RENNOVA HEALTH, INC. (NASDAQ:RNVA) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01
| Entry into a Material Definitive Agreement. |
On March 15, 2017, Rennova Health, Inc. (the Company) entered
into a Securities Purchase Agreement (the Purchase Agreement)
with certain existing institutional investors of the Company. to
the Purchase Agreement, the Company has agreed to issue
$10,850,000 aggregate principal amount of Senior Secured Original
Issue Discount Convertible Debentures due two years from the date
of issuance (the New Debentures) and three series of warrants to
purchase shares of the Companys common stock, par value $.01 per
share (the Common Stock), as further described below (each, a
Warrant and, collectively, the Warrants). The Purchase Agreement
contains certain customary representations, warranties and
covenants. Gross proceeds from the Purchase Agreement are
expected to be $8,750,000. The closing of the offering is
expected to occur on or before March 20, 2017 and is subject to,
among other things, customary closing conditions.
Simultaneously with the offering of New Debentures and Warrants,
to an Exchange Agreement, the holder of the Companys Original
Issue Discount Convertible Debentures issued on February 2, 2017
will exchange $1,590,000 principal amount of such debentures for
$2,464,500 of new debentures on the same terms as, and pari passu
with, the New Debentures (the Exchange Debentures and, together
with the New Debentures, the Debentures) and Warrants.
Additionally, until the fifth trading day after the closing, the
holder of $2,000,000 stated value of the Companys Series H
Convertible Preferred Stock may exchange such preferred stock
into $2,480,000 principal amount of Exchange Debentures and
Warrants on the same terms. All issuance amounts of Debentures
reflect a 24% original issue discount.
The Debentures may be converted at any time at a conversion price
equal to $1.66. The New Debentures will begin to amortize monthly
commencing on the 90th day following the closing date
and the Exchange Debentures will begin to amortize monthly
immediately. On each monthly amortization date, the Company may
elect to repay 5% of the original principal amount of Debentures
in cash or, in lieu thereof, the conversion price of such
Debentures shall thereafter be 85% of the volume weighted average
price at the time of conversion. In the event the Company does
not elect to pay such amortization amounts in cash, each
investor, in their sole discretion, may increase the conversion
amount subject to the alternative conversion price by up to four
times the amortization amount.
If any Event of Default (as defined in the Debentures) occurs,
the outstanding principal amount of the Debentures, plus accrued
but unpaid interest, liquidated damages and other amounts owing
in respect thereof through the date of acceleration, shall
become, at the holders election, immediately due and payable in
cash. Commencing five days after the occurrence of any Event of
Default that results in the eventual acceleration of the
Debentures, the interest rate on the Debentures shall accrue at
an interest rate equal to the lesser of 18% per annum and the
maximum rate permitted under applicable law.
The Debentures contain customary affirmative and negative
covenants. The conversion price is subject to full ratchet and
other customary anti-dilution protections as more fully described
in the Debentures.
The Series A Warrants will be exercisable for up to a number of
shares of Common Stock equal to 100% of the shares underlying the
Debentures. They will be immediately exercisable and have a term
of exercise equal to five years. The Series B Warrants will be
exercisable for up to a number of shares of Common Stock equal to
100% of the shares underlying the Debentures and are exercisable
for a period of 18 months commencing immediately. The Series C
Warrants will be exercisable for up to a number of shares of
Common Stock equal to 100% of the shares underlying the
Debentures and have a term of five years provided such Warrants
shall only vest if, when and to the extent that the holders
exercise the Series B Warrants. The Series A and Series C
Warrants each will have an exercise price of $1.95 and the Series
B Warrants will have an exercise price of $1.66. All Warrants
will be subject to full ratchet and other customary anti-dilution
protections.
As collateral security for all of the Companys obligations under
the Debentures, the Company and the Companys subsidiaries listed
in the security agreement, will grant the Debenture holders a
security interest in all of the Companys and its subsidiaries
assets, to the terms of the Security Agreement (the Security
Agreement). To further secure the Companys obligations, the
Companys subsidiaries will also execute a Guarantee (the
Guarantee), to which the subsidiaries agree to guaranty the
Companys obligations owed to the Debenture holders.
The securities to be issued under the Purchase Agreement will be
issued in reliance on the exemption from registration contained
in Section 4(a)(2) of the Securities Act of 1933, as amended (the
Securities Act), and/or Rule 506 of Regulation D promulgated
thereunder as transactions by an issuer not involving any public
offering. The securities to be issued under the Exchange
Agreement will be issued in reliance on the exemption from
registration contained in Section 3(a)(9) of the Securities Act.
This Current Report on Form 8-K (this Current Report) does not
constitute an offer to sell or the solicitation of an offer to
buy any security and shall not constitute an offer, solicitation
or sale in any jurisdiction in which such offer, solicitation or
sale would be unlawful.
The Company will be obligated to file a registration statement
registering for resale the shares underlying the Debentures and
Warrants on or before April 7, 2017 and use best efforts to cause
such registration statement to be declared effective within 45
days or 75 days if reviewed. The Companys failure to satisfy
certain conditions and deadlines described in the Registration
Rights Agreement may subject it to payment of certain liquidated
damages. Additionally, the Company is required to seek
shareholder approval to issue in excess of 20% of the Companys
issued and outstanding shares of Common Stock. The holders were
also granted a right of participation in up to 50% of any future
offerings for so long as the Debentures and Warrants are
outstanding.
The Purchase Agreement may be terminated by any purchaser, as to
such purchasers obligations only, if the closing of the Purchase
Agreement has not been consummated by March 24, 2017; provided,
however, that such termination will not affect the right of any
party to sue for breach by any other party (or parties).
The foregoing description of the Purchase Agreement, the
Debentures, the Warrants, the Security Agreement, the Exchange
Agreement and the Guarantee does not purport to be complete and
is qualified in its entirety by reference to the full text of
such agreements, which are filed as exhibits to this Current
Report and are incorporated herein by reference.
On March 16, 2017, the Company issued a press release regarding
the offering. A copy of the press release is attached hereto as
Exhibit 99.1, which is being furnished and shall not be deemed
filed for the purposes of Section 18 of the Securities Exchange
Act of 1934, as amended (the Exchange Act), or otherwise subject
to the liabilities of that section. The information in Exhibit
99.1 shall not be incorporated by reference into any filing under
the Exchange Act or the Securities Act, except as expressly set
forth by specific reference in such a filing.
The Company also entered into exchange agreements with certain
holders of its warrants issued on July 19, 2016 to exchange, upon
the closing under the Purchase Agreement, such warrants for an
aggregate of 29,518 shares of Common Stock. Such shares of Common
Stock will be issued in reliance on the exemption from
registration contained in Section 3(a)(9) of the Securities Act.
On March 13, 2017, the Company entered into a note and warrant
exchange agreement with the holders of the convertible notes and
warrants issued on September 15, 2016 to exchange such securities
for an aggregate of 400,000 shares of Common Stock. Such shares
of Common Stock were issued in reliance on the exemption from
registration contained in Section 3(a)(9) of the Securities Act.
Item 3.02Unregistered Sales of Equity Securities
The information disclosed in Item 1.01 of this Current Report on
Form 8-K is incorporated by reference into this Item 3.02.
Item 9.01.Financial Statements and Exhibits.
(d)Exhibits.
| Exhibit No. | Exhibit Description | |
| 10.126 |
Securities Purchase Agreement, dated as of March 15, 2017, between Rennova Health, Inc. and each purchaser identified on the pages thereto |
|
| 10.127 |
Form of Senior Secured Original Issue Discount Convertible Debenture (incorporated by reference to Exhibit A to Exhibit 10.126) |
|
| 10.128 |
Form of Series A/B/C Common Stock Purchase Warrant (incorporated by reference to Exhibit C to Exhibit 10.126) |
|
| 10.129 |
Form of Security Agreement (incorporated by reference to Exhibit E to Exhibit 10.126) |
|
| 10.130 |
Form of Subsidiary Guarantee (incorporated by reference to Exhibit F to Exhibit 10.126) |
|
| 10.131 |
Exchange Agreement, dated as of March 15, 2017, between Rennova Health, Inc. and the investor signatory thereto |
|
| 99.1 | Press Release, dated March 16, 2017 |
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.
| Date: March 16, 2017 | RENNOVA HEALTH, INC. |
| By:/s/ Seamus Lagan | |
| Seamus Lagan | |
| Chief Executive Officer | |
| (principal executive officer) |
EXHIBIT INDEX
| Exhibit No. | Exhibit Description | |
| 10.126 |
Securities Purchase Agreement, dated as of March 15, 2017, between Rennova Health, Inc. and each purchaser identified on the |
About RENNOVA HEALTH, INC. (NASDAQ:RNVA)
Rennova Health, Inc. (Rennova), formerly CollabRx, Inc., is a provider of diagnostics and supportive software solutions to healthcare providers. The Company operates in three segments: clinical laboratory operations, supportive software solutions, and decision support and informatics operations. The Company is a healthcare enterprise that delivers products and services, including laboratory diagnostics, healthcare technology solutions, and revenue cycle management and intends to provide financial services, to medical providers. Rennova’s principal line of business is clinical laboratory blood and urine testing services. It is also engaged in the provision of urine drug toxicology testing to physicians, clinics and rehabilitation facilities in the United States. Its clinical laboratories include Biohealth Medical Laboratory, Inc.; Alethea Laboratories, Inc.; International Technologies, LLC; EPIC Reference Labs, Inc., and Epinex Diagnostics Laboratories, Inc. RENNOVA HEALTH, INC. (NASDAQ:RNVA) Recent Trading Information
RENNOVA HEALTH, INC. (NASDAQ:RNVA) closed its last trading session down -0.09 at 1.87 with 1,525,436 shares trading hands.