BioNexus Gene Lab Corp 10-Q, filed Nov 20, 2023

BioNexus Gene Lab Corp (BGLC)

10-Q 2023-11-20 For: 2023-09-30

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Added on April 11, 2026

About this 10-Q

BioNexus Gene Lab Corp filed this 10-Q on November 20, 2023, covering the quarter ended September 30, 2023.

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Wyoming		35-2604830
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

Unit 02, Level 10 Tower B, Avenue 3, The Vertical Business Suite II Bangsar South No. 8 Jalan Kerinchi Kuala Lumpur, Malaysia		59200
(Address of Principal Executive Offices)		(Zip Code)

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

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated Filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

		Page
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Controls and Procedures	31

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	32
Item 2.	Unregistered Sale of Equity Securities and Use of Proceeds	32
Item 3.	Defaults Upon Senior Securities	32
Item 4.	Mine Safety Disclosures	32
Item 5.	Other Information	32
Item 6.	Exhibits	33
SIGNATURES		34

	●	our goals and strategies;

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

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

	●	our estimates regarding the market opportunity for our services;

	●	the impact of government laws and regulations;

	●	our ability to recruit and retain qualified personnel;

	●	our failure to comply with regulatory guidelines;

	●	uncertainty in industry demand;

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

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

	●	depth of the trading market in our securities.

			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

	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

											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

	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	)

	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

Categories	Principal Annual Rates
Air conditioner		20	%
Buildings		2	%
Computer and software		33	%
Equipment		20	%
Furniture and fittings	10%to20%
Lab Equipment		10	%
Motor vehicle	10%to20%
Office equipment		20	%
Renovation	10%to20%
Signboard		10	%

·	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.

☐	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

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:
	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

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	%

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

	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	)

	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

	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

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

	·	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.

Exhibit		Description

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

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

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

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

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

101.SCH		Inline XBRL Taxonomy Extension Schema Document.*

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.*

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.*

101.LAB		Inline XBRL Taxonomy Extension Labels Linkbase Document.*

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.*

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

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

*	File by amendment.

BIONEXUS GENE LAB CORPORATION

/s/ Yee Meng Wong
Yee Meng Wong
President and Director
(Principal Executive Officer)

/s/ Wei Li Leong
Wei Li Leong
Chief Financial Officer
(Principal Financial and Accounting Officer)

November 20, 2023

1.	I have reviewed this Quarterly Report on Form 10-Q of the Registrant for the fiscal quarter ended September 30, 2023;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4.	The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	(c)	Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	(d)	Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

	(a)		All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

	(b)		Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Bionexus Gene Lab Corporation

Dated: November 20, 2023

/s/ Yee Meng Wong
Yee Meng Wong President
(Principal Executive Officer)