Note 20 – Subsequent Events

Conversions of Series N Convertible Redeemable Preferred Stock

Subsequent to December 31, 2020 and through March 31, 2021, the Company issued 435,082,000 shares of its common stock upon conversions of 4,177.52 shares of its Series N Preferred Stock with a stated value of $4.2 million.

Potential Common Stock as of March 31, 2021

The following table presents the dilutive effect of our various potential common shares as of March 31, 2021:

On August 13, 2020, Mr. Diamantis entered into the Voting Agreement with the Company, Mr. Lagan and Alcimede LLC (of which Mr. Lagan is the sole manager) pursuant to which Mr. Diamantis granted an irrevocable proxy to Mr. Lagan to vote the Series M Preferred Stock held by Mr. Diamantis, Mr. Diamantis has retained all other rights under the Series M Preferred Stock. Regardless of the number of shares of Series M Preferred Stock outstanding and so long as at least one share of Series M Preferred Stock is outstanding, the outstanding shares of Series M Preferred Stock shall have the number of votes, in the aggregate, equal to 51% of all votes entitled to be voted at any meeting of stockholders or action by written consent. This means that the holders of Series M Preferred Stock have sufficient votes, by themselves, to approve or defeat any proposal voted on by the Company’s stockholders, unless there is a supermajority required under applicable law or by agreement.

As a result of the Voting Agreement, as of the date of filing this report, the Company believes that it has the ability to ensure that it has and or can obtain sufficient authorized shares of its common stock to cover all potentially dilutive common shares outstanding.

Jellico Community Hospital Closure

On March 1, 2021, the Company closed Jellico Community Hospital, after the City of Jellico issued a 30-day termination notice for the lease of the building. It is expected that Jellico’s property and equipment will be transferred to the Company’s other medical facilities. The value of its intangible asset, which was a certificate of need valued at $250,000, was recorded as an asset impairment in the year ended December 31, 2020. There may be other costs and expenses associated with the closure of Jellico and, if so determined, any such amounts will be recorded as charges/expenses in the three months ended March 31, 2021.

AMSG & HTS Group

On March 5 2021, Rennova terminated discussions with TPT to merge its AMSG & HTS Group into InnovaQor. The parties had worked for a number of months to close on an agreement that was previously announced but unfortunately could not reach final terms on a number of closing items. TPT has on March 23 2021 changed the name of InnovaQor, Inc. to TPT Strategic, Inc. Rennova continues to consider other options for the separation of this group and expects to complete a transaction in the second quarter of 2021 to have it separated and trade under the InnovaQor name.

EPIC Reference Labs, Inc.

On March 10, 2021, Rennova terminated an agreement that it had entered into with TPT on August 6, 2020 for the purchase and sale of EPIC Reference Labs, Inc. The Company also terminated an Interim Management Agreement with TPT entered into on Aug 6, 2020 granting TPT an exclusive right and responsibility to undertake certain management and financial responsibility of EPIC Reference Labs, Inc., on our behalf and terminated all rights and approvals granted under letters dated November 2, 2020 and November 24, 2020 in reference to the Quicklab Application in partnership with EPIC Reference Labs, Inc.. Rennova intends to pursue whatever legal action necessary against TPT and TPT Medtech, LLC to recover money and damages owed from the breach of these agreements by TPT and to stop TPT from all activities that utilize or have been derived from their access to and use of Rennova owned confidential information.

Funding activities

On February 25, 2021, the Company entered into agreement with certain institutional investors for warrant prepayment promissory notes (the “February 25 Notes”) to the value of $550,000. The Company received proceeds of $500,000 from the Payees who may at their option apply all or any portion of the principle amount outstanding to the exercise of any common stock purchase warrants of the Company held by Payee. The February 25 Notes are unsecured and the maturity date of the February 25 Notes is twelve months from issuance. The February 25 Notes do not bear interest but an interest rate of 18% will be applied to the outstanding principle commencing 5 days after any event of default that results in the acceleration of the February 25 Notes.

On April 9 2021, the Company entered into agreement with certain institutional investors for warrant prepayment promissory notes (the “April 9 Notes”) to the value of $165,000. The Company received proceeds of $150,000 from the Payees who may at their option apply all or any portion of the principle amount outstanding to the exercise of any common stock purchase warrants of the Company held by Payee. The April 9 Notes are unsecured and the maturity date of the April 9 Notes is twelve months from issuance. The April 9 Notes do not bear interest but an interest rate of 18% will be applied to the outstanding principle commencing 5 days after any event of default that results in the acceleration of the April 9 Notes.