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EX-31 - RULE 13A-14(A) / 15D-14(A) CERTIFICATION OF CHIEF EXECUTIVE & FINANCIAL OFFICER - VERDE RESOURCES, INC.ex31_verde.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10–Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2012

 

or

 

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ____________ to ________________

 

Commission file number: 333-170935

 

Verde Resources, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Nevada

 

27-2448672

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

 

 

 

905 Ventura Way, Mill Valley, CA 94941

(Address of principal executive offices)

 

(415) 251-8715

(Registrant’s telephone number, including area code)

 

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes [X]  No [] 

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes [X] No [  ]

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one).

 

Large accelerated filer [ ]

 

Accelerated filer [ ]

Non-accelerated filer [ ]

 

Smaller reporting company [X]

(Do not check if a smaller reporting company)

 

 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] No [X ]

 

As of October 25, 2012 there were 3,977,500 shares of the issuer’s common stock, par value $0.001, outstanding.

 

 


 

 

VERDE RESOURCES, INC.

 

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2012

TABLE OF CONTENTS

 

 

 

2


 

 

PART I – FINANCIAL INFORMATION

 

Item 1.      Financial Statements.

 

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC"), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company's Form 10-K filed with the SEC on September 28, 2012. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the periods presented have been reflected herein. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year ending June 30, 2013.

 

 

VERDE RESOURCES, INC.

 

(An Exploration Stage Company)

 

INDEX TO INTERIM FINANCIAL STATEMENTS

 

FOR THE PERIOD OF APRIL 22, 2010 (INCEPTION) TO SEPTEMBER 30, 2012

 

      

 

Page

 

 

Balance Sheets

4

 

 

Statements of Operations

5

 

 

Statement of Changes in Stockholders’ Equity (Deficit)

6

 

 

Statements of Cash Flows

7

 

 

Notes to Financial Statements

8

 

 


 

 

 

Verde Resources, Inc.

(An Exploration Stage Company)

Balance Sheets

 

 

As at

 

As at

 

September 30,

 

June 30,

 

2012

 

2012

ASSETS

(Unaudited)

 

 

 

Current Assets

 

 

 

 

 

Cash and cash equivalents

$

22,527

 

$

31,502

Total Current Assets

 

22,527

 

 

31,502

 

 

 

 

 

 

TOTAL ASSETS

$

22,527

 

$

31,502

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

 

 

 

Current Liabilities

 

 

 

 

 

Accounts payable

$

1,622

 

$

1,121

Notes payable – related party

 

31,000

 

 

31,000

Total Current Liabilities

 

32,622

 

 

32,121

 

 

 

 

 

 

TOTAL LIABILITIES

 

32,622

 

 

32,121

 

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ DEFICIT

 

 

 

 

 

Preferred stock, par value $0.001, 50,000,000 shares

authorized, none issued and outstanding

 

-

 

 

-

Common stock, par value $0.001, 100,000,000 shares

authorized, 3,977,500 shares issued and outstanding

 

3,978

 

 

3,978

Additional paid-in capital

 

80,122

 

 

80,122

Deficit accumulated during the exploration stage

 

(94,195)

 

 

(84,719)

Total Stockholders’ Deficit

 

(10,095)

 

 

(619)

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT

$

22,527

 

$

31,502

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

4


 

 

Verde Resources, Inc.

(An Exploration Stage Company)

Statements of Operations

(Unaudited)

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Cumulative

From Inception

(April 22, 2010) to

September 30,

 

 

 

 

 

 

 

2012

 

 

2011

 

2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REVENUES:

 

 

 

 

 

$

-

 

$

-

 

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

Mining property costs

 

 

 

 

 

 

907

 

 

840

 

 

27,656

General and administrative

 

 

 

 

 

 

608

 

 

652

 

 

3,688

Professional fees

 

 

 

 

 

 

7,961

 

 

8,562

 

 

62,851

Total Operating Expenses

 

 

 

 

 

 

9,476

 

 

10,054

 

 

94,195

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

-

 

 

-

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS

 

 

 

 

 

 

$

 

(9,476)

 

$

(10,054)

 

$

(94,195)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted Loss per Common Share  

 

 

 

 

 

 

$

 

(0.00)

 

$

(0.00)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Number of Common Shares Outstanding

 

 

 

 

 

 

 

3,977,500

 

 

2,500,000

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

5


 

 

Verde Resources, Inc.

(An Exploration Stage Company)

Statement of Changes in Stockholders’ Equity (Deficit)

For the Period of Inception (April 22, 2010) to September 30, 2012

 

 

Common Shares

 

 

Additional Paid-In

 

Deficit Accumulated During the Exploration

 

Total Stockholders’

 

Shares

 

Amount

 

Capital

 

Stage

 

Equity (Deficit)

 

 

 

 

 

 

 

 

 

 

Balance- April 22, 2010 (Inception)

-

$

-

$

-

$

-

$

-

 

 

 

 

 

 

 

 

 

 

Common shares issued for cash at $0.01

per share

2,500,000

 

2,500

 

22,500

 

-

 

25,000

Loss for the period

-

 

-

 

-

 

(11,788)

 

(11,788)

Balance – June 30, 2010

2,500,000

 

2,500

 

22,500

 

(11,788)

 

13,212

 

 

 

 

 

 

 

 

 

 

Loss for the year

-

 

-

 

-

 

(31,375)

 

(31,375)

Balance – June 30, 2011

2,500,000

 

2,500

 

22,500

 

(43,163)

 

(18,163)

 

 

 

 

 

 

 

 

 

 

Common shares issued for cash at $0.04

per share

1,477,500

 

1,478

 

57,622

 

-

 

59,100

Loss for the year

-

 

-

 

-

 

(41,556)

 

(41,556)

Balance – June 30, 2012

3,977,500

 

3,978

 

80,122

 

(84,719)

 

(619)

 

 

 

 

 

 

 

 

 

 

Loss for the period (unaudited)

-

 

-

 

-

 

(9,476)

 

(9,476)

Balance – September 30, 2012 (unaudited)

3,977,500

$

3,978

$

80,122

$

(94,195)

$

(10,095)

 

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

 

6


 

 

Verde Resources, Inc.

(An Exploration Stage Company)

Statements of Cash Flows

(Unaudited)

 

 

Three Months Ended September 30,

 

Cumulative

From Inception

(April 22, 2010) to

September 30,

 

 

2012

 

 

2011

 

2012

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

Net loss

$

(9,476)

 

$

(10,054)

 

$

(94,195)

 

 

 

 

 

 

 

 

 

Changes in Operating Assets and Liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

501

 

 

207

 

 

1,622

Net cash used in operating activities

 

(8,975)

 

 

(9,847)

 

 

(92,573)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Net cash provided by (used in) investing activities

 

-

 

 

-

 

 

-

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Proceeds received from notes payable - related party

 

-

 

 

5,000

 

 

32,000

Payments on notes payable – related party

 

-

 

 

-

 

 

(1,000)

Issuance of common stock for cash

 

-

 

 

-

 

 

84,100

Net cash provided by financing activities

 

-

 

 

5,000

 

 

115,100

 

 

 

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

(8,975)

 

 

(4,847)

 

 

22,527

 

 

 

 

 

 

 

 

 

Cash and cash equivalents - beginning of period

 

31,502

 

 

11,447

 

 

-

 

 

 

 

 

 

 

 

 

Cash and cash equivalents - end of period

$

22,527

 

$

6,600

 

$

22,527

 

 

 

 

 

 

 

 

 

Supplemental Cash Flow Disclosure:

 

 

 

 

 

 

 

 

Cash paid for interest

$

-

 

$

-

 

$

-

Cash paid for income taxes

$

-

 

$

-

 

$

-

 

The accompanying notes are an integral part of these financial statements.

 

7


 

 

 

Verde Resources, Inc.

(An Exploration Stage Company)

Notes to Financial Statements

September 30, 2012

(Unaudited)

 

 

NOTE 1 -     DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

 

Verde Resources, Inc. (the “Company”) was incorporated on April 22, 2010 in the State of Nevada, U.S.A.  The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America, and the Company’s fiscal year end is June 30.

 

The Company is an exploration stage company that intends to engage principally in the acquisition, exploration and development of resource properties. The Company signed an option agreement to acquire a property (Note 6). Prior to this, the Company’s activities had been limited to its formation and the raising of equity capital.

 

Exploration Stage Company

 

The Company is considered to be in the exploration stage as defined in ASC 915-10-05 “Development Stage Entities,” and interpreted by the Securities and Exchange Commission for mining companies in Industry Guide 7.  The Company is devoting substantially all of its efforts to development of business plans and the acquisition of mineral properties.  

 

Interim Financial Statement Presentation

 

The accompanying financial statements have been prepared by the Company without audit.  In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at September 30, 2012, and for all periods presented herein, have been made.

 

It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the Company's June 30, 2012 audited financial statements.  The results of operations for the periods ended September 30, 2012 and 2011 are not necessarily indicative of the operating results for the full years.

 

NOTE 2 -     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period.  Actual results could differ from those estimates. The Company’s periodic filings with the Securities and Exchange Commission include, where applicable, disclosures of estimates, assumptions, uncertainties and markets that could affect the financial statements and future operations of the Company.

 

Cash and Cash Equivalents

 

Cash and cash equivalents include cash in banks, money market funds, and certificates of term deposits with maturities of less than three months, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value.  The Company had $22,527 and $31,502 in cash and cash equivalents at September 30, 2012 and June 30, 2012, respectively.

 

 

 

 

8


 

 

Mineral Acquisition and Exploration Costs

 

The Company has been in the exploration stage since its formation on April 22, 2010 and has not yet realized any revenue from its planned operations. It has been primarily engaged in the acquisition, exploration, and development of mining properties.  Mineral property acquisition and exploration costs are expensed as incurred.  When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs incurred to develop such property are capitalized.  Such costs will be amortized using the units-of-production method over the estimated life of the probable reserves.

 

Start-Up Costs

 

In accordance with ASC 720-15-20, “Start-Up Costs,” the Company expenses all costs incurred in connection with the start-up and organization of the Company.

 

Net Income or (Loss) Per Share of Common Stock

 

The Company has adopted ASC Topic No. 260, “Earnings Per Share,” (“EPS”) which requires presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures, and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation.  In the accompanying financial statements, basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period.

 

The following table sets forth the computation of basic and diluted earnings per share:

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

 

 

 

 

 

 

2012

 

 

2011

 

 

 

 

 

 

 

 

Net loss applicable to common shares

 

 

$

(9,476)

 

$

(10,054)

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares

 

 

 

 

 

 

 

outstanding (Basic)

 

 

 

 

3,977,500

 

 

2,500,000

 

Options

 

`

 

 

 

-

 

 

-

 

Warrants

 

 

 

 

 

-

 

 

-

Weighted average common shares

 

 

 

 

 

 

 

outstanding (Diluted)

 

 

 

 

3,977,500

 

 

2,500,000

 

 

 

 

 

 

 

 

 

 

 

Net loss per share (Basic and Diluted)

 

 

$

(0.00)

 

$

(0.00)

 

The Company has no potentially dilutive securities, such as options or warrants, currently issued and outstanding.

 

Concentrations of Credit Risk

 

The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents and related party payables it will likely incur in the near future.  The Company places its cash and cash equivalents with financial institutions of high credit worthiness.  At times, its cash and cash equivalents with a particular financial institution may exceed any applicable government insurance limits.  The Company’s management plans to assess the financial strength and credit worthiness of any parties to which it extends funds, and as such, it believes that any associated credit risk exposures are limited.

 

Risks and Uncertainties

 

The Company operates in the resource exploration industry that is subject to significant risks and uncertainties, including financial, operational, technological, and other risks associated with operating a resource exploration business, including the potential risk of business failure.

 

 

9


 

 

Environmental Expenditures

 

The operations of the Company have been, and may in the future be, affected from time to time in varying degree by changes in environmental regulations, including those for future reclamation and site restoration costs.  Both the likelihood of new regulations and their overall effect upon the Company vary greatly and are not predictable.  The Company’s policy is to meet or, if possible, surpass standards set by relevant legislation by application of technically proven and economically feasible measures.

 

Environmental expenditures that relate to ongoing environmental and reclamation programs are charged against earnings as incurred or capitalized and amortized depending on their future economic benefits.  All of these types of expenditures incurred since inception have been charged against earnings due to the uncertainty of their future recoverability.  Estimated future reclamation and site restoration costs, when the ultimate liability is reasonably determinable, are charged against earnings over the estimated remaining life of the related business operation, net of expected recoveries.

 

Recent Accounting Pronouncements

 

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

NOTE 3 -   CAPITAL STOCK

 

Authorized Stock

 

The Company has authorized 100,000,000 common shares and 50,000,000 preferred shares, both with a par value of $0.001 per share.  Each common share entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought.

 

Share Issuance

 

Since inception (April 22, 2010) to September 30, 2012, the Company has issued 2,500,000 and 1,477,500 common shares at $0.01 and $0.04 per share, respectively, resulting in total cash proceeds of $84,100, being $3,978 for par value shares and $80,122 for capital in excess of par value.  There were 3,977,500 common shares issued and outstanding at September 30, 2012 and June 30, 2012.  Of these shares, 2,500,000 were issued to directors and officers of the Company.  

 

There are no preferred shares outstanding.  The Company has issued no authorized preferred shares.  The Company has no stock option plan, warrants, or other dilutive securities.

 

NOTE 4 -     PROVISION FOR INCOME TAXES

 

The Company recognizes the tax effects of transactions in the year in which such transactions enter into the determination of net income, regardless of when reported for tax purposes. Deferred taxes are provided in the financial statements under ASC 718-740-20 to give effect to the resulting temporary differences which may arise from differences in the bases of fixed assets, depreciation methods, allowances, and start-up costs based on the income taxes expected to be payable in future years.

 

Exploration stage deferred tax assets arising as a result of net operating loss carryforwards have been offset completely by a valuation allowance due to the uncertainty of their utilization in future periods. Operating loss carryforwards generated during the period from April 22, 2010 (date of inception) through September 30, 2012 of $94,195 will begin to expire in 2030. The provision for income taxes differs from the

amounts which would be provided by applying the combined statutory federal and state income tax rate of 43.8% to net the loss before provision for income taxes for the following reasons:

 

 

 

September 30, 2012

 

 

September 30, 2011

Income tax expense at statutory rate

$

          (4,150)

 

$

             (4,404)

Change in Valuation allowance

 

4,150

 

 

4,404

Income tax expense per books

$

                    -

 

$

                     -

 

10


 

 

 

          Net deferred tax assets consist of the following components as of:

 

 

 

September 30, 2012

 

 

June 30, 2012

NOL carryover

$

            94,195

 

$

84,719

Valuation allowance

 

 (94,195)

 

 

        (84,719)

Net deferred tax asset

$

                   -

 

$

                      -

 

The Company follows the provisions of uncertain tax positions as addressed in FASC 740-10-65-1. The Company recognized approximately no increase in the liability for unrecognized tax benefits.

 

The Company has no tax position at September 30, 2012 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. No such interest or penalties were recognized during the periods presented. The Company had no accruals for interest and penalties at September 30, 2012. The Company’s utilization of any net operating loss carry forward may be unlikely as a result of its intended exploration stage activities. All tax years from inception are open for examination.

 

NOTE 5 -     DUE TO RELATED PARTY

 

As of September 30, 2012 and June 30, 2012, the Company was obligated to a director, who is also an officer and stockholder, for a non-interest bearing demand loan with a balance of $31,000. The Company plans to pay the loan back as cash flows become available.

 

A director of the Company, through his association with Gold Explorations, LLC (see below), will receive compensation for the work and exploration programs performed on the property.  Gold Explorations, LLC received $25,000 per our Mineral Claim Purchase Agreement, as described in Note 6.

 

NOTE 6 -     MINERAL PROPERTY COSTS

 

By agreement dated May 17, 2010, as amended on February 8, 2012, with Gold Explorations, LLC, of Minden, Nevada, the Company acquired an option to earn a 100% undivided interest in certain properties consisting of 6 unpatented mineral claims (the “Property”), located in Esmeralda County, Nevada, USA.

 

Upon execution of the agreement, Gold Explorations, LLC transferred 100% interest in the mineral claims to the Company for $100,000 to be paid, at the Company’s option, as follows:

 

Cash Payments

Upon signing of the agreement and transfer of title (paid)

$

10,000

On or before May 17, 2011 (paid)

 

5,000

On or before May 17, 2012 (paid)

 

10,000

On or before May 17, 2013

 

10,000

On or before May 17, 2014

 

10,000

On or before May 17, 2015

 

55,000

 

$

100,000

 

All payments shall be made within 30 days of the due date or the Property and all rights will revert back to Gold Explorations, LLC.

 

In addition, the Company must incur exploration expenditures of $50,000 on the Property by May 17, 2015.  The Company has a report recommending a work program of $10,000.  A Bio Gem Chem sampling is proposed which will sample along the main strike of the Property and will also sample at the fault area on the southern end of the claims.  The recommended program will be part of the expenditure commitment and must be completed in 2012. 

 

 

11


 

 

The Company is also responsible for maintaining the mineral claims in good standing by paying all the necessary rents, taxes, and filing fees associated with the Property.   As of September 30, 2012, the Company met these obligations.

 

The Property is subject to a 3% royalty, to Gold Explorations, LLC, on all mineral commodities sold from the Property.  This royalty shall be reduced to 1.5% upon payment to Gold Explorations, LLC of $1,000,000 USD at any time. As of September 30, 2012, no such royalties were incurred or payable.

 

NOTE 7 -     GOING CONCERN AND LIQUIDITY CONSIDERATIONS              

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business.  As of and for the period ended September 30, 2012, the Company has a loss from operations of $9,476, an accumulated deficit of $94,195, and working capital deficiency of $10,095, and has earned no revenues since inception.  The Company intends to fund operations through debt and equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the year ending June 30, 2013 and subsequently.

 

The ability of the Company to emerge from the exploration stage is dependent upon, among other things, obtaining additional financing to continue operations, and development of its business plan.

 

In response to these problems, management intends to raise additional funds through public or private placement offerings, and related party loans.

 

These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.  The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

NOTE 8 -     SUBSEQUENT EVENTS

 

The Company has evaluated subsequent events from the balance sheet date through the date the financial statements were issued and determined there are no additional items to disclose.

 

12


 

 

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

Forward-Looking Statements

 

Except for historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  Such forward-looking statements involve risks and uncertainties, including, among other things, statements regarding our business strategy, future revenues and anticipated costs and expenses.  Such forward-looking statements include, among others, those statements including the words “expects,” “anticipates,” “intends,” “believes” and similar language.  Our actual results may differ significantly from those projected in the forward-looking statements.  Factors that might cause or contribute to such differences include, but are not limited to, those discussed herein as well as in the “Description of Business – Risk Factors” section in our Annual Report on Form 10-K, as filed on September 28, 2012.  You should carefully review the risks described in our Annual Report and in other documents we file from time to time with the Securities and Exchange Commission.  You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report.  We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances after the date of this document.

 

Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements.

 

All references in this Form 10-Q to the “Company,” “Verde Resources,” “we,” “us,” or “our” are to Verde Resources, Inc.

 

 

Results of Operations

 

We have generated no revenues since inception and have incurred $94,195 in expenses through September 30, 2012.

 

The following table provides selected financial data about our company for the three months ended September 30, 2012 and year ended June 30, 2012. 

 

Balance Sheet Date

 

9/30/12

 

6/30/12

 

 

 

 

 

 

 

Cash

 

$

22,527

 

$

31,502

Total Assets

 

$

22,527

 

$

31,502

Total Liabilities

 

$

32,622

 

$

32,121

Stockholders’ Deficit

 

$

10,095

 

$

619

 

Plan of Operation

 

We are a start-up, exploration-stage company and have not yet generated or realized any revenues from our business operations.

 

Our auditors have issued a going concern opinion on our audited financial statements for the year ended June 30, 2012.  This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills.  This is because we have not generated any revenues and no revenues are anticipated until we begin removing and selling minerals.  There is no assurance we will ever reach this point.  Accordingly, we must raise cash from sources other than the sale of minerals found on the Property.  That cash must be raised from other sources.  Our only other source for cash at this time is investments by others.  We must raise cash to implement our project and stay in business. As of September 30, 2012, the Company had $22,527 in cash on hand.

 

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We will be conducting research in the form of exploration of the Property.  Our exploration program is explained in as much detail as possible in the business section of this Annual Report.  We are not going to buy or sell any plant or significant equipment during the next twelve months.

 

The Property, consisting of 6 lode mining claims, is located in Esmeralda County, Nevada and is called the “Payday Claims.”

 

Our exploration target is to find an ore body containing gold.  Our success depends upon finding mineralized material.  This includes a determination by our consultant if the Property contains reserves.  We have not selected a consultant as of the date of this report, but expect to retain such services within the next three months.  Mineralized material is a mineralized body, which has been delineated by appropriate spaced drilling or underground sampling to support sufficient tonnage and average grade of metals to justify removal.  If we do not find mineralized material or we cannot remove mineralized material, either because we do not have the money to do it or because it is not economically feasible to do it, we will cease operations.

 

In addition, we may not have enough money to complete our exploration of the Property.  If we have not raised enough money to complete our exploration program, we will try to raise additional funds from a second public offering, a private placement, or loans.  Except for the verbal offer to advance funds by our directors (See, Liquidity and Capital Resources, below), we have not made any plans to raise additional money and there is no assurance that we would be able to raise additional money in the future.  If we are unsuccessful in raising additional funds, we will have to suspend or cease operations.

 

We must conduct exploration to determine what amount of minerals, if any, exist on our properties, and if any minerals which are found can be economically extracted and profitably processed.

 

The Property is undeveloped raw land, owned by the Bureau of Land Management (“BLM”).  To our knowledge, except as noted herein, the Property has never been mined.  The only event that has occurred is the locating and the recording of the lode mining claims under the direction of Gold Explorations, LLC.

 

Before mineral retrieval can begin, we must explore for and find mineralized material.  After that has occurred, we have to determine if it is economically feasible to remove the mineralized material.  Economically feasible means that the costs associated with the removal of the mineralized material will not exceed the price at which we can sell the mineralized material.  We cannot predict what the costs will be until we find mineralized material.

 

We do not know if we will find mineralized material.  We believe that activities occurring on adjoining properties are not material to our activities.  The reason is that whatever is located under adjoining properties may or may not be located under our Property.

 

We do not claim to have any minerals or reserves whatsoever at this time on any of the Property.

 

We intend to implement an exploration program which involves biogeochemistry surveys, involving the collection and chemical analysis of whole plants, or humus.  The proposed sampling will be along the main strike of the Property and the fault area on the southern end of the claims.  This work will be done by a skilled technician, sampling sagebrush, and will return 100 samples.  The samples will then be reduced to ash and the ash analyzed.  The objective of this work would be to determine if there is an economically recoverable gold resource that has been overlooked on this Property.  This initial phase of work will provide enough information to allow the Company to decide whether or not to proceed to the next phase of exploration.

 

 

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Based upon the results of the exploration, the Board of Directors will determine, in consultation with our consultants, if further exploration work will be done.  Mr. Spalding, a director, will not receive fees for his services.  The proceeds we received from our recent public offering are designed only to fund the costs of an exploration program recommended by Steve Karolyi, director.  Additional funding will be required to take the Property to a more advanced stage of exploration.

 

We estimate the cost of the proposed work program to be $10,000.  The biogeochemistry sampling will cost $7,500 and the cost of supervision will be $2,500.  The supervision includes the costs of truck rentals, accommodations and surveying in grid lines to guide the work.  We estimate it will take up to 15 - 25 working days to complete the program.  We will begin the program during the next three months, weather permitting.

 

If we are unable to complete any phase of exploration because we do not have sufficient capital, we will cease operations until we raise more money.  If we cannot or do not raise additional capital, we will cease operations.  If we cease operations, we do not have any additional plans at this time.

 

We do not intend to hire additional employees at this time.  All of the work on the Property will be conducted by unaffiliated independent contractors that we will hire.

 

Limited Operating History; Need for Additional Capital

 

There is no historical financial information about us upon which to base an evaluation of our performance.  We are an exploration stage corporation and have not generated any revenues from operations.  We cannot guarantee we will be successful in our business operations.  Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in the exploration of our properties, and possible cost overruns due to price and cost increases in services.

 

To become profitable and competitive, we must conduct the research and exploration of our properties before we start production of any minerals we may find.  We sought equity financing to provide for the capital required to implement our research and exploration phases.  We believe that the funds raised from our offering will allow us to operate for one year. 

 

We have no assurance that future financing will be available to us on acceptable terms.  If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations.  Equity financing could result in additional dilution to existing shareholders.

 

Liquidity and Capital Resources

 

To meet our need for cash we raised money from our recent public offering.  We raised $59,100 from the sale of 1,477,500 registered shares pursuant to our S-1 Registration Statement filed with the SEC under file number 333-170935, which became effective on July 14, 2011 and closed on April 9, 2012, which was the last date we could sell shares under the Prospectus.

 

Two of our directors, Stephen Spalding and Michael Stiege, have verbally agreed to advance funds, on an as-needed basis, to assist in start-up operations, including expenses associated with our current offering, and to continue limited operations if sufficient funds are not raised in our offering. The directors both proposed the verbal commitment to loan in order to ensure that the Company would be able to continue its operations in the event sufficient funds are not raised in our offering.  While they have agreed to advance the funds, the agreement is verbal.  Because there is no written agreement to loan funds and the verbal agreement may be withdrawn at any time, the verbal agreement is unenforceable.  To date, Stephen Spalding, one of our officers and directors, is the only director to advance funds to the Company.  As of September 30, 2012, Mr. Spalding has advanced $31,000, net payments.

 

We received our initial funding of $25,000 through the sale of common stock to Stephen Spalding, who purchased 500,000 and 1,500,000 shares of common stock at $0.01 on May 4, 2010, and June 25, 2010, respectively, and Michael Stiege who purchased 500,000 shares of common stock at $0.01 on June 25, 2010.  During the year ended 30, 2012, we issued 1,477,500 shares of common stock at $0.04, resulting in total shares issued and outstanding as of September 30, 2012 of 3,977,500. From inception until the date of this filing, we have had limited operating activities.  Our financial statements from inception (April 22, 2010) through the period ended September 30, 2012, reported no revenues and a net loss of $94,195.

 

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Off-Balance Sheet Arrangements

 

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to investors.

 

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

 

As a “smaller reporting company”, we are not required to provide the information required by this Item.

 

Item 4.  Controls and Procedures.

 

Management’s Report on Disclosure Controls and Procedures

 

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president (our principal executive officer, principal financial officer and principle accounting officer) to allow for timely decisions regarding required disclosure.

As of the end of the quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our president (our principal executive officer, principal financial officer and principle accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president (our principal executive officer, principal financial officer and principle accounting officer) concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.

 

Changes in Internal Control over Financial Reporting

 

There have been no changes in our internal controls over financial reporting that occurred during the quarter ended September 30, 2012, that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.

 

PART II – OTHER INFORMATION

 

Item 1.  Legal Proceedings.

 

We know of no material, existing or pending legal proceedings against our Company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

 

Item 1A.  Risk Factors.

 

As a “smaller reporting company”, we are not required to provide the information required by this Item.

 

 


 

 

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

 

None.

 

Item 3.  Defaults Upon Senior Securities.

 

None.

 

Item 4.  Mine Safety Disclosure.

 

None.

 

Item 5.  Other Information.

 

None.

 

Item 6.  Exhibits.

 

The following exhibits are included as part of this report:

Exhibit No.                  Description 

31.1 / 31.2             Rule 13(a)-14(a)/15(d)-14(a) Certification of Principal Executive and Financial Officer

32.1 / 32.2             Rule 1350 Certification of Principal Executive and Financial Officer

101.INS*               XBRL Instance

101.SCH*              XBRL Taxonomy Extension Schema

101.CAL*              XBRL Taxonomy Extension Calculations

101.DEF*              XBRL Taxonomy Extension Definitions

101.LAB*              XBRL Taxonomy Extension Labels

101.PRE*              XBRL Taxonomy Extension Presentation

 

*  XBRL Information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

 

 

 

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SIGNATURES  

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

VERDE RESOURCES, INC.  

 

(Registrant)

 

 

 

 

Dated: October 30, 2012

/s/ Stephen Spalding  

 

Stephen Spalding  

 

President, Chief Executive Officer, Chief Financial Officer, Treasurer and Director

 

(Principal Executive, Financial, and Accounting Officer)

 

 

 

 

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