XERIANT, INC.

Previous wording

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

Current wording

This section of the report should be read together with Footnotes of the Company’s audited consolidated financials for the year ended June 30, 2025. The unaudited condensed consolidated statements of operations for the three and nine months ended March 31, 2026 and 2025 are compared in the sections below.

Previous wording

During the six months ended December 31, 2025, the Company received $415,000 from issuance of convertible debt. The convertible notes issued during the six months ended December 31, 2025, contain a provision that prevents the Company from prepaying any principal or interest on the notes.

Current wording

During the nine months ended March 31, 2026, the Company received $590,000 from issuance of convertible debt. The convertible notes issued during the nine months ended March 31, 2026, contain a provision that prevents the Company from prepaying any principal or interest on the notes.

Previous wording

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.

Current wording

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. The Company’s counsel has been involved in settlement discussions, which have not been successful to date.

Previous wording

Six Months Ended December 31, 2025, Results of Operations Compared with Six Months Ended December 31, 2024

Current wording

Nine months Ended March 31, 2026, Results of Operations Compared with Nine months Ended March 31, 2025

Previous wording

Total general and administrative expenses were $53,293 and $202,066 for the six months ended December 31, 2025 and 2024, respectively, a decrease of $148,773. The primary reasons for the decrease was (i) a decrease in rent expense of $38,066 due to the Company entering into a new agreement in February 2025 for substantially less rent, $10,352 less in corporate and listing expenses in the current period, and (iii) $51,418 less in advertising and marketing expenses in the current period.

Current wording

Total general and administrative expenses were $112,026 and $304,153 for the nine months ended March 31, 2026 and 2025, respectively, a decrease of $192,127. The primary reasons for the decrease was (i) a decrease in rent expense of $27,655 due to the Company entering into a new agreement in February 2025 for substantially less and (iii) $119,016 less in advertising and marketing expenses in the current period.

Previous wording

Total professional fees were $142,625 and $89,616 for the six months ended December 31, 2025 and 2024, respectively, an increase of $53,009. The primary reason for the increase was higher legal costs in the current period.

Current wording

Total professional fees were $162,443 and $161,123 for the nine months ended March 31, 2026 and 2025, respectively, an increase of $1,320. The primary reason for the increase was higher audit fees in the amount of $7,477 in the current period offset by lower legal costs in the amount of $6,157 in the current period.

Previous wording

Total research and development expenses were $70,269 and $26,576 for the six months ended December 31, 2025, and 2024, respectively, an increase of $53,966. The primary reason for the increase was increased research and development expenses related to testing and initial product development schedule in the current period.

Current wording

Total research and development expenses were $99,905 and $56,800 for the nine months ended March 31, 2026, and 2025, respectively, an increase of $43,105. The primary reason for the increase was increased research and development expenses related to testing and initial product development schedule in the current period.

Previous wording

Total other expenses consist of amortization of debt discount related to convertible notes, interest expense related to convertible notes and gain on extinguishment of debt. Total other income (expenses) was $2,572,273 for the six months ended December 31, 2025, compared to ($95,113) for the six months ended December 31, 2024, an increase of $2,667,386. The reason for the income in the current period was the Company recorded a gain on extinguishment of debt in the amount of $2,743,546 related to the settlement with Auctus.

Current wording

Total other expenses consist of amortization of debt discount related to convertible notes, interest expense related to convertible notes and gain on extinguishment of debt. Total other income (expenses) was $2,479,368 for the nine months ended March 31, 2026, compared to ($166,463) for the nine months ended March 31, 2026, an increase of $2,645,831. The reason for the income in the current period was the Company recorded a gain on extinguishment of debt in the amount of $2,743,546 related to the settlement with Auctus.

Previous wording

Total net income was $1,928,479 for the six months ended December 31, 2025, compared to a net loss of ($789,491) for the six months ended December 31, 2024, an increase of $2,717,970. The reason for the net income in the current period was the Company recorded a gain on extinguishment of debt in the amount of $2,743,546 related to the settlement with Auctus.

Current wording

Total net income was $1,509,086 for the nine months ended March 31, 2026, compared to a net loss of ($1,319,759) for the nine months ended March 31, 2025, an increase of $2,828,845. The reason for the net income in the current period was the Company recorded a gain on extinguishment of debt in the amount of $2,743,546 related to the settlement with Auctus.

Previous wording

Total consulting and advisory expenses were $105,950 and $125,120 for the six months ended December 31, 2025 and 2024, respectively, a decrease of $19,170. The decrease was primarily related to non-recurring consulting fees during the quarter ended December 31, 2024. Additionally, there was a small decrease in advisory board fees relating to timing of board member anniversary dates.

Current wording

Total consulting and advisory expenses were $170,500 and $141,600 for the three months ended March 31, 2026 and 2025, respectively, an increase of $28,900. The increase was primarily related to an increase in advisory board fees in the amount of $28,900 relating to timing of board member anniversary dates.

Previous wording

Total related party consulting fees were $89,000 and $128,000 for the three months ended December 31, 2025 and 2024, respectively, a decrease of $39,000. In addition to the consulting agreement amounts, the Company will pay additional consulting fees to related parties when the Company has increased available funds. In the prior period, the Company had increased funds to pay consulting fees.

Current wording

Total related party consulting fees were $72,000 and $113,500 for the three months ended March 31, 2026 and 2025, respectively, a decrease of $41,500. In the current period, the Company had reduced funds to pay consulting fees and the related parties agreed to accept reduced amounts.

Previous wording

Total general and administrative expenses were $28,381 and $145,621 for the three months ended December 31, 2025 and 2024, respectively, a decrease of $117,240. The primary reasons for the decrease was (i) a decrease in rent expense of $20,051 due to the Company entering into a new agreement in February 2025 for substantially less rent, $3,208 less in corporate and listing expenses in the current period, and (iii) $51,176 less in advertising and marketing expenses in the current period.

Current wording

Total general and administrative expenses were $58,733 and $102,087 for the three months ended March 31, 2026 and 2025, respectively, a decrease of $43,354. The primary reasons for the decrease was (i) a decrease in rent expense of $3,639 due to the Company entering into a new agreement in February 2025 for substantially less and (iii) $67,598 less in advertising and marketing expenses in the current period offset slightly by an increase in corporate and listing fees in the amount of $11,331 and travel expense in the amount of $16,157.

Previous wording

Total professional fees were $58,628 and $25,810 for the three months ended December 31, 2025 and 2024, respectively, an increase of $32,818. The primary reason for the increase was higher legal costs in the current period.

Current wording

Total professional fees were $19,818 and $71,507 for the three months ended March 31, 2026 and 2025, respectively, a decrease of $51,689. The primary reason for the decrease was lower legal costs in the current period.

Previous wording

Total other expenses consist of amortization of debt discount related to convertible notes and interest expense related to convertible notes. Total other expenses was $82,459 for the three months ended December 31, 2025, compared to $81,686 for the three months ended December 31, 2024, an increase of $773, which is insignificant.

Current wording

Total other expenses consist of amortization of debt discount related to convertible notes and interest expense related to convertible notes. Total other expenses was $92,905 for the three months ended March 31, 2026, compared to $71,350 for the three months ended March 31, 2025, an increase of $21,555. The increase was primarily due to an increase in debt discount in the amount of $42,122 slightly offset by a decrease in interest expense in the amount of $20,567.

Previous wording

Total net loss was $297,593 for the three months ended December 31, 2025, compared to a net loss of $417,269 for the three months ended December 31, 2024, an decrease of $119,676. The primary reason for the decrease was a decrease in general and administrative expenses.

Current wording

Total net loss was $419,393 for the three months ended March 31, 2026, compared to a net loss of $530,268 for the three months ended March 31, 2025, an increase of $110,875. The primary reason for the decrease was a decrease in operating expenses.

Previous wording

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 December 31, 2025, and June 30, 2025, the Company had $76,533 and $44,850 in cash, respectively, and $5,645,060 and $8,708,900 in negative working capital, respectively. For the six months ended December 31, 2025, the Company had a net income of $1,928,479 and for the six months ended December 31, 2024 the Company had a net loss of $789,491. For the three months ended December 31, 2025 and 2024, the Company had a net loss of $297,593 and $417,269, 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 unaudited 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, 2026, and June 30, 2025, the Company had $24,560 and $44,850 in cash, respectively, and $5,804,759 and $8,708,900 in negative working capital, respectively. For the nine months ended March 31, 2026, the Company had a net income of $1,509,086 and for the nine months ended March 31, 2025 the Company had a net loss of $1,319,759. For the three months ended March 31, 2026 and 2025, the Company had a net loss of $419,393 and $530,268, 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, 2025, the Company’s operating activities used $383,317 of net cash used compared to using $750,922 of net cash used in operating activities during the six months ended December 31, 2024. This difference primarily related to an increased change in accounts payable and accrued liabilities in the amount of $329,871 offset by a decreased change in stock issued for services in the amount of $189,506. During the six months ended December 31, 2025, the Company’s financing activities provided cash of $415,000 compared to $352,000 in the prior period. The cash provided by financing activities in both periods was from proceeds from convertible notes payable.

Current wording

During the nine months ended March 31, 2026, the Company’s operating activities used $607,290 of net cash used compared to using $1,116,530 of net cash used in operating activities during the nine months ended March 31, 2025. This difference related to the change in net income (loss) in the amount of $2,828,845 along with an aggregate increase of $452,426 in depreciation and amortization, amortization of debt discount, accounts payable and accrued liabilities, accrued liability, related party, taxes payable and lease liabilities, offset by an aggregate decrease of $2,772,031 in stock issued for services, gain on extinguishment of debt, amortization of right of use asset, prepaids and deposits, and shares to be issued. During the nine months ended March 31, 2026, the Company’s investing activities used cash of $3,000 compared to $0 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 nine months ended March 31, 2026, the Company’s financing activities provided cash of $590,000 compared to $517,000 in the prior period. The cash provided by financing activities in both periods was from proceeds from convertible notes payable.

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 unaudited condensed consolidated financial statements for the six months ended December 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.

Current wording

Our discussion and analysis of our financial condition and results of operations are based upon our unaudited 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 unaudited 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 unaudited condensed consolidated financial statements for the nine months ended March 31, 2026 and 2025 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.