What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-12-28 compared with 2021-05-21 · 106 added, 52 removed, 111 unchanged (59% of the section changed)

5 unchanged sentences

Our actual results may differ significantly from those projected in the forward-looking statements.

Factors that might cause or contribute to such differences include, but are not limited to, those discussed herein as well as in the “Description of Business – Risk Factors” section in our Annual Report on Form 10-K, as filed on September 30, 2013.

You should carefully review the risks described in our Annual Report and in other documents we file from time to time with the Securities and Exchange Commission.

9 unchanged sentences

Under the terms of the Assignment Agreement, FMR assigned its management rights of CSB’s mining operation in the Mining Lease to the Company, through its wholly-owned subsidiary Gold Billion Global Limited (“GBL”), in exchange for 80,000,000 shares of the Company’s common stock, which constituted 95.26% of our issued and outstanding capital stock as of and immediately after the consummation of the acquisition.

GBL was established on February 7, 2013, by the Board of Directors of FMR to monitor the CSB operation.

GBL was formed on February 7, 2013, by the Board of Directors of FMR to monitor the CSB operation.

The acquisition of 100% of the issued and outstanding capital stock of GBL was agreed upon on October 18, 2013, and completed on October 25, 2013, subject to the approval of the Board of Directors and the audit of GBL.

3 unchanged sentences

On April 1, 2014, GBL purchased 85% equity interest of CSB, and CSB became indirect subsidiary of the Company.

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.

The Company also announced the Share Sale Agreement on May 12, 2021 for the acquisition of the entire issued and paid-up share capital of Bio Resources Limited with Taipan International Limited, an unrelated third party, The Wision Project Limited (formerly known as “Borneo Resources Limited”), an unrelated third party, and other individuals unrelated third parties, in consideration of issuance of 321,500,000 shares of the Company’s restricted common stock at $0.03 per share, valued at $9,645,000, and the issuance of promissory notes with two-year term period with a principal amount of $20,355,000.

321,500,000 shares were issued on May 12, 2021 and the promissory notes were issued on May 12, 2021.

The face value (principal) amount of $20,355,000 is repayable by May 12, 2023, and bearing zero coupon interest.

The promissory note is priced at $16,290,550 considering the current market interest rate.

This acquisition is currently in progress and the completion of the S&P Agreement is subject to all such acts necessary, including but not limited to auditing and due diligence exercise to ascertain the valuation of Bio Resources Limited.

On June 9, 2021, the Company entered into a Settlement of Debt Agreement (the “Debt Settlement Agreement”) with the Company’s creditors Beijing Changxin Wanlin Technology Co., Ltd, Federal Mining Resources Ltd, Federal Capital Investment Limited and Yorkshire Capital Limited (collectively the “Creditors”) to convert a total of USD 1,945,096 of the Company’s accounts payable to the Creditors into equity by increasing the share capital by means of a subscription for 64,836,533 new restricted shares of the Company’s common stock at a subscription price of $0.03 per share.

As set out in the Debt Settlement Agreements, the new restricted shares for settlement of the account payable to Beijing Changxin Wanlin Technology Co., Ltd, Federal Mining Resources Ltd and Federal Capital Investment Limited issued to their nominee Internet.com Ltd on June 9, 2021.

On June 11, 2021, GBL entered into a Sale and Purchase of Assets Agreement (the “SPA Agreement”) to purchase a factory site from a Malaysia company Segama Ventures Sdn Bhd (“Segaman Ventures”), an unrelated third party, in order to expand the Company’s biofraction plant in Malaysia.

Under the terms of the SPA Agreement, the acquisition is satisfied by cash payment of $1,600,000 in two instalments of $800,000 each, one payment upon signing the SPA Agreement, and the second payment within three (3) months from the date of the SPA Agreement.

A deposit of $800,000 was paid to Segaman Ventures on June 10, 2021.

This acquisition is currently in progress and 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 factory site.

The consideration shall be refundable if the transaction fails to complete.

On June 17, 2021, the Company through its prospective indirect subsidiary Bio Resources Limited (“BRL”), a company incorporated under the laws of the Labuan, entered into a Shares Sale Agreement with Hermalisa Binti Mohamad Tahir (“Hermalisa”), a company incorporated under the laws of the Malaysia, to acquire the entire issued and paid-up share capital of Global Renewables.

Under the terms of the Shares Sale Agreement, the consideration for the acquisition shall be satisfied in full by the payment of Malaysia Ringgit MYR 25,000 upon the execution of the Shares Sale Agreement.

The acquisition of Global Renewables was subject to the successful completion of the acquisition of the entire issued and paid-up share capital of BRL.

Therefore, the acquisition of Global Renewables will dependent upon the successful acquisition of BRL.

On June 18, 2021, GBL entered into a Shares Sale Agreement with Lamax Gold Limited (“LGL”), a company incorporated under the laws of the British Virgin Islands, in relation to acquisition of the remaining 15% of the issued and paid-up share capital of CSB.

Prior to this acquisition, GBL owned 85% equity in CSB.

Upon completion of the acquisition, GBL would own the entire issued and paid-up share capital of CSB.

Under the terms of the Shares Sale Agreement, the consideration for the acquisition shall be satisfied in full by the payment of Malaysia Ringgit MYR 150,000 ($36,130) upon the execution of the Shares Sale Agreement.

A deposit of MYR 150,000 ($36,130) was paid to LGL on June 21, 2021.

The consideration shall be refundable if the transaction fails to complete.

On August 10, 2021, the Company formed a wholly owned subsidiary, Verde Renewables, Inc., for the purpose of conducting business in Missouri (using palm waste to create biochar and related products).

Another entity, Verde Estates, LLC, was also formed on August 10, 2021 to own property in Missouri.

Verde Estates, LLC is a wholly owned branch of Verde Renewables, Inc.

Corporate History and Structure

1 unchanged sentence

was incorporated on April 22, 2010, in the State of Nevada, U.S.A.

The following persons were appointed to serve as directors and to assume the responsibilities of officers on October 17, 2013.

Wu Ming Ding, as President and Director;

Balakrishnan B S Muthu as Treasurer Chief Financial Officer, General Manager and Director;

Liang Wai Keen as Secretary.

Muthu were added to the Board of Directors.

On April 1, 2014, the Board of Directors of Gold Billion Global Limited (“GBL”) notified Federal Mining Resources Limited (“FMR”) upon the decision to exercise the right of option to purchase 85% equity interest of Champmark Sdn Bhd (“CSB”) under Management Agreement Section 3.2.4 dated July 1, 2013, between GBL and FMR.

1 unchanged sentence

Effective February 20, 2021, Mr.

Wu Ming Ding resigned all of his positions as President and Director of the Company, with Mr.

Balakrishnan B S Muthu being appointed President to fill the vacancy created.

Effective February 20, 2021, Mr.

Chen Ching was appointed Director of the Company and the entire Board of Directors now consists of Mr.

2 unchanged sentences

A copy of the Certificate of Amendment was filed with the Nevada Secretary of State.

The Form 8K announcing the increase of the authorized shares of the Company was filed with SEC on February 6, 2018.

Effective March 31, 2021, Mr.

4 unchanged sentences

The following diagram illustrates our current corporate structure:

According to ASC 810-05-08 A, CSB is a deemed subsidiary of GBL where GBL has control the Board of Directors of CSB, rights to receive future benefits and residual value, and obligation to absorb loss and finance for CSB.

According to ASC 810-05-08 A, CSB is a deemed subsidiary of GBL where GBL controls the Board of Directors of CSB, rights to receive future benefits and residual value, and obligation to absorb loss and finance for CSB.

GBL has the power to direct the activities of CSB that most significantly impact CSB’s economic performance and the obligation to absorb losses of CSB that could potentially be significant to the CSB or the right to receive benefits from CSB that could potentially be significant to CSB.

1 unchanged sentence

Under 810-23-42, 43, it is determined that CSB is de-facto agent of the principal GBL and so GBL will consolidate CSB from July 1, 2013.

On April 1, 2014, GBL purchased 85% equity interest of CSB, and CSB became indirect subsidiary of the Company.

Prior to this acquisition, GBL owned 85% equity in CSB.

Upon completion of the acquisition, GBL would own the entire issued and paid-up share capital of CSB.

Under the terms of the Shares Sale Agreement, the consideration for the acquisition shall be satisfied in full by the payment of Malaysia Ringgit MYR 150,000 upon the execution of the Shares Sale Agreement.

A deposit of MYR 150,000 ($36,130) was paid to LGL on June 21, 2021.

The consideration shall be refundable if the transaction fails to complete.

On August 10, 2021, the Company formed a wholly owned subsidiary, Verde Renewables, Inc., for the purpose of conducting business in Missouri (using palm waste to create biochar and related products).

Another entity, Verde Estates, LLC, was also formed on August 10, 2021 to own property in Missouri.

Verde Estates, LLC is a wholly owned branch of Verde Renewables, Inc.

Contractual Arrangements

7 unchanged sentences

final right for the appointment of members to the Board of Directors and the management team of CSB;

act as principal of CSB;

obligation to provide financial support to CSB;

option to purchase an equity interest in CSB;

entitlement to future benefits and residual value of CSB;

right to impose no dividend policy;

to act as principal of CSB;

an obligation to provide financial support to CSB;

an option to purchase an equity interest in CSB;

an entitlement to future benefits and residual value of CSB;

a right to impose no dividend policy;

human resources management.

3 unchanged sentences

On April 1, 2014, GBL purchased 85% equity interest of CSB, and CSB became indirect subsidiary of the Company.

On June 18, 2021, GBL entered into a Shares Sale Agreement to acquire the remaining 15% of the issued and paid-up share capital of CSB.

GBL would own the entire issued and paid-up share capital of CSB upon completion of the acquisition.

Stage of Operation

1 unchanged sentence

The Company is undertaking natural mineral resource extraction management services.

The Company has negotiated with Malaysia state agency PKNP on a 2-year lease for a new mining location that is about 5 km from the current Merapoh mine site.

For the period between January 2020 to December 2020, there was no production at the Merapoh Gold Mine.

The Company is in the process of negotiating with Malaysia state agency PKNP on a 2-year lease for a new mining location that is about 5 km from the current Merapoh mine site.

For the period between July 2020 to June 2021, there was no production at the Merapoh Gold Mine.

The objective of the Company is to improve the productivity at the new mine to ensure that the operation will be carried out effectively and efficiently at minimum cost.

7 unchanged sentences

In July 2013, production was outsourced to a reputable subcontractor, and developed a resource management system to match ore against processes to achieve the most cost efficient and highest recovery production procedure.

There was no gold ore extraction of the Merapoh Gold Mine and no gold concentrate sold for the period between January 1, 2020 and December 31, 2020.

Our revenues have been derived from gold production from the Merapoh Gold Mine, but currently there is no production from that mine and we are not certain that there will be production in the coming future.

Management continues to search for mining opportunities to generate revenues for the Company in the future.

There was no gold ore extraction of the Merapoh Gold Mine and no gold concentrate sold for the three months ended September 30, 2021.

We have generated other income from the sales of wash sand to customers in Malaysia.

Our revenues have been derived from gold production from the Merapoh Gold Mine, but currently there is no production from that mine and we are not certain there will be production in the future.

We have generated other revenues through seeking new customers of wash sand sales during January to September 2021.

Management continues to search for mining opportunities to generate revenues in the future.

Results of Operations

For the three months ended March 31, 202 1 and 20 20 :

We have generated $14,326 and $0 revenues for the three months ended March 31, 2021 and 2020, and have recorded a gross profit of $14,326 and gross profit of $0 for the three months ended March 31, 2021 and 2020.

We have incurred $81,605 and $96,858 in operating expenses through March 31, 2021 and March 31, 2020.

We have other income $0 and $0 for the three months ended March 31, 2021 and 2020.

The following table provides selected financial data about our company for the three months ended March 31, 2021 and March 31, 2020.

Statement of Operation

Cost of revenue

Gross Profit (Loss)

Operating Expenses

For the nine months ended March 31, 202 1 and 20 20 :

We have generated $14,326 and $0 revenues for the nine months ended March 31, 2021 and 2020, and have recorded a gross profit of $14,326 and gross profit of $0 for the nine months ended March 31, 2021 and 2020.

We have incurred $180,398 and $276,904 in operating expenses through March 31, 2021 and March 31, 2020.

We have other income $0 and $0 for the nine months ended March 31, 2021 and 2020.

The following table provides selected financial data about our company for the nine months ended March 31, 2021 and March 31, 2020.

For the three months ended September 30, 2021 and 2020:

We have generated $0 and $0 revenues for the three months ended September 30, 2021 and 2020, and have recorded a gross loss of $0 and $0 for the three months ended September 30, 2021 and 2020.

We have incurred $363,996 and $64,280 in operating expenses through September 30, 2021 and 2020.

We have interest expense of $470,766 and $0 for the three months ended September 30, 2021 and 2020.

We have other income, net $12,090 and $0 for the three months ended September 30, 2021 and 2020.

The following table provides selected financial data about our Company for the three months ended September 30, 2021 and September 30, 2020.

Statement of Operation

2 unchanged sentences

Operating Expenses

The revenue was derived from the sales of wash sand to customers in Malaysia.

The increase of revenue for the three months period ended March 31, 2021, was mainly due to seeking new customer of wash sand sales during the three months period.

Operating expenses comprised mainly of salaries, office costs, legal and professional fees and travelling expenses.

The decrease in operating expenses for the three months period was mainly due to the decrease of salaries during the period.

The revenue derived from the sales of wash sand to customers in Malaysia.

The increase of revenue for the nine months period ended March 31, 2021, was mainly due to seeking new customer of wash sand sales during the last three months period.

Operating expenses comprised mainly of salaries, office costs, legal and professional fees, consultancy service fee, stock-based compensation and travelling expenses.

The operating expenses were mainly denominated in MYR and decrease compared with nine months period ended March 31, 2021.

Moreover, the average rate of MYR :USD for nine months March 31, 2021 and March 31, 2020 was 0.2430 and 0.2395 respectively.

Interest expense

Other Income, net

The revenue is normally derived from the sales of gold mineral to customers in Malaysia.

There was no revenue for the three months ended September 30, 2021 and 2020 because of the depletion of mineral reserves in the mine.

Operating expenses comprised mainly of salaries, office costs, legal and professional fees.

The increase in operating expenses for the period was mainly due to the increase of legal and professional fees during the period.

Net other income comprises mainly of the sale of wash sand.

The increase in net other income for the period was mainly due the sale of wash sand which occurred during the three months ended September 30, 2021.

The average rate of MYR :

USD for three months ended September 30, 2021 and September 30, 2020 was 0.2388 and 0.2389 respectively.

Plan of Operation

6 unchanged sentences

BOG has the experience and local knowledge in managing the exploitation of alluvial gold at the Merapoh Gold Mine.

The Company currently intends to continue to outsource the exploitation of alluvial gold at our mine site to BOG as our third party subcontractor.

The Company will provide necessary disclosure when any significant agreements have been made with sub-contractors in the future.

1 unchanged sentence

Expansion Plans

The Company has negotiated with Malaysia state agency PKNP on a 2-year lease for a new mining location that is about 5 km from the current Merapoh mine site.

The leasing premium has been paid but the mining lease certificate will only be issued upon clearance from the Malaysia Forest Department, which is expected around mid-2021 subject to review on COVID-19 “Movement Control Order” by the Malaysian government.

The Company is in the process of negotiating with Malaysia state agency PKNP on a 2-year lease for a new mining location that is about 5 km from the current Merapoh mine site.

The leasing premium has been paid but the mining lease certificate will only be issued upon clearance from the Malaysia Forest Department, which is expected in early 2022 subject to review on COVID-19 “Movement Control Order” by the Malaysian government.

For the current Site IV-1 of the Merapoh Gold Mine, our mining operation would focus on mining other resources such as limestones.

The Company believes that there are excellent growth opportunities for its business outside Malaysia.

3 unchanged sentences

Apart from the mining industry, the Company is taking steps to look into investment opportunities in the non-mining areas that include the bioenergy industry and the food & beverage sector.

The Company is diversifying into the green industry with its acquisition of Bio Resources Ltd (“BRL”), the beneficial and/or registered proprietor of the intellectual property known as “Catalytic Biofraction Process”, which is a slow pyrolysis process using a proprietary catalyst to depolymerise palm biomass wastes (empty fruit bunches or palm kernel shells) in temperature range of 350 degC to 500 degC to yield commercially valuable bio products:

bio-oil, wood vinegar (pyroligneous acid), biochar and bio-syngas.

The intellectual property is a second-generation pyrolysis process where non-food feedstock like the palm biomass wastes is used as feedstock.

The success of venturing into the green industry is dependent on the completion of the acquisition subject to auditing and due diligence exercise to ascertain the valuation of BRL.

Apart from the green industry, the Company is also working on a partnership with MRX Technologies, a market leader in commercial extraction systems for cannabis and hemp.

The partnership includes an agreement for Verde Resources to white-label THC-free CBD products from MRX Technologies.

Limited Operating History;

7 unchanged sentences

Liquidity and Capital Resources

The following table provides selected cash flow data about our company for the nine months ended March 31, 2021 and March 31, 2020.

The following table provides selected cash flow data about our company for the three months ended September 30, 2021 and 2020.

Cash Flow Date

3 unchanged sentences

Net Cash Generated/(Used) from financing activities

Effect of exchange rate changes on cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

For the nine months ended March 31, 2021, the Company had incurred net loss from operation of $166,072, which posted a negative impact to the company’s cash flow.

The reconciliation on non-cash items such as depreciation and amortization provide positive impact on cash.

In the operation analysis, the net cash used in operating activities decreased from $319,588 to $116,928.

The $166,072 net loss was partially offset by the noncash expense such as $9,417 in depreciation and amortisation.

In the operating assets and liabilities, the net increase in current assets, such as trade receivables was $14,326, whereas the net increase in current liabilities, such as accounts payable, accrued liabilities and advanced from related parties was $54,053, which provided positive cash flow effect to the $166,072 loss in operation.

The final result of the cash flow from operating activities was a negative cash flow effect.

In the investing and financing cash flow analysis, there was no change for the nine months ended March 31, 2021.

Besides, the net increase in exchange rate effect of $120,530 provided a positive cash flow effect.

The cash and cash equivalents at the end of March 31, 2021, was increased by $3,602 with $27,629 as a closing balance.

Effect of exchange rate fluctuation on cash and cash equivalents

Net increase in cash and cash equivalents

Cash and cash equivalents, beginning of period

Cash and cash equivalents, ending of period

For the three months ended September 30, 2021, the Company had incurred net loss from operation of $806,515 which posted a negative impact to the company’s cash flow.

The reconciliation on non-cash items such as interest expenses, depreciation and amortization provides positive impact on cash.

In the operation analysis, the net cash used in operating activities increased from $12,047 to $244,814.

The operation loss of $822,672 was partially offset by the noncash expenses such as $1,086 in depreciation, $7,776 in amortization and $470,766 in interest expenses on promissory notes.

In the operating assets and liabilities, the net increase in current assets resulted from an increase of other receivables at $2,955 and a decrease of deposits and prepayments of $3,042 whereas the net increase in current liabilities resulted from $2,015 increase of accrued liabilities and accounts payable.

The final result of the cash flow used in operating activities was $244,814 negative cash flow effect.

The net cash used by investing activities of $79,518 resulted from advances to related parties for the three months ended September 30, 2021.

In the financing analysis, there was also no change for the three months ended September 30, 2021.

Despite the net decrease in exchange rate effect of $5,805 provided a positive cash flow effect, the overall cash and cash equivalents at the end of September 30, 2021, was decreased by $318,527 with $1,799,095 as the closing balance.

The cash flow situation will not allow for operations in the coming next 12 months by self-generated cash provided from operating activities.

8 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-Q

Item 2. Management’s Discussion and Analysis