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Item 1. Business

2023-03-20 compared with 2022-03-10 · 316 added, 899 removed, 25 unchanged (98% of the section changed)

We are a late-stage pre-revenue

company focused on improving patient outcomes through a more cost efficient, rapid, near patient product for triage, diagnosis and monitoring

of disease progression.

We believe there is a market need for an on-site and rapid diagnostic system that can be employed for testing

and monitoring.

Our diagnostic system, which we refer to as “Symphony,” is an exclusively licensed, patented, low-cost, system

that consists of a small footprint instrument and single-use indication specific test cartridges, that we believe, if cleared, authorized,

or approved by the U.S.

Food and Drug Administration (“FDA”), can provide a solution to this market need rapidly and with

laboratory quality results in approximately 24 minutes, in the clinic, Intensive Care Unit (“ICU”), Emergency Room (“ER”)

and in other hospital and clinical setting settings where rapid and reliable results are required.

Currently, testing is generally performed

in a laboratory, and the transportation and logistics of transporting the samples to the lab and obtaining the result takes between 8-48 hours.

Our platform is a sample-to-result system that has been shown in a clinical study to provide results in approximately 24 minutes.

business model is to generate revenue from the sale of the table-top Symphony instrument, and from the sale of single-use indication specific

cartridges that are used by the Symphony instrument for the diagnostic test.

Once the test material (generally a small volume blood sample)

is transferred to a single-use indication specific Symphony cartridge, no additional sample preparation or pre-processing is required.

Based on the results of the clinical study described below, we believe Symphony may be able to eliminate the time required for transportation

and logistics, and may be able to eliminate the number of operational ‘touch-points’ from ‘sample-to-result’ from

Our technology is the result of more than 12 years of development by

our development partner and investor, Toray Industries, Inc.

For the past three years, Toray has used the technology

successfully in Japan by selected clinical institutions for measurement of Interleukin-6 (“IL-6”) in rheumatoid arthritis

to monitor disease progression.

Based in part on this extensive development, we believe we are now positioned to complete the last stages

of development needed for commercialization in the US.

In a 2016 study conducted in

Japan (the “Japan Study”), which was sponsored by Toray, it was shown that the Symphony system (known as the RAY-FAST system

in Japan) can provide accurate results within 24 minutes.

The Japan Study was conducted at the University of Yamanashi Hospital in Yamanashi,

Japan to evaluate the accuracy and efficacy of the Symphony system in rheumatoid arthritis patients.

The results of the study were published

in Cytokine, “Development of a quick serum IL-6 measuring system in rheumatoid arthritis” (Volume 95.

Study, 150 blood samples were collected from 76 rheumatoid arthritis patients, of which 16 samples were lower than the detection limit

of the Symphony system.

The Japan Study then examined the correlation between the results from the Symphony system and the chemiluminescent

enzyme immunoassay (CLEIA) method.

The serum IL-6 concentrations measured by the Symphony system were positively correlated with those

measured by the CLEIA method.

The correlation between the Symphony system and CLEIA method for IL-6 was r = 0.941 (the closer the r-value

is to 1, the more closely the two variables are related).

As such, the Japan Study concluded that the Symphony system was as accurate

as CLEIA methods.

In addition, the Japan Study confirmed the time required for the measurement of the IL-6 concentration to be 24 minutes.

Our first diagnostic test in

development is for triage of sepsis in patients utilizing IL-6 as the target biomarker.

According to a report by Market Data Forecast

(February 2020), the total market for IL-6 testing for sepsis triage was $934 million in 2020 and is estimated to reach $1.4 billion by

2025 growing at a CAGR of 8.5%.

IL-6 has important roles in both innate and adaptive immunity.

It is an inflammatory biomarker, also considered

as a ‘first-responder,’ that is elevated in patients with infection, sepsis, and septicemia.

Reports have shown IL-6 concentrations

correlate with severity of sepsis, progression of cancer, rheumatoid arthritis and many other severe conditions as defined by clinical

and laboratory parameters.

IL-6 is a clinically established biomarker for assessment of severity of infection and inflammation across

many disease indications.

IL-6 appears early in the blood circulation as a ‘first responder’ during infection or inflammation.

One factor that is a challenge for healthcare professionals to overcome is the amount of time it takes to determine if a patient is septic.

It usually takes about several hours to receive the lab results of a patient who may be in a very critical state, and the risk of dying

increases every hour a patient is not treated for sepsis.

We believe early measurement of IL-6 can enable physicians to make better therapeutic

and treatment decisions.

Due to its clinical significance hospital systems and centralized testing labs routinely utilize IL-6 testing.

The importance of IL-6 testing has been further highlighted during

the COVID-19 pandemic, and IL-6 concentrations in blood have been found to be elevated in patients with COVID-19-associated systemic inflammation

and hypoxic respiratory failure.

We are further developing a

pipeline of diagnostic tests for Symphony including triage of myocardial infarction (“MI”), congestive heart failure (“CHF”),

neutropenic sepsis in cancer, and other disease diagnostic indications using the same Symphony platform.

We intend to pursue the general

diagnostic marketplace following a sufficient clinical trial to support a 510(k) submission with the FDA, with the initial indication

as a general diagnostic test for sepsis in triage of patients.

We do not currently have any regulatory clearance for our Symphony products

and our Symphony products will need to receive regulatory authorization from FDA, in order to be marketed as a diagnostic product in the

United States.

Our operations to date have

been funded primarily through sales of preferred stock and convertible notes.

We expect to incur increasing expenses over the next two

years to develop additional diagnostic tests, to expand our sales and marketing infrastructure, and our research and development activities.

We believe the proceeds from our Initial Public Offering (“IPO”) on November 10, 2021 will be sufficient to reach commercialization.

We were incorporated under

the laws of Delaware on March 20, 2015.

Our headquarters are located in Acton, Massachusetts.

Symphony Advantages

We believe there is a fast-growing

market for near-patient, low-cost diagnostic platforms that are used for time-sensitive patient testing in life-threatening situation

in hospitals, Long-Term Acute Care facilities (“LTACs”), intensive-care units (“ICUs”) and clinics to replace

legacy testing formats and processes.

We believe our platform is well positioned to meet this need.

Based on the results of the Japan

Study, we believe Symphony may be able to provide results within approximately 24 minutes.

In addition, based on the results of the Japan

Study, we believe Symphony may be able to reduce test result time from days to minutes and to provide results that appear to be as accurate

as those performed in a laboratory, allowing for more frequent testing, which we believe may lead to shortened hospital stays and improved

patient outcomes, all of which also leads to reduced patient care costs.

Symphony is an automated diagnostic

system, consisting of a fluorescence immuno-analyzer which uses a single-use diagnostic test cartridge with reagents integrated in the

Symphony utilizes a ‘sample-to-result’ format, which means that once a specimen is taken from the patient, it is

placed in the cartridge and then the cartridge is placed inside the analyzer where the test is run without further technician intervention

or additional reagent.

This reduces test complexity and eliminates the need for highly trained and expensive laboratory technicians to

run the tests.

Our platform is designed to enable simple, rapid, and cost-effective analysis from a single clinical sample, which will

allow LTACs, hospitals and clinics that traditionally could not afford more expensive or complex diagnostic testing platforms to modernize

their laboratory testing and provide better patient testing at an affordable cost in time sensitive, life-threatening situations.

our on-site testing may also help avoid potential penalties often imposed on LTACs by insurance companies for failure to monitor for potential

Based on the results of the

Japan Study, we believe Symphony IL-6 can make a significant impact with turn-around time.

As the whole blood samples do not need to be

pre-processed, this medical device can be run at the patient’s bedside, effectively eliminating the extended turn-around time for

If incorporated in the hospital

workflow, this medical device can provide assistance with monitoring patients post-surgery, and monitoring patients admitted in the emergency

room who are suspected to have acute symptoms of sepsis.

We believe our technology can

provide the following advantages over traditional diagnostic systems:

● Ease of Use .

Symphony is a sample-to-results system.

No sample preparation or pre-processing is required.

Once the samples are placed inside the cartridge and the cartridge is placed in

the analyzer, the technician does not need to monitor the test and can complete other unrelated tasks.

● Cost Savings .

We believe that the Symphony system and

our expected pricing strategy will make it possible for LTACs, clinics and many types of hospitals that have cost constraints to adopt

in-house testing.

Our customers will be able to either purchase the analyzer or lease it at an affordable price through a third-party

leasing company.

A typical Symphony test would cost approximately $80 (the cost of the single-use cartridge to the health-care facility)

compared to the approximately $275 per test charged by a third-party lab, excluding overhead and transportation cost.

● Time Savings .

Saving pre-processing time for samples

reduces time to test results by approximately 1-2 hours depending on the pre-processing required for a particular assay system.

Furthermore, as current tests can only be performed in a laboratory, the transportation and logistics of transporting the samples to

the lab and obtaining the result takes between 8-48 hours.

Based on the results of the Japan Study, we believe Symphony may be able

to eliminate the time required for transportation and logistics and may be able to eliminate the number of operational ‘touch-points’

from ‘sample-to-result’ from six to two.

● Space Savings .

Symphony’s significantly smaller

tabletop design (14.5 inches by 10.5 inches), compared to the 100-200 square feet of space required by other diagnostic systems, will

make it possible for many healthcare providers to perform in-house testing where there is limited available laboratory space.

● Versatile Platform with the Capability to Deliver a Broad

Our Symphony platform has the potential for broad application across a number of areas in near-patient diagnostic testing.

The same analyzer can be utilized for all of our planned future diagnostic tests.

● Throughput and Multiple Testing Capability .

has been designed to provide the ability to analyze up to six distinct targets or six different patient samples simultaneously within

approximately 24 minutes.

This functionality will allow any organization to run multiple tests or panels on a single analyzer.

According to research published

by Allied Market Research (Global Invitro Diagnostics Market, 2020-2027), the global in vitro diagnostics market was $67.1 billion in

projected to reach $91.1 billion by 2027, a compound annual growth rate (“CAGR”) of 4.8% over 7 years driven by prevalence

of chronic diseases including cancer, autoimmune diseases, and other inflammatory conditions.

We believe the Symphony sample-to-result

platform is well suited to address a subset of this market, including sepsis, cardio-metabolic diseases, cancer and other diseases that

require time-sensitive, near-patient testing.

According to a report by Market

Data Forecast (February 2020), the total market for IL-6 testing for sepsis triage was $934 million in 2020 and is estimated to reach

$1.4 billion by 2025 growing at a CAGR of 8.51%.

Our platform is designed to provide on-site and rapid test results, with no pre-processing

of the blood, and as such, we intend to pursue the following markets for triage:

● Sepsis Triage using IL-6 .

According to the CDC, each

year, at least 1.7 million adults in America develop sepsis and nearly 270,000 Americans die as a result of sepsis.

In the United States,

1 in 3 patients who dies in a hospital has sepsis.

In addition, in 2016, according to the National Center for Health Statistics, 8.3

million people were served by LTACs.

A major responsibility of these LTAC facilities is to monitor sepsis.

We estimate the potential

total market for sepsis triage testing in LTACs is approximately $2–$3 billion annually.

Septic shock and multi-organ failure were

the most common cause of death in COVID-19 patients, often due to suppurative pulmonary infection.

● Chest Pain Triage using hsTNT and NT-proBNP.

to a Washington Post article in April 2019, there are 7.6 million people in the United States each year who visit or are admitted to

the hospital with chest pain.

Research suggests that about 50% of those patients are admitted for further observation and care of potential

heart disease, and that approximately 3.6 million people annually needed cardiac triage.

Two major biomarkers that are assessed to diagnose

and monitor cardiac irregularities are hsTNT and NT-proBNP.

These clinically established biomarkers generated approximately $4.6 billion

in revenue in 2019 and will continue to grow with a CAGR of 11.2% through 2027.

We are developing diagnostic tests for triage situations,

using these cardiac biomarkers (hsTNT and NT pro-BNP), which were approximately a $3.6 billion market in 2020 and are estimated to be

$5.5 billion by 2025, a CAGR of 8.9% (report by Markets and Markets, January 2021).

The CDC National Center for

Health Statistics estimates that the market for the diagnostic cardiac triage tests will increase by more than 20% per year over

the next several years.

Many factors are driving the growth of these markets, particularly the accelerating adoption of near-patient testing

inside hospitals, LTACs and ICUs.

According to the 2021 edition of American Hospital Association Hospital Statistics, there were approximately

6,090 hospitals in the United States in 2019, approximately 5,000 of which are considered community hospitals.

According to outside research,

fewer than half of these facilities have the capabilities, technology and products for near-patient diagnoses for triage of either sepsis

or cardiac conditions.

We believe these facilities are candidates for our diagnostic platform.

Bluejay Diagnostics, Inc.

is a medical diagnostics company developing rapid tests using whole blood on our Symphony technology platform (“Symphony”)

to improve patient outcomes in critical care settings.

Our 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

critical care settings, including Intensive Care Units (“ICUs”) and Emergency Rooms (“ERs”), where rapid and reliable

results are required.

Our 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, and is considered

a ‘first-responder,’ for 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 determining a patient’s level of severity

at triage and our Symphony IL-6 test has the ability to consistently monitor this critical care biomarker with rapid results.

In the future we plan to develop additional tests

for Symphony including two cardiac biomarkers (hsTNT and NT pro-BNP) as well as other tests using the Symphony platform.

We do not yet

have regulatory clearance for our Symphony products, and our Symphony products will need to receive regulatory authorization from the

FDA in order to be marketed as a diagnostic product in the United States.

Our operations to date have been funded primarily

through the proceeds of our initial public offering (the “IPO”) on November 2021 (the “IPO Date”).

We were incorporated

under the laws of Delaware on March 20, 2015.

Our headquarters is located in Acton, Massachusetts.

The Symphony platform and our initial biomarker

test, Symphony IL-6 test, is well suited to address a subset of the global in vitro diagnostics devices (“IVDs”) market,

including sepsis, cardio-metabolic diseases, cancer and other diseases that require rapid tests.

Symphony targets critical care markets

where physicians must quickly determine patient acuity to identify optimal treatment regimens.

Our Business Model

Our goal is to become a leading

provider of sample-to-result, ‘near-patient’ diagnostic testing in infectious, inflammatory and metabolic diseases by leveraging

the strengths of our Symphony platform.

We intend to market the use of Symphony by targeting our sales and marketing to LTACs, clinics,

and community hospitals in the United States.

We believe that the format of our low-cost, ‘near-patient’ platform will be

attractive to these institutions which may not otherwise have the financial resources, laboratory space, or trained personnel to justify

the purchase of a diagnostic solution.

Our business model relies on the following:

Our goal is to become the first provider of rapid

tests for infectious, inflammatory and metabolic diseases by leveraging the strengths of our Symphony platform.

We intend to target our

sales and marketing of Symphony to the largest critical care facilities in the United States.

Our business model includes the following:

● Attractive Financing Model .

We intend to provide our

customers the ability to lease our analyzer at an affordable cost through third-party financial institutions.

As such, our business model

will not require a significant capital outlay by health care facility customers and, by moving testing in-house, will create a profit

center for the facility.

We intend to offer various financing options for the device itself.

As such, our business model should not require customers to incur

a significant capital outlay.

● Recurring Revenue .

We intend to sell our customers disposable,

single-use diagnostic test cartridges.

Our single-use test cartridges will create a growing and recurring revenue stream for us as we

sell more systems, as adoption and utilization increase, and as we develop tests for additional indications.

We expect the sale of test

cartridges to generate the majority of our revenue.

● Expand our Menu of Diagnostic Products .

If adoption increases,

we believe the average customer use of the Symphony platform will begin to increase.

As we expand our test menu, we believe we will be

able to increase our annual revenue per customer through the resulting increase in utilization.

To that end, we are in development on

a broad menu of diagnostic tests that we believe will satisfy growing medical needs and present attractive commercial opportunities.

● Increase our revenue and reduce our cost of sales through

a ‘waterfall’ sales strategy .

Our proprietary test cartridges and Symphony analyzers are manufactured through our agreements

with Toray and Sanyoseiko Co., Ltd.

(“Sanyoseiko”), thus reducing the manufacturing cost structure.

They currently build

our Symphony system and test cartridges and currently purchase materials at high per unit cost due to low purchase volumes.

that by focusing our initial sales efforts on multi-location institutions, increased adoption and utilization of Symphony may lead to

increasing sales within a relatively small customer base.

We believe sales within those institutions may lower our salesforce costs.

We believe the increased unit sales of our Symphony and cartridges will not only increase revenue, but will also allow us to reduce manufacturing

costs and improve gross margins enhancing our ability to provide a lower cost solution to customers.

Our Symphony Platform

The Symphony platform is an

innovative and proprietary technology platform that in the Japan Study appeared to provide rapid and accurate measurements of key diagnostic

biomarkers found in whole blood.

Symphony is compact and portable as compared with current laboratory diagnostic platforms that we believe,

based on the Japan Study, provide comparable sensitivity.

In the Japan Study, Symphony appeared to provide lab-quality results in a near-patient

Symphony is designed for usability;

all sample preparation and reagents are integrated into the disposable Symphony Cartridges.

Symphony only needs a few hundred femtograms (10 -10 grams) of the target to provide quantitation directly from whole blood.

Therefore, Symphony only requires a few drops of blood to generate a result in approximately 24 minutes.

Symphony is comprised of the

Symphony Fluorescence Immuno-analyzer and the Symphony Cartridge Library, shown in Figure 1.

The Symphony analyzer orchestrates whole

blood processing, biomarker isolation, and immunoassay preparation using non-contact centrifugal force.

intend to sell single-use diagnostic test cartridges.

Our cartridges will create a growing and recurring revenue stream, as adoption

and utilization increase, and as we develop tests for additional indications.

We expect the sale of test cartridges to generate the majority

of our revenue and gross profit.

● Expand our Menu of Diagnostic

As adoption increases, the average customer use of the Symphony platform should also increase.

As we expand our test menu,

we will be able to increase our annual revenue per customer through the resulting increase in utilization.

The Symphony Platform

The Symphony platform is an innovative and proprietary

technology platform that provides rapid and accurate measurements of key diagnostic biomarkers found in whole blood.

Symphony is compact

and can be deployed mobile as compared to current laboratory diagnostic platforms.

Symphony incorporates a user-friendly interface where

all sample preparation and reagents are integrated into disposable Symphony cartridges.

Symphony only requires a few drops of blood to

provide a measurement in less than 20 minutes.

The Symphony analyzer orchestrates whole blood

processing, biomarker isolation, and immunoassay preparation using non-contact centrifugal force.

All necessary reagents and components

3 unchanged sentences

Intermitted centrifugation cycles enable complex fluid movements,

enabling sequential reagent additions and independent reaction steps inside the hermitically sealed Symphony Cartridge.

allowing sequential reagent additions and independent reaction steps inside the hermitically sealed Symphony cartridge.

At the conclusion

of the test, the Symphony analyzer measures the fluorescence signature correlating to a highly sensitive quantitation of the biomarker.

Photograph of the Symphony Fluorescence

Immuno-analyzer and a Symphony IL-6 Cartridge.

Barcode reader (not pictured) is included to streamline clinical workflow.

Although our first commercial

offering will be focused on the detection and quantitation of IL-6, we believe the flexibility of our technology will allow us to deploy

new biomarkers for additional indications.

Every Symphony Cartridge inserted in the analyzer has a unique code which programs the Symphony

to perform the specific test.

This unique feature will enable the release of new tests without the need for system redesigns or updates.

Furthermore, this automated feature will eliminate the need for system recalibrations for every product lot, further streamlining the

clinical workflow and enhancing usability.

The Symphony IL-6 test principle

employs direct sandwich Enzyme Linked Immunosorbent Assay (“ELISA”) for the quantitation of human IL-6 by fluorescence enzyme

immunoassay (“FEIA”), as shown in Figure 2.

Within the single-use Symphony IL-6 Cartridge, the assay separates plasma from

whole blood and forms complexes through reaction of any IL-6 present in the sample with highly specific IL-6 binding antibodies.

the IL-6 sandwich is formed, a fluorescent substrate is enzymatically decomposed to generate fluorescent molecules.

The fluorescence intensity

is measured and converted to IL-6 concentration, and the entire process is enclosed within the Symphony IL-6 Cartridge and is controlled

and measured by the Symphony Fluorescence Immuno-analyzer.

Overview of the Symphony IL-6 test principle.

The Symphony Test Cartridge

To perform a Symphony test,

the test operator adds three drops of blood to the Symphony Cartridge.

The volume does not have to be precise because the cartridge is

able to work with a range of 0.1 — 0.2 cc, which can be visualized with a fill-gauge on the Symphony Cartridge as shown in Figure

After scanning in the patient ID, the Symphony Cartridge is inserted into the Symphony and the test proceeds automatically.

Symphony Cartridges can be tested simultaneously, enabling up to six different patients or six different biomarkers to be tested at once

on a single machine.

In approximately 24 minutes, the measurement results are produced, and a clinical decision can be made.

The disposable cartridge contains

the reagents required to run the applicable test.

The three steps of the test (sample preparation, chemical reaction, and detection) are

performed in chambers present on the cartridge.

All waste is collected in a chamber in the cartridge significantly reducing the risk of

lab contamination that is often cited as a concern of molecular diagnostic testing.

After the test is completed and the result is obtained,

the cartridge is disposed of with the hospital’s other medical waste.

Photograph of the Symphony IL-6 Cartridge

loaded with a whole blood specimen.

To perform a Symphony test, the test operator

adds three drops of blood to the Symphony cartridge.

After scanning in the patient ID, the Symphony cartridge is inserted into the Symphony

analyzer and the test runs automatically.

Each analyzer can run up to six cartridges simultaneously, either with six different patient

samples or six different tests, in less than 20 minutes, providing quantitative measurements used for improved patient management and

clinical decision-making.

Manufacturing

We plan to manufacture both

our devices and cartridges through Contract Manufacturing Organizations (“CMOs”).

We have contracts with Toray to manufacture

our cartridges and Sanyoseiko to manufacture both our devices and cartridges.

Pursuant to our agreement with Toray, we are required to

use Toray to manufacture test cartridges for a period of three years.

We believe both companies are well-known and well-established global

manufacturing companies with capabilities to scale up, re-design and supply our devices and cartridges globally when needed.

we believe we will have the capability to supply globally, when required.

Both Toray and Sanyoseiko facilities are located in Japan.

We outsource our manufacturing

due to a number of factors;

● The cost of initiating and scaling in-house manufacturing is

capital intensive,

● It would take significant time to establish our own manufacturing

● It would take significant time to obtain necessary certifications

by regulatory authorities;

● There would be a significant personnel and maintenance costs

to maintain production in compliance with regulations.

In the first quarter of 2021,

we established Sanyoseiko as our large-scale contract manufacturing organization.

Toray will continue to develop, validate and manufacture

our current IL-6 cartridges and other cartridges in our product pipeline as our pilot-manufacturing partner.

We plan to manufacture both our devices and cartridges

through Contract Manufacturing Organizations (“CMOs”).

We have contracts with Toray Industries, Inc (“Toray”)

to manufacture our cartridges and Sanyoseiko Co.

Ltd (“Sanyoseiko”) to manufacture both our device and cartridges.

our partners are well-established global manufacturing companies with capabilities to scale up, re-design and supply our devices and cartridges.

Sanyoseiko had been selected as our CMO, though

in the near-term Toray will continue to develop, validate and manufacture our IL-6 cartridges as our pilot-manufacturing partner.

to meet the demands of our global market.

Both Toray’s and Sanyoseiko’s facilities are located in Japan.

We license the technology

for the Symphony cartridges from Toray.

Our license grants us exclusive global use with the exception of Japan.

Regulatory Strategy

We license the technology for

Symphony from Toray.

Our license grants us exclusive world-wide use with the exception of Japan.

Toray started developing the Symphony

(known as RAY-FAST in Japan) to complement one of its sepsis related products for blood purification during sepsis.

Development of RAY-FAST

begin in 2006.

For the past 3-4 years, RAY-FAST has been used successfully in Japan by selected clinical institutions for measurement

of IL-6 in rheumatoid arthritis to monitor disease progression for the purpose of clinical validation, efficacy, monitoring potential

adverse conditions reporting, robustness, durability and customer feedback on usability.

Our initial regulatory pathway is to label and distribute Symphony

as an Research Use Only, or RUO product in the U.S.

An RUO product is an in-vitro diagnostic device that is in the laboratory research

phase of development.

RUO devices are not authorized for use in clinical or diagnostic applications.

However, it is possible that certain

laboratories may choose to independently utilize the RUO Symphony as part of their own Laboratory Developed Test, or LDT.

type of in vitro diagnostic test that is designed, manufactured and used within a single laboratory.

In parallel, we are pursuing

510(k) clearance from FDA to use Symphony for in vitro diagnostic use.

Symphony IL-6

Our Symphony IL-6 product candidate

is intended for early and rapid identification of sepsis during Emergency Department (“ED”), critical care triage, and neutropenic

sepsis in oncology patients.

Our Symphony IL-6 product candidate is also intended for monitoring disease progression during such treatment

We are conducting a multi-center

clinical study at The University of Texas, Southwestern Medical Center (William P.

University Hospital (CUH) and Zale Lipshy

Pavilion Hospital) and Parkland Memorial Hospital under a single protocol.

Our clinical study will involve:

● A reference range study .

For the reference range study,

120 subjects will be enrolled to achieve at a minimum 100 qualified data points for the statistical analysis.

The reference range (2.5 th

to 97.5 th centile) will be estimated using parametric methods.

Parametric methods will be used to calculate the 95%

confidence intervals for the reference limits.

Nonparametric estimates of the reference limits with confidence intervals will be computed

as a sensitivity analysis.

● A cutoff value study .

For the cutoff value study, 96

subjects will be enrolled to achieve at a minimum 80 qualified data points for the statistical analysis.

For the cutoff value study,

the Receiver Operating Characteristic (“ROC”) curve will be estimated.

The ideal cutoff, which gives a point on the ROC curve

that is closest to the (0.1) point, will be selected based on the results from this study.

A cutoff validation study .

For the cutoff validation study, 48 patients will be enrolled into the study to achieve at a minimum 40 qualified data points.

Clinical sensitivity, clinical specificity, positive predictive value, negative predictive value, and corresponding 95% confidence intervals will be calculated using the cutoff value determined from the cutoff value study.

In parallel to these studies,

we intend to capture the necessary analytical data required for FDA submission.

These studies will be performed using patient samples

with natural IL-6 and will be performed in accordance with the Clinical & Laboratory Standards Institute (“CLSI”)

We plan to start clinical studies

at other clinical sites to support additional indications and possibly additional FDA premarket submissions.

In addition to ICUs, we plan

to add both adult and pediatric oncology patients.

We plan to perform blood collections by both venipuncture and capillary collection,

which includes both finger stick and heel stick, in our studies so we can support these indications for use.

Blood collection for pediatric

patients is often faced with many challenges due to their limited supply of blood and the difficulty of performing venipuncture collections.

We believe the small amount of blood needed for Symphony will be very attractive for pediatric healthcare.

Furthermore, we have planned

in our clinical studies to include finger stick and heel stick blood collection to further reduce the clinical burden of performing tests

in pediatric patients.

We submitted a pre-submission

application to the FDA presenting our study design and the data from our first set of studies.

We will use their feedback, if necessary,

to modify the ongoing studies and to construct the FDA clearance application.

We plan to submit our FDA clearance application at the end

of the third quarter of 2022.

The importance of IL-6 testing

has been further highlighted during the COVID-19 pandemic, and IL-6 concentrations in blood have been found to be heightened in patients

with COVID-19-associated systemic inflammation and hypoxic respiratory failure.

If clinical studies are successful, our Symphony IL-6

product candidate could also be used with confirmed COVID-19 illness to aid in determining the risk of intubation with mechanical ventilation,

in conjunction with clinical findings and the results of other laboratory testing.

In our ongoing clinical studies, we have performed

prospective Symphony IL-6 tests on the whole blood of 90 subjects admitted to either William P.

University Hospital, Zale

Lipshy Pavilion Hospital, or Parkland Memorial Hospital with confirmed COVID-19, confirmed by an FDA Emergency Use Authorization, or EUA

PCR SARS-CoV-2 test.

Once completed, we believe our planned study design can be used to apply for an EUA for use with confirmed COVID-19

illness to aid in determining the risk of intubation with mechanical ventilation, in conjunction with clinical findings and the results

of other laboratory testing.

There is no assurance that we will be successful in obtaining EUA for this indication.

Symphony hsTNT/I and NT-proBNP

We have two other product candidates

that are in development:

(i) hsTNT/I for myocardial injury or myocardial infarction (MI) and (ii) NT-proBNP for cardiac heart failure

These product candidates will follow a similar regulatory pathway as identified for our Symphony IL-6 product candidate

which we believe will result in obtaining 510(k) clearance for diagnostic use.

For the clinical trial, we

plan to have both retrospective samples and prospective subjects to power the study to have a statistically significant result.

For retrospectively

collected samples, we will utilize clinical information recorded during the original sample collection.

For prospectively collected samples,

clinical information will be collected initially during admission or ER triage, and will be considered as baseline samples.

Clinical information

will also be collected on discharge, shift or admission to ICU.

Our clinical plan also allows us to monitor ER or admitted patients during

their treatment regimen.

Our current regulatory strategy is designed to

support commercialization of Symphony in the United States pending authorization from the FDA.

The FDA has identified Symphony as a de

novo device, and we are subject to the de novo authorization regulatory pathway, which includes expansion of our clinical studies.

We have several clinical studies currently active, all designed to support our de novo FDA submission.

We have targeted large,

well-known medical and academic institutions for our studies, which should also help support initial commercialization and market penetration.

This clinical trial expansion could also support additional indications.

The expansion also could delay obtaining marketing authorization

for the product.

Sales and Marketing

Initially, we plan to have

four major sales territories;

Northeast, Northwest, Central (South central and North central) and West (North west and South west).

territories will be served and supported by territory sales managers and technical sales support managers.

A centralized sales and technical

support team will support the regional groups.

We intend to focus our initial sales efforts on the large institutions, hospitals, and

LTACs that operate multiple facilities and therefore might purchase multiple units.

This ‘Waterfall’ strategy, focusing on

sales within those institutions, may lower salesforce costs.

Our sales representatives will

typically have experience in molecular diagnostic testing and a network of customer contacts within their respective territories.

utilize our teams’ knowledge along with market research databases to target and qualify our customers.

We intend to execute a variety

of sales campaigns and strategies to meet the buying criteria of the different customer segments we intend to pursue.

In the United States, our sales

cycle will typically include customer evaluations, a decision to use our platform and then validation of our platform.

Upon successful

validation a hospital or reference lab may choose to become a customer.

The analyzer will be available to the customer by purchase or

third-party lease for their use with our diagnostic test.

The customer will buy our proprietary test cartridge from us and utilize one

disposable test cartridge each time they run a diagnostic test.

We have deployed the Symphony

and test cartridges in the United States in selected medical institutions and LTAC facilities for evaluation.

Our goal is to convert these

facilities into paying customers if we receive FDA authorization.

Our initial focus is on the

following types of customers:

Medical Institution and

Hospitals with Intensive Care Unit (ICUs) :

ICUs treat patients with severe or life-threatening illnesses and

injuries, which require constant care, close supervision from life support equipment and medication to ensure normal bodily functions.

ICUs are staffed by highly trained physicians, nurses and respiratory therapists who specialize in caring for critically ill patients.

ICUs are also distinguished from general hospital wards by a higher staff-to-patient ratio and access to advanced medical resources and

equipment that is not routinely available elsewhere.

The types of patients typically seen in ICUs are those with acute and advanced respiratory

distress syndrome, septic shock, and patients requiring support for an acute reversible failure of one or more organs.

Long-term Acute Care facilities

LTACs are facilities that specialize in the treatment of patients with serious medical conditions

that require care on an on-going basis but no longer require intensive care or extensive diagnostic procedures.

These patients are typically

discharged from the intensive care units and require more care than they can receive in a rehabilitation center, skilled nursing facility,

The types of patients typically seen in LTACs include those requiring prolonged ventilator use or weaning, ongoing dialysis

for chronic renal failure, intensive respiratory care, multiple IV medications or transfusions, and complex wound care/care for burns.

Outpatient Clinics:

clinic (or outpatient or ambulatory care clinic) is a health care facility that is primarily focused on the care of outpatients.

can be privately operated or publicly managed and funded.

They typically cover the primary care needs of populations in local communities.

Typical large outpatient clinics house general medical practitioners such as doctors and nurses to provide ambulatory care and some acute

care services including patient triage for sepsis and cardiac patients.

The types of patient care they perform include blood tests, triage

with chest pain complaints, triage with septic shock, biopsies, chemotherapy, colonoscopy, CT scan, mammograms, minor surgical procedures,

radiation treatments, ultrasound imaging and x-rays.

Until Symphony products are authorized by the FDA, we will focus our

sales and marketing efforts on brand awareness and market education to potential customers, emphasizing the value of monitoring a critical

care patient’s IL-6 levels to improve decision making and patient outcomes.

If cleared or approved by the FDA, we will target sales

to ERs and ICUs at United States hospitals, as well as to long-term acute care facilities.

We plan to establish a market presence by selling

Symphony devices and tests both directly and through various distribution channels to maximize sales volume and market penetration.

License Agreement

We have an exclusive license

with Toray for the entire world, excluding Japan, to use their patents and know-how related to Symphony and the detection cartridges for

the manufacturing, marketing and sale of the products (as defined in the agreement).

We also have a nonexclusive license for the same

purposes in Japan.

The term of this license agreement extends until the expiration of all the patents associated with the licensed patent

rights, which are between 2029 and 2036.

If we do not generate commercial sales within five years of the date of the license, Toray has

the right to terminate the agreement or make it non-exclusive.

In addition, we are required to make commercially reasonable efforts to

obtain market approval for the products in the United States and the European Union by October 2023.

Pursuant to the agreement, we are

required to use Toray to manufacture the sample cartridges.

The agreement terminates upon expiration of the last of the patents included

in the license.

In connection with entering

into the agreement, we paid Toray $240,000 in licensing fees.

We are required to pay a 15% royalty fee for the period that any underlying

patents exist or for 5 years after the first sale for the licensing of this technology based on a percentage of our “Net Sales”

of products using these technologies (as defined in the license agreement) with a minimum royalty of $60,000 for the initial year that

royalties are payable increasing to a minimum of $100,000 thereafter.

On October 6, 2020, we entered into a License

and Supply Agreement, as amended, (the “License Agreement”) with Toray, providing us with an exclusive global license with

Toray, excluding Japan, to use their patents and know-how related to the Symphony detection cartridges for the manufacturing, marketing

and sale of the products (as defined in the License Agreement).

We also have a nonexclusive license for the same purposes in Japan.

agreement terminates in 2029 upon expiration of the last of the patents included in the license.

In connection with entering into the License Agreement,

we are required to pay a 15% royalty fee for the period that any underlying patents exist or for five years after the first sale for the

licensed technology after obtaining regulatory approval based on a percentage of our “Net Sales” of products using these technologies

(as defined in the license Agreement) with a minimum royalty of $60,000 for the initial year that royalties are payable increasing to

a minimum of $100,000 thereafter.

Intellectual Property, Proprietary Technology

We do not currently hold any

patents directly.

We rely on a combination either directly or through our license agreement with Toray of patent, copyright, trade secret,

trademark, confidentiality agreements, and contractual protection to establish and protect our proprietary rights.

We have licensed U.S.

8,409,447 (“the ‘447 patent”) and 8,821,813 (“the ‘813 patent”).

The ‘447 patent

is valid through at least February 2029 and is generally directed to a separation chip and a method for separating an insoluble component

from a suspension with the separation chip.

The ‘813 patent is valid through at least March 2028 and is generally directed to a

liquid-feeding chip, a liquid feeding method and analysis method.

We have also licensed use or process patents covering the inventions

and/or subject matter of the ‘447 and ‘813 patents in various international territories including Japan, Canada, China, Europe

and South Korea, which are valid through at least February 2027.

These measures may not be adequate

to safeguard the technology underlying our products.

For example, employees, consultants and others who participate in the development

of our products may breach their agreements with us regarding our intellectual property, and we may not have adequate remedies for the

We also may not be able to effectively protect our intellectual property rights in some foreign countries, as many countries do

not offer the same level of legal protection for intellectual property as the United States.

Furthermore, for a variety of reasons, we

may decide not to file for patent, copyright or trademark protection outside of the United States.

Our trade secrets could become known

through other unforeseen means.

Notwithstanding our efforts to protect our intellectual property, our competitors may independently develop

similar or alternative technologies or products that are equal or superior to our technology.

Our competitors may also develop similar

products without infringing on any of our intellectual property rights or design around our proprietary technologies.

any efforts to enforce our proprietary rights could result in disputes and legal proceedings that could be costly and divert attention

from our business.

We could also be subject to third-party claims that we require additional licenses for our products, and such claims

could interfere with our business.

If our products infringe the intellectual property rights of others, we could face costly litigation,

which could cause us to pay substantial damages and limit our ability to sell some or all of our products.

Even if our products were determined

not to infringe the intellectual property rights of others, we could incur substantial costs in defending any such claims.

Our primary competition is

laboratory size equipment including the Roche Cobas ® , Siemens ADVIA Centaur ® and Beckman Coulter Access

Our competitors have substantially

greater financial, technical, research and other resources and larger, more established marketing, sales and distribution organizations

Our competitors also offer broader product lines and have greater brand recognition than we do.

Moreover, our existing and

new competitors may make rapid technological developments that may result in our technologies and products becoming obsolete before we

recover the expenses incurred to develop them or before they generate significant revenue.

We may encounter potential customers that,

due to existing relationships with our competitors, are committed to or prefer the products offered by these competitors.

no assurance that competitors, many of which have made substantial investments in competing technologies, will not prevent, limit or interfere

with our ability to make, use or sell our products either in the United States or in international markets.

We do not currently hold any patents directly.

We rely on a combination either directly or through the License Agreement with Toray of patent, copyright, trade secret, trademark, confidentiality

agreements, and contractual protection to establish and protect our proprietary rights.

Our primary competition in the IL-6 market is laboratory size equipment

including the Roche Cobas ® , Siemens ADVIA Centaur ® and Beckman Coulter Access 2 ® , which require

pre-processing of whole blood prior to performing their test.

We believe that our technology, which uses whole blood, provides us with

a substantial competitive advantage over our existing competition that will sustain through commercialization, despite the major life

science companies and consistent entry of innovative start-ups that define our competitive landscape.

Government Regulation

The design, development, manufacture,

testing and sale of our diagnostic products are subject to regulation by numerous governmental authorities, principally the FDA, and corresponding

state and foreign regulatory agencies.

FDA Regulation

Research Use Only Technologies

Symphony will initially be

commercialized as an RUO tool in the United States.

RUO products belong to a separate regulatory classification under a long-standing

The design, development, manufacture, testing

and sale of our products are subject to regulation by numerous governmental authorities, principally the FDA, and corresponding state

and foreign regulatory agencies.

FDA Regulation

From an FDA perspective, products that are intended for research use only and are labeled as RUO are not regulated by

the FDA as in vitro diagnostic devices and are therefore not subject to the regulatory requirements discussed below for

clinical diagnostic products.

Thus, RUO products may be used or distributed for research use without first obtaining FDA clearance, authorization

The products must bear the statement:

“For Research Use Only.

Not for Use in Diagnostic Procedures.” RUO products

cannot make any claims related to safety, effectiveness or diagnostic utility, and they cannot be intended by the manufacturer for human

clinical diagnostic use.

Accordingly, a product labeled RUO but intended or promoted for clinical diagnostic use may be viewed by the

FDA as false or misleading and thereby adulterated and misbranded products under the Federal Food, Drug, and Cosmetic Act (“FDCA”)

and subject to FDA enforcement action.

The FDA’s 2013 Guidance for Industry and Food and Drug Administration Staff on “Distribution

of In Vitro Diagnostic Products Labeled for Research Use Only or Investigational Use Only,” explains that the FDA will

consider the totality of the circumstances surrounding distribution and use of an RUO product, including how the product is marketed and

to whom, when determining its intended use.

Merely including a labeling statement that a product is intended for research use only will

not necessarily exempt the device from the FDA’s 510(k) clearance, premarket approval, or other requirements, if the circumstances

surrounding the distribution of the product indicate that the manufacturer intends its product to be used for clinical diagnostic use.

These circumstances may include written or verbal marketing claims or links to articles regarding a product’s performance in clinical

applications, a manufacturer’s provision of technical support for clinical validation or clinical applications, or solicitation

of business from clinical laboratories, all of which could be considered evidence of intended uses that conflict with RUO labeling.

the FDA disagrees with a company’s RUO status for its product, the company may be subject to FDA enforcement activities, including,

without limitation, removal of the product, or requiring the company to seek clearance, authorization or approval for the products.

Medical Devices

Generally, in vitro diagnostic

products we develop must be cleared by the FDA before they are marketed in the United States.

Before and after approval, authorization,

or clearance in the United States, our products are subject to extensive regulation by the FDA, as well as by other regulatory bodies.

FDA regulations govern, among other things, the development, testing, manufacturing, labeling, safety, storage, recordkeeping, market

clearance, authorization or approval, advertising and promotion, import and export, marketing and sales, and distribution of medical devices,

including in vitro diagnostic devices (“IVDs”).

IVDs are a type of medical device and include reagents and instruments

used in the diagnosis or detection of diseases, conditions or infections, including, without limitation, the presence of certain chemicals

or other biomarkers.

Generally, the products we develop must be cleared

by the FDA before they are marketed in the United States.

Before and after approval, authorization, or clearance in the United States,

our products are subject to extensive regulation by the FDA, as well as by other regulatory bodies.

FDA regulations govern, among other

things, the development, testing, manufacturing, labeling, safety, storage, recordkeeping, market clearance, authorization or approval,

advertising and promotion, import and export, marketing and sales, and distribution of medical devices, including IVDs.

IVDs are a type

of medical device and include reagents and instruments used in the diagnosis or detection of diseases, conditions or infections, including,

without limitation, the presence of certain chemicals or other biomarkers.

Predictive, prognostic and screening tests can also be IVDs.

In the United States, medical

devices are subject to varying degrees of regulatory control and are classified in one of three classes depending on the extent of controls

the FDA determines are necessary to reasonably ensure their safety and effectiveness:

general controls, such as labeling and adherence to

quality system regulations;

special controls, premarket notification (often referred

to as a 510(k)), specific controls such as performance standards, patient registries, post-market surveillance, additional controls such

In the United States, medical devices are subject

to varying degrees of regulatory control and are classified in one of three classes depending on the extent of controls the FDA determines

are necessary to reasonably ensure their safety and effectiveness:

general controls, such

as labeling and adherence to quality system regulations;

special controls and approval of a premarket approval

(“PMA”) application.

After a medical device is placed

on the market, numerous regulatory requirements apply.

These include:

● compliance with the FDA’s QSR, which requires manufacturers

to follow stringent design, testing, control, documentation, record maintenance, including maintenance of complaint and related investigation

files, and other quality assurance controls during the manufacturing process;

● labeling regulations, which prohibit the promotion of products

for uncleared, or unapproved uses, or “off-label” uses, and impose other restrictions on labeling;

● obligations to investigate and report to the FDA adverse events,

including deaths, or serious injuries that may have been or were caused by a medical device and malfunctions in the device that would

likely cause or contribute to a death or serious injury if it were to recur.

Failure to comply with applicable

regulatory requirements can result in enforcement action by the FDA, which may include sanctions, including but not limited to, warning

fines, injunctions, and civil penalties;

recall or seizure of the device;

operating restrictions, partial suspension or total

shutdown of production;

refusal to grant 510(k) clearance, de novo authorization, or approval of a PMA application for new devices;

withdrawal of clearance, authorization, or approval;

and civil or criminal prosecution.

Premarket Authorization and Notification

While most Class I and some

Class II devices can be marketed without prior FDA authorization, most medical devices can be legally sold within the U.S.

(i) approved a PMA application prior to marketing, generally applicable to Class III devices;

or (ii) cleared the device in response

to a premarket notification, or 510(k) submission, generally applicable to Class II and some Class I devices.

Some devices that have been

classified as Class III are regulated pursuant to the 510(k) requirements because FDA has not yet called for PMAs for these devices.

less common regulatory pathways to market medical devices include Emergency Use Authorization or the EUA process which is only available

during public health emergencies, humanitarian device exception (“HDE”) or a product development protocol (“PDP”).

510(k) Notification

Product development in the

for most Class II and limited Class I devices typically follows a 510(k) pathway.

To obtain 510(k) clearance, a manufacturer must

submit a premarket notification demonstrating that the proposed device is substantially equivalent to a legally marketed device, referred

to as the predicate device.

A predicate device may be a previously 510(k) cleared device or a device that was in commercial distribution

before May 28, 1976 for which the FDA has not yet called for submission of PMA applications.

The manufacturer must show that the proposed

device has the same intended use as the predicate device, and it either has the same technological characteristics, or it is shown to

be equally safe and effective and does not raise different questions of safety and effectiveness as compared to the predicate device.

There are three types of 510(k)s:

special, for devices that are modified and the modification needs a new 510(k) but the modification does not affect the intended

use or alter the fundamental scientific technology of the device;

and abbreviated, for devices that conform to a recognized standard.

The special and abbreviated 510(k)s are intended to streamline review.

The FDA intends to process special 510(k)s within 30 FDA days of

receipt, and abbreviated 510(k)s within 90 FDA days of receipt.

The clearance pathway for traditional 510(k)s can, however, take from

four to 12 months, or even longer if FDA has questions during the review.

After a device receives 510(k)

clearance, any modification that could significantly affect its safety or effectiveness, or that would constitute a major change in its

intended use, requires a new 510(k) clearance or could require a de novo authorization approval of a PMA application.

The FDA requires

each manufacturer to make this determination in the first instance, but the FDA can review any such decision.

If the FDA disagrees with

a manufacturer’s decision not to seek a new 510(k) clearance, the agency may retroactively require the manufacturer to seek 510(k)

clearance, de novo authorization, or PMA approval.

The FDA also can require the manufacturer to cease marketing and/or recall the

modified device until 510(k) clearance, de novo authorization, or PMA approval is obtained.

During the review of a 510(k)

submission, the FDA may request more information or additional studies and may decide the indications for which we seek clearance should

In addition, laws and regulations and the interpretation of those laws and regulations by the FDA may change in the future.

We cannot foresee what effect, if any, such changes may have on us.

special controls,

premarket notification (often referred to as a 510(k)), specific controls such as performance standards, patient registries, post-market

surveillance, additional controls such as labeling and adherence to quality system regulations;

special controls

and requires a premarket approval (“PMA”).

FDA Premarket Clearance and Approval Requirements

Unless an exemption applies, each medical device

commercially distributed in the United States requires either FDA clearance of a 510(k) premarket notification, approval of a de novo

application, or approval of a premarket approval (PMA).

While most Class I devices are exempt from the 510(k) premarket

notification requirement, manufacturers of most Class II devices are required to submit to the FDA a premarket notification under

Section 510(k) of the FDCA requesting permission to commercially distribute the device.

The FDA’s permission to commercially

distribute a device subject to a 510(k) premarket notification is generally known as 510(k) clearance.

Devices deemed by the FDA to pose

the greatest risks, such as life sustaining, life supporting or some implantable devices, or devices that have a new intended use, or

use advanced technology that is not substantially equivalent to that of a legally marketed device, are placed in Class III, requiring

approval of a PMA.

Some pre-amendment devices are unclassified, but are subject to FDA’s premarket notification and clearance process

in order to be commercially distributed.

Our initial product is a Class II device subject to 510(k) clearance.

510(k) Clearance Marketing Pathway

To obtain 510(k) clearance, a company must submit

to the FDA a premarket notification submission demonstrating that the proposed device is “substantially equivalent” to a predicate

device already on the market.

A predicate device is a legally marketed device that is not subject to PMA, i.e., a device that was legally

marketed prior to May 28, 1976 (pre-amendments device) and for which a PMA is not required, a device that has been reclassified from

Class III to Class II or I, or a device that was found substantially equivalent through the 510(k) process.

510(k) clearance process usually takes from three to twelve months, but often takes longer.

The FDA may require additional information,

including clinical data, to make a determination regarding substantial equivalence.

In addition, the FDA collects user fees for certain

medical device submissions and annual fees for medical device establishments.

After a device receives 510(k) marketing clearance,

any modification that could significantly affect its safety or effectiveness, or that would constitute a major change or modification

in its intended use, will require a new 510(k) clearance or, depending on the modification, PMA approval.

The FDA requires each manufacturer

to determine whether the proposed change requires submission of a 510(k) or a PMA in the first instance, but the FDA can review any such

decision and disagree with a manufacturer’s determination.

If the FDA disagrees with a manufacturer’s determination, the FDA

can require the manufacturer to cease marketing and/or request the recall of the modified device until 510(k) marketing clearance or PMA

approval is obtained.

Also, in these circumstances, the manufacturer may be subject to significant regulatory fines or penalties.

De Novo Classification

Devices of a new type that

FDA has not previously classified based on risk are automatically classified into Class III by operation of section 513(f)(1) of the FDCA,

regardless of the level of risk they pose.

To avoid requiring PMA review of low- to moderate-risk devices classified in Class III by operation

of law, Congress enacted section 513(f)(2) of the FDCA.

This provision allows FDA to classify a low- to moderate-risk device not previously

classified into Class I or II.

After de novo authorization, an authorized device may be used as a predicate for future devices

going through the 510(k) process.

PMA Application

A product not eligible for

510(k) clearance or de novo authorization must follow the PMA approval pathway, which requires proof of the safety and effectiveness of

the device to the FDA’s satisfaction.

Results from adequate and well-controlled

clinical trials are required to establish the safety and effectiveness of a Class III PMA device for each indication for which FDA approval

After completion of the required clinical testing, a PMA including the results of all preclinical, clinical, and other testing,

and information relating to the product’s marketing history, design, labeling, manufacture, and controls, is prepared and submitted

The PMA approval process is

generally more expensive, rigorous, lengthy, and uncertain than the 510(k) premarket notification process and requires proof of the safety

and effectiveness of the device to the FDA’s satisfaction.

As part of the PMA review, the FDA will typically inspect the manufacturer’s

facilities for compliance with the QSR requirements, which impose elaborate testing, control, documentation and other quality assurance

The FDA’s review of a PMA application typically takes one to three years, but may last longer.

If the FDA’s evaluation

of the PMA application is favorable, the FDA will issue a PMA for the approved indications, which can be more limited than those originally

sought by the manufacturer.

The PMA can include post-approval conditions that the FDA believes necessary to ensure the safety and effectiveness

of the device including, among other things, restrictions on labeling, promotion, sale and distribution.

Failure to comply with the conditions

of approval can result in material adverse enforcement action, including the loss or withdrawal of the approval and/or placement of restrictions

on the sale of the device until the conditions are satisfied.

Even after approval of a PMA,

a new PMA or PMA supplement is required in the event of a modification to the device, its labeling or its manufacturing process.

to a PMA often require the submission of the same type of information required for an original PMA, except that the supplement is generally

limited to that information needed to support the proposed change from the product covered by the original PMA.

The program for authorizations

of products through an Emergency Use Authorization (“EUA”) is established when the Secretary of Health and Human Services

declares a public health emergency.

This process remains in effect only as long the declared public health emergency is in effect.

EUA authorization is granted by FDA using similar analytical and clinical validation metrics similar to what may be required for 510(k),

PMA or de novo authorizations but are based on a reduced amount of data.

The process to obtain an EUA typically consists of two phases,

an initial Pre-EUA submission that is used to identify and resolve any significant problems that would preclude issuance of an EUA and

a final EUA submission.

The final EUA submission addresses the details that the FDA will require to demonstrate that the Symphony IL-6

test will have acceptable analytical and clinical performance.

FDA has granted EUA for the Roche Elecsys IL-6 test, the Siemens ADVIA

Centaur IL-6 test and the Beckman Coulter Access IL-6 test.

FDA publishes summaries of the testing performed to support these EUAs, which

will serve as guidance as we prepare our EUA.

There are no required timelines for review and authorization of an EUA.

Moreover, FDA has

prioritized those IVD EUA that the agency will review to include molecular and antigen tests that may be used at the POC or completely

the manufacturer has the capacity to scale up to a production of >500,00 tests per week within 3 months of authorization;

or tests that are from or supported by US government stakeholder, e.g.

BARDA or NIH’s RADx program.

For serology tests, FDA intends to

focus on quantitative and neutralizing antibody tests.

There is no guarantee that the Symphony IL-6 assay will be a priority for FDA

Clinical Trials of Medical Devices

Clinical trials are almost

always required to support a PMA, are often required for a de novo authorization, and are sometimes required for 510(k) clearance.

trials may also be conducted or continued to satisfy post-approval requirements for devices with PMAs.

Clinical studies of unapproved

or uncleared medical devices or devices being studied for uses for which they are not approved or cleared (investigational devices) must

be conducted in compliance with FDA requirements.

If an investigational device could pose a significant risk to patients, the sponsor

company must submit an Investigational Device Exemption (“IDE”) application to the FDA prior to initiation of the clinical

An IDE application must be supported by appropriate data, such as animal and laboratory test results, showing it is safe to test

the device on humans and the testing protocol is scientifically sound.

The IDE will automatically become effective 30 days after receipt

by the FDA unless the FDA notifies the company the investigation may not begin.

Clinical studies of investigational devices may not begin

until an institutional review board (“IRB”) has approved the study.

During any study, the sponsor

must comply with the applicable portions of FDA’s IDE requirements.

These requirements include investigator selection, trial monitoring,

adverse event reporting, and record keeping.

The investigators must obtain patient informed consent, rigorously follow the investigational

plan and study protocol, control the disposition of investigational devices, and comply with reporting and record keeping requirements.

A nonsignificant risk device

does not require FDA approval of an IDE;

however, the clinical trial must still be conducted in compliance with various requirements of

FDA’s IDE regulations and be approved by an IRB at the clinical trials sites.

We, the FDA, or the IRB at each institution at which

a clinical trial is being conducted may suspend a clinical trial at any time for various reasons, including a belief the subjects are

being exposed to an unacceptable risk.

During the approval, authorization, or clearance process, the FDA may inspect the records relating

to the conduct of one or more investigational sites participating in the study supporting the application.

Even if a trial is completed,

the results of clinical testing may not demonstrate the safety and effectiveness of the device, may be equivocal or may otherwise not

be sufficient to obtain approval, authorization, or clearance of the product.

Sponsors of applicable clinical

trials of devices are required to register with www.clinicaltrials.gov , a public database of clinical trial information.

related to the device, patient population, phase of investigation, study sites and investigators and other aspects of the clinical trial

is made public as part of the registration.

Although the QSR does not fully

apply to investigational devices, the requirement for controls on design and development does apply.

The sponsor also must manufacture

the investigational device in conformity with the quality controls described in the IDE application and any conditions of IDE approval

that the FDA may impose with respect to manufacturing.

Post-Approval Regulation of Medical Devices

After a device is cleared,

authorized, or approved for marketing, numerous and pervasive regulatory requirements continue to apply.

Devices of a new type that FDA has not previously

classified based on risk are automatically classified into Class III by operation of section 513(f)(1) of the FDCA, regardless of the

level of risk they pose.

To avoid requiring PMA review of low- to moderate-risk devices classified in Class III by operation of law, Congress

enacted section 513(f)(2) of the FDCA.

This provision allows FDA to classify a low- to moderate-risk device not previously classified

into Class I or II.

After de novo authorization, an authorized device may be used as a predicate for future devices going through the

510(k) process.

The FDA has classified Symphony as de novo, a

device of a new type that the FDA has not previously classified.

Once obtained, a de novo authorization may lead to Symphony’s use

as a predicate for future devices going through the 510(k) process.

Clinical Trials

Clinical trials are often required for a de novo

authorization.

All clinical investigations of devices to determine safety and effectiveness must be conducted in accordance with the FDA’s

IDE regulations which govern investigational device labeling, prohibit promotion of the investigational device, and specify an array of

recordkeeping, reporting and monitoring responsibilities of study sponsors and study investigators.

If the device presents a “significant

risk,” to human health, as defined by the FDA, the FDA requires the device sponsor to submit an IDE application to the FDA, which

must become effective prior to commencing human clinical trials.

A significant risk device is one that presents a potential for serious

risk to the health, safety or welfare of a patient and either is implanted, used in supporting or sustaining human life, substantially

important in diagnosing, curing, mitigating or treating disease or otherwise preventing impairment of human health, or otherwise presents

a potential for serious risk to a subject.

An IDE application must be supported by appropriate data, such as animal and laboratory test

results, showing that it is safe to test the device in humans and that the testing protocol is scientifically sound.

The IDE will automatically

become effective 30 days after receipt by the FDA unless the FDA notifies the company that the investigation may not begin.

determines that there are deficiencies or other concerns with an IDE for which it requires modification, the FDA may permit a clinical

trial to proceed under a conditional approval.

In addition, the study must be approved by, and

conducted under the oversight of, an Institutional Review Board (IRB) for each clinical site.

The IRB is responsible for the initial and

continuing review of the IDE study and may pose additional requirements for the conduct of the study.

If an IDE application is approved

by the FDA and one or more IRBs, human clinical trials may begin at a specific number of investigational sites with a specific number

of patients, as approved by the FDA.

If the device presents a non-significant risk to the patient, a sponsor may begin the clinical trial

after obtaining approval for the trial by one or more IRBs without separate approval from the FDA, but must still follow abbreviated IDE

requirements, such as monitoring the investigation, ensuring that the investigators obtain informed consent, and labeling and record-keeping

requirements.

Acceptance of an IDE application for review does not guarantee that the FDA will allow the IDE to become effective and,

if it does become effective, the FDA may or may not determine that the data derived from the trials support the safety and effectiveness

of the device or warrant the continuation of clinical trials.

An IDE supplement must be submitted to, and approved by, the FDA before

a sponsor or investigator may make a change to the investigational plan that may affect its scientific soundness, study plan or the rights,

safety or welfare of human subjects.

During a study, the sponsor is required to comply

with the applicable FDA requirements, including, for example, trial monitoring, selecting clinical investigators and providing them with

the investigational plan, ensuring IRB review, adverse event reporting, record keeping and prohibitions on the promotion of investigational

devices or on making safety or effectiveness claims for them.

The clinical investigators in the clinical study are also subject to FDA

regulations and must obtain patient informed consent, rigorously follow the investigational plan and study protocol, control the disposition

of the investigational device, and comply with all reporting and recordkeeping requirements.

Additionally, after a trial begins, we, the

FDA or the IRB could suspend or terminate a clinical trial at any time for various reasons, including a belief that the risks to study

subjects outweigh the anticipated benefits.

Sponsors of applicable clinical trials of devices

also are required to register with www.clinicaltrials.gov, a public database of clinical trial information.

Information related to

the device, patient population, phase of investigation, study sites and investigators and other aspects of the clinical trial is made

public as part of the registration.

Although the QSR does not fully apply to investigational devices, the requirement for controls on

design and development does apply.

Post-market Regulation

After a device is cleared or approved for marketing, numerous and pervasive

regulatory requirements continue to apply.

These include:

● the FDA QSR, which applies to manufacturers, developers, and

contract manufacturers, and governs, among other things, how manufacturers design, test manufacture, exercise quality control over, and

document manufacturing of their products;

● establishment registration and device listing

● corrections and removal reporting regulations, which require

that manufactures report to FDA field corrections or removals if undertaken to reduce a risk to health posed by a device or to remedy

a violation of the FDCA that may present a risk to health;

● labeling and claims regulations, which prohibit the promotion

of products for unapproved or “off-label” uses and impose other restrictions on labeling;

● the Medical Device Reporting regulation, which requires reporting

to the FDA of certain adverse experience associated with use of the product.

We will continue to be subject

to inspection by the FDA to determine our compliance with regulatory requirements.

If the FDA finds a violation, it can institute a wide

variety of enforcement actions, ranging from a public warning letter to more severe sanctions such as:

● fines, injunctions, and civil penalties;

● recall or seizure of products;

● operating restrictions, partial suspension or total shutdown

of production;

● refusing requests for 510(k) clearance or PMA approval of new

● withdrawing 510(k) clearance or PMA approvals already granted;

● criminal prosecution.

QSR Requirements

Manufacturers of medical devices

are required to comply with FDA quality system requirements set forth the QSR.

The QSR requires, among other things, establishment of

a quality system and processes for design and development and manufacturing controls as well as the corresponding maintenance of records

and documentation.

Certain adverse events and malfunctions with the product must be reported to the FDA and could result in the imposition

of marketing restrictions through labeling changes or in product withdrawal.

Product approvals, authorizations, or clearances may be withdrawn

if compliance with regulatory requirements is not maintained or if problems concerning safety or effectiveness of the product occurs following

the approval, authorization, or clearance.

We will use contract manufacturers to manufacture our products for the foreseeable future.

We will, therefore, be dependent on their compliance with these requirements to market our products.

We work closely with our contract

manufacturers to assure our products are in strict compliance with these regulations.

Export Regulations

Medical devices that are legally

marketed in the United States may be exported anywhere in the world without prior FDA notification or approval.

Devices that have not

been approved or cleared in the United States must follow the export provisions of the FDCA.

Depending on which section of the FDCA we

may export under, we may need to request an export permit letter or export certificate, or we may need to submit a simple notification.

Export certificates may be requested by foreign customers or foreign governments to provide proof of the products’ status as regulated

The export certificate is prepared by FDA and contains information about a product’s regulatory or marketing status

in the United States.

Clinical Laboratory Improvement Amendments

The use of our products is

also affected by the Clinical Laboratory Improvement Amendments of 1988 (“CLIA”) and related federal and state regulations,

which provide for regulation of laboratory testing.

Any customers using our products for clinical use in the United States will be regulated

under CLIA, which establishes quality standards for all laboratory testing to ensure the accuracy, reliability and timeliness of patient

test results regardless of where the test was performed.

In particular, these regulations mandate that clinical laboratories must be certified

by the federal government or a federally approved accreditation agency, or must be located in a state that has been deemed exempt from

CLIA requirements because the state has in effect laws that provide for requirements equal to or more stringent than CLIA requirements.

Moreover, these laboratories must meet quality assurance, quality control and personnel standards, and they must undergo proficiency testing

and inspections.

The CLIA standards applicable to clinical laboratories are based on the complexity of the method of testing performed

by the laboratory, which range from “waived” to “moderate complexity” to “high complexity.”

Laboratory-developed tests.

The FDA considers LDTs to be

tests that are designed, developed, validated and used within a single laboratory.

The FDA historically has taken the position that it

has the authority to regulate such tests as medical devices under the FDC Act but has for the most part exercised enforcement discretion

and has not required clearance, authorization, or approval of LDTs prior to marketing.

Rather, in place of premarket clearance or approval

and other medical device general and special controls, the agency has relied on the certification of the laboratory under CLIA to ensure

the quality and validity of the tests.

Under present FDA enforcement

discretion, most LDTs currently do not require premarket clearance or approval.

Instead, LDTs are generally subject to CLIA regulations, provided that:

the tests must be developed and validated by a laboratory certified by CLIA as capable of performing high

complexity tests;

the developed LDT may be requested only on the order of a physician or other licensed health care provider;

the technological characteristics of the LDT are not so complex or potentially misunderstood by users

such that the technology alone creates a significant health risk to patients;

the LDT is not marketed directly to consumers;

the LDT does not present a specific patient or population risk

such that FDA determines that enforcement discretion is not warranted or appropriate.

Foreign Government Regulation

We intend to market our products

in European and other select international markets.

The regulatory pre-market requirements for molecular devices vary from country to

Some countries impose product standards, packaging requirements, labeling requirements and import restrictions on devices.

country has its own tariff regulations, duties and tax requirements.

Failure to comply with applicable foreign regulatory requirements

may subject us to fines, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions

and criminal prosecution.

For products sold in the European Economic Area, we have self-declared a Declaration of Conformity under the

relevant sections of the applicable European Community standards and other normative documents.

Fraud and Abuse Regulations

We are subject to numerous

federal and state health care anti-fraud laws, including the federal anti-kickback statute and False Claims Act that are intended to reduce

waste, fraud and abuse in the health care industry.

These laws are broad and subject to evolving interpretations.

They prohibit many arrangements

and practices that are lawful in industries other than health care, including certain payments for consulting and other personal services,

some discounting arrangements, the provision of gifts and business courtesies, the furnishing of free supplies and services, and waivers

In addition, many states have enacted or are considering laws that limit arrangements between medical device manufacturers

and physicians and other health care providers and require significant public disclosure concerning permitted arrangements.

are vigorously enforced against medical device manufacturers and have resulted in manufacturers paying significant fines and penalties

and being subject to stringent corrective action plans and reporting obligations.

If we are ever accused of violating them, we could be

forced to expend significant resources on investigation, remediation and monetary penalties.

Patient Protection and Affordable Care Act

Our operations will be affected

by the federal Patient Protection and Affordable Care Act of 2010, as modified by the Health Care and Education Reconciliation Act of

2010, which we refer to as the Health Care Act.

Among other things, the Health Care Act requires manufacturers to report to HHS detailed

information about financial arrangements with physicians, teaching hospitals and certain other categories of health care providers.

reporting provisions preempt state laws that require reporting of the same information, but not those that require reports of different

or additional information.

Failure to comply subjects the manufacturer to significant civil monetary penalties.

Health Insurance Coverage and Reimbursement

Our ability to successfully

commercialize our product candidates will depend in part on the extent to which governmental authorities, private health insurers and

other third-party payors provide coverage for and establish adequate reimbursement levels for our product candidates.

In the United States, third-party

payors continue to implement initiatives that restrict the use of certain technologies to those that meet certain clinical evidentiary

● establishment

registration and device listing with the FDA;

requirements, which require manufacturers, including third-party manufacturers, to follow

stringent design, testing, control, documentation and other quality assurance procedures

during all aspects of the design and manufacturing process;

regulations and FDA prohibitions against the promotion of investigational products, or the

promotion of ‘‘off-label’’ uses of cleared or approved products;

● requirements

In addition to uncertainties surrounding coverage policies, there are periodic changes to reimbursement.

Third-party payors

regularly update reimbursement amounts and also from time to time revise the methodologies used to determine reimbursement amounts.

includes annual updates to payments to physicians, hospitals and ambulatory surgery centers for procedures during which our products are

As of December 31, 2021, we

have nine full-time employees.

We also contract with several consultants and contractors performing public relations, investor relations,

and accounting functions.

related to promotional activities;

or approval of product modifications to 510(k)-cleared devices that could significantly affect

safety or effectiveness or that would constitute a major change in intended use of one of

our cleared devices, or approval of certain modifications to PMA-approved devices;

device reporting regulations, which require that a manufacturer report to the FDA if a device

it markets may have caused or contributed to a death or serious injury, or has malfunctioned

and the device or a similar device that it markets would be likely to cause or contribute

to a death or serious injury, if the malfunction were to recur;

● correction,

removal and recall reporting regulations, which require that manufacturers report to the

FDA field corrections and product recalls or removals if undertaken to reduce a risk to health

posed by the device or to remedy a violation of the FDCA that may present a risk to health;

FDA’s recall authority, whereby the agency can order device manufacturers to recall

from the market a product that is in violation of governing laws and regulations;

● post-market

surveillance activities and regulations, which apply when deemed by the FDA to be necessary

to protect the public health or to provide additional safety and effectiveness data

for the device.

Once we have a commercialized product, our manufacturing

processes will be required to comply with the applicable portions of the QSR, which cover the methods and the facilities and controls

for the design, manufacture, testing, production, processes, controls, quality assurance, labeling, packaging, distribution, installation

and servicing of finished devices intended for human use.

The QSR also requires, among other things, maintenance of a device master file,

device history file, and complaint files.

As a manufacturer, we are subject to periodic scheduled or unscheduled inspections by the FDA.

Our failure to maintain compliance with the QSR requirements could result in the shut-down of, or restrictions on, our manufacturing operations

and the recall or seizure of our products, which would have a material adverse effect on our business.

The discovery of previously unknown

problems with any of our products, including unanticipated adverse events or adverse events of increasing severity or frequency, whether

resulting from the use of the device within the scope of its clearance or off-label by a physician in the practice of medicine, could

result in restrictions on the device, including the removal of the product from the market or voluntary or mandatory device recalls.

The FDA has broad regulatory compliance and enforcement

If the FDA determines that we failed to comply with applicable regulatory requirements, it can take a variety of compliance or

enforcement actions, which may result in any of the following sanctions:

letters, warning letters, fines, injunctions, consent decrees and civil penalties;

● unanticipated

expenditures to address or defend such actions;

notifications or repair, replacement, refunds, recall, detention or seizure of our products;

restrictions, partial suspension or total shutdown of production;

or delaying our requests for regulatory approvals or clearances of new products or modified

● withdrawing

a PMA that has already been granted;

to grant export approval for our products;

As of December 31, 2022, we have sixteen full-time

We also contract with several consultants and contractors performing regulatory advisory, investor relations and manufacturing

scale-up support.

None of our employees are represented by labor unions or covered by collective bargaining agreements.

Available Information

Our principal executive offices

are located at 360 Massachusetts Avenue, Suite 203, Acton, MA 01720 and our telephone number is (844) 327-7078.

Our website address is

www.bluejaydx.com.

We make available free of charge through the Investors Relations section of our website our Annual Reports on Form

10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports as soon as reasonably practicable

after such material is electronically filed with or furnished to the U.S.

Securities and Exchange Commission.

We include our website address

in this report only as an inactive textual reference and do not intend it to be an active link to our website.

The contents of our website

are not incorporated into this report.

principal executive offices are located at 360 Massachusetts Avenue, Suite 203, Acton, MA 01720 and our telephone number is (844) 327-7078.

Our website address is www.bluejaydx.com.

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K

and all amendments to those reports, proxy statements and other information about us are made available, free of charge, through the Securities

and Exchange Commission (“SEC”) Filings section of our website at www.ir.bluejaydx.com/financial-information/sec-filings and

at the SEC’s website at www.sec.gov as soon as reasonably practicable

after such material is electronically filed with or furnished to the SEC.

We include our website address in this report only as an inactive

textual reference and do not intend it to be an active link to our website.

The contents of our website are not incorporated into this

In addition, our Board of Directors has adopted

a written Code of Business Conduct and Ethics applicable to all officers, directors and employees, which is available through the “Governance

Overview” section of our website at www.ir.bluejaydx.com/corporate-governance/governance-overview.

We intend to satisfy the disclosure

requirement under Item 5.05 of Form 8-K regarding amendment to, or waiver from, a provision of the Code of Business Conduct and Ethics

and by posting such information on the website address and location specified above.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business