Business context and reporting period
This summary covers the unaudited quarter and six months ended June 30, 2021. The filing registrant is Hancock Jaffe Laboratories, Inc. (Nasdaq: HJLI), a development-stage medical-device company—not “Envveno Medical Corp,” as stated in the request metadata. It is developing VenoValve for chronic venous insufficiency and CoreoGraft for coronary bypass surgery. The filing reports no revenue for the periods presented.
Financial performance and position
| Metric | Three months ended June 30, 2021 | Six months ended June 30, 2021 |
|---|---|---|
| Revenue | None reported | None reported |
| Selling, general and administrative expense | $1.30 million | $2.47 million |
| Research and development expense | $1.09 million | $2.72 million |
| Operating loss | $2.39 million | $5.19 million |
| Net loss | $2.38 million | $5.15 million |
| Basic and diluted loss per share | $0.28 | $0.72 |
| Net cash used in operating activities | Not separately stated | $6.51 million |
With no reported revenue, gross profit and operating margins are not meaningful. At June 30, 2021, cash and cash equivalents were $41.04 million, working capital was $40.05 million, total assets were $42.35 million, and stockholders’ equity was $40.87 million. Total liabilities were $1.48 million, including a $312,700 note payable at 1% interest, due April 22, 2022, and $437,031 in operating lease liabilities. The company said available capital was sufficient to meet obligations and sustain operations for at least one year after the report date; it also disclosed that $40.79 million of cash was uninsured.
Changes versus the prior comparable period
- Second-quarter net loss increased 50%, from $1.63 million to $2.38 million. Operating expenses rose by about $0.9 million, primarily reflecting higher compensation, trial preparation and related costs.
- First-half net loss increased 85%, from $2.79 million to $5.15 million. R&D expense rose 124% to $2.72 million, mainly for VenoValve pivotal-trial preparation, regulatory work, staffing, testing and production. SG&A increased 35% to $2.47 million.
- Cash increased from $9.33 million at December 31, 2020, mainly due to a February public offering that generated $38.13 million net and $240,000 from warrant exercises. The offering issued 5,914,284 shares at $7.00 per share and warrants to purchase 2,957,142 shares at $7.00.
- Shares outstanding rose from 2,541,529 at year-end to 8,513,662 at June 30, 2021, reflecting the offering and other issuances.
Outlook, developments and risks
- The FDA approved the VenoValve IDE application on April 1, 2021. The planned SAVVE pivotal study is a 75-patient, single-arm, multicenter U.S. trial; management expected the first implantation in the third quarter of 2021. This is a stated expectation, not a reported achievement in this filing.
- Management cited positive results from the 11-patient Colombian VenoValve first-in-human study, including average improvements in reflux, VCSS and pain scores. These early results do not establish FDA approval or commercial effectiveness.
- The CoreoGraft first-in-human feasibility study in Paraguay remained on hold amid COVID-19 conditions after two patients died from events described as unrelated to the device. The filing gives no expected restart date.
- The company expects continued losses, may never generate sufficient revenue to support operations, and may need additional capital. COVID-19 could disrupt development, manufacturing, testing and clinical activity.
- Two lawsuits brought by a former employee allege employment, defamation, discrimination and other claims. The company intends to defend them; potential loss could not be reasonably estimated, and no amount was accrued.
- Management reported ineffective disclosure controls as of June 30, 2021, due to a material weakness in accounting controls for warrants and a delayed derivative-liability recording in 2020. The company said it was developing a remediation plan.
Important facts for investors to verify
- Confirm the registrant’s identity and ticker; the supplied company name does not match the filing.
- Check subsequent filings for actual SAVVE trial initiation, enrollment progress and updated timelines.
- Review the status of the CoreoGraft study and any updates on the reported patient deaths.
- Assess cash burn, remaining runway, potential financing needs and dilution after the large 2021 offering.
- Track remediation of the material weakness and developments in the former employee litigation.