Executive Summary / Key Takeaways

• Xeriant, Inc. (XERI) is a development-stage company focused on disruptive technologies in advanced materials and aerospace, with a primary near-term focus on its eco-friendly NEXBOARD construction panels.
• NEXBOARD, a patent-pending composite panel made from recycled plastic and fiber waste, leverages nanotechnology to offer superior fire, water, mold, and insect resistance, positioning it as a compelling alternative to traditional building materials in the rapidly growing $1.80 trillion green construction market.
• Despite a reduced net loss of $1.65 million in fiscal year 2025, Xeriant faces significant liquidity challenges, including an accumulated deficit of $28.34 million and a negative working capital of $8.71 million, leading to substantial doubt about its ability to continue as a going concern.
• The company is embroiled in complex and costly legal battles with Auctus Fund LLC and XTI Aircraft Company, which pose material financial and operational risks, alongside the critical need for NEXBOARD product certification and substantial capital to scale manufacturing.
• Xeriant's long-term investment thesis hinges on its ability to successfully commercialize its nanotechnology-enhanced materials, resolve its legal and financial obligations, and secure the necessary funding to transition from a development-stage enterprise to a revenue-generating entity in competitive markets.

Xeriant's Dual Ambition and Market Imperatives

Xeriant, Inc. is strategically positioned at the intersection of advanced materials and aerospace, dedicated to discovering, developing, and commercializing disruptive technologies that can integrate across multiple industrial sectors. The company's overarching strategy involves partnering with and acquiring strategic interests in visionary companies to accelerate its mission. This approach is underpinned by foundational strengths in patented technologies, including the "Halo" VTOL drone/aircraft concept and its patent-pending NEXBOARD construction panels.

The market landscape for Xeriant's endeavors presents substantial opportunities. The green construction materials market is projected to reach an impressive $1.80 trillion by 2030, driven by increasing demand for sustainable alternatives as the construction industry accounts for 60% of natural resource consumption and 40% of global carbon dioxide emissions. Within this, the smart nano-construction materials market, highly relevant to Xeriant's offerings, was valued at $12.50 billion in 2023 and is expected to expand to between $17.7 billion and $2.7 billion by 2032, reflecting a compound annual growth rate (CAGR) of 4.5-4.9%. Concurrently, the aerospace industry is undergoing a transformative phase, with the global aerospace materials market valued at $43.23 billion in 2024 and projected to grow to $74.29 billion by 2032, at a CAGR of 7%. This growth is fueled by a focus on advanced materials, advanced air mobility (AAM), and sustainability.

The Core Innovation: NEXBOARD and Nanotechnology's Edge

At the heart of Xeriant's near-term commercialization strategy is NEXBOARD, an eco-friendly, patent-pending composite construction panel marketed under the DUREVER brand. This innovative material is crafted from plastic and fiber waste, designed as a superior replacement for conventional building products such as drywall, plywood, Oriented Strand Board (OSB), Medium Density Fiberboard (MDF), and Magnesium Oxide (MgO) board. NEXBOARD's key tangible benefits include its inherent resistance to fire, water, mold, and insects, addressing critical safety and durability concerns prevalent with traditional materials.

Xeriant has been actively developing its own advanced materials since the second half of 2023, including proprietary flame-retardant technology specifically for polymers found in recycled materials. In 2024, the company commenced rigorous testing of production processes for NEXBOARD, aiming for market competitiveness and industrial-scale manufacturing. A significant technological differentiator is the incorporation of nanotechnology into NEXBOARD, which management believes will "significantly improve its fire resistance and thermal stability based on internal testing." This nanotechnology, involving engineered nanoparticles, is designed to enhance strength and durability without relying on toxic additives, aligning with stringent safety and LEED certification requirements. Xeriant filed a provisional patent application for a "Multilayered Fire-Resistant Polymer Composite and Method for Producing Same" on March 31, 2023, followed by a non-provisional U.S. patent application on April 1, 2024. This technological leadership provides Xeriant with a potential "first-mover advantage in the nanocomposite segment, particularly in North America." The "so what" for investors is clear: NEXBOARD directly addresses the environmental challenges posed by traditional gypsum drywall and wood products, positioning Xeriant to capture a significant share of the burgeoning green construction market and potentially expand into other industries like recreational vehicles, boats, and furniture.

Aerospace Ambitions: Halo and Advanced Air Mobility

Beyond advanced materials, Xeriant maintains an interest in the aerospace sector, seeking to develop or acquire high-growth-potential technologies in next-generation air and spacecraft. The company holds a 64% interest in American Aviation Technologies, LLC (AAT), which owns the patented "Halo" VTOL drone/aircraft concept, with utility patents issued in October 2019, October 2020, and March 2023. This focus aligns with the emerging Advanced Air Mobility (AAM) market, which emphasizes efficient, eco-friendly, and automated flight operations. Xeriant's strategy in this domain involves acquisitions, joint ventures, strategic investments, and licensing arrangements to expedite growth. However, a previous joint venture, Eco-Aero, LLC, with XTI Aircraft Company, formed to develop an eVTOL fixed-wing aircraft, was terminated on May 31, 2023, following XTI's refusal to proceed with a planned merger.

Financial Performance and Liquidity: A Development Stage Profile

Xeriant remains a development-stage enterprise with a limited operating history and no sales since its inception, consistently incurring operating losses. For the fiscal year ended June 30, 2025, the company reported a net loss of $1.65 million, a notable decrease of $1.46 million from the $3.10 million net loss in fiscal year 2024. This improvement was primarily driven by lower operating expenses in the current year, partially offset by higher interest expense recorded in the prior year. Operating expenses decreased from $1.91 million in FY2024 to $1.37 million in FY2025, largely due to reduced consulting and advisory fees and lower research and development expenses. However, related party consulting fees increased by $50,000, and general and administrative expenses rose by $26,858, mainly due to costs associated with its BlueGreen Composites, LLC subsidiary.

Despite the reduced net loss, Xeriant's liquidity position remains precarious. As of June 30, 2025, the company held only $44,850 in cash, a significant drop from $653,117 in the prior year. Its negative working capital stood at $8.71 million, slightly worsening from $8.66 million in fiscal year 2024. Operating activities consumed $1.29 million in net cash during FY2025, compared to $1.43 million in FY2024. Financing activities provided $682,000 in net cash in FY2025, a decrease from $2.03 million in FY2024, reflecting less capital raised from convertible notes. The company's operations have historically relied on private investors, with some verbally committing additional funding. Xeriant is actively discussing funding with broker-dealers and plans to issue an offering document for future acquisitions. The independent registered public accounting firm has included an explanatory paragraph in its report, raising substantial doubt about Xeriant's ability to continue as a going concern, with current cash reserves expected to be expended within approximately three months from October 2, 2025.

Competitive Landscape and Strategic Positioning

Xeriant operates in highly competitive sectors, facing established industry leaders and well-funded new entrants. In the eVTOL space, direct competitors include Joby Aviation (JOBY), Archer Aviation (ACHR), and Lilium NV (LILM). These companies, while also in development stages, often exhibit stronger revenue growth and larger operational scales due to more extensive partnerships and focused R&D pipelines. For instance, Joby Aviation has shown accelerating revenue growth from eVTOL development and partnerships, while Archer Aviation has secured significant eVTOL contracts. Lilium NV, with its focus on high-speed eVTOL jets, has also demonstrated increasing revenue from orders. Xeriant's smaller scale and more diversified approach mean it currently lags these competitors in revenue momentum and overall operational footprint.

However, Xeriant's NEXBOARD product offers a distinct competitive edge in the advanced materials market. Its lightweight design, exceptional fire resistance, and resistance to water, mold, and insects position it as a superior substitute for traditional building materials. The company's integration of nanotechnology provides a "first-mover advantage in the nanocomposite segment," particularly in North America, where regulatory tailwinds and sustainability goals are driving adoption. This technological differentiation, which promises enhanced material performance and eco-friendliness, is a key moat against established players in the construction materials industry. While precise, directly comparable market share figures for all niche competitors are not publicly detailed, the company's strong performance in developing and testing NEXBOARD suggests a strategic focus on exploiting this technological advantage. The patented "Halo" VTOL drone also represents a proprietary asset, potentially offering qualitatively superior performance in specific niche VTOL applications, such as enhanced maneuverability. Xeriant's strategic adaptability, driven by its acquisition-focused model, could allow it to target specific market gaps. Nevertheless, its smaller scale and potential supply chain dependencies remain vulnerabilities that could impact its cost structure and execution speed compared to larger, more integrated rivals.

Legal Headwinds and Operational Risks

Xeriant's investment narrative is significantly impacted by ongoing legal challenges. The company is engaged in a protracted legal dispute with Auctus Fund LLC concerning a $5.90 million Senior Secured Promissory Note that matured on March 15, 2023. Xeriant is currently appealing a court decision related to this lawsuit to the United States Supreme Court, while simultaneously pursuing settlement discussions. The potential outcomes of this litigation, including the enforcement of the note or conversion into common stock, could result in the loss of substantial assets or significant shareholder dilution.

Furthermore, Xeriant has initiated legal proceedings against XTI Aircraft Company, seeking over $500 million in damages for alleged fraudulent acts and breaches of a Letter Agreement related to their terminated joint venture. The outcome of this high-stakes litigation is uncertain but could materially impact Xeriant's financial position. A recent complaint from Midland Compounding for $57,600 related to NEXBOARD's fire-retardant layer adds another legal challenge. Beyond litigation, Xeriant faces substantial operational risks, including the critical need to obtain industry certification for NEXBOARD, the uncertainty of raising sufficient capital for manufacturing facilities, potential technological hurdles, and the challenges of competing with well-resourced industry incumbents. The company's common stock is thinly traded and subject to penny stock regulations, which could hinder future capital-raising efforts and investor liquidity.

Conclusion

Xeriant, Inc. presents a high-risk, high-reward investment proposition, fundamentally driven by its innovative pivot into nanotechnology-enhanced advanced materials, particularly the NEXBOARD construction panel. The company's strategic focus on eco-friendly, high-performance building solutions positions it to capitalize on the substantial growth within the green construction market. The successful completion of the August production run for NEXBOARD panels underscores tangible progress in its core advanced materials segment. However, the company's financial health, marked by recurring operating losses, a significant accumulated deficit, and limited cash reserves, raises serious concerns about its ability to sustain operations without substantial additional capital.

The ongoing legal battles with Auctus Fund LLC and XTI Aircraft Company represent material uncertainties that could significantly impact Xeriant's financial stability and strategic trajectory. For Xeriant to realize its potential, successful resolution of these legal entanglements, coupled with securing adequate funding for NEXBOARD's certification and industrial-scale manufacturing, is paramount. The company's ability to leverage its technological differentiators in advanced materials and potentially in aerospace, while effectively managing its financial and legal challenges, will determine its path from a development-stage entity to a viable, revenue-generating enterprise. Investors should closely monitor Xeriant's progress in these critical areas, as they are key indicators of its capacity to transform its innovative technologies into sustainable shareholder value.