VOLITIONRX LTD 10-Q

ITEM 4. CONTROLS AND PROCEDURES Disclosure Controls and Procedures Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including our Principal Executive and Principal Financial Officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management carried out an evaluation under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer have concluded, as they previously concluded as of December 31, 2020, that our disclosure controls and procedures continue to be ineffective as of March 31, 2021, because of material weaknesses in our internal control over financial reporting, as described below and in detail in our Annual Report. Changes in Internal Control over Financial Reporting The Audit Committee of the Board of Directors meets regularly with our financial management, and with the independent registered public accounting firm engaged by us. Internal accounting controls and the quality of financial reporting are discussed during these meetings. The Audit Committee has discussed with the independent registered public accounting firm matters required to be discussed by the auditing standards adopted or established by the Public Company Accounting Oversight Board (“PCAOB”). In addition, the Audit Committee and the independent registered public accounting firm have discussed the independent registered public accounting firm’s independence from the Company and its management, including the matters in the written disclosures required by PCAOB Rule 3526 “ Communicating with Audit Committees Concerning Independence .” As of March 31, 2021, we did not maintain sufficient internal controls over financial reporting in the following areas: · segregation of duties in some areas of Finance; · oversight in the area of IT, where certain processes may affect the internal controls over financial reporting; and · monitoring of review controls with respect to accounting for complex transactions. We have developed, and are currently implementing, a remediation plan for these material weaknesses. Specifically, we have identified and implemented a system for financial reporting that has allowed further automation of the reporting process, thereby strengthening the control environment over financial reporting. As we continue to evaluate and work to enhance our internal controls over financial reporting, we may determine that additional measures should be taken to address these or other control deficiencies, and/or that we should modify our remediation plan considering the Company’s size and growth. There have been no changes in our internal controls over financial reporting that occurred during the fiscal quarter ended March 31, 2021, other than those described above, that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting. Once the Company is engaged in stable business operations and has sufficient personnel and resources available, then our Board of Directors, will establish the following remediation measures to address the aforementioned deficiencies: · additional Finance resources will be recruited to resolve the segregation of duties control weaknesses noted above; · internal audit resources will be contracted to review and advise on control weaknesses across the organization; and · specialist resources in IT and Human Resources will be recruited to recommend and implement relevant policy and processes to strengthen IT and Human Resources internal controls associated with financial reporting. 31 Limitations of the Effectiveness of Disclosure Controls and Internal Controls Our management, including our Principal Executive Officer and Principal Financial Officer, does not expect that our disclosure controls and internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving our stated goals under all potential future conditions; over time, a control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. 32 PART II - OTHER INFORMATION