Executive Summary / Key Takeaways

• Verde Resources ($VRDR) is pioneering sustainable infrastructure with its BioAsphalt and Verde V24 technologies, which integrate biochar to create carbon-sequestering road materials that exceed traditional performance standards and generate verifiable carbon removal credits.
• A pivotal 10-year exclusive licensing agreement with Ergon Asphalt Emulsions, North America's largest asphalt marketer, establishes an asset-light, scalable business model poised for near-term revenue generation and global expansion, significantly de-risking market entry.
• Technological validation by the National Center for Asphalt Technology (NCAT) confirms superior durability, cohesion, and moisture resistance, alongside the world's first Puro.earth-certified carbon removal credits from asphalt production, creating a unique competitive moat.
• Despite a history of operating losses and a current reliance on equity financing, the strategic Ergon partnership, coupled with a $2 million investment and the burgeoning $100 billion carbon removal market, presents a compelling long-term growth narrative.
• Key risks include significant revenue concentration on Ergon, the need for substantial additional capital (including a $3 million commitment to C-Twelve contingent on NASDAQ uplisting), and identified material weaknesses in internal financial controls.

The Dawn of Sustainable Infrastructure: Verde's Vision for a Carbon-Negative Future

Verde Resources, Inc. ($VRDR) is transforming the road construction and building materials industry with a singular mission: enabling the "Transition to Zero." Incorporated in 2010, the company has undergone a significant strategic pivot, divesting legacy mining and CBD businesses by 2023 and 2024, respectively, to focus entirely on proprietary, environmentally sustainable infrastructure technologies. This strategic shift positions Verde at the nexus of two rapidly expanding global markets: sustainable building materials and carbon removal.

The global road construction market, valued at $572.90 billion in 2023 and $188 billion in North America in 2024, is projected for continued growth through 2032, driven by increasing infrastructure investment and a critical shift towards sustainable materials. Concurrently, the global market for carbon dioxide removal (CDR) credits is anticipated to surge from approximately $2.70 billion in 2023 to as much as $100 billion annually by 2030-2035, fueled by accelerating data center energy consumption from artificial intelligence and corporate net-zero commitments. Verde's innovative approach directly addresses these converging demands, offering high-performance, low-carbon infrastructure solutions that deliver both environmental impact and economic value.

Technological Edge: The Verde Net Zero Blueprint

Verde's core investment thesis is deeply rooted in its differentiated proprietary technologies, collectively forming the "Verde Net Zero Blueprint." This portfolio of validated solutions enables the production of sustainable infrastructure materials with the integrated ability to generate certified carbon removal credits, transforming carbon sequestration into a monetizable feature.

At the heart of this blueprint is Cold Mix Biochar Asphalt, utilizing Verde's proprietary Verde V24 emulsifying agent. This innovative surface course incorporates biochar, a stable form of carbon derived from organic waste, and is formulated to create a specialized emulsion that facilitates a strong bond between carbon and aggregate. Unlike traditional hot mix asphalt, which demands high temperatures and generates significant greenhouse gas emissions, Verde's solution is applied at ambient temperature and activated with water, eliminating the need for heat or solvents. This results in a durable, cost-effective material suitable for year-round use, even in cold-weather climates.

The performance of Verde's BioAsphalt has received critical third-party validation from the National Center for Asphalt Technology (NCAT). In July 2025, preliminary performance results from NCAT's Test Track demonstrated consistent durability, particularly under low-volume roadway conditions, after approximately 50,000 equivalent single-axle loads (ESALs) of heavy truck traffic. More recently, in September 2025, NCAT's evaluation of Verde's cold recycling mix, utilizing 100% reclaimed asphalt pavement (RAP), revealed that it "not only meets but exceeds industry specifications for cold-recycled asphalt". The results highlighted "superior cohesion, high tensile strength ratio (TSR), and retained stability compared to standard cold mix benchmarks, validating its strength, durability, and moisture resistance". Crucially, this marks the "first carbon-sequestering asphalt surface course to maintain competitive strength and flexibility for road applications and to enable the issuance of verified carbon removal credits".

Complementing its asphalt technology, Verde also offers TerraZyme Enzyme-Based Soil Stabilization. This proprietary enzyme-based catalyst is engineered to improve the strength, durability, and moisture resistance of native soils, serving as a sustainable alternative for road base preparation, subgrade stabilization, and erosion control. TerraZyme works by catalyzing a natural reaction in clay-bearing soils, reducing permeability, minimizing swelling, and significantly enhancing load-bearing capacity without the need for imported aggregates or traditional binders. This low-emission, cost-effective solution requires less equipment and labor, delivering at least 30% cost savings and reducing sourcing and transportation expenses. It notably eliminates the need for stabilizing lime in A-6 clay subgrades and cuts Portland cement usage by over 60% compared to traditional methods, drastically slashing the carbon footprint. Verde currently accesses TerraZyme through a Memorandum of Understanding with Nature Plus Inc. (NPI) and is negotiating an exclusive worldwide license.

Further enhancing its technological ecosystem is the Catalytic BioFraction Process, operated from Verde's BioFraction facility in Borneo. This slow pyrolysis process converts organic waste, such as palm biomass, into valuable byproducts including biochar, biofuel, bio-syngas, and wood vinegar. The facility, capable of producing up to 6,000 tons of biochar annually, was strategically set to dormant status to prioritize U.S.-based validation efforts but is poised for reactivation to support Southeast Asian expansion.

The "so what" for investors is clear: Verde's integrated suite of technologies provides a compelling, validated, and environmentally superior alternative to conventional road construction materials. The quantifiable benefits in durability, cost savings, and emissions reduction, coupled with the unique ability to generate certified carbon removal credits, establish a significant competitive moat and a clear pathway to monetizing decarbonization.

Strategic Commercialization and Competitive Positioning

Verde's strategic roadmap for commercialization hinges on an asset-light, licensing-based model, designed for scalable growth with minimal capital intensity. This approach leverages strategic partnerships with established industry players, enabling rapid market penetration without the burden of extensive manufacturing or distribution infrastructure.

A cornerstone of this strategy is the exclusive 10-year licensing agreement signed on October 10, 2025, with Ergon Asphalt Emulsions, Inc.. Ergon, an industry leader and one of North America's largest liquid asphalt and emulsion marketers, will manufacture, commercialize, market, sell, and distribute products containing Verde's proprietary Verde V24 cold mix biochar asphalt emulsifying agent across the United States, Canada, and Mexico. This partnership is expected to enable "immediate scalability and near-term revenue generation" by embedding Verde's technology into Ergon's nationwide business footprint. As part of this collaboration, Verde will provide Ergon with 40% of its share of carbon removal credits generated from the final BioAsphalt surface material, aligning incentives for both performance and environmental impact.

The construction materials industry is highly fragmented and dominated by larger, better-capitalized incumbents. While many are now investing in sustainable product development, Verde believes it holds a significant "first-mover advantage". The company states, "At this time, we do not face direct competition in the development and commercialization of carbon-sequestering asphalt. We are the first to establish a fully validated and licensable Net Zero Blueprint for asphalt". This model presents a "paradigm shift", offering existing producers a new revenue-generating opportunity without requiring an overhaul of their current equipment or vendor relationships.

Verde's competitive advantages are multifaceted:

• Scalable Licensing Model: A capital-light approach leveraging partners' existing infrastructure.
• Next-Generation Road Technologies: Products proven more durable, cost-effective, and environmentally friendly than traditional alternatives.
• Carbon Impact: Solutions reduce Scope 1, 2, and 3 emissions, eliminating high-temperature processing and requiring less electricity.
• Carbon Credit Generation: Enables verified carbon removal credits, opening new revenue streams.
• Integrated Model: Combines material technology with carbon credit generation.
• Verified Carbon Removal: Third-party certified biochar-based carbon removal credits.
• Policy and ESG Alignment: Aligns with global Net Zero targets and climate-resilient procurement.
• First-Mover Positioning: Among the first to commercialize asphalt-integrated biochar with verified carbon credits in the U.S.

These differentiators position Verde to capture market share in an industry increasingly prioritizing sustainability and verifiable climate impact.

Financial Performance and Liquidity: A Transformative Period

Verde's financial performance for the fiscal year ended June 30, 2025, reflects a company in a transformative phase, shifting from legacy businesses to its sustainable infrastructure focus. Revenue for the year increased by 37.90% to $133,202, up from $96,584 in the prior year. This growth was primarily attributable to a favorable "shift in product mix, with greater sales of our higher-margin Biochar Asphalt Premix, which became the predominant revenue driver in 2025". Consequently, gross profit surged by 142.30% to $81,413, compared to $33,606 in 2024, driven by both increased revenues and the higher margins of the Biochar Asphalt Premix.

Despite this positive revenue and gross profit trend, the company reported a net loss of $4.78 million for fiscal year 2025, a 50% increase from the $3.19 million net loss in 2024. The accumulated deficit stood at approximately $18.26 million as of June 30, 2025. This widening loss was largely due to a substantial 104.30% increase in selling, general, and administrative (SG&A) expenses, which reached $5.89 million in 2025, up from $2.88 million in 2024. Key drivers for this increase included a $1.25 million special bonus to CEO Jack Wong, increased consultancy fees, $1.34 million in share-based compensation to nonemployees, and $110,000 in accrued professional fees related to a planned NASDAQ uplisting.

From a liquidity perspective, Verde's cash and cash equivalents increased to $1.02 million as of June 30, 2025, from $279,137 in the prior year. However, net cash used in operating activities also increased significantly by 63.40% to $3.41 million in 2025, indicating a higher cash burn rate. The company has historically relied on equity financing to fund its operations. A positive development for liquidity is the settlement of a $675,888 promissory note to a related party in August 2024 through the issuance of 9.66 million shares of restricted Common Stock, which eliminated debt without using cash and strengthened the balance sheet.

Looking ahead, Verde anticipates minimal business-related capital outlays over the next twelve months, as Ergon's existing infrastructure will support production and distribution. However, a critical capital commitment is the requirement to fund $3 million to C-Twelve by July 31, 2026 (comprising a $2 million loan and a $1 million license fee), contingent upon the company's common stock becoming listed on a U.S. national exchange, such as NASDAQ. This commitment, coupled with the ongoing operational losses, underscores the company's continued need for additional capital. A non-binding term sheet for a $2 million strategic investment from Ergon, expected to close in October 2025, provides a welcome injection of capital and "underscores Ergon's confidence in the long-term growth of Verde's technologies".

Outlook, Guidance, and Risks

Verde's outlook is firmly focused on scaling its North American operations through the Ergon partnership, with an initial emphasis on the United States. Production planning has commenced, and distribution is anticipated through Ergon's established sales channels to asphalt mixing plants across North America. For calendar years beginning January 1, 2027, Ergon has agreed to negotiate minimum purchase amounts for Verde V24, signaling potential for predictable, recurring revenue streams beyond the initial go-to-market period. Following success in North America, Verde plans to expand licensing opportunities to Southeast Asia, leveraging its BioFraction facility in Borneo. The company expects to generate "scalable, high-margin, and recurring revenue stream alongside traditional infrastructure income" from carbon removal credits.

Despite the promising outlook, several risks warrant investor attention. The company's "current business model is unproven" and has a "limited operating history", making future revenue and profitability difficult to predict. There is significant "revenue concentration risk due to reliance on Ergon as a single key customer", especially since Ergon has no minimum purchase requirements until 2027. The Ergon License also contains a clause allowing termination if CEO Jack Wong or COO Eric Bava are removed from their positions for reasons other than cause or voluntary resignation, highlighting a "dependence on certain key personnel".

Furthermore, Verde relies on trade secrets for its core technologies (Verde V24, TerraZyme, Catalytic BioFraction process), which are "difficult to protect", posing a risk if competitors lawfully obtain or independently develop this information. Changes in U.S. climate policy could also "adversely affect the demand for our solutions". Critically, management concluded that "disclosure controls and procedures were not effective due to the material weaknesses in internal controls over financial reporting" as of June 30, 2025, citing issues with segregation of duties, formalized processes, regulatory reporting expertise, and the absence of a dedicated internal audit function. This "material weakness" could impact financial reporting reliability and complicate the planned NASDAQ uplisting. Lastly, the absence of business interruption insurance exposes the company to "unrecoverable losses if our business is interrupted".

Conclusion

Verde Resources stands at a pivotal juncture, transitioning from a diversified past to a focused future as a pioneer in sustainable infrastructure. Its core investment thesis is built on the strength of its validated, carbon-sequestering BioAsphalt and TerraZyme technologies, which offer compelling performance and environmental benefits. The strategic partnership with Ergon Asphalt Emulsions provides a robust commercialization pathway and immediate scalability, while the burgeoning carbon credit market offers a significant, high-margin revenue opportunity.

While the company faces inherent risks associated with its early-stage business model, reliance on a single key customer, and internal control weaknesses, the potential for substantial growth in the sustainable infrastructure and carbon removal sectors is undeniable. Investors considering Verde Resources should weigh the transformative potential of its innovative technologies and strategic alliances against the execution risks and the ongoing need for capital. The successful execution of its asset-light licensing model and the continued monetization of its carbon removal credits will be critical determinants of its long-term value creation.