Item
5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers
On
May 14, 2023, Epizon Limited, as the holder of all of the outstanding shares of Series A-1 Preferred Stock, representing 51% of the votes
entitled to be cast at a meeting of the stockholders of the Company or to vote by written consent, voted by written consent that the
following persons be elected as directors of the Company:
Gerard
Dab
Justin
Doherty
Francisco
Roca, III
Prior
to the written consent by Epizon Limited, the members of the Board of Directors were Gerard
Dab, Justin
Doherty and Sharon Hollis.
Thereafter,
also on May 14, 2023, the Board of Directors, by unanimous written consent, (i) elected Gerad Dab as Chairman of the Board and
Secretary of the Company; (ii) expanded the size of the Board to four members; (iii) elected Darrell Peterson as a director to fill
the vacancy; and (iv) named Mr. Peterson to be Interim President and Chief
Executive Officer of the Company. Mr. Peterson will receive a salary at the rate of $10,000 a
month.
Mr.
Peterson, 64, has had an extensive career in initiating and re-organizing private and public companies serving in capacities ranging
from Chief Executive Officer, Chief Financial Officer and consultant. Since January 2021, Mr. Peterson has been CEO and CFO of
Galenfeha, Inc., which is a consulting firm for small cap companies. He served as Chief Financial Officer of Nexgen Enterprises,
Inc. from October 2018 to October 2022. Nexgen is a combination of closely-held companies. Mr. Peterson assisted in developing
accounting systems for each of the companies, including land surveying, the number two mortgage survey company in the State of
Florida at the time, automotive services, real estate acquisition, oil field services and logistics. He also headed all legal and
tax services during that period. Starting in late 2018, Nexgen grew from $4.5 million to $14.9 million in 2022. Mr. Peterson holds a
degree in accounting from Long Island University and started his career with the then Big 8 firm Peat Marwick, now
KPMG.
Mr.
Roca, 57, has founded and operated a number of businesses in the healthcare industry over the last 20 years, after previously spending
11 years working in the Public Defender’s Office of the 15th Judicial Circuit of Florida. His healthcare businesses
have included MRI centers and durable medical equipment providers. Mr. Roca was a founder and Vice President of Sales of Medytox Solutions,
Inc., the predecessor business of Rennova Health, Inc., from which the businesses of the Company evolved. At Medtox, he created and oversaw
a sales team that grew revenues from under $1 million a year in 2011 to 2012 to in excess of $50 million in 2014. Prior to Medytox, Mr.
Roca was the owner and Chief Marketing Officer of Sportscare Orthopedics, Inc., a supplier of orthopedic braces to doctors, clinics and
therapists. Mr. Roca holds a Bachelor of Sciences degree from Florida State University.
Item
5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
On
May 12, 2023, the Company filed a Certificate of Designation with the Secretary of State of the State of Nevada to authorize the issuance
of up to 500 shares of Series D Preferred Stock. The following is a summary of certain terms of the Series D Preferred Stock.
General.
The Company’s Board of Directors designated 500 shares of the 25,000,000 authorized shares of preferred stock as the Series D Preferred
Stock. Each share of the Series D Preferred Stock has a stated value of $100.
Voting
Rights. Except as provided by law, the holders of the Series D Preferred Stock shall have no voting rights.
Dividends.
Each holder of Series D Preferred Stock shall be entitled to receive as a dividend an amount equal to (a) the sum of (i) five percent
of the amount of gross sales in excess of $500,000 collected by the Company or any subsidiary (on a consolidated basis) in the ordinary
course of business during the month immediately preceding the month in which such dividend becomes payable, which amount shall not exceed
$25,000; (ii) ten percent of the amount of gross sales in excess of $1 million collected by the Company or any subsidiary (on a consolidated
basis) in the ordinary course of business during the month immediately preceding the month in which such dividend becomes payable, which
amount shall not exceed $100,000; and (iii) two and one-half percent of the amount of gross sales in excess of $2 million collected
by the Company or any subsidiary (on a consolidated basis) in the ordinary course of business during the month immediately preceding
the month in which such dividend becomes payable, multiplied by (b) a fraction, the numerator of which is the total number of shares
of Series D Preferred Stock held by such holder and the denominator of which is the total number of shares of Series D Preferred Stock
then outstanding. Such dividends shall be payable monthly on the last day of the month in arrears in cash out of any funds of the Company
legally available therefor. In the event any indebtedness or other agreement to which the Company is a party or otherwise bound limits
or prohibits the payment of the dividend in cash, any holder, in their sole discretion, may agree that such dividend payments be made
in common stock. Any dividend not paid on cash or common stock shall bear interest at the rate of 8% per annum. The Company shall not
declare, pay or set aside any dividends on shares of common stock (other than dividends payable solely in shares of common stock) if
any dividends on any shares of Series D Preferred Stock due and payable have not been paid.
Ranking.
The Series D Preferred Stock ranks, with respect to dividends and the distribution of assets upon the occurrence of a liquidation, asset
transfer or acquisition, (i) senior to the common stock of the Company; (ii) senior to any class or series of capital stock of the Company
afterwards created (unless such class or series of capital stock specifically, by its terms, ranks senior to or pari passu with the Series
D Preferred Stock); (iii) on parity with any class or series of capital stock of the Company afterwards created specifically ranking,
by its terms, on parity with the Series D Preferred Stock; (iv) junior to the Company’s Series A-1 Preferred
Stock, Series B-1 Convertible Redeemable Preferred Stock and Series C-1 Convertible Redeemable Preferred Stock; and (v) junior to any
class or series of capital stock afterwards created specifically ranking, by its terms, senior to the Series D Preferred Stock.
Conversion.
The Series D Preferred Stock is not convertible.
Liquidation.
Upon the liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, each holder of outstanding Series D
Preferred Stock shall be entitled to receive, and to be paid out of assets of the Company available for distribution to its stockholders,
before any payment or distribution shall be made on the common stock or any class of capital stock of the Company ranking junior to the
Series D Preferred Stock, an amount equal to 20% of the distributable assets of the Company multiplied by a fraction, the numerator of
which is the total number of shares of Series D Preferred Stock held by such holder and the denominator of which is the total number
of shares of Series D Preferred Stock then outstanding.
Asset
Transfers and Acquisitions. In the event that the Company or any entity of which the Company owns directly or indirectly a
majority of the issued and outstanding voting equity is the subject of an Acquisition or Asset Transfer (as such terms are
defined in the Certificate of Designation) then each holder of the Series D Preferred Stock shall be entitled to receive out of the
proceeds of such Acquisition or Asset Transfer the amount such holder would have been entitled to receive had the Company been
liquidated and the proceeds were distributable assets of the Company.
Transfer.
No holder may assign or transfer any shares of Series D Preferred Stock, with certain exceptions, without providing the other holders
and the Company a right of first offer.
Non-Competition.
The Company may cancel any shares of Series D Preferred Stock for no consideration if the holder at any time during the 36 months after
issuance of the shares breaches any restrictive covenant in any employment agreement or consulting agreement to which the holder and
Company (or any subsidiary) may be parties or directly or indirectly competes with the Company.
Call
Right of the Company. If the Company registers any of its equity securities under Section 12(b) of the Securities Exchange Act of
1934, as amended (or any successor provision), then the Company will have the right to elect to cause a holder to sell its shares of
Series D Preferred Stock for the consideration provided in the Certificate of Designation.
The
foregoing description of the Series D Preferred Stock does not purport to be complete and is qualified by reference to the Certificate
of Designation of the Series D Preferred Stock, a copy of which is filed as Exhibit 3.1 to this Current Report on Form 8-K and is incorporated
herein by reference.