enVVeno Medical Corp 10-K

ITEM 9A. Controls and Procedures Evaluation of Controls and Procedures Our management carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer (who is our Principal Executive Officer) and our Chief Financial Officer (who is our Principal Financial Officer and Principal Accounting Officer), of the effectiveness of the design of our disclosure controls and procedures (as defined by Exchange Act Rules 13a-15(e) or 15d-15(e)) as of December 31, 2021, pursuant to Exchange Act Rule 13a-15(b). Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2021 to provide reasonable assurance 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 management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure and are effective to provide reasonable assurance that such information is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission’s rules and forms. Inherent Limitations on Effectiveness of Controls It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system will be met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems, there is only reasonable assurance that our controls will succeed in achieving their goals under all potential future conditions. Management’s Report on Internal Control Over Financial Reporting There were changes in our internal control over financial reporting identified in connection with the evaluation required by Exchange Act Rule 13a-15(d) during the quarter ended December 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. The change was to remediate and eliminate our previously disclosed material weakness over reporting of complex financial transactions. Management, including the principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error 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 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 internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles. Under the supervision and with the participation of our management, including the principal executive officer and principal financial officer, we conducted an evaluation as to the effectiveness of our internal control over financial reporting as of December 31, 2021. In making this assessment, our management used the criteria for effective internal control set forth by the Committee of Sponsoring Organizations of the Treadway Commission in the 2013 Internal Control – Integrated Framework. Based on this assessment, our management concluded that our internal control over financial reporting was effective as of December 31, 2021. This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s independent registered public accounting firm pursuant to a permanent exemption of the Commission that permits the Company to provide only management’s report in this Annual Report on Form 10-K. Accordingly, our management’s assessment of the effectiveness of our internal control over financial reporting as of December 31, 2021 has not been audited by our auditors, Marcum LLP. Item 9B. Other Information Not Applicable. Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections Not Applicable. 34 PART III ITEM 10. Directors, Executive Officers and Corporate Governance Listed below are the names of the directors and executive officers of the Company, their ages as of the date of this Annual Report, their positions held and the year they commenced service with the Company. Name Age Position(s) Held Year of Service Commencement Robert A. Berman 59 Director, Chief Executive Officer 2018 Craig Glynn 60 Chief Financial Officer and Treasurer 2020 Dr. Francis Duhay 61 Director 2018 Dr. Sanjay Shrivastava 54 Director 2018 Matthew M. Jenusaitis 60 Director 2019 Robert C. Gray 75 Director 2019 Marc H. Glickman, M.D. 73 Senior Vice President and Chief Medical Officer 2016 Robert A. Berman Robert Berman has served as our Chief Executive Officer and a member of our Board of Directors since April of 2018. Mr. Berman has over 25 years of experience in a broad variety of areas including healthcare, finance, acquisitions, marketing, compliance, turnarounds, and the development and licensing of emerging technologies. From September 2012 until July 2017, he served as the President, Chief Executive Officer, and a member of the Board of Directors of ITUS Corporation (now called Anixa Biosciences), which at the time he joined the company was a developer of flat panel display technologies, and under his leadership became a Nasdaq listed cancer therapeutics company. From 2000 to March 2007, Mr. Berman was the Chief Operating Officer and General Counsel of Acacia Research Corporation, where he successfully transitioned the company from being an incubator of internet startups into a preeminent, publicly traded company for licensing and enforcing patented technologies with a market cap exceeding $2 billion. Mr. Berman started his career at the law firm of Blank Rome. Mr. Berman has a B.S. in Entrepreneurial Management from the Wharton School of the University of Pennsylvania and holds a J.D. from the Northwestern University School of Law, where he is an adjunct faculty member. We believe that Mr. Berman is qualified to serve as a member of our board of directors because of his experience in a broad variety of areas including healthcare, finance, acquisitions, marketing, compliance, turnarounds, and the development and licensing of emerging technologies. Dr. Francis Duhay has served as member of our board of directors since October 2018. A trained cardiac and thoracic surgeon, Dr. Duhay has served the President and Chief Operating officer of Aegis Surgical Inc. and Atrius Inc., makers of cardiac accessory devices, since 2016, and as a Partner in K5_Ventures, an early stage venture fund since 2017. Dr. Duhay is the former Chief Medical Officer at Edwards Life Sciences, a world leader in heart valve products, where he led medical and clinical affairs for transcatheter and surgical heart valves. During his tenure at Edwards Life Sciences, from 2008 to 2016, Dr. Duhay led the preparation and submission, and ultimate regulatory approval, of two FDA Premarket Approval (PMA) applications for transcatheter and surgical heart valve therapies and was responsible for the design and execution of the applicable clinical trials. From April 2008 to October 2011, Dr. Duhay was also the Vice President and General Manager of the Ascendra™ transcatheter heart valve business unit at Edwards, where he grew the unit from sixteen to eighty employees and contributed to annual growth in sales from $3 million to $250 million. From 1998 to 2003, Dr. Duhay served as the Chief of the Department of Cardiothoracic Surgery and Cardiology at Kaiser Permanente. Dr. Duhay has also served as an industry representative and clinical expert, and a member of the working group for ISO 5840, the international quality standard for the design, development, and testing of heart valves. Dr. Duhay received his MBA from the University of Hawaii - Shidler College of Business and received his board certification for Cardiothoracic Surgery and General Surgery from the Duke University School of Medicine and from the University of California, San Francisco, respectively. We believe that Dr. Duhay is qualified to serve as a member of our board of directors because he is a trained cardiac and thoracic surgeon and former Chief Medical Officer at Edwards Life Sciences. 35 Dr. Sanjay Shrivastava has served as a member of our board of directors since October 2018. He has been involved in developing, commercializing, evaluating, and acquiring medical devices for more than 21 years, including serving in leadership positions in research and development, business development, and marketing at J&J, BTG, plc, Medtronic, Abbott Vascular, and Edwards Life Sciences. He is presently serving as the chief executive officer at Innova Vascular, Inc., a medical device company funded largely via an investment from a publicly traded medical device company. Prior to this, he co-founded BlackSwan Vascular, Inc., which is a clinical stage medical device company and where he serves on the board of directors. He led the strategic alliance for BlackSwan with Sirtex Medical, which was announced in 2020. Dr. Shrivastava worked on several acquisition and investment deals during his roles as a senior director, business development at J&J and a vice president, upstream marketing and strategy at BTG, a medical device and specialty pharmaceutical company with annual revenue of about $800 million. At Medtronic, Dr. Shrivastava was the Director of Global Marketing for the Cardiac and Vascular Group where he helped build the embolization business, from its initiation to a substantial revenue with a very high CAGR over a period of six years. Dr. Shrivastava was a Manager of Research and Development for the peripheral vascular business at Abbott Vascular and a Principal Research and Development Engineer for Trans-Catheter heart valves at Edwards Life Sciences. Dr. Shrivastava received his Bachelor of Science in engineering at the Indian Institute of Technology and a doctorate degree in materials science and engineering from the University of Florida. We believe that Dr. Shrivastava is qualified to serve as a member of our board of directors because of having served in Chief Executive Officer and board of director positions at several medical device start-ups, and leadership positions in research and development, business development, and marketing at Innova Vascular, Inc., BTG, Medtronic, Abbott Vascular, and Edwards Life Sciences. Matthew M. Jenusaitis has served as a member of our board of directors since September 2019. He has over 30 years of health care experience with an emphasis on building and selling companies that develop medical devices to treat vascular diseases. Since March 2015, Mr. Jenusaitis has been a senior administrative executive at the UC San Diego Health System. He currently serves as the Chief Administrative Officer for UCSD’s Moore’s Cancer Center and UCSD Oncology. From June 2009 to March 2015, Mr. Jenusaitis was President and CEO of OCTANe Foundation for Innovation, a non-profit focused on the development of innovation in Orange County, CA. Over the course of his career, Mr. Jenusaitis has been on the board of directors of Pulsar Vascular (2008-2017), which was sold to Johnson and Johnson, Creagh Medical (2008-2015), which was sold to SurModics, and Precision Wire Components (2009-2014), which was sold to Creganna Medical. Mr. Jenusaitis was also a Senior Vice President at ev3 (April 2006 to July 2008), which was sold to Covidian and later purchased by Medtronics. In addition, Mr. Jenusaitis was the President of the Peripheral Division at Boston Scientific (July 2003 to August 2005) and was an Executive in Residence at Warburg Pincus (September 2005 to March 2006). Mr. Jenusaitis has an MBA from the University of California, Irvine, a Masters Degree in Biomedical Engineering from Arizona State University, and a Bachelors Degree in Chemical Engineering from Cornell University. We believe that Mr. Jenusaitis is qualified to serve as a member of our board of directors because of over 30 years of health care experience with an emphasis on building and selling companies that develop medical devices to treat vascular diseases and his prior board experiences. Robert C. Gray has served as a member of our board of directors since September 2019. He had a 20-year career at Highmark, Inc., one of America’s largest health insurance organizations, which serves over 20 million subscribers, and includes Highmark Blue Cross Blue Shield Pennsylvania, Highmark Blue Cross Blue Shield Delaware, and Highmark Blue Cross Blue Shield West Virginia, which he retired from in 2008. While at Highmark, Mr. Gray helped increase revenues to $12.3 billion from $6.9 billion, and helped generate an operating gain of $375 million from an operating loss of $91 million. In addition to being the board chairman, Chief Executive Officer, and President of several of Highmark’s subsidiaries and affiliated companies, Mr. Gray was the Chief Financial Officer of Highmark’s parent company and was the primary contact to Highmark’s board of directors for Highmark’s audit, investment and compensation (incentive plans) committees. His many responsibilities at Highmark included rate setting and reimbursement negotiations. Following Highmark, Mr. Gray co-founded U.S. Holdings LLC (U.S. Implants LLC.), a national distributor of orthopedic implants, and has served as Vice President since 2009. Since 2011, Mr. Gray has also been self-employed as a strategy and financial consultant. Mr. Gray engaged in Postgraduate Studies at the University of North Carolina–Chapel Hill and has an undergraduate degree from Bucknell University. We believe that Mr. Gray is qualified to serve as a member of our board of directors because of his financial and medical reimbursement expertise having served as the Chief Financial Officer at Highmark, Inc., one of America’s largest health insurance organization. Marc H. Glickman, M.D. has served as our Senior Vice President and Chief Medical Officer since May 2016 and served as member of our board of directors from July 2016 to August 2017. In 1981, Dr. Glickman started a vascular practice in Norfolk, Virginia. He established the first Vein Center in Virginia and also created a dialysis access center. He was employed by Sentara Health Care as director of Vascular Services until he retired in 2014. Dr. Glickman is a board certified vascular surgeon. Dr. Glickman received his Doctor of Medicine from Case Western Reserve, in Cleveland, Ohio and completed his residency at the University of Washington, Seattle. He is board certified in Vascular Surgery and was the past president of the Vascular Society of the Americas. He has served on the advisory boards of Possis Medical, Cohesion Technologies, Thoratec, GraftCath, Inc., TVA medical, Austin, Texas. Craig Glynn was hired as our interim Chief Financial Officer in April 2020 and has subsequently been elevated to our fulltime Chief Financial Officer effective January 2021. Mr. Glynn has more than thirty-five years of experience providing financial services to a variety of public and private companies, including in the role as Chief Financial Officer. In 2012, Mr. Glynn founded Edward Thomas Associates, a firm that provides public and private companies with accounting and finance services, including chief financial officer services. Mr. Glynn has been a Managing Director of Edward Thomas Associates since 2012. Mr. Glynn has a proven record of success managing the financial aspects of dynamic organizations either as a member of the management team or in a consulting capacity. He started his career as an auditor with Deloitte and went on to be the CFO and Controller of several technology, manufacturing, and distribution companies. Mr. Glynn earned his BS and MS degrees in Accounting from California State University Northridge. He is a member of the American Institute of CPAs. 36 Family Relationships There are no arrangements between our directors and any other person pursuant to which our directors were nominated or elected for their positions. There are no family relationships between any of our directors or executive officers. Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Exchange Act requires our directors, executive officers and ten percent stockholders to file initial reports of ownership and reports of changes in ownership of our common stock with the Commission. Directors, executive officers and ten percent stockholders are also required to furnish us with copies of all Section 16(a) forms that they file. Based upon a review of these filings, we believe that all required Section 16(a) reports were made on a timely basis during fiscal year 2021. Board Composition Our business and affairs are organized under the direction of our board of directors, which currently consists of five members. Our directors hold office until the earlier of their death, incapacity, removal or resignation, or until their successors have been elected and qualified. Our board of directors does not have a formal policy on whether the roles of a Chief Executive Officer and Chairman of our board of directors should be separate. The primary responsibilities of our board of directors are to provide oversight, strategic guidance, counseling and direction to our management. Our board of directors meets on a regular basis. Our bylaws provide that the authorized number of directors may be changed only by resolution of the board of directors. We have no formal policy regarding board diversity. Our priority in selection of board members is identification of members who will further the interests of our stockholders through his or her established record of professional accomplishment, the ability to contribute positively to the collaborative culture among board members, knowledge of our business and understanding of the competitive landscape. Our amended and restated certificate of incorporation divides our board of directors into three classes, with staggered three-year terms, as follows: Class I Directors (serving until the 2024 Annual Meeting of Stockholders, or until their earlier death, disability, resignation or removal): Dr. Francis Duhay* and Dr. Sanjay Shrivastava* Class II Directors (serving until the 2022 Annual Meeting of Stockholders, or until their earlier death, disability, resignation or removal) : Matthew M. Jenusaitis*, Robert A. Berman Class III Director (serving until the 2023 Annual Meeting of Stockholders, or until his earlier death, disability, resignation or removal) : Robert C. Gray* (*) Independent Director. At each annual meeting of stockholders to be held after the initial classification, the successors to directors whose terms then expire will serve until the third annual meeting following their election and until their successors are duly elected and qualified. The authorized size of our board of directors is currently five members. The authorized number of directors may be changed only by resolution of the board of directors. Any additional directorships resulting from an increase in the number of directors will be distributed between the three classes so that, as nearly as possible, each class will consist of one-third of the directors. This classification of the board of directors may have the effect of delaying or preventing changes in our control or management. Our directors may be removed for cause by the affirmative vote of the holders of at least 66 2/3% of our voting stock. 37 Director Independence The Nasdaq Marketplace Rules require a majority of a listed company’s board of directors to be comprised of independent directors within one year of listing. In addition, the Nasdaq Marketplace Rules require that, subject to specified exceptions, each member of a listed company’s audit, compensation and nominating and corporate governance committees be independent and that audit committee members also satisfy independence criteria set forth in Rule 10A-3 under the Exchange Act. Under Rule 5605(a)(2) of the Nasdaq Marketplace Rules, a director will only qualify as an “independent director” if, in the opinion of our board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In order to be considered independent for purposes of Rule 10A-3 of the Exchange Act, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the board of directors, or any other board committee, accept, directly or indirectly, any consulting, advisory, or other compensatory fee from the listed company or any of its subsidiaries or otherwise be an affiliated person of the listed company or any of its subsidiaries. Our board of directors has reviewed the composition of our board of directors and its committees and the independence of each director. Based upon information requested from and provided by each director concerning his background, employment and affiliations, including family relationships, our board of directors has determined that each of Dr. Duhay, Mr. Gray, Mr. Jenusaitis and Dr. Shrivastava is an “independent director” as defined under Rule 5605(a)(2) of the Nasdaq Marketplace Rules. Our board of directors also determined that Mr. Gray, Mr. Jenusaitis and Dr. Shrivastava will serve on our audit committee, Mr. Gray and Mr. Jenusaitis and Dr. Shrivastava will serve on our compensation committee, and Dr. Duhay, Mr. Jenusaitis and Dr. Shrivastava will serve on our nominating and corporate governance committee, and that each of the committees satisfy the independence standards for such committees established by the SEC and the Nasdaq Marketplace Rules, as applicable. In making such determinations, our board of directors considered the relationships that each such non-employee director has with our company and all other facts and circumstances our board of directors deemed relevant in determining independence, including the beneficial ownership of our capital stock by each non-employee director. Meetings of the Board and Stockholders Our board of directors met in person and telephonically seven times during 2021 and also acted by unanimous written consent. There were four Audit Committee meetings, two Compensation meetings and one Nominating and Corporate Governance meeting held in 2021. Our board of directors had 100% attendance for the Annual Meeting that was held on November 30, 2021. It is our policy that all directors must attend all stockholder meetings, barring extenuating circumstances. 38 Board Committees Our board of directors has established three standing committees—audit, compensation, and nominating and corporate governance—each of which operates under a charter that has been approved by our board of directors. Copies of each committee’s charter are posted on the Investors section of our website, which is located at www.envvenojaffe.com. Each committee has the composition and responsibilities described below. Our board of directors may from time to time establish other committees. Audit Committee Our audit committee consists of Mr. Gray, who is the chair of the audit committee, Mr. Jenusaitis and Dr. Shrivastava. Our board of directors has determined that each of the members of our audit committee satisfies the Nasdaq Marketplace Rules and SEC independence requirements. The functions of this committee include, among other things: ● evaluating the performance, independence and qualifications of our independent auditors and determining whether to retain our existing independent auditors or engage new independent auditors; ● reviewing and approving the engagement of our independent auditors to perform audit services and any permissible non-audit services; ● reviewing our annual and quarterly financial statements and reports, including the disclosures contained under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and discussing the statements and reports with our independent auditors and management; ● reviewing with our independent auditors and management significant issues that arise regarding accounting principles and financial statement presentation and matters concerning the scope, adequacy and effectiveness of our financial controls; ● reviewing our major financial risk exposures, including the guidelines and policies to govern the process by which risk assessment and risk management is implemented; and ● reviewing and evaluating on an annual basis the performance of the audit committee, including compliance of the audit committee with its charter. Our board of directors has determined that Mr. Gray qualifies as an “audit committee financial expert” within the meaning of applicable SEC regulations and meets the financial sophistication requirements of the Nasdaq Marketplace Rules. Both our independent registered public accounting firm and management periodically meet privately with our audit committee. 39 Compensation Committee Our compensation committee consists of Dr. Shrivastava, who is the chair of the committee, Mr. Gray and Mr. Jenusaitis. Our board of directors has determined that each of the members of our compensation committee is an outside director, as defined pursuant to Section 162(m) of the Internal Revenue Code of 1986, as amended, or the Code, and satisfies the Nasdaq Marketplace Rules independence requirements. The functions of this committee include, among other things: ● reviewing, modifying and approving (or if it deems appropriate, making recommendations to the full board of directors regarding) our overall compensation strategy and policies; ● reviewing and approving the compensation, the performance goals and objectives relevant to the compensation, and other terms of employment of our Chief Executive Officers and our other executive officers; ● reviewing and approving (or if it deems appropriate, making recommendations to the full board of directors regarding) the equity incentive plans, compensation plans and similar programs advisable for us, as well as modifying, amending or terminating existing plans and programs; ● reviewing and approving the terms of any employment agreements, severance arrangements, change in control protections and any other compensatory arrangements for our executive officers; ● reviewing with management and approving our disclosures under the caption “Compensation Discussion and Analysis” in our periodic reports or proxy statements to be filed with the SEC; and ● preparing the report that the SEC requires in our annual proxy statement. Nominating and Corporate Governance Committee Our nominating and corporate governance committee consists of Dr. Duhay, who is the chair of the committee, Mr. Jenusaitis and Dr. Shrivastava. Our board of directors has determined that each of the members of this committee satisfies the Nasdaq Marketplace Rules independence requirements. The functions of this committee include, among other things: ● identifying, reviewing and evaluating candidates to serve on our board of directors consistent with criteria approved by our board of directors; ● evaluating director performance on our board of directors and applicable committees of our board of directors and determining whether continued service on our board of directors is appropriate; ● evaluating, nominating and recommending individuals for membership on our board of directors; and ● evaluating nominations by stockholders of candidates for election to our board of directors. 40 Code of Conduct Our board of directors has adopted a written code of conduct that applies to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. We have posted on our website a current copy of the code and all disclosures that are required by law or Nasdaq Marketplace Rules concerning any amendments to, or waivers from, any provision of the code. Board Leadership Structure Our board of directors is free to select the Chairman of the board of directors and a Chief Executive Officer in a manner that it considers to be in the best interests of our company at the time of selection. Currently, Robert A. Berman serves as our Chief Executive Officer. The office of the Chairman of the board of directors has been vacant since May 2019. We currently believe that this leadership structure is in our best interests and strikes an appropriate balance between our Chief Executive Officer’s responsibility for the day-to-day management of our company and the Chairman of the board of directors’ responsibility to provide oversight, including setting the board of directors’ meeting agendas and presiding at executive sessions of the independent directors. Additionally, four of our five members of our board of directors have been deemed to be “independent” by the board of directors, which we believe provides sufficient independent oversight of our management. Our board of directors has not designated a lead independent director. Our board of directors, as a whole and also at the committee level, plays an active role overseeing the overall management of our risks. Our Audit Committee reviews risks related to financial and operational items with our management and our independent registered public accounting firm. Our board of directors is in regular contact with our Chief Executive Officer, who reports directly to our board of directors and who supervises day-to-day risk management. Role of Board in Risk Oversight Process Our board of directors believes that risk management is an important part of establishing, updating and executing on our business strategy. Our board of directors has oversight responsibility relating to risks that could affect the corporate strategy, business objectives, compliance, operations, and the financial condition and performance of our company. Our board of directors focuses its oversight on the most significant risks facing us and on our processes to identify, prioritize, assess, manage and mitigate those risks. Our board of directors receives regular reports from members of our senior management on areas of material risk to us, including strategic, operational, financial, legal and regulatory risks. While our board of directors has an oversight role, management is principally tasked with direct responsibility for management and assessment of risks and the implementation of processes and controls to mitigate their effects on us. Certain Legal Proceedings None of the Company’s directors or executive officers have been involved, in the past ten years and in a manner material to an evaluation of such director’s or officer’s ability or integrity to serve as a director or executive officer, in any of those “Certain Legal Proceedings” more fully detailed in Item 401(f) of Regulation S-K, which include but are not limited to, bankruptcies, criminal convictions and an adjudication finding that an individual violated federal or state securities laws. 41 ITEM 11. Executive Compensation The following table sets forth total compensation paid to our named executive officers for the years ended December 31, 2021 and 2020. Individuals we refer to as our “named executive officers” include our current Chief Executive Officer, our current and previous Chief Financial Officer and our other most highly compensated executive officer whose salary and bonus for services rendered in all capacities exceeded $100,000 during the fiscal year ended December 31, 2021. Name and Principal Position Year Salary ($) Bonus ($) Option Awards ($) Other Equity Incentive Plan Compensation ($) Nonqualified Deferred Compensation Earnings ($) All Other Compensation ($) Total ($) Robert A. Berman 2021 400,000 250,000 7,674,046 (3) 1,340,000 (9) 15,655 (12) 9,679,701 Chief Executive Officer 2020 400,000 200,000 478,171 (4) 15,808 (13) 1,093,979 Craig Glynn 2021 225,000 25,000 2,960,418 (5) 335,000 (10) 651 (14) 3,546,069 Chief Financial Officer 2020 143,000 (1) 32,020 (6) - 175,020 Marc H. Glickman, M.D. 2021 350,000 50,000 4,247,442 (7) 670,000 (11) 56,948 (15) 5,374,390 Chief Medical Officer and Senior Vice President 2020 350,000 (2) 50,000 321,928 (8) - - 53,976 (16) 775,904 (1) Mr. Glynn served as our Chief Financial Officer on an interim basis during 2020. Amounts in this column for Mr. Glynn include the amounts paid to him in that capacity during 2020. In January 2021, the board of directors elevated Mr. Glynn to permanent Chief Financial Officer. The company entered into an employment agreement with Mr. Glynn in February 2021. (2) Beginning July 26, 2019, Dr. Glickman’s annual base salary rate under his employment agreement dated July 26, 2019, which superseded his prior employment agreement, was $350,000. Amounts in this column for Dr. Glickman reflect his base salary earned for 2019. (3) Represents the grant date fair value of 838,000 stock options granted on February 18, 2021, and 349,781 stock options granted on November 30, 2021, computed in accordance with FASB ASC Topic 718. The February options vest quarterly over a two-year period and the November options vest quarterly over a three-year period. (4) Represents the grant date fair value of 40,000 stock options granted on July 18, 2020, computed in accordance with FASB ASC Topic 718. The options vest monthly over a three-year period. Also included is the fair value of his existing 43,209 options that were repriced from $124.75 per share to $10.00 per share. (5) Represents the grant date fair value of 324,000 stock options granted on February 18, 2021 and 125,925 stock options granted on November 30, 2021, computed in accordance with FASB ASC Topic 718. The options vest quarterly over a three-year period. (6) Represents the grant date fair value of 4,000 stock options granted on July 18, 2020, computed in accordance with FASB ASC Topic 718. The options vest quarterly over a three-year period. (7) Represents the grant date fair value of 406,000 stock options granted on February 18, 2021 and 265,700 stock options granted on November 30, 2021, computed in accordance with FASB ASC Topic 718. The February options vest quarterly over a two-year period and the November options vest quarterly over a three-year period. 42 (8) Represents the grant date fair value of 40,000 stock options granted on July 18, 2020, computed in accordance with FASB ASC Topic 718. The options vest monthly over a three-year period. (9) Represents the grant date fair value of 200,000 shares of restricted stock units granted on November 30, 2021, computed based on the closing price of the Company’s stock on the grant date. (10) Represents the grant date fair value of 50,000 shares of restricted stock units granted on November 30, 2021, computed based on the closing price of the Company’s stock on the grant date. (11) Represents the grant date fair value of 100,000 shares of restricted stock units granted on November 30, 2021, computed based on the closing price of the Company’s stock on the grant date. (12) Includes company paid healthcare of $1,155 and 401(k) match of $14,500. (13) Includes company paid healthcare of $1,404 and 401(k) match of $14,404. (14) Includes company paid healthcare of $651. (15) Includes company paid healthcare of $42,447 and 401(k) match of $14,500. (16) Includes company paid healthcare of $39,691 and 401(k) match of $14,285. 43 Employment Agreements We have entered into various employment agreements with certain of our executive officers. Set forth below is a summary of many of the material provisions of such agreements, which summaries do not purport to contain all of the material terms and conditions of each such agreement. For purposes of the following employment agreements: ● “Cause” generally means the executive’s (i) willful misconduct or gross negligence in the performance of his or her duties to us; (ii) willful failure to perform his or her duties to us or to follow the lawful directives of the Chief Executive Officer (other than as a result of death or disability); (iii) indictment for, conviction of or pleading of guilty or nolo contendere to, a felony or any crime involving moral turpitude: (iv) repeated failure to cooperate in any audit or investigation of our business or financial practices; (v) performance of any material act of theft, embezzlement, fraud, malfeasance, dishonesty or misappropriation of our property; or (vi) material breach of his or her employment agreement or any other material agreement with us or a material violation of our code of conduct or other written policy. ● “Good reason” generally means, subject to certain notice requirements and cure rights, without the executive’s consent, (i) material diminution in his or her base salary or annual bonus opportunity; (ii) material diminution in his or her authority or duties (although a change in title will not constitute “good reason”), other than temporarily while physically or mentally incapacitated, as required by applicable law; (iii) relocation of his or her primary work location by more than 25 miles from its then current location; or (iv) a material breach by us of a material term of the employment agreement. ● “Change of control” generally means (i) the acquisition, other than from us, by any individual, entity or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act), other than us or any subsidiary, affiliate (within the meaning of Rule 144 promulgated under the Securities Act) or employee benefit plan of ours, of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than 50% of the combined voting power of our then outstanding voting securities entitled to vote generally in the election of directors; (ii) a reorganization, merger, consolidation or recapitalization of us, other than a transaction in which more than 50% of the combined voting power of the outstanding voting securities of the surviving or resulting entity immediately following such transaction is held by the persons who, immediately prior to the transaction, were the holders of our voting securities; or (iii) a complete liquidation or dissolution of us, or a sale of all or substantially all of our assets. Robert A. Berman On March 30, 2018, we entered into an employment agreement with Robert A. Berman, our current Chief Executive Officer and director. Pursuant to the terms of his employment agreement, Mr. Berman’s base salary is $400,000, subject to annual review and adjustment at the discretion of our compensation committee, and he will be eligible for an annual year-end discretionary bonus of up to 50% of his base salary, subject to the achievement of key performance indicators, as determined by our compensation committee. The initial term of Mr. Berman’s employment agreement may be terminated at anytime with or without cause and with or without notice or for good reason thereunder. In connection with his employment, Mr. Berman received an initial equity grant of an option to purchase 43,209 options with 8,642 vesting on the date of his Employment Agreement, March 30, 2018, and the remaining 80% vesting ratably on a monthly basis over the following 24 months. In February 2021, the board of directors approved an option grant to Mr. Berman to purchase 838,000 shares of common stock at an exercise price of $8.20 per shares (the closing price of the Company’s common stock on February 18, 2021). The stock option vests in equal quarterly installments over a two year period. Additionally, the board of directors paid Mr. Berman a cash bonus of $250,000 for 2021 and $200,000 for 2020. Mr. Berman is entitled to participate in our employee benefit, pension and/or profit sharing plans, and we will pay certain health and dental premiums on his behalf. Mr. Berman’s employment agreement prohibits him from inducing, soliciting or entertaining any of our employees to leave our employ during the term of the agreement and for 12 months thereafter. Pursuant to the terms of his employment agreement, Mr. Berman is entitled to severance in the event of certain terminations of employment. In the event Mr. Berman’s employment is terminated by us without cause and other than by reason of disability or he resigns for good reason, subject to his timely executing a release of claims in our favor and in addition to certain other accrued benefits, he is entitled to receive 6 month of base salary if termination occurred prior to the second anniversary of his employment or 12 months of continued base salary on and after the second anniversary of his employment (or 24 months if such termination occurs within 24 months following a change of control). 44 Craig Glynn On February 19, 2021, the Company entered into an employment agreement with Mr. Glynn, in connection with Mr. Glynn’s elevation to full time Chief Financial Officer in addition to treasurer and secretary of the Company. Pursuant to the employment agreement, Mr. Glynn will earn $225,000 per year. In addition, Mr. Glynn will receive stock options to purchase 324,000 shares of common stock of the Company at an exercise price of $8.20 per shares (the closing price of the Company’s common stock on February 18, 2021). The stock options vest in equal quarterly installments over a three year period with a six month cliff. The employment agreement further provides that Mr. Glynn is entitled to participate in any employee benefit plans that the Company has adopted or may adopt. Pursuant to the terms of the employment agreement, Mr. Glynn’s employment agreement is terminable due to Mr. Glynn’s disability or death, for “Cause” (as defined in the employment agreement) or without “Cause” by the Company, and for “Good Reason” (as defined in the employment agreement) or voluntarily by Mr. Glynn. In the event of Mr. Glynn’s death or disability, or termination for “Cause” by the Company or without “Good Reason” by Mr. Glynn, Mr. Glynn (or his estate) is entitled to receive any unpaid base salary through the termination date, reimbursement for unreimbursed business expenses, accrued but unused vacation time in accordance with the Company’s policy and any other payments or benefits that Mr. Glynn as entitled to in accordance with any Company benefit plans (collectively, the “Accrued Benefits”). Upon termination without “Cause” (other than by reason of death or disability) or resignation for “Good Reason,” Mr. Glynn will be entitled to three months of severance for each year Mr. Glynn is employed up to one year of severance, in addition to all Accrued Benefits. Any outstanding unvested securities owned by Mr. Glynn on the termination date will vest (or terminate) in accordance with the terms of such grant. Prior to his full time role as Chief Financial Officer, on April 6, 2020 he was appointed as Interim Chief Financial Officer and Interim Treasurer. For his services as Interim Chief Financial Officer and Interim Treasurer, Mr. Glynn was paid $10,000 per month of employment. 45 Marc H. Glickman, M.D. On July 22, 2016, we entered into an employment agreement with Marc H. Glickman, M.D., our Senior Vice President and Chief Medical Officer (the “Pre-existing Employment Agreement”). Pursuant to the terms of his Pre-existing Employment Agreement, Dr. Glickman’s base salary is $300,000, subject to annual review and adjustment at the discretion of our board of directors, and he will be eligible for an annual year-end discretionary bonus of up to 50% of his base salary, subject to the achievement of key performance indicators, as determined by our board of directors. In connection with his Pre-existing Employment Agreement, Dr. Glickman received an initial equity grant of an option to purchase up to 7,380 shares of our common stock with 20% of the shares vesting immediately and 80% vesting on a monthly basis over 24 months thereafter. The initial term of Dr. Glickman’s Pre-existing Employment Agreement ended on December 31, 2018 and was automatically extended for additional three-year terms. On July 26, 2019, we entered into an employment agreement with Dr. Glickman (the “New Employment Agreement”) that supersedes the terms of the Pre-existing Employment Agreement. Pursuant to the terms of the New Employment Agreement, Dr. Glickman’s base salary is $350,000 per year, subject to annual review and adjustment at the discretion of the Board. In connection with entering into the New Employment Agreement, Dr. Glickman’s existing seven thousand three hundred and eighty (7,380) options (“Existing Options”) to purchase Company common stock at two hundred and fifty dollars ($250.00) per share until October 1, 2026, were repriced to fifty dollars ($50.00) per share. Additionally, Dr. Glickman, in connection to the New Employment Agreement, was granted stock options for the right to purchase seven thousand two hundred (7,200) common stock at a price equal to two dollars ($50.00) per share exercisable until July 26, 2029, which shall vest quarterly over a three (3) year period. In February 2021, the board of directors approved an option grant to Dr. Glickman to purchase 406,000 shares of common stock at an exercise price of $8.20 per shares (the closing price of the Company’s common stock on February 18, 2021). The stock option vests in equal quarterly installments over a two year period. Additionally, the board of directors paid Mr. Berman a cash bonus of $50,000. Pursuant to the terms of the New Employment Agreement, Dr. Glickman is an at-will employee and is entitled to severance in the event of certain terminations of his employment. In the event that Dr. Glickman’s employment is terminated by the Company without Cause (as defined in the New Employment Agreement), other than by reason of Disability (as defined in the New Employment Agreement), or he resigns for Good Reason (as defined in the New Employment Agreement), subject to his timely executing a release of claims in favor of the Company and in addition to certain other accrued benefits, Dr. Glickman is entitled to receive three months of his base salary for each year that he has been employed by the Company at the time of termination, up to a total of one year of his base salary. Potential Payments Upon Termination or Change-in-Control Pursuant to the terms of the employment agreements discussed above, we will pay severance in the event of certain terminations of employment. In the event employment is terminated by us without cause and other than by reason of disability or if the executive resigns for good reason, subject to his or her timely executing a release of claims in our favor and in addition to certain other accrued benefits, he or she is entitled to receive severance pursuant to the terms of his or her employment agreements discussed above. 46 Outstanding Equity Awards at Fiscal Year-End The following table sets forth information regarding equity awards held by our named executive officers as of December 31, 2021. Name Number of securities underlying unexercised options (#) exercisable Number of securities underlying unexercised options (#) unexercisable Equity incentive plan awards: Number of securities underlying unexercised unearned options (#) Option exercise price ($) Option expiration date Robert A. Berman , 43,209 (1) - (1) N/A $ 10.00 September 23, 2028 Chief Executive Officer 19,333 (2) 20,667 (2) $ 10.00 July 18, 2030 364,297 (3) 473,703 (3) $ 8.20 February 18, 2031 349,781 (4) 349,781 (4) $ 6.70 November 30, 2031 Marc H. Glickman, M.D. 3,000 (5) 4,200 (5) N/A $ 50.00 July 25, 2029 Chief Medical Officer and Senior Vice President 7,380 (5) - N/A $ 50.00 October 1, 2026 19,333 (2) 20,667 (2) - $ 10.00 July 18, 2030 176,497 (3) 229,503 (3) $ 8.20 February 18, 2031 265,700 (4) 265,700 (4) $ 6.70 November 30, 2031 Craig Glynn, Chief Financial Officer (6) 1,933 (7) 2,067 (7) N/A $ 10.00 July 18, 2030 93,900 (8) 230,100 (8) $ 8.20 February 18, 2031 125,925 (4) 125,925 (4) $ 6.70 November 30, 2031 (1) Options were granted on September 24, 2018, and vested 20% on the date of his Employment Agreement, March 30, 2018, and the remaining 80% vests ratably on a monthly basis over the 24 months following the date of his Employment Agreement. (2) Options were granted on July 18, 2020 and vest ratably on a monthly basis over 36 months. (3) Options were granted on February 18, 2021 and vest ratably on a quarterly basis over two years. (4) Options were granted on November 30, 2021 and vest ratably on a quarterly basis over three years. (5) On July 26, 2019, the Company entered a new employment agreement with Dr. Glickman that superseded the terms of his existing employment agreement. In connection with entering into the new employment agreement, Dr. Glickman’s existing 7,380 options that were granted on October 1, 2016 were repriced from $250.00 to $50.00 per share. Additionally, on July 26, 2019, Dr. Glickman was granted 7,200 options at $50.00 per share vesting quarterly over a three-year period. (6) Mr. Glynn was elevated to permanent Chief Financial Officer in January 2021. (7) Options were granted on July 18, 2020 and vest ratably on a quarterly basis over three years. (8) Options were granted on February 18, 2021 and vest ratably on a quarterly basis over three years. Name Grant Date Number of unearned restricted stock units that have not vested Market value of unearned restricted stock units that have not vested (a) Robert A. Berman, Chief Executive Officer 11/30/2021 200,000 (1) $ 1,318,000 Marc H. Glickman, M.D., Chief Medical Officer and Senior Vice President 11/30/2021 100,000 (1) $ 659,000 Craig Glynn, Chief Financial Officer 11/30/2021 50,000 (1) $ 329,500 (a) Determined by multiplying the number of restricted stock units that have not vested by $6.59, the closing price of NVNO’s common stock on December 31, 2021. (1) On November 30, 2021, Mr. Berman was granted 200,000 restricted stock units, Dr. Glickman was granted 100,000 restricted stock units, and Mr. Glynn was granted 50,000 restricted stock units. The restricted stock units are subject to milestone-based vesting as follows: (i) 50% upon SAVVE (Surgical Anti-reflux Venous Valve Endoprosthesis) endpoints being achieved, and (ii) 50% upon the Pre-Market Approval of the VenoValve. 47 Employee Benefit Plans Amended and Restated 2016 Omnibus Incentive Plan On October 1, 2016, our board of directors and our stockholders adopted and approved the enVVeno Medical Corporation 2016 Omnibus Incentive Plan, and, subsequently, on April 26, 2018, our board of directors and our stockholders adopted and approved the Amended and Restated 2016 Omnibus Incentive Plan which was subsequently amended by Amendment No. 1 to the Amended and Restated 2016 Omnibus Incentive Plan following receipt of stockholder approval on December 17, 2020 and by Amendment No. 2 to the Amended and Restated 2016 Omnibus Incentive Plan following receipt of stockholder approval on November 30, 2021 (as amended, the “2016 Plan”). The principal features of the 2016 Plan are summarized below. This summary is qualified in its entirety by reference to the text of the 2016 Plan, which is filed as an exhibit to the registration statement of which this prospectus is a part. Share Reserve We currently have reserved 4,500,000 shares of our common stock for issuance under the 2016 Plan, provided, however, if at any time the Company issues additional shares of Common Stock or securities that are convertible or exercisable into shares of Common Stock (other than pursuant to the Plan) then the number of shares authorized to be awarded under the Plan shall increase to an amount equal to no less than 20% of the issued and outstanding shares of common stock of the Company on a fully diluted basis. Such increase, if any, shall occur automatically upon each applicable issuance of securities by the Company. All shares available for issuance under the Plan may be granted as incentive stock options under Code Section 422. The shares of common stock issuable under the 2016 Plan will consist of authorized and unissued shares, treasury shares or shares purchased on the open market or otherwise, all as determined by our company from time to time. If any award is canceled, terminates, expires or lapses for any reason prior to the issuance of shares or if shares are issued under the 2016 Plan and thereafter are forfeited to us, the shares subject to such awards and the forfeited shares will not count against the aggregate number of shares of common stock available for grant under the 2016 Plan. In addition, the following items will not count against the aggregate number of shares of common stock available for grant under the 2016 Plan: (1) shares issued under the 2016 Plan repurchased or surrendered at no more than cost or pursuant to an option exchange program, (2) any award that is settled in cash rather than by issuance of shares of common stock, (3) shares surrendered or tendered in payment of the option price or purchase price of an award or any taxes required to be withheld in respect of an award or (4) awards granted in assumption of or in substitution for awards previously granted by an acquired company. Administration The 2016 Plan may be administered by our board of directors or our compensation committee. Our compensation committee, in its discretion, selects the individuals to whom awards may be granted, the time or times at which such awards are granted and the terms and conditions of such awards. Our board of directors also has the authority, subject to the terms of the 2016 Plan, to amend existing options (including to reduce the option’s exercise price), to institute an exchange program by which outstanding options may be surrendered in exchange for options that may have different exercise prices and terms, restricted stock, and/or cash or other property. Eligibility Awards may be granted under the 2016 Plan to officers, employees, directors, consultants and advisors of us and our affiliates. Incentive stock options may be granted only to employees of us or our subsidiaries. 48 Awards The 2016 Plan permits the granting of any or all of the following types of awards: ● Stock Options . Stock options entitle the holder to purchase a specified number of shares of common stock at a specified price (the exercise price), subject to the terms and conditions of the stock option grant. Our compensation committee may grant either incentive stock options, which must comply with Code Section 422, or nonqualified stock options. Our compensation committee sets exercise prices and terms and conditions, except that stock options must be granted with an exercise price not less than 100% of the fair market value of our common stock on the date of grant (excluding stock options granted in connection with assuming or substituting stock options in acquisition transactions). Unless our compensation committee determines otherwise, fair market value means, as of a given date, the closing price of our common stock. At the time of grant, our compensation committee determines the terms and conditions of stock options, including the quantity, exercise price, vesting periods, term (which cannot exceed 10 years) and other conditions on exercise. ● Stock Appreciation Rights . Our compensation committee may grant SARs, as a right in tandem with the number of shares underlying stock options granted under the 2016 Plan or as a freestanding award. Upon exercise, SARs entitle the holder to receive payment per share in stock or cash, or in a combination of stock and cash, equal to the excess of the share’s fair market value on the date of exercise over the grant price of the SAR. The grant price of a tandem SAR is equal to the exercise price of the related stock option and the grant price for a freestanding SAR is determined by our compensation committee in accordance with the procedures described above for stock options. Exercise of a SAR issued in tandem with a stock option will reduce the number of shares underlying the related stock option to the extent of the SAR exercised. The term of a freestanding SAR cannot exceed 10 years, and the term of a tandem SAR cannot exceed the term of the related stock option. ● Restricted Stock, Restricted Stock Units and Other Stock-Based Awards . Our compensation committee may grant awards of restricted stock, which are shares of common stock subject to specified restrictions, and restricted stock units, or RSUs, which represent the right to receive shares of our common stock in the future. These awards may be made subject to repurchase, forfeiture or vesting restrictions at our compensation committee’s discretion. The restrictions may be based on continuous service with us or the attainment of specified performance goals, as determined by our compensation committee. Stock units may be paid in stock or cash or a combination of stock and cash, as determined by our compensation committee. Our compensation committee may also grant other types of equity or equity-based awards subject to the terms and conditions of the 2016 Plan and any other terms and conditions determined by our compensation committee. ● Performance Awards . Our compensation committee may grant performance awards, which entitle participants to receive a payment from us, the amount of which is based on the attainment of performance goals established by our compensation committee over a specified award period. Performance awards may be denominated in shares of common stock or in cash, and may be paid in stock or cash or a combination of stock and cash, as determined by our compensation committee. Cash-based performance awards include annual incentive awards. 49 Clawback All cash and equity awards granted under the 2016 plan will be subject to all applicable laws regarding the recovery of erroneously awarded compensation, any implementing rules and regulations under such laws, any policies we adopted to implement such requirements and any other compensation recovery policies as we may adopt from time to time. Change in Control Under the 2016 Plan, in the event of a change in control (as defined in the 2016 Plan), outstanding awards will be treated in accordance with the applicable transaction agreement. If no treatment is provided for in the transaction agreement, each award holder will be entitled to receive the same consideration that stockholders receive in the change in control for each share of stock subject to the award holder’s awards, upon the exercise, payment or transfer of the awards, but the awards will remain subject to the same terms, conditions and performance criteria applicable to the awards before the change in control, unless otherwise determined by our compensation committee. In connection with a change in control, outstanding stock options and SARs can be cancelled in exchange for the excess of the per share consideration paid to stockholders in the transaction, minus the option or SARs exercise price. Subject to the terms and conditions of the applicable award agreements, awards granted to non-employee directors will fully vest on an accelerated basis, and any performance goals will be deemed to be satisfied at target. For awards granted to all other service providers, vesting of awards will depend on whether the awards are assumed, converted or replaced by the resulting entity. ● For awards that are not assumed, converted or replaced, the awards will vest upon the change in control. For performance awards, the amount vesting will be based on the greater of (1) achievement of all performance goals at the “target” level or (2) the actual level of achievement of performance goals as of our fiscal quarter end preceding the change in control, and will be prorated based on the portion of the performance period that had been completed through the date of the change in control. ● For awards that are assumed, converted or replaced by the resulting entity, no automatic vesting will occur upon the change in control. Instead, the awards, as adjusted in connection with the transaction, will continue to vest in accordance with their terms and conditions. In addition, the awards will vest if the award recipient has a separation from service within two years after a change in control by us other than for “cause” or by the award recipient for “good reason” (each as defined in the applicable award agreement). For performance awards, the amount vesting will be based on the greater of (1) achievement of all performance goals at the “target” level or (2) the actual level of achievement of performance goals as of our fiscal quarter end preceding the change in control, and will be prorated based on the portion of the performance period that had been completed through the date of the separation from service. Amendment and Termination of the 2016 Plan Unless earlier terminated by our board of directors, the 2016 Plan will terminate, and no further awards may be granted, 10 years after October 1, 2016, the date on which it was approved by our stockholders. Our board of directors may amend, suspend or terminate the 2016 Plan at any time, except that, if required by applicable law, regulation or stock exchange rule, stockholder approval will be required for any amendment. The amendment, suspension or termination of the 2016 Plan or the amendment of an outstanding award generally may not, without a participant’s consent, materially impair the participant’s rights under an outstanding award. 50 Limitation of Liability and Indemnification Matters Our amended and restated certificate of incorporation limits the liability of our directors for monetary damages for breach of their fiduciary duties, except for liability that cannot be eliminated under the DGCL. Consequently, our directors will not be personally liable for monetary damages for breach of their fiduciary duties as directors, except liability for any of the following: ● any breach of their duty of loyalty to us or our stockholders; ● acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law; ● unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the DGCL; or ● any transaction from which the director derived an improper personal benefit. Our amended and restated bylaws also provide that we will indemnify our directors and executive officers and may indemnify our other officers and employees and other agents to the fullest extent permitted by law. Our amended and restated bylaws also permit us to secure insurance on behalf of any officer, director, employee or other agent for any liability arising out of his or her actions in this capacity, regardless of whether our amended and restated bylaws would permit indemnification. We have obtained directors’ and officers’ liability insurance. We have entered into separate indemnification agreements with our directors and executive officers, in addition to indemnification provided for in our amended and restated bylaws. These agreements, among other things, provide for indemnification of our directors and executive officers for expenses, judgments, fines and settlement amounts incurred by this person in any action or proceeding arising out of this person’s services as a director or executive officer or at our request. We believe that these provisions and agreements are necessary to attract and retain qualified persons as directors and executive officers. The above description of the indemnification provisions of our amended and restated bylaws and our indemnification agreements is not complete and is qualified in its entirety by reference to these documents, each of which is incorporated by reference as an exhibit to the registration statement to which this prospectus forms a part. The limitation of liability and indemnification provisions in our amended and restated certificate of incorporation and amended and restated bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duties. They may also reduce the likelihood of derivative litigation against directors and officers, even though an action, if successful, might benefit us and our stockholders. A stockholder’s investment may be harmed to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions. Insofar as indemnification for liabilities under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and may be unenforceable. There is no pending litigation or proceeding naming any of our directors or officers as to which indemnification is being sought, nor are we aware of any pending or threatened litigation that may result in claims for indemnification by any director or officer. Director Compensation The Board determines the form and amount of director compensation after its review of recommendations made by the Compensation Committee. A substantial portion of each director’s annual retainer is in the form of equity. Under the Company’s nonemployee director compensation program members of the Board who are not also Company employees (“Non-Employee Directors”) are granted options worth up to thirty-seven thousand five hundred dollars ($37,500) per annum (the “Annual Award”). Prior to February 18, 2021, the equity portion of director compensation included eight hundred options and restricted stock units (“RSU’s” worth up to twenty-five thousand dollars ($25,000) per annum. A Non-Employee Director who is newly appointed to the Board other than in connection with an annual meeting of stockholders will generally receive a grant of two thousand four hundred (2,400) options and RSUs worth up to seventy-five thousand dollars ($75,000) upon appointment (an “Initial Award”), which covers their compensation for their first three years of service. The Initial Award and Annual Award to Non-Employee Directors will vest as long as they remain directors in equal annual portions over three years following the date in which the award is granted. 51 The table below shows the compensation paid to our non-employee directors during 2021 and 2020. Name Fees earned or paid in cash Stock awards ($) Option awards ($)(4) Non-equity incentive plan compensation ($) Nonqualified deferred compensation earnings ($) All other compensation($) Total ($) Francis Duhay, 2021 $ 32,500 - $ 37,500 (2) - - - $ 70,000 M.D. 2020 $ 20,000 $ 25,000 (1) $ 31,180 (3) - - - $ 76,180 Dr. Sanjay 2021 $ 37,500 - $ 37,500 (2) - - - $ 75,000 Shrivastava 2020 $ 25,000 25,000 (1) 31,180 (3) - - - $ 81,180 Robert Gray 2021 $ 40,000 - $ 37,500 (2) $ 77,500 2020 $ 27,500 $ 25,000 (1) $ 31,180 (3) $ 83,680 Matthew 2021 $ 37,500 - $ 37,500 (2) $ 75,000 Jenusaitis 2020 $ 25,000 $ 25,000 (1) $ 31,180 (3) $ 81,180 (1) Under the Company’s nonemployee director compensation program, Dr. Duhay, Dr. Shrivastava, Mr. Gray and Mr. Jenusaitis were each granted 2,500 Restricted Stock Grants on July 17, 2020, which based on the Company’s closing stock price on the grant date were valued at $10.00 per share. These Restricted Stock Grants fully vested on December 31, 2020. (2) Under the Company’s nonemployee director compensation program, Dr. Duhay, Dr. Shrivastava, Mr. Gray and Mr. Jenusaitis were each granted 5,673 options to purchase shares of our common stock on February 18, 2021 at an exercise price of $8.20 per share. The options were valued at $6.61 per share as of the date of the grant. All of these options vest in equal quarterly portions from the grant date through December 31, 2021, such that they are fully vested at December 31, 2021, and valued in accordance with FASB ASC Topic 718. (3) Under the Company’s nonemployee director compensation program, Dr. Duhay, Dr. Shrivastava, Mr. Gray and Mr. Jenusaitis were each granted 4,000 options to purchase shares of our common stock on July 17, 2020 at an exercise price of $10.00 per share. The options were valued at $7.80 per share as of the date of the grant. All of these options vest in equal quarterly portions from the grant date through December 31, 2020, such that they are fully vested at December 31, 2020, and valued in accordance with FASB ASC Topic 718. (4) Under the Company’s nonemployee director compensation program, Dr. Duhay, Dr. Shrivastava, Mr. Gray and Mr. Jenusaitis were each granted 7,211 options to purchase shares of our common stock on November 30, 2021, as part of their compensation for the year ending December 31, 2022, at an exercise price of $6.70 per share. The options were valued at $5.20 per share as of the date of the grant and will vest in equal quarterly portions starting on March 31, 2022 and through December 31, 2022, such that they are fully vested at December 31, 2022. The grant date value of each grant determined in accordance with FASB ASC Topic 718 was $37,500. 52 ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The following table lists, as of March 24, 2022, the number of shares of common stock of our Company that are beneficially owned by (i) each person or entity known to our Company to be the beneficial owner of more than 5% of the outstanding common stock; (ii) each officer and director of our Company; and (iii) all officers and directors as a group. Applicable percentage ownership is based on 9,469,850 shares of common stock outstanding as the date of this Form 10-K. We have determined beneficial ownership in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting or dispositive power with respect to such securities. In addition, pursuant to such rules, we deemed outstanding shares of common stock subject to options or warrants held by that person that are currently exercisable or exercisable within 60 days of March 24, 2022. We did not deem such shares outstanding, however, for the purpose of computing the percentage ownership of any other person. Except as indicated by the footnotes below, we believe, based on the information furnished to us, that the beneficial owners named in the table below have sole voting and dispositive power with respect to all shares of our common stock that they beneficially own, subject to applicable community property laws. Beneficial Ownership Name and Address of Beneficial Owner (1) Number of Shares Percentage 5% Stockholders Perceptive Life Sciences Master Fund Ltd. (2) 937,515 9.9 % Named Executive Officers and Directors Robert A. Berman (3) 627,177 6.2 % Marc Glickman, M.D. (4) 302,577 3.1 % Craig Glynn (5) 143,554 1.5 % Francis Duhay, M.D. (6) 27,036 * Dr. Sanjay Shrivastava (7) 16,764 * Robert Gray (8) 19,689 * Matthew Jenusaitis (9) 18,959 * All directors and executive officers as a group (7 persons) 1,155,757 10.9 % * Represents beneficial ownership of less than 1%. (1) Except as otherwise noted below, the address for each person or entity listed in the table is c/o enVVeno Medical Corporation, 70 Doppler, Irvine, California 92618. (2) Based on a Schedule 13G filed by the Perceptive Live Sciences Master Fund Ltd. (the “Master Fund”). The Master Fund directly holds 781,615 shares of common stock and 1,759,035 pre-funded warrants. The pre-funded warrants may not be exercised if the Master Fund would beneficially own more than 9.9% of the Company’s outstanding shares of common stock after giving effect to such exercise. Perceptive Advisors serves as the investment manager to the Master Fund and may be deemed to beneficially own such shares. Mr. Edelman is the managing member of Perceptive Advisors and may be deemed to beneficially own such shares. (3) Includes 588,071 shares of common stock issuable upon exercise of options that are currently exercisable or exercisable within 60 days of March 24, 2022. (4) Includes 278,836 shares of common stock that are issuable upon exercise of options that are currently exercisable or exercisable within 60 days of March 24, 2022. (5) Includes 133,060 shares of common stock that are issuable upon exercise of options that are currently exercisable or exercisable within 60 days of March 24, 2022. (6) Includes 13,476 shares of common stock that are issuable upon exercise of options that are currently exercisable or exercisable within 60 days of March 24, 2022. (7) Includes 13,476 shares of common stock that are issuable upon exercise of options that are currently exercisable or exercisable within 60 days of March 24, 2022. (8) Includes 13,076 shares of common stock that are issuable upon exercise of options that are currently exercisable or exercisable within 60 days of March 24, 2022. (9) Includes 13,076 shares of common stock that are issuable upon exercise of options that are currently exercisable or exercisable within 60 days of March 24, 2022. 53 ITEM 13. Certain Relationships and Related Transactions, and Director Independence The following is a description of transactions since January 1, 2021 to which we were a party in which (i) the amount involved exceeded or will exceed the lesser of (A) $120,000 or (B) one percent of our average total assets at year end for the last two completed fiscal years and (ii) any of our directors, executive officers or holders of more than 5% of our capital stock, or any member of the immediate family of, or person sharing the household with, any of the foregoing persons, who had or will have a direct or indirect material interest, other than equity and other compensation, termination, change in control and other similar arrangements, which are described under “Executive Compensation.” None Indemnification of Officers and Directors Our amended and restated certificate of incorporation and amended and restated bylaws provide that we will indemnify each of our directors and officers to the fullest extent permitted by the DGCL. Further, we intend to enter into indemnification agreements with each of our directors and officers, and we intend to purchase a policy of directors’ and officers’ liability insurance that insures our directors and officers against the cost of defense, settlement or payment of a judgment under certain circumstances. For further information, see “Executive Compensation—Limitations of Liability and Indemnification Matters.” To the best of our knowledge, during the past two fiscal years, other than as set forth above, there were no material transactions, or series of similar transactions, or any currently proposed transactions, or series of similar transactions, to which we were or are to be a party, in which the amount involved exceeds the lesser of (A) $120,000 or (B) one percent of our average total assets at year end for the last two completed fiscal years, and in which any director or executive officer, or any security holder who is known by us to own of record or beneficially more than 5% of any class of our common stock, or any member of the immediate family of any of the foregoing persons, has an interest (other than compensation to our officers and directors in the ordinary course of business). Policies and Procedures for Related Party Transactions All future transactions between us and our officers, directors or five percent stockholders, and respective affiliates will be on terms no less favorable than could be obtained from unaffiliated third parties and will be approved by a majority of our independent directors who do not have an interest in the transactions and who had access, at our expense, to our legal counsel or independent legal counsel. Director Independence The information provided in Item 10, under the subheading “Director Independence” is incorporated herein. 54 ITEM 14. Principal Accounting Fees and Services Audit Fees. The aggregate fees billed by Marcum LLP (“ Marcum ”) for professional services rendered for the audit of our annual financial statements, review of the financial information included in our Forms 10-Q for the respective periods and other required filings with the SEC for the years ended December 31, 2021 and 2020 totaled $126,000 and $244,000, respectively. The above amounts include interim procedures, audit fees, fees related to registration statements filed during those years, and attendance at audit committee meetings. All Other Fees. None. Procedures For Board of Directors Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditor Our audit committee is ultimately responsible for reviewing and approving, in advance, any audit and any permissible non-audit engagement or relationship between us and our independent registered public accounting firm. Our engagement of Marcum to conduct all audit and permissible non-audit related activities incurred during fiscal years 2021 and 2020 were approved by our audit committee in accordance with these procedures. PART IV ITEM 15. Exhibits and Financial Statements Schedules 1. Consolidated Financial Statements Our financial statements and the notes thereto, together with the report of our independent registered public accounting firm on those financial statements, are hereby filed as part of this report beginning on page F-1. 2. Financial Statement Schedules All financial statement schedules have been omitted since the required information is not applicable or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements and notes thereto. 55 3. Exhibits The following is a complete list of exhibits filed as part of this Form 10-K. Exhibit numbers correspond to the numbers in the Exhibit Table of Item 601 of Regulation S-K. Exhibit Number Description 3.1 Fifth Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed on September 16, 2020). 3.2 Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed on June 6, 2018). 3.3 Certificate of Amendment to the Fifth Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1to the Registrant’s Current Report on Form 8-K filed on December 2, 2020). 3.4 Certificate of Amendment to the Fifth Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on October 1, 2021). 4.1 Specimen common stock certificate (incorporated by reference to Exhibit 4.1 to the Registrant’s Registration Statement on Form S-1 (No. 333-220372) filed on September 7, 2017). 4.2 Form of Series A Preferred Stock Placement Agents’ Warrant (incorporated by reference to Exhibit 4.4 to the Registrant’s Registration Statement on Form S-1/A (No. 333-220372) filed on December 14, 2017). 4.3 Form of Series B Preferred Stock Placement Agents’ Warrant (incorporated by reference to Exhibit 4.5 to the Registrant’s Registration Statement on Form S-1/A (No. 333-220372) filed on December 14, 2017). 4.4 Form of Common Stock Purchase Warrant (issued in connection with the 2017 Notes) (incorporated by reference to Exhibit 4.6 to the Registrant’s Registration Statement on Form S-1/A (No. 333-220372) filed on December 14, 2017). 4.5 Form of Underwriters’ Warrant (incorporated by reference to Exhibit 4.7 to the Registrant’s Registration Statement on Form S-1/A (No. 333-220372) filed on January 26, 2018). 4.6 Form of Warrant to Purchase Shares of Common Stock (issued to Mr. Cantor) (incorporated by reference to Exhibit 4.8 to the Registrant’s Registration Statement on Form S-1/A (No. 333-220372) filed on December 14, 2017). 4.7 Form of Amended and Restated Common Stock Purchase Warrant (issued in connection with the 2017 Notes) (incorporated by reference to Exhibit 4.9 to the Registrant’s Registration Statement on Form S-1/A (No. 333-220372) filed on January 26, 2018). 4.8 Form of Common Stock Purchase Warrant (issued in connection with the 2018 Notes) (incorporated by reference to Exhibit 4.10 to the Registrant’s Registration Statement on Form S-1/A (No. 333-220372) filed on January 26, 2018). 4.9 Form of Second Amended and Restated Common Stock Purchase Warrant (issued in connection with the 2017 Notes) (incorporated by reference to Exhibit 4.11 to the Registrant’s Registration Statement on Form S-1/A (No. 333-220372) filed on April 16, 2018). 4.10 Form of Amended and Restated Common Stock Purchase Warrant (issued in connection with the 2018 Notes) (incorporated by reference to Exhibit 4.12 to the Registrant’s Registration Statement on Form S-1/A (No. 333-220372) filed on April 16, 2018). 4.11 Form of Warrant Agreement (incorporated by reference to Exhibit 4.13 to the Registrant’s Registration Statement on Form S-1/A (No. 333-220372) filed on May 14, 2018). 4.12 Amendment to Warrant to Purchase Shares (incorporated by reference to Exhibit 4.14 to the Registrant’s Registration Statement on Form S-1/A (No. 333-220372) filed on April 16, 2018). 4.13 Form of Warrant Certificate (incorporated by reference to Exhibit 4.15 to the Registrant’s Registration Statement on Form S-1/A (No. 333-220372) filed on May 14, 2018). 4.14 Form of Warrant (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on March 2, 2020). 4.15 Form of Warrant (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on April 28, 2020). 4.16 Form of Warrant (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on June 3, 2020). 4.17 Form of Warrant Agent Agreement, inclusive of Form of Warrant (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on July 21, 2020). 4.18 Form of Private Placement Warrant (incorporated by reference to Exhibit 4.18 to the Registrant’s Registration Statement on Form S-1/A (No. 333-239658) filed on July 16, 2020). 4.19 Form of Warrant (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on October 8, 2020). 4.20 Form of Warrant Agent Agreement (including Form of Warrant Certificate) (incorporated by reference to Exhibit 4.20 to the Registrant’s Registration Statement on Form S-1/A (No. 333 -251528) filed on February 5, 2021). 4.21 Form of Pre-Funded Warrant (Form of Placement Agency Agreement, dated September 3, 2021 (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on September 8, 2021). 4.22 Form of Warrant (Form of Placement Agency Agreement, dated September 3, 2021 (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed on September 8, 2021). 4.23 Description of the Company’s Securities Registered under Section 12 of the Exchange Act (incorporated by reference to Exhibit 4.21 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2020) 10.1 Form of Indemnification Agreement (incorporated by reference to Exhibit 10.30 to the Registrant’s Registration Statement on Form S-1/A (No. 333-220372) filed on December 14, 2017). 56 10.2 Employment Agreement, dated as of March 30, 2018, by and between the Registrant and Robert A. Berman. (incorporated by reference to Exhibit 10.47 to the Registrant’s Registration Statement on Form S-1/A (No. 333-220372) filed on April 16, 2018). 10.3 Amended and Restated 2016 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.50 to the Registrant’s Registration Statement on Form S-1/A (No. 333-220372) filed on May 14, 2018). 10.4 Amendment No. 1 to Amended and Restated 2016 Omnibus Incentive Plan. (incorporated by reference to Exhibit 10.4 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2020). 10.5 Amendment No. 2 to Amended and Restated 2016 Omnibus Incentive Plan.* 10.6 Form of Stock Option Grant under Amended and Restated 2016 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.44 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2018). 10.7 Form of Restricted Stock Unit under Amended and Restated 2016 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.45 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2018). 10.8 Employment Agreement, dated as of July 26, 2019, by and between enVVeno Medical Corporation and Marc Glickman, M.D. (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on August 1, 2019). 10.9 Form of Securities Purchase Agreement dated as of February 25, 2020 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on March 2, 2020). 10.10 Form of Securities Purchase Agreement, dated as of April 24, 2020 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on April 28, 2020). 10.11 Form of Placement Agency Agreement, dated as of April 24, 2020, by and between enVVeno Medical Corporation and Spartan Capital Securities, LLC (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on April 28, 2020). 10.12 Form of Securities Purchase Agreement dated as of June 1, 2020 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on June 3, 2020). 10.13 Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.53 to the Registrant’s Registration Statement on Form S-1/A (No. 333-239658) filed on July 16, 2020). 10.14 Form of Registration Rights Agreement (incorporated by reference to Exhibit 10.54 to the Registrant’s Registration Statement on Form S-1/A (No. 333-239658) filed on July 16, 2020). 10.15 Form of Securities Purchase Agreement, dated as of October 7, 2020 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on October 8, 2020). 10.16 Form of Placement Agency Agreement, dated as of October 7, 2020 (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on October 8, 2020). 10.17 Employment Agreement, dated as of February 19, 2021, by and between enVVeno Medical Corporation and Craig Glynn (incorporated by reference to Exhibit 10.18 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2020). 10.18 At-the-Market Offering Agreement, dated August 12, 2021, by and between enVVeno Medical Corporation and Ladenburg Thalmann & Co. Inc. (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on August 12, 2021). 10.19 Form of Securities Purchase Agreement, dated September 3, 2021 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on September 8, 2021). 10.20 Form of Placement Agency Agreement, dated September 3, 2021 (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on September 8, 2021). 14.1 Code of Conduct (incorporated by reference to Exhibit 14.1 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2020). 21.1 Subsidiaries of the registrant incorporated by reference to Exhibit 21.1 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2020). 23.1 Consent of Marcum LLP, independent registered public accounting firm* 31.1 Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act. * 31.2 Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Sarbanes-Oxley Act. * 32 Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act** 101.INS Inline XBRL Instance Document* 101.SCH Inline XBRL Taxonomy Extension Schema Document* 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document* 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document* 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document* 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document* * Filed herewith. ** Furnished and not filed herewith. ITEM 16. Form 10-K Summary Not applicable 57 SIGNATURES Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: March 28, 2022 ENVVENO MEDICAL CORPORATION By: /s/ Robert Berman Robert Berman Chief Executive Officer (Principal Executive Officer) By: /s/ Craig Glynn Craig Glynn Chief Financial Officer (Principal Financial and Accounting Officer) 58 ENVVENO MEDICAL CORPORATION ANNUAL REPORT ON FORM 10-K INDEX TO AUDITED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm (PCAOB: 688 ) F-2 Balance Sheets as of December 31, 2021 and 2020 F-3 Statements of Operations for the Years Ended December 31, 2021 and 2020 F-4 Statements of Stockholders’ Equity for the Years Ended December 31, 2021 and 2020 F-5 Statements of Cash Flows for the Years Ended December 31, 2021 and 2020 F-6 Notes to Financial Statements F-8 F- 1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and Board of Directors of enVVeno Medical Corporation Opinion on the Financial Statements We have audited the accompanying balance sheets of enVVeno Medical Corporation (the “Company”) as of December 31, 2021 and 2020, the related statements of operations, changes in stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2021, and the related notes (collectively referred to as 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, 2021 and 2020, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America . 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 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 the 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 audits 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. 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/ Marcum llp Marcum llp We have served as the Company’s auditor since 2015. New York, NY March 28, 2022 F- 2 ENVVENO MEDICAL CORPORATION f/k/a HANCOCK JAFFE LABORATORIES, INC. BALANCE SHEETS 2021 2020 December 31, 2021 2020 Assets Current Assets: Cash and cash equivalents $ 54,727,740 $ 9,334,584 Prepaid expenses and other current assets 312,350 234,467 Total Current Assets 55,040,090 9,569,051 Property and equipment, net 617,855 398,967 Operating lease right-of-use assets, net 1,986,704 539,974 Security deposits and other assets 54,493 29,843 Total Assets $ 57,699,142 $ 10,537,835 Liabilities and Stockholders’ Equity Current Liabilities: Accounts payable $ 560,083 $ 1,390,362 Accrued expenses and other current liabilities 728,876 1,168,969 Note Payable - 312,700 Current portion of operating lease liabilities 291,104 314,202 Total Current Liabilities 1,580,063 3,186,233 Long-term operating lease liabilities 1,714,871 253,746 Total Liabilities 3,294,934 3,439,979 Commitments and Contingencies (Note 9) - Stockholders’ Equity: Preferred stock, par value $ 0.00001 , 10,000,000 shares authorized: no shares issued or outstanding - - Common stock, par value $ 0.00001 , 250,000,000 shares authorized, 9,469,850 and 2,541,529 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively 95 25 Additional paid-in capital 136,255,346 72,421,242 Accumulated deficit ( 81,851,233 ) ( 65,323,411 ) Total Stockholders’ Equity 54,404,208 7,097,856 Total Liabilities and Stockholders’ Equity $ 57,699,142 $ 10,537,835 The accompanying notes are an integral part of these financial statements. F- 3 ENVVENO MEDICAL CORPORATION f/k/a HANCOCK JAFFE LABORATORIES, INC. STATEMENTS OF OPERATIONS 2021 2020 For the Years Ended December 31, 2021 2020 Operating Expenses: Selling, general and administrative expenses $ 11,164,858 $ 4,882,877 Research and development expenses 5,727,645 4,252,249 Loss from Operations ( 16,892,503 ) ( 9,135,126 ) Other (Income) Expense: Gain on extinguishment of note payable ( 312,700 ) - Interest (income) expense, net ( 18,709 ) ( 3,739 ) Change in fair value of derivative liabilities - ( 211,807 ) Other (income) expense ( 33,272 ) 215,906 Total Other (Income) Expense ( 364,681 ) 360 Net Loss ( 16,527,822 ) ( 9,135,486 ) Deemed dividend to Series C Preferred Stockholders - ( 607,220 ) Net Loss Attributable to Common Stockholders $ ( 16,527,822 ) $ ( 9,742,706 ) Net Loss Per Basic and Diluted Common Share: $ ( 1.90 ) $ ( 7.54 ) Weighted Average Number of Common Shares Outstanding: Basic and Diluted 8,679,824 1,291,469 The accompanying notes are an integral part of these financial statements. F- 4 ENVVENO MEDICAL CORPORATION f/k/a HANCOCK JAFFE LABORATORIES, INC. STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY Shares Amount Shares Amount Capital Deficit Equity Series C Convertible Preferred Stock Common Stock Additional Paid-in Accumulated Total Stockholders’ Shares Amount Shares Amount Capital Deficit Equity Balance at January 1, 2020 - $ - 717,274 $ 7 $ 57,177,858 $ ( 56,187,925 ) $ 989,940 Common stock issued in private placement offering [1] 52,000 1 24,304 - 24,305 Common stock issued in public offerings [2] 1,148,996 11 9,847,890 - 9,847,901 Preferred stock issued in private placement [3] 4,205,406 42 - - 1,358,060 - 1,358,102 Preferred stock exchange to common stock ( 4,205,406 ) ( 42 ) 243,125 2 40 - - Common stock issued for exercise of warrants 367,660 4 2,985,751 - 2,985,755 Fair Value of Warrants Issued Shares issued in satisfaction of trade payable Shares issued in satisfaction of trade payable, shares Common stock issued in At the Market Transactions (ATM) Common stock issued in At the Market Transactions (ATM), shares Common stock issued in registered direct offering Common stock issued in registered direct offering, shares Reclassification of Warrant Derivatives to Equity - - 334,230 - 334,230 Share-Based Compensation 12,474 - 693,109 - 693,109 Net loss - - - ( 9,135,486 ) ( 9,135,486 ) Balance at December 31, 2020 - $ - 2,541,529 $ 25 $ 72,421,242 $ ( 65,323,411 ) $ 7,097,856 [1] net of offering costs of $ 0.1 million. [2] net of offering costs of $ 2.2 million. [3] net of offering costs of $ 0.2 million. Shares Amount Capital Deficit Equity Common Stock Additional Paid-in Accumulated Total Stockholders’ Shares Amount Capital Deficit Equity Balance at January 1, 2021 2,541,529 $ 25 $ 72,421,242 $ ( 65,323,411 ) $ 7,097,856 Common stock issued in public offering 5,914,284 59 38,127,717 - 38,127,776 Common stock issued for exercise of warrants 52,827 1 245,249 - 245,250 Fair Value of Warrants Issued - - 211,976 - 211,976 Shares issued in satisfaction of trade payable 5,772 - 37,576 - 37,576 Common stock issued in At The Market Transactions (ATM) 170,963 2 960,273 - 960,275 Common stock issued in registered direct offering 781,615 8 18,273,583 - 18,273,591 Shared-Based Compensation 2,860 - 5,977,730 - 5,977,730 Net loss - - - ( 16,527,822 ) ( 16,527,822 ) Balance at December 31, 2021 9,469,850 95 136,255,346 ( 81,851,233 ) 54,404,208 The accompanying notes are an integral part of these financial statements. F- 5 ENVVENO MEDICAL CORPORATION f/k/a HANCOCK JAFFE LABORATORIES, INC. STATEMENTS OF CASH FLOWS 2021 2020 For the Years Ended December 31, 2021 2020 Cash Flows from Operating Activities Net loss $ ( 16,527,822 ) $ ( 9,135,486 ) Adjustments to reconcile net loss to net cash used in operating activities: Share-based compensation 5,999,178 881,213 Depreciation and amortization 149,002 97,549 Amortization of right-of-use assets 303,907 286,423 Change in fair value of derivatives - ( 211,807 ) Gain on extinguishment of note payable ( 312,700 ) - Loss on disposition of fixed assets - 27,802 Changes in operating assets and liabilities: Prepaid expenses and other current assets ( 37,883 ) ( 117,820 ) Security deposit and other assets ( 24,650 ) - Accounts payable ( 832,703 ) 169,173 Accrued expenses ( 249,565 ) 614,428 Payments on lease liabilities ( 312,610 ) ( 288,685 ) Total adjustments 4,681,976 1,458,276 Net Cash Used in Operating Activities ( 11,845,846 ) ( 7,677,210 ) Cash Flows from Investing Activities Purchase of property and equipment ( 367,890 ) ( 180,291 ) Net Cash Used in Investing Activities ( 367,890 ) ( 180,291 ) Cash Flows from Financing Activities Proceeds from private placement, net - 570,341 Proceeds from shares issued under ATM 960,275 - Proceeds from registered direct offering 18,273,591 - Proceeds from public offerings, net 38,127,776 9,847,901 Proceeds from preferred stock issued in private placement, net - 1,358,102 Proceeds from issuance of note payable - 312,700 Proceeds from warrant exercises 245,250 2,985,755 Net Cash Provided by Financing Activities 57,606,892 15,074,799 Net Increase (Decrease) in Cash, Cash Equivalent, and Restricted Cash 45,393,156 7,217,298 Cash, cash equivalents and restricted cash - Beginning of year 9,334,584 2,117,286 Cash, cash equivalents and restricted cash - End of year $ 54,727,740 $ 9,334,584 The accompanying notes are an integral part of these financial statements. F- 6 ENVVENO MEDICAL CORPORATION f/k/a HANCOCK JAFFE LABORATORIES, INC. STATEMENTS OF CASH FLOWS - continued Year Ended December 31, 2021 2020 Supplemental Disclosures of Cash Flow Information: Cash Paid During the Period For: Interest paid $ - $ - Income taxes paid $ - $ - Non-Cash Investing and Financing Activities Gain on extinguishment of note payable $ ( 312,700 ) $ - Fair value of common stock issued in satisfaction of trade payable 35,576 - Fair value of warrants issued to Preferred Exchange Participants, SABR and re-priced placement agent warrant ( 211,976 ) - Derivative liabilities reclassified to equity $ - $ 334,229 The accompanying notes are an integral part of these financial statements. F- 7 ENVVENO MEDICAL CORPORATION f/k/a HANCOCK JAFFE LABORATORIES, INC. NOTES TO FINANCIAL STATEMENTS Note 1 – Business Organization and Nature of Operations enVVeno Medical Corporation is a med-tech company focused on improving the standard of care in the treatment of venous disease. We are developing tissue-based solutions that are designed to be life sustaining or life enhancing for patients with deep venous Chronic Venous Insufficiency (CVI). CVI occurs when valves inside of the veins of the leg fail, resulting in insufficient blood being returned to the heart. Our 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 lead product is a porcine based device to be surgically implanted in our deep venous system of the leg, and is called the VenoValve®. The VenoValve is currently being evaluated in the SAVVE U.S. pivotal trial for the purpose of obtaining approval to market and sell the device from the U.S. Food and Drug Administration (“FDA”). Our team of officers and directors has been affiliated with numerous medical devices that have received FDA approval or CE marking and have been commercially successful. We currently lease a 14,507 sq. ft. manufacturing facility in Irvine, California, where we manufacture medical devices for our clinical trials, and which has capacity for commercial manufacturing. On September 21, 2021, we announced that we were changing our name from Hancock Jaffe to enVVeno Medical Corporation and that our development strategy is to focus on the treatment of venous disease. In addition to the VenoValve, we announced that we have begun development of a second device for the treatment of venous disease which we are calling enVVe. In connection with this change in strategy, we indicated that we are not pursuing further development of the CoreoGraft, which is now outside of our primary focus area. Note 2 – Management’s Liquidity Plan As of December 31, 2021, the Company had a cash balance of $ 54.7 million and working capital of $ 53.5 million. Although the Company expects to continue incurring losses for the foreseeable future and may need to raise additional capital to sustain its operations, pursue its product development initiatives and penetrate markets for the sale of its products, Management believes that our capital resources at December 31, 2021, are sufficient to meet our obligations as they become due within one year after the date of this Annual Report, and sustain operations. Note 3 – Significant Accounting Policies Use of Estimates The 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. Property and Equipment, Net Property and equipment are stated at cost, net of accumulated depreciation using the straight-line method over their estimated useful lives, which range from 5 to 7 years. Leasehold improvements are amortized over the lesser of (a) the useful life of the asset; or (b) the remaining lease term. Expenditures for maintenance and repairs, which do not extend the economic useful life of the related assets, are charged to operations as incurred, and expenditures, which extend the economic life are capitalized. When assets are retired, or otherwise disposed of, the costs and related accumulated depreciation or amortization are removed from the accounts and any gain or loss on disposal is recognized. Impairment of Long-lived Assets The Company reviews for the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when estimated future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount. F- 8 ENVVENO MEDICAL CORPORATION f/k/a HANCOCK JAFFE LABORATORIES, INC. NOTES TO FINANCIAL STATEMENTS Income Taxes The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2021 and December 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. Fair Value of Financial Instruments The Company measures the fair value of financial assets and liabilities based on the guidance of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) ASC 820 “Fair Value Measurements and Disclosures” (“ASC 820”) which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. FASB ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1 Quoted prices available in active markets for identical assets or liabilities trading in active markets. Level 2 Observable inputs other than quoted prices included in Level 1, such as quotable prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar valuation techniques that use significant unobservable inputs. Financial instruments, including accounts payable are carried at cost, which management believes approximates fair value due to the short-term nature of these instruments. Derivative liabilities are accounted for at fair value on a recurring basis. F- 9 ENVVENO MEDICAL CORPORATION f/k/a HANCOCK JAFFE LABORATORIES, INC. NOTES TO FINANCIAL STATEMENTS Derivative Liabilities Derivative financial instruments are recorded as a liability at fair value and are marked-to-market as of each balance sheet date. The change in fair value at each balance sheet date is recorded as a change in the fair value of derivative liabilities on the statement of operations for each reporting period. The fair value of the derivative liabilities was determined using a Monte Carlo simulation, incorporating observable market data and requiring judgment and estimates. The Company reassesses the classification of the financial instruments at each balance sheet date. If the classification changes as a result of events during the period, the financial instrument is marked to market and reclassified as of the date of the event that caused the reclassification. Net Loss per Share The Company computes basic and diluted loss per share by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period including warrants exercisable for little or no cash consideration. Net loss attributable to common stockholders in 2020 consists of net loss adjusted for the convertible preferred stock deemed dividend resulting from the 8% cumulative dividend on the Preferred Stock (see Note 10 - Stockholders Equity Series C Convertible Preferred Stock ). Basic and diluted net loss per common share are the same since the inclusion of common stock issuable pursuant to the exercise of warrants and options, would have been anti-dilutive. F- 10 ENVVENO MEDICAL CORPORATION f/k/a HANCOCK JAFFE LABORATORIES, INC. NOTES TO FINANCIAL STATEMENTS Stock-Based Compensation The Company has an Equity Incentive Plan under which the Board of Directors may grant restricted stock or stock options to employees and nonemployees. The accounting treatment for share-based payments to employees and non-employees is substantially equivalent. Share-based compensation cost is recorded for all option grants and awards of non-vested stock based on the grant date fair value of the award, and is recognized over the service period required for the award. The fair value of the Company’s stock options is estimated at the date of grant using the Black-Scholes based option valuation model. For the expected term, the Company uses SEC Staff Accounting Bulletin No. 107 simplified method for “plain vanilla” options with following characteristics: (i) the share options are granted at the market price on the grant date; (ii) exercisability is conditional on performing service through the vesting date on most options; (iii) if an employee terminates service prior to vesting, the employee would forfeit the share options; (iv) if an employee terminates service after vesting, the employee would have 30 to 90 days to exercise the share options; and (v) the share options are nontransferable and nonhedgeable. The volatility assumption is based on the historical volatility of the Company’s common stock with an equivalent remaining expected term. The dividend yield assumption is based on the Company’s history and expectation of future dividend payouts on the common stock. The risk-free interest rate is based on the implied yield available on U.S. treasury zero-coupon issues with an equivalent remaining expected term. For option grants without performance conditions, the Company recognizes compensation expense over the requisite service period ratably, recognizing expense for each tranche of each grant starting on the grant date. For grants that have both service and performance conditions, the Company recognizes compensation expense using the graded attribution method. Compensation expense for grants with performance conditions is recognized only for those awards expected to vest. Forfeitures of unvested stock options are recorded when they occur. Concentrations The 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 $ 54.5 million and $ 9.1 million as of December 31, 2021 and 2020, respectively. Recently Adopted Accounting Standards In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes, which is intended to simplify various aspects of the income tax accounting guidance, including requirements such as tax basis step-up in goodwill obtained in a transaction that is not a business combination, ownership changes in investments, and interim-period accounting for enacted changes in tax law. ASU 2019-12 is effective for public business entities for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years, and early adoption is permitted. The adoption of this standard did not have a material impact on our financial statements. Recent Accounting Standards In January 2020, the FASB issued Accounting Standards Update 2020-01 (“ASU 2020-01”) Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815). The amendments in ASU 2020-01 clarify certain interactions between the guidance to account for certain equity securities under Topic 321, the guidance to account for investments under the equity method of accounting in Topic 323, and the guidance in Topic 815, which could change how an entity accounts for an equity security under the measurement alternative or a forward contract or purchased option to purchase securities that, upon settlement of the forward contract or exercise of the purchased option, would be accounted for under the equity method of accounting or the fair value option in accordance with Topic 825, Financial Instruments. These amendments improve current GAAP by reducing diversity in practice and increasing comparability of the accounting for these interactions. The amendments in this update are effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The adoption of this standard will not have a material impact on our financial statements and related disclosures. In August 2020, the FASB issued Accounting Standards Update 2020-06 (“ASU 2020-06”), Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The amendments in ASU 2020-06 include guidance on convertible instruments and the derivative scope exception for contracts in an entity’s own equity and simplifies the accounting for convertible instruments which include beneficial conversion features or cash conversion features by removing certain separation models in Subtopic 470-20. Additionally, ASU 2020-06 will require entities to use the “if-converted” method when calculating diluted earnings per share for convertible instruments. The amendments in this update are effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. We do not expect the adoption of this standard to have a material impact on our financial statements and related disclosures. In May 2021, the FASB issued Accounting Standards Update 2021-04 (“ASU No. 2021-04”), Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. The guidance in ASU 2021-04 requires the issuer to treat a modification of an equity-classified written call option (the “option”) that does not cause the option to become liability-classified as an exchange of the original option for a new option. This guidance applies whether the modification is structured as an amendment to the terms and conditions of the option or as termination of the original option and issuance of a new option. The amendments in this update are effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. We do not expect the adoption of this standard to have a material impact on our financial statements and related disclosures. In October 2021, the FASB issued Accounting Standards Update 2021-08 (“ASU No. 2021-08”), Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, to require that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. The amendments in this update should be applied prospectively and are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We do not expect the adoption of this standard to have a material impact on our financial statements and related disclosures. F- 11 ENVVENO MEDICAL CORPORATION f/k/a HANCOCK JAFFE LABORATORIES, INC. NOTES TO FINANCIAL STATEMENTS Note 4 – Property and Equipment As of December 31, 2021, and 2020, property and equipment consist of the following: Schedule of Property and Equipment 2021 2020 December 31, 2021 2020 Laboratory equipment $ 522,539 $ 320,830 Furniture and fixtures 124,093 98,392 Computer equipment 164,298 65,078 Leasehold improvements 192,668 158,092 Software 251,163 244,479 Total property and equipment 1,254,761 886,871 Less: accumulated depreciation ( 636,906 ) ( 487,904 ) Property and equipment, net $ 617,855 $ 398,967 Depreciation expense was $ 0.1 million for the years ended December 31, 2021 and 2020. Depreciation expense is reflected in general and administrative expenses in the accompanying statements of operations. Note 5 – Right-of-Use Assets and Lease Liabilities On November 17, 2021, the Company amended its operating lease for its manufacturing facility in Irvine, California, to extend the term an additional 60 months from its September 30, 2022 expiration date to a new expiration date of September 30, 2027. The initial lease rate at the date of the amendment was $ 30,206 per month with escalating payments. In connection with the lease, the Company is obligated to pay $ 7,254 monthly for operating expenses for building repairs and maintenance. The Company has no other operating or financing leases with terms greater than 12 months . The Company determined the lease liabilities using the Company’s estimated incremental borrowing rate of 3.95 % to estimate the present value of the remaining monthly lease payments. Our operating lease cost is as follows: Schedule of Operating Lease Cost For the Year Ended December 31, 2021 Operating lease cost $ 345,857 Supplemental cash flow information related to our operating lease is as follows: Schedule of Supplemental Cash Flow Information Related to Operating Lease For the Year Ended December 31, 2021 Operating cash flow information: Cash paid for amounts included in the measurement of lease liabilities $ 354,561 Remaining lease term and discount rate for our operating lease is as follows: Schedule of Operating Remaining Lease Term and Discount Rate December 31, 2021 Remaining lease term 5.7 years Discount rate 3.95 % Maturity of our lease liabilities by fiscal year for our operating lease is as follows: Schedule of Maturity of Lease Liabilities Year ended December 31, 2022 $ 365,190 Year ended December 31, 2023 376,146 Year ended December 31, 2024 387,435 Year ended December 31, 2025 399,054 Year ended December 31, 2026 411,024 Year ended December 31, 2027 315,153 Total $ 2,254,002 Less: Imputed interest ( 248,027 ) Present value of our lease liability $ 2,005,975 F- 12 ENVVENO MEDICAL CORPORATION f/k/a HANCOCK JAFFE LABORATORIES, INC. NOTES TO FINANCIAL STATEMENTS Note 6 – Accrued Expenses As of December 31, 2021 and 2020, accrued expenses consist of the following: Schedule of Accrued Expenses 2021 2020 December 31, 2021 2020 Accrued compensation costs $ 524,529 $ 473,799 Accrued professional fees 84,375 79,650 Accrued research and development 59,922 368,809 Accrued warrants - 188,104 Other 60,050 58,607 Accrued expenses $ 728,876 $ 1,168,969 Note 7 – Note Payable On April 12, 2020, the Company obtained a loan (the “Loan”) in the amount of $ 312,700 , pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act, which was enacted March 27, 2020. The Loan, which was in the form of a Note dated April 12, 2020, was to mature on April 12, 2022 , and bore interest at a rate of 1 % per annum, payable monthly commencing on November 12, 2020. On September 8, 2021, the Company was notified the Loan and any accrued interest had been forgiven. In connection with this, the Company recorded a gain on extinguishment of debt of $ 312,700 . Note 8 – Income Taxes The following summarizes the Company’s income tax provision (benefit): Schedule of Income Tax Provision (Benefit) For the Years Ended December 31, 2021 2020 Federal: Current $ - $ - Deferred ( 2,700,372 ) ( 1,828,584 ) State and local: Current - - Deferred ( 900,124 ) ( 609,528 ) Current and Deferred Federal, State and Local, Tax Expense (Benefit) ( 3,600,496 ) ( 2,438,112 ) Change in valuation allowance 3,600,496 2,438,112 Income tax provision (benefit) $ - $ - The reconciliation between the U.S. statutory federal income tax rate and the Company’s effective tax rate for the year’s ended December 31, 2021 and 2020 is as follows: Schedule of Effective Income Tax Rate Reconciliation For the Years Ended December 31, 2021 2020 Tax benefit at federal statutory rate ( 21.0 ) % ( 21.0 ) % State taxes, net of federal benefit ( 7.0 ) % ( 7.0 ) % Nondeductible compensation 6.2 % - Permanent differences ( 0.5 )% 2.0 % True up adjustments 0.5 % ( 0.7 ) % Change in valuation allowance 21.8 % 26.7 % Effective income tax rate 0.0 % 0.0 % F- 13 ENVVENO MEDICAL CORPORATION f/k/a HANCOCK JAFFE LABORATORIES, INC. NOTES TO FINANCIAL STATEMENTS Significant components of the Company’s deferred tax assets at December 31, 2021 and 2020 are as follows: Schedule of Deferred Tax Assets and Liabilities 2021 2020 December 31, 2021 2020 Deferred tax assets: Net operating loss carryforwards $ 12,881,729 $ 9,811,086 Research and development credit carryforwards 185,680 185,680 Intangible assets 276,184 305,027 Operating lease liability 78,194 159,025 Stock-based compensation 923,540 311,304 Impairment loss 136,612 136,612 Total gross deferred tax assets 14,481,939 10,908,734 Deferred tax liabilities Operating lease asset ( 70,994 ) ( 151,193 ) Property and equipment ( 102,107 ) ( 49,199 ) Total net deferred tax assets 14,308,838 10,708,342 Less: valuation allowance ( 14,308,838 ) ( 10,708,342 ) Total $ - $ - ASC 740 requires that the tax benefit of net operating losses, temporary differences and credit carryforwards be recorded as an asset to the extent that management assesses that realization is “more likely than not.” Realization of the future tax benefits is dependent on the Company’s ability to generate sufficient taxable income within the carryforward period. Because of the Company’s history of operating losses, management believes that recognition of the deferred tax assets arising from the above listed future tax benefits is currently not more likely than not to be realized and, accordingly, has provided a full valuation allowance. The valuation allowance increased by $ 3.6 million and $ 2.4 million during the years ended December 31, 2021 and 2020, respectively. Under Section 382 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an “ownership change” (generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period), the corporation’s ability to use its pre-change net operating loss, or NOL, carryforwards and other pre-change tax attributes to offset its post-change income taxes may be limited. In accordance with Section 382 of the Internal Revenue Code, the usage of the Company’s NOL carry forwards are subject to annual limitations due to a greater than 50 % ownership change in 2021. At December 31, 2021 and 2020, the Company had post-ownership change net operating loss carryforwards for federal income tax purposes of approximately $ 45.7 million and $ 35.0 million, respectively. Pre-2018 federal NOLs of approximately $ 12.0 million may be carried forward for twenty years and begin to expire in 2029. Based on the 2021 ownership change, the Company expects $ 7.6 million of its pre-2018 federal NOLs to expire unused. Under the Tax Act, post-2017 federal NOLs in the aggregate amount of $ 33.0 million can be carried forward indefinitely and the annual limit of deduction equals 80 % of taxable income. However, to the extent the Company utilizes its NOL carryforwards in the future, the tax years in which the attribute was generated may still be adjusted upon examination by the Internal Revenue Service or state tax authorities of the future period tax return in which the attribute is utilized. The Company also has federal research and development tax credit carryforwards of approximately $ 0.2 million which begin to expire in 2027. As of December 31, 2021 and 2020, the Company had net operating loss carryforwards for state income tax purposes of approximately $ 45.7 million and $ 35.0 million, respectively, which can be carried forward for twenty years and begin to expire in 2028. The Company files income tax returns in the U.S. federal jurisdiction as well as California and local jurisdictions and is subject to examination by those taxing authorities. The Company’s federal income taxes for the years beginning in 2018 remain subject to examination. The Company’s state and local income tax returns for the years beginning in 2017 remain subject to examination. No tax audits were initiated during 2021 or 2020. Management has evaluated and concluded that there were no material uncertain tax positions requiring recognition in the Company’s financial statements as of December 31, 2021 and 2020. The Company does not expect any significant changes in its unrecognized tax benefits within twelve months of the reporting date. The Company’s policy is to classify assessments, if any, for tax related interest as interest expense and penalties as general and administrative expenses in the statements of operations. On March 27, 2020, the CARES Act was enacted in response to COVID-19 pandemic. Under ASC 740, the effects of changes in tax rates and laws are recognized in the period which the new legislation is enacted. The CARES Act made various tax law changes including among other things (i) increasing the limitation under Section 163(j) of the Internal Revenue Code of 1986, as amended (the “IRC”) for 2019 and 2020 to permit additional expensing of interest (ii) enacting a technical correction so that qualified improvement property can be immediately expensed under IRC Section 168(k), (iii) making modifications to the federal net operating loss rules including permitting federal net operating losses incurred in 2018, 2019, and 2020 to be carried back to the five preceding taxable years in order to generate a refund of previously paid income taxes and (iv) enhancing the recoverability of alternative minimum tax credits. The Company has evaluated the impact CARES Act on its provision for income taxes and determined there is not a significant impact to income taxes because of the CARES Act. On June 29, 2020, California’s Governor Newsom signed AB85 suspending California net operating loss (“NOL”) utilization and imposing a cap on the amount of business incentives tax credits (R&D credit) for tax years 2020-2022. Given the tax loss in 2020 and an expected tax loss for 2021, the suspension will not have an impact on the Company’s NOL in California. On February 9, 2022, Mr. Newsom signed SB113 which removes the restrictions in AB85 effective for the 2022 tax year. F- 14 ENVVENO MEDICAL CORPORATION f/k/a HANCOCK JAFFE LABORATORIES, INC. NOTES TO FINANCIAL STATEMENTS Note 9 – Commitments and Contingencies Litigation Claims and Assessments In the normal course of business, the Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. The Company records legal costs associated with loss contingencies as incurred and accrues for all probable and estimable settlements. Robert Rankin Complaints On July 9, 2020, the Company was served with a civil complaint filed in the Superior Court for the State of California, County of Orange by a former employee, Robert Rankin, who resigned his employment on or about March 30, 2020. The case is entitled Rankin v. Hancock Jaffe Laboratories, Inc. et al., Case No. 30-2020-01146555-CU-WR-CJC and was filed on May 27, 2020. On September 3, 2020 the Company and its Chief Executive Officer were served with a second complaint filed in the Superior Court for the State of California, County of Orange by Mr. Rankin. The case is entitled Rankin v. Hancock Jaffe Laboratories, Inc. et al., Case No. 30-2020-01157857 and was filed on August 31, 2020. The complaints assert several causes of action including a cause of action for failure to timely pay Mr. Rankin’s accrued and unused vacation and three months’ severance under his July 16, 2018 employment agreement, defamation, unlawful labor code violations, sex-based discrimination, and unfair competition, and seeks damages for lost wages, emotional and mental distress, consequential damages, punitive damages and attorney’s fees and costs. The Company has denied all claims in both matters (which have now been consolidated) and has filed a counterclaim asserting that Rankin has breached his employment agreement with the Company to the Company’s damage. The Company continues to believe it has meritorious defenses to both matters. As of the date of these financial statements, the amount of loss associated with these complaints, if any, cannot be reasonably estimated. Accordingly, no amounts related to these complaints are accrued as of December 31, 2021. Note 10 – Stockholders’ Equity On November 30, 2020, the Company”) effected a one-for-twenty-five (1:25) reverse stock split (the “Reverse Stock Split”) of the shares of the Company’s common stock, par value $ 0.00001 per share (the “Common Stock”). As a result of the Reverse Stock Split, every twenty-five shares of issued and outstanding Common Stock was automatically combined into one issued and outstanding share of Common Stock, without any change in the par value per share. No fractional shares were issued as a result of the Reverse Stock Split and any fractional shares resulting from the Reverse Stock Split were rounded up to the nearest whole share. Equity Issuances During 2021 and 2020 the Company has completed various equity transactions to raise capital through the placement of its common and preferred stock. The following table provides an overview of these transactions. Schedule of Equity Transactions to Raise Capital Through the Placement Date Description Type Number of shares Net Proceeds 2020 February 25, 2020 Private placement Common Stock 52,000 $ 570,341 April 28, 2020 Registered Direct Offering Common Stock 75,472 $ 811,641 June 3, 2020 Registered Direct Offering Common Stock 117,216 $ 1,161,334 July 17, 2020 Public Offering Common Stock 575,000 $ 3,881,907 July 17, 2020 Private Placement Preferred Stock 4,205,406 $ 1,358,099 October 9, 2020 Registered Direct Offering Common Stock 381,308 $ 4,450,500 Total $ 12,233,822 2021 February 11, 2021 Public Offering Common Stock 5,914,284 $ 38,127,776 August 2021 At-the-Market Equity Program Common Stock 170,963 $ 970,575 September 9, 2021 Registered Direct Offering Common Stock 781,615 $ 18,273,591 Total $ 57,371,942 F- 15 ENVVENO MEDICAL CORPORATION f/k/a HANCOCK JAFFE LABORATORIES, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS Series C Convertible Preferred Stock On July 17, 2020, the Company issued 4,205,406 shares of Preferred Stock in a private placement. On November 17, 2020, the holders of the Preferred Stock purchased in the July 17, 2020 private placement entered exchange agreements with the Company whereby the holders agreed to exchange all of their 4,205,406 shares of Preferred Stock for 243,125 shares of common stock. This was the original conversion rate of the Preferred Stock after giving effect to the 25:1 reverse split of the Company’s common stock. While the Preferred Stock was outstanding, the holders of the Company’s Preferred Stock could vote with holders of the Common Stock, and with any other shares of preferred stock that vote with the Common Stock, with each holder of Preferred Stock being entitled to one vote per share of Preferred Stock, and were entitled to receive 8 % non-compounding cumulative dividends, payable when, as and if declared by the Board of Directors. The Series C Preferred Stock ranked senior to the common stock as to dividends and the distribution of assets in the event of any liquidation, dissolution, or winding up of the Company, either voluntary or involuntary, or any sale of the Company. In the event of any liquidation, dissolution, or winding up of the Company, either voluntary or involuntary, or any sale of the Company, the holders of Preferred Stock were entitled to receive, before and in preference to any distribution of any of the assets to the holders of the common stock, or any other series of the Company’s preferred stock that would then be junior to the Preferred Stock, an amount per share equal to $0.37 for each outstanding share of Preferred Stock (the “Original Series C Issue Price”), plus all accrued but unpaid dividends thereon through the date of such event. In certain circumstances, the holders of Preferred Stock were entitled to receive a liquidation preference payment of $ 0.37 per share of Preferred Stock, plus accrued and unpaid dividends. Those accrued and unpaid dividends were $ 23,859 in the aggregate as of September 30, 2020 and were reflected as a deemed dividend in determining net loss available to common stockholders during that period. As a result of the exchange of the Preferred Stock for common stock, it is no longer outstanding (see below). The liquidation preference of the Preferred Stock was subordinate and ranks junior to all indebtedness of the Company. The Company had the ability to elect to convert the Preferred Stock to common stock in the event the Company either (i) consummated a merger, or (ii) raised an aggregate of at least $8,000,000 in gross proceeds in a transaction or series of transactions within any twelve (12) month period. In the event the Company elected to affect such a conversion, each share of Series C Preferred Stock would have been convertible into 0.05781 shares of common stock. F- 16 ENVVENO MEDICAL CORPORATION f/k/a HANCOCK JAFFE LABORATORIES, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS The Company determined that the Preferred Stock represented permanent equity due to the absence of a redemption feature and that the embedded conversion option was clearly and closely related to the equity host and did not require bifurcation. The $ 2,431,250 fair value of the warrants was calculated using the Black-Scholes option pricing model, using the $ 11.00 stock price, an expected term of 7.0 years, volatility of 118.7 %, a risk-free rate of 0.47 % and expected dividends of 0.00 %. The $ 1,556,000 of gross proceeds were allocated on a relative fair value basis of $ 607,220 to the Preferred Stock and $ 948,781 to the warrants. The Preferred Stock includes a contingent beneficial conversion feature (“BCF”) which was valued at its $ 2,067,155 intrinsic value using the commitment date stock price of $ 11.00 per share and the effective conversion price of $2.50 per share, but was limited to the $607,220 of proceeds that were allocated to the Preferred Stock . The November 17, 2020 exchange agreements resolved the contingency related to the BCF and, accordingly, the contingent BCF was recognized as a deemed dividend for the purposes of determining the net loss attributable to common stockholders for calculating net loss per share. In addition, since the Company does not have retained earnings, the dividend has been recorded against additional paid-in capital. F- 17 ENVVENO MEDICAL CORPORATION f/k/a HANCOCK JAFFE LABORATORIES, INC. NOTES TO FINANCIAL STATEMENTS Warrants A summary of warrant activity during the years ended December 31, 2021 and 2020 is presented below: Schedule of Stock Warrant Activity Common Stock Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Life in Years Intrinsic Value Outstanding, January 1, 2020 174,681 $ 127.50 Issued 1,702,810 9.26 Exercised ( 367,660 ) 8.13 Cancelled ( 2,029 ) 107.50 Outstanding, January 1, 2021 1,507,802 $ 20.10 5.3 $ 448,140 Issued 4,895,016 4.59 Exercised ( 52,827 ) 5.03 Cancelled ( 38,286 ) 16.10 Outstanding and exercisable, December 31, 2021 6,311,705 $ 8.80 4.2 $ 474,464 In November 2020 as part of resolving a dispute, the Company agreed to issue warrants to purchase 17,618 shares of common stock at a purchase price of $ 8.00 per share, and warrants to purchase 18,056 shares of common stock at a purchase price of $ 10.25 per share. These amounts were in dispute and were paid pursuant to an investment banking agreement dated February 12, 2020 in connection with financings which occurred in July and October 2020. The fair value of these warrants on the settlement date was $ 0.1 million and $ 0.1 million , respectively. The total amount of the payment to settle the dispute was $ 0.5 million, including the value of the warrants. and was included in the cost of the July and October financings. The fair value of the warrants was determined using the Black-Scholes method with the following assumptions: stock price of $ 8.00 and $ 10.35 , risk-free interest rate of 0.46 %, volatility of 112.7 %, annual rate of quarterly dividends of 0 %, and an expected term of 2.5 years. The investment banking agreement has now been terminated with no further obligations. In November 2020 the Company’s Board of Directors approved the issuance of warrants to purchase 6,400 shares of common stock to an advisor and warrants to purchase 20,000 shares of common stock to certain participants in the preferred share exchange (see Note 10, Stockholders Equity – Series C Convertible Preferred Stock ). Separately the Company agreed to re-price warrants issued to the placement agent for the Company’s February 25, 2020 private placement. These warrants and the re-priced warrant were issued in February 2021. The value of these warrants at December 31, 2020 was $ 188,804 and is included in accrued expenses. The Company determined their value using the Black-Scholes method with the following assumptions: stock price of $ 8.65 , risk-free interest rate of 0.36 %, volatility of 114.3 %, annual rate of quarterly dividends of 0 %, and an expected term of 2.5 to 3.5 years. F- 18 ENVVENO MEDICAL CORPORATION f/k/a HANCOCK JAFFE LABORATORIES, INC. NOTES TO FINANCIAL STATEMENTS Warrants – Derivative Liabilities The warrants issued in connection with our February 25, 2020 Bridge Offering were determined to be derivative financial instruments when issued because the Company did not have control of the obligation to obtain shareholder approval by May 25, 2020 to increase the number of authorized shares or to approve a reverse stock split. The accounting treatment of derivative financial instruments required that the Company record the warrants as a liability at fair value and marked-to-market the instruments at fair values as of each subsequent balance sheet date. Any change in fair value is recorded as a change in the fair value of derivative liabilities for each reporting period at each balance sheet date. The warrant derivatives were valued as of the February 25, 2020 issuance date, as of the quarter ended March 31, 2020, as of June 30, 2020, and as of September 15, 2020 when the Company’s stockholders approved an increase in authorized shares in an amount sufficient to allow full exercise of these warrants. The value at issuance was $ 546,036 and was recorded as a derivative liability. The value of the derivative liability was $ 199,907 at March 31, 2020, $ 281,183 at June 30, 2020, and $ 334,229 at September 15, 2020. The derivative liability increased $ 53,046 and decreased $ 211,807 during the three and nine months ended September 30, 2020, respectively. The changes in derivative liability is reflected in Other Income on the accompanying Statement of Operations. The Company reassessed the classification at each balance sheet date to determine if it should be changed as a result of events during the period. On September 15, 2020, the fair value of derivative liabilities was reclassified to equity when the Company’s stockholders approved items comprising a Capital Event. Accordingly, there is no fair value of derivative liabilities as of December 31, 2020. The fair value of the warrants was determined using a Monte Carlo simulation, incorporating observable market data and requiring judgment and estimates. The following inputs and assumptions were used for the valuation of the derivative liability: Schedule of Assumption Used for Valuation of Derivative Liability February 25, 2020 March 31, 2020 June 30, 2020 September 15, 2020 Projected Volatility 97.1 % 102.7 % 102.7 % 110.7 % Risk-Free Rate 1.36 % 0.38 % 0.29 % 0.31 % Contractual Term (Years) 5 5 4.75 4.5 ● It was assumed the stock price would fluctuate with the Company’s projected volatility. ● The projected volatility was based on the historical volatility of the Company. ● If the Company was required to pay the fair value of the warrant in cash as of May 25, 2020, the obligation was discounted at the Company’s estimated cost of debt based on short-term C-CCC bond ratings of 19.5% and 28.5% . ● The likelihood of the Company calling a shareholder meeting and achieving shareholder approval was 90% as of February 25, 2020 . ● As June 30, 2020, the Company projected shareholder approval would not be obtained until approximately 8/31/20. No mandatory exercise was allowed prior to that date. ● Until the Company obtained shareholder approval to increase the authorized shares on September 15, 2020, we assumed the warrant holders have an option to require the Company to pay the fair value of the warrants. The derivative value at that date was $ 334,229 . F- 19 ENVVENO MEDICAL CORPORATION f/k/a HANCOCK JAFFE LABORATORIES, INC. NOTES TO FINANCIAL STATEMENTS The following table sets forth a summary of the changes in the fair value of Level 3 derivative liabilities that are measured at fair value on a recurring basis: Schedule of Fair Value of Level 3 Derivative Liabilities on Fair Value of Recurring Basis Derivative Liabilities Balance – January 1, 2020 $ - Derivative liabilities associated with the issuance of common stock warrants 513,534 Derivative liabilities associated with the issuance of placement agent warrants 32,502 Change in fair value of derivative liabilities ( 211,807 ) Reclassification of warrant derivatives to equity ( 334,229 ) Balance – December 31, 2020 $ - Note 11 – Share Based Compensation Omnibus Incentive Plan The Company issues share-based awards under its Company’s 2016 Omnibus Incentive Plan, which enables the Company to grant stock options, stock appreciation rights, restricted stock, restricted stock units, unrestricted stock, other share based awards and cash awards to associates, directors, consultants, and advisors of the Company and its affiliates, and to improve the ability of the Company to attract, retain, and motivate individuals upon whom the Company’s sustained growth and financial success depend, by providing such persons with an opportunity to acquire or increase their proprietary interest in the Company. Stock options granted under the 2016 Plan may be non-qualified stock options or incentive stock options, within the meaning of Section 422(b) of the Internal Revenue Code of 1986, except that stock options granted to outside directors and any consultants or advisers providing services to the Company or an affiliate shall in all cases be non-qualified stock options. The option price must be at least 100% of the fair market value on the date of grant and if issued to a 10% or greater shareholder must be 110% of the fair market value on the date of the grant . The 2016 Plan is to be administered by the Board, which has discretion over the awards and grants thereunder. No awards may be issued after November 21, 2026. The Plan was adopted in 2016 and amended in 2018, 2020 and 2021 to increase the number of shares authorized to be awarded under the Plan. As of December 31, 2021 there are 4,500,000 shares authorized under the Plan as a result of the increase authorized by our shareholders in 2021. The number of shares subject to the Plan is automatically adjusted from time to time such that shares authorized under the plan shall at all times be equal to at least 20 % of the issued and outstanding shares of the Company on a fully diluted basis. The current number of shares authorized is greater than the 20 % minimum. Stock Options The fair value of each option grant is estimated at the grant date using the Black Scholes method. The following assumptions were used in estimating fair value: Schedule of Stock Options Assumptions in Estimated Fair Value 2021 2020 Expected term 5.44 – 6.5 years 5.16 – 5.76 years Volatility 112.94 – 103.6 % 107.5 % Risk free interest rate 0.08 – 1.20 % 0..30 – 0.36 % Dividend yield 0.00 % 0.00 % The Company estimated the expected term of the options using the simplified method. The Company uses its stock’s historical market information to calculate volatility used in estimating fair value of options granted. F- 20 ENVVENO MEDICAL CORPORATION f/k/a HANCOCK JAFFE LABORATORIES, INC. NOTES TO FINANCIAL STATEMENTS A summary of the option activity during the years ended December 31, 2021 and 2020 is presented below: Schedule of Stock Option Activity Weighted Weighted Average Average Remaining Aggregate Number of Exercise Life Intrinsic Options Price In Years Value Outstanding, January 1, 2020 99,689 $ 111.00 Granted 122,000 10.00 Forfeited ( 11,000 ) 63.88 Outstanding, December 31, 2020 210,689 $ 31.48 8.7 $ - Granted 3,246,551 $ 7.70 Forfeited ( 15,333 ) 8.36 Outstanding, December 31, 2021 3,441,907 $ 9.16 9.3 $ - Exercisable, December 31, 2021 982,921 $ 12.94 8.9 $ - The Company includes share-based compensation expense in selling, general and administrative expenses, and recognized $ 6.0 million and $ 0.7 million during the years ended December 31, 2021 and 2020, respectively. As of December 31, 2021, there was $ 15.2 million of unrecognized share-based compensation expense related to outstanding stock options and restricted stock units that will be recognized over the weighted average remaining vesting period of 2 years. F- 21 ENVVENO MEDICAL CORPORATION f/k/a HANCOCK JAFFE LABORATORIES, INC. NOTES TO FINANCIAL STATEMENTS Restricted Stock Units The Company also issues restricted shares and restricted stock units under the 2016 Plan. A summary of the restricted share and restricted stock units activity during the years ended December 31, 2021 and 2020 is presented below: Schedule of Stock Option Activity Restricted Shares Number of Restricted Shares Outstanding, January 1, 2020 7,806 Granted 10,000 Shares vested ( 12,864 ) Outstanding, December 31, 2020 4,942 Granted 400,000 Shares Vested ( 2,860 ) Outstanding, December 31, 2021 402,082 A summary of outstanding restricted stock units as of December 31, 2021 is presented below: Schedule of Outstanding and Exercisable Restricted Stock Units Restricted Stock Units Grant Date Restricted Stock Unit for Outstanding Number of Units Weighted Average Remaining Life In Years 9/13/2019 Common Stock 2,082 0.9 11/30/2021 Common Stock 400,000 - Total 402,082 Note 12 – Net Loss Per Share The following table summarizes the number of potentially dilutive common stock equivalents excluded from the calculation of diluted net loss per common share as of December 31, 2021 and 2020: Schedule of Dilutive Net Loss Per Common Share 2021 2020 December 31, 2021 2020 Shares of common stock issuable upon exercise of warrants 4,552,670 1,507,802 Shares of common stock issuable upon exercise of options and restricted stock units 3,843,989 215,631 Potentially dilutive common stock equivalents excluded from diluted net loss per share 8,396,659 1,723,433 F- 22