# BioNexus Gene Lab Corp: Form 10-Q/A for the period ended Sep 30, 2023

- Company: [BioNexus Gene Lab Corp](/companies/bglc.md) (CIK 1737523)
- Form: 10-Q/A
- Filed: 2024-03-26
- Accepted by EDGAR: Mar 26, 2024, 19:59 ET
- Period: 2023-09-30
- Accession: 0001477932-24-001468
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1737523/000147793224001468/bion_10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1737523/000147793224001468/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2023-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2023-07-01 to 2023-09-30 | $2.6m | us-gaap:Revenues |
| Revenue | 9 months, 2023-01-01 to 2023-09-30 | $7.5m | us-gaap:Revenues |
| Cost of revenue | 3 months, 2023-07-01 to 2023-09-30 | $2.2m | us-gaap:CostOfRevenue |
| Cost of revenue | 9 months, 2023-01-01 to 2023-09-30 | $6.4m | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2023-07-01 to 2023-09-30 | $354.3k | us-gaap:GrossProfit |
| Gross profit | 9 months, 2023-01-01 to 2023-09-30 | $1.1m | us-gaap:GrossProfit |
| Operating income | 3 months, 2023-07-01 to 2023-09-30 | −$2.5m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2023-01-01 to 2023-09-30 | −$2.9m | us-gaap:OperatingIncomeLoss |
| Interest expense | 9 months, 2023-01-01 to 2023-09-30 | $9.7k | us-gaap:InterestExpense |
| Income tax | 3 months, 2023-07-01 to 2023-09-30 | $76.4k | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2023-01-01 to 2023-09-30 | $76.4k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2023-07-01 to 2023-09-30 | −$2.6m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2023-01-01 to 2023-09-30 | −$2.9m | us-gaap:NetIncomeLoss |
| Operating cash flow | 9 months, 2023-01-01 to 2023-09-30 | −$1.0m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2023-01-01 to 2023-09-30 | $148.5k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2023-09-30 | $4.7m | us-gaap:Cash |
| Current assets | at 2023-09-30 | $8.3m | us-gaap:AssetsCurrent |
| Total assets | at 2023-09-30 | $11.5m | us-gaap:Assets |
| Current liabilities | at 2023-09-30 | $1.6m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2023-09-30 | $1.8m | us-gaap:Liabilities |
| Shareholders' equity | at 2023-09-30 | $9.7m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 30,600 characters.

### Description of Business

As used herein, unless the context otherwise indicates, references to the “Company,” “we,” “our,” “us,” “BioNexus” refer to BioNexus Gene Lab Corp., a Wyoming company (“BGLC”), and its wholly owned subsidiaries, MRNA Scientific Sdn. Bhd. (“MRNA Scientific Malaysia”), and Chemrex Corporation Sdn. Bhd. (“Chemrex”), both are Malaysian companies.

BGLC is an emerging molecular lab focused on the application of functional genomics to enable early detection of infectious diseases and cancers. On August 23, 2017, we acquired all of the outstanding capital stock of MRNA Scientific Malaysia, which was incorporated in Malaysia on April 7, 2015. MRNA Scientific Malaysia owns algorithm software, technology, and know-how related to the detection of common diseases through blood analysis which we use in our business. Our non-invasive blood screening tests analyze changes in ribonucleic acid (or RNA) to Coronavirus, Dengue, HIV, HPV and the risk potentiality of cancers diseases. This unique blood genomic biomarker approach is based on the scientific observation that circulating blood reflects, in a detectable way, what is occurring throughout the body currently.

The corporate and principal office address of the Company and MRNA Scientific Malaysia is Unit 02, Level 10, Tower B, Avenue 3, The Vertical Business Suite II, Bangsar South, No. 8 Jalan Kerinchi, Kuala Lumpur, Malaysia., our lab is located at Lab 353, Chemical Science Centre, University Science Malaysia, George Town, Penang, Malaysia. Another lab focuses on Covid-19 and Colon cancer screening is located at 4th floor, Lifecare Diagnostic Centre, Kuala Lumpur, Malaysia. Our telephone number is (+60) 18-2218762 and our website is www.bionexusgenelab.com.

Chemrex is a wholesaler of industrial chemicals for the manufacture of industrial, medical, appliance, aero, automotive, mechanical and electronic industries in Asean region. On December 31, 2020, we acquired all of the outstanding capital stock of Chemrex, which was incorporated in Malaysia on September 29, 2004.

Chemrex’s corporate office and distribution and storage center is located at 4 Jalan CJ 1/6 Kawasan Perusahaan Cheras Jaya, Selangor, Malaysia. Its phone number is (+60) 1922-23815 and website is www.chemrex.com.my.

22

#### Table of Contents

The results of operations of our subsidiary, MRNA Scientific-Malaysia , with respect to its RNA screening process have been adversely impacted by the onset of the Covid-19 pandemic followed by a number of prominent variants, including Alpha, Beta, Delta, and Omicron. Although new variants are an expected part of the evolution of viruses, new variant is more aggressive, highly transmissible, vaccine-resistant, able to cause more severe disease in Malaysia. We believe that most people were reluctant to visit hospitals and clinics in view of the post Covid-19 Omicron and its subvariants for fear of transmission from other patients or medical staff. Since our RNA screening is administered at a diagnostic center, our business has been adversely affected as a result.

The results of operations for Chemrex were adversely impacted during fiscal year 2023 and the 1st quarter of 2023 as businesses of Chemrex customers especially the manufacturers had suffered significant impact. Many of them across the country saw their supply chains interrupted, demand for their products and services decline, shortages in supplies and inputs.

Recent Developments.

(i) Public Offering and 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”) to purchase up to an additional 187,500 shares of common stock at the public offering price of $4.00 per share. The Underwriter fully exercised the Over-Allotment Option on July 24, 2023.

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

On July 24, 2023, the Offering closed, and the Company issued and sold 1,437,500 shares of common stock, including 187,500 shares sold pursuant to the exercise of the Over-Allotment Option. The Offering was priced at $4.00 per share for total gross proceeds of $5.75 million before deducting underwriting discounts, commissions, and offering expenses. Pursuant to the Underwriting Agreement, the Underwriter received an 8% underwriting discount on the public offering price for the shares common stock. The Company 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.

On August 2023, there was an issuance of shares of 759,299 and 75,000 respectively as part of Contractual Agreements relating to the uplisting of our Common Stock onto the NASDAQ stock exchange, subsequently followed by the cancellation of 125,000 shares. Please see Note 10.

(b) 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 become one share of common stock. No fractional shares were issued in connection with the Revised Reverse Stock Split and all such fractional shares or odd lots (less than 100 shares to any record or beneficial holder) issuable in the Revised Reverse Stock Split were rounded up to 100 shares.

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

On July 19, 2023, the Financial Industry Regulatory Authority announced the Revised Reverse Stock Split.in conjunction with the aforementioned Nasdaq listing.

An total of 1,044,351 round-up shares issued after reversal of stock split exercised. Please refer Note 10.

Translation of amounts from MYR into US$1.00 has been made at the following exchange rates for the respective period and year:

|  | September 30, 2023 | December 31, 2022 |
| --- | ---: | ---: |
| Period ended September 30, 2023 /Year-ended December 31, 2022 US$1: MYR exchange rate | 4.6920 | 4.3900 |
|  | **January 1, 2023 to September 30, 2023** | **January 1, 2022 to September 30, 2022** |
| 9 months average US$1: MYR exchange rate | 4.5192 | 4.3442 |

23

#### Table of Contents

### Results of Operations

***Three Months Ended September 30, 2023 Compared with the Three Months Ended September 30, 2022.***

The following table sets forth key selected financial data for the three months ended September 30, 2023 and 2022.

### Consolidated

|  | Three months ended September 30, 2023 | 2022 |
| --- | ---: | ---: |
| REVENUE | $2,553,686 | $2,575,086 |
| COST OF REVENUE | (2,199,354) | (2,275,587) |
| GROSS PROFIT | 354,332 | 299,499 |
| OTHER INCOME | 199,284 | 54,110 |
| OPERATING EXPENSES |  |  |
| General and administrative | (3,082,128) | (418,824) |
| **LOSS FROM OPERATIONS** | **(2,528,512)** | **(65,215)** |
| FINANCE COSTS | (4,259) | (2,072) |
| **LOSS BEFORE TAX** | **(2,532,771)** | **(67,287)** |
| Tax expense | (76,418) | (10,114) |
| **NET LOSS** | **$(2,609,189)** | **$(77,401)** |
| Other comprehensive income: |  |  |
| Foreign currency loss | (18,603) | (320,592) |
| **COMPREHENSIVE LOSS** | **$(2,627,792)** | **$(397,993)** |

24

#### Table of Contents

### Segmented Information

|  | MRNA Scientific Malaysia Three months ended September 30, 2023 | Chemrex | MRNA Scientific Malaysia Three months ended September 30, 2022 | Chemrex |
| --- | ---: | ---: | ---: | ---: |
| REVENUE | $16,536 | $2,537,150 | $5,942 | $2,569,144 |
| COST OF REVENUE | (7,301) | (2,192,053) | (4,244) | (2,271,343) |
| **GROSS PROFIT** | 9,235 | 345,097 | 1,698 | 297,801 |
| OTHER INCOME | 1,757 | 197,527 | 2,332 | 51,775 |
| OPERATING EXPENSES |  |  |  |  |
| General and administrative | (71,870) | (1,322,231) | (63,005) | (288,350) |
| **(LOSS)/PROFIT FROM OPERATIONS** | (60,878) | (779,607) | (58,975) | 61,226 |
| FINANCE COSTS | (1,677) | (2,582) | (336) | (1,736) |
| **(LOSS)/PROFIT BEFORE TAX** | **(62,555)** | **(782,189)** | **(59,311)** | **59,490** |
| Tax expense | - | (76,418) | - | (10,114) |
| **NET (LOSS)/PROFIT** | **$(62,555)** | **$(858,607)** | **$(59,311)** | **$49,376** |

***Revenue.*** For the quarter ended September 30, 2023, we had total revenue of $2,553,686 as compared to total revenue of $2,575,086 for the quarter ended September 30, 2022, decreased by 0.8% from the prior quarter due to slight decrease in purchases from customers.

Chemrex contributed $2,537,150 (99.4%) of the total revenue for the current quarter ended September 30, 2023 as compared to $2,569,144 (99.8%) of the total revenue for the quarter ended September 30, 2022. Chemrex’s revenues had the decrease of 1.2% from prior quarter. The revenue decreased in third quarter of 2023 was due to decrease in purchases from customers as no new project in market

MRNA Scientific-Malaysia contributed $16,536 (0.6%) of the total revenue for the quarter ended September 30, 2023 as compared to revenue of $5,942 (0.2%) of the total revenue from the quarter ended September 30, 2022. Revenues had increased by $10,594 from prior quarter of $5,942, a 178.3% increase due to RNA test from BGLC shareholders.

***Cost of Revenue.*** For the quarter ended September 30, 2023, we incurred $2,199,354 in cost of revenues, as compared to $2,275,587 for the quarter ended September 30, 2022, a slight decrease of 3.4% was due to reason as stated above.

Chemrex had incurred $2,192,053 (99.7%) of the total cost of revenue during the current quarter period ended September 30, 2023 as compared to the quarter ended September 30, 2022 wherein Chemrex had incurred $2,271,343 (99.8%) of the total cost of revenue. The slightly decrease in Chemrex’s cost of revenues of 3.5% for the current period was due to its decreased revenues, stock price reduced and reason as stated above.

MRNA Scientific-Malaysia had incurred $7,301 (0.3%) of the total cost of revenues during the current quarter period ended September 30, 2023 as compared to $4,244 (0.2%) for the quarterly period ended September 30, 2022. Cost of revenue had increased by $3,057 from prior quarter of 72% increase was due to its increased revenues and reason as stated above.

25

#### Table of Contents

***Gross Profit.*** For the quarterly period ended September 30, 2023, we had total gross profit of $354,332 as compared to gross profit of $299,499 for the quarterly period ended September 30, 2022, an increase by approximately 18.3% from the prior period.

Chemrex contributed $345,097 (97.4%) of the total gross profit for the current quarter ended September 30, 2023 as compared to $297,801 (99.4%) of the total gross profit for the quarter ended September 30, 2022. Chemrex’s gross profit increased by $47,296 from the prior quarter, an approximately 15.9% increase. The gross profit increase for Chemrex in current quarter was due to old stock at lower prices.

MRNA Scientific-Malaysia contributed $9,235 (2.6%) of the total gross profit of $354,332 for the current quarter ended September 30, 2023 as compared to gross profit of $1,698 (0.6%) of the total gross profit from the quarter ended September 30, 2022. The increase of $7,537 by approximately 443.9% from the prior period due to its increased revenues for the same reason stated above.

***Other Income.*** For the quarterly period ended September 30, 2023, we had of $199,284, as compared to of $54,110 for the quarterly period ended September 30, 2022, an increase of approximately 268.3%.

Chemrex contributed $197,527 (99.1%) of other income for the current quarter ended September 30, 2023 as compared to $51,775 (95.7%) of the other income for the quarter ended September 30, 2022. Chemrex’s other income increased by 281.5% due to dividend received, gain on fair value of investment, bank interest earning and unrealized equity investment gain.

MRNA Scientific-Malaysia contributed $1,757 (0.9%) of other income for the current quarter ended September 30, 2023 as compared to $2,332 (4.3%) of the other income for the quarter ended September 30, 2022. The decrease of 24.7% due to lesser fund in the fixed deposit resulted from a reduction in bank interest earning.

***Operating Expenses.*** For the quarter ended September 30, 2023, we had total operating expense of $3,082,128 as compared to total operating expenses of $418,824 for the quarter ended September 30, 2022, an increase by approximately 635.9%. It was due to general and administrative expenses which includes depreciation of fixed assets, employee compensation, professional fees for the Nasdaq uplisting and provision for losses on accounts receivable

Chemrex had incurred $1,322,231 (42.9%) of the total operating expenses for the current quarter ended September 30, 2023 as compared to $288,350 (68.8%) of the total operating expenses for the quarter ended September 30, 2022, an increase by 358.6.%. The major increase in operating expenses was due to provision for losses on accounts receivable of $1,067,413

MRNA Scientific-Malaysia had incurred $71,870 (2.3%) of the total operating expenses for the current quarter ended September 30, 2023 as compared to $63,005 (15%) of the total operating expenses for the quarter ended September 30, 2022, an increase by 14.1%. The increase in operating costs of the current quarter was due to hire new staff, increment of staff remuneration, increase of depreciation of fixed assets for new lab equipment and motor vehicle and additional cost for motor vehicle running expenses and travelling expenses.

BGLC, the holding company had incurred $1,688,027 (54.8%) of total operating expenses for the current quarter ended September 30, 2023 as compared to $67,469 (16.1%) of the total operating expenses for the quarter ended September 30, 2022. The increase of $1,620,558 by approximately 2401.9% in operating costs for the quarter ended September 30, 2023 was due to increment of directors ’ fees, hired a medical adviser, appointed an investor relations service, additional professional expenses for successful listed in Nasdaq from Advisor, Attorney, underwriting cost expenses, share-based compensation, broker fee, NOBO conduit fee, listing expenses and Nasdaq annual fee.

***Loss from Operations.*** We had a loss from operations of $2,528,512 for the quarter ended September 30, 2023 as compared to a loss of $65,215 for the quarter ended September 30, 2022, an increase by approximately 3777.2% from the prior period, for the reasons was due to increment of directors ’ fees, hired a medical adviser, appointed an investor relations service, additional professional expenses for successful listed in Nasdaq from Advisor, Attorney, underwriting cost expenses, share-based compensation, broker fee, conduit fee, listing expenses and Nasdaq annual fee.

***Income tax expense.*** For the quarter ended September 30, 2023, we had a tax expense of $76,418 as compared to tax expenses of $10,114 for the quarter ended September 30, 2022 for Chemrex. There was no tax provision for MRNA Scientific-Malaysia for the quarters ended September 30, 2023 and 2022.

***Foreign currency exchange loss.*** We are exposed to fluctuations in foreign exchange rates on the revaluation of monetary assets and liabilities denominated in currencies other than the US Dollar. Therefore, any change in the relevant exchange rate would require us to recognize a transaction gain or loss on revaluation. For the three-month period ended September 30, 2023, we experienced a foreign currency loss of $18,603 as compared with a foreign currency loss of $320,592 for the three-month period ended September 30, 2022.

26

#### Table of Contents

***Nine Months Ended September 30, 2023 Compared with the Nine Months Ended September 30, 2022.***

The following table sets forth key selected financial data for the nine months ended September 30, 2023 and 2022.

### Consolidated

|  | Nine months ended September 30, 2023 | 2022 |
| --- | ---: | ---: |
| REVENUE | $7,497,739 | $8,089,132 |
| COST OF REVENUE | (6,434,796) | (7,169,329) |
| GROSS PROFIT | 1,062,943 | 919,803 |
| OTHER INCOME | 511,792 | 153,340 |
| OPERATING EXPENSES |  |  |
| General and administrative | (4,426,077) | (1,241,631) |
| **LOSS FROM OPERATIONS** | **(2,851,342)** | **(168,488)** |
| FINANCE COSTS | (9,746) | (7,717) |
| **LOSS BEFORE TAX** | **(2,861,088)** | **(176,205)** |
| Tax expense | (76,418) | (22,792) |
| **NET LOSS** | **$(2,937,506)** | **$(198,997)** |
| Other comprehensive income: |  |  |
| Foreign currency translation loss | (391,533) | (707,128) |
| **COMPREHENSIVE LOSS** | **$(3,329,039)** | **$(906,125)** |

27

#### Table of Contents

### Segmented Information

| segmental reporting for BGLC | MRNA Scientific Malaysia Nine months ended September 30, 2023 | Chemrex | MRNA Scientific Malaysia Nine months ended September 30, 2022 | Chemrex |
| --- | ---: | ---: | ---: | ---: |
| REVENUE | $28,468 | $7,469,271 | $39,409 | $8,049,723 |
| COST OF REVENUE | (14,849) | (6,419,947) | (19,173) | (7,150,156) |
| GROSS PROFIT | 13,619 | 1,049,324 | 20,236 | 899,567 |
| OTHER INCOME | 3,922 | 507,870 | 6,617 | 146,720 |
| OPERATING EXPENSES |  |  |  |  |
| General and administrative | (170,590) | (2,348,127) | (157,686) | (906,698) |
| **(LOSS)/PROFIT FROM OPERATIONS** | **(153,049)** | **(790,933)** | **(130,833)** | **139,589** |
| FINANCE COSTS | (2,952) | (6,794) | (2,196) | (5,521) |
| **(LOSS)/PROFIT BEFORE TAX** | (156,001) | (797,727) | (133,029) | 134,068 |
| Tax expense | - | (76,418) | - | (22,792) |
| **NET (LOSS)/PROFIT** | $(156,001) | $(874,145) | $(133,029) | $111,276 |

*Revenue.* For the nine months period ended September 30, 2023, we had total revenue of $7,497,739 as compared to total revenue of $8,089,132 for the same period in 2022, which had decreased by $591,393 from the prior period, approximately 7.3% decrease.

Chemrex contributed $7,469,271 (99.6%) of the total revenue for the current nine months period as compared to $8,049,723 (99.5%) of the total revenue for the same period last year. Chemrex’s revenues had decreased by $580,4528 from prior period, approximately 7.21% decrease. The revenue decreased in 2023 was due to competition with reduced selling price for Resin & Fiberglass mat in Malaysia since January 2023 and there was no new project in the market resulted less order from customer.

MRNA Scientific-Malaysia contributed $28,468 (0.4%) of the total revenue for the current nine months in 2023 as compared to revenue of $39,409 (0.5%) of the total revenue from the same period last year. MRNA Scientific-Malaysia’s revenue had decreased by $10,941 from nine months in 2022, an approximately 27.8% decrease. The revenue decreased in 2023 was due to RNA screening process having been adversely impacted by the onset of the Covid-19 pandemic followed by a number of prominent variants, including Alpha, Beta, Delta, and Omicron. Although new variants are an expected part of the evolution of viruses, new variant is more aggressive, highly transmissible, vaccine-resistant, able to cause more severe disease in Malaysia. We believe that most people were reluctant to visit hospitals and clinics in view of the post Covid-19 Omicron and its subvariants for fear of transmission from other patients or medical staff. Since our RNA screening is administered at diagnostic center, our business had been adversely affected as a result.

*Cost of Revenue*. For the nine months period ended September 30, 2023, we incurred $6,434,796 in cost of revenues, as compared to $7,169,329 for the same period in 2022, decreased by $734,533 approximately 10.2% decrease was due to the same reason stated above.

Chemrex had incurred $6,419,947 (99.8%) of the total cost of revenue during the current period in 2023 as compared to the same period in 2022 last year wherein Chemrex had incurred $7,150,156 (99.7%) of the total in cost of revenue, cost of revenue decreased by $730,209 approximately 10.21% was due to no new project and competition as stated above.

MRNA Scientific-Malaysia had incurred $14,849 (0.2%) of the total cost of revenues during the current period in 2023 as compared to $19,173 (0.3%) for the same period in 2022, cost of revenue decreased by $4,324, approximately 22.6% in cost of revenues for the current period was due to post Covid-19 pandemic as stated above.

*Gross Profit.* For the nine months period ended September 30, 2023, we had total gross profit of $1,062,943 as compared to gross profit of $919,803 for the same period in 2023, increased by approximately 15.6% from the prior period.

Chemrex contributed $1,049,324 (98.7%) of the total gross profit for the current nine months period as compared to $899,567 (97.8%) of the total gross profit for the same period last year. The gross profit increased by $149,757 approximately 16.65% for current period in 2023 was due to higher gross margin from the old stock that bought at lower prices

28

#### Table of Contents

MRNA Scientific-Malaysia had a gross profit of $13,619 (1.3%) of the total gross profit of $1,062,943 for the current nine months period 2023 as compared to $20,236 (2.2%) of the total gross profit of $919,803 from the same period last year 2022. The gross profit decreased by 32.7% was due to its decreased revenues for the current period as according to reason stated above.

*Other Income*. For the nine months period ended September 30, 2023, we had $511,792 as compared to $153,340 for the same period in 2022, increased by $358,452 approximately 233.8%.

Chemrex contributed $507,870 (99.2%) of other income for the current nine months period as compared to $146,720 (95.7%) of the other income for the same period last year. Chemrex’s other income increased by $361,150 approximately 246.15% was generated from dividend received, bank interest and gain from fair value on investment.

MRNA Scientific-Malaysia had $3,922 (0.8%) for nine months period ended September 30, 2023 as compared to $6,617 (4.3%) for the same period in 2022, decreased by approximately 40.7% was due to lower bank interest earning from lower fund deposited.

*Operating Expenses*. For the nine months period ended September 30, 2023, we had a total operating expense of $4,426,077 as compared to total operating expenses of $1,241,631 for the same period in 2022. The increase of $3,184,446, approximately 256.5% was due to general and administrative expenses which includes depreciation of fixed assets, employee compensation and benefits, marketing/travel expenses, professional expenses and charges from Advisor, Attorney, STC (Transfer Agent), Finra, Nasdaq and SEC on the Company’s uplisting to Nasdaq, an additional cost for underwriting cost expenses and share-based compensation and provision for losses on account receivables.

Chemrex had incurred $2,348,127(53.1%) of the total operating expenses for the current nine months period in 2023 as compared to $906,698 (73%) of the total operating expenses for the same period 2022 last year, increased by $1,441,429 approximately 158.98% due to the increased commission, directors’ remuneration, medical expenses, loss on unrealized/realized currency exchange, withholding taxes and provision for losses on account receivables of $1,372,573.

MRNA Scientific-Malaysia had incurred $170,590 (3.9%) of the total operating expenses for the current nine months period as compared to $157,686 (12.7%) of the total operating expenses for the same period last year. The increase of $12,904 by approximately 8.2% in operating costs for the nine months period was due to an increase of traveling expenses for marketing, increment of staff remuneration, increase of depreciation of fixed assets for new lab equipment and motor vehicle and additional cost for motor vehicle running expenses.

BGLC, the holding company had incurred $1,907,360 (43.1%) of total operating expenses for the current nine months period as compared to $177,247 (14.3%) of the total operating expenses for the same period last year. The increase of $1,730,113 approximately 976.1% in operating costs of the current period was due to the expenses on filing fees for form S-1, consultant fees for capital & corporation advisory services, fees for three independent board members and audit committee, SEC compliance services, SEC registration fee, shareholders’ notice printing and mailing expenses regarding stock reverse split by Securities Transfer Corporation, an additional review fees for S-1, listing expenses of $205,224 for Nasdaq uplist, the underwriting cost of $660,000 and share-based compensation of $601,740

*Loss from Operations*. We had a loss from operations of $2,851,342 for nine months period ended September 30, 2023 as compared to loss of $168,488 for the same period in 2022. The increase of $2,682,854, approximately 1592.3% was due to the reasons discussed above.

*Income tax expense*. For the nine-months period ended September 30, 2023, we had income tax provided by Chemrex $76,418 and MRNA Scientific-Malaysia had no tax provision as compared to the same period 2022 which had a tax estimated $22,792 from Chemrex and no tax provided from MRNA Scientific-Malaysia.

*Foreign currency exchange loss*. We are exposed to fluctuations in foreign exchange rates on the revaluation of monetary assets and liabilities denominated in currencies other than the US Dollar. Therefore, any change in the relevant exchange rate would require us to recognize a transaction gain or loss on revaluation. For the nine-months period ended September 30, 2023, we experienced a foreign currency loss of $391,533 as compared with a foreign currency loss of $707,128 for the same period in 2022.

29

#### Table of Contents

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2023, we had working capital of $6,625,767 compared with working capital of $4,017,749 as of December 31, 2022. The increase in working capital as of September 30, 2023 from December 31, 2022 was due principally to the increase in cash generated from our operations.

Our primary uses of cash had been for operations. The main sources of cash was generated from operational revenues and the private placement of our common stock. The following trends could result in a material decrease in our liquidity over the near to long term:

- Addition of administrative and marketing personnel as the business grows,
- Development of a Company website,
- Increases in advertising and marketing in order to attempt to generate more revenues, and
- The cost of being a public company.

The Company believes that cash flow from operations together will be sufficient to sustain its current level of operations for at least the next 12 months of operations.

The following is a summary of the Company’s cash flows (used in) / generated from operating, investing, and financing activities for the three months ended September 30, 2023 and 2022:

|  | Nine months ended September 30, 2023 | 2022 |
| --- | ---: | ---: |
| Net cash (used in)/ generated from Operating Activities | $(1,039,686) | $75,083 |
| Net cash used in investing activities | (368,824) | (400,595) |
| Net cash generated from financing activities | 5,743,206 | 110,441 |
| Foreign currency translation adjustment | (306,677) | (446,579) |
| **Net Change in Cash and Cash Equivalents** | **$4,028,019** | **$(661,650)** |

#### Operating Activities

During the nine months ended September 30, 2023, the Company incurred a net loss of $2,937,506 which, after adjusting for amortization, depreciation, dividend income, fair value gain on share investment, allowances for expected credit losses, share-base compensation, an increase in inventories, a decrease in trade receivables and a substantial reduction in trade payables, operating lease liabilities, advance payment from customer, resulted in net cash of $1,039,686 being used in operating activities during the nine months ended September 30, 2023. By comparison, during the nine months ended September 30, 2022, the Company had a net loss of $198,997 after adjusting for amortization, depreciation, dividend income, fair value loss on share investments and a decrease in inventories, trade receivables, deferred cost of revenue, a substantial reduction in trade payables, operating lease liabilities, advance payment from customer, deferred revenue, resulted in net cash of $75,083 being cash generated from operating activities during the period.

#### Investing Activities

During the nine months ended September 30, 2023, the Company had net cash of $368,824 used in investment activities from acquisition of share investment of $296,109 and purchase of plant & equipment of $148,461. By comparison during the nine months ended September 30, 2022, the Company had net cash from acquisition of share investment of $397,974 and purchase of plant and equipment of $37,144, resulting in net cash used in investing activities of $400,595.

#### Financing Activities

During the nine-month ended September 30, 2023, the Company had net cash of $5,743,206 generated from financing activities for shares subscriptions of initial public offering (IPO) of 1,473,500 shares at a price to the public of $4.00 per share for total proceeds of $5,750,000. By comparison during the nine months ended September 30, 2022, we had net cash of $110,441 generated from financing activities for continued the repayment of a finance lease of $34,038 and shares subscriptions of $150,000.

## Market risk

As filed, 173 characters.

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this item.

30

#### Table of Contents

## Controls and procedures

As filed, 5,756 characters.

#### Evaluation of Disclosure Controls and Procedures

In connection with the preparation of this quarterly report, an evaluation was carried out by the Company’s management, with the participation of the principal executive officer and the principal financial officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(c) and 15d-15(e) under the Exchange Act (“Exchange Act”) as of September 30, 2023. Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Commission’s rules and forms, and that such information is accumulated and communicated to management, including the principal executive officer and the principal financial officer, to allow timely decisions regarding required disclosures.

Based on that evaluation, the Company’s management concluded, as of the end of the period covered by this report, that the Company’s disclosure controls and procedures were capable in recording, processing, summarizing, and reporting information required to be disclosed, within the time periods specified in the Commission’s rules and forms, and that such information was accumulated and communicated to management, including the principal executive officer and the principal financial officer, to allow timely decisions regarding required disclosures.

#### Management’s Report on Internal Control over Financial Reporting

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process, under the supervision of the principal executive officer and the principal financial officer, designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with United States generally accepted accounting principles (GAAP). Internal control over financial reporting includes those policies and procedures that:

i) Pertain to the maintenance of records that is in reasonable detail accurately and fairly reflect the transactions and dispositions of the Company’s assets;

ii) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with the authorizations of management and the board of directors; and

iii) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

The Company’s management had assessed the effectiveness of our internal control over financial reporting as of September 30, 2023, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, which assessment identified material weaknesses in internal control over financial reporting had improved. A material weakness could create reasonable possibility that a material misstatement in annual or interim financial statements. The management considers its internal control over financial reporting required further improvement.

Management had concluded an internal control over financial reporting and glad to note that a majority of our Board of Directors was made up of independent directors and the Audit Committee comprised of all independent directors since 2023, the adequacy in the monitoring of required internal controls and procedures were improving.

While these control deficiencies did not result in any audit adjustments to our 2023 or 2022 interim or annual financial statements, it could have resulted in a material misstatement that might have been prevented or detected by a segregation of duties.

To the extent reasonably possible, given our limited resources, upon consummation of a merger with a private operating company, the Company had been relying on three or more individuals. We were expanding our current board of directors to include additional independents willing to perform directorial functions. Since the recited remedial actions and we would hire or engage additional personnel, this material weakness would be overcome in the near term. Until such remedial actions could be realized, we would continue to rely on the advice of outside professionals and consultants.

This quarterly report does not include an attestation report of our registered public accounting firm regarding our internal controls over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to Section 404(c) of the Sarbanes-Oxley Act that permit us to provide only management’s report in this annual report.

### Changes in Internal Controls over Financial Reporting

During the period ended September 30, 2023, there had been no change in internal control over financial reporting that had materially affected or was reasonably likely to materially affect our internal control over financial reporting.

31

#### Table of Contents

Filed Mar 26, 2024.
Source: SEC EDGAR, the filing index for accession 0001477932-24-001468. Last ingested by Listed: Oct 24, 2026, 15:07 ET. No prices; not investment advice.