Item
1.01 Entry into a Material Definitive Agreement
On
June 1, 2020, Hancock Jaffe Laboratories, Inc. (the “Company”) entered into a Securities Purchase Agreement (the “Purchase
Agreement”) with certain investors (the “Investors”) for the purpose of raising approximately $1.333 million
in gross proceeds for the Company. Pursuant to the terms of the Purchase Agreement, the Company agreed to sell, in a registered
direct offering priced at the market, an aggregate of 2,930,402 shares (the “Shares”) of the Company’s common
stock, par value $0.00001 per share (the “Common Stock”), at a purchase price of $0.33 per Share, and in a concurrent
private placement, warrants to purchase up to 2,930,402 shares (the “Warrant Shares”) of Common Stock (the “Warrants”),
at a purchase price of $0.125 per Warrant, for a combined purchase price per share
and warrant of $0.455 which is priced at the market under Nasdaq rules. The Warrants will be exercisable immediately on the date
of issuance at an exercise price of $0.33 per share and will expire five years following the date of issuance.
The
closing of the sales of these securities under the Purchase Agreement is expected to occur on
or about June 3, 2020, subject to customary closing conditions.
Spartan
Capital Securities, LLC is acting as the exclusive placement agent (the “Placement Agent”) for the Company, on a “reasonable
best efforts” basis, in connection with the offering. Pursuant to that certain Placement Agency Agreement, dated as of April
24, 2020, by and between the Company and the Placement Agent (the “Placement Agency Agreement”), the Placement Agent
will be entitled to a cash fee of 8.0% of the aggregate gross proceeds of the offering, a warrant to purchase up to a number of
shares of Common Stock equal to 8% of the Shares sold in substantially the same form as the Warrants and the reimbursement of
certain out-of-pocket expenses up to an aggregate of $55,000.
The
net proceeds to the Company from the transactions, after deducting the Placement Agent’s fees and expenses but before paying
the Company’s estimated offering expenses, and excluding the proceeds, if any, from the exercise of the Warrants, are expected
to be approximately $1,130,970. The Company intends to use the net proceeds from the transactions for working capital and
general corporate purposes.
The
Shares (but not the Warrants or the Warrant Shares) were offered and sold by the Company pursuant to a prospectus supplement dated
as of June 1, 2020, which was filed with the Securities and Exchange Commission (the “SEC”), in connection with a
takedown from the Company’s effective shelf registration statement on Form S-3, which was filed with the Securities and
Exchange Commission (the “SEC”) on April 7, 2020 and subsequently declared effective on April 16, 2020 (File No. 333-237592)
(the “Registration Statement”), and a related prospectus dated as of April 16, 2020 contained in such Registration
Statement.
The
forms of the Purchase Agreement, the Warrant, as well as the Placement Agency Agreement, are filed as Exhibits 10.1, 4.1 and 10.2,
respectively, to this Current Report on Form 8-K. The foregoing summaries of the terms of these documents are subject to, and
qualified in their entirety by, such documents, which are incorporated herein by reference.
The
legal opinion and consent of Ellenoff Grossman & Schole LLP relating to the securities is filed as Exhibit 5.1 to this Current
Report on Form 8-K and is incorporated herein by reference.