Audit Committee Review and Governance Remediation

In 2024, our Audit Committee, composed solely of independent directors, undertook a comprehensive review of historical transactions at our wholly owned subsidiary, Chemrex Corporation Sdn. Bhd., following concerns raised about internal control procedures and board authorization. The review identified the following material items:

• A sale of Chemrex’s primary operating property to CCRE Composite Sdn. Bhd. was initiated without formal Board approval. This transaction has since been cancelled and the deposit was forfeited in favor of the Company.
• Transactions with Honkuk Material Sdn. Bhd., a related party, were not submitted for prior Board or Audit Committee review, although no material misstatement has been identified to date.
• Director remuneration increases and payments to Mr. Wong Kim Hai were processed without documented approvals. These are scheduled to be presented to shareholders for ratification at the next Chemrex shareholder meeting.
• Procurement from Quote Me Sdn. Bhd., a dissolved entity at the time of transaction, is being accepted based on auditor confirmation of assets received and management representations.

As a result of these findings, the Board, in coordination with the Audit Committee, is implementing enhanced governance controls, updating approval workflows, and reviewing subsidiary-level delegations of authority. These steps are intended to strengthen oversight and align our corporate governance practices with Nasdaq and SEC expectations.

Cybersecurity and Digital Assets Integration

On March 5, 2025, the Company announced its new Ethereum-focused treasury strategy. This decision marks the Company as the first Nasdaq-listed company to exclusively prioritize Ethereum (ETH) as a strategic treasury asset, and is in line with recent announcements of Ethereum being included in the US “Crypto Strategic Reserve.” The Company published its “Ethereum Strategy Whitepaper” on that same date, which is available https://www.bionexusgenelab.com/ethstrategy. As part of this strategy, Company will explore Ethereum-based financial applications and innovative treasury management practices which includes external custodian evaluations and independent review of our ETH-related treasury policies. The Company also is evaluating opportunities to further integrate blockchain technology into its core technology operations. Additionally, we are assessing the potential impact of Wyoming’s stablecoin issuance framework, which could further support Ethereum’s role in the evolving digital finance landscape. Further, on March 7, 2025, we announced our strategic partnership with ML Tech to optimize the BGLC’s Ethereum-based growth strategies. ML Tech is an AI-driven wealth management platform for digital assets regulated by the National Futures Association (NFA), and is headquartered in Miami, Florida. This collaboration follows the announced Ethereum treasury strategy by BGLC, marking its commitment to technological and financial innovation.

Known Trends, Uncertainties, and Events

Looking ahead, we anticipate the following key developments will shape our operations:

• Full remediation of internal control deficiencies and establishment of a uniform group-level risk and compliance framework;
• Continued expansion into digital healthcare markets, including the deployment of capital into Malaysian government co-investment projects;
• Potential revenue acceleration through strategic alliances, mergers, or acquisitions facilitated by the Company’s investment banking advisor;
• Active evaluation of cryptocurrency and blockchain-based financial infrastructure as a treasury diversification tool, pending completion of internal legal and compliance reviews.

Result of Operations

Exchange Rates

Translation of amounts from RM (MYR) into US$1.00 has been made at the following exchange rates for the respective years:

	December 31, 2024	December 31, 2023
Year-end US$1.00: MYR exchange rate	4.4755	4.5900

	January 1, 2024 to December 31, 2024	January 1, 2023 to December 31, 2023
Yearly average US$1.00: MYR exchange rate	4.5710	4.5658

Results of Operations for the Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 (Audited)

The following table sets forth key components of the results of operations for fiscal years ended December 31, 2024 and 2023, respectively. The discussion following the table addresses these results.

| Consolidated | Year ended December 31 (Audited) |

	2024	2023
REVENUE (including $112,556 and $106,919 of revenue from related parties for the year ended December 31, 2024 and 2023 respectively)	$9,510,646	$9,770,806
COST OF REVENUE (including $297,736 and $184,433 of cost of revenue from related parties for the years ended December 31, 2024 and 2023, respectively)	$(8,221,125)	$(8,441,308)
GROSS PROFIT	$1,289,521	$1,329,498
OTHER INCOME	$2,072,473	$486,036
OPERATING EXPENSES
Sales and marketing	$(2,030,684)	$(596,858)
Research and development	$(47,511)	$(54,982)
General and administrative	$(1,973,968)	$(2,442,855)
Provision for expected credit losses	$(883,533)	$(1,314,427)
TOTAL OPERATING EXPENSES	$(4,935,696)	$(4,409,122)
LOSS FROM OPERATIONS	$(1,573,702)	$(2,593,588)
FINANCE COSTS	$(21,146)	$(13,929)
LOSS BEFORE TAX	$(1,594,848)	$(2,607,517)
Tax expense:
Deferred tax	$12,305	$17,359
Income tax	$(15,799)	$(38,885)
Tax expense	$(3,494)	$(21,526)
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS	$(1,598,342)	$(2,629,043)
Other comprehensive income/(loss):
Foreign currency translation gain/(loss)	$122,294	$(268,232)
COMPREHENSIVE LOSS	$(1,476,048)	$(2,897,275)

Revenues. For the year ended December 31, 2024, we had revenues of $9,510,646 as compared to revenues of $9,770,806 for the year ended December 31, 2023, a decrease of approximately 2.7%. The 2024 revenue decrease was due to increased competition in the market, reduced selling price for resin and fiberglass mats and the lack of new projects in the Malaysian market.

Cost of Revenues. For the year ended December 31, 2024, we had cost of revenues of $8,221,125 as compared to cost of revenues of $8,441,308 for the year ended December 31, 2023, a decrease of approximately 2.6% due to lower sales caused by the above reasons.

Other Income. For the year ended December 31, 2024, we had other income of $2,072,473 as compared to other income of $486,036 for the year ended December 31, 2023, an increase of 326.4% for the current year. The increase in other income for the current annual period was due primarily from Chemrex’ the reversal of expected credit losses of $1,689,412.

Operating Expenses. For the year ended December 31, 2024, we recorded operating expenses of $4,935,696, compared to $4,409,122 for the year ended December 31, 2023. This represents an increase of approximately 11.9%.

This increase was primarily driven by the following:

Sales and Marketing Expenses: For the year ended December 31, 2024, sales and marketing expenses were $2,030,684, compared to $596,585 for the year ended December 31, 2023. This represents an increase of 240.4%, mainly due to higher directors’ remuneration and increased travel expenses.

Research and Development Expenses: For the year ended December 31, 2024, research and development expenses amounted to $47,511, compared to $54,982 for the year ended December 31, 2023. This represents a decrease of 13.6%, primarily due to a lab equipment malfunction which resulted in the IJN project being put on hold.

General and Administrative Expenses: For the year ended December 31, 2024, general and administrative expenses totaled $1,973,968, compared to $2,442,855 for the year ended December 31, 2023. This represents a decrease of 19.2%, mainly due to lower professional fees at the parent company level related to the Nasdaq listing in 2023, along with a reduction in share-based compensation.

Provision for Expected Credit Losses: For the year ended December 31, 2024, the provision for expected credit losses was $883,533, compared to $1,314,427 for the year ended December 31, 2023. This represents a decrease of 32.8%, primarily attributable to Chemrex.

Loss from Operations. We had a loss from operations of $1,573,702 for the year ended December 31, 2024, compared to a loss from operations of $2,593,588 for the year ended December 31, 2023, a reduction of 39.3% for the reasons discussed above.

Tax Expense. For the year ended December 31, 2024, we had the total tax expense of $3,494 due to deferred tax credit of $12,305 which offset a tax provision of $15,799. For the year ended December 31, 2023, we had the total tax expense of $21,526 due to a deferred tax credit of $17,359 which offset a tax provision of $38,885. The lower tax expenses were primarily due to lower operating profits.

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 will require us to recognize a transaction gain or loss on revaluation. For the annual period ended December 31, 2024, we had foreign currency translation gain of $122,294 compared with foreign currency translation loss of $268,232 for the prior annual period.

MRNA Scientific and Chemrex Corporation	Provision for genomic screening services	Trading of industrial chemicals	Provision for genomic screening services	Trading of industrial chemicals
	Year ended December 31, 2024		Year ended December 31, 2023
REVENUE	$16,069	$9,494,577	$24,219	$9,746,587
COST OF REVENUE	$(7,316)	$(8,213,809)	$(19,851)	$(8,421,457)
GROSS PROFIT	$8,753	$1,280,768	$4,368	$1,325,130
OTHER INCOME
Dividend income	-	$68,130	-	$61,409
Interest income	$109,444	$38,197	$19,629	$49,046
Fair value gain on investments in equity securities	-	$69,476	-	$306,614
Gain on disposal of investments in equity securities	-	$38,409	-	$7,245
Reversal of expected credit losses	-	$1,689,412	-	-
Others	$13,507	$45,898	-	$42,093
TOTAL OTHER INCOME	$122,951	$1,949,522	$19,629	$466,407
OPERATING EXPENSES
Sales and marketing	$(125,299)	$(1,861,456)	$(18,884)	$(569,896)
Research and development	$(47,511)	-	$(54,982)	-
General and administrative	$(194,038)	$(679,321)	$(171,881)	$(134,678)
Provision for expected credit losses	-	$(883,533)	-	$(1,314,427)
TOTAL OPERATING EXPENSES	$(366,848)	$(3,424,310)	$(245,747)	$(2,019,001)
LOSS FROM OPERATIONS	$(235,144)	$(194,020)	$(221,750)	$(227,464)
FINANCE COSTS	$(11,795)	$(9,072)	$(5,052)	$(8,877)
LOSS BEFORE TAX	$(246,939)	$(203,092)	$(226,802)	$(236,341)
Tax expense
Deferred tax	-	$12,305	$12,269	$5,090
Income tax	-	$(15,799)	$(2,613)	$(36,272)
Total tax (expense)/credit	-	$(3,494)	$9,656	$(31,182)
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS	$(246,939)	$(206,586)	$(217,146)	$(267,523)

Revenue. For the year ended December 31, 2024, Chemrex contributed $9,494,577 (99.8%) of total combined revenue of $9,510,646 compared to its contribution of $9,746,587 (99.8%) of total combined revenue of $9,770,806 for the year ended December 31, 2023, a decrease of 2.59% from the prior year. As mentioned above, the revenue decrease in 2024 was due to increased competition in the market, reduced selling price for resin and fiberglass mats and the lack of new projects in the Malaysian market.

MRNA Scientific had a revenue of $16,069 (0.2%) for the year ended December 31, 2024, as compared to revenues of $24,219 (0.2%) from the same period ended December 31, 2023, a decrease of 33.70%. The decrease in revenue for 2024 was due to RNA machine breakdowns of our testing process that occurred during the current year end period along with fewer client referrals from diagnostics centers.

Cost of Revenues. For the year period ended December 31, 2024, Chemrex had incurred $8,213,809 (99.9%) of the total combined cost of revenue of $8,221,125 as compared to the year ended December 31, 2023, wherein Chemrex had incurred $8,421,457 (99.8%) of the total combined cost of revenue of $8,441,308. The decrease of 2.47% in Chemrex’s cost of revenues was due to its decreased in revenues and reasons stated above.

MRNA Scientific had incurred $7,316 (0.1%) on cost of revenues for the year ended December 31, 2024, as compared to cost of revenues of $19,851 (0.2%) for the same year ended December 31, 2023. The decrease of 63.1% was due to a reduction in purchases of extraction kits, reagents, and laboratory consumables attributable to our reduced sales.

Other Income. For the year ended December 31, 2024, Chemrex contributed $1,949,522 (94.1%) of total other combined income of $2,072,473 as compared to $466,407 (96%) of total combined income of $486,036 for the year ended December 31, 2023. The increase of 317.99% is due to dividends received from other investments, interest income, capital gains on equity investment and the reversal expected credit losses of $1,689,412.

MRNA Scientific had other income of $122,951 (4.5%) of total other combined income of $2,072,473 for the year ended December 31, 2024, as compared $19,629 (4%) of total combined income of $486,036 for the year ended December 31, 2023, an increase of 526.4% due to bank interest generated and additional of rental income.

Sales and Marketing. For the year ended December 31, 2024, Chemrex incurred $1,861,456 (91.7%) of the total combined sales and marketing expenses of $2,030,684, compared to $569,896 (95.5%) of the total combined sales and marketing expenses of $596,858 for the year ended December 31, 2023. This represents an increase of 226.6% for Chemrex in 2024, primarily