UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): February 10, 2006
HEALTHRENU MEDICAL, INC.
(Exact name of registrant as specified in its charter)
Nevada 000-21914 84-1022287
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
12777 Jones Road, Suite 481, Houston, TX 77070
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(Address of Principal Executive Offices) (Zip Code)
Our telephone number, including area code: (281) 890-2561
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Not Applicable
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of us under any of the following
provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Section 3 - Securities and Trading Markets
Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or
Standard; Transfer of Listing.
On January 6, 2006, we were listed on the OTC Bulletin Board's ("OTCBB") List of
OTCBB Filing Delinquent Companies and our trading symbol was appended with an
"E" modifier because we were non-compliant with NASD Rule 6530 (the "Eligibility
Rule") for failure to timely file our Annual Report on Form 10-KSB for the
fiscal year ended September 30, 2005. We filed this Annual Report on February 2,
2006. We were subsequently removed from the List of OTCBB Filing Delinquent
Companies and the "E" modifier was removed from our trading symbol.
Item 3.02 Unregistered Sales of Equity Securities.
On February 10, 2006 and February 13, 2006, we closed on the sale of our
securities in a private placement. We sold 349 of our Units ("Units") in the
aggregate, including 210 of our units for $210,000 cash and 139 of our Units for
$139,000 cash on February 10, 2006 and February 13, 2006, respectively. Each
Unit consists of a secured convertible promissory note in the principal amount
of $1,000 (the "Notes") and eight warrants (the "Warrants") for each share of
our common stock issued upon conversion of the Notes. The per share exercise
prices of the Warrants equal:
o 100% of the conversion price of the Notes then in effect upon conversion
of the Notes by the stockholder from time to time for two warrants;
o 125% of such Note conversion price for three warrants; and
o 150% of such Note conversion price for three warrants.
The Notes are convertible at the election of the holder thereof, at any time
commencing from and after their date of issuance and for a period of five years
thereafter. The conversion price is equal to 80% of the Trading Price of our
common stock, as defined in the Notes, on the OTCBB for the 10 days immediately
preceding the day upon which we receive a conversion notice from the Noteholder.
The Notes are secured by all of our inventory and accounts receivable, which
security interest is subordinate to any security interests held by any purchase
money security interest holder, any bank or any financial institution which
requests a security interest in our assets for the purpose of financing our
operations or purchasing inventory. The Notes are entitled to receive 8% annual
interest payable in shares of our common stock. The Warrants are exercisable for
shares of our common stock at any time beginning on the date of conversion of
the Notes and ending on March 11, 2011 and are subject to adjustment for
anti-dilution purposes.
For the $210,000 of Units sold on February 10, 2006, the total offering price
and the total commissions paid to broker-dealers were $210,000 and $46,500,
respectively. For the $139,000 of Units sold on February 13, 2006, the total
offering price and the total commissions paid to broker-dealers were $139,000
and $20,850, respectively. Broker-dealer commissions consisted of:
o a commission of up to 12% of the gross offering proceeds raised by the
broker-dealer;
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o a non-accountable expense allowance of up to 3% of the gross offering
proceeds raised by the broker-dealer;
o warrants to purchase that number of shares of our common stock as equals
10% of the number of shares of common stock that would be issuable to
investors in the offering upon conversion of the Notes and exercise of the
Warrants assuming conversion of the Notes at each applicable closing date,
with an exercise price equal to 110% of the conversion price of the Notes
on such date, a term of five years and all other terms substantially the
same as those of the Warrants issuable to investors in the offering; and
o a due diligence and pre-marketing fee to cover the costs and expenses of
the broker-dealer's due diligence investigation and pre-marketing
activities on our behalf and legal fees of the broker-dealer for the
offering of up to $15,000.
Such fees were deducted from offering proceeds to the extent applicable.
Issuance of the securities was exempt from registration pursuant to Rule 506 of
Regulation D promulgated under Section 4(2) of the Securities Act. The Units
were sold to accredited investors in a private placement without the use of any
form of general solicitation or advertising. The underlying securities are
"restricted securities" subject to applicable limitations on resale.
Section 9 - Financial Statements and Exhibits
Item 9.01. Financial Statements and Exhibits.
(c) EXHIBITS
10.1 Form of 8% Secured Convertible Notes.
10.2 Form of Warrants.
10.3 Form of Security Agreement.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, we
have duly caused this report to be signed on our behalf by the undersigned
hereunto duly authorized.
Date: February 16, 2006
HEALTHRENU MEDICAL, INC.
(Registrant)
By: /s/ Robert W. Prokos
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Name: Robert W. Prokos
Title: President and Chief Executive Officer