Company: BGLC
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001477932-25-003821
Chunk: 78

Company: BioNexus Gene Lab Corp
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 4
Chunk 78
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Evaluation of Disclosure Controls and Procedures

As of March 31, 2025, the Company carried out an evaluation under the supervision and with the participation of its Chief Executive Officer and Acting 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 Acting 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 maintaineffective 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 swiftly identified and investigated governance irregularities at the subsidiary level, demonstrating strong oversight and proactive risk management.

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