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]

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]

Revenue Performance - Revenue for the three months ended September 30, 2023 was $906,099, a decrease of 8.2% from $986,949 in the same period of 2022[143] - Revenue for the nine months ended September 30, 2023 was $2,894,647, a decrease of 3.8% from $3,010,322 in the same period of 2022[149] Cost of Revenues - Cost of revenues decreased to $666,808 for the three months ended September 30, 2023, down 3.8% from $693,353 in the prior year[144] - Cost of revenues for the nine months ended September 30, 2023 was $1,972,300, down 2.1% from $2,014,537 in the prior year[150] General and Administrative Expenses - General and administrative expenses increased by $264,558 to $1,097,273 for the three months ended September 30, 2023, primarily due to a one-time legal judgment of $461,856[145] - General and administrative expenses decreased by $536,199 to $2,328,209 for the nine months ended September 30, 2023, mainly due to decreases in stock-based compensation and other expenses[151] Net Loss - Net loss for the three months ended September 30, 2023 was $858,258, compared to a net loss of $399,523 for the same period in 2022, representing a 114.8% increase in losses[147] - Net loss for the nine months ended September 30, 2023 was $1,412,070, an improvement of 11.1% compared to a net loss of $1,589,432 for the same period in 2022[153] Cash Flow from Operating Activities - Net cash used in operating activities was $701,282 for the nine months ended September 30, 2023, compared to $434,399 in the prior year[155] - Cash used in operating activities was approximately $701,000 for the nine months ended September 30, 2023, primarily due to a net loss of approximately $1,412,000[156] - Cash used in operating activities for the nine months ended September 30, 2022, was approximately $434,000, with a net loss of approximately $1,589,000[157] Cash Flow from Financing Activities - Cash provided by financing activities was approximately $524,000 for the nine months ended September 30, 2023, including proceeds from the sale of common stock of approximately $573,000[159] - Cash provided by financing activities for the nine months ended September 30, 2022, was $725,050, consisting of net proceeds from a common stock placement[161] Other Financial Information - There were no investing activities reported for the nine months ended September 30, 2023, and 2022[158] - As of September 30, 2023, and December 31, 2022, the company did not have any off-balance sheet arrangements[162] - The company is classified as a smaller reporting company and is not required to provide certain market risk disclosures[163] Impact of COVID-19 - The company experienced disruptions in operations and customer acquisition due to the COVID-19 pandemic, impacting growth prospects[140]