SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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) June 14, 2005
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INNOVA HOLDINGS, INC.
(Exact name of Registrant as specified in its charter)
Delaware 000-33231 95-4868120
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(State or other jurisdiction (Commission File number) (IRS Employer
of incorporation or organization) Identification No.)
17105 San Carlos Boulevard, Suite A6151, Fort Myers, Florida 33931
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(Address of principal executive offices) (Zip Code)
(239) 466-0488
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(Registrant's Telephone Number, Including Area Code)
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(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 for the registrant 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))
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SECTION 1-REGISTRANT'S BUSINESS AND OPERATIONS
Item 1.01 Entry into a Material Definitive Agreement.
On June 14, 2005, Innova Holdings, Inc. (the "Company") entered into a
Standby Equity Distribution Agreement (the "Equity Distribution Agreement") with
Cornell Capital Partners, LP ("Cornell"). Under the Equity Distribution
Agreement, the Company may issue and sell to Cornell common stock for a total
purchase price of up to $10,000,000 over a period of up to twenty four (24)
months. The purchase price for the shares is equal to 96% of their market price,
which is defined in the Equity Distribution Agreement as the lowest volume
weighted average price of the common stock during the five trading days
following the date notice is given by the Company that it desires an advance of
funds. Cornell is paid a fee equal to 5% of each advance, which is retained by
Cornell from each advance. The amount of each advance is subject to an aggregate
maximum advance amount of $400,000, with no advance occurring within five
trading days of a prior advance. The Company will pay a structuring fee of $500
for each advance made under the Equity Distribution Agreement. The Company
agreed to file a registration statement with the Securities and Exchange
Commission ("SEC") that registers for resale the common stock that will be
issued to Cornell under the Equity Distribution Agreement. No advance of funds
will be made under the Equity Distribution Agreement until the registration
statement is declared effective by the SEC.
In connection with the transaction, Cornell received a one-time
commitment fee of 2,608,696 restricted shares of the Company's common stock,
equal to approximately $90,000 based on the Company's stock price on May 4,
2005. These shares will be registered for resale in the registration statement
for the common stock to be issued under the Equity Distribution Agreement. The
Company also issued to Cornell its promissory note for $300,000. The principal
of the note is payable in three $100,000 installments due on the 30th, 60th and
90th days following the date the registration statement for the Cornell shares
is declared effective. The promissory note does not bear interest except in the
event of a default. The Company also paid $20,000 in cash to Cornell and its
affiliates for structuring and due diligence fees.
On June 14, 2005, the Company entered into a Placement Agent Agreement
with Moniter Capital Inc. (the "Placement Agent"), a registered broker-dealer,
to act as its exclusive placement agent in connection with the Equity
Distribution Agreement. The Placement Agent will advise the Company regarding
the Equity Distribution Agreement. Pursuant to the Placement Agent Agreement,
the Company paid a one-time placement agent fee of 289,855 restricted shares of
common stock, equal to approximately $10,000 based on the Company's stock price
on May 4, 2005. These shares will be registered for resale in the registration
statement for the Cornell shares.
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SECTION 9-FINANCIAL STATEMENTS AND EXHIBITS
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits.
10.1 Standby Equity Distribution Agreement with Cornell Capital Partners, LP
dated June 14, 2005
10.2 Registration Rights with Cornell Capital Partners, LP dated June 14, 2005
10.3 Escrow Agreement with Cornell Capital Partners, LP and David Gonzalez,
Esq. dated June 14, 2005
10.4 Promissory Note for $300,000 issued to Cornell Capital Partners, LP dated
June 14, 2005
10.5 Placement Agent Agreement with Monitor Capital Inc. dated June 14, 2005
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
INNOVA HOLDINGS, INC.
Date: June 15, 2005 By: /s/ Walter K. Weisel
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Walter K. Weisel
Chairman and Chief Executive Officer
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