What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-03-25 compared with 2023-03-15 · 350 added, 322 removed, 719 unchanged (48% of the section changed)

6 unchanged sentences

Consolidated Statements of Operations and Comprehensive Loss

Consolidated Statements of Stockholders’ Equity (Deficit)

Consolidated Statements of Stockholders’ Deficit

Consolidated Statements of Cash Flows

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Opinion on 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”).

We have audited the accompanying consolidated balance sheets of VolitionRx Limited (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of operations and comprehensive loss, stockholders’ deficit, and cash flows for each of the years in the two-year period ended December 31, 2023 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, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Explanatory Paragraph Regarding Going Concern

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 suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern.

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

As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations, negative cash flows from operations and minimal revenues which raises 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.

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.

We determined that there are no critical audit matters.

/s/ Sadler, Gibb & Associates, LLC

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Intangible assets, net

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities

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Current portion of long-term debt

Warrant liability

Current portion of financing lease liabilities

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Total Liabilities

STOCKHOLDERS’ EQUITY (DEFICIT)

Stockholders' Deficit

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

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( 167,257,429 )

Total VolitionRx Limited Stockholders’ Equity (Deficit)

Total VolitionRx Limited Stockholders' Deficit

( 7,802,255 )

( 2,574,991 )

Non-controlling interest

Total Stockholders’ Equity (Deficit)

Total Stockholders’ Deficit

( 8,712,222 )

Total Liabilities and Stockholders’ Equity (Deficit)

( 3,126,962 )

Total Liabilities and Stockholders’ Deficit

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

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(Expressed in United States Dollars, except share numbers)

For the year ended

December 31, 2022

December 31, 2021

For the Years Ended

Total Revenues

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Interest expense

Gain on change in fair value of warrant liability

Total Other Income

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VOL ITIONRX LIMITED

Consolidated Statement of Stockholders’ Equity (Deficit)

Consolidated Statement of Stockholders’ Deficit

For the Years Ended December 31, 2023 and 2022

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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

Net loss for the Year

( 30,268,793 )

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( 167,257,429 )

( 3,126,962 )

Common stock issued for settlement of RSUs

Common stock issued in public offerings, net

Common stock issued for cash, net of issuance costs and allocation to warrant liability

Common stock repurchased and retired

Tax withholdings paid related to stock-based compensation

1 unchanged sentence

Foreign currency translation

Net loss for the Year

( 35,319,078 )

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(Expressed in United States Dollars)

For the year ended

December 31, 2022

December 31, 2021

For the Years Ended

Operating Activities:

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Stock-based compensation

Stock-based compensation in relation to modification of options

Gain on change in fair value of warrant liability

Changes in operating assets and liabilities:

Prepaid expenses

Accounts receivable

Prepaid expenses

Other current assets

Deferred revenue

Accounts payable and accrued liabilities

Deferred revenue

Management and directors’ fees payable

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( 1,083,749 )

( 1,570,182 )

Net Cash Used In Investing Activities

( 1,083,749 )

( 1,570,182 )

Financing Activities:

1 unchanged sentence

Tax withholdings paid related to stock-based compensation

Common stock repurchased

Proceeds from grants repayable

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Interest paid

Income tax paid

Non-Cash Financing Activities:

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

Common Stock issued for settlement of vested RSUs

Offering costs from issuance of common stock

Fair value of warrants issued in connection with public offering at issuance

Non-cash note payable

4 unchanged sentences

($ expressed in United States Dollars)

Note 1 - Nature of Operations

Note 1 – Organization and Nature of Operations

The Company was incorporated under the laws of the State of Delaware on September 24, 1998.

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

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

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

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

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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.

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

The Company has incurred losses since inception of $ 167.3 million, has negative cash flows from operations, and has minimal revenues, which creates substantial doubt about its ability to continue as a going concern for a period at least one year from the date of issuance of these consolidated financial statements.

Management assesses liquidity and going concern uncertainty in the Company’s consolidated financial statements to determine whether there is sufficient cash on hand and working capital, including available borrowings on loans, to operate for a period of at least one year from the date the consolidated financial statements are issued or available to be issued, which is referred to as the “look-forward period”, as defined in GAAP.

As part of this assessment, based on conditions that are known and reasonably knowable to management, management will consider various scenarios, forecasts, projections, estimates and will make certain key assumptions, including the timing and nature of projected cash expenditures or programs, its ability to delay or curtail expenditures or programs and its ability to raise additional capital, if necessary, among other factors.

Based on this assessment, as necessary or applicable, management makes certain assumptions around implementing curtailments or delays in the nature and timing of programs and expenditures to the extent it deems probable those implementations can be achieved and management has the proper authority to execute them within the look-forward period.

The Company has incurred substantial losses since its inception of $ 202.6 million, has negative cash flows from operations, and has minimal revenues and expects to continue to incur operating losses in the near-term.

These factors raise substantial doubt about its ability to continue as a going concern.

The Company believes that it has access to capital resources through possible public or private equity offerings, debt financings, corporate collaborations, related party funding, or other means to continue as a going concern.

The future of the Company as an operating business will depend on its ability to obtain sufficient capital contributions, financing and/or generate revenues as may be required to sustain its operations.

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

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

Management continues to exercise tight cost controls to conserve cash.

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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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Accounts Receivable

Trade accounts receivable are stated at the amount the Company expects to collect.

Accounts receivable consist of trade receivables in the normal course of business.

Due to the nature of the accounts receivable balance, the Company believes the risk of doubtful accounts is minimal and therefore no allowance is recorded.

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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.

Property and equipment is stated at historical cost less accumulated depreciation.

Leasehold improvements are amortized over the lesser of the base term of the lease or estimated life of the leasehold improvements.

Depreciation is calculated using the straight-line method over the estimated useful lives as follows:

Computer hardware and software

Laboratory equipment

Office furniture and equipment

Building improvements

Not amortized

Basic and Diluted Net Loss Per Share

The Company computes net loss per share in accordance with Accounting Standards Codification (“ASC”) 260, “Earnings Per Share,” which requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement.

Basic EPS is computed by dividing net loss available to common stockholders (numerator) by the weighted average number of shares outstanding (denominator) during the period.

Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method.

In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants.

As of December 31, 2022, and December 31, 2021, 7,787,013 and 6,323,268 , respectively, of potential common shares equivalents from stock options, RSUs and warrants were excluded from the diluted EPS calculations as their effect is anti-dilutive.

Basic EPS is calculated by dividing net income (loss) attributable to Volition shareholders by the weighted average number of shares of common stock outstanding during each period.

Diluted earnings (loss) per share is calculated by adjusting the weighted average number of shares of common stock outstanding for the dilutive effect, if any, of common stock equivalents.

Common stock equivalents whose effect would be antidilutive are not included in diluted earnings (loss) per share.

The Company uses the treasury stock method to determine the dilutive effect, which assumes that all common stock equivalents have been exercised at the beginning of the period and that the funds obtained from those exercises were used to repurchase shares of common stock of the Company at the average closing market price during the period.

There were 9,197,021 and 7,787,013 potential common stock equivalents from stock options, RSUs and warrants excluded from the diluted EPS calculations as their effect is anti-dilutive for the years ended December 31, 2023, and December 31, 2022, respectively.

Foreign Currency Translation

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

Fair Value Measurements

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, 2023, the Company had $ 243,940 of accumulated other comprehensive income, relating to foreign currency translation.

VOLITIONRX LIMITED

Notes to Consolidated Financial Statements

For Years Ended December 31, 2023 and 2022

($ expressed in United States Dollars)

Note 3 - Summary of Significant Accounting Policies (continued)

Financial Instruments

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.

Included in the following table are the Company’s major categories of assets and liabilities measured at fair value on a recurring basis as of December 31, 2023.

Fair Value Measurements at December 31, 2023

Warrant liability

As of December 31, 2022, there was no warrant liability.

The following table provides a roll-forward of the warrant liability measured at fair value on a recurring basis for the year ended December 31, 2023, as follows:

Warrant Liability

Balance at December 31, 2022

Fair value of warrant liability, at issuance

Gain on change in fair value of warrant liability

Balance at December 31, 2023

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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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.

VOLITIONRX LIMITED

Notes to Consolidated Financial Statements

For Years Ended December 31, 2023 and 2022

($ expressed in United States Dollars)

Note 3 - Summary of Significant Accounting Policies (continued)

Revenue Recognition (continued)

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.

For each licensing, 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.

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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.

Revenue from Heska Agreement

On March 28, 2022, Belgian Volition entered into a Master License and Supply Agreement (the “License Agreement”) with Heska Corporation (“Heska”), a leading global provider of advanced veterinary diagnostics, 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 received further milestone payments in 2023 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 and (ii) $6.5 million upon the first commercial sale by or on behalf of Heska of a POC monitoring test for the same conditions.

A further milestone payment of $5.0 million will be payable to Volition pursuant to the Agreement upon the earlier of (a) the first commercial sale by or on behalf of Heska of a screening or monitoring test for lymphoma in felines, or (b) the 9-month anniversary of the first peer reviewed paper evidencing clinical utility for the screening or monitoring of lymphoma in felines being published in any one of a number of periodicals identified by the parties.

Any further expansion of the License Agreement to cover the use of the Nu.Q® Vet Cancer Test for other cancer and non-cancer indications is subject to negotiation between the parties.

Pursuant to the terms of the License Agreement, 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.

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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.

During the first quarter of 2022, the Company received a $ 10.0 million upfront payment under the License Agreement and further upfront payments totaling $ 13.0 million in the fourth quarter of 2023, which is included as deferred revenue on the accompanying consolidated balance sheet as of $23.0 million.

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

The Company expects to recognize the total $ 28.0 million of milestone amounts under the License Agreement over time using an output method based on Key Components and Kits supplied to Heska.

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

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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.

Sales to the Company’s three largest customers represented over 61% of total sales for the year ended December 31, 2023.

Deferred Revenue (Contract Liabilities) and Contract Assets

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As of December 31, 2023, the Company recorded $ 23.0 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.

As of December 31, 2022, the Company recorded $ 10.0 million as deferred revenue.

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

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Impairment of Long-Lived Assets

In accordance with ASC 360, “Property Plant and Equipment”, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable.

Circumstances which could trigger a review include, but are not limited to:

significant decreases in the market price of the asset;

significant adverse changes in the business climate or legal factors;

accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset;

current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset;

and current expectation that the asset will more likely than not be sold or disposed of significantly before the end of its estimated useful life.

Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances.

An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.

Impairment losses of $nil and $nil were recognized during the years ended December 31, 2022 and December 31, 2021, respectively.

In accordance with ASC 360, “Property Plant and Equipment”, the Company reviews the carrying value of long-lived assets such as intangible assets with definite lives, property and equipment, and right-of-use (“ROU”) assets for impairment whenever events or changes in circumstances indicate the carrying amount of the assets might not be recoverable.

These events and circumstances may include significant decreases in the market price of an asset or asset group, significant changes in the extent or manner in which an asset or asset group is being used by the Company or in its physical condition, a significant change in legal factors or in the business climate, a history or forecast of future operating or cash flow losses, significant disposal activity, a significant decline in the Company’s share price, a significant decline in revenue or adverse changes in the economic environment.

If such facts indicate a potential impairment, the Company would assess the recoverability of an asset group by determining if the carrying value of the asset group exceeds the sum of the projected undiscounted cash flows expected to result from the use and eventual disposition of the assets over the remaining economic life of the primary asset in the asset group.

If the recoverability test indicates that the carrying value of the asset group is not recoverable, the Company will estimate the fair value of the asset group using appropriate valuation methodologies, which would typically include an estimate of discounted cash flows.

Any impairment would be measured as the difference between the asset group’s carrying amount and its estimated fair value.

Impairment losses of $nil were recognized during the years ended December 31, 2023, and December 31, 2022, respectively.

Stock-Based Compensation

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The fair value of our stock options and warrants is estimated using a Black-Scholes option valuation model.

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.

Restricted stock units (“RSUs)” are valued based on the closing stock price on the date of grant (intrinsic value method).

The fair value of 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, with 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 has elected to recognize forfeitures as they occur.

Refer to Note 8 for further details.

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.

Operating Leases

The Company accounts for leases in accordance with ASC 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.

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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

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Note 3 - Summary of Significant Accounting Policies (continued)

Operating Leases (continued)

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.

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.

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.

COVID-19 Pandemic Impact

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.

Reclassifications

Certain reclassifications within operating expenses have been made to prior period’s consolidated financial statements to conform to the current period financial statement presentation.

There is no impact in total to the results of operations and cash flows in all periods presented.

Concentration of Credit Risk

Financial instruments that potentially subject the company to concentration of credit risk consist primarily of accounts receivable.

The company performs ongoing credit evaluations of its customers and maintains allowances for potential credit losses.

Management does not believe significant credit risks exist at December 31, 2023.

As at December 31, 2023 the two largest customer balances represented over 65 % of the total outstanding accounts receivable balance.

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.

The Company considers the applicability and impact of all Accounting Standard Updates “ASUs” issued by the Financial Accounting Standards Board (“FASB”).

The Company has evaluated all recent accounting pronouncements and determined that the adoption of pronouncements applicable to the Company has not had or is not expected to have a material impact on the Company’s consolidated financial statements.

In June 2016, the FASB issued ASU No.

2016-13, Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments, or ASU 2016-13, which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost.

ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss model.

It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities.

These changes may result in earlier recognition of credit losses.

The Company adopted ASU 2016-13 on January 1, 2023.

The adoption of ASU 2016-13 did not have a material impact on the Company’s consolidated financial statements and related disclosures.

VOLITIONRX LIMITED

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($ expressed in United States Dollars)

Note 4 - Property and Equipment

No te 4 - Property and Equipment

The Company’s property and equipment consist of the following amounts as of December 31, 2023 and December 31, 2022:

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Building improvements

Not amortized

December 31, 2021

Computer hardware and software

2 unchanged sentences

Building improvements

Not amortized

During the years ended December 31, 2023 and December 31, 2022, the total capital expenditure was $ 1.1 million and $ 1.6 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, 2023 and December 31, 2022, the Company recognized $ 1,080,475 and $ 865,262 , respectively, in depreciation expense.

6 unchanged sentences

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, 2023 and December 31, 2022, the Company recognized $ 84,910 and $ 75,558 , respectively, in amortization expense.

1 unchanged sentence

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

Remaining Life

Total Intangible Assets

11 unchanged sentences

As of December 31, 2023, the Company was authorized to issue 100 million shares of common stock par value $0.001 per share, of which 81,898,321 and 57,873,379 shares were issued as of December 31, 2023 and December 31, 2022, respectively.

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 Plan

Stock Options

Price Per Share

Shares Issued

January 13 - March 19, 2021

February 2, 2021

February 8, 2021

February 8 - February 9, 2021

February 8, 2021

Equity Capital Raises

On February 17, 2023, the Company entered into an underwriting agreement with Newbridge Securities Corporation (“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 “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”).

The public offering price was $ 1.75 per share.

The underwriter purchased the shares from the Company at a price of $ 1.6275 per share on February 22, 2023, after taking into account the underwriting discounts and commissions.

The net proceeds received by the Company for the sale and issuance of the shares were approximately $ 8.0 million, before deducting offering expenses of $ 0.2 million paid by the Company.

On June 1, 2023, the Company entered into an underwriting agreement with Prime Executions, Inc.

dba Freedom Capital Markets (“Freedom”) acting as the book-running manager of the offering and Bancroft Capital, LLC acting as co-manager in connection with an underwritten public offering of 14,950,000 shares of the Company’s common stock, which includes Freedom’s exercise in full of its overallotment option, pursuant to the 2021 Form S-3.

The underwriter purchased 13,000,000 shares and 1,950,000 shares from the Company on June 5 and June 23, 2023 respectively.

The public offering price was $ 1.27 per share.

The underwriter purchased the shares from the Company at a price of $ 1.1811 per share.

The net proceeds received by the Company for the sale and issuance of the shares were approximately $ 17.6 million, before deducting offering expenses of $ 0.1 million paid by the Company.

In addition, the Company issued warrants to purchase an aggregate of 448,500 shares of Company common stock to Freedom, at an exercise price of $ 2.00 per share.

The Company evaluated the warrants as either equity-classified or liability-classified instruments based on an assessment of the specific terms of the warrants and applicable authoritative guidance in ASC 480 and ASC 815-40.

The Company determined the warrants issued in the Freedom offering failed the indexation guidance under ASC 815-40, specifically, the warrants provide for a Black-Scholes value calculation in the event of certain transactions (“Fundamental Transactions”), which includes a floor on volatility utilized in the value calculation at 100% or greater.

The Company has determined that this provision introduces leverage to the holders of the warrants that could result in a value that would be greater than the settlement amount of a fixed-for-fixed option on the Company’s own equity shares.

Accordingly, pursuant to ASC 815-40, the Company has classified the fair value of the warrants as a liability upon issuance and marked to market each reporting period in the Company’s consolidated statement of operations until their exercise or expiration.

VOLITIONRX LIMITED

3 unchanged sentences

Note 7 - Common Stock (continued)

RSU Settlements

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 Units Vested

Price Settled

Shares Issued

Shares Withheld for Tax

March 25, 2022

April 13, 2022

August 3, 2022

September 7, 2022

October 4, 2022

November 1, 2022

Equity Capital Raises (continued)

The fair value of the warrants as of June 1, 2023, the issuance date, and December 31, 2023, were $ 366,960 and $ 126,649 , respectively.

The warrant liability was estimated using the Black-Scholes pricing model with the following assumptions.

(At Issuance)

December 31, 2023

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

April 21, 2021

Risk-free interest rate

Expected volatility

Expected life (years)

Expected dividend yield

Total fair value

On December 5, 2023 the Company issued 3,205,431 shares of its common stock in a private placement to Wallonie Entreprendre S.A (W.E.) at a purchase price of $ 0.8337 per share, or an aggregate purchase price of approximately $ 2.7 million (€2.5 million).

The shares of common stock will not be registered under the Securities Act of 1933, as amended (the “Securities Act”) or any state securities laws and unless so registered may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws.

Equity Capital Raises

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.

On July 29, 2022, the Company entered into an underwriting agreement with 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, pursuant to the “2021 Form S-3.

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

The offering closed on August 2, 2022.

5 unchanged sentences

Note 7 - Common Stock (continued)

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 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.

During the year ended December 31, 2023, the Company raised aggregate net proceeds (net of broker commissions and fees) of approximately $ 0.7 million under the 2022 EDA (as defined below) through the sale of 279,703 shares of its common stock.

As of December 31, 2023, the Company has raised aggregate net proceeds (net of broker commissions and fees) of approximately $ 1.5 million under the 2022 EDA through the sale of 630,532 shares of its common stock.

See Note 11 for additional details regarding sales under the 2022 EDA subsequent to December 31, 2023.

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 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.

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.

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 its equity distribution agreement with Cantor Fitzgerald & Co.

and Oppenheimer & Co.

(the “2021 EDA”) 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.

2023 and 2022

Issuances Upon Warrant Exercises

For the years ended December 31, 2023 and December 31, 2022 no warrants were exercised.

2023 and 2022

Stock Option Exercises

During the year ended December 31, 2023 and December 31, 2022 no shares of common stock were issued pursuant to the exercise of stock options.

VOLITIONRX LIMITED

3 unchanged sentences

Note 7 - Common Stock (continued)

2022 and 2021

Issuances Upon Warrant Exercises

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

Stock Options Expired / Cancelled

The table below summarizes the stock options granted under the Company’s 2015 Stock Incentive Plan (the “2015 Plan”) or the 2011 Equity Incentive Plan (the “2011 Plan”), as indicated, that expired or were cancelled during the year ended December 31, 2023.

Equity Incentive Plan

Cancelled (#)

Grant Price ($)

VOLITIONRX LIMITED

Notes to Consolidated Financial Statements

For Years Ended December 31, 2023 and 2022

($ expressed in United States Dollars)

Note 7 - Common Stock (continued)

RSU Settlements

During the year ended December 31, 2023 we issued a total of 658,102 shares of common stock from the settlement of RSUs, as follows:

Equity Incentive Plan

VOLITIONRX LIMITED

Notes to Consolidated Financial Statements

For Years Ended December 31, 2023 and 2022

($ expressed in United States Dollars)

Note 7 - Common Stock (continued)

RSU Settlements (continued)

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:

Equity Incentive Plan

VOLITIONRX LIMITED

Notes to Consolidated Financial Statements

For Years Ended December 31, 2023 and 2022

($ expressed in United States Dollars)

No te 8 - Stock-based Compensation

The following table summarizes the changes in warrants outstanding of the Company during the year ended December 31, 2023 and December 31, 2022:

Weighted Average

Exercise Price

Outstanding at December 31, 2021

2 unchanged sentences

Exercisable at December 31, 2023

Warrants Granted

The Company issued warrants to purchase an aggregate of 448,500 shares of Company common stock to Freedom, at an exercise price of $ 2.00 per share.

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.

2 unchanged sentences

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.

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

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

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

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

These warrants 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:

term 3.5 years, stock price $ 4.80 , exercise price $ 4.90 , 75.03 % volatility, 0.59 % risk free rate, and no forfeiture rate.

VOLITIONRX LIMITED

2 unchanged sentences

($ expressed in United States Dollars)

Note 8 - Stock-based Compensation (continued)

No te 8 - Stock-based Compensation (continued)

a ) Warrants (continued)

Warrant Expiration

Effective February 26, 2023, a warrant to purchase 125,000 shares of common stock expired unexercised.

During the year ended December 31, 2022, no warrants expired unexercised.

Below is a table summarizing the warrants issued and outstanding as of December 31, 2023.

4 unchanged sentences

Total remaining unrecognized compensation cost related to non-vested warrants is approximately $ 5,238 and is expected to be recognized over a period of 0.26 years.

As of December 31, 2022, the total intrinsic value of warrants was $ 0 .

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

As of December 31, 2023, the total intrinsic value of warrants was $nil.

VOLITIONRX LIMITED

Notes to Consolidated Financial Statements

For Years Ended December 31, 2023 and 2022

($ expressed in United States Dollars)

No te 8 - Stock-based Compensation (continued)

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

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

5 unchanged sentences

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

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.

On April 17, 2023, 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 1,950,000 shares to an aggregate maximum of 9,700,000 shares, which amendment was approved by the stockholders at an annual meeting held on June 28, 2023.

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

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

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

VOLITIONRX LIMITED

2 unchanged sentences

($ expressed in United States Dollars)

Note 8 - Stock-based Compensation (continued)

No te 8 - Stock-based Compensation (continued)

b ) Options (continued)

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

The following table summarizes the changes in options outstanding of the Company during the years ended December 31, 2023 and December 31, 2022.

8 unchanged sentences

During the year ended December 31, 2023, 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

2 unchanged sentences

($ expressed in United States Dollars)

Note 8 - Stock-based Compensation (continued)

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.

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

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

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

Equity Incentive

Stock Options

New Expiration

Option Expense

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

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

VOLITIONRX LIMITED

Notes to Consolidated Financial Statements

For Years Ended December 31, 2022 and 2021

($ expressed in United States Dollars)

Note 8 - Stock-based Compensation (continued)

No te 8 - Stock-based Compensation (continued)

b ) Options (continued)

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.

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

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

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

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

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

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

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

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

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

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

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

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

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

During the year ended December 31, 2023, the following table summarizes the options cancelled.

Equity Incentive Plan

Options Cancelled (#)

Grant Price ($)

Cancellation Date

During the year ended December 31, 2022, the following table summarizes the options cancelled.

Equity Incentive Plan

Options Cancelled (#)

Grant Price ($)

Cancellation Date

VOLITIONRX LIMITED

2 unchanged sentences

($ expressed in United States Dollars)

Note 8 - Stock-Based Compensation (continued)

No te 8 - Stock-based Compensation (continued)

b ) Options (continued)

3 unchanged sentences

Stock-based compensation expense related to stock options of $ 287,363 and $ 1,127,502 was recorded for the year ended December 31, 2023 and December 31, 2022 respectively.

Total remaining unrecognized compensation cost related to non-vested stock options is approximately $ 287,363 and is expected to be recognized over a period of 0.76 years.

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

As of December 31, 2023, the total intrinsic value of stock options was $nil.

4 unchanged sentences

($ expressed in United States Dollars)

Note 8 - Stock-Based Compensation (continued)

No te 8 - Stock-based Compensation (continued)

c ) Restricted Stock Units (RSUs)

13 unchanged sentences

($ expressed in United States Dollars)

Note 8 - Stock-Based Compensation (continued)

No te 8 - Stock-based Compensation (continued)

c ) Restricted Stock Units (RSUs) (continued)

These RSUs were granted by the Compensation Committee of the Board of Directors in September 2023, with an effective date of October 19, 2023 and vest upon the share price closing above $5.00 per share for a minimum of thirty 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.

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

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.

2 unchanged sentences

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.

VOLITIONRX LIMITED

Notes to Consolidated Financial Statements

For Years Ended December 31, 2023 and 2022

($ expressed in United States Dollars)

No te 8 - Stock-based Compensation (continued)

c ) Restricted Stock Units (RSUs) (continued)

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.

4 unchanged sentences

Below is a table summarizing the RSUs vested during the year ended December 31, 2023, 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)).

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

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

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

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

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

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

Equity Incentive Plan

Shares Issued

Shares Withheld for Taxes

VOLITIONRX LIMITED

2 unchanged sentences

($ expressed in United States Dollars)

Note 8 - Stock-Based Compensation (continued)

No te 8 - Stock-based Compensation (continued)

c ) Restricted Stock Units (RSUs) (continued)

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

Equity Incentive Plan

Shares Issued

2 unchanged sentences

Equity Incentive Plan

Cancellation Date

RSUs Cancelled

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 Plan

Cancellation Date

RSUs Cancelled

VOLITIONRX LIMITED

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($ expressed in United States Dollars)

Note 8 - Stock-Based Compensation (continued)

No te 8 - Stock-based Compensation (continued)

c ) Restricted Stock Units (RSUs) (continued)

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The significant components of deferred income taxes and assets as of December 31, 2023 and December 31, 2022 are as follows:

Net Deferred Tax Liability

December 31, 2023

December 31, 2022

Net Deferred Tax Liability

Excess of tax over book depreciation and amortization

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Accrued expenses

Unrealized Gain/Loss

Capitalized research expenses

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( 6,265,160 )

Summary Rate Reconciliation

December 31, 2023

December 31, 2022

Summary Rate Reconciliation

Federal statutory rate

State income taxes, net of federal benefit

Permanent Differences

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($ expressed in United States Dollars)

Note 10 - Commitments and Contingencies

No te 10 - Commitments and Contingencies

a) Finance Lease Obligations

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($ expressed in United States Dollars)

Note 10 – Commitments and Contingencies (continued)

No te 10 – Commitments and Contingencies (continued)

c) Grants Repayable (continued)

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As of December 31, 2023, €1 million has been drawn down under this agreement and the principal balance payable was $ 275,974 .

In 2018, the Company entered into a 4 -year loan agreement with Namur Innovation and Growth for € 500,000 with fixed interest rate of 4.00 %, maturing June 2022 .

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

In 2019, the Company entered into a 4 -year loan agreement with Namur Innovation and Growth for € 500,000 with fixed interest rate of 4.80 %, maturing September 2024 .

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As of December 31, 2023, the amount that has been drawn down under this agreement was € 450,000 , representing a principal balance payable of $ 289,773 .

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 .

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Note 10 – Commitments and Contingencies (continued)

No te 10 – Commitments and Contingencies (continued)

d) Long-Term Debt (continued)

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As of December 31, 2023, the amount that has been drawn down under this agreement was € 500,000 , representing a principal balance payable of $ 551,949 .

In June 2023, the Company entered into a 4 -year loan agreement with Namur Invest for a maximum of € 400,000 with fixed interest rate of 7.00 %, maturing June 2027 .

As of December 31, 2023, € 200,000 had been drawn down under this agreement and the principal balance payable was $ 220,780 .

On December 1, 2023, the Company entered into a 5 -year loan agreement with Wallonie Entreprendre S.A.

for a maximum of € 2.5 million with fixed interest rate of 7.68 %, maturing December 2028 .

As of December 31, 2023, € 1,500,000 had been drawn down under this agreement and the principal balance payable was $ 1,655,845 .

As of December 31, 2023, the total balance for long-term debt payable was $ 4,831,867 and the payments remaining were as follows:

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Total Long-Term Debt

VOLITIONRX LIMITED

Notes to Consolidated Financial Statements

For Years Ended December 31, 2023 and 2022

($ expressed in United States Dollars)

No te 10 – Commitments and Contingencies (continued)

e) Collaborative Agreement Obligations

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As of December 31, 2023, $ 510,000 is still to be paid by the Company under this agreement.

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

As of December 31, 2022, $ 0 is still to be paid by the Company under this agreement.

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 .

In 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 $ 449,406 .

As of December 31, 2023, $ 449,406 is still to be paid by the Company under this agreement.

In August 2023, the Company entered into a project research agreement with Guy’s and St Thomas’ NHS Foundation Trust to evaluate the practical clinical utility of the Nu.Q ® H3.1 nucleosome levels in adult patients with sepsis to facilitate early diagnosis and prognostication for a cost to the Company of £ 162,338 .

As of December 31, 2023, $ 206,697 is still to be paid by the Company under this agreement and as of December 31, 2023, $ 41,339 is due by the Company under this agreement.

In July 2023, the Company entered into a research agreement with Xenetic Biosciences Inc and CLS Therapeutics Ltd to evaluate the anti-tumoral effects of Nu.Q ® CAR T cells for a cost to the Company of $ 107,589 .

As of December 31, 2023, $ 107,589 is still to be paid by the Company under this agreement and as of December 31, 2023, $ 26,142 is due by the Company under this agreement.

As of December 31, 2023, the total amount to be paid for future research and collaboration commitments was approximately $ 1,273,692 and the annual payments remaining were as follows:

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Note 10 – Commitments and Contingencies (continued)

No te 10 – Commitments and Contingencies (continued)

f) Other Commitments

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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 anticipates DXOCRO’s services under this agreement will be completed by the end of the first quarter 2024 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.

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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.

As of December 31, 2023, $ 90,862 is payable under the A&R Master Agreement, and up $ 208,320 maybe payable by Company in future periods for services rendered.

See Note 11 for additional details regarding the A&R Master Agreement subsequent to December 31, 2023.

g) Legal Proceedings

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Note 10 – Commitments and Contingencies (continued)

No te 10 – Commitments and Contingencies (continued)

h) Commitments in Respect of Corporate Goals and Performance-Based 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 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, each of which vests 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 August 2021 and October 2021 awards, 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.

In October 2022, the Compensation Committee of the Board of Directors approved the granting of RSUs under the 2015 Plan to various employees in exchange for services provided to the Company.

These RSUs vest upon the achievement of certain corporate goals focused around product development and commercialization with further time based vesting over three years, and subject to continued service.

In October 2022, the Compensation Committee of the Board of Directors approved the granting of RSUs under the 2015 Plan to various employees in exchange for services provided to the Company.

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.

An aggregate of 1,144,000 RSUs were issued under the 2015 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 Plan in connection with the August 2021 and October 2021 grants.

As of December 31, 2023, the Company has recognized compensation expense of $ 901,410 in relation to the options from the 2021 grants that vested in 2023.

The Company has no unrecognized compensation expense in relation 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)

No te 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.

As of December 31, 2023, the Company has recognized compensation expense of $ 759,039 in relation to RSUs from the 2021 grants that have vested in 2023.

The Company has no unrecognized compensation expense in relation to such RSUs, based on the outcomes related to the prescribed performance targets on the outstanding awards.

As of December 31, 2023, the Company has recognized total compensation expense of $ 1,077,417 of which $ 527,940 is in relation to RSUs from the 2022 grants that have vested in 2023, $ 325,207 is in relation to RSUs from such grants that will vest in 2024, and $ 224,270 is in relation to RSUs from such grants that will vest in 2025.

The Company has unrecognized compensation expense of $ 507,679 in relation to such RSUs, based on the outcomes related to the prescribed performance targets on the outstanding awards.

In September 2023, the Compensation Committee of the Board of Directors approved the granting of cash bonuses, payable upon achievement of various corporate goals focused around revenue, operations and regulatory, 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, 2023, and June 30, 2024 of 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, 2023, the Company has accrued compensation expense of $ 1,071,198 in relation to the cash bonuses to be paid upon achievement of the specified corporate goals based on the expected outcomes related to the prescribed performance targets.

In September 2023, the Compensation Committee of the Board of Directors approved the granting of an aggregate of 1,569,000 RSUs under the 2015 Plan to various personnel including directors, executives, members of management, consultants and employees of the Company and/or its subsidiaries in exchange for services provided to the Company.

These RSUs vest upon the achievement of certain corporate goals focused around revenue, operations and regulatory targets as of December 31, 2023, and June 30, 2024, as set forth in the minutes of the Compensation Committee, with further time based vesting over three years, and subject to continued service by the award recipient.

The achievement of the corporate goals is to be determined by the Compensation Committee in its sole discretion.

VOLITIONRX LIMITED

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($ expressed in United States Dollars)

No te 10 – Commitments and Contingencies (continued)

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

In September 2023, the Compensation Committee of the Board of Directors approved the granting of an aggregate of 450,000 RSUs under the 2015 Plan to various employees in exchange for services provided to the Company.

These RSUs have an effective date of grant of October 19, 2023, vest upon the share price closing above $ 5.00 per share for a minimum of 30 consecutive trading days within a period of three years from the effective date of grant and ending October 19, 2026, 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 by the award recipients.

As of December 31, 2023, the Company had recognized total compensation expense of $ 173,986 .

The Company has unrecognized compensation expense of $ 924,313 in relation to the RSUs from the 2023 grants, of which $ 271,342 in relation to RSUs that will vest in 2024, $ 318,588 in relation to RSUs that will vest in 2025, and $ 334,383 in relation to RSUs that will vest in 2026.

based on the outcomes related to the prescribed performance targets on the outstanding awards.

As of December 31, 2023, the Company has paid compensation expense of $ 1.1 million in relation to the July 1, 2023 specified corporate goals based on the actual outcomes related to the prescribed performance targets.

VOLITIONRX LIMITED

Notes to Consolidated Financial Statements

For Years Ended December 31, 2023 and 2022

($ expressed in United States Dollars)

Note 11 - Subsequent Events

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.

Equity Distribution Agreement

During the period from January 1, 2024 through March 15, 2024, the Company sold 13,350 shares of common stock for aggregate proceeds (net of broker commissions and fees) of approximately $ 15,733 under the 2022 EDA.

On January 13, 2024, 21,582 RSUs previously granted to a contractor vested and resulted in the issuance of 21,582 shares of common stock.

On March 1, 2024, 9,000 RSUs previously granted to employees vested and resulted in the issuance of 6,057 shares of common stock.

An aggregate of 2,943 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.

Effective February 22, 2024, the Company granted RSUs of 14,000 shares of common stock to an employee of the Company in exchange for services provided to the Company.

These RSUs vest over 3 years , with one-third vesting on each of February 22, 2025, February 22, 2026 and February 22, 2027, subject to continued service by the employee, and will result in total compensation expense of $ 13,590 .

Issuance of Shares

See the reference below under “ License Agreement” regarding the issuance of 129,132 shares of restricted common stock to EpiCypher.

RSUs Cancellations

On January 16, 2024, 36,000 RSUs previously granted to an employee were cancelled and returned as authorized shares under the 2015 Plan upon cessation of employment of such employee prior to vesting.

On February 9, 2024, 2,000 RSUs previously granted to an employee were cancelled and returned as authorized shares under the 2015 Plan upon the cessation of employment of such employee prior to vesting.

Cash Bonus Payments

On January 24, 2024, the Compensation Committee of the Board of Directors approved the achievement of certain of the corporate milestones related to the September 28, 2023 authorization for the payment of cash bonuses to various personnel, including directors, executives, members of management, consultants and employees of the Company and/or its subsidiaries, upon the achievement of certain corporate goals focused around revenue, operations and regulatory, resulting in the vesting and payment of 85% of the cash bonuses.

License Agreement

On January 18.

2024, Belgian Volition entered into a License Agreement with EpiCypher, Inc., pursuant to which the Company may research, develop, manufacture and commercialize products and services using method covered by certain patents of EpiCypher.

In addition to license fees and royalty payments, the Company issued shares of its restricted common stock to EpiCypher effective March 12, 2024, in a private placement.

VOLITIONRX LIMITED

Notes to Consolidated Financial Statements

For Years Ended December 31, 2023 and 2022

($ expressed in United States Dollars)

Note 11 - Subsequent Events (continued)

Diagnostic Oncology CRO, LLC Second A&R Master Agreement

Effective February 10, 2024 the Company and DXOCRO further amended and restated the A&R Master Agreement to expand the scope of DXOCRO’s consultant services provided thereunder (the “Second A&R Master Agreement”).

The Second A&R Master Agreement requires DXOCRO to conduct a prospective optimization/range finding study of Volition’s Nu.Q® H3.1 in vitro diagnostic (IVD) test proposed for use in sepsis.

The study is an extension of the sepsis monitoring clinical trial that was previously covered under a separate exhibit.

The Company anticipates DXOCRO’s additional services under this Agreement will be completed by the end of the third quarter of 2024 at a total additional cost to the Company of up to $ 0.7 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 Second A&R Master Agreement terminates on the later of December 31, 2025 or the date upon which all services have been completed.

Employment Agreement

On March 19, 2024, Volition Diagnostics entered into a Contract of Employment with Dr.

Andrew Retter pursuant to which Dr.

Retter will serve as Chief Medical Officer commencing April 1, 2024.

The term of the Contract of Employment is perpetual until terminated upon at least 12 weeks’ prior notice (or such greater period as required by statute) and provides for an annual base salary of £ 180,000 payable monthly in arrears as well as contributions towards Dr.

Retter’s pension.

END NOTES TO FINANCIALS

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What changed 10-K

Item 8. Financial Statements and Supplementary Data