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): July 21, 2006
INNOVA
HOLDINGS, INC.
(Exact
name of registrant as specified in its charter)
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Delaware
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000-33231
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95-4868120
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(State
or other jurisdiction
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(Commission
File Number)
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(IRS
Employer
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of
incorporation)
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Identification
No.)
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17105
San Carlos Boulevard, Suite A6151, Fort Myers, Florida 33931
(Address
of principal executive offices and Zip Code)
Registrant's
telephone number, including area code (239) 466-0488
Copies
to:
Gregory
Sichenzia, Esq.
Eric
A.
Pinero, Esq.
Sichenzia
Ross Friedman Ference LLP
1065
Avenue of the Americas
New
York,
New York 10018
Phone:
(212) 930-9700
Fax:
(212) 930-9725
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement
communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
1.01 Entry into a Material Definitive Agreement.
On
July
21, 2006, Innova Holdings, Inc. (the "Company") consummated a Securities
Purchase Agreement (the "Purchase Agreement") dated July 21, 2006 with Cornell
Capital Partners L.P. ("Cornell") providing for the sale by the Company to
Cornell of its 10% secured convertible debentures in the aggregate principal
amount of $2,825,000 (the "Debentures") of which $1,250,000 was advanced
immediately. The second installment of $575,000 will be advanced on the date
of
the filing by the Company with the Securities and Exchange Commission (the
"Commission") of the Registration Statement (as defined below). The last
installment of $1,000,000 will be advanced three business days after the date
the Registration Statement is declared effective by the Commission.
The
Debentures mature on the third anniversary of the date of issuance (the
"Maturity Date"). The holder of the Debentures may convert at any time amounts
outstanding under the Debentures into shares of common stock of the Company
(the
"Common Stock") at a fixed conversion price per share equal to $0.04 (the
“Conversion Price”). Cornell has agreed not to short any of the shares of Common
Stock. The Company's obligations under the Purchase Agreement are secured by
substantially all of the Company's, and its wholly owned subsidiary’s (Coroware
Technologies, Inc.) assets.
Under
the
Purchase Agreement, the Company also issued to Cornell five-year warrants to
purchase 10,000,000 and 15,000,000 shares of Common Stock at a price equal
to
$0.05 and $0.10, respectively, together with three-year warrants to purchase
23,000,000, 20,000,000 and 25,000,000 shares of Common Stock at a price equal
to
$0.025, $0.065 and $0.075, respectively (collectively, the "Warrants").
In
connection with the Purchase Agreement, the Company also entered into a
registration rights agreement with Cornell (the "Registration Rights Agreement")
providing for the filing of a registration statement (the "Registration
Statement") with the Securities and Exchange Commission registering the Common
Stock issuable upon conversion of the Debentures and exercise of the Warrants.
The Company is obligated to use its best efforts to cause the Registration
Statement to be filed no later than 30 days after the closing date. In the
event
of a default of its obligations under the Registration Rights Agreement,
including its agreement to file the Registration Statement with the Commission
no later than 30 days after the closing date, or if the Registration Statement
is not declared effective within 120 days after the closing date, it is required
to pay to Cornell, as liquidated damages, for each month that the registration
statement has not been filed or declared effective, as the case may be, either
a
cash amount or shares of our common stock equal to 2% of the liquidated value
of
the Debentures.
The
Company claims an exemption from the registration requirements of the Act for
the private placement of these securities pursuant to Section 4(2) of the Act
and/or Regulation D promulgated thereunder since, among other things, the
transaction did not involve a public offering, Cornell is an accredited investor
and/or qualified institutional buyer, Cornell had access to information about
the Company and its investment, Cornell took the securities for investment
and
not resale, and the Company took appropriate measures to restrict the transfer
of the securities.
On
July
25, 2006, the Company issued a press release announcing the entry into the
Securities Purchase Agreement with Cornell, a copy of which is attached hereto
as Exhibit 99.1.
In
accordance with General Instruction B.2 of Form 8-K, the information in this
Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to
be
“filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), or otherwise subject to the liability of that
section, and shall not be incorporated by reference into any registration
statement or other document filed under the Act or the Exchange Act, except
as
shall be expressly set forth by specific reference in such filing.
Item
1.02 Termination of a Material Definitive Agreement.
On
July
21, 2006, the Company terminated the Standby Equity Distribution Agreement
(the
“SEDA”) dated June 14, 2005 with Cornell, together with all of the definitive
agreements related thereto. In addition, on July 21, 2006 Cornell agreed to
terminate the promissory note in the remaining principal amount of $80,000
in
exchange for the Company’s issuance of 4,848,500 shares of Common Stock to
Cornell.
See
Item
1.01 above.
See
Item
1.01 above.
Item
9.01 Financial Statements and Exhibits.
| (a) |
Financial
statements of business
acquired.
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Not
applicable.
| (b) |
Pro
forma financial
information.
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Not
applicable.
| Exhibit
Number
|
|
Description |
| 10.1 |
|
Convertible Debenture dated July 21,
2006 |
| 10.2 |
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Form of $0.05 Warrant |
| 10.3 |
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Form of $0.10 Warrant |
| 10.4 |
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Form of $0.025 Warrant |
| 10.5 |
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Form of $0.065 Warrant |
| 10.6 |
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Form of $0.075 Warrant |
| 10.7 |
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Securities Purchase Agreement dated
July 21,
2006 between theCompany
and Cornell |
| 10.8 |
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Investor Registration Rights Agreement
dated
July 21, 2006 between the Company and Cornell |
| 10.9 |
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Security Agreement dated July 21, 2006
by and
between the Company
and Cornell |
| 10.10 |
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Subsidiary Security Agreement dated
July 21,
2006 by and between Coroware Technologies, Inc. and Cornell |
| 99.1 |
|
Press
Release of Innova Holdings, Inc. dated July 25,
2006. |
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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INNOVA
HOLDINGS, INC. |
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| Date:
July 25, 2006 |
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/s/ Walter
K.
Weisel |
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Walter
K. Weisel |
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Chief
Executive Officer |