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].
SCWorx (WORX) - 2024 Q4 - Annual Report