Material Agreement Form 8 K

Item 1.01 Entry into a Material Definitive Agreement.

On July 12, 2024, SC Worx Corp. (the "Company", ""Registrant", we", "us", "our") entered into a Securities Purchase Agreement ("SPA") with certain accredited investors (the "Investors"), and, pursuant to the SPA, sold to the Investors a new series of senior secured convertible notes (the "Convertible Notes") with an aggregate original principal amount of $1,155,000 and an initial conversion price of $1.43 per share, subject to adjustment as described in the Convertible Notes, and Series A warrants (the "Series A Warrants", Series B warrants (the "Series B Warrants") and Series C warrants (the "Series C Warrants") to acquire up to an aggregate amount of 4,846,158 additional shares of the Company's common stock (collectively, the "Warrants" and together with the Notes, the "Notes Offering"). The Warrants are exercisable immediately, one-third of which (the Series A Warrants) are exercisable at a price of $1.43 per share and two-thirds of which (the Series B Warrants and the Series C Warrants) are exercisable at a price of $1.573 per share, all expiring five years from the date of issuance. There is no established public trading market for the Warrants and we do not intend to list the Warrants on any national securities exchange or nationally recognized trading system. The Notes Offering was exempt from the registration requirements of the Securities Act pursuant to the exemption for transactions by an issuer not involving any public offering under Section 4(a)(2) of the Securities Act and in reliance on similar exemptions under applicable state laws. Each of the Investors represented that it is an accredited investor within the meaning of Rule 501(a) of Regulation D, and that it was acquiring the securities for investment only and not with a view towards, or for resale in connection with, the public sale or distribution thereof. The securities were offered without any general solicitation by the Company or its representatives.

The closing of the Note Offering is expected to occur on July 16, 2024.

The aggregate gross proceeds from the Offerings are expected to be $1,155,000, consisting of $825,000 in cash proceeds and the exchange of an outstanding Secured Promissory Note in the principal amount of $330,000. The Company expects to use proceeds from the Offering to fund operating expenses and for general working capital, fees and expenses.

SPA

The SPA contains certain representations and warranties, covenants and indemnities customary for similar transactions. The representations, warranties and covenants contained in the SPA were made solely for the benefit of the parties to the SPA and may be subject to limitations agreed upon by the contracting parties.

Convertible Notes

Payment

The Convertible Notes will mature on the earlier of (i) January 15, 2025, if the Company (x) has not filed its Annual Report on Form 10-K for the year ended December 31, 2023, its Quarterly Report on Form 10-Q for the three months ended March 31, 2024 and its Quarterly Report on Form 10-Q for the three and six months ended June 30, 2024 or (y) is not in compliance with Nasdaq's continued listing standards; and (ii) December 31, 2025 ("Maturity Date"). Principal under the Convertible Notes is payable in equal monthly installments beginning on (i) the earlier of (A) 30 days after the effective date of the Registration Statement (as defined below) or (B) 60 days after the Company has filed its Annual Report on Form 10-K for the year ended December 31, 2023, its Quarterly Report on Form 10-Q for the three months ended March 31, 2024 and its Quarterly Report on Form 10-Q for the three and six months ended June 30, 2024 and ending on the Maturity Date. Amortization payments are payable, at the Company's election, in cash or, subject to certain limitations, in shares of common stock valued at the lower of, (i) the Conversion Price then in effect, and (ii) the greater of (x) the $0.292 floor price (subject to adjustment) and (y) 80% of the quotient of (A) the sum of the closing prices of the shares of Common Stock for each of the three (3) Trading Days with the lowest closing prices of the shares of Common Stock during the twenty (20) consecutive Trading Day period ending and including the Trading Day immediately prior to the applicable Installment Date, divided by (B) three (3). Except as specifically permitted by the Convertible Notes, we will not be permitted to prepay any portion of the outstanding principal or accrued and unpaid interest.