VRDR.OQBVerde Resources, INC
10-Q: Verde Resources Reports Q3 2025 Results, Highlights Progress in Biochar-Asphalt Technology
Sentiment:
Quarterly Report
Verde Resources' Q3 2025 filing details financial results and highlights advancements in its Biochar-Asphalt technology, including successful demonstrations and carbon credit generation.
Capital raiseThe company, through its wholly-owned subsidiary Verde Renewables, Inc. (VRI), entered into a consulting services agreement (the Agreement) to engage AUM Media Inc (AUM), a company incorporated in the State of Delaware, as a Capital Markets, Investor Relations and Media Relations Advisor to provide advice to the Company on its preparations for an equity raise and the planned uplisting to NASDAQ.VRI agreed to pay a fixed monthly discounted fee of $6,000 per month, payable in advance on the first day of each month.In addition, the Company shall issue shares equivalent to 9,313,100 shares of the Company's restricted Common Stock to AUM or any affiliate to be designated by AUM, which represents 0.75% of the Company's total shares outstanding as of November 29, 2024.The share issuance will occur as follows: 4,656,550 shares of the Company's restricted common stock, being 50% of the 0.75% of the Company's total shares outstanding, to be issued upon the commencement of services as specified in the Agreement, with the remaining 4,656,550 shares to be issued within three days following the Company's listing on the NASDAQ.
Worse than expectedThe company's net loss increased for both the three and nine months ended March 31, 2025, compared to the same periods in 2024.The company's disclosure controls and procedures were not effective as of the Evaluation Date.There were significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting.
Summary
- Verde Resources, Inc. reported its financial results for the quarter ended March 31, 2025.
- The company is focused on net-zero road construction and building materials, utilizing its Biochar-Asphalt technology.
- A successful demonstration of the Biochar-Asphalt technology at the National Center for Asphalt Technology (NCAT) test track resulted in approximately 8 tons of carbon sequestration.
- The company achieved the issuance and sale of Puro.earth-certified Biochar Carbon Removal Credits from the NCAT demonstration.
- One of the world's largest building materials companies selected Verde Resources to scale its Biochar-Asphalt technology for commercialization.
- The company is pursuing a strategic licensing partnership following successful validation at NCAT.
- Verde Resources entered into a service agreement with GECA Environment to support carbon credit monetization.
- The company has undergone a restructuring exercise to focus on sustainable infrastructure.
- Revenue for the three months ended March 31, 2025, was $697, compared to $79 for the same period in 2024.
- The net loss for the three months ended March 31, 2025, was $1,146,380, compared to $865,772 for the same period in 2024.
- Revenue for the nine months ended March 31, 2025, was $128,690, compared to $7,853 for the same period in 2024.
- The net loss for the nine months ended March 31, 2025, was $3,485,994, compared to $1,941,571 for the same period in 2024.
Sentiment
Score: 5
Explanation: The document presents a mixed picture. While there are positive developments in the company's technology and partnerships, the increased net losses and identified weaknesses in internal controls raise concerns.
Positives
- The company achieved the issuance and sale of Puro.earth-certified Biochar Carbon Removal Credits from the NCAT demonstration, representing a potential new revenue stream.
- One of the world's largest building materials companies selected Verde Resources to scale its Biochar-Asphalt technology for commercialization, indicating industry recognition.
- The company is pursuing a strategic licensing partnership following successful validation at NCAT, which could lead to significant growth.
- Revenue increased significantly for both the three and nine months ended March 31, 2025, compared to the same periods in 2024.
Negatives
- The company incurred a net loss of $1,146,380 for the three months ended March 31, 2025.
- The company incurred a net loss of $3,485,994 for the nine months ended March 31, 2025.
- The company's disclosure controls and procedures were not effective as of the Evaluation Date.
- There were significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting.
Risks
- The company's limited operating history and potential fluctuations in quarterly operating results and expenses pose risks.
- Government regulation, technological change, and competition could adversely affect actual results and performance.
- The company's future profitability is contingent upon the successful commercialization of its technologies in the United States.
- The company's disclosure controls and procedures were not effective, and there were significant deficiencies and material weaknesses in internal control over financial reporting.
Future Outlook
The company anticipates future profitability contingent upon the successful commercialization of its technologies in the United States and plans to license the Verde Net Zero Blueprint globally.
Management Comments
- Management believes that its ongoing efforts to commercialize key technologies, secure strategic partnerships, and strengthen its financial position will help address conditions that have previously raised substantial doubt regarding the Company's ability to continue as a going concern.
Industry Context
The company's focus on biochar-asphalt aligns with the growing demand for sustainable infrastructure solutions and carbon removal technologies, driven by global decarbonization goals and commitments to the Paris Climate Agreement.
Comparison to Industry Standards
- The company's collaboration with NCAT and Puro.earth demonstrates a commitment to industry-leading standards and certifications.
- The successful demonstration of Biochar-Asphalt technology and the generation of carbon removal credits position the company as a pioneer in the net-zero building materials industry.
- The company's engagement with AUM Media Inc. to prepare for a potential NASDAQ uplisting suggests a desire to meet higher regulatory and investor expectations, similar to other companies seeking to enhance their market visibility and access to capital.
Management Changes
| Role | Previous Person | New Person | Effective Date | Reason |
|---|---|---|---|---|
| Chairman of the Board, Director, Chief Financial Officer (CFO), Treasurer, General Manager and member of the Management Committee | Balakrishnan B S Muthu | Karl Strahl (Director) and Sherina Chui (CFO) | 2025-05-01 | Balakrishnan B S Muthu stepped down from his positions. |
| Director of Finance | Duka Donaghy | NA | 2025-05-01 | Duka Donaghy resigned from her position. |
| Member of the Management Committee | Balakrishan B S Muthu, Duka Donaghy and Tay Hong Choon | Karl Strahl and Sherina Chui | 2025-05-01 | Balakrishan B S Muthu and Duka Donaghy resigned from their positions. |
Related Party Transactions
- The company engaged in sales to Borneo Eco Food Sdn Bhd.
- Mr. Jack Wong received rental income from the company.
- SB Resorts Sdn Bhd received rental income from the company.
- Warisan Khidmat Sdn Bhd provided professional services to the company.
- The company incurred interest expense payable to BOC.
- Mr. Jack Wong purchased property from the company.
Stakeholder Impact
- Shareholders may be impacted by the company's net losses and the identified weaknesses in internal controls.
- Employees may be impacted by the company's restructuring efforts and management changes.
- Customers may benefit from the company's advancements in sustainable building materials.
- Suppliers may be impacted by the company's changing business operations and strategic partnerships.
Next Steps
- The company intends to commercialize and license its sustainable infrastructure solutions.
- The company plans to continue its collaboration with NCAT and pursue the highest level of certification for its technologies.
- The company aims to generate new revenue streams through Carbon Removal Credits.
- The company intends to apply to uplist to the Nasdaq stock exchange as part of the final restructuring process.
Key Dates
| Date | Description |
|---|---|
| 2010-04-22 | Verde Resources, Inc. was incorporated in the State of Nevada. |
| 2021 | The Company's BioFraction facility in Borneo has been converting palm waste into biochar and other sustainable byproducts. |
| 2023-03-13 | The Company announced the disposition of the mining business through the sale of the entire issued and paid-up share capital of Champmark Sdn Bhd (CSB). |
| 2023-04 | The Company entered into a platform agreement with Puro.earth, the leading crediting platform for durable carbon removal. |
| 2023-04-20 | The disposition of CSB was completed. |
| 2023-06 | Operations in Borneo, Malaysia, experienced a temporary slowdown. |
| 2023-07-06 | The Company discontinued its distribution of THC-free cannabinoid (CBD) products following the expiration of its supply agreement with MRX Xtractors, LLC. |
| 2023-08-07 | The Company entered into a Memorandum of Understanding (the MOU) with Andre van Zyl (AvZ) & Green Carbon Industries Group of Companies (GCI). |
| 2023-08-30 | The Company completed the first-ever biochar-asphalt installation in the U.S., near Chicago, Illinois. |
| 2023-09-12 | Jack Wong stepped down from his position as President of the Company, but remains as Chief Executive Officer of the Company. |
| 2023-10-01 | The Company appointed Eric Bava and Andre van Zyl as Chief Operating Officer and Chief Technology Officer, respectively. |
| 2023-10-23 | The Company, through its wholly-owned subsidiary VRI, entered into a Services Agreement (the Fosnacht Agreement) with Donald R. Fosnacht. |
| 2024-01-23 | Jack Wong stepped down from his position as Chairman of the Board of Directors of the Company, and Joseph Ambrose Lee was appointed Director and Chairman of the Board. |
| 2024-01-23 | By resolution of the Board of the Company, approved an amendment to the Bylaws of the Company (the Amendment). |
| 2024-01-31 | The Company issued 1,000,000 restricted Common Shares to Donald R. Fosnacht. |
| 2024-02-06 | By resolution of the Board of the Company, Joseph Ambrose Lee, Jack Wong, Balakrishnan B.S. Muthu, Soo Yau Cho and Tay Hong Choon were appointed as members of the newly formed Management Committee of the Board. |
| 2024-04-20 | The Company entered into two Services Agreements (the NIE Agreements) with Dr. Nam Tran and Dr. Raymond Powell. |
| 2024-05-14 | The Company entered into a Heads of Agreement (the HOA) with Zym-Tec Technologies Limited (ZT). |
| 2024-05-15 | Andre van Zyl stepped down from his position as Chief Technology Officer (CTO) of the Company. |
| 2024-05-15 | The Company, AvZ and GCI mutually agreed to terminate the collaboration laid out in the MOU that was entered into on August 7, 2023. |
| 2024-05-21 | By resolution of the Board of the Company, Steven Sorhus was appointed as member of the Management Committee of the Board to replace Soo Yau Cho. |
| 2024-06-01 | The Company entered into a multi-year Services Agreement (the Ludwig Agreement) with Dale Ludwig. |
| 2024-06-18 | Joseph Ambrose Lee tendered his resignation as Director and Chairman of the Board and member of the Management Committee of the Company. |
| 2024-06-18 | By resolution of the Board, Balakrishnan B S Muthu, Director and Chief Financial Officer of the Company, was appointed Chairman of the Board to replace Joseph Ambrose Lee. |
| 2024-06-27 | The Company entered into an agreement with The National Center for Asphalt Technology at Auburn University (NCAT) to undertake a 3-year Performance Testing Project titled Structural Capacity of Sustainable Pavement (the Project). |
| 2024-07-31 | Effective August 1, 2024, Jeremy P. Concannon was appointed as Chief Growth Officer (CGO) of the Company. |
| 2024-07-31 | The Company issued 1,000,000 of the Company's restricted Common Shares each to Dr. Nam Tran and Dr. Raymond Powell as part of the compensation package in the NIE Agreements. |
| 2024-08-08 | The Company issued 700,000 of the Company's restricted Common Shares to Dale Ludwig as part of the compensation package in the Ludwig Agreement. |
| 2024-08-14 | The Company entered into a Memorandum of Understanding (the NPI MOU) with Nature Plus Inc. (NPI). |
| 2024-08-16 | The Company issued 9,655,542 shares of the Company's restricted Common Stock at the price of $0.07 per share to Borneo Oil Berhad. |
| 2024-08-23 | The Company successfully completed Stage 1 of the cross-section at the NCAT test track in collaboration with NPI. |
| 2024-08-30 | The Company issued 1,350,000 of the Company's restricted Common Shares to Jeremy P. Concanon, Chief Growth Officer of the Company, as part of the compensation package in the Services Agreement. |
| 2024-08-30 | The Company issued 670,000 of the Company's restricted Common Shares to Eric Bava, Chief Operating Officer of the Company, as part of the compensation package in the Employment Agreement. |
| 2024-09-27 | Pursuant to the addendum to Concannon Agreement dated September 27, 2024, each tranche of shares to be issued as compensation for each service period beginning 12 months from August 1, 2024 and 2025, and for 14 months from August 1, 2026, to September 30, 2027, respectively. |
| 2024-10-16 | The Company formed a new subsidiary, VerdePlus Inc. (VerdePlus), a Missouri corporation in partnership with Nature Plus Inc. (NPI). |
| 2024-10-16 | The Company issued 800,000 restricted Common Shares for $80,000 at $0.10 per share to three US shareholders. |
| 2024-10-18 | The Company entered into a binding Term Sheet with C-Twelve Pty Ltd (C-Twelve). |
| 2024-10-22 | The Company entered into a service agreement with GECA Environment (GECA) to provide the Company with strategic support for carbon credit monetization. |
| 2024-11-29 | The Company, through its wholly-owned subsidiary Verde Renewables, Inc. (VRI), entered into a consulting services agreement (the Agreement) to engage AUM Media Inc (AUM). |
| 2024-12-09 | The Board of the Company approved a special bonus of $1.25 million to CEO Jack Wong. |
| 2024-12-10 | CEO Jack Wong entered into a Sale and Purchase Agreement (Agreement) with VRI to purchase the Property at the price of $857,500 with payment in equal installments over 26 pay cycles. |
| 2024-12-19 | The transfer of title was completed. |
| 2024-12-20 | Verde Resources, in collaboration with C-Twelve Australia, successfully demonstrated the production and installation of Biochar-Asphalt on the NCAT test tracks off-ramp. |
| 2024-12-26 | Chen Ching voluntarily resigned from his position as Director of the Company. |
| 2025-01-02 | The Company issued 4,656,550 of the Company's restricted Common Shares to Aegis Ventures Limited as designated by AUM. |
| 2025-01-03 | The Company issued 50,000 of the Company's restricted Common Shares to Hannah Bruehl. |
| 2025-01-06 | The Company cancelled 200,000 restricted Common Shares that were previously issued to two US shareholders. |
| 2025-02-16 | Steven Sorhus tendered his resignation as Financial Controller and member of the Management Committee of the Company. |
| 2025-02-18 | The Company issued a total of 3,905,555 restricted Common Shares. |
| 2025-02-28 | The term sheet, originally set to expire on February 28, 2025, has been extended until May 31, 2025. |
| 2025-03-31 | End of the quarterly period. |
| 2025-04 | In April 2025, Verde achieved what it believes is an industry first with the issuance and sale of Puro.earth-certified Biochar Carbon Removal Credits from the December NCAT demonstration. |
| 2025-04-11 | Verde announced this milestone in a press release on April 11th 2025. |
| 2025-04-22 | The Company cancelled 150,000 restricted Common Shares that were previously issued to one US shareholder. |
| 2025-05-01 | Balakrishnan B S Muthu stepped down from his positions as Chairman of the Board, Director, Chief Financial Officer (CFO), Treasurer, General Manager and member of the Management Committee of the Company. |
| 2025-05-01 | Karl Strahl was appointed Director of the Company to replace Balakrishnan B S Muthu effective May 1, 2025. |
| 2025-05-01 | The Board also appointed Sherina Chui as Chief Financial Officer to replace Balakrishnan B S Muthu effective May 1, 2025. |
| 2025-05-01 | Duka Donaghy resigned from her position as Director of Finance of the Company. |
| 2025-05-01 | Karl Strahl and Sherina Chui were appointed as members of the Management Committee (the Committee) to replace the positions formerly held by Balakrishan B S Muthu, Duka Donaghy and Tay Hong Choon. |
| 2025-05-16 | Date of report. |
Keywords
Biochar-Asphalt, carbon removal credits, net zero, sustainable infrastructure, pyrolysis, Verde Resources, NCAT, GECA, AUM, financial results
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