# Xeriant, Inc.: Form 10-Q/A for the period ended Sep 30, 2021

- Company: [Xeriant, Inc.](/companies/xeri.md) (CIK 1481504)
- Form: 10-Q/A
- Filed: 2021-11-24
- Accepted by EDGAR: Nov 24, 2021, 16:28 ET
- Period: 2021-09-30
- Accession: 0001477932-21-008783
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1481504/000147793221008783/xeri_10qa.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1481504/000147793221008783/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2021-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Research and development | 3 months, 2021-07-01 to 2021-09-30 | $2.3m | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months, 2021-07-01 to 2021-09-30 | −$4.3m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2021-07-01 to 2021-09-30 | $2.4k | us-gaap:InterestExpense |
| Net income | 3 months, 2021-07-01 to 2021-09-30 | −$4.4m | us-gaap:NetIncomeLoss |
| Operating cash flow | 3 months, 2021-07-01 to 2021-09-30 | −$2.7m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | at 2021-09-30 | $281.8k | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2021-09-30 | $330.5k | us-gaap:AssetsCurrent |
| Total assets | at 2021-09-30 | $489.9k | us-gaap:Assets |
| Current liabilities | at 2021-09-30 | $237.5k | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2021-09-30 | $367.2k | us-gaap:Liabilities |
| Shareholders' equity | at 2021-09-30 | $122.7k | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 14,349 characters.

*The following discussion of our financial condition and results of operations should be read in conjunction with the audited and unaudited financial statements and the notes to those statements included elsewhere in this Report. This discussion contains forward-looking statements that involve risks and uncertainties. You should specifically consider the various risk factors identified in this Report that could cause actual results to differ materially from those anticipated in these forward-looking statements.*

### Forward-Looking Statements

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

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

This section of the report should be read together with Footnotes of the Company audited financials for the year ended June 30, 2021. The unaudited statements of operations for the three months ended September 30, 2021 and 2020 are compared in the sections below.

### Brief Corporate History

Xeriant is an aerospace technology and advanced materials holding and operating company focused on Advanced Air Mobility (“AAM”) and the transition to green aerospace. The Company plans to source and acquire complementary and strategic interests in visionary companies developing, integrating, and commercializing critical breakthrough technologies which enhance performance, increase safety, and enable and support more efficient, autonomous, and sustainable flight operations, including electrically powered passenger and cargo transport aircraft capable of vertical takeoff and landing. The Company is located at the Research Park at Florida Atlantic University in Boca Raton, Florida.

The Company was originally incorporated in Nevada on December 18, 2009 under the name Eastern World Solutions, Inc. The name changed to Banjo & Matilda, Inc. on September 24, 2013. Effective June 22, 2020 the Company changed its name from Banjo & Matilda, Inc. to Xeriant, Inc.

On April 16, 2019, the Company entered into a Share Exchange Agreement with American Aviation Technologies, LLC (“AAT”), an aircraft design and development company focused on the emerging segment of the aviation industry of autonomous and semi-autonomous vertical take-off and landing (VTOL) and unmanned aerial vehicles (UAVs).

On June 28, 2019, the Company spun out two wholly owned subsidiaries: Banjo & Matilda (USA), Inc. and Banjo & Matilda Australia Pty LTD.

On September 30, 2019, the acquisition of AAT closed, and AAT became a wholly owned subsidiary of the Company.

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

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On May 31, 2021, the Company entered into a Joint Venture Agreement with XTI Aircraft Company, to form a new company, called Eco-Aero, LLC, for purpose of completing the preliminary design of XTI’s TriFan 600, a 5-passenger plus pilot, hybrid electric, vertical takeoff and landing (eVTOL) fixed wing aircraft.

### Three months ended September 30, 2021 compared to the three months ended September 30, 2020

| Operating expenses: | For the three months ended September 30, 2021 | September 30, 2020 | $% |  |
| --- | ---: | ---: | ---: | ---: |
| Sales and marketing expense | $598,595 | $0 | $598,595 | 100% |
| General and administrative expenses | 1,201,002 | 35,970 | 1,165,032 | 97% |
| Professional fees | 29,541 | 20,600 | 8,941 | 30% |
| Related party consulting fees | 82,500 | 36,500 | 46,000 | 56% |
| Research and development expense | 2,340,575 | 0 | 2,340,575 | 100% |
| Total operating expenses | 4,252,213 | 93,070 | 4,159,143 | 98% |
| Loss from operations | (4,252,213) | (93,070) | (4,159,143) | 98% |
| Other income (expense): |  |  |  |  |
| Amortization of debt discount | (149,028) | (45,961) | (103,067) | 69% |
| Financing fees | (43,750) | - | (43,750) | 100% |
| Interest expense | (2,389) | (1,087) | (1,302) | 54% |
| Loss on settlement of debt | (535) | (186,954) | 186,419 | 34845% |
| Total other income (expense) | (195,702) | (234,002) | 38,300 | -20% |
| Net loss | $(4,447,915) | $(327,072) | $(4,120,843) | 93% |

#### Sales and Marketing Expense

Sales and marketing expense was $598,595 for the three months ended September 30, 2021 compared to $0 for the three months ended September 30, 2020. During the three months ended September 30, 2021, the Company was putting money into sales and marketing expenses to actively market the brand.

#### General and Administrative Expenses

Total general and administrative expenses were $1,201,002 for the three months ended September 30, 2021 compared to $35,970 for the three months ended September 30, 2020. The increase of $1,165,032 primarily relates to options valued at $1,060,324 for advisory board services.

#### Professional Fees

Total professional fees were $29,541 for the three months ended September 30, 2021 compared to $20,600 for the three months ended September 30, 2020 for an increase of $8,941.

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#### Related Party Consulting Fees

Total related party consulting fees were $82,500 for the three months ended September 30, 2021 compared to $36,500 for the three months ended September 30, 2020. The increase of $46,000 was primarily related to $24,000 in new related party expenses coupled an increase in the pay of existing related party.

#### Research and Development Expenses

Total research and development expenses were $2,340,575 for the three months ended September 30, 2021 compared to $0 for the three months ended September 30, 2020. The research and development costs were related to the development of an aircraft through our Eco-Aero joint venture.

#### Other Expenses

Total other income (expenses) were ($195,702) for the three months ended September 30, 2021 compared to ($327,072) for the three months ended September 30, 2020. Total other expenses consist of interest expense on debt, amortization of debt and loss on settlement of debt. The decrease of $38,300 was primarily related the Company recording a loss on settlement of debt during the three months ended September 30, 2020 in the amount of $186,954.

#### Net loss

Total net loss was $4,447,915 for the three months ended September 30, 2021 compared to $327,072 for the three months ended September 30, 2020. The increase of $4,120,843 was primarily due to research and development expenses and equity based compensation.

### Operating Activities

Cash used in operations of $2,727,742 during the three months ended September 30, 2021 was primarily resulted from the increase cash used in operations resulted from increased expenditures on sales and marketing and on R&D. Cash used in operations of $76,135 during the three months ended September 30, 2020 was primarily a result of our $327,072 net loss reconciled with our net non-cash expenses relating to amortization of debt discount and our changes in operating assets and liabilities relating to accounts payable and accrued liabilities.

### Financing Activities

Net cash provided by financing activities for the three months ended September 30, 2021 was $2,047,049, which consisted of proceeds from the sale of common stock of $1,668,500, cash in the amount of $128,549 from the exercise of warrants, and issuance of convertible debt of $250,000. Net cash provided by financing activities for the three months ended September 30, 2020 was $79,300, which consisted of proceeds from the issuance of convertible debt in the amount of $79,300.

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### Liquidity and Capital Resources

The Company's 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. At September 30, 2021 and June 30, 2021, the Company had $281,847 and $962,540 in cash and $92,968 and $677,257 in working capital, respectively. For the three months ended September 30, 2021 and 2020, the Company had a net loss of $4,447,915 and $327,072, 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 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 financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s existence is dependent upon management’s ability to develop profitable operations and resolve its liquidity problems.

### Commitments for Capital Expenditures

To date, our operations have been funded primarily through private investors. Some of these investors have verbally committed additional funding for the Company, as needed. We have had a number of discussions with broker-dealers regarding the funding required to execute the Company’s business plan, which is to acquire and develop breakthrough technologies or business interests in those companies that have developed these technologies. We are in the process of issuing an offering document to obtain the funding for certain acquisitions that are in the discussion stages. There is no assurance that the Company will be able to obtain such funding and/or working capital. To the extent that funding is not available, the Company will be required to scale back or discontinue its business plan. Even if the Company is able to obtain financing, it may contain undue restrictions of the Company’s operations, or there may be substantial dilution for our shareholders in the case of equity financing or convertible debt financing.

### 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).

### Quantitative and Qualitative Disclosures about Market Risk

In the ordinary course of our business, we are not exposed to market risk of the sort that may arise from changes in interest rates or foreign currency exchange rates, or that may otherwise arise from transactions in derivatives.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant assumptions and estimates relate to the valuation of beneficial conversion features and warrants associated with convertible debt. Actual results could differ from these estimates.

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### Contingencies

Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. Our management, in consultation with its legal counsel as appropriate, assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against us or unasserted claims that may result in such proceedings, we, in consultation with legal counsel, evaluates the perceived merits of any legal proceedings or unasserted claims, as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in our financial statements. If the assessment indicates a potentially material loss contingency is not probable, but is reasonably possible, or is probable, but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.

On September 1, 2021, Xeriant Inc. brought a cause of action in the Southern District of Florida against a former shareholder for claims, including but not limited to, breach of contract, misrepresentation, and asserting claims to recoup monetary and in-kind distributions made to the shareholder by the Company. The defendant in the above-mentioned action has not asserted any counterclaims to-date.

## Controls and procedures

As filed, 1,712 characters.

### 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 September 30, 2021, 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 September 30, 2021, our disclosure controls and procedures are not effective due to material weaknesses in our internal controls over financial reporting discussed directly below.

### Changes in Internal Control Over Financial Reporting

There has been no change in the Company’s internal control over financial reporting, as defined in Rules 13a-15(f) of the Exchange Act, during the Company’s most recent fiscal quarter ended September 30, 2021, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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## Risk factors

As filed, 157 characters.

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

Filed Nov 24, 2021.
Source: SEC EDGAR, the filing index for accession 0001477932-21-008783. Last ingested by Listed: Oct 24, 2026, 15:08 ET. No prices; not investment advice.