XERIANT, INC.

Previous wording

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

Current wording

This section of the report should be read together with Footnotes of the Company’s audited financials for the year ended June 30, 2024. The unaudited condensed consolidated statements of operations for the nine months ended March 31, 2025 and 2024 are compared in the sections below.

Previous wording

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

Current wording

During the nine months ended March 31, 2025, the Company received $517,000 from issuance of convertible debt.

Previous wording

On December 6, 2023, the Company initiated legal proceedings against XTI Aircraft Company in the Federal District Court for the Southern District of New York (Case no. 1:23-cv-10656-JPO), along with other unnamed defendants, seeking to enforce the terms of the Letter Agreement, and alleging fraudulent acts, deceptive maneuvers and intentional breaches, seeking a range of remedies. These include the recovery of losses, expenses, attorneys’ fees, punitive damages and a compensatory damage award exceeding $500 million. The legal action aims to address the alleged misconduct comprehensively and to protect the Company’s interests in the face of XTI’s actions. The foregoing description of the legal action does not purport to be complete and is subject in its entirety by the full text of the complaint, a copy of which was filed in an 8-K on December 12, 2023, Exhibit 99.1. On February 29, 2024, the Company filed a Second Amended Complaint against XTI, along with other unnamed defendants, on February 29, 2024, and on March 13, 2024, XTI filed a partial Motion to Dismiss. On April 10, 2024, the Company filed a Memorandum of Law in Opposition to XTI’s Motion to Dismiss the Company’s Second Amended Complaint and is waiting for the court to rule on the matter.

Current wording

On December 6, 2023, the Company initiated legal proceedings against XTI Aircraft Company in the Federal District Court for the Southern District of New York (Case no. 1:23-cv-10656-JPO), along with other unnamed defendants, seeking to enforce the terms of the Letter Agreement, alleging fraudulent acts, deceptive maneuvers and intentional breaches and seeking a range of remedies. These include the recovery of losses, expenses, attorneys’ fees, punitive damages and a compensatory damage award exceeding $500 million. The legal action aims to address the alleged misconduct comprehensively and to protect the Company’s interests in the face of XTI’s actions. The foregoing description of the legal action does not purport to be complete and is subject in its entirety by the full text of the complaint, a copy of which was filed in an 8-K on December 12, 2023, Exhibit 99.1. On February 29, 2024, Xeriant filed a Second Amended Complaint alleging seven counts including intentional fraud, fraudulent concealment, breach of contract, unjust enrichment, unfair competition, quantum meruit, and misappropriation of confidential information. XTI filed a Motion to Dismiss on March 13, 2024, seeking to dismiss all Xeriant’s claims except for breach of contract. Xeriant filed a Memorandum of Law in Opposition to XTI’s Motion to Dismiss on April 10, 2024, and on January 14, 2025, the Court agreed with Xeriant’s position that its claims were validly alleged and denied all of XTI’s arguments in their entirety. On February 18, 2025, XTI filed its answer to Xeriant’s Second Amended Complaint adding two counter claims, including breach of fiduciary duty and breach of contract. Xeriant responded on March 18, 2025, moving to dismiss both counterclaims and on April 4, 2025, submitted a letter to the court challenging XTI’s filing of a Second Amended Answer and Counterclaims. The court subsequently allowed XTI’s filing of a Second Amended Answer and Counterclaims, and Xeriant is in the process of responding.

Previous wording

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.

Current wording

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.

Previous wording

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

Current wording

Nine months ended March 31, 2025, Results of Operations Compared with nine months ended March 31, 2024

Previous wording

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

Current wording

Total consulting and advisory expenses were $266,720 and $193,995 for the nine months ended March 31, 2025 and 2024, respectively, an increase of $72,725. In the current period, there were increased expenses for advisory board members due to new and restructured agreements.

Previous wording

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

Current wording

Total general and administrative expenses were $304,153 and $193,557 for the nine months ended March 31, 2025 and 2024, respectively, an increase of $110,596. The primary reason for the increase was increased expenses related to our subsidiary BlueGreen Composites, LLC. Expenses for BlueGreen Composites, LLC, relate to research, testing and business development costs for the Company’s advanced materials operations.

Previous wording

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

Current wording

Total professional fees were $161,123 and $212,986 for the nine months ended March 31, 2025 and 2024, respectively, a decrease of $51,863. The primary reason for the decrease was higher auditing fees and legal costs.

Previous wording

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

Current wording

Total research and development expenses were $56,800 and $147,259 for the nine months ended March 31 2025 and 2024, respectively, a decrease of $90,459. The primary reason for the decrease was increased testing and related travel costs in the prior period.

Previous wording

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

Current wording

Total other expenses consist of amortization of debt discount, interest expense related to convertible notes, loss and gain on extinguishment of debt and change in fair value of the convertible bridge loans. Total other expenses were $166,463 for the nine months ended March 31, 2025, compared to $921,206 for the nine months ended March 31, 2024. The decrease of $754,743 was primarily due to recording the Auctus default interest in the prior period.

Previous wording

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

Current wording

Total net loss was $1,319,759 for the nine months ended March 31, 2025, compared to $1,933,003 for the nine months ended March 31, 2024, a decrease of $613,244. The decrease of $613,244 was primarily due to recording the Auctus default interest in the prior period.

Previous wording

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

Current wording

Total consulting and advisory expenses were $141,600 and $39,650 for the three months ended March 31, 2025 and 2024, respectively, an increase of $101,950. In the current period, there were increased expenses for advisory board members due to new and restructured agreements.

Previous wording

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

Current wording

Total general and administrative expenses were $102,087 and $68,309 for the three months ended March 31, 2025 and 2024, respectively, an increase of $33,778. The primary reason for the increase was increased expenses related to our subsidiary BlueGreen Composites, LLC. Expenses for BlueGreen Composites, LLC, relate to research, testing and business development costs for the Company’s advanced materials operations.

Previous wording

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

Current wording

Total professional fees were $71,507 and $87,981 for the three months ended March 31, 2025 and 2024, respectively a decrease of $16,474. The primary reason for the decrease was higher auditing fees and legal costs.

Previous wording

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

Current wording

Total research and development expenses were $30,224 and $67,524 for the three months ended March 31 2025 and 2024, respectively, a decrease of $37,300. The primary reason for the decrease was reduced research and development expenses relating to BlueGreen Composites, LLC, during the current quarter.

Previous wording

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

Current wording

Total other expenses consist of amortization of debt discount and interest expense related to convertible notes. Total other expenses were $71,350 for the three months ended March 31, 2025, compared to $31,132 for the three months ended March 31, 2024. The increase of $40,218 was primarily due to interest expense in the current period related to additional convertible debt.

Previous wording

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

Current wording

Total net loss was $530,268 for the three months ended March 31, 2025, compared to $384,096 for the three months ended March 31, 2024. The increase of $146,172 was primarily due to increased consulting and advisory fees in the current period.

Previous wording

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

Current wording

The Company’s condensed consolidated financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. On March 31, 2025, and June 30, 2024, the Company had $53,587 and $653,117 in cash, respectively, and $8,598,180 and $8,661,248 in negative working capital, respectively. On March 31, 2025, the principal balance of the Auctus Senior Secured Promissory Note was $5,900,000. The Note matured on March 15, 2023, and the company has been in discussions with Auctus to resolve the liability. For the three months ended March 31, 2025 and 2024, the Company had a net loss of $530,268 and $384,096, respectively. For the nine months ended March 31, 2025 and 2024, the Company had a net loss of $1,319,759 and $1,933,033, respectively. Continued losses may adversely affect the liquidity of the Company in the future. Therefore, the factors noted above raise substantial doubt about our ability to continue as a going concern. The recoverability of a major portion of the recorded asset amounts shown in the accompanying unaudited condensed consolidated balance sheets is dependent upon continued operations of the Company, which in turn is dependent upon the Company’s ability to raise additional capital, obtain financing and to succeed in its future operations. The unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. To implement its business plan, the Company must raise sufficient funds in the form of equity, debt, or a combination thereof. Until the Company develops profitable operations, it is dependent upon management continually raising funds.

Previous wording

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

Current wording

During the nine months ended March 31, 2025, the Company’s operating activities used $1,116,530 of net cash used compared to using $1,059,894 of net cash used in operating activities during the nine months ended March 31, 2024. This difference primarily related to stock issued for services in the current period. During the nine months ended March 31, 2025, the Company’s investing activities were $0 compared to $8,163 of net cash used in investing activities during the nine months ended March 31, 2024. This difference related to net cash issued for notes receivable during the nine months March 31, 2024. During the nine months ended March 31, 2025, the Company’s financing activities were $517,000 compared to $1,380,000 of net cash added in financing activities during the nine months ended March 31, 2024. This difference related to the additional issuances of convertible notes during the nine months ended March 31, 2024.

Previous wording

Our discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these condensed consolidated financial statements requires us to make estimates and judgments which affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities (see Note 2, Summary of Significant Accounting Policies, contained in the notes to the Company’s condensed consolidated financial statements for the six months ended December 31, 2024 and 2023 contained in this filing). On an ongoing basis, we evaluate our estimates. The Company bases our estimates on historical experience and on various other assumptions which we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities which are not readily apparent from other sources. Actual results may differ from these estimates based upon different assumptions or conditions; however, we believe that our estimates are reasonable.

Current wording

Our discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these condensed consolidated financial statements requires us to make estimates and judgments which affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities (see Note 2, Summary of Significant Accounting Policies, contained in the notes to the Company’s condensed consolidated financial statements for the nine months ended March 31, 2025 and 2024 contained in this filing). On an ongoing basis, we evaluate our estimates. The Company bases our estimates on historical experience and on various other assumptions which we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities which are not readily apparent from other sources. Actual results may differ from these estimates based upon different assumptions or conditions; however, we believe that our estimates are reasonable.