Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes .[   ] No X. [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes .[   ] No X. [X]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes X. [X] No .[   ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes X. [X] No .[   ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. .

[X] 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”filer,” “smaller reporting company” and “smaller reporting“emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [   ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes .[   ] No X. [X]

As of June 30, 2015,2017, the last trading day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the voting common stock held by non-affiliates of the registrant was $50,777,898$72,868,822 (based upon the $3.95$3.54 per share closing price for shares of the registrant’s common stock as reported by the NYSE MKT,American on June 30, 2015, the last trading date of the registrant’s most recently completed second fiscal quarter)such date). This calculation does not reflect a determination that persons deemed to be affiliates for this purpose are affiliates for any other purpose.

As of March 11, 2016,February 27, 2018, there were approximately 18,863,27226,530,793 shares of the registrant’s common stock, $0.001 par value per share, outstanding.

Documents incorporated by reference: None

Table of Contents

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K for the fiscal year ended December 31, 2015,2017, which we refer to as this report, contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which statements are subject to considerable risks and uncertainties. These forward-looking statements are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this report or incorporated by reference into this report are forward-looking statements. Throughout this report, we have attempted to identify forward-looking statements by using words such as “may,” “believe,” “will,” “could,” “project,” “anticipate,” “expect,” “estimate,” “should,” “continue,” “potential,” “plans,” “forecasts,” “goal,” “aim,” “seek,” “intend,” other forms of these words or similar words or expressions or the negative thereof (although not all forward-looking statements contain these words). In particular, forward looking statements contained in this report relate to, among other things, any predictions of earnings, revenues, expenses or other financial items; plans or expectations with respect to our development activities or business strategy;strategy, including commercialization and market acceptance; statements concerning industry trends;trends and industry size; statements regarding anticipated demand for our products and market opportunity, or the products of our competitors,competitors; statements relating to manufacturing forecasts, and the potential impact of our relationship with contract manufacturers and original equipment manufacturers on our business; assumptions regarding the future cost and potential benefits of our research and development efforts; the effect of critical accounting policies; forecasts of our liquidity position or available cash resources; statements relating to the impact of pending litigation; and statements relating to the assumptions underlying any of the foregoing.

We have based our forward-looking statements on our current expectations and projections about trends affecting our business and industry and other future events. Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. Forward-looking statements are subject to substantial risks and uncertainties that could cause our future business, financial condition, results of operations or performance, to differ materially from our historical results or those expressed or implied in any forward-looking statement contained in this report. We discuss these risks and uncertainties in greater detail in the section entitled “Risk Factors” in Part I, Item 1A of this report, and the other documents that we have filed with the Securities and Exchange Commission, or the SEC.

In addition, actual results may differ as a result of additional risks and uncertainties of which we are currently unaware or which we do not currently view as material to our business. For these reasons, readers are cautioned not to place undue reliance on any forward-looking statements.

You should read this report in its entirety, the documents that we file as exhibits to this report and the documents that we incorporate by reference into this report, with the understanding that our future results may be materially different from what we currently expect. The forward-looking statements we make speak only as of the date on which they are made. We expressly disclaim any intent or obligation to update any forward-looking statements after the date hereof to conform such statements to actual results or to changes in our opinions or expectations. If we do update or correct any forward-looking statements, readers should not conclude that we will make additional updates or corrections.

Use of Terms

Except as otherwise indicated by the context, references in this report to “Company,” “VolitionRx,“VolitionRX,” “Volition,” “we,” “us”, “our” and “VNRX”“our” are references to VolitionRxVolitionRX Limited and its wholly-owned subsidiaries, Singapore Volition Pte. Ltd,Limited, Belgian Volition S.A.,SPRL, Hypergenomics Pte Ltd. andPte. Limited, Volition Diagnostics UK Limited.Limited and Volition America, Inc. Additionally, unless otherwise specified, all references to “USD,” “United States Dollars” or “$” refer to the legal currency of the United States of America.

Nucleosomics^®, NuQNu.Q^®TM and HyperGenomicsHypergenomics^® and their respective logos are trademarks and/or service marks of VolitionRx LimitedVolitionRX and its subsidiaries. All other trademarks, service marks and trade names referred to in this report are the property of their respective owners.

1

PART I

ITEM 1.BUSINESS

BUSINESS

Corporate HistoryOverview

The Company was incorporated on September 24, 1998 in the State of Delaware under the name “Standard Capital Corporation”. On September 22, 2011, the Company filedVolitionRX is a Certificate for Renewal and Revival of Charter with the Secretary of State of Delaware. Pursuant to Section 312(1) of Delaware General Corporation Law, the Company was revived under the new name of “VolitionRx Limited”. The Company acquired its wholly-owned operating subsidiary, Singapore Volition Pte Limited, a Singapore registered company, or Singapore Volition, on October 6, 2011. Singapore Volition has two subsidiaries, Belgian Volition SA, a Belgium registered company, or Belgian Volition, which it acquired on September 22, 2010, and HyperGenomics Pte Limited, a Singapore registered company, or HyperGenomics, which it formed on March 7, 2011. Belgian Volition has one subsidiary, Volition Diagnostics UK Limited, which it formed on November 13, 2015.

Our principal executive office is located at 1 Scotts Road, #24-05 Shaw Centre, Singapore 228208. Our telephone number is +1 (646) 650-1351. Our website is located atwww.volitionrx.com. The information that can be accessed through our website is not incorporated by reference into this Annual Report on Form 10-K and should not be considered to be a part hereof.

BUSINESS

Description of Our Business

We are a clinical-stagemulti-national life sciences company focused on developing blood-based diagnostic tests that meet the need for accurate, fast,simple, easy to use, cost effective blood tests to help diagnose a range of cancers. We hope that through earlier diagnosis we can help save and scalableimprove the quality of many people’s lives throughout the world.

Our Solution/ Science

Our tests for detectingare based on the science of Nucleosomics^®, which is the practice of identifying and diagnosingmeasuring nucleosomes in the bloodstream or other bodily fluid - an indication that disease is present.

The principle behind what we are doing relies on bringing together two main lines of research and is, in concept, very simple: the chromosomes of cancer cells differ from those of healthy cells – both in terms of DNA sequence (due to genetic cancer mutations) and otherin protein structure - due to epigenetic changes. There are chromosome fragments from dead cancer cells circulating in the blood as nucleosomes. Each such circulating nucleosome contains a small (approx. 140bp) fragment of tumor DNA.

Our Nucleosomics technology exploits the different compositions of circulating nucleosome structures present in the serum of cancer patients to detect and identify cancer diseases.

We have developed twenty eight blood-baseda novel suite of blood assays for epigenetically altered circulating nucleosomes as biomarkers in cancer. Nu.Q^TMproducts are simple, low-cost, ELISA platform tests and can incorporate other off-patent, low-cost ELISA tests in our panels (e.g. CEA, PSA, CA125) for higher accuracy.

Many companies and medical schools are developing circulating tumor DNA, or ctDNA, tests based on sequencing the DNA attached to datethese nucleosomes.

Our diagnostic target in the blood is the same tumor chromosome fragment, but our approach is to detect specific biomarkers that can be used individually or in combination to generate a profile which forms the basis of a test for a particular cancer or disease. We intend to commercialize our productschromosome protein and nucleic acid changes in intact chromosome fragments by ELISA, rather than chemically extracting, amplifying, and sequencing the future through various channels within the European Union, the United StatesctDNA and throughoutdiscarding the rest of the world likely beginning with China and India.

We are developing blood-based diagnostics fornucleosome. ELISA is possible because the most prevalent cancers, beginning with colorectal, lung, and pancreatic cancer, using our Nucleosomics^® biomarker discovery platform. The platform employs a range of simple NuQ^® immunoassays on an industry standard ELISA format, which allows rapid quantification of epigenetic changes in biofluids (whole blood, plasma, serum, sputum, urine etc.) compared to other approaches such as bisulfite conversion and polymerase chain reaction, or PCR. NuQ^® biomarkers can be used alone, or in combination to generate profiles related to specific conditions. The first tranche of data released from a large independent trial for colorectal cancer could, if carried through into our screening or symptomatic trials, potentially have a positive impact for broad scale, cost effective, cancer diagnostics. According to available data from the Organisation for Economic Co-operation and Development, this could be of significant benefit to the approximately 148 million 50-74 year olds in the European Union alone that the European Union recommends are screened for colorectal cancer. ¹

We anticipate that because of their ease of use and cost efficiency, our tests have the potential to become the first method of choice for cancer diagnostics, allowing detection of a range of cancers at an earlier stage than typically occurs currently, and testing of individuals who, for reasons such as time, cost or aversion to current methods, are not currently tested. We believe our blood test for colorectal cancer has the potential to have significantly higher compliance from patients compared to fecal tests and colonoscopies which are invasive and/or unpleasant.

We undertook our early trials in Europe given that our laboratories are based in Belgium and that we have strong relationships with world class collaborators. Hvidovre Hospital in Denmark has given us access to 4,800 previously collected samples from patients for our retrospective symptomatic colorectal trial and a further 14,000 samples are being collected over 24 months from August 2014, from patients for our prospective screening colorectal trial. All research and development operations are currently in Belgium due to its favorable environment for small companies including a well-trained technical work force, low cost quality research facilities and access to government support, including our funding from the Walloon Region.

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¹ European guidelines for quality assurance in colorectal cancer screening and diagnosis; first Ed. Segnan N, Patnick J, von Karsa L (eds), 2010

In 2015, we decided to completely focus our efforts on the clinical in-vitro diagnostics, or IVD, market, where products are used for patient diagnosis and can only be accessed after a test has either been approved for clinical use in the United States by the United States Food and Drug Administration, or the FDA, or for risk assessment as a Laboratory Developed Test, or LDT, in the United States under a Clinical Laboratory Improvement Amendments, or CLIA, waiver. A similar system operates in China through the Chinese Food and Drug Administration, or CFDA. In the European Union, approval is obtained by declaration and marking that the test conforms to the essential requirements of the relevant European health, safety and environmental protection legislation, or CE Marking. The CE Mark is also recognized in certain Asian territories including India for the private payer market.

We obtained our first CE Mark certification in September 2015, for a single biomarker for colorectal cancer, or CRC, and plan to certify two new biomarkers quarterly in 2016 as well as our symptomatic diagnostic panel test for CRC. We expect that we will be required to do further United States trials to achieve FDA approval for our CRC test both as an adjunct test as a 510(k) application and under a Premarket Approval, or PMA, as a screening test . We are committed to filing for FDA approval to allow patient access to our tests in the United States as soon as practicable. We intend to begin 510(k) purposed U.S. based trials in 2016 and pursue FDA clearance as an adjunct test in 2017 for CRC and for lung and pancreatic cancer in 2018. We intend to begin PMA purposed U.S. based trials in 2016 or 2017 and pursue FDA approval upon completion.

We also expect that we will be required to do trials in China to achieve CFDA approval for our lung cancer test, provided we can ensure adequate protection of our intellectual property in China. Local validation studies will be required to support sales of our CE Marked colorectal cancer test in India for the private payer market. We plan to seek distribution partners for the major Asian markets in 2016.

Our Nucleosomics^® biomarker platform is a technology that can be used for a wide variety of cancers. We are currently developing Nucleosomics^® tests for a number of major cancers including colorectal, pancreatic, lung and aggressive prostate. We have one trial underway in the United States with MD Anderson Cancer Center in Texas, to establish the efficacy of Nucleosomics^® in a precision medicine application to differentiate between the more aggressive anaplastic prostate cancer, and the typical, less-aggressive castration resistant prostate cancer. We are also validating the usetargets of our tests for early diagnosisoccur globally across all nucleosomes within a tumor cell, whereas individual ctDNA changes must be identified within the three billion base-pair genomes. This means that the targets of endometriosis,our tests are exponentially more prevalent in circulating blood, and detectable using simple laboratory methods.

How is Nu.Q different from ctDNA?

When a benign but often debilitating condition,cancer cell dies the nuclear components are metabolized into 20 million individual DNA-Nu complexes and the leading cause of admissions to hospital for abdominal pain. Endometriosis affects approximately 10% of women and is a leading cause of female infertility ². At present, there are no non-surgical diagnostic tests for endometriosis.

The Market

Cancer isreleased into circulation. A cancer mutation will occur in one of the leading causes of death worldwide, accounting for around 8.2DNA-Nu complexes. 

ctDNA sequencing methods (in development) must target that one-in-20 millionDNA-Nu complexes.  

Nu.Q^TM targets all 20 million annual deathscirculating DNA-Nu complexes because nucleosome modifications occur globally.

Nu.Q³ In the United States alone, there were an estimated 13.8 million cancer survivors in 2010.⁴ By 2020, this figure is expected to rise to 18.1 million. The Agency for Healthcare research and Quality, or AHRQ, estimated the health economic burden for cancer relating to direct medical costs at approximately $88.7 billion for 2011.⁵ The annualized cost of cancer care based on analysis of Medicare payments linked to Surveillance, Epidemiology, and End Results, or SEER, Program data is projected to reach $157 billion at 2020.⁶ These figures are mirrored across the globe and we expect will continue to grow as populations age. This is a large potential addressable market for which we believe diagnostics will be a significant part. Incidence of,simple low-cost ELISA and mortality due to, CRC in the U.S. have been steadily falling since the mid 1980’s with an acceleration of reduction in both men (3% per annum) and women (2.3% per annum) over the last 15 years. This is largely due to early detection and removal of polyps via colonoscopy.⁷ The Pap test has had a similar impact in improving 5-year survival rates in women with precancerous and cancerous cervical lesions.⁸

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² American Society for Reproductive Medicine Fact sheet: Endometriosis - A Guide for Patients [accessed 01/28/2016]

³ Cancer - Fact sheet N°297, World Health Organization, [accessed 01/28/2016]

⁴ Mariotto AB et al., Projections of the cost of cancer care in the United States: 2010-2020. Jan 19, 2011, JNCI, Vol 103, No.2 [accessed 01/28/2016]

⁵ American Cancer Society, Economic Impact of Cancer, 02/06/2015 [accessed 01/28/2016]

⁶ Projections of the cost of cancer care in the United States: 2010-2020 [accessed 01/28/2016]

⁷ American Cancer Society, Colorectal Cancer Facts & Figures 2011-2013 [accessed 01/28/2016]

⁸ National Cancer Institute Fact Sheet: Cervical Cancer Screening (PDQ^®) [accessed 01/28/2016]

Statistically, the chances of surviving cancer are greatly improved by early detection and treatment. However, there are currently very few blood tests for diagnosis of cancer in common clinical use. The only commonly used blood-screening test for any cancer is the Prostate-Specific Antigen, or PSA, test for prostate cancer. We consider the PSA test to have relatively poor diagnostic accuracy (detecting approximately 70% of prostate cancers and misdiagnoses about 30% of healthy men as positive for cancer) but is widely used because it is the best product currently available.⁹ This test is intended to be used to monitor patients after definitive diagnosis or treatment. The American Cancer Society recommends that prostate cancer screening should not occur without an informed decision making process regarding risks.¹⁰ In 2012, the U.S. Preventative Services Task Force recommended against PSA-based screening for healthy men because of a “moderate or high probability” that the service has no benefit or that the harms outweigh the benefits.”¹¹ There are currently no commonly used blood tests for screening for lung, pancreatic or colorectal cancer.

Further, current methods of cancer diagnosis are either invasive, not cost effective, have low acceptance or cannot provide accurate results. The inadequacy of existing diagnostic products means that most cancers are only diagnosed once the patient experiences symptoms and the cancer is well established. By this stage, it will often have spread beyond the primary tumor (metastatic cancers), making it substantially more difficult to treat. For example colorectal cancer is one of the more survivable diseases if caught early: it has an observed five-year survival rate of 92% in stage I, but only 11% in stage IV.¹² We believe that early, non-invasive, accurate cancer diagnosis remains a significant unmet medical need and a huge commercial opportunity. For these reasons, cancer diagnostics is an active field of research and development both academically and commercially.

The global IVD market is forecast to reach $65 billion in 2018,¹³ driven by the increasing health care demands of an aging population. In the United States,¹⁴the IVD market is made up of:

·

Immunochemistry of tissue samples (expected to grow 6.8% per annum from 2011-2018, with an expected value of $25.5 billion by 2018).¹⁵ These are mostly used to confirm cancer diagnosis post-surgery and to determine cancer sub-type;

·

Immunoassay (chemical tests used to detect a substance in blood or body fluid), is expected to be the second largest market with a value of more than $19.1 billion by 2018.¹⁶ These tests are mostly used to monitor for disease progress and relapse. This market segment includes our future Nucleosomics^® products, which will be blood immunoassay tests for modified histones for the diagnosis of cancer.

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⁹ National Cancer Institute Fact Sheet: Prostate-Specific Antigen (PSA) Test, [24 July 2012] [accessed 01/28/2016]

¹⁰ Wolf. Aet. al.American Cancer Society Guideline for the Early Detection of Prostate Cancer: Update 2010, CA: A Cancer Journal for Clinicians; 3 Mar 2010:60;2:70-98 [accessed 01/28/2016]

¹¹ U.S. Preventative Services Task Force, Final Recommendation Statement Prostate Cancer: Screening, May 2012 [accessed 01/28/2016]

¹² American Cancer Society. “Colorectal Cancer survival rates, by stage,” 2014 [accessed 01/28/2016]

¹³Kalorama Report: The Worldwide Market for In Vitro Diagnostic (IVD) Tests, 9th Edition, August 13, 2014 [accessed 01/28/2016]

¹⁴ Kalorama Report: The United States Market for In Vitro Diagnostic Tests

Mar 18, 2014 [accessed 01/28/2016]

¹⁵ GBI Research Report: In Vitro Diagnostics Market to 2018 - Consolidation, Decentralization and Demand for Genetic Testing to Shape the Competitive Landscape, March 23, 2012 [accessed 11.12.2014]

¹⁶ Markets and Markets Report: Immunoassay Market [Technology (Enzyme, Fluorescent, Chemiluminescence, Radioimmunoassay), Analyzers & Reagents, Applications (Infectious Diseases, Cancer, Endocrinology, Cardiology), End Users (Hospitals, Laboratory, Academics)] - Global Forecast to 2019, May, 2015 [accessed 01/28/2016]

Testing is carried out at three principal locations:¹⁷

·

Testing at hospital laboratories: $30 billion annual revenue for eight billioncan incorporate other ELISA tests in 2011;our panels. 

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Testing at CLIA laboratories: $20 billion annual revenue for 3 billion tests in 2011; and

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Testing at physician office laboratories: $3 billion annual revenue for 1.2 billion tests in 2011.

Our Product Candidates

Commercialization of our future products in the clinical IVD market (e.g. for patient diagnosis in hospitals, clinics, etc.), requires government approval (CE Marking in Europe, FDA approval in the United States and/or CFDA approval in China). We obtained our first biomarker CE certification in September 2015 and plan to certify two to three new markers quarterly in 2016. We plan to CE Mark our CRC test panel for Europe in the second half of 2016 for the symptomatic market.

The technology behind the products that we are currently developing is described in detail below:

NuQ^® Suite of Epigenetic Cancer Blood Tests

Using our Nucleosomics^®technology, we have developed twenty eight39 epigenetic NuQ^®Nu.Q assays, which are designed to detect the level and structure of nucleosomes in blood. Epigenetics is the science of how genes are switched “on” or “off” in the body’s cells. A major factor controlling the switching “on” and “off” is the structuring of DNA. The DNA in human cells is packaged as protein complexes in a “beads on a string” structure. Each individual protein/DNA “bead” is called a nucleosome. These nucleosomes then form additional structures with increasingly dense packing, culminating in chromosomes containing hundreds of thousands of nucleosomes.nucleosomes as depicted in Figure 1 below.

2

Figure 1 – A nucleosome

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¹⁷ Kalorama Report: The United States Market for In Vitro Diagnostic Tests Mar 18, 2014 [accessed 01/29/2016]

Cancer is characterized by uncontrolled and often rapid cell growth which exceeds the corresponding rate of cell death. When cells die, the DNA fragments into individual nucleosomes which are released into the blood as illustrated in Figure 2 below. The cell debris in the bloodstream is eventually recycled back into the body. When a cancer is present, the number of dying cells can overwhelm the recycling process, leaving the excess fragments, including the nucleosomes, in the blood. Importantly, the structure of nucleosomes is not uniform but subject to immense variety, and nucleosomes in cancer cells have differences in structure from those in healthy cells.¹⁸

Figure 2 – Release of nucleosomes into blood

Blood nucleosome levels can be raised in conditions other than cancer including in auto-immune disease, inflammatory disease, endometriosis, sepsis, and in the immediate aftermath of major trauma (for example following a heart attack, surgery or car accident). Our primary focus is on cancer diagnosis, but we also intend to pursue diagnostic opportunities in other disease areas.

To dateResearch and Development

We are developing blood-based tests for the most prevalent cancers, beginning with colorectal cancer, or CRC. Following CRC, we have developed twenty eight NuQanticipate focusing on lung cancer, prostate and pancreatic cancer, using our Nucleosomics biomarker discovery platform. Our development pipeline includes assays to be used for symptomatic patients or asymptomatic (screening) populations. The platform employs a range of simple Nu.Q^®immunoassays on an industry standard ELISA format, which allows rapid quantification of epigenetic changes in biofluids (whole blood, assays that fall into the five main types set forth belowplasma, serum, sputum, urine etc.) compared to other approaches such as bisulfite conversion and are intended to complement each other and, together, to provide a total solution.polymerase chain reaction, or PCR.

·

NuQ^®-X: We have developed two blood assays39 blood-based Nu.Qimmunoassays to date to detect specific biomarkers that can be used individually or in combination to generate a profile which forms the basis of a product for a particular cancer or disease.

Research and development expenses increased to $8.9 million for the year ended December 31, 2017 from $7.9 million for the year ended December 31, 2016. This increase in overall research and development expenditures was primarily related to additional costs of $0.5 million due our participation in the NuQ^®-X family to detect13,500 patient trial with the presence of cancer by detecting nucleosomes containing specific nucleotides.

·

NuQ^®-V: We have developed three blood assaysNational Cancer Institute’s Early Detection Research Network in the NuQ^®-V family to detect cancer by detecting nucleosomes containing specific histone variants. Through our research, we have found that the pattern of blood levels of the different types of histone variants in nucleosomes is different for different cancer types.

·

NuQ^®-M: We have developed seventeen blood assays in the NuQ^®-M family to detect cancer by detecting nucleosomes containing modified histones, the proteins that package and order DNA into nucleosomes.

·

NuQ^®-A: We have developed five blood assays in the NuQ^®-A family to detect cancer by detecting nucleosome-protein adducts.

·

NuQ^®-T: We have developed a NuQ^®-T assay to detect cancer by detecting total blood nucleosome levels.

Generally, the tests described above are being developed to work in combination, collectively called the NuQ^® panel, for the IVD market. In our biggest independent clinical trial to date, we have used the NuQ^® panel prototypes to test approximately 4800 samples from patientscollaboration with symptoms associated with colorectal cancer (the “Denmark Trial”). Additionally the NuQ^® panel prototypes have been used to test a small number of blood samples from lung and prostate cancer patients.

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¹⁸ Fraga MF et al., “Loss of acetylation at Lys16 and trimethylation at Lys20 of histone H4 is a common hallmark of human cancer”, Nature Genetics, Vol 37 (4), p391-400, 2005

Figure 3 – Example of lab instrument for running ELISA tests

NuQ^® Clinical Diagnostic Products

There are three basic platforms in the clinical IVD market that we intend to adapt our future NuQ^® products to in the future.

·

Centralized Laboratory Market:Centralized laboratories test thousands of blood samples taken from patients everyday mostly using fully automated enzyme-linked immunosorbent assay, or ELISA, systems, commonly known as random access analyzers, usually supplied by one of the global diagnostics companies. Tests run on ELISA systems use components of the immune system and chemicals to detect immune responses in the body. ELISA systems analyze thousands of blood samples every day and can run dozens of different ELISA tests in any combination on any sample and for many samples simultaneously. The systems are highly automated and rapid (as little as ten minutes for many tests), and can be run at low costs. Additionally, ELISA instruments are used in all major hospitals throughout the United States and Europe and therefore, are well understood by clinicians and laboratory staff. It is more cost-effective and technically simple for hospitals and clinics to run several blood samples simultaneously using ELISA tests compared to non-ELISA tests or alternative methods for screening cancer. All of the NuQ^®tests that we are in the process of developing are designed for ELISA systems. A typical example of an automated ELISA system is shown below in Figure 4.

Figure 4 – Example of an Automated ELISA System

One option that may be available to us in the future is to license our Nucleosomics^® technology to a global diagnostics company. Another option that may be available to us is to sell manual and/or semi-automated 96 well ELISA plates for use by these laboratories. We do not have an anticipated timeframe for licensing our Nucleosomics^® technology or selling ELISA plates to laboratories, although we are actively seeking such relationships worldwide.

·

Point-of-Care Devices: Point-of-care devices are small instruments that perform tens of ELISA tests per day rapidly on blood taken from a finger prick. The instruments can be implemented in any oncology clinic and tests can be performed during patient consultations. We intend to contract with an instrument manufacturer to produce these instruments for point-of-care NuQ^® testing for the oncologist’s office, general doctor’s office or at home testing. We aim to enter the point-of-care clinical market in Europe and the United States about 18 months after launch on the manual platform, as we will first need to adapt test prototypes to these small instruments and demonstrate their success in the greater diagnostics market before these products will be adopted by others in the industry. At this stage of its development, we cannot accurately predict the costs to manufacture these devices or their selling price. As of the date of this report, we have not entered into any discussions or negotiations regarding the manufacture or sale of these devices. See Figure 5 for an example of a point-of-care device.

Figure 5 – Example of a Point-of-Care Device

The above photograph is an illustration of our intended products. To date, we have no products available for sale on the IVD market and there is no guarantee that any such products will be developed or commercialized on such market.

·

Disposable Tests for Doctor’s Office or Home Use: Disposable tests for use in a doctor’s office or at home are single shot disposable devices which can be provided by a clinician as part of a screening program or purchased over the counter at any chemist shop or pharmacy and test a drop of blood taken from a finger prick. The test can be administered at a doctor’s office using a point-of-care device or performed at home using a home testing kit, neither of which requires laboratory involvement. Thus, the patient experiences considerably lower costs using these tests as compared to traditional laboratory tests. The format of the self-use home testing kit is very easy to use and reproduce and does not rely on laboratory processing. There are currently no useful diagnostics tests suitable for mass screening for cancer in general through a simple self-use home testing kit. Figure 6 below shows a basic home use test on the left which displays the results of the test in the two windows, similar to a pregnancy test. The test on the right is more sophisticated and plugs into a meter or the USB port of a computer for analysis and interpretation allowing results to be sent directly to a clinician.

Figure 6 – Examples of Disposable Tests for Doctor’s Office or Home Use

The above photograph is an illustration of our intended products. To date, we have no products available for sale on the IVD market and there is no guarantee that any such products will be developed or commercialized on such market.

We intend to contract with a specialist company to adapt the NuQ^® test prototypes to the doctor’s office or home use system and to contract with a manufacturer for the production of these tests beginning approximately 18 months after launch on the manual platform. We have not entered into any agreements of contracts with a specialist company or manufacturer. Initially, we intend to sell these tests for professional use only (doctor’s office) and to sell the tests for non-professional home use at a later time. We do not yet have an estimated timeframe for entering into this market. Further, at this early stage of our development, we cannot accurately determine the manufacturing costs or selling price of these tests.

NuQ^® tests for non-cancer conditions

Blood nucleosome levels can be raised in conditions other than cancer including in auto-immune disease, inflammatory disease, endometriosis, sepsis, and in the immediate aftermath of major trauma (for example following a heart attack, surgery or car accident). Our primary focus is on cancer diagnosis but we also intend to pursue diagnostic opportunities in other disease areas. Our primary non-cancer focus is the development of a test for endometriosis.

Endometriosis is a progressive gynecological condition that affects one in ten women of childbearing age and approximately 176 million women worldwide. The disease is the leading cause of infertility in women, with up to 40% of all infertile women suffering from endometriosis. At present, there is currently no existing non-surgical diagnostic test for endometriosis. Diagnosis is typically made via invasive and expensive laparoscopy, followed by a histological examination of any lesions found to confirm the diagnosis. The lack of a suitable screening test has also held up development of a cure for the disease.

Singapore Volition acquired the patent application for an endometriosis test in June 2011 and we are now in the process of developing the test based on our existing Nucleosomics^® technology. We designed the test to be a simple blood test taken at two stages of a woman’s menstrual cycle, during menses and partway through the month. If the two measurements show quantitative differences in total nucleosome level, endometriosis is indicated. We are currently conducting hypothesis-testing and clinical proof of concept work (to demonstrate that the test is feasible and is effective) on the endometriosis test in our laboratory. We completed pilot studies of the test in 2012 and received the first samples from The University of Oxford in the first quarter of 2015 as part of a larger endometriosis study. The University of Oxford will provide serum and plasma samples from approximately 350 patients with endometriosis and 150 control patients over a period of two years. Further samples from a prospective serial collection in 20 healthy women and 20 women with confirmed endometriosis will be provided by Clinical Trials Laboratory Services (UK) in the first half of 2016. The test is too early in its development for us to accurately determinate the manufacturing costs and sale price of the test.Michigan.

3

HyperGenomics^®

We are in the process of developing HyperGenomics^® tissue and blood-based tests to determine disease subtype following initial diagnosis and to help decide the most appropriate therapy. We have decided to focus on our clinical IVD Nucleosomics^® products in 2015 and only continue with background work in HyperGenomics^® until we have the capital and management resources to do multiple programs concurrently.

Selecting the correct treatment approach can significantly improve outcome, reduce side effects and deliver cost savings. The HyperGenomics^® tests will be performed on cancer tissue obtained either by biopsy or during surgical resection to determine the cancer subtype and to determine optimal treatment regimens. The HyperGenomics^® profiling tests are being developed to provide detailed epigenetic characterization of tumors in a cost effective way. A new protocol for analyzing white blood cells – a precursor to applications in leukemia - was developed in 2012. We commenced development of a bioinformatics pipeline to analyze the complex data sets generated from the biological samples in 2012 and continued development of the algorithms in 2013. A new in house methodology patents for HyperGenomics^® was filed in 2015.

We realized our first revenue of $50,000 from contract research in 2012. We will allocate resources to the HyperGenomics^® research use only, or RUO, kit as soon as is practical given our focus on the Nucleosomics^® clinical IVD products commencing in 2015. Beta-testing is expected to take approximately six months to complete once initiated and we expect it to cost approximately $50,000. If beta-testing is successful, we expect to launch HyperGenomics^® research kits into the RUO market in Europe and in the United States.

Further exemplification work on the HyperGenomics^® platform is being carried out through a PhD studentship at the German Cancer Centre in Heidelberg funded by Volition. The program includes development of HyperGenomic^® profiles in a range of cells and cancer models and comparison to established industry standard analytical techniques.

We plan to launch the HyperGenomics^® test into the IVD market in Europe and the United States following the commercialization of the test into the RUO market. The estimated timeframe for its launch into the IVD market has not yet been determined and will depend upon the speed of clinical trials and market approval. The HyperGenomics^® test is too early in its development for us to accurately determinate the manufacturing costs and sale price of the test.

Clinical Studies

WeListed below are the major studies we have completed two clinicalunderway in colorectal cancer, pancreatic cancer and a study involving 27 cancers. Further studies in colorectal cancer one study in pancreatic cancer and one study in lung cancer with the results announced as set forth below.

Completed Colorectal Cancer Studies

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Results of a completed clinical study in colorectal cancer were announced in the fourth quarter of 2015. The study included 121 patients referred for colonoscopy at the university hospital, CHU Dinant Godinne - UCL Namur, in Belgium, who either presented with symptoms suggesting the presence of colorectal cancer or were high-risk subjects. Analysis of the results revealed that a panel test of four NuQ^® biomarker assays, adjusted for age, detected 91% of colorectal cancer cases at 90% specificity. In addition, the results showed equally accurate detection of early and late-stage cancers. The analysis also revealed that the same panel test detected 67% of the type of polyps most likely to develop into cancer.

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Results of a completed blinded retrospective clinical study in colorectal adenomas and colorectal cancer in collaboration with Hvidovre Hospital in Denmark were announced in the first quarter of 2016. The primary objective of the study was to identify new nucleosome biomarkers to improve precancerous polyp/adenoma detection. A secondary objective was to identify new nucleosome biomarkers to improve early stage colorectal cancer detection. In the study approximately 430 samples from patients with single or multiple precancerous polyp(s) (181 patients), subjects with no polyps or colorectal cancers and without other diseases (160 subjects); plus 88 early stage (I/II) colorectal cancer patients were investigated. The cohort comprised high and low risk polyps of various histologies. The samples were analyzed using 18 NuQ^® assays. Use of newly developed NuQ^® assays, as part of a panel of five of the Company’s NuQ^® biomarker blood assays, accurately detected 75% of colorectal adenomas, or polyps, that were most likely to become cancerous in an age adjusted analysis. A NuQ^®panel also detected 86% of early stage I colorectal cancers in an age adjusted analysis.

Completed Pancreatic Cancer Study

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Results of a completed clinical study in pancreatic cancer were announced in the third quarter of 2015. The peer-reviewed study was conducted in collaboration with Lund University, Sweden, and led by Roland Andersson, MD, PhD, Professor of Surgery and Vice-Dean, Faculty of Medicine. This study assessed blood samples from 59 individuals, including 25 patients with stage 2 pancreatic cancer, 10 patients with other pancreatic diseases and 24 healthy individuals, using VolitionRx's Nucleosomics^® technology platform. Analysis of the blood samples demonstrated that a panel of five NuQ^® assays distinguished 84% (21 of 25) of the early-stage pancreatic cancer cases from healthy subjects, with only two false positive results among the healthy subjects. The detection rate of the test was improved further to 92% (23 of 25) of cancer cases by inclusion of the classical CA19-9 cancer biomarker with no false positives results among the healthy subjects. Full results of the study have been published in Clinical Epigenetics, the official journal of the Clinical Epigenetics Society.

Completed Lung Cancer Study

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Results of a completed clinical study in lung cancer were announced in the fourth quarter of 2014. The lung cancer study tested both sputum and blood samples taken from 46 patients attendingthe Pneumology department of the Centre Hospitalier Universitaire, or CHU, de Liege in Belgium. The patients were diagnosed either with non-small cell lung cancer, chronic obstructive pulmonary disease, or COPD, or with no disease (healthy). In sputum samples, our NuQ^® test was able to detect 18 of 21 lung cancer cases (85%) with no false positive results for healthy subjects (0 of 13). The sputum assay data is age and smoking independent. In blood the NuQ^® assays were able to detect 16 of the 21 patients with cancer (76%) with a single false positive result from a healthy subject (1 of 13). The blood assay data is adjusted for age and smoking risk.

We currently have clinical studies underway in colorectal cancer and lung cancer and prostate cancer as well as a “pan-cancer” study in 27 cancers as set forth below. Further studies in lung and pancreatic cancerTaiwan are planned to commence in 2016.

Current Colorectal Cancer Studies

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A retrospective symptomatic colorectal cancer study with Hvidovre Hospital in Denmark with full access to all Danish national registries and databases analyzing approximately 4,800 previously collected samples from patients with colorectal cancer, polyps or adenomas, benign bowel diseases, or other malignancies, all of whom have undergone a colonoscopy, which we refer to as the “Retrospective CRC Trial. The Retrospective CRC Trial is designed to (i) establish a NuQ^® profile for the detection of colorectal cancer in an initially blinded cohort, which we refer to as Phase I; and (ii) validate that profile in a second blind cohort, which we refer to as Phase II. As part of Phase I, at the end of the third quarter 2015, we announced detection of 81% of CRC cases at 78% specificity in an age adjusted analysis. Additional NuQ^®assays are currently being tested on these Phase I samples. Phase II commenced using the best NuQ^® assays on the blind sample cohort in 2015 with the results intended to be used to support CE Marking of specific NuQ^®assays in the second half of 2016.2018.

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A prospective Fecal Immunochemical Test, or FIT, screening colorectal cancer study with Hvidovre Hospital in Denmark with 14,000 samples being collected over 24 months from August 2014, from patients who have had a fecal occult blood test, which we refer to as the FIT Test. Patients who tested positive following the FIT Test will additionally have a colonoscopy and we have full access to these results and the patient’s medical history. It is anticipated that 8,000 samples will be collected from patients who tested positive following a FIT Test and 6,000 samples from patients tested negative. The Prospective CRC Study is designed to evaluate the performance of the validated NuQ^® panel from the Retrospective CRC Trial in a large non-symptomatic cohort. The samples will be analyzed in batches throughout the collection period. This study will establish the performance of NuQ^® tests in relation to FIT which is the market standard in European markets. The study is in the collection and analysis phase with the first results expected in late 2016.

Current Lung Cancer Studies

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A prospective lung cancer study conducted with the Liege University Hospital (Belgium) with 240 subjects collected from subjects with lung cancer, COPD and with healthy lungs. The trial is designed to evaluate the potential of a NuQ^® based test alone and with additional patient data, to detect the most common Non-Small Cell Lung Cancer. Preliminary results from the first 73 subjects released in the fourth quarter of 2015 demonstrated that, when combined with details of smoking history, a panel of four NuQ^® biomarker assays detected 93% of Non-Small Cell lung cancer cases (27 of 29), with 91% specificity(2 false positive results among 22 healthy subjects). Collection and full analysis is expected to complete in the third quarter of 2017.

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A 600 subject study conducted with Bonn University Hospital (Germany) collected from subjects with lung cancer, subjects with benign (non-cancer lung diseases) and healthy control subjects. Collection and analysis is expected to complete in 2016.

Current Prostate Cancer Studies

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A retrospective study to evaluate NuQ^® assays in a treatment selection setting to distinguish anaplastic cancer, a particularly aggressive form of prostate cancer, from typical castration resistant prostate cancer, or CRPC, the less aggressive form. This study is in progress and no results have been announced to date.

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A retrospective study with Surrey Cancer Research Institute, University of Surrey, UK with 550 blood samples collected from patients attending the hospital will be analyzed using a panel of NuQ^® biomarker assays. Three groups of patients will be assessed: those with aggressive prostate cancer; those with indolent or slow-growing prostate cancer; and age-matched healthy controls. The analysis of the panel of NuQ^® assay data is expected to be complete in the first quarter of 2016. In addition to determining the NuQ^® blood test's accuracy in detecting prostate cancer, the study will also assess the tests' ability to distinguish among the different prostate conditions and healthy samples. This study is in progress and no results have been announced to date.

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A prospective prostate cancer study, carried out by Immune Health, with 120 patients with aggressive prostate cancer; those with indolent or slow-growing prostate cancer; and age-matched healthy controls. The study is currently in the recruiting phase and the analysis of the panel of NuQ^® assay data is expected to be complete in the first quarter of 2017. The study will also assess the ability to distinguish clinically actionable, aggressive prostate cancer from non-actionable slow growing disease. This study is in collection and no results have been announced to date.

Current “Pan-Cancer” Study

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A large prospective study conducted with University Hospital in Bonn, Germany on approximately 4,700 patients to evaluate the performance of our NuQ^® assays on patients with the 27 most prevalent cancer types and other diseases, as well as healthy subjects. Collection of blood samples has commenced. Analysis of the blood samples will be performed with a wide range of NuQ^® assays. The primary objectives of this study are; (i) to identify further cancers that are highly amenable to detection by NuQ^®assays; and (ii) to identify NuQ^® assays suitable for the differential diagnosis between cancers. The study is expected to complete in the first half of 2017.

Research and Development ExpendituresCommercialization Strategy

For the years ended December 31, 2015 and 2014, our expenditures forWe are transitioning from a purely clinical stage company to a commercial company. We will continue to research and development activities were $6.1 milliondevelop additional assays and $4.0 million, respectively. Such research and development focused on responding to the need for early, accurate diagnostic tests through the development of our proprietary technologies and product prototypes. We intend to developproducts across a range of products over the next five to ten years. None of these costs are borne directly by customers.

Intellectual Property

We hold or have applied for nine families of patents covering the products currently being developed. One is licensed from a world-class research institution, one was purchased and assigned from a pharmaceutical company and seven are applied for in the name of our subsidiaries.

Nucleosomics^® Intellectual Property

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Singapore Volition held an exclusive license to the following patent from Chroma Therapeutics Limited, or Chroma, until February 20, 2015, when it purchased and was assigned this patent from Chroma:

Nucleosomics^® WO2005019826: Detection of Histone Modifications in Cell-Free Nucleosomes

Application Date: August 18, 2003

Status: Granted in Europe and United States

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Singapore Volition holds this worldwide exclusive license in “the field of cancer diagnosis and cancer prognosis” for the following patent from the European Molecular Biology Laboratory:

EMBL Variant Patent WO2011000573: Diagnostic Method for Predicting the Risk of Cancer Recurrence based on MacroH2A Isoforms

Application Date: July 2, 2009

Status: Granted in Australia, Japan, Singapore and China; Pending in Europe, United States, Canada, South Africa, India, Brazil

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VolitionRx’s subsidiary is the applicant for the following patent application covering its total NuQ^® assay technology:

Nucleosomics^® WO2013030578: Method for Detecting Nucleosomes

Application Date: September 1, 2011

Status: Granted in United States; Pending in Europe and Hong Kong

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VolitionRx’s subsidiary is the applicant for the following patent application covering its NuQ^®-V technology:

Nucleosomics^® WO2013030579: Method for Detecting Nucleosomes containing Histone Variants

Application Date: September 1, 2011

Status: Granted in South Africa; Pending in Europe, United States, Canada, Australia, India, Brazil, Japan, China, Singapore, Russia, South Korea, Mexico and Hong Kong

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VolitionRx’s subsidiary is the applicant for the following patent application covering its NuQ^®-X technology:

Nucleosomics^® WO2013030577: Method for detecting Nucleosomes containing Nucleotides

Application Date: September 1, 2011

Status: Granted in South Africa; Pending in Europe, United States, Canada, Australia, India, Brazil, Japan, China, Singapore, Russia, South Korea, Mexico and Hong Kong

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VolitionRx’s subsidiary is the applicant for the following patent application covering a NuQ^®-A blood test for detecting nucleosome adducts of cancer origin that circulate in the blood of cancer patients. The patent application covers both the use of these adductscancers as biomarkers and the methods for their detection.

Nucleosomics^® WO2013084002: Method for detecting Nucleosome Adducts

Application Date: December 7, 2011

Status: Granted in United States and South Africa; Pending in Europe, Canada, Australia, India, Brazil, Japan, China, Singapore, Russia, South Korea, Mexico and Hong Kong

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VolitionRx’s subsidiary is the applicant for the following patent application covering NuQ^®-M blood tests for detecting nucleosomes containing modified histones of cancer origin that circulate in the blood of cancer patients. The patent application covers methods for their detection.

Nucleosomics^® Patent WO2014053852: Method for detecting Histone Modifications in Nucleosomes

Application Date: February 28, 2013

Status: Pending in Europe and United States

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VolitionRx’s subsidiary is the applicant for the following patent application:

WO2014131845: Method for Predicting Therapy Efficacy using Nucleosome Structure Biomarkers

Application Date: February 28, 2013

Status: Pending in Europe and United States

Endometriosis Intellectual Property

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VolitionRx’s subsidiary is the applicant for the following patent application for its endometriosis test:

Endometriosis Diagnostic WO2012013955: Method for Detecting the Presence of a Gynaecological Growth

Application Date: July 28, 2010

Status: Granted in Australia; Pending in United States, Canada, Europe and Hong Kong

Future Intellectual Property Strategy

We intend to continue our development of the Nucleosomics^® and HyperGenomics^® technologies and willwe continue to apply for patents for future product developments. Our strategy isdevelop our commercial operations. We plan to protectdevelop multiple products across the technologies and gain market exclusivity with patents in Europe and the U.S and in other strategic countries. The patents on the technologies underlying our products should provide broad coverage for each product, including protection through at least 2031 for products developed using the NuQ^®-X, NuQ^®-V and NuQ^®-A technologies.

Trademarks

We also own a numberwhole range of trademarks that protect our marks including “NuQ^®,” “Nucleosomics^®” and “HyperGenomics^®.”

Government Regulations

The health care industry, and thus our business, is subject to extensive federal, state, local and foreign regulation. Some of the pertinent laws have not been definitively interpreted by the regulatory authorities or the courts, and their provisions are open to a variety of subjective interpretations. In addition, these laws and their interpretations are subject to change.

Both United States federal and state governmental agencies continue to subject the health care industry to intense regulatory scrutiny, including heightened civil and criminal enforcement efforts. As indicated by work plans and reports issued by these agencies, the federal government will continue to scrutinize, among other things, the marketing, labeling, promotion, manufacturing and export of diagnostic health care products. Our diagnostic products fall within the medical device category and are subject to FDA clearance or approval in the United States.

The federal government also has increased funding in recent years to fight health care fraud, and various agencies, such as the United States Department of Justice, the Office of Inspector General of the Department of Health and Human Services, or OIG, and state Medicaid fraud control units, are coordinating their enforcement efforts.

In Europe, medical devices are regulated by self-certification through the CE Mark system. Under the system, developers and manufacturers must operate a Quality System and validate medical devices in a limited clinical trial to demonstrate the manufacturer has met analytical and clinical performance criteria. VolitionRx has implemented an International Organization for Standardization standard - ISO 13485 - quality management system for the design and manufacture of medical devices. ISO 13485 addresses managerial awareness of regulatory requirements, control systems, inspection and traceability, device design, risk and performance criteria as well as verification for corrective and preventative measures for device failure. Medical device companies such as ours are subject to pre-market compliance assessments from Notified Bodies, a certification organization which the national authority (the competent authority) of a European member state designates to carry out one or more of the conformity assessment procedures. ISO 13485 certification establishes conformity to specific European Union directives related to medical devices and allows CE Marking and sale of the device. The European Union has recently proposed terms that would impose additional requirements to obtain a CE Mark, which could result in delays and further expense, in terms of staff costs, to us as compared to the current CE Mark approval process, as the new regulations will require each product submission to be thoroughly audited by Notified Bodies, instead of the current self-certification process. The EU Medical Devices Regulation, or MDR, and IVD Regulation, or IVDR, are both in the final stages of the legislative procedure and are estimated to be furnished sometime in 2016, allowing them to come into effect by the end of 2016, or early 2017. Some time will be required to polish the agreed text and have it translatedcancers falling into the official EU languages.categories listed below:

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. 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 that we have structured our business operations to comply with applicable legal requirements. However, it is possible that governmental entities or other third parties could interpret these laws differentlygiven the global prevalence of cancer and assert otherwise.

Please refer to the section below titled “Government Approval” for additional information.

Government Approval

Alllow cost, accessible routine nature of our intended products are designed to be non-invasive, meaning they cannot harm the subject other than through misdiagnosis. Our strategy is to go through the process of obtaining regulatory approval for IVD products totests, Nu.Q will eventually be used clinically on cancer patients. Conformité Européenne, or CE Marking,throughout the world. Our launch sequence is determined to a mandatory conformity mark for certain products placed on market in the European Union including, medical devices and IVD tests. CE Marking ensures that the manufacturer’s product conformslarge extent by regulatory hurdles - consequently, we aim to the essential requirements of the relevant European health, safety and environmental protection legislation. We intend tolaunch first focus on obtaining regulatory approval in Europe, due to the grant of the NuQ^® patentthen in EuropeAsia, and the relatively fast European CE Marking process. We currently anticipate this will be followed closely by licensing to CLIA labs for a LDTsubsequently in the United States,States. We plan to work with partners and/or regulatory submissions in the United States and in the rest of the world. In many territories, the European CE Mark is sufficientdistributors to place products on the clinical market and, where it is not, it often simplifies the regulation processes.commercialize Nu.Q worldwide.  

Europe – CE Marking

Manufacturers in the European Union and abroad must meet CE Marking requirements, where applicable, in order to market their products in Europe. The CE Mark certifies that a product has met European Union health, safety, and environmental requirements which ensure consumer safety.

To receive the CE Mark, our diagnostic products must meet certain requirements as set forth in the In-Vitro Diagnostic Medical Devices Directive. The requirements to procure CE Marking for In-Vitro Diagnostic Medical products are:

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analytical validation of the products;

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clinical validation of the products (which can be retrospective clinical studies using biobank patient samples, i.e. blood samples from historic patients);

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implementation of regulatory compliant manufacture;

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implementation of a Quality System; and

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certification from the International Organization for Standardization (this last requirement is not technically required but will aid the regulatory approval process in Europe and the United States).

The first NuQ^®-X assay received a CE Mark in September 2015 and our R&D, manufacturing and distribution facility, Belgian Volition SA received EN ISO 13485, 2012 certification (an internationally recognized quality system) at the start of 2016. The requirements listed above are general requirements that apply to all of our intended products. In compliance with the In-Vitro Diagnostic Medical Devices Directive and the CE Marking process, we have ensured that all development and validation is carried out in a manner consistent with regulatory approval. Additionally, we have maintained proper records so that our future products can be approved as quickly and simply as possible. We have engaged a regulatory advisor to lead the Company in meeting the last requirement for all of our future products. All of these requirements must be completed prior to the submission of an application for CE Marking. We will submit applications, which will contain a dossier of all relevant analytical, clinical and manufacturing data following retrospective clinical studies which we expect will require a total of approximately six (6) months to complete. We estimate the cost of obtaining CE Marking will be approximately $500,000 per NuQ^® panel. We expect to apply for CE Marking for additional NuQ^®-V (variant) and NuQ®-T (total) assays NuQ^®-V001 and NuQ^®-T003 in the first quarter of 2016, with a further NuQ^® -V002 and NuQ^® -M001 (Modification) at the end of the second quarter of 2016 as well as the colorectal cancer screening test in the second half of 2016 (for European market). Sales of our clinical products can occur in Europe once CE Marking has been granted.

In Europe, IVD companies are able to self-certify that they meet the appropriate regulatory requirements and are subject to inspection for enforcement. European agencies, conduct market surveillance to ensure the provisions of the applicable Directive have been met for products marketed within the European Union. In pursuit of this goal, surveillance authorities will:

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audit commercial, industrial and storage premises;

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visit work places and other premises where products are put into service and used;

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organize random checks; and

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take samples of products for examination and testing.

If a product is found to be noncompliant, corrective action will depend on and be appropriate to the level of noncompliance. Others responsible for the noncompliance of the product will be held accountable as well. Penalties, which may include imprisonment, are determined by national law.

U.S. Regulations

Food and Drug Administration

In the United States, in vitro diagnostics are regulated by the FDA as medical devices. There are two principal regulatory pathways to receive authorization to market in vitro diagnostics, a 510(k) premarket notification and a premarket approval application, or PMA. The FDA makes a risk-based determination as to which pathway a particular in vitro diagnostic is eligible. In addition, since July 2012 with the enactment of the Food and Drug Administration Safety and Innovation Act, or FDASIA, ade novo pathway is directly available for certain low to moderate risk devices that would not qualify for the 510(k) notification pathway due to lack of a predicate device. The information that must be submitted to the FDA in order to obtain clearance or approval to market a new medical device varies depending on how the medical device is classified by the FDA. Medical devices are classified into one of three classes on the basis of their level of risk and the controls deemed by the FDA to be necessary to reasonably assure their safety and effectiveness. Class I devices are subject to “general controls”, including establishment registration, device listing, labeling, reporting and recordkeeping, and adherence to FDA’s quality system regulations, which are device-specific good manufacturing practices. Class II devices are subject to the general controls and also special controls, including guidance documents, performance standards, and postmarket surveillance. Class III devices are subject to most of the previously identified requirements as well as to premarket approval. Most Class I devices are exempt from the requirement for premarket notification to the FDA; most Class II devices require the submission and clearance of a 510(k) premarket notification to the FDA prior to commercial marketing; and Class III devices require submission and approval of a PMA. Device manufacturers and PMA holders are also subject to numerous postmarketing requirements.

The FDA can require the submission of clinical data to support 510(k) clearance,de novo reclassification, or a PMA. Clinical studies undertaken in the United States are subject to FDA requirements applicable to investigational device exemptions, or IDEs, institutional review boards, or IRBs, review and approval, and informed consent of the study subjects.

Clinical Trials of Devices

Clinical trials for a medical device must be conducted in accordance with FDA requirements, including informed consent from study participants, review and approval by an IRB at each institution where a trial will be conducted, financial disclosure by clinical investigators, and listing of appropriate studies on ClinicalTrials.gov. Additionally, FDA approval of an IDE application must be obtained in order to conduct a clinical trial of “significant risk” devices, which are devices that present a potential for serious risk to the health, safety, or welfare of a subject, including devices that are of substantial importance in diagnosing or treating disease, or preventing impairment of human health. Sponsors of clinical trials are responsible for monitoring the studies, and for recordkeeping and reporting. The FDA may prevent clinical trials from moving forward, and may suspend or terminate trials once initiated. The FDA may inspect sponsor records, clinical investigators, and clinical sites involved in clinical trials. The FDA may take enforcement action for non-compliance with any of these requirements.

510(k) Premarket Notification

A 510(k) notification requires the sponsor to demonstrate that a medical device is substantially equivalent to another marketed device, termed a “predicate device”, that is legally marketed in the United States and for which a PMA was not required. A device is substantially equivalent to a predicate device if it has the same intended use and same technological characteristics as the predicate or has the same intended use but different technological characteristics, where the information submitted to the FDA does not raise new questions of safety or effectiveness and demonstrates that the device is at least as safe and effective as the legally marketed predicate device.

The FDA’s performance goal review time for a 510(k) notification is 90 days from the date of receipt. In practice, however, the review process often takes significantly longer. After its initial review, the FDA may require additional information, including clinical data, in order to make a decision regarding the claims of substantial equivalence. Clinical studies of in vitro diagnostic products are typically designed with the primary objective of obtaining analytical or clinical performance data. If the FDA believes that the device is not substantially equivalent to a predicate device, it will issue a “Not Substantially Equivalent” letter and designate the device as a Class III device, which will require the submission and approval of a PMA before the new device may be marketed. Under certain circumstances, the sponsor may submit ade novo petition to the FDA to reclassify the new device as a Class I or Class II device.

If a predicate device does not exist, the FDA may make a risk-based determination that the device is eligible forde novo reclassification and premarket review instead of requiring a PMA. Thede novo process is similar to clearance of the 510(k) premarket notification, and typically requires the submission of clinical data to support the reclassification. Ade novo petition can be submitted either prior to the submission of a 510(k) when no predicate device can be identified, or after the FDA determines that a new device is “not substantially equivalent” due to lack of an appropriate predicate device. Under the FDASIA, the FDA may “decline to undertake a classification” if the FDA either (1) identifies a legally marketed predicate device that would be appropriate for a 510(k), or (2) determines that the device is not low to moderate risk or that general controls would be inadequate to control the risks and special controls cannot be developed. The statute directs the FDA to classify the device within 120 days following receipt of thede novo application.

Premarket Approval

The PMA process is more complex, costly and time consuming than the 510(k) process. A PMA must be supported by manufacturing data, preclinical data, and more detailed and comprehensive scientific evidence, including clinical data, to demonstrate the safety and efficacy of the medical device for its intended purpose. If the device is determined to present a “significant risk,” the sponsor may not begin a clinical trial until it submits an application for an investigational device exemption, or IDE, to the FDA and obtains approval from the FDA to begin the trial.

After the PMA is submitted, the FDA has 45 days to make a threshold determination that the PMA is sufficiently complete to permit a substantive review. If the PMA is deemed not sufficiently complete, the FDA will issue a “refuse to file” determination. If the PMA is complete, the FDA will file the PMA and begin a substantive review of the application. The FDA is subject to a performance goal review time for a PMA that is 180 days from the date of filing, although in practice the total review time is longer. Questions from the FDA, requests for additional data, additional testing and submissions by the applicant, and referral to an advisory committee may delay the process considerably. Indeed, the total process may take several years and there is no guarantee that the PMA will ever be approved. Even if approved, the FDA may limit the indication for which the device may be marketed. The FDA may also request additional clinical studies or registries as a condition of approval or even after the PMA is approved. Any changes to the medical device may require a supplemental PMA to be submitted and approved. In addition, annual reports and other reports are required.

Requirements Applicable to Marketed Devices

The FDA Quality System Regulations, or QSRs, impose requirements for design control and validation, management review, complaint handling and investigation, labeling control, servicing and recordkeeping, among others. The FDA also regulates device imports and exports. Manufacturers are required to submit medical device reports for deaths or serious injuries associated with the use of their devices, and for malfunctions that could cause or contribute to a death or serious injury. The FDA also requires reporting of certain corrections or removals of devices. Labeling and promotional activities are subject to regulation by the FDA, and certain device advertising is subject to regulation by the Federal Trade Commission.

Laboratory Developed Tests

Although the FDA has claimed for many years that it has the statutory authority to regulate laboratory-developed tests, or LDTs, as medical devices, the agency has generally exercised enforcement discretion toward them. LDTs are tests that are developed, validated, and offered as testing services by a clinical laboratory, and these tests are regulated under the Clinical Laboratory Improvement Act, or CLIA. The FDA has stated that it will take enforcement action against any specific LDT if necessary to protect the public health. In recent years, the FDA has indicated that it is reconsidering its policy of enforcement discretion and reviewing the regulatory requirements that it will apply to LDTs.

CLIA and State Clinical Laboratory Laws

The FDA is responsible for the complexity categorization of commercially marketed in vitro diagnostic, or IVD, tests under CLIA, placing them into one of three categories based upon the potential risk to public health in reporting erroneous results. The categories were devised on the basis of the complexity of the test, and include waived tests, tests of moderate complexity, and tests of high complexity.

The Center for Medicare and Medicaid Services, or CMS, regulates clinical laboratories under CLIA. Laboratories that perform testing on human specimens for the purpose of providing information for diagnosis, prevention or treatment of disease or assessment of health are subject to CLIA, which imposes quality standards for laboratory testing to ensure the accuracy, reliability and timeliness of patient test results.

Laboratories performing moderate- or high-complexity testing must meet various CLIA requirements applicable to personnel, operations, establishment and verification of performance specifications, proficiency testing, patient test management, quality control, and quality assurance. CLIA certified laboratories are typically subject to survey and inspection every two years to assess compliance with program standards. Sanctions can be applied against a laboratory that is found to be out of compliance with CLIA requirements, including, among others, suspension, limitation, or revocation of a CLIA certificate.

Laboratories may also seek accreditation by the College of American Pathologists, or CAP. CAP is an independent, non-governmental organization approved by CMS to inspect laboratories to determine compliance with CLIA requirements. The CAP Laboratory Accreditation Program is an internationally recognized program that utilizes teams of practicing laboratory professionals as inspectors, and accreditation by CAP can often be used to meet CLIA or state certification requirements.

In addition to CLIA, States also have laws that apply to clinical laboratories, including state licensing laws. Some states impose requirements that are more stringent than CLIA requirements. State laws may also require detailed review of a laboratory’s technical procedures or scientific validation of laboratory tests.

Product Development and Plan of Operations

NuQ^® Assays (Cancer and Other Conditions):

·

In-Vitro Diagnostics Market

o

CE Marking (Europe): A pilot NuQ^® panel of three assays underwent external third party retrospective clinical validations during 2012 which took approximately nine months to complete. A larger NuQ^® panel of assays commenced large-scale retrospective clinical validations in 2013, which will continue during the first half of 2016 in a symptomatic population. Once the retrospective validations are completed, the tests will be submitted for CE Mark approval, both for each individual biomarker assay and for the complete biomarker assay panel in a symptomatic population. The first NuQ^®-X biomarker assay received a CE Mark in September 2015 and we expect the first biomarker assay panel to receive a CE Mark in the second half of 2016. We estimate that the cost of CE Marking our first biomarker panel will be approximately $500,000. We additionally expect to have the results from the prospective 14,000 patient CRC study with Hvidovre Hospital in Denmark in a European screening population in the second half of 2016 and expect to CE Mark the CRC biomarker panel for use in a screening population in 2017.

o

FDA Approval (United States): FDA approval for colorectal screening applications is expected to require longer large-scale prospective clinical validation studies including U.S. trials. Our FDA PMA clinical trial process is expected to commence in 2016 and be completed in 2018. When the trial is completed, the data will be submitted to the FDA for United States PMA. We estimate the cost of obtaining FDA PMA will be approximately $5 million, with the understanding that up to $50 million may ultimately be required depending on a multitude of factors as previously discussed. As an intermediate step we will seek 510(k) approval for use of NuQ^® as a symptomatic adjunct test (used in combination with other tests to identify at risk patients). This abbreviated process is expected to begin in 2016 and complete in 2017 with an estimated cost of between $1million and $1.5 million.

We expect to produce a rolling pipeline of products for different types of cancers over the next one to five years.

NuQ^® Clinical Diagnostic Products:

·

Centralized Laboratory Market

o

License of Nucleosomics^® technology to a global diagnostics company: We may license our Nucleosomics^® technology on a non-exclusive basis to a global diagnostics company. The approximate licensing fees have not yet been determined. We have not entered into any agreements with diagnostic companies or established an anticipated timeframe for licensing our Nucleosomics^® technology.

o

Sell manual and/or semi-manual ELISA plates to centralized laboratories:We may sell manual and/or semi-automated 96 well ELISA plates for use by centralized laboratories. The approximate manufacturing costs or sales price have not yet been determined. We are in discussions with several groups to distribute our products in multiple regions.

o

Point-of-Care Devices: We intend to enter the point-of-care clinical market in Europe and in the United States 18 months after launching on the manual platform. The approximate manufacturing costs or sales price per device have not yet been determined. We have not entered into any discussions or negotiations regarding the manufacture or sale of these devices.

o

Disposable Tests for Doctor’s Office or Home Use: We intend to contract with a specialist company to adapt the NuQ^® tests to the doctor’s office or home use system and to contract with a manufacturer for the production of these tests. The sale of these tests will initially be for professional use only (doctors) and will likely be released at a later time for non-professional home use. The approximate manufacturing costs or sales price per test have not yet been determined. We have not entered into any discussions or negotiations with a specialist company or manufacturer. We do not yet have an estimated timeframe for the manufacture or sale of these tests.

If we do not have enough funds to fully implement our business plan, we will be forced to scale back our plan of operations and our business activities, increase our anticipated timeframes to complete each milestone or seek additional funding. In the event that additional financing is delayed, we will prioritize the maintenance of itsour research and development personnel and facilities, primarily in Belgium, and the maintenance of our patent rights. In the event of an ongoing lack of financing, we may be obliged to discontinue operations.Belgium.

4

Sales and Marketing StrategyThe Market Opportunity

Our future products will require several dynamic and evolving sales models tailored to different worldwide markets, users and products. Pending completion of our reviewCancer is one of the regulatory environmentleading causes of death worldwide, accounting for around 8.2 million annual deaths globally. There are over 14 million new cases of cancer diagnosed each year and given the aging population this is expected to grow rapidly to over 21.5 million new cases annually by 2030. By way of example as of today, in the United States includingthere are more than three new cases of cancer diagnosed and one person dies of a cancer-related death every minute.

Statistically, the effectchances of the Draft Guidance, we will combine a licensingsurviving cancer are greatly improved by early detection and sales strategy focused on the IVD products through 2016. In 2017 we intend to license NuQ^®treatment. However, there are currently very few blood tests for LDT usediagnosis of cancer in common clinical use. The only blood test commonly used for screening any cancer is the Prostate-Specific Antigen, or PSA, test for prostate cancer. We consider the PSA test to have relatively poor diagnostic accuracy (detecting approximately 70% of prostate cancers and misdiagnoses of about 30% of healthy men as positive for cancer) but it is widely used because it is the best product currently available. The PSA test is intended to be used to monitor patients after definitive diagnosis or treatment. The American Cancer Society recommends that prostate cancer screening should not occur without an informed decision-making process regarding risks. In 2012, the U.S. Preventative Services Task Force recommended against PSA- based screening for healthy men because of a “moderate or high probability” that the service has no benefit or that the harms outweigh the benefits. There are few currently commonly used approved blood tests for screening for cancer.

Our initial and current focus is colorectal cancer, or CRC, which is the third leading cause of cancer deaths worldwide accounting for almost 700,000 lives lost annually. In the United States, CRC is the second leading cause of cancer deaths and the leading cause of cancer deaths in the United States and/or launch our own products as an adjunct product to progressively grow sales volumes after CE Marking in Europe and FDA approvalamong non-smokers. Each year in the United States with salesthere are over 140,000 new cases of CRC and approximately 51,000 deaths from CRC.

The Journal of the National Cancer Institute claims that, while CRC is the most preventable cancer, it remains the least prevented form of cancer. Current methods of CRC diagnosis are either invasive, not cost-effective, have low acceptance or cannot provide accurate results.  The inadequacy of existing diagnostic products means that most cancers are only diagnosed once the patient experiences symptoms and the cancer is well established. By this stage, it will often have spread beyond the primary tumor (metastatic cancers), making it substantially more difficult to centralized laboratoriestreat. For example, while the overall 5-year survival rate for cancer patients is 65%, the survival rate differs significantly depending upon the stage of diagnosis. Only 14% of patients diagnosed at Stage IV survive 5 or more years whereas 90% of those diagnosed at Stage I survive five or more years; once more underlining the importance of early detection. We believe that early, non-invasive, accurate cancer diagnosis remains a significant unmet medical need and eventuallya significant commercial opportunity. For these reasons, cancer diagnostics is an active field of research and development both academically and commercially.

The global in vitro diagnostic medical device, or IVD, market is forecasted to reach $65 billion in 2018; driven by the mass diagnostics testing market. The sales strategy will evolve as we continue to develop our intended products and seek entry intoincreasing health care demands of an aging population. In the United States, the IVD markets.market is primarily comprised of:

Immunochemistry of tissue samples (expected to grow 6.8% per annum from 2011-2018, with an expected value of $25.5 billion by 2018). These tests are mostly used to confirm cancer diagnosis post-surgery and to determine cancer sub-type; 

Immunoassay (chemical tests used to detect a substance in blood or body fluid), is expected to be the second largest market with a value of more than $19.1 billion by 2018. These tests are mostly used to monitor for disease progress and relapse. This market segment includes our future Nucleosomics products, which will be blood-based immunoassay tests for modified nucleosomes for the diagnosis of cancer. 

We anticipate that because of their ease of use and cost efficiency, our tests have the potential to become the first method of choice for cancer diagnostics, allowing detection of a range of cancers at an earlier stage than typically occurs currently, and testing of individuals who, for reasons such as time, cost or aversion to current methods, are not currently being tested. We believe our frontline blood test for CRC has the potential to have significantly higher compliance from patients compared to current fecal immunochemical tests, or FIT, and colonoscopies which are invasive and/or unpleasant. Our frontline blood test, currently in development, could be of significant benefit to screen relevant individuals (aged 50 to 74 years old).

5

Competition

We believe that Epigenomics AG, or Epigenomics, is our main competitor in the blood-based diagnostic market is Epigenomics AG. Epigenomics has European approval for itsmarket. Epigenomics’ methylated DNA basedDNA-based PCR teststest in colon cancer (Epi proColon^®) is available in the United States, Europe, China and select other countries and its lung cancer test (Epi proLung).proLung^®) has been CE-Marked in Europe. CellMax Life is another cancer diagnostics company offering non-invasive tests for early cancer detection and management, however, currently, its tests have limited clinical data and are available only in Taiwan. In colon cancer, our main target market, we also face potential competition from alternative procedures including flexible sigmoidoscopy, colonoscopy and virtual colonoscopy as well as traditional tests such as the stool guaiac and immunochemical FIT Tests.FIT. Exact Sciences Corporation has recently received FDA approval and reimbursement approval for its stool-based DNA screening test.test, Cologuard^®. We anticipate facing competition primarily from large healthcare, pharmaceutical and diagnostic companies such as Epigenomics, AG, Applied Proteomics Inc., and Exact Sciences Corporation, as well as others such as Abbott Laboratories Inc., Cepheid Inc., Philips, GE Healthcare, Siemens, Gen-Probe Incorporated, MDxHealth SA, and Roche Diagnostics and Sequenom, Inc.Diagnostics. There may also be other companies developing products competitive with ours of which we are unaware.

We hope that our future products will have a competitive edge compared to those offered by competitors on the basis that our tests are being developed to be accurate, cost-effective and attractive from a government reimbursement perspective, easy to use, non-invasive, technologically advanced, and compatible with ELISA systems, based on strong intellectual property and to be used for mass screenings.

Many of our anticipated competitors have substantially greater financial, technical, and other resources and larger, more established marketing, sales and distribution systems than we will have. Many of our competitors also offer broad product lines outside of the diagnostic testing market and have brand recognition. Moreover, our competitors may make rapid technological developments that may result in our intended technologies and products becoming obsolete before we are able to enter the market, recover the expenses incurred to develop them or generate significant revenue. Our success will depend, in part, on our ability to develop our intended products in a timely manner, keep our future products current with advancing technologies, achieve market acceptance of our future products, gain name recognition and a positive reputation in the healthcare industry, and establish successful marketing, sales and distribution efforts.

Government Regulations

The health care industry, and thus our business, is subject to extensive federal, state, local and foreign regulation. Some of the pertinent laws have not been definitively interpreted by the regulatory authorities or the courts, and their provisions are open to a variety of subjective interpretations. In addition, these laws and their interpretations are subject to change.

Both United States federal and state governmental agencies continue to subject the health care industry to intense regulatory scrutiny, including heightened civil and criminal enforcement efforts. As indicated by work plans and reports issued by these agencies, the federal government will continue to scrutinize, among other things, the marketing, labeling, promotion, manufacturing and export of diagnostic health care products. Our diagnostic products fall within the IVD medical device category and are subject to FDA clearance or approval in the United States.

The federal government also has increased funding in recent years to fight health care fraud, and various agencies, such as the United States Department of Justice, the Office of Inspector General of the Department of Health and Human Services, or OIG, and state Medicaid fraud control units, are coordinating their enforcement efforts.

In Europe, medical devices are regulated by self-certification through the CE Mark system. Under the system, developers and manufacturers must operate a Quality System and validate medical devices in a limited clinical trial to demonstrate the manufacturer has met analytical and clinical performance criteria. We have implemented an International Organization for Standardization standard - ISO 13485 - quality management system for the design and manufacture of medical devices. ISO 13485 addresses managerial awareness of regulatory requirements, control systems, inspection and traceability, device design, risk and performance criteria as well as verification for corrective and preventative measures for device failure. Medical device companies such as ours are subject to pre-market compliance assessments from Notified Bodies, a certification organization which the national authority (the competent authority) of a European Union member state designates to carry out one or more of the conformity assessment procedures. ISO 13485 certification establishes conformity to specific European Union directives related to medical devices and allows CE Marking and sale of the device.

The new European In Vitro Diagnostic Regulation (IVDR - 2017/746), or the IVDR, became effective as of May 25, 2017, marking the start of a transition period for manufacturers selling IVD devices into Europe. The IVDR, which replaces IVD Directive (98/79/EC), or the Directive, has a transition period of five years, after which the IVDR will apply in full, and no new applications pursuant to the Directive will be accepted. Manufacturers have the duration of the five-year transition period to update their technical documentation and processes to meet the new, more stringent EU regulatory requirements. We believe that the most challenging areas under the IVDR will be regarding the classification of products, which will bring almost all IVDs under the direct control of Notified Bodies, and the performance evaluation of IVDs, which will not only include the classic clinical performance and analytical performance but also scientific validity, the role and responsibilities of the economic actors of the supply chain, the traceability and the transparency of the devices with, in particular, the introduction of the UDI-system and an expanded EUDAMED database.

6

Notified Bodies can begin auditing to the IVDR once they have been designated as a Notified Body under the IVDR by their Competent Authority. For now, we expect the first Notified Bodies to be notified according the IVDR by the end of 2019 and we anticipate that TÜV SÜD will be one of these. In practice, it will not be possible to CE mark a product according to the IVDR beforehand. For Class C devices (Belgian Volition’s devices should be Class C), the conformity assessment procedure will be a combination of the Quality Management System audits and Technical Documentation assessments. The assumed assessment time needed for a Technical Documentation assessment of a Class C device is expected to last from about 2 months to 6 months. Belgian Volition has already begun discussions with the TÜV SÜD in order to ensure compliance with the IVDR as soon as possible.

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. 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 that we have structured our business operations to comply with applicable legal requirements. 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.

Regulatory Approach

Commercialization of our future products in theclinicalIVD market (e.g. for patient diagnosis in hospitals, clinics, etc.) requires government approval (CE Marking in Europe,FDA approval in the United States, and Chinese Food and Drug Administration, or CFDA, approval in China).

In the United States, we anticipate that our tests will have to be cleared through the FDA’s premarket notification or 510(k), process or its premarket approval, or PMA, process. The determination of whether a 510(k) or a PMA is necessary will depend in part on the proposed indications for use and the FDA’s assessment of the risk associated with the use of the IVD for a particular indication. A similar system operates in China through the CFDA. In the European Union, our tests can be marketed after a declaration and marking that the test conforms to the essential requirements of the relevant European health, safety and environmental protection legislation, or CE Marking. The CE Mark is also recognized in certain Asian territories, including India, for the private payer market.

We obtained our first CE Mark in September 2015, for a single biomarker for CRC, and two further CE Marks in April 2016, for two biomarkers for CRC and pancreatic cancer. In December 2016, we achieved a CE Mark for the Nu.Q Colorectal Cancer Screening Triage Test.

We are currently working on different products such as a frontline screening test and a symptomatic test for CRC. We expect that we will be required to perform additional clinical trials in the United States to obtain FDA clearance or approval for these CRC tests.  We are committed to obtaining FDA clearance or approval to allow patient access to our tests in the United States as soon as practicable.

We also expect that we will be required to do trials in China to achieve CFDA approval for our various tests, provided we can ensure adequate protection of our intellectual property in China. Local validation studies will be required to support sales of our CE-Marked CRC test in many Asian markets for the private payer market.

Intellectual Property

We have 17 patent families related to our diagnostic tests, with five patents granted in the United States and four patents granted in the European Union. Additionally, we have 12 patent applications in the name of our subsidiaries pending in the United States and the 13 patent applications in the European Union.

We intend to continue our development of the Nucleosomics technologies and will continue to apply for patents for future product developments. Our strategy is to protect the technologies and gain market exclusivity with patents in Europe and the United States and in other strategic countries. The patents on the technologies underlying our products should provide broad coverage for each product, including protection through at least 2031 for products developed using the Nu.Q-X, Nu.Q-V and Nu.Q-A technologies.

7

Employees

As of December 31, 2015,2017, we (including our subsidiaries) had 37 full-time equivalents compared to 28 as of December 31, 2016.

Corporate History

The Company was incorporated on September 24, 1998 in the State of Delaware under the name “Standard Capital Corporation”. On September 22, 2011, the Company filed a Certificate for Renewal and Revival of Charter with the Secretary of State of Delaware. Pursuant to Section 312 of Delaware General Corporation Law, the Company was revived under the new name of “VolitionRX Limited”. The Company acquired its wholly-owned operating subsidiary, Singapore Volition Pte. Limited, a Singapore registered company, or Singapore Volition, on October 6, 2011. Singapore Volition has two subsidiaries, Belgian Volition SPRL, a Belgium private limited liability company, or Belgian Volition, which it acquired on September 22, 2010, and Hypergenomics Pte. Limited, a Singapore registered company, or Hypergenomics, which it formed on March 7, 2011. Belgian Volition has two subsidiaries, Volition Diagnostics UK Limited, which it formed on November 13, full-time employees2015, and 2 part-time employees.Volition America, Inc., which it formed on February 3, 2017.

Our principal executive office is located at 1 Scotts Road, #24-05 Shaw Centre, Singapore 228208. Our telephone number is +1 (646) 650-1351. Our website is located atwww.volitionrx.com. The information that can be accessed through our website is not incorporated by reference into this report and should not be considered to be a part hereof.

Financial Information

See our consolidated financial statements included in this Form 10-K and accompanying notes to the consolidated financial statements.

WHERE YOU CAN GET ADDITIONAL INFORMATION

We file Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K pursuant to Section 13(a) or 15(d) of the Exchange Act electronically with the SEC. You may read and copy our reports or other filings made with the SEC at the SEC’s Public Reference Room, located at 100 F Street, N.E., Washington, DC 20549 on official business days during the hours of 10:00 a.m. and 3:00 p.m. You can obtain information on the operations of the Public Reference Room by calling the SEC at 1-800-SEC-0330. You can also access these reports and other filings electronically on the SEC’s web site,www.sec.gov.

8

ITEM 1A.

RISK FACTORS

An investment in our securities involves certain risks, including those set forth below and elsewhere in this report. In addition to the risks set forth below and elsewhere in this report, other risks and uncertainties may existsexist that could adversely affect our business and financial condition. If any of the following risks actually materialize, our business, financial conditions and/or operations could suffer. In such event, the value of our common stock could decline, and you could lose all or a substantial portion of your investment. You should carefully consider the risks described below as well as other information and data included in this report.

Risks Associated with our Company

We have not generated any significant revenue since our inception and we may never achieve profitability.

We are a clinical stage company and have incurred losses since our inception,formation. As of December 31, 2017, we have not generated any significant revenue.an accumulated total deficit of approximately $55.7 million. As we continue the discovery and development of our future diagnostic products, our expenses are expected to increase significantly. Accordingly, we will need to generate significant revenue to achieve profitability. Even as we begin to market and sell our intended products, we expect our losses to continue as a result of ongoing research and development expenses, as well as increased manufacturing, sales and marketing expenses. These losses, among other things, have had and will continue to have an adverse effect on our working capital, total assets and stockholders’ equity. Because of the numerous risks and uncertainties associated with our product development and commercialization efforts, we are unable to predict when we will become profitable, and we may never become profitable. Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. If we are unable to achieve and then maintain profitability, our business, financial condition and results of operations will be negatively affected and the market value of our common stock will decline.

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 colorectal cancer pipeline and developing future products. If we incur delays in commencing commercialization of our intendedNu.Q colorectal cancer 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.

We cannot be certain that additional capital will be available when needed or that our actual cash requirements will not be greater than anticipated. Financing opportunities may not be available to us, or if available, may not be available on favorable terms. The availability of financing opportunities will depend on various factors, such as market conditions and our financial condition and outlook. In addition, if we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders could be significantly diluted, and these newly-issued securities may have rights, preferences or privileges senior to those of existing stockholders. If we obtain additional debt financing, a substantial portion of our operating cash flow may be dedicated to the payment of principal and interest on such indebtedness, and the terms of the debt securities issued could impose significant restrictions on our operations. 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.

It is difficult to forecast our future performance, which may cause our financial results to fluctuate unpredictably.

Our limited operating history and the rapid evolution of the market for diagnostic products make it difficult for us to predict our future performance. A number of factors, many of which are outside of our control, may contribute to fluctuations in our financial results, such as:

·

Ourour ability to develop or procure antibodies for clinical use in our future products;

·

Ourour ability to translate preliminary clinical results to larger prospective symptomatic and screening populations;

·

Thethe demand for our intended products;

·

Ourour ability to obtain any necessary financing;

·

Ourour ability to market and sell our future products;

·

Marketmarket acceptance of our future products and technology;

·

Performanceperformance of any future strategic business partners;

·

Ourour ability to obtain regulatory clearances or approvals;

·our success in collecting payments from third-party payors and customers; 

Changeschanges in technology that may render our future products uncompetitive or obsolete;

·

Competitioncompetition with other cancer diagnostics companies; and

·

Adverseadverse changes in the healthcare industry.

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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.

Our success depends on our ability to attract, retain and motivate highly qualified management and scientific personnel. In particular, we are highly dependent on Cameron Reynolds, our President and Chief Executive Officer, our other officers and directors, scientists and key employees. The loss of any of these persons or their expertise would be difficult to replace and could have a material adverse effect on our ability to achieve our business goals. In addition, the loss of the services of any one of these persons may impede the achievement of our research, development and commercialization objectives by diverting management’s attention to the identification of suitable replacements, if any. There can be no assurance that we will be successful in hiring or retaining qualified personnel and our failure to do so could have a material adverse effect on our business, financial condition and results of operations.

Recruiting and retaining qualified scientific personnel and, in the future, sales and marketing personnel will also be critical to our success. We may not be able to attract and retain these personnel on acceptable terms given the competition among pharmaceutical, biotechnology and diagnostic companies for similar personnel. We also experience competition for the hiring of scientific personnel from universities and research institutions. We do not maintain “key person” insurance on any of our employees. In addition, we rely on consultants and advisors, including scientific and clinical advisors, to assist us in formulating our research, development and commercialization strategies. Our consultants and advisors, however, may have other commitments or employment that may limit their availability to us.

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 expect to experienceare focused on developing our pipeline for future products. Our efforts will result in significant growth in the number of our consultants, advisors, and employees and the scope of our operations as we continue to develop and commercialize our current pipeline of intended products and new products.operations. In order to manage our anticipated future growth, we must continue to implement and improve our managerial, operational and financial systems, expand our facilities, and continue to recruit and train additional qualified personnel. Due to our limited resources, we may not be able to effectively manage the expansion of our operations or recruit and train additional qualified personnel. The expansion of our operations may lead to significant costs and may divert our management and business development resources. Any inability to manage growth could delay the execution of our business plan or disrupt our operations.

We have limited experience with direct sales and marketing and any failure to build and manage a direct sales and marketing team effectively, or to successfully engage third party providers for such services, could have a material adverse effect on our business.

Our products will require several dynamic and evolving sales models tailored to different worldwide markets, users and products. In 2015, we decided to focus our sales strategy on the clinical IVD market with the CE Marking of our first product in Europe. Following CE Marking of our first product in Europe we intend to enter the European markets and, following the completion of any necessary regulatory clearances, certain Asian markets. Even when we have received a CE Mark, we must still seek regulatory clearance in other jurisdictions. A failure to obtain these regulatory clearances in other jurisdictions could negatively affect our business. Pending completion of our review of the regulatory environment in the United States, including the effect of recent pronouncements regarding LDTs by the FDA, we aim initiallymay decide to enter the United States market through a technology license for LDT development in a CLIA labcertified laboratory in the United States. We intend to progressively grow to large volumes of tests sold to centralized laboratories and eventually reach the mass diagnostics testing market. The exact nature of the ideal sales strategy will evolve as we continue to develop our intended products and seek entry into the IVD markets. We have limited experience with direct sales and marketing and anywe currently intend to engage a network of distributors to help commercialize our products worldwide. Any failure to build and manage a direct sales and marketing team effectively, or to successfully engage third party providers for such services, could have a material adverse effect on our business.

There are significant risks involved in building and managing our sales and marketing organization, as well as identifying and negotiating deals with the right sales and distribution partners, including risks related to our ability to:

·

Identifyidentify appropriate partners;

·

Negotiatenegotiate beneficial partnership and distribution agreements;

·

Hirehire qualified individuals as needed;

·

Generategenerate sufficient leads within our targeted market for our sales force;

·

Provideprovide adequate training for effective sales and marketing;

·protect intellectual property rights; 

Retainretain and motivate our direct sales and marketing professionals; and

·

Effectivelyeffectively oversee geographically dispersed sales and marketing teams.

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Our failure to adequately address these risks could have a material adverse effect on our ability to increase sales and use of our future products, which would cause our revenues to be lower than expected and harm our results of operations.

Our Second Amended and Restated Certificate of Incorporation exculpates our officers and directors from certain liability to our Company and our stockholders.

Our Second Amended and Restated Certificate of Incorporation contains a provision limiting the liability of our officers and directors for their acts or failures to act, except for acts involving intentional misconduct, fraud or a knowing violation of law. This limitation on liability may reduce the likelihood of derivative litigation against our officers and directors and may discourage or deter our stockholders from suing our officers and directors based upon breaches of their duties to our Company.

We have identified material weaknesses in our internal control over financial reporting that have not yet been remediated, and 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.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. 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.

We have determined that we have material weaknesses in our internal control over financial reporting as of December 31, 2015.2017. See Item 9A,.Controls and Proceduresof our Annual Report on Form 10-K for the year ended December 31, 2015forthis reportfor a complete discussion of these material weaknesses in our internal control over financial reporting and remediation efforts. Although we are undertaking steps to address these material weaknesses, the existence of a material weakness is an indication that there is more than a remote likelihood that a material misstatement of our financial statements will not be prevented or detected in the current or any future period. There can be no assurance that we will be able to fully implement our plans and controls, as further described inItem 9A, to address these material weaknesses, or that the plans and controls, if implemented, will be successful in fully remediating these material weaknesses. In addition, we may in the future identify further material weaknesses in our internal control over financial reporting that we have not discovered to date. If we fail to successfully remediate the identified material weaknesses, or we identify further material weaknesses in our internal controls, the market’s confidence in our financial statements could decline and the market price of our common stock could be adversely impacted. 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.

Our independent registered public accountants have expressed substantial doubt about our ability to continue as a going concern. This opinion could materially limit our ability to raise additional funds by issuing new debt or equity securities or otherwise. If we fail to raise sufficient capital when needed, we will not be able to complete our proposed business plan. As a result we may have to liquidate our business and investors may lose their investments. Our ability to continue as a going concern is dependent upon our ability to successfully accomplish our plan of operations described herein, obtain financing and eventually attain profitable operations. Investors should consider our independent registered public accountant’s comments when deciding whether to invest in the Company.

Our management has broad discretion over the use of our available cash and might not spend available cash in ways that increase the value of your investment.

As of December 31, 2017, we had $10.1 million in combined cash and marketable securities compared to $21.7 million as of December 31, 2016. Our management currently 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. However, our management has broad discretion to pursue other objectives. You will be relying on the judgment of our management regarding the application and prioritization of our resources. Our management might not apply our cash in ways that increase or permit any return of your investment.

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Risks Associated with our Business

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.

We are in the process of developing a suite of diagnostic tests as well as additional products. To date, we have not placed any of our product prototypes on the clinical market. The successful development and commercialization of our intended products is critical to our future success. Our ability to successfully develop, manufacture, market, and sell our future products is subject to a number of risks, many of which are outside our control. There can be no assurance that we will be able to develop and manufacture products in commercial quantities at acceptable costs, successfully market any products, or generate revenues from the sale of any products. Failure to achieve any of the foregoing would have a material adverse effect on our business, financial condition, and results of operations.

Our business is dependent on our ability to successfully develop and commercialize diagnostic products. If we fail to develop and commercialize diagnostic products, we may be unable to execute our plan of operations.

Our current business strategy focuses on discovering, developing and commercializing diagnostic products. The success of our business will depend on our ability to fully develop and commercialize the diagnostic products in our current development pipeline as well as continue the discovery and development of other diagnostics products. Currently, we are heavily dependent on our Nu.Q colorectal cancer pipeline. The commercial success of our Nu.Q colorectal cancer pipeline will impact our ability to generate revenues.

Prior to commercializing the Nu.Q Colorectal Cancer Screening Triage Test and other diagnostic products, we will be required to undertake time-consuming and costly development activities with uncertain outcomes, including conducting clinical studies and obtaining regulatory clearance or approval in the United States and in Europe. Delays in obtaining approvals and clearances could have material adverse effects on us and our ability to fully carry out our plan of operations. We have limited experience in taking products through these processes and there are considerable risks involved in these activities. The science and methods that we are employing are innovative and complex, and it is possible that our development programs will ultimately not yield products suitable for commercialization or government approval. Products that appear promising in early development may fail to be validated in subsequent studies, and even if we achieve positive results, we may still fail to obtain the necessary regulatory clearances or approvals. Few research and development projects result in commercial products, and perceived viability in early clinical studies often is not replicated in later studies. At any point, we may abandon development of a product, or we may be required to expend considerable resources obtaining additional clinical and nonclinical data, which would adversely impact the timing for generating potential revenue from those products. Further, our ability to develop and launch diagnostic tests is dependent on our receipt of substantial additional funding. If our discovery and development programs yield fewer commercial products than we expect, we may be unable to execute our business plan, and our business, financial condition and results of operations may be adversely affected.

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.

As described above, we must conduct extensive testing of our product candidates and new indications of our marketed products before we can obtain regulatory approval to market and sell them. Success in pre-clinical studies or completed clinical trials does not ensure that later studies or trials, including continuing pre-clinical studies and large-scale clinical trials, will be successful nor does it necessarily predict future results. Favorable results in early studies or trials may not be repeated in later studies or trials, and product candidates in later stage trials may fail to show acceptable safety and efficacy despite having progressed through earlier trials. We may be required to demonstrate through large, long-term outcome trials that our product candidates are safe and effective for use in a broad population prior to obtaining regulatory approval. 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.

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.

We are subject to regulation and supervision by the FDA in the United States, the Conformité Européenne in Europe and other regulatory bodies in other countries where we intend to sell our future products. Before we are able to place our intended products in the clinical IVD markets in the United States and Europe, we will be required to obtain clearance or approval of our future products from the FDA and receive a CE Mark, respectively.

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The European Union has recently proposed termsadopted regulations that wouldmay impose additional requirements to obtain a CE Mark, which could result in delays and further expense, in terms of staff costs to us as compared to the current CE Mark approval process, as theprocess. The new regulations will require each product submission to be thoroughly audited by Notified Bodies, instead of the current self-certification process. The EU Medical Devices Regulation, or MDR and IVD Regulation, or IVDR, are both in the final stages of the legislative procedure and are estimated to be finished sometime in 2016, allowing them to come into effect by the end of 2016, or early 2017. Some time will be required to polishfully applicable in 2020 and the agreed text and have it translated into the official EU languages. DelaysIVDR will be fully applicable in obtaining approvals and clearances could have material adverse effects on us and our ability to fully carry out our plan of operations.2022.

Additionally, even if we receive the required government clearance or approval of our intended products, we are still subject to continuing regulation and oversight. Under the FDA, diagnostics are considered medical devices and are subject to ongoing controls and regulations, including inspections, compliance with established manufacturing practices, device-tracking, record-keeping, advertising, labeling, packaging, and compliance with other standards. The process of complying with such regulations with respect to current and new products can be costly and time-consuming. Failure to comply with these regulations could have a material adverse effect on our business, financial condition, and results of operations. 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 currently able to self-certify that they meet the appropriate regulatory requirements (which is subject to change with the EU MDR and the EU IVDR noted above) but are subject to inspection for enforcement. European national agencies, such as customs authorities and/or the Departments of Health, Industry and Labor, conduct market surveillance to ensure the applicable requirements have been met for products marketed within the European Union.

Recent announcements from the FDA may impose additional regulatory obligations and costs uponReductions or changes in reimbursement policies could limit our business.ability to sell our products.

On October 3, 2014, the FDA issued two draft guidance documents regarding oversight of laboratory developed tests, or LDTs, titled “Framework for Regulatory Oversight of LaboratoryDeveloped Tests (LDTs)”Market acceptance and “FDA Notification and Medical Device Reporting for Laboratory Developed Tests (LDTs).” According to this guidance, the FDA plans to take a phased-in risk-based approach to regulating LDTs. The FDA plans to phase in enforcement of LDT premarket review, quality system oversight and adverse event reporting over a number of years. The FDA would require that laboratories providing LDTs, subject to certain limited exemptions, within six months after the guidance documents are finalized comply with (i) either a new notification procedure in which the laboratory must provide the FDA with certain basic information about each LDT offered by their laboratory or the FDA’s device registration and listing requirements, and (ii) the medical device reporting, or MDR, requirements for LDTs offered by that laboratory. Under this new risk based approach, it is possible that some level of pre-market review may be required for our LDTs-either a 510(k) or PMA-which may require us to obtain additional clinical data.

If the FDA requires us to seek clearance or approval for anysales of our products (as opposed to simply licensingwill depend, in part, on reimbursement policies and may be affected by healthcare reform measures. Government authorities and third-party payors, such as private health insurers and health maintenance organizations, decide which products they will pay for and establish reimbursement levels for those products. To manage healthcare costs, many governments and third-party payors 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 technology to a CLIA lab),products and, if reimbursement is available, the level of such reimbursement. 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 obtain such approvals on a timely basis, or at all. The cost of conducting clinical trials and otherwise developing data and information to support any applications may be significant. Failure to comply with applicable regulatory requirements of the FDA could result in enforcement action, including receiving untitled or warning letters, fines, injunctions, or civil or criminal penalties. In addition, we could be subject to a recall or seizure of current orsuccessfully commercialize our future products, operating restrictions, partial suspension or total shutdown of production. Any such enforcement action would have a material adverse effect on our business, financial condition and operations.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 intended products may never gain significant acceptance in the research or clinical marketplace and therefore may never generate substantial revenue or profits. Physicians, hospitals, clinical laboratories, researchers or others in the healthcare industry may not use our future products unless they determine that they are an effective and cost-efficient means of detecting and diagnosing cancer. If our research and studies do not satisfy providers, payors and others as to the reliability and effectiveness, we may experience reluctance or refusal on the part of the physician to use our future products. In addition, we will need to expend a significant amount of resources on marketing and educational efforts to create awareness of our future products and to encourage their acceptance and adoption. If the market for our future products does not develop sufficiently or the products are not accepted, our revenue potential will be harmed.

The cancer diagnostics market is highly competitive and subject to rapid technological change; accordingly, we will face fierce competition and our intended products may become obsolete.

The cancer diagnostics market is extremely competitive and characterized by evolving industry standards and new product enhancements. Cancer diagnostic tests are technologically innovative and require significant planning, design, development, and testing at the technological, product, and manufacturing process levels. These activities require significant capital commitments and investment. There can be no assurance that our intended products or proprietary technologies will remain competitive following the introduction of new products and technologies by competing companies within the industry. Furthermore, there can be no assurance that our competitors will not develop products that render our future products obsolete or that are more effective, accurate or can be produced at lower costs. There can be no assurance that we will be successful in the face of increasing competition from new technologies or products introduced by existing companies in the industry or by new companies entering the market.

We expect to face intense competition from companies with greater resources and experience than us, which may increase the difficulty for us to achieve significant market penetration.

The market for cancer diagnostics is intensely competitive, subject to rapid change, and significantly affected by new product introductions and other market activities of industry participants. Our competitors include large multinational corporations and their operating units, including Abbott Laboratories Inc., Cepheid Inc., Philips, GE Healthcare, Siemens, Gen-Probe Incorporated, MDxHealth SA, EpiGenomics AG, Applied Proteomics Inc., Roche Diagnostics, Exact Sciences Corporation Sequenom, Inc. and several others. TheseMost of these companies have substantially greater financial, marketing and other resources than we do. EachMost of these companies isare either publicly traded or a division of a publicly traded company, and enjoysenjoy several competitive advantages, including:

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·

Significantlysignificantly greater name recognition;

·

Establishedestablished relationships with healthcare professionals, companies and consumers;

·

Additionaladditional lines of products, and the ability to offer rebates or bundle products to offer higher discounts or incentives to gain a competitive advantage;

·

Establishedestablished supply and distribution networks; and

·

Greatergreater resources for product development, sales and marketing, and intellectual property protection.

TheseMany of these other companies have developed and will continue to develop new products that will compete directly with our future products. In addition, many of our competitors spend significantly greater funds for the research, development, promotion, and sale of new and existing products. These resources may allow them to respond more quickly to new or emerging technologies and changes in consumer requirements. We also face competition in our search for third parties to assist us with sales and marketing and our product candidates, which may negatively impact our ability to enter into favorable sales and marketing arrangements. For all the foregoing reasons, we may not be able to compete successfully against our competitors.

Declining global economic or business conditions may have a negative impact on our business.

Continuing concerns over United States healthcare reform legislation and energy costs, geopolitical issues, the availability and cost of credit and government stimulus programs in the United States and other countries have contributed to increased volatility and diminished expectations for the global economy. These factors, combined with low business and consumer confidence and high unemployment precipitated a global economic slowdown and recession. If the economic climate does not improve or continues to deteriorate, our business, including our access to the RUO or clinical IVD markets for diagnostic tests, could be adversely affected, resulting in a negative impact on our business, financial condition and results of operations.

On June 23, 2016, the United Kingdom held a referendum in which voters approved an exit from the European Union, commonly referred to as “Brexit”. As a result of the referendum, the British government has begun to negotiate the terms of the United Kingdom’s future relationship with the European Union. Although it is unknown what those terms will be, it is possible that there will be greater restrictions on imports and exports between the European Union countries and the United Kingdom and increased regulatory complexities. These changes may adversely affect our ability to market our future products in the United Kingdom which could have an adverse effect on our business, financial condition, and results of operations.

We will rely on third parties to manufacture and supply our intended products. Any problems experienced by these third parties could result in a delay or interruption in the supply of our intended products to our customers, which could have a material negative effect on our business.

We will rely on third parties to manufacture and supply our intended products. The manufacture of our intended diagnostic products will require specialized equipment and utilize complicated production processes that would be difficult, time-consuming and costly to duplicate. If the operations of third party manufacturers are interrupted or if they are unable to meet our delivery requirements due to capacity limitations or other constraints, we may be limited in our ability to fulfill our future sales orders. Any prolonged disruption in the operations of third party manufacturers could have a significant negative impact on our ability to sell our future products, could harm our reputation and could cause us to seek other third party manufacturing contracts, thereby increasing our anticipated development and commercialization costs. In addition, if we are required to change manufacturers for any reason, we will be required to verify that the new manufacturer maintains facilities and procedures that comply with quality standards required by the FDA and with all applicable regulations and guidelines. 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.

The manufacturing operations of our future third party manufacturers will likely be dependent upon third party suppliers, making us vulnerable to supply shortages and price fluctuations, which could harm our business.

The operations of our future third party manufacturers will likely be dependent upon third party suppliers. A supply interruption or an increase in demand beyond a supplier’s capabilities could harm the ability of our future manufacturers to manufacture our intended products until new sources of supply are identified and qualified.

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Reliance on these suppliers could subject us to a number of risks that could harm our business, including:

·

Interruptioninterruption of supply resulting from modifications to or discontinuation of a supplier’s operations;

·

Delaysdelays in product shipments resulting from uncorrected defects, reliability issues, or a supplier’s variation in a component;

·

Aa lack of long-term supply arrangements for key components with our suppliers;

·

Inabilityinability to obtain adequate supply in a timely manner, or to obtain adequate supply on commercially reasonable terms;

·

Difficultydifficulty and cost associated with locating and qualifying alternative suppliers for components in a timely manner;

·

Productionproduction delays related to the evaluation and testing of products from alternative suppliers, and corresponding regulatory qualifications;

·

Delaydelay in delivery due to suppliers prioritizing other customer orders over ours;

·

Damagedamage to our brand reputation caused by defective components produced by the suppliers; and

·

Fluctuationfluctuation in delivery by the suppliers due to changes in demand from us or their other customers.

Any interruption in the supply of components of our future products or materials, or our inability to obtain substitute components or materials from alternate sources at acceptable prices in a timely manner, could impair our ability to meet the demand of our future customers, which would have an adverse effect on our business.

We will depend on third party distributors in the future to market and sell our future products which will subject us to a number of risks.

We will depend on third party distributors to sell, market, and service our future products in our intended markets. We are subject to a number of risks associated with reliance upon third party distributors including:

·

Lacklack of day-to-day control over the activities of third party distributors;

·

Thirdthird party distributors may not commit the necessary resources to market and sell our future products to our level of expectations;

·

Thirdthird party distributors may terminate their arrangements with us on limited or no notice or may change the terms of these arrangements in a manner unfavorable to us; and

·

Disagreementsdisagreements with our future distributors could result in costly and time-consuming litigation or arbitration which we could be required to conduct in jurisdictions with which we are not familiar.

If we fail to establish and maintain satisfactory relationships with our future third party distributors, our revenues and market share may not grow as anticipated, and we could be subject to unexpected costs which could harm our results of operations and financial condition.

If the patents that we rely on to protect our intellectual property prove to be inadequate, our ability to successfully commercialize our future products will be harmed and we may never be able to operate our business profitably.

Our success depends, in large part, on our ability to protect proprietary methods, discoveries and technologies that we develop under the patents and intellectual property laws of the United States, the European Union and other countries, so that we can seek to prevent others from unlawfully using our inventions and proprietary information. We have two patents17 patent families related to our diagnostic tests, with five patents granted in the United States; one patentStates and four patents granted in the European Union and three patents granted in other countries. We also hold an exclusive worldwide license to a patent granted in four other countries.Union. Additionally, we have 12 patent applications in the name of our subsidiaries pending in the United States and the 13 patent applications in the European UnionUnion.

If we are not able to protect our proprietary technology and other countries.information, our competitors may use our inventions to develop competing products. We cannot assure you that any of the pending patent applications will result in patents being issued. In addition, due to technological changes that may affect our future products or judicial interpretation of the scope of our patents, our intended products might not, now or in the future, be adequately covered by our patents.

If third parties assert that we have infringed their patents and proprietary rights or challenge the validity of our patents and proprietary rights, we may become involved in intellectual property disputes and litigation that would be costly, time consuming, and delay or prevent the development or commercialization of our future products.

Our ability to commercialize our intended products depends on our ability to develop, manufacture, market and sell our future products without infringing the proprietary rights of third parties. Third parties may allege that our future products or our methods or discoveries infringe their intellectual property rights. Numerous United States and foreign patents and pending patent applications, which are owned by third parties, exist in fields that relate to our intended products and our underlying methodologies, discoveries and technologies.

A third party may sue us for infringing its patent rights.

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Our ability to successfully commercialize our intended products depends on our ability to protect our proprietary technology and information. Likewise, we may need to resort to litigation to enforce a patent issued or licensed to us or to determine the scope and validity of third party proprietary rights. In addition, a third party may claim that we have improperly obtained or used its confidential or proprietary information. The cost to us of any litigation or other proceeding relating to intellectual property rights, even if resolved in our favor, could be substantial, and the litigation could divert our management’s attention from other aspects of our business. Some of our competitors may be able to sustain the costs of complex patent litigation more effectively than we can because they have substantially greater resources. Uncertainties resulting from the initiation and continuation of any litigation could limit our ability to continue our operations. Additionally, we cannot be certain of the level of protection, if any, that will be provided by our patents if they are challenged in court, where our competitors may raise defenses such as invalidity, unenforceability or possession of a valid license.

If we are found to infringe upon intellectual property rights of third parties, we might be forced to pay damages, potentially including treble damages. In addition to any damages we might have to pay, a court could require us to stop the infringing activity or obtain a license. Any license required under any patent may not be made available on commercially acceptable terms, if at all. In addition, such licenses are likely to be non-exclusive and, therefore, our competitors may have access to the same technology licensed to us. 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 future 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 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.

In addition to patented technology, we rely upon trade secret protection to protect our interests in proprietary know-how and for processes for which patents are difficult or impossible to obtain or enforce. We may not be able to protect our trade secrets adequately. Although we use reasonable efforts to protect our trade secrets, our employees, consultants, contractors and outside scientific advisors may unintentionally or willfully disclose our information to competitors. Enforcing a claim that a third party illegally obtained and is using any of our trade secrets is expensive and time consuming, and the outcome is unpredictable. In addition, courts outside the United States are sometimes less willing to protect trade secrets. We rely, in part, on non-disclosure and confidentiality agreements with our employees, consultants and other parties to protect our trade secrets and other proprietary technology. These agreements may be breached and we may not have adequate remedies for any breach. 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.

Defects in our products may subject us to substantial damages which could materially harm our business or financial condition.

The products we develop could lead to product liability claims based on allegations that one or more of our products contained a design or manufacturing defect which resulted in the failure to detect the disease for which it was designed. A product liability claim could result in substantial damages and be costly and time consuming to defend, either of which could materially harm our business or financial condition. We cannot assure you that our product liability insurance would protect our assets from the financial impact of defending a product liability claim. 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.

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Risks Associated with our Common Stock

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. We cannot assure you that the market prices of our common stock will not fluctuate or decline significantly in the future. Some of the factors that could negatively affect the prices of our shares or result in fluctuations in those prices or in trading volume of our common stock could include the following, many of which will be beyond our control:

·competition; 

competition;comments by securities analysts regarding our business or prospects; 

·

additions or departures of key personnel;

·

our ability to execute our business plan;

·issuance of common stock or other securities; 

operating results that fall below expectations;

·

loss of any strategic relationship;

·

industry developments;

·

economic and other external factors; and

·

period-to-period fluctuations in our financial results.

In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price and trading volume of our common stock.

Share ownership by our executive officers and directors make it more difficult for third parties to acquire us or effectuate a change of control that might be viewed favorably by other stockholders.

As of March 11, 2016,February 27, 2018, our executive officers and directors beneficially owned, in the aggregate, approximately 28.6%29.9% of our outstanding shares. As a result, if the executive officers and directors were to oppose a third party’s acquisition proposal for, or a change in control of, the Company, thesuch 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.

Our corporate governance documents, and certain corporate laws applicable to us, could make a takeover attempt, which may be beneficial to our stockholders, more difficult.

Our Board of Directors, or Board, has the power, under our articles of incorporation, to charter documents to:

issue additional shares of common stock and create and authorize the sale of one or more series of preferred stock without having to obtain stockholder approval for such action. As a result, our Board could authorize the issuance of shares of a series of preferred stock to implement a stockholders rights plan (often referred to as a poison pill) or could sell and issue preferred shares with special voting rights or conversion rights, which could deter or delay attempts by our stockholders to remove or replace management, and attempts of third parties either to engage in proxy contests or to acquire control of the Company. In addition, our charter documents:action; 

·

enable our Board to fill vacant directorships except for vacancies created by the removal of a director;

·

enable our Board to amend our bylaws without stockholder approval subject to certain exceptions; and

·

require compliance with an advance notice procedure with regard to business to be brought by a stockholder before an annual or special meeting of stockholders and with regard to the nomination by stockholders of candidates for election as directors.

These provisions may discourage potential acquisition proposals and could delay or prevent a change of control, including under circumstances in which our stockholders might otherwise receive a premium over the market price of our common stock.

We do not expect to pay dividends in the foreseeable future.

We have never declared or paid cash dividends on our common stock. We do not intend to declare dividends for the foreseeable future, as we anticipate that we will reinvest any future earnings in the development and growth of our business. Therefore, investors will not receive any funds unless they sell their common stock, and stockholders may be unable to sell their shares on favorable terms or at all. We cannot assure you of a positive return on investment or that you will not lose the entire amount of your investment in our common stock.

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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.

Our Second Amended and Restated Certificate of Incorporation and amendments thereto authorize the issuance of 100,000,000 shares of common stock, par value $0.001 per share and 1,000,000 shares of preferred stock, par value $0.001 per share. The future issuance of all or part of our remaining authorized common stock may result in substantial dilution in the percentage of our common stock held by our then existing stockholders. We may value any common stock or preferred stock issued in the future on an arbitrary basis. The issuance of common stock or preferred 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.

Future sales of our common stock could depress the market price of our common stock.

Sales 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 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.

The trading market for our common stock could be affected by whether and to what extent equity research analysts publish research or reports about us and our business. We cannot predict at this time whether any research analysts will cover us and our common stock or whether they will publish research and reports on us. If one or more equity analysts cover us and publish research reports about our common stock, the price of our stock could decline rapidly if one or more securities analysts downgrade our stock or if those analysts issue otheror offer unfavorable commentary or cease publishing reports about us.

If any of the analysts who elect to cover us downgrade their recommendation with respect to our common stock, our stock price could decline rapidly. If any of these analysts ceases coverage of us, we could lose visibility in the market, which in turn could cause our common stock price or trading volume to decline and our common stock to be less liquid.

We are a smaller reporting company and we cannot be certain if the reduced disclosure requirements applicable to smaller reporting companies will make our common stock less attractive to investors.

We are currently a “smaller reporting company,” meaning that we are not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent company that is not a smaller reporting company and have a public float of less than $75 million measured as of the last business day of our most recently completed second fiscal quarter and annual revenues of less than $50 million during the most recently completed fiscal year. “Smaller reporting companies” are able to provide simplified executive compensation disclosures in their filings; are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting; and have certain other decreased disclosure obligations in their SEC filings, including, among other things, only being required to provide two years of audited financial statements in annual reports. Decreased disclosures in our SEC filings due to our status as a “smaller reporting company” may make it harder for investors to analyze our results of operations and financial prospects.

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ITEM 1B.

UNRESOLVED STAFF COMMENTS

None.

ITEM 2.PROPERTIES

PROPERTIES

Our principal executive office isAs of December 31, 2017, we occupied approximately 17,300 square feet at our significant laboratory facility in Namur, Belgium, which facility we acquired in October 2016. The purchase price for the property was €1.2 million Euros, exclusive of any closing costs (See Note 10(c) to the Consolidated Financial Statements).

Listed below are our current facilities:

(1)Volition Diagnostics UK signed a fixed two-year lease for this property located at 93-95 Gloucester Place, London, W1U 6JQ, United Kingdom, commencing January 30, 2017, at an annual rent of £110,400 GBP. 

(2)Singapore Volition signed a one-year lease for this property, commencing August 1, 2017, located at 1 Scotts Road, #24-05 Shaw Centre, Singapore 228208. We have signed a one-year lease, commencing August 1, 2015,228208, at an annual rent of $20,861. We believe that this facility is adequate to meet our current needs. We additionally have an office in New York at an annual cost of approximately $4,000.SGD 29,519. 

Belgian Volition leases a laboratory and office space at 20A Rue de Séminaire, 5000, Namur, Belgium. We have signed a two-year lease, commencing December 1, 2014, at an annual rent of $60,201. Additionally, Belgian Volition shall pay $872 per month as a provision against expenses. Belgian Volition intends to move into a larger facility in the latter part of 2016, as our research and development activities have expanded over recent years.

Volition Diagnostics UK Limited signed a one year lease for office space at 83 Baker Street, London, W1U 6AN, United Kingdom, commencing January 25, 2016, at an annual rent of $82,222. We believe this is adequate to meet our current needs.

ITEM 3.

LEGAL PROCEEDINGS

In the ordinary course of business, we may be subject to claims, counter claims, suits and other litigation of the type that generally arise from the conduct of our business. We are not aware of any threatened or pending litigation that we expect will have a material adverse effect on our business operations, financial condition or results of operations.

ITEM 4.

MINE SAFETY DISCLOSURES

Not Applicable.

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PART II

ITEM 5.

MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Effective February 6, 2015, shares of ourOur common stock began tradingis currently traded on the NYSE MKTAmerican under the symbol “VNRX.” Prior to that our shares of common stock had been quoted on the OTC Bulletin Board under the symbol “VNRX.OB.” since October 11, 2011.“VNRX”.  The following table presents quarterly information onprovides for the periods indicated the high and low sales prices of the common stock furnished byper share as reported on the NYSE MKT or the high and low bid prices for the common stock furnished by the OTC Bulletin Board, as applicable, for the fiscal years ended December 31, 2015 and 2014. The quotations on the OTC Bulletin Board reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.American.

Holders

As at March 11 2016, an aggregate of 18,863,272February 27, 2018, there were 26,530,793 shares of our common stock were issued and outstanding and were ownedheld by approximately 186168 holders of record, based on information provided by our transfer agent.

Dividends

We have not declared or paid any cash dividends on our common stock since inception and presently anticipate that all earnings, if any, will be retained for development of our business and that no dividends on our common stock will be declared in the foreseeable future. Any future dividends will be subject to the discretion of our board of directors and will depend upon, among other things, future earnings, operating and financial conditions, capital requirements, general business conditions and other pertinent facts. Therefore, there can be no assurance that any dividends on our common stock will be paid in the future.

Securities Authorized for Issuance Under Equity Compensation Plans

See “Securities“Securities Authorized for Issuance Under Equity Compensation Plans” included under Part II,III, Item 12 of this report, which is incorporated by reference into this Item 5.

Recent Sales of Unregistered Securities

On or about November 18, 2015, 20,000 options under the Company’s 2011 Equity Incentive Plan, or the 2011 Plan, were exercised at $3.00 per shares in a cashless exercise that resulted in the issuance of 4,810 shares of common stock to one non-U.S. investor.†None.

On or about December 1, 2015, 8,000 warrants were exercised for total proceeds of $19,200. As a result, an aggregate total of 8,000 shares of common stock were issued at a price of $2.40 per share to one U.S. accredited investor.*

On or about December 2, 2015, 50,000 options under the Company’s 2011 Plan were exercised at $3.01 per shares in a cashless exercise that resulted in the issuance of 14,081 shares of common stock to one non-U.S. investor.†

On or about December 9, 2015, 50,000 options under the Company’s 2011 Plan were exercised at $3.01 per shares in a cashless exercise that resulted in the issuance of 14,166 shares of common stock to one non-U.S. investor.†

On or about December 14, 2015, 250,000 warrants were exercised at a price of $1.05 per share, giving cash proceeds to the registrant of $262,500. As a result, a total of 250,000 unregistered shares of common stock were issued to one non-U.S. investor.†

No underwriters were used in connection with any of the foregoing transactions. These issuances were deemed to be exempt from registration under the Securities Act in reliance on (i) Section 4(2) of the Securities Act, including in some cases, Regulation D and Rule 506 promulgated thereunder (as noted by *), and (ii) Rule 903 of Regulation S of the Securities Act, as transactions by an issuer not involving a public offering or sales completed in an “offshore transaction” as defined in Rule 902(h) of Regulation S, as we did not engage in any directed selling efforts in the United States in connection with the sale of the shares and each investor represented to us that the investor was not a “U.S. person” as defined in Regulation S (as noted by †).

On December 11, 2015 a registration statement on Form S-8 was filed registering all of the shares under the 2011 Plan.

Repurchase of Equity Securities

None.

ITEM 6.

SELECTED FINANCIAL DATA

We are currently a smaller reporting company and are not required to disclose this information.

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ITEM 7.

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

This Annual Report on Form 10-K contains forward-looking statements. These forward-looking statements are not historical facts but rather are based on current expectations, estimates and projections. We may use words such as “anticipate,” “expect,” “intend,” “plan,” “believe,” “foresee,” “estimate” and variations of these words and similar expressions to identify forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted. You should read this report completely and with the understanding that actual future results may be materially different from what we expect. The forward-looking statements included in this report are made as of the date of this report and should be evaluated with consideration of any changes occurring after the date of this report. We will not update forward-looking statements even though our situation may change in the future and we assume no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. The following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and the related notes and other financial information included elsewhere in this report.

Overview

We are a clinical-stage life sciences company focused on developing blood based diagnostic tests that meet the need for accurate, fast, cost effective and scalable tests for detecting and diagnosing cancer and other diseases. We have developed twenty eight blood-based assays to date to detect specific biomarkers that can be used individually or in combination to generate a profile which forms the basis of a test for a particular cancer or disease. We intend to commercialize our products in the future through various channels within the European Union, the United States and throughout the rest of the world likely beginning with China and India.

We are developing blood-based diagnostics for the most prevalent cancers, beginning with colorectal, lung and pancreatic cancer, using our Nucleosomics^® biomarker discovery platform. The platform employs a range of simple NuQ^® immunoassays on an industry standard ELISA format, which allow rapid quantification of epigenetic changes in biofluids (whole blood, plasma, serum, sputum, urine etc.) compared to other approaches such as bisulfite conversion and polymerase chain reaction, or PCR. NuQ^® biomarkers can be used alone, or in combination to generate profiles related to specific conditions. The first tranche of data released from a large independent trial for colorectal cancer could, if carried through into our screening or symptomatic trials, potentially have a positive impact for broad scale, cost effective, cancer diagnostics.

Management has identified the specific processes and resources required to achieve the near and medium term objectives of the Company’sour business plan, including personnel, facilities, equipment, research and testing materials including antibodies and clinical samples, and the protection of intellectual property. To date, operations have proceeded satisfactorily in relation to theour business plan. However it is possible that some resources will not readily become available in a suitable form or on a timely basis or at an acceptable cost. It is also possible that the results of some processes may not be as expected and that modifications of procedures and materials may be required. Such events could result in delays to the achievement of the near and medium term objectives of theour business plan, in particular the progression of clinical validation studies and regulatory approval processes for the purpose of bringing products to the IVD market.

We do not anticipate earning significantOur future as an operating business will depend on our ability to obtain sufficient capital contributions, financing and/or generate revenues until such time as we are ablemay be required to fully marketsustain our intendedoperations.  Management plans to address the above as needed by: (a) securing additional grant funds; (b) obtaining additional equity or debt financing; (c) grants of licensing rights to third parties in exchange for specified up-front and/or back end payments; and (d) developing and commercializing our products on the IVD market. For this reason, our auditors stated in their report on our most recent audited financial statements that our losses and negative cash flow from operations raise substantial doubt that we will be ablean accelerated timeline. Management continues to continue as a going concern without further financing. exercise tight cost controls to conserve cash.

Our ability to continue as a going concern is dependent upon our ability to successfully accomplish our planaccomplishment of operationsthe plans described herein, obtain financingin the preceding paragraph and eventually to attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern. 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. As of December 31, 2015, the Company2017, we had cash and cash equivalents of $5,916,006 and prepayments and other current assets of $306,649. The Company had current liabilities of $1,119,650. This represents a working capital surplus of $5,103,005.approximately $10.1 million.

The CompanyFor the year ended December 31, 2017, we used $8,766,323approximately $12.2 million in net cash from operating activities, compared to $8.9 million for the year ended December 31, 2015, compared to $4,140,825 for the year ended December 31, 2014.2016. The increase in cash used year over year was primarily due to an increase inincreased expenditures on research and development expenditureactivities, as well as increased general and legal costs associated with our up-listing onto the NYSE MKT. Please see “Results of Operations,” below for more detail.administrative activities, including increases in stock-based compensation and personnel expenses.

Net cash used in investing activities increasedwas $1.4 million and $0.4 million for the years ended December 31, 2017 and 2016, respectively. The increase in cash used in investing activities for the year over year by $49,254ended December 31, 2017 when compared to $352,243same period in the 2015 period, mainly as2016 was primarily a result of the purchase of equipment and facility improvements for the Nucleosomics® WO2005019826: Detection of Histone Modificationsnew research and development facility in Cell-Free Nucleosomes patent (i.e. the patent that underlies the NuQ^®-M tests) from Chroma Therapeutics Limited for $55,000.Belgium and investment in our information technology infrastructure.

Net cash provided by financing activities amounted to $12,882,602was approximately $2.0 million for the year ended December 31, 2015,2017, compared to $5,737,766$25.2 million for the year ended December 31, 2014.2016. The Company raised approximately $9.7 milliondecrease in net proceedscash provided by financing activities was primarily the result of a significant decrease in February 2015, when approximately 2.8 million shares of common stock were issued in a public offering at the time of our up-listing to the NYSE MKT. We also raised another $1.5 million from further issuances in a private placementcapital raising activities during the first quarter of 2015 and approximately $1.3 million from exercises of warrants and stock options in 2015. A capital lease for three Tecan machines resulted in an additional $223,152 being raised over this period. This resulted in an increase of cash of $3,777,042 for the year ended December 31, 2015,2017 offset by an increase in debt financing as compared to an increasethe prior year period.

The following table summarizes our approximate contractual payments due by period as of $1,250,260 for the year ended December 31, 2014.2017:

The Company leases three Tecan machines (automated liquid handling robots) under a lease classified as a capital lease. The(1)Loans Repayable includes the total cost of this leased laboratory equipment is $600,325. The capital lease is repayable over a five year period, ending in 2020. The present value of the minimum lease payments is $352,889. The Company additionally owns one Tecan machine which it purchased with cash in 2014.SOFINEX loan of €1.0 million Euros. See Note 10(k) to the Consolidated Financial Statements for the details.  

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We intend to use our cash reserves to predominantly fund further research and development activities. We do not currently have any substantial source of revenues and expect to rely onupon additional future financing through the saleto fully-fund our current strategic plan, which includes successfully commercializing a suite of diagnostic tests as well as additional equity securities, but there isproducts. We can provide no assurance that we will be successful in raising further funds.

In the event that additional financing is delayed, the Companywe will prioritize the maintenance of itsour research and development personnel and facilities, primarily in Belgium, and the maintenance of itsour patent rights. However theThe completion of clinical validation studies and regulatory approval processes for the purpose of bringing products to the IVD market would be delayed. 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.

Results of Operations

Comparison of the Years Ended December 31, 20152017 and December 31, 20142016.

The following table sets forth the Company’sour results of operations for the year ended on December 31, 20152017 and the comparative period for the year ended December 31, 2014.2016.

Revenues

The Company’sOur operations are still predominantly in the development stage.stage and we had no revenues during the years ended December 31, 2017 or 2016.

Operating Expenses

The Company’s totalTotal operating expenses increased $4,053,519, or 68%,to $15.0 million for the year ended December 31, 2017 from $12.4 million for the year ended December 31, 2016.

22

Research and Development Expenses

Research and development expenses increased to $8.9 million for the year ended December 31, 2017 from $7.9 million for the year ended December 31, 2016. This increase in 2015 compared to 2014. Total expenses are comprised of general and administrative expenses, professional fees, salaries and administrative fees andoverall research and development expenses.expenditures was primarily related to additional costs of $0.5 million due our participation in the 13,500 patient trial with the National Cancer Institute’s Early Detection Research Network in collaboration with the University of Michigan.

General and administrative expenses increased to $5.4 million for year ended December 31, 2017 from $4.2 million for the year ended December 31, 2016. The increase was primarily related to increase in stock-based compensation and increased personnel costs.

The Company’s generalSales and administrativeMarketing Expenses

Sales and marketing expenses increased $369,965, or 124%, in 2015 compared to 2014. A large proportion of this$0.8 million for year ended December 31, 2017 from $0.3 million for the year ended December 31, 2016. The increase iswas primarily related to increased personnel and increased stock-based compensation.

Other Income

Other income decreased to $0.3 million for the year ended December 31, 2017 from $0.5 million for the year ended December 31, 2016. The decrease was due to increased investor relations related travel and conference attendance expenses of $131,795, alongside an increase in insurance costs of $134,840.

Professional fees

The Company’s professional fees increased $1,072,543, or 201%, in 2015 compared to 2014. The Company incurred significant costs in relation to the up-listing to the NYSE MKT in February 2015. During 2015, there were increases in (i) legal fees of $567,734 in 2015 as a result of legal activity associated with the up-list to the NYSE MKT, capital raising activities and other contractual matters, (ii) investor relations services of $210,346, to raise the profile of the Company and (iii) NYSE MKT listing fees of $107,083 as compared to 2014.

Salaries and office administration fees

The Company’s salaries and office administration fees increased $553,316, or 51%, in 2015 compared to 2014. This is mainly explained by an increase in equity plan option amortization of $468,085, alongside an increase in salaries and fees of $402,085. There was additional compensation for senior executives of the Company and an additional director appointed in June 2014. A saving of $282,746 has been made due to a decrease in consultant warrants amortization.

Research and development

The Company’s research and development costs increased $2,057,695, or 51%, in 2015 compared to 2014. The Hvidovre Hospital study has incurred additional costs of $422,617. Antibody and sample costs increased by $1,398,460, due to the development and usage of new and increased amounts of antibodies. An increase in equity plan option amortization costs for research and development resources of $195,138 also contributed to the change.

Net other income/net other expenses

The Company recognized net other income of $470,873 in 2015, as compared to net other expenses of $2,261,329 in 2014. Net other income mainly consisted of $146,812 inless grant funds received from public bodies in respect of approved expenditures, where there is no obligation to repay as well as $339,744 recorded as a result of a gain on re-measurement of a derivative liability. For 2014, net other expenses mainly consisted of $143,987 in grant funds and a loss of $2,420,101 on the re-measurement of a derivative liability.2017 compared to 2016.

Net Loss

Net Loss

The Company’s net loss increased $1,316,713, or 16%, in 2015 compared to 2014.$14.8 million for the year ended December 31, 2017 from $11.9 million for the year ended December 31, 2016. The change is a result ofresulted from the factors described above.

Going Concern

We have not attained profitable operations and are dependent upon obtaining external financing to continue to pursue any extensive activities.our operational and strategic plans. For these reasons, our auditors stated in their report on our audited financial statementsmanagement has determined that they havethere is substantial doubt that wethe business will be able to continue as a going concern without further financing.

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Off-Balance Sheet Arrangements

We have no significant 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, collaborative agreements, liquidity, capital expenditures or capital resources that are material to stockholders.

Critical Accounting Policies

Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles, or U.S. GAAP, applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principlesGAAP 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 regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in the notes to our financial statements. In general, management’s estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.

We consider the following accounting policies to be critical:

Contractual ObligationsStock-Based Compensation

Not applicable.The Company records stock-based compensation in accordance with ASC 718,Compensation – Stock Compensation and ASC 505-50,Equity-Based Payments to Non-Employees. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued and are recognized over the employees required service period, which is generally the vesting period.

Impairment of Long-Lived Assets

In accordance with ASC 360,Property Plant and Equipment, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed of significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. 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, 2017 and December 31, 2016, respectively.

Foreign Currency Translation

The Company has functional currencies in the Euro, the United States Dollar and British Pounds Sterling and its reporting currency is the United States Dollar. Management has adopted ASC 830-20, “Foreign Currency Matters – Foreign Currency Transactions”. All assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. For revenues and expenses, the weighted average exchange rate for the period is used. Gains and losses arising on translation of foreign currency denominated transactions are included in Other Comprehensive Income (Loss).

Recently Issued Accounting Pronouncements

Not applicable.We have implemented all new accounting pronouncements that are in effect and applicable to us. We do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our financial position or results of operations.

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are currently a smaller reporting company and are not required to disclose this information.

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ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

VOLITIONRX LIMITED

Consolidated Financial Statements

For the Years Ended December 31, 20152017 and 20142016

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and StockholdersShareholders of VolitionRX Limited:

VolitionRx Limited

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of VolitionRxVolitionRX Limited (“the Company”) as of December 31, 20152017 and 2014,2016, and the related consolidated statements of operations and comprehensive loss, stockholders’ deficit,equity, and cash flows for each of the years in the two yeartwo-year period ended December 31, 2015. VolitionRx Limited’s management is responsible for these consolidated2017 and the related notes (collectively referred to as the “consolidated financial statements. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States)statements”). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of VolitionRx Limitedthe Company as of December 31, 20152017 and 2014,2016, and the results of its operations and its cash flows for each of the years in the two yeartwo-year period ended December 31, 2015,2017, in conformity with accounting principles generally accepted in the United States of America.

Explanatory Paragraph Regarding Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has suffered net losses since inception and has accumulated a significant deficit. These factors raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. Federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our Audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.  

/s/ Sadler, Gibb & Associates, LLC

We have served as the Company’s auditor since 2011.

Salt Lake City, UT

March 11, 20161, 2018  

office801.783.2950 

fax801.783.2960 

www.sadlergibb.com /Main: 2455 East Parley’s Way, Suite 320, Salt Lake City, UT 84109 /Provo: 3507 N University Ave #100, Provo UT 84604

F-2

VOLITIONRX LIMITED

Consolidated Balance Sheets

(Expressed in U.S. dollars)United States Dollars, except share numbers)

(The accompanying notes are an integral part of these consolidated financial statements)

F-3

VOLITIONRX LIMITED

Consolidated Statements of Operations and Comprehensive Loss

(Expressed in U.S. dollars)