ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion and
analysis together with our Consolidated Financial Statements and the notes thereto included elsewhere in this Form 10-K. This discussion
contains forward-looking statements that involve risks and uncertainties. For additional discussion, see “CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS” above.
Overview
We are a clinical-stage medical diagnostics company
developing rapid tests using whole blood on our Symphony platform (“Symphony”) to improve patient outcomes in critical care
settings, with a focus on sepsis. Our Symphony technology platform is an exclusively licensed, patented system that consists of an analyzer
and single-use protein detection cartridges that we believe, if cleared, authorized, or approved by the U.S. Food and Drug Administration
(“FDA”), could provide a solution to a significant market need in the United States. The Symphony device candidate is designed
to produce laboratory-quality results in approximately 20 minutes in critical care settings, including Intensive Care Units (“ICUs”)
and Emergency Rooms (“ERs”), where rapid and reliable results are required.
Since inception, we have incurred net losses
from operations each year and we expect to continue to incur losses for the foreseeable future. We incurred net losses of approximately
$6.8 million and $7.7 million for the years ended December 31, 2025 and 2024, respectively. We had negative cash flow from operating
activities of approximately $6.1 million and $7.8 million for the years ended December 31, 2025 and 2024, respectively, and had an accumulated
deficit of approximately $41.5 million and $34.7 million as of December 31, 2025 and 2024, respectively.
31
Results of Operations
Comparison of Years Ended December 31, 2025
and 2024
The following table sets forth our results of operations for the years
ended December 31, 2025 and 2024:
For Years Ended December 31,
Operating expenses:
Sales and marketing - 8,297
Other income (expense):
Deemed dividend on warrant modification - 13,223,053
Research and development
Research and development expenses decreased approximately
$0.4 million, or 12%, for the year ended December 31, 2025, as compared to 2024. The decrease in research and development expenses was
primarily due to a $0.2 million decrease in personnel related costs, a $0.1 million decrease in other costs, and a $0.2 million decrease
in product development costs, which was partially offset by a $0.1 million increase in clinical development costs.
The decrease in research and development expenses
was primarily due to a reduction in technology transfer efforts which offset increased clinical trial expenses. We expect future research
and development expenses to be focused on costs specifically associated with our clinical trial program supporting our regulatory strategy,
technology transfer efforts and any necessary manufacturing improvements.
General and administrative
General and administrative expenses increased
approximately $0.2 million, or 6%, for the year ended December 31, 2025, as compared to 2024. The increase in general and administrative
expenses is primarily due to a $0.3 million increase in Delaware franchise tax cost and a $0.1 million increase in personnel related costs,
with was partially offset by a $0.2 million decrease in consulting expenses.
We expect to monitor and continue to reduce our
general and administrative spend, as necessary, to optimize operational alignment.
32
Sales and marketing
Sales and marketing expenses decreased 100%, for
year ended December 31, 2025, as compared to 2024. The low sales and marketing expenses in 2025 are due to a reduction in spending in
all sales and marketing efforts.
Other income (expense)
Total other income (expense) decreased approximately
$0.7 million for the year ended December 31, 2025 as compared to 2024. The decreases primarily related to the $0.8 million in interest
expense associated with the 2024 Bridge Note Financing.
Deemed dividend on warrant modification
Upon stockholder approval of the issuance of Class
C Warrants and Class D Warrants on August 21, 2024, the Class C Warrants, which had an initial exercise price of $392.00 per share of
common stock, were adjusted to be exercisable at an exercise price of $65.20 per share and the number of shares of common stock issuable
upon exercise was proportionately increased to 343,146 shares. Concurrently, the number of shares of common stock issuable upon exercise
of the Class D Warrants increased to four shares per warrant for the remaining unexercised warrants. In connection with the reset in the
exercise price and number of shares issuable pursuant to exercise of the Class C Warrants and Class D Warrants, we recorded a deemed dividend
of $13,223,053 based on the excess of the fair value of the modified Class C Warrants and Class D Warrants over the fair value of the
Class C Warrants and Class D Warrants before the modification, the effect of which was an increase in the net loss attributable to common
shareholders in the statement of operations for the year ended December 31, 2024.
Summary Statement of Cash Flows
The following table sets forth the primary sources
and uses of cash and cash equivalents for each of the periods presented.
Years Ended December 31,
Cash proceeds provided by (used in):
Net cash used in operating activities
During 2025, we used approximately $6.1 million
in cash for operating activities, a decrease of approximately $1.8 million from 2024. The decrease in net cash used in operating activities
was primarily due to a decrease in the net loss and partially offset by the timing of payments to vendors and other decreases in working
capital during 2025.
Net cash used in investing activities
During 2025, we used approximately $0.2 million
in cash from investing activities, an approximately $0.1 million decrease from 2024. The Company acquired less manufacturing equipment
for the development of the Symphony devices in 2025 and 2024.
Net cash provided by financing activities
During 2025, we generated approximately $7.1 million
in cash from financing activities, as compared to $10.2 million in 2024. The decrease in net cash provided by financing activities was
primarily due to the proceeds from our private placements in April 2025 and October 2025 compared to our public offerings in January 2024
and June 2024.
33
Contractual Obligations
See Note 9 to consolidated financial statements
for our lease obligations and Note 10 to the consolidated financial statements for our other non-cancellable contractual obligations.
Liquidity and Going Concern
The Company had cash and cash equivalents of $5,164,875
and current liabilities of $1,119,197 on its balance sheet as of December 31, 2025. The Company has incurred net losses since its inception,
and has negative cash flows from operations and had an accumulated deficit of $41,517,267 as of December 31, 2025. The Company continues
to develop its Symphony device and its first test for the measurement of IL-6. The Company remains committed to obtaining FDA clearance
and hopes to conduct clinical trials to obtain sufficient data to support its FDA submission, while also continuing to build its manufacturing
operations with its contract manufacturing organizations. Current cash resources and expected operating expenses are considered in determining
its liquidity requirements. The Company estimates cash resources will be sufficient to fund its operations up to the third quarter of
2026. The Company will need additional capital to fund its planned operations for the next 12 months. These conditions raise substantial
doubt about the Company’s ability to continue as a going concern within one year from the date these financial statements are issued.
The consolidated financial statements for the
years ended December 31, 2025 and 2024 were prepared under the assumption that the Company will continue as a going concern, and do not
include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification
of liabilities that might result from the outcome of this uncertainty.
The Company expects that it will seek to raise
such additional capital through public or private equity offerings. Additional funds may not be available when it needs them on terms
that are acceptable to them, or at all. If adequate funds are not available, it may be required to delay its FDA regulatory strategy,
and to delay or reduce the scope of its research or development programs, its commercialization efforts or its manufacturing commitments
and capacity. In addition, if it raises additional funds through collaborations, strategic alliances or distribution arrangements with
third parties, it may have to relinquish valuable rights to its technologies or future revenue streams.
Recent Offerings
January 2024 Public Offering
On January 2, 2024, the Company sold in a public
offering (such transaction, the “January 2024 Offering”) (i) 336 shares of the Company’s common stock and (ii) prefunded
warrants to purchase up to an aggregate 1,346 shares of common stock (the “January Prefunded Warrants”). The Shares and January
Prefunded Warrants were sold together with warrants to purchase up to an aggregate of 1,682 shares of common stock at an exercise price
of $2,080.00 per share (the “January 2024 Warrants”). The combined public offering price was $2,080.00 per share of common
stock and related January 2024 Warrant and $2,079.84 per January Prefunded Warrant and related January 2024 Warrant.
As of December 31, 2024, all January Prefunded
Warrants have been exercised in full. The January 2024 Warrants are exercisable for a period of five years following the date of issuance.
Pursuant to an engagement letter, dated as of
August 7, 2023, as amended October 11, 2023, by and between the Company and the Placement Agent, the Company paid the Placement Agent
a total cash fee of $245,000 equal to 7.0% of the gross proceeds received in the January 2024 Offering. The Company also paid the Placement
Agent in connection with the January Offering a management fee of $35,000 equal to 1.0% of the gross proceeds raised in the January 2024
Offering and certain expenses incurred in connection with the January Offering. In addition, the Company issued to the Placement Agent,
warrants to purchase up to an aggregate 117 shares of common stock (the “January 2024 Placement Agent Warrants”), which represents
7.0% of the aggregate number of shares of common stock and Prefunded Warrants sold in the January 2024 Offering. The January 2024 Placement
Agent Warrants have substantially the same terms as the January 2024 Warrants, except that the January 2024 Placement Agent Warrants have
an exercise price equal to $2,600.00, or 125% of the offering price per share of common stock and related January 2024 Warrant sold in
the January Offering and expire on the fifth anniversary from the date of the commencement of sales in the January 2024 Offering.
The gross proceeds to the Company from the January
2024 Offering were $3,500,000. The Company incurred offering costs of $711,031.
34
May 2024 Bridge Note Financing
On May 31, 2024, the Company entered into a Note
Purchase Agreement with an accredited investor (the “NPA”), and a Securities Purchase Agreement with three accredited investors
(the “SPA”). Under the terms of the NPA, the investor provided the Company with a $1,000,000 cash subscription in exchange
for the issuance of a senior secured note. As of December 31, 2024, a total of $1,176,470 was repaid to the NPA investors. The difference
between such note and the subscription amount, initially recorded as a discount on the notes, was the result of the discount factor included
in the NPA of approximately 17.6%.
Under the terms of the SPA, the three investors
agreed to collectively provide the Company with a separate $1,000,000 cash subscription in exchange for the issuance of senior secured
notes ($333,333 each), and the collective issuance of 362 shares of the Company’s common stock. The fair value of the common stock
issued in connection with the SPA was $307,563. As of December 31, 2024, a total of $1,111,110 was repaid to the SPA investors. The difference
between such notes and the subscription amounts, initially recorded as a discount on the notes, was the result of the discount factor
included in the SPA of 11.11%.
Interest expense recorded on the NPA and SPAs
was $807,797 for the year ended December 31, 2024, including debt issuance costs related to the NPA and SPA totaling $212,654.
June 2024 Offering
On June 28, 2024, the Company sold in a public
offering ( the “June 2024 Offering”), (i) 2,888 common units (the “Common Units”), each consisting of one share
of common stock, two Class C Warrants and one Class D Warrant and (ii) 23,953 prefunded warrants (the “Prefunded Units”),
each consisting of one prefunded warrant to purchase one share of common stock (each, a “Prefunded Warrant”), two Class C
Warrants and one Class D Warrant to purchase Common Shares. Aegis Capital Corp. (“Aegis” or, the “Underwriter”)
partially exercised its over-allotment option in respect to 3,393 Class C Warrants and 1,696 Class D Warrants (the “Over-Allotment
Warrants”). The Common Units were sold at a price of $326.00 per unit and the Prefunded Warrants were sold at a price of $325.98
per unit. As of December 31, 2024, all Prefunded Warrants have been exercised in full.
Pursuant to an engagement letter dated June 6,
2024, by and between the Company and Aegis, the Company paid Aegis a total cash fee of $743,750 equal to 8.5% of the gross proceeds received
in the June 2024 Offering.
The gross proceeds to the Company from the June
2024 Offering were $8,569,075. The Company incurred offering costs of $1,133,419.
April 2025 Private Placement
On April 7, 2025, the Company entered into inducement
letter agreements with certain existing holders of the Company’s Class C Warrants, pursuant to which such holders agreed to purchase
an aggregate of 271,277 shares of the Company’s common stock (or, to the extent the applicable holder would have exceeded a specified
beneficial ownership limitation, prefunding the future exercise of such warrants, other than a remaining $0.0004 per share exercise price).
The Class C Warrants were originally issued on June 28, 2024 for an exercise price of $392.00 per share and were subsequently reduced
to $65.20 per share pursuant to stockholder approval on August 21, 2024. Pursuant to the inducement letter agreements, the applicable
holders agreed to exercise their Series C Warrants at a reduced exercise price of $13.68 per share, and to purchase an equivalent number
of new Class E Warrants for an additional $0.50 per share. The Class E Warrants have an exercise price of $13.68 per share and expire
on April 8, 2030.
The transaction closed on April 8, 2025. The exercise
of the Class C Warrants resulted in the Company issuing 170,551 shares of common stock at closing pursuant to the inducement letters,
and the exercise price of 100,726 of the Class C Warrants being amended to 0.0004 per share. As of December 31, all such reduced exercise
price Class C Warrants had been exercised.
The gross proceeds to the Company from the exercise
of the Class C Warrants and the sale of the new Class E Warrants were $3,846,692 million. The Company incurred total offering costs of
$464,670, including a 10% financial advisory fee to Aegis Capital Corp. of $384,670.
The modification of the terms or conditions of
the Class C Warrants in this transaction is treated as an exchange of the original instrument for a new instrument. Using the Black Scholes
option pricing model, the fair value of the Series C Warrants immediately prior to the inducement transaction was $479,299 and immediately
after the inducement transaction was $1,590,930. In addition, Series E Warrants with a fair value of $1,730,652 were provided as part
of the inducement transaction for a purchase price of $135,638. The Company recorded additional equity issuance costs of $2,706,645 related
to the modification of the Series C Warrants and issuance of Series E Warrants related to the inducement transaction. As this equity issuance
cost was a non-cash transaction, the Company recorded an increase to additional paid-in capital to offset the expense.
35
October 2025 Private Placement
On October 9, 2025, the Company entered
into a securities purchase agreement with two institutional investors pursuant to which the Company sold in a private placement (i) an
aggregate of 43,750 shares of common stock and prefunded warrants to purchase up to 518,750 shares of common stock (the “October
2025 Prefunded Warrants”), and (ii) Series F warrants (the “Series F Warrants”) to purchase up to 1,125,000 shares of
common stock. The combined price of the securities sold in the private placement was $8.00 per share of common stock (or prefunded warrant
in lieu thereof, in which case such price was reduced by $0.0004) and accompanying Series F Warrants to acquire two shares of common stock.
The October 2025 Prefunded Warrants, were exercisable for shares of common stock at an exercise price of $0.0004 per share and were immediately
exercisable, have all been fully exercised as of the date hereof. The Series F Warrants are exercisable for shares of common stock at
an exercise price of $7.00 per share, are immediately exercisable and expire five and one-half years from the date of issuance.
The transaction closed on October 10, 2025. The
gross proceeds to the Company from the sale of the securities sold in the private placement were approximately $4.5 million. The Company
incurred total offering costs of $787,755, including a 8% financial advisory fee to Rodman and Renshaw LLC (“Rodman”), the
placement agent, of approximately $360,000. Under the terms of the Company’s engagement letter with Rodman, the Company issue Rodman’s
designees warrants to purchase up to 45,000 of common stock at an exercise price of $10.00 per share, which expire 5.5 years from the
date of issuance (the “October 2025 Placement Agent Warrants”).
In connection with this private placement, the
Company filed a registration statement on Form S-3, which became effective on November 26, 2025, to register 1,732,500 shares of common
stock (including any shares of common stock issued in the future pursuant to the Series F Warrants or October 2025 Placement Agent Warrants)
for resale in public markets.
Critical Accounting Policies and Estimates
Some of our critical accounting policies require
us to make difficult, subjective or complex judgments or estimates. An accounting estimate is considered to be critical if it meets both
of the following criteria: (i) the estimate requires assumptions about matters that are highly uncertain at the time the accounting
estimate is made, and (ii) different estimates reasonably could have been used, or changes in the estimate that are reasonably likely
to occur from period to period may have a material impact on the presentation of our financial condition, changes in financial condition
or results of operations.
As an emerging growth company, we have elected
to opt-in to the extended transition period for new or revised accounting standards. As a result, our consolidated financial statements
may not be comparable to those of companies that comply with public company effective dates.
See Note 2 to consolidated financial statements for a summary of significant
accounting policies.
Recently Adopted Accounting Standards
See Note 2 to consolidated financial statements
(under the caption “Recently Adopted Accounting Standards”).
Recently Issued Accounting Standards
See Note 2 to consolidated financial statements
(under the caption “Recently Issued Accounting Standards”).
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Information requested by this Item is not applicable
as we are electing scaled disclosure requirements available to Smaller Reporting Companies with respect to this Item.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Our Consolidated Financial Statements and The
Report of Independent Registered Public Accounting Firm are included in this Form 10-K on pages F-1 through F-22.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
36
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our President and Chief Executive Officer, who
serves as our principal executive officer and our principal financial and accounting officer, has conducted an evaluation of the effectiveness
of the design and operation of our disclosure controls and procedures as of December 31, 2025. The term “disclosure controls and
procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company
that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act
is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or
submit under the Exchange Act is accumulated and communicated to our management, including our President and Chief Executive Officer,
to allow timely decisions regarding required disclosure. Based on this evaluation, our President and Chief Executive Officer concluded
that our disclosure controls and procedures were effective as of December 31, 2025.
Management’s Annual Report on Internal Control Over Financial
Reporting
Our management is responsible for establishing
and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange
Act). Our President and Chief Executive Officer, who serves as our principal executive officer and our principal financial and accounting
officer, assessed the effectiveness of our internal control over financial reporting as of December 31, 2025. In making this assessment,
our President and Chief Executive Officer used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission,
or COSO, in Internal Control—Integrated Framework. Based on that assessment and using the COSO criteria, our President and Chief
Executive Officer have concluded that, as of December 31, 2025, our internal control over financial reporting was effective.
Our independent registered public accounting firm
will not be required to formally attest to the effectiveness of our internal controls over financial reporting for as long as we are an
“emerging growth company” pursuant to the provisions of the Jumpstart Our Business Startups Act.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control
over financial reporting during the most recent fiscal quarter, that has materially affected, or is reasonably likely to materially affect,
our internal control over financial reporting.
Inherent Limitations of Controls
Management does not expect that our disclosure
controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. Controls and
procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management
necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Because of the inherent
limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of
fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making
can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual
acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls
also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will
succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes
in conditions, or deterioration in the degree of compliance with the policies or procedures. Because of the inherent limitations in a
cost-effective control system, misstatements due to error or fraud may occur and not be detected.
ITEM 9B. OTHER INFORMATION
During the three months ended December 31, 2025,
no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1
trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT
INSPECTIONS
Not applicable.
37
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information required by this item is hereby
incorporated by reference to our definitive proxy statement for our 2026 annual meeting of stockholders to be filed with the SEC within
120 days of the fiscal year ended December 31, 2025.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is hereby
incorporated by reference to our definitive proxy statement for our 2026 annual meeting of stockholders to be filed with the SEC within
120 days of the fiscal year ended December 31, 2025.
ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The information required by this item is hereby
incorporated by reference to our definitive proxy statement for our 2026 annual meeting of stockholders to be filed with the Securities
and Exchange Commission within 120 days of the fiscal year ended December 31, 2025.
Securities Authorized for Issuance under Equity Compensation Plans
The following table sets forth information regarding
our equity compensation plans at December 31, 2025:
Equity compensation plans approved by security holders (1) 10 $ 46,400.00 34
Equity compensation plans not approved by security holders (2) 27 $ 28,720.00 -
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information required by this item is hereby
incorporated by reference to our definitive proxy statement for our 2026 annual meeting of stockholders to be filed with the SEC within
120 days of the fiscal year ended December 31, 2025.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required by this item is hereby
incorporated by reference to our definitive proxy statement for our 2026 annual meeting of stockholders to be filed with the SEC within
120 days of the fiscal year ended December 31, 2025.
38
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The following documents are filed as part of this report:
(b) See the accompanying Index to Exhibits filed as a part of this Form 10-K.
(c) Other schedules are not applicable.
INDEX TO EXHIBITS
Exhibit No. Description of Document
39
40
101.SCH Inline XBRL Taxonomy Extension Schema Document
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document
* Filed herewith.
** Management contract or compensatory plan, contract or arrangement.
ITEM 16. FORM 10-K SUMMARY.
None.
41
SIGNATURES
Pursuant to the requirements
of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized on March 6, 2026.
Bluejay Diagnostics, Inc.
By: /s/ Neil Dey
Neil Dey
President, Chief Executive Officer and Director
Pursuant to the requirements
of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.
Signature Title Date
/s/ Neil Dey President, Chief Executive Officer and Director March 6, 2026
Neil Dey (Principal Executive Officer and
Principal Financial and Accounting Officer)
/s/ Donald R. Chase Chairman of the Board of Directors March 6, 2026
Donald R. Chase
/s/ Douglas C. Wurth Director March 6, 2026
Douglas C. Wurth
/s/ Svetlana Dey Director March 6, 2026
Svetlana Dey
/s/ Fred S. Zeidman Director March 6, 2026
Fred S. Zeidman
42
Index to Consolidated Financial Statements
Contents
Report of Independent Registered Public Accounting Firm (PCAOB ID #392) F-2
Consolidated Balance Sheets F-3
Consolidated Statements of Operations F-4
Consolidated Statements of Changes in Stockholders’ Equity F-5
Consolidated Statements of Cash Flows F-6
Notes to Consolidated Financial Statements F-7
F-1
Report of Independent Registered Public Accounting
Firm
To the Shareholders and the Board of Directors of Bluejay Diagnostics,
Inc.:
Opinion on the Financial Statements
We have audited the accompanying
consolidated balance sheets of Bluejay Diagnostics, Inc. (the “Company”) as of December 31, 2025 and 2024, the related consolidated
statements of operations, stockholders’ equity and cash flows for the years then ended, and the related notes to the consolidated
financial statements (collectively, the “financial statements”). In our opinion, the financial statements present fairly,
in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and
its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Emphasis of Matter Regarding Going Concern
The accompanying financial
statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements,
the Company has incurred net losses since its inception, and has negative cash flows from operations and will need additional funding
to complete planned development efforts. This raises substantial doubt about the Company’s ability to continue as a going concern.
Management’s plans in regard to these matters also are described in Note 1. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements
are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s 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 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 financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required
to obtain an understanding of internal control over financial reporting 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.
Our audits included performing
procedures to assess the risks of material misstatement of the 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
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 financial statements. We believe that our audits provide a reasonable basis for
our opinion.
/s/ Wolf & Company, P.C.
We have served as the Company’s auditor since 2017.
Boston, Massachusetts
March 6, 2026
F-2
Bluejay Diagnostics, Inc.
Consolidated Balance Sheets
December 31,
ASSETS
Current assets:
Assets held for sale 22,770 -
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Other non-current liabilities 4,540 8,567
Commitments and contingencies (Note 10)
Stockholders’ equity:
See report of independent registered public accounting
firm and notes to consolidated financial statements.
Reflects a 1-for 4 reverse stock split effective
January 29, 2026, a 1-for-50 reverse stock split effective November 18, 2024
and a 1-for-8 reverse stock split effective June 20, 2024.
F-3
Bluejay Diagnostics, Inc.
Consolidated Statements of Operations
For Years Ended December 31,
Operating expenses:
Sales and marketing - 8,297
Other income (expense):
Deemed dividend on warrant modification - 13,223,053
Weighted average common shares outstanding:
See report of independent registered public accounting
firm and notes to consolidated financial statements.
Reflects a 1-for-4 reverse stock split effective
January 29, 2026, a 1-for-50 reverse stock split effective November 18, 2024
and a 1-for-8 reverse stock split effective June
20, 2024.
F-4
Bluejay Diagnostics, Inc.
Consolidated Statements of Changes in Stockholders’
Equity
Common Stock Additional Paid-In Accumulated Total Stockholders’
Shares Amount Capital Deficit Equity
Stock-based compensation expense - - 20,094 - 20,094
Cash for fractional shares from reverse stock split - - (395 ) - (395 )
Stock-based compensation expense - - 6 - 6
Issuance of common stock for vested restricted stock units 4 - - - -
See report of independent registered public accounting
firm and notes to consolidated financial statements.
Reflects a 1-for-4
reverse stock split effective January 29, 2026, a 1-for-50 reverse stock split effective November 18, 2024
and a 1-for-8 reverse
stock split effective June 20, 2024.
F-5
Bluejay Diagnostics, Inc.
Consolidated Statements of Cash Flows
For the Years Ended December 31,
CASH FLOWS FROM OPERATING ACTIVITIES:
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense 6 20,094
Non-cash interest expense for note payable - 307,563
Write-off and impairment of property and equipment 42,937 3,411
Changes in operating assets and liabilities:
Deferred offering costs - 265,081
CASH FLOWS FROM INVESTING ACTIVITIES:
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of notes payable - 2,000,000
Repayment of notes payable - (2,000,000 )
Proceeds from exercise of Class D warrants - 558
Fractional shares adjustment for reverse stock split - (395 )
Payment of finance lease (4,027 ) (3,754 )
Fair value of common stock issued in connection with notes payable $ - $ 307,563
See report of independent registered public accounting
firm and notes to consolidated financial statements.
F-6
Bluejay Diagnostics, Inc.
Notes to the Consolidated Financial Statements
1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION
Business
Bluejay Diagnostics, Inc. (“Bluejay”
and/or the “Company”) is a medical diagnostics company focused on improving patient outcomes in critical care settings, with
a focus on sepsis. The Company is working on developing rapid, near-patient tests using whole blood on its Symphony technology platform
(“Symphony”), which consists of an analyzer and single-use protein detection cartridges. The Company does not yet have regulatory
clearance for Symphony, and it will need to receive regulatory authorization from the U.S. Food and Drug Administration (the “FDA”)
before Symphony can be marketed as a diagnostic product in the United States. The Company has completed the pre-clinical development of
the Symphony analyzer. During 2025, the Company transferred the intellectual property underlying the production of the Symphony cartridges
from the original developer and outside supplier, Toray Industries, to a contract manufacturing facility with FDA certification run by
Sanyoseiko. The Company is also working with Sanyoseiko to modify the manufacturing process of the Symphony cartridges to address certain
technical issues to bring Symphony to a level consistent with necessary performance and quality requirements for regulatory submission.
To achieve its plan, the Company expects to need to raise at least $20 million of further capital by the end of the 2027 fiscal year,
which the Company hopes to do in various tranches.
The Company’s Symphony platform is a combination
of Bluejay’s intellectual property (“IP”) and exclusively licensed and patented IP on the Symphony technology that the
Company believes if cleared, authorized, or approved by the FDA, could provide a solution to a significant market need in the United States.
The Symphony device candidate is designed to produce laboratory-quality results in approximately 20 minutes in critical care settings,
including Intensive Care Units (“ICUs”) and Emergency Rooms (“ERs”), where rapid and reliable results are required.
The Company’s first product candidate, the
Symphony IL-6 test, is an immunoassay for the measurement of interleukin-6 (IL-6) to be used for the monitoring of disease progression
in critical care settings. The Company is currently focused on pursuing the Symphony IL-6 test in the context of sepsis. 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
with determining a patient’s level of severity at triage and the Company believes that its Symphony IL-6 test, if ultimately successful
and approved, could have the ability to consistently monitor this critical care biomarker with rapid results.
If the Company succeeds with the foregoing plan,
in the future it hopes to develop additional tests for Symphony, including tests for myocardial infarction and congestive heart failure
(cardiac biomarkers hsTNT and NT pro-BNP) as well as other tests using the Symphony platform.
The Company was incorporated under the laws of
Delaware on March 20, 2015. Its headquarters are located in Acton, Massachusetts.
On June 4, 2021, the Company formed Bluejay Spinco,
LLC, a wholly-owned subsidiary of the Company, for purposes of further development of the Company’s ALLEREYE diagnostic test. ALLEREYE
is a point-of-care device offering healthcare providers a solution for diagnosing Allergic Conjunctivitis. The Company currently is not
actively pursuing development of the ALLEREYE diagnostic test.
FDA Regulatory Strategy
The design, development, manufacture, testing
and sale of the Company’s products in the U.S. are subject to regulation by numerous governmental authorities, principally the FDA,
and corresponding state and local regulatory agencies. 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, labeling and promotion, import and export, marketing
and sales, and distribution of medical devices.
The Company’s current regulatory strategy
is designed to support commercialization of Symphony in the United States if and when the Company receives marketing authorization from
the FDA. In May 2023, the Company submitted a pre-submission application to the FDA presenting study designs to validate Symphony IL-6
for use with hospitalized sepsis patients. The Company participated in a pre-submission meeting with the FDA in August 2023, and at the
meeting the FDA provided feedback on the 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, the Company determined to proceed on this
basis, which considers the FDA’s feedback.
In the second quarter of 2024, the Company completed
a multicenter SYmphony IL-6 MONitoring Sepsis (“SYMON”) clinical study investigating the role of interleukin-6 (IL-6) in patients
diagnosed with sepsis and septic shock. This prospective study assessed the performance of IL-6 upon initial presentation to the intensive
care unit (ICU). A primary endpoint of the SYMON-I pilot clinical study (registered clinical trial number NCT06181604) suggested that
IL-6 levels within 24 hours of sepsis or septic shock diagnosis and admission to the ICU may predict patient mortality out to 28 days.
Furthermore, a secondary endpoint of the SYMON-I study suggested that IL-6 levels within 24 hours of sepsis or septic shock diagnosis
and admission to the ICU is a predictor of patient mortality during their hospitalization. Other secondary endpoints suggested that lactate
and Sequential Organ Failure Assessment (SOFA), standard clinical tests used for sepsis and septic shock patients, were not predictors
of patient mortality out to 28 days. We believe that the findings underscore the potential importance of IL-6 as a predictor and provide
new insights into the potential pathways for improving sepsis outcomes.
F-7
Using the data analysis from the SYMON-I pilot
clinical study, the Company initiated the SYMON-II pivotal clinical study in the third quarter of 2024. The SYMON II clinical study has
three components: (1) collection, freezing, and biobanking of patient samples, (2) measuring IL-6 concentrations in the biobanked samples
near the end of patient enrollment or after the patient enrollment has completed, and (3) analysis of the IL-6 data with the patient outcomes
to see if the established IL-6 cutoff value has been validated for 28-day all-cause mortality. Patient enrollment started during the fourth
quarter of 2024. As of March 2, 2026, the Company has enrolled approximately 583 hospital patients among a target of 750 patients,
and it has collected, frozen and biobanked blood samples from the enrolled patients, while also obtaining all related patient data regarding
their disease progression and outcomes. The Company expects to complete patient enrollment in the study in the summer of 2026. The Company’s
goal is to use the Symphony IL-6 test to complete the testing in the SYMON-II clinical trial. The Company is not yet testing the samples
because it is simultaneously working with Sanyoseiko to manufacture the cartridges that will be used in the test, and these cartridges
are still being manufactured and verified to ensure that they meet FDA requirements for submission and commercial production. The Company’s
goal is to produce and verify these cartridges during 2026.
If the Company is able to complete the SYMON-II
clinical study and the results are positive, the Company intends to use the data generated from SYMON-II to support a 510(k) application
to the FDA. This application is currently expected to be based on the following intended use: “Symphony IL-6 is intended for use
to determine the IL-6 concentration as an aid in assessing the cumulative 28-day risk of all-cause mortality in conjunction with other
laboratory findings and clinical assessments for patients diagnosed with sepsis or septic shock in the ICU.” The Company also plans
to present the SYMON-I and SYMON-II results at future national scientific meetings and publish them in peer-reviewed journals, subject
to future completion of the SYMON-II study and the results being positive. Subject to achieving needed funding and successfully addressing
the manufacturing process challenges with its cartridges, the Company’s plan is to begin testing of samples it is collecting as
part of the SYMON-II clinical trial by the end of 2026, with a goal of being in position to submit a 510(k) regulatory application to
the FDA in 2027, and an objective of achieving FDA clearance thereafter.
The Company’s ability to engage in and complete
the activities needed for an FDA submission will be contingent upon it addressing these and other challenges, including possessing and/or
raising sufficient capital, remaining a going concern, and producing product capable of supporting our product requirements and meeting
analytical validation and clinical validation.
Product Manufacturing
The Company plans to manufacture its analyzers
and cartridges through Sanyoseiko Co. Ltd. (“Sanyoseiko”), as a contract manufacturing organization (“CMO”), and
the Company has entered into master supply and master service agreements with Sanyoseiko governing these matters. Pursuant to statements
of work that the Company will provide to Sanyoseiko under these agreements, Sanyoseiko will provide end-to-end support for the Symphony
platform, including supporting the manufacturing redevelopment process for analyzers and cartridges (with hardware, software, and design
updates), managing raw material sourcing and vendor compliance, and serving as the Company’s contract manufacturing organization
for analyzers, cartridges, and related components. In this capacity, Sanyoseiko will oversee fulfillment, kit assembly, labeling, packaging,
shipping, and quality control of manufactured products, while also providing regulatory and quality management support, and equipment
storage and maintenance.
Sanyoseiko had been selected as the Company’s
CMO due to their core competencies in manufacturing and quality systems recognized by the FDA. Sanyoseiko’s facilities are located
in Japan. The Company currently licenses the technology for the Symphony cartridges from Toray Industries, Inc. (“Toray”).
The Company’s license grants it exclusive global marketing rights, with the exception of Japan. The Company holds the rights to
manufacture the analyzers and the cartridges.
Risks and Uncertainties
As noted above, the Company will be reliant upon
its CMO, Sanyoseiko to provide analyzers and, once manufacturing processes have been redeveloped, cartridges, in sufficient quantity and
quality to complete the validations for its FDA application. The Company’s FDA application submission could be delayed if the Company
encounters any material supply interruptions. In addition, there can be no assurance that the Company will be able to obtain necessary
regulatory authorization for the manufacturing or marketing of the Symphony in the United States or elsewhere. There also can be no assurance
that the Company will successfully complete any clinical evaluations necessary to receive regulatory clearances, or that the clinical
study will demonstrate sufficient safety and effectiveness of the Symphony IL-6 test. The failure to adequately demonstrate the clinical
performance of the Symphony IL-6 test could delay or prevent regulatory clearance, which could prevent or result in delays to market launch
and could materially harm the Company’s business.
In addition to the FDA regulatory strategy risks
and uncertainties, the Company is subject to a number of risks similar to other companies in its industry, including rapid technological
change, competition from larger biotechnology companies and dependence on key personnel. Additional risk and uncertainties regarding the
Company are described in “Part I – Item 1A. Risk Factors” of this Annual Report on Form 10-K.
F-8
Reverse Stock Splits and Increase to Authorized
Capital
On July 24, 2023, the Company effected the first
reverse stock split of its shares of common stock at a ratio of 1-for-20 (the “July 2023 Reverse Stock Split”). On June 20,
2024, the Company effected a second reverse stock split of its shares of common stock at a ratio of 1-for-8 (the “June 2024 Reverse
Stock Split”). On November 18, 2024, the Company effected a third reverse stock split of its shares of common stock at a ratio of
1-for-50 (the “November 2024 Reverse Stock Split”). On January 29, 2026, the Company effected a fourth reverse stock split