As
filed with the Securities and Exchange Commission on October 5, 2020
Registration
No. 333-248865
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Amendment No. 1 to
FORM
S-3
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933
Hancock
Jaffe Laboratories, Inc.
(Exact
name of registrant as specified in its charter)
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Delaware
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33-0936180
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(State
or other jurisdiction of
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(I.R.S.
Employer
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incorporation
or organization)
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Identification
Number)
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70
Doppler
Irvine,
California 92618
(949)
261 2900
(Address,
including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Robert
A. Berman
Chief
Executive Officer
Hancock
Jaffe Laboratories, Inc.
70
Doppler
Irvine,
California 92618
(949)
261-2900
(Name,
address, including zip code, and telephone number, including area code, of agent for service)
Please
send a copy of all communications to:
Barry
I. Grossman, Esq.
David
Selengut, Esq.
Matthew
Bernstein, Esq.
Ellenoff
Grossman & Schole LLP
1345
Avenue of the Americas
New
York, New York 10105
(212)
370-1300
Approximate
date of commencement proposed sale to the public: From time to time after the effective date of this Registration Statement.
If
the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please
check the following box. ☐
If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check
the following box. ☒
If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration statement number of the earlier effective registration statement
for the same offering. ☐
If
this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If
this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become
effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ☐
If
this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register
additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following
box. ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large
accelerated filer ☐
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Accelerated
filer ☐
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Non-accelerated
filer ☒
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Smaller
reporting company ☒
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Emerging
growth company ☒
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If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.
☒
CALCULATION
OF REGISTRATION FEE
Title of Each Class
of Securities
to be Registered
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Amount to be
Registered (1)
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Proposed
Maximum Aggregate
Offering Price
per Security
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Proposed
Maximum Aggregate
Offering Price
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Amount of
Registration Fee
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Shares of common stock issuable upon exercise of warrants (2)
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1,430,000
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$
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0.79
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$
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1,129,700.00
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$
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123.25
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Shares of common stock issuable upon conversion of Series C Convertible Preferred Stock (3)
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6,078,125
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$
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0.475
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$
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2,887,109.38
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$
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314.98
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Shares of common stock issuable upon exercise of warrants to purchase common stock (4)
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6,078,125
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$
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0.32
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$
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1,945,000.00
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$
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212.20
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Shares of common stock issuable upon exercise of warrants to purchase common stock (5)
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3,495,000
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$
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0.37
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$
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1,293,150.00
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$
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141.08
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Total
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17,081,250
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N/A
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$
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7,254,959.38
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$
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791.52
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1)
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Pursuant
to Rule 416 of the Securities Act of 1933, as amended (the “Securities Act”), the shares of common stock offered
hereby also include such presently indeterminate number of shares of the registrant’s common stock as a result of stock
splits, stock dividends or similar transactions.
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2)
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Represents
(i) 1,300,000 shares of common stock issuable upon exercise of the warrants issued by the registrant on February 25, 2020
in a private placement and (ii) 130,000 shares of common stock issuable upon exercise of the warrants issued by the
registrant to the placement agent as consideration for such offering. Proposed maximum offering price per share is based on
the exercise price of the warrants in accordance with Rule 457(g).
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3)
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Represents
6,078,125 shares of common stock issuable upon conversion of 4,205,406 shares of Series C Convertible Preferred Stock issued
by the registrant on July 21, 2020 in a private placement. Proposed maximum offering price per share has been estimated solely
for the purpose of calculating the registration fee pursuant to Rule 457(c) under the Securities Act based on the average
of the high and low sales price of the common stock on the Nasdaq Capital Market on September 15, 2020.
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4)
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Represents
6,078,125 shares of common stock issuable upon exercise of the warrants issued by the registrant on July 21, 2020 in a private
placement. Proposed maximum offering price per share is based on the exercise price of the warrants in accordance with Rule
457(g).
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5)
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Represents
3,495,000 shares of common stock issuable upon exercise of the warrants issued by the registrant on July 21, 2020 in consideration
for entering into a voting and lock-up agreement. Proposed maximum offering price per share is based on the exercise price
of the warrants in accordance with Rule 457(g).
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6)
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Registration fee
was previously paid.
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The
Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until
the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective
on such date as the Commission, acting pursuant to said Section 8(a), may determine.
The
information in this prospectus is not complete and may be changed. The selling stockholders may not sell the securities until
the Registration Statement filed with the Securities and Exchange Commission, of which this prospectus is a part, is effective.
This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where
the offer or sale is not permitted.
SUBJECT
TO COMPLETION, DATED OCTOBER 5, 2020
Prospectus
17,081,250
Shares of Common Stock
This
prospectus relates to the resale by selling stockholders of up to 17,081,250 shares of common stock of Hancock Jaffe Laboratories,
Inc. (“we,” “us,” “our,” the “Company,” or “Hancock”). The shares
offered for resale by this prospectus consist of (i) 1,300,000 shares of common stock issuable upon exercise of the warrants (the
“February Investor Warrants”) issued by the Company on February 25, 2020 in a private placement offering of shares
and warrants (the “February Private Placement”), (ii) 130,000 shares of common stock issuable upon exercise
of the warrants (the “February PA Warrants” and together with the February Investor Warrants, the “February
Warrants”) issued by the Company to the placement agent as consideration in the February Private Placement, (iii) 6,078,125
shares of common stock issuable upon conversion of 4,205,406 shares of Series C Convertible Preferred Stock (the “Series
C Preferred Stock”) issued by the Company on July 21, 2020 in a private placement offering of shares of Series C Preferred
Stock and warrants (the “July Private Placement”), (iv) 6,078,125 shares of common stock issuable upon exercise of
the warrants (the “July Warrants”) issued by the Company in the July Private Placement and (v) 3,495,000 shares of
common stock issuable upon exercise of the warrants (the “Waiver Warrants”) issued by the Company on July 21, 2020
in connection with the waiver by certain stockholders of the Company of certain rights pursuant to a voting and lock-up agreement.
We
will not receive any proceeds from the resale of any of the shares of common stock being registered hereby sold by the selling
stockholders. However, we may receive proceeds from the exercise of the February Warrants, July Warrants and Waiver Warrants held
by the selling stockholders exercised other than pursuant to any applicable cashless exercise provisions of such warrants.
Our
common stock is listed on The NASDAQ Capital Market under the symbol “HJLI.” On September 15, 2020, our common stock
closed at $0.43 per share.
The
selling stockholders may offer all or part of the shares for resale from time to time through public or private transactions,
at either prevailing market prices or at privately negotiated prices. Our registration of the shares of common stock covered by
this prospectus does not mean that the selling stockholders will offer or sell any of the shares. With regard only to the shares
the selling stockholders sell for their own behalf, the selling stockholders may be deemed an “underwriter” within
the meaning of the Securities Act of 1933, as amended (the “Securities Act”). The Company has paid all of the registration
expenses incurred in connection with the registration of the shares. We will not pay any of the selling commissions, brokerage
fees and related expenses.
We
are an “emerging growth company” as that term is defined in the Jumpstart Our Business Startups Act of 2012 and, as
such, have elected to take advantage of certain reduced public company reporting requirements for this prospectus and future filings.
Investing in our securities involves certain
risks. See “Risk Factors” beginning on page 8, including the risk factors in our most recent Annual Report
on Form 10-K filed on March 18, 2020, which is incorporated by reference herein, as well as in any other recently filed quarterly
or current reports. We urge you to carefully read this prospectus, together with the documents we incorporate by reference, describing
the terms of these securities before investing.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or
passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The
date of this Prospectus is ___________, 2020
TABLE
OF CONTENTS
You
should rely only on the information contained in this prospectus. Neither we nor the selling stockholders have authorized any
other person to provide you with information different from or in addition to that contained in this prospectus. If anyone provides
you with different or inconsistent information, you should not rely on it. The selling stockholders are not making an offer to
sell these securities in any jurisdiction where an offer or sale is not permitted. You should assume that the information appearing
in this prospectus is accurate only as of the date on the front cover of this prospectus. Our business, financial condition, results
of operations and prospects may have changed since that date.
We
further note that the representations, warranties and covenants made by us in any document that is filed as an exhibit to the
registration statement of which this prospectus is a part and in any document that is incorporated by reference herein were made
solely for the benefit of the parties to such agreement, including, in some cases, for the purpose of allocating risk among the
parties to such agreements, and should not be deemed to be a representation, warranty or covenant to you. Moreover, such representations,
warranties or covenants were accurate only as of the date when made. Accordingly, such representations, warranties and covenants
should not be relied on as accurately representing the current state of our affairs.
This
prospectus includes estimates, statistics and other industry data that we obtained from industry publications, research, surveys
and studies conducted by third parties and publicly available information. Such data involves a number of assumptions and limitations
and contains projections and estimates of the future performance of the industries in which we operate that are subject to a high
degree of uncertainty. This prospectus also includes data based on our own internal estimates. We caution you not to give undue
weight to such projections, assumptions and estimates.
We
use our registered trademarks and trade names, such as VenoValve® and CoreoGraft™, in this prospectus. This prospectus
also includes trademarks, trade names and service marks that are the property of other organizations, such as ProCol Vascular
Bioprosthesis®. Solely for convenience, trademarks and trade names referred to in this prospectus appear without the ®
and ™ symbols, but those references are not intended to indicate that we will not assert, to the fullest extent under applicable
law, our rights, or that the applicable owner will not assert its rights, to these trademarks and trade names. We do not intend
our use or display of other companies’ trade names or trademarks to imply a relationship with, or endorsement or sponsorship
of us by, any other companies.
Unless
the contest otherwise requires, the terms “Hancock,” the “Company,” “we,” “us,”
“our” and similar terms used in this prospectus refer to Hancock Jaffe Laboratories, Inc.
CAUTIONARY
NOTE REGARDING FORWARD LOOKING STATEMENTS
This
prospectus and the documents incorporated by reference herein may contain forward looking statements that involve risks and uncertainties.
All statements other than statements of historical fact contained in this prospectus and the documents incorporated by reference
herein, including statements regarding future events, our future financial performance, business strategy, and plans and objectives
of management for future operations, are forward-looking statements. We have attempted to identify forward-looking statements
by terminology including “anticipates,” “believes,” “can,” “continue,” “could,”
“estimates,” “expects,” “intends,” “may,” “plans,” “potential,”
“predicts,” “should,” or “will” or the negative of these terms or other comparable terminology.
These statements relate to future events or our future financial performance or condition and involve known and unknown risks,
uncertainties and other factors that could cause our actual results, levels of activity, performance or achievement to differ
materially from those expressed or implied by these forward-looking statements. Although we do not make forward looking statements
unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. These forward-looking statements
include, but are not limited to, statements about:
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Failure
to obtain approval from the FDA to commercially sell our product candidates
in a timely manner or at all;
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Whether
surgeons and patients in our target markets accept our product candidates, if approved;
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The
expected growth of our business and our operations, and the capital resources needed to progress our business plan;
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Failure
to scale up of the manufacturing process of our product candidates in a timely manner, or at all;
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Failure
to manufacture our product candidates at a competitive price;
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Our
ability to retain and recruit key personnel, including the development of a sales and marketing infrastructure;
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Reliance
on third party suppliers for certain components of our product candidates;
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Reliance
on third parties to commercialize and distribute our product candidates in the United States and internationally;
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Changes
in external competitive market factors;
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Uncertainties
in generating sustained revenue or achieving profitability;
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Unanticipated
working capital or other cash requirements;
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Changes
in FDA regulations, including testing procedures, of medical devices and related promotional and marketing activities;
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Our
estimates of our expenses, ongoing losses, future revenue, capital requirements and our needs for, or ability to obtain, additional
financing;
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Our
ability to obtain and maintain intellectual property protection for our product candidates;
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Our ability to consummate future acquisitions
or strategic transactions, including the transaction with Catheter Precision;
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Our
ability to regain compliance with the continued listing requirements of the Nasdaq Capital Market or otherwise maintain the
listing of our securities on the Nasdaq Capital Market; and
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Changes
in our business strategy or an inability to execute our strategy due to unanticipated changes in the medical device industry.
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These
statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks outlined
under “Risk Factors” or elsewhere in this prospectus and the documents incorporated by reference herein, which may
cause our or our industry’s actual results, levels of activity, performance or achievements expressed or implied by these
forward-looking statements. Moreover, we operate in a highly regulated, very competitive, and rapidly changing environment. New
risks emerge from time to time and it is not possible for us to predict all risk factors, nor can we address the impact of all
factors on our business or the extent to which any factor, or combination of factors, may cause our actual results to differ materially
from those contained in any forward-looking statements.
We
have based these forward-looking statements largely on our current expectations and projections about future events and financial
trends that we believe may affect our financial condition, results of operations, business strategy, short term and long term
business operations, and financial needs. These forward-looking statements are subject to certain risks and uncertainties that
could cause our actual results to differ materially from those reflected in the forward looking statements. Factors that could
cause or contribute to such differences include, but are not limited to, those discussed in this prospectus, and in particular,
the risks discussed below and under the heading “Risk Factors” and those discussed in other documents we file with
the SEC. The following discussion should be read in conjunction with the consolidated financial statements for the fiscal years
ended December 31, 2019 and 2018 and notes incorporated by reference herein. We undertake no obligation to revise or publicly
release the results of any revision to these forward-looking statements, except as required by law. In light of these risks, uncertainties
and assumptions, the forward-looking events and circumstances discussed in this prospectus may not occur and actual results could
differ materially and adversely from those anticipated or implied in the forward-looking statement.
You
should not place undue reliance on any forward-looking statement, each of which applies only as of the date of this prospectus.
Except as required by law, we undertake no obligation to update or revise publicly any of the forward-looking statements after
the date of this prospectus to conform our statements to actual results or changed expectations. Any forward-looking statement
you read in this prospectus, any prospectus supplement or any document incorporated by reference reflects our current views with
respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, operating
results, growth strategy and liquidity. You should not place undue reliance on these forward-looking statements because such statements
speak only as to the date when made. We assume no obligation to publicly update or revise these forward-looking statements for
any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements,
even if new information becomes available in the future, except as otherwise required by applicable law. You are advised, however,
to consult any further disclosures we make on related subjects in our reports on Forms 10-Q, 8-K and 10-K filed with the SEC.
You should understand that it is not possible to predict or identify all risk factors. Consequently, you should not consider any
such list to be a complete set of all potential risks or uncertainties.
PROSPECTUS
SUMMARY
This
summary highlights selected information contained elsewhere in this prospectus. To understand this offering fully, you should
read the entire prospectus carefully, including the “Risk Factors” section, the financial statements and the notes
to the financial statements. Unless the context requires otherwise, references in this prospectus to “HJLI,” “we,”
“us,” “our,” “our company,” or similar terminology refer to Hancock Jaffe Laboratories, Inc.
Overview
Hancock
Jaffe Laboratories, Inc. is a medical device company developing tissue based solutions that are designed to be life sustaining
or life enhancing for patients with cardiovascular disease, and peripheral arterial and venous disease. The Company’s products
are being developed to address large unmet medical needs by either offering treatments where none currently exist or by substantially
increasing the current standards of care. Our two lead products are: the VenoValve®, a porcine based device to be surgically
implanted in the deep venous system of the leg to treat a debilitating condition called chronic venous insufficiency (“CVI”);
and the CoreoGraft®, a bovine based conduit to be used to revascularize the heart during coronary artery bypass graft (“CABG”)
surgeries. Both of our current products are being developed for approval by the U.S. Food and Drug Administration (“FDA”).
We currently receive tissue for our products from one domestic supplier and one international supplier. Our current business model
is to license, sell, or enter into strategic alliances with large medical device companies with respect to our products, either
prior to or after FDA approval. Our current senior management team has been affiliated with more than 50 products that
have received FDA approval or CE marking. We currently lease a 14,507 sq. ft. manufacturing facility in Irvine, California, where
we manufacture products for our clinical trials and which has previously been FDA certified for commercial manufacturing of product.
Each
of our products will be required to successfully complete significant clinical trials to demonstrate the safety
and efficacy of the product before it will be able to be approved by the FDA.
VenoValve
Background
Chronic
venous disease (“CVD”) is the world’s most prevalent chronic disease. CVD is generally classified using a standardized
system known as CEAP (clinical, etiological, anatomical, and pathophysiological). The CEAP system consists of seven clinical classifications
(C0 to C6) with C5 to C6 being the most severe cases of CVD.
Chronic
Venous Insufficiency (“CVI”) is a subset of CVD and is generally used to describe patients with C4 to C6 CVD. CVI
is a condition that affects the venous system of the leg causing pain, swelling, edema, skin changes, and ulcerations. In order
for blood to return to the heart from the foot, ankle, and lower leg, the calf muscle pushes the blood up the veins of the leg
and through a series of one-way valves. Each valve is supposed to open as blood passes through, and then close as blood moves
up the leg to the next valve. CVI occurs when the one-way valves in the veins of the leg fail and become incompetent. When the
valves fail, blood flows backwards and in the wrong direction (reflux). As blood pools in the lower leg, pressure inside the veins
increases (venous hypertension). Reflux, and the resulting venous hypertension, cause the leg to swell, resulting in debilitating
pain, and in the most severe cases, venous ulcers. The VenoValve is being developed to treat CVI in the deep venous system with
a focus on severe patients with C5 to C6 CVI.
Estimates
indicate that approximately 2.4 million people in the U.S. have C5 to C6 CVI in the deep venous system, including patients that
develop venous leg ulcers (C6 patients). Over one million new severe cases of CVI occur each year in the U.S., mostly from patients
who have experienced a deep vein thrombosis (blood clot). The average patient seeking treatment of a venous ulcer spends as much
as $30,000 a year on wound care, and the total direct medical costs from venous ulcer sufferers in the U.S. has been estimated
to exceed $38 billion a year. Aside from the direct medical costs, severe CVI sufferers experience a significantly reduced quality
of life. Daily activities such as preparing meals, housework, and personal hygiene (washing and bathing) become difficult due
to reduced mobility. For many severe CVI sufferers, intense pain, which frequently occurs at night, prevents patients from getting
adequate sleep. Severe CVI sufferers are known to miss approximately 40% more work days than the average worker. A high percentage
of venous ulcer patients also experience severe itching, leg swelling, and an odorous discharge. Wound dressing changes, which
occur several times a week, can be extremely painful. Venous ulcers from deep venous CVI are very difficult to heal, and a significant
percentage of venous ulcers remain unhealed for more than a year. Even if healed, recurrence rates for venous ulcers are known
to be high (20% to 40%) within the first year.
The
Opportunity
The VenoValve is a porcine
based valve developed at HJLI to be implanted in the deep venous system of the leg to treat severe CVI. By reducing reflux,
and lowering venous hypertension, the VenoValve has the potential to reduce or eliminate the symptoms of deep venous, severe CVI,
including venous leg ulcers. The current version of the VenoValve is designed to be surgically implanted into the patient
via a 5 to 6 inch incision in the upper thigh.
There
are presently no FDA approved medical devices to address valvular incompetence, or effective treatments for deep venous CVI. Current
treatment options include compression garments, or constant leg elevation. These treatments are generally ineffective, as they
attempt to alleviate the symptoms of CVI without addressing the underlying causes of the disease. In addition, we believe that
compliance with compression garments and leg elevation is extremely low, especially among the elderly. Valve transplants from
other parts of the body have been attempted, but with very-poor results. Many attempts to create substitute valves have also failed,
usually resulting in early thromboses. The premise behind the VenoValve is that by reducing the underlying causes of CVI, reflux
and venous hypertension, the debilitating symptoms of CVI will decrease, resulting in improvement in the quality of the lives
of CVI sufferers.
There
are approximately 2.4 million people in the U.S. that suffer from deep venous CVI due to valvular incompetence.
VenoValve
Clinical Status
After
consultation with the FDA, as a precursor to the U.S. pivotal trial, we are conducting a small first-in-man study for the VenoValve
in Colombia. The first phase of the first-in-man Colombian trial included 11 patients. In addition to providing safety and efficacy
data, the purpose of the first-in-man study is to provide proof of concept, and to provide valuable feedback to make any necessary
product modifications or adjustments to our surgical implantation procedures for the VenoValve prior to conducting the U.S. pivotal
trial. In December of 2018, we received regulatory approval from Instituto Nacional de Vigilancia de Medicamentos y Alimentos
(“INVIMA”), the Colombian equivalent of the FDA. On February 19, 2019, we announced that the first VenoValve was successfully
implanted in a patient in Colombia. Between April of 2019 and December of 2019, we successfully implanted VenoValves in
10 additional patients, completing the implantations for the first phase of the Colombian first-in-man study. Overall,
VenoValves have been implanted in 11 patients. Endpoints for the VenoValve first-in-man study include reflux, measured by doppler,
a VCSS score used by the clinician to measure disease severity, and a VAS score used by the patient to measure pain.
Eight
of 11 patients have now completed the one-year first-in-man
trial. For those eight patients, reflux has improved an average of 46%, Venous Clinical Severity Scores (“VCSSs”)
have improved an average of 55%, and VAS scores, which are used by patients to measure pain, have improved an average of 67%,
all when compared to pre-surgery levels. VCSS scores are commonly used to objectively assess outcomes in the treatment of
venous disease, and include ten characteristics including pain, inflammation, skin changes such as pigmentation and induration,
the number of active ulcers, and ulcer duration. The improvements in VCSS scores is significant and indicates that VenoValve patients
who had severe CVI pre-surgery, now have mild CVI or the complete absence of disease at one-year post surgery.
VenoValve safety incidences have been minor and include one (1) fluid pocket (which was aspirated), intolerance from Coumadin
anticoagulation therapy, three (3) minor wound infections (treated with antibiotics), and one occlusion due to patient
non-compliance with anti-coagulation therapy.
Next
steps for the VenoValve include the continued monitoring of the three remaining VenoValve patients, a Pre-IDE meeting with
the FDA, the completion of a series of functional tests mandated by the FDA which are necessary for the filing of an IDE
application, and the filing of an IDE application for the U.S. pivotal trial which we expect to file in Q1 of 2021.
CoreoGraft
Background
Heart
disease is the leading cause of death among men and women in the U.S. accounting for about 1 in every 4 deaths. Coronary heart
disease is the most common type of heart disease, killing over 370,000 people each year. Coronary heart disease occurs when arteries
around the heart become blocked or occluded, in most cases by plaque. Although balloon angioplasty with or without cardiac stents
have become the norm if one or two arteries are blocked, coronary artery bypass surgery remains the treatment of choice for patients
with multiple blocked arteries on both sides of the heart. Approximately 200,000 coronary artery bypass graft (“CABG”)
surgeries take place each year in the U.S. and are the most commonly performed cardiac procedure. CABG surgeries alone
account for 55% of all cardiac surgeries, and CABG surgeries when combined with valve replacement surgeries account for approximately
62% of all cardiac surgeries. The next largest category accounts for 10% of cardiac surgeries. The number of CABG surgeries are
expected to increase as the population continues to age. On average, three grafts are used for each CABG surgery.
Although
CABG surgeries are invasive, improved surgical techniques over the years have lowered the fatality rate from CABG surgeries to
between 1% and 3% prior to discharge from the hospital. Arteries around heart are accessed via an incision along the sternum known
as a sternotomy. Once the incision is made, the sternum (chest) is divided (“cracked”) to access the heart and its
surrounding arteries.
CABG
surgery is relatively safe and effective. In most instances, doctors prefer to use the left internal mammary artery (“LIMA”),
an artery running inside the ribcage and close to the sternum, to re-vascularize the left side of the heart. Use of the LIMA to
revascularize the left descending coronary artery (known as the “widow maker”) has become the gold standard for revascularizing
the left side of the heart during CABG surgeries. For the right side of the heart, and where additional grafts are needed on the
left side, the current standard of care is to harvest the saphenous vein from the patient’s leg to be dissected into pieces
and used as bypass grafts around the heart. Unfortunately, saphenous vein grafts (“SVGs”) are not nearly as effective
as the LIMA for revascularizing the heart. In fact, SVGs continue to be the weak link for CABG surgeries.
The
saphenous vein harvest procedure is itself invasive. Either a long incision is made along the inner leg of the patient to harvest
the vein, or the saphenous vein is extracted endoscopically. Regardless of the type of harvest procedure, bypass graft
harvest remains an invasive and complication prone aspect of the CABG procedure. Present standard-of-care complications are described
in recent published reports in major medical journals. The percentage of complications from the harvest procedure can be as high
as 24%. This is mainly due to non-healing of the saphenous wound or development of infection in the area of the saphenous vein
harvest site.
While
the LIMA is known for excellent short term and long term patency rates, studies indicate that between 10% and 40% percent of SVGs
that are used as conduits for CABG surgeries fail within the first year after the CABG surgery. A significant percentage fail
within the first 30 days. At 10 years, the SVGs failure rate can be as high as 75%. When a graft fails, it becomes blocked or
occluded, depriving the heart of blood flow. Mortality during the first year after bypass graft failure is very high, between
5% and 9%. For purposes of comparison, a 3% threshold is considered to be a high cardiac risk. In fact, a relatively recent study
in Denmark has reported that mortality rates at 8 to 10 years after CABG surgery are as high as 60% to 80%. While a life expectancy
of 8 to 10 years following CABG surgery may have been acceptable in the past, expectations have changed and with people now generally
living longer, additional focus is now being placed on extending life expectancies following CABG surgeries.
Researchers
have determined that there are two main causes of SVGs failure: size mismatch, and a thickening of the interior of the SVGs that
begins immediately following the harvest procedure. Size mismatch occurs because the diameter of SVGs is often significantly larger
than the diameter of the coronary arteries around the heart. This size mismatch causes flow disturbances, leading to graft thromboses
and graft failure. The thickening of the cell walls of SVGs occur when a layer of endothelial cells on the inner surface of the
SVGs are disturbed beginning at the harvesting procedure, starting a chain reaction which causes the cells to thicken and the
inside of the graft to narrow, resulting in blood clots and graft failure.
The
Opportunity
The
CoreoGraft is a bovine based off the shelf conduit that could potentially be used to revascularize the heart, instead of
harvesting the saphenous vein from the patient’s leg. In addition to avoiding the invasive and painful SVG harvest
process, HJLI’s CoreoGraft closely matches the size of the coronary arteries, eliminating graft failures that occur due
to size mismatch. In addition, with no graft harvest needed, the CoreoGraft could also reduce or eliminate the inner
thickening that burdens and leads to failure of the SVGs.
In
addition to providing a potential alternative to SVGs, the CoreoGraft
could be used when making grafts from the patients’ own arteries and veins is not an option. For example, patients with significant
arterial and vascular disease often do not have suitable vessels to be used as grafts. For other patients, such as women who have
undergone radiation treatment for breast cancer and have a higher incidence of heart disease, using the LIMA may not be an option
if it was damaged by the radiation. Another example are patients undergoing a second CABG surgery. Due in large part to early SVG
failures, patients may need a second CABG surgery. If the SVG was used for the first CABG surgery, the patient may have insufficient
veins to harvest. While the CoreoGraft may start out as a product for patients with no other options, if the CoreoGraft establishes
good short term and long term patency rates, it could become the graft of choice for all CABG patients in addition to the LIMA.
Clinical
Status
In
January of 2020, we announced the results of a six month, nine sheep, animal feasibility study for the CoreoGraft. Bypasses were
accomplished by attaching the CoreoGrafts from the ascending aorta to the left anterior descending artery, and surgeries were
preformed both on-pump and off-pump. Partners for the feasibility study included the Texas Heart Institute, and American Preclinical
Services.
Test
subjects were evaluated via angiograms and flow monitors during the study, and a full pathology examination of the CoreoGrafts
and the surrounding tissue was performed post necropsy.
The
results from the feasibility study demonstrated that the CoreoGrafts remained patent (open) and fully functional at 30, 90, and
180 day intervals after implantation. In addition, pathology examinations of the grafts and surrounding tissue at the conclusion
of the study showed no signs of thrombosis, infection, aneurysmal degeneration, changes in the lumen, or other problems that are
known to plague and lead to failure of SVGs.
In
addition to exceptional patency, pathology examinations indicated full endothelialization for grafts implanted for 180 days both
throughout the CoreoGrafts and into the left anterior descending arteries. Endothelium is a layer of cells that naturally exist
throughout healthy veins and arteries and that that act as a barrier between blood and the surrounding tissue, which
helps promote the smooth passage of blood. Endothelium are known to produce a variety anti-clotting and other positive characteristics
that are essential to healthy veins and arteries. The presence of full endothelialization within the longer term CoreoGrafts indicates
that the graft is being accepted and assimilated in a manner similar to natural healthy veins and arteries that exist throughout
the vascular system and is an indication of long-term biocompatibility.
In
May of 2020, we announced that we had received approval from the Superintendent of Health of the National Health Counsel for the
Republic of Paraguay to conduct a first-in-human trial for the CoreoGraft. Up to 5 patients that need coronary artery bypass graft
surgery will receive CoreoGraft implants as part of the first-in-human study. In July of 2020, we announced that we had received
permission to proceed with the first-in-human study, which had been put on hold due to the COVID-19 pandemic, and in August of
2020 we announced that the first two patients had been enrolled for the first-in-human CoreoGraft trial. We are currently
making arrangements to export CoreoGrafts to Paraguay to be used for the first-in-human trial.
Our
Competitive Strengths
We
believe we will offer the cardiovascular device market a compelling value proposition with the launch of our two products,
if approved, for the following reasons:
|
|
●
|
We
have extensive experience of proprietary processing and manufacturing methodology specifically applicable to the design, processing,
manufacturing and sterilization of our biologic tissue devices.
|
|
|
●
|
We
operate a 14,507 square foot manufacturing facility in Irvine, California. Our facility is designed expressly for the manufacture
of Class III tissue based implantable medical devices and is equipped for research and development, prototype fabrication,
current good manufacturing practices, or cGMP, and manufacturing and shipping for Class III medical devices, including biologic
cardiovascular devices.
|
|
|
●
|
We
have attracted senior executives who are experienced in research and development and who have worked on over 50 medical
devices that have received FDA approval or CE marking. We also have the advantage of an experienced board of directors and
scientific advisory board who will provide guidance as we move towards market launch.
|
Recent
Developments
On
May 22, 2020, we executed a non-binding letter of intent to merge the Company with Catheter Precision, Inc., (“Catheter
Precision”) a private medical device company focused on cardiovascular diseases, including heart arrythmias. Catheter Precision
has developed a software imaging system called VIVO™, which has been cleared by the FDA, and CE marked, and
that produces a 3-D virtual image of the heart on a computer monitor for the purpose of accurately identifying and targeting
the anatomical location of ventricular arrhythmias for catheter ablation therapy. We are currently completing our due diligence
review of Catheter Precision and are continuing negotiating the terms of a definitive merger agreement, including
the amount of merger consideration (though it has been agreed that the consideration payable by us will not include a cash component).
Accordingly, we cannot provide any assurance that we will effect a merger transaction with Catheter Precision or, if we are able
to consummate such a transaction, that the terms of any such merger transaction will be favorable to and approved by our
stockholders. See “Risk Factors” beginning on page 8 of this prospectus, including the risk factors incorporated by
reference herein, for further discussion surrounding the non-binding letter of intent and the transactions contemplated thereby.
David Jenkins, a principal of Catheter Precision, invested in the July Private Placement through Fat Boy Capital, LP and is listed
as a selling stockholder herein.
Selling
Stockholders
The
shares offered for resale by this prospectus consist of (i) 1,300,000 shares of common stock issuable upon exercise of the February
Investor Warrants issued by the Company on February 25, 2020 in the February Private Placement, (ii) 130,000 shares of
common stock issuable upon exercise of the February PA Warrants issued by the Company to the placement agent as consideration
in the February Private Placement, (iii) 6,078,125 shares of common stock issuable upon conversion of 4,205,406 shares of Series
C Preferred Stock issued by the Company on July 21, 2020 in the July Private Placement, (iv) 6,078,125 shares of common stock
issuable upon exercise of the July Warrants issued by the Company in the July Private Placement and (v) 3,495,000 shares of common
stock issuable upon exercise of the Waiver Warrants issued by the Company on July 21, 2020 in connection with the waiver by certain
stockholders of the Company of certain rights pursuant to a voting and lock-up agreement.
Principal
Offices
Our
principal executive offices are located at 70 Doppler, Irvine, California 92618 and the telephone number is (949) 261-2900. Information
about us is available on our website http:// www.hancockjaffe.com. The information contained on our website or that can be accessed
through our website does not constitute part of this prospectus and is not incorporated in any manner into this prospectus.
THE
OFFERING
|
Common
stock offered by the selling stockholders herein:
|
|
17,081,250 shares
|
|
|
|
|
|
Common
stock outstanding: (1)
|
|
40,098,234
shares
|
|
|
|
|
|
Common
stock outstanding after the offering:
|
|
57,179,484
shares (assuming the
exercise of all of the February Warrants, July Warrants and Waiver Warrants and conversion
of all of the shares of Series C Preferred Stock)
|
|
|
|
|
|
Use
of Proceeds:
|
|
We
will not receive any proceeds from the sale of the common stock by the selling stockholders. We may receive proceeds upon
the exercise of the February Warrants, July Warrants and Waiver Warrants (to the extent the registration statement of which
this prospectus is a part is then effective and, if applicable, the “cashless exercise” provision is not utilized
by the holder). Any proceeds will be used for general corporate and working capital or for other purposes that the Board of
Directors, in their good faith, deems to be in the best interest of the Company. No assurances can be given that any of such
warrants will be exercised. See “Use of Proceeds.”
|
|
|
|
|
|
Listing
of securities:
|
|
Our
common stock is listed on the Nasdaq Capital Market under the symbol “HJLI.” A class of our warrants is listed
on the Nasdaq Capital Market under the symbol “HJLIW.”
|
|
|
|
|
|
Risk
Factors:
|
|
An
investment in our company is highly speculative and involves a significant degree of risk. See “Risk Factors”
and other information included in this prospectus for a discussion of factors you should carefully consider before deciding
to invest in shares of our common stock.
|
|
|
(1)
|
The
number of shares of common stock to be outstanding after this offering as reflected above is based on the actual total number
of shares outstanding as of September 14, 2020 and does not include, as of that date:
|
|
|
●
|
5,392,207
shares of our common stock issuable upon the exercise of
outstanding options with a weighted average exercise price of $1.28 per share;
|
|
|
|
|
|
|
●
|
23,163,443
shares of our common stock issuable upon the exercise of outstanding warrants with a weighted average exercise price of
$1.23 (including the February Warrants, July Warrants and Waiver Warrants); and
|
|
|
|
|
|
|
●
|
6,078,125
shares of common stock issuable upon conversion of 4,205,406 shares of Series C Preferred Stock issued by the Company on July
21, 2020 in the July Private Placement.
|
RISK
FACTORS
Investment
in our securities involves a high degree of risk. You should carefully consider the risks described below, as well as those risks
described in the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial
Condition and Results of Operations,” each contained in our most recent Annual Report on Form 10-K for the year ended December
31, 2019 and our Quarterly Reports for the periods ended March 31, 2020 and June 30, 2020, which have been filed with the SEC
and are incorporated herein by reference in its entirety, as well as all other information in this prospectus or in any other
documents incorporated by reference. Each of the risks described in these sections and documents could adversely affect our business,
financial condition, results of operations and prospects, and could result in a complete loss of your investment. This prospectus
and the incorporated documents also contain forward-looking statements that involve risks and uncertainties. Our actual results
could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the
risks mentioned above.
Certain
Risks Related to our Securities
We
have issued a significant number of options, warrants and shares of convertible preferred stock and may continue to do so in the
future. The vesting and, if applicable, exercise of these securities and the sale of the shares of common stock issuable thereunder
may dilute your percentage ownership interest and may also result in downward pressure on the price of our common stock.
As of September 14,
2020, we have issued and outstanding options to purchase 5,392,207 shares of our common stock with a weighted average exercise
price of $1.28, 250,000 restricted stock awards subject to vesting, 195,160 restricted stock units subject to vesting, warrants
to purchase 23,164,443 shares of our common stock with a weighted average exercise price of $1.23 and 4,205,406 shares of Series
C Preferred Stock convertible into 6,078,125 shares of common stock. Further, while we do not currently have any shares available
for issuance under our Amended and Restated 2016 Omnibus Incentive Plan, the number of shares available under the plan will
be increased April 26th (and each April 26th thereafter) by an amount equal to 3% of the total issued
and outstanding shares of our common stock as of such anniversary (or such lesser number of shares as may be approved by our
Board of Directors). Because the market for our common stock is thinly traded, the sales and/or the perception that those
sales may occur, could adversely affect the market price of our common stock. Furthermore, the mere existence of a significant
number of shares of common stock issuable upon vesting and, if applicable, exercise of these securities may be perceived by the
market as having a potential dilutive effect, which could lead to a decrease in the price of our common stock.
Future
sales or issuances of substantial amounts of our Common Stock, including, potentially, as a result of the merger transaction with
Catheter Precision, could result in significant dilution.
As
disclosed elsewhere in this prospectus supplement, we are contemplating a potential merger transaction with Catheter Precision.
In the event that the proposed merger transaction with Catheter Precision is completed, we would expect to issue a significant
number of shares of our Common Stock to the stockholders of Catheter Precision. Additionally, we may elect to raise additional
capital due to market conditions or strategic considerations as a result of the merger. If additional shares are issued in connection
with the proposed merger transaction or additional capital is raised through the sale of equity or convertible debt securities,
the issuance of those securities could result in further dilution to investors purchasing our Common Stock in this offering.
Our
failure to meet the continued listing requirements of Nasdaq could result in a de-listing of our Common Stock.
We
are not currently in compliance with the continued listing requirements of Nasdaq. Specifically, on October 14, 2019, we received
notice from Nasdaq indicating that, because the closing bid price for the Company’s Common Stock had fallen below $1.00
per share for 30 consecutive business days, the Company no longer complied with the minimum bid price requirement for continued
listing on the Nasdaq Capital Market under Rule 5550(a)(2) of Nasdaq Listing Rules. We have received an extension from Nasdaq
until December 28, 2020 to regain compliance with the minimum bid price requirement and have received approval from our stockholders
to effect a reverse stock split at a ratio of between one-for-five and one-for-twenty five, but there is no guarantee that we
will be able to regain compliance with the minimum bid price requirement. Further, even if we do regain compliance, there is no
guarantee that we will be able to continue to meet the continued listing requirements of Nasdaq. In the event we are unable to
do so, our securities may be delisted from The Nasdaq Stock Market. Such a delisting would likely have a negative effect on the
price of our Common Stock and would impair your ability to sell or purchase our Common Stock when you wish to do so. In the event
of a delisting, we would expect to take actions to restore our compliance with Nasdaq Marketplace Rules, but our Common Stock
may not be listed again, stabilize the market price or improve the liquidity of our Common Stock, prevent our Common Stock from
dropping below the Nasdaq minimum bid price requirement or prevent future non-compliance with the Nasdaq Marketplace Rules
Risks
Related to COVID-19
The
COVID-19 pandemic has significantly negatively impacted our business.
The
COVID-19 pandemic has disrupted the global economy and has negatively impacted large populations including people and businesses
that may be directly or indirectly involved with the operation of our Company and the manufacturing, development, and testing
of our product candidates. The full scope and economic impact of COVID-19 is still unknown and there are many risks from COVID-19
that could generally and negatively impact economies and healthcare providers in the countries where we do business, the medical
device industry as a whole, and development stage, pre-revenue companies such as HJLI. At this time, we have identified the following
COVID-19 related risks that we believe have a greater likelihood of negatively impacting our company specific, including, but
not limited to:
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Federal,
State and local shelter-in-place directives which limit our employees from accessing our facility to manufacture, develop
and test our product candidates.
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●
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Travel
restrictions and quarantine requirements which prevent us from initiating and continuing animal studies and patient trial
both inside and outside of the United States.
|
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●
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The
burden on hospitals and medical personnel resulting in the cancellation of non-essential medical procedures such as surgical
procedures needed to implant our product candidates for pre-clinical and clinical trials.
|
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●
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Delays
in the procurement of certain supplies and equipment that are needed to develop and test our product candidates.
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●
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Erosion
of the capital markets which make it more difficult to obtain the financing that we need to fund and continue our operations.
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●
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Potential
back-log at regulatory agencies such as the FDA which may result in delays in obtaining regulatory approvals.
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●
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Travel
restrictions which prevent patients from participating and continuing the participation in clinical trials.
|
Certain
Risks Related to our Business and Strategy
While
we have entered into a non-binding letter of intent with Catheter Precision and have entered into exclusive negotiations for a
merger therewith, we cannot assure you that the transactions contemplated by our non-binding letter of intent will be consummated
or, that if such transactions are consummated, they will be accretive to stockholder value.
On
June 1, 2020, we entered into a non-binding letter of intent with Catheter Precision pursuant to which we agreed to explore a
merger transaction with Catheter Precision. However, the non-binding letter of intent did not include material terms to any potential
transaction with Catheter Precision and there is no guarantee that we will agree to terms or definitive documentation with Catheter
Precision in order to effect the proposed merger transaction. Further, even if we are able to agree to terms with Catheter Precision
for a merger transaction, there is no guarantee that the terms will be favorable to and approved by our stockholders, that the
transaction will be completed in the time frame or in the manner currently anticipated, or that we will recognize the anticipated
benefits of the transaction.
We
may engage in future acquisitions or strategic transactions, including the transaction with Catheter Precision, which may require
us to seek additional financing or financial commitments, increase our expenses and/or present significant distractions to our
management.
As
described herein, we have recently entered into a non-binding letter of intent to merge the Company with Catheter Precision which
enables us to conduct due diligence and negotiate the terms of a definitive merger agreement. In the event we engage in an acquisition
or strategic transaction, we may need to acquire additional financing (particularly, if the acquired entity is not cash flow positive
or does not have significant cash on hand). Obtaining financing through the issuance or sale of additional equity and/or debt
securities, if possible, may not be at favorable terms and may result in additional dilution to our current stockholders. Additionally,
any such transaction may require us to incur non-recurring or other charges, may increase our near and long-term expenditures
and may pose significant integration challenges or disrupt our management or business, which could adversely affect our operations
and financial results. For example, an acquisition or strategic transaction may entail numerous operational and financial risks,
including the risks outlined above and additionally:
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exposure
to unknown liabilities;
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●
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disruption
of our business and diversion of our management’s time and attention in order to develop acquired products or technologies;
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●
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higher
than expected acquisition and integration costs;
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●
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write-downs
of assets or goodwill or impairment charges;
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●
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increased
amortization expenses;
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●
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difficulty
and cost in combining the operations and personnel of any acquired businesses with our operations and personnel;
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●
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impairment
of relationships with key suppliers or customers of any acquired businesses due to changes in management and ownership; and
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●
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inability
to retain key employees of any acquired businesses
|
Accordingly,
although there can be no assurance that we will undertake or successfully complete any transactions of the nature described above,
and any transactions that we do complete could have a material adverse effect on our business, results of operations, financial
condition and prospects.
USE
OF PROCEEDS
We
will not receive any proceeds from the sale of the common stock by the selling stockholders. We may receive proceeds upon the
exercise of the February Warrants, July Warrants and Waiver Warrants (to the extent the registration statement of which this prospectus
is a part is then effective and, if applicable, the “cashless exercise” provision is not utilized by the holder).
Any proceeds will be used for general corporate and working capital or for other purposes that the Board of Directors, in their
good faith, deems to be in the best interest of the Company. No assurances can be given that any of such warrants will be exercised.
DETERMINATION
OF OFFERING PRICE
The
selling stockholders will offer common stock at the prevailing market prices or a privately negotiated price as it may determine
from time to time.
The
offering price of our common stock to be sold by the selling stockholders does not necessarily bear any relationship to our book
value, assets, past operating results, financial condition or any other established criteria of value. The facts considered in
determining the offering price were our financial condition and prospects, our limited operating history and the general condition
of the securities market.
In
addition, there is no assurance that our common stock will trade at market prices in excess of the offering price as prices for
common stock in any public market will be determined in the marketplace and may be influenced by many factors, including the depth
and liquidity.
SELLING
STOCKHOLDERS
The
following table sets forth certain information as of September 15, 2020 regarding the selling stockholders and the shares of common
stock currently owned by them and offered by them in this prospectus. Except as indicated in the footnotes to the following table,
the selling stockholders named in the table have sole voting and investment power with respect to the shares set forth opposite
their name. The percentage of ownership of the selling stockholders in the following table is based upon 40,098,234 shares of
common stock outstanding as of September 15, 2020.
Other
than as described in the footnotes below, none of the selling stockholders or their affiliates has held a position as an officer
or director of the Company, nor do the selling stockholders or any of their affiliates have any material relationship of any kind
with us or any of our affiliates. All information with respect to share ownership has been furnished by the selling stockholders.
The common stock being offered is being registered to permit secondary trading of the shares and the selling stockholders may
offer all or part of the common stock owned for resale from time to time. Other than as described in the footnotes below, the
selling stockholders do not have any family relationships with our officers, directors or controlling stockholders. Furthermore,
none of the selling stockholders is a registered broker-dealer or an affiliate of a registered broker-dealer.
The
term “selling stockholder” also includes any transferees, pledges, donees, or other successors in interest to the
selling stockholders named in the table below. To our knowledge, subject to applicable community property laws, each person named
in the table has sole voting and investment power with respect to the common stock set forth opposite such person’s name.
We will file a supplement to this prospectus (or a post-effective amendment hereto, if necessary) to name successors to any named
selling stockholder who is able to use this prospectus to resell the securities registered hereby.
|
Name
of Selling Stockholder
|
|
Number
of Shares of Common Stock Owned
Prior
to Offering (1)
|
|
|
Maximum
Number of Shares of Common Stock to be Sold Pursuant
to
this Prospectus
|
|
|
Number
of Shares of Common Stock Owned
After
Offering Assuming All
Shares
are Sold (2)
|
|
|
Percentage
of Common Stock Owned
After
Offering Assuming All
Shares
are Sold (2)
|
|
|
The
Mark Hefley Living Trust (3)(4)
|
|
|
1,000,000
|
|
|
|
500,000
|
|
|
|
500,000
|
|
|
|
1.2
|
%
|
|
Ken
Baker (3)
|
|
|
100,000
|
|
|
|
50,000
|
|
|
|
50,000
|
|
|
|
*
|
|
|
Emil
J. Fanelli Jr. (3)
|
|
|
200,000
|
|
|
|
100,000
|
|
|
|
100,000
|
|
|
|
*
|
|
|
Matthew
D. Lowery (3)
|
|
|
100,000
|
|
|
|
50,000
|
|
|
|
50,000
|
|
|
|
*
|
|
|
Shores
Oil Company (3)(5)
|
|
|
400,000
|
|
|
|
200,000
|
|
|
|
200,000
|
|
|
|
*
|
|
|
James
S. Kiening (3)
|
|
|
100,000
|
|
|
|
50,000
|
|
|
|
50,000
|
|
|
|
*
|
|
|
Philip
Whitfield Faucette II (3)
|
|
|
100,000
|
|
|
|
50,000
|
|
|
|
50,000
|
|
|
|
*
|
|
|
Grzegorz
Wieczerzak (3)
|
|
|
200,000
|
|
|
|
100,000
|
|
|
|
100,000
|
|
|
|
*
|
|
|
David
S. Nagelberg 2003 Revocable Trust (3)
|
|
|
400,000
|
|
|
|
200,000
|
|
|
|
200,000
|
|
|
|
*
|
|
|
Arthur
Coffey (6)
|
|
|
110,500
|
|
|
|
110,500
|
|
|
|
0
|
|
|
|
*
|
|
|
Ariel
Imas (6)
|
|
|
9,750
|
|
|
|
9,750
|
|
|
|
0
|
|
|
|
*
|
|
|
Braden
Ferrari (6)
|
|
|
9,750
|
|
|
|
9,750
|
|
|
|
0
|
|
|
|
*
|
|
|
Fat
Boy Capital, LP (7)(8)
|
|
|
7,812,500
|
|
|
|
7,812,500
|
|
|
|
0
|
|
|
|
*
|
|
|
The
Special Equities Opportunity Fund, LLC (7)(9)
|
|
|
2,000,000
|
|
|
|
2,000,000
|
|
|
|
0
|
|
|
|
*
|
|
|
Iroquois
Master Fund Ltd. (7)(10)
|
|
|
781,250
|
|
|
|
781,250
|
|
|
|
0
|
|
|
|
*
|
|
|
Iroquois
Capital Investment Group LLC (7)(11)
|
|
|
1,562,500
|
|
|
|
1,562,500
|
|
|
|
0
|
|
|
|
*
|
|
|
Anson
Investments Master Fund LP (12)(13)
|
|
|
1,500,000
|
|
|
|
1,500,000
|
|
|
|
0
|
|
|
|
*
|
|
|
Warberg
WF VII LP (12)(14)
|
|
|
292,500
|
|
|
|
292,500
|
|
|
|
0
|
|
|
|
*
|
|
|
Warberg
WF VIII LP (12)(15)
|
|
|
202,500
|
|
|
|
202,500
|
|
|
|
0
|
|
|
|
*
|
|
|
Intracoastal
Capital, LLC (12)(16)
|
|
|
1,500,000
|
|
|
|
1,500,000
|
|
|
|
0
|
|
|
|
*
|
|
* Less than 1%
|
|
1.
|
For each selling stockholder, includes shares of common stock
known by us to be held by such selling stockholder as of the date of the prospectus plus any shares of common stock that are
issuable upon exercise of warrants or conversion of preferred stock that are being registered hereunder. This column does
not include any other securities that a selling stockholder may hold, including any other warrants that such selling stockholder
may hold, that are not applicable to this registration statement.
|
|
|
2.
|
Assumes the sale of all shares offered pursuant to this prospectus.
|
|
|
3.
|
Selling stockholder participated in the February Private Placement and received shares of common stock and the February Investor Warrants. The “Number of Shares of Common Stock Owned Prior to Offering” assumes the exercise in full of the February Investor Warrants.
|
|
|
4.
|
Mark Hefley has the voting and investment control over the securities held by The Mark Hefley Living Trust.
|
|
|
5.
|
Doug Shore has the voting and investment control over the securities held by Shores Oil Company.
|
|
|
6.
|
Selling stockholder was assigned the February PA Warrants from the placement agent in the February Private Placement. The “Number of Shares of Common Stock Owned Prior to Offering” assumes the exercise in full of the February PA Warrants.
|
|
|
7.
|
Selling stockholder participated in the July Private Placement and received shares of Series C Preferred Stock and July Warrants. The “Number of Shares of Common Stock Owned Prior to Offering” assumes the conversion in full of the Series C Preferred Stock and exercise in full of the July Warrants.
|
|
|
8.
|
David Jenkins has the voting and investment control over the securities held by Fat Boy Capital, LP.
|
|
|
9.
|
Jonathan Schechter, Joseph Reda and Andrew Arno share voting and investment control over the securities held by The Special Equities Opportunity Fund, LLC.
|
|
|
10.
|
Iroquois Capital Management L.L.C. is the investment manager of Iroquois Master Fund, Ltd. Iroquois Capital Management, LLC has voting control and investment discretion over securities held by Iroquois Master Fund. As Managing Members of Iroquois Capital Management, LLC, Richard Abbe and Kimberly Page make voting and investment decisions on behalf of Iroquois Capital Management, LLC in its capacity as investment manager to Iroquois Master Fund Ltd. As a result of the foregoing, Mr. Abbe and Mrs. Page may be deemed to have beneficial ownership (as determined under Section 13(d) of the Securities Exchange Act of 1934, as amended) of the securities held by Iroquois Capital Management and Iroquois Master Fund.
|
|
|
11.
|
Richard Abbe is the managing member of Iroquois Capital Investment Group LLC. Mr. Abbe has voting control and investment discretion over securities held by Iroquois Capital Investment Group LLC. As such, Mr. Abbe may be deemed to be the beneficial owner (as determined under Section 13(d) of the Securities Exchange Act of 1934, as amended) of the securities held by Iroquois Capital Investment Group LLC.
|
|
|
12.
|
Selling stockholder received Waiver Warrants in connection with the waiver by certain stockholders of the Company of certain rights pursuant to a voting and lock-up agreement. The “Number of Shares of Common Stock Owned Prior to Offering” assumes the exercise in full of the Waiver Warrants.
|
|
|
13.
|
Anson Advisors Inc. and Anson Funds Management LP, the Co-Investment Advisers of Anson Investments Master Fund LP (“Anson”), hold voting and dispositive power over the Common Shares held by Anson. Bruce Winson is the managing member of Anson Management GP LLC, which is the general partner of Anson Funds Management LP. Moez Kassam and Amin Nathoo are directors of Anson Advisors Inc. Mr. Winson, Mr. Kassam and Mr. Nathoo each disclaim beneficial ownership of these Common Shares except to the extent of their pecuniary interest therein. The principal business address of Anson is Walkers Corporate Limited, Cayman Corporate Centre, 27 Hospital Road, George Town, Grand Cayman KY1-9008, Cayman Islands.
|
|
|
14.
|
Daniel Warsh is the Manager of Warberg WF VII LP and has the voting and investment control over the securities held by Warberg WF VII LP.
|
|
|
15.
|
Daniel Warsh is the Manager of Warberg WF VIII LP and has the voting and investment control over the securities held by Warberg WF VIII LP.
|
|
|
16.
|
Mitchell P. Kopin (“Mr. Kopin”) and Daniel B. Asher (“Mr. Asher”), each of whom are managers of Intracoastal Capital LLC (“Intracoastal”), have shared voting control and investment discretion over the securities reported herein that are held by Intracoastal. As a result, each of Mr. Kopin and Mr. Asher may be deemed to have beneficial ownership (as determined under Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of the securities reported herein that are held by Intracoastal.
|
PLAN
OF DISTRIBUTION
We
are registering the shares of common stock to permit the resale of these shares of common stock (including shares of common stock
issuable upon conversion or exercise of outstanding securities) by the holders thereof (and such holders’ successors and
assigns) from time to time after the date of this prospectus. We will not receive any of the proceeds from the sale by the selling
stockholders of the shares of common stock. We will bear all fees and expenses incident to our obligation to register the shares
of common stock.
The
selling stockholders may sell all or a portion of the shares of common stock owned by them and offered hereby from time to time
directly or through one or more underwriters, broker-dealers or agents. If the shares of common stock are sold through underwriters
or broker-dealers, the selling stockholders will be responsible for underwriting discounts or commissions or agent’s commissions.
The shares of common stock may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of
the sale, at varying prices determined at the time of sale, or at negotiated prices. These sales may be effected in transactions,
which may involve crosses or block transactions,
|
|
●
|
on
any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale;
|
|
|
●
|
in
the over-the-counter market;
|
|
|
●
|
in
transactions otherwise than on these exchanges or systems or in the over-the-counter market;
|
|
|
●
|
through
the writing of options, whether such options are listed on an options exchange or otherwise;
|
|
|
●
|
ordinary
brokerage transactions and transactions in which the broker-dealer solicits purchasers;
|
|
|
●
|
block
trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block
as principal to facilitate the transaction;
|
|
|
●
|
purchases
by a broker-dealer as principal and resale by the broker-dealer for its account;
|
|
|
●
|
an
exchange distribution in accordance with the rules of the applicable exchange;
|
|
|
●
|
privately
negotiated transactions;
|
|
|
●
|
short
sales;
|
|
|
●
|
sales
pursuant to Rule 144;
|
|
|
●
|
broker-dealers
may agree with the selling securityholders to sell a specified number of such shares at a stipulated price per share;
|
|
|
●
|
a
combination of any such methods of sale; and
|
|
|
●
|
any
other method permitted pursuant to applicable law.
|
If
the selling stockholders effect such transactions by selling shares of common stock to or through underwriters, broker-dealers
or agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions
from the selling stockholders or commissions from purchasers of the shares of common stock for whom they may act as agent or to
whom they may sell as principal (which discounts, concessions or commissions as to particular underwriters, broker-dealers or
agents may be in excess of those customary in the types of transactions involved). In connection with sales of the shares of common
stock or otherwise, the selling stockholders may enter into hedging transactions with broker-dealers, which may in turn engage
in short sales of the shares of common stock in the course of hedging in positions they assume. The selling stockholders may also
sell shares of common stock short and deliver shares of common stock covered by this prospectus to close out short positions and
to return borrowed shares in connection with such short sales. The selling stockholders may also loan or pledge shares of common
stock to broker-dealers that in turn may sell such shares.
The
selling stockholders may pledge or grant a security interest in some or all of the shares of common stock owned by them and, if
they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of
common stock from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable
provision of the Securities Act, amending, if necessary, the list of selling stockholders to include the pledgee, transferee or
other successors in interest as selling stockholders under this prospectus. The selling stockholders also may transfer and donate
the shares of common stock in other circumstances in which case the transferees, donees, pledgees or other successors in interest
will be the selling owners for purposes of this prospectus.
The
selling stockholders and any broker-dealer participating in the distribution of the shares of common stock may be deemed to be
“underwriters” within the meaning of the Securities Act, and any commission paid, or any discounts or concessions
allowed to, any such broker-dealer may be deemed to be underwriting commissions or discounts under the Securities Act. At the
time a particular offering of the shares of common stock is made, a prospectus supplement, if required, will be distributed which
will set forth the aggregate amount of shares of common stock being offered and the terms of the offering, including the name
or names of any broker-dealers or agents, any discounts, commissions and other terms constituting compensation from the selling
stockholders and any discounts, commissions or concessions allowed or reallowed or paid to broker-dealers.
Under
the securities laws of some states, the shares of common stock may be sold in such states only through registered or licensed
brokers or dealers. In addition, in some states the shares of common stock may not be sold unless such shares have been registered
or qualified for sale in such state or an exemption from registration or qualification is available and is complied with.
There
can be no assurance that any selling stockholder will sell any or all of the shares of common stock registered pursuant to the
registration statement, of which this prospectus forms a part.
The
selling stockholders and any other person participating in such distribution will be subject to applicable provisions of the Exchange
Act and the rules and regulations thereunder, including, without limitation, Regulation M of the Exchange Act, which may limit
the timing of purchases and sales of any of the shares of common stock by the selling stockholders and any other participating
person. Regulation M may also restrict the ability of any person engaged in the distribution of the shares of common stock to
engage in market-making activities with respect to the shares of common stock. All of the foregoing may affect the marketability
of the shares of common stock and the ability of any person or entity to engage in market-making activities with respect to the
shares of common stock.
Once
sold under the registration statement, of which this prospectus forms a part, the shares of common stock will be freely tradable
in the hands of persons other than our affiliates.
DESCRIPTION
OF SECURITIES TO BE REGISTERED
General
As
of the date of this prospectus, our authorized capital stock consisted of 250,000,000 shares of common stock, $0.00001 par value
per share, and 10,000,000 shares of preferred stock, $0.00001 par value per share. Our Board of Directors may establish the rights
and preferences of the preferred stock from time to time. As of September 15, 2020, there were 40,098,234 shares of our common
stock outstanding and there were 4,205,406 shares of Series C Convertible Preferred Stock issued and outstanding.
Common
Stock
Under
the terms of our amended and restated certificate of incorporation, holders of our common stock are entitled to one vote for each
share held on all matters submitted to a vote of stockholders, including the election of directors, and do not have cumulative
voting rights. The holders of outstanding shares of common stock are entitled to receive dividends out of assets or funds legally
available for the payment of dividends of such times and in such amounts as our board of directors from time to time may determine.
Our common stock is not entitled to pre-emptive rights and is not subject to conversion or redemption. Upon liquidation, dissolution
or winding up of our company, the assets legally available for distribution to stockholders are distributable ratably among the
holders of our common stock after payment of liquidation preferences, if any, on any outstanding payment of other claims of creditors.
The rights, preferences and privileges of holders of common stock are subject to and may be adversely affected by the rights of
the holders of shares of any series of preferred stock that we may designate and issue in the future.
Delaware
Anti-Takeover Law and Provisions of Our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws
Some
provisions of Delaware law, our amended and restated certificate of incorporation and our amended and restated bylaws contain
provisions that could make the following transactions more difficult: an acquisition of us by means of a tender offer; an acquisition
of us by means of a proxy contest or otherwise; or the removal of our incumbent officers and directors. It is possible that these
provisions could make it more difficult to accomplish or could deter transactions that stockholders may otherwise consider to
be in their best interest or in our best interests, including transactions which provide for payment of a premium over the market
price for our shares.
These
provisions, summarized below, are intended to discourage coercive takeover practices and inadequate takeover bids. These provisions
are also designed to encourage persons seeking to acquire control of us to first negotiate with our board of directors. We believe
that the benefits of the increased protection of our potential ability to negotiate with the proponent of an unfriendly or unsolicited
proposal to acquire or restructure us outweigh the disadvantages of discouraging these proposals because negotiation of these
proposals could result in an improvement of their terms.
Delaware
Anti-Takeover Law
We
are subject to Section 203 of the DGCL. Section 203 generally prohibits a publicly traded corporation from engaging in a
“business combination” with an “interested stockholder” for a period of three years after the date of
the transaction in which the person became an interested stockholder, unless:
|
|
●
|
prior
to the date of the transaction, the board of directors of the corporation approved either the business combination or the
transaction which resulted in the stockholder becoming an interested stockholder;
|
|
|
●
|
upon
consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder
owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding specified
shares; or
|
|
|
●
|
at
or subsequent to the date of the transaction, the business combination is approved by the board of directors and authorized
at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of
the outstanding voting stock which is not owned by the interested stockholder.
|
Section
203 defines a “business combination” to include:
|
|
●
|
any
merger or consolidation involving the corporation and the interested stockholder;
|
|
|
●
|
any
sale, lease, exchange, mortgage, pledge, transfer or other disposition of 10% or more of the assets of the corporation to
or with the interested stockholder;
|
|
|
●
|
subject
to exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation
to the interested stockholder;
|
|
|
●
|
subject
to exceptions, any transaction involving the corporation that has the effect of increasing the proportionate share of the
stock of any class or series of the corporation beneficially owned by the interested stockholder; or
|
|
|
●
|
the
receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits
provided by or through the corporation.
|
In
general, Section 203 defines an “interested stockholder” as any person that is:
|
|
●
|
the
owner of 15% or more of the outstanding voting stock of the corporation;
|
|
|
●
|
an
affiliate or associate of the corporation who was the owner of 15% or more of the outstanding voting stock of the corporation
at any time within three years immediately prior to the relevant date; or
|
|
|
●
|
the
affiliates and associates of the above.
|
Under
specific circumstances, Section 203 makes it more difficult for an “interested stockholder” to effect various business
combinations with a corporation for a three-year period, although the stockholders may, by adopting an amendment to the corporation’s
certificate of incorporation or bylaws, elect not to be governed by this section, effective 12 months after adoption.
Our
amended and restated certificate of incorporation and amended and restated bylaws do not exclude us from the restrictions of Section
203. We anticipate that the provisions of Section 203 might encourage companies interested in acquiring us to negotiate in advance
with our board of directors since the stockholder approval requirement would be avoided if a majority of the directors then in
office approve either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder.
Undesignated
Preferred Stock
The
ability of our board of directors, without action by the stockholders, to issue up to 10,000,000 shares of undesignated preferred
stock with voting or other rights or preferences as designated by our board of directors could impede the success of any attempt
to change control of us. These and other provisions may have the effect of deferring hostile takeovers or delaying changes in
control or management of our company.
Stockholder
Meetings
Our
amended and restated certificate of incorporation and amended and restated bylaws provide that a special meeting of stockholders
may be called only by our chairman of the board, chief executive officer or president, or by a resolution adopted by a majority
of our board of directors.
Requirements
for Advance Notification of Stockholder Nominations and Proposals
Our
amended and restated bylaws establish advance notice procedures with respect to stockholder proposals to be brought before a stockholder
meeting and the nomination of candidates for election as directors, other than nominations made by or at the direction of the
board of directors or a committee of the board of directors.
Elimination
of Stockholder Action by Written Consent
Our
amended and restated certificate of incorporation and amended and restated bylaws eliminate the right of stockholders to act by
written consent without a meeting.
Removal
of Directors
Our
amended and restated certificate of incorporation provides that no member of our board of directors may be removed from office
by our stockholders except for cause and, in addition to any other vote required by law, upon the approval of not less than two-thirds
of the total voting power of all of our outstanding voting stock then entitled to vote in the election of directors.
Stockholders
Not Entitled to Cumulative Voting
Our
amended and restated certificate of incorporation does not permit stockholders to cumulate their votes in the election of directors.
Accordingly, the holders of a majority of the outstanding shares of our common stock entitled to vote in any election of directors
can elect all of the directors standing for election, if they choose, other than any directors that holders of our preferred stock
may be entitled to elect.
Choice
of Forum
Our
amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware will be the exclusive
forum for any derivative action or proceeding brought on our behalf; any action asserting a breach of fiduciary duty; any action
asserting a claim against us arising pursuant to the DGCL, our amended and restated certificate of incorporation or our amended
and restated bylaws; any action to interpret, apply, enforce, or determine the validity of our amended and restated certificate
of incorporation or amended and bylaws; or any action asserting a claim against us that is governed by the internal affairs doctrine.
The enforceability of similar choice of forum provisions in other companies’ certificates of incorporation has been challenged
in legal proceedings, and it is possible that a court could find these types of provisions to be inapplicable or unenforceable.
Amendment
Provisions
The
amendment of any of the above provisions, except for the provision making it possible for our board of directors to issue preferred
stock, would require approval by holders of at least 50 % of the total voting power of all of our outstanding voting stock.
The
provisions of the DGCL, our amended and restated certificate of incorporation and our amended and restated bylaws could have the
effect of discouraging others from attempting hostile takeovers and, as a consequence, they may also inhibit temporary fluctuations
in the market price of our common stock that often result from actual or rumored hostile takeover attempts. These provisions may
also have the effect of preventing changes in the composition of our board and management. It is possible that these provisions
could make it more difficult to accomplish transactions that stockholders may otherwise deem to be in their best interests.
Elimination
of Monetary Liability for Officers and Directors
Our
amended and restated certificate of incorporation incorporates certain provisions permitted under the DGCL relating to the liability
of directors. The provisions eliminate a director’s liability for monetary damages for a breach of fiduciary duty. Our amended
and restated certificate of incorporation also contains provisions to indemnify the directors and officers to the fullest extent
permitted by the DGCL. We believe that these provisions will assist us in attracting and retaining qualified individual to serve
as directors.
Exchange
Listing
Our
common stock is listed on the Nasdaq under the symbol “HJLI”. Certain of our warrants are listed on the Nasdaq under
the symbol “HJLIW.”
Transfer
Agent and Registrar
The
transfer agent and registrar for our common stock and warrants is VStock Transfer, LLC. The transfer agent and registrar’s
address is 18 Lafayette Pl, Woodmere, New York 11598.
INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Section
102 of the General Corporation Law of the State of Delaware permits a corporation to eliminate the personal liability of directors
of a corporation to the corporation or its stockholders for monetary damages for a breach of fiduciary duty as a director, except
for breaches of the director’s duty of loyalty to the corporation or its stockholders, acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of a law, authorizations of the payments of a dividend or approval
of a stock repurchase or redemption in violation of Delaware corporate law or for any transactions from which the director derived
an improper personal benefit. Our certificate of incorporation provides that no director will be liable to us or our stockholders
for monetary damages for breach of fiduciary duties as a director, subject to the same exceptions as described above. We have
entered into indemnification agreements with each of our directors which may, in some cases, be broader than the specific indemnification
provisions contained under Delaware law. We also expect to maintain standard insurance policies that provide coverage (1) to our
directors and officers against loss arising from claims made by reason of breach of duty or other wrongful act and (2) to us with
respect to indemnification payments we may make to such officers and directors.
Section
145 of the General Corporation Law of the State of Delaware provides that a corporation has the power to indemnify a director,
officer, employee, or agent of the corporation and certain other persons serving at the request of the corporation in related
capacities against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlements actually and reasonably
incurred by the person in connection with a threatened, pending, or completed action, suit or proceeding to which he or she is
or is threatened to be made a party by reason of such position, if such person acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the corporation, and, in any criminal action or proceeding, had no reasonable
cause to believe his or her conduct was unlawful, except that, in the case of actions brought by or in the right of the corporation,
indemnification is limited to expenses (including attorneys’ fees) actually and reasonably incurred by the person in connection
with defense or settlement of such action or suit and no indemnification shall be made with respect to any claim, issue, or matter
as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court
of Chancery or other adjudicating court determines that, despite the adjudication of liability but in view of all of the circumstances
of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper. In addition, to the extent that a present or former director or officer of a corporation has been
successful on the merits or otherwise in defense of any action, suit, or proceeding described above (or claim, issue, or matter
therein), such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred
by such person in connection therewith. Expenses (including attorneys’ fees) incurred by an officer or director in defending
any civil, criminal, administrative, or investigative action, suit, or proceeding may be advanced by the corporation upon receipt
of an undertaking by such person to repay such amount if it is ultimately determined that such person is not entitled to indemnification
by the corporation under Section 145 of the General Corporation Law of the State of Delaware. Our amended and restated certificate
of incorporation provides that we will, to the fullest extent permitted by law, indemnify any person made or threatened to be
made a party to an action or proceeding by reason of the fact that he or she (or his or her testators or intestate) is or was
our director or officer or serves or served at any other corporation, partnership, joint venture, trust or other enterprise in
a similar capacity or as an employee or agent at our request, including service with respect to employee benefit plans maintained
or sponsored by us, against expenses (including attorneys’), judgments, fines, penalties and amounts paid in settlement
incurred in connection with the investigation, preparation to defend, or defense of such action, suit, proceeding, or claim. However,
we are not required to indemnify or advance expenses in connection with any action, suit, proceeding, claim, or counterclaim initiated
by us or on behalf of us. Our amended and restated bylaws provides that we will indemnify and hold harmless each person who was
or is a party or threatened to be made a party to any action, suit, or proceeding by reason of the fact that he or she is or was
our director or officer, or is or was serving at our request in a similar capacity of another corporation, partnership, joint
venture, trust or other enterprise, including service with respect to employee benefit plans (whether the basis of such action,
suit, or proceeding is an action in an official capacity as a director or officer or in any other capacity while serving as a
director of officer) to the fullest extent authorized by the Delaware General Corporation Law against all expense, liability and
loss (including attorney’s fees, judgments, fines, ERISA excise taxes, or penalties and amounts paid in settlement) reasonably
incurred or suffered by such person in connection with such action, suit or proceeding, and this indemnification continues after
such person has ceased to be an officer or director and inures to the benefit of such person’s heirs, executors and administrators.
The indemnification rights also include the right generally to be advanced expenses, subject to any undertaking required under
Delaware General Corporation Law, and the right generally to recover expenses to enforce an indemnification claim or to defend
specified suits with respect to advances of indemnification expenses.
LEGAL
MATTERS
Unless
otherwise indicated in the applicable prospectus supplement, the validity of the securities offered by this prospectus were passed
upon for us by Ellenoff Grossman & Schole LLP.
EXPERTS
The financial statements
of Hancock Jaffe Laboratories, Inc. as of and for the years ended December 31, 2019 and 2018, incorporated by reference in this
prospectus, have been audited by Marcum LLP, independent registered public accounting firm, as set forth in their report, thereon
(which contains an explanatory paragraph relating to substantial doubt about the ability of Hancock Jaffe Laboratories, Inc. to
continue as a going concern as described in Note 1 to the financial statements), and are included in reliance upon such report
given upon the authority of said firm as experts in auditing and accounting.
WHERE
YOU CAN FIND ADDITIONAL INFORMATION
We
file annual, quarter and periodic reports, proxy statements and other information with the Securities and Exchange Commission
using the Commission’s EDGAR system. The Commission maintains a web site that contains reports, proxy and information statements
and other information regarding registrants that file electronically with the Commission. The address of such site is http//www.sec.gov.
We
have filed a registration statement with the Commission relating to the offering of the shares. The registration statement contains
information which is not included in this prospectus. You may inspect or copy the registration statement at the Commission’s
public reference facilities or its website.
You
should rely only on the information contained in this prospectus. We have not authorized any person to provide you with any information
that is different.
INCORPORATION
OF DOCUMENTS BY REFERENCE
We
are “incorporating by reference” in this prospectus certain documents we file with the SEC, which means that we can
disclose important information to you by referring you to those documents. The information in the documents incorporated by reference
is considered to be part of this prospectus. Statements contained in documents that we file with the SEC and that are incorporated
by reference in this prospectus will automatically update and supersede information contained in this prospectus, including information
in previously filed documents or reports that have been incorporated by reference in this prospectus, to the extent the new information
differs from or is inconsistent with the old information. We have filed or may file the following documents with the SEC and they
are incorporated herein by reference as of their respective dates of filing.
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1.
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Our
Annual Report on Form 10-K for the year ended December 31, 2019 as filed with the SEC on March 18, 2020;
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2.
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Our
Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 as filed with the SEC on June 8, 2020;
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3.
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Our
Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 as filed with the SEC on August 14, 2020;
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4.
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Our
Current Reports on Form 8-K as filed with the SEC on March 3, 2020, April 3, 2020, April 10, 2020. April 20, 2020, May 15,
2020, June 3, 2020, June 15, 2020, July 21, 2020 and September 16, 2020; and
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5.
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Our
definitive proxy statement Schedule 14A filed with the SEC on August 19, 2020.
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All
documents that we filed with the SEC pursuant to Sections 13(a), 13(c), 14, and 15(d) of the Exchange Act subsequent to the date
of this registration statement and prior to the filing of a post-effective amendment to this registration statement that indicates
that all securities offered under this prospectus have been sold, or that deregisters all securities then remaining unsold, will
be deemed to be incorporated in this registration statement by reference and to be a part hereof from the date of filing of such
documents.
Any
statement contained in a document incorporated or deemed to be incorporated by reference in this prospectus shall be deemed modified,
superseded or replaced for purposes of this prospectus to the extent that a statement contained in this prospectus, or in any
subsequently filed document that also is deemed to be incorporated by reference in this prospectus, modifies, supersedes or replaces
such statement. Any statement so modified, superseded or replaced shall not be deemed, except as so modified, superseded or replaced,
to constitute a part of this prospectus. None of the information that we disclose under Items 2.02 or 7.01 of any Current Report
on Form 8-K or any corresponding information, either furnished under Item 9.01 or included as an exhibit therein, that we may
from time to time furnish to the SEC will be incorporated by reference into, or otherwise included in, this prospectus, except
as otherwise expressly set forth in the relevant document. Subject to the foregoing, all information appearing in this prospectus
is qualified in its entirety by the information appearing in the documents incorporated by reference.
You
may requests, orally or in writing, a copy of these documents, which will be provided to you at no cost (other than exhibits,
unless such exhibits are specifically incorporate by reference), by contacting Chief Financial Officer, at Hancock Jaffe Laboratories,
Inc., 70 Doppler, Irvine, California 92618, or by telephone at (949) 261-2900. Information about us is also available at our website
at www.hancockjaffe.com. However, the information in our website is not a part of this prospectus and is not incorporated
by reference.
You
should rely only on the information contained in this document. We have not authorized anyone to provide you with information
that is different. This document may only be used where it is legal to sell these securities. The information in this document
may only be accurate on the date of this document.
Additional
risks and uncertainties not presently known may also impair our business operations. The risks and uncertainties described in
this document and other risks and uncertainties which we may face in the future will have a greater impact on those who purchase
our common stock. These purchasers will purchase our common stock at the market price or at a privately negotiated price and will
run the risk of losing their entire investment.
17,081,250
Shares of Common Stock
PROSPECTUS
,
2020
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
14. Other Expenses of Issuance and Distribution.
The
Company is paying all expenses of the offering. No portion of these expenses will be borne by the selling security holder. The
selling security holder, however, will pay any other expenses incurred in selling its common stock, including any brokerage commissions
or costs of sale. Following is an itemized statement of all expenses in connection with this registration statement. All of the
amounts shown are estimates, except for the SEC Registration Fees.
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SEC registration fee
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$
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791.52
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Legal fees and expenses
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$
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40,000
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Accounting fees and expenses
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$
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5,000
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Total
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$
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45,791.52
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Item
15. Indemnification of Directors and Officers.
Section
102 of the General Corporation Law of the State of Delaware permits a corporation to eliminate the personal liability of directors
of a corporation to the corporation or its stockholders for monetary damages for a breach of fiduciary duty as a director, except
for breaches of the director’s duty of loyalty to the corporation or its stockholders, acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of a law, authorizations of the payments of a dividend or approval
of a stock repurchase or redemption in violation of Delaware corporate law or for any transactions from which the director derived
an improper personal benefit. Our certificate of incorporation provides that no director will be liable to us or our stockholders
for monetary damages for breach of fiduciary duties as a director, subject to the same exceptions as described above. We have
entered into indemnification agreements with each of our directors which may, in some cases, be broader than the specific indemnification
provisions contained under Delaware law. We also expect to maintain standard insurance policies that provide coverage (1) to our
directors and officers against loss arising from claims made by reason of breach of duty or other wrongful act and (2) to us with
respect to indemnification payments we may make to such officers and directors.
Section
145 of the General Corporation Law of the State of Delaware provides that a corporation has the power to indemnify a director,
officer, employee, or agent of the corporation and certain other persons serving at the request of the corporation in related
capacities against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlements actually and reasonably
incurred by the person in connection with a threatened, pending, or completed action, suit or proceeding to which he or she is
or is threatened to be made a party by reason of such position, if such person acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the corporation, and, in any criminal action or proceeding, had no reasonable
cause to believe his or her conduct was unlawful, except that, in the case of actions brought by or in the right of the corporation,
indemnification is limited to expenses (including attorneys’ fees) actually and reasonably incurred by the person in connection
with defense or settlement of such action or suit and no indemnification shall be made with respect to any claim, issue, or matter
as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court
of Chancery or other adjudicating court determines that, despite the adjudication of liability but in view of all of the circumstances
of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper. In addition, to the extent that a present or former director or officer of a corporation has been
successful on the merits or otherwise in defense of any action, suit, or proceeding described above (or claim, issue, or matter
therein), such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred
by such person in connection therewith. Expenses (including attorneys’ fees) incurred by an officer or director in defending
any civil, criminal, administrative, or investigative action, suit, or proceeding may be advanced by the corporation upon receipt
of an undertaking by such person to repay such amount if it is ultimately determined that such person is not entitled to indemnification
by the corporation under Section 145 of the General Corporation Law of the State of Delaware. Our amended and restated certificate
of incorporation provides that we will, to the fullest extent permitted by law, indemnify any person made or threatened to be
made a party to an action or proceeding by reason of the fact that he or she (or his or her testators or intestate) is or was
our director or officer or serves or served at any other corporation, partnership, joint venture, trust or other enterprise in
a similar capacity or as an employee or agent at our request, including service with respect to employee benefit plans maintained
or sponsored by us, against expenses (including attorneys’), judgments, fines, penalties and amounts paid in settlement
incurred in connection with the investigation, preparation to defend, or defense of such action, suit, proceeding, or claim. However,
we are not required to indemnify or advance expenses in connection with any action, suit, proceeding, claim, or counterclaim initiated
by us or on behalf of us. Our amended and restated bylaws provides that we will indemnify and hold harmless each person who was
or is a party or threatened to be made a party to any action, suit, or proceeding by reason of the fact that he or she is or was
our director or officer, or is or was serving at our request in a similar capacity of another corporation, partnership, joint
venture, trust or other enterprise, including service with respect to employee benefit plans (whether the basis of such action,
suit, or proceeding is an action in an official capacity as a director or officer or in any other capacity while serving as a
director of officer) to the fullest extent authorized by the Delaware General Corporation Law against all expense, liability and
loss (including attorney’s fees, judgments, fines, ERISA excise taxes, or penalties and amounts paid in settlement) reasonably
incurred or suffered by such person in connection with such action, suit or proceeding, and this indemnification continues after
such person has ceased to be an officer or director and inures to the benefit of such person’s heirs, executors and administrators.
The indemnification rights also include the right generally to be advanced expenses, subject to any undertaking required under
Delaware General Corporation Law, and the right generally to recover expenses to enforce an indemnification claim or to defend
specified suits with respect to advances of indemnification expenses..
Item
16. Exhibits.
The
following exhibits are filed with this Registration Statement.
Item
17. Undertakings.
The
undersigned registrant hereby undertakes:
(1)
That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
(2)
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold
at the termination of the offering.
(3)
That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
(i)
If the registrant is relying on Rule 430B:
(A)
Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as
of the date the filed prospectus was deemed part of and included in the registration statement; and
(B)
Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance
on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information
required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement
as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale
of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and
any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement
relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration
statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by
reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with
a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement
or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date;
or
(ii)
If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating
to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A,
shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness.
Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement
or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part
of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify
any statement that was made in the registration statement or prospectus that was part of the registration statement or made in
any such document immediately prior to such date of first use.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy
as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Irvine, State of California, on this 5th day of
October, 2020.
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Date:
October 5, 2020
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HANCOCK
JAFFE LABORATORIES, INC.
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By:
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/s/
Robert Berman
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Robert
Berman
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Chief
Executive Officer
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(Principal
Executive Officer)
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By:
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/s/
Craig Glynn
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Craig
Glynn
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Interim
Chief Financial Officer
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(Principal
Financing and Accounting Officer)
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Pursuant
to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons
on behalf of the Registrant in the capacities and on the dates indicated.
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Signature
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Title
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Date
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/s/ Robert A. Berman
Robert A Berman
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President and Chief Executive Officer
(Principal Executive Officer)
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October 5,
2020
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/s/ Craig Glynn
Craig Glynn
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Chief Financial Officer
(Principal Financial and Accounting Officer)
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October 5,
2020
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*
Dr. Francis Duhay
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Chairman of the Board of Directors
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October 5,
2020
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*
Dr. Sanjay Shrivastava
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Director
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October 5,
2020
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*
Matthew Jenusaitis
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Director
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October 5,
2020
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*
Robert Gray
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Director
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October 5,
2020
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* By:
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/s/ Robert A. Berman
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Robert A. Berman
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Attorney-in-Fact
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