Bionexus Gene Lab (US:BGLC)2025-08-18 20:48PART I – FINANCIAL INFORMATION Financial Statements This section presents unaudited condensed consolidated financial statements for the six months ended June 30, 2025, reporting a net loss of $1.24 million and a decrease in total assets to $9.42 million Condensed Consolidated Balance Sheet Summary | Account | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Total Current Assets | $6,379,326 | $7,430,449 | | Total Assets | $9,421,205 | $10,433,848 | | Total Current Liabilities | $1,757,821 | $1,951,303 | | Total Liabilities | $1,899,168 | $2,111,044 | | Total Stockholders' Equity | $7,522,037 | $8,322,804 | Condensed Consolidated Statements of Operations Summary | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Revenue | $4,397,328 | $4,356,415 | | Gross Profit | $711,515 | $653,751 | | (Loss)/Profit from Operations | $(1,229,711) | $180,140 | | Net (Loss)/Profit | $(1,239,499) | $95,347 | | EPS (Basic and Diluted) | $(0.690) | $0.054 | Condensed Consolidated Statements of Cash Flows Summary | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | $(1,561,979) | $(709,428) | | Net Cash (Used in)/Generated from Investing Activities | $(44,178) | $66,960 | | Net Cash (Used in)/Generated from Financing Activities | $(1,890) | $202,344 | | Net Change in Cash and Cash Equivalents | $(1,349,777) | $(555,503) | | Cash and Cash Equivalents, End of Period | $1,537,189 | $3,962,207 | Note 2: Summary of Significant Accounting Policies Management concluded prior substantial doubt about going concern is alleviated, with key policies including point-in-time revenue recognition and FIFO inventory - Management has concluded that the conditions that previously raised substantial doubt about the Company's ability to continue as a going concern are alleviated based on its evaluation of liquidity, capital actions, and planned operating initiatives39 - Revenue is recognized at a point in time when control of promised goods or services is transferred to the customer5657 Note 9: Revenue Total revenue for the six months ended June 30, 2025, was $4.40 million, primarily from industrial chemicals trading, with Malaysia as the largest market Revenue by Product Line (Six Months Ended June 30) | Product/Service Line | 2025 | 2024 | | :--- | :--- | :--- | | Trading of industrial chemicals | $4,390,794 | $4,347,754 | | Screening services and related sales | $6,534 | $8,661 | | Net revenue | $4,397,328 | $4,356,415 | - Revenue is recognized at a point in time when control of goods is transferred or when a final report for services is delivered to the customer110111 Note 12: Stockholders' Equity A 1-for-10 reverse stock split effective April 7, 2025, reduced outstanding shares to 1,796,597 to regain Nasdaq compliance - On April 1, 2025, the company filed to effect a 1-for-10 reverse stock split of its common stock, which became effective on April 7, 2025133200 - Post-split, the number of issued and outstanding shares was reduced to 1,796,597 from 17,967,663133 Note 13: Segment Information The company operates three segments, with industrial chemicals generating most revenue but reporting an operating loss of $(557,349) for the six months ended June 30, 2025 Segment Performance (Six Months Ended June 30, 2025) | Segment | Revenue | (Loss)/Profit from Operations | | :--- | :--- | :--- | | Trading of industrial chemicals | $4,390,794 | $(557,349) | | Provision for genomic screening services | $6,534 | $(231,063) | | Investment holding | $ - | $(441,299) | | Total | $4,397,328 | $(1,229,711) | - The company expects the MRNA Scientific (genomic screening) segment to benefit from new technology integration, while the Chemrex (industrial chemicals) segment's relative contribution is expected to decrease as it transitions to a CDMO model136 Note 15: Subsequent Events Post-quarter, the company entered a non-binding term sheet with Fidelion Diagnostics and approved Chemrex's strategic repositioning into a biotechnology-focused CDMO - On July 30, 2025, the company entered a non-binding term sheet with Fidelion Diagnostics for a proposed cross-equity investment and exclusive commercialization rights for Fidelion's VitaGuard™ MRD platform in Southeast Asia158 - On July 31, 2025, the Board approved the strategic repositioning of Chemrex Corporation into a biotechnology-focused CDMO and authorized up to MYR 10 million for its development159 Management's Discussion and Analysis of Financial Condition and Results of Operations Q2 2025 saw 14.5% YoY revenue growth but an operating loss of $(611,293) due to higher expenses, alongside strategic shifts to biotech and a new Ethereum treasury strategy Q2 2025 vs Q2 2024 Performance | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenue | $2,260,253 | $1,974,564 | | Gross Profit | $368,022 | $288,720 | | (Loss)/Profit from Operations | $(611,293) | $259,168 | | Net (Loss)/Profit | $(616,172) | $199,104 | - The increase in operating loss was primarily driven by a 345.8% surge in Sales and Marketing expenses to $608,427 in Q2 2025, mainly due to higher compensation at the Chemrex subsidiary220 - The company regained full Nasdaq compliance in April 2025 after implementing a 1-for-10 reverse stock split to address the minimum bid price requirement182188 - Key strategic initiatives include a potential alliance with Fidelion Diagnostics, the transition of Chemrex into a biotech CDMO, and a new Ethereum-focused treasury strategy, although no digital assets were held as of June 30, 2025173174175 Quantitative and Qualitative Disclosures About Market Risk As a "smaller reporting company," the company is exempt from providing quantitative and qualitative disclosures about market risk - The Company is not required to provide information for this item as it qualifies as a "smaller reporting company" under Regulation S-K266 Controls and Procedures Management concluded disclosure controls were not effective as of June 30, 2025, due to significant deficiencies at Chemrex, prompting a remediation plan - The CEO and CFO concluded that the Company's disclosure controls and procedures were not effective as of June 30, 2025268 - A significant deficiency was identified in the internal financial controls at the Chemrex subsidiary, concerning documentation, transaction approval, and reporting274275 - A remediation plan is underway, including appointing the company's CFO to the Chemrex board, updating policies, and enhancing reporting from the subsidiary to the parent company276281 PART II – OTHER INFORMATION Legal Proceedings The company reports no pending or threatened material legal proceedings against it, its property, or its directors and officers - There are presently no pending material legal proceedings to which the Company or its property is subject279 Risk Factors New material risks include execution risk for the Fidelion Diagnostics transaction, market volatility from the Ethereum treasury strategy, and operational risks in Chemrex's CDMO transition - Fidelion Transaction Risk: There is no guarantee that the non-binding term sheet with Fidelion Diagnostics will lead to a definitive agreement or that the transaction will close, and integration presents further challenges282 - Ethereum Treasury Risk: The company's Ethereum-focused treasury strategy exposes it to high price volatility, evolving regulations, and cybersecurity risks, which could materially impact financial results283 - Chemrex CDMO Transition Risk: The transition of Chemrex to a CDMO model involves significant execution risk, including potential revenue shortfalls, delays in obtaining GMP certification, and uncertainty regarding market demand284 Other Required Disclosures The company reported no unregistered sales of equity securities, no defaults on senior securities, and confirmed mine safety disclosures are not applicable - The company reported no unregistered sales of equity securities, no defaults upon senior securities, and that mine safety disclosures are not applicable286287 Other Information On August 15, 2025, the Board approved new equity compensation, including non-qualified stock options for executives and directors, with CEO awards tied to stock price targets - On August 15, 2025, the Board approved new stock option awards for executives, directors, and key employees288 - The CEO's award includes four tranches of 300,000 options each, with vesting tied to service and achieving 20-day VWAP hurdles of $8.00, $12.00, $20.00, and $30.00 per share289 - The CFO, independent directors, and key employees will receive annual grants of options with vesting based on continued service290291292 Exhibits This section lists filed exhibits, including officer certifications, a Non-Qualified Stock Option Agreement, and Inline XBRL data files - Filed exhibits include officer certifications (31.1, 31.2, 32.1, 32.2), a Form of Non-Qualified Stock Option Agreement (10.8), and various Inline XBRL documents294