effectuated the company’s sale to Saint-Gobain, a $50B global leader in advanced materials. Following the acquisition, he became National Sales Manager and Product Manager for Saint-Gobain Abrasives, a division with $2B in sales. Among his many accomplishments, he was a pioneer in producing nanodiamonds, the first in the U.S., which can be used for many industrial and biomedical applications, including metal coatings, polishing of semiconductors, ophthalmic lenses, lubrication, drug delivery, and energy production. As CFO for Debina Diagnostics, a biotechnology firm, he developed fluorescent nanodiamond particles for medical imaging applications and was recognized by the Journal of Nanomedicine. Because of his unique background and expertise, he is highly regarded as a consultant for large multi-national corporations and private companies.
Pablo Lavigna, Chief Information Officer
Pablo Lavigna has over twenty years of experience in the Information Technology and Software Engineering field. He developed extensive experience as Director of Information Technology operations at a private firm. Mr. Lavigna has developed and implemented network security procedures and developed software for multiple industries. He holds several Microsoft and CompTIA certifications including Microsoft Certified System Engineer (MCSE), Microsoft Certified System Administrator (MCSA), and Microsoft Certified Professional (MCP), and CompTIA Security+. Mr. Lavigna attended Florida International University where he earned his degree in Information Technology and Business with Magna Cum Laude Honors.
Brian Carey, Chief Financial Officer
Brian Carey is an entrepreneur and business development specialist who built and ran a successful accounting, tax and business management firm for over 30 years. He started a financial management/insurance and investment firm in 1984, then expanded it to add accounting, tax preparation and business planning and management services in 1986 called Carey Associates Accounting and Tax Services. More recently, Mr. Carey started Palm Beach Business Development Group, LLC. This company provides business start-up and development services to a limited number of client/partner companies. He holds a Bachelor of Accounting Degree from Penn State University.
| 43 |
| Table of Contents |
Director Independence
We are not currently a “listed company” under SEC rules and are therefore not required to have a Board comprised of a majority of independent directors or separate committees comprised of independent directors.
Director Independence; Standing Committees
The Company’s common stock is traded on OTCID under the symbol “XERI.” The OTCID trading platform does not maintain any standards regarding the “independence” of the directors for our Board of Directors, and we are not otherwise subject to the requirements of any national securities exchange or an inter- dealer quotation system with respect to the need to have a majority of our directors be independent.
The Company’s Board presently has no functioning standing committees.
Board Leadership Structure and Role in Risk Oversight
Although we have not adopted a formal policy on whether the Chairman and Chief Executive Officer should be separate or combined, we have traditionally determined that it is in the best interests of the Company and its shareholders to combine these roles due to the small size and early stage of the Company.
Family Relationships
Keith Duffy, Chairman and CEO, and Scott Duffy, Executive Director, are brothers.
Board Committees
Audit Committee
We do not have a separately designated audit committee of the board. Audit committee functions are performed by our board of directors. None of our directors are deemed independent. Two directors also hold positions as our officers. Our Board of Directors is responsible for: (1) selection and oversight of our independent accountant; (2) establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal controls and auditing matters; (3) establishing procedures for the confidential, anonymous submission by our employees of concerns regarding accounting and auditing matters; (4) engaging outside advisors; and, (5) funding for the outside auditory and any outside advisors’ engagement by the audit committee.
Nominees
There have been no material changes to the procedures by which security holders may recommend nominees to the Registrant’s board.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires our directors, executive officers and beneficial owners of more than 10% of our common stock to file with the SEC reports of their holdings of, and transactions in, our common stock. Based solely upon our review of copies of such reports and written representations from reporting persons that were provided to us, we believe that our officers, directors and 10% stockholders complied with these reporting requirements with respect to our fiscal year ended June 30, 2026.
Code of Ethics
The Registrant has adopted a corporate code of ethics. The Registrant believes its code of ethics is reasonably designed to deter wrongdoing and promote honest and ethical conduct; provide full, fair, accurate, timely and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting of code violations; and provide accountability for adherence to the code.
| 44 |
| Table of Contents |
Item 11. Executive Compensation.
For the year ended June 30, 2026, all officers and directors were compensated as independent contractors based upon respective consulting agreements as noted in Table below.
The following table shows information regarding the compensation earned for the years ended June 30, 2026 and 2025 by our named executive officers:
EXECUTIVE COMPENSATION TABLE
Executive |
| Year |
| Salary ($) |
|
| Bonus ($) |
|
| Stock Awards ($) |
|
| Option Awards ($) (1) |
|
| Non-Equity Incentive Plan Compensation ($) |
|
| Non-Qualified Deferred Compensation Earnings ($) |
|
| All Other Compensation ($) |
|
| Total ($) |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Keith Duffy (1) |
| 2026 |
| $ | 76,500 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
| $ | 76,500 |
|
|
| 2025 |
| $ | 101,500 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
| $ | 101,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scott Duffy (1) |
| 2026 |
| $ | 76,500 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
| $ | 76,500 |
|
|
| 2025 |
| $ | 101,500 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
| $ | 101,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pablo Lavigna (2) |
| 2026 |
| $ | 88,000 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
| $ | 88,000 |
|
|
| 2025 |
| $ | 95,000 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
| $ | 95,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brian Carey (3) |
| 2026 |
| $ | 55,000 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
| $ | 55,000 |
|
|
| 2025 |
| $ | 60,000 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
| $ | 60,000 |
|
| (1) | Paid as consulting fees for the years ended June 30, 2026 and 2025 to Ancient Investments, LLC, a company owned by Keith Duffy, CEO and Scott Duffy, Executive Director of Operations. The Company recorded $0 in accrued liabilities related to unpaid compensation for Keith Duffy and Scott Duffy for the years ended June 30, 2026 and 2025. |
|
|
|
| (2) | Paid as consulting fees for the years ended June 30, 2026 and 2025 to AMP Web Services, LLC, a company owned by Pablo Lavigna, CIO. |
|
|
|
| (3) | Paid as consulting fees for the years ended June 30, 2026 and 2025 to Keystone Business Development Partners, LLC, a company owned by Brian Carey, CFO. The Company recorded $0 in accrued liabilities related to unpaid compensation for Brian Carey for the years ended June 30, 2026 and 2025. |
| 45 |
| Table of Contents |
Director Compensation
The following table shows information regarding the compensation earned during the years ended June 30, 2026, and 2025 by the members of our board of directors.
DIRECTOR COMPENSATION TABLE
Executive |
| Year |
| Salary ($) |
|
| Bonus ($) |
|
| Stock Awards ($) |
|
| Option Awards ($) (1) |
|
| Non-Equity Incentive Plan Compensation ($) |
|
| Non-Qualified Deferred Compensation Earnings ($) |
|
| All Other Compensation ($) |
|
| Total ($) |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Keith Duffy |
| 2026 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Director |
| 2025 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scott Duffy |
| 2026 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Director |
| 2025 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Edward C. DeFeudis (1) |
| 2026 |
| $ | 0 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
| $ | 0 |
|
Director |
| 2025 |
| $ | 80,000 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
| $ | 80,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark Sternberg |
| 2026 |
| $ | - |
|
|
| - |
|
| $ | 40,500 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
| $ | 40,500 |
|
Director |
| 2025 |
| $ | - |
|
|
| - |
|
| $ | - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
| $ | - |
|
| (1) | Paid as consulting fees for the year ended June 30, 2025 to Edward C. DeFeudis, a member of the board of directors. The Company recorded $0 in accrued liabilities related to unpaid compensation for Edward DeFeudis, for the year ended June 30, 2026. |
Executive Compensation Policies as They Relate to Risk Management
Management has considered whether our compensation policies might encourage inappropriate risk taking by the Company’s executive officers and other employees. The Compensation Committee has determined that the current compensation structure aligns the interests of the executive officers with those of the Company without providing rewards for excessive risk taking by awarding a mix of fixed and performance-based or discretionary bonuses with the performance-based compensation focused on profits as opposed to revenue growth.
Option Exercises and Fiscal Year-end Option Value Table
None of the named executive officers exercised any stock options during the year ended June 30, 2026, or held any outstanding stock options as of June 30, 2026.
| 46 |
| Table of Contents |
Incentive Plan
The Registrant does not have any equity compensation plans.
Consulting Agreements
None, although the officers are currently paid as related party consultants of the Company.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The table below sets forth as of June 30, 2026, information with respect to beneficial ownership of the Company’s common stock by:
| · | Each person known to the Company to own beneficially more than 5% of our outstanding common stock, either before or immediately after the merger. |
|
|
|
| · | Each of the post-Merger directors and executive officers of the Company. |
|
|
|
| · | All of our post-Merger directors and executive officers as a group. |
Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission. Shares of common stock subject to any warrants or options that are presently exercisable or exercisable within 60 days of June 30, 2026, are deemed outstanding for the purpose of computing the percentage ownership of the person holding the warrants or options but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. The numbers reflected in the percentage ownership columns are based on a fully diluted basis of the Company’s common stock outstanding after a conversion of the Series A Preferred Stock into Common Shares. The persons named in the table have sole voting and sole investment power with respect to all shares beneficially owned, subject to community property laws where applicable.
Name of Beneficial Owner |
| Number of Shares of Common Stock |
|
| Number of Series A Preferred Stock |
|
| Total Fully Diluted Shares |
|
| Percentage Represented on a Fully Diluted Basis |
| ||||
Ancient Investments, LLC (1) |
|
| - |
|
|
| 200,000 |
|
|
| 200,000,000 |
|
|
| 12.44 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Christopher Sawchuk |
|
| 16,890,791 |
|
|
| 100,000 |
|
|
| 116,890,791 |
|
|
| 7.27 | % |
Pablo Lavigna (2) |
|
| 13,454,545 |
|
|
| - |
|
|
| 13,454,545 |
|
|
| 0.84 | % |
Brian Carey (3) |
|
| 203,025 |
|
|
| - |
|
|
| 203,025 |
|
|
| 0.01 | % |
Mark Sternberg |
|
| 3,750,000 |
|
|
|
|
|
|
| 3,750,000 |
|
|
| 0.22 | % |
All directors and executive officers as a group (five persons) |
|
| 17,407,570 |
|
|
| - |
|
|
| 217,407,570 |
|
|
| 13.52 | % |
Total shares |
|
| 1,059,924,580 |
|
|
| 547,592 |
|
|
| 1,607,516,580 |
|
|
|
|
|
(1) | Keith Duffy is the Chairman and Chief Executive Officer of the Company, and is a beneficial owner of Ancient Investments, LLC. |
(2) | Pablo Lavigna is the Chief Information Officer of the Company and the beneficial owner of these shares, which are under his personal name and his company, AMP Web Services, LLC. |
(3) | Brian Carey is the Chief Financial Officer of the Company. |
| 47 |
| Table of Contents |
Item 13. Certain Relationships and Related Transactions, and Director Independence
Director Independence
We are not currently a “listed company” under SEC rules and are therefore not required to have a Board comprised of a majority of independent directors or separate committees comprised of independent directors. We currently do not have any independent directors as the term “independent” is defined by the rules of the Nasdaq Stock Market.
Item 14. Principal Accounting Fees and Services.
The following is a summary of the fees billed to us by Astra Audit & Advisory, LLC for professional services rendered for the fiscal years ended June 30, 2026 and 2025:
|
| Fiscal Year Ended |
| |||||
|
| June 30, 2026 |
|
| June 30, 2025 |
| ||
Audit Fees |
| $ | 81,515 |
|
| $ | 72,037 |
|
Audit Related Fees |
|
| - |
|
|
| - |
|
Tax Fees |
|
| - |
|
|
| - |
|
All Other Fees |
|
| - |
|
|
| - |
|
|
| $ | 81,515 |
|
| $ | 72,037 |
|
Audit Fees. Consists of fees billed for professional services rendered for the audit of our consolidated financial statements and review of interim consolidated financial statements included in quarterly reports and services that are normally provided in connection with statutory and regulatory filings or engagements.
Audit Related Fees. Consists of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under “Audit Fees”.
| 48 |
| Table of Contents |
Tax Fees. Consists of fees billed for professional services for tax compliance, tax advice and tax planning. These services include preparation of federal and state income tax returns.
All Other Fees. Consists of fees for products and services other than the services reported above.
Board of Directors’ Pre-Approval Policies
Our Board of Directors’ policy is to pre-approve all audit and permissible non-audit services provided by the independent auditors. These services may include audit services, audit related services, tax services, and other services. Pre-approval is generally provided for up to one year, and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. The independent auditors and management are required to periodically report to the Board of Directors regarding the extent of services provided by the independent auditors in accordance with this pre-approval and the fees for the services performed to date. The Board of Directors may also pre-approve particular services on a case-by-case basis.
Our Board of Directors has reviewed and discussed with Astra Audit & Advisory (“Astra”) our audited consolidated financial statements contained in this Annual Report on Form 10-K for the fiscal years ended June 30, 2026 and 2025, respectively. The Board of Directors also has discussed with Astra the matters required to be discussed pursuant to SAS No. 61 (Codification of Statements on Auditing Standards, AU Section 380), which includes, among other items, matters related to the conduct of the audit of our consolidated financial statements.
Based on the review and discussions referred to above, the Board of Directors determined that the audited consolidated financial statements be included in our Annual Report on Form 10-K for our fiscal year ended June 30, 2026, for filing with the SEC.
| 49 |
| Table of Contents |
PART IV
Item 15. Exhibits, Financial Statement Schedules
Exhibit Number |
| Document |
|
|
|
3.1 |
| Articles of Incorporation for Eastern World Solutions, Inc. dated December 18, 2009 (incorporated by reference to Exhibit 3.1 to Current Report on Form S-1 dated January 25, 2010. |
|
|
|
3.2 |
| Bylaws of Eastern World Solutions, Inc. (incorporated by reference to Exhibit 3.2 to Current Report on Form S-1 dated January 25, 2010. |
|
|
|
3.3 |
| Certificate of Designation of Series A Preferred shares effective September 30, 2019. |
|
|
|
3.4 |
| Certificate of Designation of Series B Preferred shares effective February 22. 2021. |
|
|
|
10.4 |
| Senior Secured Promissory Note (incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K filed on November 4, 2021). |
|
|
|
10.5 |
| Warrant (incorporated by reference to Exhibit 4.2 to Current Report on Form 8-K filed on November 4, 2021). |
|
|
|
10.6 |
| Security Agreement (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on November 4, 2021). |
|
|
|
10.7 |
| Amendment to Secured Promissory Note (incorporated by reference to Current Report on Form 8-K filed on August 3, 2022). |
|
|
|
14.1 |
| Code of Ethics (incorporated by reference to Exhibit 14.1 to the Form 10-K filed on February 15. 2011. |
|
|
|
31.1 |
| Certification of the principal executive officer pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
|
31.2 |
| Certification of the principal financial officer pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
|
32.1 |
| Certification of the principal executive officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
32.2 |
| Certification of the principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
101.INS |
| Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document). |
|
|
|
101.SCH |
| Inline XBRL Taxonomy Extension Schema |
|
|
|
101.CAL |
| Inline XBRL Taxonomy Extension Calculation |
|
|
|
101.DEF |
| Inline XBRL Taxonomy Extension Definition |
|
|
|
101.LAB |
| Inline XBRL Taxonomy Extension Label |
|
|
|
101.PRE |
| Inline XBRL Taxonomy Extension Presentation |
|
|
|
104 |
| Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
Item 16. Form 10-K Summary
None.
| 50 |
| Table of Contents |
SIGNATURES
In accordance with the Section 13 and 15(d) of the Securities and Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| XERIANT, INC. | ||
|
|
|
|
Date: September 28, 2026 | By: | /s/ Keith Duffy | |
|
| Keith Duffy |
|
| Title: | President and Chief Executive Officer (Principal Executive) |
|
|
|
|
|
Date: September 28, 2026 | By: | /s/ Brian Carey |
|
|
| Brian Carey |
|
| Title: | Chief Financial Officer |
|
Date: September 28, 2026 | By: | /s/ Scott Duffy |
|
|
| Scott Duffy |
|
| Title: | Executive Director, Corporate Operations |
|
| 51 |