What changed in this filing

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Item 9A. Controls and Procedures

2021-11-12 compared with 2020-10-22 · 120 added, 19 removed, 225 unchanged (38% of the section changed)

2 unchanged sentences

Under the supervision and with the participation of our senior management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this Annual Report on Form 10-K (the “Evaluation Date”).

Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded as of the Evaluation Date that our disclosure controls and procedures were effective such that the information relating to us required to be disclosed in our Securities and Exchange Commission (“SEC”) reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

During the 2021, the Company has been undertaking tremendous changes and expansion which rendered the management to re-consider the available of more management talents and professional staff to meet the enlargement in operation under the coming acquisition and expansion move.

Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded as of the Evaluation Date that our disclosure controls and procedures were not effective such that the information relating to us required to be disclosed in our Securities and Exchange Commission (“SEC”) reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

As of June 30, 2021, management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control--Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and SEC guidance on conducting such assessments.

Based on that evaluation, they concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below.

During the 2021, the Company has been undertaking tremendous enlargement and expansion which rendered the management to re-consider the available of more management talents and professional staff to meet the enlargement in operation during and after the coming acquisition and expansion move.

Based on this consideration and that evaluation, the current management concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below.

This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.

4 unchanged sentences

The aforementioned material weaknesses were identified by our Chief Executive and Financial Officers in connection with the review of our financial statements as of June 30, 2021.

Management believes that the material weaknesses set forth above did not have an immediate negative effect on our financial results because of our small size of operation.

However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements if the Company were growing substantially in the future periods.

Management believes that the material weaknesses set forth above may have an immediate negative effect on our financial results because of our enlargement of operation.

Management’s Annual Report on Internal Control Over Financial Reporting

4 unchanged sentences

With the participation of our Chief Executive and Financial Officer, our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of June 30, 2021 based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control - Integrated Framework.

Based upon such evaluation, our management concluded that we did maintain effective internal control over financial reporting as of June 30, 2020 based on the COSO framework criteria.

Based upon such evaluation, our management concluded that we did not maintain effective internal control over financial reporting as of June 30, 2021 based on the COSO framework criteria because of the enlargement in operation.

The management acknowledged that there is room for further improvement in maintaining effective internal control and shall take steps to implement management’s remediation initiatives during and after that expansion, This includes recruiting more management talents and professional staff, committing the entire organization to allocate necessary organizational resources, and cross-functional collaboration focused on strengthening the company’s quality systems and operating culture.

This Annual Report on Form 10-K does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting.

Management’s report was not subject to attestation by our registered public accounting firm pursuant to an exemption for non-accelerated filers from the internal control audit requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002.

In order to cure the foregoing material weakness, we have taken or are taking the following remediation measures:

We have been working on recruitment of more management talents and professional staff to fill in the gap of shortage of personnel under enlargement of operation during and after this expansion move.

With the enlargement of operation, the management needs to re-consider and re-evalaute the entire internal control reporting system and related risk and changes.

We have regularly offered our financial personnel trainings on internal control and risk management.

Also, we have regularly provided trainings to our financial personnel on U.S.

GAAP accounting guidelines.

We plan to continue to provide trainings to our financial team and our other relevant personnel on the U.S.

GAAP accounting guidelines applicable to our financial reporting requirements.

We intend to complete the remediation of the material weaknesses discussed above as soon as practicable but we can give no assurance that we will be able to do so.

Designing and implementing an effective disclosure controls and procedures is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to devote significant resources to maintain a financial reporting system that adequately satisfies our reporting obligations.

The remedial measures that we have taken and intend to take may not fully address the material weakness that we have identified, and material weaknesses in our disclosure controls and procedures may be identified in the future.

Should we discover such conditions, we intend to remediate them as soon as practicable.

We are committed to taking appropriate steps for remediation, as needed.

Officers’ Certifications

4 unchanged sentences

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the year ended June 30, 2020, that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

The Company initiated its remediation of material weaknesses identified above, which steps were being implemented during the period covered by this Annual Report.

Other Information.

Not applicable.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspetions.

Not applicable.

Directors, Executive Officers and Corporate Governance

7 unchanged sentences

Balakrishnan B S Muthu

Treasurer, Chief Financial

Officer, General Manager and Director

Treasurer, Chief Financial Officer, General Manager and Director

October 17, 2013

February 20, 2016

March 31, 2021

Liang Wai Keen

20 unchanged sentences

Chen is also a director of Dynamic Offshore Pte Ltd, Premier International Holdings Pte Ltd and Dynamics Holding (Thailand) Co., Ltd.

President and Part Owner, Fuego Flame Fireplace Manufacturing, Quincy, IL

President, Hide-A-Rake, Scottsdale, Arizona

2006 - Present:

Partner, Turks & Caicos Island Project (Joe Grants Cay)

2007 - Present:

Partner, Dominican Republic Project (Coconut Grove)

Craven is currently a partner in Turks & Caicos Island Project (Joe Grants Cay) and Dominican Republic Project (Coconut Grove).

He has worked as President of Hide-A-Rake, Scottsdale, Arizona and was responsible for the research and development of new golf course product that received two United States Patents.

Craven was also the President and part owner of Fuego Flame Fireplace Manufacturing, Quincy, IL.

Employment Agreements

17 unchanged sentences

Board and Committee Meetings

Our board of directors currently consists of two members, Balakrishnan B S Muthu and Chen Ching.

Our board of directors currently consists of three members, Balakrishnan B S Muthu, Chen Ching and Carl M.

The Board held no formal meetings during the year ended June 30, 2021.

14 unchanged sentences

our principal executive officer;

each of our two executive officers who were serving as executive officers at the end of the year ended June 30, 2020.

each of our three executive officers who were serving as executive officers at the end of the year ended June 30, 2021.

SUMMARY COMPENSATION TABLE

14 unchanged sentences

Chen was paid a total salary of $77,858 for the year ended June 30, 2021.

Craven was paid a total salary of $6,000 for the year ended June 30, 2021.

Other than set out below, there are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers.

13 unchanged sentences

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

The following table sets forth, as of September 28, 2020, certain information with respect to the beneficial ownership of our common shares by each shareholder known by us to be the beneficial owner of more than 5% of our common shares, as well as by each of our current directors and executive officers as a group.

The following table sets forth, as of November 10, 2021, certain information with respect to the beneficial ownership of our common shares by each shareholder known by us to be the beneficial owner of more than 5% of our common shares, as well as by each of our current directors and executive officers as a group.

Each person has sole voting and investment power with respect to the shares of common stock, except as otherwise indicated.

21 unchanged sentences

19,936,841 common shares

Taipan International Limited

LEVEL 1, LOT 7, BLOCK F , SAGUKING COMMERCIAL BUILDING , JALAN PATAU-PATAU LABUAN F.T.

87000 MALAYSIA

192,900,000 common shares

Direct ownership

Borneo Oil Berhad

1ST & 2ND FLOOR , VICTORIA POINT JALAN OKK AWANG BESAR W.P.

LABUAN 87007, MALAYSIA

186,666,667 common shares

Direct ownership

Internet.com Ltd

SUITE 4703, CENTRAL PLAZA, 18 HARBOUR ROAD, WANCHAI, HONG KONG

70,343,443 common shares

Direct ownership

The Wision Project Limited (formerly known as “Borneo Resources Limited”)

LEVEL 1, LOT 7 , BLOCK F , SAGUKING COMMERCIAL BUILDING , JALAN PATAU-PATAU LABUAN F.T.

87000, MALAYSIA

64,300,000 common shares

Direct ownership

_____________

5 unchanged sentences

In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights.

As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of shares of common stock actually outstanding on September 28, 2020.

As of September 28, 2020, there were 116,038,909 shares of our company’s common stock issued and outstanding.

As of November 12, there were 810,742,109 shares of our company’s common stock issued and outstanding.

Balakrishnan Muthu, our President, CFO and a director, and Chen Ching, our director have not filed their respective Forms 3.

1 unchanged sentence

Changes in Control

We are unaware of any contract or other arrangement the operation of which may at a subsequent date result in a change in control of our company.

The Company, through its wholly-owned subsidiary GBL, entered into a Share Sale Agreement in relation to acquisition of the entire issued and paid-up share capital of Bio Resources Limited (“BRL”) with Taipan International Limited, a company incorporated under the laws of the Labuan, and The Wision Project Limited (formerly known as “Borneo Resources Limited”), a company incorporated under the laws of the Labuan, and other individuals.

Under the terms of the Share Sale Agreement, the acquisition of the entire issued and paid-up share capital of BRL, through the Company’s wholly-owned subsidiary GBL, shall be satisfied by the issuance of 321,500,000 shares of the Company’s restricted common stock, par value $0.001 per share (the “Common Stock”) at a price per share of $0.03, and the issuance of promissory notes with a two-year term period for the amount of $20,355,000.

This acquisition is currently in progress and the completion of the Share Sale Agreement, which is subject to all such acts necessary, including but not limited to auditing and due diligence exercise to ascertain the valuation of BRL, may result in a change in control of our company.

Certain Relationships and Related Transactions, and Director Independence.

Muthu, one of our two directors, is not an independent director as he also serves as our executive officer.

Messrs Chen, one of our two directors, is an independent director as he does not hold any position as an executive officer.

Muthu, one of our three directors, is not an independent director as he also serves as our executive officer.

Messrs Chen, one of our three directors, is an independent directors as he does not hold any position as an executive officer.

Craven, one of our three directors, is not an independent director as he also serves as the executive officer of the Company’s wholly owned subsidiary Verde Renewables, Inc as of August 10, 2021.

Related party transaction

For the Year ended

Other income - Sales of wash sand to:

Jusra Mining Merapoh Sdn Bhd (#1)

Professional services provided by:

Federal Capital Investment Limited (#2)

Related party balances

Deposits paid for acquisition of property, plant and equipment

Borneo Energy Sdn Bhd (#3)

Other receivable

Jusra Mining Merapoh Sdn Bhd (#1)

Advanced to related parties

Advanced to Global Renewable Sdn Bhd (#4)

Advanced from related parties

Advanced from BOG (#5)

Advanced from Federal Mining Resources Limited (#6)

Advanced from Federal Capital Investment Limited (#7)

Advanced from Yorkshire Capital Limited (#8)

(#1) Lamax Gold Limited (“LGL”) holding 15% equity interests of GBL was the major shareholder of Jusra Minging Merapoh Sdn Bhd , .

(#2) One of the directors of Federal Capital Investment Limited, Mr.

Wu Ming Ding, has resigned as director of the Company effective February 20, 2016.

(#3) On May 10, 2021, the Company announced the Sale and Purchase Agreement to acquire the assets of biofraction plant and the right to use intellectual property license in Sabah, Malaysia from Borneo Energy Sdn Bhd, in consideration of issuance of 166,666,667 share of the Company’s stock at $0.03 per share, valued at $5,000,000.

135,666,667 shares and 31,000,000 shares were issued on May 10, 2021 and July 1, 2021, respectively.

The completion of the S&P Agreement is subject to all such acts necessary, including but not limited to due diligence exercise to ascertain the valuation of the assets of the biofraction plant and the right to use the licensed intellectual property in Sabah, Malaysia.

Borneo Oil Berhad (“BOB”) is ultimate holding company of Borneo Energy Sdn Bhd and holding 20.0% and 23.0% of the Company’s issued and outstanding common stock as of June 30, 2021 and November 10, 2021, respectively.

(#4) Balakrishnan B.S.

Muthu is the common director of Global Renewable Sdn Bhd and the Company.

(#5) Borneo Oil and Gas Corporation SDN (“BOG”) is a wholly owned subsidiary of Borneo Oil Berhad (“BOB”) (holding 20.0% and 23.0% of the Company’s issued and outstanding common stock as of June 30, 2021 and November 10, 2021, respectively).

BOG is one of the shareholders of the Company and did not own any shares of the Company since April 28, 2017.

The advances are related to ordinary business transactions and bear no interest or collateral, repayable and renewable under normal business advancement terms.

(#6) One of the directors of Federal Mining Resources Limited, Mr.

Chen Ching, has been appointed as director of the Company effective on February 20, 2016.

Another director of Federal Mining Resources Limited, Mr.

Wu Ming Ding, has resigned as director of the Company effective on February 20, 2016.

The advances are related to ordinary business transactions and bear no interest or collateral, repayable and renewable under normal business advancement terms.

On June 9, 2021, the Company entered into a Settlement of Debt Agreement (the “Debt Settlement Agreement”) with Federal Mining Resources Limited, to convert a total of USD 173,465 of the Company’s accounts payable to the creditor as of December 31, 2020 into equity by means of a subscription for 5,782,167 new restricted shares of the Company’s common stock at a subscription price of $0.03 per share.

(#7) One of the directors of Federal Capital Investment Limited, Mr.

Wu Ming Ding, has resigned as director of the Company effective on February 20, 2016.

The advances are related to ordinary business transactions and bear no interest or collateral, repayable and renewable under normal business advancement terms.

On June 9, 2021, the Company entered into a Settlement of Debt Agreement (the “Debt Settlement Agreement”) with Federal Capital Investment Limited, to convert a total of USD 142,000 of the Company’s accounts payable to the creditor as of December 31, 2020 into equity by means of a subscription for 4,733,333 new restricted shares of the Company’s common stock at a subscription price of $0.03 per share.

(#8) One of the directors of Yorkshire Capital Limited, Mr.

Lai Kui Shing, Andy, has resigned as director of CSB effective on February 17, 2016.

The advances are related to ordinary business transactions and bear no interest or collateral, repayable and renewable under normal business advancement terms.

On June 9, 2021, the Company entered into a Settlement of Debt Agreement (the “Debt Settlement Agreement”) with its creditor Yorkshire Capital Limited, to convert a total of USD 27,000 of the Company’s accounts payable to the creditor as of December 31, 2020 into equity by means of a subscription for 900,000 new restricted shares of the Company’s common stock at a subscription price of $0.03 per share.

Principal Accounting Fees and Services.

25 unchanged sentences

By-Laws of Registrant (2)

Supplementary variation to the agreement between Borneo Energy Sdn.

and Gold Billion Global Ltd., dated August 6, 2021

Supplementary variation to the agreement between Hermalisa Binti Mohamad Tahir and Bio Resources Ltd., dated June 30, 2021

Supplementary variation to the agreement between Lamax Gold Ltd and Gold Billion Global Ltd., dated June 30, 2021

Supplementary variation to the agreement between Segama Ventures Sdn.

and Gold Billion Global Ltd., dated September 8, 2021

Supplementary agreement to vary the completion date of the share sale agreement of Bio Resources Ltd., dated November 11, 2021

Code of Ethics (3)

20 unchanged sentences

VERDE RESOURCES, INC.

October 22, 2020

November 12, 2021

/s/ Balakrishnan B S Muthu

2 unchanged sentences

(Principal Executive Officer)

November 12, 2021

/s/ Chen Ching

November 12, 2021

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.

October 22, 2020

November 12, 2021

/s/ Balakrishnan B S Muthu

2 unchanged sentences

(Principal Executive Officer)

October 22, 2020

November 12, 2021

/s/ Balakrishnan B S Muthu

4 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures