Alliance MMA, Inc. (“Alliance” or the “Company”) was a sports media company formed in Delaware in February 2015. The Company completed its Initial Public Offering (“IPO”) in October 2016 and began to execute its initial business strategy to acquire regional Mixed Material Arts (“MMA”) promotions to form a professional MMA fight league. A total of ten regional MMA promotions were acquired. Additionally, the Company acquired a ticketing software business focused on the MMA industry, a sports management business, and video production and distribution company to complement the MMA fight league.

		CFFC Promotions (“CFFC”);
		Hoosier Fight Club (“HFC”);
		COmbat GAmes MMA (“COGA”);
		Shogun Fights (“Shogun”);
		V3 Fights (“V3”);
		Iron Tiger Fight Series (“IT Fight Series” or “ITFS”);
		Fight Time Promotions (“Fight Time”);
		National Fighting Championships (“NFC”);
		Fight Club Orange County (“FCOC” or “Fight Club OC”); and
		Victory Fighting Championship (“Victory”).

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CageTix

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SuckerPunch Holdings, Inc. (“SuckerPunch”)

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Go Fight Net, Inc. (“GFL”)

 

On February 7, 2018, the Company’s Chief Executive Officer, Paul Danner, resigned his position but remained Chairman of the Board and Director through May 1, 2018. Also, on February 7, 2018, the Company terminated the employment of the Company’s President, Robert Haydak, and Chief Marketing Officer, James Byrne and named Robert Mazzeo as the Company’s acting Chief Executive Officer. Effective May 23, 2018, board of directors’ member, Renzo Gracie, resigned. On May 24, 2018, Robert Mazzeo resigned as Chief Executive Officer. On May 25, 2018, management and the Board of Directors committed the Company to an exit/disposal plan of the MMA promotion business because it did not believe the MMA business unit could generate sufficient operating cash flows to fund the ongoing operations. On June 6, 2018, the Company’s board of directors appointed John Price, the Company’s Chief Financial Officer, Co-President of the Company. On September 13, 2018, management and the board of directors extended the exit/disposal plan to the Sports Management business unit because it did not believe it could generate positive operating cash flows. On September 26, 2018 the Company entered an agreement to sell SuckerPunch to its former owners. The effective date of the sale transaction was July 1, 2018. On December 24, 2018, the Company and Co-President, Ira Rainess, agreed to terminate Mr. Rainess’ employment agreement.

The Company has been focused on its CageTix business and completing the acquisition of SCWorx Corp., which was closed 

 

 

the Company entered into a Securities Purchase Agreement with SCWorx Acquisition Corp. (n/k/a SCWorx Corp.) (“SCWorx”), as amended December 18, 2018 (“SPA”), under which it agreed to sell up to[59,387] shares The initial $750,000 tranche of the notes is convertible into shares of common stock at a conversion price of $0.3725 [$7.0775] and the related 503,356 [26,492] warrants have an exercise price of [$7.0775]. The conversion price on the $ convertible note was reduced to $ per share in January 2019. The remaining[$3.80] and [32,895] warrants [$5.70]. See Note 12–Subsequent Events. These notes automatically converted into Company common stock upon the closing of the SCWorx acquisition on February 1, 2019. 

  

between June 29, 2018 and October 16, aggregate [26,492] shares Each of the notes  have a one year term. Each of the warrants [$7.0775], a

On August 20, 2018, the Company entered into a Stock Exchange Agreement with SCWorx, as amended December 18, 2018 (“SEA”). Under the SEA, the Company agreed to purchase from the SCWorx shareholders all the issued and outstanding capital stock of SCWorx, in exchange for which the Company agreed to issue at the closing (i) 100,000,000 shares of Company common stock to the SCWorx stockholders and (ii) 190,000 Series A Preferred Stock Units ($million face value) (“Series A Preferred Units”) to an SCWorx creditor in satisfaction of approximately $1.9 million of indebtedness. The Series A Preferred Units are comprised of 190,000 shares of Series A preferred stock, convertible into shares of common stock at a conversion price of $0.20 [$3.80] per share, subject to adjustment, and warrants to purchase 4,750,000 [250,000] shares of common stock, with an exercise price of $0.30 [$5.70] per share, subject to adjustment. Upon consummation of the transaction on February 1, 2019, SCWorx is wholly owned by the Company.

 

Pursuant to the SPA, between November 16, 2018 and December 31, 2018, the Company sold SCWorx additional convertible notes in the aggregate principal amount of $275,000 and warrants to purchase 356,250 [18,750] shares of common stock, for an aggregate purchase price of $275,000. Each of the Notes bears interest at 10% annually and matures one year form the issue date. These warrants have an exercise price of $0.30 [$5.70], a term of five years and were vested upon grant. This brings the total amount funded by SCWorx to $1,035,000 as of December 31, 2018. These notes automatically converted into Company common stock upon the closing of the SCWorx acquisition on February 1, 2019. See Note 12–Subsequent Events.

 

On December 18, 2018, the Company closed $5.5 million in aggregate proceeds from the sale of Series A Preferred Units comprised of 550,000 shares of Series A preferred stock (face value $10 per share) and warrants to purchase 13,750,000 [723,684] shares of common stock. The face value of the Series A preferred stock will, upon stockholder approval of the sale of the Series A Preferred Units, be convertible into shares of common stock at a conversion price of $0.20 [$3.80] per share, subject to adjustment, and the warrants have an exercise price of $0.30 [$5.70] per share, subject to adjustment. In addition, the Company issued Series A Preferred Units, comprised of approximately 67,500 shares of Series A preferred stock ($675,000 aggregate face value) and warrants to purchase 1,687,500 [88,816] shares of common stock to Company creditors in satisfaction of approximately $675,000 of indebtedness.

 

The amount of cash raised from sale of Series A Preferred Stock Units was required to be kept in a reserve account pending the closing of the SCWorx Corp. acquisition. As a result, the Company has recognized restricted cash of $5,401,000 and preferred stock deposit of $5,501,000 in the accompanying consolidated balance sheet as of December 31, 2018.

 

In anticipation of the acquisition of SCWorx Corp., the Company filed an original listing application with the Nasdaq Capital Market to list the common stock of the combined company. On or about January 31, 2019, the Nasdaq approved the listing of the Company’s common stock (on a combined basis with SCWorx), with the result being that the Company’s common stock is now newly listed on the Nasdaq Capital Market.

 

On February 1, 2019, the Company completed the acquisition of SCWorx, changed its name to SCWorx Corp., changed its ticker symbol to “WORX”, and effected a one-for-nineteen reverse stock split of its common stock [bracketed amounts represent post-split adjusted shares or per share amounts].