UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(Amendment No. 1)
(Mark one)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2017
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______to______.
Commission File Number: 0-26824
RENNOVA HEALTH, INC.
(Exact name of registrant as specified in its charter)
Delaware | 68-0370244 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) | |
400 S. Australian Avenue, Suite 800 West Palm Beach, FL | 33401 | |
(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code:(561) 855-1626
Securities registered under Section 12(b) of the Act:
Title of Each Class | Name of Each Exchange on which Registered | |
Common Stock, $0.01 Par Value | OTCQB | |
Warrants to Purchase Common Stock, $0.01 Par Value | OTCQB |
Securities registered under Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. [ ] Yes [X] No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. [ ] Yes [X] No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X] Yes [ ] No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). [X] Yes [ ] No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one)
Large accelerated filer | [ ] | Accelerated filer | [ ] |
Non-accelerated filer | [ ] (Do not check if a smaller reporting company) | Smaller reporting company | [X] |
Emerging growth company | [ ] |
If an 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. [ ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). [ ] Yes [X] No
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter.
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of June 30, 2017 was $4,961,093.
As of April 1, 2018, the registrant had 500,000,000 shares of Common Stock outstanding.
Documents Incorporated by Reference:
None.
EXPLANATORY NOTE
This Annual Report on Form 10-K/A is being filed by Rennova Health, Inc. (the "Company") to amend the Annual Report on Form 10-K for the year ended December 31, 2017 filed by the Company with the Securities and Exchange Commission (the "SEC") on April 24, 2018 (the “Original Report”) to include the information required to be disclosed by Part III, Items 10 and 12-14 of Form 10-K. Except for Items 10, 12, 13 and 14 of Part III and Item 15 of Part IV, no other information included in the Original Report is changed by this amendment.
As required pursuant to the Securities Exchange Act of 1934, as amended, this Amendment also includes updated certifications from the Company’s Chief Executive Officer and Interim Chief Financial Officer as Exhibits 31.1 and 32.1.
TABLE OF CONTENTS
2 |
Item 10. Directors, Executive Officers and Corporate Governance.
The following table sets forth information with respect to persons who are currently serving as directors and executive officers of the Company.
Name | Age | Positions | ||
Seamus Lagan | 49 | President, Chief Executive Officer and Interim Chief Financial Officer and Director | ||
Dr. Kamran Ajami | 59 | Director | ||
John Beach | 56 | Director | ||
Gary L. Blum | 77 | Director | ||
Christopher E. Diamantis | 49 | Director | ||
Trevor Langley | 56 | Director |
All directors of the Company serve one year terms and hold office until the next annual meeting of stockholders and until their respective successors are duly elected and qualified.
Executive Officers’ and Directors’ Biographies
Seamus Lagan was appointed Chief Executive Officer and President and a director of the Company on November 2, 2015 and as Chief Executive Officer and a director of Medytox Solutions, Inc., a wholly-owned subsidiary of the Company (“Medytox”), effective September 15, 2014. Mr. Lagan served as Interim Chief Financial Officer of the Company from September 30, 2016 through May 24, 2017. He was again appointed Interim Chief Financial Officer after the resignation of Michael Pollack, effective October 13, 2017. Mr. Lagan has been, either individually or through Alcimede LLC (“Alcimede”), a consultant to Medytox since May 2011. Mr. Lagan has been a director of Alcimede since its formation in 2007. Alcimede is a privately-held, Delaware limited liability company which provides various consulting services, including management, organization, and financial consulting services. Mr. Lagan also currently serves, through Alcimede, as chief executive officer of the following subsidiaries of the Company: Medytox Diagnostics, Inc. (since February 2012), and Health Technology Solutions, Inc. (since June 2011) and as president of Medical Billing Choices, Inc. (since July 2013). From September 2008 through May 2011, Mr. Lagan was a private investor. In 2008, TecEnergy UK Limited (“TEC”), a waste management and alternative energy company in England and Wales, of which Mr. Lagan served as a director, was placed into administration to protect it from bankruptcy. The relevant taxing authorities in the United Kingdom alleged that the directors reduced the debt of TEC to its creditors at the expense of tax liabilities to the taxing authorities. There were no other allegations of wrongdoing, but based on such allegations, the taxing authorities sought to have each of the directors of TEC banned from acting as a director in the United Kingdom for a three-year period. At the time of such action, Mr. Lagan had significant health issues and did not defend himself. As a result, Mr. Lagan was banned in his absence from acting as a director of a United Kingdom company from October 8, 2010 until October 2015 (In the Matter of TecEnergy UK Limited and in the Matter of the Company Directors Disqualifications Act of 1986 between the Secretary of State for Business, Innovation and Skills and Seamus Lagan (Norwich County Court, from 2014 to 2015, UK, Claim No. 0NR00656)). Mr. Lagan graduated from Ballymena Technical College in Ireland in 1989.
Dr. Kamran Ajami has served as a director of the Company since April 9, 2017. He is a pathologist and, since February 2011, has been the Medical Director of the laboratories at West Side Regional Medical Center and Plantation General Hospital. Since 1997, he has also been Owner and Chief Executive Officer of Americana Cytopathology Associates, P.A. which supplies medical directors for laboratories.
John Beachhas conceived and managed entrepreneurial ventures related to the healthcare industry for three decades. Most recently, he was Chief Executive Officer of Accelerated Care Plus Corporation, the nation’s leading provider of integrated clinical rehabilitation programs for post-acute rehabilitation providers, from 2000 through December 2012. From December 2012 to March 2015, he was a private investor. He has been a director of Alana HealthCare, LLC, a post-acute care provider, since March 2014 and served as Co-Chief Executive Officer from March 2015 through December 2016. Since 2010, Mr. Beach has been the Chief Executive Officer of Next Steps, LLC, which provides consulting services to investment firms.
3 |
Gary L. Blumestablished the Law Offices of Gary L. Blum in 1986. Mr. Blum has served as counsel for a wide variety of closely-held and public companies for over three decades. Prior to becoming an attorney, he was a tenured professor of philosophy at the University of Nebraska, Omaha.
Christopher E. Diamantis has served as a director of the Company since November 2, 2015 and previously served as a director of Medytox from April 24, 2013 to November 2, 2015. Mr. Diamantis has served, since 1999, as Chairman and Chief Executive Officer of Integrated Financial Settlements, Inc., a structured settlement consulting firm in Tallahassee, Florida. He has also been, since April 2000, a director and managing partner of The Gabor Agency, Inc., a 65-year old Florida-based company specializing in investment and insurance planning for public employees and universities. In addition, since 2007, Mr. Diamantis has been a director and partner in Counsel Financial Services, Inc., a specialty financial firm catering to the needs of the legal community and the largest non-bank lender to law firms in the United States. He is a past member of the Board of Governors of the Florida State University College of Business and past president of the National Structured Settlements Trade Association.
Trevor Langley has served as a director of the Company since April 9, 2017. Since 2006, he has been the Owner and Managing Partner of Avanti Capital Group LLC/Avanti Partners, LLC (“Avanti”). Avanti assists micro, small and mid-cap publicly traded companies and those looking to become public by leveraging traditional and new communication technologies with a specialization in healthcare and alternative-energy markets. Avanti also provides comprehensive consulting services.
Family Relationships amongst Directors and Executive Officers
There are no family relationships between the executive officers and directors.
Audit Committee and Audit Committee Financial Expert
The purpose of the audit committee is to review the Company’s audited financial statements with management, review the performance of the Company’s independent registered public accountants, approve audit fees and fees for the preparation of the Company’s tax returns, review the Company’s internal accounting policies and internal control procedures and consider and appoint the Company’s independent registered public accountants. The audit committee has the authority to engage the services of outside experts and advisors as it deems necessary or appropriate to carry out its duties and responsibilities.
The audit committee charter is available on the Company’s website atwww.rennovahealth.com by selecting “Investors” and then “Corporate Governance” from the available options.
The audit committee of the Company consists of John Beach and Gary L. Blum and Dr. Kamran Ajami. Each member of the audit committee qualifies as “independent” for purposes of membership on audit committees pursuant to the rules and regulations of the SEC. In addition, the board of directors of the Company has determined that John Beach qualifies as an “audit committee financial expert” as defined by the rules and regulations of the SEC.
Code of Conduct
The Company has adopted a written code of conduct (the “Code”), which is applicable to the Board of Directors and officers of the Company, including, but not limited to the Company’s Chief Executive Officer, Chief Financial Officer, Controller and all persons performing similar functions to the foregoing officers of the Company. We intend to post amendments to or waivers from the Code (to the extent applicable to our Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer or Controller, or persons performing similar functions) on our website at www.rennovahealth.com. A copy of the Code will be provided to any person free of charge upon request by writing to Rennova Health, Inc., Attention: Secretary, 400 South Australian Avenue, Suite 800, West Palm Beach, Florida 33401.
4 |
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires that our directors, executive officers and persons who beneficially own 10% or more of our stock file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of our stock and our other equity securities. To our knowledge, based solely on a review of the copies of such reports furnished to us and written representations that no other reports were required, during the year ended December 31, 2017, our directors, executive officers and greater than 10% beneficial owners complied with all such applicable filing requirements, except for the untimely filing of (i) a Form 3 report by each of Dr. Ajami and Messrs. Langley, Beach and Blum with respect to his respective initial ownership of Rennova Health, Inc. securities; and (ii) one Form 4 report by Mr. Diamantis with respect to one transaction.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stock Matters.
The following table summarizes certain information regarding the beneficial ownership (as such term is defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of our outstanding Common Stock as of April 1, 2018 by (i) each person known by us to be the beneficial owner of more than 5% of the outstanding Common Stock, (ii) each of our directors, (iii) each of our executive officers, and (iv) all executive officers and directors as a group. Except as indicated in the footnotes below, the stockholders listed below possess sole voting and investment power with respect to their shares. The address of each of the following (other than Epizon Ltd., Sabby Healthcare Master Fund, Ltd. and Sabby Volatility Warrant Master Fund, Ltd.) is c/o Rennova Health, Inc., 400 S. Australian Avenue, Suite 800, West Palm Beach, Florida 33401. None of the following owns any Series F Convertible Preferred Stock.
Name of Beneficial Owner | No. of Shares of Common Stock Owned | Percentage of Ownership(1) | ||||||
Seamus Lagan | 26,693,825 | (2) | 5.34 | % | ||||
Dr. Kamran Ajami | 3,341,900 | (3) | * | |||||
John Beach | 3,333,333 | * | ||||||
Gary L. Blum | 3,333,333 | * | ||||||
Christopher E. Diamantis | 3,434,176 | (4) | * | |||||
Trevor Langley | 3,339,999 | * | ||||||
Michael Pollack | – | (5) | – | |||||
Epizon Ltd. | 8,638 | (6) | * | |||||
All Directors and Executive Officers as a Group (6 persons) | 43,476,566 | (7) | 8.69 | % | ||||
Sabby Healthcare Master Fund, Ltd. (8) | 49,950,000 | 9.99 | % | |||||
Sabby Volatility Warrant Master Fund, Ltd. (8) | 49,950,000 | 9.99 | % |
* | Less than one percent. |
(1) | Based on 500,000,000 shares of Common Stock issued and outstanding as of April 1, 2018, and additional shares deemed to be outstanding as to a particular person, in accordance with applicable rules of the Securities and Exchange Commission (the “SEC”). Beneficial ownership is determined in accordance with SEC rules to generally include shares of Common Stock subject to options or issuable upon conversion of convertible securities, and such shares are deemed outstanding for computing the percentage of the person holding such options or securities, but are not deemed outstanding for computing the percentage of any other person. |
5 |
(2) | Includes 26,680,098 shares of Common Stock and 9,445 stock options to purchase a like number of shares of Common Stock, owned of record by Mr. Lagan. Also includes 4,282 shares of Common Stock owned of record by Alcimede LLC, of which Mr. Lagan is the sole manager. |
(3) | Includes 3,341,281 shares of common stock and 619 stock options to purchase a like number of shares of common stock, owned of record by Dr. Ajami. |
(4) | Includes 3,344,032 shares of Common Stock, 670 stock options to purchase a like number of shares of Common Stock, and 89,474 warrants to purchase a like number of shares of Common Stock, owned of record by Mr. Diamantis. |
(5) | Mr. Pollack was appointed Interim Chief Financial Officer of the Company on May 24, 2017 and he served through his resignation effective October 13, 2017. |
(6) | All of the outstanding capital stock of Epizon Ltd. is owned by The Shanoven Trust, of which P. Wilhelm F. Toothe serves as trustee. Mr. Lagan is the settlor and Mr. Lagan and his family are the beneficiaries of The Shanoven Trust. Epizon Ltd. owns of record 8,638 shares of Common Stock. The address of Epizon Ltd. is Suite 104a, Saffrey Square, Bank Lane, P.O. Box N-9306, Nassau, Bahamas. |
(7) | Includes Messrs. Lagan, Diamantis, Beach, Blum and Langley and Dr. Ajami. Includes 43,376,358 shares of Common Stock, 10,734 stock options to purchase a like number of shares of Common Stock, and 89,474 warrants to purchase a like number of shares of Common Stock, owned by Messrs. Lagan, Diamantis, Beach, Blum and Langley and Dr. Ajami, as described in the above footnotes. |
(8) | Based on Amendment No. 1 to Schedule 13G filed with the Securities and Exchange Commission on January 9, 2018. The address of each of Sabby Healthcare Master Fund, Ltd. and Sabby Volatility Warrant Master Fund, Ltd. is c/o Ogier Fiduciary Services (Cayman) Limited, 89 Nexus Way, Camana Bay, Grand Cayman KY1-9007, Cayman Islands, This stockholder has indicated that Hal Mintz has voting and investment power over the shares held by it. This stockholder has indicated that Sabby Management, LLC serves as its investment manager, that Hal Mintz is the manager of Sabby Management, LLC and that each of Sabby Management, LLC and Hal Mintz disclaims beneficial ownership over these shares except to the extent of any pecuniary interest therein. The conversion of the Debentures, Series I-1 Preferred Stock and Series I-2 Preferred Stock and the exercise of the warrants held by these entities are subject to ownership blockers of 9.99% and 4.99%, respectively. |
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Alcimede, of which Mr. Lagan is the sole manager, was paid $0.4 million and $0.6 million for consulting fees pursuant to a consulting agreement for the years ended December 31, 2017 and 2016, respectively. On April 2, 2017, Alcimede agreed to a voluntary reduction in the monthly retainer payable by the Company from $31,250 to $20,833 for one year. In addition, Alcimede had advanced loans to the Company for the payment of certain operating expenses. The loans were non-interest bearing and were due on demand. On February 3, 2015, the Company borrowed $3,000,000 from Alcimede. The note has an interest rate of 6% and was originally due on February 2, 2016. In February 2016, Alcimede agreed to extend the maturity date of the loan to February 2, 2017 and the maturity date has since been extended to February 2, 2018. On June 29, 2015, Alcimede exercised options granted in October 2012 to purchase one million shares of the Company’s common stock at an exercise price of $2.50 per share. The loan outstanding was reduced in satisfaction of the aggregate exercise price of $2,500,000. In August 2016, a portion of the remaining $500,000 balance was repaid by the Company through the issuance of shares of common stock. In March 2017, the Company and Mr. Logan agreed that a payment made to Alcimede in the amount of $50,000 would be deducted from the outstanding balance of the note. As of April 1, 2018, the balance out standing on the note was $168,500.
Dr. Thomas Mendolia, the former Chief Executive Officer of the Company’s Laboratories and at the time a principal stockholder, was reimbursed $26,765 for certain operating expenses and asset purchases paid by Dr. Mendolia on the Company’s behalf in the year ended December 31, 2016
On August 1, 2015, Medytox entered into a non-exclusive consulting agreement with Monarch Capital LLC (“Monarch”). Michael Goldberg, at the time a director of Medytox and a director of the Company through April 24, 2017, is the Managing Director of Monarch. Under this agreement, Monarch provided business and financial advice. The original term of the agreement was through August 31, 2016, and was subject to automatic renewal for an additional one year unless Medytox provided the consultant with 180 days’ prior written notice of its intent not to renew. The agreement expired on August 31, 2017. Monarch was paid approximately $139,000 and $150,000 for consulting fees pursuant to this agreement for the years ended December 31, 2017 and 2016, respectively.
6 |
In the fourth quarter of 2015, the Company borrowed $1,600,000 from Mr. Diamantis, at the time a director of Medytox and currently a director of the Company, which was due, along with $100,000 of interest, on January 7, 2016. These amounts were repaid by the Company in January 2016. During the year ended December 31, 2016, the Company received additional short-term advances from Mr. Diamantis payable on demand and aggregating $5.7 million, all of which was repaid prior to December 31, 2016. In connection with these advances, the Company agreed to pay Mr. Diamantis interest in the amount of $0.4 million, as well as interest at 10% per annum for all advances made subsequent to September 30, 2016, and these amounts are reflected in accrued expenses in the consolidated balance sheet as of December 31, 2016. In January and February 2017, the Company received advances aggregating $3.3 million from Mr. Diamantis. The advances, along with $0.5 million of accrued interest, were due on demand, bearing interest at 10% per annum. The Company used the advances to pay the purchase price of the assets related to Scott County Community Hospital and for general corporate purposes. The Company repaid these amounts in full on March 21, 2017.
Subsequent to March 21, 2017, Mr. Diamantis made advances to the Company aggregating $1,630,000 through December 31, 2017, of which $670,000 was repaid during the year. The advances bear interest at 10% and are repayable on demand.
During the year ended December 31, 2016, the Company received short-term advances from three principal stockholders aggregating approximately $1.2 million, $1.1 million of which was repaid during the year. The Company repaid the remaining amount during the year ended December 31, 2017. The Company during the year then reborrowed $75,000 from a principal stockholder, which was repaid as of December 31, 2017.
During the second quarter of 2016, the Company received a short-term advance from Jason Adams, then the Company’s Chief Financial Officer, in the amount of $50,000, all of which was repaid during the second quarter.
On December 31, 2014, the Company borrowed $3,000,000 (the “D&D Debenture”) from D&D Funding II, LLC (“D&D”). Mr. Diamantis is the manager and 50% owner of D&D. In January 2016, the Company temporarily repaid $3,000,000 of the amounts due under the D&D Debenture. In addition to the principal amount, the Company paid $300,000 in cash for interest for 2015. In March 2016, the Company re-borrowed 100% of the principal amount repaid in January 2016. In April 2016, the Company repaid $2,250,000 of the amount outstanding under the D&D Debenture from proceeds of the accounts receivable transaction discussed below, leaving an outstanding balance on the D&D Debenture of $750,000 as of June 30, 2016, all of which was repaid in July 2016.
On March 31, 2016, the Company entered into an agreement to pledge certain of its accounts receivable as collateral against a prepaid forward purchase contract. The receivables had an estimated collectable value of $8,700,000 and had been adjusted down to approximately $4,300,000 on the Company’s balance sheet at March 31, 2016 and $0 as of December 31, 2017. The consideration received was $5,000,000. In exchange for the consideration received, the counterparty received the right to: (i) a 20% per annum investment return from the Company on the consideration, with a minimum repayment term of six months and minimum return of $500,000, (ii) all payments recovered from the accounts receivable up to $5,250,000, if paid in full within six months, or $5,500,000, if not paid in full within six months, and (iii) 20% of all payments of the accounts receivable in excess of amounts received in (i) and (ii). On March 31, 2017, to the extent that the counterparty had not been paid $6,000,000, the Company was required to pay the difference. Mr. Diamantis has guaranteed the Company’s payment obligation of up to $6,000,000. For providing the guarantee, and to the extent that the counterparty receives amounts payable under clause (ii) above exceeding $5,000,000, Mr. Diamantis will be paid a fee by the counterparty equal to the amount by which the amount received under clause (ii) above exceeds $5,000,000 ($250,000 or $500,000, depending on the timing of payment). In addition, the Company agreed to pay Mr. Diamantis $0.5 million in connection with his providing the guarantee. This amount was settled in August 2016 with the issuance of shares of the Company’s common stock and warrants to purchase shares of common stock as discussed below. On March 24, 2017, the Company, the counterparty and Mr. Diamantis, as guarantor, entered into an amendment to extend the Company’s obligation to March 31, 2018. Also, what the counterparty is to receive was amended to equal (a) the $5,000,000 purchase price plus a 20% per annum investment return thereon, plus (b) $500,000, plus (c) the product of (i) the proceeds received from the accounts receivable, minus the amount set forth in clauses (a) and (b), multiplied by (ii) 40%. In connection with the extension, the counterparty received a fee of $1,000,000. As of December 31, 2017, the Company has accrued $2.3 million for the counterparty’s required investment return, which is reflected in accrued expenses in the consolidated balance sheet, and $7.3 million was due to the counterparty on December 31, 2017. On April 2, 2018, the Company, the counterparty, and Mr. Diamantis, as guarantor, entered into a second amendment to extend further the Company’s obligation to May 30, 2018. In connection with this further extension, the counterparty received a fee of $100,000. To the extent the Company satisfies its obligation to the counterparty prior to May 30, 2018, the $100,000 fee will be reduced pro rata and the reduced portion shall be refunded to the Company. No funds have been paid to date to the counterparty in connection with the accounts receivable. The Company does not have the financial resources to repay this obligation.
7 |
During the year ended December 31, 2017, the Company exchanged an aggregate $2.23 million of indebtedness and other obligations to Mr. Diamantis, Epizon Ltd., Francisco Roca, III, Steven Sramowicz, Dr. Thomas Mendolia, Monarch, Robert Lee and Dr. Paul Billings, all related parties of the Company, for an aggregate of 12,815 shares of common stock and warrants to purchase 55,092,381 shares of common stock. At December 31, 2017, these warrants have an exercise price of $0.276 per share, which reflects the effect of dilutive issuances of common stock made during 2017. The exercise price is subject to additional adjustment for future dilutive issuances. The warrants are immediately exercisable and have a five-year term. The issuances of the shares of common stock and warrants were exempt from the registration requirements of the Securities Act of 1933, as amended, in accordance with Section 4(a)(2) thereof, as a transaction by an issuer not involving any public offering.
Director Independence
The Board of Directors has affirmatively determined that each of Dr. Kamran Ajami, John Beach, Gary L. Blum and Trevor Langley is an “independent director” under applicable rules. No director qualifies as independent unless the Board affirmatively determines that the director does not have a material relationship with the Company that would interfere with the exercise of independent judgement.
Item 14. Principal Accounting Fees and Services.
On March 23, 2016, the Company’s Audit Committee approved the dismissal of Burr, Pilger & Mayer LLP (“BPM”) as the Company’s independent registered public accounting firm, effective March 23, 2016. Also, on March 23, 2016, the Company’s Audit Committee approved the engagement of Green & Company, CPAs (“Green & Company”) as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2016. The engagement of Green & Company was effective March 23, 2016. Green & Company also served as the Company’s independent registered public accounting firm for the fiscal year ended December 31, 2017. Below are the aggregate fees billed for audit, audit-related and tax services rendered by Green & Company during the years ended December 31, 2017 and December 31, 2016 (BPM did not render any services for the year ended December 31, 2016):
Description of Services: | Fiscal 2017 | Fiscal 2016 | ||||||
Audit | $ | 195,000 | $ | 183,059 | ||||
Audit-Related | – | 30,800 | ||||||
Tax | – | – | ||||||
All Other | – | – | ||||||
Total Fees | $ | 195,000 | $ | 213,859 |
Audit Fees
The aggregate fees billed by Green & Company for audit services related to the fiscal years ended December 31, 2017 and 2016 were $195,000 and $183,059, respectively.
Audit-Related Fees
The aggregate fees billed by Green & Company for audit-related services for the fiscal year ended December 31, 2016, which primarily pertain to fees associated with the Company’s filing and maintaining effective registration statements with the SEC, were $30,800.
All Other Fees
The Company incurred no other fees with its principal accountants.
Audit Committee Pre-Approval Policies
The Audit Committee has adopted a policy that requires the Audit Committee to approve all audit and permissible non-audit services to be provided by the independent auditors. The Audit Committee has established a general pre-approval policy for certain audit and non-audit services, up to a specified amount for each identified service that may be provided by the independent auditors. The Chairman of the Audit Committee may specifically approve any service within the pre-approved audit and non-audit service category if the fees for such service exceed the maximum set forth in the policy, as long as the excess fees are not reasonably expected to exceed $50,000. Any such approval by the Chairman must be reported to the Audit Committee at its next scheduled meeting. The general pre-approval fee levels for all services to be provided by the independent auditors are reviewed annually by the Audit Committee. The Audit Committee approved all services provided by Green & Company during 2017 and 2016.
8 |
Item 15. Exhibits, Financial Statement Schedules
Financial Statements
See Item 8. Financial Statements and Supplementary Data
Exhibits
See EXHIBIT INDEX.
9 |
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Rennova Health, Inc. | |
Date: April 30, 2018 | /s/ Seamus Lagan |
Seamus Lagan, Chief Executive Officer and Interim Chief Financial Officer |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature | Title | Date | ||
/s/ Seamus Lagan | Chief Executive Officer, Interim Chief Financial Officer and Director | April 30, 2018 | ||
Seamus Lagan | (principal executive officer and principal financial officer) | |||
/s/ Dr. Kamran Ajami | Director | April 30, 2018 | ||
Dr. Kamran Ajami | ||||
/s/ John Beach | Director | April 30, 2018 | ||
John Beach | ||||
/s/ Gary L. Blum | Director | April 30, 2018 | ||
Gary L. Blum | ||||
/s/ Christopher Diamantis | Director | April 30, 2018 | ||
Christopher Diamantis | ||||
/s/ Trevor Langley | Director | April 30, 2018 | ||
Trevor Langley |
10 |
EXHIBIT INDEX
11 |
12 |
13 |
14 |
15 |
16 |
17 |
18 |
19 |
20 |
21 |
22 |
23 |
21 | List of Subsidiaries of the Registrant (incorporated by reference to Exhibit 21 to the Company’s Annual Report on Form 10-K filed with the SEC on April 24, 2018). |
31.1 | Section 302 Certification of the Chief Executive Officer and Interim Chief Financial Officer (2) |
32.1 | Section 906 Certification of the Chief Executive Officer and Interim Chief Financial Officer (3) |
101.INS | XBRL Instance Document. (4) |
101.SCH | XBRL Taxonomy Extension Schema Document. (4) |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. (4) |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. (4) |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document. (4) |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. (4) |
24 |
(1) | The exhibits to the Agreement and Plan of Merger have been omitted from this filing pursuant to Item 601(b)(2) of Regulation S-K. Rennova Health, Inc. will furnish copies of any such schedules and exhibits to the U.S. Securities and Exchange Commission upon request. |
(2) | Filed herewith |
(3) | Furnished herewith |
(4) | Filed as an exhibit to the Company’s Annual Report on Form 10-K filed with the SEC on April 24, 2018 and incorporated herein by reference. |
** | Management contract for compensatory plan or arrangement. |
25 |