BioNexus Gene Lab Corp

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 2026 AND DECEMBER 31, 2025

• Issued and outstanding shares of common stock have been adjusted as below:

1. for the periods prior to April 7, 2025, to reflect the 1-for-10 reverse stock split effected on that date on a retroactive basis as described in Note 15.

2. for the periods prior to July 20, 2023, to reflect the 1-for-12 reverse stock split effected on that date on a retroactive basis as described in Note 15

See accompanying notes to the consolidated financial statements.

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (CONT’D)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS)

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

Weighted average shares outstanding and per share amount have been adjusted for the periods shown to reflect the 1-for-10 reverse stock split effected on April 7, 2025 and the 1-for-12 reverse stock split effected on July 20, 2023, on a retroactive basis as described in Note 15.

See accompanying notes to the condensed consolidated financial statements

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

AS OF JUNE 30, 2026 AND 2025

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

• Share activity (number of shares or both number and amount of shares) has been adjusted for the periods shown to reflect the 1-for-10 reverse stock split effected on April 7, 2025 and the 1-for-12 reverse stock split effected on July 20, 2023, on a retroactive basis.

Rounding down of 169.30 fractional shares resulting from a 10-to-1 reverse stock split at a price of $2.98 per share

• Share activity (number of shares or both number and amount of shares) has been adjusted for the periods shown to reflect the 1-for-10 reverse stock split effected on April 7, 2025 and the 1-for-12 reverse stock split effected on July 20, 2023, on a retroactive basis.

See accompanying notes to the condensed consolidated financial statements.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2026 AND 2025

See accompanying notes to the condensed consolidated financial statements

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., a Malaysian corporation (“BioNexus Malaysia”). BioNexus Malaysia was incorporated in Malaysia on April 7, 2015 and 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, and our lab is located at Lab 353, Chemical Science Centre, University Science Malaysia, George Town, Penang, 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 June 30, 2026 is depicted below:

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.

The accompanying condensed consolidated financial statements as of and for the six months ended June 30, 2026 and 2025 have been prepared pursuant to the rules and regulations of the securities and exchange Commission (the “SEC”) that permit reduced disclosure for interim periods. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted.

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the period ended June 30, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. The Condensed Consolidated Balance Sheet information as of December 31, 2025 was derived from the Company’s audited Consolidated Financial Statements as of and for the year ended December 31, 2025 included in the Company’s Annual Report on Form 10-K filed with the SEC on April 14, 2026. These financial statements should be read in conjunction with that report.

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 period ended June 30, 2026, the Company recorded a net loss of $830,026 and negative cash outflows from operating activities of $570,162 and as of June 30, 2026, the Company incurred an accumulated deficit of $7,257,253. 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 operating results and maintaining adequate liquidity. Management believes that the Company’s existing cash balance, together with its positive working capital position, will provide sufficient liquidity to fund operations and meet its obligations as they become due for at least the next twelve months from the date these condensed consolidated financial statements are issued. In addition, the Company may seek external financing or pursue fundraising opportunities to further strengthen its liquidity position and support future growth initiatives.

No assurance can be given that any additional financing, if needed, will be available, or, if available, that it will be on terms satisfactory to the Company. If the Company obtains debt financing, it may be subject to restrictive covenants and repayment obligations that could adversely affect its operations. If the Company raises capital through the issuance of equity securities, existing stockholders may experience substantial dilution.

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 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 as well as in the United States. Deposits placed with each institution in Malaysia are insured by the Malaysia Deposit Insurance Corporation (Perbadanan Insurans Deposit Malaysia, or PIDM) up to RM250,000 (approximately USD 61,300) per depositor. While for deposits placed with institution in the United States, it is insured by the Federal Deposit Insurance Corporation (FDIC) up to USD250,000 per depositor, per insured bank, for each account ownership category under the FDIC's general deposit insurance rules.

From time to time, the Company’s cash balances may exceed these insured limits. As of June 30, 2026, cash balances exceeding the insured limit amounted to $2,117,186. However, the Company has not experienced any losses on such accounts and believes that its exposure to credit risk is not significant. The Company actively monitors its balances with these financial institutions and considers the risk 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 a straight-line basis to write off the cost over the following expected useful lives of the assets concerned.

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.

Leases that transfer substantially all the rewards and risks of ownership to the lessee, other than legal title, are accounted for as finance leases. Substantially all of the risks or benefits of ownership are deemed to have been transferred if any one of the four criteria is met:(i) transfer of ownership to the lessee at the end of the lease term, (ii) the lease containing a bargain purchase option, (iii) the lease term exceeding 75% of the estimated economic life of the leased asset, (iv) the present value of the minimum lease payments exceeding 90% of the fair value. At the inception of a finance lease, the Company as the lessee records an asset and an obligation at an amount equal to the present value of the minimum lease payments. The leased asset is amortized over the shorter of the lease term or its estimated useful life if title does not transfer to the Company, while the leased asset is depreciated in accordance with the Company’s depreciation policy if the title is to eventually transfer to the Company. The periodic rent payments made during the lease term are allocated between a reduction in the obligation and interest element using the effective interest method in accordance with the provisions of ASC Topic 835-30, “Imputation of Interest”.

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 fulfils 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 and 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 disclose uncertain tax positions taken in their financial statements 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 Dollar (“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:

Related 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.

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 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 June 30, 2026 and December 31, 2025, respectively, 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 2025

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. The new standard was issued to improve transparency and decision usefulness of income tax disclosures by providing information that helps investors better understand how an entity’s operations, tax risks, tax planning and operational opportunities affect its tax rate and prospects for future cash flows. The amendments in this update primarily relate to requiring greater disaggregated disclosure of information in the rate reconciliation, income taxes paid, income (loss) from continuing operations before income tax expense (benefit), and income tax expense (benefit) from continuing operations. The ASU is effective for fiscal years beginning after December 15, 2024, and early adoption is permitted. The standard can be applied prospectively or retrospectively. The Company adopted this ASU prospectively in the fourth quarter of 2025, and the required disclosures are included in Note 5, Income Taxes.

Accounting Standards not yet adopted

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.

Accounting Standards Update 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets:

In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments in the ASU provide (1) all entities with practical expedient and (2) entities other than public business entities (PBEs) with an accounting policy election when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606. The ASU is effective for fiscal years and interim periods beginning after December 15, 2025. Companies should apply this guidance on a prospective basis, and early adoption is permitted.

The Company is reviewing the accounting standards update 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 $NIL and $31,420 respectively for June 30, 2026 and December 31, 2025. 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 June 30, 2026, 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, one customer 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 – OTHER ASSETS

On November 28, 2025, the Company entered into an Exclusive Intellectual Property License Agreement (the “License Agreement”) with Fidelion Diagnostics Pte. Ltd. (“Fidelion”), pursuant to which the Company received an exclusive, irrevocable license to use, develop, manufacture, market, distribute, and sell products utilizing the VitaGuard™ minimal residual disease (“MRD”) liquid biopsy platform in the member states of the Association of Southeast Asian Nations (“ASEAN”). The License Agreement was entered into together with the Share Subscription and Shareholders’ Agreement between the Company and Fidelion, among others, whereby Fidelion issued to the Company 180 Ordinary Shares (approximately 15% of Fidelion’s share capital) and the Company issued 392,329 shares of its restricted common stock to Fidelion (approximately 16.6% of the Company’s issued and outstanding common stock).

In consideration for the license, the Company agreed to pay Fidelion a total license fee of $2,000,000 in 24 equal monthly instalments. Instalment payments made under the License Agreement are recorded as prepaid amounts within Other Assets. The Company has not recognized the license rights as a separate intangible asset as of June 30, 2026.

NOTE 5 – INCOME TAXES

Loss before income taxes for the six months ended June 30, 2026 and 2025 is summarized as follows:

Provision for income taxes for the six-month periods ended June 30, 2026 and 2025 is summarized as follows:

The income taxes paid/(net of refunds) by jurisdiction for six-month periods ended June 30, 2026 and 2025, as reported in the Consolidated Statements of Cash Flows, are as follows:

The reconciliation of the federal statutory income tax amount and rate to the Company’s effective tax rate for six-month periods ended June 30, 2026 and 2025 is as follows:

The significant components of deferred taxes of the Company are as follows:

The table below summarizes changes in the valuation allowance for deferred tax assets for the six-month periods ended June 30, 2026 and 2025 presented:

The Company believes that it is more likely than not that the deferred tax assets will not be fully realized in the future. Accordingly, the Company established a valuation allowance of 12,074,302 to offset deferred tax assets of $12,074,302, including deferred tax assets related to the net operating loss (NOL) carry forwards of $11,924,337 as of June 30, 2026.

For the six-month periods ended June 30, 2026 and 2025, a valuation allowance was increased by $666,484, this increase was primarily due to an increase of NOL carry-forwards of $421,417 from the holding company.

United States of America

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

For the six-month periods ended June 30, 2026 and 2025 the operations in the United States of America incurred a net operating loss (NOL) of $421,417 and $441,349 respectively.

As of June 30, 2026, the cumulative net operating losses (NOLs) were $9,359,539 which can be carried forward to offset future taxable income. The NOL carry-forwards begin to expire in 2041, if unutilized.

Malaysia

The Company’s subsidiaries operating in Malaysia are subject to the Malaysia Corporate Tax Laws at a standard income tax rate of 24% on their assessable income for the tax year.

For the six-month periods ended June 30, 2026 and 2025 the subsidiaries in Malaysia incurred an aggregate net operating loss (NOL) of $209,654 and $712,323, respectively.

As of June 30, 2026, the operations in Malaysia had incurred the aggregate amount of cumulative net operating losses (NOLs) of $2,564,798 which can be carried forward indefinitely to offset taxable income in the future. The NOL carry-forwards begin to expire in 2033, if unutilized.

NOTE 6 – OPERATING LEASE RIGHT OF USE ASSETS 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. 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 is discounted at 6.65% per annum. This rate is reference from base rate of Malayan Banking Berhad, the largest bank in Malaysia.

As of June 30, 2026 and December 31, 2025, operating lease right-of-use assets are as follows:

As of June 30, 2026 and December 31, 2025, operating lease liabilities are as follows:

As of June 30, 2026 and December 31, 2025, the maturities of the operating lease obligation are as follows:

The amortization of the operating lease right of use asset for the six-month periods ended June 30, 2026 and 2025 were $31,193 and $27,312 respectively.

Lease expenses for the six-month periods ended June 30, 2026 and 2025 were $36,552 and $33,932, respectively.

NOTE 7 – FINANCE LEASE RIGHT OF USE ASSET AND LEASE LIABILITY

The Company purchased motor vehicles under finance lease agreements with the effective interest rate of 5.12% of per annum, with principal and interest payable monthly. The obligations under the finance lease are as follows:

As of June 30, 2026 and December 31, 2025, finance lease right-of-use assets are as follows:

The amortization of right of use assets is on a straight-line basis over 84 months (approximately $897 per month), commence from April 1, 2026 onwards.

The first repayment of the finance lease liabilities will also fall due from April 1, 2026 onwards.

As of June 30, 2026 and December 31, 2025, finance lease liabilities are as follows:

As of June 30, 2026 and December 31, 2025, the maturities of the finance lease obligation are as follows:

The amortization of the finance lease right of use asset for the six-month period ended June 30, 2026 and 2025 were $2,723 and $nil respectively.

Lease expenses for the six-month periods ended June 30, 2026 and 2025 were $3,640 and $nil respectively.

NOTE 8 – PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following:

During the six-month periods ended June 30, 2026 and 2025, the Company recorded depreciation of $56,358 and $54,442, respectively.

NOTE 9 – INVESTMENTS IN EQUITY SECURITIES

For the six-month periods ended June 30, 2026 and 2025, respectively, the net fair value gain/ (loss)on the investments in equity securities were $Nil and $(91,243) recorded in administrative expenses and other income of the Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss).

The investments in equity securities consist of the following shares:

Equity Securities Without Readily Determinable Fair Values

The Company’s investments in equity securities without readily determinable fair values consist of investments in privately held companies and totaled $2,026,543 and $2,027,540 as of June 30, 2026 and December 31, 2025, respectively.

These investments are accounted for in accordance with ASC 321,Investments—Equity Securities, using the measurement alternative, under which such securities are measured at cost, less impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer.

The Company evaluates these investments for impairment on a quarterly basis by performing a qualitative assessment to determine whether the fair value of an investment is less than its carrying amount. If an impairment is identified, the investment is written down to its fair value, with the loss recognized in earnings. In addition, the carrying value of these investments is adjusted for observable price changes in orderly transactions for identical or similar investments of the same issuer.

Because these investments are in privately held companies and lack observable market prices, the determination of fair value for impairment assessments requires significant judgment. When such investments are remeasured due to impairment or observable price changes, the resulting fair value measurements are classified within Level 3 of the fair value hierarchy.

For fiscal year 2025, the Company issued 392,329 shares of common stock at a value of $1,781,174 to Fidelion Diagnostics Pte. Ltd (“Fidelion”) as consideration for the Company’s subscription of Fidelion shares. This transaction formed part of the conditions under the Share Subscription and Shareholders’ Agreement entered into with Fidelion and Tongshu Biotechnology (Hong Kong) Co., Limited.

NOTE 10 – 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 11 – OTHER PAYABLES AND ACCRUED LIABILITIES

As of June 30, 2026, other payables comprised mainly amounts owing to service provider and instalment payment due to Fidelion relating to the licensing agreement at $296,331. All amounts have short payment terms.

NOTE 12 – REVENUE

The following table shows disaggregated net revenue from contracts with customers by product or service line and geographic area for the three- and six-month periods ended June 30, 2026 and 2025:

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 13 – 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 Condensed Consolidated Balance Sheets which are interest-free, unsecured and subject to normal credit terms.

The related parties consist of companies in which former directors have substantial financial interests and Fidelion, in which the Company’s Chief Executive Officer has a shareholding and serves as chief executive officer-designate. The related-party payable of $296,331 as of June 30, 2026 relates to amounts due to Fidelion under the License Agreement.

NOTE 14 – CONCENTRATION OF RISKS

a) Major customers

For the three-month periods ended June 30, 2026, and 2025, respectively, the customers who accounted for 10% or more of the Company's revenues and its accounts received balance at period-end are presented as follows:

For the six-month periods ended June 30, 2026, and 2025, respectively, the customers who accounted for 10% or more of the Company's revenues and its accounts received balance at period-end are presented as follows:

b) Major suppliers

For the three-month periods ended June 30, 2026, and 2025, respectively, the suppliers who accounted for 10% or more of the Company’s cost of sales and their balances at period ended are presented as follows:

For the six-month periods ended June 30, 2026, and 2025, respectively, the suppliers who accounted for 10% or more of the Company’s cost of sales and their balances at period ended are presented as follows:

NOTE 15 – STOCKHOLDERS’ EQUITY

As at June 30, 2026 and December 31, 2025, the Company issued and outstanding, common stock is 2,417,314 shares, respectively.

Reverse Stock Split

On March 19, 2025, the Company held a Special Meeting of Shareholders which, among other items, approved of an amendment to the Amended and Restated Certificate of Incorporation toeffect 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.

On April 1, 2025, the Company filed its Articles of Amendment with the Wyoming Secretary of State to effect a one for ten (1 for 10) reverse stock split of its issued and outstanding common stock. Immediately prior to the reverse stock split, the Company had 17,967,663 shares of common stock issued and outstanding and immediately after the reverse stock split, the Company had 1,796,597 shares of common stock issued and outstanding. 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 ten (10) trading days immediately preceding the effective date of the Reverse Stock Split, multiplied by the fractional share.

The Revised Reverse Stock Split was approved and authorized by a majority of the Company’s stockholders on March 19, 2025. Thereafter, on that same date, the Board of Directors set the reverse stock split ratio at 1 for 10. The Reverse Stock Split was approved by the Board at a ratio of one-for-ten (1:10), an amendment was filed with the Wyoming Secretary of State on April 1, 2025, and became market effective on April 7, 2025.

Shelf Filing

On November 7, 2025, the Company filed a registration statement on Form S-3 with the U.S. Securities and Exchange Commission (“SEC”) to register up to $100 million of securities that may be offered from time to time. The Company concurrently entered into an Equity Distribution Agreement (the “Agreement”) with Maxim Group LLC (the “Agent”), pursuant to which the Company may offer and sell, from time to time, shares of its common stock, no par value (the “Common Stock”), having an aggregate offering price of up to $20,000,000 through the Agent, acting as the Company’s exclusive sales agent (the “ATM Program”).

Sales, if any, will be made in transactions deemed to be “at-the-market” offerings as defined in Rule 415 under the Securities Act of 1933, as amended, which may be made directly on The Nasdaq Capital Market or otherwise at prevailing market prices, at prices related to prevailing market prices, or at negotiated prices, as permitted by the Agreement. The Company is not obligated to sell any shares under the ATM Program, and the Agent is not required to purchase any shares. The Form S-3 became effective on November 27, 2025, and 53,478 shares have been sold for proceeds of $267,311 as of the date of filing of this Form 10-Q.

Additional Share Issuances

In November 2025, the Company issued 175,000 shares of common stock to ARC Group International Ltd. (“ARC”) as consideration for ARC’s commitment under the purchase agreement to purchase, from time to time at the Company’s discretion, up to $500,000,000 of the Company’s common stock, no par value per share, over a 36-month period.

In November 2025, the Company issued 392,329 shares of common stock to Fidelion Diagnostics Pte. Ltd (“Fidelion”) as consideration for the Company’s subscription of Fidelion shares. This issuance was a result of the Share Subscription and Shareholders’ Agreement with Fidelion and Tongshu Biotechnology (Hong Kong) Co., Limited, among others, which closed on November 28, 2025.

NOTE 16 – SEGMENT INFORMATION

The Company determines its reportable segments based on its internal organization structure and internal management reporting used to assess and allocate resources. This information is 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 12, the Company’s revenue and principal operations are substantially confined within Malaysia.

The CODM evaluates segment performance primarily on operating income and reviews the following expense categories by segment: cost of revenue, selling and distribution, and administrative expenses. A reconciliation of total reportable segment amounts to the Company’s consolidated amounts is provided below, with corporate and unallocated items presented as reconciling adjustments.

Going forward, the Company expects the MRNA Scientific segment to benefit from the integration of Fidelion Diagnostics’ technology, expanding our testing portfolio and geographic reach. Chemrex’s industrial chemicals segment is expected to decrease in relative contribution over time as contract development and manufacturing organization operations scale. The Investment Holding segment will also encompass the Company’s Ethereum treasury activities, which management views as a distinct strategic asset intended to enhance capital efficiency and diversification.

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 periods presented.

NOTE 17 – SIGNIFICANT EVENTS

On February 11, 2025, the Company filed with the Wyoming Secretary of State Articles of Amendment to its Articles of Incorporation (“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 headquarters 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 toeffect 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 one for ten (1:10) reverse stock split was filed with the Wyoming Secretary of State, which was approved by the Company’s Board of Directors. On April 7, 2025, the Company effected a reverse stock split and the Company’s common stock began trading on a split-adjusted basis on The Nasdaq Capital Market.

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.

On November 7, 2025, the Company filed a registration statement on Form S-3 with the U.S. Securities and Exchange Commission (“SEC”) to register up to $100 million of securities that may be offered from time to time. The Company concurrently entered into an Equity Distribution Agreement (the “Agreement”) with Maxim Group LLC (the “Agent”), pursuant to which the Company may offer and sell, from time to time, shares of its common stock, no par value (the “Common Stock”), having an aggregate offering price of up to $20,000,000 through the Agent, acting as the Company’s exclusive sales agent (the “ATM Program”). Sales, if any, will be made in transactions deemed to be “at-the-market” offerings as defined in Rule 415 under the Securities Act of 1933, as amended, which may be made directly on The Nasdaq Capital Market or otherwise at prevailing market prices, at prices related to prevailing market prices, or at negotiated prices, as permitted by the Agreement. The Company is not obligated to sell any shares under the ATM Program, and the Agent is not required to purchase any shares. The Form S-3 became effective on November 27, 2025, and 53,478 shares have been sold for proceeds of $267,311 as of the date of filing of this Form 10-Q.

In July 2025, the Company, through MRNA Scientific Sdn. Bhd., entered into a nonbinding term sheet with Fidelion Diagnostics Pte. Ltd. (“Fidelion”) concerning a proposed strategic cross-equity alliance and exclusive commercialization rights for the VitaGuard™ minimal residual disease (“MRD”) platform in Southeast Asia. On November 28, 2025, the Company completed the Share Subscription and Shareholders’ Agreement with Fidelion and the other parties thereto and entered into an Intellectual Property License Agreement under which the Company obtained exclusive, perpetual commercialization rights for VitaGuard in the ASEAN region. VitaGuard is being developed for liquid-biopsy MRD monitoring. As of June 30, 2026, the platform remained in the commercialization and implementation stage in ASEAN and had not begun generating revenue for the Company.

On November 28, 2025, the Company entered into an Equity Purchase Agreement (the “Purchase Agreement”) with ARC Group International Ltd. (“ARC”), the parent of ARC Group Securities, a FINRA registered broker/dealer. Under the terms of the Purchase Agreement, ARC has committed to purchase, from time to time at the Company’s discretion, up to $500,000,000 of the Company’s common stock, no par value per share (“Common Stock”), over a 36-month period (the “Facility”).

Under the Facility, the Company, in its sole discretion and subject to the terms and conditions of the Purchase Agreement, may direct ARC to purchase registered shares of Common Stock at a purchase price equal to aspecified discount to the prevailing volume-weighted average price during an agreed pricing period, the discount being between 3.0% and 3.5%. ARC may not purchase shares under the Facility that would result in its beneficial ownership exceeding 9.99% of the Company’s then outstanding Common Stock and is prohibited from short selling or hedging transactions involving the Company’s securities.

As consideration for ARC’s commitment under the Facility, the Company issued to ARC 175,000 shares of Common Stock (the “Commitment Shares”) on November 26, 2025.

On November 20, 2025, the Company’s Board of Directors adopted the BioNexus Gene Lab Corp. 2025 Equity Incentive Plan (the “Incentive Plan”), which was approved by the Company’s shareholders at the annual meeting held on December 24, 2025. The Incentive Plan initially reserved 472,767 shares of common stock for issuance and provides for annual increases in the share reserve in accordance with its terms. The Incentive Plan reserve for 2026 is 593,632 shares.

See Note 18 for awards issued after June 30, 2026.

NOTE 18 – SUBSEQUENT EVENTS

The Company evaluated subsequent events through August 14, 2026, the date these condensed consolidated financial statements were issued.

On August 13, 2026, the Company issued an aggregate of 516,128 shares of common stock under the shareholder-approved 2025 Equity Incentive Plan as fully vested Other Stock-Based Awards under Section 5 of that plan. The awards were compensation for completed services and were issued for no cash consideration. The Board valued the awards using $1.55 per share, the Nasdaq closing price on August 12, 2026, producing an aggregate Board-approved value of $799,998.40. The awards consisted of 338,709 shares to Su-Leng Tan Lee, the Company’s Chief Executive Officer and President;96,774 shares to Set Fui Chong, the Company’s Chief Financial Officer and Principal Financial Officer;32,258 shares to Muhammad Azrul bin Abdul Hamid, an independent director;32,258 shares to Chee Keong Yap, an independent director; and 16,129 shares to Jook Yuen Low, an independent director. Following the issuances,77,504 shares remained available under the plan and the Company had 2,933,442 shares of common stock issued and outstanding. The Company relied on Regulation S under the Securities Act of 1933 for the offshore issuances. The shares are restricted securities and remain subject to applicable transfer restrictions.

Also on August 13, 2026, the Board reappointed Su-Leng Tan Lee as Chief Executive Officer and President for a fixed term commencing September 1, 2026 and ending August 31, 2029 and approved a new employment agreement effective September 1, 2026. The agreement provides for gross base salary of $35,000 per month, an annual discretionary cash-bonus review with no guaranteed minimum or target, and termination by either party on six months’ written notice, subject to its other terms.