Bluejay Diagnostics, Inc. — FY2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023. The filing was signed March 28, 2024. This is an annual report, not a standalone fourth-quarter report.
Business context
Bluejay is a clinical-stage diagnostics company developing Symphony, a point-of-care whole-blood testing platform. Its initial planned product is an IL-6 test intended to support risk stratification of hospitalized sepsis patients. Symphony has no FDA marketing authorization, and Bluejay reported no product revenue in 2023.
Financial performance and liquidity
| Metric | FY2023 | FY2022 |
|---|---|---|
| Revenue | $0 | $249,040 |
| Gross profit | $0 | $48,911 |
| Operating expenses | $10.31 million | $9.37 million |
| Operating loss | $10.31 million | $9.32 million |
| Net loss | $9.95 million | $9.30 million |
| Net cash used in operating activities | $8.31 million | $7.74 million |
- Cash and cash equivalents were $2.21 million at December 31, 2023, down from $10.11 million a year earlier. Accumulated deficit was $26.95 million.
- Current assets were $3.22 million and current liabilities were $1.77 million. Total liabilities were $1.97 million, including operating and finance lease liabilities; the filing does not report material conventional borrowing in the presented balance sheet.
- There was no 2023 gross margin because there was no revenue. The 2022 revenue came from the sale of five analyzers to Toray; further sales to Toray were not anticipated.
- Management estimated year-end cash would fund operations through Q2 2024 and stated additional capital was needed for planned operations over the next 12 months. The filing also says that, absent further funding, cash could run out during Q3 2024. The independent auditor emphasized substantial doubt about the company’s ability to continue as a going concern.
Changes and notable items
- Research and development expense rose 38% to $5.71 million, mainly due to product development and FDA-manufacturing compliance work, personnel costs, and accelerated depreciation. General and administrative expense fell 9% to $4.31 million, and sales and marketing expense fell 37% to $283,443.
- Bluejay changed its clinical focus from COVID-19 to hospitalized sepsis patients after COVID-related hospitalizations declined. It began a multi-site study in Q1 2024; the study’s objective is to assess IL-6 concentrations in relation to 28-day all-cause mortality. Management expects the regulatory submission timeline to move to 2025 after slowing study work to preserve cash.
- In October 2023, Bluejay amended its Toray license, reducing royalties on certain cartridges from 15% to 7.5% or less in specified circumstances. Toray is to supply certain cartridge intermediates through October 2025, subject to the agreement’s terms; Sanyoseiko is the primary contract manufacturer.
- Bluejay raised approximately $1.59 million gross in its August 2023 offering and incurred $413,544 in offering costs. A January 2024 public offering issued common shares, pre-funded warrants, and warrants; the filing describes intended use of proceeds but does not provide a clear net-proceeds figure in the supplied text.
- A 1-for-20 reverse stock split took effect in July 2023. On February 28, 2024, Nasdaq notified Bluejay that it was again below the $1.00 minimum bid-price requirement, with an initial compliance deadline of August 26, 2024.
Outlook, risks, and contingencies
Bluejay has no authorized commercial product or established product revenue. Its plans depend on financing, clinical results, FDA review, market acceptance, reimbursement, and reliable manufacturing. The company warns that it may need to delay development or reduce programs if funding is unavailable, and it may need to pursue strategic alternatives. The auditor’s going-concern emphasis is a material warning, not a forecast that failure is certain.
Other significant risks include reliance on Toray’s licensed intellectual property and Sanyoseiko’s manufacturing, potential supply interruptions, competition, regulatory delays, and potential dilution from outstanding warrants and future fundraising. The company reported no pending material legal proceedings. Management concluded disclosure controls and internal control over financial reporting were effective as of December 31, 2023; the auditor did not attest to internal-control effectiveness.
Investor verification priorities
- Confirm cash, burn rate, and financing runway after the January 2024 offering, including actual net proceeds and subsequent cash use.
- Review the going-concern disclosure and reconcile management’s Q2 2024 cash-runway estimate with the stated Q3 2024 potential cash exhaustion absent further funding.
- Track sepsis-study enrollment, additional study sites, funding, results, and the timing and requirements of the planned FDA submission.
- Check Nasdaq bid-price compliance and any stockholder action on a further reverse split or increased authorized common shares.
- Assess potential dilution and market overhang from warrants, pre-funded warrants, and future capital needs.
- Review the Toray license and supply terms and Sanyoseiko manufacturing arrangements, including continuity of cartridge supply after the Toray intermediate-supply period.