Rennova Health (RNVA) Applies for 180-Day Nasdaq Listing Extension Following Recent Equity-Enhancing Actions

September 13, 2016 8:12 AM EDT
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Rennova Health (NASDAQ: RNVA) disclosed the following in a U.S. SEC filing on Monday night:

Item 8.01. Other Events.

As previously disclosed in its Form 8-K, filed on March 22, 2016, Rennova Health, Inc. (the "Company") was notified by the Nasdaq on March 16, 2016 that the bid price of the Company's common stock closed below the minimum $1.00 share requirement for continued inclusion under Nasdaq Rule 5550(a)(2) (the "Rule"). In accordance with Nasdaq Rule 5810(c)(3)(A), the Company had 180 calendar days, or until September 12, 2016, to regain compliance. If the Company did not regain compliance by September 12, 2016, an additional 180 days may be granted to regain compliance, so long as the Company meets the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market (except for the bid price requirement). One of these initial listing criteria is that the Company have stockholders' equity of at least $5,000,000. In its Form 10-Q for the quarter ended June 30, 2016, the Company reported a stockholders' deficit of $10,937,320 as of June 30, 2016.

Since June 30, 2016, the Company has entered into a number of transactions that have had the effect of increasing its stockholders' equity.

As previously reported, on July 19, 2016 the Company closed a public offering of its equity securities, whereby the Company issued 19,115,000 shares of its common stock and warrants to purchase an additional 19,418,633 shares of its common stock and received net proceeds of approximately $7,300,000. Also on July 19, 2016, the Company consummated Exchange Agreements with the holders of the Company's Series C Convertible Preferred Stock and the holders of the Company's 6,451,613 warrants to purchase shares of common stock issued December 30, 2015 (the "December 2015 Warrants") to exchange such securities for shares of newly-authorized Series G Convertible Preferred Stock with a stated value of $1,000 per share and new warrants to purchase shares of common stock (the "Exchange"). In the Exchange, all of the 8,740 outstanding shares of Series C Convertible Preferred Stock and all of the December 2015 Warrants were exchanged for 13,783 shares of Series G Convertible Preferred Stock and new warrants to purchase 10,249,517 shares of the Company's common stock. The Company had incurred a derivative liability relating to the December 2015 Warrants, which was reclassified into stockholders’ equity as a result of the Exchange.

As of June 30, 2016, the Company owed $750,000 pursuant to the terms of a convertible debenture, dated December 31, 2014, to D&D Funding II, LLC (the "D&D Debenture"). The D&D Debenture was fully paid off by the Company on July 27, 2016 and the remaining derivative liability associated with the D&D Debenture as of that date was reclassified into stockholders’ equity.

In addition, on August 5, 2016, the Company exchanged an aggregate of approximately $2,100,000 of indebtedness and other obligations to various related parties for an aggregate of 5,544,441 shares of common stock and warrants to purchase 3,123,313 shares of common stock.

All of the foregoing transactions increased the Company's stockholders' equity. We believe that, as of the date of this report, we have in excess of the required stockholders' equity to satisfy The Nasdaq Capital Market's stockholders' equity initial listing standard, on an as adjusted basis. The Company has determined that it already complies with the remaining criteria. As a result, the Company has requested that Nasdaq grant it an additional 180 days to regain compliance with the $1.00 share requirement for continued inclusion under the Rule.



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