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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, 2023

 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

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: $ 3,085,882 on June 30, 2023.

 On
April 12, 2024, 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 COVID-19 pandemic on the global and
United States economy and the impact it may have on our industry;

 •
 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 by way of 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. In light of 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 5 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 are currently engaged in searching for a new facility to host its operational and manufacturing
activities. As of December 31, 2023 the Company continues to seek a facility to produce its 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.

 iii

 •
 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.

 •
 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.

 iv

 •
 The interests of our principal stockholders, officers, and directors, who
collectively and beneficially own approximately 35.11% 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.

 v

 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 as below under "Management's Analysis and Discussion of Results of Operations"),
we are currently conducting relatively limited operations due to lack of adequate funding. We are working to secure additional funding
of approximately 5 million dollars to increase our manufacturing capacity 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.

 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, therefore, 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: 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 of the weight of equivalent sized steel, meaning 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 in light of 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.

 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 have 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 have
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 of 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 between 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 afford 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 prices 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 through
the use of 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 for our products, indicating what we believe
is a significant level of market interest for BasaFlex. Some of these inquiries would be for very large potential orders for new,
multi-year construction projects. Based on our current manufacturing capacity, these inquiries (if they lead to actual orders) would exceed
our capability to deliver within the customer's requested timeframe, and largely because of this, there is no guarantee that orders
will actually be received without expansion.

 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 has up to two linear production lines (we use one or two lines per machine depending on rebar size – giving a maximum capacity
of 10 manufacturing lines). To date, BI's operations team has successfully optimized and scaled the capacity of our manufacturing
plant to produce up to 25,000 linear feet of BasaFlex rebar per shift, per day, depending on the product mix. BI's own fully
equipped test lab is utilized to evaluate, validate, and verify each product's performance attributes. 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 in a continued search for a new manufacturing
facility.

 To satisfy what we perceive
the market interest for BasaFlex to be, and in particular to address potential large-scale customers like CPPB, we need to significantly
accelerate the expansion of our manufacturing capacity. Our current goal is to locate a new manufacturing facility 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 current 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 has completed thorough testing in our previous Pompano facility, including
initial production runs, and is currently undergoing modifications and upgrades to the final production configuration.

 Based on this trial, we
are planning a two-phase plant expansion, eventually including a total of 10 of these new machines. Our goal, subject to raising sufficient
funding, of about 5 million dollars is to have the first set of five of the new machines installed and be operational by the end of the
third quarter of 2024, and to install and have operational five more, along with additional custom manufacturing equipment, by the fourth
quarter of 2025 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 2025.

 Competition

 The competitive landscape
for concrete reinforcement is intense and can generally be divided into two categories: steel reinforcement, the incumbent since 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 the U.S. 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 U.S. 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 of 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 suppliers for basalt continuous
fiber roving (which is a key component of BasaFlex) are BWF/Kamenny Vek and SRCS, Inc. as a backup supplier. 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 on 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 company 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
in an effort 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 into arrangements to secure additional geographic coverage. We've
also contracted with other representation 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 to provide 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
BasaFlex; BasaMix; BasaMesh and BasaWrap, with the near-term intent to secure BasaPro, BasaMax and BasaLinks.
These trade names represent our BFRP 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, in order 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 full 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. In order 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 wastes 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—to create an innovative, sustainable, productive, and extended future; our 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 the substantial majority of our employees' needs focused on working in engineering, technical and financial
roles. As of December 31, 2023, 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, 2023, our employees had the following gender
demographics:

 Women

 Men

 All employees

 %

 %

 Engineers

 —
 %

 —
 %

 Finance

 %

 —
 %

 Manufacturing

 —
 %

 %

 People
 Managers

 —
 %

 —
 %

 Individual
 Contributors

 —
 %

 —
 %

 At December 31, 2021, 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, 2023, and 20232 we reported net losses of $2,169,379 and $7,971,799 respectively, and
negative cash flow from operating activities of $3,811,627 and $3,907,401, respectively. As of December 31, 2023, we had an aggregate
accumulated deficit of $56,262,389 and $54,093,010 in 2022, 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 5 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 as a result 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,
a number of 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 prospects, and we cannot reliably forecast the future results of our operations. We
expect to increase our operating expenses in the future as a result 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 would 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 prospects 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 prospects. You must
consider our business and prospects in light of 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 have been expended on operating our business. We will thus require
substantial additional capital estimated at 5 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 prices at which our shares currently trade.
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.

 Give 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.

 We currently owe approximately
$2,144,357,695 plus $554,595 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, 2024, and as of the date of this Annual Report, no event of default has been called by the note holder.

 Given our limited cash
resources at this time, 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 the
United States given our limited resources and 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 of 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 as a result 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 as a result 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 as a result of a number of 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 develop additional infrastructure in our manufacturing capability as well as in sales, technical and client
support functions. Our lack of capital resources has delayed our plans to augment our manufacturing capacity, and there is a risk that
we will not have the capital to develop and maintain the capacity or other capabilities necessary for us to implement our business plan.
We will continue to design plans to establish growth, adding manufacturing, technical, sales and sales support resources as capital permits.
If we are unable to 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
to our ability to meet a growing market demand.

 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 are able to 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
BasaFlex on a very limited basis, mainly through distribution partners but also directly. We plan to significantly increase the scope
of our sales and marketing activities, as we grow to include approvals and new material specifications with all major federal, state,
and local agencies and design-build firms. In particular, 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 establish or maintain a suitable sales force or enter into 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 intense,
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 intense and we may not be able 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 are
able to 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 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 relating to 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 are able to 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 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 similar to ours, otherwise avoiding the 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 in order 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 Acting Chief Financial Officer. Our business
would be impeded or harmed if we were to lose her services. In addition, we currently need to fill key officer and other positions,
such a 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 can 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 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 protections
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.

 The novel coronavirus pandemic
has and could continue to adversely impact our business by delaying our ability to receive raw materials and manufacture our product or
otherwise effectively conduct and manage our business.

 The pandemic caused by
the novel coronavirus (known as "COVID-19") and governmental and other efforts to curb the spread of the pandemic has caused
great disruption to the U.S. national and international economies. We have been adversely impacted by COVID-19 in that we have been required
to temporarily suspend operations during 2020 due to necessary quarantines, and the impact of COVID-19 on the construction industry we
service has been significant. Government mandated shutdowns and other measures held less of an impact on our business during 2021, although
we did have personnel absent for periods during the year due to COVID-19. Moreover, the continued prevalence of COVID-19 or outbreaks
of new variants thereof could disrupt our supply chain, as well as our own operations due to absenteeism by infected or ill members of
management or other employees, or absenteeism by members of management and other employees who elect not to come to work due to illness
affecting others in our office or plant, or due to additional necessary quarantines. COVID-19 could also impact members of our Board of
Directors as well as key providers of services to us, which could adversely impact the management of our affairs. Additionally, as the
COVID-19 pandemic continues to develop, we may be required to continue to spend time and resources in monitoring and adhering to government
regulations that impact both our company and our customers and potential customers as necessary, which could also adversely impact our
business and results of operations. We continue to monitor our operations and applicable government recommendations and requirements.

 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 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 secondary supplier, UWF/Kamenny Vek. 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 governmental regulations, requirements and statutes, the violation or alleged violation of which
could have a material adverse effect on our business.

 Our business plan will
be driven in material part 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 governmental 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 contracting, 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, 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 supply and pricing of critically necessary raw materials for 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 adversely
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 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 since with our company since 2021, 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 to 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 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 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.

 At the date of this
Annual Report, 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 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 sell 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 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 interests of our principal stockholders,
officers, and directors, who collectively and beneficially own approximately 38.40% of our stock, may not coincide with yours and such
stockholders will have the ability to substantially influence decisions with which you may disagree.

 As of the date of this
Annual Report, our principal stockholders, officers, and directors beneficially owned approximately 38.4% 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
authorize the Board of Directors, without 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 142,434,090 shares of common stock. The shares of common
stock issuable upon exercise of these warrants are substantial, currently constituting approximately 57% of the total number of shares
of common stock currently issued and outstanding. Therefore, the exercise of a large number of these warrants and public sales of the
shares of common stock underlying these warrants would cause substantial dilution to 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 As and Warrant Bs 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
amount 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 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.

 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 South Carolina against Upstate Custom Products, LLC. The lawsuit
is based on the contract entered into by both parties on 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.

 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, 2022

 $
 0.18

 $
 0.17

 June 30, 2022

 $
 0.12

 $
 0.11

 September 30, 2022

 $
 0.13

 $
 0.10

 December 31, 2022

 $
 0.05

 $
 0.03

 March 31, 2023

 $
 0.04

 $
 0.04

 June 30, 2023

 $
 0.05

 $
 0.04

 September 30, 2023

 $
 0.04

 $
 0.04

 December 31, 2023

 $
 0.01

 $
 0.01

 The closing sales price on
April 15, 2024, was $0.01 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 31, 2024,
there were 277 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, provided for under
Section 4(a)(2) or Regulation D under such Act.

 Issuances in the first quarter of 2024

 None.

 Issuances 2023

 On April 6, 2023, we entered into an
agreement with Thomas Richmond and Michael Giorgi, respectively. An issuance of 1,000,000 shares were issued to each individual in consideration
for services in the roles of Acting Interim Chief Executive Officer and Chief Growth officer, respectively.

 Issuances in 2022

 On January 28, 2022 and
February 3, 2022, we conducted the initial closings of a private placement offering consisting of up to $5,000,000 of units at a price
of $0.33 per Unit. Each Unit consists of: (i) one share of our 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 $0.33 per share. At these initial closings, an aggregate of $600,000 worth
of Units were sold. The investors participating in the initial closings included affiliates of USS, one of our strategic commercial partners
(including Manuel Rodriguez, one of our directors and individuals or entities with whom USS and its affiliates do business within the
construction industry (collectively, "Strategic Investors". We anticipate that all investors in this offering will qualify
as Strategic Investors who are introduced to the us by Mr. Rodriguez and his associates. In connection with these initial closings, we
entered into definitive securities purchase agreements with the Strategic Investors and issued an aggregate of 1,818,182 shares of common
stock, Warrant As to purchase up to an aggregate of 1,818,182 shares of common stock, and Warrant Bs to purchase up to an aggregate of
1,818,182 shares of common stock (for an aggregate of 3,636,364 warrant shares). This offering is ongoing as of the date of this Annual
Report.

 On February 7, 2022 pursuant
to a private placement of Common Stock the Company issued 4,242,424 five-year, immediately exercisable warrants to purchase one share
of Common Stock at $0.33 per share. See note 8. On March 25, 2022, the Company issued warrants to its Chief Executive Officer pursuant
to an employment agreement: (i) five-year warrants to purchase 1,000,000 shares of Common Stock at a price of $0.33 per share and an issuance
date fair value of $166,823, vesting immediately. The additional 1,000,000 warrants provided within the agreement for Mr. Kay expired
and were not issued in relation to his resignation in November of 2022.

 On March 24, 2022, the
Company issued 300,000 shares of Common Stock with a contract price of $0.33 per share to a service provider for investor relations services.
These shares were valued for accounting purposes at the commitment date market price of $0.193 per share for a total value of $57,900;
$14,797 of this amount was amortized to non-cash compensation during the three months ended March 31, 2022.

 Effective March 25, 2022, the
Company issued a five-year warrant to purchase 2,000,000 shares of Common Stock at an exercise price of $0.33 per share to its Chief Executive
Officer pursuant to an employment agreement. Warrants to 1,000,000 shares with a grant date fair value of $166,823 vested upon issuance,
and a warrant to purchase 1,000,000 shares with a grant date fair value of $166,823 will vest one year from the date of issuance. The
Company charged the amount of $169,565 to stock-based compensation during the three months ended March 31, 2022 in connection with these
warrants.

 Pursuant to her employment
agreement with the Company, Jackie Placeres, the Company's Acting Interim Chief Financial Officer, is entitled to receive options
to purchase Common Stock which vest in quarterly increments over time. The initial tranche of options vested on December 15, 2022, but
as a courtesy to the Company. Mrs. Placeres has waived her right to such options.

 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, 2023, and 2022. 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. We
are working to secure additional funding to increase our manufacturing capacity 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

 COVID-19

 The pandemic caused by the
novel coronavirus (known as "COVID-19") and governmental and other efforts to curb the spread of the pandemic had caused
great disruption to the U.S. national and international economies. We were adversely impacted by COVID-19 in that we were required to
temporarily suspend operations during 2020 due to necessary quarantines, and the impact of COVID-19 on the construction industry we service
has been significant. Government mandated shutdowns and other measures held less of an impact on our business during 2021 and 2022, although
we did have personnel absent for periods during both years due to COVID-19. Moreover, the continued prevalence of COVID-19 or outbreaks
of new variants thereof disrupted our supply chain, as well as our own operations due to absenteeism by infected or ill members of management
or other employees, or absenteeism by members of management and other employees who elected not to come to work due to illness affecting
others in our office or plant, or due to additional necessary quarantines. COVID-19 also impacted members of our Board of Directors as
well as key providers of services to us, which adversely impacted the management of our affairs. Additionally, as the COVID-19 pandemic
continue to develop, we may be required to continue to spend time and resources in monitoring and adhering to government regulations
that impact both our company and our customers and potential customers as necessary, which could also adversely impact our business and
results of operations. We continue to monitor our operations and applicable government recommendations and requirements.

 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 2022 and into 2023, 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 secondary supplier, UWF/Kamenny Vek. However, our primary supplier Mafic is US based, and has ample capacity to support our current
and anticipated future needs with 100% domestic source of raw materials. 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 $376,096
of revenues as a result of sales of finished goods sold for the year ended December 31, 2023, compared to
$1,356,165 in the prior year. While the decrease in revenue in the year over year periods was material due to our ability to sell some
BasaFlex product in 2023, 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, 2023, we had cost of sales of $248,313 compared to $2,025,926 in the prior year. During 2023, we 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, 2023, selling, general, and administrative were $1,730,733 compared to $3,585,955
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, 2023, payroll and payroll taxes were $235,377 compared to $885,662 in the prior year. We retained a total of 2 employees at the period
end December 31, 2023, as compared to 4 employees at the close of the December 31, 2022 period.

 •
 Professional fees – During the year ended December 31, 2023,
professional fees were $114,730 compared to $410,377 in the prior year. The decrease was primarily due to the reduction in activities
 regarding legal and compliance fees in relation to fundraising activities in the prior year.

 •
 Consulting Fees – During the year ended December 31, 2023,
consulting fees were $248,291 compared to $415,420 in the prior year. The decrease was due to the number of consulting agreements and
non-renewal of agreement with our prior Chief Executive Officer and President, Thomas Richmond as well as public markets consultant Frederick
Berndt.

 •
 Facilities and related costs – During the year ended December
31, 2023, costs related to our facilities were $40,191 compared to $45,274. These costs consisted primarily of rent in the amount of $23,704
and utilities in the amount of $6,434. The decrease was because the majority of rent and utilities expenses were charged to the cost of
goods sold in the previous year.

 •
 Depreciation and amortization – During the year ended December
31, 2023, depreciation and amortization was $127,967 compared to $8,406 in the prior year. The increase was because the majority of depreciation
expense was charged to cost of goods sold in the prior year.

 Other Income (Expenses)

 Interest expense -
During the year ended December 31, 2023, interest expense was $566,429 compared to $512,162 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 inception, we have incurred
net operating losses and generated negative cash flows in operations. As of December 31, 2023, we had an accumulated deficit of $56,262,389.
At December 31, 2023, we had cash of $55,248 compared to $$30,340 at December 31, 2022, 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 can
generate sufficient revenues to achieve positive cash flow.

 Furthermore, we currently owe
approximately $2,144,357 plus $554,595 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
2023, we entered into several simple Promissory Notes with certain related parties and their associates for total proceeds $1,145,000.
These notes each carried a 12-month term at interest between 10% to 20% simple interest and are now due or about to come due. The accumulated
interest under these notes is currently approximately $287,725. 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, 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 5 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 $1,055,849 and $2,830,650 for the years ended December 31, 2023 and 2022, respectively. During the year ended December
31, 2023, we received $0 net cash for investing activities compared to $271,885 used in the prior fiscal year. The decrease is largely
due to costs associated with the customization, installation, and verification and validation testing of the first BasaMax prototype
pultrusion machine, for the modifications and UL listing of the production machinery and the final payments for the enhancements made
to our production facility as compared to the deposits made on machinery and equipment in the prior year compared to the present year.

 During the year ended December
31, 2023, we had $0 net cash provided by financing activities compared to $1,300,532 in the prior year. Sale of common stock shares for
$649,951 from the issuance of convertible and short-term notes payable, including from related parties; less $605,000 of principal repayments
on notes and convertible notes, including to related parties, provided the net cash during the year ended December 31, 2022.

 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, 2023.

 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 into the process safeguards to reduce, though not eliminate, this risk.

 Our management assessed the
effectiveness of our internal control over financial reporting as of December 31, 2023. 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, 2023. 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 weakness, we are working to establish 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.

 During
the quarter ended December 31, 2023, 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 qualify. 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

 Jackie Placeres

 Acting Interim Chief Financial Officer

 Acting Interim Chief Executive Officer & Chairman of the Board

 Manuel A. Rodriguez

 Sergio Salani

 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., 65, 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.

 Jackie Placeres,
 43, 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 longstanding relationship with the
Company and because of her accounting and public company reporting experience.

 Ronald J. LoRicco, Sr.,
59, 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
in Florida and 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 Office r.

 Paul M. Sallarulo, 67,
 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. Previous to that, Mr. Sallarulo attended Bernard Baruch College from 1978 to 1981 where he obtained
his Bachelor in Business Administration, and attended SUNY Adirondack between 1975 and 1977 where he obtained his Associate of Applied
Science degree.

 Adam Falkoff, 56, 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.
Since 2000, Mr. Falkoff has served as the President of CapitalKeys, a bipartisan global public policy and strategic consulting firm based
in Washington D.C. His expertise is to successfully help clientele understand, anticipate, and navigate the complex public policy environment
as well as strategies for business development driving client revenues. Earlier in his career he served as professional staff in the United
States Senate. Mr. Falkoff was a 2018 recipient of the Ellis Island Medal of Honor for service to the United States of America and named
in the Power 100 of Washington, D.C. by Washington Life Magazine. Mr. Falkoff has been an invited guest speaker, panelist, and moderator
on a wide range of public policy and business development related topics in several industries. He has appeared in The Wall Street
Journal, The Palm Beach Post, Politico, Roll Call, The Hill, The Washington Diplomat, Jack O'Dwyer's Newsletter, Capitol File,
Washington Life, National Journal, Technology Law Journal, Greenwire, Appliance Magazine, and The Opportunist Magazine. 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 on an academic scholarship in 1992. Mr. Falkoff also holds a Certificate in International Law from the University
of Salzburg, Institute on International Legal Studies.

 Manuel A. Rodriguez,
 62, 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, 55,
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 below table 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 2023 and 2022.
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, 2023 and 2022 appearing
elsewhere in this Annual Report.

 For the year ended December 31, 2022:

 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

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 Michael V. Barbera

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 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

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 Michael V. Barbera

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 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., 2066 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., 2066 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 2023, except that Mr. Richmond filed a form 4 late in April 2023.

 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, 2023 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 at December 31, 2023.

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

 Name

 Years

 Salary ($)

 Warrant Awards ($)

 Option Awards ($)

 Other Compensation ($)

 Total ($)

 Simon Kay (1)

 2023

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 Former
 President and

 2022

 $
 159,615

 $
 —

 $
 —

 82,848

 $
 242,463

 Chief Executive
 Officer

 Thomas
 Richmond (6)

 2023

 $
 —

 $
 —

 $
 —

 $
 216,667

 $
 216,667

 Former
 President and

 2022

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 Chief Executive
 Officer

 David L. Anderson (2)(3)

 2023

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 Former
 Chief Operating Officer

 2022

 $
 46,758

 $
 —

 $
 —

 $
 4,500

 $
 51,258

 Lisa Gainsborg (4)

 2023

 $
 —

 $
 —

 $
 —

 $
 —

 $
 —

 Former
 Chief Financial Officer

 2022

 $
 37,204

 $
 —

 $
 —

 $
 2,184

 $
 39,388

 Jackie Placeres (5)

 2023

 $
 175,000

 $
 —

 $
 —

 $
 —

 $
 175,000

 Acting
 Interim Chief Financial Officer

 2022

 $
 6,731

 $
 —

 $
 —

 $
 1,099

 $
 7,830

 (1)
 Served
as a consultant and advisor to the Board effective January 13, 2020, later transitioning to Interim Acting Chief Executive Officer effective
March 9, 2020, and to Chief Executive Officer and President effective March 25, 2022. On November 14, 2022, we were provided notice of
his resignation and the Board of Directors accepted. Mr. Kay is not associated with our company.

 (2)
 Includes reimbursed cost of health Includes insurance of $15,000.

 (3)
 On February 20, 2022, Mr. Anderson resigned from his position and on February 24, 2022, we provided written
notice to Mr. Anderson that his resignation had been accepted. Therefore, as of February 24, 2022, Mr. Anderson is not associated with
our company.

 (4)
 On December 15, 2022, Ms. Gainsborg resigned from her position, and on December 15, 2022, we provided
written notice to Ms. Gainsborg that her resignation had been accepted. Therefore, as of December 15, 2022, Ms. Gainsborg is not associated
with our company.

 (5)
 On December 15, 2022, Mrs. Placeres transitioned to the role of Acting Interim Chief Financial
 Officer from Controller for the Company.

 (6)
 On December 31, 2023, Mr. Richmond's consulting agreement was not renewed.

 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 Simon R. Kay

 We entered into an employment
agreement, dated March 25, 2022, with Simon R. Kay to serve as our Chief Executive Officer and President and Acting Interim Chief Financial
Officer. Mr. Kay had been serving as our Acting Interim Chief Executive Officer, President, and Chief Financial Officer in a consulting
capacity since January 13, 2020. The term of the employment agreement is for an initial period of two years and provides a base salary
of $250,000 annually. Mr. Kay is also eligible to receive a cash bonus of $100,000 upon our achievement of both: (i) an uplisting of our
company from the OTCQB Market to any tier of the Nasdaq, New York Stock Exchange, or NYSE American; and (ii) our achieving positive cash
flow under U.S. generally accepted accounting principles for any fiscal quarter as reported in our filings with the SEC. Mr. Kay has also
been issued a five-year warrant to purchase an aggregate 2,000,000 shares of our common stock at an exercise price of $0.33 per share,
with a "cashless exercise" provision. One million shares of the warrant vested upon execution of the employment agreement,
and the remaining one million shares vest on the first anniversary of the execution of the employment agreement. Mr. Kay's employment
agreement replaced our Transition Services Agreement with Mr. Kay described below.

 On January 20, 2022, we entered
into a Transition Services Agreement (the "TSA") with Simon R. Kay. Prior to the execution of the TSA, Mr. Kay has been serving
as our Acting Interim Chief Executive Officer, President and Chief Financial Officer in a consultant capacity since January 13, 2020
pursuant to a Consulting Agreement between us and Mr. Kay. Our employment agreement with Mr. Kay terminated the TSA, except for those
provisions which expressly survive termination.

 On November 14, 2022 the Company was provided notice of his resignation and the Board
of Directors accepted. Mr. Kay's anniversary shares with respect to his employment agreement were not issued pursuant to the terms
of the agreement, no further compensation or consideration was offered. Mr. Kay is not associated with our company.

 Employment Agreement with Jackie Placeres

 None.

 Employment Agreement with Frederick H. Tingberg, Jr.

 None.

 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. Our current Acting Interim Chief
Financial Officer is compensated as an at-will employee. These agreements or offers were negotiated and approved by our Board of Directors.

 2022 Option and Warrant Grants to Executive Officers

 None.

 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 August 31, 2023. The company agreed to
issue to him five warrants to purchase four million shares of common stock, exercisable at $.045 per share.

 Outstanding Equity Awards at Fiscal Year-End

 On August 16, 2018,
as part of his compensation package for his consulting agreement, David Anderson, prior to being employed as our Chief Operating Officer,
received 2,500,000 five-year warrants at a strike price of $0.1235. The expiration of 1,000,000 warrants occurred on August 15, 2023 and
the balance of 1,500,000 warrants expired on September 23, 2023. No further warrants are available to Mr. Anderson as of this filing.

 On March 4, 2019, as part
of his compensation package for employment, Richard M. Krolewski, our former Chief Executive Officer, was granted immediate vesting in
5,000,000 warrants at a strike price of $0.1235 per share expiring in 5 years. In 2020, he sold 2,500,000 warrants in a private transaction.
The private party later exercised one million warrants on January 21, 2021. The remaining 2,500,000 warrants expired on March 4, 2023.

 On May 23, 2019,
as part of her compensation package for employment, Isabella Barbera, our former Chief Financial Officer, was granted immediate vesting
in 1,000,000 options at a strike price of $0.55 per share expiring in 10 years. These options remained outstanding at December 31, 2023.

 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 259,156,796 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
 %

 (4)

 500,000

 *

 Frederick
 Tingberg Jr.(5)

 1,851,781

 *

 Manuel A.
 Rodriguez (6)

 20,616,060

 7.42
 %

 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.

 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 2022

 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, 2023.

 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, 2023.

 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, 2023.

 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, 2023.

 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, 2023.

 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, 2023.

note to a board member in exchange for $60,000 bearing an interest rate of 10% per annum and payable on August 16, 2023.

note to a board member in exchange for $10,000 bearing an interest rate of 10% per annum and payable on September 9, 2023.

note to a strategic partner in exchange for $10,000 bearing an interest rate of 10% per annum and payable on September 9, 2023.

note to a strategic partner in exchange for $15,000 bearing an interest rate of 10% per annum and payable on September 9, 2023.

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, 2023.

 On September 22, 2022 the Company issued a promissory
note to a board member in exchange for $42,500 bearing an interest rate of 10% per annum and payable on March 22, 2023.

 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 10% per annum and payable on March 22,
2023.

 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.

 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 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.

 For the year end 2022 but
only through third quarter of 2022 Cherry Bekaert, LLP served as our auditor of record. On November 16, 2022 the Company and Cherry Bekaert,
LLP ended their agreement for services rendered.

 The following table shows the fees for the years ended December
31, 2023 and 2022:

 2023

 2022

 Audit Fees (1)

 $
 83,500

 $
 180,267

 Tax Fees

 $
 —

 $
 —

 All Other Fees (2)

 $
 —

 $
 54,240

 (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 +

 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

 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

 X

 101.CAL

 X

 101.DEF

 X

 101.LAB

 X

 101.PRE

 X

 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: April 15, 2024

 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

 Jackie Placeres

 /s/ Ronald J. LoRicco, Sr.

 Chairman of the Board & Acting Interim Executive Officer

 /s/ Paul M. Sallarulo

 /s/ Manuel A. Rodriguez

 Manuel A. Rodriguez

 /s/ Frederick H. Tingberg Jr.

 Frederick H. Tingberg Jr.

 /s/ Adam S. Falkoff

 Adam S. Falkoff

 /s/ Sergio Salani

 Sergio Salani

 INDEX TO FINANCIAL STATEMENTS

 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, 2023 and 2022, 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, 2023, 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, 2023 and 2022, and the results of their operations and cash flows for
each of the years in the two-year period ended December 31, 2023, 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 in regard to 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

 F- 2

CONSOLIDATED BALANCE SHEETS

 As of December 31,

 2023

 2022

 ASSETS

 CURRENT ASSETS

 Cash

 $
 55,248

 $
 30,340

 Accounts receivable, net

 40,222

 67,960

 Inventory

 —

 —

 Prepaid expenses

 —

 137,370

 Deposits and other current assets

 —

 —

 TOTAL CURRENT ASSETS

 95,470

 235,670

 Lease right-of-use asset

 56,915

 153,270

 Fixed assets, net

 402,271

 530,238

 TOTAL NON CURRENT ASSETS

 459,186

 683,508

 TOTAL ASSETS

 $
 554,656

 $
 919,178

 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

 CURRENT LIABILITIES

 Accounts payable

 $
 1,762,390

 $
 1,713,045

 Accrued expenses

 1,207,545

 438,870

 Accrued legal liability

 —

 165,000

 Notes payable

 270,000

 304,243

 Notes payable - related party

 1,750,000

 605,000

 Notes payable - convertible - related party, net

 2,144,357

 2,144,357

 Due to shareholders

 475,000

 505,000

 Subscription liability

 —

 1,300,000

 Lease liability - current portion

 56,915

 93,186

 TOTAL CURRENT LIABILITIES

 7,666,207

 7,268,701

 Lease liability - net of current portion

 —

 56,915

 TOTAL LIABILITIES

 7,666,207

 7,325,616

 STOCKHOLDERS' EQUITY (DEFICIT)

 Preferred stock, $ 0.001 par value, 5,000,000 shares authorized, none 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

 259,157

 253,218

 Additional paid-in capital

 48,891,681

 47,433,354

 Accumulated deficit

 ( 56,262,389
)

 ( 54,093,010
)

 TOTAL STOCKHOLDERS' EQUITY(DEFICIT)

 ( 7,111,551
)

 ( 6,406,438
)

 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

 $
 554,656

 $
 919,178

 F- 3

 CONSOLIDATED STATEMENTS OF OPERATIONS

 For the year ended

 31,

 Revenue

 2023

 2022

 Products sales – rebar

 $
 376,096

 $
 1,356,165

 Total cost of goods sold

 248,313

 2,025,926

 Gross (loss) profit

 127,783

 ( 669,761
)

 OPERATING EXPENSES

 Selling, general, and administrative expenses

 1,730,733

 3,585,955

 Total operating expenses

 1,730,733

 3,585,955

 NET LOSS FROM OPERATIONS

 ( 1,602,950
)

 ( 4,255,716
)

 OTHER INCOME (EXPENSE)

 Gain on settlement of legal contingency

 —

 —

 Liquidated Damages

 —

 ( 426,759
)

 Gain on settlement of lease liabilities

 —

 52,712

 Miscellaneous income

 —

 Loss on extinguishment of debt

 —

 —

 Loan forgiveness

 —

 170,096

 Interest expense

 ( 566,429
)

 ( 512,162
)

 Total other income (expense)

 ( 566,429
)

 ( 716,083
)

 NET LOSS

 $
 ( 2,169,379
)

 $
 ( 4,971,799
)

 Net loss per share – basic

 $
 ( 0.01
)

 $
 ( 0.03
)

 Net loss per share – diluted

 $
 ( 0.01
)

 $
 ( 0.03
))

 Weighted average number of shares outstanding – basic

 256,834,618

 251,488,656

 Weighted average number of shares outstanding – diluted

 256,834,618

 251,488,656

 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, 2022

 —

 $
 —

 248,840,144

 $
 248,842

 $
 46,054,126

 $
 ( 46,121,210
)

 $
 181,758

 Warrants and options exercised
 for cash

 —

 —

 1,833,333

 1,833

 223,167

 —

 225,000

 Stock-based compensation

 —

 —

 422,713

 297,320

 —

 297,742

 Stock issued for cash

 —

 —

 2,121,212

 2,121

 647,470

 —

 649,591

 Warrants issued to management

 —

 —

 —

 —

 211,271

 —

 211,271

 Net loss

 —

 —

 —

 —

 —

 ( 7,971,799
)

 ( 7,971,799
)

 December 31, 2022

 —

 $
 —

 253,217,402

 $
 253,218

 $
 47,433,354

 $
 ( 54,093,010
)

 $
 ( 6,406,438
)

 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
)

 December 31, 2023

 —

 $
 —

 259,156,796

 $
 259,157

 $
 48,891,681

 $
 ( 56,262,389
)

 $
 ( 7,111,551
)

 F- 5

 CONSOLIDATED STATEMENTS OF CASH FLOWS

 For the year ended

 31,

 2023

 2022

 CASH FLOWS FROM OPERATING ACTIVITIES:

 Net loss

 $
 ( 2,169,379
)

 $
 ( 7,971,799
)

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

 Lease right-of-use asset amortization

 96,355

 333,203

 Depreciation

 127,967

 100,670

 Loss on impairment of equipment and deposits

 —

 2,599,585

 Gain on settlement of lease liability

 —

 ( 52,712
)

 Bad debt expense

 —

 454,534

 Loan forgiveness

 —

 ( 170,096
)

 Stock-based compensation

 164,266

 509,013

 Changes in operating assets and liabilities:

 Prepaid expenses

 137,370

 ( 9,564
)

 Inventory

 —

 714,655

 Accounts receivable

 27,738

 ( 514,677
)

 Deposits and other current assets

 —

 —

 Accounts payable and accrued expenses

 653,020

 1,030,968

 Due to shareholders

 —

 505,000

 Lease liability

 ( 93,186
)

 ( 359,429
)

 Net cash used in operating activities

 ( 1,055,849
)

 ( 2,830,650
)

 CASH FLOWS FROM INVESTING ACTIVITIES:

 Purchase of equipment

 —

 ( 178,115
)

 Proceeds from sale of equipment

 —

 450,000

 Net cash used in investing activities

 —

 271,885

 CASH FLOWS FROM FINANCING ACTIVITIES:

 Proceeds from sale of common stock, net of costs

 —

 649,591

 Proceeds from exercise of warrants and options

 —

 225,000

 Proceeds from subscription liability

 —

 1,300,000

 Repayment of convertible notes payable and convertible notes payable related party

 —

 —

 Proceeds from notes payable and notes payable related parties

 1,145,000

 305,000

 Repayment of notes payable and notes payable related parties

 ( 64,243
)

 —

 Net cash provided by financing activities

 1,080,757

 2,479,591

 NET (DECREASE) INCREASE IN CASH

 24,908

 ( 79,174
)

 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

 30,340

 109,514

 CASH AND CASH EQUIVALENTS AT END OF PERIOD

 $
 55,248

 $
 30,340

 F- 6

 CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

 For the year ended

 31,

 2023

 2022

 Supplemental cash flow information:

 Cash paid for interest

 $
 —

 $
 45,031

 Supplemental disclosure of non-cash investing and financing activities:

 Shares issued from subscription liability

 $
 1,300,000

 $
 —

 Initial recognition of leases

 —

 $
 187,326

 Conversion of accrued interest to convertible notes

 $
 —

 $
 454,612

 F- 7

 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 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, "coil-able", 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, 2023 and 2022, respectively, the

 Company reported:

 •
 an accumulated deficit of approximately $ 56.3 million and $ 54.0 million;

 •
 a working capital deficiency of approximately $ 7.6 million and $ 7 million; and

 •
 cash used in operations of approximately $ 1.1 million and $ 2.8 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, 2023, the Company had cash of $ 55,248 compared
to $ 30,340 at December 31, 2022.

 F- 8

 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, 2023 and 2022, respectively.

 F- 9

 The Company's inventory at December 31, 2023 and 2022 was
comprised of:

 Schedule of Inventories

 2023

 2022

 Finished goods

 $
 —

 $
 —

 Work in process

 —

 —

 Raw materials and supplies

 —

 —

 Total inventory

 $
 —

 —

 (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

 2023

 2022

 Computer equipment

 $
 203,193

 $
 203,193

 Machinery

 728,245

 728,245

 Total fixed assets

 931,438

 931,438

 Accumulated depreciation

 ( 529,167
)

 ( 401,201
)

 Total fixed assets, net

 $
 402,271

 $
 530,237

 Depreciation expense for the year ended December 31, 2023 was
$ 127,967 compared to $ 100,670 for the year ended December 31, 2022.

 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, 2022, 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- 10

NOTES
TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED
DECEMBER 31, 2023 AND 2022

 (F) Deposits and other current assets

 None.

 (G) Accrued expenses

 The Company's accrued expenses consist of the following:

 Schedule of accrued expenses

 2023

 2022

 Accrued payroll and taxes

 $
 202,187

 $
 22,847

 Accrued interest

 998,826

 340,521

 Other accrued expenses

 64,096

 775,502

 Total accrued expenses

 $
 1,265,109

 $
 1,138,870

 (H) Accrued legal liabilities

 The Company's accrued legal liabilities consist of the following:

 Schedule of accrued legal liabilities consist

 2023

 2022

 Accrued legal fees

 $
 —

 $
 165,000

 Total accrued legal liability

 $
 —

 $
 165,000

 (I) 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

 2023

 Options

 Warrants

 139,555,757

 Convertible
 shares

 8,016,068

 8,016,068

 134,789,603

 148,003,598

 F- 11

 (J) 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 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.

 The Company issues various
equities as compensation to consultants, employees, directors, and investors. The Company issued 8,316,652 restricted common shares, 11,303,030
restricted common stock warrants, and 0 common stock options as compensation with a total fair value of $ 1,783,284 for the year ended
December 31, 2022.

 As of December 31, 2023
and 2022, $ 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, 2023 and 2022, total equity-based
compensation expense amounted to $ 0 and $ 509,013.

 The Company used the Black
Scholes valuation model to determine the fair value of the warrants and options issued, using the following key assumptions for the years
ended December 31, 2023 and 2022:

 Schedule of fair value assumptions

 2023

 2022

 Expected price volatility

 162.12 - 167.20 %

 144.79 - 148.70 %

 Risk-free interest rate

 0.78 - 1.26

 0.78 - 1.26

 Expected life in years

 Dividend yield

 —

 —

 (K) Income Taxes

 The Company has not recorded
any income tax expense or benefit for the years ended December 31, 2023 and 2022 due to its history of net operating losses. The provision
for income taxes was calculated as a result of the following (in thousands).

 F- 12

 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,

 2023

 2022

 Deferred tax assets:

 Net operating loss carryforwards

 $
 2,169

 $
 7,587

 Accruals and allowances

 1,265

 ROU liability amortization

 —

 Stock-based compensation

 —

 1,344

 Total deferred tax assets

 3,434

 9,744

 Valuation allowance

 ( 3,434
)

 ( 9,744
)

 Total deferred tax assets net of valuation allowance

 —

 —

 Deferred tax liabilities:

 ROU asset amortization

 —

 ( 333
)

 Depreciation

 ( 127
)

 ( 101
)

 Total deferred tax liabilities

 ( 127
)

 ( 434
)

 Valuation allowance

 Total deferred tax liabilities net of valuation allowance

 —

 —

 Net deferred tax assets

 $
 —

 $
 —

 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.

 As of December 31, 2022,
the Company has a valuation allowance of approximately $ 9.7 million related to federal net operating loss ("NOL") carryforwards
of approximately $ 54.0 million.

 The amount of the valuation
allowance represented a decrease of approximately $ 5.5 million over the amount recorded as of December 31, 2023 and was due to the decrease
in net operating losses. If not utilized, federal net operating losses of $ 28.4 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, 2023.

 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.

 F- 13

 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.

 Operating lease liabilities
are based on the net present value of the remaining lease payments over the remaining lease term. In determining the present value of
lease payments, the Company used the incremental borrowing rate based on the information available at the lease commencement date. As
of December 31, 2022, the weighted-average remaining lease term is 5.15 years and the weighted-average discount rate used to determine
the operating lease liability was 15.0 %. For the years ended December 31, 2023 and 2022, the Company expensed $ 0 and $ 424,593, respectively,
for rent.

 NOTE 5 – NOTES PAYABLE – CONVERTIBLE

 Notes payable – convertible totaled $ 0 and $ 0 at December
31, 2023 and December 31, 2022, 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 and $ 10 for the years ended December 31, 2023 and December 31, 2022, respectively. Accrued
interest for the Company's convertible notes payable at December 31, 2023 and December 31, 2022 was $ 0 and $ 0, respectively, and
is included in accrued expenses on the consolidated balance sheets.

 F- 14

 NOTE 6 – NOTES PAYABLE – CONVERTIBLE – RELATED PARTY

 Notes payable – convertible – related party
totaled $ 2,144,357 and $ 2,144,357 at December 31, 2023 and December 31, 2022, 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 and $ 107,218 for the years ended December 31, 2023 and December
31, 2022, respectively.

 Accrued interest for the
Company's convertible notes payable – related parties at December 31, 2023 and December 31, 2022 was $ 554,595 and $ 107,218,
respectively, and is included in accrued expenses on the consolidated balance sheets.

 F- 15

 NOTE 7 – NOTES PAYABLE

 Notes payable totaled $ 270,000 and $ 605,000 at December 31, 2023
and December 31, 2022, respectively.

 During the year ended December
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.

 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 $ 5,625
and $ 122 for the years ended December 31, 2023 and 2022, respectively.

 Accrued interest for the
Company's notes payable at December 31, 2022 and December 31, 2021 was $ 159,630 and $ 63,310, respectively, and is included in accrued
expenses on the consolidated balance sheets.

 F- 16

 NOTE 8 – NOTES PAYABLE – RELATED PARTY

 Notes payable – related party totaled $ 1,750,000 and $ 605,000
at December 31, 2023 and December 31, 2022, 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 days' 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.

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.

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.

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.

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.

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 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- 17

 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 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.

 Interest expense for the
Company's notes payable – related party was $ 566,429 and $ 121,932 for the years ended December 31, 2023 and 2022, respectively.

 Accrued interest for the
Company's notes payable at December 31, 2023 and December 31, 2022 was $ 287,725 and $ 121,932, 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 year ended 2023.

 No commitments and contingencies to be disclosed for year end
December 31, 2022.

 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. 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. 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- 18

 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, 2023 and $ 37,116 for the year ended
December 31, 2022.

 UMC Technologies, LLC

 On December 12, 2022, the
Company entered into an Exclusive Supplier Agreement with UMC Technologies, LLC. ("UMC"). UMC agreed to utilize the Company
as its exclusive supplier for all Company products, and the Company has granted CRBC exclusive distribution rights of the Company's
products in Romania, Republic of Turkey, Chile, Bolivia, and Paraguay. Furthermore, UMC has key relationships that could be a source of
additional customers for the Company in other territories with no geographic restrictions.

 The agreement targets
multiple large projects in Europe and South America which Basanite has been specified. The Company has not generated revenue under this
contract for the year ended December 31, 2023 or 2022, respectively.

 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.

 During the year ended December
31, 2022, the Company issued a total 2,121,212 restricted common shares in exchange for $ 649,591 in net cash proceeds.

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

 During the year ended December 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, 2023 and 2022 was $ 0 and $ 1,300,000, 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

 Exercise
 Price

 Intrinsic
 Value

 Balance at January 1, 2022

 $
 0.27

 $
 —

 Cancelled

 —

 —

 Balance at December 31, 2022

 $
 0.27

 $

 Issued

 —

 —

 Exercised

 —

 —

 Cancelled

 —

 —

 Balance at December 31, 2022

 $
 0.27

 $

 F- 19

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

 Schedule of options and warrants exercisable and outstanding

 Range
 of

 Weighted Average

 Weighted
 Average

 Aggregate

 Number

 Remaining

 Exercise
 Prices

 Outstanding

 Contractual
 Life (Years)

 Exercise
 Price

 Intrinsic
 Value

 $ 0.01 - $ 0.50

 2.39

 $ 0.27

 $ 6,798

 $ 0.51 - $ 1.00

 —

 0.27

 —

 —

 $ 6,798

 Stock Warrants:

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

 Schedule of warrants activity

 Weighted

 Average

 Aggregate

 Total
 Warrants

 Exercise
 Price

 Intrinsic
 Value

 at December 31, 2022

 139,555,757

 $
 0.29

 $
 150,667

 Granted

 7,242,428

 0.29

 Exercised

 ( 1,333,333
)

 0.29

 Cancelled

 ( 3,545,000
)

 —

 at January 1, 2023

 135,435,757

 $
 0.29

 $
 146,219

 Granted

 —

 —

 Exercised

 —

 —

 Cancelled

 ( 10,140,000
)

 —

 at December 31, 2023

 $
 0.30

 $
 135,272

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

 Schedule of warrants exercisable and outstanding

 Range of

 Weighted Average

 Weighted Average

 Aggregate

 Number Outstanding

 Remaining

 Exercise Prices

 Contractual Life (Years)

 Exercise Price

 Intrinsic Value

 $ 0.01 - $ 0.50

 2.65

 $ 0.30

 $ 135,272

 $ 0.51 - $ 1.00

 —

 —

 —

 $ 135,272

 NOTE 12 – SUBSEQUENT EVENTS

 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 Office r. Mr. LoRicco, Sr., has served as a member of our Board of Directors since June 2017. He was promoted to Chairman
of the Board in December of 2022 and continues to serve in the role.

 F- 20