AND EXCHANGE COMMISSION
SECTION 13 or 15(d) OF THE
EXCHANGE ACT OF 1934
of report (Date of earliest event reported): August 31,
Name of Registrant as Specified in Its Charter)
or Other Jurisdiction of Incorporation)
Employer Identification No.)
Village Boulevard, Suite 905, West Palm
of Principal Executive Offices)
Telephone Number, Including Area Code)
Name or Former Address, if Changed Since Last Report)
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2.
communications pursuant to Rule 425 under the Securities Act (17
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
Securities registered under Section 12(b) of the Act:
Title of each class
Name of each exchange on which
by check mark whether the registrant is an emerging growth company
as defined in Rule 405 of the Securities Act of 1933 (§230.405 of
this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934
(§240.12b-2 of this chapter).
growth company [ ]
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 13(a) of the Exchange Act.
1.01. Entry into a Material Definitive Agreement.
August 31, 2020, Rennova Health, Inc. (the “Company”) entered into
Exchange, Redemption and Forbearance Agreements (the “Agreements”)
with certain institutional investors in the Company. In the
Agreements, the investors agreed to reduce their holdings of the
Company’s debentures by approximately $19.3 million (including
accrued interest and penalties) by exchanging the debentures and
all of the outstanding shares of the Company’s Series I-1
Convertible Preferred Stock and Series I-2 Convertible Preferred
Stock for 30,435 shares of the Company’s newly-authorized Series N
Convertible Redeemable Preferred Stock (the “Series N Preferred
Stock”). The terms of the Series N Preferred Stock are set forth
below. Christopher Diamantis, a former director of the Company, is
also a party to the Agreements as he continues to be a guarantor of
a portion of the remaining debt.
The investors will continue to own, after the initial exchange,
approximately $14.9 million (including accrued interest and
penalties) of debentures, but have agreed that the Company could
redeem $10 million of its obligations under these debentures held
by the investors at face value, plus accrued interest and
penalties. These debentures include approximately $5.0 million
under debentures that have been guaranteed by Mr. Diamantis. This
redemption right is exercisable for 90 days. If it is exercised in
full, the remaining debentures held by the investors (totaling
approximately $4.9 million, including accrued interest and
penalties) will be exchanged for approximately 4,900 additional
shares of Series N Preferred Stock.
During the 90-day redemption period (or until the occurrence of
certain specified events, if earlier), the investors will forbear
from exercising any remedies against the Company or Mr. Diamantis
as a result of any existing defaults under the outstanding
securities. During that period, additional interest and penalties
will not accrue and will be forgiven if the redemption right is
exercised in full. If the redemption right is not exercised in
full, all such additional amounts will become due and payable.
The shares of Series N Preferred Stock were issued in reliance on
the exemption from registration contained in Section 3(a)(9) of the
Securities Act of 1933, as amended.
foregoing description of the Agreements does not purport to be
complete and is qualified by reference to the Agreements, a form of
which is filed as Exhibit 10.1 to this Current Report on Form 8-K
and is incorporated herein by reference.
3.02. Unregistered Sales of Equity Securities.
information set forth in Item 1.01 is incorporated herein by
3.03. Material Modification to Rights of Security
The information set forth in
Item 1.01 is incorporated herein by reference.
5.03. Amendments to Articles of Incorporation or Bylaws; Changes in
August 31, 2020, the Company filed a Certificate of Designation
with the Secretary of State of the State of Delaware to authorize
the issuance of up to 50,000 shares of Series N Preferred Stock.
The following is a summary of certain terms of the Series N
The Company’s Board of Directors has designated 50,000 shares of
the 5,000,000 authorized shares of preferred stock as the Series N
Preferred Stock. Each share of the Series N Preferred Stock has a
stated value of $1,000.
Rights. Except as provided below or by law, the Series N
Preferred Stock shall have no voting rights. However, as long as
any shares of Series N Preferred Stock are outstanding, the Company
shall not, without the affirmative vote of the holders of a
majority of the then outstanding shares of the Series N Preferred
Stock, (a) alter or change adversely the powers, preferences or
rights given to the Series N Preferred Stock or alter or amend the
Certificate of Designation, (b) amend its certificate of
incorporation or other charter documents in any manner that
adversely affects any rights of the holders, (c) increase the
number of authorized shares of the Series N Preferred Stock, or (d)
enter into any agreement with respect to any of the
Dividends at the rate per annum of 10% of the stated value per
share shall accrue on each outstanding share of Series N Preferred
Stock from and after the date of the original issuance of such
share of Series N Preferred Stock (the “Preferred Accruing
Dividends”). The Preferred Accruing Dividends shall accrue from day
to day, whether or not declared, and shall be cumulative and
non-compounding; provided, however, that such
Preferred Accruing Dividends shall be payable only when, as, and if
declared by the Board of Directors. No cash dividends shall be paid
on the common stock unless the Preferred Accruing Dividends are
The Series N Preferred Stock ranks with respect to dividends or a
liquidation, (i) on parity with the common stock, the Company’s
Series H Convertible Preferred Stock, the Company’s Series L
Convertible Preferred Stock and the Company’s Series M Convertible
Preferred Stock, (ii) senior to the Company’s Series F Convertible
Preferred Stock, and (iii) junior to any other class or series of
preferred stock of the Company afterwards created and ranking by
its terms senior to the Preferred Stock.
Each share of the Series N Preferred Stock is convertible into
shares of the Company’s common stock, at any time and from time to
time, at the option of the holder, into that number of shares of
common stock determined by dividing the stated value of such share
of Series N Preferred Stock, plus any accrued declared and unpaid
dividends, by the conversion price. The conversion price is equal
to 90% of the lowest VWAP during the 10 trading days immediately
prior to the conversion date. Holders of the Series N Preferred
Stock are prohibited from converting Series N Preferred Stock into
shares of common stock if, as a result of such conversion, the
holder, together with its affiliates, would own more than 4.99%
(or, upon election of the holder, 9.99%) of the total number of
shares of common stock then issued and outstanding. However, any
holder may increase or decrease such percentage to any other
percentage not in excess of 9.99%, provided that any increase in
such percentage shall not be effective until 61 days after notice
to the Company.
Preference. Upon any liquidation, dissolution or winding up of
the Company, the holders of the Series N Preferred Stock shall be
entitled to receive an amount equal to the stated value of the
Series N Preferred Stock, plus any accrued declared and unpaid
dividends thereon and any other fees or liquidated damages then due
and owing thereon, for each share of the Series N Preferred Stock
before any distribution or payment shall be made on any junior
At any time the Company shall have the right to redeem all, or any
part, of the Series N Preferred Stock then outstanding. The Series
N Preferred Stock subject to redemption shall be redeemed by the
Company in cash in an amount equal to the stated value of the
shares of the Series N Preferred Stock being redeemed plus all
accrued declared and unpaid dividends.
foregoing description of the Series N Preferred Stock does not
purport to be complete and is qualified by reference to the
Certificate of Designation of the Series N Preferred Stock, a copy
of which is filed as Exhibit 3.25 to this Current Report on Form
8-K and is incorporated herein by reference.
9.01. Financial Statements and Exhibits.
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
September 1, 2020