Bluejay Diagnostics, Inc. — Q3 2023 Form 10-Q
Reporting period: Quarter and nine months ended September 30, 2023. Bluejay is a clinical-stage diagnostics company developing its Symphony platform, including an IL-6 test for critical-care settings. The products had not received FDA marketing authorization, and the company reported no revenue in Q3 2023.
Financial performance and liquidity
| Metric | Q3 2023 | Q3 2022 | Nine months 2023 | Nine months 2022 |
|---|---|---|---|---|
| Revenue | $0 | $0 | $0 | $249,040 |
| Operating expenses | $2.34 million | $2.81 million | $7.92 million | $6.91 million |
| Operating loss | $2.34 million | $2.81 million | $7.92 million | $6.86 million |
| Net loss | $2.30 million | $2.96 million | $7.65 million | $6.91 million |
- Gross profit was zero in Q3 2023 and for the first nine months of 2023; comparative 2022 nine-month gross profit was $48,911. No meaningful current-period gross margin is reported.
- Nine-month operating cash use was $5.54 million, versus $4.80 million in 2022. Investing cash use was $616,272; financing provided $1.11 million, primarily from the August stock offering. Cash declined $5.04 million to $5.08 million.
- At September 30, current assets were $6.53 million and current liabilities $2.80 million. Total liabilities were $3.03 million, including operating and finance lease obligations; the filing does not report conventional borrowings. Accumulated deficit was $24.65 million.
- The August 2023 offering raised $1.59 million gross and incurred $413,544 of offering costs. It included 216,000 common shares and warrants for 216,000 shares; 15,120 placement-agent warrants were also issued.
Changes and notable items
- For the nine-month comparison, revenue fell from $249,040 to zero because 2022 included a limited sale of five Symphony analyzers to Toray. R&D expense rose to $4.43 million from $2.83 million, mainly from personnel and product-development costs. G&A declined to $3.21 million from $3.80 million, reflecting cost controls and workforce reductions.
- Q3 net loss improved year over year, primarily alongside lower operating expenses and positive other income. Q3 sales and marketing expense was a $19,619 credit, associated with cancellation and forfeiture of equity awards by terminated personnel.
- Bluejay revised the useful life of certain lab equipment in Q1, resulting in approximately $431,740 of additional depreciation during the first nine months of 2023.
- A July 24, 2023, 1-for-20 reverse stock split was reflected retroactively in share and per-share data. The company reported 1,239,140 shares outstanding as of November 7, 2023.
- Former CFO Kenneth Fisher departed in September; the company recorded a $240,000 severance liability.
Outlook, risks and contingencies
- After FDA feedback at an August pre-submission meeting, Bluejay said a 510(k) is the appropriate submission pathway for Symphony IL-6 and maintained its target to submit in the first half of 2024. Its revised clinical strategy focuses on risk stratification of hospitalized sepsis patients. The product remains subject to clinical, regulatory and manufacturing execution.
- Management estimated existing cash would fund operations into Q1 2024 and said additional capital is needed for planned operations over the next 12 months. The filing states that failure to raise capital would leave funds insufficient for the next 12 months and raises substantial doubt about the company’s ability to continue as a going concern. Funding may be unavailable or require delays or reductions in development, regulatory, commercialization or manufacturing plans.
- On October 23, 2023, after quarter-end, Bluejay amended its Toray license and entered a supply agreement. The stated royalty rate for certain cartridges was reduced from 15% to 7.5% or less in specified circumstances. Toray’s near-term supply of cartridge intermediates runs to the earlier of October 2025 or FDA approval, with a possible extension of up to six months. The company remains dependent on Toray’s licensed intellectual property and on Sanyoseiko for cartridge manufacturing.
- Other key risks include clinical-trial delays or inadequate results, FDA authorization uncertainty, supply interruptions, future financing and dilution, and the terms and continuity of its Toray and manufacturing arrangements. The company reported no current legal proceedings and said disclosure controls were effective as of September 30, 2023.
Important facts for investors to verify
- Cash runway and the status, timing, terms and dilution implications of additional financing.
- Clinical-trial progress, FDA feedback and whether the first-half 2024 submission target remains achievable.
- Cartridge supply, manufacturing readiness and compliance with the Toray agreements’ timelines and obligations.
- Current share count and potential dilution from outstanding warrants, options and restricted stock units.
- Whether operating costs, cash burn and going-concern risks are changing from the levels disclosed in this filing.