BioNexus Gene Lab Corp 10-Q for FY2023 Q2
BioNexus Gene Lab Corp (BGLC)
About this 10-Q
BioNexus Gene Lab Corp filed this 10-Q on August 16, 2023, covering the quarter ended June 30, 2023 (FY2023 Q2).
Headline figures
Quarter ended June 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $2.57M
- up 3.3% from $2.49M a year earlier
- Net loss
- $259.25K
- compared with a net loss of $138.66K a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _____________
Commission File Number:
(Exact name of registrant as specified in its charter) |
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(State or Other Jurisdiction of Incorporation or Organization) |
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(Address of Principal Executive Offices) |
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(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
The |
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, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer, “ “ accelerated filer, “ “non-accelerated filer ,” “ smaller reporting company, “ and “ emerging growth company “ in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer | ☐ | Accelerated filer | ☐ |
☒ | Smaller reporting company | ||
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| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of August 14, 2023, there were
TABLE OF CONTENTS
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Item 1. | Financial Statements |
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Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
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Item 4. | Controls and Procedures |
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PART II – OTHER INFORMATION |
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Item 1. | Legal Proceedings |
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Item 2. | Unregistered Sale of Equity Securities and Use of Proceeds |
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Item 3. | Defaults Upon Senior Securities |
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Item 4. | Mine Safety Disclosures |
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Item 5. | Other Information |
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Item 6. | Exhibits |
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SIGNATURES |
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| Table of Contents |
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains statements that may be deemed to be “forward-looking statements” within the meaning of the federal securities laws. These statements relate to anticipated future events, future results of operations and or future financial performance. In some cases, you can identify forward-looking statements by their use of terminology such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “future,” “intend,” “may,” “ought to,” “plan,” “possible,” “potentially,” “predicts,” “project,” “should,” “will,” “would,” negatives of such terms or other similar terms. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. The forward-looking statements in this Quarterly Report on Form 10-Q include, without limitation, statements relating to:
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| ● | our future business development, results of operations and financial condition; |
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| ● | our estimates regarding expenses, future revenues, capital requirements and our need for additional financing; |
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| ● | our estimates regarding the market opportunity for our services; |
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| ● | the impact of government laws and regulations; |
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| ● | our ability to recruit and retain qualified personnel; |
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| ● | our failure to comply with regulatory guidelines; |
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| ● | uncertainty in industry demand; |
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| ● | general economic conditions and market conditions in the financial services industry; |
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| ● | future sales of large blocks or our securities, which may adversely impact our share price; and |
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| ● | depth of the trading market in our securities. |
The preceding list is not intended to be an exhaustive list of all of our forward-looking statements. Forward-looking statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties, including those described in Item 1A “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and elsewhere in this Quarterly Report on Form 10-Q.
You should not unduly rely on any forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or will occur. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Quarterly Report on Form 10-Q, to conform these statements to actual results or to changes in our expectations.
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| Table of Contents |
ITEM 1. Financial Statements
BIONEXUS GENE LAB CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2023 AND DECEMBER 31, 2022
(Currency expressed in United States Dollars (“US$”))
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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 |
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Trade receivables |
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Other receivables, deposits and prepayments |
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Tax recoverable |
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Inventories |
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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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Property, plant and equipment, net |
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Other investments |
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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 |
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Other payables and accrued liabilities |
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Current portion of operating lease liabilities |
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Advance payment from customer |
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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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Deferred tax liabilities |
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Total non-current liabilities |
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TOTAL LIABILITIES |
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STOCKHOLDERS’ EQUITY |
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As at June 30, 2023, common stock, no par value; |
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Additional paid in capital |
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Accumulated surplus |
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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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See accompanying notes to the condensed consolidated financial statements.
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| Table of Contents |
BIONEXUS GENE LAB CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2023 AND 2022
(Currency expressed in United States Dollars (“US$”))
(Unaudited)
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REVENUE |
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COST OF REVENUE |
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GROSS PROFIT |
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OTHER INCOME |
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OPERATING EXPENSES |
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General and administrative |
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LOSS FROM OPERATIONS |
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FINANCE COSTS |
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LOSS BEFORE TAX |
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Tax credit/ (expense) |
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NET LOSS |
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Other comprehensive income: |
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Foreign currency translation loss |
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COMPREHENSIVE LOSS |
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Earnings per share - Basic and diluted |
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Weighted average number of common shares outstanding – Basic and diluted |
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See accompanying notes to the condensed consolidated financial statements.
| 5 |
| Table of Contents |
BIONEXUS GENE LAB CORP
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
AS OF JUNE 30, 2023 AND 2022
(Amount expressed in United States Dollars (“US$))
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| Accumulated |
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Accumulated |
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Total |
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| surplus |
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| loss |
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Balance as of December 31, 2021 |
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Net profit for the period |
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Foreign currency translation loss |
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Balance as of March 31, 2022 |
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Net loss for the period |
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Issuance of shares |
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Foreign currency translation loss |
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Balance as of June 30, 2022 |
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Balance as of December 31, 2022 |
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Net loss for the period |
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Foreign currency translation loss |
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Balance as of March 31, 2023 |
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Net loss for the period |
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Foreign currency translation loss |
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Balance as of June 30, 2023 |
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See accompanying notes to the condensed consolidated financial statements.
| 6 |
| Table of Contents |
BIONEXUS GENE LAB CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
(Currency expressed in United States Dollars (“US$”))
(Unaudited)
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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 from 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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Bad debts |
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Depreciation of property, plant and equipment |
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Dividend income |
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Fair value (gain)/loss on other investments |
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Interest |
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Property, plant and equipment written off |
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Operating loss before working capital changes |
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Changes in operating assets and liabilities: |
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Inventories |
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Trade and other receivables |
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Deferred cost of revenue |
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Trade and other payables |
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Advance payment from customer |
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Deferred revenue |
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Operating lease liabilities |
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Tax 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 other investment |
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Dividend income |
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Purchase of plant and equipment |
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Net cash used in investing activities |
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Cash flows from financing activities: |
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Interest |
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Repayment of finance lease |
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Shares subscriptions |
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Net cash (used in)/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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CASH AND CASH EQUIVALENTS INFORMATION: |
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Fixed deposits placed with financial institutions |
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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 taxes paid |
|
| ( | ) |
|
| ( | ) |
See accompanying notes to the condensed consolidated financial statements.
| 7 |
| Table of Contents |
BIONEXUS GENE LAB CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
(Currency expressed in United States Dollars (“US$”))
(Unaudited)
NOTE 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 June 30, 2023 is depicted below:
|
|
| BioNexus Gene Lab Corp., a Wyoming company |
|
|
| |
|
|
|
|
|
|
|
|
| 100% owned |
|
| 100% owned |
| ||
| Bionexus Gene Lab Sdn. Bhd., a Malaysian company |
|
| Chemrex Corporation Sdn. Bhd., a Malaysian company |
| ||
| 8 |
| Table of Contents |
BIONEXUS GENE LAB CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
(Currency expressed in United States Dollars (“US$”))
(Unaudited)
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited condensed consolidated financial statements reflect the application of certain significant accounting policies as described in this note and elsewhere in the accompanying consolidated financial statements and notes.
| · | Basis of presentation |
The accompanying condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).
· | Basis of consolidation |
The condensed consolidated financial statements include the accounts of Bionexus Gene Lab Corp. and its subsidiaries. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation.
· | Use of estimates |
In preparing these condensed consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets and revenues and expenses during the periods reported. Actual results may differ from these estimates. |
· | 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 Chemrex do charge interest to certain debtors with overdue outstanding. Management reviews the adequacy of the allowance for impairment on an ongoing basis, using historical collection trends and aging of receivables. Management also periodically evaluates individual customer’s financial condition, credit history, and current economic conditions to adjust in the allowance when it is considered necessary. Trade balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.
| · | Inventories |
Inventories consisting of products available for sell are stated at the lower of cost or market value. Cost of inventory is determined using the first-in, first-out (FIFO) method. Inventory reserve is recorded to write down the cost of inventory to the estimated market value due to slow-moving merchandise and damaged goods, which is dependent upon factors such as historical and forecasted consumer demand, and promotional environment. The Company takes ownership, risks, and rewards of the products purchased. Write downs are recorded in cost of revenues in the Statement of Operations and Comprehensive Income.
· | Leases |
Prior to January 1, 2019, the Company accounted for leases under ASC 840, Accounting for Leases. Effective January 1, 2019, the Company adopted the guidance of ASC 842, Leases, which requires an entity to recognize a right-of-use asset and a lease liability for virtually all leases. The Company adopted ASC 842 using a modified retrospective approach. As a result, the comparative financial information has not been updated and the required disclosures prior to the date of adoption have not been updated and continue to be reported under the accounting standards in effect for those periods.
| 9 |
| Table of Contents |
BIONEXUS GENE LAB CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
(Currency expressed in United States Dollars (“US$”))
(Unaudited)
· | Property, plant and equipment |
The principal annual rates used are as follows:
Categories |
| Principal Annual Rates |
| |
Air conditioner |
|
| % | |
Buildings |
|
| % | |
Computer and software |
|
| % | |
Equipment |
|
| % | |
Furniture and fittings |
| % | ||
Lab Equipment |
|
| % | |
Motor vehicle |
| % | ||
Office equipment |
|
| % | |
Renovation |
| % | ||
Signboard |
|
| % | |
Leasehold lands are depreciated over the period of the lease term. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Company will obtain ownership by the end of the lease term. Freehold land is not depreciated. Property, plant and equipment under construction are not depreciated until the assets are ready for their intended use
Maintenance and repairs are charged to operations as incurred. Expenditures which substantially increase the useful lives of the related assets are capitalized. When properties are disposed, the related costs and accumulated depreciation are removed from the accounts and any gain or loss is reported in the period the transaction takes place.
Fully depreciated plant and equipment are retained in the financial statements until they are no longer in use.
| 10 |
| Table of Contents |
BIONEXUS GENE LAB CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
(Currency expressed in United States Dollars (“US$”))
(Unaudited)
| · | 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:
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 and handling fees associated with inbound and outbound freight are expensed as incurred and included in selling and distribution expenses.
| 11 |
| Table of Contents |
BIONEXUS GENE LAB CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
(Currency expressed in United States Dollars (“US$”))
(Unaudited)
| · | Comprehensive income |
ASC Topic 220, “Comprehensive Income” establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive income, as presented in the accompanying statements of stockholders’ equity consists of changes in unrealized gains and losses on foreign currency translation and cumulative net change in the fair value of available-for-sale investments held at the balance sheet date. This comprehensive income is not included in the computation of income tax expense or benefit.
| · | Income taxes |
Income taxes are determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC Topic 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclosed in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.
The Company conducts major businesses in Malaysia and is subject to tax in their own jurisdictions. As a result of its business activities, the Company will file separate tax returns that are subject to examination by the foreign tax authorities.
| · | Net earnings or loss per share |
The Company calculates net earnings or loss per share in accordance with ASC Topic 260 “Earnings per share.” 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.
| 12 |
| Table of Contents |
BIONEXUS GENE LAB CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
(Currency expressed in United States Dollars (“US$”))
(Unaudited)
| · | Foreign currencies translation |
Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statement of operations.
The functional currency of the Company is the United States Dollars (“US$”) and the accompanying financial statements have been expressed in US$. In addition, the subsidiaries maintain their books and records in a local currency, Malaysian Ringgit (“MYR” or “RM”), which is functional currency as being the primary currency of the economic environment in which the subsidiaries operate.
In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement,” using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from the translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income.
Translation of amounts from MYR into US$1.00 has been made at the following exchange rates for the respective period and year:
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| June 30, |
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| December 31, |
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| 2023 |
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| 2022 |
| ||
Period ended June 30, 2023 /Year-ended December 31, 2022 US$1: MYR exchange rate |
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| January 1, 2023 to June 30, 2023 |
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| January 1, 2022 to June 30, 2022 |
| ||
6 months average US$1: MYR exchange rate |
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| · | Related parties |
Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence.
| 13 |
| Table of Contents |
BIONEXUS GENE LAB CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
(Currency expressed in United States Dollars (“US$”))
(Unaudited)
☐ | Fair value of financial instruments |
The carrying value of the Company’s financial instruments: cash and cash equivalents, trade receivable, deposits and other receivables, amount due to related parties and other payables approximate at their fair values because of the short-term nature of these financial instruments.
The Company also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a six-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:
☐ | Level 1 : Observable inputs such as quoted prices in active markets; |
|
|
☐ | Level 2 : Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and |
☐ | Level 3 : Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions |
As of June 30, 2023, and December 31, 2022, the Company did not have any nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements, at least annually, on a recurring basis, nor did the Company have any assets or liabilities measured at fair value on a non-recurring basis.
☐ | Recent accounting pronouncements |
The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.
☐ | Recently Adopted Accounting Standards |
In June 2016, the FASB issued Accounting Standards Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which introduced the expected credit losses methodology for the measurement of credit losses on financial assets measured at amortized cost basis, replacing the previous incurred loss methodology. In November 2019, the FASB issued ASU 2019-10 highlighted the adoption timeline. For smaller reporting entities, Topic 326 is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years, of which is effective for the Company on January 1, 2023
Credit loss rate is determined by historical collection based on aging schedule, adjusted for current conditions using reasonable and supportable forecasts. Based on the aging categorization and the adjusted loss rate per category, an allowance for credit losses is calculated by multiplying the adjusted loss rate with the amortized cost in the respective age category.
NOTE 3 - TRADE RECEIVABLES
The Company has performed an analysis on all its trade receivables. As such, trade receivables are recognized and carried at the original invoice amount less an allowance for any uncollectible amounts. An estimate for doubtful debts and expected credit losses is made when collection of the full amount is no longer probable. Bad debts are written off as identified for the quarter ended June 30, 2023. The Company’s trade receivables consist of receivable from customers which are unrelated to the Company. The account receivables are interest bearing at a rate of
|
| As of |
| |||||
|
| June 30, |
|
| December 31, |
| ||
|
| 2023 |
|
| 2022 |
| ||
|
|
|
|
|
|
| ||
Trade receivables |
|
|
|
|
|
| ||
Allowances for expected credit losses |
|
| ( | ) |
|
|
| |
|
| $ |
|
| $ |
| ||
| 14 |
| Table of Contents |
BIONEXUS GENE LAB CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
(Currency expressed in United States Dollars (“US$”))
(Unaudited)
NOTE 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
BioNexus Malaysia and Chemrex are both subject to Malaysia Corporate Tax, which is charged at the statutory income tax rate range of
|
| As of |
| |||||
|
| June 30, |
|
| December 31, |
| ||
|
| 2023 |
|
| 2022 |
| ||
Tax Recoverable |
|
|
|
|
|
| ||
Local |
| $ |
|
| $ |
| ||
Foreign, representing Malaysia |
|
| ( | ) |
|
| ( | ) |
Tax Recoverable |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
Income tax liabilities: |
|
|
|
|
|
|
|
|
Local |
| $ |
|
| $ |
| ||
Foreign, representing Malaysia |
|
|
|
|
|
| ||
Income tax payables |
|
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|
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|
Deferred tax liabilities: |
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|
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|
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|
Local |
| $ |
|
| $ |
| ||
Foreign, representing Malaysia |
|
|
|
|
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| ||
Deferred tax liabilities |
|
|
|
|
|
| ||
Total |
|
| ( | ) |
|
| ( | ) |
| 15 |
| Table of Contents |
BIONEXUS GENE LAB CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
(Currency expressed in United States Dollars (“US$”))
(Unaudited)
NOTE 5 – OPERATING LEASE RIGHT OF USE ASSET AND LEASE LIABILITIES
Lease liabilities are measured at present value of the sum of remaining rental payment as of recognition with a discount rate of
A single lease cost is recognized over the lease term on a generally straight-line basis. All cash payments of operating lease costs are classified within operating activities in the statement of cash flows.
Operating lease right of use assets as follows: |
| As of |
| |||||
|
| June 30, |
|
| December 31, |
| ||
|
| 2023 |
|
| 2022 |
| ||
Balance as of beginning of the year |
| $ |
|
| $ |
| ||
Add: Addition of lease liabilities |
|
|
|
|
|
| ||
Less: Amortization |
|
| ( | ) |
|
| ( | ) |
Foreign translation differences |
|
| ( | ) |
|
| ( | ) |
Balance |
| $ |
|
| $ |
| ||
Operating lease liabilities as follows: |
|
| ||||||
|
| June 30, |
|
| December 31, |
| ||
|
| 2023 |
|
| 2022 |
| ||
Balance as of beginning of the year |
| $ |
|
| $ |
| ||
Add: Addition of lease liabilities |
|
|
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| ||
Less: gross repayment |
|
| ( | ) |
|
| ( | ) |
Add: imputed interest |
|
|
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|
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| ||
Foreign translation differences |
|
| ( | ) |
|
| ( | ) |
Balance as of end of the year |
|
|
|
|
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| ||
Less: lease liability current portion |
|
| ( | ) |
|
| ( | ) |
Lease liability non-current portion |
| $ |
|
| $ |
| ||
The amortization of the right of use asset for the six months’ period ended June 30, 2023 and six months’ period ended June 30, 2022 were $
Other information: |
| As of |
| |||||
|
| June 30, 2023 |
|
| December 31, 2022 |
| ||
Cash paid for amounts included in the measurement of lease liabilities: |
|
|
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|
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| ||
Operating cash flow from operating lease |
| $ | ( | ) |
| $ | ( | ) |
Right of use assets obtained in exchange for operating lease liabilities |
|
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Remaining lease term for operating lease (years) |
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Weighted average discount rate for operating lease |
| $ | % |
| $ | % | ||
Lease expenses for the six months’ period ended June 30, 2023 and the year ended December 31, 2022 were $
| 16 |
| Table of Contents |
BIONEXUS GENE LAB CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
(Currency expressed in United States Dollars (“US$”))
(Unaudited)
NOTE 6 - PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consisted of the following:
|
| As of |
| |||||
|
| June 30, |
|
| December 31, |
| ||
|
| 2023 |
|
| 2022 |
| ||
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 |
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| ||
Renovation |
|
|
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| ||
Signboard |
|
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| ||
|
|
|
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|
| ||
(Less): Accumulated depreciation |
|
| ( | ) |
|
| ( | ) |
Add: Foreign translation differences |
|
| ( | ) |
|
| ( | ) |
Property, plant and equipment, net |
| $ |
|
| $ |
| ||
Depreciation expense for the six months’ period ended June 30, 2023 and 2022 were $
NOTE 7 - OTHER INVESTMENTS
|
| As of |
| |||||
|
| June 30, |
|
| December 31, |
| ||
|
| 2023 |
|
| 2022 |
| ||
As of beginning of the year |
| $ |
|
| $ |
| ||
Addition during the year |
|
|
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| ||
Disposal during the year |
|
|
|
|
| ( | ) | |
Fair value gain/(loss) |
|
|
|
|
| ( | ) | |
Foreign exchange translation |
|
| ( | ) |
|
| ( | ) |
As of end of the year |
| $ |
|
| $ |
| ||
The other investments consist of the following shares: | ||||||||
|
| As of |
| |||||
|
| June 30, |
|
| December 31, |
| ||
|
| 2023 |
|
| 2022 |
| ||
Investment in quoted shares: |
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| ||
Malaysia |
|
|
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|
| ||
Singapore |
|
|
|
|
|
| ||
Hong Kong |
|
|
|
|
|
| ||
|
| $ |
|
| $ |
| ||
| 17 |
| Table of Contents |
BIONEXUS GENE LAB CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
(Currency expressed in United States Dollars (“US$”))
(Unaudited)
NOTE 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 - CONCENTRATION OF RISKS
a) Major customers
During the three months and six months ended June 30, 2023 and 2022, the Company did not have any material recognizable major customers accounted for 10% or more of the Company’s revenue.
b) Major suppliers
For three months ended June 30, 2023 and 2022, the suppliers who accounted for 10% or more of the Company’s cost of sales and their balances at year ended are presented as follows:
|
| 2023 |
| 2022 |
| 2023 |
| 2022 |
| 2023 |
| 2022 | ||||||
|
| Purchase |
| Percentage of purchases |
| Accounts payable trade | ||||||||||||
Vendor A |
| $ |
| $ |
|
|
|
| $ |
| $ | |||||||
Vendor B |
| $ |
| $ |
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|
|
| $ |
| $ | |||||||
Vendor C |
| $ |
| $ |
|
|
|
| $ |
| $ | |||||||
Vendor D |
| $ |
| $ |
|
|
|
| $ |
| $ | |||||||
Vendor E |
| $ |
| $ |
|
|
|
| $ |
| $ | |||||||
|
| $ |
| $ |
|
|
|
| $ |
| $ | |||||||
For six months ended June 30, 2023 and 2022, the suppliers who accounted for 10% or more of the Company’s cost of sales and their balances at year ended are presented as follows:
|
| 2023 |
| 2022 |
| 2023 |
| 2022 |
| 2023 |
| 2022 | ||||||
|
| Purchase |
| Percentage of purchases |
| Accounts payable trade | ||||||||||||
Vendor A |
| $ |
| $ |
|
|
|
| $ |
| $ | |||||||
Vendor B |
| $ |
| $ |
|
|
|
| $ |
| $ | |||||||
Vendor C |
| $ |
| $ |
|
|
|
| $ |
| $ | |||||||
Vendor D |
| $ |
| $ |
|
|
|
| $ |
| $ | |||||||
|
| $ |
| $ |
|
|
|
| $ |
| $ | |||||||
NOTE 10 - STOCK HOLDERS’ EQUITY
As of June 30, 2023 and 2022, the Company issued and outstanding common stock are
NOTE 11 - SEGMENTED INFORMATION
At June 30, 2023, the Company (“BGLC”) operates in the biochemical industry segment through its two Malaysian subsidiaries, BioNexus Malaysia and Chemrex.
|
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| BioNexus Gene Lab Corp., a Wyoming company |
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| |
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| 100% owned |
|
| 100% owned |
| ||
| Bionexus Gene Lab Sdn. Bhd., a Malaysian company |
|
| Chemrex Corporation Sdn. Bhd., a Malaysian company |
| ||
| 18 |
| Table of Contents |
BIONEXUS GENE LAB CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
(Currency expressed in United States Dollars (“US$”))
(Unaudited)
At June 30, 2023, the Company (“BGLC”) operates in the biochemical industry segment through its two Malaysian subsidiaries, BioNexus Malaysia and Chemrex.
For the six months ended June 30, 2023, segmented (unaudited) revenue and net profit/(loss) (Currency expressed in United States Dollars (“US$”) are as follows:
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| BioNexus Malaysia |
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| Chemrex |
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| BGLC |
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| Total |
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| Six months ended June 30, 2023 |
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REVENUE |
| $ |
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| $ |
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| $ |
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| $ |
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COST OF REVENUE |
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GROSS PROFIT |
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OTHER INCOME |
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OPERATING EXPENSES |
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General and administrative |
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| ( | ) |
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| ( | ) |
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| ( | ) |
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| ( | ) |
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LOSS FROM OPERATIONS |
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| ( | ) |
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| ( | ) |
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| ( | ) |
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FINANCE COSTS |
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| ( | ) |
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LOSS BEFORE TAX |
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| ( | ) |
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Tax expense |
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NET LOSS |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| 19 |
| Table of Contents |
BIONEXUS GENE LAB CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
(Currency expressed in United States Dollars (“US$”))
(Unaudited)
|
| BioNexus Malaysia |
|
| Chemrex |
|
| BGLC |
|
| Total |
| ||||
|
| Six months ended June 30, 2022 |
| |||||||||||||
REVENUE |
| $ |
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| $ |
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| $ |
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| $ |
| ||||
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COST OF REVENUE |
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| ( | ) |
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| ( | ) |
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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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General and administrative |
|
| ( | ) |
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| ( | ) |
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| ( | ) |
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| ( | ) |
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(LOSS)/PROFIT FROM OPERATIONS |
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| ( | ) |
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| ( | ) | |
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FINANCE COSTS |
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| ( | ) |
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| ( | ) |
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PROFIT/(LOSS) BEFORE TAX |
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Tax expense |
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NET PROFIT/(LOSS) |
| $ | ( | ) |
| $ |
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| $ | ( | ) |
| $ | ( | ) | |
|
| As of June 30, 2023 and December 31, 2022 |
| |||||||||||||
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| Total Assets |
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| Total Liabilities |
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| 2023 |
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| 2022 |
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| 2023 |
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| 2022 |
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BGLC & Bionexus |
| $ |
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| $ |
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| $ |
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| $ |
| ||||
Chemrex |
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TOTAL |
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| 20 |
| Table of Contents |
BIONEXUS GENE LAB CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
(Currency expressed in United States Dollars (“US$”))
(Unaudited)
NOTE 12 - 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 June 30, 2023 up through August 16, 2023 of these consolidated financial statements.
(a) 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
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
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
(b) Reversal of stock split
On June 5, 2023, the Company filed an Article of Amendment to the Articles of Incorporation with the Wyoming Secretary of State to modify the ratio of the Reverse Stock Split from one-for-ten (10) to one-for-twelve (12) (the “Revised Reverse Stock Split”). Upon effectiveness of the Revised Reverse Stock Split, every twelve (12) outstanding shares of common stock will be combined into and automatically become one share of common stock. No fractional shares will be issued in connection with the Revised Reverse Stock Split and all such fractional shares or odd lots (less than 100 shares to any record or beneficial holder) issuable in the Revised Reverse Stock Split will be rounded up to the nearest whole share, or rounded up to 100 shares, respectively.
The Revised Reverse Stock Split was approved and authorized by a majority of the Company’s 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.
As a result of the
| 21 |
| Table of Contents |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Description of Business
As used herein, unless the context otherwise indicates, references to the “Company,” “we,” “our,” “us,” “BioNexus” refer to BioNexus Gene Lab Corp., a Wyoming company (“BGLC”), and its wholly owned subsidiaries, Bionexus Gene Lab Sdn. Bhd. (“Bionexus Malaysia”), and Chemrex Corporation Sdn. Bhd. (“Chemrex”), both are Malaysian companies.
BGLC is an emerging molecular lab focused on the application of functional genomics to enable early detection of infectious diseases and cancers. On August 23, 2017, we acquired all of the outstanding capital stock of BioNexus Malaysia, which was incorporated in Malaysia on April 7, 2015. BioNexus Malaysia owns algorithm software, technology, and know-how related to the detection of common diseases through blood analysis which we use in our business. Our non-invasive blood screening tests analyze changes in ribonucleic acid (or RNA) to Coronavirus, Dengue, HIV, HPV and the risk potentiality of cancers diseases. This unique blood genomic biomarker approach is based on the scientific observation that circulating blood reflects, in a detectable way, what is occurring throughout the body currently.
The corporate and principal office address of the Company and BioNexus Malaysia is Unit 02, Level 10, Tower B, Avenue 3, The Vertical Business Suite II, Bangsar South, No. 8 Jalan Kerinchi, Kuala Lumpur, Malaysia., our lab is located at Lab 353, Chemical Science Centre, University Science Malaysia, George Town, Penang, Malaysia. Another lab focuses on Covid-19 and Colon cancer screening is located at 4th floor, Lifecare Diagnostic Centre, Kuala Lumpur, Malaysia. Our telephone number is (+60) 1221-26512 and our website is www.bionexusgenelab.com.
Chemrex is a wholesaler of industrial chemicals for the manufacture of industrial, medical, appliance, aero, automotive, mechanical and electronic industries in Asean region. On December 31, 2020, we acquired all of the outstanding capital stock of Chemrex, which was incorporated in Malaysia on September 29, 2004.
Chemrex’s corporate office and distribution and storage center is located at 4 Jalan CJ 1/6 Kawasan Perusahaan Cheras Jaya, Selangor, Malaysia. Its phone number is (+60) 1922-23815 and website is www.chemrex.com.my.
| 22 |
| Table of Contents |
The results of operations of our subsidiary, BioNexus-Malaysia, with respect to its RNA screening process have been adversely impacted by the onset of the Covid-19 pandemic followed by a number of prominent variants, including Alpha, Beta, Delta, and Omicron. Although new variants are an expected part of the evolution of viruses, new variant is more aggressive, highly transmissible, vaccine-resistant, able to cause more severe disease in Malaysia. We believe that most people were reluctant to visit hospitals and clinics in view of the post Covid-19 Omicron and its subvariants for fear of transmission from other patients or medical staff. Since our RNA screening is administered at a diagnostic center, our business has been adversely affected as a result.
The results of operations for Chemrex were adversely impacted during fiscal year 2023 and the 1st quarter of 2023 as businesses of Chemrex customers especially the manufacturers had suffered significant impact. Many of them across the country saw their supply chains interrupted, demand for their products and services decline, shortages in supplies and inputs.
Recent Developments.
We had proposed an annual $28m screening project to the Chief Secretary of the Health Ministry of Malaysia for a nationwide RNA screening on 0.2% of the population aged 40 and above. The Deputy Director General from Public Health met us on January 17, 2023 to examine the cost effectiveness of our RNA screening. While the Federal government is studying our proposal, the Sabah state government planned to allocate $2.5m to establish a lab in Kota Kinabalu, Sabah capital city for Bionexus-Malaysia to work with local hospitals and state insurance corporation. Meanwhile, we had presented our technology and expansion plan nationally and globally to the Minister of Science and Technology. We received favorable response, and were advised to submit for a $2m technology grant for the continuation of research, commercialization and expansion.
Translation of amounts from MYR into US$1.00 has been made at the following exchange rates for the respective period and year:
|
| June 30, |
|
| December 31, |
| ||
|
| 2023 |
|
| 2022 |
| ||
Period ended June 30, 2023 /Year-ended December 31, 2022 US$1: MYR exchange rate |
|
| 4.6650 |
|
|
| 4.3900 |
|
|
|
|
|
|
|
|
|
|
|
| January 1, 2023 to June 30, 2023 |
|
| January 1, 2022 to June 30, 2022 |
| ||
6 months average US$1: MYR exchange rate |
|
| 4.4629 |
|
|
| 4,2710 |
|
| 23 |
| Table of Contents |
Results of Operations
Three Months Ended June 30, 2023 Compared with the Three Months Ended June 30, 2022.
The following table sets forth key selected financial data for the three months ended June 30, 2023 and 2022.
Consolidated
|
| Three months ended |
| |||||
|
| June 30, |
| |||||
|
| 2023 |
|
| 2022 |
| ||
REVENUE |
| $ | 2,566,848 |
|
| $ | 2,485,101 |
|
|
|
|
|
|
|
|
|
|
COST OF REVENUE |
|
| (2,227,134 | ) |
|
| (2,221,130 | ) |
|
|
|
|
|
|
|
|
|
GROSS PROFIT |
|
| 339,714 |
|
|
| 263,971 |
|
|
|
|
|
|
|
|
|
|
OTHER INCOME |
|
| 195,164 |
|
|
| 52,848 |
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
General and administrative |
|
| (807,077 | ) |
|
| (454,783 | ) |
|
|
|
|
|
|
|
|
|
LOSS FROM OPERATIONS |
|
| (272,199 | ) |
|
| (137,964 | ) |
|
|
|
|
|
|
|
|
|
FINANCE COSTS |
|
| (3,042 | ) |
|
| (2,319 | ) |
|
|
|
|
|
|
|
|
|
LOSS BEFORE TAX |
|
| (275,241 | ) |
|
| (140,283 | ) |
|
|
|
|
|
|
|
|
|
Tax expense |
|
| 15,990 |
|
|
| 1,621 |
|
|
|
|
|
|
|
|
|
|
NET LOSS |
| $ | (259,251 | ) |
| $ | (138,662 | ) |
Other comprehensive income: |
|
|
|
|
|
|
|
|
Foreign currency loss |
|
| (333,891 | ) |
|
| (317,760 | ) |
|
|
|
|
|
|
|
|
|
COMPREHENSIVE LOSS |
| $ | (593,142 | ) |
| $ | (456,422 | ) |
| 24 |
| Table of Contents |
Segmented Information
|
| BioNexus Malaysia |
|
| Chemrex |
|
| BioNexus Malaysia |
|
| Chemrex |
| ||||
|
| Three months ended June 30, 2023 |
|
| Three months ended June 30, 2022 |
| ||||||||||
REVENUE |
| $ | 4,496 |
|
| $ | 2,562,352 |
|
| $ | 9,198 |
|
| $ | 2,475,903 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST OF REVENUE |
|
| (2,201 | ) |
|
| (2,224,933 | ) |
|
| (6,891 | ) |
|
| (2,214,239 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT |
|
| 2,295 |
|
|
| 337,419 |
|
|
| 2,307 |
|
|
| 261,664 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME |
|
| 1,039 |
|
|
| 194,125 |
|
|
| 2,209 |
|
|
| 50,639 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative |
|
| (52,465 | ) |
|
| (642,719 | ) |
|
| (50,639 | ) |
|
| (320,579 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS FROM OPERATIONS |
|
| (49,131 | ) |
|
| (111,175 | ) |
|
| (46,123 | ) |
|
| (8,276 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCE COSTS |
|
| (609 | ) |
|
| (2,433 | ) |
|
| (1,061 | ) |
|
| (1,258 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS BEFORE TAX |
|
| (49,740 | ) |
|
| (113,608 | ) |
|
| (47,184 | ) |
|
| (9,534 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax expense |
|
| - |
|
|
| 15,990 |
|
|
| - |
|
|
| 1,621 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS |
| $ | (49,740 | ) |
| $ | (97,618 | ) |
| $ | (47,184 | ) |
| $ | (7,913 | ) |
Revenue. For the quarter ended June 30, 2023, we had total revenue of $2,566,848 as compared to total revenue of $2,485,101 for the quarter ended June 30, 2022, increased by 3.3% from the prior quarter due to slight increase in purchases from customers.
Chemrex contributed $2,562,352 (99.8%) of the total revenue for the current quarter ended June 30, 2023 as compared to $2,475,903 (99.6%) of the total revenue for the quarter ended June 30, 2022. Chemrex’s revenues had an increase by $86,449 of 3.5% from prior quarter. The revenue increased in second quarter of 2023 was due to increase in purchases from customers.
BioNexus-Malaysia contributed $4,496 (0.2%) of the total revenue for the quarter ended June 30, 2023 as compared to revenue of $9,198 (0.4%) of the total revenue from the quarter ended June 30, 2022. Revenues had decreased by $4,702 from prior quarter of $9,198, a 51.1% decrease due to six (6) long weekends public holidays during the second quarter resulting in fewer referrals from diagnostics centers & clinics.
Cost of Revenue. For the quarter ended June 30, 2023, we incurred $2,227,134 in cost of revenues, as compared to $2,221,130 for the quarter ended June 30, 2022, a slight increase of 0.3% was due to reason as stated above.
Chemrex had incurred $2,224,933 (99.9%) of the total cost of revenue during the current quarter period ended June 30, 2023 as compared to the quarter ended June 30, 2022 wherein Chemrex had incurred $2,214,239 (99.7%) of the total cost of revenue. The slightly increase in Chemrex’s cost of revenues of 0.5% for the current period was due to its increased revenues and reason as stated above.
BioNexus had incurred $2,201 (0.1%) of the total cost of revenues during the current quarter period ended June 30, 2023 as compared to $6,891 (0.3%) for the quarterly period ended June 30, 2022. Cost of revenue had decreased by $4,690 from prior quarter of 68.1% decrease was due to its decreased revenues and reason as stated above.
| 25 |
| Table of Contents |
Gross Profit. For the quarterly period ended June 30, 2023, we had total gross profit of $339,714 as compared to gross profit of $263,971 for the quarterly period ended June 30, 2022, an increase by approximately 28.7% from the prior period.
Chemrex contributed $337,419 (99.3%) of the total gross profit for the current quarter ended June 30, 2023 as compared to $261,664 (99.1%) of the total gross profit for the quarter ended June 30, 2022. Chemrex’s gross profit increased by $75,755 from the prior quarter, an approximately 29% increase. The gross profit increase for Chemrex in current quarter was due to an increase in revenue and reduced purchases prices reduced.
BioNexus-Malaysia contributed $2,295 (0.7%) of the total gross profit of $339,714 for the current quarter ended June 30, 2023 as compared to gross profit of $2,307 (0.9%) of the total gross profit from the quarter ended June 30, 2022. The decrease by approximately 0.5% from the prior period due to its decreased revenues for the same reason stated above.
Other Income. For the quarterly period ended June 30, 2023, we had of $195,164, as compared to of $52,848 for the quarterly period ended June 30, 2022, an increase of approximately 269.3%.
Chemrex contributed $194,125 (99.5%) of other income for the current quarter ended June 30, 2023 as compared to $50,639 (95.8%) of the other income for the quarter ended June 30, 2022. Chemrex’s other income increased by 283.4% due to gain on forex exchange rate, gain on fair value of investment, bank interest earning and unrealized equity investment gain.
BioNexus-Malaysia contributed $1,039 (0.5%) of other income for the current quarter ended June 30, 2023 as compared to $2,209 (4.2%) of the other income for the quarter ended June 30, 2022. The decrease of 53% due to lesser fund in the fixed deposit resulted from a reduction in bank interest earning.
Operating Expenses. For the quarter ended June 30, 2023, we had total operating expense of $807,077 as compared to total operating expenses of $454,783 for the quarter ended June 30, 2022, an increase by approximately 77.5%. It was due to general and administrative expenses which includes depreciation of fixed assets, employee compensation and benefits, professional fees for the Nasdaq uplisting and marketing and travel expenses.
Chemrex had incurred $642,719 (79.6%) of the total operating expenses for the current quarter ended June 30, 2023 as compared to $320,579 (70.5%) of the total operating expenses for the quarter ended June 30, 2022, an increase by 100.5%. The increase in operating expenses was due to debt consultant, directors’ remuneration, entertainment, upkeep of equipment, marketing website improvement and provision for losses on accounts receivable.
BioNexus-Malaysia had incurred $52,465 (6.5%) of the total operating expenses for the current quarter ended June 30, 2023 as compared to $50,639 (11.1%) of the total operating expenses for the quarter ended June 30, 2022, a slight increase by 3.6%. The increase in operating costs of the current quarter was due to Research and development cost incurred for patients with cardiovascular disease.
BGLC, the holding company had incurred $111,893 (13.9%) of total operating expenses for the current quarter ended June 30, 2023 as compared to $83,565 (18.4%) of the total operating expenses for the quarter ended June 30, 2022. The increase by approximately 33.9% in operating costs for the quarter ended June 30, 2023 was due to directors and committees’ fees, professional expenses and charges from Advisor, Attorney, STC (Transfer Agent), Finra, Nasdaq and SEC on the Company’s uplisting to Nasdaq.
Loss/Profit from Operations. We had a loss from operations of $272,199 for the quarter ended June 30, 2023 as compared to a loss of $137,964 for the quarter ended June 30, 2022, an increase by approximately 97.3% from the prior period, for the reasons discussed above.
Income tax expense. For the quarter ended June 30, 2023, we had adjustment of income tax credit of $15,990 as compared to tax credit of $1,621 for the quarter ended June 30, 2022 for Chemrex. There was no tax provision for Bio-Nexus Malaysia for the quarters ended June 30, 2023 and 2022.
Foreign currency exchange loss. We are exposed to fluctuations in foreign exchange rates on the revaluation of monetary assets and liabilities denominated in currencies other than the US Dollar. Therefore, any change in the relevant exchange rate would require us to recognize a transaction gain or loss on revaluation. For the three-month period ended June 30, 2023, we experienced a foreign currency loss of $333,891 as compared with a foreign currency loss of $317,760 for the three-month period ended June 30, 2022.
| 26 |
| Table of Contents |
Six Months Ended June 30, 2023 Compared with the Six Months Ended June 30, 2022.
The following table sets forth key selected financial data for the six months ended June 30, 2023 and 2022.
Consolidated
|
| Six months ended |
| |||||
|
| June 30, |
| |||||
|
| 2023 |
|
| 2022 |
| ||
REVENUE |
| $ | 4,944,053 |
|
| $ | 5,514,046 |
|
|
|
|
|
|
|
|
|
|
COST OF REVENUE |
|
| (4,235,442 | ) |
|
| (4,893,742 | ) |
|
|
|
|
|
|
|
|
|
GROSS PROFIT |
|
| 708,611 |
|
|
| 620,304 |
|
|
|
|
|
|
|
|
|
|
OTHER INCOME |
|
| 312,508 |
|
|
| 99,230 |
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
General and administrative |
|
| (1,343,949 | ) |
|
| (822,807 | ) |
|
|
|
|
|
|
|
|
|
LOSS FROM OPERATIONS |
|
| (322,830 | ) |
|
| (103,273 | ) |
|
|
|
|
|
|
|
|
|
FINANCE COSTS |
|
| (5,487 | ) |
|
| (5,645 | ) |
|
|
|
|
|
|
|
|
|
LOSS BEFORE TAX |
|
| (328,317 | ) |
|
| (108,918 | ) |
|
|
|
|
|
|
|
|
|
Tax expense |
|
| - |
|
|
| (12,678 | ) |
|
|
|
|
|
|
|
|
|
NET LOSS |
| $ | (328,317 | ) |
| $ | (121,596 | ) |
|
|
|
|
|
|
|
|
|
Other comprehensive income: |
|
|
|
|
|
|
|
|
Foreign currency translation loss |
|
| (372,930 | ) |
|
| (386,536 | ) |
COMPREHENSIVE LOSS |
| $ | (701,247 | ) |
| $ | (508,132 | ) |
| 27 |
| Table of Contents |
Segmented Information
|
| BioNexus Malaysia |
|
| Chemrex |
|
| BioNexus Malaysia |
|
| Chemrex |
| ||||
|
| Six months ended June 30, 2023 |
|
| Six months ended June 30, 2022 |
| ||||||||||
REVENUE |
| $ | 11,932 |
|
| $ | 4,932,121 |
|
| $ | 33,467 |
|
| $ | 5,480,579 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST OF REVENUE |
|
| (7,548 | ) |
|
| (4,227,894 | ) |
|
| (14,929 | ) |
|
| (4,878,813 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT |
|
| 4,384 |
|
|
| 704,227 |
|
|
| 18,538 |
|
|
| 601,766 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME |
|
| 2,165 |
|
|
| 310,343 |
|
|
| 4,285 |
|
|
| 94,945 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative |
|
| (98,720 | ) |
|
| (1,025,896 | ) |
|
| (94,681 | ) |
|
| (618,348 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(LOSS)/PROFIT FROM OPERATIONS |
|
| (92,171 | ) |
|
| (11,326 | ) |
|
| (71,858 | ) |
|
| 78,363 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCE COSTS |
|
| (1,275 | ) |
|
| (4,212 | ) |
|
| (1,860 | ) |
|
| (3,785 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(LOSS)/PROFIT BEFORE TAX |
|
| (93,446 | ) |
|
| (15,538 | ) |
|
| (73,718 | ) |
|
| 74,578 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax expense |
|
| - |
|
|
| - |
|
|
| - |
|
|
| (12,678 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET (LOSS)/PROFIT |
| $ | (93,446 | ) |
| $ | (15,538 | ) |
| $ | (73,718 | ) |
| $ | 61,900 |
|
Revenue. For the six months period ended June 30, 2023, we had total revenue of $4,944,053 as compared to total revenue of $5,514,046 for the same period in 2022, which had decreased by $569,993 from the prior period, approximately 10.3% decrease.
Chemrex contributed $4,932,121 (99.8%) of the total revenue for the current six months period as compared to $5,480,579 (99.4%) of the total revenue for the same period last year. Chemrex’s revenues had decreased by $548,458 from prior period, approximately 10.01% decrease. The revenue decreased in 2023 was due to material cost for Resin & Fiberglass mat has been reduced in Malaysia since January 2023. As a result, we adjusted the selling price of our product to stay competitive. Chemrex is catching up with the markets change post pandemic by targeting the right manufacturers to reduce cost of logistics and warehousing meanwhile may scarify some small retail businesses.
BioNexus-Malaysia contributed $11,932 (0.2%) of the total revenue for the current six months period as compared to revenue of $33,467 (0.6%) of the total revenue from the same period last year. BioNexus’s revenue had decreased by $21,535 from prior quarter, an approximately 64.3% decrease. The revenue decrease in 2023 was due to RNA screening process having been adversely impacted by the onset of the Covid-19 pandemic followed by a number of prominent variants, including Alpha, Beta, Delta, and Omicron. Although new variants are an expected part of the evolution of viruses, new variant is more aggressive, highly transmissible, vaccine-resistant, able to cause more severe disease in Malaysia. We believe that most people were reluctant to visit hospitals and clinics in view of the post Covid-19 Omicron and its subvariants for fear of transmission from other patients or medical staff. Since our RNA screening is administered at a diagnostic center, our business had been adversely affected as a result.
Cost of Revenue. For the six months period ended June 30, 2023, we incurred $4,235,442 in cost of revenues, as compared to $4,893,742 for the same period in 2022, decreased by $658,300 approximately 13.5% decrease was due to the same reason stated above.
Chemrex had incurred $4,227,894 (99.8%) of the total cost of revenue during the current period as compared to the same period last year wherein Chemrex had incurred $4,878,813 (99.7%) of the total in cost of revenue, decreased by $650,919, approximately 13.34% was due to the same reason stated above.
BioNexus had incurred $7,548 (0.2%) of the total cost of revenues during the current period as compared to $14,929 (0.3%) for the same period in 2023, decreased by $7,381, approximately 49.4% in cost of revenues for the current period was due to the same reason stated above.
Gross Profit. For the six months period ended June 30, 2023, we had total gross profit of $708,611 as compared to gross profit of $620,304 for the same period in 2023, increased by approximately 14.2% from the prior period.
Chemrex contributed $704,227 (99.4%) of the total gross profit for the current six months period as compared to $601,766 (97.0%) of the total gross profit for the same period last year. The gross profit increased by $102,461, approximately 17.3% for current period was due to higher revenue resulting higher gross profit.
| 28 |
| Table of Contents |
BioNexus-Malaysia had a gross profit of $4,384 (0.6%) of the total gross profit of $708,611 for the current six months period as compared to $18,538 (3%) of the total gross profit of $620,304 from the same period last year. The gross profit decreased by 76.4% was due to its decreased revenues for the current period as according to reason stated above.
Other Income. For the six months period ended June 30, 2023, we had $312,508 as compared to $99,230 for the same period in 2022, increased by $213,278 approximately 214.9%.
Chemrex contributed $310,343 (99.3%) of other income for the current six months period as compared to $94,945 (95.7%) of the other income for the same period last year. Chemrex’s other income increased by $215,398, approximately 226.87% was generated from bank interest and gain from fair value on investment.
BioNexus Malaysia had $2,165 (0.7%) for six months period ended June 30, 2023 as compared to $4,285 (4.3%) for the same period in 2022, decreased by approximately 49.5% was due to lower bank interest earning from lower fund deposited.
Operating Expenses. For the six months period ended June 30, 2023, we had a total operating expense of $1,343,949 as compared to total operating expenses of $822,807 for the same period in 2022. The increase of $521,142, approximately 63.3% was due to general and administrative expenses which includes depreciation of fixed assets, employee compensation and benefits, marketing/travel expenses, FINRA, SEC, Nasdaq and professional fees for Nasdaq uplist.
Chemrex had incurred $1,025,896 (76.3%) of the total operating expenses for the current six months period as compared to $618,348 (75.2%) of the total operating expenses for the same period last year, increased by $407,548, approximately 65.91% due to the increased commission, directors’ remuneration, medical expenses, loss on unrealized/realized currency exchanges and provision for losses on account receivables.
BioNexus-Malaysia had incurred $98,720 (7.3%) of the total operating expenses for the current six months period as compared to $94,681 (11.5%) of the total operating expenses for the same period last year. The slightly increase by approximately 4.3% in operating costs for the six months period was due to an increase of traveling expenses for marketing and staff remuneration increase.
BGLC, the holding company had incurred $219,333 (16.3%) of total operating expenses for the current six months period as compared to $109,778 (13.3%) of the total operating expenses for the same period last year. The increase of $109,555, approximately 99.8% in operating costs of the current period was due to the expenses on filing fees for form S-1, consultant fees for capital & corporation advisory services, fees for three independent board members and audit committee, SEC compliance services, SEC registration fee, 300+ shareholders’ notice printing and mailing expenses regarding stock reverse split by Securities Transfer Corporation, an additional review fee for S-1 and listing expenses for Nasdaq uplist.
Profit/Loss from Operations. We had a loss from operations of $322,830 for six months period ended June 30, 2023 as compared to loss of $103,273 for the same period in 2022. The decrease of $219,557, approximately 212.6% was due to the reasons discussed above.
Income tax expense. For the six-months period ended June 30, 2023, we had no income tax provided for Chemrex and Bionexus as compared to the same period 2022 which was a tax estimated $12,678 from Chemrex and no tax provided from Bionexus.
Foreign currency exchange gain/(loss). We are exposed to fluctuations in foreign exchange rates on the revaluation of monetary assets and liabilities denominated in currencies other than the US Dollar. Therefore, any change in the relevant exchange rate would require us to recognize a transaction gain or loss on revaluation. For the six-months period ended June 30, 2023, we experienced a foreign currency loss of $372,930 as compared with a foreign currency loss of $386,536 for the same period in 2022.
| 29 |
| Table of Contents |
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 2023, we had working capital of $3,350,280 compared with working capital of $4,017,749 as of December 31, 2022. The decrease in working capital as of June 30, 2023 from December 31, 2022 was due principally to the decrease in cash used in our operations.
Our primary uses of cash had been for operations. The main sources of cash was generated from operational revenues and the private placement of our common stock. The following trends could result in a material decrease in our liquidity over the near to long term:
| · | Addition of administrative and marketing personnel as the business grows, |
| · | Development of a Company website, |
| · | Increases in advertising and marketing in order to attempt to generate more revenues, and |
| · | The cost of being a public company. |
The Company believes that cash flow from operations together will be sufficient to sustain its current level of operations for at least the next 12 months of operations.
The following is a summary of the Company’s cash flows provided by (used in) / generated from operating, investing, and financing activities for the three months ended June 30, 2023 and 2022:
|
| Six months ended |
| |||||
|
| June 30, |
| |||||
|
| 2023 |
|
| 2023 |
| ||
Net cash used in Operating Activities |
| $ | (140,341 | ) |
| $ | (237,593 | ) |
Net cash used in investing activities |
|
| (8,114 | ) |
|
| (418,955 | ) |
Net cash generated from/(used in) financing activities |
|
| (4,212 | ) |
|
| 112,177 |
|
Foreign currency translation adjustment |
|
| (207,517 | ) |
|
| (243,002 | ) |
Net Change in Cash and Cash Equivalents |
| $ | (360,184 | ) |
| $ | (783,588 | ) |
Operating Activities
During the six months ended June 30, 2023, the Company incurred a net loss of $328,317 which, after adjusting for amortization, depreciation, dividend income, fair value gain on share investment, provision for losses on accounts receivable, an increase in inventories, a decrease in trade receivables and a substantial reduction in trade payables, operating lease liabilities, advance payment from customer, resulted in net cash of $40,341 being used in operating activities during the six months ended June 30, 2023.By comparison, during the six months ended June 30, 2022, the Company had a net loss of $121,596 after adjusting for amortization, depreciation, dividend income, fair value loss on share investments and a decrease in inventories, trade receivables, deferred cost of revenue, a substantial reduction in trade payables, operating lease liabilities, advance payment from customer, deferred revenue, resulted in net cash of $233,808 being used in operating activities during the period.
Investing Activities
During the six months ended June 30, 2023, the Company had net cash of $8,114 used in investment activities from acquisition of share investment of $13,444 and purchase of plant & equipment of $14,458. By comparison during the six months ended June 30, 2022, the Company had net cash from acquisition of share investment of $404,793 and purchase of plant and equipment of $33,484, resulting in net cash used in investing activities of $418,955.
Financing Activities
During the six month ended June 30, 2023, the Company had net cash of $4,212 used in financing activities. By comparison during the six months ended June 30, 2022, we had net cash of $112,177 generated from financing activities for continued the repayment of a finance lease of $34,038 and shares subscriptions of $150,000.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this item.
| 30 |
| Table of Contents |
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
In connection with the preparation of this quarterly report, an evaluation was carried out by the Company’s management, with the participation of the principal executive officer and the principal financial officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act (“Exchange Act”) as of June 30, 2023. Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Commission’s rules and forms, and that such information is accumulated and communicated to management, including the principal executive officer and the principal financial officer, to allow timely decisions regarding required disclosures.
Based on that evaluation, the Company’s management concluded, as of the end of the period covered by this report, that the Company’s disclosure controls and procedures were capable in recording, processing, summarizing, and reporting information required to be disclosed, within the time periods specified in the Commission’s rules and forms, and that such information was accumulated and communicated to management, including the principal executive officer and the principal financial officer, to allow timely decisions regarding required disclosures.
Management’s Report on Internal Control over Financial Reporting
The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process, under the supervision of the principal executive officer and the principal financial officer, designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with United States generally accepted accounting principles (GAAP). Internal control over financial reporting includes those policies and procedures that:
| i) | Pertain to the maintenance of records that is in reasonable detail accurately and fairly reflect the transactions and dispositions of the Company’s assets; |
| ii) | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with the authorizations of management and the board of directors; and |
| iii) | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements. |
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.
The Company’s management had assessed the effectiveness of our internal control over financial reporting as of June 30, 2023, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, which assessment identified material weaknesses in internal control over financial reporting had improved. A material weakness could create reasonable possibility that a material misstatement in annual or interim financial statements. The management considers its internal control over financial reporting required further improvement.
Management had concluded an internal control over financial reporting and glad to note that a majority of our Board of Directors was made up of independent directors and the Audit Committee comprised of all independent directors since 2023, the adequacy in the monitoring of required internal controls and procedures were improving.
While these control deficiencies did not result in any audit adjustments to our 2023 or 2022 interim or annual financial statements, it could have resulted in a material misstatement that might have been prevented or detected by a segregation of duties.
To the extent reasonably possible, given our limited resources, upon consummation of a merger with a private operating company, the Company had been relying on three or more individuals. We were expanding our current board of directors to include additional independents willing to perform directorial functions. Since the recited remedial actions and we would hire or engage additional personnel, this material weakness would be overcome in the near term. Until such remedial actions could be realized, we would continue to rely on the advice of outside professionals and consultants.
This quarterly report does not include an attestation report of our registered public accounting firm regarding our internal controls over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to Section 404(c) of the Sarbanes-Oxley Act that permit us to provide only management’s report in this annual report.
Changes in Internal Controls over Financial Reporting
During the period ended June 30, 2023, there had been no change in internal control over financial reporting that had materially affected or was reasonably likely to materially affect our internal control over financial reporting.
| 31 |
| Table of Contents |
PART II OTHER INFORMATION
Item 1. Legal Proceedings.
There are presently no pending legal proceedings to which the Company or any of its property is subject, or any material proceedings to which any director, officer or affiliate of the Company, any owner of record or beneficially of more than five percent of any class of voting securities is a party or has a material interest adverse to the Company, and no such proceedings are known to the Company to be threatened or contemplated against it.
Item 2. Unregistered Sale of Equity Securities and Use of Proceeds.
(a) None.
(b) None.
(c) None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable to our Company.
Item 5. Other Information.
None.
| 32 |
| Table of Contents |
Item 6. Exhibits.
Exhibit |
| Description |
|
|
|
| ||
|
|
|
| ||
|
|
|
| ||
|
|
|
| ||
|
|
|
101.INS |
| Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).* |
|
|
|
101.SCH |
| Inline XBRL Taxonomy Extension Schema Document.* |
|
|
|
101.CAL |
| Inline XBRL Taxonomy Extension Calculation Linkbase Document.* |
|
|
|
101.DEF |
| Inline XBRL Taxonomy Extension Definition Linkbase Document.* |
|
|
|
101.LAB |
| Inline XBRL Taxonomy Extension Labels Linkbase Document.* |
|
|
|
101.PRE |
| Inline XBRL Taxonomy Extension Presentation Linkbase Document.* |
|
|
|
104 |
| Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). |
__________
+ | In accordance with SEC Release 33-8238, Exhibit 32.1 and 32.2 are being furnished and not filed. |
|
|
* | Filed herewith. |
| 33 |
| Table of Contents |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
BIONEXUS GENE LAB CORPORATION |
|
|
|
/s/ Sook Keng Yeoh |
|
Sook Keng Yeoh |
|
Chief Executive Officer and Director |
|
(Principal Executive Officer) |
|
|
|
/s/ Wei Li Leong |
|
Wei Li Leong |
|
Chief Financial Officer |
|
(Principal Financial and Accounting Officer) |
|
|
|
August 16, 2023 | |
| 34 |
EXHIBIT 31.1
CERTIFICATION
I, Chief Executive Officer of Bionexus Gene Lab Corporation (the “Registrant”), certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of the Registrant for the fiscal quarter ended June 30, 2023; |
|
|
|
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
|
|
|
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; |
|
|
|
| 4. | The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: |
|
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
|
|
|
|
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
|
|
|
|
| (c) | Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
|
|
|
|
| (d) | Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and |
| 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): |
|
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and |
|
|
|
|
|
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting. |
August 16, 2023
| /s/ Sook Keng Yeoh |
|
| Sook Keng Yeoh |
|
| Chief Executive Officer and Director |
|
| (Principal Executive Officer) |
|
EXHIBIT 31.2
CERTIFICATION
I, Chief Financial Officer of Bionexus Gene Lab Corporation (the “Registrant”), certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of the Registrant for the fiscal quarter ended June 30, 2023; |
|
|
|
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
|
|
|
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; |
|
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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) | Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and |
| 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. |
August 16, 2023
| /s/ Wei Li Leong |
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| Wei Li Leong |
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| Chief Financial Officer |
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| (Principal Financial and Accounting Officer) |
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EXHIBIT 32.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officers of the registrant certify, to the best of their knowledge, that the registrant’s Quarterly Report on Form 10-Q for the period ended June 30, 2023 (the “Form 10-Q”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Form 10-Q, fairly presents, in all material respects, the financial condition and results of operations of the registrant.
| Bionexus Gene Lab Corporation |
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| Dated: August 16, 2023 |
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| /s/ Sook Keng Yeoh |
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| Sook Keng Yeoh Chief Executive Officer |
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| (Principal Executive Officer) |
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EXHIBIT 32.2
CERTIFICATION OF PRINCIPAL ACCOUNTING OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officers of the registrant certify, to the best of their knowledge, that the registrant’s Quarterly Report on Form 10-Q for the period ended June 30, 2023 (the “Form 10-Q”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Form 10-Q, fairly presents, in all material respects, the financial condition and results of operations of the registrant.
| Bionexus Gene Lab Corporation |
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| Dated: August 16, 2023 |
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| /s/ Wei Li Leong |
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| Wei Li Leong Chief Financial Officer |
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| (Principal Accounting Officer) |
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