Bluejay Diagnostics Inc

Current report

We have incurred significant losses since our inception, do not currently generate any operating income, and will continue to incur losses as we work to obtain product approval, and thus we may never achieve or maintain profitability.

Current report

We incurred substantial losses of approximately $10.0 million and $9.3 million for fiscal years 2023 and 2022, respectively, and approximately $4.7 million for the six months ended June 30, 2024, and from our inception through June 30, 2024, we had an accumulated deficit of approximately $31.6 million. We do not currently generate any operating income. As of June 30, 2024, we had cash and cash equivalents of approximately $8.1 million, and current liabilities of approximately $2.2 million. We expect that our net cash used in operating activities will continue to be negative as we continue to conduct clinical trial work and, if such trials are successful, begin preparation of an FDA submission. These raise substantial doubt with respect to our ability to continue as a going concern. The Company expects that it will need to raise additional capital to continue to fund its operations, and absent such funding, it will likely run out of available cash resources in the first quarter of 2025. If we are unable to obtain such financing, or otherwise consummate strategic alternatives, we may be required to further delay our FDA regulatory strategy, and to delay or reduce the scope of our clinical trials, research or development programs, commercialization efforts or manufacturing commitments and capacity. Such inability to obtain additional financing when needed could have a material adverse effect on our business, results of operations, cash flow, financial condition and prospects.

Current report

Our failure to become and remain profitable could depress the value of our common stock and impair our ability to raise capital, expand our business, maintain our development efforts, or continue our operations. A decline in the value of our common stock could also cause you to lose all or part of your investment.

Current report

The report of our independent registered public accounting firm on our financial statements for the year ended December 31, 2023, included an emphasis of matter paragraph stating that our recurring losses from operations and continued cash outflows from operating activities raised substantial doubt about our ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of this going concern uncertainty and have been prepared under the assumption that we will continue to operate as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. If we are unable to continue as a going concern, we may be forced to liquidate our assets which would have an adverse impact on our business and developmental activities. In such a scenario, the values we receive for our assets in liquidation or dissolution could be significantly lower than the values reflected in our consolidated financial statements. The reaction of investors to the inclusion of a going concern statement by our independent registered public accounting firm and our potential inability to continue as a going concern may materially adversely affect our stock price and our ability to raise new capital.

Current report

We will need to raise additional funding to fund our working capital needs. Additional financing may not be available on acceptable terms, or at all. Failure to obtain additional capital may force us to limit or terminate our operations.

Current report

We expect that the net proceeds of the public offering we consummated in June 2024 will not be sufficient for us to fund the working capital needs of our business beyond first quarter of 2025. We intend to continue to seek funds through equity or debt financings, collaborative or other arrangements with corporate sources, or through other sources of financing. Additional funding may not be available to us on acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may be required to further delay our FDA regulatory strategy, and to delay or reduce the scope of our clinical trials, research or development programs, commercialization efforts or manufacturing commitments and capacity. Such inability to obtain additional financing when needed could have a material adverse effect on our business, results of operations, cash flow, financial condition and prospects.

Current report

Ongoing materials, manufacturing and quality control issues could negatively affect our timeline for the FDA submission of Symphony.

Current report

We are experiencing materials, manufacturing and quality control issues that, until addressed, could negatively affect our timeline for the FDA submission of Symphony. We are working with Toray, our licensing and cartridge intermediate supplier, to address these issues. Our ability to engage in and complete the activities needed for an FDA submission will be contingent upon us addressing these and other challenges, including possessing and/or raising sufficient capital, remaining a going concern, and producing product capable of supporting our product requirements and meeting analytical validation, clinical validation. A delay, coupled with our lack of cash resources, could have a material adverse effect on our business, financial condition, and results of operations.

Current report

Risks Related to Our Common Stock and Our Recently Completed Public Offering

Current report

Sales of substantial amounts of our securities in the public market could depress the market price of our common stock.

Current report

Our common stock is listed for trading on the Nasdaq Capital Market. If our stockholders sell substantial amounts of our common stock in the public market, including the shares of common stock issuable upon the exercise of the June 2024 Prefunded Warrants, Class C Warrants and Class D Warrants issued in the public offering that we consummated in June 2024, and shares issued as consideration in any future acquisitions, or the market perceives that such sales may occur, the market price of our securities could fall and we may be unable to sell our securities in the future.

Current report

Although our common stock is listed on the Nasdaq Capital Market, the exchange could subsequently delist our common stock if we fail to comply with ongoing listing standards.

Current report

Our common stock currently is listed for quotation on the Nasdaq Capital Market. We are required to meet specified financial requirements in order to maintain such listing, including a requirement that the bid price for our common stock remain above $1.00, and that the market value of our publicly held securities be at least $1 million.

Current report

On February 28, 2024, we received a notification letter from the Nasdaq’s Listing Qualifications Staff notifying us that the closing bid price for our common stock had been below $1.00 for the previous 30 consecutive business days and that we therefore are not in compliance with the minimum bid price requirement for continued inclusion on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2). The notification has no immediate effect on the listing of our common stock on the Nasdaq Capital Market.

Current report

Under the Nasdaq Listing Rules, we have a period of 180 calendar days to regain compliance. To regain compliance, the closing bid price of our common stock must be at least $1.00 or higher for a minimum of ten consecutive business days, and in such case, Nasdaq will provide us with written confirmation of compliance. If we do not regain compliance by August 26, 2024, we may be eligible for an additional 180 calendar days, provided that we meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for Nasdaq, except the bid price requirement. If we are not eligible or it appears to Nasdaq that we will not be able to cure the deficiency during the second compliance period, Nasdaq will provide written notice to us that our common stock will be subject to delisting. In the event of such notification, we may appeal Nasdaq’s determination to delist its securities, but there can be no assurance that Nasdaq would grant our request for continued listing.

Current report

We intend to take all reasonable measures available to us to achieve compliance to allow for continued listing on the Nasdaq Capital Market. However, there can be no assurance that we will be able to regain compliance with the minimum bid price requirement or will otherwise be in compliance with other Nasdaq listing criteria. On June 20, 2024, we effected a reverse stock split of our shares of common stock at a ratio of 1-for-8, however, our common stock has not remained above a trading price of $1.00 following such reverse stock split. If our common stock does not regain compliance with the minimum price requirement during the applicable compliance period, we may need to affect a further reverse stock split with the intent that the per-share trading price becomes greater than $1.00 per share on a sustained basis sufficient to regain compliance with the applicable Nasdaq requirements.

Current report

If our common stock is delisted, we may seek to have our common stock quoted on an over-the-counter marketplace, such as on the OTCQX. The OTCQX is not a stock exchange, and if our common stock trades on the OTCQX rather than a securities exchange, there may be significantly less trading volume and analyst coverage of, and significantly less investor interest in, our common stock, which may lead to lower trading prices for our common stock.

Current report

Any potential delisting of our common stock from the Nasdaq Capital Market may have materially adverse consequences to our stockh olders, including:

Current report

The exercise of the June 2024 Prefunded Warrants and Class D Warrants may result in a substantial increase in the number of shares of our common stock that are outstanding.

Current report

As of August 6, 2024, 95,000 June 2024 Prefunded Warrants and 5,317,025 Class D Warrants were outstanding, each of which was exercisable for one share of common stock at a price of $0.0001 per share. In addition, if the Class D Warrants are approved by our stockholders, we currently expect based on the recent trading price of our common stock that each Class D Warrant will be exercisable for approximately four shares of common stock (resulting in such Class D Warrants being exercisable in the aggregate for approximately 21.2 million shares of our common stock). The exercise of the June 2024 Prefunded Warrants and Class D Warrants would therefore be expected to result in a substantial increase in the number of shares of common stock outstanding and therefore materially dilute the ownership percentage of currently outstanding share of common stock.

Current report

Provisions of the Class C Warrants and Class D Warrants we sold in June 2024, as well as the previously issued August 2023 Warrants and January 2024 Warrants, could discourage an acquisition of us by a third-party.

Current report

Certain provisions of the Class C Warrants and Class D Warrants we sold in June 2024, as well as the August 2023 Warrants and January 2024 Warrants, could make it more difficult or expensive for a third-party to acquire us. The Class C Warrants, Class D Warrants, August 2023 Warrants and January 2024 Warrants each prohibit us from engaging in certain transactions constituting “fundamental transactions” unless, among other things, the surviving entity assumes our obligations under the applicable warrants. These and other provisions of the Class C Warrants, Class D Warrants, August 2023 Warrants and January 2024 Warrants could prevent or deter a third-party from acquiring us even where the acquisition could be beneficial to you.

Current report

The Class C Warrants and Class D Warrants may have an adverse effect on the market price of our common stock and make it more difficult to affect a business combination.

Current report

To the extent we issue shares of common stock to affect a future business combination, the potential for the issuance of a substantial number of additional shares of common stock upon exercise of the Class C Warrants and Class D Warrants could make us a less attractive acquisition vehicle in the eyes of a target business. Such Class C Warrants and Class D Warrants, when exercised, will increase the number of issued and outstanding shares of common stock and reduce the value of the shares issued to complete the business combination. Accordingly, the Class C Warrants and Class D Warrants may make it more difficult to effectuate a business combination or increase the cost of acquiring a target business. Additionally, the sale, or even the possibility of a sale, of the shares of common stock underlying the Class C Warrants and Class D Warrants could have an adverse effect on the market price for our securities or on our ability to obtain future financing. If and to the extent the Class C Warrants and/or Class D Warrants are exercised, you may experience dilution to your holdings.

Previous report

Additional Risks Related to Our Financial Condition and Capital Requirements

Previous report

To remain a going concern, we are in need of imminent material additional capital and absent our ability to raise such material capital in the imminent near-term, we may be required to undertake a process of liquidation under U.S. bankruptcy laws, which we expect would holders of our common stock not recouping any material value for their shares.

Previous report

As of March 31, 2024, we possessed cash and cash equivalents of approximately $2.7 million, while having current liabilities of approximately $1.5 million. During the quarter ended March 31, 2024, our net cash used in operating activities was approximately $2.3 million, and we will need to raise a material amount of additional capital in the imminent near-term to continue as a going concern, and that absent such near-term funding, we will likely run out of available cash resources in the near-term. Our board of directors has been exploring potential pathways for material financing, or other strategic alternatives, and to date, the board of directors has not been able to identify alternatives that it believes to be viable. If we are unable to obtain financing in the imminent future, our board of directors could determine to cause the Company to undertake a process of liquidation under Chapter 7 of applicable U.S. bankruptcy laws. In such event, we do not currently expect that holders of shares of our common stock would recoup any material value in such process.

Previous report

In addition to our current non-compliance with Nasdaq’s $1.00 minimum bid price requirement, a further decline in the price of our common stock could cause us to be delisted by Nasdaq on that basis.