What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-03-15 compared with 2022-03-30 · 365 added, 304 removed, 676 unchanged (50% of the section changed)

6 unchanged sentences

Consolidated Statements of Operations and Comprehensive Loss

Consolidated Statements of Stockholders’ Equity

Consolidated Statements of Stockholders’ Equity (Deficit)

Consolidated Statements of Cash Flows

3 unchanged sentences

Opinion on 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”).

We have audited the accompanying consolidated balance sheets of VolitionRx Limited (“the Company”) as of December 31, 2022 and 2021, the related consolidated statements of operations and comprehensive loss, stockholders’ equity (deficit), and cash flows for each of the years in the two-year period ended December 31, 2022 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, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

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The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 2 to the financial statements, the Company has incurred losses since inception, has negative cash flows from operations, and has minimal revenues, which creates substantial doubt about its ability to continue as a going concern.

As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern.

Management's plans in regard to these matters are also described in Note 2.

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

We determined that there are no critical audit matters.

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.

License and Supply Agreement with Heska

As discussed in Note 3 to the consolidated financial statements, in March 2022, the Company entered into a license and supply agreement with Heska Corporation (“Heska”).

Under the terms of the agreement, the Company granted Heska worldwide exclusive rights to the Nu.Q Vet Cancer Screening Test at the point of care, initially for the screening of lymphoma and hemangiosarcoma in dogs and non-exclusive rights to sell its Nu.Q Vet Cancer Screening Test in kit format through Heska’s network of central reference laboratories.

In addition, the agreement requires the Company to supply required components for point of care testing and for kits used in central laboratories.

The Company received an upfront payment of $10 million during 2022 and is eligible to receive additional milestone payments upon certain commercial targets being met.

In addition, the Company is eligible to receive per unit consideration for kits and components supplied under this agreement.

We have identified the performance obligations, including understanding the nature and significance of the contractual obligations, under the Heska license and supply agreement as a critical audit matter.

Determining the distinct performance obligation included in the agreement required management to make judgements with respect to the appropriate application of relevant authoritative accounting guidance.

Auditing these management judgements and the resulting impacts on the accounting and deferred revenue recognition for the Heska license and supply agreement required increased auditor effort.

The primary procedures we performed to address this critical audit matter included:

Reading the license and supply agreement with Heska to gain an understanding of the contractual terms and conditions and the commitments being made in the agreement.

Assessing the key terms in the supply and license agreement under the relevant authoritative accounting guidance to evaluate management’s conclusion that contractual promises made in the license and supply agreement should constitute a single performance obligation.

Professionals with specialized skill and knowledge were utilized by the Firm to assist in the evaluation of management’s conclusions with respect to the performance obligation identified.

/s/ Sadler, Gibb & Associates, LLC

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March 15, 2023

VOLITIONRX LIMITED

VOL ITIONRX LIMITED

Consolidated Balance Sheets

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Intangible assets, net

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

Current Liabilities

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Accrued liabilities

Deferred revenue

Management and directors’ fees payable

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Total Liabilities

STOCKHOLDERS’ EQUITY

Common Stock Authorized:

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

STOCKHOLDERS’ EQUITY (DEFICIT)

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

Issued and outstanding:

57,873,379 shares and 53,772,261 shares, respectively

Additional paid-in capital

Accumulated other comprehensive income (loss)

Accumulated other comprehensive income

Accumulated deficit

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( 136,988,636 )

Total VolitionRx Limited Stockholders’ Equity

Total VolitionRx Limited Stockholders’ Equity (Deficit)

( 2,574,991 )

Non-controlling interest

Total Stockholders’ Equity

Total Liabilities and Stockholders’ Equity

Total Stockholders’ Equity (Deficit)

( 3,126,962 )

Total Liabilities and Stockholders’ Equity (Deficit)

(The accompanying notes are an integral part of these consolidated financial statements)

VOLITIONRX LIMITED

VOL ITIONRX LIMITED

Consolidated Statements of Operations and Comprehensive Loss

1 unchanged sentence

For the year ended

December 31, 2022

December 31, 2021

Total Revenues

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Other Income (Expenses)

(Loss)/Gain on disposal of fixed assets

Loss on disposal of fixed assets

Interest income

Interest expense

Total Other Income (Expenses)

Total Other Income

( 30,598,469 )

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(The accompanying notes are an integral part of these consolidated financial statements)

VOLITIONRX LIMITED

Consolidated Statement of Stockholders’ Equity

VOL ITIONRX LIMITED

Consolidated Statement of Stockholders’ Equity (Deficit)

For the Years Ended December 31, 2022 and 2021

1 unchanged sentence

Accumulated Other

Comprehensive Income

Comprehensive

Income (Loss)

Balance, December 31, 2020

( 110,173,971 )

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 for cashless exercise of stock options

Common stock issued for settlement of RSUs

Common stock issued in public offerings, net

1 unchanged sentence

Stock-based compensation

Stock-based compensation in relation to modification of options

Foreign currency translation

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( 136,988,636 )

Common stock issued for cashless exercise of stock options

Common stock issued for settlement of RSUs

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Stock-based compensation

Stock-based compensation in relation to modification of options

Foreign currency translation

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( 167,257,429 )

( 3,126,962 )

(The accompanying notes are an integral part of these consolidated financial statements)

VOLITIONRX LIMITED

VOL ITIONRX LIMITED

Consolidated Statements of Cash Flows

1 unchanged sentence

For the year ended

December 31, 2022

December 31, 2021

Operating Activities:

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Amortization of operating lease right-of-use assets

Loss (Gain) on disposal of fixed assets

Loss on disposal of fixed assets

Stock based compensation

Common stock issued for Director compensation in Volition Germany

Stock-based compensation in relation to modification of options

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Other current assets

Deferred revenue

Accounts payable and accrued liabilities

Management and directors’ fees payable

Right-of-use assets operating leases liabilities

Operating lease liabilities

Net Cash Used In Operating Activities

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Purchases of property and equipment

Proceeds from sales of property and equipment

( 1,570,182 )

Net Cash Used In Investing Activities

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Tax withholdings paid related to stock-based compensation

Common stock repurchased

Proceeds from grants repayable

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Payments on long-term debt

( 1,268,386 )

Payments on grants repayable

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Net Change in Cash and Cash Equivalents

( 9,714,263 )

Cash and Cash Equivalents – Beginning of Year

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

Loan payable for purchase of manufacturing building

Offering costs from issuance of common stock

Non-cash Note Payable

(The accompanying notes are an integral part of these consolidated financial statements)

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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

No te 2 – Liquidity and Go ing Concern Assessment

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

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Principles of Consolidation

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.

The accompanying consolidated financial statements for the year ended December 31, 2022 include the accounts of the Company and its subsidiaries.

The Company has two wholly owned subsidiaries, Singapore Volition Pte.

Limited and Volition Global Services SRL.

Singapore Volition has one wholly owned subsidiary, Belgian Volition SRL.

Belgian Volition has four subsidiaries, Volition Diagnostics UK Limited, Volition America, Inc, Volition Germany GmbH, and its one majority owned subsidiary Volition Veterinary Diagnostics Development LLC.

See Note 10 (f), Commitments and Contingencies – Other Commitments , for more information regarding Volition Vet, Volition Germany and Volition America.

All intercompany balances and transactions have been eliminated in consolidation.

Reclassification

Certain amounts presented in previously issued financial statements have been reclassified to be consistent with the current period presentation.

In the statement of operations and comprehensive loss, the Company has reclassified the prior year comparative amounts of research and development, sales and marketing and general and administrative expenses to be consistent with the current year classification.

Cash and Cash Equivalents

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As of December 31, 2022, the accounts receivable balance was $ 72,609 and the allowance for doubtful accounts was $nil.

Property and Equipment

Property and equipment are stated at historical cost and depreciated over the useful life of the asset using the straight-line method.

Useful lives are assigned to assets depending on their category.

For details regarding property and equipment, refer to Note 4.

VOLITIONRX LIMITED

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Note 3 - Summary of Significant Accounting Policies (continued)

Property and Equipment

Property and equipment are stated at historical cost and depreciated over the useful life of the asset using the straight-line method.

Useful lives are assigned to assets depending on their category.

For details regarding property and equipment, refer to Note 4.

Basic and Diluted Net Loss Per Share

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Gains and losses arising on translation of foreign currency denominated transactions are included in other comprehensive income (loss).

Financial Instruments

Fair Value Measurements

Pursuant to ASC 820, “ Fair Value Measurements and Disclosures,” an entity is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

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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.

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

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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, 2022, the Company had $ 227,097 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.

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

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.

The Company generates product revenues from the sale of its Nu.Q ® Vet Cancer 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.

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These are presented in “Product” in the consolidated statements of operations and comprehensive loss.

VOLITIONRX LIMITED

Notes to Consolidated Financial Statements

For Years Ended December 31, 2022 and 2021

($ expressed in United States Dollars)

Note 3 - Summary of Significant Accounting Policies (continued)

Revenue Recognition (continued)

The Company includes revenue recognized from laboratory services performed in the Company’s laboratory on behalf of third parties under “Service” under the consolidated statements of operations.

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These estimates are re-assessed each reporting period as required.

The Company includes revenue recognized from the licensing of certain rights to third parties in “Licensing” in the consolidated statements of operations and comprehensive loss.

For each development and/or commercialization agreement that results in revenues, the Company identifies all performance obligations, aside from those that are immaterial, which may include a license to intellectual property and know-how, development activities and/or transition activities.

In order to determine the transaction price, in addition to any upfront payment, the Company estimates the amount of variable consideration at the outset of the contract either utilizing the expected value or most likely amount method, depending on the facts and circumstances relative to the contract.

The Company constrains (reduces) the estimates of variable consideration such that it is probable that a significant reversal of previously recognized revenue will not occur throughout the life of the contract.

When determining if variable consideration should be constrained, management considers whether there are factors outside the Company’s control that could result in a significant reversal of revenue.

In making these assessments, the Company considers the likelihood and magnitude of a potential reversal of revenue.

These estimates are re-assessed each reporting period as required.

Revenue from Heska License Agreement

On March 28, 2022, Belgian Volition entered into a Master License and Supply Agreement (the “License Agreement”) with Heska Corporation (“Heska”), pursuant to which Belgian Volition granted Heska worldwide exclusive rights to sell the Nu.Q® Vet Cancer Test at the point of care (“POC”) initially for the screening of lymphoma and hemangiosarcoma in dogs (“Canine Lymphoma & HSA”), and non-exclusive rights to sell its Nu.Q® Vet Cancer Test in kit format (“Kits”) through Heska’s network of central reference laboratories (“Central Lab”) initially for Canine Lymphoma & HSA.

Under and subject to the terms of the License Agreement, Belgian Volition received an upfront payment of $10.0 million in 2022, and is eligible to receive further milestone payments of (i) $6.5 million upon the first commercial sale by or on behalf of Heska of a POC screening test for Canine Lymphoma & HSA, (ii) $6.5 million upon the first commercial sale by or on behalf of Heska of a POC monitoring test for the same conditions, and (iii) $5.0 million upon the first commercial sale by or on behalf of Heska of a screening or monitoring test for lymphoma in felines .

The License Agreement contains additional time-based triggers for the payment of the above-described milestones as well.

Any further expansion of the License Agreement to cover other cancer and non-cancer indications is subject to negotiation between the parties.

Belgian Volition will also supply Central Lab Kits and will receive a pre-agreed price per test, adjusted annually for inflation.

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 for use at the POC, and is additionally responsible for marketing and distribution efforts and related costs.

VOLITIONRX LIMITED

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Note 3 - Summary of Significant Accounting Policies (continued)

Revenue Recognition (continued)

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 adapt the Key Components for use on a POC 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.

According to ASC Topic 606, “ Revenue from Contracts with Customers ”, a performance obligation is a commitment to provide a distinct good or service or a series of distinct goods or services.

Goods and services that are not distinct are bundled with other goods or services in the contract until a bundle of goods or services that is distinct is created.

A good or service promised to a customer is distinct if the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer and the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract.

In conjunction with the License Agreement, the Company evaluated whether or not the performance obligations granted under the License Agreement were distinct and concluded that they were not distinct as Heska could not benefit from the license without the supply (manufacturing) services.

The supply services are highly specialized and are dependent on the supply of the product from the Company.

As such, the performance obligations granted under the License Agreement were combined to constitute a single performance obligation and the Company accounts for them as a single contract.

During the first quarter of 2022, the Company received a $ 10.0 million upfront payment under the License Agreement, which is included as deferred revenue on the accompanying consolidated balance sheet as of December 31, 2022.

The Company allocated the upfront payment and any milestone payments that were not constrained to the single performance obligation in the contract.

The Company expects to recognize the $10.0 million upfront payment and any milestone amounts not constrained under the License Agreement over time using an output method based on Key Components and Kits supplied to Heska.

As of December 31, 2022, the remaining $ 18.0 million in milestone payments under the License Agreement remains constrained and will not begin to be recognized until such amount becomes unconstrained.

In determining the transaction price, the Company analyzed the variable consideration and whether or not such variable consideration was constrained.

The Company will reassess this variable consideration at each reporting period and adjust the transaction price, if necessary.

The total Key Components and Kits that the Company expects to manufacture for Heska over the life of the contract will be a significant judgment in recognizing revenue once the Company begins to supply product to Heska.

Deferred Revenue (Contract Liabilities) and Contract Assets

Deferred revenue consists of amounts for which the Company has an unconditional right to bill, and/or amounts for which payment has been received (including non-refundable amounts) but have not been recognized as revenue because the related performance obligations are deemed incomplete.

As of December 31, 2022, the Company recorded $ 10.0 million as deferred revenue in respect of a non-refundable payment received in relation to a licensing and product supply agreement with Heska Corporation.

As of December 31, 2021, the Company recorded $ 12,512 as deferred revenue.

Contract assets include costs and services incurred on contracts with open performance obligations.

These contract assets were immaterial as of December 31, 2022.

Research and Development

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The Company incurred research and development expenses of $ 14.6 million and $ 13.0 million during the years ended December 31, 2022 and 2021, respectively.

VOLITIONRX LIMITED

Notes to Consolidated Financial Statements

For Years Ended December 31, 2022 and 2021

($ expressed in United States Dollars)

Note 3 - Summary of Significant Accounting Policies (continued)

Impairment of Long-Lived Assets

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Restricted stock units are valued based on the closing stock price on the date of grant.

The estimated fair value of RSUs that include a market vesting condition will be measured on the grant date using a Monte Carlo Simulation model.

Refer to Note 8 for further details.

The Company adopted FASB issued Accounting Standards Update No.

2016-02 – Leases (“Topic 842”) as of January 1, 2019, that requires lessees to record the present value of operating lease payments as right-of-use assets and lease liabilities on the balance sheet.

See Note 10(b) for discussion of the guidance and the Company’s accounting policy.

The Company accounts for leases in accordance with ASC Topic 842, “Leases.” The Company determines whether a contract is a lease at contract inception or for a modified contract at the modification date.

At inception or modification, the Company recognizes right-of-use assets (“ROU”) and related lease liabilities on the balance sheet for all leases greater than one year in duration.

Lease liabilities and their corresponding ROU assets are initially measured at the present value of the unpaid lease payments as of the lease commencement date.

If the lease contains a renewal and/or termination option, the exercise of the option is included in the term of the lease if the Company is reasonably certain that a renewal or termination option will be exercised.

As the Company’s leases do not provide an implicit rate, the Company uses an estimated incremental borrowing rate (“IBR”) based on the information available at the commencement date of the respective lease to determine the present value of future payments.

The IBR is determined by estimating what it would cost the Company to borrow a collateralized amount equal to the total lease payments over the lease term based on the contractual terms of the lease and the location of the leased asset.

Operating lease payments are recognized as an expense on a straight-line basis over the lease term in equal amounts of rent expense attributed to each period during the term of the lease, regardless of when actual payments are made.

This generally results in rent expense in excess of cash payments during the early years of a lease and rent expense less than cash payments in later years.

The difference between rent expense recognized and actual rental payments is typically represented as the spread between the ROU asset and lease liability.

When calculating the present value of minimum lease payments, we account for leases as one single lease component if a lease has both lease and non-lease fixed cost components.

Variable lease and non-lease cost components are expensed as incurred.

We do not recognize ROU assets and lease liabilities for short-term leases that have an initial lease term of 12 months or less.

We recognize the lease payments associated with short-term leases as an expense on a straight-line basis over the lease term.

VOLITIONRX LIMITED

Notes to Consolidated Financial Statements

For Years Ended December 31, 2022 and 2021

($ expressed in United States Dollars)

Note 3 - Summary of Significant Accounting Policies (continued)

The Company receives funding from public bodies for a proportion of the costs of specific projects.

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Funding received that is repayable is shown as a liability.

Recent Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect.

The Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

VOLITIONRX LIMITED

Notes to Consolidated Financial Statements

For Years Ended December 31, 2021 and 2020

($ expressed in United States Dollars)

Note 3 - Summary of Significant Accounting Policies (continued)

COVID-19 Pandemic Impact

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.

As of the date of this filing, there continue to be widespread concerns regarding the ongoing impacts and disruptions caused by the COVID-19 pandemic in the regions in which the Company operates.

As a result of the impacts of the COVID-19 pandemic, the Company has experienced and may continue to experience disruptions to its clinical trials, including patient enrollment and sample collection delays.

Although the Company has taken steps to mitigate the impacts of the COVID-19 pandemic, the extent to which the pandemic will impact its business, financial condition, and results of operations in future periods is highly uncertain and will be affected by a number of factors outside of the Company’s control.

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.

Recent Accounting Pronouncements

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.

This ASU amends ASC 805 to require acquiring entities to apply ASC 606 to recognize and measure contract assets and contract liabilities in business combinations.

The standard is effective for the Company's fiscal year beginning January 1, 2023, with early adoption permitted.

The adoption of this standard is not expected to have a material effect on our financial position, results of operations, or cash flows.

VOLITIONRX LIMITED

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The Company’s property and equipment consist of the following amounts as of December 31, 2022 and December 31, 2021:

December 31, 2022

Computer hardware and software

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Not amortized

December 31, 2021

Computer hardware and software

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Not amortized

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, 2022 and December 31, 2021, the total capital expenditure was $ 1.6 million and $ 1.1 million, respectively, the majority of which was from purchases of laboratory equipment.

For further details refer to Note 10 (a) for Finance Leases included in Property, Plant and Equipment.

During the years ended December 31, 2022 and December 31, 2021, the Company recognized $ 865,262 and $ 812,109 , respectively, in depreciation expense.

During the year ended December 31, 2020, the Company sold laboratory equipment for cash proceeds of $ 293,312 , resulting in a gain on disposal of equipment of $ 293,312 .

VOLITIONRX LIMITED

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

December 31, 2022

December 31, 2021

During the years ended December 31, 2022 and December 31, 2021, the Company recognized $ 75,558 and $ 91,645 , respectively, in amortization expense.

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The annual estimated amortization schedule over the next five years is as follows:

Remaining Life

Total Intangible Assets

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Stock Option Exercises

During the year ended December 31, 2022 no shares of common stock were issued pursuant to the exercise of stock options.

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 Incentive Plan

Stock Options

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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

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During the year ended December 31, 2022 we issued a total of 297,289 shares of common stock from the settlement of RSUs, as follows:

Restricted Stock

Restricted Stock Units Vested

Price Settled

Shares Issued

Shares Withheld

Shares Withheld for Tax

March 25, 2022

April 13, 2022

August 3, 2022

September 7, 2022

October 4, 2022

November 1, 2022

December 15, 2022

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 Units Vested

Price Settled

Shares Issued

Shares Withheld for Tax

January 20, 2021

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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 to the Company of $ 12.7 million.

On July 29, 2022, the Company entered into an underwriting agreement with Newbridge Securities Corporation (“Newbridge”) in connection with an underwritten public offering of 3,450,000 shares of the Company’s common stock, which includes Newbridge’s exercise in full of its overallotment option (of 450,000 shares), pursuant to the Company’s “shelf” registration statement on Form S-3 (declared effective by the SEC on November 8, 2021, File No.

333-259783) (as amended and supplemented from time to time, the “2021 Form S-3”).

Newbridge purchased the shares from the Company at a weighted average price of $ 1.87 per share.

The offering closed on August 2, 2022.

The Company received net proceeds of approximately $ 6.4 million from the offering before deducting offering expenses of $ 0.2 million paid by the Company.

VOLITIONRX LIMITED

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Note 7 - Common Stock (continued)

2021 and 2020

Equity Capital Raises (continued)

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 of the Company’s 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.

333-227248) (the “2018 Form S-3”).

Cantor purchased the shares from the Company at a price of $ 4.9533 per share, and elected not to exercise an option to purchase up to an additional 571,428 shares of common stock at the same price per share.

The offering closed on February 12, 2021.

The Company received net proceeds of approximately $ 18.9 million from the offering before deducting offering expenses.

Equity Distribution Agreements

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 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.

On May 20, 2022, the Company entered into an equity distribution agreement (the “2022 EDA”) with Jefferies LLC (“Jefferies”) to sell shares of the Company’s common stock, with an aggregate offering price of up to $ 25.0 million, from time to time through an “at the market” offering pursuant to the Company’s 2021 Form S-3 through Jefferies acting as the Company’s agent and/or principal.

The Company is not obligated to sell any shares under the 2022 EDA.

As of December 31, 2022, the Company raised aggregate net proceeds (net of broker commissions and fees) of approximately $ 0.8 million under the 2022 EDA through the sale of 350,829 shares of common stock, before deducting offering expenses.

See Note 11 for additional details regarding the Company’s equity distribution agreements subsequent to December 31, 2022.

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

From January 1, 2022 through May 7, 2022, the Company raised aggregate net proceeds (net of broker commissions and fees) of approximately $ 9,500 under the 2021 EDA (as defined below) through the sale of 3,000 shares of its common stock.

The Company terminated the 2021 EDA effective May 7, 2022.

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 the Company’s common stock, with an aggregate offering price of up to $ 25.0 million, from time to time through an “at the market” offering pursuant to the Company’s 2021 Form S-3 through Cantor and Oppenheimer acting as the Company’s agents and/or principals.

From the 2021 EDA’s effectiveness on November 8, 2021 through December 31, 2021, the Company raised aggregate net proceeds (net of broker commissions and fees) of approximately $ 0.7 million through the sale of 190,600 shares of its common stock.

On November 10, 2020, the Company entered into an equity distribution agreement (the “2020 EDA”) with Cantor and Oppenheimer to sell shares of the Company’s common stock, with an aggregate offering price of up to $ 25.0 million, from time to time through an “at the market” offering pursuant to the 2018 Form S-3 through Cantor and Oppenheimer acting as the Company’s agents and/or principals.

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

The Company terminated the 2020 EDA effective November 8, 2021.

On September 7, 2018, the Company entered into an equity distribution agreement (as amended, the “2018 EDA”) with Oppenheimer to sell shares of the Company’s common stock, with an aggregate offering price of up to $ 10.0 million, from time to time through an “at the market” offering pursuant to the 2018 Form S-3 through Oppenheimer acting as the Company’s agent and/or principal.

The Company utilized the 2018 EDA in full during the three months ended March 31, 2021, and raised aggregate net proceeds (net of broker commissions and fees) of approximately $ 9.7 million under the 2018 EDA since inception 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 commissions and fees) of $ 1.2 million under the 2018 EDA through the sale of 308,609 shares of its common stock.

VOLITIONRX LIMITED

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Note 7 - Common Stock (continued)

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

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

2022 and 2021

Issuances Upon Warrant Exercises

For the years ended December 31, 2022 and December 31, 2021 no warrants were exercised.

No te 8 - Stock-Based Compensation

The following table summarizes the changes in warrants outstanding of the Company during the year ended December 31, 2022 and December 31, 2021:

Weighted Average

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Exercisable at December 31, 2022

Effective April 4, 2022, the Company granted a warrant to purchase 54,000 shares of common stock to a Company employee for services to the Company and/or its subsidiaries.

This warrant shall vest in two equal installments at 12 months and 24 months from the grant date, subject to continued service and expire on April 4, 2028 and April 4, 2029, respectively, with an exercise price of $ 3.05 per share .

The Company has calculated the estimated fair market value of this warrant at $ 80,901 , using the Black-Scholes model and the following assumptions:

term 3.5 years, stock price $ 2.95 , exercise price $ 3.05 , 71.07 % volatility, 2.53 % risk-free rate, and no forfeiture rate.

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.

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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.

Effective March 1, 2020, the Company granted warrants to purchase 50,000 shares of common stock to a Company employee for services to the Company.

These warrants vest on September 1, 2021 (subject to continued employment through such date) and expire on March 1, 2026, with an exercise price of $ 3.45 per share.

These warrants vested 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:

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b ) Options (continued)

On April 4, 2022, 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 7,750,000 shares, which amendment was approved by the stockholders at an annual meeting held on June 13, 2022.

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.

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Exercisable at December 31, 2022

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.

During the year ended December 31, 2022, no options were granted.

On August 18, 2022, 2,515 Options previously granted to an employee on August 3, 2021 were cancelled and returned as authorized shares under the 2015 Plan upon the resignation of such employee.

On November 18, 2022, 5,000 Options previously granted to an employee on April 13, 2020 were cancelled and returned as authorized shares under the 2015 Plan upon three months following the termination of such employee.

On November 18, 2022, 32,383 Options previously granted to an employee on August 3, 2021 were cancelled and returned as authorized shares under the 2015 Plan upon the resignation of such employee.

On November 18, 2022, 2,515 Options previously granted to an employee on August 3, 2021 were cancelled and returned as authorized shares under the 2015 Plan upon three months following the termination of such employee.

VOLITIONRX LIMITED

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b ) Options (continued)

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 vested 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.

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.

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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.

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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)).

Effective August 3, 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 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.

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

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 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

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b ) Options (continued)

Below is a table summarizing the options issued and outstanding as of December 31, 2022, 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 5.22 years.

Weighted Average

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As of December 31, 2022, an aggregate of 417,318 shares of common stock remained available for future issuance under the 2015 Plan.

VOLITIONRX LIMITED

Notes to Consolidated Financial Statements

For Years Ended December 31, 2022 and 2021

($ expressed in United States Dollars)

Note 8 - Stock-Based Compensation (continued)

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.

Below is a table summarizing the RSUs issued and outstanding as of December 31, 2022, all of which were issued pursuant to the 2015 Plan.

Weighted Average

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Outstanding at December 31, 2022

Below is a table summarizing the RSUs granted during the year ended December 31, 2022, all of which were issued pursuant to the 2015 Plan.

These RSUs vest equally over periods stated on the dates noted, subject to continued service, and will result in the compensation expense stated.

The exception to this is specified in note (iv) which is described in detail below.

Up to 42 Months

VOLITIONRX LIMITED

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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 .

These RSUs vest upon the achievement of corporate goals focused around product development and commercialization with further time-based vesting, subject to continued service of the award recipient to the Company through the applicable vesting dates.

On October 13, 2022, the Compensation Committee of the Board of Directors approved the satisfactory achievement of certain corporate goals previously established by the Compensation Committee, which resulted in the vesting of the rights with respect to an aggregate of 198,275 RSUs.

The RSUs are further subject to a three-year time based vesting schedule, vesting in three equal installments on the dates set forth in the table above, and conditioned upon the recipient’s continued service through the applicable vesting date.

On January 12, 2023, the Compensation Committee of the Board of Directors approved the satisfactory achievement of certain additional corporate goals, which resulted in the vesting of the rights with respect to an aggregate of an additional 424,875 RSUs, subject to the foregoing time-based vesting and conditioned upon the recipient’s continued service through the applicable vesting date.

These RSUs vest upon the share price closing above $ 5.00 per share for a minimum of ten consecutive trading days within a period of three years from the date of grant, with further time-based vesting in a single installment six months after the timely achievement of the target, if at all, and subject to continued service.

The estimated fair value of the RSUs that include a market vesting condition will be measured on the grant date using a Monte Carlo Simulation of a Geometric Brownian Motion stock path model and incorporating the probability of vesting occurring.

The estimated fair value of these awards will be recognized over the derived service period (as determined by the valuation model), with such recognition occurring regardless of whether the market condition is met.

The Company granted an aggregate of 3,000 RSUs on November 29, 2022 as an employment inducement award.

These RSUs are subject to time-based vesting and subject to the continued service of each recipient.

Below is a table summarizing the RSUs vested during the year ended December 31, 2022, all of which were issued pursuant to the 2015 Plan.

Equity Incentive

Shares Withheld for

VOLITIONRX LIMITED

Notes to Consolidated Financial Statements

For Years Ended December 31, 2022 and 2021

($ expressed in United States Dollars)

Note 8 - Stock-Based Compensation (continued)

c ) Restricted Stock Units (RSUs) (continued)

Below is a table summarizing the RSUs cancelled during the year ended December 31, 2022, all of which were originally issued pursuant to the 2015 Plan.

Equity Incentive

VOLITIONRX LIMITED

Notes to Consolidated Financial Statements

For Years Ended December 31, 2022 and 2021

($ expressed in United States Dollars)

Note 8 - Stock-Based Compensation (continued)

c ) Restricted Stock Units (RSUs) (continued)

Below is a table summarizing the RSUs granted during the year ended December 31, 2021, all of which were issued pursuant to the 2015 Plan.

Equity Incentive

First Vesting

Second Vesting

Third Vesting

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)).

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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.

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.

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 .

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 and will result in total compensation expense of $121,019 .

VOLITIONRX LIMITED

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c ) Restricted Stock Units (RSUs) (continued)

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 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 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 vested during the year ended December 31, 2021, all of which were issued pursuant to the 2015 Plan.

Equity Incentive

Shares Issued

Shares Withheld for Taxes

Below is a table summarizing the RSUs cancelled during the year ended December 31, 2021, all of which were originally issued pursuant to the 2015 Plan.

Equity Incentive Plan

RSUs Cancelled

VOLITIONRX LIMITED

Notes to Consolidated Financial Statements

For Years Ended December 31, 2022 and 2021

($ expressed in United States Dollars)

Note 8 - Stock-Based Compensation (continued)

c ) Restricted Stock Units (RSUs) (continued)

Below is a table summarizing the RSUs issued and outstanding as of December 31, 2022 of which the last to vest have a remaining contractual life of 3.26 years.

Weighted Average

Contractual Life

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.

Stock-based compensation expense related to RSUs of $ 1,903,054 and $ 898,910 was recorded in the years ended December 31, 2022, and December 31, 2021, respectively.

Total remaining unrecognized compensation cost related to non-vested RSUs is $ 2,214,593 .

As of December 31, 2021, the total intrinsic value of RSUs was $ 3,981 .

VOLITIONRX LIMITED

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Note 9 - Income Taxes

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 Company has estimated net operating losses for the years ended December 31, 2022 and 2021 of $ 28.6 million and $ 24.4 million, respectively, available to offset taxable income in future years.

The significant components of deferred income taxes and assets as of December 31, 2022 and December 31, 2021 are as follows:

Net Deferred Tax Asset

December 31, 2022

December 31, 2021

Net Deferred Tax Liability

Excess of tax over book depreciation and amortization

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Unrealized Gain/Loss

Capitalized research expenses

Stock-based compensation

7 unchanged sentences

Change in Valuation Allowance

( 5,552,546 )

December 31, 2022

December 31, 2021

Summary Rate Reconciliation

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Disclosure Amounts

December 31, 2022

Net Operating Losses - United States

9 unchanged sentences

a) Finance Lease Obligations

In 2015, the Company entered into an equipment finance lease to purchase three Tecan machines (automated liquid handling robots) for € 550,454 , maturing May 2020.

As of December 31, 2021, the balance payable was $nil.

In 2016, the Company entered into a real estate capital lease with ING Asset Finance Belgium S.A.

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b) Operating Lease Right-of-Use Liabilities

The Company adopted Topic 842 on January 1, 2019.

The Company elected to adopt this standard using the optional modified retrospective transition method and recognized a cumulative-effect adjustment to the consolidated balance sheet on the date of adoption.

Comparative periods have not been restated.

With the adoption of Topic 842, the Company’s consolidated balance sheet now contains the following line items:

Operating lease right-of-use assets, current portion of operating lease liabilities and operating lease liabilities, net of current portion.

As all the existing leases subject to the new lease standard were previously classified as operating leases by the Company, they were similarly classified as operating leases under the new standard.

The Company has determined that the identified operating leases did not contain non-lease components and require no further allocation of the total lease cost.

Additionally, the agreements in place did not contain information to determine the rate implicit in the leases, so we used our incremental borrowing rate as the discount rate.

Our weighted average discount rate is 4.50 % and the weighted average remaining lease term is 29 months.

As of December 31, 2022, operating lease right-of-use assets and liabilities arising from operating leases were $ 619,392 and $ 645,254 , respectively.

During the year ended December 31, 2022, cash paid for amounts included for the measurement of lease liabilities was $ 245,354 and the Company recorded operating lease expense of $ 267,434 .

Our weighted average discount rate is 2.38 % and the weighted average remaining lease term is 25 months.

The following is a schedule showing the future minimum lease payments under operating leases by years and the present value of the minimum payments as of December 31, 2022.

Total Operating Lease Obligations

Amount representing interest

Present Value of minimum lease payments

VOLITIONRX LIMITED

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b) Operating Lease Right-of-Use Liabilities (continued)

The following is a schedule showing the future minimum lease payments under operating leases by years and the present value of the minimum payments as of December 31, 2021.

Total Operating Lease Obligations

Amount representing interest

Present Value of minimum lease payments

The Company’s office space leases are short term, and the Company has elected under the short-term recognition exemption not to recognize them on the balance sheet.

During the year ended December 31, 2021, $ 79,623 was recognized in short-term lease costs associated with the office space lease in Singapore.

The annual payments remaining for such short-term office leases were as follows:

During the year ended December 31, 2022, $ 76,955 was recognized in short-term lease costs associated with the office space leases in Singapore and Nevada.

The annual payments remaining for such short-term office leases as of December 31, 2022, were as follows:

Total Operating Lease Liabilities

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As of December 31, 2022, the grant balance repayable was $ 97,799 .

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, 2022, the grant balance repayable was $ 230,392 .

VOLITIONRX LIMITED

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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, 2022, the balance repayable was $ 462,302 and the annual payments remaining were as follows:

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As of December 31, 2022, the principal balance payable was $ 188,806 .

In 2017, the Company entered into a 4-year loan agreement with Namur Invest for € 350,000 with a fixed interest rate of 4.00 %, maturing June 2021.

As of December 31, 2021, the principal balance payable was $ 0 .

In 2017, the Company entered into a 7 -year loan agreement with SOFINEX for up to € 1 million with a fixed interest rate of 4.50 %, maturing September 2024 .

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As of December 31, 2022, the principal balance payable was $ 279,548 .

On October 13, 2020, the Company entered into a 10 -year loan agreement with Namur Invest for a maximum of € 830,000 with fixed interest rate of 4.00 %, maturing March 2021.

In 2020, the Company entered into a 10 -year loan agreement with Namur Invest for a maximum of € 830,000 with fixed interest rate of 4.00 %, maturing March 2031 .

As of December 31, 2022, the amount that has been drawn down under this agreement was € 707,599 , representing a principal balance payable of $ 759,419 .

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As of December 31, 2022, the amount that has been drawn down under this agreement was € 450,000 , representing a principal balance payable of $ 442,708 .

On February 5, 2022 the Company entered into a 9 -month loan agreement with First Insurance Funding for a maximum of $ 620,549 with fixed interest rate of 3.57 %, maturing November 2022 .

As of December 31, 2022, the principal balance payable was $ 0 .

On August 16, 2022, the Company entered into a 4 -year loan agreement with Namur Invest for a maximum of € 1,000,000 with fixed interest rate of 6.00 %, maturing July 2026 .

As of December 31, 2022, the amount that has been drawn down under this agreement was € 1,000,000 , representing a principal balance payable of $ 1,073,231 .

VOLITIONRX LIMITED

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d) Long-Term Debt (continued)

On November 18, 2022, the Company entered into a 4 -year loan agreement with Namur Invest for a maximum of € 500,000 with fixed interest rate of 5.45 %, maturing December 2027 .

As of December 31, 2022, the amount that has been drawn down under this agreement was € 500,000 , representing a principal balance payable of $ 536,615 .

As of December 31, 2022, the total balance for long-term debt payable was $ 3,845,940 and the payments remaining were as follows:

4 unchanged sentences

e) Collaborative Agreement Obligations

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 clinical study research agreement with the University of Michigan for a 3 -year period for up to $ 3 million.

This agreement was amended in February 2020 to redefine a new clinical study.

Pursuant to the terms of the amendment, the parties acknowledged that, although not fully completed, the requirements of the original clinical study had been satisfied, including any and all payment obligations by Volition America.

Further, the Amendment provided that a new clinical study would be undertaken at no additional cost to Volition America.

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

In 2018, the Company entered into a research collaboration agreement with the University of Taiwan for a 3 -year period for a cost to the Company of up to $ 2.55 million payable over such period.

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As of December 31, 2022, $ 0 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 .

In 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 six months for a cost to the Company of € 54,879 .

Subsequently the parties entered into an amendment to the agreement with an additional cost to the Company of € 100,236 .

In the year ended December 31, 2022, the parties entered into agreements for an additional cost to the Company of € 39,000 .

As of December 31, 2022, $ 23,018 is still to be paid by the Company under the amended agreement.

On August 2, 2022, the Company entered into a sponsored research agreement with The University of Texas MD Anderson Cancer Center to evaluate the role of neutrophil extracellular traps (“NETs”) in cancer patients with sepsis for a cost to the Company of $ 346,787 .

As of December 31, 2022, $ 346,787 is still to be paid by the Company under this agreement.

As of December 31, 2022, the total amount to be paid for future research and collaboration commitments was approximately $ 879,805 and the annual payments remaining were as follows:

Total Collaborative Agreement Obligation

Total Collaborative Agreement Obligations

VOLITIONRX LIMITED

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On March 9, 2020, Octamer was renamed to Volition Germany GmbH (or “Volition Germany”).

Upon considering the definition of a business, as defined in ASC 805 “Business Combinations,” paragraph 805 - 10-20, which is an integrated set of activities and assets that is capable of being conducted and managed for the purpose of providing a return, the Company has determined that this did not constitute a business.

This is primarily due to the fact that additional inputs are needed in the form of training personnel further to produce outputs.

Accordingly, the Company has treated this transaction as the hiring of a member of management, described below, rather than accounting for the transaction as a business combination.

The Company agreed to terms of the transaction on December 13, 2019 and closed on January 10, 2020.

Pursuant to the transaction agreement, the Company purchased all outstanding shares of Octamer.

In exchange, the Company agreed to issue 73,263 newly-issued restricted shares of Company common stock valued at $ 333,969 (based on the $ 4.56 per share volume weighted trading price for the five days prior to December 13, 2019), committed to pay approximately €350,000, subject to adjustments, and agreed to pay off certain Octamer expenses leading up to the agreement (representing net liabilities of $ 6,535 ).

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.

In connection with the transaction agreement, the Company entered into 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 five years post-closing.

As of December 31, 2022, $ 210 is payable under the 6 % royalty agreement on sales to date towards the Company’s aggregate minimum royalty obligation of $ 118,055 .

Volition America

On November 3, 2020, the Company entered into a professional services master agreement (the “Master Agreement”) with Diagnostic Oncology CRO, LLC (“DXOCRO”) to conduct a pivotal clinical trial and provide regulatory submission and reimbursement related services.

On August 8, 2022, the Company and DXOCRO amended and restated the Master Agreement to expand the scope of DXOCRO’s consultant services provided thereunder (the “A&R Master Agreement”).

The A&R Master Agreement requires DXOCRO to support development and clinical validation studies for the Company’s Nu.Q® product portfolio in the United States, including by conducting large-scale finding studies across multiple sites in the U.S.

using Nu.Q® NETs and Nu.Q® Cancer tests to determine clinical utility in sepsis and non-Hodgkin’s lymphoma.

The Company anticipates DXOCRO’s services under the agreement will be completed by the end of the third quarter 2023 at a total cost to the Company of up to $4.2 million .

The Company’s payment obligations accrue upon delivery of projects under the agreement.

The Company may terminate the agreement or any project thereunder upon at least 30 days’ prior written notice.

Unless earlier terminated, the A&R Master Agreement terminates on the later of December 31, 2025 or the date upon which all services have been completed.

As of December 31, 2022, $ 264,692 is payable under the A&R Master Agreement, and up $ 3,435,165 may be payable by Company in future periods for services rendered.

g) Legal Proceedings

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

VOLITIONRX LIMITED

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Note 10 – Commitments and Contingencies (continued)

f) Other Commitments (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 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

On November 3, 2020, the Company entered into a professional services master agreement with Diagnostic Oncology CRO, LLC to conduct a pivotal clinical trial and provide regulatory submission and reimbursement related services.

Under the terms of the agreement Diagnostic Oncology CRO, LLC will provide ad hoc consulting assistance on a project-by-project basis related to the review and assessment of existing data and information to prepare recommended intended use claims and coverage/reimbursement plans to support the preparation of FDA pre-submissions, clinical trial protocol development and study administration, and potential 510k regulatory marketing submissions of the Company’s diagnostic tests, including those proposed for use as an adjunct diagnostic tool for common and aggressive forms of Non-Hodgkin’s Lymphoma.

The initial projects contemplated by the agreement relating to Non-Hodgkin’s Lymphoma obligate the Company to pay in aggregate of up to $2.9 million over a period of 22 months.

Such payment obligations are on a project-by-project basis as deliverables are executed and subject to certain terms and conditions.

Additionally, the Company may terminate the agreement or any project with or without cause upon at least 30 days’ prior written notice.

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, 2021, $13,738 is currently payable by Company under this agreement.

Singapore Volition

On November 10, 2020, the Company entered into a consulting services agreement through a related party transaction between its wholly owned subsidiary, Singapore Volition and PB Commodities Pte Ltd (“PB Commodities”).

This agreement is effective December 1, 2020 and provides for consultancy services to be rendered by Cameron Reynolds through PB Commodities to Singapore Volition.

Singapore Volition will also make available the services of Mr.

Reynolds, as Group Chief Executive Officer, to the Company and its subsidiaries, pursuant to services agreements entered into by and between Singapore Volition and the Company or its subsidiaries.

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

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

PB Commodities will receive a monthly fee of $ 35,650 in exchange for the services provided by Mr.

g) Legal Proceedings

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.

In August 2021 and October 2021, the Compensation Committee of the Board of Directors approved the granting of equity-based awards under the 2015 Plan as well as cash bonuses, vesting upon achievement of certain corporate goals focused around product development and commercialization, to various personnel including directors, executives, members of management, consultants and employees of the Company and/or its subsidiaries.

On June 23, 2022, the Compensation Committee of the Board of Directors approved the achievement of all of the remaining outstanding corporate goals related to the awards in August 2021 and October 2021 resulting in the payment of the cash bonus awards and the vesting of the remaining rights to the equity-based awards, which equity-based awards remain subject to time-based vesting in equal installments on each of August 3, 2022 and August 3, 2023 (with the exception of October 4, 2022 and October 4, 2023 for one award) and the continuous service of the award recipient through the applicable vesting date.

As of December 31, 2022, the Company has paid compensation expense of $ 737,137 in relation to the July 1, 2022 specified corporate goals based on the actual outcomes related to the prescribed performance targets.

In October 2022, the Compensation Committee of the Board of Directors approved the granting of cash bonuses, payable upon achievement of various corporate goals focused around product development, manufacturing, financing and commercialization, to various personnel including directors, executives, members of management, consultants and employees of the Company and/or its subsidiaries.

Conditional upon the achievement by January 1, 2023 and July 1, 2023 of all specified corporate goals as set forth in the minutes of the Compensation Committee, as well as continued service by the award recipients, the Company at the sole discretion of the Chief Executive Officer and the Chief Financial Officer would pay a cash bonus to such award recipients.

As of December 31, 2022, the Company has accrued compensation expense of $ 905,856 in relation to the January 1, 2023 and July 1, 2023 specified corporate goals based on the actual outcomes related to the prescribed performance targets.

As discussed in detail in Note 8, - Stock-Based Compensation, an aggregate of 1,144,000 RSUs were issued under the 2015 Stock Incentive Plan in connection with the October 2022 grants and an aggregate of 1,000,000 stock options and 500,000 RSUs were issued under the 2015 Stock Incentive Plan in connection with the August 2021 and October 2021 grants.

As of December 31, 2022, the Company has recognized compensation expense of $ 969,593 in relation to the options vested in 2022 and $630,863 in relation to the options that will vest in 2023.

The Company has unrecognized compensation expense of $ 270,550 to such stock options, based on the outcomes related to the prescribed performance targets on the outstanding awards.

VOLITIONRX LIMITED

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($ expressed in United States Dollars)

Note 10 – Commitments and Contingencies (continued)

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

As of December 31, 2022, the Company has recognized compensation expense of $ 822,149 in relation to the RSUs fully vested in 2022 and $ 530,930 in relation to RSUs that will vest in 2023.

The Company has unrecognized compensation expense of $ 228,491 to such RSUs, based on the outcomes related to the prescribed performance targets on the outstanding awards.

As of December 31, 2022, the Company has recognized total compensation expense of $ 245,861 of which $ 134,087 in relation to RSUs that will vest in 2023, $ 65,088 in relation to RSUs that will vest in 2024, and $ 46,686 in relation to RSUs that will vest in 2025.

The Company has unrecognized compensation expense of $ 1,408,319 in relation to such RSUs, based on the outcomes related to the prescribed performance targets on the outstanding awards.

VOLITIONRX LIMITED

Notes to Consolidated Financial Statements

For Years Ended December 31, 2022 and 2021

($ expressed in United States Dollars)

Note 11 - Subsequent Events

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, 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.

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.

Common Stock Issuances and Repurchases

From January 1 to January 19, 2023, the Company raised aggregate net proceeds (net of broker commissions and fees) of approximately $ 656,000 under the 2022 EDA through the sale of 279,703 shares of its common stock.

No additional shares have been sold under the 2022 EDA through March 8, 2023.

On January 5, 2023, the Company purchased from a former officer 13,264 shares of its common stock at $ 2.39 per share, for a total cost to the Company of $ 31,772 .66.

These shares were subsequently retired.

On January 12, 2023, the Compensation Committee of the Board of Directors approved the satisfactory achievement of certain corporate goals established by the Compensation Committee on October 4, 2022, which resulted in the vesting of rights with respect to an aggregate of 424,875 RSUs.

The RSUs are further subject to a 3-year time based vesting schedule, vesting in three equal installments on each of October 4, 2023, October 4, 2024 and October 4, 2025 , respectively, and conditioned upon the recipient’s continued service through the applicable vesting date.

On February 8, 2023, 4,000 RSUs previously granted to an employee vested and resulted in the issuance of 2,369 shares of common stock and the remaining 1,631 shares of common stock were withheld as taxes and returned to the 2015 Plan.

On March 1, 2023, 15,000 RSUs previously granted to employees vested and resulted in the issuance of 9,609 shares of common stock.

An aggregate of 5,391 shares of common stock were withheld as taxes and returned to the 2015 Plan.

Capital Raise

On February 17, 2023, the Company entered into an underwriting agreement with Newbridge in connection with an underwritten public offering of 4,945,000 shares of the Company’s common stock, which includes Newbridge’s exercise in full of its overallotment option, pursuant to the Company’s 2021 Form S-3.

Newbridge purchased the shares from the Company at a price of $ 1.6275 per share.

The offering closed on February 22, 2023.

The Company received net proceeds of approximately $ 8.0 million from the offering before deducting offering expenses payable by the Company.

Commercial Product Launches

On January 12, 2023, the Company announced the availability of its Nu.Q® Vet Cancer Test through the IDEXX Laboratories, Inc.

reference laboratory network in the U.S.

On February 16, 2023, the Company announced that its Nu.Q® Vet Cancer Test was available for pre-order to veterinarians at the point of care through Heska.

END NOTES TO FINANCIALS

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What changed 10-K

Item 8. Financial Statements and Supplementary Data