BioNexus Gene Lab Corp: Form 10-Q for the period ended Jun 30, 2025

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 technology company 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 A-28-7, Level 28, Tower A, Menara UOA Bangsar, No.5 Jln Bangsar Utama 1 , 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 (http://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 (http://www.chemrex.com.my).

General

We were incorporated in the State of Wyoming on May 12, 2017 and operations of our Malaysian company began operations in July 2017. Consequently, the following discussion and analysis of the results of operations and financial condition of the Company is for fiscal periods ended June 30, 2025 and June 30, 2024, respectively. This information should be read in conjunction with the consolidated financial statements and notes to the financial statements that are included elsewhere herein. The consolidated financial statements presented herein (and to which this discussion relates) reflect the results of operations of the Company and its Malaysian subsidiaries. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements. We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this report, except as required by law. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this quarterly report, which are designed to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.

Overview

During the fiscal period ended June 30, 2025, BioNexus Gene Lab Corp. ("BGLC", the “Company”, “we”, “us” or “our”) continued to develop and refine its strategic focus across its three operational segments: healthcare diagnostics (MRNA Scientific Sdn. Bhd.), specialty chemicals (Chemrex Corporation Sdn. Bhd.), and innovation-focused ventures (including digital health and blockchain-linked financial strategies).

We successfully completed the integration of Nasdaq-listed operations following our 2023 uplisting, while maintaining a stable liquidity position and initiating expansion into the digital healthcare and decentralized asset infrastructure sectors.

Results of Operations

Our Q2 2025 gross margin increased 170 bps YoY to 16.3% on improved mix and pricing. Operating expenses increased primarily due to sales & marketing investments ($608k vs $136k in Q2’24), reflecting channel development and pre‑commercialization activities. Other income was lower YoY chiefly because the reversal of expected credit losses normalized ($69.8k in Q2’25 vs $552.7k in Q2’24). These factors drove a swing from $259k operating profit in Q2’24 to $(611)k in Q2’25.

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Strong Liquidity Position and Clean Capital Structure

As of June 30, 2025, the Company had cash and cash equivalents of $1.54 million and total liquidity exceeding $6 million. “Total liquidity” is a management liquidity metric comprised of cash and cash equivalents, fixed deposits with original maturities greater than three months, investments in equity securities, and trade receivables, net. See the Condensed Consolidated Balance Sheets and Note 2 (Summary of Significant Accounting Policies) for definitions of cash equivalents and fixed deposits. See also Note 15 for subsequent‑events updates (Fidelion term sheet; Chemrex CDMO authorization) that may affect capital allocation and future liquidity planning. This liquidity position, combined with minimal outstanding debt and a simplified capital structure, provides a solid foundation for operational continuity, strategic investments, and potential M&A activities. We believe our capital structure - free of preferred stock, convertible debt, or high-yield instruments - positions us favorably to pursue growth initiatives on shareholder-friendly terms.

In light of the recent governance enhancements and upcoming growth initiatives, including expansion into digital health and decentralized financial infrastructure, the Company is actively exploring additional capital-raising mechanisms. These may include at-the-market offerings, private placements, or strategic financing arrangements subject to Nasdaq and SEC compliance.

Development and Focus of Core Biotech Business

In July 2025, subsequent to the period covered by this report, the Company, through MRNA Scientific Sdn. Bhd., entered into a non‑binding term sheet with Fidelion Diagnostics Pte Ltd (“Fidelion”), a Singapore-based precision diagnostics company specializing in tumor-agnostic, minimal residual disease (MRD) detection. The non-binding term sheet is for a contemplated strategic, cross‑equity alliance and exclusive commercialization rights for the VitaGuard™ MRD platform in Southeast Asia. The transaction remains subject to execution of definitive agreements.

Chemrex Corporation Sdn. Bhd., while currently deriving substantially all revenues from industrial chemical trading, has commenced a planned transition into a contract development and manufacturing organization (“CDMO”) model focused on biotechnology and high-technology manufacturing. The CDMO transition is being implemented in phases, beginning with facility upgrades, equipment procurement, and quality management system enhancements aimed at achieving Good Manufacturing Practice (GMP) certification. This shift is expected to result in a gradual reallocation of Chemrex’s revenue mix toward higher-margin biotech manufacturing contracts by 2026.

Digital Assets and Treasury Management

The Company’s Ethereum-focused treasury strategy, approved by the Board in March 2025, remains a key element of our capital management approach. Ethereum holdings are intended as a long-term strategic asset and may be deployed, staked, or otherwise utilized to enhance liquidity, diversify reserves, and support capital market transactions. Management is actively monitoring regulatory developments in relevant jurisdictions, including Wyoming and Malaysia, to ensure compliance and optimize the strategy. We did not hold digital assets as of June 30, 2025 as the Management is still reviewing multiple proposals and cash allocation strategies.

Strategic Positioning for Growth and Innovation

Looking ahead, the Company intends to capitalize on its clean balance sheet and low compliance cost profile to pursue selective mergers, acquisitions, and joint ventures that align with our long-term strategy. Our investments in digital healthcare, sustainable materials, and blockchain-based treasury solutions provide a forward-leaning platform for innovation. In particular, the Company’s recently adopted Ethereum-focused treasury strategy, approved by the Board in March 2025, aligns BGLC with a transformational global financial infrastructure. This strategy not only enhances capital efficiency through potential staking yield but also signals the Company’s commitment to institutional-grade innovation and regulatory alignment, especially given our Wyoming incorporation, which provides a favorable blockchain legal environment.

We believe this multi-pronged approach, centered on financial resilience, operational efficiency, and innovation, will allow the Company to deliver long-term shareholder value and act swiftly in a rapidly evolving global market.

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Nasdaq Compliance Timeline & Milestones

• November 2023: Received initial Nasdaq compliance notice; promptly initiated proactive engagement and compliance measures.
• May 2024: Successfully secured initial 180-day compliance extension, reflecting constructive Nasdaq dialogue.
• November 2024: Requested Nasdaq hearing, leading to constructive panel engagement and temporary compliance extension approval.
• April 2025: Implemented strategic 1-for-10 reverse stock split, proactively ensuring continued compliance and strengthening market position.
• April 2025: Full Nasdaq compliance achieved, reinforcing market stability and investor confidence.

Our leadership team remains fully committed and confident in maintaining robust compliance with Nasdaq listing standards. We view compliance as fundamental to our growth strategy and market credibility. Our proactive compliance approach, prudent capital market strategies, and transparent shareholder communication reflect management's dedication to safeguarding shareholder value and company reputation.

Recent Developments.

(a) Advisory Agreement

On July 1, 2024, the Company entered into an advisory service agreement with Maxim Group LLC (“Maxim”) to provide merger and acquisition (M&A) services, general financial advisory services, and investment banking services to the Company. The Company issued 300,000 shares of our common stock to Maxim for such service. If at any time during the term of the agreement or within twelve months from the effective date of the termination of the agreement, the Company proposes to effect a public offering of its securities on a US exchange, private placement of securities or other financing, the Company shall offer to retain Maxim as sole book running manager of such offering, or as its exclusive placement or sales agent in connection with such financing or other matter, upon such terms as the parties may mutually agree.

(b) Strategic Investment into Ascension Innovation Sdn Bhd. by our subsidiary, MRNA Scientific Sdn. Bhd.

Pursuant to a Form 8-K filed on April 18, 2024, the Company announced a strategic investment in Ascension Innovation Sdn Bhd (AISB), a privately held Malaysian company.

(c) Notification of Delisting, Stay of Suspension and Re-Compliance.

On November 6, 2023, the Company reported that it received a letter from the Listing Qualifications Department of the Nasdaq Stock Market (“Nasdaq”) regarding the Company’s failure to comply with Nasdaq Continued Listing Rule (“Rule”) 5550(a)(2), which requires listed securities to maintain a minimum bid price of $1.00 per share. A failure to comply with Rule 5550(a)(2) exists when listed securities fail to maintain a closing bid price of at least $1.00 per share for 30 consecutive business days.

Under Rule 5810(c)(3)(A), the Company automatically was provided with a period of 180 calendar days, until May 6, 2024, to regain compliance.

The Company then applied to Nasdaq to receive an additional 180 calendar days to regain compliance. On August 8, 2024, the Company received notification from Nasdaq that the compliance period has been extended to November 4, 2024. If at any time during this 180-day period the closing bid price of the Company’s securities is at least $1.00 for a minimum of ten consecutive business days, the Company’s compliance will be regained.

On November 5, 2024, the Company received a notification from the Nasdaq Stock Market LLC ("Nasdaq") indicating that the Company’s common stock will be delisted from the Nasdaq Capital Market due to its failure to comply with Nasdaq Listing Rule 5550(a)(2), which requires listed securities to maintain a minimum bid price of $1 per share. The Company had been provided two consecutive 180-day grace periods, ending on November 4, 2024, to regain compliance but was unable to meet the requirement within the designated period.

In response, on November 8, 2024, the Company submitted a formal request for a hearing before a Nasdaq Hearings Panel to appeal the delisting determination. The Nasdaq Hearings Department has acknowledged receipt of the Company’s hearing request, which stays the suspension of trading of the Company’s common stock pending a decision by the Panel. The Company intends to present a compliance plan at the hearing, including potential corrective actions such as a reverse stock split, among other strategic initiatives, to regain compliance with Nasdaq’s listing standards.

On December 27, 2024, the Company received a written notice from the Nasdaq Hearings Panel (the “Panel”) indicating that the Company has been granted a temporary exception to regain compliance with Nasdaq Listing Rule 5550(a)(2), which requires a minimum bid price of $1.00 per share (the “Bid Price Rule”). The Company has until May 1, 2025, to regain compliance. As part of this compliance plan, the Company effected a reverse stock split, which became market effective on April 7, 2025, which resulted in every ten (10) shares immediately prior to the market effectiveness being consolidated into one (1) share on the market effective date. The company will have to close above the minimum bid price of $1 for a total of 10 trading days from the market effective date to regain compliance. Failure to regain compliance by May 1, 2025, will result in the delisting of the Company’s common stock from The Nasdaq Capital Market.

On April 30, 2025, the Company received a formal notice from the Nasdaq Hearings Panel (the “Panel”) confirming that the Company has regained compliance with Nasdaq Listing Rule 5550(a)(2), which requires listed securities to maintain a minimum bid price of $1.00 per share.

(d) Strategic Alliance with Tongshu Gene and Fidelion Diagnostics Pte Ltd

On July 30, 2025, the Company entered into a non-binding term sheet with Fidelion Diagnostics Pte Ltd (“Fidelion”) for a contemplated strategic cross-equity alliance and exclusive commercialization rights for Fidelion’s VitaGuard™ minimal residual disease (MRD) platform in Southeast Asia. Under the term sheet, the Company will acquire a strategic equity stake in Fidelion and Fidelion will receive an equity investment and license fee from the Company. The transaction is subject to execution of definitive agreements. VitaGuard™ is a tumor-naïve, liquid biopsy MRD platform capable of detecting cancer recurrence at variant allele frequencies as low as 0.02%, with cost per test expected to be under USD $300. The Company intends to lead regulatory submissions and a phased roll-out in Singapore and Malaysia, followed by expansion through ASEAN markets. For additional details, refer to the Company’s Current Report on Form 8-K filed July 30, 2025.

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(e) Appointment of officers, directors, committee appointments, and appointment of officers

On November 5, 2024, the Board of Directors of the Company appointed Ms. Jook Yuen Low as an independent director to the Board, effective immediately. Ms. Low has also been assigned to serve as a member of the Audit Committee and the Nomination & Corporate Governance Committee, bringing her expertise in corporate governance, legal compliance, and audit oversight. Ms. Low will serve in her capacity until the next annual meeting of shareholders.

Ms. Low, age 46 holds a Bachelor of Laws (LL.B) and a Master of Business in Public Relations from the Queensland University of Technology, Australia. She was called to the Bar as an Advocate & Solicitor of the High Court of Malaya in 2004. Currently, Ms. Low is a partner at the law firm Azura Mokhtar & Low. Her legal career spans over 20 years, during which she has gained substantial experience in conveyancing, corporate law, and wealth management consulting. Her expertise includes advising on property, real estate, banking transactions, and corporate agreements such as shareholders’ agreements, joint ventures, and power of attorney.

There is no arrangement or understanding between the new director and any other person pursuant to which the new director was selected to be a director of the Company.

Ms. Low will receive the standard independent director compensation set by the Compensation Committee of the Company, which is $1,000 USD per month.

Except as stated above, there is no material plan, contract or arrangement (whether or not written) to which the new director is a party or in which each party participates that is entered into or a material amendment in connection with the triggering event or any grant or award to any such covered person or modification thereto, under any such plan, contract or arrangement in connection with any such event.

Additionally, the Board has re-appointed Mr. Su-Leng Tan Lee as Secretary of the Company and has appointed him as President, effective immediately. No change has been made to his compensation package as a result of his appointments.

On June 17, 2025, the Board of Directors of BioNexus Gene Lab Corp. (the “Company”) appointed Ms. Chong Set Fui (Angeline) as the Company’s Chief Financial Officer and Principal Financial Officer, effective immediately.

Ms. Chong, age 62, has over 25 years of senior financial leadership experience, including serving as the Chief Financial Officer of Avillion Berhad from 2013 until November 2024. She is a member of the Association of Chartered Certified Accountants (ACCA) and the Malaysian Institute of Accountants (MIA), and brings deep expertise in corporate financial reporting, internal controls, and regional operations oversight.

Ms. Chong will concurrently serve as Chief Financial Officer of the Company’s wholly-owned subsidiary, MRNA Scientific Sdn. Bhd., and will perform the responsibilities of the Principal Financial Officer of BioNexus Gene Lab Corp. in accordance with U.S. federal securities laws and Nasdaq rules. For additional details, refer to the Company’s Current Report on Form 8-K filed June 17, 2025.

Concurrent with the new appointment, Mr. Su-Leng Tan Lee ceased his role as acting Chief Financial Officer and Principal Financial Officer of the Company.

(f) Internal Controls Enhancement

During and subsequent to the reporting period ending June 30, 2025, as a result of recent transactions occurring at its Chemrex subsidiary, the Company focused on enhancing its internal control environment and improving governance procedures within its Chemrex subsidiary. Following the internal review of these recent transactions, management has implemented additional protocols to strengthen compliance with corporate policies and regulatory requirements, particularly concerning related-party transactions and transaction authorization at the subsidiary level.

The Company also acknowledges a recent communication from our independent auditors JP Centurion & Partners, in which the audit firm expressed concerns regarding certain aspects of Chemrex’s financial reporting and internal control structure. The Company is addressing these matters through comprehensive oversight, led by the audit committee, to ensure transparency, accuracy, and compliance in all reported information. These efforts aim to reinforce the integrity of our financial reporting and provide shareholders with reliable information on the Company’s operational and financial performance.

(g) Reverse Stock Split

On March 19, 2025, the "Company held a Special Meeting of Shareholders (the "Meeting") to approve a reverse stock split of the Company’s outstanding shares of common stock, with a ratio ranging from one-for-five (1:5) to one-for-ten (1:10), with the exact ratio to be set at the discretion of the Board of Directors. After a quorum was established, the shareholders approved the Reverse Stock Split. Thereafter, on that same date, the Board of Directors set the reverse stock split ratio at 1 for 10. The Reverse Stock Split became effective on April 7, 2025.

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Results of Operations

Exchange Rates

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

Results of Operations for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024 (unaudited).

The following table sets forth key selected financial data for the three months and six months ended June 30, 2025 and 2024.

Consolidated

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Segmented Information

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Revenue. For the current quarter ended June 30, 2025, we had total revenue of $2,260,253, an increase of 14.5% as compared to total revenue of $1,974,564 for the same quarter in the previous year.

MRNA Scientific contributed $3,466 (0.2%) of the total revenue for the current quarter ended June 30, 2025, as compared to revenue of $5,496 (0.3%) of the total revenue from the same quarter in the previous year. The decrease in revenue of 36.9% was primarily due to fewer client referrals from diagnostic centers and the continued unavailability of a key RNA machine, which has been under repair since last year.

Chemrex contributed $2,256,787 (99.8%) of the total revenue for the current quarter ended June 30, 2025 as compared to revenue of $1,969,068 (99.7%) of the total revenue for the same quarter in the previous year The increase in revenue of 14.6% was mainly due to higher sales volume, supported by continued demand from existing customers.

Cost of Revenue. For the current quarter ended June 30, 2025, we incurred $1,892,231 in cost of revenues, as compared to $1,685,844 for the same quarter in the previous year. The increase of 12.2% was due to reason as stated below.

MRNA Scientific had incurred $2,725 (0.1%) of the total cost of revenues during the current quarter ended June 30, 2025. This represents an increase of 15.8% as compared to $2,353 (0.1%) for the same quarter in the previous year. The slight increase in cost of revenue for the current quarter ended June 30, 2025 despite lower revenue was mainly due to higher cost incurred.

Chemrex had incurred $1,889,506 (99.9%) of total cost of revenue during the current quarter ended June 30, 2025. This represents an increase of 12.2% as compared to $1,683,491 (99.9%) in the previous year’s same quarter. The increase in cost of revenues for the current quarter ended June 30, 2025 was mainly due to the increase in revenues.

Gross Profit. For the current quarter ended June 30, 2025, we had total gross profit of $368,022. This represents an increase of 27.5% as compared to $288,720 in the previous year’s same quarter.

MRNA Scientific contributed $741 (0.2%) of the total gross profit of $368,022 for the current quarter ended June 30, 2025 as compared to gross profit of $3,143 (1.1%) of the total gross profit for the same quarter in the previous year. The decrease in gross profit during the current quarter by 76.4% was mainly due to lower revenue and higher laboratory cost incurred.

Chemrex contributed $367,281 (99.8%) of the total gross profit for the current quarter ended June 30, 2025 as compared to $285,577 (98.9%) of the total gross profit for the same quarter in the previous year. This represents an increase in gross profit of 28.6% mainly due to the increase in revenues registered in the current quarter.

Other Income. For the current quarter ended June 30, 2025, other income has reduced by 71.3% to $209,461, compared to $730,105 for the same quarter in the previous year.

MRNA Scientific contributed $28,569 (13.6%) of total other income for the current quarter ended June 30, 2025 as compared to $37,364 (5.1%) of the other income for the same quarter in the previous year. This represents a decline of 23.5% mainly due to the drop in USD interest rates, which led to lower interest income from fixed deposits.

Chemrex contributed $180,892 (86.4%) of total other income for the current quarter ended June 30, 2025 as compared to $692,741 (94.9%) of the total other income for the same quarter in the previous year. This represents a decrease of 73.9%. The lower in other income for the current quarter was primarily due to lower bank interest earnings, a decrease in fair value gains on investments in equity securities, a slight reduction in dividends received from investments, the absence of gains on disposal of equity securities and lower reversal of expected credit losses.

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Operating Expenses. For the current quarter ended June 30, 2025, total operating expenses amounted to $1,188,776, representing an increase of 56.5% compared to $759,657 for the same quarter in the previous year. This increase was primarily attributed to the increase in sales and marketing expenses and research and development expenses, partially offset by a decrease in general and administrative and fair value loss on investment in equity securities, The breakdown of the expenses are as follows:

Sales and Marketing Expenses increased significantly to $608,427 for the current quarter ended June 30 , 2025, compared to $136,494 in the previous year’s same quarter, an increase of 345.8%. This increase was primarily attributable to higher compensation expense at the Chemrex subsidiary. The details by entity are as follows:

Chemrex incurred $559,541 (92%) of the total combined sales and marketing expenses of $608,427 for the current quarter ended June 30, 2025, compared to $103,257 (75.6%) of the total combined sales and marketing expenses of $136,494 for the same quarter in the previous year. This represents an increase of 441.9% mainly attributed by higher officer/directors’ remuneration, which includes associated statutory employment contributions and to a lesser extent, a new contract for services appointed on August 1, 2024. The contract focuses on business development efforts to expand both locally and internationally.

MRNA Scientific incurred $28,424 (4.7%) of the total combined sales and marketing expenses of $608,427 for the current quarter ended June 30, 2025, compared to $23,011 (16.9%) of the total combined sales and marketing expenses of $136,494 for the same quarter in the previous year. This represents an increase of 23.5% mainly due to the increase in the directors’ remuneration as a result of additional scope of work being undertaken by such directors.

BGLC, the parent company, incurred $20,462 (3.3%) of the total combined sales and marketing expenses of $608,427 for the current quarter ended June 30, 2025, compared to $10,226 (7.5%) of the total combined sales and marketing expenses of $136,494 for the same quarter in the previous year. This represents an increase of 100.1% in sales and marketing expenses for the current quarter ended June 30, 2025. The increase was mainly due to overseas travel expenses and business development expenses incurred during the current quarter.

Research and Development Expenses: For the current quarter ended June 30, 2025, MRNA Scientific incurred $12,557 (100%), compared to $8,198 (100%) for the same quarter in the previous year. This reflects an increase of 53.2% primarily due to a change in the exchange rate used to convert local currency to U.S. dollars (4.31 in the current quarter versus 4.73 in the same quarter last year) rather than a rise in actual R&D activity or spending.

General and Administrative Expenses: For current quarter ended June 30, 2025, the total general and administrative expenses amounted to $516,790, compared to $558,829 for the same quarter in the previous year, a decrease of $42,039 or 7.5%. The details by entity are as follows:

MRNA Scientific incurred $149,164 (28.9%) of the total combined general and administrative of $516,790 for the current quarter ended June 30, 2025, compared to $73,154 (13.1%) of the total combined general and administrative expenses of $558,829 for the same quarter in the previous year representing an increase of 103.9%. The increase was mainly due to repair costs of lab equipment, amortization of the right-of-use asset, increased utility expenses, legal adviser fees, realized foreign exchange loss and an unrealized foreign exchange loss amounting to $89,757.

Chemrex incurred $161,591 (31.3%) of the total combined general and administrative expenses of $516,790, compared to $121,741 (21.8%) of the total combined general and administrative expenses of $558,829 for the same quarter in the previous year, an increase of 32.7%. The increase was primarily due to losses of realized and unrealized foreign exchange during the period and transport charges.

BGLC, the parent company, incurred $206,035 (39.9%) of total general and administrative of $516,790 for the current quarter ended June 30, 2025, compared to $363,934 (65.1%) of the total combined general and administrative expenses of $558,829 for the same quarter in the previous year This represents a decrease of 43.4% mainly due to lower directors’ fees and legal fees incurred during the current quarter.

Fair value loss on investments in equity securities: For the current quarter ended June 30, 2025, Chemrex incurred a loss on investments in equity securities of $51,002 (100% of the total), compared to $56,136 (100% of the total) for the same quarter in the previous year. This represents a reduction of 9.1%, due to improved market conditions and stabilization in the valuation of the company’s equity investment portfolio.

(Loss)/Profit from Operations. We had a loss from operations of $611,293 for the current quarter ended June 30, 2025 as compared to a profit of $259,168 for the same quarter in the previous year. The loss from operations is due to the reasons discussed above.

Income tax expense. For the current quarter ended June 30, 2025 there is no provision of income tax expense for Chemrex as compared to tax expenses of $55,584 for the same quarter in the previous year.

Foreign currency exchange gain. 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 current quarter ended June 30, 2025, we experienced a foreign currency gain of $367,078 as compared with a foreign currency gain of $2,463 for the same quarter in the previous year.

Provision for expected credit losses. For the current three month period ended June 30, 2025, Chemrex incurred $69,759 (100% of the total), compared to $552,663 (100% of the total) for the same period in the previous year. This represents a reduction of 87.4%, mainly due to improvements in the collection process.

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Revenue.

For the current six month period ended June 30, 2025, we had total revenue of $4,397,328, an increase of 0.9% as compared to total revenue of $4,356,415 for the same period in the previous year.

MRNA Scientific contributed $6,534 (0.1%) of the total revenue for the current six month period ended June 30, 2025, as compared to revenue of $8,661 (0.2%) of the total revenue from the same period in the previous year. The decrease in revenue of 24.6% was primarily due to fewer client referrals from diagnostic centers and the continued unavailability of a key RNA machine, which has been under repair since last year. The equipment breakdown has not only affected MRNA operations but also impacted on general BGS sales, limiting testing capacity and service availability.

Chemrex contributed $4,390,794 (99.9%) of the total revenue for the current six month period ended June 30, 2025 as compared to $4,347,754 (99.8%) of the total revenue for the same period in the previous year. The increase in revenue of 0.99%, was mainly driven by improved sales performance, supported by stronger demand from key customers and expanded marketing efforts.

Cost of Revenue. For the current six month period ended June 30, 2025, we incurred $3,685,813 in cost of revenues, as compared to $3,702,664 for the same period in the previous year. The decrease in cost of revenue of 0.5% was due to the reason stated below.

MRNA Scientific had incurred $4,131 (0.1%) of the total cost of revenues during the current six month period ended June 30, 2025. This represents a decrease of 10.3% as compared to $4,605 (0.1%) for the same period in the previous year due to lower cost incurred in the first quarter.

Chemrex had incurred $3,681,682 (99.9%) of the total cost of revenue during the current six month period ended June 30, 2025. This represents a marginal reduction of 0.44% as compared to $3,698,059 (99.9%) for the same period in the previous year due to effectiveness in cost of production despite slight increase in revenue.

Gross Profit. For the current six month period ended June 30, 2025, we had total gross profit of $711,515, an increase of 8.8% as compared to gross profit of $653,751 for the same period in the previous year.

MRNA Scientific had a gross profit of $2,403 (0.3%) of the total gross profit of $711,515 for the current six month period ended June 30, 2025, as compared to $4,056 (0.6%) of the total gross profit of $653,751 for the same period in the previous year. The decrease in gross profit by 40.8% was due to lower revenue and higher cost incurred.

Chemrex contributed $709,112 (99.7%) of the total gross profit for the current six month period ended June 30,2025, as compared to $649,695 (99.4%) of the total gross profit for the same period in the previous year. The gross profit increased by 9.15% for the current period due to increase in revenues.

Other Income. For the current six month period ended June 30, 2025, we had $300,881 other income as compared to $931,952 for the same period in the previous year. This represents a decrease of 67.7%.

MRNA Scientific had $52,464 (17.4%) for the current six month period ended June 30, 2025, as compared to $76,058 (8.2%) for the same period in the previous year. This represents a reduction of 31% mainly due to the drop in USD interest rates, which led to lower interest income from fixed deposits. Furthermore, unlike the previous year, there were no foreign exchange gains recognized from foreign currency accounts held in Malaysia during the current period.

Chemrex contributed $248,417 (82.6%) of other income for the current six month period ended June 30, 2025, as compared to $855,894 (91.8%) for the same period in the previous year. This represents a decrease of 70.98% primarily due to lower bank interest earnings, a decrease in fair value gains on investments in equity securities, a slight reduction in dividends received from investments, the absence of gains on disposal of equity securities and lower amount of reversal of expected credit losses.

Operating Expenses. For the current six month period ended June 30, 2025, total operating expenses amounted to $2,242,107, representing an increase of 59.5% compared to $1,405,563 for the same period in the previous year. The increase was primarily attributed to the increase in sales and marketing expenses, research and development expenses, general and administrative expenses and fair value loss on investment in equity securities partially offset by a decrease in the provision for expected credit losses, The breakdown is as follows:

Sales and Marketing Expenses increased significantly to $1,149,122 for the current six month period ended June 30, 2025, compared to $290,365 in same period in the previous year. This represents an increase of 295.8% primarily attributable to higher compensation expense at the Chemrex subsidiary (93%). The details by entity are as follows:

Chemrex incurred $1,068,531 (93%) of total combined sales and marketing expenses of $1,149,122 for the current six month period ended June 30, 2025, compared to $223,699 (77%) of the total combined sales and marketing expenses of $290,365 for the same period in the previous year. This represents an increase of 377.7%, primarily due to higher officer/directors’ remuneration, which includes associated statutory employment contributions, and to a lesser extent the appointment of a new service contract effective August 1, 2024. The new contract focuses on business development initiatives aimed at driving both local and international expansion.

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MRNA Scientific incurred $56,064 (4.9%) of the total combined sales and marketing expenses of $1,149,122 for the current six month period ended June 30, 2025, compared to $54,116 (18.6%) of the total combined sales and marketing expenses of $290,365 for the same period in the previous year. This represents an increase of 3.6% due to the increase in directors’ remuneration as a result of additional scope of work undertaken by such directors.

BGLC, the parent company, incurred $24,527 (2.1%) of the total combined sales and marketing expenses of $1,149,122 for the current six month period ended June 30, 2025, compared to $12,550 (4.3%) of the total combined sales and marketing expenses of $290,365 for the same period in the previous year. This represents an increase of 95.4% mainly due to overseas travel expenses and business development expenses incurred during the current six month period.

Research and Development Expenses: For the current six month period ended June 30, 2025, MRNA Scientific incurred $24,696 (100% of the total), compared to $19,673 (100% of the total) for the same period in the previous year. This reflects an increase of 25.5% primarily attributed to the use of a different exchange rate for converting local currency to USD during the current period, rather than an actual increase in underlying R&D activity or spending.

General and Administrative Expenses: For the current six month period ended June 30, 2025, the total general and administrative expenses amounted to $908,666, compared to $874,623 for the same period in the previous year. This represents an increase of 3.9%. The details by entity are as follows:

MRNA Scientific incurred $205,170 (22.6%) of the total combined general and administrative of $908,666 for the current six month period ended June 30, 2025, compared to $111,429 (12.7%) of the total combined general and administrative expenses of $874,623 for the same period in the previous year representing an increase of 84.1%. The increase was mainly due to repair cost of lab equipment, amortization of the right-of-use asset, increased utility expenses, legal adviser fees, realized foreign exchange loss and an unrealized foreign exchange loss.

Chemrex incurred $286,724 (31.6%) of the total combined general and administrative expenses of $908,666, for the current six month period ended June 30, 2025, compared to $252,162 (28.8%) of the total combined general and administrative expenses of $874,623 for the same period in the previous year The increase of 13.7%, was mainly attributed to realized and unrealized foreign exchange losses, higher staff salaries, increased transport charges, additional costs related to the disposal of chemical waste, and increased training expenses.

BGLC, the parent company, incurred $416,772 (45.9%) of total general and administrative of $908,666 for the current six month period ended June 30, 2025, compared to $511,032 (58.4%) of the total combined general and administrative expenses of $874,623 the same period in the previous year. This represents a decrease of 19.4% mainly due to the lower amount of directors’ fees and legal fees incurred during the current period.

Fair value loss on investments in equity securities: For the current six month period ended June 30, 2025, Chemrex incurred a loss on investment in equity securities of $119,499 (100% of the total), compared to $100,433 (100% of the total) for the same period in the previous year. The increase of 19.0%, was primarily due to unfavorable market conditions affecting the valuation of certain equity holdings during the period.

Provision for Expected Credit Losses: For the current six month period ended June 30, 2025, Chemrex incurred $40,124 (100% of the total), compared to $120,469 (100% of the total) for the same period in the previous year. This represents a reduction of 66.69%, mainly due to improved credit risk profiles and more effective receivables collection processes.

(Loss)/Profit from Operations. We had a loss from operations of $1,229,711 for the current six month period ended June 30, 2025 as compared to profit of $180,140 for the same period in the previous year. The losses incurred were mainly due to the reasons discussed above.

Income tax expense. For the current six month period ended June 30, 2025, we had no tax provision as compared to the same period in the previous year in which Chemrex has made a tax provision of $75,652.

Foreign currency translation gain/(loss). We are exposed to fluctuations in foreign exchange rates on the revaluation of monetary assets and liabilities denominated in currencies other than the US Dollar. Therefore, any change in the relevant exchange rate would require us to recognize a transaction gain or loss on revaluation. For the current six-month period ended June 30, 2025, we experienced a foreign currency gain of $439,237 as compared to a foreign currency loss of $207,445 for the same period in the previous year.

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LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2025, we had working capital of $4,621,505 compared with working capital of $5,479,146 as of December 31,2024. The decrease in working capital was due principally to operational losses, undertaking strategic investments, and expansion of operations in line with the Company’s overall strategic plans.

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

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

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 six months ended June 30, 2025, and 2024

Operating Activities

During the six months ended June 30, 2025, the Company incurred a net loss of $(1,239,499) which, after adjusting for amortization, depreciation, dividend income, allowances for expected credit losses, recovery for expected credit losses, fair value loss on investment in equity securities, an increase in trade and other receivables, a decrease in inventories, advance payment from customer, trade and other payables, and operating lease liabilities, resulted in net cash of $(1,561,979) being used in operating activities during the six months ended June 30, 2025 .

By comparison, during the same period last year, the Company incurred a net profit of $95,347 which, after adjusting for amortization, depreciation, dividend income, allowances for expected credit losses, recovery for expected credit losses, fair value gain on share investment, gain on disposal on share investment, loss arising from settlement of supplier contract dispute, a decrease in inventories and operating lease liabilities, increase in trade and other receivables, advance payment from customer and a substantial reduction in trade and other payables, resulted in net cash of $(709,428) being used in operating activities during the six months ended June 30, 2024.

Investing Activities

During the six months ended June 30, 2025, the Company recorded net cash used in investing activities of $(44,178), primarily due to the purchase of plant and equipment totaling $(30,511) and a change in fixed deposits placed for more than three months of $(31,227), partially offset by dividend income of $17,560.

By comparison, during the same period last year, the Company had net cash of $66,960 generated from investment activities from proceeds from disposal of share investments of $297,678, refund from settlement of supplier contract dispute at $77,201 and dividend income of $20,827, partially offset by acquisition of share investment of $(264,768), a change in fixed deposits placed for more than three months of $(40,200) and purchase of plant and equipment of $(23,778).

Financing Activities

During the six months ended June 30, 2025, the Company had net cash of $(1,890) used in financing activities. This was primarily due to a loan repayment of $(1,385) to a director and payment of $(505) related to the rounding down of 169.30 fractional shares resulting from a 10-to-1 reverse stock split at a price of $2.98 per share.

By comparison, during the same period in the previous year, the Company had net cash of $202,344 generated from financing activities for advances from directors

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.

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Evaluation of Disclosure Controls and Procedures

As of June 30, 2025, the Company carried out an evaluation under the supervision and with the participation of its Chief Executive Officer and Chief Financial Officer of the effectiveness of the design and operation of the Company’s disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended.

Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were not effective as of the end of the period covered by this report due to the reasons noted below with respect to our wholly owned subsidiary, Chemrex Corporation Sdn. Bhd.

Management’s Report on Internal Control over Financial Reporting

The Company is not required to provide an attestation report from its registered public accounting firm pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002 as it qualifies as a smaller reporting company.

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Management conducted an assessment of the effectiveness of internal control over financial reporting as of December 31, 2024, using the criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Based on this assessment, management concluded that the Company did not maintain effective control over financial reporting as of the end of the period covered by this report for the reasons noted below with respect to our wholly owned subsidiary, Chemrex.

Our independent Audit Committee oversaw an investigation into certain governance irregularities at the subsidiary level.

Identified Deficiency at Subsidiary Level

During the quarter, the Company’s independent registered public accounting firm communicated to management a concern regarding the sufficiency of internal financial controls at Chemrex. The identified issues relate primarily to documentation standards, delegation of transaction approval authority, and the timeliness of internal reporting.

While the Company’s management, in consultation with the Audit Committee, has determined that the deficiency does not rise to the level of a material weakness as defined in Rule 13a-15(f), it has been classified as a significant deficiency in the design and operation of internal control over financial reporting at the subsidiary level.

Remediation Plan

In response to the identified deficiency, the Company has initiated a remediation plan that includes the following actions:

• Implementation of a revised delegation of authority policy at the subsidiary level;
• Reconstitution and strengthening of oversight mechanisms through the Board and Audit Committee;
• Review and ratification of all affected subsidiary transactions by the Audit Committee;
• Initiation of an internal audit of Chemrex procurement and contracting procedures; and
• Re-training accounting staff on internal control and reporting policies.

The Company expects these remediation measures to be completed during fiscal year 2025. The effectiveness of these controls will be reassessed as part of management’s ongoing internal control evaluation process.

Subsequent to the quarter ended June 30, 2025, and through the date of this report, the Board of Directors implemented targeted remediation measures in response to internal control observations related to the operations of our Chemrex subsidiary. These measures included:

• The appointment of additional directors to the board of Chemrex Corporation Sdn. Bhd., one of whom is the Company’s Chief Financial Officer, to strengthen governance oversight at the subsidiary level;
• A comprehensive review and update of Chemrex’s corporate policies and procedures, conducted in connection with the appointment of the Company’s new Chief Financial Officer, to ensure alignment with parent-level controls and regulatory compliance standards; and
• The initiation of enhanced reporting protocols, requiring more frequent financial and operational reporting from Chemrex management to both the Company’s CFO and Audit Committee.

These steps are intended to remediate identified control deficiencies by improving oversight, increasing policy adherence, and enhancing transparency in subsidiary operations. Management will continue to monitor the effectiveness of these changes and will implement additional measures as appropriate to ensure that internal controls over financial reporting operate effectively on a consistent basis.

Changes in Internal Controls over Financial Reporting

Except as described above, there were no changes in the Company’s internal control over financial reporting during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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Except as set forth below, there have been no material changes to the risk factors previously disclosed in Part I, Item 1A, “Risk Factors,” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. The risk factors described in our Form 10-K, together with the following additional risks, should be carefully considered, as they could materially affect our business, financial condition, and results of operations.

Risks Related to the Proposed Fidelion Diagnostics Transaction

On July 30, 2025, we entered into a non-binding term sheet with Fidelion Diagnostics Pte Ltd (“Fidelion”) for a proposed cross-equity investment and exclusive commercialization rights to Fidelion’s VitaGuard™ minimal residual disease (MRD) platform in Southeast Asia. There can be no assurance that we will successfully negotiate and execute definitive agreements with Fidelion, or that the contemplated transaction will close on the expected terms or timeframe, if at all. The proposed transaction is subject to various conditions, including regulatory review, mutual due diligence, and execution of definitive agreements. Even if completed, the integration of Fidelion’s operations, technology, and personnel may present operational, cultural, and regulatory challenges, particularly as Fidelion operates in Singapore under a different regulatory framework. Delays or difficulties in integration, obtaining necessary licenses, or achieving anticipated market adoption for the VitaGuard™ platform could materially and adversely affect our business prospects and the expected benefits of the transaction.

Risks Related to Our Ethereum Treasury Strategy

Our Board of Directors has approved an Ethereum-focused treasury strategy as part of our capital management program. The market price of Ethereum has been, and may continue to be, highly volatile, which could materially impact the fair value of our digital asset holdings and our financial position. Under current U.S. GAAP, certain crypto assets (including Ethereum) are measured at fair value with changes recognized in earnings, which may increase the volatility of our reported results. Price swings in Ethereum could materially impact our net income (loss) in periods when we hold such assets. Evolving custody, transfer and regulatory frameworks in the U.S., Malaysia and Singapore may impose additional compliance burdens or impact liquidity. Cybersecurity risks, including hacking and theft, may also result in the loss of Ethereum holdings, and such losses may not be recoverable.

Risks Related to Our Chemrex CDMO Transition

Chemrex Corporation Sdn. Bhd., our wholly owned subsidiary, has commenced a planned transition from industrial chemical trading to a contract development and manufacturing organization (CDMO) model focused on biotechnology and high-technology manufacturing. This transition involves execution risk and could result in revenue shortfalls during the conversion period. Success will depend on completing facility upgrades, acquiring and installing specialized manufacturing equipment, hiring and retaining qualified technical personnel, and obtaining Good Manufacturing Practice (GMP) certification and other regulatory approvals. Delays or failures in meeting these milestones could reduce or postpone expected revenue growth. Furthermore, demand for our intended CDMO services may not materialize at projected levels, which could adversely affect our return on invested capital.

General Risk Factor

The occurrence of any of the risks discussed above, or any other risks referenced in our Annual Report on Form 10-K, could cause our actual results to differ materially from those expressed or implied in our forward-looking statements and could materially and adversely affect our business, financial condition, results of operations, and stock price.

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