What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2021-05-19 compared with 2020-06-12 · 531 added, 408 removed, 43 unchanged (96% of the section changed)

Corporate Information

We were incorporated

in Delaware on February 15, 2015 under the name “Alliance MMA, Inc.”

On February 1,

2019, our Company acquired SCWorx Corp.

in a stock for stock exchange transaction and changed its name to SCWorx Corp.

Effective February 4, 2019, we changed the trading symbol for our common stock listed on the Nasdaq Capital Market to

“WORX.”

Our principal executive

offices are located at 590 Madison Avenue, 21 st Floor, New York, New York, 10022.

Our telephone number is (212) 739-7825.

In this Annual Report,

the terms “SCWorx”, “Alliance,”

SCWorx, LLC (n/k/a SCW FL

Corp.) (“SCW LLC”) was a privately held limited liability company which was organized in Florida on November 17, 2016.

December 31, 2017, SCW LLC acquired Primrose Solutions, LLC (“Primrose”), a Delaware limited liability company, which became

its wholly-owned subsidiary and focused on developing functionality for the software now used and sold by SCWorx Corp.

(the “Company”

or “SCWorx”).

The majority interest holders of Primrose were interest holders of SCW LLC and based upon Staff Accounting Bulletin

Topic 5G, the technology acquired has been accounted for at predecessor cost of $0.

To facilitate the planned acquisition by Alliance

MMA, Inc., a Delaware corporation (“Alliance”), on June 27, 2018, SCW LLC merged with and into a newly-formed entity, SCWorx

Acquisition Corp., a Delaware corporation (“SCW Acquisition”), with SCW Acquisition being the surviving entity.

Subsequently,

on August 17, 2018, SCW Acquisition changed its name to SCWorx Corp.

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.

November 2018, the Company collected $1,250,000 in subscriptions and issued 3,125 shares of common stock to new third-party investors.

In addition, on February 1, 2019, (i) SCWorx Corp.

(f/k/a SCWorx Acquisition Corp.) changed its name to SCW FL Corp.

(to allow Alliance

to change its name to SCWorx Corp.) and (ii) Alliance acquired SCWorx Corp.

(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

On March 16, 2020, in response to the COVID-19 pandemic, SCWorx established a wholly-owned subsidiary, Direct-Worx, LLC.

principal executive offices are located at 590 Madison Avenue, 21 st Floor, New York, New York, 10022.

Our telephone

number is (844) 472-9679.

this Annual Report, the terms “SCWorx”, “Alliance,”

“Alliance MMA,”

5 unchanged sentences

(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.

SCWorx is a provider

of data content and services related to the repair, normalization and interoperability of information for healthcare providers,

as well as big data analytics for the healthcare industry.

SCWorx has developed and markets health care information technology

solutions and associated services that improve healthcare processes and information flow within hospitals and other healthcare

SCWorx’s software enables a healthcare provider to simplify and organize its data (“data normalization”),

allows the data to be utilized across multiple internal software applications (“interoperability”) and provides the

basis for sophisticated data analytics (“big data”).

Customers use our software to achieve multiple operational benefits,

such as supply chain cost reductions, decreased accounts receivables aging, accelerated and completed patient billing in less than

72 hours, contract optimization, increased supply chain management and total cost visibility via dynamic AI connections that automatically

structures, repairs, synchronizes and maintains purchasing (“MMIS”), Clinical (“EMR”) and finance (“CDM”)

SCWorx’s customers include some of the most prestigious healthcare organizations in the United States.

SCWorx offers

an advanced software solution for the management of health care providers’

foundational business applications, empowering

its customers to significantly reduce costs, drive better clinical outcomes and enhance their revenue.

SCWorx supports the interrelationship

between the three core healthcare provider systems:

Unless specified otherwise,

the historical financial results in this Annual Report are those of SCWorx and its subsidiaries on a consolidated basis.

Business Combination and Related Transactions

On February 1, 2019, Alliance

MMA completed the acquisition of SCWorx, changed its name to SCWorx Corp., changed its ticker symbol to “WORX”, and effected

a one-for-nineteen reverse stock split of its common stock, which combined the 100,000,000 Alliance shares of common stock issued to the

Company’s shareholders into 5,263,158 shares of common stock of the newly combined company.

From a legal perspective,

Alliance MMA acquired SCWorx FL Corp, and as a result, historical equity awards including stock options and warrants are carried forward

at their historical basis.

From an accounting perspective,

Alliance MMA was acquired by SCWorx FL Corp in a reverse merger and as a result, the Company has completed purchase accounting for the

is a leading provider of data content and services related to the repair, normalization and interoperability of information for

healthcare providers, as well as big data analytics for the healthcare industry.

has developed and markets health care information technology solutions and associated services that improve healthcare processes

and information flow within hospitals and other healthcare facilities.

SCWorx’s software enables a healthcare provider to

simplify and organize its data (“data normalization”), allows the data to be utilized across multiple internal software

applications (“interoperability”) and provides the basis for sophisticated data analytics (“big data”).

Customers use our software to achieve multiple operational benefits, such as supply chain cost reductions, decreased accounts

receivables aging, accelerated and completed patient billing in less than 72 hours, contract optimization, increased supply chain

management and total cost visibility via dynamic AI connections that automatically structures, repairs, synchronizes and maintains

purchasing (“MMIS”), Clinical (“EMR”) and finance (“CDM”) systems.

SCWorx’s customers

include some of the most prestigious healthcare organizations in the United States.

SCWorx offers an advanced software solution

for the management of health care providers’

foundational business applications, empowering its customers to significantly

reduce costs, drive better clinical outcomes and enhance their revenue.

SCWorx supports the interrelationship between the three

core healthcare provider systems:

Supply Chain, Financial and Clinical.

This solution integrates common keys

within distinct and variable databases that allows the repaired foundational data to move seamlessly from one application to another

enabling our Customers to drive supply chain cost reductions, optimize contracts, increase supply chain management (“SCM”),

cost visibility, control rebates and contract administration fees.

Currently, the business

systems of hospitals are frequently deficient and often unconnected from each other.

These deficiencies in part result from the

vast amount of unstructured, manually created and managed data that proliferates within the hospital’s supply chain, clinical

and billing systems.

SCWorx’s solutions are designed to improve the flow of information quickly and accurately between the

buy-side (supply chain purchasing systems), the consumption-side (clinical documentation systems like the electronic medical records

(“EMR”)) and billing and collection systems (patient billing systems).

The currently poor state of interoperability

limits the potential value of each independent system and requires significant expense and extensive human resource commitments

from senior personnel to stay ahead of problems and complete basic administrative tasks.

SCWorx provides an information service

that ultimately leads to safer, more cost effective and financially efficient patient care.

SCWorx has demonstrated

that in order for the core hospital systems to function properly there must be a Single Source of Truth (“SSOT”) for

all products utilized and ultimately billed for.

The Item Master File (“IMF”), which is a database of all known products

used in hospital and health care settings, must be accurate at all times and expanded upon to hold both clinical and financial

An accurate and expanded Item Master File supports interoperability between the supply chain, clinical and financial

systems by delivering, on demand, reports detailing the purchasing, utilization and revenue associated with each and every item

used, allowing hospitals to better manage their business.

The Single Source of Truth establishes a common vernacular and syntax,

while assigning a consistent meaning across the healthcare provider’s core systems and accurately migrating data from one

application to another and removing disconnects between critical business systems.

SCWorx’s software

solutions are delivered to clients within a fixed term period, where such software is hosted in SCWorx’s data center and

accessed by the client through a secure connection in a software as a service (“SaaS”) delivery method.

SCWorx sells its solutions

and services in the United States to hospitals and health systems through its distribution and reseller partnerships.

SCWorx’s Software Solutions/Services

SCWorx empowers healthcare

providers to maintain comprehensive access and visibility to an advanced business intelligence that enables better decision-making

and reductions in product costs and utilization, ultimately leading to accelerated and accurate patient billing.

This solution integrates common keys within distinct and

variable databases that allows the repaired foundational data to move seamlessly from one application to another enabling our

Customers to drive supply chain cost reductions, optimize contracts, increase supply chain management (“SCM”), cost

visibility, control rebates and contract administration fees.

the business systems of hospitals are frequently deficient and often unconnected from each other.

These deficiencies in part result

from the vast amount of unstructured, manually created and managed data that proliferates within the hospital’s supply chain,

clinical and billing systems.

SCWorx’s solutions are designed to improve the flow of information quickly and accurately

between the buy-side (supply chain purchasing systems), the consumption-side (clinical documentation systems like the electronic

medical records (“EMR”)) and billing and collection systems (patient billing systems).

The currently poor state of

interoperability limits the potential value of each independent system and requires significant expense and extensive human resource

commitments from senior personnel to stay ahead of problems and complete basic administrative tasks.

SCWorx provides an information

service that ultimately leads to safer, more cost effective and financially efficient patient care.

has demonstrated that in order for the core hospital systems to function properly there must be a Single Source of Truth (“SSOT”)

for all products utilized and ultimately billed for.

The Item Master File (“IMF”), which is a database of all known

products used in hospital and health care settings, must be accurate at all times and expanded upon to hold both clinical and

financial attributes.

An accurate and expanded Item Master File supports interoperability between the supply chain, clinical and

financial systems by delivering, on demand, reports detailing the purchasing, utilization and revenue associated with each and

every item used, allowing hospitals to better manage their business.

The Single Source of Truth establishes a common vernacular

and syntax, while assigning a consistent meaning across the healthcare provider’s core systems and accurately migrating

data from one application to another and removing disconnects between critical business systems.

SCWorx’s

software modules perform separate functions as follows.

Virtualized Item Master File repair, expansion and automation

software solutions are delivered to clients within a fixed term period, where such software is hosted in SCWorx’s data center

and accessed by the client through a secure connection in a software as a service (“SaaS”) delivery method.

sells its solutions and services in the United States to hospitals and health systems through its distribution and reseller partnerships.

SCWorx’s

Software Solutions/Services

empowers healthcare providers to maintain comprehensive access and visibility to an advanced business intelligence that enables

better decision-making and reductions in product costs and utilization, ultimately leading to accelerated and accurate patient

SCWorx’s software modules perform separate functions as follows.

Item Master File repair, expansion and automation —

The process begins with data normalization —

data is put into a simplified and normalized structure and location

for use throughout the enterprise.

The SCWorx software normalizes, automates and builds interoperability via advanced attribution,

vendor and contract mapping, product categorization, repairing the unit of measure and establishing revenue codes and flags.

improves the healthcare providers’

business processes through the establishment of a clean and normalized Item Master File

that improves efficiencies, eliminates cumbersome and error-prone manual processes, and provides an integrated cloud-based suite

of services that enhances the productivity of operating room staff, supply chain margins and billing revenue through the seamless

sharing and accuracy of critical business data.

Electronic Medical Record Management —

The Electronic Medical Record (EMR) module integrates the advanced data attributes created by SCWorx in the Item Master into the EMR.

The EMR serves as the database that hospitals use to document all clinical procedures in terms of the products used and the costs that should be charged.

What makes this module special is that prior to its creation there was no mechanism that tied product purchases to actual utilization.

Hospitals, being mass consumption businesses, had no way to identify excess ordering that always accompanies mass consumption organizations.

In addition, the automation and consistency of delivered attributes dramatically reduces the administrative burden as today these additional attributes are being created by expensive clinical resources manually —

data is put into

a simplified and normalized structure and location for use throughout the enterprise.

The SCWorx software normalizes, automates

and builds interoperability via advanced attribution, vendor and contract mapping, product categorization, repairing the unit

of measure and establishing revenue codes and flags.

SCWorx improves the healthcare providers’

business processes through

the establishment of a clean and normalized Item Master File that improves efficiencies, eliminates cumbersome and error-prone

manual processes, and provides an integrated cloud-based suite of services that enhances the productivity of operating room

staff, supply chain margins and billing revenue through the seamless sharing and accuracy of critical business data.

Medical Record Management —

The Electronic Medical Record (EMR) module integrates the advanced data attributes created

by SCWorx in the Item Master into the EMR.

The EMR serves as the database that hospitals use to document all clinical procedures

in terms of the products used and the costs that should be charged.

What makes this module special is that prior to its creation

there was no mechanism that tied product purchases to actual utilization.

Hospitals, being mass consumption businesses, had

no way to identify excess ordering that always accompanies mass consumption organizations.

In addition, the automation and

consistency of delivered attributes dramatically reduces the administrative burden as today these additional attributes are

being created by expensive clinical resources manually —

over and over again by each hospital.

The SCWorx EMR management system creates one vernacular for each hospital so they see the data in a manner that suits them —

and then creates a universal vernacular so they can see their performance against other like institutions.

Charge Description

Master Management —

The Charge Description Master (CDM) Management module assists healthcare providers by integrating

the CDM data into the workflow of the hospitals purchasing systems so that the latest costs can be automatically updated

against the hospitals charging systems.

The CDM data provided by SCWorx is made more accurate, and the resulting data is

integrated to the Item Master for real-time delivery to the EMR —

The SCWorx EMR management

system creates one vernacular for each hospital so they see the data in a manner that suits them —

and then creates

a universal vernacular so they can see their performance against other like institutions.

Description Master Management —

The Charge Description Master (CDM) Management module assists healthcare providers by

integrating the CDM data into the workflow of the hospitals purchasing systems so that the latest costs can be automatically

updated against the hospitals charging systems.

The CDM data provided by SCWorx is made more accurate, and the resulting data

is integrated to the Item Master for real-time delivery to the EMR —

this data is the last remaining piece of information

that is consumed by the EMR and passed ultimately to the patient billing systems.

SCWorx provides real-time integration,

automation and management of Item Master File, Clinical Information Systems and the Charge Description Master.

Contract Management —

SCWorx’s Contract Management Module assists healthcare providers to establish an efficient contract management system and to provide first class care to patients, while reducing operating costs, assuring adherence to compliance requirements, and mitigating risk.

By linking the Item Master File to the healthcare providers contract management system and procedures, SCWorx simplifies the way contracts are managed from start to finish by streamlining the processes of creating, routing, reviewing and approving contracts.

SCWorx delivers a data warehouse platform which integrates item master management, spend analysis, and contract management.

These solutions enable financial staff across the healthcare provider to drill down quickly and deeply into actionable and real-time financial data and key performance indicators to improve revenue realization and staff efficiency.

This suite of solutions includes the ability to automatically push price changes to a contract, compliance for standard and non-standard products, contract compliance and optimization reporting, reliable cost data for current and alternate products, cost performance metrics, matching purchase order price to contract and contract repository.

Request for Proposal (“RFP”) Automation —

With the reality of shrinking operating margins, increasing operating expenses and decreasing insurance reimbursements, hospitals must evaluate all major expenditures.

In addition, requirements for provable quality of service supported by trackable metrics now frequently necessitate the search for better options available in the marketplace.

Since hospital-based provider subsidies are often a major expense item and since there are often perceived opportunities for quality improvement, it is a reasonable practice for hospital leadership to carefully evaluate all of their current hospital-based services and associated financial support before each contract renegotiation.

The proliferation of large regional and national providers, with their ability to derive benefits from economies of scale, have made RFPs much more of a competitive process.

SCWorx provides real-time integration, automation

and management of Item Master File, Clinical Information Systems and the Charge Description Master.

Management —

SCWorx’s Contract Management Module assists healthcare providers to establish an efficient contract

management system and to provide first class care to patients, while reducing operating costs, assuring adherence to compliance

requirements, and mitigating risk.

By linking the Item Master File to the healthcare providers contract management system

and procedures, SCWorx simplifies the way contracts are managed from start to finish by streamlining the processes of creating,

routing, reviewing and approving contracts.

SCWorx delivers a data warehouse platform which integrates item master management,

spend analysis, and contract management.

These solutions enable financial staff across the healthcare provider to drill down

quickly and deeply into actionable and real-time financial data and key performance indicators to improve revenue realization

and staff efficiency.

This suite of solutions includes the ability to automatically push price changes to a contract, compliance

for standard and non-standard products, contract compliance and optimization reporting, reliable cost data for current and

alternate products, cost performance metrics, matching purchase order price to contract and contract repository.

for Proposal (“RFP”) Automation —

With the reality of shrinking operating margins, increasing operating

expenses and decreasing insurance reimbursements, hospitals must evaluate all major expenditures.

In addition, requirements

for provable quality of service supported by trackable metrics now frequently necessitate the search for better options available

in the marketplace.

Since hospital-based provider subsidies are often a major expense item and since there are often perceived

opportunities for quality improvement, it is a reasonable practice for hospital leadership to carefully evaluate all of their

current hospital-based services and associated financial support before each contract renegotiation.

The proliferation of

large regional and national providers, with their ability to derive benefits from economies of scale, have made RFPs much

more of a competitive process.

Hospital administrators, however, often rely on poor or conflicting data when creating an RFP.

Through the integration and utilization of the SSOT SCWorx automates the RFP process and makes it more accurate.

SCWorx automates the core sourcing processes with the intention to accelerate cycle times, surveys and confirms business preferred processes, designs and builds a flow chart for the current and desired workflows, cross references bid analysis, implements bid scoring, customizes software to support automation and customizes the report writer and output documents.

Integration of Acquired Businesses —

The agnostic design of the SCWorx solution enables rapid deployment of a virtual Item Master File to quickly and easily allow combining healthcare providers to share information and achieve cost synergies and interoperability without large and cumbersome upgrades or implementations.

During the consolidation of healthcare providers, SCWorx cleans the data and makes the data available to the disparate systems.

In addition, M&A activity requires in-depth reporting for comparison of Group Purchasing Organization (“GPO”) contract overlap.

When healthcare providers that use different GPOs merge, or are acquired, there is a lack of information to compare contracts.

SCWorx provides information for comparative purposes to solve these issues rapidly.

Rebate Management —

Frequently, vendors use rebates and incentives as a key part of their pricing strategy and structure when selling to hospitals.

SCWorx automates

the core sourcing processes with the intention to accelerate cycle times, surveys and confirms business preferred processes,

designs and builds a flow chart for the current and desired workflows, cross references bid analysis, implements bid scoring,

customizes software to support automation and customizes the report writer and output documents.

of Acquired Businesses —

The agnostic design of the SCWorx solution enables rapid deployment of a virtual Item Master

File to quickly and easily allow combining healthcare providers to share information and achieve cost synergies and interoperability

without large and cumbersome upgrades or implementations.

During the consolidation of healthcare providers, SCWorx cleans

the data and makes the data available to the disparate systems.

In addition, M&A activity requires in-depth reporting

for comparison of Group Purchasing Organization (“GPO”) contract overlap.

When healthcare providers that use different

GPOs merge, or are acquired, there is a lack of information to compare contracts.

SCWorx provides information for comparative

purposes to solve these issues rapidly.

Management —

Frequently, vendors use rebates and incentives as a key part of their pricing strategy and structure when

selling to hospitals.

This tactic makes pricing more attractive to healthcare providers.

When tracked through Accounts Payable, and issued correctly, rebates can help healthcare organizations save money.

At any large healthcare provider, vendor rebates can be difficult to manage since they require a multi-step process to track dollars earned, credits issued, and monies paid.

When tracked through Accounts Payable,

and issued correctly, rebates can help healthcare organizations save money.

At any large healthcare provider, vendor rebates

can be difficult to manage since they require a multi-step process to track dollars earned, credits issued, and monies paid.

Rebates frequently cause tracking challenges for Accounts Payable departments.

Inconsistent tracking is the primary problem for loss of savings with vendor rebate programs.

SCWorx’s Rebate Management Module enables healthcare providers to correctly calculate and track rebates provided by healthcare provider vendors.

Purchasing or Contracting departments monitor rebates by creating and maintaining a Rebates Master List which is provided to the Accounts Payable department.

To assist in this cumbersome process, SCWorx provides information from the SSOT, such as historical data, frequent updates, advanced administrative fee reporting, purchase rebate tracking, early payment/discount management and Vendor Master Data alignment.

Big Data Analytics Model —

SCWorx provides an in-depth, easy-to-use web portal for display, reporting and analysis of the information contained within the SCWorx data warehouse.

SCWorx’s analytics solution enables healthcare providers to view benchmarking information, quickly add new items to the SSOT and identify cost savings through this real-time and on-demand solution.

In addition to simplifying the item add process, SCWorx provides peer comparison reporting against similar healthcare providers and a list of informative reports for business measurement, such as spend trend analysis, contract gap analysis, market price comparison, etc.

The SCWorx product line is a simplified user experience and visual display for the hospital employee which does not require access to the SCWorx application.

Data Integration and Warehousing —

Inconsistent tracking is the primary problem

for loss of savings with vendor rebate programs.

SCWorx’s Rebate Management Module enables healthcare providers to correctly

calculate and track rebates provided by healthcare provider vendors.

Purchasing or Contracting departments monitor rebates

by creating and maintaining a Rebates Master List which is provided to the Accounts Payable department.

To assist in this

cumbersome process, SCWorx provides information from the SSOT, such as historical data, frequent updates, advanced administrative

fee reporting, purchase rebate tracking, early payment/discount management and Vendor Master Data alignment.

Data Analytics Model —

SCWorx provides an in-depth, easy-to-use web portal for display, reporting and analysis of the

information contained within the SCWorx data warehouse.

SCWorx’s analytics solution enables healthcare providers to

view benchmarking information, quickly add new items to the SSOT and identify cost savings through this real-time and on-demand

In addition to simplifying the item add process, SCWorx provides peer comparison reporting against similar healthcare

providers and a list of informative reports for business measurement, such as spend trend analysis, contract gap analysis,

market price comparison, etc.

The SCWorx product line is a simplified user experience and visual display for the hospital

employee which does not require access to the SCWorx application.

Integration and Warehousing —

Healthcare providers maintain a significant amount of data.

In many cases the data is not useful for analytics since the data is held within an individual “silo.”

SCWorx establishes an expandable, data warehouse of items that have been normalized, repaired and enriched as the SSOT for useful benchmarking, interoperability and analytics.

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.

● 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:

In many cases the data is

not useful for analytics since the data is held within an individual “silo.”

SCWorx establishes an expandable,

data warehouse of items that have been normalized, repaired and enriched as the SSOT for useful benchmarking, interoperability

and analytics.

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.

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:

hosted mobile scanning solution, which automates the consumption of known and unknown implant device utilization during surgical

3 unchanged sentences

Record (“EMR”) enterprise systems for the following:

○ EMR —

scheduling feeds with case information

○ ERP —

electronic purchase orders

○ EMR —

with device utilization integration

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

Daily scheduling feeds with case information

Bill-Only electronic purchase orders

Case closure with device utilization integration

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.

will identify and automate the Item-Add process for unknown items introduced during surgical procedures based on customer’s

existing business rules.

Direct-Worx —

March 2020, in response to the COVID-19 pandemic, SCWorx established a wholly-owned subsidiary, Direct-Worx, LLC, which will utilize

the SCWorx database to identify trends within the purchasing supply chain and use this information to source and provide critical,

In March 2020, in response to the COVID-19 pandemic,

SCWorx established a wholly-owned subsidiary, Direct-Worx, LLC, with the intention of

utilizing the SCWorx database to identify trends within the purchasing supply chain and

then use this information to assist the Company in its endeavors to provide critical,

difficult-to-find items for the healthcare industry.

Items may become difficult to source due to unexpected disruptions within

the supply chain, such as the COVID-19 pandemic.

These products currently include:

■ Test Kits —

the Company has identified multiple potential

sources for Rapid Test Kits for COVID-19.

Personal Protective Equipment (PPE) includes items such as masks, gloves, gowns, shields, etc.

The Company’s Chief

Executive Officer and employees have extensive experience in the healthcare industry and industry contacts, and a database of

items specifically designated to assist the healthcare industry in fulfilling its inventory demands.

The sale of PPE and rapid test

kits for COVID-19 represent a new business for the Company and is subject to the myriad risks associated with any new venture.

The Company has for example encountered great difficulty in attempting to secure reliable sources of supply for both COVID-19

Rapid Test Kits and PPE including, 3M N95 masks, which are the preferred medical grade mask of US healthcare companies.

the Company has encountered shipping delays with regard to masks and other PPE, and significant quality related issues regarding

In addition, regarding its sourcing of COVID-19 Rapid Test Kits, the Company has encountered significant shipping delays,

as well as reduced quantities.

Consequently, there is no assurance as to the timing or quantities of any future deliveries of

COVID-19 Test Kits.

The Company has yet to complete the sale of any COVID-19 rapid test kits and had no test kits or PPE in inventory

as of December 31, 2019 and had 19,000 test kit units as of the date of this report.

In addition, changes in FDA processes governing

the sale of COVID-19 serology tests could have the effect of rendering the COVID-19 serology tests to be sold by the Company not

saleable in the United States, which could have a material adverse effect on the Company.

See Government Regulation.

be no assurance that the Company will be able to generate any significant revenue from the sale of PPE products or rapid test

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.

Clients are geographically dispersed throughout the country and the continued focus is to assist healthcare providers with issues

they have pertaining to data interoperability.

SCWorx provides these solutions through a combination of direct sales and relationships

with strategic partners.

Our major clients

include the following hospitals and health care providers:

CAPTIS, Dartmouth-Hitchcock Medical Center, Mercy Health, Providence

Health & Services, University of Chicago Medical Center, and the University of Vermont Medical Center, among others.

SCWorx competes against

a variety of vendors and smaller companies which provide solutions in the specific markets we address.

Our principal competitors

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;

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;

large national medical supply companies which distribute PPE products and rapid test kits, such as Medline Industries, Inc.

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

Company sought to provide COVID-19 Rapid Test Kits and PPE —

Personal Protective

Equipment to the healthcare industry.

PPE includes items such as masks, gloves, gowns,

shields, etc.

Company has extensive experience in the healthcare industry and industry contacts, and a database of items specifically designated

to assist the healthcare industry in fulfilling its inventory demands.

sale of PPE and rapid test kits for COVID-19 represented a new business for the Company and is subject to the myriad risks associated

with any new venture.

The Company encountered great difficulty in attempting to secure reliable sources of supply for both COVID-19

Rapid Test Kits and PPE The Company currently has no contracted supply of Rapid Test Kits or PPE.

During the year ended December

31, 2020, the Company has completed only minimal sales of COVID-19 rapid test kits and PPE.

In addition, changes in market conditions

and FDA processes governing the sale of COVID-19 serology tests could have the effect of rendering the COVID-19 serology tests

held by the Company not saleable in the United States, which could have a material adverse effect on the Company’s financial

condition and results of operations.

There can be no assurance that the Company will be able to generate any significant revenue

from the sale of PPE products or rapid test kits, and as of the date of this report, the Company has not generated any material

revenue from the sale of PPE or rapid test kits.

Company is no longer actively seeking to procure and sell Test Kits or PPE.

Instead, the Company is focused on selling its current inventory

of PPE and Test Kits.

The Company may receive commissions for acting as an intermediary with respect to the sale of PPE and/or Test Kits.

However, there is no assurance the Company will realize any material revenue from these activities.

and Strategic Partners

continues to provide transformational data-driven solutions to some of the finest, most well-respected healthcare providers in

the United States.

Clients are geographically dispersed throughout the country and the continued focus is to assist healthcare

providers with issues they have pertaining to data interoperability.

SCWorx provides these solutions through a combination of

direct sales and relationships with strategic partners.

competes against a variety of vendors and smaller companies which provide solutions in the specific markets we address.

Our principal

competitors include:

departments that have limited budgets and may be attempting to manually repair the item master file;

companies with a long list of products and services and small companies which may provide item master normalization and data

cleanse services;

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;

national medical supply companies which distribute PPE products and rapid test kits, such as Medline Industries, Inc.

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.

Barriers to entry

to the data management market include technological and application sophistication, the ability to offer a proven product, creating

and utilizing a well-established client base and distribution channels, brand recognition, the ability to provide agnostic interoperability

and to operate on a variety of MMIS, EMR and financial platforms, the ability to integrate with pre-existing systems and capital

for sustained development and marketing activities.

There are few barriers to entry to the PPE product/test kit distribution business.

SCWorx believes that these

obstacles taken together represent a moderate to high-level barrier to entry on the data management side of our business.

The principal

competitive factors in our markets are product features, functionality and support, product depth and breadth (number of items

in the central data warehouse), flexibility, ease of deployment and use, total cost of ownership and time to value.

that we generally compete favorably on the basis of these factors.

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.

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.

For clients purchasing

software to be installed locally or provided on a SaaS model, these are multi-element arrangements that include a term license

granting the right to access the applicable software functionality (whether installed locally at the client site or the right to

use our company’s solutions as a part of SaaS services), terms regarding maintenance and support services, terms for any

third-party components such as infrastructure and software, and professional services for implementation, integration, process

engineering, optimization and training, as well as fees and payment terms for each of the foregoing.

If the client purchases solutions

on a long-term license model, the client may be billed the license fee up front or on a monthly or quarterly basis.

and support are provided on a term basis for separate fees, with an initial term of typically three to five years.

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.

SCWorx also generally

provides software and SaaS client’s professional services for implementation, integration, process engineering, and optimization

and training.

to entry to the data management market include technological and application sophistication, the ability to offer a proven product,

creating and utilizing a well-established client base and distribution channels, brand recognition, the ability to provide agnostic

interoperability and to operate on a variety of MMIS, EMR and financial platforms, the ability to integrate with pre-existing

systems and capital for sustained development and marketing activities.

There are few barriers to entry to the PPE/test kit distribution

believes that these obstacles taken together represent a moderate to high-level barrier to entry on the data management side of

our business.

The principal competitive factors in our markets are product features, functionality and support, product depth

and breadth (number of items in the central data warehouse), flexibility, ease of deployment and use, total cost of ownership

and time to value.

We believe that we generally compete favorably on the basis of these factors.

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.

License and Service Fees

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.

clients purchasing software to be installed locally or provided on a SaaS model, these are multi-element arrangements that include

a term license granting the right to access the applicable software functionality (whether installed locally at the client site

or the right to use our company’s solutions as a part of SaaS services), terms regarding maintenance and support services,

terms for any third-party components such as infrastructure and software, and professional services for implementation, integration,

process engineering, optimization and training, as well as fees and payment terms for each of the foregoing.

If the client purchases

solutions on a long-term license model, the client may be billed the license fee up front or on a monthly or quarterly basis.

Maintenance and support are provided on a term basis for separate fees, with an initial term of typically three to five years.

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.

also generally provides software and SaaS client’s professional services for implementation, integration, process engineering,

and optimization and training.

These services and the associated fees are separate from the license, maintenance and access fees.

Professional services

are provided on either a fixed-fee or hourly arrangements billable to clients based on agreed-to payment milestones (fixed fee)

or monthly payment structure on hours incurred (hourly).

These services can either be included at the time the related SaaS solution

is licensed as part of the initial purchase agreement or added on afterward as an addendum to the existing agreement for services

required after the initial implementation.

For one-time data

normalization services clients, these normalization services are provided either through a stand-alone services agreement or services

addendum to an existing master agreement with the client.

These normalization services are available as either a one-time service

or recurring monthly, quarterly or annual review structure.

These services are typically provided on a per item basis.

typically occurs upon completion of the applicable normalization project.

The commencement of revenue recognition varies depending

on the size and complexity of the system and/or services involved, the implementation or performance schedule requested by the

client and usage by clients of SaaS for software-based components.

SCWorx’s agreements are generally non-cancelable but

provide that the client may terminate its agreement upon a material breach by SCWorx and/or may delay certain aspects of the installation

or associated payments in such events.

SCWorx does allow for termination for convenience in certain situations.

SCWorx also includes

trial or evaluation periods for certain clients, especially for new or modified solutions.

Therefore, it is difficult for SCWorx

to accurately predict the revenue it expects to achieve in any particular period, and a termination or installation delay of one

or more phases of an agreement, or the failure of SCWorx to procure additional agreements, could have a material adverse effect

on SCWorx’s business, financial condition, and results of operations.

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.

SCWorx licenses these software products and pays

the required license fees when such software is delivered to clients.

PPE and Rapid Test Kit Products

As of 2020, we are endeavoring

to sell PPE products and COVID-19 rapid test kits primarily through use of our internal and external sales personnel.

the date of filing we have not had any sales of PPE products.

CageTix Ticketing Platform

Currently, the majority

of paid tickets for regional MMA events is sold by the fighters appearing on the event fight card.

Referred to as “fighter

consigned”

tickets, sales are generally made in face-to-face cash transactions.

Our CageTix event ticketing platform allows

regional promoters to control the ticketing sales chain.

The CageTix platform can provide significant benefits to regional promotions,

including the security of credit/debit card sales processing, immediate revenue recognition, and real time sales reporting.

Our company does not

own any real property.

The principal executive offices are located at an office complex in New York, New York, consisting of shared

office space that we are leasing.

The lease had an original one-year term that commenced on December 1, 2015, which was renewed

until November 30, 2018 and now is under a month-to-month lease agreement.

The lease allows for the limited use of private offices,

conference rooms, mail handling, videoconferencing, and certain other business services.

Our company also has a

lease for office space in Greenwich, Connecticut.

The lease expires in May 2021.

Government Regulation

Management believes that

governmental regulation is not material to our current core data management business.

The sale of tests to

identify antibodies to the SARS-CoV-2 virus in the blood (i.e., COVID-19 serology tests) in the United States is subject to

regulation by the US Food and Drug Administration (FDA).

In order for such COVID-19 serology tests to be sold in the United

States, they must be authorized for sale by the FDA, either by being cleared under FDA’s 510(k) pathway, approved under

FDA’s Premarket Approval pathway, or, more commonly, authorized under the Emergency Use Authorization (EUA) process

developed by FDA for COVID-19 serology tests during the duration of the current public health emergency.

The Company believes

that the COVID-19 serology tests to be sold by the Company will conform with the FDA EUA process for COVID-19 serology tests

and therefore can be lawfully distributed in the United States.

Changes in FDA processes governing the sale of COVID-19

serology tests could have the effect of rendering the COVID-19 serology tests to be sold by the Company not saleable in

the United States, which could have a material adverse effect on the Company.

Intellectual Property

We protect our intellectual

property rights by relying on federal, state and common law rights, as well as contractual restrictions.

We control access to

our proprietary technology by entering into confidentiality agreements, invention assignment agreements and work for hire agreements

with our employees and contractors, and confidentiality agreements with third parties.

We further control the use of our proprietary

technology and intellectual property through provisions in our websites’

Professional services are provided on either a fixed-fee or hourly arrangements billable to clients based on agreed-to payment

milestones (fixed fee) or monthly payment structure on hours incurred (hourly).

These services can either be included at the time

the related SaaS solution is licensed as part of the initial purchase agreement or added on afterward as an addendum to the existing

agreement for services required after the initial implementation.

one-time data normalization services clients, these normalization services are provided either through a stand-alone services

agreement or services addendum to an existing master agreement with the client.

These normalization services are available as

either a one-time service or recurring monthly, quarterly or annual review structure.

These services are typically provided on

a per item basis.

Payment typically occurs upon completion of the applicable normalization project.

The commencement of revenue

recognition varies depending on the size and complexity of the system and/or services involved, the implementation or performance

schedule requested by the client and usage by clients of SaaS for software-based components.

SCWorx’s agreements are generally

non-cancelable but provide that the client may terminate its agreement upon a material breach by SCWorx and/or may delay certain

aspects of the installation or associated payments in such events.

SCWorx does allow for termination for convenience in certain

SCWorx also includes trial or evaluation periods for certain clients, especially for new or modified solutions.

it is difficult for SCWorx to accurately predict the revenue it expects to achieve in any particular period, and a termination

or installation delay of one or more phases of an agreement, or the failure of SCWorx to procure additional agreements, could

have a material adverse effect on SCWorx’s business, financial condition, and results of operations.

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.

Party License Fees

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.

and Rapid Test Kit Products

We are endeavoring to sell our existing inventory of PPE products

primarily through use of our internal and external sales personnel.

Through the date of filing we have not had significant sales of PPE

Ticketing Platform

In 2020, the majority of paid tickets for regional MMA events were

sold by the fighters appearing on the event fight card.

Referred to as “fighter consigned”

tickets, sales are generally made

in face-to-face cash transactions.

The CageTix event ticketing platform allowed regional promoters to control the ticketing sales chain.

The CageTix platform provided benefits to regional promotions, including the security of credit/debit card sales processing, immediate

revenue recognition, and real time sales reporting.

Due to the Covid restrictions which were put in place for large gatherings, SCWorx

has paused business activity for Cagetix.

company does not own any real property.

The principal executive offices are located at an office complex in New York, New York,

consisting of shared office space that we are leasing.

The lease had an original one-year term that commenced on December 1, 2015,

which was renewed until November 30, 2018 and now is under a month-to-month lease agreement.

The lease allows for the limited

use of private offices, conference rooms, mail handling, videoconferencing, and certain other business services.

company also has a lease for office space in Greenwich, Connecticut which expired in March 2020 and is now Month-to-month.

believes that governmental regulation is not material to our current core data management business.

The sale of tests to identify

antibodies to the SARS-CoV-2 virus in the blood (i.e., COVID-19 serology tests) in the United States is subject to regulation by the US

Food and Drug Administration (FDA).

In order for such COVID-19 serology tests to be sold in the United States, they must be authorized

for sale by the FDA, either by being cleared under FDA’s 510(k) pathway, approved under FDA’s Premarket Approval pathway,

or, more commonly, authorized under the Emergency Use Authorization (EUA) process developed by FDA for COVID-19 serology tests during

the duration of the current public health emergency.

The Company believes that the COVID-19 serology tests held by the

Company will conform with the FDA EUA process for COVID-19 serology tests and therefore can be lawfully distributed in the United States.

Changes in FDA processes governing the sale of COVID-19 serology tests could have the effect of rendering the COVID-19 serology tests

to be sold by the Company not saleable in the United States, which could have a material adverse effect on the Company.

protect our intellectual property rights by relying on federal, state and common law rights, as well as contractual restrictions.

We control access to our proprietary technology by entering into confidentiality agreements, invention assignment agreements and

work for hire agreements with our employees and contractors, and confidentiality agreements with third parties.

We further control

the use of our proprietary technology and intellectual property through provisions in our websites’

Agreements between the Company and

end-users includes a license agreement in which a non-transferable non-sublicensable, non-exclusive, limited use license to use

the licensed products for the duration of the service order.

Customers may not modify, copy, translate, decompile, disassemble,

reverse engineer, loan, rent, lease, sublicense, or create derivative works of the licensed products, in whole or in part.

agrees to maintain software and data as Confidential Information.

The Company currently

hosts our solution, serves our customers, and supports our operations in the United States through an agreement with a third party

hosting and infrastructure provider, Rackspace.

The Company incorporates standard IT security measures, including but not limited

between the Company and end-users includes a license agreement in which a non-transferable non-sublicensable, non-exclusive, limited

use license to use the licensed products for the duration of the service order.

Customers may not modify, copy, translate, decompile,

disassemble, reverse engineer, loan, rent, lease, sublicense, or create derivative works of the licensed products, in whole or

Customer agrees to maintain software and data as Confidential Information.

Company currently hosts our solution, serves our customers, and supports our operations in the United States through an agreement

with a third party hosting and infrastructure provider, Rackspace.

The Company incorporates standard IT security measures, including

but not limited to;

firewalls, disaster recovery, backup, etc.

Circumstances outside our control could pose a threat to our

intellectual property rights.

For example, effective intellectual property protection may not be available in the United States

or other countries in which we seek protection of our marks or our copyrighted works.

Also, the efforts we have taken to protect

our proprietary rights may not be sufficient or effective.

Any significant impairment of our intellectual property rights may harm

our business or our ability to compete.

We do not believe

that SCWorx’s revenues are impacted by seasonality.

As of December 31,

2019 and 2018, we had 4 and 2 employees, respectively.

On December 31, 2019, 2 are in management and finance and 2 are in operations.

As of December 31, 2018, 2 employees were in management and finance.

We mainly utilize independent contractors for maintenance

of our database and customer software installation.

As of June 3, 2020, we had 8 employees, of which 4 were in management and

finance and 4 were in programming.

Legal Proceedings

In conducting our

business, we may become involved in legal proceedings.

We will accrue a liability for such matters when it is probable that a

liability has been incurred and the amount can be reasonably estimated.

Circumstances

outside our control could pose a threat to our intellectual property rights.

For example, effective intellectual property protection

may not be available in the United States or other countries in which we seek protection of our marks or our copyrighted works.

Also, the efforts we have taken to protect our proprietary rights may not be sufficient or effective.

Any significant impairment

of our intellectual property rights may harm our business or our ability to compete.

do not believe that SCWorx’s revenues are impacted by seasonality.

of December 31, 2020, we had 9 employees, of which 2 were management and finance and the rest in operations.

We primarily utilize

independent contractors and third-part vendors for software, maintenance of our database and customer software installation.

conducting our business, we may become involved in legal proceedings.

We will accrue a liability for such matters when it is probable

that a liability has been incurred and the amount can be reasonably estimated.

When only a range of possible loss can be established,

4 unchanged sentences

estimates of potential damages, outside legal fees and other directly related costs expected to be incurred.

On April 29, 2020, a securities

class action case was filed in the United States District Court for the Southern District of New York against the Company and its

The action is captioned Daniel Yannes, individually and on behalf of all others similarly situated, Plaintiff vs.

April 29, 2020, a securities class action case was filed in the United States District Court for the Southern District of New

York against us and our CEO.

The action is captioned Daniel Yannes, individually and on behalf of all others similarly situated,

Plaintiff vs.

Schessel, Defendants.

On May 27, 2020, a second

securities class was filed in the United States District Court for the Southern District of New York against the Company and its

The action is captioned Caitlin Leeburn, individually and on behalf of all others similarly situated, Plaintiff v.

May 27, 2020, a second securities class was filed in the United States District Court for the Southern District of New York against

us and our CEO.

The action is captioned Caitlin Leeburn, individually and on behalf of all others similarly situated, Plaintiff

Schessel, Defendants.

Both lawsuits allege that the Company and its CEO mislead investors in connection with

the Company’s April 13, 2020 press release with respect to the sale of COVID-19 rapid test kits.

The plaintiffs in these

actions are seeking unspecified monetary damages.

The Company intends to vigorously defend against these proceedings.

In connection

with these actions, the Company may be obligated to indemnify its CEO and any of its officers or directors who incur any liability

or expense incurred as a result of serving at our company’s request in such capacity.

In addition, following the

April 13, 2020 press release and related disclosures (related to COVID-19 rapid test kits), the Securities and Exchange Commission

made an inquiry regarding the disclosures the Company made in relation to the transaction involving COVID-19 test kits.

22, 2020, the Securities and Exchange Commission ordered that trading in the securities of the Company be suspended because of

“questions and concerns regarding the adequacy and accuracy of publicly available information in the marketplace”

“SEC Trading Halt”).

June 23, 2020, a third securities class was filed in the United States District Court for the Southern District of New York against

us and our CEO.

The action is captioned Jonathan Charles Leonard, individually and on behalf of all others similarly situated,

Schessel, Defendants.

three lawsuits allege that our company and our CEO mislead investors in connection with our April 13, 2020 press release with

respect to the sale of COVID-19 rapid test kits.

The plaintiffs in these actions are seeking unspecified monetary damages.

three class actions were consolidated on September 18, 2020 and Daniel Yannes was designated lead plaintiff.

A consolidated Amended

Complaint (“CAC”) was filed on October 19, 2020.

The Defendants filed a motion to dismiss the CAC on November 18,

2020, and the briefing on that motion was complete on January 8, 2021.

We are still awaiting a ruling on the motion, and we intend

to continue vigorously defending against this lawsuit.

June 15, 2020, a shareholder derivative claim was filed in the United States District Court for the Southern District of New York

against Marc S.

Schessel, Steven Wallitt (current directors), and Robert Christie and Charles Miller (former directors) (“Director

Defendants”).

The action is captioned Javier Lozano, derivatively on behalf of SCWorx Corp., Plaintiff, v.

Miller, Steven Wallitt, Defendants, and SCWorx Corp., Nominal Defendant.

This lawsuit alleges that the Director Defendants

breached their fiduciary duties to the Company, including by misleading investors in connection with our April 13, 2020 press

release with respect to the sale of COVID-19 rapid test kits, failing to correct false and misleading statements and failing to

implement proper disclosure and internal controls.

The Plaintiff, on our behalf, is seeking an award of monetary damages, improvements

in our disclosure and internal controls, and legal fees.

The Director Defendants intend to vigorously defend against these proceedings.

This derivative action is also still pending, and the plaintiff in such action has agreed to voluntarily stay the case until a

ruling on a motion to dismiss, which we intend to file in the securities class action case.

August 21, 2020, a shareholder derivative claim was filed in the United States District Court for the Southern District of New

York against Marc S.

Schessel, Steven Wallitt (current directors), and Robert Christie and Charles Miller (former directors) (“Director

Defendants”).

The action is captioned Josstyn Richter, derivatively on behalf of SCWorx Corp., Plaintiff, v.

Miller, Steven Wallitt, Defendants, and SCWorx Corp., Nominal Defendant.

This lawsuit alleges that the Director Defendants

breached their fiduciary duties to the Company, including by misleading investors in connection with our April 13, 2020 press

release with respect to the sale of COVID-19 rapid test kits, failing to correct false and misleading statements and failing to

implement proper disclosure and internal controls.

The Plaintiff, on our behalf, is seeking an award of monetary damages, improvements

in our disclosure and internal controls, and legal fees.

The Director Defendants intend to vigorously defend against these proceedings.

August 27, 2020, the Lozano and Richter derivative actions were consolidated and jointly stayed until a ruling on a motion to

dismiss which we filed in the securities class action case.

September 30, 2020, a shareholder derivative action was filed in the Supreme Court State of New York, New York County against

Schessel and Steven Wallitt (current directors) and Charles Miller (a former director).

The action is captioned Hemrita

Zarins, derivatively on behalf of SCWorx Corp.

Schessel, Charles Miller, Steven Wallitt and SCWorx, Nominal Defendant.

This lawsuit alleges that the Director Defendants breached their fiduciary duties to the Company, including by misleading investors

in connection with the Company’s April 13, 2020 press release with respect to the sale of COVID-19 rapid test kits, failing

to correct false and misleading statements and failing to implement proper disclosure and internal controls.

The Plaintiff, on

our behalf, is seeking an award of monetary damages, improvements in our disclosure and internal controls, and legal fees.

October 28, 2020, Zarins withdrew this action and refiled an action in the Chancery Court in the State of Delaware on October

Zarins named as Defendants Marc S.

Schessel, Robert Christie (a former director), Steven Wallitt and SCWorx, Nominal

The allegations, as well as the relief sought, in the Delaware Chancery Court proceeding are substantially the same

as that filed in the New York State Action.

This action has been stayed pending the ruling on the motion to dismiss in the aforementioned

securities class action.

The Director Defendants intend to vigorously defend against these proceedings.

addition, following the April 13, 2020 press release and related disclosures (related to COVID-19 rapid test kits), the Securities

and Exchange Commission made an inquiry regarding the disclosures we made in relation to the transaction involving COVID-19 test

On April 22, 2020, the Securities and Exchange Commission ordered that trading in the securities of our company be suspended

because of “questions and concerns regarding the adequacy and accuracy of publicly available information in the marketplace”

(the “SEC Trading Halt”).

The SEC Trading Halt expired May 5, 2020, at 11:59 PM EDT.

The Company is fully cooperating

with the SEC’s investigation and is providing documents and other requested information.

In April 2020, the Company

received related inquiries from The Nasdaq Stock Market and the Financial Industry Regulatory Authority (FINRA).

The Company has

been fully cooperating with these agencies and providing information and documents, as requested.

On May 5, 2020, the Nasdaq Stock

Market informed the Company that it has initiated a “T12 trading halt,”

which means the halt will remain in place until

the Company has fully satisfied Nasdaq's request for additional information.

The Company continues to fully cooperate with Nasdaq

and respond to Nasdaq’s information requests as they are issued.

The T12 trading halt remains in effect as of the filing

of this Form 10-K.

Also in April 2020, the

Company was contacted by the U.S.

Attorney’s Office for the District of New Jersey, which is seeking information and documents

from the Company’s officers and directors relating primarily to the April 13, 2020 press release concerning COVID-19 rapid

The Company is fully cooperating with the U.S.

We are fully cooperating with

the SEC’s investigation and are providing documents and other requested information.

April 2020, we received related inquiries from The Nasdaq Stock Market and the Financial Industry Regulatory Authority (FINRA).

We have been fully cooperating with these agencies and providing information and documents, as requested.

On May 5, 2020, the

Nasdaq Stock Market informed us that it had initiated a “T12 trading halt,”

which means the halt will remain in place

until we have fully satisfied Nasdaq’s request for additional information.

We fully cooperated with Nasdaq and responded

to all of Nasdaq’s information requests as they were issued.

The T12 trading halt was lifted on August 10, 2020.

in April 2020, we were contacted by the U.S.

Attorney’s Office for the District of New Jersey, which is seeking information

and documents from our officers and directors relating primarily to the April 13, 2020 press release concerning COVID-19 rapid

We are fully cooperating with the U.S.

Attorney’s Office in its investigation.

Available Information

Our website address

is www.SCWorx.com.

Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments

to reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (Exchange Act), are filed

with the U.S.

connection with these actions and investigations, the Company is obligated to indemnify its officers and directors for costs incurred

in defending against these claims and investigations.

Because the Company currently does not have the resources to pay for these

costs, its directors and officers liability insurance carrier has agreed to indemnify these persons even though the $750,000 retention

under such policy has not yet been met.

The Company estimates it is currently obligated to pay approximately $700,000 of the retention,

which payments could have a material adverse effect on the Company.

The $700,000 have been accrued in accounts payable and accrued

liabilities in theses financial statements.

f/k/a Alliance MMA, Inc.,

619536/2019 (N.Y.

Ct., Suffolk County)

October 3, 2019, David Klarman, a former employee of Alliance, served a complaint against SCWorx seeking $400,000.00

for a breach of his employment agreement with Alliance.

Klarman claims that Alliance ceased paying him his salary in March 2018

as well as other alleged contractual benefits.

SCWorx does not believe that it owes the amount demanded and intends to vigorously

defend against these claims.

On March 6, 2020, SCWorx filed an answer and counterclaims against Mr.

On September 18,

2020, the Court granted Klarman’s counsel’s motion to withdraw as counsel due to irreconcilable differences.

“The Court stayed the case for 45 days after service of the Court’s order.

Klarman’s wife, Marie Klarman, Esq.,

filed a Notice of Appearance on November 6, 2020 and filed a motion on November 9, 2020 seeking various forms of relief -- in

violation of the Court’s Individual Rules and the Commercial Division Rules.

We opposed Klarman’s motion on December

31, 2020 and the case was marked fully submitted on January 21, 2021.

By Decision and Order dated March 26, 2021, the Court granted

Klarman’s motion to dismiss four (4) of fourteen (14) defenses, denied Klarman’s motion to dismiss SCWorx’s

counterclaims against him;

denied Klarman’s motion for summary judgment and denied Klarman’s motion to strike allegations

contained in the Affirmative Defenses and Counterclaims based on his contention that such allegations were “scandalous”

or prejudicial.

The Court has scheduled a conference for April 28, 2021 presumably to set a discovery schedule.

this time, we are unable to predict the duration, scope, or possible outcome of these investigations and lawsuits.

website address is www.SCWorx.com.

Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K,

and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (Exchange

Act), are filed with the U.S.

Securities and Exchange Commission (SEC).

We are subject to the informational requirements of the Exchange Act and

file or furnish reports, proxy statements, and other information with the SEC.

Such reports and other information filed by us

with the SEC are available free of charge on our website at www.SCWorx.com when such reports become available on the SEC’s

We are subject to the informational requirements of the

Exchange Act and file or furnish reports, proxy statements, and other information with the SEC.

Such reports and other information

filed by us with the SEC are available free of charge on our website at www.SCWorx.com when such reports become available on the

SEC’s website.

The public may read and copy any materials filed by SCWorx Corp.

with the SEC at the SEC’s Public Reference Room

at 100 F Street, NE, Room 1580, Washington, DC 20549 on official business days during the hours of 10 a.m.

public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

The SEC maintains

an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically

with the SEC at www.sec.gov.

The contents of the websites referred to above are not incorporated into this filing.

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

with the SEC at the SEC’s Public Reference

Room at 100 F Street, NE, Room 1580, Washington, DC 20549 on official business days during the hours of 10 a.m.

The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that

file electronically with the SEC at www.sec.gov.

The contents of the websites referred to above are not incorporated into this

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

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business