Financial Performance - Revenue for the year ended December 31, 2023 was $3,804,943, a decrease of $233,245 or approximately 5.8% compared to $4,038,188 in 2022[180]. - The company reported a net loss of $3,981,144 for the year ended December 31, 2023, an increase in loss of $2,133,738 compared to the net loss of $1,847,406 in 2022[180]. - As of December 31, 2023, the company had a working capital deficit of $1,898,625 and an accumulated deficit of $29,839,841[183]. - The company is experiencing a working capital deficiency with negative cash flows from operations amounting to $806,164 for the year ended December 31, 2023, compared to $540,036 in 2022[190][191]. - The net loss for the year ended December 31, 2023, was $3,981,144, which is an increase from a net loss of $1,847,406 in 2022[191]. - The company anticipates a monthly cash burn of approximately $70,000, totaling around $800,000 over the next twelve months, if sufficient capital resources are secured[185]. - The company has raised substantial doubt about its ability to continue as a going concern due to insufficient capital resources and ongoing operating losses[183]. Revenue Recognition and Accounting Policies - Revenue recognition follows Topic 606, with performance obligations including Data Normalization, SaaS, Maintenance, and Professional Services[155]. - SaaS and Maintenance revenues are recognized ratably over the contract terms, starting from the service commencement date[158]. - Deferred revenue for contract liabilities was $378,583 as of December 31, 2023, down from $579,833 in 2022[162]. - The company expects to recognize sales related to existing performance obligations during 2024[159]. Customer and Market Focus - Significant customers include Customer A (12% revenue), Customer B (11%), Customer C (15%), Customer D (12%), Customer E (1%), and Customer F (5%) for the year ended December 31, 2023[150]. - SCWorx's software platform enhances data normalization and interoperability, leading to improved healthcare processes and analytics[138]. - The company focuses on assisting healthcare providers with data interoperability issues through direct sales and strategic partnerships[139]. - SCWorx's solutions aim to reduce supply chain costs and improve billing accuracy, contributing to operational efficiencies for healthcare providers[139]. Operational and Financial Management - The company has not recorded an allowance for credit losses as of December 31, 2023, indicating all receivables are deemed collectible[152]. - Management reviews goodwill for impairment annually, assessing qualitative factors to determine if a quantitative test is necessary[154]. - The company maintains cash deposits insured by the Federal Deposit Insurance Corporation up to $250,000, mitigating credit risk[146]. - Cost of revenues decreased by $88,688 to $2,535,865 for the year ended December 31, 2023, primarily due to a decrease in labor costs[181]. - General and administrative expenses decreased by $817,337 to $2,719,740 for the year ended December 31, 2023, mainly due to reductions in non-cash stock compensation and other expenses[181]. Financing and Future Outlook - The company issued 134,056 shares of common stock for gross proceeds of $572,906 during the year ended December 31, 2023 under its existing equity line of credit[184]. - The company generated $165,000 from investing activities in 2023 related to a potential reverse acquisition, while there were no investing activities in 2022[192]. - Net cash provided by financing activities was $483,138 in 2023, down from $718,423 in 2022, primarily from common stock placements[193]. - The company plans to fund future software development through cash flows from operations and proceeds from equity or debt financing, contingent on generating positive cash flows[188]. - If additional funds are not raised in the near term, the company may not be able to fully implement its business plan, adversely affecting its financial condition[186][187]. - The company expects to begin generating positive operating cash flows by the end of 2024 if sufficient funding is secured in the first half of 2024[190].
SCWorx (WORX) - 2023 Q4 - Annual Report