10-K - BASA - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 10-K

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(Mark One)

**☒**ANNUALREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: December 31, 2021

**☐**TRANSITIONREPORT 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

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Basanite, Inc.

(Exact name of registrant as specified in itscharter)

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Nevada	20-4959207
(State or Other Jurisdiction	(I.R.S. Employer
of Incorporation or Organization)	Identification No.)

2041 NW 15th Avenue, Pompano Beach, Florida33069

(Address of Principal Executive Office) (ZipCode)

(954) 532-4653

(Registrant’s telephone number, includingarea code)

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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:
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Common Stock, par value 0.001 per share

All values are in US Dollars.

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

Indicate 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

Indicate 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

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

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

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☐

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

Indicate 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. ☐

Indicate 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: $76,517,652 on June 30, 2021.

On April 13, 2022, the issuer had 251,761,356

shares of common stock outstanding.

BASANITE,INC.

TABLE OF CONTENTS

		Page No.
Cautionary Note Regarding Forward-Looking Statements		ii
Summary of Risk Factors		iii
	PART I.
Item 1.	Business.	1
Item 1A.	Risk Factors.	9
Item 1B.	Unresolved Staff Comments.	25
Item 2.	Properties.	25
Item 3.	Legal Proceedings.	26
Item 4.	Mine Safety Disclosures.	26
	PART II.
Item 5.	Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	27
Item 6.	Reserved.	30
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	31
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk.	35
Item 8.	Consolidated Financial Statements and Supplementary Data.	35
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.	35
Item 9A.	Controls and Procedures.	35
Item 9B.	Other Information.	36
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	36
	PART III.
Item 10.	Directors, Executive Officers and Corporate Governance.	37
Item 11.	Executive Compensation.	41
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	43
Item 13.	Certain Relationships and Related Transactions, and Director Independence.	44
Item 14.	Principal Accounting Fees and Services.	46
	PART IV.
Item 15.	Exhibits, Financial Statement Schedules.	47
Item 16.	Form 10-K Summary.	48

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CAUTIONARY NOTE REGARDINGFORWARD-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;
·	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.

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SUMMARY OF RISK FACTORS

Investing in our commonstock 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<br> capital to fund our operations, which, even if obtained, could result in substantial dilution or significant debt service<br> obligations. We may not be able to obtain additional capital on commercially reasonable terms, which could adversely affect our<br> 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<br>sales of BasaFlex and other BFRP products, which leaves us reliant on the commercial viability of such products.
·	We may be unable to derive the benefits that we currently anticipate from the Supplier Agreement with Concrete Products of the Palm Beaches, Inc. (“CPPB”) and the Distributor Agreement with U.S. Supplies, Inc. (“USS”), as Manuel A. Rodriguez, an affiliate of CPPB and USS, may become subject to conflicts of interest as a result of these agreements.
·	We may be unable to develop the manufacturing capability and infrastructure necessary to achieve the potential sales growth.

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| --- | | · | 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 Re-IPO. | | · | 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. |

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| --- | | · | 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. |

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PART I

Unlesswe 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 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 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^TM^ BFRP rebar is a corrosion proof, chemical, acid and moisture resistant material, as well as being sustainable and environmentally friendly. BasaFlex^TM^, unlike alternative fiber reinforced polymer (“FRP”) products, was designed and engineered to replace steel in certain structures and applications. Since it is rustproof, BasaFlex^TM^ 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);
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·	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
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| --- | | · | 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.

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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

In the first quarter of 2022, we announced two material achievements related to market acceptance of, and potential orders for, our products:

In January 2022, we announced that our BasaFlex™ and BasaMesh™ reinforcement products were approved by the City of Pompano Beach, Florida for use in the city's subterranean stormwater and wastewater projects. The approval and related contract are for the use of our products in an initial project named the Lyons Park Stormwater and Wastewater Improvements Project. The approval called for a thorough technical review by the engineer of record for the Lyons Park project. Our products were vetted after an extensive submission of sealed calculations, documents and testing, following which the products were approved for use in subterranean stormwater and wastewater projects in the city in general and specified for use at Lyons Park.

In March 2022, our BasaFlex™ and BasaMesh™ reinforcement products were approved to replace steel reinforcement in existing Broward County infrastructure projects. The first Broward County project to utilize BasaFlex™ and BasaMesh™ is a community development called "UAZ 123," located in the city of Oakland Park, Florida.

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Industry Background and Current and ProposedCustomers

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.

InfrastructureInvestment 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.

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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 lease 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 our manufacturing needs in the future, we have and may continue to explore alternative or additional manufacturing or corporate facilities.

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 near-term goal is to expand our manufacturing capacity and ultimately to reach a Pompano plant production capacity exceeding 73,000 linear feet per day per day on a two day 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 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, is to have the first set of five of the new machines installed and be operational by the second quarter of 2022, and to install and have operational five more, along with additional custom manufacturing equipment, by the fourth quarter of 2022 providing sales dictate. This would create the opportunity for BI to ultimately reach our production level target for the Pompano facility by the close of 2022.

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.

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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) is Mafic, Inc., with BWF/Kamenny Vek and SRCS, Inc. as backup suppliers. 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 Agreementwith 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.

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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

Basalt 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 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 myriad 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.

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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 is highly technical, with the substantial majority of our employees working in engineering, technical and financial roles. During the year 2021, we increased our workforce by 155%. As of December 31, 2021, we had twenty-three 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, 2021, our employees had the following gender demographics:


All employees	25	%	75	%
Engineers	—	%	100	%
Finance	67	%	33	%
Manufacturing	—	%	100	%
People Managers	20	%	80	%
Individual Contributors	50	%	50	%

At December 31, 2021, our employees had the following race and ethnicity demographics:


Black / African American	49	%	—		—		70.0	%	—		33.3	%
Hispanic/Latino	25	%	100	%	67	%	20.0	%	50	%	—
White	25	%	—	%	33	%	—%		50	%	66.7	%
Multi-Racial	1	%	—		—		10.0	%	—		—

Facilities

Our principal office is leased and located at 2041 N.W. 15^th^ Avenue, Pompano Beach, FL 33069. The lease is for approximately 36,900 square feet of space, which includes our corporate office and our production floor. We 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.

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Item 1A.	Risk Factors.

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

Risks Related to Our Business and Company

We have a history of operating losses andmay 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, 2021, and 2020, we reported net losses of $16,079,961 and $4,199,331 respectively, and negative cash flow from operating activities of $4,407,270 and $2,799,499, respectively. As of December 31, 2021, we had an aggregate accumulated deficit of $46,121,210. 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 extremelylimited cash resources with which to operate our business, and we may have difficulty in raising capital and may consume resources fasterthan 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 we require immediately or 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 agoing 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 our 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.

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We have a limited operating history and we have incurred netlosses 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 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 our future results of 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 inan 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 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 resourcesand need substantial additional capital to fund our operations, which, even if obtained, could result in substantial dilution or significantdebt service obligations. We may not be able to obtain additional capital on commercially reasonable terms, which could adversely affectour liquidity and financial position.

We currently have very little limited cash resources as all of our fundraising in the last year have been expended on operating our business. We will thus require substantial additional capital 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 inour 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.

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

We currently owe approximately $1,690,000 plus $338,000 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 J. LoRicco, Sr.. This note matured on February 12, 2022, and as of the date of this Annual Report, no event of default has been called by the note holder.

In addition, in April 2021, we entered into six simple Promissory Notes with certain related parties and their associates for total proceeds $595,000. These notes each carried a 12-month term at 18% simple interest and are now due or about to come due. The accumulated interest under these notes is approximately $107,000.

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 continueto 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 in light of 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 derivea substantial portion of our future revenue from sales of BasaFlex and other BFRP products, which leaves us reliant on the commercialviability of such products.

Currently, our primary product is BasaFlex^TM^. We are also developing and marketing secondary sources of basalt fiber-based product revenue, band we expect that sales of BasaFlex^TM^ 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^TM^ 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^TM^ 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^TM^ 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^TM^and decreased or lower than expected sales of BasaFlex^TM^ for any reason would cause us to lose substantially all of our revenue.

We may be unable to derive the benefitsthat we currently anticipate from the Supplier Agreement with CPPB and the Distributor Agreement with USS, and Manuel A. Rodriguez, anaffiliate 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.

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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 andfor 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<br> (including “dumping” or other price<br><br> <br>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 manufacturingcapability and infrastructure necessary to achieve the 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.

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Our relationshipswith our channel partners may be terminated or may not continue to be beneficial in generating new clients, which could adversely affectour 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 marketingefforts 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 a number of 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-effectivemanner 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 wemay 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.

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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 product 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 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 unableto 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 andother intellectual property are subject to challenges by third parties, and if our intellectual property is successfully challenged orinvalidated, 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.

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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 the 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 be currently 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 employeesand others may not adequately prevent disclosure of trade secrets and other proprietary information and disclosure of our trade secretsor proprietary information could compromise any competitive advantage that we have, which could have a materially adverse effect on ourbusiness.

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, couldnegatively impact our business, financial condition, and results of operations.

We must grow 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.

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We depend on certainkey personnel and need to attract and retain additional personnel.

We substantially rely on the efforts of our current senior management, including Simon R. Kay, our Chief Executive Officer and President and acting interim Chief Financial Officer. Our business would be impeded or harmed if we were to lose his services. In addition, we currently need to fill key officer and other positions, such a permanent Chief Financial 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 turnover of key employees could adversely affect our business.

Our independent directors and executive officers have limitedexperience 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.

There is a riskthat our PPP loan will not be forgiven in whole or in part.

In February 2021, we received loan proceeds in the amount of approximately $165,000 under the Paycheck Protection Program (or PPP), established as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act, which provides economic relief to businesses in response to the COVID-19 pandemic. The loan and accrued interest are forgivable after 24 weeks as long as we use the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and our employee head count remains consistent with our baseline period over the 24-week period after the loan was received. The amount of loan forgiveness will be reduced if we terminate employees or reduce salaries during the 24-week period. The unforgiven portion of the PPP loan is payable over two years at an interest rate of 1%, with a deferral of payments for the first six months. While we believe that our use of the loan proceeds will meet the conditions for forgiveness of the loan, there is a risk that the loan will not be forgiven or that we will take actions that could cause us to be ineligible for forgiveness of the loan, there is a risk that (i) the loan will not be forgiven, in whole or in part, (ii) we will take actions that could cause us to be ineligible for forgiveness of the loan, in whole or in part or (iii) we may be required to repay the loan, in whole or in part, upon event of default under the loan or upon a breach of applicable PPP regulations. We applied for forgiveness of our February 2021 PPP loan on January 17, 2022. No assurances can be given that our application will be approved.

The novel coronavirus pandemic has and couldcontinue to adversely impact our business by delaying our ability to receive raw materials and manufacture our product or otherwise effectivelyconduct 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.

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Risks Related to Our Industry

We compete with larger, more established companies, and our sizeand 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 regulatoryrequirements 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 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 otherraw materials.

We will depend on the timely availability of various raw materials, including basalt fiber, for the manufacture of our products from various different 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 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, adverselyimpact 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 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 eaffect our business and results of operations.

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Government contractsgenerally are subject to a variety of governmental regulations, requirements and statutes, the violation or alleged violation of whichcould 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 complywith certain federal or state laws, we could be suspended or debarred from government contracting, which could have a material adverseeffect 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 isseasonal 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 snows 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 localeconomic environment impacting the construction industry may lead to declines in the construction industry and the demand for our productsby 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 results of operations.

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

Political events, such as the imposition of tariffs or the dissolution of trade agreements, may negatively impact 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 is 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 the construction industry and demand for our products in general. Impacts from such events could adversely impact business and results of operations.

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General Business Risks Associated with Our Company

There may be legacy issues (including potentialliabilities) 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 2019, and in that time has had to address several legacy issues which arose under our previous management, including the recent settlement of the lawsuit with Raw Energy, and the resolution of the judgment awarded to the California State Teachers Retirement System, 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 andoperating 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 ourinformation technology systems, and any failure to adequately protect our critical information technology systems could materially affectour 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 potentiallosses 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.

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We could face potential product liabilityand warranty claims, we may not accurately estimate costs related to such claims, and we may not have sufficient insurance coverage availableto 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 ableto consummate our contemplated Re-IPO.

Under the terms of our August 2021 Private Placement, we are required to conduct a 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 inthe 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 153,131,931 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 stockis 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 tospecial 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.

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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 sales persons;
·	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 in a position 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 theattention 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 securedconvertible promissory note will result in dilution to existing stockholders and could negatively affect the market price of our commonstock.

At the date of this Annual Report, we have an outstanding 20% secured promissory note in the aggregate principal amount of $1,689,745*,* 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 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 outstandingsecured convertible promissory note (which holder is associated with one of our directors) has rights which are senior to the rights ofour common stockholders, and which may impair our financing efforts.

The principal holder of the $1,689,745 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 note holder 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 holder 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.

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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 andsuch 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 35.11% 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 largeblocks of restricted common stock. 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, 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 investorsthat 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 requiredsecurities 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 stockissuable 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 is 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 adversely 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.

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Adjustments to the conversion price forcertain 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 inthe 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 restrictionson 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.

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Actions of activistshareholders could be disruptive and potentially costly and the possibility that activist shareholders may seek changes that conflictwith 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 touse our net operating losses and research and development credit carryforwards to offset future taxable income may be subject to certainlimitations.

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 orindustry 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.

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Anti-takeover provisionsin our charter documents and Nevada law could discourage, delay or prevent a change in control of our company and may affect the tradingprice 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 andoperational 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 intendto 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 2.	Properties.

Our principal office is leased and located at 2041 N.W. 15^th^ Avenue, Pompano Beach, FL 33069. The lease is for approximately 36,900 square feet of space, which includes our corporate office and our production floor. We 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.

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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. However, to our knowledge, we are not currently subject to any legal proceedings.

Item 4.	Mine Safety Disclosures.

Not Applicable.

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PARTII

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.”

As of March 31, 2022, there were 282 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.

UnregisteredSales of Equity Securities and use of Proceeds

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 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.

Issuances in 2021

We entered into a consulting agreement with Integrous Communications on May 17, 2021 for investor communications services in exchange for shares of restricted common stock as compensation. During the year ended December 31, 2021, we issued a total of 518,182 shares of common stock with execution date fair values ranging from $0.275 to $0.299 per share or a total value of $149,700.

We entered into a consulting agreement with Bridgeview Capital on July 9, 2020 for services in exchange for restricted common stock as compensation. During the year ended December 31, 2020, we issued a total of 600,000 shares of common stock to Bridgeview Capital with an execution date fair value of $0.29 per share or $174,000. During the year ended December 31, 2021, we issued a total of 1,050,000 shares of common stock with execution date fair values ranging from $0.23 to $0.35 per share or a total value of $304,500.

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We entered into a consulting agreement with Seth Shaw on October 13, 2020 in exchange for restricted common stock as compensation for the consulting services. No shares were issued during the year ended December 31. 2020. During the year ended December 31, 2021, we issued Mr. Shaw a total of 750,000 shares of common stock with execution date fair values ranging from $0.23 to $0.35 per share or a total value of $217,500.

On January 26, 2021, an investor exercised 1,000,000 warrants for restricted common shares at a strike price of $0.1235 per share in exchange for $123,500.

On January 26, 2021, we issued the 200,000 restricted common shares to the investor in exchange for the funds received and recorded as a subscription liability of $40,000 on December 31, 2020.

On February 11, 2021, we issued 250,000 unrestricted common shares to an investor in exchange for $50,000.

On February 12, 2021, we issued an amended and restated secured convertible promissory note to the noteholders in exchange for $1,610,005 bearing an interest rate of 20% per annum and payable in three months. 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, we issued to the Holders, on a pro rata basis, 15,000,000 five-year common stock warrants with an exercise price of $0.20. On May 12, 2021, we extended the maturity of this note 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 in 9 months. 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 note, we issued to the holders, on a pro rata basis, 7,500,000 5-year common stock warrants with an exercise price of $0.35.

On March 29, 2021, an investor purchased 127,128 restricted common shares from us in exchange for $23,900.

On April 5, 2021, we issued the 127,128 restricted common shares to the investor in exchange for the funds received and recorded as a subscription liability of $23,900 on March 31, 2021.

On April 16, 2021, upon the conversion of a note $300,000 into 3,000,000 common stock warrants additional paid-in capital was generated in the amount of $300,000 for the original principal of the note.

On May 21, 2021, upon the conversion of a $300,000 note into 6,000,000 common stock warrants additional paid-in capital was generated in the amount of $300,000 for the original principal of the note.

On June 10, 2021, 600,000 shares were issued per the two consulting agreements entered on July 9, 2020, and October 16, 2020, for fundraising services.

On June 10, 2021, 300,000 shares were issued per the consulting agreement entered on May 17, 2021, for investor relations services.

From June 10 to June 24, 2021, we issued a total of 608,541 restricted common shares to 14 investors r in exchange for $217,877.

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On August 17, 2021, we conducted the closing of a private placement offering to accredited investors (in which Aegis Capital Corp. acted as placement agent) of units at a price of $0.275 per Unit, with each Unit consisting of: (i) one (1) share of common stock, (ii) a five-year, immediately exercisable warrant (“Warrant A”) to purchase one (1) 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 (1) share of common stock at the $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 our company. In connection with the August 2021 Private Placement, we entered into definitive securities purchase agreements with 19 accredited investors and issued an aggregate of 19,398,144 shares of common stock, Warrant As to purchase up to an aggregate of 19,398,144 shares of common stock, and Warrant Bs to purchase up to an aggregate of 19,398,144 shares of common stock (for an aggregate of 38,796,288 shares of common stock underlying the Warrant As and Warrant Bs), for aggregate gross proceeds to us of approximately $5,334,490.

On September 3, 2021, we entered into a consulting agreement with Frederick Berndt for strategic planning and financial markets services in exchange for shares of restricted common stock and cash compensation of $12,500 per month. The term of the agreement is for twelve months with the option for renewal quarterly for a maximum of two years from the effective date of the agreement. During the year ended December 31, 2021, we issued warrants to purchase a total of 1,025,000 shares of common stock to Mr. Berndt at exercise prices ranging from $0.30 to $0.33 per share with a total execution date fair value of $265,933.

On November 22, 2021, we issued 101,364 shares of common stock to Capital Events Management, an affiliate of Integrous Communications, at a grant date fair value of $0.275 per share or $28,875. The grant date fair value was determined pursuant to the existing Integrous contract.-This amount was charged to stock-based compensation during the year ended December 31, 2021.

On December 10, 2021, we issued to USS, a strategic partner, a warrant to purchase 40,000,000 shares of common stock (only 20,000,000 of such shares being vested), exercisable at a price of $0.33 per share with a grant date fair value of $3,907,973.

Issuances in 2020

In April 2020, we issued 4,166,667 restricted common shares, par value $.001 per share, in exchange for the $416,667 received in the prior period from investors. The investors also received 4,000,000 five-year warrants with an exercise price of $0.30 per share and 16,667 five-year warrants with an exercise price of $0.40 per share.

In June 2020, we received $200,000 from investors in exchange for 912,409 restricted common shares, par value $.001 per share, for $0.1096 per share and 961,538 restricted common shares, par value $.001 per share, for $0.104 per share. Both investors received equal amounts of five-year warrants with an exercise price to be determined as the greater of: (a) three times the purchase price for the common shares pursuant to the subscription agreement; or(b) the price equal to 80% of the lowest open market closing price of the common shares during the twenty trading days preceding the 120^th^ calendar day after the purchase date.

On June 24, 2020, noteholders including entities managed by Ronald J. LoRicco, Sr., a member of the Board of Directors, converted their convertible notes payable with a principal balance of $360,000. The noteholders converted all principal and accrued interest (where applicable) under these notes in the amount of $367,163 (which includes interest accrued through June 24, 2020) in exchange for 3,125,201 restricted common shares. As part of the convertible note agreements, the noteholders were issued five-year warrants of an equal amount.

On July 21, 2020, noteholder Michael V. Barbera, our Chairman of the Board, converted a promissory note of $50,000 and accrued interest of $2,826 in exchange for 400,195 restricted common shares and 400,195 five-year warrants with an exercise price of $0.396 per share.

On July 21, 2020, two noteholders converted promissory notes of $25,000 and accrued interest of $809 each in exchange for 280,532 restricted common shares and 280,532 five-year warrants with an exercise price of $0.312 per share.

On July 21, 2020, noteholder Michael V. Barbera, our Chairman of the Board, converted a promissory note of $25,000 and accrued interest of $809 in exchange for 195,522 restricted common shares and 195,522 five-year warrants with an exercise price of $0.396 per share.

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On July 21, 2020, a noteholder converted two promissory notes totaling $100,000 and accrued interest of $3,523 in exchange for 784,269 restricted common shares and 517,286 five-year warrants with an exercise price of $0.396 per share.

On August 3, 2020, **** we 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. We were to 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 us 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 us 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, we paid the accredited investor the total amount due of $11,007, which included $1,007 of accrued interest.

On August 3, 2020, **** we 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. We were required to 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 us 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 us 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, we paid the Chairman the total amount due of $27,518, which included $2,518 of accrued interest.

On August 5, 2020, a noteholder converted a promissory note of $258,524 and accrued interest of $102,176 in exchange for 2,061,143 restricted common shares.

On August 5, 2020, an accredited investor received 163,043 restricted common shares and 163,043 five-year warrants with an exercise price of $0.54 per share in exchange for $30,000.

On August 24, 2020, a noteholder settled the amount due on several promissory notes totaling $191,965 and accrued interest of $15,729 in exchange for 1,136,364 restricted common shares and 1,136,364 five-year warrants with an exercise price of $0.396 per share.

On September 25, 2020, an accredited investor exercised his warrants at an exercise price of $0.075. The investor received 500,000 restricted common shares in exchange for $37,500.

On September 28, 2020, we received $90,000 from an accredited investor to purchase 300,000 restricted common stock. The restricted common stock had not been issued as of September 30, 2020, and therefore, is represented as a subscription liability.

Item 6.	Reserved.

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| --- | | 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, 2021, and 2020. 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 ImpactingOur Operations

COVID-19

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Inflation & Interest Rate Sensitivity

In the past two fiscal years, inflation has not had a significant impact on our business. However, during the second half of 2021 and into 2022, 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 with 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 ourProducts

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 in the pursuit of ICC-ES certification, which is expected during the second quarter of 2022, and a Florida Department of Transportation (“FDOT”) production facility approval, which is expected in the third quarter of 2022 (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. Until we have obtained these additional approvals, our opportunities to bid on certain projects will be limited.

Results of Operations

Revenue – We had $193,194 of revenues as a result of sales of finished goods sold for the year ended December 31, 2021, compared to $7,161 in the prior year. While the increase in revenue in the year over year periods was material due to our ability to sell some BasaFlex™ product in 2021, overall revenues have been minimal due to our lack of funding and as a result our continuing shift in focus to the scaling of production and inventory during both periods.

*Cost of goods sold –*During the year ended December 31, 2021, we had cost of sales of $1,970,194 compared to $4,487 in the prior year. During 2021 we began our production activities -- first activities were to build test articles for two sets of independent lab tests, and then the commencement of building finished goods inventory. Most of the cost of goods sold is related to inventory valuation, not to sales. However, 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.

Operating Expenses

Selling, general, and administrativeexpenses – During the year ended December 31, 2021, selling, general, and administrative were $8,018,152 compared to $2,988,632 in the prior year. The primary components of selling, general, and administrative expenses were as follows:

Stock based compensation – During the year ended December 31, 2021, stock based compensation was $5,043,112 compared to $165,590 in the prior year. We issued vested warrants to purchase 20,000,000 shares of common stock with a fair value of $3,907,973 to a strategic partner (USS) controlled by a director (Manuel A. Rodriguez). During the year ended December 31,2021, we also issued warrants with an aggregate fair value of $900,960 to consultants, and options to directors with a fair value of $263,780.

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| --- | | · | Payroll and payroll taxes – During the year ended December 31, 2021, payroll and payroll taxes were $1,153,540 compared to $837,348 in the prior year. We retained a total of 23 employees at the period end December 31, 2021, as compared to 13 employees at the close of the December 31, 2020 period. | | --- | --- | | · | Professional fees – During the year ended December 31, 2021, professional fees were $775,004 compared to $438,749 in the prior year. The increase was primarily due to legal fees incurred with regard to our fundraising activities. | | --- | --- | | · | Consulting Fees – During the year ended December 31, 2021, consulting fees were $544,560 compared to $270,525 in the prior year. The increase was due to consulting agreements connection with our fundraising activities and to an increase in compensation to our current Chief Executive Officer and President and acting interim Chief Financial Officer. | | --- | --- | | · | Facilities and related costs – During the year ended December 31, 2021, costs related to our facilities were $36,852 compared to $481,084. These costs consisted primarily of rent in the amount of $25,696 and utilities in the amount of $10,431. The decrease was because the majority of rent and utilities expense was charged to cost of goods sold in the current year. | | --- | --- | | · | Investor relations – During the year ended December 31, 2021, investor relations costs were $148,517 compared to $29,838 in the prior year. The increase was due to increased capital markets communications. | | --- | --- | | · | Depreciation and amortization – During the year ended December 31, 2021, depreciation and amortization was $8,560 compared to $117,340 in the prior year. The decrease was because the majority of depreciation expense was charged to cost of goods sold in the current year. | | --- | --- |

Other Income (Expenses)

Gain on settlement of legalcontingency - During year ended December 31, 2021, we had a gain of $409,127 on the settlement of legal contingencies. There were no comparable transactions in the prior year.

*Gain on sale of asset –*We recorded a gain on the sale of assets in the amount of $40,838 in the prior period; there was no comparable transaction during year ended December 31, 2021.

Gain on settlement of payables- During year ended December 31, 2021, we had a gain of $39,902 compared to $293,678 in the prior year. The gain in the current year is due to the settlement of various accounts payable amounts. The gain in the prior year is due to the forgiveness by prior management of accrued wages.

Miscellaneous income - During the year ended December 31, 2021, miscellaneous income was $0 compared to $70,817 in the prior year. The decrease is due to the net settlement of $125,000 less the contingency fee and expenses paid to the attorney for litigation which occurred in the prior year.

Loss on extinguishment ofdebt - During the year ended December 31, 2021, we had a loss of $6,743,015 compared to $56,948 in the prior year. The increase in loss is due to the settlement of various long-standing debts for warrants which exceeded the value of the debt. For more information about these transactions refer to footnote 6 of the financial statements included in this Annual Report.

Loan forgiveness - During the year ended December 31, 2021, we had loan forgiveness income of $124,143 compared to $0 in the prior year. The increase was due to the forgiveness of a loan from the U.S. Small Business Administration under the Paycheck Protection Program.

Interestexpense - During the year ended December 31, 2021, interest expense was $512,418 compared to $898,257 in the prior year. The decrease is primarily due a decrease in the principal amount of debt outstanding during current period.

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Liquidity and Capital Resources

Since inception, we have incurred net operating losses and generated negative cash flows in operations. As of December 31, 2021, we had an accumulated deficit of $46,121,210. At December 31, 2021, we had cash of $109,514 compared to $259,505 at December 31, 2020, 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 $1,690,000 plus $338,000 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, 2022, and as of the date of this Annual Report, no event of default has been called by the note holder. In addition, in April 2021, we entered into six simple Promissory Notes with certain related parties and their associates for total proceeds $595,000. These notes each carried a 12-month term at 18% simple interest, and are now due or about to come due. The accumulated interest under these notes is currently approximately $107,000. 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 during 2021 and 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 the level of sales revenue sufficient to provide positive cash flow, we require funding of 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 of our securities as well as bridge loan arrangements. We cannot provide any assurances that required capital will be obtained or 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 $4,507,418 and $2,799,499 for the years ended December 31, 2021 and 2020, respectively. During the year ended December 31, 2021, we used $2,346,483 net cash for investing activities compared to $339,586 used in the prior fiscal year. The increase 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.

During the year ended December 31, 2020, we had $3,269,438 net cash provided by financing activities. Proceeds of $1,797,068 from the sale of stock from accredited investors and related parties for 15,495,629 restricted common shares issued; borrowing of $1,886,727 from the issuance of convertible and short-term notes payable, including from related parties; less $348,000 of full repayment of a convertible note; less $66,357 of full repayment of short-term notes payable.

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During the year ended December 31, 2021, we had $6,703,910 net cash provided by financing activities compared to $3,269,438 in the prior year. Sale of common stock shares for $5,178,163; borrowing of $2,121,247 from the issuance of convertible and short-term notes payable, including from related parties; less $595,500 of principal repayments on notes and convertible notes, including to related parties, provided the net cash during the year ended December 31, 2021. Additionally, a note payable in the amount of $300,000 was exchanged for 6,000,000 five-year warrants on May 21, 2021.

Summary of Critical Accounting Policies

Inventory

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.

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<br>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 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, 2021.

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Because of the identified material weaknesses on internal control over financial reporting, management has concluded that our disclosure controls and procedures were not effective as of December 31, 2021.

Management’s Annual Report on Internal Control over FinancialReporting

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 Chief Executive Officer, President 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<br>and dispositions of our assets;
·	Provide reasonable assurance that transactions are recorded as necessary to permit preparation of Consolidated<br>Financial Statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations<br>of our management and our Board of Directors; and
---	---
·	Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use<br>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, 2021. 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 a material weakness and is not effective as of December 31, 2021. This weakness consists 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 (including a permanent Chief Financial Officer), 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 FinancialReporting

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.

None.

Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

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PART III

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
Simon R. Kay	59	Chief Executive Officer & President; Acting Interim Chief Financial Officer
Michael V. Barbera	68	Chairman of the Board of Directors
Ronald J. LoRicco, Sr.	57	Director
Paul M. Sallarulo	65	Director
Adam Falkoff	54	Director
Manuel A. Rodriguez	60	Director
Frederick H. Tingberg Jr.	63	Director

Biographical Summaries of Directors and Executive Officers

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

Simon R. Kay has served as our Chief Executive Officer and President and Acting Interim Chief Financial Officer since March 2022. He previously served as the interim acting Chief Executive Officer and President since March 2020. He also has served as our Acting Chief Financial Officer since March 2020. Mr. Kay has an extensive record of achievement directing business, sales, new product development, and operations management with the aerospace sector. His previous experience included roles as COO of Aerospace Technologies Group from 2002 to 2006 and President and CEO from January 2007 to March 2019. Mr. Kay has also worked for divisions of Fortune 500 Companies in both operations management and sales and marketing roles. From 1996 to 1998 he worked in operations management and sales for Gulfstream Aerospace (a division of General Dynamics) and from 1993 to 1995 he worked in a sales and marketing role for Raytheon Aircraft. Mr. Kay received his Master of Business Administration from Georgetown University in 1990 and his Bachelor of Science in Professional Aeronautics, with a focus in Aviation Business Administration) from Embry-Riddle Aeronautical University in 1988.

MichaelV. Barberahas served as our Chairman of the Board since January 2020 and having served as a member of the Board of Directors since February 2019. Mr. Barbera has served as the Chief Executive Officer of Analytical Maintenance Services, Inc. (“AMS") located in Boca Raton, Florida since 1998. AMS, a privately held company, provides analytical instrument services, instrumentation, comprehensive training courses and general application support to both the chemical and pharmaceutical industries. Mr. Barbera received a Bachelor of Science in Electronic Engineering in 1977 from the Florida Keys Community College and a Bachelor of Professional Studies in Science from Barry University in 1990. Mr. Barbera also served in the United States Navy from 1972 through 1978, where he specialized in Aviation Electronics.

*RonaldJ. LoRicco, Sr.*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.

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Paul M. Sallarulo 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.

AdamFalkoff 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 WashingtonDiplomat, Jack O'Dwyer's Newsletter, Capitol File, Washington Life, National Journal, Technology Law Journal, Greenwire, ApplianceMagazine, 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, 60, 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.

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FrederickH. Tingberg, Jr., 63, 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.

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	Ronald J. LoRicco, Sr.
		Adam Falkoff
		Paul M. Sallarulo
Compensation	X	Ronald J. LoRicco, Sr.
		Adam Falkoff
		Paul M. Sallarulo
Nominating and Corporate Governance	X	Paul M. Sallarulo
		Ronald J. LoRicco, Sr.
		Adam Falkoff

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 obtaining a qualified individual which meets the definition of “audit committee financial expert”.

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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 2021 and 2020. 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, 2021 and 2020 appearing elsewhere in this Annual Report.

For the year ended December 31, 2021:

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 (1)	$	—	$	—	$	—	$	—	$	—	$	8,438	$	8,438
Adam Falkoff (2)	$	—	$	—	$	102,923	$	—	$	—	$	—	$	102,923
Michael V. Barbera (3)	$	—	$	—	$	160,857	$	—	$	—	$	—	$	160,857
Ronald J. LoRicco	$	—	$	—	$	—	$	—	$	—	$	—	$	—

For the year ended December 31, 2020:

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 (1)	$	—	$	—	$	—	$	—	$	—	$	15,665	$	15,665

(1) Reflects the value of the portion of health insurance benefits paid by the Company.

(2) Consists of the grant date fair value of options to purchase 500,000 shares of the Company’s common stock at a price of $0.28 per share.

(3) Consists of the grant date fair value of options to purchase 777,778 shares of the Company’s common stock at a price of $0.27 per share.

Family Relationships

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

Involvementin 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., 2041 N.W. 15^th^ Avenue, Pompano Beach, FL 33069, Attention: Mr. Michael V. Barbera, Chairman.

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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., 2041 N.W. 15^th^ Avenue, Pompano Beach, FL 33069. Attention: Mr. Michael V. Barbera, 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 2021.

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<br>serving as executive officers at December 31, 2021 as that term is defined under Rule 3b-7 of the Securities Exchange Act of 1934;<br>and
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·	Up to two additional individuals for whom disclosure would have been required but for the fact that the<br>individual was not serving as an executive officer at December 31, 2021.
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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)		2021
President and Chief Executive Officer; Acting Interim Chief Financial Officer		2020
David L. Anderson (2)(3)		2021
Chief Operating Officer		2020
Isabella Barbera (4)		2021
Former Chief Financial Officer		2020

All values are in US Dollars.

———————

(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.

(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) Includes relocation reimbursement of $15,000 was received as per the employment contract. Ms. Barbera resigned effective July 6, 2020 later serving as a consultant to the Company as Financial Controller. She presently provides no services to the Company. She is the daughter of Michael Barbera, our Chairman of the Board.

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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.

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 2021, our Acting Chief Executive Officer, Simon Kay, was compensated pursuant to a consulting agreement; and our former Chief Operating Officer, David Anderson, were compensated per his employment agreement. Our former Chief Financial Officer, Isabella Barbera, was compensated per a consulting agreement. These agreements were negotiated and approved by our Board of Directors.

2021 Option and Warrant Grants to ExecutiveOfficers

None.

2020 Option and Warrant Grants to Executive Officers

None.

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. These warrants remained outstanding at December 31, 2021.

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. 4,000,000 of these warrants remained outstanding at December 31, 2021.

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, 2021.

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.

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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 2041 N.W. 15^th^ Avenue, 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. Applicable percentage of ownership is based on 248,840,144 of common stock outstanding as of date of this Annual Report.

	Number of Shares		Percentage of
	Beneficially<br> Owned		Shares Outstanding (1)
Named Executive Officers and Directors:
Simon R. Kay (2)		1,000,000		*
Michael V. Barbera (3)		12,753,214		4.98	%
Ronald J. LoRicco, Sr. (4)		60,915,912		22.60	%
Paul Sallarulo (5)		7,334,493		2.89	%
Adam Falkoff (6)		500,000		*
Frederick Tingberg Jr.(7)		33,600		*
Manuel A. Rodriguez (8)		20,919,090		7.68	%
All executive officers and directors as a group (7 persons)		103,456,309		35.11	%

———————

* Less than 1%.

(1)	Shares of common stock beneficially owned and the respective percentages of beneficial ownership of common<br>stock assume the exercise of all options and other securities convertible into common stock beneficially owned by such person or entity<br>currently exercisable or exercisable within 60 days of the date of this Annual Report, except as otherwise noted. Shares issuable pursuant<br>to the exercise of stock options and other securities convertible into common stock exercisable within 60 days are deemed outstanding<br>and held by the holder of such options or other securities for computing the percentage of outstanding common stock beneficially owned<br>by such person, but are not deemed outstanding for computing the percentage of outstanding common stock beneficially owned by any other<br>person.
(2)	Includes a vested warrant shares currently held by Mr. Kay to purchase 1,000,000 shares of common stock<br>at $0.33 per share.
---	---
(3)	Includes shares currently held by Mr. Barbera and Analytical Maintenance Services, Inc. Profit Sharing<br>Plan, where Mr. Barbera is the trustee. Includes 50,000 shares of common stock issuable upon exercise of common stock purchase warrant<br>exercisable at $0.40 per share, 50,000 shares issuable upon exercise of common stock purchase warrant exercisable at $0.60 per share,<br>200,000 shares issuable upon exercise of common stock purchase warrant exercisable at $0.15 per share, 1,000,000 shares issuable upon<br>exercise of common stock purchase warrant exercisable at $0.075 per share, 400,195 shares issuable upon exercise of common stock purchase<br>warrant exercisable at $0.396 per share, 195,522 shares issuable upon exercise of common stock purchase warrant exercisable at $0.396<br>per share, 1,500,000 shares issuable upon exercise of common stock purchase warrant exercisable at $0.20 per share, and 777,778 shares<br>issuable upon exercise of options to purchase common stock exercisable at $0.27 per share.
---	---
(4)	Includes shares held by RVRM Holdings, Inc., First New Haven Mortgage Company, LLC and LoRi Co., which<br>are controlled by our director, Ronald J. LoRicco, Sr. Includes 500,000 shares of common stock issuable upon exercise of common stock<br>purchase option exercisable at $0.25 per share, 397,269 shares issuable upon exercise of common stock purchase warrant exercisable at<br>$0.396 per share, 11,250,000 shares of common stock issuable upon exercise of common stock purchase warrants exercisable at $0.20 per<br>share, and 5,625,000 shares of common stock issuable upon exercise of common stock purchase warrants exercisable at $0.35 per share. In<br>addition, an entity related to Mr. LoRicco currently holds a $1.6 million secured convertible note that does not have a stated conversion<br>rate, but cannot convert for any less than $0.01 per share.
---	---

| 43 |

| --- | | (5) | 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. | | --- | --- | | (6) | 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. | | --- | --- | | (7) | 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. | | --- | --- | | (8) | 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<br>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<br>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.

On January 16, 2020, we entered into a demand note agreement with our Chairman of the Board, Michael V. Barbera, in the amount of $50,000. The note had a term of 6 months bearing an interest rate of 10% per annum.

On January 16, 2020, we entered into a demand note agreement with an entity managed by Ronald J. LoRicco, Sr., a member of our Board of Directors, in the amount of $50,000. The note had a term of 6 months bearing an interest rate of 10% per annum.

On April 13, 2020, the two demand notes payable entered on January 16, 2020 for $50,000 each from related parties was exchanged for convertible debt. The noteholders, Michael V. Barbera, our Chairman of the Board and an entity managed by Ronald J. LoRicco, Sr., a member of our Board of Directors, converted the promissory notes. Mr. Barbera converted the promissory note of $50,000 and accrued interest of $2,440 on June 26, 2020 in exchange for 397,269 restricted common shares and 397,269 five-year warrants with an exercise price of $0.396 per share. Mr. LoRicco converted the promissory note of $50,000 and accrued interest of $2,826 on July 21, 2020 in exchange for 400,195 restricted common shares and 400,195 five-year warrants with an exercise price of $0.396 per share.

On June 26, 2020, an entity managed by Ronald J. LoRicco, Sr., a member of our Board of Directors, converted a promissory note of $150,000 and accrued interest of $3,542 in exchange for 1,163,201 restricted common shares and 1,163,201 five-year warrants with an exercise price of $0.396 per share.

On July 8, 2020, we negotiated with an entity managed by Vincent L. Celentano, the a more than 5% shareholder, who held several demand notes payable 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. 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.

| 44 |

| --- |

On August 3, 2020, we issued an unsecured convertible promissory note bearing an interest rate of 18% per annum and payable in six months to Michael V. Barbera, the Chairman of the Board, in exchange for $25,000. (See Note 5.)

On August 3, 2020, we issued a secured convertible promissory note bearing an interest rate of 20% per annum and payable in six months to The Richard A. LoRicco Sr. and Lucille M. LoRicco Irrevocable Insurance Trust DTD 4/28/95, Louis Demaio as Trustee (the “Trust”) and certain other accredited investors in exchange for $1,000,000. The Trust is the holder of $750,000 of the principal amount of this note. The Trust is maintained by Richard A. LoRicco Sr. and Lucille M. LoRicco, who are the parents of Ronald J. LoRicco Sr., one of the members of our Board of Directors. On February 12, 2021, we 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, we 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, we 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, we 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. As of the date of this filing, the maturity date of the note has passed but the noteholder has not issued a formal demand for payment.

During the week of November 20, 2020, during the discounted warrant event whereby accredited investors could exercise their outstanding warrants at 50% of their stated exercise price, several related parties exercised their warrants at a discount. Paul Sallarulo, a member of our Board of Directors, exercised 2,000,000 warrants originally issued with an exercise price of $0.075 for $75,000 or $0.0375 a share. Michael V. Barbera, our Chairman of the Board, exercised 1,000,000 warrants originally issued with an exercise price of $0.075 for $37,500 or $0.0375 per share. An entity managed by Ronald J. LoRicco, Sr., a member of our Board of Directors, exercised 1,163,201 warrants originally issued with an exercise price of $0.396 for $230,314 or $0.198 per share. The entity also purchased 11,632 discounted restricted common shares at $0.20 per share for $2,326.

On April 2, 2021, we 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 April 2, 2021. We also issued 1,500,000 common stock warrants at an exercise price of $0.20 per share expiring in 5 years. As of the date of this filing, the maturity date of the note has passed but the noteholder has not issued a formal demand for payment.

On April 2, 2021, we 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 April 2, 2022. We also issued 1,500,000 common stock warrants at an exercise price of $0.20 per share expiring in 5 years. As of the date of this filing, the maturity date of the note has passed but the noteholder has not issued a formal demand for payment.

On July 7, 2021, we issued a promissory note with an entity managed by Ronald J. LoRicco, Sr., a member of our Board of Directors, in exchange for $50,000 bearing an interest rate of 10% per annum. The maturity date for the promissory note is July 23, 2021. The note payable was paid in full on August 24, 2021.

On July 7, 2021, we issued a promissory note with Michael V. Barbera, our Chairman of the Board, in exchange for $50,000 bearing an interest rate of 10% per annum. The maturity date for the promissory note is July 23, 2021. The note payable was paid in full on August 24, 2021.

On July 15, 2021, we issued a promissory note to David Anderson, our former Chief Operating Officer, in exchange for $20,000 bearing an interest rate of 10% per annum. The maturity date for the promissory note is July 23, 2021. The note payable was paid in full on August 18, 2021.

| 45 |

| --- |

On July 26, 2021, we issued a promissory note with David Anderson, our former Chief Operating Officer, in exchange for $30,500 bearing an interest rate of 10% per annum. The maturity date of the promissory note is August 2, 2021. The note payable was paid in full on August 18, 2021.

On July 27, 2021, we issued a promissory note with Simon Kay, our Chief Executive Officer, President and acting interim Chief Financial Officer, in exchange for $10,000 bearing an interest rate of 10% per annum.

On August 6, 2021, we issued a promissory note with an entity managed by Ronald J. LoRicco, Sr., a member of our Board of Directors, in exchange for $100,000 bearing an interest rate of 10% per annum. The maturity date for the promissory note is August 24, 2021. The note payable was paid in full on August 24, 2021.

On December 10, 2021, we issued 20,000,000 warrants with an exercise price of $0.33 per share and a grant date fair value of $3,907,973 to USS, a strategic partner controlled by Manuel Rodriguez, a member of our Board of Directors.

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 Cherry Bekaert LLP, as well as the fees charged for such services. In its review of non-audit service and its appointment of Cherry Bekaert LLP, our independent registered public accounting firm for the respective years, the Audit Committee considered whether the provision of such services is compatible with maintaining independence. All of the services provided and fees charged by Cherry Bekaert LLP were approved by our Audit Committee.

The following table shows the fees for the years ended December 31, 2021 and 2020:

	2021		2020
Audit Fees ^(1)^	$	135,543	$	124,113
Tax Fees	$	—	$	—
All Other Fees	$	15,500	$	12,500

———————

(1)Audit	fees – these fees relate to the audit of our annual financial statements and the review of our interim<br>quarterly financial statements billed during the respective years.
(2)	All other fees – these fees relate to the consent fee for the filing of our comparative financial<br>statements for the previous year.
---	---

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PART IV

Item 15.	Exhibits, Financial Statement Schedules.

Exhibits

		Incorporated by Reference
Exhibit No.	Exhibit Description	Form	Date Filed	Number	Filed orFurnished Herewith	Previously Filed	To beFiled by Amendment
2.1	Agreement and Plan of Merger, dated December 11, 2018, between Basanite, Inc. and PayMeOn, Inc.	8-K	12/12/18	2.1
2.2	Articles of Merger, dated December 12, 2018	8-K	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	8-K	4/3/13	3.1
3.4	Amendment to Articles of Incorporation Name change and reverse split effective May 17, 2013	8-K	5/6/13	3.1
3.7	Amended and Restated Bylaws	8-K	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	8-K	3/12/19	4.1
4.3	Form of Common Stock Warrant issued in connection with September 2018 through March 2019 private placement	10-K	3/28/19	10.38
4.4	Form of Common Stock Warrant issued to 20% Secured Convertible Noteholders, dated February 12, 2021	8-K	2/19/21	4.1
4.5	Form of Common Stock Warrant issued to 20% Secured Convertible Noteholders, dated May 12, 2021	10-Q	5/17/21	4.2
4.6	Form of Warrant A issued in the August 2021 Private Placement	10-Q	8/23/21	4.1
4.7	Form of Warrant B issued in the August 2021 Private Placement	10-Q	8/23/21	4.2
4.8	Strategic Partner Warrant, dated December 10, 2021, issued to U.S. Supplies, Inc.	8-K	12/13/21	4.1
4.9	Warrant issued to Simon R. Kay, dated March 25, 2022	8-K	3/31/22	4.1
10.1	Commercial Lease Agreement between Basanite Industries LLC and CAMTON, LLC	8-K	1/31/19	10.1
10.2	Consulting<br> 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.	8-K	7/31/20	10.1

| 47 |

| --- | | 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 | 8-K | 2/19/21 | 10.1 | | | 10.7 | Form of Amended and Restated 20% Secured Promissory Note, dated May 12, 2021 | 10-Q | 5/17/21 | 10.2 | | | 10.8 | Form of Securities Purchase Agreement, dated August 17, 2021 | 10-Q | 8/23/21 | 10.1 | | | 10.9 | Form of Placement Agent Agreement between the Company and Aegis Capital Corp., dated August 17, 2021 | 10-Q | 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. | 8-K | 12/13/21 | 10.1 | | | 10.11 | Distribution Agreement between the Company and U.S. Supplies, Inc. dated December 10, 2021 * | | | | X | | 10.12 | Exclusive Supplier Agreement between the Company and Concrete Products of The Palm Beaches, Inc., dated December 10, 2021. * | | | | X | | 10.13 | Form of Transition Services Agreement, dated January 20, 2022 between the Company and Simon R. Kay | 8-K | 1/26/22 | 10.1 | | | 10.14 | Employment Agreement dated March 25, 2022 for Simon R. Kay | 8-K | 3/31/22 | 10.1 | | | 14.1 | Code of Ethics | 10-K | 4/5/12 | 14.1 | | | 21.1 | List of subsidiaries of the Company | 10-K | 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 | | 101.INS | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) | | | | X | | 101.SCH | Inline XBRL Taxonomy Extension Schema Document | | | | X | | 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | | | | X | | 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | | | | X | | 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | | | | X | | 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | | | | X | | 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | | | | 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.

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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, 2022

Basanite, Inc.
By:	/s/ Simon R. Kay
	Simon R. Kay
	Chief Executive Officer & President and 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/ Simon R. Kay	Chief Executive Officer & President (Principal Executive Officer and Principal Accounting Officer)	April 15, 2022
Simon R. Kay
/s/ Michael V. Barbera	Chairman of the Board	April 15, 2022
Michael V. Barbera
/s/ Ronald J. LoRicco, Sr.	Director	April 15, 2022
Ronald J. LoRicco, Sr.
/s/ Paul M. Sallarulo	Director	April 15, 2022
Paul M. Sallarulo
/s/ Manuel A. Rodriguez	Director	April 15, 2022
Manuel A. Rodriguez
/s/ Frederick H. Tingberg Jr.	Director	April 15, 2022
Frederick H. Tingberg Jr.
/s/ Adam S. Falkoff	Director	April 15, 2022
Adam S. Falkoff

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INDEX TO FINANCIALSTATEMENTS

BASANITE, INC. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

	Page
Report of Independent Registered Public Accounting Firm (Cherry Bekaert LLP, Fort Lauderdale, Florida, PCAOB ID 677)	F-2
Consolidated Balance Sheets	F-4
Consolidated Statements of Operations	F-5
Consolidated Statements of Stockholders’ Equity (Deficit)	F-6
Consolidated Statements of Cash Flows	F-7
Notes to Consolidated Financial Statements	F-9

| F-1 |

| --- |

REPORT OF INDEPENDENTREGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

Basanite, Inc. and Subsidiaries

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Basanite, Inc. and Subsidiaries (the “Company”) as of December 31, 2021 and 2020, 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, 2021, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

Explanatory Paragraph – Going Concern

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company’s significant operating losses and financing requirements to meet its future obligations and sustain its operations raise substantial doubt about its ability to continue as a going concern. Management’s evaluation of the events and conditions and plans regarding these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated 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 audits 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 consolidated 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 consolidated 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 consolidated financial statements. We believe our audits provide a reasonable basis for our opinion.

| F-2 |

| --- |

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Debt and Equity Instruments

As disclosed in Notes 5, 6, 7, 8, 10, and 11 to the consolidated financial statements, the Company has entered into convertible and nonconvertible note agreements containing attached warrants with individuals including related parties. The accounting for the transactions were complex, as it required assessment as to whether features, other than the conversion feature, required bifurcation and separate valuation. Additionally, the transactions were complex as they required valuation of the conversion feature in the debt instrument, which involved estimation of the fair value of the debt instrument absent of any conversion feature, and evaluation of the appropriate classification of the conversion feature in the financial statements.

Our audit procedures included the following:

·	We obtained an understanding of the internal controls and processes in place<br>over management’s process for recording debt and equity transactions.
·	We obtained and read the underlying note agreements.
---	---
·	We confirmed notes payable balances and terms with respective note holders.
---	---
·	We verified proper approval of equity transactions by the Board of Directors.
---	---
·	We evaluated the Company’s selection of the valuation methodology<br>and significant assumptions used by the Company, and evaluated the completeness and accuracy of the underlying data supporting the significant<br>assumptions. Specifically, when assessing the key assumptions, we evaluated the appropriateness of the Company’s estimates of its<br>credit risk, volatility, dividend yield, and the market risk free rate.
---	---
·	We tested management’s application of the relevant accounting guidance.
---	---
/s/ Cherry Bekaert LLP
---
We have served as the Company’s auditor since 2019.
Fort Lauderdale, Florida
April 15, 2022

| F-3 |

| --- |

BASANITE, INC. ANDSUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


			2020
ASSETS
CURRENT ASSETS
Cash	109,514		$	259,505
Accounts receivable, net	7,817			1,907
Inventory	714,655			446,575
Prepaid expenses	127,806			40,283
Deposits and other current assets	265,553			75,995
TOTAL CURRENT ASSETS	1,225,345			824,265
Lease right-of-use asset	749,116			1,004,167
Fixed assets, net	3,236,825			1,020,035
	3,985,941			2,024,202
TOTAL ASSETS	5,211,286		$	2,848,467
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable	1,175,682		$	249,353
Accrued expenses	407,454			197,350
Accrued legal liability	165,000			809,127
Notes payable	466,762			128,021
Notes payable - related party	300,000			—
Notes payable - convertible, net	—			10,000
Notes payable - convertible - related party, net	1,689,745			1,025,000
Subscription liability	—			40,000
Lease liability - current portion	325,339			267,289
TOTAL CURRENT LIABILITIES	4,529,982			2,726,140
Lease liability - net of current portion	499,546			826,388
TOTAL LIABILITIES	5,029,528			3,552,528
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, 248,840,144 and 224,836,785 shares issued and outstanding, respectively	248,842			224,838
Additional paid-in capital	46,054,126			28,714,488
Accumulated deficit	(46,121,210	)		(29,643,387	)
TOTAL STOCKHOLDERS' EQUITY(DEFICIT)	181,758			(704,061	)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	5,211,286		$	2,848,467

All values are in US Dollars.

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

| F-4 |

| --- |

BASANITE, INC. ANDSUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

	For the year ended
	December 31,
	2021			2020
Revenue
Products sales - rebar	$	193,194		$	7,161
Total cost of goods sold		1,970,604			4,487
Gross (loss) profit		(1,777,410	)		2,674
OPERATING EXPENSES
Selling, general, and administrative expenses		8,018,152			2,988,632
Total operating expenses		8,018,152			2,988,632
NET LOSS FROM OPERATIONS		(9,795,562	)		(2,985,958	)
OTHER INCOME (EXPENSE)
Gain on settlement of legal contingency		409,127			—
Gain on sale of asset		—			40,838
Gain on settlement of payables		39,902			293,678
Miscellaneous income		—			70,817
Loss on extinguishment of debt		(6,743,015	)		(56,948	)
Loan forgiveness		124,143			—
Interest expense		(512,418	)		(898,257	)
Total other income (expense)		(6,682,261	)		(549,872	)
LOSS FROM CONTINUING OPERATIONS		(16,477,823	)		(3,535,830	)
Deemed dividends		—			(663,501	)
NET LOSS	$	(16,477,823	)	$	(4,199,331	)
Net loss per share - basic and diluted	$	(0.070	)	$	(0.017	)
Weighted average number of shares outstanding - basic and diluted		235,473,411			209,163,821

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

| F-5 |

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BASANITE, INC. ANDSUBSIDIARIES

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, 2021		—	$	—		224,836,785	$	224,838	$	28,714,488	$	(29,643,387	)	$	(704,061	)
Warrants exercised for cash		—		—		1,000,000		1,000		122,500		—			123,500
Stock-based compensation		—		—		2,419,546		2,420		1,226,868		—			1,229,288
Warrants issued to related party		—		—		—		—		3,907,973		—			3,907,973
Stock issued for cash		—		—		20,583,813		20,584		5,034,079		—			5,054,663
Warrants issued for extinguishment of debt		—		—		—		—		7,048,218		—			7,048,218
Net loss		—		—		—		—		—		(16,477,823	)	$	(16,477,823	)
Balance December 31, 2021		—	$	—		248,840,144	$	248,842	$	46,054,126	$	(46,121,210	)	$	181,758
											Additional						Total
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	Preferred Stock				Common Stock						Paid-in			Accumulated			Stockholders'
	Shares		Par Value		Shares			Par Value			Capital			Deficit			Equity (Deficit)
Balance January 1, 2020		—	$	—		200,735,730		$	200,736		$	24,216,042		$	(25,444,056	)	$	(1,027,278	)
Stock issued for cash		—		—		8,385,289			8,386			1,134,606			—			1,142,992
Return of shares issued as loan committee fee		—		—		(1,300,000	)		(1,300	)		(128,700	)		—			(130,000	)
Convertible debt and debt discount		—		—		9,305,426			9,306			2,008,673			—			2,017,979
Stock issued for compensation		—		—		600,000			600			173,400			—			174,000
Warrants exercised for cash		—		—		7,110,340			7,110			646,966			—			654,076
Deemed dividend on common stock		—		—		—			—			663,501			—			663,501
Net loss		—		—		—			—			—			(4,199,331	)		(4,199,331	)
Balance December 31, 2020		—		—		224,836,785		$	224,838			28,714,488		$	(29,643,387	)	$	(704,061	)

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

| F-6 |

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BASANITE, INC. ANDSUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the year ended
	December 31,
	2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(16,477,823	)	$	(4,199,331	)
Adjustments to reconcile net loss to net cash used in operating activities:
Lease right-of-use asset amortization		255,051			218,686
Depreciation		129,693			117,340
Amortization of debt discount		—			707,533
Gain on settlement of legal contingency		(409,127	)		—
Gain on settlement of payable		(39,902	)		—
Loss on sale of asset		—			(40,838	)
Loss on inventory obsolescence		—			33,062
Deemed dividend		—			663,501
Gain on extinguishment of debt		6,743,015			56,948
Loan forgiveness		(124,143	)		—
Stock-based compensation		1,135,139			165,590
Warrants issued to related party		3,907,973			—
Changes in operating assets and liabilities:
Prepaid expenses		7,938			(5,233	)
Inventory		(268,080	)		(320,165	)
Accounts receivable		(5,910	)		(1,907	)
Deposits and other current assets		(189,558	)		49,263
Accounts payable and accrued expenses		1,137,108			(60,658	)
Subscription liability		(40,000	)		40,000
Lease liability		(268,792	)		(223,290	)
Net cash used in operating activities		(4,507,418	)		(2,799,499	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment		(2,346,483	)		(339,586	)
Net cash used in investing activities		(2,346,483	)		(339,586	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of common stock and exercise of warrants		5,178,163			1,797,068
Proceeds from convertible notes payable and convertible notes payable related party		500,000			1,620,000
Repayment of convertible notes payable and convertible notes payable related party		(35,000	)		(348,000	)
Proceeds from notes payable and notes payable related parties		1,621,247			266,727
Repayment of notes payable and notes payable related parties		(560,500	)		(66,357	)
Net cash provided by financing activities		6,703,910			3,269,438
NET (DECREASE) INCREASE IN CASH		(149,991	)		130,353
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		259,505			129,152
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	109,514		$	259,505

(Continued)

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

| F-7 |

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BASANITE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

	For the year ended
	December 31,
	2021		2020
Supplemental cash flow information:
Cash paid for interest	$	26,663	$	35,723
Supplemental disclosure of non-cash investing and financing activities:
Forgiveness of Paycheck Protection Program loan and accrued interest	$	124,143	$	—
Conversion of note payable into common stock	$	—	$	150,000
Return of loan commitment shares	$	—	$	(130,000	)
Issuance of warrants for services and options as compensation	$	4,437,686	$	—
Recording of debt discount on convertible notes	$	—	$	685,000
Conversion of convertible notes payable into equity	$	2,610,005	$	1,182,979
Conversion of note payable in exchange for warrants	$	300,000	$	—

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

| F-8 |

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BASANITE, INC. ANDSUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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 leases a fully permitted and Underwriters Laboratories (“UL”) approved 36,900 square foot facility located in Pompano Beach, Florida, equipped with five customized Pultrusion machines. Each machine has two linear production lines (a total capacity of 10 manufacturing lines). BI’s operations team is currently in the processes of 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 is utilized to evaluate, validate and verify each product’s performance attributes.

The manufacture of concrete reinforcement products made from continuous basalt fiber creates substantial benefits for the construction industry, including but not limited to, the following:

·	BasaFlex™ never rusts – steel reinforcement products rust, causing time and repair<br>costs down the road;
·	BasaFlex™ is sustainable; with a longer lifecycle – production of our products results<br>in exceptionally low carbon footprint when compared with steel. The lack of corrosion allows the “lifespan” of<br>concrete products to be significantly longer; and
---	---
·	BasaFlex™ has a lower final, in place cost – the physical nature of our products relative to<br>steel (4X lighter, easily transportable, “coil-able”, safer and easier to use) reduces the all-in cost of reinforcement when<br>all factors are considered.
---	---

(B) Liquidity and Management Plans

Since inception, the Company has incurred net operating losses and used cash in operations. As of December 31, 2021 and 2020, respectively, the Company reported:

·	an accumulated deficit of approximately $46.1 million and $29.6 million;
·	a working capital deficiency of approximately $3.3 million and $1.9 million; and
---	---
·	cash used in operations of approximately $4.5 million and $2.8 million.
---	---

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

At December 31, 2021, the Company

had cash of $109,514 compared to $259,505 at December 31, 2020.

| F-9 |

| --- |

| **BASANITE, INC. AND SUBSIDIARIES**<br><br>**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**<br><br>**FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020**<br><br>**** |

| --- |

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.

(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 the first-in, first-out basis. Raw materials inventory consists primarily of basalt fiber and other necessary elements to produce the 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. An impairment charge due to cost basis in excess of fair market value in the amount of $1,535,356 was recorded during the year ended December 31, 2021. During the year ended December 31, 2020, the Company recorded a loss related to obsolete inventory in the amount of $33,062.

| F-10 |

| --- |

| **BASANITE, INC. AND SUBSIDIARIES**<br><br>**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**<br><br>**FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020**<br><br>**** |

| --- |

The Company’s inventory at December 31, 2021 and 2020 was comprised of:

Schedule of Inventories
	December 31, <br> 2021		December 31,<br> <br>2020
Finished goods	$	328,229	$	305,550
Work in process		35,213		35,286
Raw materials and supplies		351,213		105,739
Total inventory	$	714,655	$	446,575

(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
	December 31, <br> 2021			December 31,<br> <br>2020
Computer equipment	$	133,654		$	15,780
Machinery		717,437			667,536
Leasehold improvements		166,252			161,579
Office furniture and equipment		71,292			71,292
Land improvements		7,270			7,270
Website development		2,500			2,500
Construction in process		2,408,986			234,950
Total fixed assets		3,507,391			1,160,907
Accumulated depreciation		(270,566	)		(140,872	)
Total fixed assets, net	$	3,236,825		$	1,020,035

Depreciation expense for the

year ended December 31, 2021 was $129,693 compared to $117,340 for the year ended December 31, 2020.

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. 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.

| F-11 |

| --- |

| **BASANITE, INC. AND SUBSIDIARIES**<br><br>**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**<br><br>**FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020**<br><br>**** |

| --- |

(F) Deposits and other current assets

The Company’s deposits

and other current assets consist of the deposits made on equipment, security deposits, utility deposits and other receivables. The deposits are reclassified as part of the fixed asset cost when received and placed into service. The Company reclassified $31,173 of deposits from December 31, 2019 into machinery during the year ended December 31, 2020. There were no such reclassifications during the year ended December 31, 2021.

(G) Accrued expenses

The Company’s accrued expenses consist of the following:

Schedule of Accrued Expenses
	December 31, <br> 2021		December 31,<br> <br>2020
Accrued payroll and taxes	$	—	$	76,031
Accrued interest		312,409		88,147
Credit cards payable		177		4,752
Other accrued expenses		94,868		28,420
Total accrued expenses	$	407,454	$	197,350

(H) Accrued legal liabilities

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

Schedule of Accrued Legal Liability
	December 31, <br> 2021		December 31,<br> <br>2020
Accrued consulting fees	$	165,000	$	315,000
Judgement payable		—		388,867
Accrued interest on judgement		—		105,260
Total accrued legal liability	$	165,000	$	809,127

(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 Loss Per Share Computation
	December 31, 2021		December 31,<br><br> <br>2020
Options		4,227,778		4,542,500
Warrants		138,191,666		38,920,378
Convertible shares		6,970,063		112,233,406
		149,389,507		155,696,284

| F-12 |

| --- |

| **BASANITE, INC. AND SUBSIDIARIES**<br><br>**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**<br><br>**FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020**<br><br>**** |

| --- |

(J) Stock-Based Compensation

The Company recognizes compensation costs to employees under 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 issues various equities as compensation to consultants, employees, directors, and investors. The Company issued 2,419,546 restricted common shares, 21,025,000 restricted common stock warrants, and 1,277,778 common stock options as compensation with a total fair value of $5,137,261 for the year ended December 31, 2021. The Company issued 600,000 restricted common shares, no restricted common stock warrants, and no common stock options as compensation with a total fair value of $174,000 for the year ended December 31, 2020. As of December 31, 2021 and 2020, $102,559 and $8,410, 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, 2021 and 2020, total equity-based compensation expense amounted to $5,043,112 and $165,590.

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, 2021 and 2020:

Schedule of Fair Value Assumptions
	2021			2020
Expected price volatility		144.79-148.70	%		—
Risk-free interest rate		0.78-1.26			—
Expected life in years		5			—
Dividend yield		—			—

(K) Income Taxes

The Company has not recorded any income tax expense or benefit for the years ended December 31, 2021 and 2020 due to its history of net operating losses. The provision for income taxes was calculated as a result of the following (in thousands):

Schedule of Provision of Income Taxes
	December 31,
	2021			2020
Federal tax at statutory rate	$	(3,460	)	$	(743	)
State taxes, net of federal income tax benefit		—			—
Change of valuation allowance		1,333			731
Non-deductible loss on debt		1,416			—
True-ups		(84	)		—
Non-deductible expenses and other		795			12
Provision for income tax	$	—		$	—

| F-13 |

| --- |

| **BASANITE, INC. AND SUBSIDIARIES**<br><br>**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**<br><br>**FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020**<br><br>**** |

| --- |

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
	December 31,
	2021			2020
Deferred tax assets:
Net operating loss carryforwards	$	5,913		$	4,413
Accruals and allowances		13			34
ROU liability amortization		202
Stock-based compensation		1,344			1,070
Total deferred tax assets		7,472			5,517
Valuation allowance		(7,472	)		(5,517	)
Total deferred tax assets net of valuation allowance		—			—
Deferred tax liabilities:
ROU asset amortization		184
Depreciation		(101	)		(180	)
Total deferred tax liabilities		(285	)		(180	)
Valuation allowance		285			180
Total deferred tax liabilities net of valuation allowance		—			—
Net deferred tax assets	$	—		$	—

The items accounting for the difference between income taxes computed at the U.S. federal statutory rate and our effective rate were as follows:

Schedule of difference between income taxes
Federal tax at statutory rate	(3,460	)	21.00	%
State taxes, net	—		0.00	%
Non-deductible loss on debt	1,416		-8.60	%
Other permanent differences	795		-4.82	%
True-ups	(84	)	0.51	%
Change in Federal valuation allowance	1,333		-8.09	%
Total tax expenses	—		0.00	%

As of December 31, 2021,

the Company has a valuation allowance of approximately $7.1 million related to federal net operating loss (“NOL”) carryforwards of approximately $25.8 million. The amount of the valuation allowance represented an increase of approximately $1.0 million over the amount recorded as of December 31, 2020 and was due to the increase in net operating losses. If not utilized, federal net operating losses of $12.8 million may be carried forward indefinitely, and $13 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, 2021.

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-14 |

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| **BASANITE, INC. AND SUBSIDIARIES**<br><br>**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**<br><br>**FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020**<br><br>**** |

| --- |

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. If the Company does elect to exercise its option to extend the lease for another five years, that election will be treated as a lease modification and the lease will be reviewed for remeasurement.

The future minimum lease payments to be made under the operating lease as of December 31, 2021 are:

Schedule of Operating Lease Liability
2022	$	427,484
2023		440,308
2024		110,884
Total minimum lease payments		978,676
Discount		(153,791	)
Operating lease liability	$	824,885

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, 2021, the weighted-average remaining lease term is 2.25 years and the weighted-average discount rate used to determine the operating lease liability was 15.0%. For the years ended December 31, 2021 and 2020, the Company expensed $428,270 and $429,022, respectively, for rent.

| F-15 |

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| **BASANITE, INC. AND SUBSIDIARIES**<br><br>**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**<br><br>**FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020**<br><br>**** |

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NOTE 5 – NOTES PAYABLE – CONVERTIBLE

Notes

payable – convertible totaled $0 and $10,000 at December 31, 2021 and December 31, 2020, respectively.

On October 22, 2015, the Company

issued an unsecured promissory note in the principal amount of $300,000 to PDQ Auctions, LLC. The note bears interest at an annual rate of 7% and was originally payable on or before October 22, 2017 (subsequently extended until May 2021), unless the note was converted or prepaid prior to the maturity date. Subject to certain limitations, the note may be converted at any time, at the option of the holder, into shares of the Company’s common stock at a conversion price of $0.35 per share, subject to adjustment. In the event the Company issues any new or additional promissory notes that pay an interest rate that exceeds 7% per annum (subsequently increased to 10% and then to 15%), then the holder shall be entitled to request an increase in the interest rate payable on the note to an amount equal to the rate being paid on the new or additional notes. The conversion of the note may be limited if, upon conversion, the holder thereof would beneficially own more than 4.9% of the Company’s common stock. The note may be prepaid at the option of the Company commencing 190 days after the issuance of the note. On May 2, 2018, the Company secured a three-year extension of the convertible note in return for (1) a $5,000 per month payment applicable to current interest and principal beginning on April 22, 2018, and (2) the issuance of 274,575 new, restricted common shares. The shares were issued on June 13, 2018. On August 3, 2020, the Company negotiated with the noteholder to agree to convert the remaining principal balance of $258,524 and accrued interest of $102,176, at a conversion price of $0.175 per share, for 2,061,143 restricted common shares. The conversion resulted in a loss on extinguishment of debt in the amount of $121,607.

On October 10, 2019, the Company entered into a Securities Purchase Agreement with Labrys Fund, LP (the investor) pursuant to which the investor purchased a 15% Convertible Promissory Note from the Company. Unless there is a specific event of default or the note remains unpaid by April 16, 2020 (the maturity date), then the investor shall have the ability to convert the principal and interest under the note into shares of the Company's common stock. If the note is not repaid prior to the maturity date, the per share conversion price into which the principal amount and interest under the note may be converted is equal to the lesser of (i) 60% multiplied by the lowest trade price of the common stock during the 25 consecutive trading days ending on the latest complete trading day prior to the date of issuance of the note, and (ii) 60% multiplied by the lowest market price of the common stock during the 25 trading day period ending on the latest complete trading day prior to the conversion date. Pursuant to the Securities Purchase Agreement, the Company agreed to issue and sell to the investor the note, in the principal amount of $338,000. The Company received net proceeds from the note of $300,000 after an original issue discount of $33,800 and a reduction for investor’s legal counsel fees of $4,200. Additionally, the Company issued 1,300,000 shares of common stock to the investor as a commitment fee (the returnable shares) which was valued at $0.10 per share and recorded as an offset to the principal amount. The returnable shares must be returned to the Company in the event the note is fully paid and satisfied prior to the maturity date. On April 13, 2020, the Company repaid its remaining obligation under the Securities Purchase Agreement and related 15% Convertible Promissory Note with Labrys Fund, LP. The Company paid $262,389 in full satisfaction of the note. This amount included $24,389 accrued interest. On April 16, 2020, the investor returned the originally issued 1,300,000 shares of common stock that was issued as a commitment fee. Additionally, the transfer agent released the reserve of 21,666,666 shares of common stock in the name of the Investor for issuance upon conversion.

On

March 5, 2020, the Company issued a convertible promissory note to an accredited investor in exchange for $50,000 bearing an interest rate of 10

%

per annum and payable in nine months. After June 5, 2020, the holder may convert the unpaid principal and interest balance of the note into shares of common stock, par value $0.001 per share, at the conversion rate equal to 80% of the closing price on June 5, 2020 per share. At the time of conversion, the Company shall immediately also issue a five-year warrant to the holder to purchase an amount of warrants equal to the $50,000

divided

by the conversion price of shares of common stock of the Company. The exercise price for such warrants shall be 3 times the conversion price. In addition, the warrants shall have an option whereby the Company can require the exercise of the warrants if the trading price is at or above the warrant price times 190% for 20 consecutive trading days. The conversion price was determined to be $0.132

.

A debt discount of $50,000

was

recorded on the note payable at resolution of the contingent beneficial conversion feature. The noteholder converted the promissory note of $50,000

and

accrued interest of $1,908

on

July 21, 2020 in exchange for 393,246

restricted

common shares and 126,263

five-year warrants with an exercise price of $0.396 per share.

| F-16 |

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| **BASANITE, INC. AND SUBSIDIARIES**<br><br>**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**<br><br>**FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020**<br><br>**** |

| --- |

On

April 13, 2020, the Company entered into several convertible promissory notes. The Company issued convertible notes payable in exchange for $100,000 bearing an interest rate of 12

%

per annum and payable in six months. At the option of the holders, the principal and accrued interest may be converted to shares of common stock at a conversion rate of $0.092

per

share. At the time of conversion, the Company shall immediately also issue an equal amount of five-year warrants to purchase common stock of the Company, at an exercise price of $0.312

per

share. The warrants shall have an option whereby the Company can require the exercise of the warrants if the trading price is at or above $0.69

per

share for 20 consecutive trading days. Upon issuance of the notes, the Company recorded debt discounts of $100,000

for

the beneficial conversion features embedded in the notes. One of the noteholders converted their promissory note of $50,000

and

accrued interest of $1,181

on

June 26, 2020 in exchange for 556,313

restricted

common shares and 556,313 five

-year

warrants with an exercise price of $0.312

per

share. The remaining noteholders converted their promissory notes of $25,000

and

accrued interest of $1,618

each

on July 21, 2020. Each received in exchange for their notes 280,532

restricted

common shares and 280,532 five

-year

warrants with an exercise price of $0.312 per share.

On April 13, 2020, the Company issued a convertible promissory note to an accredited investor in exchange for $50,000 bearing an interest rate of 12% per annum and payable in six months. After June 5, 2020, the holder may convert the unpaid principal and interest balance of the note into shares of common stock, par value $0.001 per share, at the conversion rate equal to 80% of the closing price on June 5, 2020 per share. At the time of conversion, the Company shall immediately also issue a five-year warrant to the holder to purchase the same number of shares of common stock of the Company as the holder receives in such conversion. The exercise price for such warrants shall be 3 times the conversion price. In addition, the warrants shall have an option whereby the Company can require the exercise of the warrants if the trading price is at or above the warrant price plus 150% for 20 consecutive trading days. The conversion price was determined to be $0.132. A debt discount of $50,000 was recorded on the note payable at resolution of the contingent beneficial conversion feature. The noteholder converted the promissory note of $50,000 and accrued interest of $1,615 on July 21, 2020 in exchange for 391,023 restricted common shares and 391,023 five-year warrants with an exercise price of $0.396 per share.

On May 27, 2020, the Company issued a convertible promissory note with an accredited investor in exchange for $60,000 bearing an interest rate of 12% per annum and payable in six months. At the option of holder, the principal may be converted to shares of common stock at a conversion rate of $0.11 per share. At the time of conversion, the Company shall immediately also issue an equal amount of five-year warrants to purchase common stock of the Company, at an exercise price of $0.33 per share. The warrants shall have an option whereby the Company can require the exercise of the warrants if the trading price is at or above $0.825 per share for 20 consecutive trading days. Upon issuance of the note, the Company recorded a debt discount of $60,000 for the beneficial conversion features embedded in the note. The noteholder converted the promissory note on June 26, 2020 in exchange for 545,455 restricted common shares and 545,455 five-year warrants with an exercise price of $0.33 per share. Accrued interest of $552 was forgiven and reported as a gain on extinguishment of debt.

On May 29, 2020, the Company issued a convertible promissory note with an accredited investor in exchange for $50,000 bearing an interest rate of 12% per annum and payable in six months. At the option of holder, the principal may be converted to shares of common stock at a conversion rate of $0.108 per share. At the time of conversion, the Company shall immediately also issue an equal amount of five-year warrants to purchase common stock of the Company, at an exercise price of $0.324 per share. The warrants shall have an option whereby the Company can require the exercise of the warrants if the trading price is at or above $0.81 per share for 20 consecutive trading days. Upon issuance of the note, the Company recorded a debt discount of $50,000 for the beneficial conversion features embedded in the note. The noteholder converted the promissory note of $50,000 on June 26, 2020 in exchange for 462,963 restricted common shares and 462,963 five-year warrants with an exercise price of $0.324 per share. Accrued interest of $427 was forgiven and reported as a gain on extinguishment of debt.

| F-17 |

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| **BASANITE, INC. AND SUBSIDIARIES**<br><br>**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**<br><br>**FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020**<br><br>**** |

| --- |

On June 1, 2020, the Company issued two convertible promissory notes with accredited investors in exchange for $100,000 bearing an interest rate of 12% per annum and payable in six months. At the option of holder, the principal may be converted to shares of common stock at a conversion rate of $0.096 per share. At the time of conversion, the Company shall immediately also issue an equal amount of five-year warrants to purchase common stock of the Company, at an exercise price of $0.288 per share. The warrants shall have an option whereby the Company can require the exercise of the warrants if the trading price is at or above $0.72 per share for 20 consecutive trading days. Upon maturity, the Company shall have the option to convert the unpaid principal balance of the note under the same terms as above. Upon issuance of the notes, the Company recorded debt discounts of $100,000 for the beneficial conversion features embedded in the notes. The noteholders converted the promissory notes of $100,000 on December 1, 2020 in exchange for 520,834 restricted common shares and 520,834 five-year warrants with an exercise price of $0.288 per share each. Accrued interest of $5,986 was forgiven pursuant to the conversion terms of the notes.

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 $161 and $64,093 for the years ended December 31, 2021 and December 31, 2020, respectively. Accrued interest for the Company’s convertible notes payable at December 31, 2021 and December 31, 2020 was $0 and $760, respectively, and is included in accrued expenses on the consolidated balance sheets.

NOTE 6 – NOTES PAYABLE – CONVERTIBLE – RELATED

PARTY

Notes payable – convertible

– related party totaled $1,689,745 and $1,025,000 at December 31, 2021 and December 31, 2020, respectively.

On April 13, 2020, the demand notes payable entered on January 16, 2020 for $50,000 each from related parties; Michael V. Barbera, our Board Chairman and an entity managed by Ronald J. LoRicco, Sr., a Board Member were exchanged for convertible notes. The notes were accounted for as an extinguishment and the convertible debt valued at fair value in accordance with ASC 470. Per the addendums, the interest rate of 10% was increased to 12% per annum. The modification also allowed for a conversion option for the holder after June 5, 2020. After June 5, 2020, the holder may convert the unpaid principal and interest balance of the note into shares of common stock, par value $0.001 per share, at the conversion rate equal to 80% of the closing price on June 5, 2020 per share. At the time of conversion, the Company shall immediately also issue a five-year warrant to the holder to purchase the same number of shares of common stock of the Company as the holder receives in such conversion. The exercise price for such warrants shall be 3 times the conversion price. In addition, the warrants shall have an option whereby the Company can require the exercise of the warrants if the trading price is at or above the warrant price plus 150% for 20 consecutive trading days. The conversion price was determined to be $0.132. Debt discounts of $100,000 were recorded on the notes payable at resolution of the contingent beneficial conversion feature. One noteholder converted the promissory note of $50,000 and accrued interest of $2,440 on June 26, 2020 in exchange for 397,269 restricted common shares and 397,269 five-year warrants with an exercise price of $0.396 per share. The other noteholder converted the promissory note of $50,000 and accrued interest of $2,826 on July 21, 2020 in exchange for 400,195 restricted common shares and 400,195 five-year warrants with an exercise price of $0.396 per share.

| F-18 |

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| **BASANITE, INC. AND SUBSIDIARIES**<br><br>**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**<br><br>**FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020**<br><br>**** |

| --- |

On April 13, 2020, the Company issued a convertible promissory note with Michael V. Barbera, our Board Chairman, in exchange for $25,000 bearing an interest rate of 12% per annum and payable in six months. After June 5, 2020, the holder may convert the unpaid principal and interest balance of the note into shares of common stock, par value $0.001 per share, at the conversion rate equal to 80% of the closing price on June 5, 2020 per share. At the time of conversion, the Company shall immediately also issue a five-year warrant to the holder to purchase the same number of shares of common stock of the Company as the holder receives in such conversion. The exercise price for such warrants shall be 3 times the conversion price. In addition, the warrants shall have an option whereby the Company can require the exercise of the warrants if the trading price is at or above the warrant price plus 150% for 20 consecutive trading days. The conversion price was determined to be $0.132. A debt discount of $25,000 was recorded on the note payable at resolution of the contingent beneficial conversion feature. The noteholder converted the promissory note of $25,000 and accrued interest of $809 on July 21, 2020 in exchange for 195,522 restricted common shares and 195,522 five-year warrants with an exercise price of $0.396 per share.

On April 13, 2020, the Company issued a convertible promissory note with an entity managed by Ronald J. LoRicco, Sr., a member of our Board of Directors, in exchange for $150,000 bearing an interest rate of 12% per annum and payable in six months. After June 5, 2020, the holder may convert the unpaid principal and interest balance of the note into shares of common stock, par value $0.001 per share, at the conversion rate equal to 80% of the closing price on June 5, 2020 per share. At the time of conversion, the Company shall immediately also issue a five-year warrant to the holder to purchase the same number of shares of common stock of the Company as the holder receives in such conversion. The exercise price for such warrants shall be 3 times the conversion price. In addition, the warrants shall have an option whereby the Company can require the exercise of the warrants if the trading price is at or above the warrant price plus 150% for 20 consecutive trading days. The conversion price was determined to be $0.132. A debt discount of $150,000 was recorded on the note payable at resolution of the contingent beneficial conversion feature. The noteholder converted the promissory note of $150,000 and accrued interest of $3,542 on June 26, 2020 in exchange for 1,163,201 restricted common shares and 1,163,201 five-year warrants with an exercise price of $0.396 per share.

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.

| F-19 |

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| **BASANITE, INC. AND SUBSIDIARIES**<br><br>**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**<br><br>**FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020**<br><br>**** |

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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

Interest expense for the Company’s

convertible notes payable – related parties was $332,495 and $93,736 for the years ended December 31, 2021 and December 31, 2020, respectively. Accrued interest for the Company’s convertible notes payable – related parties at December 31, 2021 and December 31, 2020 was $227,022 and $86,574, respectively, and is included in accrued expenses on the consolidated balance sheets.

NOTE 7 – NOTES PAYABLE

Notes payable totaled $466,762

and $128,071 at December 31, 2021 and December 31, 2020, 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 September 3, 2019, the Company entered a financing arrangement with their landlord to borrow against their rent payments. The financing has an interest rate of 7% and lasted through May of 2020. The balance as of December 31, 2020 was $0.

On March 31, 2021 and March

30, 2020, 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 2022. The balance as of December 31, 2021 and 2020 was $6,015 and $4,703, 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 has not made any payments to date. The balance as of December 31, 2021 and 2020 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 April 2, 2022. 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 April 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.

| F-20 |

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| **BASANITE, INC. AND SUBSIDIARIES**<br><br>**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**<br><br>**FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020**<br><br>**** |

| --- |

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 April 16, 2022. The company also issued 250,000 common stock warrants at an exercise price of $0.25 per share expiring in 5 years.

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 April 16, 2022. The company also issued 200,000 common stock warrants at an exercise price of $0.25 per share expiring in 5 years.

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 $44,600 and $5,041 for the years ended December 31, 2021 and 2020, respectively. Accrued interest for the Company’s notes payable at December 31, 2021 and December 31, 2020 was $42,773 and $0, respectively, and is included in accrued expenses on the consolidated balance sheets.

NOTE 8 – NOTES PAYABLE – RELATED

PARTY

Notes payable – related

party totaled $300,000 and $0 at December 31, 2021 and December 31, 2020, 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 April 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. 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 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 April 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. 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 July 7, 2021, the Company issued a promissory note with an entity managed by Ronald J. LoRicco, Sr., a member of our Board of Directors, in exchange for $50,000 bearing an interest rate of 10% per annum. The maturity date for the promissory note is July 23, 2021. The note payable was paid in full on August 24, 2021.

On July 7, 2021, the Company issued a promissory note with Michael V. Barbera, our Chairman of the Board, in exchange for $50,000 bearing an interest rate of 10% per annum. The maturity date for the promissory note is July 23, 2021. The note payable was paid in full on August 24, 2021.

On July 15, 2021, the Company issued a promissory note with David Anderson, our former Chief Operating Officer, in exchange for $20,000 bearing an interest rate of 10% per annum. The maturity date for the promissory note is July 23, 2021. The note payable was paid in full on August 18, 2021.

| F-21 |

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| **BASANITE, INC. AND SUBSIDIARIES**<br><br>**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**<br><br>**FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020**<br><br>**** |

| --- |

On July 26, 2021, the Company issued a promissory note with David Anderson, our former Chief Operating Officer, in exchange for $30,500 bearing an interest rate of 10% per annum. The maturity date of the promissory note is August 2, 2021. The note payable was paid in full on August 18, 2021.

On July 27, 2021, the Company issued a promissory note with Simon Kay, our Interim Acting Chief Executive Officer and Principal Financial Officer, in exchange for $10,000 bearing an interest rate of 10% per annum. The maturity date of the promissory note is August 3, 2021. The note payable was paid in full on August 18, 2021.

On August 6, 2021, the Company issued a promissory note with an entity managed by Ronald J. LoRicco, Sr., a member of our Board of Directors, in exchange for $100,000 bearing an interest rate of 10% per annum. The maturity date for the promissory note is August 24, 2021. The note payable was paid in full on August 24, 2021.

Interest expense for the Company’s

notes payable – related party was $44,985 and $5,041 for the years ended December 31, 2021 and 2020, respectively. Accrued interest for the Company’s notes payable at December 31, 2021 and December 31, 2020 was $42,614 and $0, 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

of Basanite common stock. The Company has accrued a liability in the amount of $165,000 in connection with this matter. Subsequent to year end, the Company and the individual signed an agreement for settlement.

Legal Matters

In the ordinary course of operations, the Company may become a party to legal proceedings. Based upon information currently available, management believes that such legal proceedings, individually or in the aggregate, will not have a material adverse effect on the Company's business, financial condition, cash flows, or results of operations except as provided below.

CalSTRS Judgement

On March 31, 2014, the Company

received a “Notice of Default” letter from legal counsel representing the California State Teachers Retirement System (“CalSTRS”) (the landlord for the Company’s office space) alerting that the Company was in default of its lease for failure to pay monthly rent for the office space located at 2400 East Commercial Boulevard, Suite 612, Fort Lauderdale, FL 33304. The letter demanded immediate payment of $41,937 for rent past due as of April 1, 2014. The Company had indicated in writing its intention to cooperate with the landlord while trying to resolve the matter. On February 11, 2015, the landlord, through its attorneys, filed a motion for summary judgment. The motion asked for $376,424 in unpaid rent, recovery of abated rents and tenant improvements and $12,442 in attorney’s costs incurred by the landlord. On April 22, 2015, the motion for unpaid rent, recovery of abated rents and tenant improvements and attorney’s costs was granted by the Circuit Court of the 17th Judicial Circuit in and for Broward County and the Company has reserved the entire judgement of $388,866. The total amount is accruing interest at the statutory rate of 4.75%. On August 24, 2021, the Company paid the amount of $400,000 representing satisfaction of the judgment amount of $388,866 and accrued interest in the amount of $117,203, and recorded a gain on settlement of judgment in the amount of $106,069.

| F-22 |

| --- |

| **BASANITE, INC. AND SUBSIDIARIES**<br><br>**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**<br><br>**FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020**<br><br>**** |

| --- |

RAW Materials Litigation

On or about August 28, 2018, Raw Energy Materials Corp. filed an action for declaratory relief and breach of contract in Broward County, Florida, in the 17^th^ Judicial Circuit Court, titled Raw Energy Materials Corp. v. Rockstar Acquisitions, LLC, Paymeon, Inc. (now Basanite, Inc.), and Basalt America, LLC, CASE NO.: CACE 18-020596. An Amended Complaint was filed on or about December 19, 2018 adding Basanite Industries, LLC as a defendant, as well as an alleged claim under Florida Statute Section 501.201 and for injunction. The Company filed and has pending an amended counterclaim for breach of contract, fraud and civil conspiracy against Raw Energy affiliates, including Don Smith, Elina Jenkins, Global Energy Sciences, LLC, Yellow Turtle Design, LLC, as well as former business affiliates/associates to Don Smith, Richard Laurin and Robert Ludwig. The nature of the dispute is based on representations (or misrepresentations) the Company alleges were made to it, as well as breaches of the terms of a licensing agreement, related consulting and other agreements, and failures and refusals of plaintiff and Don Smith related entities to deliver equipment/machinery and goods paid for by the Company or its affiliates. As it became apparent that the subject license agreement was effectively worthless and moot to the Company, and the purported and promised trade secrets and intellectual property were essentially non-existent, the Company and Plaintiff agree to an order terminating that license agreement, which resulted in the agreed order dated January 28, 2019.

A mediation was scheduled on March 4, 2021 which resulted in an impasse. Negotiations were continued, and on April 14, 2021, Basanite, Inc. entered into a settlement and release agreement with RAW, LLC (“RAW”), Donald R. Smith, YellowTurtle Design LLC (“YellowTurtle”) and Elina B. Jenkins among others. The settlement agreement provides for, among other things, the following: (i) a dismissal of the legal action as to the above-referenced parties and their owners, agents, affiliated companies, successors and assigns, having Case Number 18-020596 (21) in the Seventeenth Judicial Circuit Court in and for Broward County, Florida (the “Litigation”) upon the Company’s timely purchase of the shares as set forth in the next paragraph below and (ii) mutual general releases for the above-referenced parties relating to the Litigation upon the Company’s timely purchase of the shares as set forth in the next paragraph below.

Simultaneously with the execution

of the settlement agreement settling the litigation in full and release of all claims among the parties, the Company entered into stock purchase agreements with both RAW and YellowTurtle to repurchase the 10,000,000 shares of the Company’s common stock held by RAW for $1,212,121 and the 6,500,000 shares of the Company’s common stock held by YellowTurtle for $787,879, or an aggregate purchase price of $2,000,000. On May 17, 2021, the settlement shares were purchased by a group of related and non-related investors which resulted in the closing of this legal action.

Lustig Litigation

In reviewing court records recently in late 2020, counsel for the Company found names of its affiliates in a case filed in 2018 by Stephen Lustig against one of the Company's shareholders. The Company and its affiliates were not served or made a party to that case; and were listed as an attempt by Mr. Lustig to execute, attach or foreclosure on the defendant shareholder's stock in the Company. The Company did not breach any agreement and was not engaged in any wrongdoing. The Company was informed that the subject shareholder had made contact with Mr. Lustig and obtained a resolution between them; a voluntary dismissal was filed on January 4, 2021.

To our knowledge, we are not currently subject to any other legal proceedings.

Supplier Agreement

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.

| F-23 |

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| **BASANITE, INC. AND SUBSIDIARIES**<br><br>**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**<br><br>**FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020**<br><br>**** |

| --- |

MEP Consulting Engineers, Inc.

On July 23, 2020, the Company entered into an Exclusive Supplier Agreement with MEP Consulting Engineers, Inc. (“MEP”) of Miami, Florida. MEP engaged the Company as its sole and exclusive supplier and producer of basalt fiber reinforced polymer (“BFRP”) rebar, with the intent of developing a proprietary rebar to be named “Hurricane Bar.” The agreement also provides MEP with exclusive distribution rights to the Company’s BasaFlex™ BFRP rebar and other Company products in Miami-Dade County.

Pursuant to this agreement,

MEP was provided the ability to exercise options to purchase a total of 5,000,000 restricted common shares of the Company, over the 5 years from the supplier agreement effective date, tied to sales performance. This option shall automatically expire after the end of the option period. An extension period is available through specific clauses in the agreement.

The Company generated $31,141 in

revenue for custom rebar products delivered under this contract for the year ended December 31, 2021.

CR Business Consultants, Inc.

On October 22, 2020, the Company entered into an Exclusive Supplier Agreement with CR Business Consultants, Inc. (“CRBC”). CRBC 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 the Republic of Costa Rica and the Republic of Panama. Furthermore, CRBC has key relationships that could be a source of additional customers for the Company in other territories with no geographic restrictions.

The

agreement is targeting multiple large projects in Costa Rica, to include the rebuilding of the Port of Limon, which Basanite has been specified. Pursuant to this agreement, CRBC was provided the ability to exercise options to purchase a total of 5,000,000 restricted common shares of the Company, over the 5 years from the supplier agreement effective date, tied to sales performance. This option shall automatically expire after the end of the option period. An extension period is available through specific clauses in the agreement. The Company has not generated revenue under this contract for the year ended December 31, 2021 or 2020.

NOTE 10 – STOCKHOLDERS’ DEFICIT

On April 16, 2020, an investor

returned 1,300,000 shares of common stock previously issued as a loan commitment fee. See Note 5 for further information regarding the note payable.

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 charge to additional paid in capital. The Company also accrued the amount of $53,345 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, 2021, the Company issued a total 20,583,813 restricted common shares in exchange for $5,034,079 in net cash proceeds. During the year ended December 31, 2020, the Company issued a total 8,385,289 restricted common shares in exchange for $1,142,992 in net cash proceeds.

| F-24 |

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| **BASANITE, INC. AND SUBSIDIARIES**<br><br>**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**<br><br>**FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020**<br><br>**** |

| --- |

NOTE 11 – OPTIONS AND WARRANTS

Stock Options:

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

Schedule of Activity in Options and Warrants
	Total Options Outstanding			Weighted Average Exercise Price			Aggregate Intrinsic Value
Balance at January 1, 2020		5,042,500		$	0.40		$	—
Cancelled		(500,000	)		(0.25	)
Balance at December 31, 2020		4,542,500		$	0.41		$	—
Issued		1,277,778			0.27
Cancelled		(1,592,500	)		0.53
Balance at December 31, 2021		4,227,778		$	0.33		$	19,500

Options exercisable and outstanding at December 31, 2021 are as follows:

Schedule of Options and Warrants Exercisable and Outstanding
		Weighted Average
Range of		Remaining	Weighted Average	Aggregate
Exercise Prices	Number Outstanding	Contractual Life (Years)	Exercise Price	Intrinsic Value
$0.01 - $0.50	3,227,778	2.20	$0.26	$19,500
$0.51 - $1.00	1,000,000	0.25	$0.55	—
	4,227,778			$19,500

Stock Warrants:

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

Schedule of Activity in Options and Warrants
	Total Warrants			Weighted Average Exercise Price		Aggregate Intrinsic Value
Balance at January 1, 2020		29,849,761		$	0.23	$	1,956,750
Granted		17,180,957			0.31
Exercised		(7,110,340	)		0.09
Cancelled		(1,000,000	)		0.40
Balance at December 31, 2020		38,920,378		$	0.27	$	2,973,660
Granted		100,271,288			0.29
Exercised		(1,000,000	)		0.12
Balance at December 31, 2021		138,191,666		$	0.29	$	3,824,750

Warrants exercisable and outstanding at December 31, 2021 are as follows:

Schedule of Options and Warrants Exercisable and Outstanding
		Weighted Average
Range of		Remaining	Weighted Average	Aggregate
Exercise Prices	Number Outstanding	Contractual Life (Years)	Exercise Price	Intrinsic Value
$0.01 - $0.50	135,701,123	4.01	$0.28	$3,824,750
$0.51 - $1.00	2,490,543	1.10	$0.60	—
	138,191,666			$3,824,750

| F-25 |

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| **BASANITE, INC. AND SUBSIDIARIES**<br><br>**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**<br><br>**FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020**<br><br>**** |

| --- |

During the year ended December 31, 2020, the Company offered current warrant holders an exercise price discount of 50%. The inducement resulted in the exercise of 6,610,340 common stock warrants in exchange for $636,734 in cash. The exercise of the warrants at a discount resulted in a deemed dividend of $663,501.

On

February 12, 2021, the Company issued 15,000,000 five year common stock warrants with an exercise price of $0.20 per share and a grant date fair value of $3,686,136 to noteholders pursuant to a debt extinguishment and restructure agreement. On May 12, 2021, the Company issued an additional 7,500,000 five year common stock warrants with an exercise price of $0.35 per share and a grant date fair value of $1,874,705 to the noteholders for an extension of the debt. The total grant date fair value of the warrants of $5,560,828 was recorded as a loss on extinguishment of debt during the year ended December 31, 2021. See note 6.

On August 17, 2021, the Company conducted a private placement 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. A total of 38,796,288 warrants were issued pursuant to the private placement. See note 10.

On December 10, 2021, the Company issued a warrant to purchase 40,000,000 shares of Common Stock (20,000,000 shares of which had not vested as of December 31, 2021) with an exercise price of $0.33 per share and a grant date fair value of $3,907,973 to a USS, a related party product distributor. See note 9.

NOTE 12 –

SUBSEQUENT EVENTS

Simon R. Kay Services Agreement

On January 20, 2022, the Company entered into a Transition Services Agreement with Simon R. Kay, the Acting Interim Chief Executive Officer and Chief Financial Officer of the Company. Mr. Kay had been serving as the Company’s Acting Interim Chief Executive Officer, President and Chief Financial Officer in a consultant capacity since January 13, 2020 pursuant to a Consulting Agreement between the Company and Mr. Kay. Mr. Kay and the Company have agreed to terminate the Consulting Agreement as of the effective date of the TSA, except for those provisions of the Consulting Agreement which survive termination or are incorporated into the TSA.

On March 25, 2022, the Board appointed Mr. Kay as the Company’s Chief Executive Officer and President. Additionally, until the Company hires a full time Chief Financial Officer, Kay will serve as Acting Interim Chief Financial Officer of the Company. The terms of Kay’s employment with the Company and his job description are provided for in an Employment Agreement, dated March 25, 2022 between the Company and Kay.

Private PlacementOffering

On January 28, 2022 and February 3, 2022, the Company 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 the Company’s common stock, par value $0.001 per share, (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. The Company will report the results of the private placement offering with a Form 8-K filing when the transactions have closed.

| F-26 |

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| **BASANITE, INC. AND SUBSIDIARIES**<br><br>**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**<br><br>**FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020**<br><br>**** |

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David L. Anderson Resignation

On February 20, 2022, David L. Anderson (“Anderson”), the Executive Vice President and Chief Operating Officer of the Company, provided written notice to the Board of Directors of the Company of his resignation from the Company. Anderson’s notice contained a purported claim for a separation payment from the Company on account of “Good Reason” under Section 8(a) of Anderson’s employment agreement with the Company, dated February 1, 2019 (as amended, the “Employment Agreement”).

On February 24, 2022, the Company provided written notice to Anderson that his resignation of employment with the Company was accepted, effective immediately. As such, Anderson is no longer affiliated with the Company as of February 24, 2022. In its notice to Anderson, the Company denied any assertions by Anderson of “Good Reason” to resign his employment and any claim for alleged payments due to Anderson under the Employment Agreement.

Common Stock Issued

On

March 14, 2022, the Company issued 500,000 shares of Common Stock pursuant to an exercises of options at a price of $0.25 per share for cash proceeds of $125,000 by Ronald J. LoRicco, Sr., a Director.

On

March 24, 2022, the Company issued to a service provider 300,000 shares of Common Stock with a contract price of $0.33 per share. These shares had a grant date fair value for accounting purposes of $0.1025 per share.

F-27

Exhibit 10.11

Redactions with respect to certain portions hereof denoted with “* * *” as such information is both not material and the type of information that the registrant treats as private or confidential.

DISTRIBUTION AGREEMENT

THIS DISTRIBUTION AGREEMENT (hereinafter the "Agreement") is made and entered into as of the 10th day of December 2021 (hereinafter the “Effective Date”), by and between U.S. SUPPLIES, INC., a Florida corporation, having its principal place of business at 1305 Hill Avenue, West Palm Beach, Florida 33407 (hereinafter the "USS") and BASANITE INDUSTRIES LLC, a Delaware limited liability company, having its principal place of business at 2041 NW 15th Avenue, Pompano Beach, FL 33069 (hereinafter the "BASANITE"). Both USS and BASANITE shall be referred to together as “Parties” and individually as “Party”.

RECITALS

WHEREAS, BASANITE is in the business of providing Manufacturing Services and selling concrete-reinforcing products for the construction industry, made from basalt fiber and basalt fiber reinforced polymers (hereinafter “BFRP”), and which are based on proprietary BASANITE technology, including BasaFlex^TM^ reinforcing bar (hereinafter “rebar”);

WHEREAS, USS is in the business of distributing construction materials and USS has knowledge and expertise in locating prospective buyers of materials for construction projects (“Projects”);

WHEREAS, BASANITE desires to appoint USS as its exclusive distributor of BASANITE Products in the Territory, and further as a non-exclusive distributor of BASANITE Products to Permitted Customers worldwide;

WHEREAS, USS desires such appointment, subject to the terms and conditions set forth in this Agreement, including any exhibits or schedules attached hereto;

WHEREAS, USS wishes to enlist BASANITE as USS’ exclusive supplier for production of Products in accordance with the Build Schedules that are accepted by BASANITE in accordance with the terms of this Agreement;

WHEREAS, BASANITE desires such appointment, subject to the terms and conditions set forth in this Agreement, including any exhibits or schedules attached hereto;

WHEREAS, USS and BASANITE wish to formalize in a written agreement the terms and conditions under which USS shall provide such services and BASANITE such Products; and

NOW, THEREFORE, in consideration of the mutual promises and covenants set forth in this Agreement, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto agree as follows:

| 1 |

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| Redactions with respect to certain portions hereof denoted with “\* \* \*” |

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Agreementof the Parties

1	Incorporation of Recitals.

The foregoing recitals are incorporated herein by reference and made a part hereof as though set forth at length throughout this Agreement.

2	Definitions.

In addition to terms defined elsewhere in this Agreement, the capitalized terms set forth below shall have the meaning as defined below. Any capitalized terms that are used with the lower case shall have the same meaning as the capitalized terms. All representations made within the definitions shall be construed as enforceable terms and conditions under this Agreement.

2.1	"Affiliate" means<br>with respect to a Person, any other Person which directly or indirectly controls, or is controlled by, or is under common control with,<br>the specified Person or an officer, director or 10% or more shareholder of the specified Person. For purposes of the preceding sentence,<br>"control" of a Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the<br>management or policies of such Person, or direct or indirect ownership (beneficially or of record) of, or direct or indirect power to<br>vote, 10% or more of the outstanding shares of any class of capital stock of such Person (or in the case of a Person that is not a corporation,<br>50% or more of any class of equity interest). BASANITE INC., a Nevada corporation, shall be deemed as an Affiliate of BASANITE for purposes<br>of this Agreement.
2.2	“BASANITE Existing Intellectual<br>Property" means any discoveries, inventions, technical information, procedures, manufacturing or other processes, software, firmware,<br>technology, patents, trademarks, know-how or other intellectual property rights owned or developed by BASANITE outside of this Agreement<br>or owned or controlled by BASANITE prior to or after the execution of this Agreement that are used by BASANITE in creating, or are embodied<br>within, any BASANITE Product, and all improvements, modifications or enhancements to the foregoing made by USS or BASANITE or on behalf<br>of BASANITE. BASANITE’s proprietary technology, including but not limited to BasaFlex, BasaWrap^TM^, BasaMix^TM^,<br>and BasaMesh^TM^, shall be deemed to be covered in the BASANITE Existing Intellectual Property.
---	---
2.3	“BASANITE Manufacturing<br>Process" means BASANITE’s methods and processes employed to manufacture, test, configure and/or assemble Product manufactured<br>for USS pursuant to the terms of this Agreement and all improvements, modifications or enhancements to the foregoing made by of BASANITE.
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| 2 |

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| Redactions with respect to certain portions hereof denoted with “\* \* \*” |

| --- | | 2.4 | “Business Day(s)” means Monday through Friday excluding any national, legal or bank holiday in the United States of America or as established by the federal government of the United States of America. If any time period set forth in this Agreement expires upon a Saturday, Sunday or U.S. national, legal or bank holiday, such period shall be extended to and through the next succeeding Business Day. | | --- | --- | | 2.5 | “Build Schedule" or “Purchase Order” or “Order” means an Order for Products, together with an associated manufacturing schedule, provided to BASANITE by USS in writing, which specifies the Product(s) to be manufactured, including the quantity of each Product, its description, shipping instructions, name of carrier, address and phone number of carrier, address where carrier will ship or transport the Products to, requested delivery date, SOW, total amount of the order pursuant to Schedules 1-A and 1-B or any amendment to Schedules 1-A and 1-B. Each Build Schedule has to be accepted by BASANITE in writing (via an order confirmation) for it to be enforceable under this Agreement. | | --- | --- | | 2.6 | “Calendar Day(s)” means day shown on the calendar beginning at 12:00 midnight, including Saturdays, Sundays and holidays (anywhere in the world). The term “day” shall mean calendar day whether or not expressly identified. | | --- | --- | | 2.7 | “Components" means those components, parts or materials that are purchased through component suppliers designated, specified and/or approved by USS, to be incorporated into the Product. | | --- | --- | | 2.8 | “Commercially Reasonable Efforts" means * * * | | --- | --- | | 2.9 | “Custom Products” means any Products that are not identified in Schedule 1-A. Except as otherwise provided in Section 4.13, the terms of this Agreement that refer to Products shall also mean Custom Products for purposes of construction of terms that apply to the sale and purchase of Custom Products. | | --- | --- | | 2.10 | “Design Specification” means the written requirement that describes design characteristics and manufacturing methodology. | | --- | --- | | 2.11 | “EDI" shall mean electronic data interchange. | | --- | --- | | 2.12 | “Effective Date" shall mean the date upon which the terms and conditions of this Agreement shall become effective by and between the Parties. The Parties have agreed that the Effective Date of this Agreement as provided above, or if no date is entered here, the last date of signature. | | --- | --- |

| 3 |

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| Redactions with respect to certain portions hereof denoted with “\* \* \*” |

| --- | | 2.13 | “EXW" means Ex Works as per International Commercial Terms, abbreviated as INCOTERMS 2021. For international shipments as specified by USS, USS shall be responsible for the entire transport process and costs, meaning it shall be solely USS’ responsibility to arrange transportation from BASANITE’s Manufacturing Plant to final destination outside the United States of America. In such case, all the risk shall pass to USS when the Products are handed over to the first carrier at BASANITE’s Manufacturing Plant. INCOTERMS 2021 shall apply to all international shipments outside the United States of America. Except as provided herein, INCOTERMS 2021 shall govern responsibilities and obligations for transport of the Products. | | --- | --- | | 2.14 | “Fee and Price Schedule" shall mean the prices and fees set forth in Schedule l-A, as amended. | | --- | --- | | 2.15 | “F.O.B. USS Facilities,” or “FCA” shall mean BASANITE shall at its own expense and risk, transport Products from BASANITE’s Manufacturing Plant to USS’ Facilities for all Products to be delivered within the United States. Specifically, all the shipping and handling risk and ownership shall pass to USS when the Products are delivered to USS Facilities. Except as otherwise provided herein, INCOTERMS 2021 shall govern responsibilities and obligations for transport of the Products. | | --- | --- | | 2.16 | “F.O.B. Manufacturing Plant” means USS shall at its own expense and risk transport Products from BASANITE’s Manufacturing Plant to USS Facilities for Products to be delivered outside the United States. Specifically, all shipping and handling risk and ownership shall pass to USS when the Products are delivered to carrier at the Manufacturing Plant. Except as provided herein, INCOTERMS 2021 shall govern responsibilities and obligations for transport of the Products. | | --- | --- | | 2.17 | “Including" shall be defined to have the meaning "including, without limitation." | | --- | --- | | 2.18 | “In writing" shall mean written documents, EDI with phone confirmation, verified faxes and successfully transmitted e-mails. | | --- | --- | | 2.19 | "Lead-time" means the mutually agreed upon minimum amount of time in advance of shipment that BASANITE must accept a Build Schedule in order to deliver Product by the requested delivery date. | | --- | --- | | 2.20 | "Materials Declaration Requirements" means any requirements, obligations, standards, duties or responsibilities pursuant to any environmental, Product composition, eco-design, energy use, energy efficiency and/or materials declaration laws, directives, or regulations, including international laws and treaties regarding such subject matter; and any regulations, interpretive guidance or enforcement policies related to any of the foregoing. | | --- | --- | | 2.21 | “Manufacturing Plant” shall mean a commercial premise operated by BASANITE or its Affiliates where Products are being manufactured. | | --- | --- |

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| --- | | 2.22 | "Manufacturing Services" means manufacturing, configuring, assembling, packaging and/or loading of the Product, including any additional services, all in accordance with the Product Specifications. | | --- | --- | | 2.23 | "Packaging and Shipping Specifications” means the packaging and shipping specifications established by Basanite as set forth in the Build Schedule and approved by USS. | | --- | --- | | 2.24 | “Person” means any corporation, business entity, natural person, firm, joint venture, limited or general partnership, limited liability entity, limited liability partnership, trust, unincorporated organization, association, government, or any department or agency of any government. | | --- | --- | | 2.25 | “Product(s)” means all product(s) identified in Build schedule manufactured and assembled by BASANITE. | | --- | --- | | 2.26 | "Proprietary Information and Technology" means software, firmware, hardware, technology and know-how and other proprietary information or intellectual property embodied therein that is known, owned or licensed by and proprietary to either Party and not generally available to the public, including plans, analyses, trade secrets, patent rights, copyrights, trademarks, inventions, fees and pricing information, operating procedures, procedure manuals, processes, methods, computer applications, programs and designs, and any processed or collected data. The failure to label any of the foregoing as "confidential" or "proprietary" shall not mean it is not Proprietary Information and Technology. | | --- | --- | | 2.27 | “Performance Specifications” means written requirement that describes the functional performance criteria required for the Products. | | --- | --- | | 2.28 | “Related Person(s)” means all employees, officers, directors, shareholders, independent contractors, or Affiliates on behalf of a Party that provide or perform any service on behalf of a Party as to the obligations of a Party under this Agreement. | | --- | --- | | 2.29 | "Specifications" or “Product Specifications” means the technical specifications for manufacturing the Product(s) as established by BASANITE. Specifications may be amended from time to time by amendments in the form of written engineering change orders agreed to by the Parties. Specifications may include Performance Specifications and/or Design Specifications, as applicable. | | --- | --- | | 2.30 | "SOW" means the statement of work for each Product set forth in all Build Schedules. | | --- | --- | | 2.31 | "Subsidiary(ies)" means any corporation, partnership, joint venture, limited liability entity, trust, association or other business entity of which a Party or one or more of its Subsidiaries, owns or controls more than 50% of the voting power for the election of directors, managers, partners, trustees or similar Parties. | | --- | --- |

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| --- | | 2.32 | "Test Procedures" means the testing specifications, standards, procedures and parameters established by BASANITE to confirm that the manufactured Products meet the Performance Specifications. | | --- | --- | | 2.33 | “Termination Effective Date” shall mean the first date on which the Supplier Agreement is terminated in accordance with Section 10 of the Agreement. | | --- | --- | | 2.34 | “USS Customers” shall include Permitted Customers and Persons who purchase Products in the Territory from USS who may not be Permitted Customers. | | --- | --- | | 2.35 | “USS Customer Location” means location designated by USS of any Person who is USS Customer that is agreed upon by BASANITE in the Purchase Order. | | --- | --- | | 2.36 | “USS Location” shall mean USS location in the State of Florida in Palm Beach County, Florida, as designated by USS in the Purchase Order. | | --- | --- | | 2.37 | “USS Facilities” shall include USS Location and/or USS Customer Location, as applicable, and as identified in the Purchase Order. | | --- | --- | | 3 | Appointment, Acceptance &Scope | | --- | --- |

3.1	ExclusiveAppointment of Distributor, including ExclusiveRights to Sell Products in Territory, and Non-Exclusive Rights to sell Products to Permitted Customers Elsewhere.<br>Subject to the terms and conditions of this Agreement, BASANITE hereby appoints and grants USS, and USS hereby accepts appointment as<br>follows:
(a)	To be the exclusive distributor<br>for Persons located in the Territory, with exclusive rights to sell and distribute the Products to Persons within the Territory;
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(b)	To be the non-exclusive distributor<br>for Permitted Customers worldwide (i.e. outside of the Territory), with non-exclusive rights to sell or distribute Products; and
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(c)	To render other services as<br>a distributor for BASANITE as set forth herein.
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3.2

Appointment of Supplierfor Manufacturing Services. Subject to the terms and conditions of this Agreement, USS hereby appoints BASANITE, and BASANITE hereby accepts appointment, as USS’ sole and exclusive supplier for Manufacturing Services of all existing Products manufactured by Basanite and as may be requested by USS through Build Schedules. During the Term (as defined in Section 10.1, as such term maybe renewed pursuant to the terms hereof), and provided that BASANITE is not in material breach of this Agreement, USS shall not, directly or indirectly, act or agree to act as a distributor for any third party that manufactures BRFP-based construction materials of the type made or proposed to be made by BASANITE as of the Effective Date.

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| --- | | 3.3 | Territory.“Territory” shall mean the seven countries in Central America limited to Republic of El Salvador, Republic of Guatemala, Republic of Honduras, Republic of Colombia, Republic of Ecuador, Republic of Peru, and the United Mexican States. Except as providedherein, BASANITE shall have no restriction of any kind from directly conducting any business with any Persons outside of the Territory. Notwithstanding any other provision of this Agreement, any sale of Products by any Person other than USS or to any Person with whom BASANITE has a written agreement that was entered into prior to the Effective Date shall be deemed to be in compliance with the terms of this Agreement if the Products are sold in the Territory or anywhere outside the Territory. | | --- | --- | | 3.4 | Right ofFirst Refusal on Additional Prospective Territories. | | --- | --- |

(a)

Prior to entering into a contract with any other Person for exclusive rights to distribute BASANITE Products in geographic areas beyond the Territory (“Additional Prospective Territories”), BASANITE shall first offer USS the right of first refusal to become the exclusive distributor of Products in the Additional Prospective Territories, subject to USS agreeing to match any terms which have been negotiated with any other Person.

(b)

BASANITE may satisfy this obligation by sending an email to USS and shall give USS ten (10) Business Days to respond and either accept or reject such terms as proposed by BASANITE. A rejection of such terms and/or no response within the ten (10) Business Days shall be deemed as USS rejecting the Additional Prospective Territories. BASANITE may then enter into a contract with any other Person(s) to become the exclusive or the non-exclusive distributor of the Products in the Additional Prospective Territories.

3.5

Selected Segments (ApplicableOutside of the Territory). Selected Segment(s)” shall mean Person(s) engaged in commercial business as precasters, cast-in-place contractors, federal, state, county, and city governments or agencies in the United States and Canada. A Person shall not be deemedwithin a Selected Segment if both BASANITE and USS cannot agree whether a Person is within a Selected Segment.

3.6	Permitted Customers. “Permitted<br>Customer(s)” shall be Selected Customer(s) and/or Referred Customers. A Person shall not be deemed a Permitted Customer if bothBASANITE and USS cannot agree whether a Person is a Permitted Customer.

3.7

Selected Customers. “Selected Customer(s)” shall mean Person(s) within Selected Segment(s) located outside the Territory anywhere in the world with whom BASANITE or its Affiliates do not have any ongoing negotiations, or with whom BASANITE or its Affiliates do not have any written contract. A Selected Customer must be introduced directly to BASANITE by USS. USS shall be authorized to transact and sell the Products to a Selected Customer under the terms of this Agreement.

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| --- | | 3.8 | Referred Customers. “Referred Customer(s)” shall be Person(s) directly introduced to BASANITE by Selected Customer(s) who are within Selected Segment(s) located anywhere in the world with whom BASANITE or its Affiliates do not have any ongoing negotiations or with whom BASANITE or its Affiliates do not have any written contract. USS shall be authorized to transact and sell the Products to a Referred Customer under the terms of this Agreement. | | --- | --- |

3.9

Prior to solicitation to sell any Products to any Person outside of the Territory, USS shall first seek written permission through email from BASANITE. USS shall inform BASANITE in such email the identity of each Person, including the legal corporate or company name; any fictitious names; any word trademarks used by such Person; names of all its Affiliates; and the full legal name of the individual representative with whom USS wishes to engage to sell the Products (“Written Notification”). BASANITE reserves the right to seek additional details on any Person to be solicited outside of the Territory prior to consenting to such solicitation. BASANITE will discuss any customer related questions with USS and then make the determination if the Person shall be granted Permitted Customer status. All Permitted Customers who directly approach or contact BASANITE shall be directed to USS. Any Person who is outside the Territory and is not a Permitted Customer shall be deemeda customer of BASANITE for any and all purposes, and USS shall not solicit such Person or sell any Products to such Person unless authorizedin advance by BASANITE in writing.

3.10	Products. Product(s)<br>will be identified in Build Schedules and shall be manufactured and assembled by BASANITE and sold to USS<br>for distribution as provided hereunder. The list of BASANITE Products includes, but is not limited to BasaFlex^TM^, BasaLinks^TM^,<br>BasaWrap^TM^, BasaMix^TM^, and BasaMesh^TM^, plus all Components.

3.11

Sub-agents. USS may appoint sub-agents, sub-representatives or other Persons to act on USS’ behalf or to otherwise perform any of USS’ obligations under this Agreement within the Territory or to sell Products to Preferred Customers; provided that (i) any compensation to such sub-agent, sub-representative or other Person to act on USS’ behalf or to otherwise perform any of USS’ obligations shall be solely USS’ responsibility, and (ii) such appointment does not deprive BASANITE of the essential rights to which it is entitled under this Agreement. Any contract with such sub-agent, sub-representative, or other Person shall not extend beyond the Term of this Agreement and shall be in compliance with this Agreement. USS shall fully disclose to BASANITE the terms of its relationship with any sub-agent, sub-representative or other Person who is engaged to act on USS’ behalf or engaged to otherwise perform any of USS’ obligations under this Agreement and USS shall be solely responsible for the actions and any liability or damages arising out the actions of such sub-agent, sub-representative or other Person.

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| --- | | 3.12 | Relationshipof Parties. The Parties shall each be deemed as independent contractors and are not and shall not be deemed to be an employee, legal representative, dealer, general agent, joint venture, or partner of the other Party for any purpose, and neither Party hereto shall be liable for any obligations incurred by the other Party except as expressly provided herein. Each of them shall retain sole and absolute discretion in the manner and means of independently carrying out their own services as described herein. Unless otherwise required by applicable law, Parties shall not withhold (from any other Party’s compensation) any amounts for social security or federal or state income taxes. | | --- | --- |

3.13	USS acknowledges that BASANITE<br>has not granted it any authority to make changes to BASANITE’s terms and conditions of sale, grant any warranties in excess of those<br>extended by BASANITE or limit its liabilities or remedies less than BASANITE limits its liabilities and remedies, sign quotations, incur<br>obligations (expressed or implied), or in general enter into contracts on behalf of BASANITE or bind BASANITE in any transaction with<br>any other Persons in connection with the Products.
4	Orders, Price, Terms of Sale& Payment
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4.1	Communications Pursuantto this Agreement and Orders. All Build Schedules from USS shall be placed in writing and each shall be accepted or rejected by BASANITE.<br>BASANITE will reply to each proposed Build Schedule that is submitted in accordance with the terms of this Agreement by notifying USS<br>of its acceptance or rejection within three (3) Business Days of receipt. In the event of BASANITE’s rejection of a Build Schedule,<br>BASANITE’s notice of rejection will specify the basis for such rejection with option(s) for resolution. Should BASANITE fail to<br>timely accept or reject an Order from USS in accordance with this Section, such Order shall be deemed accepted and shall become binding<br>on BASANITE.
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4.2	Pricing. BASANITE<br>agrees to sell, and USS agrees to purchase, the Products in accordance with the Fee and Price Schedule then in existence, and the current<br>Fee and Price Schedule is set forth in Schedule 1-A, which may be amended from time to time by BASANITE with mutual consent from USS in<br>accordance with the terms of this Agreement. The prices of the Products and payment terms for Products ordered shall be expressly agreed<br>to in each Build Schedule. Notwithstanding any terms of this Section 4, Parties may mutually agree on any other pricing terms for the<br>Products in writing through a Purchase Order agreed to by BASANITE.
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| --- | | 4.3 | Distributor Margin. BASANITE shall establish the wholesale price and the selling retail price for the Products. BASANITE agrees to establish the retail selling price for each Product(s) at * * * above the wholesale price (the price at which the Products are sold to USS by BASANITE), allowing USS to maintain a gross margin of * * * (gross margin shall be the difference in USS’ selling price and the wholesale price paid to BASANITE by USS for purchase of each Product, excluding any costs, expenses, or deductions of any kind whatsoever). | | --- | --- | | 4.4 | PricingAdjustment. Pricing for each Product shall be adjusted quarterly by BASANITE and published in a Fee and Price Schedule, released at the beginning of each calendar quarter and all newly published Fee and Price Schedule shall amend the Schedule 1-A attached with this Agreement from time to time. Such adjustments will be based on the U.S. Producer Price Index published by the US Bureau of Labor Statistics, as provided under Schedule 1-B. Schedules 1-A and all its updates during the Term and 1-B are incorporated herein by reference. Except as provided herein, if Schedule 1-A is not published in any calendar quarter, then the Schedule 1-A of the prior calendar quarter shall control. BASANITE shall determine the start and end date of each calendar quarter in its sole discretion. | | --- | --- | | 4.5 | **Payment and Creditworthiness.**At all times during the Term of this Agreement, USS shall remain current with all its payment obligations for all Build Schedules and any performance of BASANITE shall be contingent on BASANITE’s receipt of all pending payments from USS. If USS elects to have any USS Customer pay for any Build Schedules, then it shall remain the sole responsibility of USS to ensure timely payment to BASANITE. Failure to receive timely payment(s) shall entitle BASANITE to not release or ship any Products ordered under any Build Schedule. If at any time BASANITE determines, in its reasonable judgment, that USS or USS Customer is not creditworthy, BASANITE may require USS to provide a bank guarantee. Except as provided in the Build Schedules, payment shall be made by USS to BASANITE in net thirty (30) Business Days from BASANITE’s invoice date. | | --- | --- |

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| --- | | 4.6 | **Taxes and Foreign Currency.**USS shall be responsible for all federal, foreign, state, and local sales, use, excise and other taxes (except taxes based on BASANITE’s income), and all international delivery, shipping, and transportation charges, and all foreign agent or brokerage fees, document fees, custom charges and duties. It is the intent of both Parties to trade in United States Dollars and remain fixed in that currency, unless otherwise mutually agreed in Build Schedules. | | --- | --- | | 4.7 | **Packaging.**BASANITE will package the Product for shipment in accordance with Packaging and Shipping Specifications to be agreed to in each Build Schedule. | | --- | --- | | 4.8 | Shipment. Method of transport and place of delivery of the Products shall be specified by USS in the Build Schedules. Except as provided herein, shipping terms and expenses of the Products shall be F.O.B. USS Facilities for all domestic shipments and F.O.B. Manufacturing Plant for international shipments to be sent outside the United States of America. All Products delivered pursuant to the terms of this Agreement shall be suitably packed depending on the method of freight shipment and appropriately marked for shipment. Title to such Products and risk of loss shall pass from BASANITE to USS when delivered to USS Facilities for all domestic shipments and when delivered to carrier at Manufacturing Plant for all international shipments, as applicable. For international shipments, USS or USS Customer’s carrier shall transport the Product from BASANITE to USS or USS’ Customer’s final destination as provided in the Build Schedules and USS shall remain fully responsible for the Products after BASANITE delivers the Products to such USS or USS Customer’s carrier. In such case and for all international shipments, USS or USS Customer shall select the carrier, and USS shall be responsible for all shipping and collection arrangements, including coordination with BASANITE and all freight, insurance, and other shipping expenses, as well as any special packing expense specifically requested by USS, excluding bundle sizes of BasaFlex^TM^. USS or USS Customer shall also bear all applicable taxes, duties, and similar charges that may be assessed against the Products after delivery. Responsibility for loss of, or damage to the Product(s) for international shipments shall pass from BASANITE to USS after Products are taken in possession by the carrier. Responsibility for loss of, or damage to the Product(s) for domestic shipments shall pass from BASANITE to USS after Products are delivered to USS Facilities. All obligations of USS Customers shall remain the obligations of USS for purposes of this Agreement. BASANITE, upon a mutual written consent with USS, may agree to select a carrier and prepay for shipment and insurance for domestic and international shipments, which shall be promptly reimbursed to BASANITE by USS upon receipt of an invoice from BASANITE and within the time period as provided in such invoice from BASANITE. USS shall remain responsible for all domestic and international shipment costs and insurance, which shall be agreed upon in the Purchase Orders. | | --- | --- |

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| --- | | 4.9 | Additional InternationalShipment Requirements. USS shall be responsible for obtaining any required import or export licenses necessary for BASANITE to ship Product, including certificates of origin, manufacturer's affidavits, and U.S. Federal Communications Commission's identifier, if applicable and any other licenses required under US or foreign law and USS shall be the importer of record. USS agrees that it shall not export, re-export, resell or transfer, or otherwise require BASANITE to ship or deliver any Product, assembly, component or any technical data which violate any export controls or limitations imposed by the United States or any other governmental authority, or to any country for which an export license or other governmental approval is required at the time of export without first obtaining all necessary licenses and approvals and paying all duties and fees. USS shall provide BASANITE with all licenses, certifications, approvals and authorizations in order to permit BASANITE to comply with all import and export laws, rules and regulations for the shipment and delivery of the Product. USS shall also be responsible for complying with any legislation or regulations governing the importation of the Product into the country of destination and for payment of any duties thereon. | | --- | --- | | 4.10 | Materials Declaration. USS represents and warrants that the Product is not subject to Materials Declaration Requirements. In the event a specific Build Schedule should become subject to Materials Declaration Requirements, USS is ultimately and solely responsible for compliance with applicable Materials Declaration Requirements. USS understands and agrees that USS is responsible for notifying BASANITE in writing of any specific Materials Declaration Requirements that USS determines to be applicable to the Product and shall be solely liable for any incremental cost and for the adequacy and sufficiency of such determination and information. | | --- | --- | | 4.11 | Source Inspection. USS shall have the right, upon reasonable advance notice in writing, during normal business hours and at its expense to inspect, review, and monitor the Manufacturing Services and the manufacturing of the Products by BASANITE, provided that such inspection shall not disrupt BASANITE’s normal business operations. USS shall cause each of its employees, agents and representatives who have access to BASANITE’s facilities, to maintain, preserve and protect all Proprietary Information and Technology of BASANITE and the confidential or proprietary information and technology of BASANITE’s other customers in writing and as approved by BASANITE. | | --- | --- | | 4.12 | Delivery Inspection. USS will promptly inspect the Products upon receipt at USS’ facility to determine whether any Products included in the shipment are in short supply, defective, or otherwise not in conformance with this Agreement. Within ninety (90) Calendar Days of receipt of such Products by USS or USS Customers, USS will notify BASANITE of any Defects or non-conformance, and BASANITE will promptly replace such Products free of charge if determined by BASANITE that there were Defects or non-conformance issues with the Products. | | --- | --- |

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| --- | | 4.13 | Cancellation of PurchaseOrders for Custom Products. Notwithstanding any other provision of this Agreement, USS shall have no right to cancel any Order for Custom Products (including Orders for Products manufactured in non-standard sizes) ordered in a Purchase Order anytime within fifteen (15) Calendar Days prior to the delivery date of any Custom Products and shall remain obligated to pay for such cancelled Custom Products to BASANITE. If USS cancels any order of Custom Products in a Purchase Order when there are sixteen (16) Calendar Days or more left prior to the delivery date of any Custom Products, then USS shall be responsible to pay 15% of the total amount agreed in the Purchase Order for the cancelled Custom Products to BASANITE within the time period provided for or agreed upon in the Purchase Order for payments to be made. Any partial cancellation of a Purchase Order where the entire Purchase Order was not cancelled shall be deemed as a cancellation of only the Products that were cancelled and the obligations for all other Products that were not cancelled shall remain the same as agreed in the Purchase Order for purposes of all remaining obligations of USS. | | --- | --- | | 4.14 | Resale of the Products. USS shall be free to resell the Products for such prices and upon such terms and conditions as USS may see fit in its sole discretion in accordance with the terms of this Agreement. BASANITE shall have no control over or any liability in connection with the price at which USS resells the Products, and USS shall hold BASANITE harmless and indemnify and defend BASANITE from and against any liability resulting therefrom. | | --- | --- | | 4.15 | Terms of Sale. All sales by BASANITE to USS shall be in accordance with the terms and conditions of this Agreement. | | --- | --- | | 5 | Representations | | --- | --- |

USS and BASANITE, as applicable, make the following representations, warranties, and covenants:

5.1	Warranties and Representationsof USS.

(a)	USS has good and sufficient<br>corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement has been<br>duly authorized, executed and delivered by USS and, assuming due authorization, execution, and delivery by USS, constitutes the legal,<br>valid and binding obligation of USS enforceable against USS in accordance with its terms.
(b)	USS is bound by the provisions<br>of this Agreement and shall not circumvent the terms of this Agreement as to the exclusive supplier rights given to BASANITE. Any attempt<br>by USS to circumvent or bypass the activities of BASANITE during the Term shall be construed as a material breach of this Agreement and<br>shall trigger the termination of this Agreement.
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| --- | | (c) | USS shall make available to BASANITE upon BASANITE’s request any information for BASANITE to be able to perform its obligations under each Purchase Order. | | --- | --- | | (d) | Neither the entering into nor the delivery of this Agreement nor the completion of the transaction contemplated hereby by USS shall result in the violation of: | | --- | --- | | (i) | any of the provisions of USS’ charter documents, or | | --- | --- | | (ii) | any agreement to which USS is a party or by which USS is bound, or | | --- | --- | | (iii) | any applicable law. | | --- | --- | | (e) | USS and its personnel shall comply with all applicable statutes, rules and regulations governing all aspects of the services and obligations to be performed under this Agreement. | | --- | --- | | (f) | USS expressly acknowledges that neither BASANITE nor any of its Related Persons or their Affiliates have made any representations or warranties to it and that no act by USS, including any review of the affairs of BASANITE or any of its Subsidiaries, shall be deemed to constitute any representation or warranty by BASANITE to USS. USS represents to BASANITE that it has, independently and without reliance upon BASANITE, or any of its Affiliates, and based on such documents and information as it has deemed appropriate, made its own appraisal of and conducted investigation into the business, assets, operations, property, financial and other conditions, stockholder bases and prospects of BASANITE and its Subsidiaries and USS made its own decision to enter into this Agreement. USS also represents that it has, independently and without reliance upon BASANITE, or any of its Affiliates, made such investigation as USS deems necessary to inform itself as to the business, assets, operations, property, stockholder base, financial and other conditions and prospects of BASANITE and its Subsidiaries. | | --- | --- | | (g) | USS shall require all controversies relating to the Products between USS and the USS Customers to be resolved in accordance with the laws of the State of Florida in the United States of America. USS shall enter into written contracts with the USS Customers for the sale of Products which shall have a dispute resolution provision requiring all controversies between USS and the USS Customers relating to the Products to be resolved in accordance with the laws of the State of Florida in the United States of America. | | --- | --- | | (h) | Other than the foregoing representations and warranties, USS makes no warranties hereunder or any results to be achieved, and hereby expressly disclaims the existence of any such representations or warranties. USS shall have no liability for any indirect, incidental or consequential damages suffered by BASANITE as a result of any failure on the part of USS in the performance of its duties hereunder. | | --- | --- |

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(a)	BASANITE has good and sufficient<br>corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement has been<br>duly authorized, executed and delivered by BASANITE and, assuming due authorization, execution and delivery by BASANITE, constitutes the<br>legal, valid and binding obligation of BASANITE enforceable against BASANITE in accordance with its terms.
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(b)	Neither the entering into nor<br>the delivery of this Agreement nor the completion of the transaction contemplated hereby by BASANITE shall result in the violation of:
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(i)	any of the provisions of BASANITE’s<br>charter documents, or
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(ii)	any agreement to which BASANITE<br>is a party or by which BASANITE is bound, or
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(iii)	any applicable law.
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(c)	BASANITE and its personnel<br>shall comply with all applicable statutes, rules and regulations governing all aspects of the services and obligations to be performed<br>under this Agreement.
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5.3	Neither Party is subject to<br>any pending or threatened litigation or governmental action that could interfere with its performance of this Agreement.
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5.4	The terms of this Agreement<br>are the binding legal obligation of each Party and are enforceable in accordance with applicable laws.
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6	Product Warranty
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6.1

Product Warranty. BASANITE warrants that at the time of manufacture, the Products will conform, in all material respects, to the Specifications as agreed to in the Build Schedule. This warranty shall remain in effect for a period of * * * from the date any Product is initially delivered to USS or * * * from the date any Product is initially delivered to USS Customer, whichever is earlier in time ("Warranty Period"). This warranty is extended to and may only be enforced by USS and/or USS Customer. Such designation shall be made by USS or USS Customer in writing in the Build Schedule.

6.2

Replacement of DefectiveProduct. In accordance with BASANITE’s standard return material authorization process and procedure ("RMA"), BASANITE will issue a credit for or replace any Product that contains a defect caused by a breach of the warranty set forth in this Section, provided that the Product is received within * * * following the end of any applicable Warranty Period ("RMA Product").

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(a)	If USS desires to return a<br>Product based on a claim of breach of the warranty set forth in this Section, USS shall request an RMA number from BASANITE. USS shall<br>then consign a representative sample of the alleged defective Product, F.O.B. BASANITE’s Manufacturing Plant as determined by BASANITE,<br>and specify the BASANITE assigned RMA number. BASANITE will analyze any such RMA Product and, if a breach of warranty is found ("Defect"),<br>then BASANITE will issue a credit or replace the RMA Product within* * * of receipt by BASANITE of the RMA Product<br>and all required associated documentation. BASANITE shall solely determine if a Product has Defect(s).
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(b)	In the event a Defect is found,<br>BASANITE will reimburse USS for the reasonable cost of transporting the RMA Product to BASANITE’s designated repair facility or<br>Manufacturing Plant as determined by BASANITE and BASANITE will deliver the replacement RMA Product at no additional charge.
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6.4

Limitationof Warranty**. THE REMEDY SET FORTH IN THISSECTION SHALL CONSTITUTE USS’ SOLE AND EXCLUSIVE REMEDY FOR A BREACH OF THE WARRANTY MADE BY BASANITE HEREIN. THE WARRANTY SET FORTHIN THIS SECTION IS IN LIEU OF, AND BASANITE EXPRESSLY DISCLAIMS, ALL OTHER WARRANTIES AND REPRESENTATIONS OF ANY KIND WHATSOEVER WHETHEREXPRESS, IMPLIED, STATUTORY, ARISING BY COURSE OF DEALING OR PERFORMANCE, CUSTOM, USAGE IN THE TRADE OR OTHERWISE, INCLUDING COMPLIANCEWITH MATERIALS DECLARATION REQUIREMENTS, ANY COMPONENT WARRANTY, ANY WARRANTY OF MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE.NO ORAL OR WRITTEN STATEMENT OR REPRESENTATION BY BASANITE, ITS AGENTS OR EMPLOYEES SHALL CONSTITUTE OR CREATE A WARRANTY OR EXPAND THESCOPE OF ANY WARRANTY HEREUNDER. BASANITE’S WARRANTY SHALL NOT APPLY TO ANY PRODUCT BASANITE DETERMINES TO HAVE BEEN SUBJECTED TOTESTING FOR OTHER THAN SPECIFIED CHARACTERISTICS OR TO OPERATING AND/OR ENVIRONMENTAL CONDITIONS IN EXCESS OF THE MAXIMUM VALUES ESTABLISHEDIN APPLICABLE SPECIFICATIONS AS AGREED UPON IN BUILD SCHEDULES THAT WERE ACCEPTED BY BASANITE, OR TO HAVE BEEN THE SUBJECT OF MISHANDLING,ACCIDENT, MISUSE, NEGLECT, IMPROPER TESTING, IMPROPER OR UNAUTHORIZED REPAIR, ALTERATION, DAMAGE, ASSEMBLY, PROCESSING OR ANY OTHER INAPPROPRIATEOR UNAUTHORIZED ACTION OR INACTION THAT ALTERS PHYSICAL OR ELECTRICAL PROPERTIES. THIS WARRANTY SHALL NOT APPLY TO ANY DEFECT IN THE PRODUCTARISING FROM ANY DRAWING, DESIGN, SPECIFICATION, PROCESS, TESTING PROCEDURE OR OTHER PROCEDURE, ADJUSTMENT OR MODIFICATION SUPPLIED AND/ORAPPROVED BY USS. PARTIES AGREE THAT THIS SECTION 6.4 IS EFFECTIVE AND conspicuous as requiredUNDER the Uniform Commercial Code, Chapters 671 AND 672, AND SECTION 671.201(10) of the Florida Statutes, AS AMENDED.**

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7	Responsibilities of USS
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7.1	General Responsibilitiesof USS. USS agrees that it will diligently perform the services and obligations detailed in this Agreement. The operations of USS<br>are under its sole and exclusive control, including without limitation supervision of, and liability for expenses incurred with respect<br>to, employees and any of its sub-agents and independent contractors. USS will use its best reasonable efforts to promote and distribute<br>the Products in the Territory and to Permitted Customers.
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7.2	Parties agree that the obligation<br>of USS to purchase the Products does not restrict the ability of BASANITE in any way to manufacture and sell its Products to any other<br>Persons and/or through manufacturing done in any quantities.
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8.1	General Responsibilitiesof BASANITE. BASANITE shall supply the Products as agreed in the Purchase Orders to USS and shall provide upon a written request of<br>USS the engineering conversion calculation in writing for the Products for using steel reinforcement to BasaFlex^TM^ reinforcement<br>in accordance with the principles and practices of engineering through a review of a Florida licensed professional engineer (“Conversion<br>Calculation”). Such Conversion Calculation shall be signed by a Florida licensed professional engineer. BASANITE shall remain responsible<br>for fees and costs relating to the Conversion Calculation and certification that is done by a Florida licensed professional engineer.<br>Any additional costs and fees for reviews and approvals from any other engineers licensed in any other states shall remain the responsibility<br>of USS. BASANITE will undertake Commercially Reasonable Efforts to provide sufficient supply of the Products in accordance with the Purchase<br>Orders that are accepted by both Parties. Notwithstanding any other provision of this Agreement, BASANITE may sell the Products to any<br>Person without any restrictions whatsoever.
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8.2	In addition to any other responsibilities<br>stated in this Agreement, BASANITE will:
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(a)	Provide at<br>USS’ reasonable written request and without charge, training with regard to any characteristics of the Products that USS deems reasonably<br>necessary for USS and its employees and agents to fulfill the purposes of USS’ obligations under this Agreement;
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(b)	Provide to<br>USS without any additional charge promotional literature, brochures, and commercial and technical information regarding the Products as<br>determined by BASANITE; and
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(c)	Provide sales<br>support and technical training to USS and its employees and agents as deemed reasonably appropriate by BASANITE
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8.3	USS agrees that regardless<br>of any responsibilities of BASANITE, USS shall remain fully responsible for the actions of its own employees, sub-agents, and independent<br>contractors or other Persons that are engaged by USS to perform any obligations for USS or on its behalf under this Agreement and who<br>receive any training or materials from BASANITE.
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9	IntellectualProperty
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9.1	Protection of IntellectualProperty.
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(a)	For the purposes of this Section<br>and this Agreement, "Intellectual Property Rights" of each Party include all or any of the following:
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(i)	trademarks, and applications<br>for the grant of any trademarks;
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(ii)	trade names used in any form<br>and whether in English or any other translated form;
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| --- | | (iii) | patents, and applications for the grant of any patents; | | --- | --- | | (iv) | copyright; | | --- | --- | | (v) | designs, whether or not registered; and | | --- | --- | | (vi) | know-how, being technical and other information or experience or trade secrets devised, developed or acquired by each Party. | | --- | --- | | (b) | Parties agree and acknowledge that they shall throughout the Term: | | --- | --- | | (i) | not cause anything which may damage or endanger the Intellectual Property of the other Party or assist others to do so; | | --- | --- | | (ii) | notify any suspected infringement of the Intellectual Property of the other Party; | | --- | --- | | (iii) | take such reasonable action in relation to such infringement as requested by the other Party; | | --- | --- | | (iv) | on the termination of this Agreement, immediately cease to use the Intellectual Property of the other Party; and | | --- | --- | | (v) | not use the Intellectual Property of the other Party other than as permitted by this Agreement. | | --- | --- | | (c) | Each Party acknowledges and agrees that each Party shall retain title and all ownership rights to its Intellectual Property Rights, and this Agreement shall not be construed in any manner as transferring any rights of ownership in such Intellectual Property Rights to USS from BASANITE and to BASANITE from USS. | | --- | --- | | (d) | All discoveries, inventions, technical information, procedures, manufacturing or other processes, software, firmware, technology, patents, trademarks, know-how or other intellectual property rights that are developed by BASANITE while rendering the Manufacturing Services under this Agreement and all improvements, modifications or enhancements to the Products that are made by BASANITE shall be deemed as intellectual property owned solely by BASANITE (“BASANITE Manufacturing Intellectual Property”). Further, the rights of BASANITE in the BASANITE Manufacturing Intellectual Property shall not change regardless of the language provided on the labels for the Products or any language that is directly provided on Products. It is agreed that USS’ Intellectual Property shall not be included in any manner within the BASANITE Manufacturing Intellectual Property. It is also agreed that USS Intellectual Property shall not include BASANITE Manufacturing Intellectual Property and BASANITE Existing Intellectual Property. | | --- | --- | | (e) | Notwithstanding any other provision of this Agreement, all Product labeling for BASANITE Products that are manufactured by BASANITE may include language as determined by BASANITE providing that BASANITE built or manufactured such Products or such other language as determined by BASANITE or as required by law. | | --- | --- |

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| --- | | (f) | USS shall not dispute or contest for any reason whatsoever, directly or indirectly, during the Term of this Agreement and thereafter, the validity, ownership, or enforceability of any of the trademarks and Intellectual Property Rights of BASANITE, nor directly or indirectly attempt to acquire or damage the value of the goodwill associated with any of the trademarks and Intellectual Property Rights of BASANITE, nor counsel, procure or assist any Person to do any of the foregoing. USS will not institute any proceedings with respect to the trademarks and Intellectual Property Rights of BASANITE either in USS’ own name or on behalf of BASANITE without express written permission of BASANITE. USS shall assign to BASANITE, without charge, any rights in the trademarks of BASANITE that may inure to the benefit of USS pursuant to this Agreement or otherwise. USS shall execute any documents or do any acts that may be required to accomplish the intent of this Section. | | --- | --- | | 9.2 | Limited License to Use Marksand Corporate Name. Subject to the terms and conditions of this Agreement, BASANITE grants to USS a perpetual, royalty-free limited license, to its trademarks, tradenames and service marks in the Territory and to be used for transactions with USS customers during the Term solely in connection with marketing effort or publicity relating to the Products or sale of Products to give express recognition to BASANITE for its role in Manufacturing Services as permitted herein. Prior to the use of any trademarks, tradenames and service marks owned by BASANITE or the corporate name of BASANITE in any promotional or marketing activities or campaigns as permitted herein, USS shall communicate with BASANITE in writing and obtain necessary written permissions and approvals from BASANITE, which may be obtained through emails. It is further agreed that unless permitted in writing by BASANITE, USS, its Affiliates, and Related Persons shall not use trademarks, tradenames and service marks owned by BASANITE or the corporate/company name of BASANITE and its Affiliates for any purpose that is not permitted in this Agreement. | | --- | --- | | 9.3 | Non-Disclosure of ConfidentialInformation. Except as provided herein, Parties recognize and acknowledge that confidential information may exist from time to time, with respect to their business concerning the business, business practices, method of sales, manufacturing of Products, Manufacturing Services, Products, BASANITE Existing Intellectual Property, BASANITE Manufacturing Intellectual Property, training, assets, accounts or finances of the other Party's business or any of the secrets, dealings, transactions or affairs of the other Party, including, but not limited to, trade secrets, costs, pricing practices, customer lists, financial data, employee information or information as to the organization structure as identified in this Section (“Confidential Information”). Accordingly, except as provided herein, Parties shall not, during or after the Term of this Agreement, disclose to any Person any Confidential Information relating to the business of the other Party. Further, Parties shall not, without prior written consent of each other disclose to any Person, and shall during or after the Term of this Agreement, use its best efforts to prevent the publication or disclosure of any Confidential Information concerning the business, business practices, method of sales, manufacturing of Products, Manufacturing Services, Products, BASANITE Existing Intellectual Property, BASANITE Manufacturing Intellectual Property, training, assets, accounts or finances of the other Party's business or any of the secrets, dealings, transactions or affairs of the other Party, including, but not limited to, trade secrets, costs, pricing practices, customer lists, financial data, employee information or information as to the organization structure or any other Confidential Information, which have or may come to its knowledge during or after the term of this Agreement, or previously or otherwise. Each Party shall use its best efforts to cause its representatives, attorneys, accountants and advisors to whom information is disclosed to comply with the provisions of this Section. At any time, a Party may reasonably request, the other Party shall forthwith surrender to the other Party all documents and copies of documents in their possession relating to the foregoing, including, but not limited to, internal and external business forms, manuals, correspondence, notes, customer lists and computer programs, and no Party shall not make or retain any copy or extract of any of the foregoing of the other Party. Notwithstanding any other provision of this Agreement, Parties understand that disclosure of the copy of this Agreement is permissible and shall not be deemed as Confidential Information. | | --- | --- |

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10	Duration &Termination

10.1	Effective Date and Duration. This<br>Agreement shall become effective on the date first written above and shall continue in effect for a period of five (5) calendar years<br>from the Effective Date (“Term”), unless terminated earlier pursuant to Section 10 herein. Notwithstanding the foregoing,<br>Sections 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, and 15 herein shall survive the expiration, cancellation or termination of this Agreement.
10.2	Automatic Renewal. Following<br>the initial Term, and subject to USS and BASANITE remaining in compliance with its provisions, this Agreement shall automatically renew<br>upon each anniversary of the Effective Date for an additional Term of one (1) year, unless USS or BASANITE provide a written notice of<br>termination to the other party no later than thirty (30) calendar days prior to the end of the then existing term. All renewal terms shall<br>be referred to as Term for construction of any provision of this Agreement during any renewed term.
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10.3	Termination. This<br>Agreement may be terminated as follows:
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(a)	Termination for Convenience.<br>This Agreement may be terminated at any time upon the mutual written consent of the Parties prior to the end of the Term.
(b)	Termination for Cause.<br>Either Party may terminate this Agreement based on the material breach by the other Party of the terms of this Agreement, provided that<br>the Party alleged to be in material breach receives written notice setting forth the nature of the breach at least * * * prior<br>to the intended termination date. During such time the Party in material breach may cure the alleged breach and if such breach is cured<br>within such * * *, no termination will occur, and this Agreement will continue in accordance with its terms. If such breach<br>shall not have been cured, termination shall occur upon the termination date set forth in such notice.
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(c)	Termination for Bankruptcy/Insolvency.<br>Either Party may terminate this Agreement by written notice to the other Party, effective immediately upon receipt, upon the happening<br>of any of the following events with respect to a Party:
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(i)	The appointment of a receiver<br>or custodian to take possession of any or all of the assets of the other Party, or should the other Party make an assignment for the benefit<br>of creditors, or should there be an attachment, execution, or other judicial seizure of all or a substantially all of the other Party's<br>assets, and such attachment, execution or seizure is not discharged within 30 Business Days.
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(ii)	The other Party becomes a debtor,<br>either voluntarily or involuntarily, under Title 11 of the United States Code or any other similar law and, in the case of an involuntary<br>proceeding, such proceeding is not dismissed within 30 Business Days of the date of filing.
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| --- | | (iii) | The liquidation, dissolution or winding up of the other Party whether voluntarily, by operation of law or otherwise. | | --- | --- | | 10.4 | Duty toMitigate Costs. Both Parties shall, in good faith, undertake Commercially Reasonable Efforts to mitigate the costs of termination, expiration or cancellation. | | --- | --- | | 11 | Right of Partiesat Termination | | --- | --- |

11.1

ObligationsAfter Termination. In the event that this Agreement is terminated or expires on its own terms, BASANITE shall continue to fulfill all orders accepted by BASANITE prior to the date of termination, and USS shall remain obligated to compensate BASANITE for the Products and any other agreed fees, costs, or expenses incurred by BASANITE in accordance with the terms of the respective Build Schedules up to and including the Termination Effective Date.

11.2

Survival. Notwithstanding anything to the contrary set forth herein, no termination of this Agreement shall relieve any Party from any obligations hereunder which are outstanding on or relate to matters or claims occurring or arising prior to, the date of such termination or which survive such termination by their own terms or nature. Unless otherwise stated herein, all other rights and obligations of the Parties shall cease upon termination of this Agreement.

12	Indemnifications & Limitationof Liability

12.1

Indemnification. Each Party (“Indemnifying Party”) shall indemnify, hold harmless and defend the other Party (“Indemnified Party”) and its officers, directors, agents, employees, and affiliates, from and against any and all claims, demands, actions, costs, expenses, liabilities, judgments, causes of action, proceedings, suits, losses and damages of any nature, which are threatened or brought against, or are suffered or incurred by, the Indemnified Party or any such person to the extent caused directly by acts or omissions of the Indemnifying Party relating to this Agreement, including without limitation (i) any negligent or tortious conduct, (ii) any breach of any of the representations, warranties, covenants or conditions of the Indemnifying Party contained in this Agreement, (iii) any violation of applicable laws or regulations, (iv) infringement or violation of any patent, copyright, trade secret, or other intellectual property of any third party, and (v) any breach of any express or implied warranties relating to the Products, including implied warranties of merchantability and fitness for a particular purpose.

12.2	Limitation of Liability. IN<br>NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY SPECIAL, INDIRECT, EXEMPLARY OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS AGREEMENT<br>OR PURCHASE OR USE OF THE PRODUCTS.

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| --- | | 12.3 | USS Warranty and Indemnificationwith Respect to the Territory. USS represents and warrants that it has conducted and will conduct, all patent, trademark and copyright searches necessary to evaluate any potential infringement claims with respect to the Product within the Territory. USS agrees to indemnify, defend and hold BASANITE and its employees, Subsidiaries, Affiliates, successors and assigns harmless from and against all claims, damages, losses, costs and expenses, including attorneys' fees, arising from any recall, replacement or impoundment of any Product and any third party claims asserted against BASANITE and its employees, Subsidiaries, Affiliates, successors and assigns, that are based in part or in whole on any of the following: (a) Specifications as agreed in Build Schedules accepted by BASANITE, USS’ Proprietary Information and Technology, any Product, or any information, technology and processes supplied and/or approved by USS or otherwise required by USS or BASANITE; (b) actual or alleged noncompliance with Materials Declaration Requirements; (c) that any item in subsection (a) infringes or violates any patent, copyright or other intellectual property right of another Person, and (d) design or product liability alleging that any item in subsection (a) has caused or will in the future cause damages of any kind. BASANITE may employ counsel, at its own expense to assist BASANITE with respect to any such claims, provided that if such counsel is necessary because of a conflict of interest with USS or its counsel or because USS does not assume control of the defense of a claim for which USS is obligated to indemnify BASANITE hereunder, USS shall bear such expense. USS shall not enter into any settlement that affects BASANITE’s rights or interests without BASANITE’s prior written approval, which shall not be unreasonably withheld. BASANITE will provide such assistance and cooperation as is reasonably requested by USS or its counsel in connection with such indemnified claims. Further, USS shall indemnify and hold harmless BASANITE, its directors and officers against all claims, obligations or liabilities including court costs and attorneys' fees, arising out of USS’ tortious or unauthorized acts, misrepresentations, omissions, failure to perform its obligations hereunder, or any acts not expressly authorized in writing, related to or beyond the scope of this Agreement. | | --- | --- | | 13 | Force Majeure | | --- | --- |

13.1

Force Majeure. Neither Party shall be responsible or liable for delays in the performance of its obligations hereunder, when caused by, related to, or arising out of acts of God, epidemic, pandemics, sinkholes, subsidence, strikes, lockouts, or other labor disputes, embargoes, earthquakes, accidents, weather, national, regional, or local disasters, calamities, or catastrophes, inability to obtain labor or materials (or reasonable substitutes therefor) at reasonable costs or failure of, or inability to obtain, utilities necessary for performance, governmental restrictions, orders, limitations, regulations, or controls, national emergencies, delay in issuance or revocation of permits, enemy or hostile governmental action, terrorism, insurrection, riots, civil disturbance or commotion, fire or other casualty, and other causes or events beyond the reasonable control of such Party (hereinafter collectively referred to as “Force Majeure Events” or separately as “Force Majeure Event”).

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14.1

Publicity and Media. Except as stated herein, neither Party shall refer to this Agreement in any publicity or advertising or disclose to any Person any of the terms of this Agreement without first conferring with the other Party. USS may disclose the corporate name of BASANITE or any other name BASANITE uses in each marketing effort or publicity relating to the Products or sale of Products giving express recognition to BASANITE and its role in Manufacturing Services.

14.2

Prior to use of any name of BASANITE or its corporate name in any promotional or marketing activities or campaigns, USS shall communicate with BASANITE in writing and obtain necessary permissions and approvals, which may be obtained through emails. Notwithstanding any other provision of this Agreement, each Party may furnish any information to any governmental or regulatory authority, including the United States Securities and Exchange Commission or any other foreign stock exchange regulatory authority that it is by law, regulation, rule or other legal process obligated to disclose.

14.3

As a direct consequence of entering into this Agreement, BASANITE is required to issue a SEC Form 8-K within four (4) Business Days of the Effective Date, which shall be a publicly available document. BASANITE will issue a simultaneous press release informing the general public that the Parties have entered into this Agreement and provide such other details as are legally required to inform the public, its customers, other distributors, vendors, investors, and shareholders.

15	General Provisions
15.1	Amendments. This<br>Agreement may be amended only by a writing signed by each of the Parties, and any such amendment shall be effective only to the extent<br>specifically set forth in such writing.
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| --- | | 15.2 | Entire Agreement and Interpretationof Agreement. This Agreement constitutes the entire understanding of the Parties and supersedes all prior discussions, negotiations, contracts and understandings, whether oral or written, with respect to its subject matter. The Parties agree that this Agreement shall be deemed to have been drafted jointly by the Parties and their counsel such that the terms of this Agreement may not be construed against any Party based upon a claim that the Party or its counsel was responsible for drafting this Agreement, in whole or in part. The Parties hereby acknowledge that they fully understand the terms of this Agreement, have entered into same voluntarily, or have had the advice of counsel in so doing. The Parties shall take all such actions and execute all such documents that may be necessary to carry out the purposes of this Agreement, whether or not specifically provided for in this Agreement. All references to monies in this Agreement shall be deemed to mean lawful monies of the United States of America. Each Build Schedule shall provide terms on the Products for Manufacturing Services for each order of Products and shall become part of this Agreement. Parties agree that Incentive Warrant entered into between USS and Basanite, Inc. is a separate contract and shall not be construed to be part of this Agreement for any purposes whatsoever. USS shall be responsible to hold BASANITE harmless and indemnify BASANITE with all attorneys’ fees, costs, and damages that are incurred by BASANITE if USS pursues a legal action as to any claim that asserts issues relating to the Strategic Partner Warrant and this Agreement together in one legal action in any tribunal. The intent of the Parties is to keep the issues and controversies relating to this Agreement and Strategic Partner Warrant completely separate for any and all purposes. | | --- | --- | | 15.3 | Modification. No change, modification or waiver of this Agreement shall be valid unless it is in writing and signed by all the Parties who are bound by the terms of this Agreement. No course of dealing between the Parties hereto shall be effective to amend, modify, or change any provision of this Agreement. The Parties may from time to time, enter into supplemental written agreements for the purpose of adding any provisions to this Agreement or changing in any manner the rights and obligations of the Parties under this Agreement or any Build Schedule hereto. Any such supplemental written agreement executed by the Parties shall be binding upon the Parties. If any terms in the Build Schedule conflict with the terms of this Agreement, then only the terms of this Agreement shall control and govern. Unless agreed to by all the Parties in writing, Build Schedules shall not modify the terms of this Agreement. | | --- | --- | | 15.4 | Severability. If any provision of this Agreement is held invalid, unenforceable, or void by a court of competent jurisdiction, this Agreement shall be considered divisible as to such provision, and the remainder of the Agreement shall be valid and binding as though such provision were not included in this Agreement. | | --- | --- |

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| --- | | 15.5 | USS acknowledges that it is wholly responsible for compliance with any foreign law, regulation or other standard for any Products that will be shipped outside of the United States and such requirements shall be provided in the Build Schedule. USS shall provide BASANITE with written notice of any such applicable foreign law, regulation or standard before BASANITE provides Manufacturing Services for Products to be shipped internationally. BASANITE has the sole right to either accept compliance with any such applicable foreign law, regulation or standard or to reject any such production requests. | | --- | --- | | 15.6 | Notwithstanding any other provision of this Agreement, if any claim is asserted by any Person against BASANITE resulting from any solicitation or sale of the Products within the Territory and/or in compliance with this Agreement due to any misrepresentation, omission, fault, negligence, or intentional conduct of USS, then USS shall hold BASANITE harmless and indemnify BASANITE for any damages and attorneys’ fees and costs BASANITE has to incur to resolve or defend its position in any controversy outside the United States or within the United States. | | --- | --- | | 15.7 | Any sales of Products that are manufactured in accordance with the terms of this Agreement by USS to any Person shall be governed by the laws of the State of Florida and except as stated herein, the venue for all controversies between USS and such Persons must remain within the State of Florida, County of Broward. | | --- | --- | | 15.8 | USS shall take any and all necessary actions to assure that all contracts that are entered into between USS and any Person to whom it sells Products manufactured in accordance with the terms of this Agreement are made in writing that such contracts comply with the mandatory governing law and the venue provisions as required by this Section. This Agreement does not provide or create any third-party beneficiary rights or any other rights of any kind in any Person with whom USS enters into any contract for the sale of Products manufactured under this Agreement. | | --- | --- | | 15.9 | Benefits; Binding Effects;Assignment. This Agreement shall inure to the benefit of and be binding upon Parties, their successors and assigns, including, without limitation, any person, partnership or corporation which may acquire all or substantially all of the assets in business of a Party, or with or into which a Party may be consolidated, merged or otherwise reorganized, and this provision shall apply in the event of any subsequent merger, consolidation, reorganization, or transfer. Parties may freely transfer or assign this Agreement or any of the rights granted hereunder as long as they notify the other Party in writing of such transfer or assignment. | | --- | --- |

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| --- | | 15.10 | Insurance. Each Party will keep its business and properties insured at all times against such risks for which insurance is usually maintained by reasonably prudent Persons engaged in a similar business (including insurance for hazards and insurance against liability on account of damage to Persons or property and insurance under all applicable workers' compensation laws). The insurance maintained shall be in such monies and with such limits and deductibles usually carried by Persons engaged in the same or a similar business. In support of its indemnification obligations, each Party shall name the other as an additional insured on its General Liability, Automobile and Worker's Compensation insurance policies and agrees that such insurance shall respond as primary and noncontributory with any insurance held by each Party. Certificates of Insurance shall be provided by each Party to the other Party within 30 Business Days of the Effective Date and annually thereafter on the anniversary date of this Agreement. | | --- | --- | | 15.11 | Non-Impairment of Goodwill. During and after the Term of this Agreement, neither Party shall disparage, in any manner or respect, the other Party or the financial soundness and responsibility, personnel or practices of the other Party’s business. | | --- | --- | | 15.12 | Non-Solicitation. Both Parties acknowledge and recognize the highly competitive nature of their businesses and agree that during the Term of the Agreement between the Parties and for 1 year thereafter, neither Party shall directly or indirectly hire or solicit, induce or influence, or attempt to induce or influence, or assist in the hiring or solicitation of any Person who, at any time during the 6 month period prior to such hiring or solicitation was an employee of the other Party, or otherwise entice or encourage any such Person either to leave the other Party’s employment or to provide services to any competitor of either Party. Neither Party is prohibited from (a) soliciting by means of a general advertisement or (b) engaging any recruiting firm or similar organization to identify or solicit individuals for employment (and soliciting any Person identified by any such recruiting firm or organization) so long as such hiring Party does not identify the individuals to be solicited by such recruiting firm or organization and that the ultimate hiring or contracting of such an individual does not pose a conflict of interest or otherwise violate any contractual obligations between the Parties. | | --- | --- | | 15.13 | Other Activities. Parties may engage in other activities for compensation during the Term of this Agreement so long as those activities do not conflict with the responsibilities or limitations agreed to by Parties herein. | | --- | --- | | 15.14 | Headings. Headings in this Agreement are for convenience only and shall not be used to interpret or construe its provisions. | | --- | --- | | 15.15 | Governing Law. This Agreement shall be governed by the laws of the State of Florida (without regard to the laws that might be applicable under principles of conflicts of law) as to all matters, including, but not limited to, matters of validity, construction, effect and performance. | | --- | --- |

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| --- | | 15.16 | Venue, Jurisdiction, Fees,and Costs. Should a lawsuit be necessary to enforce this Agreement, the Parties agree that jurisdiction and venue shall lie solely in Broward County, Florida, United States of America. In the event of any litigation or arbitration relating to the subject matter of this Agreement, the prevailing Party shall be entitled to receive from the non-prevailing Party, its reasonable attorneys’ fees (including Trial and Appellate attorney's fees) and costs. | | --- | --- | | 15.17 | No-Waivers. The written waiver by any Party of any other Party's breach of any provision of this Agreement shall not operate nor be construed as a waiver of any subsequent breach, and the written waiver by any Party to exercise any right or remedy shall not operate nor be construed as a waiver or bar to the exercise of such right or remedy upon the occurrence of any subsequent breach. All waivers under this Agreement must be in writing and signed by the Parties hereto. | | --- | --- | | 15.18 | Disputes, Pre-MediationSettlement Conference, Mediation, and Arbitration. Any disputes between the Parties hereto, whether arising under this Agreement or otherwise, which the Parties cannot resolve between themselves using good faith shall be resolved in person at the offices of either Party or at the office of their counselor at the office of a mediator or an arbitrator or through the use of remote technology such as phone or video conferencing as follows: | | --- | --- | | (a) | The Parties shall use good faith efforts to resolve disputes among themselves without using a neutral third party or a mediator within * * * of notice of such dispute. Such efforts shall include escalation of such dispute to the corporate officer level of each Party and each Party may engage counsel to assist in such settlement efforts prior to mediating such dispute with a mediator. | | --- | --- | | (b) | If the Parties are unable to resolve the dispute among themselves, it shall be referred to a court certified mediator, and any mediation shall be held in Broward County or at the offices of JAMS in Miami-Dade County. The Parties shall share equally in the cost of said mediation and mutually attempt to select a mediator from JAMS. In the event that the Parties are unable to agree upon a mediator from the list of mediators at JAMS within 15 Business Days of the date on which either Party requests mediation of a matter, the mediator shall be appointed by JAMS. | | --- | --- |

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| --- | | (c) | In the event that said dispute is not resolved in mediation, the Parties shall submit the dispute to a neutral arbitrator at JAMS. The arbitration shall be held in Broward County at office of BASANITE or at the offices of JAMS in Miami-Dade County. The prevailing Party shall recover all fees and costs of said arbitration. In the event that the Parties are unable to agree upon an arbitrator from the list of arbitrators at JAMS within 15 Business Days of the date on which either Party requests arbitration of a matter, the arbitrator shall be appointed by JAMS. The Parties further agree that full discovery shall be allowed to each Party to the arbitration and a written award shall be entered forthwith. Any and all types of relief that would otherwise be available in Court shall be available to both Parties in the arbitration. The decision of the arbitrator shall be final and binding. Arbitration shall be the exclusive legal remedy of the Parties. Judgment upon the award may be entered in any court of competent jurisdiction pursuant to Florida Statutes. | | --- | --- | | (d) | If either Party refuses to comply with a ruling or decision of the arbitrator and a lawsuit is brought to enforce said ruling or decision, it is agreed that the Party not complying with the ruling or decision of the arbitrator shall pay the court costs and reasonable attorney's fees (including Trial and Appellate attorney's fees) incurred in enforcing the ruling or decision of the arbitrator. | | --- | --- | | (e) | Any rights of injunctive relief shall be in addition to and not in derogation or limitation of any other legal rights | | --- | --- | | 15.19 | Assignment. Neither Party shall assign, pledge or otherwise transfer any of its rights, interest, or obligations hereunder, whether by operation of law or otherwise, without the prior express written consent of the other Party. | | --- | --- | | 15.20 | WAIVER OF JURY TRIAL. EACHOF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY AND ANY ACTION, PROCEEDINGOR COUNTERCLAIM (WHETHER BASED ONCONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF ANY PARTY HERETO IN NEGOTIATION, ADMINISTRATION,PERFORMANCE OR ENFORCEMENT HEREOF. | | --- | --- |

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| Redactions with respect to certain portions hereof denoted with “\* \* \*” |

| --- | | 15.21 | Facsimile or ElectronicCopy. A facsimile or electronic copy of this Agreement and any signatures affixed hereto shall be considered for all purposes as originals. Delivery of this Agreement may be effectuated by electronic communication (including by PDF sent by electronic mail, facsimile or similar means of electronic communication). Signatures delivered by electronic communication shall have the same legal effect as manual signatures. Each Party will make commercially reasonable efforts to provide an original signature, but failure to do so will not affect the validity of a party’s electronic signature. Pursuant to the Electronic Signatures in Global and National Commerce Act (ESIGN) the Parties hereby expressly agree to the other’s election to use electronic signature software operated by DocuSign for execution of this Agreement. The electronic signature generated by this software shall have the same legal effect as a handwritten signature and shall be considered legally admissible evidence of the parties’ intention to be legally bound by this Agreement. The Parties declare that they have received all information required to be fully aware of the electronic signature process and each Party hereby waives any claim, which it may have against the other Party as a result of the use of such electronic signature software. | | --- | --- | | 15.22 | Cumulative Remedies. The rights and remedies of the Parties hereunder are cumulative and not exclusive of any rights or remedies which the Parties would otherwise have. No single or partial exercise of any such right or remedy by a Party, and no discontinuance of steps to enforce any such right or remedy, shall preclude any further exercise thereof or of any other right or remedy of such Party. | | --- | --- | | 15.23 | Entire Agreement. This Agreement contains the entire agreement of the Parties with respect to the transactions contemplated hereby and supersedes all prior written and oral agreements, and all contemporaneous oral agreements, relating to such transactions. | | --- | --- | | 15.24 | Schedules. The Schedules attached hereto are an integral part hereof and all references herein to this Agreement shall include such documents as incorporated in this Agreement. Schedules 1-A and 1-B are incorporated herein by reference and made part of this Agreement including any amendments to such Schedules shall be deemed incorporated in this Agreement, with consent or approval of USS. | | --- | --- | | 15.25 | Counterparts. This Agreement may be executed in two or more parts, each of which shall be deemed an original but all of which together shall be one and the same instrument. | | --- | --- | | 15.26 | Notices. Any notice, demand or other communication required or permitted by this Agreement must be in writing and shall be deemed to have been given and received: | | --- | --- | | (a) | if mailed, on the third business day after deposit in the United States mail, certified or registered postage prepaid, return receipt requested, or | | --- | --- | | (b) | if delivered by overnight delivery service or messenger, when delivered, or | | --- | --- |

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| --- | | (c) | if faxed or emailed, twenty-four hours after being dispatched by fax or EDI (with telephone confirmation) addressed to the respective Parties at the following addresses, telegram or telex or email (through last known email address); in every case addressed to the Party to be notified as follows: | | --- | --- |

If to USS:

U.S. SUPPLIES, INC.

1305 Hill Avenue

West Palm Beach, FL 33407

Attention: Manuel A. Rodriguez, President

mrodriguez@cppb.us

If to BASANITE:

BASANITE INDUSTRIES LLC

2041 NW 15th Avenue

Pompano Beach, FL 33069

Attention: Simon R. Kay, Interim Acting Chief Executive Officer

sk@basaniteindustries.com

Copy to:

Harsh Arora, Esq.

Kelley Kronenberg

10360 West State Road 84

Ft. Lauderdale, FL 33324

harora@kklaw.com

IN WITNESS WHEREOF the Parties have executed this Agreement as of the Effective Date.

U.S. SUPPLIES INC.

By: /s/ Manuel A. Rodriguez

Manuel A. Rodriguez, President

BASANITE INDUSTRIES LLC

By: /s/ Simon R. Kay

Simon R. Kay, Interim ActingChief Executive Officer

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SCHEDULE1-A

* * *

SCHEDULE 1-B

priceadjustment formula

** *

Exhibit 10.12

Redactions with respect to certain portions hereof denoted with “* * *” as such information is both not material and the type of information that the registrant treats as private or confidential.

EXCLUSIVE SUPPLIER AGREEMENT

THISEXCLUSIVE SUPPLIER AGREEMENT (this “Agreement”) is entered into on this 10th day of December (the “Effective Date”) by and between BASANITE INDUSTRIES, LLC, a Delaware limited liability company, located at 2041 NW 15^th^ Ave., Pompano Beach, FL 33069 (“Supplier” or “Company”), and ConcreteProducts of the Palm Beaches, Inc. (“CPPB” or “Customer”), a Florida corporation, located at 460 Avenue South, Riviera Beach, FL 33404 (“Customer”). Both Supplier and Customer shall be referred to together as “Parties” and individually as “Party”.

RECITALS

A. Supplier is in the business of manufacturing and selling concrete-reinforcing materials from basalt fiber and basalt fiber reinforced polymers (hereinafter “BFRP”) based on proprietary BASANITE technology, including production of BasaFlex^TM^ BFRP reinforcing bar (hereinafter “rebar”), which are collectively referred to as Products as further described in Schedule A attached hereto, and Supplier is in the business of directly distributing and/or marketing such Products.

B. Supplier and Customer wish to enter into this Agreement in order to establish the terms for a supply relationship with respect to the Products, and to establish terms, conditions, and procedures for the production and sale of such Products by Supplier to Customer.

C. Customer desires to purchase from Supplier, and Supplier desires to sell to Customer, quantities of Products as Customer may order from time to time, and Customer desires to grant to Supplier, a non-exclusive license to use the Customer Brand Attributes in connection with the production and supply of the Products bearing the Customer Brand Attributes for Customer, pursuant to the terms of this Agreement and subject to prior written approval of use of Customer Attributes by Supplier for any marketing or legal disclosures, and such written consent shall not be unreasonably withheld or denied by Customer to Supplier and shall be promptly provided.

NOW,THEREFORE, for and in consideration of the mutual promises herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Supplier and Customer, intending to be legally bound hereby, agree as follows:

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| --- | | 1. | Recitals; Schedules; Definitions. The foregoing recitals are true and correct and, together with the attached schedules, are incorporated herein by this reference. In addition to terms defined elsewhere in this Agreement, the capitalized terms set forth below shall have the meaning as defined below. Any capitalized terms that are used with the lower case shall have the same meaning as the capitalized terms. All representations made within the definitions shall be construed as enforceable terms and conditions under this Agreement. | | --- | --- | | (a) | “Affiliate(s)” means with respect to a Person, any other Person which directly or indirectly controls, or is controlled by, or is under common control with, the specified Person or an officer, director or 10% or more shareholder of the specified Person. For purposes of the preceding sentence, "control" of a Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, or direct or indirect ownership (beneficially or of record) of, or direct or indirect power to vote, 10% or more of the outstanding shares of any class of capital stock of such Person (or in the case of a Person that is not a corporation, 50% or more of any class of equity interest). Basanite Inc., a Nevada corporation, shall be deemed as an Affiliate of Supplier for purposes of this Agreement. | | --- | --- | | (b) | “Business Day(s)” means Monday through Friday excluding any national, legal or bank holiday in the United States of America or as established by the federal government of the United States of America. If any time period set forth in this Agreement expires upon a Saturday, Sunday or U.S. national, legal or bank holiday, such period shall be extended to and through the next succeeding Business Day. | | --- | --- | | (c) | “Calendar Day(s)” means day shown on the calendar beginning at 12:00 midnight, including Saturdays, Sundays and holidays (anywhere in the world). The term “day” shall mean calendar day whether or not expressly identified. | | --- | --- | | (d) | “Design Specification” means the written requirement that describes design characteristics and manufacturing methodology. | | --- | --- | | (e) | “Concrete Materials” means materials manufactured by Customer, which may include such materials that are manufactured by using Products. | | --- | --- | | (f) | “Commercially Reasonable Efforts” means * * * | | --- | --- |

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| --- | | (g) | “Customer Brand Attributes” means all intellectual property of Customer including Customer’s trademarks, patents, and copyrights relating to Concrete Materials. Customer Brand Attributes do not include any intellectual property and proprietary technology relating to Products owned by Supplier including but not limited to Product Rights. | | --- | --- | | (h) | “Customer Location” means location in the State of Florida in Palm Beach County, Florida, as designated by Customer in the Purchase Order, which is the principal business location for deliveries for Customer. | | --- | --- | | (i) | “Custom Products” means any Products that are not identified in Schedule 1-A. Except as otherwise provided in Section 2(e), the terms of this Agreement that refer to Products shall also mean Custom Products for purposes of construction of terms that apply to the sale and purchase of Custom Products. | | --- | --- | | (j) | “Other Delivery Location” means any other location that is not Customer Location whether in or outside the State of Florida. | | --- | --- | | (k) | "EDI" shall mean electronic data interchange. | | --- | --- | | (l) | “F.O.B. Manufacturing Plant” means all shipping and handling risk and ownership shall pass from Customer to Supplier when the Products are delivered to Supplier at the Manufacturing Plant. | | --- | --- | | (m) | “F.O.B. Customer Location” means Supplier shall at its own risk transport Products from the Manufacturing Plant to Customer Location and ownership shall then pass from Supplier to Customer. | | --- | --- | | (n) | “Grade 60 steel rebar” means steel that offers a minimum yield strength of 60,000 pounds per square inch, or 420 megapascals on the metric grading scale and has features that include a continuous line system, with one line running along the length of the bar which is offset a minimum of five spaces from the center. Grade 60 steel rebar is particularly well-suited for medium- to heavy-duty concrete reinforcement applications. | | --- | --- | | (o) | Manufacturing Plant” shall mean a commercial premise operated by Supplier or its Affiliates where Products are being manufactured. | | --- | --- | | (p) | “Person” means any corporation, business entity, natural person, firm, joint venture, limited or general partnership, limited liability entity, limited liability partnership, trust, unincorporated organization, association, government, or any department or agency of any government. | | --- | --- |

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| --- | | (q) | “Product(s)” means the product(s) identified in purchase orders that are manufactured and assembled by Supplier. BasaFlex, BasaMix, BasaMesh shall all be deemed as Products for purposes of this Agreement including any other references to any Products that are identified with any other registered or common law trademark of Supplier or its Affiliates. | | --- | --- | | (r) | “Performance Specifications” means written requirement that describes the functional performance criteria required for the Products. | | --- | --- | | (s) | “Purchase Order” or “Order” means an Order for Products, together with an associated manufacturing schedule, provided to Supplier by Customer in writing, which specifies the Product(s) to be manufactured, including the quantity of each Product, its description, shipping instructions, including the address where Supplier will ship or transport the Products to, requested delivery date, SOW, total amount of the order pursuant to Schedules or any amendment to Schedules and such other additional details as provided under this Agreement. Each Purchase Order has to be accepted by Supplier in writing (via an order confirmation) for it to be enforceable under this Agreement. | | --- | --- | | (t) | "Specifications" means the technical specifications for manufacturing the Product(s) as established by Supplier. Specifications may be amended from time to time by amendments in the form of written engineering change orders agreed to by the Parties. Specifications may include Performance Specifications and/or Design Specifications, as applicable. | | --- | --- | | (u) | “SOW" means the statement of work for each Product set forth in all Purchase Orders. | | --- | --- | | (v) | “Termination Effective Date” shall mean the first date on which the Supplier Agreement is terminated in accordance with Section 4 of the Agreement. | | --- | --- |

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(a)

Appointment by Customer. Customer hereby engages Supplier as its sole and exclusive supplier of Products manufactured by Basanite and Supplier hereby accepts such engagement in accordance with the terms of this Agreement. Customer agrees that all Products purchased by Customer from Supplier hereunder shall be for Customer’s own use as raw materials for Customer’s Concrete Materials and not for resale of Products that are not made part of or used in manufacturing of Customer’s Concrete Materials. Customer will undertake Commercially Reasonable Efforts to provide the details in the Purchase Orders so that the Supplier can perform its obligations hereunder. Notwithstanding any other provision of this Agreement, Customer may sell the Concrete Materials to any Person without any restrictions whatsoever.

(b)

Supplier Duties. Supplier shall supply the Products as agreed in the Purchase Orders to Customer and shall provide upon a written request of Customer the engineering conversion calculation in writing for the Products for using steel reinforcement to BasaFlex^TM^ reinforcement in accordance with the principles and practices of engineering through a review of a Florida licensed professional engineer (“Conversion Calculation”). Such Conversion Calculation shall be signed by a Florida licensed professional engineer. Supplier shall remain responsible for fees and costs relating to the Conversion Calculation that is done by a Florida licensed professional engineer and any additional costs and fees for any additional reviews and approvals from any other engineers licensed in any other states shall remain the responsibility of the Customer. Supplier will undertake Commercially Reasonable Efforts to provide sufficient supply of the Products in accordance with the Purchase Orders that are accepted by both Parties. Notwithstanding any other provision of this Agreement, Supplier may sell the Products to any Person without any restrictions whatsoever. In addition, during the Term (as defined in Section 3, as such term maybe renewed pursuant to the terms hereof), and provided that Customer is not in material breach of this Agreement, Supplier shall not, directly or indirectly, manufacture, distribute or sell concrete construction materials of the type made Customer as of the Effective Date.

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| --- | | (c) | Product Orders. **** All Purchase Orders submitted by Customer and accepted by Supplier for Products are and shall be subject to this Agreement and shall be deemed to incorporate the terms and conditions of this Agreement, whether or not so specified in such purchase orders. Supplier’s acceptances of orders shall be evidenced by Supplier signing and returning the acknowledgment copy of the order within three (3) Business Days after receipt of the order, together with a pro-forma invoice for the Products covered by that order. All Orders shall contain the information necessary for Supplier to fulfill the order, which information shall include the following: | | --- | --- | | (i) | A reference to this Agreement, Supplier’s Quotation number and Customer’s purchase order number; | | --- | --- | | (ii) | A detailed description, quantity and quoted pricing of the Products required; | | --- | --- | | (iii) | The address to which Products are to be directed and the address to which Supplier’s invoice is to be sent, along with any special instructions for delivery; | | --- | --- | | (iv) | The mutually agreed upon delivery date. | | --- | --- | | (d) | Customer Duties. In addition to the other covenants and agreements set forth herein, Customer hereby covenants and agrees: | | --- | --- | | (i) | To notify Supplier promptly in writing of all applicable laws, and regulations, including, without limitation, all laws, rules, regulations relating to the purchase, sale, or importation of the Products as part of Concrete Materials or to the performance of the terms of this Agreement, and any and all changes, modifications, and amendments thereto. | | --- | --- | | (ii) | To apply for and take all necessary steps at Customer’s cost to obtain such 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 Products in Concrete Materials. | | --- | --- | | (iii) | To obtain and maintain, at its own expense, any and all consents, approvals, authorizations, licenses, permits, registrations, and similar entitlements required in connection with the conduct of the Customer’s business and operations, and to provide evidence of the same upon the request of Supplier. | | --- | --- |

| Redactions with respect to certain portions hereof denoted with “\* \* \*” |

| --- | | (iv) | To notify Supplier immediately in writing if Customer knows or suspects that any unauthorized third party is duplicating the Products and selling such “knock-off” or “bootleg” items, and to use its best efforts to prevent such unauthorized actions. | | --- | --- | | (v) | To remain financially responsible in all respects as to the use of the Products in the Concrete Materials by any Person and any liability or damages arising out of the use of the Concrete Materials by any Person whatsoever. | | --- | --- | | (vi) | During the Term (as defined in Section 3, as such term maybe renewed pursuant to the terms hereof), and provided that Supplier is not in material breach of this Agreement, Customer shall not, directly or indirectly, purchase or agree to purchase from any third party BRFP-based construction materials of the type made or proposed to be made by Supplier as of the Effective Date. | | --- | --- | | (e) | Cancellation of Purchase Ordersfor Custom Products. Notwithstanding any other provision of this Agreement, Customer shall have no right to cancel any Order for Custom Products ordered in a Purchase Order anytime within fifteen (15) Calendar Days prior to the delivery date of any Custom Products and shall remain obligated to pay for such cancelled Custom Products to Supplier. If Customer cancels any order of Custom Products in a Purchase Order when there are sixteen (16) Calendar Days or more left prior to the delivery date of any Products, then Customer shall be responsible to pay 15% of the total amount agreed in the Purchase Order for the cancelled Custom Products to Supplier within the time period provided for or agreed upon in the Purchase Order for payments to be made. Any partial cancellation of a Purchase Order where the entire Purchase Order was not cancelled shall be deemed as a cancellation of only the Custom Products that were cancelled and the obligations for all other Products that were not cancelled shall remain the same as agreed in the Purchase Order for purposes of all remaining obligations of Customer | | --- | --- | | (f) | Delivery Inspection. Customer will promptly inspect the Products upon receipt at Customer Location to determine whether any Products included in the shipment are in short supply, defective, or otherwise not in conformance with this Agreement. Within ninety (90) Calendar Days of receipt of such Products by Customer, Customer will notify Supplier of any Defects or non-conformance, and Supplier will promptly replace such Products free of charge if determined by Supplier that there were Defects or non-conformance issues with the Products. | | --- | --- |

| Redactions with respect to certain portions hereof denoted with “\* \* \*” |

| --- | | (g) | Product Warranty. Supplier warrants that at the time of manufacture, the Products will conform, in all material respects, to the Specifications as agreed to in the Purchase Order. This warranty shall remain in effect for a period of twenty-four (24) months from the date any Product is initially delivered to Customer or twelve (12) months from the date any Product is initially delivered to Persons to whom Customer sells the Products, whichever is earlier in time ("Warranty Period"). This warranty is extended to and may only be enforced by Customer. Such designation shall be made by Customer in writing in the Purchase Order. The inclusion of Product in Concrete Materials that are sold by Customer to another Person shall be construed as the sale of Product by Customer to another Person for purposes of this Warranty Period. | | --- | --- | | (h) | **Replacement of Defective Product.**In accordance with Supplier’s standard return material authorization process and procedure ("RMA"), Supplier will issue a credit for or replace any Product that contains a defect caused by a breach of the warranty set forth in this Section, provided that the Product is received within ninety (90) Business Days following the end of any applicable Warranty Period ("RMA Product”’). | | --- | --- | | (i) | Returned Material Authorization. If Customer desires to return a Product based on a claim of breach of the warranty set forth in this Section, Customer shall request an RMA number from Supplier. Customer shall then consign a representative sample of the alleged defective Product, F.O.B. Manufacturing Plant as determined by Supplier, and specify the Supplier assigned RMA number. Supplier will analyze any such RMA Product and, if a breach of warranty is found ("Defect"), then Supplier will issue a credit or replace the RMA Product within sixty (60) Calendar Days of receipt by Supplier of the RMA Product and all required associated documentation. Supplier shall solely determine if a Product has Defect(s). | | --- | --- |

In the event a Defect is found, Supplier will reimburse Customer for the reasonable cost of transporting the RMA Product to Supplier’s designated repair facility or Manufacturing Plant as determined by Supplier and Supplier will deliver the replacement RMA Product at no additional charge.

(j)

Negative Events. Customer acknowledges that Supplier has an overriding interest in protecting the reputation of and goodwill associated with the Products. Accordingly, if Customer, at any time, has a reasonable basis to believe that any act or occurrence related to the Products presents or has presented any threat to public health or safety or otherwise are likely to draw negative attention from any governmental agency, consumer or environmental group, media or other organization or any individual (any of such occurrences being a “Negative Event”), Customer will immediately notify Supplier of the facts giving rise to such belief or suspicion. In all such cases, Customer will closely coordinate with Supplier with respect to any actions Customer might take or permit and in respect to all public statements Customer might make regarding the particular Negative Event, and shall, after consultation with Supplier, follow all reasonable advice and instructions of Supplier with respect thereto.

| Redactions with respect to certain portions hereof denoted with “\* \* \*” |

| --- | | (k) | Order of Precedence. The terms and conditions of this Agreement shall take precedence over and govern in the event of conflict between the terms and conditions of this Agreement the terms and conditions of any other documents and forms of the Parties, including, without limitation, Customer’s quotation request and purchase order forms, Supplier’s quotation form, and any confirmation, acknowledgment, or other similar document. Any provision or data in any order, any subordinate document such as shipping releases, or any other document originated by either Party, or contained in any documents or forms attached to or referenced in any of the above documents, which modifies, supplements or conflicts with the terms of this Agreement shall not be binding unless agreed to in writing by the Parties. | | --- | --- | | (l) | Acknowledgement of Supplier’sRights with Respect to the Products. All rights not expressly granted above are hereby reserved by and to Supplier, and for avoidance of doubt, Customer acknowledges and agrees that as between Supplier and Customer, Supplier is and shall remain the sole and exclusive owner of all intellectual property rights with respect to the Products other than the Customer Brand Attributes (collectively, the “Product Rights”), and that Supplier retains the right to produce, market, distribute, use, market and sell the Products without the Customer Brand Attributes anywhere, without any duty or obligation to Customer. Customer acknowledges and agrees that all rights, title and interest with respect to any Product Rights as they relate to Concrete Materials that Customer may in the future own by operation of law relating to the use of Products in the Concrete Materials resulting from any modifications or improvements thereof (other than the Customer Brand Attributes) are hereby assigned and shall be assigned by Customer to Supplier and that Customer shall not acquire any ownership interest with respect to any Product Rights or any other intellectual property pertaining to the Products (other than the Customer Brand Attributes) through this Agreement or otherwise. Customer shall fully cooperate with Supplier in Supplier’s efforts to maintain, expand, and enforce Supplier’s rights with respect to the Product Rights. Customer will not on its behalf or on behalf of any other Person, in any country or jurisdiction, register or attempt to register any Product Rights. Customer will not do or permit to be done or assist any third party in taking any action which will in any way impair Supplier’s ownership of and rights in and to the Product Rights. Customer will not assist any other Person in contesting the validity of Supplier’s ownership of the Product Rights. Notwithstanding any other provision of this Agreement, Customer agrees that Customer shall disclose and disclaim the Product Rights in all registrations of patents, trademarks, copyrights, or any other form of intellectual property in any country or jurisdiction and, at all times, Customer shall disclaim that the Product Rights are owned by Supplier. Parties agree that any rights of Customer to use the intellectual property relating to Products as provided under this Agreement is very limited and is solely provided by Supplier to Customer to assure that Customer can maintain all its intellectual property rights in Concrete Materials. | | --- | --- | | (m) | Applications for filing ofTrademarks, Patents, and Copyrights. Supplier agrees not to file any application for any of Customer’s trademarks, patents, or copyrights relating to Concrete Materials and Customer agrees not to file any applications for any of Supplier’s trademarks, patents, or copyrights relating to Products. Parties agree and acknowledge that Customer owns trademarks, patents, or copyrights under common law relating to Concrete Materials even when such trademarks, patents, or copyrights are not registered with any governmental agency in any jurisdiction and that Supplier owns trademarks, patents, or copyrights under common law relating to Products even when such trademarks, patents, or copyrights are not registered with any governmental agency in any jurisdiction. | | --- | --- |

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3.1.	This Agreement shall become effective on the date first written above and shall continue in effect for<br>a period of five (5) calendar years from the Effective Date (“Term”), unless terminated earlier pursuant to Section 4<br>herein.
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3.2	Following the initial Term, and subject to Customer and Supplier remaining in compliance with its provisions,<br>this Agreement shall automatically renew upon each anniversary of the Effective Date for an additional Term of one (1) year, unless Customer<br>or Supplier provide a written notice of termination to the other party no later than thirty (30) calendar days prior to the end of the<br>then existing term. All renewal terms shall be referred to as Term for construction of any provision of this Agreement during any renewed<br>term.
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4.	Termination.
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4.1	This Agreement may be terminated as follows:
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(a)	Termination for Convenience.<br>This Agreement may be terminated at any time upon the mutual written consent of the Parties prior to the end of the Term.
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(b)	Termination for Cause.<br>Either Party may terminate this Agreement based on the material breach by the other Party of the terms of this Agreement, provided that<br>the Party alleged to be in material breach receives written notice setting forth the nature of the breach at least * * * prior<br>to the intended termination date. During such time the Party in material breach may cure the alleged breach and if such breach is cured<br>within such * * *, no termination will occur, and this Agreement will continue in accordance with its terms. If such breach<br>shall not have been cured, termination shall occur upon the termination date set forth in such notice.
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(c)	Termination for Bankruptcy/Insolvency.<br>Either Party may terminate this Agreement by written notice to the other Party, effective immediately upon receipt, upon the happening<br>of any of the following events with respect to a Party:
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(i)	The appointment of a receiver<br>or custodian to take possession of any or all of the assets of the other Party, or should the other Party make an assignment for the benefit<br>of creditors, or should there be an attachment, execution, or other judicial seizure of all or a substantially all of the other Party's<br>assets, and such attachment, execution or seizure is not discharged within 30 Business Days.
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| --- | | (ii) | The other Party becomes a debtor, either voluntarily or involuntarily, under Title 11 of the United States Code or any other similar law and, in the case of an involuntary proceeding, such proceeding is not dismissed within 30 Business Days of the date of filing. | | --- | --- | | (iii) | The liquidation, dissolution or winding up of the other Party whether voluntarily, by operation of law or otherwise. | | --- | --- | | 4.2 | Duty to Mitigate Costs. Both Parties shall, in good faith, undertake Commercially Reasonable Efforts to mitigate the costs of termination, expiration or cancellation. | | --- | --- | | 4.3 | ObligationsAfter Termination. In the event that this Agreement is terminated or expires on its own terms, Supplier shall continue to fulfill all orders accepted by Supplier prior to the date of termination, and Customer shall remain obligated to compensate Supplier for the Products and any other agreed fees, costs, or expenses incurred by Supplier in accordance with the terms of the respective Purchase Orders up to and including the Termination Effective Date. | | --- | --- |

4.4	Survival. Notwithstanding<br>anything to the contrary set forth herein, no termination of this Agreement shall relieve any Party from any obligations hereunder which<br>are outstanding on or relate to matters or claims occurring or arising prior to, the date of such termination or which survive such termination<br>by their own terms or nature. Unless otherwise stated herein, all other rights and obligations of the Parties shall cease upon termination<br>of this Agreement.
5.	Purchase Prices.
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5.1	For the period commencing on the Effective Date and ending on December 31, 2022 (“Discount Period”),<br>Supplier agrees to sell, and Customer agrees to purchase, the Products in accordance with the process where for every Purchase Order,<br>Customer shall first obtain a written quote from a Person who is not an Affiliate of Customer and is a seller of Grade 60 steel rebar<br>(“Competing Steel Seller”) for purchase of the same quantities of Grade 60 steel rebar that Customer intends to purchase from<br>Supplier and during the Discount Period Supplier will reduce the total cost of the Products to be sold pursuant to a Purchase Order by<br>* * * for each Product that is sold to Customer from Supplier. For the period commencing January 1, 2023, Supplier agrees to sell, and<br>Customer agrees to purchase, the Products in accordance with the Fee and Price Schedule then in existence, and the current Fee and Price<br>Schedule is set forth in Schedule 1-A, which may be amended from time to time by Supplier with mutual prior consent from Customer in accordance<br>with the terms of this Agreement. The prices of the Products and payment terms for Products ordered shall be expressly agreed to in each<br>Purchase Order.
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| --- | | 5.2 | Supplier shall establish the wholesale price and the selling retail price for the Products. Supplier agrees to establish the retail selling price for each Product(s) at * * * above the wholesale price (the price at which the Products are sold to Customer by Supplier), allowing Customer to maintain a gross margin of * * * (gross margin shall be the difference in Customer’s selling price and the wholesale price paid to Supplier by Customer for purchase of each Product, excluding any costs, expenses, or deductions of any kind whatsoever). Notwithstanding any of the foregoing, Customer shall determine its own selling price for Concrete Materials. | | --- | --- |

5.3	Pricing for each Product shall be adjusted quarterly by Supplier and published in a Fee and Price Schedule,<br>released at the beginning of each calendar quarter and all newly published Fee and Price Schedule shall amend the Schedule 1-A attached<br>with this Agreement from time to time. Such adjustments will be based on the U.S. Producer Price Index published by the US Bureau<br>of Labor Statistics, as provided under Schedule 1-B. Schedules 1-A and all its updates during the Term and 1-B are incorporated herein<br>by reference. Except as provided herein, if Schedule 1-A is not published in any calendar quarter, then the Schedule 1-A of the prior<br>calendar quarter shall control. Supplier shall determine the start and end date of each calendar quarter in its sole discretion.
5.4	Except as provided in the Purchase Orders, payment shall be made by Customer to Supplier in net thirty<br>(30) Business Days from Supplier’s invoice date.
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5.5	Notwithstanding any terms of this Section 5, Parties may mutually agree on any other pricing terms for<br>the Products in writing through a Purchase Order agreed to by Supplier.
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6.	Taxes and Other Charges.
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In addition to the applicable purchase prices, Supplier shall be entitled to separately invoice for, and Customer shall pay, all sales, use, excise, value added, gross receipts, turnover and other taxes and charges imposed by law or required by any government to be paid or collected by Supplier in connection with the purchase, delivery, sale or use of the Products pursuant to this Agreement.

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All payments due to Supplier from Customer under this Agreement shall be paid to the Supplier within one or a combination of the terms and conditions as noted in Schedule A or as provided in the invoice for a purchase order accepted by Supplier. Invoices for Products sold to Customer may be rendered by the Supplier at any time after the date of delivery as defined below. Each shipment shall constitute an independent transaction and Customer shall pay the invoice for each such transaction strictly in accordance with the payment terms noted in Schedule A or as provided in the invoice for a Purchase Order accepted by Supplier.

8.	Delivery.

Products will be considered delivered by Supplier for purposes of this Agreement when delivered to Customer Location. Customer shall pay any unloading costs to the extent they are not included in the freight. Method of transport and place of delivery of the Products shall be specified in the Purchase Orders. All Products delivered pursuant to the terms of this Agreement shall be suitably packed depending on the method of freight shipment and appropriately marked for shipment. All obligations of Customer as it relates to Concrete Materials shall remain the obligations of Customer for purposes of this Agreement. The delivery costs, transportation, and insurance costs shall all be agreed upon in the Purchase Order.

9.	Risk of Loss and Passage ofTitle.

Title to such Products and risk of loss shall pass from Supplier to Customer when delivered to Customer Location. Responsibility for loss of, or damage to the Product(s) shall pass from Supplier to Customer after Products are delivered to Customer Location.

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(a)	Disclaimerof Warranties; Limitation of Liability.

EXCEPTFOR THE WARRANTIES EXPRESSLY PROVIDED HEREIN, NEITHER PARTY HERETO MAKES ANY WARRANTIES AND DISCLAIMS ANY IMPLIED WARRANTIES OF ANY KIND,INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR AGAINST INFRINGEMENT WITHREGARD TO THE PRODUCTS OR THE PERFORMANCE OF ITS OBLIGATIONS HEREUNDER. NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY WITH RESPECTTO ANY PUNITIVE, SPECIAL, CONSEQUENTIAL, INCIDENTAL, OR INDIRECT DAMAGES, INCLUDING WITHOUT LIMITATION, LOST PROFITS ARISING OUT OF THEPERFORMANCE OF NONPERFORMANCE OF THIS AGREEMENT, EVEN IF THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT SHALLSUPPLIER’S TOTAL AGGREGATE LIABILITY UNDER THIS AGREEMENT OR OTHERWISE WITH RESPECT TO THE PRODUCTS SOLD TO CUSTOMER HEREUNDER OROTHERWISE INVOLVING SUPPLIER’S PERFORMANCE OF ITS OBLIGATIONS HEREUNDER EXCEED THE PURCHASE PRICE PAID BY CUSTOMER TO SUPPLIER FORTHE PRODUCT UNITS, IF ANY, GIVING RISE TO SUCH CLAIM. PARTIES AGREE THAT THIS PARAGRAPH IS EFFECTIVE AND conspicuousas required UNDER the Uniform Commercial Code, Chapters 671 AND 672, AND SECTION 671.201(10) of the Florida Statutes, AS AMENDED.

(b)	Limitationof Warranty.

THE REMEDYSET FORTH IN THE PARAGRAPH 10(D) SHALL CONSTITUTE CUSTOMER’S SOLE AND EXCLUSIVE REMEDY FOR A BREACH OF THE WARRANTY MADE BY SUPPLIERHEREIN. THE WARRANTY SET FORTH IN THIS PARAGRAPH IS IN LIEU OF, AND SUPPLIER EXPRESSLY DISCLAIMS, ALL OTHER WARRANTIES AND REPRESENTATIONSOF ANY KIND WHATSOEVER WHETHER EXPRESS, IMPLIED, STATUTORY, ARISING BY COURSE OF DEALING OR PERFORMANCE, CUSTOM, USAGE IN THE TRADE OROTHERWISE, INCLUDING COMPLIANCE WITH MATERIALS DECLARATION REQUIREMENTS, ANY COMPONENT WARRANTY, ANY WARRANTY OF MERCHANTABILITY, OR FITNESSFOR A PARTICULAR PURPOSE NO ORAL OR WRITTEN STATEMENT OR REPRESENTATION BY SUPPLIER, ITS AGENTS OR EMPLOYEES SHALL CONSTITUTE OR CREATEA WARRANTY OR EXPAND THE SCOPE OF ANY WARRANTY HEREUNDER. SUPPLIER’S WARRANTY SHALL NOT APPLY TO ANY PRODUCT SUPPLIER DETERMINESTO HAVE BEEN SUBJECTED TO TESTING FOR OTHER THAN SPECIFIED CHARACTERISTICS OR TO OPERATING AND/OR ENVIRONMENTAL CONDITIONS IN EXCESS OFTHE MAXIMUM VALUES ESTABLISHED IN APPLICABLE SPECIFICATIONS AS AGREED UPON IN PURCHASE ORDERS THAT WERE ACCEPTED BY SUPPLIER, OR TO HAVEBEEN THE SUBJECT OF MISHANDLING, ACCIDENT, MISUSE, NEGLECT, IMPROPER TESTING, IMPROPER OR UNAUTHORIZED REPAIR., ALTERATION, DAMAGE, ASSEMBLY,PROCESSING OR ANY OTHER INAPPROPRIATE OR UNAUTHORIZED ACTION OR INACTION THAT ALTERS PHYSICAL OR ELECTRICAL PROPERTIES. THIS WARRANTYSHALL NOT APPLY TO ANY DEFECT IN THE PRODUCT ARISING FROM ANY DRAWING, DESIGN, SPECIFICATION, PROCESS, TESTING PROCEDURE OR OTHER PROCEDURE,ADJUSTMENT OR MODIFICATION SUPPLIED AND/OR APPROVED BY CUSTOMER. PARTIES AGREE THAT THIS PARAGRAPH IS EFFECTIVE AND conspicuousas required UNDER the Uniform Commercial Code, Chapters 671 AND 672, AND SECTION 671.201(10) of the Florida Statutes, AS AMENDED.

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EXCEPTWITH REGARD TO ANY INDEMNITIES SET FORTH HEREIN, UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR TO ANY OTHERPERSON OR ENTITY UNDER ANY CONTRACT, TORT, STRICT LIABILITY, NEGLIGENCE, OR OTHER LEGAL OR EQUITABLE CLAIM OR THEORY FOR ANY SPECIAL,INCIDENTAL, CONSEQUENTIAL, OR INDIRECT DAMAGES, LOSS OF GOODWILL OR BUSINESS PROFITS, LOST REVENUE, WORK STOPPAGE, DATA LOSS, COMPUTERFAILURE OR MALFUNCTION, OR FOR ANY AND ALL OTHER DAMAGES, LOSS, OR EXEMPLARY OR PUNITIVE DAMAGES WHETHER SUCH PARTY WAS INFORMED OR WASAWARE OF THE POSSIBILITY OF SUCH LOSS OR DAMAGE. THE FOREGOING SHALL NOT EXCLUDE OR LIMIT EITHER PARTY'S LIABILITY FOR DEATH OR PERSONALINJURY OR MONETARY DAMAGES RESULTING FROM ITS NEGLIGENCE TO THE EXTENT THAT SUCH LIABILITY CANNOT BY LAW BE LIMITED OR EXCLUDED. NOTWITHSTANDINGANY OTHER PROVISION OF THIS AGREEMENT, PARTIES AGREE THAT ANY DEATH OR PERSONAL INJURY OR MONETARY DAMAGES RESULTING FROM THE PRODUCTSTHAT WERE MANUFACTURED OR SUPPLIED OR PURCHASED AS PER THE ACCEPTED purchase ORDERS SHALL NOT BE DEEMED AS A LIABILITY OF ANY PARTY UNLESSSUCH PARTY IS DETERMINED TO BE NEGLIGENT BY A TRIBUNAL IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT. PARTIES AGREE THAT THIS paragraphIS EFFECTIVE AND conspicuous as required UNDER the Uniform Commercial Code, Chapters 671 AND 672, AND SECTION 671.201(10) of the FloridaStatutes, AS AMENDED.

11.	Representations and Warranties.
(a)	Supplier Representations andWarranties. Supplier represents and warrants to the other Party the following:
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(i)	It is duly organized, validly<br>existing and in good standing under the laws of the jurisdiction of its formation, with full power and authority to execute and deliver<br>this Agreement and to consummate the transactions contemplated hereby.
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(ii)	The execution, delivery and performance<br>of this Agreement and the consummation of the transactions contemplated hereby by it have been duly and validly authorized and no further<br>authorization is required on its part to consummate the transactions contemplated hereby.
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(iii)	This Agreement and all other<br>documents executed and delivered by it pursuant to this Agreement constitute its legal, valid, and binding obligations, enforceable against<br>it in accordance with their respective terms.
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| --- | | (iv) | The individual executing this Agreement on its behalf has been duly authorized and empowered to execute this Agreement for the purpose of binding it to this Agreement. Its execution, delivery and performance of this Agreement does not require any third-party consents or governmental approvals, filings, registrations or permits that have not already been obtained and will be maintained during the Term. The execution, delivery, and performance of this Agreement by it does not and will not violate any contract or other arrangement between Supplier and any third party, or any applicable law or regulation. | | --- | --- | | (b) | Customer Representations andWarranties. Customer represents and warrants to Supplier the following: | | --- | --- | | (i) | It is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation, with full power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. | | --- | --- | | (ii) | The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby by it has been duly and validly authorized and no further authorization is required on its part to consummate the transactions contemplated hereby. | | --- | --- | | (iii) | This Agreement and all other documents executed and delivered by it pursuant to this Agreement constitute its legal, valid, and binding obligations, enforceable against it in accordance with their respective terms. | | --- | --- | | (iv) | The individual executing this Agreement on its behalf has been duly authorized and empowered to execute this Agreement for the purpose of binding it to this Agreement. Its execution, delivery and performance of this Agreement and the grant of the rights granted hereunder to Supplier with respect to the Customer Brand Attributes do not require any third-party consents or governmental approvals, filings, registrations or permits that have not already been obtained and will be maintained during the Term. The execution, delivery, and performance of this Agreement by it does not and will not violate any contract or other arrangement between it and any third party, or any applicable law or regulation | | --- | --- | | (v) | The Customer is the sole and exclusive owner of all intellectual property and other rights with respect to the Customer Brand Attributes and has all necessary power and authority to grant the license granted with respect to the Customer Brand Attributes to Supplier hereunder. None of the Customer Brand Attributes infringe, dilute, misappropriate or otherwise violate any intellectual property right or other right of any third party. | | --- | --- |

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Each Party hereto shall, at its expense, indemnify, defend and hold harmless the other Party hereto, its affiliates and their respective employees, officers and agents (each, an “Indemnified Party” and collectively, the “Indemnified Parties”) from and against any and all claims and causes of action of any nature made or lawsuits or other proceedings filed or otherwise instituted against any of such Indemnified Parties arising from or relating to any breach by the indemnifying Party of any of its representations, warranties or obligations hereunder. The indemnifying Party shall be responsible for and shall pay all costs and expenses related to such claims and lawsuits for which it shall indemnify the Indemnified Parties, including, but not limited to, the payment of all attorney’s fees and costs of litigation, defense and/or settlement of same. In claiming any indemnification hereunder, the indemnified Party shall promptly provide the indemnifying Party with written notice of any claim that the indemnified Party believes falls within the scope of the foregoing paragraph. The indemnified Party may, at its own expense, assist in the defense if it so chooses, provided that the indemnifying Party shall control such defense and all negotiations relative to the settlement of any such claim and further provided that any settlement intended to bind the indemnified Party shall not be final without the indemnified Party’s written consent, which shall not be unreasonably withheld.

13.	Notices.

Any notice, demand or other communication required or permitted by this Agreement must be in writing and shall be deemed to have been given and received:

(a)	if delivered by overnight delivery<br>service or messenger, when delivered, or
(b)	if mailed, on the third business<br>day after deposit in the United States mail, certified or registered postage prepaid, return receipt requested, or
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(c)	if faxed, telexed or telegraphed<br>or emailed, twenty-four hours after being dispatched by fax or EDI (with telephone confirmation) addressed to the respective Parties at<br>the following addresses, telegram or telex or email (through last known email address); in every case addressed to the Party to be notified<br>as follows:
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If to Customer:	Concrete Products of the Palm Beaches, Inc.
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	460 Avenue S
	Riviera Beach, FL 33404
	Attention: Manuel A. Rodriguez, President
	mrodriguez@cppb.us

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| --- | | If to Supplier: | BASANITE INDUSTRIES LLC | | --- | --- | | | 2041 NW 15th Avenue | | | Pompano Beach, FL 33069 | | | Attention: Simon R. Kay, Interim Acting Chief Executive Officer | | | sk@basaniteindustries.com | | Copy to: | Harsh Arora, Esq. | | --- | --- | | | Kelley Kronenberg | | | 10360 West State Road 84 | | | Ft. Lauderdale, FL 33324 | | | harora@kklaw.com | | 14. | Assignment. | | --- | --- |

Customer shall not assign or delegate any right, interest, or obligation under this Agreement without first obtaining the written consent of Supplier. No assignment, delegation or subcontract by Customer shall relieve Customer from its obligations and liabilities under this Agreement. Any attempted assignment or delegation in contravention of this prohibition shall be void and shall constitute a default under this Agreement. For purposes of this Agreement, a change in “control” (as previously defined) of Customer shall be deemed to constitute an attempted assignment of this Agreement requiring Supplier’s consent in accordance herewith. Supplier may assign its rights hereunder provided that the assignee acknowledges in writing Customer’s rights hereunder and agrees to assume and honor all of Supplier’s obligations hereunder.

15.	Force Majeure.

Neither Party shall be responsible or liable for delays in the performance of its obligations hereunder, when caused by, related to, or arising out of acts of God, epidemic, pandemics, sinkholes, subsidence, strikes, lockouts, or other labor disputes, embargoes, earthquakes, accidents, weather, national, regional, or local disasters, calamities, or catastrophes, inability to obtain labor or materials (or reasonable substitutes therefor) at reasonable costs or failure of, or inability to obtain, utilities necessary for performance, governmental restrictions, orders, limitations, regulations, or controls, national emergencies, delay in issuance or revocation of permits, enemy or hostile governmental action, terrorism, insurrection, riots, civil disturbance or commotion, fire or other casualty, and other causes or events beyond the reasonable control of such Party (hereinafter collectively referred to as “Force Majeure Events” or separately as “Force Majeure Event”).

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The written waiver by any Party of any other Party's breach of any provision of this Agreement shall not operate nor be construed as a waiver of any subsequent breach, and the written waiver by any Party to exercise any right or remedy shall not operate nor be construed as a waiver or bar to the exercise of such right or remedy upon the occurrence of any subsequent breach. All waivers under this Agreement must be in writing and signed by the Parties hereto.

17.	Governing Law.

This Agreement shall be governed by the internal laws of the State of Florida.

18.	Entire Agreement.

This Agreement, including the schedules referred to herein, constitutes the entire agreement between the Parties with respect to its subject matter. All prior or contemporaneous oral and written agreements, memoranda, and representations (and any subsequent purchase order, purchase order confirmation, or similar document) relating to sales of Products are superseded by this Agreement.

19.	Amendments.

This Agreement may be amended only by a subsequent writing signed by authorized representatives of both Parties hereto, indicating an intent to amend this Agreement.

20.	Severability.

If a court of competent jurisdiction adjudges any provision of this Agreement to be invalid or unenforceable, the remaining provisions shall not be affected thereby, and the Parties shall in good faith attempt to amend this Agreement to eliminate such invalidity or unenforceability, without thereby affecting the intent of the Parties as expressed herein. The Parties agree that this Agreement shall be deemed to have been drafted jointly by the Parties and their counsel such that the terms of this Agreement may not be construed against any Party based upon a claim that the Party or its counsel was responsible for drafting this Agreement, in whole or in part. The Parties hereby acknowledge that they fully understand the terms of this Agreement, have entered into same voluntarily, or have had the advice of counsel in so doing. The Parties shall take all such actions and execute all such documents that may be necessary to carry out the purposes of this Agreement, whether or not specifically provided for in this Agreement.

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Customer and Supplier agree that all commercial, technical, intellectual property and other business information provided hereunder by either Party to the other Party will be used only for purposes of performance of this Agreement, shall be kept confidential by the receiving Party using the same standard of care as such receiving Party uses to protect its own similar confidential information, and shall not be sold, given, or disclosed in any manner to any third party by the receiving Party. The obligations under the preceding sentence do not apply to information which: (a) was previously known to the receiving Party free of any obligation to keep it confidential; or (b) is or becomes publicly available by any means or medium other than unauthorized disclosure; or (c) is independently developed by the receiving Party; or (d) is disclosed to third parties by the disclosing Party without restriction; (e) is received from a third party whose disclosure would not violate any confidentiality obligation; or (f) is required to be disclosed by applicable law or by a subpoena or other order of a court of competent jurisdiction including disclosures required under any state or federal securities laws. Notwithstanding any of the foregoing, this Agreement can be disclosed and filed publicly to comply with any state or federal securities laws.

22.	Non-Solicitation.

Both Parties acknowledge and recognize the highly competitive nature of their businesses and agree that during the Term of the Agreement between the Parties and for 1 year thereafter, neither Party shall directly or indirectly hire or solicit, induce or influence, or attempt to induce or influence, or assist in the hiring or solicitation of any Person who, at any time during the 6 month period prior to such hiring or solicitation was an employee of the other Party, or otherwise entice or encourage any such Person either to leave the other Party’s employment or to provide services to any competitor of either Party. Neither Party is prohibited from (a) soliciting by means of a general advertisement or (b) engaging any recruiting firm or similar organization to identify or solicit individuals for employment (and soliciting any Person identified by any such recruiting firm or organization) so long as such hiring Party does not identify the individuals to be solicited by such recruiting firm or organization and that the ultimate hiring or contracting of such an individual does not pose a conflict of interest or otherwise violate any contractual obligations between the Parties.

23.	Pre-Mediation Settlement Conference, Mediation, and Arbitration.

Any disputes between the Parties hereto, whether arising under this Agreement or otherwise, which the Parties cannot resolve between themselves using good faith shall be resolved in person at the offices of either Party or at the office of their counselor at the office of a mediator or an arbitrator or through the use of remote technology such as phone or video conferencing as follows:

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| --- | | (a) | The Parties shall use good faith efforts to resolve disputes among themselves without using a neutral third party or a mediator within twenty (20) Business Days of notice of such dispute. Such efforts shall include escalation of such dispute to the corporate officer level of each Party and each Party may engage counsel to assist in such settlement efforts prior to mediating such dispute with a mediator. | | --- | --- | | (b) | If the Parties are unable to resolve the dispute among themselves, it shall be referred to a court certified mediator, and any mediation shall be held in Broward County or at the offices of JAMS in Miami-Dade County. The Parties shall share equally in the cost of said mediation and mutually attempt to select a mediator from JAMS. In the event that the Parties are unable to agree upon a mediator from the list of mediators at JAMS within fifteen (15) Business Days of the date on which either Party requests mediation of a matter, the mediator shall be appointed by JAMS. | | --- | --- | | (c) | In the event that said dispute is not resolved in mediation, the Parties shall submit the dispute to a neutral arbitrator at JAMS. The arbitration shall be held in Broward County at office of Supplier or at the offices of JAMS in Miami-Dade County. The prevailing Party shall recover all fees and costs of said arbitration. In the event that the Parties are unable to agree upon an arbitrator from the list of arbitrators at JAMS within fifteen (15) Business Days of the date on which either Party requests arbitration of a matter, the arbitrator shall be appointed by JAMS. The Parties further agree that full discovery shall be allowed to each Party to the arbitration and a written award shall be entered forthwith. Any and all types of relief that would otherwise be available in Court shall be available to both Parties in the arbitration. The decision of the arbitrator shall be final and binding. Arbitration shall be the exclusive legal remedy of the Parties. Judgment upon the award may be entered in any court of competent jurisdiction pursuant to Florida Statutes. | | --- | --- | | (d) | If either Party refuses to comply with a ruling or decision of the arbitrator and a lawsuit is brought to enforce said ruling or decision, it is agreed that the Party not complying with the ruling or decision of the arbitrator shall pay the court costs and reasonable attorney's fees (including Trial and Appellate attorney's fees) incurred in enforcing the ruling or decision of the arbitrator. | | --- | --- | | (e) | Any rights of injunctive relief shall be in addition to and not in derogation or limitation of any other legal rights. | | --- | --- |

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Customer and Supplier agree that the terms and conditions of this Agreement are fully applicable and binding to each other, their contractors, clients, representatives, employees, contractors, associates, assigns, trustees, heirs and/or assigns or executors, and Supplier and Customer irrevocably bind themselves not to deal independently with any person, builders, developers, business, corporations, partnership, buyer, sellers, borrowers, lenders, agents, brokers, institutions, including their affiliates, subsidiaries, contractees, clients, representatives, employees, contractors, associates, assigns, trustees, heirs and/or assigns, or executors or other entities introduced or known to the other Party, without the prior knowledge of the other Party, subject to all of the terms and conditions in this Agreement. Both Parties agree not to attempt to circumvent, avoid or bypass each other in any manner, regarding any agreements or disclosures made between the Parties hereto.

25.	Independent Contractor.

Neither Customer nor any of its affiliates or sub-distributors, nor their respective directors, officers, agents, or employees shall be or be considered an employee of Supplier, or any agent, partner, joint ventures, or legal representative of Supplier. Neither Customer nor any of its affiliates or sub-distributors, nor Supplier, nor any of their respective directors, officers, agents, or employees is granted, and shall not exercise the right or authority to assume or create any obligation or responsibility, including without limitation contractual obligations and obligations based on warranties or guarantees, on behalf of or in the name of the other Party.

26.	Insurance.

Customer shall maintain at all times while this Agreement is in effect and for a period of five (5) years thereafter policies of insurance issued by qualified carriers which provide for comprehensive property and casualty insurance for all of Customer’s assets, business interruption and general commercial liability insurance including, without limitation, coverage for property damage, personal injury and trademark infringement claims, for any acts arising from Customer’s conduct of its business operations pursuant to this Agreement. The coverage amounts for such policies shall be determined by mutual agreement of the Parties hereunder no later than thirty (30) Business Days after the Effective Date. Each such policy shall name Supplier as an additional named insured, shall contain a waiver of all subrogation rights against Supplier and its successors and assigns, and shall provide for thirty (30) Business Days’ prior written notice to Supplier for any modifications, cancellation, or expiration of the coverage. Supplier agrees in turn, to name Customer as an additional named insured under its Liability Policy.

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The provisions of paragraphs 2, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 19, 20, 21, 22, 23, 24, 25, 26, 28, 29, 30, 32, 33, and 34 shall survive any termination or expiration of this Agreement.

28.	Counterparts.

This Agreement may be executed by each Party upon a separate counterpart, each of which shall be deemed an original and all of which together shall constitute one agreement.

29.	Interpretation; Absence of Presumption; Currency.

This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the Party drafting or causing any instrument to be drafted. All references to payments and dollar amounts refer to U.S. Dollars, and all payments to Supplier hereunder shall be made in U.S. Dollars.

30.	Time.

References in this Agreement or any related document to time periods in Business Days shall mean calendar Business Days unless expressly provided otherwise.

31.	Venue, Jurisdiction, Fees,and Costs.

Should a lawsuit be necessary to enforce this Agreement, the Parties agree that jurisdiction and venue shall lie solely in Broward County, Florida, United States of America. In the event of any litigation or arbitration relating to the subject matter of this Agreement, the prevailing Party shall be entitled to receive from the non-prevailing Party, its reasonable attorneys’ fees (including Trial and Appellate attorney's fees) and costs.

32.	Headings.

Headings in this Agreement are for convenience only and shall not be used to interpret or construe its provisions.

33.	WAIVER OF JURY TRIAL.

EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY AND ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF ANY PARTY HERETO IN NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.

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A facsimile or electronic copy of this Agreement and any signatures affixed hereto shall be considered for all purposes as originals. Delivery of this Agreement may be effectuated by electronic communication (including by PDF sent by electronic mail, facsimile or similar means of electronic communication). Signatures delivered by electronic communication shall have the same legal effect as manual signatures. Each Party will make commercially reasonable efforts to provide an original signature, but failure to do so will not affect the validity of a Party’s electronic signature. Pursuant to the Electronic Signatures in Global and National Commerce Act (ESIGN) the Parties hereby expressly agree to the other’s election to use electronic signature software operated by DocuSign for execution of this Agreement. The electronic signature generated by this software shall have the same legal effect as a handwritten signature and shall be considered legally admissible evidence of the Parties’ intention to be legally bound by this Agreement. The Parties declare that they have received all information required to be fully aware of the electronic signature process and each Party hereby waives any claim, which it may have against the other Party as a result of the use of such electronic signature software.

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed by their duly authorized representatives as of the day and year first written above.

SUPPLIER:
BASANITE INDUSTRIES, LLC
By:	/s/ Simon R. Kay
Name:	Simon R. Kay
Title:	Interim Acting Chief Executive Officer
CUSTOMER:
Concrete Products of the Palm Beaches, Inc.
By:	/s/ Manuel A. Rodriguez
Name:	Manuel A. Rodriguez
Title:	President

SCHEDULE 1-A

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SCHEDULE 1-B

priceadjustment formula

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EXHIBIT 31.1

OFFICER’S CERTIFICATEPursuant to Rule 13a-14(a)/15d-14(a)

I, Simon R. Kay, Chief Executive Officer and President, certify that:

I have reviewed this Form 10-K for the year ended December 31, 2021, of Basanite, Inc.;
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15 (e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or cause such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 15, 2022	By: /s/ Simon R. Kay
	Name: Simon R. Kay
	Title: Chief Executive Officer and President

EXHIBIT 31.2

OFFICER’S CERTIFICATEPursuant to Rule 13a-14(a)/15d-14(a)

I, Simon R. Kay, Principal Financial Officer, certify that:

1.I have reviewed this Form 10-K for the year ended December 31, 2021, of Basanite, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15 (e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 15, 2022	By: /s/ Simon R. Kay
	Name: Simon R. Kay
	Title: Chief Executive Officer and President and Acting Interim<br>Chief Financial Officer

EXHIBIT 32.1

CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Basanite, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2021 as filed with the United States Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, in the capacities and on the dates indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

Date: April 15, 2022	By: /s/ Simon R. Kay
	Name: Simon R. Kay
	Title: Chief Executive Officer and President<br>and Acting Interim Chief Financial Officer (Principal Executive Officer & Principal Financial Officer)