On January 30, 2019, the Company held a Special Meeting in lieu of Annual Meeting of Stockholders, at which the stockholders approved all four nominees for the board of directors and all other proposals submitted to the stockholders, including the SCWorx acquisition and Series A Preferred Stock financing.

  

 

In January 2019, SCWorx provided Alliance MMA $215,000 of additional borrowings under the $1,250,000 note agreement. As of February 1, 2019, SCWorx provided the full $1,250,000 of borrowings. In connection with the closing of the SCWorx acquisition, described below, the SCWorx convertible notes were automatically converted by their terms into an aggregate 315,177 post-split adjusted shares of common stock which, along with the related warrants, were distributed to certain SCWorx investors at the direction of SCWorx.

 

 

In January 2019, the Company issued 550,000 shares of Series A Preferred Stock and related warrants due to investors, in connection with the closing on December 18, 2018 of the sale of Series A Preferred Stock Units in the aggregate face amount of $5,500,000. The Series A Preferred Stock is convertible into an aggregate of 1,447,368 post-split common shares (a post-split conversion price of $3.80 per share) and the related warrants are exercisable for an aggregate of 723,684 post-split common shares, at a post-split exercise price of $5.70 per share.

 

In addition, in January 2019, the Company issued 67,500 shares of Series A Preferred Stock and related warrants due to creditors, in satisfaction of indebtedness in the amount of approximately $676,000. The Series A Preferred Stock is convertible into an aggregate of 177,895 post-split common shares (a post-split conversion price of $3.80 per share) and the related warrants are exercisable for an aggregate of 88,948 post-split common shares, at a post-split exercise price of $5.70 per share.

 

 

On February 1, 2019 (“Closing Date”), the Company completed the acquisition of SCWorx Corp. in a stock for stock exchange transaction pursuant to the share exchange agreement, dated as of August 20, 2018, as amended by Amendment No. 1 thereto (the “Share Exchange Agreement” or “SEA”). Pursuant to the SEA, the Company acquired from the existing stockholders of SCWorx Corp. all the issued and outstanding shares of common stock of SCWorx Corp. (the “Acquisition”). In connection with the Acquisition, the Company effected a one-for-nineteen reverse stock split of its common stock and changed its name to SCWorx Corp. References to SCWorx herein refer to the company acquired by the Alliance MMA.

 

In connection with the Acquisition, the Company issued: 

 

 

       

After giving effect to the Company common stock issued in connection with the Acquisition (but before exercise of outstanding rights to acquire common stock), the Company had approximately 6,546,216 shares of common stock outstanding on a post-split adjusted basis.

 

The Company will file the 2017 and 2018 audited financial statements of SCWorx Corp., along with required pro-forma financial information, within 75 days of the closing of the Acquisition.

 

In connection with the closing of the Acquisition on February 1, 2019 and as a result of the issuance of the 5,263,158 (post-split adjusted) shares of the Company’s common stock, there was a change of control of the Company. Upon completion of the Acquisition, Marc S. Schessel, the majority stockholder of SCWorx, beneficially owned approximately 1,032,603 post-split adjusted shares of the Company’s common stock (15.8% of the issued and outstanding shares, not including shares which were issuable to Mr. Schessel under the SEA, the right to which was transferred by him and over which Mr. Schessel has neither voting nor investment control). Mr. Schessel was the controlling shareholder of SCWorx Corp. immediately prior to the Acquisition.

 

The SEA provided that SCWorx would have the right to designate the officers and directors of the Company upon completion of the Acquisition. As a result, effective as of the Closing Date, Messrs. Tracy, Gamberale and Watson resigned as directors of the Company and John Price resigned the office of President but will remain as Chief Financial Officer of SCWorx post-closing.

  

Immediately prior to their resignation as directors, the Board of Directors appointed the following individuals, designated by SCWorx Corp. pursuant to the SEA, to serve as directors and officers of the Company post-closing:

  

 

Charles K. Miller, who was appointed as a director in October 2018, remained as a director of the Company post-closing.  At the time of their respective appointments, the compensation of the officers and directors of the Company had not been agreed upon. On February 13, 2019, the Company’s Compensation Committee recommended, and its board of directors approved the compensation of the Company’s officers and directors as described below. The Company’s common stock closed at $6.49 per share on February 13, 2019, the grant date for all equity awards recognized in the consolidated financial statements.

  

In making all equity awards subject to vesting, including performance-based vesting, the Compensation Committee endeavored to structure management’s equity awards so as to align management’s interests with the stockholders’ interest in long term value creation.

  

  

The board of directors also approved the form of employment agreement for each of Messrs. Schessel and Price.

 

 

 

On February 13, 2019, the SCWorx Corp.’s Board of Directors also approved management’s request to retain Joseph Gamberale, as a Consultant.

 

Gamberale has over 25 years’ experience in the financial services and capital markets sectors. Mr. Gamberale’ Agreement will have a term of two years, subject to earlier termination. Under the Agreement, Mr. Gamberale’s responsibilities will include overseeing the creation, development and implementation of the Company’s Investor Relations program, including introductions to high net worth individuals and institutions, the dissemination of investor related information, road show plans, equity conference presentations, and all other investor relations activities. Additionally Mr. Gamberale will be required to introduce SCWorx’ s service platform to health care institutions.

 

Mr. Gamberale will receive a combination of cash and equity compensation for his services. In making all of Mr. Gamberale’ equity awards subject to vesting, including performance-based vesting, the Board of Directors endeavored to structure such awards so as to align Mr. Gamberale’ interests with the stockholders’ interest in long term value creation.

  

Mr. Gamberale compensation will be as follows: