Bluejay Diagnostics, Inc. — Q1 2023 Form 10-Q
Reporting period: Three months ended March 31, 2023. Bluejay is a clinical-stage diagnostics company developing the Symphony rapid whole-blood testing platform; its products had not received FDA authorization and no cartridge revenue was reported.
Financial results and liquidity
| Metric | Q1 2023 | Q1 2022 |
|---|---|---|
| Revenue | No cartridge sales or revenue | No cartridge sales or revenue |
| Research and development expense | $1.35 million | $0.69 million |
| General and administrative expense | $1.18 million | $1.32 million |
| Sales and marketing expense | $148,000 | $54,000 |
| Total operating expenses / operating loss | $2.68 million | $2.07 million |
| Other income, net | $140,000 | $55,000 |
| Net loss | $2.54 million | $2.01 million |
| Operating cash used | $2.93 million | $1.88 million |
| Cash and cash equivalents, period-end | $6.78 million | $17.12 million |
Gross margin is not applicable to reported cartridge sales because none were recorded. Cash fell by $3.33 million during Q1 2023. Investing activities used $341,000, primarily for manufacturing equipment; financing activities used $59,000, mainly for tax withholding on restricted stock units. Total assets were $10.89 million and stockholders’ equity was $9.16 million at March 31, 2023.
Current liabilities were $1.42 million. Total liabilities were $1.73 million, including operating lease liabilities; the filing reports no conventional borrowing balance. The company had approximately $2.5 million of capital commitments. Management estimated cash would fund operations into Q4 2023, but said additional capital is needed for planned operations over the next 12 months. The filing states substantial doubt exists about the company’s ability to continue as a going concern.
Changes and management commentary
- Net loss increased about 26% year over year, while operating cash use increased about $1.06 million.
- R&D expense nearly doubled, primarily from personnel and clinical-trial costs. Management expects R&D to focus on clinical trials supporting its regulatory strategy and manufacturing improvements.
- G&A expense declined modestly as the company limited infrastructure spending; sales and marketing expense increased, primarily due to personnel costs.
- Other income rose, attributed to higher interest income and increased income from NanoHybrids, an entity wholly owned by the company’s Chief Technology Officer. NanoHybrids income was $95,798 in Q1 2023; $95,798 was reported receivable at quarter-end.
- The company expanded clinical trials to gather data for an FDA submission and continued building manufacturing capability with contract manufacturers. No specific FDA clearance date or financial guidance was provided.
- A change in expected use of certain lab equipment shortened its estimated useful life, resulting in approximately $45,000 of additional Q1 depreciation. No impairment was recorded.
Risks, contingencies, and unusual items
- Funding may be sought through equity, grants, convertible debt, collaborations, or other arrangements; availability and acceptable terms are uncertain. If financing is unavailable, development, commercialization, or manufacturing plans may be delayed or reduced.
- Nasdaq extended the deadline to regain compliance with its $1.00 minimum bid-price requirement to October 23, 2023. The company said it may pursue a reverse stock split, subject to stockholder approval; delisting remains a risk.
- Non-cancelable purchase commitments included approximately $800,000 for materials, $127,000 for manufacturing-line buildout, and $1.5 million primarily for R&D supplies, prototypes, and advisory services.
- The company reported no legal proceedings and no material changes to previously disclosed risk factors, except as described in the filing.
Important facts for investors to verify
- Cash runway assumptions, actual spending, and progress toward raising capital, given the stated Q4 2023 runway and going-concern warning.
- FDA submission and clearance status, clinical-trial progress, and remaining development and manufacturing requirements for Symphony IL-6.
- Execution and funding of the approximately $2.5 million commitments, and any resulting changes to cash needs or operating plans.
- Nasdaq bid-price compliance progress and whether a reverse stock split is proposed or approved.
- The nature, ongoing terms, and collectability of the NanoHybrids-related income and receivable.