UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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SCHEDULE 14A
(Rule 14a-101)
SCHEDULE 14A INFORMATION
____________________________
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement.
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)).
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Definitive Proxy Statement.
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Definitive Additional Materials.
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Soliciting Material Pursuant to §240.14a-12.
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SCWORX CORP.
(Name of Registrant as Specified In Its Charter)
________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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Filing Party:
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Date Filed:
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SCWORX CORP.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held On December 20, 2021
You are hereby notified that the Annual Meeting of stockholders of SCWorx Corp. (“Annual Meeting”) (the “Company”), will be held at 9:00 am on December 20, 2021, the Ipswich Room of the DoubleTree by Hilton Boston North Shore 50 Ferncroft Road, Danvers, MA 01923, for the following purposes:
1. To elect five directors to serve until the next annual meeting of stockholders and until their respective successors shall have been duly elected and qualified;
2. To ratify the selection of BFBorgers CPA PC as independent registered public accounting firm of the Company for the fiscal year ending December 31, 2021; and
3. To consider and act upon such other business as may properly come before the meeting or any adjournment or postponement thereof.
All stockholders are cordially invited to attend the annual meeting. If your shares are registered in your name, please bring the admission ticket attached to your proxy card. If your shares are registered in the name of a broker, trust, bank or other nominee, you will need to bring a proxy or a letter from that broker, trust, bank or other nominee or your most recent brokerage account statement, that confirms that you are the beneficial owner of those shares. If you do not have either an admission ticket or proof that you own shares of the Company, you will not be admitted to the meeting. We intend to mail this proxy statement and the accompanying proxy card on or about November 15, 2021 to all stockholders of record that are entitled to vote.
The Board of Directors has fixed the close of business on October 28, 2021 as the record date for the meeting. Only stockholders on the record date are entitled to notice of and to vote at the meeting and at any adjournment or postponement thereof.
Your vote is important regardless of the number of shares you own. The Company requests that you complete, sign, date and return the enclosed proxy card without delay in the enclosed postage-paid return envelope, even if you now plan to attend the annual meeting. You may revoke your proxy at any time prior to its exercise by delivering written notice or another duly executed proxy bearing a later date to the Secretary of the Company, or by attending the annual meeting and voting in person.
Important Notice Regarding the Availability of Proxy Materials for the
Annual Meeting to be held on December 20, 2021:
The proxy statement, proxy card and Annual Report to stockholders for the year ended December 31, 2020 (the “Annual Report”) are also available at https://ir.scworx.com/Stockholders may also obtain additional paper or e-mail copies of these materials at no cost by writing to SCWorx Corp., 590 Madison Avenue, 21st Floor, New York, NY 10022, attention: CEO.
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IMPORTANT: If your shares are held in the name of a brokerage firm, bank, nominee or other institution, you should provide instructions to your broker, bank, nominee or other institution on how to vote your shares. Please contact the person responsible for your account and give instructions for a proxy to be completed for your shares.
By order of the Board of Directors,
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/s/ Timothy a. Hannibal
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Timothy a. Hannibal
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Chief Executive Officer
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November 3, 2021
IMPORTANT: In order to secure a quorum and to avoid the expense of additional proxy solicitation, please either vote by internet or sign, date and return your proxy promptly in the enclosed envelope even if you plan to attend the meeting personally. Your cooperation is greatly appreciated.
SCWORX CORP.
590 Madison Avenue, 21st Floor.
New York, NY 10022
PROXY STATEMENT
INTRODUCTION
This proxy statement and the accompanying proxy are made available by SCWorx Corp. (the “Company”), to the holders of record of the Company’s outstanding shares of Common Stock, $0.001 par value per share, (the “Common Stock”), commencing on or about October 28, 2021. The accompanying proxy is being solicited by the Board of Directors of the Company (the “Board”), for use at the Annual Meeting of stockholders of the Company (the “Meeting”), to be held at 9:00 am on December 20, 2021, at the Ipswich Room of the DoubleTree by Hilton Boston North Shore 50 Ferncroft Road, Danvers, MA 01923 and at any adjournment or postponement thereof. The cost of solicitation of proxies will be borne by the Company. Directors, officers and employees of the Company may also assist in the solicitation of proxies by mail, e-mail, telephone, telefax, in person or otherwise, without additional compensation. Brokers, custodians and fiduciaries will be requested to forward proxy soliciting materials to the owners of stock held in their names and the Company will reimburse them for their reasonable out-of-pocket expenses incurred in connection with the distribution of such proxy materials.
The Board has fixed October 28, 2021 as the record date for the Meeting (the “Record Date”). Only stockholders of record on the Record Date are entitled to notice of and to vote at the Meeting or any adjournment or postponement thereof. On October 28, 2021, there were 11,223,151 shares of Common Stock and 39,810 shares of Series A Preferred Stock (convertible into 222,402 shares of Common Stock) issued and outstanding. Each share of Common Stock and each share of Series A Preferred Stock (on an as converted basis) is entitled to one vote per share.
The Company’s amended and restated bylaws provide that a quorum shall consist of the holders of at least 33.33% of the shares of each class, and series of each class, to the extent applicable (unless more than one class and or series votes as a class, in which case a majority of the shares voting as a class) of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy at the Meeting. If such quorum shall not be present or represented at any meeting of the stockholders, the stockholders, entitled to vote thereat, present in person or represented by proxy, shall have the power to adjourn the meeting from time to time without notice (other than the announcement at the meeting) until a date and time that a quorum shall be present. At such adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the meeting as originally notified. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.
The Company’s amended and restated bylaws provide that directors are to be elected by a majority of the votes of the shares present in person or represented by proxy at the Meeting and entitled to vote on the election of directors. Only shares that are voted in favor of a particular nominee will be counted toward that nominee’s achievement of a majority. Shares present at the Meeting that are not voted for a particular nominee or shares present by proxy where the stockholder properly withheld authority to vote for such nominee will not be counted toward that nominee’s achievement of a majority.
In all matters, like the election of directors, the affirmative vote by the holders of a majority of the shares voted on any matter shall be sufficient for the approval of the proposals in this proxy statement and any other business which may properly be brought before the Meeting or any adjournment or postponement thereof.
All shares of Common Stock represented in person or by valid proxies received by the Company prior to the date of, or at, the Meeting, and not revoked, will be voted as specified in the proxies or voting instructions. Votes that are left blank will be voted as recommended by the Board. With regard to other matters that may properly come before the Meeting, votes will be cast at the discretion of the proxies.
Broker non-votes occur when a beneficial owner of shares held in “street name” does not give instructions to the broker or nominee holding the shares as to how to vote on matters deemed “non-routine.” Generally, if shares are held in street name, the beneficial owner of the shares is entitled to give voting instructions to the broker or nominee holding the shares. If the beneficial owner does not provide voting instructions, the broker or nominee can still vote the shares with respect to matters that are considered to be “routine,” but not with respect to “non-routine” matters.
In the event that a broker, bank, or other agent indicates on a proxy that it does not have discretionary authority to vote certain shares on a non-routine proposal, then those shares will be treated as broker non-votes. We believe that Proposal No. 1 relating to the election of directors is a non-routine proposal and Proposal No. 2, with respect to the ratification of the selection of the independent registered public accounting firm, is a routine matter; therefore, your broker, bank or other agent will not be entitled to vote on Proposal No. 1 at the Meeting without your instructions. Broker non-votes will be counted towards the quorum requirement. Other than for the purpose of establishing a quorum, as discussed above, broker non-votes will not be counted as entitled to be voted and will therefore not affect the outcome of the matters to be voted thereon.
Any stockholder who has submitted a proxy may revoke it at any time before it is voted, by written notice addressed to and received by our Chief Executive Officer, by submitting a duly executed proxy bearing a later date or by electing to vote in person at the Meeting. The mere presence at the Meeting of the person appointing a proxy does not, however, revoke the appointment.
IMPORTANT: If your shares are held in the name of a brokerage firm, bank, nominee or other institution, you should provide instructions to your broker, bank, nominee or other institution on how to vote your shares. Please contact the person responsible for your account and give instructions for a proxy to be completed for your shares.
Our website address is included several times in this proxy statement as a textual reference only and the information in our website is not incorporated by reference into this proxy statement.
PROPOSAL NO. 2 — RATIFICATION OF THE SELECTION OF BFBORGERS CPA PC AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM OF THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31, 2021.
The audit committee of our Board (the “Audit Committee”) has selected BFBorgers CPA PC as our independent registered public accounting firm (the “Independent Auditors”) for the current fiscal year, and is seeking ratification by our stockholders at the Meeting. We do not expect to have a representative of the Independent Auditors attending the Meeting.
Neither our by-laws, our other governing documents, nor other law requires stockholder ratification of the selection of the Independent Auditors as our independent registered public accounting firm. However, the Audit Committee is submitting the selection of the Independent Auditors to the stockholders for ratification as a matter of good corporate practice. If the stockholders fail to ratify the selection, the Audit Committee will reconsider whether or not to retain the Independent Auditors. Even if the selection is ratified, the Audit Committee in its discretion may decide to appoint a different independent registered public accounting firm at any time during the year if the Audit Committee determines that such a change would be in the best interests of the Company and its stockholders.
Required Vote
The affirmative vote of the holders of a majority of the votes cast at the Meeting is required for the ratification of the selection of the independent registered public accounting firm. Broker non-votes will not impact the outcome of the vote on this proposal but will be counted for purposes of determining whether there is a quorum.
The Board recommends a vote “FOR” the ratification of the selection of BFBorgers CPA PC as independent registered public accounting firm of
the Company for the fiscal year ending December 31, 2021.
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5
CORPORATE GOVERNANCE
Committees and Meetings of Our Board of Directors
The Board held eighteen meetings and took action by consent six times during the fiscal year ended December 31, 2020 (“Fiscal 2020”). Throughout this period, each member of our Board who was a director in Fiscal 2020 attended or participated in all of the total number of meetings of our Board held during the period for which such person has served as a director, and the total number of meetings held by all committees of our Board on which each the director served during the periods such director served. Our Board has three standing committees: The Compensation Committee, the Audit Committee and the Nominating and Corporate Governance Committee.
Compensation Committee. The current members of our Compensation Committee are Mr. Irby, Mr. Horowitz and Mr. Ferrara. Mr. Irby is the current Chairman of the Compensation Committee and our board of directors has determined that all of the members of the Compensation Committee are “independent” as defined by the rules of the SEC and Nasdaq rules and regulations. The Compensation Committee operates under a written charter that is posted on our website at www.scworx.com.
The primary responsibilities of our Compensation Committee include:
• Reviewing and recommending to our Board of the annual base compensation, the annual incentive bonus, equity compensation, employment agreements and any other benefits of our executive officers;
• Administering our equity-based plans and exercising all rights authority and functions of the Board under all of the Company’s equity compensation plans, including without limitation, the authority to interpret the terms thereof, to grant options thereunder and to make stock awards thereunder; and
• Annually reviewing and making recommendations to our Board with respect to the compensation policy for such other officers as directed by our Board.
The Compensation Committee meets, as often as it deems necessary, without the presence of any executive officer whose compensation it is then approving.
Our Compensation Committee held two meetings during 2020.
Audit Committee. The current members of our Audit Committee are Mr. Ferrara, Mr. Horowitz and Mr. Wallitt. Mr. Horowitz is the Chairman of the Audit Committee, and our board of directors has determined that Mr. Horowitz is an “Audit Committee financial expert” and that all members of the Audit Committee are “independent” as defined by the rules of the SEC and the Nasdaq rules and regulations. The Audit Committee operates under a written charter that is posted on our website at www.scworx.com.
The primary responsibilities of our Audit Committee include:
• Appointing, compensating and retaining our registered independent public accounting firm;
• Overseeing the work performed by any outside accounting firm;
• Assisting the Board in fulfilling its responsibilities by reviewing: (i) the financial reports provided by us to the SEC, our stockholders or to the general public, and (ii) our internal financial and accounting controls; and
• Recommending, establishing and monitoring procedures designed to improve the quality and reliability of the disclosure of our financial condition and results of operations.
Our Audit Committee held four meetings during 2020.
Nominating and Corporate Governance Committee. The current members of our Nominating and Corporate Governance Committee are Mr. Horowitz, Mr Ferrara, Mr. Hannibal and Mr. Irby. Mr. Ferrara is the Chairman of the Nominating and Corporate Governance Committee. Our board of directors has determined that all of the members
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of the Nominating and Corporate Governance Committee with the exception of Mr. Hannibal are “independent” as defined by Nasdaq rules and regulations. The Nominating and Corporate Governance Committee operates under a written charter that is posted on our website at www.scworx.com. The primary responsibilities of our Nominating and Corporate Governance Committee include:
• Assisting the Board in, among other things, effecting Board organization, membership and function including identifying qualified Board nominees; effecting the organization, membership and function of Board committees including composition and recommendation of qualified candidates; establishment of and subsequent periodic evaluation of successor planning for the chief executive officer and other executive officers; development and evaluation of criteria for Board membership such as overall qualifications, term limits, age limits and independence; and oversight of compliance with applicable corporate governance guidelines; and
• Identifying and evaluating the qualifications of all candidates for nomination for election as directors.
Our Nominating and Corporate Governance Committee held three meetings/took action by consent zero times during 2020.
Potential nominees will be identified by the Board based on the criteria, skills and qualifications determined by the Nominating and Corporate Governance Committee. In considering whether to recommend any particular candidate for inclusion in the Board’s slate of recommended director nominees, our Nominating and Corporate Governance Committee will apply criteria including the candidate’s integrity, business acumen, knowledge of our business and industry, age, experience, diligence, conflicts of interest and the ability to act in the interests of all stockholders. No particular criteria will be a prerequisite or will be assigned a specific weight, nor do we have a diversity policy. We believe that the backgrounds and qualifications of our directors, considered as a group, should provide a composite mix of experience, knowledge and abilities that will result in a well-rounded board of directors and allow the Board to fulfill its responsibilities.
The Company has never received communications from stockholders recommending individuals to any of our independent directors. Therefore, we do not yet have a policy with regard to the consideration of any director candidates recommended by stockholders. In 2020, we did not pay a fee to any third party to identify or evaluate, or assist in identifying or evaluating, potential nominees for our Board. We have not received any recommendations from stockholders for Board nominees. All of the nominees for election at the Meeting are current members of our Board.
Board Leadership Structure. Our Board leadership structure had historically included the combined positions of Chairman of the Board and Chief Executive Officer. While Marc Schessel was the CEO, the Company believed that this structure was appropriate for a company of our size and complexity because the Chairman and Chief Executive Officer (a) was most familiar with the Company’s business and industry, (b) possessed detailed and in-depth knowledge of the issues, opportunities and challenges facing the Company, and was thus best positioned to develop agendas to ensure the Board’s time and attention are focused on matters which are critical to the Company, and (c) conveyed a clear, cohesive message to our stockholders, employees and industry partners. Alton Irby is our current Chairman and, effective after the Annual Meeting, will continue to serve as the Company’s Chairman of the Board.
In his position as Chairman of the Board, Mr. Irby will be responsible for setting the agenda and priorities of the Board. As President and CEO, Mr. Timothy Hannibal leads our day-to-day business operations and is accountable directly to the full Board. Mr Christopher Kohler, our CFO, reports to Mr. Hannibal and is responsible for overseeing the financial operations of the Company. We believe that this structure provides an efficient and effective leadership model for the Company.
Risk Oversight. The Board, including the Audit Committee, Compensation Committee and Nominating/Governance Committee, periodically reviews and assesses the significant risks to the Company. Our management is responsible for the Company’s risk management process and the day-to-day supervision and mitigation of risks. These risks include strategic, operational, competitive, financial, legal and regulatory risks. Our Board leadership structure, together with the frequent interaction between our directors and management, assists in this effort. Communication between our Board and management regarding long-term strategic planning and short-term operational practices include matters of material risk inherent in our business.
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The Board plays an active role, as a whole and at the committee level, in overseeing management of the Company’s risks. Each of our Board committees is focused on specific risks within their areas of responsibility, but the Board believes that the overall enterprise risk management process is more properly overseen by all of the members of the Board. The Audit Committee is responsible for overseeing the management of financial and accounting risks. The Compensation Committee is responsible for overseeing the management of risks relating to executive compensation plans and arrangements. The Nominating and Governance Committee is responsible for setting standards for and recommending director nominees to the Board and advising the Board about corporate governance matters. While each committee is responsible for the evaluation and management of such risks, the entire Board is regularly informed through committee reports. The Board incorporates the insight provided by these reports into its overall risk management analysis.
The Board administers its risk oversight responsibilities through the Chief Executive Officer and the Chief Financial Officer, who, together with management representatives of the relevant functional areas review and assess the operations of the Company as well as operating management’s identification, assessment and mitigation of the material risks affecting our operations.
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COMMUNICATING WITH OUR BOARD OF DIRECTORS
Our Board will give appropriate attention to written communications that are submitted by stockholders and will respond if and as appropriate. Timothy Hannibal, our Chief Executive Officer and a director, with the assistance of our outside counsel, has been primarily responsible for monitoring communications from our stockholders and for providing copies or summaries to the other directors as he considers appropriate. Communications are forwarded to all directors if they relate to substantive matters and include suggestions or comments that Mr. Hannibal considers to be important for the directors to know. In general, communications relating to corporate governance and long-term corporate strategy are more likely to be forwarded than communications relating to ordinary business affairs, personal grievances and matters as to which we tend to receive repetitive or duplicative communications.
Stockholders who wish to send communications on any topic to our Board should address such communications to: SCWorx Corp., c/o Timothy A. Hannibal, Chief Executive Officer, at the address on the first page of this proxy statement.
ATTENDANCE AT SPECIAL AND ANNUAL STOCKHOLDER MEETINGS
We encourage our directors to attend our special and annual stockholders’ meetings.
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COMPENSATION OF DIRECTORS
Directors’ Compensation
The following summary compensation table sets forth information concerning compensation for services rendered in all capacities during 2020 and 2019 awarded to, earned by or paid to our directors. The value attributable to any stock awards reflects the grant date fair values of stock awards calculated in accordance with ASC Topic 718.
Name
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Year
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Fees
Earned or
Paid in
Cash
($)
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Stock
Award
($)
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Option Award
($)
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Non-equity
Incentive Plan
Compensation
($)
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Non-qualified Deferred
Compensation
Earnings
($)
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All Other Compensation
($)
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Total
($)
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Mark Shefts(1)
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2020
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—
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727,685
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—
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—
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—
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—
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727,685
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Director
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2019
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—
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—
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—
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—
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—
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—
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—
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Steven Wallitt(2)
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2020
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—
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240,000
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—
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—
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—
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—
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240,000
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Director
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2019
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—
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—
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—
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—
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—
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—
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—
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Alton Irby(3)
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2020
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—
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—
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—
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—
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—
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—
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—
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Director
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2019
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—
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—
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—
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—
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—
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—
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—
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John Ferrara(4)
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2020
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—
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—
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—
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—
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—
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—
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—
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Director
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2019
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—
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—
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—
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—
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—
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—
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—
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Steven Horowitz(5)
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2020
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—
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—
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—
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—
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—
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—
|
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—
|
Director
|
|
2019
|
|
—
|
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—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
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Francis Knuettel(6)
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2020
|
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—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Former Director
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2019
|
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—
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135,000
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73,528
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—
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—
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—
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208,528
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|
|
|
|
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Ira Ritter(7)
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2020
|
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—
|
|
—
|
|
—
|
|
—
|
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—
|
|
—
|
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—
|
Former Director
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2019
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—
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—
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203,108
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—
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—
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—
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203,108
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Joseph Gamberale(8)
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2020
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—
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—
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—
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—
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—
|
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—
|
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—
|
Former Director
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2019
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—
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—
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—
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—
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—
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20,955
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20,955
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Charles K. Miller(9)
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2020
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—
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240,000
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—
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—
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—
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—
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240,000
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Former Director
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2019
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—
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—
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203,108
|
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—
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—
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—
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203,108
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Robert Christie(10)
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2020
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—
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—
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—
|
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—
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—
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—
|
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—
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Former Director
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2019
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—
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—
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203,108
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—
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—
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—
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203,108
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Joel D Tracy
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2020
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Former Director
|
|
2019
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
29,777
|
|
29,777
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Burt Watson
|
|
2020
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Former Director
|
|
2019
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
11
We do not have a formal plan for compensating our directors for their service in their capacity as directors. With respect to 2021, our directors each received 75,000 Restricted Stock Units for serving on our Board and an additional 25,000 Restricted Stock Units for those who serving on committees. Currently, Directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of our board of directors, of which there have been none. The board of directors may award special remuneration to any director undertaking any special services on our behalf other than services ordinarily required of a director. Other than indicated above, no director received and/or accrued any compensation for his or her services as a director, including committee participation and/or special assignments during 2020 or 2021.
Directors, Executive Officers and Corporate Governance
The current members of our Board and our executive officers, together with their respective ages and certain are set forth below. Biographical information is set forth above. Directors hold office until the next annual meeting of our stockholders and until their successors have been duly elected and qualified. Our executive officers are elected by and serve at the designation and appointment of the board of directors.
Name
|
|
Age
|
|
Position
|
Alton Irby(1)(2)(3)
|
|
81
|
|
Chairman of the Board of Directors
|
Timothy A, Hannibal(3)
|
|
53
|
|
Chief Executive Officer and Director
|
John Ferrara(1)(2)(3)
|
|
70
|
|
Director
|
Steve Horowitz(1)(2)(3)
|
|
50
|
|
Director
|
Steven Wallitt(3)
|
|
60
|
|
Director
|
Chris Kohler
|
|
41
|
|
Chief Financial Officer
|
The following is a summary of the business experience of each of our executive officers.
Timothy A. Hannibal. Mr. Hannibal, 53, is a seasoned technology executive and entrepreneur, with nearly 30 years’ experience in SaaS and cloud technology, driving revenue, go-to-market strategies, business development and mergers and acquisitions. Mr. Hannibal joined the Company in January 2019 and currently serves as its Chief Executive Officer. Prior to joining the Company, Mr. Hannibal was an employee at Primrose Solutions (the predecessor to SCWorx) which he joined in September of 2016. At Primrose, Mr. Hannibal was responsible for overseeing marketing, sales and operations, including executing the Company’s business plan. Mr. Hannibal has a successful track record of growth and management at both startup and national companies.
Mr. Kohler, 40, has over 15 years of experience serving in a wide variety roles in the finance and accounting sectors. Mr. Kohler is the founder and CEO of Kohler Consulting, Inc., which he founded in 2012. The firm, through Mr. Kohler, provides outsourced CFO and advisory services to private and public companies, with a focus on small cap and start-up businesses.
There are no family relationships between any of the director nominees or executive officers named in this proxy statement.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires our executive officers and directors and persons who beneficially own more than 10% of a registered class of our equity securities to file with the SEC initial statements of beneficial ownership, statements of changes in beneficial ownership and annual statements of changes in beneficial ownership with respect to their ownership of the Company’s securities, on Forms 3, 4 and 5 respectively. Executive officers, directors and greater than 10% shareholders are required by SEC regulations to furnish us with copies of all Section 16(a) reports they file.
Based solely on our review of the copies of such reports filed with the SEC, and on written representations by our officers and directors regarding their compliance with the applicable reporting requirements under Section 16(a) of the Exchange Act, and without conducting an independent investigation of our own, we believe that with respect to the fiscal year ended December 31, 2020, our officers and directors, and all of the persons known to us to beneficially own more than 10% of our common stock filed all required reports on a timely basis.
12
REPORT OF THE AUDIT COMMITTEE
In the course of our oversight of the Company’s financial reporting process, we have: (1) reviewed and discussed with management the audited financial statements for Fiscal 2020; (2) discussed with the Independent Auditors the matters required to be discussed by the applicable requirements of the Public Accounting Oversight Board and the SEC; and (3) received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the standards of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit Committee concerning independence, and has discussed with the independent accountant the independent accountant’s independence.
Based on the foregoing review and discussions, the Audit Committee recommended to the Board that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, for filing with the SEC.
By the Audit Committee of the Board of
Directors of SCWorx Corp.
John Ferrara
Steven Horowitz
Steve Wallitt
13
INFORMATION CONCERNING OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We appointed our Independent Auditors, BF Borgers CPA PC, on April 15, 2021. Sadler Gibb and Associates, on October 20, 2020. Prior to retaining our Independent Auditors, we had previously appointed Sadler Gibb and Associates as our independent auditors from October 20, 2020 to April 15, 2021. Prior to Sadler Gibb Associates, Withum Smith+Brown, PC served as our independent auditors from April 16, 2019 to October 19, 2020. The following table summarizes the fees billed by Withum Smith+Brown, PC and Sadler Gibb and Associates for 2020 and Withum Smith+Brown, PC for 2019:
|
|
Year ended on
December 31,
2020
|
|
Year ended on
December 31,
2019
|
Audit Fees
|
|
$
|
150,594
|
|
$
|
233,589
|
Audit-Related Fees
|
|
|
—
|
|
$
|
—
|
Tax Fees
|
|
$
|
—
|
|
$
|
—
|
All Other Fees
|
|
|
—
|
|
|
—
|
Total Fees
|
|
$
|
150,594
|
|
$
|
233,589
|
Audit Fees
Audit fees include amounts related to the audit of the Company’s annual consolidated financial statements and internal control over financial reporting, and quarterly review of the consolidated financial statements included in the Company’s Quarterly Reports on Form 10-Q.
Tax Fees
Tax fees include fees billed for tax compliance, tax advice and tax planning services.
All Other Fees
There were no other fees billed by Sadler Gibb Associates or Withum Smith+Brown, PC for services rendered to the Company, other than the services described above, in 2020. There were no other fees billed by Withum Smith+Brown, PC for services rendered to the Company, other than the services described above, in 2019.
Audit Committee Pre-Approval Policies and Procedures
Currently, the audit committee acts with respect to audit policy, choice of auditors, and approval of out of the ordinary financial transactions. The audit committee pre-approves all services provided by our independent registered public accounting firm. All of the above services and fees were reviewed and approved by the audit committee before the services were rendered.
14
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Our policy is to enter into transactions with related parties on terms that are on the whole no less favorable to us than those that would be available from unaffiliated parties at arm’s length. Based on our experience in the business sectors in which we operate and the terms of our transactions with unaffiliated third parties, we believe that all of the transactions described below met this policy standard at the time they occurred.
On July 24, 2020, the Company’s then Chief Executive Officer, Marc Schessel, transferred 20,000 of his personally held common shares to Mark Shefts, a Director. The company deemed this transfer to be in consideration for services and recorded a non-cash expense of $115,100 for the fair value of the shares transferred.
During April, 2020, a company affiliated with a shareholder advanced $475,000 in cash to the supplier of test kits for their purchase. In May 2021, the company returned the test kits pursuant to its sales contract in full satisfaction of the $475,000 previously advanced.
On January 19, 2021, Marc. S. Schessel’s employment as CEO of SCWorx, Corp. ceased by mutual agreement, and the Company and Mr. Schessel concurrently entered into a consulting agreement (“Consulting Agreement”) under which Mr. Schessel provides consulting services to the Company. The Consulting Agreement provides for annual consulting fees of $295,000. In addition, such agreement provides for cash and equity bonuses based on revenue generation. The Consulting Agreement is for a term of two years, but may be terminated by the Company for “cause” (as defined) or by either party for any reason or no reason upon sixty days prior notice. The Consulting Agreement also contains non-competition and non-solicitation provisions which are applicable during the term of the Consulting Agreement and for a period of two years thereafter.
Except as described above, no director, executive officer, principal stockholder holding at least 5% of our common stock, or any family member thereof, had any material interest, direct or indirect, in any transaction, or proposed transaction, during 2021 or 2020 in which the amount involved in the transaction exceeded or exceeds $103,000 or one percent of the average of our total assets at the year-end for the last two completed fiscal years.
STOCKHOLDER PROPOSALS
We intend to mail this proxy statement, the accompanying proxy card and the 2020 annual report on or about November 15, 2021 to all stockholders of record on the Record Date that are entitled to vote. Stockholders who wish to submit proposals for inclusion in our proxy statement and form of proxy relating to our next annual meeting of stockholders must advise our Secretary of such proposals in writing by July 1, 2022.
Stockholders who wish to present a proposal at our next annual meeting of stockholders without inclusion of such proposal in our proxy materials must advise our Secretary of such proposals in writing by August 1, 2021.
If we do not receive notice of a stockholder proposal within this timeframe, our management will use its discretionary authority to vote the shares they represent, as the Board may recommend. We reserve the right to reject, rule out of order, or take other appropriate action with respect to any proposal that does not comply with these requirements.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of October 28, 2021, with respect to the beneficial ownership of the outstanding Common Stock held by (1) each person known by us to be the beneficial owner of more than 5% of our Common Stock; (2) our current directors; (3) each of our named executive officers; and (4) our executive officers and current director as a group. Unless otherwise indicated, the persons named in the table below have sole voting and investment power with respect to the number of shares indicated as beneficially owned by them. Unless otherwise indicated, the address for each of the below persons is c/o SCWorx Corp., 590 Madison Avenue, 21st Floor, New York, NY 10022.
Named Executive Officers and Directors
|
|
Common
Stock
|
|
Preferred
Stock
|
|
Options/ Warrants
|
|
Total
|
|
Percentage
Ownership
|
Timothy Hannibal
|
|
743,057
|
|
—
|
|
—
|
|
743,057
|
|
6.6
|
%
|
Chris Kohler
|
|
34,000
|
|
—
|
|
—
|
|
34,000
|
|
*
|
|
Steven Wallitt
|
|
186,786
|
|
—
|
|
—
|
|
186,786
|
|
1.7
|
%
|
Alton Irby
|
|
91,667
|
|
—
|
|
—
|
|
91,667
|
|
*
|
|
John Ferrara
|
|
33,333
|
|
—
|
|
—
|
|
33,333
|
|
*
|
|
Steven Horowitz
|
|
33,333
|
|
—
|
|
—
|
|
33,333
|
|
*
|
|
Directors and Executive Officers as a Group (6 persons)
|
|
1,122,176
|
|
—
|
|
—
|
|
1,122,176
|
|
10.0
|
%
|
Marc Schessel
|
|
1,070,523
|
|
—
|
|
—
|
|
1,070,523
|
|
9.5
|
%
|
16
MEETING MATERIALS
Some banks, brokers and other nominee record holders may be participating in the practice of “householding” proxy statements and annual reports. This means that only one copy of our proxy statement or annual report may have been sent to multiple stockholders in your household. We will promptly deliver a separate copy of either document to you if you call or write us at the address shown on the first page of this proxy statement. If you want to receive separate copies of the annual report and any proxy statement in the future or if you are receiving multiple copies and would like to receive only one copy for your household, you should contact your bank, broker, or other nominee record holders, or you may contact us at the address shown on the first page of this proxy statement or by email at ir@scworx.com.
OTHER MATTERS
As of the date of this proxy statement, our management knows of no matter not specifically described above as to any action which is expected to be taken at the Meeting. The persons named in the enclosed proxy, or their substitutes, will vote the proxies, insofar as the same are not limited to the contrary, in their best judgment, with regard to such other matters and the transaction of such other business as may properly be brought at the Meeting.
IF YOU HAVE NOT VOTED BY INTERNET, PLEASE DATE, SIGN AND RETURN THE PROXY CARD AT YOUR EARLIEST CONVENIENCE IN THE ENCLOSED RETURN ENVELOPE. A PROMPT RETURN OF YOUR PROXY CARD WILL BE APPRECIATED AS IT WILL SAVE THE EXPENSE OF FURTHER MAILINGS.
By Order of the Board of Directors
|
|
|
/s/ Timothy A. Hannibal
|
|
|
Timothy A. Hannibal
|
|
|
Chief Executive Officer and Director
|
|
|
New York, New York
|
|
|
November 3, 2021
|
|
|
17
SCWORX CORP.
ANNUAL MEETING OF STOCKHOLDERS
December 20, 2021
PROXY CARD
THE FOLLOWING PROXY IS BEING SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF SCWORX CORP.
The undersigned stockholder of SCWorx Corp. (the “Company”) hereby appoints Timothy A. Hannibal , as proxy and attorney of the undersigned, for and in the name(s) of the undersigned, to attend the annual meeting of stockholders of the Company (the “Stockholders Meeting”) to be held on December 20, 2021, at [Annual Meeting Location TBD] , and any adjournment thereof, to cast on behalf of the undersigned all the votes that the undersigned is entitled to cast at such meeting and otherwise to represent the undersigned at the Stockholders Meeting with all powers possessed by the undersigned if personally present at the Stockholders Meeting, including, without limitation, to vote and act in accordance with the instructions set forth below. The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of Stockholders and revokes any proxy heretofore given with respect to such meeting.
THE VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED WILL BE CAST AS INSTRUCTED BELOW. IF THIS PROXY CARD IS EXECUTED BUT NO INSTRUCTION IS GIVEN WITH RESPECT TO ANY PROPOSAL SPECIFIED HEREIN, THE VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED WILL BE CAST “FOR” EACH NOMINEE IN PROPOSAL NO. 1 AND “FOR” PROPOSAL NO. 2.
(Continued and to be signed on the reverse side)
ANNUAL MEETING OF STOCKHOLDERS
OF
SCWORX CORP.
December 20, 2021
If you have not voted by internet, please sign, date and mail your proxy card in the envelope provided
as soon as possible.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH OF
THE DIRECTOR NOMINEES LISTED IN PROPOSAL 1 AND “FOR” PROPOSALS 2, 3 and 4.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE
MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE ☐
In their discretion, the proxies are authorized to vote upon such other business as may properly come before the Stockholders Meeting.
|
|
|
1.
|
Proposal No. 1 — To elect five directors to serve until the next annual meeting of stockholders and until their respective successors shall have been duly elected and qualified:
|
|
|
|
|
|
|
FOR ALL NOMINEES
Steven Wallitt
Tim Hannibal
John Ferrara
Steven Horowitz
Alton Irby
|
|
|
|
|
|
☐
|
WITHHOLD AUTHORITY FOR ALL NOMINEES
|
|
|
|
|
|
☐
|
FOR ALL EXCEPT
☐ Alton Irby ☐ John Ferrara
☐ Tim Hannibal ☐ Steven Horowitz
☐ Steven Wallitt
|
|
|
|
|
|
|
|
|
|
|
To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method.
|
|
2.
|
Proposal No. 2 — To ratify the selection of BFBorgers CPA PC, as independent registered public accounting firm of the Company for the fiscal year ending December 31, 2021.
|
FOR
☐
|
AGAINST
☐
|
ABSTAIN
☐
|
|
|
|
|
|
|
|
Signature of stockholder
|
|
|
|
Date:
|
|
|
|
Signature of Stockholder
|
|
|
|
Date:
|
|
|
Note:
Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.