BioNexus Gene Lab Corp 10-K for FY2024
BioNexus Gene Lab Corp (BGLC)
About this 10-K
BioNexus Gene Lab Corp filed this 10-K on April 15, 2025, covering the fiscal year ended December 31, 2024 (FY2024).
Headline figures
Fiscal year ended December 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $9.51M
- down 2.7% from $9.77M a year earlier
- Net loss
- $1.6M
- compared with a net loss of $2.63M a year earlier
- Diluted EPS
- -$0.09
- compared with -$0.17 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
For the fiscal year ended:
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For the transition period from ________ to ________
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Securities registered pursuant to Section 12(b) of the Act:
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Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐
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.
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).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer | ☐ | Accelerated filer | ☐ |
☒ | Smaller reporting company | ||
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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 has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of June 30, 2024, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was approximately $
As of December 31, 2024, there were
CONTENTS
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| Table of Contents |
FORWARD-LOOKING STATEMENTS
Certain statements made in this Annual Report on Form 10-K are “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the Registrant to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. The Company’s plans and objectives are based, in part, on assumptions involving the continued expansion of business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance the forward-looking statements included in this Report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be construed as a representation by the Company or any other person that the objectives and plans of the Company will be achieved.
Unless stated otherwise, the words “we,” “us,” “our,” or “the Company” in this Annual Report collectively refers to BioNexus Gene Lab Corp., a Wyoming corporation and our wholly owned subsidiaries, MRNA Scientific Sdn. Bhd. (formerly BioNexus Gene Lab Sdn. Bhd.) (“MRNA Scientific”), and Chemrex Corporation Sdn. Bhd. (“Chemrex”), both Malaysian companies (“Subsidiaries”). “BGLC” or “BioNexus” refers to BioNexus Gene Lab Corp. “RM” refers to Malaysian Ringgit, the legal currency of Malaysia. “USD,” “US$,” or “$” refer to US dollars, the legal currency of the United States.
We acquired Chemrex on December 31, 2020, pursuant to a Share Exchange Agreement with Chemrex its shareholders. We acquired all of the issued and outstanding shares of capital stock of Chemrex from the Chemrex shareholders in exchange for 68,487,261 shares of common stock of BioNexus issued to the Chemrex shareholders.
Our principal corporate office is Unit A-28-7, Level 28, Tower A, Menara UOA Bangsar, No.5 Jln Bangsar Utama 1, Kuala Lumpur, Malaysia. The MRNA Scientific Malaysia lab is located at Lab 353, Chemical Science Centre, University Science Malaysia, George Town, Penang, Malaysia and it also has a blood collection center located at 1st floor, Lifecare Medical Centre, Kuala Lumpur, Malaysia. Chemrex offices and supply hub is located at 4 Jalan CJ 1/6 Kawasan Perusahaan Cheras Jaya, Selangor, Malaysia.
Our corporate telephone number is +1 307 241 6898 and its website is www.bionexusgenelab.com. Chemrex’s telephone number is (+60) 19 222 3815 and its website is www.chemrex.com.my. These websites do not form part of this Form 10-K.
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PART I
Item 1. Business.
Executive Summary and Strategic Outlook
The Company is pleased to present its fiscal year 2024 Form 10-K, highlighting significant progress in core business operations, robust liquidity, strategic innovation initiatives, and proactive governance enhancements.
Financial Strength and Stability
The Company ended 2024 with a strong cash position of approximately USD $4.37 million, minimal debt, and robust liquidity. This positions us ideally to capture strategic growth opportunities, invest in technology advancements, and navigate market uncertainties confidently.
Innovative Growth and Forward-Looking Initiatives
In 2024, BGLC proactively embraced digital health technology, advanced molecular diagnostics, and blockchain-based treasury management—positioning the company at the forefront of innovation. Our recently adopted Ethereum treasury strategy underscores our commitment to efficiency, transparency, and strategic foresight.
Corporate Governance and Compliance Leadership
We have proactively addressed Nasdaq compliance challenges, including implementing a strategic reverse stock split, demonstrating a firm commitment to maintaining our valuable Nasdaq listing and shareholder value. The Company is focused on active expansion of our business through both organic and inorganic means, and has retained industry leading support to support our financial growth and capital raising efforts.
Future Outlook
Looking forward, BGLC anticipates continued strategic expansion into high-growth sectors, driven by robust corporate governance, innovative technologies, and sustained financial resilience. We are confident our actions will translate into sustainable shareholder value and long-term strategic advantages.
Overview
The Company, through its wholly owned subsidiary Chemrex, focuses on the sale of chemical raw materials for the manufacture of industrial, medical, appliance, aero, automotive, mechanical, and electronic industries in the Southeast Asia region. These countries include Malaysia, Indonesia, Vietnam, and other countries in Southeast Asia.
In addition, the Company, through its wholly owned subsidiary, MRNA Scientific, is in the business of developing and providing safe, effective, and non-invasive liquid biopsy tests for the early detection of biomarkers that we believe are linked to diseases to minimize treatment costs and improve patient management. Our non-invasive blood tests provide analysis of changes in RNA to detect the potential risk of 11 different diseases.
Corporate History
The Company was incorporated in the State of Wyoming on May 12, 2017. On August 23, 2017, the Company acquired all of the outstanding capital stock of MRNA Scientific Sdn. Bhd. (formerly BioNexus Gene Lab Sdn. Bhd), a Malaysian corporation incorporated in Malaysia on April 7, 2015, which it then subsequently changed its name to MRNA Scientific Sdn. Bhd. (“MRNA Scientific”) on September 19, 2023.
On December 31, 2020, the Company consummated a Share Exchange Agreement with Chemrex and the Chemrex shareholders, pursuant to which we acquired all of the issued and outstanding shares of capital stock of Chemrex, which was incorporated in Malaysia on September 29, 2004, from the Chemrex shareholders in exchange for 68,487,261 shares of common stock of the Company issued to the Chemrex shareholders.
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Initial Public Offering.
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 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 therefore received net proceeds, before expenses, of $5,290,000 from the sale of the common stock. 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.
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 were 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) that were issuable in the Revised Reverse Stock Split were rounded up to the nearest whole share, or rounded up to 100 shares, respectively.
The Revised Reverse Stock Split was approved and authorized by a majority of the Company’s 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.
Recent Events.
A. Annual Meeting Irregularities.
In connection with the Company’s Annual Meeting held on October 4, 2024, as previously reported, the Company believes that, in advance of the Annual Meeting and potentially in violation of federal securities laws, a solicitation of dissident proxies, along with the dissemination of false and misleading statements, was made to a number of Company shareholders holding substantial voting power. Many of these shareholders were prior shareholders of our subsidiary, Chemrex. No dissident proxy was filed with the Securities and Exchange Commission as required under their rules and regulations. This belief is premised upon preliminary information received by the Company from certain of these shareholders. Based on this information, the Company believes that a former Officer and Director of the Company, who was previously removed by the Company shareholders, was one of the primary dissident parties directing the unlawful acts (“Dissident Actors”). The Company believes the dissident solicitation negatively affected the results of the approval of the stock option plan and a reverse stock split proposal (“Compromised Proposals”). The Company believes the Dissident Actors ostensibly urged a number of shareholders holding a substantial number of votes to oppose the Compromised Proposals. As a result, the Compromised Proposals were not approved by the Company’s shareholders. The reverse stock split proposal was necessary for the Company to maintain its Nasdaq listing (See B. Nasdaq Deficiency below).
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B. Nasdaq Deficiency.
On November 6, 2023, the Company reported that it received a letter from the Listing Qualifications Department of the Nasdaq Stock Market (“Nasdaq”) regarding the Company’s failure to comply with Nasdaq Continued Listing Rule (“Rule”) 5550(a)(2), which requires listed securities to maintain a minimum bid price of $1.00 per share. A failure to comply with Rule 5550(a)(2) exists when listed securities fail to maintain a closing bid price of at least $1.00 per share for 30 consecutive business days.
Under Rule 5810(c)(3)(A), the Company automatically was provided a period of 180 calendar days, until May 6, 2024, to regain compliance.
The Company requested in writing an additional 180-calendar day compliance period after the expiration of the Initial Period to regain compliance with the Nasdaq requirements and informed Nasdaq of its intention to cure the deficiency during any second compliance period extension by effecting a reverse stock split, if necessary.
On May 8, 2024, the Company received notification from Nasdaq that, after an analysis of the requirements under Nasdaq Listing Rule 5810(c)(3)(A), the Staff determined that the Company is eligible for an additional 180 calendar day extension period (the “Additional Period”), or until November 4, 2024. If at any time during this 180-day period the closing bid price of the Company’s securities is at least $1.00 for a minimum of ten consecutive business days, the Company’s compliance will be regained.
On December 27, 2024, the Company received a written notice from the Nasdaq Hearings Panel (the “Panel”) indicating that the Company has been granted a temporary exception to regain compliance with Nasdaq Listing Rule 5550(a)(2), which requires a minimum bid price of $1.00 per share (the “Bid Price Rule”). The Company has until May 1, 2025, to regain compliance. As part of this compliance plan, the Company effected a reverse stock split, which became market effective on April 7, 2025, which resulted in every ten (10) shares immediately prior to the market effectiveness being consolidated into one (1) share on the market effective date. The company will have to close above the minimum bid price of $1 for a total of 10 trading days from the market effective date to regain compliance. Failure to regain compliance by May 1, 2025, will result in the delisting of the Company’s common stock from The Nasdaq Capital Market.
C. Special Meeting Results.
Following the failure of the reverse stock split proposal at the Company’s Annual Meeting (See A. Annual Meeting Irregularities above), on March 19, 2025,the "Company held a Special Meeting of Shareholders (the "Meeting") to approve a reverse stock split of the Company’s outstanding shares of common stock, with a ratio ranging from one-for-five (1:5) to one-for-ten (1:10), with the exact ratio to be set at the discretion of the Board of Directors. After a quorum was established, the shareholders approved the Reverse Stock Split. Thereafter, on that same date, the Board of Directors set the reverse stock split ratio at 1 for 10. The Reverse Stock Split was approved by the Board at a ratio of one-for-ten (1:10), an amendment was filed with the Wyoming Secretary of State on April 1, 2025, and became market effective on April 7, 2025.
D. Chemrex Governance.
During preparation of the Company’s quarterly report for the period ending September 30, 2024, several lapses in corporate governance standards were discovered in our wholly owned subsidiary, Chemrex. These findings have been duly disclosed in our prior filings after investigation by the Audit Committee. The findings of the Audit Committee investigation were that due to the resignation of two Directors (Mr. Wei Foong Lim, and Mr. Koon Wai Wong), one of which was an Audit Committee member, that oversight and governance at the subsidiary level of Chemrex required improvement. This was communicated with our Independent Auditor, and the result is that the Audit Committee has authorized an Internal Audit program to help improve overall governance and controls, that the report would be tabled to the Audit Committee and Management for action, and that the lapses would be reviewed at an upcoming Annual Shareholder Meeting of Chemrex to be held on or before June 2025.
During this meeting, the transactions associated with the governance lapses will be reviewed and either ratified or rejected by the Company as the sole shareholder. As all accounting treatment has been duly disclosed, we do not expect any material negative impact on the financial statements pending the results of the Annual Meeting.
The transactions and notes are highlighted in Item 13, Related Party Transactions.
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Corporate Structure
The corporate structure as of the date of this filing depicted below:
| BioNexus Gene Lab Corp. a Wyoming company |
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100% owned MRNA Scientific Sdn. Bhd. (formerly known as “BioNexus Gene Lab Sdn. Bhd.”), a Malaysian company |
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| 100% owned Chemrex Corporation Sdn. Bhd., a Malaysian company | |||
Chemical Raw Material Business
Our Products
Chemrex, our wholly owned subsidiary, is involved in the wholesale of chemical raw material products. We purchase raw chemical materials, mostly fibre re-enforced polymers (“FRP”), from domestic and international manufacturers and sell them to manufacturers in Southeast Asia. The FRP and other raw materials we offer are used to produce a wide variety of goods, including handrails, bench tops, automotive and aero parts, cleanroom panels, and covers for various instruments used in manufacturing.
A substantial portion of the Company's revenue comes from the sale of FRP products. FRP products are highly sought after by our customers due to:
| · | The material's lightweight coupled with high strength. The material's ability to be a good electrical insulator with no electro-magnetic behavior and no electric spark. |
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| · | The material's rust-free nature and resistance to acid, alkali, organic dissolvents, and other gas and liquid mixtures. |
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| · | The material's resistance to aging with more than 20 years of useful life under normal working conditions. |
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| · | The material's ease of maintenance. |
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Chemical Raw Material Product Examples
Listed below are some examples of FRP chemical raw material products the company sells. In addition, there are both general purpose and more specific use case materials.
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| Polyester Resin SHCP 268
SHCP 268 is a thixotropic, quick-curing unsaturated polyester resin suitable as a general-purpose resin. It can be used in generally all FRP products. However, it does not have significant structural integrity, chemical resistance, or UV resistance properties and as a result its application is limited. For example, one of the ways this material has been used is in the construction of train seats. |
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| Polyester Resin 9509
This is a premium raw material compared to Polyester Resin SHCP 268 and is priced higher. Like Polyester Resin SHCP 268, it is a general-purpose material but provides more structural integrity and is longer lasting. Customers have used this material to produce marine boats and water slides. |
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| Polyester Resin 2802
This is also a more premium grade of resin. It has a niche use case and is generally used as a key component in the pultrusion process by certain manufacturers. |
Chemical Raw Material Product Applications
Our chemicals are used to produce a wide variety of finished goods. Common products utilizing our FRP materials include handrails, bench tops, automotive and aero parts, panelling for hospital/laboratory/industrial clean rooms, and covers for various instruments used in manufacturing. Some examples of FRP end-user products manufactured by our customers are displayed below:
Medical and Industrial Equipment
Platform, Handrail and Decking
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Medical Appliances
Research and Development
As part of our current research and development efforts, we are working closely with external R&D companies, such as Sift Center Sdn. Bhd. (www.siftcenter.com) and PCA Group Sdn. Bhd. (www.pcagroup.com), to produce and supply FRP products to Shell petrol stations in Malaysia. Sift Center Sdn. Bhd. and PCA Group Sdn. Bhd. are attempting to use the infusion vacuum process to produce Electrical Vehicle (EV) charging and hydrogen fueling stations. As part of our collaboration, we will provide the resin and fiberglass required to produce the infusion vacuum chamber and our technical expertise regarding the viability of the design.
Sales and Marketing
| · | Online Promotion. We market our product offerings through our website, www.chemrex.com.my. We utilize Google’s search engine optimization to drive traffic to our website. We also engaged Pan Pages, an internet marketing company, to further market our products to new consumers over the internet. New prospective customers can forward their inquiries via phone or our website. Our marketing and technical representatives will then contact the prospective customer and discuss how we can fulfill their order and accommodate any specific requests. Our marketing team also conducts online searches and attempts to identify new customers from time to time. |
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| · | Product Display. We invite current and potential customers to examine our product range at our warehouse in order that customers can get a more comprehensive assessment of our product’s quality. |
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| · | Marketing Personnel. Our product sales and marketing are performed internally by our Managing Director, Mr. Tham Too Kam, our Executive Director, Mr. Tan Liong Tai, and our Marketing Manager, Mr. Chan Kwan Wah, together with three marketing and technical representatives. In addition, our marketing team visits our existing customers monthly, and we have several discussions with them to obtain information of new potential competitors in the market. |
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| · | Business Introduction from Suppliers. We meet our suppliers regularly. From time to time, our suppliers also will provide us with the contact details of new potential customers to whom we can provide our products, and our marketing personnel will follow up on these new sales leads. |
Our Chemical Raw Material Customers
Most of our existing customers are well-established manufacturers and contractors with long-term relationships with Chemrex who regularly place orders. Typically, they would give us a forecast of the products they need and place their orders monthly. Our top five customers, based on revenue, accounted for approximately 29.97% of our revenue for the fiscal year ended December 31, 2024.
Chemrex Top 5 Customers |
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A |
| $ | 641,949 |
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| 6.75 | % |
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| $ | 632,956 |
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| 6.66 | % |
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| $ | 572,023 |
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| 6.01 | % |
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| $ | 504,895 |
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| 5.31 | % |
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| $ | 498,615 |
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| 5.24 | % |
Total |
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| 2,850,438 |
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| 29.97 | % |
From time to time, we assist customers with their new product development or projects with suitable and compatible raw materials. In addition, leveraging on our prior successful dealings with local and international raw materials manufacturers, we often collaborate with our customer's research teams to meet their new product needs, such as the various technical and aesthetic requirements of their new products or projects.
Our Chemical Raw Material Suppliers
We consider our major vendors in each period to be those vendors that accounted for more than 10% of overall purchases in such period. We had three suppliers accounted for 19.89%, 16.08%, and 13.85% of the Company’s total chemical raw material purchase, respectively. We had three major vendors during the fiscal year ended December 31, 2024, who collectively accounted for 57.84% of total purchases. We purchase from a variety of suppliers and believe these raw materials are widely available. If we were unable to purchase from our primary suppliers, we do not expect we would face difficulties in locating another supplier at substantially the same price. We have secure and efficient access to all the raw materials necessary to produce customers’ products saving them the trouble of sourcing from several distributors. We believe our relationships with the suppliers of these raw materials are strong. While the prices of such raw materials may vary greatly from time to time, we believe we could hedge such risk by adjusting our price or absorb the higher cost at times if necessary.
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Fiscal Year |
| 2024 |
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| $ | 1,635,124 |
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| 19.89 | % |
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| $ | 1,321,889 |
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| 16.08 | % |
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| $ | 1,138,814 |
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| 13.85 | % |
Total |
| $ | 4,095,827 |
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| 49.82 | % |
Fiscal Year |
| 2023 |
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A |
| $ | 1,467,381 |
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| 17.38 | % |
B |
| $ | 1,439,569 |
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| 17.05 | % |
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| $ | 1,224,113 |
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| 14.50 | % |
Total |
| $ | 4,131,063 |
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| 48.93 | % |
Quality Control Policies
We have a strict quality control process centered around the handling, storage, and expiry dates of our chemical raw materials before they are delivered to our customers. All products supplied by us are attached with a Certificate of Analysis ("COA") issued by manufacturers. COA contains the batch numbers, test result data, and manufacturing date. There are also labels on the packaging of our products stating the production date and batch number.
Competition
Based on the information provided by our customers and suppliers, Malaysia's industrial chemical market size is approximately USD 50 million per annum, and our current market share is around 20% of the domestic market. In the wider Southeast Asian region, including Indonesia, Thailand, Vietnam, Philippines, Myanmar, and Cambodia, we rely on close relationships with our distributors to distribute our product to customers. As a result, the market size of the Southeast Asian market is USD 500 million per annum, and our current market share is around 2.0% of the Southeast Asian market.
As Chemrex's clients are primarily in Malaysia, we consider Chemrex's principal competitors to be in the Malaysian domestic market for selling chemical raw materials. Chemex's competitors include Kaliba Sdn.Bhd. ("Kaliba"), Myeast Sdn.Bhd. and RP Product Sdn.Bhd. Some of these competitors, such as Kaliba, may have greater resources than us. They are leading providers of Fibreglass reinforced materials such as Polyester Resin, Chopped Strand Mat, and Woven Roving, many of which overlap with our product offerings.
Additionally, most of the chemical raw materials we distribute are made to industry standard specifications and either produced by or available from multiple sources. Our suppliers may also distribute directly or through multiple chemical distributors. Even for products that are unique in formulation or other characteristics, there are typically other products available that are functional substitutes, such as natural plant fiber products, such that we face significant competition even where we are the exclusive distributors of a specialty product. Hence, our suppliers may also choose to limit their distribution outsourcing, particularly with respect to higher margin products, or to partner with other wholesalers or resellers for distribution, which could increase competition.
Competitive Advantages
Notwithstanding the competition, we are a well-established and are a reliable quality composite material distributor with professional services. In addition, we offer the following benefits to our existing and potential customers:
| · | Technical Expertise: Our technical staff, comprising two chemists and one engineer, are highly competent and familiar with the technical advancements in the FRP industry. They provide technical know-how on mixing various products and offer product suggestions or modifications to our customers, which may involve strengthening or enhancing existing products sold by our customers. |
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| · | Pricing Advantage: As a prominent reseller of FRP products in the domestic market with significant market share, we distribute our products at a relatively higher volume than our competitors. Hence, we enjoy volume discounts from our suppliers, which we are able to pass on to our customers. As a result, prospective customers could incur higher prices if they purchase from some of our competitors. |
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| · | Convenience: We provide a wide variety of over 100 FRP products. In contrast, some of our competitors might have a smaller product range. In addition, prospective customers could incur higher logistical costs if they purchase from many different sellers instead of relying on us as a one stop shop for all their business needs. |
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| · | Sourcing New Raw Materials for Product Development: We source a broad range of raw materials worldwide. This global reach greatly expands our potential customer base and provides more opportunities for our existing customers to develop new products from a wider variety of raw materials. |
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Growth Strategy
The composite raw materials market is expected to reach an estimated $40.2 billion by 2024 globally and is forecasted to grow at a CAGR of 3.3% from 2019 to 2024. Furthermore, the composites end-user market is expected to reach an estimated $114.7 billion by 2024 globally. The major drivers for growth in this market are the increasing demand for lightweight materials in the aerospace, defense, and automotive industries. Also, corrosion and chemical resistance materials are in demand in the construction and pipe and water tank industries. With our wide variety of product offerings, we are well-positioned to take advantage of this increase in chemical composite market demand. Source: Composites Market: Trends, Opportunities and Competitive Analysis (https://www.researchandmarkets.com/categories/chemicals-materials)
In the future, we intend to develop automated warehousing and logistics powered by artificial intelligence to guide our inventory control/movement and business decisions in a more streamlined and efficient manner. We also intend to deepen our ties with our major business partners, who have cooperated with us successfully for many years. We further intend to hire more young and talented professionals to open more domestic and foreign markets in an effort to implement and sustain business growth. We are constantly seek new products through various channels, such as trade shows, to add to our product line in an effort to expand our customer base. From 2023 to 2024, we are projecting 8% revenue growth, mainly driven by more orders for our raw materials from electric vehicle charging station manufacturers. From 2025 onwards, we are projecting that the growth rate will stabilize at 7%.
Regulatory Matters
We are unaware of and do not anticipate spending significant resources to comply with governmental regulations. We are subject to the laws and regulations of various jurisdictions in Malaysia.
Listed below are the licenses Chemrex currently holds to conduct its business in Malaysia.
License/Permit/Approval | Holding entity | Issuing authority | Date of grant | Date of expiry |
Importer Certificate | Chemrex | Department of Custom | October 14, 2020 | Expired once the goods cleared from the Custom |
Product Liability
Due to the nature of Chemrex's business, we may face claims for product liability resulting from any environmental or personal injury because of the chemical raw materials sold by Chemrex. We currently do not hold any insurance should a claim arise.
MRNA Diagnostics Business
Through our wholly owned subsidiary, MRNA Scientific, we engage in the application of genomic testing to enable early disease diagnosis and support proactive health management.
MRNA Scientific's principal office address is Unit A-28-7, Level 28, Tower A, Menara UOA Bangsar, No.5 Jln Bangsar Utama 1, Kuala Lumpur, Malaysia. Our molecular genomic lab is located at Lab 353, Chemical Science Centre, University Science Malaysia, George Town, Penang, Malaysia, and we have a colon cancer and infectious diseases screening lab located at 4th floor, Lifecare Medical Centre, Kuala Lumpur, Malaysia. MRNA Scientific's telephone number is (+6018-2218762) and website is www.bionexusgenelab.com.
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Our Non-invasive Blood Tests
MRNA Scientific develops and markets safe, effective, and non-invasive blood tests designed to detect diseases at early stages. These tests aim to reduce treatment costs and improve patient outcomes.
Our blood-based assays analyze changes in ribonucleic acid (RNA) to assess specific risks and detailed aspects of an individual’s health condition. These tests currently screen for:
| · | Eight types of cancer: nasopharyngeal, lung, liver, stomach, breast, cervical, prostate, and colon; |
| · | Two inflammatory bowel diseases: ulcerative colitis and Crohn’s disease; |
| · | Osteoarthritis; |
| · | Cardiovascular and neurological risks, including heart attack, stroke, and mental disorders (added in 2023/2024). |
We believe our genomic screening can enhance the accuracy of traditional diagnostic procedures such as imaging and biopsies, serving as a valuable complementary tool.
We generate revenue by screening blood samples collected by third-party healthcare providers including doctors, labs, and hospitals using proprietary biomarkers developed in-house. We believe MRNA Scientific is currently the only commercial molecular lab in Malaysia offering RNA-based diagnostic testing for cancer, inflammatory bowel disease, and osteoarthritis, using a GeneChip platform certified by the U.S. Food and Drug Administration (FDA). Our screening results also support personalized medicine by informing customized therapies tailored to each patient’s risk profile.
Development of Screening Process
Our late co-founder, Dr. Choong-Chin Liew, pioneered a novel approach to RNA-based diagnostics by identifying circulating blood biomarkers that reflect tissue-level disease processes. His research demonstrated that gene expression in peripheral blood can change in response to injury or illness, providing molecular insight into disease states.
These expression profiles, or molecular signatures, serve as the foundation for our diagnostic assays. By identifying disease-specific gene activity patterns, we can develop screening tools that enable early detection, monitor disease progression, and support precision interventions.
We take advantage of profiling these changes, which enables us to identify unique molecular signatures (biomarkers) reflecting disease activity which can then be used to develop disease-specific molecular diagnostic assays. We use these biomarkers as the basis for screening tests for early disease detection and generate revenue from providing screening services.
The Screening Process
Our screening process begins with a blood sample. While we do not perform direct sample collection, a licensed healthcare provider draws approximately 2.5 ml of blood from the patient using a PAXgene™ tube. The sample, along with a completed Blood Withdrawal Card, is securely delivered to our laboratory via certified courier.
Upon arrival:
| · | Samples are labeled with the patient’s name, ID number, and lab reference code. |
| · | RNA is extracted in a biosafety cabinet, then processed using microcentrifugation and spectrophotometry to assess quality and concentration. |
| · | RNA is purified, biotinylated, hybridized onto a GeneChip™ microarray, and analyzed using proprietary software to generate a personalized risk score report. |
Our reports are delivered to the referring healthcare provider for clinical use. These include a disease risk chart and interpretations intended to aid further diagnostics and therapeutic planning.
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The process for effectuating RNA analysis depicted in the picture below.
The raw data obtained will be analyzed and quality control processed by our lab in Malaysia using proprietary software to calculate the risk analysis of 11 different diseases. We simplify the result into a graph which is contained in the patient booklet provided to the health care professional. A sample graph is depicted below.
In the above chart, NPC is Nasopharyngeal Cancer, ATDS is Ascending, Transverse, Descending, and Sigmoid Colon Cancer, and OA is Osteoarthritis.
The following cautionary text is contained in the results booklet we provide to the healthcare provider and each patient. The results booklet contains recommendations to assist with a physician's final diagnosis and treatment plan and is not meant to be medical advice. Below is the disclaimer that is included in each result booklet.
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This report/screening is not intended or implied as a substitute for professional medical advice, diagnostics, or treatment. The content, including text, graphics, and information in the report, illustrates the risk score only. MRNA Scientific Sdn. Bhd. makes no representation and assumes no responsibility for the accuracy of the information, as such information and contents are subject to change without notice. You are encouraged to review any medical condition or treatment with your doctor.
The key proprietary aspect of our process is our algorithm software, biomarkers, and the RNA extraction, preservation, quality control, hybridization, and data analysis processes developed by Dr. Liew. First, the gene expression from a reference population representing a specific disease condition is filtered using a quality assurance process based on repeatability data. Our proprietary algorithm software then analyzes this collected data and processes checked by the laboratory manager to ensure all the steps are followed in the deriving predictive model for each disease condition. Once these models have been established, they can be applied to the data from a new sample to make risk predictions for this individual. Each disease/disorder has a similar group of diseased/disordered genes identified through years of our research and clinical trials in Malaysia.
Customer Service and Quality Control Policies
We envision this division of our business to provide high-quality screening tests. Our competitive advantage lies in our turnaround time, expert interpretation, and easy-to-understand reports with timely clinical decision-making. In addition, we are dedicated to continuous quality improvement in our services and is committed to sensitivity and specificity priorities on each test.
We are committed to maintaining the confidentiality of patient information and to compliance with all privacy, security, and electronic transaction requirements of the Health Medical Act and Regulations and Code of Professional Conduct of the Malaysian Medical Council. Third parties requesting results, including any requests directly from the patient, are directed to the ordering facility. A copy of our screening test report includes reference ranges, interpretive comments, and footnotes. We submit test results electronically to healthcare providers, individual clients, and/or the Malaysian Health Ministry (HHS) regarding reportable diseases. Clients are responsible for compliance with CDC-specific statutes concerning reportable conditions. Patient test results are retained indefinitely.
All samples handled by our laboratory are treated as though they are infectious. The greatest dangers to healthcare workers exposed to blood and body fluids are hepatitis B, hepatitis C, and HIV viruses. Our laboratory turnaround time is monitored closely and compared to standardized laboratory metrics for continuous quality improvement. Laboratory scientists and technologists are all highly experienced in handling complex tests. Our scientists, and our supervisors monitor performance indicators for all laboratory services. Performance improvement initiatives are regularly instituted and reviewed as part of an ongoing quality improvement program.
Business Development and Growth Strategy
In April 2017, we began marketing our screening services to healthcare providers, laboratories, and hospitals, all of which have licensed doctors or staff. As mentioned above, our screening service provides a risk analysis report of 11 diseases, of which eight are different forms of cancer. In Malaysia, the cost of the analysis is not covered by health insurance. Thus, patients are required to pay out of pocket for our services, which currently range from $200 for a single colon cancer screening to $975 for all 11 diseases under our screening protocol.
In November 2017, we expanded our marketing efforts to companies, business organizations, and insurance agents. As a result of these efforts, during November and December 2017, we entered arrangements with two companies in Kuala Lumpur to screen their employees for 11 diseases/disorders (lung cancer, colon cancer, nasopharyngeal cancer, liver cancer, stomach cancer, breast cancer, cervical cancer, prostate cancer, inflammatory bowel diseases (ulcerative colitis & Crohn’s disease), and osteoarthritis pursuant to which each company paid us $50,000. We completed the screening process of these two companies in the first quarter of 2019 and continue to market our services to other local companies in the Kuala Lumpur metropolitan area. In 2022, we had entered an arrangement with a clinical lab to conduct screening for the 11 diseases.
Our pricing strategy is consistent with our objectives, costs, competition, and demand for the product. Our management administers the policies to match the market needs. We charge the following prices to individuals for our tests:
| · | $200 for Colon Cancer Screening (Single Colon Cancer screening per blood sample) |
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| · | $975 for Blood-based Genomic Signature (BGS) Screening for 11 diseases/disorders (Molecular RNA Cancer Screening per blood sample) |
The price for each test charged to hospitals, clinics, and other healthcare operators is subject to an incentive-based rebate that ranges from 20% to 25% based on the monthly volume of tests conducted.
As of December 31st, 2023, we work with 27 liquid biopsy sample collection centers, 12 in Klang Valley (comprised of our capital city Kuala Lumpur) and towns on the northern and southern fringes of the capital city), and 15 public hospitals and labs nationwide. These 27 locations account for approximately 90% of our patient population in 2022 and 2021.
We aim to have more healthcare providers in the Klang Valley referring patients to us for screening protocol. Once we have established our brand and reputation in Klang Valley, we will expand to other large cities in Malaysia. In 2024 we signed agreements that allow for the expansion of our services to outsourcing with screening providers and large healthcare groups. It is the intention that these agreements will form the basis for increased revenue growth and profitability in the future.
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Some prevalent cancer cases in Malaysia from Globocan 2020 endorsed by WHO
Cancer screening costs from a diagnostic center is priced at $882 (RM3,880) as compared to MRNA screening at $432 (RM1,900), quantity genechip purchase would drastically reduce the screening cost.
We believe that an increase in our marketing and promotional efforts will correlate to increased revenues and the expansion of our business. Our growth and expansion strategies are as follows:
| · | Continue to leverage our relationships with healthcare providers. To date, we have relied upon the efforts of management and their relationships with healthcare providers to create continued interest in our blood-based genomic screening. These relationships have been located primarily in the Klang Valley market. In 2024, it will be our priority to not only increase the number of healthcare providers that are able to offer our services through partnership, but we are in the process of developing a referral system to allow an expanded network of healthcare providers to promote our “ BGS “ testing via referring them to an existing sample collection site. |
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| · | Allocate more capital resources to our marketing efforts. Apart from sales through existing relationships with healthcare providers, we intend to allocate more capital to marketing and promotion. Our current strategy proposes to increase the awareness of our “ BGS “ testing to the public, via direct marketing through wellness and healthcare key opinion leaders (“KOL”). We are currently in talks with various successful parties and wellness providers in the Klang Valley area to form partnerships on public awareness. |
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| · | Increase focus on corporate clients. To date, we have entered arrangements with six corporate clients to provide our 11 diseases/disorders screening services to their employees. In addition, we intend to solicit more corporate clients in the Klang Valley and major cities in Malaysia. We commenced these efforts last year and will continue in 2024. Our officers and the Marketing Companies will undertake these efforts. |
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| · | Expand to other regions in Malaysia. We intend to expand to other large cities in Malaysia, such as Penang, Ipoh, Seremban, Melaka, Johor Bahru, and Kuantan. |
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| · | Expand to other international regions. We have been in discussions with key market access experts and professionals in Europe to explore the possibility of offering our screening products in Europe. Additionally, we are in the midst of discussing the terms of a partnership with one of the largest testing, screening, and genetic sequencing providers in Hong Kong for the purposes of expanding our services to Hong Kong. |
Competition
We believe that we have the only commercial molecular lab in Malaysia that provides liquid biopsy screenings that detect the risk of cancer, inflammatory diseases, and osteoarthritis risk via RNA biomarkers and provides a report which patients and physicians can use to plan for future tests and personalized therapies. Based on prior private conversations with the USA Thermo Fisher representative in Malaysia, there is a medical lab using similar equipment on DNA screening.
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Competitive Strengths
We believe that we have several competitive strengths compared to these other health diagnostic tools. They are as follows:
| · | Our screening (a simple blood draw) is less invasive, unlike tissue biopsies. A tissue biopsy is a procedure in which a physician removes a piece of tissue or a sample of cells from a patient's body to be analyzed in a laboratory. If a patient experiences certain signs and symptoms or the physician has identified an area of concern, he may undergo a biopsy to determine whether the patient has cancer or another ailment. While biopsies can have higher accuracy, it is a more invasive procedure that is difficult to repeat and thus impractical for periodic monitoring. Our screening tests are a form of liquid biopsy which utilizes RNA biomarkers. Broadly speaking, a liquid biopsy is the collection of a body fluid sample to test for relevant biomarkers to inform patient management, most applied to the collection of peripheral blood for analysis of cell-free circulating tumor ribonucleic acids (RNA). Since liquid biopsies are performed on peripheral blood, which is easy to access, it allows for more widespread use, particularly in patients who cannot have surgery. As a result, liquid biopsies can reduce the time to treatment, improve the efficiency of medical staff and resources, and be used to screen more diseases. |
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| · | Non-DNA blood tests for diseases like cancer are not dispositive. There currently exist various examinations to detect diseases in patients. For example, abnormally high or low levels of certain substances in your body can be a sign of disease. Testing of blood, urine or other body fluids that measure these substances can help doctors make a diagnosis. However, abnormal lab results are not a sure sign of disease. Conventional blood tests are an important tool but are not always reliable because of low sensitivity, specificity, and predictive value. |
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| · | Other conventional tests could require a longer turnaround time. Imaging is a procedure in which physicians utilize pictures of areas inside the body that help the doctor see whether a disease is present. These images can be taken in several ways, including a CT scan, Nuclear Scan, MRI, PET Scan, and Ultrasound. Imaging is useful in providing physicians with real-time images to assist with diagnosis. However, imaging techniques can have longer turnaround times, the information provided can be limited, and the patient may be exposed to radiation. |
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| · | Our screening provides a predictive risk assessment for developing the 11 diseases. Most other screening procedures detect diseases only when they are already present in the body and most cases, in the final stages of the disease, making it difficult to treat or reverse. Our screening can detect the 11 diseases at an earlier stage before any symptoms even appear. Early detection and targeted medical intervention could be crucial in saving patients' lives and financial resources. |
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| · | Our screening measures the current risk of a specific individual rather than their lifetime risk. DNA tests measure a specific individual's lifetime risk based on their DNA. However, since DNA does not change with external factors, it cannot quantify an individual's specific risk of the disease materializing. However, our RNA-based test is highly specific since RNA expression changes with lifestyle and other external factors. Hence, at-risk patients can make timely adjustments to their lifestyles to reduce the potentiality of these diseases. Lifestyle adjustments may include reduction or changes to food, tobacco, and alcohol intake, change of working environment, and the implementation of exercise programs, among other changes. |
Seasonality
The nature of our business does not appear to be affected by seasonal variations.
Regulatory Matters
We are unaware of and do not anticipate spending significant resources to comply with governmental regulations. We are and will be subject to the laws and regulations of those jurisdictions in which we operate. Generally, business licensing requirements, income taxes, and payroll taxes apply to all business operations. The development and operation of our business are not subject to special regulatory and/or supervisory requirements. We only require an operating permit from the City Hall of Kuala Lumpur, Malaysia, which we have received. However, we cannot predict whether we would be able to comply with other regulations if implemented.
Product Liability
Due to the nature of our business, we may face claims for product liability resulting from the inaccurate or erroneous diagnosis using our screening process. MRNA Scientific does not currently have insurance against any such claims.
Research and Development
Our research and development budget over the years is listed in the following table:
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| Research & |
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| Development |
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Year |
| (self-funded) |
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2020 |
| $ | 45,000 |
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2021 |
| $ | 45,000 |
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2022 |
| $ | 173,300 |
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2023 |
| $ | 54,982 |
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2024 |
| $ | 47,511 |
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Our Properties
The corporate office for MRNA Scientific is located at Unit A-28-7, Level 28, Tower A, Menara UOA Bangsar, No.5 Jln Bangsar Utama 1, 59000 Kuala Lumpur, Malaysia. The lease commenced on June 1, 2024 and terminates on May 31, 2027, with option to extend till May 31, 2029. The space consists of 2,206 square feet with an annual rent of approximately $30,190.
We also have two laboratories. One of our laboratories is located at 4th Floor, Wisma Life Care, No. 5, Jalan Kerinchi, Bangsar South, 59200 Kuala Lumpur, Malaysia. The lease commenced on November 1, 2016 and terminates on October 31, 2023 but continues on a month to month basis. The annual rent is approximately $6,563. The other laboratory is located at Lab 353, University Science Malaysia, George Town, Penang, Malaysia. The lease commenced on December 1, 2017 and terminates on November 30, 2026. The space consists of 1,500 square feet with an annual rent of approximately $32,257.
On July 2, 2012, we purchased a 25,000 sq. ft wholesale distribution center at 4, Jalan CJ 1/6, Kawasan Perusahaan Cheras Jaya, 43200 Cheras, Selangor, Malaysia, and two investment properties for $1,395,210. The two investment properties are listed below.
| · | A 1,100 sq ft condominium located at No. B-17-03, Duet Residence, Jalan Kinrara 6, Bandar Kinrara, 47180 Puchong, Selangor, purchased on August 26, 2020; |
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| · | A 2,000 sq ft commercial building located at First floor, No. 2B Pelangi Avenue, Jalan Kelicap 42A/KU1, Klang Bandar, Diraja, 41050 Klang, Selangor purchased on September 21, 2020. |
On July 1, 2024, we entered into a lease for Lot 238 and 239, Jalan Villaraya 1/9, Kawasan Industri Villaraya, 43500 Semenyih, Selangor. The lease terminates on June 30, 2025, with an option to extend for one year. The purpose of this lease is to establish a manufacturing facility for a new high-quality color paste production line.
On January 16, 2025, we entered into a lease for the unit at No. 65, Jalan CJ4/15-1A, Taman Cheras Jaya, 43200 Cheras, Selangor. The lease terminates on January 15, 2026. The purpose of this lease is to provide housing accommodation for our warehouse staff.
Intellectual Property
As of date of this filing, we have 1 trademark registered with the Intellectual Property Corporation of Malaysia. We do not have any patents, copyright, or licensing rights. Additionally, for MRNA Scientific, we rely on trade secrets and know-how using the process developed by and assigned to the Company by Dr. Liew, one of Our Founders. However, there is no assurance that others will not independently develop the same or similar technology or obtain unauthorized access to such trade secrets, know-how, and other unpatented technology. To protect our rights in these areas, we require all laboratory managers that work in our lab to enter into strict confidentiality agreements.
As part of our on-going software development process that has been supplemented by our Initial Public Offering, we are in the process of developing from the original source code, a Cloud Based (SaaS) implementation and evolutionary development of our Machine Learning sample analysis software. We are working with additional experts in the field, via contract and with the view to expand our internal team, and this work is being overseen by our CEO, Mr. Su-Leng Tan Lee, who has a background in Computer Science, Machine Learning, and Artificial Intelligence.
While we have attempted to protect the unpatented proprietary technology that we develop or acquire and will continue to attempt to protect future proprietary technology through patents, copyrights, and trade secrets, we believe that our success will depend, to a large extent, upon continued innovation and technological expertise.
Employees
As of date of this filing, Chemrex has 21 full-time employees, and MRNA Scientific has 9 full time employees. We believe we have good relations with our employees. The company presently is covered by social security insurance and contributes to the Employee Provident Fund of its employees, a compulsory pension scheme for all Malaysian citizens and permanent residents who are working in Malaysia.
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The following table sets out the number of Chemrex's employees, excluding external experts, categorized by functions as of the date of this filing:
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| Number of |
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Function |
| Employees |
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Director |
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| 5 |
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Sales & Marketing |
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| 4 |
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Warehouse |
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| 6 |
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Administration & Purchaser |
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| 2 |
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Finance |
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| 2 |
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Production |
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| 2 |
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Total |
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| 21 |
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The following table sets out the number of MRNA Scientific's employees, excluding external experts, categorized by functions as of the date of this filing:
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| Number of |
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Function |
| Employees |
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Director |
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| 2 |
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Finance |
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| 1 |
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Lab Operation |
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| 1 |
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Research & Development |
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| 1 |
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Marketing & Business Development |
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| 3 |
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General & Administration |
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| 1 |
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Total |
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| 9 |
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The following table sets out the number of BGLC's employees, excluding external experts, categorized by functions as of the date of this filing:
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| Number of |
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Function |
| Employees |
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Chief Executive Officer |
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| 1 |
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Administrative Staffing |
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| 1 |
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Total |
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| 2 |
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Currently, we have entered into employment agreements with our officers. We do not have stock options, profit sharing, or similar benefit plans. However, as appropriate after our Initial Public Offering, the Company plans to table at the next Annual Meeting of Shareholders an Equity Compensation Plan that will assist the Company to align the interests of its Key Personnel with the success of the Company, improving employee retention and paving the way for growth in Shareholder value. The Company is currently exploring multiple methods to expand its Executive Team, including advertising and engaging with specialist recruitment agencies to bolster our human capital and business development resources.
Insurance
For our Chemrex operations, we maintain third-party liability insurance to cover claims in respect of personal injury or property or environmental damage arising from accidents on our chemical warehouse and office or relating to our operations. Our employees presently are covered by Social Security insurance (SOCSO) and retirement fund (EPF). We do not maintain business interruption insurance or key person insurance. Our insurance coverage is consistent with the industry and sufficient to cover our key assets, facilities, and liabilities. Also, as part of our Chemrex business, we maintain burglary and fire insurance for our property at 4, Jalan CJ 1/6, Kawasan Perusahaan Cheras Jaya, 43200 Cheras, Selangor, Malaysia, and fidelity guarantee insurance against our employees.
Legal Proceedings
We are not subjected to nor engaged in any litigation, arbitration, or claim of material importance, and no litigation, arbitration, or claim of material importance is known to us to be pending or threatened by or against our Company that would have a material adverse effect on our Company's results of operations or financial condition.
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Item 1A. Risk Factors
RISK FACTORS
An investment in our common stock involves a number of very significant risks. You should carefully consider the following known material risks and uncertainties in addition to other information in this Form 10-K in evaluating our company and its business before purchasing shares of our company’s common stock. You could lose all or part of your investment due to any of these risks.
Proactive Risk Management and Mitigation Strategies
The Company employs comprehensive risk management practices designed to proactively identify, mitigate, and manage key operational, financial, and strategic risks. While the following section transparently outlines potential risks to our business, investors are encouraged to consider our proactive, robust risk management processes, which significantly reduce the likelihood and potential impact of these risks.
Risk Factors Related to Our Financial Prospects and Capitalization
We are an early commercial-stage company and have a limited operating history, which may make it difficult to evaluate our current business and predict our future performance.
We are an early commercial-stage company and has a limited operating history. Our limited operating history may make it difficult to evaluate our current business and this makes predictions about our future success or viability subject to significant uncertainty. In combination with other anticipated increased operating expenses in connection with becoming a public company, these anticipated changes in our operating expenses may make it difficult to evaluate our current business, assess our future performance relative to prior performance and accurately predict our future performance.
We will continue to encounter risks and difficulties frequently experienced by early commercial-stage companies, including those associated with increasing the size of our organization and the prioritization of our commercial, research, and business development activities. If we do not address these risks successfully, our business could suffer.
Our growth (organic and inorganic) may require substantial capital and long-term investments.
Our competitiveness and growth depend on our ability to fund our capital expenditures. We cannot assure you that it will be able to fund our capital expenditures at reasonable costs due to adverse macroeconomic conditions, our performance or other external factors.
In the future, we expect to incur significant costs in connection with its operations. We intend to expand our business through increased marketing efforts of MRNA Scientific and Chemrex. These development activities generally require a substantial investment before we can determine commercial viability, and the proceeds of this offering will not be sufficient to fully fund these activities. We expect to need to raise additional funds through public or private equity or debt financings, collaborations or licensing arrangements to continue to fund or expand our operations.
Our actual liquidity and capital funding requirements will depend on numerous factors, including:
| · | the scope and duration of and expenditures associated with our discovery efforts and research and development programs; |
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| · | the costs to fund our commercialization strategies for any product candidates for which we receive marketing authorization or otherwise launch and to prepare for potential product marketing authorizations, as required; |
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| · | the costs of any acquisitions of complementary businesses or technologies that we may pursue; |
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| · | potential licensing or partnering transactions, if any; |
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| · | Our facilities expenses, which will vary depending on the time and terms of any facility lease or sublease we may enter into, and other operating expenses; |
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| · | the scope and extent of the expansion of our sales and marketing efforts; |
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| · | the settlement of the government investigation described below, potential and pending litigation, potential payor recoupments of reimbursement amounts, and other contingencies; |
| · | the commercial success of our products; |
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| · | Our ability to obtain more extensive coverage and reimbursement for our tests and therapeutic products, if any, including in the general, average-risk patient population; and |
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| · | Our ability to collect its accounts receivable. |
The availability of additional capital, whether from private capital sources (including banks) or the public capital markets, fluctuates as our financial condition and market conditions in general change. There may be times when the private capital sources and the public capital markets lack sufficient liquidity or when our securities cannot be sold at attractive prices or at all, in which case we would not be able to access capital from these sources. In addition, a weakening of our financial condition or deterioration in its credit ratings could adversely affect our ability to obtain necessary funds. Even if available, additional financing could be costly or have adverse consequences.
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Our net losses may continue in the future.
We have devoted substantial resources to the development and commercialization of the products of MRNA Scientific and Chemrex. For the last three fiscal years, we have not achieved profitable operations. Accordingly, we might not become profitable for any future period. Our failure to achieve profitability would negatively affect our business, financial condition, results of operations, and cash flows. If we are unable to execute our sales and marketing strategy and our products are unable to gain sufficient acceptance in the market, we may be unable to generate sufficient revenues to sustain our business.
Any additional capital we raise may not be available on satisfactory terms and may adversely affect stockholders’ holdings or rights.
Additional capital, if needed, may not be available on satisfactory terms or at all. In addition, the terms of any financing may adversely affect stockholders’ holdings or rights. Debt financing, if available, may include restrictive covenants. To the extent that we raise additional funds through collaborations and licensing arrangements, it may be necessary to relinquish some rights to our technologies or grant licenses on terms that may not be favorable to us.
If we are not able to obtain adequate funding when needed, we may be required to delay development programs or sales and marketing initiatives. If we are unable to raise additional capital in sufficient amounts or on satisfactory terms, we may have to make reductions in our workforce and may be prevented from continuing our discovery, development, and commercialization efforts and exploiting other corporate opportunities. In addition, it may be necessary to work with a partner on one or more of our tests or products under development, which could lower the economic value of those products to us. Each of the foregoing may harm our business, operating results, and financial condition and may impact our ability to continue as a going concern.
Raising additional capital may lead to dilution of shareholdings by our existing shareholders, restrict our operations, and may further result in fair value loss, adversely affecting our financial results.
We may seek additional funding through a combination of equity and debt financings and collaborations. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of existing holders of our shares will be diluted, and the terms may include liquidation or other preferences that adversely affect the rights of our existing shareholders.
The incurrence of additional indebtedness or the issuance of certain equity securities could result in increased fixed payment obligations and could also result in certain additional restrictive covenants, such as limitations on our ability to incur additional debt or issue additional equity, limitations on our ability to acquire or license IP rights and other operating restrictions that could adversely impact our ability to conduct its business.
Recent business decisions regarding the Cryptocurrency Industry.
The Company had made recent announcements during fiscal year 2025 concerning its decision to explore business opportunities in the crypto market. The Company currently is in the process of developing its business plans and strategies in an effort to enhance shareholder value. These plans and strategies are preliminary in nature and we can not predict whether we will be successful in these endeavors.
Risk Factors Related to Our Business and Industry
General Business and Industry Risks
We are unable to predict the duration of future economic conditions.
Future economic downturns, prolonged slow growth or stagnation in the economy could materially adversely affect our business, results of operations, financial condition and cash flows.
Global economic conditions could materially adversely impact demand for our products and services.
Our operations and performance depend significantly on economic conditions. Global financial conditions continue to be subject to volatility arising from international geopolitical developments and global economic phenomenon, as well as general financial market turbulence and natural phenomena such as the COVID-19 pandemic. Uncertainty about global economic conditions could result in
| · | customers postponing purchases of its products and services in response to tighter credit, unemployment, negative financial news and/or declines in income or asset values and other macroeconomic factors, which could have a material negative effect on demand for its products and services; and |
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| · | third-party suppliers being unable to produce devices for its products or raw materials in the same quantity or on the same timeline or being unable to deliver such parts and components as quickly as before or subject to price fluctuations, which could have a material adverse effect on the services and products provided by MRNA Scientific; and accordingly, on its business, results of operations or financial condition. |
Access to public financing and credit can be negatively affected by the effect of these events on Malaysian, U.S. and global credit markets. The health of the global financing and credit markets may affect its ability to obtain equity or debt financing in the future and the terms at which financing or credit is available to us. These instances of volatility and market turmoil could adversely affect its operations and the trading price of its common stock.
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Our risk management programs, processes, or procedures for identifying and addressing risks in MRNA Scientific’s business may not be adequate or effectively applied, and this may adversely impact its businesses.
MRNA Scientific relies on a combination of technical and human factors to protect us against risks. MRNA Scientific policies, procedures and practices are used to identify, monitor and control a variety of risks, including risks related to human error and hardware and software errors. The administration and results of each test are reviewed by a physician and a scientist in Malaysia before the results are released to the patient. The Company’s standard of operations was primarily developed by Dr. Liew. These risk-management methods may not adequately prevent losses and may not protect us against all risks, in which case our business, economic conditions, operations and cash flows may be materially adversely affected.
We have risk-management policies, control systems and compliance manuals in place; however, there is no guarantee that such policies, systems, and manuals will be effectively applied in every circumstance by our staff. For example, employees could override the system technology and theoretically waive requirements, thereby exposing the company accurately conduct its quality control.
We may be adversely impacted by changes in laws and regulations, or in their application.
Currently, there are no governmental regulations that materially restrict our screening business in Malaysia. MRNA Scientific’s laboratory in Malaysia was established through an invitation by the Malaysian Health Minister alongside a government grant of $1,250,000. MRNA Scientific’s screening tests have gone through preclinical and clinical trials involving private hospitals and government agencies including the Institute of Medical Research (IMR), Malaysian Biotechnology Corporation (BiotechCorp) and the Clinical Research Centre (CRC). The findings of the preclinical and clinical trials are published in peer reviewed journals such as the Journal of Molecular and Cellular Cardiology, and Physiological Genomics. Once published, MRNA Scientific would do confirmational tests before applying for commercialization. MRNA Scientific’s Malaysian lab is currently national operating under an operating license granted by the city of Kuala Lumpur.
The Malaysian government passed the Pathology Laboratory Bill of 2007 (“Pathology Act”). However, since 2007, the government has not implemented the regulations underlying the legislation nor has the government enforced the Pathology Act. Any such regulations could establish criteria for the various classes and specialties of laboratories, the organization and management system of the laboratory, the qualification and experience of the person-in-charge, the qualification and competence of pathologists, scientific and technical staff engaged to conduct tests, and the standards of laboratory practice. MRNA Scientific cannot predict whether it would be able to comply with the Pathology Act and its regulations, if implemented. In addition, there also is a risk that the regulations arising from the Pathology Act or new legislation or regulations could increase MRNA Scientific’ costs of doing business or otherwise prevent us from carrying out the expansion of its business. Accordingly, our business may be harmed if we are not able to comply with any future governmental legislation or regulations, including the Pathology Act.
MRNA Scientific is currently operating under a license granted by the City Hall of Kuala Lumpur, Malaysia. Under Malaysian and local laws, we may continue to operate under its current operating license which MRNA Scientific Malaysia currently has. We cannot predict whether there will be future regulations which may impact its ability to conduct its business.
Currently, there are no governmental regulations that affect Chemrex’s business in Malaysia and it may continue to operate under an operating license granted by the Kajang Town Hall of Selangor, Malaysia. Future legislation or regulations could increase Chemrex’s costs of doing business or otherwise prevent us from carrying out the expansion of its business.
Business disruptions could seriously harm our future revenue and financial condition and increase its costs and expenses.
Our operations could be subject to power shortages, telecommunications failures, wildfires, water shortages, floods, earthquakes, hurricanes, typhoons, fires, extreme weather conditions, medical epidemics and other natural or man-made disasters or business interruptions. The occurrence of any of these business disruptions could seriously harm MRNA Scientific’ operations and financial condition and increase MRNA Scientific’ costs and expenses. Unfavorable global economic conditions could adversely affect our business, financial condition, or results of operations.
We do not carry insurance for all categories of risk that our business may encounter. Although MRNA Scientific intend to obtain some form of business interruption insurance in the future, there can be no assurance that we will secure adequate insurance coverage or that any such insurance coverage will be sufficient to protect our operations to significant potential liability in the future. Any significant uninsured liability may require us to pay substantial amounts, which would adversely affect our financial position and results of operations.
Our lack of insurance could expose us to significant costs and business disruption.
We currently do not have any product liability or disruption insurance to cover our operations in Malaysia or overseas. We have determined that the costs of insuring for these risks and the difficulties associated with acquiring such insurance on commercially reasonable terms make it impractical for us to have such insurance. If we suffer any losses, damages or liabilities in the course of our business operations, we may not have adequate insurance coverage to provide sufficient funds to cover any such losses, damages or product claim liabilities. Therefore, there may be instances when we will sustain losses, damages and liabilities because of our lack of insurance coverage, which may in turn materially and adversely affect our financial condition and results of operations.
As a public company, we may become subject to the Section 404 of the Sarbanes-Oxley Act, or SOX 404, which requires that we include a report from management on the effectiveness of our internal control over financial reporting in our annual report on Form 10-K and in our quarterly report on Form 10-Q if we are qualified as an accelerated filer.
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We are currently a “smaller reporting company”, meaning that we are not an investment company, an asset- backed issuer, or a majority-owned subsidiary of a parent company that is not a smaller reporting company and annual revenues of less than $50.0 million during the most recently completed fiscal year. In the event that we are still considered a “smaller reporting company,” at such time as we cease being an “emerging growth company,” we will be required to provide additional disclosure in our SEC filings. However, similar to an “emerging growth companies”, “smaller reporting companies” are able to provide simplified executive compensation disclosures in their filings; are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting; and have certain other decreased disclosure obligations in their SEC filings, including, among other things, only being required to provide two years of audited financial statements in annual reports. Decreased disclosures in our SEC filings due to our status as a “smaller reporting company” may make it harder for investors to analyze our results of operations and financial prospects.
Our independent registered public accounting firm may be required to attest to and report on the effectiveness of our internal control over financial reporting. Our management may conclude that our internal control over financial reporting is not effective. Moreover, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue a report that is qualified if it is not satisfied with our internal controls or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us. In addition, after we become a public company, our reporting obligations may place a significant strain on our management, operational and financial resources and systems for the foreseeable future. We may be unable to timely complete our evaluation testing and any required remediation.
During the course of documenting and testing our internal control procedures, in order to satisfy the requirements of SOX 404, we may identify other weaknesses and deficiencies in our internal control over financial reporting. In addition, if we fail to maintain the adequacy of our internal control over financial reporting, as these standards are modified, supplemented or amended from time to time, we may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with SOX 404. If we fail to achieve and maintain an effective internal control environment, we could suffer material misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information. This could in turn limit our access to capital markets, harm our results of operations, and lead to a decline in the trading price of our shares. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions. We may also be required to restate our financial statements from prior periods.
Fluctuations in foreign currency exchange rates could have a material adverse effect on our financial results.
We earn revenues, pay expenses, own assets and incur liabilities in countries using Malaysian Ringgit (“RM”) other than the U.S. dollar (“$”). Since our consolidated financial statements are presented in U.S. dollars, we must translate revenues, income and expenses, as well as assets and liabilities, into U.S. dollars at exchange rates in effect during or at the end of each reporting period. Therefore, increases or decreases in the value of the U.S. dollar against Malaysian currency affect our net operating revenues, operating income and the value of balance sheet items denominated in foreign currencies. We cannot assure you that fluctuations in foreign currencies exchange rates, particularly the strengthening or weakening of the U.S. dollar against Malaysian currency would not materially affect our financial results.
Risk Related to MRNA Scientific’s Business and Industry
Exponential growth in biotechnology.
Biotechnology is a rapidly changing field that continues to transform both in scope and impact. Well-funded established molecular labs are gathering big data on health records, genomics, lifestyle information that led to new health solutions. Digitization is revolutionizing health care, allowing for patient reported symptoms, health outcome to be captured as mineable data. MRNA Scientific could lose out to its competitors’ exponential growth if we are unable to establish distribution networks with medical centers, pharmaceutical groups and other molecular laboratories synergistically in sharing customers and big data.
MRNA Scientific’s inability to manage growth could harm its business.
MRNA Scientific expects to continue to add personnel in the areas of sales and marketing, research & development, laboratory operations, finance, quality assurance and compliance. As MRNA Scientific builds its commercialization efforts and expands research and development activities, operating expenses and capital requirements will increase, and MRNA Scientific expects that they will continue to increase, significantly. MRNA Scientific’s ability to manage its growth effectively requires us to forecast expenses accurately, and to properly forecast and expand operational and testing facilities, if necessary, to expend funds to improve our operational, financial and management controls, reporting systems and procedures. As MRNA Scientific moves forward in marketing our tests and developing our test portfolio, the company will also need to effectively manage its growing manufacturing, laboratory operations and sales and marketing needs. If MRNA Scientific is unable to manage its anticipated growth effectively, MRNA Scientific’s future business could be harmed.
MRNA Scientific’s financial prospects depend substantially upon the successful commercialization of the Company’s services and products in the future, which may fail or experience significant delays.
MRNA Scientific’s future success depends upon MRNA Scientific’s ability to continuously develop technologies and successfully market its existing cancer genetic offerings to customers within Malaysia and expand overseas. MRNA Scientific’s ability to generate significant revenue in the next several years will depend primarily on the successes of each key stage of its business, including pre-clinical research and development, clinical trials, regulatory approval, manufacture, marketing and commercialization of its services and products, which is subject to significant uncertainty. MRNA Scientific’s ability to generate sales revenue from its products and services and its future profitability depends on several factors, including its ability to:
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| · | obtain regulatory approvals and marketing authorizations for MRNA Scientific’s services and products; |
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| · | obtain market acceptance by patients, hospitals, clinicians, biopharmaceutical companies and others in the medical community; |
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| · | establish sufficient testing capacity and commercial capabilities, either by expanding MRNA Scientific’s current facility or making arrangements with third parties; |
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| · | develop and maintain MRNA Scientific’s sales network to launch and commercialize its new cancer genomic testing services and products; |
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| · | set appropriate and favorable prices for MRNA Scientific’s genomic testing services and products and obtaining adequate reimbursement from third-party payers; |
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| · | maintain commercially viable supply relationships with third parties and maintaining sufficient research and development capabilities and infrastructure; |
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| · | address any competing technological and market developments; and |
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| · | maintain, protect, and expand MRNA Scientific’s portfolio of intellectual property rights including trade secrets and know-how. |
The marketing, sale and use of MRNA Scientific’s products and services could result in substantial damages arising from products or service liability or professional liability claims, that exceed MRNA Scientific’s resources.
Due to the nature of MRNA Scientific’s business, it may face claims for products or service liability. These claims may arise from the inaccurate or erroneous diagnosis of patient information or the mix-up of patient information whereby a patient receives the wrong diagnostic information. While the company feels confident in its quality control measures to ensure the safeguard of patient and client information, it cannot provide assurances that products or service liability claims will arise in the future.
Moreover, litigation or adverse publicity resulting from these allegations could materially and adversely affect MRNA Scientific’s business, regardless of whether the allegations are valid or whether the company is liable. Currently MRNA Scientific has no products and service liability insurance coverage, and even if there was such coverage, such coverage might not be sufficient to properly protect MRNA Scientific. Further, claims of this type, whether substantiated or not, may divert MRNA Scientific’s financial and management resources from revenue generating activities and the business operation.
MRNA Scientific may face technology transfer challenges and expenses in adding new tests to its portfolio and in expanding its reach into new geographical areas.
MRNA Scientific’s plan for expanding its business includes developing and acquiring additional tests or additional biomarkers that can be transferred into its current and future diagnostic product portfolio and distributed in target markets. Due to differences in the hardware and software platforms available at different laboratories for running molecular tests, MRNA Scientific’s may need to adjust the configuration of the reagents and there may be changes to the related software in order for the tests to be performed on particular hardware platforms. Making any such adjustments could take a considerable amount of time and expense, and MRNA Scientific’s might not will succeed in running its tests on the hardware and software that it may encounter in different laboratories. To manage this issue, MRNA Scientific’s may license or acquire additional instruments and software from another company that will be compatible with its tests. This may include additional licenses and license fees needed for reagents or components required hereto as well.
MRNA Scientific’s biomarkers have not undergone clinical trials.
As there are no governmental regulations that materially restrict our screening business in Malaysia, MRNA Scientific has not conducted clinical trials on its biomarkers. While MRNA Scientific believes that its tests help detect the potential risk of different diseases, the specificity and sensitivity of those tests have not been determined in clinical trials let alone those that meet the scope or standards of clinical trials that would satisfy regulators in the United States or the European Union. If MRNA Scientific were to conduct such clinical trials, the results might prove to be less successful than we anticipate, and such tests might not be approved for sale in markets that require such clinical trials.
MRNA Scientific currently receives and expects to continue to receive a significant portion of its revenues from its genomic screening products, and if its efforts to further increase the use and adoption of these products fail, its business will be harmed.
MRNA Scientific currently receives and expects to continue to receive a significant portion of its revenues from its screening tests. MRNA Scientific undertakes efforts to increase the awareness and adoption of its tests among laboratories, clinics, clinicians, physicians, payors, and patients in new markets. Continued and additional market acceptance and its ability to attract new customers are key elements to its future success.
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MRNA Scientific’s ability to increase sales of its services and establish greater levels of adoption and reimbursement for its tests is uncertain for many reasons, including, among others:
| · | MRNA Scientific may be unable to demonstrate to laboratories, clinics, clinicians, physicians, payors, and patients that its services are superior to alternatives with respect to value, convenience, specificity, sensitivity, scope of coverage, and other factors; |
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| · | third-party coverage and reimbursement are currently primarily limited to high-risk pregnancies and may not gain acceptance for use in the average-risk pregnancy population or for the screening of microdeletions, limiting the overall addressable market; |
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| · | third-party payors may set the amounts of reimbursement at prices that reduce its profit margins or do not allow us to cover its expenses; |
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| · | MRNA Scientific may not be able to maintain and grow effective sales and marketing capabilities; |
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| · | its sales and marketing efforts may fail to effectively reach customers or communicate the benefits of its services; |
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| · | superior alternatives to its services may be developed and commercialized; |
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| · | MRNA Scientific may experience supply constraints, including due to the failure of its key suppliers to provide required sequencing instruments and reagents; |
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| · | regulatory or legislative bodies may adopt new regulations or policies or take other actions that impose significant restrictions on its ability to market its services. |
If the market and its market share for its genomic products fail to grow or grow more slowly than expected, its business, operating results, and financial condition would be adversely affected.
MRNA Scientific’s success depends on their ability to improve and enhance its current tests and new test candidates, which is complex and costly, and the results are uncertain.
Effective execution of research and development activities and the timely introduction of enhanced, improved, or new tests and test candidates to the market are important elements of MRNA Scientific’s business strategy. For example, MRNA Scientific is currently collaborating with the National Heart Institute in Malaysia to identify genomic signatures in acute myocardial infarctions. However, the development of enhanced, improved, or new heart attack risks is complex, costly, and uncertain and requires us to, among other factors, accurately anticipate patients’, clinicians’, and payors’ needs, and emerging technology trends.
In the development of enhanced, improved, or new test and test candidates, we can provide no assurance that:
MRNA Scientific will develop any tests that meet its desired target product profile and address the relevant clinical need or commercial opportunity;
| · | any tests that MRNA Scientific develop will prove to be effective in clinical trials, platform validations, or otherwise; |
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| · | MRNA Scientific will obtain necessary regulatory authorizations, in a timely manner or at all; |
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| · | any tests that MRNA Scientific develop will be successfully marketed to and ordered by healthcare providers; |
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| · | any tests that MRNA Scientific develop will be produced at an acceptable cost and with appropriate quality; |
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| · | its current or future competitors will not introduce tests similar to ours that have superior performance, lower prices, or other characteristics that cause healthcare providers to recommend, and consumers to choose, such competitive tests over ours; or |
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| · | third parties do not or will not hold patents in any key jurisdictions that would be infringed by its tests. |
These and other factors beyond MRNA Scientific’s control could delay its launch of enhanced, improved, or new test and test candidates.
The research and development process in the biotechnology industry generally requires a significant amount of time from the research and design stage through commercialization. The launch of such new test requires the completion of certain clinical development and/or assay validations in the commercial laboratory. This process is conducted in various stages, and each stage presents the risk that MRNA Scientific will not achieve its goals and will not be able to complete clinical development for any planned test in a timely manner. Such development and/or validation failures could prevent or significantly delay its ability to obtain FDA clearance or approval as may be necessary or desired, obtain approval by entities that provide oversight over laboratory diagnostic tests in the localities MRNA Scientific operate in, or launch any of its planned tests and test candidates. At times, it may be necessary for us to abandon a product in which MRNA Scientific has invested substantial resources. Without the timely introduction of new test candidates and improvements or enhancements of its current tests, its tests may become obsolete over time and its competitors may develop tests that are more competitive, in which case its business, operating results, and financial condition will be harmed.
MRNA Scientific faces challenges from the evolving regulatory environment and increasing public awareness on privacy, personal data protection and cybersecurity. Actual or alleged failure to comply with privacy, cybersecurity and data protection-related laws and regulations could adversely affect MRNA Scientific’s business and reputation.
MRNA Scientific face risks inherent in handling large volumes of data and in protecting the security of such data, including cyber attacks. In particular, MRNA Scientific face a number of challenges relating to data inter-connected with regional labs, including:
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| · | protecting the data in and hosted on MRNA Scientific’s system, including against hacking on MRNA Scientific’s system by outside parties or its employees; |
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| · | addressing concerns related to privacy and sharing, safety, security and others; |
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| · | complying with applicable laws, rules and regulations relating to the collection, use, disclosure of personal information, including any requests from regulatory and government authorities relating to such data; |
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| · | Any system failure or security breach or lapse that results in the release of user data could harm MRNA Scientific’s reputation and brand and, consequently, MRNA Scientific’s business, in addition to exposing us to potential legal liability. |
As our operations expand, it may be subject to these laws in other jurisdictions where its customers and other participants are located. The laws, rules and regulations of other jurisdictions may impose more stringent or conflicting requirements and penalties than those in Malaysia, compliance with which could require significant resources and costs. MRNA Scientific’s privacy policies and practices concerning the collection, use and disclosure of user data are posted on its websites. Any failure, or perceived failure, by us to comply with MRNA Scientific’s posted privacy policies or with any regulatory requirements or privacy protection-related laws, rules and regulations could result in proceedings or actions against us by authorities or others. These proceedings or actions may subject us to significant penalties and negative publicity, require MRNA Scientific to change its business practices, increase its costs and severely disrupt its business.
MRNA Scientific’s software is highly complex and may contain undetected errors.
MRNA Scientific’s proprietary software underlying its diagnosis is highly complex and may contain undetected errors or vulnerabilities, some of which may only be discovered after a diagnosis. This may result in an inaccurate diagnosis which could expose us to substantial liability due to the misdiagnosis. Any errors or vulnerabilities discovered in MRNA Scientific’ software could result in damage to our reputation, loss of clients, loss of revenue or liability for damages, any of which could adversely affect our growth prospects and our business.
MRNA Scientific’s use of “open source” software could subject its proprietary software to general release, adversely affect its ability to sell its tests and subject the company to possible litigation.
A portion of the screenings by MRNA Scientific incorporate so-called “open-source” software and MRNA Scientific may incorporate open-source software into other tests and technologies in the future. Such open-source software generally is licensed by its authors or other third parties under open-source licenses. Some open-source licenses may contain certain unfavorable conditions, such as requirements that MRNA Scientific disclose source code for modifications or derivative works that the company makes to the open-source software and that the company license such modifications or derivative works to third parties at no cost or under the terms of the particular open-source license. MRNA Scientific monitors its use of open-source software in an effort to avoid uses in a manner that would require it to disclose or grant licenses under its proprietary source code; however, there can be no assurance that such efforts will be successful. Open-source license terms are often ambiguous and such use could inadvertently occur. There is little legal precedent governing the interpretation of many of the terms of these licenses, and the potential impact of these terms on our business may result in unanticipated obligations regarding our technologies. If an author or other third party that distributes such open-source software were to allege that MRNA Scientific had not complied with the conditions of an open-source license, the company could incur significant legal costs defending itself against such allegations. In the event such claims were successful, MRNA Scientific could be subject to significant damages or be enjoined from the distribution of the infringing product. These risks could be difficult to eliminate or manage, and, if not addressed, could harm our business, financial condition and results of operations.
MRNA Scientific currently only uses open-source software for Covid- 19, HPV, HIV, and Dengue screenings. For screening process on cancers, inflammatory diseases and osteoarthritis, MRNA Scientific uses company proprietary algorithm software for data analysis and interpretation established by Co-founder Professor CC Liew.
MRNA Scientific may face competition from other biotechnology competitors and its operating results will suffer if MRNA Scientific fail to compete effectively.
MRNA Scientific competes with companies worldwide that specialize in RNA blood analysis to detect disease. Laboratories in universities and research institutions that are attempting to extend their research from DNA into RNA screening could become competitors if they succeed. Many of MRNA Scientific’ competitors and potential competitors may have stronger financial resources than the company. Their discovery and development of novel protocols could make MRNA Scientific’s screening obsolete. As a result of these factors, MRNA Scientific’s competitors may succeed in obtaining patent protection and/or FDA approval or discovering, developing and commercializing screening process for cancer, inflammation, osteoarthritis and many more indications.
In addition, smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large, established companies. In addition, many universities and private and public research institutes may become active in MRNA Scientific’s target disease areas.
If MRNA Scientific’s competitors market products that are more effective, safer or less expensive or that reach the market sooner than MRNA Scientific’s future tests, if any, the Company may not achieve commercial success. In addition, because of MRNA Scientific’s limited resources, it may be difficult for us to stay abreast of the rapid changes in each technology. If MRNA Scientific fails to stay at the forefront of technological change, MRNA Scientific may be unable to compete effectively. Technological advances or products developed by MRNA Scientific’s competitors may render MRNA Scientific’s technologies or test candidates obsolete, less competitive or not economical.
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Cyber breaches, loss of data, and other disruptions could compromise sensitive information related to MRNA Scientific’s business or prevent us from accessing critical information and expose us to liability, which could adversely affect MRNA Scientific’s business and its reputation.
In the ordinary course of MRNA Scientific’s business, MRNA Scientific collects and stores sensitive data, including protected health information, personally identifiable information, financial information, intellectual property, and proprietary business information owned or controlled by the company or its customers, payers, and other parties. MRNA Scientific manages and maintains its applications and data utilizing a combination of on-site systems and cloud-based data centers. The company utilizes external security and infrastructure vendors to manage parts of its data centers. MRNA Scientific also communicates sensitive data, including patient data, electronically, and through relationships with multiple third-party vendors and their subcontractors. These applications and data encompass a wide variety of business-critical information, including research and development information, patient data, commercial information, and business and financial information. MRNA Scientific faces a number of risks relative to protecting this critical information stemming from cyber attacks, including loss of access risk, inappropriate use or disclosure, inappropriate modification, and the risk of the company being unable to adequately monitor, audit, and modify its controls over critical information. This risk extends to the third-party vendors and subcontractors MRNA Scientific uses to manage this sensitive data.
The secure processing, storage, maintenance, and transmission of this critical information are vital to MRNA Scientific’s operations and business strategy, and MRNA Scientific devote significant resources to protecting such information. Although MRNA Scientific takes measures to protect sensitive data from unauthorized access, use or disclosure, MRNA Scientific’s information technology and infrastructure may be vulnerable to cyber attacks by hackers or viruses or breached due to employee error, malfeasance, or other malicious or inadvertent disruptions. In addition, while MRNA Scientific has implemented security measures and a formal, dedicated enterprise security program to prevent unauthorized access to patient data, such data is currently accessible through multiple channels, and there is no guarantee MRNA Scientific can protect its data from breach. Unauthorized access, loss, or dissemination could also result in delays of MRNA Scientific’s services and tests development and commercialization as well as damage MRNA Scientific’s reputation, including MRNA Scientific’s ability to conduct its analysis, deliver test results, process claims and appeals, provide customer assistance, conduct research and development activities, collect, process, and prepare company financial information, provide information about MRNA Scientific’s tests and other patient and physician education and outreach efforts through its website, and manage the administrative aspects of its business.
Any such unauthorized access, loss, or dissemination of information could also result in legal claims or proceedings, liabilities under Malaysian laws and regulations in relation to the protection of personal information and cybersecurity as well as those specifically governing patient and medical data. MRNA Scientific shall establish, maintain and execute internal systems to safeguard relevant personal healthcare data. Any failure to comply with above-mentioned regulation would result in administrative liabilities including but not limited to informed criticism.
MRNA Scientific plans to expand its tests and services to multiple countries exposes us to risks associated with doing business outside of Malaysia. The expansion may not be successful, which could limit MRNA Scientific’s ability to grow its revenue, net income, and profitability.
As MRNA Scientific plans to set up RNA screening labs operations in Indonesia, Middle East, USA, China and Germany, if approved, its businesses are subject to risks associated with doing business outside Malaysia including an increase in the Company’s expenses, diversion of the Company’s management’s attention from the research and development of additional diseases/disorders risk detection or forgoing profitable licensing opportunities in these economies.
Accordingly, the Company’s business and financial results in the future could be adversely affected due to a variety of factors including the risks associated with expanding into markets in which the Company has limited or no experience and in which the company may be less well-known. The Company may be unable to attract a sufficient number of customers and other participants, fail to anticipate competitive conditions or face difficulties in operating effectively in these new markets. The expansion of the Company’s cross-border business will also expose us to risks relating to staffing and managing cross-border operations, increased costs to protect intellectual property, tariffs and other trade barriers, differing and potentially adverse tax consequences, increased and conflicting regulatory compliance requirements, lack of acceptance of the Company’s product and service offerings, challenges caused by distance, language and cultural differences, exchange rate risk and political instability. Accordingly, any efforts the Company make to expand its cross-border operations may not be successful, which could limit the Company’s ability to grow its revenue, net income and profitability.
Risk Related to Chemrex’s Business and Industry
The chemical raw material industry is cyclical and both recessions and prolonged periods of slow economic growth could have an adverse effect on Chemrex’s business.
Demand for most of Chemrex’s products is cyclical in nature and sensitive to general economic conditions. Chemrex’s business supports cyclical industries such as the construction, energy, appliance and medical devices. As a result, downturns in the Malaysian economy, the global economy or any of these industries could materially adversely affect Chemrex’s results of operations, financial condition and cash flows. Despite the Global Economy currently experiencing instability and a potential downturn, we are confident that Chemrex can do better in 2024 with increased marketing and portfolio development made possible by the additional investment capital from our Initial Public Offering. Recently, the Prime Minister of Malaysia, along with the appropriate Ministries have announced hundreds of billions of Ringgit Malaysia (RM) in foreign investment, including the areas of high-tech materials and composites such as those which Chemrex specialises in, and we expect that this will have a positive boost on the potential for revenue generation for Chemrex. The boosts in the tourism and public transportation industry will push up the FRP material usage for industrial needs. Nonetheless, even with this economic recovery, challenges from ongoing uncertainties, both in Malaysia and in other regions of the world, remain. We are seeing recoveries in various sectors since the post-pandemic lows.
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We are unable to predict the duration of current economic conditions. Future economic downturns, prolonged slow growth or stagnation in the economy, or a sector-specific slowdown in one of its key end-use markets, such as non-residential construction, could materially adversely affect Chemrex’s business, results of operations, financial condition and cash flows, especially considering the capital-intensive nature of Chemrex’s business.
The results of Chemrex’s operations are sensitive to volatility in the cost of raw materials, particularly fibre reinforced plastics.
Chemrex, as a reseller, relies on outside vendors to supply us with raw materials, including fibre reinforced plastics. Chemrex purchases most of its primary raw material, from numerous other sources located throughout Malaysia and internationally.
Prices of these chemical raw materials are volatile and are influenced by export changes in response to demands of Chemrex’s global competitors and customers, as well as currency fluctuations. At any given time, Chemrex may be unable to obtain an adequate supply of these chemical raw materials with price and other terms acceptable to us. The availability and prices of raw materials may also be negatively affected by new laws and regulations, allocation by suppliers, interruptions in production, accidents or natural disasters, changes in exchange rates, worldwide price fluctuations, and the availability and cost of transportation.
If Chemrex’s suppliers increase the prices of its chemical raw materials, Chemrex may not have alternative sources of supply. In addition, to the extent that Chemrex has quoted prices to its customers and accepted customer orders for its products prior to purchasing necessary raw materials, it may be unable to raise the price of its products to cover all or part of the increased cost of the materials. Also, if Chemrex are unable to obtain adequate and timely deliveries of its chemical raw materials, it may be unable to timely deliver orders of its products. This could cause Chemrex to lose sales, incur additional costs or suffer harm to its reputation.
Disruptions in the supply of chemicals that we distribute or in the operations of our customers could adversely affect our business.
Our business depends on access to adequate supplies of the chemicals that our customers purchase from us. From time to time, we may be unable to access adequate quantities of certain chemicals because of supply disruptions due to natural disasters (including hurricanes and other extreme weather), industrial accidents, scheduled production outages, high demand leading to allocation, port closures and other transportation disruptions and other circumstances beyond our control, or we may be unable to purchase chemicals that we are obligated to deliver to our customers at prices that enable us to earn a profit. In addition, unpredictable events may have a significant impact on the industries in which many of our customers operate, reducing demand for products that we normally distribute in significant volumes.
Significant changes in the business strategies of our suppliers could also disrupt our supply. Large chemicals manufacturers may elect to distribute certain products (or products in certain regions) directly to end user customers, instead of relying on independent distributors such as us. While we do not believe that our results depend materially on access to any individual producer’s products, a reversal of the trend toward more outsourced distribution of chemicals would likely result in increasing margin pressure or products becoming unavailable to us. Any of these developments could have a material adverse effect on our business, financial condition, and results of operations.
We have oral contracts with suppliers and customers, which are generally terminable upon notice, and the termination of our relationships with suppliers and customers contracts could negatively affect our business.
Our purchases and sales of chemicals are typically made pursuant to verbal purchase orders rather than written contracts. Many of our contracts with both customers and suppliers are terminable without cause to us from the supplier or customer. Our business relationships and reputation may suffer if we are unable to meet our delivery obligations to customers which may occur because many of our suppliers are not subject to contracts or can terminate contracts on short notice. In addition, renegotiation of purchase or sales terms to our disadvantage could reduce our sales margins. Any of these developments could adversely affect our business, financial condition, and results of operations.
We may lose customers and suffer damage to our reputation if we are unable to meet customer demand for a particular product.
We face the risk of dissatisfied customers and damage to our reputation if we cannot meet customer demand for a particular chemical because we are short on inventories. In addition, particularly in cases of pronounced cyclicality in the end market, it can be difficult to anticipate our customers’ requirements for particular chemicals, and we could be asked to deliver larger-than-expected quantities of a particular chemical on short notice. If for any reason we experience widespread, systemic difficulties in filling customer orders, our customers may be dissatisfied and discontinue their relationship with us or we may be required to pay a higher price to obtain the needed chemical on short notice, thereby adversely affecting our margins.
We may be exposed to product returns and product liability claims and latent defect liability claims.
Our FRP and other raw materials are used to produce a wide variety of goods including handrails, bench tops, automotive and aero parts, cleanroom panels, and covers for various instruments used in manufacturing. We are exposed to potential product returns and latent defect liability claims from our customers and the end-users of goods and products. Although we have put in place stringent quality control measures, including the setting up of different teams for incoming quality control, quality control and quality assurance which monitor the quality of the raw material, semi-finished products as well as finished products, there may be undetected flaws or manufacturing defects or other irregularities that may be subsequently detected at any point in the life of our products. We have adopted return policy on products with manufacturing defects to accommodate our customers. If after any checkup or analysis by our laboratory the defect of a product is found to be manufacturing defect, return and replacement of products will be made. Therefore, if undetected flaws or manufacturing defects or other irregularities from either the design or manufacture of our products are to occur, additional costs and expenses which we may not recoup may incur, and our revenue and costs control can be negatively impacted.
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In addition, if our defective or sub-standard products cause bodily injuries or property damage, our suppliers may face latent defect liability claims from our customers or the end-users of goods and products made with our products and regardless of the merits or the outcome of these claims, we may be required to address and, if necessary, and divert management attention and other resources from our business and operations. We may also face adverse publicity associated with such claims, which could have an adverse effect on our business, results of operations and financial condition.
Risks Related to Our Operations
Our officers and directors may in future have outside business activities. As a result, there may be potential conflicts of interest and negatively impact the amount of time they will be able to dedicate to the company.
Currently our officers, who are also directors, have been working on promoting business for the Company. A potential conflict of interest may arise in the future that may cause our business to fail, including conflicts of interest in allocating their time to the company and their other business interests. While the company’s officers have verbally agreed to devote sufficient time and attention to the affairs of the Company, it has no written arrangement with our officers regarding this matter. As a result, we may face conflicts between business decisions that they may have to make regarding its operations and that of their other business interests.
We may not be able to attract and retain key senior management members and research and development personnel.
Our future success depends upon the continuing services of members of our senior management team and key research and development personnel and consultants. Although we typically require our key personnel to enter into non-compete and confidentiality agreement with us, we cannot prevent former personnel from joining the Company’s competitors after the non-compete period. The loss of their services could adversely impact its ability to achieve its business objectives. If one or more of our senior management or key clinical and scientific personnel are unable or unwilling to continue in their present positions or joins a competitor or forms a competing company, the company may not be able to replace them in a timely manner or at all, which will have a material and adverse effect on its business, financial condition, and results of operations.
In addition, the continued growth of our business depends on our ability to hire additional qualified personnel with expertise in molecular biology, chemistry, biological information processing, software, engineering, sales, marketing, and technical support. We compete for qualified management and scientific personnel with other life science and technology companies, universities, and research institutions in Malaysia and overseas. Competition for these individuals is intense, and the turnover rate can be high. Failure to attract and retain management and scientific and engineering personnel could prevent the Company from pursuing collaborations or developing its services and products or technologies.
We may be unable to protect the company’s intellectual property adequately.
Our software intellectual property is an essential asset of its business. To establish and protect our intellectual property rights, we rely primarily upon trade secrets, and to a lesser extent, contractual provisions with current and future employees. As a result, our efforts to protect our intellectual property may not be sufficient or effective. If these measures do not protect our intellectual property rights adequately, third parties could use the Company’s technology, and our ability to compete in the market would be reduced significantly.
In addition, we may not be effective in policing unauthorized use of the company’s intellectual property. Even if we do detect violations, we may need to engage in litigation to enforce our intellectual property rights. Any enforcement efforts we undertake, including litigation, could be time-consuming and expensive and could divert our management’s attention. In addition, our efforts may be met with defenses and counterclaims challenging the validity and enforceability of our intellectual property rights or may result in a court determining that our intellectual property rights are unenforceable. If we are unable to cost-effectively protect our intellectual property rights, then our business could be harmed.
We may be subject to intellectual property claims, which are extremely costly to defend, could require us to pay significant damages and could limit the company’s ability to use certain technologies in the future.
Companies in bio-medical or bio-technology industries are frequently subject to litigation based on allegations of infringement or other violations of intellectual property rights. To the extent we gain greater public recognition, we may face a higher risk of being the subject of intellectual property claims. Third-party intellectual property rights may cover significant aspects of our technologies or business methods or block us from expanding our offerings. Any intellectual property claims against us, with or without merit, could be time consuming and expensive to settle or litigate and could divert the attention of our management. Litigation regarding intellectual property rights is inherently uncertain due to the complex issues involved, and the company may not be successful in defending itself in such matters.
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In addition, some of our competitors have extensive portfolios of issued patents. Many potential litigants, including some of our competitors and patent holding companies, have the ability to dedicate substantial resources to enforcing their intellectual property rights. Any claims successfully brought against us could subject us to significant liability for damages and we may be required to stop using technology or other intellectual property alleged to be in violation of a third party’s rights. We also might be required to seek a license for third-party intellectual property. Even if a license is available, we could be required to pay significant royalties or submit to unreasonable terms, which would increase our operating expenses. We may also be required to develop alternative non-infringing technology, which could require significant time and expense. If we cannot license or develop technology for any allegedly infringing aspect of our business, we would be forced to limit our service and may be unable to compete effectively. Any of these results could harm our business.
Risk related to Nasdaq compliance due to board changes.
In 2024, the Company experienced changes in its Board composition, including the resignation of two directors and the appointment of one new independent director. While the Company has taken steps to maintain compliance with Nasdaq’s corporate governance requirements, including reconstituting its committees, there is a risk that future turnover or timing delays in appointments could lead to non-compliance with Nasdaq Listing Rule 5605. Such non-compliance could adversely affect the Company’s continued listing status.
Audit Committee investigation may result in material adjustments or restatements.
We may be required to restate our financial statements or make material adjustments due to ongoing investigations into past governance failures at our Chemrex subsidiary.
Our Audit Committee is actively investigating several historical transactions undertaken including related party transactions, unauthorized remuneration increases. If these investigations reveal breaches of financial controls, policy noncompliance, or accounting errors, we may be required to restate our financial statements, record impairments, or disclose material weaknesses in internal control over financial reporting. Such actions could adversely affect investor confidence, our stock price, and our ability to raise capital.
Internal control deficiencies may persist despite remediation efforts.
Our internal controls over financial reporting may remain deficient due to legacy governance gaps and evolving compliance frameworks.
Specifically, the Company has experienced governance breakdowns, particularly at the subsidiary level, relating to approval processes, documentation, and internal oversight. While management and the Audit Committee have undertaken remediation efforts, including committee reconstitution and internal reviews, these measures may not be sufficient to prevent similar issues from recurring. If we are unable to design and maintain effective internal controls, we may be subject to regulatory scrutiny, reputational damage, or legal liability.
We may face shareholder rejection of unratified transactions.
As stated in Item 1, Recent Events, “D – Chemrex Governance” above, certain Chremrex transactions were undertaken in fiscal year 2024 by Chemrex management which required shareholder approval. These transactions will be presented for ratification at an upcoming Chemrex shareholder meeting which will occur later in 2025. Failure to resolve these issues at the shareholder meeting could result in negative governance consequences.
As part of ongoing corporate governance reforms authorised by the Audit Committee, including the appointment of an Internal Auditor, the Audit Committee has resolved to present the following matters for shareholder ratification: (i) unauthorized director remuneration increases, (ii) payments to Mr. Wong Kim Hai, and (iii) the procurement arrangement with Quote Me Sdn. Bhd. If these transactions are not ratified, the Company may be required to reverse entries, record impairments, or initiate recovery actions, all of which could negatively affect our financial condition, governance credibility, or operational continuity.
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We may pursue collaborations, in-licensing or out-license arrangements, joint ventures, strategic alliances, partnerships or other strategic investments or arrangements, which may fail to produce anticipated benefits and adversely affect the company’s operations.
We may pursue opportunities for collaboration, in-licensing, out-license, joint ventures, acquisitions of products, assets or technology, strategic alliances, or partnerships that we believe would be complementary to or promote our existing business. Proposing, negotiating and implementing these opportunities may be a lengthy and complex process. Other companies, including those with substantially greater financial, marketing, sales, technology, or other business resources, may compete with us for these opportunities or arrangements. We may not be able to identify, secure, or complete any such transactions or arrangements in a timely manner, on a cost-effective basis, on acceptable terms, or at all.
We have limited experience with respect to these business development activities. Management and integration of a licensing arrangement, collaboration, joint venture or other strategic arrangement may disrupt our current operations, decrease our profitability, result in significant expenses, or divert management resources that otherwise would be available for our existing business. We may not realize the anticipated benefits of any such transaction or arrangement.
Furthermore, partners, collaborators, or other parties to such transactions or arrangements may fail to fully perform their obligations or meet its expectations or cooperate with us satisfactorily for various reasons and subject us to potential risks, including the followings:
| · | partners, collaborators, or other parties have significant discretion in determining the efforts and resources that they will apply to a transaction or arrangement; |
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| · | partners, collaborators, or other parties could independently develop, or develop with third parties, services and products that compete directly or indirectly with its services and products; |
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| · | partners, collaborators, or other parties may stop, delay or discontinue research and development, and commercialization efforts; |
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| · | partners, collaborators, or other parties may not properly maintain or defend our intellectual property rights or may use its intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability; |
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| · | disputes may arise between us and partners, collaborators, or other parties that cause the delay or termination of the research, development or commercialization of our services and products, or that result in costly litigation or arbitration that diverts management attention and resources; |
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| · | partners, collaborators, or other parties may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable services and products; and |
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| · | partners, collaborators, or other parties may own or co-own intellectual property covering our services and products that results from our collaborations with them, and in such cases, we would not have the exclusive right to commercialize such intellectual property. |
Any such transactions or arrangements may also require actions, consents, approval, waiver, participation, or involvement of various degrees from third parties, such as regulators, government authorities, creditors, licensors or licensees, related individuals, suppliers, distributors, shareholders or other stakeholders or interested parties. There is no assurance that such third parties will be cooperative as we desire, or at all, in which case we may be unable to carry out the relevant transactions or arrangements.
Risks Related to Doing Business in the Southeast Asia Region
Changes in policies in Malaysia and other Southeast Asian countries could have a significant impact upon the company’s ability to operate profitably in Malaysia and the Southeast Asia region.
Changes in the political and economic policies of Malaysia and other governments in Southeast Asia may materially and adversely affect our business, financial condition and results of operations and may result in its inability to sustain its growth and expansion strategies. Accordingly, our financial condition and results of operations are affected to a significant extent by economic, political and legal developments in Southeast Asia region.
The Southeast Asia economy differs from the economies of most developed countries in many respects, including the extent of government involvement, level of development, growth rate, control of foreign exchange and allocation of resources. In addition, the government continues to play a significant role in regulating industry development by imposing industrial policies. The government also exercises significant control over economic growth by allocating resources, controlling payment of foreign currency-denominated obligations, setting monetary policy, regulating financial services and institutions and providing preferential treatment to particular industries or companies.
Local governments have implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures may benefit the overall economy but may also have a negative effect on us. Our financial condition and results of operation could be materially and adversely affected by government control over capital investments or changes in tax regulations that are applicable to us. In addition, the government has implemented in the past certain measures, including interest rate increases, to control the pace of economic growth. These measures may cause decreased economic activity, which in turn could lead to a reduction in demand for its services and consequently have a material adverse effect on its businesses, financial condition and results of operations.
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Developments in the social, political, regulatory and economic environment in Malaysia may have a material adverse impact on us.
Our business, prospects, financial condition and results of operations may be adversely affected by social, political, regulatory and economic developments in Malaysia. Such political and economic uncertainties include, but are not limited to, the risks of war, terrorism, nationalism, nullification of contract, changes in interest rates, imposition of capital controls and methods of taxation.
All sectors of the economy in 2023 across Malaysia saw their supply chains interrupted, demand for their products and services decline, shortages in supplies and inputs. We will emerge in a very different world compared to the one before the outbreak. All organizational functions are intended to prioritize and optimize spending or postpone tasks that will not bring value in the current environment. It created serious consequences because various businesses are facing massive losses due to their declining activities and the accompanying unpredictable future of many businesses. A substantial decrease has been observed in overall spending, which resulted in an array of estimated long-term uncertainty impacts. Consequently, many businesses and firms closed, and employees were dismissed. Towards a new recovery phase in 2023, most businesses and organizational functions were prioritizing our spending or postponing any tasks and events that do not bring any value to the current situation because even when the challenges are successfully addressed, this will not guarantee any promising future. Hence, we were alerted about the available survival strategies to sustain us throughout this unforeseen circumstance and in the future. A “new normal” indicates how we should digest the current situation and initiate a business growth pattern. Returning to the pre-pandemic business pattern will take time and depends on the government’s response to the population health and socioeconomic demands arising due to the pandemic.
Although the overall Malaysian economic environment (in which we predominantly operate) appears to be positive, there can be no assurance that this will continue to prevail in the future. Economic growth is determined by countless factors, and it is extremely difficult to predict with any level of absolute certainty.
You may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing actions in Malaysia against the company or its management based on foreign laws, and the ability of U.S. authorities to bring actions in Malaysia may also be limited.
The company’s operating subsidiaries are incorporated in Malaysia and conduct substantially all of its operations in Southeast Asia. All of our executive officers and directors reside outside the United States, and all their assets are located outside of the United States. As a result, it may be difficult or impossible for shareholders to bring an action against us or against these individuals in Malaysia in the event that you believe that your rights have been infringed under the securities laws of the United States or otherwise. Even if you are successful in bringing an action of this kind, the laws of Malaysia may render you unable to enforce a judgment against our assets or the assets of our directors and officers. There is no statutory recognition in Malaysia of judgments obtained in the United States, although the courts of Malaysia will generally recognize and enforce a non-penal judgment of a foreign court of competent jurisdiction without retrial on the merits. The rights of shareholders to take legal action against us and our directors, actions by minority shareholders and the fiduciary responsibilities of its directors are to a large extent governed by the common law of Malaysia. The common law of Malaysia is derived in part from comparatively limited judicial precedent in Malaysia as well as from English common law, which provides persuasive, but not binding, authority in a court in Malaysia. The rights of our shareholders and the fiduciary responsibilities of its directors under Malaysian law are not as clearly established as they would be under statutes or judicial precedents in the United States. Malaysia has a less developed body of securities laws than the United States and provides significantly less protection to investors. As a result, our public shareholders may have more difficulty in protecting their interests through actions against us, its management, its directors or its major shareholders than would shareholders of a corporation incorporated in a jurisdiction in the United States. In addition, to receive any form of remedy, the shareholders would have to engage Malaysian counsel regarding the process to receive any such remedy.
We are subject to foreign exchange control policies in Malaysia.
The ability of our subsidiaries to pay dividends or make other payments may be restricted by the foreign exchange control policies in the countries where they operate. For example, there are foreign exchange policies in Malaysia which support the monitoring of capital flows into and out of the country in order to preserve its financial and economic stability. The foreign exchange policies are administered by the Foreign Exchange Administration, an arm of Bank Negara Malaysia (“BNM”), the central bank of Malaysia. The foreign exchange policies monitor and regulate both residents and non-residents. Under the current Foreign Exchange Administration rules issued by BNM, non-residents are free to repatriate any amount of funds from Malaysia in foreign currency other than the currency of Israel at any time (subject to limited exceptions), including capital, divestment proceeds, profits, dividends, rental, fees and interest arising from investment in Malaysia, subject to any withholding tax. In the event BNM or any other country where we operate introduces any restrictions in the future, it may be affected in its ability to repatriate dividends or other payments from our subsidiaries in Malaysia or in such other countries. Since we rely principally on dividends and other payments from its subsidiaries for its cash requirements, any restrictions on such dividends or other payments could materially and adversely affect its liquidity, financial condition and results of operations.
Volatility in our shares price may subject us to securities litigation.
The market for our shares may have, when compared to seasoned issuers, significant price volatility and we expect that our share price may continue to be more volatile than that of a seasoned issuer for the indefinite future. In the past, plaintiffs have often initiated securities class action litigation against a company following periods of volatility in the market price of its securities. We may, in the future, be the target of similar litigation. Securities litigation could result in substantial costs and liabilities and could divert management’s attention and resources.
We may never be able to pay dividends and are unlikely to do so.
To date, we have not paid, nor do we intend to pay in the foreseeable future, dividends on our common stock, even if we become profitable. Earnings, if any, are expected to be used to advance our activities and for working capital and general corporate purposes, rather than to make distributions to stockholders. Since we are not in a financial position to pay dividends on our common stock and future dividends are not presently being contemplated, investors are advised that return on investment in our common stock is restricted to an appreciation in the share price. The potential or likelihood of an increase in share price is uncertain.
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Shareholders may be diluted significantly through our efforts to obtain financing and satisfy obligations through the issuance of securities.
Wherever possible, our board of directors will attempt to use non-cash consideration to satisfy obligations. In many instances, we believe that the non-cash consideration will consist of shares of our common stock, warrants to purchase shares of our common stock or other securities. In the future, we may issue our authorized but previously unissued equity securities, resulting in the dilution of the ownership interests of our stockholders. We are authorized to issue an aggregate of 300,000,000 shares of common stock. We may issue additional shares of common stock or other securities that are convertible into or exercisable for our common stock in connection with hiring or retaining employees, future acquisitions, future sales of our securities for capital raising purposes, or for other business purposes. The future issuance of any such additional shares of our common stock may create downward pressure on the trading price of the common stock. We expect we will need to raise additional capital in the near future to meet our working capital needs, and there can be no assurance that we will not be required to issue additional shares, warrants or other convertible securities in the future in conjunction with these capital-raising efforts, including at a price (or exercise prices) below the price you paid for your stock.
We are a “smaller reporting company,” and we cannot be certain if the reduced disclosure requirements applicable to smaller reporting companies will make our common stock less attractive to investors.
We are currently a “smaller reporting company”, meaning that we are not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent company that is not a smaller reporting company and annual revenues of less than $100 million during the most recently completed fiscal year. In the event that we are still considered a “smaller reporting company,” at such time as we cease being an “emerging growth company,” we will be required to provide additional disclosure in our SEC filings. However, similar to an “emerging growth companies”, “smaller reporting companies” are able to provide simplified executive compensation disclosures in their filings; are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting; and have certain other decreased disclosure obligations in their SEC filings, including, among other things, only being required to provide two years of audited financial statements in annual reports. Decreased disclosures in our SEC filings due to our status as a “smaller reporting company” may make it harder for investors to analyze our results of operations and financial prospects.
Item 1B. Unresolved Staff Comments.
None.
Item 1C. Cybersecurity
Risk Management and Strategy
Our cybersecurity policies, standards, processes and practices are based on applicable laws and regulations and informed by industry standards and industry-recognized practices. Our strategy to assess, identify, and manage material cybersecurity risks is focused on preserving the confidentiality, security, and availability of our information systems and data. We implement security measures and processes to identify, prevent, and mitigate cybersecurity threats and to effectively respond to cybersecurity incidents when they occur. Our cyber risk management includes: (1) enterprise risk management to identify top cybersecurity risks; (2) vulnerability management to identify software vulnerabilities and risks related to compute infrastructure; (3) vendor risk management to identify risks related to third parties and business partners; (4) privacy risk management to identify privacy risks in our product and platforms and ensure regulatory compliance; and (5) security incident response to investigate, respond to, and mitigate cyber threats. As needed, we will engage third parties to identify risks in our underlying software and infrastructure, to provide threat intelligence, and to assist in triaging, identifying, and responding to cyber threats.
In 2024, we did not identify any cybersecurity threats that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition. However, despite our efforts, we cannot eliminate all risks from cybersecurity threats, or provide assurances that we have not experienced undetected cybersecurity incidents.
Governance
Our Board of Directors maintains oversight of risks from cybersecurity threats. Our Chief Executive Officer is assigned oversight of cybersecurity risks. Our
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Item 2. Properties.
The corporate office for MRNA Scientific is located at Unit A-28-7, Level 28, Tower A, Menara UOA Bangsar, No.5 Jln Bangsar Utama 1, 59000 Kuala Lumpur, Malaysia. The lease commenced on June 1, 2024 and terminates on May 31, 2027, with option to extend till May 31, 2029. The space consists of 2,206 square feet with an annual rent of approximately $30,190.
We also have two laboratories. One of our laboratories is located at 4th Floor, Wisma Life Care, No. 5, Jalan Kerinchi, Bangsar South, 59200 Kuala Lumpur, Malaysia. The lease commenced on November 1, 2016 and terminates on October 31, 2023 but continues on a month to month basis. The annual rent is approximately $6,563. The other laboratory is located at Lab 353, University Science Malaysia, George Town, Penang, Malaysia. The lease commenced on December 1, 2017 and terminates on November 30, 2026. The space consists of 1,500 square feet with an annual rent of approximately $32,257.
On July 2, 2012, we purchased a 25,000 sq. ft wholesale distribution center at 4, Jalan CJ 1/6, Kawasan Perusahaan Cheras Jaya, 43200 Cheras, Selangor, Malaysia, and two investment properties for $1,395,210. The two investment properties are listed below.
| · | A 1,100 sq ft condominium located at No. B-17-03, Duet Residence, Jalan Kinrara 6, Bandar Kinrara, 47180 Puchong, Selangor, purchased on August 26, 2020; |
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| · | A 2,000 sq ft commercial building located at First floor, No. 2B Pelangi Avenue, Jalan Kelicap 42A/KU1, Klang Bandar, Diraja, 41050 Klang, Selangor purchased on September 21, 2020. |
On July 1, 2024, we entered into a lease for Lot 238 and 239, Jalan Villaraya 1/9, Kawasan Industri Villaraya, 43500 Semenyih, Selangor. The lease terminates on June 30, 2025, with an option to extend for one year. The purpose of this lease is to establish a manufacturing facility for a new high-quality color paste production line.
On January 16, 2025, we entered into a lease for the unit at No. 65, Jalan CJ4/15-1A, Taman Cheras Jaya, 43200 Cheras, Selangor. The lease terminates on January 15, 2026. The purpose of this lease is to provide housing accommodation for our warehouse staff.
Item 3. Legal Proceedings.
We are not subjected to nor engaged in any litigation, arbitration, or claim of material importance, and no litigation, arbitration, or claim of material importance is known to us to be pending or threatened by or against our Company that would have a material adverse effect on our Company's results of operations or financial condition.
Item 4. Mine Safety Disclosures.
None.
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PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
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 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 therefore received net proceeds, before expenses, of $5,290,000 from the sale of the common stock. 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.
Capital Stock
Our authorized capital stock consists of 300,000,000 shares of common stock, no par value per share, and 30,000,000 shares of preferred stock, no par value per share. As of the date of this filing, there are 1,796,597 shares of our common stock issued and outstanding that was held by 301 stockholders of record and no shares of preferred stock issued and outstanding. The shares of preferred stock are “blank check’ meaning the Company’s board of directors can issue shares of preferred stock in such series with such rights, privileges and preferences as determined from time to time by the board of directors without shareholder approval.
Proactive Nasdaq Compliance and Market Positioning
The Company prioritizes maintaining its Nasdaq Capital Market listing as central to our long-term strategic vision and shareholder value creation. During fiscal year 2024, we proactively and swiftly addressed Nasdaq's minimum bid-price compliance requirements. Our strategic actions underscore our commitment to rigorous compliance, proactive management, and stable market positioning.
Dividend Policy
The Company has not declared or paid any cash dividends on its Common Stock and does not intend to declare or pay any cash dividend in the foreseeable future. The payment of dividends, if any, is within the discretion of the board of directors and will depend on the Company’s earnings, if any, its capital requirements and financial condition and such other factors as the board of directors may consider.
Securities Authorized for Issuance under Equity Compensation Plans
The Company does not have any equity compensation plans or any individual compensation arrangements with respect to its Common Stock or Preferred Stock. The issuance of any of our Common Stock or Preferred Stock is within the discretion of our board of directors, which has the power to issue any or all of our authorized but unissued shares without stockholder approval up to the limits set by Nasdaq listing rules
Recent Sales of Unregistered Securities
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 aggregate 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.
During the quarter ended September 30, 2024, the Company issued 300,000 shares of common stock to Maxim Partners, consultants in exchange for services rendered. The stock issuances were exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, due to limited number of consultants, the shares issued were restricted securities and the consultants acquired the shares for investment.
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Issuer Purchases of Equity Securities
None
Item 6. Selected Financial Data.
As a “smaller reporting company” as defined by Rule 12b-2 of the Exchange Act, the Company is not required to provide this information.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
General
We were incorporated in the State of Wyoming on May 12, 2017 and operations of our Malaysian company began operations in July 2017. Consequently, the following discussion and analysis of the results of operations and financial condition of the Company is for fiscal years ended December 31, 2024 and December 31, 2023, respectively. This information should be read in conjunction with the consolidated financial statements and notes to the financial statements that are included elsewhere herein. The consolidated financial statements presented herein (and to which this discussion relates) reflect the results of operations of the Company and its Malaysian subsidiaries. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements. We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this report, except as required by law. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this quarterly report, which are designed to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.
Overview
During the fiscal year ended December 31, 2024, BioNexus Gene Lab Corp. ("BGLC", the “Company”, “we”, “us” or “our”) continued to develop and refine its strategic focus across its three operational segments: healthcare diagnostics (MRNA Scientific Sdn. Bhd.), specialty chemicals (Chemrex Corporation Sdn. Bhd.), and innovation-focused ventures (including digital health and blockchain-linked financial strategies).
We successfully completed the integration of Nasdaq-listed operations following our 2023 uplisting, while maintaining a stable liquidity position and initiating expansion into the digital healthcare and decentralized asset infrastructure sectors.
Strong Liquidity Position and Clean Capital Structure
As of December 31, 2024, the Company had cash and cash equivalents of $4.37 million and total liquidity exceeding $6 million, including cash and cash equivalents and short-term liquid investments. This liquidity position, combined with minimal outstanding debt and a simplified capital structure, provides a solid foundation for operational continuity, strategic investments, and potential M&A activities. We believe our capital structure - free of preferred stock, convertible debt, or high-yield instruments - positions us favorably to pursue growth initiatives on shareholder-friendly terms.
In light of the recent governance enhancements and upcoming growth initiatives, including expansion into digital health and decentralized financial infrastructure, the Company is actively exploring additional capital-raising mechanisms. These may include at-the-market offerings, private placements, or strategic financing arrangements subject to Nasdaq and SEC compliance.
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| Table of Contents |
Strategic Positioning for Growth and Innovation
Looking ahead, the Company intends to capitalize on its clean balance sheet and low compliance cost profile to pursue selective mergers, acquisitions, and joint ventures that align with our long-term strategy. Our investments in digital healthcare, sustainable materials, and blockchain-based treasury solutions provide a forward-leaning platform for innovation. In particular, the Company’s recently adopted Ethereum-focused treasury strategy, approved by the Board in March 2025, aligns BGLC with a transformational global financial infrastructure. This strategy not only enhances capital efficiency through potential staking yield but also signals the Company’s commitment to institutional-grade innovation and regulatory alignment, especially given our Wyoming incorporation, which provides a favorable blockchain legal environment.
We believe this multi-pronged approach, centered on financial resilience, operational efficiency, and innovation, will allow the Company to deliver long-term shareholder value and act swiftly in a rapidly evolving global market.
Nasdaq Compliance Timeline & Milestones
| · | November 2023: Received initial Nasdaq compliance notice; promptly initiated proactive engagement and compliance measures. |
| · | May 2024: Successfully secured initial 180-day compliance extension, reflecting constructive Nasdaq dialogue. |
| · | November 2024: Requested Nasdaq hearing, leading to constructive panel engagement and temporary compliance extension approval. |
| · | April 2025: Implemented strategic 1-for-10 reverse stock split, proactively ensuring continued compliance and strengthening market position. |
| · | May 2025 (Anticipated): Full Nasdaq compliance achieved, reinforcing market stability and investor confidence. |
Our leadership team remains fully committed and confident in maintaining robust compliance with Nasdaq listing standards. We view compliance as fundamental to our growth strategy and market credibility. Our proactive compliance approach, prudent capital market strategies, and transparent shareholder communication reflect management's dedication to safeguarding shareholder value and company reputation.
Recent Developments
(a) Advisory Agreement.
On July 1, 2024, the Company entered into an advisory service agreement with Maxim Group LLC (“Maxim”) to provide merger and acquisition (M&A) services, general financial advisory services, and investment banking services to the Company. The Company agreed and issued 300,000 shares of our common stock to Maxim for such service. Pursuant to the agreement, Maxim agrees to return a proportionate number of the shares to the company if Maxim is in material breach of the agreement.
If at any time during the term of the agreement or within twelve months from the effective date of the termination of the agreement, the Company proposes to effect a public offering of its securities on a US exchange, private placement of securities or other financing, the Company shall offer to retain Maxim as sole book running manager of such offering, or as its exclusive placement or sales agent in connection with such financing or other matter, upon such terms as the parties may mutually agree.
(b) Strategic Investment into Ascension Innovation Sdn Bhd. by our subsidiary, MRNA Scientific Sdn. Bhd.
Pursuant to a Form 8-K filed on April 18, 2024, the Company announced a strategic investment in Ascension Innovation Sdn Bhd (AISB), a privately held Malaysian company.
(c) Notification of Delisting and Stay of Suspension.
On November 6, 2023, the Company reported that it received a letter from the Listing Qualifications Department of the Nasdaq Stock Market (“Nasdaq”) regarding the Company’s failure to comply with Nasdaq Continued Listing Rule (“Rule”) 5550(a)(2), which requires listed securities to maintain a minimum bid price of $1.00 per share. A failure to comply with Rule 5550(a)(2) exists when listed securities fail to maintain a closing bid price of at least $1.00 per share for 30 consecutive business days.
| 36 |
| Table of Contents |
Under Rule 5810(c)(3)(A), the Company automatically was provided a period of 180 calendar days, until May 6, 2024, to regain compliance.
The Company then applied to Nasdaq to receive an additional 180 calendar days to regain compliance. On August 8, 2024, the Company received notification from Nasdaq that the compliance period has been extended to November 4, 2024. If at any time during this 180-day period the closing bid price of the Company’s securities is at least $1.00 for a minimum of ten consecutive business days, the Company’s compliance will be regained.
On November 5, 2024, the Company received a notification from the Nasdaq Stock Market LLC ("Nasdaq") indicating that the Company’s common stock will be delisted from the Nasdaq Capital Market due to its failure to comply with Nasdaq Listing Rule 5550(a)(2), which requires listed securities to maintain a minimum bid price of $1 per share. The Company had been provided two consecutive 180-day grace periods, ending on November 4, 2024, to regain compliance but was unable to meet the requirement within the designated period.
In response, on November 8, 2024, the Company submitted a formal request for a hearing before a Nasdaq Hearings Panel to appeal the delisting determination. The Nasdaq Hearings Department has acknowledged receipt of the Company’s hearing request, which stays the suspension of trading of the Company’s common stock pending a decision by the Panel. The Company intends to present a compliance plan at the hearing, including potential corrective actions such as a reverse stock split, among other strategic initiatives, to regain compliance with Nasdaq’s listing standards.
On December 27, 2024, the Company received a written notice from the Nasdaq Hearings Panel (the “Panel”) indicating that the Company has been granted a temporary exception to regain compliance with Nasdaq Listing Rule 5550(a)(2), which requires a minimum bid price of $1.00 per share (the “Bid Price Rule”). The Company has until May 1, 2025, to regain compliance. As part of this compliance plan, the Company effected a reverse stock split, which became market effective on April 7, 2025, which resulted in every ten (10) shares immediately prior to the market effectiveness being consolidated into one (1) share on the market effective date. The company will have to close above the minimum bid price of $1 for a total of 10 trading days from the market effective date to regain compliance. Failure to regain compliance by May 1, 2025, will result in the delisting of the Company’s common stock from The Nasdaq Capital Market.
(d) Appointment of director, committee appointments, and appointment of officers
On November 5, 2024, the Board of Directors of the Company appointed Ms. Jook Yuen Low as an independent director to the Board, effective immediately. Ms. Low has also been assigned to serve as a member of the Audit Committee and the Nomination & Corporate Governance Committee, bringing her expertise in corporate governance, legal compliance, and audit oversight. Ms. Low will serve in her capacity until the next annual meeting of shareholders.
Ms. Low (Age 46) holds a Bachelor of Laws (LL.B) and a Master of Business in Public Relations from the Queensland University of Technology, Australia. She was called to the Bar as an Advocate & Solicitor of the High Court of Malaya in 2004. Currently, Ms. Low is a partner at the law firm Azura Mokhtar & Low. Her legal career spans over 20 years, during which she has gained substantial experience in conveyancing, corporate law, and wealth management consulting. Her expertise includes advising on property, real estate, banking transactions, and corporate agreements such as shareholders’ agreements, joint ventures, and power of attorney.
There is no arrangement or understanding between the new director and any other person pursuant to which the new director was selected to be a director of the Company.
Ms. Low will receive the standard independent director compensation set by the Compensation Committee of the Company, which is $1,000 USD per month.
Except as stated above, there is no material plan, contract or arrangement (whether or not written) to which the new director is a party or in which each party participates that is entered into or a material amendment in connection with the triggering event or any grant or award to any such covered person or modification thereto, under any such plan, contract or arrangement in connection with any such event.
Additionally, the Board has re-appointed Mr. Su-Leng Tan Lee as Secretary of the Company and has appointed him as President, effective immediately. No change has been made to his compensation package as a result of his appointments.
(e) Internal Controls Enhancement
During and subsequent to the reporting period ending September 30, 2024, as a result of recent transactions occurring at its Chemrex subsidiary, the Company focused on enhancing its internal control environment and improving governance procedures within its Chemrex subsidiary. Following the internal review of these recent transactions, management has implemented additional protocols to strengthen compliance with corporate policies and regulatory requirements, particularly concerning related-party transactions and transaction authorization at the subsidiary level.
The Company also acknowledges a recent communication from our independent auditors JP Centurion & Partners, in which the audit firm expressed concerns regarding certain aspects of Chemrex’s financial reporting and internal control structure. The Company is addressing these matters through comprehensive oversight, led by the audit committee, to ensure transparency, accuracy, and compliance in all reported information. These efforts aim to reinforce the integrity of our financial reporting and provide shareholders with reliable information on the Company’s operational and financial performance.
| 37 |
| Table of Contents |
(f) Reverse Stock Split
On March 19, 2025, the "Company held a Special Meeting of Shareholders (the "Meeting") to approve a reverse stock split of the Company’s outstanding shares of common stock, with a ratio ranging from one-for-five (1:5) to one-for-ten (1:10), with the exact ratio to be set at the discretion of the Board of Directors. After a quorum was established, the shareholders approved the Reverse Stock Split. Thereafter, on that same date, the Board of Directors set the reverse stock split ratio at 1 for 10. The Reverse Stock Split became effective on April 7, 2025.
Audit Committee Review and Governance Remediation
In 2024, our Audit Committee, composed solely of independent directors, undertook a comprehensive review of historical transactions at our wholly owned subsidiary, Chemrex Corporation Sdn. Bhd., following concerns raised about internal control procedures and board authorization. The review identified the following material items:
| · | A sale of Chemrex’s primary operating property to CCRE Composite Sdn. Bhd. was initiated without formal Board approval. This transaction has since been cancelled, and the deposit was forfeited in favor of the Company. |
| · | Transactions with Honkuk Material Sdn. Bhd., a related party, were not submitted for prior Board or Audit Committee review, although no material misstatement has been identified to date. |
| · | Director remuneration increases and payments to Mr. Wong Kim Hai were processed without documented approvals. These are scheduled to be presented to shareholders for ratification at the next Chemrex shareholder meeting. |
| · | Procurement from Quote Me Sdn. Bhd., a dissolved entity at the time of transaction, is being accepted based on auditor confirmation of assets received and management representations. |
As a result of these findings, the Board, in coordination with the Audit Committee, is implementing enhanced governance controls, updating approval workflows, and reviewing subsidiary-level delegations of authority. These steps are intended to strengthen oversight and align our corporate governance practices with Nasdaq and SEC expectations.
Cybersecurity and Digital Assets Integration
On March 5, 2025, the Company announced its new Ethereum-focused treasury strategy. This decision marks the Company as the first Nasdaq-listed company to exclusively prioritize Ethereum (ETH) as a strategic treasury asset, and is in line with recent announcements of Ethereum being included in the US “Crypto Strategic Reserve.” The Company published its “Ethereum Strategy Whitepaper” on that same date, which is available https://www.bionexusgenelab.com/ethstrategy. As part of this strategy, Company will explore Ethereum-based financial applications and innovative treasury management practices which includes external custodian evaluations and independent review of our ETH-related treasury policies. The Company also is evaluating opportunities to further integrate blockchain technology into its core technology operations. Additionally, we are assessing the potential impact of Wyoming’s stablecoin issuance framework, which could further support Ethereum’s role in the evolving digital finance landscape. Further, on March 7, 2025, we announced our strategic partnership with ML Tech to optimize the BGLC’s Ethereum-based growth strategies. ML Tech is an AI-driven wealth management platform for digital assets regulated by the National Futures Association (NFA), and is headquartered in Miami, Florida. This collaboration follows the announced Ethereum treasury strategy by BGLC, marking its commitment to technological and financial innovation.
Known Trends, Uncertainties, and Events
Looking ahead, we anticipate the following key developments will shape our operations:
| · | Full remediation of internal control deficiencies and establishment of a uniform group-level risk and compliance framework; |
|
|
|
| · | Continued expansion into digital healthcare markets, including the deployment of capital into Malaysian government co-investment projects; |
|
|
|
| · | Potential revenue acceleration through strategic alliances, mergers, or acquisitions facilitated by the Company’s investment banking advisor; |
|
|
|
| · | Active evaluation of cryptocurrency and blockchain-based financial infrastructure as a treasury diversification tool, pending completion of internal legal and compliance reviews. |
| 38 |
| Table of Contents |
Result of Operations
Exchange Rates
Translation of amounts from RM (MYR) into US$1.00 has been made at the following exchange rates for the respective years:
|
| December 31, |
|
| December 31, |
| ||
|
| 2024 |
|
| 2023 |
| ||
|
|
|
|
|
|
| ||
Year-end US$1.00: MYR exchange rate |
|
| 4.4755 |
|
|
| 4.5900 |
|
|
| January 1, |
|
| January 1, |
| ||
|
| 2024 to |
|
| 2023 to |
| ||
|
| December 31, |
|
| December 31, |
| ||
|
| 2024 |
|
| 2023 |
| ||
|
|
|
|
|
|
| ||
Yearly average US$1.00: MYR exchange rate |
|
| 4.5710 |
|
|
| 4.5658 |
|
Results of Operations for the Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 (Audited).
The following table sets forth key components of the results of operations for fiscal years ended December 31, 2024 and 2023, respectively.
The discussion following the table addresses these results.
Consolidated |
| Year ended |
| |||||
|
| December 31, (Audited) |
| |||||
|
| 2024 |
|
| 2023 |
| ||
|
|
|
|
|
|
| ||
REVENUE (including $112,556 and $106,919 of revenue from related parties for the year ended December 31, 2024 and 2023 respectively) |
| $ | 9,510,646 |
|
| $ | 9,770,806 |
|
|
|
|
|
|
|
|
|
|
COST OF REVENUE (including $297,736 and $184,433 of cost of revenue from related parties for the years ended December 31, 2024 and 2023, respectively) |
|
| (8,221,125 | ) |
|
| (8,441,308 | ) |
|
|
|
|
|
|
|
|
|
GROSS PROFIT |
|
| 1,289,521 |
|
|
| 1,329,498 |
|
|
|
|
|
|
|
|
|
|
OTHER INCOME |
|
| 2,072,473 |
|
|
| 486,036 |
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
Sales and marketing |
|
| (2,030,684 | ) |
|
| (596,858 | ) |
Research and development |
|
| (47,511 | ) |
|
| (54,982 | ) |
General and administrative |
|
| (1,973,968 | ) |
|
| (2,442,855 | ) |
Provision for expected credit losses |
|
| (883,533 | ) |
|
| (1,314,427 | ) |
TOTAL OPERATING EXPENSES |
|
| (4,935,696 | ) |
|
| (4,409,122 | ) |
|
|
|
|
|
|
|
|
|
LOSS FROM OPERATIONS |
|
| (1,573,702 | ) |
|
| (2,593,588 | ) |
|
|
|
|
|
|
|
|
|
FINANCE COSTS |
|
| (21,146 | ) |
|
| (13,929 | ) |
|
|
|
|
|
|
|
|
|
LOSS BEFORE TAX |
|
| (1,594,848 | ) |
|
| (2,607,517 | ) |
|
|
|
|
|
|
|
|
|
Tax expense: |
|
|
|
|
|
|
|
|
Deferred tax |
|
| 12,305 |
|
|
| 17,359 |
|
Income tax |
|
| (15,799 | ) |
|
| (38,885 | ) |
Tax expense |
|
| (3,494 | ) |
|
| (21,526 | ) |
|
|
|
|
|
|
|
|
|
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS |
| $ | (1,598,342 | ) |
| $ | (2,629,043 | ) |
|
|
|
|
|
|
|
|
|
Other comprehensive income/(loss): |
|
|
|
|
|
|
|
|
Foreign currency translation gain/(loss) |
|
| 122,294 |
|
|
| (268,232 | ) |
|
|
|
|
|
|
|
|
|
COMPREHENSIVE LOSS |
| $ | (1,476,048 | ) |
| $ | (2,897,275 | ) |
| 39 |
| Table of Contents |
Revenues. For the year ended December 31, 2024, we had revenues of $9,510,646 as compared to revenues of $9,770,806 for the year ended December 31, 2023, a decrease of approximately 2.7%. The 2024 revenue decrease was due to increased competition in the market, reduced selling price for resin and fiberglass mats and the lack of new projects in the Malaysian market.
Cost of Revenues. For the year ended December 31, 2024, we had cost of revenues of $8,221,125 as compared to cost of revenues of $8,441,308 for the year ended December 31, 2023, a decrease of approximately 2.6% due to lower sales caused by the above reasons.
Other Income. For the year ended December 31, 2024, we had other income of $2,072,473 as compared to other income of $486,036 for the year ended December 31, 2023, an increase of 326.4% for current year. The increase in other income for the current annual period was due primarily from Chemrex’ the reversal of expected credit losses of $1,689,412.
Operating Expenses. For the year ended December 31, 2024, we recorded operating expenses of $4,935,696, compared to $4,409,122 for the year ended December 31, 2023. This represents an increase of approximately 11.9%.
This increase was primarily driven by the following:
Sales and Marketing Expenses: For the year ended December 31, 2024, sales and marketing expenses were $2,030,684, compared to $596,585 for the year ended December 31, 2023. This represents an increase of 240.4%, mainly due to higher directors' remuneration and increased travel expenses.
Research and Development Expenses: For the year ended December 31, 2024, research and development expenses amounted to $47,511, compared to $54,982 for the year ended December 31, 2023. This represents a decrease of 13.6%, primarily due to a lab equipment malfunction which resulted in the IJN project being put on hold.
General and Administrative Expenses: For the year ended December 31, 2024, general and administrative expenses totaled $1,973,968, compared to $2,442,855 for the year ended December 31, 2023. This represents a decrease of 19.2%, mainly due to lower professional fees at the parent company level related to the Nasdaq listing in 2023, along with a reduction in share-based compensation.
Provision for Expected Credit Losses: For the year ended December 31, 2024, the provision for expected credit losses was $883,533, compared to $1,314,427 for the year ended December 31, 2023. This represents a decrease of 32.8%, primarily attributable to Chemrex.
Loss from Operations. We had a loss from operations of $1,573,702 for the year ended December 31, 2024, compared to a loss from operations of $2,593,588 for the year ended December 31, 2023, a reduction of 39.3% for the reasons discussed above.
Tax Expense. For the year ended December 31, 2024, we had the total tax expense of $3,494 due to deferred tax credit of $12,305 which offset a tax provision of $15,799. For the year ended December 31, 2023, we had the total tax expense of $21,526 due to a deferred tax credit of $17,359 which offset a tax provision of $38,885. The lower tax expenses were primarily due to lower operating profits.
| 40 |
| Table of Contents |
Foreign Currency Translation Gain/(Loss). We are exposed to fluctuations in foreign exchange rates on the revaluation of monetary assets and liabilities denominated in currencies other than the US Dollar. Therefore, any change in the relevant exchange rate will require us to recognize a transaction gain or loss on revaluation. For the annual period ended December 31, 2024, we had foreign currency translation gain of $122,294 compared with foreign currency translation loss of $268,232 for the prior annual period.
|
|
| MRNA Scientific and Chemrex Corporation |
| ||||||||||||||
|
|
| Provision for genomic screening services |
|
| Trading of industrial chemicals |
|
| Provision for genomic screening services |
|
| Trading of industrial chemicals |
| |||||
|
|
| Year ended December 31, 2024 |
|
| Year ended December 31, 2023 |
| |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
REVENUE |
|
| $ | 16,069 |
|
| $ | 9,494,577 |
|
| $ | 24,219 |
|
| $ | 9,746,587 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
COST OF REVENUE |
|
|
| (7,316 | ) |
|
| (8,213,809 | ) |
|
| (19,851 | ) |
|
| (8,421,457 | ) | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
GROSS PROFIT |
|
|
| 8,753 |
|
|
| 1,280,768 |
|
|
| 4,368 |
|
|
| 1,325,130 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
OTHER INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Dividend income |
|
|
| - |
|
|
| 68,130 |
|
|
| - |
|
|
| 61,409 |
| |
Interest income |
|
|
| 109,444 |
|
|
| 38,197 |
|
|
| 19,629 |
|
|
| 49,046 |
| |
Fair value gain on investments in equity securities |
|
|
| - |
|
|
| 69,476 |
|
|
| - |
| 306,614 |
| |||
Gain on disposal of investments in equity securities |
|
|
| - |
|
|
| 38,409 |
|
|
| - |
|
|
| 7,245 |
| |
Reversal of expected credit losses |
|
|
| - |
|
|
| 1,689,412 |
|
|
| - |
|
|
| - |
| |
Others |
|
|
| 13,507 |
|
|
| 45,898 |
|
|
| - |
|
|
| 42,093 |
| |
TOTAL OTHER INCOME |
|
|
| 122,951 |
|
|
| 1,949,522 |
|
|
| 19,629 |
|
|
| 466,407 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Sales and marketing |
|
|
| (125,299 | ) |
|
| (1,861,456 | ) |
|
| (18,884 | ) |
|
| (569,896 | ) | |
Research and development |
|
|
| (47,511 | ) |
|
| - |
|
|
| (54,982 | ) |
|
| - |
| |
General and administrative |
|
|
| (194,038 | ) |
|
| (679,321 | ) |
|
| (171,881 | ) |
|
| (134,678 | ) | |
Provision for expected credit losses |
|
|
| - |
|
|
| (883,533 | ) |
|
| - |
|
|
| (1,314,427 | ) | |
TOTAL OPERATING EXPENSES |
|
|
| (366,848 | ) |
|
| (3,424,310 | ) |
|
| (245,747 | ) |
|
| (2,019,001 | ) | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
LOSS FROM OPERATIONS |
|
|
| (235,144 | ) |
|
| (194,020 | ) |
|
| (221,750 | ) |
|
| (227,464 | ) | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
FINANCE COSTS |
|
|
| (11,795 | ) |
|
| (9,072 | ) |
|
| (5,052 | ) |
|
| (8,877 | ) | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
LOSS BEFORE TAX |
|
|
| (246,939 | ) |
|
| (203,092 | ) |
|
| (226,802 | ) |
|
| (236,341 | ) | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Tax expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Deferred tax |
|
|
| - |
|
|
| 12,305 |
|
|
| 12,269 |
|
|
| 5,090 |
| |
Income tax |
|
|
| - |
|
|
| (15,799 | ) |
|
| (2,613 | ) |
|
| (36,272 | ) | |
Total tax (expense)/credit |
|
|
| - |
|
|
| (3,494 | ) |
|
| 9,656 |
|
|
| (31,182 | ) | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS |
|
| $ | (246,939 | ) |
| $ | (206,586 | ) |
| $ | (217,146 | ) |
| $ | (267,523 | ) | |
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| Table of Contents |
Revenue. For the year ended December 31, 2024, Chemrex contributed $9,494,577 (99.8%) of total combined revenue of $9,510,646 compared to its contribution of $9,746,587 (99.8%) of total combined revenue of $9,770,806 for the year ended December 31, 2023, a decrease of 2.59% from the prior year. As mentioned above, the revenue decrease in 2024 was due to increased competition in the market, reduced selling price for resin and fiberglass mats and the lack of new projects in the Malaysian market.
MRNA Scientific had a revenue of $16,069 (0.2%) for the year ended December 31, 2024, as compared to revenues of $24,219 (0.2%) from the same period ended December 31, 2023, a decrease of 33.70%. The decrease in revenue for 2024 was due to RNA machine breakdowns of our testing process that occurred during the current year end period along with fewer client referrals from diagnostics centers.
Cost of Revenues. For the year period ended December 31, 2024, Chemrex had incurred $8,213,809 (99.9%) of the total combined cost of revenue of $8,221,125 as compared to the year ended December 31, 2023, wherein Chemrex had incurred $8,421,457 (99.8%) of the total combined cost of revenue of $8,441,308. The decrease of 2.47% in Chemrex’s cost of revenues was due to its decreased in revenues and reasons stated above.
MRNA Scientific had incurred $7,316 (0.1%) on cost of revenues for the year ended December 31, 2024, as compared to cost of revenues of $19,851 (0.2%) for the same year ended December 31, 2023. The decrease of 63.1% was due to a reduction in purchases of extraction kits, reagents, and laboratory consumables attributable to our reduced sales.
Other Income. For the year ended December 31, 2024, Chemrex contributed $1,949,522 (94.1%) of total other combined income of $2,072,473 as compared to $466,407 (96%) of total combined income of $486,036 for the year ended December 31, 2023. The increase of 317.99 % is due to dividends received from other investments, interest income, capital gains on equity investment and the reversal expected credit losses of $1,689,412.
MRNA Scientific had other income of $122,951 (4.5%) of total other combined income of $2,072,473 for the year ended December 31, 2024, as compared $19,629 (4%) of total combined income of $486.036 for the year ended December 31, 2023, an increase of 526.4% due to bank interest generated and additional of rental income.
Sales and Marketing. For the year ended December 31, 2024, Chemrex incurred $1,861,456 (91.7%) of the total combined sales and marketing expenses of $2,030,684, compared to $569,896 (95.5%) of the total combined sales and marketing expenses of $596,858 for the year ended December 31, 2023. This represents an increase of 226.6% for Chemrex in 2024, primarily due to increases in commission and directors' remuneration, including statutory employment contributions.
MRNA Scientific incurred $125,299 (6.2%) of the total combined sales and marketing expenses of $2,030,684 for the year ended December 31, 2024, compared to $18,884 (3.2%) of the total combined sales and marketing expenses of $596,858 for the year ended December 31, 2023. This represents an increase of 563.5%. The increase includes $106,415 in directors' remuneration, as well as increases in staff salaries, travel expenses for marketing, and business development.
BGLC, the parent company, incurred $43,929 (2.2%) of the total combined sales and marketing expenses of $2,030,684 for the year ended December 31, 2024, compared to $8,078 (1.4%) of the total combined sales and marketing expenses of $596,858 for the year ended December 31, 2023. This represents an increase of $35,851 or approximately 443.8% in sales and marketing expenses for the year ended December 31, 2024. The increase was due to press release costs, business entertainment, and overseas travel expenses.
Research and Development. For the year ended December 31, 2024, MRNA Scientific incurred $47,511 (100%), compared to $54,982 (100%) for the year ended December 31, 2023. This represents a decrease of $7,471, or 13.59% from the prior year. The decrease was primarily due to the absence of costs related to the BGS test, as the National Heart Institute, Malaysia (IJN) project remained on hold during the year. This was a result of ongoing repairs to the lab equipment required for the project.
General and Administrative. For the year ended December 31, 2024, Chemrex incurred $679,321 (34.4%) of the total combined general and administrative expenses of $1,973,968, compared to $134,678 (5.5%) of the total combined general and administrative expenses of $2,442,855 for the year ended December 31, 2023. The increase of 404.4% in Chemrex's general and administrative expenses for 2024 due to staff salaries, loss on realized forex, travelling fee, cost of impairment loss on investment property and contract of services cost.
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Provision for Expected Credit Losses: For the year ended December 31, 2024, Chemrex incurred $883,533 (100%), compared to $1,314,427 (100%) for the year ended December 31, 2023. The decrease of 32.8% was due to the reduction of provisions for doubtful debts, as well as a reduction in the provision for losses allowance, which amounted to $883,533 in 2024, compared to $253,817 for doubtful debts and $1,060,610 for losses allowance in 2023.
MRNA Scientific incurred $194,038 (9.8%) of the total combined general and administrative for the year ended December 31, 2024, compared to $171,881 (7%) for the year ended December 31, 2023, representing an increase of 12.89%. The increase includes $22,157 in amortization of the right-of-use asset, depreciation of fixed assets, office utilities, loss on lease terminations, and loss arising from settlement of supplier.
BGLC, the parent company, incurred $1,100,609 (55.8%) of total general and administrative for the year ended December 31, 2024 compared to $2,136,296 (87.5%) of total general and administrative for the year ended December 31, 2023. This represents a decrease of $1,035,687 or approximately 48.48%, in general and administrative costs for the year ended December 31, 2024. The decrease was due to the reduction of professional expenses related to the Company's successful listing on Nasdaq, as well as costs incurred for advisory, legal, and underwriting services which occurred in the last year of 2023 which were not repeated in the same period of 2024. The reduction also includes discontinued expenses for consultant fees, medical advisers, investor relations services, and securities underwriting
Loss Before Tax. Chemrex had a loss before tax of $203,092 (12.7%) for the year ended December 31, 2024, as compared a loss before tax of $236,341 (9.1%) for the year ended December 31, 2023, a decrease of 14.07% for the reasons discussed above. MRNA Scientific incurred a loss of $246,939(15.48%) for the year ended December 31, 2024, compared a loss of $226,802 (8.7%) for the year ended December 31, 2023, a decrease of 8.9%, for the reasons discussed above.
Income Tax Expense. Chemrex had total tax expense of $3,494 (100%) which is a deferred tax credit of $12,305(100%) offset with tax provision of $15,799 (100%) for the year ended December 31, 2024, as compared to the last year ended December 31, 2023, total tax expenses of $31,182 (144.9.%) from deferred tax credit of $5,090 (29.3%) offset with tax provision of $36,272 (93.3%)
MRNA Scientific Malaysia had no tax provision for the year ended December 31, 2024, as compared to the last year ended December 31, 2023, total tax credit of $9,656 (-44.9%) from deferred tax credit of $12,269 (70.7%) and under tax provision for prior year of $2,613 (6.7%)
LIQUIDITY AND CAPITAL RESOURCES
As of December 31, 2024, we had working capital of $5,479,146 compared with working capital of $6,415,877 as of December 31, 2023. The decrease in working capital as of December 31, 2024, from December 31, 2023, was due principally to operational losses, undertaking strategic investments, and expansion of operations in line with the Company’s overall strategic plans.
Our primary uses of cash had been for operations and strategic investments. The main sources of cash were generated from operational revenues, the private placement of our common stock, and the proceeds of our public offering. 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, |
|
|
• | Increases in advertising and marketing in order to attempt to generate more revenues, and |
|
|
• | The cost of being a public company. |
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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 year ended December 31, 2024, and 2023:
|
| Year Ended |
| |||||
|
| December 31, |
| |||||
|
| 2024 |
|
| 2023 |
| ||
|
|
|
|
|
|
| ||
Net cash used in operating activities |
| $ | (2,234,260 | ) |
| $ | (1,822,212 | ) |
Net cash generated from/(used in) investing activities |
|
| 418,202 |
|
|
| (1,794,202 | ) |
Net cash generated from financing activities |
|
| 144,975 |
|
|
| 6,274,939 |
|
Foreign currency translation adjustment |
|
| 40,339 |
|
|
| (259,679 | ) |
Net Change in Cash and Cash Equivalents |
| $ | (1,630,744 | ) |
| $ | 2,398,846 |
|
Operating Activities
During the year ended December 31, 2024, the Company incurred a net loss of $(1,598,342) which, after adjusting for amortization, depreciation, dividend income, allowances for expected credit losses of $883,533, recoveries for expected credit losses of $(1,689,412), fair value gain on investments in equity securities, gain on disposal of investments, loss arising from settlement of supplier contract dispute of $29,534, impairment loss on property, an increase in inventories, advance payment from customer, a decrease in trade and other receivables, and a substantial increase in trade payables, resulted in net cash of $(2,234,260) being used in operating activities during the period.
By comparison, during the year ended December 31, 2023, the Company incurred a net loss of $(2,629,043) which, after adjusting for amortization, depreciation, dividend income, fair value gain investments in equity securities, allowances for expected credit losses of $942,800, an increase in inventories, operating lease liabilities, a decrease in trade receivables and a substantial reduction in trade payables, advance payment from customer, resulted in net cash of $(1,822,212) being used in operating activities during the period.
Investing Activities
During the year ended December 31, 2024, the Company had net cash of $418,202 generated from investment activities from acquisition of investments in equity securities of $(492,732), purchase of plant and equipment of $(226,989), fixed deposits placed of $(78,835) cash generated from dividend income of $68,130, proceeds from disposal of investments in equity securities of $1,068,777, and refund from settlement of supplier contract dispute at $79,851.
During the year ended December 31, 2023, the Company had net cash of $(1,794,202) used in investment activities from acquisition of investments in equity securities of $(320,733), purchase of plant and equipment of $(149,398), fixed deposits placed of $(1,411,626) cash generated from dividend income of $61,409 and proceeds from disposal of investments in equity securities of $26,146.
Financing Activities
During the year ended December 31, 2024, the Company generated net cash of $144,975 from financing activities due to advances from directors of $3,975 and share-based compensation of $141,000. By comparison, during the year ended December 31, 2023, Company had net cash of $6,274,939 generated from financing 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, advances from directors of $13,199 and share-based compensation of $511,740.
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Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Not applicable to smaller reporting companies.
Item 8. Financial Statements and Supplementary Data.
Our financial statements are contained in pages F-1 through F-30, which appear at the end of this Form 10-K Annual Report.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
As of December 31, 2024, the Company’s management, with the participation of the Chief Executive Officer and Acting Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended).
Based on that evaluation, management concluded that, as of December 31, 2024, the Company’s disclosure controls and procedures were not effective due to a deficiency in internal control over financial reporting identified at the Company’s wholly owned subsidiary, Chemrex Corporation Sdn. Bhd.
The deficiency related to a lack of oversight and inadequate delegation authority over certain financial transactions, which were executed without proper Board or Audit Committee approval. These issues arose during a period in which there was a temporary governance gap surrounding the resignation of key directors, including one member of the Audit Committee. Although these unauthorized transactions did not materially impact the Company’s financial statements, the absence of proper controls in this area due to the circumstances mentioned above resulted in a breakdown in the effectiveness of the Company’s disclosure controls and procedures.
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Management’s Report on Internal Control over Financial Reporting
The Company is not required to provide an attestation report from its registered public accounting firm pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002 as it qualifies as a smaller reporting company.
Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Management conducted an assessment of the effectiveness of internal control over financial reporting as of December 31, 2024, using the criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Based on this assessment, management concluded that the Company did not maintain effective internal control over financial reporting as of December 31, 2024, due to the same significant deficiency described above.
Our independent Audit Committee swiftly identified and investigated governance irregularities at the subsidiary level, demonstrating strong oversight and proactive risk management.
Remediation Plan
In response to the identified deficiency, the Company has initiated a remediation plan that includes the following actions:
| · | Implementation of a revised delegation of authority policy at the subsidiary level; |
| · | Reconstitution and strengthening of oversight mechanisms through the Board and Audit Committee; |
| · | Review and ratification of all affected transactions by the Audit Committee; |
| · | Initiation of an internal audit of Chemrex procurement and contracting procedures; |
| · | Staff retraining on internal control and reporting policies. |
The Company expects these remediation measures to be completed during fiscal year 2025. The effectiveness of these controls will be reassessed as part of management’s ongoing internal control evaluation process.
Changes in Internal Controls over Financial Reporting
Except as described above, there were no changes in the Company’s internal control over financial reporting during the quarter ended December 31, 2024, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
Item 9B. Other Information.
None
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
None
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PART III
Item 10. Directors, Executive Officers and Corporate Governance.
Resignations and Appointments
On October 9, 2024, Mr. Koon Wai Wong and Mr. Wei Foong Lim resigned from the Board of Directors. Their resignations were not the result of any disagreement with the Company on any matter relating to its operations, policies, or practices.
On November 5, 2024, the Board of Directors of the Company appointed Ms. Jook Yuen Low as an independent director to the Board, effective immediately. Ms. Low has also been assigned to serve as a member of the Audit Committee and the Nomination & Corporate Governance Committee, bringing her expertise in corporate governance, legal compliance, and audit oversight. Ms. Low will serve in her capacity until the next annual meeting of shareholders.
Ms. Low (Age 47) holds a Bachelor of Laws (LL.B) and a Master of Business in Public Relations from the Queensland University of Technology, Australia. She was called to the Bar as an Advocate & Solicitor of the High Court of Malaya in 2004. Currently, Ms. Low is a partner at the law firm Azura Mokhtar & Low. Her legal career spans over 20 years, during which she has gained substantial experience in conveyancing, corporate law, and wealth management consulting. Her expertise includes advising on property, real estate, banking transactions, and corporate agreements such as shareholders’ agreements, joint ventures, and power of attorney.
There is no arrangement or understanding between the new director and any other person pursuant to which the new director was selected to be a director of the Company.
Ms. Low will receive the standard independent director compensation set by the Compensation Committee of the Company, which is $1,000 USD per month.
On November 5, 2024, the Board of Directors of the Company appointed Mr. Su-Leng Tan Lee as President of the Company.
On January 22, 2024, the Board appointed (i) Mr. Chee Keong Yap, Mr. Koon Wai Wong, and Mr. Muhammad Azrul bin Abdul Hamid to the Audit Committee, with Mr. Chee Keong Yap serving as the Chairman of the Audit Committee and (ii) Mr. Chee Keong Yap, and Mr. Muhammad Azrul bin Abdul Hamid to the Compensation Committee, with Mr. Muhammad Azrul bin Abdul Hamid serving as the Chairman of the Compensation Committee.
The following table set forth the name, age, and position of sole executive officers and directors. Executive officers were elected annually by our board of directors. Each executive officer held his office until he resigned, was removed by the Board, or his successor was elected and qualified. Directors were elected annually by our stockholders at the annual meeting. Each director held his office until his successor was elected and qualified or his earlier resignation or removal.
Directors; Management
Name |
| Age |
| Position |
Su-Leng Tan Lee |
| 41 |
| Chief Executive Officer, Acting Chief Financial Officer, President, and Director |
Muhammad Azrul bin Abdul Hamid |
| 50 |
| Director; Chair of the Compensation and Nominating Committees; Member of Audit Committee |
Chee Keong Yap |
| 69 |
| Director; Chair of the Audit Committee; Member of Compensation and Nominating Committees |
Jook Yuen Low |
| 47 |
| Director; Member of Audit and Nominating Committees |
There are no family relationships between any of our directors or executive officers.
To the best of our knowledge, during the past ten years, none of the following occurred with respect to a present director or executive officer of the Company: (1) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (2) any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (3) being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his or her involvement in any type of business, securities or banking activities; (4) being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated; (5) being subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree or finding relating to an alleged violation of the federal or state securities, commodities, banking or insurance laws or regulations or any settlement thereof or involvement in mail or wire fraud in connection with any business entity not subsequently reversed, suspended or vacated and (6) being subject of, or a party to, any disciplinary sanctions or orders imposed by a stock, commodities or derivatives exchange or other self-regulatory organization.
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Su-Leng Tan Lee has been the Chief Executive Officer and acting Chief Financial Officer of the Company since December 11, 2023, and was appointed President of the Company on November 5, 2024. Previously, Mr. Tan Lee was the Company’s Chief Operating Officer from August 2023 until December 11, 2023. Mr. Tan Lee has over 20 years of extensive experience in a variety of industries, including information systems, hospitality, investment management, construction, property development, travel, government liaison, and life sciences, primarily focused on commercialization, finance, and general management. From May 2022 to August 2023, Mr. Tan worked as the Chief Commercial Officer for Dryox Health Limited, a startup focused on repurposing drugs for unmet needs in the dermatological space, specifically anticholinergic drugs. From August 2017 to August 2023, Mr. Tan worked as the FLO Life Sciences Group’s owner and Managing Director, focusing on infectious diseases and oncology pre-clinical drug candidates and clinical research. From July 2018 to April 2019, Mr. Tan was the President of Avillion Berhad, a publicly listed travel and hospitality group with hotels, commercial property, and inbound/outbound travel services. The Company believes Mr. Tan is qualified to serve as the Company’s Chief Executive Officer and a member of the Board due to his extensive experience with biotech and pharmaceutical companies.
Muhammad Azrul bin Abdul Hamid has been a director of the Company since December 11, 2023. He is a member of the Audit Committee and is Chairman of the Nomination & Corporate Governance Committee, and the Compensation Committee. He has more than 20 years of experience as a lawyer in a range of matters at the Malaysian High Court and the Malaysian Court of Appeal involving IP claims, contractual matters, debt collection and tortious claims. Mr. Azrul also has experience in providing advisory services for the technology industry, providing advice on intellectual property protection and enforcement matters. Mr. Azrul has advised clients on the multiple facets of public policy and government engagement, including dealing with government agencies and local authorities in relation to business related issues for start-ups, small and medium enterprises, and multinational corporations. Mr. Azrul is a member of the Malaysian Eurocham IP Committee, Kuala Lumpur Bar Committee IT Committee, and Bar Council Cyberlaw Committee. He is a contributor and regular speaker for the South East Asia EU-SME IPR Helpdesk. The Company believes Mr. Hamid is qualified to serve as a member of the Board due to his extensive experience with legal matters.
Chee Keong Yap has been a Director of the Company since March 2022, serving as the Audit Committee Chairman, a member of the Compensation Committee, and is a Member of The Institute of Chartered Accountants of Scotland. In the past he was Managing Director & Executive Director at Niche Capital Emas Holdings Bhd and Chief Executive Officer & Executive Director at Bumiputra Merchant Bankers Bhd. Mr. Yap holds a Bachelor of Arts (First Class Honours) degree in Economics from the University of Leeds, United Kingdom (1978). He has auditing experience in England from 1978 to 1981. He has gained extensive financial experience gained from his career in merchant banking and brings his considerable experience to the role and as a result, the Company believes he is qualified to be a member of the Board.
Jook Yuen Low has been a Director of the Company since November 5, 2024 and also is a member of the Audit Committee and the Nomination & Corporate Governance Committee. She holds a Bachelor of Laws (LL.B) and a Master of Business in Public Relations from the Queensland University of Technology, Australia. She was called to the Bar as an Advocate & Solicitor of the High Court of Malaya in 2004. Currently, Ms. Low is a partner at the law firm Azura Mokhtar & Low. Her legal career spans over 20 years, during which she has gained substantial experience in conveyancing, corporate law, and wealth management consulting. Her expertise includes advising on property, real estate, banking transactions, and corporate agreements such as shareholders’ agreements, joint ventures, and power of attorney and as a result, the Company believes she is qualified to be a member of the Board.
Employment Agreements
Effective as of August 15, 2023, the Company entered into an employment agreement with Mr. Su-Leng Tan Lee. The agreement provides for an annual base salary. Mr. Tan Lee’s employment will terminate two years from the effective date of the agreement, and such term shall be automatically extended for a one-year term thereafter at the Company’s request. The agreement further provides that either party to the agreement may terminate Mr. Tan Lee’s employment upon one month’s prior written notice. Additionally, the agreement provides that Mr. Tan Lee shall not, during the term of the agreement and for 24 months after cessation of employment, carry on business in competition with the Company.
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Terms of Directors and Officers
Our officers are elected by and serve at the discretion of the board of directors and the stockholders voting by ordinary resolution.
Compensation of Directors and Executive Officers
For the year ended December 31, 2024, we paid an aggregate of approximately $572,426 respectively, in cash and benefits to our executive officers. We do not have a share incentive program to provide for grants of awards to our directors and executive officers. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our executive officers and directors. We have no service contracts with any of our directors providing for benefits upon termination of employment.
Board Committees and Director Independence
Director Independence
The Company has determined that Mr. Chee Keong Yap and Mr. Muhammad Azrul bin Abdul Hamid and Ms. Jook Yuen Low, are “independent” as defined by the Nasdaq Rule 5605(a)(2). Accordingly, a majority of our Board is “independent.”
Board Committees
Our Board has established three standing committees – Audit, Compensation, and Nominating and Corporate Governance. All standing committees operate under a charter that has been approved by our Board.
Audit Committee
Our Board of Directors has an Audit Committee, composed of Chee Keong Yap, Muhammad Azrul bin Abdul Hamid, and Ms. Jook Yuen Low. All members are independent directors as defined in accordance with Rule 10A-3 of the Exchange Act and the Nasdaq Listing Rules. Mr. Yap serves as Chairman of the committee. The Board has also reviewed their financial literacy and concluded that all Audit Committee members are “financially literate” and that Mr. Yap qualifies as the “Audit Committee Financial Expert” under Item 407(d)(5)(ii) of Regulation S-K.
Our Audit Committee oversees our corporate accounting, financial reporting practices and the audits of financial statements. For this purpose, the Audit Committee has a charter (which is reviewed annually) and performs several functions. The Audit Committee:
| · | Evaluates the independence and performance of, and assesses the qualifications of, our independent auditor and engages such independent auditor; |
|
|
|
| · | Approves the plan and fees for the annual audit, quarterly reviews, tax and other audit related services and approves in advance any non-audit service and fees therefor to be provided by the independent auditor; |
|
|
|
| · | Monitors the independence of the independent auditor and the rotation of partners of the independent auditor as required by law; |
|
|
|
| · | Reviews the financial statements to be included in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q and reviews with management and the independent auditors the results of the annual audit and reviews of our quarterly financial statements; |
|
|
|
| · | Oversees all aspects of our systems of internal accounting and financial reporting control and corporate governance functions on behalf of the Board; and |
|
|
|
| · | Provides oversight assistance in connection with legal, ethical and risk management compliance programs established by management and the Board, including compliance with requirements of Sarbanes Oxley and makes recommendations to the Board regarding corporate governance issues and policy decisions. |
Audit Committee Report
Review with Management. The Audit Committee has reviewed and discussed our audit completion report and financial statements for Fiscal Year 2024 with management.
Review and Discussions with Independent Auditors. The Audit Committee discussed with the Company’s auditor, JP Centurion & Partners PLT (the “Auditor”) the matters required to be discussed by Statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1, AU section 380), as adopted by the Public Company Accounting Oversight Board (“PCAOB”) in Rule 3200T.
The Audit Committee also received written disclosures and the letter from the Auditor required by applicable requirements of the PCAOB regarding the Auditor’s communications with the Audit Committee concerning independence and has discussed with the Auditor their independence.
Nominating and Corporate Governance Committee
Our Board of Directors has a Nominating and Corporate Governance Committee composed of Ms. Jook Yuen Low and Muhammad Azrul bin Abdul Hamid. Mr. Muhammad Azrul bin Abdul Hamid serves as the Chairman of the committee. The Nominating and Corporate Governance Committee is charged with the responsibility of reviewing our corporate governance policies and with proposing potential director nominees to the Board of Directors for consideration. The Nominating and Corporate Governance Committee has a charter which is reviewed annually. The Nominating and Corporate Governance Committee will consider director nominations made by shareholders so long as the nomination is validly made in accordance with applicable laws, rules, regulations, and the provisions of the Company’s charter documents. Any shareholder who wants to recommend a candidate for the Nominating and Corporate Governance Committee to consider nominating as a director should submit a written request and related information to our Corporate Secretary.
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In evaluating individual Board nominees, the Nominating & Corporate Governance Committee takes into account many factors, including:
| · | a general and diverse understanding of the global economy, capital markets, finance and other disciplines relevant to the success of a large publicly traded financial technology company, including cybersecurity; |
|
|
|
| · | a general understanding of the company’s business and technology; |
|
|
|
| · | a client experience orientation; |
|
|
|
| · | the requirements under the Company’s By-Laws; |
|
|
|
| · | the individual’s educational and professional background and personal accomplishments; |
|
|
|
| · | diversity, including, but not limited to, factors such as gender, ethnicity, race, sexual orientation and geography; and |
|
|
|
| · | an independent mindset |
The Nominating and Corporate Governance Committee will identify new director candidates in the event of a vacancy in the Board through internal consultation and consultation with key stakeholders and shareholders. Subsequently the candidates will be evaluated to ensure they possess these key characteristics –
| · | a commitment to long-term value creation for our stockholders; |
|
|
|
| · | an appreciation for stockholder feedback; |
|
|
|
| · | high personal and professional ethics; |
|
|
|
| · | a proven record of success; |
|
|
|
| · | sound business judgment; |
|
|
|
| · | a strategic vision and leadership experience; |
|
|
|
| · | knowledge of financial services; |
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|
|
| · | having no known history of misconduct or disrepute, especially in public or Corporate office; |
The Company does not currently pay any third parties to aid it in identifying director candidates.
All members are independent directors in accordance with the Nasdaq Listing Rules.
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Compensation Committee
Our Board of Directors also has a Compensation Committee, which reviews or recommends the compensation arrangements for our management and employees and assists the Board of Directors in reviewing and approving matters such as company benefit and insurance plans, including monitoring the performance thereof. The Compensation Committee has a charter (which is reviewed annually) and is composed of two members: Chee Keong Yap and Muhammad Azrul bin Abdul Hamid. Mr. Muhammad Azrul bin Abdul Hamid serves as chairman of this committee. All members are independent in accordance with the Nasdaq Listing Rules.
The Compensation Committee is responsible for:
| · | evaluating the performance of our Chief Executive Officer in light of our company’s corporate goals and objectives and, based on such evaluation: (i) Reviewing and approving the cash compensation of our Chief Executive Officer, and (ii) Reviewing and approving grants and awards to our Chief Executive Officer under equity-based plans; |
|
|
|
| · | reviewing and recommending to the Board of Directors the cash compensation of our other executive officers; |
|
|
|
| · | reviewing and establishing our overall management compensation, philosophy and policy; |
|
|
|
| · | overseeing and administering our compensation and similar plans; |
|
|
|
| · | reviewing and approving the retention or termination of any consulting firm or outside advisor to assist in the evaluation of compensation matters and evaluating and assessing potential and current compensation advisors in accordance with the independence standards identified in the applicable Nasdaq rules; |
|
|
|
| · | retaining and approving the compensation of any compensation advisors; |
|
|
|
| · | reviewing and approving our policies and procedures for the grant of equity-based awards; |
|
|
|
| · | reviewing and recommending to the board of directors the compensation of our directors; and |
|
|
|
| · | preparing the compensation committee report required by SEC rules, if and when required. |
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| Table of Contents |
The Compensation Committee has the authority to delegate any of its responsibilities to one or more subcommittees as the Committee may from time to time deem appropriate. If at any time the Compensation Committee includes a member who is not independent as defined under the Nasdaq Listing Rules, a subcommittee comprised entirely of individuals who are independent in accordance with the Nasdaq Listing Rules may be formed by the Compensation Committee for the purpose of ratifying any grants of awards under any incentive or equity-based plan for the purposes of complying with the exemption requirements of Rule 16b-3 of the Exchange Act; provided that any such grants shall not be contingent on such ratification. No compensation consultants were used during fiscal year 2024.
Board Leadership Structure and Role in Risk Oversight
Our Board currently consists of four directors. The Board has not appointed a lead independent director. Due to the size of the Board, the independent directors are able to closely monitor the activities of our Company. In addition, the independent directors are able to meet independently with the Company’s independent registered public accounting firm without management to discuss the Company’s financial statements and related audits. Therefore, the Board has determined that a lead independent director is not necessary at this time. To the extent the composition of the Board changes and/or grows in the future, the Board may reevaluate the need for a lead independent director.
Management is responsible for the day-to-day management of risks the Company faces, while the Board as a whole has ultimate responsibility for the Company’s oversight of risk management. Our Board takes an enterprise-wide approach to risk oversight, designed to support the achievement of organizational objectives, including strategic objectives, to improve long-term organizational performance and enhance stockholder value. A fundamental part of risk oversight is not only understanding the risks a Company faces and what steps management is taking to manage those risks, but also understanding what level of risk is appropriate for the Company. As a critical part of this risk management oversight role, our Board encourages full and open communication between management and the Board. Our Board regularly reviews material strategic, operational, financial, compensation and compliance risks with management. In addition our management team regularly reports to the full Board regarding their areas of responsibility and a component of these reports is risk within the area of responsibility and the steps management has taken to monitor and control such exposures. Additional review or reporting on risk is conducted as needed or as requested by our Board.
Attendance
There were 4 meetings, exclusive of action by unanimous written consent, of the Board held during fiscal year 2024. During the fiscal year, all Directors attended at least 75% of the aggregate number of meetings of the Board, except Ms. Jook Yuen Low who attended 1 meeting after her appointment on November 5, 2024. The Company did not hold an annual meeting of stockholders in fiscal year 2024 and instead the Company’s directors were elected by written consent of the shareholders. We encourage our directors to attend the annual meeting of stockholders.
There were 2 meetings each, exclusive of action by unanimous written consent, of the Nominating and Corporate Governance Committee and Compensation Committee held during fiscal year 2024. There were 4 meetings held by the Audit Committee in conjunction with the Quarterly reporting schedule, and an additional 2 Executive Sessions of only the Independent Members of the Board of Directors.
Family Relationships
Except as stated herein above, there are no family relationships among our directors or officers.
Involvement in Legal Proceedings
To the best of our knowledge, none of our directors or executive officers, during the past ten years, had been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors, or had been a party to any judicial or administrative proceeding during the past five years that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws, except for matters that were dismissed without sanction or settlement. Except as set forth in our discussion below in “Related Party Transactions,” none of our directors, director nominees or executive officers had been involved in any transactions with us or any of our directors, executive officers, affiliates or associates which were required to be disclosed pursuant to the rules and regulations of the Securities and Exchange Commission.
Director Independence
Our board of directors is currently composed of four members, three of whom qualify as independent directors in accordance with the published listing requirements of Nasdaq. The Nasdaq independence definition includes a series of objective tests, such as that the director is not, and has not been for at least three years, one of our employees and that neither the Director, nor any of his family members have engaged in various types of business dealings with us. In addition, our board of directors had not made a subjective determination as to our director that no relationship existed which, in the opinion of our board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director, though such subjective determination is required by the Nasdaq rules. Had our board of directors made these determinations, our board of directors would have reviewed and discussed information provided by our director and us with regard to our director’s business and personal activities and relationships as they may relate to us and our management.
Code of Ethics
In conjunction with our listing on Nasdaq on July 20th 2023, the Company has adopted a Code of Business Conduct and Ethics which is available from the Investor Relations section of our website at www.bionexusgenelab.com.
Conflicts of Interest
The Company is not aware of any other conflicts of interest of our Executive Officers and Directors, other than those already declared, investigated, or reviewed and accepted by the Audit Committee, and of which material matters have been disclosed.
| 52 |
| Table of Contents |
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Exchange Act, requires the Company’s executive officers and directors and persons who own more than 10% of a registered class of the Company’s equity securities, to file with the Securities and Exchange Commission (hereinafter referred to as the “Commission”) initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership, of Common Stock and other equity securities of the Company on Forms 3, 4, and 5, respectively (“Section 16 Reporting”). Executive Officers, Directors and greater than 10% shareholders are required by Commission regulations to furnish the Company with copies of all Section 16(a) reports they file.
During this current fiscal year, the Section 16 Reporting was complied with by the Company’s Officers, Directors and greater than 10% shareholders.
Item 11. Executive Compensation.
Summary Executive Compensation Table
The following table reflects the Summary Compensation for our named Executive Officers for fiscal years ended December 31, 2024 and 2023, respectively. For such periods, there were no bonus, non-equity plan compensation, nonqualified compensation earnings or other compensation other than as stated below for the named executive officers. Further, we have not entered into an employment agreement with any of our officers, directors or any other persons and no such agreements are anticipated in the immediate future.
Name and principal position |
| Year |
| Salary ($) |
|
| Bonus ($) |
|
| Stock Awards ($) |
|
| Option Awards ($) |
|
| Non-Equity Incentive Plan Compensation ($) |
|
| Nonqualified Deferred Compensation Earnings ($) |
|
| All Other Compensation ($) |
|
| Total ($) |
| ||||||||
Yeat Min Fong |
| 2024 |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Former Chairman (1) |
| 2023 |
| $ | 16,069 |
|
| $ | — |
|
| $ | 7,583 |
|
| $ | — |
|
|
| — |
|
|
| — |
|
| $ | — |
|
| $ | 23,652 |
|
Yee Meng Wong |
| 2024 |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Former President (2) |
| 2023 |
| $ | 16,069 |
|
| $ | — |
|
| $ | 7,583 |
|
| $ | — |
|
|
| — |
|
|
| — |
|
| $ | — |
|
| $ | 23,652 |
|
Sook Keng Yeoh |
| 2024 |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Former Chief Executive Officer (3) |
| 2023 |
| $ | 12,000 |
|
| $ | — |
|
| $ | 7,583 |
|
| $ | — |
|
|
| — |
|
|
| — |
|
| $ | — |
|
| $ | 19,583 |
|
Chi Yuen Leong Former Chief |
| 2024 |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Executive Officer (4) |
| 2023 |
| $ | 3,283 |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
|
| — |
|
|
| — |
|
| $ | — |
|
| $ | 3,283 |
|
Wei Li Leong |
| 2024 |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Former Chief Financial Officer (5) |
| 2023 |
| $ | 16,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 842 |
|
| $ | 16,842 |
|
Liong Tai Tan |
| 2024 |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Chief Operating Officer (6) |
| 2023 |
| $ | — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Su-Leng Tan Lee |
| 2024 |
| $ | 490,126 |
|
| $ | 1,000 |
|
| $ | 0 |
|
| $ | 0 |
|
| $ | 0 |
|
| $ | 0 |
|
| $ | 0 |
|
| $ | 491,126 |
|
Chief Executive Officer & Chief Operating Officer (7) |
| 2023 |
| $ | 9,095 |
|
| $ | 0 |
|
| $ | 0 |
|
| $ | 0 |
|
| $ | 0 |
|
| $ | 0 |
|
| $ | 0 |
|
| $ | 9,095 |
|
(1) | Mr. Yeat Min Fong was removed from his position as Chairman of the Company on December 11, 2023. |
(2) | Ms. Yee Meng Wong was removed from her position as President of the Company on December 11, 2023. |
(3) | Mr. Sook Keng Yeoh tendered his resignation to the company on October 4, 2023. |
(4) | Mr. Chi Yuen Leong was appointed as CEO of the Company on October 12, 2023, and removed from his position as CEO of the Company on December 11, 2023. |
(5) | Ms. Wei Li Leong tendered her resignation letter to the Company on October 30, 2023. |
(6) | Mr. Liong Tai Tan tendered his resignation to the Company on August 31, 2023. |
(7) | Mr. Su-Leng Tan Lee began his employment with the Company on September 1, 2023. |
| 53 |
| Table of Contents |
Employment Agreements
Employment Agreement between Mr. Su-Leng Tan Lee and the Company
Effective as of August 15, 2023, the Company entered into an employment agreement with Mr. Su-Leng Tan Lee. The agreement provides for an annual base salary. Mr. Tan Lee’s employment will terminate two years from the effective date of the agreement, and such term shall be automatically extended for a one-year term thereafter at the Company’s request. The agreement further provides that either party to the agreement may terminate Mr. Tan Lee’s employment upon one month’s prior written notice. Additionally, the agreement provides that Mr. Tan Lee shall not, during the term of the agreement and for 24 months after cessation of employment, carry on business in competition with the Company.
Grants of Plan-Based Awards
Except as stated above, no plan-based awards were granted to any of our named executive officers during the interim fiscal year ended December 31, 2024.
Outstanding Equity Awards at Interim Fiscal Year End
The equity awards reflected in the Summary Compensation Table above represents all restricted stock awards issued to our executive officers as of December 31, 2024. No other stock or stock option awards were granted to any other officer of the Company as of December 31, 2024.
Option Exercises and Stock Vested
No option to purchase our capital stock was exercised by any of our named executive officers, nor was any restricted stock held by such executive officers vested during the interim fiscal period ended December 31, 2024.
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| Table of Contents |
Pension Benefits
No named Executive Officers received or held pension benefits during the interim fiscal period ended December 31, 2024.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information, as of the date hereof, with respect to the beneficial ownership of the outstanding common stock by (i) any holder of more than five percent (5%); (ii) each of our executive officers and directors; and (iii) our directors and executive officers as a group. Except as otherwise indicated, each of the stockholders listed below has sole voting and investment power over the shares beneficially owned. The information is based on 17,967,663 shares of common stock issued and outstanding as of this filing.
Name and address of beneficial owners |
| Amount and nature of beneficial ownership of Common Stock |
|
| Approximate percentage of outstanding Common Stock (1) |
| ||
|
|
|
|
|
|
| ||
Resigned Directors and Named Executive Officers: |
|
|
|
|
|
| ||
Koon Wai Wong (2) |
|
| 100 |
|
|
| 0.00 | % |
Wei Foong Lim (3) |
|
| 362,936 |
|
|
| 2.02 | % |
All directors and executive officers as a group (2 persons) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Directors and Named Executive Officers: |
|
|
|
|
|
|
|
|
Jook Yuen Low (4) |
|
| 12,616 |
|
|
| 0.00 | % |
|
|
|
|
|
|
|
|
|
Directors and Named Executive Officers: |
|
|
|
|
|
|
|
|
Su-Leng Tan Lee (5) |
|
| - |
|
|
| - |
|
Muhammad Azrul bin Abdul Hamid (6) |
|
| - |
|
|
| - |
|
Chee Keong Yap (7) |
|
| - |
|
|
| - |
|
All directors and executive officers as a group (3 persons) |
|
| 504,703 |
|
|
| 2.84 | % |
|
|
|
|
|
|
|
|
|
5% or Greater Stockholders |
|
|
|
|
|
|
|
|
Soo Kow Lai (8) |
|
| 1,250,001 |
|
|
| 6.96 | % |
Chan Chong Wong (9) |
|
| 1,031,427 |
|
|
| 5.74 | % |
Choong-Chin Liew (10) |
|
| 1,666,667 |
|
|
| 9.28 | % |
Kim Hai Wong (11) |
|
| 900,872 |
|
|
| 5.01 | % |
(1) | Beneficial Ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Each of the beneficial owners listed above has ownership of and voting power and investment power with respect to our Common stock or Preferred Shares. For each beneficial owner above, any options exercisable within 60 days have been included in the denominator. |
(2) | The address for Koon Wai Wong is No.4, Jalan CJ 1/6 Kawasan Perusahaan 43200 Majlis Perbandaran Kajang Selangor, Malaysia. Shares held in registered and street name with broker. |
(3) | The address for Wei Foong Lim is No.4, Jalan CJ 1/6 Kawasan Perusahaan 43200 Majlis Perbandaran Kajang Selangor, Malaysia. Shares held in registered and street name with broker. |
(4) | The address for Jook Yuen Low is A-28-7, Level 28, Tower A, Menara UOA Bangsar, No.5 Jln Bangsar Utama 1, Kuala Lumpur, Malaysia. |
(5) | The address for Su-Leng Tan Lee is C2-2-8 Megan Phoenix, Jalan 2/142A, Kuala Lumpur 56000, Malaysia. No shareholding. |
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| Table of Contents |
(6) | The address for Muhammad Azrul bin Abdul Hamid is A-28-7, Level 28, Tower A, Menara UOA Bangsar, No.5 Jln Bangsar Utama 1, Kuala Lumpur, Malaysia. No shareholding. |
(7) | The address for Chee Keong Yap is A-28-7, Level 28, Tower A, Menara UOA Bangsar, No.5 Jln Bangsar Utama 1, Kuala Lumpur, Malaysia. No shareholding. |
(8) | The address for Soo Kow Lai is A-28-7, Level 28, Tower A, Menara UOA Bangsar, No.5 Jln Bangsar Utama 1, Kuala Lumpur, Malaysia. Shares held in registered name. |
(9) | The address for Chan Chong Wong is A-28-7, Level 28, Tower A, Menara UOA Bangsar, No.5 Jln Bangsar Utama 1, Kuala Lumpur, Malaysia. Shares held in registered name. |
(10) | The address for Choong-Chin Liew is 81 Millersgrove Drive, Toronto, Ontario M2R 3S1, Canada. Shares held in registered name. |
(11) | The address for Kim Hai Wong is No.4, Jalan CJ 1/6 Kawasan Perusahaan 43200 Majlis Perbandaran Kajang Selangor, Malaysia. Shares held in registered and street name with broker. |
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Other than as stated herein, there have been no related party transactions, or any other transactions or relationships required to be disclosed pursuant to Item 404 of Regulation S-K.
1. Transactions with Honkuk Material Sdn. Bhd.
Nature of relationship: Company affiliated with directors of Chemrex (subsidiary)
Description |
| 2024 (USD) |
|
| 2023 (USD) |
| ||
Sales to Honkuk |
| $ | 34,060 |
|
| $ | 29,714 |
|
Purchases from Honkuk |
| $ | 288,767 |
|
| $ | 168,952 |
|
Factory Rental |
| $ | 1,969 |
|
|
| — |
|
Trade Payables (Dec 31) |
| $ | 0 |
|
| $ | 21,953 |
|
Audit Committee Review: The transactions were not previously submitted for Board approval. The Audit Committee reviewed them in 2024 and accepted them provisionally based on management representations. These transactions are under continuing observation for compliance with the Company’s updated related party policy.
2. Transactions with RP Products Sdn. Bhd.
Nature of relationship: Entity controlled by a Chemrex director
Description |
| 2024 (USD) |
|
| 2023 (USD) |
| ||
Sales to RP Products |
| $ | 78,496 |
|
| $ | 77,205 |
|
Purchases from RP Products |
| $ | 8,969 |
|
| $ | 15,481 |
|
Trade Receivables (Dec 31) |
| $ | 47,272 |
|
| $ | 4,520 |
|
These transactions were historically executed without centralized disclosure. They are now subject to updated oversight procedures.
| 56 |
| Table of Contents |
3. Amount owing to directors
Company |
| 2024 (USD) |
|
| 2023 (USD) |
| ||
Chemrex |
| $ | - |
|
| $ | - |
|
MRNA Scientific |
| $ | 4,004 |
|
| $ | 4,196 |
|
Holding Co |
| $ | 13,170 |
|
| $ | 9,003 |
|
Total |
| $ | 17,174 |
|
| $ | 13,199 |
|
4. Director Remuneration (Chemrex and Holding Company)
Compensation Type |
| 2024 (USD) |
|
| 2023 (USD) |
| ||
Bonus |
| $ | 25,202 |
|
| $ | 952 |
|
Director Fees (HoldCo) |
| $ | 551,600 |
|
| $ | 73,873 |
|
Salaries (HoldCo) |
| $ | - |
|
| $ | 22.000 |
|
Salaries (Subsidiaries) |
| $ | 1,512,206 |
|
| $ | 321,121 |
|
Contract of Services (Subsidiaries) |
| $ | 109,385 |
|
| $ | - |
|
EPF Contributions |
| $ | 178,686 |
|
| $ | 42,329 |
|
Other Contributions (SOCSO, EIS) |
| $ | 1,389 |
|
| $ | 979 |
|
Total |
| $ | 2,378,468 |
|
| $ | 461,254 |
|
Audit Committee Review: The increases in Director’s remuneration in 2024 were not previously submitted for Board approval. The Audit Committee has reviewed the approval process by the subsidiary in Q4 2024 and has resolved to submit the agenda to the upcoming Chemrex Annual Meeting for ratification or rejection. Should the approvals at the subsidiary level be rejected, the Company may demand that improperly approved amounts be returned.
Related Party Review Policy (Regulation S-K 404(b))
The Company has adopted a Related Party Transactions Policy, administered by the Audit Committee. This policy requires:
| · | Pre-approval of all related party transactions; |
| · | Documentation of arm’s-length terms; |
| · | Ongoing monitoring and retrospective review if prior approval was not obtained. |
The Audit Committee has conducted a comprehensive review of all transactions listed above and will update the Board and shareholders on any remediation actions or accounting impacts.
Director Independence (Regulation S-K 407(a))
The Company has determined that the following directors are independent under Nasdaq Rule 5605(a)(2):
| · | Chee Keong Yap |
| · | Muhammad Azrul bin Abdul Hamid |
| · | Jook Yuen Low |
No independent director had a material interest in any of the related party transactions disclosed above.
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| Table of Contents |
Item 14. Principal Accountant Fees and Services.
JP Centurion & Partner PLT is the Company’s current independent registered public accounting firm.
(1) Audit Fees
The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for our audit of annual financial statements and review of financial statements included in our quarterly reports or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years were:
2024 |
| $ | 86,829 |
|
2023 |
| $ | 92,833 |
|
(2) Audit-Related Fees
The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountants that are reasonably related to the performance of the audit or review of our financial statements and are not reported in the preceding paragraph:
2024 |
| $ | 11,194 |
|
2023 |
| $ | 5,201 |
|
(3) Tax Fees
The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning were:
2024 |
| $ | 30,197 |
|
2023 |
| $ | 14,763 |
|
(4) All Other Fees
The aggregate fees billed in each of the last two fiscal years for the products and services provided by the principal accountant, other than the services reported in paragraphs (1), (2), and (3) were:
2024 |
| $ | 2,258 |
|
2023 |
| $ | 4,508 |
|
The percentage of hours expended on the principal accountant’s engagement to audit our financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full time, permanent employees was 0%.
Audit Committee’s Pre-Approval Process
The Audit Committee of the Company reviews fees proposed by our Independent Auditor, and accordingly, all services are approved by all the members of the Committee.
| 58 |
| Table of Contents |
PART IV
Item 15. Exhibits, Financial Statement Schedules.
EXHIBIT INDEX
+ | Filed herewith. |
** | Previously filed. |
| 59 |
| Table of Contents |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 Corp.
|
| |
/s/ Su-Leng Tan Lee |
| Dated: April 15, 2025 |
Su-Leng Tan Lee |
|
|
Chief Executive Officer |
|
|
(Principal Executive Officer) |
|
|
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
/s/ Su-Leng Tan Lee |
| Dated: April 15, 2025 |
Su-Leng Tan Lee |
|
|
Chief Executive Officer and Director |
|
|
(Principal Executive Officer) |
|
|
|
|
|
/s/ Su-Leng Tan Lee |
| Dated: April 15, 2025 |
Su-Leng Tan Lee |
|
|
Acting Chief Financial Officer |
|
|
(Principal Financial and Accounting Officer) |
|
|
/s/ Chee Keong Yap |
| Dated: April 15, 2025 |
Chee Keong Yap |
|
|
Director |
|
|
|
|
|
/s/ Jook Yuen Low |
| Dated: April 15, 2025 |
Jook Yuen Low |
|
|
Director |
|
|
/s/ Muhammad Azrul bin Abdul Hamid |
| Dated: April 15, 2025 |
Muhammad Azrul bin Abdul Hamid |
|
|
Director |
|
|
| 60 |
| Table of Contents |
PART I FINANCIAL INFORMATION |
| Page | ||
|
|
|
| |
ITEM FINANCIAL STATEMENTS: |
|
|
| |
1. |
|
|
|
|
|
| F-2-F-3 |
| |
| Consolidated Balance Sheets as of December 31, 2024 and 2023 | F-4 to F-5 |
| |
| F-6 |
| ||
| F-7 |
| ||
| Consolidated Statements of Cash Flows for the Year Ended December 31, 2024 and 2023 | F-8 to F-9 |
| |
|
| F-10 to F-30 |
| |
| F-1 |
| Table of Contents |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Stockholders of
BioNexus Gene Lab Corp.
Unit A-28-7, Level 28, Tower A
Menara UOA Bangsar
No. 5, Jalan Bangsar Utama 1
59000 Kuala Lumpur
Malaysia
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of BioNexus Gene Lab Corp. and subsidiaries (the Company) as of December 31, 2024 and 2023, and the related consolidated statements of operations and comprehensive income/(loss), consolidated statements of changes in stockholders’ equity, and consolidated statements of cash flows for each of the years in the two-year period ended December 31, 2024 and 2023, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2024 and 2023, in conformity with accounting principles generally accepted in the United States of America.
Substantial Doubt About the Entity’s Ability to Continue as a Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, for the year ended December 31, 2024, the Company incurred continuous loss of $1,598,342 and negative cash outflow from operating activities of $2,234,260 and as of December 31, 2024, the Company incurred an accumulated deficit of $3,442,620. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
| F-2 |
| Table of Contents |
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Valuation of Trade Receivables and Expected Credit Losses (“ECL”)
The identification and measurement of credit impairment under ASC 326 - Financial Instruments: Credit Losses require management to exercise significant judgment in determining whether a financial asset is credit-impaired and, if so, to measure the loss allowance. Specifically, the determination of Expected Credit Losses (ECL) for trade receivables involves subjective assessments regarding the collectability of outstanding balances, the creditworthiness of customers, and the appropriateness of forecasted economic conditions.
Given the complexity and judgment involved, we identified the impairment of trade receivables as a critical audit matter. The calculation of the loss allowance significantly impacts the financial statements and requires careful evaluation of assumptions, estimates, and the adequacy of data used in the assessment process.
Our audit procedure in this area included the following, among others:
a) | Obtained an understanding of the management’s process in determining and calculating the expected credit loss; |
b) | Assessed significant assumptions, including recovery rates and impairment ratios and those relating to future economic events that are used to calculate the expected credit losses; |
c) | Tested the completeness and accuracy of data used in the ECL calculation including the customer's ageing reports; |
d) | Tested the mathematical accuracy of the ECL model; |
e) | Obtained an understanding of the latest development and the basis of measuring the impairment allowance for specific provisions and assessed management assumptions given the circumstances; and |
f) | Assessed the adequacy of the relevant disclosures included in the consolidated financial statements. |
/s/ JP CENTURION & PARTNERS PLT |
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We have served as the Company’s auditor since 2021. | |
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April 15, 2025 |
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| F-3 |
| Table of Contents |
BIONEXUS GENE LAB CORP. CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2024 AND 2023 (Currency expressed in United States Dollars (“US$”)) (Audited) |
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| As of |
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| December 31, |
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| 2024 |
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| 2023 |
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ASSETS |
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CURRENT ASSETS |
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Cash and bank balances |
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Fixed deposits placed with financial institutions (including $ |
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Trade receivables, net of allowance for credit losses of $ |
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| 3 |
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Other receivables, deposits and prepayments |
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Tax recoverable |
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Inventories (including goods in transit of $ |
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Total current assets |
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NON-CURRENT ASSETS |
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Operating lease right-of-use assets |
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| 5 |
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Property, plant and equipment, net |
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| 6 |
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Investments in equity securities |
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| 7 |
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Total non-current assets |
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TOTAL ASSETS |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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CURRENT LIABILITIES |
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Trade payables (including $Nil and $ |
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| 8 |
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Other payables and accrued liabilities |
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Current portion of operating lease liabilities |
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| 5 |
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Advance payment from customer |
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Amount owing to directors |
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Total current liabilities |
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NON-CURRENT LIABILITIES |
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Non-current portion of operating lease liabilities |
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| 5 |
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Deferred tax liabilities |
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| 4 |
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Total non-current liabilities |
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TOTAL LIABILITIES |
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See accompanying notes to the consolidated financial statements.
| F-4 |
| Table of Contents |
PART I — FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (CONT’D)
BIONEXUS GENE LAB CORP.
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2024 AND 2023
(Currency expressed in United States Dollars (“US$”))
(Audited)
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| As of |
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| December 31, |
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| Note |
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| 2024 |
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| 2023 |
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STOCKHOLDERS’ EQUITY |
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As at December 31, 2024, common stock, no par value; |
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| 12 |
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Additional paid in capital |
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Accumulated deficit |
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Accumulated other comprehensive losses |
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TOTAL STOCKHOLDERS’ EQUITY |
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
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* Issued and outstanding shares of common stock have been adjusted for the periods prior to July 20, 2023, to reflect the 12-for-1 reverse stock split effected on that date on a retroactive basis as described in Note 12.
See accompanying notes to the consolidated financial statements.
| F-5 |
| Table of Contents |
BIONEXUS GENE LAB CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS)
FOR THE YEAR ENDED DECEMBER 31, 2024 AND 2023
(Currency expressed in United States Dollars (“US$”))
(Audited)
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| Year ended |
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| December 31, |
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| 2024 |
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| 2023 |
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REVENUE (including $112,556 and $106,919 of revenue from related parties for the year ended December 31, 2024 and 2023 respectively) |
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COST OF REVENUE (including $297,736 and $184,433 of cost of revenue from related parties for the years ended December 31, 2024 and 2023, respectively) |
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GROSS PROFIT |
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OTHER INCOME |
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Dividend income |
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Interest income |
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Fair value gain on investments in equity securities |
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Gain on disposal of investments in equity securities |
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Reversal of expected credit losses |
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Others |
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TOTAL OTHER INCOME |
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OPERATING EXPENSES |
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Sales and marketing |
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Research and development |
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General and administrative (including $1,969 and nil of rental expenses to related party for the years ended December 31, 2024 and 2023, respectively) |
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Provision for expected credit losses |
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TOTAL OPERATING EXPENSES |
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LOSS FROM OPERATIONS |
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FINANCE COSTS |
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LOSS BEFORE TAX |
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Tax expense: |
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Deferred tax |
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Income tax |
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Tax expense |
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NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS |
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Other comprehensive income/(loss): |
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Foreign currency translation gain/(loss) |
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COMPREHENSIVE LOSS |
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Earnings per share - Basic and diluted |
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Weighted average number of common stocks outstanding, Basic and Diluted |
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# Weighted average shares outstanding and per share amount have been adjusted for the periods shown to reflect the 12-for-1 reverse stock split effected on July 20, 2023, on a retroactive basis as described in Note 12.
See accompanying notes to the consolidated financial statements.
| F-6 |
| Table of Contents |
BIONEXUS GENE LAB CORP
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE YEAR ENDED DECEMBER 31, 2024 AND 2023
(Currency expressed in United States Dollars (“US$”))
(Audited)
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| Common stock |
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| Number |
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| paid in |
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| surplus/ |
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| comprehensive |
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| capital |
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| losses |
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| equity |
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Balance as of December 31, 2022 |
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Impacts arising from application of Topic 326 |
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Balance as of January 1, 2023 (restated) |
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Round up shares |
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Issuance of shares* |
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Issuance of shares# |
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Net loss for the year |
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Foreign currency translation loss |
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Balance as of December 31, 2023 |
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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
* 1,437,500 shares of common stock were issued to the underwriter.
# 834,299 shares of common stock were issued to professional parties and board members
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Accumulated |
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Balance as of January 1, 2024 |
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Issuance of shares@ |
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Net loss for the year |
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Foreign currency translation gain |
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Balance as of December 31, 2024 |
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@ 300,000 shares of common stock were issued for professional services rendered
See accompanying notes to the consolidated financial statements.
| F-7 |
| Table of Contents |
BIONEXUS GENE LAB CORP. | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
FOR THE YEAR ENDED DECEMBER 31, 2024 AND 2023 | ||||||||
(Currency expressed in United States Dollars (“US$”)) | ||||||||
(Audited) | ||||||||
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| Year Ended |
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| December 31, |
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| 2024 |
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| 2023 |
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Cash flows from operating activities: |
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Net loss |
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Adjustments to reconcile net loss to net cash used in operating activities: |
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Amortization of right-of-use asset |
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Allowances for expected credit losses |
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Recoveries for expected credit losses |
|
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Bad debts written off |
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Depreciation of property, plant and equipment |
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Dividend income |
|
| ( | ) |
|
| ( | ) |
Fair value gain on investments in equity securities |
|
| ( | ) |
|
| ( | ) |
Loss arising from settlement of supplier contract dispute |
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Gain on disposal of investments in equity securities |
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| ( | ) |
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| ( | ) |
Loss on lease termination |
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Impairment on investments in equity securities |
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Impairment on property |
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Property, plant and equipment written off |
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Stock written off |
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Operating loss before working capital changes |
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| ( | ) |
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| ( | ) |
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Changes in operating assets and liabilities: |
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Inventories |
|
| ( | ) |
|
| ( | ) |
Trade and other receivables |
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Trade and other payables |
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| ( | ) | |
Advance payment from customer |
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| ( | ) | |
Operating lease liabilities |
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| ( | ) |
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Tax (liabilities)/recoverable |
|
| ( | ) |
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| ( | ) |
Net cash used in operating activities |
|
| ( | ) |
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Cash flows from investing activities: |
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Acquisition of investments in equity securities |
|
| ( | ) |
|
| ( | ) |
Dividend income |
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| ||
Change in fixed deposits placed with original maturities more than three months |
|
| ( | ) |
|
| ( | ) |
Purchase of plant and equipment |
|
| ( | ) |
|
| ( | ) |
Proceeds from disposal of investments in equity securities |
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| ||
Proceeds from settlement of supplier contract dispute |
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Net cash generated from/(used in) investing activities |
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| ( | ) | |
| F-8 |
| Table of Contents |
BIONEXUS GENE LAB CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2024 AND 2023 (Currency expressed in United States Dollars (“US$”))(CONT’D) (Audited) |
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Cash flows from financing activities: |
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Advances from directors |
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Share-based compensation |
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Shares subscriptions |
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Net cash generated from financing activities |
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Foreign currency translation adjustment |
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|
| ( | ) | |
NET CHANGE IN CASH AND CASH EQUIVALENTS |
|
| ( | ) |
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| |
CASH AND CASH EQUIVALENTS, BEGINNING OF FINANCIAL YEAR |
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CASH AND CASH EQUIVALENTS, END OF FINANCIAL YEAR |
| $ |
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| $ |
| ||
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CASH AND CASH EQUIVALENTS INFORMATION: |
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|
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|
Fixed deposits placed with financial institutions with original maturities of three months or less |
| $ |
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| $ |
| ||
Cash at bank |
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Cash and cash equivalents, end of financial year |
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Supplementary cash flow information: |
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Interest paid |
| $ | ( | ) |
| $ | ( | ) |
Income tax refunded |
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| ||
Income tax paid |
|
| ( | ) |
|
| ( | ) |
See accompanying notes to the consolidated financial statements.
| F-9 |
| Table of Contents |
BIONEXUS GENE LAB CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024 AND 2023
(Currency expressed in United States Dollars (“US$”))
(Audited)
NOTE 1 – ORGANIZATION AND BUSINESS BACKGROUND
BioNexus Gene Lab Corp. (the “Company”) was incorporated in the State of Wyoming on May 12, 2017. On
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
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 December 31, 2024 is depicted below:
|
| BioNexus Gene Lab Corp. a Wyoming company |
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| |
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| |
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100% owned |
|
| 100% owned | ||
MRNA Scientific Sdn. Bhd. (formerly known as “BioNexus Gene Lab Sdn. Bhd.”), a Malaysian company |
|
| Chemrex Corporation Sdn. Bhd., a Malaysian Company | ||
| F-10 |
| Table of Contents |
BIONEXUS GENE LAB CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024 AND 2023
(Currency expressed in United States Dollars (“US$”))
(Audited)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying consolidated financial statements reflect the application of certain significant accounting policies as described in this note and elsewhere in the accompanying consolidated financial statements and notes.
☐ | Basis of presentation |
The accompanying consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).
☐ | Basis of consolidation |
The consolidated financial statements include the accounts of BioNexus Gene Lab Corp. and its subsidiaries. Acquired businesses are included in the consolidated financial statements from the dates of acquisition. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. All inter-company accounts and transactions have been eliminated in consolidation.
☐ | Going concern |
The accompanying consolidated financial statements have been prepared on a going concern basis which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying consolidated financial statements, for the year ended December 31, 2024, the Company recorded a net loss of $
The Company’s ability to continue as a going concern is dependent upon improving its profitability and the ability secure external financing and fundraising. Management believes the external financing or fundraising will provide additional cash to meet the Company’s obligations as they become due. No assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company can obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stockholders, in the case of equity financing.
☐ | Use of estimates |
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant accounting estimates include certain assumptions related to allowance for credit losses for financial assets and impairment analysis of long-lived assets. Actual results may differ from these estimates.
☐ | 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 are recorded at the invoiced amount and are generally non-interest bearing. However, interest may be imposed on extended credit terms or overdue balances. The Company recognizes an allowance for credit losses in accordance with ASC 326, Financial Instruments – Credit Losses, using an expected credit loss (ECL) model.
The allowance for credit losses is measured based on historical collection experience, aging of receivables, customer-specific credit risk, and current and expected future economic conditions. The Company disaggregates its trade receivables by customer type, as management has determined that risk profiles vary based on the industry and nature of the customer. For each customer type, the Company applies a historical loss rate matrix, adjusted for forward-looking information and macroeconomic trends relevant to the industries in which customers operate.
In addition to the collective assessment, specific allowances are established for customers with known financial difficulties or higher risk of default, based on a review of individual outstanding invoices and relevant credit information.
Trade receivables are written off against the allowance when all reasonable collection efforts have been exhausted and recovery is considered remote. The allowance for credit losses is recorded as a contra-asset account to trade receivables in the consolidated balance sheets, and changes to the allowance are recognized in the consolidated statement of operations and comprehensive income/(loss).
| F-11 |
| Table of Contents |
BIONEXUS GENE LAB CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024 AND 2023
(Currency expressed in United States Dollars (“US$”))
(Audited)
☐ | Inventories |
Inventories consisting of products available for sale are stated at the lower of cost or net realizable 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 net realizable 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 Consolidated Statement of Operations and Comprehensive Income/(Loss).
☐ | Leases |
The Company determines if a contract is or contains a lease at the inception of the contract or modification of the contract. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period in exchange for consideration. Control over the use of the identified asset means the lessee has both (a) the right to obtain substantially all of the economic benefits from the use of the asset and (b) the right to direct the use of the asset.
Finance and operating lease right-of-use (“ROU”) assets and liabilities are recognized based on the present value of future minimum lease payments over the expected lease term at commencement date. As the implicit rate is not determinable in most of the Company’s leases, management uses the Company’s incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The expected lease term includes options to extend or terminate the lease when it is reasonably certain the Company will exercise the option. Lease expense for minimum lease payments is recognized on a straight-line basis over the expected lease term.
The Company’s lease arrangements have lease and non-lease components. Leases with an expected term of 12 months or less are not accounted for on the balance sheet and the related lease expense is recognized on a straight-line basis over the expected lease term.
☐ | 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 the 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:
|
| Principal |
| |
Categories |
| Annual Rates |
| |
Air conditioner |
|
| % | |
Buildings |
|
| % | |
Computer and software |
|
| % | |
Equipment |
|
| % | |
Furniture and fittings |
| % | ||
Lab Equipment |
|
| % | |
Motor vehicle |
| % | ||
Office equipment |
|
| % | |
Renovation |
| % | ||
Signboard |
|
| % | |
Solar PV System |
|
| % | |
Machinery |
|
| % | |
Leasehold lands are depreciated over the period of lease term. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Company will obtain ownership by the end of the lease term. Freehold land is not depreciated. Property, plant and equipment under construction are not depreciated until the assets are ready for their intended use.
Maintenance and repairs are charged to operations as incurred. Expenditures which substantially increase the useful lives of the related assets are capitalized. When properties are disposed of, 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.
| F-12 |
| Table of Contents |
BIONEXUS GENE LAB CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024 AND 2023
(Currency expressed in United States Dollars (“US$”))
(Audited)
☐ | Investments in equity securities |
The Company accounts for its investments that represent less than 20% ownership, and for which the Company does not have the ability to exercise significant influence, using ASC 321, Investments—Equity Securities. Equity securities with readily determinable fair values are measured at fair value, with changes in fair value recognized in net income. These investments are classified within “Investments in equity securities” on the consolidated balance sheets, and unrealized gains and losses are included in “Other income (expense), net” in the consolidated statement of operations and comprehensive income/(loss).
For equity securities without readily determinable fair values, the Company may elect the practicability exception to measure such investments at cost, less impairment, if any, plus or minus observable price changes in orderly transactions for the identical or a similar investment of the same issuer. These securities are evaluated at each reporting period for impairment or observable price changes.
Realized gains and losses on sales of equity securities are determined based on the specific identification method and are also recorded in net income.
☐ | 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”, the Company generally conducts its annual impairment evaluation to its long-lived assets, usually in the fourth quarter of each fiscal year, or more frequently if indicators of impairment exist, such as a significant sustained change in the business climate. The recoverability of long-lived assets is measured at the lowest level group. If the total of the expected undiscounted future net cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and carrying amount of the asset. There has been no impairment charge for the years presented.
☐ | Revenue recognition |
Revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services.
The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:
| · | identify the contract with a customer; |
| · | identify the performance obligations in the contract; |
| · | determine the transaction price; |
| · | allocate the transaction price to performance obligations in the contract; and |
| · | recognize revenue as the performance obligation is satisfied. |
The Company records revenue at point in time which is recognized upon goods delivered or services rendered.
☐ | Shipping and handling fees |
Shipping and handling fees, if billed to customers, are included in revenue. Shipping ang handling fees associated with inbound and outbound freight are expensed as incurred and included in selling and distribution expenses.
☐ | Comprehensive income |
ASC Topic 220, “Comprehensive Income” establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive income, as presented in the accompanying statements of stockholders’ equity consists of changes in unrealized gains and losses on foreign currency translation and cumulative net change in the fair value of available-for-sale investments held at the balance sheet date. This comprehensive income is not included in the computation of income tax expense or benefit.
☐ | Income taxes |
Income taxes are determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC Topic 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
| F-13 |
| Table of Contents |
BIONEXUS GENE LAB CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024 AND 2023
(Currency expressed in United States Dollars (“US$”))
(Audited)
ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclosed in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.
The Company conducts major businesses in Malaysia and is subject to tax in their own jurisdictions. As a result of its business activities, the Company will file separate tax returns that are subject to examination by the foreign tax authorities.
☐ | Net earnings or loss per share |
The Company calculates net earnings or loss per share in accordance with ASC Topic 260 “Earnings per share”. 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.
☐ | 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$ as being the primary currency of the economic environment in which the Company operates. The functional currency of the subsidiaries is Malaysian Ringgit (“MYR”) 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”, 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 translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income.
Translation of amounts from RM (MYR) into US$1.00 has been made at the following exchange rates for the respective years:
|
| December 31, |
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| December 31, |
| ||
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| 2024 |
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| 2023 |
| ||
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Year-end US$1.00: MYR exchange rate |
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| January 1, |
|
| January 1, |
| ||
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| 2024 to |
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| 2023 to |
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| December 31, |
|
| December 31, |
| ||
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| 2024 |
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| 2023 |
| ||
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| ||
Yearly average US$1.00: MYR exchange rate |
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| ||
| F-14 |
| Table of Contents |
BIONEXUS GENE LAB CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024 AND 2023
(Currency expressed in United States Dollars (“US$”))
(Audited)
☐ | Related parties |
Parties, which can be a corporation or individual, are 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.
☐ | Fair value of financial instruments |
The Company 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 three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:
· | Level 1 : Observable inputs such as quoted prices in active markets; |
|
|
· | Level 2 : Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and |
|
|
· | Level 3 : Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions |
The carrying value of the Company’s financial instruments: cash and bank balances, fixed deposits placed with financial institutions, trade receivable, other receivables, deposits, trade payables, other payables and accrued liabilities, advance payment from customers and amount owing to directors approximate at their fair values because of the short-term nature of these financial instruments
As of December 31, 2024, and December 31, 2023, the Company did not have any non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements, at least annually, on a recurring basis, nor did the Company have any assets or liabilities measured at fair value on a non-recurring basis.
☐ | Recent accounting pronouncements |
The Company has reviewed all recently issued, but not yet effective, considers the applicability and impact of all accounting standards updates (“ASUs”).
Management periodically reviews new accounting standards that are issued.
| F-15 |
| Table of Contents |
BIONEXUS GENE LAB CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024 AND 2023
(Currency expressed in United States Dollars (“US$”))
(Audited)
Accounting Standards Adopted in 2024
Accounting Standards Update 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures:
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The new standard provides improvements to reportable segment disclosure requirements through amendments that require disclosure of significant segment expenses and other segment items on an interim and annual basis and requires all annual disclosures about a reportable segment’s profit or loss and assets to be made on an interim basis. The standard also requires the disclosure of the chief operating decision maker’s (“CODM”) title and position and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. The standard also clarifies that if the CODM uses more than one measure in assessing segment performance and deciding how to allocate resources, a company may report the additional segment profit or loss measure(s) and that companies with a single reportable segment must provide all disclosures required by this amendment. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The standard should be applied retrospectively to all prior periods presented in the financial statements.
During the fourth quarter of 2024, we adopted ASU 2023-07 and enhanced our segment disclosures in line with the new guidance. The adoption had no effect on our consolidated financial statements.
Accounting Standards not yet Adopted
Accounting Standards Update 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures:
In December 2023, the FASB issued ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. The ASU 2023-09 is effective for annual reporting periods beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact that this ASU may have on its consolidated financial statements and related disclosures.
The Company does not expect that any other recently issued accounting pronouncements will have a significant effect on its condensed consolidated financial statements.
Accounting Standards Update 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses:
In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses. The new standard requires entities to disclose additional information about certain expenses, such as purchases of inventory, employee compensation, depreciation, intangible asset amortization, as well as selling expenses included in commonly presented expense captions on the income statement. The FASB further clarified the effective date in January 2025 with the issuance of ASU 2025-01, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date. The ASU is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Companies have the option to apply this guidance either on a retrospective or prospective basis, and early adoption is permitted.
The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements and related disclosures.
The Company does not expect that any other recently issued accounting pronouncements will have a significant effect on its consolidated financial statements.
| F-16 |
| Table of Contents |
BIONEXUS GENE LAB CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024 AND 2023
(Currency expressed in United States Dollars (“US$”))
(Audited)
NOTE 3 – TRADE RECEIVABLES
The Company’s trade receivables represent amounts due from customers that are unrelated parties and related parties of $47,272 and $4,520 respectively for year 2024 and 2023. Trade receivables are initially recognized at the invoiced amount and subsequently measured at amortized cost, net of an allowance for expected credit losses. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Trade receivables are written off when they are determined to be uncollectible, and all reasonable collection efforts have been exhausted.
As of December 31, 2024, the Company performed an analysis of all outstanding trade receivables in accordance with the expected credit loss model under ASC 326. The Company considered historical collection trends, aging of balances, customer credit profiles, and current and forecasted economic conditions in estimating the allowance.
The Company’s standard credit terms range from 30 to 90 days.
|
| As of |
| |||||
|
| December 31, |
|
| December 31, |
| ||
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| 2024 |
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| 2023 |
| ||
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Trade receivables |
|
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|
| ||
Allowances for expected credit losses |
|
| ( | ) |
|
| ( | ) |
Foreign translation differences |
|
| ( | ) |
|
|
| |
Total trade receivables, net |
| $ |
|
| $ |
| ||
Movement for trade receivables allowance for impairment accounts:
|
| As of |
| |||||
|
| December 31, |
|
| December 31, |
| ||
|
| 2024 |
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| 2023 |
| ||
At January 1, 2024 and January 1, 2023 |
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| ||
Impacts arising from application of Topic 326 |
|
|
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| ||
At January 1, 2024 and January 1, 2023, (restated) |
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| ||
Provision for expected credit losses |
|
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| ||
Recoveries for expected credit losses |
|
| ( | ) |
|
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| |
Foreign translation differences |
|
|
|
|
| ( | ) | |
At December 31, 2024 and 2023 |
| $ |
|
| $ |
| ||
| F-17 |
| Table of Contents |
BIONEXUS GENE LAB CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024 AND 2023
(Currency expressed in United States Dollars (“US$”))
(Audited)
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
MRNA Scientific Malaysia and Chemrex are both subject to Malaysia Corporate Tax, which is charged at the statutory income tax rate range from
|
| As of |
| |||||
|
| December 31, |
|
| December 31, |
| ||
|
| 2024 |
|
| 2023 |
| ||
Tax Recoverable |
|
|
|
|
|
| ||
Local |
| $ |
|
| $ |
| ||
Foreign, representing Malaysia |
|
| ( | ) |
|
| ( | ) |
Tax Recoverable |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
Income tax liabilities: |
|
|
|
|
|
|
|
|
Local |
| $ |
|
| $ |
| ||
Foreign, representing Malaysia |
|
|
|
|
|
| ||
Income tax payables |
|
|
|
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|
| ||
|
|
|
|
|
|
|
|
|
Deferred tax liabilities: |
|
|
|
|
|
|
|
|
Local |
| $ |
|
| $ |
| ||
Foreign, representing Malaysia |
|
|
|
|
|
| ||
Deferred tax liabilities |
|
|
|
|
|
| ||
Total |
|
| ( | ) |
|
| ( | ) |
Although the Company is domiciled in the United States, a substantial portion of its pre-tax income/(loss) is generated by its foreign subsidiaries. Accordingly, the consolidated effective tax rate is significantly influenced by foreign tax jurisdictions and certain non-deductible expenses.
| F-18 |
| Table of Contents |
BIONEXUS GENE LAB CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024 AND 2023
(Currency expressed in United States Dollars (“US$”))
(Audited)
NOTE 5 – OPERATING LEASE RIGHT OF USE ASSET AND LEASE LIABILITIES
The Company has operating lease arrangements for office space, lab, and motor vehicles in Malaysia with a term between two and five years, generally with option to renew the lease after that date. The Company accounts for the lease and non-lease components of its leases as a single lease component. Lease expense is recognized on a straight-line basis over the lease term.
Operating lease right-of-use assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term.
The present value of the lease payments are discounted with rates ranging from
As of December 31, 2024 and 2023 operating lease right-of-use assets as follows: |
|
|
|
| ||||
|
| As of |
| |||||
|
| December 31, |
|
| December 31, |
| ||
| 2024 |
|
| 2023 |
| |||
Balance as of December 31, 2023 |
| $ |
|
| $ |
| ||
Add: Addition of right-of-use assets (1) |
|
|
|
|
|
| ||
Less: amortization (2) |
|
| ( | ) |
|
| ( | ) |
Less: lease termination (3) |
|
| ( | ) |
|
|
| |
Foreign translation differences |
|
|
|
|
| ( | ) | |
Balance as of December 31, 2024 |
| $ |
|
| $ |
| ||
As of December 31, 2024 and 2023 operating lease liabilities as follows:
|
| As of |
| |||||
|
| December 31, |
|
| December 31, |
| ||
|
| 2024 |
|
| 2023 |
| ||
Balance as of beginning of the year |
| $ |
|
| $ |
| ||
Add: addition of lease liabilities (1) |
|
|
|
|
|
| ||
Less: gross repayment |
|
| ( | ) |
|
| ( | ) |
Add: imputed interest (4) |
|
|
|
|
|
| ||
Less: lease termination (3) |
|
| ( | ) |
|
|
| |
Foreign translation differences |
|
|
|
|
| ( | ) | |
Balance as of end of the year |
|
|
|
|
|
| ||
Less: lease liabilities current portion |
|
| ( | ) |
|
| ( | ) |
Lease liabilities non-current portion |
| $ |
|
| $ |
| ||
| F-19 |
| Table of Contents |
BIONEXUS GENE LAB CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024 AND 2023
(Currency expressed in United States Dollars (“US$”))
(Audited)
As of December 31, 2024 and 2023, the maturities of the operating lease liabilities are as follows:
|
| As of |
| |||||
|
| December 31, |
|
| December 31, |
| ||
|
| 2024 |
|
| 2023 |
| ||
Years ending December 31: |
|
|
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|
| ||
2024 |
|
|
|
|
|
| ||
2025 |
|
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| ||
2026 |
|
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| ||
2027 |
|
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| ||
2028 |
|
|
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| ||
2029 |
|
|
|
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|
| ||
Total undiscounted cash flows |
|
|
|
|
|
| ||
Less: Interest imputed on lease liabilities |
|
| ( | ) |
|
| ( | ) |
Present value of lease liabilities |
| $ |
|
| $ |
| ||
(1) During the year ended December 31, 2024, the Company entered into a new operating lease of office space in Malaysia for
(2) The amortization of the operating lease right-of-use asset for the year ended December 31, 2024 and 2023 were $
(3) The Company agreed to terminate its operating lease arrangement for office space in Malaysia, effective August 31, 2024. Accordingly, at the date of termination of the operating lease, the Company expensed a right-of-use-asset, net of accumulated depreciation, of $
|
| As of | ||||||
|
| December 31, |
|
| December 31, |
| ||
|
| 2024 |
|
| 2023 |
| ||
Supplemental Cash Flow Disclosures: |
|
|
|
|
|
|
|
|
Cash paid for amounts included in the measurement of lease liabilities: |
|
|
|
|
|
|
|
|
Lease payment – operating leases |
| $ | ( | ) |
| $ | ( | ) |
Operating lease liabilities obtained in exchange for operating lease assets |
|
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| ||
|
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|
|
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|
Other information: |
|
|
|
|
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|
|
|
Weighted average remaining lease term for operating lease (years) |
|
|
|
|
|
| ||
Weighted average discount rate for operating lease |
|
| % |
|
| % | ||
(4) Lease expenses for the year ended December 31, 2024 and 2023 were $
| F-20 |
| Table of Contents |
BIONEXUS GENE LAB CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024 AND 2023
(Currency expressed in United States Dollars (“US$”))
(Audited)
NOTE 6 – PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consisted of the following:
|
| As of |
| |||||
|
| December 31, |
|
| December 31, |
| ||
|
| 2024 |
|
| 2023 |
| ||
|
|
|
|
|
|
| ||
Air conditioner |
| $ |
|
| $ |
| ||
Computer and software |
|
|
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|
|
| ||
Equipment |
|
|
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|
|
| ||
Furniture and fittings |
|
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|
| ||
Lab equipment |
|
|
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| ||
Land and buildings |
|
|
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|
| ||
Motor vehicle |
|
|
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|
|
| ||
Office equipment |
|
|
|
|
|
| ||
Renovation |
|
|
|
|
|
| ||
Signboard |
|
|
|
|
|
| ||
Solar PV System |
|
|
|
|
|
| ||
Machinery |
|
|
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|
| ||
*Capital Work In Progress |
|
|
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| ||
|
|
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|
| ||
(Less): Accumulated depreciation |
|
| ( | ) |
|
| ( | ) |
(Less): Accumulated impairment |
|
| ( | ) |
|
| - |
|
Add: Foreign translation differences |
|
| ( | ) |
|
| ( | ) |
Property, plant and equipment, net |
| $ |
|
| $ |
| ||
During the year ended December 31, 2024 and 2023, the Company recorded depreciation of $
*includes an amount of $
| F-21 |
| Table of Contents |
BIONEXUS GENE LAB CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024 AND 2023
(Currency expressed in United States Dollars (“US$”))
(Audited)
NOTE 7 – INVESTMENTS IN EQUITY SECURITIES
|
| As of |
| |||||
|
| December 31, |
|
| December 31, |
| ||
|
| 2024 |
|
| 2023 |
| ||
As of beginning of the year |
| $ |
|
| $ |
| ||
Addition during the year |
|
|
|
|
|
| ||
Disposal during the year |
|
| ( | ) |
|
| ( | ) |
Fair value gains |
|
|
|
|
|
| ||
Impairment during the year |
|
|
|
|
| ( | ) | |
Foreign exchange translation |
|
|
|
|
| ( | ) | |
As of end of the year |
| $ |
|
| $ |
| ||
For the year ended December 31, 2024 and 2023, the net fair value gains on the investments in equity securities were $
The investments in equity securities consist of the following shares: |
|
|
|
|
|
| ||
|
| As of |
| |||||
|
| December 31, |
|
| December 31, |
| ||
|
| 2024 |
|
| 2023 |
| ||
Investment in equity securities with readily determined fair value: |
|
|
|
|
|
| ||
Malaysia |
|
|
|
|
|
| ||
Singapore |
|
|
|
|
|
| ||
Hong Kong |
|
|
|
|
|
| ||
|
| $ |
|
| $ |
| ||
Investment in equity securities without readily determined fair value: |
|
|
|
|
|
|
|
|
Malaysia |
|
|
|
|
|
| ||
|
| $ |
|
| $ |
| ||
The Company’s investment in equity securities is measured at fair value on a recurring basis. These equity securities are classified as Level 1 in the fair value hierarchy, as the fair value is determined using quoted market prices in active markets for identical assets. Specifically, the stock prices of these securities are readily available on the stock exchange, providing a reliable and observable input to the fair value measurement.
As these securities are actively traded, the quoted prices in the market are considered to be the most reliable indicator of fair value. No significant adjustments are made to these prices, as they reflect current market conditions at the measurement date.
| F-22 |
| Table of Contents |
BIONEXUS GENE LAB CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024 AND 2023
(Currency expressed in United States Dollars (“US$”))
(Audited)
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.
NOTE 9 – REVENUE
The following table shows disaggregated net revenue from contracts with customers by product or service line and geographic area for the year ended December 31, 2024 and 2023:
|
| For the year ended |
| |||||
|
| December 31, |
|
| December 31, |
| ||
|
| 2024 |
|
| 2023 |
| ||
Revenue by product or service line: |
|
|
|
|
|
| ||
Trading of industrial chemicals |
|
|
|
|
|
| ||
Screening services and related sales |
|
|
|
|
|
| ||
Net revenue |
| $ | 9,510,646 |
|
| $ | 9,770,806 |
|
|
|
|
|
|
|
|
|
|
Revenue by geographic area |
|
|
|
|
|
|
|
|
Bangladesh |
|
| |
|
|
| |
|
Indonesia |
|
| |
|
|
| |
|
Malaysia |
|
| |
|
|
| |
|
Maldives |
|
| |
|
|
| |
|
Nigeria |
|
| |
|
|
| |
|
Singapore |
|
| |
|
|
| |
|
Sri Lanka |
|
| |
|
|
| |
|
Net revenue |
| $ | |
| $ |
| |
|
|
|
|
|
|
|
|
|
|
Timing of recognition: |
|
|
|
|
|
|
|
|
At a point in time |
| $ |
|
| $ |
| ||
Revenue is derived from the sale of industrial chemicals and the provision of genomic screening services. Revenue from the sale of goods is recognized at a point in time when control of the goods is transferred to the customer. Credit terms are generally from 30 to 90 days. The Company allows returns only for exchanges with new goods. No warranties are given on the sale of goods.
Revenue from services is recognized at a point in time when the final report is delivered to the customer. Credit terms for these services are generally from 30 days to 60 days. No warranties are given on the services rendered.
In applying ASC 606, the Company does not exercise significant judgment in determining whether revenue from the sale of goods and services should be recognized at a point in time. The criteria for recognizing revenue at a point in time, such as the transfer of control of goods or completion of services, are clear and are based on established contract terms. Therefore, no significant judgment is required in determining the timing of revenue recognition.
| F-23 |
| Table of Contents |
BIONEXUS GENE LAB CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024 AND 2023
(Currency expressed in United States Dollars (“US$”))
(Audited)
NOTE 10 – RELATED PARTY TRANSACTIONS
The following table provides details of the total revenue earned and expenses incurred from all related party transactions:
|
| For the year ended |
| |||||
|
| December 31, |
|
| December 31, |
| ||
|
| 2024 |
|
| 2023 |
| ||
Entities in which certain directors of a subsidiary have substantial financial interests |
|
|
|
|
|
| ||
Sales of goods |
| $ |
|
| $ |
| ||
Purchases |
| $ | ( | ) |
| $ | ( | ) |
Rental of factory |
| $ | ( | ) |
| $ |
| |
The balances related to the above transactions with related parties are as disclosed in the Consolidated Balance Sheets which are interest-free, unsecured and subject to normal credit terms.
NOTE 11 – CONCENTRATION OF RISKS
a) Major customers
There are no major customers who accounted for
b) Major suppliers
For year ended December 31, 2024 and 2023, the suppliers who accounted for
|
| 2024 |
|
| 2023 |
|
| 2024 |
|
| 2023 |
|
| 2024 |
|
| 2023 |
| ||||||
|
| Purchase |
|
| Percentage of purchases |
|
| Accounts payable trade |
| |||||||||||||||
Vendor A |
| $ |
|
| $ |
|
|
| % |
|
| % |
| $ |
|
| $ |
| ||||||
Vendor B |
| $ |
|
| $ |
|
|
| % |
|
| % |
| $ |
|
| $ |
| ||||||
Vendor C |
| $ |
|
| $ |
|
|
| % |
|
| % |
| $ |
|
| $ |
| ||||||
|
| $ |
|
| $ |
|
|
| % |
|
| % |
| $ |
|
| $ |
| ||||||
NOTE 12– STOCKHOLDERS’ EQUITY
As at December 31, 2024 and 2023, the Company issued and outstanding, common stock is
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
The Revised Reverse Stock Split was approved and authorized by a majority of the Company’s stockholders on May 8, 2023 and by the Board of Directors of the Company on May 8, 2023.
| F-24 |
| Table of Contents |
BIONEXUS GENE LAB CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024 AND 2023
(Currency expressed in United States Dollars (“US$”))
(Audited)
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
In addition, pursuant to the Underwriting Agreement, the Underwriter was granted a 45-day option (the "Over-Allotment Option") to
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
In August, 2023, an aggregate of
In August, 2023, an aggregate of
From July 20, 2023 to August 4, 2023, an aggregate total of
In August 2024,
NOTE 13 – SEGMENT INFORMATION
The Company determines it reportable segments based on its internal organization structure and internal management reporting used to assess and allocate resources. This information are regularly reviewed by the Company’s Chief Executive Officer who is identified as the Chief Operating Decision Maker (“CODM”). The Company consists of three operating units, BioNexus Gene Lab Corp., MRNA Scientific Sdn. Bhd. and Chemrex Corporation Sdn. Bhd. which are determined as three reportable segments, as described below. These reportable segments offer different products and services, and are managed separately because they require different technology and marketing strategies. The following describes the operations in each of the Company’s reportable segments:
· | Trading of industrial chemicals | - | Includes trading of industrial chemicals |
· | Provision for genomic screening services | - | includes in commercializing proprietary blood-based diagnostic test for early disease detection |
· | Investment holding | - | Investment holding |
The CODM evaluates the performance of each reportable segment based on operating income and key segment-specific metrics. There are no inter-segment revenue transactions between reportable segments. Except for investment holding activities and the revenue to the overseas customers as disclosed in Note 9, the Company’s revenue and principal operations are substantially confined within Malaysia.
Pursuant to ASU 2023-07, “Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures”, the financial information concerning the Company’s reportable segments is shown as below:
| F-25 |
| Table of Contents |
BIONEXUS GENE LAB CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024 AND 2023
(Currency expressed in United States Dollars (“US$”))
(Audited)
|
| Provision for genomic screening services |
|
| Trading of industrial chemicals |
|
| Investment holding |
|
| Total |
| ||||
|
| Year ended December 31, 2023 |
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
REVENUE |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST OF REVENUE |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
| ( | ) | |
|
|
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|
|
|
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|
|
|
|
|
GROSS PROFIT |
|
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|
|
|
| ||||
|
|
|
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|
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|
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|
|
|
|
|
|
OTHER INCOME |
|
|
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|
| ||||
|
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|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Research and development |
|
| ( | ) |
|
|
|
|
|
|
|
| ( | ) | ||
General and administrative |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Provision for expected credit losses |
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | ||
TOTAL OPERATING EXPENSES |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS FROM OPERATIONS |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCE COSTS |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
| ( | ) | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS BEFORE TAX |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Income tax |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
| ( | ) | |
Total tax (expense)/credit |
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| F-26 |
| Table of Contents |
BIONEXUS GENE LAB CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024 AND 2023
(Currency expressed in United States Dollars (“US$”))
(Audited)
|
| Provision for genomic screening services |
|
| Trading of industrial chemicals |
|
| Investment holding |
|
| Total |
| ||||
|
| Year ended December 31, 2024 |
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
REVENUE |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST OF REVENUE |
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| ( | ) |
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GROSS PROFIT |
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OTHER INCOME |
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OPERATING EXPENSES |
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Sales and marketing |
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Research and development |
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General and administrative |
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Provision for expected credit losses |
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TOTAL OPERATING EXPENSES |
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LOSS FROM OPERATIONS |
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FINANCE COSTS |
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LOSS BEFORE TAX |
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Tax expense: |
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Deferred tax |
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Income tax |
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Tax expense |
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NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
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| Provision for genomic screening services |
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| Trading of industrial chemicals |
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| Year ended December 31, 2023 |
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Segment assets |
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Included in the measure of segment assets are: |
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Addition to non-current assets other than financial instruments and deferred tax assets |
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| Provision for genomic screening services |
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| Year ended December 31, 2024 |
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Segment assets |
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Included in the measure of segment assets are: |
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Addition to non-current assets other than financial instruments and deferred tax assets |
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The Company had no inter-segment sales for the years presented.
| F-27 |
| Table of Contents |
BIONEXUS GENE LAB CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024 AND 2023
(Currency expressed in United States Dollars (“US$”))
(Audited)
NOTE 14 - SIGNIFICANT EVENTS
On January 12, 2024, our subsidiary, MRNA Scientific issued a termination notice to one of our suppliers for failing to deliver hardware of merchantable quality, for a contract with the value of MYR500,000 (approximately USD $
On 30 May 2024, the supplier had proposed to collect the hardware from MRNA Scientific premises and upon the hardware being returned intact in same condition per deliver, the supplier would refund the sum of MYR350,000 (approximately USD $
The supplier then duly refunded the sum on June 14, 2024 whereby MRNA Scientific had confirmed the receipt on June 19, 2024. MRNA Scientific then net off the receipt with fixed asset decapitalization in Balance Sheet while the remaining balance was recorded in the book as loss arising from settlement of supplier dispute in Income Statement.
On August 23, 2024, the Company, through its wholly-owned subsidiary, MRNA Scientific Sdn Bhd, finalized its strategic investment in Ascension Innovation Sdn Bhd (“AISB”), a Malaysian-based healthcare technology company. The investment, totalling RM 1 million (approximately USD 228k), was made to acquire a significant equity stake in AISB.
The funds were used to subscribe to 10,758 units of Ordinary Shares in AISB. This strategic investment is aimed at accelerating AISB’s development and deployment of its AI-driven healthcare solutions, particularly through its aiCMS platform, which integrates predictive analytics and generative AI tools for enhanced patient care.
On September 11, 2024, the Company announced that its wholly owned subsidiary, Chemrex Corporation Sdn. Bhd. invested RM 2 million (approx. USD $
On September 12, 2024, the Company announced that its wholly owned subsidiary MRNA Scientific Sdn. Bhd. had signed a strategic partnership Memorandum of Understanding with Shenzhen Rongguang Health Group (“Rongguang”), a leading healthcare provider in China. The collaboration aims to expand expertise in cancer screening, precision medicine, and preventative healthcare, focusing on early detection, personalized health solutions, and chronic disease management.
Through MRNA Scientific, the Company will enhance cancer screening across Southeast Asia and China, while both companies will jointly develop regenerative medicine technologies and preventative care solutions.
On September 14, 2024, the Company issued a press release announcing that its wholly owned subsidiary MRNA Scientific Sdn. Bhd. had signed a strategic outsourcing agreement with VITARRAY Global Pte. Ltd. (“Vitarray”), an exempted private company incorporated in Singapore. This agreement focuses on the provision of mRNA dynamic gene detection services for the Southeast Asian market.
Leveraging MRNA Scientific’s advanced testing facilities in Kuala Lumpur, the collaboration aims to enhance early disease detection, including for cancer and cardiovascular conditions, while expanding access to molecular diagnostics. Vitarray, authorized by China’s Huaxia Jingdu Renhe Medical Laboratory to manage overseas gene detection, will supply samples, and MRNA Scientific will handle testing. The agreement is expected to improve profitability and expanding market reach.
On September 23, 2024, MRNA Scientific Sdn. Bhd. (“MRNA”), a wholly-owned subsidiary of the Company, entered into a teaming agreement with Protech Builders Sdn. Bhd. (“Protech”), a Malaysian mechanical and electrical engineering firm.
Pursuant to the Agreement, the Company and Protech have agreed to collaborate on the development, marketing, and operation of biogas plants across Malaysia. The Agreement establishes a three-year term during which the parties will jointly identify and pursue biogas project opportunities, particularly focusing on converting plantation wastewater into renewable energy.
| F-28 |
| Table of Contents |
BIONEXUS GENE LAB CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024 AND 2023
(Currency expressed in United States Dollars (“US$”))
(Audited)
The 2024 Annual Meeting of Shareholders of BioNexus Gene Lab Corp. (the “Company”) was held on Friday, October 4, 2024 (“Annual Meeting”). The voting results on the five (5) proposals considered and voted on at the Annual Meeting, all of which were described in the Company's proxy statement filed with the Securities and Exchange Commission on September 16, 2024, were as follows:
Proposal 1. Re-election of Directors: The five (5) director nominees for election to the Company’s Board of Directors were elected to serve until the 2025 annual meeting of shareholders.
Proposal 2. Re-appointment of Auditor: To re-appoint JP Centurion & Partners PLT in Kuala Lumpur, Malaysia, as auditor of the Company to hold office from the conclusion of the Annual Meeting until the conclusion of the annual meeting of the Company to be held in 2025, and to approve the discretion of the Board to determine the remuneration of the same. The proposal was approved.
Proposal 3. Approval of the 2024 Stock Incentive Plan: The proposal was not approved.
Proposal 4. Approval of a Reverse Stock Split Proposal: Approval of an amendment to our Amended and Restated Certificate of Incorporation to effect a reverse stock split of our outstanding shares of common stock, no par value, at a ratio ranging from one-for-two (1:2) to one-for-ten (1:10), with the exact ratio to be set within that range at the discretion of our Board of Directors without further approval or authorization of our stockholders. The proposal was not approved.
Proposal 5. Approval of an Adjournment of the Annual Meeting: Approval of an adjournment of the Annual Meeting if necessary to solicit additional proxies if there are not sufficient votes in favor of Proposal No. 1 (the "Adjournment Proposal"). The proposal was not approved.
| F-29 |
| Table of Contents |
BIONEXUS GENE LAB CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024 AND 2023
(Currency expressed in United States Dollars (“US$”))
(Audited)
NOTE 15 – SUBSEQUENT EVENTS
In accordance with ASC Topic 855, “Subsequent 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 December 31, 2024 up through April 15, 2025 of these consolidated financial statements.
During the period, the Company did not have any material recognizable subsequent events. During the year, there was no subsequent event that required recognition or disclosure, except for those previously disclosed.
On February 11, 2025, the Company filed with the Wyoming Secretary of State Articles of Amendment to its Articles of Incorporation (a true and correct copy of which is attached hereto as Exhibit 3.6) (“Amendment”). The Amendment authorized the creation of one (1) share of the Series Z Convertible Preferred Stock. On February 10, 2025, the Company’s Board of Directors approved the creation of the Series Z Preferred Stock and the filing of the Amendment with the Wyoming Secretary of State. On that same date, the Board of Directors approved the issuance of the Series Z Preferred Stock to Muhammad Azrul bin Abdul Hamid, a member of the Board of Directors and the Audit Committee.
The purpose of the Series Z Preferred Stock was to increase the likelihood of procuring the votes necessary to effectuate the Reverse Stock Split Proposal had a majority of the common stockholders voted in favor of the Reverse Stock Split Proposal in the Special Shareholders’ Meeting. The Series Z Preferred Stock proportionately “mirrored” the votes placed by the common stockholders of the Company at the Special Shareholders’ Meeting.
On March 5, 2025, the Company issued a press release announcing that its Board of Directors had formally approved a new treasury strategy focused exclusively on Ethereum (ETH) as a strategic treasury asset. This decision positioned the Company as a leader among Nasdaq-listed companies in prioritizing Ethereum for treasury management.
In connection with this announcement, the Company released an Ethereum Strategy Whitepaper, which provided detailed insight into the rationale for adopting Ethereum as a treasury asset. The whitepaper is publicly available on the Company’s website at www.bionexusgenelab.com/ethstrategy.
On March 7, 2025, the Company issued a press release announcing a strategic partnership with ML Tech to optimize its Ethereum-based growth strategies. ML Tech, an AI-driven wealth management platform for digital assets regulated by the National Futures Association (NFA) and headquartered in Miami, Florida, will provide institutional-grade trading strategies to BGLC.
On March 19, 2025, the Company held a Special Meeting of Shareholders. Two proposals were voted on by the Shareholders and the results are as follows:
Proposal 1 (APPROVED) : Approval of an amendment to the Amended and Restated Certificate of Incorporation to effect a reverse stock split of the Company’s outstanding shares of common stock, with a ratio ranging from one-for-five (1:5) to one-for-ten (1:10), with the exact ratio to be set at the discretion of the Board of Directors.
Proposal 2 (APPROVED): Approval of an adjournment of the Meeting, if necessary, to solicit additional proxies if there were insufficient votes in favor of Proposal 1.
On April 1, 2025, the Company’s Articles of Amendment regarding the reverse stock split was filed with the Wyoming Secretary of State. At 12:01 a.m. Eastern Time on April 7, 2025, the Company effected a reverse stock split and the Company’s common stock will began trading on a split-adjusted basis on The Nasdaq Capital Market under the existing ticker symbol “BGLC” on that same day, with the new CUSIP number for the Company 090628306.
No fractional shares were issued in connection with the reverse stock split. Instead, shareholders who would otherwise be entitled to receive a fractional share received a cash payment in lieu thereof based on the daily Volume Weighted Average Price (VWAP) of our common stock, calculated for the ten (10) trading days immediately preceding the effective date of the Reverse Stock Split, multiplied by the fractional share.
| F-30 |
EXHIBIT 3.2
BYLAWS OF
BIONEXUS GENE LAB CORP.
ARTICLE I
(Offices)
Section 1.1. Principal Office. The principal office of the corporation shall be located at such place as the board shall designate. The corporation may have such other offices and places of business, either within or outside of Wyoming, as the board may designate or as the affairs of the corporation may require.
Section 1.2. Registered Office. The registered office required by the Wyoming Corporation Code may, but need not, be identical with the principal office if in Wyoming, and the address of the registered office may be changed from time to time by the board. The board shall also appoint and maintain a registered agent, or agents if necessary.
ARTICLE II
(Shareholders)
Section 2.1. Annual Meeting. Unless otherwise designated by the board, the annual meeting of shareholders shall be held during the month of May, at a time and date fixed by the board, or at such other time as may be determined by the board, for the purpose of electing directors and for the transaction of such other business as may lawfully and properly come before the meeting. If the election of directors shall not be held at the annual meeting, or at any adjournment thereof, the board shall cause the election to be held at a special meeting as soon thereafter as convenient.
Section 2.2. Special Meetings. Special meetings may be called as set forth in the Wyoming Corporation Code.
Section 2.3. Place of Meeting. The board may designate any place, either in or outside of Wyoming, as the place for any annual meeting or any special meeting called by the board. If no designation is made, or if a special meeting shall be called otherwise than by the board, the place of the meeting shall be the registered office.
Section 2.4. Notice of Meeting; Waiver. Written notice or waiver thereof shall be made in accordance with the Wyoming Corporation Code.
Section 2.5. Conduct of Meeting. The president shall call meetings to order and act as chairman. In the absence of the president, any shareholder entitled to vote at that meeting, or any proxy of such shareholder, may call the meeting to order and a chairman shall be elected by a majority of the shareholders entitled to vote at that meeting. Any person appointed by the chairman shall act as secretary of such meeting.
Section 2.6. Closing of Transfer Books or Fixing of Record Date. The Wyoming Corporation Code shall govern the closing of transfer books or the fixing of a record date for purposes of shareholders' meetings or for the purpose of determining shareholders entitled to receive payment of any dividend, or in order to make a determination of shareholders for any other proper purpose.
Section 2.7. Quorum. Unless otherwise provided by the articles of incorporation, one-third of the outstanding shares entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting. If a quorum is not represented at a meeting, a majority of the shares present may adjourn the meeting without further notice for a period not to exceed 60 days at any one adjournment. At any adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. The shareholders present at a duly convened meeting may continue to transact business until adjournment, notwithstanding the withdrawal of shareholders so that less than a quorum remains. If a quorum is present, the affirmative vote of a majority of the shares represented and entitled to vote on the subject matter shall be the act of the shareholders, unless the vote of a greater number or voting by classes is required by law or the articles of incorporation.
Section 2.8. Proxies. At all meetings, a shareholder may vote by proxy executed in writing by the shareholder or his duly authorized attorney-in-fact. Such proxy shall be filed with the secretary of the meeting before or at the time of the meeting. No proxy shall be valid after eleven (11) months from the date of its execution unless otherwise provided in the proxy.
Section 2.9. Informal Action by Shareholders. Any action required or allowed to be taken at a meeting may be taken without a meeting; provided, however, that a consent in writing setting forth the action so taken shall be signed by those shareholders entitled to vote who are sufficient to result in the passage of the matter under Wyoming law. This consent shall have the same force and effect as a vote of the shareholders, and may be stated as such in any articles or document filed with the Secretary of State for the State of Wyoming under the Wyoming Corporation Code.
ARTICLE III
(Board of Directors)
Section 3.1. General Powers. The property, business and affairs of the corporation shall be managed by the board, except as otherwise provided in the Wyoming Corporation Code or the articles of incorporation. The board shall have all powers to act as set forth in the laws of Wyoming.
Section 3.2. Performance of Duties. A director shall perform his duties in good faith, including his duties as a member of any committee upon which he may serve, and in a manner reasonably believed to be in the best interests of the corporation, and with such care as an ordinarily prudent person in a like position would use under similar circumstances. Each directors' actions shall be subject to the business judgment rule and each director shall be free from liability to the full extent provided by the Wyoming Corporation Code.
| 2 |
Section 3.3. Number, Tenure and Qualifications. The number of directors shall initially be set at the organizational meeting therefore, or unanimous consent in lieu thereof. The number of directors shall not exceed seven (7), nor be less than one (1), and the maximum number of directors may be increased by the majority vote of the then existing directors. The directors shall be elected at each annual meeting of shareholders. Each director shall hold office until the next annual meeting of shareholders and thereafter until his successor shall have been elected and qualified. Directors shall be 18 years of age or older, but need not be residents of Wyoming or shareholders. Directors shall be removable in the manner provided by the Wyoming Corporation Code. A chairman shall be elected by the initial director or later by the shareholders who will preside over the meetings.
Section 3.4. Resignation. Any director may resign at any time by giving notice (either oral or written) of his resignation to the board, the president or the secretary. The resignation shall take effect at the date of receipt of such notice or at any later time specified therein and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
Section 3.5. Removal. Except as otherwise provided in the articles of incorporation or in these bylaws, any director may be removed, either with or without cause, at any time by the affirmative vote of the holders of a majority of the issued and outstanding shares of stock entitled to vote for the election of directors at a special meeting of the shareholders called and held for such purpose.
Section 3.6. Vacancies. Any vacancy occurring in the board may be filled by the affirmative vote of a majority of the remaining directors though less than a quorum.
Section 3.7. Regular Meetings. A regular meeting of the board shall be held without other notice than this bylaw immediately after and at the same place as the annual meeting of shareholders. The board may provide by resolution the time and place, either within or outside of Wyoming, for the holding of additional regular meetings without other notice than such resolution.
Section 3.8. Notice. Notice of any special meeting shall be given at least forty-eight (48) hours previous thereto by written notice delivered personally, by email (to the email address on record for each such director) or mailed to each director at his business address. Such notice shall be deemed to be delivered when deposited in the United States mail so addressed, with postage thereon prepaid.
Section 3.9. Quorum. A majority of the number of directors in office at the time of the meeting shall constitute a quorum for the transaction of business, but if less than such a majority is present, a majority of the directors present may adjourn the meeting from time to time without further notice.
| 3 |
Section 3.10. Manner of Acting. If a quorum is present, the affirmative vote of a majority present and entitled to vote on that particular matter shall be the act of the board, unless the vote of a greater number is required by law or the articles of incorporation.
Section 3.11. Compensation. By resolution of the board, any director may be reimbursed for all reasonable expenses incurred in attending any meeting and may be paid a fixed sum for attendance at such meeting, or receive a stated salary as director. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor.
Section 3.12. Committees. The board, by resolution adopted by a majority elected and qualified at the time of the resolution, may designate two or more directors to constitute an executive or any other committee, which shall have and may exercise all of the authority of the board or such lesser authority as may be set forth in said resolution. No such delegation of authority shall operate to relieve the board or any director from any responsibility imposed by law. The board shall at any time have the power to fill vacancies in, to change the size or constituent membership of and to discharge any committee in whole or in part. Each committee shall keep a written record of its acts and proceedings and shall submit this record to the board at each regular meeting thereof and at such other times as may be requested by the board. Failure to submit this record or of the board to approve any action set forth therein shall not invalidate any action taken by the committee to the extent the action was carried out prior to the time it was or should have been submitted to the board.
Section 3.13. Informal Action by Directors. Any action required or permitted to be taken at a meeting of directors, or at any meeting of any committee of directors, may be taken without a meeting if a consent in writing setting forth the action so taken shall be signed by all directors entitled to vote with respect to the subject matter thereof. Such consent shall have the same force and effect as a unanimous vote of the directors, and may be stated as such in any articles or documents filed with the Secretary of State for the State of Wyoming under the Wyoming Corporation Code.
Section 3.14. Meetings by Telephone. Members of the board or any committee may participate in a meeting by means of conference telephone or similar communications equipment by which all persons participating in the meeting can hear each other at the same time. Such participation shall constitute presence in person.
| 4 |
ARTICLE IV
(Officers and Agents)
Section 4.1. General. The officers shall initially be a chairman, president, a secretary and a treasurer, each of whom shall be elected by the board. The board may also appoint one or more vice presidents and such other officers, assistant treasurers, and assistant secretaries as may be necessary, each of whom shall be chosen in such manner and hold office for such terms and have such authority and duties as from time to time may be determined by the board, or which may otherwise be commensurate with their position. The salaries of all the officers shall be fixed by the board. One person may hold any two offices, except that no person may simultaneously hold the offices of president and secretary. The officers shall be 18 years of age or older. In all cases where the duties of any officer, agent or employee are not prescribed by the bylaws or by the board, such officer, agent or employee shall follow the orders and instructions of (a) the president, or if a chairman of the board has been elected, then (b) the chairman. A Chairman of the Board, if there is one, will preside over meetings of the shareholders and the Board of Directors. Except as required by law, the Chairman of the Board possesses the same power as the President of the Corporation to sign all agreements, documents, certificates and other instruments as an officer of the Corporation. The Chairman of the Board may perform such other duties and have such powers as assigned to him by the Board of Directors.
Section 4.2. Election and Term in Office. The officers shall be elected by the board annually at the first meeting held after each annual meeting of the shareholders. If the election of officers shall not be held at such meeting, such election shall be held as soon thereafter as may be convenient. Each officer shall hold office until the first of the following occurs: until his successor shall have been duly elected and shall have qualified; until his death; until he shall resign; or until he shall have been removed in the manner hereinafter provided.
Section 4.3. Removal. Any officer, agent or employee may be removed by the board or by an executive committee, if any, whenever in its judgement the best interests of the corporation will be served thereby, but such removal shall be without prejudice to the contracts rights, if any, of the person so removed. Election or appointment of an officer or agent shall not of itself create contract rights.
Section 4.4. Vacancies. A vacancy in any office, however occurring, may be filled by the board for the unexpired portion of the term.
Section 4.5. Bonds. If the board by resolution shall so require, any officer or agent of the corporation shall give bond to the corporation in such amount and with such surety as the board, may deem sufficient, conditioned upon the faithful performance of that officer's or agent's duties and offices.
| 5 |
ARTICLE V
(Stock)
Section 5.1. Certificates. The shares of stock shall be represented by consecutively numbered certificates signed in the name of the corporation by its president or a vice president and by the secretary or an assistant secretary, and shall be sealed with the seal of the corporation, if any. Certificates of stock shall be in such form consistent with law as shall be prescribed by the board. No certificate shall be issued until the shares represented thereby are fully paid. Once issued, shares shall be nonassessable.
Section 5.2. Record. A record shall be kept of the name of each person or other entity holding the stock represented by each certificate for shares of the corporation issued, the number of shares represented by each such certificate, the date of issuance and, in the case of cancellation, the date of cancellation. The person or other entity in whose name shares of stock stand on the books of the corporation shall be deemed the owner thereof, and thus the holder of record of such shares of stock for all purposes.
ARTICLE VI
(Indemnification of Officers and Directors)
The corporation has the power to indemnify current or former directors, officers, employees, and agents to the fullest extent provided in its Articles of Incorporation and by the Wyoming Corporation Code as amended and in effect on the date of the adoption of this article.
ARTICLE VII
(Instruments; Loans, Checks, Deposits; Proxies)
Section 7.1. Execution of Instruments. The president shall have the power to execute and deliver on behalf of and in the name of the corporation any instrument requiring the signature of an officer of the corporation, except as otherwise provided in the articles of incorporation or these bylaws or where the execution and delivery thereof shall be expressly delegated by the board to some other officer or agent of the corporation. Unless authorized to do so by these bylaws or by the board, no officer, agent or employee shall have any power or authority to bind the corporation in any way, to pledge its credit or to render it liable pecuniarily for any purpose or in any amount.
Section 7.2. Loans. The corporation may lend money to, guarantee the obligations of and otherwise assist directors, officers and employees of the corporation, or directors of another corporation of which the corporation owns a majority of the voting stock, only upon compliance with the requirements of the Wyoming Corporation Code. No loans shall be contracted for on behalf of the corporation and no evidence of indebtedness shall be issued in its name unless authorized by a resolution of the board. Such authority may be general or confined to specific instances.
| 6 |
ARTICLE VIII
(Miscellaneous)
Section 8.1. Amendments. The board shall have the power to alter, amend or repeal the bylaws or adopt new bylaws of the corporation at any regular meeting of the board or at any special meeting called for that purpose, subject to repeal or change by action of the shareholders.
Section 8.2. Emergency Bylaws. Subject to repeal or change by action of the shareholders, the board may adopt emergency bylaws in accordance with and pursuant to the provisions of the Wyoming Corporation Code.
The above and foregoing constitute the true, correct and complete bylaws of Bionexus Gene Lab Corp., a Wyoming corporation, as adopted by its directors on September 4, 2024.
| 7 |
EXHIBIT 3.6
EXHIBIT 3.7
EXHIBIT 10.3
March 26, 2024
Re: Director Offer Letter – Su-Leng Tan Lee
Dear Mr. Tan Lee:
BioNexus Gene Lab Corp., a Wyoming corporation (the “Company” or “we”), is pleased to offer you a position as a Director of the Company. We believe your background and experience will be a significant asset to the Company and we look forward to your participation as a Director in the Company. Should you choose to accept this position as a Director, this letter agreement (the “Agreement”) shall constitute an agreement between you and the Company and contains all the terms and conditions relating to the services you agree to provide to the Company.
1. Term. This Agreement is effective as of the date of this Agreement. Your term as a Director shall continue subject to the provisions in Section 9 below or until your successor is duly elected and qualified. The position shall be up for re-appointment every year by the board of the Directors of the Company (the “Board”) and upon re-appointment, the terms and provisions of this Agreement shall remain in full force and effect.
2. Services. You shall render customary services as a Director (hereinafter, your “Duties”), which may be subject to change based on the Company’s appointment adjustments. During the term of this Agreement, you may attend and participate at each meeting regarding the business and operation issues of the Company as regularly or specially called, via teleconference, video conference or in person. You shall consult with the members of the Board and committee (if any) regularly and as necessary via telephone, electronic mail or other forms of correspondence.
3. Services for Others. You shall be free to represent or perform services for other persons during the term of this Agreement.
4. Compensation. As compensation for your services to the Company, you will receive upon execution of this Agreement a compensation of USD1,000 per month. Additional fees based on the Compensation Committee Schedule for Committee Membership or Chairmanship will also be provided as calculated.
5. D&O Insurance Policy. During the term under this Agreement, the Company shall include you as an insured under its officers and directors insurance policy, if available.
6. No Assignment. Because of the personal nature of the services to be rendered by you, this Agreement may not be assigned by you without the prior written consent of the Company.
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7. Confidential Information; Non-Disclosure. In consideration of your access to certain Confidential Information (as defined below) of the Company, in connection with your business relationship with the Company, you hereby represent and agree as follows:
a. Definition. For purposes of this Agreement the term “Confidential Information” means: (i) any information which the Company possesses that has been created, discovered or developed by or for the Company, and which has or could have commercial value or utility in the business in which the Company is engaged; (ii) any information which is related to the business of the Company and is generally not known by non-Company personnel; and (iii) Confidential Information includes, without limitation, trade secrets and any information concerning products, processes, formulas, designs, inventions (whether or not patentable or registrable under copyright or similar laws, and whether or not reduced to practice), discoveries, concepts, ideas, improvements, techniques, methods, research, development and test results, specifications, data, know-how, software, formats, marketing plans, and analyses, business plans and analyses, strategies, forecasts, customer and supplier identities, characteristics and agreements.
b. Exclusions. Notwithstanding the foregoing, the term Confidential Information shall not include: (i) any information which becomes generally available or is readily available to the public other than as a result of a breach of the confidentiality portions of this Agreement, or any other agreement requiring confidentiality between the Company and you; (ii) information received from a third party in rightful possession of such information who is not restricted from disclosing such information; (iii) information known by you prior to receipt of such information from the Company, which prior knowledge can be documented and (iv) information you are required to disclose pursuant to any applicable law, regulation, judicial or administrative order or decree, or request by other regulatory organization having authority pursuant to the law; provided, however, that you shall first have given prior written notice to the Company and made a reasonable effort to obtain a protective order requiring that the Confidential Information not be disclosed.
c. Documents. You agree that, without the express written consent of the Company, you will not remove from the Company's premises, any notes, formulas, programs, data, records, machines or any other documents or items which in any manner contain or constitute Confidential Information, nor will you make reproductions or copies of same. You shall promptly return any such documents or items, along with any reproductions or copies to the Company upon the Company's demand, upon termination of this Agreement, or upon your termination or Resignation (as defined in Section 9 herein).
d. Confidentiality. You agree that you will hold in trust and confidence all Confidential Information and will not disclose to others, directly or indirectly, any Confidential Information or anything relating to such information without the prior written consent of the Company, except as may be necessary in the course of your business relationship with the Company. You further agree that you will not use any Confidential Information without the prior written consent of the Company, except as may be necessary in the course of your business relationship with the Company, and that the provisions of this paragraph (d) shall survive termination of this Agreement. Notwithstanding the foregoing, you may disclose Confidential Information to your legal counsel and accounting advisors who have a need to know such information for accounting or tax purposes and who agree to be bound by the provisions of this paragraph (d).
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e. Ownership. You agree that the Company shall own all right, title and interest (including patent rights, copyrights, trade secret rights, mask work rights, trademark rights, and all other intellectual and industrial property rights of any sort throughout the world) relating to any and all inventions (whether or not patentable), works of authorship, mask works, designations, designs, know-how, ideas and information made or conceived or reduced to practice, in whole or in part, by you during the term of this Agreement and that arise out of your Duties (collectively, “Inventions”) and you will promptly disclose and provide all Inventions to the Company. You agree to assist the Company, at its expense, to further evidence, record and perfect such assignments, and to perfect, obtain, maintain, enforce, and defend any rights assigned.
8. Non-Solicitation. During the term of your appointment, you shall not solicit for employment any employee of the Company with whom you have had contact due to your appointment.
9. Termination and Resignation. Your services as a Director may be terminated for any or no reason by the determination of the Board. You may also terminate your services as a Director for any or no reason by delivering your written notice of resignation to the Company (“Resignation”), and such Resignation shall be effective upon the time specified therein or, if no time is specified, upon receipt of the notice of resignation by the Company. Upon the effective date of the termination or Resignation, your right to compensation hereunder will terminate subject to the Company's obligations to pay you any compensation that you have already earned and to reimburse you for approved expenses already incurred in connection with your performance of your Duties as of the effective date of such termination or Resignation.
10. Governing Law; Arbitration. All questions with respect to the construction and/or enforcement of this Agreement, and the rights and obligations of the parties hereunder, shall be determined in accordance with the law of the State of New York. All disputes with respect to this Agreement, including the existence, validity, interpretation, performance, breach or termination thereof or any dispute regarding non-contractual obligations arising out of or relating to it shall be referred to and finally resolved by arbitration administered by the American Arbitration Association at its New York office in force when the Notice of Arbitration is submitted. The law of this arbitration clause shall be New York law. The seat of arbitration shall be in New York. The number of arbitrators shall be one. The arbitration proceedings shall be conducted in English.
11. Entire Agreement; Amendment; Waiver; Counterparts. This Agreement expresses the entire understanding with respect to the subject matter hereof and supersedes and terminates any prior oral or written agreements with respect to the subject matter hereof. Any term of this Agreement may be amended and observance of any term of this Agreement may be waived only with the written consent of the parties hereto. Waiver of any term or condition of this Agreement by any party shall not be construed as a waiver of any subsequent breach or failure of the same term or condition or waiver of any other term or condition of this Agreement. The failure of any party at any time to require performance by any other party of any provision of this Agreement shall not affect the right of any such party to require future performance of such provision or any other provision of this Agreement. This Agreement may be executed in separate counterparts each of which will be an original and all of which taken together will constitute one and the same agreement, and may be executed using facsimiles of signatures, and a facsimile of a signature shall be deemed to be the same, and equally enforceable, as an original of such signature.
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12. Indemnification. The Company shall, to the maximum extent provided under applicable law, indemnify and hold you harmless from and against any expenses, including reasonable attorney’s fees, judgments, fines, settlements and other legally permissible amounts (“Losses”), incurred in connection with any proceeding arising out of, or related to, your performance of your Duties, other than any such Losses incurred as a result of your gross negligence or willful misconduct. The Company shall advance to you any expenses, including reasonable attorneys’ fees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law. Such costs and expenses incurred by you in defense of any such proceeding shall be paid by the Company in advance of the final disposition of such proceeding promptly upon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing the incurrence, amount and nature of the costs and expenses for which payment is being sought; and (c) an undertaking adequate under applicable law made by or on your behalf to repay the amounts so advanced if it shall ultimately be determined pursuant to any non-appealable judgment or settlement that you are not entitled to be indemnified by the Company.
13. Acknowledgement. You accept this Agreement subject to all the terms and provisions of this Agreement. You agree to accept as binding, conclusive, and final all decisions or interpretations of the Board of Directors of the Company of any questions arising under this Agreement.
The Agreement has been executed and delivered by the undersigned and is made effective as of the date set first set forth above.
Sincerely,
BioNexus Gene Lab Corp.
| By: | /s/ Muhammad Azrul bin Abdul Hamid |
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| Muhammad Azrul bin Abdul Hamid |
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| Chairman, Nomination Committee |
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AGREED AND ACCEPTED:
| /s/ Su-Leng Tan Lee |
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Su-Leng Tan Lee
| 4 |
EXHIBIT 10.4
March 26, 2024
Re: Director Offer Letter – Muhammad Azrul bin Abdul Hamid
Dear Mr. Muhammad Azrul bin Abdul Hamid:
BioNexus Gene Lab Corp., a Wyoming corporation (the “Company” or “we”), is pleased to offer you a position as a Director of the Company. We believe your background and experience will be a significant asset to the Company and we look forward to your participation as a Director in the Company. Should you choose to accept this position as a Director, this letter agreement (the “Agreement”) shall constitute an agreement between you and the Company and contains all the terms and conditions relating to the services you agree to provide to the Company.
1. Term. This Agreement is effective as of the date of this Agreement. Your term as a Director shall continue subject to the provisions in Section 9 below or until your successor is duly elected and qualified. The position shall be up for re-appointment every year by the board of the Directors of the Company (the “Board”) and upon re-appointment, the terms and provisions of this Agreement shall remain in full force and effect.
2. Services. You shall render customary services as a Director (hereinafter, your “Duties”), which may be subject to change based on the Company’s appointment adjustments. During the term of this Agreement, you may attend and participate at each meeting regarding the business and operation issues of the Company as regularly or specially called, via teleconference, video conference or in person. You shall consult with the members of the Board and committee (if any) regularly and as necessary via telephone, electronic mail or other forms of correspondence.
3. Services for Others. You shall be free to represent or perform services for other persons during the term of this Agreement.
4. Compensation. As compensation for your services to the Company, you will receive upon execution of this Agreement a compensation of USD1,000 per month. Additional fees based on the Compensation Committee Schedule for Committee Membership or Chairmanship will also be provided as calculated.
5. D&O Insurance Policy. During the term under this Agreement, the Company shall include you as an insured under its officers and directors insurance policy, if available.
6. No Assignment. Because of the personal nature of the services to be rendered by you, this Agreement may not be assigned by you without the prior written consent of the Company.
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7. Confidential Information; Non-Disclosure. In consideration of your access to certain Confidential Information (as defined below) of the Company, in connection with your business relationship with the Company, you hereby represent and agree as follows:
a. Definition. For purposes of this Agreement the term “Confidential Information” means: (i) any information which the Company possesses that has been created, discovered or developed by or for the Company, and which has or could have commercial value or utility in the business in which the Company is engaged; (ii) any information which is related to the business of the Company and is generally not known by non-Company personnel; and (iii) Confidential Information includes, without limitation, trade secrets and any information concerning products, processes, formulas, designs, inventions (whether or not patentable or registrable under copyright or similar laws, and whether or not reduced to practice), discoveries, concepts, ideas, improvements, techniques, methods, research, development and test results, specifications, data, know-how, software, formats, marketing plans, and analyses, business plans and analyses, strategies, forecasts, customer and supplier identities, characteristics and agreements.
b. Exclusions. Notwithstanding the foregoing, the term Confidential Information shall not include: (i) any information which becomes generally available or is readily available to the public other than as a result of a breach of the confidentiality portions of this Agreement, or any other agreement requiring confidentiality between the Company and you; (ii) information received from a third party in rightful possession of such information who is not restricted from disclosing such information; (iii) information known by you prior to receipt of such information from the Company, which prior knowledge can be documented and (iv) information you are required to disclose pursuant to any applicable law, regulation, judicial or administrative order or decree, or request by other regulatory organization having authority pursuant to the law; provided, however, that you shall first have given prior written notice to the Company and made a reasonable effort to obtain a protective order requiring that the Confidential Information not be disclosed.
c. Documents. You agree that, without the express written consent of the Company, you will not remove from the Company's premises, any notes, formulas, programs, data, records, machines or any other documents or items which in any manner contain or constitute Confidential Information, nor will you make reproductions or copies of same. You shall promptly return any such documents or items, along with any reproductions or copies to the Company upon the Company's demand, upon termination of this Agreement, or upon your termination or Resignation (as defined in Section 9 herein).
d. Confidentiality. You agree that you will hold in trust and confidence all Confidential Information and will not disclose to others, directly or indirectly, any Confidential Information or anything relating to such information without the prior written consent of the Company, except as may be necessary in the course of your business relationship with the Company. You further agree that you will not use any Confidential Information without the prior written consent of the Company, except as may be necessary in the course of your business relationship with the Company, and that the provisions of this paragraph (d) shall survive termination of this Agreement. Notwithstanding the foregoing, you may disclose Confidential Information to your legal counsel and accounting advisors who have a need to know such information for accounting or tax purposes and who agree to be bound by the provisions of this paragraph (d).
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e. Ownership. You agree that the Company shall own all right, title and interest (including patent rights, copyrights, trade secret rights, mask work rights, trademark rights, and all other intellectual and industrial property rights of any sort throughout the world) relating to any and all inventions (whether or not patentable), works of authorship, mask works, designations, designs, know-how, ideas and information made or conceived or reduced to practice, in whole or in part, by you during the term of this Agreement and that arise out of your Duties (collectively, “Inventions”) and you will promptly disclose and provide all Inventions to the Company. You agree to assist the Company, at its expense, to further evidence, record and perfect such assignments, and to perfect, obtain, maintain, enforce, and defend any rights assigned.
8. Non-Solicitation. During the term of your appointment, you shall not solicit for employment any employee of the Company with whom you have had contact due to your appointment.
9. Termination and Resignation. Your services as a Director may be terminated for any or no reason by the determination of the Board. You may also terminate your services as a Director for any or no reason by delivering your written notice of resignation to the Company (“Resignation”), and such Resignation shall be effective upon the time specified therein or, if no time is specified, upon receipt of the notice of resignation by the Company. Upon the effective date of the termination or Resignation, your right to compensation hereunder will terminate subject to the Company's obligations to pay you any compensation that you have already earned and to reimburse you for approved expenses already incurred in connection with your performance of your Duties as of the effective date of such termination or Resignation.
10. Governing Law; Arbitration. All questions with respect to the construction and/or enforcement of this Agreement, and the rights and obligations of the parties hereunder, shall be determined in accordance with the law of the State of New York. All disputes with respect to this Agreement, including the existence, validity, interpretation, performance, breach or termination thereof or any dispute regarding non-contractual obligations arising out of or relating to it shall be referred to and finally resolved by arbitration administered by the American Arbitration Association at its New York office in force when the Notice of Arbitration is submitted. The law of this arbitration clause shall be New York law. The seat of arbitration shall be in New York. The number of arbitrators shall be one. The arbitration proceedings shall be conducted in English.
11. Entire Agreement; Amendment; Waiver; Counterparts. This Agreement expresses the entire understanding with respect to the subject matter hereof and supersedes and terminates any prior oral or written agreements with respect to the subject matter hereof. Any term of this Agreement may be amended and observance of any term of this Agreement may be waived only with the written consent of the parties hereto. Waiver of any term or condition of this Agreement by any party shall not be construed as a waiver of any subsequent breach or failure of the same term or condition or waiver of any other term or condition of this Agreement. The failure of any party at any time to require performance by any other party of any provision of this Agreement shall not affect the right of any such party to require future performance of such provision or any other provision of this Agreement. This Agreement may be executed in separate counterparts each of which will be an original and all of which taken together will constitute one and the same agreement, and may be executed using facsimiles of signatures, and a facsimile of a signature shall be deemed to be the same, and equally enforceable, as an original of such signature.
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12. Indemnification. The Company shall, to the maximum extent provided under applicable law, indemnify and hold you harmless from and against any expenses, including reasonable attorney’s fees, judgments, fines, settlements and other legally permissible amounts (“Losses”), incurred in connection with any proceeding arising out of, or related to, your performance of your Duties, other than any such Losses incurred as a result of your gross negligence or willful misconduct. The Company shall advance to you any expenses, including reasonable attorneys’ fees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law. Such costs and expenses incurred by you in defense of any such proceeding shall be paid by the Company in advance of the final disposition of such proceeding promptly upon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing the incurrence, amount and nature of the costs and expenses for which payment is being sought; and (c) an undertaking adequate under applicable law made by or on your behalf to repay the amounts so advanced if it shall ultimately be determined pursuant to any non-appealable judgment or settlement that you are not entitled to be indemnified by the Company.
13. Acknowledgement. You accept this Agreement subject to all the terms and provisions of this Agreement. You agree to accept as binding, conclusive, and final all decisions or interpretations of the Board of Directors of the Company of any questions arising under this Agreement.
The Agreement has been executed and delivered by the undersigned and is made effective as of the date set first set forth above.
Sincerely,
BioNexus Gene Lab Corp.
| By: | /s/ Muhammad Azrul bin Abdul Hamid |
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| Muhammad Azrul bin Abdul Hamid |
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| Chairman, Nomination Committee |
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AGREED AND ACCEPTED:
| /s/ Muhammad Azrul bin Abdul Hamid |
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Muhammad Azrul bin Abdul Hamid
| 4 |
EXHIBIT 10.5
November 5, 2024
Re: Director Offer Letter – Jook Yuen Low
Dear Ms. Jook Yuen Low:
BioNexus Gene Lab Corp., a Wyoming corporation (the “Company” or “we”), is pleased to offer you a position as a Director of the Company. We believe your background and experience will be a significant asset to the Company and we look forward to your participation as a Director in the Company. Should you choose to accept this position as a Director, this letter agreement (the “Agreement”) shall constitute an agreement between you and the Company and contains all the terms and conditions relating to the services you agree to provide to the Company.
1. Term. This Agreement is effective as of the date of this Agreement. Your term as a Director shall continue subject to the provisions in Section 9 below or until your successor is duly elected and qualified. The position shall be up for re-appointment every year by the board of the Directors of the Company (the “Board”) and upon re-appointment, the terms and provisions of this Agreement shall remain in full force and effect.
2. Services. You shall render customary services as a Director (hereinafter, your “Duties”), which may be subject to change based on the Company’s appointment adjustments. During the term of this Agreement, you may attend and participate at each meeting regarding the business and operation issues of the Company as regularly or specially called, via teleconference, video conference or in person. You shall consult with the members of the Board and committee (if any) regularly and as necessary via telephone, electronic mail or other forms of correspondence.
3. Services for Others. You shall be free to represent or perform services for other persons during the term of this Agreement.
4. Compensation. As compensation for your services to the Company, you will receive upon execution of this Agreement a compensation of USD1,000 per month. Additional fees based on the Compensation Committee Schedule for Committee Membership or Chairmanship will also be provided as calculated.
5. D&O Insurance Policy. During the term under this Agreement, the Company shall include you as an insured under its officers and directors insurance policy, if available.
6. No Assignment. Because of the personal nature of the services to be rendered by you, this Agreement may not be assigned by you without the prior written consent of the Company.
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7. Confidential Information; Non-Disclosure. In consideration of your access to certain Confidential Information (as defined below) of the Company, in connection with your business relationship with the Company, you hereby represent and agree as follows:
a. Definition. For purposes of this Agreement the term “Confidential Information” means: (i) any information which the Company possesses that has been created, discovered or developed by or for the Company, and which has or could have commercial value or utility in the business in which the Company is engaged; (ii) any information which is related to the business of the Company and is generally not known by non-Company personnel; and (iii) Confidential Information includes, without limitation, trade secrets and any information concerning products, processes, formulas, designs, inventions (whether or not patentable or registrable under copyright or similar laws, and whether or not reduced to practice), discoveries, concepts, ideas, improvements, techniques, methods, research, development and test results, specifications, data, know-how, software, formats, marketing plans, and analyses, business plans and analyses, strategies, forecasts, customer and supplier identities, characteristics and agreements.
b. Exclusions. Notwithstanding the foregoing, the term Confidential Information shall not include: (i) any information which becomes generally available or is readily available to the public other than as a result of a breach of the confidentiality portions of this Agreement, or any other agreement requiring confidentiality between the Company and you; (ii) information received from a third party in rightful possession of such information who is not restricted from disclosing such information; (iii) information known by you prior to receipt of such information from the Company, which prior knowledge can be documented and (iv) information you are required to disclose pursuant to any applicable law, regulation, judicial or administrative order or decree, or request by other regulatory organization having authority pursuant to the law; provided, however, that you shall first have given prior written notice to the Company and made a reasonable effort to obtain a protective order requiring that the Confidential Information not be disclosed.
c. Documents. You agree that, without the express written consent of the Company, you will not remove from the Company's premises, any notes, formulas, programs, data, records, machines or any other documents or items which in any manner contain or constitute Confidential Information, nor will you make reproductions or copies of same. You shall promptly return any such documents or items, along with any reproductions or copies to the Company upon the Company's demand, upon termination of this Agreement, or upon your termination or Resignation (as defined in Section 9 herein).
d. Confidentiality. You agree that you will hold in trust and confidence all Confidential Information and will not disclose to others, directly or indirectly, any Confidential Information or anything relating to such information without the prior written consent of the Company, except as may be necessary in the course of your business relationship with the Company. You further agree that you will not use any Confidential Information without the prior written consent of the Company, except as may be necessary in the course of your business relationship with the Company, and that the provisions of this paragraph (d) shall survive termination of this Agreement. Notwithstanding the foregoing, you may disclose Confidential Information to your legal counsel and accounting advisors who have a need to know such information for accounting or tax purposes and who agree to be bound by the provisions of this paragraph (d).
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e. Ownership. You agree that the Company shall own all right, title and interest (including patent rights, copyrights, trade secret rights, mask work rights, trademark rights, and all other intellectual and industrial property rights of any sort throughout the world) relating to any and all inventions (whether or not patentable), works of authorship, mask works, designations, designs, know-how, ideas and information made or conceived or reduced to practice, in whole or in part, by you during the term of this Agreement and that arise out of your Duties (collectively, “Inventions”) and you will promptly disclose and provide all Inventions to the Company. You agree to assist the Company, at its expense, to further evidence, record and perfect such assignments, and to perfect, obtain, maintain, enforce, and defend any rights assigned.
8. Non-Solicitation. During the term of your appointment, you shall not solicit for employment any employee of the Company with whom you have had contact due to your appointment.
9. Termination and Resignation. Your services as a Director may be terminated for any or no reason by the determination of the Board. You may also terminate your services as a Director for any or no reason by delivering your written notice of resignation to the Company (“Resignation”), and such Resignation shall be effective upon the time specified therein or, if no time is specified, upon receipt of the notice of resignation by the Company. Upon the effective date of the termination or Resignation, your right to compensation hereunder will terminate subject to the Company's obligations to pay you any compensation that you have already earned and to reimburse you for approved expenses already incurred in connection with your performance of your Duties as of the effective date of such termination or Resignation.
10. Governing Law; Arbitration. All questions with respect to the construction and/or enforcement of this Agreement, and the rights and obligations of the parties hereunder, shall be determined in accordance with the law of the State of New York. All disputes with respect to this Agreement, including the existence, validity, interpretation, performance, breach or termination thereof or any dispute regarding non-contractual obligations arising out of or relating to it shall be referred to and finally resolved by arbitration administered by the American Arbitration Association at its New York office in force when the Notice of Arbitration is submitted. The law of this arbitration clause shall be New York law. The seat of arbitration shall be in New York. The number of arbitrators shall be one. The arbitration proceedings shall be conducted in English.
11. Entire Agreement; Amendment; Waiver; Counterparts. This Agreement expresses the entire understanding with respect to the subject matter hereof and supersedes and terminates any prior oral or written agreements with respect to the subject matter hereof. Any term of this Agreement may be amended and observance of any term of this Agreement may be waived only with the written consent of the parties hereto. Waiver of any term or condition of this Agreement by any party shall not be construed as a waiver of any subsequent breach or failure of the same term or condition or waiver of any other term or condition of this Agreement. The failure of any party at any time to require performance by any other party of any provision of this Agreement shall not affect the right of any such party to require future performance of such provision or any other provision of this Agreement. This Agreement may be executed in separate counterparts each of which will be an original and all of which taken together will constitute one and the same agreement, and may be executed using facsimiles of signatures, and a facsimile of a signature shall be deemed to be the same, and equally enforceable, as an original of such signature.
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12. Indemnification. The Company shall, to the maximum extent provided under applicable law, indemnify and hold you harmless from and against any expenses, including reasonable attorney’s fees, judgments, fines, settlements and other legally permissible amounts (“Losses”), incurred in connection with any proceeding arising out of, or related to, your performance of your Duties, other than any such Losses incurred as a result of your gross negligence or willful misconduct. The Company shall advance to you any expenses, including reasonable attorneys’ fees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law. Such costs and expenses incurred by you in defense of any such proceeding shall be paid by the Company in advance of the final disposition of such proceeding promptly upon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing the incurrence, amount and nature of the costs and expenses for which payment is being sought; and (c) an undertaking adequate under applicable law made by or on your behalf to repay the amounts so advanced if it shall ultimately be determined pursuant to any non-appealable judgment or settlement that you are not entitled to be indemnified by the Company.
13. Acknowledgement. You accept this Agreement subject to all the terms and provisions of this Agreement. You agree to accept as binding, conclusive, and final all decisions or interpretations of the Board of Directors of the Company of any questions arising under this Agreement.
The Agreement has been executed and delivered by the undersigned and is made effective as of the date set first set forth above.
Sincerely,
BioNexus Gene Lab Corp.
| By: | /s/ Muhammad Azrul bin Abdul Hamid |
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| Muhammad Azrul bin Abdul Hamid |
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| Chairman, Nomination Committee |
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AGREED AND ACCEPTED:
| /s/ Jook Yuen Low |
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Jook Yuen Low
| 4 |
EXHIBIT 21
Subsidiaries
MRNA Scientific Sdn. Bhd., a Malaysian corporation
Chemrex Corporation Sdn. Bhd., a Malaysian corporation
EXHIBIT 31.1
CERTIFICATION
I, Chief Executive Officer of BioNexus Gene Lab Corp. (the “Registrant”), certify that:
| 1. | I have reviewed this Annual Report on Form 10-K of the Registrant for the fiscal year ended December 31, 2024; |
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| 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, considering the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
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| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, 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; |
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| 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: |
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| (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; |
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| (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; |
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| (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 |
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| (d) | Concluded that the registrant’s disclosure controls and procedures were not effective as of December 31, 2024 due to a significant deficiency in internal control over financial reporting, identified in the operations of Chemrex Corporation Sdn. Bhd., a wholly owned subsidiary; and |
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| (e) | 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. |
| 5. | The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions): |
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| (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 |
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| (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. |
| Dated: April 15, 2025 | By: | /s/ Su-Leng Tan Lee |
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| Su-Leng Tan Lee |
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| Chief Executive Officer |
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| (Principal Executive Officer) and Acting Chief Financial Officer (Principal Financial and Accounting Officer) |
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EXHIBIT 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of BioNexus Gene Lab Corp. (the “Company”) on Form 10-K for the year ended December 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
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| 1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
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| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
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| BioNexus Gene Lab Corp. |
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| Dated: April 15, 2025 | By: | /s/ Su-Leng Tan Lee |
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| Su-Leng Tan Lee |
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| Chief Executive Officer (Principal Executive Officer) and Acting Chief Financial Officer |
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| (Principal Financial and Accounting Officer) |
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