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Item 8. Financial Statements and Supplementary Data

2022-11-04 compared with 2021-11-12 · 835 added, 511 removed, 209 unchanged (87% of the section changed)

3 unchanged sentences

FOR THE YEAR ENDED JUNE 30, 2022

Reports of Independent Registered Accounting Firm

Reports of Independent Registered Accounting Firm - J&S Associate (PCAOB ID:

Reports of Independent Registered Accounting Firm - Centurion ZD CPA & Co.

(PCAOB ID:2769)

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Changes in Shareholders’ Equity (Deficit)

Consolidated Statements of Operations and Comprehensive Loss

Consolidated Statements of Cash Flows

Consolidated Statements of Changes in Stockholders’ Equity

Notes to Consolidated Financial Statements

J&S ASSOCIATE (AF002380)

(Registered with US PCAOB and Malaysia MIA)

Block C-6-3, Megan Avenue 1, 189

Off Jalan Tun Razak,

50400, Kuala Lumpur, Malaysia.

+6019 280 2989

info@jns-associate.com

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of

VERDE RESOURCES, INC.

Opinion on the Financial Statement

We have audited the accompanying consolidated balance sheet of Verde Resources, Inc.

and its subsidiaries (the ‘Company’) as of June 30, 2022, and the related consolidated statement of operations and comprehensive income, stockholders’ equity (deficit), and cash flows for the year ended June 30, 2022, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2022, and the results of its operations and its cash flows for the year ended June 30, 2022, in conformity with accounting principles generally accepted in the United States of America.

Substantial Doubt about the Company’s Ability to Continue as a Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 3, the Company has generated recurring losses and suffered from an accumulated deficit of $10,357,920 as of June 30, 2022.

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

Management’s plans with regards to these matters are also described in Note 3 to the financial statements.

These financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current year audit of the financial statements that were communicated or are required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements, and (2) involved especially challenging, subjective, or complex judgements.

We determined that there are no critical audit matters.

/s/ J&S Associate

Certified Public Accountants

We have served as the Company’s auditor since 2022.

Kuala Lumpur, Malaysia

November 4, 2022

Centurion ZD CPA & Co.

9 unchanged sentences

Opinion of the Financial Statements

We have audited the accompanying consolidated balance sheets of Verde Resources, Inc.

and its subsidiaries (the “Company”) as of June 30, 2021 and 2020, and the related consolidated statements of operations, changes in stockholders’ equity (deficit) and cash flows for each of the two years in the period ended June 30, 2021, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company at June 30, 2021 and 2020, and the consolidated results of its operations and its cash flows for each of the two years in the period ended June 30, 2021, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated balance sheet of Verde Resources, Inc.

and its subsidiaries (the “Company”) as of June 30, 2021, and the related consolidated statements of operations, changes in stockholders’ equity (deficit) and cash flows for the year then ended, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company at June 30, 2021, and the consolidated results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Consideration of the Company’s Ability to Continue as a Going Concern

37 unchanged sentences

Centurion ZD CPA & Co.

We have served as the Company’s auditor since 2014.

We have served as the Company’s auditor since 2014 to 2022.

Hong Kong, China

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

(in US$ except for number of shares)

Current Assets

(Currency expressed in United States Dollars (“US$”), except for number of shares)

As of June 30,

Current asset:

Cash and cash equivalents

Accounts receivable

Amounts due from related parties

Deposits and prepayments

Other receivables

Advanced to related parties

Other deposit & prepayment

Total current assets

Non-current assets:

Property, plant and equipment

Right of use assets

Property and equipment, net

Right of use assets, net

Mining rights

Security deposit

Deposit paid for acquisition of subsidiaries

Deposit paid for acquisition of property, plant and equipment

Deposit paid for acquisition of property and equipment

Total non-current assets

LIABILITIES AND STOCKHOLDERS’ EQUITY(DEFICIT)

LIABILTIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

Advanced from related parties

Accrual and other payables

Accrued liabilities and other payables

Lease liabilities

Promissory notes

Amounts due to related parties

Total current liabilities

Non-current liabilities:

Lease liabilities

Promissory notes

1 unchanged sentence

TOTAL LIABILITIES

STOCKHOLDERS’ EQUITY(DEFICIT)

Commitments and contingencies

STOCKHOLDERS’ EQUITY

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

Common stock, par value $ 0.001 , 10,000,000,000 shares authorized, 779,742,109 & 116,038,909 shares issued and outstanding as of June 30, 2021 & June 30, 2020 respectively

Common stock, $ 0.001 par value;

10,000,000,000 shares authorized;

819,188,055 and 779,742,109 issued and outstanding as of June 30, 2022 and 2021

Additional paid-in capital

Accumulated other comprehensive income

Accumulated deficit

1 unchanged sentence

( 5,913,255 )

Accumulated other comprehensive income

Non-controlled interest

Total Stockholders’ Equity(Deficit)

$ ( 2,293,018 )

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY(DEFICIT)

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

Non-controlling interest

Stockholders’ equity

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

See accompanying notes to consolidated financial statements.

VERDE RESOURCES, INC.

Consolidated Statements of Operations

(In US$ except for number of shares)

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

(Currency expressed in United States Dollars (“US$”))

Years ended June 30,

Cost of revenue

Operating expenses:

Selling, general & administrative expenses

LOSS FROM OPERATIONS

$ ( 574,174 )

$ ( 309,402 )

INTEREST EXPENSE

NET LOSS BEFORE INCOME TAX

Selling, general and administrative expenses

( 1,905,301 )

Goodwill impairment

Total operating expenses

( 1,910,180 )

Provision of Income Tax

LOSS FROM OPERATION

( 2,018,432 )

Other income (expense):

Interest expense

( 1,949,151 )

Net loss attributable to non-controlling interests

Net loss attributable to shareholders of Verde Resources, Inc.

Other comprehensive income (loss)

Foreign currency translation adjustment

Comprehensive loss

Comprehensive (gain) loss attributable to non-controlling interests

Comprehensive loss attributable to Verde Resources, Inc.

Basic and Diluted Loss per Common Share

Weighted Average Number of Common Shares Outstanding

Basic and diluted

*Less than $0.01 per share

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

Verde Resources, Inc.

Statement of Changes in Stockholders’ Equity (Deficit)

For the years ended June 30, 2021 and 2020

(In US$ except for number of shares)

Common Shares

Non-Controlling

Accumulated Other Comprehensive

Balance - June 30, 2019

Total other expense, net

( 1,937,047 )

LOSS BEFORE INCOME TAXES

( 3,954,414 )

Income tax expense

( 3,954,414 )

Shares issued

Net loss for the period

Foreign currency translation gain

Balance - June 30, 2020

Net loss attributable to noncontrolling interest

Net loss attributable to Verde Resources Inc., shareholders

( 3,947,435 )

1 unchanged sentence

$ ( 793,007 )

Shares issued for debt repayment and acquisition

Shares issued to directors

Shares issued to service providers

Shares issued in private placement

Net loss for the period

Foreign currency translation loss

Balance - June 30, 2021

Other comprehensive income (loss):

- Foreign currency adjustment income /(loss)

other comprehensive loss attributable to non-controlling interest

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

COMPREHENSIVE LOSS

$ ( 3,870,910 )

$ ( 872,584 )

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

Net loss per share

Weighted average common shares outstanding

See accompanying notes to consolidated financial statements.

VERDE RESOURCES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Currency expressed in United States Dollars (“US$”))

Years ended June 30,

Cash flows from operating activities:

1 unchanged sentence

$ ( 793,007 )

Adjustments to reconcile loss to net cash used in operations

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

Depreciation of property and equipment

Stock-based compensation

Interest expenses

Changes in operating assets and liabilities

(Increase) decrease in:

Finance cost interest element of promissory notes (non-cash)

Lease interest expense

Change in operating assets and liabilities:

Accounts receivable

Other deposits and prepayments

Extractive activities mining

Other receivables

Other deposit & prepayment

Increase (decrease) in:

Accounts payable

Accounts payables

Accrued liabilities and other payables

Advanced from sub-contractor & related parties

Advanced from sub-contractor and related parties

Net cash used in operating activities

( 1,595,961 )

Cash flows from investing activities:

Payments of deposit paid for equity acquisition and property, plant and equipment

Acquisition of right of use assets

Advanced to related parties

Acquisitions of right of use assets

Payments of acquisition of property, plant and equipment

Deposit paid for equity acquisition and property and equipment

Acquisition of equity interest from non-controlling interests

Purchase of property and equipment

( 1,073,153 )

Net cash used in investing activities

( 1,348,823 )

Cash flows from financing activities:

Repayments of bank loans

Repayment to lease liabilities

Lease interest paid

Proceeds from issuance of common stock

Net cash provided by financing activities

Net increase / (decrease) in cash and cash equivalents

Effect of exchange rate changes on cash

Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

Cash paid during the year for:

Interest paid

Supplementary non-cash investing and financing activities:

Net change in cash and cash equivalent

( 1,955,190 )

Foreign currency translation adjustment

Net change in cash and cash equivalents

( 1,698,705 )

BEGINNING OF YEAR

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid for income taxes

Cash paid for interest

NON-CASH INVESTING AND FINANCING ACTIVITIES:

Issuance of common stock

- offset accounts payable (note 7)

- offset advanced from related parties (note 7)

- deposit paid for acquisition of subsidiaries (note 6)

- deposit paid for acquisition of property, plant and equipment (note 6)

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

- Offset accounts payable

- Offset advanced from related parties

- Deposit paid for acquisition of subsidiaries

- Deposit paid for acquisition of property and equipment

See accompanying notes to consolidated financial statements.

VERDE RESOURCES, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE YEARS ENDED JUNE 30, 2022 AND 2021

(Currency expressed in United States Dollars (“US$”), except for number of shares)

Common stock to be issued

Additional paid-in capital

Accumulated other comprehensive income (loss)

Non-controlling interest

stockholders’

Balance as of July 1, 2020

$ ( 5,138,406 )

$ ( 411,740 )

$ ( 2,293,018 )

Shares issued for debt repayment and acquisition

Shares issued to directors

Shares issued to service providers

Shares issued in private placement

Net loss for the year

Foreign currency translation adjustment

Balance as of June 30, 2021

$ ( 5,913,255 )

$ ( 441,834 )

Balance as of July 1, 2021

$ ( 5,913,255 )

$ ( 441,834 )

Shares issued for acquisition

Stock based compensation

Shares to be issued for private placement

Accretion of interest

Net loss for the year

( 3,947,435 )

Foreign currency translation adjustment

Balance as of June 30, 2022

$ ( 10,357,920 )

See accompanying notes to consolidated financial statements.

VERDE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

FOR THE YEARS ENDED JUNE 30, 2022 AND 2021

(Currency expressed in United States Dollars (“US$”), except for number of shares)

NOTE 1 - ORGANIZATION AND BUSINESS BACKGROUND

Verde Resources, Inc.

(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 is setup by the Board of Director 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 will start to consolidate CSB from July 1, 2013 and the Company will 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”.

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.

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.

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

BOG is a wholly-owned subsidiary of Borneo Oil Berhad (BOB) which is listed on the main market of Kuala Lumpur Stock Exchange.

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 August 27, 2014, the Company’s Articles of Incorporation were amended to increase the authorized shares of the Company from 100,000,000 shares of common stock to 250,000,000 shares of common stock.

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

The Form 8K announcing the increase of the authorized shares of the Company was filed with SEC on September 15, 2014.

Effective February 20, 2016, Mr.

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

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

Effective February 20, 2016, Mr.

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

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.

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

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 .

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

We currently operate in two lines of business:

(i) gold exploration and mining through Champmark Sdn.

Bhd., a Malaysian corporation (“CSB”);

and (ii) production and distribution of renewable commodities through Verde Resources (Malaysia) Sdn.

Bhd., a Malaysian corporation.

We intend to develop operations in the distribution of THC-free cannabinoid products through Verde Life Inc., an Oregon corporation.

We are also considering investment opportunities in other non-mining areas including the bioenergy industry, real properties and the food & beverage sector.

The Company currently is engaged in the sale of gold mineral, distribution of THC-free cannabinoid (CBD) products, production and distribution of renewable commodities and real property holding.

As of June 30, 2022, the Company has the following subsidiaries:-

Name of subsidiary

Place of incorporation

Principal activities

and place of operation

Gold Billion Global Limited (“GBL”)

British Virgin Islands

Investment holding

Verde Resources (Malaysia) Sdn Bhd

Provision of consultation service and distribution of renewable agricultural commodities

Verde Renewables, Inc.

State of Missouri, U.S.A.

Management of a processing and packaging facility

Verde Life Inc.

State of Oregon, U.S.A.

Distribution of THC-free cannabinoid (CBD) products

Champark Sdn Bhd

Mining of minerals

The Wision Project Sdn Bhd

Digital innovation, marketing & consulting firm provides PR, Branding, influencer marketing, event management and media relations services

Verde Estates LLC (“VEL”)

State of Missouri, U.S.A.

Holding real property

The Company and its subsidiaries are hereinafter referred to as (the “Company”).

During the years ended June 30, 2022 and 2021, there are the major transactions, as below:

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 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.

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 Hermalis Binti Mohmad 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.

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

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

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

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 acquisition of Bio Resourced Limited was subsequently closed on October 12, 2022.

On July 7, 2021, the Company through its wholly-owned subsidiary GBL entered into a Product Supply Agreement (the “Agreement”) with MRX Xtractors, LLC (“MRX”), a company incorporated in the state of Oregon.

MRX is a market leader in commercial extraction systems for cannabis and hemp.

The Agreement is a partnership between GBL and MRX to establish a purchase and supply arrangement that allows GBL to distribute white-label THC-free CBD products from MRX.

VERDE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2022 AND 2021

(Currency expressed in United States Dollars (“US$”), except for number of shares)

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 to be 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.

The Option to Purchase is yet to be exercised to date.

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.

MRX is a market leader in commercial extraction systems for cannabis and hemp.

The Agreement is a partnership between GBL and MRX to establish a purchase and supply arrangement that allows GBL to distribute white-label THC-free CBD products from MRX.

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, together with a security deposit of $240,000.

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 , including the security deposit, at any time during the two years period of the lease term.

The Option to purchase was exercised on September 27, 2022.

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.

On April 19, 2022, the Company, through its wholly-owned subsidiary, Verde Resources (Malaysia) Sdn Bhd (“Verde Malaysia”), a company incorporated in Malaysia, entered into Term Sheet for Regenerative Carbon Negative Agriculture Initiative (the “Borneo Agreement”) with The Borneo Food Group Sdn.

Bhd (“SB”), a company incorporated in Malaysia, to supply proprietary blend of various carbon negative agricultural products such as plant natural enzyme, FAA bio enzyme and enriched biochar to SB.

SB is a wholly-owned subsidiary of Borneo Oil Berhad (BORNOIL), a company listed on the Main Board Stock Exchange of Malaysia and an affiliate of the Company by virtue of owning more than 10% shares of the Company’s Common Stock.

Under the Borneo Agreement, Verde Malaysia has the expertise, technical know-how supply of proprietary blend of various carbon negative agricultural products to assist SB in achieving a long term and consistent supply of various agriculture produce for its business while ensuring that all ingredients utilized by SB is farmed in a sustainable and environmentally friendly manner which is not just carbon neutral but carbon negative to create a long term carbon negative footprint.

Verde Malaysia will provide the services and supply the proprietary blend of various carbon negative agricultural products to SB at the agreed fixed rates which may be subject to price increase in the event of any drastic fluctuations in the cost of fuel and/or related production costs with a minimum notice of two weeks in writing to SB.

The term of the Borneo Agreement will be for a fixed period of five ( 5 ) years commencing from May 1, 2022 to April 30, 2027, and both parties may extend the agreement for a further term as may be mutually agreed on terms to be separately negotiated.

On April 27, 2022, the Company entered into a Professional Engineering Services Contract (the “Agreement”) with BioDiverse Energies, LLC (“BDE”).

Under the Agreement, BDE will provide professional services on the feasibility assessment, preliminary engineering and preliminary market analysis related to the biochar enhanced compost project.

The Company will pay BDE a total of $42,000 for completion of the professional services under the Agreement.

An initial payment of $25,000 will be paid prior to the commencement of work by BDE, with another $10,000 and $7,000 to be paid upon completion of the professional services in two stages respectively.

On May 4, 2022, the Company assigned the Agreement to its wholly owned subsidiary VRI to assume from the Company all the obligations, responsibilities and liabilities associated with the Agreement.

On April 29, 2022, the Company through its wholly owned subsidiary VRI closed on the purchase of residential real property located in Chesterfield, Missouri (the “Property”).

The purchase price for the Property was $ 750,000.00 paid in cash at closing.

The Company used cash on hand to purchase the Property.

The Property was purchased from Yimin Huang and Claudine Huang (the “Sellers”).

There are no material relationships between the Sellers and the Company or any of its affiliates.

The Company plans on holding the property as an investment and using it for corporate housing.

On June 8, 2022, the Company through its wholly owned subsidiary VRI entered into a Services Agreement with Gary F.

Zimmer to engage him as its corporate consultant to develop and formulate a designer compost and the Company's integrated regenerative farming programs as designated in the Services Agreement.

Under the Agreement, the Company will pay Gary F.

Zimmer by the issuance of 1,000,000 shares of the Company’s restricted common stock, par value $ 0.001 per share on or before July 15, 2022.

The shares were issued subsequent to the financial year end.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying consolidated financial statements reflect the application of certain significant accounting policies as described in this note and elsewhere in the accompanying consolidated financial statements and notes.

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 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.

Basis of Consolidation

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

All inter-company balances and transactions between the Company and its subsidiary and indirect subsidiary 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 and Indirect Subsidiary

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 for the year ended June 30, 2014.

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.

Operating leases

In February 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU 2016-02, Leases (Topic 842), which is effective for annual reporting periods (including interim periods) beginning after December 15, 2018, and early adoption is permitted.

The Company adopted the Topic 842 on July 1, 2019 using a modified retrospective and has elected not to recast comparative period in the consolidated financial statements.

The Company leases its facility, which are classified as operating leases in accordance with Topic 842.

Under Topic 842, lessees are required to recognize the following for all leases (with the exception of short-term leases) on the commencement date:

(i) lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis;

and (ii) right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term.

At the commencement date, the Company recognizes the lease liability at the present value of the lease payments not yet paid, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate for the same term as the underlying lease.

The right-of-use asset is recognized initially at cost, which primarily comprises the initial amount of the lease liability, plus any initial direct costs incurred, consisting mainly of brokerage commissions, less any lease incentives received.

All right-of-use assets are reviewed for impairment.

There was no impairment for right-of-use lease assets as of June 30, 2021.

Use of Estimates

These accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).

Use of Estimates and Assumptions

VERDE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2022 AND 2021

(Currency expressed in United States Dollars (“US$”), except for number of shares)

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period.

1 unchanged sentence

The Company’s periodic filings with the Securities and Exchange Commission include, where applicable, disclosures of estimates, assumptions, uncertainties and markets that could affect the financial statements and future operations of the Company.

Cash and Cash Equivalents

Cash and cash equivalents include cash in banks, 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 $ 2,117,622 and $ 24,027 in cash and cash equivalents at June 30, 2021 and June 30, 2020, respectively.

Identified below are the accounting policies that reflect the Company’s most significant estimates and judgments, and those that the Company believes are the most critical to fully understand and evaluate its consolidated financial statements.

In preparing these consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenues and expenses during the years reported.

Actual results may differ from these estimates.

Basis of Consolidation

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

and its subsidiaries.

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

Segment Reporting

Accounting Standard Codification (“ASC”) Topic 280, Segment Reporting establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about geographical areas, business segments and major customers in consolidated financial statements.

Currently, the Company operates in four reportable operating segments.

Concentrations of Credit Risk

VERDE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2022 AND 2021

(Currency expressed in United States Dollars (“US$”), except for number of shares)

The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents and related party payables it will likely incur in the near future.

3 unchanged sentences

Risks and Uncertainties

The Company operates in the resource exploration industry that is subject to significant risks and uncertainties, including financial, operational, technological, and other risks associated with operating a resource exploration business, including the potential risk of business failure.

Property and equipment

Property and equipment are stated at cost.

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:

Land & Buildings

Furniture, fixture and electronic equipment

Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred.

Expenditures for major renewals and betterment which substantially extend the useful life of assets are capitalized.

The cost and related accumulated depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in the consolidated statements of income and other comprehensive income in other income or expenses.

The Company operates in the resource exploration industry that is subject to significant risks and uncertainties, including financial, operational, technological, and other risks associated with operating a resource exploration business and venturing into new biofraction and CBD product industries, including the potential risk of business failure.

Cash and Cash Equivalents

Cash and cash equivalents are carried at cost and represent 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 $ 418,917 and $ 2,117,622 in cash and cash equivalents at June 30, 2022 and 2021.

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

Accounts Receivable

3 unchanged sentences

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 June 30, 2021 and June 30, 2020, the Company has no allowance for doubtful accounts, as per management’s judgment based on their best knowledge.

As of June 30, 2021 and June 30, 2020, 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.

At June 30, 2021 and June 30, 2020 there was no allowance for doubtful accounts.

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

The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market.

These tiers include:

Level 1 - defined as observable inputs such as quoted prices in active markets;

Level 2 - defined as inputs other than quoted prices in active markets that are either directly or indirectly observable;

Level 3 - defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The Company’s financial instruments consist of cash and cash equivalents, trade receivables, other receivables, payables, and short term and long term debt.

The carrying values of cash and cash equivalents, trade receivables, other receivables, and payables approximate their fair value due to their short maturities.

The carrying value of long term debt approximates the fair value of debt of similar terms and remaining maturities available to the company.

The Company’s non-financial assets are measured on a recurring basis.

These non-financial assets are measured for impairment annually on the Company’s measurement date at the reporting unit level using Level 3 inputs.

For most assets, ASC 820 requires that the impact of changes resulting from its application be applied prospectively in the year in which the statement is initially applied.

The Company’s non-financial assets measured on a non-recurring basis include the Company’s property, plant and equipment and finite-use intangible assets which are measured for recoverability when indicators for impairment are present.

ASC 820 requires companies to disclose assets and liabilities measured on a non-recurring basis in the period in which the re-measurement at fair value is performed.

Foreign Currency Translation

The Company’s reporting currency is the United States dollar (“$”) and the accompanying consolidated financial statements have been expressed in United States dollars.

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

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

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any.

Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which they become fully operational and after taking into account their estimated residual values:

Expected useful life

Land and buildings

3 - 27.5 years

Plant and machinery

Office equipment

Project equipment

Motor vehicle

Furniture & fittings

Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred.

Expenditures for major renewals and betterment which substantially extend the useful life of assets are capitalized.

Impairment of Long-lived Assets

In accordance with the provisions of ASC Topic 360, Impairment or Disposal of Long-Lived Assets , all long-lived assets such as property and equipment owned and held by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of an asset to its estimated future undiscounted cash flows expected to be generated by the asset.

If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets.

VERDE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2022 AND 2021

(Currency expressed in United States Dollars (“US$”), except for number of shares)

Revenue Recognition

ASC Topic 606, Revenue from Contracts with Customers (“ASC Topic 606”), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers.

The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfils its obligations under each of its agreements:

identify the contract with a customer;

identify the performance obligations in the contract;

determine the transaction price;

allocate the transaction price to performance obligations in the contract;

recognize revenue as the performance obligation is satisfied.

Revenue is recognized when the Company satisfies its performance obligation under the contract by transferring the promised product to its customer that obtains control of the product and collection is reasonably assured.

A performance obligation is a promise in a contract to transfer a distinct product or service to a customer.

Most of the Company’s contracts have a single performance obligation, as the promise to transfer products or services is not separately identifiable from other promises in the contract and, therefore, not distinct.

Product sales

Revenues from product sales are recognized when the customer obtains control of the Company’s product, which occurs at a point in time, typically upon delivery to the customer.

The Company expenses incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that it would have recognized is one year or less or the amount is immaterial.

Revenues from product sales are recorded net of reserves established for applicable discounts and allowances that are offered within contracts with the Company’s customers.

Product revenue reserves, which are classified as a reduction in product revenues, are generally characterized in the following categories:

discounts, returns and rebates.

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 Company determines if an arrangement is a lease or contains a lease at inception.

Operating lease liabilities are recognized based on the present value of the remaining lease payments, discounted using the discount rate for the lease at the commencement date.

As the rate implicit in the lease is not readily determinable for the operating lease, the Company generally uses an incremental borrowing rate based on information available at the commencement date to determine the present value of future lease payments.

Operating lease right-of-use (“ROU assets”) assets represent the Company’s right to control the use of an identified asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease.

ROU assets are generally recognized based on the amount of the initial measurement of the lease liability.

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

ROU assets are reviewed for impairment when indicators of impairment are present.

ROU assets from operating and finance leases are subject to the impairment guidance in ASC Topic 360, Property, Plant, and Equipment , as ROU assets are long-lived nonfinancial assets.

ROU assets are tested for impairment individually or as part of an asset group if the cash flows related to the ROU asset are not independent from the cash flows of other assets and liabilities.

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 June 30, 2022 and 2021.

VERDE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2022 AND 2021

(Currency expressed in United States Dollars (“US$”), except for number of shares)

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 June 30, 2022 and 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.

Substantially all of the risks or benefits of ownership are deemed to have been transferred if any one of the four criteria is met:

(i) transfer of ownership to the lessee at the end of the lease term, (ii) the lease containing a bargain purchase option, (iii) the lease term exceeding 75% of the estimated economic life of the leased asset, (iv) the present value of the minimum lease payments exceeding 90% of the fair value.

At the inception of a finance lease, we as the lessee records an asset and an obligation at an amount equal to the present value of the minimum lease payments.

The leased asset is amortized over the shorter of the lease term or its estimated useful life if title does not transfer to us, while the leased asset is depreciated in accordance with our depreciation policy if the title is to eventually transfer to us.

The periodic rent payments made during the lease term are allocated between a reduction in the obligation and interest element using the effective interest method in accordance with the provisions of ASC Topic 842.

The Company adopted the ASC Topic 740, Income tax provisions of paragraph 740-10-25-13, which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the consolidated financial statements.

Under paragraph 740-10-25-13, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.

The tax benefits recognized in the consolidated financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement.

Paragraph 740-10-25-13 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.

The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of paragraph 740-10-25-13.

The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying balance sheets, as well as tax credit carry-backs and carry-forwards.

The Company periodically reviews the recoverability of deferred tax assets recorded on its balance sheets and provides valuation allowances as management deems necessary.

Uncertain Tax Positions

The Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the ASC Topic 740 provisions of Section 740-10-25 for the years ended June 30, 2022 and 2021.

Foreign Currencies Translation

The Company’s reporting currency is the United States dollar (“US$”) and the accompanying consolidated financial statements have been expressed in United States dollars.

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.

Year-end MYR :

$1 exchange rate

Average MYR :

$1 exchange rate

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 MYR into U.S.

dollars has been made at the following exchange rates for the following periods:-

June 30, 2022

June 30, 2021

Year-end MYR:US$ exchange rate

Annualized average MYR:US$ exchange rate

Comprehensive Income

ASC Topic 220, Comprehensive Income , establishes standards for reporting and display of comprehensive income, its components and accumulated balances.

Comprehensive income as defined includes all changes in equity during a period from non-owner sources.

Accumulated other comprehensive income, as presented in the accompanying consolidated statements of changes in stockholders’ equity, consists of changes in unrealized gains and losses on foreign currency translation.

This comprehensive income is not included in the computation of income tax expense or benefit.

VERDE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2022 AND 2021

(Currency expressed in United States Dollars (“US$”), except for number of shares)

Noncontrolling Interest

The Company accounts for noncontrolling interest in accordance with ASC Topic 810-10-45, which requires the Company to present noncontrolling interests as a separate component of total shareholders’ equity on the consolidated balance sheets and the consolidated net loss attributable to the noncontrolling interest be clearly identified and presented on the face of the consolidated statements of operations and comprehensive loss.

Net Loss per Share

The Company calculates net loss per share in accordance with ASC Topic 260, Earnings per Share .

Basic income per share is computed by dividing the net income by the weighted-average number of common shares outstanding during the period.

Diluted income per share is computed similar to basic income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.

Stock Based Compensation

The Company accounts for stock-based compensation in accordance with ASC 718-10 “Compensation-Stock Compensation” which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors including employee stock options, restricted stock units, and stock appreciation rights are based on estimated fair values.

The Company accounts for stock-based compensation in accordance with ASC Topic 718-10, Compensation-Stock Compensation , which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors including employee stock options, restricted stock units, and stock appreciation rights are based on estimated fair values.

Stock-based compensation expense recognized during the period is based on the value of the portion of share-based payment awards that is ultimately expected to vest during the period.

The Company accounts for non-employee stock-based awards at fair value in accordance with the measurement and recognition criteria of ASC 505-50 “Equity-Based Payments to Non-Employees.

Comprehensive Income

Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners.

Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income are required to be reported in a financial statement that is presented with the same prominence as other financial statements.

Comprehensive income includes net income and the foreign currency translation changes.

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.

Non-controlling Interest

The Company’s non-controlling interest represents the minority shareholder’s ownership interest related to the Company’s subsidiary, CSB.

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.

Segment Reporting

The Company currently engages in one operation segment:

The expenses incurred were consisting principally of management services.

The Company’s major operation is located in Malaysia.

The Company accounts for non-employee stock-based awards at fair value in accordance with the measurement and recognition criteria of ASC Topic 505-50, “Equity-Based Payments to Non-Employees”.

Retirement Plan Costs

Contributions to retirement plans (which are defined contribution plans) are charged to general and administrative expenses in the accompanying statements of operation as the related employee service are provided.

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.

8 unchanged sentences

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.

Revenue Recognition

In accordance with the ASC Topic 606, “Revenue from Contracts with Customers”, the Company recognizes revenue when persuasive evidence of an arrangement exists, transfer of title has occurred or services have been rendered, the selling price is fixed or determinable and collectibility is reasonably assured.

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.

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

Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis.

Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return.

Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities.

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 June 30, 2021 and June 30, 2020, the Company did not have any significant unrecognized uncertain tax positions.

Related Parties

The Company follows the ASC 850-10, Related Party 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.

VERDE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2022 AND 2021

(Currency expressed in United States Dollars (“US$”), except for number of shares)

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.

Commitments and Contingencies

The Company follows the ASC 450-20, Commitments 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.

Fair Value of Financial Instruments

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and has adopted paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments.

Paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements.

To increase consistency and comparability in fair value measurements and related disclosures, paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels.

The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.

The three (3) levels of fair value hierarchy defined by paragraph 820-10-35-37 of the FASB Accounting Standards Codification are described below:

Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

Pricing inputs that are generally observable inputs and not corroborated by market data.

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.

The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.

If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

The carrying amounts of the Company’s financial assets and liabilities, such as cash and cash equivalents, loan and fee receivable, prepayments and other receivables, amounts due from related parties, accrued liabilities and other payables, loans payable, amounts due to related parties approximate their fair values because of the short maturity of these instruments.

VERDE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2022 AND 2021

(Currency expressed in United States Dollars (“US$”), except for number of shares)

Recent Accounting Pronouncements

Recent Adopted Accounting Standards

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820):

Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements for Level 1, Level 2 and Level 3 instruments in the fair value hierarchy.

The guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted for any eliminated or modified disclosures.

The Company applied the new standard beginning January 1, 2020.

The adoption of this standard did not have an impact on the Company’s consolidated financial position, results of operations and cash flows.

Recently issued accounting pronouncements not yet adopted

In June 2016, the FASB issued ASU No.

2016-13, Financial Instruments-Credit Losses (Topic 326), 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.

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

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 standard will have on our consolidated financial statements and related disclosures.

In January 2017, the FASB issued ASU No.

2017-04, simplifying the Test for Goodwill Impairment.

The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation.

A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill.

The guidance should be adopted on a prospective 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, with early adoption permitted.

The Company is currently evaluating the impact of adopting this standard on our consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistent application among reporting entities.

The guidance is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years, with early adoption permitted.

Upon adoption, we must apply certain aspects of this standard retrospectively for all periods presented while other aspects are applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption.

The Company is evaluating the impact this update will have on our financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”).

ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts.

The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur.

The Company continues to evaluate the impact of the guidance and may apply the elections as applicable as changes in the market occur.

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”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity.

This ASU (1) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20, Debt:

Debt with Conversion and Other Options, that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock;

(2) revises the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification;

and (3) revises the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted method.

In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares.

For SEC filers, excluding smaller reporting companies, ASU 2020-06 is effective for fiscal years beginning after December 15, 2021 including interim periods within those fiscal years.

Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020.

For all other entities, ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years.

Entities should adopt the guidance as of the beginning of the fiscal year of adoption and cannot adopt the guidance in an interim reporting period.

The Company is currently evaluating the impact that ASU 2020-06 may have on its consolidated financial statements and related 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.

As of June 30, 2021 and June 30, 2020 cash and cash equivalents consisted of bank deposits in banks in Malaysia and petty cash on hands.

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

Other receivables

Other receivables at June 30, 2021 and June 30, 2020 consist of the following items:

Other receivable

allowance for doubtful debts

Advanced to related parties

Advanced from related parties at June 30, 2021 and June 30, 2020 consist of the following items:

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

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.

The amendments in this update are intended to simplify the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity.

The ASU is part of the FASB’s simplification initiative, which aims to reduce unnecessary complexity in U.S.

For public business entities that are not smaller reporting companies, the ASU’s amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years.

For all other entities, the effective date is for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years.

The guidance may be early adopted for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years.

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

The adoption of ASU 2020-06 did not have a material impact on the Company’s financial statements.

During the year ended June 30, 2022, there have been no new, or existing, recently issued accounting pronouncements that are of significance, or potential significance, that impact the Company’s consolidated financial statements.

NOTE 3 - GOING CONCERN UNCERTAINTIES

The accompanying consolidated financial statements have been prepared using the going concern basis of accounting, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

The Company has generated recurring losses and suffered from an accumulated deficit of $ 10,357,920 as of June 30, 2022.

The continuation of the Company as a going concern in the next twelve months is dependent upon the Company's success in pursuing additional financing for its operations.

However, there is no assurance that the Company will be successful in securing sufficient funds to sustain the operations.

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.

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

These consolidated financial statements do not include any adjustments to reflect the possible future 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 - BUSINESS SEGMENT INFORMATION

Currently, the Company has four reportable business segments:

Gold mineral mining;

Distribution of THC-free cannabinoid (CBD) products, mainly operates;

Production and distribution of renewable commodities;

Real property holding

VERDE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2022 AND 2021

(Currency expressed in United States Dollars (“US$”), except for number of shares)

In the following table, revenue is disaggregated by primary major product line, and timing of revenue recognition.

The table also includes a reconciliation of the disaggregated revenue with the reportable segments for the years ended June 30, 2022 and 2021:

Year ended June 30, 2022

mineral mining

Distribution of THC-free cannabinoid (CBD) products

Production and distribution of renewable commodities

Holding property

Corporate unallocated

Cost of revenue

Selling, general & administrative expenses

Loss from operations

Interest expense

Loss before income tax

Total assets at June 30, 2022

Year ended June 30, 2021

mineral mining

Distribution of THC-free cannabinoid (CBD) products

Production and distribution of renewable commodities

Holding property

Corporate unallocated

Cost of revenue

Selling, general & administrative expenses

Loss from operations

Interest expenses

Loss before income tax

Total assets as June 30, 2021

The below revenues are based on the countries in which the customer is located.

Summarized financial information concerning the geographic segments is shown in the following tables:

Years ended June 30,

NOTE 5 - INVENTORIES

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

As of June 30,

VERDE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2022 AND 2021

(Currency expressed in United States Dollars (“US$”), except for number of shares)

NOTE 6 - DEPOSITS AND PREPAYMENTS

Deposits and prepayments as of June 30, 2022 and 2021 consisted of the following:

As of June 30,

NOTE 7 - PROPERTY AND EQUIPMENT

A summary of property and equipment at June 30, 2022 and 2021 is as follows:

As of June 30,

Land and building

Plant and machinery

Office equipment

Project equipment

Motor vehicle

Furniture & fittings

accumulated depreciation

( 1,609,414 )

(#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 June 30, 2021, the Company leases minings space under a non-cancelable operating lease, with terms of two years.

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 ($ 62,754 ) 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.

Balance as at the beginning of period

Amortization charge for the year

Foreign exchange adjustment

Balance as of June 30, 2021

Amortization charge of rights of use lease assets was $2,636 and $nil for the years ended June 30, 2021 and 2020.

Lease term and discount rate

Weighted-average remaining lease term - years

NOTE 6 - DEPOSIT AND PREPAYMENT

At June 30, 2021 and June 30, 2020 deposit and prepayment consists of the following:

( 1,682,358 )

Depreciation expense for the years ended June 30, 2022 and 2021 totaled $ 24,792 and $ 170 , respectively.

Subsequent to year, land and building with a carrying amount of $ 746,145 was pledged to a financial institution for facilities granted.

NOTE 8 - DEPOSITS PAID

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

As of June 30,

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 property and equipment

- Intellectual property license (#3)

- Factory site (#4)

(#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 .

Security deposit (#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 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 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 $ 20,355,000 was repayable by May 12, 2023, and bearing zero coupon interest.

Based on a subsequent agreement with the Lenders, the face value (principal) amount of $ 20,355,000 bearing zero coupon interest is now convertible to restricted common stock priced at $ 0.0611 per share to be allotted at a later date to be mutually agreed.

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.

The acquisition of BRL was subsequently closed on October 12, 2022.

VERDE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2022 AND 2021

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(#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.

2 unchanged sentences

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.

With the completion of the acquisition on October 20,2021, 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 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 .

2 unchanged sentences

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.

(#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 (“Segama Ventures”), an unrelated third party, in order to expand the Company’s biofraction plant in Malaysia.

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.

NOTE 7 - ACCOUNTS PAYABLE AND ADVANCED FROM RELATED PARTIES

Accounts Payable

Accounts payable at June 30, 2021 and June 30, 2020 consist of the following items:

Due to Beijing Changxin Wanlin Technology Co., Ltd.

Other accounts payable

______________

(*) Due to Beijing Changxin Wanlin Technology Co., Ltd.

are accounts payable derived from ordinary business transactions.

One of the directors of Beijing Changxin Wanlin Technology Co., Ltd., Mr.

Wu Ming Ding, has resigned as director of VRDR (on February 20, 2016), GBL (as of February 11, 2016) and CSB (on February 17, 2016).

This accounts payable bears no interest or collateral, repayable and renewable under normal business accounts payable terms.

On June 9, 2021, the Company entered into a Settlement of Debt Agreement (the “Debt Settlement Agreement”) with Beijing Changxin Wanlin Technology Co., Ltd.

to convert a total of USD 1,602,631 of the Company’s accounts payable to the creditor as of December 31, 2020 into equity by means of a subscription for 53,421,033 new restricted shares of the Company’s common stock at a subscription price of $0.03 per share.

Advanced from related parties

Advanced from related parties at June 30, 2021 and June 30, 2020 consist of the following items:

Advanced from BOG (#1)

Advanced from Federal Mining Resources Limited(#2)

Advanced from Federal Capital Investment Limited (#3)

Advanced from Yorkshire Capital Limited (#4)

______________

(#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 Mining Resources Limited, Mr.

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

Another director of Federal Mining Resources Limited, Mr.

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

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

(#5) 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.

The monthly base rent is $ 10,000 for the term, was payable on the commencement of the Lease Agreement, together with a security deposit of $ 240,000 .

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

The option to purchase was exercised on September 27, 2022.

NOTE 9 - 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.

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.

Balance as at the 1 July 2021

Amortization charge for the period

Foreign exchange adjustment

Balance as of June 30, 2022

Amortization charge of rights of use lease assets was $ 30,779 and $ 0 for the year ended June 30, 2022 and 2021, respectively.

NOTE 10 - AMOUNTS DUE TO RELATED PARTIES

The following breakdown of the balances due to related parties, consisted of:-

As of June 30,

Federal Capital Investment Limited (#2)

(#1) Borneo Oil and Gas Corporation Sdn Bhd (“BOG”) is a wholly owned subsidiary of Borneo Oil Berhad (“BOB”) which holds 20.0 % and 22.8 % of the Company’s issued and outstanding common stock as of June 30, 2021 and June 30, 2022, 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 Mining Resources Limited, to convert a total of USD 173,465 of the Company’s accounts payable to the creditor as of December 31, 2020 into equity by means of a subscription for 5,782,167 new restricted shares of the Company’s common stock at a subscription price of $ 0.03 per share.

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

2 unchanged sentences

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.

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

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

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

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

NOTE 8 - PROPERTY, PLANT AND EQUIPMENT

Property and equipment at June 30, 2021 and June 30, 2020, are summarized as follows:

Land and Building

Plant and Machinery

Office equipment

Project equipment

Motor Vehicle

Accumulated depreciation

( 1,682,358 )

( 1,629,871 )

The depreciation expenses charged for the year ended June 30, 2021 and 2020 were $ 170 and $ 126 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”), an un-related 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 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 $ 20,355,000 was repayable by May 12, 2023, and bearing zero coupon interest.

On January 20, 2022, the Company had reached a mutual agreement with the Lenders of the Notes to enter into a Supplement to Promissory Note, with each Lender, 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.

VERDE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2022 AND 2021

(Currency expressed in United States Dollars (“US$”), except for number of shares)

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

3 unchanged sentences

The following is a reconciliation of the beginning and ending balances of promissory notes payable using Level 3 inputs:

Balance at the beginning of period

Balance at the beginning of year

Promissory notes issued to unrelated third parties at fair value

Interest expense

Balance at the end of period

The Company recorded $ 245,392 and nil interest expense for the year ended June 30, 2021 and 2020, respectively.

NOTE 10 - INCOME TAX

The Company and its subsidiaries are subject to income taxes on an entity basis on income arising in, or derived from, the tax jurisdiction in which they operate.

The Company is a Nevada incorporated company and subject to United State Federal Income Tax.

The Tax Cuts and Jobs Act of (“TCJ Act”) was signed into law in December 2017, and among its many provisions, it imposed a mandatory one-time transition tax on undistributed international earnings and reduced the U.S.

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 June 31, 2021 and 2020.

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 25% 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:

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

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

Deferred tax assets:

Tax attribute carry forwards

Valuation allowances

The Company has recorded valuation allowances for certain tax attribute carry forwards and other deferred tax assets due to uncertainty that exists regarding future realizability.

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 years ended June 30, 2021 and June 30, 2020 or balance sheet as of June 30, 2021 and June 30, 2020.

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

NOTE 11 - COMMITMENTS AND CONTINGENCIES

As of June 30, 2021, the Group had the following contracted capital commitments:

For purchase of property, plant and equipment

For acquisition of subsidiary

NOTE 12 - LOSS PER SHARE

The Company has 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.

In the accompanying financial statements, basic earnings (loss) per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the year.

The following table sets forth the computation of basic and diluted earnings per share:

Year Ended June 30,

$ ( 793,007 )

$ ( 309,402 )

Net loss attributable to non-controlling interests

Net loss attributable to shareholders of Verde Resources, Inc.

Weighted average shares used in basic and diluted computation

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 13 - CAPITAL STOCK

Balance at the end of year

The Company recorded $ 1,948,086 and $ 245,392 interest expense for the years ended June 30, 2022 and 2021, respectively.

NOTE 12 - LEASES

The Company adopted ASU No.

2016-02, Leases and determines whether an arrangement is a lease at inception.

This determination generally depends on whether the arrangement conveys the right to control the use of an identified fixed asset explicitly or implicitly for a period of time in exchange for consideration.

Control of an underlying asset is conveyed if we obtain the rights to direct the use of and to obtain substantially all of the economic benefit from the use of the underlying asset.

Some of our leases include both lease and non-lease components which are accounted for as a single lease component as the Company has elected the practical expedient.

Some of the operating lease agreements include variable lease costs, primarily taxes, insurance, common area maintenance or increases in rental costs related to inflation.

Substantially all of our equipment leases and some of our real estate leases have terms of less than one year and, as such, are accounted for as short-term leases as we have elected the practical expedient.

Operating leases are included in the right-of-use lease assets, other current liabilities and long-term lease liabilities on the Consolidated Balance Sheet.

Right-of-use assets and lease liabilities are recognized at each lease’s commencement date based on the present values of its lease payments over its respective lease term.

When a borrowing rate is not explicitly available for a lease, the incremental borrowing rate is used based on information available at the lease’s commencement date to determine the present value of its lease payments.

Operating lease payments are recognized on a straight-line basis over the lease term.

The Company adopts a 5 % as weighted average incremental borrowing rate to determine the present value of the lease payments.

The weighted average remaining life of the lease was 3 years.

The table below presents the lease-related assets and liabilities recorded on the balance sheet.

As of June 30,

Right-of-use asset #

Finance lease liabilities

Total lease liabilities

VERDE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2022 AND 2021

(Currency expressed in United States Dollars (“US$”), except for number of shares)

As of June 30, 2022, right-of-use assets were $ 685,714 and lease liabilities were $ 173,124 .

As of June 30, 2021, right-of-use assets were $ 60,131 and lease liabilities were $ 0 .

The Company excludes short-term leases (those with lease terms of less than one year at inception) from the measurement of lease liabilities or right-of-use assets.

The following tables summarize the lease expense for the years.

Years ended June 30,

Finance lease cost:

Interest on lease liabilities (per ASC 842)

Operating lease cost:

Amortisation charge for the year (per ASC 842)

Total lease expense

Components of Lease Expense

The Company recognizes lease expense on a straight-line basis over the term of the operating leases, as reported within “general and administrative” expense on the accompanying consolidated statement of operations.

Future Contractual Lease Payments as of June 30, 2022

The below table summarizes our (i) minimum lease payments over the next five years, (ii) lease arrangement implied interest, and (iii) present value of future lease payments for the next five years and thereafter ending June 30:

Years ending June 30,

Operating and finance lease amount

Total minimum finance lease liabilities payment

Present value of lease liabilities

Representing:-

Current liabilities

Non-current liabilities

For the years ended June 30, 2022 and 2021, the amortization charge was $ 34,286 and $ 0 , respectively.

# 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.

VERDE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2022 AND 2021

(Currency expressed in United States Dollars (“US$”), except for number of shares)

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 13 - STOCKHOLDERS’ EQUITY

Authorized Stock

1 unchanged sentence

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.

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

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

Share Issuance

Preferred stock outstanding

There are no preferred shares outstanding as of June 30, 2022 and 2021.

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

Common stock outstanding

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 ("BRL")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 .

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

1 unchanged sentence

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 January 20, 2022, the Company has reached a mutual agreement with the Lenders of the Notes to enter into a Supplement to Promissory Note, with each Lender, 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 acquisition of BRL was consummated on October 12, 2022.

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, including Borneo Oil Berhad and Victor Subbrayan Paul who 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 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 were issued to their nominee, Internet.com Ltd on June 9, 2021.

VERDE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2022 AND 2021

(Currency expressed in United States Dollars (“US$”), except for number of shares)

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).

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 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 consultants 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.

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 779,742,109 and 116,038,909 common shares issued and outstanding at June 30, 2021 and June 30, 2020 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.

On April 25, 2022, the Company issued a total of 8,445,946 restricted common shares for $ 1,000,000 at $ 0.1184 per share to two non-US shareholders.

There were 819,188,055 and 779,742,109 shares of common stock issued and outstanding at June 30, 2022 and June 30, 2021, respectively.

NOTE 14 - NET LOSS PER SHARE

The following table sets forth the computation of basic and diluted net (loss) income per share for the respective years:

Years ended June 30,

Net loss attributable to non-controlling interest

Net loss attributable to Verde Resources, Inc.

$ ( 3,947,435 )

$ ( 774,849 )

Weighted average common shares outstanding:

Net loss per share:

# less than $0.001

For the years ended June 30, 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 stock equivalents were included in the computation of diluted net loss per share since such inclusion would have been antidilutive.

The Company has no potentially dilutive securities, such as, options or warrants, currently issued and outstanding other than the restricted common stock to be issued at $ 0.0611 per share upon conversion of the Promissory Notes with a principal amount of $ 20,355,000 at a future date to be to be mutually agreed with the Lenders, and the commitment to issue 1,000,000 shares to Gary F.

Zimmer on or before July 15, 2022 pursuant to a contract of service.

NOTE 15 - INCOME TAX

For the years ended June 30, 2022 and 2021, the local (“United States of America”) and foreign components of loss before income taxes were comprised of the following:

Years ended June 30,

Tax jurisdiction from:

- Local (US regime)

$ ( 3,130,173 )

$ ( 536,320 )

- Foreign, including

British Virgin Island

Loss before income taxes

$ ( 3,954,414 )

$ ( 793,007 )

The provision for income taxes consisted of the following:

Years ended June 30,

Income tax expense (benefit)

VERDE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2022 AND 2021

(Currency expressed in United States Dollars (“US$”), except for number of shares)

The effective tax rate in the years presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rate.

The Company mainly operates in U.S.A.

and Malaysia that is subject to taxes in the jurisdictions in which they operate, as follows:

United States of America

The Company is registered in the State of Nevada and is subject to the tax laws of United States of America.

Tax Cuts and Jobs Act (the “Tax Reform Act”) was signed into law.

The Tax Reform Act significantly revised the U.S.

corporate income tax regime by, among other things, lowering the U.S.

corporate tax rate from 35 % to 21 % effective January 1, 2018.

The Company’s policy is to recognize accrued interest and penalties related to unrecognized tax benefits in its income tax provision.

The Company has not accrued or paid interest or penalties which were not material to its results of operations for the periods presented.

Deferred tax asset is not provided for as the tax losses may not be able to carry forward after a change in substantial ownership of the Company.

For the years ended June 30, 2022 and 2021, there were no operating income in US tax regime.

Under the current BVI law, the Company is not subject to tax on income.

The Company’s subsidiary is registered in Malaysia and is subject to the Malaysia corporate income tax at a standard income tax rate of 24 % on the assessable income arising in Malaysia during its tax year.

For the year ended June 30, 2022, the operation in Malaysia incurred $ 5,248,593 of cumulative net operating losses which can be carried forward to offset future taxable income.

The net operating loss carryforwards has no expiration.

The Company has provided for a full valuation allowance against the deferred tax assets of $ 1,259,662 on the expected future tax benefits from the net operating loss (“NOL”) carryforwards as the management believes it is more likely than not that these assets will not be realized in the future.

Years ended June 30,

Loss before income taxes

$ ( 498,702 )

$ ( 121,086 )

Statutory income tax rate

Income tax expense at statutory rate

Non-deductible items

Net operating loss

Income tax expense

The following table sets forth the significant components of the deferred tax assets of the Company:

As of June 30,

US tax regime

Malaysia tax regime

valuation allowance

( 1,429,310 )

( 1,198,944 )

Deferred tax assets, net

The Company has recorded valuation allowances for certain tax attribute carry forwards and other deferred tax assets due to uncertainty that exists regarding future realizability.

The Company did not have any interest and penalty provided or recognized in the income statements for years ended June 30, 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.

VERDE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2022 AND 2021

(Currency expressed in United States Dollars (“US$”), except for number of shares)

NOTE 16 - PENSION COSTS

The Company is required to make contribution to their employees under a government-mandated defined contribution pension scheme for its eligible full-times employees in Malaysia.

The Company is required to contribute a specified percentage of the participants’ relevant income based on their ages and wages level.

During the years ended June 30, 2022 and 2021, $ 7,219 and $ 6,374 contributions were made accordingly.

NOTE 17 - RELATED PARTY TRANSACTIONS

Related party transaction

For the Year ended

For the Years ended

Related party transactions:

Borneo Eco Food Sdn Bhd (#3)

Other income – Sales of wash sand to:

Jusra Mining Merapoh Sdn Bhd (#1)

Site expenses:

Warisan Khidmat Sdn Bhd (#5)

Professional services provided by:

Federal Capital Investment Limited (#2)

Warisan Khidmat Sdn Bhd (#5)

Related party balances:

Deposits paid for acquisition of property, plant and equipment

- Intellectual property license of Borneo Energy Sdn Bhd (#3) (note 6)

Trade receivables

Borneo Eco Food Sdn Bhd (#3)

Deposits paid for acquisition of property and equipment

Borneo Energy Sdn Bhd (#3)

Other receivable

Jusra Mining Merapoh Sdn Bhd (#1)

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

Advanced to related parties

Advanced to Global Renewable Sdn Bhd (#4)

Trade Payables

Warisan Khidmat Sdn Bhd (#5)

Advanced from related parties

Advanced from BOG (#6)

Advanced from Federal Capital Investment Limited (#7)

(#1) Lamax Gold Limited (“LGL”) held 15 % equity interests of Champmark Sdn Bhd which was disposed on October 20, 2021 to Verde Resources Asia Pacific Limited (formerly known as Gold Billion Global Limited) and is also the major shareholder of Jusra Mining Merapoh Sdn Bhd.

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

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

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

NOTE 15 - GOING CONCERN AND LIQUIDITY CONSIDERATIONS

The accompanying 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 June 30, 2021, the Company has suffered recurring net losses and records an accumulated deficit of $5,913,255.

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.

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.

(#3) Borneo Oil Berhad (“BOB”) is ultimate holding company of Borneo Eco Food Sdn.

and Borneo Energy Sdn Bhd, and held 20.0% and 22.8% of the Company’s issued and outstanding common stock as of June 30, 2021 and June 30, 2022, respectively.

(#4) Balakrishnan B.S.

Muthu was a common director of Global Renewable Sdn Bhd and the Company, and had since resigned from Global Renewables Sdn.

in January 2022.

(#5) Warisan Khidmat Sdn.

is a company whose shareholdings is entirely held by a Director of Verde Malaysia.

(#6) Borneo Oil and Gas Corporation Sdn Bhd (“BOG”) is a wholly owned subsidiary of Borneo Oil Berhad (“BOB”) (holding 20.0% and 22.8% of the Company’s issued and outstanding common stock as of June 30, 2021 and June 30, 2022, respectively).

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

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

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

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

Apart from the transactions and balances detailed elsewhere in these accompanying consolidated financial statements, the Company has no other significant or material related party transactions during the years presented.

NOTE 18 - CONCENTRATIONS OF RISK

The Company is exposed to the following concentrations of risk:

Major customers

For the years ended June 30, 2022 and 2021, there was no single customer whose revenue exceeded 10 % of the revenue.

Economic and political risk

The Company’s major operations are conducted in U.S.A.

and Malaysia.

Accordingly, the political, economic, and legal environments in U.S.A.

and Malaysia, as well as the general state of U.S.A.

and Malaysia’s economy may influence the Company’s business, financial condition, and results of operations.

Exchange rate risk

The Company cannot guarantee that the current exchange rate will remain steady;

therefore there is a possibility that the Company could post the same amount of profit for two comparable periods and because of the fluctuating exchange rate actually post higher or lower profit depending on exchange rate of HKD converted to US$ on that date.

The exchange rate could fluctuate depending on changes in political and economic environments without notice.

NOTE 19 - COMMITMENTS AND CONTINGENCIES

As of June 30, 2022, the Company has no material commitments or contingencies.

VERDE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2022 AND 2021

(Currency expressed in United States Dollars (“US$”), except for number of shares)

NOTE 20 - SUBSEQUENT EVENTS

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 (“BESB”) in consideration of issuance of 166,666,667 share of the Company’s stock at $ 0.03 per share, valued at $ 5,000,000 .

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

On August 6, 2021, the Company and BESB entered into a supplementary agreement to vary the completion date.

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 the assets of the biofraction plant and the right to use the licensed intellectual property in Sabah, Malaysia.

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 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 for the amount of $ 20,355,000 .

On November 11, 2021, the Company and Taipan International Limited, The Wision Project Limited (formerly known as “Borneo Resources Limited”) and other individuals unrelated third parties entered into an supplementary agreement to vary the completion date.

This acquisition is currently in progress and 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 the assets.

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

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”) in order to expand the Company’s biofraction plant in Malaysia.

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

On September 8, 2021, GBL and Segaman Ventures entered into an supplementary agreement to vary the completion date.

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

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

On June 30, 2021, BRL and Global Renewables entered into an supplementary agreement to vary the completion date.

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.

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

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

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

On June 30, 2021, GBL and LGL entered into an supplementary agreement to vary the completion date.

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

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

On July 7, 2021, the Company issued a Press Release announcing a partnership with MRX Technologies, a market leader in commercial extraction systems for cannabis and hemp.

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

The Company will distribute non-psychoactive, THC-free CBD products in Europe, Hong Kong and the United States.

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

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

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

The Company has evaluated subsequent events from the balance sheet date through the date the financial statements were issued and determined that there are no additional significant or material items to be required to disclose except the above mentioned matters.

In accordance with ASC Topic 855, “ Subsequent Events ”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before consolidated financial statements are issued, the Company has evaluated all events or transactions that occurred after June 30, 2022, up through the date the Company issued the audited consolidated financial statements.

On May 12, 2021, the Company, through its wholly-owned subsidiary Gold Billion Global Limited (“GBL”), a company incorporated under the laws of the British Virgin Islands, entered into a Share Sale Agreement in relation to the acquisition of the entire issued and paid-up share capital of Bio Resources Limited (the “Share Sale Agreement”) with Taipan International Limited, a company incorporated under the laws of the Labuan, and Borneo Resources Limited, a company incorporated under the laws of the Labuan, and other individuals.

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

The acquisition of BRL was consummated on October 12, 2022.

Bio Resources Limited (“BRL”) is the beneficial and/or registered proprietor of the intellectual property known as “Catalytic Biofraction Process”, which is a slow pyrolysis process using a proprietary catalyst to depolymerise palm biomass wastes (empty fruit bunches or palm kernel shells) in temperature range of 350 degrees Celsius to 500 degrees Celsius to yield commercially valuable bio products:

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

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

Upon fulfilling UN’s (United Nations) ACM 22 protocol as well as LCA (Life Cycle Assessment) requirements, we anticipate that the by-products from this IP would lead to certification and issuance of Carbon Avoidance Credits as well as Carbon Removal Credits to generate carbon revenue for the company.

On July 8, 2022, the Company, through its wholly-owned subsidiary Verde Renewables, Inc.

(“VRI”), a company incorporated in the State of Missouri, U.S.A., entered into a Services Agreement (the “Agreement”) with Lisa Leilani Zimmer Durand to engage her as its corporate consultant to provide training on biological farming, write articles and white papers on the Company’s products and develop new product formulations as designated in the Agreement.

Under the Agreement, the Company will pay Lisa Leilani Zimmer Durand by the issuance of 500,000 shares of the Company’s restricted common stock, par value $ 0.001 per share (the “Common Stock”) and $ 25,000 advanced deposit on or before July 15, 2022.

On July 15, 2022, the Company issued 1,000,000 and 500,000 restricted common shares to our corporate consultants Gary F.

Zimmer and Lisa Leilani Zimmer Durand, respectively.

On September 27, 2022, the Company exercised its Option to Purchase a 24-acre property in La Belle Missouri pursuant to a Commercial Lease Agreement and Option to Purchase (the “Lease Agreement”) entered into on February 10,2022 by the Company through Verde Estates, LLC, with Jon Neal Simmons and Betty Jo Simmon (the “Landlord”) to support carbon farming with biochar in Missouri, for a consideration of $ 500,000 .

The Company had paid to the Landlord a security deposit in the sum of 240,000 prior to the execution of the Lease Agreement.

The Company paid the balance of the sum of 260,000 at the closing of the purchase of the Property.

On October 1, 2022, Balakrishnan B S Muthu resigned his position as President of Verde Resources, Inc.

(“Verde” or the “Company”).

Balakrishnan B S Muthu shall remain as Treasurer, Chief Financial Officer, General Manager and Director of Verde and Liang Wai Keen shall remain as Secretary of the Company.

Jack Wong has been appointed President and Chief Executive Officer of the Company effective October 1, 2022.

Wong was the sole shareholder of The Wision Project Sdn Bhd (“Wision”), a subsidiary which was acquired by the Company through its wholly owned subsidiary Verde Resources (Malaysia) Sdn Bhd (“Verde Malaysia”) pursuant to Share Sale Agreement (“SSA”) signed on March 23, 2022 for the acquisition of one hundred percent 100% of the issued and paid-up ordinary shares in Wision from Mr.

On October 1, 2022, the Company’s Board of Directors adopted an employment and compensation agreement for Mr.

Wong (the “Agreement”).

The Agreement provides for an employment term of five (5) years.

Wong will receive an annual salary of $287,650 inclusive of any tax payable as required by law .

The Company will also provide Mr.

Wong an executive vehicle, executive housing, health benefits, and equity incentives upon the Company adopting an equity incentive plan.

On October 26, 2022, the Company entered into a corporate consulting services agreement (the “Consulting Agreement”) for investor communication and public relations services with Dutchess Group LLC (“DGL”).

Pursuant to terms of the Consulting Agreement, the Company agreed to issue 1,500,000 shares of the Company’s restricted common stock to DGL within forty-five (45) days of signing the Consulting Agreement.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Independent Accountants:

There were no changes to our certifying accountants for the year ended June 30, 2021.

On March 30, 2022, the Board replaced Centurion ZD CPA & Co.

(“CZD”) as its independent public accountants with J&S Associate (“J&S”) as the independent public accountants, effective immediately, to audit the financial statements of Verde and its consolidated subsidiaries for the fiscal year ending June 30, 2022.

The reports of CZD on the consolidated financial statements of Verde as of and for the years ended June 30, 2021 and 2020 did not contain any adverse opinion or disclaimer of opinion.

These reports were not qualified or modified as to uncertainty, audit scope or accounting principles, except that the report contained an explanatory paragraph stating that there was substantial doubt about Verde’s ability to continue as a going concern.

During the fiscal years ended June 30, 2021 and 2020, and in the subsequent interim period through March 31, 2022, there were no “disagreements” (as described in Item 304(a)(1)(iv) of Regulation S-K) between CZD and Verde on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of CZD, would have caused CZD to make reference to the subject matter of such disagreements in connection with their reports.

Furthermore, no “reportable events” occurred during the two fiscal years ended June 30, 2021 and 2020, or subsequently up to March 30, 2022.

As used herein, the term “reportable event” means any of the items listed in paragraphs (a)(1)(v) of Item 304 of Regulation S-K.

During the two fiscal years ended June 30, 2021 and 2020 and in the subsequent periods through March 31, 2022, neither Verde nor anyone on its behalf consulted J&S regarding either (i) the application of accounting principles to a specified transaction (either completed or proposed), or the type of audit opinion that might be rendered on Verde's consolidated financial statements, or (ii) any matter that was either the subject of a disagreement (as described in Item 304(a)(1)(iv) of Regulation S-K) or a reportable event (as described in Item 304(a)(1)(v) of Regulation S-K).

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data