Commitments and Contingencies

3 Months Ended

Mar. 31, 2024

Commitments and Contingencies

Commitments And Contingencies

Note 8 – Commitments and Contingencies

a) Finance Lease Obligations

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 March 31, 2024.

For the Three Months Ending March 31, 2024	Amount
	$
2024 - remaining		43,610
2025		58,147
2026		58,148
2027		58,148
2028		58,147
Greater than 5 years		196,233
Total		472,433
Less: Amount representing interest		(44,891	)
Present value of minimum lease payments		427,542

b) Operating Lease Right-of-Use Obligations

Operating leases as of March 31, 2024, and December 31, 2023, consisted of the following:

	March 31, 2024			December 31, 2023
	$			$
Operating right-of-use assets		569,163			549,504
Operating lease liabilities, current portion		201,047			199,323
Operating lease liabilities, long term		396,376			378,054
Total operating lease liabilities		597,423			577,377
Weighted average remaining lease (months)		36			33
Weighted average discount rate		3.26	%		3.02	%

During the three months ended March 31, 2024, cash paid for amounts included for the measurement of lease liabilities was $65,166 and the Company recorded operating lease expense of $65,660.

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 March 31, 2024.

For the Three Months Ending March 31, 2024	Amount
	$
2024 - Remaining		177,094
2025		192,151
2026		165,104
2027		92,786
2028		10,295
Total		637,430
Less: imputed interest		(40,007	)
Total Operating Lease Liabilities		597,423

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 three months ended March 31, 2024, the Company recognized $29,961 in short-term lease costs associated with office space leases. The annual payments remaining for short-term office leases were as follows:

For the Three Months Ending March 31, 2024	Amount
	$
2024 - Remaining		78,085
2025		7,186
Total Operating Lease Liabilities		85,271

c) Grants Repayable

As of March 31, 2024, the total grant balance repayable was $468,668 and the payments remaining were as follows:

For the Three Months Ending March 31, 2024	Amount
	$
2024 - Remaining		54,700
2025		36,661
2026		44,187
2027		49,056
2028		52,461
Greater than 5 years		231,603
Total Grants Repayable		468,668

d) Long-Term Debt

As of March 31, 2024, the total balance for long-term debt payable was $4,522,512 and the payments remaining were as follows:

For the Three Months Ending March 31, 2024	Amount
	$
2024 - Remaining		1,212,648
2025		903,830
2026		678,239
2027		443,116
2028		1,879,108
Greater than 5 years		317,107
Total		5,434,048
Less: amount representing interest		(911,536	)
Total Long-Term Debt		4,522,512

e) Collaborative Agreement Obligations

In 2018, the Company entered into a research collaboration agreement with the University of Taiwan for a three-year research period for a cost to the Company of up to $2.55 million payable over such period. As of March 31, 2024, $510,000 is still to be paid by the Company under this agreement.

In 2022, the Company entered into a sponsored research agreement with The University of Texas MD Anderson Cancer Center to evaluate the role of neutrophil extracellular traps ("NETs") in cancer patients with sepsis for a cost to the Company of $449,406 which is still to be paid by the Company under this agreement. As of March 31, 2024, $449,406 is due by the Company under this agreement.

In August 2023, the Company entered into a project research agreement with Guy’s and St Thomas’ NHS Foundation Trust to evaluate the practical clinical utility of the NuQ^® H3.1 nucleosome levels in adult patients with sepsis to facilitate early diagnosis and prognostication for a cost to the Company of $163,966. As of March 31, 2024, $40,992 is still to be paid by the Company under this agreement. As of March 31, 2024, $40,992 is due by the Company under this agreement.

In July 2023, the Company entered into a research agreement with Xenetic Biosciences Inc and CLS Therapeutics Ltd to evaluate the anti-tumoral effects of Nu.Q^® CAR T cells for a cost to the Company of $107,589. As of March 31, 2024, $81,447 is still to be paid by the Company under this agreement and as of March 31, 2024, $26,142 is due by the Company under this agreement.

In January 2024, the Company entered into an agreement with the University Medical Centre Amsterdam (“UMC”). UMC will perform a retrospective study to evaluate the diagnostic potential of H3.1 nucleosomes as diagnostic, prognostic and phenotyping biomarkers in sepsis for a cost to the Company of $139,965. As of March 31, 2024, $139,965 is still to be paid by the Company under this agreement. As of March 31, 2024, $139,965 is due by the Company under this agreement. The project is expected to be completed by the end of 2024.

As of March 31, 2024, the total amount to be paid for future research and collaboration commitments was approximately $1,344,784 and the payments remaining were as follows:

	Total Amount Remaining		2024 - Remaining		2025
	$		$		$
National Universty of Taiwan		510,000		510,000		-
MD Anderson Cancer Center		449,406		285,860		163,546
Guys and St Thomas		163,966		163,966		-
Xentic Bioscience		81,447		81,447		-
UMC		139,965		139,965		-
Total Collaborative Obligations		1,344,784		1,181,238		163,546

f) Other Commitments

Volition Vet

On October 25, 2019, the Company entered into an agreement with TAMU for provision of in kind services of personnel, animal samples and laboratory equipment in exchange for a non-controlling interest of 7.5% in Volition Vet with an additional 5%, vesting in a year from the date of the agreement, giving TAMU in aggregate, a 12.5% equity interest as of such date. As of March 31, 2024, TAMU has a 12.5% equity interest in Volition Vet.

Volition Germany

As of March 31, 2024, $211 is payable under the royalty agreement with the founder of Volition Germany based on sales to date towards the Company’s aggregate minimum royalty obligation of $118,918.

Volition America

Effective February 10, 2024 the Company and Diagnostic Oncology CRO, LLC (“DXOCRO”) further amended and restated August 2022 amended and restated Master Agreement to expand the scope of DXOCRO’s consultant services provided thereunder (the “Second A&R Master Agreement”). The Second A&R Master Agreement requires DXOCRO to conduct a prospective optimization/range finding study of Volition’s Nu.Q^®  H3.1 in vitro diagnostic test proposed for use in sepsis. The study is an extension of the sepsis monitoring clinical trial that was previously covered under a separate exhibit. The Company anticipates DXOCRO’s additional services under this Agreement will be completed by the end of the third quarter of 2024 at a total additional cost to the Company of up to $0.7 million. The Company’s payment obligations accrue upon delivery of projects under the Agreement. The Company may terminate the Agreement or any project thereunder upon at least 30 days’ prior written notice. Unless earlier terminated, the Second A&R Master Agreement terminates on the later of December 31, 2025 or the date upon which all services have been completed. As of March 31, 2024, $130,883 is payable under the Second A&R Master Agreement, and up to $696,920 may be payable by the Company in future periods for services rendered.

VolitionRx

On February 5, 2024, the Company entered into a 9-month loan agreement with First Insurance Funding for a maximum of $294,603 with fixed interest rate of 8.42%, maturing in November 2024. As of March 31, 2024, the maximum has been drawn down under this agreement and the principal balance payable was $261,869. The agreement is in relation to the directors and officers insurance policy.

g) Legal Proceedings

In the ordinary course of business, the Company may be subject to claims, counter-claims, lawsuits and other litigation of the type that generally arise from the conduct of its business. The Company knows of no legal proceedings which the Company believes will have a material adverse effect on its financial position.

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

As of March 31, 2024, the Company has recognized total compensation expense of $1,184,860 of which $527,940 is in relation to RSUs from grants in 2022 that will vest in 2023, $388,561 is in relation to RSUs from such grants that will vest in 2024, and $268,359 is in relation to RSUs from such grants that will vest in 2025. The Company has unrecognized compensation expense of $392,093 in relation to such RSUs, based on the outcomes related to the prescribed performance targets on the outstanding awards.

Total		Amortized		Amortized		Amortized
Award	Vesting	2024		2023		2022		Un-Amortized
$	Year	$		$		$		$
527,940	2023		-		393,853		134,087		-
455,003	2024		63,355		260,119		65,088		129,796
486,567	2025		44,090		177,584		46,686		262,297
1,469,510			107,445		831,556		245,861		392,093

In September 2023, the Compensation Committee of the Board of Directors approved the granting of cash bonuses, payable upon achievement of various corporate goals focused around revenue, operations and regulatory, to various personnel including directors, executives, members of management, consultants and employees of the Company and/or its subsidiaries. Conditional upon the achievement by December 31, 2023 and June 30, 2024 of specified corporate goals as set forth in the minutes of the Compensation Committee, as well as continued service by the award recipients, the Company at the sole discretion of the Chief Executive Officer and the Chief Financial Officer would pay a cash bonus to such award recipients. As of March 31, 2024, the Company has accrued compensation expense of $536,535 in relation to the cash bonuses to be paid upon achievement of the specified corporate goals based on the expected outcomes related to the prescribed performance targets.

As of March 31, 2024, the Company had recognized total compensation expense of $335,437. The Company has unrecognized compensation expense of $746,063 in relation to the RSUs from grants in 2023, of which $177,800 is in relation to RSUs that will vest in 2024, $268,899 in relation to RSUs that will vest in 2025, and $299,364 in relation to RSUs that will vest in 2026 based on the outcomes related to the prescribed performance targets on the outstanding awards.

Total		Amortized		Amortized		Un-Amortized
Award	Vesting	2024		2023		2024
$	Year	$		$		$
272,570	2024		87,942		94,770		177,800
316,412	2025		44,090		47,513		268,899
331,067	2026		29,419		31,703		299,364
920,049			161,451		173,986		746,063