Volitionrx Ltd: Form 10-Q for the period ended Sep 30, 2025

The following discussion and analysis of our financial condition and results of operations should be read together with our unaudited condensed consolidated financial statements and the related notes included elsewhere in this Report and in our Annual Report. This discussion and analysis contains forward-looking statements that are based on our current expectations and reflect our plans, estimates and anticipated future financial performance. These statements involve numerous risks and uncertainties. Our actual results may differ materially from those expressed or implied by these forward-looking statements as a result of many factors, including those set forth in the section entitled “Risk Factors” in this Report and in our Annual Report, as well as our other public filings with the SEC. Please refer to the section of this Report entitled “Cautionary Note Regarding Forward-Looking Statements” for additional information.

Overview

Imagine a world where diseases like cancer and sepsis can be diagnosed early and monitored easily using routine blood tests. That’s the world Volition is trying to build by developing its innovative family of simple, easy to use, cost-effective blood tests.

Volition is a multi-national epigenetics company. It has patented technologies that use chromosomal structures, such as nucleosomes, and transcription factors as biomarkers in cancer and other diseases. The tests in the Company’s product portfolio detect certain characteristic changes that occur from the earliest stages of disease, enabling early detection and offering a better way to monitor disease progression and a patient’s response to treatment.

The tests offered by Volition and its subsidiaries are designed to detect and monitor a range of life-altering diseases, including certain cancers and diseases associated with NETosis, such as sepsis. Early diagnosis and monitoring have the potential to not only prolong the life of patients but also improve their quality of life.

We have several key pillars of focus:

• Nu.Q® Vet - cost-effective, easy-to-use blood tests for dogs and other companion animals. The Nu.Q® Vet Cancer Test is commercially available as a cancer screening test in dogs.
• Nu.Q® NETs - detects diseases associated with NETosis such as sepsis.
• Nu.Q® Discover - a complete solution to profiling nucleosomes.
• Nu.Q® Cancer - from screening, diagnosis and staging, therapy decision, planning and treatment to monitoring response to treatment and disease progression.
• Capture-PCR™ and Capture-SEQ™ - isolating and capturing circulating tumor-derived DNA from plasma samples for early cancer detection.

Commercialization Strategy

We are guided by three underlying principles to our commercialization strategy – ensuring our products:

• Result in low capital expenditures for licensors and end users and low operating expenses for Volition,
• Are affordable, and
• Are accessible worldwide.

The principles above inform our overall commercialization strategy for our products, which is driven by the following:

• Conducting research and development in-house and through our research partners;
• Monetizing our intellectual property with upfront payments, milestone payments, royalties, and sales of kits and key components; and
• Commercializing our products via global players and in fragmented markets through regional companies.

We aim to partner with established diagnostic companies and/or liquid biopsy companies to market, sell, and process our tests, leveraging their networks and expertise.

We believe, given the global prevalence of cancer and diseases associated with NETosis, and the low-cost, accessible and routine nature of our tests, they could potentially be used throughout the world.

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We aim to remain an IP powerhouse in the epigenetic space and expect to monetize our IP and technologies through licensing and distribution contracts with companies that have established distribution networks and expertise on a worldwide or regional basis, in both human and animal care across platforms (centralized labs and point-of-care / in-house diagnostics).

To this end, on March 28, 2022, Volition entered into a master license and product supply agreement with Heska, now an Antech Company. In exchange for granting Heska exclusive worldwide rights to sell our Nu.Q® Vet Cancer Test at the point of care for companion animals, Volition received a $10.0 million upfront payment upon signing, received $13.0 million based upon the achievement of two milestones and is eligible to receive up to an additional $5.0 million based upon the achievement of a final milestone upon the earlier of the first commercial sale by or on behalf of Heska of a screening or monitoring test for lymphoma in felines, or the nine-month anniversary of the first peer reviewed paper evidencing clinical utility for the screening or monitoring of lymphoma in felines being published in any one of a number of periodicals identified by the parties. In addition, Volition has granted Heska non-exclusive rights to sell the Nu.Q® Vet Cancer Test in kit format for companion animals through Heska’s network of central reference laboratories.

We also entered into a licensing and supply agreement with IDEXX Laboratories, Inc. (“IDEXX”) in October 2022. This contract provides worldwide customer reach through IDEXX’s global reference laboratory network as we continue to commercialize our transformational Nu.Q® technology within the companion animal healthcare sector and capitalize on the significant opportunities available. IDEXX launched the IDEXX Nu.Q® Canine Cancer Test in January 2023.

In November 2023, we launched the Nu.Q® Vet Cancer Test in the UK and Ireland through our distributor, the Veterinary Pathology Group, and in the UK through Nationwide Laboratories. In July 2024, we launched the Nu.Q® Vet Cancer Test in Japan with Fujifilm Vet Systems Co. Ltd. The Nu.Q® Vet Cancer Test is now available in over twenty countries.

In September 2025, we signed a Research License and Exclusive Commercial Option Rights Agreement for Antiphospholipid Syndrome (“APS”) with Werfen, a global leader in the field of in specialized diagnostics for hemostasis, thrombosis and other NETs-related indications. Full terms of the agreement are confidential, but Werfen will gain access to the components of Volition's proprietary Nu.Q® H3.1 NETs assay and will investigate its clinical utility in the management of APS patients on its platforms. Werfen also has an option to negotiate terms with us for it to launch the product commercially under an exclusive license.

Also in September 2025, we signed an agreement with Hologic Diagenode (“Hologic”) (NASDAQ: HOLX), for the co-marketing of our Nu.Q® Discover service. Under the agreement, Hologic will co-market Nu.Q® Discover services with Hologic customers for an initial one-year term. If successful, the aim is for Hologic to be appointed as an exclusive provider of those services, subject to further terms being agreed. The intention of this agreement is to expand customer access to our proprietary Nu.Q® Discover assays.

Liquidity and Capital Resources

We have financed our operations since inception primarily through private placements and public offerings of our common stock. As of September 30, 2025, we had cash and cash equivalents of approximately $0.2 million.

Net cash used in operating activities was $14.2 million for the nine months ended September 30, 2025 and $20.6 million for the nine months ended September 30, 2024. The decrease in cash used in operating activities for the period ended September 30, 2025 when compared to same period in 2024 can be primarily attributed to a reduction in research and development expenditure reflecting the completion of certain clinical trials and studies in 2024.

Net cash used in investing activities was $0.1 million and $0.4 million for the nine months ended September 30, 2025 and September 30, 2024, respectively. The decrease was primarily due to a reduction in the purchase of licenses in the current period.

Net cash provided by financing activities was $11.0 million for the nine months ended September 30, 2025 and $6.4 million for the comparable period ended September 30, 2024. The increase in cash provided by financing activities for the period ended September 30, 2025 when compared to same period in 2024 was primarily due to (i) $6.3 million in cash, before deducting commitment and legal fees of $0.3 million, received in exchange for the issuance of a senior secured convertible note and warrants in May 2025, (ii) $2.3 million in cash, before deducting offering expenses of $0.1 million, received from the issuance and sale of common stock and warrants in a registered direct offering that closed in March 2025, (iii) $0.3 million in net proceeds received from the issuance and sale of 448,706 shares of common stock under our “at-the-market” facility with Jefferies LLC (“Jefferies”) acting as exclusive placement agent, which facility terminated effective April 20, 2025, (iv) $0.9 million in net proceeds received from the issuance and sale of 1,386,223 shares of common stock under our 2025 ATM Sales Agreement during the nine months ended September 30, 2025, (v) $1.2 million in cash, before deducting offering expenses of $0.1 million, received from the issuance and sale of common stock and warrants in a registered direct offering that closed in August 2025, and (vi) $0.3 million in cash, received from the issuance and sale of common stock and warrants in a private placement that closed in September 2025.

For additional information on our “at-the-market” facility with Jefferies, which terminated in April 2025, our “at-the-market” facility established by our 2025 ATM Sales Agreement, the March 2025 registered direct offering, the August 2025 registered direct offering and the September 2025 private placement, refer to Note 6, Common Stock –2025 Equity Capital Raises and “-At the Market Offerings” of the notes to the condensed consolidated financial statements included within this Report. For additional information on the issuance of the May 2025 senior secured convertible note and warrants, refer to Note 8, Commitments and Contingencies – Convertible Note Payable, of the notes to the condensed consolidated financial statements included within this Report.

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The following table summarizes our approximate contractual payments due by year as of September 30, 2025.

Approximate Payments (Including Interest) Due by Year

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

In the event additional financing is delayed, we will prioritize the completion of clinical validation studies for the purpose of the sale of licensing or distribution rights, and the maintenance of our patent rights. In the event of an ongoing lack of financing, it may be necessary to discontinue operations, which will adversely affect the value of our common stock.

We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive activities. For these reasons, our auditors included in their report on our audited financial statements for the year ended December 31, 2024, an explanatory paragraph regarding factors that raise substantial doubt that we will be able to continue as a going concern. For additional information regarding our going concern assessment, refer to Note 2, Liquidity and Going Concern Assessment, of the notes to the condensed consolidated financial statements included within this Report.

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Results of Operations

Comparison of the Three Months Ended September 30, 2025 and September 30, 2024

The following table sets forth our results of operations for the three months ended September 30, 2025 and September 30, 2024.

Revenues

Our operations are transitioning from a research and development stage to a commercialization stage. Revenues during the three-months ended September 30, 2025 were $0.6 million, compared with $0.5 million for the three-months ended September 30, 2024. Our main source of revenues during the three months ended September 30, 2025 and September 30, 2024 was product revenues primarily from sales of the Nu.Q® Vet Cancer Test and Nu.Q Discover kits. Service revenue consisted solely of Nu.Q Discover services.

Operating Expenses

Total operating expenses decreased to $5.7 million for the three months ended September 30, 2025 from $6.3 million for the three months ended September 30, 2024, as a result of the factors described below.

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Research and Development Expenses

Research and development expenses decreased to $2.3 million from $3.5 million for the three-months ended September 30, 2025, and September 30, 2024, respectively. This decrease was primarily related to a reduction in personnel expenses and lower direct research and development expenses reflecting a reduction in clinical trial activity following completion of studies. The number of full-time equivalent (“FTE”) personnel we employed in this division decreased by 12 to 47 compared to the prior year period.

General and Administrative Expenses

General and administrative expenses increased to $2.5 million from $1.8 million for the three-months ended September 30, 2025, and September 30, 2024, respectively. The increase was primarily due to higher legal and professional fees, stock-based compensation and personnel expenses, partly offset by lower general and administrative costs. The FTE personnel number within this division decreased by 3 to 17 compared to the prior year period.

Sales and Marketing Expenses

Sales and marketing expenses decreased to $1.0 million from $1.1 million for the three-months ended September 30, 2025, and September 30, 2024, respectively. The reduction is due to lower personnel expenses and direct marketing and professional fees, partly offset by lower stock-based compensation during the period. The FTE personnel number within this division decreased by 6 to 11 compared to the prior year period.

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Other Income (Expenses)

For the three-months ended September 30, 2025, the Company’s other expenditure was $0.3 million compared to other income of $0.0 million for the three-months ended September 30, 2024. The increase in other expenses was mainly due to the amortization of debt discount partly offset by a gain on change in fair value of derivative liability (non-cash accounting charges).

Net Loss

For the three months ended September 30, 2025, the Company’s net loss was approximately $5.4 million in comparison to a net loss of $5.9 million for the three months ended September 30, 2024. The change was primarily a result of lower personnel costs and a reduction in clinical trial activity, partly reflecting the completion of certain research and development projects.

Comparison of the Nine Months Ended September 30, 2025 and September 30, 2024

The following table sets forth our results of operations for the nine months ended September 30, 2025 and September 30, 2024:

Revenues

Our operations are transitioning from a research and development stage to a commercialization stage. Revenues during the nine-months ended September 30, 2025 were $1.3 million, compared with $1.0 million for the nine-months ended September 30, 2024. Our main source of revenue during the nine-months ended September 30, 2025 and nine-months ended September 30, 2024 was product revenues primarily from sales of the Nu.Q® Vet Cancer Test and Nu.Q Discover kits. The year over year increase in revenues was primarily driven by sales of Nu.Q® Discover services.

Operating Expenses

Total operating expenses decreased to $18.2 million from $22.3 million for the nine months ended September 30, 2025 and September 30, 2024, respectively, as a result of the factors described below.

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Research and Development Expenses

Research and development expenses decreased to $7.6 million for the nine months ended September 30, 2025, from $11.8 million for the nine months ended September 30, 2024. This decrease was primarily related to lower research and development expenses and a reduction in personnel expenses as a result of reduced clinical trial activity following completion of certain clinical studies. The FTE personnel number decreased by 12 to 47 compared to the prior year period.

General and Administrative Expenses

General and administrative expenses increased to $7.7 million from $6.4 million for the nine months ended September 30, 2025 and September 30, 2024, respectively. This increase was primarily due to higher stock-based compensation expenses (non-cash charges), and higher legal and professional fees during the period. The FTE personnel number decreased by 3 to 17 compared to the prior year period.

Sales and Marketing Expenses

Sales and marketing expenses decreased to $2.9 million compared to $4.1 million for the nine months ended September 30, 2025 and September 30, 2024. This decrease was due to reduced personnel expenses and direct marketing and professional fees during the period. The FTE personnel number decreased by 6 to 11 compared to the prior year period.

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Other Income (Expenses)

For the nine months ended September 30, 2025, the Company’s other expenses were $0.3 million compared to other expenses of $0.2 million for the nine months ended September 30, 2024. The increase in other expenses is mainly due to amortization of debt discount and interest expenses, partly offset by a gain on change in fair value of a derivative liability and higher grant income.

Net Loss

For the nine months ended September 30, 2025, the Company’s net loss was approximately $17.2 million in comparison to a net loss of $21.4 million for the nine months ended September 30, 2024. The change was primarily a result of reduced clinical trial activity and personnel costs.

Going Concern

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

Off-Balance Sheet Arrangements

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

Future Financings

We may seek to obtain additional capital through the sale of debt or equity securities if we deem it desirable or necessary. These sales may include the sale of equity securities from time to time through an “at the market” offering under our 2025 ATM Sales Agreement with JonesTrading or through other equity or debt financings. See Note 6, Common Stock – 2025 ATM Sales Agreement, of the notes to the condensed consolidated financial statements. However, we may be unable to obtain such additional capital when needed, or on terms favorable to us or our stockholders, if at all. If we raise additional funds by issuing equity securities, the percentage ownership of our stockholders will be reduced, stockholders may experience additional dilution, or such equity securities may provide for rights, preferences or privileges senior to those of the holders of our common stock. If additional funds are raised through the issuance of debt securities, the terms of such securities may place restrictions on our ability to operate our business.

Critical Accounting Policies and Estimates

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

We also regularly evaluate estimates and assumptions related to deferred income tax asset valuation allowances, useful lives of property and equipment and intangible assets, borrowing rate used in operating lease right-of-use asset and liability valuations, impairment analysis of intangible assets, valuations of stock-based compensation, valuation of warrant and derivative liabilities and deferred revenue.

We base our estimates and assumptions on current facts, historical experiences, information from third party professionals and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. Actual results may differ materially and adversely from our estimates. To the extent there are material differences between the estimates and the actual results, future results of operations could be affected.

We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A summary of these policies is included in the notes to our financial statements. There have been no material changes to the critical accounting policies and key estimates and assumptions disclosed in the section titled “Critical Accounting Policies and Estimates” in Part II, Item 7 within our Annual Report.

Recently Issued Accounting Pronouncements

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

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Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of September 30, 2025, as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”). As a result of this evaluation, our principal executive officer and principal financial officer have concluded that, as of September 30, 2025, our disclosure controls and procedures were not effective due to the material weaknesses in internal control over financial reporting described below. Notwithstanding the identified material weaknesses, management, including our principal executive officer and principal financial officer, believes the condensed consolidated financial statements included in this report fairly represent, in all material respects, our financial condition, results of operations and cash flows as of and for the periods presented in accordance with GAAP.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. We identified a material weakness in our internal controls over financial reporting. In particular we do not have sufficient written documentation of our internal control policies and procedures, including written policies and procedures to ensure the correct application of accounting and financial reporting with respect to the current requirements of GAAP and SEC disclosure requirements

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the period covered by this report that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting. Please refer our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed, with the SEC on March 31, 2025.

Planned Remediation of Material Weakness

Our management has been actively engaged in developing and implementing remediation plans to address material weakness described above. These remediation efforts are ongoing and include or are expected to include:

• replacing our outside service providers to centralize the accounting function in-house;
• engaging internal control consultants to assist us in performing a financial reporting risk assessment as well as identifying and designing our system of internal controls necessary to mitigate the risks identified;
• preparation of written documentation of our internal control policies and procedures; and
• we have engaged external consultants to provide support and to assist us in our evaluation of more complex applications of GAAP.

We continue to enhance corporate oversight over process-level controls and structures to ensure that there is appropriate assignment of authority, responsibility, and accountability to enable remediation of our material weakness. We believe that our remediation plan will be sufficient to remediate the identified material weakness and strengthen our internal control over financial reporting. As we continue to evaluate, and work to improve, our internal control over financial reporting, management may determine that additional measures to address control deficiencies or modifications to the remediation plan are necessary.

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Changes in Internal Control over Financial Reporting

Except for the ongoing remediation of the material weakness in internal controls over financial reporting noted above, no changes in our internal control over financial reporting were made during the nine months ended September 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations of the Effectiveness of Disclosure Controls and Internal Controls

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

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

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There have been no material changes in our assessment of risk factors affecting our business since those presented in Part I, Item 1A of our Annual Report.