What changed in this filing

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Item 1. Financial Statements

2022-10-27 compared with 2022-08-03 · 158 added, 149 removed, 106 unchanged (74% of the section changed)

2 unchanged sentences

BALANCE SHEETS

(In thousands except par values, unless otherwise indicated)

(In thousands except par values,

unless otherwise indicated)

Current Assets:

Cash and cash equivalents

Cash and cash

Short-term investments

Accrued interest receivable

Prepaid expenses and other current assets

expenses and other current assets

Total Current Assets

Property and equipment, net

Operating lease right-of-use assets, net

Property and equipment,

Operating lease right-of-use

Long-term investments

Security deposits and other assets

Liabilities and Stockholders’ Equity

deposits and other assets

Liabilities and Stockholders’

Current Liabilities:

Accounts payable

Accrued expenses and other current liabilities

Current portion of operating lease liabilities

Accrued expenses and other

current liabilities

portion of operating lease liabilities

Total Current Liabilities

Long-term operating lease liabilities

Total Liabilities

operating lease liabilities

Commitments and Contingencies

Stockholders’ Equity:

Preferred stock, par value $ 0.00001 , 10,000 shares authorized:

Preferred stock, par value

$ 0.00001 , 10,000 shares authorized:

no shares issued or outstanding

Common stock, par value $ 0.00001 , 250,000 shares authorized, 9,470 shares issued and outstanding as of June 30, 2022 and December 31, 2021

Common stock, par value $ 0.00001 , 250,000

shares authorized, 9,472 and 9,470 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively

Additional paid-in capital

Accumulated deficit

Total Stockholders’ Equity

Total Liabilities and Stockholders’ Equity

Stockholders’ Equity

Liabilities and Stockholders’ Equity

Notes to these Unaudited Condensed Financial Statements

1 unchanged sentence

STATEMENTS OF OPERATIONS

For the Three Months Ended

For the Six Months Ended

For the Three

(In thousands, except per share data)

Operating Expenses:

Selling, general and administrative expenses

Research and development expenses

Loss from Operations

Selling, general and administrative

Research and development

from Operations

Other (Income) Expense:

Interest (income) expense, net

Gain on extinguishment

of note payable

Interest income,

Unrealized loss from investments

Other expense

Total Other (Income) Expense

Net Loss Per Basic and Diluted Common Share:

Other (Income) Expense

Loss Per Basic and Diluted Common Share:

Weighted Average Number of Common Shares Outstanding:

Basic and Diluted

Notes to these Unaudited Condensed Financial Statements

MEDICAL CORPORATION

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIENCY)

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

thousands, unless otherwise indicated)

Additional Paid-in

Stockholders’

3 unchanged sentences

Shared-Based Compensation

Fair value of warrants issued

Balance at June 30, 2022

Additional Paid-in

Total Stockholders’

Share-Based Compensation

Balance at September 30, 2022

Stockholders’

Balance at January 1, 2021

Common stock issued in public offering

Common stock issued for exercise of warrants

Common stock issued in

public offering

Common stock issued for

exercise of warrants

Shared-Based Compensation

1 unchanged sentence

Balance at March 31, 2021

Share-Based Compensation

Shares issued in satisfaction of trade payable

Shared-Based Compensation

Shares issued in satisfaction

of trade payable

Balance at June 30, 2021

Common stock issued in

at the market transactions

Common stock issued in

registered direct offering

Shared-Based Compensation

Balance at September 30, 2021

Notes to these Unaudited Condensed Financial Statements

2 unchanged sentences

thousands, unless otherwise indicated)

For the Six Months Ended

Cash Flows from Operating Activities

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

Cash Flows from Operating

Adjustments to reconcile

net loss to net cash used in operating activities:

Share-based compensation

Issuance of warrants for services

Depreciation and amortization

Amortization of right of use assets

Deposit applied to consulting services

Amortization of right-of-use

Gain on extinguishment

of note payable

Unrealized loss from investments,

Changes in operating assets and liabilities:

Prepaid expenses and other current assets

Accrued interest receivable

Security deposit and other assets

Changes in operating assets

and liabilities:

Prepaid expenses and other

current assets

Security deposit and other

Accounts payable

Accrued expenses and other current liabilities

Operating lease liabilities

Total adjustments

Net Cash Used in Operating Activities

Cash Flows from Investing Activities

Purchase of property and equipment

Accrued expenses and other

current liabilities

lease liabilities

Cash Used in Operating Activities

Cash Flows from Investing

Purchase of property and

Purchases of investments

Net Cash Used in Investing Activities

Cash Flows from Financing Activities

Proceeds from public offering of common stock and warrants, net

Proceeds from Warrant Exercises

Net Cash Provided by Financing Activities

Net (Decrease) Increase in Cash

Cash, cash equivalents - Beginning of period

Cash, cash equivalents - End of period

For the Six Months Ended

Maturities of investments

Cash Used in Investing Activities

Cash Flows from Financing

Proceeds from shares issued

under ATM, net

Proceeds from registered

direct offering, net

Proceeds from public offering,

from Warrant Exercises

Cash Provided by Financing Activities

(Decrease) Increase in Cash, Cash Equivalents

Cash, cash equivalents

- Beginning of period

Cash, cash equivalents

- End of period

Notes to these Unaudited Condensed Financial Statements

MEDICAL CORPORATION

STATEMENTS OF CASH FLOWS (Continued)

thousands, unless otherwise indicated)

Supplemental Disclosures of Cash Flow Information:

Cash Received During the Period For:

Interest, net

Non-Cash Financing Activities:

Fair value of common stock issued in satisfaction of trade payable

Fair value of warrants issued in satisfaction of trade payables and accrued expenses

value of common stock issued in satisfaction of trade payable

value of warrants issued in satisfaction of trade payables and accrued expenses

Notes to these Unaudited Condensed Financial Statements

2 unchanged sentences

1 – Business Organization and Nature of Operations

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 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

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.

Medical Corporation is a late clinical-stage med-tech company focused on the advancement of innovative bioprosthetic (tissue-based)

solutions to improve the standard of care for the treatment of venous disease.

The Company’s lead product, the VenoValve®,

is a first-in-class surgical replacement venous valve being developed for the treatment of deep venous Chronic Venous Insufficiency

The Company is also developing a non-surgical, transcatheter based replacement venous valve for the treatment of deep venous

CVI called enVVe™.

CVI occurs when valves inside of the veins of the leg become damaged, resulting in the backwards flow of

blood (reflux), blood pooling in the lower leg, increased pressure in the veins of the leg (venous hypertension) and in severe

cases, venous ulcers that are difficult to heal and become chronic.

Both the VenoValve and enVVe are designed to act as one-way

valves, to help assist in propelling blood up the leg, and back to the heart and lungs.

The VenoValve is currently being evaluated

in the SAVVE U.S.

pivotal study and the company is currently waiting for regulatory approval to begin the TAVVE first-in-human

trial for enVVe.

Our team of officers and directors has been affiliated with numerous medical devices that have received FDA

approval or CE marking and that have been commercially successful.

We develop and manufacture our products in a 14,507 sq.

leased manufacturing facility in Irvine, California, which has been ISO 13485-2016 certified for the design, development and

manufacturing of tissue based implantable medical devices.

2 – Management’s Liquidity Plan

of June 30, 2022, the Company had a cash balance of $ 9.1 million, investments of $ 38.1 million and working capital of $ 35.6 million.

of September 30, 2022, the Company had a cash balance of $ 2.9 million, investments of $ 39.8 million and working capital of $ 39.4 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 June 30, 2022 are sufficient to meet our obligations as they become due within one year after the date of this

Quarterly Report, and sustain operations.

our capital resources at September 30, 2022 are sufficient to meet our obligations as they become due within one year after the date

of this Quarterly Report, and sustain operations.

MEDICAL CORPORATION

TO CONDENSED FINANCIAL STATEMENTS

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 June 30, 2022 and December 31, 2021, and for the three and six months ended June 30, 2022 and 2021.

The results of

operations for the three and six months ended June 30, 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.

the Company as of September 30, 2022 and December 31, 2021, and for the three and nine months ended September 30, 2022 and 2021.

results of operations for the three and nine months ended September 30, 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.

consider all highly liquid interest-earning investments with a maturity of three months or less at the date of purchase to be cash equivalents.

4 unchanged sentences

are classified as long-term investments.

Debt investments are classified

as trading securities and realized gains and losses are recorded using the specific identification method.

Changes in fair value, excluding

credit losses and impairments, are recorded in unrealized gains (losses) from investments.

Fair value is calculated based on publicly

available market information.

If the cost of an investment exceeds its fair value, we evaluate, among other factors, general market conditions,

credit quality of debt instrument issuers, and the extent to which the fair value is less than cost.

We recognize interest income based

on the stated coupon rate of the investments purchased.

MEDICAL CORPORATION

TO CONDENSED FINANCIAL STATEMENTS

investments are classified as trading securities and realized gains and losses are recorded using the specific identification method.

Changes in fair value, excluding credit losses and impairments, are recorded in unrealized gains (losses) from investments.

is calculated based on publicly available market information.

If the cost of an investment exceeds its fair value, we evaluate, among

other factors, general market conditions, credit quality of debt instrument issuers, and the extent to which the fair value is less than

We recognize interest income based on the stated coupon rate of the investments purchased.

4 – Investments

components of investments were as follows at June 30, 2022:

of Investments

(In thousands)

Cash Equivalents

Short-Term Investment

Long Term Investment

components of investments were as follows at September 30, 2022:

Schedule of Investments

Term Investment

Fair Value Level 1

Government securities

Total debt investments

3 unchanged sentences

There were no similar investments at December

MEDICAL CORPORATION

TO CONDENSED FINANCIAL STATEMENTS

5 – Concentrations

3 unchanged sentences

There were aggregate uninsured cash balances of $ 2.6

and $ 54.5 million as of June 30, 2022 and December 31, 2021, respectively.

MEDICAL CORPORATION

TO CONDENSED FINANCIAL STATEMENTS

million and $ 54.5 million as of September 30, 2022 and December 31, 2021, respectively.

6 – Accrued Expenses and Other Current Liabilities

of June 30, 2022, and December 31, 2021, accrued expenses and other current liabilities consist of the following:

of Accrued Expenses and Other Current Liabilities

of September 30, 2022, and December 31, 2021, accrued expenses and other current liabilities consist of the following:

Schedule of Accrued

Expenses and Other Current Liabilities

(In thousands)

3 unchanged sentences

Other accrued expenses

Total accrued expenses and other current liabilities

7 – Commitments and Contingencies

3 unchanged sentences

Rankin Complaints

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.

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.

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.

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

The case is entitled Rankin v.

1 unchanged sentence

et al., Case No.

30-2020-01157857

30-2020-01157857 and was filed on August

The complaints assert several causes of action including a cause of action for failure to timely

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 which are currently set for trial on October 24, 2022.

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 June 30, 2022.

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 which are currently set for trial on June 12, 2023.

the date of these financial statements, the amount of loss associated with these complaints, if any, cannot be reasonably estimated.

MEDICAL CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS

TO CONDENSED FINANCIAL STATEMENTS

8 – Stockholders’ Equity

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

During the six-months ended

June 30, 2022, the Company granted options to employees for the purchase of thirty-thousand shares with a weighted average exercise

price of $ 6.83

The Company recognized $ 4.5

million and $ 0.3

million of share-based compensation related to stock options during the six months ended June 30, 2022 and 2021, respectively.

June 30, 2022, there was $ 10.6

million of unrecognized stock-based compensation expense related to outstanding stock options that will be recognized over the

weighted average remaining vesting period of 1.7

During the nine-months ended September

30, 2022, the Company granted options to employees for the purchase off forty-three thousand shares with a weighted average exercise

price of $ 6.76 per share.

The Company recognized $ 6.6 million and $ 0.7 million of share-based compensation related to stock options during

the nine months ended September 30, 2022 and 2021, respectively.

As of September 30, 2022, there was $ 8.6 million of unrecognized stock-based

compensation expense related to outstanding stock options that will be recognized over the weighted average remaining vesting period

of 1.6 years.

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 June 30, 2022 and 2021:

per common share as of September 30, 2022 and 2021:

of Dilutive Net Loss Per Common Share

(In thousands)

Shares of common stock issuable upon exercise of warrants

Shares of common stock issuable upon exercise of options

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

Shares of common stock issuable upon exercise of

Shares of common stock issuable upon exercise

Potentially dilutive

common stock equivalents excluded from diluted net loss per share

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