What changed in this filing

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Item 1. Financial Statements

2022-04-29 compared with 2021-11-12 · 91 added, 331 removed, 130 unchanged (76% of the section changed)

1 unchanged sentence

MEDICAL CORPORATION

HANCOCK JAFFE LABORATORIES, INC.

BALANCE SHEETS

September 30,

(In thousands except par values, unless

otherwise indicated)

Current Assets:

9 unchanged sentences

Accrued expenses and other current liabilities

Deferred revenue - related party

Current portion of operating lease liabilities

8 unchanged sentences

250,000 shares authorized,

and 2,541,529 shares issued

and outstanding as of September 30, 2021 and December 31, 2020, respectively

9,470 shares issued and outstanding

as of March 31, 2022 and December 31, 2021

Additional paid-in capital

Accumulated deficit

( 72,863,501 )

( 65,323,411 )

Total Stockholders’ Equity

2 unchanged sentences

MEDICAL CORPORATION

HANCOCK JAFFE LABORATORIES, INC.

STATEMENTS OF OPERATIONS

For the Three Months Ended

For the Nine Months Ended

September 30,

(In thousands, except per share data)

Operating Expenses:

2 unchanged sentences

Loss from Operations

( 2,706,531 )

( 1,922,287 )

( 7,900,244 )

( 4,976,715 )

Other (Income) Expense:

Gain on extinguishment of note payable

Interest (income) expense, net

Change in fair value of derivative liabilities

Other Income:

Interest income, net

Other expense

Total Other (Income) Expense

( 2,389,309 )

$ ( 1,974,769 )

$ ( 7,540,090 )

$ ( 4,761,483 )

Deemed dividend to Series C Preferred Stockholders

Net Loss Attributable to Common Stockholders

$ ( 2,389,309 )

$ ( 1,998,628 )

$ ( 7,540,090 )

$ ( 4,785,342 )

Total Other Income

Net Loss Per Basic and Diluted Common Share:

3 unchanged sentences

MEDICAL CORPORATION

HANCOCK JAFFE LABORATORIES, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIENCY)

(In thousands, unless otherwise indicated)

Stockholders’

Balance at January 1, 2022

$ ( 65,323,411 )

Common stock issued in at the market transactions

Common stock issued in at the market transactions, shares

Common stock issued in registered direct offering

Common stock issued in registered direct offering, shares

Common stock issued in public offering

Preferred stock issued in private placement

Preferred stock issued in private placement, shares

Warrant Exercised

Warrant Exercised, shares

Common stock issued in public offering, shares

Common stock issued for exercise of warrants

Common stock issued in private placement offering

Common stock issued in private placement offering, shares

Reclassification of Warrant Derivatives to Equity

Shared-Based Compensation

Warrants granted to consultants

Shares issued in satisfaction of trade payable

Shares issued in satisfaction of trade payable, shares

Common stock issued for exercise of warrants, shares

Fair Value of Warrants Issued

( 2,772,886 )

Balance at March 31, 2021

$ 111,107,784

$ ( 68,096,297 )

Shared-Based Compensation

Shares issued in satisfaction of trade payable

( 2,377,895 )

Balance at June 30, 2021

( 70,474,192 )

Common stock issued in at the market transactions

Common stock issued in registered direct offering

Shared-Based Compensation

( 2,389,309 )

Balance at September 30, 2021

( 72,863,501 )

Series C Convertible

Preferred Stock

Balance at January 1, 2020

$ ( 56,187,925 )

Common stock issued in private placement offering

Share-based compensation:

Warrants granted to consultants

( 1,159,758 )

Balance at March 31, 2022

$ ( 57,347,683 )

Common stock issued in public offering

Share-Based Compensation

( 1,626,956 )

Balance at June 30, 2020

$ ( 58,974,639 )

Stockholders’

Balance at January 1, 2021

Common stock issued in public offering

Preferred stock issued in private placement

Warrant Exercised

Reclassification of Warrant Derivatives to Equity

Share-Based Compensation

( 1,974,769 )

Balance at September 30, 2020

$ ( 60,949,408 )

Common stock issued for exercise of warrants

Shared-Based Compensation

Fair Value of Warrants Issued

Balance at March 31, 2021

Notes to these Unaudited Condensed Financial Statements

MEDICAL CORPORATION

HANCOCK JAFFE LABORATORIES, INC.

STATEMENTS OF CASH FLOWS

For the Nine Months Ended

September 30,

(In thousands, unless otherwise indicated)

For the Three Months Ended

Cash Flows from Operating Activities

$ ( 7,540,090 )

$ ( 4,761,483 )

Adjustments to reconcile net loss to net cash used in operating activities:

Stock-based compensation

Share-based compensation

Depreciation and amortization

Amortization of right of use assets

Gain on extinguishment of note payable

Change in fair value of derivatives

Deposit applied to consulting services

Changes in operating assets and liabilities:

Prepaid expenses and other current assets

Security deposit and other assets

Accounts payable

Accrued expenses and other current liabilities

Payments on lease liabilities

Operating lease liabilities

Total adjustments

( 1,206,371 )

Net Cash Used in Operating Activities

( 8,746,461 )

( 5,063,516 )

Cash Flows from Investing Activities

2 unchanged sentences

Cash Flows from Financing Activities

Proceeds from private placements of common stock and warrants, net

Preferred stock issued in private placement

Proceeds from shares issued under ATM, net

Proceeds from registered direct offering, net

Proceeds from public offering, net

Proceeds from issuance of note payable

Proceeds from public offering of common stock and warrants, net

Proceeds from Warrant Exercises

Net Cash Provided by Financing Activities

Net Increase in Cash, Cash Equivalent, and Restricted Cash

Cash, cash equivalents and restricted cash - Beginning of period

Cash, cash equivalents and restricted cash - End of period

Notes to these Unaudited Condensed Financial Statements

MEDICAL CORPORATION

HANCOCK JAFFE LABORATORIES, INC.

STATEMENTS OF CASH FLOWS (Continued)

For the Nine Months Ended

September 30,

Net (Decrease) Increase in Cash

Cash, cash equivalents - Beginning of period

Cash, cash equivalents - End of period

For the Three Months Ended

Supplemental Disclosures of Cash Flow Information:

Cash Paid (Received) During the Years For:

Cash Received During the Period For:

Interest, net

Non-Cash Financing Activities

Fair value of warrants issued in connection with common stock included in derivative liabilities

Fair value of placement agent warrants issued in connection with common stock included in derivative liabilities

Fair value of common stock issued in satisfaction of trade payable

Fair value of warrants issued

Reclassification of warrant derivatives to equity

$ ( 334,229 )

Notes to these Unaudited Condensed Financial Statements

MEDICAL CORPORATION

HANCOCK JAFFE LABORATORIES, INC.

TO CONDENSED FINANCIAL STATEMENTS

1 unchanged sentence

Medical Corporation is a med-tech company focused on improving the standard of care in the treatment of venous disease.

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 the deep venous system of the leg, and is called the VenoValve®.

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.

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 occurs when valves inside of the veins of the leg fail, resulting in insufficient blood being returned to the heart.

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

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

We currently lease a 14,507 sq.

manufacturing facility in Irvine, California, where we manufacture medical devices for our clinical trials, and which has capacity

for commercial manufacturing.

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 deferring further development of the CoreoGraft, which is now outside of our primary focus

MEDICAL CORPORATION

HANCOCK JAFFE LABORATORIES, INC.

TO CONDENSED FINANCIAL STATEMENTS

2 – Going Concern and Management’s Liquidity Plan

accompanying unaudited condensed financial statements have been prepared on a going concern basis, which contemplates the realization

of assets and the satisfaction of liabilities in the normal course of business.

we expect to continue incurring losses for the foreseeable future, may never earn revenues large enough to support operations, and may

need to raise additional capital to sustain operations, pursue product development initiatives, and penetrate markets for the sale of

products, Management believes that our capital resources at September 30, 2021, are sufficient to meet our obligations as they become

due within one year after the date of this interim filing, and sustain operations.

MEDICAL CORPORATION

HANCOCK JAFFE LABORATORIES, INC.

TO CONDENSED FINANCIAL STATEMENTS

manufacturing facility in Irvine, California, where we manufacture medical devices for

our clinical trials, and which has capacity for commercial manufacturing.

2 – Management’s Liquidity Plan

of March 31, 2022, the Company had a cash balance of $ 51.3

million and working capital of $ 50.4

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 March 31, 2022 are

sufficient to meet our obligations as they become due within one year after the date of this Quarterly Report, and sustain operations.

3 – Significant Accounting Policies

6 unchanged sentences

of normal recurring items) which are considered necessary for a fair presentation of the unaudited condensed financial statements of

the Company as of September 30, 2021 and December 31, 2020, and for the three and nine months ended September 30, 2021 and 2020.

results of operations for the three and nine months ended September 30, 2021 are not necessarily indicative of the operating results

for the full year.

These unaudited condensed financial statements should be read in conjunction with the financial statements and notes

thereto for the year ended December 31, 2020 included in the Company’s Form 10-K filed with the SEC on March 31, 2021.

The condensed

balance sheet as of December 31, 2020 has been derived from the Company’s audited financial statements.

Concentrations

Company maintains cash with major financial institutions.

Cash held in United States bank institutions is currently insured by the Federal

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

There was an aggregate uninsured cash balance

of $ 57,646,922 as of September 30, 2021.

Loss per Share

Company computes basic and diluted loss per share by dividing net loss attributable to common stockholders by the weighted average number

of common stock outstanding during the period, including warrants exercisable for little or no cash consideration.

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.

Company evaluated events that have occurred after the balance sheet date through the date the financial statements were issued.

upon the evaluation and transactions, the Company did not identify any other subsequent events that would have required adjustment or

disclosure in the financial statements.

Accounting Standards

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.

is effective for public business entities for fiscal years beginning after December 15, 2020, including interim periods within those

fiscal years.

There was not a significant impact to the financial statements from the adoption of this standard.

the Company as of March 31, 2022 and December 31, 2021, and for the three months ended March 31, 2022 and 2021.

The results of operations

for the three months ended March 31, 2022 are not necessarily indicative of the operating results for the full year.

These unaudited

condensed financial statements should be read in conjunction with the financial statements and notes thereto for the year ended December

31, 2021 included in the Company’s Form 10-K filed with the SEC on March 28, 2022.

The condensed balance sheet as of December 31,

2021 has been derived from the Company’s audited financial statements.

MEDICAL CORPORATION

HANCOCK JAFFE LABORATORIES, INC.

TO CONDENSED FINANCIAL STATEMENTS

Note 4 – 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 at each institution.

There were aggregate uninsured cash balances of $ 51.1 and $ 54.5

million as of March 31, 2022 and December 31, 2021, respectively.

5 – Property and Equipment

As of September 30, 2021 and December 31, 2020, property and equipment consist of the following:

Schedule of Property and Equipment

September 30,

Laboratory equipment

Furniture and fixtures

Computer software and equipment

Leasehold improvements

Construction Work in Progress – Software

Property and equipment, gross

of March 31, 2022 and December 31, 2021, property and equipment consist of the following:

of Property and Equipment

software and equipment

Work in Progress – Software

property and equipment

accumulated depreciation

Property and equipment, net

expense amounted to $ 44,076 and $ 66,857 for the nine months ended September 30, 2021 and 2020, respectively.

Depreciation expense is

reflected in general and administrative expenses in the accompanying statements of operations.

5 – Right-of-Use Assets and Lease Liability

September 20, 2017, the Company renewed its operating lease for its manufacturing facility in Irvine, California, effective October 1,

2017, for five years with an option to extend the lease for an additional 60 -month term at the end of lease term.

The initial lease rate

was $ 26,838 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 .

Company adopted Accounting Standards Codification (“ASC”) Topic 842, Leases (Topic 842) effective January 1, 2019 using the

modified-retrospective method and elected the package of transition practical expedients for expired or existing contracts, which does

not require reassessment of previous conclusions related to contracts containing leases, lease classification and initial direct costs,

and therefore the comparative periods presented are not adjusted.

In addition, the Company elected to adopt the short-term lease exception

and not apply Topic 842 to arrangements with lease terms of 12 months or less.

On January 1, 2019, upon adoption of Topic 842, the Company

recorded right-of-use assets of $ 1,099,400 , lease liabilities of $ 1,121,873 and eliminated deferred rent of $ 22,473 .

The Company determined

the lease liabilities using the Company’s estimated incremental borrowing rate of 8.5 % to estimate the present value of the remaining

monthly lease payments.

MEDICAL CORPORATION

HANCOCK JAFFE LABORATORIES, INC.

TO CONDENSED FINANCIAL STATEMENTS

operating lease cost is as follows:

Schedule of Operating Lease Cost

For the Three Months Ended

September 30,

Operating lease cost

cash flow information related to our operating lease is as follows:

Schedule of Supplemental Cash Flow Information Related to Operating Lease

For the Three Months Ended

September 30,

Operating Cash Flow Information:

Cash paid for amounts in the measurement of lease liabilities

Schedule of Operating Remaining Lease Term and Discount Rate

Remaining lease term and discount rate for our operating lease is as follows:

September 30,

Remaining lease term

Discount rate

of our lease liabilities by fiscal year for our operating lease is as follows:

Schedule of Maturity of Lease Liabilities

September 30,2021

Three months ended December 31, 2020

Year ended December 31, 2021

Imputed Interest

Present value of our lease liability

and equipment, net

expense amounted to $ 0.1 million

for the three months ended March 31, 2022 and 2021.

Depreciation expense is reflected in general and administrative expenses in the accompanying statements of operations.

MEDICAL CORPORATION

HANCOCK JAFFE LABORATORIES, INC.

TO CONDENSED FINANCIAL STATEMENTS

6 – Accrued Expenses and Other Current Liabilities

of September 30, 2021, and December 31, 2020, accrued expenses and other current liabilities consist of the following:

Schedule of Accrued Expenses

September 30,

of March 31, 2022, and December 31, 2021, accrued expenses and other current liabilities consist of the following:

of Accrued Expenses and Other Current Liabilities

Accrued compensation costs

Accrued professional fees

Accrued franchise taxes

Accrued research and development

Other accrued expenses

Accrued expenses

7 – Note Payable

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.

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 .

Total accrued expenses and other current liabilities

7 – Commitments and Contingencies

16 unchanged sentences

30-2020-01157857 and was filed on August

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,

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.

Company intends to vigorously defend the claims, investigate the allegations, and assert counterclaims.

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 September 30, 2021.

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 March 31, 2022.

MEDICAL CORPORATION

HANCOCK JAFFE LABORATORIES, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

8 – Stockholders’ Equity

February 11, 2021, the Company raised $ 41,400,000 in gross proceeds, with cash offering costs of approximately $ 3,300,000 , in a public

offering of 5,914,284 shares of its common stock for a purchase price of $ 7.00 per share and warrants to purchase 2,957,142 shares of

its common stock.

The exercise price of the warrants is $ 7.00 per share, subject to customary adjustments and they expire on February

The warrants had grant date fair value of $ 4.84 per share for an aggregate grant date fair value of $ 14,312,567 , using the

Black Scholes method with the following assumptions used:

stock price of $ 7.53 , risk-free interest rate of 0.11 %, volatility of 113.1 %,

annual rate of quarterly dividends of 0 %, and a contractual term of 2.5 years.

We determined that equity classification of the warrants

was appropriate.

Accordingly, their value is included in additional paid-in capital.

April 26, 2021, the Company issued 5,772 shares with a value of $ 6.51 per share, or $ 37,576 , in satisfaction of a trade payable.

August 12, 2021, the Company entered into an At-the-Market Offering Agreement to create an at-the-market equity program under which it

may sell up to $ 25,000,000 of shares of the Company’s common stock from time to time.

During the quarter ending September 30, 2021,

the Company sold 170,963 shares for aggregate net proceeds of approximately $ 971,000 .

September 9, 2021, the Company entered a securities purchase agreement pursuant to which it completed a registered direct offering

in which it sold 781,615 shares

of common stock and Pre-Funded Warrants to purchase 1,759,035 shares

of common stock, for aggregate net proceeds of approximately $ 18,300,000 .

determined that equity classification of the warrants was appropriate.

Accordingly, their value is included in additional paid-in

connection with this transaction, the Company also issued to the placement agent as compensation a warrant to purchase up to 152,439

shares of common stock with substantially the same terms as the warrants issued in the registered direct offering.

The warrants are exercisable

immediately upon issuance, have an initial exercise price of $ 9.84 per share, subject to customary adjustments, and expire in April 2025.

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.

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

when they were issued was $ 211,976 .

The Company determined their value using the Black-Scholes method with the following assumptions:

stock price of $ 8.91

risk-free interest rate of 0.47 %,

volatility of 113 %,

annual rate of quarterly dividends of 0 %,

and an expected term of 2.5

time to time, the Company issues options for the purchase of its common stock to employees and others.

Share-based compensation related

to stock options is included in selling, general and administrative expenses on the accompanying statement of operations, and was $ 0.6

million of during the nine months ended September

30, 2021 and 2020, respectively.

of September 30, 2021, there was $ 1.6 million of unrecognized stock-based compensation expense related to outstanding stock options that

The Company recognized $ 2.2 million

and $ 0.1 million of share-based compensation related to stock options during the three months ended March 31, 2022 and 2021, respectively.

As of March 31, 2022, there was $ 13.0 million of unrecognized stock-based compensation expense related to outstanding stock options that

will be recognized over the weighted average remaining vesting period of 1.9 years.

MEDICAL CORPORATION

HANCOCK JAFFE LABORATORIES, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

9 – Net Loss per Share

following table summarizes the number of potentially dilutive common stock equivalents excluded from the calculation of diluted net loss

per common share as of September 30, 2021 and 2020:

of Potentially Dilutive Common Stock Equivalents Excluded from Diluted Net Loss Per Share

September 30,

per common share as of March 31, 2022 and 2021:

Schedule of Dilutive Net Loss Per Common Share

Shares of common stock issuable upon exercise of warrants

1 unchanged sentence

Potentially dilutive common stock equivalents excluded from diluted net loss per share

11 – Related Party Transactions

June 8, 2021, the Company updated its agreement with the vendor affiliated by common ownership and control with a shareholder holding

approximately 10 % of the Company’s outstanding common stock.

The Company engaged this vendor to provide support in the VenoValve

pivotal trial.

Expenditures to that vendor were approximately $ 0.6 million during the nine months ending September 30, 2021, and

are included in in Research and Development expenses in the accompanying statement of operations.

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

What changed 10-Q

Item 1. Financial Statements