SCWorx, Corp. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Fair value of financial instruments (Tables)

Fair value of financial instruments (Tables)

9 Months Ended

Sep. 30, 2019

Schedule of significant unobservable inputs

The following table presents information as of December 31, 2018 about significant unobservable inputs (Level 3) used in the valuation of assets measured at fair value on a recurring basis:


Financial Instrument	Fair Value		Valuation technique	Significant Unobservable inputs
Convertible notes receivable	$	837,317	Monte Carlo Simulation	Probability of conversion and interest rates on comparable financial instruments
Investment in warrants	$	67,000	Black-Scholes Option Pricing Model	Common stock volatility and discount

Schedule of assumptions used to measure the fair value

The assumptions used to measure the fair value of the convertible notes receivable as of original issuance date and as of December 31, 2018 were as follows:


	Issuance		December 31,
	Dates		2018
Risk-Free Interest Rate	2.41%-2.47	%	2.41	%
Probability of conversion into equity	50%-90	%	90	%
Expected Volatility	91.95	%	91.95	%
Term	.09-.59	years	.09	year

The assumptions used to measure the fair value of the warrants as of original issuance date and as of December 31, 2018 were as follows:


	Issuance			December 31,
	Date			2018
Risk-Free Interest Rate		2.47	%		2.41	%
Expected Dividend Yield		0	%		0	%
Expected Volatility		91.95	%		91.95	%
Term		5	years		5	years
Fair Market Value of Common Stock	$	0.3275		$	0.16

Schedule of balances and levels of the assets measured at fair value

The balances and levels of the assets measured at fair value on a recurring basis at December 31, 2018 are presented in the following table:


	Quoted
	prices
	in active		Significant
	markets for		other		Significant
	identical		observable		unobservable
	assets		inputs		inputs
	(level 1)		(level 2)		(level 3)

Financial assets:

Convertible notes receivable	$	—	$	—	$	837,317

Investment in warrants		—		—		67,000

Total	$	—	$	—	$	904,317

Summary of the changes in the Company's convertible notes receivable

A summary of the changes in the Company’s convertible notes receivable at fair value using significant unobservable inputs (Level 3) as of and for the nine months ended September 30, 2019 is as follows:


	2019
Convertible notes receivable, December 31, 2018	$	837,317
Notes issued (face value $215,000), at fair value		196,000
Increase in fair value		531,405
Conversion of notes into common stock		(1,564,722)
Investment in notes receivable, September 30, 2019	$	—

Summary of the changes in the Company's investment in warrants

A summary of the changes in the Company’s investment in warrants measured at fair value using significant unobservable inputs (Level 3) as of and for the nine months ended September 30, 2019 is as follows:


	2019
Investment in warrants, December 31, 2018	$	67,000
Warrants issued to the Company		19,000
Increase in fair value		55,000
Conversion of warrants into common stock		(141,000)
Investment in warrants, September 30, 2019	$	—