What changed in this filing

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Item 7. Management’s Discussion and Analysis

2024-02-15 compared with 2019-11-13 · 69 added, 50 removed, 31 unchanged (79% of the section changed)

6 unchanged sentences

Results of Operations

We have generated $73,939 and $12,036 revenues for the year ended June 30, 2018 and 2019, respectively, and have recorded a gross loss of $12,201 and $11,105 for the year ended June 30, 2018 and 2019.

We have incurred $416,293 and $162,886 in operating expenses through June 30, 2018 and June 30, 2019.

We have other income $140,464 and $302,724 for the year ended June 30, 2018 and 2019.

The following table provides selected financial data about our company for the year ended June 30, 2019 and June 30, 2018.

The following table provides selected financial data about our company for the years ended June 30, 2023, and June 30, 2022.

Statement of Operation

1 unchanged sentence

Operating expenses

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

The decrease of revenue for the period ended June 30, 2019 was mainly due to a decrease in gold production and gold sales during the period.

The decrease of cost of revenue was mainly due to a decrease of salaries, depreciation and closing stock as at period ended and weakness of average rate for MYR:USD compared with last year.

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

The decrease in operating expenses for the period was mainly due to the due to the weakness of average rate for MYR:USD as mentioned above, and a reduction in the provision for professional and consultancy fees payable to related companies.

The increase of other income was mainly due to the gains on disposal of the property and equipment.

Goodwill impairment

Loss from operation

Interest expense

Net loss before income tax

Provision of Income Tax

Net loss attributable to non-controlling interests

Net loss attributable to shareholders of the group

$ (3,998,960 )

$ (3,947,435 )

The revenue derived from the rental income, compost spreading and distribution of renewable commodities.

We have generated $158,098 and $38,169 revenues for the years ended June 30, 2023, and 2022, respectively, and have recorded a gross loss of $80,055 and $107,187 for the year ended June 30, 2023, and 2022.

Cost of revenue

We incurred cost of revenue of $238,153 and $145,356 in the production and distribution of renewable commodities during the year ended June 30, 2023, and 2022, respectively.

Operating Expenses

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

We have incurred $3,216,022 and $1,905,301 in operating expenses through June 30, 2023, and June 30, 2022.

Operating expenses increased by 68.8%, or $1,310,721, primarily due to increase of consultancy fee and legal and professional fee for the year ended June 30, 2023.

Interest expense

The Company recorded interest expense of $1,881,807 and $1,948,086 on the promissory notes for the years ended June 30, 2023, and 2022, respectively.

Lease interest amounted to $36,765 and $1,065 for the years ended June 30, 2023, and 2022, respectively.

We have other income of $1,215,689 and $12,104 for the year ended June 30, 2023, and 2022.

Other income increased by $1,203,585, primarily due to gain on disposal of a subsidiary of $980,714 and fair value adjustment on convertible promissory notes issued to BOC of $194,865 as disclosed in Note 12 of the financial statements.

We recorded a net loss of $3,998,960 and $3,954,414 for the years ended June 30, 2023, and 2022, respectively.

Plan of Operation

Our Industry and Principal Markets

As reported in the GFMS Gold Surveys H1 2018 released by Thomson Reuters, after closing 2017 in fine fettle gold sentiment changed early in 2018, pressuring prices towards $1,240/oz.

While professional sentiment has been gold-averse, there are shifts in some regional areas of demand and growing scope for a short-covering rally.

In Malaysia, the report expects the Malaysian gold market to benefit from the removal of Goods and Services Tax (GST) as a new government takes over.

The jewelry demand is expected to pick up as a result of the removal of the consumption tax but the rate of recovery will depend largely on the prevailing gold price.

Another report by BMI Research states that global gold mine output growth will pick up in the next few years, supported by higher gold prices and solid projects in key countries.

BMI Research forecasts global gold production to increase from 105moz in 2018 to 125moz by 2026, averaging 2.3% annual growth.

While a steady pace of growth, this represents a slight deceleration in growth rate compared with the previous eight-year average of 3.1%.

Subcontractor

In an effort to enhance the efficiency of mine operations at the Merapoh Gold Mine, Champmark Sdn Bhd (“CSB”) entered into an Operation Term Sheet (“OTS”) agreement in July 2013, to outsource the exploitation works of alluvial gold resources at Site IV-1 of the Merapoh Gold Mine to a third party subcontractor Borneo Oil & Gas Corporation Sdn Bhd (“BOG”).

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

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

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

BOG became the Company’s shareholder in January 29, 2014, and was no longer a third party subcontractor.

Expansion Plans

At present, we are well positioned working with our third party subcontractor, who has the experience and local knowledge to manage our exploitation of alluvial gold at the Merapoh Gold Mine.

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

We are constantly exploring for potential acquisition of mining projects in other parts of the world.

The Company, through its wholly-owned subsidiary company Gold Billion Global Ltd (“GBL”) entered into a letter of intent with Xinjiang Changhe Mining Co., Ltd (“XCM”) on September 29, 2014.

Under the letter of intent, GBL has offered to acquire ownership in XCM for the Ayigate Gold Project subject to due diligence.

The Ayigate gold mine is located within the Tianshan region in Wuqia County, Xinjiang Uygur Autonomous Region of the People’s Republic of China.

After several discussions, the Company decided not to proceed with the offer to acquire ownership in XCM.

As our business is affected by the fluctuations of gold prices, the Company intends to diversify its product line by acquiring mining projects with potential for different mineral resources other than gold.

We continue to hold discussions with other mining companies for potential collaboration to carry out exploration and exploitation works on other mineral resources in Southeast Asia regions.

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

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

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

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

The Company announced a momentous partnership with Green Carbon Industries (“GCI”) in August 2023, securing exclusive access to their invaluable intellectual property (IP) rights.

This groundbreaking collaboration lays the foundation for revolutionary infrastructure development, marked by innovative biochar asphalt showcase projects within the United States.

These projects complement GCI’s established successes in the Asia Pacific (APAC), Middle East, and Africa regions.

Our shared commitment revolves around validating the concept’s feasibility and scalability for carbon sequestration, thereby transforming global infrastructure development, and proactively addressing pressing environmental challenges.

Biochar-asphalt, an innovative, eco-friendly, high performance, and cost-saving alternative to conventional high CO 2 footprint asphalt production and installation, holds immense promise in addressing environmental concerns.

Through the integration and extensive utilization of biochar – a carbon-rich material derived from organic waste, The Company aims to reduce carbon emissions and the carbon footprint of infrastructure projects.

The American showcase projects will serve as compelling evidence of the technology’s capability in carbon sequestration, efficiently mitigating greenhouse gas, enhancing durability and cost efficiencies, all while simultaneously addressing pressing environmental challenges.

Earlier this year, Puro.earth, the world’s foremost crediting platform for durable carbon removal, officially registered the Company as a Carbon Removal Credit supplier as part of its Accelerate program.

This partnership was formalized through a platform agreement signed in April 2023.

It is worth noting that Puro.earth was acquired by Nasdaq in June 2021.

The Company’s endeavors are poised to unlock revenue opportunities by generating Carbon Removal Credits (CORCs).

This critical step incentivizes the broader adoption of climate technologies and enables the Company to supply these credits to companies seeking to offset their carbon footprint in pursuit of net-zero objectives.

Simultaneously, this approach creates an additional and substantial revenue stream for the Company.

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

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

Limited Operating History;

7 unchanged sentences

Liquidity and Capital Resources

The following table provides selected cash flow data about our company for the year ended June 30, 2019 and 2018.

Our primary sources of liquidity are cash generated from private placements.

Cash generated from operations is highly dependent on the sale of our products, which are still under development stage.

Cash and cash equivalents totaled $0.2 million as of June 30, 2023, and $0.4 million as of June 30, 2022.

The following table provides selected cash flow data about our company for the years ended June 30, 2023, and 2022.

Cash Flow Date

Net Profit/(Loss) from operation

Net Cash Generated/(Used) from operating activities

Net Cash Generated/(Used) from investing activities

Net Cash Generated/(Used) from financing activities

For the year ended June 30, 2019, the Company had incurred net profit from operation of $128,733 which posted a positive impact to the company’s cash flow.

The reconciliation on non-cash items such as depreciation and gains on disposal of property, plant and equipment provides negative impact on cash.

In the operation analysis, the net cash provided by operating activities increased from $51,134 used in to $40,702 for the years ended June 30, 2018 and 2019, respectively.

The operation gain of $128,733 was partially offset by the noncash expenses such as $6,016 in depreciation and noncash income of $246,105 in gains on disposal of property, plant and equipment.

In the operating assets and liabilities, the net decrease in current assets, such as accounts receivable, inventory and deposits was $13,989 whereas the net increase in current liabilities, such as accounts payable, accrued liabilities, other payables, advanced from sub-contractor & related parties and taxation payable was $138,069, which provided $88,031 negative cash flow effect to offset the $128,733 gain in operation.

The final result of the cash flow from operating activities was $40,702 positive cash flow effect.

In the investing cash flow analysis, there was no change for the year ended June 30, 2019.

In financing analysis, the repayments of bank loans end up with a negative cash flow of $2,411 for the year ended June 30, 2019, compared to $4,873 repaid to the bank for the year ended June 30, 2018.

The overall cash flow effect was negative.

The net increase in exchange rate effect of $37,661 also provided negative cash flow effect.

The cash and cash equivalents at the end of June 30, 2019, was increased by $630 with $10,662 as balance.

Net cash used in operating activities

$ (1,656,896 )

$ (1,595,961 )

Net cash used in investing activities

$ (1,348,823 )

Net cash provided by financing activities

Effect of exchange rate changes on cash and cash equivalents

Net increase in cash and cash equivalents

$ (1,698,705 )

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

Net Cash Used In Operating Activities.

Cash used in operating activities reflects net loss adjusted for certain non-cash items, including depreciation expense, amortization of intangible assets, gain on disposal of subsidiary, fair value adjustment on convertible promissory notes, and stock-based compensation, and the effects of changes in operating assets and liabilities.

The increase in cash used in operating activities for the year ended June 30, 2023, as compared to 2022 was primarily due to higher net loss adjusted for non-cash interest expense of promissory notes and the increase of accrued liabilities and other payables and advanced from related parties.

In the operation analysis, the net cash used in operating activities increased from $1,595,961 to $1,656,896.

The operation loss of $3,998,960 was partially offset by the noncash expenses such as $254,852 in depreciation, $124,688 in amortization, $519,671 in share-based compensation, $1,877,739 in interest expenses on promissory notes, $60,297 in lease interest expense, fair value adjustment on convertible promissory note of $194,865, gain on disposal of subsidiary of $980,714 and $600 from gain on disposal of property, plant and equipment.

In the operating assets and liabilities, the net decrease in current assets resulted from an increase of other receivables, deposits and prepayments of $104,470, an increase in inventories held of $13,850 and a decrease in accounts receivables of $7,785.

The net increase in current liabilities resulted from $348,913 increase in advances from related parties, $403,259 increase in accrued liabilities and other payables and $75,768 increase in accounts payable, offset by a decrease in advances from director of $12,877.

The final result of the cash flow used in operating activities was $1,656,896.

Net Cash Used In Investing Activities.

The net cash used by investing activity of $387,938 resulted from purchase of property, plant and equipment of $497,302, deposit paid for acquisition of subsidiary company of $21,423, offset by proceeds on disposal of property, plant and equipment of $23,000, net cash inflow from disposal of subsidiary company of $106,647 and net cash inflow on acquisition of a subsidiary company of $1,140 for the year ended June 30, 2023.

Net Cash Provided By Financing Activities.

The net cash provided by financing activities of $1,628,281 resulted from proceeds from shares issued of $1,576,280 and net proceeds from drawdown of loans of $191,000, set off partially by repayments to lease liabilities and related interests for the years ended June 30, 2023, of $138,999 and $10,406 respectively.

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

8 unchanged sentences

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

What changed 10-K/A

Item 7. Management’s Discussion and Analysis