What changed in this filing

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Item 1. Business

2023-04-17 compared with 2022-03-31 · 130 added, 230 removed, 262 unchanged (58% of the section changed)

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perform separate functions as follows:

Virtualized 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.

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.

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 — 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 — 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.

● Virtualized

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.

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.

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.

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.

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.

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

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

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.

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.

Rebates frequently cause tracking challenges for Accounts Payable departments.

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 — 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.

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 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.

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.

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:

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.

— 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 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.

will establish the following connections with existing Enterprise Resource Planning (“ERP”) and Electronic Medical Record

(“EMR”) enterprise systems for the following:

— 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.

SCWorx continues to provide

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partnerships.

SCWorx, as part of the acquisition

of Alliance MMA, acquired an online event ticketing platform focused on serving regional MMA (“mixed martial arts”) promotions.

Due to the Covid restrictions which were put in place for large gatherings, SCWorx has paused this business activity.

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.

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.

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.

In addition, the Company’s

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business, the Company’s customers were focused on meeting the nation’s health care needs in response to the COVID-19 pandemic.

As a result, the Company believes that its customers were not able to focus resources on expanding the utilization of the Company’s

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.

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products the Company sought to source included:

Test Kits — the Company currently has no contracted supply of Rapid Test Kits.

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

Currently the Company has no contracted supply of PPE.

Kits — the Company currently has no contracted supply of Rapid Test Kits.

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

Currently the Company has no contracted

supply of PPE.

Regarding PPE and Test Kits,

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intermediary between buyers and sellers with commission-based compensation.

We are endeavoring to sell our existing inventory of PPE products

primarily through use of our internal and external sales personnel.

The sale of PPE and rapid

test kits for COVID-19 represented a new business for the Company and was 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.

Since the inception of this business, the Company completed

only minimal sales of COVID-19 rapid test kits and PPE.

The Company does not expect 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.

Clients and Strategic Partners

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Our 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;

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;

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

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.

Some of our actual and perceived

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and marketing activities.

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

SCWorx believes that these

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and/or services involved, the implementation or performance schedule requested by the client and usage by clients of SaaS for software-based

SCWorx’s agreements are generally non-cancelable but provide that the client may terminate its agreement upon a material

SCWorx’s agreements are generally non-cancellable 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.

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fees when such software is delivered to clients.

PPE and Rapid Test Kit Products

The 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.

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.

CageTix 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.

The 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.

The Company also had a lease

in Greenwich, CT which expired in March 2020 and became a month to month.

This tenancy was terminated in April 2021.

Government Regulation

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

We primarily utilize independent contractors and

third-party vendors for software, maintenance of our database and customer software installation.

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.

When only a range of possible loss can be established, the most probable amount in

the range is accrued.

If no amount within this range is a better estimate than any other amount within the range, the minimum amount in

the range is accrued.

The accrual for a litigation loss contingency might include, for example, estimates of potential damages, outside

legal fees and other directly related costs expected to be incurred.

Settlement of Consolidated

Securities Class Action

As previously disclosed,

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 us and our former CEO.

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

Subsequently, two additional class actions were filed in the same court ( Leeburn v.

and Leonard v.

SCWorx et ano.) and thereafter, the three class actions were consolidated (the “Consolidated Class Action”).

The Consolidated Class Action alleged that our company and our former CEO misled investors in connection with our April 13, 2020 press

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

As previously disclosed, on February 11, 2022, the parties entered into

a Stipulation of Settlement (subject to Court approval) to settle the Consolidated Class Action.

The settlement resolves all claims asserted

against SCWorx and the other named defendant without any admission, concession or finding of any fault, liability or wrongdoing by the

Company or any defendant.

Under the terms of this agreement, (i) the insurers for the Company and

Marc Schessel (former CEO) will make a cash payment to the class plaintiffs (ii) the former CEO will transfer 100,000 shares of company

common stock to the class plaintiffs, and (iii) the Company will issue $600,000 worth

of common stock to the class plaintiffs, in exchange for which all parties will be released from all claims related to the securities

class action litigation.

After giving effect to the share issuance by the Company, the Company believes that it will have satisfied the

accrued retention liability of $700,000.

Settlement of Consolidated

Derivative Action

As previously disclosed,

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

Steven Wallitt (current director), and Marc S.

Schessel, Robert Christie and Charles Miller (former directors) (“Director Defendants”).

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

Schessel, Charles K.

Miller, Steven Wallitt, Defendants,

and SCWorx Corp., Nominal Defendant.

The Lozano lawsuit was consolidated with another shareholder derivative lawsuit, Richter, v.

Schessel, Charles K.

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

(the “Consolidated Derivative Action”).

The Consolidated Derivative

Action alleged 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.

In addition, on October 29,

2020, Hemrita Zarins filed a shareholder derivative action in the Chancery Court in the State of Delaware against Steven Wallitt (current

director) and Marc S.

Schessel and Charles Miller ( former directors).

The action is captioned Hemrita Zarins, v.

Schessel, Robert

Christie, Steven Wallitt and SCWorx, Nominal Defendant.

The Zarins action contains substantially similar allegations as in the Consolidated

Derivative Action.

On February 15, 2022, the

Company and the Director Defendants (Marc Schessel, Steven Wallitt, Charles Miller and Robert Christie) entered into a stipulation of

settlement (subject to Court approval) with the shareholder derivative plaintiffs to settle the Consolidated Derivative Action as well

as the Zarins action.

Under the terms of the settlement, (i) the insurers for the Director Defendants will make a cash payment to legal

counsel for the shareholder derivative Plaintiffs to cover their legal fees and (ii) the Company will adopt certain corporate governance

reforms within 60 days of court approval of the settlement, in exchange for which all parties will be released from all claims related

to the derivative class action litigation.

The settlement resolves all claims asserted against the defendants without any admission, concession

or finding of any fault, liability or wrongdoing by the Company or any defendant.

Other Investigations

In addition, as previously disclosed, 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 kits.

The Company is continuing to cooperate with the SEC

regarding its investigation arising out of the April 13, 2020 press release and the events thereafter.

The Company received a Wells

notice on December 8, 2021 and an amended Wells notice on December 10, 2021.

The Wells Notice states that the staff of the Securities

and Exchange Commission has made a preliminary determination to recommend that the Commission file an enforcement action against the Company

which would allege violations of Sections 17(a)(1), 17(a)(2), and 17(a)(3) of the Securities Act of 1933 (the “Securities Act”),

Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”), and Rules 10b-5(a), 10b-5(b), and 10b-5(c) thereunder.

The Wells Notice also indicates that the staff would seek fines and disgorgement, including pre and post judgment interest in such enforcement

The Company did not make a Wells submission to the Commission in response to the Wells Notice.

Company has since been actively engaged in discussions with the Staff to settle the claims set forth in the Wells Notice.

In April 2020, we received

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

We cooperated fully with these

agencies, providing information and documents, as requested.

We have not had any requests from these agencies since January 2021.

Also in April 2020, as previously

disclosed, we were contacted by the U.S.

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

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

We have cooperated

fully with the U.S.

Attorney’s Office in its investigation.

In 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.

Upon consummation of the settlement of the Consolidated Class Action,

the Company believes it will have satisfied its accrued retention obligations with respect to the insurance coverage.

David Klarman v.

f/k/a Alliance MMA, Inc., Index No.

619536/2019 (N.Y.

Ct., Suffolk County )

On 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.

This action was settled on or about December 16, 2021

by the parties without any admission of liability or wrongdoing.

In exchange for a release, the Company agreed to settle with Mr.

with $100,000 of SCWorx shares calculated over a period of 4 months pursuant to an agreed upon schedule with respect to amounts, dates

and a restriction on sales of SCWorx stock to no more than 4,000 shares per trading day.

To date, all shares have been issued pursuant

to this agreement.

We primarily utilize independent contractors and third-party

vendors for software, maintenance of our database and customer software installation.

Available Information

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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