UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended JuneSeptember 30, 2020

 

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ______ to _____

 

Commission File Number: 001-36833

 

VOLITIONRX LIMITED

(Exact name of registrant as specified in its charter)

 

DelawareDelaware

(State or other jurisdiction of incorporation or organization)

 

91-1949078

(I.R.S. Employer

Identification No.)

13215 Bee Cave Parkway

Suite 125, Galleria Oaks B

Austin, Texas 78738

(Address of principal executive offices)

 

+1 (646) 650–1351

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

 

 

Title of Each Class

Trading Symbol(s)

Name of Each Exchange on which

Registered

Common Stock

VNRX

NYSE American

 

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X]Yes  [   ]No] No

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). [X]Yes  [   ]No] No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

 Large accelerated filer

[   ]

 

 

Accelerated filer

[  ]

Non-accelerated filer

[X] 

 

 

Smaller reporting company

[X]

 

 

 

 

Emerging growth company

[   ]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [   ]

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). [   ]Yes] Yes  [X]No

 

As of August 6,November 4, 2020, there were 47,920,37748,197,687 shares of the registrant’s $0.001 par value common stock issued and outstanding.




VOLITIONRX LIMITED

QUARTERLY REPORT ON FORM 10-Q

FOR THE THREE AND SIXNINE MONTHS ENDED JUNESEPTEMBER 30, 2020

 

TABLE OF CONTENTS

 

 

PART I

 

FINANCIAL INFORMATION

 

 

PAGE

 

Item 1.

 

FINANCIAL STATEMENTS (UNAUDITED)

 

 

3

 

Item 2.

 

MANAGEMENT’S   DISCUSSION   AND   ANALYSIS   OF   FINANCIAL   CONDITION AND RESULTS OF OPERATIONS

 

 

 

2224

 

Item 3.

 

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

 

3031

 

Item 4.

 

CONTROLS AND PROCEDURES

 

 

3031

 

PART II

 

OTHER INFORMATION

 

 

 

Item 1.

 

LEGAL PROCEEDINGS

 

 

3233

 

Item 1A.

 

RISK FACTORS

 

 

3233

 

Item 2.

 

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

 

3233

 

Item 3.

 

DEFAULTS UPON SENIOR SECURITIES

 

 

3233

 

Item 4.

 

MINE SAFETY DISCLOSURES

 

 

3233

 

Item 5.

 

OTHER INFORMATION

 

 

3233

 

Item 6.

 

EXHIBITS

 

 

3335

 

SIGNATURES

 

 

 

34

36

 

Use of Terms

 

Except as otherwise indicated by the context, references in this Report to “Company,” “VolitionRx,” “Volition,” “we,” “us,” and “our” are references to VolitionRx Limited and its wholly-owned subsidiaries, Singapore Volition Pte. Limited, Belgian Volition SPRL, Volition Diagnostics UK Limited, Volition America, Inc., Volition Germany GmbH, andas well as its majority-owned subsidiary Volition Veterinary Diagnostics Development LLC. Additionally, unless otherwise specified, all references to “$” refer to the legal currency of the United States of America.

 

NucleosomicsTM and Nu.QTM and their respective logos are trademarks and/or service marks of VolitionRx and its subsidiaries. All other trademarks, service marks and trade names referred to in this Report are the property of their respective owners.




PART I - FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED) 

 

 

Page

 

 

Condensed Consolidated Balance Sheets

4

 

Condensed Consolidated Statements of Operations and Comprehensive Loss

5

 

Condensed Consolidated Statements of Stockholders’ Equity

6

 

Condensed Consolidated Statements of Cash Flows

78

 

Notes to the Condensed Consolidated Financial Statements

89

 

 




VOLITIONRX LIMITED

Condensed Consolidated Balance Sheets

(Expressed in United States Dollars, except share numbers)

 

June 30,

 

December 31,

 

2020

 

2019

 

$

 

$

ASSETS

(UNAUDITED)

 

 

Current Assets

 

 

 

Cash and cash equivalents

21,305,266

 

16,966,168

Accounts receivable

3,223

 

-

Prepaid expenses

585,313

 

267,518

Other current assets

525,013

 

322,593

Total Current Assets

22,418,815

 

17,556,279

 

 

 

 

Property and equipment, net

3,265,025

 

2,981,225

Operating lease right-of-use assets

234,095

 

381,483

Intangible assets, net

328,703

 

372,305

Total Assets

26,246,638

 

21,291,292

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

Current Liabilities

 

 

 

Accounts payable

1,414,266

 

627,253

Accrued liabilities

2,333,253

 

2,168,588

Management and directors’ fees payable

10,499

 

21,979

Current portion of long-term debt

692,715

 

647,569

Current portion of finance lease liabilities

54,276

 

97,946

Current portion of operating lease liabilities

163,516

 

257,244

Current portion of grant repayable

39,321

 

39,295

Total Current Liabilities

4,707,846

 

3,859,874

 

 

 

 

Long-term debt, net of current portion

1,914,207

 

2,195,278

Finance lease liabilities, net of current portion

580,787

 

607,708

Operating lease liabilities, net of current portion

78,495

 

131,875

Grant repayable, net of current portion

302,106

 

297,991

Total Liabilities

7,583,441

 

7,092,726

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

Common Stock

 

 

 

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

 

 

 

Issued and outstanding: 46,659,554 shares and 41,125,303 shares, respectively

46,660

 

41,125

Additional paid-in capital

118,915,549

 

103,853,627

Accumulated other comprehensive income

425,276

 

125,670

Accumulated deficit

(100,708,942)

 

(89,821,856)

Total VolitionRx Limited Stockholders' Equity

18,678,543

 

14,198,566

  Non-controlling interest

(15,346)

 

-

Total Stockholders’ Equity

18,663,197

 

14,198,566

 

 

 

 

Total Liabilities and Stockholders’ Equity

26,246,638

 

21,291,292

 

 

 

 

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

September 30,

 

December 31,

 

2020

 

2019

 

$

 

$

ASSETS

(UNAUDITED)

 

 

Current Assets

 

 

 

Cash and cash equivalents

20,927,729

 

16,966,168

Accounts receivable

573

 

-

Prepaid expenses

444,872

 

267,518

Other current assets

791,349

 

322,593

Total Current Assets

22,164,523

 

17,556,279

 

 

 

 

Property and equipment, net

3,343,297

 

2,981,225

Operating lease right-of-use assets

257,903

 

381,483

Intangible assets, net

321,848

 

372,305

Total Assets

26,087,571

 

21,291,292

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

Current Liabilities

 

 

 

Accounts payable

849,146

 

627,253

Accrued liabilities

2,403,102

 

2,168,588

Management and directors’ fees payable

47,675

 

21,979

Current portion of long-term debt

765,151

 

647,569

Current portion of finance lease liabilities

57,047

 

97,946

Current portion of operating lease liabilities

157,796

 

257,244

Current portion of grant repayable

37,992

 

39,295

Total Current Liabilities

4,317,909

 

3,859,874

 

 

 

 

Long-term debt, net of current portion

1,831,021

 

2,195,278

Finance lease liabilities, net of current portion

591,658

 

607,708

Operating lease liabilities, net of current portion

108,305

 

131,875

Grant repayable, net of current portion

277,267

 

297,991

Total Liabilities

7,126,160

 

7,092,726

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

Common Stock

 

 

 

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

 

 

 

Issued and outstanding: 48,064,575 shares and 41,125,303 shares, respectively

48,065

 

41,125

Additional paid-in capital

124,121,703

 

103,853,627

Accumulated other comprehensive income

(148,121)

 

125,670

Accumulated deficit

(105,036,840)

 

(89,821,856)

Total VolitionRx Limited Stockholders' Equity

18,984,807

 

14,198,566

  Non-controlling interest

(23,396)

 

-

Total Stockholders’ Equity

18,961,411

 

14,198,566

 

 

 

 

Total Liabilities and Stockholders’ Equity

26,087,571

 

21,291,292

 

 

 

 

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




VOLITIONRX LIMITED

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

(Expressed in United States Dollars, except share numbers)

 

Three Months ended June 30,

 

Six Months ended June 30,

2020

 

2019

 

2020

 

2019

$

 

$

 

$

 

$

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

Royalty

1,872

 

-

 

2,112

 

-

Product

3,322

 

-

 

3,626

 

-

Total Revenues

5,194

 

-

 

5,738

 

-

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

Research and development

3,492,845

 

2,478,930

 

7,387,811

 

4,953,489

General and administrative

1,508,836

 

1,436,461

 

3,212,358

 

2,665,901

Sales and marketing

215,891

 

238,124

 

489,845

 

522,404

Total Operating Expenses

5,217,572

 

4,153,515

 

11,090,014

 

8,141,794

 

 

 

 

 

 

 

 

Operating Loss

(5,212,378)

 

(4,153,515)

 

(11,084,276)

 

(8,141,794)

 

 

 

 

 

 

 

 

Other Income (Expenses)

 

 

 

 

 

 

 

   Grant income

90,946

 

-

 

98,870

 

-

   Gain on disposal of fixed assets

93,202

 

-

 

93,202

 

-

   Interest income

7,741

 

29,459

 

46,155

 

41,023

   Interest expense

(22,604)

 

(33,115)

 

(56,383)

 

(63,216)

   Other expenses

-

 

-

 

-

 

(196,957)

Total Other Income (Expenses)

169,285

 

(3,656)

 

181,844

 

(219,150)

 

 

 

 

 

 

 

 

Provision for Income Taxes

-

 

-

 

-

 

-

 

 

 

 

 

 

 

 

Net Loss

(5,043,093)

 

(4,157,171)

 

(10,902,432)

 

(8,360,944)

Net Loss attributable to Non-Controlling Interest

5,779

 

-

 

15,346

 

-

Net Loss attributable to VolitionRx Limited Stockholders

(5,037,314)

 

(4,157,171)

 

(10,887,086)

 

(8,360,944)

 

 

 

 

 

 

 

 

Other Comprehensive Income (Loss)

 

 

 

 

 

 

 

Foreign currency translation adjustments

(74,320)

 

49,913

 

299,606

 

25,859

 

 

 

 

 

 

 

 

Net Comprehensive Loss

(5,117,413)

 

(4,107,258)

 

(10,602,826)

 

(8,335,085)

 

 

 

 

 

 

 

 

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

(0.12)

 

(0.11)

 

(0.26)

 

(0.22)

 

 

 

 

 

 

 

 

Weighted Average Shares Outstanding

 

 

 

 

 

 

 

– Basic and Diluted

43,414,318

 

38,876,262

 

42,312,172

 

37,266,356

 

 

 

 

 

 

 

 

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

Three Months ended

September 30,

 

Nine Months ended

September 30,

2020

 

2019

 

2020

 

2019

$

 

$

 

$

 

$

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

Services

-

 

16,204

 

-

 

16,204

Royalty

-

 

892

 

2,112

 

892

Product

575

 

-

 

4,201

 

-

Total Revenues

575

 

17,096

 

6,313

 

17,096

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

Research and development

3,180,177

 

2,642,610

 

10,567,988

 

7,596,097

General and administrative

1,080,308

 

1,354,992

 

4,292,666

 

4,020,893

Sales and marketing

244,510

 

195,641

 

734,355

 

718,047

Total Operating Expenses

4,504,995

 

4,193,243

 

15,595,009

 

12,335,037

 

Operating Loss

(4,504,420)

 

(4,176,147)

 

(15,588,696)

 

(12,317,941)

 

 

 

 

 

 

 

 

Other Income (Expenses)

 

 

 

 

 

 

 

   Grant income

-

 

-

 

98,870

 

-

   Gain on disposal of fixed assets

200,393

 

-

 

293,595

 

-

   Interest income

2,801

 

27,633

 

48,956

 

68,656

   Interest expense

(34,722)

 

(32,291)

 

(91,105)

 

(95,507)

   Other expenses

-

 

-

 

-

 

(196,957)

 

 

 

 

 

 

 

 

Total Other Income (Expenses)

168,472

 

(4,658)

 

350,316

 

(223,808)

 

 

 

 

 

 

 

 

Provision for Income Taxes

-

 

-

 

-

 

-

 

Net Loss

(4,335,948)

 

(4,180,805)

 

(15,238,380)

 

(12,541,749)

Net Loss attributable to Non-Controlling Interest

8,050

 

-

 

23,396

 

-

Net Loss attributable to VolitionRx Limited Stockholders

(4,327,898)

 

(4,180,805)

 

(15,214,984)

 

(12,541,749)

 

 

 

 

 

 

 

 

Other Comprehensive Income (Loss)

 

 

 

 

 

 

 

Foreign currency translation adjustments

(573,397)

 

401,309

 

(273,791)

 

427,168

 

Net Comprehensive Loss

(4,909,345)

 

(3,779,496)

 

(15,512,171)

 

(12,114,581)

 

 

 

 

 

 

 

 

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

(0.09)

 

(0.10)

 

(0.34)

 

(0.33)

 

 

 

 

 

 

 

 

Weighted Average Shares Outstanding

 

 

 

 

 

 

 

– Basic and Diluted

47,027,011

 

39,880,246

 

44,148,793

 

38,538,394

 

 

 

 

 

 

 

 

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




VOLITIONRX LIMITED

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)

(Expressed in United States Dollars, except share numbers)

For the Three and Six Months ended June 30, 2020 and June 30, 2019

For the Three and Nine Months ended September 30, 2020 and September 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

Additional

Other

 

Non

 

 

Common Stock

Paid-in

Comprehensive

Accumulated

Controlling

 

 

Shares

Amount

Capital

Income (Loss)

Deficit

Interest

Total

#

$

$

$

$

$

$

Balance, December 31, 2019

41,125,303

41,125

103,853,627

125,670

(89,821,856)

-

14,198,566

 

 

 

 

 

 

 

 

Common stock issued for Director compensation in Volition Germany

73,263

73

333,896

-

-

-

333,969

Common stock issued in exercise of stock options

19,430

20

(20)

-

-

-

-

Common stock repurchase and retirement

(11,364)

(11)

(54,423)

-

-

-

(54,434)

Stock-based compensation

-

-

192,669

-

-

-

192,669

Foreign currency translation

-

-

-

373,926

-

-

373,926

Net loss for the period

-

-

-

-

(5,849,772)

(9,567)

(5,859,339)

Balance, March 31, 2020

41,206,632

41,207

104,325,749

499,596

(95,671,628)

(9,567)

9,185,357

Common stock issued in public offering, net

5,452,922

5,453

14,229,160

-

-

-

14,234,613

Stock-based compensation

-

-

360,640

-

-

-

360,640

Foreign currency translation

-

-

-

(74,320)

-

-

(74,320)

Net loss for the period

-

-

-

-

(5,037,314)

(5,779)

(5,043,093)

Balance, June 30, 2020

46,659,554

46,660

118,915,549

425,276

(100,708,942)

(15,346)

18,663,197

Common stock issued in public offering, net

1,252,183

1,252

4,820,839

-

-

-

4,822,091

Common stock issued in exercise of stock options

127,838

128

82,372

-

-

-

82,500

Common stock issued for cash exercise of warrants

25,000

25

61,725

-

-

-

61,750

Stock-based compensation

-

-

428,683

-

-

-

428,683

Tax withholdings paid related to stock-based compensation

-

-

(187,465)

-

-

-

(187,465)

Foreign currency translation

-

-

-

(573,397)

-

-

(573,397)

Net loss for the period

-

-

-

-

(4,327,898)

(8,050)

(4,335,948)

Balance, September 30, 2020

48,064,575

48,065

124,121,703

(148,121)

(105,036,840)

(23,396)

18,961,411

 

 

 

 

 

 

 

 

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




VOLITIONRX LIMITED

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)

(Expressed in United States Dollars, except share numbers)

 

 

 

 

 

Accumulated

 

 

 

 

 

 

Additional

Other

 

Non

 

 

Common Stock

Paid-in

Comprehensive

Accumulated

Controlling

 

 

Shares

Amount

Capital

Income (Loss)

Deficit

Interest

Total

#

$

$

$

$

$

$

Balance, December 31, 2019

41,125,303

41,125

103,853,627

125,670

(89,821,856)

-

14,198,566

 

 

 

 

 

 

 

 

Common stock issued for Director compensation in Volition Germany

73,263

73

333,896

-

-

-

333,969

Common stock issued for cashless exercise of stock options

19,430

20

(20)

-

-

-

-

Stock-based compensation

 

-

192,669

-

-

-

192,669

Stock repurchase

(11,364)

(11)

(54,423)

-

-

-

(54,434)

Foreign currency translation

-

-

-

373,926

-

-

373,926

Net loss for the period

-

-

-

-

(5,849,772)

(9,567)

(5,859,339)

Balance, March 31, 2020

41,206,632

41,207

104,325,749

499,596

(95,671,628)

(9,567)

9,185,357

 

Common stock issued for cash, net

5,452,922

5,453

14,229,160

-

-

-

14,234,613

Stock-based compensation

-

-

360,640

-

-

-

360,640

Foreign currency translation

-

-

-

(74,320)

-

-

(74,320)

Net loss for the period

-

-

-

-

(5,037,314)

(5,779)

(5,043,093)

Balance, June 30, 2020

46,659,554

46,660

118,915,549

425,276

(100,708,942)

(15,346)

18,663,197

 

 

 

 

Accumulated

 

 

 

 

 

 

Additional

Other

 

Non

 

 

Common Stock

Paid-in

Comprehensive

Accumulated

Controlling

 

 

Shares

Amount

Capital

Income (Loss)

Deficit

Interest

Total

#

$

$

$

$

$

$

Balance, December 31, 2018

35,335,378

35,335

85,604,271

223,651

(73,722,801)

-

12,140,456

Common stock issued for cash

2,478,613

2,479

6,658,192

-

-

-

6,660,671

Stock-based compensation

-

-

340,458

-

-

-

340,458

Modification of financing warrants

-

-

196,957

-

-

-

196,957

Foreign currency translation

-

-

-

(24,054)

-

-

(24,054)

Net loss for the period

-

-

-

-

(4,203,773)

-

(4,203,773)

Balance, March 31, 2019

37,813,991

37,814

92,799,878

199,597

(77,926,574)

-

15,110,715

 

Common stock issued for cash

1,666,667

1,667

4,998,334

-

-

-

5,000,001

Stock-based compensation

-

-

379,507

-

-

-

379,507

Foreign currency translation

-

-

-

49,913

-

-

49,913

Net loss for the period

-

-

-

-

(4,157,171)

-

(4,157,171)

Balance, June 30, 2019

39,480,658

39,481

98,177,719

249,510

(82,083,745)

-

16,382,965

 

 

 

 

 

 

 

 

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

For the Three and Nine Months ended September 30, 2020 and September 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

Additional

Other

 

Non

 

 

Common Stock

Paid-in

Comprehensive

Accumulated

Controlling

 

 

Shares

Amount

Capital

Income (Loss)

Deficit

Interest

Total

#

$

$

$

$

$

$

Balance, December 31, 2018

35,335,378

35,335

85,604,271

223,651

(73,722,801)

-

12,140,456

Common stock issued in exercise of warrants

2,478,613

2,479

6,658,192

-

-

-

6,660,671

Stock-based compensation

-

-

340,458

-

-

-

340,458

Modification of financing warrants

-

-

196,957

-

-

-

196,957

Foreign currency translation

-

-

-

(24,054)

-

 

(24,054)

Net loss for the period

-

-

-

-

(4,203,773)

-

(4,203,773)

Balance, March 31, 2019

37,813,991

37,814

92,799,878

199,597

(77,926,574)

-

15,110,715

Common stock issued in exercise of warrants

1,666,667

1,667

4,998,334

-

-

-

5,000,001

Stock-based compensation

-

-

379,507

-

-

-

379,507

Foreign currency translation

-

-

-

49,913

-

-

49,913

Net loss for the period

-

-

-

-

(4,157,171)

-

(4,157,171)

Balance, June 30, 2019

39,480,658

39,481

98,177,719

249,510

(82,083,745)

-

16,382,965

 

 

 

 

 

 

 

 

Common stock issued in exercise of warrants

1,609,195

1,609

4,825,976

-

-

-

4,827,585

Common stock issued in exercise of stock options

2,487

2

(2)

-

-

-

-

Stock-based compensation

-

-

370,726

-

-

-

370,726

Foreign currency translation

-

-

-

401,309

-

-

401,309

Net loss for the period

-

-

-

-

(4,180,805)

-

(4,180,805)

Balance, September 30, 2019

41,092,340

41,092

103,374,419

650,819

(86,264,550)

-

17,801,780

 

 

 

 

 

 

 

 

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




VOLITIONRX LIMITED

Condensed Consolidated Statements of Cash Flows (Unaudited)

(Expressed in United States Dollars)

 

Six Months ended June 30,

2020

 

2019

$

 

$

Operating Activities

 

 

 

Net loss

(10,902,432)

 

(8,360,944)

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

 

 

 

Depreciation and amortization

359,233

 

339,277

Amortization of operating lease right-of-use assets

125,871

 

26,632

Gain on disposal of fixed assets

(93,202)

 

-

Stock-based compensation

553,309

 

719,965

Shares issued for Director compensation in Volition Germany

333,969

 

-

Financing costs for warrants modified

-

 

196,957

Changes in operating assets and liabilities:

 

 

 

Prepaid expenses

(317,795)

 

(294,833)

Accounts receivable

(3,223)

 

-

Other current assets

(109,213)

 

36,636

Accounts payable and accrued liabilities

959,425

 

894,097

Management and directors’ fees payable

(10,497)

 

44,336

Right-of-use assets operating leases liabilities

(125,331)

 

(25,598)

Net Cash Used In Operating Activities

(9,229,886)

 

(6,423,475)

 

 

 

 

Investing Activities:

 

Purchases of property and equipment

(597,366)

 

(236,831)

Net Cash Used In Investing Activities

(597,366)

 

(236,831)

 

 

 

 

Financing Activities:

 

Net proceeds from issuances of common shares

14,234,613

 

11,660,672

Common stock repurchased

(54,434)

 

-

Proceeds from grants repayable

3,802

 

32,652

Proceeds from long-term debt

-

 

282,513

Payments on long-term debt

(234,172)

 

(147,421)

Payments on finance lease obligations

(69,483)

 

(71,165)

Net Cash Provided By Financing Activities

13,880,326

 

11,757,251

 

 

 

 

Effect of foreign exchange on cash

286,024

 

(13,440)

 

 

 

 

Net Change in Cash

4,339,098

 

5,083,505

 

 

 

 

Cash and cash equivalents – Beginning of Period

16,966,168

 

13,427,222

 

 

 

 

Cash and cash equivalents – End of Period

21,305,266

 

18,510,727

 

 

 

 

Supplemental Disclosures of Cash Flow Information:

 

 

 

Interest paid

56,383

 

63,216

 

Non-Cash Financing Activities:

 

 

 

Common Stock issued on cashless exercises of stock options

20

 

-

Offering costs from issuance of common stock

1,229,169

 

-

 

 

 

 

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

Nine Months ended September 30,

2020

 

2019

$

 

$

Operating Activities

 

 

 

Net loss

(15,238,380)

 

(12,541,749)

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

 

 

 

Depreciation and amortization

525,150

 

509,736

Amortization of operating lease right-of-use assets

194,749

 

51,090

Gain on disposal of fixed assets

(293,595)

 

-

Stock-based compensation

981,992

 

1,090,691

Common stock issued for Director compensation in Volition Germany

333,969

 

-

Financing costs for warrants modified

-

 

196,957

Changes in operating assets and liabilities:

 

 

 

Prepaid expenses

(177,354)

 

(163,638)

Accounts receivable

(573)

 

(16,031)

Other current assets

(274,398)

 

44,904

Accounts payable and accrued liabilities

365,167

 

687,636

Management and directors’ fees payable

47,672

 

47,575

Right-of-use assets operating leases liabilities

(194,146)

 

(48,475)

Net Cash Used In Operating Activities

(13,729,747)

 

(10,141,304)

 

 

 

 

Investing Activities:

 

Purchases of property and equipment

(679,782)

 

(359,502)

Proceeds from sales of property and equipment

97,388

 

-

Net Cash Used In Investing Activities

(582,394)

 

(359,502)

 

 

 

 

Financing Activities:

 

Net proceeds from issuances of common shares

19,200,954

 

16,488,257

Tax withholdings paid related to stock-based compensation

(187,465)

 

-

Common stock repurchased

(54,434)

 

-

Proceeds from grants repayable

3,802

 

32,652

Proceeds from long-term debt

-

 

282,513

Payments on long-term debt

(356,701)

 

(262,661)

Payments on grants repayable

(41,257)

 

(39,261)

Payments on finance lease obligations

(83,221)

 

(106,616)

Net Cash Provided By Financing Activities

18,481,678

 

16,394,884

 

 

 

 

Effect of foreign exchange on cash

(207,976)

 

375,869

 

 

 

 

Net Change in Cash

3,961,561

 

6,269,947

Cash and cash equivalents – Beginning of Period

16,966,168

 

13,427,222

Cash and cash equivalents – End of Period

20,927,729

 

19,697,169

 

 

 

 

Supplemental Disclosures of Cash Flow Information:

 

 

 

Interest paid

91,105

 

95,507

 

Non-Cash Financing Activities:

 

 

 

Common stock issued on cashless exercises of stock options

118

 

2

Offering costs from issuance of common stock

1,229,169

 

-

 

 

 

 

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




VOLITIONRX LIMITED

Notes to the Condensed Consolidated Financial Statements (Unaudited)

($ expressed in United States Dollars)

 

Note 1 – Basis of Presentation and Summary of Significant Accounting Policies

 

Basis of Presentation

 

The interim consolidated financial statements of VolitionRx Limited (the “Company”, "VolitionRx," "we" or "us") for the three and sixnine months ended JuneSeptember 30, 2020 and JuneSeptember 30, 2019, respectively, are not audited. Our consolidated financial statements are prepared in accordance with the requirements for unaudited interim periods and, consequently, do not include all disclosures required to be made in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In the opinion of our management, the accompanying consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of our financial position as of JuneSeptember 30, 2020, and our results of operations and cash flows for the periods ended JuneSeptember 30, 2020 and JuneSeptember 30, 2019, respectively. The results of operations for the periods ended JuneSeptember 30, 2020 and JuneSeptember 30, 2019, respectively, are not necessarily indicative of the results for a full-year period. These interim consolidated financial statements should be read in conjunction with the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019, which was filed with the Securities and Exchange Commission (the "SEC") on February 20, 2020.

 

Use of Estimates

 

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company also regularly evaluates estimates and assumptions related to useful lives of property and equipment, impairment of long-lived assets, the estimate of the fair value of the lease liability and related right of use assets, allowance for doubtful accounts and stock-based compensation.valuation of share based payments.

 

The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

 

Principles of Consolidation

 

The accompanying condensed consolidated financial statements for the period ended JuneSeptember 30, 2020 include the accounts of the Company and its subsidiaries. The Company has one wholly-owned subsidiary, Singapore Volition Pte. Limited (“Singapore Volition”). Singapore Volition has one wholly-owned subsidiary, Belgian Volition SPRL (“Belgian Volition”).  Belgian Volition has four subsidiaries, Volition Diagnostics UK Limited (“Volition Diagnostics”), Volition America, Inc. (“Volition America”), Volition Germany GmbH (“Volition Germany”), and its one majority-owned subsidiary, Volition Veterinary Diagnostics Development LLC (“Volition Vet”). See Note 8(f) for more information regarding Volition Vet and Volition Germany. All intercompany balances and transactions have been eliminated in consolidation.  

 

Cash and Cash Equivalents

 

For the purposes of the statements of cash flows, we considerthe Company considers interest bearing deposits with original maturity dates of three months or less to be cash equivalents. The Company invests excess cash from its operating cash accounts in overnight investments and reflects these amounts in cash and cash equivalents in the condensed consolidated balance sheets at fair value using quoted prices in active markets for identical assets. As of JuneSeptember 30, 2020, cash and cash equivalents totaled approximately $21.3$20.9 million, of which $14.7 million was held in an overnight money market account.

.




VOLITIONRX LIMITED

Notes to the Condensed Consolidated Financial Statements (Unaudited)

($ expressed in United States Dollars)

Note 1 - Basis of Presentation and Summary of Significant Accounting Policies (continued)

 

Accounts Receivables

 

Trade accounts receivable are stated at the amount the Company expects to collect. 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. If the financial condition of the Company’s customers were to deteriorate, adversely affecting their ability to make payments, additional allowances would be required.  The Company may provide for estimated uncollectible amounts through a charge to earnings and a credit to a valuation allowance. Balances that remain outstanding after the Company has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable. As of JuneSeptember 30, 2020, the accounts receivable balance was $3,223$573 and the allowance for doubtful debts was $nil.




VOLITIONRX LIMITED

Notes to the Condensed Consolidated Financial Statements (Unaudited)

($ expressed in United States Dollars)

Note 1 - Basis of Presentation and Summary of Significant Accounting Policies (continued)

 

Revenue Recognition

 

The Company adopted Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers,” effective January 1, 2019. Under ASC 606, the Company recognizes revenues when the customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. The Company recognizes revenues following the five step model prescribed under ASC 606: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) the Company satisfies the performance obligation(s).

 

The Company generates revenue from its license agreement with Active Motif Inc. (“Active Motif”) for the sale of Research Use Only kits from which the Company receives royalties. In addition, revenue is received from external third parties for product sales and/or services the Company performs for them in its laboratory.

 

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

 

Royalty

 

The Company receives royalty revenues on the net sales recognized during the period in which the revenue is earned, and the amount is determinable from the licensee. These are presented in “Royalty” in the consolidated statements of operations and comprehensive loss.  The Company does not have future performance obligations under this revenue stream. In accordance with ASC 606, the Company records these revenues based on estimates of the net sales that occurred during the relevant period from the licensee. The relevant period estimates of these royalties are based on preliminary gross sales data provided by Active Motif and analysis of historical gross-to-net adjustments. Differences between actual and estimated royalty revenues are adjusted for in the period in which they become known.

 

Product

 

The Company includes revenue from product sales recognized during the period in which goods are shipped to third parties, and the amount is deemed collectable from the third parties. These are presented in “Product sales” in the consolidated statements of operations and comprehensive loss.

 

Services

 

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

 

For each development and/or commercialization agreement that results in revenues, the Company identifies all performance obligations, aside from those that are immaterial, which may include a license to intellectual property and know-how, development activities and/or transition activities. In order to determine the transaction price, in addition to any upfront payment, the Company estimates the amount of variable consideration at the outset of the contract either utilizing the expected value or most likely amount method, depending on the facts and circumstances relative to the contract. The Company constrains (reduces) the estimates of variable consideration such that it is probable that a significant reversal of previously recognized revenue will not occur throughout the life of the contract. When determining if variable consideration should be constrained, management considers whether there are factors outside the Company’s control that could result in a significant reversal of revenue. In making these assessments, the Company considers the likelihood and magnitude of a potential reversal of revenue. These estimates are re-assessed each reporting period as required.




VOLITIONRX LIMITED

Notes to the Condensed Consolidated Financial Statements (Unaudited)

($ expressed in United States Dollars)

 

Note 1 - Basis of Presentation and Summary of Significant Accounting Policies (continued)

 

Basic and Diluted Net Loss Per Share

 

The Company computes net loss per share in accordance with ASC 260, “Earnings“Earnings Per Share,” which requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the statement of operations.operations and comprehensive loss. 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 JuneSeptember 30, 2020, 5,208,7524,551,119 potential common shares equivalents from warrants, options and restricted stock units (“RSUs”) were excluded from the diluted EPS calculations as their effect is anti-dilutive.

 

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, theThe Company has reclassified the prior yearperiod comparative amounts in the statement of general and administrative expenses to interest incomestockholders’ equity and cash flows to be consistent with the current year classification.

 

Recent Accounting Pronouncements

 

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

 

COVID-19 Pandemic Impact

 

On March 11, 2020, the World Health Organization designated the outbreak of the novel strain of coronavirus known as COVID-19 as a global pandemic. Governments and businesses around the world have taken unprecedented actions to mitigate the spread of COVID-19, including, but not limited to, shelter-in-place orders, quarantines, significant restrictions on travel, as well as restrictions that prohibit many employees from going to work. Uncertainty with respect to the economic impacts of the pandemic has introduced significant volatility in the financial markets. The Company did not observe significant impacts on its business or results of operations for the three and sixnine months ended JuneSeptember 30, 2020 due to the global emergence of COVID-19. While the extent to which COVID-19 impacts the Company’s future results will depend on future developments, the pandemic and associated economic impacts could result in a material impact to the Company’s future financial condition, results of operations and cash flows.

 

Note 2 - Going Concern

 

The Company's condensed consolidated financial statements are prepared using 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 $100.7$105.0 million, has negative cash flows from operations, and currently has limited revenues, which creates substantial doubt about its ability to continue as a going concern for a period of one year from the date of issuance of these condensed consolidated financial statements.

 

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 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.

 

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually attain profitable operations. The accompanying condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. If the Company is unable to obtain adequate capital, it could be forced to cease operations.




VOLITIONRX LIMITED

Notes to the Condensed Consolidated Financial Statements (Unaudited)

($ expressed in United States Dollars)

 

Note 3 - Property and Equipment

 

The Company’s property and equipment consist of the following amounts as of JuneSeptember 30, 2020 and December 31, 2019:

 

 

 

 

 

 

 

June 30,

 

 

 

 

 

 

September 30,

 

 

 

 

 

 

2020

 

 

 

 

 

 

2020

 

 

 

 

Accumulated

 

Net Carrying

 

 

 

 

Accumulated

 

Net Carrying

 

 

Cost

 

Depreciation

 

Value

 

 

Cost

 

Depreciation

 

Value

Useful Life

 

$

 

$

 

$

Useful Life

 

$

 

$

 

$

Computer hardware and software

3 years

 

458,766

 

332,512

 

126,254

3 years

 

490,687

 

369,584

 

121,103

Laboratory equipment

5 years

 

2,310,486

 

1,240,777

 

1,069,709

5 years

 

1,980,047

 

920,295

 

1,059,752

Office furniture and equipment

5 years

 

226,139

 

135,367

 

90,772

5 years

 

235,740

 

152,240

 

83,500

Buildings

30 years

 

1,473,212

 

163,665

 

1,309,547

30 years

 

1,537,352

 

183,600

 

1,353,752

Building improvements

5-15 years

 

720,464

 

141,598

 

578,866

5-15 years

 

792,282

 

160,882

 

631,400

Land

Not amortized

 

89,877

 

-

 

89,877

Not amortized

 

93,790

 

-

 

93,790

 

 

5,278,944

 

2,013,919

 

3,265,025

 

 

5,129,898

 

1,786,601

 

3,343,297

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

 

 

 

 

December 31,

 

 

 

 

 

 

2019

 

 

 

 

 

 

2019

 

 

 

 

Accumulated

 

Net Carrying

 

 

 

 

Accumulated

 

Net Carrying

 

 

Cost

 

Depreciation

 

Value

 

 

Cost

 

Depreciation

 

Value

Useful Life

 

$

 

$

 

$

Useful Life

 

$

 

$

 

$

Computer hardware and software

3 years

 

426,461

 

280,554

 

145,907

3 years

 

426,461

 

280,554

 

145,907

Laboratory equipment

5 years

 

2,052,348

 

1,256,637

 

795,711

5 years

 

2,052,348

 

1,256,637

 

795,711

Office furniture and equipment

5 years

 

217,545

 

114,242

 

103,303

5 years

 

217,545

 

114,242

 

103,303

Buildings

30 years

 

1,472,211

 

139,021

 

1,333,190

30 years

 

1,472,211

 

139,021

 

1,333,190

Building improvements

5-15 years

 

630,824

 

117,526

 

513,298

5-15 years

 

630,824

 

117,526

 

513,298

Land

Not amortized

 

89,816

 

-

 

89,816

Not amortized

 

89,816

 

-

 

89,816

 

 

4,889,205

 

1,907,980

 

2,981,225

 

 

4,889,205

 

1,907,980

 

2,981,225

 

 

 

 

 

 

 

During the six-monthnine-month periods ended JuneSeptember 30, 2020 and JuneSeptember 30, 2019, the Company recognized $316,405$459,450 and $322,131,$443,972, respectively, in depreciation expense.




VOLITIONRX LIMITED

Notes toDuring the Condensed Consolidated Financial Statements (Unaudited)

($ expressednine-month period ended September 30, 2020, the Company sold laboratory equipment for $293,595, resulting in United States Dollars)a gain on disposal of equipment of $293,595. As of September 30, 2020, the Company has received $97,388 in payment for the laboratory equipment, with the remaining receivable of $196,207 recorded in other current assets.

 

Note 4 - Intangible Assets

 

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

 

 

 

 

 

June 30,

 

 

 

 

September 30,

 

 

 

 

2020

 

 

 

 

2020

 

 

Accumulated

 

Net Carrying

 

 

Accumulated

 

Net Carrying

Cost

 

Amortization

 

Value

Cost

 

Amortization

 

Value

$

 

$

 

$

$

 

$

 

$

Patents

1,148,059

 

819,356

 

328,703

1,197,312

 

875,464

 

321,848

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

 

 

December 31,

 

 

 

 

2019

 

 

 

 

2019

 

 

Accumulated

 

Net Carrying

 

 

Accumulated

 

Net Carrying

Cost

 

Amortization

 

Value

Cost

 

Amortization

 

Value

$

 

$

 

$

$

 

$

 

$

Patents

1,147,391

 

775,086

 

372,305

1,147,391

 

775,086

 

372,305

 

 

 

 

 




VOLITIONRX LIMITED

Notes to the Condensed Consolidated Financial Statements (Unaudited)

($ expressed in United States Dollars)

Note 4 - Intangible Assets (continued)

During the six-monthnine-month periods ended JuneSeptember 30, 2020 and JuneSeptember 30, 2019, the Company recognized $42,828$65,567 and $43,778,$65,761, respectively, in amortization expense.

 

The Company amortizes the patents on a straight-line basis with terms ranging from 8 to 20 years. The annual estimated amortization schedule over the next five years is as follows:

 

2020 - remaining

$

44,340

$

24,749

2021

$

87,591

$

90,883

2022

$

87,591

$

90,883

2023

$

87,591

$

90,883

2024

$

21,590

$

24,450

Total Intangible Assets

$

328,703

$

321,848

 

 

The Company periodically reviews its long-lived assets to ensure that their carrying value does not exceed their fair market value. The Company carried out such a review in accordance with ASC 360, Topic Property, Plant and Equipment, as of December 31, 2019. The result of this review confirmed that the ongoing value of the patents was not impaired as of December 31, 2019.

 

Note 5 - Related Party Transactions

 

See Note 6 for common stock issued to related parties and Note 7 for stock options, warrants and RSUs issued to related parties. The Company has agreements with related parties for the purchase of products and consultancy services which are accrued under management and directors’ fees payable (see condensed consolidated balance sheets).

Note 6 - Common Stock

As of September 30, 2020, the Company was authorized to issue 100 million shares of common stock par value $0.001 per share, of which 48,064,575 and 41,125,303 shares were issued and outstanding as of September 30, 2020 and December 31, 2019, respectively.

Stock Issuances Upon Warrant and Option Exercises

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

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

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

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

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

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

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

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




VOLITIONRX LIMITED

Notes to the Condensed Consolidated Financial Statements (Unaudited)

($ expressed in United States Dollars)

 

Note 6 - Common Stock

As of June 30, 2020, the Company was authorized to issue 100 million shares of common stock par value $0.001 per share, of which 46,659,554 and 41,125,303 shares were issued and outstanding as of June 30, 2020 and December 31, 2019, respectively.

Issuances Upon Warrant and Option Exercises (continued)

 

On January 7,September 18, 2020, 12,500 stock options25,000 warrants were exercised to purchase shares of common stock at $2.50$2.47 per share in a cashless exercise and withholding of shares for taxes that resulted in the issuance of 6,135 shares of common stock.

On January 7, 2020, 12,500 stock options were exercised to purchase25,000 shares of common stock at $3.00 per share in a cashless exercise and withholdingfor proceeds to the Company of shares for taxes that resulted in the issuance of 4,862 shares of common stock.$61,750.

 

On January 7, 2020, 35,000 stock options were exercised to purchase shares of common stock at $4.00 per share in a cashless exercise and withholding of sharesStock Issuance for taxes that resulted in the issuance of 6,486 shares of common stock.Services

 

On January 9, 2020, 73,263 shares were issued as fully paid shares of common stock valued at $333,969 as compensation to a managing director of Volition Germany (see Note 8(f)).

From February 24, 2020 to March 20, 2020, 8,882 stock options were exercised to purchase shares of common stock at $2.35 per share in cashless exercises and withholding of shares for taxes that resulted in the issuance of 1,947 shares of common stock.

 

Stock Repurchase

 

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

 

Equity Capital Raise

 

On May 20, 2020, the Company entered into an underwriting agreement with National Securities Corporation, acting on its own behalf and as representative of the several underwriters, in connection with the public offering, issuance and sale by the Company of 4,365,000 shares of the Company’s common stock, at the public offering price of $2.75 per share, less underwriting discounts and commissions. Under the terms of the agreement, the Company granted the underwriters an option, exercisable for 30 days from the date of the agreement, to purchase up to 654,750 additional shares of the Company’s common stock to cover overallotments, if any, at the public offering price of $2.75 per share, less underwriting discounts and commissions.  On May 21, 2020, the underwriters exercised the overallotment option in full. As a result of the equity capital raise, the Company issued a total of approximately 5 million shares for aggregate gross proceeds of $13.8 million. Additionally, in connection with this transaction, $1.1 million was incurred in fees relating to the equity offering, resulting in net proceeds of $12.7 million.

 

Equity Distribution Agreement

 

On September 7, 2018, the Company entered into an equity distribution agreement (as amended, the “Equity Distribution Agreement”) with Oppenheimer & Co. Inc. (“Oppenheimer”), which agreement allows it to offer and sell shares of common stock having an aggregate offering price of up to $10.0 million from time-to-time pursuant to a shelf registration statement on Form S-3 (declared effective by the SEC on September 28, 2018, File No.333-227248) through Oppenheimer acting as the Company’s agent and/or principal. Through JuneFrom inception through September 30, 2020, the Company raised aggregate net proceeds of approximately $1.7$6.5 million under the Equity Distribution Agreement through the sale of 436,3721,688,555 shares of its common stock.

 

During the six-monthnine-month period ended JuneSeptember 30, 2020, the Company raised aggregate net proceeds of approximately $1.7$6.5 million under the Equity Distribution Agreement through the sale of 433,1721,685,355 shares of its common stock. Additionally, in connection with this transaction $104,813 was incurred in fees relating to the Equity Distribution Agreement. See Note 9 for details regarding additional sales of common stock under the Equity Distribution Agreement after JuneSeptember 30, 2020.




VOLITIONRX LIMITED

Notes to the Condensed Consolidated Financial Statements (Unaudited)

($ expressed in United States Dollars)

 

Note 7 – Stock-based Compensation

 

a)Warrants 

 

The following table summarizes the changes in warrants outstanding of the Company during the six-monthnine-month period ended JuneSeptember 30, 2020:

 

 

 

Weighted

Number of

 

Average

Number of

 

Weighted Average

Warrants

 

Exercise Price ($)

Warrants

 

Exercise Price ($)

Outstanding at December 31, 2019

190,000

 

2.90

190,000

 

2.90

Granted

50,000

 

3.45

50,000

 

3.45

Exercised

-

 

-

(25,000)

 

2.47

Expired

-

 

-

-

 

-

Outstanding at June 30, 2020

240,000

 

3.02

Outstanding at September 30, 2020

215,000

 

3.08

 

 

 

 

 

 

Exercisable at June 30, 2020

190,000

 

2.90

Exercisable at September 30, 2020

165,000

 

2.97

 

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

 

Effective March 1, 2020, the Company granted warrants to purchase 50,000 shares of common stock to a Company employee for services to the Company. These warrants vest on September 1, 2021 (subject to continued employment through such date) and expire on March 1, 2026, with an exercise price of $3.45 per share. The Company has calculated the estimated fair market value of these warrants at $86,771, using the Black-Scholes model and the following assumptions: term 3.75 years, stock price $3.44, exercise price $3.45, 69.03% volatility, 0.95% risk free rate, and no forfeiture rate.

 

Below is a table summarizing the warrants issued and outstanding as of JuneSeptember 30, 2020, which have an aggregate weighted average remaining contractual life of 2.652.68 years.

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

 

Average

 

 

 

 

 

 

Average

 

 

 

 

 

 

Remaining

Proceeds to

 

 

 

 

 

Remaining

Proceeds to

Number

 

Number

 

Exercise

 

Contractual

Company if

 

Number

 

Exercise

 

Contractual

Company if

Outstanding

 

Exercisable

 

Price ($)

 

Life (Years)

Exercised ($)

 

Exercisable

 

Price ($)

 

Life (Years)

Exercised ($)

150,000

 

150,000

 

2.47

 

1.44

 

370,500

125,000

 

125,000

 

2.47

 

2.41

 

308,750

50,000

 

-

 

3.45

 

5.67

 

172,500

 

-

 

3.45

 

5.42

 

172,500

40,000

 

40,000

 

4.53

 

0.38

 

181,200

 

40,000

 

4.53

 

0.12

 

181,200

240,000

 

190,000

 

 

 

 

 

724,200

 

 

 

 

 

 

 

 

215,000

 

165,000

 

 

 

 

 

662,450

Stock-based compensation expense related to warrants of $41,587$56,127 and $4,127$6,379 was recorded in the sixnine months ended JuneSeptember 30, 2020 and JuneSeptember 30, 2019, respectively. Total remaining unrecognized compensation cost related to non-vested warrants is $65,519$53,105 and is expected to be recognized over a period of 1.170.92 years. As of JuneSeptember 30, 2020, the total intrinsic value of warrants outstanding was $235,000.$92,500.




VOLITIONRX LIMITED

Notes to the Condensed Consolidated Financial Statements (Unaudited)

($ expressed in United States Dollars)

 

Note 7 – Stock-based Compensation (continued)

 

b)Options 

 

The following table summarizes the changes in options outstanding of the Company during the six-monthnine-month period ended JuneSeptember 30, 2020:

 

 

Number of

 

Weighted Average

 

Number of

 

Weighted Average

 

Options

 

Exercise Price ($)

 

Options

 

Exercise Price ($)

Outstanding at December 31, 2019

 

4,169,301

 

3.88

 

4,169,301

 

3.88

Granted

 

835,000

 

3.60

 

835,000

 

3.60

Exercised

 

(68,882)

 

3.33

 

(691,599)

 

2.81

Expired/Cancelled

 

(19,167)

 

5.00

 

(29,083)

 

4.52

Outstanding at June 30, 2020

 

4,916,252

 

3.84

Outstanding at September 30, 2020

 

4,283,619

 

4.00

 

 

 

 

 

 

 

 

Exercisable at June 30, 2020

 

4,081,252

 

3.89

 

 

 

 

Exercisable at September 30, 2020

 

3,448,619

 

4.10

Effective April 13, 2020, the Company granted stock options to purchase 835,000 shares of common stock to various Company personnel (including directors, executives, members of management and employees) in exchange for services provided to the Company. These options vest on April 13, 2021 and expire 5 years after the vesting date, with an exercise price of $3.44$3.60 per share. The Company has calculated the estimated fair market value of these options at $1,481,709, using the Black-Scholes model and the following assumptions: term 3.5 years, stock price $3.52, exercise price $3.60, 72.94% volatility, 0.54% risk free rate, and no forfeiture rate.

 

Below is a table summarizing the options issued and outstanding as of JuneSeptember 30, 2020, all of which were issued pursuant to the 2011 Equity Incentive Plan (for option issuances prior to 2016) or the 2015 Stock Incentive Plan (for option issuances commencing in 2016) and which have an aggregate weighted average remaining contractual life of 3.053.23 years. As of JuneSeptember 30, 2020, an aggregate of 4,250,000 shares of common stock were authorized for issuance under the 2015 Stock Incentive Plan,, of which 261,867 shares of common stock remained available for future issuance thereunder.

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

 

Average

 

 

 

 

 

 

 

Average

 

 

 

 

 

 

 

Remaining

 

Proceeds to

 

 

 

 

 

Remaining

 

Proceeds to

Number

 

Number

 

Exercise

 

Contractual

 

Company if

 

Number

 

Exercise

 

Contractual

 

Company if

Outstanding

 

Exercisable

 

Price ($)

 

Life (Years)

 

Exercised ($)

 

Exercisable

 

Price ($)

 

Life (Years)

 

Exercised ($)

2,717

 

2,717

 

2.35

 

0.18

 

6,385

310,000

 

310,000

 

2.50

 

0.13

 

775,000

310,000

 

310,000

 

3.00

 

0.13

 

930,000

685,000

 

685,000

 

3.25

 

4.62

 

2,226,250

 

685,000

 

3.25

 

4.37

 

2,226,250

17,767

 

17,767

 

3.35

 

0.62

 

59,519

10,351

 

10,351

 

3.35

 

0.58

 

34,676

835,000

 

-

 

3.60

 

5.79

 

3,006,000

 

-

 

3.60

 

5.54

 

3,006,000

20,000

 

20,000

 

3.80

 

0.88

 

76,000

 

20,000

 

3.80

 

0.63

 

76,000

1,782,837

 

1,782,837

 

4.00

 

2.31

 

7,131,348

 

1,782,837

 

4.00

 

2.06

 

7,131,348

17,768

 

17,768

 

4.35

 

1.62

 

77,291

15,268

 

15,268

 

4.35

 

1.40

 

66,416

89,163

 

89,163

 

4.38

 

3.57

 

390,534

 

89,163

 

4.38

 

3.32

 

390,534

50,000

 

50,000

 

4.80

 

2.51

 

240,000

 

50,000

 

4.80

 

2.25

 

240,000

796,000

 

796,000

 

5.00

 

2.74

 

3,980,000

 

796,000

 

5.00

 

2.49

 

3,980,000

4,916,252

 

4,081,252

 

 

 

 

 

18,898,327

4,283,619

 

3,448,619

 

 

 

 

 

17,151,224

Stock-based compensation expense related to stock options of $861,312 and $1,084,312 was recorded in the nine months ended September 30, 2020 and September 30, 2019, respectively. Total remaining unrecognized compensation cost related to non-vested stock options is $791,598. As of September 30, 2020, the total intrinsic value of stock options outstanding was $nil.




VOLITIONRX LIMITED

Notes to the Condensed Consolidated Financial Statements (Unaudited)

($ expressed in United States Dollars)

 

Note 7 – Stock-based Compensation (continued)

 

b)Options (continued)

Stock-based compensation expense related to stock options of $482,103 and $715,838 was recorded in the six months ended June 30, 2020 and June 30, 2019, respectively. Total remaining unrecognized compensation cost related to non-vested stock options is $1,165,070. As of June 30, 2020, the total intrinsic value of stock options outstanding was $1,402,929.

c)Restricted Stock Units (RSUs) 

 

Below is a table summarizing the RSUs issued and outstanding as of JuneSeptember 30, 2020, all of which were issued pursuant to the 2015 Stock Incentive Plan.

 

Number of

 

Share Price

Number of

 

 

RSUs

 

($)

RSUs

 

Share Price ($)

Outstanding at December 31, 2019

-

 

-

-

 

-

Granted

52,500

 

3.52

52,500

 

3.52

Vested

-

 

-

-

 

-

Cancelled

-

 

-

-

 

-

Outstanding at June 30, 2020

52,500

 

3.52

Outstanding at September 30, 2020

52,500

 

3.52

 

Effective April 13, 2020, the Company granted RSUs of 52,500 shares of common stock to various Company personnel (including a director and an employee) in exchange for services provided to the Company. These RSUs vest over 2 years, with 50% vesting on each of April 13, 2021 and April 13, 2022 and will result in total compensation expense of $184,800.

 

Below is a table summarizing the RSUs issued and outstanding as of JuneSeptember 30, 2020 and which have an aggregate weighted average remaining contractual life of 1.291.03 years.

 

 

 

 

 

 

Weighted

 

 

 

 

 

Weighted

 

 

 

 

 

Average

 

 

 

 

 

Average

 

 

 

 

 

Remaining

 

 

 

 

 

Remaining

Number

 

Number

 

Share

 

Contractual

 

Number

 

Share

 

Contractual

Outstanding

 

Exercisable

 

Price ($)

 

Life (Years)

 

Exercisable

 

Price ($)

 

Life (Years)

52,500

 

-

 

3.52

 

1.29

 

-

 

3.52

 

1.03

 

Stock-based compensation expense related to RSUs of $29,619$64,553 and $nil was recorded in the sixnine months ended JuneSeptember 30, 2020 and JuneSeptember 30, 2019, respectively. Total remaining unrecognized compensation cost related to non-vested RSUs is $155,181.$120,246. As of JuneSeptember 30, 2020, the total intrinsic value of the RSUs outstanding was $19,425.$nil.




VOLITIONRX LIMITED

Notes to the Condensed Consolidated Financial Statements (Unaudited)

($ expressed in United States Dollars)

 

Note 8 – Commitments and Contingencies

 

a)Finance Lease Obligations  

 

In 2015, the Company entered into an equipment finance lease to purchase three Tecan machines (automated liquid handling robots) for €550,454 Euros that matured in May 2020. As of JuneSeptember 30, 2020, the balance payable was $nil.

 

In 2016, the Company entered into a real estate finance lease with ING Asset Finance Belgium S.A. (“ING”) to purchase a property located in Belgium for €1.12 million Euros, maturing in May 2031. As of JuneSeptember 30, 2020, the balance payable was $619,808.$635,130.

 

In 2018, the Company entered into a finance lease with BNP Paribas leasing solutions to purchase a freezer for the Belgium facility for €25,000 Euros, maturing in January 2022. The leased equipment is amortized on a straight-line basis over 5 years. As of JuneSeptember 30, 2020, the balance payable was $15,255.$13,575.




VOLITIONRX LIMITED

Notes to the Condensed Consolidated Financial Statements (Unaudited)

($ expressed in United States Dollars)

Note 8 – Commitments and Contingencies (continued)

a)Finance Lease Obligations (continued)

 

The following is a schedule showing the future minimum lease payments under finance leases by years and the present value of the minimum payments as of JuneSeptember 30, 2020.

 

2020 - remaining

$

34,997

$

18,259

2021

$

69,993

$

73,042

2022

$

61,839

$

64,531

2023

$

60,427

$

63,058

2024

$

60,426

$

63,057

Greater than 5 years

$

445,634

$

465,037

Total

$

733,316

$

746,984

Less: Amount representing interest

$

(98,253)

$

(98,279)

Present value of minimum lease payments

$

635,063

$

648,705

 

b)Operating Lease Right-of-Use Obligations 

 

As all the existing leases subject to the new lease standard ASC 842, (“Leases”Leases,”) were previously classified as operating leases by the Company, they were similarly classified as operating leases under the new standard. The Company has determined that the identified operating leases did not contain non-lease components and require no further allocation of the total lease cost. Additionally, the agreements in place did not contain information to determine the rate implicit in the leases, so we used our incremental borrowing rate as the discount rate. Our weighted average discount rate is 4.47%4.48% and the weighted average remaining lease term is 1924 months.

 

As of JuneSeptember 30, 2020, operating lease right-of-use assets and liabilities arising from operating leases were $234,095$257,903 and $242,011,$266,101, respectively. During the sixnine months ended JuneSeptember 30, 2020, cash paid for amounts included for the measurement of lease liabilities was $116,541$184,769 and the Company recorded operating lease expense of $117,357.$185,077.

 

The following is a schedule showing the future minimum lease payments under operating leases by years and the present value of the minimum payments as of JuneSeptember 30, 2020.

 

2020 - remaining

$

121,708

$

74,831

2021

$

77,664

$

109,716

2022

$

34,500

$

50,652

2023

$

16,886

$

32,917

2024

$

1,056

$

10,665

Total Operating Lease Obligations

$

251,814

$

278,781

Less: Amount representing interest

$

(9,803)

$

(12,680)

Present Value of minimum lease payments

$

242,011

$

266,101

The Company’s office space leases are short-term and the Company has elected under the short-term recognition exemption not to recognize them on the balance sheet. During the nine months ended September 30, 2020, $10,737 was recognized in short-term lease costs associated with office space leases. The annual payments remaining for short-term office leases were as follows:

2020 - remaining

$

-

Total Operating Lease Obligations

$

-




VOLITIONRX LIMITED

Notes to the Condensed Consolidated Financial Statements (Unaudited)

($ expressed in United States Dollars)

 

Note 8 – Commitments and Contingencies (continued)

 

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

The Company’s office space leases are short term and the Company has elected under the short-term recognition exemption not to recognize them on the balance sheet. During the six months ended June 30, 2020, $10,737 was recognized in short-term lease costs associated with office space leases. The annual payments remaining for short-term office leases were as follows:

2020 - remaining

$

1,740

Total Operating Lease Obligations

$

1,740

 

 

 

c)Grants Repayable  

 

In 2010, the Company entered into an agreement with the Walloon Region government in Belgium for a colorectal cancer research grant for €1.05 million Euros. Per the terms of the agreement, €314,406 Euros of the grant is to be repaid, by instalmentsinstallments over the period from June 30, 2014 to June 30, 2023. In the event that the Company receives revenue from products or services as defined in the agreement, it is due to pay a 6% royalty on such revenue to the Walloon Region. The maximum amount payable to the Walloon Region, in respect of the aggregate of the amount repayable of €314,406 Euros and the 6% royalty on revenue, is equal to twice the amount of funding received. As of JuneSeptember 30, 2020, the grant balance repayable was $137,519.$102,473.

 

In 2018, the Company entered into an agreement with the Walloon Region government in Belgium for a colorectal cancer research grant for €605,000 Euros.  Per the terms of the agreement, €181,500 Euros of the grant is to be repaid by instalmentsinstallments over 12 years commencing in 2020. In the event that the Company receives revenue from products or services as defined in the agreement, it is due to pay a 3.53% royalty on such revenue to the Walloon Region. The maximum amount payable to the Walloon Region, in respect of the aggregate of the amount repayable of €181,500 Euros and the 3.53% royalty on revenue, is equal to the amount of funding received. As of JuneSeptember 30, 2020, the grant balance repayable was $203,908.$212,786.

 

As of JuneSeptember 30, 2020, the total grant balance repayable was $341,427$315,259 and the payments remaining were as follows:

 

2020 - remaining

$

52,915

$

14,186

2021

$

50,001

$

52,178

2022

$

47,298

$

49,357

2023

$

48,468

$

50,579

2024

$

20,391

$

21,279

Greater than 5 years

$

122,354

$

127,680

Total Grants Repayable

$

341,427

$

315,259

 

 

d)Long-Term Debt 

 

In 2016, the Company entered into a 7-year loan agreement with Namur Invest for €440,000 Euros with a fixed interest rate of 4.85%, maturing in December 2023. As of JuneSeptember 30, 2020, the principal balance payable was $285,383.$284,741.

 

In 2016, the Company entered into a 15-year loan agreement with ING for €270,000 Euros with a fixed interest rate of 2.62%, maturing in December 2031. As of JuneSeptember 30, 2020, the principal balance payable was $243,940.$249,887.

 

In 2017, the Company entered into a 4-year loan agreement with Namur Invest for €350,000 Euros with a fixed interest rate of 4.00%, maturing in June 2021. As of JuneSeptember 30, 2020, the principal balance payable was $118,008.$102,962.

 

In 2017, the Company entered into a 7-year loan agreement with SOFINEX for up to €1 million Euros with a fixed interest rate of 4.50%, maturing in September 2024. As of JuneSeptember 30, 2020, €1 million Euros has been drawn down under this agreement and the principal balance payable was $1,067,291.$1,055,139.

In 2018, the Company entered into a 4-year loan agreement with Namur Innovation and Growth for €500,000 Euros with a fixed interest rate of 4.00%, maturing in June 2022. As of September 30, 2020, the principal balance payable was $317,254.

In 2019, the Company entered into a 4-year loan agreement with Namur Innovation and Growth for €500,000 Euros with a fixed interest rate of 4.80%, maturing in September 2023. As of September 30, 2020, the principal balance payable was $586,189.




VOLITIONRX LIMITED

Notes to the Condensed Consolidated Financial Statements (Unaudited)

($ expressed in United States Dollars)

 

Note 8 – Commitments and Contingencies (continued)

 

d)Long-Term Debt (continued) 

 

In 2018, the Company entered into a 4-year loan agreement with Namur Innovation and Growth for €500,000 Euros with a fixed interest rate of 4.00%, maturing in June 2022. As of June 30, 2020, the principal balance payable was $330,568.

In 2019, the Company entered into a 4-year loan agreement with Namur Innovation and Growth for €500,000 Euros with a fixed interest rate of 4.80%, maturing in September 2023. As of June 30, 2020, the principal balance payable was $561,732.

As of June 30, 2020, the total balance for long-term debt payable was $2,606,922$2,596,172 and the payments remaining were as follows:

 

2020 - remaining

$

479,678

$

286,719

2021

$

742,694

$

777,691

2022

$

623,184

$

652,975

2023

$

526,943

$

552,544

2024

$

328,193

$

403,760

Greater than 5 years

$

180,377

$

181,739

Total

$

2,881,069

$

2,855,428

Less: Amount representing interest

$

(274,147)

$

(259,256)

Total Long-Term Debt

$

2,606,922

$

2,596,172

 

 

e) Collaborative Agreement Obligations   

 

In 2015, the Company entered into a research sponsorship agreement with DKFZ in Germany for a 3-year period for €338,984 Euros. As of JuneSeptember 30, 2020, $84,260$87,928 is still to be paid by the Company under this agreement.

 

In 2016, the Company entered into a research co-operation agreement with DKFZ in Germany for a 5-year period for €400,000 Euros. As of JuneSeptember 30, 2020, $224,693$234,475 is still to be paid by the Company under this agreement.

 

In 2017, the Company entered into a collaborative research agreement with Munich University in Germany for a 3-year period for €360,000 Euros.  As of JuneSeptember 30, 2020, $110,099$0 is still to be paid by the Company under this agreement.

 

In 2017, the Company entered into a clinical study research agreement with the University of Michigan for a 3-year period for up to $3 million. This agreement was amended in February 2020 to redefine a new clinical study. Pursuant to the terms of the amendment, the parties acknowledged that, although not fully-completed,fully completed, the requirements of the original clinical study had been satisfied, including any and all payment obligations by the Company. Further, the Amendment provided that a new clinical study would be undertaken at no additional cost to the Company. As of JuneSeptember 30, 2020, up to $138,000 is still accrued by the Company for any additional expenses for the new clinical study.

 

In 2018, the Company entered into a research collaboration agreement with the University of Taiwan for a 3-year period for a cost to the Company of up to $2.55 million payable over such period. As of JuneSeptember 30, 2020, $1.28 million$892,500 is still to be paid by the Company under this agreement.

 

In 2019, the Company entered into a research collaboration agreement with the University of Taiwan for a 2-year period to collect a total of 1,200 samples for a cost to the Company of up to $320,000 payable over such period. As of JuneSeptember 30, 2020, $160,000 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 System (“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 JuneSeptember 30, 2020, $345,443$329,986 is still to be paid by the Company under this agreement.

In 2019, the Company entered into a lyophilization study and a CE marking project including GMP validation and documentation with Biomerica Inc. for $160,000. As of September 30, 2020, $54,663 is still to be paid by the Company under this agreement.

On September 16, 2020, the Company entered into a research agreement for the bioinformatic analysis of cell-free DNA fragments from whole-genome sequencing with the Hebrew University of Jerusalem for 6 months for a cost to the Company of €54,879 Euros. As of September 30, 2020, $64,338 is still to be paid by the Company under this agreement.




VOLITIONRX LIMITED

Notes to the Condensed Consolidated Financial Statements (Unaudited)

($ expressed in United States Dollars)

 

Note 8 – Commitments and Contingencies (continued)

 

e) Collaborative Agreement Obligations (continued)  

 

In 2019, the Company entered into a lyophilization study and a CE marking project including GMP validation and documentation with Biomerica Inc. for $160,000. As of June 30, 2020, $54,663 is still to be paid by the Company under this agreement.

As of JuneSeptember 30, 2020, the total amount to be paid for future research and collaboration commitments was approximately $2.39$1.96 million and the annual payments remaining were as follows:

 

2020 - remaining

$

1,098,624

$

625,464

2021 - 2024

$

1,293,534

$

1,336,426

Total Collaborative Agreement Obligations

$

2,392,158

$

1,961,890

 

f)Other Commitments 

 

Volition Vet

 

On August 7, 2019,15, 2020, the Company entered into a consulting services agreement with Novis Animal Solutions LLC (“Novis”), to provide chief executivecommercial officer services for Volition Vet in exchange for payment of consultancy fees, 5% sales commission on third party sales capped at $20,000 per quarter and a potential equity interest of up to 5%2% in Volition Vet upon achievement of revenue milestones. The agreement superseded the existing consulting services agreement between the parties dated August 7, 2019 which terminated and is of no further effect. The term of the contract is perpetual and terminable on 2 months’ written notice from either party. As of JuneSeptember 30, 2020, Novis Animal Solutions LLC has no equity interest in Volition Vet. See Note 9 for details regarding termination of the consulting services agreement after September 30, 2020.

 

On October 25, 2019, the Company entered into an agreement with TAMU for provision of in kind services of personnel, animal samples and laboratorieslaboratory equipment in exchange for a non-controlling interest of 7.5% in Volition Vet, and forwith an additional 5% vesting a further 5%, effective October 25, 2020,year from the date of the agreement, giving themTAMU in totalaggregate a 12.5% equity interest as of such date. As of JuneSeptember 30, 2020, TAMU has a 7.5 %7.5% equity interest in Volition Vet.

 

Volition Germany

 

On January 10, 2020, the Company, through its wholly-owned subsidiary Belgian Volition, acquired an epigenetic reagent company, Octamer GmbH (“Octamer”), based in Munich, Germany, and hired its founder for his expertise and knowledge to be passed to Company personnel. On March 9, 2020, Octamer was renamed to Volition Germany GmbH (or “Volition Germany”).

 

Upon considering the definition of a business, as defined in ASC 805, Business Combinations,,paragraph 805-10-20,805-10-20, which is an integrated set of activities and assets that is capable of being conducted and managed for the purpose of providing a return, the Company has determined that this did not constitute a business. This is primarily due to the fact that additional inputs are needed in the form of training personnel further to produce outputs. Accordingly, the Company has treated this transaction as the hiring of a member of management, and acquisition of assets.described below, rather than accounting for the transaction as a business combination.

 

The Company agreed to terms of the transaction on December 13, 2019 and closed on January 10, 2020. Pursuant to the transaction agreement, the Company purchased all outstanding shares of Octamer. In exchange, the Company agreed to issue 73,263 newly-issued restricted shares of Company common stock valued at $333,969 (based on the $4.56 per share volume weighted trading price for the five days prior to December 13, 2019), committed to pay approximately €350,000 Euros, subject to adjustments, and agreed to pay off certain Octamer expenses leading up to the agreement (representing net liabilities of $6,535). At closing, the Company issued 73,263 restricted shares of Company common stock,  paid an adjusted amount of approximately $357,000 (€321,736 Euros) and recorded a holdback liability of $55,404 (€50,000 Euros) to be paid after the holdback period of 9 months following the closing (subject to offset for breaches of representations and warranties).

 

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




VOLITIONRX LIMITED

Notes to the Condensed Consolidated Financial Statements (Unaudited)

($ expressed in United States Dollars)

 

Note 8 – Commitments and Contingencies (continued)

 

f)Other Commitments (continued) 

 

Volition Germany (continued)

The Company recorded approximately $753,000 in compensation expense as a result of cash paid, holdback liability, stock issued and assumption of expenses. As of JuneSeptember 30, 2020, $242,667$211,028 is still to be paid by the Company under the Managing Director’s agreement and $88$229 is payable under the 6% royalty agreement.

 

g)Legal Proceedings 

 

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

 

Note 9 – Subsequent Events

 

On July 16, 2020, 22,500 stock options were exercised to purchase shares of common stock at $2.50 per share in a cashless exercise and withholding of shares for taxes that resulted in the issuance of 4,486 shares of common stock.

On July 21, 2020, 110,000 stock options were exercised to purchase shares of common stock at $2.50 per share in cashless exercises and withholding of shares for taxes that resulted in the issuance of 21,949 shares of common stock.

On July 21, 2020, 110,000 stock options were exercised to purchase shares of common stock at $3.00 per share in cashless exercises and withholding of shares for taxes that resulted in the issuance of 14,380 shares of common stock.

On August 4, 2020, 25,000 stock options were exercised to purchase shares of common stock at $2.50 per share in a cashless exercise and withholding of shares for taxes that resulted in the issuance of 2,920 shares of common stock.

On August 4, 2020, 25,000 stock options were exercised to purchase shares of common stock at $3.00 per share in a cashless exercise and withholding of shares for taxes that resulted in the issuance of 1,529 shares of common stock.

From JulyOctober 1 to August 6,November 4, 2020, the Company raised aggregate net proceeds of approximately $4.7 million$471,600 under the Equity Distribution Agreementequity distribution agreement through the sale of approximately 1.2 million133,122 shares of its common stock in accordance with a Rule 10b5-1 plan.

On October 1, 2020, the Company signed a new office lease in London, UK for total fee payable of approximately $111,540 (£86,400) at a rental rate of approximately $7,000 (£5,400) per month for a period of 16 months until January 31, 2022.

On October 5, 2020, the Company borrowed $973,000 (€830,000 Euros) from Preface S.A at an interest rate of 4%, repayable over 10 years to finance the acquisition and construction of a production facility in Belgium.

On November 3, 2020, the Company entered into a professional services master agreement with Diagnostic Oncology CRO, LLC, to conduct a pivotal clinical trial and provide regulatory submission and reimbursement related services.  Under the terms of the agreement, Diagnostic Oncology CRO, LLC will provide ad hoc consulting assistance on a project-by-project basis related to the review and assessment of existing data and information to prepare recommended intended use claims and coverage/reimbursement plans to support the preparation of FDA pre-submissions, clinical trial protocol development and study administration, and potential 510k regulatory marketing submissions of the Company’s diagnostic tests, including those proposed for use as an adjunct diagnostic tool for common and aggressive forms of Non-Hodgkin’s Lymphoma.  The initial projects contemplated by the agreement relating to Non-Hodgkin’s Lymphoma obligate the Company to pay an aggregate of up to $2.9 million over a period of 22 months. Such payment obligations are on a project-by-project basis as deliverables are executed and subject to certain terms and conditions. Additionally, the Company may terminate the agreement or any project with or without cause upon at least 30 days’ prior written notice.  Unless earlier terminated, the term of the agreement is until December 31, 2025 or such later date as when all projects have been completed.

On November 4, 2020, the Company terminated a consulting services agreement with Novis Animal Solutions LLC (“Novis”) to provide chief commercial officer services for Volition Vet. The termination was effective immediately and the compensation payable to Novis for the required two-month notice period and a general release of any claims will be $19,000.

On November 10, 2020, the Company entered into a consulting services agreement through a related party transaction between its wholly-owned subsidiary, Singapore Volition and PB Commodities Pte Ltd (“PB Commodities”). This agreement is effective December 1, 2020 and provides for consultancy services to be rendered by Cameron Reynolds through PB Commodities to Singapore Volition. Singapore Volition will also make available the services of Mr. Reynolds, as Group Chief Executive Officer, to the Company and its subsidiaries, pursuant to the services agreements entered into by and between Singapore Volition and the Company or its subsidiaries. The term of the agreement is perpetual, commencing on December 1, 2020 until terminated upon six months’ prior notice. The agreement includes a six-month non-compete following termination of the agreement. The consulting services agreement replaces in its entirety the employment agreement by and between Volition Diagnostics and Mr. Reynolds, dated March 7, 2017, which was terminated upon mutual agreement of the parties.  PB Commodities will receive a monthly fee of $35,650 in exchange for the services provided by Mr. Reynolds.




VOLITIONRX LIMITED

Notes to the Condensed Consolidated Financial Statements (Unaudited)

($ expressed in United States Dollars)

Note 9 – Subsequent Events (continued)

On November 12, 2020, the Company entered into an Equity Distribution Agreement (the “EDA”) with Cantor Fitzgerald & Co. (“Cantor”) and Oppenheimer, to sell shares of its Common Stock, par value $0.001 (the “Common Stock”), having an aggregate offering price of up to $25,000,000 (the “Shares”) from time to time, through an “at the market” offering program (the “New ATM Offering”) under which Oppenheimer and Cantor will jointly act as sales agents (the “Sales Agents”).  The offer and sale of the Shares will be made pursuant to the Company’s effective “shelf” registration statement on Form S-3 (File No. 333-227248), the base prospectus contained therein, dated September 28, 2018, and a prospectus supplement related to the New ATM Offering, dated November 12, 2020.  The Company is not obligated to sell any shares under the EDA.  The Company will pay the Sales Agents a commission of up to 3% of the aggregate gross proceeds from each sale of Shares occurring pursuant to the EDA, if any. The Company has also agreed to reimburse the Sales Agents for legal fees and disbursements, not to exceed $50,000 in the aggregate, in connection with the EDA. The EDA may be terminated by the Sales Agents or the Company at any time upon written notice to the other party(ies), as permitted therein.

 

END NOTES TO FINANCIALS




ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 

 

Cautionary Note Regarding Forward-Looking Statements

 

This Quarterly Report on Form 10-Q for the quarterly period ended JuneSeptember 30, 2020, or this Report, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These forward-looking statements are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this Report or incorporated by reference into this Report are forward-looking statements. These statements include, among other things, any predictions of earnings, revenues, expenses or other financial items; plans or expectations with respect to our development activities or business strategy; statements concerning clinical studies and results; statements concerning industry trends; statements regarding anticipated demand for our products, or the products of our competitors; statements relating to manufacturing forecasts, and the potential impact of our relationship with contract manufacturers and original equipment manufacturers on our business; statements relating to the commercialization of our products, assumptions regarding the future cost and potential benefits of our research and development efforts; forecasts of our liquidity position or available cash resources; statements relating to the impact of pending litigation;statements regarding the anticipated impact of the COVID-19 pandemic;pandemic and statements relating to the assumptions underlying any of the foregoing. Throughout this Report, we have attempted to identify forward-looking statements by using words such as “may,” “believe,” “will,” “could,” “project,” “anticipate,” “expect,” “estimate,” “should,” “continue,” “potential,” “plan,” “forecasts,” “goal,” “seek,” “intend,” other forms of these words or similar words or expressions or the negative thereof (although not all forward-looking statements contain these words).

 

We have based our forward-looking statements on our current expectations and projections about trends affecting our business and industry and other future events. Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. Forward-looking statements are subject to substantial risks and uncertainties that could cause our future business, financial condition, results of operations or performance, to differ materially from our historical results or those expressed or implied in any forward-looking statement contained in this Report. For instance, if we fail to develop and commercialize diagnostic products, we may be unable to execute our plan of operations. Other risks and uncertainties include those associated with the COVID-19 pandemic; our failure to obtain necessary regulatory clearances or approvals to distribute and market future products in the veterinary or clinical in-vitro diagnostics, or IVD, market; a failure by the marketplace to accept the products in our development pipeline or any other diagnostic products we might develop; our failure to secure adequate intellectual property protection; we will face fierce competition and our intended products may become obsolete due to the highly competitive nature of the diagnostics market and its rapid technological change; and other risks identified elsewhere in this Report, as well as in our other filings with the Securities and Exchange Commission, or the SEC. In addition, actual results may differ as a result of additional risks and uncertainties of which we are currently unaware or which we do not currently view as material to our business. For these reasons, readers are cautioned not to place undue reliance on any forward-looking statements.

 

You should read this Report in its entirety, together with our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, as filed with the SEC on February 20, 2020, or our Annual Report, the documents that we file as exhibits to this Report and the documents that we incorporate by reference into this Report, with the understanding that our future results may be materially different from what we currently expect. The forward-looking statements we make speak only as of the date on which they are made. We expressly disclaim any intent or obligation to update any forward-looking statements after the date hereof to conform such statements to actual results or to changes in our opinions or expectations. If we do update or correct any forward-looking statements, readers should not conclude that we will make additional updates or corrections.




Company Overview

 

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the interim consolidated financial statements and related condensed notes thereto, which are included in Part I of this Report.

 

VolitionRx is a multi-national epigenetics company that applies its NucleosomicsTM platform through its subsidiaries to develop simple, easy to use, cost-effective blood tests to help diagnose a range of cancers and other diseases. Our tests are based on the science of NucleosomicsTM, which is the practice of identifying and measuring nucleosomes in the bloodstream or other bodily fluid - since changes in these parameters are an indication that disease is present.

 

Our approach is to investigate the epigenetic structure of chromatin and nucleosomes rather than investigating only the DNA sequence. We are continuously developing new technologies including:

 

·A suite of low cost Nu.QTM immunoassays that can accurately measure nucleosomes containing numerous epigenetic signals or structure.  

 

·Nu.QTM Capture technology to isolate or enrich nucleosomes containing particular epigenetic signals or structures for a wide range of potential scientific and medical applications, such as the enrichment of nucleosomes of tumor origin in blood samples taken from cancer patients.  

 

·We plan to develop an ability to produce synthetic (recombinant) nucleosomes containing exact defined epigenetic signals and structures. These are used to ensure exquisite accuracy of Nu.QTM immunoassay tests but also have many other applications including as tools in epigenetic drug development. 

 

In addition to human diagnostics we are also developing the use of the Nu.QTM technology in veterinary applications. An initial proofapplications and are planning the launch of concept study demonstrated that nucleosomes can bethe Nu.QTM Vet Cancer Screening Test in late 2020. Further studies are ongoing or planned to extend the range of cancers detected in dogs and therefore, have the potential to differentiate cancer fromthen in other diseases. We will now test Nu.QTM platform in larger trials in veterinary medicine.animals. Our extensive intellectual property portfolio includes coverage of veterinary applications.

 

Developments - COVID-19 Pandemic

 

On March 11, 2020, the World Health Organization designated the outbreak of the novel strain of coronavirus known as COVID-19 as a global pandemic. Governments and businesses around the world have taken unprecedented actions to mitigate the spread of COVID-19, including, but not limited to, shelter-in-place orders, quarantines, significant restrictions on travel, as well as restrictions that prohibit many employees from going to work. Uncertainty with respect to the economic effects of the pandemic has introduced significant volatility in the financial markets.

 

During the first sixnine months of 2020, we implemented contingency planning to protect the health and well-being of our employees, with most employees working remotely where possible. We have implemented travel restrictions as well as visitor protocols and we are following social distancing practices. We did not observe significant impacts on our business or results of operations for the quarter ended JuneSeptember 30, 2020 due to the global emergence of COVID-19 or the mitigation actions taken to slow its spread. To the extent the pandemic worsens, we cannot predict the effects it may have on our business, in particular with respect to demand for our services, our strategy, and our prospects, or the impact on our financial results.

 

Plan of Operations

We have identified the specific processes and resources required to achieve the near and medium-term objectives of our business plan, including personnel, facilities, equipment, research and testing materials including antibodies and clinical samples, and the protection of intellectual property. To date, operations have proceeded satisfactorily in relation to our business plan. However, it is possible that some resources will not readily become available in a suitable form or on a timely basis or at an acceptable cost. It is also possible that the results of some processes may not be as expected, and that modifications of procedures and materials may be required. Such events could result in delays to the achievement of the near and medium-term objectives of our business plan, in particular the progression of clinical validation studies and regulatory approval processes for the purpose of bringing products to the IVD and veterinary markets.

Our future as an operating business will depend on our ability to obtain sufficient capital contributions, financing and/or generate revenues as may be required to sustain our operations.  Management plans to address the above as needed by: (a) securing additional grant funds; (b) obtaining additional equity or debt financing; (c) granting licenses to third parties in exchange for specified up-front and/or back-end payments; and (d) developing and commercializing our products on an accelerated timeline. Management continues to exercise tight cost controls to conserve cash.




Our ability to continue as a going concern is dependent upon our accomplishment of the plans described in the preceding paragraph and eventually to attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern. If we are unable to obtain adequate capital, we could be forced to cease operations.

Liquidity and Capital Resources

 

We have financed our operations since inception primarily through private placements and public offerings of our common stock. As of JuneSeptember 30, 2020, we had cash and cash equivalents of approximately $21.3$20.9 million.

 

Net cash used in operating activities was $9.2$13.7 million and $6.4$10.1 million for the sixnine months ended JuneSeptember 30, 2020 and JuneSeptember 30, 2019, respectively. The increase in cash used in operating activities for the period ended JuneSeptember 30, 2020 when compared to same period in 2019 was primarily due to increased expenditures on antibodies, sample purchases, stage payment to a collaborator partner and common stock issued for services.

 

Net cash used in investing activities was $0.6 million and $0.2$0.4 million for the sixnine months ended JuneSeptember 30, 2020 and JuneSeptember 30, 2019, respectively. The increase was primarily due to purchases of laboratory equipment.




Net cash provided by financing activities was $13.9$18.5 million and $11.8$16.4 million for the sixnine months ended JuneSeptember 30, 2020 and JuneSeptember 30, 2019, respectively. The increase in cash provided by financing activities for the period ended JuneSeptember 30, 2020 when compared to same period in 2019 was primarily due to $12.7 million in net cash received from the issuance of shares of common stock in a registered public offering in May 2020 and $1.7$6.5 million in net cash received from the issuance of shares of common stock pursuant to the Equity Distribution Agreement.

 

The following table summarizes our approximate contractual payments due by year as of JuneSeptember 30, 2020.

 

Approximate Payments (Including Interest) Due by Year

 

 

Total

 

2020 (Remaining)

 

2021 - 2024

 

2025 +

 

Total

 

2020 (Remaining)

 

2021 - 2024

 

2025 +

Description

 

$

 

$

 

$

 

$

 

$

 

$

 

$

 

$

Finance Lease Obligations

 

733,316

 

34,997

 

252,685

 

445,634

 

746,984

 

18,259

 

263,688

 

465,037

Operating Lease Obligations

 

251,814

 

121,708

 

130,106

 

-

 

278,781

 

74,831

 

203,950

 

-

Grants Repayable

 

341,427

 

52,915

 

166,158

 

122,354

 

315,259

 

14,186

 

173,393

 

127,680

Long-Term Debt

 

2,881,069

 

479,678

 

2,221,014

 

180,377

 

2,855,428

 

286,719

 

2,386,970

 

181,739

Collaborative Agreements Obligations

 

2,392,158

 

1,098,624

 

1,293,534

 

-

 

1,961,890

 

625,464

 

1,336,426

 

-

Total

 

6,599,784

 

1,787,922

 

4,063,497

 

748,365

 

6,158,342

 

1,019,459

 

4,364,427

 

774,456

 

 

 

 

 

 

 

 

We intend to use our cash reserves to predominantly fund further research and development activities. We do not currently have any substantial source of revenues and expect to rely on additional future financing, through the sale of equity or debt securities, or the sale of licensing rights, to provide sufficient funding to execute our strategic plan. There is no assurance that we will be successful in raising further funds.

 

In the event that additional financing is delayed, we will prioritize the maintenance of our research and development personnel and facilities, primarily in Belgium, and the maintenance of our patent rights. In such instance, the completion of clinical validation studies and regulatory approval processes for the purpose of bringing products to the IVD and veterinary market would be delayed. In the event of an ongoing lack of financing, it may be necessary to discontinue operations, which will adversely affect the value of our common stock.

 

We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive activities. For these reasons, our auditors stated in their report on our audited financial statements for the fiscal year ended December 31, 2019 an explanatory paragraph regarding factors that raise substantial doubt that we will be able to continue as a going concern.




Results of Operations

 

Comparison of the Three Months Ended JuneSeptember 30, 2020 and JuneSeptember 30, 2019

 

The following table sets forth our results of operations for the three months ended on JuneSeptember 30, 2020 and JuneSeptember 30, 2019, respectively:

 

 

 

 

 

Percentage

Three Months ended September 30,

 

Increase

 

Percentage Increase

Three Months ended June 30,

 

Increase

 

Increase

2020

 

2019

 

(Decrease)

 

(Decrease)

2020

 

2019

 

(Decrease)

 

(Decrease)

$

 

$

 

$

 

%

$

 

$

 

$

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service

-

 

16,204

 

(16,204)

 

(100%)

Royalty

1,872

 

-

 

1,872

 

100%

-

 

892

 

(892)

 

(100%)

Product

3,322

 

-

 

3,322

 

100%

575

 

-

 

575

 

100%

Total Revenues

5,194

 

-

 

5,194

 

100%

575

 

17,096

 

(16,521)

 

(97%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

3,492,845

 

2,478,930

 

1,013,915

 

41%

3,180,177

 

2,642,610

 

537,567

 

20%

General and administrative

1,508,836

 

1,436,461

 

72,375

 

5%

1,080,308

 

1,354,992

 

(274,684)

 

(20%)

Sales and marketing

215,891

 

238,124

 

(22,233)

 

(9%)

244,510

 

195,641

 

48,869

 

25%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Operating Expenses

5,217,572

 

4,153,515

 

1,064,057

 

26%

4,504,995

 

4,193,243

 

311,752

 

7%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Grant income

90,946

 

-

 

90,946

 

100%

-

 

-

 

-

 

-%

Gain on disposal of fixed assets

93,202

 

-

 

93,202

 

100%

200,393

 

-

 

200,393

 

100%

Interest income

7,741

 

29,459

 

(21,718)

 

(74%)

2,801

 

27,633

 

(24,832)

 

(90%)

Interest expense

(22,604)

 

(33,115)

 

(10,511)

 

(32%)

(34,722)

 

(32,291)

 

2,431

 

8%

Other expenses

-

 

-

 

-

 

-%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Other Income (Expenses)

169,285

 

(3,656)

 

(172,941)

 

(>100%)

168,472

 

(4,658)

 

173,130

 

>100%

Net Loss

(5,043,093)

 

(4,157,171)

 

885,922

 

21%

(4,335,948)

 

(4,180,805)

 

155,143

 

4%

 

Revenues

 

Our operations are still predominantly in the research and development stage and we had limited revenues of $5,194$575 and $nil$17,096 during the three months ended JuneSeptember 30, 2020 and JuneSeptember 30, 2019, respectively.

 

Operating Expenses

 

Total operating expenses increased to $5.2$4.5 million from $4.2 million for the three months ended JuneSeptember 30, 2020 and JuneSeptember 30, 2019, respectively, as a result of the factors described below.




Research and Development Expenses

 

Research and development expenses increased to $3.5$3.2 million from $2.5$2.6 million for the three months ended JuneSeptember 30, 2020 and JuneSeptember 30, 2019, respectively. This increase in overall research and development expenditures was primarily related to higher antibody costs, sample costs, laboratory expenses and personnel expenses during the period.

 

Three Months ended June 30,

 

 

Three Months ended

September 30,

 

 

2020

 

2019

 

Change

2020

 

2019

 

Change

$

 

$

 

$

$

 

$

 

$

Personnel expenses

1,212,777

 

932,333

 

280,444

1,152,952

 

992,868

 

160,084

Stock-based compensation

114,872

 

104,055

 

10,817

75,054

 

99,423

 

(24,369)

Direct research and development expenses

1,936,125

 

1,208,742

 

727,383

1,606,316

 

1,048,195

 

558,121

Other research and development

(50,770)

 

59,480

 

(110,250)

163,845

 

328,611

 

(164,766)

Depreciation and amortization

279,841

 

174,320

 

105,521

182,010

 

173,513

 

8,497

Total research and development expenses

3,492,845

 

2,478,930

 

1,013,915

3,180,177

 

2,642,610

 

537,567

 

General and Administrative Expenses

 

General and administrative expenses increaseddecreased to $1.5$1.1 million from $1.4 million for the three months ended JuneSeptember 30, 2020 and JuneSeptember 30, 2019, respectively. This was primarily due to lower personnel costs offset by higher legal and professional fees offset by lower travel costsin respect of financing activities during the period.

 

Three Months ended June 30,

 

 

Three Months ended

September 30,

 

 

2020

 

2019

 

Change

2020

 

2019

 

Change

$

 

$

 

$

$

 

$

 

$

Personnel expenses

511,652

 

565,657

 

(54,005)

483,033

 

562,964

 

(79,931)

Stock-based compensation

204,055

 

235,701

 

(31,646)

304,921

 

224,874

 

80,047

Legal and professional fees

507,732

 

321,859

 

185,873

327,346

 

196,020

 

131,326

Other general and administrative

230,146

 

301,500

 

(71,354)

(87,777)

 

349,733

 

(437,510)

Depreciation and amortization

55,251

 

11,744

 

43,507

52,785

 

21,401

 

31,384

Total general and administrative expenses

1,508,836

 

1,436,461

 

72,375

1,080,308

 

1,354,992

 

(274,684)

 

Sales and Marketing Expenses

 

Sales and marketing expenses were at the same level of $0.2 million for the three months ended JuneSeptember 30, 2020 and JuneSeptember 30, 2019, respectively. There was an increase in direct marketing professional fees offset by lower travel and personnel costs during the period.

 

Three Months ended June 30,

 

 

Three Months ended

September 30,

 

 

2020

 

2019

 

Change

2020

 

2019

 

Change

$

 

$

 

$

$

 

$

 

$

Personnel expenses

110,753

 

169,945

 

(59,192)

115,402

 

135,680

 

(20,278)

Stock-based compensation

41,713

 

39,877

 

1,836

48,709

 

46,088

 

2,621

Direct marketing and professional fees

63,425

 

28,302

 

35,123

80,399

 

13,873

 

66,526

Total sales and marketing expenses

215,891

 

238,124

 

(22,233)

244,510

 

195,641

 

48,869

 

Other Income (Expenses)

 

For the three months ended JuneSeptember 30, 2020, the Company’s other income was $169,285$168,472 compared to other expenses of $3,656,$4,658 for the three months ended JuneSeptember 30, 2019. The increase in other income was due to grant income received and a gain on disposal of a fixed asset, offset by less interest received from cash deposited in an overnight money market deposit account.

 

Net Loss

 

For the three months ended JuneSeptember 30, 2020, the Company’s net loss was $5.0$4.3 million comparedin comparison to a net loss of $4.2 million for the three months ended JuneSeptember 30, 2019. The change was a result of the factors described above.




Comparison of the SixNine Months Ended JuneSeptember 30, 2020 and JuneSeptember 30, 2019

 

The following table sets forth our results of operations for the sixnine months ended on JuneSeptember 30, 2020 and JuneSeptember 30, 2019, respectively:

 

 

 

 

 

Percentage

Nine Months Ended

September 30,

 

Increase

 

Percentage Increase

Six Months Ended June 30,

 

Increase

 

Increase

2020

 

2019

 

(Decrease)

 

(Decrease)

2020

 

2019

 

(Decrease)

 

(Decrease)

$

 

$

 

$

 

%

$

 

$

 

$

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service

-

 

16,204

 

(16,204)

 

(100%)

Royalty

2,112

 

-

 

2,112

 

100%

2,112

 

892

 

1,220

 

>100%

Product

3,626

 

-

 

3,626

 

100%

4,201

 

-

 

4,201

 

100%

Total Revenues

5,738

 

-

 

5,738

 

100%

6,313

 

17,096

 

(10,783)

 

(63%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

7,387,811

 

4,953,489

 

2,434,322

 

49%

10,567,988

 

7,596,097

 

2,971,891

 

39%

General and administrative

3,212,358

 

2,665,901

 

546,457

 

20%

4,292,666

 

4,020,893

 

271,773

 

7%

Sales and marketing

489,845

 

522,404

 

(32,559)

 

(6%)

734,355

 

718,047

 

16,308

 

2%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Operating Expenses

11,090,014

 

8,141,794

 

2,948,220

 

36%

15,595,009

 

12,335,037

 

3,259,972

 

26%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Grant income

98,870

 

-

 

98,870

 

100%

98,870

 

-

 

98,870

 

100%

Gain on disposal of fixed assets

93,202

 

-

 

93,202

 

100%

293,595

 

-

 

293,595

 

100%

Interest income

46,155

 

41,023

 

5,132

 

13%

48,956

 

68,656

 

(19,700)

 

(29%)

Interest expense

(56,383)

 

(63,216)

 

6,833

 

(11%)

(91,105)

 

(95,507)

 

(4,402)

 

(5%)

Other expenses

-

 

(196,957)

 

196,957

 

(100%)

-

 

(196,957)

 

(196,957)

 

(100%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Other Income (Expenses)

181,844

 

(219,150)

 

400,994

 

(183%)

350,316

 

(223,808)

 

574,124

 

>100%

Net Loss

(10,902,432)

 

(8,360,944)

 

2,541,488

 

30%

(15,238,380)

 

(12,541,749)

 

2,696,631

 

22%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

Our operations are still predominantly in the research and development stage and we had limited revenues of $5,738$6,313 and $nil$17,096 during the sixnine months ended JuneSeptember 30, 2020 and JuneSeptember 30, 2019, respectively.

 

Operating Expenses

 

Total operating expenses increased to $11.1$15.6 million from $8.1$12.3 million for the sixnine months ended JuneSeptember 30, 2020 and JuneSeptember 30, 2019, respectively as a result of the factors described below.




Research and Development Expenses

 

Research and development expenses increased to $7.4$10.6 million for the sixnine months ended JuneSeptember 30, 2020, from $5.0$7.6 million for the sixnine months ended JuneSeptember 30, 2019. This increase in overall research and development expenditures was primarily related to higher antibody costs, higher sample costs, laboratory expenses and personnel expenses and management compensation connected to Volition Germany during the 2020 period.

 

 

Six Months Ended June 30,

 

 

 

2020

 

2019

 

Change

 

$

 

$

 

$

Personnel expenses

2,506,925

 

1,864,322

 

642,603

Stock-based compensation

177,291

 

199,046

 

(21,755)

Direct research and development expenses

3,364,563

 

2,222,030

 

1,142,533

Other research and development

966,105

 

323,153

 

642,952

Depreciation and amortization

372,927

 

344,938

 

27,989

Total research and development expenses

7,387,811

 

4,953,489

 

2,434,322

 

Nine Months Ended

September 30,

 

 

 

2020

 

2019

 

Change

 

$

 

$

 

$

Personnel expenses

3,611,730

 

2,850,614

 

761,116

Stock-based compensation

252,344

 

298,686

 

(46,342)

Direct research and development expenses

4,970,879

 

3,276,582

 

1,694,297

Other research and development

1,178,098

 

651,764

 

526,334

Depreciation and amortization

554,937

 

518,451

 

36,486

Total research and development expenses

10,567,988

 

7,596,097

 

2,971,891




General and Administrative Expenses

 

General and administrative expenses increased to $3.2$4.3 million from $2.7$4.0 million for the sixnine months ended JuneSeptember 30, 2020 and JuneSeptember 30, 2019, respectively. This increase was primarily due to higher legalprofessional fees and foreign exchange costs,in respect of financing activities, offset by lower stock–basedpersonnel expenses and stock-based compensation charges during the 2020 period.

 

Six Months Ended June 30,

 

 

Nine Months Ended

September 30,

 

 

2020

 

2019

 

Change

2020

 

2019

 

Change

$

 

$

 

$

$

 

$

 

$

Personnel expenses

1,040,831

 

1,181,261

 

(140,430)

1,523,864

 

1,688,747

 

(164,883)

Stock-based compensation

311,320

 

430,765

 

(119,445)

616,241

 

655,639

 

(39,398)

Legal and professional fees

927,589

 

631,317

 

296,272

1,254,935

 

882,815

 

372,120

Other general and administrative

820,441

 

401,587

 

418,854

732,664

 

751,320

 

(18,656)

Depreciation and amortization

112,177

 

20,971

 

91,206

164,962

 

42,372

 

122,590

Total general and administrative expenses

3,212,358

 

2,665,901

 

546,457

4,292,666

 

4,020,893

 

271,773

 

Sales and Marketing Expenses

 

Sales and marketing expenses were at the same level of $0.5$0.7 million for the sixnine months ended JuneSeptember 30, 2020 and JuneSeptember 30, 2019, respectively. There was an increase in direct marketing professional fees offset by lower stock-based compensation costs and travel costs during the 2020 period.

 

Six Months Ended June 30,

 

 

Nine Months Ended

September 30,

 

 

2020

 

2019

 

Change

2020

 

2019

 

Change

$

 

$

 

$

$

 

$

 

$

Personnel expenses

261,698

 

327,784

 

(66,086)

377,100

 

463,466

 

(86,366)

Stock-based compensation

64,698

 

90,280

 

(25,582)

113,407

 

136,368

 

(22,961)

Direct marketing and professional fees

163,449

 

104,340

 

59,109

243,848

 

118,213

 

125,635

Total sales and marketing expenses

489,845

 

522,404

 

(32,559)

734,355

 

718,047

 

16,308

 

Other Income (Expenses)

 

For the sixnine months ended JuneSeptember 30, 2020, the Company’s other income was $181,844$350,316 compared to other expenses of $219,150$223,808 for the sixnine months ended JuneSeptember 30, 2019. This increase in other income was primarily due to grant income received, interest received from cash deposited in an overnight money market deposit account, and a gain on disposal of a fixed asset,assets, and grant income received, offset by other expenses related to the amendment to outstanding warrants which resulted in a $196,957 expense in the same period in 2019.




Net Loss

 

For the sixnine months ended JuneSeptember 30, 2020, the Company’s net loss was $10.9$15.2 million an increase of approximately $2.5 million, or 30%, in comparison to a net loss of $8.4$12.5 million for the sixnine months ended JuneSeptember 30, 2019. The change was a result of the factors described above.

 

Going Concern

 

We have not attained profitable operations and are dependent upon obtaining external financing to continue to pursue our operational and strategic plans. For these reasons, management has determined that there is substantial doubt that the business will be able to continue as a going concern without further financing.

 

Off-Balance Sheet Arrangements

 

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.




Future Financings

 

We may seek to obtain additional capital through the sale of debt or equity securities, if we deem it desirable or necessary. However, we may be unable to obtain such additional capital when needed, or on terms favorable to us or our stockholders, if at all. If we raise additional funds by issuing equity securities, the percentage ownership of our stockholders will be reduced, stockholders may experience additional dilution, or such equity securities may provide for rights, preferences or privileges senior to those of the holders of our common stock. If additional funds are raised through the issuance of debt securities, the terms of such securities may place restrictions on our ability to operate our business.

 

Critical Accounting Policies

 

Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles, or U.S. GAAP, applied on a consistent basis. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

 

We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements.  A complete summary of these policies is included in the notes to our financial statements. In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.

 

Recently Issued Accounting Pronouncements

 

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




ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 

 

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

 

ITEM 4. CONTROLS AND PROCEDURES 

 

Disclosure Controls and Procedures

 

Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including our Principal Executive and Principal Financial Officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

Our management carried out an evaluation under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer have concluded, as they previously concluded as of December 31, 2019, that our disclosure controls and procedures continue to not be effective as of JuneSeptember 30, 2020, because of material weaknesses in our internal control over financial reporting, as described below and in detail in our Annual Report.




Changes in Internal Control over Financial Reporting

 

The Audit Committee of the Board of Directors meets regularly with our financial management, and with the independent registered public accounting firm engaged by us. Internal accounting controls and the quality of financial reporting are discussed during these meetings. The Audit Committee has discussed with the independent registered public accounting firm matters required to be discussed by the auditing standards adopted or established by the Public Company Accounting Oversight Board (“PCAOB”). In addition, the Audit Committee and the independent registered public accounting firm have discussed the independent registered public accounting firm’s independence from the Company and its management, including the matters in the written disclosures required by PCAOB Rule 3526, Communicating with Audit Committees Concerning IndependenceIndependence.”.”

 

As of JuneSeptember 30, 2020, we did not maintain sufficient internal controls over financial reporting due to insufficient:

 

·segregation of duties in some areas of Finance;   

·oversight in the area of Information Technology, where certain processes may affect the internal controls over financial reporting; and  

·monitoring of review controls with respect to accounting for complex transactions. 

 

We have developed, and are currently implementing, a remediation plan for these material weaknesses. Specifically, we have implementedidentified and selected a system for financial reporting system that has allowedwill allow further automation of the reporting process, thereby strengthening the control environment over financial reporting. As we continue to evaluate and work to enhance our internal controls over financial reporting, we may determine that additional measures should be taken to address these or other control deficiencies, and/or that we should modify our remediation plan considering the Company’s size and growth.

 

There have been no changes in our internal controls over financial reporting that occurred during the fiscal quarter ended JuneSeptember 30, 2020, other than those described above, that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

 

Once the Company is engaged in stable business operations and has sufficient personnel and resources available, then our Board of Directors, in particular and in connection with the aforementioned deficiencies, will establish the following remediation measures:

 

·Additional Finance resources will be recruited to resolve the segregation of duties control weaknesses noted above; 

·Internal audit resources will be contracted to review and advise on control weaknesses across the organization; and  

·Specialist resources in IT and Human Resources will be recruited to recommend and implement relevant policy and processes to strengthen IT and Human Resources internal controls associated with financial reporting. 




·

 

Limitations of the Effectiveness of Disclosure Controls and Internal Controls

 

Our management, including our Principal Executive Officer and Principal Financial Officer, does not expect that our disclosure controls and internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control.

 

The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving our stated goals under all potential future conditions; over time, a control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.




PART II -    OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS 

 

In the ordinary course of business, we may be subject to claims, counter claims, lawsuits and other litigation of the type that generally arise from the conduct of our business. We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which our directors, officers or any affiliates, or any registered or beneficial stockholders, is an adverse party or has a material interest adverse to our interest.

 

ITEM 1A.RISK FACTORS 

 

There have been no material changes in our assessment of risk factors affecting our business since those presented in Part I, Item 1A of our Annual Report, as supplemented in Part II, Item 1A of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020.

 

ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 

 

None.

 

ITEM 3.DEFAULTS UPON SENIOR SECURITIES 

 

None.

 

ITEM 4.MINE SAFETY DISCLOSURES 

 

Not applicable.

 

ITEM 5.OTHER INFORMATION 

 

None.Consulting Agreement

On November 10, 2020, the Company entered into a consulting services agreement through a related party transaction between its wholly-owned subsidiary, Singapore Volition and PB Commodities Pte. Ltd (“PB Commodities”).  The agreement is effective as of December 1, 2020 and provides for consultancy services to be rendered by Cameron Reynolds through PB Commodities to Singapore Volition.  Singapore Volition will also make available the services of Mr. Reynolds, as Group Chief Executive Officer, to the Company and its other subsidiaries, pursuant to services agreements entered into by and between Singapore Volition and the Company or its subsidiaries. PB Commodities will receive a monthly fee of $35,650 in exchange for the services provided by Mr. Reynolds.  The term of the agreement is perpetual until terminated upon six months’ prior notice. The agreement includes a six-month non-compete following termination of the agreement.  The consulting services agreement replaces in its entirety the employment agreement by and between Volition Diagnostics and Mr. Reynolds, dated March 7, 2017, which was terminated upon mutual agreement of the parties. The foregoing description of the consulting services agreement does not purport to be complete and is qualified in its entirety by such consulting services agreement, a copy of which is filed as Exhibit 10.1 to this Report.




Equity Distribution Agreement

On November 12, 2020, the Company entered into an Equity Distribution Agreement (the “EDA”) with Cantor Fitzgerald & Co. (“Cantor”) and Oppenheimer & Co. Inc. (“Oppenheimer”), to sell shares of its Common Stock, par value $0.001 (the “Common Stock”), having an aggregate offering price of up to $25,000,000 (the “Shares”) from time to time, through an “at the market” offering program (the “New ATM Offering”) under which Oppenheimer and Cantor will jointly act as sales agents (the “Sales Agents”).  The offer and sale of the Shares will be made pursuant to the Company’s effective “shelf” registration statement on Form S-3 (File No. 333-227248), the base prospectus contained therein, dated September 28, 2018, and a prospectus supplement related to the New ATM Offering, dated November 12, 2020.  The Company is not obligated to sell any shares under the EDA.  Subject to the terms and conditions of the EDA, the Sales Agents will use commercially reasonable efforts to sell on the Company’s behalf all of the Common Stock requested to be sold by the Company, consistent with its normal trading and sales practices, upon the Company’s instructions, including any price, time or size limits specified by the Company.  The Sales Agents’ obligations to sell Shares under the EDA are subject to the satisfaction of certain conditions. The Company will pay the Sales Agents a commission of up to 3% of the aggregate gross proceeds from each sale of Shares occurring pursuant to the EDA, if any, and has agreed to provide the Sales Agents with customary indemnification and contribution rights, including with respect to certain liabilities under the Securities Act of 1933, as amended. The Company has also agreed to reimburse the Sales Agents for legal fees and disbursements, not to exceed $50,000 in the aggregate, in connection with the EDA.  The EDA may be terminated by the Sales Agents or the Company at any time upon written notice to the other party(ies), as permitted therein. The foregoing description of the EDA does not purport to be complete and is qualified in its entirety by such EDA, a copy of which is filed as Exhibit 1.1 to this Report on Form 10-Q.

The legal opinion of Stradling Yocca Carlson & Rauth, P.C., counsel to the Company, related to the Shares is filed as Exhibit 5.1 to this Report.




ITEM 6. EXHIBITS 

 

 

 

 

 

Incorporated by Reference

 

Exhibit

Number

 

Exhibit Description

 

Form

 

File No.

 

Exhibit

 

Filing Date

 

Filed

Herewith

 

 

 

 

 

 

 

 

 

 

 

 

 

10.1

 

Underwriting Agreement, dated May 20, 2020, between the Company and National Securities Corporation, as representative of the several Underwriters named therein.

 

8-K

 

001-36833

 

1.1

 

5/22/20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

31.1

 

Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended.

 

 

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

31.2

 

Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended.

 

 

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

32.1*

 

Certifications of Chief Executive Officer and Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

 

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

101.INS

 

XBRL Instance Document.

 

 

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

101.SCH

 

XBRL Taxonomy Extension Schema Document.

 

 

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

101.CAL

 

XBRL Taxonomy Extension Calculation Linkbase Document.

 

 

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

101.LAB

 

XBRL Taxonomy Extension Label Linkbase Document.

 

 

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

101.PRE

 

XBRL Taxonomy Extension Presentation Linkbase Document.

 

 

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

101.DEF

 

XBRL Taxonomy Extension Definition Linkbase Document.

 

 

 

 

 

 

 

 

 

X

Incorporated by Reference

Exhibit Number

Exhibit Description

Form

File No.

Exhibit

Filing Date

Filed Herewith

1.1

Equity Distribution Agreement, dated November 12, 2020, by and among the Company, Oppenheimer & Co. Inc. and Cantor Fitzgerald & Co.

X

5.1

Legal Opinion of Stradling Yocca Carlson & Rauth, P.C.

X

10.1#

Consulting Services Agreement, dated November 10, 2020, by and between Singapore Volition Pte. Limited and PB Commodities Pte. Ltd.

X

23.1

Consent of Stradling Yocca Carlson & Rauth, P.C. (included in Exhibit 5.1 above).

31.1

Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended.

X

31.2

Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended.

X

32.1*

Certifications of Chief Executive Officer and Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

X

101.INS

XBRL Instance Document.

X

101.SCH

XBRL Taxonomy Extension Schema Document.

X

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document.

X

101.LAB

XBRL Taxonomy Extension Label Linkbase Document.

X

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document.

X

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document.

X

#Indicates a management contract or compensatory plan or arrangement. 

 

*The certifications attached as Exhibit 32.1 accompany this Quarterly Report pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall not be deemed “filed” by the registrant for purposes of Section 18 of the Exchange Act and are not to be incorporated by reference into any of the registrant’s filings under the Securities Act or the Exchange Act, irrespective of any general incorporation language contained in any such filingfiling. 




SIGNATURESSIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

 

VOLITIONRX LIMITED

 

 

 

 

 

 

 

 

Dated: August 13,November 12, 2020

 

By:  /s/ Cameron Reynolds                                    

 

 

 

Cameron Reynolds

 

 

 

President and Chief Executive Officer

(Authorized Signatory and Principal Executive Officer)

 

 

 

 

 

 

 

 

Dated: August 13,November 12, 2020

 

By:  /s/ David Vanston                   ��                       

 

 

 

David Vanston

 

 

 

Chief Financial Officer and Treasurer

(Authorized Signatory and Principal Financial

and Accounting Officer)


3436