S-1: Verde Resources Files S-1 for BioAsphalt IPO & Nasdaq Uplisting

Verde Resources, a sustainable road construction materials company, files an S-1 registration statement for a public offering and Nasdaq listing, highlighting its BioAsphalt technology and exclusive licensing agreement with Ergon.

Summary

• Verde Resources is a road construction and building materials company focused on proprietary, environmentally sustainable materials, aiming for 'TransitiontoZero' emissions.
• The company's core products include BioAsphalt, which incorporates biochar for carbon sequestration, and Verde V24, a licensed cold mix biochar asphalt emulsifying agent.
• Verde expects to generate revenue from the sale of carbon removal credits (CORCs) generated by its products.
• Key milestones include the issuance of the world's first carbon removal credit from asphalt production (April 2025) and technological validation of BioAsphalt by NCAT, demonstrating consistent durability and exceeding industry specifications for cold-recycled asphalt (July and September 2025).
• An exclusive licensing agreement was signed with Ergon, a major asphalt marketer in North America, for the production of asphalt surface course material containing Verde V24 in the United States, Canada, and Mexico.
• The company plans to expand operations and revenue over the next 12 months primarily through the Ergon partnership in North America, with production planning already commenced.
• Verde operates an asset-light business model, focusing on licensing, sales, royalties, carbon monetization, and strategic partnerships.
• The company is planning a reverse stock split (1-for-[] to 1-for-[]) to meet Nasdaq listing requirements.
• Gross proceeds of $2 million were received from a private placement with Ergon on October 31, 2025, for working capital and general corporate purposes.

Sentiment

Score: 4

Explanation: While the company has significant technological validations and a strategic partnership with Ergon, its current financial performance shows substantial losses and declining revenue in the most recent quarter. The heavy reliance on a single licensee with no minimum purchase requirements initially, coupled with the need for significant future capital raises and the inherent risks of an unproven business model at scale, indicate a high-risk investment despite the promising green technology.

Positives

• Proprietary BioAsphalt technology incorporates biochar for carbon sequestration, aiming to reduce emissions, improve performance, and lower costs.
• Verde V24 cold mix biochar asphalt emulsifying agent has received technological validation from NCAT, demonstrating consistent durability and superior cohesion, tensile strength ratio (TSR), and retained stability compared to standard cold mix benchmarks.
• The company secured the world's first carbon removal credit from asphalt production and application, certified by Puro.earth, a leading global registry for engineered carbon removal.
• An exclusive 10-year licensing agreement with Ergon, a major North American asphalt leader, provides immediate scalability and near-term revenue generation in the U.S., Canada, and Mexico.
• The asset-light business model minimizes capital intensity and creates recurring revenue streams through licensing, sales, royalties, carbon monetization, and strategic partnerships.
• The company's solutions align with global Net Zero targets, Scope 1-3 emissions reductions, and climate-resilient procurement policies, positioning it as a first-mover in scalable Net Zero solutions.
• The BioFraction facility in Borneo is set to become fully operational once Malaysian expansion is ready, capable of producing up to 6,000 tons of biochar annually.

Negatives

• The company has a limited operating history in its current business model (since 2023), making future revenue and earnings difficult to evaluate.
• Verde Resources has a history of operating losses, reporting net losses of approximately $4.78 million for the fiscal year ended June 30, 2025, and $0.92 million for the three months ended September 30, 2025.
• An accumulated deficit of approximately $19.18 million was reported as of September 30, 2025.
• The company faces significant revenue concentration risk due to its reliance on Ergon as its first and currently only licensee for Verde V24.
• Under the Ergon License, there are no minimum purchase requirements for Verde V24 during the initial 15-month go-to-market period, and future minimums require good faith negotiation, creating uncertainty in revenue generation.
• The loss of key personnel, specifically CEO Jack Wong or COO Eric Bava, could lead to the termination of the Ergon License with little to no penalties.
• The company will need to raise additional capital to satisfy future capital needs and grow, with the current offering being relatively small, potentially leading to dilution for existing stockholders.
• The planned Reverse Stock Split may adversely affect the price and liquidity of the common stock, and there is no assurance it will result in a sustained increase in per-share price or successful Nasdaq listing.
• The company does not carry business interruption insurance, exposing it to unrecoverable losses in the event of operational disruptions.

Risks

• Limited operating history and evolving business model make future revenue and earnings difficult to predict.
• History of operating losses and may never achieve cash flow positive or profitable results.
• Dependence on third-party licensees (currently only Ergon) and their inability to perform or loss of these relationships would materially adversely affect the business.
• Revenue concentration risk due to reliance on Ergon as a single key customer, with no minimum purchase requirements for Verde V24 during the initial 15-month period.
• Future operating results are difficult to predict and may vary significantly from quarter to quarter, potentially affecting stock price.
• May not enter into an exclusive license agreement with Nature Plus Inc for the TerraZyme technology, requiring identification or development of a substitute.
• Inability to respond in a timely and cost-effective manner to changes in consumer preferences in the road and construction materials industry.
• Dependence on certain key personnel (Jack Wong, Eric Bava) and the risk of losing them, which could trigger Ergon License termination.
• Inability to protect proprietary technology (trade secrets) and potential exposure to intellectual property claims or litigation.
• Risk of product liability claims that could be expensive, divert management attention, and harm reputation.
• Inability to obtain raw materials (biochar) from suppliers in a timely manner, especially reliance on a single supplier for biochar in the U.S.
• Asphalt supply and price volatility, where declining asphalt prices could make traditional products more competitive.
• Exposure to risks of doing business internationally, including difficulty enforcing liabilities in foreign jurisdictions.
• Need to raise additional capital, which may dilute or subordinate existing common stockholders' rights, and inability to raise capital could cause business failure.
• Reliance on third parties for the manufacture of low-carbon asphalt products increases risks of insufficient quality, quantities, or acceptable costs.
• Complex, multi-party, multi-year projects/contracts expose the company to risks of incorrect budget forecasts, failure to meet standards, or late delivery.
• Risks relating to management's conclusion that disclosure controls and procedures and internal controls over financial reporting are ineffective.
• If unable to protect the confidentiality of trade secrets, business and competitive position would be harmed.
• Delays or interruptions in shipping products could affect operations.
• Changes in U.S. climate policy may adversely affect demand for solutions.
• Failure to continue developing and improving sustainable products may lead to falling behind competitors.
• Considerable discretion in the use of net proceeds from the offering, which may not align with investor expectations.
• Failure to meet Nasdaq continued listing requirements could result in de-listing.
• If shares are delisted from Nasdaq and become subject to penny stock rules, trading would become more difficult.
• Market price for common stock may be volatile and fluctuate, and an active market may never develop.
• Amended and restated articles of incorporation allow the Board to create new series of preferred stock without shareholder approval, potentially affecting common stock rights.
• Future sales of common stock may adversely affect market price and ability to raise funds.
• Likely experience additional, perhaps significant, dilution from future equity offerings.
• Nevada anti-takeover provisions could discourage, delay, or prevent a change in control.
• Amended and restated bylaws designate certain courts as the sole and exclusive forum for certain actions, limiting stockholders' ability to choose a favorable judicial forum.

Future Outlook

Verde Resources plans to expand operations and grow revenue over the next 12 months by marketing and selling its proprietary road technologies through Ergon exclusively in North America, with an initial focus on the United States. Production planning has commenced, with distribution anticipated through Ergon's established sales channels. The company also intends to license its Verde Net Zero Blueprint globally, targeting infrastructure and materials companies aligned with the Paris Climate Agreement and Net Zero by 2050 goals. Future revenue streams are expected from licensing, sales, royalties, carbon monetization, and strategic partnerships. The company is also engaging in R&D for national security and defense-related applications of BioAsphalt.

Management Comments

• "Our proprietary product BioAsphalt incorporates biochar, a powerful carbon sequestering material, into infrastructure with the goal of reducing emissions, improving performance, and lowering overall costs."
• "We believe our proprietary products, know-how and business plan place us at the forefront of sustainable innovation in the construction and building materials sector, an industry we believe is long overdue for transformation."
• "Our model presents a novel combination of infrastructure performance with measurable climate impact, establishing us as a first mover in scalable Net Zero solutions, which we believe positions us well to meet the demands of a rapidly decarbonizing, carbon-constrained economy."
• "Embedding our technology into Ergons nationwide business footprint would enable immediate scalability and near-term revenue generation."
• "We believe our asset light business model enables scalable growth while minimizing capital intensity, creating recurring revenue streams through licensing, sales, royalties, carbon monetization, and strategic partnerships."
• "We believe our products are positioned to lead in this transition [to sustainable solutions]."
• "We believe our ability to monetize decarbonization through a scalable, licensable model places us at the forefront of engineered carbon removal and gives us a significant first-mover advantage."

Industry Context

Verde Resources operates at the intersection of the rapidly evolving sustainable building materials and carbon removal industries. The global road construction market was valued at $572.9 billion in 2023, with North America at $188.0 billion in 2024, projected for continued growth driven by infrastructure investment and a shift towards sustainable materials. The global carbon market for carbon dioxide removal credits is expected to surge from $2.7 billion in 2023 to $100 billion by 2030-2035, driven by increasing pressure on enterprises to offset carbon footprints, especially with the rise of AI data centers. Verde's model, combining infrastructure performance with measurable climate impact and verified carbon removal credits, positions it as a first-mover in scalable Net Zero solutions. While the industry is competitive and dominated by larger players, Verde's unique asphalt-integrated biochar with verified carbon credits offers a paradigm shift rather than direct competition, allowing existing producers to transition without overhauling equipment.

Comparison to Industry Standards

• Verde's cold mix biochar asphalt has been tested by NCAT and demonstrated consistent durability, particularly under low-volume roadway conditions, after approximately 50,000 equivalent single-axle loads of heavy truck traffic.
• NCAT's latest evaluation of Verde's cold recycling mix using 100% reclaimed asphalt pavement (RAP) demonstrated superior cohesion, high tensile strength ratio (TSR), and retained stability compared to standard cold mix benchmarks, exceeding industry specifications for cold-recycled asphalt.
• The company's biochar-asphalt technology is the first carbon-sequestering asphalt surface course to maintain competitive strength and flexibility for road applications and enable verified carbon removal credits.
• Compared to traditional hot mix asphalt, Verde's cold mix biochar asphalt produces fewer emissions by eliminating high-temperature processing and requiring less electricity during manufacturing, is fully recyclable, and uses local, low-carbon raw materials.
• TerraZyme enzyme-based soil stabilization offers a low-emission, cost-effective, and rapidly deployable solution compared to conventional cement, lime, or other chemical additives, which are costly, labor-intensive, and carbon-intensive.

Management Changes

Corporate Governance

Legal Proceedings

• The company is not involved in any material legal proceedings.
• The company is not aware of any threatened legal proceedings or any in which a director, officer, or affiliate is an adverse party or has a material adverse interest.

Related Party Transactions

• Sale of property: CEO Jack Wong purchased a property from Verde Renewables Inc. for $857,500 on December 10, 2024, with payment in equal installments over 26 pay cycles. A gain on disposal of $161,156 was recognized.
• Settlement of debt by shares: On August 16, 2024, 9,655,542 restricted shares were issued to Borneo Oil Berhad (a related party, ultimate holding company of Borneo Oil Corporation Sdn Bhd) to settle a $675,888 promissory note.
• Amount due to director: As of September 30, 2025, $107,830 was due to CEO Jack Wong, representing the remaining balance of a $1.25 million special bonus, with monthly installments deducted from the bonus.
• Amounts due to related parties: As of September 30, 2025, various amounts totaling $325,125 were due to Borneo Oil Corporation Sdn Bhd ($72,866), Borneo Oil Berhad ($3,007), Taipan International Limited ($119,153), Borneo Energy Sdn Bhd ($16,374), Victoria Capital Sdn Bhd ($5,931), Makin Teguh Sdn Bhd ($19,379), J. Ambrose & Partners ($75,985), SB Resorts Sdn Bhd ($6,642), SB Supplies & Logistics Sdn Bhd ($4,626), and Borneo Eco Food Sdn. Bhd. ($1,162). These advances are related to ordinary business transactions, bear no interest or collateral, and are repayable on demand.
• Amount due from a related party: As of June 30, 2025, $100 was due from Vetrolysis Limited (director Encik Anuar bin Ismail is an indirect significant shareholder). This balance was $0 as of September 30, 2025.
• Consulting services agreement: On November 29, 2024, Verde Renewables entered into a consulting services agreement with AUM Media Inc. (AUM) for capital markets, investor relations, and media relations advice. The company agreed to issue shares equivalent to 9,313,100 restricted shares (0.75% of total shares outstanding) to AUM or its designee. 4,656,550 shares were issued to Aegis Ventures Limited (AUM's designee) on January 2, 2025, with the remaining 4,656,550 shares to be issued upon Nasdaq listing.

Stakeholder Impact

• Shareholders: Potential for dilution from the current public offering and future capital raises. The Reverse Stock Split could negatively impact stock price and liquidity. Nasdaq listing could increase visibility and liquidity but is not assured. Existing shareholders are subject to a 6-month lock-up period.
• Employees: Compensation includes stock awards, which could be impacted by stock price volatility. The company is dependent on key personnel, and their retention is critical for business continuity and the Ergon License.
• Customers (licensees like Ergon): Benefit from exclusive licensing of proprietary technologies and access to carbon removal credits. Their success in commercializing BioAsphalt directly impacts Verde's revenue streams. Ergon's ability to meet minimum purchase amounts (post-go-to-market period) is crucial.
• Suppliers (e.g., C-Twelve, Oregon Biochar Solutions): C-Twelve receives licensing fees and a loan, and potential conditional fee payments. Oregon Biochar Solutions is in negotiations for a formal supply agreement. Their ability to provide quality raw materials is vital for product production.
• Regulatory Authorities: The company's products and carbon credits are subject to certification and compliance with environmental laws and construction material standards. Nasdaq listing requires adherence to specific corporate governance and financial standards.

Next Steps

• Effect a reverse stock split (1-for-[] to 1-for-[]) to meet Nasdaq minimum bid price requirements.
• Complete the Nasdaq Capital Market listing application process.
• Fund the $2 million C-Twelve Loan and $1 million exclusive licensing fee to C-Twelve within 30 days of Nasdaq listing, or by July 31, 2026, to avoid breach.
• Continue on-boarding matters and testing of Verde V24 within Ergon's products, with commercial market launch anticipated in early calendar year 2026.
• Negotiate definitive supply agreement with Oregon Biochar Solutions for custom blend biochar in Q1 2026.
• Establish nationwide distribution and deployment across multiple asphalt plants with Ergon, with early sales-based revenues expected between April 2026 and September 2026.
• Initiate discussions regarding minimum quantities with Ergon for 2027, starting October 2026.
• Expand the licensing model to establish commercial partnerships in new global markets and regions, particularly Southeast Asia.
• Engage in further research and development to deliver new technologies and products, including potential national security and defense-related applications for BioAsphalt.
• Restart and increase operations at the BioFraction facility in Borneo once Malaysian expansion is ready, targeting major Malaysian highway operators.
• Explore licensing BioFraction intellectual property to palm oil waste processors in Southeast Asia.

Key Dates

Recommendation

Verde Resources presents a compelling long-term vision with its innovative BioAsphalt technology and verified carbon removal credits, positioning it as a first-mover in sustainable infrastructure. The strategic partnership with Ergon, a major industry player, provides a crucial pathway for commercialization and scalability in North America. However, the company's current financial performance is weak, marked by significant operating losses and a sharp decline in revenue and gross profit in the most recent quarter, attributed to a product transition. There is substantial revenue concentration risk with Ergon, and the absence of minimum purchase requirements in the initial phase creates uncertainty. The need for future capital raises and the potential adverse effects of the planned reverse stock split on stock price and liquidity add to the speculative nature of the investment. While the long-term potential is significant, the immediate financial challenges and execution risks warrant a 'hold' recommendation, advising investors to monitor commercialization progress, financial stability, and successful Nasdaq uplisting before considering further investment.

Keywords

BioAsphalt, Carbon Removal Credits, Sustainable Infrastructure, Biochar, Verde V24, Ergon, Nasdaq Uplisting, SEC S-1, Green Technology, Road Construction, Climate-tech, Carbon Sequestration, Cold Mix Asphalt, TerraZyme, Renewable Commodities