# Xeriant, Inc.: Form 10-Q for the period ended Dec 31, 2024

- Company: [Xeriant, Inc.](/companies/xeri.md) (CIK 1481504)
- Form: 10-Q
- Filed: 2025-02-14
- Accepted by EDGAR: Feb 14, 2025, 14:14 ET
- Period: 2024-12-31
- Accession: 0001477932-25-001010
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1481504/000147793225001010/xeri_10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1481504/000147793225001010/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-12-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Research and development | 3 months, 2024-10-01 to 2024-12-31 | $15 | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 6 months, 2024-07-01 to 2024-12-31 | $26.6k | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months, 2024-10-01 to 2024-12-31 | −$335.6k | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2024-07-01 to 2024-12-31 | −$694.4k | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2024-10-01 to 2024-12-31 | $51.4k | us-gaap:InterestExpense |
| Interest expense | 6 months, 2024-07-01 to 2024-12-31 | $113.0k | us-gaap:InterestExpense |
| Income tax | 3 months, 2024-10-01 to 2024-12-31 | $0 | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2024-07-01 to 2024-12-31 | $0 | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-10-01 to 2024-12-31 | −$410.1k | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2024-07-01 to 2024-12-31 | −$774.9k | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-10-01 to 2024-12-31 | $0.00 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2024-07-01 to 2024-12-31 | $0.00 | us-gaap:EarningsPerShareDiluted |
| Diluted shares (weighted) | 3 months, 2024-10-01 to 2024-12-31 | 596,196,491 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2024-07-01 to 2024-12-31 | 571,876,754 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2024-07-01 to 2024-12-31 | −$750.9k | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Current assets | at 2024-12-31 | $268.6k | us-gaap:AssetsCurrent |
| Total assets | at 2024-12-31 | $276.6k | us-gaap:Assets |
| Total liabilities | at 2024-12-31 | $9.0m | us-gaap:Liabilities |
| Shareholders' equity | at 2024-12-31 | −$5.8m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 20,882 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’s audited financials for the year ended June 30, 2024. The unaudited condensed consolidated statements of operations for the six months ended December 31, 2024 and 2023 are compared in the sections below.

### Executive Summary

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

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#### Joint Venture with XTI Aircraft

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

On May 17, 2022, Xeriant signed a Letter Agreement with XTI related to the introduction of XTI to Inpixon, a Nasdaq-listed company. Under this Letter Agreement, if there was a combination or other transaction between XTI and Inpixon, Xeriant would receive compensation of 6 percent of XTI fully diluted pre-merger shares, and XTI would assume the obligations of Xeriant’s Senior Secured Note with Auctus Fund, LLC. On May 31, 2023, the joint venture was terminated according to an Acceleration Event, which was 24 months from the start of the joint venture. On June 5, 2023, after suspecting that the obligations under the Letter Agreement were possibly being evaded, the Company transmitted a formal demand letter to XTI requesting compliance with the provisions outlined in the Letter Agreement, and in accordance with section 8 of the JV Agreement with XTI. On July 25, 2023, Inpixon filed an 8-K, announcing their intention to merge with XTI having executed an Agreement of Plan and Merger with XTI. The filing also showed that XTI had engaged in a transaction with Inpixon on March 10, 2023, receiving $300,000 in funding, which was a compensation triggering event. Inpixon subsequently filed an S-4/A registration statement on October 6, 2023. On December 6, 2023, the Company initiated legal proceedings against XTI. See *Litigation* section below for a summary of the related legal proceedings.

#### Stock Sales

None.

#### Convertible Notes Issued

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

#### Litigation

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

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

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

There is no pending litigation against the Company and to our knowledge no litigation is contemplated or threatened. To our knowledge, none of our directors, officers, 5% shareholders or affiliates are party to any legal proceedings that would have a material adverse effect on our business, financial condition, or operating results.

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

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

#### Consulting and advisory fees

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

#### Related Party Consulting Fees

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

#### General and administrative expenses

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

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#### Professional Fees

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

#### Research and Development Expenses

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

#### Other Income (Expenses)

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

#### Net loss

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

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

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

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#### Consulting and advisory fees

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

#### Related Party Consulting Fees

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

#### General and administrative expenses

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

#### Professional Fees

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

#### Research and Development Expenses

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

#### Other Income (Expenses)

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

#### Net loss

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

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### Liquidity and Capital Resources

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

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

### Funding Strategy

To date, our operations have been funded primarily through private investors. Some of these investors have verbally committed additional funding for the Company, as needed. We have had a number of discussions with broker-dealers regarding the funding required to execute the Company’s business plan, which is to acquire and develop breakthrough technologies or business interests in those companies that have developed these technologies.

### Off Balance Sheet Items

We do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as “special purpose entities” (SPEs).

### Critical Accounting Policies

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

Management is aware that certain changes in accounting estimates employed in generating financial statements can have the effect of making the Company look more or less profitable than it actually is. Management does not believe that the Company has made any such changes in accounting estimates.

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## Controls and procedures

As filed, 1,609 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 December 31, 2024, an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13(a)-15(e) and 15(d)-15(e) of the Exchange Act) was carried out under the supervision and with the participation of Keith Duffy our Chief Executive Officer and Brian Carey our Chief Financial Officer. Based on their evaluation of our disclosure controls and procedures, they concluded that, at December 31, 2024, our disclosure controls and procedures are effective.

### Changes in Internal Control Over Financial Reporting

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

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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 Feb 14, 2025.
Source: SEC EDGAR, the filing index for accession 0001477932-25-001010. Last ingested by Listed: Oct 24, 2026, 15:08 ET. No prices; not investment advice.