BioNexus Gene Lab Corp (NASDAQ:BGLC), a medical laboratory services provider, reported on Thursday that its recent Annual Meeting, held on Friday, October 4, 2024, may have been influenced by unauthorized proxy solicitation. The company's filing with the Securities and Exchange Commission indicates that the voting on several key proposals did not go as expected.
During the meeting, shareholders re-elected five director nominees to the Board, with the votes cast ranging from 4,119,842 for Muhammad Azrul bin Abdul Hamid to 10,458,424 for Koon Wai Wong. The re-appointment of JP Centurion & Partners PLT as the company's auditor was approved with 10,720,634 votes in favor.
However, two significant proposals did not pass. The 2024 Stock Incentive Plan and an amendment for a reverse stock split of the common stock were both rejected by shareholders. The votes against these proposals were 6,382,176 and 6,378,201, respectively. Additionally, the proposal to adjourn the Annual Meeting if necessary to solicit additional proxies was not approved.
BioNexus Gene Lab suspects that the voting results were affected by a campaign of dissident proxies, which may have included false and misleading statements, conducted by certain shareholders with significant voting power. The company believes that a former officer and director, previously removed by shareholders, was involved in these unauthorized actions.
In response to these events, the company's Board of Directors has authorized a full investigation to be conducted by independent counsel. BioNexus Gene Lab intends to pursue legal action under Wyoming and federal securities laws against all responsible parties if necessary.
In other recent news, BioNexus Gene Lab Corp. has been active in strategic partnerships and investments. The company announced a partnership with Singapore's VITARRAY Global Pte. Ltd. through its subsidiary MRNA Scientific Sdn. Bhd. The collaboration aims to provide mRNA dynamic gene detection services in Southeast Asia, potentially reducing MRNA Scientific's testing costs by over 25%.
BioNexus has also made significant investments through its subsidiary, Chemrex Corporation, committing around $450,000 to initiate color paste production for the composite industry. The new facility, set to begin operations by September 2024, is expected to increase Chemrex's profit margins by bringing production in-house.
Furthermore, the company revised its corporate bylaws, changing the quorum requirement for stockholder meetings from a majority to one-third of the outstanding shares entitled to vote. This change aims to streamline governance processes.
Additionally, BioNexus partnered with Malaysia's Co-Investment Fund (MyCIF) to invest approximately $390,000 in healthcare technology firm Ascension Innovation Sdn Bhd (AISB). This investment supports Malaysia's National Electronic Medical Records Plan and expedite the deployment of AISB's AI-driven healthcare platform, aiCMS.
InvestingPro Insights
Recent financial data from InvestingPro sheds light on BioNexus Gene Lab Corp's (NASDAQ:BGLC) current market position, which may provide context to the recent shareholder meeting outcomes. The company's market capitalization stands at a modest $7.37 million, reflecting its small-cap status. This valuation comes amid challenging financial performance, with revenue declining by 11.35% over the last twelve months to $9.18 million.
InvestingPro Tips highlight that BGLC is "quickly burning through cash" and is "not profitable over the last twelve months," which aligns with the shareholders' rejection of the 2024 Stock Incentive Plan and reverse stock split proposal. These decisions may reflect investor concerns about dilution and financial stability. On a positive note, BGLC "holds more cash than debt on its balance sheet," which could provide some financial flexibility as the company navigates its current challenges.
For investors seeking a more comprehensive analysis, InvestingPro offers 8 additional tips that could provide further insights into BGLC's financial health and market performance.
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