BioNexus Gene Lab Corp

NOTE 1 – ORGANIZATION AND BUSINESS BACKGROUND

BioNexus Gene Lab Corp. (the “Company”) was incorporated in the State of Wyoming on May 12, 2017. On August 23, 2017, the Company acquired all the outstanding capital stock of BioNexus Gene Lab Sdn. Bhd., incorporated in Malaysia on April 7, 2015 which then subsequently changed its name to MRNA Scientific Sdn. Bhd. (MRNA Scientific) on September 19, 2023.

The principal office address is Unit A-28-7, Level 28, Tower A, Menara UOA Bangsar, No.5 Jalan Bangsar Utama 1, Kuala Lumpur, Malaysia, our lab is located at Lab 353, Chemical Science Centre, University Science Malaysia, George Town, Penang, Malaysia. We also have a blood collection center located at 1st floor, Lifecare Medical Centre, Kuala Lumpur, Malaysia.

On December 31, 2020, the Company consummated its acquisition of Chemrex Corporation Sdn. Bhd. (“Chemrex”), pursuant to a Share Exchange Agreement by and among the Company, Chemrex and the Chemrex shareholders wherein the Company acquired all the issued and outstanding shares of capital stock of Chemrex from the Chemrex shareholders in exchange for 68,487,261 shares of common stock of the Company.

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

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

The corporate structure as at December 31, 2024 is depicted below:

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

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

The consolidated financial statements include the accounts of BioNexus Gene Lab Corp. and its subsidiaries. Acquired businesses are included in the consolidated financial statements from the dates of acquisition. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. All inter-company accounts and transactions have been eliminated in consolidation.

The accompanying consolidated financial statements have been prepared on a going concern basis which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying consolidated financial statements, for the year ended December 31, 2024, the Company recorded a net loss of $1,598,342 and negative cash outflows from operating activities of $2,234,260 and as of December 31, 2024, the Company incurred an accumulated deficit of $3,442,620. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the financial statements are issued. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

The Company’s ability to continue as a going concern is dependent upon improving its profitability and the ability secure external financing and fundraising. Management believes the external financing or fundraising will provide additional cash to meet the Company’s obligations as they become due. No assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company can obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stockholders, in the case of equity financing.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant accounting estimates include certain assumptions related to allowance for credit losses for financial assets and impairment analysis of long-lived assets. Actual results may differ from these estimates.

Cash and cash equivalents 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.

The Company maintains cash balances with multiple financial institutions in Malaysia. Deposits at each institution are insured by the Malaysia Deposit Insurance Corporation (Perbadanan Insurans Deposit Malaysia or PIDM) up to RM250,000 (approximately USD 55,000) per depositor. From time to time, the Company’s cash balances may exceed these insured limits. However, the Company has not incurred any losses on such accounts and believes it is not exposed to significant risk. The Company actively monitors the balances held with these financial institutions and considers the likelihood of loss to be remote.

Trade receivables are recorded at the invoiced amount and are generally non-interest bearing. However, interest may be imposed on extended credit terms or overdue balances. The Company recognizes an allowance for credit losses in accordance with ASC 326, Financial Instruments – Credit Losses, using an expected credit loss (ECL) model.

The allowance for credit losses is measured based on historical collection experience, aging of receivables, customer-specific credit risk, and current and expected future economic conditions. The Company disaggregates its trade receivables by customer type, as management has determined that risk profiles vary based on the industry and nature of the customer. For each customer type, the Company applies a historical loss rate matrix, adjusted for forward-looking information and macroeconomic trends relevant to the industries in which customers operate.

In addition to the collective assessment, specific allowances are established for customers with known financial difficulties or higher risk of default, based on a review of individual outstanding invoices and relevant credit information.

Trade receivables are written off against the allowance when all reasonable collection efforts have been exhausted and recovery is considered remote. The allowance for credit losses is recorded as a contra-asset account to trade receivables in the consolidated balance sheets, and changes to the allowance are recognized in the consolidated statement of operations and comprehensive income/(loss).

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

The Company determines if a contract is or contains a lease at the inception of the contract or modification of the contract. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period in exchange for consideration. Control over the use of the identified asset means the lessee has both (a) the right to obtain substantially all of the economic benefits from the use of the asset and (b) the right to direct the use of the asset.

Finance and operating lease right-of-use (“ROU”) assets and liabilities are recognized based on the present value of future minimum lease payments over the expected lease term at commencement date. As the implicit rate is not determinable in most of the Company’s leases, management uses the Company’s incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The expected lease term includes options to extend or terminate the lease when it is reasonably certain the Company will exercise the option. Lease expense for minimum lease payments is recognized on a straight-line basis over the expected lease term.

The Company’s lease arrangements have lease and non-lease components. Leases with an expected term of 12 months or less are not accounted for on the balance sheet and the related lease expense is recognized on a straight-line basis over the expected lease term.

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

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

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

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

The Company accounts for its investments that represent less than 20% ownership, and for which the Company does not have the ability to exercise significant influence, using ASC 321, Investments—Equity Securities. Equity securities with readily determinable fair values are measured at fair value, with changes in fair value recognized in net income. These investments are classified within “Investments in equity securities” on the consolidated balance sheets, and unrealized gains and losses are included in “Other income (expense), net” in the consolidated statement of operations and comprehensive income/(loss).

For equity securities without readily determinable fair values, the Company may elect the practicability exception to measure such investments at cost, less impairment, if any, plus or minus observable price changes in orderly transactions for the identical or a similar investment of the same issuer. These securities are evaluated at each reporting period for impairment or observable price changes.

Realized gains and losses on sales of equity securities are determined based on the specific identification method and are also recorded in net income.

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.

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:

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

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

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 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.

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.

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

The functional currency of the Company is the United States Dollars (“US$”) and the accompanying financial statements have been expressed in US$ as being the primary currency of the economic environment in which the Company operates. The functional currency of the subsidiaries is Malaysian Ringgit (“MYR”) as being the primary currency of the economic environment in which the subsidiaries operate.

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

Translation of amounts from RM (MYR) into US$1.00 has been made at the following exchange rates for the respective years:

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

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

The carrying value of the Company’s financial instruments: cash and bank balances, fixed deposits placed with financial institutions, trade receivable, other receivables, deposits, trade payables, other payables and accrued liabilities, advance payment from customers and amount owing to directors approximate at their fair values because of the short-term nature of these financial instruments

As of December 31, 2024, and December 31, 2023, the Company did not have any non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements, at least annually, on a recurring basis, nor did the Company have any assets or liabilities measured at fair value on a non-recurring basis.

The Company has reviewed all recently issued, but not yet effective, considers the applicability and impact of all accounting standards updates (“ASUs”).

Management periodically reviews new accounting standards that are issued.

Accounting Standards Adopted in 2024

Accounting Standards Update 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures:

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The new standard provides improvements to reportable segment disclosure requirements through amendments that require disclosure of significant segment expenses and other segment items on an interim and annual basis and requires all annual disclosures about a reportable segment’s profit or loss and assets to be made on an interim basis. The standard also requires the disclosure of the chief operating decision maker’s (“CODM”) title and position and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. The standard also clarifies that if the CODM uses more than one measure in assessing segment performance and deciding how to allocate resources, a company may report the additional segment profit or loss measure(s) and that companies with a single reportable segment must provide all disclosures required by this amendment. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The standard should be applied retrospectively to all prior periods presented in the financial statements.

During the fourth quarter of 2024, we adopted ASU 2023-07 and enhanced our segment disclosures in line with the new guidance. The adoption had no effect on our consolidated financial statements.

Accounting Standards not yet Adopted

Accounting Standards Update 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures:

In December 2023, the FASB issued ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. The ASU 2023-09 is effective for annual reporting periods beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact that this ASU may have on its consolidated financial statements and related disclosures.

The Company does not expect that any other recently issued accounting pronouncements will have a significant effect on its condensed consolidated financial statements.

Accounting Standards Update 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses:

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses. The new standard requires entities to disclose additional information about certain expenses, such as purchases of inventory, employee compensation, depreciation, intangible asset amortization, as well as selling expenses included in commonly presented expense captions on the income statement. The FASB further clarified the effective date in January 2025 with the issuance of ASU 2025-01, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date. The ASU is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Companies have the option to apply this guidance either on a retrospective or prospective basis, and early adoption is permitted.

The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements and related disclosures.

The Company does not expect that any other recently issued accounting pronouncements will have a significant effect on its consolidated financial statements.

NOTE 3 – TRADE RECEIVABLES

The Company’s trade receivables represent amounts due from customers that are unrelated parties and related parties of $47,272 and $4,520 respectively for year 2024 and 2023. Trade receivables are initially recognized at the invoiced amount and subsequently measured at amortized cost, net of an allowance for expected credit losses. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Trade receivables are written off when they are determined to be uncollectible, and all reasonable collection efforts have been exhausted.

As of December 31, 2024, the Company performed an analysis of all outstanding trade receivables in accordance with the expected credit loss model under ASC 326. The Company considered historical collection trends, aging of balances, customer credit profiles, and current and forecasted economic conditions in estimating the allowance.

The Company’s standard credit terms range from 30 to 90 days. Certain receivables are interest-bearing. Specifically, Intralink Techno was charged with interest at 6% per annum from May 2021 to June 2023. From July 2023 onwards, the Company increased its interest rate to 8.4%.

Movement for trade receivables allowance for impairment accounts:

NOTE 4 – INCOME TAXES

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

Provision for income taxes consisted of the following:

United States of America

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

Malaysia

MRNA Scientific Malaysia and Chemrex are both subject to Malaysia Corporate Tax, which is charged at the statutory income tax rate range from 15% to 24% on its assessable income.

Although the Company is domiciled in the United States, a substantial portion of its pre-tax income/(loss) is generated by its foreign subsidiaries. Accordingly, the consolidated effective tax rate is significantly influenced by foreign tax jurisdictions and certain non-deductible expenses.

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

The Company has operating lease arrangements for office space, lab, and motor vehicles in Malaysia with a term between two and five years, generally with option to renew the lease after that date. The Company accounts for the lease and non-lease components of its leases as a single lease component. Lease expense is recognized on a straight-line basis over the lease term.

Operating lease right-of-use assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term.

The present value of the lease payments are discounted with rates ranging from 6.40% to 6.65% per annum. These rates are reference from base rate of Malayan Banking Berhad, the largest bank in Malaysia.

As of December 31, 2024 and 2023 operating lease liabilities as follows:

As of December 31, 2024 and 2023, the maturities of the operating lease liabilities are as follows:

(1) During the year ended December 31, 2024, the Company entered into a new operating lease of office space in Malaysia for 5 years. Additional right-of-use assets at $131,581 and lease liabilities at $131,581 were recognised upon the commencement of lease term. The Company also renewed the lease for the lab in Penang, Malaysia, for 2 years, with additional right-of-use assets of $14,155 and lease liabilities of $14,155 recognised upon the commencement of lease term.

(2) The amortization of the operating lease right-of-use asset for the year ended December 31, 2024 and 2023 were $48,983 and $25,170, respectively.

(3) The Company agreed to terminate its operating lease arrangement for office space in Malaysia, effective August 31, 2024. Accordingly, at the date of termination of the operating lease, the Company expensed a right-of-use-asset, net of accumulated depreciation, of $25,094 and recorded a write-off of lease liability of $25,679, offset with deposit forfeited by landlord at $1,969, with a loss on lease termination recorded for $1,384.

(4) Lease expenses for the year ended December 31, 2024 and 2023 were $60,778 and $30,783 respectively.

NOTE 6 – PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following:

During the year ended December 31, 2024 and 2023, the Company recorded depreciation of $104,160 and $83,253, respectively.

*includes an amount of $109,509 as explained in Note 14

NOTE 7 – INVESTMENTS IN EQUITY SECURITIES

For the year ended December 31, 2024 and 2023, the net fair value gains on the investments in equity securities were $69,476 and $313,859 recorded in other income of the Consolidated Statements of Operations and Comprehensive Income/(Loss).

The Company’s investment in equity securities is measured at fair value on a recurring basis. These equity securities are classified as Level 1 in the fair value hierarchy, as the fair value is determined using quoted market prices in active markets for identical assets. Specifically, the stock prices of these securities are readily available on the stock exchange, providing a reliable and observable input to the fair value measurement.

As these securities are actively traded, the quoted prices in the market are considered to be the most reliable indicator of fair value. No significant adjustments are made to these prices, as they reflect current market conditions at the measurement date.

NOTE 8 – TRADE PAYABLES

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

NOTE 9 – REVENUE

The following table shows disaggregated net revenue from contracts with customers by product or service line and geographic area for the year ended December 31, 2024 and 2023:

Revenue is derived from the sale of industrial chemicals and the provision of genomic screening services. Revenue from the sale of goods is recognized at a point in time when control of the goods is transferred to the customer. Credit terms are generally from 30 to 90 days. The Company allows returns only for exchanges with new goods. No warranties are given on the sale of goods.

Revenue from services is recognized at a point in time when the final report is delivered to the customer. Credit terms for these services are generally from 30 days to 60 days. No warranties are given on the services rendered.

In applying ASC 606, the Company does not exercise significant judgment in determining whether revenue from the sale of goods and services should be recognized at a point in time. The criteria for recognizing revenue at a point in time, such as the transfer of control of goods or completion of services, are clear and are based on established contract terms. Therefore, no significant judgment is required in determining the timing of revenue recognition.

NOTE 10 – RELATED PARTY TRANSACTIONS

The following table provides details of the total revenue earned and expenses incurred from all related party transactions:

The balances related to the above transactions with related parties are as disclosed in the Consolidated Balance Sheets which are interest-free, unsecured and subject to normal credit terms.

NOTE 11 – CONCENTRATION OF RISKS

a) Major customers

There are no major customers who accounted for 10% or more of the Company’s revenue for the financial year ended December 31, 2024 and December 2023.

b) Major suppliers

For year ended December 31, 2024 and 2023, 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:

NOTE 12– STOCKHOLDERS’ EQUITY

As at December 31, 2024 and 2023, the Company issued and outstanding, common stock is 17,967,663 and 17,667,663 shares respectively.

Reverse Stock Split

On June 5, 2023, the Company filed an Article of Amendment to the Articles of Incorporation with the Wyoming Secretary of State to modify the ratio of the Reverse Stock Split from one-for-ten (10) to one-for-twelve (12) (the “Revised Reverse Stock Split”). Upon effectiveness of the Revised Reverse Stock Split, every twelve (12) outstanding shares of common stock were combined into and automatically became one share of common stock. No fractional shares was issued in connection with the Revised Reverse Stock Split and all such fractional shares or odd lots (less than 100 shares to any record or beneficial holder) issuable in the Revised Reverse Stock Split were rounded up to 100 shares. An aggregate of 1,044,351 shares were issued to applicable shareholders as a result of the round-up.

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

Public Offering & Nasdaq Listing

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

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

The securities were offered by the Company pursuant to the registration statement on Form S-1 (File No. 333-269753), which was originally filed with the U.S. Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended, on February 14, 2023, and declared effective by the Commission on July 19, 2023.

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

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

In August, 2023, an aggregate of 75,000 shares of common stock were issued to three directors in lieu of cash for services rendered in connection with their employment as directors of the Company.

From July 20, 2023 to August 4, 2023, an aggregate total of 1,044,351 shares of common stock were issued as part of the round-up exercise to the reverse stock split.

In August 2024,300,000 shares of common stock were issued to professional parties or service providers in lieu of cash for services rendered.

NOTE 13 – SEGMENT INFORMATION

The Company determines it reportable segments based on its internal organization structure and internal management reporting used to assess and allocate resources. This information are regularly reviewed by the Company’s Chief Executive Officer who is identified as the Chief Operating Decision Maker (“CODM”). The Company consists of three operating units, BioNexus Gene Lab Corp., MRNA Scientific Sdn. Bhd. and Chemrex Corporation Sdn. Bhd. which are determined as three reportable segments, as described below. These reportable segments offer different products and services, and are managed separately because they require different technology and marketing strategies. The following describes the operations in each of the Company’s reportable segments:

The CODM evaluates the performance of each reportable segment based on operating income and key segment-specific metrics. There are no inter-segment revenue transactions between reportable segments. Except for investment holding activities and the revenue to the overseas customers as disclosed in Note 9, the Company’s revenue and principal operations are substantially confined within Malaysia.

Pursuant to ASU 2023-07, “Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures”, the financial information concerning the Company’s reportable segments is shown as below:

The Company had no inter-segment sales for the years presented.

NOTE 14 - SIGNIFICANT EVENTS

On January 12, 2024, our subsidiary, MRNA Scientific issued a termination notice to one of our suppliers for failing to deliver hardware of merchantable quality, for a contract with the value of MYR500,000 (approximately USD $109,000). Through subsequent negotiations, MRNA Scientific has been offered a without prejudice settlement of MYR350,000 (approximately USD $76,000) via a letter from the suppliers’ legal counsel, dated March 21, 2024.

On 30 May 2024, the supplier had proposed to collect the hardware from MRNA Scientific premises and upon the hardware being returned intact in same condition per deliver, the supplier would refund the sum of MYR350,000 (approximately USD $33,000) to MRNA Scientific.

The supplier then duly refunded the sum on June 14, 2024 whereby MRNA Scientific had confirmed the receipt on June 19, 2024. MRNA Scientific then net off the receipt with fixed asset decapitalization in Balance Sheet while the remaining balance was recorded in the book as loss arising from settlement of supplier dispute in Income Statement.

On August 23, 2024, the Company, through its wholly-owned subsidiary, MRNA Scientific Sdn Bhd, finalized its strategic investment in Ascension Innovation Sdn Bhd (“AISB”), a Malaysian-based healthcare technology company. The investment, totalling RM 1 million (approximately USD 228k), was made to acquire a significant equity stake in AISB.

The funds were used to subscribe to 10,758 units of Ordinary Shares in AISB. This strategic investment is aimed at accelerating AISB’s development and deployment of its AI-driven healthcare solutions, particularly through its aiCMS platform, which integrates predictive analytics and generative AI tools for enhanced patient care.

On September 11, 2024, the Company announced that its wholly owned subsidiary, Chemrex Corporation Sdn. Bhd. invested RM 2 million (approx. USD $450,000) to commence production of fine-quality color paste (non-drying type) for composite industrial customers, with operations set to begin in September 2024. The full press release outlined the advantages of this new production line, including increased profit margins, improved quality control, timely delivery of products, competitive pricing, and market opportunities in Southeast Asia, the Middle East, Australia, and New Zealand.

On September 12, 2024, the Company announced that its wholly owned subsidiary MRNA Scientific Sdn. Bhd. had signed a strategic partnership Memorandum of Understanding with Shenzhen Rongguang Health Group (“Rongguang”), a leading healthcare provider in China. The collaboration aims to expand expertise in cancer screening, precision medicine, and preventative healthcare, focusing on early detection, personalized health solutions, and chronic disease management.

Through MRNA Scientific, the Company will enhance cancer screening across Southeast Asia and China, while both companies will jointly develop regenerative medicine technologies and preventative care solutions.

On September 14, 2024, the Company issued a press release announcing that its wholly owned subsidiary MRNA Scientific Sdn. Bhd. had signed a strategic outsourcing agreement with VITARRAY Global Pte. Ltd. (“Vitarray”), an exempted private company incorporated in Singapore. This agreement focuses on the provision of mRNA dynamic gene detection services for the Southeast Asian market.

Leveraging MRNA Scientific’s advanced testing facilities in Kuala Lumpur, the collaboration aims to enhance early disease detection, including for cancer and cardiovascular conditions, while expanding access to molecular diagnostics. Vitarray, authorized by China’s Huaxia Jingdu Renhe Medical Laboratory to manage overseas gene detection, will supply samples, and MRNA Scientific will handle testing. The agreement is expected to improve profitability and expanding market reach.

On September 23, 2024, MRNA Scientific Sdn. Bhd. (“MRNA”), a wholly-owned subsidiary of the Company, entered into a teaming agreement with Protech Builders Sdn. Bhd. (“Protech”), a Malaysian mechanical and electrical engineering firm.

Pursuant to the Agreement, the Company and Protech have agreed to collaborate on the development, marketing, and operation of biogas plants across Malaysia. The Agreement establishes a three-year term during which the parties will jointly identify and pursue biogas project opportunities, particularly focusing on converting plantation wastewater into renewable energy.

The 2024 Annual Meeting of Shareholders of BioNexus Gene Lab Corp. (the “Company”) was held on Friday, October 4, 2024 (“Annual Meeting”). The voting results on the five (5) proposals considered and voted on at the Annual Meeting, all of which were described in the Company's proxy statement filed with the Securities and Exchange Commission on September 16, 2024, were as follows:

Proposal 1. Re-election of Directors: The five (5) director nominees for election to the Company’s Board of Directors were elected to serve until the 2025 annual meeting of shareholders.

Proposal 2. Re-appointment of Auditor: To re-appoint JP Centurion & Partners PLT in Kuala Lumpur, Malaysia, as auditor of the Company to hold office from the conclusion of the Annual Meeting until the conclusion of the annual meeting of the Company to be held in 2025, and to approve the discretion of the Board to determine the remuneration of the same. The proposal was approved.

Proposal 3. Approval of the 2024 Stock Incentive Plan: The proposal was not approved.

Proposal 4. Approval of a Reverse Stock Split Proposal: Approval of an amendment to our Amended and Restated Certificate of Incorporation to effect a reverse stock split of our outstanding shares of common stock, no par value, at a ratio ranging from one-for-two (1:2) to one-for-ten (1:10), with the exact ratio to be set within that range at the discretion of our Board of Directors without further approval or authorization of our stockholders. The proposal was not approved.

Proposal 5. Approval of an Adjournment of the Annual Meeting: Approval of an adjournment of the Annual Meeting if necessary to solicit additional proxies if there are not sufficient votes in favor of Proposal No. 1 (the "Adjournment Proposal"). The proposal was not approved.

NOTE 15 – SUBSEQUENT EVENTS

In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred after December 31, 2024 up through April 15, 2025 of these consolidated financial statements.

During the period, the Company did not have any material recognizable subsequent events. During the year, there was no subsequent event that required recognition or disclosure, except for those previously disclosed.

On February 11, 2025, the Company filed with the Wyoming Secretary of State Articles of Amendment to its Articles of Incorporation (a true and correct copy of which is attached hereto as Exhibit 3.6) (“Amendment”). The Amendment authorized the creation of one (1) share of the Series Z Convertible Preferred Stock. On February 10, 2025, the Company’s Board of Directors approved the creation of the Series Z Preferred Stock and the filing of the Amendment with the Wyoming Secretary of State. On that same date, the Board of Directors approved the issuance of the Series Z Preferred Stock to Muhammad Azrul bin Abdul Hamid, a member of the Board of Directors and the Audit Committee.

The purpose of the Series Z Preferred Stock was to increase the likelihood of procuring the votes necessary to effectuate the Reverse Stock Split Proposal had a majority of the common stockholders voted in favor of the Reverse Stock Split Proposal in the Special Shareholders’ Meeting. The Series Z Preferred Stock proportionately “mirrored” the votes placed by the common stockholders of the Company at the Special Shareholders’ Meeting.

On March 5, 2025, the Company issued a press release announcing that its Board of Directors had formally approved a new treasury strategy focused exclusively on Ethereum (ETH) as a strategic treasury asset. This decision positioned the Company as a leader among Nasdaq-listed companies in prioritizing Ethereum for treasury management.

In connection with this announcement, the Company released an Ethereum Strategy Whitepaper, which provided detailed insight into the rationale for adopting Ethereum as a treasury asset. The whitepaper is publicly available on the Company’s website at www.bionexusgenelab.com/ethstrategy.

On March 7, 2025, the Company issued a press release announcing a strategic partnership with ML Tech to optimize its Ethereum-based growth strategies. ML Tech, an AI-driven wealth management platform for digital assets regulated by the National Futures Association (NFA) and headquartered in Miami, Florida, will provide institutional-grade trading strategies to BGLC.

On March 19, 2025, the Company held a Special Meeting of Shareholders. Two proposals were voted on by the Shareholders and the results are as follows:

Proposal 1 (APPROVED) : Approval of an amendment to the Amended and Restated Certificate of Incorporation to effect a reverse stock split of the Company’s outstanding shares of common stock, with a ratio ranging from one-for-five (1:5) to one-for-ten (1:10), with the exact ratio to be set at the discretion of the Board of Directors.

Proposal 2 (APPROVED): Approval of an adjournment of the Meeting, if necessary, to solicit additional proxies if there were insufficient votes in favor of Proposal 1.

On April 1, 2025, the Company’s Articles of Amendment regarding the reverse stock split was filed with the Wyoming Secretary of State. At 12:01 a.m. Eastern Time on April 7, 2025, the Company effected a reverse stock split and the Company’s common stock will began trading on a split-adjusted basis on The Nasdaq Capital Market under the existing ticker symbol “BGLC” on that same day, with the new CUSIP number for the Company 090628306.

No fractional shares were issued in connection with the reverse stock split. Instead, shareholders who would otherwise be entitled to receive a fractional share received a cash payment in lieu thereof based on the daily Volume Weighted Average Price (VWAP) of our common stock, calculated for the ten (10) trading days immediately preceding the effective date of the Reverse Stock Split, multiplied by the fractional share.