UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-K

(Mark One)

☒     ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: December 31, 20202022

or

☐     TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission File Number: 333-229399333-269753

+60 1221-26512

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

None

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ 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):

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

StateAs of December 31, 2022, the aggregate market value of the voting and non-voting common equityshares held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter. $0 due to lack of trading market.registrant was approximately $ 48,487,449.

As of March 30, 2021,the date of this filing, there were 171,218,152173,718,152 shares of common stock, no par value, outstanding.

FORWARD-LOOKING STATEMENTS

Certain statements made in this Annual Report on Form 10-K are “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the Registrant to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. The Company’s plans and objectives are based, in part, on assumptions involving the continued expansion of business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance the forward-looking statements included in this Report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved.

Unless stated otherwise, the words “we,” “us,” “our,” or “the Company” or “BioNexus” in this Annual Report collectively refers to BioNexus Gene Lab Corp., a Wyoming corporation and our wholly owned subsidiaries, BioNexus Gene Lab Sdn. Bhd., company registration no:  1139073-T (“BGL” or BioNexus“BioNexus Malaysia”) and Chemrex Corporation Sdn. Bhd., company registration no: 667801-H (“CCSB” or “Chemrex”Chemrex”), both Malaysian companies (“Subsidiaries”). “BGLC” or “BioNexus” refers to BioNexus Gene Lab Corp. “RM” refers to Malaysian Ringgit, the legal currency of Malaysia. “USD,” “US$,” or “$” refer to US dollars, the legal currency of the United States.

We acquired Chemrex on December 31, 2020, pursuant to a Share Exchange Agreement (“Agreement”) with Chemrex its shareholders. We acquired all of the issued and outstanding shares of capital stock of Chemrex from the Chemrex shareholders in exchange for 68,487,261 shares of common stock of  the CompanyBioNexus issued to the Chemrex shareholders.

Our principal corporate office is Unit 02, Level 10, Tower B, Avenue 3, The Vertical Business Suite II, Bangsar South,No. 8 Jalan Kerinchi, Kuala Lumpur, Malaysia, theMalaysia. The BioNexus Malaysia lab is located at Lab 353, Chemical Science Centre, University Science Malaysia, George Town, Penang, Malaysia and it also has a blood collection center located at 1^st floor, Lifecare Medical Centre, Kuala Lumpur, Malaysia. Chemrex offices and supply hub is located at 4 Jalan CJ 1/6 Kawasan Perusahaan Cheras Jaya, Selangor, Malaysia.

Our corporate and BioNexus Malaysia telephone number is (+60) 1221-26512 and its website is www.bionexusgenelab.com. Chemrex’s telephone number is (+60) 1922-23815 and its website is www.chemrex.com.my.

Item 1. Business.

BUSINESS DESCRIPTION

Company Overview

BioNexus Gene Lab Corp., a Wyoming corporation,through our wholly owned subsidiary Chemrex Corporation Sdn. Bhd., focuses on the sale of chemical raw materials for the manufacture of industrial, medical, appliance, aero, automotive, mechanical, and electronic industries in the Southeast Asia region. These countries include Malaysia, Indonesia, Vietnam, and other countries in Southeast Asia.

Furthermore, the Company is also in the business of developing and providing safe, effective, and non-invasive liquid biopsy tests for the early detection of biomarkers that we believe are linked to diseases to minimize treatment costs and improve patient management. Our non-invasive blood tests provide analysis of changes in RNA to detect the potential risk of 11 different diseases. 

Corporate History

BioNexus was incorporated in the State of Wyoming on May 12, 2017.

On August 23, 2017, wethe Company acquired all of the outstanding capital stock of BionexusBioNexus Gene Lab Sdn. Bhd. (formerly BGS Lab Sdn. Bhd.), a Malaysian corporation (“BGL” or “BioNexus Malaysia”). BioNexus Malaysia was incorporated in Malaysia on April 7, 2015.2015, which subsequently changed its name to BioNexus Gene Lab Sdn. Bhd.

On December 31, 2020, BioNexus consummated a Share Exchange Agreement with Chemrex and the Chemrex shareholders, pursuant to which we acquired all of the issued and outstanding shares of capital stock of Chemrex, Corporation Sdn Bhd (“CCSB” or “Chemrex”). Chemrexwhich was incorporated in Malaysia on September 29, 2004.2004, from the Chemrex shareholders in exchange for 68,487,261 shares of common stock of BioNexus issued to the Chemrex shareholders.

Our corporate structure is depicted below:Corporate Structure

The corporate structure as at December 31, 2020 isof the date of this filing depicted below:

Chemical Raw Material Business

Our Products

Chemrex, our wholly owned subsidiary, is involved in the wholesale of chemical raw material products. We purchase raw chemical materials, mostly FRP, from domestic and international manufacturers and sell them to manufacturers in Southeast Asia. The FRP and other raw materials we offer are used to produce a wide variety of goods, including handrails, bench tops, automotive and aero parts, cleanroom panels, and covers for various instruments used in manufacturing.

The following table reflects Chemrex's five top selling products for FY2022, indicated by revenues, finished goods use, and percentage of total revenues of $10,832,891:

As can be seen from the table above, a substantial portion of the Company's revenue comes from the sale of FRP products. FRP products are highly sought after by our customers due to:

BioNexus MalaysiaChemical Raw Material Product Examples

BioNexus Malaysia is an emerging molecular diagnosticsListed below are some examples of FRP chemical raw material products the company focused on the applicationsells. In addition, there are both general purpose and more specific use case materials.

Chemical Raw Material Product Applications

Our chemicals are used to produce a wide variety of functional genomics to enable early diagnosisfinished goods. Common products utilizing our FRP materials include handrails, bench tops, automotive and personalized health management. Our focus is on developingaero parts, paneling for hospital/laboratory/industrial clean rooms, and marketing safe, effectivecovers for various instruments used in manufacturing. Some examples of FRP end-user products manufactured by our customers are displayed below:

Medical and non-invasive blood tests for early detection of diseases in order to minimize treatment costIndustrial Equipment

Platform, Handrail and improve patient management. Our non-invasive blood tests analyze changes in ribonucleic acid (or RNA) to detect the risk potentiality of 11 different diseases. These diseases include eight cancers (nasopharyngeal, lung, liver, stomach, breast, cervical, prostateDecking

Medical appliances

Research and colon), two bowel diseases (colitis and Crohn) and osteoarthritis. This unique blood based genomic biomarker approach is based on the scientific observation that circulating blood reflects, in a detectable way, what is occurring throughout the body currently.Development

The Company believes that its bloodcost analysis of existing and planned research and development (“R&D”) efforts may be up to USD 0.8m. As part of our current research and development efforts, we are working closely with external R&D companies, such as Sift Center Sdn.Bhd. (www.siftcenter.com) and PCA Group Sdn.Bhd. (www.pcagroup.com), to produce and supply FRP products to Shell petrol stations. Sift Center Sdn. Bhd. and PCA Group Sdn. Bhd. are attempting to use the infusion vacuum process to produce Electrical Vehicle (EV) charging and hydrogen fueling stations. As part of our collaboration, we will provide the resin and fiberglass required to produce the infusion vacuum chamber and our technical expertise regarding the viability of the design.

Sales and Marketing

Our Chemical Raw Material Customers

Most of our existing customers are well-established manufacturers and contractors with long-term relationships with Chemrex who regularly place orders. Typically, they would give us a forecast of the products they need and place their orders monthly. Our top five customers, based genomic screening protocolon revenue, accounted for approximately 30.92% of our revenue for the fiscal year ended December 31, 2022.

From time to time, we assist customers with their new product development or projects with suitable and compatible raw materials. In addition, leveraging on our prior successful dealings with local and international raw materials manufacturers, we often collaborate with our customer's research teams to meet their new product needs, such as the various technical and aesthetic requirements of their new products or projects.

Our Chemical Raw Material Suppliers

We consider our major vendors in each period to be those vendors that accounted for more than 10% of overall purchases in such period. We had four suppliers accounted for 15.56%, 14.82%, 14.81% and 12.18 of the Company’s total chemical raw material purchase, respectively. We had four major vendors during the fiscal year ended December 31, 2022, who collectively accounted for 57.37% of total purchases. We had four major vendors during the fiscal year ended December 31, 2021, who collectively accounted for 64.11% of total purchases. We purchase from a variety of suppliers and believe these raw materials are widely available. If we were unable to purchase from our primary suppliers, we do not expect we would face difficulties in locating another supplier at substantially the same price. We have secure and efficient access to all the raw materials necessary to produce customers’ products saving them the trouble of sourcing from several distributors. We believe our relationships with the suppliers of these raw materials are strong. While the prices of such raw materials may vary greatly from time to time, we believe we could hedge such risk by adjusting our price or absorb the higher cost at times if necessary.

Quality Control Policies

We have a strict quality control process centered around the handling, storage, and expiry dates of disease detectionour chemical raw materials before they are delivered to our customers. All products supplied by us are attached with a Certificate of Analysis ("COA") issued by manufacturers. COA contains the batch numbers, test result data, and manufacturing date. There are also labels on the packaging of our products stating the production date and batch number.

Competition

Based on the information provided by our customers and suppliers, Malaysia's industrial chemical market size is approximately USD 50 million per annum, and our current market share is around 20% of the domestic market. In the wider Southeast Asian region, including Indonesia, Thailand, Vietnam, Philippines, Myanmar, and Cambodia, we rely on close relationships with our distributors to distribute our product to customers.As a result, the market size of the Southeast Asian market is USD 500 million per annum, and our current market share is around 2.0% of the Southeast Asian market.

As Chemrex's clients are primarily in Malaysia, we consider Chemrex's principal competitors to be in the Malaysian domestic market for selling chemical raw materials. Chemex's competitors include Kaliba Sdn.Bhd. ("Kaliba"), Myeast Sdn.Bhd. and RP Product Sdn.Bhd. Some of these competitors, such as Kaliba, may have greater resources than us. They are leading providers of Fibreglass reinforced materials such as Polyester Resin, Chopped Strand Mat, and Woven Roving, many of which overlap with our product offerings. 

Additionally, most of the chemical raw materials we distribute are made to industry standard specifications and either produced by or available from multiple sources. Our suppliers may also distribute directly or through multiple chemical distributors. Even for products that are unique in formulation or other characteristics, there are typically other products available that are functional substitutes, such as natural plant fiber green products, such that we face significant competition even where we are the exclusive distributors of a specialty product. Hence, our suppliers may also choose to limit their distribution outsourcing, particularly with respect to higher margin products, or to partner with other wholesalers or resellers for distribution, which could increase competition.

Competitive Advantages

Notwithstanding the competition, we are a well-established and reliable quality composite material distributor with professional services. In addition, we offer the following benefits to our existing and potential customers:

Growth strategy

The composite raw materials market is expected to reach an estimated $40.2 billion by 2024 and is forecasted to grow at a CAGR of 3.3% from 2019 to 2024. Furthermore, the composites end-user market is expected to reach an estimated $114.7 billion by 2024. The major drivers for growth in this market are the increasing demand for lightweight materials in the aerospace, defense, and automotive industries. Also, corrosion and chemical resistance materials are in demand in the construction and pipe and water tank industries. With our wide variety of product offerings, we are well-positioned to take advantage of this increase in chemical composite market demand. Source: Composites Market: Trends, Opportunities and Competitive Analysis (https://www.researchandmarkets.com/categories/chemicals-materials)

We are looking towards using automated warehousing and logistics powered by artificial intelligence to guide our inventory control/movement and business decisions more efficiently and quickly. We also want to deepen our ties with our major business partners, who have cooperated with us successfully for many years. Additionally, we are looking to hire more young and talented professionals to open more domestic and foreign markets, so our business growth strategy can be utilized in conjunction with other medical proceduressuccessfully implemented and sustained. We are also constantly looking for disease detection including blood tests, imaging and biopsies. We market our blood based genomic screening process to health care providers,new products through various channels, such as doctors, laboratories and hospitals, which began in July 2017.trade shows to source new products to add to our product line. From 2023 to 2024, we are projecting 40% revenue growth, mainly driven by more orders for our raw materials from electric vehicle charging station manufacturers. From 2025 onwards, we are projecting that the growth rate will stabilize at 15%.

Regulatory Matters

OurWe are unaware of and do not anticipate spending significant resources to comply with governmental regulations. We are subject to the laws and regulations of those jurisdictions in Malaysia.

Listed below are the licenses Chemrex currently holds to conduct its business in Malaysia.

Product Liability

Due to the nature of Chemrex's business, we may face claims for product liability resulting from any environmental or personal injury because of the chemical raw materials sold by Chemrex. We currently do not hold any insurance should a claim arise.

Diagnostics Business

Through our subsidiary BGL, we also engaged in applying genomic testing to enable early disease diagnosis and health management. 

BGL's principal office address is Unit 02, Level 10, Tower B, Avenue 3, The Vertical Business Suite II, BangarBangsar South, No. 8 Jalan Kerinchi, Kuala Lumpur, Malaysia, ourMalaysia. Our molecular genomic lab is located at Lab 353, Chemical Science Centre, University Science Malaysia, George Town, Penang, Malaysia, and we have a blood collection centercolon cancer and infectious diseases screening lab located at 14^stth floor, Lifecare Medical Centre, Kuala Lumpur, Malaysia. OurBGL's telephone number is (+60) 1221-26512 and web-sitewebsite is www.bionexusgenelab.comwww.bionexusgenelab.com.

Our Non-invasive Blood Tests

At BGL, we focus on developing and marketing safe, effective, and non-invasive blood tests to detect diseases in their early stages to minimize treatment costs and improve patient outcomes. Our non-invasive blood tests analyze changes in ribonucleic acid ("RNA") to detect specific risks and intricate of individuals' health conditions for eight cancers (nasopharyngeal, lung, liver, stomach, breast, cervical, prostate, and colon), two inflammatory bowel diseases (ulcerative colitis and crohn's) and osteoarthritis. In addition, heart attack, stroke, and mental disorders risk screening have also been included as of 2023/2024. To increase accuracy, we believe that genomic screening can be utilized in conjunction with conventional procedures for disease detection, such as imaging and biopsies.

We derive our revenue through screening patient samples utilizing the certain biomarkers we developed. We do not collect samples ourselves but rather market our screening service to healthcare providers, such as doctors, laboratories, and hospitals that collect the samples. BioNexus is the only commercial molecular lab in Malaysia that detects cancer, inflammatory bowel diseases, and osteoarthritis risk via RNA with a certified GeneChip from the Food and Drug Administration ("FDA"). Our screening process can also help guide personalized medicines and therapies for individual patients according to their needs and risks.

AcquisitionDevelopment of BGS Lab Sdn. Bhd.Screening Process

On August 23, 2017, BioNexus Gene Lab Corp., a Wyoming company, acquired all of the capital stock of BGS Lab Sdn. Bhd. (now Bionexus Gene Lab Sdn. Bhd), a Malaysian company (“BioNexus Malaysia”), from its then existing shareholders. In connection with the transaction, the following shareholders of BioNexus Malaysia received the corresponding number of shares of our common stock; Soo Kow Lai, our Chairman, received 10,000,000 shares; Chi Yuen Leong, our President received 10,000,000 shares; Mr. Chan Chong Wong, our Chief Executive Officer received 10,000,000 shares; andBGL's co-founder, late Dr. Choong Chin Liew, our majority shareholder received 20,000,000 shares. In exchange, we received certain software, equipment, know-how, related inventory and technology relating to blood based genomic analysis and screening developed by Dr. Liew which has enabled us to conduct our current operations. The technology and related assets were previously acquired by the BioNexus Malaysia from Dr. Liew in June 2017 in exchange for Dr. Liew receiving 40% of the equity of BioNexus Malaysia and the obligation to pay Dr. Liew the sum of approximately $354,930. The Company paid Dr. Liew the sum of $83,664 on January 23, 2018 and on February 15, 2018, Dr. Liew agreed to waive the remaining balance due to him by the Company which amounted to $271,266.

Development of the Blood Analysis Process.

Our company’s major shareholder, Dr.Choong-Chin Liew, developed and tested a novel approach in blood basedblood-based genomic analysis and screening by identifying biomarkers in RNA as opposed to deoxyribonucleicRibonucleic acid (or DNA) analysis. Through his extensive(RNA). Dr. Liew's research and clinical trials, he has determined that communication occurs between cells in blood and tissue as blood circulates throughout the body and subtle changes occur in cells over time due tocommunication occurs when a person suffers from an injury or disease. These cell-cell interactions induce changesmanifest themselves in blood gene expression. Profiling these changes enables the Company to identify unique molecular signatures reflecting disease activity which can then be used to develop disease-specific molecular diagnostic assays. The Company uses disease-specific blood-based biomarkers as the basis for molecular diagnostics tests and to enable personalized health management through the development of systems biology tools and algorithms.

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The Company focuses on developing and commercializing proprietary molecular diagnostic tests for early detection of diseases and personalized health management, with a primary focus on cardiovascular, diabetes and cancer-related indications. There is a constant and dynamic interaction of blood with cells, tissues and organs of the human body. Many clinicalClinical studies performed by Dr. Liew and others have demonstrated that blood gene expression profiles can be used to develop personalized signatures capable of differentiating diseased patients with cancer from healthy patients across a broad spectrum of pathologies interaction between tumor cells and the immune system that has been referred to as immunoediting. Immunoediting is the response of the immune system to a tumor and comprises three stages: elimination (in which the immune system identifies cancerous and/or precancerous cells and attempts to eradicate them), equilibrium (in which the surviving tumor cells begin mutating rapidly), and escape (in which tumor cells proliferate uncontrollably, leading to tumor progression). Each of these stages induces leukocyte gene expression changes that constitute a unique, detectable molecular signature.ones.

Dr. Liew began his research in 1962We take advantage of profiling these changes, which enables us to identify unique molecular signatures (biomarkers) reflecting disease activity which can then be used to develop disease-specific molecular diagnostic assays. We use these biomarkers as the basis for screening tests for early disease detection and has published numerous articles in medical and peer review journals. His publications include the following;generate revenue from providing screening services.

Peripheral Blood Transcriptome Dynamically Reflects System-wide Biology: A Potential Diagnostic Tool. Liew CC, Ma J, Tang HC, Zheng R, Dempsey AA. Journal of Laboratory and Clinical Medicine (March 2006).

The Peripheral Blood Transcriptome: New Insights into Disease and Risk Assessment. Mohr, S Liew CC. Trends in Molecular Medicine(October 2007).

DNA and RNA each consist of a single molecule and both are present in the blood. DNA is the carrier of human genetic information and is passed down from generation to generation. At conception, a person receives DNA from both parents. All of the cells in our bodies, except red blood cells, contain a copy of our DNA. Humans share about 99% of the same genetic code. However, it is the 1% of the genetic code that makes us all very distinct individuals. Historically, the study of DNA has been used to detect ancestry and inherited characteristics, including certain inherited diseases like Huntington Disease, Cystic Fibrosis and Down Syndrome, among others. It also is believed there is a genetic (DNA) pre-disposition to certain cancers, like breast cancer, colon cancer and gastric cancer.

While DNA is relatively static, RNA conversely is subject to change and is affected by an individual’s lifestyle, such as diet, alcohol, tobacco and/or drug use, excessive or ongoing stress from work/family and exercise, along with exposure to environmental influences, such as pollutants and chemicals.

The distinctions between the characteristics of RNA and DNA are illustrated in the below table.

The Collection and Analysis Process.

Our process involvesscreening services begin with a simple blood draw. Asample from the patient. We do not conduct sample collection ourselves. Rather, a nurse or technician of the health care provider drawsphlebotomist will draw 2.5 ml of blood from the patientpatients using a RNAgard bloodan Paxgene tube. The blood and a completed company formBlood Withdrawal Card are courieredthen sent to our lab located at 353, Chemical Science Centre, USM, George Town. via a third-party courier service.

A copy of the company form is shown below.

All blood samples delivered to us are labelledlabeled with the patient's name, and personal identity number, and laboratory reference number on the tube where the blood sample is maintained for safekeeping.

At our lab, the patient's RNA is extracted from the sample in a biosafety cabinet, followed by microcentrifuge and spectrophotometer to check the spectrophotometric concentration and quality of the extracted RNA. The RNA then is purified, (Biotinylatedand biotinylated RNA will be mixed with purification beads and transferred to a U-bottom 96-well plate. Then, the plate will be placed onto a magnetic ring stand. Labeledstand where labeled cRNA will be captured when placed on the magnetic stand.captured. The remaining solution will be removed, and the captured pellet will be cleaned-up to obtain cRNA with high purity. Then, purified cRNA will be fragmented for hybridization) and hybridized onto a genechip (GeneChip 3’(we utilize the GeneChip 3' IVT PLUS Reagent Kit will be used for preparingto prepare the biotinylated target from purified total RNA samples suitable for hybridization to GeneChip arrays.arrays). Double-stranded cDNA will be synthesized from the total RNA using reverse transcriptase and oligo-dT primers. An in-vitro transcription (IVT) reaction is then done to produce biotin-labeled cRNA from the cDNA in 16(16 hours incubation) and scanned through the affymetrix station (OnceAffymetrix station. Once the overnight hybridization is completed, the Genechips will be washed with dedicated buffers and solutions to remove excess cRNAs and hybridization solutions. Washed chips will be stained with staining buffers to illuminate attached cRNAs. All these processes will be conducted in the fluidic station by following the given instructions. Specific experimental information is defined using AMDS software on a PC-compatible workstation. Stained chips are ready for scanning. The chips will be transferred into the scanner. The scan is automatically completedscanner, and the image iswill be processed into data files. The data collected from microarray analysis is analysedare analyzed using our propriety software and algorithm calculation to generate the disease risk score report for the individual patient. A

Our software generates a report, is generated by our software and is forwardedwhich we forward to the health carehealthcare provider for further consultation with the patient. This report can be used by the patient and the patient's physician to plan future tests and therapies.therapies and contains. The diagram below details the diagnostics and recommendations the report provided based on the screening results.

The process for effectuating RNA analysis depicted in the below pictures.

picture below.

The raw data obtained will be analyzed and quality control processed by our lab in Malaysia using our proprietary software to calculate the risk analysis of 11 different diseases. We simplify the result into a graph which is contained in the patient booklet provided to the health care professional. A sample graph is depicted below.

The following cautionary text inis contained in the results booklet which the Company provides to the healthcare provider and each patient:patient. The results booklet contains recommendations to assist with a physician's final diagnosis and treatment plan and is not meant to be medical advice. Below is the disclaimer that is included in each result booklet.

This report/screening is not intended or implied to beas a substitute for professional medical advice, diagnostics, or treatment. The content, including text, graphics, and information in the report, illustrateillustrates the risk score only. BionexusBioNexus Gene Lab Sdn BhdSdn. Bhd. makes no representation and assumes no responsibility for the accuracy of the information, as such information and contents are subject to change without notice. You are encouraged to review any medical condition or treatment with your doctor.

The key proprietary aspect of our process is our proprietary algorithm software, biomarkers, and the RNA extraction, preservation, quality control, hybridization, and data analysis processes which was developed by Dr. Liew. We acquired the software and the technological processes in June 2017. TheFirst, the gene expression from a reference population representing a specific disease condition is filtered according tousing a quality assurance process based on repeatability data. This collected data is then analyzed by ourOur proprietary algorithm software then analyzes this collected data and processes checked by the laboratory manager to ensure all the steps are followed in the deriving predictive model for each disease condition. Once these models have been established, they then can be applied to the data from a new sample to make risk predictionpredictions for this individual. Each disease/disorder has a similar group of diseased/disordered genes which were identified through the Company's years of research and clinical trials in Malaysia.

Customer Service and Quality Control Policies

We envision this division of our business to provide high-quality screening tests. Our competitive advantage lies in our turnaround time, expert interpretation, and easy-to-understand reports with timely clinical decision-making. In addition, the company is dedicated to continuous quality improvement in our services and is committed to sensitivity and specificity priorities on each test.

We are committed to maintaining the confidentiality of patient information and to compliance with all privacy, security, and electronic transaction requirements of the Health Medical Act and Regulations and Code of Professional Conduct of the Malaysian Medical Council. Third parties requesting results, including any requests directly from the patient, are directed to the ordering facility. A copy of our screening test report includes reference ranges, interpretive comments, and footnotes. We submit test results electronically to healthcare providers, individual clients, and/or the Malaysian Health Ministry (HHS) regarding reportable diseases. Clients are responsible for compliance with CDC-specific statutes concerning reportable conditions. Patient test results are retained indefinitely.

All samples handled by our laboratory are treated as though they are infectious. The greatest dangers to healthcare workers exposed to blood and body fluids are hepatitis B, hepatitis C, and HIV viruses. Our laboratory turnaround time is monitored closely and compared to standardized laboratory metrics for continuous quality improvement. Laboratory scientists and technologists are all highly experienced in handling complex tests. Dr. Stephen Ponnampalam, the Chief Technology Officer, and our supervisors monitor performance indicators for all laboratory services. Performance improvement initiatives are regularly instituted and reviewed as part of an ongoing quality improvement program.

Business Development.Development and Growth Strategy

In April 2017, we began marketing our blood based genomic screening processservices to health carehealthcare providers, such as clinics, laboratories, and hospitals, all of which have a licensed doctordoctors or staff. As mentioned above, theour screening service provides a risk analysis report of 11 diseases, of which eight are different forms of cancer. InHowever, in Malaysia, the cost forof the analysis is not covered by health insurance. Thus, patients are required to pay out of pocket for our services, which currently range from $200 for a single colon cancer screening to $975 for all 11 diseases under BGS screening based on the costsrequest of the services, which under our current pricing of $1,500 for the 11-disease panel for an individual plan. We do have different pricing for groups, like companies and associations.patient/healthcare provider.

In November 2017, we expanded our marketing efforts to companies, business organizations, and insurance agents. As a result of these efforts, during November and December 2017, we entered into arrangements with two companies in Kuala Lumpur to screen their employees for 11 diseases/disorders (lung cancer, colon cancer, nasopharyngeal cancer, liver cancer, stomach cancer, breast cancer, cervical cancer, prostate cancer, inflammatory bowel diseases (ulcerative colitis & Crohn’s disease), and osteoarthritis pursuant to which each company paid us $50,000. The companies have 32 and 55 employees respectively. We completed the screening process of these two companies byin the first calendar quarter 2019. Weof 2019 and continue to market our services to other local companies in the Kuala Lumpur metropolitan area. In 2022, we had entered an arrangement with a clinical lab to conduct screening for the 11 diseases.

Our pricing strategy is consistent with BGL's objectives, costs, competition, and demand for the product. BGL's management administers the policies to match the market needs. BGL plans to charge the following prices to individuals for its tests.

The price for each test charged to hospitals, clinics, and other healthcare operators is subject to an incentive-based rebate that ranges from 20% to 25% based on the monthly volume of tests conducted.

As of December 31, 2020,October 15, 2021, we have 10 swab and bloodwork with 27 liquid biopsy sample collection centers, 812 in Klang Valley (which is comprised(comprised of our capital city Kuala Lumpur, together withLumpur) and towns on the northern and southern fringes of the capital city) recommending our blood based genomic screening protocol to their patients. Of these centers, Lifecare Medical Centre, Iheal Medical Centre, National Heart Centre, 1-Utama Clinic, Clinic Q, LYC Healthcare, Gene Therapy Centre, Nexus Reality Lab in Klang Valley, Sandakan hospital, and Tawau Hospital15 public hospitals and labs nationwide. These 27 locations account for approximately 90% of our patient population from Jan 2020 through December 31, 2020. We believe that there are over 500 clinicsin 2022 and hospitals located in the Kuala Valley metropolitan area.2021.

Our goal isWe aim to have a large percentage of health caremore healthcare providers in the Klang Valley referreferring patients to us for our screening protocol. Once we have established our brand and reputation in Klang Valley, we intend to expendwill expand to other large cities in Malaysia, followed by an expansion to large metropolitan areas other countries in Asia Pacific, such as Indonesia, Taiwan and Singapore. However,Malaysia. On August 25, 2022, we do not foresee expansion beyond Malaysia until fiscal year 2021 and beyond.

Our existing equipment and personnel are sufficient to handle up to 94 patients a day. Ifpresented our daily patient count increases above 200 patients, we will be required to hire another laboratory technician and purchase and install an additional semi-automatic affymetrix station equipment estimate to be $200,000.

For health care providers, we pay a referral fee of between 20%. Typically, the patient, while in the offices of the health care provider, completes a form which identifies the name, address and other contact information of the patient.

During the 3rd fiscal quarter of 2020, we began testing for COVID 19 using our RNA platform apply qPCR process. During this period, the Ministry of Health began providing us with COVID samples taken at hospitals for testing using our laboratory. To date, we had screened more than 5,000 samples reported less than 100 positive covid-19 casesmRNA screening service to the Health Ministry of Malaysia for nationwide implementation. Deputy Director Generals from Public Health and Cancer Divisions had scheduled another meeting  on January 17, 2023. In addition, during 3^rd quarterthe January’ meeting, the information we shared on the cost saving of 2020, we began promoting this q-PCR test through$1.15 billion (RM 5.1 billion) in treatment expenses and $30.88m (RM135,861,660) in screening expenses for 68,617 persons (0.2% of the Malaysian General & Life Insurance Association, various banks, airports and small and medium enterprises (SME) in Malaysia. The response from these markets have slow in developing. Our Covid screening generates substantially lower per ticket charges at $55 per test compared with $990 per customer for our RNA screening. They also generate lower margins than our RNA screenings.population) annually.

Competition and Competitive Strengths.Some prevalent cancer cases in Malaysia from Globocan 2020 endorsed by WHO

While the Company believes that there is no similar commercialized blood based genomic screening for 11 diseases using RNA analysis, it believes that its blood based genomic screening protocol for disease detection could be utilized in conjunction with other medical procedures for disease diagnostics including lab (blood, urine or other body fluids) tests, imaging and biopsies. As such, the Company does not consider it to be in competition with these other medical procedures which have been industry standards for many years.

Disease detection for cancer, for example, are numerous and

Cancer screening costs from diagnostic center is dependent onpriced at $882 (RM3,880) as compared to mRNA screening at $432 (RM1,900), quantity genechip purchase would drastically reduce the typescreening cost. The proposed screening campaign is targeting 0.2% of cancer tested. Informationthe 34,308,525-population aged 40 years from the National Cancer Institute provides the following information;2023. A saving of  $30.88m {68,617 persons x ($882-$432)}, a saving of $34,308,525.  

We believe that an increase in our marketing and promotional efforts will correlate to increased revenues and the expansion of our business. Our growth and expansion strategies are as follows:

Competition

We believe that we have the only commercial molecular lab in Malaysia that provides liquid biopsy screenings that detect the risk of cancer, inflammatory diseases, and osteoarthritis risk via RNA biomarkers and provides a report which patients and physicians can use to plan for future tests and personalized therapies.  Based on prior private conversations with the USA Thermo Fisher representative in Malaysia, there is a medical lab using similar equipment on DNA screening.

Competitive Strengths

We believe that we have several competitive strengths compared to these other health diagnostic tools. They are as follows:

We however believe that we have a number of competitive strengths compared these other health diagnostic tools are as follows:

Our Growth StrategySeasonality

We will look to grow and expandThe nature of our business does not appear to be affected by further penetrating the Klang Valley market and expand our marketing efforts elsewhere in Malaysia. We believe that an increase in our marketing and promotional efforts will correlate to increased revenues and the expansion of our business. Our growth and expansion strategy for the next 6-12 months are as follows:seasonal variations.

•Continue to leverage our relationships with healthcare providers

To date, we have relied upon the efforts of management and their relationships with health care providers to create the initial interest in our blood based genomic screening. These relationships have been located primarily in the Kuala Lumpur market. We will continue to use our relationships with providers in the Kuala Lumpur market and elsewhere in Malaysia to increase sales and product awareness.

•Allocate more capital resources to our marketing efforts

Apart from sales through existing relationships with health care providers, we intend to allocate more capital resources to marketing and promotion. As part of these efforts, we have appointed two commission-based Marketing Companies last year and they managed to bring some business after creating awareness of our services nationwide.

•Increase focus on corporate clients.

To date, we have entered into arrangements with two corporate clients for screening on their employees. We intend to solicit more corporate clients in the Klang Valley and major cities in Malaysia. We commenced these efforts lasy year and is continue in 2021. These efforts will be undertaken by the officers and the Marketing Companies.

•Expand to other regions in Malaysia.

We intend to reach other large cities in Malaysian, such as Penang, Ipoh, Seremban, Melaka, Johor Bahru and Kuantan.

Regulatory Matters

We are unaware of and do not anticipate having to expendspending significant resources to comply with any governmental regulations. We are and will be subject to the laws and regulations of those jurisdictions in wellness operation and advertising materials circulation.which we operate. Generally, business licensing requirements, income taxes, and payroll taxes are applicableapply to all types of business operations. The development and operation of our business isare not subject to special regulatory and/or supervisory requirements. In 2007, the Malaysian Parliament passed the Pathology Laboratory Bill of 2007 (“Pathology Act”), subject to the finalization of the underlying regulations. Since the passage of the Pathology Act, the Malaysian government has not implemented the legislation. Currently, we areWe only requiredrequire an operating permit from local council,the City Hall of Kuala Lumpur, Malaysia, which we have received. However, we cannot predict whether we would be able to comply with the Pathology Act and itsother regulations if implemented.

Product Liability

Due to the nature of BGL's business, BGL may face claims for product liability resulting from the inaccurate or erroneous diagnosis using our screening process. BGL does not currently have insurance against any such claims.

Research and Development

There are six persons in the R&D team consists of 3 scientists, YM Wong, Stephen PonnamPalam, HK Looi, and two medical doctors, Dr. YM Fong and Dr. Stephen PonnamPalam, and 2 laboratory managers, Sanggetha Periya and CH Yew.

Our research and development budget over the years is listed in the following table:

BIONEXUS MALAYSIA HAS A LIMITED OPERATING HISTORY AND LIMITED BUSINESS GROWTH. BioNexus Malaysia has been operational since April 2017; therefore, itis an early, commercial-stage company and have hada limited operationsoperating history, which makesmay make it difficult to evaluate itsour current business and predict our prospects.future performance.

BioNexus is an early commercial-stage company and have a limited operating history. BioNexus’ limited operating history may make it difficult to evaluate our current business and this makes predictions about our future success or viability subject to significant uncertainty. In addition, to date, they have not experienced substantial growthcombination with other anticipated increased operating expenses in connection with becoming a public company, these anticipated changes in our business. The likelihoodoperating expenses may make it difficult to evaluate our current business, assess our future performance relative to prior performance and accurately predict BioNexus’ future performance.

BioNexus will continue to encounter risks and difficulties frequently experienced by early commercial-stage companies, including those associated with increasing the size of BioNexus’ organization and the prioritization of BioNexus’ commercial, research, and business development activities. If BioNexus does not address these risks successfully, BioNexus’ business could suffer.

BioNexus’ growth (organic and inorganic) may require substantial capital and long-term investments.

BioNexus’ competitiveness and growth depend on our ability to fund our capital expenditures. BioNexus cannot assure you that it will be able to fund our capital expenditures at reasonable costs due to adverse macroeconomic conditions, our performance or other external factors.

In the future, BioNexus expects to incur significant costs in connection with its success must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered by a small operating company tryingoperations. BioNexus intends to expand itsBioNexus’ business enterprise and the highly competitive environment in which we will operate. Consequently, there can be no assurance that the businessthrough increased marketing efforts of BioNexus Malaysia and Chemrex. These development activities generally require a substantial investment before BioNexus can determine commercial viability, and the proceeds of this offering will grownot be sufficient to fully fund these activities. BioNexus expects to need to raise additional funds through public or private equity or debt financings, collaborations or licensing arrangements to continue to fund or expand BioNexus’ operations.

BioNexus’ actual liquidity and capital funding requirements will depend on numerous factors, including:

The availability of additional capital, whether from private capital sources (including banks) or the public capital markets, fluctuates as BioNexus’ financial condition and market conditions in general change. There may be times when the future. Moreover, becauseprivate capital sources and the public capital markets lack sufficient liquidity or when BioNexus’ securities cannot be sold at attractive prices or at all, in which case BioNexus would not be able to access capital from these sources. In addition, a weakening of BioNexus’ financial condition or deterioration in its limited operating history, it is difficultcredit ratings could adversely affect BioNexus’ ability to extrapolate any meaningful projections about its future.obtain necessary funds. Even if available, additional financing could be costly or have adverse consequences.

THE EFFICACY OF BIONEXUS MALAYSIA BLOOD SCREENING PROCESS HAS NOT SUPPORTED BY ANY INDEPENDENT STUDIES OR TESTS. BioNexus Malaysia blood screening process, which was commercially launchedmay incur net losses in April 2017, has been developed by Dr. Choong Chin Liew, our largest shareholders. Dr. Liew has spent many years developing and testing various aspects of his current protocols and has published numerous articles concerning his blood screening protocols. Nonetheless, these protocols and procedures have not been the subject of a wide scale independent study or studies proving the efficacy of our testing protocols.near future.

As a result, it is conceivable, that despite Dr. Liew’s efforts, our current blood based genomic screening process may not be as efficacious as we believe, which in effect would yield false positive or false negative test results. Inaccurate test results in turn could lead to significant financial exposureBioNexus has devoted substantial resources to the Company. The exposure would arise from claims by patientsdevelopment and commercialization of the products of BioNexus Malaysia and Chemrex. BioNexus might not remain profitable for a misdiagnosis of current or perceived current medical conditions. Claims for a false positive diagnosis could include increased medical costs arising from more medical tests and physician examinations in response to the false positive diagnosis. Claims for false negative diagnosis could include claims for loss of life and pain and suffering arising from theany period. BioNexus’ failure to diagnose a current medical condition. While we inform patients that our diagnosticsachieve profitability would negatively affect BioNexus’ business, financial condition, results of operations, and cash flows. If BioNexus is unable to execute BioNexus’ sales and marketing strategy and BioNexus’ products are merely one of many tools employedunable to gain sufficient acceptance in a health care diagnoses, these claims couldthe market, BioNexus may be substantial and cause a material adverse impact on ourunable to generate sufficient revenues to sustain BioNexus’ business.

BIONEXUS MALAYSIA MAY FACE PRODUCT LIABILITY CLAIMS. Due to the nature of our business, weAny additional capital BioNexus raises may face claims for product liability. These claimsnot be available on satisfactory terms and may arise from the inaccurateadversely affect stockholders’ holdings or erroneous diagnosis of patient information or the mix-up of patient information whereby a patient receives the wrong diagnostic information. While we feel confident in our accuracy of our diagnostic analysis and the procedures which we have implemented to ensure the safeguard of patient information, we cannot provide assurances that product liability claims will arise in the future.rights.

Moreover, litigationAdditional capital, if needed, may not be available on satisfactory terms or adverse publicity resulting from these allegations could materially andat all. In addition, the terms of any financing may adversely affect our business, regardless of whetherstockholders’ holdings or rights. Debt financing, if available, may include restrictive covenants. To the allegations are validextent that BioNexus raises additional funds through collaborations and licensing arrangements, it may be necessary to relinquish some rights to BioNexus’ technologies or whether we are liable. Currently we have no product liability insurance coverage, and even if there was such coverage, there wouldgrant licenses on terms that may not be no assurance that such coverage would be sufficientfavorable to properly protect us. Further, claims of this type, whether substantiated or not, may divert our financial and management resources from revenue generating activities and the business operation.

Presently, we do

If BioNexus is not able to obtain adequate funding when needed, BioNexus may be required to delay development programs or sales and marketing initiatives. If BioNexus is unable to raise additional capital in sufficient amounts or on satisfactory terms, BioNexus may have insurance to cover any product liability claims. This lackmake reductions in BioNexus’ workforce and may be prevented from continuing BioNexus’ discovery, development, and commercialization efforts and exploiting other corporate opportunities. In addition, it may be necessary to work with a partner on one or more of insuranceBioNexus’ tests or products under development, which could lower the economic value of those products to us. Each of the foregoing may causeharm BioNexus’ business, operating results, and financial condition and may impact BioNexus’ ability to continue as a material adverse impact on the Company if product liability claims arise.going concern.

INEFFECTIVE RISK MANAGEMENT POLICIES AND PROCEDURES. Raising additional capital may lead to dilution of shareholdings by BioNexus’ existing shareholders, restrict BioNexus’ operations, and may further result in fair value loss, adversely affecting BioNexus’ financial results.

BioNexus may seek additional funding through a combination of equity and debt financings and collaborations. To the extent that BioNexus raises additional capital through the sale of equity or convertible debt securities, the ownership interest of existing holders of BioNexus’ shares will be diluted, and the terms may include liquidation or other preferences that adversely affect the rights of BioNexus’ existing shareholders.

The Companyincurrence of additional indebtedness or the issuance of certain equity securities could result in increased fixed payment obligations and could also result in certain additional restrictive covenants, such as limitations on BioNexus’ ability to incur additional debt or issue additional equity, limitations on BioNexus’ ability to acquire or license IP rights and other operating restrictions that could adversely impact BioNexus’ ability to conduct its business.

Risk Factors Related to Our Business and Industry

General Business and Industry Risks

BioNexus is unable to predict the duration of current economic conditions.

Future economic downturns, prolonged slow growth or stagnation in the economy could materially adversely affect BioNexus’ business, results of operations, financial condition and cash flows.

Global economic conditions could materially adversely impact demand for BioNexus’ products and services.

BioNexus’ operations and performance depend significantly on economic conditions. Global financial conditions continue to be subject to volatility arising from international geopolitical developments and global economic phenomenon, as well as general financial market turbulence and natural phenomena such as the COVID-19 pandemic. Uncertainty about global economic conditions could result in

Access to public financing and credit can be negatively affected by the effect of these events on Malaysian, U.S. and global credit markets. The health of the global financing and credit markets may affect its ability to obtain equity or debt financing in the future and the terms at which financing or credit is available to us. These instances of volatility and market turmoil could adversely affect its operations and the trading price of its common stock.

BioNexus’ risk management programs, processes, or procedures for identifying and addressing risks in BGL’s business may not be adequate or effectively applied, and this may adversely impact its businesses.

BGL relies on a combination of technical and human factors to protect the Companyus against risks. ItsBGL policies, procedures and practices are used to identify, monitor and control a variety of risks, including risks related to human error and hardware and software errors. The administration and results of each test are reviewed by a physician and a scientist in Malaysia before the results are released to the patient. The Company’s standard of operations has been developed internally primarily by Dr. Liew. These risk-management methods may not adequately prevent losses and may not protect us against all risks, in which case ourBioNexus’ business, economic conditions, operations and cash flows may be materially adversely affected.

We haveBioNexus has risk-management policies, control systems and compliance manuals in place; however, there is no guarantee that such policies, systems, and manuals will be effectively applied in every circumstance by our staffBioNexus’ staff. For example;example, employees could override the system technology and theoretically waive requirements, thereby exposing ourthe company to the risk of compromised test result.accurately conduct its quality control.

WE WILL NEED ADDITIONAL FINANCING IN ORDER TO GROW OUR BUSINESS. We do not have significant assets with which to expand our business. We intend to expand our business through increased marketing effortsBioNexus may be adversely impacted by changes in Malaysialaws and elsewhere for both of our business line, the blood based genomic screening process and chemical distribution business. These additional expenditures are intended to be funded from cash on hand and, if necessary, third party sources, including the incurring of debt and/regulations, or the sale of additional equity securities. In addition to requiring additional financing to fund expansion, the Company may require additional financing to fund working capital and operating losses in the future should the need arise. The incurrence of debt creates additional financial leverage and therefore an increase in the financial risk of the Company’s operations. The sale of additional equity securities will be dilutive to the interests of current equity holders. In addition, there can be no assurance that such additional financing, whether debt or equity, will be available to the Company or that it will be available on acceptable commercial terms. Any inability to secure such additional financing on appropriate terms could have a materially adverse impact on the business, financial condition and operating results of the Company.their application.

AS WE UNDERTAKE BIONEXUS MALAYSIA’S BUSINESS, WE WILL BE SUBJECT TO COMPLIANCE WITH POTENTIAL GOVERNMENT REGULATION THAT MAY INCREASE IN THE FUTURE. Currently, there are no governmental regulations that materially restrict ourBioNexus’s screening business.business in Malaysia.  BGL’s laboratory in Malaysia was established through an invitation by the Malaysian Health Minister alongside a government grant of $1,250,000. BGL’s screening tests have gone through preclinical and clinical trials involving private hospitals and government agencies including the Institute of Medical Research (IMR), Malaysian Biotechnology Corporation (BiotechCorp) and the Clinical Research Centre (CRC). The findings of the preclinical and clinical trials are published in peer reviewed journals such as the Journal of Molecular and Cellular Cardiology, and Physiological Genomics. Once published, BGL would do confirmational tests before applying for commercialization. BGL’s Malaysian lab is currently national operating under an operating license granted by the city of Kuala Lumpur.

The Malaysian government passed the Pathology Laboratory Bill of 2007 (“Pathology Act”) has been passed by the Malaysian Parliament, however,. However, since 2007, the government has not implemented the regulations underlying the legislation nor has the government enforced the Pathology Act. Any such regulations could establish criteria for the various classes and specialties of laboratories, the organization and management system of the laboratory, the qualification and experience of the person-in-charge, the qualification and competence of pathologists, scientific and technical staff engaged to conduct tests, and the standards of laboratory practice. WeBGL cannot predict whether weit would be able to comply with the Pathology Act and its regulations, if implemented. In addition, there also is a risk that the regulations arising from the Pathology Act or new legislation or regulations could increase ourBGL’ costs of doing business or otherwise prevent usBioNexus from carrying out the expansion of ourits business. Accordingly, ourBioNexus’ business may be harmed if we are noBioNexus is not able to comply with any future governmental legislation or regulations, including the Pathology Act.

OUR BLOOD BASED GENOMIC SCREENING PROCESS MAY NOT ACHIEVE COMMERCIAL SUCCESSES IN THE MARKETPLACE. Our blood based genomic screening processBGL is currently operating under an operating license granted by the City Hall of Kuala Lumpur, Malaysia. Under Malaysian and local laws, BioNexus may notcontinue to operate under its current operating license which BioNexus Malaysia currently has. BioNexus cannot predict whether there will be acceptablefuture regulations which may impact its ability to conduct its business.

Currently, there are no governmental regulations that affect Chemrex’s business in the marketplace for a variety of factors. One factor may be that doctorsMalaysia and hospitals may be loathed to recommend our screening process as it may be deemed competitivecontinue to existing health care services that are offeredoperate under an operating license granted by doctorsthe Kajang Town Hall of Selangor, Malaysia. Future legislation or regulations could increase Chemrex’s costs of doing business or otherwise prevent BioNexus from carrying out the expansion of its business.

Business disruptions could seriously harm BioNexus’ future revenue and hospitals. Another factor may be that patients could be fearful of learning potentially negative health resultsfinancial condition and as a consequence, may not subscribe to our screening process. The occurrence of either of these factors may impact the successful reception of our product in the marketplaceincrease its costs and negatively impair our further revenue potential.expenses.

BUSINESS DISRUPTIONS COULD SERIOUSLY HARM OUR FUTURE REVENUE AND FINANCIAL CONDITION AND INCREASE OUR COSTS AND EXPENSES. OurBioNexus’ operations could be subject to power shortages, telecommunications failures, wildfires, water shortages, floods, earthquakes, hurricanes, typhoons, fires, extreme weather conditions, medical epidemics and other natural or man-made disasters or business interruptions. The occurrence of any of these business disruptions could seriously harm ourBGL’ operations and financial condition and increase ourBGL’ costs and expenses. Unfavorable global economic conditions could adversely affect both of ourBioNexus’ business, segments, financial condition, or results of operations.

WeBioNexus do not carry insurance for all categories of risk that ourBioNexus’ business may encounter. Although weBGL intend to obtain some form of business interruption insurance in the future, there can be no assurance that weBioNexus will secure adequate insurance coverage or that any such insurance coverage will be sufficient to protect ourBioNexus operations to significant potential liability in the future. Any significant uninsured liability may require us to pay substantial amounts, which would adversely affect ourBioNexus’ financial position and results of operations.

Our lack of insurance could expose us to significant costs and business disruption.

We currently do not have any product liability or disruption insurance to cover our operations in Malaysia or overseas. We have determined that the costs of insuring for these risks and the difficulties associated with acquiring such insurance on commercially reasonable terms make it impractical for us to have such insurance. If we suffer any losses, damages or liabilities in the course of our business operations, we may not have adequate insurance coverage to provide sufficient funds to cover any such losses, damages or product claim liabilities. Therefore, there may be instances when we will sustain losses, damages and liabilities because of our lack of insurance coverage, which may in turn materially and adversely affect our financial condition and results of operations.

Our internal controls are progressively improved with additional independent directors coming on board and audit committee appointed which could cause our financial reporting to be reasonably reliable.

Our management, including our chief executive officer and chief financial officer, is responsible for establishing and maintaining adequate internal control over our financial reporting. As defined in Exchange Act Rule 13a-15(f), internal control over financial reporting is a process designed by, or under the supervision of, the principal executive and principal financial officer and effected by the board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America and includes those policies and procedures that: pertain to the maintenance of records in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and/or directors of the Company; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

In connection with the audits of our consolidated financial statements as of December 31, 2022 and 2021, we identified these “material weaknesses,” were rectified with independent directors and audit committee be included in 2022 significant improvement in our internal control over financial reporting.

We will expand our current board of directors to include additional individuals from US public company in the near term due to our limited financial resources. Until such remedial actions can be fully realized, we will continue to rely on the advice of outside professionals and consultants.

As a public company, we may become subject to the Section 404 of the Sarbanes-Oxley Act, or SOX 404, which requires that we include a report from management on the effectiveness of our internal control over financial reporting in our annual report on Form 10-K and in our quarterly report on Form 10-Q if we are qualified as an accelerated filer.

We are currently a “smaller reporting company”, meaning that we are not an investment company, an asset- backed issuer, or a majority-owned subsidiary of a parent company that is not a smaller reporting company and annual revenues of less than $50.0 million during the most recently completed fiscal year. In the event that we are still considered a “smaller reporting company,” at such time as we cease being an “emerging growth company,” we will be required to provide additional disclosure in our SEC filings. However, similar to an “emerging growth companies”, “smaller reporting companies” are able to provide simplified executive compensation disclosures in their filings; are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting; and have certain other decreased disclosure obligations in their SEC filings, including, among other things, only being required to provide two years of audited financial statements in annual reports. Decreased disclosures in our SEC filings due to our status as a “smaller reporting company” may make it harder for investors to analyze our results of operations and financial prospects.

Our independent registered public accounting firm may be required to attest to and report on the effectiveness of our internal control over financial reporting. Our management may conclude that our internal control over financial reporting is not effective. Moreover, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue a report that is qualified if it is not satisfied with our internal controls or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us. In addition, after we become a public company, our reporting obligations may place a significant strain on our management, operational and financial resources and systems for the foreseeable future. We may be unable to timely complete our evaluation testing and any required remediation.

During the course of documenting and testing our internal control procedures, in order to satisfy the requirements of SOX 404, we may identify other weaknesses and deficiencies in our internal control over financial reporting. In addition, if we fail to maintain the adequacy of our internal control over financial reporting, as these standards are modified, supplemented or amended from time to time, we may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with SOX 404. If we fail to achieve and maintain an effective internal control environment, we could suffer material misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information. This could in turn limit our access to capital markets, harm our results of operations, and lead to a decline in the trading price of our shares. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions. We may also be required to restate our financial statements from prior periods.

Fluctuations in foreign currency exchange rates could have a material adverse effect on our financial results.

We earn revenues, pay expenses, own assets and incur liabilities in countries using Malaysian Ringgit (“RM”) other than the U.S. dollar (“$”). Since our consolidated financial statements are presented in U.S. dollars, we must translate revenues, income and expenses, as well as assets and liabilities, into U.S. dollars at exchange rates in effect during or at the end of each reporting period. Therefore, increases or decreases in the value of the U.S. dollar against Malaysian currency affect our net operating revenues, operating income and the value of balance sheet items denominated in foreign currencies. We cannot assure you that fluctuations in foreign currencies exchange rates, particularly the strengthening or weakening of the U.S. dollar against Malaysian currency would not materially affect our financial results.

OUR SOFTWARE IS HIGHLY COMPLEX AND MAY CONTAIN UNDETECTED ERRORS.Risk Related to BGL’s Business and Industry Our

Exponential growth in Biotechnology

Biotechnology is a rapidly changing field that continues to transform both in scope and impact. Well-funded established molecular labs are gathering big data on health records, genomics, lifestyle information that led to new health solutions. Digitization is revolutionizing health care, allowing for patient reported symptoms, health outcome to be captured as mineable data. BGL could lose out to its competitors’ exponential growth if we unable to establish network with medical centers, pharmaceutical groups and other molecular laboratories synergistically in sharing customers and big data.

BGL’s inability to manage growth could harm its business.

BGL expects to continue to add personnel in the areas of sales and marketing, research & development, laboratory operations, finance, quality assurance and compliance. As BGL builds its commercialization efforts and expands research and development activities, operating expenses and capital requirements will increase, and BGL expects that they will continue to increase, significantly. BGL’s ability to manage its growth effectively requires us to forecast expenses accurately, and to properly forecast and expand operational and testing facilities, if necessary, to expend funds to improve our operational, financial and management controls, reporting systems and procedures. As BGL moves forward in marketing our tests and developing our test portfolio, the company will also need to effectively manage its growing manufacturing, laboratory operations and sales and marketing needs. If BGL is unable to manage its anticipated growth effectively, BGL’s future business could be harmed.

BGL’s financial prospects depend substantially upon the successful commercialization of the Company’s services and products in the future, which may fail or experience significant delays.

BGL’s future success depends upon BGL’s ability to continuously develop technologies and successfully market its existing cancer genetic offerings to customers within Malaysia and expand overseas. BGL’s ability to generate significant revenue in the next several years will depend primarily on the successes of each key stage of its business, including pre-clinical research and development, clinical trials, regulatory approval, manufacture, marketing and commercialization of its services and products, which is subject to significant uncertainty. BGL’s ability to generate sales revenue from its products and services and its future profitability depends on several factors, including its ability to:

The marketing, sale and use of BGL’s products and services could result in substantial damages arising from products or service liability or professional liability claims, that exceed BGL’s resources.

Due to the nature of BGL’s business, it may face claims for products or service liability. These claims may arise from the inaccurate or erroneous diagnosis of patient information or the mix-up of patient information whereby a patient receives the wrong diagnostic information. While the company feels confident in its quality control measures to ensure the safeguard of patient and client information, it cannot provide assurances that products or service liability claims will arise in the future.

Moreover, litigation or adverse publicity resulting from these allegations could materially and adversely affect BGL’s business, regardless of whether the allegations are valid or whether the company is liable. Currently BGL has no products and service liability insurance coverage, and even if there was such coverage, such coverage might not be sufficient to properly protect BGL. Further, claims of this type, whether substantiated or not, may divert BGL’s financial and management resources from revenue generating activities and the business operation.

BGL may face technology transfer challenges and expenses in adding new tests to its portfolio and in expanding its reach into new geographical areas.

BGL’s plan for expanding its business includes developing and acquiring additional tests or additional biomarkers that can be transferred into its current and future diagnostic product portfolio and distributed in target markets. Due to differences in the hardware and software platforms available at different laboratories for running molecular tests, BGL’s may need to adjust the configuration of the reagents and there may be changes to the related software in order for the tests to be performed on particular hardware platforms. Making any such adjustments could take a considerable amount of time and expense, and BGL’s might not will succeed in running its tests on the hardware and software that it may encounter in different laboratories. To manage this issue, BGL’s may license or acquire additional instruments and software from another company that will be compatible with its tests. This may include additional licenses and license fees needed for reagents or components required hereto as well.

BGL’s biomarkers have not undergone clinical trials.

As there are no governmental regulations that materially restrict our screening business in Malaysia, BGL has not conducted clinical trials on its biomarkers. While BGL believes that its tests help detect the potential risk of different diseases, the specificity and sensitivity of those tests have not been determined in clinical trials let alone those that meet the scope or standards of clinical trials that would satisfy regulators in the United States or the European Union. If BGL were to conduct such clinical trials, the results might prove to be less successful than we anticipate, and such tests might not be approved for sale in markets that require such clinical trials.

BGL currently receives and expects to continue to receive a significant portion of its revenues from its genomic screening products, and if its efforts to further increase the use and adoption of these products fail, its business will be harmed.

BGL currently receives and expects to continue to receive a significant portion of its revenues from its screening tests. BGL undertakes efforts to increase the awareness and adoption of its tests among laboratories, clinics, clinicians, physicians, payors, and patients in new markets. Continued and additional market acceptance and its ability to attract new customers are key elements to its future success.

BGL’s ability to increase sales of its services and establish greater levels of adoption and reimbursement for its tests is uncertain for many reasons, including, among others:

If the market and its market share for its genomic products fail to grow or grow more slowly than expected, its business, operating results, and financial condition would be adversely affected.

BGL’s success depends on their ability to improve and enhance its current tests and new test candidates, which is complex and costly, and the results are uncertain.

Effective execution of research and development activities and the timely introduction of enhanced, improved, or new tests and test candidates to the market are important elements of BGL’s business strategy. For example, BGL is currently collaborating with the National Heart Institute in Malaysia to identify genomic signatures in acute myocardial infarctions. However, the development of enhanced, improved, or new heart attack risks is complex, costly, and uncertain and requires us to, among other factors, accurately anticipate patients’, clinicians’, and payors’ needs, and emerging technology trends.

In the development of enhanced, improved, or new test and test candidates, BioNexus can provide no assurance that:

These and other factors beyond BGL’s control could delay its launch of enhanced, improved, or new test and test candidates.

The research and development process in the biotechnology industry generally requires a significant amount of time from the research and design stage through commercialization. The launch of such new test requires the completion of certain clinical development and/or assay validations in the commercial laboratory. This process is conducted in various stages, and each stage presents the risk that BGL will not achieve its goals and will not be able to complete clinical development for any planned test in a timely manner. Such development and/or validation failures could prevent or significantly delay its ability to obtain FDA clearance or approval as may be necessary or desired, obtain approval by entities that provide oversight over laboratory diagnostic tests in the localities BGL operate in, or launch any of its planned tests and test candidates. At times, it may be necessary for us to abandon a product in which BGL has invested substantial resources. Without the timely introduction of new test candidates and improvements or enhancements of its current tests, its tests may become obsolete over time and its competitors may develop tests that are more competitive, in which case its business, operating results, and financial condition will be harmed.

BGL faces challenges from the evolving regulatory environment and increasing public awareness on privacy, personal data protection and cyber security. Actual or alleged failure to comply with privacy, cybersecurity and data protection-related laws and regulations could adversely affect BGL’s business and reputation.

BGL face risks inherent in handling large volumes of data and in protecting the security of such data. In particular, BGL face a number of challenges relating to data inter-connected with regional labs, including:

As the company’s operations expand, it may be subject to these laws in other jurisdictions where its customers and other participants are located. The laws, rules and regulations of other jurisdictions may impose more stringent or conflicting requirements and penalties than those in Malaysia, compliance with which could require significant resources and costs. BGL’s privacy policies and practices concerning the collection, use and disclosure of user data are posted on its websites. Any failure, or perceived failure, by us to comply with BGL’s posted privacy policies or with any regulatory requirements or privacy protection-related laws, rules and regulations could result in proceedings or actions against us by authorities or others. These proceedings or actions may subject us to significant penalties and negative publicity, require BGL to change its business practices, increase its costs and severely disrupt its business.

BGL’s software is highly complex and may contain undetected errors.

BGL’s proprietary software underlying ourits diagnosis is highly complex and may contain undetected errors or vulnerabilities, some of which may only be discovered after a diagnosis. This may result in an inaccurate diagnosis which could expose us to substantial liability due to the misdiagnosis. Any errors or vulnerabilities discovered in ourBGL’ software could result in damage to ourBioNexus’ reputation, loss of clients, loss of revenue or liability for damages, any of which could adversely affect ourBioNexus’ growth prospects and ourits business.

WE MAY BE UNABLE TO PROTECT OUR INTELLECTUAL PROPERTY ADEQUATELY. OurBGL’s use of “open source” software could subject its proprietary software is an essential asset of our business. To establish and protect our intellectual property rights, we rely primarily upon a trade secrets, and to a lesser extent, contractual provisions with current and future employees. Further, our software is not patent protected nor is it copyrighted. Resultantly, our efforts to protect our intellectual property may not be sufficient or effective. If these measures do not protect our intellectual property rights, third parties could use the Company’s technology, andgeneral release, adversely affect its ability to competesell its tests and subject the company to possible litigation.

 A portion of the screenings by BGL incorporate so-called “open-source” software and BGL may incorporate open-source software into other tests and technologies in the market would be reduced significantly.

In addition, wefuture. Such open-source software generally is licensed by its authors or other third parties under open-source licenses. Some open-source licenses may not be effective in policing unauthorizedcontain certain unfavorable conditions, such as requirements that BGL disclose source code for modifications or derivative works that the company makes to the open-source software and that the company license such modifications or derivative works to third parties at no cost or under the terms of the particular open-source license. BGL monitors its use of our intellectual property. Even if we do detect violations, we may needopen-source software in an effort to engageavoid uses in litigationa manner that would require it to enforce our intellectual property rights. Any enforcementdisclose or grant licenses under its proprietary source code; however, there can be no assurance that such efforts we undertake, including litigation,will be successful. Open-source license terms are often ambiguous and such use could be time-consuminginadvertently occur. There is little legal precedent governing the interpretation of many of the terms of these licenses, and expensive and could divert our management’s attention. In addition, our efforts may be met with defenses and counterclaims challenging the validity and enforceabilitypotential impact of our intellectual property rights orthese terms on BioNexus’ business may result in a court determiningunanticipated obligations regarding its technologies. If an author or other third party that our intellectual property rights are unenforceable. If we are unabledistributes such open-source software were to cost-effectively protect our intellectual property rights, then our businessallege that BGL had not complied with the conditions of an open-source license, the company could incur significant legal costs defending itself against such allegations. In the event such claims were successful, BGL could be harmed.subject to significant damages or be enjoined from the distribution of the infringing product. These risks could be difficult to eliminate or manage, and, if not addressed, could harm BioNexus’ business, financial condition and results of operations.

BGL currently only uses open-source software for Covid- 19, HPV, HIV, and Dengue screenings. For screening process on cancers, inflammatory diseases and osteoarthritis, BGL uses company proprietary algorithm software for data analysis and interpretation established by Co-founder Professor CC Liew.

WE MAY BE SUBJECT TO INTELLECTUAL PROPERTY CLAIMS, WHICH ARE EXTREMELY COSTLY TO DEFEND, COULD REQUIRE US TO PAY SIGNIFICANT DAMAGES AND COULD LIMIT OUR ABILITY TO USE CERTAIN TECHNOLOGIES IN THE FUTURE. Companies in bio-medical or bio-technology industries are frequently subject to litigation based on allegations of infringement or other violations of intellectual property rights. To the extent we gain greater public recognition, weBGL may face a higher risk of being the subject of intellectual property claims. Third-party intellectual property rights may cover significant aspects of our technologies or business methods or block uscompetition from expanding our offerings. Any intellectual property claims against us, with or without merit, could be time consumingother biotechnology competitors and expensiveits operating results will suffer if BGL fail to settle or litigate and could divert the attention of our management. Litigation regarding intellectual property rights is inherently uncertain due to the complex issues involved, and we may not be successful in defending ourselves in such matters.compete effectively.

In addition, some of our competitors have extensive portfolios of issued patents. Many potential litigants, including some of our competitors and patent holding companies, have the ability to dedicate substantial resources to enforcing their intellectual property rights. Any claims successfully brought against us could subject us to significant liability for damages and we may be required to stop using technology or other intellectual property alleged to be in violation of a third party’s rights. We also might be required to seek a license for third-party intellectual property. Even if a license is available, we could be required to pay significant royalties or submit to unreasonable terms, which would increase our operating expenses. We may also be required to develop alternative non-infringing technology, which could require significant time and expense. If we cannot license or develop technology for any allegedly infringing aspect of our business, we would be forced to limit our service and may be unable to compete effectively. Any of these results could harm our business.

WE FACE COMPETITION FROM OTHER LABORATORIES AND OUR OPERATING RESULTS WILL SUFFER IF WE FAIL TO COMPETE EFFECTIVELY. We believe there are a limited number ofBGL competes with companies worldwide that specialize in RNA blood analysis to detect disease. However, there are a few laboratoriesLaboratories in universities and research institutions that are attempting to extend their researchesresearch from DNA into RNA screening. Ifscreening could become competitors if they have some breakthrough and they could be our potential competitors.succeed. Many of ourBGL’ competitors and potential competitors may have strongstronger financial and resources such as sophisticated research capabilities and development staff than we do.the company. Their discovery and development of novel protocol thatprotocols could make our genomicBGL’s screening obsolete even though with FDA and European Union certification.obsolete. As a result of these factors, ourBGL’s competitors may succeed in obtaining patent protection and/or FDA approval or discovering, developing and commercializing screening process for the cancer, inflammation, osteoarthritis and many more indications.

In addition, smaller or early-stage companies may also may prove to be significant competitors, particularly through collaborative arrangements with large, established companies. In addition, many universities and private and public research institutes may become active in ourBGL’s target disease areas.

If ourBGL’s competitors market products that are more effective, safer or less expensive or that reach the market sooner than ourBGL’s future products,tests, if any, weBioNexus may not achieve commercial success. In addition, because of ourBGL’s limited resources, it may be difficult for us to stay abreast of the rapid changes in each technology. If we failBGL fails to stay at the forefront of technological change, weBGL may be unable to compete effectively. Technological advances or products developed by ourBGL’s competitors may render ourBGL’s technologies or producttest candidates obsolete, less competitive or not economical.

WE ALSO FACE COMPETITION FROM OTHER CHEMICAL DISTRIBUTORS AND OUR OPERATING RESULTS WILL SUFFER IF WE FAIL TO COMPETE EFFECTIVELY. Security breaches, loss of data, and other disruptions could compromise sensitive information related to BGL’s business or prevent us from accessing critical information and expose us to liability, which could adversely affect BGL’s business and its reputation.We believe there are

In the ordinary course of BGL’s business, BGL collect and store sensitive data, including protected health information, personally identifiable information, financial information, intellectual property, and proprietary business information owned or controlled by the company or its customers, payers, and other parties. BGL manages and maintains its applications and data utilizing a limitedcombination of on-site systems and cloud-based data centers. The company utilize external security and infrastructure vendors to manage parts of its data centers. BGL also communicates sensitive data, including patient data, electronically, and through relationships with multiple third-party vendors and their subcontractors. These applications and data encompass a wide variety of business-critical information, including research and development information, patient data, commercial information, and business and financial information. BGL faces a number of companiesrisks relative to protecting this critical information, including loss of access risk, inappropriate use or disclosure, inappropriate modification, and the risk of the company being unable to adequately monitor, audit, and modify its controls over critical information. This risk extends to the third-party vendors and subcontractors BGL uses to manage this sensitive data.

The secure processing, storage, maintenance, and transmission of this critical information are vital to BGL’s operations and business strategy, and BGL devote significant resources to protecting such information. Although BGL takes measures to protect sensitive data from unauthorized access, use or disclosure, BGL’s information technology and infrastructure may be vulnerable to attacks by hackers or viruses or breached due to employee error, malfeasance, or other malicious or inadvertent disruptions. In addition, while BGL has implemented security measures and a formal, dedicated enterprise security program to prevent unauthorized access to patient data, such data is currently accessible through multiple channels, and there is no guarantee BGL can protect its data from breach. Unauthorized access, loss, or dissemination could also result in Malaysia that provide the broad rangedelays of chemicals that we provide to customers. Many of our existingBGL’s services and potential competitors may have stronger financial, producttests development and marketing capabilities than our existing capabilities. As a resultcommercialization as well as damage BGL’s reputation, including BGL’s ability to conduct its analysis, deliver test results, process claims and appeals, provide customer assistance, conduct research and development activities, collect, process, and prepare company financial information, provide information about BGL’s tests and other patient and physician education and outreach efforts through its website, and manage the administrative aspects of these factors, our competitors may succeed in attracting new customers which we may need to further develop ourits business.

Any such unauthorized access, loss, or dissemination of information could also result in legal claims or proceedings, liabilities under Malay laws and regulations in relation to the protection of personal information and cybersecurity as well as those specifically governing patient and medical data. BGL shall establish, maintain and execute internal systems to safeguard relevant personal healthcare data. Any failure to comply with above-mentioned regulation would result in administrative liabilities including but not limited to informed criticism.

WE MAY INCUR SIGNIFICANT COSTS TO BE A PUBLIC COMPANY TO ENSURE COMPLIANCE WITH U.S. CORPORATE GOVERNANCE AND ACCOUNTING REQUIREMENTS AND WE MAY NOT BE ABLE TO ABSORB SUCH COSTS. We may incur significant costsBGL plans to expand its tests and services to multiple countries exposes us to risks associated with our public company reporting requirements, costs associated with newly applicable corporate governance requirements, including requirements under the Sarbanes-Oxley Actdoing business outside of 2002 and other rules implemented by the Securities and Exchange Commission. We expect these costs to approximate $50,000 per year, consisting of $30,000 in legal, $50,000 in audit and $10,000 for EDGAR filing and transfer agent fees. We expect all of these applicable rules and regulations to significantly increase our legal and financial compliance costs and to make some activities more time consuming and costly. WeMalaysia. The expansion may not be ablesuccessful, which could limit BGL’s ability to cover these costsgrow its revenue, net income, and profitability.

As BGL plan to set up RNA screening labs operations in Indonesia, Middle East, USA, China and Germany, if approved, its businesses are subject to risks associated with doing business outside Malaysia including an increase in BioNexus’ expenses, diversion of BioNexus’ management’s attention from our operationsthe research and may need to raise or borrow additional funds. We also expect that these applicable rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our board of directors or as executive officers. We are currently evaluating and monitoring developments with respect to these newly applicable rules, and we cannot predict or estimate the amountdevelopment of additional costs we may incurdiseases/disorders risk detection or the timingforgoing profitable licensing opportunities in these economies. Additionally, Chemrex currently offers and sells chemical raw materials to customers in Southeast Asia markets outside of such costs. In addition, we may not be able to absorb these costs of being a public company which will negatively affect our business operations.Malaysia.

OUR OFFICERS AND DIRECTORS MAY HAVE A CONFLICT OF INTEREST WITH THE MINORITY SHAREHOLDERS AT SOME TIME IN THE FUTURE. SINCE THE MAJORITY OF OUR SHARES OF COMMON STOCK ARE OWNED BY OUR OFFICERS AND DIRECTORS AND A KEY CONSULTANT, OUR OTHER STOCKHOLDERS MAY NOT BE ABLE TO INFLUENCE CONTROL OF THE COMPANY OR DECISION MAKING BY MANAGEMENT OF THE COMPANY. Our Officers and Directors beneficially own approximately 35% of our outstanding common stock. The interests of our Officers and Directors may not be, at all times, the same as that of our other shareholders. Our Officers and Directors are not simply passive investors but are also executives of the Company, their interests as executives may, at times be averse to those of passive investors. Where those conflicts exist, our shareholders will be dependent upon our directors exercising, in a manner fair to all of our shareholders, their fiduciary duties as officers or as member ofAccordingly, the Company’s Board of Directors. Also, our directors will have the ability to control the outcome of most corporate actions requiring shareholder approval, including the sale of all or substantially all of our assetsbusiness and amendments to our articles of incorporation. This concentration of ownership may also have the effect of delaying, deferring or preventing a change of control of us, which may be disadvantageous to minority shareholders.

BECAUSE OUR OFFICERS AND DIRECTORS MAY IN FUTURE HAVE OUTSIDE BUSINESS ACTIVITIES, THERE IS A POTENTIAL CONFLICT OF INTEREST, INCLUDING THE AMOUNT OF TIME THEY WILL BE ABLE TO DEDICATE TO THE COMPANY. Currently our officers, who are also directors, have been working on promoting business for the Company. A potential conflict of interest may arisefinancial results in the future that may cause our business to fail, including conflicts of interest in allocating their time to our company and their other business interests. While our officers have verbally agreed to devote sufficient time and attention to the affairs of the Company, we have no written arrangement with our officers regarding this matter. As a result, we may face conflicts between business decisions that they may have to make regarding our operations and that of their other business interests.

BECAUSE OUR MANAGEMENT DOES NOT HAVE PRIOR EXPERIENCE RUNNING A PUBLIC COMPANY, WE MAY HAVE TO HIRE INDIVIDUALS OR SUSPEND OR CEASE OPERATIONS. Because our management has limited prior experience in running a public company, including the preparation of reports under the Securities Act of 1934, we may have to hire additional experienced personnel to assist us with the preparation thereof. If we need the additional experienced personnel and we do not hire them, we could fail in our plan of operations and have to suspend operations or cease operations entirely.

INDEPENDENT AUDIT COMMITTEE. Although the common stock is not listed on any national securities exchange, for purposes of independence we use the definition of independence applied by NASDAQ. Currently, BGLC has no independent audit committee. The full board of directors’ functions as audit committee and is comprised of three directors, one of whom is considered to be “independent” in accordance with the requirements set forth in NASDAQ Listing Rule 5605(a)(2). An independent audit committee plays a crucial role in the corporate governance process, assessing our Company’s processes relating to our risks and control environment, overseeing financial reporting, and evaluating internal and independent audit processes. The lack of an independent audit committee may prevent the board of directors from being independent from management in its judgments and decisions and its ability to pursue the responsibilities of an audit committee without undue influence. We may have difficulty attracting and retaining directors with the requisite qualifications. If we are unable to attract and retain qualified, independent directors, the management of the business could be compromised. An independent audit committee is required for listing on any national securities exchange; therefore, until such time as we meetadversely affected due to a variety of factors including the audit committee independence requirements of a national securities exchange, we will be ineligible for listing on any national securities exchange.

POTENTIAL DATA BREACHES. If we are successful, our services will generate and process a large quantity of personal health condition data. We face risks inherent in handling large volumes of data and in protecting the security of such data. In particular, we face a number of challenges relating to data inter-connected with regional labs, including:

As we expand our operations, we may be subject to these laws in other jurisdictions where our customers and other participants are located. The laws, rules and regulations of other jurisdictions may impose more stringent or conflicting requirements and penalties than those in Malaysia, compliance with which could require significant resources and costs. Our privacy policies and practices concerning the collection, use and disclosure of user data are posted on our websites. Any failure, or perceived failure, by us to comply with our posted privacy policies or with any regulatory requirements or privacy protection-related laws, rules and regulations could result in proceedings or actions against us by authorities or others. These proceedings or actions may subject us to significant penalties and negative publicity, require us to change our business practices, increase our costs and severely disrupt our business.

CROSS-BORDER OPERATIONS. As we plan to continue expanding our existing cross-border operations into existing and other markets, we will face risks associated with expanding into markets in which we havethe Company has limited or no experience and in which ourthe company may be less well-known. WeThe Company may be unable to attract a sufficient number of customers and other participants, fail to anticipate competitive conditions or face difficulties in operating effectively in these new markets. The expansion of ourthe Company’s cross-border business will also expose us to risks relating to staffing and managing cross-border operations, increased costs to protect intellectual property, tariffs and other trade barriers, differing and potentially adverse tax consequences, increased and conflicting regulatory compliance requirements, lack of acceptance of ourthe Company’s product and service offerings, challenges caused by distance, language and cultural differences, exchange rate risk and political instability. Accordingly, any efforts wethe Company make to expand ourits cross-border operations may not be successful, which could limit ourthe Company’s ability to grow ourits revenue, net income and profitability.

RISKS RELATED TO DOING BUSINESS IN ASIA PACIFIC REGION. Risk Related to Chemrex’s Business and Industry

The chemical raw material industry is cyclical and both recessions and prolonged periods of slow economic growth could have an adverse effect on Chemrex’s business.

Demand for most of Chemrex’s products is cyclical in nature and sensitive to general economic conditions. Chemrex’s business supports cyclical industries such as the construction, energy, appliance and medical devices. As a result, downturns in the Malaysian economy, the global economy or any of these industries could materially adversely affect Chemrex’s results of operations, financial condition and cash flows. The global economy is recovering from its lows during the third quarter of 2022, but the pace of the recovery in 2023 will likely depend on how quickly normal activities can resume as well as government stimulus programs or infrastructure spending. We expect that Chemrex can do better in 2023 if investments and visitors (especially from China) resume their entry into Malaysia as was the same pre-pandemic. The boosts in the tourism and public transportation industry will push up the FRP material usage for industrial needs. Nonetheless, even with this economic recovery, challenges from ongoing uncertainties, both in Malaysia and in other regions of the world, remain. However, we believed that Chemrex's customers in the manufacturing, construction, and oil and gas sectors would resume their normal operations from the second or third quarter of 2023.

BioNexus is unable to predict the duration of current economic conditions. Future economic downturns, prolonged slow growth or stagnation in the economy, or a sector-specific slowdown in one of its key end-use markets, such as non-residential construction, could materially adversely affect Chemrex’s business, results of operations, financial condition and cash flows, especially considering the capital-intensive nature of Chemrex’s business.

The results of Chemrex’s operations are sensitive to volatility in the cost of raw materials, particularly fibre reinforced plastics.

Chemrex, as a reseller, rely on outside vendors to supply us with raw materials, including fibre reinforced plastics. Chemrex purchase most of its primary raw material, from numerous other sources located throughout Malaysia and internationally.

Prices of these chemical raw materials are volatile and are influenced by changes exports in response to demands of Chemrex’s global competitors and customers, as well as currency fluctuations. At any given time, BioNexus may be unable to obtain an adequate supply of these chemical raw materials with price and other terms acceptable to us. The availability and prices of raw materials may also be negatively affected by new laws and regulations, allocation by suppliers, interruptions in production, accidents or natural disasters, changes in exchange rates, worldwide price fluctuations, and the availability and cost of transportation.

If Chemrex’s suppliers increase the prices of its chemical raw materials, BioNexus may not have alternative sources of supply. In addition, to the extent that Chemrex has quoted prices to its customers and accepted customer orders for its products prior to purchasing necessary raw materials, it may be unable to raise the price of its products to cover all or part of the increased cost of the materials. Also, if Chemrex are unable to obtain adequate and timely deliveries of its chemical raw materials, it may be unable to timely deliver orders of its products. This could cause Chemrex to lose sales, incur additional costs or suffer harm to its reputation.

Disruptions in the supply of chemicals that we distribute or in the operations of our customers could adversely affect our business.

Our business depends on access to adequate supplies of the chemicals that our customers purchase from us. From time to time, we may be unable to access adequate quantities of certain chemicals because of supply disruptions due to natural disasters (including hurricanes and other extreme weather), industrial accidents, scheduled production outages, high demand leading to allocation, port closures and other transportation disruptions and other circumstances beyond our control, or we may be unable to purchase chemicals that we are obligated to deliver to our customers at prices that enable us to earn a profit. In addition, unpredictable events may have a significant impact on the industries in which many of our customers operate, reducing demand for products that we normally distribute in significant volumes.

Significant changes in the business strategies of our suppliers could also disrupt our supply. Large chemicals manufacturers may elect to distribute certain products (or products in certain regions) directly to end user customers, instead of relying on independent distributors such as us. While we do not believe that our results depend materially on access to any individual producer’s products, a reversal of the trend toward more outsourced distribution of chemicals would likely result in increasing margin pressure or products becoming unavailable to us. Any of these developments could have a material adverse effect on our business, financial condition and results of operations.

We have non-written contracts with suppliers and customers, which are generally terminable upon notice, and the termination of our relationships with suppliers and customers contracts could negatively affect our business.

Our purchases and sales of chemicals are typically made pursuant to verbal purchase orders rather than written contracts. Many of our contracts with both customers and suppliers are terminable without cause upon 30 days’ notice to us from the supplier or customer. Our business relationships and reputation may suffer if we are unable to meet our delivery obligations to customers which may occur because many of our suppliers are not subject to contracts or can terminate contracts on short notice. In addition, renegotiation of purchase or sales terms to our disadvantage could reduce our sales margins. Any of these developments could adversely affect our business, financial condition, and results of operations.

We may lose customers and suffer damage to our reputation if we are unable to meet customer demand for a particular product.

We face the risk of dissatisfied customers and damage to our reputation if we cannot meet customer demand for a particular chemical because we are short on inventories. In addition, particularly in cases of pronounced cyclicality in the end market, it can be difficult to anticipate our customers’ requirements for particular chemicals, and we could be asked to deliver larger-than-expected quantities of a particular chemical on short notice. If for any reason we experience widespread, systemic difficulties in filling customer orders, our customers may be dissatisfied and discontinue their relationship with us or we may be required to pay a higher price to obtain the needed chemical on short notice, thereby adversely affecting our margins.

We may be exposed to product returns and product liability claims and latent defect liability claims.

Our FRP and other raw materials are used to produce a wide variety of goods including handrails, bench tops, automotive and aero parts, cleanroom panels, and covers for various instruments used in manufacturing. We are exposed to potential product returns and latent defect liability claims from our customers and the end-users of goods and products. Although we have put in place stringent quality control measures, including the setting up of different teams for incoming quality control, quality control and quality assurance which monitor the quality of the raw material, semi-finished products as well as finished products, there may be undetected flaws or manufacturing defects or other irregularities that may be subsequently detected at any point in the life of our products. We have adopted return policy on products with manufacturing defects to accommodate our customers. If after any checkup or analysis by our laboratory the defect of a product is found to be manufacturing defect, return and replacement of products will be made. Therefore, if undetected flaws or manufacturing defects or other irregularities from either the design or manufacture of our products are to occur, additional costs and expenses which we may not recoup may incur, and our revenue and costs control can be negatively impacted.

In addition, if our defective or sub-standard products cause bodily injuries or property damage, our suppliers may face latent defect liability claims from our customers or the end-users of goods and products made with our products and regardless of the merits or the outcome of these claims, we may be required to address and, if necessary, and divert management attention and other resources from our business and operations. We may also face adverse publicity associated with such claims, which could have an adverse effect on our business, results of operations and financial condition.

Risks Related to Its Operations

BioNexus’ officers and directors may in future have outside business activities. As a result, there may be potential conflicts of interest and negatively impact the amount of time they will be able to dedicate to the company.

Currently BioNexus’ officers, who are also directors, have been working on promoting business for the Company. A potential conflict of interest may arise in the future that may cause BioNexus’ business to fail, including conflicts of interest in allocating their time to the company and their other business interests. While the company’s officers have verbally agreed to devote sufficient time and attention to the affairs of the Company, it has no written arrangement with BioNexus’ officers regarding this matter. As a result, BioNexus may face conflicts between business decisions that they may have to make regarding its operations and that of their other business interests.

BioNexus may not be able to attract and retain key senior management members and research and development personnel.

BioNexus’ future success depends upon the continuing services of members of its senior management team and key research and development personnel and consultants. Although BioNexus typically requires BioNexus’ key personals to enter into non-compete and confidentiality agreement with us, BioNexus cannot prevent they join the company’s competitor after the non-compete period. The loss of their services could adversely impact its ability to achieve its business objectives. If one or more of BioNexus’ senior management or key clinical and scientific personnel are unable or unwilling to continue in their present positions or joins a competitor or forms a competing company, the company may not be able to replace them in a timely manner or at all, which will have a material and adverse effect on its business, financial condition and results of operations.

In addition, the continued growth of BioNexus’ business depends on its ability to hire additional qualified personnel with expertise in molecular biology, chemistry, biological information processing, software, engineering, sales, marketing, and technical support. BioNexus compete for qualified management and scientific personnel with other life science and technology companies, universities, and research institutions in Malaysia and overseas. Competition for these individuals is intense, and the turnover rate can be high. Failure to attract and retain management and scientific and engineering personnel could prevent the company from pursuing collaborations or developing its services and products or technologies. 

BioNexus may be unable to protect the company’s intellectual property adequately.

BioNexus’ software intellectual property is an essential asset of its business. To establish and protect its intellectual property rights, BioNexus relies primarily upon trade secrets, and to a lesser extent, contractual provisions with current and future employees. As a result, BioNexus’ efforts to protect its intellectual property may not be sufficient or effective. If these measures do not protect its intellectual property rights, third parties could use the Company’s technology, and its ability to compete in the market would be reduced significantly.

In addition, BioNexus may not be effective in policing unauthorized use of the company’s intellectual property. Even if BioNexus does detect violations, BioNexus may need to engage in litigation to enforce its intellectual property rights. Any enforcement efforts BioNexus undertake, including litigation, could be time-consuming and expensive and could divert BioNexus’ management’s attention. In addition, BioNexus’ efforts may be met with defenses and counterclaims challenging the validity and enforceability of its intellectual property rights or may result in a court determining that its intellectual property rights are unenforceable. If BioNexus is unable to cost-effectively protect its intellectual property rights, then its business could be harmed.

BioNexus may be subject to intellectual property claims, which are extremely costly to defend, could require us to pay significant damages and could limit the company’s ability to use certain technologies in the future.

Companies in bio-medical or bio-technology industries are frequently subject to litigation based on allegations of infringement or other violations of intellectual property rights. To the extent BioNexus gain greater public recognition, BioNexus may face a higher risk of being the subject of intellectual property claims. Third-party intellectual property rights may cover significant aspects of BioNexus’ technologies or business methods or block us from expanding its offerings. Any intellectual property claims against us, with or without merit, could be time consuming and expensive to settle or litigate and could divert the attention of its management. Litigation regarding intellectual property rights is inherently uncertain due to the complex issues involved, and the company may not be successful in defending itself in such matters.

In addition, some of BioNexus’ competitors have extensive portfolios of issued patents. Many potential litigants, including some of BioNexus’ competitors and patent holding companies, have the ability to dedicate substantial resources to enforcing their intellectual property rights. Any claims successfully brought against us could subject us to significant liability for damages and BioNexus may be required to stop using technology or other intellectual property alleged to be in violation of a third party’s rights. BioNexus also might be required to seek a license for third-party intellectual property. Even if a license is available, BioNexus could be required to pay significant royalties or submit to unreasonable terms, which would increase its operating expenses. BioNexus may also be required to develop alternative non-infringing technology, which could require significant time and expense. If BioNexus cannot license or develop technology for any allegedly infringing aspect of its business, BioNexus would be forced to limit its service and may be unable to compete effectively. Any of these results could harm BioNexus’ business.

BioNexus may pursue collaborations, in-licensing or out-license arrangements, joint ventures, strategic alliances, partnerships or other strategic investments or arrangements, which may fail to produce anticipated benefits and adversely affect the company’s operations.

BioNexus may pursue opportunities for collaboration, in-licensing, out-license, joint ventures, acquisitions of products, assets or technology, strategic alliances, or partnerships that BioNexus believes would be complementary to or promote BioNexus’ existing business. Proposing, negotiating and implementing these opportunities may be a lengthy and complex process. Other companies, including those with substantially greater financial, marketing, sales, technology, or other business resources, may compete with us for these opportunities or arrangements. BioNexus may not be able to identify, secure, or complete any such transactions or arrangements in a timely manner, on a cost-effective basis, on acceptable terms, or at all.

BioNexus has limited experience with respect to these business development activities. Management and integration of a licensing arrangement, collaboration, joint venture or other strategic arrangement may disrupt BioNexus’ current operations, decrease its profitability, result in significant expenses, or divert management resources that otherwise would be available for its existing business. BioNexus may not realize the anticipated benefits of any such transaction or arrangement.

Furthermore, partners, collaborators, or other parties to such transactions or arrangements may fail to fully perform their obligations or meet its expectations or cooperate with us satisfactorily for various reasons and subject us to potential risks, including the followings:

Any such transactions or arrangements may also require actions, consents, approval, waiver, participation or involvement of various degrees from third parties, such as regulators, government authorities, creditors, licensors or licensees, related individuals, suppliers, distributors, shareholders or other stakeholders or interested parties. There is no assurance that such third parties will be cooperative as BioNexus desires, or at all, in which case BioNexus may be unable to carry out the relevant transactions or arrangements.

Risks Related to Doing Business in the Southeast Asia Region

Changes in policies in Malaysia and other Southeast Asian countries could have a significant impact upon the company’s ability to operate profitably in Malaysia and the Southeast Asia region. 

Changes in the political and economic policies of the local governmentMalaysia and other governments in Southeast Asia may materially and adversely affect ourBioNexus’ business, financial condition and results of operations and may result in ourits inability to sustain ourits growth and expansion strategies. Accordingly, ourBioNexus’ financial condition and results of operations are affected to a significant extent by economic, political and legal developments in Southeast Asia Pacific region.

The Southeast Asia Pacific economy differs from the economies of most developed countries in many respects, including the extent of government involvement, level of development, growth rate, control of foreign exchange and allocation of resources. In addition, the government continues to play a significant role in regulating industry development by imposing industrial policies. The government also exercises significant control over economic growth by allocating resources, controlling payment of foreign currency-denominated obligations, setting monetary policy, regulating financial services and institutions and providing preferential treatment to particular industries or companies.

The local government hasLocal governments have implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures may benefit the overall economy, but may also have a negative effect on us. OurBioNexus’ financial condition and results of operation could be materially and adversely affected by government control over capital investments or changes in tax regulations that are applicable to us. In addition, the government has implemented in the past certain measures, including interest rate increases, to control the pace of economic growth. These measures may cause decreased economic activity, which in turn could lead to a reduction in demand for ourits services and consequently have a material adverse effect on ourits businesses, financial condition and results of operations.

YOU MAY EXPERIENCE DIFFICULTIES IN EFFECTING SERVICE OF LEGAL PROCESS, ENFORCING FOREIGN JUDGMENTS OR BRINGING ORIGINAL ACTIONS IN MALAYSIA BASED ON UNITED STATES OR OTHER FOREIGN LAWS AGAINST US OR OUR MANAGEMENT. Developments in the social, political, regulatory and economic environment in Malaysia may have a material adverse impact on us.Our

BioNexus’ business, prospects, financial condition and results of operations may be adversely affected by social, political, regulatory and economic developments in Malaysia. Such political and economic uncertainties include, but are not limited to, the risks of war, terrorism, nationalism, nullification of contract, changes in interest rates, imposition of capital controls and methods of taxation.

All sectors of the economy in 2022 across Malaysia saw their supply chains interrupted, demand for their products and services decline, shortages in supplies and inputs. We will emerge in a very different world compared to the one before the outbreak. All organizational functions are intended to prioritize and optimize spending or postpone tasks that will not bring value in the current environment. It created serious consequences because various businesses are facing massive losses due to their declining activities and the accompanying unpredictable future of many businesses. A substantial decrease has been observed in overall spending, which resulted in an array of estimated long-term uncertainty impacts. Consequently, many businesses and firms closed, and employees were dismissed. Towards a new recovery phase in 2022, most businesses and organizational functions were prioritizing our spending or postpone any tasks and events that do not bring any value to the current situation because even when the challenges are successfully addressed, this will not guarantee any promising future. Hence, we were alerted about the available survival strategies to sustain us throughout this unforeseen circumstance and in the future. A “new normal” indicates how we should digest the current situation and initiate a business growth pattern. Returning to the pre-pandemic business pattern will take time and depends on the government’s response to the population health and socioeconomic demands arising due to the pandemic.

Although the overall Malaysian economic environment (in which BioNexus predominantly operate) appears to be positive, there can be no assurance that this will continue to prevail in the future. Economic growth is determined by countless factors, and it is extremely difficult to predict with any level of absolute certainty.

You may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing actions in Malaysia against the company or its management based on foreign laws, and the ability of U.S. authorities to bring actions in Malaysia may also be limited.

The company’s operating subsidiary issubsidiaries are incorporated in Malaysia and conductsconduct substantially all of ourits operations in Asia Pacific.Southeast Asia. All of ourBioNexus’ executive officers and directors reside outside the United States, and all of their assets are located outside of the United States. As a result, it may be difficult or impossible for shareholders to bring an action against us or against these individuals in Malaysia in the event that you believe that your rights have been infringed under the securities laws of the United States or otherwise.  Even if you are successful in bringing an action of this kind, the laws of Malaysia may render you unable to enforce a judgment against ourBioNexus’ assets or the assets of ourBioNexus’ directors and officers. There is no statutory recognition in Malaysia of judgments obtained in the United States, although the courts of Malaysia will generally recognize and enforce a non-penal judgment of a foreign court of competent jurisdiction without retrial on the merits. The rights of shareholders to take legal action against us and ourBioNexus’ directors, actions by minority shareholders and the fiduciary responsibilities of ourits directors are to a large extent governed by the common law of Malaysia. The common law of Malaysia is derived in part from comparatively limited judicial precedent in Malaysia as well as from English common law, which provides persuasive, but not binding, authority in a court in Malaysia. The rights of ourBioNexus’ shareholders and the fiduciary responsibilities of ourits directors under Malaysian law are not as clearly established as they would be under statutes or judicial precedents in the United States. In particular, Malaysia has a less developed body of securities laws than the United States and provides significantly less protection to investors. As a result, ourBioNexus’ public shareholders may have more difficulty in protecting their interests through actions against us, ourits management, ourits directors or ourits major shareholders than would shareholders of a corporation incorporated in a jurisdiction in the United States.

Risks Related In addition, to Our Common Stockreceive any form of remedy, the shareholders would have to engage Malaysian counsel regarding the process to receive any such remedy.

SALES OF OUR COMMON STOCK IN RELIANCE ON RULE 144 MAY REDUCE PRICES IN THAT MARKET BY A MATERIAL AMOUNT. A significant number of the outstanding shares of our common stock are “restricted securities” within the meaning of Rule 144 under the Securities Act. As restricted securities, those shares may be resold only pursuant to an effective registration statement or pursuant to the requirements of Rule 144 or other applicable exemptions from registration under the Securities Act and as required under applicable state securities laws. Rule 144 provides in essence that an affiliate (i.e., an officer, director or control person) who has held restricted securities for a prescribed period may, under certain conditions, sell every three months, in brokerage transactions, a number of shares that does not exceed 1.0% of the issuer’s outstanding common stock. The alternative limitation on the number of shares that may be sold by an affiliate, whichBioNexus is related to the average weekly trading volume during the four calendar weeks prior to the sale is not available to stockholders of companies whose securities are not traded on an “automated quotation system”; because the OTC-QB Market is not such a system, market-based volume limitations are not available for holders of our securities selling under Rule 144.

Pursuant to the provisions of Rule 144, there is no limit on the number of restricted securities that may be sold by a non-affiliate (i.e., a stockholder who has not been an officer, director or control person for at least 90 consecutive days before the date of the proposed sale) after the restricted securities have been held by the owner for a prescribed period, although there may be other limitations and/or criteria to satisfy. A sale pursuant to Rule 144 or pursuant to any other exemption from the Securities Act, if available, or pursuant to registration of shares of our common stock held by our stockholders, may reduce the price of our common stock in any market that may develop.

YOU MAY NOT BE ABLE TO LIQUIDATE YOUR INVESTMENT SINCE THERE IS NO ASSURANCE THAT A PUBLIC MARKET WILL DEVELOP FOR OUR COMMON STOCK OR THAT OUR COMMON STOCK WILL EVER BE APPROVED FOR TRADING ON A RECOGNIZED EXCHANGE. There is no established public trading market for our securities. Although we intend to be quoted on the OTC-QB Market in the United States, our shares are not and have not been quoted on any exchange or quotation system. We cannot assure you that a market maker will agree to file the necessary documents with the FINRA, nor can there be any assurance that such an application for quotation will be approved or that a regular trading market will develop or that if developed, will be sustained. In the absence of a trading market, an investor may be unable to liquidate its investment, which will result in the loss of your investment.

OUR COMMON STOCK IS SUBJECT TO THE “PENNY STOCK” RULES OF THE SEC AND THE TRADING MARKET IN OUR SECURITIES IS LIMITED, WHICH MAKES TRANSACTIONS IN OUR STOCK CUMBERSOME AND MAY REDUCE THE VALUE OF AN INVESTMENT IN OUR STOCK. Under U.S. federal securities legislation, our common stock will constitute “penny stock”. Penny stock is any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require that a broker or dealer approve a potential investor’s account for transactionsforeign exchange control policies in penny stocks, and the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased. In order to approve an investor’s account for transactions in penny stocks, the broker or dealer must obtain financial information and investment experience objectives of the person, and make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the Commission relating to the penny stock market, which, in highlight form sets forth the basis on which the broker or dealer made the suitability determination. Brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock. Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

IN THE FUTURE, WE MAY ISSUE ADDITIONAL COMMON AND PREFERRED SHARES, WHICH WOULD REDUCE INVESTORS’ PERCENT OF OWNERSHIP AND MAY DILUTE OUR SHARE VALUE. Malaysia.Our Articles of Incorporation authorize the issuance of 300,000,000 shares of common stock. As of the date of this filing, the Company had 171,218,152 shares of common stock outstanding. Accordingly, we may issue up to an additional 128,781,848 shares of common stock. In addition, we have the right to issue 30,000,000 shares of preferred stock. The preferred stock is known as “blank check” as the Board of Directors is authorized to set the rights, privileges and preference of the preferred stock. The future issuance of common stock and preferred may result in substantial dilution in the percentage of our common stock held by our then existing shareholders. We may value any common stock issued in the future on an arbitrary basis. The issuance of common stock or preferred stock for future services or acquisitions or other corporate actions may have the effect of diluting the value of the shares held by our investors, and might have an adverse effect on any trading market for our common stock.

UPON EFFECTIVENESS OF THIS REGISTRATION STATEMENT, WE WILL NOT BE A FULLY REPORTING COMPANY UNDER SECTION 12(G) OF THE SECURITIES EXCHANGE ACT OF 1934, RATHER WE WILL BE SUBJECT TO THE REPORTING REQUIREMENTS OF SECTION 15(D) OF THE EXCHANGE ACT WHICH IS LESS RESTRICTIVE ON US AND OUR INSIDERS. In order for us to become a fully reporting company under Section 12(g) of the Exchange Act, we will have to file a Registration Statement on Form 8-A. If we do not become subject to Section 12 of the Exchange Act, we will be subject to Section 15(d) of the Exchange Act, and as such we will not be required to comply with (i) the proxy statement requirements which means shareholders may have less notice of pending matters, and (ii) the Williams Act which requires disclosure of persons or groups that acquire 5% of a company’s publicly traded stock and also regulates tender offers. In addition, our officer, director and 10% stockholder will not be required to submit reports to the SEC on their stock ownership and stock trading activity. These reports include Form 3, 4 and 5.Therefore, as a shareholder, less information and disclosure concerning these matters will be available to you.

WE DO NOT INTEND TO PAY ANY CASH DIVIDENDS ON OUR COMMON STOCK, OUR STOCKHOLDERS WILL NOT BE ABLE TO RECEIVE A RETURN ON THEIR SHARES UNLESS THEY SELL THEM. We intend to retain any future earnings to finance the development and expansion of our business. We do not anticipate paying any cash dividends on our common stock in the foreseeable future. Unless we pay dividends, our stockholders will not be able to receive a return on their shares unless they sell them. There is no assurance that stockholders will be able to sell shares when desired.

OUR COMMON STOCK PRICE IS LIKELY TO BE HIGHLY VOLATILE WHICH MAY SUBJECT US TO SECURITIES LITIGATION THEREBY DIVERTING OUR RESOURCES WHICH MAY AFFECT OUR PROFITABILITY AND RESULTS OF OPERATION. The market price for our common stock is likely to be highly volatile as the stock market in general and the market for Internet-related stocks.

The following factors will addability of BioNexus’ subsidiaries to our common stock price’s volatility:

Manypay dividends or make other payments may be restricted by the foreign exchange control policies in the countries where they operate. For example, there are foreign exchange policies in Malaysia which support the monitoring of these factorscapital flows into and out of the country in order to preserve its financial and economic stability. The foreign exchange policies are beyond our control. These factors may decreaseadministered by the market priceForeign Exchange Administration, an arm of our common stock, regardlessBank Negara Malaysia (“BNM”), the central bank of our operating performance.Malaysia. The foreign exchange policies monitor and regulate both residents and non-residents. Under the current Foreign Exchange Administration rules issued by BNM, non-residents are free to repatriate any amount of funds from Malaysia in foreign currency other than the currency of Israel at any time (subject to limited exceptions), including capital, divestment proceeds, profits, dividends, rental, fees and interest arising from investment in Malaysia, subject to any withholding tax. In the past, plaintiffs have initiated securities class action litigation against a company following periods of volatilityevent BNM or any other country where BioNexus operates introduces any restrictions in the market price of its securities. In the future, weit may be the targetaffected in its ability to repatriate dividends or other payments from BioNexus’ subsidiaries in Malaysia or in such other countries. Since BioNexus rely principally on dividends and other payments from its subsidiaries for its cash requirements, any restrictions on such dividends or other payments could materially and adversely affect its liquidity, financial condition and results of similar litigation. Securities litigation could result in substantial costs and liabilities and could divert management’s attention and resources.operations.

REDUCED DISCLOSURE REQUIREMENTS APPLICABLE TO EMERGING GROWTH COMPANIES MAY MAKE OUR COMMON STOCK LESS ATTRACTIVE TO INVESTORS. We qualify as an “emerging growth company” under the JOBS Act. As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required to:

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We will remain an emerging growth company for up to five full fiscal years, although if the market value of our common stock that is held by non-affiliates exceeds $700 million as of any January 31 before that time, we would cease to be an emerging growth company as of the following December 31, or if our annual revenues exceed $1 billion, we would cease to be an emerging growth company the following fiscal year, or if we issue more than $1 billion in non-convertible debt in a three-year period, we would cease to be an emerging growth company immediately.

Notwithstanding the above, we are also currently a “smaller reporting company,” meaning that we are not an investment company, an asset-backed issuer, nor a majority-owned subsidiary of a parent company that is not a smaller reporting company, and has a public float of less than $75 million and annual revenues of less than $50 million during the most recently completed fiscal year. If we are still considered a “smaller reporting company” at such time as we cease to be an “emerging growth company,” we will be subject to increased disclosure requirements. However, the disclosure requirements will still be less than they would be if we were not considered either an “emerging growth company” or a “smaller reporting company.” Specifically, similar to “emerging growth companies”, “smaller reporting companies” are able to provide simplified executive compensation disclosures in their filings; are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting; are not required to conduct say-on-pay and frequency votes until annual meetings occurring on or after January 21, 2015; and have certain other decreased disclosure obligations in their SEC filings, including, among other things, only being required to provide two years of audited financial statements in annual reports. Decreased disclosures in its SEC filings due to its status as an “emerging growth company” or “smaller reporting company” may make us less attractive to investors given that it will be harder for investors to analyze the Company’s results of operations and financial prospects and, as a result, it may be difficult for us to raise additional capital as and when we need it.

Item 1B. Unresolved Staff Comments.

None.

Item 2. Properties.

Our corporate offices and the offices of BioNexus Malaysia areoffice for BGL is located at Unit 02, Level 10,2, level, Tower B, Avenue 3, The Vertical Business Suite II, BangarBangsar South, No. 8 Jalan Kerinchi, 59200 Kuala Lumpur, Malaysia. The lease commenced inon December 16, 2018 and terminates on December 15, 2019 and terminates in December 15, 2021.2024. The space consists of 1,300 square feet with an annual rent of approximately $13,200 USD.$13,500.

One of our labs is located at 4^th Floor, Wisma Life Care, No. 5, Jalan Kerinchi, Bangsar South, 59200 Kuala Lumpur, Malaysia. The lease commenced on November 1, 2016 and terminates on October 31, 2023. The annual rent is approximately $6,800. Our other laboratory is located at Lab 353, University Science Malaysia, George Town, Penang, Malaysia. The lease commenced on MayDecember 1, 2017 and terminateson April 2022.November 30, 2024. The space consists of 1,500 square feet with an annual rent of approximately $8,400 USD.$7,300.

Chemrex’s office andOn July 2, 2012, we purchased a 25,000 sq. ft wholesale distribution center is located at 4, Jalan CJ 1/6, Kawasan Perusahaan Cheras Jaya, 43200 Cheras, Selangor, Malaysia.Malaysia, and two investment properties for $1,506,969. The space consists of 25,000 square feet. Chemrex is the owner of the premises.two investment properties are listed below.

Chemrex also maintains two investment properties;

	·	A 1,100 sqft condominium located at No. Unit 2B-17-03, Duet Residence, Jalan Kinrara 6, Bandar Kinrara, 47180 Puchong, Selangor, purchased on August 26, 2020;
	·	A 2,000 sqft commercial building located at First floor, No. 2B Pelangi Avenue, Jalan Kelicap 42A/KU1, Klang Bandar, Diraja, 41050 Klang, Selangor purchased on September 21, 2020.

1. A condominium locatedOn January 18, 2023, we entered into a lease for the first-floor unit at No. B-17-03, Duet Residence,5-1, Jalan Kinrara 6,CJ3/13-2, Pusat Bandar Kinrara, 47180 Puchong,Cheras Jaya, 43200 Cheras, Selangor. The premises is 1,100 square feetlease commenced on 18 January 2023 and is leased to a third party at a rateterminates on January 17, 2024. The purpose of $488 per month. Thethis lease is to provide accommodation for 2 years terminating on February 2022.

2. A commercial building located at First floor, No. 2B Pelangi Avenue, Jalan Kelicap 42A/KU1, Klang Bandar, Diraja, 41050 Klang, Selangor. The premises is 2,000 square feet and is not leased as of the date of this filing.our warehouse staff.  

Item 3. Legal Proceedings.

ThereWe are presentlynot subjected to nor engaged in any litigation, arbitration, or claim of material importance, and no litigation, arbitration, or claim of material importance is known to us to be pending legal proceedings to which theor threatened by or against our Company or any of its property is subject, or any material proceedings to which any director, officer or affiliate of the Company, any owner of record or beneficially of more than five percent of any class of voting securities is a party or hasthat would have a material interest adverse to the Company, and no such proceedings are known to the Company to be threatenedeffect on our Company's results of operations or contemplated against it.financial condition.

Item 4. Mine Safety Disclosures.

None.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information

On March 11, 2020, FINRA authorized the trading of ourBioNexus’ common stock under the symbol “BGLC”, however, we began trading on the OTC-Pink/QBOTC-QB markets in January 2021.September 2020. The table below sets forth, for the fiscal quarters indicated, the high and low bid prices per share of our common stock as reflected on the OTC-QB/PinkOTC-QB markets. The quotations represent inter-dealer prices without adjustment for retail markups, markdowns or commissions, and may not necessarily represent actual transactions.

The bid prices set forth below reflect inter-dealer quotations, do not include retail markups, markdowns or commissions and do not necessarily reflect actual transactions.

The OTC-QB is a quotation system and not a national securities exchange, and many companies have experienced limited liquidity when traded through this quotation system. Any trading has been sporadic and there has been no meaningful trading volume.

Capital Stock:

Our authorized capital stock consists of 300,000,000 shares of common stock, no par value per share, and 30,000,000 shares of preferred stock, no par value per share. As of March 30, 2021,the date of this filing, there are 171,218,152173,718,152 shares of our common stock issued and outstanding that was held by 336316 stockholders of record and no shares of preferred stock issued and outstanding. The shares of preferred stock are “blank check’ meaning the Company’s Boardboard of Directorsdirectors can issue shares of preferred stock in such series with such rights, privileges and preferences as determined from time to time by the Boardboard of Directorsdirectors without shareholder approval.

Dividend Policy

The Company has not declared or paid any cash dividends on its Common Stock and does not intend to declare or pay any cash dividend in the foreseeable future. The payment of dividends, if any, is within the discretion of the Boardboard of Directorsdirectors and will depend on the Company’s earnings, if any, its capital requirements and financial condition and such other factors as the Boardboard of Directorsdirectors may consider.

Securities Authorized for Issuance under Equity Compensation Plans

The Company does not have any equity compensation plans or any individual compensation arrangements with respect to its Common Stock or Preferred Stock. The issuance of any of our Common Stock or Preferred Stock is within the discretion of our Boardboard of Directors,directors, which has the power to issue any or all of our authorized but unissued shares without stockholder approval.

Recent Sales of Unregistered Securities.

None

Issuer Purchases of Equity Securities

None

Item 6. Selected Financial Data.

As a “smaller reporting company” as defined by Rule 12b-2 of the Exchange Act, the Company is not required to provide this information.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

General.

Our Company BioNexus was incorporated in the State of Wyoming on April 5,May 12, 2017 and operations of our Malaysian company began operations in July 2017. Consequently, the following discussion and analysis of the results of operations and financial condition of the Company is for fiscal years ended December 31, 20202022 and December 31, 2019,2021, respectively. This information should be read in conjunction with the notes to the financial statements that are included elsewhere herein. The consolidated financial statements presented herein (and to which this discussion relates) reflect the results of operations of the Company and its Malaysian subsidiaries. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements. We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this report, except as required by law. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this quarterly report, which are designed to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.

COMPANY OVERVIEWCompany Overview

Our financial statements are prepared in US Dollars and in accordance with accounting principles generally accepted in the United States. See information immediately below for information concerning the exchange rates at the Malaysian translated into US Dollars (“USD”) at various pertinent dates and for pertinent periods.

Translation of amounts from the local currency of the Company into US$1 has been made at the following exchange rates for the respective years: