What changed in this filing

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Item 1. Financial Statements

2024-05-08 compared with 2023-10-26 · 108 added, 159 removed, 119 unchanged (69% of the section changed)

2 unchanged sentences

BALANCE SHEETS

September 30, 2023

March 31, 2024

December 31, 2023

19 unchanged sentences

no shares issued or outstanding

Common stock, par value $ 0.00001 , 250,000 shares authorized, 9,472 shares issued and outstanding as of September 30, 2023 and December 31, 2022

Common stock, par value $ 0.00001 , 250,000 shares authorized, 13,330 and 13,317 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively

Additional paid-in capital

2 unchanged sentences

Total Liabilities and Stockholders’ Equity

Notes to these Condensed Financial Statements

Notes to these Unaudited Condensed Financial Statements

MEDICAL CORPORATION

1 unchanged sentence

For the Three Months Ended

For the Nine Months Ended

September 30,

(In thousands, except per share data)

Operating Expenses:

Selling, general and administrative expenses

Research and development expenses

Selling, general and administrative expenses

Loss from Operations

Other (Income) Expense:

Other Income:

Realized gain from sales of trading securities

Unrealized (gain) loss from trading securities

Unrealized gain from trading securities

Interest income, net

Total Other (Income) Expense

Total Other Income

Net Loss Per Basic and Diluted Common Share:

1 unchanged sentence

Basic and Diluted

Notes to these Condensed Financial Statements

Notes to these Unaudited Condensed Financial Statements

MEDICAL CORPORATION

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIENCY)

thousands, unless otherwise indicated)

Three Months Ended September 30, 2023

Stockholders’

Balance at July 1, 2023

$ ( 119,386 )

Share-Based Compensation

Balance at September 30, 2023

Balance at January 1, 2024

$ ( 130,036 )

Three Months Ended September 30, 2022

Additional Paid-in

Stockholders’

Balance at July 1, 2022

Share-Based Compensation

Balance at September 30, 2022

Stock-based compensation

Options exercised

Balance at March 31, 2024

$ ( 135,028 )

Nine Months Ended September 30, 2023

Additional Paid-in

Stockholders’

1 unchanged sentence

$ ( 106,520 )

Share-Based Compensation

Balance at September 30, 2023

$ ( 106,520 )

Nine Months Ended September 30, 2022

Additional Paid-in

Stockholders’

Balance at January 1, 2022

Share-Based Compensation

Balance at September 30, 2022

Stock-based compensation

Balance at March 31, 2023

$ ( 112,912 )

Notes to these Condensed Financial Statements

Notes to these Unaudited Condensed Financial Statements

MEDICAL CORPORATION

1 unchanged sentence

thousands, unless otherwise indicated)

For the Nine Months Ended

September 30,

For the Three Months Ended

Cash Flows from Operating Activities

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

Share-based compensation

Stock-based compensation

Depreciation and amortization

Amortization of right of use assets

Unrealized (gain) loss from investments, net

Unrealized gain from Investments

Changes in operating assets and liabilities:

Prepaid expenses and other current assets

Security deposit and other assets

Accounts payable, accrued expenses and other current liabilities

2 unchanged sentences

Cash Flows from Investing Activities

Purchase of property and equipment

Purchases of investments

Maturities of investments

Net Cash Provided by (Used in) Investing Activities

Net Increase (Decrease) in Cash, Cash Equivalents

Purchase of investments

Purchase of property and equipment

Net Cash Provided by Investing Activities

Cash Flows from Financing Activities

Proceeds from Stock Option Exercises

Net Cash Provided by Financing Activities

Net Decrease in Cash

Cash, cash equivalents - Beginning of period

Cash, cash equivalents - End of period

Notes to these Condensed Financial Statements

MEDICAL CORPORATION

STATEMENTS OF CASH FLOWS (Continued)

thousands, unless otherwise indicated)

For the Nine Months Ended

September 30,

Supplemental Disclosures of Cash Flow Information:

Non-Cash Financing Activities:

Fair value of warrants issued in satisfaction of trade payable

Notes to these Condensed Financial Statements

Notes to these Unaudited Condensed Financial Statements

MEDICAL CORPORATION

1 unchanged sentence

1 – Business Organization and Nature of Operations

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

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

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

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

The Company is developing surgical and non-surgical replacement

venous valves for patients suffering from severe Chronic Venous Insufficiency (“CVI”) of the deep venous system of the leg.

CVI most often

occurs when valves inside 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

The Company’s lead product is the VenoValve® which is currently being evaluated in a U.S.

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

currently being evaluated in a U.S.

pivotal study.

Company is also developing a second product called enVVe®, which is a transcatheter based replacement venous valve.

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

Company develops and manufactures its products in a 14,507 sq.

leased manufacturing facility in Irvine, California, which has been

ISO 13485-2016 certified for the design, development and manufacturing of tissue based implantable medical devices.

The Company is also developing a second product called enVVe®, which is a

potential first-in-class, non-surgical, transcatheter based replacement venous valve system consisting of the enVVe valve, the enVVe delivery system, and the delivery system accessories.

The Company is currently

conducting pre-clinical testing on enVVe.

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).

We expect the VenoValve to

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

If 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.

2 – Management’s Liquidity Plan

Company has incurred historical losses and operating cash outflows, expects to continue to do so 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 September 30, 2023 are sufficient to meet our obligations as

they become due within one year after the date of this Quarterly Report.

MEDICAL CORPORATION

TO CONDENSED FINANCIAL STATEMENTS

of March 31, 2024, the Company had a cash and investment balance of $ 42.9 million and working capital of $ 41.8 million.

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

and sustain operations.

3 – Significant Accounting Policies

6 unchanged sentences

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

the Company as of September 30, 2023 and December 31, 2022, and for the three and nine months ended September 30, 2023 and 2022.

results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the operating results

for the full year.

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

thereto for the year ended December 31, 2022 included in the Company’s Form 10-K filed with the SEC on March 2, 2023.

The condensed

balance sheet as of December 31, 2022 has been derived from the Company’s audited financial statements.

the Company as of March 31, 2024 and December 31, 2023, and for the three months ended March 31, 2024 and 2023.

results of operations for the three months ended March 31, 2024 are not necessarily indicative of the operating results for the full

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

the year ended December 31, 2023 included in the Company’s Annual Report on Form 10-K filed with the SEC on February 29, 2024.

The accompanying condensed balance sheet as of December 31, 2023 has been derived from the Company’s audited financial statements.

MEDICAL CORPORATION

TO CONDENSED FINANCIAL STATEMENTS

4 – Investments

components of investments were as follows at September 30, 2023 and December 31, 2022:

components of investments were as follows at March 31, 2024 and December 31, 2023:

Schedule of Components of Investments

September 30, 2023

March 31, 2024

December 31, 2023

2 unchanged sentences

Total debt investments

and realized gains and losses on the accompanying statement of operations result from fixed-income securities and are primarily

attributable to changes in interest rates.

Management does not believe any remaining unrealized losses represent impairments based

on our evaluation of available evidence.

MEDICAL CORPORATION

TO CONDENSED FINANCIAL STATEMENTS

and realized gains and losses on the accompanying statement of operations result from fixed-income securities and are primarily attributable

to changes in interest rates.

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

of available evidence.

5 – Concentrations

1 unchanged sentence

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

Deposit Insurance Corporation (“FDIC”) up to $ 0.25 million at each institution.

There were aggregate uninsured cash balances

of $ 4.7 million and $ 4.3 million as of September 30, 2023 and December 31, 2022, respectively.

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

There were aggregate uninsured cash balances of

$ 2.1 million and $ 3.4 million as of March 31, 2024 and December 31, 2023, respectively.

6 – Property and Equipment

of March 31, 2024 and December 31, 2023, property and equipment consist of the following:

of Property and Equipment

(In thousands)

March 31, 2024

December 31, 2023

Laboratory equipment

Computer equipment and software

Leasehold improvements, furniture and fixtures

Total property and equipment

accumulated depreciation

Property and equipment, net

expense amounted to $ 0.1 million for the three months ended March 31, 2024 and 2023.

Depreciation expense is reflected in general and

administrative expenses in the accompanying statements of operations.

MEDICAL CORPORATION

TO CONDENSED FINANCIAL STATEMENTS

7 – Accounts Payable Accrued Expenses and Other Current Liabilities

of September 30, 2023, and December 31, 2022, accounts payable, accrued expenses and other current liabilities consist of the following:

of March 31, 2024, and December 31, 2023, accounts payable, accrued expenses and other current liabilities consist of the following:

of Accounts Payable Accrued Expenses and Other Current Liabilities

(In thousands)

September 30, 2023

March 31, 2024

December 31, 2023

1 unchanged sentence

Accrued compensation costs

Accrued professional fees

Other accrued expenses

5 unchanged sentences

Rankin Complaints

On July 9, 2020, the Company was

served with a civil complaint filed in the Superior Court for the State of California, County of Orange by a former employee, Robert Rankin,

who resigned as the Company’s Chief Financial Officer, Secretary, and Treasurer on March 30, 2020.

July 9, 2020, the Company was served with a civil complaint filed in the Superior Court for the State of California, County of Orange

by a former employee, Robert Rankin, who resigned his employment on or about March 30, 2020.

The case is entitled Rankin v.

Hancock Jaffe Laboratories, Inc.

Hancock Jaffe

Laboratories, Inc.

et al., Case No.

30-2020-01146555-CU-WR-CJC and was filed on May 27, 2020.

The complaint asserts causes

of action alleging failure to timely pay Mr.

Rankin’s accrued and unused vacation and three months’ severance under his July

16, 2018 employment agreement, Labor Code violations, and unfair competition, and seeks damages for back pay, unpaid wages, compensatory

damages, punitive damages, and attorney’s fees and costs.

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.

The second complaint asserts causes of action alleging defamation, 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 denies all claims

in both matters (which have now been consolidated), is vigorously defending same, and has asserted counterclaims against Mr.

Rankin contending

that he breached his fiduciary duty and employment agreement with the Company and the Company incurred damages as a result.

continues to believe it has meritorious defenses to both matters which are currently set for trial on October 30, 2023.

As of the date of these financial

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

Accordingly, no amounts related

to these complaints are accrued as of September 30, 2023.

30-2020-01157857 and was filed on August

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

Rankin’s accrued and unused

vacation and three months’ severance under his July 16, 2018 employment agreement, defamation, unlawful labor code violations,

sex-based discrimination, and unfair competition, and seeks damages for lost wages, emotional and mental distress, consequential damages,

punitive damages and attorney’s fees and costs.

Company 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 July 22, 2024.

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

Accordingly, no amounts related to these complaints are accrued as of March 31, 2024.

MEDICAL CORPORATION

TO CONDENSED FINANCIAL STATEMENTS

NOTES TO CONDENSED FINANCIAL STATEMENTS

9 – Stockholders’ Equity

the nine-months ended September 30, 2023, the Company granted options to employees for the purchase of one-hundred-ten thousand shares with

a weighted average exercise price of $ 6.70 per share.

Company recognized $ 4.1 million and $ 6.6 million of share-based compensation related to stock options during the nine months ended September

30, 2023 and 2022, respectively.

of September 30, 2023, there was $ 4.5 million of unrecognized stock-based compensation expense related to outstanding stock options that

will be recognized over the weighted average remaining vesting period of 1.3 years.

compensation is reflected in selling, general and administrative expenses in the accompanying condensed statements of operations and

million and $ 1.8

million during the three months ended March 31, 2024 and 2023, respectively.

As of March 31, 2024, there was $ 5.9

million of unrecognized stock-based compensation

expense related to outstanding stock options that will be recognized over the weighted average remaining vesting period of 1.9

10 – Net Loss per Share

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

per common share as of September 30, 2023 and 2022:

per common share as of March 31, 2024 and 2023:

Schedule of Dilutive Net Loss Per Common Share

(In thousands)

September 30,

(In thousands)

Shares of common stock issuable upon exercise of warrants

1 unchanged sentence

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

10 – Subsequent Events

October 6, 2023, the Company entered into a Securities Purchase Agreement with certain

The transaction closed on October 11, 2023.

The following table provides an overview of this

of Common Stock and Warrants Activity

Number of shares

Number of pre-funded warrants

Number of Tranche A Warrants

Number of Tranche B Warrants

(In thousands)

October 11, 2023

PIPE Offering

Common Stock, warrants and pre-funded warrants

purchase price was $ 5.806

for each unit consisting of one share of common stock (or one Pre-Funded Warrant in lieu thereof), one Tranche A Warrant and one

Tranche B Warrant (the pre-funded warrants, Tranche A Warrants and Tranche B Warrants, collectively, the “Warrants”).

Warrants are immediately exercisable at an exercise price of $ 6.945 per share for the Tranche A Warrants, $ 8.334 per share for the Tranche

B Warrants, and a nominal exercise price of $ 0.0001 per share for the Pre-Funded Warrants.

The Tranche A Warrants will expire on the

earlier of (i) the thirtieth (30th) calendar day following the release by the Company of initial top line efficacy data including rVCSS

data constituting a 3 or more-point improvement for the SAVVE clinical trial or (ii) October 11, 2024.

The Tranche B Warrants will expire

on the earlier of (i) the thirtieth (30th) calendar day following the PMA Approval by the U.S.

FDA for the VenoValve or (ii) October

The Pre-Funded Warrants will terminate when they are exercised in full.

The Company also issued to the placement

agent in the transaction warrants to purchase 241,000

shares of Common Stock at an exercise price of $ 6.945

which expire on

October 11, 2028 .

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

What changed 10-Q

Item 1. Financial Statements