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Commitments and Contingencies | 12 Months Ended
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Dec. 31, 2022
Commitments and Contingencies |
Commitments And Contingencies | Note 10 - Commitments and Contingencies a) Finance Lease Obligations In 2016, the Company entered into a real estate capital lease with ING Asset Finance Belgium S.A. (“ING”) to purchase a property located in Belgium for €1.12 million, maturing May 2031, with implicit interest of 2.62%. As of December 31, 2022, the balance payable was $482,146. In 2018, the Company entered into a capital lease with BNP Paribas leasing solutions to purchase a freezer for the Belgium facility for €25,000, maturing January 2022, with implicit interest of 1.35%. The leased equipment is amortized on a straight-line basis over 5 years. As of December 31, 2022, the balance payable was $0. The following is a schedule showing the future minimum lease payments under financing leases by years and the present value of the minimum payments as of December 31, 2022.
2023 |  | $ | 57,726 |
2024 |  | $ | 57,725 |
2025 |  | $ | 57,725 |
2026 |  | $ | 57,726 |
2027 |  | $ | 57,726 |
Greater than 5 years |  | $ | 252,534 |
Total |  | $ | 541,162 |
Less: Amount representing interest |  | $ | (59,016 | )
Present value of minimum lease payments |  | $ | 482,146 |
b) Operating Lease Right-of-Use Liabilities As of December 31, 2022, operating lease right-of-use assets and liabilities arising from operating leases were $619,392 and $645,254, respectively. During the year ended December 31, 2022, cash paid for amounts included for the measurement of lease liabilities was $245,354 and the Company recorded operating lease expense of $267,434. Our weighted average discount rate is 2.38% and the weighted average remaining lease term is 25 months. 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 December 31, 2022.
2023 |  | $ | 264,799 |
2024 |  | $ | 164,225 |
2025 |  | $ | 120,209 |
2026 |  | $ | 94,600 |
2027 |  | $ | 25,800 |
Total Operating Lease Obligations |  | $ | 669,633 |
Less: Amount representing interest |  | $ | (24,379 | )
Present Value of minimum lease payments |  | $ | 645,254 |
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 year ended December 31, 2022, $76,955 was recognized in short-term lease costs associated with the office space leases in Singapore and Nevada. The annual payments remaining for such short-term office leases as of December 31, 2022, were as follows:
2023 |  | $ | 27,069 |
2024 - 2027 |  | $ | - |
Total Operating Lease Liabilities |  | $ | 27,069 |
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 €1,048,020. Per the terms of the agreement, €314,406 of the grant is to be repaid by installments over the period from June 30, 2014 to June 30, 2023. The Company has recorded the balance of €733,614 to other income in previous years as there is no obligation to repay this amount. 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 and the 6% royalty on revenue, is twice the amount of funding received. As of December 31, 2022, the grant balance repayable was $26,831. In 2018, the Company entered into an agreement with the Walloon Region government in Belgium for a colorectal cancer research grant for €605,000. Per the terms of the agreement, €181,500 of the grant is to be repaid by instalments 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 and the 3.53% royalty on revenue, is equal to the amount of funding received. As of December 31, 2022, the grant balance repayable was $107,280. In 2020, the Company entered into an agreement with the Walloon Region government in Belgium for a research grant for €495,000. Per the terms of the agreement, €148,500 of the grant is to be repaid by installments over 10 years commencing in 2023. In the event that the Company receives revenue from products or services as defined in the agreement, it is due to pay a 2.89% 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 €148,500 and the 2.89% royalty on revenue, is equal to the amount of funding received. As of December 31, 2022, the grant balance repayable was $97,799. In 2020, the Company entered into an agreement with the Walloon Region government in Belgium for a research grant for €929,433. Per the terms of the agreement, €278,830 of the grant is to be repaid by instalments over 15 years commencing in 2022. In the event that the Company receives revenue from products or services as defined in the agreement, it is due to pay a 4.34% 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 €278,830 and the 4.34% royalty on revenue, is equal to the amount of funding received. As of December 31, 2022, the grant balance repayable was $230,392. As of December 31, 2022, the balance repayable was $462,302 and the annual payments remaining were as follows:
2023 |  | $ | 49,283 |
2024 |  | $ | 26,541 |
2025 |  | $ | 34,581 |
2026 |  | $ | 42,026 |
2027 |  | $ | 45,978 |
Greater than 5 years |  | $ | 263,893 |
Total Grants Repayable |  | $ | 462,302 |
d) Long-Term Debt In 2016, the Company entered into a 7-year loan agreement with Namur Invest for €440,000 with a fixed interest rate of 4.85%, maturing December 2023. As of December 31, 2022, the principal balance payable was $82,659. In 2016, the Company entered into a 15-year loan agreement with ING for €270,000 with a fixed interest rate of 2.62%, maturing December 2031. As of December 31, 2022, the principal balance payable was $188,806. In 2017, the Company entered into a 7-year loan agreement with SOFINEX for up to €1 million with a fixed interest rate of 4.50%, maturing September 2024. As of December 31, 2022, €1 million has been drawn down under this agreement and the principal balance payable was $482,954. In 2018, the Company entered into a 4-year loan agreement with Namur Innovation and Growth for €500,000 with fixed interest rate of 4.00%, maturing June 2022. As of December 31, 2022, the principal balance payable was $0. In 2019, the Company entered into a 4-year loan agreement with Namur Innovation and Growth for €500,000 with fixed interest rate of 4.80%, maturing September 2024. As of December 31, 2022, the principal balance payable was $279,548. In 2020, the Company entered into a 10-year loan agreement with Namur Invest for a maximum of €830,000 with fixed interest rate of 4.00%, maturing March 2031. As of December 31, 2022, the amount that has been drawn down under this agreement was €707,599, representing a principal balance payable of $759,419. On November 23, 2021, the Company entered into a 3 ½ year loan agreement with SOFINEX for a maximum of €450,000 with fixed interest rate of 5.00%, maturing June 2025. As of December 31, 2022, the amount that has been drawn down under this agreement was €450,000, representing a principal balance payable of $442,708. On February 5, 2022 the Company entered into a 9-month loan agreement with First Insurance Funding for a maximum of $620,549 with fixed interest rate of 3.57%, maturing November 2022. As of December 31, 2022, the principal balance payable was $0. On August 16, 2022, the Company entered into a 4-year loan agreement with Namur Invest for a maximum of €1,000,000 with fixed interest rate of 6.00%, maturing July 2026. As of December 31, 2022, the amount that has been drawn down under this agreement was €1,000,000, representing a principal balance payable of $1,073,231. On November 18, 2022, the Company entered into a 4-year loan agreement with Namur Invest for a maximum of €500,000 with fixed interest rate of 5.45%, maturing December 2027. As of December 31, 2022, the amount that has been drawn down under this agreement was €500,000, representing a principal balance payable of $536,615. As of December 31, 2022, the total balance for long-term debt payable was $3,845,940 and the payments remaining were as follows:
2023 |  | $ | 1,268,528 |
2024 |  | $ | 1,138,227 |
2025 |  | $ | 704,312 |
2026 |  | $ | 480,358 |
2027 |  | $ | 281,602 |
Greater than 5 years |  | $ | 446,799 |
Total |  | $ | 4,319,826 |
Less: Amount representing interest |  | $ | (473,886 | )
Total Long-Term Debt |  | $ | 3,845,940 |
e) Collaborative Agreement Obligations 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 December 31, 2022, $510,000 is still to be paid by the Company under this agreement. In 2019, the Company entered into a funded sponsored research agreement with the Texas A&M University (“TAMU”) in consideration for the license granted to the Company for a 5-year period for a cost to the Company of up to $400,000 payable over such period. As of December 31, 2022, $0 is still to be paid by the Company under this agreement. In 2020, the Company entered into a research agreement for the bioinformatic analysis of cell-free DNA fragments from whole-genome sequencing with the Hebrew University of Jerusalem for six months for a cost to the Company of €54,879. Subsequently the parties entered into an amendment to the agreement with an additional cost to the Company of €100,236. In the year ended December 31, 2022, the parties entered into agreements for an additional cost to the Company of €39,000. As of December 31, 2022, $23,018 is still to be paid by the Company under the amended agreement. On August 2, 2022, the Company entered into a sponsored research agreement with The University of Texas MD Anderson Cancer Center to evaluate the role of neutrophil extracellular traps (“NETs”) in cancer patients with sepsis for a cost to the Company of $346,787. As of December 31, 2022, $346,787 is still to be paid by the Company under this agreement. As of December 31, 2022, the total amount to be paid for future research and collaboration commitments was approximately $879,805 and the annual payments remaining were as follows:
2023 |  | $ | 798,032 |
2024 - 2027 |  | $ | 81,773 |
Total Collaborative Agreement Obligations |  | $ | 879,805 |
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 December 31, 2022, TAMU has a 12.5 % 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”). In connection with the transaction agreement, the Company entered into a royalty agreement with the founder providing for the payment of royalties in the amount of 6% of net sales of Volition 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 five years post-closing. As of December 31, 2022, $210 is payable under the 6% royalty agreement on sales to date towards the Company’s aggregate minimum royalty obligation of $118,055. Volition America On November 3, 2020, the Company entered into a professional services master agreement (the “Master Agreement”) with Diagnostic Oncology CRO, LLC (“DXOCRO”) to conduct a pivotal clinical trial and provide regulatory submission and reimbursement related services. On August 8, 2022, the Company and DXOCRO amended and restated the Master Agreement to expand the scope of DXOCRO’s consultant services provided thereunder (the “A&R Master Agreement”). The A&R Master Agreement requires DXOCRO to support development and clinical validation studies for the Company’s Nu.Q® product portfolio in the United States, including by conducting large-scale finding studies across multiple sites in the U.S. using Nu.Q® NETs and Nu.Q® Cancer tests to determine clinical utility in sepsis and non-Hodgkin’s lymphoma. The Company anticipates DXOCRO’s services under the agreement will be completed by the end of the third quarter 2023 at a total cost to the Company of up to $4.2 million. The Company’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 A&R Master Agreement terminates on the later of December 31, 2025 or the date upon which all services have been completed. As of December 31, 2022, $ 264,692 is payable under the A&R Master Agreement, and up $3,435,165 may be payable by Company in future periods for services rendered. g) Legal Proceedings There are 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 In August 2021 and October 2021, the Compensation Committee of the Board of Directors approved the granting of equity-based awards under the 2015 Plan as well as cash bonuses, vesting upon achievement of certain corporate goals focused around product development and commercialization, to various personnel including directors, executives, members of management, consultants and employees of the Company and/or its subsidiaries. On June 23, 2022, the Compensation Committee of the Board of Directors approved the achievement of all of the remaining outstanding corporate goals related to the awards in August 2021 and October 2021 resulting in the payment of the cash bonus awards and the vesting of the remaining rights to the equity-based awards, which equity-based awards remain subject to time-based vesting in equal installments on each of August 3, 2022 and August 3, 2023 (with the exception of October 4, 2022 and October 4, 2023 for one award) and the continuous service of the award recipient through the applicable vesting date. As of December 31, 2022, the Company has paid compensation expense of $737,137 in relation to the July 1, 2022 specified corporate goals based on the actual outcomes related to the prescribed performance targets. In October 2022, the Compensation Committee of the Board of Directors approved the granting of cash bonuses, payable upon achievement of various corporate goals focused around product development, manufacturing, financing and commercialization, to various personnel including directors, executives, members of management, consultants and employees of the Company and/or its subsidiaries. Conditional upon the achievement by January 1, 2023 and July 1, 2023 of all specified corporate goals as set forth in the minutes of the Compensation Committee, as well as continued service by the award recipients, the Company at the sole discretion of the Chief Executive Officer and the Chief Financial Officer would pay a cash bonus to such award recipients. As of December 31, 2022, the Company has accrued compensation expense of $905,856 in relation to the January 1, 2023 and July 1, 2023 specified corporate goals based on the actual outcomes related to the prescribed performance targets. As discussed in detail in Note 8, - Stock-Based Compensation, an aggregate of 1,144,000 RSUs were issued under the 2015 Stock Incentive Plan in connection with the October 2022 grants and an aggregate of 1,000,000 stock options and 500,000 RSUs were issued under the 2015 Stock Incentive Plan in connection with the August 2021 and October 2021 grants. As of December 31, 2022, the Company has recognized compensation expense of $969,593 in relation to the options vested in 2022 and $630,863 in relation to the options that will vest in 2023. The Company has unrecognized compensation expense of $270,550 to such stock options, based on the outcomes related to the prescribed performance targets on the outstanding awards.
Total |  | Amortised |  | Amortised |  | Un-Amortised
Award |  | 2022 |  | 2021 |  | 2023
$ |  | $ |  | $ |  | $
969,593 |  | 580,411 |  | 389,182 |  | -
630,863 |  | 450,090 |  | 180,773 |  | 270,550
h) Commitments in Respect of Corporate Goals and Performance-Based Awards (continued) As of December 31, 2022, the Company has recognized compensation expense of $822,149 in relation to the RSUs fully vested in 2022 and $530,930 in relation to RSUs that will vest in 2023. The Company has unrecognized compensation expense of $228,491 to such RSUs, based on the outcomes related to the prescribed performance targets on the outstanding awards.
Total |  | Amortised |  | Amortised |  | Un-Amortised
Award |  | 2022 |  | 2021 |  | 2023
$ |  | $ |  | $ |  | $
822,149 |  | 493,207 |  | 328,942 |  | -
530,930 |  | 379,191 |  | 151,739 |  | 228,491
As of December 31, 2022, the Company has recognized total compensation expense of $245,861 of which $134,087 in relation to RSUs that will vest in 2023, $65,088 in relation to RSUs that will vest in 2024, and $46,686 in relation to RSUs that will vest in 2025. The Company has unrecognized compensation expense of $1,408,319 in relation to such RSUs, based on the outcomes related to the prescribed performance targets on the outstanding awards.
Vesting |  | Amortised |  |
Year |  | 2022 |  | Un-Amortised
|  | $ |  | $
2023 |  | 134,087 |  | 417,327
2024 |  | 65,088 |  | 470,244
2025 |  | 46,686 |  | 520,748
|  | 245,861 |  | 1,408,319

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