UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒ |
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For the quarterly period ended December 31, 20212022
or
☐ |
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For the transition period from ____________ to ________________
Commission file number: 000-55276
Verde Resources, Inc. |
(Exact name of registrant as specified in its charter) |
Nevada |
| 32-0457838 |
(State or other jurisdiction of incorporation or organization) |
| (I.R.S. Employer Identification No.) |
|
(Address of principal executive offices) |
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(Registrant’s telephone number, including area code) |
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. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one).
Large accelerated filer | ☐ | Accelerated filer | ☐ |
Non-accelerated Filer | ☐ | Smaller reporting company | ☒ |
(Do not check if a smaller reporting company) |
|
|
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of February 22, 202210, 2023 there were 810,742,1091,173,576,654 shares of the issuer’s common stock, par value $0.001, outstanding.
VERDE RESOURCES, INC.
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 20212022
TABLE OF CONTENTS
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Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
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Unregistered Sales of Equity Securities and Use of Proceeds. |
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2 |
Table of Contents |
CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical facts, included in this Form 10-Q including, without limitation, statements in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, events or developments which the Company expects or anticipates will or may occur in the future, including such things as future capital expenditures (including the amount and nature thereof); expansion and growth of the Company’s business and operations; and other such matters are forward-looking statements. These statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate under the circumstances. However, whether actual results or developments will conform with the Company’s expectations and predictions is subject to a number of risks and uncertainties, including general economic, market and business conditions; the business opportunities (or lack thereof) that may be presented to and pursued by the Company; changes in laws or regulation; and other factors, most of which are beyond the control of the Company.
These forward-looking statements can be identified by the use of predictive, future-tense or forward-looking terminology, such as “believes,” “anticipates,” “expects,” “estimates,” “plans,” “may,” “will,” or similar terms. These statements appear in a number of places in this filing and include statements regarding the intent, belief or current expectations of the Company, and its directors or its officers with respect to, among other things: (i) trends affecting the Company’s financial condition or results of operations for its limited history; (ii) the Company’s business and growth strategies; and, (iii) the Company’s financing plans. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. Such factors that could adversely affect actual results and performance include, but are not limited to, the Company’s limited operating history, potential fluctuations in quarterly operating results and expenses, government regulation, technological change and competition. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to our filings with the SEC under the Exchange Act and the Securities Act of 1933, as amended, including our Current Report on Form 10-K filed with the Securities and Exchange Commission on November 4, 2022.
Consequently, all of the forward-looking statements made in this Form 10-Q are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequence to or effects on the Company or its business or operations. The Company assumes no obligations to update any such forward-looking statements.
3 |
Table of Contents |
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Item Regulation S-X, Rule 10-01(c) Interim Financial Statements, and, therefore, do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders’ equity in conformity with generally accepted accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the six months ended December 31, 20212022 are not necessarily indicative of the results that can be expected for the year ended June 30, 2022.2023.
VERDE RESOURCES, INC.
INDEX TO INTERIMUNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD OF ENDED DECEMBER 31, 20212022
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Condensed Consolidated Balance Sheets as at December 31, |
| F-1 |
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| F-2 |
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| F-3 |
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| F-4 |
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Notes to Condensed Consolidated Financial Statements (Unaudited) |
| F-6 |
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Verde Resources, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In US$ except for number of shares)
|
| As at December 31, |
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| As at June 30, |
| ||
|
| 2021 |
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| 2021 |
| ||
ASSETS |
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Current Assets |
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Cash and cash equivalents |
| $ | 1,176,729 |
|
| $ | 2,117,622 |
|
Other receivables |
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| 0 |
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|
| 26,338 |
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Advanced to related party |
|
| 125,408 |
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|
| 6,691 |
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Other deposit & prepayment |
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| 117,200 |
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|
| 6,137 |
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Total Current Assets |
| $ | 1,419,337 |
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| $ | 2,156,788 |
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Long Term Assets |
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Property, plant and equipment |
| $ | 89,967 |
|
| $ | 555 |
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Right of use assets |
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| 44,292 |
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| 60,131 |
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Deposit paid for acquisition of subsidiaries |
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| 25,971,555 |
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| 25,971,680 |
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Deposit paid for acquisition of property, plant and equipment |
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| 6,040,000 |
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| 4,870,000 |
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Total Long Term Assets |
| $ | 32,145,814 |
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| $ | 30,902,366 |
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TOTAL ASSETS |
| $ | 33,565,151 |
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| $ | 33,059,154 |
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LIABILITIES AND STOCKHOLDERS’ DEFICIT |
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Current Liabilities |
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Accounts payable |
| $ | 1,921 |
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| $ | 2,655 |
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Advanced from related parties |
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| 590,353 |
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| 585,783 |
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Hire purchase creditor |
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| 10,440 |
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| 0 |
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Accrual and other payables |
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| 193,170 |
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| 164,849 |
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Total Current Liabilities |
| $ | 795,884 |
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| $ | 753,287 |
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Long term Liabilities |
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Hire purchase creditors |
| $ | 49,593 |
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| $ | 0 |
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Promissory notes |
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| 17,490,876 |
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| 16,535,942 |
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Total Long Term Liabilities |
| $ | 17,540,469 |
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| $ | 16,535,942 |
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TOTAL LIABILITIES |
| $ | 18,336,353 |
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| $ | 17,289,229 |
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STOCKHOLDERS’ DEFICIT |
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Preferred stock, par value $0.001, 50,000,000 shares authorized, none issued and outstanding |
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| 0 |
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| 0 |
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Common stock, par value $0.001, 10,000,000,000 shares authorized, 810,742,109 and 779,742,109 shares issued and outstanding as of December 31, 2021 & June 30, 2021 respectively |
| $ | 810,742 |
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| $ | 779,742 |
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Additional paid-in capital |
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| 21,789,289 |
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| 20,699,067 |
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Accumulated deficit |
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| (7,562,240 | ) |
|
| (5,913,255 | ) |
Accumulated other comprehensive income (loss) |
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| 649,241 |
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| 646,205 |
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Non-controlled interest |
|
| (458,234 | ) |
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| (441,834 | ) |
Total Stockholders’ Deficit |
| $ | 15,228,798 |
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| $ | 15,769,925 |
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TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT |
| $ | 33,565,151 |
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| $ | 33,059,154 |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
Verde Resources, Inc.
Condensed Consolidated Statements of Operationsand Comprehensive Income
(Unaudited)
(In US$ except for number of shares)
|
| Three Months Ended December 31, |
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| Six Months Ended December 31, |
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| 2021 |
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| 2020 |
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| 2021 |
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| 2020 |
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REVENUES |
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Revenue |
| $ | 0 |
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| $ | 0 |
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| $ | 0 |
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| $ | 0 |
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Cost of revenue |
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| 0 |
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| 0 |
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| 0 |
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| 0 |
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Gross profit |
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| 0 |
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| 0 |
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| 0 |
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| 0 |
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OPERATING EXPENSES: |
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Selling, general & administrative expenses |
|
| (359,105 | ) |
|
| (34,512 | ) |
|
| (723,101 | ) |
|
| (98,792 | ) |
LOSS FROM OPERATIONS |
| $ | (359,105 | ) |
| $ | (34,512 | ) |
| $ | (723,101 | ) |
| $ | (98,792 | ) |
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INTEREST EXPENSES |
| $ | (484,168 | ) |
| $ | 0 |
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| $ | (954,934 | ) |
| $ | 0 |
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OTHER INCOME(EXPENSES) |
|
| 25 |
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| 0 |
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| 12,115 |
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| 0 |
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NET LOSS BEFORE INCOME TAX |
| $ | (843,248 | ) |
| $ | (34,512 | ) |
| $ | (1,665,920 | ) |
| $ | (98,792 | ) |
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Provision of Income Tax |
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| 0 |
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| 0 |
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| 0 |
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| 0 |
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NET LOSS |
| $ | (843,248 | ) |
| $ | (34,512 | ) |
| $ | (1,665,920 | ) |
| $ | (98,792 | ) |
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Non-controlled interest |
|
| 12,556 |
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| 3,688 |
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| 16,935 |
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|
| 6,986 |
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Net loss contributed to the group |
|
| (830,692 | ) |
|
| (30,824 | ) |
|
| (1,648,985 | ) |
|
| (91,806 | ) |
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Other comprehensive income(loss) |
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Foreign currency translation income(loss) |
| $ | (5,423 | ) |
| $ | (87,360 | ) |
| $ | 3,571 |
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| $ | (166,760 | ) |
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Comprehensive income(loss) |
| $ | (836,115 | ) |
| $ | (118,184 | ) |
| $ | (1,645,414 | ) |
| $ | (258,566 | ) |
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Less: Other comprehensive (gain) loss attributable to non-controlling interest |
|
| 814 |
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|
| 13,104 |
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|
| (535 | ) |
|
| 25,014 |
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Other comprehensive income (loss) attributable to Verde Resources, Inc. |
| $ | (4,609 | ) |
| $ | (74,256 | ) |
| $ | 3,036 |
|
| $ | (141,746 | ) |
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Basic and Diluted Profit (Loss) per Common Share |
| $ | (0.00 | )* |
| $ | (0.00 | ) * |
| $ | (0.00 | )* |
| $ | (0.00 | )* |
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Weighted Average Number of Common Shares Outstanding |
|
| 810,742,109 |
|
|
| 116,038,909 |
|
|
| 810,742,109 |
|
|
| 116,038,909 |
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*Less than $0.01 per share
The accompanying notes are an integral part of these condensed consolidated financial statements.
Table of Contents |
Verde Resources, Inc.VERDE RESOURCES, INC.
Condensed Consolidated Statements of Cash FlowsUNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In Currency expressed in United States Dollars (“US$”), except for number of shares)
|
| December 31, 2021 |
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| December 31, 2020 |
| ||
Cash flows from operating activities: |
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Net profit (loss) |
| $ | (1,665,920 | ) |
| $ | (98,792 | ) |
Adjustments to reconcile loss to net cash used in operation |
|
|
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Amortization |
|
| 15,585 |
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|
| 6,165 |
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Depreciation |
|
| 5,220 |
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|
| 86 |
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Interest expenses |
|
| 954,934 |
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| 0 |
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Stock-based compensation |
|
| 191,222 |
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| 0 |
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Changes in operating assets and liabilities |
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(Increase) decrease in: |
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Other receivables |
|
| 26,169 |
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|
| 0 |
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Other deposits and prepayment |
|
| (111,102 | ) |
|
| 0 |
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Increase (decrease) in: |
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|
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Accounts payable |
|
| (723 | ) |
|
| (956 | ) |
Accrued liabilities and other payables |
|
| 28,433 |
|
|
| (7,783 | ) |
Advanced from sub-contractor & related parties |
|
| 12,623 |
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|
| 47,251 |
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Net cash used in operating activities |
|
| (543,559 | ) |
|
| (54,029 | ) |
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Cash flows from investing activities: |
|
|
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Advanced to related party |
|
| (118,848 | ) |
|
| 0 |
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Payments of deposit paid for property, plant and equipment |
|
| (240,000 | ) |
|
| 0 |
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Purchase of property, plant and equipment |
|
| (31,988 | ) |
|
| 0 |
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Net cash used in investing activities |
|
| (390,836 | ) |
|
| 0 |
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Cash flows from financing activities: |
|
|
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Repayments to hire purchase creditor |
|
| (2,610 | ) |
|
| 0 |
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Net cash used in financing activities |
|
| (2,610 | ) |
|
| 0 |
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Net increase (decrease) in cash and cash equivalent |
|
| (937,005 | ) |
|
| (54,029 | ) |
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Effect of exchange rate changes on cash |
|
| (3,888 | ) |
|
| 63,244 |
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Net increase (decrease) in cash and cash equivalents |
|
| (940,893 | ) |
|
| 9,215 |
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Cash and cash equivalents at beginning of year |
|
| 2,117,622 |
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|
| 24,027 |
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Cash and cash equivalents at end of year/ period |
| $ | 1,176,729 |
|
| $ | 33,242 |
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Supplementary cash flow information |
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Income taxes paid |
| $ | 0 |
|
| $ | 0 |
|
Interest paid |
| $ | 0 |
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| $ | 0 |
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Supplementary non-cash information |
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Deposit paid for acquisition of property, plant and equipment (note 7) |
|
| 930,000 |
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|
| 0 |
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Purchase of property, plant and equipment under finance lease |
|
| (62,643 | ) |
|
|
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Increase in finance lease liabilities |
|
| 60,033 |
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|
| 0 |
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|
| December 31, 2022 |
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| June 30, 2022 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
| $ | 363,560 |
|
| $ | 418,917 |
|
Accounts receivable |
|
| 16,565 |
|
|
| 21,028 |
|
Inventories |
|
| 104,462 |
|
|
| 87,035 |
|
Amount due from related party |
|
| 100 |
|
|
| - |
|
Prepayments |
|
| 595,869 |
|
|
| 722 |
|
Other receivables and deposits |
|
| 210,414 |
|
|
| 118,516 |
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|
|
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|
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Total current assets |
|
| 1,290,968 |
|
|
| 646,218 |
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Non-current assets: |
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Property, plant and equipment, net |
|
| 2,365,697 |
|
|
| 1,048,893 |
|
Right of use assets, net |
|
| 693,596 |
|
|
| 685,714 |
|
Mining rights |
|
| 12,328 |
|
|
| 27,088 |
|
Intangible asset |
|
| 30,192,771 |
|
|
| - |
|
Security deposit |
|
| 80,000 |
|
|
| 320,000 |
|
Deposit paid for acquisition of subsidiaries |
|
| - |
|
|
| 25,935,550 |
|
Deposit paid for acquisition of property, plant and equipment |
|
| 5,000,000 |
|
|
| 5,000,000 |
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|
|
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Total non-current assets |
|
| 38,344,392 |
|
|
| 33,017,245 |
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TOTAL ASSETS |
| $ | 39,635,360 |
|
| $ | 33,663,463 |
|
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LIABILTIES AND STOCKHOLDERS’ EQUITY |
|
|
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Current liabilities: |
|
|
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Accounts payable |
| $ | 48,483 |
|
| $ | 18,211 |
|
Accrued liabilities and other payables |
|
| 392,299 |
|
|
| 283,656 |
|
Finance lease liabilities |
|
| 169,496 |
|
|
| 75,224 |
|
Operating lease liability |
|
| 18,975 |
|
|
| - |
|
Bank loan |
|
| 50,000 |
|
|
| - |
|
Promissory notes |
|
| - |
|
|
| 18,484,028 |
|
Amount due to director |
|
| 22,737 |
|
|
| - |
|
Amounts due to related parties |
|
| 893,045 |
|
|
| 555,527 |
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
| 1,595,035 |
|
|
| 19,416,646 |
|
|
|
|
|
|
|
|
|
|
Non-current liabilities: |
|
|
|
|
|
|
|
|
Finance lease liabilities |
|
| 686,883 |
|
|
| 97,900 |
|
Operating lease liability |
|
| 40,335 |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
Total non-current liabilities |
|
| 727,218 |
|
|
| 97,900 |
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES |
|
| 2,322,253 |
|
|
| 19,514,546 |
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Preferred stock, $0.001 par value, 50,000,000 shares authorized, none issued and outstanding |
|
| - |
|
|
| - |
|
Common stock, $0.001 par value; 10,000,000,000 shares authorized; 1,173,576,654 and 819,188,055 issued and outstanding as of December 31, 2022 and June 30, 2022 |
|
| 1,173,576 |
|
|
| 819,188 |
|
Additional paid-in capital |
|
| 45,218,582 |
|
|
| 22,945,190 |
|
Accumulated other comprehensive income |
|
| 731,091 |
|
|
| 742,459 |
|
Accumulated deficit |
|
| (9,810,142 | ) |
|
| (10,357,920 | ) |
Stockholders’ equity |
|
| 37,313,107 |
|
|
| 14,148,917 |
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
| $ | 39,635,360 |
|
| $ | 33,663,463 |
|
TheSee accompanying notes are an integral part of theseto unaudited condensed consolidated financial statements.
F-1 |
Table of contents |
VERDE RESOURCES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
(Currency expressed in United States Dollars (“US$”), except for number of shares)
|
| Three Months ended December 31, |
|
| Six Months ended December 31, |
| ||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Revenue, net |
| $ | 81,140 |
|
| $ | - |
|
| $ | 107,452 |
|
| $ | - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue |
|
| (31,656 | ) |
|
| - |
|
|
| (79,595 | ) |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
| 49,484 |
|
|
| - |
|
|
| 27,857 |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative |
|
| (862,080 | ) |
|
| (359,105 | ) |
|
| (1,672,522 | ) |
|
| (723,101 | ) |
Total operating expenses |
|
| (862,080 | ) |
|
| (359,105 | ) |
|
| (1,672,522 | ) |
|
| (723,101 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS FROM OPERATION |
|
| (812,596 | ) |
|
| (359,105 | ) |
|
| (1,644,665 | ) |
|
| (723,101 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (expense) income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
| (1,349,548 | ) |
|
| (484,168 | ) |
|
| (1,879,660 | ) |
|
| (954,934 | ) |
Other income |
|
| 1,878 |
|
|
| 25 |
|
|
| 7,653 |
|
|
| 12,115 |
|
Total other expense, net |
|
| (1,347,670 | ) |
|
| (484,143 | ) |
|
| (1,872,007 | ) |
|
| (942,819 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS BEFORE INCOME TAXES |
|
| (2,160,266 | ) |
|
| (843,248 | ) |
|
| (3,516,672 | ) |
|
| (1,665,920 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS |
|
| (2,160,266 | ) |
|
| (843,248 | ) |
|
| (3,516,672 | ) |
|
| (1,665,920 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprising: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to noncontrolling interest |
|
| - |
|
|
| (12,556 | ) |
|
| - |
|
|
| (16,935 | ) |
Net loss attributable to Verde Resources Inc., shareholders |
|
| - |
|
|
| (830,692 | ) |
|
| - |
|
|
| (1,648,985 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | (2,160,266 | ) |
| $ | (843,248 | ) |
| $ | (3,516,672 | ) |
| $ | (1,665,920 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive (loss) income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
– Foreign currency adjustment (loss) income |
|
| (91,188 | ) |
|
| (5,423 | ) |
|
| (11,368 | ) |
|
| 3,571 |
|
Less: other comprehensive (loss) income attributable to non-controlling interest |
|
| - |
|
|
| (814 | ) |
|
| - |
|
|
| 535 |
|
Add: other comprehensive income attributable to Verde Resources Inc., shareholders |
|
| (91,188 | ) |
|
| (4,609 | ) |
|
| (11,368 | ) |
|
| 3,036 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMPREHENSIVE LOSS |
| $ | (2,251,454 | ) |
| $ | (848,671 | ) |
| $ | (3,528,040 | ) |
| $ | (1,662,349 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
– Basic |
| $ | 0.00 |
|
| $ | 0.00 |
|
| $ | 0.00 |
|
| $ | 0.00 |
|
– Diluted |
| $ | 0.00 |
|
| $ | 0.00 |
|
| $ | 0.00 |
|
| $ | 0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
– Basic |
|
| 867,178,851 |
|
|
| 810,742,109 |
|
|
| 867,178,851 |
|
|
| 810,742,109 |
|
– Diluted |
|
| 867,178,851 |
|
|
| 810,742,109 |
|
|
| 867,178,851 |
|
|
| 810,742,109 |
|
See accompanying notes to unaudited condensed consolidated financial statements.
F-2 |
Table of contents |
VERDE RESOURCES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Currency expressed in United States Dollars (“US$”))
|
| Six Months ended December 31, |
| |||||
|
| 2022 |
|
| 2021 |
| ||
|
|
|
|
|
|
| ||
Cash flows from operating activities: |
|
|
|
|
|
| ||
Net loss |
| $ | (3,516,672 | ) |
| $ | (1,665,920 | ) |
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net loss to net cash (used in) provided by operating activities |
|
|
|
|
|
|
|
|
Depreciation of property, plant and equipment |
|
| 79,907 |
|
|
| 5,220 |
|
Amortization |
|
| 65,822 |
|
|
| 15,585 |
|
Stock-based compensation |
|
| 307,457 |
|
|
| 191,222 |
|
Finance cost interest element of promissory notes (non-cash) |
|
| 1,870,972 |
|
|
| 954,934 |
|
Lease interest expense |
|
| 8,688 |
|
|
| - |
|
Gain on disposal of property, plant and equipment |
|
| (600 | ) |
|
| - |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
| 4,489 |
|
|
| - |
|
Other receivables, deposits and prepayments |
|
| (110,088 | ) |
|
| (84,933 | ) |
Inventories |
|
| (17,320 | ) |
|
| - |
|
Accounts payables |
|
| 30,250 |
|
|
| (723 | ) |
Accrued liabilities and other payables |
|
| 83,991 |
|
|
| 28,433 |
|
Advanced from director |
|
| 200 |
|
|
| - |
|
Advanced from related parties |
|
| 202,117 |
|
|
| 12,623 |
|
Net cash used in operating activities |
|
| (990,787 | ) |
|
| (543,559 | ) |
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
Proceeds from disposal of property, plant and equipment |
|
| 23,000 |
|
| - |
| |
Payments of deposit for property, plant and equipment |
|
| - |
|
|
| (240,000 | ) |
Advanced to related parties |
|
| - |
|
|
| (118,848 | ) |
Net cash flows on acquisition of subsidiary company |
|
| 1,140 |
|
| - |
| |
Purchase of property, plant and equipment |
|
| (469,466 | ) |
|
| (31,988 | ) |
Net cash used in investing activities |
|
| (445,326 | ) |
|
| (390,836 | ) |
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
Repayments to lease liabilities |
|
| (26,494 | ) |
|
| (2,610 | ) |
Drawdown of bank loan |
|
| 100,000 |
|
|
| - |
|
Repayment of bank loan |
|
| (50,000 | ) |
|
| - |
|
Lease interest paid |
|
| (8,688 | ) |
|
| - |
|
Proceeds from issuance of common stock |
|
| 1,376,280 |
|
|
| - |
|
Net cash provided by (used in) financing activities |
|
| 1,391,098 |
|
|
| (2,610 | ) |
|
|
|
|
|
|
|
|
|
Net change in cash and cash equivalent |
|
| (45,015 | ) |
|
| (937,005 | ) |
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustment |
|
| (10,342 | ) |
|
| (3,888 | ) |
|
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents |
|
| (55,357 | ) |
|
| (940,893 | ) |
|
|
|
|
|
|
|
|
|
BEGINNING OF PERIOD |
|
| 418,917 |
|
|
| 2,117,622 |
|
|
|
|
|
|
|
|
|
|
END OF PERIOD |
| $ | 363,560 |
|
| $ | 1,176,729 |
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |
|
|
|
|
|
|
|
|
Cash paid for income taxes |
| $ | - |
|
| $ | - |
|
Cash paid for interest |
| $ | - |
|
| $ | - |
|
See accompanying notes to unaudited condensed consolidated financial statements.
F-3 |
Table of |
Verde Resources, Inc.
Statement of Changes in Stockholders’ Equity (Deficit)VERDE RESOURCES, INC.
Six months ended DecemberUNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE SIXMONTHS ENDED DECEMBER 31, 2022 AND 2021 and 2020 (Unaudited)
(In Currency expressed in United States Dollars (“US$”), except for number of shares)
|
| Common Shares |
|
| Additional Paid-In |
|
| Accumulated |
|
| Accumulated Other Comprehensive Income |
|
| Non-Controlling |
|
|
| |||||||||||
|
| Shares |
|
| Amount |
|
| Capital |
|
| Deficit |
|
| (Loss) |
|
| Interest |
|
| Total |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Balance - Ju ne 30, 2020 |
|
| 116,038,909 |
|
| $ | 116,039 |
|
| $ | 2,427,243 |
|
| $ | (5,138,406 | ) |
| $ | 713,845 |
|
| $ | (411,739 | ) |
| $ | (2,293,018 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the period |
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| (91,806 | ) |
|
| 0 |
|
|
| (6,986 | ) |
|
| (98,792 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation gain |
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| (141,746 | ) |
|
| (25,014 | ) |
|
| (166,760 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance - December 31, 2020 |
|
| 116,038,909 |
|
| $ | 116,039 |
|
| $ | 2,427,243 |
|
| $ | (5,230,212 | ) |
| $ | 572,099 |
|
| $ | (443,739 | ) |
| $ | (2,558,570 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance - June 30, 2021 |
|
| 779,742,109 |
|
| $ | 779,742 |
|
| $ | 20,699,067 |
|
| $ | (5,913,255 | ) |
| $ | 646,205 |
|
| $ | (441,834 | ) |
| $ | 15,769,925 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for acquisition |
|
| 31,000,000 |
|
|
| 31,000 |
|
|
| 899,000 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 930,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
| - |
|
|
| 0 |
|
|
| 191,222 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 191,222 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the period |
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| (1,648,985 | ) |
|
| 0 |
|
|
| (16,935 | ) |
|
| (1,665,920 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation loss |
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 3,036 |
|
|
| 535 |
|
|
| 3,571 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance – December 31, 2021 |
|
| 810,742,109 |
|
| $ | 810,742 |
|
| $ | 21,789,289 |
|
| $ | (7,562,240 | ) |
| $ | 649,241 |
|
| $ | (458,234 | ) |
| $ | 15,228,798 |
|
|
| No. of shares |
|
| Common Shares Amount |
|
| Shares to be issued Amount |
|
| Additional paid-in capital |
|
| Accumulated other comprehensive income |
|
| Accumulated losses |
|
| Non- controlling interest |
|
| Total stockholders’ equity |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Balance as of July 1, 2022 |
|
| 819,188,055 |
|
| $ | 819,188 |
|
| $ | - |
|
| $ | 22,945,190 |
|
| $ | 742,459 |
|
| $ | (10,357,920 | ) |
| $ | - |
|
| $ | 14,148,917 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share issued to service provider |
|
| 1,500,000 |
|
|
| 1,500 |
|
|
| - |
|
|
| 231,000 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 232,500 |
|
Shares to be issued |
|
| 15,328,029 |
|
|
| - |
|
|
| 15,328 |
|
|
| 1,328,872 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 1,344,200 |
|
Net loss for the period |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (1,356,406 | ) |
|
| - |
|
|
| (1,356,406 | ) |
Foreign currency translation adjustment |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 79,820 |
|
|
| - |
|
|
| - |
|
|
| 79,820 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of September 30, 2022 |
|
| 836,016,084 |
|
| $ | 820,688 |
|
| $ | 15,328 |
|
| $ | 24,505,062 |
|
| $ | 822,279 |
|
| $ | (11,714,326 | ) |
| $ | - |
|
| $ | 14,449,031 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued to service provider |
|
| 3,815,000 |
|
|
| 3,815 |
|
|
| - |
|
|
| 639,185 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 643,000 |
|
Shares issued for previously committed private placement |
|
| - |
|
|
| 15,328 |
|
|
| (15,328 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Shares issued for private placement |
|
| 603,181 |
|
|
| 603 |
|
|
| - |
|
|
| 52,477 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 53,080 |
|
Shares issued for conversion of promissory note (“PN”) |
|
| 333,142,389 |
|
|
| 333,142 |
|
|
| - |
|
|
| 20,021,858 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 20,355,000 |
|
Net loss for the period |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
| (2,160,266 | ) |
|
| - |
|
|
| (2,160,266 | ) |
Foreign currency translation adjustment |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (91,188 | ) |
|
| - |
|
|
| - |
|
|
| (91,188 | ) |
Fair value adjustment on conversion of PN |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 4,064,450 |
|
|
| - |
|
|
| 4,064,450 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2022 |
|
| 1,173,576,654 |
|
| $ | 1,173,576 |
|
| $ | - |
|
| $ | 45,218,582 |
|
| $ | 731,091 |
|
| $ | (9,810,142 | ) |
| $ | - |
|
| $ | 37,313,107 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of July 1, 2021 |
|
| 779,742,109 |
|
| $ | 779,742 |
|
|
| - |
|
| $ | 20,699,067 |
|
| $ | 646,205 |
|
| $ | (5,913,255 | ) |
| $ | (441,834 | ) |
| $ | 15,769,925 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for acquisition |
|
| 31,000,000 |
|
|
| 31,000 |
|
|
| - |
|
|
| 899,000 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 930,000 |
|
Stock based compensation |
|
| - |
|
|
| - |
|
|
| - |
|
|
| 96,128 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 96,128 |
|
Net loss for the period |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (818,293 | ) |
|
| (4,379 | ) |
|
| (822,672 | ) |
Foreign currency translation adjustment |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 7,645 |
|
|
| - |
|
|
| 1,349 |
|
|
| 8,994 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of September 30, 2021 |
|
| 810,742,109 |
|
| $ | 810,742 |
|
| $ | - |
|
| $ | 21,694,195 |
|
| $ | 653,850 |
|
| $ | (6,731,548 | ) |
| $ | (444,864 | ) |
| $ | 15,982,375 |
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock based compensation |
|
| - |
|
|
| - |
|
|
| - |
|
|
| 95,094 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 95,094 |
|
Net loss for the period |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (830,692 | ) |
|
| (12,556 | ) |
|
| (843,248 | ) |
Foreign currency translation adjustment |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (4,609 | ) |
|
| - |
|
|
| (814 | ) |
|
| (5,423 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2021 |
|
| 810,742,109 |
|
| $ | 810,742 |
|
| $ | - |
|
| $ | 21,789,289 |
|
| $ | 649,241 |
|
| $ | (7,562,240 | ) |
| $ | (458,234 | ) |
| $ | 15,228,798 |
|
See accompanying notes to unaudited condensed consolidated financial statements.
F-4 |
Table of |
Verde Resources, Inc.VERDE RESOURCES, INC.
Statement of Changes in Stockholders’ Equity (Deficit)NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Three months ended DecemberFOR THE SIX MONTHS ENDED DECEMBER 31, 2022 AND 2021 and 2020
(Unaudited)
(In Currency expressed in United States Dollars (“US$”), except for number of shares)
|
| Common Shares |
|
| Additional Paid-In |
|
| Accumulated |
|
| Accumulated Other Comprehensive |
|
| Non-Controlling |
|
|
| |||||||||||
|
| Shares |
|
| Amount |
|
| Capital |
|
| Deficit |
|
| Income (Loss) |
|
| Interest |
|
| Total |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Balance - September 30, 2020 |
|
| 116,038,909 |
|
| $ | 116,039 |
|
| $ | 2,427,243 |
|
| $ | (5,199,388 | ) |
| $ | 646,355 |
|
| $ | (426,947 | ) |
| $ | (2,436,698 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the period |
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| (30,824 | ) |
|
| 0 |
|
|
| (3,688 | ) |
|
| (34,512 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation loss |
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| (74,256 | ) |
|
| (13,104 | ) |
|
| (87,360 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance - December 31, 2020 |
|
| 116,038,909 |
|
| $ | 116,039 |
|
| $ | 2,427,243 |
|
| $ | (5,230,212 | ) |
| $ | 572,099 |
|
| $ | (443,739 | ) |
| $ | (2,558,570 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance - September 30, 2021 |
|
| 810,742,109 |
|
| $ | 810,742 |
|
| $ | 21,694,195 |
|
| $ | (6,731,548 | ) |
| $ | 653,850 |
|
| $ | (444,864 | ) |
| $ | 15,982,375 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for share-based compensation |
|
| - |
|
|
| 0 |
|
|
| 95,094 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 95,094 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the period |
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| (830,692 | ) |
|
| 0 |
|
|
| (12,556 | ) |
|
| (843,248 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation loss |
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| (4,609 | ) |
|
| (814 | ) |
|
| (5,423 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance – December 31, 2021 |
|
| 810,742,109 |
|
| $ | 810,742 |
|
| $ | 21,789,289 |
|
| $ | (7,562,240 | ) |
| $ | 649,241 |
|
| $ | (458,234 | ) |
| $ | 15,228,798 |
|
|
Verde Resources, Inc.
Notes to Condensed Consolidated Financial Statements
For the three and six months ended December 31, 2020 and 2021
(Unaudited)
(In US$ except for number of shares)
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS BACKGROUND
Verde Resources, Inc. (the “We” or “Company” or “VRDR”) was incorporated on April 22, 2010, in the State of Nevada, U.S.A. The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America, and the Company’s fiscal year end is June 30.U.S.A..
Gold Billion Global Limited (“Gold Billion” or “GBL”) was incorporatedWe currently operate in British Virgin Islands on February 7, 2013. GBL was setup by the Boardtwo lines of Directors of Federal Mining Resources Limited (“FMR”). The major operation of GBL is to manage and monitor the mineralbusiness: (i) gold exploration and mining projects of FMR.
On July 1, 2013, FMR has assigned its rights and obligation onthrough Champmark Sdn Bhd (“CSB”) to GBL. Four of the five members of CSB Board of Directors were appointed by FMR, with two of the GBL Board of Directors currently sitting on the CSB Board. According to ASC 810-05-08 A, CSB is a deemed subsidiary of GBL where it has controlled the CSB Board of Directors, has assigned rights to receive future benefits and residual value, and obligation to absorb loss and finance for CSB by GBL. GBL has the power to direct the activities of CSB that most significantly impact CSB’s economic performance and the obligation to absorb losses of CSB that could potentially be significant to the CSB or the right to receive benefits from CSB that could potentially be significant to CSB. GBL is the primary beneficiary of CSB because it has been assigned with all relevant rights and obligation and can direct the activities of CSB through the common directors and the 85% shareholder, FMR. Under 810-23-42, 43, it is determined that CSB is de-facto agent of GBL and GBL is the de-facto principal of CSB. GBL started to consolidate CSB from July 1, 2013 and the Company consolidated GBL and CSB from October 25, 2013 onwards.
On February 17, 2014, the Company entered into a Supplementary Agreement to the Assignment Agreement and completed an acquisition of GBL pursuant to the Supplementary Agreement. The acquisition was a reverse acquisition in accordance with ASC 805-40 “Reverse Acquisitions”. The legal parent was VRDR which was the accounting acquiree while GBL was the accounting acquirer. There was a 15% non-controlling interest of Champmark SDN BHD (“CSB”) after the acquisition. This transaction was accounted for as a recapitalization effected by a share exchange, wherein GBL with its 85% deemed subsidiary CSB was considered the acquirer for accounting and financial reporting purposes. The assets and liabilities of the acquired entity have been brought forward at their book value and no goodwill has been recognized.
As a result of the acquisition, the Company holds 100% equity interest in GBL and 85% variable interest in CSB. Our consolidated subsidiaries include GBL being our wholly-owned subsidiary and 85% of CSB being a variable interest entity (VIE) and deemed subsidiary of GBL.
On March 17, 2014, the Company through GBL and its deemed subsidiary CSB entered into a Sub-Contract Agreement with Borneo Oil & Gas Corporation Sdn Bhd (“BOG”) for the engagement of its sub-contractor services to carry out exploration and exploitation works on alluvial and lode gold resources at Site IV-1 of the Merapoh Mine. The Sub-Contract Agreement is for a period of 5 years with a renewal for another 5 years subject to review by both parties. BOG is a wholly-owned subsidiary of Borneo Oil Berhad (BOB) which is listed on the main market of Kuala Lumpur Stock Exchange. BOG being a local company in Malaysia provides the Company with the advantage of local knowledge and well-established connection in dealing with the relevant local authorities in our mining operations.
On April 1, 2014, GBL purchased 85% equity interest of CSB, and CSB became indirect subsidiary of the Company.
Effective February 2, 2018, the Company’s Articles of Incorporation were amended to increase the authorized shares of the Company from 250,000,000 shares of common stock to 10,000,000,000 shares of common stock. A copy of the Certificate of Amendment was filed with the Nevada Secretary of State.
Effective February 20, 2021, Mr. Chen Ching was appointed Director of the Company and the entire Board of Directors now consists of Mr. Balakrishnan B S Muthu and Mr. Chen Ching. The SC 14F1 and Form 8-K announcing the change in officers and directors were filed with SEC on February 10, 2021 and February 22, 2021 respectively.
Effective March 31, 2021, Mr. Carl M. Craven was appointed Director of the Company and the entire Board of Directors now consists of Mr. Balakrishnan B S Muthu, Mr. Chen Ching and Mr. Carl M. Craven. The Form 8-K announcing the change in officers and directors were filed with SEC on April 1, 2021.
On May 10, 2021, the Company announced the Sale and Purchase Agreement to acquire the assets of biofraction plant and the right to use intellectual propertylicense in Sabah, Malaysia from Borneo Energy SdnBhd, in consideration of issuance of 166,666,667 share of the Company’s stock at $0.03 per share, valued at $5,000,000. 135,666,667 shares and 31,000,000 shares were issued on May 10, 2021 and July 1, 2021, respectively. The completion of the S&P Agreement is subject to all such acts necessary, including but not limited to due diligence exercise to ascertain the valuation of the assets of the biofraction plant and the right to use the licensed intellectual property in Sabah, Malaysia. The consideration shall be refundable if the transaction fails to complete. The Company also announced the Share Sale Agreement on May 12, 2021 for the acquisition of the entire issued and paid-up share capital of Bio Resources Limited from Taipan International Limited, an unrelated third party, The Wision Project Limited (formerly known as “Borneo Resources Limited”), an unrelated third party, and other individuals unrelated third parties, in consideration of issuance of 321,500,000 shares of the Company’s restricted common stock at $0.03per share, valued at $9,645,000, and the issuance of promissory notes with two-year term period with a principal amount of $20,355,000.
321,500,000 shares were issued on May 12, 2021 and the promissory notes were issued on May 12, 2021. The face value (principal) amount of $20,355,000 is repayable by May 12, 2023, and bearing zero coupon interest. The promissory note is priced at $16,290,550 considering the current market interest rate. This acquisition is currently in progress and the completion of the S&P Agreement is subject to all such acts necessary, including but not limited to auditing and due diligence exercise to ascertain the valuation of Bio Resources Limited. The consideration shall be refundable if the transaction fails to complete.
On June 9, 2021, the Company entered into a Settlement of Debt Agreement (the “Debt Settlement Agreement”) with the Company’s creditors Beijing Changxin Wanlin Technology Co., Ltd, Federal Mining Resources Ltd, Federal Capital Investment Limited and Yorkshire Capital Limited (collectively the “Creditors”) to convert a total of USD1,945,096 of the Company’s accounts payable to the Creditors into equity by increasing the share capital by means of a subscription for 64,836,533 new restricted shares of the Company’s common stock at a subscription price of $0.03 per share. As set out in the Debt Settlement Agreements, the new restricted shares for settlement of the account payable to Beijing Changxin Wanlin Technology Co., Ltd, Federal Mining Resources Ltd and Federal Capital Investment Limited issued to their nominee Internet.com Ltd on June 9, 2021.
On June 11, 2021, GBL entered into a Sale and Purchase of Assets Agreement (the “SPA Agreement”) to purchase a factory site from a Malaysia company Segama Ventures SdnBhd (“Segaman Ventures”), an unrelated third party, in order to expand the Company’s biofraction plant in Malaysia. Under the terms of the SPA Agreement, the acquisition is satisfied by cash payment of $1,600,000 in two instalments of $800,000 each, one payment upon signing the SPA Agreement, and the second payment within three (3) months from the date of the SPA Agreement. A deposit of $800,000 was paid to Segaman Ventures on June 10, 2021. This acquisition is currently in progress and the completion of the S&P Agreement is subject to all such acts necessary, including but not limited to due diligence exercise to ascertain the valuation of factory site. The consideration shall be refundable if the transaction fails to complete.
On June 17, 2021, the Company through its prospective indirect subsidiary Bio Resources Limited (“BRL”)Sdn. Bhd., a company incorporated under the laws of the Labuan, entered into a Shares Sale Agreement with HermalisBintiMohmad TahirMalaysian corporation (“Hermalis”CSB”), a company incorporated under the laws of the Malaysia, to acquire the entire issued; and paid-up share capital of Global Renewables. Under the terms of the Shares Sale Agreement, the consideration for the acquisition shall be satisfied in full by the payment of Malaysia Ringgit MYR 25,000 upon the execution of the Shares Sale Agreement. The acquisition of Global Renewables was subject to the successful completion of the acquisition of the entire issued(ii) production and paid-up share capital of BRL. Therefore, the acquisition of Global Renewables will dependent upon the successful acquisition of BRL.
On June 18, 2021, GBL entered into a Shares Sale Agreement with Lamax Gold Limited (“LGL”), a company incorporated under the laws of the British Virgin Islands, in relation to acquisition of the remaining 15% of the issued and paid-up share capital of CSB. Prior to this acquisition, GBL owned 85% equity in CSB. Upon completion of the acquisition, GBL would own the entire issued and paid-up share capital of CSB. Under the terms of the Shares Sale Agreement, the consideration for the acquisition shall be satisfied in full by the payment of Malaysia Ringgit MYR 150,000 ($36,130) upon the execution of the Shares Sale Agreement. This acquisition is currently in progress and the completion of the S&P Agreement is subject to all such acts necessary, including but not limited to auditing and due diligence exercise to ascertain the valuation of 15% of the issued and paid-up share capital of CSB. A deposit of MYR 150,000 ($36,130) was paid to LGL on June 21, 2021. The consideration shall be refundable if the transaction fails to complete.
Verde Renewables, Inc. (“VRI”) was incorporated on August 10, 2021, in the State of Missouri, U.S.A. The major operation of VRI will include management of a processing and packaging facility to process organic bio-waste into sourcesdistribution of renewable commodities using its biofraction technology, and distribution of biochar, wood vinegar and bio-gas. VRI is wholly owned by the Company.
through Verde Estates LLC (“VEL”) was incorporated on August 10, 2021, in the State of Missouri, U.S.A. VEL is formed for the purpose of holding property in Missouri. VEL is wholly owned by VRI.
Verde Life Inc. (“VLI”) was incorporated on November 15, 2021, in the State of Oregon, U.S.A. The major operation of VLI will include conducting businessResources (Malaysia) Sdn. Bhd., a Malaysian corporation. We intend to develop operations in the distribution of THC-free cannabinoid (CBD) products. VLI is wholly owned byproducts through Verde Life Inc., an Oregon corporation. We are also considering investment opportunities in other non-mining areas including the Company.bioenergy industry, real properties and the food & beverage sector.
On January 17, 2022,The Company currently is engaged in the Company formed a wholly owned subsidiary, Verde Resources (Malaysia) Sdn Bhd, a company incorporated under the lawssale of the Malaysia, for the purposegold mineral, distribution of conducting consultation servicesTHC-free cannabinoid (CBD) products, production and distribution of renewable agricultural commodities.commodities and real property holding.
On January 20,As of December 31, 2022, the Company has reached a mutual agreement to enter into a Supplement to Promissory Note with each of the 17 lenders (“Lenders”) of the promissory notes that were issued on May 12, 2021, to convert the total principal loan amount of $20,355,000 into shares of the Company’s restricted common stock priced at $0.0611 per share, which represents the last ninety (90) days’ volume weighted average price (VWAP) as of the market closing of January 19, 2022. The Company and the Lenders further agreed that the actual date for the allotment and issue of new shares of the Company’s restricted common stock shall be confirmed in a subsequent written agreement.
NOTE 2 following subsidiaries:- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Condensed Consolidated Financial Statements
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. The results of operations for the periods ended December 31, 2021 are not necessarily indicative of the operating results for the full years.
Basis of Presentation
The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (GAAP). These condensed consolidated financial statements are expressed in United States dollars ($). Financial statements prepared in accordance with GAAP contemplate the realization of assets and the satisfaction of liabilities in the normal course of business. These condensed consolidated audited financial statements include all adjustments that, in the opinion of management, are necessary in order to make the financial statements not misleading.
Basis of Consolidation
The condensed consolidated financial statements include the financial statements of Verde Resources, Inc., its wholly owned subsidiary Gold Billion Global Limited (“GBL”) and the 85% of the deemed subsidiary variable interest of Champmark SDN BHD (“CSB”). All inter-company balances and transactions between the Company and its subsidiary and variable interest entity (VIE) have been eliminated upon consolidation.
The Company has adopted ASC Topic 810-10-5-8, “Variable Interest Entities”, which requires a variable interest entity or VIE to be consolidated by a company if that company is subject to a majority of the risk of loss for the VIE or is entitled to receive a majority of the VIE’s residual returns.
Variable Interest Entity
On July 1, 2013, the Company’s subsidiary, GBL entered into a series of agreements (“VIE agreements”) with FMR and details of the VIE agreements are as follows :
Company name |
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Place of | Principal activities and place of operation | Effective interest held | ||
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Verde Resources Asia Pacific Limited (“VRAP”) (fka Gold Billion Global Limited) |
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Verde Resources (Malaysia) Sdn Bhd (“VRSB”) | Malaysia | Provision of consultation service and distribution of renewable agricultural commodities | 100% | |||
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Verde Renewables, Inc. (“VRI”) | State of | Management of | 100% | |||
Verde Life Inc. (“VLI”) | State of Oregon, U.S.A. | Distribution of THC-free cannabinoid (CBD) products | 100% | |||
Champmark Sdn Bhd (“Champmark”) | Malaysia | Mining of minerals | 100% | |||
The Wision Project Sdn Bhd (“Wision”) | Malaysia | Digital innovation, marketing & consulting service, PR, branding, influencer marketing, event management and media relations services | 100% | |||
Verde Estates LLC (“VEL”) | State of Missouri, U.S.A. | Holding real property | 100% | |||
Bio Resources Limited (“BRL”) | Labuan, Malaysia | Provision of proprietary pyrolysis technology and investment holding | 100%* |
With the above agreements, GBL demonstrates* The acquisition of BRL was completed on October 12, 2022.
The Company and its abilitysubsidiaries are hereinafter referred to control CSB as the primary beneficiary and the operating results of the VIE was included in the(the “Company”).
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited condensed consolidated financial statements.
On April 1, 2014,statements reflect the Boardapplication of Director of GBL notified FMR uponcertain significant accounting policies as described in this note and elsewhere in the decision to exercise the right of option to purchase 85% equity interest of CSB under Management Agreement Section 3.2.4 dated July 1, 2013 between GBLaccompanying unaudited condensed consolidated financial statements and FMR. This acquisition was completed on April 1, 2014 with consideration of US$1. GBL then became 85% shareholder of CSB and is required to consolidate CSB as a subsidiary.
On June 18, 2021, GBL entered into a Shares Sale Agreement to acquire the remaining 15% of the issued and paid-up share capital of CSB. GBL would own the entire issued and paid-up share capital of CSB upon completion of the acquisition.notes.
· | Basis of Presentation |
The accompanying unaudited condensed consolidated financial statements have been prepared by management in accordance with both accounting principles generally accepted in the United States (“GAAP”), and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Certain information and note disclosures normally included in audited financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.
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UseIn the opinion of Estimatesmanagement, the condensed consolidated balance sheet as of June 30, 2022 which has been derived from audited financial statements and these unaudited condensed consolidated financial statements reflect all normal and recurring adjustments considered necessary to state fairly the results for the periods presented. The results for the period ended December 31, 2022 are not necessarily indicative of the results to be expected for the entire fiscal year ending June 30, 2023 or for any future period.
These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Management’s Discussion and the audited financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended June 30, 2022, filed with the SEC on November 4, 2022.
· | Use of Estimates and Assumptions |
The preparation of unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s periodic filings with the Securities and Exchange Commission include, where applicable, disclosures of estimates, assumptions, uncertainties and markets that could affect the financial statements and future operations of the Company.
The COVID-19 pandemic has created and may continue to create significant uncertainty in macroeconomic conditions, which may cause further business slowdowns or shutdowns, depress demand for the Company’s business, and adversely impact its results of operations. The Company expects uncertainties around its key accounting estimates to continue to evolve depending on the duration and degree of impact associated with the COVID-19 pandemic. Its estimates may change as new events occur and additional information emerges, and such changes are recognized or disclosed in its consolidated financial statements.
Identified below are the accounting policies that reflect the Company’s most significant estimates and judgments, and those that the Company believes are the most critical to fully understanding and evaluating itsIn preparing these unaudited condensed consolidated financial statements.statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenues and expenses during the periods reported. Actual results may differ from these estimates.
· | Basis of Consolidation |
Cash
The unaudited condensed consolidated financial statements include the financial statements of Verde Resources, Inc. and Cash Equivalentsits 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 |
Cash
Accounting Standard Codification (“ASC”) Topic 280, Segment Reporting establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about geographical areas, business segments and cash equivalents include cashmajor customers in banks, money market funds, and certificates of term deposits with maturities of less than three months, which are readily convertible to known amounts of cash and which,consolidated financial statements. Currently, the Company operates in the opinion of management, are subject to an insignificant risk of loss in value. The Company had $1,176,729 and $2,117,622 in cash and cash equivalents at December 31, 2021 and June 30, 2021, respectively.four reportable operating segments.
Concentrations of Credit Risk
· | Concentrations of Credit Risk |
The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents and related party payables it will likely incur in the near future. The Company places its cash and cash equivalents with financial institutions of high credit worthiness. At times, its cash and cash equivalents with a particular financial institution may exceed any applicable government insurance limits. The Company’s management plans to assess the financial strength and credit worthiness of any parties to which it extends funds, and as such, it believes that any associated credit risk exposures are limited.
Risks and Uncertainties
· | Risks and Uncertainties |
The Company operates in the resource exploration industry that is subject to significant risks and uncertainties, including financial, operational, technological, and other risks associated with operating a resource exploration business, including the potential risk of business failure.
· | Cash and Cash Equivalents |
Property, plant
Cash and equipmentcash equivalents are carried at cost and represent cash in banks, money market funds, and certificates of term deposits with maturities of less than three months, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value. The Company had $363,560 and $418,917 in cash and cash equivalents at December 31, 2022 and June 30, 2022.
Property, plantAt December 31, 2022 and equipment are stated at cost. The straight-line depreciation method is used to compute depreciation over the estimated useful livesJune 30, 2022, cash and cash equivalents consisted of the assets with a 5% estimated residual values, as follows:bank deposits and petty cash on hands.
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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 consolidated statements of income and other comprehensive income in other income or expenses.
Accounts Receivable
Accounts receivable are recognized and carried at net realizable value. 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 consolidated statement of operations within operating expenses. At December 31, 20212022 and June 30, 2021,2022, the Company has no allowance for doubtful accounts, as per management’s judgment based on their best knowledge. As of December 31, 20212022 and June 30, 2021,2022, the longest credit term for certain customers are 60 days.
Provision for Doubtful Accounts
The Company maintains an allowance for doubtful accounts to reserve for potentially uncollectible receivables and reviews accounts receivable by amounts due by customers which are past due to identify specific customers with known disputes or collectability issues. In determining the amount of the reserve, the Company makes judgments about the creditworthiness of customers based on past collection experience and ongoing credit risk evaluations. As of December 31, 2021 and June 30, 2021 there was no allowance for doubtful accounts.
Fair Value
ASC Topic 820”Fair Value Measurement and Disclosures” establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market.
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· | Inventories |
These tiers include:
Inventories are stated at the lower of cost or market value (net realizable value), cost being determined on a first-in-first-out method. Costs include material, labor and overhead costs. The Company provides inventory allowances based on excess and obsolete inventories determined principally by customer demand.
As of December 31, 2022 and June 30, 2022, the Company did not record an allowance for obsolete inventories, nor have there been any write-offs.
· | Property, Plant and Equipment |
Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which they become fully operational and after taking into account their estimated residual values:
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Office equipment | 3 years | ||
Project equipment | 5 years | ||
Computer | 5 years | ||
Motor vehicle | 5 years | ||
Furniture & fittings | 5 years |
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 Company’s financial instruments consistcost and related accumulated depreciation of cashassets retired or sold are removed from the respective accounts, and cash equivalents, trade receivables,any gain or loss is recognized in the unaudited condensed consolidated statements of income and other receivables, payables, and short term and long term debt. The carrying values of cash and cash equivalents, trade receivables,comprehensive income in other receivables, and payables approximate theirincome or expenses.
· | Intangible assets |
Intangible assets acquired from third parties are measured initially at fair value, duewith finite lives of 10 years, which are reviewed for indicators of impairment at least annually. These intangible assets are to their short maturities. Thebe amortized over these estimated useful lives on a straight-line basis, upon the success of its commercial operation.
· | Impairment of Long-lived Assets |
In accordance with the provisions of ASC Topic 360, Impairment or Disposal of Long-Lived Assets, all long-lived assets such as property and equipment and intangible assets owned and held by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying valueamount of long term debt approximatesan 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 debtthe assets.
· | 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 similar termsrevenue and remaining maturities availablecash flows arising from the entity’s contracts to the company.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 fulfills its obligations under each of its agreements:
· | identify the contract with a customer; |
· | identify the performance obligations in the contract; |
· | determine the transaction price; |
· | allocate the transaction price to performance obligations in the contract; and |
· | recognize revenue as the performance obligation is satisfied. |
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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 non-financial assetscontracts have a single performance obligation, as the promise to transfer products or services is not separately identifiable from other promises in the contract and, therefore, not distinct.
Product sales
Revenues from product sales are measuredrecognized when the customer obtains control of the Company’s product, which occurs at a point in time, typically upon delivery to the customer. The Company expenses incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that it would have recognized is one year or less or the amount is immaterial.
Revenues from product sales are recorded net of reserves established for applicable discounts and allowances that are offered within contracts with the Company’s customers.
Product revenue reserves, which are classified as a reduction in product revenues, are generally characterized in the following categories: discounts, returns and rebates. These reserves are based on a recurring basis. These non-financial assets are measured for impairment annuallyestimates of the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable as the amount is payable to the Company’s measurement datecustomer.
Gold mining
Revenue from the sales of gold mineral or other minerals to registered gold trading companies or other customers in Malaysia is recognized as revenue in accordance with the following core principles: at the reporting unit level using Level 3 inputs. For most assets, ASC 820 requires thattime of gold or minerals sales, the impactcontract with customers and the performance obligations are identified. The transaction and selling price is determined by the prevailing market value of changes resulting from its applicationgold bullion quoted by the leading registered gold trading company in Malaysia or at an agreed price. Sales invoice will be applied prospectively inprepared to reflect the year in whichproper transaction price based on the statementperformance obligation allocation. After delivery is initially applied.completed and the performance obligation is satisfied, sales invoice will be presented to the customers and so revenue is then recognized accordingly.
The Company’s non-financial assets measured on a non-recurring basis include the Company’s property, plant and equipment and finite-use intangible assets which are measured for recoverability when indicators for impairment are present. ASC 820 requires companies to disclose assets and liabilities measured on a non-recurring basis in the period in which the re-measurement at fair value is performed.
Leases
· | 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. As the rate implicit in the lease is not readily determinable for the operating lease, the Company generally uses an incremental borrowing rate based on information available at the commencement date to determine the present value of future lease payments. Operating lease right-of-use (“ROU assets”) assets represent the Company’s right to control the use of an identified asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets are generally recognized based on the amount of the initial measurement of the lease liability. Lease expense is recognized on a straight-line basis over the lease term.
ROU assets are reviewed for impairment when indicators of impairment are present. ROU assets from operating and finance leases are subject to the impairment guidance in ASC Topic 360, Property, Plant, and Equipment, as ROU assets are long-lived nonfinancial assets.
ROU assets are tested for impairment individually or as part of an asset group if the cash flows related to the ROU asset are not independent from the cash flows of other assets and liabilities. An asset group is the unit of accounting for long-lived assets to be held and used, which represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities.
The Company recognized no impairment of ROU assets as of December 31, 20212022 and June 30, 2021.2022.
The operating lease is included in operating lease right-of-use assets operating lease liabilities-current and operating lease liabilities-non-currentliabilities as current and non-current liabilities in the
unaudited condensed consolidated balance sheets at December 31, 20212022 and June 30, 2021.2022.
Leases that transfer substantially all the rewards and risks of ownership to the lessee, other than legal title, are accounted for as finance leases. Substantially all of the risks or benefits of ownership are deemed to have been transferred if any one of the four criteria is met: (i) transfer of ownership to the lessee at the end of the lease term, (ii) the lease containing a bargain purchase option, (iii) the lease term exceeding 75% of the estimated economic life of the leased asset, (iv) the present value of the minimum lease payments exceeding 90% of the fair value. At the inception of a finance lease, we as the lessee records an asset and an obligation at an amount equal to the present value of the minimum lease payments. The leased asset is amortized over the shorter of the lease term or its estimated useful life if title does not transfer to us, while the leased asset is depreciated in accordance with our depreciation policy if the title is to eventually transfer to us. The periodic rent payments made during the lease term are allocated between a reduction in the obligation and interest element using the effective interest method in accordance with the provisions of ASC Topic 842.
· | Income Taxes |
Foreign Currency Translation
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.
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The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its balance sheets and provides valuation allowances as management deems necessary.
Uncertain Tax Positions
The Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the ASC Topic 740 provisions of Section 740-10-25 for the three and six months ended December 31, 2022 and 2021.
· | Foreign Currencies Translation |
The Company’s reporting currency is the United States dollar (“$US$”) and the accompanying unaudited condensed consolidated financial statements have been expressed in United States dollars. TheIn addition, some of the Company’s functionalsubsidiaries operating in Malaysia maintain their books and records in the local currency, is the Malaysian Ringgit (“MYR”) which is atheir functional currency, as being the primary currency of the economic environment in which their operations are conducted.
In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830830-30, “”Translation of Financial Statements”Statement”, capital accounts ofusing the consolidated financial statements areexchange rate on the balance sheet date. Shareholders’ equity is translated into United States dollars from MYR at theirusing the historical exchange rates when the capital transactions occurred. Assetsrates. Revenues and liabilitiesexpenses are translated at the exchangeaverage rates as of balance sheet date. Income and expenditures are translated atprevailing during the average exchange rate of the respective year. The gains and losses resulting exchange differencesfrom translation of financial statements of foreign subsidiary are recorded as a separate component of accumulated other comprehensive income within the statements of changes in the consolidated statement of operations.stockholder’s equity.
Translation of amounts from RMMYR into U.S. dollars has been made at the following exchange rates:rates for the following periods:-
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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.
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Stock-Based CompensationThe Company calculates net loss per share in accordance with ASC Topic 260, Earnings per Share. Basic income per share is computed by dividing the net income by the weighted-average number of common shares outstanding during the period. Diluted income per share is computed similar to basic income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.
· | Stock Based Compensation |
The Company accounts for stock-based compensation in accordance with ASC Topic 718-10, “Compensation-Stock Compensation”Compensation-Stock Compensation, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors including employee stock options, restricted stock units, and stock appreciation rights are based on estimated fair values. Stock-based compensation expense recognized during the period is based on the value of the portion of share-based payment awards that is ultimately expected to vest during the period.
The Company accounts for non-employee stock-based awards at fair value in accordance with the measurement and recognition criteria of ASC Topic 505-50, “Equity-Based“Equity-Based Payments to Non-Employees.Non-Employees”.
Comprehensive Income
Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income are required to be reported in a financial statement that is presented with the same prominence as other financial statements. Comprehensive income includes net income and the foreign currency translation changes.
Related Party
Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or significant influence, such as a family member or relative, shareholder, or a related corporation.
Non-controlling Interest
The Company’s non-controlling interest represents the minority shareholder’s ownership interest related to the Company’s subsidiary, CSB. The Company reports its non-controlling interest in subsidiaries as a separate component of equity in the Consolidated Balance Sheets and reports both net loss attributable to the non-controlling interest and net loss attributable to the Company’s common shareholders on the face of the Consolidated Statements of Operations. The Company’s equity interest in CSB is 85.0% and the non-controlling stockholder’s interest is 15%. This is reflected in the Consolidated Statements of Equity.
Mineral Acquisition and Exploration Costs
The Company has been primarily engaged in the acquisition, exploration, and development of mining properties. The Company was no longer considered an exploration stage company after the reverse take-over with its subsidiary GBL.
· | Mineral Acquisition and Exploration Costs |
Mineral property acquisition and exploration costs are expensed as incurred. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs incurred to develop such property are capitalized. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserves.
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Environmental Expenditures
· | Environmental Expenditures |
The operations of the Company have been,and may in the future be affected from time to time in varying degree by changes in environmental regulations, including those for future reclamation and site restoration costs. Both the likelihood of new regulations and their overall effect upon the Company vary greatly and are not predictable. The Company’s policy is to meet or, if possible, surpass standards set by relevant legislation by application of technically proven and economically feasible measures.
Environmental expenditures that relate to ongoing environmental and reclamation programs are charged against earnings as incurred or capitalized and amortized depending on their future economic benefits. All of these types of expenditures incurred since inception have been charged against earnings due to the uncertainty of their future recoverability. Estimated future reclamation and site restoration costs, when the ultimate liability is reasonably determinable, are charged against earnings over the estimated remaining life of the related business operation, net of expected recoveries.
· | 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.
· | Commitments and Contingencies |
The Company follows the ASC 450-20, Commitments to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.
If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s 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:
Level 1 | Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. |
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. |
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, accounts receivable, prepayments and other receivables, accounts payable, accrued liabilities and other payables, loans payable, and amounts due to related parties approximate their fair values because of the short maturity of these instruments.
· | Recent Accounting Pronouncements |
During the period ended December 31, 2022, 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.
NOTE 3 - GOING CONCERN UNCERTAINTIES
The accompanying unaudited condensed consolidated financial statements have been prepared using the going concern basis of accounting, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.
The Company has generated recurring losses and suffered from an accumulated deficit of $9,810,142 at December 31, 2022. The continuation of the Company as a going concern in the next twelve months is dependent upon the Company pursuing additional financing for its operations. However, there is no assurance that the Company will be successful in securing sufficient funds to sustain the operations.
The ability of the Company to survive is dependent upon, among other things, obtaining additional financing to continue operations, and development of its business plan. In response to these problems, management intends to raise additional funds through public or private placement offerings, and related party loans.
No assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stockholders, in the case of equity financing.
These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. These unaudited condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets and liabilities that may result in the Company not being able to continue as a going concern.
NOTE 4 – BUSINESS SEGMENT INFORMATION
Currently, the Company has five reportable business segments:
(i) | Gold mineral mining; |
(ii) | Distribution of THC-free cannabinoid (CBD) products; |
(iii) | Production and distribution of renewable commodities; |
(iv) | Holding of real property; and |
(v) | Licensor of proprietary pyrolysis technology |
F-11 |
Table of |
Revenue RecognitionIn the following table, revenue is disaggregated by primary major product line, and timing of revenue recognition. The table also includes a reconciliation of the disaggregated revenue with the reportable segments for the three and six months ended December 31, 2022 and 2021:
The Company recognizes revenues when its customers obtain control of promised goods or services, in an amount that reflects the consideration which it expects to receive in exchange for those goods. The Company recognizes revenues following the five-step model prescribed under ASU No. 2014-09: (i) identifies contract(s) with a customer; (ii) identifies the performance obligations in the contract; (iii) determines the transaction price; (iv) allocates the transaction price to the performance obligations in the contract; and (v) recognizes revenues when (or as) it satisfies the performance obligation.
|
| Three Months ended December 31, 2022 |
| |||||||||||||||||||||||||
|
| Gold mineral mining |
|
| Distribution of THC-free cannabinoid (CBD) products |
|
| Production and distribution of renewable commodities |
|
| Holding property |
|
| Licensor of proprietary pyrolysis technology |
|
| Corporate unallocated |
|
| Consolidated |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Revenue |
| $ | - |
|
| $ | - |
|
| $ | 55,921 |
|
| $ | 21,171 |
|
| $ | - |
|
| $ | 4,048 |
|
| $ | 81,140 |
|
Cost of revenue |
|
| - |
|
|
| - |
|
|
| (31,202 | ) |
|
| - |
|
|
| - |
|
|
| (454 | ) |
|
| (31,656 | ) |
Gross profit |
|
| - |
|
|
| - |
|
|
| 24,719 |
|
|
| 21,171 |
|
|
| - |
|
|
| 3,594 |
|
|
| 49,484 |
|
Selling, general & administrative expenses |
|
| (60,396 | ) |
|
| (2,550 | ) |
|
| (503,630 | ) |
|
| (63,797 | ) |
|
| (653 | ) |
|
| (231,054 | ) |
|
| (862,080 | ) |
Loss from operations |
|
| (60,396 | ) |
|
| (2,550 | ) |
|
| (478,911 | ) |
|
| (42,626 | ) |
|
| (653 | ) |
|
| (227,460 | ) |
|
| (812,596 | ) |
Interest expenses |
|
| - |
|
|
| - |
|
|
| (4,803 | ) |
|
| - |
|
|
| - |
|
|
| (1,344,745 | ) |
|
| (1,349,548 | ) |
Other income |
|
| 281 |
|
|
| - |
|
|
| 636 |
|
|
| - |
|
|
| - |
|
|
| 961 |
|
|
| 1,878 |
|
Loss before income tax |
|
| (60,115 | ) |
|
| (2,550 | ) |
|
| (483,078 | ) |
|
| (42,626 | ) |
|
| (653 | ) |
|
| (1,571,244 | ) |
|
| (2,160,266 | ) |
Income tax |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Net loss |
| $ | (60,115 | ) |
| $ | (2,550 | ) |
| $ | (483,078 | ) |
| $ | (42,626 | ) |
| $ | (653 | ) |
| $ | (1,571,244 | ) |
| $ | (2,160,266 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets at December 31, 2022 |
| $ | 29,169 |
|
| $ | 315,929 |
|
| $ | 1,685,244 |
|
| $ | 1,253,068 |
|
| $ | 30,202,975 |
|
| $ | 6,148,975 |
|
| $ | 39,635,360 |
|
Revenues are recognized when control of the promised goods or services is transferred to the customers, which may occur at a point in time or over time depending on the terms and conditions of the agreement, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.
Gold mining
The Company derives revenues primarily from the sales of gold mineral or other minerals to registered gold trading companies or other customers in Malaysia. The Company generally recognizes its revenues in accordance with the following core principles: at the time of gold or minerals sales, the contract with customers and the performance obligations are identified. The transaction and selling price is determined by the prevailing market value of gold bullion quoted by the leading registered gold trading company in Malaysia or at an agreed price. Sales invoice will be prepared to reflect the proper transaction price based on the performance obligation allocation. After delivery is completed and the performance obligation is satisfied, sales invoice will be presented to the customers and so revenue is then recognized accordingly.
Product sales
Revenues from product sales are recognized when the customer obtains control of the Company’s product, which occurs at a point in time, typically upon delivery to the customer. The Company expenses incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that it would have recognized is one year or less or the amount is immaterial.
Revenues from product sales are recorded net of reserves established for applicable discounts and allowances that are offered within contracts with the Company’s customers.
Product revenue reserves, which are classified as a reduction in product revenues, are generally characterized in the following categories: discounts, returns and rebates. These reserves are based on estimates of the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable as the amount is payable to the Company’s customer.
Income Taxes
The provision for income taxes is determined in accordance with the provisions of ASC Topic 740,”Accounting for Income Taxes”(“ASC 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. As of December 31, 2021 and June 30, 2021, the Company did not have any significant unrecognized uncertain tax positions.
Recent Accounting Pronouncements
Recently Adopted Accounting Standards
In December 2019, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions and enhances and simplifies various aspects of the income tax accounting guidance in ASC 740. ASU 2019-12 was effective July 1, 2021. The adoption of ASU 2019-12 did not have any impact on the Company’s consolidated financial statement presentation or disclosures.
In August 2020, the FASB issued ASU 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for convertible debt by eliminating the beneficial conversion and cash conversion accounting models. Upon adoption of ASU 2020-06, convertible debt proceeds, unless issued with a substantial premium or an embedded conversion feature that is not clearly and closely related to the host contract, will no longer be allocated between debt and equity components. This modification will reduce the issue discount and result in less non-cash interest expense in financial statements. ASU 2020-06 also updates the earnings per share calculation and requires entities to assume share settlement when the convertible debt can be settled in cash or shares. For contracts in an entity’s own equity, the type of contracts primarily affected by ASU 2020-06 are freestanding and embedded features that are accounted for as derivatives under the current guidance due to a failure to meet the settlement assessment by removing the requirements to (i) consider whether the contract would be settled in registered shares, (ii) consider whether collateral is required to be posted, and (iii) assess shareholder rights. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, and only if adopted as of the beginning of such fiscal year. The Company adopted ASU 2020-06 effective July 1, 2021. The adoption of ASU 2020-06 did not have any impact on the Company’s consolidated financial statement presentation or disclosures.
|
| Three Months ended December 31, 2021 |
| |||||||||||||||||||||
|
| Gold mineral mining |
|
| Distribution of THC-free cannabinoid (CBD) products |
|
| Production and distribution of renewable commodities |
|
| Holding property |
|
| Corporate unallocated |
|
| Consolidated |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Revenue |
| $ | - |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
Cost of revenue |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Gross profit |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Selling, general & administrative expenses |
|
| (66,093 | ) |
|
| (1,755 | ) |
|
| (17,640 | ) |
|
| (92,254 | ) |
|
| (181,363 | ) |
|
| (359,105 | ) |
Loss from operations |
|
| (66,093 | ) |
|
| (1,755 | ) |
|
| (17,640 | ) |
|
| (92,254 | ) |
|
| (181,363 | ) |
|
| (359,105 | ) |
Interest expenses |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (484,168 | ) |
|
| (484,168 | ) |
Other income |
|
| 25 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 25 |
|
Loss before income tax |
|
| (66,068 | ) |
|
| (1,755 | ) |
|
| (17,640 | ) |
|
| (92,254 | ) |
|
| (665,531 | ) |
|
| (843,248 | ) |
Income tax |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Net loss |
| $ | (66,068 | ) |
| $ | (1,755 | ) |
| $ | (17,640 | ) |
| $ | (92,254 | ) |
| $ | (665,531 | ) |
| $ | (843,248 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets as December 31, 2021 |
| $ | 66,732 |
|
| $ | 150,975 |
|
| $ | - |
|
| $ | 465,267 |
|
|
| 32,882,177 |
|
| $ | 33,565,151 |
|
F-12 |
Table of |
Recently Issued But Not Yet Adopted Accounting Pronouncements
|
| Six Months ended December 31, 2022 |
| |||||||||||||||||||||||||
|
| Gold mineral mining |
|
| Distribution of THC-free cannabinoid (CBD) products |
|
| Production and distribution of renewable commodities |
|
| Holding property |
|
| Licensor of proprietary pyrolysis technology |
|
| Corporate unallocated |
|
| Consolidated |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Revenue |
| $ | - |
|
| $ | - |
|
| $ | 79,265 |
|
| $ | 23,221 |
|
| $ | - |
|
| $ | 4,966 |
|
| $ | 107,452 |
|
Cost of revenue |
|
| - |
|
|
| - |
|
|
| (78,629 | ) |
|
| - |
|
|
| - |
|
|
| (966 | ) |
|
| (79,595 | ) |
Gross profit |
|
| - |
|
|
| - |
|
|
| 636 |
|
|
| 23,221 |
|
|
| - |
|
|
| 4,000 |
|
|
| 27,857 |
|
Selling, general & administrative expenses |
|
| (107,456 | ) |
|
| (2,575 | ) |
|
| (1,002,409 | ) |
|
| (87,250 | ) |
|
| (653 | ) |
|
| (472,179 | ) |
|
| (1,672,522 | ) |
Loss from operations |
|
| (107,456 | ) |
|
| (2,575 | ) |
|
| (1,001,773 | ) |
|
| (64,029 | ) |
|
| (653 | ) |
|
| (468,179 | ) |
|
| (1,644,665 | ) |
Interest expenses |
|
| - |
|
|
| - |
|
|
| (8,688 | ) |
|
| - |
|
|
| - |
|
|
| (1,870,972 | ) |
|
| (1,879,660 | ) |
Other income |
|
| 6,056 |
|
|
| - |
|
|
| 636 |
|
|
| - |
|
|
| - |
|
|
| 961 |
|
|
| 7,653 |
|
Loss before income tax |
|
| (101,400 | ) |
|
| (2,575 | ) |
|
| (1,009,825 | ) |
|
| (64,029 | ) |
|
| (653 | ) |
|
| (2,388,190 | ) |
|
| (3,516,672 | ) |
Income tax |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Net loss |
| $ | (101,400 | ) |
| $ | (2,575 | ) |
| $ | (1,009,825 | ) |
| $ | (64,029 | ) |
| $ | (653 | ) |
| $ | (2,388,190 | ) |
| $ | (3,516,672 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets at December 31, 2022 |
| $ | 29,169 |
|
| $ | 315,929 |
|
| $ | 1,685,244 |
|
| $ | 1,253,068 |
|
| $ | 30,202,975 |
|
| $ | 6,148,975 |
|
| $ | 39,635,360 |
|
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326) (“ASU 2016-13”), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. ASU 2016-13 replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. ASU 2016-13 is to be adopted on a modified retrospective basis. As a smaller reporting company, ASU 2016-13 will be effective for the Company for interim and annual reporting periods beginning after December 15, 2022. The Company is currently evaluating the impact that the adoption of ASU 2016-13 will have on its consolidated financial statement presentations and disclosures.
In January 2017, the FASB issued ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment (“ASU 2017-04”). ASU 2017-04 eliminates Step 2 of the two-step goodwill impairment test, under which a goodwill impairment loss was measured by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. ASU 2017-04 requires only a one-step quantitative impairment test, whereby a goodwill impairment loss is measured as the excess of a reporting unit’s carrying amount over its fair value (not to exceed the total goodwill allocated to that reporting unit). Adoption of the ASUs is on a modified retrospective basis. As a smaller reporting company, the standard will be effective for the Company for interim and annual reporting periods beginning after December 15, 2022. The Company is currently evaluating the impact that the adoption of ASU 2017-04 will have on its consolidated financial statement presentation or disclosures.
In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt — Modifications and Extinguishments (Subtopic 470-50), Compensation —Stock Compensation (Topic 718), and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (“ASU 2021-04”). ASU 2021-04 provides guidance as to how an issuer should account for a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option (i.e., a warrant) that remains classified after modification or exchange as an exchange of the original instrument for a new instrument. An issuer should measure the effect of a modification or exchange as the difference between the fair value of the modified or exchanged warrant and the fair value of that warrant immediately before modification or exchange and then apply a recognition model that comprises four categories of transactions and the corresponding accounting treatment for each category (equity issuance, debt origination, debt modification, and modifications unrelated to equity issuance and debt origination or modification). ASU 2021-04 is effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. An entity should apply the guidance provided in ASU 2021-04 prospectively to modifications or exchanges occurring on or after the effective date. Early adoption is permitted for all entities, including adoption in an interim period. If an entity elects to early adopt ASU 2021-04 in an interim period, the guidance should be applied as of the beginning of the fiscal year that includes that interim period. The adoption of ASU 2021-04 is not expected to have any impact on the Company’s consolidated financial statement presentation or disclosures.
The Company’s management does not believe that any other recently issued, but not yet effective, authoritative guidance, if currently adopted, would have a material impact on the Company’s financial statement presentation or disclosures.
|
| Six Months ended December 31, 2021 |
| |||||||||||||||||||||
|
| Gold mineral mining |
|
| Distribution of THC-free cannabinoid (CBD) products |
|
| Production and distribution of renewable commodities |
|
| Holding property |
|
| Corporate unallocated |
|
| Consolidated |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Revenue |
| $ | - |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
Cost of revenue |
|
| - |
|
|
| - |
|
|
|
|
|
|
| - |
|
|
| - |
|
|
| - |
|
Gross profit |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Selling, general & administrative expenses |
|
| (107,376 | ) |
|
| (1,755 | ) |
|
| (17,640 | ) |
|
| (102,742 | ) |
|
| (493,588 | ) |
|
| (723,101 | ) |
Loss from operations |
|
| (107,376 | ) |
|
| (1,755 | ) |
|
| (17,640 | ) |
|
| (102,742 | ) |
|
| (493,588 | ) |
|
| (723,101 | ) |
Interest expenses |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (954,934 | ) |
|
| (954,934 | ) |
Other income |
|
| 12,115 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 12,115 |
|
Loss before income tax |
|
| (95,261 | ) |
|
| (1,755 | ) |
|
| (17,640 | ) |
|
| (102,742 | ) |
|
| (1,448,522 | ) |
|
| (1,665,920 | ) |
Income tax |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Net loss |
| $ | (95,261 | ) |
| $ | (1,755 | ) |
| $ | (17,640 | ) |
| $ | (102,742 | ) |
| $ | (1,448,522 | ) |
| $ | (1,665,920 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets as December 31, 2021 |
| $ | 66,732 |
|
| $ | 150,975 |
|
| $ | - |
|
| $ | 465,267 |
|
|
| 32,882,177 |
|
| $ | 33,565,151 |
|
F-13 |
Table of |
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 December 31, |
|
| Six Months ended December 31, |
| ||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Malaysia |
| $ | 10,621 |
|
| $ | - |
|
| $ | 22,233 |
|
| $ | - |
|
United States |
|
| 70,519 |
|
|
| - |
|
|
| 85,219 |
|
|
| - |
|
|
| $ | 81,140 |
|
| $ | - |
|
| $ | 107,452 |
|
| $ | - |
|
NOTE 3 - CASH5 – OTHER RECEIVABLE AND CASH EQUIVALENTDEPOSITS
The Company considers all highly liquid investments purchased with original maturitiesOther receivable, deposits and prepayments as of three months or less to be cash equivalents. At December 31, 20212022 and June 30, 2021 cash and cash equivalents2022 consisted of bank deposits in Malaysia bank and petty cash on hands.the following:
NOTE 4 –OTHER RECEIVABLE, AND ADVANCED TO RELATED PARTIES –
Other receivables
Other receivables at December 31, 2021 and June 30, 2021 consist of the following items:
|
| December 31 |
|
| June 30 |
| ||
|
| 2021 |
|
| 2021 |
| ||
|
|
|
|
|
|
| ||
Other receivable (#1) |
| $ | 0 |
|
| $ | 26,338 |
|
Less: allowance for doubtful debts |
|
| 0 |
|
|
| 0 |
|
|
| $ | 0 |
|
| $ | 26,338 |
|
(#1) Other receivables were amounts due from Jusra Mining Merapoh Sdn Bhd, whose major shareholder Lamax Gold Limited holds 15% of Champmark Sdn Bhd, for the sale of wash sand recognized as other income by the Company.
Advanced to related party
Advanced from related party at December 31, 2021 and June 30, 2021 consist of the following items:
|
| December 31, 2021 |
|
| June 30, 2021 |
| ||
Advanced to Global Renewable Sdn Bhd (#1) (note 1) |
| $ | 125,408 |
|
| $ | 6,691 |
|
|
| $ | 125,408 |
|
| $ | 6,691 |
|
______________
(#1) Balakrishnan B.S. Muthu is the common director of Global Renewable Sdn Bhd and the Company. The advances are related to ordinary business transactions and bear no interest or collateral, repayable and renewable under normal business advancement terms.
|
| December 31, 2022 |
|
| June 30, 2022 |
| ||
|
|
|
|
|
|
| ||
Deposits |
| $ | 201,466 |
|
| $ | 118,516 |
|
Other receivables |
|
| 8,946 |
|
|
| - |
|
|
| $ | 210,414 |
|
| $ | 118,516 |
|
F-14 |
Table of |
NOTE 5 - OPERATING LEASE6 –INTANGIBLE ASSET
As of December 31,On May 13, 2021, the Company leases minings space underannounced the Share Sale Agreement on May 12, 2021 for the acquisition of the entire issued and paid-up share capital of Bio Resources Limited from Taipan International Limited, an unrelated third party, The Wision Project Limited (formerly known as “Borneo Resources Limited”), an unrelated third party, and other unrelated third party individuals, in consideration of issuance of 321,500,000 shares of the Company’s restricted common stock at $0.03 per share, valued at $9,645,000, and the issuance of promissory notes with two-year term period with a non-cancelable operating lease,principal amount of $20,355,000. 321,500,000 shares and the promissory notes were issued on May 12, 2021. The face value (principal) amount of $20,355,000 is repayable by May 12, 2023, and bearing zero coupon interest. On January 20, 2022, the Company had reached a mutual agreement with termsthe Lenders of two years. Leasethe Notes to enter into a Supplement to Promissory Note, with each Lender, to convert the total principal loan amount of $20,355,000 into shares of the Company’s restricted Common Stock priced at $0.0611 per share, which represents the last ninety (90) days’ volume weighted average price (VWAP) as of the market closing of January 19, 2022. The conversion of the promissory notes were completed on December 9, 2022 with the issuance of 333,142,389 of the Company’s restricted Common Stock. The acquisition of BRL was consummated on October 12, 2022.
Bio Resources Limited (“BRL”) is the beneficial and/or registered proprietor of the intellectual property known as “Catalytic Biofraction Process”, which is a slow pyrolysis process using a proprietary catalyst to depolymerise palm biomass wastes (empty fruit bunches or palm kernel shells) in temperature range of 350 degrees Celsius to 500 degrees Celsius to yield commercially valuable bio products: bio-oil, wood vinegar (pyroligneous acid), biochar and bio-syngas. The intellectual property is a second-generation pyrolysis process where non-food feedstock like palm biomass wastes is used as feedstock. Upon fulfilling UN’s (United Nations) ACM 22 protocol as well as LCA (Life Cycle Assessment) requirements, it is anticipate that the by-products from this IP with fair value of $30,192,771 would lead to certification and issuance of Carbon Avoidance Credits as well as Carbon Removal Credits to generate carbon revenue for the Company.
During this quarter, the Company has not operated the use of its intellectual property rights to generate its revenue. Therefore, no amortization was provided.
NOTE 7 – PROPERTY, PLANT AND EQUIPMENT
A summary of property and equipment at December 31, 2022 and June 30, 2022 is as follows:
|
| December 31, 2022 |
|
| June 30, 2022 |
| ||
|
|
|
|
|
|
| ||
Land and building |
| $ | 2,151,709 |
|
| $ | 1,642,102 |
|
Plant and machinery |
|
| 491,536 |
|
|
| 134,198 |
|
Office equipment |
|
| 24,097 |
|
|
| 23,353 |
|
Project equipment |
|
| 616,169 |
|
|
| 615,420 |
|
Computer |
|
| 15,943 |
|
|
| 14,846 |
|
Motor vehicle |
|
| 741,735 |
|
|
| 225,861 |
|
Furniture & fittings |
|
| 10,320 |
|
|
| 2,527 |
|
|
|
| 4,051,509 |
|
|
| 2,658,307 |
|
Less: accumulated depreciation |
|
| (1,685,812 | ) |
|
| (1,609,414 | ) |
|
| $ | 2,365,697 |
|
| $ | 1,048,893 |
|
Depreciation expense for lease payment is recognized on a straight-line basis over the lease term.three months ended December 31, 2022 and 2021 totalled $51,955 and $4,134, respectively.
On June 14 2021, a lump sum payment of RM260,500 ($62,260) was made upfront to rent the mining space with lease period for 2 years up to June 13, 2023, and no ongoing payments will be made under the terms of these mining leases.
The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
The table below presents the operating lease related assets and liabilities recorded on the balance sheets.
|
| Ended December 31, |
| |
Balance as at the beginning of period |
| $ | 60,131 |
|
Addition |
|
| 0 |
|
Amortization charge for the year |
|
| (15,585 | ) |
Foreign exchange adjustment |
|
| (254 | ) |
Balance as of December 31, 2021 |
| $ | 44,292 |
|
Amortization charge of rights of use lease assets was $15,585 and $nilDepreciation expense for the six months ended December 31, 2022 and 2021 totalled $79,907 and 2020,$5,220, respectively. Amortization charge
Land and building with the net carrying value of rights of use lease assets was $7,809 and $nil for the three month ended$735,063 at December 31, 20212022 and 2020, respectively.$746,145 at June 30, 2022 were pledged to a financial institution for facilities granted.
| ||||
| ||||
|
|
F-15 |
Table of |
NOTE 68 – OTHER DEPOSIT & PREPAYMENT
Other deposit & prepayment as of December 31, 2021 and June 30, 2021 consisted of the following:
|
| December 31, |
|
| June 30, |
| ||
|
| 2021 |
|
| 2021 |
| ||
|
|
|
|
|
|
| ||
Prepayments to suppliers |
| $ | 117,200 |
|
| $ | 0 |
|
Prepaid operating expenses |
|
| 0 |
|
|
| 6,137 |
|
|
| $ | 117,200 |
|
| $ | 6,137 |
|
NOTE 7 – DEPOSITDEPOSITS PAID FOR ACQUISITION OF SUBSIDIARIES AND PROPERTY, PLANT AND EQUIPMENT
At December 31, 20212022 and June 30, 2021 deposit and prepayment consists2022, deposits consist of the following:
|
| December 31, |
|
| June 30, |
| ||
|
| 2021 |
|
| 2021 |
| ||
|
|
|
|
|
|
| ||
Deposits paid for acquisition of subsidiaries |
|
|
|
|
|
| ||
- Bio Resources Limited (#1) |
| $ | 25,935,550 |
|
| $ | 25,935,550 |
|
- Champmark Sdn Bhd (#2) |
|
| 36,005 |
|
| $ | 36,130 |
|
|
| $ | 25,971,555 |
|
| $ | 25,971,680 |
|
|
|
|
|
|
|
|
|
|
Deposits paid for acquisition of property, plant and equipment |
|
|
|
|
|
|
|
|
- Intellectual property license (#3) |
|
| 5,000,000 |
|
|
| 4,070,000 |
|
- Factory site (#4) |
|
| 800,000 |
|
|
| 800,000 |
|
- Security deposit of property (#5) |
|
| 240,000 |
|
|
| 0 |
|
|
| $ | 6,040,000 |
|
| $ | 4,870,000 |
|
|
| December 31, 2022 |
|
| June 30, 2022 |
| ||
Deposits paid for acquisition of subsidiaries |
|
|
|
|
|
| ||
- Bio Resources Limited (#1) |
| $ | - |
|
| $ | 25,935,550 |
|
|
|
|
|
|
|
|
|
|
Deposits paid for acquisition of property, plant and equipment (#2) |
|
| 5,000,000 |
|
|
| 5,000,000 |
|
|
|
|
|
|
|
|
|
|
Security deposit |
|
|
|
|
|
|
|
|
- Factory site (#3) |
|
| 80,000 |
|
|
| 80,000 |
|
- Land and building (#4) |
| $ | - |
|
| $ | 240,000 |
|
|
| $ | 80,000 |
|
| $ | 320,000 |
|
___________
(#1) The Company announced the Share Sale Agreement on May 12, 2021 for the acquisition of the entire issued and paid-up share capital of Bio Resources Limited from Taipan International Limited, an unrelated third party, The Wision Project Limited (formerly known as “Borneo Resources Limited”), an relatedunrelated third party, and other individuals unrelated third parties,party individuals, in consideration of issuance of 321,500,000 shares of the Company’s restricted common stock at $0.03 per share, valued at $9,645,000, and the issuance of promissory notes with two-year term period with a principal amount of $20,355,000. 321,500,000 shares were issued on May 12, 2021 and the promissory notes were issued on May 12, 2021. The face value (principal) amount of $20,355,000 is repayable by Maywas convertible into common shares within 60 days from October 12, 2023,2022, and bearing zero coupon interest. The promissory note iswas priced at $16,290,550 considering the current market interest rate.rate then. This acquisition is currently in progress and the completion of the S&P Agreement is subject to all such acts necessary, including but not limited to auditing and due diligence exercise to ascertain the valuation of Bio Resources Limited. The consideration shall be refundable if the transaction fails to complete.was subsequently closed on October 12, 2022.
(#2) On June 18, 2021, GBL entered into a Shares Sale Agreement with Lamax Gold Limited (“LGL”), a company incorporated under the laws of the British Virgin Islands, in relation to acquisition of the remaining 15% of the issued and paid-up share capital of CSB. Prior to this acquisition, GBL owned 85% equity in CSB. Upon completion of the acquisition, GBL would own the entire issued and paid-up share capital of CSB. Under the terms of the Shares Sale Agreement, the consideration for the acquisition shall be satisfied in full by the payment of Malaysia Ringgit MYR150,000 ($35,843) upon the execution of the Shares Sale Agreement. This acquisition is currently in progress and the completion of the S&P Agreement is subject to all such acts necessary, including but not limited to auditing and due diligence exercise to ascertain the valuation of 15% of the issued and paid-up share capital of CSB. A deposit of MYR 150,000 ($35,843) was paid to LGL on June 21, 2021. The consideration shall be refundable if the transaction fails to complete.
(#3) On May 10, 2021, the Company announced the Sale and Purchase Agreement to acquire the assets of biofraction plant and the right to use intellectual property license in Sabah, Malaysia from Borneo Energy Sdn Bhd, in consideration of issuance of 166,666,667 share of the Company’s stock at $0.03 per share, valued at $5,000,000. 135,666,667 shares and 31,000,000 shares were issued on May 10, 2021 and July 1, 2021, respectively. This acquisition is currently in progress and the completion of the S&P Agreement is subject to all such acts necessary, including but not limited to due diligence exercise to ascertain the valuation of the assets of the biofraction plant and the right to use the licensed intellectual property in Sabah, Malaysia. The consideration shall be refundable if the transaction fails to complete.
(#4)(#3) On June 11, 2021, GBLMarch 2, 2022, the Company, through VRAP, entered into a SaleCommercial Lease Agreement and Option to Purchase of Assets Agreement (the “SPA(“Lease Agreement”) to purchase athe factory site from a Malaysia company Segama Ventures Sdn Bhdfor a lease term of seven (7) years (“Segaman Ventures”Lease Term”), an unrelated third party, at a monthly rental of MYR 36,000 ($8,571). The rental for the entire Lease Term amounts to the sum of MYR 3,024,000 ($720,000) (the “Lease Payment”) which shall be paid in order to expand the Company’s biofraction plant in Malaysia. Under the termsadvance upon commencement of the SPALease Agreement the acquisition is satisfied by cashtogether with a payment of $1,600,000 in two instalmentssecurity deposit for the sum of $800,000 each, one payment upon signing the SPA Agreement, and the second payment within three (3) months from the date of the SPA Agreement. A deposit of $800,000 was paid to Segaman Ventures on June 10, 2021. This acquisition is currently in progress and the completion of the S&P Agreement is subject to all such acts necessary, including but not limited to due diligence exercise to ascertain the valuation of factory site. The consideration shall be refundable if the transaction fails to complete.MYR 336,000 ($80,000) (the “Security Payment”).
(#5)(#4) On February 10, 2022, the Company, through VEL, a limited liability company incorporated in the State of Missouri, which is aan indirect wholly-owned subsidiary of the Company’s wholly-owned subsidiary,Company via Verde Renewables, Inc., entered into a Commercial Lease Agreement and Option to Purchase (the “Lease Agreement”) to rent a 24-acre property in La Belle from Jon Neal Simmons and Betty Jo Simmon (the “Landlord”) in order to kickstart carbon farming with biochar in Missouri.
Under the Lease Agreement, the term of the lease will be for a period of two (2) years and the Company will have the right to renew the lease with a total of three renewal periods with each term being two years. The monthly base rent is ten thousand dollars ($10,000)$10,000 for the term, was payable on the commencement of the Lease Agreement.Agreement, together with a security deposit of $240,000. The Lease Agreement also grants the Company the exclusive right and option to purchase the premises together with all the right title and interest from the Landlord for a consideration of four hundred ninety thousand dollar ($490,000)$490,000 at any time during the two years periodtwo-year term of the lease term. The Company has paid to the Landlord a security deposit of the sum of two hundred forty thousand dollars ($240,000) prior to the execution of the Lease Agreement.lease. If the Company does not exercise the option to renew the lease orexercises the option to purchase the premises from the Landlord, the upfront lease payment and security deposit shallmay be returnedutilized as part payment of the purchase consideration. The option to purchase was exercised on September 27, 2022.
NOTE 9 - MINING RIGHT
A lump sum payment of RM260,500 ($62,260) was made for a mining right over a period of 2 years up to June 13, 2023. The mining right is amortized on a straight-line basis over the Company. In November 1, 2021,term of the Company paid $240,000 to Landlordright.
The table below presents the movement of the right as recorded on the balance sheets.
|
| Six months ended December 31, 2022 |
|
| Year Ended June 30, 2022 |
| ||
Balance as at July 1, 2022 and July 1, 2021 |
| $ | 27,088 |
|
| $ | 60,131 |
|
Amortization charge for the period |
|
| (14,394 | ) |
|
| (30,779 | ) |
Foreign exchange adjustment |
|
| (366 | ) |
|
| (2,264 | ) |
Balance as of December 31, 2022 and June 30, 2022 |
| $ | 12,328 |
|
| $ | 27,088 |
|
Amortization charge of mining right was $7,188 and $7,809 for the security deposit.three months ended December 31, 2022 and 2021, respectively.
Amortization charge of mining right was $14,394 and $15,585 for the six months ended December 31, 2022 and 2021, respectively.
F-16 |
Table of |
NOTE 810 – ACCOUNTS PAYABLE AND ADVANCED FROMAMOUNTS DUE TO RELATED PARITESPARTIES
Accounts PayableThe following breakdown of the balances due to related parties, consisted of:-
Accounts payable at December 31, 2021 and June 30, 2021 consist of the following items:
|
| December 31, 2021 |
|
| June 30, 2021 |
| ||
|
|
|
|
|
|
| ||
Other accounts payable |
| $ | 1,921 |
|
| $ | 2,655 |
|
|
| December 31, 2022 |
|
| June 30, 2022 |
| ||
|
|
|
|
|
|
| ||
Borneo Oil and Gas Corporation Sdn Bhd (“BOG”) |
| $ | 718,168 |
|
| $ | 555,527 |
|
Borneo Energy Sdn Bhd |
|
| 15,696 |
|
|
| - |
|
Taipan International Limited |
|
| 119,153 |
|
|
| - |
|
Mr. Jack Wong |
|
| 40,028 |
|
|
|
|
|
|
|
| 893,045 |
|
|
| 555,527 |
|
Advanced from related parties
Advanced from related parties at December 31, 2021 and June 30, 2021, consist of the following items:
|
| December 31, 2021 |
|
| June 30, 2021 |
| ||
|
|
|
|
|
|
| ||
Advanced from BOG (#1) |
| $ | 584,253 |
|
| $ | 579,783 |
|
Advanced from Federal Capital Investment Limited (#2) |
| $ | 6,000 |
|
| $ | 6,000 |
|
Amounts due from directors (#3) |
| $ | 100 |
|
| $ | 0 |
|
|
| $ | 590,353 |
|
| $ | 585,783 |
|
______________
(#1) Borneo Oil and Gas Corporation SDN (“BOG”) is a wholly owned subsidiary of Borneo Oil Berhad (“BOB”) (holding 20.0%16.1% and 23.0%22.8% of the Company’s issued and outstanding common stock as of December 31, 2022 and June 30, 20212022, respectively) is the holding company of BOG and November 10, 2021, respectively). BOG is one of the shareholders of the Company and did not own any shares of the Company since April 28, 2017.Borneo Energy Sdn Bhd. The advances are related to ordinary business transactions and bear no interest or collateral, repayable and renewable under normal business advancement terms.
(#2) OneTaipan International Limited is one of the directors of Federal Capital Investment Limited, Mr. Wu Ming Ding, has resigned as directorshareholders of the Company, effective on February 20, 2021.and held 33.5% of the Company’s issued and outstanding common stock as of December 31, 2022. The advances are related to ordinary business transactions and bear no interest or collateral, repayable and renewable under normal business advancement terms.
On June 9, 2021,Mr. Jack Wong is the Company entered into a Settlement of Debt Agreement (the “Debt Settlement Agreement”) with Federal Capital Investment Limited, to convert a total of USD 142,000 of the Company’s accounts payable to the creditor as of December 31, 2020 into equity by means of a subscription for 4,733,333 new restricted shares of the Company’s common stock at a subscription price of $0.03 per share.
(#3) Carl Craven, a directorPresident and Chief Executive of the Company advanced $100 to the Company. The advance is related to ordinary business transactions and bear no interest or collateral, repayable and renewable under normal business advancement terms.
NOTE 9 – PROPERTY, PLANT AND EQUIPMENTeffective October 1, 2022.
Property and equipment at December 31, 2021 and June 30, 2021 are summarized as follows:
|
| December 31, 2021 |
|
| June 30, 2021 |
| ||
|
| (Unaudited) |
|
|
|
| ||
Land and Building |
| $ | 944,027 |
|
| $ | 947,292 |
|
Plant and Machinery |
|
| 16,343 |
|
|
| 16,399 |
|
Office equipment |
|
| 21,403 |
|
|
| 18,968 |
|
Project equipment |
|
| 651,123 |
|
|
| 653,374 |
|
Computer |
|
| 12,622 |
|
|
| 11,170 |
|
Motor Vehicle |
|
| 126,230 |
|
|
| 35,710 |
|
Accumulated depreciation |
|
| (1,681,781 | ) |
|
| (1,682,358 | ) |
|
| $ | 89,967 |
|
| $ | 555 |
|
The depreciation expenses charged for the six months ended December 31, 2021 and 2020 was $5,220 and $86. The depreciation expenses charged for the three months ended December 31, 2021 and 2020 was $4,134 and $44.
Included in property, plant and equipment, a motor vehicle was under finance leases with a carrying amount of $58,467 and nil as of December 31, 2021 and June 30, 2021, respectively. The amount of related depreciation expenses related to assets under finance lease were $4,176 and nil for the six months ended of December 31, 2021 and 2020, respectively. The amount of related depreciation expenses related to assets under finance leases were $3,132 and nil for the three months ended of December 31, 2021 and 2020, respectively.
NOTE 10 – FINANCE LEASE LIABILITIES
The loans from a hire purchase creditor include long term and short term and are summarized as follow:
|
| December 31, 2021 |
|
| June 30, 2021 |
| ||
Current finance lease liabilities |
| $ | 10,440 |
|
| $ | 0 |
|
Non-current finance lease liabilities |
|
| 49,593 |
|
|
| 0 |
|
Total |
| $ | 60,033 |
|
| $ | 0 |
|
A hire purchase installment loan with total amount $60,033 and nil as at December 31, 2021 and June 30, 2021 are $60,033 and nil net of interest charges equivalent to interest nil and nil are summarized as follows:
|
| Interest Rate |
|
| Monthly Due |
|
| December 31, 2021 |
|
| June 30, 2021 |
| ||||
Finance lease liabilities in the hire purchase loan |
|
| 0 | % |
|
| 870 |
|
|
| 60,033 |
|
|
| 0 |
|
Finance lease liabilities to a hire purchase creditor |
|
|
|
|
|
|
|
|
| $ | 60,033 |
|
| $ | 0 |
|
The scheduled maturities of the finance lease liabilities installment loans are as follows:
December 31, |
|
|
| |
2022 |
|
| 10,440 |
|
2023 |
|
| 10,441 |
|
2024 |
|
| 10,440 |
|
2025 |
|
| 10,441 |
|
Thereafter |
|
| 18,271 |
|
Total minimum finance lease liabilities installment payment |
| $ | 60,033 |
|
Less: Imputed interest |
|
| 0 |
|
Present value of net minimum lease payments (#) |
| $ | 60,033 |
|
(#) Minimum payment reflected in the balance sheet as current and noncurrent obligations under finance lease liabilities as at December 31, 2021.
NOTE 11 - – PROMISSORY NOTES
On May 10,13, 2021, the Company announced the Share Sale Agreement ondated May 12, 2021 for the acquisition of the entire issued and paid-up share capital of Bio Resources Limited from Taipan International Limited, an unrelated third party, The Wision Project Limited (formerly known as “Borneo Resources Limited”), an un-relatedunrelated third party, and other individuals unrelated third parties,party individuals, in consideration of issuance of 321,500,000 shares of the Company’s restricted common stock at $0.03 per share, valued at $9,645,000, and the issuance of promissory notes with two-year term period with a principal amount of $20,355,000. 321,500,000 shares were issued on May 12, 2021 and the promissory notes were issued on May 12, 2021. The face value (principal) amount of $20,355,000 iswas repayable by May 12, 2023, and bearing zero coupon interest. On January 20, 2022, the Company had reached a mutual agreement with the Lenders of the Notes to enter into a Supplement to Promissory Note with each Lender, to convert the total principal loan amount of $20,355,000 into shares of the Company’s restricted Common Stock priced at $0.0611 per share, which represents the last ninety (90) days’ volume weighted average price (VWAP) as of the market closing of January 19, 2022. With the consummation of the acquisition of BRL on October 12, 2022, on December 9, 2022 the conversion of Promissory Notes was completed pursuant to a Supplementary Agreement dated December 7, 2022, with the issuance of 333,142,389 shares of the Company’s restricted Common Stock, at the price of $0.0611 per share, to the 17 Lenders, including the Company’s President and CEO, Jack Wong.
The fair value of the outstanding promissory notes as of June 30, 2022 was calculated with the following assumptions:
Risk free rate |
|
| 0.268 | % |
Credit spread |
|
| 6.513 | % |
Liquidity risk premium |
|
| 5.000 | % |
The following is a reconciliation of the beginning and ending balances of promissory notes payable using Level 3 inputs:
|
| December 31 |
|
| June 30 |
| ||
|
| 2021 |
|
| 2021 |
| ||
Balance at the beginning of period |
| $ | 16,535,942 |
|
| $ | 0 |
|
Promissory notes issued to unrelated third parties at fair value |
|
| 0 |
|
|
| 16,290,550 |
|
Interest expense |
|
| 954,934 |
|
|
| 245,392 |
|
Balance at the end of period |
| $ | 17,490,876 |
|
| $ | 16,535,942 |
|
|
| December 31, |
|
| June 30, |
| ||
|
| 2022 |
|
| 2022 |
| ||
Balance at the beginning of period or year |
| $ | 18,484,028 |
|
| $ | 16,535,942 |
|
Interest expense |
|
| 1,870,972 |
|
|
| 1,948,086 |
|
Converted to Company’s restricted common Stock |
|
| (20,355,000 | ) |
|
| - |
|
Balance at the end of period or year |
| $ | - |
|
| $ | 18,484,028 |
|
The Company recorded $954,934$1,344,745 and $nil$484,168 interest expense for the three months ended December 31, 2022 and 2021, respectively.
The Company recorded $1,879,660 and $954,934 interest expense for the six months ended December 31, 2022 and 2021, and 2020, respectively.
F-17 |
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, and current and non-current 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 Company adopts a 5% as weighted average incremental borrowing rate to determine the present value of the lease payments. The weighted average remaining life of the lease was 3 years.
The table below presents the lease-related assets and liabilities recorded $484,168on the balance sheet.
|
| December 31, 2022 |
|
| June 30, 2022 |
| ||
|
|
|
|
|
|
| ||
Assets |
|
|
|
|
|
| ||
Right-of-use asset (#1) |
| $ | 634,286 |
|
| $ | 685,714 |
|
Right-of-use asset (#2) |
|
| 59,310 |
|
|
| - |
|
|
|
| 693,596 |
|
|
| 685,714 |
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
Current: |
|
|
|
|
|
|
|
|
Operating lease liabilities |
| $ | 18,975 |
|
| $ | - |
|
Finance lease liabilities |
| $ | 169,496 |
|
| $ | 75,224 |
|
|
|
|
|
|
|
|
|
|
Non-current: |
|
|
|
|
|
|
|
|
Operating lease liabilities |
| $ | 40,335 |
|
| $ | - |
|
Finance lease liabilities |
|
| 686,883 |
|
|
| 97,900 |
|
|
|
|
|
|
|
|
|
|
Total lease liabilities |
| $ | 915,689 |
|
| $ | 173,124 |
|
As of December 31, 2022, right-of-use assets were $693,596 and $nil interest expenses forlease liabilities were $915,689.
As of June 30, 2022, right-of-use assets were $685,714 and lease liabilities were $173,124.
For the three months ended December 31, 2022 and 2021, the amortization charge on right-of use assets was $25,714 and 2020,$0, respectively.
For the six months ended December 31, 2022 and 2021, the amortization charge on right-of-use was $57,028 and $0, respectively.
(#1) This leasing arrangement for the lease of the Segama factory amounting to $720,000 is for a lease term of seven (7) years and includes an exclusive right and option to purchase the factory site, together with all its right title and interest, for a consideration to be mutually agreed between the parties at any time during the period of two years from the date of the Lease Agreement. The Lease Payment and Security Payment shall be applied toward the Purchase Price upon VRAP exercising the option to purchase. The Company’s lease agreements do not contain any material restrictive covenants.
There are no corresponding lease liabilities recorded as the lease payments for the entire lease period has been paid upfront upon inception of the agreement.
(#2)This leasing arrangement for the lease of the executive vehicle amounting to $84,718 is for a lease term of three (3) years and includes option to purchase the said vehicle at an agreed consideration as stated in the Lease Agreement. The purchase option fee shall be applied toward the Purchase Price upon VRI exercising the option to purchase. The Company’s lease agreements do not contain any material restrictive covenants.
F-18 |
Table of contents |
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.
|
| Six Months ended December 31, |
| |||||
|
| 2022 |
|
| 2021 |
| ||
|
|
|
|
|
|
| ||
Finance lease cost: |
|
|
|
|
|
| ||
Interest on lease liabilities (per ASC 842) |
| $ | 8,688 |
|
| $ | - |
|
|
|
|
|
|
|
|
|
|
Operating lease cost: |
|
|
|
|
|
|
|
|
Operating lease expense (per ASC 842) |
|
| 65,867 |
|
|
| 10,818 |
|
|
|
|
|
|
|
|
|
|
Total lease expense |
| $ | 74,555 |
|
| $ | 10,818 |
|
Components of Lease Expense
The Company recognizes operating lease expense on a straight-line basis over the term of the operating leases, comprising interest expense determined using the effective interest method, and amortization of the right-of-use asset, as reported within “general and administrative” expense on the accompanying unaudited condensed consolidated statement of operations.
Finance lease expense comprise of interest expenses determined using the effective interest method.
Future Contractual Lease Payments as of December 31, 2022
The below table summarizes our (i) minimum lease payments over the next five years, (ii) lease arrangement implied interest, and (iii) present value of future lease payments for the next five years and thereafter ending December 31:
Years ending December 31, |
| Operating and finance lease amount |
| |
|
|
|
| |
2023 |
| $ | 188,471 |
|
2024 |
|
| 146,789 |
|
2025 |
|
| 150,206 |
|
2026 |
|
| 141,282 |
|
2027 |
|
| 124,164 |
|
Thereafter |
|
| 164,777 |
|
Total minimum finance lease liabilities installment payment |
| $ | 915,689 |
|
|
|
|
|
|
Representing:- |
|
|
|
|
Current liabilities |
| $ | 188,471 |
|
Non-current liabilities |
|
| 727,218 |
|
|
| $ | 915,689 |
|
NOTE 13 - STOCKHOLDERS’ EQUITY
Authorized Stock
The Company has authorized 10,000,000,000 common shares and 50,000,000 preferred shares, both with a par value of $0.001 per share. Each common share entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought.
Preferred stock outstanding
There are no preferred shares outstanding as of December 31, 2022 and June 30, 2022.
The Company has no stock option plan, warrants, or other dilutive securities.
Common stock outstanding
On July 15, 2022, the Company issued a total of 1,500,000 restricted common shares at US$0.155 per share to two consultants pursuant to two consultant agreements; 1,000,000 restricted common shares were issued to Gary F. Zimmer and 500,000 restricted common shares were issued to Lisa Leilani Zimmer Durand, to serve as consultants to the Company. An aggregate of $232,500 was recognized as stock-based compensation under general and administrative expenses during the period ended September 30,2022.
During period ended September 30, 2022, 15,328,029 restricted common shares were committed to be issued pursuant to private placement and were subsequently issued on November 7, 2022, comprising of 291,667 restricted common shares for US$21,000 at US$0.072 per share to one non-US shareholder, 15,036,362 restricted common shares for US$1,323,200 at US$0.088 per share to five non-US shareholders .
F-19 |
Table of |
NOTE 12 – INCOME TAXOn November 7, 2022, the Company issued 603,181 restricted common shares for US$53,080 at US$0.088 per share to three US shareholders.
On October 26, 2022, the Company entered into a corporate consulting services agreement (the “Consulting Agreement”) for investor communication and public relations services with Dutchess Group LLC (“DGL”). On December 9, 2022, pursuant to terms of the Consulting Agreement, the Company issued a total of 1,500,000 restricted common shares at US$0.12 per share to DGL.
On November 30, 2022, the Company, through its wholly-owned subsidiary Verde Renewables, Inc.(“VRI”), a company incorporated in the State of Missouri, U.S.A., entered into a Services Agreement (the “Agreement”) with YM Tengku Chanela Jamidah YAM Tengku Ibrahim to engage her as its Director of Strategic Initiatives to promote and make introductions for the benefit of advancing the Company’s business and interests amongst her networks as designated in the Agreement. Under the Agreement, the Company will pay YM Tengku Chanela Jamidah YAM Tengku Ibrahim by the issuance of 1,000,000 shares of the Company’s restricted common stock, par value $0.001 per share (the “Common Stock”) in two tranches of 500,000 shares each on or before December 31, 2022 and December 31, 2023 respectively. The term of the Agreement will be for a fixed period of twenty-four (24) months commencing on November 30, 2022 and both parties may renew the agreement or enter into a new agreement as may be mutually agreed on terms to be separately negotiated. On December 31, 2022, pursuant to terms of the Services Agreement, the Company issued a total of 500,000 restricted common shares at US$0.20 per share to YM Tengku Chanela Jamidah YAM Tengku Ibrahim.
On December 1, 2022, the Company through its wholly-owned subsidiary VRI, a company incorporated in the State of Missouri, U.S.A., entered into a Services Agreement (the “Agreement”) with Steven Sorhus to engage him as its Financial Controller to prepare monthly financial reports and financial projections, and oversee daily accounting practices of the Company and its subsidiaries as designated in the Agreement. Under the Agreement, the Company will pay Steven Sorhus by the issuance of 800,000 shares of the Company’s restricted common stock, par value $0.001 per share (the “Common Stock”) in two tranches of 300,000 shares on or before December 31, 2022 and 500,000 shares on or before December 31, 2023. The term of the Agreement will be for a fixed period of twenty-five (25) months commencing on December 1, 2022 and both parties may renew the agreement or enter into a new agreement as may be mutually agreed on terms to be separately negotiated. On December 31, 2022, pursuant to terms of the Agreement, the Company issued a total of 500,000 restricted common shares at US$0.20 per share to Steven Sorhus.
On December 1, 2022, the Company through its wholly-owned subsidiary VRI, a company incorporated in the State of Missouri, U.S.A., entered into a Services Agreement (the “Agreement”) with EMGTA LLC (“EMGTA”). Under the Agreement, EMGTA will provide services to develop business plan and marketing strategy to facilitate business growth, and identify new customers and markets for the Company. The Company will pay EMGTA by the issuance of 750,000 shares of the Company’s restricted common stock, par value $0.001 per share (the “Common Stock”) in two tranches of 375,000 shares each on or before December 31, 2022 and December 31, 2023 respectively. The term of the Agreement will be for a fixed period of twenty-five (25) months commencing on December 1, 2022 and both parties may renew the agreement or enter into a new agreement as may be mutually agreed on terms to be separately negotiated. On December 31, 2022, pursuant to terms of the Agreement, the Company issued a total of 375,000 restricted common shares at US$0.20 per share to EMGTA.
On December 15, 2022, the Company entered into a Services Agreement (the “Agreement”) with Looi Pei See to engage her as its consultant to develop the retail markets for the Company’s products and services in Malaysia and Singapore. On December 31, 2022, pursuant to terms of the Consulting Agreement, the Company issued a total of 1,140,000 restricted common shares at US$0.20 per share to Looi Pei See. The term of the Agreement will be for a fixed period of thirty-six (36) months.
There were 1,173,576,654 and 819,188,055 shares of common stock issued and outstanding at December 31, 2022 and June 30, 2022, respectively.
NOTE 14 - INCOME TAX
For the six months ended December 31, 2022 and 2021, the local (“United States of America”) and foreign components incurred loss before income taxes as follows:
|
| Six Months ended December 31, |
| |||||
|
| 2022 |
|
| 2021 |
| ||
|
|
|
|
|
|
| ||
Tax jurisdiction from: |
|
|
|
|
|
| ||
- Local (US regime) |
| $ | (3,023,344 | ) |
| $ | (1,553,019 | ) |
- Foreign, including |
|
|
|
|
|
|
|
|
British Virgin Island |
|
| (141,258 | ) |
|
| - |
|
Malaysia |
|
| (351,417 | ) |
|
| (112,901 | ) |
Labuan, Malaysia |
|
| (653 | ) |
|
| - |
|
|
|
|
|
|
|
|
|
|
Loss before income taxes |
| $ | (3,516,672 | ) |
| $ | (1,665,920 | ) |
F-20 |
Table of contents |
The provision for income taxes consisted of the following:
|
| Six Months ended December 31, |
| |||||
|
| 2022 |
|
| 2021 |
| ||
|
|
|
|
|
|
| ||
Current tax: |
|
|
|
|
|
| ||
- Local |
| $ | - |
|
| $ | - |
|
- Foreign |
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
Deferred tax |
|
|
|
|
|
|
|
|
- Local |
|
| - |
|
|
| - |
|
- Foreign |
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
Income tax expense (benefit) |
| $ | - |
|
| $ | - |
|
The effective tax rate in the periods presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rates. The Company mainly operates in U.S.A. and Malaysia and are subject to income taxes on an entity basis on income arising in or derived from, the tax jurisdictionjurisdictions in which they operate. The Company is a Nevada incorporated companyoperate, as follows:
United States of America
VRDR, VRI and VLI are subject to the tax laws of United State Federal Income Tax.States of America. The U.S. Tax Cuts and Jobs Act of (“TCJ(the “Tax Reform Act”) was signed into law in December 2017, and among its many provisions, it imposed a mandatory one-time transition tax on undistributed international earnings and reducedlaw. The Tax Reform Act significantly revised the U.S. corporate income tax regime by, among other things, lowering the U.S. corporate tax rate from 35% to 21%, effective January 1, 2018. No provision forThe Company’s policy is to recognize accrued interest and penalties related to unrecognized tax benefits in its income taxes in the United Statestax provision. The Company has been made as the Company had no taxable incomenot accrued or paid interest or penalties which were not material to its results of operations for the periods endedpresented.
The Company has provided for a full valuation allowance against the deferred tax assets of $895,584 on the expected future tax benefits from the net operating loss (“NOL”) carry forwards of $4,264,686 as the management believes it is more likely than not that these assets will not be realized in the future.
Net Operating Losses (NOLs) generated prior to January 1, 2018 are able to be carried forward up to twenty subsequent years. Any NOLs created for tax years subsequent to that may be carried forward indefinitely. However, any NOLs arising from tax years ending after December 31, 2021 and 2020. GBL is a British Virgin Islands incorporated company and not required2020, can only be used to pay income tax on corporate income. CSB is a Malaysia incorporated company and requiredoffset up to pay corporate income tax at 25% of taxable income. VRI and VEL are a the State of Missouri, U.S.A incorporated company and required to pay United State Federal Income Tax at 21% of taxable income. VLI is a the State of Oregon, U.S.A incorporated company and required to pay United State Federal Income Tax at 21%80% of taxable income.
A reconciliation betweenFor the six months ended December 31, 2022 and 2021, there were no operating income under US tax regime.
BVI
Under the 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 24% of its chargeable income. However, BRL is not subject to income tax, computed atgiven that it was a net loss position during the relevant statutory ratecurrent period presented. The losses are presently not able to be carried forward to offset against its future operation income as income generating activities have not yet been undertaken.
Malaysia
VRSB, Champmark and Wision are registered in Malaysia and are subject to the Company’s provision forMalaysian corporate income tax is as follows:at a standard income tax rate of 24% on chargeable income.
|
| Three months period ended |
| |||||
|
| December 31, 2021 |
|
| December 31, 2020 |
| ||
|
|
|
|
|
|
| ||
Loss before income taxes |
|
| 21 |
|
|
| 21 |
|
Non-deductible items/non-taxable income |
|
| (14 | ) |
|
| 6 |
|
Tax effect of tax exempt entity |
|
| 1 |
|
|
| (12 | ) |
Share based payments |
|
| (2 | ) |
|
| - |
|
Changes in valuation allowances |
|
| (5 | ) |
|
| (17 | ) |
Effect of different tax rate of subsidiaries operating in other jurisdictions |
| (1 | ) |
|
| 2 | ||
Effective tax rate |
|
| - |
|
|
| - |
|
For the six months ended December 31, 2022, the operation in Malaysia incurred $5,579,869 of cumulative net operating losses which can be carried forward to offset future taxable income. The net operating loss are allowed to be carried forward up to a maximum of ten (10) years of assessments under the current tax legislation in Malaysia. The Company has provided for a full valuation allowance against the deferred tax assets of $1,339,169 on the expected future tax benefits from the net operating loss (“NOL”) carryforwards as the management believes it is more likely than not that these assets will not be realized in the future.
|
| Six months period ended |
| |||||
|
| December 31, 2021 |
|
| December 31, 2020 |
| ||
|
|
|
|
|
|
| ||
Loss before income taxes |
|
| 21 |
|
|
| 21 |
|
Non-deductible items/non-taxable income |
|
| (14 | ) |
|
| (5 | ) |
Tax effect of tax exempt entity |
|
| (2 | ) |
|
| (6 | ) |
Share based payments |
|
| (2 | ) |
|
| - |
|
Changes in valuation allowances |
|
| (3 | ) |
|
| (11 | ) |
Effect of different tax rate of subsidiaries operating in other jurisdictions |
| (- | ) |
|
| 1 | ||
Effective tax rate |
|
| - |
|
|
| - |
|
|
| Six Months ended December 31, |
| |||||
|
| 2022 |
|
| 2021 |
| ||
|
|
|
|
|
|
| ||
Loss before income taxes |
| $ | (351,417 | ) |
| $ | (112,901 | ) |
Statutory income tax rate |
|
| 24 | % |
|
| 24 | % |
Income tax expense at statutory rate |
|
| (84,340 | ) |
|
| (27,096 | ) |
Non-deductible items |
|
| 6,178 |
|
|
| 3,781 |
|
Operating losses unable to carried forward |
|
| 157 |
|
|
|
|
|
Net operating loss |
|
| 78,005 |
|
|
| 23,315 |
|
Income tax expense |
| $ | - |
|
| $ | - |
|
F-21 |
Table of contents |
SummaryThe following table sets forth the significant components of the Company’s net deferred tax liabilities and assets are as follows:of the Company:
|
| December 31, 2021 |
|
| June 30, 2021 |
| ||
Deferred tax assets: |
|
|
|
|
|
| ||
Tax attribute carryforwards |
| $ | 1,247,591 |
|
| $ | 1,198,944 |
|
Valuation allowances |
|
| (1,247,591 | ) |
|
| (1,198,944 | ) |
Total |
| $ | 0 |
|
| $ | 0 |
|
|
| December 31, 2022 |
|
| June 30, 2022 |
| ||
|
|
|
|
|
|
| ||
Deferred tax assets: |
|
|
|
|
|
| ||
Net operating loss carryforwards, from |
|
|
|
|
|
| ||
US tax regime |
| $ | 895,584 |
|
| $ | 169,688 |
|
Malaysia tax regime |
|
| 1,339,169 |
|
|
| 1,259,662 |
|
Less: valuation allowance |
|
| (2,234,753 | ) |
|
| (1,429,350 | ) |
Deferred tax assets, net |
| $ | - |
|
| $ | - |
|
The Company has recorded valuation allowances for certain tax attribute carry forwards and other deferred tax assets due to uncertainty that exists regarding future realizability. If in the future the Company believes that it is more likely than not that these deferred tax benefits will be realized, the majority of the valuation allowances will be recognizedreversed in the unaudited condensed consolidated statement of operations. The Company did not have any interest and penalty provided or recognized in the income statements for periodthe six months ended December 31, 20212022 and June 30, 2021 or balance sheet as of December 31, 2021 and June 30, 2021. The Company did not have uncertainty tax positions or events leading to uncertainty tax position within the next 12 months.
NOTE 13 – COMMITMENTS AND CONTINGENCIES
As of December 31, 2021, the Group had the following contracted capital commitments:
|
| December 31, 2021 |
|
| June 30, 2021 |
| ||
|
|
|
|
|
|
| ||
For purchase of property, plant and equipment |
| $ | 800,000 |
|
| $ | 1,730,000 |
|
For acquisition of subsidiary |
|
| 6,001 |
|
|
| 6,023 |
|
Total |
| $ | 806,001 |
|
| $ | 1,736,023 |
|
NOTE 14 – LOSS PER SHARE
The Company has adopted ASC Topic No. 260, “Earnings Per Share,” (“EPS”) which requires presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures, and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. In the accompanying financial statements, basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period.
The following table sets forth the computation of basic and diluted earnings per share:
|
| Three Months Ended December 31, |
| |||||
|
| 2021 |
|
| 2020 |
| ||
|
| (Unaudited) |
|
| (Unaudited) |
| ||
Net income(loss) applicable to common shares |
| $ | (843,248 | ) |
| $ | (34,512 | ) |
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding (Basic) |
|
| 810,742,109 |
|
|
| 116,038,909 |
|
Options |
|
| - |
|
|
| - |
|
Warrants |
|
| - |
|
|
| - |
|
Weighted average common shares outstanding (Diluted) |
|
| 810,742,109 |
|
|
| 116,038,909 |
|
|
|
|
|
|
|
|
|
|
Net income(loss) per share (Basic and Diluted) |
| $ | (0.00 | )* |
| $ | (0.00 | )* |
|
| Six Months Ended December 31, |
| |||||
|
| 2021 |
|
| 2020 |
| ||
|
| (Unaudited) |
|
| (Unaudited) |
| ||
Net income(loss) applicable to common shares |
| $ | (1,665,920 | ) |
| $ | (98,792 | ) |
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding (Basic) |
|
| 810,742,109 |
|
|
| 116,038,909 |
|
Options |
|
| - |
|
|
| - |
|
Warrants |
|
| - |
|
|
| - |
|
Weighted average common shares outstanding (Diluted) |
|
| 810,742,109 |
|
|
| 116,038,909 |
|
|
|
|
|
|
|
|
|
|
Net income(loss) per share (Basic and Diluted) |
| $ | (0.00 | )* |
| $ | (0.00 | )* |
*Less than $0.01 per share
The Company has no potentially dilutive securities, such as options or warrants, currently issued and outstanding.
NOTE 15 - CAPITAL STOCK
Authorized StockRELATED PARTY TRANSACTIONS
The Company has authorized 10,000,000,000 common shares and 50,000,000 preferred shares, both with a par value of $0.001 per share. Each common share entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought.
|
| Six Months ended |
| |||||
|
| December 31, |
| |||||
|
| 2022 |
|
| 2021 |
| ||
Related party transactions: |
|
|
|
|
|
| ||
Sales to: |
|
|
|
|
|
| ||
Borneo Eco Food Sdn Bhd (#2) |
| $ | 12,181 |
|
| $ | - |
|
Rental income: |
|
|
|
|
|
|
|
|
Mr. Jack Wong (#5) |
| $ | 19,121 |
|
| $ | - |
|
Other income – Sales of wash sand to: |
|
|
|
|
|
|
|
|
Jusra Mining Merapoh Sdn Bhd (#1) |
| $ | - |
|
| $ | 12,115 |
|
Site expenses: |
|
|
|
|
|
|
|
|
Warisan Khidmat Sdn Bhd (#3) |
| $ | 7,963 |
|
| $ | - |
|
Professional services provided by: |
|
|
|
|
|
|
|
|
Warisan Khidmat Sdn Bhd (#3) |
| $ | 9,283 |
|
| $ | - |
|
Effective February 2, 2018, the Company’s Articles of Incorporation were amended to increase the authorized shares of the Company from 250,000,000 shares of common stock to 10,000,000,000 shares of common stock. A copy of the Certificate of Amendment was filed with the Nevada Secretary of State. The Form 8K announcing the increase of the authorized shares of the Company was filed with SEC on February 6, 2018.
Share Issuance
On May 10, 2021, the Company announced the Sale and Purchase Agreement to acquire the assets of biofraction plant and the right to use intellectual property license in Sabah, Malaysia from Borneo Energy Sdn Bhd, in consideration of issuance of 166,666,667 share of the Company’s stock at $0.03 per share, valued at $5,000,000. 135,666,667 shares and 31,000,000 shares were issued on May 10, 2021 and July 1, 2021, respectively. The completion of the S&P Agreement is subject to all such acts necessary, including but not limited to due diligence exercise to ascertain the valuation of the assets of the biofraction plant and the right to use the licensed intellectual property in Sabah, Malaysia.
On May 12, 2021, the Company, through its wholly-owned subsidiary GBL, entered into a Share Sale Agreement in relation to acquisition of the entire issued and paid-up share capital of Bio Resources Limited with Taipan International Limited, an unrelated third party, The Wision Project Limited (formerly known as “Borneo Resources Limited”), an unrelated third party and other individuals unrelated third parties, in consideration of issuance of 321,500,000 shares of the Company’s restricted common stock at $0.03 per share, valued at $9,645,000, and the issuance of promissory notes two-year term period a principal amount of $20,355,000. 321,500,000 shares were issued on May 12, 2021 and the promissory notes were issued on May 12, 2021. The face value (principal) amount of $20,355,000 is repayable by May 12, 2023, and bearing zero coupon interest. The promissory note is priced at $16,290,550 considering the current market interest rate. This acquisition is currently in progress and the completion of the S&P Agreement is subject to all such acts necessary, including but not limited to auditing and due diligence exercise to ascertain the valuation of Bio Resources Limited.
On June 4, 2021, the Company issued a total of 65,900,000 restricted common shares for US$1,647,500 at US$0.025 per share to six non-US shareholders, who Borneo Oil Berhad and Victor Subbrayan Paul are existing shareholders
On June 9, 2021, the Company entered into a Settlement of Debt Agreement (the “Debt Settlement Agreement”) with the Company’s creditors Beijing Changxin Wanlin Technology Co., Ltd, Federal Mining Resources Ltd, Federal Capital Investment Limited and Yorkshire Capital Limited (collectively the “Creditors”) to convert a total of USD 1,945,096 of the Company’s accounts payable to the Creditors into equity by increasing the share capital by means of a subscription for 64,836,533 new restricted shares of the Company’s common stock at a subscription price of $0.03 per share. As set out in the Debt Settlement Agreements, the new restricted shares for settlement of the account payable to Beijing Changxin Wanlin Technology Co., Ltd, Federal Mining Resources Ltd and Federal Capital Investment Limited issued to their nominee Internet.com Ltd on June 9, 2021.
On June 10, 2021, the Company issued a total of 4,690,500 restricted common shares at US$0.03 per share to each of the two directors, of which 2,095,233 restricted common shares to Balakrishnan B S Muthu and 2,595,267 restricted common shares to Chen Ching to serve as a director of the Company for a one-year term (from July 1, 2020 to June 30, 2021). An aggregate of $140,715 for this transaction was recognized as stock-based compensation under selling, general and administrative expenses for the year ended June 30, 2021.
On June 10, 2021, the Company issued a total of 13,009,500 restricted common shares at US$0.03 per share to five consultants under the Consultant Agreements, of which 3,695,233 restricted common shares to Vincent Yong Tuck Seng, 3,695,233 restricted common shares to Lai Kui Shing Andy, 2,095,233 restricted common shares to Chan Hoi Kwong Paul, 2,095,233 restricted common shares to Sylvia Chan and 1,428,568 restricted common shares to Ng Tung to serve as a consultant of the Company for a one-year term (from June 10, 2021 to June 9, 2022). An aggregate of $390,285 for this transaction, $34,716 was recognized as stock-based compensation according the service period under selling, general and administrative expenses for the year ended June 30, 2021. Of the aggregate $390,285 for this transaction, $191,222 and nil were recognized for the six months ended December 31, 2021 and 2020, respectively. Also, $95,094 and nil were recognized for the three months ended December 31, 2021 and 2020, respectively.
On June 18, 2021, the Company issued a total of 58,100,000 restricted common shares for US$1,452,500 at US$0.025 per share to twenty-four non-US shareholders.
There were 810,742,109 and 779,742,109 common shares issued and outstanding at December 31, 2021 and June 30, 2021 respectively.
There are no preferred shares outstanding. The Company has issued no authorized preferred shares. The Company has no stock option plan, warrants, or other dilutive securities.
NOTE 16 - RELATED PARTY TRANSACTIONS
Related party transaction |
| Six months ended |
| |||||
|
| December 31, |
| |||||
|
| 2021 |
|
| 2020 |
| ||
|
|
|
|
|
|
| ||
Other income - Sales of wash sand to: |
|
|
|
|
|
| ||
Jusra Mining Merapoh Sdn Bhd (#1) |
| $ | 12,115 |
|
| $ | 0 |
|
Professional services provided by: |
|
|
|
|
|
|
|
|
Federal Capital Investment Limited (#2) |
|
| 12,000 |
|
|
| 0 |
|
Related party transaction |
| Three months ended |
| |||||
|
| December 31, |
| |||||
|
| 2021 |
|
| 2020 |
| ||
|
|
|
|
|
|
| ||
Other income - Sales of wash sand to: |
|
|
|
|
|
| ||
Jusra Mining Merapoh Sdn Bhd (#1) |
| $ | 25 |
|
| $ | 0 |
|
Professional services provided by: |
|
|
|
|
|
|
|
|
Federal Capital Investment Limited (#2) |
|
| 6,000 |
|
|
| 0 |
|
Related party balances |
|
|
| |||||
|
| December 31, |
| |||||
|
| 2021 |
|
| 2020 |
| ||
|
|
|
|
|
|
| ||
Deposits paid for acquisition of property, plant and equipment |
|
|
|
|
|
| ||
- Intellectual property license of Borneo Energy Sdn Bhd (#3) (note 7) |
| $ | 5,000,000 |
|
| $ | 0 |
|
Related party balances: |
|
| ||||||
|
| As of |
| |||||
|
| December 31, 2022 |
|
| June 30, 2022 |
| ||
Trade receivables |
|
|
|
|
|
| ||
Borneo Eco Food Sdn Bhd (#2) |
| $ | 7,824 |
|
| $ | 5,933 |
|
|
|
|
|
|
|
|
|
|
Deposits paid for acquisition of property, plant and equipment |
|
|
|
|
|
|
|
|
Borneo Energy Sdn Bhd (#2) |
| $ | - |
|
| $ | 5,000,000 |
|
|
|
|
|
|
|
|
|
|
Trade Payables |
|
|
|
|
|
|
|
|
Warisan Khidmat Sdn Bhd (#3) |
| $ | 1,590 |
|
| $ | 7,253 |
|
|
|
|
|
|
|
|
|
|
Advanced from related parties |
|
|
|
|
|
|
|
|
Advanced from BOG (#4) |
| $ | 718,168 |
|
| $ | 555,527 |
|
Advanced from Borneo Energy Sdn Bhd (#2) |
| $ | 15,696 |
|
| $ | - |
|
Taipan International Limited (#6) |
| $ | 119,153 |
|
| $ | - |
|
Mr. Jack Wong (#5) |
| $ | 40,028 |
|
| $ | - |
|
|
|
|
|
|
|
|
|
|
Advanced to related party |
|
|
|
|
|
|
|
|
Vetrolysis Limited (#7) |
| $ | 100 |
|
| $ | - |
|
|
|
|
|
|
|
|
|
|
Advanced from Director |
|
|
|
|
|
|
|
|
Mr. Carl M. Craven |
| $ | 22,737 |
|
| $ | - |
|
(#1) Lamax Gold Limited (“LGL”) holdingheld 15% equity interests of GBLChampmark Sdn Bhd which was disposed on October 20, 2021 to Verde Resources Asia Pacific Limited (formerly known as Gold Billion Global Limited) and is also the major shareholder of Jusra MingingMining Merapoh Sdn Bhd , .Bhd.
(#2) One of the directors of Federal Capital Investment Limited, Mr. Wu Ming Ding, has resigned as director of the Company effective February 20, 2021.
(#3) Borneo Oil Berhad (“BOB”) is ultimate holding company of Borneo Eco Food Sdn. Bhd. and Borneo Energy Sdn Bhd, and holding 23.0%held 16.1% and 23.0%22.8% of the Company’s issued and outstanding common stock as of December 31, 20212022 and February 14,June 30, 2022, respectively.
(#3) Warisan Khidmat Sdn. Bhd. is a company whose shareholdings is entirely held by Director of VRSB
(#4) Borneo Oil and Gas Corporation Sdn Bhd (“BOG”) is a wholly owned subsidiary of Borneo Oil Berhad (“BOB”) (holding 16.1% and 22.8% of the Company’s issued and outstanding common stock as of December 31, 2022 and June 30, 2022, respectively). The advances are related to ordinary business transactions and bear no interest or collateral, repayable and renewable under normal business advancement terms.
(#5) Mr. Jack Wong is the President and Chief Executive of the Company effective October 1, 2022.
(#6) Taipan International Limited is one of the shareholders of the Company, and held 33.5% of the Company’s issued and outstanding common stock as of December 31, 2022.
(#7) Encik Anuar bin Ismail, an indirect significant shareholder, is a director of Vetrolysis Limited.
Apart from the transactions and balances detailed above and 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-22 |
Table of contents |
NOTE 1716 - GOING CONCERN AND LIQUIDITY CONSIDERATIONSCONCENTRATIONS OF RISK
The accompanying condescend consolidatedCompany is exposed to the following concentrations of risk:
(a) Major customers
For the three and six months ended December 31, 2022 and 2021, there was no single customer whose revenue exceeded 10% of the revenue.
(b) Economic and political risk
The Company’s major operations are conducted in U.S.A. and Malaysia. Accordingly, the political, economic, and legal environments in U.S.A. and Malaysia, as well as the general state of U.S.A. and Malaysia’s economy may influence the Company’s business, financial statements have been prepared assumingcondition, and results of 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 will continue as a going concern, which contemplatescould post the realizationsame amount of assetsprofit for two comparable periods and because of the liquidationfluctuating exchange rate actually post higher or lower profit depending on exchange rate of liabilitiesHKD converted to US$ on that date. The exchange rate could fluctuate depending on changes in the normal course of business. political and economic environments without notice.
NOTE 17 - COMMITMENTS AND CONTINGENCIES
As of December 31, 2021,2022, the Company had suffered recurring net losses and records an accumulated deficit of $7,562,240. These conditions raise substantial doubt about the Company’s abilityhas commitment to continue as a going concern. The Company intends to fund operations through debt and equity financing arrangements.
The ability of the Company to survive is dependent upon, among other things, obtaining additional financing to continue operations, and development of its business plan.
In response to these problems, management intends to raise additional funds through public or private placement offerings, and related party loans.
No assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactoryissue restricted common shares to the Company. Even iffollowing service providers on or before December 31, 2023 for services to be performed pursuant to the Company is able to obtain additional financing, if needed, it may contain undue restrictionsService Agreements signed as disclosed in Note 13 on its operations, in the case of debt financing, or cause substantial dilution for its stock holders, in the case of equity financing.
In March 2020, the World Health Organization declared the outbreak of COVID-19 as a global pandemic, which continues to spread around the world. There is significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the Malaysia’s and global economy. While it is difficult to estimate the financial impact of COVID-19 on the Company’s operations, management believes that COVID-19 could have a material impact on its financial results at this time.
These consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets and liabilities that may result in the Company not being able to continue as a going concern.before December 31, 2023:
Number of shares to be issued | ||||
EMGTA LLC | 375,000 | |||
YM Tengku Chanela Jamidah YAM Tengku Ibrahim | 500,000 | |||
Steven Sorhus | 500,000 | |||
1,375,000 |
As of December 31, 2022, the Company has no material contingencies.
NOTE 17 - SUBSEQUENT EVENTS
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 December 31, 2022, up through the date the Company issued the audited unaudited condensed consolidated financial statements.
F-23 |
Table of |
NOTE 18 – SEGMENT INFORMATION
The Company’s segments are business units that offer different products and services and are reviewed separately by the chief operating decision maker (the “CODM”), or the decision-making group, in deciding how to allocate resources and in assessing performance. The Company’s CODM is the Company’s Chief Executive Officer.
For the three months ended December 31, 2021:
|
| Gold mineral mining |
|
| Distribution of THC-free cannabinoid (CBD) products |
|
| Production and distribution of renewable commodities |
|
| Holding property |
|
| Corporate unallocated |
|
| Consolidated |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Revenue |
| $ | 0 |
|
| $ | 0 |
|
| $ | 0 |
|
| $ | 0 |
|
| $ | 0 |
|
| $ | 0 |
|
Cost of revenue |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
Gross profit |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
Selling, general & administrative expenses |
|
| (66,093 | ) |
|
| (1,755 | ) |
|
| (17,640 | ) |
|
| (92,254 | ) |
|
| (181,363 | ) |
|
| (359,105 | ) |
Loss from operations |
|
| (66,093 | ) |
|
| (1,755 | ) |
|
| (17,640 | ) |
|
| (92,254 | ) |
|
| (181,363 | ) |
|
| (359,105 | ) |
Interest expenses |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| (484,168 | ) |
|
| (484,168 | ) |
Other income |
|
| 25 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 25 |
|
Loss before income tax |
|
| (66,068 | ) |
|
| (1,755 | ) |
|
| (17,640 | ) |
|
| (92,254 | ) |
|
| (665,531 | ) |
|
| (843,248 | ) |
Income tax |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
Net loss |
| $ | (66,068 | ) |
| $ | (1,755 | ) |
| $ | (17,640 | ) |
| $ | (92,254 | ) |
| $ | (665,531 | ) |
| $ | (843,248 | ) |
For the six months ended December 31, 2021:
|
| Gold mineral mining |
|
| Distribution of THC-free cannabinoid (CBD) products |
|
| Production and distribution of renewable commodities |
|
| Holding property |
|
| Corporate unallocated |
|
| Consolidated |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Revenue |
| $ | 0 |
|
| $ | 0 |
|
| $ | 0 |
|
| $ | 0 |
|
| $ | 0 |
|
| $ | 0 |
|
Cost of revenue |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
Gross profit |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
Selling, general & administrative expenses |
|
| (107,376 | ) |
|
| (1,755 | ) |
|
| (17,640 | ) |
|
| (102,742 | ) |
|
| (493,588 | ) |
|
| (723,101 | ) |
Loss from operations |
|
| (107,376 | ) |
|
| (1,755 | ) |
|
| (17,640 | ) |
|
| (102,742 | ) |
|
| (493,588 | ) |
|
| (723,101 | ) |
Interest expenses |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| (954,934 | ) |
|
| (954,934 | ) |
Other income |
|
| 12,115 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 12,115 |
|
Loss before income tax |
|
| (95,261 | ) |
|
| (1,755 | ) |
|
| (17,640 | ) |
|
| (102,742 | ) |
|
| (1,448,522 | ) |
|
| (1,665,920 | ) |
Income tax |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
|
|
|
Net loss |
| $ | (95,261 | ) |
| $ | (1,755 | ) |
| $ | (17,640 | ) |
| $ | (102,742 | ) |
| $ | (1,448,522 | ) |
| $ | (1,665,920 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2021 |
|
| 66,732 |
|
|
| 150,975 |
|
|
| 0 |
|
|
| 465,267 |
|
|
| 32,882,177 |
|
|
| 33,565,151 |
|
As of June 30, 2021 |
| $ | 97,952 |
|
|
| 0 |
|
| $ | 0 |
|
| $ | 0 |
|
|
| 32,961,202 |
|
|
| 33,059,154 |
|
The Company conducts its Gold Mineral Mining operation through CSB. The expenses incurred were consisting principally of management services and its major operation is located in Malaysia.
The Company conducts business in the distribution of THC-free cannabinoid (CBD) products through Verde Life Inc. which incorporated on the State of Oregon, U.S.A. Its major operation is located in U.S.A.
The Company conducts business in production and distribution of renewable commodities through Global Renewables Sdn. Bhd. which incorporated on Malaysia. Its major operation is located in Malaysia.
The Company formed VEL on August 10, 2021, for the purpose of holding property in Missouri. Its major operation is located in U.S.A.
NOTE 19 - SUBSEQUENT EVENTS
On January 17, 2022, the Company formed a wholly owned subsidiary, Verde Resources (Malaysia) Sdn Bhd, a company incorporated under the laws of the Malaysia, for the purpose of conducting consultation services and distribution of renewable agricultural commodities.
Under the terms of the Share Sale Agreement on May 12, 2021 for the acquisition of the entire issued and paid-up share capital of Bio Resources Limited (“BRL”), the acquisition shall be satisfied by the issuance of 321,500,000 shares of the Company’s restricted Common Stock, par value $0.001 per share (the “Common Stock”) at a price per share of $0.03, and the issuance of promissory notes to 17 lenders (the “Lenders”) each with a two-year term period for the agreed principal amount of $20,355,000 (collectively the “Notes”).
On January 20, 2022, the Company has reached a mutual agreement with the Lenders of the Notes to enter into a Supplement to Promissory Note, with each Lender, to convert the total principal loan amount of $20,355,000 into shares of the Company’s restricted Common Stock priced at $0.0611 per share, which represents the last ninety (90) days’ volume weighted average price (VWAP) as of the market closing of January 19, 2022. The Company and the Lenders further agreed that the actual date for the allotment and issue of new shares of the Company’s restricted Common Stock shall be confirmed in a subsequent written agreement.
On February 10, 2022, the Company, through Verde Estates LLC, a limited liability company incorporated in the State of Missouri, which is a wholly-owned subsidiary of the Company’s wholly-owned subsidiary, Verde Renewables, Inc., entered into a Commercial Lease Agreement and Option to Purchase (the “Lease Agreement”) to rent a 24-acre property in La Belle from Jon Neal Simmons and Betty Jo Simmon (the “Landlord”) in order to kickstart carbon farming with biochar in Missouri. Under the Lease Agreement, the term of the lease will be for a period of two (2) years and the Company will have the right to renew the lease with a total of three renewal periods with each term being two years. The base rent is ten thousand dollars ($10,000) for the term, payable on the commencement of the Lease Agreement. The Lease Agreement also grants the Company the exclusive right and option to purchase the premises together with all the right title and interest from the Landlord for a consideration of four hundred ninety thousand dollar ($490,000) at any time during the two years period of the lease term. The Company has paid to the Landlord a security deposit of the sum of two hundred forty thousand dollars ($240,000) prior to the execution of the Lease Agreement. If the Company does not exercise the option to renew the lease or the option to purchase the premises from the Landlord, the security deposit shall be returned to the Company.
The Company has evaluated subsequent events from the balance sheet date through the date the financial statements were issued and determined that there are no significant material subsequent items which are required to be disclosed.
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Forward-Looking Statements
Except for historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve risks and uncertainties, including, among other things, statements regarding our business strategy, future revenues and anticipated costs and expenses. Such forward-looking statements include, among others, those statements including the words “expects,” “anticipates,” “intends,” “believes” and similar language. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed herein as well as in the “Description of Business – Risk Factors” section in our Annual Report on Form 10-K, as filed onNovember 12, 2021.4, 2022. You should carefully review the risks described in our Annual Report and in other documents we file from time to time with the Securities and Exchange Commission. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report. We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances after the date of this document.
Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements.
All references in this Form 10-Q to the “Company,” “Verde Resources,” “we,” “us,” or “our” are to Verde Resources, Inc.
Business Overview
Verde Resources, Inc. (the “Company” or “VRDR”) was incorporated in the State of Nevada on April 22, 2010.
We currently operate in two lines of business: (i) gold exploration and mining through Champmark Sdn. Bhd., a Malaysian corporation (“CSB”); and (ii) production and distribution of renewable commodities through Verde Resources (Malaysia) Sdn. Bhd., a Malaysian corporation. We intend to develop operations in the distribution of THC-free cannabinoid products through Verde Life Inc., an Oregon corporation. The Company is also engaged in the investment opportunities in other non-mining areas including the bioenergy industry and the food & beverage sector.
The Company is a Nevada corporation that conducts business operations in Pahang Malaysia through Champmark Sdn Bhd (“CSB”), a privatelyprivate limited liability company incorporated in Malaysia, which isand a deemed subsidiary under the management control of our 100% subsidiary GBL.
On October 25, 2013, we entered into an Assignment Agreement For the Assignment of Management Right in MerapohVerde Resources Asia Pacific Limited (“VRAP”) (formerly known as Gold Mines in Malaysia (“Assignment Agreement”) with Federal Mining Resources Limited (“FMR”)Billion Global Limited), a company incorporated under the laws of the British Virgin Islands.
FMR owns 85% equity interest in CSB,The following diagram illustrates our current corporate structure:
On July 15, 2022, the Company issued a privately limited liability company incorporated in Malaysia. CSB istotal of 1,500,000 restricted common shares at US$0.155 per share to two consultants pursuant to two consultant agreements; 1,000,000 restricted common shares were issued to Gary F. Zimmer and 500,000 restricted common shares were issued to Lisa Leilani Zimmer Durand, to serve as consultants to the Mining ContractorCompany. An aggregate of $232,500 was recognized as stock-based compensation under general and administrative expenses during the period ended September 30, 2022.
On October 1, 2022, Balakrishnan B S Muthu resigned from his position as President of the Mining Lease for Site IV-1 at the Merapoh Gold Mine under the Contract for Work with MMC Corporation Berhad, the Permit HolderCompany. Balakrishnan B S Muthu shall remain as Treasurer, Chief Financial Officer, General Manager and Director of Verde and Liang Wai Keen shall remain as Secretary of the Mining Lease.Company.
Under the termsMr. Jack Wong has been appointed President and Chief Executive Officer of the Assignment Agreement, FMR assigned its management rightsCompany effective October 1, 2022. Mr. Wong was the sole shareholder of CSB’s mining operation in the Mining Lease toThe Wision Project Sdn Bhd (“Wision”), a subsidiary which was acquired by the Company through its wholly-ownedwholly owned subsidiary Gold Billion Global LimitedVerde Resources (Malaysia) Sdn Bhd (“GBL”VRSB”), in exchange pursuant to Share Sale Agreement (“SSA”) signed on March 23, 2022 for 80,000,000 shares of the Company’s common stock, which constituted 95.26% of our issued and outstanding capital stock as of and immediately after the consummation of the acquisition.
GBL was formed on February 7, 2013, by the Board of Directors of FMR to monitor the CSB operation. The acquisition of one hundred percent 100% of the issued and outstanding capital stock of GBL was agreed upon onpaid-up ordinary shares in Wision from Mr. Wong.
On October 18, 2013, and completed on October 25, 2013, subject to1, 2022, the approval of theCompany’s Board of Directors adopted an employment and the auditcompensation agreement for Mr. Wong (the “Agreement”). The Agreement provides for an employment term of GBL.
On February 17, 2014, we entered into a Supplementary Agreement to the Assignment Agreementfive (5) years. Mr. Wong will receive an annual salary of $287,650 inclusive of any tax payable as required by law. The Company will also provide Mr. Wong an executive vehicle, executive housing, health benefits, and completed a reverse acquisition of GBL pursuant to the Supplementary Agreement. As a result of the acquisition,equity incentives upon the Company holds 100%adopting an equity interest in GBL and 85% variable interest in CSB. Our consolidated subsidiaries include GBL being our wholly-owned subsidiary and 85% of CSB being a variable interest entity (VIE) and deemed subsidiary of GBL. On April 1, 2014, GBL purchased 85% equity interest of CSB, and CSB became indirect subsidiary of the Company.
On May 10, 2021, the Company announced the Sale and Purchase Agreement to acquire the assets of biofraction plant and the right to use intellectual property license in Sabah, Malaysia from Borneo Energy Sdn Bhd, in consideration of issuance of 166,666,667 share of the Company’s stock at $0.03 per share, valued at $5,000,000. 135,666,667 shares and 31,000,000 shares were issued on May 10, 2021 and July 1, 2021, respectively. The completion of the S&P Agreement is subject to all such acts necessary, including but not limited to due diligence exercise to ascertain the valuation of the assets of the biofraction plant and the right to use the licensed intellectual property in Sabah, Malaysia. The Company also announced the Share Sale Agreement on May 12, 2021 for the acquisition of the entire issued and paid-up share capital of Bio Resources Limited with Taipan International Limited, an unrelated third party, The Wision Project Limited (formerly known as “Borneo Resources Limited”), an unrelated third party, and other individuals unrelated third parties, in consideration of issuance of 321,500,000 shares of the Company’s restricted common stock at $0.03 per share, valued at $9,645,000, and the issuance of promissory notes with two-year term period with a principal amount of $20,355,000. 321,500,000 shares were issued on May 12, 2021 and the promissory notes were issued on May 12, 2021. The face value (principal) amount of $20,355,000 is repayable by May 12, 2023, and bearing zero coupon interest. The promissory note is priced at $16,290,550 considering the current market interest rate. This acquisition is currently in progress and the completion of the S&P Agreement is subject to all such acts necessary, including but not limited to auditing and due diligence exercise to ascertain the valuation of Bio Resources Limited.incentive plan.
Table of Contents |
On June 9, 2021,October 26, 2022, the Company entered into a Settlement of Debt Agreementcorporate consulting services agreement (the “Debt Settlement“Consulting Agreement”) for investor communication and public relations services with the Company’s creditors Beijing Changxin Wanlin Technology Co., Ltd, Federal Mining Resources Ltd, Federal Capital Investment Limited and Yorkshire Capital Limited (collectively the “Creditors”Dutchess Group LLC (“DGL”). Pursuant to convert a total of USD 1,945,096 of the Company’s accounts payable to the Creditors into equity by increasing the share capital by means of a subscription for 64,836,533 new restricted shares of the Company’s common stock at a subscription price of $0.03 per share. As set out in the Debt Settlement Agreements, the new restricted shares for settlement of the account payable to Beijing Changxin Wanlin Technology Co., Ltd, Federal Mining Resources Ltd and Federal Capital Investment Limited issued to their nominee Internet.com Ltd on June 9, 2021.
On June 11, 2021, GBL entered into a Sale and Purchase of Assets Agreement (the “SPA Agreement”) to purchase a factory site from a Malaysia company Segama Ventures Sdn Bhd (“Segaman Ventures”), an unrelated third party, in order to expand the Company’s biofraction plant in Malaysia. Under the terms of the SPAConsulting Agreement, the acquisition is satisfied by cash payment of $1,600,000 in two instalments of $800,000 each, one payment upon signing the SPA Agreement, and the second payment within three (3) months from the date of the SPA Agreement. A deposit of $800,000 was paidCompany agreed to Segaman Ventures on June 10, 2021. This acquisition is currently in progress and the completion of the S&P Agreement is subject to all such acts necessary, including but not limited to due diligence exercise to ascertain the valuation of factory site. The consideration shall be refundable if the transaction fails to complete.
On June 17, 2021, the Company through its prospective indirect subsidiary Bio Resources Limited (“BRL”), a company incorporated under the laws of the Labuan, entered into a Shares Sale Agreement with Hermalisa Binti Mohamad Tahir (“Hermalisa”), a company incorporated under the laws of the Malaysia, to acquire the entire issued and paid-up share capital of Global Renewables. Under the terms of the Shares Sale Agreement, the consideration for the acquisition shall be satisfied in full by the payment of Malaysia Ringgit MYR 25,000 upon the execution of the Shares Sale Agreement. The acquisition of Global Renewables was subject to the successful completion of the acquisition of the entire issued and paid-up share capital of BRL. Therefore, the acquisition of Global Renewables will dependent upon the successful acquisition of BRL.
On June 18, 2021, GBL entered into a Shares Sale Agreement with Lamax Gold Limited (“LGL”), a company incorporated under the laws of the British Virgin Islands, in relation to acquisition of the remaining 15% of the issued and paid-up share capital of CSB. Prior to this acquisition, GBL owned 85% equity in CSB. Upon completion of the acquisition, GBL would own the entire issued and paid-up share capital of CSB. Under the terms of the Shares Sale Agreement, the consideration for the acquisition shall be satisfied in full by the payment of Malaysia Ringgit MYR 150,000 ($36,130) upon the execution of the Shares Sale Agreement. This acquisition is currently in progress and the completion of the S&P Agreement is subject to all such acts necessary, including but not limited to auditing and due diligence exercise to ascertain the valuation of 15% of the issued and paid-up share capital of CSB. A deposit of MYR 150,000 ($36,130) was paid to LGL on June 21, 2021. The consideration shall be refundable if the transaction fails to complete.
Verde Renewables, Inc. (“VRI”) was incorporated on August 10, 2021, in the State of Missouri, U.S.A. The major operation of VRI will include management of a processing and packaging facility to process organic bio-waste into sources of renewable commodities using its biofraction technology, and distribution of biochar, wood vinegar and bio-gas. VRI is wholly owned by the Company.
Verde Estates LLC (“VEL”) was incorporated on August 10, 2021, in the State of Missouri, U.S.A. VEL is formed for the purpose of holding property in Missouri. VEL is wholly owned by VRI.
Verde Life Inc. (“VLI”) was incorporated on November 15, 2021, in the State of Oregon, U.S.A. The major operation of VLI will include conducting business in the distribution of THC-free cannabinoid (CBD) products. VLI is wholly owned by the Company.
On January 17, 2022, the Company formed a wholly owned subsidiary, Verde Resources (Malaysia) Sdn Bhd, a company incorporated under the laws of the Malaysia, for the purpose of conducting consultation services and distribution of renewable agricultural commodities.
On January 20, 2022, the Company has reached a mutual agreement to enter into a Supplement to Promissory Note with each of the 17 lenders (“Lenders”) of the promissory notes that were issued on May 12, 2021, to convert the total principal loan amount of $20,355,000 intoissue 1,500,000 shares of the Company’s restricted common stock priced at $0.0611 per share, which representsto DGL within forty-five (45) days of signing the last ninety (90) days’ volume weighted average price (VWAP) asConsulting Agreement.
On November 8, 2022, Jack Wong has been appointed Chief Executive Officer of the market closingCompany’s wholly owned subsidiaries Verde Renewables, Inc and Verde Life Inc.
On November 22, 2022, the Company through its wholly-owned subsidiary Verde Life Inc. (“VLI”), a company incorporated in the State of January 19, 2022.Oregon, entered into a Product Distribution Agreement (the “Agreement”) with Country Farms Sdn Bhd (“CF”), a company incorporated in Malaysia and a wholly-owned subsidiary of Berjaya Corporation Berhad, to grant CF with the exclusive right to distribute white-label CBD products from VLI to its customers in Malaysia. Under the Agreement, CF shall pay VLI a deposit of $200,000 upon execution of this Agreement. Upon submission of the first purchase order, CF shall pay 50% of the purchase order value to VLI. Prior to any product shipment, CF shall pay VLI the balance 50% of the purchase order value less an initial deposit of $70,000. The Company and the Lenders further agreed that the actual dateremaining deposit of $130,000 shall be retained for the allotmentexclusivity and issuesubsequent orders. The term of newthe Agreement will commence on November 22, 2022 for a period of three (3) years.
On November 30, 2022, the Company through its wholly-owned subsidiary Verde Renewables, Inc. (“VRI”), a company incorporated in the State of Missouri, U.S.A., entered into a Services Agreement (the “Agreement”) with Y M Tengku Chanela Jamidah Y A M Tengku Ibrahim to engage her as its Director of Strategic Initiatives to promote and make introductions for the benefit of advancing the Company’s business and interests amongst her networks as designated in the Agreement. Under the Agreement, the Company will pay Y M Tengku Chanela Jamidah Y A M Tengku Ibrahim by the issuance of 1,000,000 shares of the Company’s restricted common stock, shallpar value $0.001 per share (the “Common Stock”) in two tranches of 500,000 shares each on or before December 31, 2022 and December 31, 2023 respectively. The term of the Agreement will be confirmed infor a subsequent written agreement.
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Corporate History and Structure
Verde Resources, Inc. was incorporatedfixed period of twenty-four (24) months commencing on April 22, 2010, in the State of Nevada, U.S.A. The following persons were appointed to serve as directors and to assume the responsibilities of officers on October 17, 2013. Mr. Wu Ming Ding, as President and Director; Mr. Balakrishnan B S Muthu as Treasurer Chief Financial Officer, General Manager and Director; and Mr. Liang Wai Keen as Secretary. Mr. Wu and Mr. Muthu were added to the Board of Directors.November 30, 2022.
On AprilDecember 1, 2014, the Board of Directors of Gold Billion Global Limited (“GBL”) notified Federal Mining Resources Limited (“FMR”) upon the decision to exercise the right of option to purchase 85% equity interest of Champmark Sdn Bhd (“CSB”) under Management Agreement Section 3.2.4 dated July 1, 2013, between GBL and FMR. This acquisition was completed on April 1, 2014, with consideration of US$1, and GBL then became 85% shareholder of CSB.
Effective February 20, 2021, Mr. Wu Ming Ding resigned all of his positions as President and Director of2022, the Company, through its wholly-owned subsidiary VRI, entered into a Services Agreement (the “Agreement”) with Mr. Balakrishnan B S Muthu being appointed PresidentSteven Sorhus to fill the vacancy created. Effective February 20, 2021, Mr. Chen Ching was appointed Directorengage him as its Financial Controller to prepare monthly financial reports and financial projections, and oversee daily accounting practices of the Company and its subsidiaries as designated in the entire BoardAgreement. Under the Agreement, the Company will pay Steven Sorhus by the issuance of Directors now consists of Mr. Balakrishnan B S Muthu and Mr. Chen Ching.
800,000 shares of the
Effective February 2, 2018, the Company’s Articles of Incorporation were amended to increase the authorizedCompany from 250,000,000 shares ofCompany’s restricted common stock, to 10,000,000,000par value $0.001 per share (the “Common Stock”) in two tranches of 300,000 shares of common stock. A copyon or before December 31, 2022 and 500,000 shares on or before December 31, 2023. The term of the CertificateAgreement will be for a fixed period of Amendment was filedtwenty-five (25) months commencing on December 1, 2022.
On December 1, 2022, the Company, through its wholly-owned subsidiary VRI, entered into a Services Agreement (the “Agreement”) with EMGTA LLC (“EMGTA”). Under the Nevada SecretaryAgreement, EMGTA will provide services to develop business plan and marketing strategy to facilitate business growth, and identify new customers and markets for the Company. The Company will pay EMGTA by the issuance of State. The Form 8K announcing the increase of the authorized750,000 shares of the Company was filed with SECCompany’s restricted common stock, par value $0.001 per share (the “Common Stock”) in two tranches of 375,000 shares each on February 6, 2018.
Effective Marchor before December 31, 2021, Mr. Carl M. Craven was appointed Director2022 and December 31, 2023 respectively. The term of the Company and the entire BoardAgreement will be for a fixed period of Directors now consists of Mr. Balakrishnan B S Muthu, Mr. Chen Ching and Mr. Carl M. Craven. The Form 8-K announcing the change in officers and directors were filed with SECtwenty-five (25) months commencing on AprilDecember 1, 2021.
The following diagram illustrates our current corporate structure:
According to ASC 810-05-08 A, CSB is a deemed subsidiary of GBL where GBL controls the Board of Directors of CSB, rights to receive future benefits and residual value, and obligation to absorb loss and finance for CSB. GBL has the power to direct the activities of CSB that most significantly impact CSB’s economic performance and the obligation to absorb losses of CSB that could potentially be significant to the CSB or the right to receive benefits from CSB that could potentially be significant to CSB. GBL is the primary beneficiary of CSB because GBL can direct the activities of CSB through the common directors and 85% shareholder FMR. Under 810-23-42, 43, it is determined that CSB is de-facto agent of the principal GBL and so GBL will consolidate CSB from July 1, 2013. On April 1, 2014, GBL purchased 85% equity interest of CSB, and CSB became indirect subsidiary of the Company.2022.
On June 18, 2021, GBLDecember 15, 2022, the Company entered into a Shares SaleServices Agreement (the “Agreement”) with Lamax Gold Limited (“LGL”),Looi Pei See to engage her as a company incorporated underconsultant to develop the lawsretail markets for the Company’s products and services in Malaysia and Singapore. The Company will pay Looi Pei See by the issuance of 1,140,000 shares of the British Virgin Islands, in relation to acquisition of the remaining 15% of the issued and paid-upCompany’s restricted common stock, par value $0.001 per share capital of CSB. Prior to this acquisition, GBL owned 85% equity in CSB. Upon completion of the acquisition, GBL would own the entire issued and paid-up share capital of CSB. Under the terms of the Shares Sale Agreement, the consideration for the acquisition shall be satisfied in full by the payment of Malaysia Ringgit MYR 150,000 upon the execution of the Shares Sale Agreement. This acquisition is currently in progress and the completion of the S&P Agreement is subject to all such acts necessary, including but not limited to auditing and due diligence exercise to ascertain the valuation of 15% of the issued and paid-up share capital of CSB. A deposit of MYR 150,000 ($36,130) was paid to LGL(the “Common Stock”) on June 21, 2021. The consideration shall be refundable if the transaction fails to complete.
On August 10, 2021, the Company formed a wholly owned subsidiary, Verde Renewables, Inc., for the purpose of conducting business in Missouri (using palm waste to create biochar and related products). Another entity, Verde Estates, LLC, was also formed on August 10, 2021 to own property in Missouri. Verde Estates, LLC is a wholly owned branch of Verde Renewables, Inc.
On November 15, 2021, the Company formed a wholly owned subsidiary, Verde Life Inc., an Oregon corporation for the purpose of conducting business in the distribution of THC-free cannabinoid products.
On January 17, 2022, the Company formed a wholly owned subsidiary, Verde Resources (Malaysia) Sdn Bhd, a company incorporated under the laws of the Malaysia, for the purpose of conducting consultation services and distribution of renewable agricultural commodities.
Contractual Arrangements
Our exploration and mining business is currently provided through contractual arrangements with CSB through our wholly-owned subsidiary GBL.
CSB, the VIE of GBL, sells gold minerals directly to the registered gold trading company in Malaysia. We have been and are expected to continue to be dependent on our VIE to operate our exploration and mining business. GBL has entered into contractual arrangements with its VIE, which enable us to exercise effective control over the VIE, receive substantially all of the economic benefits from the VIE, and have the option to purchase equity interests in the VIE.
On July 1, 2013, the Company’s subsidiary GBL entered into a series of agreements (“VIE agreements”) with FMR and details of the VIE agreements are as follows :
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With the above agreements, GBL controls CSB as the primary beneficiary and the operating results of the VIE was included in the condensed consolidated financial statements.
CSB holds the operating right to Merapoh Gold Mine (the “Mine”) with all regulatory and government operating licenses in Malaysia.
On April 1, 2014, GBL purchased 85% equity interest of CSB, and CSB became indirect subsidiary of the Company.
On June 18, 2021, GBL entered into a Shares Sale Agreement to acquire the remaining 15% of the issued and paid-up share capital of CSB. GBL would own the entire issued and paid-up share capital of CSB upon completion of the acquisition.or before December 31, 2022.
Stage of Operation
The Company does not own any title and/or concession right in any mines. The Company is undertaking natural mineral resource extraction management services.
The Company has negotiated with Malaysia state agency PKNP on a 2-year lease for a new mining location that is about 5 km from the current Merapoh mine site and is currently awaiting clearance approval from Malaysia Forest Department. For the period between January 2021 to December 2021, there was no production at the Merapoh Gold Mine. The objective of the Company is to improve the productivity at the new mine to ensure that the operation will be carried out effectively and efficiently at minimum cost.
Current Mining Property and Location
Merapoh Gold Mine (the “Mine”)
The Merapoh Gold Mine is located in northern Pahang, with convenient road access through Kelantan directly to mine site and is about 400 kilometers away from Kuala Lumpur.
Current State of Exploration:
As of the date of this report, the Merapoh Gold Mine property is without significant known reserves.
The Merapoh Gold Mine commenced exploratory operation in alluvia mining and achieved its first gold pour in July 2011. Through the years of operation, the Company has performed ongoing exercises to improve upon the matching of processing method with the types of ore in order to optimize cost to recovery ratio. In July 2013, production was outsourced to a reputable subcontractor, and developed a resource management system to match ore against processes to achieve the most cost efficient and highest recovery production procedure.
There was no gold ore extraction of the Merapoh Gold Mine and no gold concentrate sold for the period between January 1, 2021 and December 31, 2021.
Our revenues have been derived from gold production from the Merapoh Gold Mine, but currently there is no production from that mine and we are not certain that there will be production in the coming future. Management continues to search for mining opportunities to generate revenues for the Company in the future. Management continues to search for mining opportunities to generate revenues in the future.
Results of Operations
For the three months ended December 31, 2021and 2020:
We have generated $0 and $0 revenues for the three months ended December 31, 2021 and 2020, and have recorded a gross profit of $0 and $0 for the three months ended December 31, 2021 and 2020. We have incurred $359,105 and $34,512 in operating expenses through December 31, 2021 and 2020. We have interest expense of $484,168 and $0 for the three months ended December 31, 2021 and 2020. We have other income $25 and $0 for the three months ended December 31, 2021 and 2020.
The following table provides selected financial data about our company for the three months ended December 31, 2021 and December 31, 2020.
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| 12/31/2021 |
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| 12/31/2020 |
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Statement of Operation |
| Amount |
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| Amount |
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| % |
| |||
|
| (Unaudited) |
|
| (Unaudited) |
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|
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Revenue |
| $ | - |
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| $ | - |
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|
| - | % |
Cost of revenue |
| $ | - |
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| $ | - |
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|
| - | % |
Gross profit |
| $ | - |
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| $ | - |
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|
| - | % |
Operating Expenses |
| $ | 359,105 |
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| $ | 34,512 |
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|
| 941 | % |
Interest expense |
| $ | 484,168 |
|
| $ | - |
|
| N/A | % | |
Other Income, net |
| $ | 25 |
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| $ | - |
|
| N/A | % |
The revenue is normally derived from the sales of gold mineral to customers in Malaysia. There was no revenue for the three months ended December 31, 2021 and 2020 because of the depletion of mineral reserves in the mine. Operating expenses comprised mainly of salaries, office costs, legal and professional fees. The increase in operating expenses for the period was mainly due to the increase of consultancy, salary, legal and professional fees during the period. The increase in salary expenses for the period was mainly due to the increase number of staff for new segment development during the period.
For the six months ended December 31, 2021and 2020:
We have generated $0 and $0 revenues for the six months ended December 31, 2021 and 2020, and have recorded a gross profit of $0 and $0 for the six months ended December 31, 2021 and 2020. We have incurred $723,101 and $98,792 in operating expenses through December 31, 2021 and 2020. We have interest expense of $954,934 and $0 for the six months ended December 31, 2021 and 2020. We have other income $12,115 and $0 for the six months ended December 31, 2021 and 2020.
The following table provides selected financial data about our company for the six months ended December 31, 2021 and December 31, 2020.
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| 12/31/2021 |
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| 12/31/2020 |
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Statement of Operation |
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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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| $ | - |
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| - | % | |
Cost of revenue |
| $ | - |
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| $ | - |
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| - | % | |
Gross profit |
| $ | - |
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| $ | - |
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| - | % | |
Operating Expenses |
| $ | 723,101 |
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| $ | 98,792 |
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|
| 632 | % |
Interest expense |
| $ | 954,934 |
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| $ | - |
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| N/A | % | |
Other Income, net |
| $ | 12,115 |
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| $ | - |
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| N/A | % |
The revenue is normally derived from the sales of gold mineral to customers in Malaysia. There was no revenue for the six months ended December 31, 2021 and 2020 because of the depletion of mineral reserves in the mine. Operating expenses comprised mainly of salaries, office costs, legal and professional fees. The increase in operating expenses for the period was mainly due to the increase of consultancy, salary, legal and professional fees during the period. The increase in salary expenses for the period was mainly due to the increase number of staff for new segment development during the period.
The average rate of MYR : USD for six months ended December 31, 2021 and December 31, 2020 was 1 to 0.2393 and 1 to 0.2419 respectively.
Plan of Operation
Our Industry and Principal Markets
The report by BMI Research states that global gold mine output growth will pick up in the next few years, supported by higher gold prices and solid projects in key countries. BMI Research forecasts global gold production to increase from 105moz in 2018 to 125moz by 2026, averaging 2.3% annual growth. While a steady pace of growth, this represents a slight deceleration in growth rate compared with the previous eight-year average of 3.1%.
Subcontractor
In an effort to enhance the efficiency of mine operations at the Merapoh Gold Mine, Champmark Sdn Bhd (“CSB”) entered into an Operation Term Sheet (“OTS”) agreement in July 2013 to outsource the exploitation works of alluvial gold resources at Site IV-1 of the Merapoh Gold Mine to a subcontractor Borneo Oil & Gas Corporation Sdn Bhd (“BOG”).
BOG has the experience and local knowledge in managing the exploitation of alluvial gold at the Merapoh Gold Mine. The Company will provide necessary disclosure when any significant agreements have been made with sub-contractors in the future.
BOG became the Company’s shareholder in January 29, 2014, and was no longer a third party subcontractor.
Expansion Plans
The Company has negotiated with Malaysia state agency PKNP on a 2-year lease for a new mining location that is about 5 km from the current Merapoh mine site. The leasing premium has been paid but the mining lease certificate will only be issued upon clearance from the Malaysia Forest Department, which is expected in mid 20222023 subject to review on COVID-19 “Movement Control Order” by the Malaysian government.
For the current Site IV-1 of the Merapoh Gold Mine, our mining operation would focus on mining other resources such as limestones.
The Company believes that there are excellent growth opportunities for its business outside Malaysia. We are constantly exploring for potential acquisition of mining projects in other parts of the world.
As our business is affected by the fluctuations of gold prices, the Company intends to diversify its product line by acquiring mining projects with potential for different mineral resources other than gold. We continue to hold discussions with other mining companies for potential collaboration to carry out exploration and exploitation works on other mineral resources in Southeast Asia regions. Apart from the mining industry, the Company is takinghas taken steps to look into investment opportunities in the non-mining areas that include the bioenergy industry and the food & beverage sector.
The Company is diversifying into the green industry with its acquisition of Bio Resources Ltd (“BRL”), the beneficial and/or registered proprietor of the intellectual property known as “Catalytic Biofraction Process”, which is a slow pyrolysis process using a proprietary catalyst to depolymerise palm biomass wastes (empty fruit bunches or palm kernel shells) in temperature range of 350 degCdegree Celsius to 500 degCdegree Celsius to yield commercially valuable bio products: bio-oil, wood vinegar (pyroligneous acid), biochar and bio-syngas. The intellectual property is a second-generation pyrolysis process where non-food feedstock like the palm biomass wastes is used as feedstock. The success of venturing into the green industry is dependentacquisition was completed on the completion of the acquisition subject to auditing and due diligence exercise to ascertain the valuation of BRL.October 12, 2022.
Apart from the green industry, the Company is also working on a partnership with MRX Technologies, a market leader in commercial extraction systems for cannabis and hemp. The partnership includes an agreement for Verde Resources to white-label THC-free CBD products from MRX Technologies.
Limited Operating History; Need for Additional Capital
There is no historical financial information about us upon which to base an evaluation of our performance. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in the exploration of our properties, and possible cost overruns due to price and cost increases in services.
We have no assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional dilution to existing shareholders.
Table of Contents |
Liquidity Results of Operations
For the three months ended December 31, 2022and Capital Resources2021:
The following table providessets forth selected cash flow data aboutfinancial information from our companystatements of comprehensive loss for the three months ended December 31, 2022 and 2021:
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| December 31, 2022 |
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| December 31, 2021 |
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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 |
| $ | 81,140 |
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| $ | - |
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| 100 | % |
Cost of revenue |
| $ | (31,656 | ) |
| $ | - |
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| 100 | % |
Gross profit |
| $ | 49,484 |
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| $ | - |
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| 100 | % |
Operating expenses |
| $ | 862,080 |
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| $ | 359,105 |
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| 203.6 | % |
Interest expense |
| $ | 1,349,548 |
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| $ | 484,168 |
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|
| 178.7 | % |
Other income, net |
| $ | 1,878 |
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| $ | 25 |
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|
| 7,412 | % |
NET LOSS |
| $ | (2,160,266 | ) |
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| (843,248 | ) |
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| 183.2 | % |
The average rate of MYR : USD for three months ended December 31, 2022 and December 31, 2021 was 0.2207 and 0.2398 respectively.
Revenue
The revenue is mainly derived from the rental income and sales of products in Malaysia.
We have generated $81,140 and $0 revenues for the three months ended December 31, 2022 and 2021.
Cost of revenue
We have generated $31,656 and $0 cost of revenues for the three months ended December 31, 2022 and 2021.
Gross profit
We have recorded a gross profit of $49,484 and $0 for the three months ended December 31, 2022 and 2021.
Operating expense
Operating expenses comprised mainly of salaries, office costs, legal and professional fees. The increase in operating expenses for the period was mainly due to the increase of consultancy fee and legal and professional fees during the period.
We have incurred $862,080 and $359,105 in operating expenses through December 31, 2022 and 2021.
Interest expense and Other income, net
We have interest expense of $1,349,548 and $484,168 for the three months ended December 31, 2022 and 2021. The increase in interest expenses for the period was mainly due to early conversion of promissory note.
We have other net income of $1,878 and $25 for the three months ended December 31, 2022 and 2021.
Net loss
As a result of the above factors, the Company incurred a net loss of $2,160,266 and $843,248 for the three months ended December 31, 2022 and 2021, respectively.
7 |
Table of Contents |
For the six months ended December 31, 2022and 2021:
The following table sets forth selected financial information from our statements of comprehensive loss for the six months ended December 31, 20212022 and 2021:
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| December 31, 2022 |
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| December 31, 2021 |
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| Change |
| |||
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| Amount |
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| Amount |
|
| % |
| |||
|
| (Unaudited) |
|
| (Unaudited) |
|
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Revenue |
| $ | 107,452 |
|
| $ | - |
|
|
| 100 | % |
Cost of revenue |
| $ | (79,595 | ) |
| $ | - |
|
|
| 100 | % |
Gross profit |
| $ | 27,857 |
|
| $ | - |
|
|
| 100 | % |
Operating expenses |
| $ | 1,672,522 |
|
| $ | 723,101 |
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|
| 131.3 | % |
Interest expense |
| $ | 1,879,660 |
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| $ | 954,934 |
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|
| 96.84 | % |
Other income, net |
| $ | 7,653 |
|
| $ | 12,115 |
|
|
| (36.83) | % |
NET LOSS |
| $ | (3,516,672 | ) |
|
| (1,665,920 | ) |
|
| 111.1 | % |
The average rate of MYR : USD for six months ended December 31, 2022 and December 31, 2020.2021 was 0.2210 and 0.2393 respectively.
Cash Flow Date |
| 12/31/2021 |
|
| 12/31/2020 |
| ||
Net Loss from operation |
| $ | (1,665,920 | ) |
| $ | (98,792 | ) |
Net Cash Generated/(Used) from operating activities |
| $ | (543,559 | ) |
| $ | (54,029 | ) |
Net Cash Generated/(Used) from investing activities |
| $ | (390,836 | ) |
| $ | - |
|
Net Cash Generated/(Used) from financing activities |
| $ | (2,610 | ) |
| $ | - |
|
Effect of exchange rate changes on cash and cash equivalents |
| $ | (3,888 | ) |
| $ | 63,244 |
|
Net increase (decrease) in cash and cash equivalents |
| $ | (940,893 | ) |
| $ | 9,215 |
|
Cash and cash equivalents at beginning of year |
| $ | 2,117,622 |
|
| $ | 24,027 |
|
Cash and cash equivalents at end of year |
| $ | 1,176,729 |
|
| $ | 33,242 |
|
Revenue
The revenue is mainly derived from the rental income and sales of products in Malaysia.
We have generated $107,452 and $0 revenues for the six months ended December 31, 2022 and 2021.
Cost of revenue
We have generated $79,595 and $0 cost of revenues for the six months ended December 31, 2022 and 2021.
Gross profit
We have recorded a gross profit of $27,857 and $0 for the six months ended December 31, 2022 and 2021.
Operating expense
Operating expenses comprised mainly of salaries, office costs, legal and professional fees. The increase in operating expenses for the period was mainly due to the increase of consultancy fee and legal and professional fees during the period.
We have incurred $1,672,522 and $723,101 in operating expenses through December 31, 2022 and 2021.
Interest expense and Other income, net
We have interest expense of $1,879,660 and $954,934 for the six months ended December 31, 2022 and 2021. The increase in interest expenses for the period was mainly due to early conversion of promissory notes.
We have other net income of $7,653 and $12,115 for the six months ended December 31, 2022 and 2021.
Net loss
As a result of the above factors, the Company incurred a net loss of $3,516,672 and $1,665,920 for the six months ended December 31, 2022 and 2021, respectively.
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Liquidity and Capital Resources
The following summarizes the key component of our cash flows for the six months ended December 31, 2022 and 2021.
Cash Flow Date |
| December 31, 2022 |
|
| December 31, 2021 |
| ||
|
|
|
|
|
|
| ||
Net Cash (Used in) operating activities |
| $ | (990,787 | ) |
| $ | (543,559 | ) |
Net Cash (Used in) investing activity |
|
| (445,326 | ) |
|
| (390,836 | ) |
Net Cash Provided by (Used in) financing activities |
|
| 1,391,098 |
|
|
| (2,610 | ) |
Effect of exchange rate fluctuation on cash and cash equivalents |
|
| (10,342 | ) |
|
| (3,888 | ) |
Net decrease in cash and cash equivalents |
|
| (45,015 | ) |
|
| (937,005 | ) |
Cash and cash equivalents, beginning of period |
|
| 418,917 |
|
|
| 2,117,622 |
|
Cash and cash equivalents, ending of period |
| $ | 363,560 |
|
| $ | 1,176,729 |
|
Net Cash (Used in) Operating Activities
For the six months ended December 31, 2021,2022, the Company had incurred net loss from operation of $1,665,920$3,516,672 which posted a negative impact to the company’sCompany’s cash flow. The reconciliation on non-cash items such as interest expenses, depreciation and amortization providesprovide positive impact on cash.
In the operation analysis, the net cash used in operating activities increased from $54,029$543,559 to $543,559.$990,787. The operation loss of $1,665,920$3,516,672 was partially offset by the noncash expenses such as $5,220$79,907 in depreciation, $15,585$65,822 in amortization, 191,222$307,457 in share basedshare-based compensation, and $954,934$1,870,972 in interest expenses on promissory notes.notes, $8,688 in lease interest expense and $600 from gain on disposal of property, plant and equipment. In the operating assets and liabilities, the net decreaseincrease in current assets resulted from a decrease of other receivables at $26,169 and an increase of other receivables, deposits and prepayments of $111,102 whereas the$110,088, an increase in inventories held of $17,320 and a decrease in accounts receivables of $4,489. The net increase in current liabilities resulted from $202,117 increase ofin advances from related parties, $83,991 increase in accrued liabilities and other payables at 28,433, advance from sub-contractor & related parties at $12,623 and $723 decrease of$30,250 increase in accounts payable. The final result of the cash flow used in operating activities was $543,559 negative cash flow effect.$990,787.
Net Cash (Used in) Investing Activity
The net cash used by investing activitiesactivity of $390,836$445,326 resulted from advances to related party at $118,848, security deposit paid at $240,000 and acquisitionpurchase of property, plant and equipment at $31,988of $469,466, offset by proceeds on disposal of $23,000 and net cash on acquisition of a subsidiary company of $1,140 for the six months ended December 31, 2021.2022.
Net Cash Provided by (Used in) Financing Activities
The net cash usedprovided by financing activities of $2,610$1,391,098 resulted from repaymentproceeds from shares issued of hire purchase creditor$1,376,280 and net proceeds from drawdown of loans of $50,000, set off partially by repayments to lease liabilities and related interests for the six months ended December 31, 2021.
The net increase in exchange rate effect2022 of $3,888 provided a negative cash flow effect and the overall cash and cash equivalents at the end of December 31, 2021, was decreased by $940,893 with $1,176,729 as the closing balance.$35,182.
The cash flow situation will not allow for operations in the coming next 12 months by self-generated cash provided from operating activities. The Company needs to increase cash flow supplies with a long term plan until the Company makes sustainable profits and has a positive cash flow. Otherwise, loans from related parties may be a temporary solution, although we have no written loan agreements. There is no guarantee that we will be able to secure adequate financing. If we fail to secure sufficient funds, our business activities may be curtailed, or we may cease to operate.
Working Capital
As of December 31, 2022 and June 30, 2022, we had cash and cash equivalent of $363,560 and $418,917, respectively. As of December 31, 2022 and June 30, 2022, we have incurred accumulated operating losses of $9,810,142 and $10,357,920, respectively.
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 is material to investors.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk.
As a “smaller reporting company”, we are not required to provide the information required by this Item.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our senior management, including our Chief Executive Officer and Chief Financial Officer, we conducted 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”), as of the end of the period covered by this Quarterly Report on Form 10-Q (the “Evaluation Date”). During the 2021,2022, the Company has been undertaking tremendous changes and expansion which rendered the management to re-consider the availability of more management talents and professional staff to meet the enlargement in operation under the coming acquisition and expansion move. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded as of the Evaluation Date that our disclosure controls and procedures were not effective such that the information relating to us required to be disclosed in our Securities and Exchange Commission (“SEC”) reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.
As of December 31, 20212022 management also assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control--Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and SEC guidance on conducting such assessments. During the 2021, the Company has been undertaking tremendous enlargement and expansion which rendered the management to re-consider the availability of more management talents and professional staff to meet the enlargement in operation during and after the coming acquisition and expansion move.assessments Based on thisour consideration and that evaluation, the current management concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.
The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee, (2) lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (3) inadequate segregation of duties consistent with control objectives; and (4) management is dominated by three individuals without adequate compensating controls. The aforementioned material weaknesses were identified by our Chief Executive and Financial Officers in connection with the review of our financial statements as of December 31, 2021.2022. In the meantime, management has appointed external consultants to minimise risk and ascertain compliance of the requirements.
Management believes that the material weaknesses set forth above did not have an immediate negative effect on our financial results because of our small size of operation. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements if the Company were growing substantially after the expansion move was materialized.
Changes in Internal Controls
There have been no changes in our internal controls over financial reporting identified in connection with the evaluation required by paragraph (d) of Securities Exchange Act Rule 13a-15 or Rule 15d-15 that occurred in the six months ended December 31, 20212022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
We know of no material, existing or pending legal proceedings against our Company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered beneficial shareholder, is an adverse party or has a material interest adverse to our interest.
Item 1A. Risk Factors.
As a “smaller reporting company”, we are not required to provide the information required by this Item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
N/A.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosure.
Pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act”), issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States are required to disclose in their periodic and annual reports filed with the SEC information regarding specified health and safety violations, orders and citations, related assessments and legal actions, and mining-related fatalities under the regulation of the Federal Mine Safety and Health Act of 1977. The Company did not have any mines in the United States during the period ended December 31, 2021.2022.
Item 5. Other Information.
None.
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Item 6. Exhibits.
The following exhibits are included as part of this report:
______________
101*
* The following financial information from Verde Resources, Inc.’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2021,2022, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Balance Sheets as of December 31, 2021,2022, and June 30, 2021,2022, (ii) Condensed Statements of Operations for the three and six months ended December 31, 20212022 and 2020,2021, (iii) Condensed Statements of Cash Flows for the six months ended December 31, 20212022 and 2020,2021, and (iv) Notes to Condensed Financial Statements.
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SIGNATURES
Pursuant to the requirements 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.
| VERDE RESOURCES, INC. |
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| (Registrant) |
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Dated: February | By: | /s/ |
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| President and Chief Executive Officer |
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| (Principal Executive Officer) |
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