UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

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

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

 

For the quarterly period ended March 31,September 30, 2023 

 

OR

 

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

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

(Exact nameState or Other Jurisdiction of registrant as specified in its charter)

Incorporation or Organization)

(I.R.S. Employer

Identification No.)

 

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

Business Suite II Bangsar South No. 8 Jalan Kerinchi

Kuala Lumpur, Malaysia

 

35-260483059200

(State or Other JurisdictionAddress of

Incorporation or Organization) Principal Executive Offices)

 

(I.R.S. Employer

Identification No.)Zip Code)

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

Business Suite II Bangsar 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

Accelerated filer

Non-accelerated Filer

Smaller reporting company

Emerging growth 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 March 31,November 20, 2023, the aggregate market value of shares held by non-affiliates of the registrant was approximately $48,487,449.

As of the date of this filing, there were 173,718,15217,667,663 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

 

21

22

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

26

30

 

Item 4.

Controls and Procedures

 

27

31

 

 

 

 

 

 

PART II – OTHER INFORMATION

 

 

 

Item 1.

Legal Proceedings

 

28

32

 

Item 2.

Unregistered Sale of Equity Securities and Use of Proceeds

 

28

32

 

Item 3.

Defaults Upon Senior Securities

 

28

32

 

Item 4.

Mine Safety Disclosures

 

28

32

 

Item 5.

Other Information

 

28

32

 

Item 6.

Exhibits

 

29

33

 

SIGNATURES

 

30

34

 

 
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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 expenses, future revenues, capital requirementsthe market opportunity for our services;

the impact of government laws and our need for additional financing;regulations;

 

 

 

 

our estimates regarding the market opportunity for our services;

the impact of government lawsability to recruit and regulations;retain qualified personnel;

 

 

 

 

our abilityfailure to recruit and retain qualified personnel;comply with regulatory guidelines;

 

 

 

 

our failure to comply with regulatory guidelines;uncertainty in industry demand;

 

 

 

 

uncertaintygeneral economic conditions and market conditions in industry demand;the financial services industry;

 

 

 

 

general economic conditionsfuture sales of large blocks or our securities, which may adversely impact our share price; and market conditions in the financial services industry;

 

 

 

 

future salesdepth of large blocks orthe trading market in our securities, which may adversely impact our share price; andsecurities.

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, 2022 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.

 

 
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PART I – FINANCIAL INFORMATION

 

ITEM 1. Financial Statements

 

BIONEXUS GENE LAB CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF MARCH 31,SEPTEMBER 30, 2023 AND DECEMBER 31, 2022

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

 

 

 

 

 

As of

 

 

 

 

 

March 31,

 

 

December 31,

 

 

 

Note

 

 

2023

 

 

2022

 

 

 

 

 

(Unaudited)

 

 

(Audited)

 

ASSETS

 

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

 

 

Cash and bank balances

 

 

 

 

 

406,787

 

 

 

611,849

 

Fixed deposits placed with financial institutions

 

 

 

 

 

1,566,425

 

 

 

1,507,015

 

Trade receivables

 

 

3

 

 

 

2,528,746

 

 

 

2,868,364

 

Other receivables, deposits and prepayments

 

 

 

 

 

 

29,346

 

 

 

25,240

 

Tax recoverable

 

 

4

 

 

 

27,823

 

 

 

31,551

 

Inventories

 

 

 

 

 

 

899,636

 

 

 

977,807

 

Total current assets

 

 

 

 

 

 

5,458,763

 

 

 

6,021,826

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NON-CURRENT ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

Operating lease right of use assets

 

 

5

 

 

 

51,436

 

 

 

55,730

 

Property, plant and equipment, net

 

 

6

 

 

 

1,481,767

 

 

 

1,511,708

 

Other investments

 

 

7

 

 

 

1,194,675

 

 

 

1,150,898

 

Total non-current assets

 

 

 

 

 

 

2,727,878

 

 

 

2,718,336

 

TOTAL ASSETS

 

 

 

 

 

$8,186,641

 

 

$8,740,162

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

Trade payables

 

 

8

 

 

 

1,493,774

 

 

 

1,861,015

 

Other payables and accrued liabilities

 

 

 

 

 

 

37,550

 

 

 

103,370

 

Current portion of operating lease liabilities

 

 

5

 

 

 

16,733

 

 

 

16,569

 

Advance payment from customer

 

 

 

 

 

 

15,322

 

 

 

23,123

 

Total current liabilities

 

 

 

 

 

 

1,563,379

 

 

 

2,004,077

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NON-CURRENT LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

Non-current portion of operating lease liabilities

 

 

5

 

 

 

35,676

 

 

 

40,206

 

Deferred tax liabilities

 

 

4

 

 

 

30,678

 

 

 

30,866

 

Total non-current liabilities

 

 

 

 

 

 

66,354

 

 

 

71,072

 

TOTAL LIABILITIES

 

 

 

 

 

$1,629,733

 

 

$2,075,149

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

As at March 31, 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

 

 

 

10,779,574

 

Additional paid in capital

 

 

 

 

 

 

(5,011,891)

 

 

(5,011,891)

Accumulated surplus

 

 

 

 

 

 

1,087,326

 

 

 

1,156,392

 

Accumulated other comprehensive losses

 

 

 

 

 

 

(448,101)

 

 

(409,062)

TOTAL STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

6,556,908

 

 

 

6,665,013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

$8,186,641

 

 

$8,740,162

 

 

 

 

 

As of

 

 

 

 

 

September 30,

 

 

December 31,

 

 

 

Note

 

 

2023

 

 

2022

 

 

 

 

 

(Unaudited)

 

 

(Audited)

 

ASSETS

 

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

 

 

Cash and bank balances

 

 

 

 

 

4,704,785

 

 

 

611,849

 

Fixed deposits placed with financial institutions

 

 

 

 

 

1,442,098

 

 

 

1,507,015

 

Trade receivables

 

 

3

 

 

 

900,396

 

 

 

2,868,364

 

Other receivables, deposits and prepayments

 

 

 

 

 

 

110,793

 

 

 

25,240

 

Tax recoverable

 

 

4

 

 

 

3,838

 

 

 

31,551

 

Inventories

 

 

 

 

 

 

1,107,917

 

 

 

977,807

 

Total current assets

 

 

 

 

 

 

8,269,827

 

 

 

6,021,826

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NON-CURRENT ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

Operating lease right of use assets

 

 

5

 

 

 

147,916

 

 

 

55,730

 

Property, plant and equipment, net

 

 

6

 

 

 

1,496,562

 

 

 

1,511,708

 

Other investments

 

 

7

 

 

 

1,551,217

 

 

 

1,150,898

 

Total non-current assets

 

 

 

 

 

 

3,195,695

 

 

 

2,718,336

 

TOTAL ASSETS

 

 

 

 

 

$11,465,522

 

 

$8,740,162

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

Trade payables

 

 

8

 

 

 

1,569,992

 

 

 

1,861,015

 

Other payables and accrued liabilities

 

 

 

 

 

 

29,776

 

 

 

103,370

 

Current portion of operating lease liabilities

 

 

5

 

 

 

33,897

 

 

 

16,569

 

Advance payment from customer

 

 

 

 

 

 

8,218

 

 

 

23,123

 

Tax payables

 

 

 

 

 

 

2,177

 

 

 

-

 

Total current liabilities

 

 

 

 

 

 

1,644,060

 

 

 

2,004,077

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NON-CURRENT LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

Non-current portion of operating lease liabilities

 

 

5

 

 

 

104,867

 

 

 

40,206

 

Deferred tax liabilities

 

 

4

 

 

 

28,880

 

 

 

30,866

 

Total non-current liabilities

 

 

 

 

 

 

133,747

 

 

 

71,072

 

TOTAL LIABILITIES

 

 

 

 

 

$1,777,807

 

 

$2,075,149

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

As at September 30, 2023, common stock, no par value; 300,000,000 shares authorized and 17,792,663 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 14,476,628 shares outstanding, and preferred stock, no par value; 30,000,000 shares authorized and no shares outstanding (on a post-reverse stock split basis)*.

 

 

10

 

 

 

17,280,269

 

 

 

10,929,574

 

Additional paid in capital

 

 

 

 

 

 

(5,011,891)

 

 

(5,011,891)

Accumulated (losses)/surplus

 

 

 

 

 

 

(1,780,068)

 

 

1,156,392

 

Accumulated other comprehensive losses

 

 

 

 

 

 

(800,595)

 

 

(409,062)

TOTAL STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

9,687,715

 

 

 

6,665,013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

$11,465,522

 

 

$8,740,162

 

* Issued and outstanding shares of common stock have been adjusted for the periods prior to July 20, 2023, to reflect the 12-for-1 reverse stock split effected on that date on a retroactive basis as described in Note 10.

 

See accompanying notes to the condensed consolidated financial statements.

 

 
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BIONEXUS GENE LAB CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND NINE MONTHS ENDED MARCH 31,SEPTEMBER 30, 2023 AND 2022

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

(Unaudited)

 

 

 

Three months ended

 

 

 

March 31,

 

 

 

2023

 

 

2022

 

REVENUE

 

$2,377,205

 

 

$3,028,945

 

 

 

 

 

 

 

 

 

 

COST OF REVENUE

 

 

(2,008,308)

 

 

(2,672,612)

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

 

368,897

 

 

 

356,333

 

 

 

 

 

 

 

 

 

 

OTHER INCOME

 

 

117,344

 

 

 

46,394

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

General and administrative

 

 

(536,872)

 

 

(368,036)

 

 

 

 

 

 

 

 

 

(LOSS)/PROFIT FROM OPERATIONS

 

 

(50,631)

 

 

34,691

 

 

 

 

 

 

 

 

 

 

FINANCE COSTS

 

 

(2,445)

 

 

(3,326)

 

 

 

 

 

 

 

 

 

(LOSS)/PROFIT BEFORE TAX

 

 

(53,076)

 

 

31,365

 

 

 

 

 

 

 

 

 

 

Tax expense

 

 

(15,990)

 

 

(14,299)

 

 

 

 

 

 

 

 

 

NET (LOSS)/PROFIT

 

$(69,066)

 

$17,066

 

 

 

 

 

 

 

 

 

 

Other comprehensive income:

 

 

 

 

 

 

 

 

Foreign currency translation loss

 

 

(39,039)

 

 

(68,776)

COMPREHENSIVE LOSS

 

$(108,105)

 

$(51,710)

 

 

 

 

 

 

 

 

 

Earnings per share - Basic and diluted

 

 

(0.001)

 

 

0.000

 

Weighted average number of common shares outstanding – Basic and diluted

 

 

173,718,152

 

 

 

171,218,152

 

 

 

Three months ended

 

 

Nine months ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

REVENUE

 

$2,553,686

 

 

$2,575,086

 

 

$7,497,739

 

 

$8,089,132

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COST OF REVENUE

 

 

(2,199,354)

 

 

(2,275,587)

 

 

(6,434,796)

 

 

(7,169,329)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

 

354,332

 

 

 

299,499

 

 

 

1,062,943

 

 

 

919,803

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME

 

 

199,284

 

 

 

54,110

 

 

 

511,792

 

 

 

153,340

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

(3,081,082)

 

 

(418,824)

 

 

(4,425,031)

 

 

(1,241,631)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS FROM OPERATIONS

 

 

(2,527,466)

 

 

(65,215)

 

 

(2,850,296)

 

 

(168,488)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FINANCE COSTS

 

 

(4,259)

 

 

(2,072)

 

 

(9,746)

 

 

(7,717)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS BEFORE TAX

 

 

(2,531,725)

 

 

(67,287)

 

 

(2,860,042)

 

 

(176,205)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax expense

 

 

(76,418)

 

 

(10,114)

 

 

(76,418)

 

 

(22,792)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS

 

$(2,608,143)

 

$(77,401)

 

$(2,936,460)

 

$(198,997)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation loss

 

 

(18,603)

 

 

(320,592)

 

 

(391,533)

 

 

(707,128)

COMPREHENSIVE LOSS

 

$(2,626,746)

 

$(397,993)

 

$(3,327,993)

 

$(906,125)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share - Basic and diluted

 

 

(0.024)

 

 

(0.063)

 

 

(0.025)

 

 

(0.063)

Weighted average shares outstanding and per share amount have been adjusted for the periods shown to reflect the 12-for-1 reverse stock split effected on July 20, 2023, on a retroactive basis as described in Note 10.

 

 

134,745,041

 

 

 

14,409,733

 

 

 

134,745,041

 

 

 

14,409,733

 

 

See accompanying notes to the condensed consolidated financial statements.

 

 
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BIONEXUS GENE LAB CORP

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

AS OF MARCH 31,SEPTEMBER 30, 2023 AND 2022

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

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

Additional

 

 

 

 

 

other

 

 

 

 

 

Common stock

 

 

paid in

 

 

Accumulated

 

 

comprehensive

 

 

Total

 

 

 

Number of shares

 

 

Amount

 

 

capital

 

 

surplus

 

 

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

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

Common stock

 

 

Additional

paid in

 

 

Accumulated

 

 

other

comprehensive

 

 

Total

 

 

 

Number of shares

 

 

Amount

 

 

capital

 

 

surplus

 

 

loss

 

 

Equity

 

Balance as of December 31, 2021

 

 

14,272,605

 

 

$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

 

 

14,272,605

 

 

$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

 

 

208,333

 

 

 

150,000

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

150,000

 

Foreign currency translation loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(317,760)

 

 

(317,760)

Balance as of June 30, 2022

 

 

14,480,938

 

 

$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

 

 

14,480,938

 

 

$10,929,574

 

 

$(5,011,891)

 

$1,313,3612

 

 

$(807,390)

 

$6,423,654

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

Additional

 

 

 

 

 

other

 

 

 

 

 

Common stock

 

 

paid in

 

 

Accumulated

 

 

comprehensive

 

 

Total

 

 

 

Number of shares

 

 

Amount

 

 

capital

 

 

surplus

 

 

loss

 

 

Equity

 

Balance as of December 31, 2022

 

 

173,718,152

 

 

$10,779,574

 

 

$(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

 

 

$10,779,574

 

 

$(5,011,891)

 

$1,087,326

 

 

$(448,101)

 

$6,556,908

 

 

 

Common stock

 

 

Additional

paid in

 

 

Accumulated

 

 

Accumulated

other

comprehensive

 

 

Total

 

 

 

Number of shares

 

 

Amount

 

 

capital

 

 

surplus

 

 

loss

 

 

Equity

 

Balance as of December 31, 2022

 

 

14,480,938

 

 

$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

 

 

14,480,938

 

 

$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

 

 

14,480,938

 

 

$10,929,574

 

 

$(5,011,891)

 

$828,075

 

 

$(781,992)

 

$5,963,766

 

Net loss for the period

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(2,608,143)

 

 

-

 

 

 

(2,608,143)

Issuance of shares

 

 

3,311,725

 

 

 

6,350,695

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

6,350,695

 

Foreign currency translation loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(18,603)

 

 

(18,603)

Balance as of September 30, 2023

 

 

17,792,663

 

 

$17,280,269

 

 

$(5,011,891)

 

$(1,780,068)

 

$(800,595)

 

$9,687,715

 

Share activity (number of shares or both number and amount of shares) has been adjusted for the periods shown to reflect the 12-for-1 reverse stock split effected on July 20, 2023, on a retroactive basis as described in Note 10.

 

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 THREENINE MONTHS ENDED MARCH 31,SEPTEMBER 30, 2023 AND 2022

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

(Unaudited)

 

 

 

Three months ended

March 31,

 

 

 

2023

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

 

 

Net (loss)/profit

 

$(69,066)

 

$17,066

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

Amortization of right of use asset

 

 

3,972

 

 

 

4,341

 

Depreciation of property, plant and equipment

 

 

20,897

 

 

 

22,307

 

Dividend income

 

 

(8,692)

 

 

(7,230)

Fair value loss/(gain) on other investments

 

 

(37,399)

 

 

3,779

 

Gain on disposal of other investments

 

 

(4)

 

 

-

 

Operating (loss)/profit before working capital changes

 

 

(90,292)

 

 

40,263

 

 

 

 

 

 

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Inventories

 

 

78,171

 

 

 

(126,988)

Trade and other receivables

 

 

335,512

 

 

 

330,316

 

Deferred cost of revenue

 

 

-

 

 

 

67,606

 

Trade and other payables

 

 

(433,061)

 

 

(208,629)

Advance payment from customer

 

 

(7,801)

 

 

(30,200)

Deferred revenue

 

 

-

 

 

 

(77,276)

Operating lease liabilities

 

 

(4,366)

 

 

(5,007)

Tax recoverable

 

 

3,540

 

 

 

(27,924)

Net cash used in operating activities

 

 

(118,297)

 

 

(37,839)

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Acquisition of other investment

 

 

(13,646)

 

 

(172,172)

Dividend income

 

 

8,692

 

 

 

7,230

 

Purchase of plant and equipment

 

 

(102)

 

 

(32,191)

Net cash used in investing activities

 

 

(5,056)

 

 

(197,133)

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

(22,299)

 

 

(44,625)

NET CHANGE IN CASH AND CASH EQUIVALENTS

 

 

(145,652)

 

 

(279,597)

CASH AND CASH EQUIVALENTS, BEGINNING OF FINANCIAL YEAR

 

 

2,118,864

 

 

 

2,123,919

 

 

 

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS, END OF FINANCIAL YEAR

 

$1,973,212

 

 

$1,844,322

 

 

 

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS INFORMATION:

 

 

 

 

 

 

 

 

Fixed deposits placed with financial institutions

 

$1,566,425

 

 

$1,237,472

 

Cash at bank

 

 

406,787

 

 

 

606,850

 

Cash and cash equivalents, end of financial year

 

 

1,973,212

 

 

 

1,844,322

 

 

 

 

 

 

 

 

 

 

Supplementary cash flow information:

 

 

 

 

 

 

 

 

Interest paid

 

$(2,445)

 

$(3,326)

Income taxes paid

 

 

(12,438)

 

 

(41,946)

 

 

Nine months ended

September 30,

 

 

 

2023

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$(2,936,460)

 

$(198,997)

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

Amortization of right of use asset

 

 

15,620

 

 

 

12,754

 

Allowances for expected credit losses

 

 

1,372,573

 

 

 

-

 

Bad debts

 

 

4,175

 

 

 

-

 

Depreciation of property, plant and equipment

 

 

63,147

 

 

 

66,608

 

Dividend income

 

 

(48,892)

 

 

(34,523)

Fair value (gain)/loss on other investments

 

 

(223,284)

 

 

128,683

 

Loss on disposal of other investments

 

 

 -

 

 

 

1,798

 

Interest

 

 

6,794

 

 

 

5,521

 

Property, plant and equipment written off

 

 

18

 

 

 

-

 

Share-base compensation  

 

 

600,695

 

 

 

-

 

Stock written off

 

 

392

 

 

 

-

 

Operating loss before working capital changes

 

 

(1,145,222)

 

 

(18,156)

 

 

 

 

 

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Inventories

 

 

(130,502)

 

 

425,972

 

Trade and other receivables

 

 

505,667

 

 

 

638,401

 

Deferred cost of revenue

 

 

-

 

 

 

67,606

 

Trade and other payables

 

 

(364,617)

 

 

(769,436)

Advance payment from customer

 

 

(14,905)

 

 

(21,810)

Deferred revenue

 

 

-

 

 

 

(77,276)

Operating lease liabilities

 

 

81,989

 

 

 

(17,009)

Tax recoverable

 

 

27,904

 

 

 

(153,209)

Net cash (used in)/generated from operating activities

 

 

(1,039,686)

 

 

75,083

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Acquisition of other investment

 

 

(296,109)

 

 

(397,974)

Dividend income

 

 

48,892

 

 

 

34,523

 

Purchase of plant and equipment

 

 

(148,461)

 

 

(37,144)

Proceeds from disposal of other investments

 

 

26,854

 

 

 

-

 

Net cash used in investing activities

 

 

(368,824)

 

 

(400,595)

Cash flows from financing activities:

 

 

 

 

 

 

Interest

 

 

(6,794)

 

 

(5,521)

Repayment of finance lease

 

 

-

 

 

 

(34,038)

Shares subscriptions

 

 

5,750,000

 

 

 

150,000

 

Net cash generated from financing activities

 

 

5,743,206

 

 

 

110,441

 

Foreign currency translation adjustment

 

 

(306,677)

 

 

(446,579)

NET CHANGE IN CASH AND CASH EQUIVALENTS

 

 

4,028,019

 

 

 

(661,650)

CASH AND CASH EQUIVALENTS, BEGINNING OF FINANCIAL PERIOD

 

 

2,118,864

 

 

 

2,123,919

 

 

 

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS, END OF FINANCIAL PERIOD

 

$6,146,883

 

 

$1,462,269

 

 

 

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS INFORMATION:

 

 

 

 

 

 

 

 

Fixed deposits placed with financial institutions

 

$1,442,098

 

 

$984,088

 

Cash at bank

 

 

4,704,785

 

 

 

478,181

 

Cash and cash equivalents, end of financial period

 

 

6,146,883

 

 

 

1,462,269

 

 

 

 

 

 

 

 

 

 

Supplementary cash flow information:

 

 

 

 

 

 

 

 

Interest paid

 

$(9,746)

 

$(7,717)

Income tax refunded

 

 

315

 

 

 

-

 

Income taxes paid

 

 

(47,808)

 

 

(123,599)

 

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 THREENINE MONTHS ENDED MARCH 31,SEPTEMBER 30, 2023 AND 2022

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

(Unaudited)

 

NOTE 1 – 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 BGSBionexus Gene Lab Sdn. Bhd., a Malaysian corporation (“BioNexus Malaysia”). BioNexus Malaysia was incorporated in Malaysia on April 7, 2015 which it then subsequently changed its name to Bionexus Gene LabMRNA Scientific Sdn. Bhd. (MRNA Scientific). on September 19, 2023.

 

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 a blood collection center located at 1st floor, Lifecare Medical Centre, Kuala Lumpur, 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.

 

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 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.

 

The corporate structure as at March 31,September 30, 2023 is depicted below:

 

 

 

 

BioNexus Gene Lab Corp.

(a Wyoming company)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 100%

 

 

 

 100%

 

 

 

Bionexus Gene Lab Sdn Bhd

(a Malaysia company)

 

 

 

 

Chemrex Corporation Sdn Bhd

(a Malaysia Company)

 

 

8

BioNexus Gene Lab Corp.,

a Wyoming company

Table of Contents

100% owned

100% owned

MRNA Scientific Sdn. Bhd. (formerly “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 THREENINE MONTHS ENDED MARCH 31,SEPTEMBER 30, 2023 AND 2022

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

(Unaudited)

 

NOTE 2 - 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

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

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.

·

Use of estimates

In preparing these condensed consolidated financial statements, management makes estimatesCash 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.

·cash equivalents

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 Three months or less as of the purchase date of such investments.

 

·

Trade receivables

Trade receivables

 

Trade receivables arewere recorded at the invoiced amount and do not bear interest.Chemrex did charge interest to certain debtors with overdue outstanding. Management reviews the adequacy of the allowance for impairment 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 adjust 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

 

Inventories consisting of products available for sell are stated at the 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 Income.

 

·

Leases

Leases

 

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.

 

 
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BIONEXUS GENE LAB CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREENINE MONTHS ENDED MARCH 31,SEPTEMBER 30, 2023 AND 2022

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

(Unaudited)

 

·

Property, plant and equipment

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 20to20%

 %

Lab Equipment

 

 

10%

Motor vehicle

 

10% to 20to20%

 %

Office equipment

 

 

20%

Renovation

 

10% to 20to20%

 %

Signboard

 

10
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.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, 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.

 

 
10
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BIONEXUS GENE LAB CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREENINE MONTHS ENDED MARCH 31,SEPTEMBER 30, 2023 AND 2022

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

(Unaudited)

 

·

Impairment of long-lived assets

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

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.

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. 

 

·

Shipping and handling fees

Shipping and handling fees

 

Shipping and handling fees, if billed to customers, are included in revenue. Shipping and handling fees associated with inbound and outbound freight are expensed as incurred and included in selling and distribution expenses.

 

 
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BIONEXUS GENE LAB CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREENINE MONTHS ENDED MARCH 31,SEPTEMBER 30, 2023 AND 2022

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

(Unaudited)

 

·

Comprehensive income

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

 

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

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.

 

 
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BIONEXUS GENE LAB CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREENINE MONTHS ENDED MARCH 31,SEPTEMBER 30, 2023 AND 2022

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

(Unaudited)

 

·

Foreign currencies translation

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:

 

 

 

March 31,

 

 

December 31,

 

 

 

2023

 

 

2022

 

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

 

 

4.4170

 

 

 

4.3900

 

 

 

 

 

 

 

 

 

 

 

 

January 1, 2023 to March 31,

2023

 

 

January 1, 2022 to March 31,

2022

 

3 months average US$1: MYR exchange rate

 

 

4.3968

 

 

 

4.1938

 

 

 

September 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

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

 

 

4.6920

 

 

 

4.3900

 

 

 

 

 

 

 

 

 

 

 

 

January 1, 2023 

to September 30,

2023

 

 

January 1, 2022

to September 30,

2022

 

9 months average US$1: MYR exchange rate

 

 

4.5192

 

 

 

4.3442

 

 

·

Related parties

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.

 

 
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BIONEXUS GENE LAB CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREENINE MONTHS ENDED MARCH 31,SEPTEMBER 30, 2023 AND 2022

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

(Unaudited)

 

·

Fair value of financial instruments

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 there is little or no market data, which require the reporting entity to develop its own assumptions

 

As of March 31,September 30, 2023, and December 31, 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

Recent accounting pronouncements

 

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and do 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 May 2019,June 2016, the FASB issued ASU 2019-05, which is an update to ASUAccounting 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. The amendments in Update 2016-13 added Topic 326, Financial Instruments—Credit Losses, and made several consequential amendments to the Codification. The amendments in this Update address those stakeholders’ concerns by providing an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. For those entities, the targeted transition relief will increase comparability of financial statement information by providing an option to align measurement methodologies for similar financial assets. Furthermore, the targeted transition relief also may reduce the costs for some entities to comply with the amendments in Update 2016-13 while still providing financial statement users with decision-useful information. In November 2019, the FASB issued ASU No. 2019-10 which to updatehighlighted the effective date of ASU No. 2016-13 for private companies, not-for-profit organizations and certainadoption timeline. For smaller reporting companies applyingentities, Topic 326 is effective for credit losses, leases, and hedging standard. The new effective date for these preparers is for fiscal yearsannual periods beginning after December 15, 2022. ASU 2019-052022, including interim periods within those fiscal years, of which is effective for the Company for annual and interim reporting periods beginningon January 1, 2023 as the Company is qualified as a smaller reporting company. The Company is currently evaluating the impact ASU 2019-05 may have on its consolidated financial statements.

 

FASB issues various Accounting Standards Updates relating toCredit loss rate is determined by historical collection based on aging schedule, adjusted for current conditions using reasonable and supportable forecasts. Based on the treatment and recording of certain accounting transactions. On June 10, 2014, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2014-10, Development Stage Entities (Topic 915) Elimination of Certain Financial Reporting Requirements, including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation, which eliminates the concept of a development stage entity (DSE) entirely from current accounting guidance. The Company has elected adoption of this standard, which eliminates the designation of DSEsaging categorization and the requirement to disclose results of operations and cash flows since inception.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 3 - 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 impairment has been recordedany uncollectible amounts. An estimate for doubtful debts and expected credit losses is made when collection of the full amount is no longer probable. Bad debts are written off as of March 31, 2023 and December, 31, 2022.identified for the quarter ended September 30, 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 caseInterlink Techno started in May 2021 till June 2023. From July 2023 onwards, Chemrex had increased the interest to case basis for customers that exceeded credit term.8.4%. Chemrex imposed 6% per annum interest on Mawintech Sdn Bhd since May 2021 till to date. The normal trade credit term is generally on 30 days to 90 days term.

 

 

 

As of

 

 

 

September 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

 

 

 

 

 

 

 

Trade receivables

 

 

2,222,414

 

 

 

2,868,364

 

Allowances for expected credit losses

 

 

(1,322,018)

 

 

-

 

 

 

$900,396

 

 

$2,868,364

 

 
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BIONEXUS GENE LAB CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREENINE MONTHS ENDED MARCH 31,SEPTEMBER 30, 2023 AND 2022

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

(Unaudited)

NOTE 4 - 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.

 

Malaysia

BioNexusMRN Scientific Malaysia and Chemrex 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 2020 and with effect from year of assessment 2020, companies with paid-up capital of RM2.5 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 RM600,000 (2021: RM600,000) 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

 

 

 

March 31,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Tax Recoverable

 

 

 

 

 

 

Local

 

$-

 

 

$-

 

Foreign, representing Malaysia

 

 

(27,823)

 

 

(31,551)

Tax Recoverable

 

 

(27,823)

 

 

(31,551)

 

 

 

 

 

 

 

 

 

Income tax liabilities:

 

 

 

 

 

 

 

 

Local

 

$-

 

 

$-

 

Foreign, representing Malaysia

 

 

-

 

 

 

-

 

Income tax payables

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Deferred tax liabilities:

 

 

 

 

 

 

 

 

Local

 

$-

 

 

$-

 

Foreign, representing Malaysia

 

 

30,678

 

 

 

30,866

 

Deferred tax liabilities

 

 

30,678

 

 

 

30,866

 

Total

 

 

2,855

 

 

 

(685)

 

 

As of

 

 

 

September 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Tax Recoverable

 

 

 

 

 

 

Local

 

$-

 

 

$-

 

Foreign, representing Malaysia

 

 

(3,838)

 

 

(31,551)

Tax Recoverable

 

 

(3,838)

 

 

(31,551)

 

 

 

 

 

 

 

 

 

Income tax liabilities:

 

 

 

 

 

 

 

 

Local

 

$-

 

 

$-

 

Foreign, representing Malaysia

 

 

2,177

 

 

 

-

 

Income tax payables

 

 

2,177

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Deferred tax liabilities:

 

 

 

 

 

 

 

 

Local

 

$-

 

 

$-

 

Foreign, representing Malaysia

 

 

28,880

 

 

 

30,866

 

Deferred tax liabilities

 

 

28,880

 

 

 

30,866

 

Total

 

 

27,219

 

 

 

(685)

 

 
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BIONEXUS GENE LAB CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREENINE MONTHS ENDED MARCH 31,SEPTEMBER 30, 2023 AND 2022

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

(Unaudited)

 

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

 

LeaseRight-of-use assets and lease liabilities are measured at present value of the sum of remaining rentallease payment over the lease term as of recognition with discount rate of 6.40% per annum effective date  and 6.65% per annum effective date initial recognized date 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 costcosts are classified within operating activities in the statement of cash flows.

 

Operating lease right of use assets as follows:

 

As of

 

 

 

March 31,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Balance as of beginning of the year

 

$55,730

 

 

$41,090

 

Add: Addition of lease liabilities

 

 

-

 

 

 

32,281

 

Less: Amortization

 

 

(3,954)

 

 

(15,534)

Foreign translation differences

 

 

(341)

 

 

(2,106)

Balance

 

$51,436

 

 

$55,730

 

Operating lease right of use assets as follows:

 

As of

 

 

 

September 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Balance as of beginning of the period/year

 

$55,730

 

 

$41,090

 

Add: Addition of lease liabilities

 

 

110,817

 

 

 

32,281

 

Less: Amortization

 

 

(15,045)

 

 

(15,534)

Foreign translation differences

 

 

(3,586)

 

 

(2,107)

Balance as of end of the period/year

 

$147,916

 

 

$55,730

 

 

Operating lease liabilities as follows:

 

 

 

 

March 31,

 

 

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

 

 

(4,875)

 

 

(19,618)

Add: imputed interest

 

 

855

 

 

 

4,913

 

Foreign translation differences

 

 

(346)

 

 

(2,199)

Balance as of end of the year

 

 

52,409

 

 

 

56,775

 

Less: lease liability current portion

 

 

(16,733)

 

 

(16,569)

Lease liability non-current portion

 

$35,676

 

 

$40,206

 

Operating lease liabilities as follows:

 

 

 

 

September 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Balance as of beginning of the period/year

 

$56,775

 

 

$42,909

 

Add: Addition of lease liabilities

 

 

110,817

 

 

 

30,770

 

Less: gross repayment

 

 

(28,485)

 

 

(19,618)

Add: imputed interest

 

 

3,311

 

 

 

4,913

 

Foreign translation differences

 

 

(3,654)

 

 

(2,199)

Balance as of end of the year

 

 

138,764

 

 

 

56,775

 

Less: lease liability current portion

 

 

(33,897)

 

 

(16,569)

Lease liability non-current portion

 

$104,867

 

 

$40,206

 

 

The amortization of the right of use asset for the threenine months’ period ended March 31,September 30, 2023 and the threenine months’ period ended March 31,September 30, 2022 were $3,972$15,620 and $4,341$12,754 respectively.

 

Other information:

 

As of

 

 

 

March 31,

2023

 

 

December 31,

2022

 

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

 

 

 

 

 

 

Operating cash flow from operating lease

 

$(4,366)

 

$(126,686)

Right of use assets obtained in exchange for operating lease liabilities

 

 

51,436

 

 

 

55,730

 

Remaining lease term for operating lease (years)

 

 

3.75

 

 

 

4

 

Weighted average discount rate for operating lease

 

$6.40%

 

$6.40%

Other information:

 

As of

 

 

 

September 30,

2023

 

 

December 31,

2022

 

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

 

 

 

 

 

 

Operating cash flow from operating lease

 

$81,989

 

 

$(126,686)

Right of use assets obtained in exchange for operating lease liabilities

 

 

147,916

 

 

 

55,730

 

Remaining lease term for operating lease (years)

 

 

4.75

 

 

 

4

 

Weighted average discount rate for operating lease

 

$6.53%

 

$6.40%

 

Lease expenses for the threenine months’ period ended March 31,September 30, 2023 and the yearnine months’ period ended December 31,September 30, 2022 were $855$3,438 and $4,913,$1,358, respectively.

 

 
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BIONEXUS GENE LAB CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREENINE MONTHS ENDED MARCH 31,SEPTEMBER 30, 2023 AND 2022

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

(Unaudited)

 

NOTE 6 - PROPERTY, PLANT AND EQUIPMENT

 

Property, plant and equipment consisted of the following:

 

 

 

As of

 

 

 

March 31,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Air conditioner

 

$1,124

 

 

$1,124

 

Computer and software

 

 

2,516

 

 

 

2,516

 

Equipment

 

 

60,525

 

 

 

60,525

 

Furniture and fittings

 

 

87,122

 

 

 

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

 

 

38,213

 

 

 

38,213

 

Renovation

 

 

107,414

 

 

 

107,414

 

Signboard

 

 

806

 

 

 

704

 

 

 

 

2,262,705

 

 

 

2,262,603

 

(Less): Accumulated depreciation

 

 

(611,214)

 

 

(590,317)

Add: Foreign translation differences

 

 

(169,724)

 

 

(133,982)

Property, plant and equipment, net

 

$1,481,767

 

 

$1,511,708

 

 

 

As of

 

 

 

September 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

 

 

430,742

 

 

 

320,102

 

Land and buildings

 

 

1,506,969

 

 

 

1,506,969

 

Motor vehicle

 

 

161,148

 

 

 

137,914

 

Office equipment

 

 

33,477

 

 

 

38,213

 

Renovation

 

 

98,597

 

 

 

107,414

 

Signboard

 

 

806

 

 

 

704

 

 

 

 

2,395,298

 

 

 

2,262,603

 

(Less): Accumulated depreciation

 

 

(638,363)

 

 

(590,317)

Add: Foreign translation differences

 

 

(260,373)

 

 

(160,578)

Property, plant and equipment, net

 

$1,496,562

 

 

$1,511,708

 

 

Depreciation expense for the threenine months’ period ended March 31,September 30, 2023 and 2022 were $20,897$63,147 and $22,307$66,608 respectively.

NOTE 7 - OTHER INVESTMENTS

 

 

 

As of

 

 

 

March 31,

 

 

December 31,

 

 

 

2023

 

 

2022

 

As of beginning of the year

 

$1,150,898

 

 

$749,027

 

Addition during the year

 

 

13,646

 

 

 

511,706

 

Disposal during the year

 

 

-

 

 

 

(1,776)

Fair value loss

 

 

37,399

 

 

 

(70,628)

Foreign exchange translation

 

 

(7,268)

 

 

(37,431)

As of end of the year

 

$1,194,675

 

 

$1,150,898

 

 

 

As of

 

 

 

September 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

As of beginning of the period/year

 

$1,150,898

 

 

$749,027

 

Addition during the period/year

 

 

296,109

 

 

 

511,706

 

Disposal during the period/year

 

 

(26,854)

 

 

-

 

Written off during the period/year

 

 

-

 

 

 

(1,776)

Fair value gain/(loss)

 

 

223,284

 

 

 

(70,628)

Foreign exchange translation

 

 

(92,220)

 

 

(37,431)

As of end of the period/year

 

$1,551,217

 

 

$1,150,898

 

 

The other investments consist of the following shares: 

 

 

As of

 

 

 

March 31,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Investment in quoted shares:

 

 

 

 

 

 

Malaysia

 

 

689,531

 

 

 

659,970

 

Singapore

 

 

94,757

 

 

 

101,426

 

Hong Kong

 

 

410,387

 

 

 

389,502

 

 

 

$1,194,675

 

 

$1,150,898

 

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BIONEXUS GENE LAB CORP.

The other investments consist of the following shares: 

 

 

As of

 

 

 

September 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Investment in quoted shares:

 

 

 

 

 

 

Malaysia

 

 

982,257

 

 

 

659,970

 

Singapore

 

 

84,407

 

 

 

101,426

 

Hong Kong

 

 

484,553

 

 

 

389,502

 

 

 

$1,551,217

 

 

$1,150,898

 

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2023

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

(Unaudited)

 

NOTE 8 - 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.

 

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BIONEXUS GENE LAB CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

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

(Unaudited)

NOTE 9 - CONCENTRATION OF RISKS

 

a) Major customers

 

During the period,three months and nine months ended September 30, 2023 and 2022, the Company did not have any material recognizable major customers accounted for 10% or more of the Company’s revenue for the financial period ended March 31, 2023 and 2022.revenue.

 

b) Major suppliers

 

For monththree months ended March 31,September 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

 

$410,208

 

 

$504,906

 

 

 

20.43%

 

 

18.89%

 

$408,334

 

 

$502,559

 

Vendor B

 

$314,739

 

 

$333,751

 

 

 

15.67%

 

 

12.49%

 

$313,300

 

 

$332,200

 

Vendor C

 

$213,965

 

 

$449,494

 

 

 

10.65%

 

 

16.82%

 

$199,312

 

 

$178,749

 

 

 

$938,912

 

 

$1,288,151

 

 

 

46.75%

 

 

48.20%

 

$920,946

 

 

$1,013,508

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

Purchase

 

 

Percentage of purchases

 

 

Accounts payable trade

 

Vendor A

 

$407,094

 

 

$268,101

 

 

 

18.51%

 

 

11.78%

 

$467,447

 

 

$256,536

 

Vendor B

 

$353,697

 

 

$233,770

 

 

 

16.08%

 

 

10.27%

 

$279,092

 

 

$227,124

 

Vendor C

 

$320,413

 

 

$282,848

 

 

 

14.57%

 

 

12.43%

 

$316,067

 

 

$272,734

 

 

 

$1,081,204

 

 

$784,719

 

 

 

49.16%

 

 

34.48%

 

$1,062,606

 

 

$756,394

 

For nine months ended September 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

 

$1,167,862

 

 

$1,012,770

 

 

 

18.15%

 

 

14.13%

 

$316,067

 

 

$272,734

 

Vendor B

 

$1,077,986

 

 

$924,246

 

 

 

16.75%

 

 

12.89%

 

$467,447

 

 

$256,536

 

Vendor C

 

$922,895

 

 

$815,818

 

 

 

14.34%

 

 

11.38%

 

$279,092

 

 

$227,124

 

 

 

$3,168,743

 

 

$2,752,834

 

 

 

49.24%

 

 

38.40%

 

$1,062,606

 

 

$756,394

 

 

NOTE 10 - STOCK HOLDERS’ EQUITY

 

As at March 31,Reverse 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 were combined into and automatically became one share of common stock. No fractional shares was issued in connection with the Revised Reverse Stock Split and all such fractional shares or odd lots (less than 100 shares to any record or beneficial holder) issuable in the Revised Reverse Stock Split were rounded up to 100 shares. An aggregate of 4,425 shares were issued to applicable shareholders as a result of the round-up.

The Revised Reverse Stock Split was approved and authorized by a majority of the Company’s stockholder on May 8, 2023 and 2022,by the Board of Directors of the Company on May 8, 2023.

Public Offering & Nasdaq Listing

On 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.

In addition, pursuant to the 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 pursuant 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 outstandingsold 1,437,500 shares of common stock, is 173,718,152including 187,500 shares sold pursuant to the full 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 171,218,152offering expenses. Pursuant to the Underwriting Agreement, the Underwriter received an 8% underwriting discount on the public offering price for the shares respectively.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.

 

NOTE 11 - SEGMENTED INFORMATIONIn August, 2023, an aggregate of 759,299 shares of common stock were issued to professional parties or service providers in lieu of cash for services rendered, 125,000 were subsequently cancelled in November, 2023.

 

At March 31,In August, 2023, an aggregate of 75,000 shares of common stock were issued to three directors in lieu of cash for services rendered in connection with their employment as directors of the Company (“BGLC”) operates in the biochemical industry segment through its two Malaysian subsidiaries, BioNexus Malaysia and Chemrex.Company.

 

 

 

 

BioNexus Gene Lab Corp.

(a Wyoming company)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 100%

 

 

 

 100%

 

 

 

Bionexus Gene Lab Sdn Bhd

(a Malaysia company)

 

 

 

 

Chemrex Corporation Sdn Bhd

(a Malaysia Company)

 

In August 2023, an aggregate of 1,039,926 shares of common stock were issued to Cede & Co. as part of the round-up exercise to the reverse stock split. The Company is checking to ensure the accuracy of these issuances.

 

 
18
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BIONEXUS GENE LAB CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREENINE MONTHS ENDED MARCH 31,SEPTEMBER 30, 2023 AND 2022

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

(Unaudited)

 

NOTE 11 – SEGMENTED INFORMATION

At September 30, 2023, the Company (“BGLC”) operates in the biochemical industry segment through its two Malaysian subsidiaries, MRNA Scientific Malaysia (formerly known as Bionexus Gene Lab Sdn. Bhd.) and Chemrex.

BioNexus Gene Lab Corp.,

a Wyoming company

100% owned

100% owned

MRNA Scientific Sdn. Bhd. (formerly “Bionexus Gene Lab Sdn. Bhd.”),

a Malaysian company

Chemrex Corporation

Sdn. Bhd.,

a Malaysian company

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

 

For the quarternine months ended March 31,September 30, 2023, segmented (unaudited) revenue and net profit/(loss) (Currency expressed in United States Dollars (“US$”) are as follows:

 

 

 

BioNexus

Malaysia

 

 

Chemrex

 

 

BGLC

 

 

Total

 

 

 

Three months ended March 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REVENUE

 

$7,436

 

 

$2,369,769

 

 

$-

 

 

$2,377,205

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COST OF REVENUE

 

 

(5,347)

 

 

(2,002,961)

 

 

-

 

 

 

(2,008,308)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GROSS /PROFIT

 

 

2,089

 

 

 

366,808

 

 

 

-

 

 

 

368,897

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME

 

 

1,126

 

 

 

116,218

 

 

 

-

 

 

 

117,344

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

(46,255)

 

 

(383,177)

 

 

(107,440)

 

 

(536,872)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(LOSS)/PROFIT FROM OPERATIONS

 

 

(43,040)

 

 

99,849

 

 

 

(107,440)

 

 

(50,631)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FINANCE COSTS

 

 

(666)

 

 

(1,779)

 

 

-

 

 

 

(2,445)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(LOSS)/PROFIT BEFORE TAX

 

 

(43,706)

 

 

98,070

 

 

 

(107,440)

 

 

(53,076)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax expense

 

 

-

 

 

 

(15,990)

 

 

-

 

 

 

(15,990)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET (LOSS)/PROFIT

 

$(43,706)

 

$82,080

 

 

$(107,440)

 

$(69,066)

 

 

MRNA Scientific

Malaysia

 

 

Chemrex

 

 

BGLC

 

 

Total

 

 

 

Nine months ended September 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REVENUE

 

$28,468

 

 

$7,469,271

 

 

$-

 

 

$7,497,739

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COST OF REVENUE

 

 

(14,849)

 

 

(6,419,947)

 

 

-

 

 

 

(6,434,796)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

 

13,619

 

 

 

1,049,324

 

 

 

-

 

 

 

1,062,943

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME

 

 

3,922

 

 

 

507,870

 

 

 

-

 

 

 

511,792

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

(170,590)

 

 

(2,348,127)

 

 

(1,906,314)

 

 

(4,425,031)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS FROM OPERATIONS

 

 

(153,049)

 

 

(790,933)

 

 

(1,906,314)

 

 

(2,850,296)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FINANCE COSTS

 

 

(2,952)

 

 

(6,794)

 

 

-

 

 

 

(9,746)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS BEFORE TAX

 

 

(156,001)

 

 

(797,727)

 

 

(1,906,314)

 

 

(2,860,042)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax expense

 

 

-

 

 

 

(76,418)

 

 

-

 

 

 

(76,418)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS

 

$(156,001)

 

$(874,145)

 

$(1,906,314)

 

$(2,936,460)

 

 
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BIONEXUS GENE LAB CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREENINE MONTHS ENDED MARCH 31,SEPTEMBER 30, 2023 AND 2022

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

(Unaudited)

 

 

 

BioNexus

Malaysia

 

 

Chemrex

 

 

BGLC

 

 

Total

 

 

 

Three months ended March 31, 2022

 

REVENUE

 

$24,269

 

 

$3,004,676

 

 

$-

 

 

$3,028,945

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COST OF REVENUE

 

 

(8,038)

 

 

(2,664,574)

 

 

-

 

 

 

(2,672,612)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

 

16,231

 

 

 

340,102

 

 

 

-

 

 

 

356,333

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME

 

 

2,076

 

 

 

44,306

 

 

 

12

 

 

 

46,394

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

(44,042)

 

 

(297,769)

 

 

(26,225)

 

 

(368,036)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(LOSS)/PROFIT FROM OPERATIONS

 

 

(25,735)

 

 

86,639

 

 

 

(26,213)

 

 

34,691

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FINANCE COSTS

 

 

(799)

 

 

(2,527)

 

 

-

 

 

 

(3,326)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PROFIT/(LOSS) BEFORE TAX

 

 

(52,269)

 

 

170,751

 

 

 

(52,426)

 

 

31,365

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax expense

 

 

-

 

 

 

(14,299)

 

 

-

 

 

 

(14,299)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET PROFIT/(LOSS)

 

$(52,269)

 

$502,730

 

 

$(52,426)

 

$17,066

 

 

 

MRNA Scientific

Malaysia

 

 

Chemrex

 

 

BGLC

 

 

Total

 

 

 

Nine months ended September 30, 2022

 

REVENUE

 

$39,409

 

 

$8,049,723

 

 

$-

 

 

$8,089,132

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COST OF REVENUE

 

 

(19,173)

 

 

(7,150,156)

 

 

-

 

 

 

(7,169,329)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

 

20,236

 

 

 

899,567

 

 

 

-

 

 

 

919,803

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME

 

 

6,617

 

 

 

146,720

 

 

 

3

 

 

 

153,340

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

(157,686)

 

 

(906,698)

 

 

(177,247)

 

 

(1,241,631)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(LOSS)/PROFIT FROM OPERATIONS

 

 

(130,833)

 

 

139,589

 

 

 

(177,244)

 

 

(168,488)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FINANCE COSTS

 

 

(2,196)

 

 

(5,521)

 

 

-

 

 

 

(7,717)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(LOSS)/PROFIT BEFORE TAX

 

 

(133,029)

 

 

134,068

 

 

 

(177,244)

 

 

(176,205)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax expense

 

 

-

 

 

 

(22,792)

 

 

-

 

 

 

(22,792)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(LOSS)/PROFIT AFTER TAX

 

$(133,029)

 

$111,276

 

 

$(177,244)

 

$(198,997)

 

 

 

As of March 31, 2023 and December 31, 2022

 

 

 

Total Assets

 

 

 Total Liabilities

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BGLC & Bionexus

 

$509,574

 

 

$677,477

 

 

$93,034

 

 

$108,390

 

Chemrex

 

 

7,677,067

 

 

 

8,062,685

 

 

 

1,536,699

 

 

 

1,966,759

 

TOTAL

 

 

8,186,641

 

 

 

8,740,162

 

 

 

1,629,733

 

 

 

2,075,149

 

20

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BIONEXUS GENE LAB CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

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

(Unaudited)

 

 

As of September 30, 2023 and December 31, 2022

 

 

 

Total Assets

 

 

 Total Liabilities

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BGLC & Bionexus

 

$5,002,908

 

 

$677,477

 

 

$176,805

 

 

$108,390

 

Chemrex

 

 

6,462,614

 

 

 

8,062,685

 

 

 

1,601,002

 

 

 

1,966,759

 

TOTAL

 

 

11,465,522

 

 

 

8,740,162

 

 

 

1,777,807

 

 

 

2,075,149

 

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 March 31,September 30, 2023 up through  May 7,November 20, 2023 of these consolidated financial statements.

 

On August 1, 2023, Mr. Liong Tai Tan, the Chief Operating Officer and a member of the Board of Directors, notified the Company of his desire to resign from his position at the Company. The Company and Mr. Liong Tai Tan agreed that the resignations would be effective August 31, 2023. Mr. Liong Tai Tan’s resignation is not due to any disagreement with the Company, the Company’s management or the Board on any matter relating to the Company’s operations, policies, or practices (financial or otherwise), Mr. Liong Tai Tan informed the Company that he is leaving the Company and the Board of Directors to pursue other commitments. On August 2, 2023, the Board of Directors of the Company approved the appointment of Mr. Lee Su-Leng Tan as the Chief Operating Officer and not a director, effective September 1, 2023.

On October 4, 2023, Mr. Sook Keng Yeoh, the Chief Executive Officer and a member of the Board of Directors, tendered his resignation letter to  the Company from his positions at the Company. The Company and Mr. Sook Keng Yeoh agreed that the resignations would be effective October 4, 2023. Mr. Sook Keng Yeoh’s resignation is not due to any disagreement with the Company, the Company’s management, or the Board on any matter relating to the Company’s operations, policies, or practices (financial or otherwise).  On October 12, 2023, the board of directors of the Bionexus Gene Lab Corp. (“the Company”) approved the appointment of Mr. Chi Yuen Leong as the Chief Executive Officer and a director, effective October 12, 2023. Mr. Leong has a family relationship with the Company’s outgoing CFO, Wei Li Leong. Ms. Wei Li Leong is the daughter of Mr. Leong. 

On October 30, 2023, Ms. Wei Li Leong, the Chief Financial Officer (“CFO”), tendered her resignation letter to the Company from her position at the Company. The Company and Ms. Leong agreed that the resignation would be effective October 30, 2023 (“Resignation Date”), and Ms. Leong agreed to continue serving for one additional month from the Resignation Date. Ms. Leong’s resignation is not due to any disagreement with the Company, the Company’s management, or the Board on any matter relating to the Company’s operations, policies, or practices (financial or otherwise). The Company will actively identify a replacement personnel. The Company believes that it will be able to appoint a new CFO in the near future.

 
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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”), and its wholly owned subsidiaries, Bionexus Gene LabMRNA Scientific Sdn. Bhd. (“BionexusMRNA Scientific 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 BioNexusMRNA Scientific Malaysia, which was incorporated in Malaysia on April 7, 2015. BioNexusMRNA Scientific 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 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 BioNexusMRNA Scientific 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 website 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.

 

 
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The results of operations of our subsidiary, BioNexus-Malaysia,MRNA Scientific-Malaysia , with respect to its RNA screening process have been adversely impacted by the onset 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 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.

 

The results of operations for Chemrex were adversely impacted during fiscal year 20222023 and the 1st quarter of 2023 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 services decline, shortages in supplies and inputs.

 

Recent Developments.

 

We had proposed(iii) Public Offering and Nasdaq Listing

On July 20, 2023, the Company entered into an annual $28m screening projectunderwriting 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.

In addition, pursuant to the ChiefUnderwriting 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 pursuant 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) Reverse 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 Health Ministry of Malaysia for a nationwide RNA screening on 0.2%ratio of the population aged 40 and above. The Deputy Director GeneralReverse Stock Split from Public Health met us on January 17, 2023one-for-ten (10) to examine the costone-for-twelve (12) (the “Revised Reverse Stock Split”). Upon effectiveness of our RNA screening. While the Federal government is studying our proposal, Sabah state government plannedRevised Reverse Stock Split, every twelve (12) outstanding shares of common stock were combined into and automatically become one share of common stock. No fractional shares were issued in connection with the Revised Reverse Stock Split and all such fractional shares or odd lots (less than 100 shares to allocate $2.5many record or beneficial holder) issuable in the Revised Reverse Stock Split were rounded up to establish100 shares.

The Revised Reverse Stock Split was approved and authorized by a lab in Kota Kinabalu, Sabah capital city for Bionexus-Malaysia to workmajority of the Company’s stockholder on May 8, 2023 and by the Board of Directors of the Company on May 8, 2023.

On July 19, 2023, the Financial Industry Regulatory Authority announced the Revised Reverse Stock Split.in conjunction with local hospitals and state insurance corporation.  Meanwhile, we had presented our technology and expansion plan nationally and globally to the Minister of Science and Technology. We received favorable response and we are advised to submit for a $2m technology grant for the continuation of research, commercialization and expansion.aforementioned Nasdaq listing.

 

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

 

 

 

March 31,

 

 

December 31,

 

 

 

2023

 

 

2022

 

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

 

 

4.4170

 

 

 

4.3900

 

 

 

 

 

 

 

 

 

 

 

 

January 1,

2023 to March 31,

2023

 

 

January 1,

2022 to March 31,

2022

 

3 months average US$1: MYR exchange rate

 

 

4.3968

 

 

 

4,1938

 

 

 

September 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

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

 

 

4.6920

 

 

 

4.3900

 

 

 

 

 

 

 

 

 

 

 

 

January 1, 2023 

to September 30,

2023

 

 

January 1, 2022 

to September 30,

2022

 

9 months average US$1: MYR exchange rate

 

 

4.5192

 

 

 

4.3442

 

 

 
2223

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Results of Operations

 

Three Months Ended March 31,September 30, 2023 Compared with the Three Months Ended March 31,September 30, 2022.

 

The following table sets forth key selected financial data for the three months ended March 31,September 30, 2023 and 2022.

 

Consolidated

 

 

 

Three months ended

 

 

 

March 31,

 

 

 

2023

 

 

2022

 

REVENUE

 

$2,377,205

 

 

$3,028,945

 

 

 

 

 

 

 

 

 

 

COST OF REVENUE

 

 

(2,008,308)

 

 

(2,672,612)

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

 

368,897

 

 

 

356,333

 

 

 

 

 

 

 

 

 

 

OTHER INCOME

 

 

117,344

 

 

 

46,394

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

General and administrative

 

 

(536,872)

 

 

(368,036)

 

 

 

 

 

 

 

 

 

(LOSS)/PROFIT FROM OPERATIONS

 

 

(50,631)

 

 

34,691

 

 

 

 

 

 

 

 

 

 

FINANCE COSTS

 

 

(2,445)

 

 

(3,326)

 

 

 

 

 

 

 

 

 

(LOSS)/PROFIT BEFORE TAX

 

 

(53,076)

 

 

31,365

 

 

 

 

 

 

 

 

 

 

Tax expense

 

 

(15,990)

 

 

(14,299)

 

 

 

 

 

 

 

 

 

NET (LOSS)/PROFIT

 

$(69,066)

 

$17,066

 

Other comprehensive income:

 

 

 

 

 

 

 

 

Foreign currency loss

 

 

(39,039)

 

 

(68,776)

 

 

 

 

 

 

 

 

 

COMPREHENSIVE LOSS

 

$(108,105)

 

$(51,710)

 

 

Three months ended

 

 

 

September 30,

 

 

 

2023

 

 

2022

 

REVENUE

 

$2,553,686

 

 

$2,575,086

 

 

 

 

 

 

 

 

 

 

COST OF REVENUE

 

 

(2,199,354)

 

 

(2,275,587)

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

 

354,332

 

 

 

299,499

 

 

 

 

 

 

 

 

 

 

OTHER INCOME

 

 

199,284

 

 

 

54,110

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

General and administrative

 

 

(3,081,082)

 

 

(418,824)

 

 

 

 

 

 

 

 

 

LOSS FROM OPERATIONS

 

 

(2,527,466)

 

 

(65,215)

 

 

 

 

 

 

 

 

 

FINANCE COSTS

 

 

(4,259)

 

 

(2,072)

 

 

 

 

 

 

 

 

 

LOSS BEFORE TAX

 

 

(2,531,725)

 

 

(67,287)

 

 

 

 

 

 

 

 

 

Tax expense

 

 

(76,418)

 

 

(10,114)

 

 

 

 

 

 

 

 

 

NET LOSS

 

$(2,608,143)

 

$(77,401)

Other comprehensive income:

 

 

 

 

 

 

 

 

Foreign currency loss

 

 

(18,603)

 

 

(320,592)

 

 

 

 

 

 

 

 

 

COMPREHENSIVE LOSS

 

$(2,626,746)

 

$(397,993)

 

 
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Segmented Information

 

 

 

BioNexus

Malaysia

 

 

Chemrex

 

 

BioNexus

Malaysia

 

 

Chemrex

 

 

 

Three months ended March 31, 2023

 

 

Three months ended March 31, 2022

 

REVENUE

 

$7,436

 

 

$2,369,769

 

 

$24,269

 

 

$3,004,676

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COST OF REVENUE

 

 

(5,347)

 

 

(2,002,961)

 

 

(8,038)

 

 

(2,664,574)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

 

2,089

 

 

 

366,808

 

 

 

16,231

 

 

 

340,102

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME

 

 

1,126

 

 

 

116,218

 

 

 

2,076

 

 

 

44,306

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

(46,255)

 

 

(383,177)

 

 

(44,042)

 

 

(297,769)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FINANCE COSTS

 

 

(666)

 

 

(1,779)

 

 

(799)

 

 

(2,527)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(LOSS)/PROFIT BEFORE TAX

 

 

(43,706)

 

 

98,070

 

 

 

(52,269)

 

 

170,751

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax expense

 

 

-

 

 

 

(15,990)

 

 

-

 

 

 

(14,299)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET (LOSS)/PROFIT

 

$(43,706)

 

$82,080

 

 

$(52,269)

 

$156,452

 

 

 

MRNA Scientific Malaysia

 

 

Chemrex

 

 

MRNA Scientific Malaysia

 

 

Chemrex

 

 

 

Three months ended September 30, 2023

 

 

Three months ended September 30, 2022

 

REVENUE

 

$16,536

 

 

$2,537,150

 

 

$5,942

 

 

$2,569,144

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COST OF REVENUE

 

 

(7,301)

 

 

(2,192,053)

 

 

(4,244)

 

 

(2,271,343)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

 

9,235

 

 

 

345,097

 

 

 

1,698

 

 

 

297,801

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME

 

 

1,757

 

 

 

197,527

 

 

 

2,332

 

 

 

51,775

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

(71,870)

 

 

(1,322,231)

 

 

(63,005)

 

 

(288,350)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(LOSS)/PROFIT FROM OPERATIONS

 

 

(60,878)

 

 

(779,607)

 

 

(58,975)

 

 

61,226

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FINANCE COSTS

 

 

(1,677)

 

 

(2,582)

 

 

(336)

 

 

(1,736)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(LOSS)/PROFIT BEFORE TAX

 

 

(62,555)

 

 

(782,189)

 

 

(59,311)

 

 

59,490

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax expense

 

 

-

 

 

 

(76,418)

 

 

-

 

 

 

(10,114)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET (LOSS)/PROFIT

 

$(62,555)

 

$(858,607)

 

$(59,311)

 

$49,376

 

Revenue. For the quarter ended March 31,September 30, 2023, we had total revenue of $2,377,205$2,553,686 as compared to total revenue of $3,028,945$2,575,086 for the quarter ended March 31,September 30, 2022, decreased by 21.5%0.8% from the prior quarter.quarter due to slight decrease in purchases from customers.

 

Chemrex contributed $2,369,769 (99.7%$2,537,150 (99.4%) of the total revenue for the current quarter ended March 31,September 30, 2023 as compared to $3,004,676 (99.2%$2,569,144 (99.8%) of the total revenue for the quarter ended March 31,September 30, 2022. Chemrex’s revenues had athe decrease by $634,907 of 21.13%1.2% from prior quarter. The revenue decreased in firstthird quarter of 2023 was due to material cost for Resin & Fiberglass mat has been reduceddecrease in Malaysia. As a result, we adjusted the selling price 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 business. purchases from customers as no new project in market

 

BioNexus-MalaysiaMRNA Scientific-Malaysia contributed $7,436 (0.3%$16,536 (0.6%) of the total revenue for the quarter ended March 31,September 30, 2023 as compared to revenue of $24,269 (0.8%$5,942 (0.2%) of the total revenue from the quarter ended March 31,September 30, 2022. Revenues had decreasedincreased by $16,833$10,594 from prior quarter of $24,269,$5,942, a 69.4%178.3% increase due to RNA test from BGLC shareholders.

Cost of Revenue. For the quarter ended September 30, 2023, we incurred $2,199,354 in cost of revenues, as compared to $2,275,587 for the quarter ended September 30, 2022, a slight decrease of 3.4% was due to reason as stated above.

Chemrex had incurred $2,192,053 (99.7%) of the total cost of revenue during the current quarter period ended September 30, 2023 as compared to the quarter ended September 30, 2022 wherein Chemrex had incurred $2,271,343 (99.8%) of the total cost of revenue. The slightly decrease in Chemrex’s cost of revenues of 3.5% for the current period was due to its decreased revenues, stock price reduced and reason as stated above.

MRNA Scientific-Malaysia had incurred $7,301 (0.3%) of the total cost of revenues during the current quarter period ended September 30, 2023 as compared to $4,244 (0.2%) for the quarterly period ended September 30, 2022. Cost of revenue had increased by $3,057 from prior quarter of 72% increase was due to its increased revenues and reason as stated above.

25

Table of Contents

Gross Profit. For the quarterly period ended September 30, 2023, we had total gross profit of $354,332 as compared to gross profit of $299,499 for the quarterly period ended September 30, 2022, an increase by approximately 18.3% from the prior period.

Chemrex contributed $345,097 (97.4%) of the total gross profit for the current quarter ended September 30, 2023 as compared to $297,801 (99.4%) of the total gross profit for the quarter ended September 30, 2022. Chemrex’s gross profit increased by $47,296 from the prior quarter, an approximately 15.9% increase. The gross profit increase for Chemrex in current quarter was due to old stock at lower prices.

MRNA Scientific-Malaysia contributed $9,235 (2.6%) of the total gross profit of $354,332 for the current quarter ended September 30, 2023 as compared to gross profit of $1,698 (0.6%) of the total gross profit from the quarter ended September 30, 2022. The increase of $7,537 by approximately 443.9% from the prior period due to its increased revenues for the same reason stated above.

Other Income. For the quarterly period ended September 30, 2023, we had of $199,284, as compared to of $54,110 for the quarterly period ended September 30, 2022, an increase of approximately 268.3%.

Chemrex contributed $197,527 (99.1%) of other income for the current quarter ended September 30, 2023 as compared to $51,775 (95.7%) of the other income for the quarter ended September 30, 2022. Chemrex’s other income increased by 281.5% due to dividend received, gain on fair value of investment, bank interest earning and unrealized equity investment gain.

MRNA Scientific-Malaysia contributed $1,757 (0.9%) of other income for the current quarter ended September 30, 2023 as compared to $2,332 (4.3%) of the other income for the quarter ended September 30, 2022. The decrease of 24.7% due to lesser fund in the fixed deposit resulted from a reduction in bank interest earning.

Operating Expenses. For the quarter ended September 30, 2023, we had total operating expense of $3,081,082 as compared to total operating expenses of $418,824 for the quarter ended September 30, 2022, an increase by approximately 635.7%. It was due to general and administrative expenses which includes depreciation of fixed assets, employee compensation, professional fees for the Nasdaq uplisting and provision for losses on accounts receivable

Chemrex had incurred $1,322,231 (42.9%) of the total operating expenses for the current quarter ended September 30, 2023 as compared to $288,350 (68.8%) of the total operating expenses for the quarter ended September 30, 2022, an increase by 358.6.%. The major increase in operating expenses was due to provision for losses on accounts receivable of $1,067,413

MRNA Scientific-Malaysia had incurred $71,870 (2.3%) of the total operating expenses for the current quarter ended September 30, 2023 as compared to $63,005 (15%) of the total operating expenses for the quarter ended September 30, 2022, an increase by 14.1%. The increase in operating costs of the current quarter was due to hire new staff, increment of staff remuneration, increase of depreciation of fixed assets for new lab equipment and motor vehicle and additional cost for motor vehicle running expenses and travelling expenses.

BGLC, the holding company had incurred $1,686,981 (54.8%) of total operating expenses for the current quarter ended September 30, 2023 as compared to $67,469 (16.1%) of the total operating expenses for the quarter ended September 30, 2022. The increase of $1,619,512 by approximately 2400.4% in operating costs for the quarter ended September 30, 2023 was due to increment of directors ’ fees, hired a medical adviser, appointed an investor relations service, additional professional expenses for successful listed in Nasdaq from Advisor, Attorney, underwriting cost expenses, share-based compensation, broker fee, NOBO conduit fee, listing expenses and Nasdaq annual fee.       .

(Loss)/Profit from Operations. We had a loss from operations of $2,527,466 for the quarter ended September 30, 2023 as compared to a loss of $65,215 for the quarter ended September 30, 2022, an increase by approximately 3775.6% from the prior period, for the reasons was due to increment of directors ’ fees, hired a medical adviser, appointed an investor relations service, additional professional expenses for successful listed in Nasdaq from Advisor, Attorney, underwriting cost expenses, share-based compensation, broker fee, conduit fee, listing expenses and Nasdaq annual fee.       ..

Income tax expense. For the quarter ended September 30, 2023, we had a tax expense of $76,418 as compared to tax expenses of $10,114 for the quarter ended September 30, 2022 for Chemrex. There was no tax provision for MRNA Scientific-Malaysia for the quarters ended September 30, 2023 and 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 September 30, 2023, we experienced a foreign currency loss of $18,603 as compared with a foreign currency loss of $320,592 for the three-month period ended September 30, 2022.

26

Table of Contents

Nine Months Ended September 30, 2023 Compared with the Nine Months Ended September 30, 2022.

The following table sets forth key selected financial data for the nine months ended September 30, 2023 and 2022.

Consolidated

 

 

Nine months ended

 

 

 

September 30,

 

 

 

2023

 

 

2022

 

REVENUE

 

$7,497,739

 

 

$8,089,132

 

 

 

 

 

 

 

 

 

 

COST OF REVENUE

 

 

(6,434,796)

 

 

(7,169,329)

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

 

1,062,943

 

 

 

919,803

 

 

 

 

 

 

 

 

 

 

OTHER INCOME

 

 

511,792

 

 

 

153,340

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

General and administrative

 

 

(4,425,031)

 

 

(1,241,631)

 

 

 

 

 

 

 

 

 

LOSS FROM OPERATIONS

 

 

(2,850,296)

 

 

(168,488)

 

 

 

 

 

 

 

 

 

FINANCE COSTS

 

 

(9,746)

 

 

(7,717)

 

 

 

 

 

 

 

 

 

LOSS BEFORE TAX

 

 

(2,860,042)

 

 

(176,205)

 

 

 

 

 

 

 

 

 

Tax expense

 

 

(76,418)

 

 

(22,792)

 

 

 

 

 

 

 

 

 

NET LOSS

 

$(2,936,460)

 

$(198,997)

 

 

 

 

 

 

 

 

 

Other comprehensive income:

 

 

 

 

 

 

 

 

Foreign currency translation loss

 

 

(391,533)

 

 

(707,128)

COMPREHENSIVE LOSS

 

$(3,327,993)

 

$(906,125)

27

Table of Contents

Segmented Information

segmental reporting for BGLC

 

MRNA Scientific Malaysia

 

 

Chemrex

 

 

MRNA Scientific Malaysia

 

 

Chemrex

 

 

 

Nine months ended

September 30, 2023

 

 

Nine months ended

September 30, 2022

 

REVENUE

 

$28,468

 

 

$7,469,271

 

 

$39,409

 

 

$8,049,723

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COST OF REVENUE

 

 

(14,849)

 

 

(6,419,947)

 

 

(19,173)

 

 

(7,150,156)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

 

13,619

 

 

 

1,049,324

 

 

 

20,236

 

 

 

899,567

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME

 

 

3,922

 

 

 

507,870

 

 

 

6,617

 

 

 

146,720

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

(170,590)

 

 

(2,348,127)

 

 

(157,686)

 

 

(906,698)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(LOSS)/PROFIT FROM OPERATIONS

 

 

(153,049)

 

 

(790,933)

 

 

(130,833)

 

 

139,589

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FINANCE COSTS

 

 

(2,952)

 

 

(6,794)

 

 

(2,196)

 

 

(5,521)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(LOSS)/PROFIT BEFORE TAX

 

 

(156,001)

 

 

(797,727)

 

 

(133,029)

 

 

134,068

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax expense

 

 

-

 

 

 

(76,418)

 

 

-

 

 

 

(22,792)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET (LOSS)/PROFIT

 

$(156,001)

 

$(874,145)

 

$(133,029)

 

$111,276

 

Revenue. For the nine months period ended September 30, 2023, we had total revenue of $7,497,739 as compared to total revenue of $8,089,132 for the same period in 2022, which had decreased by $591,393 from the prior period, approximately 7.3% decrease.

Chemrex contributed $7,469,271 (99.6%) of the total revenue for the current nine months period as compared to $8,049,723 (99.5%) of the total revenue for the same period last year. Chemrex’s revenues had decreased by $580,4528 from prior period, approximately 7.21% decrease. The revenue decreased in 2023 was due to competition with reduced selling price for Resin & Fiberglass mat in Malaysia since January 2023 and there was no new project in the market resulted less order from customer.

MRNA Scientific-Malaysia contributed $28,468 (0.4%) of the total revenue for the current nine months in 2023 as compared to revenue of $39,409 (0.5%) of the total revenue from the same period last year. MRN Scientific-Malaysia’s revenue had decreased by $10,941 from nine months in 2022, an approximately 27.8% decrease. The revenue decreased in 2023 was due to RNA screening process havehaving been adversely impacted by the onset 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 fear of transmission from other patients or medical staff. Since our RNA screening is administered at a diagnostic center, our business had been adversely affected as a result.

 

Cost of Revenue. For the quarternine months period ended March 31,September 30, 2023, we incurred $2,008,308$6,434,796 in cost of revenues, as compared to $2,672,612$7,169,329 for the quarter ended March 31,same period in 2022, adecreased by $734,533 approximately 10.2% decrease of approximately 24.9% was due to the same reason as stated above.

 

Chemrex had incurred $2,002,961 (99.7%$6,419,947 (99.8%) of the total cost of revenue during the current quarter period ended March 31,in 2023 as compared to the quarter ended March 31,same period in 2022 last year wherein Chemrex had incurred $2,664,574$7,150,156 (99.7%) of the total in cost of revenue. The decrease in Chemrex’srevenue, cost of revenues of 24.8% for the current periodrevenue decreased by $730,209 approximately 10.21% was due to its decreased revenuesno new project and reasoncompetition as stated above.

 

BioNexusMRNA Scientific-Malaysia had incurred $5,347 (0.3%$14,849 (0.2%) of the total cost of revenues during the current quarter period ended March 31,in 2023 as compared to $8,038$19,173 (0.3%) for the quarterlysame period ended March 31, 2022. Costin 2022, cost of revenue had decreased by $2,691 from prior quarter$4,324, approximately 22.6% in cost of 33.5% decreaserevenues for the current period was due to its decreased revenues and reasonpost Covid-19 pandemic as stated above.

 

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Gross Profit.Profit. For the quarterlynine months period ended March 31,September 30, 2023, we had total gross profit of $368,897$1,062,943 as compared to gross profit of $356,333$919,803 for the quarterlysame period ended March 31, 2022, an increasein 2023, increased by approximately 3.5%15.6% from the prior period.

 

Chemrex contributed $366,808 (99.4%$1,049,324 (98.7%) of the total gross profit for the current quarter ended March 31, 2023nine months period as compared to $340,106 (95.4%$899,567 (97.8%) of the total gross profit for the quarter ended March 31, 2022. Chemrex’ssame period last year. The gross profit increased by $26,706 from prior quarter,$149,757 approximately 7.85% increase. The gross profit increase16.65% for Chemrexcurrent period in current quarter2023 was due to cost of revenue had been reduced.higher gross margin from the old stock that bought at lower prices 

 

BioNexus-Malaysia contributed $2,089 (0.6%

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MRNA Scientific-Malaysia had a gross profit of $13,619 (1.3%) of the total gross profit of $368,897$1,062,943 for the current quarter ended March 31,nine months period 2023 as compared to gross profit of $16,231 (4.6%$20,236 (2.2%) of the total gross profit of $919,803 from the quarter ended March 31,same period last year 2022. The substantial decreasegross profit decreased by approximately 87.1% from the prior period32.7% was due to its decreased revenues and less lab consumables purchased for the samecurrent period as according to reason stated above.

 

Other Income. For the quarterlynine months period ended March 31,September 30, 2023, we had of $117,344,$511,792 as compared to of $46,394$153,340 for the quarterlysame period ended March 31,in 2022, an increase ofincreased by $358,452 approximately 152.9%233.8%.

 

Chemrex contributed $116,218 (99%$507,870 (99.2%) of other income for the current quarter ended March 31, 2023nine months period as compared to $44,306 (95.5%$146,720 (95.7%) of the other income for the quarter ended March 31, 2022.same period last year. Chemrex’s other income increased by 162.3% due to$361,150 approximately 246.15% was generated from dividend received, bank interest and gain onfrom fair value of investment, bank interest earning and unrealized forex gain.on investment.

 

BioNexus-Malaysia contributed $1,126 (1%MRNA Scientific-Malaysia had $3,922 (0.8%) of other income for the current quarternine months period ended March 31,September 30, 2023 as compared to $2,076 (4.5%$6,617 (4.3%) of the other income for the quarter ended March 31, 2022. The decrease of 45.8%same period in 2022, decreased by approximately 40.7% was due to lower bank interest earning has been reduced.from lower fund deposited.

 

Operating Expenses. For the quarternine months period ended March 31,September 30, 2023, we had a total operating expense of $536,872$4,425,031 as compared to total operating expenses of $368,036$1,241,631 for the quarter ended March 31, 2022, ansame period in 2022. The increase byof $3,183,400, approximately 45.9%. It256.40% was due to general and administrative expenses which includes depreciation of fixed assets, employee compensation and benefits, marketing/travel expenses, professional feesexpenses and marketingcharges from Advisor, Attorney, STC (Transfer Agent), Finra, Nasdaq and travel expenses.SEC on the Company’s uplisting to Nasdaq, an additional cost for underwriting cost expenses and share-based compensation and provision for losses on account receivables.

 

Chemrex had incurred $383,177 (71.4%$2,348,127(53.1%) of the total operating expenses for the current quarter ended March 31,nine months period in 2023 as compared to $297,769 (80.9%$906,698 (73%) of the total operating expenses for the quarter ended March 31,same period 2022 an increaselast year, increased by 28.68%. The increase in operating expenses was$1,441,429 approximately 158.98% due to the increased commission, travellingdirectors’ remuneration, medical expenses, loss on unrealized/realized currency exchange, withholding taxes and increased in medical expenses. provision for losses on account receivables of $1,372,573.

 

BioNexus-MalaysiaMRNA Scientific-Malaysia had incurred $46,255 (8.6%$170,590 (3.9%) of the total operating expenses for the current quarter ended March 31, 2023nine months period as compared to $44,042 (12%$157,686 (12.7%) of the total operating expenses for the quarter ended March 31, 2022, a slightlysame period last year. The increase of $12,904 by 5%. The increaseapproximately 8.2% in operating costs offor the current quarternine months period was due to travellingan increase of traveling expenses for marketing, increment of staff remuneration, increase of depreciation of fixed assets for new lab equipment and motor vehicle and additional cost incurred for motor vehicle maintenance.running expenses.

 

BGLC, the holding company had incurred $107,440 (20%$1,906,314 (43.1%) of total operating expenses for the current quarter ended March 31, 2023nine months period as compared to $26,255 (7.1%$177,247 (14.3%) of the total operating expenses for the quarter ended March 31, 2022.same period last year. The increase of $81,215,$1,729,067 approximately 309.69%975.51% in operating costs forof the quarter ended March 31, 2023current period was due to the expenses on filing fees for form S-1, consultant fees for capital & corporation advisory services, fees for three independent board members and audit committee, SEC compliance services, SEC registration fee, increased fee of shareholder maintenanceshareholders’ notice printing and mailing expenses regarding stock reverse split by Securities Transfer Corporation, and an additional review feefees for S-1.S-1, listing expenses of $205,224 for Nasdaq uplist, the underwriting cost of $660,000 and share-based compensation of $600,695

 

Loss/(Loss)/Profit from Operations. We had a loss from operations of $50,631$2,850,296 for the quarternine months period ended March 31,September 30, 2023 as compared to a profitloss of $34,691$168,488 for the quarter ended March 31, 2022, ansame period in 2022. The increase byof $2,681,808, approximately 145.9% from the prior period, for1591.7% was due to the reasons discussed above.

 

Income tax expense. For the quarternine-months period ended March 31,September 30, 2023, we had estimated income tax expenses of $15,990provided by Chemrex $76,418 and MRNA Scientific-Malaysia had no tax provision as compared to $14,299 for the quarter ended March 31,same period 2022 for Chemrex. There waswhich had a tax estimated $22,792 from Chemrex and no tax provision for Bio-Nexus Malaysia for the quarters ended March 31, 2023 and 2022.provided from MRNA Scientific-Malaysia.

 

Foreign currency exchange loss.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-monthnine-months period ended March 31,September 30, 2023, we experienced a foreign currency loss of $39,039$391,533 as compared with a foreign currency loss of $68,776$707,128 for the three-monthsame period ended March 31,in 2022.

 

 
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LIQUIDITY AND CAPITAL RESOURCES

 

As of March 31,September 30, 2023, we had working capital of $3,895,384$6,625,767 compared with working capital of $4,017,749 as of December 31, 2022. The decreaseincrease in working capital as of March 31,September 30, 2023 from December 31, 2022 was due principally to the decreaseincrease in cash used ingenerated from our operations.

 

Our primary uses of cash had been for operations. The main sources of cash was generated from operational revenues and the private placement of our common stock. The following trends could 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 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 three months ended March 31,September 30, 2023 and 2022: 

 

 

 

Three months ended

 

 

 

March 31,

 

 

 

2023

 

 

2022

 

Net cash used in Operating Activities

 

$(118,297)

 

$(37,839)

Net cash used in investing activities

 

 

(5,056)

 

 

(197,133)

Net cash generated from/(used in) financing activities

 

 

-

 

 

 

-

 

Foreign currency translation adjustment

 

 

(22,299)

 

 

(44,625)

Net Change in Cash and Cash Equivalents

 

$(145,652)

 

$(279,597)

 

 

Nine months ended

 

 

 

September 30,

 

 

 

2023

 

 

2022

 

Net cash (used in)/ generated from Operating Activities

 

$(1,039,686)

 

$75,083

 

Net cash used in investing activities

 

 

(368,824)

 

 

(400,595)

Net cash generated from financing activities

 

 

5,743,206

 

 

 

110,441

 

Foreign currency translation adjustment

 

 

(306,677)

 

 

(446,579)

Net Change in Cash and Cash Equivalents

 

$4,028,019

 

 

$(661,650)

 

Operating Activities 

 

During the first quarternine months ended March 31,September 30, 2023, the Company incurred a net loss of $69,066$2,936,460 which, after adjusting for amortization, depreciation, dividend income, fair value gain on share investment, allowances for expected credit losses, share-base compensation, an increase in inventories, a decrease in inventories, trade receivables and a substantial reduction in trade payables, operating lease liabilities, advance payment from customer, resulted in net cash of $118,297$1,039,686 being used in operating activities during the first quarternine months ended September 30, 2023. By comparison, during the first quarternine months ended March 31,September 30, 2022, the Company had a net profitloss of $17,066$198,997 after adjusting for amortization, depreciation, dividend income, fair value loss on share investments an increase in inventories and a decrease in inventories, trade receivables, 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 $37,839$75,083 being used incash generated from operating activities during the period.

 

Investing Activities 

 

During the first quarternine months ended March 31,September 30, 2023, the Company had net cash of $5,056$368,824 used in investment activities from acquisition of share investment of $13,646$296,109 and purchase of plant & equipment of $102. During$148,461. By comparison during the first quarternine months ended March 31,September 30, 2022, the Company had net cash from acquisition of share investment of $172,172$397,974 and purchase of plant and equipment of $32,191$37,144, resulting in net cash used in financinginvesting activities of $197,133.$400,595. 

 

Financing Activities 

 

During the first quarternine-month ended March 31,September 30, 2023, and 2022,the Company had nonet cash of $5,743,206 generated from financing activities.activities for shares subscriptions of initial public offering (IPO) of 1,473,500 shares at a price to the public of $4.00 per share for total proceeds of $5,750,000. By comparison during the nine months ended September 30, 2022, we had net cash of $110,441 generated from financing activities for continued the repayment of a finance lease of $34,038 and shares subscriptions of $150,000.

 

Item 3. 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 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)13a-15(c) and 15d-15(e) under the Exchange Act (“Exchange Act”) as of March 31,September 30, 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;

 

i)ii)

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

iii)

Provide reasonable detail accurately and fairly reflect the transactions and dispositionsassurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets;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 had assessed the effectiveness of our internal control over financial reporting as of March 31,September 30, 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 had improved. A material weakness could create reasonable possibility that a material misstatement in annual or interim financial statements. The management considers its internal control over financial reporting required further improvement.

 

Management had concluded an internal control over financial reporting and glad to note that a majority of our Board of Directors werewas made up of independent directors and the Audit Committee comprised of all independent directors since 2022,2023, the adequacy in the monitoring of required internal controls and 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.

 

To the extent reasonably possible, given our limited resources, upon consummation of a merger with a private operating company, the Company had been relying on three or more individuals. We were expanding our current board of directors to include additional independents willing to perform directorial functions. Since the recited remedial actions and we would hire or engage additional personnel, this material weakness would be overcome in the near term. Until such remedial actions could be realized, we would 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 March 31,September 30, 2023, there had been no change in internal control over financial reporting that had materially affected or was 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.

In August 2023, an aggregate of 759,299 shares of common stock were issued to professional parties in lieu of cash for services rendered in connection with Company’s listing onto the Nasdaq Capital Market, 125,000 were subsequently cancelled in November, 2023. The shares were issued at $0.72 per share. These issuances were made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.

In August 2023, an aggreaget of 75,000 shares of common stock were issued to directors for services rendered. The shares were issued at $0.72 per share. These issuances were made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.

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.

 

NoneThere were issuances of an aggregate of 1,039,926 shares to Cede & Co. in August, 2023 as part of the round-up exercise to the reverse stock split. The Company is checking to ensure the accuracy of these issuances. The Company cautions the reader of this Form 10-Q that the issuances currently impact the total number of shares outstanding and weighted average shares’ calculation as a result. If needed, the Company will rectify the discrepancy and expects to file an amendment to this Form 10-Q as soon as practicable upon resolution. The amendment to this Form 10-Q will require and auditors’ consent. The Company is actively looking to rectify the discrepancy and expects to file an amendment to this Form 10-Q, if needed, as soon as practicable upon resolution.

 

 
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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*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*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.File by amendment.

 

 
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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 YeohYee Meng Wong

 

Sook Keng YeohYee Meng Wong

 

Chief Executive OfficerPresident and Director

 

(Principal Executive Officer)

 

 

 

/s/ Wei Li Leong

 

Wei Li Leong

 

Chief Financial Officer

 

(Principal Financial and Accounting Officer)

 

 

 

May 9,November 20, 2023

 

 
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