Item
1.01. Entry into a Material Definitive Agreement
On July 17,
2017, Rennova Health, Inc. (the “Company”) closed an offering of $4,136,862 aggregate principal amount of Original
Issue Discount Debentures due October 17, 2017 (the “Debentures”) and warrants to purchase an aggregate
of 2,120,000 shares of common stock (the “Warrants”) for consideration of $2,000,000 in cash and the exchange of
$1,902,700 aggregate principal amount of Original Issue Discount Debentures due September 22, 2017 issued by the Company on June
22, 2017. The offering was pursuant to the terms of the previously announced Securities Purchase Agreement, dated as of July
16, 2017 (the “Purchase Agreement”), between the Company and certain existing institutional investors of the
Company.
The Purchase Agreement
provides that, for a one-year period after the closing date, the purchasers have the right to participate in any issuance
by the Company of common stock or common stock equivalents for cash consideration, indebtedness or a combination of units thereof,
with certain exceptions (a “Subsequent Financing”). Also, until the date when the purchasers no longer hold any Debentures,
in the event the Company undertakes or enters into an agreement to undertake a Subsequent Financing, a purchaser may elect to
exchange all or some of its Debentures (but not including any Warrants) for any securities or units issued in such Subsequent
Financing on an $0.80 principal amount of Debenture for $1.00 new subscription amount basis based on the outstanding principal
amount of such Debenture (along with any accrued but unpaid interest, liquidated damages and other amounts owing thereon).
The
Purchase Agreement also provides that the Company shall hold a meeting of stockholders at the earliest practicable date to obtain stockholder approval of at least a 1-for-8 reverse split of the
common stock. Promptly following receipt of such stockholder approval, the Company shall cause the reverse split to occur. If
such stockholder approval is not obtained on or before September 20, 2017, it shall be an event of default under
the Debentures.
The Warrants are
exercisable into shares of the Company’s common stock at any time from and after six months from the closing date at an
exercise price of $0.375 per common share (subject to adjustment). The Warrants will terminate five years after they
become exercisable.
Holders
of Warrants are prohibited from exercising such Warrants for common stock if, as a result of such exercise, the holder,
together with its affiliates, would own more than 4.99% 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.
The Debentures
are guaranteed by substantially all of the subsidiaries of the Company pursuant to a Subsidiary Guarantee in favor of the
holders of the Debentures by the subsidiary guarantors party thereto. The securities issued under the Purchase Agreement
were issued in reliance on the exemptions from
registration
contained in Section 4(a)(2) of the Securities Act of 1933, as amended, and/or Rule 506 of Regulation D promulgated
thereunder as transactions by an issuer not involving any public offering or Section 3(a)(9) of the Securities Act.
The foregoing
description of the Purchase Agreement, the Debentures, the Warrants and the Subsidiary Guarantee are summaries, and
are qualified by reference to such documents, which are attached hereto as Exhibits 10.144, 10.145, 10.146 and 10.147,
respectively.