Company: BGLC
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001477932-25-002725
Chunk: 475

Company: BioNexus Gene Lab Corp
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1A
Chunk 475
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 some of our competitors have extensive portfolios of issued patents. Many potential litigants, including some of our competitors and patent holding companies, have the ability to dedicate substantial resources to enforcing their intellectual property rights. Any claims successfully brought against us could subject us to significant liability for damages and we may be required to stop using technology or other intellectual property alleged to be in violation of a third party’s rights. We also might be required to seek a license for third-party intellectual property. Even if a license is available, we could be required to pay significant royalties or submit to unreasonable terms, which would increase our operating expenses. We may also be required to develop alternative non-infringing technology, which could require significant time and expense. If we cannot license or develop technology for any allegedly infringing aspect of our business, we would be forced to limit our service and may be unable to compete effectively. Any of these results could harm our business.

Risk related to Nasdaq compliance due to board changes.

In 2024, the Company experienced changes in its Board composition, including the resignation of two directors and the appointment of one new independent director. While the Company has taken steps to maintain compliance with Nasdaq’s corporate governance requirements, including reconstituting its committees, there is a risk that future turnover or timing delays in appointments could lead to non-compliance with Nasdaq Listing Rule 5605. Such non-compliance could adversely affect the Company’s continued listing status.

Audit Committee investigation may result in material adjustments or restatements.

We may be required to restate our financial statements or make material adjustments due to ongoing investigations into past governance failures at our Chemrex subsidiary.

Our Audit Committee is actively investigating several historical transactions undertaken including related party transactions, unauthorized remuneration increases. If these investigations reveal breaches of financial controls, policy noncompliance, or accounting errors, we may be required to restate our financial statements, record impairments, or disclose material weaknesses in internal control over financial reporting. Such actions could adversely affect investor confidence, our stock price, and our ability to raise capital.

Internal control deficiencies may persist despite remediation efforts.

Our internal controls over financial reporting may remain deficient due to legacy governance gaps and evolving compliance frameworks.

Specifically, the Company has experienced governance breakdowns, particularly at the subsidiary level, relating to approval processes, documentation, and internal oversight. While management and the Audit Committee have undertaken remediation efforts, including committee reconstitution and internal reviews, these measures may not be sufficient to prevent similar issues from recurring. If we are unable