Item
1.01
|
Entry
into a Material Definitive Agreement
|
On
April 24, 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
$1.0 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 1,886,793 shares (the “Shares”) of the Company’s
common stock, par value $0.00001 per share (the “Common Stock”), at a purchase price of $0.405 per Share, and
in a concurrent private placement, warrants to purchase up to 1,886,793 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 $0.53 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 $0.405 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 April 28, 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 $825,786. 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 April 24, 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.