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What changed in VOLITIONRX LTD's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of VOLITIONRX LTD's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+163 added−167 removedSource: 10-K (2024-03-25) vs 10-K (2023-03-15)

Top changes in VOLITIONRX LTD's 2023 10-K

163 paragraphs added · 167 removed · 111 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeIn 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 and is eligible to receive up to an additional $18.0 million based upon the achievement of certain near and mid-term milestones.
Biggest changeIn 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.
Additional requirements are now applied to reinforce the safety of the products such as extended responsibilities of the economic actors of the supply chain, increased post marketing surveillance activities, unannounced audits from Notified Bodies, implementation of an improved traceability and transparency of the devices with the introduction of the Unique Device Identification system and an expanded European Database on Medical Devices.
Additional requirements are applied to reinforce the safety of the products such as extended responsibilities of the economic actors of the supply chain, increased post marketing surveillance activities, unannounced audits from Notified Bodies, implementation of an improved traceability and transparency of the devices with the introduction of the Unique Device Identification system and an expanded European Database on Medical Devices.
Our Market Opportunity Volition applies its Nucleosomics™ platform through its subsidiaries to develop simple, easy to use, cost-effective blood tests to help diagnose and monitor a range of life-altering diseases for both humans and animals including certain cancers and diseases associated with NETosis such as sepsis and COVID-19.
Our Market Opportunity Volition applies its technologies through its subsidiaries to develop simple, easy to use, cost-effective blood tests to help diagnose and monitor a range of life-altering diseases for both humans and animals including certain cancers and diseases associated with NETosis such as sepsis and COVID-19.
However, it is possible that governmental entities or other third parties could interpret these laws differently and assert otherwise, which could have a material adverse impact on our business. Intellectual Property Volition is developing clinical products based on the enrichment and analysis of epigenetically modified circulating nucleosomes using immunoassay, mass spectrometry, DNA sequencing and other methods.
However, it is possible that governmental entities or other third parties could interpret these laws differently and assert otherwise, which could have a material adverse impact on our business. Intellectual Property Volition is developing clinical products based on the enrichment and analysis of circulating chromatin using immunoassay, mass spectrometry, DNA sequencing and other methods.
We may incur significant costs to comply with such laws and regulations in the future, and lack of compliance could have material adverse effects on our operations. 9 Table of Contents We believe we have structured our business operations to comply with applicable legal requirements.
We may incur significant costs to comply with such laws and regulations in the future, and lack of compliance could have material adverse effects on our operations. We believe we have structured our business operations to comply with applicable legal requirements.
Financial Information See our consolidated financial statements and accompanying notes to the consolidated financial statements included in this Report. 10 Table of Contents
Financial Information See our consolidated financial statements and accompanying notes to the consolidated financial statements included in this Report. 9 Table of Contents
Limited, a Singapore registered company (“Singapore Volition”) in October 2011. Volition Global Services SRL, a Belgium private limited liability company (“Volition Global”), was formed in August 2021, which is a wholly owned operating subsidiary of VolitionRx. Singapore Volition has one subsidiary, Belgian Volition SRL, a Belgium private limited liability company (“Belgian Volition”), which it acquired in September 2010.
Volition Global Services SRL, a Belgium private limited liability company (“Volition Global”), was formed in August 2021, which is a wholly owned operating subsidiary of VolitionRx. Singapore Volition has one subsidiary, Belgian Volition SRL, a Belgium private limited liability company (“Belgian Volition”), which it acquired in September 2010.
The patent filings on the technologies underlying our products should provide broad coverage for each product, including protection through at least 2043. Employees As of December 31, 2022, we had 104 full-time equivalent (“FTE”) compared to 83 as of December 31, 2021, reflecting the growth in commercial and production activities.
The patent filings on the technologies underlying our products should provide broad coverage for each product, including protection through at least 2043. Employees As of December 31, 2023, we had 110 full-time equivalent (“FTE”) personnel compared to 104 as of December 31, 2022, reflecting the growth in our commercial and production activities.
There may also be other companies developing products competitive with ours of which we are unaware. 8 Table of Contents We predict our future products will have a competitive edge compared to those offered by competitors on the basis that our tests are developed to be accurate, cost-effective, attractive from a government reimbursement perspective, easy to use, non-invasive, technologically advanced, and compatible with immunoassay systems, based on strong intellectual property and to be used for mass screenings.
We predict our future products will have a competitive edge compared to those offered by competitors on the basis that our tests are developed to be accurate, cost-effective, attractive from a government reimbursement perspective, easy to use, non-invasive, technologically advanced, and compatible with immunoassay systems, based on strong intellectual property and to be used for mass screenings.
Our patent portfolio includes 34 patent families (plus three in-licensed families) and a total 97 patents granted related to our diagnostic tests (including veterinary applications), with 12 patents granted in the United States, 15 patents granted in Europe, and a further 70 patents granted worldwide. Additionally, we have a total of 122 patent applications currently pending, worldwide.
Our patent portfolio includes 50 patent families (plus two in-licensed families) and a total 79 patents granted related to our diagnostic tests (including veterinary applications), with 12 patents granted in the United States, 19 patents granted in Europe, and a further 48 patents granted worldwide. Additionally, we have a total of 132 patent applications currently pending, worldwide.
Some parts of the manual are bolded, highlighted, or underlined, telling the cell to emphasize those sections, while others are struck out, telling the cell to ignore those genes. 4 Table of Contents The cells of most bodily organs are continuously replaced by new ones. As they die, many old cells release their nucleosomes into the bloodstream.
Some parts of the manual are bolded, highlighted, or underlined, telling the cell to emphasize those sections, while others are struck out, telling the cell to ignore those genes. The cells of most bodily organs are continuously replaced by new ones.
To this end, on March 28, 2022, Volition entered into a master license and product supply agreement with Heska Corporation (“Heska”), a leading global provider of advanced veterinary diagnostics.
To this end, on March 28, 2022, Volition entered into a master license and product supply agreement with Heska.
We are currently conducting ongoing research regarding Nu.Q ® Vet as follows: · Point of Care platform (in partnership with the Heska Corporation), · Broadening the range of cancers detected, · Differential diagnosis, · Pre-analytics for the use of Nu.Q ® Vet in the feline population, and · Use of the Nu.Q ® platform in NETosis in canines.
We are currently conducting ongoing research regarding Nu.Q ® Vet in pursuit of the following goals: · Broadening the range of cancers detected, · Differential diagnosis, · Pre-analytics for the use of Nu.Q ® Vet in the feline population, · Use of the Nu.Q ® platform in NETosis in canines, and · Use of Capture-PCR TM in canines.
We will also be required to comply with numerous other federal, state, and local laws relating to matters such as safe working conditions, industrial safety, and labor laws.
Belgian Volition has maintained its ISO certification since 2015. 8 Table of Contents We will also be required to comply with numerous other federal, state, and local laws relating to matters such as safe working conditions, industrial safety, and labor laws.
Our Competition We anticipate facing competition primarily from other human-focused healthcare, pharmaceutical and diagnostic companies such as Exact Sciences Corporation, Guardant Health, GRAIL Inc., Freenome Holdings Inc, CellMax Life, Archer DX Inc., Foundation Medicine Inc., Oncocyte Corporation, OpKo Health Inc., MDNA Life Sciences Inc., Oncimmune Holdings Plc, Abbott Laboratories Inc., Cepheid Inc., Hologic Corporation, Agilent Technologies Inc., Qiagen Inc., Thermo Fisher, Illumina, Becton Dickinson, BioMerieux, Invitae, Siemens, Gen-Probe Incorporated, EpiGenomics AG, MDxHealth SA, and Roche Diagnostics, and from companies such as PetDx, One Health Company (Fidocure) and Vidium Animal Health focused on the veterinary space.
We anticipate that because of their ease of use and cost efficiency of our tests they have the potential to become the first method of choice for disease detection and monitoring in both humans and animals. 7 Table of Contents Our Competition We face competition primarily from other human-focused healthcare, pharmaceutical and diagnostic companies such as Exact Sciences Corporation, Guardant Health, GRAIL Inc., Freenome Holdings Inc, CellMax Life, Archer DX Inc., Foundation Medicine Inc., Oncocyte Corporation, OpKo Health Inc., MDNA Life Sciences Inc., Abbott Laboratories Inc., Cepheid Inc., Hologic Corporation, Agilent Technologies Inc., Qiagen Inc., Thermo Fisher, Illumina, Becton Dickinson, BioMerieux, Siemens, Gen-Probe Incorporated, EpiGenomics AG, MDxHealth SA, Roche Diagnostics, Cytovale Inc., and Immunexpress Inc., and from companies such as PetDx, One Health Company (Fidocure) and Vidium Animal Health focused on the veterinary space.
We also entered into a licensing and supply agreement with IDEXX Laboratories, Inc. (“IDEXX”), a global leader in pet healthcare innovation, 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.
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.
Tailored transitional periods have been introduced for devices that must undergo a conformity assessment involving Notified Bodies for the first time under the EU IVDR. The length of the transitional periods depends on the classification of device. In practice, the conformity assessment procedure for our products requires a combination of Quality Management System (“QMS”) audits and Technical Documentation assessments.
Tailored transitional periods have been introduced for on-market IVD devices that must undergo a conformity assessment involving Notified Bodies for the first time under the EU IVDR. The length of the transitional periods depends on the classification of device.
We believe, given the global prevalence of cancer and diseases associated with NETosis, and the low-cost, accessible and routine nature of our tests, Nu.Q ® could potentially be used throughout the world. 7 Table of Contents We aim to remain an IP powerhouse in the Nucleosomics™ 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).
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).
Nu.Q ® Discover empowers drug developers and scientists through access to a range of state-of-the-art assays for rapid epigenetic profiling in disease, model development, preclinical testing, and clinical studies - from discovery to market ready.
Nu.Q ® Discover Nu.Q ® Discover is a complete solution to profiling nucleosomes which empowers drug developers and scientists, offering rapid epigenetic profiling in disease model development, preclinical testing, and clinical studies – from drug discovery to market launch.
The most challenging changes compared to the previous Directive are those regarding the classification of products, which brings almost all IVDs under the direct review and control of designated assessment organizations (“Notified Bodies”), and the performance evaluation of IVDs, which requires extensive clinical and analytical performance studies in addition to a demonstration of scientific validity.
In Europe, IVD medical devices are regulated by the European In Vitro Diagnostic Regulation 2017/746 (“EU IVDR”) which brings almost all IVDs under the direct review and control of designated assessment organizations (“Notified Bodies”), and the performance evaluation of IVDs, which requires extensive clinical and analytical performance studies in addition to a demonstration of scientific validity.
Nu.Q ® Vet Cancer is the most common cause of death in dogs over the age of two years in the United States. Nearly 50% of all dogs over the age of 10 will develop cancer in their lifetime.
Nu.Q ® Product Overview Nu.Q ® Vet Cancer Test Cancer is the most common cause of death in dogs over the age of 2 years in the US, and it is estimated that up to 50% of all dogs over the age of 10 will develop cancer in their lifetimes.
The time needed for a Technical Documentation assessment of a device by our Notified Body (“TÜV SÜD”) is expected to last for nine months at a minimum. We have already begun discussions with the TÜV SÜD and are in the process to ensure compliance with the EU IVDR in 2023.
The time needed for a Technical Documentation assessment of a device by our Notified Body (“TÜV SÜD”) is expected to last for nine months at a minimum. Any new devices introduced to the market will undergo EU IVDR assessment.
We aim to offer competitive compensation (including salary, incentive bonus, and equity) and benefits packages in each of our locations and in each of our employee groups at each level around the globe as assessed with internal and external benchmarking data.
We aim to offer competitive compensation (including salary, incentive bonus, and equity) and benefits packages to each of our employees around the globe as assessed with internal and external benchmarking data. We aim to build a pipeline for talent to create more opportunities for workplace diversity and to support greater representation within the Company.
However, genes with coiled or supercoiled nucleosomes are inaccessible and inactive. Each nucleosome consists of a disc of eight histone proteins wrapped by a short length of DNA. Nucleosome structure has a dual role: first, it allows the compact storage and protection of the genetic material (or DNA), and second, it modulates the epigenetic regulation (transcription) of that DNA.
However, genes with coiled or supercoiled nucleosomes are inaccessible and inactive. Nu.Q ® Each nucleosome consists of a disc of eight histone proteins wrapped by a short length of DNA.
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. Subsequent to year end, in February 2023 Heska commenced pre-orders of the Nu.Q ® Canine Cancer Screen and Monitor Test to veterinarians at the point of care through Heska.
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 in October 2022.
We aim to build a pipeline for talent to create more opportunities for workplace diversity and to support greater representation within the Company. Corporate History VolitionRx Limited was originally incorporated on September 24, 1998 in the State of Delaware under the name “Standard Capital Corporation.” VolitionRx acquired its wholly owned operating subsidiary, Singapore Volition Pte.
Corporate History VolitionRx Limited is a Delaware corporation that was incorporated on September 24, 1998 under the name “Standard Capital Corporation.” VolitionRx acquired its wholly owned operating subsidiary, Singapore Volition Pte. Limited, a Singapore registered company (“Singapore Volition”) in October 2011.
This regulation is achieved through reversible chemical changes to both the DNA and protein components as well as through the binding of specific regulatory proteins to the DNA.
Nucleosome structure has a dual role: first, it allows the compact storage and protection of the genetic material (or DNA), and second, it modulates the epigenetic regulation (transcription) of that DNA. This regulation is achieved through reversible chemical changes to both the DNA and protein components, as well as through the binding of specific regulatory proteins to the DNA.
With approximately 84 million pet dogs in the United States, there are an estimated six million pet dogs diagnosed with cancer each year. As with humans, earlier detection can save lives and can also improve the quality of life of the dog and its owner.
There are an estimated 6 million pet dogs diagnosed with cancer each year. Earlier cancer detection can improve outcomes, including the quality of life of the dog and its owner. Yet, as of today, there are few single assay cancer blood tests on the veterinary market.
To support the conformity to the new IVDR, Belgian Volition has implemented a QMS, conforming to the internationally agreed standard ISO 13485 that sets out the QMS requirements specific to the medical devices industry. Belgian Volition has maintained its ISO certification since 2015.
In practice, the conformity assessment procedure for our products requires a combination of Quality Management System (“QMS”) audits and Technical Documentation assessments. To support the conformity to the new IVDR, Belgian Volition has implemented a QMS, conforming to the internationally agreed standard ISO 13485 that sets out the QMS requirements specific to the medical devices industry.
Being able to use epigenetic information from tumor cells’ nucleosomes could also help physicians select the best treatment for each patient, monitor their response and the disease progression. We are currently investigating the potential use of Nu.Q ® Cancer tests in a range of cancers and clinical settings.
Being able to use epigenetic information from the nucleosomes of tumor cells could help physicians: · Predict treatment response for each patient, · Monitor treatment response and disease progression, and · Promptly amend a patient’s cancer treatment regimen to achieve a better outcome. Nu.Q ® Cancer could also play a pivotal role in MRD monitoring.
Given the wide-ranging nature of our products in development we believe that our market opportunity is large. Based on our calculations, we believe that Volition’s annual total addressable market (“TAM”) is approximately $70 billion (including distributor and vet/clinician margins).
Given the wide-ranging nature of our products in development we believe that our market opportunity is large.
Highlighting abnormalities Our technology seeks to detect characteristic epigenetic changes in nucleosomes that occur from the earliest stages of cancer and other diseases. Epigenetic changes often occur before the diseased cells themselves become abnormal enough to show up in traditional biopsies, and oftentimes before the first symptoms are felt.
Epigenetic changes can be detected before the diseased cells themselves become abnormal enough to show up in traditional biopsies, and oftentimes before the first symptoms are felt.
Yet, as of today, there are few single assay cancer blood tests on the veterinary market. Currently, dogs suspected of having cancer are required to undergo a variety of diagnostic tests that may be expensive, time consuming, and painful for the animal.
Currently, dogs are usually diagnosed when they are unwell or there is a suspicion of cancer. Even then, dogs suspected of having cancer are required to undergo a variety of diagnostic tests that may be expensive, time consuming, and painful for the animal. We hope to change this with the introduction of the Nu.Q ® Vet Cancer Test.
All the tests in our portfolio detect various characteristic changes in nucleosomes that occur from the earliest stages of disease, potentially enabling early detection and a better way to monitor disease progression and the patient’s response to treatment. Unlocking Epigenetics We believe epigenetics is the most exciting field in disease detection and management today.
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.
Volition’s Solution and the Science Behind It We are dedicated to revolutionizing the diagnosis and monitoring of life-altering diseases by advancing the science of epigenetics. Imagine a world where diseases like cancer and sepsis can be diagnosed early and monitored easily using routine blood tests.
ITEM 1. BUSINESS 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.
Elevated levels of NETs are a complicating factor associated with poor patient outcomes in a range of infectious and non-infectious diseases. Sepsis—widespread tissue and organ damage triggered by an abnormal immune response to an infection—is an area of particular focus for our research on NETs.
Although NETs play a critical role in our normal immune response, elevated levels of NETs are a complicating factor associated with poor patient outcomes in sepsis, cancer, and a range of other diseases. 5 Table of Contents Sepsis is the number one cause of death in hospitals worldwide.
Our patented Nucleosomics™ technology isolates these circulating nucleosomes from the blood for quantification and analysis. Chromosome and nucleosome structure represent a major mechanism for epigenetic control.
Our patented Nucleosomics™ technology isolates circulating nucleosomes from the blood for quantification and analysis, to enable earlier diagnosis and monitoring of life-altering diseases.
We have five key pillars of focus, all of which use the same proprietary Nu.Q ® platform to commercialize in different areas: · Nu.Q ® Vet - cost-effective, easy-to-use cancer screening blood test for dogs and other animals. · Nu.Q ® NETs - monitoring the immune system to save lives. · Nu.Q ® Cancer - detecting cancer early to save lives. · Nu.Q ® Capture - capturing and concentrating samples for more accurate diagnosis. · Nu.Q ® Discover - a complete solution to profiling nucleosomes.
The Nu.Q ® Vet Cancer Test is commercially available as a cancer screening test in dogs. · Nu.Q ® NETs - monitoring the immune system to save lives. · Nu.Q ® Discover - a complete solution to profiling nucleosomes. · Nu.Q ® Cancer - monitoring disease progression, response to treatment and Minimal Residual Disease (“MRD”). · Capture-PCR TM - isolating and capturing circulating tumor-derived DNA from plasma samples for early cancer detection.
ITEM 1. BUSINESS Overview Volition is a multi-national epigenetics company powered by Nu.Q ® , its proprietary nucleosome quantification platform. Through its subsidiaries, Volition is developing simple, easy to use, cost effective blood tests to help diagnose and monitor a range of life-altering diseases including some cancers and diseases associated with NETosis such as sepsis and COVID-19.
The tests offered by Volition and its subsidiaries are designed to diagnose and monitor a range of life-altering diseases, including certain cancers and diseases associated with NETosis, such as sepsis and COVID-19. Early diagnosis and monitoring have the potential to not only prolong the life of patients but also improve their quality of life.
We aim to replace unpleasant, invasive, and often expensive screening and diagnostic tests such as colonoscopies and biopsies with Nu.Q ® blood tests, helping to save lives and to reduce overall healthcare costs. 5 Table of Contents We have five key pillars of focus: Nu.Q ® Vet, Nu.Q ® NETs, Nu.Q ® Cancer, Nu.Q ® Capture and Nu.Q ® Discover, all of which use the same proprietary Nu.Q ® platform to commercialize in different areas.
We aim to replace unpleasant, invasive, and often expensive screening and diagnostic tests with blood tests, helping to save lives and to reduce overall health care costs. 4 Table of Contents We have two technologies: · Nucleosome Quantification (“Nu.Q ® ”) · Capture-PCR TM Chromosome, nucleosome and transcription factor structures represent a major mechanism for epigenetic control.
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Early diagnosis and monitoring have the potential to not only prolong the life of patients but also improve their quality of life. The tests are based on the science of Nucleosomics™, which is the practice of identifying and measuring nucleosomes in the bloodstream or other bodily fluid - an indication that disease is present.
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We have several key pillars of focus: · Nu.Q ® Vet - cost-effective, easy-to-use blood tests for dogs and other companion animals.
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Our product development and manufacturing activities are centered in Belgium, with innovation and U.S. operations in California, and additional offices in Nevada, London, and Singapore, where we focus on bringing our diagnostic and disease monitoring products to market.
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The Company has grown from a single two-meter lab bench at the University of Namur in Belgium to a purpose-built 17,000 square foot lab and 10,000 square foot production facility in Gembloux, Belgium, an Innovation Lab in California, and offices in California, London, Singapore and Nevada.
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That’s the world we’re trying to build by developing our innovative family of simple, easy to use, cost-effective Nu.Q ® tests. Our patented Nucleosomics™ technology uses chromosomal structures called nucleosomes as biomarkers in cancer and other diseases: as explained below, chromosomes consist of the genetic material (DNA) wrapped in a coat of proteins and other molecules.
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In 2015, the Company’s common stock was listed on the New York Stock Exchange (VNRX). We now have a team of over 100 dedicated employees, spanning a wide range of disciplines; all united in our mission to improve outcomes for patients. Cultivating successful, ongoing relationships with stakeholders worldwide has been fundamental to Volition’s development.
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Volition’s Epigenetic Approach Through our Nu.Q ® (short for nucleosome quantification) family of tests in our five key pillars of focus, we aim to offer a new, convenient and cost-effective approach to the detection, diagnosis and monitoring of diverse diseases from a simple blood test.
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We have fostered ties with leading academic institutions, clinical centers of excellence, multi-national pharmaceutical companies and financial institutions across the globe. Volition’s Solution and the Science Behind It We are dedicated to revolutionizing the diagnosis and monitoring of life-altering diseases by advancing the science of epigenetics.
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We hope to change this with the introduction of the Nu.Q ® Vet Cancer Test: a simple, cost-effective, easy to use enzyme-linked immunosorbent assay (“ELISA”) based screening blood test which may help streamline the diagnostic process for older or “at-risk” dogs.
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Our team has worked tirelessly for more than a decade to evolve and master our understanding of the rich, complex information encoded in circulating chromatin and in particular, in circulating nucleosomes and transcription factors. Our tests are platform agnostic and can be adapted to any workflow setting – manual, reference laboratory and point-of-care.
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For example, findings from a clinical study conducted by Volition and Professor Wilson-Robles and the team at Texas A&M University, peer-reviewed and published in August 2022, reflect that Volition’s Nu.Q ® Vet Cancer Test detected 76% of systemic cancers ( including lymphoma, hemangiosarcoma, and histiocytic sarcoma) at 97% specificity versus control.
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We believe that our focus on innovation and robust assay development, as well as our diverse intellectual property portfolio, positions us to become a significant player in this cutting-edge field of science. Unlocking Epigenetics We believe epigenetics is the most exciting field in disease detection and management today.
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Data presented at the European Society of Veterinary Oncology Congress suggests that Nu.Q ® Vet may also serve as a more sensitive measurement of both minimal residual disease and remission and could be a useful monitoring test for dogs with cancer.
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The Nu Q® Vet Cancer Test is an accessible and affordable screening test to aid in the early detection of cancer in dogs. It’s a simple, cost effective, easy to use screening blood test recommended for older dogs (7 years and older) and those breeds at increased risk of developing cancer in their lifetimes (from 4 years).
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Nu.Q ® NETs - Monitoring the immune system to save lives. The immune system can be both friend and foe; a potent protective force that sometimes overreacts, damaging the body’s own cells and tissues in the process.
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Our test can be easily integrated into preventive care programs and used alongside other routine bloodwork during regular wellness visits. The Nu.Q ® Vet Cancer Test is available to veterinarians in the United States, Europe, and Asia through our distributors, which include IDEXX Laboratories, Inc.
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We are working to develop tests that will identify people at high risk of poor outcomes/death caused by an immune system overreaction to sepsis, COVID-19 and other infections. The immune system is comprised of many different types of white blood cells with different functions.
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(“IDEXX”), a global leader in pet healthcare innovation, and Heska Corporation (“Heska”), a leading global provider of advanced veterinary diagnostics, and now part of Mars Petcare, one of the largest pet health companies in the world. Transfer of the Nu.Q ® Vet Cancer Test onto Heska’s in-house diagnostic platform (the element i+) was completed in 2023.
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The most abundant of these white blood cells are neutrophils, which serve as a first line of defense.
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Nu.Q ® NETs Our Nu.Q ® NETs assay is a groundbreaking CE-marked diagnostic solution that clinicians can use to detect NETosis. Our assay can be used to identify patients with clinically relevant elevated levels of circulating Neutrophil Extracellular Traps (NETs) and enable physicians to rapidly treat these patients.
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When neutrophils detect bacteria, viruses, injuries, or other threats, these cells produce Neutrophil Extracellular Traps (“NETs”), which are sticky webs made of long strings of nucleosomes that work to inhibit a perceived threat from spreading through the body. 6 Table of Contents Although NETs are an important part of the body’s response to infection, the presence of too many of them in the blood can tip the immune system’s delicate balance between reaction and overreaction.
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It kills an estimated 11 million people a year, which is more than cancer or coronary disease. In 2017, there were an estimated 49 million cases worldwide, with over half of all cases occurring among children and accounting for 2.9 million deaths in children under five years old.
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A recent global study estimated that there were approximately 49 million cases and 11 million sepsis-related deaths worldwide in 2017, accounting for approximately 20% of all deaths from the same year. Severe cases of COVID-19 can cause excessive production of NETs in the lungs, which can lead to severe lung impairment or death.
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Just under half of all survivors are left with psychological and/or physical effects. Sepsis, also known as ‘blood poisoning’, is hard to identify. Initial symptoms of sepsis are difficult to distinguish from most infections and there is currently no test to diagnose it. Without prompt treatment, it can lead to multiple organ failure and death.
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Because NETs contain nucleosomes, our proprietary Nu.Q ® nucleosome assays have been shown to detect NETs. Using our Nu.Q ® nucleosome assays could enable the stratification of patients with a high level of NETs, allow physicians to rapidly triage these patients, and monitor their disease progression and response to treatment.
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Risk of death increases by 7.6% for every hour of treatment delay. Early detection and treatment of sepsis has the potential to improve survival – and improve the quality of life of survivors. Imagine if a simple blood test could help diagnose sepsis and identify those patients more likely to deteriorate.
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In May 2022, our Nu.Q ® NETs product was CE marked for the detection and evaluation of NETosis on two platforms (ELISA plates and i-10), enabling clinical use in more than 27 countries across Europe.
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Our Nu.Q ® NETs assay is the only analytically validated assay to quantify the level of NETs. It is platform agnostic so it can be adapted to any workflow/clinical setting – including central lab and point of care.
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In August 2022, we appointed Diagnostic Oncology CRO, LLC (“DXOCRO”), a contract research organization specializing in the commercialization of diagnostic biomarker technologies, to spearhead our clinical product development and regulatory programs in the United States. DXOCRO is undertaking large-scale finding studies across multiple sites using our Nu.Q® platform to determine clinical utility in sepsis and cancer.
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Nu.Q ® Discover is a valuable research tool for R&D professionals working within the field of Pharmacoepigenetics, and studying the epigenetic basis for variation in response to drugs and can help to answer clinical questions, such as measuring treatment efficacy, or on-target and off-target effects in drug development.
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We hope the study will support an application to the FDA’s Breakthrough Device program. The first phase of the study focused on sepsis has been completed and an application to the FDA’s Breakthrough Device Program is expected to be submitted in the first half of 2023. Nu.Q ® Cancer - Detecting cancer early to save lives.
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Drug developers and scientists can work with us, access our state-of-the-art proprietary assays and realize their longer-term, drug development needs. In this way, Nu.Q® Discover is able to unlock value from Volition’s IP portfolio by helping us to commercialize the areas we are not going to drive ourselves.
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We are developing a simple, cost-effective blood test for cancer. Cancer is a devastating disease that touches many peoples’ lives, accounting for approximately 10 million deaths worldwide each year. Early diagnosis is the best way to improve someone’s chances of surviving cancer; however, current population-wide screening tests (such as mammograms and colonoscopies) are often invasive and unpleasant.
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Our biomarkers support the entire drug discovery and development process from pre-clinical testing to market-readiness. We aim to assess disease severity, monitor treatment response, and enhance the understanding of disease pathology and treatments. Nu.Q ® Cancer Our Nu.Q ® Cancer pillar encapsulates a range of simple, cost effective blood-based assays.
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They can also be expensive, causing many people to miss routine screening. There are no population screening tests at all for some types of cancer, including aggressive forms of the disease such as ovarian or pancreatic cancers. Unfortunately, many patients are therefore diagnosed too late, when their cancer has already spread, and treatment is more difficult.
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Cancer is a devastating disease that touches many peoples’ lives, accounting for approximately 10 million deaths worldwide each year. It is the second leading cause of death globally and exerts an enormous burden on families, communities, and health systems. Survival rates are improving in countries with strong health systems, thanks to advances in cancer detection and treatment.
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We believe that Nu.Q ® Cancer can become a cost-effective routine blood test for multiple types of cancer, allowing doctors to check off an extra box along with other routine blood tests like cholesterol during an annual wellness visit. Nu.Q ® Cancer tests have further potential applications in clinical oncology beyond cancer detection.
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However, access to timely diagnostics and therapies remains limited for cancer patients in low and middle-income countries. Nu.Q ® Cancer can detect characteristic epigenetic changes in nucleosomes that occur during the earliest stages of cancer and has potential applications beyond cancer detection.
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Nu.Q ® Capture - Capturing and concentrating samples for more accurate diagnosis - Locating the needle in a haystack. Human blood is a mixture of many different cell types floating in a complex soup of proteins and other molecules, including nucleosomes released by cells from all around the body.
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The concept of MRD refers to the proportion of remaining cancer cells among otherwise normal bone marrow or, more rarely, among circulating blood cells after any given treatment of blood cancer. MRD monitoring has proven to be an independent prognostic factor and an important instrument for therapeutic decisions.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeSales of a substantial number of shares of our common stock in the public market or the perception that large sales of our shares could occur, could cause the market price of our common stock to decline or limit our future ability to raise capital through an offering of equity securities. 25 Table of Contents If equity research analysts do not publish research or reports about our business, or if they do publish such reports but issue unfavorable commentary or downgrade our common stock, the price and trading volume of our common stock could decline.
Biggest changeSales of a substantial number of shares of our common stock in the public market or the perception that large sales of our shares could occur, could cause the market price of our common stock to decline or limit our future ability to raise capital through an offering of equity securities.
If we fail to develop and commercialize diagnostic products, we may be unable to execute our plan of operations. · Failure to successfully develop, manufacture, market, and sell our future products will have a material adverse effect on our business, financial condition, and results of operations. · The results of pre-clinical studies and completed clinical trials are not necessarily predictive of future results, and our current product candidates may not have favorable results in later studies or trials which, in turn, could have a material adverse effect on our business. · Our research and development efforts will be hindered if we are not able to obtain samples, contract with third parties for access to samples or complete timely enrollment in future clinical trials. · If the third parties on which we increasingly rely to assist us with our current and anticipated pre-clinical development or clinical trials do not perform as expected, we may not be able to obtain regulatory clearance or approval or commercialize our products. · We expect to expand our product development, research and sales and marketing capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations. · We have limited experience with sales and marketing and any failure to build and manage a sales and marketing team effectively, or to successfully engage and maintain third party providers for such services, could have a material adverse effect on our business. · We rely on third parties to manufacture and supply our intended products.
If we fail to develop and commercialize diagnostic products, we may be unable to execute our plan of operations. · Failure to successfully develop, manufacture, market, and sell our future products will have a material adverse effect on our business, financial condition, and results of operations. · The results of pre-clinical studies and completed clinical trials are not necessarily predictive of future results, and our current product candidates may not have favorable results in later studies or trials which, in turn, could have a material adverse effect on our business. · Our research and development efforts will be hindered if we are not able to obtain samples, contract with third parties for access to samples or complete timely enrollment in future clinical trials. · If the third parties on which we increasingly rely to assist us with our current and anticipated pre-clinical development or clinical trials do not perform as expected, we may not be able to obtain regulatory clearance or approval or commercialize our products. · We expect to expand our product development, research and sales and marketing capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations. · We have limited experience with sales and marketing and any failure to build and manage a sales and marketing team effectively, or to successfully engage third party providers for such services, could have a material adverse effect on our business. · We rely on third parties to manufacture and supply our intended products.
We may need to raise additional capital in the future. If we are unable to secure adequate funds on terms acceptable to us, we may be unable to execute our plan of operations. We will require additional capital to fully fund our current strategic plan, which includes successfully commercializing our Nu.Q ® pipeline and developing future products.
We may need to raise additional capital in the future. If we are unable to secure adequate funds on terms acceptable to us, we may be unable to execute our plan of operations. We may require additional capital to fully fund our current strategic plan, which includes successfully commercializing our Nu.Q ® pipeline and developing future products.
Despite the precautionary measures we have taken to prevent unanticipated problems that could affect our IT systems, unauthorized access, loss or disclosure could also disrupt our operations, including our ability to: · provide customer assistance services; · conduct research and development activities; · collect, process and prepare company financial information; · provide information about our tests and other patient and healthcare provider education and outreach efforts through our website; and · manage the administrative aspects of our business and damage to our reputation. 15 Table of Contents Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, such as the U.S.
Despite the precautionary measures we have taken to prevent unanticipated problems that could affect our IT systems, unauthorized access, loss or disclosure could also disrupt our operations, including our ability to: · provide customer assistance services; · conduct research and development activities; · collect, process and prepare company financial information; · provide information about our tests and other patient and healthcare provider education and outreach efforts through our website; and · manage the administrative aspects of our business and damage to our reputation. 14 Table of Contents Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, such as the U.S.
Our ability to execute our business strategy depends, in part, on the continued and uninterrupted performance of our information technology (“IT”) systems, which support our operations including our research and development efforts. The integrity and protection of our own data, and that of our customers, clinical trial subjects and employees, is critical to our business.
Our ability to execute our business strategy depends, in part, on the continued and uninterrupted performance of our information technology systems, which support our operations including our research and development efforts. The integrity and protection of our own data, and that of our customers, clinical trial subjects and employees, is critical to our business.
We expect to expand our product development, research and sales and marketing capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations. We are focused on developing our pipeline for future products.
We expect to expand our product development, research and sales and marketing capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations. We are focused on developing our pipeline for current and future products.
If we incur delays in commencing commercialization of our Nu.Q ® pipeline or other future products or in achieving significant product revenue, or if we encounter other unforeseen adverse business developments, we may exhaust our capital resources prior to the commencement of commercialization.
If we incur delays in commercialization of our Nu.Q ® pipeline or other future products or in achieving significant product revenue, or if we encounter other unforeseen adverse business developments, we may exhaust our capital resources prior to the commencement of commercialization.
Although we utilize a variety of measures to secure the data that we control, even compliant entities can experience security breaches or have inadvertent failures despite employing reasonable practices and safeguards. 22 Table of Contents We may also face new risks relating to data privacy and security as the United States, individual U.S. states or Canadian provinces, E.U. member states, and other international jurisdictions adopt or implement new data privacy and security laws and regulations as we continue to commercialize our products worldwide.
Although we utilize a variety of measures to secure the data that we control, even compliant entities can experience security breaches or have inadvertent failures despite employing reasonable practices and safeguards. 20 Table of Contents We may also face new risks relating to data privacy and security as the United States, individual U.S. states or Canadian provinces, E.U. member states, and other international jurisdictions adopt or implement new data privacy and security laws and regulations as we continue to commercialize our products worldwide.
The failure of clinical trials to demonstrate the safety and effectiveness of our clinical candidates for the desired indication(s) would preclude the successful development of those candidates for such indication(s), in which event our business, prospects, results of operations and financial condition may be adversely affected. 18 Table of Contents Our research and development efforts will be hindered if we are not able to obtain samples, contract with third parties for access to samples or complete timely enrollment in future clinical trials.
The failure of clinical trials to demonstrate the safety and effectiveness of our clinical candidates for the desired indication(s) would preclude the successful development of those candidates for such indication(s), in which event our business, prospects, results of operations and financial condition may be adversely affected. 16 Table of Contents Our research and development efforts will be hindered if we are not able to obtain samples, contract with third parties for access to samples or complete timely enrollment in future clinical trials.
For all the foregoing reasons, we may not be able to compete successfully against our competitors, which could jeopardize our ability to recoup research and development expenditures, hurt our reputation and harm our business, results of operations and financial condition. 14 Table of Contents Our management has broad discretion over the use of our available cash and might not allocate cash in ways that increase the value of your investment .
For all the foregoing reasons, we may not be able to compete successfully against our competitors, which could jeopardize our ability to recoup research and development expenditures, hurt our reputation and harm our business, results of operations and financial condition. 13 Table of Contents Our management has broad discretion over the use of our available cash and might not allocate cash in ways that increase the value of your investment .
Any product liability claim brought against us, with or without merit, could increase our product liability insurance rates or prevent us from securing insurance coverage in the future. 21 Table of Contents Risks Related to Governmental Regulation and Reimbursement Our failure to obtain necessary regulatory clearances or approvals on a timely basis would significantly impair our ability to distribute and market our future products on the clinical IVD market.
Any product liability claim brought against us, with or without merit, could increase our product liability insurance rates or prevent us from securing insurance coverage in the future. 19 Table of Contents Risks Related to Governmental Regulation and Reimbursement Our failure to obtain necessary regulatory clearances or approvals on a timely basis would significantly impair our ability to distribute and market our future products on the clinical IVD market.
If we are unable to obtain financing on terms favorable to us, we may be unable to execute our plan of operations and we may be required to cease or reduce development or commercialization of any future products, sell some or all of our technology or assets or merge with another entity. 13 Table of Contents It is difficult to forecast our future performance, which may cause our financial results to fluctuate unpredictably.
If we are unable to obtain financing on terms favorable to us, we may be unable to execute our plan of operations and we may be required to cease or reduce development or commercialization of any future products, sell some or all of our technology or assets or merge with another entity. 12 Table of Contents It is difficult to forecast our future performance, which may cause our financial results to fluctuate unpredictably.
Our potential inability to integrate any acquired products or technologies effectively may adversely affect our business, operating results and financial condition. 17 Table of Contents Risks Related to Product Development, Commercialization and Sales of Our Products If the marketplace does not accept the products in our development pipeline or any other diagnostic products we might develop, we may be unable to generate sufficient revenue to sustain and grow our business.
Our potential inability to integrate any acquired products or technologies effectively may adversely affect our business, operating results and financial condition. 15 Table of Contents Risks Related to Product Development, Commercialization and Sales of Our Products If the marketplace does not accept the products in our development pipeline or any other diagnostic products we might develop, we may be unable to generate sufficient revenue to sustain and grow our business.
To manage healthcare costs, many governments and third-party payers in the United States increasingly scrutinize the pricing of new products and require greater levels of evidence of favorable clinical outcomes and cost-effectiveness before extending coverage. We cannot be sure that reimbursement will be available for our products and, if reimbursement is available, the level of such reimbursement.
To manage healthcare costs, many governments and third-party payers in the United States increasingly scrutinize the pricing of new products and require greater levels of evidence of favorable clinical outcomes and cost-effectiveness before extending coverage. We cannot be sure that reimbursement will be available for our products and, if reimbursement is available, the scope of such reimbursement.
Any failure to build and manage a sales and marketing team effectively, or to successfully engage and maintain third-party providers for such services, could have a material adverse effect on our business. 19 Table of Contents Our products will require several dynamic and evolving sales models tailored to different worldwide markets, users and products.
Any failure to build and manage a sales and marketing team effectively, or to successfully engage and maintain third-party providers for such services, could have a material adverse effect on our business. 17 Table of Contents Our products will require several dynamic and evolving sales models tailored to different worldwide markets, users and products.
The delays associated with the verification of a new manufacturer could negatively affect our ability to develop products or receive approval of any products in a timely manner. 20 Table of Contents We depend on third-party distributors to market and sell our products, which will subject us to a number of risks.
The delays associated with the verification of a new manufacturer could negatively affect our ability to develop products or receive approval of any products in a timely manner. 18 Table of Contents We depend on third-party distributors to market and sell our products, which will subject us to a number of risks.
If we are unable to secure adequate funds on terms acceptable to us, we may be unable to execute our plan of operations. · It is difficult to forecast our future performance, which may cause our financial results to fluctuate unpredictably. · The diagnostics market is highly competitive and subject to rapid technological change; accordingly, we will face fierce competition, including from companies with greater resources and experience than us, and our intended products may not achieve significant market penetration and/or may become obsolete. · Our management has broad discretion over the use of our available cash and might not allocate cash in ways that increase the value of your investment. · Our future success depends on our ability to retain our officers and directors, scientists, and other key employees and to attract, retain and motivate qualified personnel. · If any of our facilities or our laboratory equipment were damaged or destroyed, or if we experience a significant disruption in our operations for any reason, our ability to continue to operate our business could be materially harmed. · Failure in our information technology, storage systems or our clinical laboratory equipment could significantly disrupt our operations and our research and development efforts. · Our business and reputation will suffer if we are unable to establish and comply with stringent quality standards to assure that the highest level of quality is observed in the performance of our tests. · Declining global economic or business conditions may have a negative impact on our business. · The COVID-19 pandemic could adversely impact our business operations, strategy, financial performance and results of operations, the extent of which is uncertain and difficult to predict. · We may engage in acquisitions that are not successful and which could disrupt our business, cause dilution to our stockholders and reduce our financial resources. 11 Table of Contents Risks Related to Product Development, Commercialization and Sales of Our Products · If the marketplace does not accept the products in our development pipeline or any other diagnostic products we might develop, we may be unable to generate sufficient revenue to sustain and grow our business. · Our business is dependent on our ability to successfully develop and commercialize diagnostic products.
If we are unable to secure adequate funds on terms acceptable to us, we may be unable to execute our plan of operations. · It is difficult to forecast our future performance, which may cause our financial results to fluctuate unpredictably. · The diagnostics market is highly competitive and subject to rapid technological change; accordingly, we will face fierce competition, including from companies with greater resources and experience than us, and our intended products may not achieve significant market penetration and/or may become obsolete. · Our management has broad discretion over the use of our available cash and might not allocate cash in ways that increase the value of your investment. · Our future success depends on our ability to retain our officers and directors, scientists, and other key employees and to attract, retain and motivate qualified personnel. · If any of our facilities or our laboratory equipment were damaged or destroyed, or if we experience a significant disruption in our operations for any reason, our ability to continue to operate our business could be materially harmed. · Failure in our information technology, storage systems or our clinical laboratory equipment could significantly disrupt our operations and our research and development efforts and subject us to liability. · Our business and reputation will suffer if we are unable to establish and comply with stringent quality standards to assure that the highest level of quality is observed in the performance of our tests. · Declining global economic or business conditions may have a negative impact on our business. · We may engage in acquisitions that are not successful and which could disrupt our business, cause dilution to our stockholders and reduce our financial resources. 10 Table of Contents Risks Related to Product Development, Commercialization and Sales of Our Products · If the marketplace does not accept the products in our development pipeline or any other diagnostic products we might develop, we may be unable to generate sufficient revenue to sustain and grow our business. · Our business is dependent on our ability to successfully develop and commercialize diagnostic products.
Our competitors include large multinational corporations and their operating units, including Exact Sciences Corporation, Guardant Health, GRAIL Inc., Freenome Holdings Inc, CellMax Life, Archer DX Inc., Foundation Medicine Inc., Oncocyte Corporation, OpKo Health Inc., MDNA Life Sciences Inc., Oncimmune Holdings Plc, Abbott Laboratories Inc., Cepheid Inc., Hologic Corporation, Agilent Technologies Inc., Qiagen Inc., Thermo Fisher, Illumina, Becton Dickinson, BioMerieux, Invitae, Siemens, Gen-Probe Incorporated, EpiGenomics AG, MDxHealth SA, and Roche Diagnostics, and from companies such as PetDx, One Health Company (Fidocure) and Vidium Animal Health focused on the veterinary space.
Our competitors include large multinational corporations and their operating units, including Exact Sciences Corporation, Guardant Health, GRAIL Inc., Freenome Holdings Inc, CellMax Life, Archer DX Inc., Foundation Medicine Inc., Oncocyte Corporation, OpKo Health Inc., MDNA Life Sciences Inc., Abbott Laboratories Inc., Cepheid Inc., Hologic Corporation, Agilent Technologies Inc., Qiagen Inc., Thermo Fisher, Illumina, Becton Dickinson, BioMerieux, Siemens, Gen-Probe Incorporated, EpiGenomics AG, MDxHealth SA, Roche Diagnostics, Cytovale Inc. and Immunexpress Inc., and from companies such as PetDx, One Health Company (Fidocure) and Vidium Animal Health focused on the veterinary space.
The lead time from ordering to delivery of certain specialized equipment we use can be more than six months and difficult to substitute. Failure in our information technology, storage systems or our clinical laboratory equipment could significantly disrupt our operations and our research and development efforts.
The lead time from ordering to delivery of certain specialized equipment we use can be more than six months and difficult to substitute. Failure in our information technology, storage systems or our clinical laboratory equipment could significantly disrupt our operations and our research and development efforts and subject us to liability.
Reimbursement may impact the demand for, or the price of, our products. If reimbursement is not available or is available only at limited levels, we may not be able to successfully commercialize our future products.
Reimbursement may impact the demand for, or the price of, our products. If reimbursement is not available or is available only at limited amounts, we may not be able to successfully commercialize our future products.
Decreased disclosures in our SEC filings due to our status as a “smaller reporting company” and as a “non-accelerated filer” may make it harder for investors to analyze our results of operations and financial prospects and may make our common stock a less attractive investment. 26 Table of Contents
Decreased disclosures in our SEC filings due to our status as a “smaller reporting company” and as a “non-accelerated filer” may make it harder for investors to analyze our results of operations and financial prospects and may make our common stock a less attractive investment.
Additionally, for so long as we remain as a smaller reporting company, under current rules our accounting firm will not be required to provide an opinion regarding our internal controls over financial reporting. 24 Table of Contents We have a “going concern” opinion from our auditors, indicating the possibility that we may not be able to continue to operate.
Additionally, for so long as we remain as a smaller reporting company, under current rules our accounting firm will not be required to provide an opinion regarding our internal controls over financial reporting. We have a “going concern” opinion from our auditors, indicating the possibility that we may not be able to continue to operate.
As defined in Exchange Act Rule 13a-15(f), internal control over financial reporting is a process designed by, or under the supervision of, the principal executive and principal financial officer and effected by the board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: · pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and dispositions of assets; · provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and/or directors; and · provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
As defined in Exchange Act Rule 13a-15(f), internal control over financial reporting is a process designed by, or under the supervision of, the principal executive and principal financial officer and effected by the board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: · pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and dispositions of assets; · provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and/or directors; and · provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. 22 Table of Contents We have determined that we have material weaknesses in our internal control over financial reporting as of December 31, 2023.
As of December 31, 2022, we had approximately $10.9 million in combined cash and cash equivalents compared to approximately $20.6 million as of December 31, 2021. Our management expects to deploy these resources primarily to expand our commercialization activities, to fund our product development efforts and for general corporate and working capital purposes.
As of December 31, 2023, we had approximately $20.7 million in combined cash and cash equivalents compared to approximately $10.9 million as of December 31, 2022. Our management expects to deploy these resources primarily to expand our commercialization activities, to fund our product development efforts and for general corporate and working capital purposes.
Risks Related to Our Securities · The market prices and trading volume of our stock may be volatile. · We have identified material weaknesses in our internal control over financial reporting that have not yet been remediated, and although we are working to address such weaknesses, the failure to address these material weaknesses, or the identification of any others, could impact the reliability of our financial reporting and harm investors’ views of us, which could adversely impact our stock price. · We have a “going concern” opinion from our auditors, indicating the possibility that we may not be able to continue to operate. 12 Table of Contents · Our Second Amended and Restated Certificate of Incorporation exculpates our officers and directors from certain liability to our Company and our stockholders. · Our corporate governance documents, certain corporate laws applicable to us, and share ownership by executive officers and directors, could make a takeover attempt, which may be beneficial to our stockholders, more difficult. · We do not expect to pay dividends in the foreseeable future. · We may in the future issue additional shares of our common stock which would reduce investors’ ownership interests in the Company, and which may cause our stock price to decline. · Future sales of our common stock could depress the market price of our common stock. · If equity research analysts do not publish research or reports about our business, or if they do publish such reports but issue unfavorable commentary or downgrade our common stock, the price and trading volume of our common stock could decline. · We are a smaller reporting company and a non-accelerated filer, and we cannot be certain if the reduced disclosure requirements applicable to our filing status, as well as the exemption from the requirement to provide an auditor’s attestation report regarding the effectiveness of our internal controls, will make our common stock less attractive to investors.
Risks Related to Our Securities · The market prices and trading volume of our stock may be volatile. · We have identified material weaknesses in our internal control over financial reporting that have not yet been remediated, and although we are working to address such weaknesses, the failure to address these material weaknesses, or the identification of any others, could impact the reliability of our financial reporting and harm investors’ views of us, which could adversely impact our stock price. · We have a “going concern” opinion from our auditors, indicating the possibility that we may not be able to continue to operate. 11 Table of Contents · Our Second Amended and Restated Certificate of Incorporation exculpates our officers and directors from certain liability to our Company and our stockholders. · Our corporate governance documents, and certain corporate laws applicable to us, and share ownership by executive officers and directors, could make a takeover attempt, which may be beneficial to our stockholders, more difficult. · We do not expect to pay dividends in the foreseeable future. · We may in the future issue additional shares of our common stock which would reduce investors’ ownership interests in the Company, and which may cause our stock price to decline. · Future sales of our common stock could depress the market price of our common stock. · If equity research analysts do not publish research or reports about our business, or if they do publish such reports but issue unfavorable commentary or downgrade our common stock, the price and trading volume of our common stock could decline. · If we fail to comply with the NYSE American’s continued listing requirements, our common stock may be delisted and the price of our common stock and our ability to access the capital markets could be negatively impacted. · We are a smaller reporting company and a non-accelerated filer, and we cannot be certain if the reduced disclosure requirements applicable to our filing status, as well as the exemption from the requirement to provide an auditor’s attestation report regarding the effectiveness of our internal controls, will make our common stock less attractive to investors.
The issuance of common stock for future services or acquisitions or other corporate actions may have the effect of diluting the percentage ownership of our stockholders and, depending upon the prices at which such shares are sold or issued, on their investment in our common stock and, therefore, could have an adverse effect on any trading market for our common stock.
The issuance of common stock for future services or acquisitions or other corporate actions may have the effect of diluting the percentage ownership of our stockholders and, depending upon the prices at which such shares are sold or issued, on their investment in our common stock and, therefore, could have an adverse effect on any trading market for our common stock. 23 Table of Contents Future sales of our common stock could depress the market price of our common stock.
Risks Related to Our Business and Business Strategy We have incurred significant losses, and we may never achieve profitability. We are a clinical stage company and have incurred losses since our formation. As of December 31, 2022, we have an accumulated total deficit of approximately $167.3 million.
Risks Related to Our Business and Business Strategy We have incurred significant losses, and we may never achieve profitability. We are a clinical stage company and have incurred losses since our formation. As of December 31, 2023, we have an accumulated total deficit of approximately $202.6 million.
Further, our executive officers and directors beneficially own an amount of our outstanding shares of common stock such that if they were collectively to oppose a third party’s acquisition proposal for, or a change in control of, the Company, such officers and directors may have sufficient voting power to be able to block or at least delay such an acquisition or change in control from taking place, even if other stockholders would support such a sale or change of control.
Further, our executive officers and directors beneficially own an amount of our outstanding shares of common stock such that if they were collectively to oppose a third party’s acquisition proposal for, or a change in control of, the Company, such officers and directors may have sufficient voting power to be able to influence whether such an acquisition or change in control takes place, even if other stockholders would support such a sale or change of control.
For example, subsequent to the year ended December 31, 2022, Heska commenced pre-order sales of our Nu.Q ® Vet Cancer Test for screening and monitoring of cancer in canines to veterinarians at the point of care and we engaged IDEXX to make our Nu.Q ® Vet Cancer Test available to reference laboratories in the United States.
For example, Heska has commenced pre-order sales of our Nu.Q ® Vet Cancer Test for screening of cancer in canines to veterinarians at the point of care and we engaged IDEXX to make our Nu.Q ® Vet Cancer Test available to reference laboratories in the United States.
For example, we currently rely on DXOCRO to support development and clinical validation studies for our 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, which we hope to leverage in support of our U.S. commercialization strategy.
For example, we currently rely on Diagnostic Oncology CRO, LLC (“DXOCRO”) to support development and clinical validation studies for our Nu.Q ® product portfolio in the United States, including by conducting large-scale finding studies across multiple sites in the U.S. using our Nu.Q ® NETs test to determine clinical utility in sepsis, which we hope to leverage in support of our U.S. commercialization strategy.
We have determined that we have material weaknesses in our internal control over financial reporting as of December 31, 2022. See Part II, Item 9A of this Report for a complete discussion of these material weaknesses in our internal control over financial reporting and remediation efforts.
See Part II, Item 9A of this Report for a complete discussion of these material weaknesses in our internal control over financial reporting and remediation efforts.
Our patent portfolio includes 34 patent families (plus three in-licensed families) and a total 97 patents granted related to our diagnostic tests (including veterinary applications), with 12 patents granted in the United States, 15 patents granted in Europe and a further 70 patents granted worldwide. Additionally, we have 122 patent applications pending, worldwide.
Our patent portfolio includes 50 patent families (plus two in-licensed families) and a total 79 patents granted related to our diagnostic tests (including veterinary applications), with 12 patents granted in the United States, 19 patents granted in Europe and a further 48 patents granted worldwide. Additionally, we have 132 patent applications pending, worldwide.
Furthermore, any FDA regulations governing our future products are subject to change at any time, which may cause delays and have material adverse effects on our operations. In Europe, IVD companies are subject to inspection for enforcement, among others things.
Furthermore, any FDA regulations governing our future products are subject to change at any time, which may cause delays and have material adverse effects on our operations.
The invasion of Ukraine and the retaliatory measures that have been taken, and could be taken in future, by the U.S., NATO, and other countries have created global security concerns that could result in a regional conflict and otherwise have a lasting impact on regional and global economies, any or all of which could adversely affect our business. 16 Table of Contents The COVID-19 pandemic could adversely impact our business operations, strategy, financial performance and results of operations, the extent of which is uncertain and difficult to predict.
The invasion of Ukraine and the retaliatory measures that have been taken, and could be taken in future, by the U.S., NATO, and other countries have created global security concerns that could result in a regional conflict and otherwise have a lasting impact on regional and global economies, any or all of which could adversely affect our business.
We have also engaged IDEXX to make our Nu.Q ® Vet Cancer Test available to reference laboratories in the United States. Although we are investing in direct marketing to support these commercial launches, we may rely on third party resources such as Heska’s global network of veterinarians and IDEXX’s reference laboratory network to successfully market this test and generate revenue.
Although we are investing in direct marketing to support these commercial launches, we may rely on third party resources such as Heska’s global network of veterinarians and IDEXX’s reference laboratory network to successfully market this test and generate revenue.
If we fail to obtain a required license and are unable to design around a patent, we may be unable to effectively market some or all of our products, which could limit our ability to generate revenue or achieve profitability and possibly prevent us from generating revenue sufficient to sustain our operations.
If we fail to obtain a required license and are unable to design around a patent, we may be unable to effectively market some or all of our products, which could limit our ability to generate revenue or achieve profitability and possibly prevent us from generating revenue sufficient to sustain our operations. 21 Table of Contents If we are unable to protect our trade secrets, we may be unable to protect our interests in proprietary technology, processes and know-how that is not patentable or for which we have elected not to seek patent protection.
The market price of our common stock is likely to be highly volatile and the trading volume may fluctuate and cause significant price variation to occur. We cannot assure you that the market prices of our common stock will not fluctuate or decline significantly in the future.
Risks Related to Our Securities The market prices and trading volume of our stock may be volatile. The market price of our common stock is likely to be highly volatile and the trading volume may fluctuate and cause significant price variation to occur.
For example, subsequent to the fiscal end year ended December 31, 2022, Heska commenced pre-order sales of our Nu.Q ® Vet Cancer Test for screening and monitoring of cancer in canines to veterinarians worldwide at the point of care pursuant to our exclusive global supply and licensing agreement with Heska.
For example, Heska has commenced pre-order sales of our Nu.Q ® Vet Cancer Test for screening of cancer in canines to veterinarians worldwide at the point of care pursuant to our exclusive global supply and licensing agreement. We have also engaged IDEXX to make our Nu.Q ® Vet Cancer Test available to reference laboratories in the United States.
Any disclosure of confidential information into the public domain or to third parties could allow our competitors to learn our trade secrets and use the information in competition against us, which could adversely affect our competitive advantage. 23 Table of Contents Risks Related to Our Securities The market prices and trading volume of our stock may be volatile.
Moreover, others may independently develop equivalent proprietary information, and third parties may otherwise gain access to our trade secrets and proprietary knowledge. Any disclosure of confidential information into the public domain or to third parties could allow our competitors to learn our trade secrets and use the information in competition against us, which could adversely affect our competitive advantage.
Because this situation continues to evolve globally, the ultimate impacts to us of COVID-19 are uncertain, but such impacts could have a material adverse effect on our business, strategy, financial performance and financial condition. We may engage in acquisitions that are not successful and which could disrupt our business, cause dilution to our stockholders and reduce our financial resources.
We may engage in acquisitions that are not successful and which could disrupt our business, cause dilution to our stockholders and reduce our financial resources.
Removed
As a result of the COVID-19 pandemic and the related responses from government authorities, we have experienced and may continue to experience disruptions that could severely impact our business, strategy, financial performance and financial condition, as well as clinical trials, including: · delays or difficulties in enrolling patients in clinical trials; · delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff; · diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as clinical trial sites and hospital staff supporting the conduct of our clinical trials; · increased costs in our manufacturing, production and shipping processes; · a slowdown or stoppage in the supply chain of the raw materials, components, and packaging services used to manufacture our products or our inability to secure additional or alternate sources of supplies or services needed to manufacture our products at optimal levels; · interruptions or delays in global shipping to transport and deliver our products to our distributors and customers; and · fluctuations in foreign currency exchange rates or interest rates resulting from market uncertainties.
Added
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.
Removed
The continued spread of COVID-19 has also led to disruption and volatility in the global capital markets, which increases the cost of, and adversely impacts access to, capital and increases economic uncertainty. This volatility and uncertainty may adversely affect our stock price.
Added
In Europe, IVD companies are currently able to self-certify that they meet the appropriate regulatory requirements (which are subject to change with the EU MDR and the EU IVDR noted above) but are subject to inspection for enforcement.
Removed
The actions that governments and individuals have taken in response to COVID-19 have led to a sharp contraction in many aspects of economies worldwide, including an economic slowdown, and it is possible that it could cause a global recession. If this occurs, it could negatively impact our ability to develop and commercialize our products, among other things.
Added
We cannot assure you that the market prices of our common stock will not fluctuate or decline significantly in the future.
Removed
Even after the COVID-19 pandemic has subsided, we may continue to experience material adverse effects to our business as a result of the global economic impact of the pandemic, including local and global inflationary pressures, further or unexpected economic recessionary fears, increased political instability and threats of war, and could suffer from increased borrowing costs that limit discretionary consumer spending, which could hamper demand for our products and delay diagnostic testing and treatment.
Added
If equity research analysts do not publish research or reports about our business, or if they do publish such reports but issue unfavorable commentary or downgrade our common stock, the price and trading volume of our common stock could decline.
Removed
Further, the effects of COVID-19 may exacerbate our other risk factors described in this Report. The degree to which the COVID-19 pandemic may impact our business and clinical trials and development activities will depend on future developments, which are highly uncertain, continuously evolving and cannot be predicted with confidence.
Added
If we fail to comply with the NYSE American’s continued listing requirements, our common stock may be delisted and the price of our common stock and our ability to access the capital markets could be negatively impacted. Our common stock is listed on the NYSE American.
Removed
If we are unable to protect our trade secrets, we may be unable to protect our interests in proprietary technology, processes and know-how that is not patentable or for which we have elected not to seek patent protection.
Added
The continued listing of our common stock on the NYSE American is subject to our continued compliance with certain listing requirements, including requirements related to corporate governance, our financial condition and operating results, the trading price of our common stock, number of stockholders and our market capitalization.
Removed
Moreover, others may independently develop equivalent proprietary information, and third parties may otherwise gain access to our trade secrets and proprietary knowledge.
Added
If we fall out of compliance with the NYSE American’s listing standards and fail to regain compliance within the applicable cure periods, our common stock may be delisted from the NYSE American.
Removed
Future sales of our common stock could depress the market price of our common stock.
Added
The delisting of our common stock could materially reduce the liquidity of our common stock and result in a corresponding material reduction in the price of our common stock.
Removed
We are also a “non-accelerated filer,” meaning that we have a public float of less than $75 million measured as of the last business day of our most recently completed second fiscal quarter.
Added
In addition, delisting could harm our ability to raise capital on terms acceptable to us, or at all, reduce the amount of analyst coverage of our securities, result in the loss of confidence by investors and employees, and could lead to fewer business development opportunities, any of which could adversely affect our business.
Added
We are also a “non-accelerated filer,” based on our eligibility as a “smaller reporting company” as well as having annual revenues of less than $100 million in the most recent fiscal year for which audited financial statements are available.

Item 2. Properties

Properties — owned and leased real estate

3 edited+0 added−0 removed4 unchanged
Biggest change(4) Singapore Volition signed a one-year lease for this property, commencing July 1, 2022, located at 111 Somerset Road, Level 3, Triple One, Somerset, Singapore 238164, at an annual rent of SGD 67,524.
Biggest change(4) Singapore Volition signed a one-year lease for this property, commencing July 1, 2023, located at 111 Somerset Road, Level 3, Triple One, Somerset, Singapore 238164, at an annual rent of SGD 77,580.
Square Feet Leased or Owned Namur, Belgium (1) Research and development 17,300 Owned Namur, Belgium (2) Manufacturing 9,688 Owned London, UK (3) Sales and marketing 323 Leased, expiring 2024 Triple One, Singapore (4) Sales and marketing 192 Leased, expiring 2023 Henderson, Nevada (5) Administration 301 Leased, expiring 2024 Carlsbad, California (6) Research and development 6,645 Leased, expiring 2027 (1) Belgian Volition purchased property located in Namur, Belgium, in October 2016, to be used as a laboratory facility for R&D.
Square Feet Leased or Owned Namur, Belgium (1) Research and development 17,300 Owned Namur, Belgium (2) Manufacturing 9,688 Owned London, UK (3) Sales and marketing 323 Leased, expiring 2024 Triple One, Singapore (4) Sales and marketing 192 Leased, expiring 2024 Henderson, Nevada (5) Administration 301 Leased, expiring 2024 Carlsbad, California (6) Research and development 6,645 Leased, expiring 2027 (1) Belgian Volition purchased property located in Namur, Belgium, in October 2016, to be used as a laboratory facility for R&D.
ITEM 2. PROPERTIES Listed below are our current facilities as of December 31, 2022: Location Primary Function Approx.
ITEM 2. PROPERTIES Listed below are our current facilities as of December 31, 2023: Location Primary Function Approx.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+4 added−1 removed4 unchanged
Biggest changeRepurchase of Equity Securities No equity securities were repurchased during the fourth quarter of 2022.
Biggest changeThe shares were issued in book entry form with a restrictive legend to such effect. Repurchase of Equity Securities No equity securities were repurchased during the fourth quarter of 2023.
Holders As of March 8, 2023, there were 63,096,766 shares of our common stock outstanding held by 148 holders of record, based on information provided by our transfer agent.
Holders As of March 15, 2024, there were 82,068,442 shares of our common stock outstanding held by 160 holders of record, based on information provided by our transfer agent.
Removed
Securities Authorized for Issuance Under Equity Compensation Plans The information required by this item will be set forth in our definitive proxy statement related to our 2023 Annual Meeting of Stockholders, to be filed pursuant to Regulation 14A, on or before May 1, 2023. Recent Sales of Unregistered Securities None.
Added
Recent Sales of Unregistered Securities On December 4, 2023, the Company issued 3,205,431 shares of its common stock to a non-U.S. investor for an aggregate purchase price of approximately $2.67 million in a private placement transaction.
Added
Such shares were issued in reliance on the exemption from registration under Regulation S promulgated under the Securities Act as the offer or sale was made in an offshore transaction and no directed selling efforts were made in the United States by the issuer, a distributor, any of their respective affiliates, or any person acting on behalf of any of the foregoing.
Added
In addition, the investor certified that it is not a U.S. Person, as defined in Regulation S, and is not acquiring the securities for the account or benefit of any U.S.
Added
Person and agreed to resell such securities only in accordance with the provisions of Regulation S, pursuant to registration under the Securities Act, or pursuant to an available exemption from registration, and agreed not to engage in hedging transactions with regard to such securities unless in compliance with the Securities Act.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

26 edited+8 added−9 removed26 unchanged
Biggest changeThe decrease in net cash provided by financing activities for the 2022, when compared to 2021 was primarily due to $18.9 million in net cash received from the issuance of shares of common stock in a registered public offering in February 2021, and an aggregate of $4.6 million in cash received from the issuance of shares of common stock under our “at-the-market” facilities during 2021.
Biggest changeThe increase in net cash provided by financing activities for the 2023, when compared to 2022 was primarily due to the following $8.0 million in net proceeds received from the sale and issuance of common stock in a registered public offering in February 2023, before deducting offering expenses of $0.2 million, $17.6 million in net proceeds received from the sale and issuance of common stock in a registered public offering in June 2023, before deducting offering expenses of $0.1 million and $2.7 million (€2.5 million) in net proceeds received from the sale and issuance of common stock in a private placement in December 2023, also in June 2023 a $0.2 million loan was received from Namur Invest and in December 2023 a $1.6 million loan was received from Wallonie Entreprendre S.A.
We do not have any substantial source of revenues and expect to rely on additional future financing, through the sale of equity or debt securities, or the sale of licensing or distribution rights, to provide sufficient funding to execute our strategic plan. There is no assurance that we will be successful in raising further funds.
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.
Management plans to address the above as needed by: (a) securing additional grant funds; (b) obtaining additional equity or debt financing; (c) granting licenses to third parties in exchange for specified up-front and/or back end payments; and (d) developing and commercializing our products on an accelerated timeline. Management continues to exercise tight cost controls to conserve cash.
Management plans to address the above as needed by: (a) securing additional grant funds; (b) obtaining additional financing through debt or equity transactions; (c) granting licenses to third parties in exchange for specified up-front and/or back-end payments; and (d) developing and commercializing our products on an accelerated timeline. Management continues to exercise tight cost controls to conserve cash.
An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value. Impairment losses of $nil and $nil were recognized during the years ended December 31, 2022 and December 31, 2021, respectively. Foreign Currency Translation The Company has functional currencies in Euros, U.S. Dollars and British Pounds Sterling and its reporting currency is the U.S. Dollar.
An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value. Impairment losses of $nil and $nil were recognized during the years ended December 31, 2023 and December 31, 2022, respectively. Foreign Currency Translation The Company has functional currencies in Euros, U.S. Dollars and British Pounds Sterling and its reporting currency is the U.S. Dollar.
This discussion includes an analysis of our financial condition and results of operations for the years ended December 31, 2022 and 2021 and year-over-year comparisons between those periods. Certain statements made in this section constitute “forward-looking statements,” which are subject to numerous risks and uncertainties including those described in this section.
This discussion includes an analysis of our financial condition and results of operations for the years ended December 31, 2023 and 2022 and year-over-year comparisons between those periods. Certain statements made in this section constitute “forward-looking statements,” which are subject to numerous risks and uncertainties including those described in this section.
We have determined that for the periods reported in this Report the following accounting policies are critical in understanding our financial condition and results of operations: 33 Table of Contents Stock-Based Compensation The Company records stock-based compensation in accordance with ASC 718, “ Compensation – Stock Compensation”.
We have determined that for the periods reported in this Report the following accounting policies are critical in understanding our financial condition and results of operations: 32 Table of Contents Stock-Based Compensation The Company records stock-based compensation in accordance with ASC 718, “ Compensation – Stock Compensation”.
This compares with $6.4 million in net cash received from the issuance of approximately 3.5 million shares of common stock in a registered public offering in August 2022 (before deducting offering expenses of $0.2 million paid by the Company), a $1.1 million loan received in August 2022 from Namur Invest Capital Risk ("Namur Invest"), a $0.5 million loan received in December 2022 from Namur Invest, and an aggregate of $0.8 million in cash received from the issuance of shares of common stock under our “at-the-market” facilities during 2022 (before deducting offering expenses of $0.2 million).
This compares with $6.4 million in net cash received from the issuance of approximately 3.5 million shares of common stock in a registered public offering in August 2022, before deducting offering expenses of $0.2 million paid by the Company and a $1.0 million (€1.0 million) loan received in August 2022 from Namur Invest, a $0.5 million loan received in December 2022 from Namur Invest, and $0.8 million in cash received from the issuance of shares of common stock under our “at-the-market” facilities during the year, before deducting offering expenses of $0.2 million.
For additional information on our “at the market facilities,” refer to Note 7, Common Stock – Equity Distribution Agreements, of the Notes to consolidated financial statements. The following table summarizes our approximate contractual payments due by year as of December 31, 2022.
For additional information on our “at the market facilities,” refer to Note 7, Common Stock – Equity Distribution Agreements, of the Notes to consolidated financial statements included within this Report. The following table summarizes our approximate contractual payments due by year as of December 31, 2023.
This decrease in other income was primarily due to reduced grant income received of approximately $1.2 million during 2022 compared to $1.5 million in 2021.
This decrease in other income was primarily due to reduced grant income received of approximately $0.2 million during 2023 compared to $1.2 million in 2022.
The increase in overall sales and marketing expenditures was primarily due to increased personnel expenses, stock-based compensation and direct marketing expenses.
The increase in overall sales and marketing expenditures was primarily due to increased personnel expenses offset by lower stock-based compensation.
Revenue for the year ended December 31, 2022 was $306,392 compared with $90,035 for the year ended December 31, 2021. The main source of revenues during the year ended December 31, 2022, was product sales of the Nu.Q® Vet Cancer Test and services revenue from our Nu.Q ® Discover offering.
Revenue for the year ended December 31, 2023 was $775,302 compared with $306,392 for the year ended December 31, 2022. The main source of revenues during the years ended December 31, 2023 and December 31, 2022, was product sales of the Nu.Q® Vet Cancer Test and services revenue from our Nu.Q ® Discover offering.
Net Loss For the year ended December 31, 2022, the Company’s net loss was $30.6 million, an increase of approximately $3.6 million, in comparison to a net loss of $27.0 million for the year ended December 31, 2021. The change was a result of the factors described above.
Net Loss For the year ended December 31, 2023, the Company’s net loss was $35.7 million, an increase of approximately $5.1 million, in comparison to a net loss of $30.6 million for the year ended December 31, 2022. The change was a result of the factors described above.
As of December 31, 2022, we had cash and cash equivalents of approximately $10.9 million. Net cash used in operating activities was $15.3 million and $20.9 million for the years ended December 31, 2022 and December 31, 2021, respectively.
As of December 31, 2023, we had cash and cash equivalents of approximately $20.7 million. 28 Table of Contents Net cash used in operating activities was $18.1 million and $15.3 million for the years ended December 31, 2023 and December 31, 2022, respectively.
Through its subsidiaries, Volition is developing simple, easy to use, cost-effective blood tests to help diagnose and monitor a range of life-altering diseases, including some cancers and diseases associated with NETosis, such as sepsis and COVID-19. Early diagnosis and monitoring have the potential to not only prolong the life of patients, but also improve their quality of life.
The tests offered by Volition and its subsidiaries are designed to diagnose and monitor a range of life-altering diseases, including certain cancers and diseases associated with NETosis, such as sepsis and COVID-19. Early diagnosis and monitoring have the potential to not only prolong the life of patients but also improve their quality of life.
Operating Expenses Total operating expenses increased to $32.1 million from $28.4 million for the years ended December 31, 2022 and December 31, 2021, respectively, as a result of the factors described below. 31 Table of Contents Research and Development Expenses Research and development expenses increased to $14.6 million from $13.0 million for the years ended December 31, 2022 and December 31, 2021, respectively.
Operating Expenses Total operating expenses increased to $36.8 million from $32.1 million for the years ended December 31, 2023 and December 31, 2022, respectively, as a result of the factors described below. 30 Table of Contents Research and Development Expenses Research and development expenses increased to $19.6 million from $15.3 million for the years ended December 31, 2023 and December 31, 2022, respectively.
Net cash used in investing activities was $1.6 million and $1.0 million for the years ended December 31, 2022 and December 31, 2021, respectively. The increase in cash used in investing activities during 2022 was primarily due to an increase in purchases of laboratory equipment as compared to 2021.
The decrease in cash used in investing activities during 2023 was primarily due to reduced purchases of laboratory equipment as compared to 2022. Net cash provided by financing activities after associated costs was $29.0 million and $6.9 million for the years ended December 31, 2023 and December 31, 2022, respectively.
The decrease in overall general and administrative expenditures during 2022 was primarily due to lower stock-based compensation in relation to modification of options, offset by higher personnel expenses.
The increase in overall general and administrative expenditures during 2023 was primarily due to higher personnel expenses and legal and professional fees offset by lower stock-based compensation.
The increase in overall research and development expenditures during 2022 was primarily related to higher personnel expenses offset by a reduction in stock-based compensation expenses.
The increase in overall research and development expenditures during 2023 was primarily related to higher personnel expenses and clinical research costs.
The FTE personnel number within this division increased by six to nineteen in 2022 compared to the prior year period. 2022 $ 2021 $ Change $ Personnel expenses 4,400,092 2,203,745 2,196,347 Stock-based compensation 1,068,222 774,404 293,818 Other Sales & Marketing expenses 1,053,807 746,108 307,699 Depreciation and amortization 54,125 - 54,125 Total sales and marketing expenses 6,576,246 3,724,257 2,851,989 32 Table of Contents Other Income (Expenses) For the year ended December 31, 2022, other income decreased to approximately $1.2 million compared to other income of approximately $1.3 million for the year ended December 31, 2021.
The FTE personnel number within this division increased by three to twenty two in 2023 compared to the prior year period. 2023 2022 Change $ $ $ Personnel expenses 5,046,282 4,400,092 646,190 Stock-based compensation 732,422 1,068,222 (335,800 ) Other sales and marketing expenses 1,012,868 1,053,807 (40,939 ) Depreciation and amortization 51,588 54,125 (2,537 ) Total sales and marketing expenses 6,843,160 6,576,246 266,914 31 Table of Contents Other Income (Expenses) For the year ended December 31, 2023, other income decreased to approximately $0.3 million compared to other income of approximately $1.2 million for the year ended December 31, 2022.
The FTE personnel number within this division increased by nine to twenty-two in 2022 compared to the prior year period. 2022 $ 2021 $ Change $ Personnel expenses 5,047,242 3,944,454 1,102,788 Stock-based compensation 1,393,784 2,984,253 (1,590,469 ) Legal and professional fees 2,715,255 2,696,164 19,091 Other general and administrative 1,486,722 1,477,186 9,536 Depreciation and amortization 294,683 574,389 (279,706 ) Total general and administrative expenses 10,937,686 11,676,446 (738,760 ) Sales and Marketing Expenses Sales and marketing expenses increased to $6.6 million from $3.7 million for the years ended December 31, 2022 and December 31, 2021, respectively.
The FTE personnel number within this division remained at twenty two in 2023 compared to the prior year period. 2023 2022 Change $ $ $ Personnel expenses 5,492,705 5,047,242 445,463 Stock-based compensation 939,412 1,393,784 (454,372 ) Legal and professional fees 2,116,494 1,954,798 161,696 Other general and administrative 1,579,241 1,486,722 92,519 Depreciation and amortization 240,462 294,683 (54,221 ) Total general and administrative expenses 10,368,314 10,177,229 191,085 Sales and Marketing Expenses Sales and marketing expenses increased to $6.8 million from $6.6 million for the years ended December 31, 2023 and December 31, 2022, respectively.
FTE personnel numbers within this division increased by six to sixty-three during 2022 compared to the prior year period. 2022 $ 2021 $ Change $ Personnel expenses 7,125,017 5,335,333 1,789,684 Stock based compensation 652,653 1,361,989 (709,336 ) Direct research and development expenses 5,662,957 5,055,411 607,546 Other research and development 292,292 730,491 (438,199 ) Depreciation and amortization 839,613 539,187 300,426 Total research and development expenses 14,572,532 13,022,411 1,550,121 General and Administrative Expenses General and administrative expenses decreased to $10.9 million from $11.7 million for the years ended December 31, 2022 and December 31, 2021, respectively.
FTE personnel numbers within this division increased by three to sixty six during 2023 compared to the prior year period. 2023 2022 Change $ $ $ Personnel expenses 9,207,822 7,125,017 2,082,805 Stock-based compensation 617,710 652,653 (34,943 ) Direct research and development expenses 7,641,571 5,662,957 1,978,614 Other research and development 964,843 1,052,749 (87,906 ) Depreciation and amortization 1,119,577 839,613 279,964 Total research and development expenses 19,551,523 15,332,989 4,218,534 General and Administrative Expenses General and administrative expenses increased to $10.4 million from $10.2 million for the years ended December 31, 2023 and December 31, 2022, respectively.
For additional information, refer to the section entitled “Cautionary Note Regarding Forward-Looking Statements” within this Report. Company Overview Volition is a multi-national epigenetics company powered by Nu.Q ® , its proprietary nucleosome quantification platform.
For additional information, refer to the section entitled “Cautionary Note Regarding Forward-Looking Statements” within this Report. Company Overview 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.
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.
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.
The decrease in cash used in operating activities during 2022 when compared to 2021 was primarily due to a $10.0 million payment received pursuant to our master license and product supply agreement with Heska, partly offset by higher payroll costs, and higher amounts paid to suppliers during the period.
The increase in cash used in operating activities during 2023 when compared to 2022 was primarily due to higher payroll costs and higher amounts paid to suppliers during the period. Net cash used in investing activities was $1.1 million and $1.6 million for the years ended December 31, 2023 and December 31, 2022, respectively.
If there is a subsequent outbreak of COVID-19 in the future, we may experience significant delays in our clinical development timelines, which would adversely affect our business, financial condition, and results of operations. Liquidity and Capital Resources We have financed our operations since inception primarily through private placements and public offerings of our common stock.
If we are unable to obtain adequate capital, we could be forced to cease operations. Liquidity and Capital Resources We have financed our operations since inception primarily through private placements and public offerings of our common stock.
We have five key pillars of focus, all of which use the same proprietary Nu.Q ® platform to commercialize in different areas. · Nu.Q ® Vet - cost-effective, easy-to-use cancer screening blood test for dogs and other animals. · Nu.Q ® NETs - monitoring the immune system to save lives. · Nu.Q ® Cancer - detecting cancer early to save lives. · Nu.Q ® Capture - capturing and concentrating samples for more accurate diagnosis. · Nu.Q ® Discover - a complete solution to profiling nucleosomes.
The Nu.Q ® Vet Cancer Test is commercially available as a cancer screening test in dogs. · Nu.Q ® NETs - monitoring the immune system to save lives. · Nu.Q ® Discover - a complete solution to profiling nucleosomes. · Nu.Q ® Cancer - monitoring disease progression, response to treatment and Minimal Residual Disease. · Capture-PCR TM - isolating and capturing circulating tumor derived DNA from plasma samples for early cancer detection.
Removed
The tests are based on the science of Nucleosomics™, which is the practice of identifying and measuring nucleosomes in the bloodstream or other bodily fluids, since changes in these parameters are an indication that disease is present.
Added
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.
Removed
Our research, product development and manufacturing activities are centered in Belgium, with innovation and U.S. operations in California, and additional offices in Nevada, London, and Singapore, where we focus on bringing our diagnostic and disease monitoring products to market.
Added
We have several key pillars of focus: · Nu.Q ® Vet - cost-effective, easy-to-use blood tests for dogs and other companion animals.
Removed
If we are unable to obtain adequate capital, we could be forced to cease operations. Developments—COVID-19 Pandemic Due to the continued evolution of the COVID-19 pandemic since March 2020, we cannot precisely determine or quantify the impacts the pandemic will have on our business, financial conditions or results of operations.
Added
The Company has grown from a single two-meter lab bench at the University of Namur in Belgium to a purpose-built lab in Gembloux, Belgium, an Innovation Lab in California, and offices in California, London, Singapore and Nevada. In 2015 the Company’s common stock was listed on the New York Stock Exchange (VNRX).
Removed
For example, although we have worked with clinical trial sites impacted by the pandemic to ensure study continuity, we have experienced and may in the future experience disruptions that could impact our clinical trials, including delays in enrolling patients in clinical trials or in sample collection, and diversion of healthcare resources from the conduct of our clinical trials. 29 Table of Contents The extent of the impact of the COVID-19 pandemic on our business remains uncertain and subject to change.
Added
We now have a team of over 100 dedicated employees, spanning a wide range of disciplines; all united in its mission to improve outcomes for patients.
Removed
Net cash provided by financing activities after associated costs was $6.9 million and $22.9 million for the years ended December 31, 2022 and December 31, 2021, respectively.
Added
Approximate Payments (Including Interest) Due by Year Total 2024 2025 - 2028 2029 + Description $ $ $ $ Financing lease liabilities 497,250 59,374 237,500 200,376 Operating lease liabilities and short-term lease 646,662 256,768 389,894 - Grants repayable 478,562 55,855 186,218 236,489 Long-term debt 5,791,541 1,481,023 3,986,716 323,802 Collaborative agreements obligations 1,273,692 1,110,146 163,546 - Total 8,687,707 2,963,166 4,963,874 760,667 We intend to use our cash reserves to predominantly fund further research and development, and commercialization activities.
Removed
Approximate Payments (Including Interest) Due by Year Total 2023 2024 - 2027 2028 + Description $ $ $ $ Financing lease liabilities 541,162 57,726 230,902 252,534 Operating lease liabilities and short-term lease 696,702 291,868 404,834 - Grants repayable 462,302 49,283 149,126 263,893 Long-term debt 4,319,826 1,268,528 2,604,499 446,799 Collaborative agreements obligations 879,805 798,032 81,773 - Total 6,899,797 2,465,437 3,471,134 963,226 We intend to use our cash reserves to predominantly fund further research and development activities.
Added
We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive activities.
Removed
In the event additional financing is delayed, we will prioritize the maintenance of our research and development personnel and facilities, primarily in Belgium, and the maintenance of our patent rights. In such instance, the completion of clinical validation studies and regulatory approval processes for the purpose of bringing products to the IVD market would be delayed.
Added
For these reasons, our auditors included in their report on our audited financial statements for the year ended December 31, 2023, an explanatory paragraph regarding factors that raise substantial doubt that we will be able to continue as a going concern. 29 Table of Contents Results of Operations Comparison of the Years Ended December 31, 2023 and December 31, 2022 The following table sets forth our results of operations for the years ended on December 31, 2023, and December 31, 2022, respectively (expressed in United Stated Dollars, except outstanding share numbers and percentages).
Removed
For these reasons, our auditors included in their report on our audited financial statements for the year ended December 31, 2022, an explanatory paragraph regarding factors that raise substantial doubt that we will be able to continue as a going concern. 30 Table of Contents Results of Operations Comparison of the Years Ended December 31, 2022 and December 31, 2021 The following table sets forth our results of operations for the years ended on December 31, 2022, and December 31, 2021, respectively (expressed in United Stated Dollars, except outstanding share numbers and percentages). 2022 $ 2021 $ Increase (Decrease) $ Percentage Increase (Decrease) $ Royalty 2,911 - 2,911 >100 % Service 92,488 - 92,488 >100 % Product 210,993 90,035 120,958 >100 % Total Revenues 306,392 90,035 216,357 >100 % Research and development 14,572,532 13,022,411 1,550,121 12 % General and administrative 10,937,686 11,676,446 (738,760 ) (6 %) Sales and marketing 6,576,246 3,724,257 2,851,989 77 % Total Operating Expenses 32,086,464 28,423,114 3,663,350 13 % Grant income 1,229,425 1,522,533 293,108 (19 %) Loss on disposal of fixed assets - (26,166 ) 26,166 %) Interest income 125,265 2,734 122,531 >100 % Interest expense (173,087 ) (155,803 ) 17,284 11 % Total Other Income (Expenses) 1,181,603 1,343,298 (161,695 ) (12 %) Net Loss (30,598,469 ) (26,989,781 ) 3,608,688 13 % Revenues Our operations are still transitioning from a research and development stage to a commercialization stage.
Added
Increase Percentage Increase 2023 2022 (Decrease) (Decrease) $ $ $ % Royalty 1,369 2,911 (1,542 ) (53 %) Service 175,476 92,488 82,988 90 % Product 598,457 210,993 387,464 >100 % Total Revenues 775,302 306,392 468,910 >100 % Research and development 19,551,523 15,332,989 4,218,534 28 % General and administrative 10,368,314 10,177,229 191,085 2 % Sales and marketing 6,843,160 6,576,246 266,914 4 % Total Operating Expenses 36,762,997 32,086,464 4,676,533 15 % Grant income 214,451 1,229,425 (1,014,974 ) (83 %) Loss on disposal of fixed assets (15,843 ) - (15,843 ) %) Interest income 93,324 125,265 (31,941 ) (25 %) Interest expense (221,622 ) (173,087 ) 48,535 28 % Gain on change in fair value of warrant liability 240,311 - 240,311 >100 % Total Other Income (Expenses) 310,621 1,181,603 (870,982 ) (74 %) Net Loss (35,677,074 ) (30,598,469 ) 5,078,605 17 % Revenues Our operations are still transitioning from a research and development stage to a commercialization stage.
Removed
The primary source of revenue during the year ended December 31, 2021, was direct sales of the Nu.Q ® Vet Cancer Test through the Gastrointestinal Laboratory at Texas A&M University.

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