BIONEXUS GENE LAB CORP. General.
Our Company was incorporated on
COMPANY OVERVIEW
Our financial statements are prepared in US Dollars and in accordance with
accounting principles generally accepted in
Translation of amounts from the local currency of the Company into
As of and for the year
ended December 31,
2021 2020
Year-end MYR : US$1 exchange rate 4.1650 4.0170
Yearly average MYR :
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Summary of Business
We have two operating subsidiaries located in
BioNexus Malaysia is an emerging molecular diagnostics company focused on the
application of functional genomics to enable early diagnosis and personalized
health management. It was incorporated in the
Our principal office address is Unit 02, Level 10, Tower B, Avenue 3, The
Vertical Business Suite II, Bangsar South, No. 8 Jalan Kerinchi,
Chemrex is a wholesaler of industrial chemicals for the manufacture of
industrial, medical, appliance, aero, automotive, mechanical and electronic
industries in
Chemrex's corporate offices and distribution and storage center is located at 4
Jalan CJ 1/6 Kawasan Perusahaan Cheras Jaya,
Our corporate structure is depicted below:
The corporate structure as at
BioNexus Gene Lab Corp. aWyoming company 100% owned 100% owned ChemrexBionexus Gene Lab Sdn .Corporation Sdn . Bhd., Bhd., a Malaysian company a Malaysian Company Recent Events.
Collaboration with
On
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The NHI is a Malaysian private limited company operating the business of
Institut Jantung Negara,
Pursuant to the Development Agreement, the Institute and NHI, through the Principal Investigator, have agreed to collaborate in a research project with BioNexus Malaysia to provide information for purposes of utilizing and further developing our RNA technology. Blood samples will be collected from consenting AMI patients within two hours of being admitted to the NHI and prior to the administering any medication, so as to provide a true picture of the changes in the patient's RNA by the microarray process. The blood samples will be provided to our lab where the RNA will be extracted for analysis. Similar to our other disease analysis process, the isolated RNA will be hybridized, probe array washed and stained and array scanned. We will then use the data from the research project to create a gene expression profile for the likelihood of an AMI event in patients using our RNA analysis. We expect to develop a gene panel from this project within the next 3 to 6 months.
Among other terms and conditions, the research project has been extended beyond
on
During 2021, we have spent substantial time and effort on planning and preparing
documentation for the
RESULTS OF OPERATIONS
Results of Operations for the Year Ended
The following table sets forth key components of the results of operations for
fiscal year ended
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The discussion following the table addresses these results.
Consolidated Year ended
December 31 (Audited)
2021 2020
REVENUE $ 13,362,567 $ 11,390,440
COST OF REVENUE (11,168,747 ) (9,670,617 )
GROSS PROFIT 2,193,820 1,719,823
OTHER INCOME 66,491 886,942
OPERATING EXPENSES
General and administrative (1,204,484 ) (1,332,943 )
PROFIT FROM OPERATIONS 1,055,827 1,273,822
FINANCE COSTS (12,973 ) (11,313 )
PROFIT BEFORE TAX 1,042,854 1,262,509
Tax expense:
Deferred tax (26,736 ) 1,238
Income tax (264,547 ) (169,649 )
Total tax expenses (291,283 ) (168,411 )
NET PROFIT $ 751,571 $ 1,094,098
Other comprehensive income:
Foreign currency translation (loss)/gain (233,946 ) 150,787
COMPREHENSIVE INCOME $ 517,625 $ 1,244,885 Revenues. For the annual period ended
Cost of revenues. For the annual period ended
Other Income. For the annual period ended
Operating Expenses. For the annual period ended
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Profit/(loss) from operations. We had a profit from operations of
Tax expense. For the year ended
Foreign currency translation (loss)/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 will require us to recognize a transaction gain or loss
on revaluation. For the annual period ended
BioNexus-Malaysia and Chemrex
BioNexus BioNexus
Malaysia Chemrex Malaysia Chemrex
Year ended Year ended
December 31, 2021 December 31, 2020
REVENUE $ 1,515,673 $ 11,846,894 $ 134,095 $ 11,256,345
COST OF REVENUE (1,126,059 ) (10,042,688 ) (113,042 ) (9,557,576 )
GROSS PROFIT 389,614 1,804,206 21,053 1,698,769
OTHER INCOME 7,467 59,024 13,148 873,793
OPERATING EXPENSES
General and administrative (86,973 ) (989,617 ) (88,789 ) (1,107,002 )
FINANCE COSTS (4,158 ) (8,815 ) (2,482 ) (8,831 )
PROFIT/(LOSS) BEFORE TAX 305,950 864,798 (57,070 ) 1,456,729
Tax expense :
Deferred tax (11,997 ) (14,739 ) - 1,238
Income tax (30,482 ) (234,065 ) (881 ) (168,768 )
Total tax expense (42,479 ) (248,804 ) (881 ) (167,530 )
NET PROFIT/(LOSS) $ 263,471 $ 615,994 $ (57,951 ) $ 1,289,199 Revenue. For the annual period ended
BioNexus had a revenue of
Cost of revenues. For the annual period ended
BioNexus had incurred
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Other Income. For the annual period ended
BioNexus had other income of
Operating Expenses. For the annual period ended
BioNexus Malaysia had incurred
Profit from Operations. Chemrex had a profit from operations of
Income tax expense. Chemrex had tax provision of
BioNexus Malaysia had tax provision of
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LIQUIDITY AND CAPITAL RESOURCES
As of
Our primary uses of cash have been for operations. The main sources of cash have been from operational revenues and the private placement of our common stock. The following trends are reasonably likely to 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 provided by (used in) / generated from operating, investing, and financing activities for the year endedDecember 31, 2021 and 2020: Year ended December 31, 2021 2020 Net Cash generated from Operating Activities$ 9,161 $ 552,680
Net cash (used in) /generated from investing activities (490,574 ) 1,319,990 Net cash used in generated from financing activities (28,222 ) (4,947 ) Foreign currency translation adjustment
(154,138 ) 60,893
Net Change in Cash and Cash Equivalents $ (663,773 ) $ 1,928,616
Operating Activities
During the year ended
Investing Activities
During the year ended
Financing Activities
During the year ended
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Summary of Significant Accounting Policies.
The accompanying consolidated financial statements reflect the application of certain significant accounting policies as described in this note and elsewhere in the accompanying consolidated financial statements and notes.
• Basis of presentation
These accompanying financial statements have been prepared in accordance with
generally accepted accounting principles in
• Basis of consolidation
The consolidated financial statements include the accounts of
• Use of estimates
In preparing these financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets and revenues and expenses during the years reported. Actual results may differ from these estimates.
• Cash and cash equivalents
Cash and cash equivalents represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments.
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• Trade receivables
Trade receivables are recorded at the invoiced amount and do not bear interest. Management reviews the adequacy of the allowance for doubtful accounts on an ongoing basis, using historical collection trends and aging of receivables. Management also periodically evaluates individual customer's financial condition, credit history, and the current economic conditions to make adjustments in the allowance when it is considered necessary. Trade balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.
• Inventories
Inventories consisting of products available for sell, are stated at the lower of cost or market value. Cost of inventory is determined using the first-in, first-out (FIFO) method. Inventory reserve is recorded to write down the cost of inventory to the estimated market value due to slow-moving merchandise and damaged goods, which is dependent upon factors such as historical and forecasted consumer demand, and promotional environment. The Company takes ownership, risks and rewards of the products purchased. Write downs are recorded in cost of revenues in the Condensed Statements of Operations and Comprehensive Income.
• Leases
In
Prior to
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• Property, Plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on the straight-line basis to write off the cost over the following expected useful lives of the assets concerned. The principal annual rates used are as follows:
Principal Annual Rates/Expected
Categories Useful Life
Air conditioner 20%
Buildings 2%
Computer and software 33%
Equipment 20%
Furniture and fittings 10% to 20%
Lab Equipment 10%
Motor vehicle 10% to 20%
Office equipment 20%
Renovation 10% to 20%
Signboard 10%
Leasehold lands are depreciated over the period of lease term. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Company will obtain ownership by the end of the lease term. Freehold land is not depreciated. Property, plant and equipment under construction are not depreciated until the assets are ready for their intended use
Maintenance and repairs are charged to operations as incurred. Expenditures which substantially increase the useful lives of the related assets are capitalized. When properties are disposed of, the related costs and accumulated depreciation are removed from the accounts and any gain or loss is reported in the period the transaction takes place.
• Impairment of long-lived assets
Long-lived assets primarily include goodwill, intangible assets and property, plant and equipment. In accordance with the provision of ASC Topic 360, "Impairment or Disposal of Long-Lived Assets", the Company generally conducts its annual impairment evaluation to its long-lived assets, usually in the fourth quarter of each fiscal year, or more frequently if indicators of impairment exist, such as a significant sustained change in the business climate. The recoverability of long-lived assets is measured at the lowest level group. If the total of the expected undiscounted future net cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and carrying amount of the asset. There has been no impairment charge for the years presented.
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• Finance lease
Leases that transfer substantially all the rewards and risks of ownership to the lessee, other than legal title, are accounted for as finance leases. Substantially all of the risks or benefits of ownership are deemed to have been transferred if any one of the four criteria is met: (i) transfer of ownership to the lessee at the end of the lease term, (ii) the lease containing a bargain purchase option, (iii) the lease term exceeding 75% of the estimated economic life of the leased asset, (iv) the present value of the minimum lease payments exceeding 90% of the fair value. At the inception of a finance lease, the Company as the lessee records an asset and an obligation at an amount equal to the present value of the minimum lease payments. The leased asset is amortized over the shorter of the lease term or its estimated useful life if title does not transfer to the Company, while the leased asset is depreciated in accordance with the Company's depreciation policy if the title is to eventually transfer to the Company. The periodic rent payments made during the lease term are allocated between a reduction in the obligation and interest element using the effective interest method in accordance with the provisions of ASC Topic 835-30, "Imputation of Interest".
• Revenue recognition
Revenue recognized when it is probable that the economic benefits associated with the transaction will flow to the enterprise and the amount of the revenue can be measured reliably. Revenue is measured at the fair value of consideration received or receivable.
a. The Company follows the guidance of Accounting Standards Codification (ASC) 606, Revenue from Contracts, ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes
i. Identifying the contracts or agreements with a customer,
ii. Identifying our performance obligations in the contract or agreement,
iii. Determining the transaction price,
iv. Allocating the transaction price to the separate performance obligations, and
v. Recognizing revenue as each performance obligation is satisfied.
The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients.
b. Interest income
Interest is recognized on receipt basis.
• Cost of revenues
Cost of revenue includes the purchase cost of retail goods for re-sale to customers and packing materials (such as boxes). It excludes purchasing and receiving costs, inspection costs, warehousing costs, internal transfer costs and other costs of distribution network in cost of revenues.
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• Shipping and handling fees
Shipping and handling fees, if billed to customers, are included in revenue. Shipping ang handling fees associated with inbound and outbound freight are expensed as incurred and included in selling and distribution expenses.
• Comprehensive income
ASC Topic 220, "Comprehensive Income" establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive income, as presented in the accompanying statements of stockholders' equity consists of changes in unrealized gains and losses on foreign currency translation and cumulative net change in the fair value of available-for-sale investments held at the balance sheet date. This comprehensive income is not included in the computation of income tax expense or benefit.
• Income taxes
Income taxes are determined in accordance with the provisions of ASC Topic 740, "Income Taxes" ("ASC Topic 740"). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclosed in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.
The Company conducts major businesses in
• Net loss per share
The Company calculates net loss per share in accordance with ASC Topic 260 "Earnings per share". Basic loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.
• Foreign currencies translation
Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statement of operations.
The functional currency of the Company is the United States Dollars ("US$") and the accompanying financial statements have been expressed in US$. In addition, the Company maintains its books and record in a local currency, Malaysian Ringgit ("MYR" or "RM"), which is functional currency as being the primary currency of the economic environment in which the entity operates.
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In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, "Translation of Financial Statement", using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiary are recorded as a separate component of accumulated other comprehensive income.
Translation of amounts from the local currency of the Company into
As of and for the year
ended December 31,
2021 2020
Year-end MYR: US$1 exchange rate 4.1650 4.0170
Yearly average MYR:
• Related parties
Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence.
• Fair value of financial instruments
The carrying value of the Company's financial instruments: cash and cash equivalents, trade receivable, deposits and other receivables, amount due to related parties and other payables approximate at their fair values because of the short-term nature of these financial instruments.
The Company also follows the guidance of the ASC Topic 820-10, "Fair Value Measurements and Disclosures" ("ASC 820-10"), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:
• Level 1: Observable inputs such as quoted prices in active markets;
• Level 2: Inputs, other than the quoted prices in active
markets, that are observable either directly or indirectly;
and
• Level 3: Unobservable inputs in which there is little or no
market data, which require the reporting entity to develop
its own assumptions
As of
• Recent accounting pronouncements
The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.
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