HJLI Hancock Jaffe Laboratories Inc

On February 25, 2020, Hancock Jaffe Laboratories, Inc. (the “Company”) raised $650,000 in gross proceeds through a private placement bridge offering of its common stock and warrants to purchase its common stock to certain accredited investors (the “Bridge Offering”). The Company sold an aggregate of 1,300,000 shares of common stock and warrants to purchase 1,300,000 shares of common stock in the Bridge Offering pursuant to a securities purchase agreement between the Company and each of the investors in the Bridge Offering (the “Purchase Agreement”). Pursuant to the terms of the Purchase Agreement, the Company has agreed to hold a meeting of its stockholders on or prior to May 25, 2020 for the purpose of seeking approval of either an increase in the number of shares of common stock the Company is authorized to issue or a reverse split of the Company’s common stock (a “Capital Event”). The Purchase Agreement also contains customary representations, warranties and agreements.

The warrants issued in the Bridge Offering will be exercisable beginning on the date on which the Company’s stockholder’s approve a Capital Event, at an exercise price per share equal to $0.79, subject to certain adjustments pursuant to the terms of the warrants, and will expire on the five year anniversary of the date of issuance. The warrants contain a mandatory exercise provision which provides that, at the sole option of the Company upon 30 days’ written notice, the Company may require the holders of the warrants to exercise such warrants if the average of the daily volume weighted average for any ten consecutive trading days is greater than $2.00 and there is an effective registration statement registering the resale of the shares underlying the warrants. Any warrants not exercised following such 30 day period will be forfeited.

The Company engaged Spartan Capital Securities, LLC, a FINRA-member (the “Placement Agent”), to act as exclusive placement agent for the Bridge Offering. In consideration for the Placement Agent’s services in the Bridge Offering, the Company agreed to pay a fee in cash equal to 10% of the aggregate gross proceeds raised by the Placement Agent in the Bridge Offering. The Placement Agent is also entitled to a warrant to purchase 82,279 shares of the Company’s common stock containing substantially the same terms as the warrant issued to investors in the Bridge Offering.

The Company intends to use the proceeds of the Bridge Offering for working capital and general corporate purposes and payment of the fees and expenses of the Bridge Offering.

The form of Purchase Agreement and warrant are attached to this Current Report as Exhibits 10.1 and 4.1, respectively. All descriptions of the Purchase Agreement and warrant herein are qualified in their entirety to the text of Exhibits 10.1 and 4.1 hereto, which is incorporated herein by reference.

The securities issued in the Bridge Offering are exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act and/or Rule 506(b) of Regulation D promulgated thereunder because, among other things, the transaction did not involve a public offering, the investors are accredited investors, the investors took the securities for investment and not resale and the Company took appropriate measures to restrict the transfer of the securities.