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Item
1.01
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Entry
into a Material Definitive Agreement
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On
September 3, 2021, Hancock Jaffe Laboratories, Inc. (the “Company”) entered into a Securities Purchase Agreement (the “Purchase
Agreement”) with a fund managed by Perceptive Advisors, an institutional investor (the “Investor”),
for the purpose of raising approximately $20 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 under Nasdaq rules, an aggregate of 781,615 shares (the
“Shares”) of the Company’s common stock, par value $0.00001 per share (the “Common Stock”), at a purchase
price per Share of $7.872 and Pre-Funded Warrants (the “Pre-Funded Warrants”) to purchase an aggregate of 1,759,035 shares
of Common Stock at a purchase price per Pre-Funded Warrant of $7.8719. The Pre-Funded Warrants
will be exercisable immediately on the date of issuance at an exercise price of $0.0001 per share and may be exercised at any time until
all of the Pre-Funded Warrants are exercised in full.
The
closing of the sales of these securities under the Purchase Agreement is expected to occur on or
about September 9, 2021, subject to customary closing conditions.
Ladenburg
Thalmann & Co. Inc. 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 September
3, 2021, 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, placement agent warrants (the “Placement Agent
Warrants”) to purchase a number of shares of Common Stock equal to 6.0% of the aggregate number of Shares and Pre-Funded Warrants
sold in the offering at an exercise price of 125% of the offering price per Share with an expiration date five years from the effective
date of the shelf registration statement, and the reimbursement of certain out-of-pocket expenses up to $60,000.
The
net proceeds to the Company from the registered direct offering, after deducting the Placement Agent’s fees and expenses but before
paying the Company’s estimated offering expenses, are expected to be approximately $18.2 million. The Company intends to use the
net proceeds from the offering for general corporate purposes and general working capital including, without limitation, clinical development
of the VenoValve.
Pursuant
to the Purchase Agreement, except for certain exemptions, the Company is prohibited from issuing common stock or common stock equivalents
for fifty days after the closing and from engaging in variable rate transactions for a period of six months from the closing.
The
Shares and Pre-Funded Warrants were offered and sold by the Company pursuant to a prospectus supplement which was filed with the Securities
and Exchange Commission (the “SEC”) on September 7, 2021 in connection with a takedown from the Company’s effective
shelf registration statement on Form S-3, which was filed with the SEC on April 7, 2020 and subsequently declared effective on April
16, 2020 (File No. 333-237592) (the “Registration Statement”).
The
forms of the Purchase Agreement, the Placement Agency Agreement, the Pre-Funded Warrant, and the Placement Agent Warrant are filed as
Exhibits 10.1, 10.2, 4.1, and 4.2 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.
