What changed in this filing

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Item 1. Financial Statements

2022-06-30 compared with 2022-02-22 · 365 added, 392 removed, 413 unchanged (65% of the section changed)

2 unchanged sentences

In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature.

Operating results for the six months ended December 31, 2021 are not necessarily indicative of the results that can be expected for the year ended June 30, 2022.

Operating results for the six months ended March 31, 2022 are not necessarily indicative of the results that can be expected for the year endingJune 30, 2022.

VERDE RESOURCES, INC.

INDEX TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD OF ENDED DECEMBER 31, 2021

Condensed Consolidated Balance Sheets as at December 31, 2021 (Unaudited) and June 30, 2021

Condensed Consolidated Statements of Operations and Comprehensive Income for the Three and Six Months Ended December 31, 2021 and 2020 (Unaudited)

Condensed Consolidated Statements of Cash Flows for the Six Months Ended December 31, 2021 and 2020 (Unaudited)

Condensed Consolidated Statements of Changes in Equity for the Three and Six Months Ended December 31, 2021 and 2020 (Unaudited)

INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD OF ENDED MARCH 31, 2022

Condensed Consolidated Balance Sheets as at March 31, 2022 (Unaudited) and June 30, 2021

Condensed Consolidated Statements of Operations and Comprehensive Income for the Three and Nine Months Ended March 31, 2022 and 2021 (Unaudited)

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended March 31, 2022 and 2021 (Unaudited)

Condensed Consolidated Statements of Changes in Equity for the Three and Nine Months Ended March 31, 2022 and 2021 (Unaudited)

Notes to Condensed Consolidated Financial Statements (Unaudited)

6 unchanged sentences

Advanced to related party

Other deposit & prepayment

Other deposits & prepayments

Trade receivables

Total Current Assets

Long Term Assets

Non-current Assets

Property, plant and equipment

Right of use assets

Mining rights

Security deposit

Deposit paid for acquisition of subsidiaries

Deposit paid for acquisition of property, plant and equipment

Total Long Term Assets

Total Non-current Assets

LIABILITIES AND STOCKHOLDERS’ DEFICIT

2 unchanged sentences

Advanced from related parties

Hire purchase creditor

Accrual and other payables

Lease liabilities

Accrued liabilities and other payables

Total Current Liabilities

Long term Liabilities

Hire purchase creditors

Lease liabilities

Promissory notes

1 unchanged sentence

TOTAL LIABILITIES

STOCKHOLDERS’ DEFICIT

STOCKHOLDERS’ EQUITY

Preferred stock, par value $ 0.001 , 50,000,000 shares authorized, none issued and outstanding

Common stock, par value $ 0.001 , 10,000,000,000 shares authorized, 810,742,109 and 779,742,109 shares issued and outstanding as of December 31, 2021 & June 30, 2021 respectively

Common stock, par value $ 0.001 , 10,000,000,000 shares authorized, 810,742,109 and 779,742,109 shares issued and outstanding as of March 31, 2022 and June 30, 2021, respectively

Common stock, par value $0.001, 8,445,946 and 0 shares to be issued as of March 31, 2022 and June 30, 2021, respectively

Additional paid-in capital

3 unchanged sentences

Accumulated other comprehensive income (loss)

Non-controlled interest

Total Stockholders’ Deficit

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT

Stockholders’ equity to Verde Resources, Inc shareholders

Non-controlling interest

Total Stockholders’ Equity

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

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

3 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Revenues, net

Cost of revenue

1 unchanged sentence

Selling, general & administrative expenses

LOSS FROM OPERATIONS

( 1,221,875 )

LOSS FROM OPERATIONS

( 1,291,864 )

OTHER INCOME (EXPENSE)

Interest expenses

( 1,441,911 )

Total other income (expense), net

( 1,429,697 )

OTHER INCOME(EXPENSES)

NET LOSS BEFORE INCOME TAX

4 unchanged sentences

$ ( 2,721,561 )

Non-controlled interest

Net loss contributed to the group

$ ( 166,072 )

Other comprehensive income(loss)

Foreign currency translation income(loss)

$ ( 166,760 )

Comprehensive income(loss)

Net loss attributable to non-controlling interest

Net loss attributable to Verde Resources Inc., shareholders

( 1,079,555 )

( 2,728,540 )

Other comprehensive income (loss)

Foreign currency translation income (loss)

Other comprehensive loss attributable to non-controlling interest

Other comprehensive income (loss) attributable to Verde Resources, Inc.

Comprehensive (loss) income

$ ( 1,067,905 )

$ ( 2,713,319 )

Other comprehensive (gain) loss attributable to non-controlling interest

Other comprehensive income (loss) attributable to Verde Resources, Inc.

$ ( 244,548 )

Basic and Diluted Profit (Loss) per Common Share

Weighted Average Number of Common Shares Outstanding

Net loss per share

Weighted average number of shares outstanding

*Less than $0.01 per share

3 unchanged sentences

(In US$ except for number of shares)

Nine Months Ended

Cash flows from operating activities:

Net profit (loss)

$ ( 2,721,561 )

Adjustments to reconcile loss to net cash used in operation

Interest expenses

$ ( 166,072 )

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

Stock-based compensation

Finance cost interest element of promissory notes

Changes in operating assets and liabilities:

(Increase) decrease in:

Other receivables

Accounts receivables

Other deposits and prepayment

Increase (decrease) in:

Right of use assets

Accounts payable

Accrued liabilities and other payables

Advanced from sub-contractor & related parties

Net cash used in operating activities

( 1,097,381 )

Cash flows from investing activities:

Advanced to related party

Payments of deposit paid for property, plant and equipment

Deposit paid for property, plant and equipment

Purchase of property, plant and equipment

1 unchanged sentence

Cash flows from financing activities:

Repayments to hire purchase creditor

Net cash used in financing activities

Net increase (decrease) in cash and cash equivalent

Repayments to lease liabilities

Advanced from related parties

Advanced to related party

Proceeds from common shares and additional paid in capital

Net cash provided by financing activities

Net decrease in cash and cash equivalent

Effect of exchange rate changes on cash

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of year

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents at beginning of year/ period

Cash and cash equivalents at end of year/ period

2 unchanged sentences

Interest paid

Supplementary non-cash information

Deposit paid for acquisition of property, plant and equipment (note 7)

Purchase of property, plant and equipment under finance lease

Increase in finance lease liabilities

The accompanying notes are an integral part of these condensed financial statements.

1 unchanged sentence

Statement of Changes in Stockholders’ Equity (Deficit)

Six months ended December 31, 2021 and 2020 (Unaudited)

Nine months ended March 31, 2022 and 2021 (Unaudited)

(In US$ except for number of shares)

2 unchanged sentences

Non-Controlling

Balance - Ju ne 30, 2020

Balance - June 30, 2020

$ ( 5,138,406 )

3 unchanged sentences

Foreign currency translation gain

Balance - December 31, 2020

Balance – March 31, 2021

$ ( 5,296,220 )

6 unchanged sentences

Stock-based compensation

Shares to be issued

Net loss for the period

2 unchanged sentences

Foreign currency translation loss

Balance – December 31, 2021

$ ( 7,562,240 )

Accretion of interest

Balance – March 31, 2022

$ ( 9,327,647 )

1 unchanged sentence

Statement of Changes in Stockholders’ Equity (Deficit)

Three months ended December 31, 2021 and 2020

Three months ended March 31, 2022 and 2021

(In US$ except for number of shares)

3 unchanged sentences

Income (Loss)

Balance - September 30, 2020

Balance - December 31, 2020

$ ( 5,230,212 )

3 unchanged sentences

Foreign currency translation loss

Balance - December 31, 2020

Balance – March 31, 2021

$ ( 5,296,220 )

1 unchanged sentence

$ ( 2,545,824 )

Balance - September 30, 2021

Balance – December 31, 2021

$ ( 7,562,240 )

1 unchanged sentence

Shares issued for share-based compensation

Shares to be issued

Net loss for the period

Foreign currency translation loss

Balance – December 31, 2021

( 1,079,555 )

( 1,055,641 )

Foreign currency translation loss

Accretion of interest

Balance – March 31, 2022

$ ( 9,327,647 )

Verde Resources, Inc.

Notes to Condensed Consolidated Financial Statements

For the three and six months ended December 31, 2020 and 2021

For the three and nine months ended March 31, 2021 and 2022

(In US$ except for number of shares)

2 unchanged sentences

(the “Company” or “VRDR”) was incorporated on April 22, 2010, in the State of Nevada, U.S.A..

The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America, and the Company’s fiscal year end is June 30.

Gold Billion Global Limited (“Gold Billion” or “GBL”) was incorporated in British Virgin Islands on February 7, 2013.

GBL was setup by the Board of Directors of Federal Mining Resources Limited (“FMR”).

The major operation of GBL is to manage and monitor the mineral exploration and mining projects of FMR.

On July 1, 2013, FMR has assigned its rights and obligation on Champmark Sdn Bhd (“CSB”) to GBL.

Four of the five members of CSB Board of Directors were appointed by FMR, with two of the GBL Board of Directors currently sitting on the CSB Board.

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

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.

GBL is the primary beneficiary of CSB because it has been assigned with all relevant rights and obligation and can direct the activities of CSB through the common directors and the 85 % shareholder, FMR.

Under 810-23-42, 43, it is determined that CSB is de-facto agent of GBL and GBL is the de-facto principal of CSB.

GBL started to consolidate CSB from July 1, 2013 and the Company consolidated GBL and CSB from October 25, 2013 onwards.

On February 17, 2014, the Company entered into a Supplementary Agreement to the Assignment Agreement and completed an acquisition of GBL pursuant to the Supplementary Agreement.

The acquisition was a reverse acquisition in accordance with ASC 805-40 “Reverse Acquisitions”.

Pursuant to an Assignment Agreement For The Assignment of Management Right in Merapoh Gold Mines in Malaysia (“Assignment Agreement”) dated October 25, 2013, and a Supplementary Agreement dated February 17, 2014 on further clarifications to the Assignment Agreement signed by Verde Resources, Inc.

(“VRDR”) with Federal Mining Resources Limited (“FMR”), a company incorporated under the laws of the British Virgin Islands, the 100% interest of FMR in Gold Billion Global Limited (“GBL”) was transferred to VRDR at a consideration of $1.

This transaction was recorded as a reverse acquisition in accordance with ASC 805-40 “Reverse Acquisitions”.

The legal parent was VRDR, which was the accounting acquiree, while GBL was the accounting acquirer.

There was a 15% non-controlling interest of Champmark SDN BHD (“CSB”) after the acquisition.

There was a 15% non-controlling interest of CSB after the acquisition.

This transaction was accounted for as a recapitalization effected by a share exchange, wherein GBL with its 85% deemed subsidiary CSB was considered the acquirer for accounting and financial reporting purposes.

The assets and liabilities of the acquired entity have been brought forward at their book value and no goodwill has been recognized.

As a result of the acquisition, the Company holds 100 % equity interest in GBL and 85 % variable interest in CSB.

Our consolidated subsidiaries include GBL being our wholly-owned subsidiary and 85% of CSB being a variable interest entity (VIE) and deemed subsidiary of GBL.

On March 17, 2014, the Company through GBL and its deemed subsidiary CSB entered into a Sub-Contract Agreement with Borneo Oil & Gas Corporation Sdn Bhd (“BOG”) for the engagement of its sub-contractor services to carry out exploration and exploitation works on alluvial and lode gold resources at Site IV-1 of the Merapoh Mine.

Prior to the acquisition of GBL, on July 1, 2013, FMR had assigned its rights and obligations pursuant to its 85 % interest in Champmark Sdn Bhd (“CSB”) to GBL.

According to ASC 810-05-08 A, CSB is a deemed subsidiary of GBL because due to the assignment, GBL had gained control of the Board of Directors of CSB, GBL's rights to receive future benefits and residual value, and GBL's obligation to absorb losses and provide financing for CSB.

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

Accordingly, GBL was the primary beneficiary of CSB.

Under 810-23-42, 43, it was determined that CSB was de-facto agent and GBL, the principal, and consequently, CSB was considered as a deemed subsidiary of GBL beginning July 1, 2013.

Furthermore, under the terms of the Assignment Agreement, FMR will assign its management rights of CSB’s mining operation in the Mining Lease to GBL in exchange for 80,000,000 shares of the Company’s common stock.

CSB is the Mining Contractor of the Mining Lease for Site IV-1 at the Merapoh Gold Mine under the Contract for Work with MMC Corporation Berhad, the Permit Holder of the Mining Lease.

With the above transactions, GBL became a wholly-owned subsidiary of the Company and CSB, its 85% deemed indirect subsidiary.

On March 17, 2014, the Company through GBL and its subsidiary CSB entered into a Sub-Contract Agreement with Borneo Oil & Gas Corporation Sdn Bhd (“BOG”) for the engagement of its sub-contractor services to carry out exploration and exploitation works on alluvial and lode gold resources at Site IV-1 of the Merapoh Mine.

The Sub-Contract Agreement is for a period of 5 years with a renewal for another 5 years subject to review by both parties.

1 unchanged sentence

BOG being a local company in Malaysia provides the Company with the advantage of local knowledge and well-established connection in dealing with the relevant local authorities in our mining operations.

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

Effective February 2, 2018, the Company’s Articles of Incorporation were amended to increase the authorized shares of the Company from 250,000,000 shares of common stock to 10,000,000,000 shares of common stock.

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

On April 1, 2014, the Board of Directors of GBL notified FMR of GBL's decision to exercise its option to purchase an 85 % equity interest of CSB under Section 3.2.4 of the Management Agreement dated July 1, 2013 between GBL and FMR.

This acquisition was completed on April 1, 2014 with consideration of $ 1 .

GBL then became 85 % shareholder of CSB.

Effective February 20, 2016 Mr.

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

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

Balakrishnan B S Muthu and Mr.

The SC 14F1 and Form 8-K announcing the change in officers and directors were filed with SEC on February 10, 2016 and February 22, 2016 respectively.

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

Effective March 31, 2021, Mr.

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

Craven was appointed as a Director of the Company and the entire Board of Directors consisted of Mr.

Balakrishnan B S Muthu, Mr.

1 unchanged sentence

The Form 8-K announcing the change in officers and directors were filed with SEC on April 1, 2021.

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 propertylicense in Sabah, Malaysia from Borneo Energy SdnBhd, in consideration of issuance of 166,666,667 share of the Company’s stock at $ 0.03 per share, valued at $ 5,000,000 .

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 shares of the Company’s common 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.

1 unchanged sentence

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

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 from 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 .

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 from Taipan International Limited, an unrelated third party, The Wision Project Limited (formerly known as “Borneo Resources Limited”), an unrelated third party, and other unrelated third party individuals, in consideration of an issuance 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 face value (principal) amount of the promissory notes of $ 20,355,000 was repayable by May 12, 2023, and bearing zero coupon interest in accordance with the Share Sale Agreement.

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.

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

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 SdnBhd (“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 HermalisBintiMohmad Tahir (“Hermalis”), 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.

However, on January 20, 2022, the Company reached a mutual agreement to enter into a Supplement to Promissory Note with each of the 17 lenders (“Lenders”) of the promissory notes that were issued on May 12, 2021, to convert the total principal loan amount of $ 20,355,000 into shares of the Company’s restricted common stock priced at $ 0.0611 per share, which represents the last ninety (90) days’ volume weighted average price (VWAP) as of the market closing of January 19, 2022.

The Company and the Lenders further agreed that the actual date for the allotment and issue of new shares of the Company’s restricted common stock shall be confirmed in a subsequent written agreement.

The consideration, nevertheless, shall be refundable if the acquisition of Bio Resourced Limited fails to complete.

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 $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 were 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 (“Segama 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 installments of $ 800,000 each , one payment upon signing of 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 Segama Ventures on June 10, 2021.

On March 2, 2022, however, GBL entered into a Cancellation of Sale and Purchase of Assets Agreement (“Cancellation Agreement”) for the cancellation of the Sale and Purchase of Assets Agreement to purchase the factory site from Segama Ventures that was signed on June 11, 2021.

Simultaneously, on March 2, 2022, the Company, through GBL, entered into a Commercial Lease Agreement and Option to Purchase (“Lease Agreement”) for renting the factory site from Segama Ventures for a lease term of seven (7) years (“Lease Term”) at a monthly rental of MYR 36,000 ($8,571).

The rental for the entire Lease Term amounts to the sum of MYR 3,024,000 ($720,000) (the “Lease Payment”) which shall be paid in advance upon commencement of the Lease Agreement together with a payment of security deposit for the sum of MYR 336,000 ($80,000) (the “Security Payment”).

The refundable advance of $ 800,000 from the Cancellation Agreement above was utilized against the security deposit and payment of the advance rental.

The Lease Agreement also provides GBL with an exclusive right and option to purchase the factory site together with all its right title and interest for a consideration of MYR 8,000,000 ($1,904,762) (the “Purchase Price”) or subject to a valuation report on the factory site by a Malaysian registered property valuer at any time during the period of two years from the date of the Lease Agreement.

The Lease Payment and Security Payment shall be applied toward the Purchase Price upon GBL exercising the option to purchase.

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

Under the terms of the Shares Sale Agreement, the consideration for the acquisition shall be satisfied in full by the payment of MYR 25,000 ($6,000) upon the execution of the Shares Sale Agreement.

The acquisition of Global Renewables Sdn Bhd however, was cancelled on April 18, 2022.

Prior to this acquisition, GBL owned 85 % equity in CSB and with the completion of this transaction, CSB.

became a wholly owned subsidiary of GBL and indirectly of the Company.

Verde Renewables, Inc.

3 unchanged sentences

Verde Estates LLC (“VEL”) was incorporated on August 10, 2021, in the State of Missouri, U.S.A.

VEL is formed for the purpose of holding property in Missouri.

VEL was formed for the purpose of holding real property in Missouri.

VEL is wholly owned by VRI.

3 unchanged sentences

VLI is wholly owned by the Company.

On January 17, 2022, the Company formed a wholly owned subsidiary, Verde Resources (Malaysia) Sdn Bhd, a company incorporated under the laws of the Malaysia, for the purpose of conducting consultation services and distribution of renewable agricultural commodities.

On January 20, 2022, the Company has reached a mutual agreement to enter into a Supplement to Promissory Note with each of the 17 lenders (“Lenders”) of the promissory notes that were issued on May 12, 2021, to convert the total principal loan amount of $ 20,355,000 into shares of the Company’s restricted common stock priced at $ 0.0611 per share, which represents the last ninety (90) days’ volume weighted average price (VWAP) as of the market closing of January 19, 2022.

On January 17, 2022, the Company formed a wholly owned subsidiary, Verde Resources (Malaysia) Sdn Bhd (“Verde Malaysia”), a company incorporated under the laws of Malaysia, for the purpose of conducting consultation services and distribution of renewable agricultural commodities.

On February 10, 2022, the Company, through VEL, entered into a Commercial Lease Agreement and Option to Purchase (the “Lease Agreement”) to rent a 24-acre property in La Belle Missouri from Jon Neal Simmons and Betty Jo Simmon (the “Landlord”) to support carbon farming with biochar in Missouri.

Under the Lease Agreement, the term of the lease will be for a period of two ( 2 ) years and the Company will have the right to renew the lease with a total of three renewal periods with each term being two years.

The base rent is ten thousand dollars ($ 10,000 ) for the term, payable on the commencement of the Lease Agreement.

The Lease Agreement also grants the Company the exclusive right and option to purchase the premises together with all the right title and interest from the Landlord for a consideration of $ 490,000 at any time during the two years period of the lease term.

On March 23, 2022, the Company, through Verde Malaysia, entered into a Sale of Shares Agreement (“SSA”) with The Wision Project Sdn Bhd (“Wision”), a company incorporated under the laws of Malaysia, and its sole shareholder Jack Wong, to acquire the one hundred percent ( 100 %) of the issued and paid up ordinary shares in Wision from Mr.

Under the terms of the SSA, the consideration for the acquisition shall be satisfied by the payment of MYR 1 ($0.23) upon the execution of the SSA.

Wision is a digital development, marketing and consulting firm that provides public relations, branding, profile building, influencer marketing, event management and media relations services to the Company.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Condensed Consolidated Financial Statements

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted.

The results of operations for the periods ended December 31, 2021 are not necessarily indicative of the operating results for the full years.

Basis of Presentation

The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (GAAP).

These condensed consolidated financial statements are expressed in United States dollars ($).

Financial statements prepared in accordance with GAAP contemplate the realization of assets and the satisfaction of liabilities in the normal course of business.

These condensed consolidated audited financial statements include all adjustments that, in the opinion of management, are necessary in order to make the financial statements not misleading.

The accompanying unaudited condensed consolidated financial statements have been prepared by management in accordance with both accounting principles generally accepted in the United States (“GAAP”), and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.

Certain information and note disclosures normally included in audited financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.

In the opinion of management, the consolidated balance sheet as of June 30, 2021 which has been derived from audited financial statements and these unaudited condensed consolidated financial statements reflect all normal and recurring adjustments considered necessary to state fairly the results for the periods presented.

The results for the period ended March 31, 2022 are not necessarily indicative of the results to be expected for the entire fiscal year ending June 30, 2022 or for any future period.

These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Management’s Discussion and the audited financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended June 30, 2021, filed with the SEC on November 12, 2021.

Basis of Consolidation

The condensed consolidated financial statements include the financial statements of Verde Resources, Inc., its wholly owned subsidiary Gold Billion Global Limited (“GBL”) and the 85% of the deemed subsidiary variable interest of Champmark SDN BHD (“CSB”).

All inter-company balances and transactions between the Company and its subsidiary and variable interest entity (VIE) have been eliminated upon consolidation.

The Company has adopted ASC Topic 810-10-5-8, “Variable Interest Entities”, which requires a variable interest entity or VIE to be consolidated by a company if that company is subject to a majority of the risk of loss for the VIE or is entitled to receive a majority of the VIE’s residual returns.

Variable Interest Entity

On July 1, 2013, the Company’s subsidiary, GBL entered into a series of agreements (“VIE agreements”) with FMR and details of the VIE agreements are as follows :

Management Agreement, FMR entrusted the management rights of its subsidiary CSB to GBL that include:

management and administrative rights over the day-to-day business affairs of CSB and the mining operation at Site IV-1 of the Merapoh Gold Mine;

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;

human resources management.

Debt Assignment, FMR assigned to GBL the sum of money in the amount of US Dollars One Hundred Nine Thousand Eight Hundred One And Cents Seventy-Two Only (US$ 109,801.72), now due to GBL from CSB under the financing obligation from the FMR to CSB.

With the above agreements, GBL demonstrates its ability to control CSB as the primary beneficiary and the operating results of the VIE was included in the condensed consolidated financial statements.

On April 1, 2014, the Board of Director of GBL notified FMR upon the decision to exercise the right of option to purchase 85 % equity interest of CSB under Management Agreement Section 3.2.4 dated July 1, 2013 between GBL and FMR.

This acquisition was completed on April 1, 2014 with consideration of US$ 1 .

GBL then became 85 % shareholder of CSB and is required to consolidate CSB as a subsidiary.

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.

The condensed consolidated financial statements include the financial statements of Verde Resources, Inc.

and subsidiaries.

All inter-company balances and transactions between the Company and its subsidiaries have been eliminated upon consolidation.

Use of Estimates

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Cash and cash equivalents include cash in banks, money market funds, and certificates of term deposits with maturities of less than three months, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value.

The Company had $ 1,176,729 and $ 2,117,622 in cash and cash equivalents at December 31, 2021 and June 30, 2021, respectively.

The Company had $1,722,583 and $2,117,622 in cash and cash equivalents at March 31, 2022 and June 30, 2021, respectively.

At March 31, 2022 and June 30, 2021 cash and cash equivalents consisted of bank deposits in a Malaysian bank and petty cash on hands.

Concentrations of Credit Risk

8 unchanged sentences

The straight-line depreciation method is used to compute depreciation over the estimated useful lives of the assets with a 5% estimated residual values, as follows:

Long Term Assets

Land and buildings

Furniture, fixture and electronic equipment

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If accounts receivable are to be provided for, or written off, they would be recognized in the consolidated statement of operations within operating expenses.

At December 31, 2021 and June 30, 2021, the Company has no allowance for doubtful accounts, as per management’s judgment based on their best knowledge.

As of December 31, 2021 and June 30, 2021, the longest credit term for certain customers are 60 days.

Provision for Doubtful Accounts

The Company maintains an allowance for doubtful accounts to reserve for potentially uncollectible receivables and reviews accounts receivable by amounts due by customers which are past due to identify specific customers with known disputes or collectability issues.

In determining the amount of the reserve, the Company makes judgments about the creditworthiness of customers based on past collection experience and ongoing credit risk evaluations.

As of December 31, 2021 and June 30, 2021 there was no allowance for doubtful accounts.

At March 31, 2022 and June 30, 2021, the Company has no allowance for doubtful accounts, as per management’s judgment based on their best knowledge.

As of March 31, 2022 and June 30, 2021, the longest credit term for certain customers are 60 days.

Inventories are stated at the lower of cost or market value (net realizable value), cost being determined on a first-in-first-out method.

Costs include material, labor and overhead costs.

The Company provides inventory allowances based on excess and obsolete inventories determined principally by customer demand.

As of March 31, 2022 and June 30, 2021, the Company did not record an allowance for obsolete inventories, nor have there been any write-offs

ASC Topic 820 ”Fair Value Measurement and Disclosures” establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value.

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An asset group is the unit of accounting for long-lived assets to be held and used, which represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities.

The Company recognized no impairment of ROU assets as of December 31, 2021 and June 30, 2021.

The operating lease is included in operating lease right-of-use assets, operating lease liabilities-current and operating lease liabilities-non-current in the

consolidated balance sheets at December 31, 2021 and June 30, 2021.

The Company recognized no impairment of ROU assets as of March 31, 2022 and June 30, 2021.

The operating lease is included in operating lease right-of-use assets and operating lease liabilities as current and non-current liabilities in the consolidated balance sheets at March 31, 2022 and June 30, 2021.

Leases that transfer substantially all the rewards and risks of ownership to the lessee, other than legal title, are accounted for as finance leases.

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The Company’s functional currency is the Malaysian Ringgit (“MYR”) which is a functional currency as being the primary currency of the economic environment in which their operations are conducted.

In accordance with ASC Topic 830 ”Translation of Financial Statements” , capital accounts of the consolidated financial statements are translated into United States dollars from MYR at their historical exchange rates when the capital transactions occurred.

Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates.

The resulting exchange differences are recorded in the consolidated statement of operations.

For reporting purposes, in accordance with ASC Topic 830 ”Translation of Financial Statements” , capital accounts of the consolidated financial statements are translated into United States dollars from MYR at their historical exchange rates when the capital transactions occurred.

Assets and liabilities are translated at the exchange rates as of balance sheet date.

Income and expenditures are translated at the average exchange rate of the respective year.

The resulting exchange differences are recorded in the consolidated statement of operations.

Translation of amounts from RM into U.S.

The gains and losses resulting from translation of financial statements subsidiaries to the reporting currency are recorded as a separate component of accumulated other comprehensive income within the statements of changes in stockholder’s equity.

Translation of RM into U.S.

dollars has been made at the following exchange rates:

2 unchanged sentences

RM 4.1511 to 1

September 30, 2021

RM 4.1876 to 1

December 31, 2021

March 31, 2022

RM 4.2045 to 1

Statement of operations and cash flow items

For the six months ended December 31, 2020

For the nine months ended March 31, 2021

RM 4.1152 to 1

For the six months ended December 31, 2021

For the nine months ended March 31, 2022

RM 4.1845 to 1

8 unchanged sentences

Related Party

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions.

Parties are also considered to be related if they are subject to common control or significant influence, such as a family member or relative, shareholder, or a related corporation.

The Company follows the ASC 850-10, “Related Party Disclosures” for the identification of related parties and disclosure of related party transactions.

Pursuant to section 850-10-20 the related parties include a) affiliates of the Company;

b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of section 825–10–15, to be accounted for by the equity method by the investing entity;

c) trusts for the benefit of employees, such as pension and Income-sharing trusts that are managed by or under the trusteeship of management;

d) principal owners of the Company;

e) management of the Company;

f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests;

and g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

The consolidated financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business.

However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements.

The disclosures shall include:

a) the nature of the relationship(s) involved;

b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements;

c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period;

and d) amount due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

Non-controlling Interest

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The Company reports its non-controlling interest in subsidiaries as a separate component of equity in the Consolidated Balance Sheets and reports both net loss attributable to the non-controlling interest and net loss attributable to the Company’s common shareholders on the face of the Consolidated Statements of Operations.

The Company’s equity interest in CSB is 85.0 % and the non-controlling stockholder’s interest is 15 %.

This is reflected in the Consolidated Statements of Equity.

Mineral Acquisition and Exploration Costs

The Company has been primarily engaged in the acquisition, exploration, and development of mining properties.

The Company was no longer considered an exploration stage company after the reverse take-over with its subsidiary GBL.

Mineral property acquisition and exploration costs are expensed as incurred.

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Estimated future reclamation and site restoration costs, when the ultimate liability is reasonably determinable, are charged against earnings over the estimated remaining life of the related business operation, net of expected recoveries.

Commitments and contingencies

The Company follows the ASC 450-20, “Contingencies” to report accounting for contingencies.

Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur.

The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment.

In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements.

If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.

Management does not believe, based upon information available at this time that these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows.

However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.

Revenue Recognition

7 unchanged sentences

Revenues are recognized when control of the promised goods or services is transferred to the customers, which may occur at a point in time or over time depending on the terms and conditions of the agreement, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

The Company derives revenues primarily from the sales of gold mineral or other minerals to registered gold trading companies or other customers in Malaysia.

The Company generally recognizes its revenues in accordance with the following core principles:

at the time of gold or minerals sales, the contract with customers and the performance obligations are identified.

The transaction and selling price is determined by the prevailing market value of gold bullion quoted by the leading registered gold trading company in Malaysia or at an agreed price.

Sales invoice will be prepared to reflect the proper transaction price based on the performance obligation allocation.

After delivery is completed and the performance obligation is satisfied, sales invoice will be presented to the customers and so revenue is then recognized accordingly.

Product sales

5 unchanged sentences

These reserves are based on estimates of the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable as the amount is payable to the Company’s customer.

Revenue from the sales of gold mineral or other minerals to registered gold trading companies or other customers in Malaysia is recognized as revenue in accordance with the following core principles:

at the time of gold or minerals sales, the contract with customers and the performance obligations are identified.

The transaction and selling price is determined by the prevailing market value of gold bullion quoted by the leading registered gold trading company in Malaysia or at an agreed price.

Sales invoice will be prepared to reflect the proper transaction price based on the performance obligation allocation.

After delivery is completed and the performance obligation is satisfied, sales invoice will be presented to the customers and so revenue is then recognized accordingly.

The provision for income taxes is determined in accordance with the provisions of ASC Topic 740, ”Accounting for Income Taxes” (“ASC 740”).

5 unchanged sentences

Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.

As of December 31, 2021 and June 30, 2021, the Company did not have any significant unrecognized uncertain tax positions.

As of March 31, 2022 and June 30, 2021, the Company did not have any significant unrecognized uncertain tax positions.

Recent Accounting Pronouncements

Recently Adopted Accounting Standards

In December 2019, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes (“ASU 2019-12”).

ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions and enhances and simplifies various aspects of the income tax accounting guidance in ASC 740.

ASU 2019-12 was effective July 1, 2021.

The adoption of ASU 2019-12 did not have any impact on the Company’s consolidated financial statement presentation or disclosures.

In August 2020, the FASB issued ASU 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”).

ASU 2020-06 simplifies the accounting for convertible debt by eliminating the beneficial conversion and cash conversion accounting models.

Upon adoption of ASU 2020-06, convertible debt proceeds, unless issued with a substantial premium or an embedded conversion feature that is not clearly and closely related to the host contract, will no longer be allocated between debt and equity components.

This modification will reduce the issue discount and result in less non-cash interest expense in financial statements.

ASU 2020-06 also updates the earnings per share calculation and requires entities to assume share settlement when the convertible debt can be settled in cash or shares.

For contracts in an entity’s own equity, the type of contracts primarily affected by ASU 2020-06 are freestanding and embedded features that are accounted for as derivatives under the current guidance due to a failure to meet the settlement assessment by removing the requirements to (i) consider whether the contract would be settled in registered shares, (ii) consider whether collateral is required to be posted, and (iii) assess shareholder rights.

ASU 2020-06 is effective for fiscal years beginning after December 15, 2023.

Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, and only if adopted as of the beginning of such fiscal year.

The Company adopted ASU 2020-06 effective July 1, 2021.

The adoption of ASU 2020-06 did not have any impact on the Company’s consolidated financial statement presentation or disclosures.

Recently Issued But Not Yet Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU No.

2016-13, Financial Instruments-Credit Losses (Topic 326) (“ASU 2016-13”), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts.

ASU 2016-13 replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost.

ASU 2016-13 is to be adopted on a modified retrospective basis.

As a smaller reporting company, ASU 2016-13 will be effective for the Company for interim and annual reporting periods beginning after December 15, 2022.

The Company is currently evaluating the impact that the adoption of ASU 2016-13 will have on its consolidated financial statement presentations and disclosures.

In January 2017, the FASB issued ASU No.

2017-04, Intangibles – Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment (“ASU 2017-04”).

ASU 2017-04 eliminates Step 2 of the two-step goodwill impairment test, under which a goodwill impairment loss was measured by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill.

ASU 2017-04 requires only a one-step quantitative impairment test, whereby a goodwill impairment loss is measured as the excess of a reporting unit’s carrying amount over its fair value (not to exceed the total goodwill allocated to that reporting unit).

Adoption of the ASUs is on a modified retrospective basis.

As a smaller reporting company, the standard will be effective for the Company for interim and annual reporting periods beginning after December 15, 2022.

The Company is currently evaluating the impact that the adoption of ASU 2017-04 will have on its consolidated financial statement presentation or disclosures.

In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt — Modifications and Extinguishments (Subtopic 470-50), Compensation —Stock Compensation (Topic 718), and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40):

Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (“ASU 2021-04”).

ASU 2021-04 provides guidance as to how an issuer should account for a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option (i.e., a warrant) that remains classified after modification or exchange as an exchange of the original instrument for a new instrument.

An issuer should measure the effect of a modification or exchange as the difference between the fair value of the modified or exchanged warrant and the fair value of that warrant immediately before modification or exchange and then apply a recognition model that comprises four categories of transactions and the corresponding accounting treatment for each category (equity issuance, debt origination, debt modification, and modifications unrelated to equity issuance and debt origination or modification).

ASU 2021-04 is effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years.

An entity should apply the guidance provided in ASU 2021-04 prospectively to modifications or exchanges occurring on or after the effective date.

Early adoption is permitted for all entities, including adoption in an interim period.

If an entity elects to early adopt ASU 2021-04 in an interim period, the guidance should be applied as of the beginning of the fiscal year that includes that interim period.

The adoption of ASU 2021-04 is not expected to have any impact on the Company’s consolidated financial statement presentation or disclosures.

The Company’s management does not believe that any other recently issued, but not yet effective, authoritative guidance, if currently adopted, would have a material impact on the Company’s financial statement presentation or disclosures.

NOTE 3 - CASH AND CASH EQUIVALENT

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.

At December 31, 2021 and June 30, 2021 cash and cash equivalents consisted of bank deposits in Malaysia bank and petty cash on hands.

NOTE 4 –OTHER RECEIVABLE, AND ADVANCED TO RELATED PARTIES –

Other receivables

Other receivables at December 31, 2021 and June 30, 2021 consist of the following items:

Other receivable (#1)

allowance for doubtful debts

(#1) Other receivables were amounts due from Jusra Mining Merapoh Sdn Bhd, whose major shareholder Lamax Gold Limited holds 15 % of Champmark Sdn Bhd, for the sale of wash sand recognized as other income by the Company.

Advanced to related party

Advanced from related party at December 31, 2021 and June 30, 2021 consist of the following items:

Advanced to Global Renewable Sdn Bhd (#1) (note 1)

______________

(#1) Balakrishnan B.S.

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

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

NOTE 5 - OPERATING LEASE

As of December 31, 2021, the Company leases minings space under a non-cancelable operating lease, with terms of two years.

From time to time, new accounting pronouncements are issued by the Financial Accounting Standard Board (“FASB”) or other standard setting bodies and adopted by the Company as of the specified effective date.

Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption.

In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40), (“ASU 2021-04”).

This ASU reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange.

This ASU provides guidance for a modification or an exchange of a freestanding equity-classified written call option that is not within the scope of another Topic.

It specifically addresses:

(1) how an entity should treat a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange;

(2) how an entity should measure the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange;

and (3) how an entity should recognize the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange.

This ASU became effective for all entities for fiscal years beginning after December 15, 2021.

An entity should apply the amendments prospectively to modifications or exchanges occurring on or after the effective date of the amendments.

The adoption of ASU 2021-04 on July 1, 2022 is not expected to have a material impact on the Company’s financial statements or disclosures.

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and believes that the future adoption of any such pronouncements may not be expected to cause a material impact on its financial condition or the results of its operations.

NOTE 3 - GOING CONCERN AND LIQUIDITY CONSIDERATIONS

The accompanying condescend consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business.

As of March 31, 2022, the Company had suffered from recurring operating losses and recorded an accumulated deficit of $ 9,327,647 .

These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

The Company intends to fund operations through debt and equity financing arrangements.

The ability of the Company to survive is dependent upon, among other things, obtaining additional financing to continue operations, and development of its business plan.

In response to these problems, management intends to raise additional funds through public or private placement offerings, and related party loans.

No assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company.

Even if the Company is able to obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stockholders, in the case of equity financing.

In March 2020, the World Health Organization declared the outbreak of COVID-19 as a global pandemic, which continues to spread around the world.

There is significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the Malaysia’s and global economy.

While it is difficult to estimate the financial impact of COVID-19 on the Company’s operations, management believes that COVID-19 could have a material impact on its financial results at this time.

These condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets and liabilities that may result in the Company not being able to continue as a going concern.

NOTE 4 – MINING RIGHT

On June 14, 2021, a lump sum payment of RM260,500 ($ 62,260 ) was made upfront to rent under a non-cancellable operating lease, the mining space with lease period for 2 years up to June 13, 2023, and no ongoing payments will be made under the terms of these mining leases.

Lease expense for lease payment is recognized on a straight-line basis over the lease term.

On June 14 2021, a lump sum payment of RM260,500 ($ 62,260 ) was made upfront to rent the mining space with lease period for 2 years up to June 13, 2023, and no ongoing payments will be made under the terms of these mining leases.

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The table below presents the operating lease related assets and liabilities recorded on the balance sheets.

December 31 ,

Balance as at the beginning of period

Amortization charge for the year

Balance as at the 1 July 2021

Amortization charge for the period

Foreign exchange adjustment

Balance as of December 31, 2021

Amortization charge of rights of use lease assets was $15,585 and $nil for the six ended December 31, 2021 and 2020, respectively.

Amortization charge of rights of use lease assets was $7,809 and $nil for the three month ended December 31, 2021 and 2020, respectively.

Lease term and discount rate

Weighted-average remaining lease term - years

NOTE 6 – OTHER DEPOSIT & PREPAYMENT

Other deposit & prepayment as of December 31, 2021 and June 30, 2021 consisted of the following:

Prepayments to suppliers

Balance as of March 31, 2022

Amortization charge of rights of use lease assets was $ 23,345 and $ 0 for the nine months ended March 31, 2022 and 2021, respectively.

Amortization charge of rights of use lease assets was $ 8,150 and $ 0 for the three months ended March 31, 2022 and 2021, respectively.

NOTE 5 – RIGHT OF USE ASSET AND LEASE LIABILITIES

a) Lease liabilities

The lease liabilities for motor vehicle, include long term and short term liabilities and are summarized as follow:

Current finance lease liabilities

Non-current finance lease liabilities

The lease facilities do not impose any interest charge and the payables are summarized as follows:

Finance lease liabilities in the hire purchase loan

Finance lease liabilities to a hire purchase creditor

The imputed interest element within the contract has been assessed as not significant.

The scheduled maturities of the finance lease liabilities installment loans are as follows:

Total minimum finance lease liabilities installment payment

Imputed interest

Present value of net minimum lease payments (#)

(#) Minimum payment are reflected in the balance sheet as current and non-current obligations under finance lease liabilities as at March 31, 2022.

b) Right to use asset – Leasing of Segama Factory and La-Belle

Balance as at the 1 July 2021

Amortization charge for the period

Balance as of March 31, 2022

This leasing arrangement for the lease of the Segama factory amounting to $720,000 is for a lease term of seven (7) years and includes an exclusive right and option to purchase the factory site, together with all its right title and interest, for a consideration to be mutually agreed between the parties at any time during the period of two years from the date of the Lease Agreement.

The Lease Payment and Security Payment shall be applied toward the Purchase Price upon GBL exercising the option to purchase.

The Company’s lease agreements do not contain any material restrictive covenants.

On February 10, 2022, the Company, through VEL, a limited liability company incorporated in the State of Missouri, which is an indirect wholly-owned subsidiary of the Company via Verde Renewables, Inc., entered into a Commercial Lease Agreement and Option to Purchase (the “Lease Agreement”) to rent a 24-acre property in La Belle from Jon Neal Simmons and Betty Jo Simmon (the “Landlord”) in order to kickstart carbon farming with biochar in Missouri.

Under the Lease Agreement, the term of the lease will be for a period of two (2) years and the Company will have the right to renew the lease with a total of three renewal periods with each term being two years.

The monthly base rent is $ 10,000 for the term, was payable on the commencement of the Lease Agreement.

If the Company exercises the option to purchase the premises from the Landlord, the upfront lease payment may be utilized as part payment of the purchase consideration.

There are no corresponding lease liabilities recorded as the lease payments for the entire lease period has been paid upfront upon inception of the agreement.

NOTE 6 – OTHER DEPOSITS & PREPAYMENT

Other deposits & prepayment as of March 31, 2022 and June 30, 2021 consisted of the following:

Prepayment to suppliers

Prepaid operating expenses

NOTE 7 – DEPOSIT PAID FOR ACQUISITION OF SUBSIDIARIES AND PROPERTY, PLANT AND EQUIPMENT

At December 31, 2021 and June 30, 2021 deposit and prepayment consists of the following:

NOTE 7 – INVENTORIES

Inventories as of March 31, 2022 and June 30, 2021 consisted of the following:

NOTE 8 – SECURITY DEPOSIT, AND DEPOSITS PAID FOR ACQUISITION OF SUBSIDIARIES AND PROPERTY, PLANT AND EQUIPMENT

At March 31, 2022 and June 30, 2021, the deposits consist of the following:

Deposits paid for acquisition of subsidiaries

1 unchanged sentence

- Champmark Sdn Bhd (#2)

Deposits paid for acquisition of property, plant and equipment

Deposits paid for acquisition of Intellectual Property

- Intellectual property license (#3)

Other deposits

- Factory site (#4)

- Security deposit of property (#5)

(#1) The Company 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 from Taipan International Limited, an unrelated third party, The Wision Project Limited (formerly known as “Borneo Resources Limited”), an related 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 .

(#1) The Company 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 from Taipan International Limited, an unrelated third party, The Wision Project Limited (formerly known as “Borneo Resources Limited”), a unrelated third party, and other unrelated third party individuals, in consideration of the 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 face value (principal) amount of the promissory notes of $ 20,355,000 was convertible into shares by May 12, 2023 and bearing zero coupon interest in accordance with the Share Sale Agreement.

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

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

(#2) 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 ($35,843) upon the execution of the Shares Sale Agreement.

A deposit of MYR 150,000 ($ 35,843 ) was paid to LGL on June 21, 2021.

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

(#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 .

On January 20, 2022, however, the Company reached a mutual agreement to enter into a Supplement to Promissory Note with each of the 17 lenders (“Lenders”) of the promissory notes that were issued on May 12, 2021, to convert the total principal loan amount of $ 20,355,000 into shares of the Company’s restricted common stock priced at $ 0.0611 per share, which represents the last ninety (90) days’ volume weighted average price (VWAP) as of the market closing of January 19, 2022.

The consideration, nevertheless, shall be refundable if the acquisition of Bio Resources Limited fails to complete.

Prior to this acquisition, GBL owned 85 % equity in CSB and with the completion of this transaction, CSB became a wholly owned subsidiary of GBL and indirectly, of the Company.

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

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

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

(#4) 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.

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

(#5) On February 10, 2022, the Company, through VEL, a limited liability company incorporated in the State of Missouri, which is a wholly-owned subsidiary of the Company’s wholly-owned subsidiary, Verde Renewables, Inc., entered into a Commercial Lease Agreement and Option to Purchase (the “Lease Agreement”) to rent a 24-acre property in La Belle from Jon Neal Simmons and Betty Jo Simmon (the “Landlord”) in order to kickstart carbon farming with biochar in Missouri.

Under the Lease Agreement, the term of the lease will be for a period of two (2) years and the Company will have the right to renew the lease with a total of three renewal periods with each term being two years.

The base rent is ten thousand dollars ($ 10,000 ) for the term, payable on the commencement of the Lease Agreement.

The Lease Agreement also grants the Company the exclusive right and option to purchase the premises together with all the right title and interest from the Landlord for a consideration of four hundred ninety thousand dollar ($ 490,000 ) at any time during the two years period of the lease term.

The Company has paid to the Landlord a security deposit of the sum of two hundred forty thousand dollars ($ 240,000 ) prior to the execution of the Lease Agreement.

If the Company does not exercise the option to renew the lease or the option to purchase the premises from the Landlord, the security deposit shall be returned to the Company.

In November 1, 2021, the Company paid $240,000 to Landlord for the security deposit.

NOTE 8 – ACCOUNTS PAYABLE AND ADVANCED FROM RELATED PARITES

Accounts Payable

Accounts payable at December 31, 2021 and June 30, 2021 consist of the following items:

Other accounts payable

Advanced from related parties

Advanced from related parties at December 31, 2021 and June 30, 2021, consist of the following items:

(#4) On June 11, 2021, GBL entered into a Sale and Purchase of Assets Agreement (the “SPA Agreement”) to purchase a factory site from a Malaysian company Segama Ventures Sdn Bhd (“Segama 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, with one payment upon signing the SPA Agreement, and the second payment due within three (3) months from the date of the SPA Agreement.

A deposit of $ 800,000 was paid to Segama Ventures on June 10, 2021.On March 2, 2022, however, GBL entered into a Cancellation of Sale and Purchase of Assets Agreement (“Cancellation Agreement”) for the cancellation of the Sale and Purchase of Assets Agreement to purchase the factory site from Segama Ventures that was signed on June 11, 2021.

Simultaneously, on March 2, 2022, the Company, through GBL, entered into a Commercial Lease Agreement and Option to Purchase (“Lease Agreement”) for renting the factory site from Segama Ventures for a lease term of seven ( 7 ) years (“Lease Term”) at a monthly rental of MYR 36,000 ($8,571).

The refundable advance of $ 800,000 from the Cancellation Agreement above was utilized against the security deposit and payment of the advance rental.

NOTE 9 –ADVANCED FROM RELATED PARITES

Advanced from related parties at March 31, 2022 and June 30, 2021, consist of the following items:

Advanced from BOG (#1)

Advanced from Federal Capital Investment Limited (#2)

Amounts due from directors (#3)

______________

(#1) 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.

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

Wu Ming Ding, has resigned as director of the Company effective on February 20, 2021.

(#1) Borneo Oil and Gas Corporation SDN BHD (“BOG”) is a wholly owned subsidiary of Borneo Oil Berhad Group (“BOB”) (holding 19.23% and 19.96% of the Company’s issued and outstanding common stock as of March 31, 2022 and June 30, 2021, respectively).

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.

(#3) Carl Craven, a director of the Company, advanced $ 100 to the Company.

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

(#2) Pursuant to a Settlement of Debt Agreement (the “Debt Settlement Agreement”) entered into by the Company on June 9, 2021 with Federal Capital Investment Limited (“FCIL”), payables of $ 142,000 of the Company as of December 31, 2020 were converted 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.

Consequently, FCIL became a shareholder of the Company.

NOTE 10 – PROPERTY, PLANT AND EQUIPMENT

Property and equipment at December 31, 2021 and June 30, 2021 are summarized as follows:

Property, plant and equipment at March 31, 2022 and June 30, 2021 are summarized as follows:

Land and building

6 unchanged sentences

( 1,682,358 )

The depreciation expenses charged for the six months ended December 31, 2021 and 2020 was $ 5,220 and $ 86 .

The depreciation expenses charged for the three months ended December 31, 2021 and 2020 was $ 4,134 and $ 44 .

Included in property, plant and equipment, a motor vehicle was under finance leases with a carrying amount of $ 58,467 and nil as of December 31, 2021 and June 30, 2021, respectively.

The amount of related depreciation expenses related to assets under finance lease were $ 4,176 and nil for the six months ended of December 31, 2021 and 2020, respectively.

The amount of related depreciation expenses related to assets under finance leases were $ 3,132 and nil for the three months ended of December 31, 2021 and 2020, respectively.

NOTE 10 – FINANCE LEASE LIABILITIES

The loans from a hire purchase creditor include long term and short term and are summarized as follow:

Current finance lease liabilities

Non-current finance lease liabilities

A hire purchase installment loan with total amount $ 60,033 and nil as at December 31, 2021 and June 30, 2021 are $ 60,033 and nil net of interest charges equivalent to interest nil and nil are summarized as follows:

Finance lease liabilities in the hire purchase loan

Finance lease liabilities to a hire purchase creditor

The scheduled maturities of the finance lease liabilities installment loans are as follows:

Total minimum finance lease liabilities installment payment

Imputed interest

Present value of net minimum lease payments (#)

(#) Minimum payment reflected in the balance sheet as current and noncurrent obligations under finance lease liabilities as at December 31, 2021.

The depreciation expenses charged for the three months ended March 31, 2022 and 2021 was $ 4,611 and $ 129 .

The depreciation expenses charged for the nine months ended March 31, 2022 and 2021 was $ 9,831 and $ 129 .

Included in property, plant and equipment, is a motor vehicle purchased under finance lease arrangement with a carrying amount of $ 55,335 and $ 0 as of March 31, 2022 and June 30, 2021, respectively.

The amount of depreciation expenses related to assets purchased under finance lease arrangements were $ 7,308 and $ 0 for the nine months ended of March 31, 2022 and 2021, respectively and $ 3,132 and $ 0 for the three months ended of March 31, 2022 and 2021, respectively.

NOTE 11 - PROMISSORY NOTES

On May 10, 2021, the Company 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 from Taipan International Limited, an unrelated third party, The Wision Project Limited (formerly known as “Borneo Resources Limited”), an un-related 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 .

On May 10, 2021, the Company 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 from Taipan International Limited, an unrelated third party, The Wision Project Limited (formerly known as “Borneo Resources Limited”) and other unrelated third party individuals, for a consideration to be satisfied by way of the 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 .

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

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 face value (principal) amount of the promissory notes of $ 20,355,000 which was repayable by May 12, 2023 and bearing zero coupon interest were subsequently, on January 20, 2022 agreed to be converted, pursuant to a mutual agreement to enter into a Supplement to Promissory Note with each of the 17 lenders (“Lenders”) of the promissory notes that were issued on May 12, 2021, into shares of the Company’s restricted common stock priced at $ 0.0611 per share, which represents the last ninety (90) days’ volume weighted average price (VWAP) as of the market closing of January 19, 2022.

The consideration, nevertheless, shall be refundable if the acquisition of Bio Resources Limited fails to complete.

The fair value of the outstanding promissory notes was calculated with the following assumptions:

7 unchanged sentences

Balance at the end of period

The Company recorded $ 954,934 and $nil interest expense for the six months ended December 31, 2021 and 2020, respectively.

The Company recorded $ 484,168 and $nil interest expenses for the three months ended December 31, 2021 and 2020, respectively.

The Company recorded $ 486,978 and $ 0 interest expenses for the three months ended March 31, 2022 and 2021, respectively.

The Company recorded $ 1,441,911 and $ 0 interest expense for the nine months ended March 31, 2022 and 2021, respectively.

NOTE 12 – INCOME TAX

3 unchanged sentences

corporate income tax rate to 21 %, effective January 1, 2018.

No provision for income taxes in the United States has been made as the Company had no taxable income for the periods ended December 31, 2021 and 2020.

No provision for income taxes in the United States has been made as the Company had no taxable income for the periods ended March 31, 2022 and 2021.

GBL is a British Virgin Islands incorporated company and not required to pay income tax on corporate income.

CSB is a Malaysia incorporated company and required to pay corporate income tax at 24 % of taxable income.

VRI and VEL are a the State of Missouri, U.S.A incorporated company and required to pay United State Federal Income Tax at 21% of taxable income.

VLI is a the State of Oregon, U.S.A incorporated company and required to pay United State Federal Income Tax at 21% of taxable income.

VRI and VEL are incorporated in the State of Missouri, U.S.A and required to pay United State Federal Income Tax at 21 % of taxable income.

VLI is a U.S.A incorporated company in the State of Oregon and required to pay United State Federal Income Tax at 21 % of taxable income.

A reconciliation between the income tax computed at the relevant statutory rate and the Company’s provision for income tax is as follows:

Three months period ended

Loss before income taxes

Non-deductible items/non-taxable income

Tax effect of tax exempt entity

Share based payments

Changes in valuation allowances

Effect of different tax rate of subsidiaries operating in other jurisdictions

Effective tax rate

Six months period ended

Nine months period ended

Loss before income taxes

5 unchanged sentences

Effective tax rate

Summary of the Company’s net deferred tax liabilities and assets are as follows:

Summary of the Company’s net deferred tax assets are as follows:

Deferred tax assets:

Tax attribute carryforwards

Net operating loss

Valuation allowances

3 unchanged sentences

If in the future the Company believes that it is more likely than not that these deferred tax benefits will be realized, the majority of the valuation allowances will be recognized in the consolidated statement of operations.

The Company did not have any interest and penalty provided or recognized in the income statements for period December 31, 2021 and June 30, 2021 or balance sheet as of December 31, 2021 and June 30, 2021.

The Company did not have any interest and penalty provided or recognized in the income statements for nine month periods ended March 31, 2022 and March 31, 2021, or balance sheet as of March 31, 2022 and June 30, 2021.

The Company did not have uncertainty tax positions or events leading to uncertainty tax position within the next 12 months.

NOTE 13 – COMMITMENTS AND CONTINGENCIES

As of December 31, 2021, the Group had the following contracted capital commitments:

As of March 31, 2022, the Group had the following contracted capital commitments:

For purchase of property, plant and equipment

For acquisition of subsidiary

NOTE 14 – LOSS PER SHARE

The Company has adopted ASC Topic No.

The agreement for the purchase of property, plant and equipment for the purchase of factory site from Segama Ventures was cancelled on March 2, 2022 and is replaced with commercial lease agreement and option to purchase.

The deposit paid was utilized as deposit and advance lease payment for the lease.

NOTE 14 – NET LOSS PER SHARE

The Company adopted ASC Topic No.

260, “Earnings Per Share,” (“EPS”) which requires presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures, and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation.

2 unchanged sentences

Three Months Ended

Net income(loss) applicable to common shares

Net income applicable to common shares

$ ( 1,067,905 )

Weighted average common shares outstanding (Basic)

Shares to be issued under promissory notes

Weighted average common shares outstanding (Diluted)

Net income(loss) per share (Basic and Diluted)

Six Months Ended

Net loss per share (Basic and Diluted)

Nine Months Ended

Net income (loss) applicable to common shares

$ ( 2,713,319 )

$ ( 244,548 )

Weighted average common shares outstanding (Basic)

Shares to be issued under promissory notes

Weighted average common shares outstanding (Diluted)

Net income(loss) per share (Basic and Diluted)

Net loss per share (Basic and Diluted)

*Less than $0.01 per share

The Company has no potentially dilutive securities, such as options or warrants, currently issued and outstanding.

NOTE 15 - CAPITAL STOCK

The Company has no other potentially dilutive securities, such as options or warrants, currently issued and outstanding.

The promissory notes issued for the acquisition of BRL for $ 20,355,000 convertible by May 12, 2023 has not been included in the computation of the weighted average dilutive common shares as the transaction for which it was issued is pending completion.

For the nine months ended March 31, 2022 and 2021, diluted weighted-average common shares outstanding is equal to basic weighted-average common shares, due to the Company’s net loss position.

Hence no common stocks equivalents were included in the computations of diluted net loss per share since such inclusion would have been antidilutive.

NOTE 15 - STOCKHOLDERS’ EQUITY

Authorized Stock

The Company has authorized 10,000,000,000 common shares and 50,000,000 preferred shares, both with a par value of $ 0.001 per share.

Each common share entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought.

1 unchanged sentence

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

Share Issuance

As of March 31, 2022 and June 30, 2021, the Company has authorized 10,000,000,000 common shares and 50,000,000 preferred shares, both with a par value of $ 0.001 per share.

Each common share entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought.

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.

1 unchanged sentence

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.

On May 12, 2021, 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 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 two-year term period a principal amount of $ 20,355,000 .

On May 12, 2021, 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 with Taipan International Limited, an unrelated third party, The Wision Project Limited (formerly known as “Borneo Resources Limited”), an unrelated third party and other unrelated third party individuals, 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 two-year term period 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.

On June 4, 2021, the Company issued a total of 65,900,000 restricted common shares for US$ 1,647,500 at US$ 0.025 per share to six non-US shareholders, who Borneo Oil Berhad and Victor Subbrayan Paul are existing shareholders

On June 10, 2021, the Company issued a total of 4,690,500 restricted common shares at US$0.03 per share to each of the two directors, of which 2,095,233 restricted common shares to Balakrishnan B S Muthu and 2,595,267 restricted common shares to Chen Ching to serve as a director of the Company for a one-year term (from July 1, 2020 to June 30, 2021).

On January 20, 2022, the Company reached a mutual agreement to enter into a Supplement to Promissory Note with each of the 17 lenders (“Lenders”) of the promissory notes that were issued on May 12, 2021, to convert the total principal loan amount of $ 20,355,000 into shares of the Company’s restricted common stock priced at $ 0.0611 per share, which represents the last ninety (90) days’ volume weighted average price (VWAP) as of the market closing of January 19, 2022.

The consideration, nevertheless, shall be refundable if the acquisition of Bio Resourced Limited fails to complete.

On June 4, 2021, the Company issued a total of 65,900,000 restricted common shares for $ 1,647,500 at $ 0.025 per share to six non-US shareholders, who Borneo Oil Berhad and Victor Subbrayan Paul are existing shareholders

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 $ 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 accounts 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 10, 2021, the Company issued a total of 4,690,500 restricted common shares at $ 0.03 per share to each of the two directors, of which 2,095,233 restricted common shares to Balakrishnan B S Muthu and 2,595,267 restricted common shares to Chen Ching to serve as a director of the Company for a one-year term (from July 1, 2020 to June 30, 2021).

An aggregate of $ 140,715 for this transaction was recognized as stock-based compensation under selling, general and administrative expenses for the year ended June 30, 2021.

On June 10, 2021, the Company issued a total of 13,009,500 restricted common shares at US$0.03 per share to five consultants under the Consultant Agreements, of which 3,695,233 restricted common shares to Vincent Yong Tuck Seng, 3,695,233 restricted common shares to Lai Kui Shing Andy, 2,095,233 restricted common shares to Chan Hoi Kwong Paul, 2,095,233 restricted common shares to Sylvia Chan and 1,428,568 restricted common shares to Ng Tung to serve as a consultant of the Company for a one-year term (from June 10, 2021 to June 9, 2022).

An aggregate of $ 390,285 for this transaction, $ 34,716 was recognized as stock-based compensation according the service period under selling, general and administrative expenses for the year ended June 30, 2021.

On June 10, 2021, the Company issued a total of 13,009,500 restricted common shares at $ 0.03 per share to five consultants under the Consultant Agreements, of which 3,695,233 restricted common shares to Vincent Yong Tuck Seng, 3,695,233 restricted common shares to Lai Kui Shing Andy, 2,095,233 restricted common shares to Chan Hoi Kwong Paul, 2,095,233 restricted common shares to Sylvia Chan and 1,428,568 restricted common shares to Ng Tung to serve as a consultant of the Company for a one-year term (from June 10, 2021 to June 9, 2022).

An aggregate of $ 390,285 for this transaction, $ 34,716 was recognized as stock-based compensation according to the service period under selling, general and administrative expenses for the year ended June 30, 2021.

Of the aggregate $ 390,285 for this transaction, $ 191,222 and nil were recognized for the six months ended December 31, 2021 and 2020, respectively.

Also, $ 95,094 and nil were recognized for the three months ended December 31, 2021 and 2020, respectively.

On June 18, 2021, the Company issued a total of 58,100,000 restricted common shares for US$ 1,452,500 at US$ 0.025 per share to twenty-four non-US shareholders.

There were 810,742,109 and 779,742,109 common shares issued and outstanding at December 31, 2021 and June 30, 2021 respectively.

On June 18, 2021, the Company issued a total of 58,100,000 restricted common shares for $ 1,452,500 at $ 0.025 per share to twenty-four non-US shareholders.

There were 810,742,109 and 779,742,109 common shares issued and outstanding at March 31, 2022 and June 30, 2021 respectively.

There are no preferred shares outstanding.

The Company has issued no authorized preferred shares.

The Company has no stock option plan, warrants, or other dilutive securities.

The Company has not issued any preferred shares.

The Company also has no stock option plan, warrants, or other dilutive securities other than 8,445,946 shares to be issued under promissory notes.

NOTE 16 - RELATED PARTY TRANSACTIONS

Related party transaction

Six months 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 transaction

Three months 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

Deposits paid for acquisition of Intellectual Property

- Intellectual property license of Borneo Energy Sdn Bhd (#1) (note 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, 2021.

(#3) Borneo Oil Berhad (“BOB”) is ultimate holding company of Borneo Energy Sdn Bhd and holding 23.0% and 23.0% of the Company’s issued and outstanding common stock as of December 31, 2021 and February 14, 2022, respectively.

NOTE 17 - GOING CONCERN AND LIQUIDITY CONSIDERATIONS

As of December 31, 2021, the Company had suffered recurring net losses and records an accumulated deficit of $ 7,562,240 .