Annual report [Section 13 and 15(d), not S-K Item 405]

Stockholders??? Equity

v3.25.1
Stockholders’ Equity
12 Months Ended
Dec. 31, 2024
Stockholders’ Equity [Abstract]  
Stockholders’ Equity

Note 9. Stockholders’ Equity

 

Authorized Shares

 

The Company has 45,000,000 Common shares authorized and 5,000,000 preferred shares, of which 900,000 have been designated Series A convertible preferred shares and have been authorized with a par value of $0.001 per share.

 

On October 6, 2023, following stockholder approval at the Company’s annual meeting, the Company amended its certificate of incorporation to implement a 1 for 15 reverse split of its common stock. The effect of the reverse stock split was to combine every 15 shares of outstanding common stock into one share of common stock. The reverse stock split was effective at the opening of the trading day on October 11, 2023. The effects of the reverse stock split have been reflected in this Annual report on form 10/K for all periods presented.

 

Issuance of Shares for Vested Restricted Stock Units

 

March 27, 2024, the Company issued 1,667 shares of common stock to a holder of fully vested restricted stock units.

 

Issuance of Shares as Settlement of Accounts Payable

 

Between February 6, 2024 and July 11, 2024, the Company issued an aggregate 130,039 shares of common stock in full settlement of $239,815 of accounts payable. The shares had fair values ranging from $1.20 to $2.65 per share.

 

On October 24, 2024, the Company issued 27,600 shares of common stock in full settlement of $32,016 of accounts payable. The shares had a fair value of $1.16 per share.

 

Issuance of Shares for Legal Settlements

 

On May 30, 2024, the Company issued 37,500 shares of common stock valued at $87,600 or $2.34 per share to fulfill its obligation under a previous legal settlement. See Note 8. Commitments and Contingencies for further information.

 

On July 15, 2024, the Company issued 38,052 shares of common stock valued at $53,653 or $1.41 per share to settle a potential legal claim.

 

On July 18, 2024, the Company issued 159,776 shares of common stock valued at $218,094 or $1.36 per share as partial fulfillment of its obligation under a previous legal settlement. See Note 8. Commitments and Contingencies for further information.

 

Issuance of Shares and Warrants for Stock Purchase Agreements

 

Between November 18, 2024 and November 19, 2024, SCWorx Corp. entered into a Securities Purchase Agreement (“SPA”) with certain accredited investors (the “Investors”), and, pursuant to the SPA, sold to the Investors an aggregate 232,558 shares of its common stock and warrants to acquire up to an aggregate 232,558 additional shares of the Company’s common stock for gross proceeds of $200,000. The exercise price of the warrants is $0.86 per share, subject to certain adjustments.

Warrants issued in conjunction with loans payable

 

On July 15, 2024, the Company issued warrants to purchase an aggregate 4,887,118 shares of the Company’s common stock at exercise prices ranging from $1.43 to $1.573 per share in conjunction with a convertible note issuance, see Note 4. Loans Payable. The warrants were valued at $6,163,572 using the Black-Scholes pricing model.  The Company has recognized $973,200 of this value as a discount to the associated notes.

 

The Company has classified the warrants as having Level 2 inputs, and has used the Black-Scholes option-pricing model to value the warrants.

 

The fair values at the commitment date for the warrants were based upon the following management assumptions as of the date of issuance:

 

    Issuance
date
 
Risk-free interest rate     1.93 %
Expected dividend yield    
-
%
Expected volatility     144 %
Term      5 years  
Fair value of common stock   $ 1.41  

 

Stock Incentive Plan

 

The number of shares of the Company’s common stock that are issuable pursuant to warrant and stock option grants with time-based vesting as of and for the year ended December 31, 2024 are:

 

    Warrant Grants     Stock Option Grants     Restricted
Stock Units
 
    Number of
shares
subject to
warrants
    Weighted-
average
exercise price per
share
    Number of
shares
subject to
options
    Weighted-
average
exercise price per
share
    Number of
shares
subject to
restricted
stock units
 
Balance at December 31, 2023     11,394     $ 58.72       3,333     $ 39.60       165,663  
Granted     8,916,697       0.86       -       -       151,290  
Exercised     -       -       -       -       (152,957 )
Cancelled/Expired     (2,293 )     53.64       (3,333 )     39.60       (41,722 )
Balance at December 31, 2024     8,925,798     $ 0.92       -     $ -       122,274  
Exercisable at December 31, 2024     8,925,798     $ 0.92       -     $ -       122,274  

 

The number of shares of the Company’s common stock that are issuable pursuant to warrant and stock option grants with time-based vesting as of and for the year ended December 31, 2023 are:

 

    Warrant Grants     Stock Option Grants     Restricted
Stock Units
 
    Number of
shares
subject to
warrants
    Weighted-
average
exercise price per
share
    Number of
shares
subject to
options
    Weighted-
average
exercise
price per
share
    Number of
shares
subject to
restricted
stock units
 
Balance at December 31, 2022     104,515     $ 20.25       7,891     $ 48.75       160,653  
Granted    
-
     
-
     
-
     
-
      95,624  
Exercised     (54,872 )     9.75      
-
     
-
      (86,003 )
Cancelled/Expired     (38,249 )     23.73       (4,558 )     55.43       (4,611 )
Balance at December 31, 2023     11,394     $ 58.72       3,333     $ 39.60       165,663  
Exercisable at December 31, 2023     11,394     $ 58.72       3,333     $ 39.60       165,663  

The Company has classified the warrant as having Level 2 inputs, and has used the Black-Scholes option-pricing model to value the warrant.

 

The Company’s outstanding warrants at December 31, 2024 are as follows:

 

Warrants Outstanding   Warrants Exercisable
Exercise Price Range   Number Outstanding     Weighted Average Remaining Contractual Life
(in years)
    Weighted
Average Exercise Price
    Number Exercisable   Weighted Average Exercise Price     Intrinsic Value  
$0.86– $60.00     8,925,798       4.55     $ 0.92     8,925,798   $ 0.95     $ 7,400,859  

 

As of December 31, 2024 and 2023, there was no unrecognized expense for unvested stock options and restricted stock awards.

 

Stock-based compensation expense for the years ended December 31, 2024 and 2023 was as follows:

 

    For the years ended  
    December 31,  
    2024     2023  
Stock-based compensation expense   $
    -
    $ 361,363  

 

Stock-based compensation expense categorized by the equity components for the years ended December 31, 2024 and 2023 is as follows:

 

    For the years ended  
    December 31,  
    2024     2023  
Common stock   $
       -
    $ 361,363  
Total   $
-
    $ 361,363  

 

Stock compensation is included on the consolidated statements of operations.