NOTE 1 - ORGANIZATION AND BUSINESS BACKGROUND

Core Business & Technology Overview

Verde Resources, Inc. was incorporated under the laws of the state of Nevada on April 22, 2010.

The Company is a road construction and building materials company offering proprietary, environmentally sustainable materials, designed to drive innovations that enhance sustainability and advance environmental stewardship. By integrating biochar, a carbon sequestering material and performance enhancer, the Company aims to facilitate the industry’s transition toward lower-emission infrastructure solutions. The Company believes its approach reduces greenhouse gas (“GHG”) emissions, optimizes the use of native soils and recycled materials, accelerates installation timelines, improves operational efficiency, and reduces overall project costs. The Company’s strategic focus has shifted toward the commercialization of its biochar asphalt technology through its wholly owned subsidiary, Verde Renewables Inc.. As part of this initiative, the Company has collaborated with the National Center for Asphalt Technology (“NCAT”) to deploy and evaluate its biochar asphalt technology at the NCAT test track. This endeavor is intended to validate the technology’s performance characteristics, environmental sustainability attributes, and potential to support the generation of carbon removal and avoidance credits.

Environmental Attributes and Carbon Credits

Puro.earth, a crediting platform for durable carbon removal, has officially registered the Company as a Carbon Removal Credit supplier as part of its Accelerate program. This registration was formalized through a platform agreement signed in April 2023. The Company’s endeavors are positioned to potentially create additional revenue opportunities through the generation of carbon removal credits (“CORCs”). The Company believes that the generation of CORCs and the demand for CORCs incentivizes the broader adoption of climate technologies and enables the Company to supply these credits to companies seeking to offset their carbon footprint in pursuit of net-zero objectives. Simultaneously, this approach creates the potential for an additional and substantial revenue stream for the Company.

In addition, on March 9, 2026, the Company engaged with Isometric (a leading certifier of carbon removal) in connection with the audit and verification of the Company’s BioFraction™ facility in Sabah, Borneo, to support the production of biochar and the potential generation of carbon removal credits associated with the use of engineered carbon in the Company’s road technologies. The Company views Isometric as a complementary carbon registry and methodology provider alongside Puro.earth and believes maintaining relationships with multiple registries may support future commercialization and expansion efforts across North America and other international markets.

VERDE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Technology Development and Validation

On June 27, 2024, the Company entered into an agreement with NCAT at Auburn University to undertake a 3-year Performance Testing Project titled “Structural Capacity of Sustainable Pavement” (the “Project”). The Project, led by Dr. Nam Tran, Associate Director and Research Professor at NCAT, involved a comprehensive performance testing on the NCAT Test Track in Opelika, Alabama. This facility, sponsored by various state Departments of Transportation (DOTs) and in partnership with the Minnesota Road Research Facility (MnROAD), is dedicated to advancing sustainable pavement technologies. Success in this Project is expected to drive widespread adoption of a net-zero road construction blueprint by DOTs across the U.S. and the federal DOT. The Project commenced on June 24, 2024, and includes ongoing field demonstrations, performance evaluations and laboratory testing of the Company’s cold-mix BioAsphalt^™ technologies at NCAT. The Project is expected to conclude on September 30, 2027, with the first draft of the final report expected in Spring 2027.

The Company’s work with NCAT has included the evaluation of distinct BioAsphalt^™ formulations, including a 100% reclaimed asphalt pavement (“RAP”) cold recycling formulation utilizing the Company’s engineered biochar and an engineered emulsion manufactured by Ergon Asphalt & Emulsions, Inc. (“Ergon”) and a separate cold-mix formulation utilizing Verde V24, virgin aggregate and the Company’s engineered biochar.

100% RAP Cold Recycling Development

As part of the Project, the Company and NCAT developed and evaluated a 100% RAP cold recycling BioAsphalt^™ formulation incorporating the Company’s engineered biochar and an engineered cationic emulsion manufactured by Ergon. In September 2025, NCAT laboratory testing of this formulation, conducted in accordance with ASTM D6927 (Marshall Stability and Flow), ASTM D6931 (Indirect Tensile Strength), and AASHTO T283 (Moisture Susceptibility), demonstrated that the formulation met or exceeded applicable industry specifications evaluated during testing. Results showed superior cohesion, high tensile strength ratio (“TSR”) and retained stability compared to standard cold-mix benchmarks, supporting the formulation’s strength, durability and moisture resistance.

The 100% RAP cold recycling formulation is the technology platform the Company currently intends to advance toward commercialization with Ergon. As part of its go-forward development strategy, the Company intends to incorporate additional industry testing capabilities earlier in the development process to generate initial performance data and utilize Paragon, Ergon’s technical arm, for additional technical testing and validation. NCAT is expected to remain an important independent research and third-party validation resource, including for additional independent testing and validation, as appropriate, as the Company continues to develop and commercialize new road materials and applications.

Verde V24 / Off-Ramp Development

Separately, in December 2024, in collaboration with C-Twelve Pty Ltd, a corporation incorporated in Western Australia (“C-Twelve”), the Company demonstrated a cold-mix BioAsphalt^™ formulation utilizing Verde V24 emulsion, the Company’s engineered biochar and virgin aggregate at the NCAT test track in Auburn, Alabama. The demonstration showcased the ability to retrofit an existing asphalt plant to produce cold-mix biochar asphalt under winter conditions without the use of heat, solvents, or odors, resulting in an estimated 50% increase in installation efficiency compared to conventional methods.

VERDE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The demonstration sequestered approximately eight (8) tons of carbon, verified and certified under Puro.earth in collaboration with Oregon Biochar Solutions, a related party of the Company through Karl Strahl, Chief Operating Officer of Oregon Biochar Solutions, who was appointed as a director of the Company in May 2025. This achievement marked what the Company believes to be the world’s first carbon removal credits generated through asphalt production and installation. The credits, issued and sold in April 2025, were pre-purchased by one of the world’s largest financial institutions focused on Carbon Dioxide Removals (“CDRs”). The Company refers to this integrated model of combining low-carbon materials, operational efficiency, and verified carbon removal credit generation as the “Verde Net Zero Blueprint.”

In July 2025, the Company received encouraging preliminary field-performance results from NCAT regarding the off-ramp mix installed in December 2024. After approximately 50,000 equivalent single axle loads (ESALs) of heavy truck traffic, the asphalt surface remained flexible and demonstrated consistent durability, particularly under low-volume roadway conditions.

In August 2026, the Company received NCAT’s completed report relating to the off-ramp project, which included laboratory testing and real-world placement and evaluation of the off-ramp mix. The report indicated that the formulation remains in development and is not yet ready for commercial deployment. The report was shared with C-Twelve, and the Company has communicated with C-Twelve regarding the report and its findings. The Company’s current go-forward commercialization strategy with Ergon does not contemplate the use of Verde V24 and instead focuses on the 100% RAP cold recycling formulation described above.

Commercial Activity

On February 10, 2026, the Company received its first two purchase orders from Ergon for the Company’s proprietary, licensed cold mix biochar asphalt emulsifying agent, Verde V24, the sale of which occurred during the quarter ending March 31, 2026. The gross revenue generated from these purchase orders was approximately $460,000 and the related receivable was fully collected from Ergon in April 2026. This event represented the Company’s first commercial transaction following the execution of the Ergon license in October 2025. See Note 3 – Strategic Commercial Agreements for details on the Ergon arrangements.

Geographic Expansion

On March 30, 2026, the Company established Verde Resources Asia Pacific Pte. Ltd. (“VRAPPL”), a private company limited by shares incorporated under the laws of the Republic of Singapore and a wholly owned subsidiary of the Company. The subsidiary’s primary activity is research and experimental development in biotechnology (excluding medical sciences). The establishment of VRAPPL follows several months of discussions with Singapore’s Economic Development Board (“ECB”) and Land Transport Authority (“LTA”) and advances the Company’s previously stated strategy to license its Net Zero Blueprint and related technologies globally, beginning with Singapore as its Asia Pacific headquarters. This initiative is expected to support the future generation and trading of carbon removal credits and serve as a foundation for the Company’s expansion across the region.

If these initiatives progress successfully, they could create demand for the Company’s biochar products and support the phased resumption and potential expansion of operations at its BioFraction™ facility in Sabah, Malaysia. Any such opportunities remain subject to further evaluation and significant uncertainties, including, but not limited to, successful project implementation, negotiation of definitive agreements, access to sufficient capital to fund the expansion, and receipt of required governmental, regulatory and other third-party approvals.

VERDE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Corporate Structure Changes

Pursuant to an Intellectual Property Transfer Agreement dated October 15, 2025, Bio Resources Limited (“BRL”), a wholly owned subsidiary of the Company, transferred to Verde Resources Asia Pacific Limited (“VRAP”), another wholly owned subsidiary of the Company, all rights, title and interest in the intellectual property known as Catalytic Biofraction Process at its carrying value of $30,192,771 as of that date. Following the completion of the transfer, BRL was administratively dissolved by being struck off the registers of the Labuan Financial Services Authority on October 19, 2025.

As of June 30, 2026, the Company has the following subsidiaries: 

 SCHEDULE OF SUBSIDIARIES DETAILS

Unless context indicates otherwise, Verde Resources, Inc. and its subsidiaries are hereinafter referred to as the “Company.”

VERDE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)