What changed in SCWorx Corp.'s 2024 10-K compared to 2023?

Across the narrative sections we track, SCWorx Corp. (WORX) added 117 paragraphs, removed 144, and edited 98 between the 2023 and 2024 10-K filings. The biggest movers are Item 1A. Risk Factors (+47/−56), Item 7. Management's Discussion & Analysis (+46/−57), Item 1. Business (+15/−21).

Did SCWorx Corp. add new Risk Factors in the 2024 10-K?

Yes — Item 1A Risk Factors shows 47 new/edited paragraphs and 56 removed paragraphs versus the 2023 10-K.

What changed in SCWorx Corp.'s MD&A (Item 7) in 2024?

Item 7 Management's Discussion & Analysis shows 46 new/edited paragraphs and 57 removed paragraphs year-over-year. Read the side-by-side diff to see exactly which revenue, margin, and outlook commentary was rewritten.

Did SCWorx Corp.'s Legal Proceedings (Item 3) change in 2024?

Item 3 shows 5 added/edited paragraphs and 6 removed paragraphs — usually indicating new litigation disclosed or settled cases removed.

Where does this WORX 10-K diff come from?

The source filings are SCWorx Corp.'s official 2023 and 2024 Form 10-K annual reports from SEC EDGAR. 10q10k.net parses each filing, aligns paragraphs by section (Item 1, 1A, 1C, 2, 3, 7, 7A), and highlights every added, removed and edited sentence side-by-side.

What changed in SCWorx Corp.'s 10-K — 2023 vs 2024

Paragraph-level year-over-year comparison of SCWorx Corp.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+117 added−144 removedSource: 10-K (2025-03-31) vs 10-K (2024-09-24)

Top changes in SCWorx Corp.'s 2024 10-K

117 paragraphs added · 144 removed · 98 edited across 7 sections

Item 1A. Risk Factors+47 / −56 · 39 edited
Item 7. Management's Discussion & Analysis+46 / −57 · 40 edited
Item 1. Business+15 / −21 · 13 edited
Item 3. Legal Proceedings+5 / −6 · 2 edited
Item 4. Mine Safety Disclosures+2 / −2 · 2 edited

Item 1. Business

Business — how the company describes what it does

13 edited+2 added−8 removed66 unchanged

2023 filing

2024 filing

Biggest changeOur principal competitors include: ● purchasing departments that have limited budgets and may be attempting to manually repair the item master file; ● large companies with a long list of products and services and small companies which may provide item master normalization and data cleanse services; and ● software companies or service providers, as well as small, specialized vendors, that provide complementary or competitive solutions in benchmarking or data analytics and data warehousing that may compete with our offerings. 4 Some of our actual and perceived competitors have advantages over us, such as longer operating histories, greater financial, technical, marketing or other resources, stronger brand and business user recognition, larger intellectual property portfolios, broader distribution and presence, and competitive pricing.

On November 30, 2018, the Company and certain of its stockholders agreed to cancel 6,510 shares of common stock. In June 2018, the Company began to collect subscriptions for common stock. From June to November 2018, the Company collected $1,250,000 in subscriptions and issued 3,125 shares of common stock to new third-party investors.

In June 2018, the Company began to collect subscriptions for common stock. From June to November 2018, the Company collected $1,250,000 in subscriptions and issued 3,125 shares of common stock to new third-party investors. On November 30, 2018, the Company and certain of its stockholders agreed to cancel 6,510 shares of common stock.

Historically, SCWorx has not experienced a material amount of contract cancellations; however, SCWorx sometimes experiences delays during contract implementation, and SCWorx accounts for them accordingly. Third Party License Fees SCWorx incorporates software licensed from various third-party vendors into its proprietary software. Stand-alone third-party software is also required to operate certain of SCWorx’s proprietary software and/or SaaS services.

Historically, SCWorx has not experienced a material amount of contract cancellations; however, SCWorx sometimes experiences delays during contract implementation, and SCWorx accounts for them accordingly. 5 Third Party License Fees SCWorx incorporates software licensed from various third-party vendors into its proprietary software. Stand-alone third-party software is also required to operate certain of SCWorx’s proprietary software and/or SaaS services.

SCWorx licenses these software products and pays the required license fees when such software is delivered to clients. Government Regulation Management believes that governmental regulation is not material to our current core data management business. 6 Intellectual Property We protect our intellectual property rights by relying on federal, state and common law rights, as well as contractual restrictions.

SCWorx licenses these software products and pays the required license fees when such software is delivered to clients. Government Regulation Management believes that governmental regulation is not material to our current core data management business. Intellectual Property We protect our intellectual property rights by relying on federal, state and common law rights, as well as contractual restrictions.

The license, maintenance and support fee is charged annually in advance, commencing either upon contract execution or deployment of the solution in live production. If the client purchases solutions on a term-based model, the client is billed periodically a combined access fee for a specified term, typically three to five years in length.

The license, maintenance and support fees are charged annually in advance, commencing either upon contract execution or deployment of the solution in live production. If the client purchases solutions on a term-based model, the client is billed periodically a combined access fee for a specified term, typically three to five years in length.

Any significant impairment of our intellectual property rights may harm our business or our ability to compete. Seasonality We do not believe that SCWorx’s revenues are impacted by seasonality. Employees As of December 31, 2023, we had 7 employees, of which 2 were management and finance and the rest in operations.

Any significant impairment of our intellectual property rights may harm our business or our ability to compete. Seasonality We do not believe that SCWorx’s revenues are impacted by seasonality. Employees As of December 31, 2024, we had 7 employees, of which 2 were management and finance and the rest in operations.

Further, our references to the URLs for these websites are intended to be inactive textual references only.

Further, our references to the URLs for these websites are intended to be inactive textual references only. 6

SCWorx’s data warehouse allows healthcare providers to effectively use the data contained in their environment and efficiently establish the supply chain as a leading driver of revenue cycle management. The data warehouse is updated as frequently as every five minutes without intervention.

SCWorx’s software solutions are delivered to clients within a fixed term period, typically a three-to-five-year contracted term, where such software is hosted in SCWorx data centers (Amazon Web Service’s “AWS” or RackSpace) and accessed by the client through a secure connection in a software as a service (“SaaS”) delivery method. 4 SCWorx currently sells its solutions and services in the United States to hospitals and health systems through its direct sales force and its distribution and reseller partnerships.

In this Annual Report, the terms “SCWorx”, “Alliance,” “Alliance MMA,” the “Company,” “we,” “us” and “our” refer to SCWorx, Corp. (f/k/a Alliance MMA, Inc.). Unless specified otherwise, the historical financial results in this Annual Report are those of SCWorx and its subsidiaries on a consolidated basis.

Our phone number is (844) 472-9679 and our website can be found at www.scworx.com. In this Annual Report, the terms “SCWorx”, “Alliance,” “Alliance MMA,” the “Company,” “we,” “us” and “our” refer to SCWorx, Corp. (f/k/a Alliance MMA, Inc.). Unless specified otherwise, the historical financial results in this Annual Report are those of SCWorx and its subsidiaries on a consolidated basis.

For example, besides our agnostic interoperability, additional key strengths include the SCWorx data warehouse, which exceeds 12 million items, SCWorx Big Data analytics and benchmarking. 5 Contracts, License and Service Fees SCWorx enters into agreements with its clients that specify the scope of the solution to be installed and/or services to be provided by SCWorx, as well as the agreed-upon aggregate price, applicable duration and the timetable for the associated licenses and services.

Contracts, License and Service Fees SCWorx enters into agreements with its clients that specify the scope of the solution to be installed and/or services to be provided by SCWorx, as well as the agreed-upon aggregate price, applicable duration and the timetable for the associated licenses and services.

(n/k/a SCW FL Corp.) in a stock-for-stock exchange transaction and changed Alliance’s name to SCWorx Corp., which is the Company’s current name, with SCW FL Corp. becoming the Company’s subsidiary. We are a Delaware corporation. Our principal executive offices are located at 100 S Ashley Dr, Suite 100 Tampa, FL 33602.

In addition, the financial impact of COVID-19 on the Company’s hospital customers could cause the hospitals to delay payments due to the Company for services, which could negatively impact the Company’s cash flows. Clients and Strategic Partners SCWorx continues to provide transformational data-driven solutions to some of the finest, most well-respected healthcare providers in the United States.

SCWorx currently sells its solutions and services in the United States to hospitals and health systems through its direct sales force and its distribution and reseller partnerships. Clients and Strategic Partners SCWorx continues to provide transformational data-driven solutions to some of the finest, most well-respected healthcare providers in the United States.

Removed

On March 16, 2020, in response to the COVID-19 pandemic, SCWorx established a wholly-owned subsidiary, Direct-Worx, LLC to endeavor to source and provide critical, difficult-to-find items for the healthcare industry which it has since ceased.

Added

In addition, our industry is evolving rapidly and is becoming increasingly competitive.

Removed

On October 6, 2023, following stockholder approval at the Company’s annual meeting, the Company amended its certificate of incorporation to implement a 1 for 15 reverse split of its common stock. The effect of the reverse stock split was to combine every 15 shares of outstanding common stock into one share of common stock.

Added

For example, besides our agnostic interoperability, additional key strengths include the SCWorx data warehouse, which exceeds 12 million items, SCWorx Big Data analytics and benchmarking.

Removed

The reverse stock split was effective at the opening of the trading day on October 11, 2023. The effects of the reverse stock split have been reflected in this Annual Report on Form 10-K for all periods presented. Our principal executive offices are located at 100 S Ashley Dr, Suite 100 Tampa, FL 33602. Our telephone number is (844) 472-9679.

Removed

The data warehouse is updated as frequently as every five minutes without intervention. ● ScanWorx — Our mobile perioperative closed loop scanning solution is driven by the SCWorx foundational data structure, and utilizes interoperable data exchanges to push and secure the customer’s enriched item master, all built around the customer’s internal business rules and chart of account requirements offering the following: ■ Cloud hosted mobile scanning solution, which automates the consumption of known and unknown implant device utilization during surgical procedures via intuitive Scanning or smart searching features. ■ All scanned device utilization will capture all available attributes, such as Global Trade Item Number, Lot, Serial numbers, expiration dates. ■ ScanWorx will establish the following connections with existing Enterprise Resource Planning (“ERP”) and Electronic Medical Record (“EMR”) enterprise systems for the following: ○ EMR — Daily scheduling feeds with case information ○ ERP — Bill-Only electronic purchase orders ○ EMR — Case closure with device utilization integration ■ ScanWorx has the ability to consume additional product utilization per case when provided by the EMR for surgical preference cards, central sterile processing products, and anesthesia gas. ■ ScanWorx will identify and automate the Item-Add process for unknown items introduced during surgical procedures based on customer’s existing business rules.

Removed

Impact of the COVID-19 Pandemic The Company’s operations and business have experienced disruption due to the unprecedented conditions surrounding the COVID-19 pandemic which spread throughout the United States and the world. The outbreak adversely impacted new customer acquisition. The Company has followed the recommendations of local health authorities to minimize exposure risk for its team members since the outbreak.

Removed

In addition, the Company’s customers (hospitals) also experienced extraordinary disruptions to their businesses and supply chains, while experiencing unprecedented demand for health care services related to COVID-19. As a result of these extraordinary disruptions to the Company’s customers’ business, the Company’s customers were focused on meeting the nation’s health care needs in response to the COVID-19 pandemic.

Removed

Thus, the Company believes that its customers were not able to focus resources on expanding the utilization of the Company’s services, which has adversely impacted the Company’s growth prospects, at least until the adverse effects of the pandemic subside.

Removed

Some of our actual and perceived competitors have advantages over us, such as longer operating histories, greater financial, technical, marketing or other resources, stronger brand and business user recognition, larger intellectual property portfolios, broader distribution and presence, and competitive pricing. In addition, our industry is evolving rapidly and is becoming increasingly competitive.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

39 edited+8 added−17 removed119 unchanged

2023 filing

2024 filing

Biggest changeEven if we are able to grow our revenues, they may not be sufficient to exceed increases in our operating expenses or to enable us to achieve or sustain profitability. Risks Related to Our Business There is substantial doubt about our ability to continue as a going concern.

Biggest changeThis decline in revenue may continue if we are unable to develop and market new products, which could help us increase our sales to existing customers or develop new customers. Even if we are able to grow our revenues, they may not be sufficient to exceed increases in our operating expenses or to enable us to achieve or sustain profitability.

Factors that could cause the market price of our common stock to fluctuate significantly include: ● the results of operating and financial performance and prospects of other companies in our industry; ● strategic actions by us or our competitors, such as acquisitions or restructurings; ● announcements of innovations, increased service capabilities, new or terminated customers or new, amended or terminated contracts by our competitors; 14 ● the public’s reaction to our press releases, media coverage and other public announcements, and filings with the SEC; ● market conditions for providers of services to the medical industry; ● lack of securities analyst coverage or speculation in the press or investment community about us or opportunities in the markets in which we compete; ● changes in government policies in the United States; ● changes in earnings estimates or recommendations by any securities or research analysts who track our common stock or failure of our actual results of operations to meet any such expectations; ● dilution caused by the conversion into common stock of convertible securities or by the exercise of outstanding warrants or options; ● market and industry perception of our success, or lack thereof, in pursuing our growth strategy; ● changes in accounting standards, policies, guidance, interpretations or principles; ● any lawsuit involving us, our services or our products; ● arrival and departure of key personnel; ● government investigations of our business activities; ● sales of common stock by us, our investors or members of our management team; and ● changes in general market, economic and political conditions in the United States and global economies or financial markets, including those resulting from natural or man-made disasters.

Factors that could cause the market price of our common stock to fluctuate significantly include: ● the results of operating and financial performance and prospects of other companies in our industry; ● strategic actions by us or our competitors, such as acquisitions or restructurings; ● announcements of innovations, increased service capabilities, new or terminated customers or new, amended or terminated contracts by our competitors; ● the public’s reaction to our press releases, media coverage and other public announcements, and filings with the SEC; 13 ● market conditions for providers of services to the medical industry; ● lack of securities analyst coverage or speculation in the press or investment community about us or opportunities in the markets in which we compete; ● changes in government policies in the United States; ● changes in earnings estimates or recommendations by any securities or research analysts who track our common stock or failure of our actual results of operations to meet any such expectations; ● dilution caused by the conversion into common stock of convertible securities or by the exercise of outstanding warrants or options; ● market and industry perception of our success, or lack thereof, in pursuing our growth strategy; ● changes in accounting standards, policies, guidance, interpretations or principles; ● any lawsuit involving us, our services or our products; ● arrival and departure of key personnel; ● government investigations of our business activities; ● sales of common stock by us, our investors or members of our management team; and ● changes in general market, economic and political conditions in the United States and global economies or financial markets, including those resulting from natural or man-made disasters.

In addition, any completed acquisition may not result in the intended benefits for other reasons and our acquisitions will involve a number of other risks, including: ● We may have difficulty integrating the acquired companies; ● Our ongoing business and management’s attention may be disrupted or diverted by transition or integration issues and the complexity of managing geographically or culturally diverse enterprises; ● We may not realize the anticipated cost savings or other financial benefits we anticipated; ● We may have difficulty retaining or hiring key personnel, customers and suppliers to maintain expanded operations; ● Our internal resources may not be adequate to support our operations as we expand, particularly if we are awarded a significant number of contracts in a short time period; 9 ● We may have difficulty retaining and obtaining any required regulatory approvals, licenses and permits; ● We may not be able to obtain additional equity or debt financing on terms acceptable to us or at all, and any such financing could result in dilution to our stockholders, impact our ability to service our debt within the scheduled repayment terms and include covenants or other restrictions that would impede our ability to manage our operations; ● We may have failed to, or be unable to, discover liabilities of the acquired companies during the course of performing our due diligence; and ● We may be required to record additional goodwill as a result of an acquisition, which will reduce our tangible net worth.

In addition, any completed acquisition may not result in the intended benefits for other reasons and our acquisitions will involve a number of other risks, including: ● We may have difficulty integrating the acquired companies; ● Our ongoing business and management’s attention may be disrupted or diverted by transition or integration issues and the complexity of managing geographically or culturally diverse enterprises; ● We may not realize the anticipated cost savings or other financial benefits we anticipated; ● We may have difficulty retaining or hiring key personnel, customers and suppliers to maintain expanded operations; ● Our internal resources may not be adequate to support our operations as we expand, particularly if we are awarded a significant number of contracts in a short time period; ● We may have difficulty retaining and obtaining any required regulatory approvals, licenses and permits; 8 ● We may not be able to obtain additional equity or debt financing on terms acceptable to us or at all, and any such financing could result in dilution to our stockholders, impact our ability to service our debt within the scheduled repayment terms and include covenants or other restrictions that would impede our ability to manage our operations; ● We may have failed to, or be unable to, discover liabilities of the acquired companies during the course of performing our due diligence; and ● We may be required to record additional goodwill as a result of an acquisition, which will reduce our tangible net worth.

To the extent that actual recoveries with respect to change orders or amounts subject to contract disputes or claims are less than the estimates used in our financial statements, the amount of any shortfall will reduce our future revenues and profits, and this could adversely affect our reported working capital and results of operations.

To the extent that actual recoveries with respect to change orders or amounts subject to contract disputes or claims are less than the estimates used in our consolidated financial statements, the amount of any shortfall will reduce our future revenues and profits, and this could adversely affect our reported working capital and results of operations.

Our intellectual property rights may not be sufficient to help us maintain our position in the market and our competitive advantages. Monitoring unauthorized uses of and enforcing our intellectual property rights can be difficult and costly. Legal intellectual property actions are inherently uncertain and may not be successful, and may require a substantial resources and management attention.

Our access to the financial markets and the pricing and terms we receive in the financial markets could be adversely impacted by various factors, including changes in financial markets and interest rates. Our future funding requirements will depend on many factors, including, but not limited to, the costs and timing of our future acquisitions.

Management considers such factors as the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of loss. To date, no such claims have been filed against our company and, as a result, no liability has been recorded in our financial statements.

Changes to these laws could have a material adverse impact on the revenue, profit or the operation of our business. 19 Disruptions in our information technology systems or security breaches of confidential customer information or personal employee information could have an adverse impact on our operations.

Changes to these laws could have a material adverse impact on the revenue, profit or the operation of our business. Disruptions in our information technology systems or security breaches of confidential customer information or personal employee information could have an adverse impact on our operations.

To prepare financial statements in conformity with GAAP, management is required to make estimates and assumptions as of the date of the financial statements that affect the reported values of assets and liabilities, revenues and expenses, and disclosures of contingent assets and liabilities.

To prepare financial statements in conformity with GAAP, management is required to make estimates and assumptions as of the date of the consolidated financial statements that affect the reported values of assets and liabilities, revenues and expenses, and disclosures of contingent assets and liabilities.

To continue our growth path, we expect to finance our future expansion plans through public or private equity offerings or debt financing. Additional funds may not be available when we need them on terms that are acceptable to us, or at all. We have recently encountered some difficulty in raising funds from external sources.

To continue our growth path, we may need to finance our future expansion plans through public or private equity offerings or debt financing. Additional funds may not be available when we need them on terms that are acceptable to us, or at all. We have recently encountered difficulty in raising funds from external sources.

Additionally, our competitors may develop the expertise, experience and resources to provide services that are equal or superior in price to our services, and we may not be able to maintain or enhance our competitive position. 12 Some of our competitors have already achieved greater market penetration than we have in the markets in which we compete, and some have greater financial and other resources than we do.

Additionally, our competitors may develop the expertise, experience and resources to provide services that are equal or superior in price to our services, and we may not be able to maintain or enhance our competitive position. 11 Some of our competitors have already achieved greater market penetration than we have in the markets in which we compete, and some have greater financial and other resources than we do.

These rules and regulations could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors or board committees or as executive officers. 16 If we do not manage our planned growth effectively, our revenue, business and operating results may be harmed.

These rules and regulations could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors or board committees or as executive officers. 15 If we do not manage our planned growth effectively, our revenue, business and operating results may be harmed.

Factors that may contribute to fluctuations include: ● our ability to effectively manage our working capital; ● our ability to satisfy customer demands in a timely and cost-effective manner; and ● pricing and availability of labor. 13 Actual results could differ from the estimates and assumptions that we use to prepare our financial statements.

Factors that may contribute to fluctuations include: ● our ability to effectively manage our working capital; ● our ability to satisfy customer demands in a timely and cost-effective manner; and ● pricing and availability of labor. 12 Actual results could differ from the estimates and assumptions that we use to prepare our financial statements.

The market price of our common stock also may be adversely affected by our issuance of shares of our capital stock or convertible securities in connection with future acquisitions, or in connection with our financing efforts. 15 We have never paid cash dividends on our common stock and do not anticipate paying any cash dividends on our common stock.

The market price of our common stock also may be adversely affected by our issuance of shares of our capital stock or convertible securities in connection with future acquisitions, or in connection with our financing efforts. 14 We have never paid cash dividends on our common stock and do not anticipate paying any cash dividends on our common stock.

Please refer to Item 3. Legal Proceedings of this Annual Report on Form 10-K for a detailed description of the pending legal actions and investigations. 17 Economic uncertainty impacts our business and financial results, and a renewed recession could materially affect us in the future.

Please refer to Item 3. Legal Proceedings of this Annual Report on Form 10-K for a detailed description of the pending legal actions and investigations. 16 Economic uncertainty impacts our business and financial results, and a renewed recession could materially affect us in the future.

If our reserves are inadequate or insurance coverage proves to be inadequate or unavailable, our business, financial condition, results of operations and prospects may suffer. 11 If we are required to reclassify independent contractors as employees, we may incur additional costs and taxes which could adversely affect our business, financial condition, results of operations and prospects.

If our reserves are inadequate or insurance coverage proves to be inadequate or unavailable, our business, financial condition, results of operations and prospects may suffer. 10 If we are required to reclassify independent contractors as employees, we may incur additional costs and taxes which could adversely affect our business, financial condition, results of operations and prospects.

As of December 31, 2023, the Company had goodwill of $5,842,433. We evaluate goodwill at least annually, and will do so more frequently if events or circumstances indicate that impairment may have occurred.

As of December 31, 2024, the Company had goodwill of $5,842,433. We evaluate goodwill at least annually, and will do so more frequently if events or circumstances indicate that impairment may have occurred.

For the year ended December 31, 2023, we did not have effective controls over financial reporting. Our management has identified material weaknesses in our internal controls related to deficiency in our ability to have proper segregation of duties.

For the year ended December 31, 2024, we did not have effective controls over financial reporting. Our management has identified material weaknesses in our internal controls related to deficiency in our ability to have proper segregation of duties.

We could lose business from a significant customer for a variety of reasons, including: ● the consolidation, merger or acquisition of an existing customer, resulting in a change in procurement strategies employed by the surviving entity that could reduce the amount of work we receive; ● our performance on individual contracts or relationships with one or more significant customers could become impaired due to another reason, which may cause us to lose future business with such customers and, as a result, our ability to generate income would be adversely impacted; ● key customers could slow or stop spending on initiatives related to projects we are performing for them due to increased difficulty in the markets as a result of economic downturns or other reasons. 10 Since many of our customer contracts allow our customers to terminate the contract without cause, our customers may terminate their contracts with us at will, which could impair our business, financial condition, results of operations and prospects.

We could lose business from a significant customer for a variety of reasons, including: ● the consolidation, merger or acquisition of an existing customer, resulting in a change in procurement strategies employed by the surviving entity that could reduce the amount of work we receive; ● our performance on individual contracts or relationships with one or more significant customers could become impaired due to another reason, which may cause us to lose future business with such customers and, as a result, our ability to generate income would be adversely impacted; 9 ● key customers could slow or stop spending on initiatives related to projects we are performing for them due to increased difficulty in the markets as a result of economic downturns or other reasons.

Legal Proceedings of this Annual Report on Form 10-K for a detailed description of the various actions and investigations for which we are obligated to indemnify our officers and directors.

Legal Proceedings of this Annual Report on Form 10-K for a detailed description of the various actions and investigations for which we are obligated to indemnify our officers and directors. Item 1B. Unresolved Staff Comments None.

The market price of our common stock has been highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control, including the following: ● our ability to obtain working capital financing; ● additions or departures of key personnel; ● sales of our common stock; ● our ability to execute our business plan; ● operating results that fall below expectations; ● regulatory developments; and ● economic and other external factors.

If we are unable to develop sufficient revenues and additional customers for our products and services, we may not generate enough revenue to sustain our business, and we may fail, in which case our stockholders would suffer a total loss of their investment. There can be no assurance that we will be able to continue as a going concern.

Our auditors have indicated in their report on our financial statements for the year ended December 31, 2023 that conditions exist that raise substantial doubt about our ability to continue as a going concern since we may not have sufficient capital resources from operations and existing financing arrangements to meet our operating expenses and working capital requirements. 8 As of December 31, 2023, we had only limited cash on hand, a working capital deficit of $1,898,625 and accumulated deficit of $29,839,841.

Our auditors have indicated in their report on our consolidated financial statements for the year ended December 31, 2024 that conditions exist that raise substantial doubt about our ability to continue as a going concern since we may not have sufficient capital resources from operations and existing financing arrangements to meet our operating expenses and working capital requirements.

Offers or availability for sale of a substantial number of shares of our common stock may cause the price of our common stock to decline.

These market fluctuations may also materially and adversely affect the market price of our common stock. Offers or availability for sale of a substantial number of shares of our common stock may cause the price of our common stock to decline.

We may not be able to reach agreements with such companies on favorable terms or at all. In completing acquisitions, we will rely upon the representations and warranties and indemnities made by the sellers with respect to each acquisition as well as our own due diligence investigation.

In completing acquisitions, we will rely upon the representations and warranties and indemnities made by the sellers with respect to each acquisition as well as our own due diligence investigation.

We may continue to incur operating and net losses in future periods. These losses may increase, and we may never achieve profitability for a variety of reasons, including increased competition, decreased growth in our target market and other factors described elsewhere in this “Risk Factors” section.

These losses may increase, and we may never achieve profitability for a variety of reasons, including increased competition, decreased growth in our target market and other factors described elsewhere in this “Risk Factors” section. If we cannot achieve sustained profitability, our stockholders may lose all or a portion of their investment in our company.

Our failure to adequately expand our direct sales force will impede our growth. We will need to expand and optimize our sales infrastructure in order to grow our customer base and our business. We plan to expand our account management/sales force when and if we have sufficient capital to do so.

We will need to expand and optimize our sales infrastructure in order to grow our customer base and our business. We plan to expand our account management/sales force when and if we have sufficient capital to do so. Identifying and recruiting qualified personnel and training them requires significant time, expense and attention.

Our tax filings are subject to review or audit by the U.S. Internal Revenue Service and state, local and foreign taxing authorities. We exercise judgment in determining our worldwide provision for income and other taxes and, in the ordinary course of our business, there may be transactions and calculations where the ultimate tax determination is uncertain.

We exercise judgment in determining our worldwide provision for income and other taxes and, in the ordinary course of our business, there may be transactions and calculations where the ultimate tax determination is uncertain.

We cannot predict the actions of market participants and, therefore, can offer no assurances that the market for our common stock will be stable or that our share price will appreciate over time. 18 Our stock price has been volatile .

These fluctuations may also cause short sellers to enter the market periodically in the belief that we will have poor results in the future. We cannot predict the actions of market participants and, therefore, can offer no assurances that the market for our common stock will be stable or that our share price will appreciate over time.

Our common stock may be affected by limited trading volume and price fluctuations, which could adversely impact the value of our common stock and our ability to grow our business. There has been limited trading in our common stock, and there can be no assurance that an active trading market in our common stock will either develop or be maintained.

There has been limited trading in our common stock, and there can be no assurance that an active trading market in our common stock will either develop or be maintained.

If any of the following risks occurs, our business, financial condition, results of operations and prospects could be materially and adversely affected.

If any of the following risks occurs, our business, financial condition, results of operations and prospects could be materially and adversely affected. In that event, the trading price of our common stock could decline, and you could lose part or all of your investment.

We exercise judgment in determining our provision for taxes in the United States that are subject to tax authority audit review that could result in additional tax liability and potential penalties that would negatively affect our net income. The amounts we record in intercompany transactions for services, licenses, funding and other items affects our potential tax liabilities.

We exercise judgment in determining our provision for taxes in the United States that are subject to tax authority audit review that could result in additional tax liability and potential penalties that would negatively affect our net income. Our tax filings are subject to review or audit by the U.S. Internal Revenue Service and state, local and foreign taxing authorities.

We currently have an immediate need for additional capital. If we are unable to obtain additional capital, we will not be able to implement our business strategy or successfully operate our business; however, additional financings will subject our existing stockholders to dilution.

There can be no assurance that we will be able to continue as a going concern. 7 We may need additional capital. If we are unable to obtain additional capital when required, we will not be able to implement our business strategy or successfully operate our business; however, additional financing will subject our existing stockholders to dilution.

We have a history of losses and may continue to incur losses in the future, which could negatively impact the trading value of our common stock. For the year ended December 31, 2023, our revenues were $3,804,943, and we had a net loss of $3,981,144.

Risks Related to Our Financial Results and Financing Plans We have a history of losses and may continue to incur losses in the future. We have a history of losses and may continue to incur losses in the future, which could negatively impact the trading value of our common stock.

Our current insurance policies may not provide adequate levels of coverage against all claims, and we may incur losses that are not covered by our insurance.

Any such misappropriation or disruption could cause significant harm to our reputation, lead to a loss of sales or profits or cause us to incur significant costs to reimburse third parties for damages. 18 Our current insurance policies may not provide adequate levels of coverage against all claims, and we may incur losses that are not covered by our insurance.

During the year ended December 31, 2023, we had a net loss of $3,981,144 and used $806,164 of cash in operations. We have historically incurred operating losses and may continue to incur operating losses for the foreseeable future. We believe that these conditions raise substantial doubt about our ability to continue as a going concern.

We have historically incurred operating losses and may continue to incur operating losses for the foreseeable future. We believe that these conditions raise substantial doubt about our ability to continue as a going concern. This may hinder our ability to obtain financing or may force us to obtain financing on less favorable terms than would otherwise be available.

In the event that the security of our information systems is compromised, confidential information could be misappropriated, and system disruptions could occur. Any such misappropriation or disruption could cause significant harm to our reputation, lead to a loss of sales or profits or cause us to incur significant costs to reimburse third parties for damages.

In the event that the security of our information systems is compromised, confidential information could be misappropriated, and system disruptions could occur.

For the year ended December 31, 2022, our revenues were $4,038,188, and we had a net loss of $1,847,406. At December 31, 2023, we had an accumulated deficit of $29,839,841. We incurred losses from operations of $1,450,662 for the year ended December 31, 2023 and $2,126,597 for the year ended December 31, 2022.

For the year ended December 31, 2024, our revenues were $2,989,599, and we had a net loss of $1,136,225. For the year ended December 31, 2023, our revenues were $3,804,943, and we had a net loss of $3,981,144. At December 31, 2024, we had an accumulated deficit of $30,976,066.

If we cannot achieve sustained profitability, our stockholders may lose all or a portion of their investment in our company. If we are unable to grow our revenue, we may never achieve or sustain profitability. To become profitable, we must, among other things, increase our revenues.

If we are unable to grow our revenue, we may never achieve or sustain profitability. To become profitable, we must, among other things, increase our revenues. Our total revenues declined approximately $815,000 (21%) to $2,989,599 in the year ended December 31, 2024 as compared to $3,804,943 in the year ended December 31, 2023.

Removed

In that event, the trading price of our common stock could decline, and you could lose part or all of your investment. 7 Risks Related to Our Financial Results and Financing Plans The COVID-19 pandemic has disrupted our business and the business of our hospital customers.

Added

We incurred losses from operations of $1,259,426 for the year ended December 31, 2024 and $1,450,662 for the year ended December 31, 2023. We may continue to incur operating and net losses in future periods.

Removed

The Company’s operations and business have experienced disruption due to the unprecedented conditions surrounding the COVID-19 pandemic which spread throughout the United States and the world. The outbreak adversely impacted new customer acquisition. The Company has followed the recommendations of local health authorities to minimize exposure risk for its team members since the outbreak.

Added

Risks Related to Our Business There is substantial doubt about our ability to continue as a going concern.

Removed

Added

As of December 31, 2024, we had only limited cash on hand, a working capital deficit of $1,333,171 and accumulated deficit of $30,976,066. During the year ended December 31, 2024, we had a net loss of $1,136,225 and used $1,084,292 of cash in operations.

Removed

Added

The Agreements related to the July and January Notes offerings restrict our ability to raise capital from third parties and contain full ratchet anti-dilution provisions. Consequently, if we need to raise additional capital, we would need the consent of the investors in the July and January Notes offerings.

Removed

In addition, the financial impact of COVID-19 on the Company’s hospital customers could cause the hospitals to delay payments due to the Company for services, which could negatively impact the Company’s cash flows. We have a history of losses and may continue to incur losses in the future.

Added

If we are unable to secure such consent, we would need to seek additional financing from such investors. There can be no assurance that such investors would be willing to provide us with additional capital on acceptable terms or at all.

Removed

Our total revenues declined approximately $233,000 (5.7%) to $3,804,943 in the year ended December 31, 2023 as compared to $4,038,188 in the year ended December 31, 2022. This decline in revenue may continue if we are unable to develop and market new products, which could help us increase our sales to existing customers or develop new customers.

Added

Since many of our customer contracts allow our customers to terminate the contract without cause, our customers may terminate their contracts with us at will, which could impair our business, financial condition, results of operations and prospects. Our failure to adequately expand our direct sales force will impede our growth.

Removed

This may hinder our ability to obtain financing or may force us to obtain financing on less favorable terms than would otherwise be available.

Added

As of March 18, 2025, there were an aggregate of 26,578,477 shares issuable under the July Notes and Warrants, the November Warrants, the January Notes and Warrants and under the Settlement Agreement with Core IR (estimated). All of these shares are registered on the Registration Statement of which this prospectus is a part.

Removed

Identifying and recruiting qualified personnel and training them requires significant time, expense and attention.

Added

We have not purchased life insurance covering any members of our senior management. Our common stock may be affected by limited trading volume and price fluctuations, which could adversely impact the value of our common stock and our ability to grow our business.

Removed

As of December 31, 2023, there were outstanding warrants to purchase an aggregate of 11,394 shares of our common stock at a weighted-average exercise price of $58.72 per share, all of which were exercisable as of such date.

Removed

As of December 31, 2023, there were outstanding options to purchase an aggregate of 3,333 shares of our common stock at a weighted-average exercise price of $39.60 per share, all of which were exercisable as of such date.

Removed

We have not purchased life insurance covering any members of our senior management. The markets in which we operate are highly competitive, rapidly changing and increasingly fragmented, and we may not be able to compete effectively, especially against competitors with greater financial resources or marketplace presence. We face competition from other SaaS companies.

Removed

Many of the companies with which we will compete have greater financial and technical resources than are available to us. Our failure to compete effectively could result in a significant loss of customers, which would adversely affect our operating results.

Removed

We need additional capital to support our operations and the growth of our business, and we cannot be certain that this capital will be available on reasonable terms when required, or at all. In order for us to grow and execute our business plan successfully, we require additional financing which may not be available on acceptable terms or at all.

Removed

If such financing is available, it may be dilutive to the equity interests of existing stockholders. Failure to obtain financing will have a material adverse effect on our financial position.

Removed

If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support the operation or growth of our business could be significantly impaired and our operating results may be harmed.

Removed

These fluctuations may also cause short sellers to enter the market periodically in the belief that we will have poor results in the future.

Removed

In addition, the securities markets from time to time experience significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our common stock.

Item 2. Properties

Properties — owned and leased real estate

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2024 filing

Biggest changeThe lease allows for the limited use of private offices, conference rooms, mail handling, videoconferencing, and certain other business services. We believe that our facilities are adequate for our current needs.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

2 edited+3 added−4 removed8 unchanged

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2024 filing

Biggest changeThe settlement agreement is filed as exhibit 10.5 to this annual report on Form 10-K. Hadrian Equities Partners, LLC et ano. v. SCWorx Corp, Case No. 22-cv-07096 (JLR) (S.D.N.Y) On August 19, 2022, Hadrian Equities Partners, LLC and the Phillip W.

Biggest changeSCWorx Corp, Case No. 22-cv-07096 (JLR) (S.D.N.Y) On August 19, 2022, Hadrian Equities Partners, LLC and the Phillip W.

Plaintiff have since entered into a settlement agreement dated December 1, 2023 (effective as of October 23, 2023) (as amended April 29, 2024), under which the Company agreed to pay Plaintiffs $20,000 and issue them 37,500 shares of common stock, all in full settlement of the claims made in the lawsuit.

Plaintiff has since entered into a settlement agreement dated December 1, 2023 (effective as of October 23, 2023) (as amended April 29, 2024), under which the Company agreed to pay Plaintiffs $20,000 and issue them 37,500 shares of common stock, all in full settlement of the claims made in the lawsuit.

Removed

The cash payment was made in July 2024, and the shares were issued in May 2024. Carole R. Bernstein, Esq. v. SCWorx Corp. As previously disclosed in the Company’s Form 10-Q for the quarter ended June 30, 2023, on June 7, 2023, Carole R.

Added

The settlement agreement is filed as exhibit 10.5 to our annual report on Form 10-K as filed with the SEC on September 24, 2024. On July, 18, 2024, the Company issued 159,776 shares of its common stock in the first tranche of payments under this agreement.

Removed

Bernstein, Esq. filed a complaint in the United States District Court for the Southern District of New York against the Company. The complaint alleged that the Company breached its engagement agreement with Ms. Bernstein by failing to pay legal fees when due. Ms. Bernstein sought to recover $69,164 fees owing for services, plus interest, costs, including her attorney’s fees.

Added

In connection with the Settlement Agreement, the Company and Core IR entered into a Registration Rights Agreement, pursuant to which the Company was required to file a resale registration statement with the Commission to register for resale the shares issuable upon under the Settlement Agreement as described above. Hadrian Equities Partners, LLC et ano. v.

Removed

The Company and the Plaintiff have since entered into a settlement agreement dated July 12, 2024, under which the Company agreed to pay Plaintiffs $80,000 in two equal installments of $40,000, the first of which was paid August 9, 2024, and the second of which is payable on or about October 9, 2024. Item 4.

Added

The Company has accrued for this liability which is included in accounts payable and accrued liabilities on the Company’s consolidated balance sheet at December 31, 2023. The cash payment was made in July 2024, and the shares were issued in May 2024. Item 4. Mine Safety Disclosures Not applicable. 20 PART II

Removed

Mine Safety Disclosures Not applicable. 21 PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 21 PART II Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 22 Item 6. [Reserved] 22 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 23 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 34 Item 8.

Biggest changeItem 4. Mine Safety Disclosures 20 PART II Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 21 Item 6. [Reserved] 21 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 22 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 32 Item 8.

Financial Statements and Supplementary Data 34 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 34 Item 9A. Controls and Procedures 34

Financial Statements and Supplementary Data 32 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 32 Item 9A. Controls and Procedures 32

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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2024 filing

Biggest changeThe effects of the reverse stock split have been reflected in this Annual Report on Form 10-K for all periods presented. 2023 2022 High Low High Low First Quarter $ 7.38 $ 4.80 $ 20.70 $ 10.50 Second Quarter $ 9.90 $ 3.18 $ 16.95 $ 9.75 Third Quarter $ 5.70 $ 2.72 $ 12.92 $ 9.03 Fourth Quarter $ 3.23 $ 1.65 $ 10.95 $ 5.70 Holders of Record As of September 23, 2024, there were 1,599,367 outstanding shares of common stock held by 433 stockholders of record.

Biggest changeThe effects of the reverse stock split have been reflected in this Annual Report on Form 10-K for all periods presented. 2024 2023 High Low High Low First Quarter $ 3.89 $ 1.20 $ 7.38 $ 4.80 Second Quarter $ 3.78 $ 1.70 $ 9.90 $ 3.18 Third Quarter $ 1.62 $ 0.98 $ 5.70 $ 2.72 Fourth Quarter $ 3.00 $ 0.90 $ 3.23 $ 1.65 Holders of Record As of March 31, 2025, there were 2,105,755 outstanding shares of common stock held by 434 stockholders of record.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

40 edited+6 added−17 removed76 unchanged

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2024 filing

Biggest changeIf we are unable to generate positive cash flows from operations, and/or raise additional funds (either through debt or equity), we will be unable to fund our software development expenditures, in which case, there could be an adverse effect on our business and results of operations. 32 Cash Flows Years ended December 31, 2023 2022 Net cash used in operating activities $ (806,164 ) $ (540,036 ) Net cash provided by investing activities 165,000 - Net cash provided by financing activities 483,138 718,423 Change in cash $ (158,026 ) $ 178,387 Our operations through December 31, 2023 have resulted in negative cash flows from operations of $806,164.

Biggest changeHowever, there can be no guarantee of success, and any shortfall may impact our ability to raise additional funds if needed. 30 Cash Flows Years ended December 31, 2024 2023 Net cash used in operating activities $ (1,084,292 ) $ (806,164 ) Net cash provided by investing activities - 165,000 Net cash provided by financing activities 1,099,510 483,138 Change in cash $ 15,218 $ (158,026 ) Our operations through December 31, 2024 have resulted in negative cash flows from operations of $1,084,292.

SCWorx currently sells its solutions and services in the United States to hospitals and health systems through its direct sales force and its distribution and reseller partnerships. 23 We currently host our solutions, serve our customers, and support our operations in the United States through an agreement with a third party hosting and infrastructure provider, RackSpace.

SCWorx currently sells its solutions and services in the United States to hospitals and health systems through its direct sales force and its distribution and reseller partnerships. We currently host our solutions, serve our customers, and support our operations in the United States through an agreement with a third party hosting and infrastructure provider, RackSpace.

Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to $250,000. 24 Fair Value of Financial Instruments Management applies fair value accounting for significant financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements.

Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to $250,000. Fair Value of Financial Instruments Management applies fair value accounting for significant financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements.

To determine revenue recognition for arrangements within the scope of Topic 606 we perform the following steps: ● Step 1: Identify the contract(s) with a customer ● Step 2: Identify the performance obligations in the contract ● Step 3: Determine the transaction price ● Step 4: Allocate the transaction price to the performance obligations in the contract ● Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation 26 We follow the accounting revenue guidance under Topic 606 to determine whether contracts contain more than one performance obligation.

To determine revenue recognition for arrangements within the scope of Topic 606 we perform the following steps: ● Step 1: Identify the contract(s) with a customer ● Step 2: Identify the performance obligations in the contract ● Step 3: Determine the transaction price ● Step 4: Allocate the transaction price to the performance obligations in the contract ● Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation 25 We follow the accounting revenue guidance under Topic 606 to determine whether contracts contain more than one performance obligation.

Contract Balances Contract assets arise when the revenue associated prior to our unconditional right to receive a payment under a contract with a customer ( i.e ., unbilled revenue) and are derecognized when either it becomes a receivable or the cash is received. There were no contract assets as of December 31, 2023 and 2022.

During the years ended December 31, 2023 and 2022, we completed the accounting for tax effects of the Tax Act under ASC 740. There were no impacts to the years ended December 31, 2023 and 2022. Stock-based Compensation Expense The Company accounts for stock-based compensation expense in accordance with the authoritative guidance on share-based payments.

During the years ended December 31, 2024 and 2023, we completed the accounting for tax effects of the Tax Act under ASC 740. There were no impacts to the years ended December 31, 2024 and 2023. Stock-based Compensation Expense The Company accounts for stock-based compensation expense in accordance with the authoritative guidance on share-based payments.

Investing Activities The Company received $165,000 in investing activities during the year ended December 31, 2023 related to a potential reverse acquisition. Under the terms of the agreement, all funds received by the Company were contributed upon the termination of the acquisition agreement. The Company did not have any investing activities during the year ended December 31, 2022.

Investing Activities The Company did not have any investing activities during the year ended December 31, 2024. The Company received $165,000 in investing activities during the year ended December 31, 2023 related to a potential reverse acquisition. Under the terms of the agreement, all funds received by the Company were contributed upon the termination of the acquisition agreement.

We expect to recognize sales relating to these existing performance obligations of during 2024. Costs to Fulfill a Contract Costs to fulfill a contract typically include costs related to satisfying performance obligations as well as general and administrative costs that are not explicitly chargeable to customer contracts.

We expect to recognize sales relating to these existing performance obligations of during 2025. Costs to Fulfill a Contract Costs to fulfill a contract typically include costs related to satisfying performance obligations as well as general and administrative costs that are not explicitly chargeable to customer contracts.

During the year ended December 31, 2023, we evaluated available evidence and concluded that we may not realize all the benefits of our deferred tax assets; therefore, a valuation allowance was established for our deferred tax assets. 28 ASC Topic 740-10-30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

During the year ended December 31, 2024, we evaluated available evidence and concluded that we may not realize all the benefits of our deferred tax assets; therefore, a valuation allowance was established for our deferred tax assets. 27 ASC Topic 740-10-30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 The following summary of our results of operations should be read in conjunction with our consolidated financial statements for the years ended December 31, 2023 and 2022.

Results of Operations Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 The following summary of our results of operations should be read in conjunction with our consolidated financial statements for the years ended December 31, 2024 and 2023.

We do not maintain contracts in which the period between when the entity transfers a promised good or service to a customer and when the customer pays for that good or service exceeds the one-year threshold. As of December 31, 2023, we had $378,583 of remaining performance obligations recorded as deferred revenue.

We do not maintain contracts in which the period between when the entity transfers a promised good or service to a customer and when the customer pays for that good or service exceeds the one-year threshold. As of December 31, 2024, we had $354,083 of remaining performance obligations recorded as deferred revenue.

Contract liabilities arise when customers remit contractual cash payments in advance of our company satisfying our performance obligations under the contract and are derecognized when the revenue associated with the contract is recognized when the performance obligation is satisfied. Deferred revenue for contract liabilities were $378,583 and $579,833 as of December 31, 2023 and 2022, respectively.

Contract liabilities arise when customers remit contractual cash payments in advance of our company satisfying our performance obligations under the contract and are derecognized when the revenue associated with the contract is recognized when the performance obligation is satisfied. Deferred revenue for contract liabilities were $354,083 and $378,583 as of December 31, 2024 and 2023, respectively.

These estimates relate to revenue recognition, the assessment of recoverability of goodwill and intangible assets, the assessment of useful lives and the recoverability of property, plant and equipment, the valuation and recognition of stock-based compensation expense, recognition and measurement of deferred income tax assets and liabilities, the assessment of unrecognized tax benefits, and others.

These estimates relate to revenue recognition, the assessment of recoverability of goodwill and intangible assets, the assessment of useful lives and the recoverability of property, plant and equipment, the allowances for credit losses, the valuation and recognition of stock-based compensation expense, recognition and measurement of deferred income tax assets and liabilities, the assessment of unrecognized tax benefits, equity of convertible debt, and others.

As of December 31, 2023 and 2022, we had 273,059 and 180,390, respectively, common stock equivalents outstanding. 29 Indemnification We provide indemnification of varying scope to certain customers against claims of intellectual property infringement made by third parties arising from the use of our software.

As of December 31, 2024 and 2023, we had 9,048,072 and 180,390, respectively, common stock equivalents outstanding. 28 Indemnification We provide indemnification of varying scope to certain customers against claims of intellectual property infringement made by third parties arising from the use of our software.

For each significant customer, revenue as a percentage of total revenue and accounts receivable as a percentage of total net accounts receivable are as follows: Revenue For the years ended Accounts Receivable December 31, December 31, Customers 2023 2022 2023 2022 Customer A 12 % 12 % 7 % 12 % Customer B 11 % 10 % 22 % 10 % Customer C 15 % 14 % 12 % 15 % Customer D 12 % 12 % 7 % 6 % Customer E 1 % - % 15 % - % Customer F 5 % 5 % - % 30 % Allowance for Credit Losses Accounts receivable are comprised of amounts billed and currently due from customers.

For each significant customer, revenue as a percentage of total revenue and accounts receivable as a percentage of total net accounts receivable are as follows: Revenue For the years ended Accounts Receivable December 31, December 31, Customers 2024 2023 2024 2023 Customer A 15 % 12 % 11 % 7 % Customer B 13 % 11 % 18 % 22 % Customer C 20 % 15 % 20 % 12 % Customer D 3 % 12 % - % 7 % Customer E - % 1 % - % 15 % Customer F 7 % 5 % 27 % - % Allowance for Credit Losses Accounts receivable are comprised of amounts billed and currently due from customers.

Operating Activities Net cash used in operating activities was $806,164 for the year ended December 31, 2023, mainly related to the net loss of $3,981,144, a decrease in deferred revenue obligations of $201,250 and an increase in net accounts receivable of $16,780, partially offset by non-cash stock-based compensation of $361,363 related to various equity awards to employees and non-employees, $48,000 in bad debt expense, a $25,647 decrease in prepaid expenses and an increase of $433,966 in accounts payable and accrued liabilities.

Net cash used in operating activities was approximately $806,000 for the year ended December 31, 2023, mainly related to the net loss of $3,981,000, a decrease in deferred revenue obligations of $201,000 and an increase in net accounts receivable of $17,000, partially offset by non-cash stock-based compensation of $361,000 related to various equity awards to employees and non-employees, $48,000 in bad debt expense, a $26,000 decrease in prepaid expenses and an increase of $434,000 in accounts payable and accrued liabilities.

SCWorx’s software solutions are delivered to its clients within a fixed term period, typically a three-to-five-year contracted term, where such software is hosted in SCWorx data centers (Amazon Web Service’s “AWS” or RackSpace) and accessed by such clients through a secure connection in a software as a service (“SaaS”) delivery method.

SCWorx provides these solutions through a combination of direct sales and relationships with strategic partners. 22 SCWorx’s software solutions are delivered to its clients within a fixed term period, typically a three-to-five-year contracted term, where such software is hosted in SCWorx data centers (Amazon Web Service’s “AWS” or RackSpace) and accessed by such clients through a secure connection in a software as a service (“SaaS”) delivery method.

Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

Consequently, we have an immediate need for additional capital to fund our operations and the implementation of our business plan. Based on our current business plan, if we had sufficient capital resources, we anticipate that our operating activities would use a net of approximately $70,000 in cash per month over the next twelve months, or approximately $800,000.

Based on our current business plan, if we had sufficient capital resources, we anticipate that our operating activities would use a net of approximately $70,000 in cash per month over the next twelve months, or approximately $800,000.

All material intercompany balances and transactions have been eliminated in consolidation. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. Cash Cash is maintained with various financial institutions.

Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. 23 Cash Cash is maintained with various financial institutions. Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash deposits.

If we are able to raise additional capital during first half of 2024 and generate additional revenue through the acquisition of new customers, we believe we may begin to generate positive operating cash flows by the end of 2024.

We intend to use the additional capital raised during January 2025 to generate additional revenue through the acquisition of new customers, and believe we may begin to generate positive operating cash flows by the end of 2025.

Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). The accompanying consolidated financial statements include the accounts of SCWorx and its wholly-owned subsidiaries.

Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with GAAP and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). The accompanying consolidated financial statements include the accounts of SCWorx and its wholly-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation.

The Company’s clients are geographically dispersed throughout the country. The Company’s focus is to assist healthcare providers with issues that they have pertaining to data interoperability. SCWorx provides these solutions through a combination of direct sales and relationships with strategic partners.

The Company’s clients are geographically dispersed throughout the country. The Company’s focus is to assist healthcare providers with issues that they have pertaining to data interoperability.

When these services are not combined with SaaS or Maintenance revenues as a single unit of accounting, these revenues are recognized as the services are rendered and when contractual milestones are achieved and accepted by the customer. 27 SaaS and Maintenance SaaS and Maintenance revenues are recognized ratably over the contract terms beginning on the commencement date of each contract, which is the date on which our service is made available to customers.

The Company employs an expected credit loss model utilizing historical loss rates and historical trends in credit quality indicators (e.g., delinquency, risk ratings), adjusted to reflect current economic conditions and knowledge or customer relationships. 24 Management considers the following factors when determining the collectability of specific customer accounts: customer creditworthiness, past transaction history with the customer, current industry trends, changes in customer payment terms, and specific customer situations.

This decrease was primarily due decreases in non-cash stock compensation expense of approximately $780,000, legal and professional fees of approximately $87,000, inventory write-downs of approximately $157,000 and bad debt expense of approximately $30,000, partially offset by to an increase in accruals for legal settlement of approximately $462,000.

This decrease was primarily due to decreases in non-cash stock compensation expense of approximately $361,000, salaries and wages of $43,000, and bad debt expense of approximately $23,000, partially offset by an increase in Accounting fees of approximately $89,000 and legal and professional fees of approximately $53,000.

Some contracts have payment terms that differ from the timing of revenue recognition, which requires us to assess whether the transaction price for those contracts include a significant financing component.

SaaS and Maintenance SaaS and Maintenance revenues are recognized ratably over the contract terms beginning on the commencement date of each contract, which is the date on which our service is made available to customers. 26 Some contracts have payment terms that differ from the timing of revenue recognition, which requires us to assess whether the transaction price for those contracts include a significant financing component.

We believe that these conditions raise substantial doubt about our ability to continue as a going concern. This may hinder our future ability to obtain financing or may force us to obtain financing on less favorable terms than would otherwise be available.

This may hinder our ability to obtain financing or may force us to obtain financing on less favorable terms than would otherwise be available.

Balances which remain outstanding after reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable The Company has assessed all receivables are collectable and did not record an allowance for credit losses as of December 31, 2023 and 2022. 25 Leases We determine if an arrangement is a lease at inception.

Off-Balance Sheet Arrangements As of December 31, 2023 and 2022, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K. 33

Contractual Cash Obligations Refer to Note 8, Commitments and Contingencies, in the accompanying consolidated financial statements for additional detail. 31 Off-Balance Sheet Arrangements As of December 31, 2024 and 2023, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.

The current portion of lease obligations are included in accounts payable and accrued liabilities on the consolidated balance sheets. Right-of-use (“ROU”) assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease.

Right-of-use (“ROU”) assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term.

Recently Issued Accounting Pronouncements From time to time, new accounting pronouncements are issued by FASB that are adopted by the Company as of the specified effective date.

Recently Issued Accounting Pronouncements From time to time, new accounting pronouncements are issued by FASB that are adopted by the Company as of the specified effective date. If not discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s financial statements upon adoption.

Financing Activities Net cash provided by financing activities was $483,138 for the year ended December 31, 2023. This consisted of $572,906 in proceeds from a common stock placement and $193,558 in proceeds from advances, partially offset by repayments of $193,558 in proceeds from advances, $57,390 in repayments on notes payable and $32,378 in payments on shareholder advance.

This consisted of $573,000 in proceeds from a common stock placement and $194,000 in proceeds from advances, partially offset by repayments of $194,000 in proceeds from advances, $57,000 in repayments on notes payable and $32,000 in payments on shareholder advance.

As of December 31, 2023, we had a working capital deficit of $1,898,625 and accumulated deficit of $29,839,841. During the year ended December 31, 2023, we had a net loss of $3,981,144 and used $806,164 of cash in operations. We have historically incurred operating losses and may continue to incur operating losses for the foreseeable future.

During the year ended December 31, 2024, we had a net loss of $1,136,225 and used $1,084,292 of cash in operations. We have historically incurred operating losses and may continue to incur operating losses for the foreseeable future. We believe that these conditions raise substantial doubt about our ability to continue as a going concern.

Our operating results for the years ended December 31, 2023 and 2022 are summarized as follows: Years ended December 31, 2023 December 31, 2022 Difference Revenue $ 3,804,943 $ 4,038,188 $ (233,245 ) Cost of revenues 2,535,865 2,624,553 (88,688 ) General and administrative 2,719,740 3,537,077 (817,337 ) Other income (expense) (2,530,482 ) 276,036 (2,806,518 ) Provision for income taxes - - - Net loss $ (3,981,144 ) $ (1,847,406 ) $ (2,133,738 ) Revenues Revenue for the year ended December 31, 2023 was $3,804,943, compared to $4,038,188 in revenue for the year ended December 31, 2022.

Our operating results for the years ended December 31, 2024 and 2023 are summarized as follows: Years ended December 31, 2024 December 31, 2023 Difference Revenue $ 2,989,599 $ 3,804,943 $ (815,344 ) Cost of revenues 2,243,614 2,535,865 (292,251 ) Operating expenses 2,005,411 2,719,740 (714,329 ) Other income (expense) 123,201 (2,530,482 ) 2,653,683 Provision for income taxes - - - Net loss $ (1,136,225 ) $ (3,981,144 ) $ 2,844,919 29 Revenues Revenue for the year ended December 31, 2024 was $2,989,599, compared to $3,804,943 in revenue for the year ended December 31, 2023.

Management considers the following factors when determining the collectability of specific customer accounts: customer creditworthiness, past transaction history with the customer, current industry trends, changes in customer payment terms, and specific customer situations. The Company’s normal collection cycle ranges between thirty and 60 days. Estimated uncollectible amounts are charged to earnings and a credit to a valuation allowance.

The Company’s normal collection cycle ranges between thirty and 60 days. Estimated uncollectible amounts are charged to earnings and a credit to a valuation allowance.

The decline in revenue is primarily related to a slight decrease in overall revenues from SaaS customer sales during the period due to fluctuations in our customer base. Cost of Revenues Cost of revenues for the year ended December 31, 2023 was $2,535,865, compared to $2,624,553 for the year ended December 31, 2022.

This decrease was primarily due to the expiration and non-renewal of certain customer contracts. Cost of Revenues Cost of revenues for the year ended December 31, 2024 was $2,243,614, compared to $2,535,865 for the year ended December 31, 2023. The $292,251 decrease is primarily related to a decrease in labor costs during the current year.

We expect general and administrative expenses (excluding non-cash compensation expenses) to remain relatively flat during 2024 with the exception of increases in our sales force. We had other losses of $2,530,482 During the year ended December 31, 2023 consisting of write-down of goodwill of $2,524,034 and interest expense of $6,448.

We had other losses of $2,530,482 during the year ended December 31, 2023 consisting of write-down of goodwill of $2,524,034 and interest expense of $6,448. Liquidity and Capital Resources Going Concern As of December 31, 2024, we had only limited cash on hand, a working capital deficit of $1,333,171 and accumulated deficit of $30,976,066.

Currently we have only limited cash on hand, and consequently, we are unable to implement our current business plan. Accordingly, we have an immediate need for additional capital to fund our operating activities. In order to remedy this liquidity deficiency, we have cut spending and are actively seeking to raise additional funds through the sale of equity and debt securities.

Liquidity As of year-end, we experienced a working capital deficiency, had limited cash on hand, and we are experiencing negative cash flows from operations. Consequently, we had an immediate need for additional capital to fund our operations and the implementation of our business plan.

Net cash used in operating activities was $540,036 for the year ended December 31, 2022, mainly related to the net loss of $1,847,406 and a gain on forgiveness of PPP Loans of $279,191, partially offset by non-cash stock-based compensation of $1,141,932 related to various equity awards to employees and non-employees, $78,125 in bad debt expense, and a $156,600 decrease in inventory valuation.

Operating Activities Net cash used in operating activities was approximately $1,084,000 for the year ended December 31, 2024, mainly related to the net loss of approximately $1,136,000, a gain on forgiveness of accounts payable of $227,000, and a $93,000 increase in accounts receivable, partially offset by amortization of discounts on debt agreements of $50,000, common stock issued for settlement of payables and legal settlements of $346,000, and a $39,000 decrease in accounts payable and accrued liabilities, and credit loss expense of $25,000.

Removed

Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash deposits.

Added

The Company has assessed all receivables are collectable and did not record an allowance for credit losses as of December 31, 2023. Leases We determine if an arrangement is a lease at inception. The current portion of lease obligations are included in accounts payable and accrued liabilities on the consolidated balance sheets.

Removed

In connection with the Class Action claims and investigations described in Item 3. Legal Proceedings of this Annual Report on Form 10-K, the Company is obligated to indemnify its officers and directors for costs incurred in defending against these claims and investigations.

Added

Overall gross profit for the year ended December 31, 2024 decreased by approximately 41% from the prior year due to non-renewals of contracts outpacing cost reductions. Operating Expenses Operating expenses decreased $714,329 to $2,005,411 for the year ended December 31, 2024, as compared to $2,719,740 in the same period of 2023.

Removed

If not discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s financial statements upon adoption. 30 Results of Operations The COVID-19 Pandemic has disrupted our business and the business of our hospital customers.

Added

Accounting fees increased in the current year due to the Company’s change of independent registered accounting firm. Legal fees increased during the current year as the company strived to settle the remaining pending litigation matters.

Removed

Our operations and business have experienced disruption due to the unprecedented conditions surrounding the COVID-19 pandemic which spread throughout the United States and the world. The Company has followed the recommendations of local health authorities to minimize exposure risk for its team members since the outbreak.

Added

The Company expects neither of these increases will continue into 2025 Other income of $123,201 during the year ended December 31, 2024 consisted of a gain on forgiveness of payables of $227,402, partially offset by interest expense of $104,201.

Removed

Added

In order to remedy this liquidity deficiency and fund the future growth of our business, we entered into a securities purchase agreement on January 17, 2025 for gross proceeds of $1,500,000. We intend to utilize these funds to pursue growth through the expansion of our sales force, product offering and project capabilities.

Removed

As a result, the Company believes that its customers were not able to focus resources on expanding the utilization of the Company’s services, which has adversely impacted the Company’s growth prospects, at least until the adverse effects of the pandemic subside.

Added

Financing Activities Net cash provided by financing activities was approximately $1,100,000 for the year ended December 31, 2024, consisting of proceeds loans payable of $995,000, and the sale of common stock of $168,000, partially offset by repayments of loans payable of $63,000. Net cash provided by financing activities was $483,000 for the year ended December 31, 2023.

Removed

The $88,688 decrease is primarily related to a decrease in labor costs during the current year. Expenses General and administrative expenses decreased $817,337 to $2,719,740 for the year ended December 31, 2023, as compared to $3,537,077 in the same period of 2022.

Removed

We had other income of $276,036 during the year ended December 31, 2022 related primarily to the forgiveness of PPP loans. 31 Liquidity and Capital Resources Going Concern Management has concluded on our consolidated financial statements for the year ended December 31, 2023 that conditions exist that raise substantial doubt about our ability to continue as a going concern since we may not have sufficient capital resources from operations and existing financing arrangements to meet our operating expenses and working capital requirements.

Removed

Recent Fundraising During the year ended December 31, 2023, the Company issued an aggregate 134,056 shares of common stock for aggregate gross proceeds of $572,906 as under its existing equity line of credit. Liquidity We are currently experiencing a working capital deficiency, have limited cash on hand, and we are experiencing negative cash flows from operations.

Removed

Ultimately, we will need to generate substantial positive operating cash flows. Our internal sources of funds will consist of cash flows from operations, but not until we begin to realize substantial additional revenues from the sale of our products and services. As previously stated, our operations are generating negative cash flows, and thus adversely affecting our liquidity.

Removed

If we are able to secure sufficient funding in the first half of 2024 to fully implement our business plan, we expect that our operations could begin to generate positive cash flows by the end of 2024, which should ameliorate our liquidity deficiency.

Removed

If we are unable to raise additional funds in the near term, we will not be able to fully implement our business plan, in which case there could be a material adverse effect on our results of operations and financial condition.

Removed

In the event we do not generate sufficient funds from revenues or financing through the issuance of common stock or from debt financing, we will be unable to fully implement our business plan and pay our obligations as they become due, any of which circumstances would have a material adverse effect on our business prospects, financial condition, and results of operations.

Removed

The accompanying financial statements do not include any adjustments that might be required should the Company be unable to recover the value of its assets or satisfy its liabilities (see Note 2 to the Financial Statements – Liquidity and Going Concern).

Removed

Based on our current limited availability of funds, we expect to spend minimal amounts on expansion of our sales organization, software development and capital expenditures. We expect to fund any future software development expenditures through a combination of cash flows from operations and proceeds from equity and/or debt financing.

Removed

Net cash provided by financing activities was $718,423 for the year ended December 31, 2022. This consisted of proceeds of $725,050 from a common stock placement partially offset by loan repayments of $6,627. Contractual Cash Obligations Refer to Note 8, Commitments and Contingencies, in the accompanying consolidated financial statements for additional detail.

Top changes in SCWorx Corp.'s 2024 10-K

Item 1. Business

Item 1A. Risk Factors

Item 2. Properties

Item 3. Legal Proceedings

Item 4. Mine Safety Disclosures

Item 5. Market for Registrant's Common Equity

Item 7. Management's Discussion & Analysis

Other WORX 10-K year-over-year comparisons