Company: BGLC
Filing Date: 2025-08-18
Form Type: 10-Q
Source: 0001477932-25-006023
Chunk: 97

Company: BioNexus Gene Lab Corp
Filing Date: 2025-08-18
Form: 10-Q
Item: Part I, Item 2
Chunk 97
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 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 maintain effective 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 oversaw an investigation into certain governance irregularities at the subsidiary level.

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 the following actions:

 ·Implementation of a revised delegation of authority policy at the subsidiary level; ·Reconstitution and strengthening of oversight mechanisms through the Board and Audit Committee; ·Review and ratification of all affected subsidiary transactions by the Audit Committee; ·Initiation of an internal audit of Chemrex procurement and contracting procedures; and ·Re-training accounting staff  on internal control and reporting policies.

The Company expects these remediation measures to be completed during fiscal year 2025. The effectiveness of these controls will be reassessed as part of management’s ongoing internal control evaluation process.

Subsequent to the quarter ended June 30, 2025, and through the date of this report, the Board of Directors implemented targeted remediation measures in response to internal control observations related to the operations of our Chemrex subsidiary. These measures included:

·The appointment of additional directors to the board of Chemrex Corporation Sdn. B