Bluejay Diagnostics (BJDX) risk factors, FY2024 10-K

Risks Related to Our Financial Condition and Capital Requirements

1. 01We have incurred significant losses since our inception, do not currently generate any operating income, and expect to continue incurring losses as we work to obtain product approval, and thus we may never achieve or maintain profitability
2. 02We will require additional funding to finance our operations to continue as a going concern, which may not be available to us on acceptable terms, or at all, and our lack of cash resources has slowed the timeline of our clinical trial work and could cause us to run out of cash resources in the near-term
3. 03Our ability to raise additional capital via a registered public offering on Form S-3 will be limited in the near-term as a result of the SEC’s “baby shelf” rules
4. 04We may be obligated to current and/or prior financial advisors under engagement letters that we enter into from time to time, and we are currently subject to such an obligation
5. 05The placement agent from our August 2023 Registered Direct Offering and January 2024 Public Offering could assert that they are entitled to a fee in connection with our June 2024 Public Offering

Risks Related to Our Business

1. 06We are subject to the risks associated with new businesses
2. 07In the event that we do not successfully address these risks, our business, prospects, financial condition, and results of operations could be materially and adversely affected
3. 08As an intermediate step to commercial viability, we need to demonstrate that our IL-6 samples do not degrade over time, and our premise would be undermined if we fail to do so
4. 09There is a risk that validation of the primary outcome measure of our SYMON-I study will not achieve statistical significance
5. 10There is a risk of our cartridges not passing analytical validation, one of the key requirements of FDA approval
6. 11We are currently only pursuing one aspect of analytical validation and we cannot be certain how long the remaining tests will take us
7. 12FDA requirements could change prior to submission and lead to delays and additional costs
8. 13The FDA could request additional data or testing after our application submission, requiring additional costs and delaying approval
9. 14We depend on, and are liable for, SanyoSeiko as our Symphony analyzer contract manufacturing organization (CMO), so its inability or failure to perform appropriately in that capacity may threaten our viability or have a material adverse effect on us and our business, assets and its prospects
10. 15If we can not find a suitable CMO for the manufacturing of our Symphony cartridges, requiring additional costs and delaying FDA approval
11. 16We have not yet launched any products and the ability to do so will depend on the acceptance of our Symphony platform in the healthcare market
12. 17We cannot accurately predict the volume or timing of any sales, making the timing of any revenues difficult to predict
13. 18If third-party payors do not provide coverage and reimbursement for the use of our platform, our business and prospects may be negatively impacted
14. 19Our Symphony platform, including its software and systems, may contain undetected errors, which could limit our ability to provide our products and diminish the attractiveness of our offerings
15. 20If we are not able to attract and retain highly skilled managerial, scientific and technical personnel, we may not be able to implement our business model successfully, and our limited cash resources could require us to make further cost reductions
16. 21We do not have a meaningful amount of authorized shares remaining under our equity compensation plans and therefore cannot incentivize our directors and employees with non-cash compensation
17. 22If we or our manufacturers fail to comply with the regulatory quality system regulations or any applicable equivalent regulations, our proposed operations could be interrupted, and our operating results would suffer
18. 23Product liability suits, whether or not meritorious, could be brought against us due to an alleged defective product or for the misuse of our Symphony platform or test cartridges. These suits could result in expensive and time-consuming litigation, payment of substantial damages, and an increase in our insurance rates
19. 24If we are found to have violated laws protecting the confidentiality of patient health information, we could be subject to civil or criminal penalties, which could increase our liabilities and harm our reputation or our business
20. 25Significant raw material shortages, supplier capacity constraints, supplier disruptions, and sourcing issues may adversely impact or limit our products sales and or impact our product margins
21. 26Specific raw materials used in the production of Symphony IL-6 cartridges are being discontinued or are otherwise limited in supply and the process of finding a suitable substitute could be expensive, use important resources, reduce the efficacy of the platform, or lead to other delays and setbacks
22. 27We do not currently have sufficient supply to or know-how from Toray to reproduce the capture antibody in the Symphony IL-6 cartridges
23. 28We might not be able to discover the underlying cause of a Symphony performance reproducibility issue, and if the issues are inherent in the design of the platform we might have to redesign our approach
24. 29If there is a shift in customer demand for the type of near-patient diagnostic test that we are working to develop, we would be left without a commercially marketable product in the pipeline

Risks Related to Product Development and Regulatory Approval

1. 30We adapted our clinical trial design in 2023 to obtain more patient data to reflect recent FDA feedback, and our regulatory pathway remains subject to further FDA review and feedback and the results of ongoing and future clinical studies
2. 31After our Symphony IL-6 cartridges are redeveloped, transferred to a CMO, and pass analytical validation, our goal is to use the Symphony IL-6 test to complete the testing in the SYMON-II clinical trial
3. 32We plan to redevelop the Symphony cartridge to achieve performance requirements. Delays in the redevelopment or transfer will negatively affect our timeline for the FDA submission of Symphony
4. 33The regulatory approval process which we may be required to navigate may be expensive, time-consuming, and uncertain and may prevent us from obtaining clearance for our planned products
5. 34Product clearances and approvals can often be denied or significantly delayed
6. 35The FDA may not clear or approve our product submissions or applications on a timely basis or at all. Such delays or refusals could have a material adverse effect on our business, financial condition, and results of operations
7. 36Clinical data obtained in the future may not meet the required objectives, which could delay, limit or prevent any regulatory approval
8. 37We may be unable to complete required clinical evaluations, or we may experience significant delays in completing such clinical evaluations, which could prevent or significantly delay our targeted product launch timeframe and impair our viability and business plan
9. 38We and our suppliers may not meet regulatory quality standards applicable to our manufacturing processes, which could have an adverse effect on our business, financial condition, and results of operations
10. 39We may be liable if the FDA or another regulatory agency concludes that we have engaged in the off-label promotion of our products
11. 40Legislative or regulatory reforms may make it more difficult and costly for us to obtain regulatory clearance or approval of any future products and to manufacture, market and distribute our products after clearance or approval is obtained

Risks Related to Our Intellectual Property

1. 41We depend on intellectual property licensed from Toray, and any dispute over the license would significantly harm our business
2. 42We will depend primarily on Toray to file, prosecute, maintain, defend and enforce intellectual property that we license from it and that is material to our business
3. 43We and Toray may be unable to protect or enforce the intellectual property rights licensed to us, which could impair our competitive position
4. 44We and/or Toray may be subject to claims alleging the violation of the intellectual property rights of others
5. 45We and Toray may be subject to claims challenging the invention of the intellectual property that we license from Toray

Risks Related to Our Industry

1. 46We face intense competition in the diagnostic testing market, particularly in the IL-6 space, and as a result we may be unable to effectively compete in our industry
2. 47If we or Toray fail to respond quickly to technological developments, our products may become uncompetitive and obsolete

Risks Related to Ownership of Our Common Stock

1. 48Sales of substantial amounts of our securities in the public market could depress the market price of our common stock
2. 49We could issue “blank check” preferred stock without stockholder approval with the effect of diluting interests of then-current stockholders and impairing their voting rights, and provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable
3. 50The price of our common stock could decline if there are substantial sales of our common stock, particularly sales by our significant stockholders, or when there is a large number of shares of our common stock available for sale
4. 51We do not currently intend to pay dividends on our common stock in the foreseeable future, and consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock
5. 52If securities industry analysts do not publish research reports on us, or publish unfavorable reports on us, then the market price and market trading volume of our common stock could be negatively affected
6. 53Because we have elected to use the extended transition period for complying with new or revised accounting standards for an “emerging growth company” our financial statements may not be comparable to companies that comply with public company effective dates
7. 54Anti-takeover provisions in our charter documents and Delaware law could discourage, delay or prevent a change in control of our Company and may affect the trading price of our common stock
8. 55We will continue incurring increased costs as a result of operating as a public company, and our management is now required to devote substantial time to new compliance initiatives and corporate governance practices
9. 56We recently identified a material weakness in our internal control over financial reporting, and our business and stock price may be adversely affected if our internal control over financial reporting is not effective