| NATURE OF OPERATIONS AND BASIS OF PRESENTATION | 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, plasma, and serum 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 the 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
with the determination of 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 the Symphony platform, including two cardiac biomarkers (hsTNT and NT pro-BNP),
as well as others. 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 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 potential 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. August
2023 Financing On
August 24, 2023, the Company entered into a securities purchase agreement with certain institutional and accredited investors (the “Purchase
Agreement”) relating to the registered direct offering and sale of 216,000 shares of the Company’s common stock at a purchase
price of $7.365 per share (the “Offering”). In
a concurrent private placement, the Company also issued to such institutional and accredited investors unregistered warrants to purchase
up to 216,000 shares of Common Stock (the “Warrants”). Pursuant to the terms of the Purchase Agreement, for each share of
Common Stock issued in this offering an accompanying Warrant was issued to the purchaser thereof. Each Warrant is exercisable for one
share of Common Stock (the “Warrant Shares”) at an exercise price of $7.24 per share, will be immediately exercisable upon
issuance and will expire five years from the date of issuance. The Warrants were offered and sold at a purchase price of $0.125 per underlying
warrant share, which purchase price is included in the offering price per share of Common Stock issued in the Offering (the “Private
Placement”). Pursuant
to an engagement letter, dated as of August 7, 2023 (the “Engagement Letter”), between the Company and H.C. Wainwright &
Co., LLC, or the placement agent, the Company agreed to pay the placement agent a total cash fee equal to 7.0% of the gross proceeds
received in the Offering and the Private Placement. The Company also agreed to pay the placement agent in connection with the Offering
and the Private Placement a management fee equal to 1.0% of the gross proceeds raised in the Offering and Private Placement, $45,000
for non-accountable expenses, and $15,950 for clearing fees. In addition, the Company agreed to issue to the placement agent, or its
designees, warrants to purchase up to 15,120 shares of Common Stock (the “Placement Agent Warrants”), which represents 7.0%
of the aggregate number of shares of Common Stock sold in the Offering. The Placement Agent Warrants have substantially the same terms
as the Warrants, except that the Placement Agent Warrants have an exercise price equal to $ 9.2063, or 125% of the offering price per
share of Common Stock sold in the Offering, and a term of five years from the commencement of the sales pursuant to the Offering. The
gross proceeds to the Company from the Offering and the Private Placement are $1,590,840. The Company incurred offering costs of $413,544. FDA
Regulatory Strategy The
Company’s current regulatory strategy is designed to support commercialization of Symphony in the United States pending
marketing authorization from the FDA. Previously, the Company’s regulatory strategy involved clinical studies involving
COVID-19 patients. However, the Company has shifted its focus away from COVID-19 patients due to a significant decline in the number
of COVID-19 related hospitalizations. Pursuant to this revised strategy, the Company plans to conduct a clinical study to support an
FDA regulatory submission with an initial indication for risk stratification of hospitalized sepsis patients. The Company submitted
a pre-submission application to the FDA presenting the new study design in May 2023 and participated in a pre-submission meeting on
August 11, 2023. At the meeting, the FDA provided feedback on the new study design, determined that the submission of a 510(k) is
the appropriate premarket submission pathway, and requested that certain data be provided in the 510(k). Based on this feedback, the
Company intends to proceed as planned while taking into account the FDA’s feedback. The Company believes that it will maintain
the previously disclosed Symphony IL-6 regulatory submission timeline of the first half of 2024. The
Company has targeted certain medical institutions for its study, which the Company believes will also help support initial commercialization
and market penetration. The Company believes that this clinical trial expansion could also support additional indications, but that any
such expansion also could delay obtaining marketing authorization for the product. Based on the pre-submission meeting with the FDA,
the focus of the clinical trial will be the risk stratification of hospitalized sepsis patients. The
Company maintains contracts with Sanyoseiko Co. Ltd (“Sanyoseiko”)
to manufacture our device and cartridges, and with Toray Industries, Inc (“Toray”) to manufacture
in the near-term (through its wholly owned subsidiary Kamakura Techno-Science, Inc.) certain product intermediary components for use in
cartridges being manufactured for the Company by Sanyoseiko. Risks
and Uncertainties As
noted above, Bluejay is reliant upon Toray and Sanyoseiko to provide cartridges in sufficient quantity and quality to complete our clinical
trials, and our clinical trials could be delayed if the Company encountered any material supply interruptions while the clinical trials
are being conducted. In addition, there can be no assurance that we will be able to obtain necessary regulatory authorization for the
manufacturing or marketing of the Symphony in the United States or elsewhere. There also can be no assurance that we will successfully
complete any clinical evaluations necessary to receive regulatory approvals, or that the clinical trial will demonstrate sufficient safety
and efficacy of the Symphony. The failure to adequately demonstrate the clinical performance of the Symphony device could delay or prevent
regulatory approval of the device, which could prevent or result in delays to market launch and could materially harm our business. In
addition to the FDA regulatory strategy 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). On April 25, 2023, at the Company’s
request, Nasdaq’s Listing Qualifications Staff notified the Company that it had extended the time 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 needed to be at least $1.00 or higher for a minimum of ten consecutive business days. On
July 24, 2023, the Company executed a reverse stock split of its shares of common stock at a ratio of 1-for-20 (the “Reverse Stock
Split”), with a corresponding reduction in the number of authorized outstanding number of shares of common stock from 100,000,000
to 7,500,000. The Reverse Stock Split became effective on July 24, 2023, when the Company’s common stock opened for trading on
The Nasdaq Capital Market on a post-split basis under the Company’s existing trading symbol, “BJDX.” At such time,
the Company’s common stock also commenced trading with a new CUSIP number, 095633301. On
August 8, 2023, the Company received a letter from the Listing Qualifications Department of Nasdaq notifying the Company that, based
on the closing bid price of the Company’s common stock having been at least $1.00 per share for the required period, the Company
has regained compliance with Nasdaq Listing Rule 5550(a)(2) and the minimum bid price deficiency matter previously disclosed by the Company
on October 25, 2022 is now closed. All
of the Company’s historical share and per share information related to issued and outstanding common stock and outstanding options
and warrants exercisable for common stock in these financial statements have been adjusted, on a retroactive basis, to reflect this 1-for-20
reverse stock split. Going
Concern The
Condensed Consolidated Financial Statements for the nine month periods ended September 30, 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. 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 $5,076,937, as of September 30, 2023. The Company continues to develop the Symphony device
and its first test for the measurement of IL-6. The Company remains committed to obtaining FDA clearance and will conduct clinical
trials to obtain sufficient 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 $2,800,140 of current liabilities on its balance sheet as of September 30, 2023. The Company
estimates cash resources will be sufficient to fund its operations into the first quarter of 2024. The Company will need additional
capital to fund its planned operations for the next 12 months. The
Company expects that it will 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 its FDA regulatory strategy, and 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 September 30, 2023 and December
31, 2022, its results of operations and cash flows for the three and nine months ended September 30, 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 and nine months ended September 30, 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. |
