UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number: 001-37899 SCWORX CORP. (Exact name of registrant as specified in its charter) Delaware 47-5412331 (State or other jurisd ...

Financial Performance - Revenue for the year ended December 31, 2024 was $2,989,599, a decrease of approximately 21.4% from $3,804,943 in 2023 due to the expiration and non-renewal of certain customer contracts[191]. - Cost of revenues decreased by $292,251 to $2,243,614 in 2024, primarily due to a reduction in labor costs, resulting in a gross profit decrease of approximately 41%[192]. - Operating expenses decreased by $714,329 to $2,005,411 in 2024, driven by reductions in non-cash stock compensation, salaries, and bad debt expenses[193]. - The company reported a net loss of $1,136,225 for the year ended December 31, 2024, an improvement of approximately 71.4% compared to a net loss of $3,981,144 in 2023[188]. - The company reported a net loss of approximately $1,136,000 for 2024, a decrease from a net loss of $3,981,000 in 2023[199][200]. Cash Flow and Liquidity - The company anticipates a net cash usage of approximately $70,000 per month over the next twelve months, totaling around $800,000[196]. - Net cash used in operating activities for the year ended December 31, 2024, was approximately $1,084,292, compared to $806,164 in 2023, indicating a significant increase in cash outflow[198][200]. - Net cash provided by financing activities was approximately $1,099,510 for the year ended December 31, 2024, compared to $483,138 in 2023, reflecting a substantial increase in financing[202][203]. - The cash change for the year ended December 31, 2024, was $15,218, contrasting with a cash decrease of $158,026 in 2023[198]. - The company experienced a $93,000 increase in accounts receivable in 2024, which contributed to the negative cash flow from operations[199]. Customer and Revenue Recognition - Significant customers include Customer C, which represented 20% of revenue in 2024, up from 15% in 2023, and 20% of accounts receivable in 2024, up from 12% in 2023[155]. - Revenue from SaaS and Maintenance is recognized ratably over the contract terms, starting from the commencement date of each contract[166]. - Data Normalization and Professional Services revenues are recognized as services are rendered and when contractual milestones are achieved[165]. - Deferred revenue for contract liabilities was $354,083 as of December 31, 2024, down from $378,583 in 2023[173]. - The company had no contract assets as of December 31, 2024 and 2023, indicating no unbilled revenue[172]. Operational Focus and Strategy - The company focuses on data interoperability solutions for healthcare providers, enhancing decision-making and reducing costs[143]. - SCWorx's software platform aims to improve healthcare processes, including supply chain cost reductions and accelerated billing[142]. - SCWorx's clients are geographically dispersed across the United States, with a direct sales force and strategic partnerships for service delivery[146]. - To address liquidity issues, the company entered into a securities purchase agreement on January 17, 2025, for gross proceeds of $1,500,000 to fund growth initiatives[197]. - The company intends to use additional capital raised in January 2025 to generate revenue through customer acquisition, with a goal of achieving positive operating cash flows by the end of 2025[198]. Risk Factors - The company is subject to risks related to IT system security, which could impact operations and lead to significant costs[148]. - As of December 31, 2024, the company had a working capital deficit of $1,333,171 and an accumulated deficit of $30,976,066, raising substantial doubt about its ability to continue as a going concern[194]. - The company is classified as a smaller reporting company and is not required to provide certain market risk disclosures[206]. Other Financial Information - The company recorded an allowance for credit losses of $20,000 as of December 31, 2024, while no allowance was recorded for 2023[157]. - Other income for 2024 included a gain on forgiveness of payables of $227,402, contrasting with a loss of $2,530,482 in 2023 due to a goodwill write-down[193]. - The company reported a $346,000 issuance of common stock for the settlement of payables and legal settlements in 2024[199]. - There were no off-balance sheet arrangements as of December 31, 2024, and 2023[205].

Group 1 - The 2024 Annual Meeting of Stockholders for SCWorx Corp. is scheduled for December 23, 2024, at 9:00 AM EST [1] - The meeting will take place at the Regus Conference Room located at 35 Village Rd, Suite 100, Middleton, MA 01949 [1] - Proxy Material was mailed to shareholders on December 6, 2024, providing details about the meeting [1]

Core Viewpoint - SCWorx Corp. has regained compliance with Nasdaq's continued listing requirements after addressing previous deficiencies in its periodic reporting [1][2][3] Group 1: Compliance and Reporting - Nasdaq notified SCWorx on multiple occasions in 2024 that it was not in compliance with the periodic filing requirement under Listing Rule 5250(c)(1) [1] - Following the submission of the Company's Form 10-K and Forms 10-Q, Nasdaq confirmed that SCWorx is now compliant with the reporting requirements, and the matter is considered closed [2] - All previously notified deficiencies have been rectified, allowing SCWorx's common stock to continue trading on Nasdaq under the symbol "WORX" [3] Group 2: Company Overview - SCWorx provides data management services to healthcare providers, utilizing machine learning and artificial intelligence to create a virtualized item data warehouse [4] - The company offers a suite of software-as-a-service solutions aimed at improving cost savings, operational efficiency, and accurate benchmarking for healthcare providers [4] - Key solution modules include Virtual Item Master, data cleansing, contract management, automated rebate management, and data analytics, which collectively support healthcare providers' data governance and analytics needs [4]

Core Viewpoint - SCWorx Corp has successfully completed an equity financing round, raising a total of $200,000 through the sale of common stock and warrants to institutional investors [1][2]. Group 1: Financing Details - The company sold an aggregate of 232,558 shares of common stock along with warrants to purchase the same number of shares [1]. - The gross proceeds from this financing round amount to $200,000 [1]. Group 2: Use of Proceeds - SCWorx plans to utilize the net proceeds from the financing for working capital and general corporate purposes to support future growth [2]. Group 3: Company Overview - SCWorx has developed an advanced virtualized item data warehouse that leverages machine learning and artificial intelligence to provide software-as-a-service solutions for healthcare providers [4]. - The company's solutions aim to integrate various modules with its data platform, focusing on cost savings, operational efficiency, and accurate benchmarking and reporting [4]. - Key solution modules include Virtual Item Master, data cleansing and normalization, contract management, automated rebate management, and data analytics [4].

Revenue Performance - Revenue for the three months ended September 30, 2024 was $759,724, a decrease of 16% from $906,099 for the same period in 2023, primarily due to the expiration and non-renewal of certain customer contracts [124]. - For the nine months ended September 30, 2024, revenue was $2,313,850, down 20% from $2,894,647 in 2023, primarily due to contract expirations [129]. Cost of Revenues - Cost of revenues for the three months ended September 30, 2024 was $627,148, down from $666,808 in 2023, attributed mainly to staffing reductions [125]. - Cost of revenues for the nine months ended September 30, 2024 was $1,726,314, a decrease from $1,972,300 in 2023, also due to staffing reductions [129]. Operating Expenses - Operating expenses decreased by $571,199 to $526,074 for the three months ended September 30, 2024, compared to $1,097,273 in the same period of 2023, due to reductions in legal fees and a one-time legal settlement accrual [126]. - Operating expenses for the nine months ended September 30, 2024 decreased by $861,572 to $1,466,637, compared to $2,328,209 in 2023, driven by reductions in salaries and a one-time legal settlement [129]. Net Loss - Net loss for the three months ended September 30, 2024 was $424,963, an improvement from a net loss of $858,258 in 2023 [128]. - Net loss for the nine months ended September 30, 2024 was $940,935, compared to a net loss of $1,412,070 in 2023, reflecting improved financial performance [131]. Cash Flow - Cash used in operating activities was approximately $950,000 for the nine months ended September 30, 2024, compared to $701,000 in 2023, primarily due to net losses and changes in accounts receivable [131]. - Cash provided by financing activities was approximately $946,000 for the nine months ended September 30, 2024, an increase from $524,000 in 2023, indicating improved financing efforts [135]. Regulatory Classification - The company is classified as a smaller reporting company and is not required to provide detailed market risk disclosures [139].

Revenue Performance - Revenue for the three months ended June 30, 2024, was $742,027, a decrease of 25.2% from $991,099 for the same period in 2023, primarily due to the expiration and non-renewal of certain customer contracts [100]. - Revenue for the six months ended June 30, 2024, was $1,554,126, a decrease of 21.7% from $1,988,548 for the same period in 2023, primarily due to contract expirations [105]. Cost of Revenues - Cost of revenues for the three months ended June 30, 2024, was $495,701, down 19.5% from $616,030 in the same period of 2023, attributed to staffing reductions [101]. - Cost of revenues for the six months ended June 30, 2024, was $1,099,166, down 15.8% from $1,305,492 in the same period of 2023, also due to staffing reductions [105]. Operating Expenses - Operating expenses increased by $29,941 to $553,473 for the three months ended June 30, 2024, compared to $523,532 in the same period of 2023, mainly due to increased legal and professional fees [102]. - Operating expenses decreased by $290,373 to $940,563 for the six months ended June 30, 2024, compared to $1,230,936 in the same period of 2023, primarily due to reductions in salaries and stock-based compensation [106]. Net Loss - The net loss for the three months ended June 30, 2024, was $337,313, compared to a net loss of $153,922 for the same period in 2023, reflecting a deterioration of 118.5% [103]. Cash Flow - Cash used in operating activities was approximately $587,000 for the six months ended June 30, 2024, mainly related to the net loss and increases in accounts receivable [107]. - Cash provided by financing activities was $513,081 for the six months ended June 30, 2024, consisting of proceeds from loans payable [111]. Going Concern - Management has raised substantial doubt about the company's ability to continue as a going concern due to insufficient capital resources and ongoing operating losses [112].

Financial Performance - Revenue for the three months ended March 31, 2024, was $812,099, a decrease of 18.6% from $997,449 in the same period of 2023[96] - Cost of revenues decreased to $603,465 for the three months ended March 31, 2024, down 12.5% from $689,462 in 2023[99] - Operating expenses significantly decreased by $320,314 to $387,090 for the three months ended March 31, 2024, compared to $707,404 in 2023[99] - Net loss for the three months ended March 31, 2024, was $178,659, improving from a net loss of $399,890 in the same period of 2023, representing a reduction of 55.4%[100] Cash Flow - Cash used in operating activities was approximately $59,000 for the three months ended March 31, 2024, compared to cash provided of approximately $19,000 in the same period of 2023[100] - Cash provided by financing activities was $7,647 for the three months ended March 31, 2024, contrasting with cash used of $19,090 in the same period of 2023[104] Going Concern - The company has raised substantial doubt about its ability to continue as a going concern due to insufficient capital resources to meet operating expenses and working capital requirements[105] Operational Challenges - The company experienced disruptions in operations and customer acquisition due to the COVID-19 pandemic, impacting growth prospects[94] Business Model - SCWorx's software solutions are delivered through a SaaS model, typically under three-to-five-year contracts, enhancing data interoperability for healthcare providers[93] Investment Activities - The company has not engaged in any investing activities during the three months ended March 31, 2024, and 2023[103]

Financial Performance - Revenue for the year ended December 31, 2023 was $3,804,943, a decrease of $233,245 or approximately 5.8% compared to $4,038,188 in 2022[180]. - The company reported a net loss of $3,981,144 for the year ended December 31, 2023, an increase in loss of $2,133,738 compared to the net loss of $1,847,406 in 2022[180]. - As of December 31, 2023, the company had a working capital deficit of $1,898,625 and an accumulated deficit of $29,839,841[183]. - The company is experiencing a working capital deficiency with negative cash flows from operations amounting to $806,164 for the year ended December 31, 2023, compared to $540,036 in 2022[190][191]. - The net loss for the year ended December 31, 2023, was $3,981,144, which is an increase from a net loss of $1,847,406 in 2022[191]. - The company anticipates a monthly cash burn of approximately $70,000, totaling around $800,000 over the next twelve months, if sufficient capital resources are secured[185]. - The company has raised substantial doubt about its ability to continue as a going concern due to insufficient capital resources and ongoing operating losses[183]. Revenue Recognition and Accounting Policies - Revenue recognition follows Topic 606, with performance obligations including Data Normalization, SaaS, Maintenance, and Professional Services[155]. - SaaS and Maintenance revenues are recognized ratably over the contract terms, starting from the service commencement date[158]. - Deferred revenue for contract liabilities was $378,583 as of December 31, 2023, down from $579,833 in 2022[162]. - The company expects to recognize sales related to existing performance obligations during 2024[159]. Customer and Market Focus - Significant customers include Customer A (12% revenue), Customer B (11%), Customer C (15%), Customer D (12%), Customer E (1%), and Customer F (5%) for the year ended December 31, 2023[150]. - SCWorx's software platform enhances data normalization and interoperability, leading to improved healthcare processes and analytics[138]. - The company focuses on assisting healthcare providers with data interoperability issues through direct sales and strategic partnerships[139]. - SCWorx's solutions aim to reduce supply chain costs and improve billing accuracy, contributing to operational efficiencies for healthcare providers[139]. Operational and Financial Management - The company has not recorded an allowance for credit losses as of December 31, 2023, indicating all receivables are deemed collectible[152]. - Management reviews goodwill for impairment annually, assessing qualitative factors to determine if a quantitative test is necessary[154]. - The company maintains cash deposits insured by the Federal Deposit Insurance Corporation up to $250,000, mitigating credit risk[146]. - Cost of revenues decreased by $88,688 to $2,535,865 for the year ended December 31, 2023, primarily due to a decrease in labor costs[181]. - General and administrative expenses decreased by $817,337 to $2,719,740 for the year ended December 31, 2023, mainly due to reductions in non-cash stock compensation and other expenses[181]. Financing and Future Outlook - The company issued 134,056 shares of common stock for gross proceeds of $572,906 during the year ended December 31, 2023 under its existing equity line of credit[184]. - The company generated $165,000 from investing activities in 2023 related to a potential reverse acquisition, while there were no investing activities in 2022[192]. - Net cash provided by financing activities was $483,138 in 2023, down from $718,423 in 2022, primarily from common stock placements[193]. - The company plans to fund future software development through cash flows from operations and proceeds from equity or debt financing, contingent on generating positive cash flows[188]. - If additional funds are not raised in the near term, the company may not be able to fully implement its business plan, adversely affecting its financial condition[186][187]. - The company expects to begin generating positive operating cash flows by the end of 2024 if sufficient funding is secured in the first half of 2024[190].

Core Points - SCWorx Corp. has failed to meet Nasdaq's continued listing requirements due to delinquent filings of its financial reports [1][2] - The company dismissed its previous auditor, BF Borgers CPA PC, due to an SEC order, which delayed the filing of periodic reports [2] - SCWorx has engaged a new auditor, Astra Audit & Advisory, LLC, to expedite the completion of its financial statements [3] - The company submitted a revised plan to Nasdaq to regain compliance by October 14, 2024, and has been granted an extension [4]