Item
1.01
|
Entry
into a Material Definitive Agreement
|
On
October 7, 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
$5,100,000 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, an aggregate of 9,532,709 shares (the “Shares”) of the Company’s common stock,
par value $0.00001 per share (the “Common Stock”), and, in a concurrent private placement, warrants (the “Warrants”)
to purchase 9,532,709 shares of Common Stock (the “Warrant Shares”) for a combined
purchase price per Share and Warrant of $0.535 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 $0.41 per share and will expire seven 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 October 9, 2020, 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 October
7, 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 management fee equal to 1.5% of the
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 sold in the offering in substantially the same form as
the Warrants except that the exercise price will be 125% of the offering price per Share and will have an expiration date of five
years form the date of commencement of sales, and the reimbursement of certain out-of-pocket expenses up to $80,000.
The
net proceeds to the Company from the registered direct offering and concurrent private placement, after deducting the Placement
Agent’s fees and expenses but before paying the Company’s estimated offering expenses, are expected to be approximately
$4.6 million. The Company intends to use the net proceeds from the transactions for the continued development of the Company’s
two lead products, VenoValve and the CoreoGraft, and for general corporate purposes, including working capital.
The
Shares (but not the Warrants or the Warrant Shares) were offered and sold by the Company pursuant to a prospectus supplement which
will be 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 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 Warrant and 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.