Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

Overview

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

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

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

We have several key pillars of focus:

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

Commercialization Strategy

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

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

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

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

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

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

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

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

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

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

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

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

Liquidity and Capital Resources

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

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

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

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

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

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

Approximate Payments (Including Interest) Due by Year
		Total				2025 - Remaining				2026 - 2029				Greater than 5 years
Description		$				$				$				$
Financing lease liabilities			418,077				15,778				252,432				149,867
Operating lease liabilities and short-term lease			670,576				91,392				579,184				-
Grants repayable			511,617				69,123				249,660				192,834
Long-term debt			7,751,342				649,716				6,901,764				199,862
Collaborative agreements obligations			1,368,809				1,368,809				-				-
Convertible Note			7,500,000				833,334				6,666,666
Total			18,220,421				3,028,152				14,649,706				542,563

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

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

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

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Results of Operations

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

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

		Three Months Ended September 30,
		2025				2024				Change				Change
		$				$				$				%
Service			88,896				68,434				20,462				30	%
Product			538,381				406,088				132,293				33	%
Total Revenues			627,277				474,522				152,755				32	%
Research and development			2,285,907				3,473,782				(1,187,875	)		(34		%)
General and administrative			2,483,793				1,815,863				667,930				37	%
Sales and marketing			958,567				1,053,584				(95,017	)		(9		%)
Total Operating Expenses			5,728,267				6,343,229				(614,962	)		(10		%)
Grant income			232,184				85,378				146,806				>100	%
Gain (loss) on disposal of fixed assets			-				(1,195	)			1,195			(>100		%)
Interest income			160				530				(370	)		(70		%)
Interest expense			(143,800	)			(89,456	)			(54,344	)			61	%
Amortization of debt discount			(729,630	)			-				(729,630	)		(>100		%)
Gain on change in fair value of derivative liability			304,443				-				304,443				>100	%
(Loss) gain on change in fair value of warrant liability			27,842				4,872				22,970			(>100		%)
Total Other Income (Expenses)			(308,801	)			129				(308,930	)		(>100		%)
Net Loss			(5,409,791	)			(5,868,578	)			458,787			(8		%)

Revenues

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

Operating Expenses

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

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Research and Development Expenses

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

		Three Months Ended September 30,
		2025				2024				Change
		$				$				$
Personnel expenses			1,292,755				1,694,457				(401,702	)
Stock-based compensation			52,440				49,643				2,797
Direct research and development expenses			488,335				984,541				(496,206	)
Other research and development			188,776				464,762				(275,986	)
Depreciation and amortization			263,601				280,379				(16,778	)
Total research and development expenses			2,285,907				3,473,782				(1,187,875	)

General and Administrative Expenses

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

		Three Months Ended September 30,
		2025				2024				Change
		$				$				$
Personnel expenses			1,102,526				994,909				107,617
Stock-based compensation			425,220				217,334				207,886
Legal and professional fees			790,894				260,586				530,308
Other general and administrative			125,788				302,663				(176,875	)
Depreciation and amortization			39,365				40,371				(1,006	)
Total general and administrative expenses			2,483,793				1,815,863				667,930

Sales and Marketing Expenses

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

		Three Months Ended September 30,
		2025				2024				Change
		$				$				$
Personnel expenses			607,553				693,690				(86,137	)
Stock-based compensation			131,507				56,562				74,945
Direct marketing and professional fees			213,364				291,268				(77,904	)
Depreciation and amortization			6,143				12,064				(5,921	)
Total sales and marketing expenses			958,567				1,053,584				(95,017	)

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Other Income (Expenses)

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

Net Loss

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

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

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

		Nine Months Ended September 30,
		2025				2024				Change				Change
		$				$				$				%
Service			366,150				155,713				210,437				>100	%
Product			914,200				886,141				28,059				3	%
Total Revenues			1,280,350				1,041,854				238,496				23	%
Research and development			7,613,228				11,819,106				(4,205,878	)		(36		%)
General and administrative			7,667,909				6,353,647				1,314,262				21	%
Sales and marketing			2,919,400				4,112,731				(1,193,331	)		(29		%)
Total Operating Expenses			18,200,537				22,285,484				(4,084,947	)		(18		%)
Grant income			429,411				85,378				344,033				>100	%
Loss on disposal of fixed assets			330				(34,693	)			35,023			(>100		%)
Interest income			478				9,634				(9,156	)		(95		%)
Interest expense			(363,825	)			(247,871	)			(115,954	)			47	%
Amortization of debt discount			(1,054,935	)			-				(1,054,935	)		(>100		%)
Gain on change in fair value of derivative liability			723,124				-				723,124				>100	%
Gain (loss) on change in fair value of warrant liability			(14,884	)			30,424				(45,308	)		(>100		%)
Total Other Income (Expenses)			(280,301	)			(157,128	)			(123,173	)			78	%
Net Loss			(17,200,488	)			(21,400,758	)			(4,200,270	)		(20		%)

Revenues

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

Operating Expenses

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

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Research and Development Expenses

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

		Nine Months Ended September 30,
		2025				2024				Change
		$				$				$
Personnel expenses			4,506,754				5,986,037				(1,479,283	)
Stock-based compensation			177,248				212,217				(34,969	)
Direct research and development expenses			1,542,583				3,822,868				(2,280,285	)
Other research and development			601,716				980,462				(378,746	)
Depreciation and amortization			784,927				817,522				(32,595	)
Total research and development expenses			7,613,228				11,819,106				(4,205,878	)

General and Administrative Expenses

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

		Nine Months Ended September 30,
		2025				2024				Change
		$				$				$
Personnel expenses			3,433,045				3,253,311				179,734
Stock-based compensation			1,363,968				512,096				851,872
Legal and professional fees			2,107,465				1,433,252				674,213
Other general and administrative			646,599				1,030,511				(383,912	)
Depreciation and amortization			116,832				124,477				(7,645	)
Total general and administrative expenses			7,667,909				6,353,647				1,314,262

Sales and Marketing Expenses

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

		Nine Months Ended September 30,
		2025				2024				Change
		$				$				$
Personnel expenses			2,078,947				3,150,406				(1,071,459	)
Stock-based compensation			331,371				218,492				112,879
Direct marketing and professional fees			484,297				707,474				(223,177	)
Depreciation and amortization			24,785				36,359				(11,574	)
Total sales and marketing expenses			2,919,400				4,112,731				(1,193,331	)

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Other Income (Expenses)

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

Net Loss

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

Going Concern

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

Off-Balance Sheet Arrangements

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

Future Financings

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

Critical Accounting Policies and Estimates

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

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

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

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

Recently Issued Accounting Pronouncements

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

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