Bluejay Diagnostics, Inc. — Q1 2022 Form 10-Q
Business context and reporting period
Unaudited results cover the three months ended March 31, 2022; comparisons are with Q1 2021. Bluejay is a pre-revenue diagnostics company developing near-patient testing products. Its Symphony platform is intended to provide results in about 24 minutes. The company also develops ALLEREYE, an FDA-cleared point-of-care test for allergic conjunctivitis, through its wholly owned subsidiary.
Financial results and position
| Metric | Q1 2022 | Q1 2021 / prior period |
|---|---|---|
| Revenue | No product revenue reported | No product revenue reported |
| Research and development | $694,757 | $24,183 |
| General and administrative | $1,319,819 | $139,911 |
| Marketing and business development | $53,685 | $69,104 |
| Total operating expenses / operating loss | $2,068,261 | $233,198 |
| Other income, net | $54,858 | $39,010 |
| Net loss | $2,013,403 | $194,188 |
| Basic and diluted loss per share | $0.10 | $0.06 |
| Net cash used in operating activities | $1,877,255 | $372,620 |
| Cash and cash equivalents | $17,124,177 | $19,047,778 at Dec. 31, 2021 |
| Total assets | $20,080,776 | $21,018,871 at Dec. 31, 2021 |
| Total liabilities | $1,591,752 | $637,162 at Dec. 31, 2021 |
Gross margin is not meaningful because the company reported no product revenue. Q1 2022 investing cash outflow was $46,346, mainly for laboratory equipment; financing cash flow was zero. Cash declined by $1,923,601 during the quarter. The company reported an accumulated deficit of $9.7 million. Liabilities included operating lease obligations; the filing reports no outstanding notes payable at quarter-end.
Material changes versus the prior comparable period
- Net loss rose by about $1.82 million, with operating expenses increasing by about $1.84 million. R&D spending rose as clinical studies and Symphony IL-6 manufacturing scale-up continued.
- G&A increased by about $1.18 million, reflecting investment in infrastructure and approximately $498,000 of public-company operating costs following the November 2021 IPO.
- Operating cash use increased by about $1.50 million, primarily due to inventory, personnel costs, and public-company expenses. Inventory was $893,174 at March 31, 2022, versus none at year-end.
- Common shares outstanding increased to 20,151,244 from 20,112,244 at year-end, including 39,000 shares issued upon cashless warrant exercises.
Outlook, risks, contingencies, and unusual items
- Management believes available cash is sufficient for planned operations and capital expenditures for at least 12 months from the report’s issuance. It expects continued losses and says additional capital will be needed over the next several years; future financing availability is not assured.
- The company’s commercial plan depends on FDA clearance, authorization, or approval for Symphony products. The filing describes the business and market potential as unproven and identifies competition, technological change, key-person dependence, and uncertainty about COVID-19 impacts as risks.
- Non-cancelable purchase commitments, primarily for inventory and advisory services, totaled approximately $1.0 million and were due in less than one year.
- Bluejay licenses Symphony technology and the IL-6 test from Toray. The agreement provides for royalties of 15% of net cartridge sales and minimum royalties after first sale; no Toray cartridge sales or related accruals were reported in Q1.
- Q1 other income included $40,886 earned from NanoHybrids, an entity wholly owned by the Chief Technology Officer; $18,347 was receivable at quarter-end. Total other income was $54,858.
- Bluejay adopted lease accounting effective January 1, 2022, recording initial right-of-use assets and lease liabilities of approximately $200,000. At March 31, total lease liabilities were $401,061.
- The company reported no current legal proceedings and no material change to previously disclosed risk factors. Management concluded disclosure controls were effective at March 31, 2022.
Important facts for investors to verify
- Cash runway assumptions and the timing and amount of any additional financing needed to execute the business plan.
- Regulatory and clinical milestones for Symphony IL-6 and other planned tests, and the prospects for generating product revenue.
- Inventory composition, expected commercial use, and the approximately $1.0 million in near-term purchase commitments.
- Potential dilution from outstanding options and warrants, including 2,484,000 Class A warrants and 76,500 Class B warrants at quarter-end.
- Terms and ongoing amounts associated with the related-party NanoHybrids arrangement and the Toray license and royalty obligations.