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Item 8. Financial Statements and Supplementary Data

2024-02-15 compared with 2019-11-13 · 963 added, 578 removed, 103 unchanged (94% of the section changed)

3 unchanged sentences

FOR THE YEAR ENDED JUNE 30, 2023

Reports of Independent Registered Accounting Firm

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

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Changes in Shareholders’ Equity (Deficit)

Consolidated Statements of Operations and Comprehensive Loss

Consolidated Statements of Cash Flows

Consolidated Statements of Changes in Stockholders’ Equity

Notes to Consolidated Financial Statements

J&S ASSOCIATE PLT

202206000037 (LLP0033395-LCA) & AF002380

(Registered with PCAOB and MIA)

B-11-14, Megan Avenue II

12,Jalan Yap Kwan Seng, 50450, Kuala Lumpur, Malaysia

+603-4813 9469

info@jns-associate.com

jns-associate.com

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of

VERDE RESOURCES, INC.

(“the Company”)

Report of Independent Registered Public Accounting Firm

Opinion of the Financial Statements

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

and its subsidiaries (the “Company”) as of June 30, 2019 and 2018, and the related consolidated statements of operations, changes in stockholders’ deficit and cash flows for each of the years in the two-year period ended June 30, 2019.

The Company’s management is responsible for these financial statements.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company as of June 30, 2019 and 2018, and the consolidated results of its operations and its cash flows for each of the years in the two-year period ended June 30, 2019, in conformity with accounting principles generally accepted in the United States of America.

Opinion on the Financial Statement

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

and its subsidiaries (the ‘Company’) as of June 30, 2023 and 2022, and the related consolidated statement of operations and comprehensive income, stockholders’ equity (deficit), and cash flows for the years ended June 30, 2023 and 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, 2023 and 2022, and the results of its operations and its cash flows for the years ended June 30, 2023 and 2022, in conformity with accounting principles generally accepted in the United States of America.

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

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

As discussed in Note 14 to the consolidated financial statements, the Company had a working capital deficiency and accumulated deficit from recurring net losses as of June 30, 2019.

All these factors raise substantial doubt about its ability to continue as a going concern.

Management’s plans in regard to these matters are also discussed in Note 14 to the consolidated financial statements.

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

As discussed in Note 3, the Company has generated recurring losses and suffered from an accumulated deficit of $10,292,430 as of June 30, 2023.

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

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

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

Basis for Opinion

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

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

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

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

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

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

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

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

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

As part of our 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.

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

Accordingly, we express no such opinion.

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

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

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

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

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

/s/ Centurion ZD CPA & Co.

Centurion ZD CPA & Co.

(successor to Centurion ZD CPA Limited)

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

Critical Audit Matters

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

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

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

Hong Kong, China

November 13, 2019

Kuala Lumpur, Malaysia

October 13, 2023

VERDE RESOURCES, INC.

CONSOLIDATED BALANCE SHEETS

Current Assets

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

As of June 30,

Current asset:

Cash and cash equivalents

Amount due from related parties

Other deposit & prepayment

Accounts receivable

Amounts due from related party

Deposits and prepayments

Other receivables

Total current assets

Long Term Assets

Property, plant and equipment

Total Long Term Assets

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Non-current assets:

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, plant and equipment

Total non-current assets

LIABILTIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

Advanced from related parties

Accrual and other payables

Taxation payable

Loans from banks

Accrued liabilities and other payables

Finance lease liabilities

Operating lease liabilities

Promissory notes

Amount due to director

Amounts due to related parties

Total current liabilities

Long term Liabilities

Loans from banks (non-current)

Total Long Term Liabilities

Non-current liabilities:

Finance lease liabilities

Operating lease liabilities

Promissory notes

Total non-current liabilities

TOTAL LIABILITIES

STOCKHOLDERS’ DEFICIT

Commitments and contingencies

STOCKHOLDERS’ EQUITY

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

Common stock, par value $0.001, 10,000,000,000 shares authorized, 115,038,909 shares issued and outstanding as of June 30, 2019 & June 30, 2018 respectively

Common stock, $ 0.001 par value;

10,000,000,000 shares authorized;

1,176,200,278 and 819,188,055 issued and outstanding as of June 30, 2023 and 2022

Additional paid-in capital

Accumulated other comprehensive income

Accumulated deficit

Accumulated other comprehensive income(loss)

Non-controlled interest

Total Stockholders’ Deficit

( 10,292,430 )

( 10,357,920 )

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT

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

Non-controlling interest

Stockholders’ equity

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

See accompanying notes to consolidated financial statements.

VERDE RESOURCES, INC.

Consolidated Statements of Operations

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

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

Years ended June 30,

Cost of revenue

Operating expenses:

Selling, general & administrative expenses

LOSS FROM OPERATIONS

OTHER INCOME (EXPENSE)

NET INCOME (LOSS) BEFORE INCOME TAX

Provision of Income Tax

Non-controlled interest

Net profit (loss) contributed to the group

Other comprehensive income(loss)

Foreign currency translation gain(loss)

Comprehensive loss

Basic and Diluted Loss per Common Share

Weighted Average Number of Common Shares Outstanding

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

Verde Resources, Inc.

Statement of Changes in Stockholders’ Equity (Deficit)

Common Shares

Non-Controlling

Accumulated Other Comprehensive

Income (Loss)

Balance - June 30, 2017

Selling, general and administrative expenses

( 3,216,022 )

( 1,905,301 )

Shares issued

Net loss for the period

Foreign currency translation loss

Balance - June 30, 2018

Goodwill impairment

Total operating expenses

( 3,216,022 )

( 1,910,180 )

Net profit for the period

Foreign currency translation gain

Balance - June 30, 2019

LOSS FROM OPERATION

( 3,296,077 )

( 2,017,367 )

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

Other (expense) income:

Interest expense

( 1,918,572 )

( 1,949,151 )

Total other expense, net

( 1,937,047 )

LOSS BEFORE INCOME TAXES

( 3,998,960 )

( 3,954,414 )

Income tax expense

( 3,998,960 )

( 3,954,414 )

Net loss attributable to noncontrolling interest

Net loss attributable to Verde Resources Inc., shareholders

( 3,998,960 )

( 3,947,435 )

$ ( 3,998,960 )

$ ( 3,954,414 )

Other comprehensive (loss):

- Foreign currency adjustment income (loss)

other comprehensive loss attributable to non-controlling interest

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

COMPREHENSIVE LOSS

$ ( 4,820,611 )

$ ( 3,870,910 )

Net loss per share

Weighted average common shares outstanding

1,019,752,220

See accompanying notes to consolidated financial statements.

VERDE RESOURCES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

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

Years ended June 30,

Cash flows from operating activities:

Net profit (loss)

Adjustments to reconcile loss to net cash used in operations

Waiver of consultancy service fee

$ ( 3,998,960 )

$ ( 3,954,414 )

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

Depreciation of property, plant and equipment

Stock-based compensation

Gain on disposal of fixed assets

Issuance of common stock (non-cash)

Changes in operating assets and liabilities

(Increase) decrease in:

Amount due from related party

Deposits and prepayment

Increase (decrease) in:

Accounts payable

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

Change in operating assets and liabilities:

Accounts receivable

Other deposits and prepayments

Extractive activities mining

Other receivables

Accounts payables

Accrued liabilities and other payables

Advanced from sub-contractor & related parties

GST Tax payable

Advanced from director

Advanced from related parties

Net cash used in operating activities

( 1,656,896 )

( 1,595,961 )

Cash flows from investing activities:

Proceeds from disposal of plant and equipment

Addition of motor vehicle

Net cash provided by investing activities

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, plant and equipment

( 1,073,153 )

Net cash used in investing activities

( 1,348,823 )

Cash flows from financing activities:

Proceeds from bank loans

Repayments of bank loans

Repayment to lease liabilities

Drawdown of bank loan

Repayment of bank loan

Lease interest paid

Proceeds from issuance of common stock

Net cash (used in) provided by financing activities

Net (decrease) in cash and cash equivalents

Effect of exchange rate changes on cash

Net (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

Supplementary cash flow information

Income taxes paid

Interest paid

Supplementary non-cash information

Reorganization

Issuance of common stock (non-cash)

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

Net cash provided by financing activities

Net change in cash and cash equivalent

( 1,955,190 )

Foreign currency translation adjustment

Net change in cash and cash equivalents

( 1,698,705 )

BEGINNING OF YEAR

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid for income taxes

Cash paid for interest

NON-CASH INVESTING AND FINANCING ACTIVITIES:

Issuance of common stock

- Deposit paid for acquisition of property and equipment

See accompanying notes to consolidated financial statements.

VERDE RESOURCES, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE YEARS ENDED JUNE 30, 2023 AND 2022

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

Common stock to be issued

Additional paid-in capital

Accumulated other comprehensive income (loss)

Non-controlling interest

stockholders’

Balance as of July 1, 2021

$ ( 5,913,255 )

$ ( 441,834 )

Shares issued for acquisition

Stock based compensation

Shares to be issued for private placement

Accretion of interest

Net loss for the year

( 3,947,435 )

( 3,954,414 )

Foreign currency translation adjustment

Balance as of June 30, 2022

$ ( 10,357,920 )

Balance as of July 1, 2022

$ ( 10,357,920 )

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.

VERDE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

FOR THE YEARS ENDED JUNE 30, 2023 AND 2022

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

NOTE 1 - ORGANIZATION AND BUSINESS BACKGROUND

Verde Resources, Inc.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Effective February 20, 2016, Mr.

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

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

Effective February 20, 2016, Mr.

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

Balakrishnan B S Muthu and Mr.

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

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

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

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

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

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:-

Name of subsidiary

Place of incorporation

Principal activities

and place of operation

Verde Resources Asia Pacific Limited (“VRAP”)

British Virgin Islands

Investment holding

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

Provision of consultation service and distribution of renewable agricultural commodities

Verde Renewables, Inc.

State of Missouri, U.S.A.

Management of a processing and packaging facility

Verde Life Inc.

State of Oregon, U.S.A.

Distribution of THC-free cannabinoid (CBD) products

The Wision Project Sdn Bhd (“Wision”)

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

Verde Estates LLC (“VEL”)

State of Missouri, U.S.A.

Holding real property

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”).

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)

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.

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

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

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

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

Basis of Presentation

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

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

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

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

Basis of Consolidation

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

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

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

Variable Interest Entity

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

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

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

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

act as principal of CSB;

obligation to provide financial support to CSB;

option to purchase an equity interest in CSB;

entitlement to future benefits and residual value of CSB;

right to impose no dividend policy;

human resources management.

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

With the above agreements, GBL demonstrates its ability to control CSB as the primary beneficiary and the operating results of the VIE was included in the condensed consolidated financial statements for the year ended June 30, 2014.

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

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

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

Use of Estimates

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

Use of Estimates and Assumptions

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

1 unchanged sentence

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

Cash and Cash Equivalents

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

The Company had $10,662 and $10,032 in cash and cash equivalents at June 30, 2019 and June 30, 2018, respectively.

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

Actual results may differ from these estimates.

Basis of Consolidation

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

and its subsidiaries.

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

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

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

Currently, the Company operates in four reportable operating segments.

Concentrations of Credit Risk

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’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.

1 unchanged sentence

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.

Risks and Uncertainties

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

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)

Cash and Cash Equivalents

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

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

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

Accounts Receivable

3 unchanged sentences

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

At June 30, 2019 and June 30, 2018, the Company has no allowance for doubtful accounts, as per management’s judgment based on their best knowledge.

As of June 30, 2019 and June 30, 2018, the longest credit term for certain customers are 60 days.

Provision for Doubtful Accounts

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

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

At June 30, 2019 and June 30, 2018 there was no allowance for doubtful accounts.

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

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

These tiers include:

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

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

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

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

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

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

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

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

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

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

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

The Company did not have any convertible bonds as of June 30, 2019 and June 30, 2018.

Foreign Currency Translation

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

At June 30, 2023 and 2022, the Company has no allowance for doubtful accounts, as per management’s judgment based on their best knowledge.

As of June 30, 2023, and 2022, the longest credit term for certain customers are 60 days.

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

Costs include material, labor and overhead costs.

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

As of June 30, 2023, and 2022, the Company did not record an allowance for obsolete inventories, nor have there been any write-offs.

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:

Expected useful life

Land and buildings

3 - 27.5 years

Plant and machinery

Office equipment

Project equipment

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.

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

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

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, 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.

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

VERDE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2023 AND 2022

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

Revenue Recognition

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

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

identify the contract with a customer;

identify the performance obligations in the contract;

determine the transaction price;

allocate the transaction price to performance obligations in the contract;

recognize revenue as the performance obligation is satisfied.

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

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

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

Product sales

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

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

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

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

discounts, returns and rebates.

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

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.

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

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

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

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

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

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

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

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

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

The Company recognized no impairment of ROU assets as of June 30, 2023, and 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 operating lease is included in operating lease right-of-use assets and operating lease liabilities as current and non-current liabilities in the consolidated balance sheets at June 30, 2023 and 2022.

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

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

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

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

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

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

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

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

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

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

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

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

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

Uncertain Tax Positions

The Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the ASC Topic 740 provisions of Section 740-10-25 for the years ended June 30, 2023, and 2022.

Foreign Currencies Translation

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

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

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

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

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

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

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

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

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

Year-end MYR :

$1 exchange rate

Average MYR :

$1 exchange rate

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

Translation of MYR into U.S.

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

June 30, 2023

June 30, 2022

Year-end MYR:US$ exchange rate

Annualized average MYR:US$ exchange rate

Comprehensive Income

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

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

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

Segment Reporting

The Company currently engages in one operation segment:

The expenses incurred were consisting principally of management services.

The Company’s major operation is located in Malaysia.

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

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

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

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

VERDE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2023 AND 2022

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

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.

Net Loss per Share

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

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

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

Stock Based Compensation

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

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

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

Retirement Plan Costs

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

Mineral Acquisition and Exploration Costs

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

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

Mineral property acquisition and exploration costs are expensed as incurred.

8 unchanged sentences

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

Revenue Recognition

In accordance with the ASC Topic 605, “Revenue Recognition”, the Company recognizes revenue when persuasive evidence of an arrangement exists, transfer of title has occurred or services have been rendered, the selling price is fixed or determinable and collectibility is reasonably assured.

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

The Company generally recognizes its revenues at the time of gold sales and its selling price is determined by the prevailing market value of gold bullion quoted by the leading registered gold trading company in Malaysia.

Sales invoice will be duly presented to the trading companies when delivery is completed and revenue is then recognized.

Cost of Revenue

The cost of revenue consists of exploration cost, mine equipment depreciation, production cost, mine site management cost, sub-contractor cost, and royalty and tribute payment which are levied on the gross revenue at the rate of 18% on the invoiced value of gold sales.

Advertising Expenses

Advertising costs are expensed as incurred under ASC Topic 720, “Advertising Costs” .

Advertising expenses incurred for the years ended June 30, 2019 and year ended June 30, 2018 were $0.

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

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

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

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

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

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

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

As of June 30, 2019 and June 30, 2018, the Company did not have any significant unrecognized uncertain tax positions.

Related Parties

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

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

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

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

d) principal owners of the Company;

e) management of the Company;

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

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

VERDE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2023 AND 2022

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

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

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

The disclosures shall include:

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

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

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

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

Commitments and Contingencies

The Company follows the ASC 450-20, Commitments to report accounting for contingencies.

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

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

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

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

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

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

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

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

Fair Value of Financial Instruments

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

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

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

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

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

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

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

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

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

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

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

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

VERDE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2023 AND 2022

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

Recent Accounting Pronouncements

The FASB has issued Accounting Standards Update (ASU) No.

2018-01, Leases (Topic 842):Land Easement Practical Expedient for Transition to Topic 842, which clarifies the application of the new leases guidance to land easements and eases adoption efforts for some land easements.

ASU 2018-01 is expected to reduce the cost of adopting the new leases standard for certain land easements.

It is also an attempt to help ensure that companies can make a successful transition to the standard without compromising the quality of information provided to investors about these transactions.

Land easements (also commonly referred to as rights of way) represent the right to use, access, or cross another entity’s land for a specified purpose.

Land easements are used by utility and telecommunications companies, for example, when they need to take a small strip of land, or easement, to bury wires.

Not all companies have historically accounted for them as leases.

Stakeholders pointed out that the requirement to evaluate all old and existing land easements, sometimes numbering in the tens of thousands, to determine if they meet the definition of a lease under the new standard could be very costly.

They also noted there would be limited benefit to applying this requirement, as many of their land easements would not meet the definition of a lease, or even if they met that definition, many of their easements are prepaid and, therefore, already are recognized on the balance sheet.

The land easements ASU addresses this by:

Providing an optional transition practical expedient that, if elected, would not require an organization to reconsider their accounting for existing land easements that are not currently accounted for under the old leases standard;

Clarifying that new or modified land easements should be evaluated under the new leases standard, once an entity has adopted the new standard.

The FASB issued an Accounting Standards Update (ASU No.

2018-02) that helps organizations address certain stranded income tax effects in accumulated other comprehensive income (AOCI) resulting from the Tax Cuts and Jobs Act.

2018-02, Income Statement—Reporting Comprehensive Income (Topic 220):

Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, provides financial statement preparers with an option to reclassify stranded tax effects within AOCI to retained earnings in each period in which the effect of the change in the U.S.

federal corporate income tax rate in the Tax Cuts and Jobs Act (or portion thereof) is recorded.

The ASU requires financial statement preparers to disclose:

A description of the accounting policy for releasing income tax effects from AOCI;

Whether they elect to reclassify the stranded income tax effects from the Tax Cuts and Jobs Act;

Information about the other income tax effects that are reclassified.

The amendments affect any organization that is required to apply the provisions of Topic 220, Income Statement—Reporting Comprehensive Income, and has items of other comprehensive income for which the related tax effects are presented in other comprehensive income as required by GAAP.

The amendments are effective for all organizations for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years.

Early adoption is permitted.

Organizations should apply the proposed amendments either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S.

federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized.

FASB Adds SEC Guidance to the Codification on the Tax Cuts and Jobs Act.

The FASB has issued Accounting Standards Update (ASU) No.

2018-05, Income Taxes (Topic 740):

Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No.

ASU 2018-05 amends certain SEC material in Topic 740 for the income tax accounting implications of the recently issued Tax Cuts and Jobs Act (Act).

ASU 2018-05 adds the following guidance, among other things, to the FASB Accounting Standards Codification™ regarding the Act:

Question 1:If the accounting for certain income tax effects of the Act is not completed by the time a company issues its financial statements that include the reporting period in which the Act was enacted, what amounts should a company include in its financial statements for those income tax effects for which the accounting under Topic 740 is incomplete?

Answer 1:In a company’s financial statements that include the reporting period in which the Act was enacted, a company must first reflect the income tax effects of the Act in which the accounting under Topic 740 is complete.

These completed amounts would not be provisional amounts.

The company would then also report provisional amounts for those specific income tax effects of the Act for which the accounting under Topic 740 will be incomplete but a reasonable estimate can be determined.

For any specific income tax effects of the Act for which a reasonable estimate cannot be determined, the company would not report provisional amounts and would continue to apply Topic 740 based on the provisions of the tax laws that were in effect immediately prior to the Act being enacted.

For those income tax effects for which a company was not able to determine a reasonable estimate (such that no related provisional amount was reported for the reporting period in which the Act was enacted), the company would report provisional amounts in the first reporting period in which a reasonable estimate can be determined.

If an entity accounts for certain income tax effects of the Act under a measurement period approach, what disclosures should be provided?

Answer 2:The staff believes an entity should include financial statement disclosures to provide information about the material financial reporting impacts of the Act for which the accounting under Topic 740 is incomplete, including:

Qualitative disclosures of the income tax effects of the Act for which the accounting is incomplete;

Disclosures of items reported as provisional amounts;

Disclosures of existing current or deferred tax amounts for which the income tax effects of the Act have not been completed;

The reason why the initial accounting is incomplete;

The additional information that is needed to be obtained, prepared, or analyzed in order to complete the accounting requirements under Topic 740;

The nature and amount of any measurement period adjustments recognized during the reporting period;

The effect of measurement period adjustments on the effective tax rate;

When the accounting for the income tax effects of the Act has been completed.

ASU 2018-05 is effective upon inclusion in the FASB Codification.

The FASB has issued an Accounting Standards Update (ASU) intended to reduce cost and complexity and to improve financial reporting for nonemployee share-based payments.

The ASU expands the scope of Topic 718, Compensation—Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services.

Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned.

The ASU supersedes Subtopic 505-50, Equity—Equity-Based Payments to Non-Employees.

The amendments in this ASU are effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year.

For all other companies, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020.

Early adoption is permitted, but no earlier than a company’s adoption date of Topic 606, Revenue from Contracts with Customers.

The FASB has released Accounting Standards Update (ASU) No.

2018-09, Codification Improvements.

ASU 2018-09 affects a wide variety of Topics in the Codification including:

Amendments to Subtopic 220-10,Income Statement— Reporting Comprehensive Income—Overall.The guidance in paragraph 220-10-45-10B(b) states that taxes not payable in cash are required to be reported as a direct adjustment to paid-in capital.

This requirement conflicts with other guidance in Topic 740,Income Taxes, Subtopic 805-740,Business Combinations—Income Taxes, and Subtopic 852-740,Reorganizations—Income Taxes, which generally states that income taxes and adjustments to those accounts upon a business combination or a bankruptcy that is eligible for fresh-start reporting must be recognized in income.

2018-09 clarifies the guidance in paragraph 220-10-45-10B by removing the generic phrase taxes not payable in cash and adding guidance that is specific to certain quasi-reorganizations.

Amendments to Subtopic 470-50,Debt—Modifications and Extinguishments.The guidance in paragraph 470-50-40-2 requires that the difference between the reacquisition price of debt and the net carrying amount of extinguished debt be recognized in income in the period of extinguishment.

The guidance in that paragraph was not amended by FASB Statement No.

155, Accounting for Certain Hybrid Financial Instruments, or FASB Statement No.

159,The Fair Value Option for Financial Assets and Financial Liabilities;

therefore, it does not specifically address extinguishments of debt when the fair value option is elected.

2018-09 clarifies that:

When the fair value option has been elected on debt that is extinguished, the net carrying amount of the extinguished debt equals its fair value at the reacquisition date, and

Related gains or losses in other comprehensive income must be included in net income upon extinguishment of the debt.

Amendments to Subtopic 480-10,Distinguishing Liabilities from Equity—Overall.The guidance in paragraph 480-10-25-15 prohibits the combination of freestanding financial instruments within the scope of Subtopic 480-10 with noncontrolling interest, unless the combination is required by Topic 815,Derivatives and Hedging.

The example in paragraphs 480-10-55-55 and 480-10-55-59 conflicts with that guidance by stating that freestanding option contracts with the terms in Derivative 2 should be accounted for on a combined basis with the noncontrolling interest.

The source of the example in paragraph 480-10-55-59 is from EITF Issue No.

00-4, “Majority Owner’s Accounting for a Transaction in the Shares of a Consolidated Subsidiary and a Derivative Indexed to the Noncontrolling Interest in That Subsidiary.” Issue 00-4 was nullified by FASB Statement No.

150,Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity, but a conforming amendment to the example in paragraph 480-10-55-59 was not made to align it with the guidance in Statement 150.

The amendment in this Update conforms the guidance in paragraphs 480-10-55-55 and 480-10-55-59 with the guidance in Statement 150.

Amendments to Subtopic 718-740,Compensation—Stock Compensation—Income Taxes.The guidance in paragraph 718-740-35-2, as amended, is unclear on whether an entity should recognize excess tax benefits (or tax deficiencies) for compensation expense that is taken on the entity’s tax return.

The amendment to paragraph 718-740-35-2 in ASU No.

2018-09 clarifies that an entity should recognize excess tax benefits (that is, the difference in tax benefits between the deduction for tax purposes and the compensation cost recognized for financial statement reporting) in the period when the tax deduction for compensation expense is taken on the entity’s tax return.

This includes deductions that are taken on the entity’s return in a different period from when the event that gives rise to the tax deduction occurs and the uncertainty about whether (1) the entity will receive a tax deduction and (2) the amount of the tax deduction is resolved.

Amendments to Subtopic 805-740,Business Combinations— Income Taxes.The amendments to paragraph 805-740-25-13 removes a list of three methods for allocating the consolidated tax provision to an acquired entity after acquisition that is inconsistent with guidance in Topic 740.

The three methods for tax allocation described in paragraph 805-740-25-13 do not follow the broad principles of being systematic, rational, and consistent with Topic 740.

The amendment removes the allocation methods in paragraph 805-740-25-13 and conforms the guidance in Subtopic 805-740 with the guidance in Topic 740.

Amendments to Subtopic 815-10,Derivatives and Hedging— Overall.The amendment to paragraphs 815-10-45-4 and 815-10-45-5 in ASU No.

2018-09 clarifies the circumstances in which derivatives may be offset.

Under certain specific conditions, derivatives may be offset if three of the four criteria in paragraph 210-20-45-1 are met.

One of the criteria—the intent to set off—is not required to offset derivative assets and liabilities for certain amounts arising from derivative instruments recognized at fair value and executed with the same counterparty under a master netting agreement.

Amendments to Subtopic 820-10,Fair Value Measurement— Overall.The amendments to paragraph 820-10-35-16D in ASU No.

2018-09 clarify the Board’s decisions about the measurement of the fair value of a liability or instrument classified in a reporting entity’s shareholder’s equity from the perspective of a market participant that holds an identical item as an asset at the measurement date.

A technical inquiry questioned how transfer restrictions embedded in an asset should affect the fair value of the corresponding liability or equity instrument from the perspective of the issuer.

The amendments correct the wording of paragraph 820-10-35-16D to clarify how an entity should account for those restrictions.

The amendments are not intended to substantively change the application of GAAP.

However, it is possible that the amendments may result in a change to existing practice for some entities.

The amendments to paragraphs 820-10-35-18D through 35-18F and 820-10-35- 18H through 35-18L revise the current guidance to allow portfolios of financial instruments and nonfinancial instruments accounted for as derivatives in accordance with Topic 815 to use the portfolio exception to valuation.

The amendments improve guidance by adding wording that explicitly states that a group of financial assets, financial liabilities, nonfinancial items accounted for as derivatives in accordance with Topic 815, or a combination of these items that otherwise meet the criteria to do so are permitted to apply the portfolio exception for measuring fair value of the group.

This allows entities to measure fair value on a net basis for those portfolios in which financial assets and financial liabilities and nonfinancial instruments are managed and valued together.

Amendments to Subtopic 940-405,Financial Services—Brokers and Dealers—Liabilities.Paragraph 940-405-55-1 contains incomplete guidance about offsetting on the balance sheet.

The current guidance focuses only on explicit settlement dates as a determining criterion for offsetting when, in fact, an entity should consider all the requirements in Section 210-20-45,Balance Sheet—Offsetting—Other Presentation Matters, to determine whether a right of offset exists.

There is similar guidance in paragraph 942-210-45-3.

Paragraphs 940-405-55-1 and 942-210-45- 3 originated from two different AICPA Audit and Accounting Guides and paraphrase the guidance in Subtopic 210-20, albeit each slightly differently.

The Board decided to amend both paragraphs so that the industry Topic guidance refers to the complete guidance for offsetting.

Amendments to Subtopic 962-325,Plan Accounting—Defined Contribution Pension Plans—Investments—Other.The amendment to Subtopic 962-325 removes the stable value common collective trust fund from the illustrative example in paragraph 962-325-55-17 to avoid the interpretation that such an investment would never have a readily determinable fair value and, therefore, would always use the net asset value per share practical expedient.

Rather, a plan should evaluate whether a readily determinable fair value exists to determine whether those investments may qualify for the practical expedient to measure at net asset value in accordance with Topic 820.

Transition and Effective Date.

The transition and effective date guidance is based on the facts and circumstances of each amendment.

Some of the amendments in ASU No.

2018-09 do not require transition guidance and will be effective upon issuance of ASU No.

However, many of the amendments do have transition guidance with effective dates for annual periods beginning after December 15, 2018, for public business entities.

In addition, there are some conforming amendments in ASU No.

2018-09 that have been made to recently issued guidance that is not yet effective that may require application of the transition and effective date guidance in the original ASU.

For example, there are conforming amendments to Topic 820 and Subtopic 944-310, Financial Services—Insurance—Receivables, that are related to the amendments in Accounting Standards Update No.

2016-01, Financial Instruments—Overall (Subtopic 825-10):

Recognition and Measurement of Financial Assets and Financial Liabilities, which require application of the transition and effective date guidance in that ASU.

The FASB has issued Accounting Standards Update (ASU) No.

2018-10, Codification Improvements to Topic 842, Leases.

2018-10, among other things, amends Topic 842 as follows:

Residual Value Guarantees - Paragraph 460-10-60-32 in Topic 460, Guarantees - This paragraph incorrectly refers readers to the guidance in Topic 842 about sale-leaseback-sublease transactions, when, in fact, it should refer readers to the guidance about guarantees by a seller-lessee of the underlying asset’s residual value in a sale and leaseback transaction.

The amendment corrects the cross-reference in paragraph 460-10-60-32.

Rate Implicit in the Lease - The amendment clarifies that a rate implicit in the lease of zero should be used when applying the definition of the term “rate implicit” in the lease results in a rate that is less than zero.

Lessee Reassessment of Lease Classification - The amendment consolidates the requirements about lease classification reassessments into one paragraph and better articulates that an entity should perform the lease classification reassessment on the basis of the facts and circumstances, and the modified terms and conditions, if applicable, as of the date the reassessment is required.

Lessor Reassessment of Lease Term and Purchase Option - The amendment clarifies that a lessor should account for the exercise by a lessee of an option to extend or terminate the lease or to purchase the underlying asset as a lease modification unless the exercise of that option by the lessee is consistent with the assumptions that the lessor made in accounting for the lease at the commencement date of the lease (or the most recent effective date of a modification that is not accounted for as a separate contract).

Variable Lease Payments That Depend on an Index or a Rate - The amendment clarifies that a change in a reference index or rate upon which some or all of the variable lease payments in the contract are based does not constitute the resolution of a contingency subject to the guidance in paragraph 842-10-35-4(b).

Variable lease payments that depend on an index or a rate should be remeasured, using the index or rate at the remeasurement date, only when the lease payments are remeasured for another reason (that is, when one or more of the events described in paragraph 842-10-35- 4(a) or (c) occur or when a contingency unrelated to a change in a reference index or rate under paragraph 842-10-35-4(b) is resolved).

Investment Tax Credits - There is an inconsistency in terminology used about the effect that investment tax credits have on the fair value of the underlying asset between the definition of the term rate implicit in the lease and the lease classification guidance in paragraph 842-10-55-8.

The amendment removes that inconsistency by clarifying that the period covered by a lessor-only option to terminate the lease is included in the lease term.

Lease Term and Purchase Option - The description in paragraph 842-10-55- 24 about lessor-only termination options is inconsistent with the description in paragraph 842-10-55- 23 about the noncancellable period of a lease.

The amendment removes that inconsistency by clarifying that the period covered by a lessor-only option to terminate the lease is included in the lease term.

Transition Guidance for Amounts Previously Recognized in Business Combinations - The transition guidance for lessors in paragraph 842-10-65-1(h)(3) is unclear because it relates to leases classified as direct financing leases or sales-type leases under Topic 840, while the lead-in sentence to paragraph 842-10-65-1(h) provides transition guidance for leases classified as operating leases under Topic 840.

The amendment clarifies that paragraph 842-10-65-1(h)(3) applies to lessors for leases classified as direct financing leases or sales-type leases under Topic 842, not Topic 840.

In other words, paragraph 842- 10-65-1(h)(3) applies when an entity does not elect the package of practical expedients in paragraph 842-10-65-1(f), and, for a lessor, an operating lease acquired as part of a previous business combination is classified as a direct financing lease or a sales-type lease when applying the lease classification guidance in Topic 842.

The amendment also cross-references to other transition guidance applicable to those changes in lease classification for lessors.

Certain Transition Adjustments - The amendments clarify whether to recognize a transition adjustment to earnings rather than through equity when an entity initially applies Topic 842 retrospectively to each prior reporting period.

Transition Guidance for Leases Previously Classified as Capital Leases under Topic 840 - Paragraph 842-10-65-1(r) provides guidance to lessees for leases previously classified as capital leases under Topic 840 and classified as finance leases under Topic 842.

Paragraph 842-10-65-1(r)(4) provides subsequent measurement guidance before the effective date when an entity initially applies Topic 842 retrospectively to each prior reporting period, but it refers readers to the subsequent measurement guidance in Topic 840 about operating leases.

It should refer them to the subsequent measurement guidance applicable to capital leases.

The amendment corrects that reference.

Transition Guidance for Modifications to Leases Previously Classified as Direct Financing or Sales-Type Leases under Topic 840 - Paragraph 842-10-65-1(x) provides transition guidance applicable to lessors for leases previously classified as direct financing leases or sales-type leases under Topic 840 and classified as direct financing leases or sales-type leases under Topic 842.

For modifications to those leases beginning after the effective date, paragraph 842-10-65-1(x)(4) refers readers to other applicable guidance in Topic 842 to account for the modification, specifically paragraphs 842-10-25-16 through 25- 17, depending on how the lease is classified after the modification.

Stakeholders noted that it should refer to how the lease is classified before the modification to be consistent with the guidance provided in paragraphs 842-10-25-16 through 25-17.

The amendment corrects that inconsistency.

Transition Guidance for Sale and Leaseback Transactions - The amendments clarify that the transition guidance on sale and leaseback transactions in paragraph 842-10-65-1(aa) through (ee) applies to all sale and leaseback transactions that occur before the effective date and corrects the referencing issues noted.

Impairment of Net Investment in the Lease - Paragraph 842-30-35-3 provides guidance to lessors for determining the loss allowance of the net investment in the lease and describes the cash flows that should be considered when the lessor determines that loss allowance.

Stakeholders questioned whether the guidance, as written, would accelerate and improperly measure the loss allowance because the cash flows associated with the unguaranteed residual asset appear to be excluded from the evaluation.

The amendment clarifies the application of the guidance for determining the loss allowance of the net investment in the lease, including the cash flows to consider in that assessment.

Unguaranteed Residual Asset - The amendment clarifies that a lessor should not continue to accrete the unguaranteed residual asset to its estimated value over the remaining lease term to the extent that the lessor sells substantially all of the lease receivable associated with a direct financing lease or a sales-type lease, consistent with Topic 840.

Effect of Initial Direct Costs on Rate Implicit in the Lease - The ordering of the illustration in Case C of Example 1 in paragraphs 842-30-55- 31 through 55-39 raised questions about how initial direct costs factor into determining the rate implicit in the lease for lease classification purposes for lessors only.

The amendment more clearly aligns the illustration to the guidance in paragraph 842-10-25-4.

Failed Sale and Leaseback Transaction - The amendment clarifies that a seller lessee in a failed sale and leaseback transaction should adjust the interest rate on its financial liability as necessary to ensure that the interest on the financial liability does not exceed the total payments (rather than the principal payments) on the financial liability.

This clarification is also reflected in the relevant illustration on failed sale and leaseback transactions that is contained in Subtopic 842-40.

The FASB has issued Accounting Standards Update (ASU) No.

2018-11, Leases (Topic 842):

Targeted Improvements.

This ASU is intended to reduce costs and ease implementation of the leases standard for financial statement preparers.

“The targeted improvements in the ASU address areas our stakeholders identified as sources of unnecessary cost or complexity in the leases standard,” stated FASB Chairman Russell G.

“They represent the FASB’s commitment to proactively address implementation issues raised by our stakeholders to ensure a successful transition to the new standard without compromising the quality of information provided to investors.”

ASU 2018-11 provides a new transition method and a practical expedient for separating components of a contract.

The FASB has issued Accounting Standards Update (ASU) No.

2019-01, Leases (Topic 842):

Codification Improvements .

The new ASU aligns the guidance for fair value of the underlying asset by lessors that are not manufacturers or dealers in Topic 842 with that of existing guidance.

As a result, the fair value of the underlying asset at lease commencement is its cost, reflecting any volume or trade discounts that may apply.

However, if there has been a significant lapse of time between when the underlying asset is acquired and when the lease commences, the definition of fair value (in Topic 820, Fair Value Measurement) should be applied.

The ASU also requires lessors within the scope of Topic 942, Financial Services—Depository and Lending , to present all “principal payments received under leases” within investing activities.

Finally, the ASU exempts both lessees and lessors from having to provide certain interim disclosures in the fiscal year in which a company adopts the new leases standard.

In June 2016, the FASB issued Accounting Standards Update No.

2016-13, In June 2016, the FASB issued Accounting Standards Update No.

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

Measurement of Credit Losses on Financial Instruments, which introduced the expected credit losses methodology for the measurement of credit losses on financial assets measured at amortized cost basis, replacing the previous incurred loss methodology.

The amendments in Update 2016-13 added Topic 326, Financial Instruments—Credit Losses, and made several consequential amendments to the Codification.

Update 2016-13 also modified the accounting for available-for-sale debt securities, which must be individually assessed for credit losses when fair value is less than the amortized cost basis, in accordance with Subtopic 326-30, Financial Instruments— Credit Losses—Available-for-Sale Debt Securities.

Since the issuance of Update 2016-13, the Board has assisted stakeholders in implementing the amendments formally through the activities of the Credit Losses Transition Resource Group (TRG) and informally through other implementation assistance activities.

Through this assistance, the Board has identified certain areas that require clarification and improvement.

The FASB received several agenda request letters asking that the Board consider amending the transition guidance for Update 2016-13.

The entities that submitted the agenda request letters noted that certain financial statement preparers have begun (or are planning) to elect the fair value option on newly originated or purchased financial assets, although those entities historically have measured similar financial assets at amortized cost basis.

Without the targeted transition relief provided by the amendments in this Update, those entities noted that they would be required to maintain dual measurement methodologies for identical or similar financial instruments that are being managed in the same manner and that they would not provide financial statement users with decision-useful information because the financial statement information would not be comparable.

That is, the portion of an entity’s financial instruments measured at fair value may not be comparable to other identical, or similar, financial instruments measured at amortized cost basis that are owned by the same entity.

The amendments in this Update address those stakeholders’ concerns by providing an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis.

For those entities, the targeted transition relief will increase comparability of financial statement information by providing an option to align measurement methodologies for similar financial assets.

Furthermore, the targeted transition relief also may reduce the costs for some entities to comply with the amendments in Update 2016-13 while still providing financial statement users with decision-useful information.

Comparative Reporting at Adoption

The amendments ASU 2018-11 provide entities with an additional (and optional) transition method to adopt the new leases standard.

Under this new transition method, an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption consistent with preparers’ requests.

Consequently, an entity’s reporting for the comparative periods presented in the financial statements in which it adopts the new leases standard will continue to be in accordance with current GAAP in Topic 840, Leases.

An entity that elects this additional (and optional) transition method must provide the required Topic 840 disclosures for all periods that continue to be in accordance with Topic 840.

The amendments do not change the existing disclosure requirements in Topic 840 (for example, they do not create interim disclosure requirements that entities previously were not required to provide).

Separating Components of a Contract

The amendments in ASU 2018-11 provide lessors with a practical expedient, by class of underlying asset, to not separate nonlease components from the associated lease component and, instead, to account for those components as a single component if the nonlease components otherwise would be accounted for under the new revenue guidance (Topic 606) and both of the following are met:

The timing and pattern of transfer of the nonlease component(s) and associated lease component are the same.

The lease component, if accounted for separately, would be classified as an operating lease.

An entity electing this practical expedient (including an entity that accounts for the combined component entirely in Topic 606) is required to disclose certain information, by class of underlying asset, as specified in the ASU.

Effective Date

The amendments in ASU 2018-11 related to separating components of a contract affect the amendments in ASU No.

2016-02, which are not yet effective but can be early adopted.

For entities that have not adopted Topic 842 before the issuance of this ASU, the effective date and transition requirements for the amendments in this update related to separating components of a contract are the same as the effective date and transition requirements in ASU 2016-02.

For entities that have adopted Topic 842 before the issuance of ASU 2018-11, the transition and effective date of the amendments related to separating components of a contract in this ASU are as follows:

The practical expedient may be elected either in the first reporting period following the issuance of this ASU or at the original effective date of Topic 842 for that entity.

The practical expedient may be applied either retrospectively or prospectively.

All entities, including early adopters that elect the practical expedient related to separating components of a contract in this ASU must apply the expedient, by class of underlying asset, to all existing lease transactions that qualify for the expedient at the date elected.

NOTE 3 - CASH AND CASH EQUIVALENT

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

As of June 30, 2019 and June 30, 2018 cash and cash equivalents consisted of bank deposits in banks in Malaysia and petty cash on hands.

NOTE 4 - AMOUNT DUE FROM RELATED PARTIES

Amount due from related parties at June 30, 2019 and June 30, 2018 consist of the following items:

Amount due from Stable Treasure Sdn.

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.

NOTE 3 - GOING CONCERN UNCERTAINTIES

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

The Company has generated recurring losses and suffered from an accumulated deficit of $ 10,292,430 as of June 30, 2023.

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

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

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

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

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

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

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

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

NOTE 4 - BUSINESS SEGMENT INFORMATION

Currently, the Company has four reportable business segments:

Distribution of THC-free cannabinoid (CBD) products;

Production and distribution of renewable commodities;

Holding of real property;

Licensor of proprietary pyrolysis technology.

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)

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:

Year ended June 30, 2023

mineral mining

Distribution of THC-free cannabinoid (CBD) products

Production and distribution of renewable commodities

Holding property

Corporate unallocated

Cost of revenue

Selling, general & administrative expenses

( 1,688,983 )

(*) One of the directors of Stable Treasure Sdn.

Balakrishnan B S Muthu is also the director of the Company.

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

NOTE 5 - INVENTORIES

Inventories are valued at cost, not in excess of market.

Inventories are determined at first in first out basis and comprised of production cost, mine site management cost and sub-contractor cost.

Inventories, at June 30, 2019 and June 30, 2018 are summarized as follows:

The inventories represent the gold minerals as at June 30, 2019 and June 30, 2018, which were comprised of 8% share by the Company and 92% share by the sub-contractor and the other parties such as original mine assigner.

NOTE 6 - ACCOUNTS PAYABLE AND ADVANCED FROM RELATED PARTIES

Accounts Payable

Accounts payable at June 30, 2019 and June 30, 2018 consist of the following items:

Due to Changxin Wanlin Technology Co Ltd(*)

Other accounts payable

( 1,106,537 )

(*) Due to Changxin Wanlin Technology Co Ltd are accounts payable derived from ordinary business transactions.

One of the directors of Changxin Wanlin Technology Co.

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

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

Advanced from related parties

Advanced from related parties at June 30, 2019 and June 30, 2018 consist of the following items:

Advanced from BOG (#1)

Advanced from Federal Mining Resources Limited(#2)

Advanced from Federal Capital Investment Limited (#3)

Advanced from Yorkshire Capital Limited (#4)

( 3,216,022 )

(#1) BOG is one of the shareholders of the Company.

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

(#2) One of the directors of Federal Mining Resources Limited, Mr.

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

Another director of Federal Mining Resources Limited, Mr.

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

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

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

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

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

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

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

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

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

Year ended June 30, 2022

mineral mining

Distribution of THC-free cannabinoid (CBD) products

Production and distribution of renewable commodities

Holding property

Corporate unallocated

Cost of revenue

Selling, general & administrative expenses

( 1,910,180 )

Loss from operations

( 2,017,367 )

Interest expense

( 1,948,086 )

( 1,949,151 )

Loss before income tax

( 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.

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

Years ended June 30,

United States

NOTE 5 - INVENTORIES

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

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.

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 8 – PROPERTY, PLANT AND EQUIPMENT

Property and equipment at June 30, 2019, and June 30, 2018, are summarized as follows:

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

As of June 30,

Land and building

2 unchanged sentences

Project equipment

Motor Vehicle

Motor vehicles

Furniture and fittings

accumulated depreciation

The depreciation expenses charged for the year ended June 30, 2019 and 2018 were $6,016 and $18,617 respectively.

NOTE 8 - LOANS FROM BANKS (HIRE PURCHASE INSTALLMENT LOANS)

The loans from banks include long term and short term and are summarized as follow:

Loans from banks

Loans from banks(non-current)

Hire purchase installment loans with total amount $194 and $2,735 as at June 30, 2019, and June 30, 2018, are $193 and $2,659 net of imprest charges equivalent to interest $1 and $76 respectively are summarized as follows:

Interest Rate

Financial institution in Malaysia

Hire purchase loans payable to banks

( 1,609,414 )

(*) Hire purchase installment loans with Motor Vehicles as collateral.

The financial institutions in Malaysia are Islamic banks and bear no interest in the installment agreement.

However, there are certain imprest charges equivalent to interests which are being calculated at an average annual rate of approximate 0.42% for the rest of entire loans life and periods.

The scheduled maturities of the CSB’s hire purchase installment loans are as follows:

Total minimum hire purchase installment payment

Amount representing imprest charges equivalent to interest (current portion:

$1 and non-current portion:

Present value of net minimum lease payments (#)

Foreign exchange adjustment

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

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

At June 30, 2023 and 2022, deposits consist of the following:

As of June 30,

Deposits paid for acquisition of subsidiaries

- Bio Resources Limited (#1)

- 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

- 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.

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)

(#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.

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.

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

NOTE 10 - MINING RIGHT

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.

As of June 30,

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

Amortization charge for the period

Foreign exchange adjustment

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.

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,

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) 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.

(#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

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.

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:

Risk free rate

Credit spread

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

Interest expense

Converted to Company’s restricted Common Stock

( 20,355,000 )

(#) Minimum payment reflected in the balance sheet as current and non-current obligations under hire purchases installment loans as at June 30, 2019.

NOTE 9 - INCOME TAX

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

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

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

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

No provision for income taxes in the United States has been made as the Company had no taxable income for the periods ended June 31, 2019 and 2018.

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

CSB is a Malaysia incorporated company and required to pay corporate income tax at 25% of taxable income.

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

For the period

US Federal Income Tax Rate.

Valuation allowance - US Rate

BVI Income Tax Rate

Valuation allowance - BVI Rate

Malaysia Income Tax Rate

Valuation allowance - Malaysia Rate

Provision for income tax

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

Deferred tax assets:

Tax attribute carryforwards

Valuation allowances

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

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

The Company did not have any interest and penalty provided or recognized in the income statements for years ended June 30, 2019 and June 30, 2018 or balance sheet as of June 30, 2019 and June 30, 2018.

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

NOTE 10 - COMMITMENTS AND CONTINGENCIES

As at June 30, 2019, the Company’s office rent has expired and is currently being rent under month to month term.

There are no commitments and contracts on such rental expenses as at June 30, 2019.

As at June 30, 2019, the Company’s hire purchase installment agreements are disclosed in Note 8.

See Note 8 for the commitments for minimum installment payments under these agreements.

NOTE 11 - EARNINGS/(LOSS) PER SHARE

The Company has adopted ASC Topic No.

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

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

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

Year Ended June 30,

Net profit (loss) applicable to common shares

Weighted average common shares outstanding (Basic)

Weighted average common shares outstanding (Diluted)

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

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

NOTE 12 - CAPITAL STOCK

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

The Company adopted ASU No.

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

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

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

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

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

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

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

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

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

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

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

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

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.

As of June 30,

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

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.

The following tables summarize the lease expense for the years.

Years ended June 30,

Finance lease cost:

Interest on lease liabilities (per ASC 842)

Operating lease cost:

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 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

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

Years ending June 30,

Operating and finance lease amount

Total minimum finance lease liabilities payment

Present value of lease liabilities

Representing:-

Current liabilities

Non-current liabilities

For the years ended June 30, 2023 and 2022, the amortization charge was $ 126,388 and $ 34,286 , respectively.

NOTE 14 - STOCKHOLDERS’ EQUITY

Authorized Stock

1 unchanged sentence

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

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

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

Share Issuance

As of September 30, 2013, the Company has issued 2,500,000 and 1,477,500 common shares at $0.01 and $0.04 per share, respectively, resulting in total cash proceeds of $84,100, being $3,978 for par value shares and $80,122 for capital in excess of par value.

On October 25, 2013, the Company issued 80,000,000 common shares at par value under the terms of the Assignment Agreement whereby FMR will assign its management rights of CSB’s mining operation in the Mining Lease to VRDR, through its wholly-owned subsidiary GBL, in exchange for 80,000,000 shares of the Company’s common stock.

On November 11, 2013, the Company issued 75,000 common shares at US$1.75 per share to Marketing Management International, LLC (“MMI”), a Florida Limited Liability Company, under the terms of the Consulting Agreement for the engagement of its consulting services.

On January 29, 2014, the Company issued a total of 643,229 common shares for $665,238, of which 288,288 common shares at US$1.25 per share, 183,661 common shares at US$0.83 per share and 171,280 common shares at US$0.89 per share, to Borneo Oil & Gas Corporation Sdn Bhd (“BOG”), a Malaysia Limited Liability Company, under the terms of the Sub-Contractor Agreement for the engagement of its sub-contractor services.

On March 10, 2014, the Company issued a total of 693,180 common shares for $609,756, of which 179,340 common shares at US$0.85 per share and 513,840 common shares at US$0.89 per share, to Borneo Oil & Gas Corporation Sdn Bhd (“BOG”), a Malaysia Limited Liability Company, under the terms of the Sub-Contractor Agreement for the engagement of its sub-contractor services.

On January 21, 2015, the Company issued 5,900,000 common shares at US$0.05 per share to Borneo Oil & Gas Corporation Sdn Bhd (“BOG”), a Malaysia Limited Liability Company, under the terms of the Consultant Agreement for the additional services of its sub-contractor.

On September 29, 2016, the Company issued a total of 4,750,000 common shares at US$0.04 per share, of which 2,375,000 common shares to Vincent Lee Sen Min and 2,375,000 common shares to Reggie Abraham, both are Malaysian citizens.

On March 1, 2018, the Company issued a total of 10,000,000 common shares at US$0.02 per share to each of the two directors, of which 5,000,000 common shares to Balakrishnan B S Muthu and 5,000,000 common shares to Chen Ching.

An aggregate of $200,000 for this transaction was recognized as stock-based compensation under selling, general and administrative expenses during the three and six months ended March 31, 2018.

On March 1, 2018, the Company issued a total of 9,000,000 common shares at US$0.02 per share to three consultants under the Consultant Agreements, of which 5,000,000 common shares to Vincent Yong Tuck Seng, 2,500,000 common shares to Georgia Suzanne Lingam and 1,500,000 common shares to Liu Jiew Shin, all are Malaysian citizens.

An aggregate of $180,000 for this transaction was recognized as stock-based compensation under selling, general and administrative expenses during the three and six months ended March 31, 2018.

There were 115,038,909 common shares issued and outstanding at June 30, 2019 and June 30, 2018 respectively.

There are no preferred shares outstanding.

The Company has issued no authorized preferred shares.

Preferred stock outstanding

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

Common stock outstanding

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 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.

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 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

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

Years ended June 30,

$ ( 3,998,960 )

$ ( 3,954,414 )

Net loss attributable to non-controlling interest

Net loss attributable to Verde Resources, Inc.

$ ( 3,998,960 )

$ ( 3,947,435 )

Weighted average common shares outstanding:

1,019,752,220

Net loss per share:

# less than $0.005

For the years ended June 30, 2023, and 2022, diluted weighted-average common shares outstanding is equal to basic weighted-average common shares, due to the Company’s net loss position.

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

The Company has no potentially dilutive securities, such as, options or warrants, currently issued and outstanding other than the restricted common stock to be issued at $ 0.07 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

For the years ended June 30, 2023, and 2022, the local (“United States of America”) and foreign components of loss before income taxes were comprised of the following:

Years ended June 30,

Tax jurisdiction from:

- Local (US regime)

$ ( 3,795,326 )

$ ( 3,130,173 )

- Foreign, including

British Virgin Island

ALabuan, Malaysia

Loss before income taxes

$ ( 3,998,960 )

$ ( 3,954,414 )

The provision for income taxes consisted of the following:

Years ended June 30,

Income tax expense (benefit)

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

The Company mainly operates in U.S.A.

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

United States of America

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 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.

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, 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 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,

Loss before income taxes

$ ( 228,882 )

$ ( 498,702 )

Statutory income tax rate

Income tax expense at statutory rate

Non-deductible items

Tax losses unable to be carried forward

Net operating loss

Income tax expense

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

As of June 30,

Deferred tax assets:

Net operating loss carry forwards, from

US tax regime

Malaysia tax regime

valuation allowance

( 1,193,406 )

( 1,429,350 )

Deferred tax assets, net

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

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.

NOTE 17 - PENSION COSTS

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

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

During the years ended June 30, 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

As at June 30, 2019, advances were made by five companies of $2,152,715 related to ordinary business transactions.

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

Details are disclosed in Note 6.

During the year ended June 30, 2019, the Company earned equipment and vehicle lease rental income of $27,523 from BOG.

During the year ended June 30, 2019, the Company incurred cost of revenue worth of $8,883 to BOG.

During the year ended June 30, 2019, the Company recognized a gain on disposal of $246,105 on property and equipment sold to BOG.

NOTE 14 - GOING CONCERN AND LIQUIDITY CONSIDERATIONS

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

As of June 30, 2019, the Company has an accumulated deficit of $4,839,749 and working capital deficiency of $2,220,832.

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

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

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

These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.

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

NOTE 15 - CONCENTRATIONS

The Company’s major suppliers for the year ended June 30, 2019 and 2018 are listed as following:

Subcontractors

Accounts Payable

Major Suppliers

The Company’s major customers for the year ended June 30, 2019 and 2018 are listed as following:

Accounts Receivable

For the Years ended

Related party transactions:

Borneo Eco Food Sdn Bhd (#2)

Rental income:

Other income – Sales of wash sand to:

Jusra Mining Merapoh Sdn Bhd (#1)

Site expenses:

Warisan Khidmat Sdn Bhd (#3)

Professional services provided by:

Warisan Khidmat Sdn Bhd (#3)

Interest expense paid to:

Borneo Oil Corporation Sdn Bhd (#9)

Related party balances:

Trade receivables

Borneo Eco Food Sdn Bhd (#2)

Deposits paid for acquisition of property, plant and equipment

Borneo Energy Sdn Bhd (#2)

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 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 .

(#3) Warisan Khidmat Sdn.

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.

NOTE 19 - CONCENTRATIONS OF RISK

The Company is exposed to the following concentrations of risk:

Major customers

For the years ended June 30, 2023, and 2022, there was no single customer whose revenue exceeded 10 % of the revenue.

Economic and political risk

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

and Malaysia.

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

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

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

Exchange rate risk

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

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

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

NOTE 20 - COMMITMENTS AND 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.

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 21 - SUBSEQUENT EVENTS

The Company’s office rent has expired as at June 30, 2019, and the Company intends to renew the rental agreement for one year period pending final execution with the landlord.

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

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

On 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:

There were no changes to our certifying accountants for the year ended June 30, 2019.

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 8. Financial Statements and Supplementary Data