WORX.OQBScworx CORP

S-1/A: SCWorx Corp. Files Amendment No. 1 to Form S-1 for Resale of 40 Million Shares of Common Stock

Sentiment:

S-1/A Filing

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SCWorx Corp. is registering the resale of up to 40 million shares of its common stock by selling stockholders, as detailed in its amended S-1 filing.

Delay expectedThe Company did not file the Registration Statement by the September 29, 2024 filing deadline.
Capital raiseThe company sold senior secured convertible notes and warrants in July 2024 for gross proceeds of $1,155,000.The company sold an aggregate 232,558 shares of its common stock, and warrants to acquire up to an aggregate 232,558 additional shares of the Company's common stock (November Warrants) for gross proceeds of $200,000.The company sold senior secured convertible notes and warrants in January 2025 for gross proceeds of $1,500,000.
Worse than expectedThe company has a history of losses and negative cash flows, which it may continue to incur in the future.The company's stock price was $0.70 on April 15, 2025, below the Nasdaq minimum bid price requirement.The company received a Notice of Deficiency from Nasdaq on April 10, 2025 because the price per share of our common stock currently does not meet Nasdaqs minimum bid price requirement of $1.00 per share.

Summary

  • SCWorx Corp. has filed an amendment to its Form S-1 registration statement to register the resale of up to 40,000,000 shares of its common stock by selling stockholders.
  • These shares are related to senior secured convertible notes and warrants issued in July 2024 and January 2025, a settlement agreement with Core IR, and a November 2024 placement.
  • The company will not receive any proceeds from the sale of these shares by the selling stockholders.
  • The common stock is listed on the Nasdaq Capital Market under the symbol WORX, with a last reported sale price of $0.70 per share on April 15, 2025.
  • The company intends to use any proceeds that it receives from the Selling Stockholders through the exercise of warrants to purchase Common Stock for working capital and general corporate purposes.
  • Investing in SCWorx's common stock involves a high degree of risk, as detailed in the prospectus.

Sentiment

Score: 3

Explanation: The document presents a mixed picture, with some potential positives (warrant exercise proceeds) but significant negatives (losses, Nasdaq deficiency, dilution risk). The overall sentiment is cautious and leans negative due to the financial challenges and risks outlined.

Positives

  • SCWorx may receive up to approximately $17,000,000 if warrants are exercised by the selling stockholders, which the company intends to use for working capital and general corporate purposes.

Negatives

  • SCWorx will not receive any proceeds from the sale of common stock by the selling stockholders.
  • The company's stock price was $0.70 on April 15, 2025, below the Nasdaq minimum bid price requirement.
  • The company has a history of losses and negative cash flows, which it may continue to incur in the future.
  • The company received a Notice of Deficiency from Nasdaq on April 10, 2025 because the price per share of our common stock currently does not meet Nasdaqs minimum bid price requirement of $1.00 per share.

Risks

  • Investing in SCWorx's common stock involves a high degree of risk.
  • The issuance of common stock to investors will cause significant dilution, and the sale of these shares could cause the stock price to fall.
  • The company has a history of losses and negative cash flows, raising concerns about its ability to continue as a going concern.
  • SCWorx received a Notice of Deficiency from Nasdaq for not meeting the minimum bid price requirement, potentially leading to delisting.
  • The company's ability to raise capital from third parties is restricted by agreements related to the July and January Notes offerings.
  • The company's future success depends on its ability to establish, protect and enforce its intellectual property rights adequately.

Future Outlook

The company believes that the issuance of the January Notes and Warrants gives it sufficient liquidity to cover short-term losses as well as to implement its longer-term growth initiatives, but there is no assurance that the company will be able to continue as a going concern.

Industry Context

The document indicates that the medical industry is subject to rapid changes in technology and governmental regulation, and is characterized by a high level of consolidation that may result in the loss of one or more of the company's customers.

Stakeholder Impact

  • Shareholders face potential dilution and a decline in stock price due to the resale of shares.
  • The company's ability to raise capital could be affected by the Nasdaq deficiency and restrictions in existing agreements.
  • The company's future performance and ability to execute its business strategy are uncertain.

Next Steps

  • The company must regain compliance with Nasdaq's minimum bid price rule within 180 days (by October 7, 2025) to avoid delisting.
  • The selling stockholders may offer the shares for resale from time to time.

Key Dates

DateDescription
November 17, 2016SCWorx, LLC (n/k/a SCW FL Corp.) (SCW LLC) was organized in Florida.
December 31, 2017SCW LLC acquired Primrose Solutions, LLC (Primrose).
June 27, 2018SCW LLC merged with and into a newly-formed entity, SCWorx Acquisition Corp.
August 17, 2018SCW Acquisition changed its name to SCWorx Corp.
November 30, 2018SCWorx Corp. and certain of its stockholders agreed to cancel 6,510 shares of common stock.
February 1, 2019Alliance acquired SCWorx Corp. (n/k/a SCW FL Corp.) in a stock-for-stock exchange transaction and changed Alliances name to SCWorx Corp.
April 25, 2022The Company received a Demand for Arbitration.
October 16, 2023The Company received the final decision of the Arbitrator, awarding Core IR $461,856.
July 12, 2024SC Worx Corp. entered into a Securities Purchase Agreement (SPA) with certain accredited investors (the Investors).
July 12, 2024The Company and Core IR entered into a Settlement Agreement.
July 15, 2024Senior secured convertible notes issued.
July 16, 2024The closing of the July Note Offering occurred.
July 18, 2024The Company issued 159,776 shares of its common stock in the first tranche of payments under this agreement.
September 29, 2024The Company was required to file the Registration Statement with the SEC registering the Conversion Shares and the Warrant Shares issued in the July 2024 offering, as well as the shares issued to the vendor in payment of the arbitration award, promptly following the Closing of the July 2024 offering, but in no event later than September 29, 2024.
November 18, 2024The Company and other parties to the Registration rights Agreement entered into the Amendment and Consent.
November 18, 2024The Company entered into a Securities Purchase Agreement (November Placement) with certain accredited investors.
November 19, 2024Securities Purchase Agreements, dated as of November 18, 2024 and November 19, 2024 (the November Placement) and those warrants issued to the selling stockholders in connection with the November Placement (November Warrants).
December 31, 2025The July Notes will mature.
January 21, 2025The Company entered into a Securities Purchase Agreement with certain accredited investors, and, pursuant to the SPA, sold to the Investors a new series of senior secured convertible notes (the January Notes).
March 14, 2025The company issued an additional 191,250 shares of its common stock under this agreement.
April 10, 2025We received a Notice of Deficiency from Nasdaq on April 10, 2025 because the price per share of our common stock currently does not meet Nasdaqs minimum bid price requirement of $1.00 per share.
April 15, 2025The last reported sale price of the Common Stock on the Nasdaq Capital Market was $0.70 per share.
April 15, 2025As of April 15, 2025, there were 2,318,617 shares of Common Stock issued and outstanding.
April 16, 2025Date of the prospectus.
October 7, 2025If we fail to regain compliance within 180 days (by October 7, 2025), our common stock will be subject to delisting.
December 31, 2025Principal under the July Notes is payable in equal monthly installments beginning on (i) the earlier of (A) 30 days after the effective date of the Registration Statement (as defined below) or (B) the date that the shares of Common Stock issuable upon conversion of the July Notes are eligible for sale under Rule 144.

Keywords

SCWorx, common stock, resale, registration statement, convertible notes, warrants, Nasdaq, dilution, risk factors, settlement agreement

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