What changed in this filing

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Item 9A. Controls and Procedures

2023-03-02 compared with 2022-03-28 · 617 added, 762 removed, 1209 unchanged (53% of the section changed)

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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

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

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Report on Internal Control Over Financial Reporting

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.

were no 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, 2022 that have materially affected, or are reasonably likely to materially affect,

our internal control over financial reporting.

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

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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.

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, 2022.

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, 2022.

Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm regarding internal

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over financial reporting as of December 31, 2022 has not been audited by our auditors, Marcum LLP.

Disclosure Regarding Foreign Jurisdictions

That Prevent Inspections

Not Applicable.

Regarding Foreign Jurisdictions That Prevent Inspections

Executive Officers and Corporate Governance

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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.

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.

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.

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.

He is an accomplished heart surgeon,

entrepreneur, and corporate executive.

Board certified in general (UCSF) and cardiothoracic surgery (Duke), his seminal work in

minimally invasive cardiac surgery led to 32 patents for surgical devices used in thousands of heart operations.

Dr Duhay left

clinical practice for industry in 2008, where he served as Vice President and General Manager of the nascent transcatheter heart

valve therapy program (Ascendra) at Edwards Lifesciences (“Edwards”), the world’s leading manufacturer of

bioprosthetic heart valves.

With European CE Mark, he oversaw growth in annual sales of transcatheter heart valves from $3M to over

$250M within the first four years of commercial launch.

Promoted to Vice President of Global Medical & Clinical Affairs, he led

planning and execution of four US FDA pivotal clinical trials.

He was eventually promoted to Chief Medical Officer, where, in

addition to overseeing Global Medical & Clinical Affairs, he supported other areas within Edwards including Health Economics

& Reimbursement in its successful application for a procedure code, payment, and coverage of transcatheter aortic valve

replacement (TAVR), and Regulatory Affairs, as an industry representative and clinical expert on the ISO 5840:2014 and 5910:2018

cardiac valve working groups.

After departing Edwards, he co-founded and led Koa Accel, a major medical device accelerator in the

Orange County, CA, ecosystem.

This bore three medical device startups – Makani Science (selected into the 2021 cohort of the

prestigious Y-Combinator), Kino Discovery (selected into the 2021 cohort of MedTech Innovator), and Kahala Biosciences.

recently, Dr Duhay served as Senior Vice President of Global Medical & Clinical Affairs for Olympus Corporation, the

world’s leading manufacturer of colonoscopes, duodenoscopes, bronchoscopes, and cystoscopes.

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.

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.

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.

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.

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.

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

He has been involved in developing,

commercializing, evaluating, and acquiring medical devices for more than 22 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

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.

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, plc, which

had an annual revenue of about $800 million and is now part of Boston Scientific Corporation through an acquisition.

At Medtronic,

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.

Shrivastava was part of

the peripheral vascular business at Abbott Vascular and worked on endovascular and trans-catheter heart valve repair and replacement

products at Edwards Life Sciences.

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.

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.

Jenusaitis has served as a member of our board of directors since September 2019.

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Financial Officer effective January 2021.

Glynn has more than thirty-five years of experience providing financial services to a variety

Glynn has more than thirty-nine years of experience providing financial services to a variety

of public and private companies, including in the role as Chief Financial Officer.

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should be separate.

The primary responsibilities of our board of directors are to provide oversight, strategic guidance, counseling and

direction to our management.

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.

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of the Board and Stockholders

board of directors met in person and telephonically seven times during 2021 and also acted by unanimous written consent.

board of directors met in person and telephonically five times during 2022 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.

Audit Committee meetings and three Compensation meetings held in 2022.

Our board of directors had 100% attendance for the Annual Meeting

that was held on November 30, 2022.

It is our policy that all directors must attend all stockholder meetings, barring extenuating circumstances.

board of directors has established three standing committees—audit, compensation, and nominating and corporate governance—each

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Copies of each committee’s charter are posted

on the Investors section of our website, which is located at www.envvenojaffe.com.

on the Investors section of our website, which is located at www.envveno.com.

Each committee has the composition and responsibilities

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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.

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.

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.

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following table sets forth total compensation paid to our named executive officers for the years ended December 31, 2022 and 2021.

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.

Equity Incentive Plan Compensation ($)

Deferred Compensation Earnings ($)

Other Compensation ($)

7,674,046 (3)

1,340,000 (9)

we refer to as our “named executive officers” include our current Chief Executive Officer, our current 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, 2022.

Name and Principal Position

Incentive Plan

Chief Executive Officer

7,674,046 (1)

1,340,000 (6)

Chief Financial Officer

Glickman, M.D.

2,960,418 (2)

Glickman, M.D.

Chief Medical Officer and Senior Vice President

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

The company entered into an employment agreement with Mr.

Glynn in February 2021.

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.

4,247,442 (3)

Senior Vice President & Chief Technology Officer

2,932,423 (5)

the grant date fair value of 838,000 stock options granted on February 18, 2021, and 349,781 stock options granted on November 30,

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options vest quarterly over a three-year period.

the grant date fair value of 40,000 stock options granted on July 18, 2020, computed in accordance with FASB ASC Topic 718.

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.

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.

the grant date fair value of 4,000 stock options granted on July 18, 2020, computed in accordance with FASB ASC Topic 718.

vest quarterly over a three-year period.

The options vest quarterly over a three-year periods.

the grant date fair value of 406,000 stock options granted on February 18, 2021 and 265,700 stock options granted on November 30,

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options vest quarterly over a three-year period.

the grant date fair value of 40,000 stock options granted on July 18, 2020, computed in accordance with FASB ASC Topic 718.

vest monthly over a three-year period.

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.

the grant date fair value of 100,000 stock options granted on November 30, 2022, computed in accordance with FASB ASC Topic 718.

The options vest quarterly over a three-year period.

the grant date fair value of 320,000 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 periods.

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.

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.

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.

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.

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.

company paid healthcare of $1,226 and 401(k) match of $15,250.

company paid healthcare of $1,155 and 401(k) match of $14,500.

company paid healthcare of $1,225 and 401(k) match of $2,596.

company paid healthcare of $651.

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company paid healthcare of $42,448 and 401(k) match of $14,500.

company paid healthcare of $9,211 and 401(k) match of $11,755.

company paid healthcare of $13,274 and 401(k) match of $11,405.

have entered into various employment agreements with certain of our executive officers.

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Berman, our current Chief Executive Officer and director.

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.

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

Berman’s employment agreement may be terminated at any time with or without cause and with or without

notice or for good reason thereunder.

In November 2021 the board of directors increased Mr.

Berman’s base salary to $450,000

for 2022 and $500,000 commencing in 2023.

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).

stock option vests in equal quarterly installments over a two year period.

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

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.

In November 2021, the board of directors approved an option grant to Mr.

Berman to purchase 349,781 shares of common stock at an

exercise price of $6.70 per shares (the closing price of the Company’s common stock on November 30, 2021).

The stock option

vests in equal quarterly installments over a three year period.

Also in November 2021, the board of directors granted Mr.

200,000 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

Additionally, the board of directors paid Mr.

Berman a cash

bonus of $250,000 for 2021 and $200,000 for 2020.

Berman a cash bonus of $250,000 for 2021.

Berman is entitled to participate in our employee benefit, pension and/or profit sharing plans, and we will pay certain health and dental

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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).

February 19, 2021, the Company entered into an employment agreement with Mr.

to receive 12 months of continued base salary (or 24 months if such termination occurs within 24 months following a change of control).

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.

Glynn’s elevation to full time Chief Financial Officer

in addition to treasurer and secretary of the Company.

Pursuant to the employment agreement, Mr.

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

Glynn is entitled to participate in any employee benefit plans that the Company has adopted or may adopt.

Glynn provided for an initial salary

of $225,000 per year, subject to annual review and adjustment at the discretion of the Board.

In November 2022 the board of directors

increased Mr.

Glynn’s base salary to $250,000.

In February 2021, the board of directors approved an option grant to Mr.

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.

In November 2021, the board of directors approved an option grant to Mr.

Glynn to purchase 125,925 shares of common stock at an exercise

price of $6.70 per shares (the closing price of the Company’s common stock on November 30, 2021).

The stock option vests in equal

quarterly installments over a three year period.

Also in November 2021, the board of directors granted Mr.

Glynn 50,000 restricted stock

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.

Additionally, the board of directors

Glynn a cash bonus of $25,000 for 2021.

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.

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’s employment 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.

In the event of Mr.

Glynn’s death or disability,

or termination for “Cause” by the Company or without “Good Reason” by 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’s death or disability, or termination

for “Cause” by the Company or without “Good Reason” by 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 is 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.

Any outstanding unvested securities

Glynn on the termination date will vest (or terminate) in accordance with the terms of such grant.

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.

Glickman, M.D.

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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.

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 base salary is $350,000 per year, subject to annual review and adjustment at the discretion of the Board.

December 2022, the board of directors increased Mr.

Glickman’s base salary to $367,500.

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.

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

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.

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.

In November 2021, the board of directors approved an option grant to Mr.

Glickman to purchase

265,700 shares of common stock at an exercise price of $6.70 per shares (the closing price of the Company’s common stock on

November 30, 2021).

The stock option vests in equal quarterly installments over a three year period.

Also in November 2021, the

board of directors granted Mr.

Glickman 100,000 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.

Additionally, the board of directors paid Mr.

Glickman a cash bonus of $50,000

to the terms of the New Employment Agreement, Dr.

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that he has been employed by the Company at the time of termination, up to a total of one year of his base salary.

On July 29, 2020, we entered into

an employment agreement with Dr.

Hamed Alavi, our Senior Vice President and Chief Technology Officer (the “Employment Agreement”).

Pursuant to the terms of the Employment Agreement, Mr.

Alavi’s base salary was $190,000, 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 25% of his base

salary, subject to the achievement of key performance indicators, as determined by our board of directors.

In November 2021 the board

of directors increased Mr.

Alavi’s base salary to $240,000 and, in November 2022, the board of directors increased Mr.

annual base salary to $300,000.

In February 2021, the board of directors approved an option grant to Mr.

Alavi to purchase 320,000 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

The stock options vest in equal quarterly installments over a three year period with a six month cliff.

In November 2021, the

board of directors approved an option grant to Mr.

Alavi to purchase 125,925 shares of common stock at an exercise price of $6.70 per

shares (the closing price of the Company’s common stock on November 30, 2021).

The stock option vests in equal quarterly installments

over a three year period.

Also in November 2021, the board of directors granted Mr.

Alavi 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.

Additionally, the board of directors paid Mr.

bonus of $40,000 for 2021.The employment agreement further provides that Mr.

Alavi is entitled to participate in any employee benefit

plans that the Company has adopted or may adopt.

to the terms of the employment agreement, Mr.

Alavi’s employment is terminable due to Mr.

Alavi’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.

In the event of Mr.

Alavi’s death or disability, or termination

for “Cause” by the Company or without “Good Reason” by Mr.

Alavi (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.

Alavi is 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.

Alavi will be entitled to three months of severance

for each year Mr.

Alavi is employed up to one year of severance, in addition to all Accrued Benefits.

Any outstanding unvested securities

Alavi on the termination date will vest (or terminate) in accordance with the terms of such grant.

Payments Upon Termination or Change-in-Control

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following table sets forth information regarding equity awards held by our named executive officers as of December 31, 2022.

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 ($)

unexercisable

incentive plan

expiration date

6 unchanged sentences

July 25, 2029

Chief Medical Officer and Senior Vice President

Chief Medical Officer and

October 1, 2026

Senior Vice President

July 18, 2030

1 unchanged sentence

November 30, 2031

Craig Glynn, Chief Financial Officer (6)

July 18, 2030

Chief Financial Officer (6)

February 18, 2031

November 30, 2031

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.

were granted on July 18, 2020 and vest ratably on a monthly basis over 36 months.

were granted on February 18, 2021 and vest ratably on a quarterly basis over two years.

were granted on November 30, 2021 and vest ratably on a quarterly basis over three years.

July 26, 2019, the Company entered a new employment agreement with Dr.

Glickman that superseded the terms of his existing employment

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.

July 18, 2030

Senior Vice President and

February 18, 2031

Chief Technology Officer

November 30, 2031

November 30, 2032

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.

Options were granted on

July 18, 2020 and vest ratably on a monthly basis over 36 months.

Options were granted on

February 18, 2021 and vest ratably on a quarterly basis over two years.

Options were granted on

November 30, 2021 and vest ratably on a quarterly basis over three years.

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.

Glynn was elevated to permanent Chief Financial Officer in January 2021.

were granted on July 18, 2020 and vest ratably on a quarterly basis over three years.

were granted on February 18, 2021 and vest ratably on a quarterly basis over three years.

Number of unearned restricted stock units that

have not vested

value of unearned restricted stock units that have not vested (a)

Glickman was granted 7,200 options at $50.00

per share vesting quarterly over a three-year period.

Glynn was elevated

to permanent Chief Financial Officer in January 2021.

Options were granted on

July 18, 2020 and vest ratably on a quarterly basis over three years.

Options were granted on

February 18, 2021 and vest ratably on a quarterly basis over three years.

Options were granted on

November 30, 2022 and vest ratably on a quarterly basis over three years.

that have not

Berman, Chief Executive Officer

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Craig Glynn, Chief Financial Officer

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,

November 30, 2021, Mr.

Hamed Alavi, Senior Vice President and Chief Technology Officer

Determined by multiplying

the number of restricted stock units that have not vested by $5.10, the closing price of NVNO’s common stock on December 30,

2022, the last trading day of 2022.

On November 30, 2021, Mr.

Berman was granted 200,000 restricted stock units, Dr.

Glickman was granted 100,000 restricted stock units,

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.

Glickman was granted 100,000 restricted stock units, Mr.

Glynn was granted

50,000 restricted stock units and Mr.

Alavi 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.

Benefit Plans

and Restated 2016 Omnibus Incentive Plan

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.

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

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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.

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.

filed as an exhibit to this Annual Report on Form 10-K.

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.

any award is canceled, terminates, expires or lapses for any reason prior to the issuance of shares or if shares are issued under the

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Cash-based performance awards include annual incentive awards.

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.

cash and equity awards granted under the 2016 plan will be subject to all applicable laws regarding the recovery of erroneously

awarded compensation pursuant to Rule 10D-1 of the Exchange Act, 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.

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

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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.

and is qualified in its entirety by reference to these documents, each of which is incorporated by reference as an exhibit to this Annual

Report on Form 10-K.

limitation of liability and indemnification provisions in our amended and restated certificate of incorporation and amended and restated

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pending or threatened litigation that may result in claims for indemnification by any director or officer.

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

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.

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”).

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

table below shows the compensation paid to our non-employee directors during 2022 and 2021.

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All other compensation

Francis Duhay,

Francis Duhay, M.D.

Sanjay Shrivastava

Matthew Jenusaitis

Under the Company’s nonemployee director compensation program, Dr.

1 unchanged sentence

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.

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.

grant date value of each grant determined in accordance with FASB ASC Topic 718 was $37,500.

Under the Company’s nonemployee director compensation program, Dr.

8 unchanged sentences

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.

Shrivastava, 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.

granted 8,403 options to purchase shares of our common stock on November 30, 2022, as part of their compensation for the year ending

December 31, 2023, at an exercise price of $6.70 per share.

The options were valued at $4.46 per share as of the date of the grant and

will vest in equal quarterly portions starting on March 31, 2023 and through December 31, 2023, such that they are fully vested at December

The grant date value of each grant determined in accordance with FASB ASC Topic 718 was $37,500.

Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

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;

officer and director of our Company;

following table lists, as of February 27, 2023, 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.

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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

of February 27, 2023.

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.

5 unchanged sentences

Marc Glickman, M.D.

Hamed Alavi (5)

Craig Glynn (6)

5 unchanged sentences

Represents beneficial ownership of less than 1%.

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.

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.

on a Schedule 13G filed by the Perceptive Live Sciences Master Fund Ltd.

12 unchanged sentences

days of March 2, 2023.

Includes 285,035 shares of common stock that are issuable upon exercise

of options that are currently exercisable or exercisable within 60 days of March 2, 2023.

21,385 shares of common stock that are issuable upon exercise of options that are currently exercisable or exercisable within 60

37 unchanged sentences

filings with the SEC for the years ended December 31, 2022 and 2021 totaled $197,000 and $194,000, respectively.

amounts include interim procedures, audit fees, fees related to registration statements filed during those years, and attendance at audit

committee meetings.

The above amounts include

interim procedures, audit fees, fees related to registration statements filed during those years, and attendance at audit committee meetings.

For Board of Directors Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditor

15 unchanged sentences

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).

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).

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 December 2, 2020).

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).

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Amendment No.

2 to Amended and

Restated 2016 Omnibus Incentive Plan.*

2 to Amended and Restated 2016 Omnibus Incentive Plan.

(incorporated by reference to Exhibit 10.5 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2021).

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).

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).

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).

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).

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).

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).

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,

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).

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).

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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).

Employment Agreement, dated as of July 29, 2020, by and between enVVeno Medical Corporation and Hamed Alavi.*

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).

6 unchanged sentences

XBRL Taxonomy Extension Schema Document*

Taxonomy Extension Calculation Linkbase Document*

Taxonomy Extension Definition Linkbase Document*

Taxonomy Extension Label Linkbase Document*

Taxonomy Extension Presentation Linkbase Document*

XBRL Taxonomy Extension Calculation Linkbase Document*

XBRL Taxonomy Extension Definition Linkbase Document*

XBRL Taxonomy Extension Label Linkbase Document*

XBRL Taxonomy Extension Presentation Linkbase Document*

and not filed herewith.

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Statements of Cash Flows for the Years Ended December 31, 2022 and 2021

to Financial Statements

Notes to Financial Statements

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

2 unchanged sentences

on the Financial Statements

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 .

have audited the accompanying balance sheets of enVVeno Medical Corporation (the “Company”) as of December 31, 2022 and 2021,

the related statements of operations, changes in stockholders’ equity and cash flows for each of the two years in the period ended

December 31, 2022, 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, 2022 and 2021, and the

results of its operations and its cash flows for each of the two years in the period ended December 31, 2022, in conformity with accounting

principles generally accepted in the United States of America.

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

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have served as the Company’s auditor since 2015.

March 2, 2023

MEDICAL CORPORATION

HANCOCK JAFFE LABORATORIES, INC.

(In thousands except par values, unless otherwise indicated)

Current Assets:

Cash and cash equivalents

Short-term investments

Prepaid expenses and other current assets

18 unchanged sentences

Accumulated deficit

( 81,851,233 )

( 65,323,411 )

Total Stockholders’ Equity

2 unchanged sentences

MEDICAL CORPORATION

HANCOCK JAFFE LABORATORIES, INC.

OF OPERATIONS

For the Years Ended

(In thousands except per share data)

Operating Expenses:

2 unchanged sentences

Loss from Operations

( 16,892,503 )

( 9,135,126 )

Other (Income) Expense:

Gain on extinguishment of note payable

Interest (income) expense, net

Change in fair value of derivative liabilities

Other (income) expense

Realized gain from sales of trading securities

Unrealized gain from trading securities

Interest income, net

Total Other (Income) Expense

( 16,527,822 )

( 9,135,486 )

Deemed dividend to Series C Preferred Stockholders

Net Loss Attributable to Common Stockholders

$ ( 16,527,822 )

$ ( 9,742,706 )

Net Loss Per Basic and Diluted Common Share:

3 unchanged sentences

MEDICAL CORPORATION

HANCOCK JAFFE LABORATORIES, INC.

OF CHANGES IN STOCKHOLDERS’ EQUITY

Preferred Stock

Additional Paid-in

Total Stockholders’

Balance at January 1, 2020

$ ( 56,187,925 )

Common stock issued in private placement offering [1]

Common stock issued in public offerings [2]

Preferred stock issued in private placement [3]

Preferred stock exchange to common stock

( 4,205,406 )

Common stock issued for exercise of warrants

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

Share-Based Compensation

( 9,135,486 )

Balance at December 31, 2020

$ ( 65,323,411 )

net of offering

costs of $ 0.1 million.

net of offering costs of $ 2.2 million.

net of offering costs of $ 0.2 million.

(In thousands, unless otherwise

Stockholders’

Balance at January 1, 2021

$ ( 65,323,411 )

Common stock issued in public offering

Common stock issued for exercise of warrants

Fair Value of Warrants Issued

Shares issued in satisfaction of trade payable

Common stock issued in At The Market Transactions (ATM)

Common stock issued in registered direct offering

Shared-Based Compensation

( 16,527,822 )

Balance at December 31, 2021

( 81,851,233 )

at January 1, 2021

stock issued in public offering

stock issued for exercise of warrants

Value of Warrants Issued

issued in satisfaction of trade payable

stock issued in At The Market Transactions (ATM)

stock issued in registered direct offering

at December 31, 2021

Stockholders’

at January 1, 2022

at December 31, 2022

accompanying notes are an integral part of these financial statements.

MEDICAL CORPORATION

HANCOCK JAFFE LABORATORIES, INC.

OF CASH FLOWS

For the Years Ended

(In thousands, unless otherwise indicated)

Cash Flows from Operating Activities

$ ( 16,527,822 )

$ ( 9,135,486 )

Adjustments to reconcile net loss to net cash used in operating

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

Share-based compensation

1 unchanged sentence

Amortization of right-of-use assets

Change in fair value of derivatives

Unrealized loss from Investments

Gain on extinguishment of note payable

Loss on disposition of fixed assets

Changes in operating assets and liabilities:

3 unchanged sentences

Accrued expenses

Payments on lease liabilities

Operating lease liabilities

Total adjustments

Net Cash Used in Operating Activities

( 11,845,846 )

( 7,677,210 )

Cash Flows from Investing Activities

Maturities of investments

Purchase of property and equipment

Purchases of investments

Net Cash Used in Investing Activities

Cash Flows from Financing Activities

Proceeds from private placement, net

Proceeds from shares issued under ATM

1 unchanged sentence

Proceeds from public offerings, net

Proceeds from preferred stock issued in private placement, net

Proceeds from issuance of note payable

Proceeds from warrant exercises

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MEDICAL CORPORATION

HANCOCK JAFFE LABORATORIES, INC.

OF CASH FLOWS – continued

(In thousands, unless otherwise indicated)

Supplemental Disclosures of Cash Flow Information:

Cash Paid During the Period For:

Interest paid

Cash Received (Paid) During the Period For:

Interest received

Income taxes paid

Non-Cash Investing and Financing Activities

Non-Cash Operating and Financing Activities

Gain on extinguishment of note payable

$ ( 312,700 )

Fair value of common stock issued in satisfaction of trade payable

Fair value of warrants issued to Preferred Exchange Participants, SABR and re-priced placement agent warrant

Derivative liabilities reclassified to equity

accompanying notes are an integral part of these financial statements.

MEDICAL CORPORATION

HANCOCK JAFFE LABORATORIES, INC.

TO FINANCIAL STATEMENTS

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.

Medical Corporation is a late stage clinical 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.

Chronic Venous Disease (CVD) is the

world’s most prevalent chronic disease, impacting approximately 71% of the adult population of the U.S.

Chronic Venous

Insufficiency (CVI), is a large subset of CVD, which most often 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.

The Company is developing surgical and

non-surgical replacement venous valves for patients suffering from severe CVI of the deep venous system of the leg.

Company’s lead product is the VenoValve®, which is a first-in-class surgical replacement venous valve that is currently being

evaluated in a U.S.

pivotal study.

The Company is also developing a second product called enVVe™, which is a first-in-class, non-surgical,

transcatheter based replacement venous valve.

The Company is currently waiting for regulatory approval to begin a first-in-human study

Both the VenoValve and enVVe are designed to act as one-way valves, to help assist in propelling blood up the veins of the

leg, and back to the heart and lungs.

VenoValve and enVVe are being developed first for approval by the U.S.

Food and Drug Administration (FDA).

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.

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 not pursuing further development of the CoreoGraft, which is now outside of our primary focus area.

We expect the VenoValve to

be eligible for FDA approval first, followed two to three years later by enVVe.

Once approved, we expect the VenoValve and enVVe to co-exist,

with the VenoValve as a surgical replacement venous valve option and enVVe as a non-surgical replacement venous valve option.

currently no devices approved as surgical or non-surgical replacement venous valves, and there are no effective treatments for deep venous

CVI caused by incompetent valves.

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

leased manufacturing facility in Irvine,

California, which has been ISO 13485-2020 certified for the design, development and manufacturing of tissue based implantable medical

2 – Management’s Liquidity Plan

of December 31, 2021, the Company had a cash balance of $ 54.7

million and working capital of $ 53.5

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.

of December 31, 2022, the Company had a cash balance of $ 4.6 million, investments of $ 34.5 and working capital of $ 37.9 million.

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, 2022, are sufficient to meet our obligations as they become due within one year after the date of this Annual Report.

3 – Significant Accounting Policies

5 unchanged sentences

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

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

The fair values of these investments approximate their carrying values.

Investments with original maturities of greater than three months

and remaining maturities of less than one year are classified as short-term investments.

Investments with maturities beyond one year

are classified as long-term investments.

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.

and Equipment, Net

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MEDICAL CORPORATION

HANCOCK JAFFE LABORATORIES, INC.

TO FINANCIAL STATEMENTS

27 unchanged sentences

ASC 820 describes three levels of inputs that may be used to measure

Quoted prices available

in active markets for identical assets or liabilities trading in active markets.

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.

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.

MEDICAL CORPORATION

HANCOCK JAFFE LABORATORIES, INC.

TO FINANCIAL STATEMENTS

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.

prices available in active markets for identical assets or liabilities trading in active markets.

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.

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

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.

Loss per Share

1 unchanged sentence

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 ).

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.

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.

MEDICAL CORPORATION

HANCOCK JAFFE LABORATORIES, INC.

TO FINANCIAL STATEMENTS

16 unchanged sentences

and (v) the share options are nontransferable and nonhedgeable.

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.

volatility assumption is based on the historical volatility of the Company’s common stock with an equivalent remaining expected

9 unchanged sentences

is recognized only for those awards expected to vest.

Forfeitures of unvested stock options are recorded

when they occur.

Concentrations

Company maintains cash with major financial institutions.

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

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

There were aggregate uninsured cash balances of

$ 54.5 million and $ 9.1 million as of December 31, 2021 and 2020, respectively.

of unvested stock options are recorded when they occur.

Contingencies

Company will accrue an estimated loss if information available before the financial statements are issued or are available to be issued

indicates that it is probable that an asset had been impaired or a liability had been incurred at the date of the financial statements

and the amount of loss can be reasonably estimated.

Adopted 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.

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.

adoption of this standard did not have a material impact on our financial statements.

Accounting Standards

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.

amendments in this update are effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal

The adoption of this standard did not have a material impact on our financial statements.

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

The amendments in this update are effective for fiscal years beginning after December 15, 2021, including interim periods

within those fiscal years.

The adoption of this standard did not have a material impact on our financial statements.

January 2020, the FASB issued Accounting Standards Update 2020-01 (“ASU 2020-01”) Investments-Equity Securities (Topic 321),

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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.

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

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

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.

amendments in this update are effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal

We do not expect the adoption of this standard to have a material impact on our financial statements and related disclosures.

The adoption of this standard did not have a material impact

on our financial statements.

Accounting Standards

October 2021, the FASB issued Accounting Standards Update 2021-08 (“ASU No.

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MEDICAL CORPORATION

HANCOCK JAFFE LABORATORIES, INC.

TO FINANCIAL STATEMENTS

4 – Concentrations

Company maintains cash with major financial institutions.

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

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

There were aggregate uninsured cash balances of

$ 4.3 million as of December 31, 2022.

5 – Investments

components of investments were as follows at December 31, 2022:

Schedule of Investments

Short-Term Investment

Fair Value Level 1

Government securities

Total debt investments

losses of $ 0.1 million for the year ending December 31, 2022 are from fixed-income securities and primarily attributable to changes

in interest rates.

Management does not believe any remaining unrealized losses represent impairments based on our evaluation of

available evidence.

There were no similar investments at December 31, 2021.

6 – Property and Equipment

1 unchanged sentence

of Property and Equipment

(In thousands)

Laboratory equipment

5 unchanged sentences

Property and equipment, net

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.

expense was $ 0.2 million and $ 0.1

million for the years ended December 31, 2022 and 2021, respectively.

Depreciation expense is reflected in general and administrative expenses in

the accompanying statements of operations.

MEDICAL CORPORATION

TO FINANCIAL STATEMENTS

7 – Right-of-Use Assets and Lease Liabilities

16 unchanged sentences

of Supplemental Cash Flow Information Related to Operating Lease

( Dollars in thousands)

For the Year Ended

1 unchanged sentence

Operating cash flow information:

Cash paid for amounts included in the measurement of lease

Cash paid for amounts included in the measurement of lease liabilities

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

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of Maturity of Lease Liabilities

Year ended December 31, 2022

(In thousands)

Year ended December 31, 2023

6 unchanged sentences

MEDICAL CORPORATION

HANCOCK JAFFE LABORATORIES, INC.

TO FINANCIAL STATEMENTS

2 unchanged sentences

of Accrued Expenses

(In thousands)

Accrued compensation costs

1 unchanged sentence

Accrued research and development

Accrued warrants

Accrued expenses

9 – 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.

April 12, 2020, the Company obtained a loan (the “Loan”) in the amount of $ 0.3 million, 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,

2 unchanged sentences

been forgiven.

In connection with this, the Company recorded a gain on extinguishment of debt of $ 312,700 .

In connection with this, the Company recorded a gain on extinguishment of debt of $ 0.3 million.

10 – Income Taxes

1 unchanged sentence

of Income Tax Provision (Benefit)

For the Years Ended December 31,

( 2,700,372 )

( 1,828,584 )

For the Years Ended

State and local:

Current and Deferred Federal, State and Local, Tax Expense

( 3,600,496 )

( 2,438,112 )

State and local:

State and Local, Tax Expense

Change in valuation allowance

4 unchanged sentences

of Effective Income Tax Rate Reconciliation

the Years Ended December 31,

For the Years Ended

Tax benefit at federal statutory rate

6 unchanged sentences

MEDICAL CORPORATION

HANCOCK JAFFE LABORATORIES, INC.

TO FINANCIAL STATEMENTS

4 unchanged sentences

Research and development credit carryforwards

Research and development expense

Intangible assets

8 unchanged sentences

valuation allowance

( 14,308,838 )

( 10,708,342 )

740 requires that the tax benefit of net operating losses, temporary differences and credit carryforwards be recorded as an asset to

5 unchanged sentences

The valuation

allowance increased by $ 3.6

million and $ 2.4

million during the years ended December 31, 2021

and 2020, respectively.

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.

allowance increased by $ 5.0 million and $ 3.6 million during the years ended December 31, 2022 and 2021, respectively.

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 greater than 50 %

ownership changes in 2018 and 2021.

December 31, 2022 and 2021, the Company had post-ownership change net operating loss carryforwards for federal income tax purposes

of approximately $ 45.7

million and $ 35.0

of approximately $ 52.7 million and $ 45.7

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

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 2020 and 2021 ownership changes, the

Company expects $ 10.4

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 %

Under current federal tax law, post-2017 federal NOLs in the aggregate amount of $ 40.7

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

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

The Company also has federal research and development tax credit carryforwards of

approximately $ 0.2

million which begin to expire in 2027.

of December 31, 2021 and 2020, the Company had net operating loss carryforwards for state income tax purposes of approximately

million and $ 35.0

million, respectively, which can be carried forward for twenty years and begin to expire in 2028.

of December 31, 2022 and 2021, the Company had net operating loss carryforwards for state income tax purposes of approximately $ 52.5 million

and $ 45.7 million, respectively, which can be carried forward for twenty years and begin to expire in 2029.

Company files income tax returns in the U.S.

11 unchanged sentences

expense and penalties as general and administrative expenses in the statements of operations.

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

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.

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 2021

and an expected tax loss for 2022, the suspension will not have an impact on the Company’s NOL in California.

On February 9, 2022,

Newsom signed SB113 which removes the restrictions in AB85 effective for the 2022 tax year.

MEDICAL CORPORATION

HANCOCK JAFFE LABORATORIES, INC.

TO FINANCIAL STATEMENTS

1 unchanged sentence

Claims and Assessments

the normal course of business, the Company may be involved in legal proceedings, claims and assessments arising in the ordinary course

the normal course of business, the Company may be involved in legal proceedings, claims and assessments.

The Company records legal costs associated with loss contingencies as incurred and accrues for all probable and estimable

3 unchanged sentences

The case is entitled Rankin v.

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 and was

filed on August 31, 2020.

30-2020-01157857 and was filed on August

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

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

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.

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.

of the date of these financial statements, the amount of loss or range 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, 2022.

MEDICAL CORPORATION

TO CONDENSED FINANCIAL STATEMENTS

12 – Stockholders’ Equity

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.

2021 and 2020 the Company has completed various equity transactions to raise capital through the placement of its common and preferred

The following table provides an overview of these transactions.

of Equity Transactions to Raise Capital Through the Placement

2021 the Company completed various equity transactions to raise capital through the placement of its common stock.

The following table

provides an overview of these transactions.

of Equity Transactions to Raise Capital

Number of shares

February 25, 2020

Private placement

April 28, 2020

Registered Direct Offering

July 17, 2020

Public Offering

July 17, 2020

Private Placement

Preferred Stock

October 9, 2020

Registered Direct Offering

Number of pre-funded warrants

February 11, 2021

3 unchanged sentences

Registered Direct Offering

MEDICAL CORPORATION

HANCOCK JAFFE LABORATORIES, INC.

TO CONDENSED FINANCIAL STATEMENTS

C Convertible Preferred Stock

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.

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.

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.

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.

of the exchange of the Preferred Stock for common stock, it is no longer outstanding (see below).

liquidation preference of the Preferred Stock was subordinate and ranks junior to all indebtedness of the Company.

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.

MEDICAL CORPORATION

HANCOCK JAFFE LABORATORIES, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

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

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.

MEDICAL CORPORATION

HANCOCK JAFFE LABORATORIES, INC.

TO FINANCIAL STATEMENTS

Common Stock and pre-funded warrants

summary of warrant activity during the years ended December 31, 2022 and 2021 is presented below:

3 unchanged sentences

Outstanding and exercisable, December 31, 2022

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

per share, and warrants to purchase 18,056

shares of common stock at a purchase price of

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.

total amount of the payment to settle the dispute was $ 0.5

million, including the value of the warrants.

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

The investment banking agreement has now been terminated with no further obligations.

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 ).

the Company agreed to re-price warrants issued to the placement agent for the Company’s February 25, 2020 private placement.

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.

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

MEDICAL CORPORATION

HANCOCK JAFFE LABORATORIES, INC.

TO FINANCIAL STATEMENTS

– Derivative Liabilities

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.

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 derivative liability was $ 199,907 at March 31, 2020, $ 281,183 at June 30, 2020, and $ 334,229 at September 15, 2020.

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.

Company reassessed the classification at each balance sheet date to determine if it should be changed as a result of events during the

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.

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

September 15,

Projected Volatility

Risk-Free Rate

Contractual Term (Years)

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

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 .

MEDICAL CORPORATION

HANCOCK JAFFE LABORATORIES, INC.

TO FINANCIAL STATEMENTS

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

Balance – January 1, 2020

Derivative liabilities associated with the issuance of common stock warrants

Derivative liabilities associated with the issuance of placement agent warrants

Change in fair value of derivative liabilities

Reclassification of warrant derivatives to equity

Balance – December 31, 2020

13 – Share Based Compensation

12 unchanged sentences

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.

Plan was adopted in 2016 and amended in 2018, 2020 and 2021 to increase the number of shares authorized to be awarded under

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.

No awards may be issued after

November 21, 2026.

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

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.

number of shares authorized is greater than the 20 % minimum.

fair value of each option grant is estimated at the grant date using the Black Scholes method.

6 unchanged sentences

96.0 – 101.5 %

112.94 – 103.6 %

Risk free interest rate

2 unchanged sentences

Dividend yield

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.

MEDICAL CORPORATION

HANCOCK JAFFE LABORATORIES, INC.

TO FINANCIAL STATEMENTS

summary of the option activity during the years ended December 31, 2022 and 2021 is presented below:

9 unchanged sentences

MEDICAL CORPORATION

HANCOCK JAFFE LABORATORIES, INC.

TO FINANCIAL STATEMENTS

13 unchanged sentences

Restricted Stock Unit for

Note 12 – Net Loss Per Share

14 – 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 December 31, 2022 and 2021.

Warrants exercisable for nominal consideration are included in the number of common shares outstanding to calculate

net loss per common share.

of Dilutive Net Loss Per Common Share

Shares of common stock issuable upon exercise of warrants

Shares of common stock issuable upon exercise of options and restricted stock

Potentially dilutive common stock equivalents excluded from diluted net loss

Shares of common stock issuable upon exercise of options and restricted stock units

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

Anti-dilutive common shares

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

What changed 10-K

Item 9A. Controls and Procedures