UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

 

For the quarterly period ended September 30, 2024

 

     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)

 

Delaware

91-1949078

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

1489 West Warm Springs Road, Suite 110

Henderson, Nevada

89014

(Address of principal executive offices)

(Zip Code)

 

+1 (646) 650–1351

(Registrant’s telephone number, including area code)

 

N/A

(Former name, former address and former fiscal year, if changed since last report)

 

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, par value $0.001 per share

VNRX

NYSE American, LLC

 

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. ☒ Yes     ☐ 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). ☒ Yes     ☐ 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

Smaller reporting company

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     ☒ No

 

As of November 6, 2024, there were 92,664,812 shares of the registrant’s $0.001 par value common stock issued and outstanding.

 

 

 

 

VOLITIONRX LIMITED

 

QUARTERLY REPORT ON FORM 10-Q

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024

 

TABLE OF CONTENTS

 

PART I

FINANCIAL INFORMATION

PAGE

 

 

 

 

 

 

Item 1.

FINANCIAL STATEMENTS (UNAUDITED)

4

 

Item 2.

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

31

 

Item 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

39

 

Item 4.

CONTROLS AND PROCEDURES

39

 

 

 

 

 

 

PART II

OTHER INFORMATION

 

 

 

 

 

 

Item 1.

LEGAL PROCEEDINGS

41

 

Item 1A.

RISK FACTORS

41

 

Item 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

41

 

Item 3.

DEFAULTS UPON SENIOR SECURITIES

41

 

Item 4.

MINE SAFETY DISCLOSURES

41

 

Item 5.

OTHER INFORMATION

41

 

Item 6.

EXHIBITS

42

 

 

 

 

 

 

SIGNATURES

44

 

 

Use of Terms

 

Except as otherwise indicated by the context, references in this Quarterly Report on Form 10-Q to the “Company,” “VolitionRx,” “Volition,” “we,” “us,” and “our” are references to VolitionRx Limited and its wholly owned subsidiaries, Volition Global Services SRL, Singapore Volition Pte. Limited, Belgian Volition SRL, Volition Diagnostics UK Limited, Volition America, Inc., and 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, Capture-PCRTM, Nu.Q® 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 herein are the property of their respective owners.

 

 
2

Table of Contents

 

 

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024, 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, which statements are subject to considerable risks and uncertainties. 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, statements regarding predictions of earnings, revenues, expenses or other financial items; plans or expectations with respect to our development activities or business strategy; clinical studies and results; industry trends; anticipated demand for our products, or the products of our competitors; manufacturing forecasts, and the potential impact of our relationship with contract manufacturers and original equipment manufacturers on our business; the commercialization of our products and the relationships and anticipated outcome of our engagements with our licensors; the future cost and potential benefits of our research and development efforts; forecasts of our liquidity position or available cash resources; our anticipated use of our cash reserves; the impact of pending litigation; 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.

 

Some significant factors that may impact our estimates and forward-looking statements include, but are not limited to:

 

·

Our inability to generate any significant revenues or achieve profitability;

·

Our need to raise additional capital in the future;

·

Our expansion of our product development and sales and marketing capabilities could give rise to difficulties in managing our growth;

·

Our dependence on third-party distributors;

·

Our limited experience with sales and marketing;

·

The possibility that we may not be able to continue to operate, as indicated by the “going concern” opinion from our auditors;

·

Our ability to successfully develop, manufacture, market, and sell our future products;

·

Our ability to timely obtain necessary regulatory clearances or approvals to distribute and market our future products;

·

The acceptance by the marketplace of our future products;

·

The highly competitive and rapidly changing nature of the diagnostics market;

·

Protection of our patents, intellectual property and trade secrets;

·

Our reliance on third parties to manufacture and supply our intended products, and such manufacturers’ dependence on third-party suppliers;

·

Pressures related to macroeconomic and geopolitical conditions;

·

The material weaknesses in our internal control over financial reporting that we have identified; 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. Our actual financial condition and results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed in the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” within this Report, as well as in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as filed with the SEC on March 25, 2024, or our Annual Report, in 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. Except as required by law or the listing rules of the NYSE American Market, we expressly disclaim any intent or obligation to update any forward-looking statements after the date hereof. If we do update or correct any forward-looking statements, readers should not conclude that we will make additional updates or corrections. We qualify all of our forward-looking statements with these cautionary statements.

 

 
3

Table of Contents

  

PART I FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

 

 

Page

 

 

 

Condensed Consolidated Balance Sheets

 

5

 

Condensed Consolidated Statements of Operations and Comprehensive Loss

 

6

 

Condensed Consolidated Statements of Stockholders’ Deficit

 

7

 

Condensed Consolidated Statements of Cash Flows

 

9

 

Notes to the Condensed Consolidated Financial Statements

 

10

 

 

 
4

Table of Contents

  

VOLITIONRX LIMITED

Condensed Consolidated Balance Sheets

(Expressed in United States Dollars, except share numbers)

 

 

 

September 30,

 

 

December 31,

 

 

 

2024

 

 

2023

 

 

 

$

 

 

$

 

ASSETS

 

(UNAUDITED)

 

 

 

 

Current Assets

 

 

 

 

 

 

Cash and cash equivalents

 

 

5,414,146

 

 

 

20,729,983

 

Accounts receivable

 

 

312,611

 

 

 

242,617

 

Prepaid expenses

 

 

689,995

 

 

 

521,370

 

Other current assets

 

 

384,189

 

 

 

360,125

 

Total Current Assets

 

 

6,800,941

 

 

 

21,854,095

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

4,908,148

 

 

 

5,523,013

 

Operating lease right-of-use assets

 

 

635,857

 

 

 

549,504

 

Intangible assets, net

 

 

335,309

 

 

 

23,886

 

Total Assets

 

 

12,680,255

 

 

 

27,950,498

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

 

2,485,077

 

 

 

3,211,287

 

Accrued liabilities

 

 

3,480,207

 

 

 

3,928,761

 

Deferred revenue

 

 

22,893,400

 

 

 

23,000,000

 

Management and directors’ fees payable

 

 

24,851

 

 

 

59,625

 

Current portion of long-term debt

 

 

965,021

 

 

 

1,207,007

 

Current portion of finance lease liabilities

 

 

49,990

 

 

 

48,570

 

Current portion of operating lease liabilities

 

 

219,060

 

 

 

199,323

 

Current portion of grant repayable

 

 

65,646

 

 

 

55,855

 

Warrant liability

 

 

96,225

 

 

 

126,649

 

Total Current Liabilities

 

 

30,279,477

 

 

 

31,837,077

 

 

 

 

 

 

 

 

 

 

Long-term debt, net of current portion

 

 

3,837,950

 

 

 

3,624,860

 

Finance lease liabilities, net of current portion

 

 

366,175

 

 

 

400,022

 

Operating lease liabilities, net of current portion

 

 

448,045

 

 

 

378,054

 

Grant repayable, net of current portion

 

 

388,898

 

 

 

422,707

 

Total Long-Term Liabilities

 

 

5,041,068

 

 

 

4,825,643

 

Total Liabilities

 

 

35,320,545

 

 

 

36,662,720

 

 

 

 

 

 

 

 

 

 

Stockholders' Deficit

 

 

 

 

 

 

 

 

Common Stock

 

 

 

 

 

 

 

 

Authorized: 175,000,000 shares of common stock, at $0.001 par value per share

 

 

 

 

 

 

 

 

Issued and outstanding: 92,392,570 shares and 81,898,321 shares, respectively

 

 

92,393

 

 

 

81,898

 

Additional paid-in capital

 

 

202,014,277

 

 

 

194,448,414

 

Accumulated other comprehensive income

 

 

140,272

 

 

 

243,940

 

Accumulated deficit

 

 

(223,750,970 )

 

 

(202,576,507 )

Total VolitionRx limited Stockholders' Deficit

 

 

(21,504,028 )

 

 

(7,802,255 )

Non-controlling interest

 

 

(1,136,262 )

 

 

(909,967 )

Total Stockholders’ Deficit

 

 

(22,640,290 )

 

 

(8,712,222 )

 

 

 

 

 

 

 

 

 

Total Liabilities and Stockholders’ Deficit

 

 

12,680,255

 

 

 

27,950,498

 

 

 

 

 

 

 

 

 

 

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

 

 
5

Table of Contents

  

VOLITIONRX LIMITED

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

(Expressed in United States Dollars, except share numbers)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

 

$

 

 

$

 

 

$

 

 

$

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Services

 

 

68,434

 

 

 

37,688

 

 

 

155,713

 

 

 

93,207

 

Product

 

 

406,088

 

 

 

127,523

 

 

 

886,141

 

 

 

438,122

 

Total Revenues

 

 

474,522

 

 

 

165,211

 

 

 

1,041,854

 

 

 

531,329

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

3,473,782

 

 

 

4,650,658

 

 

 

11,819,106

 

 

 

15,007,623

 

General and administrative

 

 

1,815,863

 

 

 

2,599,908

 

 

 

6,353,647

 

 

 

7,826,568

 

Sales and marketing

 

 

1,053,584

 

 

 

1,567,700

 

 

 

4,112,731

 

 

 

4,944,259

 

Total Operating Expenses

 

 

6,343,229

 

 

 

8,818,266

 

 

 

22,285,484

 

 

 

27,778,450

 

Operating Loss

 

 

(5,868,707 )

 

 

(8,653,055 )

 

 

(21,243,630 )

 

 

(27,247,121 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Income (Expenses)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Grant income

 

 

85,378

 

 

 

48,656

 

 

 

85,378

 

 

 

214,451

 

Loss on disposal of fixed assets

 

 

(1,195 )

 

 

(15,913 )

 

 

(34,693 )

 

 

(15,913 )

Interest income

 

 

530

 

 

 

230

 

 

 

9,634

 

 

 

84,987

 

Interest expense

 

 

(89,456 )

 

 

(53,980 )

 

 

(247,871 )

 

 

(163,623 )

Gain on change in fair value of warrant liability

 

 

4,872

 

 

 

220,874

 

 

 

30,424

 

 

 

249,845

 

Total Other Income (Expenses)

 

 

129

 

 

 

199,867

 

 

 

(157,128 )

 

 

369,747

 

Net Loss

 

 

(5,868,578 )

 

 

(8,453,188 )

 

 

(21,400,758 )

 

 

(26,877,374 )

Net Loss Attributable to Non-Controlling Interest

 

 

47,049

 

 

 

82,887

 

 

 

226,295

 

 

 

256,546

 

Net Loss Attributable to VolitionRx Limited Stockholders

 

 

(5,821,529 )

 

 

(8,370,301 )

 

 

(21,174,463 )

 

 

(26,620,828 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Comprehensive Income (Loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

(141,980 )

 

 

31,291

 

 

 

(103,668 )

 

 

12,525

 

Net Comprehensive Loss

 

 

(6,010,558 )

 

 

(8,421,897 )

 

 

(21,504,426 )

 

 

(26,864,849 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

(0.07 )

 

 

(0.11 )

 

 

(0.25 )

 

 

(0.39 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Shares Outstanding– Basic and Diluted

 

 

87,886,012

 

 

 

78,176,859

 

 

 

84,165,579

 

 

 

68,494,766

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 
6

Table of Contents

  

VOLITIONRX LIMITED

Condensed Consolidated Statements of Stockholders’ Deficit (Unaudited)

(Expressed in United States Dollars, except share numbers)

 

For the Nine Months Ended September 30, 2024 and September 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

Non -

 

 

 

 

 

 

Common Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Controlling

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income

 

 

Deficit

 

 

Interest

 

 

Total

 

 

 

#

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

Balance, December 31, 2023

 

 

81,898,321

 

 

 

81,898

 

 

 

194,448,414

 

 

 

243,940

 

 

 

(202,576,507 )

 

 

(909,967 )

 

 

(8,712,222 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued for cash, net of issuance costs

 

 

13,350

 

 

 

13

 

 

 

15,721

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

15,734

 

Common stock issued for settlement of RSUs

 

 

68,169

 

 

 

69

 

 

 

(69 )

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Common stock issued in lieu of license fee

 

 

129,132

 

 

 

129

 

 

 

125,129

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

125,258

 

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

411,220

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

411,220

 

Tax withholdings paid related to stock-based compensation

 

 

-

 

 

 

-

 

 

 

(3,062 )

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(3,062 )

Foreign currency translation

 

 

-

 

 

 

-

 

 

 

-

 

 

 

15,026

 

 

 

-

 

 

 

-

 

 

 

15,026

 

Net loss for the period

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(8,367,388 )

 

 

(104,617 )

 

 

(8,472,005 )

Balance, March 31, 2024

 

 

82,108,972

 

 

 

82,109

 

 

 

194,997,353

 

 

 

258,966

 

 

 

(210,943,895 )

 

 

(1,014,584 )

 

 

(16,620,051 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued for cash, net of issuance costs

 

 

734,155

 

 

 

734

 

 

 

588,754

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

589,488

 

Common stock issued for settlement of RSUs

 

 

85,187

 

 

 

85

 

 

 

(85 )

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

208,046

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

208,046

 

Tax withholdings paid related to stock-based compensation

 

 

-

 

 

 

-

 

 

 

(38,205 )

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(38,205 )

Foreign currency translation

 

 

-

 

 

 

-

 

 

 

-

 

 

 

23,286

 

 

 

-

 

 

 

-

 

 

 

23,286

 

Net loss for the period

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(6,985,546 )

 

 

(74,629 )

 

 

(7,060,175 )

Balance, June 30, 2024

 

 

82,928,314

 

 

 

82,928

 

 

 

195,755,863

 

 

 

282,252

 

 

 

(217,929,441 )

 

 

(1,089,213 )

 

 

(22,897,611 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued for cash, net of issuance costs

 

 

9,170,000

 

 

 

9,170

 

 

 

5,951,030

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

5,960,200

 

Common stock issued for settlement of RSUs

 

 

294,256

 

 

 

295

 

 

 

(295 )

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

323,539

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

323,539

 

Tax withholdings paid related to stock-based compensation

 

 

-

 

 

 

-

 

 

 

(15,860 )

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(15,860 )

Foreign currency translation

 

 

-

 

 

 

-

 

 

 

 

 

 

 

(141,980 )

 

 

-

 

 

 

-

 

 

 

(141,980 )

Net loss for the period

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

(5,821,529 )

 

 

(47,049 )

 

 

(5,868,578 )

Balance, September 30, 2024

 

 

92,392,570

 

 

 

92,393

 

 

 

202,014,277

 

 

 

140,272

 

 

 

(223,750,970 )

 

 

(1,136,262 )

 

 

(22,640,290 )

 

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

 

 
7

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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, 2022

 

 

57,873,379

 

 

 

57,873

 

 

 

164,397,468

 

 

 

227,097

 

 

 

(167,257,429 )

 

 

(551,971 )

 

 

(3,126,962 )

Common stock issued for cash, net of issuance costs

 

 

5,225,703

 

 

 

5,225

 

 

 

8,422,430

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

8,427,655

 

Common stock issued for settlement of RSUs

 

 

26,978

 

 

 

27

 

 

 

(27 )

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

693,657

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

693,657

 

Tax withholdings paid related to stock-based compensation

 

 

-

 

 

 

-

 

 

 

(14,336 )

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(14,336 )

Common stock repurchased

 

 

(13,294 )

 

 

(13 )

 

 

(31,759 )

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(31,772 )

Foreign currency translation

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(56,478 )

 

 

-

 

 

 

-

 

 

 

(56,478 )

Net loss for the period

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(8,779,548 )

 

 

(93,361 )

 

 

(8,872,909 )

Balance, March 31, 2023

 

 

63,112,766

 

 

 

63,112

 

 

 

173,467,433

 

 

 

170,619

 

 

 

(176,036,977 )

 

 

(645,332 )

 

 

(2,981,145 )

Common stock issued for cash, net of issuance costs

 

 

14,950,000

 

 

 

14,950

 

 

 

17,071,656

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

17,086,606

 

Common stock issued for settlement of RSUs

 

 

74,598

 

 

 

75

 

 

 

(75 )

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

592,174

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

592,174

 

Tax withholdings paid related to stock-based compensation

 

 

-

 

 

 

-

 

 

 

(65,895 )

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(65,895 )

Foreign currency translation

 

 

-

 

 

 

-

 

 

 

-

 

 

 

37,712

 

 

 

-

 

 

 

-

 

 

 

37,712

 

Net loss for the period

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(9,470,979 )

 

 

(80,298 )

 

 

(9,551,277 )

Balance, June 30, 2023

 

 

78,137,364

 

 

 

78,137

 

 

 

191,065,293

 

 

 

208,331

 

 

 

(185,507,956 )

 

 

(725,630 )

 

 

5,118,175

 

Issuance costs

 

 

-

 

 

 

-

 

 

 

(12,501 )

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(12,501 )

Common stock issued for settlement of RSUs

 

 

206,053

 

 

 

206

 

 

 

(206 )

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

537,980

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

537,980

 

Tax withholdings paid related to stock-based compensation

 

 

-

 

 

 

-

 

 

 

(73,066 )

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(73,066 )

Foreign currency translation

 

 

-

 

 

 

-

 

 

 

-

 

 

 

31,291

 

 

 

-

 

 

 

-

 

 

 

31,291

 

Net loss for the period

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(8,370,301 )

 

 

(82,887 )

 

 

(8,453,188 )

Balance, September 30, 2023

 

 

78,343,417

 

 

 

78,343

 

 

 

191,517,500

 

 

 

239,622

 

 

 

(193,878,257 )

 

 

(808,517 )

 

 

(2,851,309 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 
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VOLITIONRX LIMITED

Condensed Consolidated Statements of Cash Flows (Unaudited)

(Expressed in United States Dollars)

 

 

 

Nine Months Ended September 30,

 

 

 

2024

 

 

2023

 

 

 

$

 

 

$

 

Operating Activities

 

 

 

 

 

 

Net loss

 

 

(21,400,758 )

 

 

(26,877,374 )

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

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

817,542

 

 

 

855,947

 

Amortization of operating lease right-of-use assets

 

 

169,273

 

 

 

194,036

 

Loss on disposal of fixed assets

 

 

34,693

 

 

 

15,913

 

Stock-based compensation

 

 

942,805

 

 

 

1,823,811

 

Gain on change in fair value of warrant liability

 

 

(30,424 )

 

 

(249,845 )

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Prepaid expenses

 

 

(168,625 )

 

 

(2,402 )

Accounts receivable

 

 

(69,992 )

 

 

(34,441 )

Other current assets

 

 

(24,064 )

 

 

(45,785 )

Deferred revenue, current and non-current

 

 

(106,600 )

 

 

-

 

Accounts payable and accrued liabilities

 

 

(416,167 )

 

 

12,128

 

Management and directors’ fees payable

 

 

(34,774 )

 

 

(11,137 )

Right-of-use assets operating leases liabilities

 

 

(174,758 )

 

 

(191,586 )

Net Cash Used In Operating Activities

 

 

(20,461,849 )

 

 

(24,510,735 )

Investing Activities

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(204,898 )

 

 

(775,027 )

Purchase of License

 

 

(171,095 )

 

 

-

 

Net Cash Used In Investing Activities

 

 

(375,993 )

 

 

(775,027 )

Financing Activities

 

 

 

 

 

 

 

 

Net proceeds from issuances of common stock

 

 

6,565,422

 

 

 

25,795,654

 

Tax withholdings paid related to stock-based compensation

 

 

(57,127 )

 

 

(80,231 )

Common stock repurchased

 

 

-

 

 

 

(31,772 )

Proceeds from grants repayable

 

 

-

 

 

 

27,052

 

Proceeds from long-term debt

 

 

754,457

 

 

 

216,908

 

Payments on long-term debt

 

 

(831,542 )

 

 

(680,325 )

Payments on grants repayable

 

 

(28,213 )

 

 

-

 

Payments on finance lease obligations

 

 

(35,621 )

 

 

(35,071 )

Net Cash Provided By Financing Activities

 

 

6,367,376

 

 

 

25,212,215

 

Effect of foreign exchange on cash

 

 

(845,371 )

 

 

15,244

 

Net change in cash and cash equivalents

 

 

(15,315,837 )

 

 

(58,303 )

Cash and cash equivalents – beginning of the period

 

 

20,729,983

 

 

 

10,867,050

 

Cash and cash equivalents – End of Period

 

 

5,414,146

 

 

 

10,808,747

 

 

 

 

 

 

 

 

 

 

Supplemental Disclosures of Cash Flow Information

 

 

 

 

 

 

 

 

Interest paid

 

 

247,871

 

 

 

163,623

 

Non-Cash Financing Activities

 

 

 

 

 

 

 

 

Common stock issued upon cashless exercises of stock options and settlement of vested RSUs

 

 

578

 

 

 

308

 

Offering costs from issuance of common stock

 

 

245,107

 

 

 

239,772

 

Fair value of warrants issued in connection with public offering

 

 

-

 

 

 

366,960

 

Common stock issued for License rights

 

 

125,258

 

 

 

-

 

Non-cash note payable

 

 

294,603

 

 

 

356,258

 

 

 

 

 

 

 

 

 

 

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

 

 
9

Table of Contents

  

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 and use of estimates

 

The accompanying unaudited condensed consolidated financial statements of VolitionRx Limited (the “Company” or “VolitionRx”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q of Regulation S-X. They do not include all the information and footnotes required by GAAP for complete financial statements. The December 31, 2023 consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP. However, except as disclosed herein, there has been no material change in the information disclosed in the notes to the audited consolidated financial statements and accompanying notes thereto for the year ended December 31, 2023 included in the Company’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission on March 25, 2024 (the “Annual Report”). The interim unaudited condensed consolidated financial statements should be read in conjunction with those audited consolidated financial statements included in the Annual Report. In the opinion of management, all adjustments considered necessary for a fair presentation of the financial statements, consisting solely of normal recurring adjustments, have been made. Operating results for the nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

 

The preparation of the Company's Condensed Consolidated Financial Statements requires management to make certain estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported and reported amounts of revenues and expenses. Such estimates include impairment of long-lived assets, accounts receivable, useful lives of intangible assets and property and equipment, fair values of stock-based awards, income taxes among others. These estimates and assumptions are based on management’s judgment. Estimates and underlying assumptions are reviewed on an ongoing basis. Changes in accounting estimates may be necessary if there are changes in the circumstances or experiences on which the estimate was based or as a result of new information. Changes in estimates, including those resulting from changes in the economic environment, are reflected in the period in which the change in estimate occurs.

 

Reclassifications

 

Certain reclassifications within operating expenses have been made to the prior period’s financial statements to conform to the current period financial statement presentation. There is no impact in total to the results of operations and cash flows in all periods presented.

 

Recently Issued Accounting Pronouncements

 

In November 2023, the Financial Accounting Standards Board (the “FASB” issued Accounting Standards Update (“ASU”) 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which requires a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and to provide in interim periods all disclosures about reportable segment’s profit or loss and assets that are currently required annually. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. These amendments are to be applied retrospectively. The Company is currently evaluating the impact this standard will have on its annual and interim consolidated financial statements.

 

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which enhances the transparency and decision usefulness of income tax disclosures by requiring: (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. These amendments are to be applied prospectively, with retrospective application permitted. The Company is currently evaluating the impact this standard will have on its annual and interim consolidated financial statements.

 

The Company currently believes there are no other issued and not yet effective accounting standards that are materially relevant to its condensed consolidated financial statements.

 

 
10

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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)

 

Fair Value Measurements

 

Pursuant to ASC 820, “Fair Value Measurements and Disclosures,” an entity is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:

 

Level 1

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

 

Level 2

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the assets or liabilities such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

 

Level 3

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

 

The financial instruments of the Company consist primarily of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, debt, and a warrant liability. These items are considered Level 1 due to their short-term nature and their market interest rates, except for the warrant liability, which is considered Level 2 and is recorded at fair value at the end of each reporting period.

 

Included in the following table are the Company’s major categories of assets and liabilities measured at fair value on a recurring basis as of September 30, 2024.

 

Fair Value Measurements at September 30, 2024

Description

Level 1

Level 2

Level 3

Total

$

$

$

$

Liabilities

Warrant liability

- 96,225 - 96,225

 

As of December 31, 2023, the warrant liability was $126,649. The following table provides a roll-forward of the warrant liability measured at fair value on a recurring basis for the nine months ended September 30, 2024.

 

Warrant Liability

Total

$

Balance at December 31, 2023

126,649

Gain on change in fair value of warrant liability

(30,424 )

Balance at September 30, 2024

96,225

  

Basic and Diluted Net Loss Per Share

 

The Company computes net loss per share in accordance with ASC 260, “Earnings Per Share,” which requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the statement of 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 September 30, 2024, 38,147,734 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.

 

 
11

Table of Contents

 

VOLITIONRX LIMITED

Notes to the Condensed Consolidated Financial Statements (Unaudited)

($ expressed in United States Dollars)

 

Note 2 – Liquidity and Going Concern Assessment

 

The Company's condensed consolidated financial statements are prepared using GAAP applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. Management assesses liquidity and going concern uncertainty in the Company’s consolidated financial statements to determine whether there is sufficient cash on hand and working capital, including available borrowings on loans, to operate for a period of at least one year from the date the financial statements are issued, which is referred to as the “look-forward period,” as defined in GAAP. As part of this assessment, based on conditions that are known and reasonably knowable to management, management considered various scenarios, forecasts, projections, estimates and made certain key assumptions, including the timing and nature of projected cash expenditures or programs, its ability to delay or curtail expenditures or programs and its ability to raise additional capital, if necessary, among other factors.

 

For the nine months ended September 30, 2024, the Company incurred a net loss of $21.4 million and used cash flows in operating activities of $20.5 million. As of September 30, 2024, the Company had cash and cash equivalents of $5.4 million and an accumulated deficit of $223.8 million.

 

The Company has generated operating losses and has experienced negative cash flows from operations since inception. The Company has not generated significant revenues and expects to incur further losses in the future, particularly from continued development of its clinical-stage diagnostic tests and commercialization activities. The future of the Company as an operating business will depend on its ability to obtain sufficient capital contributions or, financing, and/or generate revenues as may be required to sustain its operations. Management plans to address the above as needed by, (a) granting licenses and/or distribution rights to third parties in exchange for specified up-front and/or back-end payments, (b) obtaining additional financing through debt or equity transactions, (c) securing additional grant funds, and (d) developing and commercializing its products in an efficient manner. Management continues to exercise tight cost controls to conserve cash. As part of the Company’s cash conservation efforts, directors and certain employees have elected to exchange a portion of their fees earned or paid in cash or salary, respectively, for RSUs in the Company for a period of up to six months.

 

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 to eventually attain profitable operations.

 

Management assessed the mitigating effect of these plans to determine if it is probable that the plans would be effectively implemented within one year after the condensed consolidated financial statements are issued and when implemented, would mitigate the relevant conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern. These plans are subject to market conditions and reliance on third parties, and there is no assurance that effective implementation of the Company’s plans will result in the necessary funding to continue current operations and satisfy current and expected debt obligations. The Company has implemented short-term cash preservation and cost-saving initiatives to conserve cash. The Company concluded that these plans do not alleviate the substantial doubt about the Company’s ability to continue as a going concern beyond one year from the date the condensed consolidated financial statements are issued.

 

The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of assets and their carrying amounts, or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

 

 
12

Table of Contents

 

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 consisted of the following amounts as of September 30, 2024 and December 31, 2023:

 

September 30, 2024

December 31, 2023

Useful Life

Cost $

Cost $

Computer hardware and software

3 years

751,488 724,534

Laboratory equipment

5 years

4,847,622 4,753,253

Office furniture and equipment

5 years

382,970 378,800

Buildings

30 years

2,132,927 2,113,031

Building improvements

5-15 years

1,690,268 1,610,016

Land

Not amortized

133,715 132,468

Total property and equipment

9,938,990 9,712,102

Less accumulated depreciation

5,030,842 4,189,089

Total property and equipment, net

4,908,148 5,523,013

 

During the nine-month periods ended September 30, 2024 and September 30, 2023, the Company recognized $815,824 and $792,232, respectively, in depreciation expense.

 

 
13

Table of Contents

 

VOLITIONRX LIMITED

Notes to the Condensed Consolidated Financial Statements (Unaudited)

($ expressed in United States Dollars)

 

Note 4 - Intangible Assets

 

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

 

September 30, 2024

December 31, 2023

Cost $

Cost $

Patents

1,148,969 1,130,936

Licenses

296,353 -

Total Patents and Licenses

1,445,322 1,130,936

Less accumulated amortization

1,110,013 1,107,050

Total patents and Licenses, net

335,309 23,886

 

During the nine-month periods ended September 30, 2024 and September 30, 2023, the Company recognized $(6,742) and $63,715, respectively, in amortization expense.

 

The Company amortizes the patents and licenses 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:

 

2024

$ 5,187

2025

$ 20,748

2026

$ 20,748

2027

$ 20,748

2028

$ 20,748

Greater than 5 years

$ 247,130

Total Intangible Assets

$ 335,309

 

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, “Property, Plant and Equipment,” as of December 31, 2023. The result of this review confirmed that the ongoing value of the patents was not impaired as of December 31, 2023.

 

Note 5 - Related-Party Transactions

 

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

 

 
14

Table of Contents

 

VOLITIONRX LIMITED

Notes to the Condensed Consolidated Financial Statements (Unaudited)

($ expressed in United States Dollars)

 

Note 6 - Common Stock

 

As of September 30, 2024, the Company was authorized to issue 175 million shares of common stock, par value $0.001 per share, of which 92,392,570 and 81,898,321 shares were issued and outstanding as of September 30, 2024 and December 31, 2023, respectively.

 

Stock Option Exercises

 

During the nine months ended September 30, 2024, no shares of common stock were issued pursuant to the exercise of stock options.

 

Stock Options Expired / Cancelled

 

On April 16, 2024, 36,821 vested stock options previously granted to an employee were cancelled and returned as authorized shares under the 2015 Stock Incentive Plan (the “2015 Plan”) on the expiration of the exercise period following the resignation of such employee.

 

RSU Settlements

 

Below is a table summarizing the RSUs that vested and settled during the nine months ended September 30, 2024, all of which were issued pursuant to the 2015 Plan.

 

Equity Incentive Plan

RSUs Vested (#)

Vest Date

Shares Issued (#)

Shares Withheld for Taxes (#)

2015

21,582

Feb 8, 2024

21,582 -

2015

9,000

Mar 1, 2024

6,057 2,943

2015

44,217

Mar 27, 2024

40,530 3,687

2015

51,000

Apr 4, 2024

32,337 18,663

2015

50,000

May 1, 2024

34,496 15,504

2015

11,500

Jun 1, 2024

6,670 4,830

2015

14,962

Jun 15, 2024

11,684 3,278

2015

4,667

Jul 13, 2024

3,165 1,502

2015

29,000

Aug 15, 2024

21,291 7,709

2015

2,000

Sep 11, 2024

2,000 -

2015

2,500

Sep 21, 2024

2,500 -

2015

332,775

Sep 28, 2024

265,300 67,475
573,203 447,612 125,591

 

 
15

Table of Contents

 

VOLITIONRX LIMITED

Notes to the Condensed Consolidated Financial Statements (Unaudited)

($ expressed in United States Dollars)

 

Note 6 - Common Stock (continued)

 

2023 Equity Capital Raise

 

In connection with the June 2023 underwritten public offering of the Company’s common stock under the Company’s Registration Statement on Form S-3 (File No. 333-259783) effective November 8, 2021 (the “2021 Form S-3”), and pursuant to the underwriting agreement with Prime Executions, Inc, doing business as Freedom Capital Markets (“Freedom”), dated June 1, 2023, (the “2023” Equity Capital Raise”) the Company issued as compensation to Freedom warrants to purchase an aggregate of 448,500 shares of Company common stock at an exercise price of $2.00 per share. The Company evaluated the warrants as either equity-classified or liability-classified instruments based on an assessment of the specific terms of the warrants and applicable authoritative guidance in ASC 480 and ASC 815-40. The Company determined the warrants issued to Freedom failed the indexation guidance under ASC 815-40, specifically, the warrants provide for a Black-Scholes value calculation in the event of certain transactions, which includes a floor on volatility utilized in the value calculation at 100% or greater. The Company has determined that this provision introduces leverage to the holders of the warrants that could result in a value that would be greater than the settlement amount of a fixed-for-fixed option on the Company’s own equity shares. Accordingly, pursuant to ASC 815-40, the Company has classified the fair value of the warrants as a liability upon issuance and marked to market each reporting period in the Company’s consolidated statement of operations until their exercise or expiration.

 

The fair value of the warrants issued in the 2023 Equity Capital Raise as of September 30, 2024, and December 31, 2023, were $96,225 and $126,649 respectively. The warrant liability was estimated using the Black-Scholes pricing model with the following assumptions.

 

September 30, 2024

December 31, 2023

Risk-free interest rate

3.58 % 3.89 %

Expected volatility

84.85 % 76.30 %

Expected life (years)

3.69 4.44

Expected dividend yield

- -

Total fair value

$ 96,225 $ 126,649

 

The fair value of the warrants issued in the 2023 Equity Capital Raise was deemed to be a liability, due to certain contingent put features, and was determined using the Black-Scholes option pricing model, which was deemed to be an appropriate model due to the terms of the warrants issued, including a fixed term and exercise price.

 

 
16

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VOLITIONRX LIMITED

Notes to the Condensed Consolidated Financial Statements (Unaudited)

($ expressed in United States Dollars)

 

Note 6 - Common Stock (continued)

 

2024 Equity Capital Raise

 

On August 8, 2024, the Company entered into a securities purchase agreement with a purchaser pursuant to which the Company issued and sold to such purchaser, in a registered direct offering under the 2021 Form S-3 (the “2024 Equity Capital Raise”), an aggregate of 9,170,000 shares of the Company’s common stock, pre-funded warrants to purchase up to 3,557,273 shares of the Company’s common stock (the “Pre-Funded Warrants”), Series A common stock warrants to purchase up to 12,727,273 shares of the Company’s common stock (the “Series A Warrants”) and Series B common stock warrants to purchase up to 12,727,273 shares of the Company’s common stock (the “Series B Warrants” and, together with the Series A Warrants, the “Common Warrants” and, together with the shares of common stock offered in the 2024 Equity Capital Raise and the Pre-Funded Warrants, the “Securities”). The exercise prices of the Pre-Funded Warrants and the Common Warrants is $0.001 per share and $0.57 per share, respectively. H.C. Wainwright & Co. acted as the exclusive placement agent for the Company in the offering. The combined offering price for a share of common stock and accompanying Common Warrants was $0.55 and the combined offering price for a Pre-Funded Warrant and accompanying Common Warrants was $0.549. The net proceeds received by the Company for the issuance and sale of the Securities was $6.4 million, before deducting offering expenses of $0.1 million paid by the Company. In addition, the Company issued warrants to the placement agent to purchase an aggregate of 381,818 shares of Company common stock on substantially the same terms as the Series B Warrants at an exercise price of $0.6875 per share. The net proceeds above assumes the exercise of the Pre-Funded Warrants but excludes any proceeds arising from the exercise of the Common Warrants or the placement agent warrants.

 

Common Stock Issued for EpiCypher License Agreement

 

On March 12, 2024, the Company issued 129,132 shares of restricted common stock to EpiCypher, Inc. at a price of $0.97 per share as partial consideration for license rights in connection with a License Agreement between EpiCypher and Belgian Volition.

 

Equity Distribution Agreement

 

On May 20, 2022, the Company entered into an equity distribution agreement (the “2022 EDA”) with Jefferies LLC (“Jefferies”) to sell shares of the Company’s common stock, with an aggregate offering price of up to $25.0 million, from time to time through an “at the market” offering pursuant to the Company’s Registration Statement on Form S-3 (File No. 333-259783) effective November 8, 2021 (the “2021 Form S-3”) through Jefferies acting as the Company’s agent and/or principal. The Company is not obligated to sell any shares under the 2022 EDA.

 

During the nine months ended September 30, 2024, the Company raised aggregate net proceeds (net of broker commissions and fees) of approximately $605,221 under the 2022 EDA through the sale of 747,505 shares of its common stock. As of September 30, 2024, the Company has raised aggregate net proceeds (net of broker commissions and fees) of approximately $2.1 million under the 2022 EDA through the sale of 1,378,037 shares of its common stock.

 

 
17

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VOLITIONRX LIMITED

Notes to the Condensed Consolidated Financial Statements (Unaudited)

($ expressed in United States Dollars)

 

Note 7 – Stock-Based Compensation

 

a) (i) Common Stock Warrants

 

The following table summarizes the changes in common stock warrants of the Company outstanding during the nine-month period ended September 30, 2024.

 

Number of Warrants

Weighted Average Exercise Price ($)

Outstanding at December 31, 2023

862,500 3.050

Granted

3,557,273 0.001

Expired/Cancelled

- -

Outstanding at September 30, 2024

4,419,773 0.597

Exercisable at September 30, 2024

4,419,773 0.597

 

Below is a table summarizing the common stock warrants issued and outstanding as of September 30, 2024, which have an aggregate weighted average remaining contractual life of 0.60 years. The proceeds if exercised assume the warrants are exercised for cash.

 

Number Outstanding

Number Exercisable

Exercise Price ($)

Weighted Average Remaining Contractual Life (Years)

Proceeds to

Company if Exercised ($)

3,557,273

3,557,273 0.001 - 3,557

448,500

448,500 2.000 3.71 897,000

54,000

54,000 3.050 4.01 164,700

50,000

50,000 3.450 1.42 172,500

125,000

125,000 3.950 2.25 493,750

185,000

185,000 4.900 2.34 906,500

4,419,773

4,419,773 2,638,007

 

Stock-based compensation expense related to warrants of $5,238 and $25,447 was recorded in the nine months ended September 30, 2024 and September 30, 2023, respectively. Total remaining unrecognized compensation cost related to non-vested warrants is $nil. As of September 30, 2024, the total intrinsic value of warrants outstanding was $nil.

 

 
18

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VOLITIONRX LIMITED

Notes to the Condensed Consolidated Financial Statements (Unaudited)

($ expressed in United States Dollars)

 

Note 7 – Stock-Based Compensation (continued)

 

a) (ii) Warrants – Series A and Series B Common Stock Warrants

 

The following table summarizes the changes in Series A and Series B common stock warrants of the Company outstanding during the nine-month period ended September 30, 2024.

 

Number of Warrants

Weighted Average Exercise Price ($)

Outstanding at December 31, 2023

- -

Granted

25,836,364 0.57

Exercised

- -

Expired/Cancelled

- -

Outstanding at September 30, 2024

25,836,364 0.57

Exercisable at September 30, 2024

- -

 

Below is a table summarizing the Series A and Series B common stock warrants issued and outstanding as of September 30, 2024, which have a maximum aggregate weighted average remaining contractual life of 3.88 years (assuming that certain Company milestones set forth in the warrants are not achieved). The proceeds if exercised as reflected in the table below assume the warrants are exercised for cash.

 

Description

Number

Outstanding

Number

Exercisable

Exercise

Price ($)

Weighted Average Remaining Contractual Life (Years)

Proceeds to Company if Exercised ($)

Investor A Warrants

12,727,273 - 0.5700 2.36 7,254,546

Investor B Warrants

12,727,273 - 0.5700 5.36 7,254,546

Placement Agent Series B Warrants

381,818 - 0.6875 4.86 262,500
25,836,364 - 14,771,591

 

b) Options

 

The following table summarizes the changes in options outstanding of the Company during the nine-month period ended September 30, 2024.

 

 

 

Number

of Options

 

 

Weighted

Average

Exercise

Price ($)

 

Outstanding at December 31, 2023

 

 

4,699,569

 

 

 

3.87

 

Expired/Cancelled

 

 

(36,821 )

 

 

3.40

 

Outstanding at September 30, 2024

 

 

4,662,748

 

 

 

3.88

 

 

 

 

 

 

 

 

 

 

Exercisable at September 30, 2024

 

 

4,662,748

 

 

 

3.88

 

 

 
19

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VOLITIONRX LIMITED

Notes to the Condensed Consolidated Financial Statements (Unaudited)

($ expressed in United States Dollars)

 

Note 7 – Stock-Based Compensation (continued)

 

b) Options (continued)

 

Below is a table summarizing the options issued and outstanding as of September 30, 2024, all of which were issued pursuant to the Company’s 2011 Equity Incentive Plan (for option issuances prior to 2016) or the 2015 Plan (for option and RSU issuances commencing in 2016)and which have an aggregate weighted average remaining contractual life of 3.46 years. As of September 30, 2024, an aggregate of 9,700,000 shares of common stock were authorized for issuance under the 2015 Plan, of which 603,502 shares of common stock remained available for future issuance thereunder. At the Annual Meeting on July 2, 2024, the stockholders approved and adopted the Company’s 2024 Stock Incentive Plan (the “2024 Plan”) which authorizes up to 7,500,000 shares of common stock for issuance pursuant to awards granted under the 2024 Plan. The 2024 Plan had previously been approved by the Board of Directors of the Company on April 24, 2024. As of September 30, 2024, no shares of common stock have been granted under the 2024 Plan.

 

Number

Outstanding

 

 

Number

Exercisable

 

 

Exercise

Price ($)

 

 

Weighted Average Remaining

Contractual Life (Years)

 

 

Proceeds to

Company if Exercised ($)

 

 

585,000

 

 

 

585,000

 

 

 

3.25

 

 

 

0.36

 

 

 

1,901,250

 

 

944,748

 

 

 

944,748

 

 

 

3.40

 

 

 

6.84

 

 

 

3,212,143

 

 

740,000

 

 

 

740,000

 

 

 

3.60

 

 

 

5.61

 

 

 

2,664,000

 

 

1,607,837

 

 

 

1,607,837

 

 

 

4.00

 

 

 

1.98

 

 

 

6,431,348

 

 

89,163

 

 

 

89,163

 

 

 

4.38

 

 

 

3.32

 

 

 

390,534

 

 

50,000

 

 

 

50,000

 

 

 

4.80

 

 

 

2.25

 

 

 

240,000

 

 

646,000

 

 

 

646,000

 

 

 

5.00

 

 

 

2.49

 

 

 

3,230,000

 

 

4,662,748

 

 

 

4,662,748

 

 

 

 

 

 

 

 

 

 

 

18,069,275

 

 

Stock-based compensation expense related to stock options of $nil and $287,013 was recorded in the nine months ended September 30, 2024 and September 30, 2023, respectively. Total remaining unrecognized compensation cost related to non-vested stock options is $nil. As of September 30, 2024, the total intrinsic value of stock options outstanding was $nil.

 

c) Restricted Stock Units

 

Below is a table summarizing the RSUs issued and outstanding as of September 30, 2024, all of which were issued pursuant to the 2015 Plan.

 

 

 

RSUs (#)

 

 

Weighted Average Grant Date Fair Value Share Price ($)

 

Outstanding at December 31, 2023

 

 

3,634,952

 

 

 

1.01

 

Granted

 

 

844,313

 

 

 

0.71

 

Vested/Settled

 

 

(573,203 )

 

 

1.40

 

Cancelled / Forfeited

 

 

(677,213 )

 

 

0.83

 

Outstanding at September 30, 2024

 

 

3,228,849

 

 

 

0.90

 

 

 
20

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VOLITIONRX LIMITED

Notes to the Condensed Consolidated Financial Statements (Unaudited)

($ expressed in United States Dollars)

 

Note 7 – Stock-Based Compensation (continued)

 

c) Restricted Stock Units (continued)

 

Below is a table summarizing the RSUs granted during the nine months ended September 30, 2024, all of which were issued pursuant to the 2015 Plan. The RSUs vest equally over periods stated on the dates noted, subject to the recipient’s continued service to the Company, and will result in the RSU compensation expense stated. On June 1, 2024, the Company granted 297,340 RSUs of common stock to certain directors and employees in exchange for their election to reduce their cash compensation for a period of three months for services provided to the Company. These RSUs will vest on May 1, 2025, subject to continued service by the recipient. On July 1, 2024, the Company granted 38,198 RSUs of common stock to an employee in exchange for the employee’s election to reduce their cash compensation for a period of three months for services provided to the Company. These RSUs will vest on June 1, 2025, subject to continued service by the recipient. On July 8, 2024, the Company granted 21,583 RSUs of common stock to a consultant in exchange for advisory services. These RSUs will vest on January 1, 2025, subject to continued service to the Company by the recipient. On September 1, 2024, the Company granted 343,192 RSUs of common stock to certain directors and employees in exchange for their election to reduce their cash compensation for a period of three months for services provided to the Company. These RSUs will vest on June 1, 2025, subject to continued service by the recipient. On September 30, 2024, the Company granted 15,000 RSUs to a non-employee director, vesting in three equal installments on the first, second and third anniversaries of the date of grant, subject to continued services by the recipient.

 

Equity Incentive Plan

RSUs Granted (#)

Grant Date

Vesting Period

First Vesting Date

Second Vesting Date

Third Vesting Date

RSU Expense ($)

2015

14,000

Feb 22, 2024

36 Months

Feb 22, 2025

Feb 22, 2026

Feb 22, 2027

13,589

2015

115,000

May 23, 2024

36 Months

May 23, 2025

May 23, 2026

May 23, 2027

85,389

2015

297,340

Jun 1, 2024

11 Months

May 1, 2025

N/A

N/A

209,832

2015

38,198

Jul 1, 2024

11 Months

Jun 1, 2025

N/A

N/A

23,645

2015

21,583

Jul 8, 2024

6 Months

Jan 1, 2025

N/A

N/A

13,209

2015

343,192

Sep 1, 2024

9 Months

Jun 1, 2025

N/A

N/A

247,098

2015

15,000

Sep 30, 2024

36 Months

Sep 30, 2025

Sep 30, 2026

Sep 30, 2027

9,015

844,313

601,777

 

 
21

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VOLITIONRX LIMITED

Notes to the Condensed Consolidated Financial Statements (Unaudited)

($ expressed in United States Dollars)

 

Note 7 – Stock-Based Compensation (continued)

 

c) Restricted Stock Units (continued)

 

Below is a table summarizing the RSUs vested and settled during the nine months ended September 30, 2024, all of which were issued pursuant to the 2015 Plan.

 

Equity Incentive Plan

 

RSUs Vested (#)

 

 

Vest Date

 

Shares Issued (#)

 

 

Shares Withheld for Taxes (#)

 

2015

 

 

21,582

 

 

Feb 8, 2024

 

 

21,582

 

 

 

-

 

2015

 

 

9,000

 

 

Mar 1, 2024

 

 

6,057

 

 

 

2,943

 

2015

 

 

44,217

 

 

Mar 27, 2024

 

 

40,530

 

 

 

3,687

 

2015

 

 

51,000

 

 

Apr 4, 2024

 

 

32,337

 

 

 

18,663

 

2015

 

 

50,000

 

 

May 1, 2024

 

 

34,496

 

 

 

15,504

 

2015

 

 

11,500

 

 

Jun 1, 2024

 

 

6,670

 

 

 

4,830

 

2015

 

 

14,962

 

 

Jun 15, 2024

 

 

11,684

 

 

 

3,278

 

2015

 

 

4,667

 

 

Jul 13, 2024

 

 

3,165

 

 

 

1,502

 

2015

 

 

29,000

 

 

Aug 15, 2024

 

 

21,291

 

 

 

7,709

 

2015

 

 

2,000

 

 

Sep 11, 2024

 

 

2,000

 

 

 

-

 

2015

 

 

2,500

 

 

Sep 21, 2024

 

 

2,500

 

 

 

-

 

2015

 

 

332,775

 

 

Sep 28, 2024

 

 

265,300

 

 

 

67,475

 

 

 

 

573,203

 

 

 

 

 

447,612

 

 

 

125,591

 

 

 
22

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VOLITIONRX LIMITED

Notes to the Condensed Consolidated Financial Statements (Unaudited)

($ expressed in United States Dollars)

 

Note 7 – Stock-Based Compensation (continued)

 

c) Restricted Stock Units (continued)

 

Below is a table summarizing the RSUs cancelled during the nine months ended September 30, 2024, all of which were originally issued pursuant to the 2015 Plan.

 

Equity Incentive Plan

 

RSUs (#)

 

 

Cancellation Date

 

Vesting Date

 

RSUs Cancelled (#)

 

2015

 

 

8,000

 

 

Jan 16, 2024

 

Sep 28, 2024

 

 

8,000

 

2015

 

 

6,000

 

 

Jan 16, 2024

 

Oct 4, 2024

 

 

6,000

 

2015

 

 

8,000

 

 

Jan 16, 2024

 

Sep 28, 2025

 

 

8,000

 

2015

 

 

6,000

 

 

Jan 16, 2024

 

Oct 4, 2025

 

 

6,000

 

2015

 

 

8,000

 

 

Jan 16, 2024

 

Sep 28, 2026

 

 

8,000

 

2015

 

 

667

 

 

Feb 9, 2024

 

Jun 15, 2024

 

 

667

 

2015

 

 

667

 

 

Feb 9, 2024

 

Jun 15, 2025

 

 

667

 

2015

 

 

666

 

 

Feb 9, 2024

 

Jun 15, 2026

 

 

666

 

2015

 

 

1,775

 

 

Mar 25, 2024

 

Mar 27, 2024

 

 

1,775

 

2015

 

 

2,098

 

 

Mar 25, 2024

 

Jun 15, 2024

 

 

2,098

 

2015

 

 

2,667

 

 

May 17, 2024

 

Oct 4, 2024

 

 

2,667

 

2015

 

 

2,666

 

 

May 17, 2024

 

Oct 4, 2025

 

 

2,666

 

2015

 

 

1,000

 

 

May 17, 2024

 

Mar 27, 2025

 

 

1,000

 

2015

 

 

1,000

 

 

May 17, 2024

 

Mar 27, 2026

 

 

1,000

 

2015

 

 

3,334

 

 

May 17, 2024

 

Sep 28, 2024

 

 

3,334

 

2015

 

 

3,333

 

 

May 17, 2024

 

Sep 28, 2025

 

 

3,333

 

2015

 

 

3,333

 

 

May 17, 2024

 

Sep 28, 2026

 

 

3,333

 

2015

 

 

9,334

 

 

May 31, 2024

 

Sep 11, 2024

 

 

9,334

 

2015

 

 

9,333

 

 

May 31, 2024

 

Sep 11, 2025

 

 

9,333

 

2015

 

 

9,333

 

 

May 31, 2024

 

Sep 11, 2026

 

 

9,333

 

2015

 

 

3,333

 

 

Jul 12, 2024

 

Oct 4, 2024

 

 

3,333

 

2015

 

 

3,333

 

 

Jul 12, 2024

 

Oct 4, 2025

 

 

3,333

 

2015