What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-10-16 compared with 2022-11-04 · 394 added, 380 removed, 664 unchanged (54% of the section changed)

3 unchanged sentences

FOR THE YEAR ENDED JUNE 30, 2023

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

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

(PCAOB ID:2769)

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

Consolidated Balance Sheets

3 unchanged sentences

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

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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.

and its subsidiaries (the ‘Company’) as of June 30, 2023, and the related consolidated statement of operations and comprehensive income, stockholders’ equity (deficit), and cash flows for the years ended June 30, 2023,, 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, 2023, and the results of its operations and its cash flows for the years ended June 30, 2023, 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

19 unchanged sentences

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:

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, or in their absence, the directors, 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

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Assessment for impairment of Intellectual Properties

As described in Note 2 to the consolidated financial statements, the intangible assets acquired from third parties are measured initially at fair value with an infinite live that are not being amortized.

The Company annually evaluates the recoverability of the infinite-lived intangible assets for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable.

The recoverability of these assets is measured by a comparison of the carrying amounts to the future discounted cash flows the assets are expected to generate.

If such a review indicates that the carrying amount of intangible assets is not recoverable, the carrying amount of such assets is reduced to fair value.

Our key considerations for the determination the fair value of the intangible assets, comprising Intellectual Properties (“IP”) as a critical audit matter was due to the high degree of judgement involved in the assessment of the assumptions used in deriving the future discounted cash flows as included in the worksheets presented to us to justify their carrying values of the IP.

These were assessed by:

Critically evaluating management’s assessment for their rationale and justification of the assumptions used;

Discussions with the key management and operational personnel of the Company to understand the future plans, their assumptions and expected income to be derived;

Obtained necessary supporting information and published reports to support the forecast demand and productions and prices used in the worksheets;

Ascertaining formulas and linkages in the worksheets were properly set up;

Performing stress tests by reducing assumed demand and production to determine impact on cash flows and carrying values.

/s/ J&S Associate PLT

Certified Public Accountants

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Kuala Lumpur, Malaysia

November 4, 2022

Centurion ZD CPA & Co.

Certified Public Accountants (Practising)

Unit 1304, 13/F., Two Harbourfront, 22 Tak Fung Street, Hunghom, Hong Kong

香港紅磡德豐街22號海濱廣場二期13樓1304室

(852) 2126 2388 Fax:

(852) 2122 9078

Report of Independent Registered Public Accounting Firm

The board of directors and stockholders of

Verde Resources, Inc.

(“the Company”)

Opinion of the Financial Statements

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

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

As discussed in Note 3 to the consolidated financial statements, the Company has suffered recurring net losses, and records an accumulated deficits as of June 30, 2021.

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

Management’s plans in regard to these matters are also described in Note 3.

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

Basis for Opinion

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

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

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

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

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

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

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

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

Accordingly, we express no such opinion.

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

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

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

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

Basis of Presentation and Going Concern - Disclosure

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

As discussed in Note 3 to the consolidated financial statements, the Company has an accumulated deficit from recurring net losses as of June 30, 2021.

The Company has contractual obligations such as commitments for acquisition of property, plant and equipment, and subsidiaries and promissory notes (collectively “obligations”).

Currently management’s forecasts and related assumptions illustrate their ability to meet the obligations through management of expenditures and, if necessary, obtaining additional debt financing, loans from existing directors and shareholders and private placements of capital stock for additional funding to meet its operating needs.

Should there be constraints on the ability to access such financing, the Company can manage cash outflows to meet the obligations through reductions in capital expenditures and other operating expenditures.

We identified management’s assessment of the Company’s ability to continue as a going concern as a critical audit matter.

Management made judgments to conclude that it is probable that the Company’s plans will be effectively implemented and will provide the necessary cash flows to fund the Company’s obligations as they become due.

Specifically, the judgments with the highest degree of impact and subjectivity in determining it is probable that the Company’s plans will be effectively implemented included its ability to reduce capital expenditures and other operating expenditures, its ability to access funding from the capital market and its ability to obtaining loans from existing directors and shareholders.

Auditing the judgments made by management required a high degree of auditor judgment and an increased extent of audit effort.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included the following, among others:

(i) evaluating the probability that the Company will be able to access funding from the capital market;

(ii) evaluating the probability that the Company will be able to reduce capital expenditures and other operating expenditures if required and (iii) evaluating the probability that the Company will be able to obtain the loan from existing directors and shareholders.

/s/ Centurion ZD CPA & Co.

Centurion ZD CPA & Co.

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

Hong Kong, China

November 12, 2021

October 13, 2023

VERDE RESOURCES, INC.

5 unchanged sentences

Accounts receivable

Amounts due from related parties

Amounts due from related party

Deposits and prepayments

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Non-current assets:

Property and equipment, net

Property, plant and equipment, net

Right of use assets, net

Mining rights

Intangible assets

Security deposit

Deposit paid for acquisition of subsidiaries

Deposit paid for acquisition of property and equipment

Deposit paid for acquisition of property, plant and equipment

Total non-current assets

3 unchanged sentences

Accrued liabilities and other payables

Lease liabilities

Finance lease liabilities

Operating lease liabilities

Promissory notes

Amount due to director

Amounts due to related parties

1 unchanged sentence

Non-current liabilities:

Lease liabilities

Finance lease liabilities

Operating lease liabilities

Promissory notes

24 unchanged sentences

( 3,216,022 )

( 1,905,301 )

Goodwill impairment

1 unchanged sentence

( 3,216,022 )

( 1,910,180 )

LOSS FROM OPERATION

( 3,296,077 )

Other income (expense):

( 2,017,367 )

Other (expense) income:

Interest expense

( 1,918,572 )

( 1,949,151 )

Total other expense, net

2 unchanged sentences

( 3,998,960 )

( 3,954,414 )

Income tax expense

( 3,998,960 )

( 3,954,414 )

Net loss attributable to noncontrolling interest

3 unchanged sentences

$ ( 3,998,960 )

Other comprehensive income (loss):

$ ( 3,954,414 )

Other comprehensive (loss):

- Foreign currency adjustment income (loss)

other comprehensive loss attributable to non-controlling interest

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

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

COMPREHENSIVE LOSS

3 unchanged sentences

Weighted average common shares outstanding

1,019,752,220

See accompanying notes to consolidated financial statements.

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

Depreciation of property and equipment

Depreciation of property, plant and equipment

Stock-based compensation

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

Fair value adjustment on convertible promissory notes

Gain on disposal of a subsidiary

Gain on disposal of property and equipment

Lease interest expense

6 unchanged sentences

Accrued liabilities and other payables

Advanced from sub-contractor and related parties

Advanced from director

Advanced from related parties

Net cash used in operating activities

( 1,656,896 )

( 1,595,961 )

Cash flows from investing activities:

Acquisition of right of use assets

Advanced to related parties

Deposit paid for equity acquisition and property and equipment

Proceeds from disposal of property, plant and equipment

Deposit paid for acquisition of subsidiary

Net inflow from disposal of subsidiary

Net inflow on acquisition of subsidiary

Deposit paid for acquisition and property, plant and equipment

Acquisition of equity interest from non-controlling interests

Purchase of property and equipment

Purchase of property, plant and equipment

( 1,073,153 )

3 unchanged sentences

Repayment to lease liabilities

Drawdown of bank loan

Repayment of bank loan

Lease interest paid

12 unchanged sentences

Issuance of common stock

- Offset accounts payable

- Offset advanced from related parties

- Deposit paid for acquisition of subsidiaries

- Deposit paid for acquisition of property and equipment

12 unchanged sentences

$ ( 441,834 )

$ ( 2,293,018 )

Shares issued for debt repayment and acquisition

Shares issued to directors

Shares issued to service providers

Shares issued in private placement

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 )

( 3,954,414 )

Foreign currency translation adjustment

1 unchanged sentence

$ ( 10,357,920 )

$ ( 441,834 )

Balance as of July 1, 2022

$ ( 10,357,920 )

$ ( 441,834 )

Shares issued for acquisition

Stock based compensation

Shares to be issued for private placement

Accretion of interest

Shares issued to service provider

Stock issued for previously committed private placement

Shares issued for private placement

Shares issued arising from conversion of promissory notes

Fair value adjustment on conversion of promissory notes

Net loss for the year

( 3,998,960 )

Foreign currency translation adjustment

Cumulative translation adjustment transferred to profit/loss

Balance as of June 30, 2023

1,176,200,278

$ ( 10,292,430 )

See accompanying notes to consolidated financial statements.

6 unchanged sentences

(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.

We currently operate in the distribution of THC-free cannabinoid (CBD) products, production and distribution of renewable commodities and real property holding.

However, the Company has been undergoing a restructuring exercise to shift its focus towards renewable energy and sustainability development with the world faced with challenges of climate change and environmental dehydration.

As of June 30, 2023, the Company has the following subsidiaries:-

3 unchanged sentences

and place of operation

Gold Billion Global Limited (“GBL”)

Verde Resources Asia Pacific Limited (“VRAP”)

British Virgin Islands

Investment holding

Verde Resources (Malaysia) Sdn Bhd

Verde Resources (Malaysia) Sdn Bhd (“Verde Malaysia”)

Provision of consultation service and distribution of renewable agricultural commodities

5 unchanged sentences

Distribution of THC-free cannabinoid (CBD) products

Champark Sdn Bhd

Mining of minerals

The Wision Project Sdn Bhd

The Wision Project Sdn Bhd (“Wision”)

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

2 unchanged sentences

Holding real property

Bio Resources Limited (“BRL”)

Labuan, Malaysia

Provision of proprietary pyrolysis technology and investment holding

* The acquisition of BRL was completed on October 12, 2022.

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.

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 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 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.

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.

2 unchanged sentences

(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.

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 for a consideration of MYR 150,000 ($35,669) payable upon the execution of the Shares Sale Agreement.

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.

During the years ended June 30, 2023, and 2022, there are the major transactions, as below:

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 various unrelated third parties being Taipan International Limited, The Wision Project Limited, and other individuals, for a consideration of $ 30,000,000 by way of an 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 acquisition of Bio Resources Limited was subsequently closed on October 12, 2022.

BRL owns the intellectual property known as “Catalytic Biofraction Process”, 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 degree Celsius to 500 degree 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 the palm biomass wastes is used as feedstock.

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.

1 unchanged sentence

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.

VERDE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2023 AND 2022

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

On March 13, 2023, the Company through its wholly-owned subsidiary Verde Resources Asia Pacific Limited (“VRAP”), a company incorporated under the laws of the British Virgin Islands, entered into a Share Sale Agreement (the “SSA Agreement”) with Jusra Mining Merapoh Sdn Bhd (“JMM”), a company incorporated under the laws of Malaysia, to sell the entire issued and paid-up share capital of Champmark Sdn Bhd (“CSB”), an indirect wholly-owned subsidiary of the Company engaged in the mining business.

Under the terms of the SSA Agreement, the consideration for the sale of the entire issued and paid-up share capital of CSB shall be satisfied in full by the payment of Malaysia Ringgit MYR 500,000.

The Company has been undergoing a restructuring exercise to shift its focus towards renewable energy and sustainability development with the world faced with challenges of climate change and environmental dehydration.

The disposition of the mining business via the sale of the entire issued and paid-up share capital of CSB is in line with the Company’s restructuring effort to focus on renewable energy and sustainability.

The disposition of Champmark Sdn Bhd (“CSB”) was completed on April 20, 2023.

VERDE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2023 AND 2022

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

Effective March 30, 2023, Carl Craven voluntarily resigned from his position as Director of the Company.

By resolution of the Board of Directors, Jack Wong was appointed Director of the Company for a one (1) year term, effective March 30, 2023.

Jack Wong will hold the Board position formerly held by Carl Craven.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 unchanged sentences

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.

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.

4 unchanged sentences

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

The Company accounts for acquisitions in accordance with guidance found in ASC 805, Business Combinations.

The guidance requires consideration given, including contingent consideration, assets acquired, and liabilities assumed to be valued at their fair market values at the acquisition date.

Segment Reporting

2 unchanged sentences

Concentrations of Credit Risk

The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents and future receivables.

The Company places its cash and cash equivalents with financial institutions of high credit worthiness.

At times, its cash and cash equivalents with a particular financial institution may exceed any applicable government insurance limits.

The Company’s management plans to assess the financial strength and credit worthiness of any parties to which it extends funds, and as such, it believes that any associated credit risk exposures are limited.

VERDE RESOURCES, INC.

2 unchanged sentences

(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.

The Company places its cash and cash equivalents with financial institutions of high credit worthiness.

At times, its cash and cash equivalents with a particular financial institution may exceed any applicable government insurance limits.

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 and venturing into new biofraction and CBD product industries, including the potential risk of business failure.

Cash and Cash Equivalents

1 unchanged sentence

The Company had $ 200,409 and $ 418,917 in cash and cash equivalents at June 30, 2023 and 2022.

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

At and June 30, 2023, and 2022, cash and cash equivalents consisted of bank deposits and petty cash on hands.

Accounts Receivable

9 unchanged sentences

As of June 30, 2023, and 2022, 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.

Property, Plant and Equipment

Property, plant 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:

5 unchanged sentences

Project equipment

Motor vehicle

Furniture & fittings

Motor vehicles

Furniture and fittings

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

1 unchanged sentence

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.

Intangible assets

Intangible assets acquired from third parties are measured initially at fair value with an infinite live that are not being amortized.

The recoverability of these assets is measured by a comparison of the carrying amounts to the future discounted cash flows the assets are expected to generate.

If such a review indicates that the carrying amount of intangible assets is not recoverable, the carrying amount of such assets is reduced to fair value.

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.

In accordance with the provisions of ASC Topic 360, Impairment or Disposal of Long-Lived Assets , all long-lived assets such as property, plant 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.

22 unchanged sentences

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

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

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

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

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

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

Rental income

Rental income is recognized on a straight line basis over the term of the respective lease agreement.

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

53 unchanged sentences

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

Noncontrolling Interest

Non-controlling 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.

68 unchanged sentences

Recent Accounting Pronouncements

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, 2023, 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.

12 unchanged sentences

Currently, the Company has four reportable business segments:

Gold mineral mining;

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

Distribution of THC-free cannabinoid (CBD) products;

Production and distribution of renewable commodities;

Real property holding

Holding of real property;

Licensor of proprietary pyrolysis technology.

VERDE RESOURCES, INC.

2 unchanged sentences

(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.

In the following table, revenue is disaggregated by primary major product line.

The table also includes a reconciliation of the disaggregated revenue with the reportable segments for the years ended June 30, 2023, and 2022:

7 unchanged sentences

Selling, general & administrative expenses

( 1,688,983 )

( 1,106,537 )

( 3,216,022 )

Loss from operations

( 1,831,692 )

( 1,101,204 )

( 3,296,077 )

Interest expense

( 1,881,807 )

( 1,918,572 )

Loss before income tax

( 1,867,348 )

( 1,806,466 )

( 3,998,960 )

$ ( 209,969 )

$ ( 1,867,348 )

$ ( 100,939 )

$ ( 1,806,466 )

$ ( 3,998,960 )

Total assets at June 30, 2023

7 unchanged sentences

Selling, general & administrative expenses

( 1,910,180 )

Loss from operations

Interest expenses

( 2,017,367 )

Interest expense

( 1,948,086 )

( 1,949,151 )

Loss before income tax

Total assets as June 30, 2021

( 2,925,069 )

( 3,954,414 )

$ ( 178,277 )

$ ( 321,231 )

$ ( 525,254 )

( 2,925,069 )

$ ( 3,954,414 )

Total assets at June 30, 2022

VERDE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2023 AND 2022

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

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

1 unchanged sentence

Years ended June 30,

United States

NOTE 5 - INVENTORIES

1 unchanged sentence

As of June 30,

NOTE 6 - DEPOSITS AND PREPAYMENTS

Deposits and prepayments as of June 30, 2023 and 2022 consisted of the following:

As of June 30,

NOTE 7 –INTANGIBLE ASSETS

The intangible assets comprise a global intellectual property (“IP”) known as “Catalytic Biofraction Process”, whereby, subsidiary Bio Resources Limited (“BRL”) is the beneficial and/or registered proprietor and an exclusive licence assigned to Verde Malaysia for the operation of the IP in the state of Sabah, Malaysia.

The “Catalytic Biofraction Process” is a slow pyrolysis process using a proprietary catalyst to depolymerize 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, it is anticipated that the by-products from this IP with fair value of $ 30,192,771 would lead to certification and issuance of Carbon Avoidance Credits as well as Carbon Removal Credits to generate carbon revenue for the Company.

VERDE RESOURCES, INC.

2 unchanged sentences

(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:

NOTE 8 – PROPERTY, PLANT AND EQUIPMENT

A summary of property, plant and equipment at June 30, 2023 and 2022 is as follows:

As of June 30,

3 unchanged sentences

Project equipment

Motor vehicle

Furniture & fittings

Motor vehicles

Furniture and fittings

accumulated depreciation

( 1,609,414 )

( 1,682,358 )

Foreign exchange adjustment

Depreciation expense for the years ended June 30, 2023 and 2022 totaled $ 254,852 and $ 24,792 , respectively.

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

During the year, cost and accumulated depreciation of property, plant and equipment of $ 1,574,928 and $ 1,574,687 related to CSB, which was disposed during the year, have been removed.

Land and building with net carrying amount of $ 723,981 at June 30, 2023 and $ 746,145 at June 30, 2022 was pledged to a financial institution for facilities granted.

Plant and machinery and motor vehicles with carrying values of $ 849,375 and $ 199,144 are acquired under financing arrangements.

NOTE 9 - DEPOSITS PAID

3 unchanged sentences

- Bio Resources Limited (#1)

- Champmark Sdn Bhd (#2)

Deposits paid for acquisition of property and equipment

- Intellectual property license (#3)

- Vata VM Synergy (M) Sdn Bhd (“VATA”) (#2)

Deposits paid for acquisition of property, plant and equipment and IP (#3)

- Factory site (#4)

Security deposit

(#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 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.

- Factory site (#4)

- Land and building (#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 various unrelated third parties, Taipan International Limited, The Wision Project Limited, and other individuals, in consideration of the issuance of 321,500,000 shares of the Company’s restricted common stock at $ 0.03 per share, valued at $ 9,645,000 , and the issuance of promissory notes with two-year term period with a principal amount of $ 20,355,000 .

321,500,000 shares were issued on May 12, 2021, and the promissory notes were issued on May 12, 2021 and priced at $ 16,290,550 considering the current market interest rate.

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

3 unchanged sentences

(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.

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.

With the completion of the acquisition on October 20,2021, CSB became a wholly owned subsidiary of GBL, and indirectly, of the Company.

(#2) On March 23, 2023, the Company, through its wholly-owned subsidiary Verde Resources (Malaysia) Sdn.

(“Verde Malaysia”), entered into a Shares Sale Agreement (the “SSA Agreement”) with Murugesu A/L M.

Narasimha and Deivamalar A/P Kandiah (“Vendors”), the legal and beneficial owners of Vata VM Synergy (M) Sdn.

(“VATA”), a company incorporated under the laws of Malaysia, to acquire 60% of the issued and paid-up share capital of VATA, a company engaged in the business of providing green technology to government and private sectors and in creating high quality compost using agricultural waste and biomass products in Malaysia.

In relation to the SSA Agreement, the Company through Verde Malaysia also entered into a Shareholders Agreement with Murugesu A/L M.

Narasimha and VATA.

Under the terms of the SSA Agreement, the consideration for the acquisition of 60% of the issued and paid-up share capital of VATA shall be satisfied by the total purchase consideration of MYR 2,250,000 , which includes a first payment of MYR100,000 upon the execution of the SSA Agreement, a second payment of MYR 150,000 within thirty (30) days from the date of fulfilment or waiver of all the conditions set out in the SSA Agreement , and the issuance of shares of the Company’s restricted Common Stock for the balance consideration of MYR 2,000,000 at a price per share of not more than ten percent ( 10 %) discount from the immediate preceding five trading days volume weighted average price (“VWAP”) from the issuance date pursuant to the terms of the SSA Agreement.

As of June 30, 2023, the first payment of MYR100,000 has been made.

Subsequent to year end, the Company has initiated the termination of the agreement on the grounds of non-disclosure of material information by VATA.

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

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

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.

(#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.

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 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 .

The acquisition of the assets comprising a biofraction plant and the right to use its licensed intellectual property known as “Catalytic Biofraction Process” in the state of Sabah, Malaysia was completed on February 24,2023.

(#4) On March 2, 2022, the Company, through VRAP, entered into a Commercial Lease Agreement and Option to Purchase (“Segama Lease Agreement”) 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 Segama Lease Agreement together with a payment of security deposit for the sum of MYR 336,000 ($ 80,000 ) (the “Security Payment”).

(#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 “La Belle Lease Agreement”) to rent a 24-acre property in La Belle from Jon Neal Simmons and Betty Jo Simmon (the “Landlord”) in order to kickstart carbon farming with biochar in Missouri.

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

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

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

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.

1 unchanged sentence

NOTE 10 - 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.

A lump sum payment of MYR260,500 ($ 62,260 ) was made for a mining right over a period of 2 years up to June 13, 2023.

The mining right is amortized on a straight-line basis over the term of the right.

Nevertheless, on April 20, 2023, the subsidiary, CSB, to whom the right belongs, was disposed.

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

Balance as at the 1 July 2021

As of June 30,

Balance as at the July 1, 2022 and July 1, 2021

Amortization charge for the period

Foreign exchange adjustment

Balance as of June 30, 2022

Disposal of subsidiary

Balance as of June 30, 2023 and June 30, 2022

Amortization charge of rights of use lease assets was $ 21,832 and $ 30,779 for the year ended June 30, 2023 and 2022, respectively.

NOTE 10 - AMOUNTS DUE TO RELATED PARTIES

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

VERDE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2023 AND 2022

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

NOTE 11 - AMOUNTS DUE TO RELATED PARTIES AND DIRECTOR

The following breakdown of the balances due to related parties and director, 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.

Amount due to related companies

Borneo Oil Corporation Sdn (“BOC”) (#1)

Taipan International Limited (#2)

Borneo Energy Sdn Bhd (#3)

Victoria Capital Sdn Bhd (#4)

Amount due to director

Jack Wong (#5)

(#1) Borneo Oil Corporation Sdn Bhd (“BOC”) is a wholly owned subsidiary of Borneo Oil Berhad (“BOB”) which holds 13.4 % and 22.8 % of the Company’s issued and outstanding common stock as of June 30, 2023 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.

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

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

(#2) Taipan International Limited who, pursuant to the disposal of BRL to the Company, became one of the shareholders of the Company and held 33.4 % of the Company’s issued and outstanding Common Stock as of June 30, 2023.

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

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

(#3) Borneo Oil Berhad (“BOB”) is ultimate holding company of Borneo Energy Sdn Bhd, and held 13.4 % and 22.8 % of the Company’s issued and outstanding common stock as of June 30, 2023 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.

(#4) Victoria Capital Sdn.

is one of the shareholders of the Company, and held 0.2 % of the Company’s issued and outstanding Common Stock as of June 30, 2023..

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

Jack Wong is the President and Chief Executive of the Company effective October 1, 2022.

Effective March 30, 2023, Jack Wong was appointed Director of the Company for a one ( 1 ) year term, effective March 30, 2023.

Jack Wong will hold the Board position formerly held by Carl Craven.

On September 12, 2023, Jack Wong stepped down from his position as President of the Company, but remains as Chief Executive Office of the Company.

NOTE 12 - 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 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.

Promissory Notes (#1)

Promissory Notes (#2)

(#1) Pursuant to the acquisition of the entire issued and paid-up share capital of Bio Resources Limited from various unrelated third parties, being Taipan International Limited, The Wision Project Limited and other individuals as announced on May 13, 2021, promissory notes with a principal amount of $ 20,355,000 and a two-year term period were issued on May 12, 2021.

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)

With the consummation of the acquisition of BRL on October 12, 2022, on December 9, 2022 the conversion of Promissory Notes was completed pursuant to a Supplementary Agreement dated December 7, 2022, with the issuance of 333,142,389 shares of the Company’s restricted Common Stock, at the price of $ 0.0611 per share, to the 17 Lenders, including the Company’s President and CEO, Jack Wong.

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

2 unchanged sentences

Liquidity risk premium

VERDE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2023 AND 2022

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

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

Balance at the beginning of year

Promissory notes issued to unrelated third parties at fair value

Interest expense

Converted to Company’s restricted Common Stock

( 20,355,000 )

Balance at the end of year

(#2) On March 13, 2023, the Company and its indirect wholly-owned subsidiary CSB entered into a Settlement of Debts Agreement (the “SDA Agreement”) for the settlement in full of CSB’s account payable to Borneo Oil Corporation Sdn Bhd (“BOC”) by way of the issuance on March 13, 2023 of a two year term Promissory Notes with the face value (principal) amount of $675,888, and bearing 2% coupon interest.

The Notes are repayable by May 12, 2025, either in cash or by the issuance of the Company’s restricted Common Stock priced at $0.07 per share.

The fair value of the Promissory Notes of $ 481,023 was calculated using the net present value of estimated future cash flows with the assumptions of risk free rate at 4.03 %, credit spread of 11.6 % and liquidity risk premium of 5.6 %.

The following is a reconciliation of the beginning and ending balances of promissory note:

Balance at the beginning of year

Promissory notes issued to related party at fair value

Interest expense

Balance at the end of year

The Company recorded $ 1,877,739 and $ 1,948,086 interest expense for the years ended June 30, 2023 and 2022, respectively.

Interest payable attributable to promissory notes (#2) was $ 4,068 .

A fair value adjustment of $ 194,865 is recognized in the Profit and Loss during the year ended June 30, 2023.

NOTE 13 - LEASES

12 unchanged sentences

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

VERDE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2023 AND 2022

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

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

1 unchanged sentence

Right-of-use asset (#1)

Right-of-use asset (#2)

Total RoU assets

Operating lease liabilities

Finance lease liabilities

Operating lease liabilities

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, 2023, right-of-use assets were $ 633,109 and lease liabilities were $ 830,890 .

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

For the year ended June 30, 2023 and 2022, the amortization charge on right-of-use assets was $ 117,517 and $ 34,286 , respectively.

(#1) 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 Segama Lease Agreement.

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

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

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.

(#2) This leasing arrangement for the lease of the executive vehicle amounting to $ 84,718 is for a lease term of three ( 3 ) years and includes option to purchase the said vehicle at an agreed consideration as stated in the Lease Agreement.

The purchase option fee shall be applied toward the Purchase Price upon VRI exercising the option to purchase.

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

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.

4 unchanged sentences

Operating lease cost:

Amortisation charge for the year (per ASC 842)

Operating lease expense (per ASC 842)

Total lease expense

VERDE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2023 AND 2022

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

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.

The Company recognizes operating lease expense on a straight-line basis over the term of the operating leases, comprising interest expense determined using the effective interest method, and amortization of the right-of-use asset, as reported within “general and administrative” expense on the accompanying unaudited condensed consolidated statement of operations.

Finance lease expense comprise of interest expenses determined using the effective interest method.

Future Contractual Lease Payments as of June 30, 2023

8 unchanged sentences

For the years ended June 30, 2023 and 2022, the amortization charge was $ 126,388 and $ 34,286 , 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 14 - STOCKHOLDERS’ EQUITY

4 unchanged sentences

There are no preferred shares outstanding as of June 30, 2023, and 2022.

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

Common stock outstanding

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

On July 15, 2022, the Company issued a total of 1,500,000 restricted Common Shares at US$ 0.155 per share to two consultants pursuant to two consultant agreements;

1,000,000 restricted Common Shares were issued to Gary F.

Zimmer and 500,000 restricted Common Shares were issued to Lisa Leilani Zimmer Durand, to serve as consultants to the Company.

An aggregate of $ 232,500 was recognized as stock-based compensation under general and administrative expenses.

During the period ended September 30, 2022, 15,328,029 restricted Common Shares were committed to be issued pursuant to private placement and were subsequently issued on November 7, 2022, comprising of 291,667 restricted Common Shares for US$ 21,000 at US$ 0.072 per share to one non-US shareholder, 15,036,362 restricted Common Shares for US$ 1,323,200 at US$ 0.088 per share to five non-US Shareholders.

VERDE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2023 AND 2022

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

On November 7, 2022, the Company issued 603,181 restricted Common Shares for US$ 53,080 at US$ 0.088 per share to three US Shareholders.

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”).

On December 9, 2022, pursuant to terms of the Consulting Agreement, the Company issued a total of 1,500,000 restricted Common Shares at US$ 0.12 per share to DGL.

On November 30, 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 “Ibrahim Agreement”) with YM Tengku Chanela Jamidah YAM Tengku Ibrahim to engage her as its Director of Strategic Initiatives to promote and make introductions for the benefit of advancing the Company’s business and interests amongst her networks as designated in the Agreement.

Under the Ibrahim Agreement, the Company will pay YM Tengku Chanela Jamidah YAM Tengku Ibrahim by the issuance of 1,000,000 shares of the Company’s restricted Common Stock, par value $ 0.001 per share (the “Common Stock”) in two tranches of 500,000 shares each on or before December 31, 2022 and December 31, 2023 respectively.

The term of the Ibrahim Agreement will be for a fixed period of twenty-four (24) months commencing on November 30, 2022 and both parties may renew the agreement or enter into a new agreement as may be mutually agreed on terms to be separately negotiated.

On December 31, 2022, pursuant to terms of the Ibrahim Agreement, the Company issued a total of 500,000 restricted Common Shares at US$ 0.20 per share to YM Tengku Chanela Jamidah YAM Tengku Ibrahim.

On December 1, 2022, the Company through its wholly-owned subsidiary VRI, a company incorporated in the State of Missouri, U.S.A., entered into a Services Agreement (the “Sorhus Agreement”) with Steven Sorhus to engage him as its Financial Controller to prepare monthly financial reports and financial projections, and oversee daily accounting practices of the Company and its subsidiaries as designated in the Sorhus Agreement.

Under the Sorhus Agreement, the Company will pay Steven Sorhus by the issuance of 800,000 shares of the Company’s restricted Common Stock, par value $ 0.001 per share (the “Common Stock”) in two tranches of 300,000 shares on or before December 31, 2022 and 500,000 shares on or before December 31, 2023.

The term of the Sorhus Agreement will be for a fixed period of twenty-five (25) months commencing on December 1, 2022, and both parties may renew the agreement or enter into a new agreement as may be mutually agreed on terms to be separately negotiated.

On December 31, 2022, pursuant to terms of the Sorhus Agreement, the Company issued a total of 300,000 restricted Common Shares at US$ 0.20 per share to Steven Sorhus.

On December 1, 2022, the Company through its wholly-owned subsidiary VRI, a company incorporated in the State of Missouri, U.S.A., entered into a Services Agreement (the “EMGTA Agreement”) with EMGTA LLC (“EMGTA”).

Under the EMGTA Agreement, EMGTA will provide services to develop business plan and marketing strategy to facilitate business growth, and identify new customers and markets for the Company.

The Company will pay EMGTA by the issuance of 750,000 shares of the Company’s restricted Common Stock, par value $ 0.001 per share (the “Common Stock”) in two tranches of 375,000 shares each on or before December 31, 2022, and December 31, 2023 respectively.

The term of the EMGTA Agreement will be for a fixed period of twenty-five (25) months commencing on December 1, 2022 and both parties may renew the agreement or enter into a new agreement as may be mutually agreed on terms to be separately negotiated.

On December 31, 2022, pursuant to terms of the EMGTA Agreement, the Company issued a total of 375,000 restricted Common Shares at US$ 0.20 per share to EMGTA.

On December 9, 2022, promissory notes with a principal value of $ 20,355,000 was converted pursuant to a Supplementary Agreement dated December 7, 2022, to 333,142,389 shares of the Company’s restricted Common Stock priced at $ 0.0611 per share which represents the last ninety (90) days’ volume weighted average price (VWAP) as of the market closing of January 19, 2022.

On December 15, 2022, the Company entered into a Services Agreement (the “Looi Pei See Agreement”) with Looi Pei See to engage her as its consultant to develop the retail markets for the Company’s products and services in Malaysia and Singapore.

On December 31, 2022, pursuant to terms of the Looi Pei See Agreement, the Company issued a total of 1,140,000 restricted Common Shares at US$ 0.20 per share to Looi Pei See.

The term of the Looi Pei See Agreement will be for a fixed period of thirty-six (36) months .

On February 17, 2023, the Company issued 714,285 restricted Common Shares for $ 50,000 at $ 0.07 per share to one non-US shareholder.

On February 24, 2023, the acquisition of the assets of biofraction plant and the right to use intellectual property license in Sabah, Malaysia from Borneo Energy Sdn Bhd was completed.

The Company had 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 on May 10, 2021, 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 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.

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

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

On 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.

On March 13, 2023, the Company and its indirect wholly-owned subsidiary CSB entered into a Settlement of Debts Agreement (the “SDA Agreement”) and a two year term period Promissory Note with CSB’s creditor Borneo Oil Corporation Sdn Bhd (the “Creditor”) to settle in full a total of USD 675,888 of CSB’s account payable to the Creditor either in cash or by the issuance of new restricted shares of the Company’s Common Stock at a price of $ 0.07 per share.

As set out in the SDA Agreement, the new restricted shares for settlement of the account payable to the Creditor shall be issued to the Creditor or its nominee.

VERDE RESOURCES, INC.

2 unchanged sentences

(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 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.

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.

On March 23, 2023, the Company, through its wholly-owned subsidiary Verde Resources (Malaysia) Sdn.

(“Verde Malaysia”), entered into a Shares Sale Agreement (the “SSA Agreement”) with Murugesu A/L M.

Narasimha and Deivamalar A/P Kandiah (“Vendors”), the legal and beneficial owners of Vata VM Synergy (M) Sdn.

In relation to the SSA Agreement, the Company through Verde Malaysia also entered into a Shareholders Agreement with Murugesu A/L M.

Narasimha and VATA.

Under the terms of the SSA Agreement, the consideration for the acquisition of 60% of the issued and paid-up share capital of VATA shall be satisfied by the total purchase consideration of Malaysia Ringgit MYR 2,250,000, which includes a first payment of Malaysia Ringgit MYR 100,000 upon the execution of the SSA Agreement, a second payment of Malaysia Ringgit MYR 150,000 within thirty (30) days from the date of fulfillment or waiver of all the conditions set out in the SSA Agreement, and the issuance of shares of the Company’s restricted Common Stock for the balance consideration of Malaysia Ringgit MYR 2,000,000 at a price per share of not more than ten percent (10%) discount from the immediate preceding five trading days volume weighted average price (“VWAP”) from the issuance date pursuant to the terms of the SSA Agreement .

Subsequent to year end however, the Company initiated the termination of the SSA Agreement.

On April 21, 2023, the Company issued 1,428,571 restricted Common Shares for $ 100,000 at $ 0.07 per share and 480,768 restricted Common Shares for $ 50,000 at $ 0.104 per share to one non-US shareholder.

There were 1,176,200,278 and 819,188,055 shares of common stock issued and outstanding at June 30, 2023 and June 30, 2022, respectively.

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

NOTE 15 - NET LOSS PER SHARE

1 unchanged sentence

Years ended June 30,

$ ( 3,998,960 )

$ ( 3,954,414 )

Net loss attributable to non-controlling interest

3 unchanged sentences

Weighted average common shares outstanding:

1,019,752,220

Net loss per share:

2 unchanged sentences

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.

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 $ 0.07 per share upon conversion of the Promissory Notes with a principal amount of $ 675,888 at a future date to be to be mutually agreed with the Lenders, and the commitment to issue 375,000 shares, 500,000 shares and 500,000 shares to EMGTA LLC, YM Tengku Chanela Jamidah YAM Tengku Ibrahim and Steven Sorhus on or before December 31, 2023 respectively pursuant to respective contract of service.

VERDE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2023 AND 2022

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

NOTE 16 - INCOME TAX

7 unchanged sentences

British Virgin Island

ALabuan, Malaysia

Loss before income taxes

4 unchanged sentences

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.

2 unchanged sentences

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.

VRDR, VRI and VLI are 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.

corporate income tax regime 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.

The Company has provided for a full valuation allowance against the deferred tax assets of $ 1,079,890 on the expected future tax benefits from the net operating loss (“NOL”) carry forwards of $ 5,142,333 as the management believes it is more likely than not that these assets will not be realized in the future.

Net Operating Losses (NOLs) generated prior to January 1, 2018, are able to be carried forward up to twenty subsequent years.

Any NOLs created for tax years subsequent to that may be carried forward indefinitely.

However, any NOLs arising from tax years ending after December 31, 2020, can only be used to offset up to 80% of taxable income.

For the years ended June 30, 2023, and 2022, 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.

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

VERDE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2023 AND 2022

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

Under the current laws of the Labuan applicable to BRL, income derived from an intellectual property right is subject to tax under the Malaysian Income Tax Act 1967 (ITA) at 24 % of its chargeable income.

However, BRL is not subject to income tax, given that it was a net loss position during the current period presented.

The losses are presently not able to be carried forward to offset against its future operation income as income generating activities have not yet been undertaken.

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 chargeable income.

For the year ended June 30, 2023, the operation in Malaysia incurred $ 472,981 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.

The net operating loss are allowed to be carried forward up to a maximum of ten (10) years of assessments under the current tax legislation in Malaysia.

The Company has provided for a full valuation allowance against the deferred tax assets of $ 113,516 on the expected future tax benefits from the net operating loss (“NOL”) carry forwards as the management believes it is more likely than not that these assets will not be realized in the future.

Years ended June 30,

5 unchanged sentences

Non-deductible items

Tax losses unable to be carried forward

Net operating loss

2 unchanged sentences

As of June 30,

Deferred tax assets:

Net operating loss carry forwards, from

US tax regime

5 unchanged sentences

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.

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 reversed 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, 2023, and June 30, 2022.

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 17 - PENSION COSTS

2 unchanged sentences

During the years ended June 30, 2023, and 2022, $ 19,961 and $ 7,219 contributions were made accordingly.

VERDE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2023 AND 2022

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

NOTE 18 - RELATED PARTY TRANSACTIONS

2 unchanged sentences

Borneo Eco Food Sdn Bhd (#2)

Rental income:

Other income – Sales of wash sand to:

3 unchanged sentences

Professional services provided by:

Federal Capital Investment Limited (#2)

Warisan Khidmat Sdn Bhd (#3)

Interest expense paid to:

Borneo Oil Corporation Sdn Bhd (#9)

Related party balances:

1 unchanged sentence

Borneo Eco Food Sdn Bhd (#2)

Deposits paid for acquisition of property and equipment

Deposits paid for acquisition of property, plant and equipment

Borneo Energy Sdn Bhd (#2)

Other receivable

Jusra Mining Merapoh Sdn Bhd (#1)

Advanced to related parties

Advanced to Global Renewable Sdn Bhd (#4)

Advanced from related parties

Borneo Energy Sdn Bhd (#2)

Taipan International Limited (#6)

Victoria Capital Sdn Bhd (#7)

Trade payables

Warisan Khidmat Sdn Bhd (#3)

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.

Advanced to related party

Vetrolysis Limited (#8)

(#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 and is also the major shareholder of Jusra Mining Merapoh Sdn Bhd.

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

and Borneo Energy Sdn Bhd, and held 13.4% and 22.8% of the Company’s issued and outstanding common stock as of June 30, 2023 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.

(#3) 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.

is a company whose shareholdings is entirely held by a Director of VRSB.

(#4) Borneo Oil Corporation Sdn Bhd (formerly known as Borneo Oil and Gas Corporation Sdn Bhd) (“BOC”) is a wholly owned subsidiary of Borneo Oil Berhad (“BOB”) (holding 13.4% and 22.8% of the Company’s issued and outstanding common stock as of June 30, 2023 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.

Jack Wong is the President and Chief Executive of the Company effective October 1, 2022.

Effective March 30, 2023, Carl Craven voluntarily resigned from his position as Director of the Company.

By resolution of the Board of Directors, Jack Wong was appointed Director of the Company for a one ( 1 ) year term, effective March 30, 2023.

Jack Wong will hold the Board position formerly held by Carl Craven.

On September 12, 2023, Jack Wong stepped down from his position as President of the Company, but remains as Chief Executive Office of the Company.

(#6) Taipan International Limited is one of the shareholders of the Company, and held 33.4% of the Company’s issued and outstanding Common Stock as of June 30, 2023 .

(#7) Victoria Capital Sdn.

is one of the shareholders of the Company, and held 0.2% of the Company’s issued and outstanding Common Stock as of June 30, 2023 .

(#8) Encik Anuar bin Ismail, an indirect significant shareholder, is a director of Vetrolysis Limited.

(#9) Borneo Oil Corporation Sdn Bhd (“BOC”) is a wholly owned subsidiary of Borneo Oil Berhad (“BOB”) which holds 13.4% and 22.8% of the Company’s issued and outstanding common stock as of June 30, 2023 and June 30, 2022, respectively.

VERDE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2023 AND 2022

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

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.

14 unchanged sentences

NOTE 20 - COMMITMENTS AND CONTINGENCIES

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

As of June 30, 2023, the Company had the following commitments:

a) commitment to issue restricted Common Shares to the following service provider on or before December 31, 2023, for services to be performed pursuant to the Service Agreements signed as disclosed in Note 14 on or before December 31, 2023:

Number of shares to be issued

YM Tengku Chanela Jamidah YAM Tengku Ibrahim

Steven Sorhus

b) commitment to repay Promissory Notes with the face value (principal) amount of $ 675,888 , bearing 2 % coupon interest by May 12, 2025, in cash or by issuance of the Company’s restricted Common Shares priced at $ 0.07 per share as disclosed in Note 12.

c) commitment to pay MYR 150,000 within thirty (30) days from the date of fulfillment or waiver of all the conditions set out in the Shares Sale Agreement (the “SSA Agreement”) for acquisition of 60% of the issued and paid-up share capital of Vata VM Synergy (M) Sdn.

(“VATA”), and the issuance of shares of the Company’s restricted Common Stock for the balance consideration of MYR 2,000,000 at a price per share of not more than ten percent ( 10 %) discount from the immediately preceding five trading days volume weighted average price (“VWAP”) from the issuance date pursuant to the terms of the SSA Agreement as disclosed in Note 8.

Subsequent to year end, the Company has initiated the termination of the SSA agreement on the grounds of non-disclosure of material information by VATA.

As of June 30, 2023, the Company has no material contingencies.

VERDE RESOURCES, INC.

4 unchanged sentences

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.

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.

On August 7, 2023, the Company entered into a Memorandum of Understanding (the “MOU”) with Andre van Zyl (“AvZ”) & Green Carbon Industries Group of Companies (“GCI”), headquartered in Western Australia, to actively pursue and put in place a mutually agreeable and fully funded project venture in North America, through the Company to securely ring-fence, support, preserve and implement the existing and related Intellectual Property of both parties and their respective subsidiaries/representatives, as well as to fund and support ongoing and future Research and Developments.

The intended project venture will also be responsible to establish a phased implementation plan for modified, scaled Biochar and Construction Char operations, that will be paired with new Cold Bio Emulsion and Cold Bio Mix technology plant production operations to be established for the production of low CO2 footprint construction material in the territory of North America.

Upon successful implementation of the project venture, there will be further option to expand operations throughout the continents of South America’s, APAC, Europe, and Africa.

This technology makes possible high duty road base and road wearing course installations with superior performance, utilizing more cost-effective local soils and gravels with extended life of road performance, and substantially lower maintenance activities and cost.

On September 12, 2023, Jack Wong stepped down from his position as President of the Company, but remains as Chief Executive Office of the Company.

On September 12, 2023, the Board of Directors of the Company appointed Jack Wong, CEO and Director of the Company, as Chairman of the Board of Directors.

On October 1, 2023, the Company appointed Eric Bava and Andre van Zyl as Chief Operating Officer and Chief Technology Officer respectively to drive the Company’s climate-tech innovation.

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

Independent Accountants:

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