What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2022-03-28 compared with 2021-03-31 · 25 added, 239 removed, 10 unchanged (96% of the section changed)

for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

common stock began trading on Nasdaq under the symbol “HJLI”

on May 31, 2018.

Our warrants issued as part of the units

consisting of one share of common stock and one warrant to purchase commons stock sold to the public through the initial public

offering began trading on Nasdaq under the symbol “HJLIW”

on May 31, 2018.

March 25, 2021, the closing price per share of our common stock and listed warrants were $6.68 and $0.35,

respectively as reported on The Nasdaq Capital Market.

We had approximately 79 stockholders of record and 1 listed

warrant holder of record as of March 25, 2021.

On March 25, 2021 there were 8,503,636 shares of our common

stock issued and outstanding and 69,000 shares of common stock issuable upon exercise of listed warrants issued and outstanding.

In addition, we believe that a significant number of beneficial owners of our common stock and listed warrants hold their shares

in street name.

for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

common stock trades on Nasdaq under the symbol “NVNO.” Our listed warrants trade on Nasdaq under the symbol “NVNOW.”

March 24, 2022, the closing price per share of our common stock and listed warrants were $5.00 and $0.19, respectively

as reported on The Nasdaq Capital Market.

We had approximately 76 stockholders of record and 1 listed warrant holder of record

as of March 24, 2022.

On March 24, 2022 there were 9,469,850 shares of our common stock issued and outstanding

and 69,000 shares of common stock issuable upon exercise of listed warrants issued and outstanding.

In addition, we believe that a significant

number of beneficial owners of our common stock and listed warrants hold their shares in street name.

Authorized for Issuance under Equity Compensation Plan

following information is as of December 31, 2021.

Plan Category

securities to

be issued upon

Weighted-average

exercise price of

granted restricted

stock unit awards

available for

compensation plans approved by security holders

compensation plans not approved by security holders

Equity compensation plans approved by security holders

Equity compensation plans not approved by security holders

have never declared or paid any cash dividends on our capital stock.

We do not anticipate paying cash dividends on our common

stock in the foreseeable future.

We currently intend to retain all available funds and any future earnings to support our operations

and finance the growth and development of our business.

Any future determination related to our dividend policy will be made at

the discretion of our board of directors and will depend upon, among other factors, our results of operations, financial condition,

capital requirements, contractual restrictions, business prospects, the requirements of current or then-existing debt instruments

and other factors our board of directors may deem relevant.

We do not anticipate paying cash dividends on our common stock in

the foreseeable future.

We currently intend to retain all available funds and any future earnings to support our operations and finance

the growth and development of our business.

Any future determination related to our dividend policy will be made at the discretion of

our board of directors and will depend upon, among other factors, our results of operations, financial condition, capital requirements,

contractual restrictions, business prospects, the requirements of current or then-existing debt instruments and other factors our board

of directors may deem relevant.

Sales of Unregistered Securities

1 unchanged sentence

Financial Data

a “smaller reporting company”

as defined by Item 10 of Regulation S-K, the Company is not required to provide this

Management’s

Discussion and Analysis of Financial Condition and Results of Operations

following discussion should be read in conjunction with our consolidated financial statements and the related notes contained

elsewhere in this Annual Report on Form 10-K and in our other Securities and Exchange Commission filings.

The following discussion

may contain predictions, estimates, and other forward-looking statements that involve a number of risks and uncertainties, including

those discussed under “Risk Factors”

and elsewhere in this Annual Report on Form 10-K.

These risks could cause our

actual results to differ materially from any future performance suggested below.

Jaffe Laboratories, Inc.

is a medical device company developing tissue based solutions that are designed to be life sustaining

or life enhancing for patients with cardiovascular disease, and peripheral arterial and venous disease.

The Company’s products

are being developed to address large unmet medical needs by either offering treatments where none currently exist or by substantially

increasing the current standards of care.

Our products which we are developing include:

the VenoValve ®

a porcine based device to be surgically implanted in the deep venous system of the leg to treat a debilitating condition called

chronic venous insufficiency (“CVI”);

and the CoreoGraft ®

, a bovine based conduit to be used to revascularize

the heart during coronary artery bypass graft (“CABG”) surgeries.

Both of these products are currently

being developed for approval by the U.S.

Food and Drug Administration (“FDA”).

Our current senior management team

has been affiliated with more than 50 products that have received FDA approval or CE marking.

We currently lease a 14,507 sq.

manufacturing facility in Irvine, California, where we manufacture products for our clinical trials and which has previously

been FDA certified for commercial manufacturing of product.

of our products will be required to successfully complete significant clinical trials to demonstrate the safety and efficacy of

the product before it will be able to be approved by the FDA.

of Operations

of the year ended December 31, 2020 to the year ended December 31, 2019

reported net losses of $9,135,486 and $7,625,397 for the years ended December 31, 2020 and 2019, respectively, representing an

increase in net loss of $1,510,089 or 20%, resulting from, as described in further detail below, an increase in operating

expenses of $2,017,393, a loss on other expenses of $215,906, a decrease of $46,176 in interest income, net, and a decrease of

$31,243 in royalty income, partially offset by a decrease in the loss on impairment of intangible assets of $588,822 and an increase

in the gain on the change in fair value of derivative liabilities of $211,807.

were no revenues earned during the year ended December 31,

Revenue during the year ended December 31, 2019 was $31,243 as a result of royalty income.

Royalty income

was earned in 2019 pursuant to the terms of our March 2016 asset sale agreement with LeMaitre Vascular, Inc., which three-year

term ended on March 18, 2019.

Since March 18, 2019, we no longer generate royalty revenue and we do not expect to generate any

other royalty revenues until one of our product candidates secure regulatory approval and is licensed or otherwise marketed, if

a developmental stage company, our revenue, if any, is expected to be diminutive and dependent on our ability to commercialize

our product candidates.

General and Administrative Expenses

the year ended December 31, 2020, selling, general and administrative expenses were flat, showing a small decrease of $28,736

or 1%, to $4,882,877 from $4,911,613 for the year ended December 31, 2019.

This is the net of increases in legal expense of $223,000

primarily related to the contemplated merger with Catheter Precision that the Company did not move forward with, increased

compensation expense of $191,000 due to personnel changes and a management bonus in 2020, and an increase in insurance expense

of $187,000 primarily from the Company’s D&O insurance, offset by a decrease in share based compensation of $246,000

as 2019 included expenses related to equity granted in a settlement with a consultant, a $181,000 decrease in travel expenses

due to pandemic related travel restrictions in 2020, a $94,000 decrease in outside services, and an $109,000

decrease in other office expense due to fewer personnel in the office during portions of the 2020 year.

and Development Expenses

the year ended December 31, 2020, research and development expenses increased by $2,046,129 or 93%, to $4,252,249 from $2,206,120

for the year ended December 31, 2020.

The increase is primarily due to $500,000 for software to manage compliance reporting and

risk management for the VenoValve pivotal trial, $411,000 for the Good Lab Practices (GLP) animal safety study related

to the IDE submission to the FDA, $102,000 for the VenoValve first in man study which continued into 2020 from 2019, $155,000

for a regulatory study also related to the IDE submission, $254,000 in increased lab supplies in preparation for the IDE study,

$50,000 for consultants related to the GLP animal study and regulatory matters $300,000 to manage compliance reporting and

risk management of the Coreograft clinical study, $112,000 for the Coreograft first-in man study started in 2020, and increased

salaries and benefits expenses of $143,000 due to additional personnel hired in 2020.

(Income) Expense, Net

the year ended December 31, 2020, interest income, net decreased by $46,176 or 93%, to $3,739 in interest income, net from $49,915

in interest income, net for the year ended December 31, 2019, due to lower interest rates and lower investable balances

in 2020 as compared to 2019.

Interest income of $3,739 and $50,848 was earned during the year ended December 31, 2020 and 2019,

respectively.

in Fair Value of Derivative Liability

the year ended December 31, 2020, we recorded a gain on the change in fair value of derivative liabilities of $211,807.

Our derivative

liabilities were related to warrants issued in connection with our Bridge Offering.

on Impairment

May 10, 2013, the Company purchased United States Patent 7,815,677, “lntraparietal Aortic Valve Reinforcement Device and

a Reinforced Biological Aortic Valve”

from Leman Cardiovascular, S.A, which protects the critical design components and

function relationships unique to the Company’s bio-prosthetic heart valve (“BHV”).

The BHV is a bioprosthetic,

pig heart valve designed to function like a native heart valve and early clinical testing has demonstrated that the BHV may be

suitable for the pediatric population, as it accommodates for the growth concomitant with the patient.

accordance with Accounting Standards Codification 360-10 - Impairment of Long-Lived and Disposable Assets, the Company is required

to test for impairment if certain criteria are present.

The Company determined during the fourth quarter 2019 that based on limited

R&D resources that are currently devoted to the development of the VenoValve and CoreoGraft products, it unlikely to continue

the development of the BHV in the near future.

Therefore, the Company recorded an impairment loss of $588,822, equal to the remaining

unamortized value of the BHV as of December 31, 2019.

We did not record any impairment loss in 2020.

expenses in 2020 primarily consisted of a $33,664 charge for warrants to purchase 6,400 shares of common stock issued to

a consultant, a $122,200 expense for warrants issued to certain participants in the exchange of preferred stock for common stock,

and a $32,240 expense for repricing of warrants issued to the placement agent in the Company’s February 2020 private placement.

and Capital Resources

have incurred losses since inception and negative cash flows from operating activities for the year ended December 31, 2020.

inception, we have funded our operations primarily through our IPO, private and public offerings of equity and private placement

of convertible debt securities as well as modest revenues from royalties, contract research and sales of the ProCol Vascular Bioprosthesis.

cash used in operating activities for the year ended December 31, 2020 increased by $1,780,810 or 30%, to $7,677,210 from $5,896,400

for the year ended December 31, 2019 primarily as a result of the higher net loss of $9,135,486 in 2020 as compared

to $7,625,397 in 2019, an increase of $1,510,089, and decreases in in operating assets and liabilities for the year ended

December 31, 2020 as compared to 2019.

cash used in investing activities for the year ended December 31, 2020 decreased by $183,600 or 50% to $180,291 from $363,891

for the year ended December 31, 2019 as a result of the decrease in our purchase of property and equipment.

Purchase of property and equipment for the year ended December 31, 2020 was $180,291 and primarily consisted of approximately

$123,000 for lab and test equipment, and $52,000 for other computer equipment and software.

Purchase of property and equipment

for the year ended December 31, 2019 was $363,891 and primarily consisted of approximately $210,000 for software to manage compliance,

reporting and risk management of the VenoValve clinical study, approximately $120,000 for Hydrodynamic Test System for measuring

characteristics of the VenoValve, approximately $24,000 for computer equipment and software and approximately $11,000 for engineering

design software.

The software purchased to manage compliance reporting and risk management provides live access, tracking and

multiple project management reports to enhance study data and metrics reporting in those studies.

cash provided by financing activities for the year ended December 31, 2020 increased by $9,437,867 or 167% to $15,074,799 from

$5,636,932 for the year ended December 31, 2019.

2020, the Company raised an aggregate of $14,762,099 in net proceeds in private and public placements of its common stock and

of its preferred stock.

During 2020, the Company raised $570,341 in net proceeds in a private placement of its common stock,

$1,358,102 in net proceeds in a private placement of its Series C Convertible Preferred Stock, $9,847,901 in net proceeds in public

offerings of its common stock, $2,985,755 in net proceeds from warrant exercises for its common stock, and $312,700 from a loan

pursuant to the Paycheck Protection Program under the CARES Act.

2019, the Company raised $2,317,276 in net proceeds in the private placement offering of its common stock to certain accredited

investors, and $3,319,656 in net proceeds in the public follow-on offering of its common stock.

February 11, 2021, the Company raised approximately $38,143,000 in a public offering of its common stock and warrants to purchase

common stock resulting in an immediate and substantial improvement in our liquidity.

measure our liquidity in a variety of ways, including the following:

(excluding restricted cash)

capital (deficiency)

upon our cash and working capital as of December 31, 2020, and the proceeds from the offering closed on February 11, we have sufficient

capital resources to meet our obligations as they become due within one year after the date of this Annual Report and sustain

Sheet Arrangements

a “smaller reporting company”

as defined by Item 10 of Regulation S-K, we are not required to provide the information

requested by paragraph (a)(5) of this Item.

Accounting Policies and Estimates

of Presentation

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

United States of America (“GAAP”).

preparation of financial statements in conformity with accounting principles generally accepted in the United States of America

requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures

of contingent liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the

reporting periods.

Actual results could differ from these estimates.

Significant estimates and assumptions include the valuation

allowance related to the Company’s deferred tax assets, and the valuation of warrants and derivative liabilities.

investments over which the Company exercises significant influence, but does not control, are accounted for using the equity method,

whereby investment accounts are increased (decreased) for the Company’s proportionate share of income (losses), but investment

accounts are not reduced below zero.

Company holds a 28.0% ownership investment, consisting of founders’

shares acquired at nominal cost, in HJLA.

To date, HJLA

has recorded cumulative losses.

Since the Company’s investment is recorded at $0, the Company has not recorded its proportionate

share of HJLA’s losses.

If HJLA reports net income in future years, the Company will apply the equity method only after

its share of HJLA’s net income equals its share of net losses previously incurred.

Company recognizes revenue when goods or services are transferred to customers in an amount that reflects the consideration which

it expects to receive in exchange for those goods or services.

Revenue is recognized from contracts with customers either at a

“point in time”

or “over time”, depending on the facts and circumstances of the arrangement that the Company

evaluates using the following five-step analysis:

(i) identification of contract with customer; (ii) determination of performance

obligations; (iii) measurement of the transaction price; (iv) allocation of the transaction price to the performance

obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

following table summarizes the Company’s revenue recognized in the accompanying statements of operations:

the Years Ended

income was earned pursuant to the terms of our March 2016 asset sale agreement with LeMaitre Vascular, Inc., which three-year

term ended on March 18, 2019.

After March 18, 2019, we will not receive any royalty revenue from LeMaitre Vascular, Inc.

on Remaining Performance Obligations and Revenue Recognized from Past Performance

about remaining performance obligations pertaining to contracts that have an original expected duration of one year or less is

not disclosed.

The transaction price allocated to remaining unsatisfied or partially unsatisfied performance obligations with

an original expected duration exceeding one year was not material at December 31, 2020.

timing of our revenue recognition may differ from the timing of payment by our customers.

A receivable is recorded when revenue

is recognized prior to payment and the Company has an unconditional right to payment.

Alternatively, when payment precedes the

provision of the related services, deferred revenue is recorded until the performance obligations are satisfied.

The Company had

deferred revenue of $33,000 as of December 31, 2020 and December 31, 2019 related to cash received in advance for contract research

and development services pursuant to the HJLA Agreement.

Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award.

The fair value of the award is measured on the grant date and recognized over the period services are required to be provided

in exchange for the award, usually the vesting period.

Forfeitures of unvested stock options are recorded when they occur.

Concentrations

Company maintains cash with major financial institutions.

Cash held in United States bank institutions is currently insured by

the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 at each institution.

There were aggregate uninsured

cash balances of $9,084,584 and $1,867,286 as of December 31, 2020 and 2019, respectively.

the year ended December 31, 2019, 100% of the Company’s revenues were from royalties earned from the sale of product by

The three-year Post-Acquisition Supply Agreement from which the Company earned royalty from the sale of product by LeMaitre

ended on March 18, 2019.

discuss events that have occurred after the balance sheet date through the date the financial statements are issued in

Note 17 to the Financial Statements.

Accounting Pronouncements

discuss the effect of recently issued accounting pronouncements in Note 3 to the Financial Statements.

and Qualitative Disclosure About Market Risk

a “smaller reporting company”

as defined by Item 10 of Regulation S-K, we are not required to provide information

required by this Item.

Statements and Supplementary Data

see the financial statements beginning on page F-1 following the signature pages in this Annual Report on Form 10-K and incorporated

herein by reference.

in and Disagreements with Accountants on Accounting and Financial Disclosure

a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

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 5. Market for Registrant’s Common Equity