UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

(Mark One)

 

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

 

For the quarterly period ended SeptemberJune 30, 20222023

 

OR

 

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

 

For the transition period from _____________

 

Commission File Number: 333-229399

 

BIONEXUS GENE LAB CORP.

(Exact name of registrant as specified in its charter)

 

Wyoming

 

35-2604830

(State or Other Jurisdiction of

Incorporation or Organization)

 

(I.R.S. Employer

Identification No.)

 

 

 

Unit 02, Level 10 Tower B, Avenue 3, The Vertical

Business Suite II Bangsar SouthNo.South No. 8 Jalan Kerinchi

Kuala Lumpur, Malaysia

 

59200

(Address of Principal Executive Offices)

 

(Zip Code)

 

+60 1221-26512

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:None

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, no par value

BGLC

The Nasdaq Stock Market LLC

 

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, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer, “ “ accelerated filer, “ “non-accelerated filer ,” “ smaller reporting company, “ and “ emerging growth company “ in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer

Accelerated filer

Non-accelerated Filer

Smaller reporting company

 

 

Emerging growth company

 

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 ☒

  

As of November 11, 2022,August 14, 2023, there were 173,718,15217,698,549 shares of common stock, no par value per share, issued and outstanding.

 

 

 

 

TABLE OF CONTENTS

 

 

 

 

 

Page

 

PART I – FINANCIAL INFORMATION

 

 

 

 

Item 1.

Financial Statements

 

 

4

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

2322

 

Item 3.

Certain RelationshipsQuantitative and Related TransactionsQualitative Disclosures About Market Risk

 

 

 3130

 

Item 4.

QuantitativeControls and Qualitative Disclosures About Market RiskProcedures

 

 

31

Item 5.

Controls and Procedures

32

 

 

 

 

 

 

 

PART II – OTHER INFORMATION

 

 

 

 

Item 1.

Legal Proceedings

 

 

3332

 

Item 2.

Unregistered Sale of Equity Securities and Use of Proceeds

32

Item 3.

Defaults Upon Senior Securities

32

Item 4.

Mine Safety Disclosures

32

Item 5.

Other Information

32

Item 6.

Exhibits

 

 

33

Item 3.

Defaults Upon Senior Securities

33

Item 4.

Mine Safety Disclosures

33

Item 5.

Other Information

33

Item 6.

Exhibits

34

 

 

 

 

 

 

 

SIGNATURES

 

 

3534

 

 

 
2

Table of Contents

  

CAUTIONARY NOTE REGARDING

FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q contains statements that may be deemed to be “forward-looking statements” within the meaning of the federal securities laws. These statements relate to anticipated future events, future results of operations and or future financial performance. In some cases, you can identify forward-looking statements by their use of terminology such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “future,” “intend,” “may,” “ought to,” “plan,” “possible,” “potentially,” “predicts,” “project,” “should,” “will,” “would,” negatives of such terms or other similar terms. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. The forward-looking statements in this Quarterly Report on Form 10-Q include, without limitation, statements relating to:

 

 

our goals and strategies;

 

 

 

 

our future business development, results of operations and financial condition;

 

 

 

 

our estimates regarding expenses, future revenues, capital requirements and our need for additional financing;

 

 

 

 

our estimates regarding the market opportunity for our services;

 

 

 

 

the impact of government laws and regulations;

 

 

 

 

our ability to recruit and retain qualified personnel;

 

 

 

 

our failure to comply with regulatory guidelines;

 

 

 

 

uncertainty in industry demand;

 

 

 

 

general economic conditions and market conditions in the financial services industry;

 

 

 

 

future sales of large blocks or our securities, which may adversely impact our share price; and

 

 

 

 

depth of the trading market in our securities.

 

The preceding list is not intended to be an exhaustive list of all of our forward-looking statements. Forward-looking statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties, including those described in Item 1A “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 20212022 and elsewhere in this Quarterly Report on Form 10-Q.

 

You should not unduly rely on any forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or will occur. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Quarterly Report on Form 10-Q, to conform these statements to actual results or to changes in our expectations.

 

 
3

Table of Contents

PART I — FINANCIAL INFORMATION

ITEM 1. Financial Statements

 

BIONEXUS GENE LAB CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBERJUNE 30, 20222023 AND DECEMBER 31, 20212022

(Currency expressed in United States Dollars (“US$”))

 

 

 

As of

 

 

 

As of

 

 

 

September 30,

 

December 31,

 

 

 

June 30,

 

December 31,

 

 

Note

 

 

2022

 

 

2021

 

 

Note

 

 

2023

 

 

2022

 

 

 

(Unaudited)

 

 

(Audited)

 

 

 

(Unaudited)

 

 

(Audited)

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and bank balances

 

 

 

478,181

 

578,511

 

 

 

 

297,084

 

611,849

 

Fixed deposits placed with financial institutions

 

 

 

984,088

 

1,545,408

 

 

 

 

1,461,596

 

1,507,015

 

Trade receivables

 

4

 

2,725,414

 

3,356,898

 

 

3

 

2,195,815

 

2,868,364

 

Other receivables, deposits and prepayments

 

 

 

72,600

 

79,517

 

 

 

 

47,481

 

25,240

 

Deferred cost of revenue

 

 

 

-

 

67,606

 

Tax recoverable

 

5

 

52,749

 

-

 

 

4

 

59,000

 

31,551

 

Inventories

 

 

 

 

1,095,943

 

 

 

1,521,915

 

 

 

 

 

1,165,773

 

 

 

977,807

 

Total current assets

 

 

 

 

5,408,975

 

 

 

7,149,855

 

 

 

 

 

5,226,749

 

 

 

6,021,826

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NON-CURRENT ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease right of use asset, net

 

6

 

24,975

 

41,090

 

Operating lease right of use assets

 

5

 

44,896

 

55,730

 

Property, plant and equipment, net

 

7

 

1,440,303

 

1,634,418

 

 

6

 

1,396,621

 

1,511,708

 

Other investments

 

8

 

 

923,983

 

 

 

749,027

 

 

7

 

 

1,230,674

 

 

 

1,150,898

 

Total non-current assets

 

 

 

 

2,389,261

 

 

 

2,424,535

 

 

 

 

 

2,672,191

 

 

 

2,718,336

 

TOTAL ASSETS

 

 

 

$7,798,236

 

 

$9,574,390

 

 

 

 

$7,898,940

 

 

$8,740,162

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade payables

 

9

 

1,278,699

 

2,012,266

 

 

8

 

1,822,506

 

1,861,015

 

Other payables and accrued liabilities

 

 

 

35,945

 

71,814

 

 

 

 

30,771

 

103,370

 

Current portion of obligation under finance lease

 

 

 

-

 

21,235

 

Current portion of operating lease liabilities

 

6

 

11,782

 

18,272

 

 

5

 

16,098

 

16,569

 

Advance payment from customer

 

 

 

8,497

 

30,307

 

 

 

 

 

7,094

 

 

 

23,123

 

Deferred revenue

 

 

 

-

 

77,276

 

Tax payables

 

5

 

 

-

 

 

 

97,585

 

Total current liabilities

 

 

 

 

1,334,923

 

 

 

2,328,755

 

 

 

 

 

1,876,469

 

 

 

2,004,077

 

 

 

 

 

 

 

 

NON-CURRENT LIABILITIES

 

 

 

 

 

 

 

Non-current portion of operating lease liabilities

 

5

 

29,658

 

40,206

 

Deferred tax liabilities

 

4

 

 

29,047

 

 

 

30,866

 

Total non-current liabilities

 

 

 

 

58,705

 

 

 

71,072

 

TOTAL LIABILITIES

 

 

 

$1,935,174

 

 

$2,075,149

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

As at June 30, 2023, common stock, no par value; 300,000,000 shares authorized and 173,718,152 shares outstanding, and preferred stock, no par value; 30,000,000 shares authorized and no shares outstanding. As at December 31, 2022, common stock, no par value; 300,000,000 shares authorized and 173,718,152 shares outstanding, and preferred stock, no par value; 30,000,000 shares authorized and no shares outstanding.

 

10

 

10,929,574

 

10,929,574

 

Additional paid in capital

 

 

 

(5,011,891)

 

(5,011,891)

Accumulated surplus

 

 

 

828,075

 

1,156,392

 

Accumulated other comprehensive losses

 

 

 

 

(781,992)

 

 

(409,062)

TOTAL STOCKHOLDERS’ EQUITY

 

 

 

 

5,963,766

 

 

 

6,665,013

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

$7,898,940

 

 

$8,740,162

 

 

See accompanying notes to the condensed consolidated financial statements.

 

 
4

Table of Contents

ITEM 1. FINANCIAL STATEMENTS (CONT’D)

  

BIONEXUS GENE LAB CORP.

CONDENSED CONSOLIDATED BALANCE SHEETSSTATEMENTS OF OPERATIONS

AS OF SEPTEMBERFOR THE THREE AND SIX MONTHS ENDED JUNE 30, 20222023 AND DECEMBER 31, 20212022

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

 

 

 

 

As of

 

 

 

 

 

September 30,

 

 

December 31,

 

 

 

Note

 

 

2022

 

 

2021

 

 

 

 

 

(Unaudited)

 

 

(Audited)

 

 

 

 

 

 

 

 

 

 

 

NON-CURRENT LIABILITIES

 

 

 

 

 

 

 

 

 

Non-current portion of obligation under finance lease

 

 

 

 

 

-

 

 

 

12,803

 

Non-current portion of operating lease liabilities

 

 

6

 

 

 

14,118

 

 

 

24,637

 

Deferred tax liabilities

 

 

5

 

 

 

25,541

 

 

 

28,416

 

Total non-current liabilities

 

 

 

 

 

 

39,659

 

 

 

65,856

 

TOTAL LIABILITIES

 

 

 

 

 

$1,374,582

 

 

$2,394,611

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

As at September 30, 2022, common stock, no par value; 300,000,000 shares authorized and 173,718,152 shares outstanding, and preferred stock, no par value; 30,000,000 shares authorized and no shares outstanding. As at December 31, 2021, common stock, no par value; 300,000,000 shares authorized and 171,218,152 shares outstanding, and preferred stock, no par value; 30,000,000 shares authorized and no shares outstanding.

 

 

10

 

 

 

10,929,574

 

 

 

10,779,574

 

Additional paid in capital

 

 

 

 

 

 

(5,011,891)

 

 

(5,011,891)

Accumulated surplus

 

 

 

 

 

 

1,313,361

 

 

 

1,512,358

 

Other comprehensive losses

 

 

 

 

 

 

(807,390)

 

 

(100,262)

TOTAL STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

6,423,654

 

 

 

7,179,779

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

$7,798,236

 

 

$9,574,390

 

 

 

Three months ended

 

 

Six months ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

REVENUE

 

$2,566,848

 

 

$2,485,101

 

 

$4,944,053

 

 

$5,514,046

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COST OF REVENUE

 

 

(2,227,134)

 

 

(2,221,130)

 

 

(4,235,442)

 

 

(4,893,742)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

 

339,714

 

 

 

263,971

 

 

 

708,611

 

 

 

620,304

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME

 

 

195,164

 

 

 

52,848

 

 

 

312,508

 

 

 

99,230

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

(807,077)

 

 

(454,783)

 

 

(1,343,949)

 

 

(822,807)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS FROM OPERATIONS

 

 

(272,199)

 

 

(137,964)

 

 

(322,830)

 

 

(103,273)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FINANCE COSTS

 

 

(3,042)

 

 

(2,319)

 

 

(5,487)

 

 

(5,645)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS BEFORE TAX

 

 

(275,241)

 

 

(140,283)

 

 

(328,317)

 

 

(108,918)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax credit/ (expense)

 

 

15,990

 

 

 

1,621

 

 

 

-

 

 

 

(12,678)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS

 

$(259,251)

 

$(138,662)

 

$(328,317)

 

$(121,596)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation loss

 

 

(333,891)

 

 

(317,760)

 

 

(372,930)

 

 

(386,536)

COMPREHENSIVE LOSS

 

$(593,142)

 

$(456,422)

 

$(701,247)

 

$(508,132)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share - Basic and diluted

 

 

(0.003)

 

 

(0.003)

 

 

(0.004)

 

 

(0.003)

Weighted average number of common shares outstanding – Basic and diluted

 

 

173,718,152

 

 

 

172,976,394

 

 

 

173,718,152

 

 

 

172,102,130

 

 

See accompanying notes to the condensed consolidated financial statements.

 

 
5

Table of Contents

BIONEXUS GENE LAB CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

 

 

Three months ended

 

 

Nine months ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

REVENUE

 

$2,575,086

 

 

$3,575,966

 

 

$8,089,132

 

 

$10,117,296

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COST OF REVENUE

 

 

(2,275,587)

 

 

(2,866,772)

 

 

(7,169,329)

 

 

(8,327,522)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

 

299,499

 

 

 

709,194

 

 

 

919,803

 

 

 

1,789,774

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME

 

 

54,110

 

 

 

46,848

 

 

 

153,340

 

 

 

159,764

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

(418,824)

 

 

(383,401)

 

 

(1,241,631)

 

 

(1,094,774)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(LOSS)/PROFIT FROM OPERATIONS

 

 

(65,215)

 

 

372,641

 

 

 

(168,488)

 

 

854,764

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FINANCE COSTS

 

 

(2,072)

 

 

(2,150)

 

 

(7,717)

 

 

(8,987)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(LOSS)/PROFIT BEFORE TAX

 

 

(67,287)

 

 

370,491

 

 

 

(176,205)

 

 

845,777

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax expense

 

 

(10,114)

 

 

(75,169)

 

 

(22,792)

 

 

(183,449)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET (LOSS)/PROFIT

 

$(77,401)

 

$295,322

 

 

$(198,997)

 

$662,328

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation loss

 

 

(320,592)

 

 

(56,940)

 

 

(707,128)

 

 

(272,876)

COMPREHENSIVE (LOSS)/INCOME

 

$(397,993)

 

$238,382

 

 

$(906,125)

 

$389,452

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share - Basic and diluted

 

 

0.00

 

 

 

0.00

 

 

 

0.00

 

 

 

0.00

 

Weighted average number of common shares outstanding – Basic and diluted

 

 

173,718,152

 

 

 

171,218,152

 

 

 

172,646,723

 

 

 

171,218,152

 

See accompanying notes to the condensed consolidated financial statements.

6

Table of Contents

  

BIONEXUS GENE LAB CORP

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

AS OF SEPTEMBERJUNE 30, 20222023 AND 20212022

(Amount expressed in United States Dollars (“US$))

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

other

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

Common stock

 

paid in

 

Accumulated

 

comprehensive

 

Total

 

 

Common stock

 

Additional

paid in

 

 

Accumulated

 

other

comprehensive

 

 

Total

 

 

Number of shares

 

 

Amount

 

 

capital

 

 

surplus

 

 

income/(loss)

 

 

Equity

 

 

Number of shares

 

 

Amount

 

 

capital

 

 

surplus

 

 

loss

 

 

Equity

 

Balance as of December 31, 2020

 

171,218,152

 

$10,779,574

 

$(5,011,891)

 

$760,787

 

$133,684

 

$6,662,154

 

Balance as of December 31, 2021

 

171,218,152

 

$10,779,574

 

$(5,011,891)

 

$1,512,358

 

$(100,262)

 

$7,179,779

 

Net profit for the period

 

-

 

-

 

-

 

338,744

 

-

 

338,744

 

 

-

 

-

 

-

 

17,066

 

-

 

17,066

 

Foreign currency translation loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(208,468)

 

 

(208,468)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(68,776)

 

 

(68,776)

Balance as of March 31, 2021

 

171,218,152

 

$10,779,574

 

$(5,011,891)

 

$1,099,531

 

$(74,784)

 

$6,792,430

 

Net profit for the period

 

-

 

-

 

-

 

28,262

 

-

 

28,262

 

Balance as of March 31, 2022

 

 

171,218,152

 

 

$10,779,574

 

 

$(5,011,891)

 

$1,529,424

 

 

$(169,038)

 

$7,128,069

 

Net loss for the period

 

-

 

-

 

-

 

(138,662)

 

-

 

(138,662)

Issuance of shares

 

2,500,000

 

150,000

 

-

 

-

 

-

 

150,000

 

Foreign currency translation loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(7,468)

 

 

(7,468)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(317,760)

 

 

(317,760)

Balance as of June 30, 2021

 

171,218,152

 

$10,779,574

 

$(5,011,891)

 

$1,127,793

 

$(82,252)

 

$6,813,224

 

Net profit for the period

 

-

 

-

 

-

 

295,322

 

-

 

295,322

 

Foreign currency translation loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(56,940)

 

 

(56,940)

Balance as of September 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

2021

 

 

171,218,152

 

 

$10,779,574

 

 

$(5,011,891 )

 

$1,423,115

 

 

$(139,192)

 

$7,051,606

 

Balance as of June 30, 2022

 

 

173,718,152

 

 

$10,929,574

 

 

$(5,011,891)

 

$1,390,762

 

 

$(486,798)

 

$6,821,647

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

Additional

 

 

Accumulated

 

 

other

 

 

 

 

 

Common stock

 

 

paid in

 

 

surplus/

 

 

comprehensive

 

 

Total

 

 

 

Number of shares

 

 

Amount

 

 

capital

 

 

(loss)

 

 

loss

 

 

Equity

 

Balance as of December 31, 2021

 

 

171,218,152

 

 

$10,779,574

 

 

$(5,011,891)

 

$1,512,358

 

 

$(100,262)

 

$7,179,779

 

Net profit for the period

 

 

-

 

 

 

-

 

 

 

-

 

 

 

17,066

 

 

 

-

 

 

 

17,066

 

Foreign currency translation loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(68,776)

 

 

(68,776)

Balance as of March 31, 2022

 

 

171,218,152

 

 

$10,779,574

 

 

$(5,011,891)

 

$1,529,424

 

 

$(169,038)

 

$7,128,069

 

Net loss for the period

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(138,662)

 

 

-

 

 

 

(138,662)

Issuance of shares

 

 

2,500,000

 

 

 

150,000

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

150,000

 

Foreign currency translation loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(317,760)

 

 

(317,760)

Balance as of June 30, 2022

 

 

173,718,152

 

 

$10,929,574

 

 

$(5,011,891)

 

$1,390,762

 

 

$(486,798)

 

$6,821,647

 

Net loss for the period

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(77,401)

 

 

-

 

 

 

(77,401)

Foreign currency translation loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(320,592)

 

 

(320,592)

Balance as of September 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2022

 

 

173,718,152

 

 

$10,929,574

 

 

$(5,011,891)

 

$1,313,361

 

 

$(807,390)

 

$6,423,654

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

Additional

paid in

 

 

Accumulated

 

 

Accumulated

other

comprehensive

 

 

Total

 

 

 

Number of shares

 

 

Amount

 

 

capital

 

 

surplus

 

 

loss

 

 

Equity

 

Balance as of December 31, 2022

 

 

173,718,152

 

 

$10,929,574

 

 

$(5,011,891)

 

$1,156,392

 

 

$(409,062)

 

$6,665,013

 

Net loss for the period

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(69,066)

 

 

-

 

 

 

(69,066)

Foreign currency translation loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(39,039)

 

 

(39,039)

Balance as of March 31, 2023

 

 

173,718,152

 

 

$10,929,574

 

 

$(5,011,891)

 

$1,087,326

 

 

$(448,101)

 

$6,556,908

 

Net loss for the period

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(259,251)

 

 

-

 

 

 

(259,251)

Foreign currency translation loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(333,891)

 

 

(333,891)

Balance as of June 30, 2023

 

 

173,718,152

 

 

$10,929,574

 

 

$(5,011,891)

 

$828,075

 

 

$(781,992)

 

$5,963,766

 

 

See accompanying notes to the condensed consolidated financial statements. 

 

 
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BIONEXUS GENE LAB CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINESIX MONTHS ENDED SEPTEMBERJUNE 30, 20222023 AND 20212022

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

 

 

Nine months ended

September 30,

 

 

Six months ended

June 30,

 

 

2022

 

 

2021

 

 

2023

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

Net (loss)/profit

 

$(198,997)

 

$662,328

 

Net loss

 

$(328,317)

 

$(121,596)

 

 

 

 

 

 

 

 

 

 

Adjustments to reconcile net (loss)/profit to net cash (used in)/generated from operating activities:

 

 

 

 

 

Adjustments to reconcile net loss to net cash used in from operating activities:

 

 

 

 

 

Amortization of right of use asset

 

12,754

 

13,211

 

 

7,891

 

8,586

 

Allowances for expected credit losses

 

 291,940

 

 -

 

Bad debts

 

 4,078

 

 -

 

Depreciation of property, plant and equipment

 

66,608

 

68,488

 

 

41,587

 

44,943

 

Dividend income

 

(34,523)

 

(13,477)

 

(19,788)

 

(19,322)

Fair value loss on other investments

 

128,683

 

19,952

 

Loss on disposal of other investments

 

 

1,798

 

 

 

-

 

Operating (loss)/profit before working capital changes

 

(23,677)

 

750,502

 

Fair value (gain)/loss on other investments

 

(140,862)

 

63,202

 

Interest

 

 4,212

 

 3,785

 

Property, plant and equipment written off

 

 

18

 

 

 

-

 

Operating loss before working capital changes

 

(139,241)

 

(20,402)

 

 

 

 

 

 

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

Inventories

 

425,972

 

(311,509)

 

(187,966)

 

9,717

 

Trade and other receivables

 

638,401

 

(198,553)

 

354,290

 

526,165

 

Deferred cost of revenue

 

67,606

 

-

 

 

-

 

67,606

 

Trade and other payables

 

(769,436)

 

(787,451)

 

(111,108)

 

(635,694)

Advance payment from customer

 

(21,810)

 

-

 

 

(16,029)

 

(30,307)

Deferred revenue

 

(77,276)

 

-

 

 

-

 

(77,276)

Operating lease liabilities

 

(17,009)

 

(15,836)

 

(11,019)

 

(11,182)

Tax recoverable

 

 

(153,209)

 

 

89,001

 

 

 

(29,268)

 

 

(62,435)

Net cash generated from/(used in) operating activities

 

 

69,562

 

 

 

(473,846)

Net cash used in operating activities

 

 

(140,341)

 

 

(233,808)

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

Acquisition of other investment

 

(397,974)

 

(432,293)

 

(13,444)

 

(404,793)

Dividend income

 

34,523

 

13,477

 

 

19,788

 

19,322

 

Purchase of plant and equipment

 

(37,144)

 

(1,883)

 

 

(14,458)

 

 

(33,484)

Proceeds from disposal of other investments

 

 

-

 

 

 

6,414

 

Net cash used in investing activities

 

 

(400,595)

 

 

(414,285)

 

 

(8,114)

 

 

(418,955)

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

Interest

 

 (4,212

 

 (3,785

Repayment of finance lease

 

(34,038)

 

(21,343)

 

 -

 

 (34038

Repayments from Directors

 

-

 

(1,920)

Shares subscriptions

 

 

150,000

 

 

 

-

 

 

 

 -

 

 

 

 150,000

 

Net cash generated from/(used in) financing activities

 

 

115,962

 

 

 

(23,263)

 

 

 

 

 

Net cash (used in)/generated from financing activities

 

 (4,212

 

 112,177

 

Foreign currency translation adjustment

 

(446,579)

 

(175,902)

 

 

(207,517)

 

 

(243,002)

NET CHANGE IN CASH AND CASH EQUIVALENTS

 

(661,650)

 

(1,087,296)

 

(360,184)

 

(783,588)

CASH AND CASH EQUIVALENTS, BEGINNING OF FINANCIAL YEAR

 

 

2,123,919

 

 

 

2,787,692

 

 

 

2,118,864

 

 

 

2,123,919

 

 

 

 

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS, END OF FINANCIAL YEAR

 

$1,462,269

 

 

$1,700,396

 

 

$1,758,680

 

 

$1,340,331

 

 

 

 

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS INFORMATION:

 

 

 

 

 

 

 

 

 

 

Fixed deposits placed with financial institutions

 

$984,088

 

$1,027,466

 

 

$1,461,596

 

$849,744

 

Cash at bank

 

 

478,181

 

 

 

672,930

 

 

 

297,084

 

 

 

490,587

 

Cash and cash equivalents, end of financial year

 

 

1,462,269

 

 

 

1,700,396

 

 

 

1,758,680

 

 

 

1,340,331

 

 

 

 

 

 

 

 

 

 

 

Supplementary cash flow information:

 

 

 

 

 

 

 

 

 

 

Interest paid

 

$(7,717)

 

$(8,987)

 

$(5,487)

 

$(5,645)

Income taxes paid

 

 

(123,599)

 

 

(94,373)

 

 

(30,635)

 

 

(73,547)

 

See accompanying notes to the condensed consolidated financial statements.

 

 
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BIONEXUS GENE LAB CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINESIX MONTHS ENDED SEPTEMBERJUNE 30, 2023 AND 2022

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

  

NOTE 1 - BASIS OF PREPARATION

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial reporting and the rules and regulations of the Securities and Exchange Commission that permit reduced disclosure for interim periods. Therefore, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted.

In the opinion of management, the consolidated balance sheet as of September 30, 2022 which has been derived from unaudited financial statements and these unaudited condensed consolidated financial statements reflect all normal and recurring adjustments considered necessary to state fairly the results for the periods presented. The results for the nine months ended September 30, 2022 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2022 or for any future period.

These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Management’s Discussion and the audited financial statements and notes thereto included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

NOTE 2 - ORGANIZATION AND BUSINESS BACKGROUND

 

BioNexus Gene Lab Corp. (the “Company”) was incorporated in the State of Wyoming on May 12, 2017. On August 23, 2017, the Company acquired all the outstanding capital stock of Bionexus GeneBGS Lab Sdn. Bhd., a Malaysian corporation (“Subsidiary”BioNexus Malaysia”). The SubsidiaryBioNexus Malaysia was incorporated in Malaysia on April 7, 2015 which it then subsequently changed its name to Bionexus Gene Lab Sdn. Bhd.

On December 31, 2020, the Company consummated a Share Exchange Agreement with Chemrex Corporation Sdn. Bhd. (“Chemrex”) and the Chemrex shareholders pursuant to which 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 Company issued to the Chemrex shareholders.

The acquisition of Chemrex has been accounted for as a common control transaction as there is no change in the control over the assets acquired and liabilities assumed. The net assets are derecognized by the transferring entity i.e., Chemrex and recognized by the receiving entity i.e., the Company. The difference between the consideration transferred and the carrying amounts of the net assets is recognized in equity.

 

The principal office address is Unit 02 Level 10, Tower B, Vertical Business Suite, No. 8 Jalan Kerinchi, Bangsar South, 59200 Kuala Lumpur, Malaysia, our lab is located at Lab 353, Chemical Science Centre, University Science Malaysia, George Town, Penang, Malaysia. We also have another lab providing Covid-19 and Colon Cancer screeninga blood collection center located at 4th1st floor, Lifecare Medical Centre, Kuala Lumpur, Malaysia. Chemrex office and supply hub is located at 4 Jalan CJ 1/6 Kawasan Perusahaan Cheras Jaya, Selangor, Malaysia.

 

On December 31, 2020, the Company consummated its acquisition of Chemrex Corporation Sdn. Bhd. (“Chemrex”), pursuant to a Share Exchange Agreement by and among the Company, Chemrex and the Chemrex shareholders wherein the Company acquired all 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 Company.

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BIONEXUS GENE LAB CORP.The acquisition of Chemrex has been accounted for as a common control transaction as there is no change in the control over the assets acquired and liabilities assumed. The net assets are derecognized by the transferring entity (i.e. Chemrex) and recognized by the receiving entity (i.e. the Company). The difference between the consideration transferred and the carrying amounts of the net assets is recognized in equity.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022The financial statements of the receiving entity report the results of operations for the period in which the transfer occurs as though the transfer of net assets or exchange of equity interests had occurred at the beginning of the period. Results of operations for that period will thus comprise those of the previously separate entities combined from the beginning of the period to the date the transfer is completed and those of the combined operations from that date to the end of the period. The comparative financial statements were not adjusted retrospectively as Chemrex was not under common control during the comparative period.

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

The corporate structure as at SeptemberJune 30, 20222023 is depicted below:

 

 

 

 

BioNexus Gene Lab Corp.,

a Wyoming company

 

 

 

 

 

 

 

 

 

 

 

 

100% owned

 

 

100% owned

 

 

Bionexus Gene Lab

Sdn. Bhd., 

a Malaysian company

 

 

Chemrex Corporation

Sdn. Bhd., 

a Malaysian company

 

 

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BIONEXUS GENE LAB CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

NOTE 32 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

The accompanying unaudited condensed consolidated financial statements reflect the application of certain significant accounting policies as described in this note and elsewhere in the accompanying consolidated financial statements and notes.

 

·

Basis of presentation

 

The accompanying condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).

 

·

Basis of consolidation

 

The condensed consolidated financial statements include the accounts of Bionexus Gene Lab Corp. and its subsidiaries. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation.

 

·

Use of estimates

 

In preparing these condensed consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets and revenues and expenses during the periods reported. Actual results may differ from these estimates.

 

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Table of Contents

BIONEXUS GENE LAB CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

·

Cash and cash equivalents

 

Cash and cash equivalents represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of NineThree months or less as of the purchase date of such investments.

 

·

Trade receivables

 

Trade receivables are recorded at the invoiced amount and Chemrex do charge interest bearing at a rate of 6% per annum on a case to case basis for customers that exceeded credit term. The normal trade credit term is generally on 30 days to 90 days term..certain debtors with overdue outstanding. Management reviews the adequacy of the allowance for doubtful debtsimpairment on an ongoing basis, using historical collection trends and aging of receivables. Management also periodically evaluates individual customer’s financial condition, credit history, and the current economic conditions to make adjustmentsadjust in the allowance when it is considered necessary. Trade balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

 

·

Inventories

 

Inventories consisting of products available for sell are stated at athe lower of cost or market value. Cost of inventory is determined using the first-in, first-out (FIFO) method. Inventory reserve is recorded to write down the cost of inventory to the estimated market value due to slow-moving merchandise and damaged goods, which is dependent upon factors such as historical and forecasted consumer demand, and promotional environment. The Company takes ownership, risks, and rewards of the products purchased. Write downs are recorded in cost of revenues in the Statement of Operations and Comprehensive IncomeIncome.

 

·

Leases

In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, Leases, which was subsequently amended in 2018 by ASU 2018-10, ASU 2018-11 and ASU 2018-20 (collectively, Topic 842). Topic 842 will require the recognition of a right-of-use asset and a corresponding lease liability, initially measured at the present value of the lease payments, for all leases with terms longer than 12 months. For operating leases, the asset and liability will be expensed over the lease term on a straight-line basis, with all cash flows included in the operating section of the statement of cash flows. For finance leases, interest on the lease liability will be recognized separately from the amortization of the right-of-use asset in the statement of comprehensive income and the repayment of the principal portion of the lease liability will be classified as a financing activity while the interest component will be included in the operating section of the statement of cash flows. Topic 842 is effective for annual and interim reporting periods beginning after December 15, 2018. Early adoption is permitted. Upon adoption, leases will be recognized and measured at the beginning of the earliest period presented using a modified retrospective approach. Topic 842 allows for a cumulative-effect adjustment in the period the new lease standard is adopted and will not require restatement of prior periods.

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Table of Contents

BIONEXUS GENE LAB CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

 

Prior to January 1, 2019, the Company accounted for leases under ASC 840, Accounting for Leases. Effective January 1, 2019, the Company adopted the guidance of ASC 842, Leases, which requires an entity to recognize a right-of-use asset and a lease liability for virtually all leases. The Company adopted ASC 842 using a modified retrospective approach. As a result, the comparative financial information has not been updated and the required disclosures prior to the date of adoption have not been updated and continue to be reported under the accounting standards in effect for those periods.

 

9

Table of Contents

BIONEXUS GENE LAB CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

·

Property, plant and equipment

 

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on thea straight-line basis to write off the cost over the following expected useful lives of the assets concerned.

 

The principal annual rates used are as follows:

 

Categories

 

Principal

Annual

 Rates

 

Air conditioner

 

 

20%

Buildings

 

 

2%

Computer and software

 

 

33%

Equipment

 

 

20%

Furniture and fittings

 

10% to 20

%

Lab Equipment

 

 

10%

Motor vehicle

 

10% to 20

%

Office equipment

 

 

20%

Renovation

 

10% to 20

%

Signboard

 

 

10%

 

Leasehold lands are depreciated over the period of the lease term. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Company will obtain ownership by the end of the lease term. Freehold land is not depreciated. Property, plant and equipment under construction are not depreciated until the assets are ready for their intended use

 

Maintenance and repairs are charged to operations as incurred. Expenditures which substantially increase the useful lives of the related assets are capitalized. When properties are disposed, off, the related costs and accumulated depreciation are removed from the accounts and any gain or loss is reported in the period the transaction takes place.

 

Fully depreciated plant and equipment are retained in the financial statements until they are no longer in use.

 

 
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BIONEXUS GENE LAB CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINESIX MONTHS ENDED SEPTEMBERJUNE 30, 2023 AND 2022

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

 

·

Impairment of long-lived assets

 

Long-lived assets primarily include goodwill, intangible assets and property, plant and equipment. In accordance with the provision of ASC Topic 360, “Impairment or Disposal of Long-Lived Assets”,Assets,” the Company generally conducts its annual impairment evaluation to its long-lived assets, usually in the fourth quarter of each fiscal year, or more frequently if indicators of impairment exist, such as a significant, sustained change in the business climate. The recoverability of long-lived assets is measured at the lowest level group. If the total of the expected undiscounted future net cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and carrying amount of the asset. There has been no impairment charge for the years presented.

 

·

Revenue recognition

 

Revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services.

 

The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:

Revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services.

 

The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:

 

·

identify the contract with a customer;

·

identify the performance obligations in the contract;

·

determine the transaction price;

·

allocate the transaction price to performance obligations in the contract; and

·

recognize revenue as the performance obligation is satisfied.

 

The Company records revenue at point in time which is recognized upon goods delivered or services rendered. 

 

·

Cost of revenuesShipping and handling fees

 

Cost of revenue includes the purchase cost of retail goods for re-saleShipping and handling fees, if billed to customers, are included in revenue. Shipping and packing materials (suchhandling fees associated with inbound and outbound freight are expensed as boxes). It excludes purchasingincurred and receiving costs, inspection costs, warehousing costs, internal transfer costsincluded in selling and other costs of distribution network in cost of revenues.expenses.

 

 
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BIONEXUS GENE LAB CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINESIX MONTHS ENDED SEPTEMBERJUNE 30, 2023 AND 2022

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

 

·

Comprehensive income

 

ASC Topic 220, “Comprehensive Income” establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive income, as presented in the accompanying statements of stockholders’ equity consists of changes in unrealized gains and losses on foreign currency translation and cumulative net change in the fair value of available-for-sale investments held at the balance sheet date. This comprehensive income is not included in the computation of income tax expense or benefit.

 

·

Income taxes

 

Income taxes are determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC Topic 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

 

ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclosed in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.

 

The Company conducts major businesses in Malaysia and is subject to tax in their own jurisdictions. As a result of its business activities, the Company will file separate tax returns that are subject to examination by the foreign tax authorities.

 

·

Net earnings or loss per share

 

The Company calculates net earnings or loss per share in accordance with ASC Topic 260 “Earnings per share”share.”. Basic earnings or loss per share is computed by dividing the net earnings or loss by the weighted average number of common shares outstanding during the period. Diluted earnings or loss per share is computed similar to basic earnings or loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.

 

 
1412

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BIONEXUS GENE LAB CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINESIX MONTHS ENDED SEPTEMBERJUNE 30, 2023 AND 2022

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

 

·

Foreign currencies translation

 

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statement of operations.

 

The functional currency of the Company is the United States Dollars (“US$”) and the accompanying financial statements have been expressed in US$. In addition, the subsidiaries maintain itstheir books and recordrecords in a local currency, Malaysian Ringgit (“MYR” or “RM”), which is functional currency as being the primary currency of the economic environment in which the subsidiaries operate.

 

In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”Statement,”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from the translation of financial statements of foreign subsidiarysubsidiaries are recorded as a separate component of accumulated other comprehensive income.

 

Translation of amounts from MYR into US$1.00 has been made at the following exchange rates for the respective period and year:

 

 

 

September 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

Period ended September 30, 2022 /Year-ended December 31, 2021 US$1: MYR exchange rate

 

 

4.6340

 

 

 

4.1650

 

 

 

 

 

 

 

 

 

 

 

 

January 1, 2022 to September 30,

2022

 

 

January 1, 2021 to September 30,

2021

 

9 months average US$1: MYR exchange rate

 

 

4.3442

 

 

 

4.1315

 

 

 

June 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Period ended June 30, 2023 /Year-ended December 31, 2022 US$1: MYR exchange rate

 

 

4.6650

 

 

 

4.3900

 

 

 

 

 

 

 

 

 

 

 

 

January 1, 2023 

to June 30,

2023

 

 

January 1, 2022

to June 30,

2022

 

6 months average US$1: MYR exchange rate

 

 

4.4629

 

 

 

4.2710

 

 

·

Related parties

 

Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence.

 

 
1513

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BIONEXUS GENE LAB CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINESIX MONTHS ENDED SEPTEMBERJUNE 30, 2023 AND 2022

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

 

·

Fair value of financial instruments

 

The carrying value of the Company’s financial instruments: cash and cash equivalents, trade receivable, deposits and other receivables, amount due to related parties and other payables approximate at their fair values because of the short-term nature of these financial instruments.

 

The Company also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a six-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:

 

·

Level 1 : Observable inputs such as quoted prices in active markets;

 

 

·

Level 2 : Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

 

·

Level 3 : Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions

 

As of SeptemberJune 30, 2022,2023, and December 31, 2021,2022, the Company did not have any nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements, at least annually, on a recurring basis, nor did the Company have any assets or liabilities measured at fair value on a non-recurring basis.

 

·

Recent accounting pronouncements

 

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and doesdo not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.

 

Recently Adopted Accounting Standards

In June 2016, the FASB issued Accounting Standards Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which introduced the expected credit losses methodology for the measurement of credit losses on financial assets measured at amortized cost basis, replacing the previous incurred loss methodology. In November 2019, the FASB issued ASU 2019-10 highlighted the adoption timeline. For smaller reporting entities, Topic 326 is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years, of which is effective for the Company on January 1, 2023

Credit loss rate is determined by historical collection based on aging schedule, adjusted for current conditions using reasonable and supportable forecasts. Based on the aging categorization and the adjusted loss rate per category, an allowance for credit losses is calculated by multiplying the adjusted loss rate with the amortized cost in the respective age category.

NOTE 43 - TRADE RECEIVABLES

 

The Company has performed an analysis on all its trade receivables and determined that all amounts are collectible by the Company.receivables. As such, trade receivables are reflected as a current assetrecognized and nocarried at the original invoice amount less an allowance for any uncollectible amounts. An estimate for doubtful debts has been recordedand expected credit losses is made when collection of the full amount is no longer probable. Bad debts are written off as of Septemberidentified for the quarter ended June 30, 2022 and December, 31, 2021.2023. The Company’s trade receivables consist of receivable from customers which are unrelated to the Company. The account receivables are interest bearing at a rate of 6% per annum on a case to case basis for customers that exceeded credit term. The normal trade credit term is generally on 30 days to 90 days term.

 

 

 

As of

 

 

 

June 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

 

 

 

 

 

 

 

Trade receivables

 

 

2,487,755

 

 

 

2,868,364

 

Allowances for expected credit losses

 

 

(291,940)

 

 

-

 

 

 

$2,195,815

 

 

$2,868,364

 

 
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BIONEXUS GENE LAB CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINESIX MONTHS ENDED SEPTEMBERJUNE 30, 2023 AND 2022

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

NOTE 54 - INCOME TAXES

 

The Company provides for income taxes under ASC 740, “Income Taxes. ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statements and tax basis of assets and liabilities and the tax rates in effect when these differences are expected to reverse. It also requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

 

Provision for income taxes consisted of the following:

 

United States of America

The Company is registered in the State of Wyoming and is subject to the tax laws of the United States of America.

 

Bionexus Gene Lab Sdn. Bhd.Malaysia

BioNexus Malaysia and Chemrex Corporation Sdn. Bhd. are both subject to Malaysia Corporate Tax, which is charged at the statutory income tax rate range isof 24% on its assessable income. Under the amendment of Income Tax Act 1967 by the Finance Act 2019 and with effect from year of assessment 2021, companies with paid-up capital of MYR2.5 million or less, and with annual business income of not more than RM50 million are subject to Small and Medium Enterprise Corporate Tax at 17% on chargeable income up to MYR600,000 except for companies with investment holding nature or companies does not have gross income from business sources are subject to corporate tax at 24% on chargeable income.

 

 

As of

 

 

As of

 

 

September 30,

 

December 31,

 

 

June 30,

 

December 31,

 

 

2022

 

 

2021

 

 

2023

 

 

2022

 

Tax Recoverable

 

 

 

 

 

 

 

 

 

 

Local

 

$-

 

$-

 

 

$-

 

$-

 

Foreign, representing Malaysia

 

 

(52,749)

 

 

-

 

 

 

(59,000)

 

 

(31,551)

Tax Recoverable

 

 

(52,749)

 

 

-

 

 

 

(59,000)

 

 

(31,551)

 

 

 

 

 

 

 

 

 

 

Income tax liabilities:

 

 

 

 

 

 

 

 

 

 

Local

 

$-

 

$-

 

 

$-

 

$-

 

Foreign, representing Malaysia

 

 

-

 

 

 

97,585

 

 

 

-

 

 

 

-

 

Income tax payables

 

 

-

 

 

 

97,585

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

Deferred tax liabilities:

 

 

 

 

 

 

 

 

 

 

Local

 

$-

 

$-

 

 

$-

 

$-

 

Foreign, representing Malaysia

 

 

25,541

 

 

 

28,416

 

 

 

29,047

 

 

 

30,866

 

Deferred tax liabilities

 

 

25,541

 

 

 

28,416

 

 

 

29,047

 

 

 

30,866

 

Total

 

 

(27,208)

 

 

126,001

 

 

 

(29,953)

 

 

(685)

 

 
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BIONEXUS GENE LAB CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINESIX MONTHS ENDED SEPTEMBERJUNE 30, 2023 AND 2022

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

NOTE 5 – OPERATING LEASE RIGHT OF USE ASSET AND LEASE LIABILITIES

Lease liabilities are measured at present value of the sum of remaining rental payment as of recognition with a discount rate of 6.40% per annum adopted from Malayan Banking (Maybank) Berhad's base rate as a reference for the discount rate, as this bank is the largest bank and national bank of Malaysia.

A single lease cost is recognized over the lease term on a generally straight-line basis. All cash payments of operating lease costs are classified within operating activities in the statement of cash flows.

Operating lease right of use assets as follows:

 

As of

 

 

 

June 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Balance as of beginning of the year

 

$55,730

 

 

$41,090

 

Add: Addition of lease liabilities

 

 

-

 

 

 

32,281

 

Less: Amortization

 

 

(7,549)

 

 

(15,534)

Foreign translation differences

 

 

(3,285)

 

 

(2,107)

Balance

 

$44,896

 

 

$55,730

 

Operating lease liabilities as follows:

 

 

 

 

June 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Balance as of beginning of the year

 

$56,775

 

 

$42,909

 

Add: Addition of lease liabilities

 

 

-

 

 

 

30,770

 

Less: gross repayment

 

 

(9,231)

 

 

(19,618)

Add: imputed interest

 

 

1,559

 

 

 

4,913

 

Foreign translation differences

 

 

(3,347)

 

 

(2,199)

Balance as of end of the year

 

 

45,756

 

 

 

56,775

 

Less: lease liability current portion

 

 

(16,098)

 

 

(16,569)

Lease liability non-current portion

 

$29,658

 

 

$40,206

 

The amortization of the right of use asset for the six months’ period ended June 30, 2023 and six months’ period ended June 30, 2022 were $7,891 and $8,586 respectively.

Other information:

 

As of

 

 

 

June 30,

2023

 

 

December 31,

2022

 

Cash paid for amounts included in the measurement of lease liabilities:

 

 

 

 

 

 

Operating cash flow from operating lease

 

$(11,019)

 

$(126,686)

Right of use assets obtained in exchange for operating lease liabilities

 

 

44,896

 

 

 

55,730

 

Remaining lease term for operating lease (years)

 

 

3.5

 

 

 

4

 

Weighted average discount rate for operating lease

 

$6.40%

 

$6.40%

Lease expenses for the six months’ period ended June 30, 2023 and the year ended December 31, 2022 were $1,559 and $4,913, respectively.

16

Table of Contents

BIONEXUS GENE LAB CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

 

NOTE 6 - LEASE RIGHT OF USE ASSETPROPERTY, PLANT AND LEASE LIABILITIESEQUIPMENT

 

Operating lease right of use as follow:

 

As of

 

 

 

September 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

Balance as of beginning of the year

 

$41,090

 

 

$62,529

 

Reduction due to discount on rental

 

 

-

 

 

 

(913)

Less: Amortization

 

 

(11,956)

 

 

(18,305)

Foreign translation differences

 

 

(4,159)

 

 

(2,221)

Balance

 

$24,975

 

 

$41,090

 

Property, plant and equipment consisted of the following: 

 

Operating lease liability as follow:

 

 

 

 

 

September 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

Balance as of beginning of the year

 

$

42,909

 

 

$

63,079

 

Add: Addition of lease liabilities

 

 

 -

 

 

 

(972

)

Less: gross repayment

 

 

(13,939

)

 

 

(16,856

)

Add: imputed interest

 

 

1,273

 

 

 

2,704

 

Foreign translation differences

 

 

(4,343

)

 

 

(5,046

)

Balance as of end of the year

 

 

25,900

 

 

 

42,909

 

Less: lease liability current portion

 

 

(11,782

)

 

 

(18,272

)

Lease liability non-current portion

 

$

14,118

 

 

$

24,637

 

 

 

As of

 

 

 

June 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Air conditioner

 

$1,124

 

 

$1,124

 

Computer and software

 

 

2,516

 

 

 

2,516

 

Equipment

 

 

59,801

 

 

 

60,525

 

Furniture and fittings

 

 

100,118

 

 

 

87,122

 

Lab equipment

 

 

320,102

 

 

 

320,102

 

Land and buildings

 

 

1,506,969

 

 

 

1,506,969

 

Motor vehicle

 

 

137,914

 

 

 

137,914

 

Office equipment

 

 

33,167

 

 

 

38,213

 

Renovation

 

 

98,597

 

 

 

107,414

 

Signboard

 

 

806

 

 

 

704

 

 

 

 

2,261,114

 

 

 

2,262,603

 

(Less): Accumulated depreciation

 

 

(615,975)

 

 

(590,317)

Add: Foreign translation differences

 

 

(248,518)

 

 

(160,578)

Property, plant and equipment, net

 

$1,396,621

 

 

$1,511,708

 

 

The amortization of the right of use assetDepreciation expense for the ninesix months’ period ended SeptemberJune 30, 2023 and 2022 were $41,587 and the year ended September 30, 2021 were $12,754 and $13,211$44,943 respectively.

 

Other information:

 

As of

 

 

 

September 30,

2022

 

 

December 31,

2021

 

Cash paid for amounts included in the measurement of lease liabilities:

 

 

 

 

 

 

Operating cash flow from operating lease

 

$17,009

 

 

$20,169

 

Right of use assets obtained in exchange for operating lease liabilities

 

 

24,975

 

 

 

41,090

 

Remaining lease term for operating lease (years)

 

 

1

 

 

 

2

 

Weighted average discount rate for operating lease

 

$5.40%

 

$5.40%

NOTE 7 - OTHER INVESTMENTS

 

 

 

As of

 

 

 

June 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

As of beginning of the year

 

$1,150,898

 

 

$749,027

 

Addition during the year

 

 

13,444

 

 

 

511,706

 

Disposal during the year

 

 

-

 

 

 

(1,776)

Fair value gain/(loss)

 

 

140,862

 

 

 

(70,628)

Foreign exchange translation

 

 

(74,530)

 

 

(37,431)

As of end of the year

 

$1,230,674

 

 

$1,150,898

 

Lease expenses for the nine months’ period ended September 30, 2022 and the year ended December 31, 2021 were $1,273 and $2,704, respectively.

The other investments consist of the following shares: 

 

 

As of

 

 

 

June 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Investment in quoted shares:

 

 

 

 

 

 

Malaysia

 

 

737,367

 

 

 

659,970

 

Singapore

 

 

85,488

 

 

 

101,426

 

Hong Kong

 

 

407,819

 

 

 

389,502

 

 

 

$1,230,674

 

 

$1,150,898

 

 

 
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BIONEXUS GENE LAB CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINESIX MONTHS ENDED SEPTEMBERJUNE 30, 2023 AND 2022

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

 

NOTE 7 - PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following: 

 

 

As of

 

 

 

September 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

Air conditioner

 

$1,124

 

 

$1,124

 

Computer and software

 

 

2,516

 

 

 

1,814

 

Equipment

 

 

43,869

 

 

 

43,010

 

Furniture and fittings

 

 

87,122

 

 

 

86,961

 

Lab equipment

 

 

319,810

 

 

 

284,822

 

Land and buildings

 

 

1,506,969

 

 

 

1,506,969

 

Motor vehicle

 

 

137,914

 

 

 

137,914

 

Office equipment

 

 

38,134

 

 

 

37,700

 

Renovation

 

 

107,414

 

 

 

107,414

 

Signboard

 

 

704

 

 

 

704

 

 

 

 

2,245,576

 

 

 

2,208,432

 

(Less): Accumulated depreciation

 

 

(592,239)

 

 

(525,631)

Add: Foreign translation differences

 

 

(213,034)

 

 

(48,383)

Property, plant and equipment, net

 

$1,440,303

 

 

$1,634,418

 

Depreciation expense for the nine months’ period ended September 30, 2022 and 2021 were $66,608 and $68,488 respectively.

NOTE 8 - OTHER INVESTMENTS

 

 

As of

 

 

 

September 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

As of beginning of the year

 

$749,027

 

 

$281,668

 

Addition during the year

 

 

397,974

 

 

 

515,840

 

Disposal during the year

 

 

(1,798)

 

 

(6,392)

Fair value loss

 

 

(128,683)

 

 

(29,850)

Foreign exchange translation

 

 

(92,537)

 

 

(12,239)

As of end of the year

 

$923,983

 

 

$749,027

 

19

Table of Contents

BIONEXUS GENE LAB CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

The other investments consist of the following shares:

 

 

As of

 

 

 

September 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

Investment in quoted shares:

 

 

 

 

 

 

Malaysia

 

 

627,169

 

 

 

590,788

 

Singapore

 

 

83,871

 

 

 

97,780

 

Hong Kong

 

 

212,943

 

 

 

58,584

 

 

 

$923,983

 

 

$747,152

 

Investment in unquoted shares:

 

 

 

 

 

 

 

 

Malaysia

 

 

-

 

 

 

1,875

 

 

 

$923,983

 

 

$749,027

 

NOTE 9 - TRADE PAYABLES

 

Trade payables are amounts billed to the Company by suppliers for goods and services in the ordinary course of business. All amounts have short-term repayment terms and vary by supplier.

 

NOTE 9 - CONCENTRATION OF RISKS

a) Major customers

During the three months and six months ended June 30, 2023 and 2022, the Company did not have any material recognizable major customers accounted for 10% or more of the Company’s revenue.

b) Major suppliers

For three months ended June 30, 2023 and 2022, the suppliers who accounted for 10% or more of the Company’s cost of sales and their balances at year ended are presented as follows:

 

 

2023

 

2022

 

2023

 

2022

 

2023

 

2022

 

 

Purchase

 

Percentage of purchases

 

Accounts payable trade

Vendor A

 

$

471,363

 

$

345,662

 

21.16%

 

 

15.56%

 

$

547,406

 

$

426,165

Vendor B

 

$

440,135

 

$

236,779

 

19.76%

 

 

10.66%

 

$

426,509

 

$

234,314

Vendor C

 

$

275,175

 

$

-

 

12.36%

 

 

-

 

$

-

 

$

-

Vendor D

 

$

254,165

 

$

253,960

 

11.41%

 

 

11.43%

 

$

195,856

 

$

251,316

Vendor E

 

$

244,265

 

$

424,781

 

10.97%

 

 

19.12%

 

$

256,315

 

$

214,213

 

 

$

1,685,103

 

$

1,261,182

 

75.66%

 

 

56.78%

 

$

1,426,086

 

$

1,126,008

For six months ended June 30, 2023 and 2022, the suppliers who accounted for 10% or more of the Company’s cost of sales and their balances at year ended are presented as follows:

 

 

2023

 

2022

 

2023

 

2022

 

2023

 

2022

 

 

Purchase

 

Percentage of purchases

 

Accounts payable trade

Vendor A

 

$

850,293

 

$

731,918

 

20.08%

 

 

14.96%

 

$

426,509

 

$

234,314

Vendor B

 

$

669,389

 

$

657,426

 

15.80%

 

 

13.43%

 

$

547,406

 

$

426,165

Vendor C

 

$

567,721

 

$

583,334

 

13.40%

 

 

11.92%

 

$

195,856

 

$

251,316

Vendor D

 

$

458,405

 

$

870,145

 

10.82%

 

 

17.78%

 

$

256,315

 

$

214,213

 

 

$

2,545,808

 

$

2,842,823

 

60.11%

 

 

58.09%

 

$

1,426,086

 

$

1,126,008

NOTE 10 - STOCK HOLDERS’ EQUITY

 

As at Septemberof June 30, 2023 and 2022, the Company issued and outstanding common stock isare 173,718,152 shares.shares, respectively.

 

NOTE 11 - SEGMENTED INFORMATION

 

At SeptemberJune 30, 2022,2023, the Company (“BGLC”) operates in the biochemical industry segment through its two Malaysian subsidiaries, BioNexus Malaysia and Chemrex.

 

 

 

 

BioNexus Gene Lab Corp.,

a Wyoming company

 

 

 

 

 

 

 

 

 

 

 

 

100% owned

 

 

100% owned

 

 

Bionexus Gene Lab

Sdn. Bhd.,

a Malaysian company

 

 

Chemrex Corporation

Sdn. Bhd.,

a Malaysian company

 

 

 
2018

Table of Contents

  

BIONEXUS GENE LAB CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINESIX MONTHS ENDED SEPTEMBERJUNE 30, 2023 AND 2022

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

 

At SeptemberJune 30, 2022,2023, the Company (“BGLC”) operates in the biochemical industry segment through its two Malaysian subsidiaries, BioNexus Malaysia and Chemrex.

 

For the quartersix months ended SeptemberJune 30, 2022,2023, segmented (unaudited) revenue and net profit/(loss) (Currency expressed in United States Dollars (“US$”) are as follows:

 

 

BioNexus

Malaysia

 

 

Chemrex

 

 

BGLC

 

 

Total

 

 

BioNexus

Malaysia

 

 

Chemrex

 

 

BGLC

 

 

Total

 

 

Nine months ended September 30, 2022

 

 

Six months ended June 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REVENUE

 

$39,409

 

$8,049,723

 

$-

 

$8,089,132

 

 

$11,932

 

$4,932,121

 

$-

 

$4,944,053

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COST OF REVENUE

 

 

(19,173)

 

 

(7,150,156)

 

 

-

 

 

 

(7,169,329)

 

 

(7,548)

 

 

(4,227,894)

 

 

-

 

 

 

(4,235,442)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GROSS (LOSS)/PROFIT

 

 

20,236

 

 

 

899,567

 

 

 

-

 

 

 

919,803

 

GROSS PROFIT

 

 

4,384

 

 

 

704,227

 

 

 

-

 

 

 

708,611

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME

 

6,617

 

146,720

 

3

 

153,340

 

 

2,165

 

310,343

 

-

 

312,508

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

(157,686)

 

(906,698)

 

(177,247)

 

(1,241,631)

 

 

(98,720)

 

 

(1,025,896)

 

 

(219,333)

 

 

(1,343,949)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS FROM OPERATIONS

 

 

(92,171)

 

 

(11,326)

 

 

(219,333)

 

 

(322,830)

 

 

 

 

 

 

 

 

 

FINANCE COSTS

 

 

(2,196)

 

 

(5,521)

 

 

-

 

 

 

(7,717)

 

(1,275)

 

(4,212)

 

-

 

 

(5,487)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(LOSS)/PROFIT BEFORE TAX

 

(133,029)

 

134,068

 

(177,244)

 

(176,205)

LOSS BEFORE TAX

 

(93,446)

 

(15,538)

 

(219,333)

 

(328,317)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax expense

 

 

-

 

 

 

(22,792)

 

 

-

 

 

 

(22,792)

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET (LOSS)/PROFIT

 

$(133,029)

 

$111,276

 

 

$(177,244)

 

$(198,997)

NET LOSS

 

$(93,446)

 

$(15,538)

 

$(219,333)

 

$(328,317)

 

 
2119

Table of Contents

  

BIONEXUS GENE LAB CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINESIX MONTHS ENDED SEPTEMBERJUNE 30, 2023 AND 2022

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

 

 

BioNexus

Malaysia

 

 

Chemrex

 

 

BGLC

 

 

Total

 

 

BioNexus

Malaysia

 

 

Chemrex

 

 

BGLC

 

 

Total

 

 

Nine months ended September 30, 2021

 

 

Six months ended June 30, 2022

 

REVENUE

 

$1,504,064

 

$8,613,232

 

$-

 

$10,117,296

 

 

$33,467

 

$5,480,579

 

$-

 

$5,514,046

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COST OF REVENUE

 

 

(1,057,314)

 

 

(7,270,208)

 

 

-

 

 

 

(8,327,522)

 

 

(14,929)

 

 

(4,878,813)

 

 

-

 

 

 

(4,893,742)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

 

446,750

 

 

 

1,343,024

 

 

 

-

 

 

 

1,789,774

 

 

 

18,538

 

 

 

601,766

 

 

 

-

 

 

 

620,304

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME

 

5,335

 

154,429

 

-

 

159,764

 

 

4,285

 

94,945

 

-

 

99,230

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

(115,758)

 

(843,620)

 

(135,396)

 

(1,094,774)

 

(94,681)

 

(618,348)

 

(109,778)

 

(822,807)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(LOSS)/PROFIT FROM OPERATIONS

 

 

(71,858)

 

 

78,363

 

 

 

(109,778)

 

 

(103,273)

 

 

 

 

 

 

 

 

 

FINANCE COSTS

 

 

(3,265)

 

 

(5,722)

 

 

-

 

 

 

(8,987)

 

(1,860)

 

(3,785)

 

-

 

(5,645)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PROFIT/(LOSS) BEFORE TAX

 

333,062

 

648,111

 

(135,396)

 

845,777

 

 

(73,718)

 

74,578

 

(109,778)

 

(108,918)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax expense

 

 

(38,068)

 

 

(145,381)

 

 

-

 

 

 

(183,449)

 

 

-

 

 

 

(12,678)

 

 

-

 

 

 

(12,678)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET PROFIT/(LOSS)

 

$294,994

 

 

$502,730

 

 

$(135,396)

 

$662,328

 

 

$(73,718)

 

$61,900

 

 

$(109,778)

 

$(121,596)

 

 

As of September 30, 2022 and December 31, 2021

 

 

As of June 30, 2023 and December 31, 2022

 

 

Total Assets

 

 Total Liabilities

 

 

Total Assets

 

 Total Liabilities

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BGLC & Bionexus

 

$870,929

 

$1,167,214

 

$64,914

 

$121,586

 

 

$323,500

 

$677,477

 

$81,439

 

$108,390

 

Chemrex

 

 

6,927,307

 

 

 

8,407,176

 

 

 

1,309,668

 

 

 

2,273,025

 

 

 

7,575,440

 

 

 

8,062,685

 

 

 

1,853,735

 

 

 

1,966,759

 

TOTAL

 

 

7,798,236

 

 

 

9,574,390

 

 

 

1,374,582

 

 

 

2,394,611

 

 

 

7,898,940

 

 

 

8,740,162

 

 

 

1,935,174

 

 

 

2,075,149

 

 

20

21

Table of Contents

  

BIONEXUS GENE LAB CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINESIX MONTHS ENDED SEPTEMBERJUNE 30, 2023 AND 2022

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

 

NOTE 12 - SUBSEQUENT EVENTS

 

In accordance with ASC Topic 855, “Subsequent Events”,Events,” which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred after SeptemberJune 30, 20222023 up through November 7, 2022August 16, 2023 of these consolidated financial statements.

 

NOTE 13 - CONCENTRATION OF RISKS(a) Initial Public Offering

 

a) Major customersOn July 20, 2023, the Company entered into an underwriting agreement (the "Underwriting Agreement") with Network 1 Financial Securities, Inc., as underwriter (the "Underwriter") pursuant to which the Company agreed to issue and sell, in a firm commitment underwritten public offering by the Company (the "Offering") of 1,250,000 shares of common stock, no par value, priced at a public offering price of $4.00 per share.

 

DuringIn addition, pursuant to the period,Underwriting Agreement, the Underwriter was granted a 45-day option (the "Over-Allotment Option") to purchase up to an additional 187,500 shares of common stock at the public offering price of $4.00 per share. The Underwriter fully exercised the Over-Allotment Option on July 24, 2023.

The securities were offered by the Company did not havepursuant to the registration statement on Form S-1 (File No. 333-269753), which was originally filed with the U.S. Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended, on February 14, 2023, and declared effective by the Commission on July 19, 2023.

On July 24, 2023, the Offering closed, and the Company issued and sold 1,437,500 shares of common stock, including 187,500 shares sold pursuant to the exercise of the Over-Allotment Option. The Offering was priced at $4.00 per share for total gross proceeds of $5.75 million before deducting underwriting discounts, commissions, and offering expenses. Pursuant to the Underwriting Agreement, the Underwriter received an 8% underwriting discount on the public offering price for the shares common stock. The Company will therefore receive net proceeds, before expenses, of $5,290,000 from the sale of the common stocks. In addition, the Company issued to the Underwriter warrants to purchase up to an aggregate of 115,000 shares of the Company's common stock (the "Underwriter's Warrants") at an exercise price of $4.40 per share. The Underwriter's Warrants are exercisable from July 24, 2023 until July 24, 2028.

(b) Reversal of stock split

On June 5, 2023, the Company filed an Article of Amendment to the Articles of Incorporation with the Wyoming Secretary of State to modify the ratio of the Reverse Stock Split from one-for-ten (10) to one-for-twelve (12) (the “Revised Reverse Stock Split”). Upon effectiveness of the Revised Reverse Stock Split, every twelve (12) outstanding shares of common stock will be combined into and automatically become one share of common stock. No fractional shares will be issued in connection with the Revised Reverse Stock Split and all such fractional shares or odd lots (less than 100 shares to any material recognizable major customers accounted for 10%record or morebeneficial holder) issuable in the Revised Reverse Stock Split will be rounded up to the nearest whole share, or rounded up to 100 shares, respectively.

The Revised Reverse Stock Split was approved and authorized by a majority of the Company’s revenue forstockholder on May 8, 2023 and by the financial period ended September 30, 2022 and 2021.Board of Directors of the Company on May 8, 2023.

 

b) Major suppliersOn July 19, 2023, the Financial Industry Regulatory Authority announced the Revised Reverse Stock Split.

 

DuringAs a result of the period,1:12 reverse stock split and the closing of the Offering, the Company did not have any material recognizable major suppliers accounted for 10% or morehas 17,698,549 shares of the Company’s costcommon stock issued and outstanding as of revenue for the financial period ended September 30, 2022 and 2021.August 14, 2023.

 

 
2221

Table of Contents

  

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

 

Description of Business

 

As used herein, unless the context otherwise indicates, references to the “Company,” “we,” “our,” “us,” “BioNexus” refer to BioNexus Gene Lab Corp., a Wyoming company (BGLC)(“BGLC”), and its wholly owned subsidiaries, Bionexus Gene Lab Sdn. Bhd. (“Bionexus Malaysia”), and Chemrex Corporation Sdn. Bhd. (“Chemrex”), both are Malaysian companies.

 

BGLC is an emerging molecular lab focused on the application of functional genomics to enable early detection of infectious diseases and cancers. On August 23, 2017, we acquired all of the outstanding capital stock of BioNexus Malaysia, which was incorporated in Malaysia on April 7, 2015. BioNexus Malaysia owns algorithm software, technology, and know-how related to the detection of common diseases through blood analysis which we use in our business. Our non-invasive blood screening tests analyze changes in ribonucleic acid (or RNA) to detect Covid-19,Coronavirus, Dengue, HIV, HPV and the risk potentiality of cancers diseases. This unique blood genomic biomarker approach is based on the scientific observation that circulating blood reflects, in a detectable way, what is occurring throughout the body currently.

 

The corporate and principal office address of the Company and BioNexus Malaysia is Unit 02, Level 10, Tower B, Avenue 3, The Vertical Business Suite II, Bangsar South, No. 8 Jalan Kerinchi, Kuala Lumpur, Malaysia., our lab is located at Lab 353, Chemical Science Centre, University Science Malaysia, George Town, Penang, Malaysia. Another lab focuses on Covid-19 and Colon cancer screening is located at 4th floor, Lifecare Diagnostic Centre, Kuala Lumpur, Malaysia. Our telephone number is (+60) 1221-26512 and our web-sitewebsite is www.bionexusgenelab.com.

 

Chemrex is a wholesaler of industrial chemicals for the manufacture of industrial, medical, appliance, aero, automotive, mechanical and electronic industries in Asean region. On December 31, 2020, we acquired all of the outstanding capital stock of Chemrex, which was incorporated in Malaysia on September 29, 2004.

 

Chemrex’s corporate office and distribution and storage center is located at 4 Jalan CJ 1/6 Kawasan Perusahaan Cheras Jaya, Selangor, Malaysia. Its phone number is (+60) 1922-23815 and website is www.chemrex.com.my.

 

 
2322

Table of Contents

  

The results of operations of our subsidiary, BioNexus-Malaysia, with respect to its RNA screening process have been adversely impacted by the onset of the Covid-19 pandemic which commenced in late December 2019followed by a number of prominent variants, including Alpha, Beta, Delta, and Omicron. Although new variants are an expected part of the evolution of viruses, new variant is more aggressive, highly transmissible, vaccine-resistant, able to cause more severe disease in Malaysia. We believe that most people have been and will continue to bewere reluctant to visit hospitals and clinics duringin view of the post Covid-19 pandemicOmicron and its subvariants for fear of transmission from other patients or medical staff. Since our RNA screening is administered at a diagnostic center, our business has been adversely affected as a result. Furthermore, on March 18, 2020, the Malaysian government first imposed its Movement Control Order (MCO) which lasted through June 9, 2020 to control the spread of COVID-19. The MCO restricted movement of all people except for those who were working for essential services. The MCOs were enhanced and relaxed at different phases in 2020 and 2021, including the Enhanced Movement Control Order (EMCO), Conditional Movement Control Order (CMCO) and Recovery Movement Control Order (RMCO). This Enhanced Movement Control Orders were implemented whenever there was a surge of Covid-19 cases. During these EMCOs, only companies classified under essential service were allowed to operate. This EMCO ended on July 16, 2021 and the government allowed more companies and factories to operate with strict Standard Operating Procedures. However, as discussed below, during fiscal 2021, BioNexus-Malaysia implemented the sale of its Covid19 qPCR test procedure through the Malaysian government. Our Covid testing generates substantially lower per ticket charges at $30-38 per test compared with $975 per customer for our RNA testing. Our Covid tests also generate lower margins than our RNA tests.

 

The results of operations for ChremrexChemrex were adversely impacted during fiscal year 2023 and the fiscal years1st quarter of 20202023 as businesses of Chemrex customers especially the manufacturers had suffered significant impact. Many of them across the country saw their supply chains interrupted, demand for their products and 2021 due to the MCO’sservices decline, shortages in supplies and Covid-19.inputs.

 

Recent Developments. As previously reported, we submitted

We had proposed an annual $28m screening project to the MalaysianChief Secretary of the Health Ministry of Malaysia for a nationwide RNA screening on 0.2% of the population aged 40 and above. The Deputy Director General from Public Health (HHS)met us on January 17, 2023 to examine the cost effectiveness of our Reverse Transcription Polymerase Chain Reaction (RT PCR) Covid-19 screeningRNA screening. While the Federal government is studying our proposal, the Sabah state government planned to allocate $2.5m to establish a lab in Kota Kinabalu, Sabah capital city for approval, which occurred in June 2020. On April 30, 2021, BioNexus entered into an AgreementBionexus-Malaysia to work with HHS to outsource our Covid19 qPCR test for its publiclocal hospitals and clinics within Malaysia. The usestate insurance corporation.  Meanwhile, we had presented our technology and expansion plan nationally and globally to the Minister of our testing protocol began on May 6, 2021.Science and Technology. We expect that our testing protocol would be continuedreceived favorable response, and were advised to be used bysubmit for a $2m technology grant for the HHS’ public hospitalscontinuation of research, commercialization and clinics through August 2021, when the pandemic curve is expected to flatten in 2022.expansion.

 

Translation of amounts from MYR into US$1.00 has been made at the following exchange rates for the respective period and year:

 

 

 

September 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

Period ended September 30, 2022 /Year-ended December 31, 2021 US$1: MYR exchange rate

 

 

4.6340

 

 

 

4.1650

 

 

 

 

 

 

 

 

 

 

 

 

January 1, 2022 to September 30,

2022

 

 

January 1, 2021 to September 30,

2021

 

9 months average US$1: MYR exchange rate

 

 

4.3442

 

 

 

4,1315

 

 

 

June 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Period ended June 30, 2023 /Year-ended December 31, 2022 US$1: MYR exchange rate

 

 

4.6650

 

 

 

4.3900

 

 

 

 

 

 

 

 

 

 

 

 

January 1, 2023 

to June 30,

2023

 

 

January 1, 2022 

to June 30,

2022

 

6 months average US$1: MYR exchange rate

 

 

4.4629

 

 

 

4,2710

 

 

 
2423

Table of Contents

  

Results of Operations

 

Three Months Ended SeptemberJune 30, 20222023 Compared with the Three Months Ended SeptemberJune 30, 2021.2022.

 

The following table sets forth key selected financial data for the three months ended SeptemberJune 30, 20222023 and 2021.2022.

 

BIONEXUS GENE LAB CORP.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

(Currency expressed in United States Dollars (“US$”))

(Unaudited)Consolidated

 

 

Three months ended

 

 

Three months ended

 

 

September 30,

 

 

June 30,

 

 

2022

 

 

2021

 

 

2023

 

 

2022

 

REVENUE

 

$2,575,086

 

$3,575,966

 

 

$2,566,848

 

$2,485,101

 

 

 

 

 

 

 

 

 

 

 

COST OF REVENUE

 

 

(2,275,587)

 

 

(2,866,772)

 

 

(2,227,134)

 

 

(2,221,130)

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

 

299,499

 

 

 

709,194

 

 

 

339,714

 

 

 

263,971

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME

 

54,110

 

46,848

 

 

195,164

 

52,848

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

(418,824)

 

 

(383,401)

 

 

(807,077)

 

 

(454,783)

 

 

 

 

 

 

 

 

 

 

(LOSS)/PROFIT FROM OPERATIONS

 

(65,215)

 

372,641

 

LOSS FROM OPERATIONS

 

(272,199)

 

(137,964)

 

 

 

 

 

 

 

 

 

 

FINANCE COSTS

 

 

(2,072)

 

 

(2,150)

 

 

(3,042)

 

 

(2,319)

 

 

 

 

 

 

 

 

 

 

(LOSS)/PROFIT BEFORE TAX

 

(67,287)

 

370,491

 

LOSS BEFORE TAX

 

(275,241)

 

(140,283)

 

 

 

 

 

 

 

 

 

 

Tax expense

 

 

(10,114)

 

 

(75,169)

 

 

15,990

 

 

 

1,621

 

 

 

 

 

 

 

 

 

 

 

NET (LOSS)/PROFIT

 

$(77,401)

 

$295,322

 

NET LOSS

 

$(259,251)

 

$(138,662)

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

Foreign currency loss

 

 

(320,592)

 

 

(56,940)

 

 

(333,891)

 

 

(317,760)

 

 

 

 

 

 

 

 

 

 

COMPREHENSIVE (LOSS)/ INCOME

 

$(397,993)

 

$238,382

 

COMPREHENSIVE LOSS

 

$(593,142)

 

$(456,422)

 

 
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Table of Contents

  

Segmented Information

 

 

BioNexus

Malaysia

 

 

Chemrex

 

 

BioNexus

Malaysia

 

 

Chemrex

 

 

BioNexus

Malaysia

 

 

Chemrex

 

 

BioNexus

Malaysia

 

 

Chemrex

 

 

Three months ended September 30, 2022

 

Three months ended September 30, 2021

 

 

Three months ended June 30, 2023

 

Three months ended June 30, 2022

 

REVENUE

 

$5,942

 

$2,569,144

 

$1,038,594

 

$2,537,372

 

 

$4,496

 

$2,562,352

 

$9,198

 

$2,475,903

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COST OF REVENUE

 

(4,244)

 

(2,271,343)

 

(729,194)

 

(2,137,578)

 

(2,201)

 

(2,224,933)

 

(6,891)

 

(2,214,239)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GROSS (LOSS)/PROFIT

 

 

1,698

 

 

 

297,801

 

 

 

309,400

 

 

 

399,794

 

GROSS PROFIT

 

 

2,295

 

 

 

337,419

 

 

 

2,307

 

 

 

261,664

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME

 

2,332

 

51,775

 

1,488

 

45,360

 

 

1,039

 

194,125

 

2,209

 

50,639

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

(63,005)

 

(288,350)

 

(41,222)

 

(287,002)

 

(52,465)

 

(642,719)

 

(50,639)

 

(320,579)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS FROM OPERATIONS

 

 

(49,131)

 

 

(111,175)

 

 

(46,123)

 

 

(8,276)

 

 

 

 

 

 

 

 

 

FINANCE COSTS

 

 

(336)

 

 

(1,736)

 

 

(962)

 

 

(1,188)

 

(609)

 

(2,433)

 

(1,061)

 

(1,258)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(LOSS)/PROFIT BEFORE TAX

 

(59,311)

 

59,490

 

268,704

 

156,964

 

LOSS BEFORE TAX

 

(49,740)

 

(113,608)

 

(47,184)

 

(9,534)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax expense

 

 

-

 

 

 

(10,114)

 

 

(37,414)

 

 

(37,755)

 

 

-

 

 

 

15,990

 

 

 

-

 

 

 

1,621

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET (LOSS)/PROFIT

 

$(59,311)

 

$49,376

 

 

$231,290

 

 

$119,209

 

NET LOSS

 

$(49,740)

 

$(97,618)

 

$(47,184)

 

$(7,913)

 

Revenue. For the quarterly periodquarter ended SeptemberJune 30, 2022,2023, we had total revenue of $2,575,086$2,566,848 as compared to total revenue of $3,575,966$2,485,101 for the same period in 2021, decreasedquarter ended June 30, 2022, increased by 28%3.3% from the prior period.quarter due to slight increase in purchases from customers.

 

Chemrex contributed $2,569,144$2,562,352 (99.8%) of the total revenue for the current quarterly periodquarter ended June 30, 2023 as compared to $2,537,372 (71%$2,475,903 (99.6%) of the total revenue for the same quarter last year.ended June 30, 2022. Chemrex’s revenues had increasedan increase by $31,772$86,449 of 3.5% from prior quarter of $2,537,372 a 1.3% increase.quarter. The revenue increased in three months 2022second quarter of 2023 was due to customer demanding has gone up.increase in purchases from customers.

 

BioNexus-Malaysia contributed $5,942$4,496 (0.2%) of the total revenue for the current quarter ended June 30, 2023 as compared to revenue of $1,038,594 (29%$9,198 (0.4%) of the total revenue from the same quarter last year.ended June 30, 2022. Revenues had decreased by $1,032,652$4,702 from prior quarter of $1,038,594,$9,198, a 99.4% decrease. A substantial51.1% decrease for the current period was due to Covid19 PCR test no longer require for air passengers traveling to several countries. By comparison,six (6) long weekends public holidays during last year three-month period, revenuethe second quarter resulting in fewer referrals from the outsource of Covid19 PCR test from MOH which began on May 2021. Currently this three months revenue for RNA test is lesser due to our resource focusing to complete the research/clinical test for cardiovascular diseases with INSTITUT JANTUNG NEGARA (IJM).diagnostics centers & clinics.

 

Cost of Revenue. For the quarterly periodquarter ended SeptemberJune 30, 2022,2023, we incurred $2,275,587$2,227,134 in cost of revenues, as compared to $2,866,772$2,221,130 for the same quarter in 2021,ended June 30, 2022, a decreaseslight increase of approximately 20.6%0.3% was due to reason as stated above.

 

Chemrex had incurred $2,271,343 (99.8%$2,224,933 (99.9%) of the total cost of revenue during the current quarter period ended June 30, 2023 as compared to the same period last yearquarter ended June 30, 2022 wherein Chemrex had incurred $2,137,578 (74.6%$2,214,239 (99.7%) of the total cost of revenue. The slightly increase in Chemrex’s cost of revenues by 6.3%of 0.5% for the current period was due to its increased revenues and reason as stated above.

 

BioNexus had incurred $4,244 (0.2%$2,201 (0.1%) of the total cost of revenues during the current quarter period ended June 30, 2023 as compared to $729,194 (25.4 %)$6,891 (0.3%) for the samequarterly period in 2021.ended June 30, 2022. Cost of revenue had decreased by $724,950$4,690 from prior quarter of $729,194 a 99.4%68.1% decrease was due to its decreased revenues and reason as stated above.

 

 
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Gross Profit. For the quarterly period ended SeptemberJune 30, 2022,2023, we had total gross profit of $299,499$339,714 as compared to gross profit of $709,194$263,971 for the samequarterly period in 2021, a decreaseended June 30, 2022, an increase by approximately 57.8%28.7% from the prior period.

 

Chemrex contributed $297,801 (99.4%$337,419 (99.3%) of the total gross profit for the current quarterly periodquarter ended June 30, 2023 as compared to $399,794 (56.4%$261,664 (99.1%) of the total gross profit for the same quarter last year.ended June 30, 2022. Chemrex’s gross profit decreasedincreased by $101,993$75,755 from the prior quarter, of $399,794,an approximately 25.5% decrease.29% increase. The gross profit decreaseincrease for Chemrex in current quarter was due to an increase of material costs, international shipping freight costs plus foreign exchange ratein revenue and reason as stated above.reduced purchases prices reduced.

 

BioNexus-Malaysia contributed $1,698 (0.6%$2,295 (0.7%) of the total gross profit of $299,499$339,714 for the current quarter ended June 30, 2023 as compared to gross profit of $309,400 (43.6%$2,307 (0.9%) of the total gross profit from the same quarter last year.ended June 30, 2022. The substantial decrease by approximately 99.5%0.5% from the prior period due to its decreased revenues for the same reason stated above.

 

Other Income. For the quarterly period ended SeptemberJune 30, 2022,2023, we had of $54,110,$195,164, as compared to of $46,848$52,848 for the same quarter in 2021,quarterly period ended June 30, 2022, an increase of approximately15.5%approximately 269.3%.

 

Chemrex contributed $51,775 (95.7%) of other income for the current quarterly period as compared to $45,360 (96.8%) of the other income for the same quarter last year. Chemrex’s other income increased by 14.1% due to dividends received from blue chip public companies listed on Malaysian Stock Exchange.

BioNexus-Malaysia contributed $2,332 (4.3%$194,125 (99.5%) of other income for the current quarter ended June 30, 2023 as compared to $1,488 (3.2%$50,639 (95.8%) of the other income for the same quarter last year. The increaseended June 30, 2022. Chemrex’s other income increased by $844, approximately 56.70%283.4% due to an increasedgain on forex exchange rate, gain on fair value of investment, bank interest earning and unrealized equity investment gain.

BioNexus-Malaysia contributed $1,039 (0.5%) of other income for the current quarter ended June 30, 2023 as compared to $2,209 (4.2%) of the other income for the quarter ended June 30, 2022. The decrease of 53% due to lesser fund in the fixed deposit resulted from a reduction in bank interest earning.

 

Operating ExpensesExpenses. .For the quarterly periodquarter ended SeptemberJune 30, 2022,2023, we had total operating expense of $418,824$807,077 as compared to total operating expenses of $383,401$454,783 for the same quarter in 2021,ended June 30, 2022, an increase by approximately 9.2%77.5%. It was due to general and administrative expenses which includes depreciation of fixed assets, employee compensation and benefits, professional fees for the Nasdaq uplisting and marketing and travel expenses.

 

Chemrex had incurred $288,350 (68.8%$642,719 (79.6%) of the total operating expenses for the current quarter ended June 30, 2023 as compared to $287,002 (74.9%$320,579 (70.5%) of the total operating expenses for the same quarter last year,ended June 30, 2022, an increase by 0.5%100.5%. The slight increase in operating expenses was due to insurances costdebt consultant, directors’ remuneration, entertainment, upkeep of equipment, marketing website improvement and lossprovision for losses on fair value of investment for current the period.accounts receivable.

 

BioNexus-Malaysia had incurred $63,005 (15%$52,465 (6.5%) of the total operating expenses for the current quarter ended June 30, 2023 as compared to $41,222 (10.8%$50,639 (11.1%) of the total operating expenses for the same quarter last year, anended June 30, 2022, a slight increase by approximately 52.8%3.6%. The increase in operating costs of the current quarter was due to extraResearch and development cost incurred for IJM Research/clinical test project including travelling expenses to USM Penang Lab and investment written off for company Genenews Diagnostic including debts.patients with cardiovascular disease.

 

BGLC, the holding company had incurred $67,469 (16.1%$111,893 (13.9%) of total operating expenses for the current quarter ended June 30, 2023 as compared to $55,177 (14.4%$83,565 (18.4%) of the total operating expenses for the same quarter last year.ended June 30, 2022. The increase of $12,292,by approximately 22.3%33.9% in operating costs offor the current quarter ended June 30, 2023 was due to directors and committees’ fees, professional expenses and charges from Advisor, Attorney, STC (Transfer Agent), Finra, Nasdaq and SEC on the expenses incurred consultant fees for a vice president overlooking North America matters, director fees for three independent directors had hired and additional fees for SEC compliance services.Company’s uplisting to Nasdaq.

 

Loss/Profit from Operations. We had a loss from operations of $65,215 quarterly period$272,199 for the quarter ended SeptemberJune 30, 20222023 as compared to a profitloss of $372,641$137,964 for the same period in 2021, a decreasequarter ended June 30, 2022, an increase by approximately 117.5%97.3% from the prior period, for the reasons discussed above.

 

Income tax expense. For the three-month periodquarter ended SeptemberJune 30, 2022,2023, we had estimatedadjustment of income tax expensescredit of $10,114 from Chemrex$15,990 as compared to $75,169tax credit of $1,621 for the same quarter last year which is $37,755 (50.2%)ended June 30, 2022 for ChemrexChemrex. There was no tax provision for Bio-Nexus Malaysia for the quarters ended June 30, 2023 and $37,414 (49.8%) for Bio-Nexus.2022.

 

Foreign currency exchange loss. We are exposed to fluctuations in foreign exchange rates on the revaluation of monetary assets and liabilities denominated in currencies other than the US Dollar. Therefore, any change in the relevant exchange rate would require us to recognize a transaction gain or loss on revaluation. For the three-month period ended SeptemberJune 30, 2022,2023, we experienced a foreign currency loss of $320,592$333,891 as compared with a foreign currency loss of $56,940$317,760 for the samethree-month period in 2021.ended June 30, 2022.

 

 
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Table of Contents

 

NineSix Months Ended SeptemberJune 30, 20222023 Compared with the NineSix Months Ended SeptemberJune 30, 2021.2022.

 

The following table sets forth key selected financial data for the ninesix months ended SeptemberJune 30, 20222023 and 2021.2022.

 

BIONEXUS GENE LAB CORP.Consolidated

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

 

Nine months ended

 

 

Six months ended

 

 

September 30,

 

 

June 30,

 

 

2022

 

 

2021

 

 

2023

 

 

2022

 

REVENUE

 

$8,089,132

 

$10,117,296

 

 

$4,944,053

 

$5,514,046

 

 

 

 

 

 

 

 

 

 

 

COST OF REVENUE

 

 

(7,169,329)

 

 

(8,327,522)

 

 

(4,235,442)

 

 

(4,893,742)

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

 

919,803

 

 

 

1,789,774

 

 

 

708,611

 

 

 

620,304

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME

 

153,340

 

159,764

 

 

312,508

 

99,230

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

(1,241,631)

 

 

(1,094,774)

 

 

(1,343,949)

 

 

(822,807)

 

 

 

 

 

 

 

 

 

 

(LOSS)/PROFIT FROM OPERATIONS

 

(168,488)

 

854,764

 

LOSS FROM OPERATIONS

 

(322,830)

 

(103,273)

 

 

 

 

 

 

 

 

 

 

FINANCE COSTS

 

 

(7,717)

 

 

(8,987)

 

 

(5,487)

 

 

(5,645)

 

 

 

 

 

 

 

 

 

 

(LOSS)/PROFIT BEFORE TAX

 

(176,205)

 

845,777

 

LOSS BEFORE TAX

 

(328,317)

 

(108,918)

 

 

 

 

 

 

 

 

 

 

Tax expense

 

 

(22,792)

 

 

(183,449)

 

 

-

 

 

 

(12,678)

 

 

 

 

 

 

 

 

 

 

NET (LOSS)/PROFIT

 

$(198,997)

 

$662,328

 

NET LOSS

 

$(328,317)

 

$(121,596)

 

 

 

 

 

 

 

 

 

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

Foreign currency loss

 

 

(707,128)

 

 

(272,876)

 

 

 

 

 

COMPREHENSIVE (LOSS)/ INCOME

 

$(906,125)

 

$389,452

 

Foreign currency translation loss

 

 

(372,930)

 

 

(386,536)

COMPREHENSIVE LOSS

 

$(701,247)

 

$(508,132)

 

 
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Segmented Information

 

 

BioNexus

Malaysia

 

 

Chemrex

 

 

BioNexus

Malaysia

 

 

Chemrex

 

 

BioNexus

Malaysia

 

 

Chemrex

 

 

BioNexus

Malaysia

 

 

Chemrex

 

 

Nine months ended

September 30, 2022

 

Nine months ended

September 30, 2021

 

 

Six months ended

June 30, 2023

 

Six months ended

June 30, 2022

 

REVENUE

 

$39,409

 

$8,049,723

 

$1,504,064

 

$8,613,232

 

 

$11,932

 

$4,932,121

 

$33,467

 

$5,480,579

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COST OF REVENUE

 

(19,173)

 

(7,150,156)

 

(1,057,314)

 

(7,270,208)

 

(7,548)

 

(4,227,894)

 

(14,929)

 

(4,878,813)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GROSS (LOSS)/PROFIT

 

 

20,236

 

 

 

899,567

 

 

 

446,750

 

 

 

1,343,024

 

GROSS PROFIT

 

 

4,384

 

 

 

704,227

 

 

 

18,538

 

 

 

601,766

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME

 

6,617

 

146,720

 

5,335

 

154,429

 

 

2,165

 

310,343

 

4,285

 

94,945

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

(157,686)

 

(906,698)

 

(115,758)

 

(843,620)

 

(98,720)

 

(1,025,896)

 

(94,681)

 

(618,348)

 

 

 

 

 

 

 

 

 

 

 

 

 

(LOSS)/PROFIT FROM OPERATIONS

 

(92,171)

 

(11,326)

 

(71,858)

 

78,363

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FINANCE COSTS

 

 

(2,196)

 

 

(5,521)

 

 

(3,265)

 

 

(5,722)

 

 

(1,275)

 

 

(4,212)

 

 

(1,860)

 

 

(3,785)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(LOSS)/PROFIT BEFORE TAX

 

(133,029)

 

134,068

 

333,062

 

648,111

 

 

(93,446)

 

(15,538)

 

(73,718)

 

74,578

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax expense

 

 

-

 

 

 

(22,792)

 

 

(38,068)

 

 

(145,381)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(12,678)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET (LOSS)/PROFIT

 

$(133,029)

 

$111,276

 

 

$294,994

 

 

$502,730

 

 

$(93,446)

 

$(15,538)

 

$(73,718)

 

$61,900

 

 

Revenue. For the ninesix months period ended SeptemberJune 30, 2022,2023, we had total revenue of $8,089,132$4,944,053 as compared to total revenue of $10,117,296$5,514,046 for the same period in 2021,2022, which had decreased by $2,028,164$569,993 from the prior period, approximately 20%10.3% decrease.

 

Chemrex contributed $8,049,723 (99.5%$4,932,121 (99.8%) of the total revenue for the current ninesix months period as compared to $8,613,232(85.1%$5,480,579 (99.4%) of the total revenue for the same period last year. Chemrex’s revenues had decreased by $563,509$548,458 from prior period, approximately 6.54%10.01% decrease. The revenue decreased in 20222023 was due to lower ofmaterial cost for Resin & Fiberglass mat has been reduced in Malaysia since January 2023. As a result, we adjusted the selling price for competitors.of our product to stay competitive. Chemrex is catching up with the markets change post pandemic by targeting the right manufacturers to reduce cost of logistics and warehousing meanwhile may scarify some small retail businesses. 

 

BioNexus-Malaysia contributed $39,409 (0.5%$11,932 (0.2%) of the total revenue for the current ninesix months period as compared to revenue of $1,504,064 (14.9%$33,467 (0.6%) of the total revenue from the same period last year. BioNexus’s revenue had decreased by $1,464,655$21,535 from prior quarter, an approximately 97.4%64.3% decrease. The revenue decreaseddecrease in 20222023 was due to RNA screening process having been adversely impacted by the outsource contractonset of the Covid-19 pandemic followed by a number of prominent variants, including Alpha, Beta, Delta, and Omicron. Although new variants are an expected part of the evolution of viruses, new variant is more aggressive, highly transmissible, vaccine-resistant, able to cause more severe disease in Malaysia. We believe that most people were reluctant to visit hospitals and clinics in view of the post Covid-19 Omicron and its subvariants for Covid19 PCR testfear of transmission from Ministry of Health (HHS) has ended since last year December 2021, currently, Covid19 PCR test and ART testother patients or medical staff. Since our RNA screening is administered at a diagnostic center, our business had reduced due to the discontinuation on movement control by Malaysia Government and air passengers traveling were not required to have Covid-19 test.been adversely affected as a result.

 

Cost of Revenue. For the ninesix months period ended SeptemberJune 30, 2022,2023, we incurred $7,169,329$4,235,442 in cost of revenues, as compared to $8,327,522$4,893,742 for the same period in 2021,2022, decreased by $1,158,193$658,300 approximately 13.9%13.5% decrease was due to the same reason stated above.

 

Chemrex had incurred $7,150,156 (99.7%$4,227,894 (99.8%) of the total cost of revenue during the current period as compared to the same period last year wherein Chemrex had incurred $7,270,208 (87.3%$4,878,813 (99.7%) of the total in cost of revenue, decreased by $120,052,$650,919, approximately 1.65%13.34% was due to the same reason stated above.

   

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Table of Contents

BioNexus had incurred $19,173 (0.3%$7,548 (0.2%) of the total cost of revenues during the current period as compared to $1,057,314 (12.7%$14,929 (0.3%) for the same period in 2022,2023, decreased by $1,038,141$7,381, approximately 98.2%49.4% in cost of revenues for the current period was due to the same reason stated above.

 

Gross Profit. For the ninesix months period ended SeptemberJune 30, 2022,2023, we had total gross profit of $919,803$708,611 as compared to gross profit of $1,789,774$620,304 for the same period in 2022, decreased2023, increased by $869,971, approximately 48.6%14.2% from the prior period.

 

Chemrex contributed $899,567 (97.8%$704,227 (99.4%) of the total gross profit for the current ninesix months period as compared to $1,343,024 (75%$601,766 (97.0%) of the total gross profit for the same period last year. The gross profit decreasedincreased by $443,457,$102,461, approximately 33%17.3% for current period was due to rising of material cost, increased international shipping freight costs and foreign exchange rate.higher revenue resulting higher gross profit.

28

Table of Contents

 

BioNexus-Malaysia contributed $20,236 (2.2%had a gross profit of $4,384 (0.6%) of the total gross profit of $919,803$708,611 for the current ninesix months period as compared to $446,750 (25%$18,538 (3%) of the total gross profit of $1,789,774$620,304 from the same period last year. The gross profit decreased by 95.5%76.4% was due to its decreased revenues for the current period as according to reason stated above. 

 

Other Income. For the ninesix months period ended SeptemberJune 30, 2022,2023, we had $153,340$312,508 as compared to $159,764$99,230 for the same period in 2021, decreased2022, increased by $6,424,$213,278 approximately 4%214.9%.

 

Chemrex contributed $146,720 (95.7%$310,343 (99.3%) of other income for the current ninesix months period as compared to $154,429 (96.7%$94,945 (95.7%) of the other income for the same period last year. Chemrex’s other income decreasedincreased by $7,709,$215,398, approximately 4.99%226.87% was due to lossesgenerated from bank interest and gain from fair value on unrealized forex and bank interest.investment.

 

BioNexus Malaysia had $6,617 (4.3%$2,165 (0.7%) for ninesix months period ended SeptemberJune 30, 20222023 as compared to $5,335 (3.3%$4,285 (4.3%) for the same period in 2021, increased2022, decreased by $1,282, approximately 24%49.5% was due to last year higherlower bank interest gatheredearning from the revenue generated by Covid-19 tests.lower fund deposited.

 

BGLC, had a gain on foreign exchange rate of $3 for the current nine months period.

Operating Expenses. For the ninesix months period ended SeptemberJune 30, 2022,2023, we had a total operating expense of $1,241,631$1,343,949 as compared to total operating expenses of $1,094,774$822,807 for the same period in 2021.2022. The increase of $146,857$521,142, approximately 13.4%63.3% was due to general and administrative expenses which includes depreciation of fixed assets, employee compensation and benefits, marketing/travel expenses, FINRA, SEC, Nasdaq and professional fees and marketing and travel expenses.for Nasdaq uplist.

 

Chemrex had incurred $906,698 (73%$1,025,896 (76.3%) of the total operating expenses for the current ninesix months period as compared to $843,620 (77.1%$618,348 (75.2%) of the total operating expenses for the same period last year, increased by $63,078,$407,548, approximately 7.48%65.91% due to the increased commission, payout, fair valuedirectors’ remuneration, medical expenses, loss on investmentunrealized/realized currency exchanges and lossprovision for losses on realized forex.account receivables.

 

BioNexus-Malaysia had incurred $157,686 (12.7%$98,720 (7.3%) of the total operating expenses for the current ninesix months period as compared to $115,758 (10.6%$94,681 (11.5%) of the total operating expenses for the same period last year. The slightly increase by approximately 4.3% in operating costs for the six months period was due to an increase of traveling expenses for marketing and staff remuneration increase.

BGLC, the holding company had incurred $219,333 (16.3%) of total operating expenses for the current six months period as compared to $109,778 (13.3%) of the total operating expenses for the same period last year. The increase of $41,928$109,555, approximately 36.2% in operating costs for the nine months period was due to increase of traveling expenses for marketing, increased of staff remuneration for hired new lab staffs, written off of investment and debtor of Genenews Diagnostic because company has been strike off and additional cost incurred for IJM Research/clinical test project.

BGLC, the holding company had incurred $177,247 (14.3%) of total operating expenses for the current nine months period as compared to $135,396 (12.4%) of the total operating expenses for the same period last year. The increase of $41,851, approximately 30.91%99.8% in operating costs of the current period was due to  the increased expenses in travelling,on filing fees for form S-1, consultant fees for capital & corporation advisory services, fees for three independent directorboard members and audit committee, SEC compliance services, SEC registration fee, 300+ shareholders’ notice printing and mailing expenses incurred on VC International club Membershipregarding stock reverse split by Securities Transfer Corporation, an additional review fee for an opportunity to capture equity investment from VC International networkS-1 and additional fee incurredlisting expenses for SEC Compliance services.Nasdaq uplist.

 

Loss/ProfitProfit/Loss from Operations. We had a loss from operations of $168,488$322,830 for ninesix months period ended SeptemberJune 30, 20222023 as compared to profitloss of $854,764$103,273 for the same period in 2021.2022. The decrease of $1,023,252,$219,557, approximately 119.7%212.6% was due to the reasons discussed above.

 

Income tax expense. For the nine-monthssix-months period ended SeptemberJune 30, 2022,2023, we had $22,792no income tax which is a tax estimatedprovided for Chemrex and for Bionexus no tax provided as compared to $183,449 for the same period last year2022 which was a tax estimated $145,381 (79.2%)$12,678 from Chemrex and $38,068 (20.8%)no tax provided from Bionexus.

 

Foreign currency exchange gain/(loss). We are exposed to fluctuations in foreign exchange rates on the revaluation of monetary assets and liabilities denominated in currencies other than the US Dollar. Therefore, any change in the relevant exchange rate would require us to recognize a transaction gain or loss on revaluation. For the nine-monthssix-months period ended SeptemberJune 30, 2022,2023, we experienced a foreign currency loss of $707,128$372,930 as compared with a foreign currency loss of $272,876$386,536 for the same period in 2021.2022.

 

 
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LIQUIDITY AND CAPITAL RESOURCES

 

As of SeptemberJune 30, 2022,2023, we had working capital of $4,074,052$3,350,280 compared with working capital of $4,821,100$4,017,749 as of December 31, 2021.2022. The decrease in working capital as of SeptemberJune 30, 20222023 from December 31, 20212022 was due principally to the decrease in cash used in our operations.

 

Our primary uses of cash havehad been for operations. The main sources of cash have beenwas generated from operational revenues and the private placement of our common stock. The following trends are reasonably likely tocould result in a material decrease in our liquidity over the near to long term:

 

 

·

Addition of administrative and marketing personnel as the business grows,

 

·

Development of a Company website,

 

·

Increases in advertising and marketing in order to attempt to generate more revenues, and

 

·

The cost of being a public company.

 

The Company believes that cash flow from operations together will be sufficient to sustain its current level of operations for at least the next 12 months of operations.

 

The following is a summary of the Company’s cash flows provided by (used in) / generated from operating, investing, and financing activities for the ninethree months ended SeptemberJune 30, 20222023 and 2021:2022: 

 

 

Nine months ended

 

 

Six months ended

 

 

September 30,

 

 

June 30,

 

 

2022

 

 

2021

 

 

2023

 

 

2023

 

Net cash generated from/(used in) Operating Activities

 

$69,562

 

$(473,846)

Net cash used in Operating Activities

 

$(140,341)

 

$(237,593)

Net cash used in investing activities

 

(400,595)

 

(414,285)

 

(8,114)

 

(418,955)

Net cash generated from/(used in) financing activities

 

115,962

 

(23,263)

 

(4,212

 

112,177

 

Foreign currency translation adjustment

 

 

(446,579)

 

 

(175,902)

 

 

(207,517)

 

 

(243,002)

Net Change in Cash and Cash Equivalents

 

$(661,650)

 

$(1,087,296)

 

$(360,184)

 

$(783,588)

 

Operating Activities 

 

During the ninesix months ended SeptemberJune 30, 2022,2023, the Company incurred a net loss of $198,997$328,317 which, after adjusting for amortization, depreciation, dividend income, fair value lossgain on share investment, provision for losses on accounts receivable, an increase in inventories, a decrease in inventoriestrade receivables and a substantial reduction in trade receivables, deposits, trade payables, operating lease liabilities, advance payment from customer, deferred revenue, operating lease liabilities, resulted in net cash of $69,562$40,341 being generated fromused in operating activities during the period. Bysix months ended June 30, 2023.By comparison, during the ninesix months ended SeptemberJune 30, 2021,2022, the Company had a net profitloss of $662,328$121,596 after adjusting for amortization, depreciation, dividend income, fair value loss on share investments an increaseand a decrease in inventories, trade receivables, and deposits,deferred cost of revenue, a substantial reduction in trade payables, operating lease liabilities, advance payment from customer, deferred revenue, resulted in net cash of $473,846$233,808 being used in operating activities during the period.

 

Investing Activities 

 

During the ninesix months ended SeptemberJune 30, 2022,2023, the Company had net cash of $400,595$8,114 used in investment activities from acquisition of share investment of $397,974$13,444 and purchase of plant & equipment of $34,523 During$14,458. By comparison during the ninesix months ended SeptemberJune 30, 2021,2022, the Company had net cash from acquisition of share investment of $432,293,$404,793 and purchase of plant and equipment and disposal of other investments,$33,484, resulting in net cash used in financinginvesting activities of $414,285$418,955. 

 

Financing Activities 

 

During the nine monthssix month ended SeptemberJune 30, 2022,2023, the Company had net cash of $115,962 generated from$4,212 used in financing activities for 2.5 million shares subscriptions of $150,000 and fully repayment of a finance lease of $34,038.activities. By comparison during the ninesix months ended SeptemberJune 30, 2021,2022, we had net cash of $23,263 used in$112,177 generated from financing activities for continued the repayment of a finance lease of $34,038 and repaymentshares subscriptions of director.$150,000.

  

Item 3. Certain Relationships and Related Transactions.

Keith Wong had on April 1, 2022 entered into a Consultancy Agreement with the Company for eighteen (18) months with a monthly fee of eight thousand dollars ($8,000).

Item 4. Quantitative and Qualitative Disclosures about Market Risk.

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.item.

  

 
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Item 5.4. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

In connection with the preparation of this quarterly report, an evaluation was carried out by the Company’s management, with the participation of the principal executive officer and the principal financial officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act (“Exchange Act”) as of SeptemberJune 30, 2022.2023. Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Commission’s rules and forms, and that such information is accumulated and communicated to management, including the principal executive officer and the principal financial officer, to allow timely decisions regarding required disclosures.

 

Based on that evaluation, the Company’s management concluded, as of the end of the period covered by this report, that the Company’s disclosure controls and procedures were capable in recording, processing, summarizing, and reporting information required to be disclosed, within the time periods specified in the Commission’s rules and forms, and that such information was accumulated and communicated to management, including the principal executive officer and the principal financial officer, to allow timely decisions regarding required disclosures.

 

Management’s Report on Internal Control over Financial Reporting

 

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process, under the supervision of the principal executive officer and the principal financial officer, designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with United States generally accepted accounting principles (GAAP). Internal control over financial reporting includes those policies and procedures that:

 

 

i)

Pertain to the maintenance of records that is in reasonable detail accurately and fairly reflect the transactions and dispositions of the Company’s assets;

 

 

 

ii)

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with the authorizations of management and the board of directors; and

 

 

 

iii)

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.

 

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

 

The Company’s management conducted an assessment ofhad assessed the effectiveness of our internal control over financial reporting as of SeptemberJune 30, 2022,2023, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, which assessment identified material weaknesses in internal control over financial reporting.reporting had improved. A material weakness is a control deficiency, or a combination of deficiencies in internal control over financial reporting that creates acould create reasonable possibility that a material misstatement in annual or interim financial statements will not be prevented or detected on a timely basis. Since the assessment of the effectiveness of our internal control over financial reporting did identify a material weakness,statements. The management considers its internal control over financial reporting required further improvement.

 

Management hashad concluded that ouran internal control over financial reporting had the material deficiencies. A majority of independent members and glad to note that a majority of outside directors on our Board of Directors is only happened in May 2022, meanwhile there is an inadequacywas made up of independent directors and the Audit Committee comprised of all independent directors since 2023, the adequacy in the monitoring of required internal controls and procedures.procedures were improving.

 

While these control deficiencies did not result in any audit adjustments to our 20222023 or 20212022 interim or annual financial statements, it could have resulted in a material misstatement that might have been prevented or detected by a segregation of duties. Accordingly, we have determined that this control deficiency constitutes a material weakness.

 

To the extent reasonably possible, given our limited resources, upon consummation of a merger with a private operating company, the Company has separated the responsibilities of principal executive officer and principal financial officer, andhad been relying on twothree or more individuals. We arewere expanding our current board of directors to include additional individualsindependents willing to perform directorial functions. Since the recited remedial actions and we willwould hire or engage additional personnel, this material weakness maywould be overcome in the near term. Until such remedial actions cancould be realized, we willwould continue to rely on the advice of outside professionals and consultants.

 

This quarterly report does not include an attestation report of our registered public accounting firm regarding our internal controls over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to Section 404(c) of the Sarbanes-Oxley Act that permit us to provide only management’s report in this annual report.

 

Changes in Internal Controls over Financial Reporting

 

During the period ended SeptemberJune 30, 2022,2023, there hashad been no change in internal control over financial reporting that hashad materially affected or iswas reasonably likely to materially affect our internal control over financial reporting.

 

 
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PART II OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

There are presently no pending legal proceedings to which the 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 has a material interest adverse to the Company, and no such proceedings are known to the Company to be threatened or contemplated against it.

 

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

(a) None. 

(b) None. 

(c) None.

Item 3. Defaults Upon Senior Securities.

 

None.

 

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

 

Not applicable to our Company.

 

Item 5. Other Information.

 

NoneNone.

 

 
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Item 6. Exhibits.

 

Exhibit

 

Description

 

 

 

31.1

 

Certification of the Company’s Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

 

 

 

31.2

 

Certification of the Company’s Principal Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

 

 

 

32.1

 

Certification of the Company’s Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002+

 

 

 

32.2

 

Certification of the Company’s Principal Accounting Officer and Principal Financial pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002+

 

 

 

101.INS

 

Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).*

 

 

 

101.SCH

 

Inline XBRL Taxonomy Extension Schema Document.*

 

 

 

101.CAL

 

Inline XBRL Taxonomy Extension Calculation Linkbase Document.*

 

 

 

101.DEF

 

Inline XBRL Taxonomy Extension Definition Linkbase Document.*

 

 

 

101.LAB

 

Inline XBRL Taxonomy Extension Labels Linkbase Document.*

 

 

 

101.PRE

 

Inline XBRL Taxonomy Extension Presentation Linkbase Document.*

 

 

 

104

 

Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

__________

+

In accordance with SEC Release 33-8238, Exhibit 32.1 and 32.2 are being furnished and not filed.

 

 

*

Filed herewith.

 

 
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SIGNATURES

 

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

 

BIONEXUS GENE LAB CORPORATION

 

 

 

/s/ Sook Keng Yeoh

 

Sook Keng Yeoh

 

Chief Executive Officer and Director

 

(Principal Executive Officer)

 

 

 

/s/ Wei Li Leong

 

Wei Li Leong

 

Chief Financial Officer

 

(Principal Financial and Accounting Officer)

 

 

 

November 14, 2022August 16, 2023

 

 
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