Item 9A. Controls and Procedures
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including our Principal Executive and Principal Financial Officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Our management carried out an evaluation under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer have concluded that, as of December 31, 2022, our disclosure controls and procedures were not effective because of material weakness in our internal control over financial reporting relating to the segregation of duties in some areas of finance.
Management’s Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles U.S. GAAP.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Under the supervision and with the participation of management, including the Principal Executive Officer and Principal Financial Officer, the Company conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2022, using the criteria established in “ Internal Control - Integrated Framework (2013) ” issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.
During the year ended December 31, 2022, our management, with oversight from our audit committee, implemented the following remediation steps to address and mitigate the underlying deficiencies which gave rise to the material weaknesses and to improve our internal control over financial reporting:
·
hired specialists in human resources and information technology to recommend and implement relevant policies and processes that will strengthen the control environment;
·
changed organizational reporting lines and reallocated certain responsibilities to improve segregation of duties around payroll;
·
engaged additional resources to help us assess, document, design and implement control activities related to internal control over financial reporting; and
·
implemented additional review procedures at each month end close.
During 2023, we intend to take additional measures to strengthen certain processes we have identified which we believe once implemented in conjunction with the completed actions above will mitigate and remedy this weakness.
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We also intend to take additional steps to continue to strengthen the control environment. Such measures include but may not be limited to:
·
hiring additional finance resources;
·
strengthening our internal processes and reviews, including formal documentation thereof; and
·
preparation of risk-control matrices to identify key risks and develop and document policies to mitigate those risks.
As we continue to evaluate and test the remediation plan outlined above, we may also identify additional measures to address the material weaknesses or modify certain of the remediation procedures described above. We may also implement additional changes to our internal control over financial reporting as may be appropriate in the course of remediating the material weakness. Management, with the oversight of our audit committee, will continue to take steps necessary to remedy the material weakness to reinforce the overall design and capability of our control environment.
Changes in Internal Control over Financial Reporting
The Audit Committee of the Board of Directors meets regularly with our financial management, and with the independent registered public accounting firm engaged by us. Internal accounting controls and the quality of financial reporting are discussed during these meetings. The Audit Committee has discussed with the independent registered public accounting firm matters required to be discussed by the auditing standards adopted or established by the Public Company Accounting Oversight Board (“PCAOB”). In addition, the Audit Committee and the independent registered public accounting firm have discussed the independent registered public accounting firm’s independence from the Company and its management, including the matters in the written disclosures required by PCAOB Rule 3526 “Communicating with Audit Committees Concerning Independence.”
There have been no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting, other than those described above.
The Company is not required to include, and does not include an auditor’s attestation report under SEC Rules. Consequently, the Company’s registered public accounting firm has not attested to management’s reports on the Company’s internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
Effective March 1, 2023, Singapore Volition entered into an employment agreement with Cameron Reynolds, the Company’s Chief Executive Officer (the “Reynolds Employment Agreement”), which supersedes and replaces in its entirety the Consulting Services Agreement between Singapore Volition and PB Commodities Pte. Ltd., a Singapore corporation (“PB Commodities”), dated December 1, 2020, pursuant to which PB Commodities made Mr. Reynolds’ services available to the Company.
The Reynolds Employment Agreement continues until terminated by either party providing not less than six months’ prior notice. In exchange for his services, Mr. Reynolds shall receive, among other things, (i) an annual base salary of $450,300 from Singapore Volition, paid in equal monthly installments, and (ii) a lump sum severance payment if terminated by Singapore Volition without cause equal to the salary that he would have received between the date of termination and the completion of a six-month notice period.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information required under this Item is incorporated by reference from our definitive proxy statement related to our 2023 Annual Meeting of Stockholders, or the Proxy Statement, to be filed pursuant to Regulation 14A, on or before May 1, 2023.
ITEM 11. EXECUTIVE COMPENSATION
The information required under this Item is incorporated herein by reference from the Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
The information required under this Item is incorporated herein by reference from the Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
The information required under this Item is incorporated herein by reference from the Proxy Statement.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required under this Item is incorporated herein by reference from the Proxy Statement.
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PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a) The following documents are filed as part of this Report:
1.
Financial Statements. Included in Part II, Item 8 of this Report and are incorporated by reference herein.
2.
Financial Statement Schedules. Financial statement schedules are omitted because they are not applicable, or the required information is shown in the financial statements or notes thereto.
3.
Exhibits.
Exhibit
Incorporated by Reference
Number
Exhibit Description
Form
File No.
Exhibit
Filing Date
Filed Herewith
2.1
Share Purchase Agreement, by and between Singapore Volition and ValiRX, dated September 22, 2010.
8-K/A
000-30402
2.1
5/8/12
2.2
Supplementary Agreement to the Share Purchase Agreement, by and between Singapore Volition and ValiRX, dated June 9, 2011.
8-K/A
000-30402
10.15
1/11/12
2.3
Share Exchange Agreement by and among Standard Capital Corporation, the controlling shareholders of Standard Capital Corporation and Singapore Volition, dated September 26, 2011.
8-K
000-30402
2.1
9/29/11
2.4
Agreement, Consent and Waiver by and between Standard Capital Corporation and its Shareholders, dated September 27, 2011.
8-K/A
000-30402
10.28
4/5/12
3.1
Second Amended and Restated Certificate of Incorporation, as currently in effect.
8-K
001-36833
3.1
10/11/16
3.2
Amended and Restated Bylaws, as currently in effect.
S-8
333-208512
4.2
12/11/15
4.1
Description of Capital Stock.
10-K
001-36833
4.1
2/20/20
10.1
Non-Exploitation and Third-Party Patent License Agreement, by and among ValiBio SA, ValiRX and The Walloon Region, dated December 17, 2009.
8-K/A
000-30402
10.6
2/24/12
10. 2 #
Employment Agreement, by and between VolitionRx and Jason Terrell MD, dated December 29, 2015.
10-K
001-36833
10.24
3/11/16
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Exhibit
Incorporated by Reference
Number
Exhibit Description
Form
File No.
Exhibit
Filing Date
Filed Herewith
10. 3 #
2011 Equity Incentive Plan dated November 17, 2011.
8-K
000-30402
4.1
11/18/11
10.3(a)#
Form Stock Option Agreement.
8-K
000-30402
4.2
11/18/11
10.3(b)#
Form Stock Award Agreement for Restricted Stock under the 2011 Equity Incentive Plan.
8-K
000-30402
4.3
11/18/11
10. 4 #
2015 Stock Incentive Plan, as amended.
8-K
001-36833
10.1
6/14/22
10.4(a)#
Form of Notice of Stock Option Grant and Stock Option Agreement under the 2015 Stock Incentive Plan.
S-8
333-214118
10.2
10/14/16
10.4(b)#
Form of Notice of Restricted Stock Award and Restricted Stock Agreement under the 2015 Stock Incentive Plan.
S-8
333-214118
10.3
10/14/16
10.4(c)#
Form of Notice of Stock Bonus Award and Stock Bonus Award Agreement under the 2015 Stock Incentive Plan.
S-8
333-214118
10.4
10/14/16
10.4(d)#
Form of Notice of Stock Appreciation Right Award and Stock Appreciation Right Award Agreement under the 2015 Stock Incentive Plan.
S-8
333-214118
10.5
10/14/16
10.4(e)#
Form of Notice of Restricted Stock Unit Award and Restricted Stock Unit Agreement under the 2015 Stock Incentive Plan.
S-8
333-214118
10.6
10/14/16
10.4(f)#
Form of Notice of Performance Shares Award and Performance Shares Agreement under the 2015 Stock Incentive Plan.
S-8
333-214118
10.7
10/14/16
10. 5 #
Independent Director Agreement.
10-Q
001-36833
10.33
5/12/15
10. 6
Real Estate Capital Lease Agreement, by and between Belgian Volition and ING Asset Finance Belgium S.A., dated October 4, 2016 (English translation of French original).
8-K
001-36833
10.1
10/31/16
10. 7
Deed of Sale to the Sale Agreement, by and between Belgian Volition and Gerard Dekoninck S.A., dated October 25, 2016 (English translation of French original).
8-K
001-36833
10.2
10/31/16
10. 8 #
Employment Agreement, by and between Volition Diagnostics UK Limited and Jacob Micallef, dated March 7, 2017.
10-K
001-36833
10.28
3/10/17
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Exhibit
Incorporated by Reference
Number
Exhibit Description
Form
File No.
Exhibit
Filing Date
Filed Herewith
10. 9 #
Employment Agreement, by and between Volition Diagnostics UK and Martin Faulkes, dated March 7, 2017.
10-K
001-36833
10.30
3/10/17
10.1 0
Unsecured Credit Agreement, by and among VolitionRx, Belgian Volition and SOFINEX (English translation of French original), dated September 20, 2017.
8-K
001-36833
10.1
9/21/17
10.1 1
Clinical Study Agreement, by and between Volition America and the Regents of the University of Michigan, dated July 17, 2017.
10-Q
001-36833
10.1
11/9/17
10.1 1 (a)
Amendment #1 to Clinical Study Agreement, by and between Volition America, Inc. and the Regents of the University of Michigan, dated February 17, 2020.
10-K
001-36833
10.22
2/20/20
10.1 2 #
Warrant to Purchase Common Stock, by and between VolitionRx and Jason Terrell MD, dated March 20, 2013; First Amendment to Warrant Agreement, dated February 14, 2017; and Second Amendment to Warrant Agreement, dated July 1, 2019.
S-3
333-236335
4.3
2/7/20
10.1 3
Equity Distribution Agreement, by and among VolitionRx, Oppenheimer & Co. Inc. and Cantor Fitzgerald & Co., dated November 12, 2020.
10-Q
001-36833
1.1
11/12/20
10.1 4 #
Consulting Services Agreement, by and between Singapore Volition and PB Commodities Pte. Ltd. (Cameron Reynolds), dated December 1, 2020.
10-Q
001-36833
10.1
11/12/20
10.1 5 #†
Common Stock Warrant issued by VolitionRx to Gael Forterre, dated January 1, 2021.
10-K
001-36833
10.18
3/22/21
10.1 6 #†
Singapore Volition Pte. Limited Employment Agreement, by and between Singapore Volition and Terig Hughes, dated January 27, 2021 and effective February 1, 2021, including the form of Common Stock Warrant attached as Schedule 2.
10-K
001-36833
10.19
3/22/21
10. 17 #†
Volition America, Inc. Employment Agreement, by and between Volition America and Gael Forterre, dated February 1, 2021.
10-K
001-36833
10.20
3/22/21
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Exhibit
Incorporated by Reference
Number
Exhibit Description
Form
File No.
Exhibit
Filing Date
Filed Herewith
10 .18 #
Volition Veterinary Diagnostics Development, LLC Employment Agreement Chief Executive Officer, by and between Volition Veterinary Diagnostics Development and Salvatore Thomas Butera, dated March 25, 2021.
10-Q
001-36833
10.6
5/11/21
10 .19
Equity Distribution Agreement, by and among VolitionRx, Oppenheimer & Co. Inc. and Cantor Fitzgerald & Co., dated September 24, 2021.
S-3
333-259783
1.2
9/24/21
10.20 #
Employment Agreement, by and between Volition America and Gaetan Michel, dated September 15, 2021.
10-Q
001-36833
10.1
11/10/21
10.21#†
Consulting Services Agreement, by and between Volition Global and 3F Management SPRL (Gaetan Michel), dated September 15, 2021.
10-Q
001-36833
10.2
11/10/21
10.22#
Employment Agreement, by and between Volition Diagnostics and Nick Plummer, dated August 23, 2021.
10-Q
001-36833
10.3
11/10/21
10.23†
License and Supply Agreement between Belgian Volition and Heska Corporation, dated March 28, 2022.
10-Q
001-36833
10.1
5/11/22
10.24
Equity Distribution Agreement, dated May 20, 2022, by and between VolitionRx Limited and Jefferies LLC.
8-K
001-36833
1.1
5/20/22
10.25
Underwriting Agreement, dated July 29, 2022, by and between VolitionRx Limited and Newbridge Securities Corporation.
8-K
001-36833
1.1
8/2/22
10.26
Underwriting Agreement, dated February 17, 2023, by and between VolitionRx Limited and Newbridge Securities Corporation.
8-K
001-36833
1.1
2/21/23
10.27#
Singapore Volition Pte. Limited Employment Agreement – Group Chief Executive Officer, dated March 13, 2023, by and between Singapore Volition and Cameron Reynolds.
X
21.1
List of Subsidiaries.
X
23.1
Consent of independent registered public accounting firm.
X
24.1
Power of Attorney (included on the signature page of this Report).
X
31.1
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
X
31.2
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
X
32.1*
Certifications of Chief Executive Officer and Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
10.1 INS
Inline XBRL Instance Document
X
101.SCH
Inline XBRL Taxonomy Extension Schema Document.
X
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
X
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document.
X
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document.
X
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
X
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
X
#
Indicates a management contract or compensatory plan or arrangement.
†
Portions of this exhibit are redacted pursuant to Item 601(a)(6) and/or Item (b)(10)(iv) under Regulation S-K. The registrant agrees to furnish supplementally any omitted schedules to the SEC upon request.
*
The certifications attached as Exhibit 32.1 accompany this Report pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall not be deemed “filed” by the registrant for purposes of Section 18 of the Exchange Act and are not to be incorporated by reference into any of the registrant’s filings under the Securities Act or the Exchange Act, irrespective of any general incorporation language contained in any such filing.
ITEM 16. FORM 10-K SUMMARY
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
VOLITIONRX LIMITED
Dated: March 15, 2023
By:
/s/ Cameron Reynolds
Cameron Reynolds
President, Chief Executive Officer and Director
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS that each individual whose signature appears below constitutes and appoints Cameron Reynolds and Rodney Rootsaert, and each or either of them, acting individually, his or her true and lawful attorney-in-fact and agent, with full power of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or either of them, or his, her or their substitute or substitutes, may lawfully do or cause to be done or by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report on Form 10-K has been signed below by the following persons in the capacities and on the date indicated.
Signature
Title
Date
/s/ Cameron Reynolds
President, Chief Executive Officer and Director
Cameron Reynolds
(Principal Executive Officer)
March 15, 2023
/s/ Terig Hughes
Chief Financial Officer and Treasurer
Terig Hughes
(Principal Financial and Accounting Officer)
March 15, 2023
/s/ Dr. Martin Faulkes
Dr. Martin Faulkes
Director
March 15, 2023
/s/ Guy Innes
Guy Innes
Director
March 15, 2023
/s/ Dr. Alan Colman
Dr. Alan Colman
Director
March 15, 2023
/s/ Dr. Phillip Barnes
Dr. Phillip Barnes
Director
March 15, 2023
/s/ Dr. Edward Futcher
Dr. Edward Futcher
Director
March 15, 2023
/s/ Kim Nguyen
Kim Nguyen
Director
March 15, 2023
/s/ Richard Brudnick
Richard Brudnick
Director
March 15, 2023
/s/ Mickie Henshall
Mickie Henshall
Director
March 15, 2023
83