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 UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

 Washington, D.C. 20549

 FORM 10-K

 (Mark One)

 ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the fiscal year ended: December 31, 2024

 or

 TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the transition period from: _____________ to _____________

 Commission File Number: 000-53574

 Basanite, Inc.

 (Exact name of registrant as specified in its charter)

 Nevada

 20-4959207

 (State
 or Other Jurisdiction

 (I.R.S.
 Employer

 of
 Incorporation or Organization)

 Identification
 No.)

 2041 NW 15th Avenue, Pompano Beach, Florida 33069

 (Address of Principal Executive Office) (Zip Code)

 ( 954) 532-4653

 (Registrant's telephone number, including
area code)

 Securities registered pursuant to Section 12(b) of the Act: None.

 Title
 of each class

 Trading
 Symbol(s)

 Name
 of each exchange on which registered

 Securities
 registered pursuant to Section 12(g) of the Act:

 Common Stock, par value $0.001 per share

 (Title
 of Class)

by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No

by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes No

by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232-405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files.) Yes No

 Indicate by check mark whether the registrant is
a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See
the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and
"emerging growth company" in Rule 12b-2 of the Exchange Act.

 Large
 accelerated filer

 Accelerated
 filer

 Non-accelerated filer

 Smaller
 reporting company

 Emerging
 growth company

 If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report.

 If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.

by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).

by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No

 State the aggregate market value of the voting and
non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average
bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal
quarter: $ 2,850,725 on June 30, 2024 based upon common shares held by non-affiliates at a closing price of $0.01 per share on June 28,
2024.

 On March 28, 2025, the issuer had 260,156,796 shares of common stock outstanding.

 BASANITE, INC.

 Page
 No.

 Cautionary
 Note Regarding Forward-Looking Statements

 ii

 Summary
 of Risk Factors

 iii

 PART
 I.

 Item 1.

 Business.

 Item 1A.

 Risk Factors.

 Item 1B.

 Unresolved Staff Comments.

 Item 1C.

 Cybersecurity.

 Item 2.

 Properties.

 Item 3.

 Legal Proceedings.

 Item 4.

 Mine Safety Disclosures.

 PART
 II.

 Item 5.

 Market for the Registrant's
 Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

 Item 6.

 Reserved.

 Item 7.

 Management's Discussion
 and Analysis of Financial Condition and Results of Operations.

 Item 7A.

 Quantitative and Qualitative
 Disclosures about Market Risk.

 Item 8.

 Consolidated Financial
 Statements and Supplementary Data.

 Item 9.

 Changes in and Disagreements
 with Accountants on Accounting and Financial Disclosure.

 Item 9A.

 Controls and Procedures.

 Item 9B.

 Other Information.

 Item 9C.

 Disclosure Regarding Foreign
 Jurisdictions that Prevent Inspections

 PART
 III.

 Item 10.

 Directors, Executive Officers
 and Corporate Governance.

 Item 11.

 Executive Compensation.

 Item 12.

 Security Ownership of Certain
 Beneficial Owners and Management and Related Stockholder Matters.

 Item 13.

 Certain Relationships and
 Related Transactions, and Director Independence.

 Item 14.

 Principal Accountant Fees
 and Services.

 PART
 IV.

 Item 15.

 Exhibits, Financial Statement
 Schedules.

 Item 16.

 Form 10-K Summary.

 i

 CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS

 All statements, other than statements
of historical fact, included in this Form 10-K, including without limitation the statements under "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and "Description of Business," are, or may be deemed
to be, "forward-looking statements" within the meaning of the safe harbor provisions of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements involve assumptions,
significant known and unknown risks, uncertainties and other factors (many of which may be out of our control), which may cause the actual
results, performance or achievements of our company to be materially different from any future results, performance or achievements expressed
or implied by such forward-looking statements contained in this Form 10-K. In addition, our management may from time to time make written
or oral forward-looking statements with respect to our long-term objectives or expectations which may be included in our filings with
the Securities and Exchange Commission (the "SEC"), reports to stockholders and information provided in our website. Such
statements are similarly subject to the same assumptions, risks, uncertainties and other factors.

 The words or phrases "will
likely," "are expected to," "is anticipated," "is predicted," "forecast," "estimate,"
"project," "plans," "believes," "may" or similar expressions identify "forward-looking
statements." Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to
differ materially from historical earnings and those presently anticipated or projected. We wish to caution you not to place undue reliance
on any such forward-looking statements, which speak only as of the date made. We are calling to your attention important factors that
could affect our financial performance and could cause actual results for future periods to differ materially from any opinions or statements
expressed with respect to future periods in any current statements.

 The following list of important
risk factors and uncertainties is not all-inclusive, and we specifically decline to undertake an obligation to publicly revise any forward-looking
statements that have been made to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated
or unanticipated events. Among the factors that could have an impact on our ability to achieve expected operating results and growth
plan goals and/or affect the market price of our stock are:

 •

 our extremely limited cash
 resources and resulting doubt regarding our ability to continue as a going concern;

 •

 the early-stage nature
 of our company, including our limited manufacturing capacity;

 •

 factors
 that impair our ability to commence meaningful revenue generating operations, including our ability to raise needed capital, obtain
 market acceptance of our products and attract and retain customers;

 •

 the amount and timing of
 required operating costs and capital expenditures related to the maintenance and expansion of our business operations and infrastructure;

 •

 our ability to secure and
 maintain key channel partners, including suppliers of raw materials and marketing and distribution partners;

 •

 our dependence on key personnel;

 •

 our ability to comply with
 applicable laws, rules and regulations and changes in laws, rules and regulations that affect our operations and the demand for our
 products;

 •

 the long- and short-term
 impact of the inflation and interest-rate increases may have on our industry;

 •

 our ability to address and adapt to competition effectively,
 in particular competition with larger, more established companies;

 •

 the impact on our operations
 of general economic conditions and those economic conditions specific to the construction industry;

 •

 volatility in prices for raw materials; and

 •

 the
 impact of natural disasters, catastrophes, pandemics, theft, or sabotage, including hurricanes given our location in South Florida,
 for which we may have no or inadequate insurance.

 Although we believe that our
expectations (including those on which our forward-looking statements are based) are reasonable, we cannot assure you that those expectations
will prove to be correct. Should any one or more of these risks or uncertainties materialize, or should any underlying assumptions prove
incorrect, actual results may vary materially from those described in our forward-looking statements as anticipated, believed, estimated,
expected, or intended.

 Except for our ongoing obligations
to disclose material information under the federal securities laws, we undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events, or any other reason. All subsequent forward-looking statements attributable
to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred
to herein. Considering these risks, uncertainties and assumptions, the forward-looking events discussed in this Annual Report might not
occur.

 ii

 SUMMARY OF RISK FACTORS

 Investing in our common
stock is highly speculative and involves a significant degree of risk. You should carefully consider the risks and uncertainties
discussed under the section titled "Risk Factors" elsewhere in this Annual Report before making a decision to invest in our
common stock. Certain of the key risks we face include, without limitation:

 •

 We have a history of operating
 losses and may never achieve significant revenues or cash flow positive or profitable results of operations.

 •

 We have a limited operating
 history and we have incurred net losses in the past and expect to incur additional losses in the future.

 •

 There is substantial doubt about our ability to continue
 as a going concern.

 •

 We have a short operating
 history and a new business model in an emerging market. This makes it difficult to evaluate our future prospects and increases the
 risk of your investment.

 •

 We currently have very
 limited cash resources and need substantial additional capital to fund our operations, which, even if obtained, could result in substantial
 dilution or significant debt service obligations. We are seeking to raise an estimated 6 million dollars of private and /or public
 financing. We may not be able to obtain additional capital on commercially reasonable terms, if at all, which could adversely affect
 our liquidity and financial position.

 •

 We have identified material weaknesses in our internal
 control over financial reporting.

 •

 We expect to derive a substantial
 portion of our future revenue from sales of BasaFlex and other BFRP products, which leaves us reliant on the commercial viability
 of such products.

 •

 We may be unable to produce
 BasaFlex and other BFRP products as the Company exited its previous Pompano Beach facility on December 31, 2022, but is currently
 engaged in searching for a new facility to host its operational and manufacturing activities. As of December 31, 2024, the Company
 continues to seek a facility to produce products and return to normal operations.

 •

 We currently have very
 limited employee resources as all but two employees remain active in their employment with the Company.

 •

 We may be unable to develop the manufacturing capability
 and infrastructure necessary to achieve the potential sales growth.

 •

 Our relationships with our channel
 partners may be terminated or may not continue to be beneficial in generating new clients, which could adversely affect our ability
 to increase our client base.

 •

 Our sales
 and marketing efforts may not be successful.

 •

 We may
 not be able to respond in a timely and cost-effective manner to changes in consumer preferences.

 •

 Our
 independent directors and executive officers have limited experience in the management of public companies, which poses a risk for
 us from a corporate governance perspective.

 •

 We
 compete with larger, more established companies, and our size and stage of development creates a significant risk for us in our ability
 to compete.

 •

 Our inability
 to comply with numerous regulatory requirements that govern our industry could harm our business.

 •

 We are
 dependent on the availability of basalt fiber and other raw materials.

 •

 Government
 contracts generally are subject to a variety of governmental regulations, requirements and statutes, the violation or alleged violation
 of which could have a material adverse effect on our business.

 iii

 •

 Changes
 in the global, national, and local economic environment impacting the construction industry may lead to declines in the construction
 industry and the demand for our products by our customers.

 •

 Volatility
 in prices for raw materials may materially, adversely impact our prices.

 •

 There
 may be legacy issues (including potential liabilities) arising from or associated with prior management and prior business operations,
 including potential litigation.

 •

 There
 is a risk that we may not be able to consummate our contemplated private and/or public financing.

 •

 Because
 the market for our common stock is limited, persons who purchase our common stock may not be able to resell their shares at or above
 the purchase price paid for them.

 •

 The
 holder of our outstanding secured convertible promissory note (which holder is associated with one of our directors) has rights which
 are senior to the rights of our common stockholders, and which may impair our financing efforts.

 •

 The
 interests of our principal stockholders, officers, and directors, who collectively and beneficially own approximately 40% of our
 stock, may not coincide with yours and such stockholders will have the ability to substantially influence decisions with which you
 may disagree.

 •

 The
 number of shares of our common stock issuable upon the exercise outstanding warrants and options is substantial.

 •

 Even
 if a market for our common stock develops, the market price of our common stock may be significantly volatile, which could result
 in substantial losses for purchasers.

 iv

 Unless we have indicated
otherwise, or the context otherwise requires, references in this Annual Report to "BASA," the "Company," "we,"
"us" and "our" or similar terms refer to Basanite, Inc., a Nevada corporation and its subsidiaries, collectively.

 Item 1.

 Business.

 Overview

 Through our wholly owned subsidiary,
Basanite Industries, LLC, a Delaware limited liability company ("BI"), we manufacture a range of "green" (environmentally
friendly), sustainable, non-corrosive, lightweight, composite products used in concrete reinforcement by the construction industry. Our
core product is BasaFlex, a basalt fiber reinforced polymer ("BFRP") reinforcing bar (known as "rebar")
which we believe is a stronger, lighter, sustainable, non-conductive, and corrosion-proof alternative to traditional steel.

 Our two other main product
lines are BasaMix, which are fine denier basalt fibers available in various chopped sizes, and BasaMesh,
a line of Basalt Geogrid Mesh Rolls, intended to replace welded wire mesh (made of steel).

 While
we believe our products have significant market potential and have begun to gain some acceptance in the market (as evidenced by the beginning
of revenue growth which occurred in 2021 and continued in 2022 and 2023. We are currently conducting relatively limited operations due
to lack of adequate funding and the need for a transition period to move our facilities to Ohio. We are working to secure additional
funding of approximately six million
dollars to have a new manufacturing capacity to meet what we believe will be demand for our products, but until such funding is obtained,
there will remain substantial doubt regarding our ability to continue as a going concern.

 We were formed as a Nevada corporation in 2006 under
the name "Nevada Processing Solutions, Inc." and entered our current BFRP business in 2017.

 Our Products

 BFRP is a UV-stable, chemical,
acid and moisture resistant material is sustainable and environmentally friendly and has been engineered to replace steel as it never
rusts, addressing the industry's current corrosion issues. BasaFlex BFRP rebar is a corrosion proof, chemical, acid and
moisture resistant material, as well as being sustainable and environmentally friendly. BasaFlex, unlike alternative fiber reinforced
polymer ("FRP") products, was designed and engineered to replace steel in certain structures and applications. Since it is
rustproof, BasaFlex directly addresses the construction industry's current issues with reduced structure lifecycles due
to corrosion.

 Each of our products is specifically
designed to extend the lifecycle of concrete products by eliminating "concrete spalling." Spalling results from the steel
reinforcing materials embedded within the concrete member rusting (contrary to popular belief, concrete is porous, and water can permeate
into concrete). Rusting leads to the steel expanding and eventually causing the surrounding concrete to delaminate, crack, or even break
off, resulting in potential structural failure. We believe that each of our products addresses this important need, along with other
key requirements in today's construction market, and that the following attributes of BasaFlex provide it with competitive
advantages in the marketplace:

 •

 BasaFlex never corrodes: whereas steel reinforcement products
rust, leading to spalling and significant repair costs down the road;

 •

 BasaFlex
 is sustainable: BasaFlex is made from Basalt rock, the most abundant rock found on Earth's surface, and offers a
 longer product lifecycle than traditional steel (the lack of corrosion allows the life span of concrete products reinforced with
 BasaFlex to be significantly longer);

 •

 BasaFlex is "green":
 From mining, through production, to installation at the building site, BasaFlex has an exceptionally low carbon footprint
 when compared with that of steel; and

 •

 BasaFlex has
 a lower in-place cost: the physical nature of our products relative to steel result in a lower net cost to the contractor once
 installed, such as: BasaFlex is one-quarter (1/4th) of the weight of equivalent sized steel, meaning four (4) times the quantity
 of material can be delivered by the same truck (or container); all Basanite products can be loaded/unloaded and moved around the
 jobsite by hand – no expensive handling equipment is needed; less concrete is required as BasaFlex does not require
 the extra concrete cover needed when using steel; and Basanite products are safer and easier to use. We believe all these factors
 materially reduce the net in-place cost of concrete reinforcement.

 •
 BasaMix
 is designed to help absorb the stresses associated with early-aged plastic shrinkage and
 settlement cracking in concrete, as well as providing an increased toughness for enhanced
 reinforcement in Slab on Grade (SOG) and precast elements. BasaMix also serves in
 a "system approach" for optimum performance of a concrete element when used in
 conjunction with our BasaFlex rebar.

 •
 BasaMesh
 is designed for secondary and temperature shrinkage reinforcement. BasaMesh can also
 work in conjunction with the BasaFlex rebar or BasaMix for a total reinforcement
 program.

 We believe that macroeconomic
factors are pressuring the construction industry to consider the use of alternative reinforcement materials for the following reasons:

 •

 the increasing need for global infrastructure repair;

 •

 recent design trends towards increasing the lifespan
 of projects and materials;

 •

 the global interest in promoting the use of sustainable
 products; and

 •

 increasing consideration of both the long-term costs
 and environmental impacts of material selections.

 We believe we are well positioned
to benefit from this renewed focus, particularly considering the interest of the U.S. government in funding infrastructure improvements
(notably the passage of the $1.2 billion Infrastructure Investment and Jobs Act in November 2021) and events such as the tragic collapse
of a residential building in Surfside, Florida in mid-2021.

 We submitted our first round
of BasaFlex rebar products to the Structures and Materials Department of the University of Miami, an industry accredited independent
testing laboratory, to obtain a Certified Test Report which allows us to participate in approved FRP applications, such as precast, architectural,
flatwork and other non-structural engineered applications, or in applications where steel is a poor choice, like bridge decks, piers,
seawalls, sewage tunneling and nuclear plants. On May 29, 2020, a Certified Test Report was submitted to us for engineering use.

 During the third quarter of
2020, we began initial manufacturing operations and commenced the manufacture of our initial stock of inventory of BasaFlex. Also,
during this timeframe, we filled key manufacturing positions within our production facility and reached our primary goal of scaling to
full capacity single shift operations. Management also began recruiting other key positions, focused initially on product development,
driving sales growth and expanding our market presence. Our hiring was focused on key areas of excellence, specifically quality assurance;
operations and other technical resources; engineering; and sales and marketing. We successfully completed our initial hiring plan and
recruited key personnel with over 140 combined years of industry experience (although presently we have fewer personnel). We have begun
selling across our complete product line and are currently working on securing larger orders. We have also sought to develop strategic
commercial relationships with multiple testing programs underway (including international locations) across a broad range of applications.

 During both the third and fourth
quarters of 2020, BI continued research, and development work on BasaFlex, with the goal of increasing its performance results
in the category of modulus. While the baseline version easily met the required industry standard for FRP rebar, we have expanded goals
for BasaFlex to be able to replace steel rebar in a broader range of applications than the current industry standard
allows for. After extensive internal development and testing, a complete test set of bar sizes #3-#8 of an enhanced version of BasaFlex
 was submitted to the University of Sherbrooke (near Montreal, Canada) for lab testing. Sherbrooke, led by renowned materials scientist
Dr. Brahim Benmokrane, is the world recognized leader in testing FRP products for concrete reinforcement. In February of 2021, Basanite
obtained very promising results on the upgraded BasaFlex from the Sherbrooke lab, including best in class performance results
in both tensile and modulus strength. Following on from this success, we had been working with multiple customers and design professionals
to select BasaFlex as an alternative to steel in a broader range of applications. These efforts have more recently included work
with CPPB and USS (each as defined below) and our board members Manuel A. Rodriguez and Frederick H. Tingberg, Jr. (who joined our Board
of Directors in December 2021 as described below), all of whom have introduced us to their contacts within the construction industry
and have worked to promote our products.

 Early
in 2021, we contracted with an independent software company to develop BasaPro, a design software specifically for use with BasaFlex.
This development effort has been completed, and the software is operational. BasaPro allows both our engineers and engineers of
record (EOR) to easily compare engineering designs with steel and the same designs with the recommended use of BasaFlex in typical
concrete applications. It allows for both the conversion to BasaFlex from steel in existing concrete designs and for original designs
using BasaFlex and is based upon the application of industry standards ACI 440 (Guide for the Design and Construction of Structural
Concrete Reinforced with Fiber-Reinforced Polymer (FRP) Bars) and ACI 318 (Building Code Requirements for Structural Concrete) using structural
steel. BasaPro 's software outputs include all the calculations using independent test results and pictorial design work in
conjunction with applicable building codes. This means we can now communicate with the design community in their own language.

 On December 10, 2021, we entered
into a strategic commercial relationship, comprised of two principal five-year agreements: an Exclusive Supplier Agreement (the "Supplier
Agreement") with Concrete Products of the Palm Beaches, Inc. ("CPPB"), and a Distribution Agreement with U.S. Supplies,
Inc. ("USS"). Based in Riviera Beach, Florida, CPPB is a custom precast manufacturer of concrete products for the construction
industry, made from a combination of cement and aggregate raw materials. Based in West Palm Beach, Florida, USS is a domestic and international
distributor of building products and supplies, specialty construction products, and a provider of engineering services. CPPB and USS
are related parties via the common control of Manuel A. Rodriguez (who is a member of our Board of Directors). These contracts are described
further below.

 In connection with the transactions
associated with the Supplier Agreement and the Distribution Agreement, we have issued to USS a common stock purchase warrant (the "Strategic
Partner Warrant"). The Strategic Partner Warrant affords USS and its assigns the right, for a five (5) year term, to purchase
up to forty million (40,000,000) shares of our common stock (the "Warrant Shares") at an exercise price of $0.33 per Warrant
Share. The right to purchase fifty percent (50%) (or 20,000,000) of the Warrant Shares shall vest immediately and the right to purchase
the remaining fifty percent (50%) (or 20,000,000) of the Warrant Shares shall only vest upon our actual receipt of new investment into
our company of not less than $5,000,000 from one or any combination of the following entities or individuals: (i) USS and its affiliates,
(ii) CR Business Consultants, Inc. (any entity controlled by Raphael Salas) and its affiliates or (iii) any person or entity first introduced
to us by any of the foregoing. As of the date of the Annual Report, this investment condition has not been achieved.

 In connection with the transactions
contemplated by the Distributor Agreement and the Supplier Agreement, our Board of Directors appointed Manuel A. Rodriguez and Frederick
H. Tingberg, Jr. as members of our Board of Directors. Mr. Rodriguez is an affiliate of and controls each of USS and CPPB, and Mr. Tingberg
(who provides consulting services within the construction industry) was recommended for appointment to our Board of Directors by Mr.
Rodriguez.

 Recent Developments

 None.

 Industry Background and Current and Proposed Customers

 We are focused on the construction
industry, more specifically on introducing composite products for the reinforcement of concrete and secondarily for asphalt. According
to Grandview Research, the annual concrete reinforcement market in the U.S. is estimated to be approximately $9.4 billion. This market
is very established and resistant to change; however, the reinforcement of concrete using traditional steel products and methods has
proven to be problematic. Almost every concrete building and foundation in the world was originally built using steel reinforcement.
Steel is a long-time proven product for these applications, but it has an inherent problem: it corrodes (rusts) and degrades when exposed
to air and water. Every steel reinforcing bar (or rebar) ever used is in some form of degradation due to corrosion. This corrosion leads
the concrete to de-bond from the reinforcement, crack, and ultimately fail: the process is called "spalling." This corrosion
problem has been recognized by the governing bodies to the point that they have written into code a definition of the "acceptable"
amount of corrosion on steel rebar prior to its use. Regardless, the bar continues to rust and ultimately this leads to costly maintenance,
initially with repairs and eventually replacement over the lifetime of the structure. Addressing this problem is our key focus and value
proposition – all our products are essentially corrosion proof. In addition, we believe our disruptive alternative to steel reinforcement
also offers greater strengths, giving the end-user alternatives for concrete reinforcing elements that will never require maintenance
or replacement for as much as 100 years or more.

 Our customer base is
a mix of the design-build community and government agencies who can specify our products, and wholesalers (distributors), contractors
and concrete producers who will use and sell our products.

 Infrastructure Investment and Jobs Act ( " IIJA ")

 The IIJA, signed into law on
November 15, 2021, provides for significant national investments in the repair and rebuilding of roads and bridges in the U.S. with a
focus on climate change mitigation, resilience, equity, and safety In the United States, 1 in 5 miles of highways and major roads, and
45,000 bridges, are in poor condition. The IIJA reauthorizes surface transportation programs for five years and invests $110 billion
in additional funding to repair roads and bridges and support major projects. We believe that our environmentally friendly basalt fiber
products are well positioned to emerge as a technology leader in the expanded market for intelligent construction materials that will
benefit from the IIJA. We are working on identifying opportunities to access federal funding streams this unprecedented U.S. federal
investment in public safety, homeland security, and transportation infrastructure.

 Suppler Agreement with CPPB

 In December 2021, we entered
into the Supplier Agreement with CPPB, who as a result became a significant customer. Under the terms of the Supplier Agreement, until
December 31, 2022, we will sell products to CPPB at an agreed upon discounted price to the price of steel reinforcing bar (such price
for steel rebar being first obtained by CPPB via a competitive third-party quote). We have agreed to this special pricing to offer CPPB
the opportunity, for a one-year period, to incorporate our BFRP products into CPPB's concrete products, and to offer these combined
(and we believe improved) products to construction projects at pricing competitive to prevailing steel reinforcing bar. We believe this
collaborative approach with CPPB will result in both an acceleration of the process to gain regulatory and other required approvals by
applicable third parties (including government agencies) for inclusion in construction projects, as well as an acceleration of market
recognition of our products. Commencing January 1, 2023, we will sell our products to CPPB in accordance with an agreed upon fee schedule
based upon our prevailing prices for the products. Such pricing may be amended from time to time with the mutual prior consent of the
parties.

 Under the terms of the Supplier
Agreement, we are responsible for the engineering conversion calculations required to modify CPPB's product designs from using
steel rebar to using BasaFlex TM BFRP reinforcement. This will be accomplished using our BasaPro TM proprietary software,
with a required review by a Florida licensed professional engineer. CPPB is responsible, among other matters, for taking all necessary
steps to obtain product clearance, validation, importation authorization and any product approvals, regulatory licenses, or other approvals,
permits or material authorizations as may be required by any governmental agency or authority with respect to the importation, marketing,
distribution, sale and use of its concrete products incorporating our products. We believe that the combined efforts of our company and
CPPB will also accelerate the qualification of our products for government and other contracts and help gain the acceptance of our products
for these contracts.

 The Supplier Agreement
also contains other customary terms and conditions, including with respect to the making of product orders, packaging and delivery, product
warranties, product returns, intellectual property, confidentiality, limitations on liability, indemnification, non-solicitation of employees,
insurance and representations and warranties of the parties.

 The Supplier Agreement has
a term of five (5) years, and thereafter the term shall automatically renew for successive one (1) year terms unless terminated by the
parties prior to the end of the initial term or any renewal term. The Supplier Agreement may be terminated (i) by the mutual agreement
of the parties, (ii) upon breach of the Supplier Agreement (with a notice period and an opportunity to cure) and (iii) upon the bankruptcy
and insolvency of a party.

 While we have generated relatively
little revenue to date, we continue to receive inquiries from a range of customers about our products, indicating what we believe is
a high level of market interest for BasaFlex.

 Manufacturing

 We previously leased a fully
permitted, 36,900 square foot facility located in Pompano Beach, Florida equipped with five customized, Underwriters Laboratories approved,
Pultrusion manufacturing machines for BasaFlex production, plus other composite manufacturing equipment. Each Pultrusion machine
had up to two linear production lines (we used one or two lines per machine depending on rebar size – giving a maximum capacity
of 10 manufacturing lines). Depending on our manufacturing needs in the future, we have and may continue to explore alternative or additional
manufacturing or corporate facilities. As of December 31, 2022, we no longer operate nor manufacture in our previous Pompano Beach facility.
We are engaged in a continued search for a new manufacturing facility as of December 31, 2024.

 To satisfy what we perceive the
market interest for BasaFlex to be, and to address potential large-scale customers like CPPB, we need to significantly accelerate
obtaining a new manufacturing facility in Ohio with sufficient manufacturing capacity for our short term and long term needs. Our current
goal is to locate a new manufacturing facility in Ohio and restart our manufacturing operations and ultimately to reach a plant production
capacity exceeding 73,000 linear feet per day per day on a two-shift basis (which would be 3 times our previous capacity). To accomplish
these goals, we have designed and developed customized pultrusion equipment which offers significantly increased capacity in the same
footprint as our current equipment. Our new technology manufacturing system, named BasaMax, has been specifically designed for
the manufacture of BasaFlex using our patent pending process. Two versions of this equipment have been designed, and these will
not only offer double the capacity of our current equipment (per machine), but also each will run at faster and more efficient rates.
A prototype was completed in late 2020 thorough testing in our previous Pompano facility, including initial production runs, and is currently
undergoing modifications and upgrades to the final production configuration. As of December 31, 2024, the company engaged to complete
the upgrades and completion of the protype, Upstate Custom Products has not delivered on the completion of the project. See legal disclosure
for more information regarding this matter under "Item 3" below.

 Based on this trial, we are
planning a two-phase plant expansion over the course of three years, eventually including a total of ten pultrusion machines. Our goal,
subject to raising sufficient funding, of about 6 million dollars is to have the first set of five of the new machines installed and
be operational by the end of 2025, pending ongoing litigation with Upstate Custom Products may hinder this timetable, and to install
and have operational five more, along with additional custom manufacturing equipment, by the fourth quarter of 2027 providing sales dictate.
This would create the opportunity for Basanite to ultimately reach our production level target for the new facility by the close of 2028.

 Competition

 The competitive landscape for
concrete reinforcement is intense and can generally be divided into two categories: steel reinforcement, the incumbent from its beginnings
in the nineteenth century, and alternative fiber reinforced polymer (FRP) reinforcement, which is gaining traction globally but remains
a relatively new concept in North America. There is reinforcement of some type in most every cubic yard of concrete that is poured,
and steel rebar producers are present in every major North American city. In contrast, there are only a handful of FRP manufacturers,
and these can be segmented into 3 major types of FRPs used in construction rebar: carbon, fiberglass and basalt. We believe BFRP has a
wider application temperature range, higher oxidation resistance, higher radiation resistance, higher compression strength and higher
shear strength than its previously noted contemporaries. We believe it also represents the best value proposition.

 We believe our major competitors
in the BFRP space specifically include, Neuvokas, Kodiak, Armastek, Galen, Sudaglass and several manufacturers based in China. Other,
non-basalt FRP competitors include Owens Corning/Mateen, Liberty, American Fiberglass Rebar, Tuf-Bar, Pulltrall and Pultron. As noted,
BFRP is relatively new in the U.S., and thus we also compete with major international providers of traditional steel rebar. Given the
early stage of our company, we believe all our competitors are larger, more established, and more financially stable than our company.

 Sources of Raw Materials

 The sourcing of our raw materials
is a primary focus for our management. It is incumbent upon us to pre-plan our requirements prior to, and in conjunction with, our actual
growth and developing an understanding of manufacturing lead-times and other obstacles that may restrain the flow of our established
supply chain. Our current suppliers are aware of our aggressive plans for growth and are committed to helping us achieve those plans
by adding capacity and developing/expanding long-term agreements, with commitments for growth. Our principal supplier for basalt continuous
fiber roving (which is a key component of BasaFlex) is BWF. Our principal suppliers for resin matrix ingredients are Aalchem, Phlex-Tek,
Lindau Chemical and Cabot Labs.

 Sales and Marketing

 We primarily utilize third
party distribution partners (such as USS, as described further below) to market and sell our products, with a small amount of direct
marketing business that isn't typically covered by distribution arrangements (such as one-off technology-driven segments in the
construction industry such as ultra-high-performance concrete, engineered cementitious composite concrete or geopolymer concrete). We
also can generate sales through private label arrangements for larger companies as well as export sales. As part of our distribution-focused
marketing efforts, we focus on design-build companies, engineering, and architectural firms, as well as military, federal, state and
local government agencies to drive material acceptance and specification approvals. We have secured multiple independent representatives
and distributors to date, as detailed in the graphic below, with plans to enter arrangements to secure additional geographic coverage.
We've also contracted with other representatives to bring our products and message to other parts of the world.

 Distribution Agreement with USS

 In December 2021, we entered
into a Distribution Agreement with USS. Under the terms of the Distribution Agreement, we are responsible for providing engineering conversion
calculations when required by USS for targeted construction projects. The conversion calculations support the use of BasaFlex
BFRP rebar reinforcement, both in new designs or to replace steel reinforcement in existing designs. This engineering work will also
be accomplished through the use of the BasaPro proprietary software, with a required review by a Florida licensed professional
engineer. USS is responsible for, among other matters, obtaining any required import or export licenses necessary for us to ship our
products, including certificates of origin, manufacturer's affidavits, and a U.S. Federal Communications Commission's identifier, if
applicable and any other licenses required under US or foreign law.

 The Distribution Agreement
has a term of five (5) years, and thereafter the term shall automatically renew for successive one (1) year terms unless terminated by
the parties prior to the end of the initial term or any renewal term. The Distribution Agreement may be terminated (i) by the mutual
agreement of the parties, (ii) upon breach of the Distribution Agreement (with a notice period and an opportunity to cure) and (iii)
upon the bankruptcy and insolvency of a party.

 The Distribution Agreement
also contains other customary terms and conditions, including with respect to registration of USS customers, packaging, shipping, Product
warranties, Product returns, insurance requirements, intellectual property, confidentiality, limitations on liability, indemnification,
non-solicitation of employees, and representations and warranties of the parties.

 Intellectual Property

 Currently,
we have a patent pending application with the USPTO for BasaFlex, and plan to augment our intellectual property portfolio with
other novel products, processes, and equipment. Additionally, we have secured registered trademarks on our company name as well as our
key product names, including BasaMax, BasaFlex; BasaMix; BasaMesh and BasaWrap, with the near-term
intent to secure BasaPro, and BasaLinks. These trade names represent our BFRP proprietary manufacturing machines, Rebar, Basalt Chopped
Fiber, BFRP Geogrid Mesh, Basalt Reinforcing Wrap Kit, Software Program, Proprietary Pultrusion Equipment and Configured BFRP Shapes respectively.

 Government Regulation

 Fiber reinforced polymer rebar
is subject to various testing and certifications from various private and public entities, such as the Federal and State Departments
of Transportation, the ISO (the International Organization for Standardization) and the US Army Corps of Engineers, to satisfy regulatory
requirements for manufacturing and use as concrete reinforcement. The American Concrete Institute (ACI), ASTM (formerly the American
Society for Testing and Materials) and the International Code Council (ICC) have very specific testing regimen for FRP materials and
strict guidelines regarding the acceptance criteria and certification process. It includes not only the products themselves, but the
facility, the manufacturing equipment, and the quality control measures used in the process as part of the overall approval. The testing
protocols are very expensive and run approximately $30,000 per bar size for the fully required testing protocols. However, once the products
have met all the federal, state and local building code requirements, we believe doors will open for a myriad of other applications and
opportunities. There is no guarantee, however, that we will be able to secure such approvals and certifications in the future. Furthermore,
we are dependent on third party independent groups, such as university laboratories and other certifying bodies, to obtain approvals
and certifications. Inability to secure approvals and certifications could materially harm our ability to generate revenue.

 Moreover, we are subject to
various federal, state, and local laws, rules, and regulations. We are subject to the requirements of the U.S. Department of Labor Occupational
Safety and Health Administration ("OSHA"), particular with respect to our manufacturing facility. To maintain compliance
with applicable OSHA requirements, we have established uniform safety and compliance procedures for our operations, and implemented measures
designed to prevent workplace injuries. Our safety programs focus on job hazard identification and prevention, coupled with extensive
on-going job-specific training.

 We also are subject to environmental
laws, rules, and regulations that limit discharges into the environment, establish standards for the handling, generation, emission,
release, discharge, treatment, storage, and disposal of hazardous materials, substances, and wastes, and require cleanup of contaminated
soil and groundwater. These laws, ordinances, and regulations are complex, change frequently, and have tended to become more stringent
over time. Many of them provide for substantial fines and penalties, orders (including orders to cease operations), and criminal sanctions
for violations. They may also impose liability for property damage and personal injury stemming from the presence of, or exposure to,
hazardous substances. In addition, certain of our operations require us to obtain, maintain compliance with, and periodically renew,
environmental permits. Certain of these environmental laws, including the Comprehensive Environmental Response, Compensation, and Liability
Act ("CERCLA"), may require the investigation and cleanup of an entity's or its predecessor's current or former
properties, even if the associated contamination was caused by the operations of a third party. These laws also may require the investigation
and cleanup of third-party sites at which an entity or its predecessor sent hazardous waste for disposal, notwithstanding that the original
disposal activity accorded with applicable requirements. Liability under such laws may be imposed jointly and severally, and regardless
of fault. In addition, our operations could in the future be subject to regulations related to climate change.

 We
have incurred and, if our business grows, we will continue to incur costs to comply with the requirements of health and safety, transportation,
and environmental laws, ordinances, and regulations. These requirements could become more stringent in the future, and compliance costs
may be material and places restrictions on our business that we will be required to manage.

 Employees and Consultants

 Our employees are essential
to our purpose in creating an innovative, sustainable, productive, and extended future; our culture, values, teamwork, and innovation;
and our strategy and execution. A truly innovative workforce needs to be diverse and leverage the skills and perspectives of various
backgrounds and experiences. In attracting a diverse workforce, we stress the teamwork approach as well as the life work balance philosophy.
Our workforce needs are highly technical, with most of our employee' needs focused on working in engineering, technical and financial
roles. As of December 31, 2024, we had two full-time employees, all of which are employed for the continuing operations. None of our
employees are represented by a labor union, nor governed by any collective bargaining agreements. We consider relations with our labor
force as satisfactory.

 As of December 31, 2024, our employees had the following gender
demographics:

 Women

 Men

 All employees

 %

 %

 Engineers

 —
 %

 —
 %

 Finance

 %

 —
 %

 Manufacturing

 —
 %

 %

 People Managers

 —
 %

 —
 %

 Individual Contributors

 —
 %

 —
 %

 At December 31, 2024, our employees had the following race and
ethnicity demographics:

 All Employees

 Engineers

 Finance

 Manufacturing

 People Managers

 Individual
 Contributors

 Black / African American

 —
 %

 —

 —

 —

 —

 —

 Hispanic/Latino

 %

 —

 —

 50.0
 %

 —

 —

 White

 —
 %

 —

 —

 —

 —

 —

 Multi-Racial

 %

 —

 %

 —

 —

 —

 Facilities

 Our principal office
is leased and located at 2660 N.W. 15 th Court, Pompano Beach, FL 33069. The lease is for approximately 1,500 square feet of
space, which includes our temporary office space and our interim production floor. We do not believe the facility is sufficient to support
our current operations, although we have and may continue to explore securing alternative or additional manufacturing or corporate facilities.

 Item 1A.

 Risk Factors.

 An investment in our
common stock is highly speculative and involves a significant degree of risk, including the risks described below. You should
carefully consider the risks described below before purchasing our common stock. The risks highlighted here are not the only ones that
we may face. For example, additional risks presently unknown to us or that we currently consider immaterial or unlikely to occur could
also impair our operations. If any of the risks or uncertainties described below or any such additional risks and uncertainties occur,
our business, prospects, financial condition, or results of operations could be negatively affected, and you might lose all or part of
your investment.

 Risks Related to Our Business and Company

 We have a history of operating losses and may never achieve significant
revenues, positive cash flow, or profitable results of operations.

 Since the inception of current
business in 2017, we have generated minimum revenues, have not been profitable and have incurred significant losses and cash flow deficits.
For the fiscal years ended December 31, 2024, and 2023 we reported net losses of $1,729,396 and $2,169,379 respectively, and negative
cash flow from operating activities of $1,184,677 and $3,811,627, respectively. As of December 31, 2024, we had an aggregate accumulated
deficit of $57,991,785 and $56,262,389 in 2023, respectively. We anticipate that we will continue to report losses and negative cash
flow. There is therefore a risk that we will be unable to operate our business in a manner that generates positive cash flow or profit,
and our failure to operate our business profitably would damage our reputation and stock price.

 We have extremely limited cash resources
with which to operate our business, and we may have difficulty in raising capital and may consume resources faster than expected.

 We
presently have extremely limited cash resources to meet our current or future capital requirements. We do not expect to generate significant
revenues for the foreseeable future, and we may not be able to raise the funds estimated at six million
dollars we require immediately or the funds we may require
in the future, which would leave us without resources to continue our operations. We have faced difficulties recently in raising needed
capital and may continue to have difficulty raising needed capital in the near or longer term because of, among other factors, the very
early stage of our business plan. Further, we may consume any available cash resources more rapidly than currently anticipated, resulting
in the need for additional funding sooner than anticipated. Our inability to raise funds could lead to decreases in the price of our
common stock and the failure of our businesses.

 There is substantial doubt about our ability to continue as a going
concern.

 We have generated nominal revenues
to date in our current BRFP business model and have generated significant losses from operations. Our revenues are not significant enough
to be able to generate profits, and this condition is expected to continue for the foreseeable as we seek to raise funding and invest
in our manufacturing capabilities as well as our sales and marketing efforts. We have incurred operating losses since the inception of
our basalt fiber business and will continue to incur net losses until we can produce sufficient revenues to cover our costs. In addition,
several factors continue to hinder our ability to attract capital investment, and no assurances can be given that we will be able to
raise capital in the future on acceptable terms, or at all. We have concluded that these conditions, in aggregate, raise substantial
doubt about our ability to continue as a going concern. Our independent auditors have included in their audit reports for our most recent
fiscal years an explanatory paragraph that states that our net loss and working capital deficiency raises substantial doubt about our
ability to continue as a going concern. If we are unable to increase our revenues and establish profitable operations over time, our
business might fail.

 We have a limited operating history, and we have incurred net losses
in the past and expect to incur additional losses in the future.

 We
have a limited operating history in our current business model and have not generated meaningful revenues and have not recorded a profit
since the inception of our current business model. As a result of this limited and overall negative operating history, and the uncertainty
of our business model, investors have limited ability to assess our future, and we cannot reliably forecast the future results of our
operations. We expect to increase our operating expenses in the future because of refining and upgrading our manufacturing and other
internal processes, as well as implementing our sales and marketing strategies. In addition, we expect our operating expenses to increase
in the future as we expand our operations. If our operating expenses exceed our expectations, or if we do not generate revenues according
to our plans, our financial performance will be adversely affected. If our revenue does not grow to offset these increased expenses,
we will likely not be profitable for the foreseeable future. The continuation of losses over time could impair our ability to implement
our business plan and finance our company, which could lead to the failure of our business.

 We have a short operating history and a new
business model in an emerging market. This makes it difficult to evaluate our future and increases the risk of your investment.

 Our limited operating history
in our current BRFP rebar business model also makes it difficult for investors to evaluate our future. You must consider our business
and prospects considering the significant risks and difficulties we have encountered and will continue to encounter as an early-stage
company in a new market. We may not be able to successfully address these risks and difficulties, which could materially harm our business
and operating results. In addition, we do not know if our current business model will operate effectively now or in the future. There
is a risk, therefore, that current economic conditions or worsening economic conditions, or a prolonged or recurring recession, or any
other factors (some of which we may not yet have experienced or anticipated) that have an adverse impact on the construction industry
and the potential demand for our rebar product would have a significant adverse impact on our operating and financial results.

 We currently have very limited cash resources
and need substantial additional capital to fund our operations, which, even if obtained, could result in substantial dilution or significant
debt service obligations. We may not be able to obtain additional capital on commercially reasonable terms, which could adversely affect
our liquidity and financial position.

 We currently have very little
limited cash resources as all our fundraising in the last year has been expended on operating our business. We will thus require substantial
additional capital estimated at 6 million dollars to fund the anticipated growth and expansion of our business and to pursue targeted
revenue opportunities. Due to many factors, including the early stage of our business and the lack of liquidity in our publicly traded
stock, as well as other uncertainties, we have had difficulties in raising necessary capital and there is a material risk that we will
be unable to raise additional capital on acceptable terms, or at all. Even if we are presented with opportunities to raise additional
capital, we do not know ahead of time the terms of any such capital raising. In addition, any future sale of our equity securities would
dilute the ownership and control of your shares and could be at prices substantially below the existing share price. We may seek to increase
our cash reserves through the sale of additional equity or debt securities, including securities convertible into or exercisable for shares
of our common stock. The sale of convertible debt securities or additional equity securities could result in additional and potentially
substantial dilution to our shareholders. The incurrence of convertible or non-convertible indebtedness would result in increased debt
service obligations and could result in operating and financial covenants that would restrict our operations and liquidity. Any failure
to raise additional funds on favorable terms could have a material adverse effect on our liquidity and financial condition and require
us to significantly curtail or terminate our operations.

 We have identified material weaknesses in our internal control over
financial reporting.

 Given the early-stage nature
of our company, we have limited accounting and financial reporting personnel (including the current lack of a full-time Chief Financial
Officer) and other resources with which to address our internal controls and related procedures. We and our independent registered public
accounting firm have identified material weaknesses in our internal controls over financial reporting related to (i) the U.S. GAAP expertise
and experience of our internal accounting personnel and (ii) a lack of segregation of duties within accounting functions. A material
weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable
possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely
basis. If we are unable to remedy our material weaknesses, or if we generally fail to establish and maintain effective internal controls
appropriate for a public company, we may be unable to produce timely and accurate financial statements, and we may conclude that our
internal control over financial reporting is not effective, which could adversely impact our investors' confidence and our stock
price.

 We may be unable to repay our outstanding secured indebtedness,
which is past due, which could further strain our allocation of limited cash resources or force us to declare bankruptcy.

 As of December 31, 2024, we
currently owe approximately $2,144,357 plus $983,466 of accrued interest under a 20% Secured Convertible Promissory Note held by The
Richard A. LoRicco Sr. and Lucille M. LoRicco Irrevocable Insurance Trust DTD 4/28/95, which is a related party associated with our director
Ronald J. LoRicco, Sr. This note matured on February 12, 2023, and as of this Annual Report, no event of default has been called by the
note holder. The Company has continued to accrue interest under the covenants of the note until such time of renewal or reset.

 Given our current limited
cash resources, we have been unable to repay this indebtedness, and interest on this indebtedness continues to accrue. If all or any
of these note holders elect to call an event of default under these notes, we may have increased difficulty raising additional funds
and we could be forced into bankruptcy.

 Inflationary pressures have and may continue to hamper our business.

 Inflationary
pressures, shortages in the labor market, and increased competition within and outside our industry for talented employees have increased
our labor costs, which could negatively impact our profitability. Particularly considering our highly specialized manufacturing processes,
labor shortages or lack of skilled labor have led and could in the future lead to increases in costs to meet demand as we roll out incremental
programs to attract and retain talent. Labor shortages may also negatively impact us from servicing any demand that exists for our products
or operating our manufacturing facility efficiently. Further, inflationary pressures could increase our labor costs and other key costs,
such as the cost of raw materials, which would make it harder to operate our business, particularly given our lack of capital resources.
Additionally, we distribute our products and receive vital components for our business through the freight transportation market, and
reduced trucking capacity due to shortages of drivers has led to increased costs and reduced service levels due to lack of freight transportation
availability.

 We expect to derive a substantial portion of
our future revenue from sales of BasaFlex and other BFRP products, which leaves us reliant on the commercial viability of such products.

 Currently,
our primary product is BasaFlex. We are also developing and marketing secondary sources of basalt fiber-based product revenue,
band we expect that sales of BasaFlex and other basalt fiber and BFRP products will account for a significant amount of our anticipated
revenue potential for the foreseeable future. We currently market and sell BasaFlex and these other products on a limited basis
in North America given our limited resources and current lack of manufacturing capacity. Because BFRP products are different from traditional
steel rebar and similar traditional products, we cannot assure you that BasaFlex and/or our other basalt fiber products will be
widely accepted in the market, and demand may not increase as quickly as we expect. Also, we cannot assure you that BasaFlex and
our other products will compete effectively as an alternative to other more well-known and well-established alternatives such as products
made from steel. Since BasaFlex currently represents our primary product, and our other products are BFRP-based, we are significantly
reliant on the level of recurring sales of BasaFlex and decreased or lower than expected sales of BasaFlex for any reason
would cause us to lose substantially all our revenue.

 We may be unable to derive the benefits
that we currently anticipate from the Supplier Agreement with CPPB and the Distributor Agreement with USS, and Manuel A. Rodriguez, an
affiliate of CPPB and USS, may become subject to conflicts of interest because of these agreements.

 On December 10, 2021, we entered
into a strategic commercial relationship, comprised of two principal five-year agreements: the Supplier Agreement CPPB and the Distribution
Agreement with USS. CPPB and USS are related parties via the common control of Manuel A. Rodriguez (who has been appointed to our Board
of Directors). As a result of these agreements, our business will be dependent on the efforts of CPPB and USS in both purchasing and distributing
our products as well as having our products gain qualification for use in construction materials. We may be unable to derive the benefits
we currently anticipate from these agreements for several reasons, including, without limitation: (i) failure of CPPB to purchase sufficient
quantities of our products, (ii) failure of USS to find new customers for our products, (iii) the inability of CPPB, USS and our company
to have our products qualified for use in construction materials and construction projects and (iv) we may generated extraordinary losses
in our results of operations due to the pricing arrangements we have agreed to with CPPB and USS. In the event we do not derive the benefits
we anticipate from these agreements or generate losses because of them, our results of operations will suffer, and our business might
fail.

 Moreover, Manuel A. Rodriguez,
an affiliate of CPPB and USS who became a member of our Board of Directors in December 2021, may become subject to conflicts of interest
as a result of these agreements or in connection with efforts to raise funding for our company if his interests as the principal of CPPB
and/or USS diverge from his duties as a director of our company. Such conflicts of interest may not be resolved in favor of our shareholders
in general, and the existence of such conflicts of interest could cause our business and results of operations to suffer.

 Our operating results may fluctuate in unanticipated ways and for
reasons beyond our control.

 Our operating results may fluctuate
from period to period because of several factors, many of which are outside of our control. The following and similar factors may affect
our operating results:

 •

 our ability to gain market acceptance of BasaFlex as
 an alternative to traditional steel rebar.

 •

 our ability to compete effectively with larger, more
 established providers of rebar.

 •

 supply chain interruptions or major price increases
 in raw materials.

 •

 the actions of other rebar manufacturers and distribution
 companies (including "dumping" or other price manipulative activity).

 •

 significant reductions in steel rebar and mesh pricing
 in the market, which would greatly compress margins.

 •

 our ability to attract and maintain customers.

 •

 the amount and timing of operating costs and capital
 expenditures related to the maintenance and expansion of our business operations and infrastructure.

 •

 general economic conditions and those economic conditions
 specific to the construction and rebar industries.

 •

 our ability to attract, motivate and retain top-quality
 employees and distribution partners.

 These and similar factors could
cause our results of operations to fluctuate in unanticipated ways and deviate from our forecasts.

 We may be unable to develop the manufacturing
capability and infrastructure necessary to achieve potential sales growth.

 Achieving revenue and subsequent
growth will require that we reestablish and develop additional infrastructure in our manufacturing capability as well as in sales, technical
and client support functions. Our lack of capital resources has significantly delayed our plans to restart our manufacturing capacity
in a new facility to be located in Ohio, and there is a risk that we will not have the capital to obtain, develop and maintain the capacity
we previously maintained or other capabilities necessary for us to implement our business plan. We will continue to design plans to establish
market awareness of BFRP products, reestablish previous manufacturing capacities as well as add manufacturing capabilities, technical,
sales and sales support resources as capital permits. If we are unable to reestablish and scale our manufacturing capability or use any
of our current marketing initiatives or the cost of such initiatives were to significantly increase, or such initiatives are not successful,
we may not be able to attract new customers or retain customers and clients on a cost-effective basis, and as a result, our revenue and
results of operations would be affected adversely.

 Additionally, our plans
for manufacturing expansion through augmentation of new equipment and technology are of concern because they are proprietary in nature,
and only available from a limited number of suppliers. Any interruption in sourcing through this supply chain will have an adverse impact
on our ability to meet the growing market demand for our product offerings.

 Our relationships with our channel partners
may be terminated or may not continue to be beneficial in generating new clients, which could adversely affect our ability to increase
our client base.

 We are developing a network
of active channel partners which refer clients to us within different business verticals and geographies. This includes our relationship
with USS. If we are unable to obtain and maintain contractual relationships with key channel partners, or establish new contractual relationships
with potential channel partners, we may experience loss of sales and increased costs and resource constraints in adding customers, which
could have a material adverse effect on us. The number of clients we can add through these marketing relationships is dependent on the
marketing efforts of our partners over which we exercise limited control.

 Our sales and marketing efforts may not be successful.

 We currently market and sell
BasaMix and BasaFlex on a very limited basis, mainly directly to end users. We plan to significantly increase the scope
of our sales and marketing activities, as we reestablish and grow to include approvals and new material specifications with all major
federal, state, and local agencies and design-build firms. We are seeking to develop concrete industry partnerships, targeting large
concrete manufacturers and contractors. For specific marketing purposes, we have begun to develop industry-specific educational materials,
such as white papers and other collaterals to further educate our markets on the use and value of our products versus traditional steel
rebar. We are participating in industry committees and associations such as ASTM International (formerly the American Society for Testing
and Materials) and the Advisory Council of Managing Agents (known as ACMA). The commercial success of BasaFlex and our other basalt
fiber products ultimately depends upon several factors, including ultimate material acceptance and necessary specifications required
to drive demand generation. BasaFlex and our other products may not gain significant increased market acceptance in the construction
industry. While positive customer experiences can be a significant driver of future sales, it is impossible to influence the way this
information is transmitted and received amongst participants in the construction industry.

 In addition, we may not be
able to reestablish or maintain a suitable sales force or enter or maintain satisfactory marketing and distribution arrangements with
others. Our marketing and sales efforts may not be successful in increasing awareness and sales of BasaFlex or our other products.
Furthermore, other marketing efforts like advertising, trade shows and educational seminars may not increase revenue to the extent we
currently anticipate.

 We may not be able to respond in a timely and cost-effective manner
to changes in consumer preferences.

 Our products, notably BasaFlex,
is and will be subject to changing consumer preferences. A shift in customer demand or expectations away from the products we offer would
result in significantly reduced revenue. Our future success depends in part on our ability to anticipate and develop innovative products
to respond to those changes. Failure to anticipate and respond to changing consumer preferences in the products we market could lead
to, among other things, lower sales of products, significant markdowns or write-offs of inventory, increased product returns and lower
margins. If we are not successful in anticipating, adapting, and responding to changes in consumer demand, our results of operations
in future periods will be materially adversely impacted.

 Competition for employees in our industry is significant,
and we may not be able to attract and retain the highly skilled employees whom we need to support our business.

 Our
success depends on our ability to attract, train and retain qualified personnel. Competition for qualified technical and business personnel
in the construction products industry is significant, and we are presently unable to hire sufficient personnel to support the anticipated
growth of our business. If we fail to attract and retain qualified personnel, our business will suffer. We may not be able to hire and
retain such personnel at compensation levels consistent with our market. Many of the companies with which we compete for experienced
employees have greater resources and can offer more attractive terms of employment. In particular, candidates making employment decisions
with respect to publicly traded companies often consider the value of any equity they may receive in connection with their employment.
As a result, any lack of liquidity or significant volatility in the price of our publicly traded common stock may adversely affect our
ability to attract or retain highly skilled personnel. In addition, we invest significant amounts of time and expense in training employees,
which increases their value to competitors who may seek to recruit them. If we fail to retain our employees, we could incur significant
expenses in hiring and training their replacements and the quality of our services and our ability to serve our clients could diminish,
resulting in a material adverse effect on our business.

 We may be unable to protect our intellectual property rights, and
any inability to protect them could reduce the value of our products and brand.

 We are pursuing intellectual
property rights for all our proprietary and confidential products and process information and will control access to the same. We have
applied for a patent on our BasaFlex product line, which includes both the product design itself and the specific process for
its manufacture. In addition, we expect to file for a patent for our new proprietary BasaMax pultrusion equipment. This system
would add a layer of intellectual property protection through its electronics, and we believe this is protectable intellectual property.
We've also secured trademark registrations for our key product names to further protect our brands. However, patents and trademarks
may not be granted from our applications, and even if granted, they may not afford adequate protection domestically, or in foreign countries
where the laws may not protect our proprietary rights as fully as in the United States, and there can be no assurance that others will
not independently develop similar know-how and trade secrets. We will be able to protect our proprietary rights from unauthorized use
by third parties only to the extent that our proprietary technologies, protocols, and any future products are covered by valid and enforceable
patents or are effectively maintained as trade secrets. There is a risk that future patents will be challenged, invalidated, or circumvented,
that the scope of any of our patents will not exclude competitors or that the patent rights granted to us will not provide us with any
competitive advantage. If we do not secure registered intellectual property protection for our products and processes, or if we are otherwise
unable to protect our proprietary technology, protocols, systems, trade secrets and know-how, the value of our products and brand may
be reduced and our ability to complete effectively and our results of operations could suffer.

 We may be unable to create new proprietary technology and related
intellectual property, which could harm our business.

 Our business depends, in part,
on our ability to innovate and create new or improved products and processes, including manufacturing, as well as related trade secrets
and know-how. There is a risk that we may be unable to innovate due to lack of financial or personnel resources, and even if we do innovate,
we may be unable to file new patent or trademark applications, or that if filed, any future patent or trademark applications will result
in granted patents and trademarks. Our inability to innovate could harm our ability to compete effectively.

 Our patents and other intellectual property
are subject to challenges by third parties, and if our intellectual property is successfully challenged or invalidated, our business
could be harmed.

 Any patents we have obtained
or will obtain may be challenged by re-examination, or otherwise invalidated or eventually found unenforceable. Both the patent application
process and the process of managing patent disputes can be time consuming and expensive. If we were to initiate legal proceedings against
a third party to enforce a patent related to one of our products, the defendant in such litigation could counterclaim that our patent
is invalid and/or unenforceable. In patent litigation in the U.S., defendant counterclaims alleging invalidity and/or unenforceability
are commonplace, as are validity challenges by the defendant against the subject patent or other patents before the United States Patent
and Trademark Office ("USPTO"). Grounds for a validity challenge could be an alleged failure to meet any of several statutory
requirements, including lack of novelty, obviousness or non-enablement, failure to meet the written description requirement, indefiniteness,
and/or failure to claim patent eligible subject matter. Grounds for an unenforceability assertion could be an allegation that someone
connected with prosecution of the patent intentionally withheld material information from the USPTO, or made a misleading statement,
during prosecution. Additional grounds for an unenforceability assertion include an allegation of misuse or anticompetitive use of patent
rights, and an allegation of incorrect inventorship with deceptive intent. Third parties may also raise similar claims before the USPTO
even outside the context of litigation. The outcome is unpredictable following legal assertions of invalidity and unenforceability. With
respect to the validity question, for example, and even though we've had a third party conduct a search of the subject matter and
provide a right to proceed, we cannot be certain that no invalidating prior art existed of which we and the patent examiner were unaware
during prosecution. These assertions may also be based on information known to us or the USPTO. If a defendant or third party were to
prevail on a legal assertion of invalidity and/or unenforceability, we would lose at least part, and perhaps all, of the claims of the
challenged patent. Such a loss of patent protection would or could have a material adverse impact on our business. The standards that
the USPTO (and foreign equivalents) use to grant patents are not always applied predictably or uniformly and can change. There is also
no uniform, worldwide policy regarding the subject matter and scope of claims granted or allowable in device patents. Accordingly, we
do not know the degree of future protection for our proprietary rights or the breadth of claims that will be allowed in any patents issued
to us or to others.

 However, there can be no assurance
that our technology will not be found in the future to infringe upon the rights of others or be infringed upon by others. Moreover, patent
applications are in some cases maintained in secrecy until patents are issued. The publication of discoveries in scientific or patent
literature frequently occurs substantially later than the date on which the underlying discoveries were made, and patent applications
were filed. Because patents can take many years to issue, there may currently be pending applications of which we are unaware that may
later result in issued patents that our products or product candidates infringe. For example, pending applications may exist that provide
support or can be amended to provide support for a claim that results in an issued patent that our product infringes. In such a case,
others may assert infringement claims against us, and should we be found to infringe upon their patents, or otherwise impermissibly utilize
their intellectual property, we might be forced to pay damages, potentially including treble damages, if we are found to have willfully
infringed on such parties' patent rights. In addition to any damages, we might have to pay, we may be required to obtain licenses
from the holders of this intellectual property. We may fail to obtain any of these licenses or intellectual property rights on commercially
reasonable terms. Even if we can obtain a license, it may be non-exclusive, thereby giving our competitors access to the same technologies
licensed to us. In that event, we may be required to expend significant amounts of time and resources to develop or license replacement
technology. If we are unable to do so, we may be unable to develop or commercialize the affected products, which could materially harm
our business and the third parties owning such intellectual property rights could seek either an injunction prohibiting our sales, or,
with respect to our sales, an obligation on our part to pay royalties and/or other forms of compensation. Conversely, we may not always
be able to successfully pursue our claims against others that infringe upon our technology. Thus, the proprietary nature of our technology
or technology licensed by us may not provide adequate protection against competitors.

 In addition to patents, we
rely on trademarks to protect the recognition of our company and products in the marketplace. We also rely on trade secrets, know-how,
and proprietary knowledge that we seek to protect, in part, through confidentiality agreements with employees, consultants and others.
We cannot assure you that our proprietary information will not be shared, our confidentiality agreements will not be breached, that we
will have adequate remedies for any breach, or that our trade secrets will not otherwise become known to or independently developed by
competitors.

 Confidentiality agreements with employees
and others may not adequately prevent disclosure of trade secrets and other proprietary information and disclosure of our trade secrets
or proprietary information could compromise any competitive advantage that we have, which could have a materially adverse effect on our
business.

 Our success depends, in part,
on our ability to protect our proprietary rights to the technologies used in our products and our proprietary scientific protocols. We
depend heavily upon confidentiality agreements with our current and former officers, employees, consultants, and subcontractors to maintain
the proprietary nature of our technology and our manufacturing processes. These measures may not afford us complete or even sufficient
protection and may not afford an adequate remedy in the event of an unauthorized disclosure of confidential information. If we fail to
protect and/or maintain our intellectual property, third parties may be able to compete more effectively against us, we may lose our
technological or competitive advantage, and/or we may incur substantial litigation costs in our attempts to recover or restrict use of
our intellectual property. In addition, others may independently develop technology like ours, otherwise avoiding confidentiality agreements,
or produce patents that would materially and adversely affect our business, prospects, financial condition, and results of operations.

 Damage to our reputation or our brand could
negatively impact our business, financial condition, and results of operations.

 We must increase the value
of our brand to generate and grow our revenues. We intend to develop a reputation based on the high quality of our rebar and related
products as well as on our culture and the experience of our customers. If we do not make investments in areas such as education, marketing,
and brand awareness, as well as personnel training, the value of our brand may not increase or may be diminished. Any incident, real
or perceived, regardless of merit or outcome, that adversely affects our brand, such as, but not limited to, product failure, accidents,
and failure to comply with federal, state, or local regulations, could significantly reduce the value of our brand, expose us to negative
publicity and damage our overall business and reputation and negatively impact our financial condition and results of operations.

 We depend on certain key personnel and need to attract and retain
additional personnel.

 We substantially rely on the
efforts of our current senior management, including Jackie Placeres, our Interim Chief Financial Officer and our Chief Executive Officer
Michael Nelson. Our business would be impeded or harmed if we were to lose either individual's services. In addition, we currently
need to fill key officer and other positions, such as permanent Chief Financial Officer and Chief Executive Officer. If we are unable
to attract, train and retain highly skilled finance, accounting, technical, managerial, manufacturing, product development, sales, and
marketing personnel, we may be at a competitive disadvantage and unable to increase revenue. The failure to attract, train, retain and
effectively manage employees could negatively impact our research and development, sales and marketing and reimbursement efforts. In
particular, the loss of sales personnel could lead to lost sales opportunities as it could take several months to hire and train replacement
sales personnel. Uncertainty created by the turnover of key employees could adversely affect our business.

 Our independent directors and executive
officers have limited experience in the management of public companies, which poses a risk for us from a corporate governance perspective.

 Our directors and executive
officers are inexperienced with respect to the corporate governance of public companies. Our directors are often required to make decisions
regarding related parties, such as the approval of related party transactions, compensation levels, and oversight of our accounting function.
Our directors and executive officer also exercise substantial control over all matters requiring stockholder approval, including the
nomination of directors and the approval of significant corporate transactions. We do not have a majority of independent directors, and
we have not yet been able to implement certain corporate governance measures, the absence of which may cause stockholders to have more
limited protection against transactions implemented by our Board of Directors, conflicts of interest and similar matters. Stockholders
should bear in mind our current lack of corporate governance measures in formulating their investment decisions.

 Risks Related to Our Industry

 We compete with larger, more established companies, and our size
and stage of development creates a significant risk for us in our ability to compete.

 We are a small, early-stage
company competing in a mature industry populated by much larger, more established, and better capitalized companies. Our BFRP products
for concrete reinforcement compete as an alternative to traditional steel reinforcement, as well as a direct replacement for other FRP
rebar and industry established fiber products. The steel rebar industry is price commoditized, very mature and entrenched within our
potential customers. Due in part to our early stage and size, we may be unable to convince customers and design professionals that our
BFRP products and higher value proposition are a better choice than long-established, lower cost steel, or other accepted FRP products.
Our inability to compete with traditional steel rebar, and the larger, more established, and better capitalized companies that produce
traditional steel or non-basalt FRP rebar, would cause our business and results of operations to suffer.

 Our inability to comply with numerous regulatory requirements that
govern our industry could harm our business.

 Our products typically require
certain approvals and certifications to satisfy regulatory and building code requirements for use as concrete reinforcement. The American
Concrete Institute (ACI), ASTM International (formerly the American Society for Testing and Materials), and the International Code Council
(ICC) each have very specific testing regimen for FRP materials and strict guidelines regarding the acceptance criteria and product certification
process. These include not only the products themselves, but the facility, the equipment and quality control measures used in the process
as part of the overall approval. There is a risk that we will be unable to secure and maintain such approvals and certifications in the
future. Furthermore, we are dependent on third party independent facilities, such as university laboratories and/or other certifying
bodies, to obtain such approvals and certifications, and these come at a significant cost. Our inability to secure approvals and certifications
and/or an extended period of time required to obtain such approvals could materially harm our ability to generate revenue.

 Our products, which are all
made using igneous basalt rock that must be mined from the ground, may become subject to future government laws, rules, and regulations
and/or taxation for environmental reasons associated with mining. Such regulatory actions are beyond our control and could result in
increases in the cost of basalt stock and/or restrict or prevent raw material availability, and either action would materially harm our
ability to meet demand and generate revenue.

 We are dependent on the availability of basalt fiber and other raw
materials.

 We will depend on the timely
availability of various raw materials, including basalt fiber, for the manufacture of our products from various suppliers. Our suppliers
are located in the United States and abroad. We are subject to the risk that our suppliers will be unable to provide us with a sufficient
or satisfactory supply of raw materials for us to maintain production levels necessary to satisfy customers. The processes used to produce
extremely fine denier, high tenacity basalt fiber is extremely meticulous and slow, and can be adversely affected by myriad issues which
can affect the delicate melting process, the platinum bushings, or other advanced process elements. Additionally, such issues could adversely
impact our suppliers' ability to provide quality raw materials on a timely basis, which in turn could adversely affect our ability
to obtain raw materials and conduct business.

 Volatility in prices for raw materials may materially, adversely
impact on our prices.

 Depending on our customer demand
and the availability of raw materials, we may be faced with having to source and purchase raw materials from alternative suppliers, and/or
at prices that are above the current market price, or in greater volumes than available. Additionally, other factors such as the added
capacity of competing steel and/or alternative FRP's could create negative pricing pressure, which would negatively affect our
profit margins.

 There are risks associated
with the limited number of basalt fiber manufacturers worldwide, who possess a finite capacity to produce fine micron basalt roving that
is incorporated into BasaFlex. In the event these manufacturers lack the desire or ability to invest in additional capacity on a timely
basis, we may be faced with an inadequate supply of raw material to meet our growth plan. In such an event, it may become necessary to
develop a controlled source of basalt fiber, including acquiring or developing a smelting plant to meet our own demand, which will be
a costly process and take time and may not be consummated on desirable terms, or at all.

 In
addition, socioeconomic and political events beyond our control could lead to a shortage of basalt or volatility in the prices for basalt.
The recent war in Ukraine has led the world to issue sanctions on the government of Russia. This has shut down our ability to procure
basalt fiber material from our primary supplier, BWF. While we are managing through this particular challenge, similar or worse shortages
of, or volatility in the price of, basalt could adversely affect our business and the results of operations.

 Government contracts generally are subject
to a variety of government regulations, requirements and statutes, the violation or alleged violation of which could have a material
adverse effect on our business.

 Our business plan will partially
be driven by our ability to enter into contracts funded by federal, state, and local governmental agencies. Our contracts with these
governmental agencies would generally be subject to specific procurement regulations, contract provisions and a variety of socioeconomic
requirements relating to their formation, administration, performance, and accounting and often include express or implied certifications
of compliance. Further, government contracts typically provide for termination at the convenience of the customer with requirements to
pay us for work performed through the date of termination. We may be subject to claims for civil or criminal fraud for actual or alleged
violations of these various governmental regulations, requirements, or statutes. Further, if we fail to comply with any of these various
governmental regulations, requirements, or statutes or if we have a substantial number of accumulated Occupational Safety and Health
Administration or similar workplace safety violations, any government contracts to which we are a party could be terminated, and we could
be suspended from government contracting or subcontracting, including federally funded projects at the state level. Even if we have not
violated these various government regulations, requirements or statutes, allegations of violations could harm our reputation and require
us to incur material costs to defend any such allegations or lawsuits. Should one or more of these events occur, it could have a material
adverse effect on our business, financial condition, and results of operations.

 If we do not comply with certain federal or
state laws, we could be suspended or debarred from government contracts, which could have a material adverse effect on our business.

 Various statutes to which our
operations are, or may in the future be subject, including laws prescribing a minimum wage and regulating overtime and working conditions,
provide for mandatory suspension and/or debarment of contractors in certain circumstances involving statutory violations. In addition,
the federal and various state statutes provide for discretionary suspension and/or debarment in certain circumstances, including as a
result of being convicted of, or being found civilly liable for, fraud or a criminal offense in connection with obtaining, attempting
to obtain, or performing a public contract or subcontract. The scope and duration of any suspension or debarment may vary depending upon
the facts of a particular case and the statutory or regulatory grounds for debarment. Any suspension or debarment from government contracting
could have a material adverse effect on our business, financial condition, and results of operations.

 Our industry is seasonal and subject to adverse weather conditions,
which can adversely impact our business.

 Construction operations occur
outdoors. As a result, seasonal changes and adverse weather conditions can adversely affect our business operations through a decline
in both the need for and use of our products. Adverse weather conditions such as extended rainy and cold weather in the spring and fall
could reduce demand for our products and reduce sales. Major weather events such as hurricanes, tornadoes, tropical storms, and heavy
snow could also adversely affect our ability and the ability of our customers to conduct business. In addition, construction materials
production and shipment levels follow activity in the construction industry, which typically occurs in the spring, summer, and fall.
Thus, our business is likely to be seasonal and subject to fluctuation accordingly.

 Changes in the global, national, and local
economic environment impacting the construction industry may lead to declines in the construction industry and the demand for our products
from our customers.

 We plan to sell our products
primarily to the construction industry. The construction industry is cyclical and can exhibit a great deal of sensitivity to general
economic conditions. Low demand from the construction industry could adversely impact our financial position, results of operations and/or
our cash flows. Economic or other conditions that adversely impact the global, national, or local construction industry may be novel
and singular, in nature, such as the COVID 19 virus, or more seasonal and recurring, such global building supply chain shortages, interest
rate fluctuations which impact new construction, and a lack of government funding for construction initiatives. These conditions, most
of which will be beyond our control, could adversely impact business and the results of operations.

 Changes to accepted trade practices, trade agreements, or imposition
of tariffs may adversely impact the supply and pricing of certain raw materials.

 Political events, such as the
imposition of tariffs or the dissolution of trade agreements, may negatively impact the supply chain and other factors related to our
business. Such events could materially impact the supply and pricing of critically necessary raw materials for the manufacture of our
products. For example, the basalt fiber roving, the primary raw material used in the manufacture of BasaFlex, and our other products
are sourced from many parts of the world, and any such events could materially impact our supply and/or pricing. These events could also
have an adverse impact on the construction industry and demand for our products in general. Impacts from such events could adversely
impact business and results of operations.

 General Business Risks Associated with Our Company

 There may be legacy issues (including potential
liabilities) arising from or is associated with prior management and prior business operations, including potential litigation.

 Our company has been in operation
since 2006 and as a public company since 2009. During this time, our company has entered and exited several businesses and has undergone
three name changes. Current management has only been engaged over the last 4 years, and in that time has had to address several legacy
issues which arose under our previous management, including the 2021 settlement of the lawsuit with Raw Energy, and the resolution of
the judgment awarded to the California State Teachers Retirement System and Eagle Supply Products, among others. As such, we face the
risk that all prior issues and resulting potential liabilities have not been identified, resolved, or accounted for, and if we are required
to addresses any new issues as they arise, our management may become distracted from fulfilling our business objectives and we may be
faced with unforeseen costs, expenses and liabilities which could damage our reputation and adversely impact our results of operations.

 If we fail to manage our anticipated growth, our business and operating
results could be harmed.

 If we do not effectively manage
our anticipated growth, the quality of our products and services could suffer, which could negatively affect our brand and operating
results. To effectively manage our potential growth, we will need to improve our operational, financial and management controls and our
reporting systems and procedures. These systems enhancements and improvements may require significant capital expenditures and allocation
of valuable management resources, especially as we add additional manufacturing capacity to our primary facility in Pompano Beach, Florida
or invest in satellite manufacturing facilities. We also need to manage our sub-tier suppliers of the equipment necessary to support
our growth. If planned or additional required improvements are not implemented on a timely or cost-effective basis, or they are not implemented
at all for any reason, our ability to manage our growth will be impaired and we may have to make significant additional expenditures
to address these issues, which could harm our financial position.

 We are subject to risks relating to our information
technology systems, and any failure to adequately protect our critical information technology systems could materially affect our operations.

 We rely on information technology
systems across our operations, including for management, supply chain and financial information and various other processes and transactions.
As our manufacturing equipment is wirelessly controlled and operated, and the tracing data (which is required for necessary certifications)
our equipment produces is stored electronically, our business depends on the security, reliability, and capacity of these systems. Information
technology system failures, network disruptions or breaches of security could disrupt our operations, causing delays or cancellation
of customer orders or impeding the manufacture or shipment of products, processing of transactions or reporting of financial results.
An attack or other problem with our systems could also result in the disclosure of proprietary information about our business or confidential
information concerning our customers or employees, which could result in significant damage to our business and our reputation. Advanced
cybersecurity threats, such as computer viruses, attempts to access information, and other security breaches, are persistent and continue
to evolve, making them increasingly difficult to identify and prevent. Protecting against these threats may require significant resources,
and we may not be able to implement measures that will protect against all the significant risks to our information technology systems.
In addition, we rely on third party service providers to execute certain business processes and maintain certain information technology
systems and infrastructure, and any breach of security on their part could impair our ability to effectively operate. Any breach of our
security measures could result in unauthorized access to and misappropriation of our information, corruption of data or disruption of
operations or transactions, any of which could have a material adverse effect on our business.

 We will not be insured against all potential
losses and could be seriously harmed by natural disasters, catastrophes, pandemics, theft, or sabotage.

 Our products are currently
produced at a single location, and many of our business activities involve or will involve substantial investments in manufacturing.
Our facility could be materially damaged by natural disasters such as floods, tornados, hurricanes (particularly given our location in
South Florida), fires, earthquakes, pandemics or by theft or sabotage. We could incur uninsured losses and liabilities arising from such
events, including damage to our reputation, and/or suffer material losses in operational capacity, which could have a material adverse
impact on our business, financial condition, and results of operations.

 We could face potential product liability
and warranty claims, we may not accurately estimate costs related to such claims, and we may not have sufficient insurance coverage available
to cover such claims.

 Our products are anticipated
to be used in a wide variety of residential, commercial, and industrial applications. We face an inherent business risk of exposure to
product liability or other claims in the event our products are alleged to be defective or that the use of our products is alleged to
have resulted in harm to others or to property. We may, in the future, incur liability if product liability lawsuits against us are successful.
Moreover, any such lawsuits, whether successful or not, could result in adverse publicity for us, which could cause our sales to decline.
We maintain insurance coverage to protect us against product liability claims, but that coverage may not be adequate to cover all claims
that may arise, or we may not be able to maintain adequate insurance coverage in the future at an acceptable cost. Any liability not
covered by insurance or that exceeds our established reserves could materially and adversely impact our business, financial condition,
and results of operations. In addition, consistent with industry practice, we provide warranties on many of our products. We may experience
the costs of warranty claims (limited to replacement) when the product is not performing to the satisfaction of the claimant even though
it has not caused harm to others or property. We estimate our future warranty costs based on historical trends and product sales, but
we may fail to accurately estimate those costs and thereby will fail to establish adequate warranty reserves for them. Warranty claims
are not insurable.

 Risks Related to Our Securities

 There is a risk that we may not be able to consummate our contemplated
Re-IPO.

 Under the terms of our
August 2021 Private Placement, we are required to conduct a new public offering ("Re-IPO") whereby we will seek to raise
additional funding in a registered underwritten offering and concurrently list our common stock on a national securities exchange. We
are presently in default of our obligations under the terms of the August 2021 Private Placement to file a registration statement for
the Re-IPO and are accruing liquidated damages as a result to the investors in the August 2021 Private Placement, which we may not have
the cash resources to pay. Moreover, investors are cautioned that the Re-IPO may not take for any number of reasons, many of which are
beyond our control. You should not invest in our company in reliance on the fact that the Re-IPO will take place. If the Re-IPO does
not occur, our common stock would still be quoted on the OTCQB Market, but your opportunity for liquidity in your common stock would
be significantly limited.

 Future sales of our common stock on
the public market could lower the price of our common stock and impair our ability to raise funds in future securities offerings.

 We may issue a significant
number of shares of common stock upon conversion of outstanding convertible notes, or upon exercise of warrants, including the Warrant
as and Warrant Bs issued in our August 2021 Private Placement and our early 2022 private placement. As of the date of this Annual Report,
approximately 153,681,049 shares of common stock are reserved for issuance under our outstanding convertible notes, options, and warrants.
Future sales of a substantial number of shares of our common stock in the public market, or the perception that such sales may occur,
could adversely affect the then prevailing market price of our common stock, and could make it more difficult for us to raise funds in
the future through private or public offerings of our securities.

 Because the market for our common stock
is limited, persons who purchase our common stock may not be able to resell their shares at or above the purchase price paid for them.

 Our common stock is listed
for quotation on the OTCQB Market, which is not as liquid a market as a national securities exchange such as NASDAQ. There is currently
only a limited public market for our common stock. We cannot assure you that an active public market for our common stock will develop
or be sustained in the future. If an active market for our common stock does not develop or is not sustained, the price may decline.

 Trading in our common stock is subject to special sales practices
and may be difficult to sell.

 Our common stock is subject
to the SEC's "penny stock" rule, which imposes special sales practice requirements upon broker-dealers who sell such
securities to persons other than established distributors or accredited investors. Penny stocks are generally defined to be an equity
security that has a market price of less than $5.00 per share. For transactions covered by the rule, the broker-dealer must make a special
suitability determination for the purchaser and receive the purchaser's written agreement to the transaction prior to the sale.
Consequently, the rule may affect the ability of broker-dealers to sell our securities and also may affect the ability of our stockholders
to sell their securities in any market that might develop.

 Stockholders should be aware
that, according to the SEC, the market for penny stocks has suffered from patterns of fraud and abuse. Such patterns include:

 •

 control of the market for
 the security by one or a few broker-dealers that are often related to the promoter or issuer;

 •

 manipulation of prices
 through prearranged matching of purchases and sales and false and misleading press releases;

 •

 "boiler room"
 practices involving high-pressure sales tactics and unrealistic price projections by inexperienced salespersons;

 •

 excessive and undisclosed bid-ask differentials and
 markups by selling broker-dealers; and

 •

 the
 wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along
 with the resulting inevitable collapse of those prices and with consequent investor losses.

 Our management is aware
of the abuses that have occurred historically in the penny stock market. Although we do not expect to be able to dictate the behavior
of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations
to prevent the described patterns from being established with respect to our common stock.

 Because we may not be able to attract the attention
of major brokerage firms, it could have a material impact upon the price of our common stock.

 It is not likely that securities
analysts of major brokerage firms will provide research coverage for our common stock since the firm itself cannot recommend the purchase
of our common stock under the penny stock rules referenced in an earlier risk factor. The absence of such coverage limits the likelihood
that an active market will develop for our common stock. It may also make it more difficult for us to attract new investors at times
when we acquire additional capital.

 The conversion of our outstanding secured convertible
promissory note will result in dilution to existing stockholders and could negatively affect the market price of our common stock.

 As of December 31, 2024, we
have an outstanding 20% secured promissory note in the aggregate principal amount of $2,144,357, convertible at the option of
the principal holder (a trust associated with one of our directors, Ronald J. LoRicco, Sr., which trust acts as agent for all noteholders)
into shares of our common stock at a price per share equal to $0.275. If this note is converted into shares of common stock, our issued
and outstanding shares would increase. In the event a market for our common stock develops, to the extent that the holder of this note
converts such a note, our existing shareholders will experience dilution to their ownership interest in our company. In addition, to
the extent that the holder converts such a note and then sells the underlying shares of common stock in the open market, our common stock
price may decrease.

 The principal holder of our outstanding
secured convertible promissory note (which holder is associated with one of our directors) has rights which are senior to the rights
of our common stockholders, and which may impair our financing efforts.

 The principal holder of the
$2,144,357 convertible note mentioned above (a trust associated with one of our directors, Ronald J. LoRicco, Sr., which trust acts as
agent for all noteholders) is party to a security agreement with us granting such holder a secured interest in all of our assets. In
addition, our agreements with this principal noteholder contain a negative covenant explicitly requiring such a holder's consent
in order for us to incur any debt or issue of any equity securities. The interests of such debt holders are senior to the rights of our
common stockholders and may impede our ability to obtain new financing. Furthermore, such holder's interest may not coincide with
the interests of other stockholders, and such holder may become subject to conflicts of interest given its affiliation with one of our
directors. These conflicts may not be resolved in favor of our common stockholders.

 On September 15, 2022, the
Company extended the debt for a newly issued amended and restated secured convertible promissory note with a new principal balance of
$2,144,357 bearing an interest rate of 20% per annum due and payable February 12, 2024. No additional consideration was provided. As
of this filing, the note remains unpaid, and no entry of default has been provided to the company. The company fully expects an extension
of the terms to be completed. The Company was notified on February 28, 2025, by the representatives of trust the UCC filing had been
extended through August 5 th, 2030.

 The interests of our principal stockholders,
officers, and directors, who collectively and beneficially own approximately 39% of our stock, may not coincide with yours and such stockholders
will have the ability to substantially influence decisions with which you may disagree.

 As of the date of this Annual
Report, our principal stockholders, officers, and directors beneficially owned approximately 39% of our common stock. As a result, our
principal stockholders, officers, and directors will have the ability to substantially influence matters requiring stockholder approval,
including the election of directors and approval of significant corporate transactions. In addition, this concentration of ownership
may delay or prevent a change in control of our company and make some future transactions more difficult or impossible without the support
of our controlling stockholders. The interests of such stockholders may not coincide with your interests or the interests of other stockholders.

 Certain accredited investors control large
blocks of restricted common stock. The sale of large blocks of common stock could materially impact our stock price.

 Historically, we have raised
funds from accredited investors through the sale of restricted common stock. Generally, common stock sold privately to accredited investors
has certain resale restrictions under the securities laws that include elements of minimum holding periods, certain other requirements
with respect to financial filings of our company and other requirements. Once these requirements are met, holders of the restricted common
stock are able to remove resale restrictions and sell freely in the open market. As our common stock has a limited market for resale,
a substantial additional supply of stock caused by previously restricted stock coming into the market for resale could have a materially
negative impact on our stock price.

 The issuance of preferred stock could grant rights to investors
that are not enjoyed by the holders of our common stock.

 Our articles of incorporation
authorizes the Board of Directors, without the approval of the shareholders, to cause shares of preferred stock to be issued in one or
more series, with the numbers of shares of each series to be determined by the Board of Directors. Our articles of incorporation further
authorize the Board of Directors to fix and determine the powers, designations, preferences and relative, participating, optional or
other rights (including, without limitation, voting powers, preferential rights to receive dividends or assets upon liquidation, rights
of conversion or exchange into common stock or preferred stock of any series, redemption provisions and sinking fund provisions) between
series and between the preferred stock or any series thereof and the common stock, and the qualifications, limitations or restrictions
of such rights. In the event of issuance, preferred stock could be used, under certain circumstances, as a method of discouraging, delaying,
or preventing a change of control of our company. Although we have no present plans to issue additional series or shares of preferred
stock, we can give no assurance that we will not do so in the future.

 Our inability to remain current on our required securities filings
may impact liquidity for certain shareholders and our ability to raise funds.

 We rely on third parties to
assist us with the preparation of our public filings. Our financial resources may not be sufficient from time to time to be able to cover
the costs associated with these third parties' services. Failure to remain current on certain public filings may limit the ability
of shareholders to avail themselves of safe harbors when attempting to sell their shares, for example under Rule 144 of the Securities
Act of 1933, as amended. In addition, our inability to present current financial information may impact our ability to raise additional
funds and would further require us to pay cash liquidated damages to the investors in the August 2021 Private Placement.

 The number of shares of our common stock issuable upon the exercise
outstanding warrants is substantial.

 As
of the date of this Annual Report, we had warrants outstanding that were exercisable for an aggregate of 145,434,090 shares of common
stock. The shares of common stock are issuable upon exercise of these warrants are substantial, currently constituting approximately 56%
of the
total number of shares of common stock currently issued and outstanding. Therefore, the exercising of these warrants and public sales
of the shares of common stock underlying these warrants would cause substantial dilution for our stockholders and could adversely impact
the price of our common stock from time to time. The timing for such dilution and adverse price impact is uncertain as we have no control
over when warrants held by third parties will be exercised. For more information regarding the terms of our warrants, please refer to
the footnotes accompanying the audited and unaudited financial statements included as part of this Annual Report.

 Adjustments to the conversion price for certain of our warrants
will dilute the ownership interests of our existing stockholders.

 Under
the terms of certain of our outstanding warrants (notably the Warrant A's and Warrant B's issued in our August 2021 and January
2022 private placements), the exercise price of such warrants may be adjusted downward in certain circumstances. If a downward adjustment
were to occur in the exercise price of such warrants, the exercise of such warrants would result in the issuance of a significant number
of additional shares of our common stock and cause significant dilution. Moreover, the public sale of such shares could adversely impact
the price of our common stock from time to time.

 Even if a market for our common stock
develops, the market price of our common stock may be significantly volatile, which could result in substantial losses for purchasers.

 The market price for our common
stock may be significantly volatile and subject to wide fluctuations in response to factors, including the following:

 •

 our ability to develop and implement our business plans;

 •

 actual or anticipated fluctuations in our quarterly
 or annual operating results;

 •

 changes in financial or operational estimates or projections;

 •

 conditions in markets generally;

 •

 changes in the economic performance or market valuations
 of companies similar to ours; and

 •

 general economic or political conditions in the United
 States or elsewhere.

 In some cases, following
periods of volatility in the market price of a company's securities, stockholders have often instituted class action securities
litigation against those companies. Such litigation, if instituted, could result in substantial costs and diversion of management attention
and resources, which could significantly harm our business operations and reputation.

 Future sales of our common stock in
the public market could lower the price of our common stock and impair our ability to raise funds in future securities offerings.

 We may issue a significant
number of shares of common stock in the future, including shares of common stock upon conversion of preferred stock or convertible notes
we have or may issue, or upon the exercise of warrants currently outstanding or which we may issue in the future. Future sales of a substantial
number of shares of these shares of common stock in the public market, or the perception that such sales may occur, could adversely affect
the then prevailing market price of our common stock, and could make it more difficult for us to raise funds in the future through public
or private offerings of our securities.

 You may face significant restrictions on the resale of your shares
due to state "blue sky" laws.

 Each state has its own securities
laws, often called "blue sky" laws, which (1) limit sales of securities to a state's residents unless the securities
are registered in that state or qualify for an exemption from registration, and (2) govern the reporting requirements for broker-dealers
doing business directly or indirectly in the state. Before a security is sold in a state, there must be a registration in place to cover
the transaction, or it must be exempt from registration. The applicable broker-dealer must also be registered in that state.

 We do not know whether our
securities will be registered or exempt from registration under the laws of any state. A determination regarding registration will
be made by those broker dealers, if any, who agree to serve as market makers for our common stock. We have not yet applied to have
our securities registered in any state and will not do so until we receive expressions of interest from investors resident in
specific states after they have viewed this Annual Report. There may be significant state blue sky law restrictions on the ability
of investors to sell, and on purchasers to buy, our securities. You should therefore consider the resale market for our common stock
to be limited, as you may be unable to resell your shares without the significant expense of state registration or
qualification.

 Actions of activist shareholders could be disruptive
and potentially costly and the possibility that activist shareholders may seek changes that conflict with our strategic direction could
cause uncertainty about the strategic direction of our business.

 Activist
investors or other stockholders who disagree with our management (including legacy stockholders of our company from a time prior to the
commencement of our current business plan) may attempt to effect changes in our strategic direction and how our company is governed or
may seek to acquire control over our company. Some investors (commonly known as "activist investors") seek to increase short-term
stockholder value by advocating corporate actions such as financial restructuring, increased borrowing, special dividends, stock repurchases,
or even sales of assets or the entire company. Activist campaigns can also seek to change the composition of our Board of Directors,
and campaigns that contest or conflict with our strategic direction could have an adverse effect on our results of operations and financial
condition as responding to proxy contests and other actions by activist shareholders can disrupt our operations, be costly and time-consuming,
and divert the attention of our Board of Directors and senior management from the pursuit of our business strategies. In addition, perceived
uncertainties as to our future direction that can arise from potential changes to the composition of our Board of Directors sought by
activists may lead to the perception of a change in the direction of the business, instability or lack of continuity which may be exploited
by our competitors, may cause concern to our current or potential customers or other partners, may result in the loss of potential business
opportunities and may make it more difficult to attract and retain qualified personnel and business partners. These types of actions
could divert our management's attention from our business or cause significant fluctuations in our stock price based on temporary
or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business,
all of which could have a material adverse effect on our company.

 Our ability to use our net operating losses
and research and development credit carryforwards to offset future taxable income may be subject to certain limitations.

 In general, under Sections
382 and 383 of the Internal Revenue Code of 1986, as amended (or the Code), a corporation that undergoes an "ownership change,"
generally defined as a greater than 50% change by value in its equity ownership over a three-year period, is subject to limitations on
its ability to utilize its pre-change net operating losses (or NOLs) and its research and development credit carryforwards to offset
future taxable income. Our existing NOLs and research and development credit carryforwards may be subject to limitations arising from
previous ownership changes, and if we undergo an ownership change, our ability to utilize NOLs and research and development credit carryforwards
could be further limited by Sections 382 and 383 of the Code. In addition, our ability to deduct net interest expense may be limited
if we have insufficient taxable income for the year during which the interest is incurred, and any carryovers of such disallowed interest
would be subject to the limitation rules similar to those applicable to NOLs and other attributes. Future changes in our stock ownership,
some of which might be beyond our control, could result in an ownership change under Section 382 of the Code. For these reasons, in the
event we experience a change of control, we may not be able to utilize a material portion of the NOLs, research and development credit
carryforwards or disallowed interest expense carryovers, even if we attain profitability.

 If securities or industry analysts
do not publish research or reports about our business, or if they change their recommendations regarding our stock adversely, our stock
price and trading volume could decline.

 The trading market for our
common stock will be influenced by the research and reports that industry or securities analysts publish about us or our business. We
do not currently have and may never obtain research coverage by industry or financial analysts. If no or few analysts commence coverage
of us, the trading price of our stock would likely decrease. Even if we do obtain analyst coverage, if one or more of the analysts who
cover us downgrade our stock, our stock price would likely decline. If one or more of these analysts cease coverage of us or fail to
regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading
volume to decline.

 Anti-takeover provisions in our charter
documents and Nevada law could discourage, delay, or prevent a change in control of our company and may affect the trading price of our
common stock.

 We are a Nevada corporation,
and the anti-takeover provisions of the Nevada law may discourage, delay or prevent a change in control by, among other things: (i) prohibiting
us from engaging in a business combination with an interested stockholder for a period of three years after the person becomes an interested
stockholder, even if a change in control would be beneficial to our existing stockholders and (ii) making it more difficult to remove
our directors and officers, which might discourage transactions that could involve payment to stockholders of a premium over the market
price of our securities.

 In addition, our certificate
of incorporation, as amended, and our amended and restated bylaws may discourage, delay, or prevent a change in our management or control
over us that stockholders may consider favorable. In particular, our certificate of incorporation, as amended, and our amended and restated
bylaws, among other matters:

 •

 permit
 our Board of Directors to issue up to 5,000,000 shares of preferred stock, with any rights, preferences, and privileges as they may
 designate;

 •

 provide
 that all vacancies on our Board of Directors, including as a result of newly created directorships, may, except as otherwise required
 by law, be filled by the affirmative vote of a majority of directors then in office, even if there is less than a quorum;

 •

 provide that stockholders
 seeking to present proposals before a meeting of stockholders or to nominate candidates for election as directors at a meeting of
 stockholders must provide advance notice in writing, and also specify requirements as to the form and content of a stockholder's
 notice; and

 •

 do
 not provide for cumulative voting rights, thereby allowing the holders of a majority of the shares of common stock entitled to vote
 in any election of directors to elect all of the directors standing for election;

 The financial and operational projections that we may make from
time to time are subject to inherent risks.

 The projections that our management
may provide from time to time (including, but not limited to, those relating to potential peak sales amounts, product approval, production
and supply dates, commercial launch dates, and other financial or operational matters) reflect numerous assumptions made by management,
including assumptions with respect to our specific as well as general business, economic, market and financial conditions and other matters,
all of which are difficult to predict and many of which are beyond our control. Accordingly, there is a risk that the assumptions made
in preparing the projections, or the projections themselves, will prove inaccurate. There will be differences between actual and projected
results, and actual results may be materially different from those contained in the projections. The inclusion of the projections in
this Annual Report should not be regarded as an indication that we or our management or representatives considered or consider the projections
to be a reliable prediction of future events, and the projections should not be relied upon as such.

 We do not intend to pay dividends on our common stock.

 We have never declared or paid
any cash dividend on our common stock. We currently intend to retain any future earnings and do not expect to pay any dividends for the
foreseeable future. Therefore, you should not invest in our common stock in the expectation that you will receive dividends.

 Item 1B.

 Unresolved Staff Comments.

 None.

 Item 1C.

 Cybersecurity.

 In the normal course of our operations,
we engage third-party service providers to enhance our operational efficiency and customer service capabilities. One such provider is
Intuit Inc., which facilitates our credit card processing services. Our engagement with Intuit is governed by a framework of agreements
that emphasize data protection and cybersecurity as foundational elements. We rely on Intuit's robust security measures, which are designed
to protect the integrity and confidentiality of credit card transaction data. These measures include data encryption, fraud monitoring,
and compliance with the Payment Card Industry Data Security Standard (PCI DSS).

 While we have confidence in Intuit's
cybersecurity practices, we acknowledge that no system of data security can be guaranteed to be invulnerable. The potential risks associated
with our credit card processing operations include, but are not limited to, unauthorized access to or disclosure of customer data, financial
loss, and reputational damage. To mitigate these risks, we regularly review our cybersecurity policies and procedures and the cybersecurity
practices of our third-party providers, including Intuit. We also maintain cybersecurity insurance to provide an additional layer of
financial protection.

 Investors are advised that, despite
our efforts to ensure the security of customer data processed through Intuit, cybersecurity incidents can occur. In the event of a breach
or significant cybersecurity incident, our operations, financial condition, and reputation could be adversely affected. We are committed
to promptly addressing any such incidents, should they arise, in compliance with applicable laws and regulations.

 Item 2.

 Properties.

 Our principal office is leased
and located at 2660 N.W. 15 th Court, Unit 108, Pompano Beach, FL 33069. The lease is for approximately 1,500 square feet of
space, which includes our corporate office and our production floor. We do not believe the facility is adequate to support our current
operations, although we have and may continue to explore securing alternative or additional manufacturing or corporate facilities. As
of this filing the Company

 Item 3.

 Legal Proceedings.

 In the ordinary course of operations,
the Company may become a party to legal proceedings which could have a material adverse effect on our business, financial condition,
cash flows, or results of operations.

 From time to time, we may become
involved in legal proceedings that, individually or in the aggregate, could have a material adverse effect on our business, financial
condition, cash flows, or results of operations.

 As of the date of this report,
the Company has filed a lawsuit in the state of Florida against Upstate Custom Products, LLC. The lawsuit is based on the contract entered
into by both parties in August 2021 in relation to the manufacturing of the protrusion machines exclusively manufactured by Upstate Custom
Products, LLC. As of this filing the lawsuit and claim for relief is ongoing. As of this filing the lawsuit remains ongoing, and more
information can be located via the South District of Florida's website or registration via PACER.

 On or about October 2023, the
Company was served notice of a pending matter of litigation with GS Capital Partners of New York regarding the liquidated damages fees
from the 2021 PIPE investment. As of this filing, the matter remains unresolved.

 Due to our cash flow and liquidity
challenges, we have received demand letters from a number of vendors to our company seeking payment of past due amounts to such vendors.
As of the date of this report, such demands have not become formal litigations or other proceedings against our company, but they may
become litigations against us in the future.

 Except as set forth above, as
of the date of this report, we are not aware of any proceedings pending against our company.

 Item 4.

 Mine Safety Disclosures.

 Not Applicable.

 Item 5.

 Market for Registrant's
 Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

 Market Information and Number of Stockholders

 Our common stock is listed
on the OTCQB Market under the symbol "BASA", and it trades on a limited basis. The following table sets forth the range of
high and low closing sales prices of our Common Stock for the last two fiscal years.

 Quarters Ended

 High

 Low

 March
 31, 2023

 $
 0.04

 $
 0.04

 June
 30, 2023

 $
 0.05

 $
 0.04

 September
 30, 2023

 $
 0.04

 $
 0.04

 31, 2023

 $
 0.01

 $
 0.01

 March
 31, 2024

 $
 0.01

 $
 0.01

 June
 30, 2024

 $
 0.01

 $
 0.01

 September
 30, 2024

 $
 0.03

 $
 0.03

 31, 2024

 $
 0.06

 $
 0.04

 The
closing sales price on March 28, 2025, was $0.045 per
share. All quotations provided herein reflect inter-dealer prices, without retail mark-up, markdown, or commissions.

 In the event a public market
for our common stock is sustained in the future, sales of our common stock may be made by holders of our public float or by holders of
restricted securities in compliance with the provisions of Rule 144 of the Securities Act of 1933. In general, under Rule 144, a non-affiliated
person who has satisfied a six-month holding period in a fully reporting company under the Securities Exchange Act of 1934 may, sell
their restricted Common Stock without volume limitation, so long as the issuer is current with all reports under the Exchange Act in
order for there to be adequate public information disclosed. Affiliated persons may also sell their common shares held for at least six
months, but affiliated persons will be required to meet certain other requirements, including manner of sale, notice requirements and
volume limitations. Non-affiliated persons who hold their common shares for at least one year will be able to sell their shares without
the need for there to be current public information in the hands of the public. Future sales of shares of our public float or by restricted
common stock made in compliance with Rule 144 may have an adverse effect on the then prevailing market price, if any, of our common stock.

 As of March 28, 2025, there
were 278 holders of record of our common stock. In addition, we believe that a significant number of beneficial owners of our common stock
hold their shares in nominee or in "street name" accounts through brokers, and any such beneficial owners are not included
in this number of holders of record.

 Dividend Policy

 We have never declared or paid
cash dividends on our common stock. We currently do not anticipate paying any cash dividends or other dividends for the foreseeable future.
Any future determination to declare cash dividends will be made at the discretion of our board of directors, subject to applicable laws,
and will depend on our financial condition, results of operations, capital requirements, general business conditions and other factors
that our board of directors may deem relevant.

 Repurchases of Common Stock

 Not applicable.

 Unregistered Sales of Equity Securities

 All of the issuances referred
to in this section were issued pursuant to exemptions from registration under the Securities Act of 1933, as amended and provided for
under Section 4(a)(2) or Regulation D under such Act.

 Issuances in the first quarter of 2025

 None.

 Issuances 2024

agreed to become the Acting Chief Executive Officer of Basanite, Inc. (the "Company") through June 30, 2025. As an independent
contractor, Mr. Manav has been performing advisory services to our Company since September 1, 2024. Mr. Manav's services to the
Company will be at a monthly salary of $17,250 plus expenses approved by the Chairman. The monthly salary of $17,250 will be deferred
and accrued until such time as $1,000,000 is raised by the Company and at which time any deferred compensation will be paid immediately
to him. Upon $1,000,000 being raised by the Company, the Company will also pay Mr. Manav his monthly salary on the first day of each
month through June 2025. Mr. Manav also received options to purchase 5 million shares of the Company's common stock with a strike
price of $.0275 equal to the closing price of the Company's common stock as quoted by the OTCQB Market on the date of signing his
engagement letter. The option will have a term of five years from the date of issuance. The options will also contain standard cashless
exercise provisions as well as piggy-back registration rights for future stock registrations that the Company may file. The options vest
under the following schedule: 1.5 million options immediately upon the execution of his engagement agreement, 1.5 million options vest
upon the completion of a minimum of $1 million of aggregate financing into the Company after the date of his engagement letter and 2
million options vesting upon the anniversary of the first 90-day period the Company achieves operational break even as defined in the
engagement letter. Mr. Manav received $25,000 upon execution of the engagement letter for work conducted in September of 2024. As an
independent contractor, Mr. Manav is not entitled to receive any employee benefits. The engagement letter will automatically terminate
no later than June 30, 2025, unless the Company and Mr. Manav mutually agree on an extension. As of this filing Mr. Manav has transitioned
to an operational executive role in preparation for our forthcoming manufacturing facility in Twinsburg, Ohio.

 On
October 2, 2024, Steve Heard agreed to become an advisor to the Board of Directors of Basanite, Inc. (the "Company") through
June 30, 2025. As an independent contractor, Mr. Heard will advise the Board of Directors and Management of the Company on matters relating
to capital markets, investor relations, and business development and introduce potential strategic partners and investors to the Company.
A one-time fee of $37,500 will be deferred and accrued until such time as $1,000,000 is raised by the Company and which time any deferred
compensation will be paid immediately to him. Mr.
Heard also received options to purchase 7.5 million shares of the Company's common stock with a strike price of $.0275 equal to
the closing price of the Company's common stock as quoted by the OTCQB Market on the date of signing his engagement letter. The
option will have a term of five years from the date of issuance. The options will also contain standard cashless exercise provisions
as well as piggy-back registration rights for future stock registrations that the Company may file. The options vest under the following
schedule: 3.75 million options immediately upon the execution of his engagement agreement, 3.75 million options vest upon the completion
of a minimum of $1 million of aggregate financing into the Company after the date of his engagement letter. As an independent contractor,
Mr. Heard is not entitled to receive any employee benefits. The engagement letter will automatically terminate no later than June 30,
2025, unless the Company and Mr. Heard mutually agree on an extension.

 On
October 2, 2024, Maxwell J. Heard agreed to become an advisor to the Board of Directors of Basanite, Inc. (the "Company")
through June 30, 2025. As an independent contractor, Mr. Heard will advise the Board of Directors and Management of the Company on matters
relating to capital markets, investor relations, and business development and introduce potential strategic partners and investors to
the Company. A one-time fee of $12,500 will be deferred and accrued until such time as $1,000,000 is raised by the Company and which
time any deferred compensation will be paid immediately to him. Mr.
Heard also received options to purchase 2.5 million shares of the Company's common stock with a strike price of $.0275 equal to
the closing price of the Company's common stock as quoted by the OTCQB Market on the date of signing his engagement letter. The
option will have a term of five years from the date of issuance. The options will also contain standard cashless exercise provisions
as well as piggy-back registration rights for future stock registrations that the Company may file. The options vest under the following
schedule: 1.25 million options immediately upon the execution of his engagement agreement, 1.25 million options vest upon the completion
of a minimum of $1 million of aggregate financing into the Company after the date of his engagement letter. As an independent contractor,
Mr. Heard is not entitled to receive any employee benefits. The engagement letter will automatically terminate no later than June 30,
2025, unless the Company and Mr. Heard mutually agree on an extension.

 On October 2, 2024, Frederick
Berndt agreed to become an advisor to the Board of Directors of Basanite, Inc. (the "Company") through June 30, 2025. As
an independent contractor, Mr. Berndt will advise the Board of Directors and Management of the Company on matters relating to capital
markets, investor relations, and introduce potential strategic partners and investors to the Company. A one-time fee of $50,000 will
be deferred and accrued until such time as $1,000,000 is raised by the Company and which time any deferred compensation will be paid
immediately to him. Upon $1,000,000 being raised by the Company, the Company will also pay Mr. Berndt a monthly fee of $7500 on the first
day of each month for the remaining months of the contract through June 2025. Mr. Berndt also received options to purchase 10 million
shares of the Company's common stock with a strike price of $.0275 equal to the closing price of the Company's common stock
as quoted by the OTCQB Market on the date of signing his engagement letter. The option will have a term of five years from the date of
issuance. The options will also contain standard cashless exercise provisions as well as piggy-back registration rights for future stock
registrations that the Company may file. The options vest under the following schedule: 3 million options immediately upon the execution
of his engagement agreement, 3 million options vest upon the completion of a minimum of $1 million of aggregate financing into the Company
after the date of his engagement letter and 4 million options vesting upon the anniversary of the first 90-day period the Company achieves
operational break even as defined in the engagement letter. Mr. Berndt is not entitled to receive any employee benefits. The engagement
letter will automatically terminate no later than June 30, 2025, unless the Company and Mr. Berndt mutually agree on an extension.

 Item 6.

 Reserved.

 Item 7.

 Management's Discussion and Analysis of Financial
 Condition and Results of Operation.

 You should read the following
discussion and analysis together with the consolidated financial statements and the related notes to those statements included in "Item
8 – Consolidated Financial Statements and Supplementary Data." The discussion contains forward-looking statements that involve
risks and uncertainties. As a result of many factors, such as those set forth under "Risk Factors" and elsewhere in this
Annual Report on Form 10-K, our actual results may differ materially from those anticipated in these forward-looking statements.

 Overview

 The following is a high-level
discussion of our operating results and some of the trends that affect our business. We believe that an understanding of these trends
is important to understand our financial results for the years ended December 31, 2024, and 2023. This summary is not intended to be
exhaustive, nor is it intended to be a substitute for the detailed discussion and analysis provided elsewhere in this Annual Report,
and our audited and unaudited consolidated financial statements and accompanying notes included in this Annual Report.

 On May 30, 2006, our company
was formed as a Nevada corporation under the name Nevada Processing Solutions, Inc. Currently, through our wholly owned subsidiary, Basanite
Industries, LLC, a Delaware limited liability company ("BI"), we manufacture a range of "green" (environmentally
friendly), sustainable, non-corrosive, lightweight, composite products used in concrete reinforcement by the construction industry. Our
core product is BasaFlex, a basalt fiber reinforced polymer reinforcing bar ("rebar") which we believe is a stronger,
lighter, sustainable, non-conductive, and corrosion-proof alternative to traditional steel.

 Our two other main product
lines are BasaMix, which are fine denier basalt fibers available in various chopped sizes, and BasaMesh, a line of Basalt
Geogrid Mesh Rolls, intended to replace welded wire mesh (made of steel) and other fiber reinforced polymer grids and mesh.

 While we believe our products
have great market potential and have begun to gain some acceptance in the market (as evidenced by the beginning of revenue growth which
occurred in 2021 as discussed below), we are currently conducting relatively limited operations due to a lack of adequate funding and
manufacturing facilities. We are working to secure additional funding and a new manufacturing facility in Ohio to meet what we believe
will be increasing demand for our products, but until such funding is obtained, there will remain substantial doubt regarding our ability
to continue as a going concern.

 Material Factors Impacting Our Operations

 Inflation & Interest Rate Sensitivity

 In the past fiscal years, inflation
has not had a significant impact on our business. However, during the second half of 2021, throughout 2024, the U.S. economy has entered
into a period of increasing inflation. Should inflation persist or increase, interest rates rise and could have a significant effect
on the economy in general and, thereby, could affect prices for raw materials we use, demand for our products, our ability to attract
and retain skilled labor and our future operating results.

 Supply Chain

 In the past year, supply chain
shortages or delays have had an immaterial impact on our operations. Relationships with our raw materials suppliers have maintained a
consistent flow of goods received monthly. Domestic suppliers have increased their in-stock flows to maintain adequate levels for our
manufacturing needs. However, we might experience supply chain challenges in the future, which could harm our business and our results
of operations.

 War in Ukraine

 The recent war in Ukraine has
led the world to issue sanctions on the government of Russia. This has shut down our ability to procure basalt fiber material from our
primary supplier, BWF. Nonetheless, we are currently qualifying alternate material from other suppliers to preserve our options.

 Government Approvals and Specifying of our Products

 We continue to pursue additional
product and facility qualifications and approvals, and these qualifications and approvals are critical to the market acceptance of our
products. BI is currently testing products at two independent laboratories and received ICC-ES certification, which was granted in the
second quarter of 2023, and a Florida Department of Transportation ("FDOT") production facility and product approval, which
was also granted in the second quarter of 2023 (we are already selling to FDOT projects on an individual basis through exemptions or
specs). The FDOT approval will allow us to bid on any project approved for BFRP. We anticipate that with these two approvals the prospects
of new projects will increase.

 Results of Operations

 Revenue
– We had $434,275 of revenues as a result of sales of finished goods sold for the year ended December 31, 2024, compared to
$317,665 in the prior year. While the increase in revenue in the year over year periods was material due to our ability to sell some
BasaMix product in 2024, overall revenues have been minimal due to our lack of funding and as a result of our limited manufacturing
capabilities as we await the new BasaMax equipment.

 Cost
of Goods Sold – During the year ended December 31, 2024, we had cost of sales of $172,191 compared to $167,223 in the prior
year. During 2024, the company lost money on a gross margin basis due to normal inefficiencies in the start-up and ramping and scaling
process, including limited initial sales volume, and further due to extremely narrow margins on the initial sales of our products as
we began introducing them to the marketplace as well as limited manufacturing capabilities.

 Operating Expenses

 Selling, General, and Administrative
Expenses – During the year ended December 31, 2024, selling, general, and administrative were $1,067,059 compared to $1,302,699
in the prior year. The primary components of selling, general, and administrative expenses were as follows:

 •

 Payroll
 and Payroll Taxes – During the year ended December 31, 2024, payroll and payroll taxes were $249,092 compared to $260,377
 in the prior year. We retained a total of 2 employees during the period ending December 31, 2024, and 2023, respectively.

 •

 Professional
 Fees – During the year ended December 31, 2024, professional fees were $212,551 compared to $114,730 in the prior year.
 The increase was primarily due to the increase in activities regarding legal and compliance fees in relation to litigation and fundraising
 activities in the prior year.

 •

 Consulting
 Fees – During the year ended December 31, 2024, consulting fees were $126,250 compared to $248,291 in the prior year. The
 decrease was due to the number of consulting agreements and accrual models of agreements with our prior Acting Interim Chief Executive
 Officer, Ali Manav.

 •

 Facilities
 and Related Costs – During the year ended December 31, 2024, costs related to our facilities were $37,352 compared to $40,191.
 These costs consisted primarily of rent in the amount of $36,315 and utilities in the amount of $737.

 •

 Depreciation and Amortization
 – During the year ended December 31, 2024, depreciation and amortization was $120,259 compared to $127,967 in the prior
 year.

 Other Income (Expenses)

 Interest Expense - During
the year ended December 31, 20234, interest expense was $924,767 compared to $566,429 in the prior year. The increase is primarily due
to an increase in the principal amount of debt outstanding during the current period.

 Liquidity and Capital Resources

 Since the inception, we have
incurred net operating losses and generated negative cash flows in operations. As of December 31, 2024, we had an accumulated deficit
of $57,991,785. On December 31, 2024, we had cash of $82,222 compared to $55,248 at December 31, 2023, and as of the date of this Annual
Report, we have minimal cash on hand, and any funds we can presently raise (either from revenue generating operations or through investment)
are rapidly consumed.

 Also,
we have incurred and continue to incur significant general and administrative and other expenses associated with our product development
and the establishment and proposed expansion of our manufacturing facility, beginning revenue generating operations, developing our business
model, stock-based compensation and operating as a public company. We expect operating losses to continue for the foreseeable future,
and we presently require and expect to continue to require substantial additional financing for continued support
of our BFRP manufacturing business until we generate
sufficient revenues to achieve positive cash flow.

 Furthermore, we currently owe
approximately $2,144,357 plus $964,961 of accrued interest under a 20% Convertible Promissory Note held by The Richard A. LoRicco Sr.
and Lucille M. LoRicco Irrevocable Insurance Trust DTD 4/28/95, which is a related party associated with our director Ronald LoRicco.
This note matured on February 12, 2024, and as of the date of this Annual Report, no event of default has been called by the note holder.

 In addition, throughout 2024,
we entered into several simple Promissory Notes with certain related parties and their associates for total proceeds $378,000. These
notes each carried a 12-month term of interest between 10% to 20% simple interest and are now due or about to come due. The accumulated
interest under all outstanding notes is currently approximately $697,119. Given our limited cash resources at this time, we have been
unable to repay this indebtedness. While we may seek to extend the maturity dates of this indebtedness, we may be unsuccessful in doing
so. If all or any of these note holders elect to call an event of default under these notes, we may have increased difficulty raising
additional funds and we could be forced into bankruptcy.

 All of these conditions raise substantial doubt about our ability
to continue as a going concern.

 We have historically satisfied
our working capital requirements through the sale of restricted common stock and the issuance of warrants and promissory notes. We will
continue our fundraising efforts until we have obtained positive cash flow to cover our expenses. No assurances can be given that the
Company will be successful in raising future capital.

 Notwithstanding proceeds from
the sale of our common stock in early 2022, the current working capital and projected sales revenue are insufficient to maintain our
current operations. In order to scale up our manufacturing operations and reach a level of sales revenue sufficient to provide positive
cash flow, we require funding of about 6 million dollars for both our expansion plan and our operating deficit through the scaling period.
We will attempt to raise this capital through third party financing, including a private placement and/or public offering of our securities
as well as bridge loan arrangements. We cannot provide any assurances that the required capital will be obtained or if financing is available,
that the terms of such required financing may be acceptable to us. If we are unable to obtain adequate financing, we may reduce our operating
activities to reduce our cash use until sufficient funding is secured, and our business might fail.

 Cash Flows

 Net cash used in operating
activities amounted to $1,184,677 and $1,055,849 for the years ended December 31, 2024, and 2023, respectively. During the year ended
December 31, 2023, we received $0 net cash for investing activities throughout 2024 and 2023, respectively.

31, 2024, we had $0 net cash provided by financing activities remaining the same as year-end December 31, 2023.

 Summary of Critical Accounting Policies

 Inventory

 The Company's
inventories consist of raw materials, work in process and finished goods, both purchased and manufactured. The Company does not possess
at present any inventories from which to manufacture or sell finished goods.

 Use of Estimates

 The preparation of the accompanying
Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America, or GAAP,
requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the Consolidated Financial Statements and reported amounts of expenses during the
reporting period. Actual results could differ from those estimates.

 Stock-based
compensation and stock awards related to convertible debt instruments are recognized based on the fair value of the awards granted. The
fair value of each award or conversion feature is estimated on the grant date using the Black-Scholes pricing model. The Black-Scholes
pricing model requires the input of highly subjective assumptions, including the fair value of the underlying common stock, the expected
term of the option, the expected volatility of the price of our common stock, risk-free interest rates and the expected dividend yield
of our common stock. The assumptions used to determine the fair value of the stock awards represent management's best estimates.
These estimates involve inherent uncertainties and the application of management's judgment.

 Recent Accounting Pronouncements

 There are several new accounting
pronouncements issued or proposed by the FASB. Each of these pronouncements, as applicable, has been or will be adopted by us. Management
does not believe any of these accounting pronouncements has had or will have a material impact on our consolidated financial position
or operating results. See note 3 to the accompanying audited financial statements for further information.

 Item 7A.

 Quantitative and Qualitative Disclosures About Market
 Risk.

 Not applicable.

 Item 8.

 Financial Statements and Supplementary Data.

 The requirements of this Item can be found beginning on page
F-1 found elsewhere in the Annual Report.

 Item 9.

 Changes in and Disagreements with Accountants on
 Accounting and Financial Disclosure.

 None.

 Item 9A.

 Controls and Procedures.

 Disclosure Controls and Procedures

 We maintain disclosure controls
and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
that are designed to be effective in providing reasonable assurance that information required to be disclosed in our reports under the
Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and
that such information is accumulated and communicated to our management to allow timely decisions regarding required disclosure.

 Our management, under
the supervision and with the participation of our Acting Interim Chief Executive Officer, President and Acting interim Chief Financial
Officer, carried out an evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures
(as defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act) as of December 31, 2024 and determined that the controls and procedures
over financial reporting were not effective.

 Management's Annual Report on Internal Control over Financial
Reporting

 Our management is responsible
for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting, as defined
in rules promulgated under the Exchange Act, is a process designed by, or under the supervision of, our Acting Interim Chief Executive
Officer and Acting Interim Chief Financial Officer and effected by our Board of Directors, management and other personnel to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of Consolidated Financial Statements for external
purposes in accordance with GAAP. Internal control over financial reporting includes those policies and procedures that:

 •

 Pertain to the maintenance of records that in reasonable
 detail accurately and fairly reflect the transactions and dispositions of our assets;

 •

 Provide
 reasonable assurance that transactions are recorded as necessary to permit preparation of Consolidated Financial Statements in accordance
 with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and our
 Board of Directors; and

 •

 Provide reasonable assurance regarding prevention or
 timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our Consolidated
 Financial Statements.

 Internal control over financial
reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations. Internal
control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns
resulting from human failures. Internal control over financial reporting can also be circumvented by collusion or improper override.
Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal
control over financial reporting. However, these inherent limitations are known features of the financial reporting process, and it is
possible to design safeguards into the process to reduce, though not eliminate, this risk.

 Our management assessed the
effectiveness of our internal control over financial reporting as of December 31, 2024. In making its assessment, management used the
criteria established by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO, in its 2013 Internal Control —
Integrated Framework. Based on its assessment, management has concluded that our internal control over financial reporting has material
weaknesses and is not effective as of December 31, 2024. The weaknesses consist of an overall lack of a sufficient control environment
to produce materially correct financial statements, including a lack of US GAAP expertise for the types of transactions we have been
involved in, a lack of segregation of duties, and a lack of entity level controls due to no independent audit committee.

 As a result of the identified
material weaknesses, we are working to establish a remediation plan which includes hiring additional resources creating an independent
audit committee and engaging outside consultants as needed to assist in the evaluation of non-recurring and unusual transactions and
to increase the capacity of our accounting department to serve operational, compliance and reporting needs.

 Changes in Internal Control over Financial Reporting

 Except as noted above, no change
in our system of internal control over financial reporting occurred during the period covered by this report that has materially affected,
or is reasonably likely to materially affect, our internal control over financial reporting.

 Item 9B.

 Other Information.

 Insider Rule 10b-5 Trading Plans

 During the quarter ended December
31, 2024, no director or officer of the Company adopted or terminated a contract, instruction or written plan for the purchase or sale
of securities of the Company intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) and/or a non-Rule 10b5-1 trading
arrangement.

 Item 9C.

 Disclosure Regarding Foreign Jurisdictions that
 Prevent Inspections.

 Not applicable.

 Item 10.

 Directors, Executive Officers, and Corporate Governance.

 Directors and Executive Officers

 The following table sets
forth certain information regarding our executive officers and directors as of the date of this Form 10-K. Directors are elected annually
and serve until the next annual meeting of shareholders or until their successors are elected and qualified. Executive officers are appointed
by our Board of Directors and their term of office is at the discretion of our Board.

 Name

 Age

 Position

 Frederick H. Tingberg, Jr.

 Chief Technology Officer
 & Director

 Ali Manav

 Acting Interim Chief Executive
 Officer

 Jackie Placeres

 Acting Interim Chief Financial
 Officer

 Acting Interim Chief Executive
 Officer & Chairman of the Board

 Manuel A. Rodriguez

 Biographical Summaries of Directors and Executive Officers

 The following are biographical summaries of the experience of
our directors and executive officers:

 Frederick H. Tingberg, Jr.,
66, has served as a member of the Board of Directors since December 2021. Mr. Tingberg is a construction industry executive with
extensive experience in leading construction and rehabilitation projects. Since 2020, Mr. Tingberg has served as the Chief Executive
Officer of his own construction industry consulting company, Technicon Consulting Group, and since 1993, he has served both in two capacities
with Lanzo Corporation, an infrastructure construction company, first as Business Development Manager and since 2018 as Chief Operating
Officer. At Lanzo, Mr. Tingberg oversaw underground infrastructure construction project operations leading 160 total staff in completing
over 20 projects annually. His responsibilities included overseeing safety, environmental compliance, proposals, hard dollar bonded bidding,
material selection, purchasing, financial controls, budgeting, and contracts with strategic partners. From 1984 to 1993, he served as
Regional Pipe & Supply Area Manager for SEMSCO, a division of Clayton Group. Mr. Tingberg holds several state general contractor
licenses and he received a B.S. degree in Materials Engineering from Rensselaer Polytechnic Institute.

 Ali Manav, age 55, in
the past five years served as Director of Operation of GEX Management for approximately one year and as a Chief Operating Officer and
Board Member of Innovest Global for approximately four years. Mr. Manav is a seasoned business professional that has over 30 years of
business experience in a multitude of industries including building materials, banking, IT, healthcare, and manufacturing. Mr. Manav
is a specialist in lean manufacturing and has displayed his abilities to take companies from start-up to commercialization throughout
his career. Mr. Manav holds an MBA in Management and Entrepreneurialism from the Weatherhead School of Management at Case Western
Reserve University (1998) and has a bachelor's in business administration with majors in Accounting and Finance from the James B.
Nance College of Business Administration at Cleveland State University.

 Jackie Placeres, 44,
previously served as the Company's Controller since 2021. Ms. Placeres previously served as the Chief Financial Officer to ISG,
a private government contractor in security and informational technologies from 2018 through May 2021. From 2014 to 2018, she served
as Vice President of Smith Manufacturing growing the Company from 4 million to 18 at the time of acquisition. The Board selected Ms.
Placeres to serve as the Company's Acting Interim Chief Financial Officer because of her long-standing relationship with the Company
and because of her accounting and public company reporting experience.

 Ronald J. LoRicco, Sr.,
60, has served as a member of our Board of Directors since June 2017. Mr. LoRicco is an attorney practicing in the areas of civil
litigation, insurance defense, criminal law, estate planning and administration and workers' compensation. He is also admitted to practice
the United States District Court for the District of Connecticut. Mr. LoRicco is a member of the American, Connecticut, and
New Haven Bar Associations, American Trial Lawyers Association and Connecticut Trial Lawyers Association. He attended Fairfield University
where he received a Bachelor of Arts degree in 1986. He received a Juris Doctor degree from Quinnipiac College School of Law, formerly
known as the University of Bridgeport School of Law, in 1989. On April 11, 2024, the Board of Directors, through a vote of Unanimous
Written Consent appointed Mr. Ronald LoRicco, Sr, 59, to serve as the Acting Interim Chief Executive Officer before exiting
the role September 30, 2024.

 Paul M. Sallarulo,
68, has served as a member of our Board of Directors since April 2017.
He served as Chairman of the Board, President and CEO of Nexera Medical Inc. from July 2006 through 2015. Previously, Mr. Sallarulo had
an extensive financial career in capital markets and investment banking in senior positions with Wachovia Securities, where he was the
Senior Vice President from July 2003 through June 2006 and Prudential Securities, where he served as Senior Vice President from October
2001 through July 2003. Additionally, Mr. Sallarulo served as Vice President at Meridian Capital Markets from February 1991 to August
1996. Mr. Sallarulo was appointed Commissioner of the North Broward Hospital District by Florida Governor Jeb Bush for two four-year terms
beginning in January of 1999. While there, he oversaw four major hospitals, thirty-eight clinics, six thousand professionals, and a budget
in excess of $2 billion, and served as Chairman of the Legal Review Committee from 2002 to 2005, Joint Conference Committee from 2004
to 2006, Broward Health Foundation from 2002 through 2004, Community Relations Committee for Broward General Hospital from 2002 to 2004,
and Community Relations Committee for Imperial Point Medical Center from 2005 to 2006, respectively. Mr. Sallarulo served on the Board
of Directors of Foss Manufacturing, LLC Company, Board of Trustees of Nova Southeastern University, Chairman of the Board of Governors
of Nova Southeastern University - Wayne Huizenga School of Business, President of the International Alumni Association of NSU, Nova Southeastern
University College of Dental Medicine Advisory Board, and was inducted as the first Honorary member into Sigma Beta Delta Society –
International Honor Society in Business, Management and Administration. Mr. Sallarulo also served as a member of the Planning and Zoning
Board of Fort Lauderdale, Broward County Personal Advisory Board Fort Lauderdale, the Fort Lauderdale Marine Advisory Board, and the Economic
Development Advisory Board. Mr. Sallarulo was Co-Founder of Broward Bank of Commerce and served on the Board of Directors. Mr. Sallarulo
assisted in the sale of Broward Financial Holdings, the parent company of Broward Bank of Commerce, to Home BancShares, parent company
of Centennial Bank in 2014. Mr. Sallarulo currently serves on the Regional Board of Directors of Centennial Bank and serves on the Loan
Committee and Strategic Planning Committee. Mr. Sallarulo received his M.B.A from Nova Southeastern University in 1984. Previously, Mr.
Sallarulo attended Bernard Baruch College from 1978 to 1981 where he obtained his bachelor's in business administration and attended
SUNY Adirondack between 1975 and 1977, where he obtained his Associate of Applied Science degree.

 Adam Falkoff, 57, has
served as a member of the Board of Directors since September 2020. Mr. Falkoff has over 20 years of experience in public policy, international
relations, and business development. He has advised CEOs of the Fortune 100, Presidents, Prime Ministers, Cabinet Ministers and Ambassadors.
Mr. Falkoff served as the President of CapitalKeys, a bipartisan global public policy and strategic consulting firm based in Washington
D.C. Mr. Falkoff is a recipient of the Ellis Island Medal of Honor, one of the nation's highest honors, for achievement and inspired
service to the United States. He was twice named to the Washington, D.C. Power 100, a list of the 100 most influential non-elected people
in Washington, D.C. Mr. Falkoff currently holds blue badge Consultative Status accreditation with the United Nations. He is a member
of the Board of Directors for several publicly listed companies, the American Red Cross-National Capital Region, and the Creative Coalition.
He serves on the Advisory Board for the Ellis Island Honors Society and is an Atlantic Council Councilor, a member of the Wilson Center
Global Advisory Council, a member of the Bretton Woods Committee, a Center for a New American Security (CNAS) Board of Advisors member,
a member of the international Council at the Harvard Kennedy School of Government Belfer Center, a lifetime member of The Council on
Foreign Relations and a member of The Trilateral Commission.

 Mr. Falkoff received a
B.A. from Duke University and both an M.B.A. and M.I.M. (Master of International Management) from the Thunderbird School of Global Management.
Mr. Falkoff holds a Certificate in International Law from the University of Salzburg, Institute on International Legal Studies.
In 2023, he completed the Commandant's National Security Program at the U.S. Army War College.

 Manuel
A. Rodriguez, 63, has served as a member of the Board of Directors since December 2021. Since 2004, Mr. Rodriguez as served
as a Vice President of Concrete Products of the Palm Beaches, Inc. and the President of each of U.S. Supplies, Inc. and U.S. Construction
Supply, Inc. In these capacities, Mr. Rodriguez leads these companies in all of their principal activities, including concrete product
manufacturing and distribution both nationally and internationally, as well as environmental engineering services. Since 2003, he has
also served as a Vice President of Beton Brunet, an infrastructure products and services company, where he overseas Southeastern United
States operations. Earlier in his career, Mr. Rodriguez held several positions in the construction industry, including as a General Manager
of Tri-County Concrete (1992 to 2003), Master Electrician with Stallion Electric (1989 to 1992) and a Geologist with Star Petroleum (1986
to 1989). Mr. Rodriguez is a certified master electrician in the State of Florida and is associated with several construction and concrete
industry trade groups. He earned his B.S. degree in Geology from the University of Florida.

 Sergio S. Salani, 56,
has served as a member of the Board of Directors since August 2022. Mr. Salani is a seasoned entrepreneur with experience in finance,
law, real estate and technology. From 2016 to the present, Mr. Salani has served as the founder, Chief Executive Officer and General
Counsel of Stoneway Group, L.L.C., an advisory firm providing services with regard to legal, finance and real estate matters, international
transactions, specialty finance, technology, commercial real estate investment management and investments in the energy sector. Also,
from 2016 to the present, Mr. Salani has served as co-founder and Chief Executive Officer of Ubii.com, a digital marketplace that was
launched in February 2021. From 2011 to 2016, he served as co-founder and Chief Executive Officer of Oxford International Group, L.L.C.,
a privately held financial firm that acquires high credit quality, highly illiquid assets which was sold to an affiliate of Blackstone
Group. From 1997 to 2011, Mr. Salani served as partner, legal counsel and Senior Vice President of Peachtree Settlement Funding, L.L.C.,
an originator of specialty finance receivables such as structured settlements, lottery payment receivables and life settlements, where
he was instrumental in building the company from a start-up to a 480 employee operation and in taking it public in 2006 on London's AIM
Market, a sub-market of the London Stock Exchange. Mr. Salani received a Bachelor of Arts in Finance and Economics as well as a Master
of Business Administration degree from Drexel University and a Juris Doctor from Temple University. He is a member of the bars of Florida
and the District of Columbia.

 Corporate Governance Profile

 Our Board of Directors
consists of six members. The terms of directors expire at the next annual shareholders' meeting unless their terms are staggered
as permitted in our Bylaws. Each shareholder is entitled to vote the number of shares owned for as many persons as there are directors
to be elected. Shareholders do not have a right to cumulate their votes for directors.

 Committees of the Board of Directors

 We currently have an audit committee,
a compensation committee, and a nominating and corporate governance committee. We have not adopted charters for our audit or compensation
committees to date. The table below provides our committee members.

 Committee

 Chairman

 Board Members

 Audit

 X

 Compensation

 X

 Nominating and Corporate Governance

 X

 Audit Committee

 Our Board of Directors currently
does not have an "audit committee financial expert" serving on its audit committee. Our Board of Directors is currently in
the process of seeking to obtain a qualified individual which meets the definition of "audit committee financial expert".

 Director Compensation

 The following table provides
information concerning the compensation of our Board members for their services as members of our Board of Directors for 2024 and 2023.
The value attributable to any option awards is computed in accordance with FASB ASC Topic 718. The assumptions made in the valuations
of the option awards are included in Note 11 of the Notes to our Financial Statements for the year ended December 31, 2024 and 2023 appearing
elsewhere in this Annual Report.

 For the year ended December 31, 2024:

 Name

 Fees
 earned or paid in cash

 Warrant
 Awards

 Option
 Awards

 Non-equity
 Incentive Plan Compensation

 Nonqualified
 Deferred Compensation Earnings

 All
 other Compensation

 Total

 Paul Sallarulo

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 Manuel Rodriguez

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 Ronald J. LoRicco

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 For the year ended December 31, 2023:

 Name

 Fees
 earned or paid in cash

 Warrant
 Awards

 Option
 Awards

 Non-equity
 Incentive Plan Compensation

 Nonqualified
 Deferred Compensation Earnings

 All
 other Compensation

 Total

 Paul Sallarulo

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 Manuel Rodriguez

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 Ronald J. LoRicco

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 Family Relationships

 There are no family relationships between any of our directors
or executive officers.

 Involvement in Certain Legal Proceedings

 None of our directors or executive
officers has been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors, or has been a party to any
judicial or administrative proceeding during the past ten years that resulted in a judgment, decree or final order enjoining the person
from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal
or state securities laws, except for matters that were dismissed without sanction or settlement. Except as set forth in our discussion
below in "Certain Relationships and Related Transactions", none of our directors, director nominees or executive officers
has been involved in any transactions with us or any of our directors, executive officers, affiliates or associates which are required
to be disclosed pursuant to the rules and regulations of the SEC.

 Code of Ethics

 Our Board has adopted a Code
of Ethics that applies to all of our employees, including our officers. The Code of Ethics also applies to our directors. The Code of
Ethics provides written standards that we believe are reasonably designed to deter wrongdoing and promote honest and ethical conduct,
including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships, full, fair,
accurate, timely and understandable disclosure and compliance with laws, rules and regulations, including insider trading, corporate
opportunities and whistle-blowing or the prompt reporting of illegal or unethical behavior. A request for a copy can be made in writing
to Basanite, Inc., 2660 N.W. 15 th Court, Pompano Beach, FL 33069, Attention: Mr. Ronald LoRicco, Sr., Chairman.

 Shareholder Communications

 Although we do not have a formal
policy regarding communications with our Board, shareholders may communicate with the Board by writing to us at Basanite, Inc., 2660
N.W. 15 th Court, Pompano Beach, FL 33069. Attention: Mr. Ronald LoRicco, Sr., Chairman. Shareholders who would like their
submission directed to a member of the Board may so specify and the communication will be forwarded, as appropriate.

 Section 16(a) Beneficial Ownership Reporting Compliance

 Section 16(a) of the Exchange
Act requires our directors and executive officers, and persons who beneficially own more than 10% of a registered class of our equity
securities, to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and the other equity
securities. Officers, directors and 10% beneficial owners are required by SEC regulations to furnish us with copies of all Section 16(a)
forms they file. Based solely on a review of the copies of the forms furnished to us, we believe that all filing requirements were complied
with during 2024.

 Item 11.

 Executive Compensation.

 The following table summarizes all compensation recorded by us
in the last two completed fiscal years for:

 •

 Our principal executive officer or other individual
 serving in a similar capacity;

 •

 Our two most highly compensated
 executive officers other than our principal executive officer who were serving as executive officers at December 31, 2024 as that
 term is defined under Rule 3b-7 of the Securities Exchange Act of 1934; and

 •

 Up to
 two additional individuals for whom disclosure would have been required but for the fact that the individual was not serving as an
 executive officer on December 31, 2024.

 For definitional purposes, these individuals are sometimes referred
to as the "named executive officers".

 Name

 Years

 Salary
 ($)

 Warrant
 Awards ($)

 Option
 Awards ($)

 Other
 Compensation ($)

 Total

 ($)

 Thomas Richmond (1)

 2023

 $
 —

 $
 —

 $
 —

 $
 216,667

 $
 216,667

 Former President and

 2024

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 Chief Executive Officer

 Jackie
 Placeres (2)

 2023

 $
 175,000

 $
 —

 $
 —

 $
 —

 $
 175,000

 Acting Interim
 Chief Financial Officer

 2024

 $
 175,000

 $
 —

 $
 —

 $
 —

 $
 175,000

 Ali
 Manav (3)

 2023

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 Acting Interim Chief Executive Officer

 2024

 $
 —

 $
 —

 $
 —

 $
 25,000

 $
 —

 (1)

 On December 31, 2023, Mr. Richmond declined to renew
 his consulting agreement.

 (2)

 On December 15, 2022, Mrs. Placeres transitioned
 to the role of Acting Interim Chief Financial Officer from Controller for the Company.

 (3)

 On October 2, 2024, Mr. Manav was appointed to the role
 of Acting Interim Chief Executive Officer. As of this filing Mr. Manav has transitioned to an operational executive role in preparation
 for our forthcoming manufacturing facility in Twinsburg, Ohio.

 Employment Agreement with Thomas Richmond

 We entered into an employment
agreement, dated April 6, 2023, with Thomas Richmond to serve as our Acting Interim Chief Executive Officer. Thomas Richmond has been
appointed as the acting Chief Executive Officer of Basanite as an independent contractor until August 31, 2023. The company will pay him
a monthly salary of $12,500 and he will also receive one million shares of restricted common stock and five warrants to purchase four
million shares of common stock, exercisable at $.045 per share. Richmond will not be entitled to health, hospitalization, or other insurance
or participation in a 401(k) plan during the trial period. The parties agree to negotiate a possible long-term employment agreement during
the period of the final three months of the term of this Agreement. This Agreement supersedes all previous agreements and can only be
amended in writing. The Agreement is governed by the internal laws of the State of Florida, and any dispute arising out of this Agreement
shall be resolved in the federal and state courts located in the State of Florida, County of Broward. On September 1, 2023, the agreement
was renewed for a period of 90 days, with an expiration date of December 31, 2023. During this extended period, Mr. Richmond was compensated
a total of $33,333 per month. On December 21,2023 the Board of Directors agreed to not renew Mr. Richmond's agreement and therefore
the agreement expired.

 Employment Agreement with Jackie Placeres

 None.

 Employment Agreement with Frederick H. Tingberg, Jr.

 None.

 Employment Agreement with Ali Manav.

agreed to become the Acting Chief Executive Officer of Basanite, Inc. (the "Company") through June 30, 2025. As an independent
contractor, Mr. Manav has been performing advisory services to our Company since September 1, 2024. Mr. Manav's services to the
Company will be at a monthly salary of $17,250 plus expenses approved by the Chairman. The monthly salary of $17,250 will be deferred
and accrued until such time as $1,000,000 is raised by the Company and at which time any deferred compensation will be paid immediately
to him. Upon $1,000,000 being raised by the Company, the Company will also pay Mr. Manav his monthly salary on the first day of each month
through June 2025. Mr. Manav also received options to purchase 5 million shares of the Company's common stock with a strike price
of $.0275 equal to the closing price of the Company's common stock as quoted by the OTCQB Market on the date of signing his engagement
letter. The option will have a term of five years from the date of issuance. The options will also contain standard cashless exercise
provisions as well as piggy-back registration rights for future stock registrations that the Company may file. The options vest under
the following schedule: 1.5 million options immediately upon the execution of his engagement agreement, 1.5 million options vest upon
the completion of a minimum of $1 million of aggregate financing into the Company after the date of his engagement letter and 2 million
options vesting upon the anniversary of the first 90-day period the Company achieves operational break even as defined in the engagement
letter. Mr. Manav received $25,000 upon execution of the engagement letter for work conducted in September of 2024. As an independent
contractor, Mr. Manav is not entitled to receive any employee benefits. The engagement letter will automatically terminate no later than
June 30, 2025, unless the Company and Mr. Manav mutually agree on an extension. As of this filing Mr. Manav has transitioned to an operational
executive role in preparation for our forthcoming manufacturing facility in Twinsburg, Ohio.

 Except as otherwise disclosed
above, we have not entered into employment agreements with, nor have we authorized any payments upon termination or change-in-control,
to any of our executive officers or key employees.

 How Compensation for our Directors and Executive Officers was Determined

 During 2023, our previous Acting
Chief Executive Officer, Thomas Richmond, was compensated pursuant to a consulting agreement. These agreements or offers were negotiated
and approved by our Board of Directors.

 During 2024, our Acting Interim
Chief Executive Officer, Ali Manav, was compensated pursuant to an engagement letter. These agreements or offers were negotiated and
approved by our Board of Directors.

 2023 Option and Warrant Grants to Executive Officers

 We
entered into an employment agreement, dated April 6, 2023, with Thomas Richmond to serve as our Acting Interim Chief Executive Officer.
Thomas Richmond has been appointed as the acting Chief Executive Officer of Basanite as an independent contractor until December 31,
2023. The company agreed to issue to him five warrants to purchase four million shares of common stock, exercisable at $.045 per share.

 2024 Option and Warrant Grants to Executive Officers

agreed to become the Acting Chief Executive Officer of Basanite, Inc. (the "Company") through June 30, 2025. As an independent
contractor, Mr. Manav also received options to purchase 5 million shares of the Company's common stock with a strike price of $.0275
equal to the closing price of the Company's common stock as quoted by the OTCQB Market on the date of signing his engagement letter.
The option will have a term of five years from the date of issuance. The options will also contain standard cashless exercise provisions
as well as piggy-back registration rights for future stock registrations that the Company may file. The options vest under the following
schedule: 1.5 million options immediately upon the execution of his engagement agreement, 1.5 million options vest upon the completion
of a minimum of $1 million of aggregate financing into the Company after the date of his engagement letter and 2 million options vesting
upon the anniversary of the first 90-day period the Company achieves operational break even as defined in the engagement letter.

 Outstanding Equity Awards at Fiscal Year-End

 On October 2, 2024,
as part of his compensation package for employment, Ali Manav, our current Acting Interim Chief Executive Officer, was granted immediate
vesting in 1,500,000 options at a strike price of $0.278 per share expiring in 5 years. These options remained outstanding on December
31, 2024. As of this filing Mr. Manav has transitioned to an operational executive role in preparation for our forthcoming manufacturing
facility in Twinsburg, Ohio.

 Disclosure of Policies and Practices Related to
the Grant of Equity Awards Close in Time to the Release of Material Nonpublic Information.

 The Company does not have any
adopted policies and practices on the timing of equity incentive awards or grants in relation to the disclosure of material nonpublic
information by the Company. The Company does not have a predetermined schedule as to whether or when the Company's Board of Directors
grants or awards equity incentives to the Company's executive officers, employees or members of the Board of Directors. The Board
of Directors takes material nonpublic information into account when determining the timing and terms of awards and grants, and whether
any disclosure of material nonpublic information is timed for the purpose of affecting the value of executive compensation, and will,
in these instances, delay the grant of awards if material news is expected to be made public based on discussions with management.

 The Company, during the last
completed fiscal year, did not award options or other equity incentives to a named executive officer in the period beginning four business
days before the filing of a periodic report on Form 10-Q or Form 10-K, or the filing or furnishing of a current report on Form 8-K (other
than the Form 8-k filed on October 7, 2024 that disclosed the hiring of a new interim Chief Executive Officer and the granting of options
to him and other consultants) that discloses material nonpublic information, and ending one business day after the filing or furnishing
of such report.

 Equity Compensation Plan Information

 We do not have a formal equity
incentive plan at this time, and therefore we have no securities authorized for such issuance under any such plan.

 Item 12.

 Security Ownership of Certain Beneficial Owners
 and Management and Related Stockholder Matters.

 The
following table shows the number of shares and percentage of all shares of common stock issued and outstanding as of the date of this
Annual Report, held by any person known to us to be the beneficial owner of 5% or more of our outstanding common stock, by each executive
officer and director, and by all directors and executive officers as a group. The persons named in the table have sole voting and investment
power with respect to all shares beneficially owned. Unless otherwise noted below, each beneficial owner has sole power to vote and dispose
of the shares and the address of such person is our corporate office at 2660 N.W. 15 th Court, Unit 108, Pompano Beach, FL
33069. Pursuant to Rule 13d-3 under the Exchange Act, a person has beneficial ownership of any securities as to which such person, directly
or indirectly, through any contract, arrangement, undertaking, relationship or otherwise has or shares voting power and/or investment
power or as to which such person has the right to acquire such voting and/or investment power within 60 days. The applicable percentage
of ownership is based on 260,156,796 of common stock outstanding as of the date of this Annual Report.

 Number of Shares Beneficially
 Owned

 Percentage of Shares
 Outstanding (1)

 Named Executive Officers and Directors:

 Ronald J. LoRicco, Sr. (2)

 60,915,912

 22.16
 %

 Paul Sallarulo (3)

 7,334,493

 2.83
 %

 Adam Falkoff (4)

 500,000

 *

 Frederick Tingberg Jr.(5)

 1,851,781

 *

 Manuel A. Rodriguez (6)

 20,616,060

 7.42
 %

 Ali Manav (7)

 5,000,000

 *

 All executive officers and directors as a group (7 persons)

 106,871,460

 38.79
 %

 _____________________

 * Less than 1%.

 (1)

 Shares of common stock
 beneficially owned and the respective percentages of beneficial ownership of common stock assume the exercise of all options and
 other securities convertible into common stock beneficially owned by such person or entity currently exercisable or exercisable within
 60 days of the date of this Annual Report, except as otherwise noted. Shares issuable pursuant to the exercise of stock options and
 other securities convertible into common stock exercisable within 60 days are deemed outstanding and held by the holder of such options
 or other securities for computing the percentage of outstanding common stock beneficially owned by such person but are not deemed
 outstanding for computing the percentage of outstanding common stock beneficially owned by any other person.

 (2)

 Includes shares held by
 RVRM Holdings, Inc., First New Haven Mortgage Company, LLC and LoRi Co., which are controlled by our director, Ronald J. LoRicco,
 Sr. Includes 500,000 shares of common stock issuable upon exercise of common stock purchase option exercisable at $0.25 per share,
 397,269 shares issuable upon exercise of common stock purchase warrant exercisable at $0.396 per share, 11,250,000 shares of common
 stock issuable upon exercise of common stock purchase warrants exercisable at $0.20 per share, and 5,625,000 shares of common stock
 issuable upon exercise of common stock purchase warrants exercisable at $0.35 per share. In addition, an entity related to Mr. LoRicco
 currently holds a $1.6 million secured convertible note that does not have a stated conversion rate but cannot convert for any less
 than $0.01 per share.

 (3)

 Includes shares currently
 held by Mr. Sallarulo in addition to 250,000 shares of common stock issuable upon exercise of common stock purchase options exercisable
 at $0.25 per share and 1,500,000 shares of common stock issuable upon exercise of common stock warrants exercisable at $0.20 per
 share.

 (4)

 Includes 500,000 shares
 of common stock issuable upon exercise of common stock purchase options held by Mr. Falkoff exercisable at $0.25 per share.

 (5)

 Includes shares currently
 held by Mr. Tingberg including 1,212,121 shares of common stock issuable upon exercise of common stock purchase warrants exercisable
 at $0.33 per share.

 (6)

 Includes shares currently
 held by Mr. Rodriguez in addition to 20,606,060 shares issuable upon exercise of common stock purchase warrants exercisable at
 $0.33 per share, 20,000,000 of which are held by U.S. Supplies, Inc., an entity controlled by Mr. Rodriguez.

 (7)

 On October 2, 2024,
 Ali Manav agreed to become the Acting Chief Executive Officer of Basanite, Inc. (the "Company") through June 30,
 2025. As an independent contractor, Mr. Manav also received options to purchase 5 million shares of the Company's common
 stock with a strike price of $.0275 equal to the closing price of the Company's common stock as quoted by the OTCQB Market
 on the date of signing his engagement letter. As of this filing Mr. Manav has transitioned to an operational executive role in
 preparation for our forthcoming manufacturing facility in Twinsburg, Ohio.

 Item 13.

 Certain Relationships and Related Transactions,
 and Director Independence.

 Except as disclosed below, we are currently not
a party to any related party transaction, including transaction in which:

 •

 The
 amounts involved exceeded or will exceed the lesser of $120,000 or 1% of the average of our Company's total assets at year-end
 for the last two fiscal years, and

 •

 A
 director, executive officer or holder of more than 5% of our common stock or any member of his or her immediate family had or will
 have a direct or indirect material interest.

 Additional information regarding these transactions
can be found in notes 6, 7 and 9 to the accompanying financial statements.

 Transactions in 2023

 On February 14, 2023, the Company
issued a promissory note to a board member in exchange for $10,000 bearing an interest rate of 20% per annum and payable on February
13, 2024.

 On February 24, 2023, the Company
issued a promissory note to a board member in exchange for $50,000 bearing an interest rate of 20% per annum and payable on February
23, 2024.

 On March 3, 2023, the Company
issued a promissory note to a board member in exchange for $15,000 bearing an interest rate of 20% per annum and payable on March 2,
2024.

 On March 24, 2023, the
Company issued a promissory note to a board member in exchange for $15,000 bearing an interest rate of 20% per annum and payable on March
23, 2024.

 On April 12, 2023, the Company
issued a promissory note to a board member in exchange for $150,000 bearing an interest rate of 20% per annum and payable on April 11,
2024.

 On April 28, 2023, the Company
issued a promissory note to a board member in exchange for $100,000 bearing an interest rate of 20% per annum and payable on April 27,
2024.

 On May 12, 2023, the Company
issued a promissory note to a board member in exchange for $100,000 bearing an interest rate of 20% per annum and payable on May 11,
2024.

 On June 5, 2023, the Company
issued a promissory note to a board member in exchange for $100,000 bearing an interest rate of 20% per annum and payable on June 4,
2024.

 On July 25, 2023, the Company
issued a promissory note to a board member in exchange for $200,000 bearing an interest rate of 20% per annum and payable on July 24,
2024.

 On September 11, 2023, the
Company issued a promissory note to a board member in exchange for $150,000 bearing an interest rate of 20% per annum and payable on
September 10, 2024.

 On September 11, 2023, the
Company issued a promissory note to an advisor to the board in exchange for $50,000 bearing an interest rate of 20% per annum and payable
on September 10, 2024.

 On November 2, 2023, the Company
issued a promissory note to a board member in exchange for $100,000 bearing an interest rate of 20% per annum and payable on November
1, 2024.

 On December 12, 2023, the Company
issued a promissory note to a board member in exchange for $75,000 bearing an interest rate of 20% per annum and payable on December
11, 2024.

 Transactions in 2024

 On January 9, 2024, the Company issued a promissory
note to a board member in exchange for $23,000 bearing an interest rate of 20% per annum and payable on January 8, 2025.

 On March 6, 2024, the Company issued a promissory
note to a board member in exchange for $40,000 bearing an interest rate of 20% per annum and payable on March 5, 2025.

 On March 21, 2024, the Company issued a promissory
note to a board member in exchange for $15,000 bearing an interest rate of 20% per annum and payable on March 20, 2025.

 On May 12, 2024, the Company issued a promissory note
to a board member in exchange for $25,000 bearing an interest rate of 20% per annum and payable on May 11, 2025.

 On June 26, 2024, the Company issued a promissory
note to a board member in exchange for $100,000 bearing an interest rate of 20% per annum and payable on June 25, 2025.

 On August 13, 2024, the Company issued a promissory
note to a board member in exchange for $25,000 bearing an interest rate of 20% per annum and payable on August 12, 2025.

 On September 6, 2024, the Company issued a promissory
note to a board member in exchange for $50,000 bearing an interest rate of 20% per annum and payable on September 5, 2025.

 On October 2, 2024, the Company issued a promissory
note to a board member in exchange for $100,000 bearing an interest rate of 20% per annum and payable on October 1, 2025.

 On December 13, 2024, the Company issued a promissory
note to a board member in exchange for $50,000 bearing an interest rate of 20% per annum and payable on December 12, 2025.

 Issuances 2024

agreed to become the Acting Chief Executive Officer of Basanite, Inc. (the "Company") through June 30, 2025. As an independent
contractor, Mr. Manav has been performing advisory services to our Company since September 1, 2024. Mr. Manav's services to the
Company will be at a monthly salary of $17,250 plus expenses approved by the Chairman. The monthly salary of $17,250 will be deferred
and accrued until such time as $1,000,000 is raised by the Company and at which time any deferred compensation will be paid immediately
to him. Upon $1,000,000 being raised by the Company, the Company will also pay Mr. Manav his monthly salary on the first day of each month
through June 2025. Mr. Manav also received options to purchase 5 million shares of the Company's common stock with a strike price
of $.0275 equal to the closing price of the Company's common stock as quoted by the OTCQB Market on the date of signing his engagement
letter. The option will have a term of five years from the date of issuance. The options will also contain standard cashless exercise
provisions as well as piggy-back registration rights for future stock registrations that the Company may file. The options vest under
the following schedule: 1.5 million options immediately upon the execution of his engagement agreement, 1.5 million options vest upon
the completion of a minimum of $1 million of aggregate financing into the Company after the date of his engagement letter and 2 million
options vesting upon the anniversary of the first 90-day period the Company achieves operational break even as defined in the engagement
letter. Mr. Manav received $25,000 upon execution of the engagement letter for work conducted in September of 2024. As an independent
contractor, Mr. Manav is not entitled to receive any employee benefits. The engagement letter will automatically terminate no later than
June 30, 2025, unless the Company and Mr. Manav mutually agree on an extension. As of this filing Mr. Manav has transitioned to an operational
executive role in preparation for our forthcoming manufacturing facility in Twinsburg, Ohio.

 On October 2, 2024, Steve
Heard agreed to become an advisor to the Board of Directors of Basanite, Inc. (the "Company") through June 30, 2025. As
an independent contractor, Mr. Heard will advise the Board of Directors and Management of the Company on matters relating to capital
markets, investor relations, and business development and introduce potential strategic partners and investors to the Company. A
one-time fee of $37,500 will be deferred and accrued until such time as $1,000,000 is raised by the Company and which time any
deferred compensation will be paid immediately to him. Mr. Heard also received options to purchase 7.5 million shares of the
Company's common stock with a strike price of $.0275 equal to the closing price of the Company's common stock as quoted
by the OTCQB Market on the date of signing his engagement letter. The option will have a term of five years from the date of
issuance. The options will also contain standard cashless exercise provisions as well as piggy-back registration rights for future
stock registrations that the Company may file. The options vest under the following schedule: 3.75 million options immediately upon
the execution of his engagement agreement, 3.75 million options vest upon the completion of a minimum of $1 million of aggregate
financing into the Company after the date of his engagement letter. As an independent contractor, Mr. Heard is not entitled to
receive any employee benefits. The engagement letter will automatically terminate no later than June 30, 2025, unless the Company
and Mr. Heard mutually agree on an extension.

 On October 2, 2024, Maxwell J.
Heard agreed to become an advisor to the Board of Directors of Basanite, Inc. (the "Company") through June 30, 2025. As an
independent contractor, Mr. Heard will advise the Board of Directors and Management of the Company on matters relating to capital markets,
investor relations, and business development and introduce potential strategic partners and investors to the Company. A one-time fee of
$12,500 will be deferred and accrued until such time as $1,000,000 is raised by the Company and which time any deferred compensation will
be paid immediately to him. Mr. Heard also received options to purchase 2.5 million shares of the Company's common stock with a
strike price of $.0275 equal to the closing price of the Company's common stock as quoted by the OTCQB Market on the date of signing
his engagement letter. The option will have a term of five years from the date of issuance. The options will also contain standard cashless
exercise provisions as well as piggy-back registration rights for future stock registrations that the Company may file. The options vest
under the following schedule: 1.25 million options immediately upon the execution of his engagement agreement, 1.25 million options vest
upon the completion of a minimum of $1 million of aggregate financing into the Company after the date of his engagement letter. As an
independent contractor, Mr. Heard is not entitled to receive any employee benefits. The engagement letter will automatically terminate
no later than June 30, 2025, unless the Company and Mr. Heard mutually agree on an extension.

 On October 2, 2024, Frederick
Berndt agreed to become an advisor to the Board of Directors of Basanite, Inc. (the "Company") through June 30, 2025. As an
independent contractor, Mr. Berndt will advise the Board of Directors and Management of the Company on matters relating to capital markets,
investor relations, and introduce potential strategic partners and investors to the Company. A one-time fee of $50,000 will be deferred
and accrued until such time as $1,000,000 is raised by the Company and which time any deferred compensation will be paid immediately to
him. Mr. Berndt also received options to purchase 10 million shares of the Company's common stock with a strike price of $.0275
equal to the closing price of the Company's common stock as quoted by the OTCQB Market on the date of signing his engagement letter.
The option will have a term of five years from the date of issuance. The options will also contain standard cashless exercise provisions
as well as piggy-back registration rights for future stock registrations that the Company may file. The options vest under the following
schedule: 3 million options immediately upon the execution of his engagement agreement, 3 million options vest upon the completion of
a minimum of $1 million of aggregate financing into the Company after the date of his engagement letter and 4 million options vesting
upon the anniversary of the first 90-day period the Company achieves operational break even as defined in the engagement letter. Mr. Berndt
is not entitled to receive any employee benefits. The engagement letter will automatically terminate no later than June 30, 2025, unless
the Company and Mr. Berndt mutually agree on an extension.

 Item 14.

 Principal Accounting Fees and Services.

 Currently, our Audit Committee
reviews and approves audit and permissible non-audit services performed by its independent registered public accounting firm of Hudgens
CPA, PLLC, as well as the fees charged for such services. In its review of non-audit service and its appointment of Hudgens CPA, PLLC,
our independent registered public accounting firm for the year end 2024 and 2023, the Audit Committee considered whether the provision
of such services is compatible with maintaining independence. All of the services provided, and fees charged by Hudgens CPA, PLLC were
approved by our Audit Committee.

 The following table shows the fees for the years ended December
31, 2024, and 2023:

 2024

 2023

 Audit
 Fees (1)

 $
 84,000

 $
 83,500

 Tax Fees

 $
 —

 $
 —

 All
 Other Fees (2)

 $
 —

 $
 —

 (1)
 Fees – these
fees relate to the audit of our annual financial statements and the review of our interim quarterly financial statements billed during
the Audit respective years.

 (2)
 All other fees
– these fees relate to the consent fee for the filing of our comparative financial statements for the previous year.

 Item 15.

 Exhibits, Financial Statement Schedules.

 Exhibits

 Incorporated by Reference

 Exhibit
 No.

 Exhibit Description

 Form

 Date
 Filed

 Number

 Filed or

 Furnished

 Herewith

 Previously
 Filed

 To
 be

 Filed by

 Amendment

 2.1

 Agreement
 and Plan of Merger, dated December 11, 2018, between Basanite, Inc. and PayMe On, Inc.

 12/12/18

 2.1

 2.2

 Articles
 of Merger, dated December 12, 2018

 12/12/18

 3.1

 3.1

 Articles
 of Incorporation

 S-1

 11/4/08

 3.1

 3.2

 Amendment
 to Articles of Incorporation

 S-1

 11/4/08

 3.3

 3.3

 Amendment
 to Articles of Incorporation increasing capital stock and blank check preferred

 4/3/13

 3.1

 3.4

 Amendment
 to Articles of Incorporation Name change and reverse split effective May 17, 2013

 5/6/13

 3.1

 3.7

 Amended
 and Restated Bylaws

 8/18/21

 3.1

 4.1

 Common
 Stock Warrant for 5,000,000 shares to Richard Krolewski

 8-K/A

 3/19/19

 4.1

 4.2

 Common
 Stock Warrant for 5,000,000 shares to David L. Anderson

 3/12/19

 4.1

 4.3

 Form
 of Common Stock Warrant issued in connection with September 2018 through March 2019 private placement

 3/28/19

 10.38

 4.4

 Form
 of Common Stock Warrant issued to 20% Secured Convertible Noteholders, dated February 12, 2021

 2/19/21

 4.1

 4.5

 Form
 of Common Stock Warrant issued to 20% Secured Convertible Noteholders, dated May 12, 2021

 5/17/21

 4.2

 4.6

 Form
 of Warrant A issued in the August 2021 Private Placement

 8/23/21

 4.1

 4.7

 Form
 of Warrant B issued in the August 2021 Private Placement

 8/23/21

 4.2

 4.8

 Strategic
 Partner Warrant, dated December 10, 2021, issued to U.S. Supplies, Inc.

 12/13/21

 4.1

 4.9

 Warrant
 issued to Simon R. Kay, dated March 25, 2022

 3/31/22

 4.1

 10.1

 Commercial
 Lease Agreement between Basanite Industries LLC and CAMTON, LLC

 1/31/19

 10.1

 10.2

 Consulting
 Agreement with Simon R. Kay dated January 13, 2020 and related Statement of Work, amended as of September 16, 2020 +

 S-1

 9/29/21

 10.1

 10.3

 Exclusive
 Supplier Agreement with MEP Consulting Engineers, Inc.

 7/31/20

 10.1

 10.4

 Form
 of 20% Secured Convertible Promissory Note dated August 3, 2020

 8-K/A

 8/10/20

 10.1

 10.5

 Security
 Agreement dated August 3, 2020, relating to 20% Secured Convertible Promissory Note

 8-K/A

 8/10/20

 10.2

 10.6

 Form
 of Amended and Restated 20% Secured Promissory Note, dated February 12, 2021

 2/19/21

 10.1

 10.7

 Form
 of Amended and Restated 20% Secured Promissory Note, dated May 12, 2021

 5/17/21

 10.2

 10.8

 Form
 of Securities Purchase Agreement, dated August 17, 2021

 8/23/21

 10.1

 10.9

 Form
 of Placement Agent Agreement between the Company and Aegis Capital Corp., dated August 17, 2021

 8/23/21

 10.2

 10.10

 Form
 of Director Offer Letter, dated December 10, 2021, for Manuel A. Rodriguez and Frederick H. Tingberg, Jr.

 12/13/21

 10.1

 10.11

 Distribution
 Agreement between the Company and U.S. Supplies, Inc. dated December 10, 2021 *

 4/15/2022

 10.1

 10.12

 Exclusive
 Supplier Agreement between the Company and Concrete Products of The Palm Beaches, Inc., dated December 10, 2021. *

 4/15/2022

 10.12

 10.13

 Form
 of Transition Services Agreement, dated January 20, 2022 between the Company and Simon R. Kay

 1/26/22

 10.10

 10.14

 Employment
 Agreement dated March 25, 2022 for Simon R. Kay

 3/31/22

 10.1

 14.1

 Code
 of Ethics

 4/5/12

 14.1

 19.1

 Insider
 Trading Policy

 X

 21.1

 List
 of subsidiaries of the Company

 3/31/21

 21.1

 31.1

 Certification
 Pursuant to Rule 13a-14(a)/15d-14(a)

 X

 31.2

 Certification
 Pursuant to Rule 13a-14(a)/15d-14(a)

 X

 32.1

 Certification
 Pursuant to Section 1350

 X

 32.2

 Certification
 Pursuant to Section 1350

 101.INS

 X

 101.SCH

 Schema Document

 X

 101.CAL

 Calculation Linkbase Document

 X

 101.DEF

 Definition Linkbase Document

 X

 101.LAB

 Label Linkbase Document

 X

 101.PRE

 Presentation Linkbase Document

 X

 Cover Page Interactive

 X

 _____________________

 * Certain portions of this exhibit have been
redacted in accordance with Item 601(b)(10)(iv) of Regulation S-K because they are private, confidential and not material.

 + Indicates a management contract or a compensatory plan, contract or
arrangement.

 Item 16.

 Form 10-K Summary.

 Not applicable.

 SIGNATURES

 Pursuant to the requirements
of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

 Date: March 31, 2025

 Basanite, Inc.

 By:

 /s/ Jackie
 Placeres

 Jackie Placeres

 Acting Interim Chief Financial Officer

 Pursuant to the requirements
of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.

 Signature

 Title

 Date

 /s/
 Jackie Placeres

 Acting Interim Chief Financial
 Officer

 March

 Jackie Placeres

 /s/ Michael Dennis Nelson

 Chief Executive Officer

 March

 Michael Dennis Nelson

 /s/

 Chairman of the Board &
 Acting Interim Executive Officer

 March

 /s/

 March

 /s/
 Manuel A. Rodriguez

 March

 Manuel A. Rodriguez

 /s/
 Frederick H. Tingberg Jr.

 March

 Frederick H. Tingberg Jr.

 /s/
 Adam S. Falkoff

 March

 Adam S. Falkoff

 /s/

 March

 INDEX TO FINANCIAL STATEMENTS

 BASANITE, INC.
AND SUBSIDIARIES

 AUDITED CONSOLIDATED
FINANCIAL STATEMENTS

 Page

 Report of Independent Registered Public
 Accounting Firm (Hudgens CPA, PLLC, Houston, Texas, PCAOB ID 6849)

 Consolidated Balance Sheets

 Consolidated Statements of Operations

 Consolidated Statements of Stockholders'
 Equity (Deficit)

 Consolidated Statements of Cash Flows

 Notes to Consolidated Financial Statements

 F- 1

 REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM

 To the Board of Directors and

 Stockholders of Basanite, Inc.

 Opinion on the Financial Statements

 We have audited the accompanying consolidated balance
sheet of Basanite, Inc. (the Company) as of December 31, 2024 and 2023, and the related consolidated statements of operations, stockholders'
equity (deficit), and cash flows for each of the years in the two-year period ended December 31, 2024, and the related notes (collectively
referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial
position of the Company as of December 31, 2024 and 2023, and the results of their operations and cash flows for each of the years in
the two-year period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

 Going Concern

 The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has a working
capital deficit, has generated net losses since its inception and further losses are anticipated. The Company requires additional funds
to meet its obligations and the costs of their operations. These factors raise substantial doubt about its ability to continue as a going
concern. Management's plans regarding these matters are also described in Note 1. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.

 Basis for Opinion

 These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our
audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.

 We conducted our audits in accordance with
the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were
we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an
understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of
the Company's internal control over financial reporting. Accordingly, we express no such opinion.

 Our audits included performing procedures to assess
the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial
statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 Critical Audit Matters

 The critical audit matters communicated below are
matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the
audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially
challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the
financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions
on the critical audit matters or on the accounts or disclosures to which they relate. We have determined that there are no critical audit
matters.

 /s/ Hudgens CPA, PLLC

 www.hudgenscpas.com

 We have served as the Company's auditor since 2022.

 Houston, Texas

 March 31, 2025

 F- 2

 BASANITE, INC. AND
SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 As of December
 31,

 2024

 2023

 ASSETS

 CURRENT ASSETS

 Cash

 $
 82,222

 $
 55,248

 Accounts receivable, net

 50,759

 40,222

 Deposits and other
 current assets

 —

 —

 TOTAL CURRENT ASSETS

 132,981

 95,470

 Lease right-of-use asset

 —

 56,915

 Fixed assets, net

 132,728

 402,271

 TOTAL NON CURRENT ASSETS

 132,728

 459,186

 TOTAL ASSETS

 $
 265,709

 $
 554,656

 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

 CURRENT LIABILITIES

 Accounts payable

 $
 1,733,422

 $
 1,762,390

 Accrued expenses

 2,290,877

 1,207,545

 Accrued legal liability

 —

 —

 Notes payable

 270,000

 270,000

 Notes payable - related party

 2,178,000

 1,750,000

 Notes payable - convertible - related party,
 net

 2,144,357

 2,144,357

 Due to shareholders

 475,000

 475,000

 Lease liability -
 current portion

 —

 56,915

 TOTAL CURRENT LIABILITIES

 9,091,656

 7,666,207

 TOTAL LIABILITIES

 9,091,656

 7,666,207

 STOCKHOLDERS' EQUITY (DEFICIT)

 Preferred stock, $ 0.001 par value, 5,000,000
 shares authorized, 0 non-issued and outstanding

 —

 —

 Common stock, $ 0.001 par value, 1,000,000,000
 shares authorized, 259,156,796 and 253,217,402 shares issued and outstanding, respectively

 260,157

 259,157

 Additional paid-in capital

 48,905,681

 48,891,681

 Accumulated deficit

 ( 57,991,785
)

 ( 56,262,389
)

 TOTAL STOCKHOLDERS' EQUITY(DEFICIT)

 ( 8,825,947
)

 ( 7,111,551
)

 TOTAL LIABILITIES AND STOCKHOLDERS'
 EQUITY (DEFICIT)

 $
 265,709

 $
 554,656

 The accompanying notes are an integral part of the
consolidated financial statements.

 F- 3

 CONSOLIDATED
STATEMENTS OF OPERATIONS

 For the year ended

 31,

 Revenue

 2024

 2023

 Products sales – rebar

 $
 434,725

 $
 376,096

 Total cost of goods sold

 172,191

 248,313

 Gross (loss) profit

 262,534

 127,783

 OPERATING EXPENSES

 Selling, general,
 and administrative expenses

 1,067,519

 1,730,733

 Total operating expenses

 1,067,519

 1,730,733

 NET LOSS FROM OPERATIONS

 ( 804,985
)

 ( 1,602,950
)

 OTHER INCOME (EXPENSE)

 Miscellaneous income

 —

 Interest expense

 ( 924,768
)

 ( 566,429
)

 Total other income (expense)

 ( 924,411
)

 ( 566,429
)

 NET LOSS

 $
 ( 1,729,396
)

 $
 ( 2,169,379
)

 Net loss per share – basic

 $
 ( 0.01
)

 $
 ( 0.01
)

 Net loss per share – diluted

 $
 ( 0.01
)

 $
 ( 0.01
)

 Weighted average number of shares outstanding – basic
 and diluted

 260,156,796

 256,834,618

 The accompanying notes are an integral part of the
consolidated financial statements.

 F- 4

 CONSOLIDATED STATEMENTS OF
STOCKHOLDERS' EQUITY (DEFICIT)

 Additional

 Total

 Preferred
 Stock

 Common Stock

 Paid-in

 Accumulated

 Stockholders'

 Shares

 Par Value

 Shares

 Par Value

 Capital

 Deficit

 Equity (Deficit)

 Balance January 1, 2024

 —

 $
 —

 259,156,796

 $
 259,157

 $
 48,891,681

 $
 ( 56,262,389
)

 $
 ( 7,111,551
)

 Stock-based compensation

 —

 —

 1,000,000

 1,000

 —

 —

 1,000

 Net loss

 —

 —

 —

 —

 14,000

 ( 1,729,396
)

 ( 1,715,396
)

 Balance December 31, 2024

 —

 $
 —

 260,156,796

 $
 260,157

 $
 48,905,681

 $
 ( 57,991,785
)

 $
 ( 8,825,947
)

 Additional

 Total

 Preferred
 Stock

 Common Stock

 Paid-in

 Accumulated

 Stockholders'

 Shares

 Par Value

 Shares

 Par Value

 Capital

 Deficit

 Equity (Deficit)

 Balance January 1, 2023

 —

 $
 —

 253,217,402

 $
 253,218

 $
 47,433,354

 $
 ( 54,093,010
)

 $
 ( 6,406,438
)

 Stock-based compensation

 —

 —

 2,000,000

 2,000

 162,266

 —

 164,266

 Stock issued from subscription liability

 —

 —

 3,939,394

 3,939

 1,296,061

 —

 1,300,000

 Net loss

 —

 —

 —

 —

 —

 ( 2,169,379
)

 ( 2,169,379
)

 Balance December 31, 2023

 —

 $
 —

 259,156,796

 $
 259,157

 $
 48,891,681

 $
 ( 56,262,389
)

 $
 ( 7,111,551
)

 The accompanying notes are an integral part of the
consolidated financial statements.

 F- 5

 CONSOLIDATED STATEMENTS OF
CASH FLOWS

 For the year ended

 31,

 2024

 2023

 CASH FLOWS FROM OPERATING ACTIVITIES:

 Net loss

 $
 ( 1,729,396
)

 $
 ( 2,169,379
)

 Adjustments to reconcile net loss to net
 cash used in operating activities:

 Lease right-of-use asset amortization

 56,915

 96,355

 Depreciation

 120,509

 127,967

 Loss on impairment of equipment and deposits

 149,034

 —

 Stock-based compensation

 15,000

 164,266

 Changes in operating assets and liabilities:

 Prepaid expenses

 —

 137,370

 Inventory

 —

 —

 Accounts receivable

 ( 10,537
)

 27,738

 Deposits and other current assets

 —

 —

 Accounts payable and accrued expenses

 1,054,364

 653,020

 Due to shareholders

 —

 —

 Lease liability

 ( 56,915
)

 ( 93,186
)

 Net cash used in operating activities

 ( 401,026
)

 ( 1,055,849
)

 CASH FLOWS FROM INVESTING ACTIVITIES:

 Net cash used in investing activities

 —

 —

 CASH FLOWS FROM FINANCING ACTIVITIES:

 Proceeds from notes payable and notes
 payable related parties

 428,000

 1,145,000

 Repayment of notes
 payable and notes payable related parties

 —

 ( 64,243
)

 Net cash provided by financing activities

 428,000

 1,080,757

 NET (DECREASE) INCREASE IN CASH

 26,974

 24,908

 CASH AND CASH EQUIVALENTS AT BEGINNING
 OF PERIOD

 55,248

 30,340

 CASH AND CASH EQUIVALENTS AT END OF PERIOD

 $
 42,618

 $
 55,248

 SUPPLEMENTAL Information

 Cash paid for interest

 $
 —

 $
 —

 Cash paid for taxes

 $
 —

 $
 —

 The accompanying notes are an integral part
of the consolidated financial statements.

 F- 6

 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

 FOR THE YEARS ENDED
DECEMBER 31, 2024 AND 2023

 NOTE 1 – ORGANIZATION, NATURE OF BUSINESS AND GOING CONCERN (A) Description
of Business

 On May 30, 2006, Basanite,
Inc. was organized as a Nevada corporation. Basanite and its wholly owned subsidiaries are herein referred to as "Basanite,"
the "Company", "we", "our", or "us". Currently based in Pompano Beach, Florida, the Company
intends to manufacture concrete-reinforcing products made from basalt fiber reinforced polymers ("BFRP"), such as its primary
product BasaFlex. This UV-stable, chemical, acid and moisture resistant material is sustainable and environmentally friendly and has
been engineered to replace steel as it never rusts, therefore, addressing the industry's current corrosion issues.

 The Company's wholly
owned subsidiary created in 2018, Basanite Industries, LLC ("BI") manufactures BasaFlex, a basalt fiber reinforced
polymer rebar. BFRP rebar is a stronger, lighter, sustainable, non-conductive and non-corrosive alternative for traditional steel rebar
and wire mesh. BI previously leased a fully permitted and Underwriters Laboratories ("UL") approved 36,900 square foot facility
located in Pompano Beach, Florida. BI's operations team is currently in the processes of searching for, optimizing, and scaling
the manufacturing plant to produce 11,000 to 17,000 linear feet of BFRP rebar per line, per day, depending on the product mix. BI's
own fully equipped test lab will be utilized to evaluate, validate, and verify each product's performance attributes.

 The company does not hold inventory
at this time for sale, has no current facilities for operations but is actively seeking funding through debt equity to restart operations
and searching for a new location in which to operate full manufacturing activities.

 •

 BasaFlex never rusts – steel reinforcement
 products rust, causing time and repair costs down the road;

 •

 BasaFlex is sustainable;
 with a longer lifecycle – production of our products results in exceptionally low carbon footprint when compared with steel.
 The lack of corrosion allows the "lifespan" of concrete products to be significantly longer; and

 •

 BasaFlex
has a lower final, in place cost – the physical nature of our products relative to steel (4X lighter, easily transportable, "coilable",
safer and easier to use) reduces the all-in cost of reinforcement when all factors are considered.

 (B)

 Liquidity and Management Plan s –
 Going Concern

 Since inception, the Company has incurred net operating losses
and used cash in operations. As of December 31, 2024 and 2023, respectively, the

 Company reported:

 •

 an
 accumulated deficit of approximately $ 8 million and $ 56.3 million;

 •

 a working capital deficiency of approximately $ 8.8
 million and $ 7.1 million; and

 •

 cash used in operations of approximately $ 0.4 million
 and $ 1.5 million.

 Losses have principally occurred
as a result of the substantial resources required for product research and development and for the marketing of the Company's products;
including the general and administrative expenses associated with the organization.

 At December 31, 2024, the Company had cash of $ 82,222 compared
to $ 55,248 at December 31, 2023.

 F- 7

 We have historically satisfied
our working capital requirements through the sale of restricted common stock and the issuance of warrants and promissory notes. Until
we are able to internally generate positive cash flow, we will attempt to fund working capital requirements through third party financing,
including through private placement of our securities as well as bridge loan arrangements. However, a number of factors continue to hinder
the Company's ability to attract new capital investment. We cannot provide any assurances that the required capital will be obtained
or that the terms of such required capital may be acceptable to us. If we are unable to obtain adequate financing, we may reduce our
operating activities to reduce our cash use until sufficient funding is secured.

 These conditions raise substantial
doubt about the Company's ability to continue as a going concern. These consolidated financial statements do not include any adjustments
to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities
that may result from the outcome of these uncertainties. Management believes that the actions presently being taken to obtain additional
funding and implement its strategic plan provides the opportunity for the Company to continue as a going concern.

 NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 (A) Use of Estimates in Financial Statements

 The presentation 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. Actual results could
differ from those estimates.

 Stock-based compensation and
stock awards related to convertible debt instruments are recognized based on the fair value of the awards granted. The fair value of
each award or conversion feature is estimated on the grant date using the Black-Scholes pricing model. The Black-Scholes pricing model
requires the input of highly subjective assumptions, including the fair value of the underlying common stock, the expected term of the
option, the expected volatility of the price of our common stock, risk-free interest rates and the expected dividend yield of our common
stock. The assumptions used to determine the fair value of the stock awards represent management's best estimates. These estimates
involve inherent uncertainties and the application of management's judgment.

 (B) Principles of Consolidation

 The consolidated financial
statements include the accounts of Basanite, Inc. and its wholly owned subsidiaries, Basanite Industries, LLC and Basalt America, LLC,
formerly known as Rockstar Acquisitions, LLC. All intercompany balances have been eliminated in consolidation.

 (C) Cash

 The Company considers all highly
liquid temporary cash instruments with an original maturity of three months or less to be cash equivalents. The Company places its cash,
cash equivalents and restricted cash on deposit with financial institutions in the United States, which are insured by the Federal Deposit
Insurance Company ("FDIC") up to $ 250,000. The Company's credit risk in the event of failure of these financial institutions
is represented by the difference between the FDIC limit and the total amounts on deposit. Management monitors the financial institutions
credit worthiness in conjunction with balances on deposit to minimize risk. The Company from time to time may have amounts on deposit
in excess of the insured limits.

 (D) Inventories

 The Company's inventories
consist of raw materials, work in process and finished goods, both purchased and manufactured. Inventories are stated at the lower of
cost or net realizable value. Cost is determined on a first-in, first-out basis. Raw materials inventory consists primarily of basalt
fiber and other necessary elements to produce basalt rebar. On a quarterly basis, the Company analyzes its inventory levels and records
allowances for inventory that has become obsolete and inventory that has a cost basis in excess of the expected net realizable value.
The company has maintained $ 0 in inventory for the years ended December 31, 2024 and 2023, respectively.

 F- 8

 (E) Fixed assets

 Fixed assets are stated
at cost, subject to adjustments for impairment, less accumulated depreciation and amortization. Depreciation and amortization are computed
using a straight-line method over the following estimated useful lives:

 Schedule of depreciation and amortization periods for fixed assets

 Computer equipment

 3 years

 Machinery

 7 years

 Leasehold improvements

 15 years or lease term

 Office furniture and equipment

 5 years

 Land improvements

 15 years

 Website development

 3 years

 Maintenance and repairs
are charged to expenses as incurred, and improvements to leased facilities and equipment are capitalized.

 Fixed assets consist
of the following:

 Schedule of fixed assets

 2024

 2023

 Computer equipment

 $
 77,940

 $
 203,193

 Machinery

 706,965

 728,245

 Total fixed assets

 785,667

 931,438

 Accumulated depreciation

 ( 652,939
)

 ( 529,167
)

 Total fixed assets, net

 $
 132,728

 $
 402,271

 Depreciation expense for the
year ended December 31, 2024 was $ 127,967 compared to $ 100,670 for the year ended December 31, 2023.

 The
Company's long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable. The recoverability of assets to be held and used is measured by a comparison of the carrying
amount of an asset to the undiscounted future net cash flows expected to be generated by that asset. If the carrying amount of an asset
exceeds its estimated future undiscounted cash flows, an impairment charge is recognized by the amount by which the carrying amount of
the asset exceeds the fair value of the asset. During the year ended December 31, 2023, the Company determined that the construction
in process related to the custom machines should be fully impaired due to the uncertainty as to if or when the machines would be received.
The Company recognized an impairment of these assets in the amount of $ 2,599,585 in operating expenses for the year ended December 31,
2022.

 F- 9

 (F) Deposits and other current assets

 None.

 (G) Accrued expenses

 The Company's accrued expenses consist of the following:

 Schedule of accrued expenses

 2024

 2023

 Accrued payroll and taxes

 $
 104,956

 $
 202,187

 Accrued interest

 1,924,705

 998,826

 Other accrued expenses

 261,216

 64,096

 Total accrued expenses

 $
 2,290,877

 $
 1,265,109

 (H) Loss Per Share

 The basic loss per share is
calculated by dividing the Company's net loss available to common shareholders by the weighted average number of common shares
during the period. The diluted loss per share is calculated by dividing the Company's net loss by the diluted weighted average
number of shares outstanding during the period. The diluted weighted average number of shares outstanding is the basic weighted number
of shares adjusted for any potentially dilutive debt or equity.

 The following are potentially dilutive shares not included in
the loss per share computation:

 Schedule of dilutive shares not included in the loss per share computation

 2024

 2023

 Options

 1,477,778

 1,477,778

 Warrants

 125,295,757

 125,295,757

 Convertible
 shares

 8,016,068

 8,016,068

 134,789,603

 134,789,603

 F- 10

 (I) Stock-Based Compensation

 The Company recognizes compensation
costs to employees under the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC")
Topic 718, Compensation – Stock Compensation. Under FASB ASC Topic 718, companies are required to measure the compensation costs
of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over
the period during which employees are required to provide services. Share based compensation arrangements include stock options, restricted
share plans, performance-based awards, share appreciation rights and employee share purchase plans. As such, compensation cost is measured
on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the
grant.

 The Company issued 0 restricted
common shares, 0 restricted common stock warrants, and 9.5 million common stock options as compensation with a total fair value of $ 261,250
for the year ended December 31, 2024.

 The Company issued 2,000,000
restricted common shares, 0 restricted common stock warrants, and 0 common stock options as compensation with a total fair value of $ 20,000
for the year ended December 31, 2023.

 As of December 31, 2024 and
2023, $ 0, respectively, of the fair value of the equity awards granted were recorded as prepaid expenses in the consolidated balance
sheets to be recognized as equity-based compensation in subsequent periods.

 For the years ended December 31, 2024 and 2023, total equity-based
compensation expense amounted to $ 0.

 (J) Income Taxes

 The Company has not recorded
any income tax expense or benefit for the years ended December 31, 2024 and 2023 due to its history of net operating losses. The provision
for income taxes was calculated as a result of the following (in thousands).

 The tax effects of
temporary differences that give rise to significant portions of the Company's deferred tax assets and liabilities are as follows
(in thousands):

 Schedule of deferred tax assets and liabilities

 31,

 2024

 2023

 Deferred tax assets:

 Net operating loss carryforwards

 $
 1,729

 $
 2,169

 Accruals and allowances

 2,282

 1,265

 Total deferred tax assets

 4,011

 3,434

 Valuation allowance

 ( 4,011
)

 ( 3,434
)

 Total deferred tax
 assets net of valuation allowance

 —

 —

 Deferred tax liabilities:

 Depreciation

 ( 121
)

 ( 127
)

 Total deferred tax liabilities

 ( 121
)

 ( 127
)

 Valuation allowance

 Total deferred tax
 liabilities net of valuation allowance

 —

 —

 Net deferred tax assets

 $
 —

 $
 —

 F- 11

 As of December 31, 2024,
the Company has a valuation allowance of approximately $ 4 million related to federal net operating loss ("NOL") carryforwards
of approximately $ 57.9 million.

 As of December 31, 2023, the
Company has a valuation allowance of approximately $ 3.4 million related to federal net operating loss ("NOL") carryforwards
of approximately $ 56.2 million.

 The amount of the valuation
allowance represented an increase of approximately $ 0.6 million over the amount recorded as of December 31, 2024 and was due to the decrease
in net operating losses. If not utilized, federal net operating losses of $ 29 million may be carried forward indefinitely, and $ 27.2
million will expire at various times between 2031 and 2037. State net operating losses follow the federal tax laws for NOLs.

 Management has evaluated all
other tax positions that could have a significant effect on the financial statements and determined the Company had no uncertain income
tax positions at December 31, 2024.

 The Company files income tax
returns in the U.S. federal jurisdiction and Florida. The Company is subject to U.S. federal and Florida state tax examinations for certain
years after 2018.

 NOTE 3 – RECENT ACCOUNTING PRONOUNCEMENTS

 There are several new
accounting pronouncements issued or proposed by the FASB. Each of these pronouncements, as applicable, has been or will be adopted by
the Company. Management does not believe any of these accounting pronouncements has had or will have a material impact on the Company's
consolidated financial position or operating results.

 In June 2016, the FASB issued
Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments – Credit Losses (Topic 326). The ASU introduces
a new credit loss methodology, Current Expected Credit Losses (CECL), which requires earlier recognition of credit losses, while also
providing additional transparency about credit risk. Since its original issuance in 2016, the FASB has issued several updates to the
original ASU. The CECL Methodology utilizes a lifetime "expected credit loss" measurement objective for the recognition of
credit losses for loans, held-to-maturity securities and other receivables at the time the financial asset is originated or acquired.
The expected credit losses are adjusted each period for changes in expected lifetime credit losses. The methodology replaces the multiple
existing impairment methods in current GAAP, which generally require that a loss be incurred before it is recognized. For available-for-sale
securities where fair value is less than cost, credit related impairment, if any, will be recognized through an allowance for credit
losses and adjusted each period for changes in credit risk. The CECL methodology represents a significant change from existing US GAAP
and may result in material changes to the Company's accounting for financial assets. The Company is evaluating the effect that
ASU 2016-13 will have on its Consolidated Financial Statements and related disclosures.

 In August 2020, the FASB issued
ASU No. 2020-06, Debt – Debt with Conversion and other Options (Subtopic 70-20) and Derivatives and Hedging – Contracts in
Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's instruments by
removing major separation models required under current accounting principles generally accepted in the United States of America ("U.S.
GAAP"). ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative
scope exceptions and also simplifies the diluted earnings per share calculation in certain areas. The standard is effective for public
business entities, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years and interim
periods within those fiscal years beginning after December 15, 2021. For all other entities, the standard will be effective for fiscal
years beginning after December 12, 2023. Early adoption is permitted but no earlier than fiscal years beginning after December 15, 2020,
and adoption must be as of the beginning of the Company's annual fiscal year. The standard was adopted on January 1, 2021. By no
longer recording embedded conversion features separately from the convertible debt instrument, and instead as a single liability, the
Company's financial statements will reflect a more simplified view of convertible debt instruments and cash interest expense that
is more relevant than an imputed interest expense that results from the separation of conversion features previously required by U.S.
GAAP.

 NOTE 4 – OPERATING LEASE

 On January 18, 2019, the Company
entered into an agreement to lease approximately 25,470 square feet of office and manufacturing space in Pompano Beach, Florida through
March 2024. On March 25, 2019, the Company entered into an amendment to the agreement to increase the square footage of leased premises
to 36,900 square feet, increasing the Company's base rent obligation to be approximately $ 33,825 per month for one year and nine
months, and increasing annually at a rate of three percent for the remainder of the lease term.

 In accordance with ASC 842,
on January 18, 2019, the Company entered into and recorded a lease right-of-use asset and a lease liability at a present value of $ 1,405,804.
The right-of-use asset is composed of the sum of all lease payments plus any initial direct cost and is amortized over the life of the
expected lease term. For the expected term of the lease, the Company used the initial term of the five-year lease.

 As of December 31, 2022, the
Company vacated the lease and no further obligation is due. The Company's headquarters were moved to 2660 NW 15 CT, Unit 108, Pompano
Beach, FL 33069. As of this filing the Company has not entered into a lease agreement with the landlord.

 For the years ended December
31, 2024 and 2023, the Company expensed $ 36,315 and $ 0, respectively, for rent.

 F- 12

 NOTE
5 – NOTES PAYABLE – CONVERTIBLE

 Notes payable – convertible totaled $ 0 and $ 0 at December
31, 2024 and December 31, 2023, respectively.

 On August 3, 2020, the Company
issued an unsecured convertible promissory note to an accredited investor in exchange for $ 10,000 bearing an interest rate of 18 % per
annum and payable in six months. The Company shall pay interest on the unconverted and then outstanding principal amount of the note
at a rate of 18 % per annum, accrued monthly for the first four months of this note and payable thereafter until the maturity date of
 February 3, 2021, unless the note is converted or prepaid prior to maturity. The holder may convert the unpaid principal balance of the
note into restricted common stock, par value $ 0.001 per share, of the Company at the conversion rate equal to the per share cash price
paid for the shares by any third-party investor(s) with total proceeds to the Company of not less than $ 500,000 (the "conversion
price"); provided, however, in no event shall the conversion price ever be less than $ 0.01 per share. On February 16, 2021, the
$ 10,000 note was paid along with accrued interest in the amount of $ 1,007.

 Interest expense for the Company's
convertible notes payable was $ 0 for the years ended December 31, 2024 and December 31, 2023, respectively. Accrued interest for the
Company's convertible notes payable at December 31, 2024 and December 31, 2023 was $ 0 and $ 0, respectively, and is included in
accrued expenses on the consolidated balance sheets.

 NOTE 6 – NOTES PAYABLE – CONVERTIBLE – RELATED PARTY

 Notes payable – convertible
– related party totaled $ 2,144,357 for the year end December 31, 2024 and December 31, 2023, respectively.

 On August 3, 2020, the Company
issued an unsecured convertible promissory note to Michael V. Barbera, the Chairman of the Board, in exchange for $ 25,000 bearing an
interest rate of 18 % per annum and payable in six months. The Company shall pay interest on the unconverted and then outstanding principal
amount of the note at a rate of 18% per annum, accrued monthly for the first four months of this note and payable thereafter until the
maturity date of February 3, 2021, unless the note is converted or prepaid prior to maturity. The holder may convert the unpaid principal
balance of the note into restricted common stock, par value $ 0.001 per share, of the Company at the conversion rate equal to the per
share cash price paid for the shares by any third-party investor(s) with total proceeds to the Company of not less than $ 500,000 (the
"conversion price"); provided, however, in no event shall the conversion price ever be less than $ 0.01 per share. On February
16, 2021, the $ 25,000 note was paid along with accrued interest in the amount of $ 2,518.

 On August 3, 2020, the Company
issued a secured convertible promissory note to certain investors in exchange for $ 1,000,000 in the aggregate bearing an interest rate
of 20% per annum and payable in 6 months. The holder may convert the unpaid principal balance of the note into shares of restricted common
stock of the Company at the conversion price equal to $0.275 per share, which conversion price was set with the consummation of the Company's
private placement of Units (described in note 10) which closed on August 17, 2021. This note contains a negative covenant that requires
the Company to obtain consent prior to incurring any additional equity or debt investments and is secured by all of the assets of the
Company. The Richard A. LoRicco Sr. and Lucille M. LoRicco Irrevocable Insurance Trust DTD 4/28/95, Louis Demaio as Trustee (the "Trust")
is the holder of $ 750,000 of the principal amount of this note. The Trust was created by Richard A. LoRicco Sr. and Lucille M. LoRicco,
who were the parents of Ronald J. LoRicco Sr., one of the members of the Company's Board of Directors and is maintained by an independent
trustee. Ronald J. LoRicco Sr. does not have voting or investment control of or power over the Trust but is an anticipated, partial beneficiary
of the Trust.

 On February 12, 2021, the Company
exchanged the original debt for a newly issued amended and restated secured convertible promissory note with a new principal balance
of $ 1,610,005 bearing an interest rate of 20 % per annum and fully payable in 3 months. This was accounted for as a debt extinguishment
and the new promissory note was recorded at fair value in accordance with ASC 470 "Debt". The original principal of $ 1,000,000
and accrued interest of $ 110,005 calculated as of the date of amendment and restatement along with an additional advance of $500,000
determined the principal amount of the new note. In consideration of the additional advance and the extension of the maturity date of
the original note, the Company issued to the noteholders 15,000,000 5 -year common stock warrants with an exercise price of $0.20. The
issuance of the warrants for the extension generated a loss on extinguishment of $ 3,686,123 for the fair value of the warrants issued.

 On May 12, 2021, the Company
extended the debt for a newly issued amended and restated secured convertible promissory note with a new principal balance of $ 1,689,746
bearing an interest rate of 20 % per annum and fully payable February 12, 2022. The original principal of $ 1,610,005 and accrued interest
of $ 79,742 calculated as of the date of amendment and restatement determined the principal amount of the new note. In consideration of
the additional advance and the extension of the maturity date of the original note, the Company issued to the noteholders 7,500,000 5 -year
common stock warrants with an exercise price of $ 0.35. The issuance of the warrants for the extension generated a loss on extinguishment
of $ 1,874,705 for the fair value of the warrants issued. The note was not paid by its due date; as of the date of this filing, the noteholder
has not issued a formal demand for payment and the Company is in negotiations with the noteholder to remedy the past-due status.

 On September 15, 2022, the
Company extended the debt for a newly issued amended and restated secured convertible promissory note with a new principal balance of
$ 2,144,357 bearing an interest rate of 20 % per annum and fully payable February 12, 2023. The amended principal of $ 1,689,746 and accrued
interest of $ 454,612 calculated as of the date of amendment and restatement determined the principal amount of the new note. No additional
consideration was provided.

 Interest expense for the Company's
convertible notes payable – related parties was $ 0 for the years ended December 31, 2024 and December 31, 2023, respectively.

 Accrued interest for the Company's
convertible notes payable – related parties at December 31, 2024 and December 31, 2023 was $ 993,434 and $ 554,595, respectively,
and is included in accrued expenses on the consolidated balance sheets.

 F- 13

 NOTE 7 – NOTES PAYABLE

 Notes payable totaled $ 270,000 at December 31, 2024 and December
31, 2023, respectively.

31, 2018, the Company issued unsecured, 4 % demand promissory notes to VCVC, LLC ("VCVC") totaling $ 260,425. VCVC is the personal
holding company of Vincent L. Celentano, who was our chairman and chief executive officer at the time of the notes. On July 8, 2020,
the Company negotiated with the noteholder to agree to settle the remaining principal balance of $ 191,965 and accrued interest of $ 15,729
for $ 150,000 of restricted common shares. The remaining balance of $ 57,694 was forgiven resulting in a gain from the extinguishment of
debt. The conversion price of $0.132 per share was agreed upon for 1,136,364 restricted common shares and an equal amount of five -year
warrants with an exercise price of $ 0.396 per share.

 2333

 On March 31, 2022 and
March 30, 2021, the Company entered financing arrangements to finance the insurance premiums for its liability coverage. The financings
have an interest rate of 9.40% and last through March of 2023. The balance as of December 31, 2022 and 2021 was $ 5,200 and $ 6,015, respectively.

 On February 25, 2021, the Company
entered a promissory note agreement with its bank for $ 165,747 loan bearing an interest rate of 1.0 % per annum. The loan was made pursuant
to the Paycheck Protection Program under the Second Draw PPP Legislation after receiving confirmation from the U.S. Small Business Administration
("SBA"). The Paycheck Protection Program Flexibility Act requires that the funds be used to maintain the current number of
employees as well as cover payroll-related costs, monthly mortgage or rent payments and utilities and not more than 40% can be expended
on non-payroll-related costs. The applicable maturity date will be the maturity date as established by the SBA. If the SBA does not establish
a maturity date or range of allowable maturity dates, the term will be five years. The Company received forgiveness of the debt in July
2022. The balance as of December 31, 2022 was $ 0 and 2021 was $ 165,747.

 On April 2, 2021, the
Company issued a promissory note with an investor in exchange for $ 200,000 bearing an interest rate of 18 % per annum and payable on October
2, 2023. The company also issued 2,000,000 common stock warrants at an exercise price of $ 0.20 per share expiring in 5 years. The note
was not paid by its due date. As of the date of this filing, the noteholder has not issued a formal demand for payment and the Company
is in negotiations with the noteholder to remedy the past-due status.

 On April 9, 2021, the Company
issued a promissory note with an investor in exchange for $ 50,000 bearing an interest rate of 18 % per annum and payable on October 9,
2022. The company also issued 500,000 common stock warrants at an exercise price of $ 0.20 per share expiring in 5 years. The note was
not paid by its due date. As of the date of this filing, the noteholder has not issued a formal demand for payment and the Company is
in negotiations with the noteholder to remedy the past-due status.

 On April 16, 2021, the Company
issued a promissory note with an investor in exchange for $ 25,000 bearing an interest rate of 18 % per annum and payable on October 16,
2022. The company also issued 250,000 common stock warrants at an exercise price of $ 0.25 per share expiring in 5 years. As of the date
of this filing, the noteholder has not issued a formal demand for payment and the Company is in negotiations with the noteholder to remedy
the past-due status.

 On April 16, 2021, the Company
issued a promissory note with an investor in exchange for $ 20,000 bearing an interest rate of 18 % per annum and payable on October 16,
2022. The company also issued 200,000 common stock warrants at an exercise price of $ 0.25 per share expiring in 5 years. As of the date
of this filing, the noteholder has not issued a formal demand for payment and the Company is in negotiations with the noteholder to remedy
the past-due status.

 On April 16, 2021, the Company
issued a promissory note with an investor in exchange for $ 300,000 bearing an interest rate of 18 % per annum and payable in one year.
The company also issued 3,000,000 common stock warrants at an exercise price of $ 0.25 per share expiring in 5 years. On May 21, 2021,
the investor converted the promissory note of $300,000 in exchange for 6,000,000 common stock warrants at an exercise price of $0.15
per share expiring in 5 years. The accrued interest of $ 5,199 was forgiven. The conversion of the debt to warrants generated a loss on
extinguishment of $ 1,487,386 for the fair value of the warrants issued.

 Interest expense for the Company's
notes payable was $ 0 for the years ended December 31, 2024 and 2023, respectively.

 Accrued interest for the Company's
notes payable at December 31, 2024 and December 31, 2023 was $ 236,963 and $ 159,630, respectively, and is included in accrued expenses
on the consolidated balance sheets.

 F- 14

 NOTE 8 – NOTES PAYABLE – RELATED PARTY

 Notes payable – related
party totaled $ 2,128,000 and $ 1,750,000 at December 31, 2024 and December 31, 2023, respectively.

 On January 16, 2020, the Company
entered into a demand note agreement with our Board Chairman, Michael V. Barbera, in the amount of $ 50,000. The note has a term of 6
months bearing an interest rate of 10 % per annum. On April 13, 2020, an addendum was executed, changing the terms of the note to a convertible
note payable bearing an interest rate of 12 % per annum. Per the addendum, the principal and accrued interest is convertible at the option
of the holder after June 5, 2020, at a 20% discount of that day's closing price. See Note 6 for information regarding this convertible
note payable – related party.

 On April 2, 2021, the Company
issued a promissory note with Paul Sallarulo, a member of our Board of Directors, in exchange for $ 150,000 bearing an interest rate of
 18 % per annum and payable on October 2, 2022. The company also issued 1,500,000 common stock warrants at an exercise price of $0.20 per
share expiring in 5 years. The note was not paid by its due date. On April 2, 2022, the due date of this note was extended to April 1,
2024. As of the date of this report, the note has not been called.

 On April 2, 2021, the Company
issued a promissory note with Michael V. Barbera, our Chairman of the Board, in exchange for $ 150,000 bearing an interest rate of 18 %
per annum and payable on October 2, 2022. The company also issued 1,500,000 common stock warrants at an exercise price of $0.20 per share
expiring in 5 years. The note was not paid by its due date. On April 2, 2022, the due date of this note was extended to April 1, 2024.
As of the date of this report, the note has not been called.

 On August 31, 2022, the
Company issued a promissory note to a board member in exchange for $ 37,000 bearing an interest rate of 10 % per annum and payable on August
31, 2024.

 On August 22, 2022, the Company
issued a promissory note to a board member in exchange for $ 20,000 bearing an interest rate of 10 % per annum and payable on August 22,
2024.

 On August 22, 2022, the
Company issued a promissory note to a board member in exchange for $ 5,000 bearing an interest rate of 10 % per annum and payable on August
22, 2024.

 On August 29, 2022, the
Company issued a promissory note to a board member in exchange for $ 25,000 bearing an interest rate of 10 % per annum and payable on August
29, 2024.

 On August 29, 2022, the
Company issued a promissory note to a board member in exchange for $ 10,000 bearing an interest rate of 10 % per annum and payable on August
29, 2024.

 On August 31, 2022, the
Company issued a promissory note to a board member in exchange for $ 13,000 bearing an interest rate of 10 % per annum and payable on August
31, 2024.

 On September 9, 2022,
the Company issued a promissory note to a board member in exchange for $ 60,000 bearing an interest rate of 10 % per annum and payable
on August 16, 2024.

 On September 9, 2022,
the Company issued a promissory note to a board member in exchange for $ 10,000 bearing an interest rate of 10 % per annum and payable
on September 9, 2024.

 On September 9, 2022, the Company
issued a promissory note to a strategic partner in exchange for $ 10,000 bearing an interest rate of 10 % per annum and payable on September
9, 2024.

 On September 9, 2022,
the Company issued a promissory note to a strategic partner in exchange for $ 15,000 bearing an interest rate of 10 % per annum and payable
on September 9, 2024.

 On September 9, 2022,
the Company issued a promissory note to an investor and advisor to the board, in exchange for $ 15,000 bearing an interest rate of 10 %
per annum and payable on September 9, 2024.

 On September 22, 2022,
the Company issued a promissory note to a board member in exchange for $ 42,500 bearing an interest rate of 18 % per annum and payable
on September 22, 2024.

 On September 22, 2022,
the Company issued a promissory note to an investor and advisor to the board in exchange for $ 42,500 bearing an interest rate of 18 %
per annum and payable on September 22, 2024.

 On February 14, 2023, the Company
issued a promissory note to a board member in exchange for $ 10,000 bearing an interest rate of 20 % per annum and payable on February
13, 2024.

 On
February 24, 2023, the Company issued a promissory note to a board member in exchange for $ 50,000 bearing an interest rate of 20 % per
annum and payable on February 23, 2024.

 F- 15

 On March 3, 2023, the Company
issued a promissory note to a board member in exchange for $ 15,000 bearing an interest rate of 20 % per annum and payable on March 2,
2024.

 On March 24, 2023, the Company
issued a promissory note to a board member in exchange for $ 15,000 bearing an interest rate of 20 % per annum and payable on March 23,
2024.

 On April 12, 2023, the Company
issued a promissory note to a board member in exchange for $ 150,000 bearing an interest rate of 20 % per annum and payable on April 11,
2024.

 On April 28, 2023, the Company
issued a promissory note to a board member in exchange for $ 100,000 bearing an interest rate of 20 % per annum and payable on April 27,
2024.

 On May 12, 2023, the Company
issued a promissory note to a board member in exchange for $ 100,000 bearing an interest rate of 20 % per annum and payable on May 11,
2024.

 On June 5, 2023, the Company
issued a promissory note to a board member in exchange for $ 100,000 bearing an interest rate of 20 % per annum and payable on June 4,
2024.

 On July 25, 2023, the Company
issued a promissory note to a board member in exchange for $ 200,000 bearing an interest rate of 20 % per annum and payable on July 24,
2024.

 On September 11, 2023, the
Company issued a promissory note to a board member in exchange for $ 150,000 bearing an interest rate of 20 % per annum and payable on
 September 10, 2024.

 On September 11, 2023, the
Company issued a promissory note to an advisor to the board in exchange for $ 50,000 bearing an interest rate of 20 % per annum and payable
on September 10, 2024.

 On November 2, 2023, the Company
issued a promissory note to a board member in exchange for $ 100,000 bearing an interest rate of 20 % per annum and payable on November
1, 2024.

 On December 12, 2023, the Company
issued a promissory note to a board member in exchange for $ 75,000 bearing an interest rate of 20 % per annum and payable on December
11, 2024.

 On January 9, 2024, the Company
issued a promissory note to a board member in exchange for $ 23,000 bearing an interest rate of 20 % per annum and payable on January 8,
2025.

 On March 6, 2024, the Company
issued a promissory note to a board member in exchange for $ 40,000 bearing an interest rate of 20 % per annum and payable on March 5,
2025.

 On March 21, 2024, the Company
issued a promissory note to a board member in exchange for $ 15,000 bearing an interest rate of 20 % per annum and payable on March 20,
2025.

 On May 12, 2024, the Company
issued a promissory note to a board member in exchange for $ 25,000 bearing an interest rate of 20 % per annum and payable on May 11, 2025.

 On June 26, 2024, the Company
issued a promissory note to a board member in exchange for $ 100,000 bearing an interest rate of 20 % per annum and payable on June 25,
2025.

 On August 13, 2024, the Company
issued a promissory note to a board member in exchange for $ 25,000 bearing an interest rate of 20 % per annum and payable on August 12,
2025.

 On September 6, 2024, the Company
issued a promissory note to a board member in exchange for $ 50,000 bearing an interest rate of 20 % per annum and payable on September
5, 2025.

 On October 2, 2024, the Company issued a promissory
note to a board member in exchange for $ 100,000 bearing an interest rate of 20 % per annum and payable on October 1, 2025.

 On December 13, 2024, the Company issued a promissory
note to a board member in exchange for $ 50,000 bearing an interest rate of 20 % per annum and payable on December 12, 2025.

 F- 16

 Interest expense for the Company's
notes payable – related party was $ 0 and $ 566,429 for the years ended December 31, 2024 and 2023, respectively.

 Accrued interest for the Company's
notes payable at December 31, 2024 and December 31, 2023 was $ 418,563 and $ 287,725, respectively, and is included in accrued expenses
on the consolidated balance sheets.

 NOTE 9 – COMMITMENTS AND CONTINGENCIES

 On July 9, 2021, the Company
proposed a liquidation of liability to an individual with regard to a dispute concerning the acquisition of a territory from Rockstar
LLC. The proposed settlement would be 500,000 shares of Basanite common stock. The Company accrued a liability in the amount of $ 165,000
in connection with this matter for the year ended 2021. Subsequent to year end, the Company and the individual signed an agreement for
settlement. As of this filing no further action was taken, and the accrual was reversed for the year ended 2023.

 No commitments and contingencies to be disclosed for year-end
December 31, 2024.

 Legal Matters

 From time to time, we may become involved
in legal proceedings that, individually or in the aggregate, could have a material adverse effect on our business, financial condition,
cash flows, or results of operations.

 As of the date of this report, the Company
has filed a lawsuit in the state of South Carolina against Upstate Custom Products, LLC. The lawsuit is based on the contract entered
into by both parties in August 2021 in relation to the manufacturing of the protrusion machines exclusively manufactured by Upstate Custom
Products. LLC. In January 2024, the matter was moved to the Southern District of Florida.

 As of this filing the lawsuit and claim for
relief is ongoing.

 On or about October 2023, the Company was
served notice of a pending matter of litigation with GS Capital Partners of New York regarding the liquidated damages fees from the 2021
PIPE investment. This matter is presently pending in the New York Superior Court. As of this filing, the matter remains unresolved.

 Due to our cash flow and liquidity challenges,
we have received demand letters from several vendors to our company seeking payment of past due amounts to such vendors. As of the date
of this report, such demands have not become formal litigations or other proceedings against our company, but they may become litigations
against us in the future.

 Except as set forth above, as of the date of this report, we are
not aware of any proceedings pending against our company.

 F- 17

 Supplier Agreements

 Concrete Products of the Palm Beaches

 On December 10, 2021, the Company
entered into an Exclusive Supplier Agreement with Concrete Products of the Palm Beaches, Inc. ("CPPB") of Riviera Beach,
Florida. CPPB engaged the Company as its sole and exclusive supplier of BasaFlex, BasaMix, and BasaMesh. On December 10, 2021, the Company
issued a warrant to purchase 40,000,000 shares of the Company's restricted common stock (20,000,000 shares of which had not vested
as of December 31, 2021) at a price of $0.33 per share to U.S. Supplies, Inc., an affiliate of CPPB. U.S. Supplies, Inc. and CPPB are
controlled by Manny Rodriguez, a Director of the Company.

 The Company generated $ 0 in
revenue for custom rebar products delivered under this contract for the year ended December 31, 2024 and the year ended December 31,
2023.

 NOTE 10 – STOCKHOLDERS' DEFICIT

 On August 17, 2021, the Company
conducted the closing of a private placement offering to accredited investors of the Company's units at a price of $ 0.275 per unit,
with each unit consisting of: (i) one share of the Company's common stock, (ii) a five-year, immediately exercisable warrant ("Warrant
A") to purchase one share of common stock at an exercise price of $ 0.33 per share and (iii) an additional five-year, immediately
exercisable warrant to purchase one share of common stock at an exercise price of $ 0.33 per share ("Warrant B"). The Warrant
A and Warrant B are identical, except that the Warrant B has a call feature in favor of the Company, as defined in the offering agreements.
In connection with the closing, the Company entered into definitive securities purchase agreements with 19 accredited investors and issued
an aggregate of 19,398,144 shares of common stock, Warrant A to purchase up to an aggregate of 19,398,144 shares of common stock, and
Warrant B to purchase up to an aggregate of 19,398,144 shares of Common Stock (for an aggregate of 38,796,288 Warrant Shares), for aggregate
gross proceeds to the Company of approximately $5,334,490. Costs of the offering in the amount of $611,603 were charged to additional
paid in capital. As of December 31, 2022, the Company also accrued the amount of $386,759 as liquidated damages due to the investors
in the Company's August 2021 private placement, such liquidated damages being related to the Company's failure to timely
file a registration statement on Form S-1 for an underwritten public offering and concurrent listing of the Common Stock on a national
exchange.

31, 2024, the Company issued a total 0 restricted common shares in exchange for $ 0 in net cash proceeds.

31, 2023, the Company issued a total 0 restricted common shares in exchange for $ 0 in net cash proceeds.

31, 2024, the Company issued 0 shares of common stock to officers of the Company.

31, 2023, the Company issued 2,000,000 shares of common stock to officers of the Company. The shares were valued at the closing stock
price on the date of grant for a total expense of $ 100,000. Total stock-based compensation for the year ended December 31, 2023 was $ 164,266.

 The Company raised $1,300,000
pursuant to a private placement of Common Stock and exercise of warrants in 2022 – this amount is carried on the balance sheet
as a current liability as of December 31, 2022, because the shares had not been issued to the investors at that time. During the year
ended December 31, 2023, the Company issued the shares and relieved the subscription liability. Subscription Liability as of December
31, 2024 and 2023 was $ 0 respectively.

 NOTE 11 – OPTIONS AND WARRANTS

 Stock Options:

 The following table provides the activity in options for the
respective periods:

 Schedule of option activity

 Weighted

 Total Options

 Average

 Aggregate

 Outstanding

 Price

 Intrinsic
 Value

 at January 1, 2024

 1,277,778

 $
 0.01

 $
 —

 Cancelled

 —

 —

 —

 at December 31, 2024

 1,277,778

 $
 0.00

 $

 Issued

 10,250,000

 0.06

 —

 Exercised

 —

 —

 —

 Cancelled

 —

 —

 —

 at December 31, 2024

 12,727,778

 $
 0.06

 $
 325,250

 F- 18

 Options exercisable and outstanding at December 31, 2023 are
as follows:

 Schedule of options exercisable

 Weighted Average

 Range of

 Number

 Remaining
 Contractual Life

 Weighted Average

 Aggregate

 Prices

 Outstanding

 (Years)

 Price

 Intrinsic
 Value

 $ 0.01
 - $ 0.50

 11,727,778

 5.019

 $
 0.27

 $
 325,250

 $ 0.51
 - $ 1.00

 1,000,000

 0.0

 —

 —

 12,727,778

 $
 325,250

 Stock Warrants:

 The following table provides the activity in warrants for the
respective periods:

 Schedule of warrants activity

 Weighted

 Average

 Aggregate

 Total Warrants

 Price

 Intrinsic
 Value

 at December 31, 2023

 125,295,757

 $
 0.30

 $
 135,272

 Granted

 —

 —

 Exercised

 —

 —

 Cancelled

 —

 —

 at January 1, 2023

 129,295,757

 $
 0.30

 $
 135,272

 Granted

 —

 —

 Exercised

 —

 —

 Cancelled

 ( 8,313,094
)

 —

 at December 31, 2023

 121,552,663

 $
 0.30

 $
 39,443

 Warrants exercisable and outstanding at December 31, 2024 are
as follows:

 Schedule of warrants exercisable and outstanding

 Weighted Average

 Range of

 Number

 Remaining
 Contractual Life

 Weighted Average

 Aggregate

 Prices

 Outstanding

 (Years)

 Price

 Intrinsic
 Value

 $ 0.01
 - $ 0.50

 121,552,663

 2.21

 $
 0.30

 $
 39,443

 $ 0.51
 - $ 1.00

 —

 —

 —

 —

 121,552,663

 $
 39,443

 NOTE 12 - MATERIAL AGREEMENTS

 Issuances 2024

agreed to become the Acting Chief Executive Officer of Basanite, Inc. (the "Company") through June 30, 2025. As an independent
contractor, Mr. Manav has been performing advisory services to our Company since September 1, 2024. Mr. Manav's services to the
Company will be at a monthly salary of $ 17,250 plus expenses approved by the Chairman. The monthly salary of $17,250 will be deferred
and accrued until such time as $1,000,000 is raised by the Company and at which time any deferred compensation will be paid immediately
to him. Upon $1,000,000 being raised by the Company, the Company will also pay Mr. Manav his monthly salary on the first day of each month
through June 2025. Mr. Manav also received options to purchase 5 million shares of the Company's common stock with a strike price
of $.0275 equal to the closing price of the Company's common stock as quoted by the OTCQB Market on the date of signing his engagement
letter. The option will have a term of five years from the date of issuance. The options will also contain standard cashless exercise
provisions as well as piggy-back registration rights for future stock registrations that the Company may file. The options vest under
the following schedule: 1.5 million options immediately upon the execution of his engagement agreement, 1.5 million options vest upon
the completion of a minimum of $1 million of aggregate financing into the Company after the date of his engagement letter and 2 million
options vesting upon the anniversary of the first 90-day period the Company achieves operational break even as defined in the engagement
letter. Mr. Manav received $25,000 upon execution of the engagement letter for work conducted in September of 2024. As an independent
contractor, Mr. Manav is not entitled to receive any employee benefits. The engagement letter will automatically terminate no later than
June 30, 2025, unless the Company and Mr. Manav mutually agree on an extension. As of this filing Mr. Manav has transitioned to an operational
executive role in preparation for our forthcoming manufacturing facility in Twinsburg, Ohio.

 F- 19

 On October 2, 2024, Steve Heard
agreed to become an advisor to the Board of Directors of Basanite, Inc. (the "Company") through June 30, 2025. As an independent
contractor, Mr. Heard will advise the Board of Directors and Management of the Company on matters relating to capital markets, investor
relations, and business development and introduce potential strategic partners and investors to the Company. A one-time fee of $37,500
will be deferred and accrued until such time as $1,000,000 is raised by the Company and which time any deferred compensation will be paid
immediately to him. Mr. Heard also received options to purchase 7.5 million shares of the Company's common stock with a strike price
of $.0275 equal to the closing price of the Company's common stock as quoted by the OTCQB Market on the date of signing his engagement
letter. The option will have a term of five years from the date of issuance. The options will also contain standard cashless exercise
provisions as well as piggy-back registration rights for future stock registrations that the Company may file. The options vest under
the following schedule: 3.75 million options immediately upon the execution of his engagement agreement, 3.75 million options vest upon
the completion of a minimum of $1 million of aggregate financing into the Company after the date of his engagement letter. As an independent
contractor, Mr. Heard is not entitled to receive any employee benefits. The engagement letter will automatically terminate no later than
June 30, 2025 unless the Company and Mr. Heard mutually agree on an extension.

 On October 2, 2024, Maxwell
J. Heard agreed to become an advisor to the Board of Directors of Basanite, Inc. (the "Company") through June 30, 2025. As
an independent contractor, Mr. Heard will advise the Board of Directors and Management of the Company on matters relating to capital markets,
investor relations, and business development and introduce potential strategic partners and investors to the Company. A one-time fee of
$12,500 will be deferred and accrued until such time as $1,000,000 is raised by the Company and which time any deferred compensation will
be paid immediately to him. Mr. Heard also received options to purchase 2.5 million shares of the Company's common stock with a
strike price of $.0275 equal to the closing price of the Company's common stock as quoted by the OTCQB Market on the date of signing
his engagement letter. The option will have a term of five years from the date of issuance. The options will also contain standard cashless
exercise provisions as well as piggy-back registration rights for future stock registrations that the Company may file. The options vest
under the following schedule: 1.25 million options immediately upon the execution of his engagement agreement, 1.25 million options vest
upon the completion of a minimum of $1 million of aggregate financing into the Company after the date of his engagement letter. As an
independent contractor, Mr. Heard is not entitled to receive any employee benefits. The engagement letter will automatically terminate
no later than June 30, 2025 unless the Company and Mr. Heard mutually agree on an extension.

 On October 2, 2024, Frederick
Berndt agreed to become an advisor to the Board of Directors of Basanite, Inc. (the "Company") through June 30, 2025. As an
independent contractor, Mr. Berndt will advise the Board of Directors and Management of the Company on matters relating to capital markets,
investor relations, and introduce potential strategic partners and investors to the Company. A one-time fee of $50,000 will be deferred
and accrued until such time as $1,000,000 is raised by the Company and which time any deferred compensation will be paid immediately to
him. Mr. Berndt also received options to purchase 10 million shares of the Company's common stock with a strike price of $.0275
equal to the closing price of the Company's common stock as quoted by the OTCQB Market on the date of signing his engagement letter.
The option will have a term of five years from the date of issuance. The options will also contain standard cashless exercise provisions
as well as piggy-back registration rights for future stock registrations that the Company may file. The options vest under the following
schedule: 3 million options immediately upon the execution of his engagement agreement, 3 million options vest upon the completion of
a minimum of $1 million of aggregate financing into the Company after the date of his engagement letter and 4 million options vesting
upon the anniversary of the first 90-day period the Company achieves operational break even as defined in the engagement letter. Mr. Berndt
is not entitled to receive any employee benefits. The engagement letter will automatically terminate no later than June 30, 2025 unless
the Company and Mr. Berndt mutually agree on an extension.

 F- 20

 NOTE 13 – SUBSEQUENT EVENTS

 On March 17, 2025, the Board
of Directors, through a vote of its Chairman and Directors appointed Mr. Andrew Acquarulo, Jr., 62, to serve a member of its Board of
Directors. Mr. Andrew Acquarulo Jr., Andrew Acquarulo Jr. is a seasoned executive and entrepreneur with over three decades of leadership
experience in the security, communications, and technology industries. He has a proven track record of driving business growth, optimizing
operations, and successfully executing strategic initiatives in both private and corporate environments. Most recently, Andrew served
as the North American Business Leader at ACRE Security, where he had P&L responsibility of $75M and spearheaded market expansion
efforts that resulted in annual revenue growth exceeding 10%. He also played a critical role in positioning the company for long-term
investment opportunities by executing a robust three-year exit strategy.

 Prior to ACRE, Andrew co-founded
and led ComNet Communications, LLC, a global provider of Layer 2 Ethernet solutions for security and data transmission applications.
Under his leadership, the company expanded internationally and became an industry leader before its successful acquisition by ACRE Security
in 2016. Andrew's extensive career also includes leadership roles at GE Security, where he had P&L responsibility of $120M
and drove a 30% improvement in EBITDA, as well as at International Fiber Systems, which he co-founded and grew into a dominant player
in the security and data communications market before its acquisition by General Electric.

 With expertise spanning sales
channel development, global supply chain optimization, operational efficiencies, and financial strategy, Andrew brings a results-driven
approach to every organization he leads. He holds a B.S. in Electrical Engineering and an A.S. in Mechanical Engineering from the University
of Hartford, along with a Six Sigma Green Belt certification from General Electric.

 On March 18, 2025, Michael
Dennis Nelson agreed to become the Chief Executive Officer of Basanite, Inc. (the "Company") through April 1, 2028. As
an employee, Mr. Nelson's services to the Company will be compensated as a salary of $17,250 per month plus employee incurred
expenses which are approved by the Chairman. The monthly salary of $ 17,250
will be deferred and accrued until such time as $500,000 or ninety days have elapsed and is raised by the Company and which time any
deferred compensation will be paid immediately to him. Upon $1,500,000 being raised by the Company, the Company will also pay Mr.
Nelson his monthly salary on the first day of each month through April 2028.

 Mr. Nelson also received options
to purchase 7 million shares of the Company's common stock with a strike price of $.0390 equal to the closing price of the Company's
common stock as quoted by the OTCQB Market on the date of signing his engagement letter. The option will have a term of five years from
the date of issuance. The options will also contain standard cashless exercise provisions as well as piggy-back registration rights for
future stock registrations that the Company may file.

 The options vest under the
following schedule: 1.5 million options immediately upon the execution of his engagement agreement, 1.5 million options vest upon the
completion of a minimum of $500,000 of aggregate financing into the Company after the date of his engagement letter, 2 million options
vest upon the completion of a minimum of $1,500,000 of aggregate financing into the Company after the date of his engagement letter and
2 million options vesting upon the anniversary of the first 90-day period the Company achieves operational break even as defined in the
engagement letter. As an executive employee of the Company, Mr. Nelson is entitled to receive any and all employee benefits such as paid
time off of six weeks in line with the Company's employee handbook. The Company also offers all employees healthcare insurance
benefits, which Mr. Nelson has waived. The engagement letter will automatically terminate no later than April 1, 2028, unless the Company
and Mr. Nelson mutually agree on an extension.

 Michael Dennis Nelson, 47,
is a seasoned executive with extensive experience in strategic communications, international relations, and organizational leadership.
He currently serves as the Chief Operating Officer of the Global Energy Security Institute, where he oversees financial operations, corporate
sponsorship programs, and external communications strategies for a multimillion-dollar think tank focused on energy, security, and diplomacy.

 Previously, Mr. Nelson was
the Director of Operations at the Institute for the Study of War, where he led multifunctional teams in public relations, donor engagement,
and strategic growth initiatives. His tenure resulted in record-breaking fundraising and enhanced public engagement efforts. In addition
to his executive leadership roles, Mr. Nelson is a contributing member of the Atlantic Council's Counterterrorism Project, providing
insights into global security threats. He has also held leadership positions at the National Security Institute and George Mason University,
where he focused on defense policy, national security, and leadership development.

 Mr. Nelson has a distinguished
military background, having served in key roles at U.S. Central Command and Special Operations Command-Central. His expertise includes
leading multinational teams, crisis management, and strategic planning in complex geopolitical environments. He holds a Master of Business
Administration from the University of Virginia Darden School of Business, a Master of Science in Strategic Communication from Columbia
University (expected May 2025), and a Master of Science in Defense Analysis from the Naval Postgraduate School.

 Mr. Nelson is also a published
author on military strategy and geopolitical affairs, with contributions to Newlines Magazine, Real Clear Defense, and War on the Rocks.