Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

ITEM 2. 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 is 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 such 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 with a particular focus on lung cancer.
	·	Capture-Seq™/ Capture-PCR™ - 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.

There are several routes to market, including (1) licensing, (2) leveraging our existing CE-marked Nu.Q^® NETs test, and (3) rolling out the Nu.Q^® Lung cancer test:

1. Licensing

We are partnering with established diagnostic companies and liquid biopsy companies to market, sell, and process our tests, leveraging their networks and expertise. In the human space we have agreements with Werfen, Hologic and Revvity. In the veterinary space, we have agreements with Antech, IDEXX and Fujifilm Vet Systems, as well as a number of country-specific distributors.

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We believe that, given the global prevalence of cancer and diseases associated with NETosis, and the low-cost, accessible and routine nature of our tests, subject to clinical validation, regulatory authorization, and successful commercialization, our tests have the potential for use in markets worldwide.

We aim to remain an intellectual property 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).

Human

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

Also in September 2025, Volition signed an agreement with Hologic Diagenode (NASDAQ: HOLX) or Hologic, for the co-marketing of Volition's Nu.Q^® Discover service. Under the agreement, Hologic will co-market Nu.Q^® Discover services to 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 agreed upon terms. The intention of this agreement is to expand customer access to our proprietary Nu.Q^® Discover assays.

We are in various stages of active discussions with approximately ten leading diagnostics and liquid biopsy companies for both Nu.Q® and Capture-Seq™, including ongoing technology evaluations, however, there is no guarantee such discussions will result in executed agreements.

Veterinary

On March 28, 2022, we 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 and a $13.0 million payment based on the achievement of two milestones. Volition is eligible to receive up to an additional $5.0 million upon the achievement of a final milestone, which will occur on the earlier of: (i) the first commercial sale by or on behalf of Heska of a screening or monitoring test for lymphoma in felines, or (ii) 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 of the 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.

In October 2022, we entered into a licensing and supply agreement with IDEXX. 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 distributors, the Veterinary Pathology Group and Nationwide Laboratories. In July 2024, we launched the Nu.Q® Vet Cancer Test in Japan with Fujifilm Vet Systems. As of June 30, 2026, the Nu.Q^® Vet Cancer Test is available in over twenty countries.

In March 2025, we signed the first ever Nu.Q^® Vet Cancer Test Automation Agreement with Fujifilm Vet Systems to include Volition's ChLIA version of the test via the Immunodiagnostic Systems or IDS i10^® automated analyzer platform, for a five year initial term. Fujifilm Vet Systems is expected to be among the first in the world to utilize this centralized lab automation for the Nu.Q^® Vet Cancer Test which will enable a more rapid turnaround and high throughput to meet increasing demands.

2. Leverage our existing CE-marked Nu.Q^® NETs test

The second prong of our strategy is to leverage our granted CE mark, which has been approved in the EU for any NETs related diseases. Our ChLIA version of the CE-marked Nu.Q^® NETs Test is via the IDS-i10TM automated analyzer platform from Immunodiagnostic Systems, a subsidiary of Revvity. Our aim is to sell this product, either directly or in conjunction with Immunodiagnostic Systems, to institutions for use in a wide range of clinical applications where NETosis plays a critical role. In a significant commercial milestone, we recorded our first revenue from sales of our CE-Marked Nu.Q^® NETs automated product in Europe in the first quarter of 2025. This is the first revenue generated from a regulated clinically approved product. As of June 30, 2026, we have 12 hospital clients evaluating our Nu.Q^® NETs test for a range of diseases.

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In collaboration with Revvity, we aim to submit a reimbursement application for the Nu.Q^® NETs test in 2026.

3. Roll-out the Nu.Q^® Lung Cancer test

In the November 2025, we received our first order for the Nu.Q^® Cancer assays for clinical certification ahead of routine clinical use in lung cancer and in January 2026 were delighted to announce that preparation of the reimbursement submission is underway, actively supported by the Hospices Civils de Lyon, France's second largest university hospital system and two other French institutions. Reimbursement will be a major milestone for Volition in the commercialization and licensing of Nu.Q^® in the human cancer field. Once achieved, we anticipate the introduction into routine clinical use in France by the fourth quarter of 2026.

Liquidity and Capital Resources

We have financed our operations since inception primarily through private placements and public offerings of our common stock. As of June 30, 2026, we had cash and cash equivalents of approximately $2.8 million.

Net cash used in operating activities was $10.4 million for the six-months ended June 30, 2026 and $10.6 million for the six-months ended June 30, 2025, respectively. The decrease in cash used in operating activities for the period ended June 30, 2026 when compared to the same period in 2025 can mainly be attributed to reduced personnel expenditure.

Net cash used in investing activities was $0.0 million and $0.1 million for the six-months ended June 30, 2026 and June 30, 2025, respectively. The slight decrease was due to reduced purchases of laboratory equipment in the period ended June 30, 2026, as compared to the same period in the prior year.

Net cash provided by financing activities was $12.6 million for the six-months ended June 30, 2026 and net cash provided by financing activities was $9.3 million for the comparable period ended June 30, 2025. The increase in cash provided by financing activities for the period ended June 30, 2026 when compared to same period in 2025 was primarily due to (i) $1.9 million in cash received, before deducting offering expenses of $0.1 million, from the issuance and sale of shares of common stock and warrants in a registered direct offering that closed in January 2026, (ii) $4.6 million in cash raised through Maxim, before deducting offering expenses of $0.3 million, from the issuance and sale of shares of common stock, warrants, and pre-funded warrants in an offering that closed in June 2026, and (iii) $6.6 million in net cash received from the issuance of shares of common stock under our "at-the-market" facility during the period ended June 30, 2026 compared to (x) $2.4 million in cash, before deducting offering expenses of $0.1 million from the issuance and sale of shares of common stock and warrants in a registered direct offering that closed in March 2025 (the "March 2025 RDO"), (y) $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 in May 2025, (z) $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 acting as exclusive placement agent, (iv) $0.2 million in net proceeds received from the issuance and sale of 321,562 shares of common stock under our Capital On DemandTM Sales Agreement (the "2025 ATM Sales Agreement") with JonesTrading Institutional Services, LLC ("JonesTrading") during the six-months ended June 30, 2025, and (v) $0.3 million in net cash received from the issuance of shares of common stock under our "at-the-market" facility with JonesTrading during the six-months ended June 30, 2025.

For additional information on our "at the market facility," and the March 2025 RDO, refer to Note 6, Common Stock - Equity Distribution Agreement and - 2025 Equity Capital Raise, 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 June 30, 2026.

Approximate Payments (Including Interest) Due by Year
		Total				2026				2027 - 2030				Greater than 5 years
Description		$				$				$				$
Financing lease liabilities			360,740				30,702				245,621				84,417
Operating lease liabilities and short-term lease			400,546				144,198				256,348				-
Grants repayable			562,862				102,040				330,211				130,611
Long-term debt			8,551,208				1,139,483				6,736,891				674,834
Collaborative agreements obligations			1,103,820				1,103,820				-				-
Convertible Notes			5,773,333				3,300,000				2,473,333				-
Total			16,752,509				5,820,243				10,042,404				889,862

We intend to use our cash reserves to predominantly fund long term debt, lease liabilities, 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, 2025, 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 June 30, 2026 and June 30, 2025

The following table sets forth our results of operations for the three-months ended June 30, 2026 and June 30, 2025.

		Three Months Ended June 30,
		2026				2025				Change				Change
		$				$				$				%
Services			-				161,778				(161,778	)		(<100)		%
Product			398,657				244,910				153,747				63	%
Total Revenues			398,657				406,688				(8,031	)		(2)		%
Research and development			1,800,656				2,720,207				(919,551	)		(34)		%
General and administrative			2,205,471				2,940,754				(735,283	)		(25)		%
Sales and marketing			548,513				1,043,534				(495,021	)		(47)		%
Total Operating Expenses			4,554,640				6,704,495				(2,149,855	)		(32)		%
Operating Loss			(4,155,983	)			(6,297,807	)			2,141,824			(34)		%
Grant income (loss)			(45,914	)			75,991				(121,905	)		(<100)		%
Gain on disposal of fixed assets			341				330				11				3	%
Interest income			163				160				3				2	%
Interest expense			(740,388	)			(123,356	)			(617,032	)			>100	%
Amortization of debt discount			(405,068	)			(325,305	)			(79,763	)			25	%
Gain (loss) on change in fair value of derivative liability			(1,374,076	)			418,681				(1,792,757	)		(<100)		%
Gain (loss) on change in fair value of warrant liability			1,162				(62,764	)			63,926			(<100)		%
Loss on extinguishment of debt			(595,500	)			-				(595,500	)		(<100)		%
Total Other Income (Expenses)			(3,159,280	)			(16,263	)			(3,143,017	)		(<100)		%
Net Loss			(7,315,263	)			(6,314,070	)			(1,001,193	)			16	%

Revenues

Our operations are transitioning from a research and development stage to a commercialization stage. Revenues during the three-months ended June 30, 2026 were $0.4 million, compared with $0.4 million for the three-months ended June 30, 2025. The main source of revenue during the three-months ended June 30, 2026 and June 30, 2025 was product revenues from sales of the Nu.Q^® Vet Cancer Test and the Nu.Q^® Discover kits. Revenue remained flat year over year, driven by steady product sales and consistent demand in deferred revenue recognition for the Nu.Q^® Vet Cancer Test related to the Heska agreement. Services revenue related solely to Nu.Q^® Discover services for which revenue recognition is dependent on client project delivery schedules.

Operating Expenses

Total operating expenses decreased to $4.6 million for the three-months ended June 30, 2026 from $6.7 million for the three-months ended June 30, 2025, as a result of the factors described below.

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Research and Development Expenses

Research and development expenses decreased to $1.8 million from $2.7 million for the three-months ended June 30, 2026, and June 30, 2025, respectively. This decrease was primarily related to reduced personnel expenses partly from reduced headcount together with the release of bonus provisions and lower stock-based compensation and by lower direct research and development costs. The number of full-time equivalent ("FTE") personnel we employed in this division decreased by 12 to 36 compared to the prior year period.

		Three Months Ended June 30,
		2026				2025				Change
		$				$				$
Personnel expenses			967,603				1,583,095				(615,492	)
Stock-based compensation			8,670				61,069				(52,399	)
Direct research and development expenses			383,349				581,473				(198,124	)
Other research and development			230,868				231,496				(628	)
Depreciation and amortization			210,166				263,074				(52,908	)
Total research and development expenses			1,800,656				2,720,207				(919,551	)

General and Administrative Expenses

General and administrative expenses decreased to $2.2 million from $2.9 million for the three-months ended June 30, 2026, and June 30, 2025, respectively. The reduction is due to lower personnel expenses partly from reduced headcount, the release of bonus provisions and reduced stock-based compensation, partially offset by higher legal and professional fees during the period. The FTE personnel number within this division decreased by 6 to 13 compared to the prior year period.

		Three Months Ended June 30,
		2026				2025				Change
		$				$				$
Personnel expenses			493,459				1,209,654				(716,195	)
Stock-based compensation			186,377				575,691				(389,314	)
Legal and professional fees			1,152,065				831,306				320,759
Other general and administrative			341,055				285,464				55,591
Depreciation and amortization			32,515				38,639				(6,124	)
Total general and administrative expenses			2,205,471				2,940,754				(735,283	)

Sales and Marketing Expenses

Sales and marketing expenses decreased to $0.5 million from $1.0 million for the three-months ended June 30, 2026, and June 30, 2025, respectively. The decrease was primarily due to lower personnel expenses partly from reduced headcount together with the release of bonus provisions and reduced stock-based compensation. The FTE personnel number within this division decreased by 3 to 8 compared to the prior year period.

		Three Months Ended June 30,
		2026				2025				Change
		$				$				$
Personnel expenses			350,234				679,640				(329,406	)
Stock-based compensation			42,957				175,287				(132,330	)
Direct marketing and professional fees			153,905				181,175				(27,270	)
Depreciation and amortization			1,417				7,432				(6,015	)
Total sales and marketing expenses			548,513				1,043,534				(495,021	)

Operating Loss

For the three-months ended June 30, 2026, the Company's operating loss was $4.2 million, a reduction of approximately $2.1 million or 34% in comparison to an operating loss of $6.3 million for the three-months ended June 30, 2025. The improved result was primarily the result of the reduction in operating expenses related to research and development, general and administrative, and sales and marketing expenses, as described above.

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Other Income (Expenses)

For the three-months ended June 30, 2026, the Company's other expense was $3.2 million compared to $0.0 million for the three-months ended June 30, 2025. This increase in other expenses reflected non-cash accounting charges related to certain convertible notes issued to Lind Global Asset Management XII LLC (the "Lind Notes") for amortization of debt discount, loss on change in fair value of derivative liability, mandatory default amount on such notes payable and loss on extinguishment of debt during the three-months period ended June 30, 2026.

Net Loss

For the three-months ended June 30, 2026, the Company's net loss was $7.3 million, an increase of approximately $1.0 million in comparison to a net loss of $6.3 million for the three-months ended June 30, 2025. The change was a result of the factors described above.

Comparison of the Six Months Ended June 30, 2026 and June 30, 2025

The following table sets forth our results of operations for the six-months ended June 30, 2026 and June 30, 2025:

		Six Months Ended June 30,
		2026 $				2025 $				Change $				Change %
Services			58,949				277,254				(218,305	)		(79)		%
Product			1,324,784				375,819				948,965				>100	%
Total Revenues			1,383,733				653,073				730,660				112	%
Research and development			4,652,907				5,327,321				(674,414	)		(13)		%
General and administrative			4,858,283				5,184,116				(325,833	)		(6)		%
Sales and marketing			1,400,214				1,960,833				(560,619	)		(29)		%
Total Operating Expenses			10,911,404				12,472,270				(1,560,866	)		(13)		%
Operating Loss			(9,527,671	)			(11,819,197	)			2,291,526			(19)		%
Grant income			74,617				197,227				(122,610	)		(62)		%
Gain on disposal of fixed assets			2,101				330				1,771				>100	%
Interest income			179				318				(139	)		(44)		%
Interest expense			(866,230	)			(220,025	)			(646,205	)		(<100)		%
Amortization of debt discount			(855,202	)			(325,305	)			(529,897	)		(<100)		%
Gain (loss) on change in fair value of derivative liability			(1,277,758	)			418,681				(1,696,439	)		(<100)		%
Gain (loss) on change in fair value of warrant liability			14,578				(42,726	)			57,304			(<100)		%
Loss on extinguishment of debt			(1,583,434	)			-				(1,583,434	)		(<100)		%
Total Other Income (Expenses)			(4,491,149	)			28,500				(4,519,649	)		(<100)		%
Net Loss			(14,018,820	)			(11,790,697	)			(2,228,123	)			19	%

Revenues

Our operations are transitioning from a research and development stage to a commercialization stage. Revenues during the six-months ended June 30, 2026 were $1.4 million, compared with $0.7 million for the six-months ended June 30, 2025. Our main source of revenue during the six-months ended June 30, 2026 and six-months ended June 30, 2025 was product revenues from sales of the Nu.Q^® Vet Cancer Test and the Nu.Q^® Discover kits. The year-over-year increase can be attributed to increased product sales and an increase in deferred revenue recognition for the Nu.Q^® Vet Cancer Test related to our agreement with Heska. This resulted from a catch-up of deferred revenue recognition of approximately $0.7 million in the six-months period, reflecting an updated forecast in line with our accounting policy. Services revenue related solely to Nu.Q^® Discover services is dependent on client project delivery schedules.

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Operating Expenses

Total operating expenses decreased to $10.9 million from $12.5 million for the six-months ended June 30, 2026 and June 30, 2025, respectively, as a result of the factors described below.

Research and Development Expenses

Research and development expenses decreased to $4.7 million for the six-months ended June 30, 2026, from $5.3 million for the six-months ended June 30, 2025. This decrease was primarily related to reduced personnel expenses partly from reduced headcount together with the release of bonus provisions and reduced stock-based compensation This was partially offset by increased direct research and development expenses. The FTE personnel number decreased by 12 to 36 compared to the prior year period.

		Six Months Ended June 30,
		2026				2025				Change
		$				$				$
Personnel expenses			2,542,464				3,213,999				(671,535	)
Stock-based compensation			23,686				124,807				(101,121	)
Direct research and development expenses			1,293,961				1,054,249				239,712
Other research and development			353,894				412,970				(59,076	)
Depreciation and amortization			438,902				521,296				(82,394	)
Total research and development expenses			4,652,907				5,327,321				(674,414	)

General and Administrative Expenses

General and administrative expenses decreased to $4.9 million from $5.2 million for the six-months ended June 30, 2026 and June 30, 2025, respectively. The reduction was due to lower personnel expenses partly from reduced headcount together with the release of bonus provisions and reduced stock-based compensation partially offset by legal and professional fees and other general costs during the period. The FTE personnel number decreased by 6 to 13 compared to the prior year period.

		Six Months Ended June 30,
		2026				2025				Change
		$				$				$
Personnel expenses			1,487,804				2,330,519				(842,715	)
Stock-based compensation			353,232				938,748				(585,516	)
Legal and professional fees			2,094,388				1,316,571				777,817
Other general and administrative			856,588				520,811				335,777
Depreciation and amortization			66,271				77,467				(11,196	)
Total general and administrative expenses			4,858,283				5,184,116				(325,833	)

Sales and Marketing Expenses

Sales and marketing expenses decreased to $1.4 million compared to $2.0 million for the six-months ended June 30, 2026 and June 30, 2025. The reduction is due to lower personnel expenses partly from reduced headcount together with the release of bonus provisions and reduced stock-based compensation. The FTE personnel number decreased by 3 to 8 compared to the prior year period.

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		Six Months Ended June 30,
		2026				2025				Change
		$				$				$
Personnel expenses			991,463				1,471,394				(479,931	)
Stock-based compensation			86,067				199,864				(113,797	)
Direct marketing and professional fees			317,191				270,933				46,258
Depreciation and amortization			5,493				18,642				(13,149	)
Total sales and marketing expenses			1,400,214				1,960,833				(560,619	)

Operating Loss

For the six-months ended June 30, 2026, the Company's operating loss was approximately $9.5 million in comparison to an operating loss of $11.8 million for the six-months ended June 30, 2025. The improved result was the result of the higher revenues, up 112% over prior year, and the reduction in operating expenses, down 13% over prior year, as described above.

Other Income(Expenses)

For the six-months ended June 30, 2026, the Company's other expenses were $4.5 million compared to other income of $0.0 million for the six-months ended June 30, 2025. This increase in other expenses reflected non-cash accounting charges related to the Lind Notes for amortization of debt discount, loss on change in fair value of derivative liability, mandatory default amount on convertible notes payable and loss on extinguishment of debt.

Net Loss

For the six-months ended June 30, 2026, the Company's net loss was approximately $14.0 million in comparison to a net loss of $11.8 million for the six-months ended June 30, 2025. The change was a result of the factors described above.

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 program" under our Capital On Demand^TM Sales Agreement with Jones Trading Institutional Services, LLC, refer to Note 6, Common Stock - 2025 ATM Sales Agreement of the notes to the condensed consolidated financial statements included within this Report. 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, or 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, which involves a significant level of estimation uncertainty.

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.

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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.