10-K: Verde Resources Expands Global Reach, Secures Key Partnerships

Verde Resources, Inc. (VRDR) has filed its annual report, detailing advancements in its biochar asphalt technology, strategic collaborations with Ergon and Highway International, and a focus on expanding its Net Zero Blueprint globally.

Summary

• Verde Resources, Inc. (VRDR) has filed its annual report for the fiscal year ended June 30, 2026, highlighting significant progress in its sustainable infrastructure technology business.
• The company's core offering, BioAsphalt, incorporates engineered biochar to reduce emissions and improve road performance, with a strategy to generate revenue from carbon removal credits.
• Key developments include the issuance of the world's first carbon removal credit from asphalt production (certified by Puro.earth) and successful laboratory validation of its 100% RAP BioAsphalt cold recycling mix by NCAT.
• Strategic partnerships are central to VRDR's growth, with an exclusive license agreement with Ergon Asphalt & Emulsions, Inc. for North America and a Memorandum of Understanding (MOU) with Highway International Pte. Ltd. in Singapore for the Asia-Pacific region.
• VRDR is focused on an asset-light business model, leveraging partners' infrastructure for scalable growth through licensing, sales, royalties, and carbon monetization.
• The company reported revenue of $467,788 for FY2026, an increase of 251% from FY2025, primarily from initial sales of its Verde V24 product to Ergon, though its go-forward strategy now focuses on supplying engineered biochar for use with Ergons asphalt liquids.
• Despite revenue growth, the company reported a net loss of $3,382,027 for FY2026, a decrease of 29% from the prior year, and has an accumulated deficit of $21.71 million.
• VRDR is actively pursuing a Nasdaq listing, which is a condition for certain funding obligations under its agreement with C-Twelve Pty Ltd.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this filing as moderately positive, reflecting significant progress in strategic partnerships and commercialization efforts, though tempered by ongoing financial challenges and the need for future capital.

Positives

• Successful issuance of the world's first carbon removal credit from asphalt production, certified by Puro.earth.
• Laboratory validation by NCAT of the 100% RAP BioAsphalt cold recycling formulation, meeting or exceeding industry specifications.
• Entered into a Master Commercialization and Collaboration Agreement (MCCA) with Ergon, establishing VRDR as a preferred biochar supplier and carbon credit monetization service provider.
• Executed a Memorandum of Understanding (MOU) with Highway International Pte. Ltd. for potential deployment and commercialization in Singapore and the Asia-Pacific region.
• Revenue increased by 251% to $467,788 in FY2026, driven by initial commercial sales.
• Net loss decreased by 29% to $3,382,027 in FY2026, indicating improved operational efficiency.
• Secured a $2 million strategic investment from Ergon in November 2025.
• Continued development and testing of TerraZyme enzyme-based soil stabilization technology.

Negatives

• The company reported a net loss of $3,382,027 for FY2026 and has an accumulated deficit of $21.71 million.
• VRDR has not yet funded $3 million (loan and license fee) required under its agreement with C-Twelve Pty Ltd., which could lead to a breach of contract.
• The Verde V24 technology, initially licensed from C-Twelve, is not part of the go-forward commercialization strategy with Ergon, and NCAT's report indicated it is not ready for commercial deployment.
• The company is substantially dependent on Ergon for near-term revenues, with no minimum purchase requirements currently in place.
• Material weaknesses in internal controls over financial reporting were identified, including insufficient segregation of duties, formalized policies, regulatory reporting oversight, lack of an internal audit function, and insufficient audit committee oversight.
• The company has no business interruption insurance, exposing it to unrecoverable losses in case of operational disruptions.
• The company's stock is currently classified as a penny stock, potentially affecting liquidity and resale by investors.
• The company has not paid, nor does it intend to pay, dividends in the foreseeable future.

Risks

• High dependence on the relationship with Ergon for revenue generation, with no assurance of minimum purchase volumes.
• Potential breach of contract with C-Twelve Pty Ltd. due to failure to fund $3 million by the agreed-upon deadline.
• The market for carbon credits is immature, volatile, and subject to rapid regulatory and commercial change.
• The company's ability to protect its proprietary technology and trade secrets is critical and faces risks of disclosure or misappropriation.
• Reliance on third-party manufacturers and suppliers, such as Biochar Solutions LLC (BSL), for biochar supply.
• The construction industry is cyclical, and economic or political uncertainty could impede demand for VRDR's products.
• The company may need to raise additional capital through equity or debt financing, which could dilute existing shareholders or increase leverage.
• The company has identified material weaknesses in its internal controls over financial reporting, which could impact its ability to produce timely and accurate financial statements.

Future Outlook

The company anticipates continued growth through its strategic partnerships, particularly with Ergon, and plans to expand its licensing and distribution model globally. Future capital needs are expected to be met through additional equity or debt financing. Operations at the BioFraction facility in Sabah, Borneo, are expected to restart and ramp up in 2027.

Management Comments

• Our strategic roadmap for helping achieve net-zero emissionswhat we call our Verde Net Zero Blueprinthas achieved the following significant milestones.
• We believe our asset light business model enables scalable growth while minimizing capital intensity, creating recurring revenue streams through licensing, sales, royalties, carbon monetization, and strategic relationships.
• With key third-party testing and validation activities completed to date with groups such as NCAT and Puro.earth, we are now focused on commercializing our solutions in the United States, our most strategic market.
• Our business model combines our technology platform, engineered biochar supply, and carbon-related solutions with the operational capabilities, infrastructure, and customer relationships of our commercial partners.
• We believe we are among the first to successfully commercialize asphalt-integrated biochar with verified carbon credits in the U.S.

Industry Context

StockSavvy.ai notes that Verde Resources operates at the intersection of the rapidly evolving sustainable building materials and carbon removal industries. The global road construction market is substantial and growing, with increasing demand for lower-carbon solutions. The carbon dioxide removal market is also expanding, driven by climate mitigation strategies and corporate sustainability goals, creating a significant opportunity for biochar-based carbon sequestration in infrastructure.

Comparison to Industry Standards

• The company's 100% RAP BioAsphalt cold recycling formulation, as tested by NCAT, met or exceeded applicable industry specifications for cohesion, tensile strength ratio (TSR), and retained stability, outperforming standard cold mix benchmarks.
• The issuance of the world's first carbon removal credit from asphalt production, certified by Puro.earth, sets a precedent for the industry.
• The company's TerraZyme enzyme-based soil stabilization technology is presented as a sustainable alternative to conventional methods that rely on carbon-intensive additives like cement and lime.
• VRDR's asset-light, licensing-focused model aims for scalable growth, contrasting with traditional capital-intensive manufacturing and distribution models in the construction materials sector.

Corporate Governance

Related Party Transactions

• Sale of property located at 1138 Wildhorse Parkway Drive, Chesterfield, Missouri, by Verde Renewables to CEO Jack Wong for $857,500 on December 10, 2024.
• Settlement of $675,888 in debt owed by CSB to Borneo Oil Corporation Sdn Bhd (BOC) through the issuance of 9,655,542 shares of Common Stock to Borneo Oil Berhad (BOB) on August 16, 2024.
• The company has outstanding amounts due to related parties including Borneo Oil Berhad, Taipan International Limited, and J. Ambrose & Partners, related to ordinary business transactions.
• Karl Strahl, a director, is also the Chief Operating Officer of Oregon Biochar Solutions, a related party to Biochar Solutions LLC (BSL), the company's exclusive U.S. supplier of engineered biochar.
• The company has commitments to issue shares to non-employees and employees, including directors, as part of compensation agreements.

Stakeholder Impact

• Shareholders may experience dilution if the company issues additional equity to raise capital or satisfy listing requirements.
• Investors may face reduced liquidity and potential price volatility due to the stock's current penny stock status and the potential for a reverse stock split.
• Employees and consultants may receive compensation in the form of stock awards, aligning their interests with shareholders.
• Customers and licensees, such as Ergon, are key to the company's revenue generation and market adoption of its technologies.
• Creditors and suppliers, like C-Twelve and BSL, have contractual relationships that could be impacted by the company's financial performance and funding capabilities.

Next Steps

• Continue commercialization efforts with Ergon, focusing on supplying engineered biochar for asphalt liquids.
• Pursue global licensing opportunities for the Verde Net Zero Blueprint, starting with Singapore.
• Restart and ramp up operations at the BioFraction facility in Sabah, Borneo, during 2027.
• Work towards satisfying Nasdaq listing requirements and completing the associated public offering.
• Negotiate definitive agreements with Highway International Pte. Ltd. following successful pilot validation.
• Continue negotiations with Nature Plus Inc. for an exclusive worldwide license for TerraZyme technology.
• Address and remediate material weaknesses in internal controls over financial reporting.

Key Dates

Recommendation

The company shows promising technological advancements and strategic partnerships, evidenced by revenue growth and successful validation of its core technology. However, significant financial challenges, including substantial accumulated losses, ongoing need for capital, and unresolved funding obligations with C-Twelve, coupled with material weaknesses in internal controls, warrant a cautious 'hold' stance. Further progress in commercialization, capital raising, and remediation of control deficiencies would be needed to justify a more positive recommendation.

Keywords

biochar asphalt, carbon removal credits, sustainable infrastructure, joint development agreement, Ergon, C-Twelve, Verde Net Zero Blueprint, Puro.earth