What changed in this filing

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Item 9A. Controls and Procedures

2025-03-31 compared with 2024-03-28 · 836 added, 836 removed, 256 unchanged (87% of the section changed)

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our President and Chief Executive Officer,

who is our principal executive officer, and our Interim Chief Financial Officer, who is our principal financial officer, evaluated

the effectiveness of our disclosure controls and procedures as of December 31, 2023.

of Disclosure Controls and Procedures

Our President and Chief Executive Officer, who

serves as our principal executive officer and our principal financial and accounting officer, has conducted an evaluation of the effectiveness

of the design and operation of our disclosure controls and procedures as of December 31, 2024.

The term “disclosure controls and

procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a

company that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the

Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and

procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company

that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act

is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Disclosure controls and procedures include, without

limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or

submit under the Exchange Act is accumulated and communicated to our management, including our President and Chief Executive Officer and our Interim

Chief Financial Officer, to allow timely decisions regarding required disclosure.

Based on this evaluation, our President and Chief Executive Officer

and our Interim Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2023.

Management’s Annual Report on Internal Control Over Financial

submit under the Exchange Act is accumulated and communicated to our management, including our President and Chief Executive Officer,

to allow timely decisions regarding required disclosure.

Based on this evaluation, our President and Chief Executive Officer concluded

that our disclosure controls and procedures were not effective as of December 31, 2024.

Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing

and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange

Our President and Chief Executive Officer and our Interim Chief Financial Officer assessed the effectiveness of our internal control over financial

reporting as of December 31, 2023.

In making this assessment, our President and Chief Executive Officer and our Interim Chief Financial Officer

used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO, in Internal Control—Integrated

Based on that assessment and using the COSO criteria, our President and Chief Executive Officer and our Interim Chief Financial Officer have

concluded that, as of December 31, 2023, our internal control over financial reporting was effective.

Our independent registered public accounting firm

will not be required to formally attest to the effectiveness of our internal controls over financial reporting for as long as we are an

“emerging growth company” pursuant to the provisions of the Jumpstart Our Business Startups Act.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control

over financial reporting during the most recent fiscal quarter, that has materially affected, or is reasonably likely to materially affect,

our internal control over financial reporting.

Inherent Limitations of Controls

Management does not expect that our disclosure

controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud.

procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management

necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Because of the inherent

limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of

fraud, if any, within the Company have been detected.

These inherent limitations include the realities that judgments in decision-making

can be faulty, and that breakdowns can occur because of a simple error or mistake.

Additionally, controls can be circumvented by the individual

acts of some persons, by collusion of two or more people, or by management override of the controls.

The design of any system of controls

also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will

succeed in achieving its stated goals under all potential future conditions.

Over time, controls may become inadequate because of changes

in conditions, or deterioration in the degree of compliance with the policies or procedures.

Because of the inherent limitations in a

cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Our President and Chief Executive Officer, who serves as our principal executive officer and our principal financial and accounting

officer, has conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2024.

In making this assessment, our President and Chief Executive Officer used the criteria set forth by the Committee of Sponsoring Organizations

of the Treadway Commission, or COSO, in Internal Control—Integrated Framework.

Based on that assessment and using the COSO criteria,

our President and Chief Executive Officer have concluded that, as a result of a material weakness in internal control over financial reporting

arising from a lack of sufficient internal accounting expertise at the Company, our internal control over financial reporting was not

effective as of December 31, 2024.

The foregoing determination was made in connection

with the preparation and finalization of this Form 10-K.

In connection therewith, our independent registered public accounting firm identified

an issue with respect to the Company’s application of provisions of the Accounting Standards Codification of the FASB related to

the accounting and valuation of certain warrants.

In particular, in June 2024, the Company issued Class C and Class D warrants that contained

“reset” features that caused the exercise prices and number of shares of Company common stock issuable upon exercise of such

warrants to increase following stockholder approval of such warrants in August 2024 and changes in the market price of our common stock

that were measured in the period that immediately followed.

Under applicable accounting guidance, upon reset, the Company should have

recorded in its consolidated statement of operations the “deemed dividend on warrant modification” and “net loss applicable

to common stockholders,” in each case, below the presentation of net loss.

In addition, these non-book entry line items were not

included in the Company’s consolidated statement of operations for the three and nine months ended September 30, 2024 in the Company’s

Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2024.

Notwithstanding the material weaknesses, management

has concluded that the financial statements included elsewhere in this Form 10-K present fairly, in all material respects, our financial

position, results of operations, and cash flows in conformity with GAAP.

In addition, the Company intends to include an “out-of-period

adjustment” in its upcoming Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2025 to provide these additional

non-book entry line item amounts for the three and nine months ended September 30, 2024.

independent registered public accounting firm will not be required to formally attest to the effectiveness of our internal controls over

financial reporting for as long as we are an “emerging growth company” pursuant to the provisions of the Jumpstart Our Business

Startups Act.

Plan to Remediate Material Weakness

As noted above, our President and Chief Executive

Officer currently serves as our principal executive officer, and our principal financial and accounting officer, and has done so since

we separated with our prior Chief Financial Officer in October 2023 and our prior Interim Chief Financial Officer in March 2024.

Our President

and Chief Financial Officer, who is not a certified public accountant and does not have a prior background in public accounting, works

with external and internal consultants in preparing and reviewing the Company’s consolidated financial statements.

As a result of

the material weakness determination that occurred in connection with the preparation of this Form 10-K, we plan to enhance our processes

by designing and implementing controls to review the results of valuations and estimates, including the completeness and accuracy of relevant

data elements included in the valuation or estimate.

We also plan, subject to the availability of sufficient financial resources in the

future, to engage additional qualified resources and/or hire additional staff to ensure these incremental controls are properly implemented

and to ensure proper segregation of duties around the review of manual journal entries.

Management is currently evaluating steps to remediate

the material weaknesses, including enhanced processes to identify and appropriately apply applicable accounting requirements to better

evaluate and understand the nuances of the complex accounting standards that apply to our consolidated financial statements.

This includes

providing enhanced access to accounting literature, research materials, and documents, and increasing communication among our personnel

and third-party professionals with whom we consult regarding complex accounting applications.

When fully implemented and operational, we believe

the measures described above will remediate the underlying causes of the control deficiencies that gave rise to the material weakness

and will strengthen our internal control over financial reporting.

However, remediation efforts are expected to continue into future fiscal

Further, we will not be able to fully remediate this material weakness until these steps have been completed and have been operating

effectively for a sufficient period of time.

We may also identify additional measures that may be required to remediate the material weakness

in our internal control over financial reporting, necessitating further action.

in Internal Control Over Financial Reporting

Other than the material weakness determination

described above and the commencement of the Company’s remediation activities in connection therewith, there

have been no changes in our internal control over financial reporting during the most recent fiscal quarter, that has materially

affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Limitations of Controls

does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all

errors and all fraud.

Controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving

their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that

all control issues and instances of fraud, if any, within the Company have been detected.

These inherent limitations include the realities

that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake.

Additionally, controls

can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls.

The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there

can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Over time, controls

may become inadequate because of changes in conditions, or deterioration in the degree of compliance with the policies or procedures.

Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

OTHER INFORMATION

Not applicable .

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT

Not applicable.

the three months ended December 31, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement”

or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this item is hereby

incorporated by reference to our definitive proxy statement for our 2024 annual meeting of stockholders to be filed with the SEC within

120 days of the fiscal year ended December 31, 2023.

information required by this item is hereby incorporated by reference to our definitive proxy statement for our 2025 annual meeting of

stockholders to be filed with the SEC within 120 days of the fiscal year ended December 31, 2024.

EXECUTIVE COMPENSATION

The information required by this item is hereby

incorporated by reference to our definitive proxy statement for our 2024 annual meeting of stockholders to be filed with the SEC within

120 days of the fiscal year ended December 31, 2023.

SECURITY OWNERSHIP OF CERTAIN

BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this item is hereby

incorporated by reference to our definitive proxy statement for our 2024 annual meeting of stockholders to be filed with the Securities

and Exchange Commission within 120 days of the fiscal year ended December 31, 2023.

Securities Authorized for Issuance under Equity Compensation Plans

The following table sets forth information regarding

our equity compensation plans at December 31, 2023:

Plan category

Number of securities to be

information required by this item is hereby incorporated by reference to our definitive proxy statement for our 2025 annual meeting of

stockholders to be filed with the SEC within 120 days of the fiscal year ended December 31, 2024.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

information required by this item is hereby incorporated by reference to our definitive proxy statement for our 2025 annual meeting of

stockholders to be filed with the Securities and Exchange Commission within 120 days of the fiscal year ended December 31, 2024.

Authorized for Issuance under Equity Compensation Plans

following table sets forth information regarding our equity compensation plans at December 31, 2024:

of securities to be

average exercise

Number of securities

of securities

(by class) remaining

1 unchanged sentence

issuance under

equity compensation

plans (excluding

securities reflected in

Equity compensation plans approved by security holders (1)

Equity compensation plans not approved by security holders (2)

compensation plans approved by security holders (1)

compensation plans not approved by security holders (2)

(1) Represents

shares of common stock issuable upon exercise of outstanding stock options and rights under our 2018 Stock Incentive Plan (the “2018

Plan”) and 2021 Stock Plan (the “2021 Plan”).

Both plans permit the Company to grant incentive and nonqualified stock

options for the purchase of common stock, and restricted stock awards.

The maximum number of shares of common stock reserved for issuance

under the 2018 Plan and 2021 Plan are 31,472 and 98,000, respectively.

At December 31, 2023 there were 13,113 and 40,377 shares of common

stock available for grant under the 2018 Plan and 2021 Plan, respectively.

shares of common stock issuable upon exercise of outstanding stock options and rights under

our 2018 Stock Incentive Plan (the “2018 Plan”) and 2021 Stock Plan (the “2021

Both plans permit the Company to grant incentive and nonqualified stock options

for the purchase of common stock, and restricted stock awards.

The maximum number of shares

of common stock reserved for issuance under the 2018 Plan and 2021 Plan are 79 and 245, respectively.

At December 31, 2024 there were 35 and 101 shares of common stock available for grant under

the 2018 Plan and 2021 Plan, respectively.

of warrants issued to placement agents, underwriters and consultants.

CERTAIN RELATIONSHIPS AND RELATED

TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this item is hereby

incorporated by reference to our definitive proxy statement for our 2024 annual meeting of stockholders to be filed with the SEC within

120 days of the fiscal year ended December 31, 2023.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

information required by this item is hereby incorporated by reference to our definitive proxy statement for our 2025 annual meeting of

stockholders to be filed with the SEC within 120 days of the fiscal year ended December 31, 2024.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this item is hereby

incorporated by reference to our definitive proxy statement for our 2024 annual meeting of stockholders to be filed with the SEC within

120 days of the fiscal year ended December 31, 2023.

information required by this item is hereby incorporated by reference to our definitive proxy statement for our 2025 annual meeting of

stockholders to be filed with the SEC within 120 days of the fiscal year ended December 31, 2024.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) The following documents are filed as part of this report:

following documents are filed as part of this report:

(1) Financial

Statements—See Index to Consolidated Financial Statements at Part II, Item 8 on page F-1

of this Form 10-K.

financial statement schedules have been omitted because they are not applicable or not required or because the information is included

elsewhere in the financial statements or the Notes thereto.

the accompanying Index to Exhibits filed as a part of this Form 10-K, which list is incorporated by reference in this Item.

(b) See the accompanying Index to Exhibits filed as a part of this

INDEX TO EXHIBITS

Statements—See Index to Consolidated Financial Statements at Part II, Item 8 on

page F-1 of this Form 10-K.

financial statement schedules have been omitted because they are not applicable or not required

or because the information is included elsewhere in the financial statements or the Notes

the accompanying Index to Exhibits filed as a part of this Form 10-K, which list is incorporated

by reference in this Item.

the accompanying Index to Exhibits filed as a part of this Form 10-K.

schedules are not applicable.

Description of Document

Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1 (File No.

1 unchanged sentence

Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Bluejay Diagnostics, Inc., filed with the Delaware Secretary of State on July 21, 2023 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on July 21, 2023).

Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Bluejay Diagnostics, Inc., filed with the Delaware Secretary of State on May 14, 2024 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on May 16, 2024).

Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Bluejay Diagnostics, Inc., filed with the Delaware Secretary of State on June 17, 2024 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on June 20, 2024).

Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Bluejay Diagnostics, Inc., filed with the Delaware Secretary of State on August 28, 2024 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on August 23, 2024).

Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Bluejay Diagnostics, Inc., filed with the Delaware Secretary of State on November 15, 2024 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on November 18, 2024).

Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1 (File No.

333-260029), filed on October 4, 2021).

Amendment No.

1 to Amended and Restated Bylaws (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on October 16, 2024).

Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-1 (File No.

12 unchanged sentences

Description of Securities of Bluejay Diagnostics, Inc.

Form of Prefunded Warrant (incorporated by reference to Exhibit 4.11 to the Company’s Registration Statement on Form S-1 (File No.

333-280253), filed on June 17, 2024).

Form of Class C Warrant (incorporated by reference to Exhibit 4.12 to the Company’s Registration Statement on Form S-1 (File No.

333-280253), filed on June 17, 2024).

Form of Class D Warrant (incorporated by reference to Exhibit 4.13 to the Company’s Registration Statement on Form S-1 (File No.

333-280253), filed on June 17, 2024).

2021 Stock Plan (incorporated by reference to Exhibit 10.1 to the Company’s Registration Statement on Form S-1 (File No.

8 unchanged sentences

333-260029), filed on October 4, 2021).

of Securities Purchase Agreement, dated December 27, 2023, between certain purchasers and Bluejay Diagnostics, Inc.

(incorporated by

reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 2, 2024).

Form of Securities Purchase Agreement, dated December 27, 2023, between certain purchasers and Bluejay Diagnostics, Inc.

(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 2, 2024).

Form of Securities Purchase Agreement, dated August 24, 2023, by and between the Company and each of the Purchasers signatory thereto (incorporated by reference to Exhibit 10.1 to the Company’s Registration Statement on Form S-1 (File No.

12 unchanged sentences

(incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on October 26, 2023).

Form of Note Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 31, 2024).

Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on May 31, 2024).

Form of Senior Secured Note (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on May 31, 2024).

Underwriting Agreement, dated June 27, 2024, between Aegis and Bluejay Diagnostics, Inc.

(incorporated by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K filed on June 28, 2024).

Code of Ethics (incorporated by reference to Exhibit 14.1 to the Company’s Registration Statement on Form S-1 (File No.

333-260029), filed on October 4, 2021).

Insider Trading Policy.

List of Subsidiaries (incorporated by reference to Exhibit 21.1 to the Company’s Registration Statement on Form S-1 (File No.

6 unchanged sentences

Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Incentive Compensation Recovery Policy

Inline XBRL Instance Document

(the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)

Inline XBRL Taxonomy Extension

Schema Document

Inline XBRL Taxonomy Extension

Calculation Linkbase Document

Inline XBRL Taxonomy Extension

Definition Linkbase Document

Inline XBRL Taxonomy Extension

Label Linkbase Document

Inline XBRL Taxonomy Extension

Presentation Linkbase Document

Cover Page Interactive

Data File (formatted as Inline XBRL and included in Exhibit 101)

Incentive Compensation Recovery Policy (incorporated by reference to Exhibit 97.1 to the Company’s Annual Report on Form 10-K filed March 28, 2024)

Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)

Inline XBRL Taxonomy Extension Schema Document

Inline XBRL Taxonomy Extension Calculation Linkbase Document

Inline XBRL Taxonomy Extension Definition Linkbase Document

Inline XBRL Taxonomy Extension Label Linkbase Document

Inline XBRL Taxonomy Extension Presentation Linkbase Document

Cover Page Interactive Data File (formatted as Inline XBRL and included in Exhibit 101)

** Management

1 unchanged sentence

FORM 10-K SUMMARY.

Pursuant to the requ irements

of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed

on its behalf by the undersigned, thereunto duly authorized on March 28, 2024.

Bluejay Diagnostics, Inc.

President, Chief Executive

Officer and Director

to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this

report to be signed on its behalf by the undersigned, thereunto duly authorized on March 31, 2025.

Diagnostics, Inc.

Chief Executive Officer and Director

to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the

registrant and in the capacities and on the dates indicated.

President, Chief Executive Officer and Director

March 28, 2024

(Principal Executive Officer)

/s/ Frances Scally

Interim Chief Financial Officer

March 28, 2024

Frances Scally

(Principal Financial and Accounting Officer)

/s/ Douglas C.

Chairman of the Board of Directors

March 28, 2024

/s/ Donald R.

March 28, 2024

/s/ Svetlana Dey

March 28, 2024

/s/ Gary Gemignani

March 28, 2024

Chief Executive Officer and Director

Executive Officer and

Financial and Accounting Officer)

of the Board of Directors

Gary Gemignani

Index to Consolidated Financial Statements

to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm (PCAOB ID # 392 ) F-2

5 unchanged sentences

of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting

To the Shareholders and the Board of Directors of Bluejay Diagnostics,

Opinion on the Financial Statements

We have audited the accompanying consolidated

balance sheets of Bluejay Diagnostics, Inc.

(the “Company”) as of December 31, 2023 and 2022, the related consolidated statements

of operations, stockholders’ equity and cash flows for the years then ended, and the related notes to the consolidated financial

statements (collectively, the “financial statements”).

In our opinion, the financial statements present fairly, in all material

respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows

for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Emphasis of Matter Regarding Going Concern

The accompanying financial statements have been

prepared assuming that the Company will continue as a going concern.

As discussed in Note 1 to the financial statements, the Company has

incurred net losses since its inception, and has negative cash flows from operations and will need additional funding to complete planned

development efforts.

This raises substantial doubt about the Company’s ability to continue as a going concern.

plans in regard to these matters also are described in Note 1.

The financial statements do not include any adjustments that might result

from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”)

and are required to be independent with respect to the Company in accordance with U.S.

federal securities laws and the applicable rules

and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the

standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial

statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged

to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding

of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s

internal control over financial reporting.

of Independent Registered Public Accounting Firm

the Shareholders and the Board of Directors of Bluejay Diagnostics, Inc.:

on the Financial Statements

have audited the accompanying consolidated balance sheets of Bluejay Diagnostics, Inc.

(the “Company”) as of December 31,

2024 and 2023, the related consolidated statements of operations, stockholders’ equity and cash flows for the years then ended,

and the related notes to the consolidated financial statements (collectively, the “financial statements”).

In our opinion,

the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and

2023, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally

accepted in the United States of America.

of Matter Regarding Going Concern

accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note

1 to the financial statements, the Company has incurred net losses since its inception, and has negative cash flows from operations and

will need additional funding to complete planned development efforts.

This raises substantial doubt about the Company’s ability

to continue as a going concern.

Management’s plans in regard to these matters also are described in Note 1.

The financial statements

do not include any adjustments that might result from the outcome of this uncertainty.

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s

financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with U.S.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits,

we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess

the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond

to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating

the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

/s/ Wolf & Company, P.C.

We have served as the Company’s auditor since 2017.

Boston, Massachusetts

March 28, 2024

Bluejay Diagnostics, Inc.

Consolidated Balance Sheets

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error

or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits

provide a reasonable basis for our opinion.

Wolf & Company, P.C.

have served as the Company’s auditor since 2017.

Massachusetts

Diagnostics, Inc.

Balance Sheets

Current assets:

26 unchanged sentences

Total liabilities and stockholders’ equity

See notes to consolidated financial statements.

Reflects a 1-for-20 reverse stock split effective

July 24, 2023.

Bluejay Diagnostics, Inc.

Consolidated Statements of Operations

report of independent registered public accounting firm and notes to consolidated financial statements.

a 1-for-50 reverse stock split effective November 18, 2024 and 1-for-8 reverse stock split effective June 20, 2024.

Diagnostics, Inc.

Statements of Operations

For Years Ended

Cost of sales

Operating expenses:

7 unchanged sentences

Other income (expense):

Impairment of property and equipment

Interest expense

Interest income

Other income, net

Total other income

Total other income (expense), net

( 7,717,794 )

( 9,953,888 )

Net loss per share - Basic and diluted

Deemed dividend on warrant modification

Net loss applicable to common stockholders

$ ( 20,940,847 )

$ ( 9,953,888 )

Net loss per share to common stockholders - Basic and diluted

$ ( 3,631.48 )

Weighted average common shares outstanding:

Basic and diluted

See notes to consolidated financial statements.

Reflects a 1-for-20 reverse stock split effective

July 24, 2023.

Bluejay Diagnostics, Inc.

Consolidated Statements of Changes in Stockholders’

report of independent registered public accounting firm and notes to consolidated financial statements.

a 1-for-50 reverse stock split effective November 18, 2024 and 1-for-8 reverse stock split effective June 20, 2024.

Diagnostics, Inc.

Statements of Changes in Stockholders’ Equity

Stockholders’

1 unchanged sentence

$ ( 16,997,102 )

Impact of adoption of ASC 842

Stock-based compensation expense

Exercise of stock options

Exercise of common stock Series B Warrants

Issuance of common stock from exercised RSU’s, net of RSU tax withholding

Issuance of common stock to settle accrued bonus, net of shares withheld

Issuance of common stock, net of issuance costs of $ 413,544

( 9,953,888 )

3 unchanged sentences

Stock-based compensation expense

Issuance of common stock from exercised RSU's

RSU tax withholding

Issuance of common stock to settle accrued bonus, net of shares withheld

Issuance of common stock, net of issuance costs of $ 413,544

Issuance of common stock in connection with January 2024 Offering, net of issuance costs of $ 711,031

Issuance of common stock in connection with Bridge Note Financing

Issuance of common stock in connection with June 2024 Offering, net of issuance costs of $ 1,133,419

Exercise of Series D Warrants

Cash for fractional shares from reverse stock split

( 7,717,794 )

2 unchanged sentences

$ ( 34,668,784 )

See notes to consolidated financial statements.

Reflects a 1-for-20 reverse stock split effective

July 24, 2023.

Bluejay Diagnostics, Inc.

Consolidated Statements of Cash Flows

report of independent registered public accounting firm and notes to consolidated financial statements.

a 1-for-50 reverse stock split effective November 18, 2024 and 1-for-8 reverse stock split effective June 20, 2024.

Diagnostics, Inc.

Statements of Cash Flows

For the Years Ended

7 unchanged sentences

Non-cash interest expense for finance lease

Impairment of property and equipment

Non-cash interest expense for note payable

Loss on disposal of property and equipment

1 unchanged sentence

Prepaid expenses and other current assets

Deferred offering costs

Other non-current assets

Accounts payable

Due to related party

Accrued expenses and other current liabilities

Accrued expenses and other current and non-current liabilities

Net cash used in operating activities

3 unchanged sentences

Purchase of property and equipment

( 1,199,270 )

Net cash used in investing activities

( 1,199,270 )

CASH FLOWS FROM FINANCING ACTIVITIES:

1 unchanged sentence

Payment for issuance costs of common stock

Payment of tax withholding on obligations on restricted stock units

( 1,844,450 )

Proceeds from issuance of notes payable

Repayment of notes payable

( 2,000,000 )

Proceeds from exercise of Class D warrants

Fractional shares adjustment for reverse stock split

Payment of deferred offering costs

Proceeds from exercise of stock options

Payment of tax withholding on obligations on restricted stock units

Payment of finance lease

Net cash provided by financing activities

Net decrease in cash and cash equivalents

( 7,906,474 )

Net increase (decrease) in cash and cash equivalents

( 7,906,474 )

2 unchanged sentences

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION AND NON-CASH INVESTING ACTIVITIES

Cash paid for interest on finance lease

Offering costs included in accounts payable and accrued expenses

Purchases of property and equipment included in accrued expenses

See notes to consolidated financial statements.

Bluejay Diagnostics, Inc.

Notes to the Consolidated Financial Statements

Fair value of common stock issued in connection with notes payable

report of independent registered public accounting firm and notes to consolidated financial statements.

Diagnostics, Inc.

to the Consolidated Financial Statements

NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Bluejay Diagnostics, Inc.

and/or the “Company”) is a medical diagnostics company developing rapid tests using whole blood on its Symphony technology

platform (“Symphony”) to improve patient outcomes in critical care settings.

The Company’s Symphony platform is a combination

of Bluejay’s intellectual property (“IP”) and exclusively licensed and patented IP that consists of a mobile device

and single-use test cartridges that if cleared, authorized, or approved by the U.S.

Food and Drug Administration (the “FDA”),

can provide a solution to a significant market need in the United States.

On June 4, 2021, the Company formed Bluejay Spinco,

LLC, a wholly-owned subsidiary of the Company, for purposes of further development of the Company’s ALLEREYE diagnostic test.

is a point-of-care device offering healthcare providers a solution for diagnosing Allergic Conjunctivitis.

August 2023 Offering

On August 24, 2023, the Company entered into a

securities purchase agreement with certain institutional and accredited investors (the “Purchase Agreement”) relating to the

registered direct offering and sale of 216,000 shares of the Company’s common stock at a purchase price of $ 7.365 per share (the

“August 2023 Offering”).

In a concurrent private placement, the Company

also issued to such institutional and accredited investors unregistered warrants to purchase up to 216,000 shares of Common Stock (the

Pursuant to the terms of the Purchase Agreement, for each share of Common Stock issued in this offering an accompanying

Warrant was issued to the purchaser thereof.

Each Warrant is exercisable for one share of Common Stock (the “August 2023 Warrant

Shares”) at an exercise price of $ 7.24 per share, is immediately exercisable upon issuance and will expire five years from the date

The Warrants were offered and sold at a purchase price of $ 0.125 per underlying warrant share, which purchase price is included

in the offering price per share of Common Stock issued in the Offering (the “Private Placement”).

Pursuant to an engagement letter, dated as of

August 7, 2023 (the “Engagement Letter”), between the Company and H.C.

Wainwright & Co., LLC (the “Placement Agent”)

the Company paid the placement agent a total cash fee of $ 111,359 equal to 7.0 % of the gross proceeds received in the Offering and the

Private Placement.

The Company also paid the placement agent the management fee equal to $ 15,908 or 1.0 % of the gross proceeds raised

in the Offering and Private Placement, $ 45,000 for non-accountable expenses, and $ 15,950 for clearing fees.

In addition, the Company issued

to the placement agent, warrants to purchase up to 15,120 shares of Common Stock (the “Placement Agent Warrants”), which represents

7.0 % of the aggregate number of shares of Common Stock sold in the Offering.

The Placement Agent Warrants have substantially the same

terms as the Warrants, except that the Placement Agent Warrants have an exercise price equal to $ 9.2063 , or 125 % of the offering price

per share of Common Stock sold in the Offering, and a term of five years from the commencement of the sales pursuant to the Offering.

The gross proceeds to the Company from the August

2023 Offering and the August 2023 Private Placement are $ 1,590,840 .

The Company incurred offering costs of $ 413,544 .

FDA Regulatory Strategy

The Company’s current regulatory strategy

is designed to support commercialization of Symphony in the United States pending marketing authorization from the FDA.

Previously, the

Company’s regulatory strategy involved clinical studies involving COVID-19 patients.

However, the Company has shifted its focus

away from COVID-19 patients due to a significant decline in the number of COVID-19 related hospitalizations.

Pursuant to this revised

strategy, the Company is beginning to conduct a clinical study to support an FDA regulatory submission with an initial indication for

risk stratification of hospitalized sepsis patients.

The Company submitted a pre-submission application to the FDA presenting the new

study design in May 2023 and participated in a pre-submission meeting on August 11, 2023.

At the meeting, the FDA provided feedback on

the new study design, determined that the submission of a 510(k) is the appropriate premarket submission pathway, and requested that certain

data be provided in the 510(k).

Based on this feedback, the Company determined to proceed as planned while taking into account the FDA’s

In the first quarter

of 2024, the Company initiated the study at multiple sites, which study is intended to use the Symphony IL-6 test to monitor IL-6 concentrations

in patients who are diagnosed with sepsis or septic shock and are admitted or intended to be admitted to the ICU.

The objective of this

study is to establish IL-6 concentrations in these sepsis patients that best predict 28-day all-cause mortality.

The Company expects that

it will need to bring several additional sites into the study in the future, which it believes will help support initial commercialization

and market penetration.

The Company believes that this clinical trial expansion could also support additional indications, but that

any such expansion also could delay obtaining marketing authorization for the product.

As a result of its lack of cash resources, the

Company has recently slowed the timeline of this study to preserve cash resources in the near-term, and the Company expects that this

will delay its Symphony platform regulatory submission timeline until 2025.

Product Manufacturing

The Company maintains contracts with Sanyoseiko

Ltd (“Sanyoseiko”) to manufacture our device and cartridges, and with Toray Industries, Inc (“Toray”) to manufacture

in the near-term (through its wholly owned subsidiary Kamakura Techno-Science, Inc.) certain product intermediate components for use in

cartridges being manufactured for the Company by Sanyoseiko.

Risks and Uncertainties

As noted above, Bluejay is reliant upon Toray

and Sanyoseiko to provide cartridges in sufficient quantity and quality to complete our clinical trials, and our clinical trials could

be delayed if the Company encountered any material supply interruptions while the clinical trials are being conducted.

In addition, there

can be no assurance that we will be able to obtain necessary regulatory authorization for the manufacturing or marketing of the Symphony

in the United States or elsewhere.

There also can be no assurance that we will successfully complete any clinical evaluations necessary

to receive regulatory approvals, or that the clinical trial will demonstrate sufficient safety and efficacy of the Symphony.

to adequately demonstrate the clinical performance of the Symphony device could delay or prevent regulatory approval of the device, which

could prevent or result in delays to market launch and could materially harm our business.

In addition to the FDA regulatory strategy risks

and uncertainties, the Company is subject to a number of risks similar to other companies in its industry, including rapid technological

change, competition from larger biotechnology companies and dependence on key personnel.

The Company is also impacted by inflationary

pressures and global supply chain disruptions currently impacting many companies.

On October 25, 2022, the Company received a notification

letter from the Nasdaq Listing Qualifications Staff of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that the

closing bid price for its common stock had been below $ 1.00 for the previous 30 consecutive business days and that the Company therefore

is not in compliance with the minimum bid price requirement for continued inclusion on the Nasdaq Capital Market under Nasdaq Listing

Rule 5550(a)(2).

On April 25, 2023, at the Company’s request, Nasdaq’s Listing Qualifications Staff notified the Company that

it had extended the time for the Company to regain compliance with the Minimum Bid Requirement until October 23, 2023.

To regain compliance,

the closing bid price of the Company’s common stock needed to be at least $ 1.00 or higher for a minimum of ten consecutive business

On July 24, 2023, the Company effected a reverse

stock split of its shares of common stock at a ratio of 1-for-20 (the “Reverse Stock Split”), with a corresponding reduction

in the number of authorized outstanding number of shares of common stock from 100,000,000 to 7,500,000 .

All of the Company’s

historical share and per share information related to issued and outstanding common stock and outstanding options and warrants exercisable

for common stock in these financial statements have been adjusted, on a retroactive basis, to reflect this 1-for-20 reverse stock split.

On August 8, 2023, the Company received a letter

from the Listing Qualifications Department of Nasdaq notifying the Company that, based on the closing bid price of the Company’s

common stock having been at least $ 1.00 per share for the required period, the Company has regained compliance with Nasdaq Listing Rule

5550(a)(2) and the minimum bid price deficiency matter previously disclosed by the Company on October 25, 2022 was closed.

further described below under note 12, on February 28, 2024, the Company received a new deficiency letter from the Listing Qualifications

Department as a result of the closing bid price for its common stock having again been below $ 1.00 for the previous 30 consecutive business

Going Concern

The Company had cash and cash equivalents of

$ 2,208,516 , as of December 31, 2023.

The Company has incurred net losses since its inception, and has negative cash flows from

operations and had the accumulated deficit of $26,950,990 as of December 31, 2023.

The Company continues to develop the Symphony

device and its first test for the measurement of IL-6.

The Company remains committed to obtaining FDA clearance and will conduct

clinical trials to obtain sufficient data to support its FDA submission, while also continuing to build its manufacturing operations

with its contract manufacturing organizations.

Current cash resources and expected operating expenses are considered in determining

its liquidity requirement;

as well as $ 1,771,375 of current liabilities on its balance sheet as of December 31, 2023.

Company estimates cash resources will be sufficient to fund its operations through the second quarter of 2024.

The Company will need

additional capital to fund its planned operations for the next 12 months.

These conditions raise substantial doubt about the

Company’s ability to continue as a going concern.

The consolidated financial statements for the

years ended December 31, 2023 and 2022 were prepared under the assumption that the Company will continue as a going concern, which contemplates

that the Company will be able to realize assets and discharge liabilities in the normal course of business.

The Company expects that it will seek to raise

such additional capital through public or private equity offerings, grant financing and support from governmental agencies, convertible

debt, collaborations, strategic alliances and distribution arrangements.

Additional funds may not be available when it needs them on terms

that are acceptable to them, or at all.

If adequate funds are not available, it may be required to delay its FDA regulatory strategy,

and to delay or reduce the scope of its research or development programs, its commercialization efforts or its manufacturing commitments

and capacity.

In addition, if it raises additional funds through collaborations, strategic alliances or distribution arrangements with

third parties, it may have to relinquish valuable rights to its technologies or future revenue streams.

Diagnostics, Inc.

(“Bluejay” and/or the “Company”) is a medical diagnostics company focused on improving patient

outcomes in critical care settings.

The Company is working on developing rapid tests using whole blood on its Symphony technology platform

(“Symphony”), which consists of an analyzer and cartridges.

The Company’s Symphony platform is a combination of Bluejay’s

intellectual property (“IP”) and exclusively licensed and patented IP that consists of a mobile device and single-use test

cartridges that if cleared, authorized, or approved by the U.S.

Food and Drug Administration (the “FDA”), could provide a

solution to a significant market need in the United States.

June 4, 2021, the Company formed Bluejay Spinco, LLC, a wholly-owned subsidiary of the Company, for purposes of further development of

the Company’s ALLEREYE diagnostic test.

ALLEREYE is a point-of-care device offering healthcare providers a solution for diagnosing

Allergic Conjunctivitis.

Regulatory Strategy

Company’s current regulatory strategy is designed to support commercialization of Symphony in the United States pending marketing

authorization from the FDA.

In May 2023, the Company submitted a pre-submission application to the FDA presenting study designs to validate

Symphony IL-6 for use with hospitalized sepsis patients.

We participated in a pre-submission meeting with the FDA on August 11, 2023,

and at the meeting the FDA provided feedback on the new study design, determined that the submission of a 510(k) is the appropriate premarket

submission pathway, and requested that certain data be provided in the 510(k).

Based on this feedback, the Company determined to proceed

on this basis, which considers the FDA’s feedback.

the second quarter of 2024, we completed a multicenter SYmphony IL-6 MONitoring Sepsis (“SYMON”) clinical study investigating

the role of interleukin-6 (IL-6) in patients diagnosed with sepsis and septic shock.

This prospective study assessed the performance

of IL-6 upon initial presentation to the intensive care unit (ICU).

A primary analysis of the SYMON-I pilot clinical study (registered

clinical trial number NCT06181604) highlighted that IL-6 levels within 24 hours of sepsis or septic shock diagnosis and admission to

the ICU may predict patient mortality out to 28 days.

Furthermore, a secondary outcome of the SYMON-I study showed that IL-6 levels within

24 hours of sepsis or septic shock diagnosis and admission to the ICU is a predictor of patient mortality during their hospitalization.

Other secondary outcomes showed that lactate and Sequential Organ Failure Assessment (SOFA), standard clinical tests used for sepsis

and septic shock patients, were not predictors of patient mortality out to 28 days.

We believe that the findings underscore the potential

importance of IL-6 as a predictor and provide new insights into the potential pathways for improving sepsis outcomes.

In the third quarter

of 2024, we initiated SYMON-II pivotal clinical study to validate the findings of the SYMON-I pilot clinical study.

a result of its lack of cash resources, the Company has recently slowed the timeline of this study to preserve cash resources in the

near-term, and the Company expects that these delays will prevent the Company from submitting an FDA application for its Symphony platform

before the fourth quarter of 2027.

Manufacturing

Company maintains contracts with Sanyoseiko Co.

Ltd (“Sanyoseiko”) to manufacture its analyzer.

Once redeveloped, the Company

plans to transfer manufacturing of its cartridges to Sanyoseiko, or other suitable CMO, to manufacture the cartridges.

and Uncertainties

noted above, Bluejay is reliant upon Sanyoseiko to provide analyzers in sufficient quantity and quality to complete the validations for

our FDA application.

Our FDA application submission could be delayed if the Company encounters any material supply interruptions.

addition, there can be no assurance that we will be able to obtain necessary regulatory authorization for the manufacturing or marketing

of the Symphony in the United States or elsewhere.

There also can be no assurance that we will successfully complete any clinical evaluations

necessary to receive regulatory approvals, or that the clinical study will demonstrate sufficient safety and effectiveness of the Symphony

The failure to adequately demonstrate the clinical performance of the Symphony IL-6 test could delay or prevent regulatory

approval, which could prevent or result in delays to market launch and could materially harm our business.

addition to the FDA regulatory strategy risks and uncertainties, the Company is subject to a number of risks similar to other companies

in its industry, including rapid technological change, competition from larger biotechnology companies and dependence on key personnel.

The Company is also impacted by inflationary pressures and global supply chain disruptions currently impacting many companies.

Stock Splits and Increase to Authorized Capital

July 24, 2023, the Company effected the first reverse stock split of its shares of common stock at a ratio of 1-for-20 (the “July

2023 Reverse Stock Split”).

On June 20, 2024, the Company effected a second reverse stock split of its shares of common stock at

a ratio of 1-for-8 (the “June 2024 Reverse Stock Split”).

On November 18, 2024, the Company effected a third reverse stock

split of its shares of common stock at a ratio of 1-for-50 (the “November 2024 Reverse Stock Split” and, together with the

July 2023 Reverse Stock Split and June 2024 Reverse Stock Split, the “Reverse Stock Splits”).

As such, collectively, the

Company’s common stock has undergone reverse stock splits that have combined the shares on a 1-for-8,000 aggregate basis since

All of the Company’s historical share and per share information related to issued and outstanding common stock and outstanding

options and warrants exercisable for common stock in these financial statements have been adjusted, on a retroactive basis, to reflect

these reverse stock splits.

October 23, 2024, the stockholders of the Company approved and adopted an amendment to the Company’s amended and restated certificate

of incorporation, to increase the number of authorized shares of the Company’s Common Stock to 250,000,000 .

of Presentation

accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the

United States (“US GAAP”) and include all adjustments necessary for the presentation of the Company’s consolidated

financial position, results of operations and cash flows for the periods presented.

The consolidated financial statements include

the accounts of the Company and its wholly owned subsidiary.

All intercompany balances and transactions have been eliminated in

consolidation.

consolidated financial statements for the years ended December 31, 2024 and 2023 were prepared under the assumption that the Company

will continue as a going concern, which contemplates that the Company will be able to realize assets and discharge liabilities in the

normal course of business.

Company had cash and cash equivalents of $ 4,301,945 and current liabilities of $ 810,368 as of December 31, 2024.

The Company has incurred

net losses since its inception, has incurred negative cash flows from operations and has an accumulated deficit of $ 34,668,784 as of

December 31, 2024.

The Company estimates cash resources will be sufficient to fund its operations up to the third quarter of 2025.

conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date these financial statements were issued.

Company continues to develop the Symphony device and its first test for the measurement of IL-6.

The Company remains committed to obtaining

FDA clearance and will conduct clinical studies to obtain sufficient data to support its FDA submission, while also continuing to build

its manufacturing operations with its contract manufacturing organizations.

Company expects that it will seek to raise additional capital through public or private equity offerings, grant financing and support

from governmental agencies, convertible debt, collaborations, strategic alliances and distribution arrangements.

Additional funds may

not be available when it needs them on terms that are acceptable to them, or at all.

If adequate funds are not available, it may be required

to delay its FDA regulatory strategy, and to delay or reduce the scope of its research or development programs, commercialization efforts

or manufacturing commitments and capacity, or even cease operations and enter into receivership.

In addition, if the Company raises additional

funds through collaborations, strategic alliances or distribution arrangements with third parties, it may have to relinquish valuable

rights to its technologies or future revenue streams.

These accompanying financial statements do not

include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of

liabilities that might result from the outcome of this uncertainty.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying consolidated financial statements

have been prepared in accordance with U.S.

generally accepted accounting principles in the United States (“GAAP”) and include

all adjustments necessary for the presentation of the Company’s consolidated financial position, results of operations and cash

flows for the periods presented.

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary.

All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity

with GAAP requires management to make estimates and assumptions that affect the amounts and disclosures reported in these consolidated

with US GAAP requires management to make estimates and assumptions that affect the amounts and disclosures reported in these consolidated

financial statements and accompanying notes.

Actual results could differ materially from those estimates.

The Company believes judgment

is involved in accounting for the fair value-based measurement of stock-based compensation, accruals, and warrant issuances.

evaluates its estimates and assumptions as facts and circumstances dictate.

As future events and their effects cannot be determined with

precision, actual results could differ from these estimates and assumptions, and those differences could be material to the condensed

consolidated financial statements.

Cash and Cash Equivalents

The Company considers all highly liquid investments

with maturities of three months or less at the date of purchase to be cash equivalents.

Cash equivalents, consisting of highly liquid

money market funds are carried at fair market value which approximates cost.

The Company recognized interest income associated with cash

equivalents of $ 164,900 and $ 89,673 for the years ended December 31, 2023 and 2022, respectively.

Revenue Recognition

The Company recognizes revenue under the core

principles of depicting the transfer of control to the Company’s customers in an amount reflecting the consideration to which the

Company expected to be entitled.

In order to achieve that core principle, the Company applies the following five step approach:

the contract with a customer, (2) identify the performance obligations in that contract, (3) determine the transaction price, (4) allocate

the transaction price to the performance obligations in the contract, and (5) recognize revenue when a performance obligation is satisfied.

The Company recognizes revenue when performance

obligations under the terms of the contract with the customer are satisfied and are recognized at a point in time, which is also when

control is transferred.

When the Company performs shipping and handling activities after the transfer of control to the customer (e.g.

when control transfers prior to delivery), they are considered fulfillment activities and, accordingly, the costs are accrued for when

the related revenue is recognized.

Sales tax and valued added taxes collected from the customers relating to product sales and remitted

to governmental authorities are excluded from revenues.

The Company accounts for its leases under the

Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) ASC 842, Leases

The Company has arrangements involving the lease

of facilities and the lease of copiers.

Under ASC 842, at inception of the arrangement, the Company determines whether the contract is

or contains a lease and whether the lease should be classified as an operating or a financing lease.

This determination, among other considerations,

involves an assessment of whether the Company can control the underlying asset and have the right to obtain substantially all of the economic

benefits or outputs from the asset.

The Company accounts for the leases of less than 12 months as short-term leases.

The Company recognizes right-of-use (“ROU”)

assets and lease liabilities as of the lease commencement date based on the net present value of the future minimum lease payments over

the lease term.

The Company amortizes the right-of-use assets over the remaining terms of the lease.

ASC 842 requires the leases to use

the rate implicit in the lease unless it is not readily determinable and then it may use its incremental borrowing rate (“IBR”)

to discount the future minimum lease payments.

Most of the Company’s leases do not provide an implicit rate;

therefore, the Company

uses its IBR to discount the future minimum lease payments.

The Company determines its IBR with its credit rating and other economic information

available as of the commencement date, as well as the identified lease term.

During the assessment of the lease term, the Company considers

its renewal options and extensions within the arrangements and the Company includes these options when it’s reasonably certain to

extend the term of the lease.

The Company has lease arrangements that contain

incentives for tenant improvements as well as fixed rent escalation clauses.

For contracts with tenant improvement incentives that are

determined to be leasehold improvements and the Company is reasonably certain to exercise, it records a reduction to the lease liability

and amortizes the incentive over the identified term of the lease as a reduction to rent expense.

The Company records rental expense on

a straight-line basis over the identified lease term on contracts with rent escalation clauses.

Fair Value Measurements

The accounting guidance defines fair value, establishes

a consistent framework for measuring fair value and requires disclosure for each major asset and liability category measured at fair value

on either a recurring or non-recurring basis.

Fair value is defined as an exit price, representing the amount that would be received to

sell an asset or paid to transfer a liability in an orderly transaction between market participants.

As such, fair value is a market-based

measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability.

for considering such assumptions, the accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs

used in measuring fair value as follows:

Observable inputs such as quoted prices in active markets.

Inputs, other than the quoted prices in active markets that are observable either directly or indirectly.

Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The Company determines fair value for cash equivalents

with Level 1 inputs through the reference to the quoted market prices.

There were no liabilities measured at fair value

on a recurring basis, and no assets or liabilities measured at fair value on a non-recurring basis as of December 31, 2023 and 2022.

The carrying values of financial instruments such as prepaid expenses,

accounts payable, and accrued expenses approximated fair value as of December 31, 2023 and 2022 due to their short-term maturities.

Impairment of Property and Equipment

The Company evaluates its long-lived assets with

definite lives, such as fixed assets and right-of-use assets for impairment.

The carrying value of fixed assets and right-of use assets

is reviewed on a regular basis for the existence of facts or circumstances, both internally and externally, that may suggest impairment.

Some factors which the Company considers to be triggering events for impairment review include a significant decrease in the market value

of an asset, a significant change in the extent or manner in which an asset is used, a significant adverse change in the business climate

that could affect the value of an asset, an accumulation of costs for an asset in excess of the amount originally expected, a current

period operating loss or cash flow decline combined with a history of operating loss or cash flow uses or a projection that demonstrates

continuing losses and a current expectation that, it is more likely than not, a long-lived asset will be disposed of at a loss before

the end of its estimated useful life.

The factors that drive the estimate of the life are often uncertain and are reviewed on a periodic

basis or when events occur that warrant review.

Recoverability is measured by comparison of the assets’ book value to future net

undiscounted cash flows that the assets are expected to generate.

If the assets are not recoverable, the impairment charge is measured

as the amount by which the carrying value of the asset group exceeds the fair value.

Concentration of Credit Risk

Cash, and cash equivalents consist of financial

instruments that potentially subject the Company to a concentration of credit risk in the event of a default by the related financial

institution holding the securities, to the extent of the value recorded in the balance sheet.

The Company invests cash that is not required

for immediate operating needs primarily in highly liquid instruments with lower credit risk.

Research and Development Expenses

Costs incurred in the research and development

of new products are expensed as incurred.

Research and development costs include, but are not limited to, salaries, benefits, stock-based

compensation, laboratory supplies, fees for professional service providers and costs associated with product development efforts, including

preclinical studies and clinical trials.

The Company estimates preclinical study and clinical

trial expenses based on the services performed, pursuant to contracts with research institutions and clinical research organizations that

conduct and manage preclinical studies and clinical trials on its behalf.

In accruing service fees, the Company estimates the time period

over which services will be performed and the level of effort to be expended in each period.

If the actual timing of the performance of

services or the level of effort varies from the estimate, the Company will adjust the accrual accordingly.

Payments made to third parties

under these arrangements in advance of the receipt of the related services are recorded as prepaid expenses until the services are rendered.

Stock-Based Compensation

Share-based compensation expense for all

share-based payment awards made to employees, directors and non-employees is measured based on the grant-date fair value of the award.

Share-based compensation expense for awards granted to non-employees is determined using the fair value of the consideration received

or the fair value of the equity instruments issued, whichever is more reliably measured.

The Company uses the Black-Scholes option pricing

model to determine the fair value of options granted.

The Company recognizes the compensation cost of share-based awards on a straight-line

basis over the requisite service period.

For stock awards for which vesting is subject to performance – based milestones, the expense

is recorded over the implied service period after the point when the achievement of the milestone is probable, or the performance condition

has been achieved.

The determination of the fair value of share-based

payment awards utilizing the Black-Scholes model is affected by the stock price and a number of assumptions, including expected volatility,

expected life, risk-free interest rate and expected dividends.

The Company does not have a history of market prices of its common stock,

and as such, volatility is estimated using historical volatilities of similar public entities.

The expected life of the awards is estimated

based on the simplified method for grants to employees and is based on the contractual term for non-employee awards.

The risk-free interest

rate assumption is based on observed interest rates appropriate for the terms of the awards.

The dividend yield assumption is based on

history and expectation of paying no dividends.

The Company recognizes forfeitures related to

employee share-based payments when they occur.

Segment Reporting

Management has determined that the Company has

one operating segment, which is consistent with the Company structure and how it manages the business.

The Company follows accounting guidance regarding

the recognition, measurement, presentation and disclosure of uncertain tax positions in the consolidated financial statements.

Tax positions

taken or expected to be taken in the course of preparing the Company’s tax returns are required to be evaluated to determine whether

the tax positions are “more-likely-than-not” of being sustained by the applicable tax authorities.

Tax positions not deemed

to meet a more-likely-than-not threshold would be recorded in the consolidated financial statements.

There are no uncertain tax positions

that require accrual or disclosure as of December 31, 2023.

Any interest or penalties are charged to expense.

During the years ended December

31, 2023 and 2022, the Company had no significant interest and penalties.

Tax years subsequent to December 31, 2019 are subject to examination

by federal and state authorities.

The Company recognizes deferred tax assets and

liabilities based on the impact of temporary differences between assets and liabilities recognized for tax and financial reporting purposes

measured by applying enacted tax rates and laws that will be in effect when the differences are expected to reverse, net operating loss

carryforwards and tax credits.

Valuation allowances are provided when necessary to reduce net deferred tax assets to an amount that is

more likely than not to be realized.

The deferred tax benefit or expense for the period represents the change in the deferred tax asset

or liability from the beginning to the end of the period.

Deferred Offering Costs

Deferred offering costs consist of underwriting,

legal, accounting and other expenses incurred through December 31, 2023 that are directly related to the January 2024 Offering and

that will be charged to stockholders’ equity upon the completion of the January 2024 Offering.

Net Loss per Share

loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding for the period,

without consideration for potentially dilutive securities.

Diluted net loss per share is computed by dividing the net loss by the weighted

average number of shares of common stock and dilutive common stock equivalents outstanding for the period determined using the treasury

stock and if-converted methods.

Dilutive common stock equivalents are comprised of options outstanding under the Company’s stock

option plan, restricted stock units, and warrants.

For all periods presented, there is no difference in the number of shares used to calculate

basic and diluted shares outstanding as inclusion of the potentially dilutive securities would be antidilutive.

The Company evaluates its estimates

and assumptions as facts and circumstances dictate.

As future events and their effects cannot be determined with precision, actual results

could differ from these estimates and assumptions, and those differences could be material to the consolidated financial statements.

and Cash Equivalents

Company considers all highly liquid investments with maturities of three months or less at the date of purchase to be cash equivalents.

Cash equivalents, consisting of highly liquid money market funds are carried at fair market value which approximates cost.

recognized interest income associated with cash equivalents of $ 145,823 and $ 164,900 for the years ended December 31, 2024 and 2023,

respectively.

Company accounts for its leases under the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification

(“ASC”) ASC 842, Leases (“ASC 842”).

Company has arrangements involving the lease of facilities and the lease of copiers.

Under ASC 842, at inception of the arrangement,

the Company determines whether the contract is or contains a lease and whether the lease should be classified as an operating or a financing

This determination, among other considerations, involves an assessment of whether the Company can control the underlying asset

and have the right to obtain substantially all of the economic benefits or outputs from the asset.

The Company accounts for the leases

of less than 12 months as short-term leases.

Company recognizes right-of-use (“ROU”) assets and lease liabilities as of the lease commencement date based on the net present

value of the future minimum lease payments over the lease term.

The Company amortizes the right-of-use assets over the remaining terms

of the lease.

ASC 842 requires the leases to use the rate implicit in the lease unless it is not readily determinable and then it may

use its incremental borrowing rate (“IBR”) to discount the future minimum lease payments.

Most of the Company’s leases

do not provide an implicit rate;

therefore, the Company uses its IBR to discount the future minimum lease payments.

The Company determines

its IBR with its credit rating and other economic information available as of the commencement date, as well as the identified lease

During the assessment of the lease term, the Company considers its renewal options and extensions within the arrangements and the

Company includes these options when it’s reasonably certain to extend the term of the lease.

Company has lease arrangements that contain incentives for tenant improvements as well as fixed rent escalation clauses.

For contracts

with tenant improvement incentives that are determined to be leasehold improvements and the Company is reasonably certain to exercise,

it records a reduction to the lease liability and amortizes the incentive over the identified term of the lease as a reduction to rent

The Company records rental expense on a straight-line basis over the identified lease term on contracts with rent escalation

Value Measurements

accounting guidance defines fair value, establishes a consistent framework for measuring fair value and requires disclosure for each

major asset and liability category measured at fair value on either a recurring or non-recurring basis.

Fair value is defined as an exit

price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between

market participants.

As such, fair value is a market-based measurement that should be determined based on assumptions that market participants

would use in pricing an asset or liability.

As a basis for considering such assumptions, the accounting guidance establishes a three-tier

fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

inputs such as quoted prices in active markets.

other than the quoted prices in active markets that are observable either directly or indirectly.

inputs in which there is little or no market data, which require the reporting entity to develop its ow n assumptions.

Company determines fair value for cash equivalents with Level 1 inputs through the reference to the quoted market prices.

were no liabilities measured at fair value on a recurring basis, and no assets or liabilities measured at fair value on a non-recurring

basis as of December 31, 2024 and 2023.

carrying values of financial instruments such as prepaid expenses, accounts payable, and accrued expenses approximated fair value as

of December 31, 2024 and 2023 due to their short-term maturities.

of Property and Equipment

Company evaluates its long-lived assets with definite lives, such as fixed assets and right-of-use assets for impairment.

value of fixed assets and right-of use assets is reviewed on a regular basis for the existence of facts or circumstances, both internally

and externally, that may suggest impairment.

Some factors which the Company considers to be triggering events for impairment review include

a significant decrease in the market value of an asset, a significant change in the extent or manner in which an asset is used, a significant

adverse change in the business climate that could affect the value of an asset, an accumulation of costs for an asset in excess of the

amount originally expected, a current period operating loss or cash flow decline combined with a history of operating loss or cash flow

uses or a projection that demonstrates continuing losses and a current expectation that, it is more likely than not, a long-lived asset

will be disposed of at a loss before the end of its estimated useful life.

The factors that drive the estimate of the life are often

uncertain and are reviewed on a periodic basis or when events occur that warrant review.

Recoverability is measured by comparison of

the assets’ book value to future net undiscounted cash flows that the assets are expected to generate.

If the assets are not recoverable,

the impairment charge is measured as the amount by which the carrying value of the asset group exceeds the fair value.

Concentration

of Credit Risk

and cash equivalents consist of financial instruments that potentially subject the Company to a concentration of credit risk in the event

of a default by the related financial institution holding the securities, to the extent of the value recorded in the balance sheet.

Company invests cash that is not required for immediate operating needs primarily in highly liquid instruments with lower credit risk.

and Development Expenses

incurred in the research and development of new products are expensed as incurred.

Research and development costs include, but are not

limited to, salaries, benefits, stock-based compensation, laboratory supplies, fees for professional service providers and costs associated

with product development efforts, including preclinical studies and clinical trials.

Company estimates preclinical study and clinical trial expenses based on the services performed, pursuant to contracts with research

institutions and clinical research organizations that conduct and manage preclinical studies and clinical trials on its behalf.

service fees, the Company estimates the time period over which services will be performed and the level of effort to be expended in each

If the actual timing of the performance of services or the level of effort varies from the estimate, the Company will adjust

the accrual accordingly.

Payments made to third parties under these arrangements in advance of the receipt of the related services are

recorded as prepaid expenses until the services are rendered.

compensation expense for all share-based payment awards made to employees, directors and non-employees is measured based on the grant-date

fair value of the award.

Share-based compensation expense for awards granted to non-employees is determined using the fair value of the

consideration received or the fair value of the equity instruments issued, whichever is more reliably measured.

Company uses the Black-Scholes option pricing model to determine the fair value of options granted.

The Company recognizes the compensation

cost of share-based awards on a straight-line basis over the requisite service period.

For stock awards for which vesting is subject

to performance-based milestones, the expense is recorded over the implied service period after the point when the achievement of the

milestone is probable, or the performance condition has been achieved.

determination of the fair value of share-based payment awards utilizing the Black-Scholes model is affected by the stock price and a

number of assumptions, including expected volatility, expected life, risk-free interest rate and expected dividends.

The Company does

not have a history of market prices of its common stock, and as such, volatility is estimated using historical volatilities of similar

public entities.

The expected life of the awards is estimated based on the simplified method for grants to employees and is based on

the contractual term for non-employee awards.

The risk-free interest rate assumption is based on observed interest rates appropriate

for the terms of the awards.

The dividend yield assumption is based on history and expectation of paying no dividends.

Company recognizes forfeitures related to employee share-based payments when they occur.

The Company accounts for warrants as either equity-classified or liability-classified

instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in the Financial Accounting

Standards Board, or the FASB, ASC, 480, Distinguishing Liabilities from Equity, or ASC 480, and ASC 815, Derivatives and Hedging, or ASC

The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of

a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including

whether the warrants are indexed to the Company’s own stock and whether the warrant holders could potentially require “net

cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification.

the Company determines if the warrants meet the definition of a derivative based on their contractual terms.

This assessment, which requires

the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while

the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity

classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance.

or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial

fair value on the date of issuance, and at each balance sheet date thereafter.

Changes in the estimated fair value of liability-classified

warrants are recognized as a non-cash gain or loss on the consolidated statements of operations.

The Company also evaluates if changes

in contractual terms or other considerations would result in the reclassification of outstanding warrants from liabilities to stockholders’

equity (or vice versa).

has determined that the Company has one operating segment, which is consistent with the Company’s structure and how it manages

the business.

Company follows accounting guidance regarding the recognition, measurement, presentation and disclosure of uncertain tax positions in

the consolidated financial statements.

Tax positions taken or expected to be taken in the course of preparing the Company’s tax

returns are required to be evaluated to determine whether the tax positions are “more-likely-than-not” of being sustained

by the applicable tax authorities.

Tax positions not deemed to meet a more-likely-than-not threshold would be recorded in the consolidated

financial statements.

There are no uncertain tax positions that require accrual or disclosure as of December 31, 2024.

Any interest or

penalties are charged to expense.

During the years ended December 31, 2024 and 2023, the Company had no significant interest and penalties.

Tax years subsequent to December 31, 2021 are subject to examination by federal and state authorities.

Company recognizes deferred tax assets and liabilities based on the impact of temporary differences between assets and liabilities recognized

for tax and financial reporting purposes measured by applying enacted tax rates and laws that will be in effect when the differences

are expected to reverse, net operating loss carryforwards and tax credits.

Valuation allowances are provided when necessary to reduce

net deferred tax assets to an amount that is more likely than not to be realized.

The deferred tax benefit or expense for the period

represents the change in the deferred tax asset or liability from the beginning to the end of the period.

Offering Costs

offering costs consist of underwriting, legal, accounting and other expenses incurred through December 31, 2023 that are directly

related to the January 2024 Offering and that were charged to stockholders’ equity upon the completion of the January 2024 Offering.

Loss per Share

Basic net loss per share to common stockholders is

computed by dividing the net loss applicable to common stockholders by the weighted-average number of shares of common stock outstanding

for the period, without consideration for potentially dilutive securities.

Diluted net loss per share is computed by dividing the net

loss by the weighted average number of shares of common stock and dilutive common stock equivalents outstanding for the period determined

using the treasury stock and if-converted methods.

Dilutive common stock equivalents are comprised of options outstanding under the Company’s

stock option plan, restricted stock units, and warrants.

For all periods presented, there is no difference in the number of shares used

to calculate basic and diluted shares outstanding as inclusion of the potentially dilutive securities would be antidilutive.

dilutive securities not included in the calculation of diluted net loss per share, because to do so would be anti-dilutive, are as follows

5 unchanged sentences

Class B Warrants for common stock

Recently Adopted Accounting Standards

In October 2021, the FASB issued ASU No.

2021-08, Business

Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 805”) ,

an amendment of the ASC.

The amendments to ASU 805 address diversity and inconsistency related to the recognition and measurement of contract

assets and contract liabilities acquired in a business combination and require that an acquirer recognize and measure contract assets

and contract liabilities acquired in accordance with ASC 2014-09, Revenue from Contracts with Customers (Topic 606) (“ ASC

Under GAAP, an acquirer generally recognizes assets and liabilities assumed in a business combination, including contract

assets and liabilities arising from revenue contracts with customers, at fair value on the acquisition date.

2021-08 will result

in the acquirer recording acquired contract assets and liabilities on the same basis that would have been recorded by the acquiree before

the acquisition under ASC 606.

The Company adopted this new standard on January 1, 2023.

The new standard had no impact on the Company’s

consolidated statements of operations or cash flows.

Recently Issued Accounting Standards

The Company does not believe that any recently

issued but not yet effective accounting pronouncements will have a material effect on the accompanying consolidated financial statements.

5-Year warrants for common stock

Class C warrants for common stock

Placement agent warrants

Issued Accounting Standards

Company does not believe that any recently issued but not yet effective accounting pronouncements will have a material effect on the

accompanying consolidated financial statements.

LICENSE AND SUPPLY AGREEMENT WITH TORAY INDUSTRIES

On October 6, 2020, the Company entered

into a License and Supply Agreement (“License Agreement”) with Toray Industries, Inc.

Under the License

Agreement, the Company received the exclusive license (outside of Japan) to make and distribute protein detection cartridges that have

a function of automatic stepwise feeding of reagent (the “Cartridges”).

In exchange for the license, the Company committed

to make two payments of $ 120,000 each, both of which were made in 2021.

In addition, following the first sale of the Cartridges after

regulatory approval, the Company will make royalty payments to Toray equal to 15 % of the net sales of the Cartridges for the period that

any underlying patents exist or five years after the first sale.

Following the first sale after obtaining regulatory approval, the Company

will make minimum annual royalty payments of $ 60,000 for the first year and $ 100,000 for each year thereafter, which shall be creditable

against any royalties owed to Toray in such calendar year.

On October 23, 2023, the Company and Toray entered

into an Amended and Restated License Agreement (the “New Toray License Agreement”) and a Master Supply Agreement (the “New

Toray Supply Agreement”).

Under the New Toray License Agreement, the Company continues to license from Toray intellectual property

rights needed to manufacture single-use test cartridges, and the Company has received the right to sublicense certain Toray intellectual

property to Sanyoseiko in connection with Sanyoseiko’s ongoing agreement with the Company to manufacture its Symphony device and

cartridges (including in connection with the Company’s clinical trials).

In addition, the New Toray License Agreement provides for

the transfer of certain technology related to the cartridges to Sanyoseiko.

The royalty payments payable by the Company to Toray have

been reduced under the New Toray License Agreement from 15 % to 7.5 % (or less in certain circumstances) of net sales of certain cartridges

for a term of 10 years.

A 50 % reduction in the royalty rate applies upon expiry of applicable Toray patents on a product-by-product and

country-by-country basis.

The New Toray License Agreement contemplates that applicable royalty payment obligations from the Company to

Toray for other products will be determined separately by the parties in the future.

There were no sales of or revenues from the cartridges

during the 12-month periods ended December 31, 2023 and 2022.

Under the New Toray Supply Agreement, Toray will

manufacture in the near-term (through its wholly owned subsidiary Kamakura Techno- Science, Inc.) certain product intermediate components

for use in cartridges being manufactured for the Company by Sanyoseiko.

These cartridges made using Toray intermediates are for the purpose

of obtaining FDA approval and not for commercial sale.

The New Toray Supply Agreement has a term ending on the earlier of October 23,

2025 or the date that the Company obtains FDA approval for its product, and may be extended for up to six months by mutual agreements

of the parties.

Once FDA approval has been obtained, the intermediates and cartridges will be manufactured by SanyoSeiko under a separate

supply agreement between the Company and SanyoSeiko.

At December 31, 2023 and 2022, there

were no amounts accrued related to the New Toray License Agreement or the License Agreement.

The following table summarizes information

with regard to warrants outstanding at December 31, 2023:

Exercisable for

Weighted Average

Common Stock Warrants

Class A Warrants

Class B Warrants

As part of the August 2023 Offering that occurred

during the year ended December 31, 2023, the Company issued 216,000 Warrants and 15,120 Placement Agent Warrants, which were accounted

for as equity classified financial instruments under ASC 815, Derivatives and Hedging .

There were no exercises of Common

Stock Warrants during the years ended December 31, 2023 and 2022.

Holders of Class B Warrants

may also exercise such warrants on a “cashless” basis after the earlier of (i) 10 trading days from closing date of the offering

or (ii) the time when $ 10.0 million of volume is traded in the Company’s common stock, if the volume weighted average price of the

Company’s common stock on any trading day on or after the closing date of the offering fails to exceed the exercise price of the

Class B Warrant (subject to adjustment as described in the warrant agreement).

During the year ended December 31, 2023, no Class

A or Class B Warrants were exercised.

During the year ended December 31, 2022, 2,005 Class B Warrants were exercised, all on a cashless

basis, while there were no exercises of Class A Warrants.

October 6, 2020, the Company entered into a License and Supply Agreement (“License Agreement”) with Toray Industries, Inc.

Under the License Agreement, the Company received the exclusive license (outside of Japan) to make and distribute

protein detection cartridges that have a function of automatic stepwise feeding of reagent (the “Cartridges”).

for the license, the Company committed to make two payments of $ 120,000 each, both of which were made in 2021.

In addition, following

the first sale of the Cartridges after regulatory approval, the Company will make royalty payments to Toray equal to 15 % of the net sales

of the Cartridges for the period that any underlying patents exist or five years after the first sale.

Following the first sale after

obtaining regulatory approval, the Company will make minimum annual royalty payments of $ 60,000 for the first year and $ 100,000 for each

year thereafter, which shall be creditable against any royalties owed to Toray in such calendar year.

October 23, 2023, the Company and Toray entered into an Amended and Restated License Agreement (the “New Toray License Agreement”)

and a Master Supply Agreement (the “New Toray Supply Agreement”).

Under the New Toray License Agreement, the Company continues

to license from Toray intellectual property rights needed to manufacture single-use test cartridges, and the Company has received the

right to sublicense certain Toray intellectual property to Sanyoseiko in connection with Sanyoseiko’s ongoing agreement with the

Company to manufacture its Symphony device and cartridges (including in connection with the Company’s clinical trials).

the New Toray License Agreement provides for the transfer of certain technology related to the cartridges to Sanyoseiko.

payments payable by the Company to Toray have been reduced under the New Toray License Agreement from 15 % to 7.5 % (or less in certain

circumstances) of net sales of certain cartridges for a term of 10 years.

A 50 % reduction in the royalty rate applies upon expiry of

applicable Toray patents on a product-by-product and country-by-country basis.

The New Toray License Agreement contemplates that applicable

royalty payment obligations from the Company to Toray for other products will be determined separately by the parties in the future.

There were no sales of or revenues from the cartridges during the 12-month periods ended December 31, 2024 and 2023.

the New Toray Supply Agreement, Toray will manufacture in the near-term (through its wholly owned subsidiary Kamakura Techno- Science,

Inc.) certain product intermediate components for use in cartridges being manufactured for the Company by Sanyoseiko.

These cartridges

made using Toray intermediates are only suitable for the purpose of obtaining FDA approval and not for commercial sale.

The New Toray

Supply Agreement has a term ending on the earlier of October 23, 2025 or the date that the Company obtains FDA approval for its product,

and may be extended for up to six months by mutual agreement of the parties.

Once FDA approval has been obtained, the intermediates and

cartridges will be manufactured by SanyoSeiko under a separate supply agreement between the Company and SanyoSeiko.

December 31, 2024 and 2023, there were no amounts accrued related to the New Toray License Agreement or the License Agreement.

2024 Offering

June 28, 2024, the Company sold in a public offering ( the “June 2024 Offering”), (i) 11,541 common units (the

“Common Units”), each consisting of one share of common stock, two Class C Warrants and one Class

D Warrant and (ii) 95,815 prefunded units (the “Prefunded Units”), each consisting of one prefunded warrant

to purchase one share of common stock (each, a “Prefunded Warrant”), two Class C Warrants and one Class

The Common Units were sold at a price of $ 81.50 per unit and the Prefunded Warrants were sold at a price of $ 81.495 per

As of December 31, 2024, all Prefunded Warrants have been exercised in full.

to an engagement letter dated June 6, 2024, by and between the Company and Aegis, the Company paid Aegis a total cash fee of $ 743,750

equal to 8.5 % of the gross proceeds received in the June 2024 Offering.

gross proceeds to the Company from the June 2024 Offering were $ 8,569,075 .

The Company incurred offering costs of $ 1,133,419 .

2024 Bridge Note Financing

May 31, 2024, the Company entered into a Note Purchase Agreement with an accredited investor (the “NPA”), and a Securities

Purchase Agreement with three accredited investors (the “SPA”).

This transaction closed on June 3, 2024.

Debt issuance

costs related to the NPA and SPA totaled $ 212,654 .

Under the terms of the NPA, the investor provided the Company with a $ 1,000,000 cash

subscription in exchange for the issuance of a senior secured note (the “Bridge Note”).

As of December 31, 2024, a total

of $ 1,176,470 was repaid to the NPA investor in full satisfaction of the Bridge Note.

The difference between the Bridge Note and

the subscription amount, initially recorded as a discount on the notes, was the result of the discount factor included in the NPA of

approximately 17.6 %.

the terms of the SPA, the three investors agreed to collectively provide the Company with a separate $ 1,000,000 cash subscription

in exchange for the issuance of senior secured notes (the “SPA Notes”), and the collective issuance of 1,451 shares

of the Company’s common stock.

The fair value of the common stock issued in connection with the SPA was $ 307,563 .

As of December

31, 2024, a total of $ 1,111,110 has been repaid to the SPA investors, in full satisfaction of the SPA Notes.

The difference between

the SPA Notes and the subscription amounts, initially recorded as a discount on the SPA Notes, was the result of the discount factor

included in the SPA of 11.11 %.

interest expense recorded on the NPA and SPAs was $ 807,797 for the year ended December 31, 2024, including debt issuance costs related

to the NPA and SPA totaling $ 212,654 .

2024 Offering

January 2, 2024, the Company sold in a public offering (such transaction, the “January 2024 Offering”) (i) 1,344 shares of

the Company’s Common stock, par value $ 0.0001 per share and (ii) prefunded warrants to purchase up to an aggregate 5,386 shares

of Common Stock (the “Prefunded Warrants”).

The Shares and Prefunded Warrants were sold together with warrants to purchase

up to an aggregate of 6,730 shares of Common Stock at an exercise price of $ 520.00 per share (the “January 2024 Warrants”).

The combined public offering price was $ 520.00 per share of Common Stock and related January 2024 Warrant and $ 519.96 per Prefunded Warrant

and related January 2024 Warrant.

of December 31, 2024, all Prefunded Warrants have been exercised in full.

The January 2024 Warrants are exercisable immediately and for

a period of five years following the date of issuance.

to an engagement letter, dated as of August 7, 2023, as amended October 11, 2023 (the “Amended Engagement Letter”), by and

between the Company and the Placement Agent, the Company paid the Placement Agent a total cash fee of $ 245,000 equal to 7.0 % of the gross

proceeds received in the January 2024 Offering.

The Company also paid the Placement Agent in connection with the January Offering a management

fee of $ 35,000 equal to 1.0 % of the gross proceeds raised in the January 2024 Offering and certain expenses incurred in connection with

the January Offering.

In addition, the Company issued to the Placement Agent, warrants to purchase up to an aggregate 471 shares of Common

Stock (the “January 2024 Placement Agent Warrants”), which represents 7.0 % of the aggregate number of shares of Common Stock

and Prefunded Warrants sold in the January 2024 Offering.

The January 2024 Placement Agent Warrants have substantially the same terms

as the January 2024 Warrants, except that the January 2024 Placement Agent Warrants have an exercise price equal to $ 650.00 , or 125 %

of the offering price per share of Common Stock and related January 2024 Warrant sold in the January Offering and expire on the fifth

anniversary from the date of the commencement of sales in the January 2024 Offering.

gross proceeds to the Company from the January 2024 Offering were $ 3,500,000 .

The Company incurred offering costs of $ 711,031 .

2023 Offering

August 24, 2023, the Company entered into a securities purchase agreement with certain institutional and accredited investors (the “Purchase

Agreement”) relating to the registered direct offering and sale of 540 shares of the Company’s common stock at a purchase

price of $ 2,946.00 per share (the “August 2023 Offering”).

a concurrent private placement, the Company also issued to such institutional and accredited investors unregistered warrants to purchase

up to 540 shares of Common Stock (the “Warrants”).

Pursuant to the terms of the Purchase Agreement, for each share of Common

Stock issued in this offering an accompanying Warrant was issued to the purchaser thereof.

Each Warrant is exercisable for one share

of Common Stock (the “August 2023 Warrant Shares”) at an exercise price of $ 2,896.00 per share, is immediately exercisable

upon issuance and will expire five years from the date of issuance.

The Warrants were offered and sold at a purchase price of $ 50.00

per underlying warrant share, which purchase price is included in the offering price per share of Common Stock issued in the Offering

(the “Private Placement”).

to an engagement letter, dated as of August 7, 2023, between the Company and H.C.

Wainwright & Co., LLC (the “Placement Agent”)

the Company paid the placement agent a total cash fee of $ 111,359 equal to 7.0 % of the gross proceeds received in the Offering and the

Private Placement.

The Company also paid the placement agent the management fee equal to $ 15,908 or 1.0 % of the gross proceeds raised

in the Offering and Private Placement, $ 45,000 for non-accountable expenses, and $ 15,950 for clearing fees.

In addition, the Company

issued to the placement agent, warrants to purchase up to 36 shares of Common Stock (the “Placement Agent Warrants”), which

represents 7.0 % of the aggregate number of shares of Common Stock sold in the Offering.

The Placement Agent Warrants have substantially

the same terms as the Warrants, except that the Placement Agent Warrants have an exercise price equal to $ 3,684.00 , or 125 % of the offering

price per share of Common Stock sold in the Offering, and a term of five years from the commencement of the sales pursuant to the Offering.

gross proceeds to the Company from the August 2023 Offering and the August 2023 Private Placement are $ 1,590,840 .

The Company incurred

offering costs of $ 413,544 .

following table summarizes information with regard to warrants outstanding at December 31, 2024:

Shares Exercisable for Weighted

Price Weighted Average

June 2024 Class C Warrants 1,372,586 Common Stock $ 16.30 4.5

January 2024 Common Stock Warrants 6,730 Common Stock $ 520.00 4.0

January 2024 Placement Agent Warrants 471 Common Stock $ 650.00 4.0

August 2023 Common Stock Warrants 540 Common Stock $ 2,896.00 3.6

August 2023 Placement Agent Warrants 36 Common Stock $ 3,684.00 3.6

Class A Warrants 310 Common Stock $ 56,000.00 1.9

Class B Warrants 9 Common Stock $ 80,000.00 1.9

Other Pre-2024 Common Stock Warrants 84 Common Stock $ 27,327.00 1.4

2024 Common Stock Warrants and June 2024 Underwriter Warrants

a part of the June 2024 Offering, the Company issued 214,724 Class C Warrants and 107,362 Class D Warrants.

The Underwriter partially

exercised its over-allotment option with respect to 13,573 Class C Warrants and 6,787 Class D Warrants (the “Over-Allotment Warrants”).

stockholder approval of the issuance of Class C Warrants on August 21, 2024, the Class C Warrants, which had an initial exercise price

of $ 98.00 per share of common stock, were adjusted to be exercisable at an exercise price of $ 16.30 per share (representing 20 % of the

Nasdaq Minimum Price), and the number of shares issuable upon exercise were proportionately adjusted to 1,372,586 shares.

In connection with this reset price and number of Class C Warrants,

we recorded a deemed dividend of $ 9,282,075 based on the excess of the fair value of the modified Class C Warrants over the fair value

of the Class C Warrants before the modification, the effect of which was an increase in the net loss attributable to common shareholders

in the statement of operations for the year ended December 31, 2024.

Warrants may be exercised at any time for a period of five (5) years following the first exercisable date.

Class D Warrants were immediately exercisable at an exercise price of $ 0.0001 per share of common stock for a period of five (5)

years following the date of issuance.

Upon stockholder approval of issuance of Class D Warrants on August 21, 2021, the number of

shares of common stock issuable under the Class D Warrants increased to four shares per warrant for the remaining unexercised Class

D Warrants as the weighted average price of our common stock over a rolling five (5)-trading day period fell below $ 16.30 per share

(representing 20 % of the Nasdaq Minimum Price) following the issuance date.

In connection with this reset price and number of Class

D Warrants, we recorded a deemed dividend of $ 3,940,978 based on the excess of the fair value of the modified Class D Warrants over

the fair value of the Class D Warrants before the modification, the effect of which was an increase in the net loss attributable to

common shareholders in the statement of operations for the year ended December 31, 2024.

As of December 31, 2024, all Class D

Warrants have been exercised and none remain outstanding.

2024, the Company issued 435,377 shares of common stock upon exercise of the June 2024 Class D Warrants.

The Class D Warrants were exercised

on either a cash basis at $ 0.0001 per share exercise price or on a proportional cashless basis.

During the years ended December 31, 2024

and 2023, no other warrants were exercised.

2024 Common Stock Warrants and January 2024 Placement Agent Warrants

part of the January 2024 Offering, the Company issued 6,730 Common Stock Warrants with an exercise price of $ 520.00 per share and 471

Placement Agent Warrants with an exercise price of $ 650.00 per share.

The January 2024 Warrants became exercisable immediately upon issuance

for a period of five years following the date of issuance.

2023 Common Stock Warrants and August 2023 Placement Agent Warrants

part of the August 2023 Offering that occurred during the year ended December 31, 2023, the Company issued 540 Warrants with a purchase

price of $ 2,896.00 per share and 36 Placement Agent Warrants with an exercise price of $ 3,684.00 per share.

Company’s warrants were accounted for as equity classified financial instruments as they meet the requirements for equity

classification under ASC 815, Derivatives and Hedging .

STOCK COMPENSATION

Stock Incentive Plans

In 2018, the Company adopted the 2018

Stock Incentive Plan (the “2018 Plan”) for employees, consultants, and directors.

The 2018 Plan, which is administered by

the Company’s Board of Directors, permits the Company to grant incentive and nonqualified stock options for the purchase of common

stock, and restricted stock awards.

The maximum number of shares of common stock reserved for issuance under the 2018 Plan is 31,472 .

Incentive Plans

2018, the Company adopted the 2018 Stock Incentive Plan (the “2018 Plan”) for employees, consultants, and directors.

2018 Plan, which is administered by the Company’s Board of Directors, permits the Company to grant incentive and nonqualified stock

options for the purchase of common stock, and restricted stock awards.

The maximum number of shares of common stock reserved for issuance

under the 2018 Plan is 79 .

At December 31, 2024 there were 35 shares of common stock available for grant under the 2018 Plan.

On July 6, 2021, the Company’s Board of

Directors and stockholders approved and adopted the Bluejay Diagnostics, Inc.

2021 Stock Plan (the “2021 Plan”).

98,000 shares of common stock were approved to be initially reserved for issuance under the 2021 Stock Plan.

At December 31, 2023 there

were 40,377 shares of common stock available for grant under the 2021 Plan.

Stock Award Activity

The following table summarizes the status of the

Company’s non-vested restricted stock awards for years ended December 31, 2023:

July 6, 2021, the Company’s Board of Directors and stockholders approved and adopted the Bluejay Diagnostics, Inc.

2021 Stock Plan

(the “2021 Plan”).

A total of 245 shares of common stock were approved to be initially reserved for issuance under the 2021

At December 31, 2024 there were 101 shares of common stock available for grant under the 2021 Plan.

Award Activity

following table summarizes the status of the Company’s non-vested restricted stock awards for years ended December 31, 2024:

Restricted Stock Awards

2 unchanged sentences

Outstanding at December, 2024

The following is a summary of stock option activity for the year ended

December 31, 2023:

February 2023, the Company issued 47 fully vested restricted stock units to certain employees in lieu of cash to satisfy their 2022 accrued

bonuses of $ 164,860 .

Of the 47 restricted stock units issued, 16 shares were withheld for tax liabilities with a fair value of $ 57,625 .

The number of restricted stock unit awards issued was determined based on the approved bonus amount divided by the market price of the

Company’s common stock on the date of grant.

Option Plan Summary

following is a summary of stock option activity for the year ended December 31, 2024:

Options Weighted

Share Weighted

Years Aggregate

Outstanding at December 31, 2023 74 $ 14,604 6.7 $ -

2 unchanged sentences

Exercisable at December 31, 2024 64 $ 14,966 5.6 $ -

The weighted average grant date fair

value of options granted during the years ended December 31, 2023 and 2022 was $ 10.60 per share and $ 28.40 per share, respectively.

Company determined the grant-date fair value of stock option awards granted during the years ended December 31, 2023 and 2022 using the

Black-Scholes model with the following assumptions:

weighted average grant date fair value of options granted during the year ended December 31, 2023 was $ 4,240.00 per share.

determined the grant-date fair value of stock option awards granted during the year ended December 31, 2023 using the Black-Scholes model

with the following assumptions:

Risk-free interest rate 3.63 %

1.58 % – 4.35 %

Expected dividend yield 0.00 %

Volatility factor 108.78 %

102.03 % – 107.36 %

Expected life of option (in years) 6.00

Stock-Based Compensation Expense

For the years ended December 31, 2023

and 2022, the Company recorded stock-based compensation expense as follows:

Compensation Expense

the years ended December 31, 2024 and 2023, the Company recorded stock-based compensation expense as follows:

Year ended December 31,

3 unchanged sentences

Total stock-based compensation

At December 31, 2023, there was approximately

$ 38,002 of unrecognized compensation expense related to non-vested stock option awards that are expected to be recognized over a weighted-average

period of 1.16 years.

At December 31, 2023, there was approximately $ 14,060 of unrecognized compensation expense related to non-vested

restricted stock awards that are expected to be recognized over a weighted-average period of 0.75 years.

December 31, 2024, there was approximately $ 1,996 of unrecognized compensation expense related to non-vested stock option awards that

are expected to be recognized over a weighted-average period of 0.83 years.

At December 31, 2024, there was approximately $ 944 of unrecognized

compensation expense related to non-vested restricted stock awards that are expected to be recognized over a weighted-average period

of 0.44 years.

RELATED PARTY TRANSACTIONS

NanoHybrids, LLC

In December 2021, the Company entered

into an agreement with NanoHybrids, LLC (“NanoHybrids”) to utilize the Company’s research and development staff and

laboratory facility when available to perform work for NanoHybrids.

Any hours worked by Company employees for NanoHybrids is billed to

NanoHybrids at a bill rate of the respective employee’s fully burdened personnel cost plus 10 %.

Additionally, the Company may purchase

certain lab supplies for NanoHybrids and rebill these costs to NanoHybrids.

The Company’s Chief Technology Officer is the majority

shareholder of NanoHybrids.

The table below summarizes the amounts earned for the years ended December 31, 2023 and 2022 and balances

due from NanoHybrids as of December 31, 2023 and 2022:

Income from NanoHybrids included in Other Income

Cash receipts from NanoHybrids

As of December 31,

Amounts receivable from NanoHybrids included in Prepaids and Other Current Assets

Toray Industries,

2022, the Company sold five Symphony analyzers to the Company’s business partner, Toray, for $ 249,040 , all of which was paid in

Future sales to Toray are not currently anticipated.

December 2021, the Company entered into an agreement with NanoHybrids, Inc.

(“NanoHybrids”) to utilize the Company’s

research and development staff and laboratory facility when available to perform work for NanoHybrids.

Any hours worked by Company employees

for NanoHybrids is billed to NanoHybrids at a bill rate of the respective employee’s fully burdened personnel cost plus 10 %.

Additionally,

the Company may purchase certain lab supplies for NanoHybrids and rebill these costs to NanoHybrids.

The Company’s Chief Technology

Officer is the majority shareholder of NanoHybrids.

The table below summarizes the amounts earned for the years ended December 31, 2024

and 2023 and balances due from NanoHybrids as of December 31, 2024 and 2023:

from NanoHybrids included in Other Income

receipts from NanoHybrids

of December 31,

receivable from NanoHybrids included in Prepaids and Other Current Assets

PROPERTY AND EQUIPMENT

Property and equipment consisted of

the following at December 31, 2023 and 2022:

and equipment consisted of the following at December 31, 2024 and 2023:

Depreciable lives 2024 2023

Construction in process $ 1,351,179 $ 1,052,822

Furniture, fixtures, and equipment

Lab equipment

Leasehold improvements

Life of lease

accumulated depreciation

Furniture, fixtures, and equipment 3 - 5 years 136,312 141,164

Software 3 years 4,457 4,457

Lab equipment 3 - 5 years 173,268 1,287,783

Leasehold improvements Life of lease 43,231 43,231

1,708,447 2,529,457

accumulated depreciation ( 194,952 ) ( 1,243,716 )

Property and equipment, net $ 1,513,495 $ 1,285,741

The Company reviews long-lived assets

for impairment when events, expectations, or changes in circumstances indicate that the asset’s carrying value may not be recoverable.

As a result of this review in 2023, the Company revised the useful life of certain lab equipment in the first quarter of 2023 due to a

change in expectations of the time the equipment will be used which resulted in approximately $ 382,795 of additional depreciation recorded

in the year ended December 31, 2023.

The Company primarily enters into lease arrangements

for office, laboratory space, and copiers.

A summary of supplemental lease information is as follows:

Company reviews long-lived assets for impairment when events, expectations, or changes in circumstances indicate that the asset’s

carrying value may not be recoverable.

As a result of this review in 2023, the Company revised the useful life of certain lab equipment

in the first quarter of 2023 due to a change in expectations of the time the equipment will be used which resulted in approximately $ 382,795

of additional depreciation recorded in the year ended December 31, 2023.

in process consists of symphony cartridge manufacturing equipment.

There are no commitments in place to complete construction in process

as of December 31, 2024.

Company primarily enters into lease arrangements for office, laboratory space, and copiers.

A summary of supplemental lease information

is as follows:

Weighted average remaining lease term - operating leases (in years) 2.1 2.9

Weighted average remaining lease term - finance leases (in years) 3.1 4.1

Weighted average discount rate

Weighted average discount rate – operating leases 7.0 % 7.0 %

Weighted average discount rate – finance leases 7.0 % 7.0 %

Operating cash flows from operating leases $ 177,081 $ 174,640

Operating cash flows from finance leases $ 1,053 $ 1,305

A summary of the Company’s lease assets and liabilities are as

summary of the Company’s lease assets and liabilities are as follows:

Operating lease right-of-use asset $ 209,788 $ 333,267

6 unchanged sentences

Total lease liabilities $ 235,623 $ 370,105

The following table reconciles the undiscounted lease liabilities to

the total lease liabilities recognized on the consolidated balance sheet as of December 31, 2023:

following table reconciles the undiscounted lease liabilities to the total lease liabilities recognized on the consolidated balance sheet

as of December 31, 2024:

Operating Lease

3 unchanged sentences

COMMITMENTS AND CONTINGENCIES

Purchase Commitments

October 2022, the Company entered into a non-cancelable purchase commitment with an international materials vendor for items needed for

both development of the Symphony product line and also to resell to its customers.

This agreement commits the Company to purchase approximately

$ 800,000 in goods, of which 50 % was prepaid in 2022, with the remainder being paid in 2023.

All goods have been received under

this arrangement as of December 31, 2023.

Company had multiple open purchase commitments with its primary contract manufacturing organization in Japan related to the buildout of

a manufacturing line for the IL-6 cartridges for the Symphony device as of December 31, 2022 for approximately $ 375,000 .

During the year

ended December 31, 2023, the Company purchased all items related to these purchase commitments.

Separation Agreement

Under the terms of a separation agreement with

Kenneth Fisher, the Company’s former Chief Financial Officer, the Company has agreed to compensate Mr.

Fisher $ 240,000 (representing

six months of base salary and the pro rata amount of Mr.

Fisher’s 2023 target bonus).

The payments of such amounts are

subject to the compliance by Mr.

Fisher of certain ongoing covenants with respect to confidentiality, cooperation and other matters.

Fisher departed from the Company on September 26, 2023, and the Company has recorded a severance liability of $ 240,000 , which was included

in accrued severance in the amount of $ 150,000 and in accrued bonuses of $ 90,000 .

The Company has paid Mr.

Fisher $ 80,000 as of

December 31, 2023, resulting in an remaining accrual of $ 160,000 which has been included accrued expenses and other current liabilities

on the Company’s Consolidated Balance Sheets as of December 31, 2023.

Minimum Royalties

As required under the License Agreement

(see Note 3), following the first sale of Cartridges, the Company will also make royalty payments to Toray equal to 7.5 % of the net sales

of the Cartridges for a term of 10 years.

A 50 % reduction in the royalty rate applies upon expiry of applicable Toray patents on a product-by-product

and country-by-country basis.

There were no sales of or revenues from the Cartridges through December 31, 2023.

required under the License Agreement (see Note 3), following the first sale of Cartridges, the Company will also make royalty payments

to Toray equal to 7.5 % of the net sales of the Cartridges for a term of 10 years.

A 50 % reduction in the royalty rate applies upon expiry

of applicable Toray patents on a product-by-product and country-by-country basis.

There were no sales of or revenues from the Cartridges

through December 31, 2024.

Indemnification

The Company has certain agreements

with service providers with which it does business that contain indemnification provisions pursuant to which the Company typically agrees

to indemnify the party against certain types of third-party claims.

The Company accrues for known indemnification issues when a loss is

probable and can be reasonably estimated.

The Company would also accrue for estimated incurred but unidentified indemnification issues

based on historical activity.

As the Company has not incurred any indemnification losses to date, there were no accruals for or expenses

related to indemnification issues for any period presented.

Company has certain agreements with service providers with which it does business that contain indemnification provisions pursuant to

which the Company typically agrees to indemnify the party against certain types of third-party claims.

The Company accrues for known

indemnification issues when a loss is probable and can be reasonably estimated.

The Company would also accrue for estimated incurred

but unidentified indemnification issues based on historical activity.

As the Company has not incurred any indemnification losses to date,

there were no accruals for or expenses related to indemnification issues for any period presented.

SUPPLEMENTAL BALANCE SHEET INFORMATION

Prepaid expenses and other current

assets consist of the following:

expenses and other current assets consist of the following:

Prepaid insurance

2 unchanged sentences

Total prepaid expenses and other current assets

Accrued expenses and other current

liabilities consist of the following:

expenses and other current liabilities consist of the following:

Accrued personnel costs

2 unchanged sentences

Accrued legal fees

Accrued clinical trial expenses

Accrued board of director fees

Accrued other

Total accrued expenses and other current liabilities

No provision for federal income taxes

has been recorded for the years ended December 31, 2023 and 2022 due to net losses and the valuation allowance established.

Significant components of the Company’s

deferred tax assets are as follows:

provision for federal income taxes has been recorded for the years ended December 31, 2024 and 2023 due to net losses and the valuation

allowance established.

components of the Company’s deferred tax assets are as follows:

As of December 31,

8 unchanged sentences

Deferred tax asset, net of allowance

A reconciliation of the statutory tax

rates and the effective tax rates for the years ended December 2023 and 2022 is as follows:

reconciliation of the statutory tax rates and the effective tax rates for the years ended December 2024 and 2023 is as follows:

Year Ended December 31,

2 unchanged sentences

Change in valuation allowance

Permanent differences

Permanent differences and other

Effective tax rate

The Company regularly assesses the need for a

valuation allowance against its deferred tax assets.

In making that assessment, the Company considers both positive and negative evidence

related to the likelihood of realization of the deferred tax assets to determine, based on the weight of available evidence, whether it

is more-likely-than-not that some or all of the deferred tax assets will not be realized.

In assessing the realizability of deferred tax

assets, the Company considers taxable income in prior carryback years, as permitted under the tax law, forecasted taxable earnings, tax

planning strategies, and the expected timing of the reversal of temporary differences.

This determination requires significant judgment,

including assumptions about future taxable income that are based on historical and projected information and is performed on a jurisdiction-by-jurisdiction

The Company continues to maintain a full valuation

allowance against its deferred tax assets.

During the years ended December 31, 2023 and 2022, management assessed the positive and negative

evidence in its operations, and concluded that it is more likely than not that its deferred tax assets as of December 31, 2023 and 2022

will not be realized given the Company’s history of operating losses.

The valuation allowance against deferred tax assets increased

by approximately $ 3.1 million and $ 2.7 million during 2023 and 2022, respectively, related to a full valuation allowance recorded against

capitalized research expenditures, additional net operating losses and tax credits generated in the year.

As of December 31, 2023, the Company had

federal net operating losses of approximately $ 16.8 million.

The Company’s federal net operating losses incurred prior to 2018 totaling

$ 713,000 expire through 2037, while its federal net operating losses incurred in 2018 to 2023 totaling approximately $ 16.1 million can

be carried forward indefinitely but are limited to 80 % utilization against future taxable income each year.

As of December 31, 2023, the Company

had post-apportioned state net operating losses of approximately $ 16.3 million that can generally be carried forward 20 years and will

expire at various dates through 2043.

As of December 31, 2022, the Company had post-apportioned Massachusetts net operating losses

of approximately $ 10.8 million that can generally be carried forward 20 years and will expire at various dates through 2042.

SUBSEQUENT EVENTS

January 2024 Offering

On January 2, 2024, the Company sold in a public

offering (such transaction, the “January 2024 Offering”) (i) 537,768 shares of the Company’s Common stock, par value

$ 0.0001 per share and (ii) prefunded warrants to purchase up to an aggregate 2,154,540 shares of Common Stock (the “Prefunded Warrants”).

The Shares and Prefunded Warrants were sold together with warrants to purchase up to an aggregate of 2,692,308 shares of Common Stock

at an exercise price of $ 1.30 per share (the “January 2024 Warrants”).

The combined public offering price was $ 1.30 per share

of Common Stock and related January 2024 Warrant and $ 1.2999 per Prefunded Warrant and related January 2024 Warrant.

The Company intends

to use the net proceeds from the January Offering to fund matters related to obtaining FDA approval (including clinical studies related

thereto), as well as for other research and development activities, and for general working capital needs.

The Prefunded Warrants are immediately exercisable

and may be exercised at any time until all of the Prefunded Warrants are exercised in full The January 2024 Warrants are exercisable immediately

upon issuance for a period of five years following the date of issuance.

Pursuant to an engagement letter, dated as of

August 7, 2023, as amended October 11, 2023 (the “Amended Engagement Letter”), by and between the Company and the Placement

Agent, the Company paid the Placement Agent a total cash fee of $ 245,000 equal to 7.0 % of the gross proceeds received in the January 2024

The Company also paid the Placement Agent in connection with the January Offering a management fee of $ 35,000 equal to 1.0 %

of the gross proceeds raised in the January 2024 Offering and certain expenses incurred in connection with the January Offering.

the Company issued to the Placement Agent, warrants to purchase up to an aggregate 188,462 shares of Common Stock (the “January

2024 Placement Agent Warrants”), which represents 7.0 % of the aggregate number of shares of Common Stock and Prefunded Warrants

sold in the January 2024 Offering.

The January 2024 Placement Agent Warrants have substantially the same terms as the January 2024 Warrants,

except that the January 2024 Placement Agent Warrants have an exercise price equal to $ 1.6250 , or 125 % of the offering price per share

of Common Stock and related January 2024 Warrant sold in the January Offering and expire on the fifth anniversary from the date of the

commencement of sales in the January 2024 Offering.

Concurrently with the closing of the January 2024

Offering, certain purchasers have elected to exercise Prefunded Warrants to purchase 174,770 shares of Common Stock.

Nasdaq Notification

On February 28, 2024, the Company received

a notification letter from the Nasdaq Listing Qualifications Staff of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the

Company that the closing bid price for its common stock had been below $ 1.00 for the previous 30 consecutive business days and that

the Company therefore is not in compliance with the minimum bid price requirement for continued inclusion on the Nasdaq Capital Market

under Nasdaq Listing Rule 5550(a)(2).

The notification has no immediate effect on the listing of the Company’s common stock on the

Nasdaq Capital Market.

The Company intends to take all reasonable measures available to achieve compliance and allow for continued listing

on the Nasdaq Capital Market.

However, there can be no assurance that the Company will be able to regain compliance with the minimum bid

price requirement or will otherwise be in compliance with other Nasdaq listing criteria.

Company regularly assesses the need for a valuation allowance against its deferred tax assets.

In making that assessment, the Company

considers both positive and negative evidence related to the likelihood of realization of the deferred tax assets to determine, based

on the weight of available evidence, whether it is more-likely-than-not that some or all of the deferred tax assets will not be realized.

In assessing the realizability of deferred tax assets, the Company considers taxable income in prior carryback years, as permitted under

the tax law, forecasted taxable earnings, tax planning strategies, and the expected timing of the reversal of temporary differences.

This determination requires significant judgment, including assumptions about future taxable income that are based on historical and

projected information and is performed on a jurisdiction-by-jurisdiction basis.

Company continues to maintain a full valuation allowance against its deferred tax assets.

During the years ended December 31, 2024 and

2023, management assessed the positive and negative evidence in its operations, and concluded that it is more likely than not that its

deferred tax assets as of December 31, 2024 and 2023 will not be realized given the Company’s history of operating losses.

valuation allowance against deferred tax assets increased by approximately $ 2.3 million and $ 3.1 million during 2024 and 2023, respectively,

related to a full valuation allowance recorded against capitalized research expenditures, additional net operating losses and tax credits

generated in the year.

of December 31, 2024, the Company had federal net operating losses of approximately $ 23.4 million.

The Company’s federal net

operating losses incurred prior to 2018 totaling $ 713,000 expire through 2037, while its federal net operating losses incurred in 2018

to 2024 totaling approximately $ 22.7 million can be carried forward indefinitely but are limited to 80 % utilization against future taxable

income each year.

As of December 31, 2023, the Company had federal net operating losses of $ 16,772,000 , which may be available

to offset future federal income tax liabilities.

of December 31, 2024, the Company had post-apportioned state net operating losses of approximately $ 22.8 million that can generally

be carried forward 20 years and will expire at various dates through 2044.

As of December 31, 2023, the Company had post-apportioned

Massachusetts net operating losses of approximately $ 16.3 million that can generally be carried forward 20 years and will expire at various

dates through 2043.

of December 31, 2024, the Company had $ 569,000 and $ 307,000 of federal and state research and development credits, respectively,

which will expire at various dates through 2044.

As of December 31, 2023, the Company had $ 381,000 and $ 208,000 of federal and state

research and development credits, respectively, which will expire at various dates through 2043.

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 9A. Controls and Procedures