UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
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TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ________ to _________
Commission file number:
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(Exact name of registrant as specified in its charter) |
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
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(Zip Code) |
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(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
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Title of Each Class: |
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Trading Symbol(s) |
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Name of Each Exchange on Which Registered |
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None |
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None |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer |
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Accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
As of November 17, 2025, there were
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VERDE RESOURCES, INC.
TABLE OF CONTENTS
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F-1 |
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Unaudited Condensed Consolidated Balance Sheets as of September 30, 2025 and June 30, 2025 (audited) |
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F-4 |
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Notes to Unaudited Condensed Consolidated Financial Statements |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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| i |
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| Table of Contents |
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (the “Quarterly Report”), and any documents we incorporate by reference, contain, or may contain, certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and other applicable rules and regulations. Such forward-looking statements involve significant risks and uncertainties. All statements contained in this Quarterly Report and any documents we incorporate by reference, other than statements of historical facts, are forward-looking statements including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
The words “may,” “will,” “could,” “would,” “should,” “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “potential,” “seek,” “goal” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements include statements regarding, and important factors that could cause actual outcomes to differ materially from those stated or implied in the forward-looking statements include, but are not limited to, the matters summarized below:
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our ability to establish and implement our business plan and begin to generate revenues, including through our licensing model strategy in conjunction with key commercial partners like Ergon Asphalt & Emulsions, Inc. (“Ergon”); |
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our expectations about the anticipated benefits of licensing and distribution model strategy and our relationship with Ergon; |
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the expected benefits of our proprietary road construction materials, including the cold mix biochar asphalt emulsifying agent we have licensed to Ergon for use in its products in North America; |
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our ability to generate and monetize carbon renewal credits utilizing our technology and products; |
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our ability to effectively compete in our industry and execute on our business plan; |
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the impact of governmental laws and regulation, and our ability to comply with new regulations and compliance requirements that affect our business; |
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our ability to effectively scale our operations in North America and other regions, either on our own or through third-party collaborators like Ergon and others; |
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our ability to adequately market our products and services, and to develop additional products and product offerings; |
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our ability to successfully expand our operations into foreign markets; |
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assumptions related to the size of the market for our products and solutions; |
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our future capital needs and our ability to raise additional capital; |
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our ability to expand our licensing and distribution model to third parties beyond Ergon; |
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our ability to expand our revenue streams beyond our licensing and distribution model; |
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difficulties with certain licensees (such as Ergon), licensors from whom we have the rights to key intellectual property, or other third parties upon which we rely; |
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our ability to attract, develop, and retain capable key personnel; |
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our ability to protect our intellectual property (including our trade secrets) or manage threats posed by breaches of security; and |
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other risks and uncertainties, including those listed in the “Risk Factors” section of this Quarterly Report, and our Annual Report on Form 10-K for the fiscal year ended June 30, 2025, filed with the Securities and Exchange Commission (“SEC”) on October 23, 2025. |
| ii |
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| Table of Contents |
These and other forward-looking statements are only predictions and we may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, so you should not place undue reliance on our forward-looking statements, which speak only as of the date of this Quarterly Report or, in the case of exhibits hereto, the date of those documents. In addition, the factors listed above may not be the only ones that impact our ability to achieve the results anticipated by our forward-looking statements. Actual results or events could differ materially and adversely from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our business, financial condition and operating results. You are cautioned that forward-looking statements involve significant risks and uncertainties that are subject to change based on various factors (many of which are beyond our control). We have included important factors in the cautionary statements included in this Quarterly Report that could cause actual future results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.
You should read this Quarterly Report and the documents that we incorporate by reference with the understanding that our actual future results may be materially different from what we expect. All subsequent written or oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date of this Quarterly Report or to reflect the occurrence of unanticipated events, except as may be required under applicable U.S. securities law. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.
KEY DEFINITIONS
Unless the context requires otherwise, references in this Quarterly Report to “we,” “us,” “our,” “the Company,” “Verde,” or similar terminology refer to Verde Resources, Inc. and its consolidated subsidiaries
Unless the context requires otherwise, references in this Quarterly Report to “common stock” refer to the Company’s common stock, par value $0.001 per share.
| iii |
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| Table of Contents |
PART I - FINANCIAL INFORMATION
ITEM 1 - Financial Statements
VERDE RESOURCES, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
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September 30, 2025 |
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June 30, 2025 |
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ASSETS |
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Audited |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Deposit with banks |
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Accounts receivables |
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Inventories |
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Amount due from related party |
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Prepaid share-based compensation-nonemployees |
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Prepayments |
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Other receivables and deposits |
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Assets held for sale |
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Total current assets |
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Non-current assets: |
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Property, plant and equipment, net |
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Right of use assets, net |
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Intangible assets |
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Security deposit |
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Prepaid share-based compensation- nonemployees |
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Total non-current assets |
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TOTAL ASSETS |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Other payables |
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Deposit and accrued liabilities |
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Accrued share-based compensation for nonemployee |
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Accrued share-based compensation for employee |
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Current portion of operating lease liabilities |
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Amount due to a director |
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Amount due to related parties |
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Total current liabilities |
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Non-current liabilities: |
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Operating lease liabilities, net of current portion |
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Total non-current liabilities |
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TOTAL LIABILITIES |
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Commitments and contingencies |
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STOCKHOLDERS’ EQUITY |
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Preferred stock, $
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Common stock, $
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Additional paid-in capital |
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Accumulated other comprehensive loss |
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(
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Accumulated deficit |
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(
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(
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Non-controlling interest |
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(
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(
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Stockholders’ equity |
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
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$ |
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$ |
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See accompanying notes to unaudited condensed consolidated financial statements.
| F-1 |
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| Table of Contents |
VERDE RESOURCES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
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Three Months ended September 30, |
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2025 |
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2024 |
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Revenue, net |
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$ |
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$ |
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Cost of revenue |
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(
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(
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Gross profit |
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Operating expenses: |
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Selling, general and administrative expenses |
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(
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(
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Other operating expenses |
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(
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(
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Total operating expenses |
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(
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(
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LOSS FROM OPERATION |
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(
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(
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Other income (expense): |
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Interest expense |
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(
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Rental income |
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Gain from insurance claims |
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Unrealized foreign exchange gain |
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Interest income |
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Other income |
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Total other income (expense), net |
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(LOSS) INCOME BEFORE INCOME TAXES |
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(
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Income tax expense |
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NET (LOSS) INCOME |
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$ |
(
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$ |
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Net (loss) income attributable to non-controlling interest |
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Net (loss) income attributable to Verde Resources Inc., shareholders |
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(
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$ |
(
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$ |
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Other comprehensive (loss) income: |
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– Foreign currency adjustment loss |
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(
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(
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COMPREHENSIVE (LOSS) INCOME |
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$ |
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$ |
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Net (loss) income per share: |
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– Basic |
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$ |
(
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$ |
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– Diluted |
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$ |
(
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$ |
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Weighted average common shares outstanding (restated) : |
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– Basic |
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– Diluted |
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See accompanying notes to unaudited condensed consolidated financial statements.
| F-2 |
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| Table of Contents |
VERDE RESOURCES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Currency expressed in United States Dollars (“US$”))
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Three Months ended September 30, |
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2025 |
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2024 |
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Re-presented |
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Cash flows from operating activities: |
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Net (loss) income |
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$ |
(
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$ |
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Adjustments to reconcile net (loss) income to net cash used in operating activities |
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Depreciation of property, plant and equipment |
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Amortization |
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Stock-based compensation-nonemployee |
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Stock-based compensation-employee |
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Stock-based compensation-director |
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Finance cost interest element of promissory notes (non-cash) |
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Operating lease expense |
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Unrealized foreign exchange gain |
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(
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(
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Gain from insurance claim |
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(
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Gain from disposal of asset held for sale |
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(
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Change in operating assets and liabilities: |
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Accounts receivable |
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(
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Other receivables and deposits |
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(
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(
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Prepayments |
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(
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Inventories |
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Accounts payables |
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(
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(
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Accrued liabilities and other payables |
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(
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(
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Advanced from director |
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(
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Advanced from/to related parties |
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(
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Repayment of operating lease liabilities |
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(
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(
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) |
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Net cash used in operating activities |
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(
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(
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Cash flows from investing activities: |
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Proceeds from disposal of assets held for sale |
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|
|
|
|
|
|
Proceeds from insurance recoveries |
|
|
|
|
|
|
|
|
|
Withdrawal of deposit with bank |
|
|
|
|
|
|
|
|
|
Net cash provided by investing activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
Repayments to lease liabilities |
|
|
|
|
|
|
(
|
) |
|
Proceeds from issuance of common stock and common stock to be issued |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by financing activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustment |
|
|
(
|
) |
|
|
(
|
) |
|
|
|
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS, AT BEGINNING OF PERIOD |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS, AT END OF PERIOD |
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |
|
|
|
|
|
|
|
|
|
Cash paid for income taxes |
|
$ |
|
|
|
$ |
|
|
|
Cash paid for interest |
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |
|
|
|
|
|
|
|
|
|
Shares issuance for employee compensation |
|
$ |
|
|
|
$ |
|
|
See accompanying notes to unaudited condensed consolidated financial statements.
| F-3 |
|
|
| Table of Contents |
VERDE RESOURCES, INC .
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
(Re-presented)
(Currency expressed in United States Dollars (“US$”), except for number of shares)
|
|
|
Common stock |
|
|
Additional |
|
|
Accumulated other comprehensive |
|
|
|
|
Non |
|
|
Total |
|
|||||||||||
|
|
|
No. of shares |
|
|
Amount |
|
|
paid-in capital |
|
|
(loss) income |
|
|
Accumulated losses |
|
|
controlling interest |
|
|
stockholders’ equity |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Balance as of July 1, 2025 |
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
(
|
) |
|
$ |
(
|
) |
|
$ |
(
|
) |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for private placement |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share based compensation to employee, vested portion |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share based compensation to director, vested portion |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued to service provider |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the period |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(
|
) |
|
|
|
|
|
|
(
|
) |
|
Foreign currency translation adjustment |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
(
|
) |
|
|
|
|
|
|
|
|
|
|
(
|
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of September 30, 2025 |
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
|
(
|
) |
|
$ |
(
|
) |
|
$ |
(
|
) |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of July 1, 2024 |
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
(
|
) |
|
$ |
(
|
) |
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for private placement |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued to service provider |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued to employee, vested portion |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued as settlement of promissory notes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income for the period |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustment |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
(
|
) |
|
|
|
|
|
|
|
|
|
|
(
|
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of September 30, 2024 |
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
|
(
|
) |
|
$ |
(
|
) |
|
$ |
|
|
|
$ |
|
|
See accompanying notes to unaudited condensed consolidated financial statements.
| F-4 |
|
|
| Table of Contents |
VERDE RESOURCES, INC .
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
(Currency expressed in United States Dollars (“US$”), except for number of shares)
NOTE 1 - ORGANIZATION AND BUSINESS BACKGROUND
Verde Resources, Inc. was incorporated under the laws of the state of Nevada on April 22, 2010.
The Company is a road construction and building materials company offering proprietary, environmentally sustainable materials, with the goal to drive innovations that enhance sustainability and advance environmental stewardship. By integrating biochar, a highly effective carbon sequester and performance enhancer, the Company intends to facilitate the industry’s transition to zero emissions. The Company believes its approach reduces greenhouse gas (“GHG”) emissions, optimizes the use of native soils and recycled materials, speeds installation, and improves efficiency while cutting costs. Since June 2023 the Company’s strategic focus has been on testing the Company’s biochar asphalt technology through the Company’s subsidiary, Verde Renewables Inc. (“Verde Renewables”), at the National Center for Asphalt Technology (“NCAT”) test track. This endeavor with NCAT is rigorously testing the Company’s innovative biochar asphalt technology, which is intended to provide superior performance, environmental sustainability, and the generation of carbon removal and avoidance credits.
In December 2024, in collaboration with C-Twelve Pty Ltd, a corporation incorporated in Western Australia (“C-Twelve”), we successfully demonstrated our pioneering biochar-asphalt technology at the NCAT test track in Auburn, Alabama. The project showcased the ability to retrofit an existing asphalt plant to produce cold-mix biochar asphalt under winter conditions without the use of heat, solvents, or odors, resulting in an estimated 50% increase in installation efficiency compared to conventional methods.
The demonstration sequestered approximately eight (8) tons of carbon, verified and certified under Puro.earth in collaboration with Oregon Biochar Solutions, a related party of the Company through Karl Strahl, Chief Operating Officer of Oregon Biochar Solutions, who was appointed as a director of the Company in May 2025. This achievement marked what the Company believes to be the world’s first carbon removal credits generated through asphalt production and installation. The credits, issued and sold in April 2025, were pre-purchased by one of the world’s largest financial institutions focused on Carbon Dioxide Removals (CDRs). The Company refers to this integrated model of combining low-carbon materials, operational efficiency, and verified carbon removal credit generation as the “Verde Net Zero Blueprint.”
In July 2025 the Company received early validation based on performance results from NCAT which demonstrated consistent durability, particularly under low-volume roadway conditions. Further in September 2025, NCAT’s latest evaluation of Verde’s cold recycling mix using 100% reclaimed asphalt pavement (“RAP”) from laboratory testing demonstrated that Verde’s cold-recycled mix not only meets but exceeds industry specifications for cold-recycled asphalt. Results showed superior cohesion, high tensile strength ratio (“TSR”), and retained stability compared to standard cold mix benchmarks, validating its strength, durability, and moisture resistance.
Puro.earth, the crediting platform for durable carbon removal, has officially registered the Company as a Carbon Removal Credit supplier as part of its Accelerate program. This registration was formalized through a platform agreement signed in April 2023. The Company’s endeavors are positioned to potentially create additional revenue opportunities through the generation of carbon removal credits (“CORCs”). The Company believes that the generation of CORCs and the demand for CORCs incentivizes the broader adoption of climate technologies and enables the Company to supply these credits to companies seeking to offset their carbon footprint in pursuit of net-zero objectives. Simultaneously, this approach creates the potential for an additional and substantial revenue stream for the Company.
The Company’s current priority is the successful commercialization of its technology in North America, and if that commercialization is successful, the Company intends to introduce the same blueprint in Malaysia. Ongoing discussions with PLUS Malaysia, the country’s largest highway operator, signal a growing demand for biochar in the region. This demand, coupled with the certification, could enable the BioFraction™ plant to secure a reliable client, ensuring the resumption of normal operations in Malaysia with the potential for significant scale-up over time.
During the period ended September 30, 2025 and year ended June 30, 2025, the Company achieved the following major milestones on its path to commercialization of its biochar-asphalt technology and achieving “net-zero”:
On June 27, 2024, the Company entered into an agreement with NCAT at Auburn University to undertake a 3-year Performance Testing Project titled “Structural Capacity of Sustainable Pavement” (the “Project”). The Project, led by Dr. Nam Tran, Associate Director and Research Professor at NCAT, involved a comprehensive performance testing on the NCAT Test Track in Opelika, Alabama. This facility, sponsored by various state Departments of Transportation (DOTs) and in partnership with the Minnesota Road Research Facility (MnROAD), is dedicated to advancing sustainable pavement technologies. Success in this Project is expected to drive widespread adoption of a net-zero road construction blueprint by DOTs across the United States and the federal DOT. The Project commenced on June 24, 2024, and is expected to conclude on September 30, 2027, with the first draft of the final report expected in Spring 2027.
In July 2025, the Company received encouraging preliminary performance results from NCAT regarding its Cold-Mix Biochar-Asphalt test section at NCAT’s Test Track installed in December 2024. After approximately 50,000 equivalent single axle loads (ESALs) of heavy truck traffic, the asphalt surface remained flexible and demonstrated consistent durability, particularly under low-volume roadway conditions, as confirmed by NCAT's Assistant Director for Test Track Research, Mr. Nathan Moore. This demonstration marks the world’s first deployment of a carbon‑sequestering asphalt material engineered to maintain competitive strength and flexibility for road applications. Verde announced this milestone in a press release on July 28, 2025.
Further, in September 2025, NCAT’s latest evaluation of Verde’s cold recycling mix using 100% reclaimed asphalt pavement (“RAP”) further validated the testing results of our proprietary formulation. Laboratory testing conducted in accordance with ASTM D6927 (Marshall Stability and Flow), ASTM D6931 (Indirect Tensile Strength), and AASHTO T283 (Moisture Susceptibility) demonstrated that Verde’s cold-recycled mix not only meets but exceeds industry specifications for cold-recycled asphalt. Results showed superior cohesion, high tensile strength ratio (“TSR”), and retained stability compared to standard cold mix benchmarks, validating its strength, durability, and moisture resistance.
| F-5 |
|
|
| Table of Contents |
On August 14, 2024, the Company entered into a Memorandum of Understanding (the “NPI MOU”) with Nature Plus Inc. (“NPI”) to formalize the collaboration on the NCAT Project referred to above and explore subsequent business opportunities arising from the successful completion of the Project. The Project involved the application of TerraZyme technology for the stability of subgrade and base layers, with the overarching goal of advancing road construction methodologies. The testing of the efficacy and exploration of potential applications of the TerraZyme technology at NCAT is still underway as of the date of this Quarterly Report.
Under the NPI MOU, the Company and NPI agreed to jointly develop mixed designs and materials incorporating biochar, aimed at enhancing performance and promoting carbon sequestration. The NPI MOU shall be effective until December 31, 2026, or until replaced by a subsequent distributor agreement. Upon the completion of the Project, if successful, the Company and NPI intend to continue the collaboration on future initiatives, including soil stabilization and material development, carbon removal credits, certification and compliance, and exclusive rights to distributing TerraZyme.
On October 16, 2024, the Company formed a new subsidiary, VerdePlus Inc. (“VerdePlus”), a Missouri corporation in partnership with NPI for the purpose of conducting business on the production of low-carbon building materials by integrating the Company’s expertise and the innovative intellectual property of NPI. The Company and NPI owned 55% and 45% of VerdePlus, respectively.
On October 18, 2024, the Company entered into a binding Term Sheet with C-Twelve granting the Company (i) an exclusive license to utilize its proprietary binder and biochar asphalt mixed designs (the “Licensed Technology”) for the production and commercialization of asphalt surfacing-related products (the “End Products”) within the United States of America and (ii) the first right of refusal to extend the exclusive licensing of the Licensed Technology to other countries and territories subject to terms and conditions to be mutually agreed upon. Subsequently on May 19, 2025, the Company and C-Twelve entered into a definitive agreement, namely the Joint Development Agreement (“C-Twelve Agreement”) which provides for a 10 year license commencing May 19, 2025.
As of September 30, 2025, the Company has the following subsidiaries:-
|
Company name |
|
Place of incorporation |
|
Principal activities and place of operation |
|
Effective interest held |
|
|
|
|
|
|
|
|
|
Verde Resources Asia Pacific Limited (“VRAP”) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Verde Resources (Malaysia) Sdn Bhd (“Verde Malaysia”) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Verde Renewables, Inc. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VerdePlus Inc. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Verde Life Inc. (“VLI”) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Wision Project Sdn Bhd (“Wision”) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Verde Estates LLC (“VEL”) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bio Resources Limited (“BRL”)* |
|
|
|
|
|
|
* BRL was administratively dissolved by being struck off the registers of the Labuan Financial Services Authority, effective October 19, 2025.
| F-6 |
|
|
| Table of Contents |
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited condensed consolidated financial statements reflect the application of certain significant accounting policies as described in this note and elsewhere in the accompanying unaudited condensed consolidated financial statements and notes.
|
· |
Basis of Presentation |
The accompanying unaudited condensed consolidated financial statements, which include the accounts of the Company and those of its wholly owned subsidiaries and variable interest entities, are unaudited and have been prepared on a basis substantially consistent with the Company’s audited financial statements and notes as of and for the year ended June 30, 2025 included in the Company’s Annual Report on Form 10-K (the “2025 Form 10-K”). These unaudited condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted (“GAAP”) in the United States of America (“U.S. GAAP”) and follow the requirements of the SEC for interim reporting. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting only of adjustments of a normal and recurring nature) considered necessary for a fair statement of its financial position, operating results and cash flows for the periods presented. The condensed consolidated balance sheet at June 30, 2025 has been derived from audited consolidated financial statements, but does not contain all of the footnote disclosures from the 2025 Form 10-K. The results of the Company’s operations for any interim period are not necessarily indicative of the results of the Company’s operations for any other interim period or for a full fiscal year. The statements should be read in conjunction with the audited consolidated financial statements and related notes included in the 2025 Form 10-K as filed with SEC on October 23,2025.
|
· |
Use of Estimates and Assumptions |
The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the years presented. Significant accounting estimates reflected in the Company’s consolidated financial statements include the useful lives of plant and equipment, impairment of long-lived assets (including intangible assets), allowance for expected credit losses, revenue recognition, share based compensation, deferred taxes and uncertain tax position.
The inputs into the management’s judgments and estimates consider the geopolitical tension, inflationary and high-interest rate environment and other macroeconomic factors on the Company’s critical and significant accounting estimates. Actual results could differ from these estimates.
|
· |
Basis of Consolidation |
The unaudited condensed 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 companies to report in their financial statement information about operating segments, products, services, geographic areas, and major customers. Operating segments are defined as components of an enterprise for which separate financial information is available that is regularly evaluated by the Company’s chief operating decision maker (“CODM”), or group, in deciding how to allocate resources and assess performance.
The Company’s CODM has been identified as the Chief Executive Officer, who reviews the operating results for the Company as a whole to make decisions about allocating resources and assessing financial performance. Accordingly, management has determined that the Company has three reportable business segments.
Sales and operating income as the primary measures of segment profit or loss to assess performance and make resource allocation decisions. The CODM assesses these metrics and compares actuals to budgeted and forecasted values to evaluate segment operating performance and allocate resources to the operating segments. Expenses related to certain centralized administration or executive functions that are not specifically related to an operating segment are included in Corporate Unallocated.
|
· |
Concentration of Credit Risk |
The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents, deposit with banks and accounts receivable. The Company places its cash and cash equivalents and bank deposits with financial institutions of high credit worthiness. At times, its cash and cash equivalents and bank deposits with a particular financial institution may exceed any applicable government insurance limits. The Company’s management plans to assess the financial strength and credit worthiness of any parties to which it extends funds, and as such, it believes that any associated credit risk exposures are limited.
| F-7 |
|
|
| Table of Contents |
| · |
Risks and Uncertainties |
The Company has a limited operating history in the supply of net zero road constructions and building materials. Therefore, the Company’s business is subject to significant risks and uncertainties, including financial, operational, technological, and other risks associated with a production operation for renewable commodities, including the potential risk of business failure.
|
· |
Cash and Cash Equivalents |
Cash and cash equivalents are carried at cost and represent cash in banks, money market funds, which are readily convertible to known amounts of cash and that mature within three months or less from the date of purchase, which, in the opinion of management, are subject to an insignificant risk of loss in value. The Company had $
At September 30, 2025, and June 30, 2025, cash and cash equivalents consisted of petty cash on hand and cash in banks.
|
· |
Deposits with Banks |
Deposits held for investments that are not debt securities are included in short-term investments in the unaudited condensed consolidated balance sheets. Investments in time deposits with original maturities of more than three months but remaining maturities of less than one year are considered short-term investments. Investments held with the intent to reinvest or hold for longer than a year, or with remaining maturities of one year or more, are considered long-term investments.
|
· |
Accounts Receivables |
Accounts receivables are recognized and carried at amortized cost. The Company maintains an allowance for expected credit loss to provide for the estimated number of receivables that will not be collected. The Company considers several factors in its estimate of the allowance, including knowledge of a client’s financial condition, its historical collection experience, and other factors relevant to assessing the collectability of such receivables. Bad debts are written off against allowances. An allowance for doubtful accounts will be recorded in the period when a loss is probable based on an assessment of specific evidence indicating troubled collection, historical experience, accounts aging, ongoing business relation and other factors. Accounts are written off after exhaustive efforts at collection. If accounts receivable are to be provided for, or written off, they would be recognized in the unaudited condensed consolidated statement of operations within operating expenses. As of September 30, 2025, and June 30, 2025, the longest credit term for certain customers are
At September 30, 2025, and June 30, 2025, there has been no allowance for expected credit loss for accounts receivables, and for other receivables the allowance for expected credit loss amounted to $
|
· |
Expected Credit Loss |
ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments requires entities to use a current lifetime expected credit loss methodology to measure impairments of certain financial assets. Using this methodology will result in earlier recognition of losses than under the previous incurred loss approach, which requires waiting to recognize a loss until it is probable of having been incurred. There are other provisions within the standard that affect how impairments of other financial assets may be recorded and presented, and that expand disclosures. The Company adopted the new standard effective July 1, 2023, the first day of the Company’s fiscal year and applied to accounts receivable and other financial instruments. The adoption of this guidance did not materially impact the net earning and financial position and has no impact on the cash flows.
|
· |
Inventories |
Inventories are stated at the lower of cost or market value (net realizable value), cost being determined on a first-in-first-out method. Cost of raw materials include cost of materials and incidental costs in bringing the inventory to its current location. Costs of finished goods, on the other hand include material, labor and overhead costs. The Company provides inventory allowances based on excess and obsolete inventories determined principally by customer demand.
As of September 30, 2025, and June 30, 2025, there was no write down and no write off of inventories.
| F-8 |
|
|
| Table of Contents |
|
· |
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 |
|
|
Plant and machinery |
|
|
|
|
Office equipment |
|
|
|
|
Computers |
|
|
|
|
Motor vehicles |
|
|
|
|
Furniture and fittings |
|
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Renovation |
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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 unaudited condensed consolidated statements of income and other comprehensive income in other income or expenses.
Depreciation expense for the three months ended September 30, 2025 and 2024, totaled $
As of September 30, 2025, and June 30, 2025, the impairment loss on plant and machinery amounted to $
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Intangible assets |
Intangible assets acquired from third parties are measured initially at fair value and those with an infinite live are not 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. To test indefinite-lived intangible assets for impairment, the Company first performs a qualitative assessment to determine if it is more likely than not that the carrying amount of each of its indefinite-lived intangible assets exceeds its fair value. If it is, a quantitative assessment is required. Alternatively, the Company may bypass the qualitative assessment and perform a quantitative impairment test. The qualitative assessment requires the consideration of factors such as recent market transactions, macroeconomic conditions and changes in projected future cash flows. The quantitative assessment compares the fair value of an indefinite-lived intangible asset to its carrying amount. If the carrying amount of an indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized for the excess. Fair values of indefinite-lived intangible assets are determined based on discounted cash flows or appraised values, as appropriate. 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.
As of September 30, 2025, and June 30, 2025, the Company did not record an impairment on the intangible assets.
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Assets held for sale |
The Company classifies assets as held-for-sale (“disposal group”) in the period when all of the relevant criteria to be classified as held for sale are met. These criteria include management’s commitment to sell the disposal group in its present condition and the sale being deemed probable of being completed within one year. Assets held for sale are reported at the lower of their carrying value or fair value less cost to sell. The fair values of disposal groups are estimated using accepted valuation techniques, including indicative listing prices. The Company considers historical experience, guidance received from third parties, and all information available at the time the estimates are made to derive fair value. Any loss resulting from the measurement is recognized in the period when the held for sale criteria are met. The Company assesses the fair value of a disposal group, less any costs to sell, each reporting period it remains classified as held for sale and reports any subsequent changes as an adjustment to the carrying value of the disposal group, as long as the new carrying value does not exceed the initial carrying value of the disposal group. Assets held-for-sale are not amortized or depreciated.
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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.
There has been no impairment charge for the three months ended September 30, 2025 and 2024.
| F-9 |
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| Table of Contents |
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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:
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identify the contract with a customer; |
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identify the performance obligations in the contract; |
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determine the transaction price; |
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allocate the transaction price to performance obligations in the contract; and |
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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. Accordingly, the transaction price is allocated in its entirety to the single performance obligation and recognized upon its fulfilment.
The Company considers customer order confirmations, whether formal or otherwise, to be a contract with the customer. In determining the transaction price, the Company evaluates whether the price is subject to refund or adjustment to determine the net consideration to which the Company expects to be entitled.
The Company also follows the guidance provided in ASC 606 , Revenue from Contracts with Customers , for determining whether the Company is the principal or an agent in arrangements with customers that involve another party that contributes to the provision of goods to a customer. In these instances, the Company determines whether it has promised to provide the goods itself (as principal) or to arrange for the specified goods to be provided by another party (as an agent). This determination is a matter of judgment that depends on the facts and circumstances of each arrangement. The Company derives its revenue from the sale of products and services in its role as a principal.
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Rental income |
Rental income is recognized on a straight-line basis over the term of the respective lease agreement.
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Cost of revenue |
Cost of revenue consists primarily of the cost of goods sold, which are directly attributable to the sales of products.
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Leases |
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. The Company uses rate implicit in the lease to determine the present value of future lease payments 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. For lease terms of twelve months or fewer, a lessee is permitted to make an accounting policy election not to recognize lease assets and liabilities.
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 non-financial assets.
ROU assets are tested for impairment individually or as part of an asset group if the cash flows related to the ROU assets 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 September 30, 2025, and June 30, 2025.
The operating lease is included in operating lease right-of-use assets and operating lease liabilities as current and non-current liabilities in the unaudited condensed consolidated balance sheets as of September 30, 2025, and June 30, 2025.
| F-10 |
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| Table of Contents |
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 five 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 and (v) the underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term. At the inception of a finance lease, the Company 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.
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Income Taxes |
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 unaudited condensed 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 unaudited condensed 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.
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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 three months ended September 30, 2025 and 2024.
| · |
Foreign Currencies Translation |
The Company’s reporting currency is the United States dollar (“US$”) and the accompanying unaudited condensed consolidated financial statements have been expressed in United States dollars. The Company and its subsidiaries in the United States have functional currency of US$ whereas the functional currency of the Company’s subsidiaries in Malaysia is Malaysian Ringgit (“MYR”). The functional currencies represent the primary currencies of the economic environment in which the respective companies’ operations are conducted.
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 unaudited condensed consolidated statement of operations.
For reporting purposes, in accordance with ASC Topic 830 “ Translation of Financial Statements ”, capital accounts of the unaudited condensed 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 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:-
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September 30, 2025 |
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September 30, 2024 |
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Period-end MYR:US$ exchange rate |
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Average period MYR:US$ exchange rate |
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Comprehensive Income |
ASC Topic 220, Comprehensive Income , establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive income, as presented in the accompanying unaudited condensed 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.
| F-11 |
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| Table of Contents |
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Non-controlling Interest |
The Company accounts for non-controlling interest in accordance with ASC Topic 810-10-45, which requires the Company to present non-controlling interests as a separate component of total shareholders’ equity on the unaudited condensed consolidated balance sheets and the unaudited condensed consolidated net loss attributable to the non-controlling interest be clearly identified and presented on the face of the unaudited condensed consolidated statements of operations and comprehensive loss.
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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. Non-vested share-based payment awards are excluded from the basic EPS calculation. 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, including those granted but are non-vested and are non-forfeitable, and if the additional common shares were dilutive.
For the three months ended September 30, 2025, 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 shares since such inclusion would have been antidilutive.
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Stock Cancellation and Reissuance Policy |
The Company may cancel shares of its common stock that have been repurchased or otherwise reacquired, including shares acquired through share repurchase programs or forfeited under equity compensation plans. Canceled shares are retired and removed from the issued and outstanding share count in accordance with applicable corporate law and the Company’s Articles of Incorporation.
Upon cancellation, the par value of the shares is deducted from common stock, and any excess of repurchase cost over the par value is charged against additional paid-in capital (APIC) or retained earnings, as applicable. If the original issuance price is not known or determinable, the cost is first charged to APIC to the extent available, with any remaining amount charged to retained earnings.
The Company accounts for reissuance of treasury shares in accordance with ASC 505-30 – Equity: Treasury Stock . Treasury shares may be reissued for various purposes, including the settlement of employee equity awards, acquisitions, or other corporate purposes.
When treasury shares are reissued:
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The proceeds received upon reissuance are credited to treasury stock at the cost of the shares. |
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Any difference between the reissuance price and the cost of the treasury shares is recorded as an adjustment to Additional Paid-In Capital (APIC). |
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If the reissuance price exceeds the cost, the excess is credited to APIC. |
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If the reissuance price is less than the cost and APIC related to treasury stock transactions is insufficient to absorb the difference, the remainder is charged to Retained Earnings. |
The Company uses the cost method to account for treasury stock transactions. Reissued shares are included in the number of shares issued and outstanding as of the date of reissuance.
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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 arrangements related to the acquisition of goods and services from both non-employees and employees based on fair values of the shares at grant date. Market prices of the Company’s common stock at the respective issuance date, which represents the date of the final board approval for the issuance of the shares, is concluded to be the grant date, in accordance with ASC 718. 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.
Prepaid share-based compensation is recorded when the Company issues fully vested, nonforfeitable share-based payment awards to nonemployees on the grant date, when the nonemployee earns the right to receive and where no specific performance is required by the nonemployee to retain those equity instruments, in accordance with ASC 718-10-45-3. The prepayment is recorded where the shares are issued before the financial year end in accordance with the grant date and represents the fair value of goods or services that are to be received from the nonemployee subsequent to the financial period end.
Compensation cost for awards that do not have an established accounting grant date, but for which the service inception date has been established is based on the best estimate of fair value of Company's common stock at the end of each reporting period and a corresponding accrual is recorded. As of September 30, 2025, and June 30, 2025, $
Share-based compensation cost is recognized over the requisite service period for employees and over the vesting period for nonemployees. The Company’s accounting policy is to recognize forfeitures as they occur.
| F-12 |
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| Table of Contents |
During the three months ended September 30, 2025 and 2024, $
During the three months ended September 30, 2025 and 2024, $
During the three months ended September 30, 2025 and 2024, $
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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.
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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.
The unaudited condensed 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.
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Commitments and Contingencies |
The Company follows the ASC 450-20 , Contingencies , to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.
If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s unaudited condensed 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.
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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:
| F-13 |
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| Table of Contents |
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Level 1 |
Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. |
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Level 2 |
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. |
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Level 3 |
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, deposits with bank, 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.
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Recent Accounting Pronouncements |
During the three months ended September 30, 2025, there have been no new, or existing, recently issued accounting pronouncements that are of significance, or potential significance, that impact the Company’s unaudited condensed consolidated financial statements.
In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), and in January 2025, the FASB issued ASU No. 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“ASU 2025 01”) . ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income statement. ASU 2024-03, as clarified by ASU 2025-01, is effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Both early adoption and retrospective application are permitted. The Company is currently evaluating the effect of this pronouncement on its disclosures.
In November 2024, the FASB issued ASU No. 2024-04, Induced Conversions of Convertible Debt Instruments (Topic 470), which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. The amendments in this update are effective for all entities for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the effect of this pronouncement on its disclosures.
In March 2025, the FASB issued ASU No. 2025-02, Liabilities (405): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 122 . The amendments in this Update are effective immediately and on a fully retrospective basis to annual periods beginning after December 15, 2024. The Company adopted this pronouncement and determined that there was no material effect of its disclosures in the unaudited condensed consolidated financial statement.
In May 2025, the FASB issued ASU No. 2025-04, Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606) . ASU 2025-04 revises the definition of the term performance condition for share-based consideration payable to a customer to incorporate conditions that are based on the volume or monetary amount of a customer’s purchases or potential purchases. ASU 2025-04 also eliminates the policy election to account for forfeitures as they occur for awards with service conditions. ASU 2025-04 also clarifies that ASC 606 variable consideration guidance does not apply to share-based payments to customers; instead, vesting probability should be assessed solely under ASC 718, Compensation—Stock Compensation. ASU 2025-04 is effective for the Company’s annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods, with early adoption permitted. ASU 2025-04 may be applied on either a modified retrospective basis or on a retrospective basis. The Company is currently evaluating the effect of this pronouncement on its disclosures.
In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Account Receivable and Contract Assets . This update introduces a practical expedient for all entities when estimating expected credit losses on current accounts receivable and current contract assets arising from revenue transactions accounted for under Topic 606. The expedient allows entities to assume current conditions as of the balance sheet date remain unchanged over the remaining life of the asset. The amendments are required to be applied prospectively and are effective for annual and interim periods beginning after December 15, 2025. Early adoption is permitted. The Company is currently evaluating the effect of this pronouncement on its disclosures.
In September 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other— Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. This update provides amendments to clarify and modernize the accounting for costs incurred to develop or acquire internal-use software. The amendments address the capitalization of implementation costs by utilizing a principles-based approach and consolidates website development guidance under Subtopic 350-40. The amendments can be applied prospectively, modified prospectively, or retrospectively and are effective for annual and interim periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the effect of this pronouncement on its disclosures.
| F-14 |
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| Table of Contents |
In September 2025, the FASB issued ASU No. 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract . This update introduces a scope exception to derivative accounting for certain contracts with underlyings tied to operations or activities specific to one of the parties. Additionally, the update clarifies that share-based noncash consideration received from a customer should be accounted for under Topic 606 until the right to receive or retain the consideration becomes unconditional. The amendments can be applied prospectively or modified retrospectively and are effective for annual and interim periods beginning after December 15, 2026. The Company expects to early adopt the provisions related to Topic 815 on a prospective basis and does not expect a significant impact to the Company’s consolidated financial statements. The provisions related to Topic 606 are not applicable.
The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and believes the future adoption of any such pronouncements may not be expected to cause a material impact on its financial condition or the results of its operations.
NOTE 3 – BUSINESS SEGMENT INFORMATION
Currently, the Company operates three business segments for the purpose of assessing performance and making operating decisions, mainly operating in:
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Trading and production of building materials and renewable commodities; |
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Holding of real property; and |
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Licensor of proprietary pyrolysis technology. |
The Company’s Chief Operating Decision Maker (“CODM”) is its Chief Executive Officer (CEO). The CODM allocates resources and evaluates the performance of the Company using information about combined net income from operations. All significant operating decisions are based upon an analysis of the Company as three operating segments, which are the same as its reporting segments.
The operating results of the reportable segments for the three months ended September 30, 2025 and 2024 is shown in the following tables:
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Three Months ended September 30, 2025 |
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Licensor of proprietary pyrolysis technology |
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|
|
|
|
|
|
|
(
|
) |
|
|
(
|
) |
|
Income tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) profit |
|
$ |
(
|
) |
|
$ |
|
|
|
$ |
|
|
|
$ |
(
|
) |
|
|
(
|
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets at September 30, 2025 |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
| F-15 |
|
|
| Table of Contents |
|
|
|
Three Months ended September 30, 2024 |
|
|||||||||||||||||
|
|
|
Trading of building materials and renewable commodities |
|
|
Holding property |
|
|
Licensor of proprietary pyrolysis technology |
|
|
Corporate unallocated |
|
|
Consolidated |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Revenue |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
Cost of revenue |
|
|
(
|
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(
|
) |
|
Gross profit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general & administrative expenses |
|
|
(
|
) |
|
|
(
|
) |
|
|
(
|
) |
|
|
(
|
) |
|
|
(
|
) |
|
Other operating expenses |
|
|
(
|
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(
|
) |
|
Loss from operations |
|
|
(
|
) |
|
|
(
|
) |
|
|
(
|
) |
|
|
(
|
) |
|
|
(
|
) |
|
Interest expense |
|
|
(
|
) |
|
|
|
|
|
|
|
|
|
|
(
|
) |
|
|
(
|
) |
|
Rental income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
Gain from insurance claims |
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Unrealized foreign exchange gain |
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) Profit before income tax |
|
|
(
|
) |
|
|
|
|
|
|
(
|
) |
|
|
|
|
|
|
|
|
|
Income tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) profit |
|
$ |
(
|
) |
|
$ |
|
|
|
$ |
(
|
) |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets at September 30, 2024 |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
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:
|
|
|
Three Months ended September 30, |
|
|||||
|
|
|
2025 |
|
|
2024 |
|
||
|
|
|
|
|
|
|
|
||
|
Malaysia |
|
$ |
|
|
|
$ |
|
|
|
United States of America |
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
NOTE 4 – DEPOSIT WITH BANKS
At September 30, 2025, and June 30, 2025, the interest rates and maturities of deposits with banks is
NOTE 5 – INVENTORIES
Inventories as of September 30, 2025, and June 30, 2025, consisted of the following:
|
|
|
September 30, 2025 |
|
|
June 30, 2025 |
|
||
|
|
|
|
|
|
|
|
||
|
Manufactured bio produce |
|
$ |
|
|
|
$ |
|
|
|
Trading goods |
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
Trading goods represent bio asphalt products purchased from an external supplier.
| F-16 |
|
|
| Table of Contents |
NOTE 6 – OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS
Other receivables, deposits and prepayments as of September 30, 2025, and June 30, 2025, consist of the following:
|
|
|
September 30, 2025 |
|
|
June 30, 2025 |
|
||
|
|
|
|
|
|
|
|
||
|
Deposits |
|
$ |
|
|
|
$ |
|
|
|
Other receivables |
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
Less: impairment on other receivables |
|
|
(
|
) |
|
|
(
|
) |
|
Other receivables and deposits, net |
|
$ |
|
|
|
$ |
|
|
|
Prepayments |
|
|
|
|
|
|
|
|
|
Prepaid share based compensation-nonemployees (current portion) |
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
Prepaid share based compensation-nonemployees (non-current portion) |
|
$ |
|
|
|
$ |
|
|
NOTE 7 – PROPERTY, PLANT AND EQUIPMENT
A summary of property, plant and equipment as of September 30, 2025, and June 30, 2025, is as follows:
|
|
|
September 30, 2025 |
|
|
June 30, 2025 |
|
||
|
|
|
|
|
|
|
|
||
|
Plant and machinery |
|
$ |
|
|
|
$ |
|
|
|
Office equipment |
|
|
|
|
|
|
|
|
|
Computers |
|
|
|
|
|
|
|
|
|
Motor vehicles |
|
|
|
|
|
|
|
|
|
Furniture and fittings |
|
|
|
|
|
|
|
|
|
Renovation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: accumulated depreciation |
|
|
(
|
) |
|
|
(
|
) |
|
Foreign exchange adjustment |
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
Depreciation expense for the three months ended September 30, 2025 and 2024, totaled $
There has been no impairment charge for the three months ended September 30, 2025 and 2024.
NOTE 8 –INTANGIBLE ASSETS
The intangible assets comprise (i) a global intellectual property (“IP”) of $
The “Catalytic Biofraction Process” is a slow pyrolysis process using a proprietary catalyst to depolymerize palm biomass waste (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 waste 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 would lead to certification and issuance of Carbon Avoidance Credits as well as Carbon Removal Credits to generate carbon revenue for the Company.
The Company has identified these intangible assets as indefinite life intangible assets as there are currently no legal, competitive, economic or other factors that materially limit the useful life of the Company’s intangible assets.
| F-17 |
|
|
| Table of Contents |
ASC 350-30-35, Intangibles - Goodwill and Other , provides for an option to first perform a qualitative assessment to determine whether it is more likely than not that an asset is impaired. If the qualitative assessment supports that it is more likely than not that the fair value of the asset exceeds its carrying value, a quantitative impairment test is not required. If the qualitative assessment does not support the fair value of the asset, then a quantitative assessment is performed. Our annual impairment assessment of our identifiable indefinite lived intangible assets is performed as of the fourth quarter of each year. An assessment is performed at other times if an event occurs or circumstances change that would more likely than not reduce the fair value of the asset below its carrying value. If the carrying value of the intangible assets exceeds its fair value, an impairment loss is recognized in an amount equal to that excess.
As of June 30, 2025, the Company performed a qualitative assessment, during the fourth quarter of 2025, to determine whether it was more likely than not that the carrying amounts of its intangible assets were impaired. This assessment considered a number of qualitative factors, including but not limited to:
|
|
· |
Macroeconomic conditions, |
|
|
· |
Industry and market trends, |
|
|
· |
Cost factors, |
|
|
· |
Overall financial performance of the asset, |
|
|
· |
Legal and regulatory environment, and |
|
|
· |
Relevant internal reporting and management’s plans. |
Based on this qualitative assessment, management did not identify any events or changes in circumstances that would indicate that the carrying amounts of the Company’s intangible assets are not recoverable. The qualitative impairment assessment of the indefinite intangible assets indicated that the fair value of such assets exceeded their carrying value and therefore were not at risk of impairment. Accordingly, no quantitative impairment test was deemed necessary, and no impairment losses were recognized for the year ended June 30, 2025. The management evaluated the situation for the three months ended September 30, 2025, and determined that no significant changes had occurred. Accordingly, it is concluded that no impairment is required.
NOTE 9 – ASSETS HELD FOR SALE
At September 30, 2025, and June 30, 2025, assets held for sale are as follows:
|
|
|
September 30, 2025 |
|
|
June 30, 2025 |
|
||
|
|
|
|
|
|
|
|
||
|
Motor vehicles |
|
$ |
|
|
|
$ |
|
|
|
Less: impairment |
|
|
(
|
) |
|
|
(
|
) |
|
|
|
$ |
|
|
|
$ |
|
|
On June 27, 2024, the Company, through its wholly-owned subsidiary Verde Renewables, a company incorporated under the laws of the State of Missouri, entered into a Consignment Contract with ED’s Machinery LLC (“EDM”) to dispose plant and machinery and motor vehicles with a carrying amount of $
NOTE 10 – SECURITY DEPOSIT
At September 30, 2025, and June 30, 2025, security deposit consists of the following:
|
|
|
September 30, 2025 |
|
|
June 30, 2025 |
|
||
|
Security deposit |
|
|
|
|
|
|
||
|
- Factory site |
|
$ |
|
|
|
$ |
|
|
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 (
| F-18 |
|
|
| Table of Contents |
NOTE 11 – AMOUNTS DUE TO/FROM RELATED PARTIES (INCLUDING CHAIRMAN AND CHIEF EXECUTIVE OFFICER)
The following breakdown of the balances due to/from related parties and director, consisted of:-
|
|
|
September 30, 2025 |
|
|
June 30, 2025 |
|
||
|
|
|
|
|
|
|
|
||
|
Amount due to related parties |
|
|
|
|
|
|
||
|
Borneo Oil Corporation Sdn (“BOC”) (#2) |
|
$ |
|
|
|
$ |
|
|
|
Borneo Oil Berhad (“BOB”) (#1) |
|
|
|
|
|
|
|
|
|
Taipan International Limited (#3) |
|
|
|
|
|
|
|
|
|
Borneo Energy Sdn Bhd (#1) |
|
|
|
|
|
|
|
|
|
Victoria Capital Sdn Bhd (#4) |
|
|
|
|
|
|
|
|
|
Makin Teguh Sdn Bhd (#1) |
|
|
|
|
|
|
|
|
|
J. Ambrose & Partners (#5) |
|
|
|
|
|
|
|
|
|
SB Resorts Sdn Bhd (#2) |
|
|
|
|
|
|
|
|
|
SB Supplies & Logistics Sdn Bhd (#1) |
|
|
|
|
|
|
|
|
|
Borneo Eco Food Sdn. Bhd. (#1) |
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount due from a related party |
|
|
|
|
|
|
|
|
|
Vetrolysis Limited (#6) |
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount due to director |
|
|
|
|
|
|
|
|
|
Mr. Jack Wong (#7) |
|
$ |
|
|
|
$ |
|
|
(#1) BOB is the ultimate holding company of Borneo Eco Food Sdn. Bhd., Borneo Energy Sdn. Bhd. and SB Supplies & Logistic Sdn. Bhd. and held
(#2) SB Resorts Sdn. Bhd. and BOC are wholly owned subsidiaries of BOB (holding
(#3) Taipan International Limited is one of the shareholders of the Company and held
(#4) Victoria Capital Sdn. Bhd. is one of the shareholders of the Company, and held
(#5) J. Ambrose & Partners is controlled by J Ambrose who is one of the shareholders of the Company, and he held
(#6) Encik Anuar bin Ismail, an indirect significant shareholder, is a director of Vetrolysis Limited.
(#7) This represents remaining balance of the special bonus of $
| F-19 |
|
|
| Table of Contents |
NOTE 12 - LEASES
The Company adopted ASU No. 2016-02, Leases and determines whether an arrangement is a lease at inception. This determination generally depends on whether the arrangement conveys the right to control the use of an identified fixed asset explicitly or implicitly for a period of time in exchange for consideration. Control of an underlying asset is conveyed if we obtain the rights to direct the use of and to obtain substantially all of the economic benefit from the use of the underlying asset. Some of our leases include both lease and non-lease components which are accounted for as a single lease component as the Company has elected the practical expedient. Some of the operating lease agreements include variable lease costs, primarily taxes, insurance, common area maintenance or increases in rental costs related to inflation. Substantially all of our equipment leases and some of our real estate leases have terms of less than one year and, as such, are accounted for as short-term leases as we have elected the practical expedient.
Operating leases are included in the right-of-use lease assets, other current liabilities and long-term lease liabilities on the unaudited condensed 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 table below presents the lease-related assets and liabilities recorded on the balance sheet.
|
|
|
September 30, 2025 |
|
|
June 30, 2025 |
|
||
|
|
|
|
|
|
|
|
||
|
Assets |
|
|
|
|
|
|
||
|
Right-of-use asset (#1) |
|
$ |
|
|
|
$ |
|
|
|
Right-of-use asset (#2) |
|
|
|
|
|
|
|
|
|
Total RoU assets |
|
|
|
|
|
|
|
|
|
Less: Accumulated amortization |
|
|
(
|
) |
|
|
(
|
) |
|
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
Current: |
|
|
|
|
|
|
|
|
|
Operating lease liabilities |
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current: |
|
|
|
|
|
|
|
|
|
Operating lease liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total lease liabilities |
|
$ |
|
|
|
$ |
|
|
As of September 30, 2025, right-of-use assets were $
As of June 30, 2025, right-of-use assets were $
For the three months ended September 30, 2025 and 2024, the amortization charge on right-of use assets was $
(#1) This leasing arrangement for the lease of the Segama factory amounting to $
There are no corresponding lease liabilities recorded, as the lease payments for the entire lease period have been paid upfront upon inception of the agreement.
(#2) The Company through its wholly owned subsidiary VRI entered into various lease arrangements for the use of motor vehicles for lease term of three (
| F-20 |
|
|
| Table of Contents |
The table below presents the information related to weighted average discount rate and the remaining lease term (years) of the operating leases.
|
|
|
Three Months ended September 30, |
|
|||||
|
|
|
September 30, 2025 |
|
|
June 30, 2025 |
|
||
|
Operating leases |
|
|
|
|
|
|
||
|
Weighted average discount rate |
|
|
|
% |
|
|
|
% |
|
Weighted average remaining lease term (years) |
|
|
|
|
|
|
|
|
The accretion of lease liability for the three months ended September 30, 2025, and 2024, were $
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 periods.
|
|
|
Three Months ended September 30, |
|
|||||
|
|
|
2025 |
|
|
2024 |
|
||
|
|
|
|
|
|
|
|
||
|
Finance lease cost: |
|
|
|
|
|
|
||
|
Interest on lease liabilities (per ASC 842) |
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating lease cost: |
|
|
|
|
|
|
|
|
|
Operating lease expense (per ASC 842) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total lease expense |
|
$ |
|
|
|
$ |
|
|
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 comprises of interest expenses determined using the effective interest method.
Future Contractual Lease Payments as of September 30, 2025
The below table summarizes (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 three years and thereafter ending September 30:
|
Years ending September 30, |
|
Operating lease amount |
|
|
|
|
|
|
|
|
|
2026 |
|
$ |
|
|
|
2027 |
|
|
|
|
|
2028 |
|
|
|
|
|
Thereafter |
|
|
|
|
|
|
|
|
|
|
|
Total minimum lease liabilities payment |
|
|
|
|
|
Less: imputed interest |
|
|
(
|
) |
|
Present value of lease liabilities |
|
$ |
|
|
|
|
|
|
|
|
|
Representing:- |
|
|
|
|
|
Current liabilities |
|
$ |
|
|
|
Non-current liabilities |
|
|
|
|
|
Present value of lease liabilities |
|
$ |
|
|
| F-21 |
|
|
| Table of Contents |
NOTE 13 - STOCKHOLDERS’ EQUITY
Authorized Stock
The Company has authorized
Preferred stock outstanding
There are no shares of preferred stock outstanding as of September 30, 2025, and June 30, 2025.
Common stock outstanding
On July 1, 2025, the Company issued a total of
On July 1, 2025, the Company issued the second tranche of
On July 28, 2025, the Company issued a total of
On September 12, 2025, the Company issued a total of
On September 8, 2023, the Company, through its wholly-owned subsidiary Verde Renewables entered into a Service and Stock Cancellation Agreement with EMGTA LLC to cancel the Services Agreement dated December 1, 2022, including the cancellation of
Not considering the commitment to cancel shares as above, there were
Apart from the common stock committed to be issued as disclosed in Note 20, the Company has no stock option plan, warrants, or other dilutive securities as at September 30, 2025.
NOTE 14 - NET (LOSS) INCOME PER SHARE
The following table sets forth the computation of basic and diluted net (loss) income per share for the respective years:
|
|
|
Three Months ended September 30, |
|
|||||
|
|
|
2025 |
|
|
2024 |
|
||
|
|
|
|
|
|
|
|
||
|
Net (loss) income |
|
$ |
(
|
) |
|
$ |
|
|
|
Less: Net (loss) income attributable to non-controlling interest |
|
|
|
|
|
|
|
|
|
Net (loss) income attributable to Verde Resources, Inc. shareholders |
|
$ |
(
|
) |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
|
- Basic |
|
|
|
|
|
|
|
|
|
- Diluted |
|
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|
|
|
|
|
|
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|
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|
|
|
|
Net (loss) income per share: |
|
|
|
|
|
|
|
|
|
- Basic |
|
$ |
(
|
) |
|
$ |
|
|
|
- Diluted |
|
$ |
(
|
) |
|
$ |
|
|
# less than $0.005
For the three months ended September 30, 2025, 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.
| F-22 |
|
|
| Table of Contents |
The denominator used in the computation of basic net (loss) income per share is as follows:
|
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|
Three Months ended September 30, |
|
|||||
|
|
|
2025 |
|
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2024 |
|
||
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||
|
Weighted average common shares outstanding |
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|
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|
|
|
Less: weighted average non-vested shares |
|
|
(
|
) |
|
|
(
|
) |
|
Weighted average of common shares-basic |
|
|
|
|
|
|
|
|
The denominator used in the computation of diluted net (loss) income per share is as follows:
|
|
|
Three Months ended September 30, |
|
|||||
|
|
|
2025 |
|
|
2024 |
|
||
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|
|
|
|
|
||
|
Weighted average of common shares- basic |
|
|
|
|
|
|
|
|
|
Add: Dilutive shares |
|
|
- |
|
|
|
|
|
|
Weighted average of common shares- diluted |
|
|
|
|
|
|
|
|
NOTE 15 - INCOME TAX
For the three months ended September 30, 2025 and 2024, the local (“United States of America”) and foreign components of (loss) profit before income taxes were comprised of the following:
|
|
|
Three Months ended September 30, |
|
|||||
|
|
|
2025 |
|
|
2024 |
|
||
|
|
|
|
|
|
|
|
||
|
Tax jurisdiction from: |
|
|
|
|
|
|
||
|
- Local (US regime) |
|
$ |
(
|
) |
|
$ |
(
|
) |
|
- Foreign, including |
|
|
|
|
|
|
|
|
|
British Virgin Island |
|
|
(
|
) |
|
|
|
|
|
Malaysia |
|
|
(
|
) |
|
|
(
|
) |
|
Labuan, Malaysia |
|
|
|
|
|
|
(
|
) |
|
|
|
|
|
|
|
|
|
|
|
(Loss) Profit before income taxes |
|
$ |
(
|
) |
|
$ |
|
|
The provision for income taxes consisted of the following:
|
|
|
Three Months ended September 30, |
|
|||||
|
|
|
2025 |
|
|
2024 |
|
||
|
|
|
|
|
|
|
|
||
|
Current tax: |
|
|
|
|
|
|
||
|
- Local |
|
$ |
|
|
|
$ |
|
|
|
- Foreign |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax |
|
|
|
|
|
|
|
|
|
- Local |
|
|
|
|
|
|
|
|
|
- Foreign |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense (benefit) |
|
$ |
|
|
|
$ |
|
|
| F-23 |
|
|
| Table of Contents |
The effective tax rate in the periods presented reflects the impact of losses incurred across various tax jurisdictions, each with different applicable income tax rates.
The Company mainly operates in the United States and Malaysia and is subject to taxes in the jurisdictions in which they operate, as follows:
United States of America
The Company, VRI, VerdePlus and VLI are subject to the tax laws of United States of America. The U.S. corporate income tax rate is
The Company has provided for a full valuation allowance against the deferred tax assets of $
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
For the three months ended September 30, 2025 and 2024, there was no operating income under the U.S. tax regime.
BVI
Under current BVI law, VRAP is not subject to tax on income.
Labuan
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
Malaysia
The Company’s subsidiaries, Verde Malaysia and Wision, are registered in Malaysia and are subject to the Malaysian corporate income tax at a standard income tax rate of
The operation in Malaysia incurred $
|
|
|
Three Months ended September 30, |
|
|||||
|
|
|
2025 |
|
|
2024 |
|
||
|
|
|
|
|
|
|
|
||
|
Loss before income taxes |
|
$ |
(
|
) |
|
$ |
(
|
) |
|
Statutory income tax rate |
|
|
|
% |
|
|
|
% |
|
Income tax expense at statutory rate |
|
|
(
|
) |
|
|
(
|
) |
|
Non-deductible items |
|
|
|
|
|
|
|
|
|
Tax losses unable to be carried forward |
|
|
(
|
) |
|
|
|
|
|
Valuation allowance |
|
|
|
|
|
|
|
|
|
Income tax expense |
|
$ |
|
|
|
$ |
|
|
| F-24 |
|
|
| Table of Contents |
The following table sets forth the significant components of the deferred tax assets of the Company:
|
|
|
September 30, 2025 |
|
|
June 30, 2025 |
|
||
|
|
|
|
|
|
|
|
||
|
Deferred tax assets: |
|
|
|
|
|
|
||
|
Net operating loss carryforwards, from |
|
|
|
|
|
|
||
|
US tax regime |
|
$ |
|
|
|
$ |
|
|
|
Malaysia tax regime |
|
|
|
|
|
|
|
|
|
Less: valuation allowance |
|
|
(
|
) |
|
|
(
|
) |
|
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 unaudited condensed consolidated statement of operations. The Company did not have uncertainty tax positions or events leading to uncertainty tax position within the next 12 months.
NOTE 16 - RELATED PARTY TRANSACTIONS
|
|
|
Three Months ended |
|
|||||
|
|
|
September 30, |
|
|||||
|
|
|
2025 |
|
|
2024 |
|
||
|
Related party transactions: |
|
|
|
|
|
|
||
|
Rental income: |
|
|
|
|
|
|
||
|
Mr. Jack Wong (#1) |
|
$ |
|
|
|
$ |
|
|
|
Interest expense paid to: |
|
|
|
|
|
|
|
|
|
BOC (#2) |
|
$ |
|
|
|
$ |
|
|
Related party balances are disclosed in Note 11.
(#1) Mr. Jack Wong is the Chief Executive Officer and Chairman of the Company. By Waiver and Consent of Shareholders, Mr. Wong was elected to the board of directors of the Company, effective March 30, 2024.
(#2) SB Resorts Sdn Bhd and
Apart from the transactions and balances detailed elsewhere in these accompanying unaudited condensed consolidated financial statements, the Company has no other significant or material related party transactions during the periods presented.
| F-25 |
|
|
| Table of Contents |
NOTE 17 - CONCENTRATIONS OF RISK
The Company is exposed to the following concentrations of risk:
(a) Major customers and major vendors
For the three months ended September 30, 2025 and 2024,
|
|
|
Revenue |
|
|||||||||||||
|
|
|
September 30, 2025 |
|
|
September 30, 2024 |
|
||||||||||
|
|
|
USD |
|
|
% |
|
|
USD |
|
|
% |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Customer A |
|
$ |
|
|
|
$ |
- |
% |
|
|
|
|
|
$ |
|
% |
|
Customer B |
|
$ |
|
|
|
|
|
% |
|
|
|
|
|
- |
% |
|
|
|
|
Account Receivable |
|
|||||
|
|
|
September 30, 2025 |
|
|
June 30, 2025 |
|
||
|
|
|
|
|
|
|
|
||
|
Customer A* |
|
$ |
|
|
|
$ |
|
|
|
Customer B |
|
$ |
|
|
|
$ | - |
|
* Fully settled in October, 2025.
For the three months ended September 30, 2024,
|
|
|
Direct Costs |
|
|||||||||||||
|
|
|
September 30, 2025 |
|
|
September 30, 2024 |
|
||||||||||
|
|
|
USD |
|
|
% |
|
|
USD |
|
|
% |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Vendor A |
|
$ |
|
|
|
$ | - | % |
|
|
|
|
|
|
|
% |
|
|
|
Account Payable |
|
|||||
|
|
|
September 30, 2025 |
|
|
June 30, 2025 |
|
||
|
|
|
|
|
|
|
|
||
|
Vendor A |
|
$ |
|
|
|
$ |
|
|
(b) Economic and political risk
The Company’s major operations are conducted in the United States and Malaysia. Accordingly, the political, economic, and legal environments in the United States and Malaysia, as well as the general state of U.S. and Malaysian economies may influence the Company’s business, financial condition, and results of operations.
Further, the escalation tensions in the Middle East, including the continuing Russian – Ukraine conflict and trade wars may impact the global economic situation, which indirectly may impact the Company’s operations.
(c) 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 losses for two comparable periods and because of the fluctuating exchange rate actually post higher or lower profit depending on exchange rate of MYR converted to US$ on that date. The exchange rate could fluctuate depending on changes in political and economic environments without notice.
NOTE 18 - 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 three months ended September 30, 2025, and 2024, $
| F-26 |
|
|
| Table of Contents |
NOTE 19 - SHARES ISSUED TO NONEMPLOYEE, EMPLOYEE AND DIRECTOR
On December 15, 2022, the Company entered into a Services Agreement with Looi Pei See (the “Looi Pei See Agreement”) to engage her as a consultant to develop the retail markets for the Company’s products and services in Malaysia and Singapore. The Company will pay Looi Pei See by the issuance of
On October 23, 2023, the Company, through its wholly-owned subsidiary VRI, entered into a Services Agreement (the “Fosnacht Agreement”) with Donald R. Fosnacht to engage him as National Certification and Extensive BCR (Biochar Carbon Removal) Implementation Specialist to develop and implement a comprehensive strategy to obtain national and regional certification and endorsement for carbon net-negative construction products with high biochar content, encompassing asphalt, concrete, and soil stabilization as designated in the Agreement. Under the Agreement, the Company will pay Donald R. Fosnacht by the issuance of
On April 20, 2024, the Company entered into two Services Agreements (the “NIE Agreements”) with Dr. Nam Tran and Dr. Raymond Powell to engage them as National Implementation Experts for its wholly-owned subsidiary Verde Renewables to initiate connections with esteemed asphalt contractors, identify potential partners, explore potential collaborations through their extensive networks in the asphalt industry and recommend strategies to capitalize on emerging opportunities as designated in the NIE Agreements. Under the NIE Agreements, the Company will pay Dr. Nam Tran and Dr. Raymond Powell each by the issuance of
On June 1, 2024, the Company entered into a multi-year Services Agreement (the “Ludwig Agreement”) with Dale Ludwig to engage him as Strategic Advisor for the Company and all its subsidiaries, to maintain and build strong relationships with policymakers at both state and federal levels, collaborate with Missouri Department of Transportation, build relationships with Missouri Asphalt Pavement Association (MAPA) members, collaborate with Missouri contractors to encourage the use of the Company's technologies, identify current biochar producers in Missouri and engage with the Missouri Department of Economic Development. Pursuant to the Ludwig Agreement, the Company agreed to issue a total of
The Company agreed to issue
| F-27 |
|
|
| Table of Contents |
On July 31, 2024, Verde Renewables a wholly owned subsidiary of the Company, entered into Service Agreement with Jeremy P. Concannon (Chief Growth Officer (“CGO”) of the Company effective from August 1, 2024) (the “Concannon Services Agreement”). Pursuant to the Concannon Services Agreement, the Company agreed to issue a total of
The Company agreed to issue
On November 29, 2024, the Company, through its wholly-owned subsidiary Verde Renewables, entered into a consulting services agreement (the “AUM Agreement”) to engage AUM Media Inc (“AUM”), a company incorporated in the State of Delaware, as a Capital Markets, Investor Relations and Media Relations Advisor to provide advice to the Company on its preparations for an equity raise and the planned uplisting to NASDAQ. Pursuant to terms of the AUM Agreement, the services will be provided by AUM on an annual contract basis and the agreement will continue for 12 months, starting January 1, 2025 to December 31, 2025, unless it is terminated in accordance with the termination terms under the AUM Agreement. VRI agreed to pay a fixed monthly discounted fee of $
The Company agreed to issue 350,000 of the Company’s restricted shares of common stock to Karl Strahl, a Director of
On October 18, 2024, the Company entered into a binding Term Sheet with C-Twelve Pty Ltd (“C-Twelve”), a corporation incorporated in Western Australia, granting the Company (i) an exclusive license to utilize its proprietary binder and biochar asphalt mixed designs (the “Licensed Technology”) for the production and commercialization of asphalt surfacing-related products (the “End Products”) within the United States of America and (ii) the first right of refusal to extend the exclusive licensing of the Licensed Technology to other countries and territories subject to terms and conditions to be mutually agreed upon. The Company shall commit to producing a minimum quantity of End Products each year, as defined in the definitive agreement (the “Minimum Production Amount”). The specific Minimum Production Amount will be stipulated in an appendix or exhibit to the final licensing agreement. The Company shall pay C-Twelve royalties based on the Minimum Production Amount, at a rate mutually agreed upon by both parties and specified in the definitive agreement. Should the Company fail to meet the Minimum Production Amount in any given year, it shall remain obligated to pay royalties based on the agreed upon minimum production levels. In the event that production exceeds the Minimum Production Amount, additional royalties shall be payable for the excess production, calculated at the same royalty rate or as otherwise mutually agreed in the definitive agreement. Both parties will mutually agree on a Carbon Credit percentage allowance for C-Twelve. C-Twelve shall grant the Company the right to file, prosecute, and maintain United States patent applications incorporating C-Twelve’s Intellectual Property (IP), subject to C-Twelve’s final review and approval before submission. All such patents will be filed and maintained under the Verde brand name. The Company shall reserve the right to market and sell End Products under its own brand names, with C-Twelve being referenced, as well as C-Twelve having the right to market the Company’s activities under the definitive agreement. C-Twelve shall also collaborate with the Company on a joint installation of its proprietary technology that will take place on the Company’s designated cross-section at the NCAT Test Track in Opelika, Alabama, with a target completion between December 16–20, 2024. The term sheet, originally set to expire on February 28, 2025, has been extended until May 31, 2025. Subsequently the definitive agreement, namely the C-Twelve Agreement, was entered into between the Company and C-Twelve on May 19, 2025 (“Effective Date”). The Company agreed to issue
| F-28 |
|
|
| Table of Contents |
A summary of the status of the Company’s non-vested shares as of September 30, 2025 and June 30, 2025, and changes during the three months ended September 30, 2025 and the year ended June 30, 2025, is presented below:
|
|
|
September 30, 2025 |
|
|
June 30, 2025 |
|
||||||||||
|
Non-vested shares |
|
Shares |
|
|
Weighted-Average-Grant Date Fair Value |
|
|
Shares |
|
|
Weighted-Average-Grant Date Fair Value |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Nonemployee |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
At beginning of the year |
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
Granted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vested |
|
|
(
|
) |
|
|
|
|
|
|
(
|
) |
|
|
|
|
|
At the end of the year |
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee and director |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At beginning of the year |
|
|
|
|
|
$ |
|
|
|
|
- |
|
|
$ |
|
|
|
Granted |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vested |
|
|
(
|
) |
|
|
|
|
|
|
(
|
) |
|
|
|
|
|
At the end of the year |
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
As of September 30, 2025 and June 30,2025, the total stock-based compensation for nonemployees related to non-vested awards not yet recognized is $
As of September 30, 2025 and June 30, 2025, the total stock-based compensation for employees and directors related to non-vested awards not yet recognized is $
There was no income tax benefit recognized associated with the share-based compensation expenses.
NOTE 20 - COMMITMENTS AND CONTINGENCIES
Future commitments with regards to repayment of lease liabilities are disclosed in Note 12.
Part from the above, as of September 30, 2025, the Company had the following capital commitment:
a) commitment to issue restricted shares of common stock to the following service providers on or before October 31, 2025 and 2026, subject to final board approval for the second and third tranches respectively as below, for services to be performed pursuant to the Service Agreements signed with nonemployees as disclosed in Note 13 and Note 19:
|
|
|
Number of shares to be issued |
|
|
|
|
|
|
|
|
|
Financial year ended June 30, 2026 |
|
|
|
|
|
Nam Tran |
|
|
|
|
|
Dale Ludwig |
|
|
|
|
|
|
|
|
|
|
|
Financial year ended June 30, 2027: |
|
|
|
|
|
Nam Tran |
|
|
|
|
|
Raymond Powell |
|
|
|
|
|
Dale Ludwig |
|
|
|
|
|
|
|
|
|
|
b) commitment to issue restricted shares of common stock to employee, Jeremy P. Concannon the second tranche of
c) commitment to issue restricted shares of common stock equivalent to $
| F-29 |
|
|
| Table of Contents |
d) commitment to cancel
e) quarterly committed payments of $
f) commitment to issue
g) Commitment to allocate to
As of September 30, 2025, the Company has no material contingencies.
NOTE 21 - SUBSEQUENT EVENTS
Addendum to C-Twelve Agreement
Effective October 8, 2025,
Ergon License
On October 10, 2025, Verde Renewables entered into a license agreement with Ergon (the “Ergon License”), pursuant to which the Company has granted Ergon an exclusive, non-transferable license to use, manufacture, commercialize, market, sell and distribute any product that contains or is manufactured or formed by Ergon using the Company’s proprietary cold mix biochar asphalt emulsifying agent, Verde V24, in the United States (including its territories), Canada and Mexico, in exchange for Ergon agreeing to purchase Verde V24 from the Company at a fixed price (which is inclusive of all fees associated with the license, but subject to consumer price index adjustments) for use in Ergon’s asphalt road materials products.
The Company has agreed with Ergon to an initial fifteen (15) month “go-to-market period”, during which there will be no minimum purchase requirements for Ergon’s purchases of Verde V24. For each calendar year beginning January 1, 2027, Ergon has agreed to negotiate with the Company in good faith towards the establishment of possible minimum purchase amounts based on certain customary factors. The Company has also agreed with Ergon that if minimum purchase amounts are agreed to for any given calendar year, the Company and Ergon will agree in good faith to new minimum purchase amounts for each subsequent year, subject to consideration of customary factors.
The Company has also agreed to provide Ergon with forty percent (40%) of its share of the carbon removal credits generated from the mixing of the final carbon sequestering BioAsphalt™ surface material, so long as:
(a) the carbon removal credits are generated from bulk mixing or packaged mixed product, and
(b) the mixing of the final BioAsphalt™ surface material includes biochar purchased from the Company.
The Ergon License additionally grants Ergon the right to use the Company’s trademarks and access to ongoing technical services to facilitate the monitoring, reporting, and verification process of each ton of carbon dioxide sequestered.
The term of the Ergon License is ten (10) years, with an automatic renewal for additional ten (10) year periods, subject to a minimum of six (6) months’ notice of cancellation prior to renewal. The Ergon License may be terminated in the event of non-payment of amounts due, initiation of bankruptcy proceedings, or under other customary terms. Additionally, Ergon may terminate the Ergon License upon sixty (60) days’ prior written notice in the event that our Chief Executive Officer, Jack Wong, or our Chief Operating Officer, Eric Bava, are removed from their respective positions with the Company for reasons other than termination for cause or voluntary resignation. The Ergon License additionally contains provisions regarding confidentiality, indemnification, and representations and warranties of the parties that are customary for such an agreement.
Ergon Private Placement
On October 31, 2025, the Company entered into a securities purchase agreement (the “Ergon Purchase Agreement”) with Ergon, pursuant to which Ergon purchased a total of
The Company received gross proceeds of $
Under the terms of the Ergon Purchase Agreement, Ergon is prohibited from selling any shares of common stock acquired in the Offering without the Company’s prior written consent until 180 days (the “Standstill Period”) after the closing of a firm commitment public offering of the common Stock and concurrent uplisting to a national market exchange by the Company (the “Uplist”); provided that if the Uplist has not occurred by September 30, 2026, the prohibition on sales will terminate. The Ergon Purchase Agreement additionally grants Ergon (i) the right to appoint a non-voting observer to the Company’s board of directors for so long as Ergon holds one third (1/3) of the shares of common stock acquired in the Offering and so long as the Ergon License has not expired or been terminated in accordance with its terms, (ii) certain “piggyback” registration rights, whereby, subject to certain exceptions, following the Standstill Period, if the Company files a registration statement for the public offer and sale of its securities, Ergon has the right to have the Ergon Shares and Warrant Shares included in such registration statement for public resale, and (iii) subject to customary exemptions, a three (3) year right of participation in any issuance by the Company of common stock or Common Stock Equivalents (as defined in the Ergon Purchase Agreement) in a Company financing transaction, whereby Ergon has the right to participate in such transaction up to its then-current percentage holdings of the outstanding common stock as determined by dividing the number of shares of common stock then held by Ergon by the number of shares of common stock then outstanding.
The Ergon Purchase Agreement contains customary representations, warranties and agreements by the Company and Ergon, indemnification obligations of the Company, and other customary obligations of the parties. The representations, warranties and covenants contained in the Ergon Purchase Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to the Ergon Purchase Agreement and may be subject to limitations agreed upon by the contracting parties.
Dissolution of BRL and Transfer of Intellectual Property
Pursuant to an Intellectual Property Transfer Agreement dated October 15, 2025, BRL transferred to VRAP all rights, title and interest in the intellectual property known as Catalytic Biofraction Process at its carrying value of $
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 unaudited condensed consolidated financial statements are issued, the Company has evaluated all events or transactions that occurred after September 30, 2025, up through the date the Company issued the unaudited condensed consolidated financial statements.
NOTE 22 – RE-PRESENTATION
Certain prior year amounts have been re-presented to conform to the current year’s presentation. The re-presentation had no impact on previously reported income or losses.
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ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read together with our unaudited condensed financial statements and the related notes appearing elsewhere in this Quarterly Report. See “Cautionary Note Regarding Forward-Looking Statements.” Actual results could differ materially from those discussed below.
Overview
We are a road construction and building materials company offering proprietary, environmentally sustainable materials and seeking to redefine our industry with a clear mission: enabling the #TransitiontoZero™. Our proprietary product BioAsphalt™ incorporates biochar , a powerful carbon sequestering material, into infrastructure with the goal of reducing emissions, improving performance, and lowering overall costs. We also offer a licensed proprietary cold mix biochar asphalt emulsifying agent, which we call “ Verde V24 ”. Further, we expect to generate revenues from the generation by our products, and our subsequent sale, of carbon removal credits . We believe our proprietary products, know-how and business plan place us at the forefront of sustainable innovation in the construction and building materials sector, an industry we believe is long overdue for transformation.
Our strategic roadmap for achieving net-zero emissions—what we call the Verde Net Zero Blueprint —has achieved the following significant milestones:
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The issuance to our company in April 2025 of the world’s first carbon removal credit from asphalt production and application, certified by Puro.earth, the leading global registry for engineered carbon removal. |
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Technological validation of our BioAsphalt™ by NCAT, including receipt of preliminary performance results from NCAT in July 2025 that demonstrated consistent durability, particularly under low-volume roadway conditions. Most recently, in September 2025, NCAT’s latest evaluation of our cold recycling mix using 100% reclaimed asphalt pavement (“RAP”) from laboratory testing demonstrated that our cold-recycled mix not only meets but exceeds industry specifications for cold-recycled asphalt. These results showed superior cohesion, high tensile strength ratio (“TSR”), and retained stability compared to standard cold mix benchmarks, validating its strength, durability, and moisture resistance. |
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Our Verde Net Zero Blueprint is comprised of our portfolio of validated technologies that enable the production of sustainable infrastructure materials with the integrated ability to generate certified carbon removal credits. This positions carbon sequestration not just as an environmental co-benefit, but as a monetizable feature embedded in our business plan.
As the rise of artificial intelligence accelerates data center energy consumption, which is now projected to account for a growing share of global electricity use, enterprises worldwide are facing increasing pressure to offset their carbon footprints. This is driving up demand for high-integrity, verifiable carbon credits.
Our model presents a novel combination of infrastructure performance with measurable climate impact, establishing us as a first mover in scalable Net Zero solutions, which we believe positions us well to meet the demands of a rapidly decarbonizing, carbon-constrained economy.
With key third-party validations from groups such as NCAT and Puro. earth in place, we are now focused on commercializing our solutions in the United States, our most strategic market. To this end, we recently entered into an exclusive licensing agreement with Ergon, an industry leader in asphalt innovation and supply and one of the largest liquid asphalt and emulsion marketers in North America, for the production of asphalt surface course material containing our proprietary solution across North America. As our domestic operations scale through Ergon, we plan to license the Verde Net Zero Blueprint globally, targeting infrastructure and materials companies in countries aligned with the Paris Climate Agreement and pursuing Net Zero by 2050.
We plan to expand operations and generate and grow revenue over the next twelve (12) months primarily through marketing and selling our proprietary road technologies through Ergon exclusively in North America, with an initial focus on the United States. Production planning of our materials has already commenced, with distribution anticipated to occur through the Ergon’s established sales channels, reaching asphalt mixing plants across the United States, Canada and Mexico for blending and placement. Embedding our technology into Ergon’s nationwide business footprint would enable immediate scalability and near-term revenue generation.
We believe our asset light business model enables scalable growth while minimizing capital intensity, creating recurring revenue streams through licensing, sales, royalties, carbon monetization, and strategic partnerships. We operate through our primary U.S. subsidiary, Verde Renewables, headquartered in St. Louis, Missouri.
Recent Developments
Addendum to C-Twelve Agreement
Effective October 8, 2025, we entered into the C-Twelve Addendum with C-Twelve pursuant to which (i) C-Twelve approved our entry into the Ergon License (as defined below), (ii) the exclusive territory granted to us under the C-Twelve Agreement is expanded to comprise the United States (including all states, territories, and regions thereof), Canada and Mexico, (iii) we agreed to pay an additional $1 million in exclusive licensing fees for the expanded territories of Canada and Mexico, which shall be paid concurrently with the C-Twelve Loan and (iv) we agreed to a potential conditional fee payment to C-Twelve in 2027 based on agreed minimum amounts of liters of Verde V24 which the Company may purchase from C-Twelve. We are required to fund the C-Twelve Loan and the additional $1 million fee to C-Twelve (the proceeds of which are expected to be used by C-Twelve in part to enhance its Verde V24 manufacturing capability) within thirty (30) days of closing of a transaction in which our common stock becomes listed on a U.S. national exchange, provided that if such funding is not achieved by July 31, 2026, C-Twelve shall have the right, on ten (10) business days’ notice, to hold us in breach of the C-Twelve Agreement.
The foregoing description of the C-Twelve Addendum is not complete and is qualified in its entirety by reference to the full text of the C-Twelve Addendum, a copy of which is filed as Exhibit 10.2 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on October 14, 2025.
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Ergon License
On October 10, 2025, we entered into a license agreement with Ergon (the “Ergon License”), pursuant to which we granted Ergon an exclusive, non-transferable license to use, manufacture, commercialize, market, sell and distribute any product that contains or is manufactured or formed by Ergon using our proprietary cold mix biochar asphalt emulsifying agent, Verde V24, in the United States (including its territories), Canada and Mexico, in exchange for Ergon agreeing to purchase Verde V24 from us at a fixed price (which is inclusive of all fees associated with the license, but subject to consumer price index adjustments) for use in Ergon’s asphalt road materials products.
We agreed with Ergon to an initial fifteen (15) month “go-to-market period”, during which there will be no minimum purchase requirements for Ergon’s purchases of Verde V24. For each calendar year beginning January 1, 2027, Ergon has agreed to negotiate with us in good faith towards the establishment of possible minimum purchase amounts based on certain customary factors. We have also agreed with Ergon that if minimum purchase amounts are agreed to for any given calendar year, we and Ergon will agree in good faith to new minimum purchase amounts for each subsequent year, subject to consideration of customary factors.
We also agreed to provide Ergon with forty percent (40%) of its share of the carbon removal credits generated from the mixing of the final carbon sequestering BioAsphalt™ surface material, so long as:
(a) the carbon removal credits are generated from bulk mixing or packaged mixed product, and
(b) the mixing of the final BioAsphalt™ surface material includes biochar purchased from us.
The Ergon License additionally grants Ergon the right to use our trademarks and access to ongoing technical services to facilitate the monitoring, reporting, and verification process of each ton of carbon dioxide sequestered.
The term of the Ergon License is ten (10) years, with an automatic renewal for additional ten (10) year periods, subject to a minimum of six (6) months’ notice of cancellation prior to renewal. The Ergon License may be terminated in the event of non-payment of amounts due, initiation of bankruptcy proceedings, or under other customary terms. Additionally, Ergon may terminate the Ergon License upon sixty (60) days’ prior written notice in the event that our Chief Executive Officer, Jack Wong, or our Chief Operating Officer, Eric Bava, are removed from their respective positions with us for reasons other than termination for cause or voluntary resignation. The Ergon License additionally contains provisions regarding confidentiality, indemnification, and representations and warranties of the parties that are customary for such an agreement.
The foregoing description of the Ergon License is not complete and is qualified in its entirety by reference to the full text of the Ergon License, a copy of which is filed as Exhibit 10.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on October 14, 2025.
Ergon Private Placement
On October 31, 2025, we entered into a securities purchase agreement (the “Ergon Purchase Agreement”) with Ergon, pursuant to which Ergon purchased a total of 24,943,876 shares (the “Ergon Shares”) of our common stock and a warrant (the “Warrant”) to purchase 24,943,876 shares of our common stock (the “Warrant Shares”), at a combined purchase price of $0.08018 per share (the “Offering Price”), which represents a five percent (5%) discount to the volume-weighted average price of our common stock for the thirty (30) trading days immediately preceding the closing of the offering of the Ergon Shares and Warrant by us to Ergon (the “Offering”).
We received gross proceeds of $2 million from the Offering, excluding proceeds, if any, from the exercise of the Warrant. We intend to use the proceeds of the Offering for working capital and general corporate purposes.
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Under the terms of the Ergon Purchase Agreement, Ergon is prohibited from selling any shares of common stock acquired in the Offering without our prior written consent until 180 days (the “Standstill Period”) after the closing of a firm commitment public offering of our the common stock and our concurrent uplisting to a national market exchange (the “Uplist”); provided that if the Uplist has not occurred by September 30, 2026, the prohibition on sales will terminate. The Ergon Purchase Agreement additionally grants Ergon (i) the right to appoint a non-voting observer to our board of directors for so long as Ergon holds one third (1/3) of the shares of common stock acquired in the Offering and so long as the Ergon License has not expired or been terminated in accordance with its terms, (ii) certain “piggyback” registration rights, whereby, subject to certain exceptions, following the Standstill Period, if we file a registration statement for the public offer and sale of our securities, Ergon has the right to have the Ergon Shares and Warrant Shares included in such registration statement for public resale, and (iii) subject to customary exemptions, a three (3) year right of participation in any issuance by us of our common stock or Common Stock Equivalents (as defined in the Ergon Purchase Agreement) in a financing transaction, whereby Ergon has the right to participate in such transaction up to its then-current percentage holdings of our outstanding common stock as determined by dividing the number of shares of our common stock then held by Ergon by the number of shares of our common stock then outstanding.
The Ergon Purchase Agreement contains customary representations, warranties and agreements by us and Ergon, indemnification obligations of ours, and other customary obligations of the parties. The representations, warranties and covenants contained in the Ergon Purchase Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to the Ergon Purchase Agreement and may be subject to limitations agreed upon by the contracting parties.
The foregoing description of the Ergon Purchase Agreement and Warrant are not complete and are qualified in its entirety by reference to the full text of the Ergon Purchase Agreement and Warrant, copies of which are filed as Exhibits 10.1 and 4.1, respectively, to our Current Report on Form 8-K filed with the Securities and Exchange Commission on November 4, 2025.
Key Factors that Affect Our Results of Operations
We believe the following key factors may affect our financial condition and results of operations:
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Ergon License : Our entry into the Ergon License is expected to drive long-term revenue growth through product sales of Verde V24 and related proprietary materials. The Ergon License establishes Ergon as the exclusive licensee for Verde V24 in the United States, Canada and Mexico, enabling large-scale commercialization of our Verde V24 technology while allowing us to expand our business without the capital demands of direct manufacturing or distribution. |
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Adoption of Biochar-Asphalt Technology : Market acceptance of the Verde Net Zero Blueprint technologies by contractors, state Departments of Transportation, and private sector customers will influence royalty streams and future expansion opportunities. |
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Carbon Credit Monetization : The issuance, pricing, and sales of certified carbon removal credits tied to our biochar-based asphalt applications will be a key driver of financial performance. |
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Operational and Integration Costs : Expenses related to technology transfer, compliance monitoring, and integration into licensee production systems will impact near-term margins. |
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Regulatory and Environmental Policies : Federal and state infrastructure spending, emissions reduction mandates, and climate policies may accelerate the adoption of our technology and corresponding revenue growth. |
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Continuous Improvement and Innovation: We are committed to continuous improvement and innovation on our core technologies to enhance performance, durability, and environmental benefits. |
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Maintaining the Quality of our Products: We seek to maintain robust quality assurance and measurement systems to confirm that all licensed products consistently meet our technical specifications and industry standards. |
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Results of Operations
For the three months ended September 30, 2025 and 2024:
The following table sets forth selected financial information from our statements of comprehensive loss for the three months ended September 30, 2025 and 2024:
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September 30, 2025 |
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September 30, 2024 |
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Change |
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Amount |
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Amount |
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% |
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(Unaudited) |
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(Unaudited) |
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Revenue |
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$ | 2,269 |
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$ | 125,570 |
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-98.2 | % |
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Cost of revenue |
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$ | (1,335 | ) |
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$ | (49,596 | ) |
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-97.3 | % |
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Gross profit |
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$ | 934 |
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$ | 75,974 |
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-98.8 | % |
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Selling, general and administrative expenses |
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$ | (888,976 | ) |
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$ | (812,563 | ) |
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9.4 | % |
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Other operating expenses |
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$ | (55,896 | ) |
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$ | (55,118 | ) |
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1.4 | % |
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Loss from operation |
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$ | (943,938 | ) |
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$ | (791,707 | ) |
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19.2 | % |
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Interest expense |
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$ | - |
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$ | (97,831 | ) |
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-100.0 | % |
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Other income |
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$ | 24,383 |
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$ | 1,244,253 |
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-98.0 | % |
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NET (LOSS) PROFIT |
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$ | (919,555 | ) |
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354,715 |
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-359.2 | % |
The average rate of MYR : USD for three months ended September 30, 2025 and September 30, 2024 was 0.2365 and 0.2305 respectively.
Revenue
We generated $2,269 in revenue for the period ended September 30, 2025, representing a decrease of $123,301, or 98.2%, compared to revenue of $125,570 in the prior period. Our revenue was mainly derived from the sale of our 50-lb bagged BioAsphalt™ product.
The decrease in sales primarily reflects our planned depletion of our initial formulation of our bagged BioAsphalt™ product as we shifted toward an upgraded formulation of our BioAsphalt™ product that includes, among other enhancements, the use of recycled asphalt materials, an improved designer blend of biochar, and a more compatible grade of liquid asphalt in the emulsion. During this transition period, production and distribution of the earlier formulation were intentionally scaled back to support ongoing research and development activities. The transition from the bagged BioAsphalt™ to the upgraded formulation has caused a temporary dip in revenue until the upgraded formulation’s full launch and integration into our commercial channels.
Cost of revenue
Cost of revenue in the three months ended September 30, 2025 and September 30, 2024 were $1,335 and $49,596, respectively, a decrease of $48,261 or 97.3%. The decrease is mainly due to the decreased volume of sales as mentioned above.
Gross Profit
Gross profit of $934 was recorded for the three months ended September 30, 2025, compared to a gross profit of $75,974 for the corresponding period in 2024, representing a decrease of $75,040 or 98.8%. The decline was primarily driven by the significantly lower quantity of product sold during the current period. In addition, sales in the current period were made largely at the distribution level, which typically generate lower margins than retail-level sales, which predominated during the corresponding period in 2024.
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Selling, General and Administrative Expenses
Selling, general and administrative expenses was comprised mainly of salaries, office costs, legal and professional fees, consultancy fee, research and development cost and travelling expenses. We incurred $888,976 and $812,563 in selling, general and administrative expenses for the three months ended September 30, 2025 and 2024, respectively. Selling, general and administrative expenses increased by 9.4%, or $76,413, primarily due to an increase in research and development cost of $62,500 as we continued our work to the upgraded formulation of our BioAsphalt™ product.
Other Operating Expenses
Total other operating expenses for the period ended September 30, 2025 was $55,896, an increase of $778, or 1.4%, compared to $55,118 for the period ended September 30 2024. Other operating expenses were comprised of expenditure related to the maintenance of our biofraction plant in Borneo. In June 2023, we made a strategic decision to temporarily cease the operation of our Borneo biofraction plant and focus on our North American operations.
Interest expense
Total interest expense for the period ended September 30, 2025 was $0, compared to $97,831 for the period ended September 30, 2024. The absence of interest expense during the current period was primarily attributable to the settlement of lease liabilities in our prior fiscal year in connection with the disposal of asset held for sale and certain property, plant, and equipment that were under financing arrangements, and the early conversion of promissory notes with an aggregate principal amount of $675,888 on August 16, 2024 in the prior period.
Other income
Other income for the period ended September 30, 2025 was $24,383, a decrease of $1,219,870, or 98%, compared to $1,244,253 for the period ended September 30, 2024. The decrease was primarily due to a decrease in unrealized foreign exchange gains from $718,401 to $17,339 due to lower fluctuations of the U.S. dollar against the Malaysian Ringgit and the absence of a non-recurring insurance claim gain of $481,513 recognized in the three months ended September 30, 2024. Interest income from bank deposits declined to $7,044 in the three months ended September 30, 2025 from $22,537 in the three months ended September 30, 2024, reflecting reduced deposit placements in this period. No rental income was recorded in the current period compared to $38,200 for the period ended September 30, 2024, following the disposal of the related property in prior period.
Net (loss) profit
As a result of the above factors, we incurred a net loss of $919,555 for the three months ended September 30, 2025, representing an increase in net loss of $1,274,270, or 359.2%, compared to a net profit of $354,715 for the three months ended September 30, 2024.
Liquidity and Capital Resources
The following summarizes the key component of our cash flows for the three months ended September 30, 2025 and 2024.
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Cash Flow Date |
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September 30, 2025 |
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September 30, 2024 |
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Net Cash Used in operating activities |
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$ | (777,851 | ) |
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$ | (503,644 | ) |
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Net Cash Provided by investing activities |
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500,000 |
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1,350,671 |
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Net Cash Provided by financing activities |
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448,000 |
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4,863 |
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Effect of exchange rate fluctuation on cash and cash equivalents |
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(15,722 | ) |
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(6,838 | ) |
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Net increase in cash and cash equivalents |
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154,427 |
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845,052 |
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Cash and cash equivalents, beginning of period |
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1,021,112 |
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279,137 |
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Cash and cash equivalents, ending of period |
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$ | 1,175,539 |
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$ | 1,124,189 |
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Net Cash Used in Operating Activities
Cash used in operating activities reflects net loss adjusted for certain non-cash items, including depreciation expense, amortization of right of use assets and stock-based compensation, and the effects of changes in operating assets and liabilities. Our net cash used in operating activities increased $274,207, or 54.4%, from $503,644 for period ended September 30, 2024, to $777,851 for period ended June 30, 2025. The increase in cash used in operating activities for the period ended September 30, 2025, as compared to the same period in 2024 was primarily due to operational loss of $919,555 offset by noncash movements of $447,972 and net decrease in working capital of $306,268. The noncash expenses comprised $55,159 in depreciation, $25,714 in amortization, $292,691 in share-based compensation to nonemployee, $69,108 in share-based compensation to employees, $8,345 in share-based compensation to a director, operating lease expense of $14,294 and offset by unrealized foreign exchange gain of $17,339. The net decrease in working capital was used in amount due to director, other receivables and deposits, account payables, repayments on leases, accrued liabilities and other payables, offset against increase of working capital from inventories, related parties and prepayments.
Net Cash Provided by Investing Activities
The net cash provided by investing activities for the period ended September 30, 2025 was $500,000, representing a decrease of $850,671, or 63%, compared to net cash from investing activities of $1,350,671 for the period ended September 30, 2024. The net cash provided by investing activities of $500,000 for the three months ended September 30, 2025 was from the withdrawal of deposit with bank. Meanwhile, during the period ended September 30, 2024, the net cash provided by investing activities of $1,350,671 was due to proceeds from disposal of assets held for sale of $559,450, proceeds from insurance recoveries of $541,221 and withdrawal of deposit in bank of $250,000.
Net Cash Provided by Financing Activities
The net cash provided by financing activities for the three months ended September 30, 2025, was $448,000, representing an increase of $443,137, or 9,112.4%, compared to the net cash provided by financing activities for the three months ended September 30, 2024, of $4,863. The net cash provided by financing activities of $448,000 for the three months ended September 30, 2025, was from proceeds from shares issued and to be issued of $448,000. Meanwhile, for the period ended September 30, 2024, the net cash provided by financing activities of $584,000 resulted from proceeds from shares issued and shares to be issued of $584,000, set off by repayment to lease liabilities of $579,137.
We generated a net cash inflow of $154,427 for the period ended September 30, 2025.
Critical Accounting Estimates
The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make judgments, assumptions, and estimates that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes thereto. Note 2, entitled “Summary of Significant Accounting Policies,” to the unaudited condensed consolidated financial statements describes the significant accounting policies and methods used in the preparation of the unaudited condensed consolidated financial statements. The accounting policies described below are significantly affected by critical accounting estimates. Such accounting policies require significant judgments, assumptions, and estimates used in the preparation of the unaudited condensed consolidated financial statements, and actual results could differ materially from the amounts reported based on these policies.
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1. Useful Lives and Depreciation of Property, Plant and Equipment
Our property, plant and equipment are stated at cost, net of accumulated depreciation and impairment losses, if any. We depreciate our property, plant and equipment on a straight-line basis over their estimated useful lives, which range from 5 to 10 years for plant and machinery, and 3 to 10 years for other asset categories, including office equipment, computers, motor vehicles, furniture and fittings, and renovations. The depreciation method and estimated useful lives reflect management’s judgment based on historical experience, the nature of the assets, their anticipated use, and technological and economic factors.
The estimation of useful lives is a critical accounting estimate because it requires significant management judgment and has a material impact on our consolidated financial statements. Changes in the estimated useful lives of our assets could significantly affect the timing of depreciation expense recognized in future periods. For the three months ended September 30, 2025 and 2024, depreciation expense totaled $55,159 and $70,230, respectively.
We periodically review the estimated useful lives of our assets and revise them when events or changes in circumstances indicate that the current estimates are no longer appropriate. We also review our assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
2. Impairment of Long-Lived Assets and Intangible Assets
We assess long-lived assets, including property, plant and equipment, and indefinite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Recoverability of long-lived assets is measured by comparing the carrying value to the estimated undiscounted future cash flows expected from the asset or asset group.
If the carrying value exceeds the expected undiscounted cash flows, the impairment loss is measured as the excess of the carrying amount over the fair value, which is generally determined using discounted cash flow models involving significant estimates and assumptions, such as future revenues, operating margins, and discount rates.
These estimates are inherently subjective and sensitive to changes in assumptions. Changes in these assumptions or actual results that differ from those used in our estimates could result in material impairment charges in future periods.
No plant and machinery were impaired and written off during the three months ended September 30, 2025 and 2024 respectively.
3. Allowance for Expected Credit Losses
We maintain an allowance for expected credit losses on accounts receivable and other financial instruments based on a current expected credit loss (CECL) model under ASC 326. The allowance is estimated using a combination of quantitative and qualitative factors, including historical loss experience, current economic conditions, customer-specific credit risk, and reasonable and supportable forecasts of future conditions.
Significant judgment is involved in identifying relevant risk factors, evaluating the impact of macroeconomic variables (e.g., inflation, interest rates, geopolitical instability), and determining the appropriate loss rates. A change in these factors could materially affect the timing and amount of credit loss provisions.
No allowance for expected credit losses on accounts receivable during the three months ended September 30, 2025 and 2024 respectively.
4. Revenue Recognition and Principal vs. Agent Determination
We recognize revenue in accordance with ASC 606 by identifying performance obligations in contracts, determining the transaction price, and allocating the price to each performance obligation. Significant estimates and judgments are involved in determining the point in time when control of a product transfers to the customer and whether we act as principal or agent in arrangements involving third-party contributions to the delivery of goods.
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These judgments affect the timing and amount of revenue recognized. Factors considered include our role in the transaction, control of inventory before transfer, and pricing discretion. Incorrect judgments could materially impact reported revenue and profitability.
5. Stock-Based Compensation
We account for stock-based compensation in accordance with Accounting Standards Codification (“ASC”) Topic 718-10, Compensation—Stock Compensation, which requires all share-based payment arrangements with employees, directors, and nonemployees to be measured and recognized in the financial statements based on the fair value of the equity instruments granted
We consider the accounting for stock-based compensation to be a critical accounting estimate due to the significant judgment and assumptions involved in determining the grant date, estimating the fair value of the awards, and the timing and recognition of related expenses. These estimates have a material impact on our results of operations.
For both employee and nonemployee awards, the grant date is determined based on the date of final Board approval of the award, in accordance with ASC 718. The fair value of stock awards is generally determined based on the market price of our common stock on the grant date. For awards where the grant date has not yet been established but the service inception date has commenced, we accrue compensation expense based on the estimated fair value of our common stock at the end of each reporting period, which may introduce variability in the reported compensation expense.
As of September 30, 2025 and June 30, 2025, we recorded accrued compensation costs related to these arrangements of $152,603 and $89,165, respectively.
In certain instances, we issue fully vested, nonforfeitable share-based awards to nonemployees prior to receiving the goods or services, resulting in the recognition of prepaid share-based compensation. These awards are accounted for under ASC 718-10-45-3 and are recorded as prepaid assets when issued, with expense recognized as the goods or services are received. The fair value of such awards is determined at the grant date, based on the market price of our common stock.
We recognize share-based compensation expense over the requisite service period for employees, and the vesting period for nonemployees, in accordance with ASC 718. Our policy is to recognize forfeitures as they occur, rather than estimating forfeitures at the grant date, which may result in increased volatility in compensation expense.
During the three months ended September 30, 2025 and 2024, we recognized total share-based compensation expense as follows:
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September 30, 2025 |
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September 30, 2024 |
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||
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Nonemployees |
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$ | 292,691 |
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$ | 272,005 |
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Employee |
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69,108 |
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106,585 |
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Director |
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8,345 |
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- |
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Total |
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$ | 370,144 |
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$ | 378,590 |
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The fair value of our common stock, particularly in periods of volatility, is a key source of estimation uncertainty. Changes in assumptions or market conditions could significantly impact the fair value of awards and the related compensation expense.
6. Deferred Taxes and Valuation Allowance
We assess the realizability of deferred tax assets by evaluating both positive and negative evidence, including future taxable income, tax planning strategies, and recent financial performance. If it is more likely than not that some or all of the deferred tax assets will not be realized, a valuation allowance is recorded.
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Judgment is required to estimate future taxable income and assess the impact of economic trends or changes in tax law. Adjustments to valuation allowances could materially impact our income tax expense or benefit.
We believe the estimates and assumptions used in preparing our consolidated financial statements are reasonable and appropriate. However, actual results could differ materially from those estimates, which could have a significant impact on our financial condition, results of operations, and cash flows.
Working Capital
As of September 30, 2025, we had cash and cash equivalents of $1,175,539, representing an increase of $154,427, or 15.1%, compared to $1,021,112 as of June 30, 2025, respectively. Deposits with banks decreased by $500,000, or 39.2%, from $1,276,484 as of June 30, 2025, to $776,484 as of September 30, 2025. The remaining $776,484 held in a certificate of deposit account is scheduled to mature in December 2025. Our accumulated operating losses increased by $919,555, or approximately 5%, from $18,263,181 as of June 30, 2025, to $19,182,736 as of September 30, 2025. Subsequent to the period cover by this Quarterly Report, we raised gross proceeds of $2,000,000 in the Offering with Ergon. We believe that the successful completion of the Offering has improved our liquidity and financial position for the near term. We expect to seek funding for our operations over the next twelve months through additional public and private offerings of our securities, including a potential listing of our common stock on a national exchange and concurrent public offering.
Our primary source of cash is currently generated from the sale of our securities. We will need to raise additional funds beyond our current working capital balance in order to finance future development of our products and services until such time as future revenues are achieved. We anticipate generating revenue in the future from the Ergon License; however, there can be no assurances that sufficient revenue will be generated or that revenues, if any are achieved, will be sufficient to fund our operations on a profitable basis, particularly given our negotiated 15 month “go to market” period with Ergon.
As we continue to make progress commercially, we believe we will have potential opportunities to strengthen our balance sheet as needed including, but not limited to, debt and/or equity financing, as well as through additional potential licensing arrangements. All of these financing options should provide our company with the flexibility as we continue to drive shareholder value. However, we may not be able to obtain financing on favorable terms when needed, or at all. Our ability to obtain additional financing will be subject to a number of factors, including market conditions, fluctuations in interest rates, our operating performance and investor sentiment. If we are unable to raise additional capital when required or on acceptable terms, we may have to significantly delay or scale back our operations or obtain funds by entering into agreements on unfavorable terms. Failure to obtain additional capital on acceptable terms, or at all, would result in a material and adverse impact on our operations.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that are material to investors.
ITEM 3: Quantitative and Qualitative Disclosure About Market Risk
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.
ITEM 4: Controls and Procedures
Disclosure Controls and Procedures
Under the supervision and with the participation of our senior management, including our principal executive officer and principal financial officer, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this Quarterly Report. We are continuing to enhance our internal control environment; however, as a smaller reporting company with limited personnel, we have identified certain material weaknesses that require further remediation. These include (1) constraints inherent in a small finance team that impact segregation of duties, (2) the need for additional formalization and documentation of accounting policies, procedures, and review controls, (3) the need to further strengthen U.S. GAAP and SEC reporting expertise within the finance function, (4) the absence of an internal audit function to independently assess and monitor the effectiveness of internal controls, and (5) the lack of a functioning audit committee to provide appropriate oversight of the financial reporting and internal control process. Our management has already initiated enhancements to address these matters, including implementing additional review procedures, engaging external advisors where appropriate, and evaluating further changes to our internal control structure. We will continue to prioritize remediation efforts as resources permit.
Changes in Internal Control over Financial Reporting
During the three months ended September 30, 2025, we have continued to progressively develop and improve on the implementation of internal controls over financial reporting particularly in view of the material weakness described above.
Inherent Limitations of Controls
Internal controls over financial reporting are designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with U.S. GAAP. Because of inherent limitations, internal controls may not prevent or detect all misstatements. In addition, the design, implementation, and effectiveness of controls may be affected by changes in conditions over time. Accordingly, even effective internal controls can provide only reasonable, not absolute, assurance that the objectives of the control system will be achieved.
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PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, we may be subject to legal proceedings, investigations and claims incidental to the conduct of our business.
We are not a party to, nor are we aware of, any legal proceedings, investigations or claims which, in the opinion of our management, are likely to have a material adverse effect on our business, financial condition or results of operations.
Item 1A. Risk Factors
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item. Our current risk factors are set forth in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025, filed with the SEC on October 23, 2025.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Unregistered Sales of Equity Securities
During the three month period ended September 30, 2025, we conducted the bellow issuances of our shares of common stock in private placement transactions. The shares were issued in reliance upon one or more exemptions from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), including Section 4(a)(2) thereof, and Regulation D and Regulation S promulgated thereunder.
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On July 1, 2025, we issued 4,444,445 restricted shares of our common stock to one non-U.S. investor for gross proceeds of $400,000, at a price of $0.09 per share of common stock. |
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● |
On July 1, 2025, we issued 3,300,000 restricted shares of our common stock to one non-U.S. shareholder and seven U.S. shareholders for gross proceeds of $264,000, at a price of $0.08 per share. |
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On July 28, 2025, we issued a total of 187,500 restricted shares of our common stock to one U.S. shareholder for gross proceeds of $15,000, at a price of $0.08 per share. |
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● |
On September 12, 2025, we issued a total of 5,412,500 restricted shares of our common stock to three non-U.S. shareholders for gross proceeds of $433,000, at a price of $0.08 per share. |
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
None.
Item 3. Defaults upon Senior Securities
None.
Item 4. Mine and Safety Disclosure
Not applicable.
Item 5. Other Information
No director or Section 16 officer
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Item 6. Exhibits
The following is a complete list of exhibits filed or furnished, as applicable, as part of this Quarterly Report on Form 10-Q. Exhibit numbers correspond to the numbers in the Exhibit Table of Item 601 of Regulation S-K.
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Exhibit |
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Description |
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Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
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Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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101.INS* |
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Inline XBRL Instance Document |
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101.SCH* |
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Inline XBRL Taxonomy Extension Schema Document |
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101.CAL* |
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Inline XBRL Taxonomy Extension Calculation Linkbase Document |
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101.DEF* |
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Inline XBRL Taxonomy Extension Definition Linkbase Document |
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101.LAB* |
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Inline XBRL Taxonomy Extension Label Linkbase Document |
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101.PRE* |
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Inline XBRL Taxonomy Extension Presentation Linkbase Document |
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104* |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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* |
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Filed herewith. |
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** |
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Furnished herewith. |
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SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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Date: November 19, 2025 |
VERDE RESOURCES, INC. |
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By: |
/s/ Jack Wong |
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Jack Wong |
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Chief Executive Officer (Principal Executive Officer) |
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By: |
/s/ Sherina Chui |
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Sherina Chui |
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Chief Financial Officer (Principal Financial and Accounting Officer) |
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