Commitments and Contingencies

9 Months Ended

Sep. 30, 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 September 30, 2024.

2024 - Remaining	$	14,983
2025	$	59,934
2026	$	59,934
2027	$	59,934
2028	$	59,933
Greater than 5 years	$	202,259
Total	$	456,977
Less: Amount representing interest	$	(40,812	)
Present value of minimum lease payments	$	416,165

b) Operating Lease Right-of-Use Obligations

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

	September 30, 2024			December 31, 2023
	$			$
Operating right-of-use assets		635,857			549,504
Operating lease liabilities, current portion		190,099			199,323
Operating lease liabilities, long term		350,810			378,054
Total operating lease liabilities		540,909			577,377
Weighted average remaining lease (months)		47			33
Weighted average discount rate		3.70	%		3.02	%

During the nine months ended September 30, 2024, cash paid for amounts included for the measurement of lease liabilities was $185,692 and the Company recorded operating lease expense of $167,465.

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

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 September 30, 2024.

For the Nine Months Ending September 30, 2024	Amount
	$
2024 - Remaining		61,552
2025		241,924
2026		225,368
2027		144,593
2028		44,059
Total		717,496
Less: imputed interest		(50,391	)
Total Operating Lease Liabilities		667,105

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, 2024, the Company recognized $45,161 in short-term lease costs associated with office space leases. The annual payments remaining for short-term office leases were as follows:

For the Nine Months Ending September 30, 2024	Amount
	$
2024 - Remaining		27,481
2025		12,373
Total Operating Lease Liabilities		39,854

c) Grants Repayable

As of September 30, 2024, the total grant balance repayable was $454,544 and the payments remaining were as follows:

For the Nine Months Ending September 30, 2024	Amount
	$
2024 - Remaining		27,857
2025		37,789
2026		45,545
2027		50,564
2028		54,073
Greater than 5 years		238,716
Total Grants Repayable		454,544

d) Long-Term Debt

As of September 30, 2024, the total balance for long-term debt payable was $4,802,971 and the payments remaining were as follows:

For the Nine Months Ending September 30, 2024	Amount
	$
2024 - Remaining		551,774
2025		1,046,366
2026		813,844
2027		607,484
2028		2,536,778
Greater than 5 years		326,851
Total		5,883,097
Less: amount representing interest		(1,080,126	)
Total Long-Term Debt		4,802,971

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 September 30, 2024, $510,000 is still to be paid by the Company under this agreement. As of September 30, 2024, $510,000 is due 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 $327,092. As of September 30, 2024, $327,092 is still to be paid by the Company under this agreement. As of September 30, 2024, $138,971 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 September 30, 2024, $81,447 is still to be paid by the Company under this agreement and as of September 30, 2024, $26,142 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 Nu.Q^® H3.1 nucleosome levels in adult patients with sepsis to facilitate early diagnosis and prognostication for a cost to the Company of $217,464. As of September 30, 2024, $217,464 is still to be paid by the Company under this agreement. As of September 30, 2024, $0 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 the Nu.Q^® H3.1 nucleosomes as diagnostic, prognostic and phenotyping biomarkers in sepsis for a cost to the Company of $96,260. As of September 30, 2024, $96,260 is still to be paid by the Company under this agreement. As of September 30, 2024, $48,106 is due by the Company under this agreement.

e) Collaborative Agreement Obligations (continued)

As of September 30, 2024, the total amount to be paid for future research and collaboration commitments was $1,232,263 and the payments remaining were as follows:

	Total Amount Remaining		2024 - Remaining		2025
	$		$		$
National University of Taiwan		510,000		510,000		-
MD Anderson Cancer Center		327,092		163,546		163,546
Guys and St Thomas		217,464		65,239		152,225
Xenetic Biosciences		81,447		26,142		55,305
UMC		96,260		48,058		48,202
Total Collaborative Obligations		1,232,263		812,985		419,278

f) Other Commitments

Volition Germany

As of September 30, 2024, $218 is payable under the royalty agreement with the founder of Volition’s former German subsidiary based on sales to date towards the Company’s aggregate minimum royalty obligation of $122,572.

Volition America

Effective February 10, 2024 the Company and Diagnostic Oncology CRO, LLC (“DXOCRO”) further amended and restated the August 2022 amended and restated Master Agreement by and between the Company and DXOCRO 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 September 30, 2024, $138,971 is payable under the Second A&R Master Agreement, and up to $0 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 September 30, 2024, the maximum has been drawn down under this agreement and the principal balance payable was $65,467. 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 September 30, 2024, the Company has recognized total compensation expense of $1,396,638 of which $527,940 is in relation to RSUs from grants in 2022 that vested in 2023, $513,394 is in relation to RSUs from such grants that will vest in 2024, and $355,304 is in relation to RSUs from such grants that will vest in 2025. The Company has unrecognized compensation expense of $168,518 in relation to such RSUs, based on the outcomes related to the prescribed performance targets on the outstanding awards.

Total		Vesting	Amortized		Amortized		Amortized		Un-Amortized
Award		Year	2024		2023		2022
$			$		$		$		$
	527,940	2023		-		393,853		134,087		-
	516,040	2024		188,187		260,119		65,088		2,646
	521,176	2025		131,034		177,584		46,686		165,872
	1,565,156			319,221		831,556		245,861		168,518

In September 2023, the Compensation Committee of the Board of Directors of the Company 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. Pursuant to the terms of the grants, 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 to the Company, 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 September 30, 2024, the Company has accrued compensation expense of $536,535 in relation to cash bonuses payable on the achievement of specified corporate goals based on the expected outcomes related to the prescribed performance targets. To the extent this is payable, this cash bonus compensation payment has currently been deferred indefinitely.

As of September 30, 2024, the Company had recognized total compensation expense of $447,008. The Company has unrecognized compensation expense of $270,104 in relation to the RSUs from grants in 2023, of which $0 is in relation to RSUs that will vest in 2024, $115,517 in relation to RSUs that will vest in 2025, and $154,587 in relation to RSUs that will vest in 2026 based on the outcomes related to the prescribed performance targets on the outstanding awards.

Total		Vesting	Amortized		Amortized		Un-Amortized
Award		Year	2024		2023		2024
$			$		$		$
	242,902	2024		148,132		94,770		-
	237,936	2025		74,906		47,513		115,517
	236,274	2026		49,984		31,703		154,587
	717,112			273,022		173,986		270,104