General.

Our Company was incorporated on April 5, 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 years ended December 31, 2020 and December 31, 2019, respectively. This information should be read in conjunction with the 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.





                                COMPANY OVERVIEW


Our financial statements are prepared in US Dollars and in accordance with accounting principles generally accepted in the United States. See information immediately below for information concerning the exchange rates at the Malaysian translated into US Dollars ("USD") at various pertinent dates and for pertinent periods.

Translation of amounts from the local currency of the Company into US$1 has been made at the following exchange rates for the respective years:





                                            As of and for the year
                                              ended December 31,
                                              2020             2019
Year-end MYR : US$1 exchange rate               4.0170         4.0925

Yearly average MYR : US$1 exchange rate 4.2010 4.1410







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Summary of Business


We have two operating subsidiaries located in Malaysia, Bionexus Gene Lab Sdn. Bhd. ("Bionexus Malaysia") and Chemrex Corporation Sdn. Bhd. ("Chemrex").

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 State of Wyoming on May 12, 2017. On August 23, 2017, we acquired all of the outstanding capital stock of BioNexus Malaysia, which was incorporated in Malaysia on April 7, 2015. BioNexus 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 principal office address is Unit 02, Level 10, Tower B, Avenue 3, The Vertical Business Suite II, Bangar 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. We also have a blood collection center located at 1st floor, Lifecare Medical Centre, Kuala Lumpur, Malaysia. Our telephone number is (+60) 122126512 and web-site 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 Asia Pacific region. On December 31, 2020, we acquired all of the outstanding capital stock of Chemrex, which was incorporated in Malaysia on September

Chemrex's corporate offices 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 web-site is www.chemrex.com.my.

Our corporate structure is depicted below:

The corporate structure as at December 31, 2020 is depicted below:

BioNexus Gene Lab Corp.
                                  a Wyoming company


         100% owned                                               100% owned
Bionexus Gene Lab Sdn. Bhd.,                            Chemrex Corporation Sdn. Bhd.,
     a Malaysian company                                      a Malaysian Company




Recent Events.


Collaboration with Malaysia's National Heart Institute

On August 1, 2019, our wholly owned Malaysian subsidiary, Bionexus Gene Lab Sdn Bhd ("BioNexus Malaysia"), entered into an Agreement for The Development Blood-Based Genomic Signatures in Acute Myocardial Infarction Risk Prediction Research Proposal with Institut Jantung Negara Sdn. Bhd. ("Institute") and Dato Dr. Amin Ariff Bin Nuruddin ("Principal Investigator") ("Development Agreement").






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The Institute is a Malaysian private limited company operating the business of Institut Jantung Negara, Malaysia's National Heart Institute ("NHI"). NHI is the national referral centre for acute myocardial infraction diseases ("AMI") which provide diagnostic, medical and surgical services. NHI is under the direction of the Malaysian Ministry of Health. The Principal Investigator is an employee of the Institution and he is an experienced head of cardiologist and an interventionist of NHI.

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 will expire on December 31, 2021 and BioNexus Malaysia is required to pay the approximately $1,100 per month in fees to NHI for the usage of its freezer and allowance for nurses and doctors who are required to explain to each participating patient about the research, his consent and patient consultation on the blood- based gene expression report for each patient.

For the past 6 months, we have spent substantial time and effort on planning and preparing documentation for the Institute's Ethics Committee review and approval such as establishing the objectives and benefits of the research and process protocols and other procedural items. Following the successful conclusion of the study by August 2021, we are hopeful that NHI will take the lead to incorporate our RNA screening into their regular screening processes for patients. Industry information from the Institute indicates that Malaysians are developing heart disease at a younger age compared with their peers in other countries.





RESULTS OF OPERATIONS


Results of Operations for the Year Ended December 31, 2020 Compared to the Year Ended December 31, 2019 (Audited).

The following table sets forth key components of the results of operations for fiscal year ended December 31, 2020 and 2019, respectively. As stated herein, on December 31, 2020, the Company consummated its acquisition of Chemrex Corporation Sdn. Bhd. ("Chemrex"), pursuant to a Share Exchange Agreement by and among the Company and Chemrex and the Chemrex shareholders. Accordingly, the audited financial information for the period ended December 31, 2020 includes the accounts of Chemrex and BioNexus Malaysia and the (audited) financial information for the period ended December 31, 2019 only includes the accounts of BioNexus Malaysia.






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The discussion following the table addresses these results.





                                            Year ended
                                       December 31 (Audited)
                                        2020            2019

REVENUE                             $ 11,390,440     $  126,955

COST OF REVENUE                       (9,670,617 )      (71,067 )

GROSS PROFIT                           1,719,823         55,888

OTHER INCOME                             886,942         25,048

OPERATING EXPENSES
General and administrative            (1,332,943 )     (356,641 )

PROFIT/(LOSS) FROM OPERATIONS          1,273,822       (275,705 )

FINANCE COSTS                            (11,313 )            -

PROFIT/(LOSS) BEFORE TAX               1,262,509       (275,705 )

Tax expense:
Deferred tax                              (1,238 )        4,477
Income tax                               169,649         24,759
Total tax (expense)/credit              (168,411 )       29,236

NET PROFIT/(LOSS)                   $  1,094,098     $ (246,469 )

Other comprehensive income:
Foreign currency translation gain        150,787          9,874

COMPREHENSIVE INCOME/(LOSS)         $  1,244,885     $ (236,595 )

Revenues. For the annual period ended December 31, 2020, we had revenues of $11,390,440 as compared to revenues of $126,955 for the annual period ended December 31, 2019. The revenues for the current period reflect the acquisition of Chemrex and includes the revenues of Chemrex. Thus, a year to year revenue comparison is not relevant at this time. Please refer to Note 14. to our audited financial statements for segmented financial information.

Cost of revenues. For the annual period ended December 31, 2020 we had cost of revenues of $9,670,617 as compared to cost of revenues of $71,067 for the annual period ended December 31, 2019. As stated herein, the higher cost of revenues for the current year end period reflect the acquisition of Chemrex. Cost of revenues includes

Other Income. For the annual period ended December 31, 2020, we had other income of $886,942 as compared $25,048 for the annual period ended December 31, 2019. The increase in other income for the current annual period is due primarily Chemrex's disposal of property which resulted in income of $706,953.

Operating Expenses. For the annual period ended December 31, 2020, we had operating expenses of $1,332,943, as compared to operating expenses of $356,641 for the annual period ended December 31, 2019. Operating expenses include depreciation of fixed assets, stock grants to officers/directors, shares issuances to service providers, employee compensation and benefits, professional fees and marketing and travel expenses. The increase for the current year period reflects the operating expenses associated the business of Chemrex.






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Profit/(loss) from operations. We had a profit from operations of $1,262509 for the annual period ended December 31, 2020 compared with a loss from operations of $275,705 for the annual period ended December 31, 2019 for the reasons discussed above.

Tax expense. For the year ended December 31, 2020, we had income tax expense of $169,649 and adjustment for over provision of deferred tax liabilities in prior year, credit amount of $1,238, total tax expenses were $168,411. Last year ended December 31, 2019, we had income tax credit amount $24,759 and adjustment for over provision of deferred tax liabilities in prior year, credit amount of $4,477, total tax expenses were $29,237

Foreign currency translation gain/loss. For the annual period ended December 31, 2020, we had foreign currency translation gain of $150,773 compared with foreign currency translation gain $9,875 for the prior annual period.

LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2020, we had working capital of $4,611,894 compared with working capital of $830,997 as of December 31, 2019. The increased in working capital as of December 31, 2020 from December 31, 2019 is due principally to acquisition of Chemrex and the operating profit of Chemrex for the 2020 period

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.

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 the United States of America ("US GAAP").





• Basis of consolidation




The consolidated financial statements include the accounts of Bionexus Gene Lab Corp. and its subsidiaries. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation.





• 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 February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, Leases, which was subsequently amended in 2018 by ASU 2018-10, ASU 2018-11 and ASU 2018-20 (collectively, Topic 842). Topic 842 will require the recognition of a right-of-use asset and a corresponding lease liability, initially measured at the present value of the lease payments, for all leases with terms longer than 12 months. For operating leases, the asset and liability will be expensed over the lease term on a straight-line basis, with all cash flows included in the operating section of the statement of cash flows. For finance leases, interest on the lease liability will be recognized separately from the amortization of the right-of-use asset in the statement of comprehensive income and the repayment of the principal portion of the lease liability will be classified as a financing activity while the interest component will be included in the operating section of the statement of cash flows. Topic 842 is effective for annual and interim reporting periods beginning after December 15, 2018. Early adoption is permitted. Upon adoption, leases will be recognized and measured at the beginning of the earliest period presented using a modified retrospective approach. Topic 842 allows for a cumulative-effect adjustment in the period the new lease standard is adopted and will not require restatement of prior periods.

Prior to January 1, 2019, the Company accounted for leases under ASC 840, Accounting for Leases. Effective January 1, 2019, the Company adopted the guidance of ASC 842, Leases, which requires an entity to recognize a right-of-use asset and a lease liability for virtually all leases. The Company adopted ASC 842 using a modified retrospective approach. As a result, the comparative financial information has not been updated and the required disclosures prior to the date of adoption have not been updated and continue to be reported under the accounting standards in effect for those periods.






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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. Sales of goods or rendering of services



An entity shall recognize revenue associated with the transaction by reference to the stage of completion of the transaction at the end of the reporting period. The outcome of a transaction can be estimated reliably when all the following conditions are satisfied: -





       i.   The amount of revenue can be measured reliably;
       ii.  It is probable that the economic benefits associated with the
            transaction will flow to the entity;
       iii. The stage of completion of the transaction at the end of the reporting
            period can be measured reliably; and
       iv.  The costs incurred for the transaction and the costs to complete the
            transaction can be measured reliably.




  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 Malaysia and is subject to tax in their own jurisdictions. As a result of its business activities, the Company will file separate tax returns that are subject to examination by the foreign tax authorities.





• 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 US$1 has been made at the following exchange rates for the respective years:





                                           As of and for the year
                                             ended December 31,
                                             2020             2019
Year-end MYR: US$1 exchange rate               4.0170         4.0925

Yearly average MYR: US$1 exchange rate 4.2010 4.1410






• 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 December 31, 2019, and December 31, 2018, the Company did not have any non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements, at least annually, on a recurring basis, nor did the Company have any assets or liabilities measured at fair value on a non-recurring basis.

• 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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