New York, NY, Oct. 06, 2025 (GLOBE NEWSWIRE) -- SCWorx Corp. (NASDAQ: WORX), a leading provider of healthcare data management solutions, today announced that it has renewed its agreement with an existing healthcare partner for a new three-year term. The customer, an aggregate purchasing group which has partnered with SCWorx for the past eight years, has chosen to extend its agreement, with the new contract representing a 113% increase in value compared to the prior term. Total revenue under the new agreemen ...

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Tampa, FL, Sept. 03, 2025 (GLOBE NEWSWIRE) -- SCWorx Corp. (Nasdaq: WORX), a leading provider of data management and software solutions for the healthcare industry, today announced the appointment of Anders Ohlsson, a seasoned technology executive, as its new Chief Technology Officer (CTO). This strategic hire underscores SCWorx’s commitment to advancing its data platform and expanding its suite of data management and software solutions for healthcare providers. Mr. Ohlsson has over 25 years of experience i ...

Core Insights - SCWorx Corp. has entered into a new agreement with a leading healthcare supply chain partner to enhance its SaaS data management program [1][3] - The partner specializes in healthcare supply chain consulting, focusing on cost savings and optimizing spend management for hospitals [2][3] Company Overview - SCWorx provides a suite of software-as-a-service data management solutions tailored for healthcare providers, ensuring accuracy, cost savings, operational efficiency, and reliable reporting [4] - The company's solutions include modules for data cleansing, contract management, automated rebate management, and data analytics, creating a comprehensive data governance platform for healthcare providers [4] Partnership Details - The new partner is recognized for driving measurable savings by vetting vendors and leveraging billions in spend through strategic purchasing across all 50 states [3] - SCWorx's data cleanse, normalization, and enrichment services were key factors in the partner's decision to collaborate, aiming to enhance their product offerings and deliver additional value to healthcare customers [3]

PART I - FINANCIAL INFORMATION [Item 1. Financial Statements (unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) Unaudited condensed consolidated financial statements for SCWorx Corp. as of June 30, 2025, and December 31, 2024, are presented [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20consolidated%20balance%20sheets%20as%20of%20June%2030%2C%202025%20(unaudited)%20and%20December%2031%2C%202024%20(audited)) Balance sheets show increased total assets from cash and receivables, decreased total liabilities, and higher stockholders' equity | Metric | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | Change | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Cash | $340,209 | $106,654 | +$233,555 | | Accounts receivable, net | $412,216 | $372,716 | +$39,500 | | Total current assets | $803,500 | $503,378 | +$300,122 | | Total assets | $6,645,933 | $6,345,811 | +$300,122 | | Total current liabilities | $1,187,640 | $1,836,549 | -$648,909 | | Total liabilities | $1,195,587 | $1,856,209 | -$660,622 | | Total stockholders' equity | $5,450,346 | $4,489,602 | +$960,744 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Unaudited%20condensed%20consolidated%20statements%20of%20operations%20for%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202025%20and%202024) SCWorx reported increased net losses for both the three and six months ended June 30, 2025, driven by higher interest expense and debt discount amortization | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Revenue | $682,632 | $742,027 | $1,402,931 | $1,554,126 | | Gross profit | $180,417 | $246,326 | $317,280 | $454,960 | | Loss from operations | $(293,527) | $(307,147) | $(627,524) | $(485,603) | | Interest expense | $(1,534,454) | $(30,166) | $(1,676,760) | $(30,369) | | Net loss | $(1,906,085) | $(337,313) | $(2,382,388) | $(515,972) | | Net loss per share, basic and diluted | $(0.46) | $(0.26) | $(0.78) | $(0.41) | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=8&type=section&id=Unaudited%20condensed%20consolidated%20statements%20of%20changes%20in%20stockholders%27%20equity%20for%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202025) Stockholders' equity increased for the six months ended June 30, 2025, primarily from common stock and additional paid-in capital | Metric | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Common stock shares outstanding | 6,420,558 | 1,859,525 | | Common stock ($) | $6,420 | $1,859 | | Additional paid-in capital | $38,802,340 | $35,463,769 | | Accumulated deficit | $(33,358,454) | $(30,976,066) | | Total stockholders' equity | $5,450,346 | $4,489,602 | - Shares issued for conversion of convertible loans and interest totaled **3,959,783 shares**, contributing **$1,596,122** to additional paid-in capital for the six months ended June 30, 2025[22](index=22&type=chunk) - Issuance of warrants in conjunction with convertible loans added **$1,385,000** to additional paid-in capital for the six months ended June 30, 2025[22](index=22&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Unaudited%20condensed%20consolidated%20statements%20of%20cash%20flows%20for%20the%20six%20months%20ended%20June%2030%2C%202025%20and%202024) For the six months ended June 30, 2025, SCWorx saw a net increase in cash, driven by financing activities offsetting operating cash use | Cash Flow Activity | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | | Net cash used in operating activities | $(1,056,454) | $(340,305) | | Net cash from investing activities | $0 | $0 | | Net cash provided by financing activities | $1,290,009 | $266,133 | | Net increase (decrease) in cash | $233,555 | $(74,172) | | Cash, end of period | $340,209 | $17,264 | - Non-cash financing activities included **$1,596,122** for shares issued for conversion of convertible loans and interest, and **$1,385,000** for warrants issued in conjunction with convertible loans for the six months ended June 30, 2025[27](index=27&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20unaudited%20condensed%20consolidated%20financial%20statements) These notes provide detailed information supporting the unaudited condensed consolidated financial statements, covering business, liquidity, policies, and debt [Note 1. Description of Business](index=11&type=section&id=Note%201.%20Description%20of%20Business) SCWorx Corp. provides health information technology solutions and services, focusing on data content, repair, normalization, and analytics for healthcare providers - SCWorx offers health information technology solutions and services for healthcare providers, specializing in data content, repair, normalization, interoperability, and big data analytics[30](index=30&type=chunk)[31](index=31&type=chunk) - The company's software platform improves healthcare processes by simplifying and organizing data, enabling interoperability, and providing a basis for sophisticated data analytics[31](index=31&type=chunk) - Solutions are delivered as Software-as-a-Service (SaaS) over typical three-to-five-year contracted terms, hosted in SCWorx data centers (AWS or RackSpace)[34](index=34&type=chunk) [Note 2. Liquidity and Going Concern](index=12&type=section&id=Note%202.%20Liquidity%20and%20Going%20Concern) SCWorx has incurred recurring operating losses and a significant accumulated deficit, raising substantial doubt about its ability to continue as a going concern - The Company incurred a net loss of **$2,382,388** for the six months ended June 30, 2025, and an accumulated deficit of **$33,358,454** as of June 30, 2025[36](index=36&type=chunk) - Recurring losses and expected continued cash outflows from operations indicate substantial doubt about the Company's ability to continue as a going concern within one year[36](index=36&type=chunk) [Note 3. Summary of Significant Accounting Policies](index=12&type=section&id=Note%203.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the significant accounting policies used in preparing the condensed consolidated financial statements, covering basis of presentation, revenue, and debt - The financial statements are prepared in accordance with U.S. GAAP and SEC regulations, and include all normal recurring accruals and adjustments[37](index=37&type=chunk)[39](index=39&type=chunk) - Revenue recognition follows ASC Topic 606, identifying distinct performance obligations and recognizing revenue as services are rendered or ratably over contract terms[49](index=49&type=chunk)[52](index=52&type=chunk)[54](index=54&type=chunk)[55](index=55&type=chunk)[57](index=57&type=chunk) | Customer | Revenue % (6 Months Ended June 30, 2025) | Accounts Receivable % (June 30, 2025) | Accounts Receivable % (December 31, 2024) | | :--------- | :--------------------------------------- | :------------------------------------ | :---------------------------------------- | | Customer A | 16% | 15% | 3% | | Customer B | 14% | 16% | 41% | | Customer C | 20% | 34% | 37% | [Note 4. Debt](index=19&type=section&id=Note%204.%20Debt) SCWorx's debt primarily consists of convertible notes issued in July 2024 and January 2025, totaling $2,655,000, with warrants issued in conjunction - The CARES Act PPP loan balance was reduced to **$0** as of June 30, 2025, from **$27,369** at December 31, 2024, following partial forgiveness and maturity extension[81](index=81&type=chunk) - Issued **$1,155,000** in convertible notes on July 15, 2024, bearing **10% interest**, convertible at **$1.43/share**, with detachable 5-year warrants for **4,887,118 shares**[83](index=83&type=chunk) - Issued **$1,500,000** in convertible notes on January 21, 2025, bearing **10% interest**, convertible at **$1.25/share**, with detachable 5-year warrants for **7,256,364 shares**[84](index=84&type=chunk) - Amortization expense on debt discounts was **$1,379,532** for the three months and **$1,458,243** for the six months ended June 30, 2025, significantly higher than the **$30,000** for the same periods in 2024[85](index=85&type=chunk)[62](index=62&type=chunk) [Note 5. Leases](index=20&type=section&id=Note%205.%20Leases) SCWorx primarily operates under a month-to-month lease for its principal executive office and has no other operating or financing leases - The Company's principal executive office is under a month-to-month arrangement with a base rent of **$250 per month**[86](index=86&type=chunk) | Lease Cost | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :---------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Operating lease cost | $1,011 | $1,198 | $2,203 | $2,133 | [Note 6. Commitments and Contingencies](index=20&type=section&id=Note%206.%20Commitments%20and%20Contingencies) SCWorx is involved in legal proceedings, faces a Nasdaq minimum bid price deficiency, and has pledged assets as collateral for loans - A legal settlement with Core IR for approximately **$502,000** (including interest) is being satisfied by issuing common stock; **501,250 shares** have been issued, with a balance of **$283,906** owed at December 31, 2024[90](index=90&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk) - The Company received a Nasdaq notification for failing to meet the minimum **$1** bid price requirement, with a compliance period until October 7, 2025; a reverse stock split may be implemented if compliance is not regained[91](index=91&type=chunk)[93](index=93&type=chunk)[94](index=94&type=chunk)[95](index=95&type=chunk) - The Company has pledged all its assets as collateral for **$2,655,000** in senior secured convertible notes issued between July 2024 and January 2025[97](index=97&type=chunk) [Note 7. Stockholders' Equity](index=22&type=section&id=Note%207.%20Stockholders%27%20Equity) SCWorx's stockholders' equity saw significant activity, including common stock issuance for legal settlements and convertible note conversions, and warrant issuance - As of June 30, 2025, the Company had **45,000,000** authorized common shares and **900,000** Series A convertible preferred shares[98](index=98&type=chunk) - Between March and May 2025, the Company issued **601,250 shares** of common stock for legal settlements, valued at **$362,010**[100](index=100&type=chunk)[101](index=101&type=chunk)[22](index=22&type=chunk) - Between February and June 2025, the Company issued **3,959,783 shares** of common stock for the conversion of **$1,426,071** in principal and **$170,051** in interest from convertible notes[103](index=103&type=chunk)[105](index=105&type=chunk)[22](index=22&type=chunk) - On January 21, 2025, warrants to purchase **7,256,364** common shares were issued in conjunction with convertible notes, valued at **$11,422,792** using the Black-Scholes model[106](index=106&type=chunk) | Warrant Grants | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Number of shares subject to warrants | 43,907,807 | 8,915,798 | | Weighted average exercise price per share | $0.41 | $0.92 | [Note 8. Net Loss per Share](index=26&type=section&id=Note%208.%20Net%20Loss%20per%20Share) Basic and diluted net loss per share are computed based on net loss and weighted average common shares outstanding, excluding anti-dilutive securities - Basic and diluted net loss per share for the six months ended June 30, 2025, was **$(0.78)**, compared to **$(0.41)** for the same period in 2024[19](index=19&type=chunk) | Security Type | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------ | :--------------------------- | :--------------------------- | | Stock options | 0 | 3,333 | | Warrants | 43,907,807 | 9,101 | | Restricted stock units | 122,274 | 163,996 | | Total common stock equivalents | 44,030,081 | 176,430 | [Note 9. Related Party Transactions](index=26&type=section&id=Note%209.%20Related%20Party%20Transactions) SCWorx has a payable to an officer for contract work, and a shareholder advance was fully remitted by June 30, 2025 - As of June 30, 2025, the Company had a payable of **$149,838** to an officer for contract work performed prior to becoming an officer[114](index=114&type=chunk) - A shareholder advance of **$67,622** outstanding at December 31, 2024, was fully remitted by June 30, 2025[115](index=115&type=chunk) [Note 10. Income Tax Provision](index=28&type=section&id=Note%2010.%20Income%20Tax%20Provision) SCWorx uses the asset and liability method for income taxes and has a full valuation allowance against deferred tax assets due to realization uncertainty - The Company has federal net operating loss carryforwards of approximately **$41.2 million** (June 30, 2025) and **$39.9 million** (December 31, 2024)[120](index=120&type=chunk) - State loss carryforwards were approximately **$20.5 million** (June 30, 2025) and **$19.3 million** (December 31, 2024)[120](index=120&type=chunk) - A full valuation allowance of approximately **$13,020,000** (June 30, 2025) and **$12,378,000** (December 31, 2024) has been established against deferred tax assets due to uncertainty of realization[121](index=121&type=chunk) [Note 11. Segment Reporting](index=28&type=section&id=Note%2011.%20Segment%20Reporting) SCWorx operates as a single reportable segment in health information technology solutions and services within the United States - The Company operates in a single segment: health information technology solutions and services, located solely in the United States[123](index=123&type=chunk)[124](index=124&type=chunk) - The Chief Executive Officer, as the Chief Operating Decision Maker, manages business activities as a single segment and uses consolidated profit and loss to evaluate performance[125](index=125&type=chunk) [Note 12. Subsequent Events](index=29&type=section&id=Note%2012.%20Subsequent%20Events) Subsequent to June 30, 2025, SCWorx issued common shares for convertible loan conversions, and a broker commission obligation expired - Between July 2, 2025, and August 6, 2025, the Company issued **1,460,534 shares** of common stock for the conversion of **$518,143** in principal and accrued interest on convertible loans[128](index=128&type=chunk) - A contract commitment with a registered broker for a **6%** commission on capital raised expired around July 17, 2025[129](index=129&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses SCWorx's financial condition, highlighting decreased revenue, increased net losses from higher interest expenses, and ongoing liquidity concerns [Corporate Information](index=30&type=section&id=Corporate%20Information) SCWorx Corp. was formed through a series of mergers and name changes, originating from SCWorx, LLC in 2016 - SCWorx Corp. was formed through a series of corporate transactions, including the merger of SCW LLC into SCWorx Acquisition Corp. in 2018, and the subsequent acquisition by Alliance MMA, Inc. in 2019, which then changed its name to SCWorx Corp[29](index=29&type=chunk)[131](index=131&type=chunk) [Our Business](index=30&type=section&id=Our%20Business) SCWorx provides health information technology solutions and services to healthcare providers, focusing on data normalization, interoperability, and big data analytics - SCWorx offers health information technology solutions and services for healthcare providers, specializing in data content, repair, normalization, interoperability, and big data analytics[132](index=132&type=chunk)[133](index=133&type=chunk) - The company's software platform aims to improve information flow, achieve supply chain cost reductions, decrease accounts receivables aging, and accelerate accurate billing[133](index=133&type=chunk) - Solutions are delivered via a Software-as-a-Service (SaaS) model, typically under three-to-five-year contracts, and sold through direct sales and strategic partnerships[137](index=137&type=chunk) [Results of Operations – Three Months Ended June 30, 2025 vs. 2024](index=32&type=section&id=Results%20of%20Operations%20%E2%80%93%20Three%20months%20ended%20June%2030%2C%202025%20as%20compared%20to%20the%20three%20months%20ended%20June%2030%2C%202024) For the three months ended June 30, 2025, SCWorx experienced decreased revenue and increased net loss, primarily due to higher other expenses | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Difference | | :-------------------- | :--------------------------- | :--------------------------- | :----------- | | Revenue | $682,632 | $742,027 | $(59,395) | | Cost of revenues | $502,215 | $495,701 | $6,514 | | Operating expenses | $473,944 | $553,473 | $(79,529) | | Other expense | $(1,612,558) | $(30,166) | $(1,582,392) | | Net loss | $(1,906,085) | $(337,313) | $(1,568,772) | - Revenue decreased by **$59,395**, primarily due to the expiration and non-renewal of certain customer contracts[139](index=139&type=chunk) - Other expenses increased significantly by **$1,582,392**, mainly due to the issuance of new interest-bearing convertible notes and the amortization of note discounts[142](index=142&type=chunk) [Results of Operations – Six Months Ended June 30, 2025 vs. 2024](index=32&type=section&id=Results%20of%20Operations%20%E2%80%93%20Six%20months%20ended%20June%2030%2C%202025%20as%20compared%20to%20the%20six%20months%20ended%20June%2030%2C%202024) For the six months ended June 30, 2025, SCWorx reported decreased revenue and a substantial increase in net loss, driven by higher other expenses | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Difference | | :-------------------- | :--------------------------- | :--------------------------- | :----------- | | Revenue | $1,402,931 | $1,554,126 | $(151,195) | | Cost of revenues | $1,085,651 | $1,099,166 | $(13,515) | | Operating expenses | $944,804 | $940,563 | $4,241 | | Other expense | $(1,754,864) | $(30,369) | $(1,724,495) | | Net loss | $(2,382,388) | $(515,972) | $(1,866,416) | - Revenue decreased by **$151,195**, primarily due to the expiration and non-renewal of certain customer contracts[146](index=146&type=chunk) - Other expenses increased significantly by **$1,724,495**, mainly due to the issuance of new interest-bearing convertible notes and the amortization of note discounts[149](index=149&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) SCWorx's cash position improved for the six months ended June 30, 2025, due to financing activities offsetting operating cash use | Cash Flow Activity | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | | Net cash used in operating activities | $(1,056,454) | $(340,305) | | Net cash from investing activities | $0 | $0 | | Net cash provided by financing activities | $1,290,009 | $266,133 | | Change in cash | $233,555 | $(74,172) | - Cash used in operating activities increased to approximately **$1,056,000** in 2025, mainly due to the net loss of **$2,382,000**, partially offset by non-cash adjustments like amortization of debt discount (**$1,458,000**)[152](index=152&type=chunk) - Cash provided by financing activities was approximately **$1,290,000** in 2025, primarily from proceeds from loans payable (**$1,385,000**)[155](index=155&type=chunk) [Liquidity and Going Concern](index=36&type=section&id=Liquidity%20and%20Going%20Concern) SCWorx faces substantial doubt about its ability to continue as a going concern due to recurring losses and insufficient capital, and is addressing a Nasdaq bid price deficiency - Recurring operating losses and insufficient capital resources raise substantial doubt about the Company's ability to continue as a going concern[157](index=157&type=chunk) - Nasdaq notified the Company of a minimum bid price deficiency, with a compliance period until October 7, 2025; a reverse stock split is planned if compliance is not regained[158](index=158&type=chunk)[159](index=159&type=chunk)[161](index=161&type=chunk) [Off-Balance Sheet Arrangements](index=36&type=section&id=Off-Balance%20Sheet%20Arrangements) As of June 30, 2025, and December 31, 2024, SCWorx did not have any off-balance sheet arrangements - The Company did not have any off-balance sheet arrangements as of June 30, 2025, and December 31, 2024[162](index=162&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, SCWorx is not required to provide quantitative and qualitative disclosures about market risk - SCWorx is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[163](index=163&type=chunk)[3](index=3&type=chunk) [Item 4. Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that SCWorx's disclosure controls were not effective as of June 30, 2025, due to internal control deficiencies, with no material changes in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=36&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Management concluded that SCWorx's disclosure controls and procedures were not effective as of June 30, 2025, due to internal control deficiencies - Disclosure Controls were not effective as of June 30, 2025, due to deficiencies in the design of internal controls and lack of segregation of duties[164](index=164&type=chunk) [Changes in Internal Control over Financial Reporting](index=37&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) There were no material changes in SCWorx's internal control over financial reporting during the three and six months ended June 30, 2025 - No material changes in internal control over financial reporting occurred during the three and six months ended June 30, 2025[166](index=166&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) SCWorx accrues liabilities for probable and estimable legal losses and is involved in an arbitration case with Core IR, settling a judgment via common stock [CorProminence d/b/a Core IR v. SCWorx](index=38&type=section&id=CorProminence%20d%2Fb%2Fa%20Core%20IR%20v.%20SCWorx) SCWorx is settling a **$502,000** judgment from an arbitration award to Core IR by issuing common stock, with **501,250 shares** issued as of May 21, 2025 - An arbitration award of **$461,856** to Core IR, which grew to approximately **$502,000** with interest, is being settled by issuing common stock[169](index=169&type=chunk) - As of May 21, 2025, the Company issued **159,776**, **191,250**, **230,000**, and **180,000 shares** of common stock in tranches to satisfy the settlement[169](index=169&type=chunk) [Item 1A. Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) As a smaller reporting company, SCWorx is not required to provide specific risk factor disclosures under this item - SCWorx is a smaller reporting company and is not required to provide risk factor information under this item[170](index=170&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) SCWorx has not sold any unregistered equity securities since the beginning of the six-month period ended June 30, 2025, that were not previously reported - No unregistered sales of equity securities have occurred since the beginning of the six-month period ended June 30, 2025, that were not previously reported[171](index=171&type=chunk) [Item 3. Defaults Upon Senior Securities](index=38&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to SCWorx for the reporting period - This item is not applicable[172](index=172&type=chunk) [Item 4. Mine Safety Disclosures](index=38&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to SCWorx for the reporting period - This item is not applicable[173](index=173&type=chunk) [Item 5. Other Information](index=38&type=section&id=Item%205.%20Other%20Information) There is no other information to report under this item - No other information to report[174](index=174&type=chunk) [Item 6. Exhibits](index=39&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including corporate documents, certifications, and XBRL data files [Exhibit Index](index=39&type=section&id=Exhibit%20Index) The exhibit index details various documents filed, such as the Certificate of Incorporation, By-laws, CEO and CFO certifications, and Inline XBRL documents - Key exhibits include Certificate of Incorporation, Amended and Restated By-laws, CEO and CFO certifications (Section 302 and 1350), Clawback Policy, and Inline XBRL documents[177](index=177&type=chunk) [Signatures](index=40&type=section&id=Signatures) The report is duly signed on behalf of SCWORX CORP. by its President and Chief Executive Officer, Timothy A. Hannibal, and its Chief Financial Officer, Christopher J. Kohler, on August 14, 2025 - The report was signed by Timothy A. Hannibal, President and Chief Executive Officer, and Christopher J. Kohler, Chief Financial Officer, on August 14, 2025[181](index=181&type=chunk)[183](index=183&type=chunk)

Core Insights - SCWorx Corp. has signed a new contract with northeast Florida's largest not-for-profit healthcare provider for its SaaS service and Workday data management assistance [1][2] - The healthcare provider manages over 1,400 beds and will utilize SCWorx's expertise for Workday implementation [2] - SCWorx's Foundation data management platform is recognized as essential for accurate data movement and integration with Workday [3] Company Overview - SCWorx offers a suite of SaaS-based data management solutions tailored for healthcare providers, focusing on data accuracy, cost savings, and operational efficiency [4] - The solution modules include Virtual Item Master, data cleansing, contract management, automated rebate management, and data analytics, among others [4] - The company aims to create a single source of information for healthcare providers' data governance and analytics needs [4]

[PART I - FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) Presents SCWorx Corp.'s unaudited condensed consolidated financial statements, including balance sheets, operations, equity, cash flows, and detailed notes [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Cash and total assets significantly increased from December 2024 to March 2025 due to financing, while total liabilities decreased Condensed Consolidated Balance Sheet Highlights | Metric | March 31, 2025 (Unaudited) ($) | December 31, 2024 (Audited) ($) | Change ($) | | :-------------------------------- | :--------------------------- | :-------------------------- | :--------------------------- | Condensed Consolidated Balance Sheet Highlights | Metric | March 31, 2025 (Unaudited) ($) | December 31, 2024 (Audited) ($) | Change ($) | | :-------------------------------- | :--------------------------- | :-------------------------- | :--------------------------- | | Cash | $1,072,416 | $106,654 | +$965,762 | | Accounts receivable, net | $175,233 | $372,716 | -$197,483 | | Total current assets | $1,314,474 | $503,378 | +$811,096 | | Total assets | $7,156,907 | $6,345,811 | +$811,096 | | Total current liabilities | $1,555,878 | $1,836,549 | -$280,671 | | Total liabilities | $1,562,915 | $1,856,209 | -$293,294 | | Total stockholders' equity | $5,593,992 | $4,489,602 | +$1,104,390 | [Unaudited Condensed Consolidated Statements of Operations](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) SCWorx reported decreased revenue and gross profit, increased operating and interest expenses, leading to a significantly higher net loss in Q1 2025 Condensed Consolidated Statements of Operations Highlights | Metric | Three Months Ended March 31, 2025 ($) | Three Months Ended March 31, 2024 ($) | Change (YoY) ($) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :--------------------------- | | Revenue | $720,299 | $812,099 | -$91,800 | | Cost of revenue | $583,436 | $603,465 | -$20,029 | | Gross profit | $136,863 | $208,634 | -$71,771 | | Total operating expenses | $470,860 | $387,090 | +$83,770 | | Loss from operations | $(333,997) | $(178,456) | -$(155,541) | | Interest expense | $(142,306) | $(203) | -$(142,103) | | Net loss | $(476,303) | $(178,659) | -$(297,644) | | Net loss per share, basic and diluted | $(0.25) | $(0.14) | -$(0.11) | - Revenue decreased by **$91,800**, primarily due to contract expiration and non-renewal[19](index=19&type=chunk)[123](index=123&type=chunk) - Interest expense significantly increased from **$203** in Q1 2024 to **$142,306** in Q1 2025, driven by new convertible notes and amortization of note discounts[19](index=19&type=chunk)[127](index=127&type=chunk) [Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) Stockholders' equity increased in Q1 2025 despite a net loss, driven by share issuances for settlements, loan conversions, and warrants Changes in Stockholders' Equity | Item | Three Months Ended March 31, 2025 ($) | Three Months Ended March 31, 2024 ($) | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Balances, December 31 | $4,489,602 | $3,853,449 | | Shares issued for legal settlement | $148,410 | - | | Shares issued for conversion of convertible loans and interest | $47,283 | - | | Issuance of warrants in conjunction with convertible loans | $1,385,000 | - | | Net loss | $(476,303) | $(178,659) | | Ending balance, March 31 | $5,593,992 | $3,704,275 | - The Company issued **191,250** common shares valued at **$148,410** for a legal settlement in Q1 2025[22](index=22&type=chunk)[89](index=89&type=chunk) - An aggregate of **54,980** common shares were issued for the conversion of **$40,000** in principal and **$7,283** in accrued interest from convertible loans[22](index=22&type=chunk)[90](index=90&type=chunk) - Warrants valued at **$1,385,000** were issued with convertible loans, contributing to additional paid-in capital[22](index=22&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash significantly increased in Q1 2025 due to substantial financing activities, despite higher cash usage in operations Condensed Consolidated Statements of Cash Flows Highlights | Cash Flow Activity | Three Months Ended March 31, 2025 ($) | Three Months Ended March 31, 2024 ($) | Change (YoY) ($) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :--------------------------- | | Net cash used in operating activities | $(404,621) | $(59,482) | -$(345,139) | | Net cash from investing activities | - | - | - | | Net cash provided by financing activities | $1,370,383 | $7,647 | +$1,362,736 | | Net increase (decrease) in cash | $965,762 | $(51,835) | +$1,017,597 | | Cash, end of period | $1,072,416 | $39,601 | +$1,032,815 | - Cash used in operating activities increased significantly to **$404,621** in Q1 2025, mainly due to net loss and decreases in accounts payable and deferred revenue[25](index=25&type=chunk)[130](index=130&type=chunk) - Cash provided by financing activities surged to **$1,370,383** in Q1 2025, primarily from **$1,385,000** in proceeds from loans payable[25](index=25&type=chunk)[133](index=133&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20unaudited%20condensed%20consolidated%20financial%20statements) These notes detail accounting policies, financial instruments, debt, equity, and other significant items impacting the company's financial position [Note 1. Description of Business](index=10&type=section&id=Note%201.%20Description%20of%20Business) SCWorx Corp. provides health IT solutions and services, focusing on data content, repair, normalization, and interoperability via a SaaS model - SCWorx provides data content and services for healthcare providers, specializing in data repair, normalization, and interoperability for big data analytics[28](index=28&type=chunk) - The software platform offers solutions for data normalization, interoperability, and big data analytics to improve healthcare processes and information flow[29](index=29&type=chunk) - SCWorx's software modules include Item Master File repair, CDM, contract, and rebate management, big data analytics, and data integration[30](index=30&type=chunk) - Solutions are delivered via a Software-as-a-Service (SaaS) model, typically with three-to-five-year contracted terms, hosted in AWS or RackSpace[32](index=32&type=chunk) [Note 2. Liquidity and Going Concern](index=11&type=section&id=Note%202.%20Liquidity%20and%20Going%20Concern) Recurring operating losses and an accumulated deficit raise substantial doubt about the Company's ability to continue as a going concern - The Company incurred a net loss of **$476,303** for Q1 2025 and **$1,136,225** for the year ended December 31, 2024[34](index=34&type=chunk) - The accumulated deficit as of March 31, 2025, was **$31,452,369**[34](index=34&type=chunk) - These conditions indicate substantial doubt about the Company's ability to continue as a going concern within one year[34](index=34&type=chunk) [Note 3. Summary of Significant Accounting Policies](index=11&type=section&id=Note%203.%20Summary%20of%20Significant%20Accounting%20Policies) Outlines key accounting principles for financial statements, including presentation, cash, fair value, revenue, and financial instruments [Basis of Presentation and Principles of Consolidation](index=11&type=section&id=Basis%20of%20Presentation%20and%20Principles%20of%20Consolidation) Unaudited consolidated financial statements adhere to U.S. GAAP and SEC regulations, consolidating SCWorx and its subsidiaries with intercompany eliminations - Financial statements are prepared in accordance with U.S. GAAP and SEC rules, including all normal recurring accruals and adjustments[35](index=35&type=chunk)[37](index=37&type=chunk) - The statements consolidate SCWorx and its wholly-owned subsidiaries, eliminating all material intercompany balances and transactions[36](index=36&type=chunk) [Cash](index=11&type=section&id=Cash) The Company holds cash exceeding the FDIC insured limit by **$762,641** as of March 31, 2025 - As of March 31, 2025, the Company had **$762,641** in cash deposits exceeding the FDIC insured limit of **$250,000**[38](index=38&type=chunk) [Fair Value of Financial Instruments](index=12&type=section&id=Fair%20Value%20of%20Financial%20Instruments) Fair value accounting uses a three-level hierarchy, prioritizing quoted prices in active markets (Level 1) and observable inputs (Level 2) - Fair value is the price received from selling an asset or paid to transfer a liability in an orderly transaction between market participants[39](index=39&type=chunk) - The fair value hierarchy categorizes inputs into Level 1 (quoted prices), Level 2 (observable inputs), and Level 3 (unobservable inputs)[39](index=39&type=chunk) [Fair value of stock options and warrants](index=12&type=section&id=Fair%20value%20of%20stock%20options%20and%20warrants) The Black-Scholes model calculates fair value for stock options and warrants, requiring management assumptions on expected life, forfeitures, and volatility - The Black-Scholes option-pricing model calculates the fair value of stock options and warrants[40](index=40&type=chunk) - Assumptions for the model include expected life, anticipated forfeitures, risk-free rate, and volatility of the Company's share price[40](index=40&type=chunk) [Concentration of Credit and Other Risks](index=12&type=section&id=Concentration%20of%20Credit%20and%20Other%20Risks) Credit risk is concentrated in cash and accounts receivable, with significant customer concentrations impacting both revenue and receivables - Financial instruments subject to significant credit risk are cash and accounts receivable[41](index=41&type=chunk) Significant Customer Concentrations | Customer | Revenue % (Q1 2025) (%) | Revenue % (Q1 2024) (%) | A/R % (March 31, 2025) (%) | A/R % (December 31, 2024) (%) | | :--------- | :-------------------- | :-------------------- | :----------------------- | :------------------------ | | Customer A | 15% | 14% | 23% | 11% | | Customer B | 14% | 12% | 19% | 18% | | Customer C | 19% | 18% | 26% | 20% | | Customer D | -% | 9% | -% | 15% | | Customer E | 7% | 5% | -% | 27% | [Allowance for Credit Losses](index=13&type=section&id=Allowance%20for%20Credit%20Losses) The Company uses an expected credit loss model, increasing the allowance to **$43,800** as of March 31, 2025 - The Company uses an expected credit loss model, considering historical loss rates, credit quality indicators, and current economic conditions[43](index=43&type=chunk) Allowance for Credit Losses | Metric | March 31, 2025 ($) | December 31, 2024 ($) | | :------------------------ | :------------- | :---------------- | | Allowance for credit losses | $43,800 | $20,000 | - The normal collection cycle for receivables ranges between **30** and **60** days[44](index=44&type=chunk) [Goodwill](index=13&type=section&id=Goodwill) Goodwill is the difference between acquisition cost and fair value of net assets, reviewed annually for impairment or more frequently if indicated - Goodwill is the difference between aggregate consideration paid for an acquisition and the fair value of net tangible and identified intangible assets acquired[45](index=45&type=chunk) - The Company reviews goodwill for impairment annually in Q4, or more frequently if events indicate potential impairment[45](index=45&type=chunk) [Revenue Recognition](index=13&type=section&id=Revenue%20Recognition) Revenue is recognized under ASC Topic 606, identifying distinct performance obligations like Data Normalization, SaaS, and Maintenance, based on stand-alone selling prices - Revenue is recognized in accordance with ASC Topic 606, using a five-step model to depict the transfer of promised goods or services[46](index=46&type=chunk)[47](index=47&type=chunk) - Key performance obligations include Data Normalization, Software-as-a-Service (SaaS), Maintenance, and Professional Services[48](index=48&type=chunk)[54](index=54&type=chunk) - SaaS and Maintenance revenues are recognized ratably over typical **three-to-five-year** contract terms, delivered via hosted software solutions[32](index=32&type=chunk)[51](index=51&type=chunk) Remaining Performance Obligations | Metric | March 31, 2025 ($) | December 31, 2024 ($) | | :-------------------------- | :------------- | :---------------- | | Remaining performance obligations (deferred revenue) | $332,833 | $354,083 | [Costs to Obtain and Fulfill a Contract](index=15&type=section&id=Costs%20to%20Obtain%20and%20Fulfill%20a%20Contract) Costs incurred to fulfill contracts, including those for performance obligations and general administrative expenses, are recognized and expensed when incurred - Costs to fulfill a contract are recognized and expensed when incurred, in accordance with ASC 340-40[56](index=56&type=chunk) [Cost of Revenues](index=15&type=section&id=Cost%20of%20Revenues) Cost of revenues primarily comprises data center hosting, consulting services, and maintenance for the Company's large data array - Cost of revenues primarily includes data center hosting costs, consulting services, and maintenance of the Company's large data array[57](index=57&type=chunk) [Convertible Debt and Amortization of Debt Discounts](index=15&type=section&id=Convertible%20Debt%20and%20Amortization%20of%20Debt%20Discounts) Debt proceeds with warrants and conversion features are allocated by fair value, with warrant values amortized as debt discounts; amortization was **$78,711** in Q1 2025 - Proceeds from debt instruments with warrants and conversion features are allocated based on the relative fair value of each instrument[58](index=58&type=chunk) - The value of warrants issued with convertible debt is recorded as a debt discount and amortized over the debt term[58](index=58&type=chunk) Amortization of Debt Discount | Metric | Three Months Ended March 31, 2025 ($) | Three Months Ended March 31, 2024 ($) | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Amortization of debt discount | $78,711 | $0 | [Contract Balances](index=15&type=section&id=Contract%20Balances) Contract liabilities, representing advance customer payments, totaled **$332,833** as of March 31, 2025, expected to be recognized as revenue within 12 months Contract Liabilities (Deferred Revenue) | Metric | March 31, 2025 ($) | December 31, 2024 ($) | | :------------------ | :------------- | :---------------- | | Contract liabilities | $332,833 | $354,083 | - The Company expects to recognize revenue related to current performance obligations within the next **12** months[55](index=55&type=chunk) [Income Taxes](index=15&type=section&id=Income%20Taxes) The Company uses the asset and liability method for income taxes, establishing a full valuation allowance against deferred tax assets due to realization uncertainty - The Company uses the asset and liability method for income taxes, measuring deferred tax assets and liabilities using enacted tax rates[61](index=61&type=chunk) - A valuation allowance has been established for deferred tax assets due to the uncertainty of realizing all benefits[62](index=62&type=chunk) - There was no income tax expense for the three months ended March 31, 2025, and 2024[64](index=64&type=chunk) [Stock-Based Compensation](index=16&type=section&id=Stock-Based%20Compensation) Stock-based compensation is measured at grant date fair value using Black-Scholes and recognized over vesting, relying on subjective assumptions - Stock-based compensation expense is measured at grant date fair value using a Black-Scholes option pricing model and recognized straight-line over the vesting period[65](index=65&type=chunk) - Calculations rely on subjective assumptions such as expected term, stock price volatility, and pre-vesting option forfeiture rate[67](index=67&type=chunk) [Loss Per Share](index=16&type=section&id=Loss%20Per%20Share) Basic and diluted net loss per share are computed per ASC 260, excluding **16,294,436** anti-dilutive common stock equivalents as of March 31, 2025 - Basic EPS is calculated by dividing net loss by the weighted average common shares outstanding[68](index=68&type=chunk) - Diluted EPS gives effect to all dilutive potential common shares, but excludes anti-dilutive securities[68](index=68&type=chunk) Anti-Dilutive Securities Excluded from EPS Calculation | Security Type | March 31, 2025 | March 31, 2024 | | :------------------------ | :------------- | :------------- | | Stock options | - | 3,333 | | Warrants | 16,172,162 | 9,101 | | Restricted stock units | 122,274 | 163,996 | | Total common stock equivalents | 16,294,436 | 176,430 | [Indemnification](index=16&type=section&id=Indemnification) The Company indemnifies customers against IP infringement and officers/directors for certain events, with no claims filed or liabilities recorded to date - The Company provides indemnification to customers against intellectual property infringement claims and to officers/directors for certain events[69](index=69&type=chunk)[70](index=70&type=chunk) - No such claims have been filed against the Company, and no liability has been recorded in the financial statements[69](index=69&type=chunk) [Contingencies](index=17&type=section&id=Contingencies) A liability for contingencies is accrued when probable and estimable; reasonably possible losses are disclosed, requiring significant judgment - A liability is recorded when a loss is probable and the amount can be reasonably estimated[71](index=71&type=chunk) - If a loss is reasonably possible and estimable, it is disclosed in the notes to the financial statements[71](index=71&type=chunk) [Use of Estimates](index=17&type=section&id=Use%20of%20Estimates) Financial statement preparation requires management estimates and assumptions, regularly evaluated, with actual results potentially differing materially - Management makes estimates and assumptions for financial reporting, including for allowance for doubtful accounts, long-lived assets, stock-based compensation, goodwill, and deferred income tax valuation allowances[73](index=73&type=chunk) - Actual results may differ materially and adversely from these estimates[73](index=73&type=chunk) [Recently Issued Accounting Pronouncements](index=17&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) The Company adopted ASU 2023-07 Segment Reporting, enhancing disclosures by requiring additional information on significant segment expenses - The Company adopted ASU 2023-07 Segment Reporting (Topic 280) as of its fiscal year December 31, 2024[75](index=75&type=chunk) - This guidance enhances reportable segment disclosures by requiring additional disclosures about significant segment expenses[75](index=75&type=chunk) [Note 4. Debt](index=17&type=section&id=Note%204.%20Debt) Details debt obligations, including a CARES Act loan and significant convertible notes issued in 2024 and 2025, increasing interest expense and debt discount amortization Debt Balances | Debt Type | March 31, 2025 ($) | December 31, 2024 ($) | | :-------------------------- | :------------- | :---------------- | | CARES Act Loan (remaining) | $12,752 | $27,369 | | Convertible loans payable, net of discounts (current) | $51,334 | - | | Convertible loans payable, net of discounts (long-term) | $7,037 | $19,660 | | Accrued interest for notes | $110,207 | $53,950 | - In July 2024, the Company issued **$1,155,000** in **10%** convertible notes due December 31, 2025, convertible at **$1.43** per share, and granted **4,887,118** detachable warrants[78](index=78&type=chunk) - In January 2025, the Company issued **$1,500,000** in **10%** convertible notes due January 21, 2027, convertible at **$1.25** per share, and granted **7,256,364** detachable warrants[79](index=79&type=chunk) - Amortization expense of debt discount was **$78,711** for the three months ended March 31, 2025[80](index=80&type=chunk) [Note 5. Leases](index=18&type=section&id=Note%205.%20Leases) The Company's main lease is a month-to-month Tampa office arrangement; short-term leases are off-balance sheet, and non-lease components are combined - The Company's principal executive office in Tampa, Florida, is under a month-to-month operating lease with a base rent of **$250** per month[81](index=81&type=chunk) - Leases with a probable term of **12** months or less are not recorded on the condensed consolidated balance sheets[82](index=82&type=chunk) Operating Lease Costs | Metric | Three Months Ended March 31, 2025 ($) | Three Months Ended March 31, 2024 ($) | | :---------------- | :-------------------------------- | :-------------------------------- | | Operating lease cost | $1,192 | $935 | [Note 6. Commitments and Contingencies](index=19&type=section&id=Note%206.%20Commitments%20and%20Contingencies) Commitments include a legal settlement with Core IR, a broker commission agreement for capital, and pledged assets as collateral for secured convertible notes - The Company settled an arbitration award with Core IR by agreeing to issue common stock valued at **$502,000**; **191,250** shares were issued by March 31, 2025, with a remaining balance of **$135,496**[85](index=85&type=chunk) - A **120-day** agreement with a registered broker obligates the Company to pay a **6%** commission on capital raised from introduced parties, expiring around July 17, 2025[86](index=86&type=chunk) - The Company has pledged all its assets as collateral for **$2,655,000** in senior secured convertible notes issued between July 15, 2024, and January 17, 2025[87](index=87&type=chunk) [Note 7. Stockholders' Equity](index=20&type=section&id=Note%207.%20Stockholders'%20Equity) Details authorized shares, common stock issuances for legal settlements and note conversions, and significant warrant issuances with convertible loans - The Company has **45,000,000** Common shares and **900,000** Series A convertible preferred shares authorized[88](index=88&type=chunk) - On March 14, 2025, **191,250** common shares were issued for a legal settlement, valued at **$148,410**[89](index=89&type=chunk) - Between February 3 and February 27, 2025, **54,980** common shares were issued for the conversion of **$40,000** principal and **$7,283** accrued interest from convertible notes[90](index=90&type=chunk) - On January 21, 2025, warrants to purchase **7,256,364** common shares were issued with convertible notes, valued at **$11,422,792** using the Black-Scholes model[91](index=91&type=chunk) Stock Incentive Plan Activity | Item | Balance at Dec 31, 2024 | Granted (Q1 2025) | Balance at Mar 31, 2025 | | :-------------------- | :---------------------- | :------------------ | :---------------------- | | Warrants (Number of shares) | 8,915,798 | 7,256,364 | 16,172,162 | | Restricted Stock Units (Number of shares) | 122,274 | - | 122,274 | [Note 8. Net Loss per Share](index=22&type=section&id=Note%208.%20Net%20Loss%20per%20Share) Diluted net loss per share computation excluded **16,294,436** anti-dilutive common stock equivalents as of March 31, 2025 - Basic net loss per share is computed by dividing net loss by the weighted average common shares outstanding[96](index=96&type=chunk) - Diluted net loss per share excludes securities that would have an anti-dilutive effect[96](index=96&type=chunk)[97](index=97&type=chunk) Anti-Dilutive Securities Excluded from Diluted EPS | Security Type | March 31, 2025 | March 31, 2024 | | :------------------------ | :------------- | :------------- | | Stock options | - | 3,333 | | Warrants | 16,172,162 | 9,101 | | Restricted stock units | 122,274 | 163,996 | | Total common stock equivalents | 16,294,436 | 176,430 | [Note 9. Related Party Transactions](index=23&type=section&id=Note%209.%20Related%20Party%20Transactions) The Company has a **$149,838** payable to an officer and a **$67,622** shareholder advance from a former CEO, both outstanding as of March 31, 2025 - As of March 31, 2025, the Company had a payable of **$149,838** due to an officer for contract work performed prior to becoming an officer[98](index=98&type=chunk) - A non-interest bearing shareholder advance of **$67,622** from the Company's former CEO and shareholder was outstanding as of March 31, 2025[99](index=99&type=chunk) [Note 10. Income Tax Provision](index=23&type=section&id=Note%2010.%20Income%20Tax%20Provision) The Company has federal NOL carryforwards of **$40.3 million** and state loss carryforwards of **$19.7 million**, with a **$12,481,000** valuation allowance - As of March 31, 2025, the Company had federal net operating loss carryforwards of approximately **$40.3 million** and state loss carryforwards of approximately **$19.7 million**[103](index=103&type=chunk) - A valuation allowance of approximately **$12,481,000** was established as of March 31, 2025, due to uncertainty regarding the realization of deferred tax assets[104](index=104&type=chunk) Income Tax Rate Reconciliation | Tax Rate Component | Percentage (%) | | :------------------------- | :--------- | | Statutory federal income tax rate | 21.00% | | State tax rate | 1.65% | | Valuation Allowance | (22.65)% | | Effective tax rate | 0.00% | [Note 11. Segment Reporting](index=23&type=section&id=Note%2011.%20Segment%20Reporting) The Company operates as a single segment in health IT solutions in the US, with the CEO evaluating performance using consolidated profit and loss - The Company operates in a single segment: health information technology solutions and services, located in the United States[107](index=107&type=chunk) - The Chief Executive Officer, as the CODM, manages business activities as a single operating and reportable segment and uses consolidated profit and loss to evaluate performance[108](index=108&type=chunk) [Note 12. Subsequent Events](index=24&type=section&id=Note%2012.%20Subsequent%20Events) Subsequent events include common share issuances for loan conversions and Core IR settlement, plus a Nasdaq non-compliance notification for minimum bid price - Between April 2 and May 12, 2025, the Company issued **1,302,948** common shares for the conversion of **$600,086** in principal and accrued interest on convertible loans[111](index=111&type=chunk) - On May 1, 2025, **230,000** common shares valued at **$138,000** were issued as part of the Core IR legal settlement[112](index=112&type=chunk) - On April 10, 2025, Nasdaq notified the Company of non-compliance with the **$1** minimum bid price requirement, granting a **180-day** compliance period until October 7, 2025[113](index=113&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 financial condition and operations, highlighting revenue decline, increased net loss, and ongoing liquidity challenges [Corporate Information](index=26&type=section&id=Corporate%20Information) SCWorx Corp. formed through mergers and name changes, implementing a 1-for-15 reverse stock split in October 2023 - SCWorx Corp. was formed through the merger of SCW LLC into SCWorx Acquisition Corp., later changing its name to SCWorx Corp[116](index=116&type=chunk) - A **1-for-15** reverse stock split of common stock was implemented on October 11, 2023[117](index=117&type=chunk) [Our Business](index=26&type=section&id=Our%20Business) SCWorx provides health IT solutions for data normalization, interoperability, and big data analytics to improve hospital processes via a SaaS model - SCWorx provides data content and services for healthcare providers, specializing in data repair, normalization, interoperability, and big data analytics[118](index=118&type=chunk) - The software platform aims to simplify, repair, and organize data, enable interoperability, and provide a basis for sophisticated data analytics[119](index=119&type=chunk) - Solutions are delivered as Software-as-a-Service (SaaS) over typical **three-to-five-year** contracted terms[121](index=121&type=chunk) [Results of Operations – Three months ended March 31, 2025 as compared to the three months ended March 31, 2024](index=27&type=section&id=Results%20of%20Operations%20%E2%80%93%20Three%20months%20ended%20March%2031,%202025%20as%20compared%20to%20the%20three%20months%20ended%20March%2031,%202024) Q1 2025 saw declining revenue and gross profit, increased operating and interest expenses, resulting in a significantly higher net loss year-over-year [Revenues](index=27&type=section&id=Revenues) Revenue decreased by **$91,800** to **$720,299** in Q1 2025, primarily due to expiring and non-renewed customer contracts - Revenue for Q1 2025 was **$720,299**, a decrease of **$91,800** from **$812,099** in Q1 2024[123](index=123&type=chunk) - The decrease was primarily attributed to the expiration and non-renewal of certain customer contracts[123](index=123&type=chunk) [Cost of revenues](index=28&type=section&id=Cost%20of%20revenues) Cost of revenues decreased by **$20,029** to **$583,436** in Q1 2025, mainly due to staffing reductions - Cost of revenues decreased to **$583,436** in Q1 2025 from **$603,465** in Q1 2024[125](index=125&type=chunk) - The decrease was primarily a result of staffing reductions[125](index=125&type=chunk) [Operating expenses](index=28&type=section&id=Operating%20expenses) Operating expenses increased by **$83,770** to **$470,860** in Q1 2025, driven by higher legal/professional fees and increased marketing efforts - Operating expenses increased by **$83,770** to **$470,860** in Q1 2025[126](index=126&type=chunk) - The increase was primarily due to approximately **$45,000** in higher legal and professional fees and increased marketing and sales efforts[126](index=126&type=chunk) - Operating expenses are expected to remain relatively flat for the rest of 2025, with the exception of marketing and advertising[126](index=126&type=chunk) [Other income (expense)](index=28&type=section&id=Other%20income%20(expense)) Other expenses significantly increased to **$142,306** in Q1 2025, solely due to higher interest expense from new convertible notes and amortization - Other expenses increased from **$203** in Q1 2024 to **$142,306** in Q1 2025[127](index=127&type=chunk) - This increase was due to the issuance of new interest-bearing convertible notes and the amortization of note discounts[127](index=127&type=chunk) [Net loss](index=28&type=section&id=Net%20loss) Net loss for Q1 2025 was **$476,303**, a significant increase from **$178,659** in Q1 2024, driven by factors detailed above - Net loss for Q1 2025 was **$476,303**, compared to **$178,659** for Q1 2024[128](index=128&type=chunk) Summary of Operating Results | Metric | March 31, 2025 ($) | March 31, 2024 ($) | Difference ($) | | :---------------------- | :------------- | :------------- | :--------- | | Revenue | $720,299 | $812,099 | $(91,800) | | Cost of revenues | $583,436 | $603,465 | $(20,029) | | Operating expenses | $470,860 | $387,090 | $83,770 | | Other expense | $(142,306) | $(203) | $(142,103) | | Net loss | $(476,303) | $(178,659) | $(297,644) | [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) Cash improved significantly in Q1 2025 from financing, despite increased operating cash usage; recurring losses raise going concern doubts [Cash Flows](index=28&type=section&id=Cash%20Flows) Net cash increased by **$965,762** in Q1 2025, primarily from **$1,370,383** in financing activities, offsetting operating cash usage Summary of Cash Flows | Cash Flow Activity | Three Months Ended March 31, 2025 ($) | Three Months Ended March 31, 2024 ($) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(404,621) | $(59,482) | | Net cash from investing activities | - | - | | Net cash provided by financing activities | $1,370,383 | $7,647 | | Change in cash | $965,762 | $(51,835) | [Operating Activities](index=28&type=section&id=Operating%20Activities) Cash used in operating activities increased to approximately **$405,000** in Q1 2025, due to net loss and decreases in payables/deferred revenue - Cash used in operating activities was approximately **$405,000** for Q1 2025[130](index=130&type=chunk) - Key factors included a net loss of **$476,000**, a **$140,000** decrease in accounts payable, and a **$21,000** decrease in deferred revenue, partially offset by a **$174,000** decrease in accounts receivable[130](index=130&type=chunk) [Investing Activities](index=28&type=section&id=Investing%20Activities) The Company had no investing activities during the three months ended March 31, 2025, or 2024 - The Company had no investing activities during the three months ended March 31, 2025, and 2024[132](index=132&type=chunk) [Financing Activities](index=28&type=section&id=Financing%20Activities) Cash provided by financing activities was **$1,370,383** in Q1 2025, mainly from **$1,385,000** in proceeds from loans payable - Cash provided by financing activities was **$1,370,383** for Q1 2025[133](index=133&type=chunk) - This consisted of **$1,385,000** in proceeds from loans payable, partially offset by approximately **$15,000** in loan repayments[133](index=133&type=chunk) [Liquidity and Going Concern](index=29&type=section&id=Liquidity%20and%20Going%20Concern) Recurring operating losses and insufficient capital raise substantial doubt about the Company's ability to continue as a going concern - Recurring operating losses and insufficient capital resources raise substantial doubt about the Company's ability to continue as a going concern[135](index=135&type=chunk) - The Company may not have sufficient capital from operations and existing financing to meet operating expenses and working capital requirements[135](index=135&type=chunk) [Off-Balance Sheet Arrangements](index=29&type=section&id=Off-Balance%20Sheet%20Arrangements) The Company had no off-balance sheet arrangements as of March 31, 2025, or December 31, 2024 - The Company did not have any off-balance sheet arrangements as of March 31, 2025, and December 31, 2024[136](index=136&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, SCWorx Corp. is not required to provide market risk disclosures - SCWorx Corp. is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[137](index=137&type=chunk) [Item 4. Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective as of March 31, 2025, due to design deficiencies and lack of segregation of duties [Evaluation of Disclosure Controls and Procedures](index=29&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective as of March 31, 2025, due to design deficiencies and lack of segregation of duties - Management concluded that the Company's disclosure controls and procedures were not effective as of March 31, 2025[138](index=138&type=chunk) - Ineffectiveness was attributed to deficiencies in the design of internal controls and a lack of segregation of duties[138](index=138&type=chunk) [Changes in Internal Control over Financial Reporting](index=29&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) No material changes in internal control over financial reporting occurred during Q1 2025 - No material changes in internal control over financial reporting occurred during the three months ended March 31, 2025[139](index=139&type=chunk) [PART II - OTHER INFORMATION](index=30&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section provides other required information, including legal proceedings, risk factors, equity sales, and exhibits [Item 1. Legal Proceedings](index=30&type=section&id=Item%201.%20Legal%20Proceedings) The Company is involved in legal proceedings, notably a **$461,856** arbitration award to Core IR, settled by issuing common stock - The Company received a final arbitration award of **$461,856** to Core IR, which later became a judgment of approximately **$502,000** including interest[142](index=142&type=chunk) - A settlement agreement was reached to issue common stock to Core IR with a value of **$502,000**[142](index=142&type=chunk) - The Company issued **159,776** shares in July 2024 and an additional **191,250** shares on March 14, 2025, under this agreement, with remaining balances included in accounts payable[142](index=142&type=chunk) [Item 1A. Risk Factors](index=30&type=section&id=Item%201A.%20Risk%20Factors) As a smaller reporting company, SCWorx Corp. is not required to provide risk factor disclosures under this item - SCWorx Corp. is a smaller reporting company and is not required to provide risk factor information under this item[143](index=143&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=30&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The Company has not sold any previously unreported unregistered equity securities since January 1, 2025 - The Company has not sold any unregistered equity securities not previously reported in a Form 8-K since the beginning of the three-month period ended March 31, 2025[144](index=144&type=chunk) [Item 3. Defaults Upon Senior Securities](index=30&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the Company - This item is not applicable[145](index=145&type=chunk) [Item 4. Mine Safety Disclosures](index=30&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company - This item is not applicable[146](index=146&type=chunk) [Item 5. Other Information](index=30&type=section&id=Item%205.%20Other%20Information) No other information is reported under this item - No other information is reported under this item[147](index=147&type=chunk) [Item 6. Exhibits](index=31&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with this Quarterly Report on Form 10-Q, including corporate documents, certifications, and XBRL data - The exhibit index includes corporate documents such as the Certificate of Incorporation and By-laws, as well as certifications from the CEO and CFO[150](index=150&type=chunk) - XBRL (eXtensible Business Reporting Language) documents are also filed as exhibits for interactive data[150](index=150&type=chunk) [Signatures](index=32&type=section&id=Signatures) The report is signed by Timothy A. Hannibal (CEO) and Christopher J. Kohler (CFO) on May 15, 2025 - The report is signed by Timothy A. Hannibal, President and Chief Executive Officer, and Christopher J. Kohler, Chief Financial Officer, on May 15, 2025[154](index=154&type=chunk)[156](index=156&type=chunk)

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]