UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2023
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to__________
Commission file number: 001-41031
Bluejay Diagnostics,
Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware |
|
47-3552922 |
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
(I.R.S. Employer
Identification No.)
|
360 Massachusetts Avenue, Suite
203, Acton, MA |
|
01720 |
(Address of Principal Executive
Offices) |
|
(Zip
Code) |
(844) 327-7078
(Registrant’s Telephone Number, Including Area
Code)
(Former Name, Former Address and Former Fiscal Year, if Changed
Since Last Report)
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 if any, every Interactive Data File required to be
submitted pursuant to Rule 405 of Regulation S-T 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
definitions of “large accelerated filer”, “accelerated filer”,
“smaller reporting company” and “emerging growth company” in Rule
12b-2 of the Exchange Act.
Large Accelerated Filer |
☐ |
Accelerated Filer |
☐ |
Non-Accelerated Filer |
☒ |
Smaller Reporting Company |
☒ |
|
Emerging Growth Company |
☒ |
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.
☐
Securities registered pursuant to Section 12(b) of the Exchange
Act:
Title of each class |
|
Trading Symbol(s) |
|
Name of each exchange on which
registered |
Common
Stock |
|
BJDX |
|
The
Nasdaq Capital Market LLC |
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
☒
The registrant had 20,459,057 shares of common stock
outstanding at May 5, 2023.
TABLE OF CONTENTS
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 Quarterly Report on Form
10-Q (this “Form 10-Q”). 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-Q
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-Q
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-Q in
the case of forward-looking statements contained in this Form
10-Q.
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.
EXPLANATORY NOTE
In this Form 10-Q, 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.
PART I - FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements.
Bluejay Diagnostics, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
|
|
March 31,
2023 |
|
|
December 31,
2022 |
|
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
6,781,911 |
|
|
$ |
10,114,990 |
|
Prepaid expenses and other current assets |
|
|
2,120,012 |
|
|
|
1,673,480 |
|
Total current
assets |
|
|
8,901,923 |
|
|
|
11,788,470 |
|
|
|
|
|
|
|
|
|
|
Property and
equipment, net |
|
|
1,519,722 |
|
|
|
1,232,070 |
|
Operating lease
right-of-use assets |
|
|
433,361 |
|
|
|
465,514 |
|
Other non-current assets |
|
|
33,443 |
|
|
|
35,211 |
|
Total
assets |
|
$ |
10,888,449 |
|
|
$ |
13,521,265 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts
payable |
|
$ |
388,045 |
|
|
$ |
635,818 |
|
Operating lease
liability, current |
|
|
168,709 |
|
|
|
168,706 |
|
Accrued expenses and other current liabilities |
|
|
863,397 |
|
|
|
835,730 |
|
Total current liabilities |
|
|
1,420,151 |
|
|
|
1,640,254 |
|
|
|
|
|
|
|
|
|
|
Operating lease
liability, non-current |
|
|
289,910 |
|
|
|
323,915 |
|
Other non-current liabilities |
|
|
14,970 |
|
|
|
15,823 |
|
Total liabilities |
|
|
1,725,031 |
|
|
|
1,979,992 |
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies (See
Note 13) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Common stock, $0.0001 par value; 100,000,000 shares authorized;
20,459,057 and 20,215,288 shares issued and outstanding at March
31, 2023 and December 31, 2022, respectively |
|
|
2,046 |
|
|
|
2,022 |
|
Additional
paid-in capital |
|
|
28,698,317 |
|
|
|
28,536,353 |
|
Accumulated deficit |
|
|
(19,536,945 |
) |
|
|
(16,997,102 |
) |
Total stockholders’ equity |
|
|
9,163,418 |
|
|
|
11,541,273 |
|
Total liabilities
and stockholders’ equity |
|
$ |
10,888,449 |
|
|
$ |
13,521,265 |
|
See notes to unaudited condensed consolidated financial
statements.
Bluejay Diagnostics, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
|
|
Three Months Ended
March 31, |
|
|
|
2023 |
|
|
2022 |
|
Operating expenses: |
|
|
|
|
|
|
Research and development |
|
|
1,354,549 |
|
|
|
694,757 |
|
General and
administrative |
|
|
1,176,977 |
|
|
|
1,319,819 |
|
Sales
and marketing |
|
|
148,046 |
|
|
|
53,685 |
|
Total operating expenses |
|
|
2,679,572 |
|
|
|
2,068,261 |
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
|
(2,679,572 |
) |
|
|
(2,068,261 |
) |
|
|
|
|
|
|
|
|
|
Other income: |
|
|
|
|
|
|
|
|
Other
income, net |
|
|
139,729 |
|
|
|
54,858 |
|
Total other income |
|
|
(139,729 |
) |
|
|
(54,858 |
) |
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(2,539,843 |
) |
|
$ |
(2,013,403 |
) |
|
|
|
|
|
|
|
|
|
Net
loss per share - Basic and diluted
|
|
$ |
(0.12 |
) |
|
$ |
(0.10 |
) |
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
20,375,092 |
|
|
|
20,142,300 |
|
See notes to unaudited condensed consolidated financial
statements.
Bluejay Diagnostics, Inc.
Condensed Consolidated Statements of Changes in Stockholders’
Equity
(Unaudited)
|
|
Stockholders’ Equity |
|
|
|
Common Stock |
|
|
Additional Paid-In |
|
|
Accumulated |
|
|
Total Stockholders’ |
|
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Equity |
|
Balance at December 31,
2022 |
|
|
20,215,288 |
|
|
$ |
2,022 |
|
|
$ |
28,536,353 |
|
|
$ |
(16,997,102 |
) |
|
$ |
11,541,273 |
|
Stock-based compensation expense |
|
|
-
|
|
|
|
-
|
|
|
|
54,730 |
|
|
|
-
|
|
|
|
54,730 |
|
Grants of fully vested restricted stock units to settle accrued
bonus, net of shares withheld |
|
|
243,769 |
|
|
|
24 |
|
|
|
107,234 |
|
|
|
-
|
|
|
|
107,234 |
|
Net loss |
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,539,843 |
) |
|
|
(2,539,843 |
) |
Balance at March
31, 2023 |
|
|
20,459,057 |
|
|
$ |
2,046 |
|
|
$ |
28,698,317 |
|
|
$ |
(19,536,945 |
) |
|
$ |
9,163,418 |
|
|
|
Stockholders’ Equity |
|
|
|
Common Stock |
|
|
Additional Paid-In |
|
|
Accumulated |
|
|
Total Stockholders’ |
|
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Equity |
|
Balance at December 31, 2021 |
|
|
20,112,244 |
|
|
$ |
2,011 |
|
|
$ |
28,074,484 |
|
|
$ |
(7,694,786 |
) |
|
$ |
20,381,709 |
|
Impact of
adoption of ASC 842 |
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(5,368 |
) |
|
|
(5,368 |
) |
Stock-based compensation expense |
|
|
-
|
|
|
|
-
|
|
|
|
126,086 |
|
|
|
-
|
|
|
|
126,086 |
|
Exercise of common stock Series B Warrants |
|
|
39,000 |
|
|
|
4 |
|
|
|
(4 |
) |
|
|
-
|
|
|
|
-
|
|
Net loss |
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,013,403 |
) |
|
|
(2,013,403 |
) |
Balance at March 31, 2022 |
|
|
20,151,244 |
|
|
$ |
2,015 |
|
|
$ |
28,200,566 |
|
|
$ |
(9,713,557 |
) |
|
$ |
18,489,024 |
|
See notes to unaudited condensed consolidated financial
statements.
Bluejay Diagnostics, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
|
|
Three Months Ended
March 31, |
|
|
|
2023 |
|
|
2022 |
|
CASH FLOWS FROM OPERATING
ACTIVITIES: |
|
|
|
|
|
|
Net Loss |
|
$ |
(2,539,843 |
) |
|
$ |
(2,013,403 |
) |
Adjustments to reconcile net loss to
net cash used in operating activities: |
|
|
|
|
|
|
|
|
Depreciation
expense |
|
|
120,017 |
|
|
|
39,971 |
|
Stock-based
compensation expense |
|
|
219,589 |
|
|
|
126,086 |
|
Amortization of
right-of-use asset |
|
|
40,328 |
|
|
|
28,238 |
|
Changes in
operating assets and liabilities: |
|
|
|
|
|
|
|
|
Inventory |
|
|
-
|
|
|
|
(893,174 |
) |
Prepaid expenses
and other current assets |
|
|
(446,532 |
) |
|
|
309,958 |
|
Other
non-current assets |
|
|
1,768 |
|
|
|
788 |
|
Accounts
payable |
|
|
(314,773 |
) |
|
|
421,058 |
|
Due to related
party |
|
|
-
|
|
|
|
(2,000 |
) |
Accrued expenses and other current liabilities |
|
|
(14,161 |
) |
|
|
105,223 |
|
Net cash used in operating activities |
|
|
(2,933,607 |
) |
|
|
(1,877,255 |
) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
Purchase of
property and equipment |
|
|
(340,669 |
) |
|
|
(46,346 |
) |
Net cash used in investing activities |
|
|
(340,669 |
) |
|
|
(46,346 |
) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Payment of tax withholding obligations
on restricted stock units |
|
|
(57,601 |
) |
|
|
-
|
|
Payment of
finance lease |
|
|
(1,202 |
) |
|
|
-
|
|
Net cash used in financing activities |
|
|
(58,803 |
) |
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Decrease in cash and cash
equivalents |
|
|
(3,333,079 |
) |
|
|
(1,923,601 |
) |
Cash and cash
equivalents, beginning of period |
|
|
10,114,990 |
|
|
|
19,047,778 |
|
Cash and cash
equivalents, end of period |
|
$ |
6,781,911 |
|
|
$ |
17,124,177 |
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION AND NON-CASH
FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
Liabilities incurred for the purchase
of property and equipment |
|
$ |
67,000 |
|
|
$ |
-
|
|
See notes to unaudited condensed consolidated financial
statements.
Bluejay Diagnostics, Inc.
Notes to the Condensed Consolidated Financial
Statements
(Unaudited)
1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION
Business
Bluejay Diagnostics, Inc. (“Bluejay” or the “Company”) 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. The Company’s 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 intensive
care units and emergency rooms, where rapid and reliable results
are required.
Bluejay’s 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, 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 the Symphony IL-6 test has the ability to consistently
monitor this critical care biomarker with rapid results.
In the future Bluejay plans to develop additional tests for
Symphony including two cardiac biomarkers (hsTNT and NT pro-BNP),
as well as other tests using the Symphony platform. The Company
does not yet have regulatory clearance for its Symphony products,
and its Symphony products will need to receive regulatory
authorization from the FDA in order to be marketed as a diagnostic
product in the United States.
Bluejay’s operations to date have been funded primarily through the
proceeds of the Company’s initial public offering (the “IPO”) in
November 2021 (the “IPO Date”).
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.
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. The Company is also impacted by inflationary
pressures and global supply chain disruptions currently impacting
many companies.
On October 25, 2022, the Company received a notification letter
from the Nasdaq Listing Qualifications Staff of The Nasdaq Stock
Market LLC (“Nasdaq”) notifying the Company that the closing bid
price for its common stock had been below $1.00 for the previous 30
consecutive business days and that the Company therefore is 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 the Company’s common stock on the Nasdaq Capital Market. The
Company intends to take all reasonable measures available to
achieve compliance and allow for continued listing on the Nasdaq
Capital Market. However, there can be no assurance that the Company
will be able to regain compliance with the minimum bid price
requirement or will otherwise be in compliance with other Nasdaq
listing criteria.
Going Concern
The Consolidated Financial Statements for the years ended March 31,
2023 and 2022 were prepared under the assumption that the Company
will continue as a going concern, which contemplates that the
Company will be able to realize assets and discharge liabilities in
the normal course of business. However, 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. These conditions raise substantial doubt about
the Company’s ability to continue as a going concern.
The Company had cash and cash equivalents of $6.8 million at March
31, 2023. It continues to develop the Symphony device and its first
test for the measurement of IL-6. It remains committed to obtaining
FDA clearance and is expanding clinical trials to obtain additional
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 requirement;
as well as $1.4 million of current liabilities on its balance sheet
at March 31, 2023 and capital commitments of approximately $2.5
million as of March 31, 2023 (see Notes 8 and 9). The Company
estimates cash resources will be sufficient to fund its operations
into the fourth quarter of 2023. The Company will need additional
capital to fund its planned operations for the next 12 months.
The Company may seek to raise such additional capital through
public or private equity offerings, grant financing and support
from governmental agencies, convertible debt, collaborations,
strategic alliances and distribution arrangements. 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 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.
Basis of Presentation
The accompanying unaudited condensed consolidated financial
statements of the Company have been prepared in conformity with
generally accepted accounting principles in the United States (“US
GAAP”) consistent with those applied in, and should be read in
conjunction with, the Company’s audited financial statements and
related footnotes for the year ended December 31, 2022 included in
the Company’s Annual Report on Form 10-K. The unaudited condensed
consolidated financial statements reflect all adjustments, which
include only normal recurring adjustments, necessary for the fair
presentation of the Company’s financial position as of March 31,
2023, its results of operations and cash flows for the three months
ended March 31, 2023 and 2022, in accordance with US GAAP. The
unaudited condensed consolidated financial statements do not
include all of the information and footnotes required by US GAAP
for complete financial statements, as allowed by the relevant U.S.
Securities and Exchange Commission (“SEC”) rules and regulations;
however, the Company believes that its disclosures are adequate to
ensure that the information presented is not misleading. The
condensed consolidated financial statements include the accounts of
the Company and its wholly owned subsidiary. All intercompany
balances and transactions have been eliminated in
consolidation.
The results for the three months ended March 31, 2023 are not
necessarily indicative of the results that may be expected for the
fiscal year ending December 31, 2023, or any other interim period
within this fiscal year.
2. SIGNIFICANT ACCOUNTING POLICIES
During the three months ended March 31, 2023, there were no changes
to the significant accounting policies as described in the 2022
Audited Financial Statements.
Use of estimates
The preparation of financial statements in conformity with U.S.
GAAP requires management to make estimates and assumptions that
affect the amounts and disclosures reported in these condensed
consolidated financial statements and accompanying notes. Actual
results could differ materially from those estimates. The Company
believes judgment is involved in accounting for the fair
value-based measurement of stock-based compensation, accruals, and
warrants. The Company evaluates its estimates and assumptions as
facts and circumstances dictate. As future events and their effects
cannot be determined with precision, actual results could differ
from these estimates and assumptions, and those differences could
be material to the condensed consolidated financial statements.
Stock-based compensation
Share-based compensation expense for all share-based payment awards
made to employees, directors and non-employees is measured based on
the grant-date fair value of the award. Share-based compensation
expense for awards granted to non-employees is determined using the
fair value of the consideration received or the fair value of the
equity instruments issued, whichever is more reliably measured.
The Company uses the Black-Scholes option pricing model to
determine the fair value of options granted. The Company recognizes
the compensation cost of share-based awards on a straight-line
basis over the requisite service period. For stock awards for which
vesting is subject to performance-based milestones, the expense is
recorded over the implied service period after the point when the
achievement of the milestone is probable, or the performance
condition has been achieved.
The Company recognizes forfeitures related to employee share-based
payments when they occur. Forfeited options are recorded as a
reduction to stock compensation expense.
Research and development expenses
Costs incurred in the research and development of new products are
expensed as incurred. Research and development costs include, but
are not limited to, salaries, benefits, stock-based compensation,
laboratory supplies, fees for professional service providers and
costs associated with product development efforts, including
preclinical studies and clinical trials.
The Company estimates preclinical study and clinical trial expenses
based on the services performed, pursuant to contracts with
research institutions and clinical research organizations that
conduct and manage preclinical studies and clinical trials on its
behalf.
Segment Reporting
Management has determined that the Company has one operating
segment, which is consistent with the Company structure and how it
manages the business. As of March 31, 2023 and December 31, 2022,
all of the Company’s assets were located in the United States.
Net Loss per Share
Basic net loss per share is computed by dividing the net loss by
the weighted-average number of shares of common stock outstanding
for the period, without consideration for potentially dilutive
securities. Diluted net loss per share is computed by dividing the
net loss by the weighted average number of shares of common stock
and dilutive common stock equivalents outstanding for the period
determined using the treasury stock and if-converted methods.
Dilutive common stock equivalents are comprised of convertible
preferred stock, convertible notes, options outstanding under the
Company’s stock option plan and warrants. For all periods
presented, there is no difference in the number of shares used to
calculate basic and diluted shares outstanding as inclusion of the
potentially dilutive securities would be antidilutive.
Potentially dilutive securities not included in the calculation of
diluted net loss per share because to do so would be anti -dilutive
are as follows (in common stock equivalent shares):
|
|
March 31, |
|
|
|
2023 |
|
|
2022 |
|
Options to purchase common
stock |
|
|
739,835 |
|
|
|
806,065 |
|
Restricted stock units |
|
|
197,500 |
|
|
|
- |
|
Warrants for common stock |
|
|
811,882 |
|
|
|
811,882 |
|
Class A warrants for common stock |
|
|
2,484,000 |
|
|
|
2,484,000 |
|
Class B warrants for common stock |
|
|
75,400 |
|
|
|
76,500 |
|
Recently Adopted Accounting Standards
In October 2021, the FASB issued ASU No. 2021-08, Business
Combinations (Topic 805): Accounting for Contract Assets and
Contract Liabilities from Contracts with Customers (“ASU 805”),
an amendment of the ASC. The amendments to ASU 805 address
diversity and inconsistency related to the recognition and
measurement of contract assets and contract liabilities acquired in
a business combination and require that an acquirer recognize and
measure contract assets and contract liabilities acquired in
accordance with ASC 2014-09, Revenue from Contracts with
Customers (Topic 606) (“ASC 606”). Under GAAP, an acquirer
generally recognizes assets and liabilities assumed in a business
combination, including contract assets and liabilities arising from
revenue contracts with customers, at fair value on the acquisition
date. ASU No. 2021-08 will result in the acquirer recording
acquired contract assets and liabilities on the same basis that
would have been recorded by the acquiree before the acquisition
under ASC 606. The Company adopted this new standard on January 1,
2023. The new standard had no impact on the Company’s consolidated
statements of operations or cash flows.
3. LICENSE AND SUPPLY AGREEMENT WITH TORAY INDUSTRIES
On October 6, 2020, the Company entered into a License and Supply
Agreement (“License Agreement”) with Toray Industries, Inc.
(“Toray”). Under the License Agreement, the Company received the
exclusive license (outside of Japan) to make and distribute protein
detection cartridges that have a function of automatic stepwise
feeding of reagent (the “Cartridges”). In addition, following the
first sale of the Cartridges after regulatory approval, the Company
will make royalty payments to Toray equal to 15% of the net sales
of the Cartridges for the period that any underlying patents exist
or five years after the first sale. Following the first sale after
obtaining regulatory approval, the Company will make minimum annual
royalty payments of $60,000 for the first year and $100,000 for
each year thereafter, which shall be creditable against any
royalties owed to Toray in such calendar year. There were no sales
of or revenues from the Cartridges during the three-month periods
ended March 31, 2023 and 2022.
At March 31, 2023 and December 31, 2022, there were no amounts
accrued related to the License Agreement.
4. WARRANTS
The following table summarizes information with regard to warrants
outstanding at March 31, 2023:
|
|
Shares |
|
|
Exercisable for |
|
Weighted Average Exercise Price |
|
|
Weighted Average Remaining Life (in Years) |
|
Common Stock Warrants |
|
|
811,882 |
|
|
Common Stock |
|
$ |
3.24 |
|
|
|
2.8 |
|
Class A Warrants |
|
|
2,484,000 |
|
|
Common Stock |
|
$ |
7.00 |
|
|
|
3.6 |
|
Class B Warrants |
|
|
75,400 |
|
|
Common Stock |
|
$ |
10.00 |
1 |
|
|
3.6 |
|
1 |
Class
B Warrants may also exercise such warrants on a “cashless” basis.
See Class A Warrants and Class B Warrants subsection
below. |
No warrants were issued during the three months ended March 31,
2023 and 2022.
Class A Warrants and Class B Warrants
In conjunction with the Company’s IPO in November 2021 the Company
issued 2,160,000 Class A Warrants and 2,160,000 Class B Warrants.
Additionally, the underwriter of the IPO exercised their
overallotment option, solely with respect to the Class A Warrants
and Class B Warrants, shortly after the IPO Date resulting in an
additional issuance of 324,000 Class A Warrants and 324,000 Class B
Warrants. From the net IPO proceeds, $5,164,751 and $7,323,161,
respectively, were apportioned to the Class A Warrants and Class B
Warrants.
Class A Warrants entitle the holder to purchase one share of common
stock at an exercise price of $7.00 per share. As of March 31, 2023
and 2022 all Class A Warrants were outstanding.
Class B Warrants entitle the holder to purchase one share of common
stock at an exercise price of $10.00 per share. Holders of Class B
Warrants may also exercise such warrants on a “cashless” basis
after the earlier of (i) 10 trading days from closing date of the
offering or (ii) the time when $10.0 million of volume is traded in
the Company’s common stock, if the volume weighted average price of
the Company’s common stock on any trading day on or after the
closing date of the offering fails to exceed the exercise price of
the Class B Warrant (subject to adjustment as described in the
warrant agreement). During the three months ended March 31, 2023,
no Class B Warrants were exercised, while during the three months
ended March 31, 2022, 39,000 Class B Warrants were exercised, all
on a cashless basis. As of March 31, 2023 and 2022,
respectively,75,400 and 76,500 Class B Warrants were
outstanding.
5. STOCK COMPENSATION
Stock Incentive Plans
In 2018, the Company adopted the 2018 Stock Incentive Plan (the
“2018 Plan”) for employees, consultants, and directors. The 2018
Plan, which is administered by the Board of Directors, permits the
Company to grant incentive and nonqualified stock options for the
purchase of common stock, and restricted stock awards. The maximum
number of shares reserved for issuance under the 2018 Plan is
629,440. At March 31, 2023, there were 262,269 shares
available for grant under the 2018 Plan.
On July 6, 2021, the Company’s board of directors and stockholders
approved and adopted the Bluejay Diagnostics, Inc. 2021 Stock Plan
(the “2021 Plan”). A total of 1,960,000 shares of common stock were
approved to be initially reserved for issuance under the 2021 Stock
Plan. At March 31, 2023, there were 807,541 shares available for
grant under the 2021 Plan.
Stock Award Activity
The following table summarizes the status of the Company’s
non-vested restricted stock awards for the three months ended March
31, 2023:
|
|
Non-vested
Restricted Stock Awards |
|
|
|
Number of
Shares |
|
|
Weighted
Average
Grant Date
Fair Value |
|
Outstanding at December 31, 2022 |
|
|
60,000 |
|
|
$ |
1.29 |
|
Granted |
|
|
512,180 |
|
|
|
0.44 |
|
Vested |
|
|
(374,680 |
) |
|
|
0.44 |
|
Forfeited |
|
|
-
|
|
|
|
-
|
|
Outstanding at March 31, 2023 |
|
|
197,500 |
|
|
$ |
0.70 |
|
In February 2023, the Company issued 374,680 fully vested
restricted stock units to certain employees in lieu of cash to
satisfy their 2022 bonuses. The number of restricted stock unit
awards issued were determined based on the approved bonus amount
divided by the market price of the Company’s common stock on the
date of grant. The value of fully vested restricted stock unit
awards issued is recorded as stock compensation expense on the date
of grant with a reversal of the related accrued bonus recorded in
2022.
The following is a summary of stock option activity for the nine
months ended March 31, 2023:
|
|
Number of
Stock
Options |
|
|
Weighted
Average
Exercise
Price Per
Share |
|
|
Weighted
Average
Remaining
Contractual
Life in Years |
|
|
Aggregate
Intrinsic
Value |
|
Outstanding at December 31, 2022 |
|
|
719,835 |
|
|
$ |
1.96 |
|
|
|
6.5 |
|
|
$ |
20,578 |
|
Granted |
|
|
20,000 |
|
|
|
0.53 |
|
|
|
|
|
|
|
|
|
Exercised |
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Cancelled and forfeited |
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Outstanding at March 31, 2023 |
|
|
739,835 |
|
|
$ |
1.92 |
|
|
|
7.7 |
|
|
$ |
23,316 |
|
Exercisable at March 31,
2023 |
|
|
564,440 |
|
|
$ |
1.86 |
|
|
|
7.4 |
|
|
$ |
23,316 |
|
The weighted average grant date fair value of options granted
during the three months ended March 31, 2023 and 2022 was $0.44 per
share and $1.48 per share, respectively. The Company calculated the
grant-date fair value of stock option awards granted during the
three months ended March 31, 2023 and 2022 using the Black-Scholes
model with the following assumptions:
|
|
Three Months Ended
March 31, |
|
|
|
2023 |
|
|
2022 |
|
Risk-free interest rate |
|
|
3.63% |
|
|
|
1.58% - 2.40% |
|
Expected dividend yield |
|
|
0.00% |
|
|
|
0.00% |
|
Volatility factor |
|
|
108.78% |
|
|
|
102.03% |
|
Expected life of option (in
years) |
|
|
6.00 |
|
|
|
5.37 – 6.00 |
|
Stock-Based Compensation Expense
For the three months ended March 31,2023 and 2022, the Company
recorded stock-based compensation expense as follows:
|
|
Three Months Ended
March 31, |
|
|
|
2023 |
|
|
2022 |
|
Research and
development |
|
$ |
44,845 |
|
|
$ |
17,311 |
|
General and administrative |
|
|
159,584 |
|
|
|
108,305 |
|
Sales and
marketing |
|
|
15,160 |
|
|
|
470 |
|
Total stock-based
compensation |
|
$ |
219,589 |
|
|
$ |
126,086 |
|
At March 31, 2023, there was approximately $114,985 of unrecognized
compensation expense related to non-vested stock option awards that
are expected to be recognized over a weighted-average period of 1.8
years. At March 31, 2023, there was approximately $89,451 of
unrecognized compensation expense related to non-vested restricted
stock awards that are expected to be recognized over a
weighted-average period of 1.1 years.
6. RELATED PARTY TRANSACTIONS
NanoHybrids, LLC
In December 2021, the Company entered into an agreement with
NanoHybrids, LLC (“NanoHybrids”) to utilize the Company’s research
and development staff and laboratory facility when available to
perform work for NanoHybrids. Any hours worked by Company employees
for NanoHybrids is billed to NanoHybrids at a bill rate of the
respective employee’s fully burdened personnel cost plus 10%.
Additionally, the Company may purchase certain lab supplies for
NanoHybrids and rebill these costs to NanoHybrids. NanoHybrids is
wholly owned by the Company’s Chief Technology Officer. The table
below summarizes the amounts earned and due from NanoHybrids as of
and for the three month periods’ ended March 31, 2023 and 2022, and
balances due as of March 31, 2023 and December 31, 2022:
|
|
Three Months Ended
March 31, |
|
|
|
2023 |
|
|
2022 |
|
Income from NanoHybrids
included in Other Income |
|
$ |
95,798 |
|
|
$ |
40,886 |
|
Cash receipts from NanoHybrids |
|
$ |
19,731 |
|
|
$ |
22,539 |
|
|
|
As of |
|
|
|
March 31,
2023 |
|
|
December 31,
2022 |
|
Amounts receivable from
NanoHybrids included in Prepaids and Other Current Assets |
|
$ |
95,798 |
|
|
$ |
19,731 |
|
7. PROPERTY AND EQUIPMENT
Property and equipment consisted of the following at March 31, 2023
and December 31, 2022:
|
|
Depreciable
lives |
|
March 31,
2023 |
|
|
December 31,
2022 |
|
Construction-in-process |
|
|
|
$ |
768,850 |
|
|
$ |
375,466 |
|
Furniture, fixtures, and
equipment |
|
3-5 years |
|
|
143,649 |
|
|
|
136,942 |
|
Software |
|
3-5 years |
|
|
4,457 |
|
|
|
4,457 |
|
Lab equipment |
|
3-5 years |
|
|
1,275,958 |
|
|
|
1,268,380 |
|
Leasehold
improvements |
|
Shorter of useful life of life of lease |
|
|
43,231 |
|
|
|
43,231 |
|
|
|
|
|
|
2,236,145 |
|
|
|
1,828,476 |
|
Less:
accumulated depreciation |
|
|
|
|
(716,423 |
) |
|
|
(596,406 |
) |
Property and
equipment, net |
|
|
|
$ |
1,519,722 |
|
|
$ |
1,232,070 |
|
The Company reviews long-lived assets for impairment when events,
expectations, or changes in circumstances indicate that the asset’s
carrying value may not be recoverable. As a result of this review
in the first quarter of 2023, no impairment was recorded, however,
the Company revised the useful life of certain lab equipment in the
first quarter of 2023 due to a change in expectations of the time
the equipment will be used which resulted in approximately $45,000
of additional depreciation recorded in the three months ended March
31, 2023.
8. LEASES
The Company primarily enters into lease arrangements for office and
laboratory space. A summary of supplemental lease information is as
follows:
|
|
Three Months Ended |
|
|
|
March 31,
2023
|
|
|
March 31,
2023 |
|
Weighted average remaining
lease term – operating leases (in years) |
|
|
3.5 |
|
|
|
4.3 |
|
Weighted average remaining lease term
– finance leases (in years) |
|
|
4.8 |
|
|
|
-
|
|
Weighted average discount rate |
|
|
7.0 |
% |
|
|
7.0 |
% |
Operating cash flows from operating
leases |
|
$ |
43,564 |
|
|
$ |
29,248 |
|
Operating cash flows from finance
leases |
|
$ |
1,202 |
|
|
|
-
|
|
A summary of the Company’s lease assets and liabilities are as
follows:
|
|
March 31,
2023 |
|
|
December 31,
2023 |
|
Operating lease
right-of-use asset |
|
$ |
433,361 |
|
|
$ |
465,514 |
|
Finance lease
asset – property & equipment, net |
|
|
21,067 |
|
|
|
21,067 |
|
Total lease
assets |
|
|
454,428 |
|
|
|
486,581 |
|
Current portion of operating lease
liability included in accrued expenses |
|
|
168,709 |
|
|
|
168,706 |
|
Current portion of finance lease
liability included in accrued expenses |
|
|
4,807 |
|
|
|
4,807 |
|
Non-current operating lease
liabilities |
|
|
289,910 |
|
|
|
323,915 |
|
Non-current
finance lease liabilities included in other non-current
liabilities |
|
|
14,970 |
|
|
|
15,823 |
|
Total
lease liabilities |
|
$ |
478,396 |
|
|
$ |
513,251 |
|
A summary of the Company’s estimated operating lease payments are
as follows:
Year |
|
|
|
2023
(1) |
|
$ |
126,530 |
|
2024 |
|
|
162,991 |
|
2025 |
|
|
100,000 |
|
2026 |
|
|
100,000 |
|
2027 |
|
|
25,000 |
|
Thereafter |
|
|
-
|
|
Total future lease
payments |
|
|
514,521 |
|
Less: Imputed
interest |
|
|
55,902 |
|
Present value of
lease liability |
|
$ |
458,619 |
|
(1) |
Excludes the three months ended March 31,
2023 |
9. COMMITMENTS AND CONTINGENCIES
Purchase Commitments
In October 2022, the Company entered into a non-cancelable purchase
commitment with an international materials vendor for items needed
for both development of the Symphony product line and also to
resell to its customers. This agreement commits the Company to
purchase approximately $800,000 in goods, of which 50% was prepaid
in 2022. Approximately $90,000 of goods have been received under
this arrangement as of March 31, 2023.
The Company had multiple open purchase commitments with its primary
contract manufacturing organization in Japan related to the
buildout of a manufacturing line for the IL-6 cartridges for the
Symphony device. As of March 31, 2023, the total open
non-cancellable commitments for the manufacturing line buildout
totaled approximately $127,000.
As of March 31, 2023, the Company has entered into other
non-cancelable purchase commitments primarily for research and
development supplies, prototypes, and key advisory services. The
purchase commitments covered by these agreements are for less than
one year and aggregate to approximately $1.5 million.
Minimum Royalties
As required under the License Agreement (see Note 3), following the
first sale of Cartridges, the Company will also make royalty
payments to Toray equal to 15% of the net sales of the Cartridges
for the period that any underlying patents exist or for 5 years
after the first sale. Following the first sale, the Company will
pay a one-time minimum royalty of $60,000, which shall be
creditable against any royalties owed to Toray in such calendar
year. The Company will pay a minimum royalty of $100,000 in each
year thereafter, which are creditable against any royalties owed to
Toray in such calendar year. There were no sales of or revenues
from the Cartridges through March 31, 2023.
Indemnification
The Company has certain agreements with service providers with
which it does business that contain indemnification provisions
pursuant to which the Company typically agrees to indemnify the
party against certain types of third-party claims. The Company
accrues for known indemnification issues when a loss is probable
and can be reasonably estimated. The Company would also accrue for
estimated incurred but unidentified indemnification issues based on
historical activity. As the Company has not incurred any
indemnification losses to date, there were no accruals for or
expenses related to indemnification issues for any period
presented.
10. SUPPLEMENTAL BALANCE SHEET INFORMATION
Prepaid expenses and other current assets consist of the
following:
|
|
March 31,
2023 |
|
|
December 31,
2022 |
|
Prepaid
insurance |
|
$ |
564,361 |
|
|
$ |
751,979 |
|
Vendor prepayments |
|
|
1,195,193 |
|
|
|
681,218 |
|
Prepaid other |
|
|
360,458 |
|
|
|
240,283 |
|
Total
prepaid expenses and other current assets |
|
$ |
2,120,012 |
|
|
$ |
1,673,480 |
|
Accrued expenses and other current liabilities consist of the
following:
|
|
March 31,
2023 |
|
|
December 31,
2022 |
|
Accrued
personnel costs |
|
$ |
343,706 |
|
|
$ |
533,577 |
|
Accrued good receipts |
|
|
281,054 |
|
|
|
10,077 |
|
Accrued other |
|
|
238,637 |
|
|
|
292,076 |
|
Total
accrued expenses and other current liabilities |
|
$ |
863,397 |
|
|
$ |
835,730 |
|
11. SUBSEQUENT EVENTS
On April 25, 2023, Nasdaq’s Listing Qualifications Staff notified
the Company that it has extended the time period for the Company to
regain compliance with the Minimum Bid Requirement until October
23, 2023. To regain compliance, the closing bid price of the
Company’s common stock must be at least $1.00 or higher for a
minimum of ten consecutive business days.
The Company intends to continue to actively monitor the closing bid
price of its common stock and will evaluate available options to
regain compliance with the Minimum Bid Requirement. Specifically,
the Company has confirmed to Nasdaq that, if necessary, it will
implement a reverse stock split of its outstanding common stock (if
approved by the Company’s stockholders) to attempt to regain
compliance. If the Company does not regain compliance within the
additional compliance period, Nasdaq will provide notice that the
Company’s common stock will be subject to delisting. The Company
would then be entitled to appeal that determination to a Nasdaq
hearings panel. There can be no assurance that the Company will
regain compliance with the Minimum Bid Requirement during the
180-day additional compliance period or maintain compliance with
the other Nasdaq listing requirements.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion and analysis of our
financial condition and results of operations in conjunction with
the unaudited condensed consolidated financial statements and the
related notes appearing elsewhere in this Form 10-Q. This
discussion contains forward-looking statements reflecting our
current expectations that involve risks and uncertainties. Actual
results and the timing of events could differ materially from those
discussed in our forward-looking statements as a result of many
factors, including those set forth under “Risk Factors” and
elsewhere in this Form 10-Q.
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. Our Symphony
technology platform is an exclusively licensed, patented system
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 (“FDA”), can provide a solution to a significant
market need in the United States. Clinical trials indicate Symphony
produces laboratory-quality results in less than 20 minutes in
intensive care units and emergency rooms, 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 $2.5 million and
$2.0 million for the three months ended March 31, 2023 and 2022,
respectively. We had negative cash flow from operating activities
of approximately $2.9million and $1.9 million for the three months
ended March 31, 2023 and 2022, respectively, and had an accumulated
deficit of approximately $19.5 million as of March 31, 2023.
Results of Operations
Comparison of the Three Months Ended March 31, 2023 and
2022
The following table sets forth our results of operations for the
three months ended March 31, 2023 and 2022:
|
|
Three Months Ended
March 31, |
|
|
|
2023 |
|
|
2022 |
|
Operating expenses: |
|
|
|
|
|
|
Research and development |
|
|
1,354,549 |
|
|
|
694,757 |
|
General and
administrative |
|
|
1,176,977 |
|
|
|
1,319,819 |
|
Sales
and marketing |
|
|
148,046 |
|
|
|
53,685 |
|
Total operating expenses |
|
|
2,679,572 |
|
|
|
2,068,261 |
|
|
|
|
|
|
|
|
|
|
Operating
loss |
|
|
(2,679,572 |
) |
|
|
(2,068,261 |
) |
|
|
|
|
|
|
|
|
|
Other income: |
|
|
|
|
|
|
|
|
Other
income, net |
|
|
139,729 |
|
|
|
54,858 |
|
Total
other income |
|
|
139,729 |
|
|
|
54,858 |
|
Net
loss |
|
$ |
(2,539,843 |
) |
|
$ |
(2,013,403 |
) |
Research and Development
Research and development expenses for the three months ended March
31, 2023 was approximately $1.4 million as compared to
approximately $695,000 for the same period in 2022. The increase in
research and development expenses was primarily due to an increase
in personnel costs and clinical trials expenses. We expect future
research and development expenses to be focused on costs
specifically associated with our clinical trial program supporting
our regulatory strategy and any necessary manufacturing
improvements.
General and Administrative
General and administrative expenses for the three months ended
March 31, 2023 was approximately $1.2 million as compared to
approximately $1.3 million for the comparable period in 2022. The
minor decrease in general and administrative expenses is due to
continued efforts to preserve capital by limiting our investment in
infrastructure commensurate with our commercialization timeline. We
expect to monitor and continue to pare our general and
administrative spend, as necessary, to optimize operational
alignment.
Sales and Marketing
Sales and marketing expenses for the three months ended March 31,
2023 was approximately $148,000 as compared to approximately
$54,000 for the comparable period in 2022. The increase in sales
and marketing expenses was primarily due to increased personnel
costs.
Other Income, net
Other income, net for the three months ended March 31, 2023 was
approximately $140,000 as compared to $55,000 for the same periods
in 2022. The increase in net other income was primarily due higher
interest rates driving an increase of approximately $28,000 in
interest income and an increase of approximately $84,000 in related
party income from NanoHybrids.
Liquidity and Going Concern
We have funded our operations primarily through the net proceeds
from our IPO on November 10, 2021. We had cash and cash equivalents
of $6.8 million at March 31, 2023. We continue to develop the
Symphony device and its first cartridge for the measurement of
IL-6. We remain committed to obtaining FDA clearance and have
expanded clinical trials to obtain additional data to support our
FDA submission, while also continuing to build our manufacturing
operations with our contract manufacturing organizations. Current
cash resources and expected operating expenses are considered in
determining our liquidity requirement; as well as $1.4 million of
current liabilities on our balance sheet at March 31, 2023 and
capital commitments of approximately $2.5 million as of March 31,
2023 (see Notes 8 and 9). As of the filing of this report, we
expect to need additional capital to fund our planned operations
for the next twelve months.
We may seek to raise such additional capital through public or
private equity offerings, grant financing and support from
governmental agencies, convertible debt, collaborations, strategic
alliances and distribution arrangements. Additional funds may not
be available when we need them on terms that are acceptable to us,
or at all. If adequate funds are not available, we may be required
to delay or reduce the scope of our research or development
programs, our commercialization efforts or our manufacturing
commitments and capacity. In addition, if we raise additional funds
through collaborations, strategic alliances or distribution
arrangements with third parties, we may have to relinquish valuable
rights to its technologies or future revenue streams.
If we are unsuccessful in our efforts to raise additional capital,
based on our current and expected levels of operating expenses, our
current capital will not be sufficient to fund our operations for
the next twelve months. These conditions raise substantial doubt
about our ability to continue as a going concern.
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.
|
|
Three Months Ended
March 31, |
|
|
|
2023 |
|
|
2022 |
|
Cash proceeds (used in) provided by: |
|
|
|
|
|
|
Operating activities |
|
$ |
(2,933,607 |
) |
|
$ |
(1,877,255 |
) |
Investing
activities |
|
|
(340,669 |
) |
|
|
(46,346 |
) |
Financing activities |
|
|
(58,803 |
) |
|
|
- |
|
Net
decrease in cash and cash equivalents |
|
$ |
(3,333,079 |
) |
|
$ |
(1,923,601 |
) |
Net cash used in operating activities
During the three months ended March 31, 2023, we used approximately
$2.9 million in cash for operating activities, an increase of
approximately $1.1 million as compared to approximately $1.9
million for the same period in 2022. The increase in net cash used
in operating activities was primarily due to increases in personnel
costs and product development costs.
Net
cash used in investing activities
During the three months ended March 31, 2023, we used approximately
$341,000 in cash for investing activities, an increase of
approximately $294,000 as compared to the same period in 2022. The
increase in net cash used in investing activities was primarily due
to capital purchases of manufacturing equipment.
Net
cash used in financing activities
During the three months ended March 31, 2023, we used approximately
$59,000 in cash for financing activities, an increase of
approximately $59,000 as compared to the same period in 2022. The
increase in net cash used in financing activities was primarily due
to tax withholdings on fully vested restricted stock units granted
in February 2023 related to 2022 bonuses.
Recently Adopted Accounting Standards
See Note 2 to our condensed consolidated financial statements
(under the caption “Recently Adopted Accounting Standards”).
Emerging Growth Company and Smaller Reporting Company
Status
We are an emerging growth company, as defined in the Jumpstart Our
Business Startups Act (the “JOBS Act”). Under the JOBS Act,
emerging growth companies can delay adopting new or revised
accounting standards issued subsequent to the enactment of the JOBS
Act until such time as those standards apply to private companies.
We elected to use this extended transition period for complying
with new or revised accounting standards that have different
effective dates for public and private companies until the earlier
of the date that we (i) are no longer an emerging growth company or
(ii) affirmatively and irrevocably opt out of the extended
transition period provided in the JOBS Act. As a result, these
condensed consolidated financial statements may not be comparable
to companies that comply with the new or revised accounting
pronouncements as of public company effective dates. We are using
the extended transition period for any other new or revised
accounting standards during the period in which we remain an
emerging growth company.
We will remain an emerging growth company until the earliest of (i)
the last day of our first fiscal year (a) following the fifth
anniversary of the completion of this offering, (b) in which we
have total annual gross revenues of at least $1.07 billion or
(c) in which we are deemed to be a large accelerated filer, which
means the market value of our common stock that is held by
non-affiliates exceeds $700 million as of the prior June
30th and (ii) the date on which we have issued more
than $1 billion in non-convertible debt securities during
the prior three-year period.
We are also a “smaller reporting company,” meaning that the market
value of our stock held by non-affiliates is less than
$700 million and our annual revenue is less than
$100 million during the most recently completed fiscal year.
We may continue to be a smaller reporting company if either (i) the
market value of our stock held by non-affiliates is less than
$250 million or (ii) our annual revenue is less than
$100 million during the most recently completed fiscal year
and the market value of our stock held by non-affiliates is
less than $700 million. If we are a smaller reporting company
at the time we cease to be an emerging growth company, we may
continue to rely on exemptions from certain disclosure requirements
that are available to smaller reporting companies. Specifically, as
a smaller reporting company we may choose to present only the two
most recent fiscal years of audited financial statements in our
Annual Reports on Form 10-K and, similar to emerging growth
companies, smaller reporting companies have reduced disclosure
obligations regarding executive compensation.
JOBS Act Accounting Election
The JOBS Act provides that an “emerging growth company” can take
advantage of the extended transition period provided in Section
7(a)(2)(B) of the Securities Act of 1933, as amended, for complying
with new or revised accounting standards. In other words, an
“emerging growth company” can delay the adoption of certain
accounting standards until those standards would otherwise apply to
private companies. We have irrevocably elected not to avail
ourselves of this extended transition period and, as a result, we
will adopt new or revised accounting standards on the relevant
dates on which adoption of such standards is required for other
public companies.
We have implemented all new accounting pronouncements that are in
effect and may impact our financial statements and we do not
believe that there are any other new accounting pronouncements that
have been issued that might have a material impact on our financial
position or results of operations.
Item 3. Quantitative and Qualitative Disclosures About Market
Risk
We are a smaller reporting company as defined by Rule 12b-2 of the
Securities Exchange Act of 1934, as Amended (the “Exchange Act”)
and are not required to provide the information required under this
item.
Item 4. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures and
Changes in Internal Control over Financial Reporting
We conducted an evaluation under the supervision and with the
participation of our management, including the Chief Executive
Officer and Chief Financial Officer (our principal executive
officer and principal financial officer, respectively), regarding
the effectiveness of our disclosure controls and procedures (as
defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as
of the end of the period covered by this report. Based on this
evaluation, our Chief Executive Officer and Chief Financial Officer
have concluded that our disclosure controls and procedures were
effective as of March 31, 2023. We continue to review our
disclosure controls and procedures and may from time to time make
changes aimed at enhancing their effectiveness and to ensure that
our systems evolve with our Company’s business. A control system,
no matter how well conceived and operated, can provide only
reasonable, not absolute, assurance that the objectives of the
control system are met.
(b) Changes in Internal Control Over Financial
Reporting
There was no change in our internal control over financial
reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act) that occurred during the quarter ended March 31, 2023
that has materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
From time to time in the ordinary course of our business, we may be
involved in legal proceedings, the outcomes of which may not be
determinable. The results of litigation are inherently
unpredictable. Any claims against us, whether meritorious or not,
could be time consuming, result in costly litigation, require
significant amounts of management time and result in diversion of
significant resources. We are not able to estimate an aggregate
amount or range of reasonably possible losses for those legal
matters for which losses are not probable and estimable. We have
insurance policies covering potential losses where such coverage is
cost effective.
We are not at this time involved in any legal proceedings.
Item 1A. Risk Factors
For a discussion of potential risks or uncertainties, see “Risk
Factors” in the Company’s 2022 annual report on Form 10-K on file
with the SEC. Except as set forth below, there have been no
material changes to the risk factors disclosed in such registration
statement.
Item 2. Unregistered Sales of Equity Securities and Use of
Proceeds
None
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
None.
Item 6. Exhibits
INDEX TO EXHIBITS
(1) |
The
certifications on Exhibit 32 hereto are deemed not “filed” for
purposes of Section 18 of the Exchange Act or otherwise subject to
the liability of that Section. Such certifications will not be
deemed incorporated by reference into any filing under the
Securities Act or the Exchange Act. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
Bluejay Diagnostics, Inc.
SIGNATURE |
|
TITLE |
|
DATE |
|
|
|
|
|
/s/ Neil Dey |
|
Chief Executive Officer and
Director |
|
May
11, 2023 |
Neil Dey |
|
(on behalf of the
registrant) |
|
|
|
|
|
|
|
/s/ Kenneth Fisher |
|
Chief Financial
Officer |
|
May
11, 2023 |
Kenneth Fisher |
|
(principal financial and
accounting officer) |
|
|
19
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