UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒ANNUAL REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31,
2023
Or
☐TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number: 001-41031
Bluejay Diagnostics, Inc.
(Exact Name of Registrant as Specified in
Its Charter)
(Address of Principal Executive Offices) (Zip Code)
(844)327-7078
(Registrant’s Telephone Number, Including
Area Code)
Securities registered pursuant to Section 12(b)
of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, par value $0.0001 per share BJDX The Nasdaq Stock Market LLC
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 ☒
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 ☒
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 ☒ No ☐
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted 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 such
files). Yes ☒ No ☐
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.
See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”
and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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. ☐
If securities are registered pursuant to Section
12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction
of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error
corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s
executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant
has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report. Yes ☐ No ☒
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
The aggregate market value of the
registrant’s voting stock held by non-affiliates as of June 30, 2023, was approximately $3,030,130 based on the closing price
of the common stock of the registrant as reported on the Nasdaq Capital Market on such date. Shares of common stock held by each
executive officer and director and by each other person who may be deemed to be an affiliate of the registrant have been excluded
from this computation. The determination of affiliate status for this purpose is not necessarily a conclusive determination for
other purposes. As of March 28, 2024, there were 2,688,448 shares of the registrant’s common stock, par value $0.0001 per
share, outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
The registrant intends to file a definitive proxy
statement relating to its Annual Meeting of Stockholders within 120 days of the fiscal year ended December 31, 2023. Portions of such
definitive proxy statement are incorporated by reference in Part III of the Form 10-K to the extent described therein.
TABLE OF CONTENTS
Page
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS ii
SUMMARY OF RISK FACTORS iii
PART I 1
ITEM 1. BUSINESS 1
ITEM 1A. RISK FACTORS 8
ITEM 1B. UNRESOLVED STAFF COMMENTS 27
ITEM 1C. CYBERSECURITY 27
ITEM 2. PROPERTIES 28
ITEM 3. LEGAL PROCEEDINGS 28
ITEM 4. MINE SAFETY DISCLOSURES 28
ITEM 6. RESERVED 29
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 34
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 34
ITEM 9A. CONTROLS AND PROCEDURES 35
ITEM 9B. OTHER INFORMATION 35
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 35
PART III 36
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 36
ITEM 11. EXECUTIVE COMPENSATION 36
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES 36
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 37
i
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
We make forward-looking statements under the “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” and in other sections of this Annual Report on Form 10-K
(“Form 10-K”). In some cases, you can identify these statements by forward-looking words such as “may,” “might,”
“should,” “would,” “could,” “expect,” “plan,” “anticipate,” “intend,”
“believe,” “estimate,” “predict,” “potential” or “continue,” and the negative
of these terms and other comparable terminology. These forward-looking statements, which are subject to known and unknown risks, uncertainties
and assumptions about us, may include projections of our future financial performance based on our growth strategies and anticipated trends
in our business. These statements are only predictions based on our current expectations and projections about future events. There are
important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results,
level of activity, performance or achievements expressed or implied by the forward-looking statements.
While we believe we have identified material risks,
these risks and uncertainties are not exhaustive. Other sections of this Form 10-K may describe additional factors that could adversely
impact our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risks
and uncertainties emerge from time to time, and it is not possible to predict all risks and uncertainties, nor can we assess the impact
of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially
from those contained in any forward-looking statements.
Although we believe the expectations reflected
in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements.
Moreover, neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements.
You should not rely upon forward-looking statements as predictions of future events. We are under no duty to update any of these forward-looking
statements after the date of this Form 10-K to conform our prior statements to actual results or revised expectations, and we do not intend
to do so.
We caution you not to place undue reliance on
the forward-looking statements, which speak only as of the date of this Form 10-K in the case of forward-looking statements contained
in this Form 10-K.
You should not rely upon forward-looking statements
as predictions of future events. Our actual results and financial condition may differ materially from those indicated in the forward-looking
statements. We qualify all of our forward-looking statements by these cautionary statements. Although we believe that the expectations
reflected in the forward looking-statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.
Therefore, you should not rely on any of the forward-looking statements. In addition, with respect to all of our forward-looking statements,
we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of
1995.
SPECIAL NOTE REGARDING COMPANY REFERENCES
In this Form 10-K, and unless the context otherwise
requires, the “Company,” “we,” “us” and “our” refer to Bluejay Diagnostics, Inc. and its wholly-owned subsidiary
Bluejay Spinco, LLC, taken as a whole.
ii
SUMMARY OF RISK FACTORS
Our business is subject to a number of risks,
including risks that may prevent us from achieving our business objectives or may adversely affect our business, financial condition,
liquidity, results of operations and prospects. These risks are discussed more fully in Item 1A. Risk Factors. These risks include, but
are not limited to, the following:
● Product clearances and approvals can often be denied or significantly delayed.
iii
PART I
ITEM 1. BUSINESS
Overview
Bluejay Diagnostics, Inc. (“Bluejay”)
is a medical diagnostics company developing rapid tests using whole blood on our Symphony technology platform (“Symphony”)
to improve patient outcomes in critical care settings. Our Symphony platform is a combination of Bluejay’s intellectual property
(“IP”) and exclusively licensed and patented IP that consists of a mobile device and single-use test cartridges that if cleared,
authorized, or approved by the U.S. Food and Drug Administration (the “FDA”), can provide a solution to a significant market
need in the United States. Clinical trials indicate the Symphony device produces laboratory-quality results in less than 20 minutes in
critical care settings, including Intensive Care Units (“ICUs”) and Emergency Rooms (“ERs”), where rapid and reliable
results are required.
Our first product, the Symphony IL-6 test, is
for the monitoring of disease progression in critical care settings. IL-6 is a clinically established inflammatory biomarker, and is considered
a ‘first-responder,’ for assessment of severity of infection and inflammation across many disease indications, including sepsis.
A current challenge of healthcare professionals is the excessive time and cost associated determining a patient’s level of severity
at triage and our Symphony IL-6 test has the ability to consistently monitor this critical care biomarker with rapid results.
In the future we plan to develop additional tests
for Symphony including two cardiac biomarkers (hsTNT and NT pro-BNP) as well as other tests using the Symphony platform. We do not yet
have regulatory clearance for our Symphony products, and our Symphony products will need to receive regulatory authorization from the
FDA in order to be marketed as a diagnostic product in the United States.
Our operations to date have been funded primarily
through the proceeds of (i) our initial public offering (the “IPO”) on November 2021 (the “IPO Date”), (ii) the
registered direct offering of common stock and concurrent private placement of warrants that we completed on August 28, 2023, and (iii)
the public offering of common stock and warrants that we completed on January 2, 2024. We were incorporated under the laws of Delaware
on March 20, 2015. Our headquarters is located in Acton, Massachusetts.
Our Market
The Symphony platform and our initial biomarker
test, Symphony IL-6 test, is well suited to address a subset of the global in vitro diagnostics devices (“IVDs”) market,
including sepsis, cardio-metabolic diseases, cancer and other diseases that require rapid tests. Symphony targets critical care markets
where physicians must quickly determine patient acuity to identify optimal treatment regimens.
Our Business Model
Our goal is to become the first provider of rapid
tests for infectious, inflammatory and metabolic diseases by leveraging the strengths of our Symphony platform. We intend to target our
sales and marketing of Symphony to the largest critical care facilities in the United States. Our business model includes the following:
1
The Symphony Platform
The Symphony platform is an innovative and proprietary
technology platform that provides rapid and accurate measurements of key diagnostic biomarkers found in whole blood. Symphony is compact
and can be deployed mobile as compared to current laboratory diagnostic platforms. Symphony incorporates a user-friendly interface where
all sample preparation and reagents are integrated into disposable Symphony cartridges. Symphony only requires a few drops of blood to
provide a measurement in less than 20 minutes.
The Symphony analyzer orchestrates whole blood
processing, biomarker isolation, and immunoassay preparation using non-contact centrifugal force. All necessary reagents and components
are integrated into the Symphony cartridges. Utilizing precision microchannel technology and high specificity antibodies, whole blood
is processed, and the biomarker is isolated within the Symphony cartridge. Intermitted centrifugation cycles enable complex fluid movements,
allowing sequential reagent additions and independent reaction steps inside the hermitically sealed Symphony cartridge. At the conclusion
of the test, the Symphony analyzer measures the fluorescence signature correlating to a highly sensitive quantitation of the biomarker.
To perform a Symphony test, the test operator
adds three drops of blood to the Symphony cartridge. After scanning in the patient ID, the Symphony cartridge is inserted into the Symphony
analyzer and the test runs automatically. Each analyzer can run up to six cartridges simultaneously, either with six different patient
samples or six different tests, in less than 20 minutes, providing quantitative measurements used for improved patient management and
clinical decision-making.
Manufacturing
We plan to manufacture both our analyzers and
cartridges through Contract Manufacturing Organizations (“CMOs”). We have contracts with Toray Industries, Inc (“Toray”),
to license the intellectual property rights needed to manufacture our cartridges and Sanyoseiko Co. Ltd. (“Sanyoseiko”), to
manufacture both our analyzers and cartridges. Each of our partners are well-established global manufacturing companies with capabilities
to scale up, re-design and supply our analyzers and cartridges.
Sanyoseiko had been selected as our CMO, though
in the near-term Toray will continue to manufacture certain product intermediate components for use in cartridges being manufactured for
the Company by Sanyoseiko. These cartridges made using Toray intermediates are for the purpose of obtaining FDA approval and not for commercial
sale. We expect to meet the demands of our global market. Both Toray’s and Sanyoseiko’s facilities are located in Japan. We
license the technology for the Symphony cartridges from Toray. Our license grants us exclusive global use, with the exception of Japan.
FDA Regulatory Strategy
Our current regulatory strategy is designed to
support commercialization of Symphony in the United States pending marketing authorization from the FDA. Previously, our regulatory strategy
involved clinical studies involving COVID-19 patients. However, we have shifted our focus away from COVID-19 patients due to a significant
decline in the number of COVID-19 related hospitalizations. Pursuant to this revised strategy, we are beginning to conduct a clinical
study to support an FDA regulatory submission with an initial indication for risk stratification of hospitalized sepsis patients. We submitted
a pre-submission application to the FDA presenting the new study design in May 2023 and participated in a pre-submission meeting on August
11, 2023. At the meeting, the FDA provided feedback on the new study design, determined that the submission of a 510(k) is the appropriate
premarket submission pathway, and requested that certain data be provided in the 510(k). Based on this feedback, we determined to proceed
on this basis, which considers the FDA’s feedback.
In the first quarter
of 2024, we initiated the study at multiple sites, which the study is intended to use the Symphony IL-6 test to monitor IL-6 concentrations
in patients who are diagnosed with sepsis or septic shock and are admitted or intended to be admitted to the ICU. The objective of this
study is to establish IL-6 concentrations in these sepsis patients that best predict 28-day all-cause mortality. We expect that we will
need to bring several additional sites into the study in the future, which we believe will help support initial commercialization and
market penetration. We believe that this clinical trial expansion could also support additional indications, but that any such expansion
also could delay obtaining marketing authorization for the product. As a result of our lack of cash resources, we have recently slowed
the timeline of this study to preserve cash resources in the near-term, and we expect that this will delay our Symphony platform regulatory
submission timeline until 2025.
Sales and Marketing
Until Symphony products are authorized by the
FDA, we will focus our sales and marketing efforts on brand awareness and market education to potential customers, emphasizing the value
of monitoring a critical care patient’s IL-6 levels to improve decision making and patient outcomes. If cleared or approved by the
FDA, we will target sales to ERs and ICUs at United States hospitals, as well as to long-term acute care facilities. We plan to establish
a market presence by selling Symphony devices and tests both directly and through various distribution channels to maximize sales volume
and market penetration.
2
License Agreement
On October 6, 2020, we entered into a License
and Supply Agreement, as amended (the “License Agreement”), with Toray, providing us with an exclusive global license with
Toray, excluding Japan, to use their patents and know-how related to the Symphony detection cartridges for the manufacturing, marketing
and sale of the products (as defined in the License Agreement).
On October 23, 2023, we entered into an Amended
and Restated License Agreement (the “New Toray License Agreement”) and a Master Supply Agreement (the “New Toray Supply
Agreement” and, together, the “Toray Agreements”) with Toray. Under the New Toray License Agreement, we continue to
license from Toray intellectual property rights needed to manufacture single-use test cartridges, and we have received the right to sublicense
certain Toray intellectual property to Sanyoseiko in connection with our ongoing agreement with Sanyoseiko to manufacture our Symphony
analyzers and cartridges. In addition, the New Toray License Agreement provides for the transfer of certain technology related to the
cartridges to Sanyoseiko. The royalty payments we are required to pay Toray have been reduced under the New Toray License Agreement from
15% to 7.5% (or less in certain circumstances) of net sales of certain cartridges for a term of 10 years. A 50% reduction in the royalty
rate applies upon expiry of applicable Toray patents on a product-by-product and country-by-country basis. The New Toray License Agreement
contemplates that applicable royalty payment obligations from us to Toray for other products will be determined separately in the future.
Under the New Toray Supply Agreement, Toray will
manufacture in the near-term (through its wholly owned subsidiary Kamakura Techno-Science, Inc.) certain product intermediate components
for use in cartridges being manufactured for the Company by Sanyoseiko. These cartridges made using Toray intermediates are for the purpose
of obtaining FDA approval and not for commercial sale. The New Toray Supply Agreement has a term ending on the earlier of October 23,
2025 or the date that we obtain FDA approval for our product, and may be extended for up to six months by mutual agreement. Once FDA approval
has been obtained, the intermediates and cartridges will be manufactured by Sanyoseiko under a separate supply agreement between us and
Sanyoseiko. The FDA may not clear or approve these product submissions or applications on a timely basis or at all. Such delays or refusals
could have a material adverse effect on our business, financial condition, and results of operations.
Intellectual Property, Proprietary Technology
We do not currently hold any patents directly.
We rely on a combination either directly or through the License Agreement with Toray of patent, copyright, trade secret, trademark, confidentiality
agreements, and contractual protection to establish and protect our proprietary rights.
Competition
Our primary competition in the IL-6 market is
laboratory size equipment including the Roche Cobas®, Siemens ADVIA Centaur® and Beckman Coulter Access
2®, which require pre-processing of whole blood prior to performing their test. We believe that our technology, which uses
whole blood, provides us with a substantial competitive advantage over our existing competition that will sustain through commercialization,
despite the major life science companies and consistent entry of innovative start-ups that define our competitive landscape.
Government Regulation
The design, development, manufacture, testing
and sale of our products are subject to regulation by numerous governmental authorities, principally the FDA, and corresponding state
and foreign regulatory agencies.
FDA Regulation
Medical Devices
Generally, the products we develop must be cleared
by the FDA before they are marketed in the United States. Before and after approval, authorization, or clearance in the United States,
our products are subject to extensive regulation by the FDA, as well as by other regulatory bodies. FDA regulations govern, among other
things, the development, testing, manufacturing, labeling, safety, storage, recordkeeping, market clearance, authorization or approval,
advertising and promotion, import and export, marketing and sales, and distribution of medical devices, including IVDs. IVDs are a type
of medical device and include reagents and instruments used in the diagnosis or detection of diseases, conditions or infections, including,
without limitation, the presence of certain chemicals or other biomarkers. Predictive, prognostic and screening tests can also be IVDs.
3
In the United States, medical devices are subject
to varying degrees of regulatory control and are classified in one of three classes depending on the extent of controls the FDA determines
are necessary to reasonably ensure their safety and effectiveness:
● Class III: special controls and requires a premarket approval (“PMA”).
FDA Premarket Clearance and Approval Requirements
Unless an exemption applies, each medical device
commercially distributed in the United States requires either FDA clearance of a 510(k) premarket notification, approval of a de novo
application, or approval of a premarket approval (PMA).
While most Class I devices are exempt from
the 510(k) premarket notification requirement, manufacturers of most Class II devices are required to submit to the FDA a premarket
notification under Section 510(k) of the FDCA requesting permission to commercially distribute the device. The FDA’s permission
to commercially distribute a device subject to a 510(k) premarket notification is generally known as 510(k) clearance. Devices deemed
by the FDA to pose the greatest risks, such as life sustaining, life supporting or some implantable devices, or devices that have a new
intended use, or use advanced technology that is not substantially equivalent to that of a legally marketed device, are placed in Class III,
requiring approval of a PMA. Some pre-amendment devices are unclassified, but are subject to FDA’s premarket notification and clearance
process in order to be commercially distributed. Our initial product is a Class II device subject to 510(k) clearance.
510(k) Clearance Marketing Pathway
To obtain 510(k) clearance, a company must submit
to the FDA a premarket notification submission demonstrating that the proposed device is “substantially equivalent” to a predicate
device already on the market. A predicate device is a legally marketed device that is not subject to PMA, i.e., a device that was legally
marketed prior to May 28, 1976 (pre-amendments device) and for which a PMA is not required, a device that has been reclassified from
Class III to Class II or I, or a device that was found substantially equivalent through the 510(k) process. The FDA’s
510(k) clearance process usually takes from three to twelve months, but often takes longer. The FDA may require additional information,
including clinical data, to make a determination regarding substantial equivalence. In addition, the FDA collects user fees for certain
medical device submissions and annual fees for medical device establishments.
After a device receives 510(k) marketing clearance,
any modification that could significantly affect its safety or effectiveness, or that would constitute a major change or modification
in its intended use, will require a new 510(k) clearance or, depending on the modification, PMA approval. The FDA requires each manufacturer
to determine whether the proposed change requires submission of a 510(k) or a PMA in the first instance, but the FDA can review any such
decision and disagree with a manufacturer’s determination. If the FDA disagrees with a manufacturer’s determination, the FDA
can require the manufacturer to cease marketing and/or request the recall of the modified device until 510(k) marketing clearance or PMA
approval is obtained. Also, in these circumstances, the manufacturer may be subject to significant regulatory fines or penalties.
4
De Novo Classification
Devices of a new type that FDA has not previously
classified based on risk are automatically classified into Class III by operation of section 513(f)(1) of the FDCA, regardless of the
level of risk they pose. To avoid requiring PMA review of low- to moderate-risk devices classified in Class III by operation of law, Congress
enacted section 513(f)(2) of the FDCA. This provision allows FDA to classify a low- to moderate-risk device not previously classified
into Class I or II. After de novo authorization, an authorized device may be used as a predicate for future devices going through the
510(k) process.
The FDA has classified Symphony as de novo, a
device of a new type that the FDA has not previously classified. Once obtained, a de novo authorization may lead to Symphony’s use
as a predicate for future devices going through the 510(k) process.
Clinical Trials
Clinical trials are often required for a de novo
authorization. All clinical investigations of devices to determine safety and effectiveness must be conducted in accordance with the FDA’s
IDE regulations which govern investigational device labeling, prohibit promotion of the investigational device, and specify an array of
recordkeeping, reporting and monitoring responsibilities of study sponsors and study investigators. If the device presents a “significant
risk,” to human health, as defined by the FDA, the FDA requires the device sponsor to submit an IDE application to the FDA, which
must become effective prior to commencing human clinical trials. A significant risk device is one that presents a potential for serious
risk to the health, safety or welfare of a patient and either is implanted, used in supporting or sustaining human life, substantially
important in diagnosing, curing, mitigating or treating disease or otherwise preventing impairment of human health, or otherwise presents
a potential for serious risk to a subject. An IDE application must be supported by appropriate data, such as animal and laboratory test
results, showing that it is safe to test the device in humans and that the testing protocol is scientifically sound. The IDE will automatically
become effective 30 days after receipt by the FDA unless the FDA notifies the company that the investigation may not begin. If the FDA
determines that there are deficiencies or other concerns with an IDE for which it requires modification, the FDA may permit a clinical
trial to proceed under a conditional approval.
In addition, the study must be approved by, and
conducted under the oversight of, an Institutional Review Board (IRB) for each clinical site. The IRB is responsible for the initial and
continuing review of the IDE study and may pose additional requirements for the conduct of the study. If an IDE application is approved
by the FDA and one or more IRBs, human clinical trials may begin at a specific number of investigational sites with a specific number
of patients, as approved by the FDA. If the device presents a non-significant risk to the patient, a sponsor may begin the clinical trial
after obtaining approval for the trial by one or more IRBs without separate approval from the FDA, but must still follow abbreviated IDE
requirements, such as monitoring the investigation, ensuring that the investigators obtain informed consent, and labeling and record-keeping
requirements. Acceptance of an IDE application for review does not guarantee that the FDA will allow the IDE to become effective and,
if it does become effective, the FDA may or may not determine that the data derived from the trials support the safety and effectiveness
of the device or warrant the continuation of clinical trials. An IDE supplement must be submitted to, and approved by, the FDA before
a sponsor or investigator may make a change to the investigational plan that may affect its scientific soundness, study plan or the rights,
safety or welfare of human subjects.
During a study, the sponsor is required to comply
with the applicable FDA requirements, including, for example, trial monitoring, selecting clinical investigators and providing them with
the investigational plan, ensuring IRB review, adverse event reporting, record keeping and prohibitions on the promotion of investigational
devices or on making safety or effectiveness claims for them. The clinical investigators in the clinical study are also subject to FDA
regulations and must obtain patient informed consent, rigorously follow the investigational plan and study protocol, control the disposition
of the investigational device, and comply with all reporting and recordkeeping requirements. Additionally, after a trial begins, we, the
FDA or the IRB could suspend or terminate a clinical trial at any time for various reasons, including a belief that the risks to study
subjects outweigh the anticipated benefits.
Sponsors of applicable clinical trials of
devices also are required to register with www.clinicaltrials.gov, a public database of clinical trial information. Information
related to the device, patient population, phase of investigation, study sites and investigators and other aspects of the clinical
trial is made public as part of the registration. Although the FDA’s Quality System Regulation (QSR) does not fully apply to
investigational devices, the requirement for controls on design and development does apply.
5
Post-market Regulation
After a device is cleared or approved for marketing,
numerous and pervasive regulatory requirements continue to apply. These include:
● establishment registration and device listing with the FDA;
● requirements related to promotional activities;
Once we have a commercialized product, our manufacturing
processes will be required to comply with the applicable portions of the QSR, which cover the methods and the facilities and controls
for the design, manufacture, testing, production, processes, controls, quality assurance, labeling, packaging, distribution, installation
and servicing of finished devices intended for human use. The QSR also requires, among other things, maintenance of a device master file,
device history file, and complaint files. As a manufacturer, we are subject to periodic scheduled or unscheduled inspections by the FDA.
Our failure to maintain compliance with the QSR requirements could result in the shut-down of, or restrictions on, our manufacturing operations
and the recall or seizure of our products, which would have a material adverse effect on our business. The discovery of previously unknown
problems with any of our products, including unanticipated adverse events or adverse events of increasing severity or frequency, whether
resulting from the use of the device within the scope of its clearance or off-label by a physician in the practice of medicine, could
result in restrictions on the device, including the removal of the product from the market or voluntary or mandatory device recalls.
6
The FDA has broad regulatory compliance and enforcement
powers. If the FDA determines that we failed to comply with applicable regulatory requirements, it can take a variety of compliance or
enforcement actions, which may result in any of the following sanctions:
● unanticipated expenditures to address or defend such actions;
● operating restrictions, partial suspension or total shutdown of production;
● withdrawing a PMA that has already been granted;
● refusal to grant export approval for our products; or
● criminal prosecution.
Employees
As of March 28, 2024, we have 10 full-time
employees. We also contract with several consultants and contractors performing finance, accounting, regulatory advisory, investor relations
and manufacturing scale-up support. None of our employees are represented by labor unions or covered by collective bargaining agreements.
Reverse Stock Split
On July 24, 2023, we effected a reverse stock
split of our shares of common stock at a ratio of 1-for-20 (the “Reverse Stock Split”), with a corresponding reduction in
the number of authorized outstanding number of shares of common stock from 100,000,000 to 7,500,000. The Reverse Stock Split became effective
on July 24, 2023, when the Company’s common stock opened for trading on Nasdaq on a post-split basis under the Company’s existing
trading symbol, “BJDX.” All historical share and per share amounts reflected throughout this prospectus have been adjusted
to reflect the Reverse Stock Split. However, our periodic and current reports, and all other documents incorporated by reference into
this prospectus that were filed prior to July 24, 2023, do not give effect to the Reverse Stock Split.
Available Information
Our principal executive offices are located at
360 Massachusetts Avenue, Suite 203, Acton, MA 01720 and our telephone number is (844) 327-7078. Our website address is www.bluejaydx.com.
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports, proxy
statements and other information about us are made available, free of charge, through the Securities and Exchange Commission (“SEC”)
Filings section of our website at www.ir.bluejaydx.com/financial-information/sec-filings and at the SEC’s website at www.sec.gov
as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC. We include our website address
in this report only as an inactive textual reference and do not intend it to be an active link to our website. The contents of our website
are not incorporated into this report.
In addition, our Board of Directors has adopted
a written Code of Business Conduct and Ethics applicable to all officers, directors and employees, which is available through the “Governance
Overview” section of our website at www.ir.bluejaydx.com/corporate-governance/governance-overview. We intend to satisfy the disclosure
requirement under Item 5.05 of Form 8-K regarding amendment to, or waiver from, a provision of the Code of Business Conduct and Ethics
and by posting such information on the website address and location specified above.
7
ITEM 1A. RISK FACTORS
Investing in our securities carries a significant
degree of risk. You should carefully consider the risks described below, together with all of the other information in this Form 10-K,
including our consolidated financial statements and related notes included elsewhere in this Form 10-K, before deciding whether to invest
in our securities. If any or a combination of the following risks were to materialize, our results of operations, financial condition
and prospects could be materially adversely affected. If that were to be the case, the market price of our securities could decline, and
investors could lose all or part of their investment. The risks and uncertainties described below are not the only ones we face. Additional
risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect our business.
Risks Related to Our Financial Condition and
Capital Requirements
We have incurred significant losses since
inception and we will continue to incur net losses for the foreseeable future.
Since our inception, we have engaged primarily
in development activities, including planning and implementing clinical trials to support commercialization and FDA approval of our Symphony
platform. We have funded our operations primarily through debt and equity financings, and have incurred losses since inception, including
a net loss of approximately $9.8 million and approximately $9.3 million for the years ended December 31, 2023 and 2022, respectively.
We currently have no product revenue and we may
not be able to commercialize our Symphony technology platform or achieve significant revenues or profitability. Our ability to generate
revenue and achieve profitability depends upon our ability, alone or with others, to complete the development process of our product candidates,
including regulatory approvals, and thereafter achieve substantial acceptance in the marketplace for our products. We may be unable to
achieve any or all of these goals.
We will require additional funding to finance
our operations to continue as a going concern, which may not be available to us on acceptable terms, or at all, and our lack of cash resources
has slowed the timeline of our clinical trial work and could cause us to run out of cash resources in the near-term.
To date, we have relied primarily on private debt
and equity financing to carry on our business. We have limited financial resources, negative cash flow from operations and no assurance
that sufficient funding will be available to us to fund our operating expenses and to further our product development efforts and pursue
clinical trials for FDA approval. Based on these and other factors, in our audited consolidated financial statements for the years ended
December 31, 2023 and 2022, we concluded that this circumstance raised substantial doubt about our ability to continue as a going concern
within one year from the original issuance date of such financial statements. Similarly, in its report on the consolidated financial statements
for the years ended December 31, 2023 and 2022, our independent registered public accounting firm included an emphasis of matter paragraph
stating that our recurring losses from operations and continued cash outflows from operating activities raised substantial doubt about
our ability to continue as a going concern. Our consolidated financial statements for the years ended December 31, 2023 and 2022 do not
include any adjustments that may result from the outcome of this uncertainty.
Absent further funding, we currently expect to
run out of available cash resources during the third quarter of 2024. As such, we anticipate that we will need to raise additional capital
to fund our operations while we implement and execute our business plan. There can be no assurance that such additional capital will be
available on a timely basis or on terms that will be acceptable to us. We currently do not have any contracts or commitments for additional
financing. In addition, any additional equity financing may involve substantial dilution to our existing stockholders.
8
As a result of our lack of cash resources, we
have recently slowed the timeline of our clinical trial work to preserve cash resources in the near-term, and we expect that this will
delay our Symphony platform regulatory submission timeline until 2025. If we fail to obtain additional financing, this timeline could
be delayed further, and we could be forced to abandon such activities entirely, with the possible loss of such properties or assets. We
may also be forced to pursue strategic alternatives, such as a potential sale of the Company or its assets or other restructuring efforts.
As a result, any inability to obtain additional financing in the near-term could have a material adverse effect on our business, results
of operations, cash flow, financial condition and prospects.
The number of shares
of common stock underlying our outstanding warrants is significant in relation to our currently outstanding common stock, which could
have a negative effect on the market price of our common stock and make it more difficult for us to raise funds through future equity
offerings. In addition, in connection with any merger, consolidation or sale of all or substantially all of our assets, holders of our
outstanding warrants would be entitled to receive consideration in excess of their reported beneficial ownership of our common stock and
this could adversely impact the consideration our other stockholders would receive.
As part of our public
offerings of common stock in August 2023 and January 2024, we issued common stock warrants to purchase an aggregate of 2,908,308 shares
of our common stock, and pre-funded warrants to purchase up to an aggregate of 2,154,540 shares of our common stock. As of the date hereof,
the two holders of pre-funded warrants, Armistice Capital Master Fund Ltd. and Sabby Volatility Warrant Master Fund, have collectively
exercised pre-funded warrants to purchase 911,540 shares of common stock, and pre-funded warrants remain exercisable to purchase 1,243,000
shares of common stock. Each pre-funded warrant has an exercise price per share of common stock equal to $0.0001 per share, which has
previously been funded by the Company, and is exercisable from the date of issuance until exercised in full, and the exercise price has
previously been funded to the Company. Common stock warrants to purchase 216,000 shares of common stock are exercisable at a price of
$7.24 per share, and common stock warrants to purchase 2,692,308 shares of common stock are exercisable at a price of $1.30 per share.
Each common stock warrant is exercisable for five years from the date of issuance (until August 24, 2028 or January 2, 2029, respectively).
The common stock warrants
are generally only exercisable solely by means of a cash exercise. The common stock warrants include certain rights upon “fundamental
transactions” as described in the common stock warrants, including the right of the holders thereof to receive from us or a successor
entity the same type or form of consideration (and in the same proportion) that is being offered and paid to the holders of common stock
in such fundamental transaction in the amount of the Black Scholes value (as described in such common stock warrants) of the unexercised
portion of the applicable common stock warrants on the date of the consummation of such fundamental transaction. A holder of common stock
warrants (together with its affiliates) may not exercise any portion of a common stock warrant to the extent that the holder would beneficially
own more than 4.99% (or, at the election of the holder, 9.99%) of our outstanding common stock immediately after exercise.
Although these warrants
are subject to beneficial ownership limitations, upon exercise in full of the warrants, the shares issuable upon exercise would represent
a significant portion of our outstanding common stock. As a result, the holders of these warrants may be able to exert substantial influence
over our business. The concentration of voting power resulting from the exercise of the warrants could delay, defer or prevent a change
of control, or delay or prevent a merger, consolidation, takeover or other business combination involving us on terms that other stockholders
may desire. In addition, conflicts of interest could arise in the future between us, on the one hand, and the holders of these warrants,
concerning the issuance of additional securities and other matters. In addition, sales of these shares could cause the market price of
our common stock to decline significantly.
We have registered the
issuance of shares upon exercise of these warrants under registration statements. As a result, the shares issuable upon exercise of these
warrants can be freely sold in the public market upon issuance. Sales of these shares could cause the market price of our common stock
to decline significantly. Furthermore, if our stock price rises, the holders of these warrants may be more likely to exercise their warrants
and sell a large number of shares, which could negatively impact the market price of our common stock and reduce or eliminate any appreciation
in our stock price that might otherwise occur.
Given the amount and
terms of these warrants, we may find it more difficult to raise additional equity capital on favorable terms or at all while these warrants
are outstanding.
9
As a result of
our January 2024 public offering, we have reserved for issuance substantially all of our available authorized shares of common stock,
and will not be able to issue additional shares for future capital raising transactions or strategic transactions unless and until we
obtain stockholder approval to amend our restated certificate of incorporation to increase the number of authorized shares of common stock.
Under
our amended and restated certificate of incorporation, as amended, we have 7,500,000 shares of common stock and 5,000,000 shares
of preferred stock authorized for issuance. As of March 28, 2024, we had (i) 2,688,448 shares of common stock outstanding, (ii) zero shares
of preferred stock outstanding, (iii) 37,645 shares of common stock issuable upon the exercise of outstanding stock options or settlement
of outstanding restricted stock units, 4,523,454 shares of common stock issuable upon the exercise of outstanding warrants, and 53,490
shares reserved for future issuance under our 2018 Stock Incentive Plan or 2021 Stock Incentive Plan. As a result, as of such date, we
had only 196,963 additional authorized shares of common stock available for issuance (in addition to the 5,000,000 shares of preferred
stock that remain available). We intend to seek shareholder approval at our 2024 annual meeting of shareholders to amend our amended
and restated certificate of incorporation to further increase the number of authorized shares of common stock available for issuance.
Unless and until such amendment is approved by our shareholders, we will be limited in our ability to issue further shares of common stock,
including in connection with potential future capital raising transactions.
Our ability to
raise additional capital via a registered public offering on Form S-3 will be limited in the near-term as a result of the SEC’s
“baby shelf” rules.
In June 2023 we filed a shelf registration statement
on Form S-3, which was declared effective by the SEC on June 20, 2023 (the “Shelf Registration Statement”). The Shelf Registration
Statement allows us to sell from time to time up to $25 million of common stock, preferred stock, debt securities, debentures,
warrants, rights or units comprised of any combination of these securities, for our own account in one or more offerings. In August 2023,
we completed a public offering under the Shelf Registration Statement pursuant to which we raised gross proceeds of approximately $1.6
million. Under applicable SEC rules, smaller companies like us are only permitted to raise up to 1/3rd of their public float
under Form S-3 over a 12-month period. As a result, based on our current public float, we are unable to use Form S-3 for further offerings
by us at the present time, and absent a significant increase in the trading price of our common stock, we will be unable to raise further
capital under Form S-3 until late August of 2024 (at which time we will again be able to sell up to 1/3rd of our public float
pursuant to Form S-3, assuming we continue the applicable eligibility requirements thereof. Our inability to use Form S-3 in the near-term
may make it more difficult for us to raise equity capital in the public markets, as we expect to be required to conduct any such fundraising
via private placements, or sales on Form S-1, which sales of Form S-1 may be more difficult for us to execute in a timely manner.
We have received a notification letter from
the Nasdaq Listing Qualifications Staff that our common stock does not satisfy Nasdaq’s $1.00 minimum price per share rule and we
could face delisting by Nasdaq if we are unable to regain compliance with this requirement, which could adversely affect our ability to
sell stock in the public markets, the liquidity of our common stock and our general ability to raise additional capital.
Our common stock currently is listed for quotation
on the Nasdaq Capital Market. We are required to meet specified financial requirements in order to maintain such listing. On February
28, 2024, we received a notification letter from the Nasdaq Listing Qualifications Staff of the Nasdaq Stock Market LLC (“Nasdaq”)
notifying us that the closing bid price for our common stock had been below $1.00 for the previous 30 consecutive business days and that
we therefore are not in compliance with the minimum bid price requirement for continued inclusion on the Nasdaq Capital Market under Nasdaq
Listing Rule 5550(a)(2). The notification has no immediate effect on the listing of our common stock on the Nasdaq Capital Market.
10
Under the Nasdaq Listing Rules, we have a period
of 180 calendar days to regain compliance. To regain compliance, the closing bid price of our common stock must be at least $1.00 or higher
for a minimum of ten consecutive business days, and in such case, Nasdaq will provide us with written confirmation of compliance. If we
do not regain compliance by August 26, 2024, we may be eligible for an additional 180 calendar days, provided that we meet the continued
listing requirement for market value of publicly held shares and all other initial listing standards for Nasdaq, except the bid price
requirement. If we are not eligible or it appears to Nasdaq that we will not be able to cure the deficiency during the second compliance
period, Nasdaq will provide written notice to us that our common stock will be subject to delisting. In the event of such notification,
we may appeal Nasdaq’s determination to delist its securities, but there can be no assurance that Nasdaq would grant our request
for continued listing.
We intend to take all reasonable measures available
to us to achieve compliance to allow for continued listing on the Nasdaq Capital Market. However, there can be no assurance that we will
be able to regain compliance with the minimum bid price requirement or will otherwise be in compliance with other Nasdaq listing criteria.
If our common stock does not regain compliance with the minimum price requirement during the applicable compliance period, we may need
to effect a reverse stock split, whereby shares of our common stock are consolidated so that the per-share trading price becomes greater
than $1.00 per share. We intend to seek shareholder approval for such a reverse stock split at our 2024 annual meeting of shareholders.
If our common stock is delisted, we may seek to
have our common stock quoted on an over-the-counter marketplace, such as on the OTCQX. The OTCQX is not a stock exchange, and if our common
stock trades on the OTCQX rather than a securities exchange, there may be significantly less trading volume and analyst coverage of, and
significantly less investor interest in, our common stock, which may lead to lower trading prices for our common stock.
Any potential delisting
of our common stock from the Nasdaq Capital Market may have materially adverse consequences to our stockholders, including:
● limited dissemination of the market price of our common stock;
● limited news coverage;
● limited interest by investors in our common stock;
● volatility of the prices of our common stock, due to low trading volume;
11
Risks Related to Our Business
We are subject to the risks associated with
new businesses.
We are effectively a new business with a plan
to commercialize our licensed technology. Our limited operating history may not be adequate to enable you to fully assess our ability
to develop and market our Symphony platform and test cartridges, assuming we receive regulatory clearances, for which there is no assurance,
and respond to competition. Our efforts to date have related to the organization and formation of our Company, research and development
and performing clinical trials. We have no approved products, have not yet generated sustainable revenue, and we cannot guarantee we will
ever be able to generate future revenues. Therefore, we are, and expect for the foreseeable future to be, subject to all the risks and
uncertainties, inherent in a new business focused on the development and sale of new medical devices. As a result, we may be unable to
further develop, obtain regulatory approval for, manufacture, market, sell and derive revenues from our Symphony platform and test cartridges
and the other product candidates in our pipeline, and our inability to do so would materially and adversely impact our viability. In addition,
we still must optimize many functions necessary to operate a business, including expanding our managerial, personnel and administrative
structure, continuing product research and development, and assessing and commencing our marketing activities.
Accordingly, you should consider our prospects
in light of the costs, uncertainties, delays and difficulties frequently encountered by companies that have not yet commercialized their
products, particularly those in the medical device field. In particular, potential investors should consider that there is a significant
risk that we will not be able to:
● maintain our management team and Board of Directors;
● attract, enter into or maintain contracts with, and retain customers; and
In the event that we do not successfully address
these risks, our business, prospects, financial condition, and results of operations could be materially and adversely affected.
The New License
Agreement with Toray, which covers the license of the core technology used in our Symphony Cartridges, and the New Supply
Agreement with Toray, which covers the supply of cartridge intermediates from Toray to SanyoSeiko for SanyoSeiko to manufacture cartridges
for Bluejay, contain significant risks that may threaten our viability or otherwise have a material adverse effect on us and our business,
assets and its prospects.
We have an exclusive license with Toray for the
entire world, excluding Japan, to use their patents and know-how related to our Symphony test cartridges for the manufacturing, marketing
and sale of such products. We also have a nonexclusive license for manufacturing purposes in Japan. We have a right to sublicense these
Toray patents and know-how (upon either (a) obtaining consent from Toray prior to obtaining FDA approval or (b) giving notice to Toray
after obtaining FDA approval), and for the purpose of obtaining FDA approval, we will need to exercise this sublicence to have the cartridges
manufactured for Bluejay by a Japanese manufacturer, SanyoSeiko, Inc. (“SanyoSeiko”). We have no contractual rights to the
intellectual property covered in the New Toray License Agreement other than as expressly set forth therein. Our plans, business, prospects
and viability are substantially dependent on that intellectual property and subject to the limitations relating thereto as set forth in
the New Toray License Agreement. Some of the risks this may give rise to are described below.