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 December 19, 2016, Rennova Health, Inc. (the Company) entered
into an underwriting agreement (the Underwriting Agreement) with
Aegis Capital Corp., as representative (the Representative) of
the several underwriters identified therein (the Underwriters),
relating to the Companys public offering (the Offering) of 12,350
shares of Series H Convertible Preferred Stock (the Series H
Preferred Stock) with a stated value of $1,000 per share and
convertible into shares of the Company’s Common Stock at $0.09
per share (the Firm Securities). to the Underwriting Agreement,
the Company granted the Underwriters a 45-day option (the Option)
to purchase up to an additional 1,852 shares of Series H
Preferred Stock at the public offering price less underwriting
discounts and commissions to cover over-allotments, if any.
The Underwriters agreed to purchase the Firm Securities from the
Company to the Underwriting Agreement, at a purchase price of
$1,000 (less $70.00 per share with regard to 4,004 shares of the
total 12,350 shares offered) per Firm Security . The Company also
issued warrants to designees of the Representative, to purchase
an aggregate of 6,861,111 shares of Common Stock at an exercise
price of $0.1125 per share (the Warrants). The Warrants are
exercisable at any time from December 15, 2017 to December 15,
2021. The Firm Securities and the Warrants were offered, issued
and sold under a prospectus filed with the Securities and
Exchange Commission (the SEC) to an effective registration
statement filed with the SEC on Form S-1 (Registration No.
333-214512) to the Securities Act of 1933, as amended (the
Securities Act).
The Underwriting Agreement contained customary representations,
warranties and agreements by the Company, customary conditions to
closing, indemnification obligations of the Company and the
Underwriters, including for liabilities under the Securities Act,
other obligations of the parties and termination provisions. The
representations, warranties and covenants contained in the
Underwriting Agreement were made only for purposes of such
agreement and as of specific dates, were solely for the benefit
of the parties to such agreement and were subject to limitations
agreed upon by the contracting parties.
The Underwriting Agreement and the form of Warrant are filed as
Exhibit 1.1 and Exhibit 4.1 hereto, respectively, and are
incorporated herein by reference. The foregoing descriptions of
the terms of the Underwriting Agreement and the Warrants are
qualified in their entirety by reference to such exhibits.
Item 5.03. Amendment to Articles of Incorporation or
Bylaws; Change in Fiscal Year.
On December 19, 2016, the Company filed a Certificate of
Designation with the Secretary of State of the State of Delaware
to authorize the issuance of up to 14,202 shares of Series H
Preferred Stock. The following summary of certain terms and
provisions of the Company’s Series H Preferred Stock is subject
to, and qualified in its entirety by reference to, the terms and
provisions set forth in the Company’s certificate of designation
of preferences, rights and limitations of Series H Preferred
Stock.
General. The Companys board of directors has designated
up to 14,202 shares of the 5,000,000 authorized shares of
preferred stock as Series H Preferred Stock.
Rank. The Series H Preferred Stock ranks on parity to
the Companys common stock.
Conversion.Each share of the Series H Preferred Stock is
convertible into shares of the Companys common stock (subject to
adjustment as provided in the related certificate of designation
of preferences, rights and limitations) at any time at the option
of the holder at a conversion price equal to the stated value of
the Series H Preferred Stock of $1,000 per share divided by
$0.09. Holders of Series H Preferred Stock are prohibited from
converting Series H Preferred Stock into shares of the Companys
common stock if, as a result of such conversion, the holder,
together with its affiliates, would own more than 4.99% of the
total number of shares of the Companys 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 such notice to the Company.
Liquidation Preference.In the event of the Companys
liquidation, dissolution or winding-up, holders of Series H
Preferred Stock will be entitled to receive an amount equal to
$1,000 per share before any distribution shall be made to the
holders of any junior securities, and then will be entitled to
receive the same amount that a holder of common stock would
receive if the Series H Preferred Stock were fully converted into
shares of the Companys common stock at the conversion price
(disregarding for such purposes any conversion limitations) which
amounts shall be paid pari passu with all holders of common
stock.
Voting Rights.Shares of Series H Preferred Stock
generally have no voting rights, except as required by law and
except that the affirmative vote of the holders of at least 75%
of the then outstanding shares of Series H Preferred Stock is
required to (a) alter or change adversely the powers, preferences
or rights given to the Series H Preferred Stock, (b) amend the
Companys certificate of incorporation or other charter documents
in any manner that materially adversely affects any rights of the
holders, (c) increase the number of authorized shares of Series H
Preferred Stock, or (d) enter into any agreement with respect to
any of the foregoing.
Dividends.Shares of Series H Preferred Stock are not
entitled to receive any dividends, unless and until specifically
declared by the Companys board of directors. The holders of the
Series H Preferred Stock will participate, on an
as-if-converted-to-common stock basis, in any dividends to the
holders of common stock.
Redemption.The Company is not obligated to redeem or
repurchase any shares of Series H Preferred Stock. Shares of
Series H Preferred Stock are not otherwise entitled to any
redemption rights or mandatory sinking fund or analogous fund
provisions.
Negative Covenants.As long as at least 1,420 shares of
Series H Preferred Stock are outstanding, unless the holders of
at least 75% of the then outstanding shares of Series G Preferred
Stock shall have given prior written consent, the Company may
not, and shall not permit any of the Companys subsidiaries to,
directly or indirectly (a) repay, repurchase or offer to repay,
repurchase or otherwise acquire more than a de minimis
number of shares of common stock or common stock equivalents or
junior securities (as such terms are defined in the Series H
Preferred Stock Certificate of Designation), with certain
exceptions, (b) pay cash dividends or distributions on junior
securities (which includes the Companys common stock), (c) enter
into any transaction with any affiliate which would be required
to be disclosed in any public filing with the SEC, unless it is
made on an arm’s-length basis and expressly approved by a
majority of our disinterested directors (even if less than a
quorum), (d) enter into any agreement to effect any issuance by
the Company or any subsidiary of common stock or common stock
equivalents (or a combination thereof) involving a variable rate
transaction (as defined in the Series H Preferred Stock
Certificate of Designation), (e) except for certain exempt
issuances, issue any common stock or common stock equivalents for
an effective price per share (as calculated in the Series H
Preferred Stock Certificate of Designation) less than the then
conversion price, or (f) enter into any agreements with respect
to any of the foregoing.
The foregoing description of the Series H Preferred Stock does
not purport to be complete and is qualified in its entirety by
reference to the Certificate of Designation for the Series H
Preferred Stock, a copy of which is filed as Exhibit 3.1, and is
hereby incorporated into this report by reference.
Item 8.01.Other Events.
On December 19, 2016, the Company issued a press release
announcing that it had priced the Offering. A copy of the press
release is attached as Exhibit 99.1 to this Current Report and
incorporated by reference herein.
On December 20, 2016, the Company closed the Offering for net
proceeds of approximately $11.7 million after deducting the
underwriting discounts and commissions and estimated offering
expenses payable by the Company. The Company then used
approximately $8.3 million of the net proceeds to redeem
substantially all of its outstanding Series G Convertible
Preferred Stock. The shares of Series H Preferred Stock are not
listed on The NASDAQ Capital Market or any other established
public trading market. No assurance can be given that a trading
market will develop for the Series H Preferred Stock.
Item 9.01.Financial Statements and Exhibits.
(d)
| Exhibit No. | Exhibit Description | |
| 1.1 |
Underwriting Agreement, between Aegis Capital Corp., as representative of the several underwriters, and Rennova Health, Inc. |
|
| 3.1 |
Certificate of Designation for Series H Convertible Preferred Stock. |
|
| 4.1 |
Form of Representative’s Warrant (included as Exhibit A to Exhibit 1.1). |
|
| 99.1 | Press Release dated December 19, 2016. |
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 -0.0015 at 0.0840 with 2,622,518 shares trading hands.