Business Context and Reporting Period
This Form 8-K Current Report was filed by authID Inc. on April 12, 2023. The filing discloses the appointment of Thomas R. Szoke as Chief Technology Officer (CTO) and details the associated compensatory agreements. The Company is an emerging growth company incorporated in Delaware, with its principal executive offices in Denver, Colorado.
Key Financial Metrics
This filing does not contain general financial statements, revenue, profit, cash flow, or debt metrics. The only financial data provided relates to the specific compensation package for the new CTO:
- Base Salary: $250,000 annually.
- Signing Bonus: $20,833.
- Target Annual Bonus: Up to $200,000 based on performance milestones.
- Performance Metric: For the period ending March 31, 2024, a $40,000 bonus is payable upon achieving $5,000,000 in total contract value ("Bookings").
- Equity Grants: Vesting criteria amended for 100,000 previously granted options; a future grant of 400,000 options is contingent on the Company's ability to grant under a stock incentive plan.
Material Changes
The primary material change reported is the appointment of Thomas R. Szoke as CTO, effective April 12, 2023. Mr. Szoke, a founder of the Company and former director, previously served as an independent consultant since 2021. The filing also notes an amendment to the vesting criteria of his original stock option grant to include performance and service conditions.
Outlook, Risks, and Contingencies
Management Commentary: The appointment leverages Mr. Szoke's over 25 years of experience in engineering, global sales, and operations management, including his prior role as COO of Innovation In Motion Inc. (now a subsidiary).
Contingencies and Risks:
- Employment Status: Employment is "at-will" and may be terminated at any time.
- Severance Triggers: An Executive Retention Agreement provides for severance (100% of base salary, unpaid bonuses, and COBRA coverage for up to 12 months) and accelerated equity vesting in the event of a change of control or involuntary termination.
- Future Equity: The additional grant of 400,000 options is contingent on the Company's ability to grant options under a stock incentive plan.
Investor Verification Checklist
- Verify the Company's current ability to grant the additional 400,000 stock options under its stock incentive plan.
- Review the specific definitions of "involuntary termination" and "change of control" in the Executive Retention Agreement to understand severance liabilities.
- Monitor the Company's "Bookings" (total contract value) to assess the likelihood of the $40,000 performance bonus payout for the period ending March 31, 2024.
- Confirm the impact of the amended vesting criteria on the 100,000 shares of the Original Grant.