What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2022-03-30 compared with 2021-03-22 · 363 added, 251 removed, 617 unchanged (50% of the section changed)

3 unchanged sentences

For the Years Ended December 31, 2021 and 2020

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets

6 unchanged sentences

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of VolitionRx Limited (“the Company”) as of December 31, 2020 and 2019, the related consolidated statements of operations, stockholders’ deficit, and cash flows for each of the years in the two-year period ended December 31, 2020 and the related notes (collectively referred to as the “financial statements”).

We have audited the accompanying consolidated balance sheets of VolitionRx Limited (“the Company”) as of December 31, 2021 and 2020, the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2021 and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

21 unchanged sentences

(1) related to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgements.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Going Concern

As described further in Note 2 to the financial statements, the Company has incurred losses since inception, has negative cash flows from operations, and has generated minimal revenues.

Accordingly, the Company has determined that these factors raise substantial doubt about its ability to continue as a going concern.

The ability of the Company to continue as a going concern is dependent on its ability to obtain sufficient capital contributions, financing and/or generate revenues.

Management plans to address the concerns as needed by, (a) securing additional grant funds, (b) obtaining additional financing through debt or equity transactions, (c) granting licenses to third parties in exchange for specified up-front and/or back end payments, (d) developing and commercializing its products on an accelerated timeline, and (e) continuing to exercise tight cost controls to conserve cash.

Management has not concluded that these plans alleviate the substantial doubt related to its ability to continue as a going concern.

We determined the Company’s ability to continue as a going concern is a critical audit matter due to the estimation and uncertainty regarding the Company’s available capital and the risk of bias in management’s judgments and assumptions in their determination.

Our audit procedures related to the following:

· We performed testing procedures such as analytical procedures to identify conditions and events that indicate there could be substantial doubt about the entity's ability to continue as a going concern for a reasonable period of time.

· We reviewed and evaluated management's plans for dealing with adverse effect of these conditions and events.

· We inquired of Company management and reviewed company records to assess whether there are additional factors that contribute to the uncertainties disclosed.

· We assessed whether the Company’s determination that there is substantial doubt about its ability to continue as a going concern was adequately disclosed.

We determined that there are no critical audit matters.

/s/ Sadler, Gibb & Associates, LLC

29 unchanged sentences

STOCKHOLDERS’ EQUITY

100,000,000 shares of common stock, at $0.001 par value

Issued and outstanding:

Common Stock Authorized:

100,000,000 shares of common stock, at $ 0.001 par value Issued and outstanding:

53,772,261 shares and 48,607,017 shares, respectively

3 unchanged sentences

( 136,988,636 )

( 110,173,971 )

Total VolitionRx Limited Stockholders’ Equity

7 unchanged sentences

For the year ended

December 31, 2020

December 31, 2019

Total Revenues

5 unchanged sentences

Operating Loss

( 28,333,079 )

( 21,247,815 )

Other Income (Expenses)

Gain on disposal of fixed assets

(Loss)/Gain on disposal of fixed assets

Interest income

Interest expense

Other expenses

Total Other Income (Expenses)

( 26,989,781 )

( 20,399,294 )

Net Loss attributable to Non-Controlling Interest

Net Loss attributable to VolitionRx Limited Stockholders

( 26,814,665 )

( 20,352,115 )

Other Comprehensive Income (Loss)

1 unchanged sentence

Net Comprehensive Loss

Net Loss Per Share – Basic and Diluted

( 26,781,477 )

( 20,584,942 )

Net Loss Per Share – Basic and Diluted attributable to VolitionRx Limited Stockholders

Weighted Average Shares Outstanding

5 unchanged sentences

(Expressed in United States Dollars, except share numbers)

Comprehensive

Income (Loss)

Accumulated Other

Comprehensive Income

Balance, December 31, 2019

Common stock issued in exercise of stock options

Common stock issued in exercise of warrants

Common stock issued in public offering, net

( 89,821,856 )

Common stock issued for Director compensation in Volition Germany

Common stock repurchase and retirement

Common stock issued for exercise of stock options

Common stock issued for exercise of warrants

Common stock issued in public offerings, net

Tax withholdings paid related to stock-based compensation

Stock-based compensation

Modification of financing warrants

Foreign currency translation

Net loss for the Year

( 20,352,115 )

( 20,399,294 )

Balance, December 31, 2020

Common stock issued for Director compensation in Volition Germany

Common stock repurchase and retirement

Common stock issued in exercise of stock options

Common stock issued for exercise of warrants

Common stock issued in public offering, net

( 110,173,971 )

Common stock issued for cashless exercise of stock options

Common stock issued for settlement of RSUs

Common stock issued in public offerings, net

Tax withholdings paid related to stock-based compensation

Stock-based compensation

Stock-based compensation in relation to modification of options

Foreign currency translation

Net loss for the Year

( 26,814,665 )

( 26,989,781 )

Balance, December 31, 2021

5 unchanged sentences

For the year ended

December 31, 2020

December 31, 2019

Operating Activities:

( 26,989,781 )

( 20,399,294 )

Adjustments to reconcile net loss to net cash used in operating activities:

1 unchanged sentence

Amortization of operating lease right-of-use assets

Gain on disposal of fixed assets

Loss (Gain) on disposal of fixed assets

Stock based compensation

Common stock issued for Director compensation in Volition Germany

Financing costs for warrants modified

Stock-based compensation in relation to modification of options

Changes in operating assets and liabilities:

6 unchanged sentences

Net Cash Used In Operating Activities

( 20,853,919 )

( 16,464,244 )

Investing Activities:

2 unchanged sentences

Net Cash Used In Investing Activities

( 1,647,748 )

Financing Activities:

16 unchanged sentences

Non-Cash Financing Activities:

Common Stock issued on cashless exercises of stock options and warrants

Common Stock issued on exercises of stock options and warrants and settlement of RSUs

Loan payable for purchase of manufacturing building

15 unchanged sentences

The number of shares outstanding and per share amounts of the Company have been restated to recognize the foregoing recapitalization.

The Company’s principal business objective through its subsidiaries is to develop and bring to market simple, easy to use, cost effective blood tests designed to help diagnose and monitor a range of life-altering diseases, including some cancers and diseases associated with NETosis such as sepsis and COVID-19.

The tests are based on the science of Nucleosomics TM , which is the practice of identifying and measuring nucleosomes in the bloodstream or other bodily fluid – an indication that disease is present.

The Company has one wholly owned subsidiary, Singapore Volition.

Singapore Volition has one wholly owned subsidiary, Belgian Volition SRL, a Belgium private limited liability company formerly known as ValiBioSA (“Belgian Volition”), which it acquired as of September 22, 2010.

Belgian Volition has four subsidiaries, Volition Diagnostics UK Limited (“Volition Diagnostics”), which was formed as of November 13, 2015, Volition America, Inc.

(“Volition America”), which was formed as of February 3, 2017, Volition Germany GmbH (“Volition Germany”), which was acquired as of January 10, 2020, as well as its majority-owned subsidiary Volition Veterinary Diagnostics Development LLC, (“Volition Vet”), which was formed as of June 3, 2019.

The Company has two wholly owned subsidiaries, Volition Global Services SRL (“Volition Global”) which was formed in August 2021 and Singapore Volition.

Singapore Volition has one wholly owned subsidiary, Belgian Volition SRL, a Belgium private limited liability company (“Belgian Volition”), which it acquired in September 2010.

Belgian Volition has four subsidiaries, Volition Diagnostics UK Limited (“Volition Diagnostics”), which was formed in November 2015, Volition America, Inc.

(“Volition America”), which was formed in February 2017, Volition Germany GmbH (“Volition Germany”), which was acquired in January 2020, as well as its majority-owned subsidiary Volition Veterinary Diagnostics Development LLC, (“Volition Vet”), which was formed in June 2019.

Following the acquisition of Singapore Volition in 2011, the Company’s fiscal year end was changed from August 31 to December 31.

Note 2 - Going Concern

The Company's consolidated financial statements are prepared using accounting principles generally accepted in the United States of America, or U.S.

The Company’s consolidated financial statements are prepared using accounting principles generally accepted in the United States of America (“U.S.

GAAP”), applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business.

2 unchanged sentences

Management plans to address the above as needed by, (a) securing additional grant funds, (b) obtaining additional financing through debt or equity transactions;

(c) granting licenses to third parties in exchange for specified up-front and/or back end payments, and (d) developing and commercializing its products on an accelerated timeline.

(c) granting licenses and/or distribution rights to third parties in exchange for specified up-front and/or back-end payments, and (d) developing and commercializing its products on an accelerated timeline.

Management continues to exercise tight cost controls to conserve cash.

19 unchanged sentences

Principles of Consolidation

The accompanying consolidated financial statements for the year ended December 31, 2020 include the accounts of the Company and its subsidiaries, Singapore Volition, Belgian Volition, Volition Diagnostics UK, Volition Germany, Volition America, and Volition Vet.

See Note 10(f) for more information regarding Volition Vet and Volition Germany.

The accompanying consolidated financial statements for the year ended December 31, 2021 include the accounts of the Company and its subsidiaries, Singapore Volition, Belgian Volition, Volition Diagnostics UK Limited, Volition Germany, Volition America, Volition Vet, and Volition Global Services SRL.

See Note 10(f) for more information regarding Volition Vet, Volition Germany, Volition America and Singapore Volition.

All intercompany balances and transactions have been eliminated in consolidation.

47 unchanged sentences

The Company believes that the recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.

Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not.

The Company has adopted ASC 740, “Accounting for Income Taxes,” as of its inception.

Pursuant to ASC 740, the Company is required to compute tax asset benefits for net operating losses carried forward.

The potential benefits of net operating losses have not been recognized in these consolidated financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.

Refer to Note 9 for further details.

Other Comprehensive Income (Loss)

ASC 220, “ Other Comprehensive Income/(Loss)”, establishes standards for the reporting and display of other comprehensive loss and its components in the financial statements.

As of December 31, 2021, the Company had $ 148,326 of accumulated other comprehensive income, relating to foreign currency translation.

VOLITIONRX LIMITED

3 unchanged sentences

Note 3 - Summary of Significant Accounting Policies (continued)

Other Comprehensive Income (Loss)

ASC 220, “ Other Comprehensive Income/(Loss)”, establishes standards for the reporting and display of other comprehensive loss and its components in the financial statements.

As of December 31, 2020, the Company had $59,978 of accumulated other comprehensive income, relating to foreign currency translation.

Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not.

The Company has adopted ASC 740, “Accounting for Income Taxes” as of its inception.

Pursuant to ASC 740, the Company is required to compute tax asset benefits for net operating losses carried forward.

Refer to Note 9 for further details.

Revenue Recognition

7 unchanged sentences

and (v) recognize revenues when (or as) the Company satisfies the performance obligation(s).

The Company generates revenue from its license agreement with Active Motif, Inc.

(“Active Motif”) for the sale of ROU kits from which the Company receives royalties.

The Company generates product revenues from the sale of its Nu.Q ® Vet Cancer Screening Test, from the sale of nucleosomes, and from the sale of research use only kits.

In addition, revenue is received from external third parties for services the Company performs for them in its laboratory.

The Company also generates product revenues from the sale of its Nu.Q ® Vet Cancer Screening Test and from the sale of nucleosomes.

Revenues, and their respective treatment for financial reporting purposes under ASC 606, are as follows:

3 unchanged sentences

In accordance with ASC 606, the Company records these revenues based on estimates of the net sales that occurred during the relevant period from the licensee.

The relevant period estimates of these royalties are based on preliminary gross sales data provided by Active Motif and analysis of historical gross-to-net adjustments.

Differences between actual and estimated royalty revenues are adjusted for in the period in which they become known.

39 unchanged sentences

The Company recognizes grant income once claims submitted are approved and funds are received.

General working capital funding received at the commencement of a project is treated as deferred income until it has been utilized for the expenditure claimed.

General working capital funding received at the commencement of a project is treated as deferred income and is recorded in accrued liabilities until it has been utilized for the expenditure claimed.

Funding received that is repayable is shown as a liability.

8 unchanged sentences

COVID-19 Pandemic Impact

On March 11, 2020, the World Health Organization designated the outbreak of the novel strain of coronavirus known as COVID-19 as a global pandemic.

Governments and businesses around the world have taken unprecedented actions to mitigate the spread of COVID-19, including, but not limited to, shelter-in-place orders, quarantines, significant restrictions on travel, as well as restrictions that prohibit many employees from going to work.

Uncertainty with respect to the economic impacts of the pandemic has introduced significant volatility in the financial markets.

The Company did not observe significant impacts on its business or results of operations for the twelve months ended December 31, 2020 due to the global emergence of COVID-19.

While the extent to which COVID-19 impacts the Company’s future results will depend on future developments, the pandemic and associated economic impacts could result in a material impact to the Company’s future financial condition, results of operations and cash flows .

The extent to which the COVID-19 pandemic will impact the Company’s business, financial condition, and results of operations in the future is highly uncertain and will be affected by a number of factors.

These include the duration and extent of the COVID-19 pandemic, the development of new variants of the COVID-19 virus that may be more contagious or virulent than previous versions, the scope of mandated or recommended containment and mitigation measures, the effect of government stabilization and recovery efforts, and the success of vaccine distribution programs.

VOLITIONRX LIMITED

Notes to Consolidated Financial Statements

For Years Ended December 31, 2021 and 2020

($ expressed in United States Dollars)

Note 4 - Property and Equipment

The Company’s property and equipment consist of the following amounts as of December 31, 2021 and December 31, 2020:

December 31, 2020

Computer hardware and software

3 unchanged sentences

Not amortized

December 31, 2019

Computer hardware and software

3 unchanged sentences

Not amortized

The majority of capital expenditures in 2020 are related to purchasing a new manufacturing facility of $0.8 million, manufacturing building improvements of $0.6 million, and laboratory equipment of $1.0 million.

During the year ended December 31, 2021, the total capital expenditure was $ 1 .0 million, the majority of which were purchases of laboratory equipment of $ 0.7 million.

During the years ended December 31, 2021 and December 31, 2020, the Company recognized $ 812,109 and $ 627,555 , respectively, in depreciation expense.

7 unchanged sentences

The patents are being amortized over the assets’ estimated useful lives, which range from 8 to 20 years.

December 31, 2020

December 31, 2019

During the years ended December 31, 2021 and December 31, 2020, the Company recognized $ 91,645 and $ 88,626 , respectively, in amortization expense.

14 unchanged sentences

As of December 31, 2021, the Company was authorized to issue 100 million shares of common stock par value $0.001 per share, of which 53,772,261 and 48,607,017 shares were issued as of December 31, 2021 and December 31, 2020, respectively.

Issuances Upon Warrant and Option Exercises

From January 7, 2020 to August 17, 2020, 97,500 stock options were exercised to purchase shares of common stock at $2.50 per share in cashless exercises that resulted in the issuance of 30,033 shares of common stock.

From January 7, 2020 to August 17, 2020, 97,500 stock options were exercised to purchase shares of common stock at $3.00 per share in cashless exercises that resulted in the issuance of 16,539 shares of common stock.

On January 7, 2020, 35,000 stock options were exercised to purchase shares of common stock at $4.00 per share in cashless exercises that resulted in the issuance of 6,486 shares of common stock.

From February 24, 2020 to September 2, 2020, 11,599 stock options were exercised to purchase shares of common stock at $2.35 per share in cashless exercises that resulted in the issuance of 2,752 shares of common stock.

From July 16, 2020 to August 10, 2020, 210,000 stock options were exercised to purchase shares of common stock at $2.50 per share in cashless exercises and withholding of shares for taxes that resulted in the issuance of 39,197 shares of common stock.

From July 21, 2020 to August 12, 2020, 210,000 stock options were exercised to purchase shares of common stock at $3.00 per share in cashless exercises and withholding of shares for taxes that resulted in the issuance of 22,261 shares of common stock.

On August 12, 2020, 15,000 stock options were exercised to purchase shares of common stock at $2.50 per share that resulted in the issuance of 15,000 shares of common stock for proceeds to the Company of $37,500.

On August 12, 2020, 15,000 stock options were exercised to purchase shares of common stock at $3.00 per share that resulted in the issuance of 15,000 shares of common stock for proceeds to the Company of $45,000.

On September 18, 2020, 25,000 warrants were exercised to purchase shares of common stock at $2.47 per share that resulted in the issuance of 25,000 shares of common stock for proceeds to the Company of $61,750.

Stock Issuance for Services

On January 9, 2020, 73,263 shares were issued as fully paid shares of common stock valued at $333,969 as compensation to a managing director of Volition Germany (see Note 10(f)).

Stock Repurchase

On January 12, 2020, the Company purchased from its Chief Medical Officer 11,364 shares of our common stock at $4.79 per share, for a total cost to the Company of $54,434.

These shares were subsequently retired.

Stock Option Exercises

During the year ended December 31, 2021 we issued a total of 77,451 shares of common stock from the cashless exercise of options, as follows:

Stock Incentive

Stock Options

Price Per Share

Shares Issued

January 13 - March 19, 2021

February 2, 2021

February 8, 2021

February 8 - February 9, 2021

February 8, 2021

Stock Option Exercises

During the year ended December 31, 2020 we issued a total of 147,268 shares of common stock from the exercise of options, as follows:

Stock Incentive

Stock Options

Price Per Share

Shares Issued

February 24 - September 2, 2020

January 7 - August 17, 2020

August 12, 2020

January 7 - August 17, 2020

August 12, 2020

January 7, 2020

VOLITIONRX LIMITED

3 unchanged sentences

Note 7 - Common Stock (continued)

Equity Capital Raise

On May 20, 2020, the Company entered into an underwriting agreement with National Securities Corporation, acting on its own behalf and as representative of the several underwriters, in connection with the public offering, issuance and sale by the Company of 4,365,000 shares of the Company’s common stock, at the public offering price of $2.75 per share, less underwriting discounts and commissions.

Under the terms of the agreement, the Company granted the underwriters an option, exercisable for 30 days from the date of the agreement, to purchase up to 654,750 additional shares of the Company’s common stock to cover overallotments, if any, at the public offering price of $2.75 per share, less underwriting discounts and commissions.

RSU Settlements

During the year ended December 31, 2021 we issued a total of 24,712 shares of common stock from the settlement of RSUs, as follows:

Restricted Stock

Price Settled

Shares Issued

Shares Withheld

January 20, 2021

April 21, 2021

Equity Capital Raises

On February 10, 2021, the Company entered into an underwriting agreement with Cantor Fitzgerald & Co (“Cantor”), in connection with an underwritten public offering of 3,809,524 shares (the “Firm Shares”) of the Company’s common stock, pursuant to the Company’s effective shelf registration statement on Form S-3 (File No.

333-227248) and related prospectuses.

Cantor purchased the Firm Shares from the Company at a price of $ 4.9533 per share on February 12, 2021.

The net proceeds received by the Company for the sale and issuance of the Firm Shares were approximately $ 18.9 million.

Under the terms of the underwriting agreement, the Company granted Cantor an option, exercisable for 30 days, to purchase up to an additional 571,428 shares of common stock at the same price per share as the Firm Shares which option was not exercised.

Equity Capital Raises

On May 20, 2020, the Company entered into an underwriting agreement with National Securities Corporation, acting on its own behalf and as representative of the several underwriters, in connection with the public offering, issuance and sale by the Company of 4,365,000 shares of the Company’s common stock, at the public offering price of $ 2.75 per share (less underwriting discounts and commissions), pursuant to the Company’s effective shelf registration statement on Form S-3 (File No.

333-227248) and related prospectuses.

Under the terms of the underwriting agreement, the Company granted the underwriters an option, exercisable for 30 days to purchase up to 654,750 additional shares of the Company’s common stock to cover overallotments, if any, at the public offering price of $2.75 per share, less underwriting discounts and commissions.

On May 21, 2020, the underwriters exercised the overallotment option in full.

As a result of the equity capital raise, the Company issued a total of approximately 5 million shares for aggregate gross proceeds of $ 13.8 million.

Additionally, in connection with this transaction, $1.1 million was incurred in fees relating to the equity offering, resulting in net proceeds of $12.7 million.

Additionally, in connection with this transaction, $ 1.1 million was incurred in fees relating to the equity offering, resulting in net proceeds to the Company of $ 12.7 million.

VOLITIONRX LIMITED

Notes to Consolidated Financial Statements

For Years Ended December 31, 2021 and 2020

($ expressed in United States Dollars)

Note 7 - Common Stock (continued)

2021 and 2020

Equity Distribution Agreements

On November 10, 2020, the Company entered into an Equity Distribution Agreement (the “2020 EDA”) with Cantor Fitzgerald & Co.

(“Cantor”) and Oppenheimer & Co.

(“Oppenheimer”), to sell shares of its common stock having an aggregate offering price of up to $25,000,000 from time-to-time, through an “at the market offering program” pursuant to the Company’s effective “shelf” registration statement on Form S-3 (File No.

On September 24, 2021, the Company entered into an equity distribution agreement (the “2021 EDA”) with Cantor and Oppenheimer & Co.

(“Oppenheimer”), to sell shares of its common stock having an aggregate offering price of up to $ 25 .0 million from time-to-time, through an “at the market offering program” pursuant to the Company’s effective “shelf” registration statement on Form S-3 (File No.

333-259783) and related prospectuses, through Cantor and Oppenheimer each acting as the Company’s agent and/or principal.

The Company is not obligated to sell any shares under the 2020 EDA.

As of December 31, 2020, the Company had made no sales of common stock under the 2020 EDA.

See Note 11 for details regarding additional sales of common stock under the 2020 EDA after December 31, 2020.

On September 7, 2018, the Company entered into an equity distribution agreement (as amended, the “2018 Equity Distribution Agreement”) with Oppenheimer, which agreement allows it to offer and sell shares of common stock having an aggregate offering price of up to $10.0 million from time-to-time through an “at the market offering program,” pursuant to a shelf registration statement on Form S-3 (declared effective by the SEC on September 28, 2018, File No.333-227248) and related prospectuses, through Oppenheimer acting as the Company’s agent and/or principal.

From inception through December 31, 2020, the Company raised aggregate net proceeds (net of broker’s commissions and fees) of approximately $8.5 million under the 2018 Equity Distribution Agreement through the sale of 2,230,997 shares of its common stock.

For the year ended December 31, 2020, the Company raised aggregate net proceeds (net of broker’s commissions and fees) of approximately $8.5 million under the 2018 Equity Distribution Agreement through the sale of 2,227,797 shares of its common stock.

Additionally, in connection with this transaction $126,492 was incurred in fees relating to the Equity Distribution Agreement.

See Note 11 for details regarding additional sales of common stock under the 2018 Equity Distribution Agreement after December 31, 2020.

Issuances Upon Warrant and Option Exercises

On August 10, 2018, the Company issued to Cotterford Company Limited (“Cotterford”) 5.0 million shares of common stock at a price of $1.80 per share in a private placement offering, for aggregate gross proceeds of $9.0 million.

In connection with the transaction, approximately $0.1 million was incurred for legal and other fees resulting in net proceeds of approximately $8.9 million.

Additionally, the Company issued to Cotterford a warrant to purchase up to an additional 5.0 million shares of common stock at an exercise price of $3.00 per share payable in cash.

This transaction resulted in Cotterford becoming a significant stockholder and therefore a related party in accordance with U.S.

The shares of common stock (including the shares underlying the warrant) were subsequently registered for resale on Form S-3 (declared effective by the SEC on October 15, 2018, File No.

From January 30, 2019 to February 26, 2019, warrants to purchase 754,475 shares of our common stock were exercised at a price of $2.20 per share, for gross proceeds to the Company of approximately $1.66 million.

On March 8, 2019, Cotterford partially exercised its warrant and purchased 1,724,138 shares of our common stock at a price of $2.90 per share, for gross proceeds to the Company of $5.0 million.

The Company was not obligated to sell any shares under the 2021 EDA.

From inception through December 31, 2021, the Company raised aggregate net proceeds (net of broker’s commissions and fees) of approximately $ 0.7 million under the 2021 EDA through the sale of 190,600 shares of its common stock.

The 2021 EDA replaced the 2020 EDA effective as of November 8, 2021.

See Note 11 for additional details regarding the Company’s equity distribution agreements subsequent to December 31, 2021.

On November 10, 2020, the Company entered into an equity distribution agreement (the “2020 EDA”) with Cantor and Oppenheimer to sell shares of its common stock having an aggregate offering price of up to $ 25 .0 million from time-to-time, through an “at the market offering program” pursuant to the Company’s effective “shelf” registration statement on Form S-3 (File No.

333-227248) and related prospectuses, through Cantor and Oppenheimer each acting as the Company’s agent and/or principal.

The Company was not obligated to sell any shares under the 2020 EDA.

During the year ended December 31, 2021 (and from inception of the 2020 EDA), the Company raised aggregate net proceeds (net of broker’s commissions and fees) of $ 2.7 million under the 2020 EDA through the sale of 754,348 shares of its common stock.

No further sales will be made under the 2020 EDA.

On September 7, 2018, the Company entered into an equity distribution agreement (as amended, the “2018 EDA”) with Oppenheimer to sell shares of common stock having an aggregate offering price of up to $ 10 .0 million from time-to-time, through an “at the market offering program” pursuant to the Company’s effective shelf registration statement on Form S-3 (File No 333-227248) and related prospectuses, through Oppenheimer acting as the Company’s agent and/or principal.

From inception through the full utilization of the 2018 EDA during the March 31, 2021 quarter, the Company raised aggregate net proceeds (net of broker’s commissions and fees) of approximately $ 9.7 million under the 2018 EDA through the sale of 2,539,606 shares of its common stock.

During the year ended December 31, 2021, the Company raised aggregate net proceeds (net of broker’s commissions and fees) of $ 1.2 million under the 2018 EDA through the sale of 308,609 shares of its common stock.

During the year ended December 31, 2020, the Company raised aggregate net proceeds (net of broker’s commissions and fees) of $ 8.5 million under the 2018 EDA through the sale of 2,227,797 shares of its common stock.

No further sales will be made under the 2018 EDA.

Issuances Upon Warrant Exercises

For the year ended December 31, 2021 no warrants were exercised.

During the year ended December 31, 2020 a total of 25,000 warrants were exercised to purchase shares of common stock, as follows:

Warrants Exercised

Price Per Share

Shares Issued

September 18, 2020

VOLITIONRX LIMITED

3 unchanged sentences

Note 7 - Common Stock (continued)

2019 (continued)

Issuances Upon Warrant and Option Exercises (continued)

On May 3, 2019, Cotterford partially exercised its warrant and purchased 1,666,667 shares of our common stock at a price of $3.00 per share, for gross proceeds to the Company of $5.0 million.

On July 24, 2019, Cotterford exercised the remainder of its warrant and purchased 1,609,195 shares of our common stock at a price of $3.00 per share, for gross proceeds to the Company of approximately $4.8 million.

From August 20, 2019 to September 20, 2019, 6,166 stock options were exercised to purchase shares of our common stock at $2.35 per share in a cashless exercise that resulted in the issuance of 2,487 shares of our common stock.

On November 15, 2019, 4,167 stock options were exercised to purchase shares of our common stock at $5.00 per share in a cashless exercise that resulted in the issuance of 371 shares of our common stock.

From November 25, 2019 to November 27, 2019, warrants to purchase 29,392 shares of our common stock were exercised at a price of $2.40 per share, for gross proceeds to the Company of $70,541.

Equity Distribution Agreements

For the year ended December 31, 2019, The Company raised aggregate net proceeds (net of broker’s commissions and fees) of $16,547 under the 2018 Equity Distribution Agreement through the sale of 3,200 shares of its common stock.

Stock Issuance for Services

On January 9, 2020, 73,263 shares were issued as fully paid shares of common stock valued at $ 333,969 as compensation to a managing director of Volition Germany (see Note 10(f)).

Stock Repurchase

On January 12, 2020, the Company purchased from its Chief Medical Officer 11,364 shares of its common stock at $ 4.79 per share, for a total cost to the Company of $54,434.

These shares were subsequently retired.

VOLITIONRX LIMITED

Notes to Consolidated Financial Statements

For Years Ended December 31, 2021 and 2020

($ expressed in United States Dollars)

Note 8 - Stock-Based Compensation

6 unchanged sentences

Exercisable at December 31, 2021

VOLITIONRX LIMITED

Notes to Consolidated Financial Statements

For Years Ended December 31, 2020 and 2019

($ expressed in United States Dollars)

Note 8 – Stock-Based Compensation (continued)

a) Warrants (continued)

Effective January 1, 2021, the Company granted warrants to purchase 125,000 shares of common stock to a Company employee for services to the Company.

These warrants vest on January 1, 2022 (subject to continued employment through such date) and expire on January 1, 2027, with an exercise price of $3.95 per share.

The Company has calculated the estimated fair market value of these warrants at $ 242,877 , using the Black-Scholes model and the following assumptions:

term 3.5 years, stock price $3.80, exercise price $3.95, 74.53% volatility, 0.50% risk free rate, and no forfeiture rate.

Effective February 1, 2021, the Company granted warrants to purchase 185,000 shares of common stock to a Company employee for services to the Company.

These warrants vest on February 1, 2022 (subject to continued employment through such date) and expire on February 1, 2027, with an exercise price of $4.90 per share.

The Company has calculated the estimated fair market value of these warrants at $ 459,352 , using the Black-Scholes model and the following assumptions:

term 3.5 years, stock price $ 4.8 0, exercise price $4.90, 75.03 % volatility, 0.59 % risk free rate, and no forfeiture rate.

Effective February 26, 2020, the vesting criteria of the remaining installment of a warrant originally granted March 20, 2013 to an officer of the Company, and previously amended, was deemed met pursuant to the approval of the Compensation Committee, resulting in the vesting of the Warrant as to 125,000 shares effective February 26, 2020, with an expiration date of February 26, 2023.

3 unchanged sentences

term 3.75 years, stock price $ 3.44 , exercise price $3.45, 69.03 % volatility, 0.95 % risk free rate, and no forfeiture rate.

Effective March 5, 2019, the Company entered into an amendment to an outstanding warrant to purchase up to an aggregate of 5.0 million shares of our common stock, originally issued to Cotterford, a significant stockholder, in connection with an equity financing completed on or about August 10, 2018.

The amendment temporarily reduced the exercise price of such warrant from $3.00 per share to $2.90 per share through the close of business on March 8, 2019.

As a result of this amendment, $196,957 of financing costs were recorded in other expenses.

On March 8, 2019, Cotterford partially exercised its warrant and purchased 1,724,138 shares of our common stock at $2.90 per share resulting in gross proceeds to the Company of $5.0 million.

On May 3, 2019, Cotterford partially exercised its warrant and purchased 1,666,667 shares of our common stock at $3.00 per share resulting in gross proceeds of $5.0 million to the Company.

On July 1, 2019, the Company modified the performance criteria for certain vesting milestones on a warrant agreement held by an officer of the Company and as a result the Company re-measured warrants held by the officer, to purchase 125,000 shares of common stock at an exercise price of $2.47 per share, resulting in $11,829 of additional warrant expense to be recorded over the vesting period.

These warrants vest on achievement of certain business objectives and expire 3 years from the date of vesting.

On July 24, 2019, Cotterford exercised the remainder of its warrant and purchased 1,609,195 shares of our common stock at $3.00 per share resulting in gross proceeds of $4.8 million to the Company.

During the year 2019, warrants to purchase an aggregate of 5,783,067 shares of our common stock were exercised (including the exercises by Cotterford referenced above) for gross cash proceeds to the Company of approximately of $16.6 million.

VOLITIONRX LIMITED

4 unchanged sentences

a) Warrants (continued)

Below is a table summarizing the warrants issued and outstanding as of December 31, 2020, which have a weighted average exercise price of $2.47 per share and an aggregate weighted average remaining contractual life of 3.01 years.

Below is a table summarizing the warrants issued and outstanding as of December 31, 2021.

The warrants outstanding have a weighted average price of $3.88 per share and an aggregate weighted average remaining contractual life of 3.96 years.

The warrants exercisable have a weighted average price of $2.75 per share.

Weighted Average

2 unchanged sentences

As of December 31, 2021, the total intrinsic value of warrants was $ 83,750 .

The Company currently has options outstanding under both its 2011 Equity Incentive Plan (the “2011 Plan”) (for option issuances prior to 2016) and its 2015 Plan (for option issuances commencing in 2016).

The Company currently has options outstanding under both its 2011 Equity Incentive Plan (the “2011 Plan”) (for option issuances prior to 2016,) and its 2015 Stock Incentive Plan (the “2015 Plan”) (for option issuances commencing in 2016).

Effective as of January 1, 2016, no additional awards were or may be made under the 2011 Plan.

3 unchanged sentences

On June 15, 2018, the Board of Directors adopted a subsequent amendment to the 2015 Plan to increase the number of shares of common stock available for issuance under such Plan by 750,000 shares to an aggregate maximum of 3,250,000 shares, which amendment was approved by the stockholders at an annual meeting held on September 7, 2018.

On March 27, 2019, the Board of Directors adopted a subsequent amendment to the 2015 Plan to increase the number of common stock available for issuance under the Plan by 1,000,000 shares to an aggregate maximum of 4,250,000 shares, which amendment was approved by the stockholders at an annual meeting held on June 14, 2019.

The 2015 Plan permits the grant of incentive stock options, non-statutory stock options, restricted stock awards, stock bonus awards, stock appreciation rights, restricted stock units and performance awards.

The primary purpose of the 2015 Plan is to enhance the Company’s ability to attract and retain the services of qualified employees, officers, directors, consultants and other service providers upon whose judgment, initiative and efforts the successful conduct and development of the Company’s business largely depends, and to provide additional incentives to such persons or entities to devote their utmost effort and skill to the advancement and betterment of the Company, by providing them an opportunity to participate in the ownership of the Company that is tied to the Company’s performance, thereby giving them an interest in the success and increased value of the Company.

The 2015 Plan is administered by the Compensation Committee comprised solely of members of the Board of Directors or by the Board of Directors as a whole.

On March 27, 2019, the Board of Directors adopted a subsequent amendment to the 2015 Plan to increase the number of shares of common stock available for issuance under such Plan by 1,000,000 shares to an aggregate maximum of 4,250,000 shares, which amendment was approved by the stockholders at an annual meeting held on June 14, 2019.

On March 31, 2021, the Board of Directors adopted a subsequent amendment to the 2015 Plan to increase the number of shares of common stock available for issuance under such Plan by 1,750,000 shares to an aggregate maximum of 6,000,000 shares, which amendment was approved by the stockholders at an annual meeting held on June 17, 2021.

VOLITIONRX LIMITED

4 unchanged sentences

b) Options (continued)

The 2015 Plan is administered by the Compensation Committee comprised solely of members of the Board of Directors or by the Board of Directors as a whole.

The following table summarizes the changes in options outstanding of the Company during the years ended December 31, 2021 and December 31, 2020:

7 unchanged sentences

Exercisable at December 31, 2021

Effective April 13, 2020, the Company granted stock options to purchase 835,000 shares of common stock to various Company personnel (including directors, executives, members of management and employees) in exchange for services provided to the Company.

These options vest on April 13, 2021 and expire 5 years after the vesting date, with an exercise price of $3.60 per share.

Effective May 20, 2021, the Company granted stock options to purchase 40,000 shares of common stock to a Company employee in exchange for services provided to the Company.

These options vest on May 20, 2022 and were initially scheduled to expire six years after the grant date, with an exercise price of $3.60 per share.

The Company extended the expiration date to ten years after the original grant date.

The Company has calculated the estimated fair market value of these options at $ 73,641 , using the Black-Scholes model and the following assumptions:

term 3.5 years, stock price $ 3.50 , exercise price $3.60, 76.16 % volatility, 0.58 % risk free rate, and no forfeiture rate.

Effective December 1, 2020, the Company granted stock options to purchase 10,000 shares of common stock to a Company employee for services to the Company.

These options vest on December 1, 2021 and expire 5 years after the vesting date, with an exercise price of $3.40 per share.

VOLITIONRX LIMITED

Notes to Consolidated Financial Statements

For Years Ended December 31, 2021 and 2020

($ expressed in United States Dollars)

Note 8 - Stock-based Compensation (continued)

b) Options (continued)

During the year ended December 31, 2021, the Company modified a total of 3,342,518 options to extend their expiration dates to ten years from the original dates of grant.

This resulted in $ 2,450,349 of expense.

The following table summarizes the amendments to the expiration dates of various options approved during the year ended December 31, 2021.

Except as otherwise noted, the expiration dates for all options in the table below were extended from six years to ten years from the original date of grant.

Equity Incentive

Stock Options

New Expiration

Option Expense

July 14, 2021

July 23, 2015

July 23, 2025

July 14, 2021

March 20, 2013

March 20, 2023

July 14, 2021

September 2, 2013

September 2, 2023

September 21, 2021

April 13, 2020

April 13, 2030

September 21, 2021

January 23, 2018

January 23, 2028

September 21, 2021

February 13, 2017

February 13, 2027

November 3, 2021

April 15, 2016

April 15, 2026

November 3, 2021

June 23, 2016

June 23, 2026

November 3, 2021

January 1, 2017

January 1, 2027

November 3, 2021

March 30, 2017

March 30, 2027

November 3, 2021

January 23, 2018

January 23, 2028

December 8, 2021

April 13, 2020

April 13, 2030

December 8, 2021

December 1, 2020

December 1, 2030

December 8, 2021

The expiration date of these options were extended from five and a half years to ten years from the original date of grant.

These options were previously amended on December 16, 2019 and amended again on September 21, 2021.

VOLITIONRX LIMITED

Notes to Consolidated Financial Statements

For Years Ended December 31, 2021 and 2020

($ expressed in United States Dollars)

Note 8 - Stock-based Compensation (continued)

b) Options (continued)

Effective August 3, 2021, the Company approved the granting of options under the 2015 Stock Incentive Plan vesting upon achievement of certain corporate goals (see additional details in Note 10(h)).

Pursuant to this approval, the Company granted stock options to purchase an aggregate of 926,640 shares of common stock to various personnel (including directors, executives, members of management and employees of the Company and/or its subsidiaries) in exchange for services provided to the Company and/or its subsidiaries.

These options vest over two years with options to purchase up to 463,328 shares vesting on August 3, 2022, and options to purchase up to 463,312 shares vesting on August 3, 2023, subject to continued service by the optionee, and expire 10 years from the date of grant with an exercise price of $3.40 per share.

The actual number of options that are eligible for the time-based vesting is contingent upon the timely achievement of certain pre-determined corporate goals by the Company and/or its subsidiaries as set forth in the grant documents.

The Company has calculated the estimated fair market value of these options at $ 1,811,216 , using the Black-Scholes model and the following assumptions:

term 5.5 years, stock price $ 3.31 , exercise price $ 3.40 , 69.13 % volatility, 1.19 % risk free rate, and no forfeiture rate.

Effective February 11, 2019, the Company granted stock options to purchase 730,000 shares of our common stock to various Company personnel (including directors, executives, members of management and employees) for services to the Company.

These options vested on February 11, 2020 and expire 5 years after the vesting date, with an exercise price of $3.25 per share.

Effective September 7, 2021, the Company granted stock options to purchase 50,000 shares of common stock to two employees in exchange for services provided to the Company and/or its subsidiaries.

These options vest over two years with 25,000 shares vesting on September 7, 2022, and 25,000 shares vesting on September 7, 2023 subject to continued service by the optionee, and expire 10 years from the date of grant with an exercise price of $3.40 per share.

The Company has calculated the estimated fair market value of these options at $ 98,322 , using the Black-Scholes model and the following assumptions:

term 5.5 years, stock price $ 3.32 , exercise price $ 3.40 , 68.98 % volatility, 1.38 % risk free rate, and no forfeiture rate.

Subsequent to the February 2019 grant, stock options to purchase 45,000 shares of common stock subject to the grant were forfeited.

Effective October 4, 2021, the Company approved the granting of options under the 2015 Plan vesting upon achievement of certain corporate goals (see additional details in Note 10 (h)).

Pursuant to this approval the Company granted stock options to purchase 73,360 shares of common stock to an employee in exchange for services provided to the Company and/or its subsidiaries.

These options vest over two years with 36,680 shares vesting on October 4, 2022, and 36,680 shares vesting on October 4, 2023, subject to continued service by the optionee, and expire 10 years from the date of grant with an exercise price of $3.40 per share.

The Company has calculated the estimated fair market value of these options at $ 128,003 , using the Black-Scholes model and the following assumptions:

term 5.5 years, stock price $ 3.04 , exercise price $ 3.40 , 68.80 % volatility, 1.49 % risk free rate, and no forfeiture rate.

These options vested on April 13, 2021 and were initially scheduled to expire 6 years after the grant date, with an exercise price of $3.60 per share.

In 2021, the Company extended the expiration date to ten years after the original grant date for the remaining outstanding options.

The Company has calculated the estimated fair market value of these options at $ 1,481,709 , using the Black-Scholes model and the following assumptions:

term 3.5 years, stock price $ 3.52 , exercise price $3.60, 72.94 % volatility, 0.54 % risk free rate, and no forfeiture rate.

Effective December 1, 2020, the Company granted stock options to purchase 10,000 shares of common stock to a Company employee for services to the Company.

These options vested on December 1, 2021 and were initially scheduled to expire 6 years after the grant date, with an exercise price of $3.40 per share.

In 2021, the Company extended the expiration date to ten years after the original grant date.

The Company has calculated the estimated fair market value of these options at $ 16,315 using the Black-Scholes model and the following assumptions:

term 3.5 years, stock price $ 3.30 , exercise price $3.40, 71.60 % volatility, 0.55% risk free rate, and no forfeiture rate.

Below is a table summarizing the options issued and outstanding as of December 31, 2021, all of which were issued pursuant to the 2011 Plan (for option issuances prior to 2016) or the 2015 Plan (for option issuances commencing in 2016)and which have a weighted average exercise price of $ 3.87 per share and an aggregate weighted average remaining contractual life of 6.25 years.

VOLITIONRX LIMITED

4 unchanged sentences

b) Options (continued)

Below is a table summarizing the options issued and outstanding as of December 31, 2020, all of which were issued pursuant to the 2011 Plan (for option issuances prior to 2016) or the 2015 Plan (for option issuances commencing in 2016) and which have a weighted average exercise price of $4.00 per share and an aggregate weighted average remaining contractual life of 2.98 years .

As of December 31, 2020, an aggregate of 251,867 shares of common stock remained available for future issuance under the 2015 Plan.

Weighted Average

Contractual Life

Stock-based compensation expense related to stock options of $1,220,165 and $1,458,607 were recorded for the years ended December 31, 2020 and December 31, 2019 respectively.

Stock-based compensation expense related to stock options of $ 1,069,605 and $ 1,220,165 was recorded for the year ended December 31, 2021 and December 31, 2020 respectively.

Total remaining unrecognized compensation cost related to non-vested stock options is approximately $ 1,458,282 and is expected to be recognized over a period of 1.76 years.

As of December 31, 2020, the total intrinsic value of stock options was $688,489.

As of December 31, 2021, the total intrinsic value of stock options was $nil.

As of December 31, 2021, an aggregate of 374,352 shares of common stock remained available for future issuance under the 2015 Plan.

c) Restricted Stock Units (RSUs)

Below is a table summarizing the RSUs issued and outstanding as of December 31, 2021, all of which were issued pursuant to the 2015 Stock Incentive Plan.

Effective April 13, 2020, the Company granted RSUs of 52,500 shares of common stock to various Company personnel (including a director and an employee) in exchange for services provided to the Company.

These RSUs vest over 2 years, with 50% vesting on each of April 13, 2021 and April 13, 2022 and will result in total compensation expense of $184,800.

Weighted Average

Exercise Price

Outstanding at December 31, 2019

Outstanding at December 31, 2020

Outstanding at December 31, 2021

VOLITIONRX LIMITED

4 unchanged sentences

c) Restricted Stock Units (RSUs) (continued)

Effective January 1, 2021, the Company granted RSUs of 5,000 shares of common stock to a Company employee in exchange for services provided to the Company.

These RSUs vested immediately, on January 1, 2021 and resulted in the issuance of 3,000 shares (the remaining 2,000 shares were withheld for taxes and returned as authorized shares under the 2015 Plan) and total compensation expense of $ 19,450 .

Effective March 25, 2021, the Company granted aggregate RSUs of 30,000 shares of common stock to two non-executive directors in exchange for services provided to the Company.

These RSUs vest over two years, with 50 % vesting on each of March 25, 2022 and March 25, 2023, subject to continued service, and will result in total compensation expense of $ 107,700 .

On March 25, 2021, 15,000 RSUs previously granted to a non-executive director were cancelled and returned as authorized shares under the 2015 Plan upon the resignation of such director prior to vesting.

On April 13, 2021, 26,250 RSUs vested and resulted in the issuance of 21,712 shares (the remaining 4,538 shares were withheld for taxes and returned as authorized shares under the 2015 Plan).

Effective May 1, 2021, the Company granted RSUs of 150,000 shares of common stock to an employee in exchange for services provided to the Company.

These RSUs vest over three years with 50,000 units vesting on each of May 1, 2022, May 1, 2023 and May 1, 2024, respectively, subject to continued service, and will result in total compensation expense of $ 496,500 .

Effective August 3, 2021, the Company approved the granting of RSUs under the 2015 Plan vesting upon achievement of certain corporate goals (see additional details in Note 10(h)).

Pursuant to this approval, the Company granted RSUs of 460,191 shares of common stock to various personnel (including directors, executives, members of management and employees of the Company and/or its subsidiaries) in exchange for services provided to the Company and/or its subsidiaries.

The actual number of RSUs that are eligible for the time-based vesting is contingent based upon the timely achievement of certain pre-determined corporate goals by the Company and/or its subsidiaries as set forth in the grant documents as well as continued service by the participant through the applicable vesting date.

The RSUs eligible for vesting shall vest over two years with up to 230,102 units vesting on August 3, 2022, and up to 230,089 units vesting on August 3, 2023 and will result in total compensation expense of $ 1,523,232 .

Effective September 7, 2021, the Company granted RSUs of 38,000 shares of common stock to various employees of the Company and/or its subsidiaries in exchange for services provided to the Company and/or its subsidiaries.

These RSUs vest over two years with 19,000 units vesting on September 7, 2022, and 19,000 units vesting on September 7, 2023, subject to continued service and will result in total compensation expense of $ 126,160 .

Effective October 4, 2021, the Company approved the granting of RSUs under the 2015 Plan vesting upon achievement of certain corporate goals (see additional details in Note 10 (h)).

Pursuant to this approval, the Company granted RSUs of 39,809 shares of common stock to an employee of the Company and/or its subsidiaries in exchange for services provided to the Company and/or its subsidiaries.

These RSUs vest over two years with 19,905 units vesting on October 4, 2022, and 19,904 units vesting on October 4, 2023, subject to continued service by the participant through the applicable vesting dates, and will result in total compensation expense of $ 121,019 .

Effective November 1, 2021, the Company granted RSUs of 43,500 shares of common stock to an employee of the Company and/or its subsidiaries in exchange for services provided to the Company and/or its subsidiaries.

These RSUs vest over two years with 21,750 units vesting on November 1, 2022, and 21,750 units vesting on November 1, 2023, subject to continued service and will result in total compensation expense of $ 152,685 .

Effective December 15, 2021, the Company granted RSUs of 23,000 shares of common stock to various employees of the Company and/or its subsidiaries in exchange for services provided to the Company and/or its subsidiaries.

These RSUs vest over two years with 11,500 units vesting on December 15, 2022, and 11,500 units vesting on December 15, 2023, subject to continued service and will result in total compensation expense of $ 77,740 .

VOLITIONRX LIMITED

Notes to Consolidated Financial Statements

For Years Ended December 31, 2021 and 2020

($ expressed in United States Dollars)

Note 8 - Stock-Based Compensation (continued)

c) Restricted Stock Units (RSUs) (continued)

These RSUs vest over two years, with 50 % vesting on each of April 13, 2021 and April 13, 2022 and will result in total compensation expense of $ 184,800 .

Effective December 1, 2020, the Company granted RSUs of 15,000 shares of common stock to a non-executive director of the Company in exchange for services provided to the Company.

These RSUs vest over 2 years, with 50% vesting on each of December 1, 2021 and December 1, 2022 and will result in total compensation expense of $49,500.

Weighted Average

Exercise Price

Outstanding at December 31, 2019

Outstanding at December 31, 2020

Below is a table summarizing the RSUs issued and outstanding as of December 31, 2020 and which have an aggregate weighted average remaining contractual life of 0.92 years.

These RSUs vest over two years, with 50 % vesting on each of December 1, 2021 and December 1, 2022 and will result in total compensation expense of $ 49,500 .

Below is a table summarizing the RSUs issued and outstanding as of December 31, 2021 of which the last to vest have a remaining contractual life of 2.33 years.

Weighted Average

Contractual Life

Stock-based compensation expense related to RSUs of $102,786 and $nil was recorded in the year ended December 31, 2020, and December 31, 2019, respectively.

Stock-based compensation expense related to RSUs of $ 898,910 and $ 102,786 was recorded in the year ended December 31, 2021, and December 31, 2020, respectively.

Total remaining unrecognized compensation cost related to non-vested RSUs is $ 1,807,140 .

5 unchanged sentences

Note 9 - Income Taxes

The Company has estimated net operating losses for the years ended December 31, 2020 and 2019 of $24.0 million and $17.3 million, respectively, available to offset taxable income in future years.

The Company has estimated net operating losses carry-forward for the years ended December 31, 2021 and 2020 of $ 24.4 million and $ 24.0 million, respectively, available to offset taxable income in future years.

The significant components of deferred income taxes and assets as of December 31, 2021 and December 31, 2020 are as follows:

Net Deferred Tax Liability

December 31, 2020

December 31, 2019

Net Deferred Tax Asset

Excess of tax over book depreciation and amortization

Lease Liability

Prepaid expenses

Allowance for doubtful accounts

Accrued expenses

Unrealized Gain/Loss

Stock-based compensation

3 unchanged sentences

Valuation allowance

( 25,297,640 )

( 24,427,500 )

Net deferred tax asset

1 unchanged sentence

Summary Rate Reconciliation

December 31, 2020

December 31, 2019

Federal statutory rate

7 unchanged sentences

Disclosure Amounts

December 31, 2020

Net Operating Losses - United States

48 unchanged sentences

c) Grants Repayable

In 2010, the Company entered into an agreement with the Walloon Region government in Belgium for a colorectal cancer research grant for €1.05 million.

In 2010, the Company entered into an agreement with the Walloon Region government in Belgium for a colorectal cancer research grant for € 1,048,020 .

Per the terms of the agreement, € 314,406 of the grant is to be repaid by installments over the period from June 30, 2014 to June 30, 2023.

8 unchanged sentences

As of December 31, 2021, the grant balance repayable was $ 122,116 .

As of December 31, 2020, the balance repayable was $328,821 and the annual payments remaining were as follows:

Greater than 5 years

Total Grants Repayable

In 2020, the Company entered into an agreement with the Walloon Region government in Belgium for a research grant for € 495,000 .

Per the terms of the agreement, € 148,500 of the grant is to be repaid by installments over 10 years commencing in 2023.

In the event that the Company receives revenue from products or services as defined in the agreement, it is due to pay a 2.89% royalty on such revenue to the Walloon Region.

The maximum amount payable to the Walloon Region, in respect of the aggregate of the amount repayable of €148,500 and the 2.89% royalty on revenue, is equal to the amount of funding received.

As of December 31, 2021, the grant balance repayable was $ 58,800 .

VOLITIONRX LIMITED

3 unchanged sentences

Note 10 – Commitments and Contingencies (continued)

c) Grants Repayable (continued)

In 2020, the Company entered into an agreement with the Walloon Region government in Belgium for a research grant for €929,433.

Per the terms of the agreement, €278,830 of the grant is to be repaid by instalments over 15 years commencing in 2022.

In the event that the Company receives revenue from products or services as defined in the agreement, it is due to pay a 4.34% royalty on such revenue to the Walloon Region.

The maximum amount payable to the Walloon Region, in respect of the aggregate of the amount repayable of €278,830 and the 4.34% royalty on revenue, is equal to the amount of funding received.

As of December 31, 2021, the grant balance repayable was $ 52,834 .

As of December 31, 2021, the balance repayable was $ 296,321 and the annual payments remaining were as follows:

Greater than 5 years

Total Grants Repayable

d) Long-Term Debt

13 unchanged sentences

As of December 31, 2021, the amount that has been drawn down under this agreement was € 778,588 , representing a principal balance payable of $ 885,761 .

As of December 31, 2020, the total balance for long-term debt payable was $3,448,204 and the payments remaining were as follows:

Greater than 5 years

Amount representing interest

Total Long-Term Debt

On November 23, 2021, the Company entered into a 3 ½ year loan agreement with SOFINEX for a maximum of € 450,000 with fixed interest rate of 5.00 %, maturing June 2025.

As of December 31, 2021, the amount that has been drawn down under this agreement was € 450,000 , representing a principal balance payable of $ 511,943 .

VOLITIONRX LIMITED

3 unchanged sentences

Note 10 – Commitments and Contingencies (continued)

d) Long-Term Debt (continued)

As of December 31, 2021, the total balance for long-term debt payable was $3,068,622 and the payments remaining were as follows:

Greater than 5 years

Amount representing interest

$ ( 364,828 )

Total Long-Term Debt

e) Collaborative Agreement Obligations

In 2015, the Company entered into a research sponsorship agreement with the German Cancer Research Center, in Germany for a 3-year period for €338,984.

As of December 31, 2020, $nil is still to be paid by the Company under this agreement.

In 2016, the Company entered into a research co-operation agreement with DKFZ, in Germany for a 5 -year period for € 400,000 .

As of December 31, 2021, $ 227,530 is still to be paid by the Company under this agreement.

In 2017, the Company entered into a collaborative research agreement with Munich University, in Germany for a 3-year period for €360,000.

As of December 31, 2020, $nil is still to be paid by the Company under this agreement.

In 2017, the Company entered into a clinical study research agreement with the University of Michigan for a 3 -year period for up to $ 3 million.

5 unchanged sentences

As of December 31, 2021, $ 510,000 is still to be paid by the Company under this agreement.

In 2019, the Company entered into a research collaboration agreement with the University of Taiwan to collect a total of 1,200 samples for a 2-year period for a cost to the Company of up to $320,000 payable over such period.

As of December 31, 2020, $96,000 is still to be paid by the Company under this agreement.

In 2019, the Company entered into a funded sponsored research agreement with the Texas A&M University (“TAMU”) in consideration for the license granted to the Company for a 5 -year period for a cost to the Company of up to $ 400,000 payable over such period.

As of December 31, 2021, $ 58,775 is still to be paid by the Company under this agreement.

In 2019, the Company entered into a lyophilization study and a CE marking project including GMP validation and documentation with Biomerica Inc.

for $160,000.

As of December 31, 2020, $nil is still to be paid by the Company under this agreement.

On September 16, 2020, the Company entered into a research agreement for the bioinformatic analysis of cell-free DNA fragments from whole-genome sequencing with the Hebrew University of Jerusalem for 6 months for a cost to the Company of € 54,879 .

As of December 31, 2021, $ 17,196 is still to be paid by the Company under this agreement.

As of December 31, 2020, the total amount to be paid for future research and collaboration commitments was approximately $1.6 million and the annual payments remaining were as follows:

Total Collaborative Agreement Obligations

As of December 31, 2021, the total amount to be paid for future research and collaboration commitments was approximately $ 813,501 and the annual payments remaining were as follows:

Total Collaborative Agreement Obligation

VOLITIONRX LIMITED

4 unchanged sentences

f) Other Commitments

Belgian Volition

On October 1, 2020, Belgian Volition entered into an agreement with Gaetan Michel to serve as Chief Executive Officer for an indefinite period, which employment may be terminated without compensation or notice on grounds of serious misconduct by either party.

In exchange for his services, Mr.

Michel shall receive, among other things (i) €10,000 per month, and (ii) the equivalent of one-half of his salary for the 12-month non-competition period following termination of the agreement, subject to adjustments.

On November 4, 2020, the Company terminated a consulting services agreement with Novis Animal Solutions LLC to provide chief commercial officer services for Volition Vet.

The termination was effective immediately and the compensation payable to Novis for the required two-month notice period and a general release of any claims was $19,000.

As of December 31, 2020, Novis Animal Solutions LLC has no equity interest in Volition Vet.

On October 25, 2019, the Company entered into an agreement with TAMU for provision of in-kind services of personnel, animal samples and laboratory equipment in exchange for a non-controlling interest of 7.5 % in Volition Vet with an additional 5 %, vesting in a year from the date of the agreement, giving TAMU in aggregate, a 12.5% equity interest as of such date.

10 unchanged sentences

At closing, the Company issued 73,263 restricted shares of Company common stock, paid an adjusted amount of approximately $ 357,000 (€321,736) and recorded a holdback liability of $ 55,404 (€50,000) to be paid after the holdback period of 9 months following the closing (subject to offset for breaches of representations and warranties).

During the three months ended March 31, 2021, an amount of €43,152 was paid in full settlement of the amount due.

The Company has no further financial obligations under the transaction agreement.

VOLITIONRX LIMITED

4 unchanged sentences

f) Other Commitments (continued)

Volition Germany (continued)

In connection with the transaction agreement, the Company also entered into a 2-year Managing Director’s agreement with the founder of Octamer to continue to manage Volition Germany for a payment of €288,000 payable in equal monthly installments over such 2-year period and a royalty agreement with the founder providing for the payment of royalties in the amount of 6% of net sales of Volition Germany’s nucleosomes as reagents to pharmaceutical companies for use in the development, manufacture and screening of molecules for use as therapeutic drugs for a period of 5 years post-closing.

The Company recorded approximately $753,000 in compensation expense as a result of cash paid, holdback liability, stock issued and assumption of expenses.

As of December 31, 2020, $176,085 is still to be paid by the Company under the Managing Director’s agreement, $239 is payable under the 6% royalty agreement on sales to date (towards the Company’s aggregate minimum royalty obligation of $134,217), and $52,581 is still to be paid under the holdback liability.

The Company has no further financial obligations under the transaction agreement.

The Company recorded approximately $ 753,000 in compensation expense during the year 2020, as a result of cash paid, holdback liability, stock issued and assumption of expenses.

As of December 31, 2021, $nil is still to be paid by the Company under the Managing Director’s agreement, $ 229 is currently payable under the 6 % royalty agreement on sales to date (towards the Company’s aggregate minimum royalty obligation of $ 134,217 ).

The holdback liability of $ 55,404 (€50,000) outstanding at December 31, 2020, was settled during the year ended December 31, 2021 by an amount of € 43,152 in full settlement of the amount due.

The Company has no further financial obligations under the Managing Director’s agreement, but has a continuing obligation under the 6% royalty agreement.

Volition America

5 unchanged sentences

Unless earlier terminated, the term of the agreement is until December 31, 2025 or such later date as when all projects have been completed.

As of December 31, 2020, $nil is to be paid by Company under this agreement.

As of December 31, 2021, $13,738 is currently payable by Company under this agreement.

Singapore Volition

8 unchanged sentences

There are no legal proceedings which the Company believes will have a material adverse effect on its financial position.

h) Commitments in Respect of Corporate Goals and Performance-Based Awards

In August 2021, an incentive plan was authorized by the Compensation Committee of the Board of Directors in order to provide company personnel with an element of performance-based compensation tied to the timely achievement of certain corporate goals focused around product development and commercialization.

Effective August 3, 2021, the Company approved an incentive plan to issue equity-based awards and cash bonuses, vesting upon achievement of certain corporate goals, to various personnel including directors, executives, members of management, consultants and employees of the Company and/or its subsidiaries.

Conditional upon the achievement by December 31, 2021 of a specified corporate goal as set forth in the minutes of the Compensation Committee dated August 3, 2021, as well as continued service by the award recipient, the Company at the sole discretion of the Chief Executive Officer and the Chief Financial Officer shall pay a cash bonus to such award recipient).

The Company estimates the total compensation expense based on current recipients to be $330,788.

As of December 31, 2021, the Company has accrued compensation expense of $330,788 based on the probable outcomes related to the prescribed performance targets.

Conditional upon the achievement by July 1, 2022 of all specified corporate goals as set forth in the minutes of the Compensation Committee dated August 3, 2021, as well as continued service by the award recipient, the Company at the sole discretion of the Chief Executive Officer and the Chief Financial Officer would pay an additional cash bonus to such award recipient.

The Company estimates the total compensation expense based on current recipients to be $182,131.

As of the December 31, 2021, the Company has accrued compensation expense of $90,403 based on the probable outcomes related to the prescribed performance targets.

As discussed in detail in Note 8, in August and October 2021, a total of 1,000,000 stock options were issued under this plan and 500,000 RSUs were issued under this plan.

As of the December 31, 2021, the Company has recognized compensation expense of $584,044 in relation to stock options and $513,651 in relation to RSUs, based on the probable outcomes related to the prescribed performance targets on the outstanding awards.

VOLITIONRX LIMITED

3 unchanged sentences

Note 11 - Subsequent Events

Employment Agreements

Group Chief Commercial Officer

Effective January 1, 2021, Gael Forterre entered into an employment agreement with Volition America to serve as Group Chief Commercial Officer.

Forterre’s employment agreement continues until terminated by either party providing not less than three months’ prior notice.

In exchange for his services, Mr.

Forterre shall receive, among other things (i) $15,000 per month;

and (ii) a lump sum severance payment if terminated by Volition America without cause (as per the agreement) equal to the salary that he would have received between the date of termination and the completion of a three-month notice period.

This employment agreement superseded and replaced in its entirety that certain employment agreement dated December 30, 2020 between Mr.

Forterre and Volition America for services as Vice President of Sales of Volition America.

Effective January 1, 2021, the Company granted warrants to purchase 125,000 shares of common stock to Gael Forterre in exchange for services provided to the Company as Group Chief Commercial Officer.

These warrants vest on January 1, 2022 and expire 5 years after the vesting date, with an exercise price of $3.95 per share.

Effective January 1, 2021, the Company granted RSUs of 5,000 shares of common stock to a Gael Forterre in exchange for services provided to the Company as Group Chief Commercial Officer.

These RSUs vested immediately on January 1, 2021 and resulted in the issuance of 3,000 shares of common stock, net of withholding shares for taxes.

Group Chief Financial Officer

Effective February 1, 2021, Terig Hughes entered into an employment agreement with Singapore Volition as Group Chief Financial Officer and Treasurer.

Hughes’ employment agreement continues until terminated by either party providing not less than three months’ prior notice.

In exchange for his services, Mr.

Hughes shall receive, among other things (i) $30,000 SGD per month (approximately $22,500);

and (ii) a lump sum severance payment if terminated by Singapore Volition without cause (as per the agreement) equal to the salary that he would have received between the date of termination and the completion of a three-month notice period.

Effective February 1, 2021, the Company granted warrants to purchase 185,000 shares of common stock to Terig Hughes in exchange for services provided to the Company as Group Chief Financial Officer.

These warrants vest on February 1, 2022 and expire 5 years after the vesting date, with an exercise price of $4.90 per share.

Chief Operating Officer

On January 29, 2021, the Company entered into a consulting services agreement through a related party transaction between its wholly-owned subsidiary, Volition Germany and 3F Management, SPRL (“3F Management”).

This agreement is effective October 1, 2020 and provides for certain consultancy services to be rendered by Gaetan Michel through 3F Management to Volition Germany and also to the Company and its other subsidiaries, pursuant to services agreements entered into by and between Volition Germany and the Company or its subsidiaries.

As amended by the amendment dated February 1, 2021, the consulting services agreement covers Mr.

Michel’s services as Chief Executive Officer of Volition Vet and Chief Operating Officer of the Company.

The term of the agreement is perpetual, commencing on October 1, 2020 until terminated upon three months’ prior notice.

The agreement includes a six-month non-compete following termination of the agreement.

3F Management will receive a monthly fee of €6,000 in exchange for the services provided by Mr.

This consulting services agreement superseded and replaced in its entirety that certain consultancy agreement between Belgian Volition and 3F Management dated June 14, 2018, as amended.

Michel also has a Permanent Employment Contract dated October 1, 2020 with Belgian Volition for services rendered in his capacity as Chief Executive Officer of Belgian Volition.

Refer to Note 10(f) for the details.

VOLITIONRX LIMITED

Notes to Consolidated Financial Statements

For Years Ended December 31, 2020 and 2019

($ expressed in United States Dollars)

Note 11 - Subsequent Events (continued)

Common Stock Issuances Upon Warrant and Option Exercises

From January 13, 2021 to March 1, 2021, 4,450 stock options were exercised to purchase shares of common stock at $3.35 per share in cashless exercises that resulted in the issuance of 854 shares of common stock.

On February 2, 2021, 20,000 stock options were exercised to purchase shares of our common stock at $3.80 per share in a cashless exercise that resulted in the issuance of 6,181 shares of our common stock.

From February 2, 2021 to February 8, 2021, 100,000 stock options were exercised to purchase shares of common stock at $4.00 per share in cashless exercises and withholding of shares for taxes that resulted in the issuance of 32,126 shares of common stock.

On February 8, 2021, 50,000 stock options were exercised to purchase shares of our common stock at $3.25 per share in a cashless exercise and withholding of shares for taxes that resulted in the issuance of 18,750 shares of our common stock.

On February 8, 2021, 100,000 stock options were exercised to purchase shares of our common stock at $5.00 per share in cashless exercises and withholding of shares for taxes that resulted in the issuance of 19,446 shares of our common stock.

Common Stock Issuances, Option Exercises and RSU Grants

Effective February 8, 2022, the Company granted RSUs of 8,000 shares of common stock to an employee of the Company in exchange for services provided to the Company.

These RSUs vest over 2 years, with 50% vesting on each of February 8, 2023, and February 8, 2024, subject to continued service by the employee, and will result in total compensation expense of $ 22,640 .

Effective March 1, 2022, the Company granted RSUs of 30,000 shares of common stock to various employees of the Company in exchange for services provided to the Company.

These RSUs vest over 2 years, with 50% vesting on each of March 1, 2023, and March 1, 2024, subject to continued service by the employee, and will result in total compensation expense of $ 84,300 .

Equity Distribution Agreements

From January 1 to January 27, 2021, the Company raised aggregate net proceeds (net of broker’s commissions and fees) of approximately $1.2 million under the 2018 Equity Distribution Agreement through the sale of 308,609 shares of its common stock in accordance with a Rule 10b5-1 plan.

As of February 1, 2021, the Company fully-utilized the availability under the 2018 Equity Distribution Agreement and no further sales will be made under such Agreement.

From February 5, 2021 to February 10, 2021, the Company raised aggregate net proceeds (net of broker’s commissions and fees) of $343,957 under the 2020 Equity Distribution Agreement through the sale of 65,400 shares of its common stock.

Equity Capital Raise

On February 10, 2021, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Cantor Fitzgerald & Co.

(the “Underwriter”) in connection with an underwritten public offering (the “Offering”) of 3,809,524 shares (the “Firm Shares”) of the Company’s common stock, $0.001 par value per share (“Common Stock”) pursuant to the Company’s shelf registration statement on Form S-3 (declared effective by the SEC on September 28, 2018, File No.

The Underwriter purchased the Firm Shares from the Company at a price of $4.9533 per share on February 12, 2021.

The net proceeds received by the Company for the sale and issuance of the Firm Shares were approximately $18.9 million.

Under the terms of the Underwriting Agreement, the Company granted the Underwriter an option, exercisable for 30 days, to purchase up to an additional 571,428 shares of Common Stock (the “Option Shares”) at the same price per share as the Firm Shares which option was not exercised.

On January 6, 2021, the Company announced it had been awarded additional non-dilutive funding totaling approximately $4 million from the Walloon Region and Namur Invest, Belgium, consisting of a cash grant of $1.3 million to support the Company’s project entitled “Epigenetic Modifications of Nucleosomes Associated with Cancer” and $2.7 million in loans.

From January 1, 2022 to March 10, 2022, the Company raised aggregate net proceeds (net of broker’s commissions and fees) of approximately $ 9,468 under the 2021 Equity Distribution Agreement through the sale of 3,000 shares of its common stock.

Other Commitments

Effective January 13, 2022, the Company entered into a lease agreement with Aro Partners, a California Limited Partnership for a property of 6,645 square foot industrial building located at Corte el Cedro, Carlsbad, California for a term of five years and two months commencing February 1, 2022.

The total amount payable under the lease is $ 471,556 .

Other Information

On March 28, 2022, Belgian Volition entered into a License and Supply Agreement (the “License Agreement”) with Heska Corporation (“Heska”), pursuant to which Belgian Volition granted Heska worldwide exclusive rights to sell the NuQ ® Vet Cancer Screening Test for companion animals, including dogs and cats, at the point of care (“POC”) and non-exclusive rights to sell its NuQ ® Vet Cancer Screening Test through Heska’s central reference laboratories (“Central Lab”).

Under the terms of the License Agreement, Belgian Volition will receive an upfront payment of $ 10 million, and is eligible to receive up to an additional $ 18 million upon the achievement of certain near and mid-term milestones.

Belgian Volition will supply kits for the Central Lab and will receive a pre-agreed price per test of approximately $ 10 , adjusted annually for inflation, which is a discounted price to reflect Heska’s upfront payment.

The price per test for POC key components (“Key Components”) is also discounted to reflect the lower cost to Belgian Volition and additional assembly costs for Heska, as well as consideration for Heska’s upfront and milestone payments.

Heska will assemble the Key Components into a cartridge for use on Heska’s proprietary Element i+ Immunodiagnostic Analyzer, a POC platform.

Heska is responsible for marketing and distribution efforts and related costs.

The License Agreement may be terminated by either party for a material breach by the other party, subject to notice and cure provisions, or in the event of the other party’s insolvency.

Heska also has the option to terminate if it is unable to complete validation of the POC cartridge on any platform.

Unless earlier terminated, the License Agreement will continue in effect for an initial term of 22 years for POC and 5 years for Central Lab, with the Central Lab term then continuing on a rolling one-year basis for the POC term.

END NOTES TO FINANCIALS

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data