SCWorx Corp. 10-K

Item 9A. Controls and Procedures Management’s Conclusions Regarding Effectiveness of Disclosure Controls and Procedures Management conducted an evaluation of the effectiveness of our “disclosure controls and procedures” (“Disclosure Controls”), as defined by Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of December 31, 2025, the end of the period covered by this Annual Report on Form 10-K, as required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act. The Disclosure Controls evaluation was done under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, based on the 2013 framework and criteria established by the Committee of Sponsoring Organizations of the Treadway Commission. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, due to deficiencies caused by a lack of segregation of duties, our Disclosure Controls were not effective as of December 31, 2025, such that the information required to be disclosed by us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding disclosure. Management Report on Internal Controls over Financial Reporting Our management has identified material weaknesses in our internal controls related to a lack of segregation of duties. Management continues to work with the Audit Committee to discuss remediation efforts. Our management is currently considering looking for additional accounting and finance personnel to assist in the remediation efforts. Notwithstanding the foregoing, our management, including our Chief Executive Officer and Chief Financial Officer, have concluded that the consolidated financial statements included in this Annual Report on Form 10-K present fairly, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States. We may in the future identify other material weaknesses or significant deficiencies in connection with our internal control over financial reporting. Material weaknesses and significant deficiencies that may be identified in the future will need to be addressed as part of our quarterly and annual evaluations of our internal controls over financial reporting under Sections 302 and 404 of the Sarbanes-Oxley Act. Any future disclosures of a material weakness, or errors as a result of a material weakness, could result in a negative reaction in the financial markets and a decrease in the price of our common stock. Changes in Internal Control over Financial Reporting. None Item 9B. Other Information None . Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. Not applicable. 32 PART III Item 10. Directors, Executive Officers and Corporate Governance The following table presents information with respect to our officers, directors and significant employees as of the date of filing of this Report: Name Age Position(s) Timothy A. Hannibal 57 President & Chief Executive Officer, Director Chris Kohler 45 Chief Financial Officer Michael Burke 68 Director Troy Kirchenbauer 56 Director Vincent Matozzo 41 Director Background of Officers and Directors The following is a brief account of the education and business experience during at least the past five years of our officers and directors, indicating each person’s principal occupation during that period, and the name and principal business of the organization in which such occupation and employment were carried out. Timothy A. Hannibal Mr. Hannibal is a seasoned technology executive and entrepreneur, with nearly 30 years’ experience in SaaS and cloud technology, driving revenue, go-to-market strategies, business development and mergers and acquisitions. Mr. Hannibal joined the Company in January 2019 and currently serves as its Chief Executive Officer. Prior to joining the Company, Mr. Hannibal was an employee at Primrose Solutions (the predecessor to SCWorx) which he joined in September of 2016. At Primrose, Mr. Hannibal was responsible for overseeing marketing, sales and operations, including executing the Company’s business plan. Mr. Hannibal has a successful track record of growth and management at both startup and national companies. Prior to joining Primrose, Mr. Hannibal was the President and CEO of VaultLogix for thirteen years, a company he founded. VaultLogix was a private equity sponsored leading SaaS company in the cloud backup industry before being acquired by J2 Global, a publicly traded technology company ($3.2b market cap) focused on cloud services and digital media. Chris Kohler Mr. Kohler was appointed CFO on November 1, 2020, at which time Mr. Hannibal resigned as Interim CFO. Mr. Kohler has over 15 years of experience serving in a wide variety roles in the finance and accounting sectors. Mr. Kohler is the founder and CEO of Kohler Consulting, Inc., which he founded in 2012. The firm, through Mr. Kohler, provides outsourced CFO and advisory services to private and public companies, with a focus on small cap and start-up businesses. Michael Burke Mr. Burke was formerly the Executive Vice President and CFO of Prisma Health from 2018-2022. Prior to Prisma Health Mr. Burke served as CFO of NYU Langone Medical Center from December 2008 to July 2018 and formerly served as CFO to Tufts New England Medical Center from 2004 to 2008 and was a practicing CPA in New York through 2012. His experience with disaster recovery, large financial system integration projects, and mergers and acquisitions at each institution provides valuable insights to clients as they manage in this ever-changing healthcare environment. Prior to Tufts, Mr. Burke worked as the Chief Financial Officer of Duke University Hospital and was also a Senior Manager at KPMG. Mr. Burke graduated from St. John Fisher University with a BS, Accounting. 33 Troy Kirchenbauer Mr. Kirchenbauer is a seasoned executive with over two decades of experience driving digital transformation, product innovation, and data-driven decision-making in the healthcare industry. Throughout his career, he has been at the forefront of creating technology solutions that address complex challenges in supply chain management, business intelligence, and advanced analytics. Mr. Kirchenbauer has worked for Vizient Inc. since 2018 and is currently the Senior Vice President, Digital Supply. As Senior Vice President of Digital Supply Chain at Vizient, Mr. Kirchenbauer was instrumental in the development of a digital ecosystem designed to enhance supply chain automation and provide advanced analytics solutions. His leadership played a pivotal role in managing over $230 billion in healthcare supply spend, consolidating disparate data systems, and building e-commerce platforms that significantly improved operational efficiency for healthcare organizations. Mr. Kirchenbauer’s work at Aptitude, where he built a cutting-edge B2B marketplace, further showcases his capability in using data and analytics to drive substantial business growth, delivering over $50 million in new revenue within a few years. Mr. Kirchenbauer has a deep understanding of the nuances in healthcare supply chains and expertise in building data management systems and analytics platforms. His commitment to leveraging data for business transformation makes him an ideal leader for organizations focused on delivering innovative analytics solutions that empower healthcare providers to make smarter, data-driven decisions. Mr. Kirchenbauer graduated from Texas A&M University of Commerce and has an MBA from the University of Dallas. Vincent Matozzo Mr. Matozzo is an innovative strategist and leader recognized for driving results through effective supply chain strategies and product innovation. He is a dynamic leader who drives change and delivers results for clients, corporations, and consortiums. He is passionate about automating processes and delivering a superior customer experience while enabling teams. Mr. Matozzo is a subject matter expert in Lean and Agile process modeling, with experience in all aspects of pre-award modeling to post-award monitoring, requisitioning to reimbursement- including data visualization and procurement. He has expertise in technical execution and supply chain innovation and enjoys deploying initiatives in technology development to continuously improve interoperability and operations. Mr. Matozzo is a featured speaker and expert in supply chain organizational development and business continuity. He is skilled in designing and implementing innovative business models that produce dramatic results. Mr. Matozzo has served in various supply chain capacities across manufacturing, aerospace, and healthcare at organizations including Yale New Haven Health, Vizient, and NYU Langone Health. Mr. Matozzo has served as the CEO and Managing Partner of Paradigm Venture Group since 2020. Prior to that, he served as Director of Strategic Sourcing and Procurement Operations for Yale New Haven Health from 2019 - 2021 Code of Business Conduct and Ethics We have adopted a Code of Business Conduct and Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions and also to other employees. Our Code of Business Conduct can be found on our website at www.SCWorx.com. Family Relationships There are no family relationships between any of our directors, executive officers or significant employees. Involvement in Certain Legal Proceedings During the past ten years, none of our current officers, directors, significant employees or control persons have been involved in any legal proceedings as described in Item 401(f) of Regulation S-K. 34 Board Composition The Board of Directors currently consists of four directors. Each director will serve in office until the next annual meeting of stockholders or until their successors have been duly elected and qualified, or until the earlier of their death, resignation or removal. Our certificate of incorporation provides that that the number of authorized directors will be determined in accordance with our bylaws. Our bylaws provide that the number of authorized directors shall be determined from time to time by a resolution of the Board of Directors, and any vacancies in our board and newly created directorships may be filled only by our Board of Directors. Term of Office All of our directors are elected on an annual basis to serve until the next annual meeting of shareholders or until the earlier of their death, resignation or removal. Committees of the Board of Directors Our Board of Directors has established an audit committee, a compensation committee and a nominating and governance committee. Each of these committees operates under a charter that has been approved by our Board of Directors. Audit Committee We have a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The Audit Committee has authority to review our financial records, engage with our independent auditors, recommend policies with respect to financial reporting to the Board of Directors and investigate all aspects of our business. The current members of our Audit Committee are Mr. Burke, Mr. Kirchenbauer and Mr. Matozzo. Mr. Burke is the Chairman of the Audit Committee, and our board of directors has determined that Mr. Burke is an “Audit Committee financial expert” and that all members of the Audit Committee are “independent” as defined by the rules of the SEC and the Nasdaq rules and regulations. The Audit Committee operates under a written charter that is posted on our website at www.scworx.com. Compensation Committee The Compensation Committee oversees our executive compensation and recommends various incentives for key employees to encourage and reward increased corporate financial performance, productivity and innovation. The current members of our Compensation Committee are Mr. Kirchenbauer, Mr. Burke and Mr. Matozzo. Mr. Kirchenbauer is the current Chairman of the Compensation Committee and our board of directors has determined that all of the members of the Compensation Committee are “independent” as defined by the rules of the SEC and Nasdaq rules and regulations. The Compensation Committee operates under a written charter that is posted on our website at www.scworx.com. Nominating and Governance Committee The Nominating and Corporate Governance Committee identifies and nominates candidates for membership on the Board of Directors, oversees Board of Directors’ committees, advises the Board of Directors on corporate governance matters and any related matters required by the federal securities laws. The current members of our Nominating and Corporate Governance Committee are Mr. Matozzo, Mr. Burke, and Mr. Kirchenbauer. Mr. Matozzo is the Chairman of the Nominating and Corporate Governance Committee. Our board of directors has determined that all of the members of the Nominating and Corporate Governance Committee are “independent” as defined by Nasdaq rules and regulations. The Nominating and Governance Committee will consider stockholder recommendations for candidates for the Board of Directors. 35 Our bylaws provide that, in order for a stockholder’s nomination of a candidate for the board to be properly brought before an annual meeting of the stockholders, the stockholder’s nomination must be delivered to the Secretary of our company no later than 120 days prior to the one-year anniversary date of the prior year’s annual meeting. Charters for all three committees are available on our website at www.SCWorx.com. Changes in Nominating Procedures None. Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Exchange Act requires our executive officers and directors and persons who beneficially own more than 10% of a registered class of our equity securities to file with the SEC initial statements of beneficial ownership, statements of changes in beneficial ownership and annual statements of changes in beneficial ownership with respect to their ownership of our securities, on Forms 3, 4 and 5, respectively. Executive officers, directors and greater than 10% shareholders are required by SEC regulations to furnish us with copies of all Section 16(a) reports they file. Based solely on our review of the copies of such reports received by us, and on written representations by our officers and directors regarding their compliance with the applicable reporting requirements under Section 16(a) of the Exchange Act, and without conducting an independent investigation of our own, we believe that with respect to the fiscal year ended December 31, 2025, our officers and directors, and all of the persons known to us to beneficially own more than 10% of our common stock filed all required reports on a timely basis. Item 11. Executive Compensation The following summary compensation table sets forth information concerning compensation for services rendered in all capacities during 2025 and 2024 awarded to, earned by or paid to our executive officers. Non-Equity Stock Option Incentive Plan All Other Fiscal Salary Bonus Awards Awards Compensation Compensation Total Name and Principal Position Year $ ($) ($) ($) ($) ($) ($) Timothy Hannibal (1) 2025 252,333 - - - - 53,030 305,363 President, Chief Executive Officer and Director 2024 250,000 - - - - 51,200 301,200 Chris Kohler (2) 2025 111,500 - - - - - 111,500 Chief Financial Officer 2024 108,000 - - - - - 108,000 (1) Mr. Hannibal was hired as Chief Revenue Officer on February 1, 2019 and was appointed Interim Chief Financial Officer on June 10, 2020. On August 10, 2020 Mr. Hannibal was appointed President and Chief Operating Officer. On May 28, 2021 Mr. Hannibal was appointed President and Chief Executive Officer. (2) Mr. Kohler has served as Chief Financial Officer since November 1, 2020. 36 Directors’ Compensation The following summary compensation table sets forth information concerning compensation for services rendered in all capacities during 2025 and 2024 awarded to, earned by or paid to our directors. The value attributable to any stock option awards reflects the grant date fair values of stock awards calculated in accordance with ASC Topic 718. Fees Non-Equity Earned or Incentive Paid in Stock Option Plan All Other Fiscal Cash Bonus Awards (6) Awards Compensation Compensation Total Name and Principal Position Year ($) ($) ($) ($) ($) ($) ($) Troy Kirchenbauer (1) 2025 - - 19,126 - - - 19,126 Chairman and Director 2024 - - - - - - - Vincent Matozzo (2) 2025 - - 19,126 - - - 19,126 Director 2024 - - - - - - - Michael Burke (3) 2025 - - 22,951 - - - 22,951 Chairman and Director 2024 - - - - - - - Alton Irby (4) 2025 - - - - - - - Former Chairman and Director 2024 - - - - - - - Steven Horowitz (5) 2025 - - - - - - - Former Director 2024 - - - - - - - (1) Troy Kirchenbauer was appointed as a Director on October 31, 2024. (2) Vincent Matozzo was appointed as a Director on August 17, 2023. Effective May 15, 2024, Mr Matozzo returned all previously received stock grants to the Company. (3) Michael Burke was appointed as a Director on October 31, 2024. (4) Alton Irby was appointed as a Director on March 16, 2021. Effective May 15, 2024, Mr Irby returned all previously received stock grants to the Company. Mr Irby resigned as a Director effective October 31, 2024. (5) Steven Horowitz was appointed as a Director on August 11, 2021. Effective May 15, 2024, Mr Horowitz returned all previously received stock grants to the Company. Mr Horowitz resigned as a Director effective October 31, 2024. (6) Stock compensation reported above represents accrued but not yet issued shares as of December 31, 2025 37 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The following table sets forth certain information regarding beneficial ownership of our common stock as of March 31, 2026: (i) by each of our directors, (ii) by each of the named executive officers, (iii) by all of our executive officers and directors as a group, and (iv) by each person or entity known by us to beneficially own more than five percent (5%) of any class of our outstanding shares. As of March 31, 2026, there were 15,999,423 shares of our common stock outstanding. Amount and Nature of Beneficial Ownership as of March 31, 2026 (1) Common Preferred Options/ Percentage Named Executive Officers and Directors Stock Stock Warrants Total Ownership Current Timothy Hannibal 54,788 - - 54,788 * % Chris Kohler 6,983 - - 6,983 * % Michael Burke - - - - * % Vincent Matozzo - - - - * % Troy Kirchenbauer - - - - * % Directors and Executive Officers as a Group (5 persons) 61,771 - - 61,771 * % Former Alton Irby - - - - * % Steven Horowitz - - - - * % * Represents beneficial ownership of less than 1% of our outstanding stock. (1) In determining beneficial ownership of our common stock as of a given date, the number of shares shown includes shares of common stock that may be acquired upon the exercise of stock options within 60 days of March 31, 2026. In determining the percent of common stock owned by a person or entity on March 31, 2026, (a) the numerator is the number of shares of the class beneficially owned by such person or entity, including shares which may be acquired within 60 days of March 31, 2026 upon the exercise of stock options, and (b) the denominator is the sum of (i) the total shares of common stock outstanding on March 31, 2026 and (ii) the total number of shares that the beneficial owner may acquire upon exercise of stock options within 60 days March 31, 2026. Unless otherwise indicated, the address of each of the individuals and entities named below is c/o SCWorx Corp., 35 Village Rd. Suite 100, Middleton, MA 01949. Item 13. Certain Relationships and Related Transactions, and Director Independence Certain Relationships and Related Transactions At December 31, 2025 and 2024 the Company had a payable due to an officer in the amount of $149,838 for contract work performed prior to becoming an officer. During September 2021, the Company’s former CEO and shareholder advanced $100,000 in cash to the Company for short term capital requirements. This amount is non-interest bearing and payable upon demand. As of December 31, 2025, all amounts owed have been remitted. The Company had a balance of $67,622 included in shareholder advance on the Company’s consolidated balance sheets as of December 31, 2024. Between January 18, 2024 and July 11, 2024, the Company’s CFO advanced an aggregate $128,479 in cash to the Company for short term capital requirements. As of December 31, 2024, all advanced amounts had been repaid. The above amounts and terms are not necessarily indicative of what third parties would agree to. 38 Director Independence The rules of the Nasdaq Capital Market, or the Nasdaq Rules, require a majority of a listed company’s board of directors to be composed of independent directors within one year of listing. In addition, the Nasdaq Rules require that, subject to specified exceptions, each member of a listed company’s audit, compensation and nominating and governance committees be independent. Under the Nasdaq Rules, a director will qualify as an independent director only if, in the opinion of our Board of Directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The Nasdaq Rules also require that audit committee members satisfy independence criteria set forth in Rule 10A-3 under the Exchange Act, as amended. In order to be considered independent for purposes of Rule 10A-3, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the board of directors, or any other board committee, accept, directly or indirectly, any consulting, advisory, or other compensatory fee from the listed company or any of its subsidiaries or otherwise be an affiliated person of the listed company or any of its subsidiaries. In considering the independence of compensation committee members, the Nasdaq Rules require that our Board of Directors must consider additional factors relevant to the duties of a compensation committee member, including the source of any compensation we pay to the director and any affiliations with our company. Our Board of Directors undertook a review of the composition of our Board of Directors and its committees and the independence of each director. Based upon information requested from and provided by each director concerning his background, employment and affiliations, including family relationships, our Board of Directors has determined that each of our directors other than Tim Hannibal, is independent based on the definition of independence in the Nasdaq listing standards. Item 14. Principal Accountant Fees and Services The Audit Committee of the Board of Directors has selected Astra Audit and Advisory, LLC (“Astra”), an independent registered public accounting firm, to audit our consolidated financial statements for the years ended December 31, 2025 and 2024. BF Borgers CPA PC served as our independent registered public accounting firm from April 2021 through May 2024 at which time the US Securities and Exchange Commission (“Commission”) entered an Order denying BF Borgers CPA PC (“BF Borgers”) the privilege of appearing or practicing before the Commission as an accountant. The Company subsequently terminated BF Borgers as its independent registered public accounting firm. Principal Accountant Fees and Services During 2025 and 2024, fees for services provided by Astra Audit and Advisory, LLC were as follows: For the year ended December 31, 2025 2024 Audit Fees $ 201,305 $ 179,114 Audit-Related Fees - - Tax Fees - - All Other Fees - - Total $ 201,305 $ 179,114 39 During 2025 and 2024, fees for services provided by BF Borgers CPA PC were as follows: For the year ended December 31, 2025 2024 Audit Fees $ - $ 99,000 Audit-Related Fees - - Tax Fees - - All Other Fees - - Total $ - $ 99,000 Audit Fees Audit fees for 2025 and 2024 include amounts related to the audit of our annual consolidated financial statements reported on Form 10-K, quarterly review of the consolidated financial statements included in our Quarterly Reports on Form 10-Q and review of registration statements filed on Form S-1. Audit Related Fees Audit Related Fees include amounts related to accounting consultations and services. Tax Fees Tax Fees include fees billed for tax compliance, tax advice and tax planning services. All Other Fees The Audit Committee pre-approves all audit and permissible non-audit services provided by our independent registered public accounting firm. These services may include audit services, audit-related services, tax and other services. Pre-approval is generally provided for up to one year, and any pre-approval is detailed as to the particular service or category of services. The independent registered public accounting firm and management are required to periodically report to the Audit Committee regarding the extent of services provided by the independent registered public accounting firm in accordance with this pre-approval, and the fees for the services performed to date. The Audit Committee may also pre-approve particular services on a case-by-case basis. 40 PART IV Item 15. Exhibits and Financial Statement Schedules (a) The following documents are filed as a part of this report: (1) Financial Statements . See Index to Consolidated Financial Statements, which appears on page F-1 hereof. The consolidated financial statements listed in the accompanying Index to Consolidated Financial Statements are filed herewith in response to this Item. (2) Financial Statement Schedules . Schedules are omitted because the required information is not present or is not present in amounts sufficient to require submission of the schedule or because the information required is given in the consolidated financial statements or the notes thereto. (3) Exhibits . The information required by this Item 15 is incorporated by reference to the Index to Exhibits accompanying this Annual Report on Form 10-K. 41 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SCWorx Corp. By: /s/ Timothy Hannibal Timothy Hannibal President, Chief Executive Officer March 31, 2026 By: /s/ Chris Kohler Chris Kohler Chief Financial Officer March 31, 2026 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated. /s/ Timothy Hannibal Timothy Hannibal President, Chief Executive Officer, Director March 31, 2026 /s/ Chris Kohler Chris Kohler Chief Financial Officer March 31, 2026 /s/ Michael Burke Michael Burke, Chairman March 31, 2026 /s/ Vincent Matazzo Vincent Matazzo Director March 31, 2026 /s/ Troy Kirchenbauer Trou Kirchenbauer Director March 31, 2026 42 Index to Consolidated Financial Statements SCWorx Corp. Consolidated Financial Statements Page Number Report of Independent Registered Accounting Firm (PCAOB ID Number 6920 ) F-2 C onsolidated balance sheets as of December 31, 2025 and 2024 F-5 Consolidated statements of operations for the years ended December 31, 2025 and 2024 F-6 Consolidated statements of changes in stockholders’ equity for the years ended December 31, 2025 and 2024 F-7 Consolidated statements of cash flows for the years ended December 31, 2025 and 2024 F-8 Notes to consolidated financial statements F-9 F- 1 Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of SCWorx Corp. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of SCWorx Corp. (the Company) as of December 31, 2025 and 2024, and the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2025, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Impairment of Goodwill As described in Note 5 to the Company’s financial statements, the Company evaluates Goodwill for impairment at least once annually or more frequently if events or circumstances indicate that the goodwill might be impaired. The Company first assesses qualitative factors to determine whether it is necessary to perform the quantitative analysis. If, after assessing the totality of events or circumstances, the Company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying value then quantitative goodwill impairment test is unnecessary. The goodwill balance was $5,842,433 related to the SaaS reporting unit. The Company uses the discounted cash flow model to estimate the fair value of the SaaS reporting unit, which requires management to make subjective estimates and assumptions related to forecasts of future revenues. Changes in these assumptions could have a significant impact on either the fair value, the amount of any impairment charge, or both. The fair value of the SaaS reporting unit exceeded its carrying value as of the measurement date and, therefore, no impairment was recognized. We identified the Company’s calculation of the fair value of the reporting unit to assess the need for impairment as a critical audit matter. The principal considerations for our determination of this critical audit matter related to the high degree of subjectivity in the Company’s judgments in determining the qualitative and quantitative factors. Auditing these judgments and assumptions by the Company involves auditor judgment due to the nature and extent of audit evidence and effort required to address these matters. F- 2 The primary procedures we performed to address these critical audit matters included the following: - We obtained Management’s calculations, forecasts, and conclusion and performed the following procedures: o Reviewed calculations and forecasts, and evaluated the reasonableness of Management’s calculation, forecast, and significant assumptions used by the Company, specifically related to revenue growth. o Performed a sensitivity analysis on key inputs. o Recalculated management’s fair value of the reporting unit. o Developed a range of independent estimates of the fair value of the reporting unit and compared to the fair value determined by Management. Valuation of Warrants and Allocation of Proceeds to Convertible Notes Payable As described in Note 9 to the Company’s financial statements, the Company issued warrants in connection with convertible notes payable during the year. The Company is required to estimate the fair value of the warrants at issuance, with the relative fair value allocated between the warrants and the debt instrument, resulting in the recognition of a debt discount. The fair value of the warrants issued was significantly higher than the debt proceeds received, resulting in a 100% debt discount. The estimation of the fair value of the warrants requires management to make significant assumptions, including those related to volatility, expected term, risk-free interest rate, and other inputs used in valuation models. Changes in these assumptions could have a significant impact on the fair value of the warrants and the resulting debt discount. We identified the valuation of the warrants and the related debt discount as a critical audit matter. The principal considerations for our determination of this critical audit matter were the high degree of subjectivity involved in evaluating the assumptions used in the valuation model, as well as the complexity of the accounting for the warrants and allocation of proceeds. Auditing these assumptions required a high degree of auditor judgment and specialized knowledge. The primary procedures we performed to address this critical audit matter included the following: ● We obtained management’s analysis and valuation of the warrants and performed the following procedures: o Tested Management’s classification, by evaluating the technical terms. o Evaluated the appropriateness of the valuation methodology used by the Company. o Assessed the reasonableness of significant assumptions, including volatility, expected term, and risk-free interest rate. o Tested the completeness and accuracy of the underlying data used in the valuation. o Recalculated the fair value of the warrants using management’s assumptions. ● We evaluated the accounting treatment and allocation of proceeds between the debt and warrants, including the resulting recognition of the debt discount. Valuation and Accounting for the Warrant Inducement As described in Note 9 to the Company’s financial statements, the Company entered into a warrant inducement transaction in September 2025, whereby certain holders of equity-classified warrants were granted additional warrants to incentivize the settlement of out of the money warrants. The Company is required to estimate the incremental fair value of the newly issued warrants compared to the original warrants at the date of exercise. Because the inducement was offered to specific holders to raise capital rather than as a pro-rata distribution to all shareholders, the incremental fair value was recognized as a non-cash inducement expense. The estimation of the fair value of the warrants requires management to make significant assumptions, including those related to volatility, expected term, risk-free rate, and other inputs used valuation models. Changes in these assumptions could have a significant impact on the fair value of the warrants and the resulting inducement expense. F- 3 We identified the accounting for the warrant inducement and the measurement of the incremental fair value as a critical audit matter. The principal consideration for our determination of this critical audit matter was the high degree of subjectivity involved in evaluating the assumptions used in the valuation models, as well as the complexity of the accounting for the inducement under ASU 2021-04 and ASC 470. Auditing these assumptions and the classification of the transaction required a high degree of auditor judgement and specialized knowledge. The primary procedures we performed to address this critical audit matter included the following: ● We obtained management’s analysis and valuation of the warrant inducement and performed the following procedures: o Tested Management’s classification, by evaluating the contractual terms of the inducement offer and the underlying financial instrument, and the Company’s relationship with the Holders to verify the appropriate classification as an inducement expense, rather than a deemed dividend. o Evaluated the appropriateness of the valuation methodology used by the Company to determine the incremental fair value of the sweetener warrants. o Assessed the reasonableness of significant assumptions, including volatility, expected term, and risk-free interest rate. o Tested the completeness and accuracy of the underlying data used in the valuation. o Recalculated the incremental fair value of the warrants using management’s assumptions on the date of issuance. ● We evaluated the accounting treatment and under ASU 2021-04 and ASC-470, including the impact of the inducement on the consolidated statement of operations and the related disclosures in the financial statements. Astra Audit & Advisory LLC We have served as the Company’s auditor since 2024. Tampa, Florida March 31, 2026 F- 4 SCWorx Corp. Consolidated Balance Sheets December 31, December 31, ASSETS 2025 2024 Current assets: Cash $ 1,644,439 $ 106,654 Accounts receivable, net 313,350 372,716 Prepaid expenses and other assets 65,627 24,008 Total current assets 2,023,416 503,378 Property and equipment, net 10,220 - Intangible assets 20,019 - Goodwill 5,842,433 5,842,433 Total assets $ 7,896,088 $ 6,345,811 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued liabilities $ 433,469 $ 1,237,637 Accounts payable and accrued liabilities - related party 149,838 149,838 Shareholder advance - 67,622 Deferred revenue 158,750 354,083 Convertible loans payable, net of discounts - current portion 1,539 - Loans payable - 27,369 Total current liabilities 743,596 1,836,549 Long-term liabilities: Convertible loans payable, net of discounts - 19,660 Total long-term liabilities - 19,660 Total liabilities 743,596 1,856,209 Commitments and contingencies (Note 8) Stockholders’ equity: Series A Convertible Preferred stock, $ 0.001 par value; 900,000 shares authorized; 39,810 shares issued and outstanding 40 40 Common stock, $ 0.001 par value; 150,000,000 shares authorized; 15,826,834 and 1,859,525 shares issued and outstanding at December 31, 2025 and 2024, respectively 15,826 1,859 Additional paid-in capital 42,556,801 35,463,769 Accumulated deficit ( 35,420,175 ) ( 30,976,066 ) Total stockholders’ equity 7,152,492 4,489,602 Total liabilities and stockholders’ equity $ 7,896,088 $ 6,345,811 The accompanying notes are an integral part of these consolidated financial statements. F- 5 SCWorx Corp. Consolidated Statements of Operations For the Years Ended December 31, 2025 2024 Revenue $ 2,877,629 $ 2,989,599 Cost of revenue 1,957,923 2,243,614 Gross profit 919,706 745,985 Operating expenses: Legal and professional 510,951 980,897 Salaries and wages 513,727 268,399 General and administrative 853,343 756,115 Depreciation 404 - Total operating expenses 1,878,425 2,005,411 Loss from operations ( 958,719 ) ( 1,259,426 ) Other income (expense) Interest expense ( 2,985,597 ) ( 104,201 ) Warrant modification expense ( 565,277 ) - Gain of forgiveness of accounts payable 143,588 227,402 Loss on shares issued for legal settlement ( 78,104 ) - Total other (expense) income ( 3,485,390 ) 123,201 Net loss before income taxes ( 4,444,109 ) ( 1,136,225 ) Provision for (benefit from) income taxes - - Net loss $ ( 4,444,109 ) $ ( 1,136,225 ) Net loss per share, basic and diluted $ ( 0.61 ) $ ( 0.78 ) Weighted average common shares outstanding, basic and diluted 7,275,305 1,458,691 The accompanying notes are an integral part of these consolidated financial statements. F- 6 SCWorx Corp. Consolidated Statements of Changes in Stockholders’ Equity Preferred Stock Common stock Additional paid-in Accumulated Year ended December 31, 2025 Shares $ Shares $ capital Deficit Total Balances, December 31, 2024 39,810 $ 40 1,859,525 $ 1,859 $ 35,463,769 $ ( 30,976,066 ) $ 4,489,602 Shares issued for legal settlement - - 601,250 601 361,409 - 362,010 Shares issued for conversion of convertible loans and interest - - 7,690,059 7,690 2,903,789 - 2,911,479 Issuance of warrants in conjunction with convertible loans - - - - 1,385,000 - 1,385,000 Shares issued for the exercise of warrants - - 5,676,000 5,676 1,816,353 - 1,822,029 Warrant modification - - - - 565,277 - 565,277 Stock based compensation - - - - 61,204 - 61,204 Net loss - - - - - ( 4,444,109 ) ( 4,444,109 ) Ending balance, December 31, 2025 39,810 $ 40 15,826,834 $ 15,826 $ 42,556,801 $ ( 35,420,175 ) $ 7,152,492 Preferred Stock Common stock Additional paid-in Accumulated Year ended December 31, 2024 Shares $ Shares $ capital deficit Total Balances, December 31, 2023 39,810 $ 40 1,232,333 $ 1,232 $ 33,692,018 $ ( 29,839,841 ) $ 3,853,449 Shares issued as settlement of accounts payable - - 157,639 158 271,673 - 271,831 Shares issued for legal settlement - - 235,328 235 359,112 - 359,347 Shares issued for vested restricted stock units - - 1,667 2 ( 2 ) - - Shares issued for common stock placement – net of offering costs of $ 32,000 - - 232,558 232 167,768 - 168,000 Issuance of warrants in conjunction with convertible loans - - - - 973,200 973,200 Net loss - - - - - ( 1,136,225 ) ( 1,136,225 ) Ending balance, December 31, 2024 39,810 $ 40 1,859,525 $ 1,859 $ 35,463,769 $ ( 30,976,066 ) $ 4,489,602 The accompanying notes are an integral part of these consolidated financial statements. F- 7 SCWorx Corp. Consolidated Statements of Cash Flows For the Years Ended December 31, 2025 2024 Cash flows from operating activities: Net loss $ ( 4,444,109 ) $ ( 1,136,225 ) Adjustments to reconcile net loss to net cash used in operating activities: Amortization of debt discount 2,601,165 49,660 Depreciation 404 - Loss on shares issued for legal settlement 78,104 - Gain on forgiveness of accounts payable ( 143,588 ) ( 227,402 ) Warrant modification expense 565,277 - Stock based compensation 61,204 - Common stock issued for settlement of payables - 271,831 Common stock issued for legal settlements - 74,053 Credit loss expense 35,200 25,500 Changes in operating assets and liabilities: Accounts receivable 24,166 ( 93,403 ) Prepaid expenses and other assets ( 41,619 ) 15,525 Accounts payable and accrued liabilities ( 84,481 ) ( 39,331 ) Deferred revenue ( 195,333 ) ( 24,500 ) Net cash used in operating activities ( 1,543,610 ) ( 1,084,292 ) Cash flows from investing activities: Additions to intangible assets ( 20,019 ) - Purchase of fixed assets ( 10,624 ) - Net cash used in investing activities: ( 30,643 ) - Cash flows from financing activities: Proceeds from the sale of common stock, net - 168,000 Proceeds from loans payable, net 1,385,000 994,500 Payments on loans payable ( 27,369 ) ( 62,990 ) Proceeds from the exercise of warrants, net of costs 1,822,029 - Payments on shareholder advance ( 67,622 ) - Proceeds from accounts payable and accrued liabilities - related party - 128,479 Payments on accounts payable and accrued liabilities - related party - ( 128,479 ) Net cash provided by financing activities 3,112,038 1,099,510 Net increase in cash 1,537,785 15,218 Cash, beginning of period 106,654 91,436 Cash, end of period $ 1,644,439 $ 106,654 Supplemental disclosures of cash flow information: Cash paid for interest $ 73 $ 30,591 Cash paid for income taxes $ - $ - Non-cash investing and financing activities: Shares issued for vested restricted stock units $ - $ 2 Shares issued for conversion of convertible loans and interest $ 2,911,479 $ - Shares issued for accrued legal settlement $ 283,906 $ 285,294 Warrants issued in conjunction with convertible loans $ 1,385,000 $ 973,200 Warrants issued in conjunction with inducement agreement $ 565,277 $ - The accompanying notes are an integral part of these consolidated financial statements. F- 8 SCWorx Corp. Notes to Consolidated Financial Statements Years ended December 31, 2025 and 2024 Note 1. Description of Business Nature of Business 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. On 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. In June 2018, the Company began to collect subscriptions for common stock. From June to November 2018, the Company collected $ 1,250,000 in subscriptions and issued 3,125 shares of common stock to new third-party investors. On November 30, 2018, the Company and certain of its stockholders agreed to cancel 6,510 shares of common stock. 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 subsidiary. Operations of the Business SCWorx is a provider of data content and services related to the repair, normalization and interoperability of information for healthcare providers and big data analytics for the healthcare industry. SCWorx has developed and markets health information technology solutions and associated services that improve healthcare processes and information flow within hospitals. SCWorx’s software platform enables healthcare providers to simplify, repair, 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”). SCWorx’s solutions are designed to improve the flow of information quickly and accurately between the existing supply chain, electronic medical records, clinical systems, and patient billing functions. The software is designed to achieve multiple operational benefits such as supply chain cost reductions, decreased accounts receivables aging, accelerated and more accurate billing, contract optimization, increased supply chain management and cost visibility, synchronous Charge Description Master (“CDM”) and control of vendor rebates and contract administration fees. 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. SCWorx’s software modules perform separate functions as follows: ● virtualized Item Master File repair, expansion and automation; ● CDM management; ● contract management; ● request for proposal automation; ● rebate management; ● big data analytics modeling; and ● data integration and warehousing. F- 9 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. The Company’s 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. SCWorx’s software solutions are delivered to clients within a fixed term period, typically a three-to-five-year contracted term, where such software is hosted in SCWorx data centers (Amazon Web Service’s “AWS” or RackSpace) and accessed by the client through a secure connection in a software as a service (“SaaS”) delivery method. SCWorx currently sells its solutions and services in the United States to hospitals and health systems through its direct sales force and its distribution and reseller partnerships. Note 2. Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). The accompanying consolidated financial statements include the accounts of SCWorx and its wholly-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. Cash Cash is maintained with various financial institutions. Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash deposits. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $ 250,000 . The Company had amounts in excess of the FDIC insured limit of $ 1,356,754 as of December 31, 2025. The Company did not have any amounts in excess of the FDIC insured limit for as of December 31, 2024. Fair Value of Financial Instruments Management applies fair value accounting for significant financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements. Management defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, management considers the principal or most advantageous market in which it would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. F- 10 Concentration of Credit and Other Risks Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and accounts receivable. The Company believes that any concentration of credit risk in its accounts receivable is substantially mitigated by the Company’s evaluation process, relatively short collection terms and the high level of credit worthiness of its customers. The Company performs ongoing internal credit evaluations of its customers’ financial condition, obtains deposits and limits the amount of credit extended when deemed necessary but generally requires no collateral. Significant customers are those which represent more than 10% of the Company’s revenue for each period presented, or the Company’s accounts receivable balance as of each respective consolidated balance sheet date. For each significant customer, revenue as a percentage of total revenue and accounts receivable as a percentage of total net accounts receivable are as follows: Revenue For the years ended Accounts Receivable December 31, December 31, Customers 2025 2024 2025 2024 Customer A 15 % 15 % 32 % 11 % Customer B 14 % 13 % - % 18 % Customer C 19 % 20 % 8 % 20 % Customer D 7 % 7 % 11 % 27 % Accounts Receivable and Allowance for Credit Losses Accounts receivable are comprised of amounts billed and currently due from customers. Accounts receivable are amounts related to any unconditional right the Company has for receiving consideration and are presented as accounts receivable in the consolidated balance sheets. The Company maintains an allowance for credit losses for estimated losses resulting from the inability of our customers to make required payments. The Company employs the practical expedient to estimate expected credit losses for current accounts receivable by utilizing subsequent cash collections. The evaluation of subsequent cash collections was performed through March 20, 2026, for the annual reporting period ended December 31, 2025. Management considers the following factors when determining the collectability of specific customer accounts: customer creditworthiness, past transaction history with the customer, current industry trends, changes in customer payment terms, and specific customer situations. The Company’s normal collection cycle ranges between thirty and 60 days. Estimated uncollectible amounts are charged to earnings and a credit to a valuation allowance. Balances which remain outstanding after reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable. The Company recorded an allowance for credit losses of $ 55,200 and $ 20,000 as of December 31, 2025 and 2024, respectively. Leases The Company determines if an arrangement is a lease at inception. The current portion of lease obligations are included in accounts payable and accrued liabilities on the consolidated balance sheets. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company’s lease terms may include options to extend or terminate the lease, which are included in the lease ROU asset when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease components only, none with non-lease components, which are generally accounted for separately. Management has elected a short-term lease exception policy on all classes of underlying assets, permitting the Company to not apply the recognition requirements of this standard to short-term leases (i.e. leases with terms of 12 months or less) (refer to Note 7, Leases, for additional detail). F- 11 Goodwill and Impairment Goodwill Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the net tangible and identified intangible assets acquired under a business combination. Goodwill also includes acquired assembled workforce, which does not qualify as an identifiable intangible asset. The Company reviews impairment of goodwill annually in the fourth quarter, or more frequently if events or circumstances indicate that the goodwill might be impaired. The Company first assesses qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. If, after assessing the totality of events or circumstances, the Company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then the quantitative goodwill impairment test is unnecessary. For further discussion of goodwill, refer to Note 5, Goodwill. Intangible Assets and Impairment of Long Lived Assets The Company capitalizes costs incurred during the application development stage for internal-use software, which include external direct costs of materials and services, as well as payroll-related costs for employees directly associated with the software development. Costs related to the preliminary project phase, training, and maintenance are expensed as incurred. Once the software is ready for its intended use, capitalized costs are amortized on a straight-line basis over an estimated useful life of 3 to 5 years in accordance with the provisions of Accounting Standard Codification (“ASC”) 350, “ Goodwill and Other Intangible Assets ”. The assessment of any impairment of these assets is dependent upon estimates of recoverable amounts that consider factors such as economic and market conditions and the useful lives of assets. If, after assessing the totality of events or circumstances, the Company determines that it is not more likely than not that the fair value of an asset is less than its carrying amount, then the company records impairment of the asset. Revenue Recognition The Company recognizes revenue in accordance with Topic 606 to depict the transfer of promised goods or services in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. To determine revenue recognition for arrangements within the scope of Topic 606 the Company performs the following steps: ● Step 1: Identify the contract(s) with a customer ● Step 2: Identify the performance obligations in the contract ● Step 3: Determine the transaction price ● Step 4: Allocate the transaction price to the performance obligations in the contract ● Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation The Company follows the accounting revenue guidance under Topic 606 to determine whether contracts contain more than one performance obligation. Performance obligations are the unit of accounting for revenue recognition and generally represent the distinct goods or services that are promised to the customer. The Company has identified the following performance obligations in its SaaS contracts with customers: 1) Data Normalization: which includes data preparation, product and vendor mapping, product categorization, data enrichment and other data related services, 2) Software-as-a-service (“SaaS”): which is generated from clients’ access of and usage of the Company’s hosted software solutions on a subscription basis for a specified contract term, which is usually annually. In SaaS arrangements, the client cannot take possession of the software during the term of the contract and generally has the right to access and use the software and receive any software upgrades published during the subscription period, 3) Maintenance: which includes ongoing data cleansing and normalization, content enrichment, and optimization, and 4) Professional Services: mainly related to specific customer projects to manage and/or analyze data and review for cost reduction opportunities. F- 12 A contract will typically include Data Normalization, SaaS and Maintenance, which are distinct performance obligations and are accounted for separately. The transaction price is allocated to each separate performance obligation on a relative stand-alone selling price basis. Significant judgement is required to determine the stand-alone selling price for each distinct performance obligation and is typically estimated based on observable transactions when these services are sold on a stand-alone basis. At contract inception, an assessment of the goods and services promised in the contracts with customers is performed and a performance obligation is identified for each distinct promise to transfer to the customer a good or service (or bundle of goods or services). To identify the performance obligations, the Company considers all the goods or services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. Revenue is recognized when the performance obligation has been met. The Company considers control to have transferred upon delivery because the Company has a present right to payment at that time, the Company has transferred use of the good or service, and the customer is able to direct the use of, and obtain substantially all the remaining benefits from, the good or service. The Company’s SaaS and Maintenance contracts typically have termination for convenience without penalty clauses and accordingly, are generally accounted for as month-to-month agreements. If it is determined that the Company has not satisfied a performance obligation, revenue recognition will be deferred until the performance obligation is deemed to be satisfied. Revenue recognition for the Company’s performance obligations are as follows: Data Normalization and Professional Services The Company’s Data Normalization and Professional Services are typically a fixed fee. When these services are not combined with SaaS or Maintenance revenues as a single unit of accounting, these revenues are recognized as the services are rendered and when contractual milestones are achieved and accepted by the customer. When these services are combined with SaaS or Maintenance revenues, revenues are recognized ratably over the period of the contract. SaaS and Maintenance SaaS and Maintenance revenues are recognized ratably over the contract terms beginning on the commencement date of each contract, which is the date on which the Company’s service is made available to customers. The Company does have some contracts that have payment terms that differ from the timing of revenue recognition, which requires the Company to assess whether the transaction price for those contracts include a significant financing component. The Company has elected the practical expedient that permits an entity to not adjust for the effects of a significant financing component if it expects that at the contract inception, the period between when the entity transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. The Company does not maintain contracts in which the period between when the entity transfers a promised good or service to a customer and when the customer pays for that good or service exceeds the one-year threshold. The Company has one revenue stream, from the SaaS business, and believes it has presented all varying factors that affect the nature, timing and uncertainty of revenues and cash flows. Remaining Performance Obligations As of December 31, 2025, the Company had $ 158,750 of remaining performance obligations recorded as deferred revenue. The Company expects to recognize sales relating to these existing performance obligations during 2026. As of December 31, 2024, the Company had $ 354,083 of remaining performance obligations recorded as deferred revenue. The Company recognized sales relating to these existing performance obligations during 2025. Costs to Fulfill a Contract Costs to fulfill a contract typically include costs related to satisfying performance obligations as well as general and administrative costs that are not explicitly chargeable to customer contracts. These expenses are recognized and expensed when incurred in accordance with ASC 340-40, “Other Assets and Deferred Costs—Contracts with Customers” . F- 13 Cost of Revenue Cost of revenues primarily represent data center hosting costs, consulting services and maintenance of the Company’s large data array that were incurred in delivering professional services and maintenance of the Company’s large data array during the periods presented. Convertible Debt and Amortization of Debt Discounts The Company has issued various debt instruments with warrants and conversion features for which total proceeds were allocated to individual instruments based on the relative fair value of each instrument at the time of issuance. The relative fair value of the warrants and conversion was recorded as discount on debt and amortized over the term of the respective debt. For the years ended December 31, 2025 and 2024, amortization of debt discount was $ 2,601,165 and $ 49,660 , respectively and is included in interest expense on the Company’s consolidated statements of operations. Contract Balances Contract assets arise when the revenue associated prior to the Company’s unconditional right to receive a payment under a contract with a customer ( i.e ., unbilled revenue) and are derecognized when either it becomes a receivable or the cash is received. There were no contract assets as of December 31, 2025 and 2024. Contract liabilities arise when customers remit contractual cash payments in advance of the Company satisfying its performance obligations under the contract and are derecognized when the revenue associated with the contract is recognized when the performance obligation is satisfied. Contract liabilities were $ 158,750 and $ 354,083 as of December 31, 2025 and 2024, respectively. Income Taxes The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “ Income Taxes .” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. Valuation allowances are provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. As of December 31, 2025 and 2024, the Company has evaluated available evidence and concluded that the Company may not realize all the benefits of its deferred tax assets; therefore, a valuation allowance has been established for its deferred tax assets. ASC Topic 740-10-30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740-10-40 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company has no material uncertain tax positions for any of the reporting periods presented. Stock-Based Compensation The Company accounts for stock-based compensation expense in accordance with the authoritative guidance on share-based payments. Under the provisions of the guidance, stock-based compensation expense is measured at the grant date based on the fair value of the option or warrant using a Black-Scholes option pricing model and is recognized as expense on a straight-line basis over the requisite service period, which is generally the vesting period. F- 14 The authoritative guidance also requires that the Company measures and recognizes stock-based compensation expense upon modification of the term of stock award. The stock-based compensation expense for such modification is accounted for as a repurchase of the original award and the issuance of a new award. Calculating stock-based compensation expense requires the input of highly subjective assumptions, including the expected term of the stock-based awards, stock price volatility, and the pre-vesting option forfeiture rate. The Company estimates the expected life of options granted based on historical exercise patterns, which are believed to be representative of future behavior. The Company estimates the volatility of the Company’s common stock on the date of grant based on historical volatility. The assumptions used in calculating the fair value of stock-based awards represent the Company’s best estimates, but these estimates involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and the Company uses different assumptions, its stock-based compensation expense could be materially different in the future. In addition, the Company is required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. The Company estimates the forfeiture rate based on historical experience of its stock-based awards that are granted, exercised and cancelled. If the actual forfeiture rate is materially different from the estimate, stock-based compensation expense could be significantly different from what was recorded in the current period. The Company also grants performance based restricted stock awards to employees and consultants. These awards will vest if certain employee\consultant-specific or company-designated performance targets are achieved. If minimum performance thresholds are achieved, each award will convert into a designated number of the Company’s common stock. If minimum performance thresholds are not achieved, then no shares will be issued. Based upon the expected levels of achievement, stock-based compensation is recognized on a straight-line basis over the requisite service period. The expected levels of achievement are reassessed over the requisite service periods and, to the extent that the expected levels of achievement change, stock-based compensation is adjusted in the period of change and recorded on the consolidated statements of operations and the remaining unrecognized stock-based compensation is recorded over the remaining requisite service period. Refer to Note 9, Stockholders’ Equity, for additional detail. Loss Per Share The Company computes earnings (loss) per share in accordance with ASC 260, “ Earnings per Share ” which requires presentation of both basic and diluted earnings (loss) per share (“EPS”) on the face of the consolidated income statement. Basic EPS is computed by dividing the loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants and the exercise of fully vested restricted stock units. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. As of December 31, 2025 and 2024, the Company had 54,177,461 and 9,038,072 , respectively, common stock equivalents outstanding. Indemnification The Company provides indemnification of varying scope to certain customers against claims of intellectual property infringement made by third parties arising from the use of the Company’s software. In accordance with authoritative guidance for accounting for guarantees, the Company evaluates estimated losses for such indemnification. The Company considers such factors as the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of loss. To date, no such claims have been filed against the Company and no liability has been recorded in its consolidated financial statements. As permitted under Delaware law, the Company has agreements whereby it indemnifies its officers and directors for certain events or occurrences while the officer or director is, or was, serving at the Company’s request in such capacity. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited. In addition, the Company has directors’ and officers’ liability insurance coverage that is intended to reduce its financial exposure and may enable it to recover any payments above the applicable policy retention. F- 15 Contingencies The Company records a liability when the Company believes that it is both probable that a loss has been incurred, and the amount can be reasonably estimated. If the Company determines that a loss is reasonably possible, and the loss or range of loss can be estimated, the Company discloses the possible loss in the notes to the consolidated financial statements. The Company reviews the developments in its contingencies that could affect the amount of the provisions that has been previously recorded, and the matters and related possible losses disclosed. The Company adjusts provisions and changes to its disclosures accordingly to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and updated information. Significant judgment is required to determine both the probability and the estimated amount. Legal costs associated with loss contingencies are accrued based upon legal expenses incurred by the end of the reporting period. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. The Company regularly evaluates estimates and assumptions related to the allowance for credit losses, the estimated useful lives and recoverability of long-lived assets, equity component of convertible debt, stock-based compensation, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. Actual results could differ materially from those estimates. Recently Issued Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) that are adopted by the Company as of the specified effective date. If not discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s consolidated financial statements upon adoption. In June 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820), “ Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions ,” which clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair values; it also requires additional disclosures, including the nature and remaining duration of such restrictions. The guidance is effective for fiscal years beginning after December 15, 2023, with early application permitted. The adoption did not have an impact on its consolidated financial statements. In July 2025, the FASB issued ASU 2025-05, “ Financial Instruments—Credit Losses (Topic 326): Measurements of Credit Losses for Accounts Receivable and Contract Assets ” (“ASU 2025-05”). The amendments in this update provide a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under FASB ASC 606. Under ASU 2025-05, an entity is required to disclose whether it has elected to use the practical expedient. ASU 2025-05 is effective for annual periods, including interim reporting periods within annual reporting periods, beginning after December 15, 2025 with early adoption permitted. The Company has chosen to Adopt this standard as of December 31, 2025. The adoption did not have an impact on its consolidated financial statements. In August 2020, the FASB issued ASU 2020-06, “ Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity ”. The new guidance is intended to simplify the accounting for certain convertible instruments with characteristics of both liability and equity. The guidance removes certain accounting models which separate the embedded conversion features from the host contract for convertible instruments. As a result, after the adoption of this guidance, an entity’s convertible debt instrument will be wholly accounted for as debt. The guidance also expands disclosure requirements for convertible instruments and simplifies areas of the guidance for diluted earnings-per-share calculations by requiring the use of the if-converted method. The guidance was effective for fiscal years beginning after December 15, 2021, and can be adopted on either a fully retrospective or modified retrospective basis. The Company adopted this standard effective December 31, 2025, using the fully retrospective approach. The adoption did not have an impact on its consolidated financial statements. F- 16 In March 2024, the FASB issued ASU 2024-01, “ Compensation - Stock Compensation (Topic 718): Scope application for profits interest and similar awards ” (“ASU 2024-01”). This update adds an illustrative example to demonstrate how an entity should apply the scope guidance to determine whether profits interest and similar awards (“profits interest awards”) should be accounted for in accordance with Topic 718. ASU 2024-01 is effective for fiscal years beginning after December 15, 2025 or the interim period in which the Company loses emerging growth company status. Early adoption is permitted. ASU 2024-01 should be applied retrospectively to all prior periods presented in the financial statements or prospectively. The Company has chosen to adopt this standard for the year ended December 31, 2025. The adoption did not have an impact on its consolidated financial statements. In November 2024, the FASB issued ASU 2024-04, “ Debt-Debt with Conversions and Other Options ”. ASU 2024-04 is intended to clarify requirements for determining whether certain settlements of convertible debt instruments, including convertible debt instruments with cash conversion features or convertible debt instruments that are not currently convertible, should be accounted for as an induced conversion. This ASU is effective for all entities for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company has chosen to adopt this standard for the year ended December 31, 2025. The adoption did not have an impact on its consolidated financial statements. Note 3. Related Party Transactions At December 31, 2025 and 2024 the Company had a payable due to an officer in the amount of $ 149,838 for contract work performed prior to becoming an officer. During September 2021, the Company’s former CEO and shareholder advanced $ 100,000 in cash to the Company for short term capital requirements. This amount is non-interest bearing and payable upon demand. As of December 31, 2025, all amounts owed have been remitted. The Company had a balance of $ 67,622 included in shareholder advance on the Company’s consolidated balance sheets as of December 31, 2024. Between January 18, 2024 and July 11, 2024, the Company’s CFO advanced an aggregate $ 128,479 in cash to the Company for short term capital requirements. As of December 31, 2024, all advanced amounts had been repaid. The above amounts and terms are not necessarily indicative of what third parties would agree to. Note 4. Intangible Assets The Company capitalizes costs associated with software developed for internal use, including payroll for employees directly involved in development and external consulting fees, once the project has reached the application development stage in accordance with ASC 350-40. Amortization is computed using the straight-line method over an estimated useful life of 3 – 5 years. During the year ended December 31, 2025, the Company capitalized $ 20,019 in costs related to new software development. The Company is still in the development phase and the asset has not yet been put into service. Therefore, no amortization of the asset has occurred as of the date of these consolidated financial statements. F- 17 Note 5. Goodwill On February 1, 2019, the Company’s shareholders exchanged all of its outstanding shares in exchange for 5,263,158 shares of Alliance common stock. Due to the Company’s shareholders acquiring a controlling interest in Alliance after acquisition, the transaction was treated as a reverse merger for accounting purposes, with SCWorx being the reporting company. The acquisition was accounted for under the acquisition method of accounting with an initial goodwill value of $ 8,366,467 . During the year ended December 31, 2023, the Company determined the fair value of its goodwill to be less than its carrying value and recognized impairment expense $ 2,524,034 . There were no changes to the carrying value of goodwill for the years ended December 31, 2025 and 2024. Note 6. Debt Receipt of CARES funding On May 5, 2020, the Company obtained a $ 293,972 unsecured loan payable through the Paycheck Protection Program (“PPP”), which was enacted as part of the Coronavirus Aid, Relief and Economic Security Act (the “CARES ACT”). The funds were received from Bank of America through a loan agreement pursuant to the CARES Act. The CARES Act was established in order to enable small businesses to pay employees during the economic slowdown caused by COVID-19 by providing forgivable loans to qualifying businesses for up to 2.5 times their average monthly payroll costs. The amount borrowed under the CARES Act and used for payroll costs, rent, mortgage interest, and utility costs during the 24 week period after the date of loan disbursement is eligible to be forgiven provided that (a) the Company uses the PPP Funds during the eight week period after receipt thereof, and (b) the PPP Funds are only used to cover payroll costs (including benefits), rent, mortgage interest, and utility costs. While the full loan amount may be forgiven, the amount of loan forgiveness will be reduced if, among other reasons, the Company does not maintain staffing or payroll levels or less than 60 % of the loan proceeds are used for payroll costs. Principal and interest payments on any unforgiven portion of the PPP Funds (the “PPP Loan”) will be deferred to the date the SBA remits the borrower’s loan forgiveness amount to the lender or, if the borrower does not apply for loan forgiveness, 10 months after the end of the borrower’s loan forgiveness period for nine months and will accrue interest at a fixed annual rate of 1.0 % and carry a two year maturity date. There is no prepayment penalty on the CARES Act Loan. In May 2022, the Company was granted an extension on the maturity date of this note until May 5, 2025 . The loan was partially forgiven in the amount of $ 139,569 in September 2022. As of December 31, 2025 and December 31, 2024, the remaining balance was $ 0 and $ 27,369 , respectively. Short Term Loans On April 12, 2024, the Company issued a secured promissory note in the face amount of $ 330,000 , in exchange for which it received cash in the amount of $ 300,000 . In addition to the original issue discount of $ 30,000 , the note bears interest at the rate of 5 % per annum, was originally due May 10, 2024 and subsequently extended until July 12, 2024 and is secured by all the Company assets. On July 15, 2024, the balance of the promissory note was rolled into a new convertible loan offering. Convertible Loans On July 15, 2024, the Company issued an aggregate $ 1,155,000 in convertible notes bearing interest at 10 % per annum. The notes mature on December 31, 2025 and are convertible into the Company’s common stock at a price of $ 1.43 per share, subject to certain adjustments, at the holder’s request. The noteholders and certain third parties were also granted detachable 5 year warrants to purchase an aggregate of 4,887,118 shares of the Company’s common stock at exercise prices ranging from $ 1.43 to $ 1.692 per share. The Company valued the warrants at $ 6,163,572 using the Black-Scholes pricing model. The Company has recorded the value of the warrants as a discount to the debt in the amount of $ 973,200 . The notes and warrants included in this offering contain beneficial ownership limitations as to each holder of 4.99 % as well as anti-dilution provisions. As of December 31, 2025, all principal amounts had been repaid. As of December 31, 2024, the full $ 1,155,000 in principal was outstanding and is included in convertible loans payable, net of discounts on the Company’s consolidated balance sheets. F- 18 On January 21, 2025, the Company issued an aggregate $ 1,500,000 in convertible notes bearing interest at 10 % per annum. The notes mature on January 21, 2027 and are convertible into the Company’s common stock at a price of $ 1.25 per share, subject to certain adjustments, at the holder’s request. The noteholders and certain third parties were also granted detachable 5 year warrants to purchase an aggregate of 7,256,364 shares of the Company’s common stock at exercise prices ranging from $ 1.25 to $ 1.65 per share. The Company valued the warrants at $ 11,422,792 using the Black-Scholes pricing model. The Company has recorded the value of the warrants as a discount to the debt in the amount of $ 1,385,000 . Additionally, the Company recorded debt issuance costs of $ 115,000 as a discount to the debt. The notes and warrants included in this offering contain beneficial ownership limitations as to each holder of 4.99 % as well as anti-dilution provisions. At December 31, 2025, $ 35,714 of the principal balances remain outstanding and are included on the Company’s consolidated balance sheets net of discounts at $ 1,539 . The Company has accrued interest for the above notes in the amount of $ 146,116 and $ 53,950 as of December 31, 2025 and 2024, respectively, which is included in accounts payable and accrued liabilities on the Company’s consolidated balance sheets. The Company recognized amortization expense on debt discounts of $ 2,601,165 and $ 49,660 during the years ended December 31, 2025 and 2024, respectively and is included in interest expense in the Company’s consolidated statements of operations. Note 7. Leases Operating Leases The Company’s principal executive office in Middleton Massachusetts is under a one year arrangement with a base rent of $ 990 per month running from November1, 2025 through October 31, 2026. The Company has operating leases for corporate, business and technician offices. Leases with a probable term of 12 months or less, including month-to-month agreements, are not recorded on the consolidated balance sheets, unless the arrangement includes an option to purchase the underlying asset, or an option to renew the arrangement, that the Company is reasonably certain to exercise (short-term leases). The Company recognizes lease expense for these leases on a straight-line basis over the lease term. As a practical expedient, the Company elected, for all office and facility leases, not to separate non-lease components (common-area maintenance costs) from lease components (fixed payments including rent) and instead to account for each separate lease component and its associated non-lease components as a single lease component. For the years ended December 31, 2025 and 2024, the components of lease expense were as follows: For the years ended December 31, 2025 2024 Operating lease cost $ 6,042 $ 4,080 Total lease cost $ 6,042 $ 4,080 As of December 31, 2025 and 2024, the Company has no additional operating leases, and no financing leases. Note 8. Commitments and Contingencies In conducting its business, the Company may become involved in legal proceedings. The Company 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. F- 19 Nasdaq minimum bid price deficiency notification As Previously Disclosed in the Company’s periodic report filed with the SEC on April 16, 2025, Nasdaq notified the Company that based upon the Company’s closing bid price for the last 30 consecutive business days (February 26, 2025 through April 9, 2025), the Company no longer meets the listed securities requirement to maintain a minimum bid price of $ 1 per share pursuant to Nasdaq Rules 5550(a)(2) and 5810(c)(3)(A). On October 8, 2025, the Company received written notification from the Listing Qualifications Department of Nasdaq, granting the Company’s request for a 180-day extension to regain compliance with the Bid Price Rule. The Company now has until April 6, 2026 to meet the requirement. Under the Nasdaq Rules, if at any time during this 180 day period the closing bid price of the Company’s securities is at least $ 1 for a minimum of ten consecutive business days, Nasdaq will provide written confirmation of compliance and the matter would be closed. In the event that the Company does not regain compliance during the initial 180 day period, the Company may still be eligible for additional time. To qualify, the Company would be required to meet the continued listing requirements for market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market, with the exception of the bid price requirement, and would need to provide written notice of its intention to cure the deficiency during the second compliance period, by effecting a reverse stock split, if necessary. If the Company meets these additional requirements, Nasdaq will inform the Company that it has been granted an additional 180 calendar days. However, if it appears to the Nasdaq staff that the Company will not be able to cure the deficiency, or if the Company is not otherwise eligible, Nasdaq would then provide notice that the Company’s securities will be subject to delisting. The Company is monitoring its Common Stock trading price. If compliance with the minimum bid price requirement is not regained within the extended 180-day period, the Company will implement a reverse stock split within the range previously approved by its shareholders. Loan Commitments Between July 15, 2024 and January 17, 2025, the Company issued an aggregate $ 2,655,000 in senior secured convertible notes. Under these notes, the Company has pledged all assets of the Company as collateral. See Note 6. Debt for further details. Note 9. Stockholders’ Equity Authorized Shares On December 8, 2025, the Company amended its certificate of incorporation to increase the aggregate number of shares issuable to 155,000,000 consisting of the following: i. 150,000,000 shares of Common Stock, $ 0.001 par value per share; and ii. 5,000,000 shares of Preferred Stock, $ 0.001 par value per share available for designation The Company currently has 150,000,000 common shares and has 900,000 Series A convertible preferred shares authorized designated with a par value of $ 0.001 per share. Common Stock Issuance of Shares for Legal Settlements On March 14, 2025, the Company issued 191,250 shares of common stock valued at $ 148,410 or $ 0.78 per share as partial fulfillment of its obligation under a previous legal settlement. On May 1, 2025, the Company issued 230,000 shares of common stock valued at $ 138,000 or $ 0.60 per share as partial fulfillment of its obligation under a previous legal settlement. F- 20 On May 21, 2025, the Company issued 180,000 shares of common stock valued at $ 75,600 or $ 0.42 per share as partial fulfillment of its obligation under a previous legal settlement. Issuance of Shares for Note Conversions Between February 3, 2025 and February 27, 2025, the Company issued an aggregate 54,980 shares of common stock for the conversion of an aggregate $ 40,000 in principal and $ 7,283 in interest due under the Company’s senior secured convertible notes. Between April 2, 2025 and June 17, 2025, the Company issued an aggregate 3,904,803 shares of common stock for the conversion of an aggregate $ 1,386,071 in principal and $ 162,768 in interest due under the Company’s senior secured convertible notes. Between July 28, 2025 and August 26, 2025, the Company issued an aggregate 3,278,331 shares of common stock for the conversion of an aggregate $ 1,100,214 in principal and $ 57,143 in interest due under the Company’s senior secured convertible notes. On October 6, 2025, the Company issued an aggregate 451,945 shares of common stock for the conversion of $ 93,000 in principal and $ 65,000 in accrued interest on the Company’s senior secured convertible notes. Issuance of Shares for Warrant Exercises On September 17, 2025, the Company issued an aggregate 1,954,816 shares of common stock for the exercise of warrants for which it received aggregate net proceeds of $ 702,166 . Due to certain ownership limitations, an aggregate 109,184 shares of common stock are held in abatement to be issued at a later time. The shares held in abatement were later issued on November 6, 2025. On November 6, 2025, the Company issued an aggregate 3,612,000 shares of common stock for the exercise of warrants for which it received aggregate net of $ 1,119,864 . Warrants issued in conjunction with inducement agreements On September 17, 2025, and in conjunction with the above warrant exercises, the Company entered into a series of inducement agreements whereby it issued warrants to purchase an aggregate 4,128,000 shares of the Company’s common stock at an exercise price of $ 0.31 per share. The Company has accounted for the inducement agreement transaction as a modification of the warrants exercised. The Company valued the 2,064,000 warrants exercised at $ 488,150 and the newly issued warrants at $ 1,053,427 using the Black-Scholes pricing model. The excess value related to the new warrants issued is $ 565,277 and is included in the Company’s consolidated statements of operations as warrant modification expense. Warrants issued in conjunction with loans payable On January 21, 2025, the Company issued warrants to purchase an aggregate 7,256,364 shares of the Company’s common stock at exercise prices ranging from $ 1.25 to $ 1.65 per share in conjunction with a convertible note issuance, see Note 6. Debt. The warrants were valued at $ 11,422,792 using the Black-Scholes pricing model. The Company has recognized $ 1,385,000 of this value as a discount to the associated notes. The Company has classified the warrants as having Level 2 inputs, and has used the Black-Scholes option-pricing model to value the warrants. F- 21 The fair values at the commitment date for the warrants detailed above were based upon the following management assumptions as of the date of issuance: Issuance date Risk-free interest rate 3.62 - 4.40 % Expected dividend yield - % Expected volatility 125 - 148 % Term 5 years Fair value of common stock $ 0.30 - 1.83 Stock Incentive Plan The number of shares of the Company’s common stock that are issuable pursuant to warrant and stock option grants with time-based vesting as of and for the year ended December 31, 2025 were: Warrant Grants Stock Option Grants Restricted Stock Units Number of shares subject to warrants Weighted- average exercise price per share Number of shares subject to options Weighted- average exercise price per share Number of shares subject to restricted stock units Balance at December 31, 2024 8,915,798 $ 0.92 - $ - 122,274 Granted 50,818,459 0.31 - - - Exercised ( 5,676,000 ) 0.31 - - - Cancelled/Expired ( 3,070 ) 60.00 - - - Balance at December 31, 2025 54,055,187 $ 0.32 - $ - 122,274 Exercisable at December 31, 2025 35,089,096 $ 0.33 - $ - 122,274 The number of shares of the Company’s common stock that are issuable pursuant to warrant and stock option grants with time-based vesting as of and for the year ended December 31, 2024 were: Warrant Grants Stock Option Grants Restricted Stock Units Number of shares subject to warrants Weighted- average exercise price per share Number of shares subject to options Weighted- average exercise price per share Number of shares subject to restricted stock units Balance at December 31, 2023 11,394 $ 58.72 3,333 $ 39.60 165,663 Granted 8,906,697 0.86 - - 151,290 Exercised - - - - ( 152,957 ) Cancelled/Expired ( 2,293 ) 53.64 ( 3,333 ) 39.60 ( 41,722 ) Balance at December 31, 2024 8,915,798 $ 0.92 - $ - 122,274 Exercisable at December 31, 2024 8,915,798 $ 0.92 - $ - 122,274 F- 22 The Company’s outstanding warrants at December 31, 2025 are as follows: Warrants Outstanding Warrants Exercisable Exercise Price Range Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price Intrinsic Value $0.31 - $60.00 54,055,187 3.79 $ 0.32 35,089,096 $ 0.32 - The Company’s outstanding warrants and options at December 31, 2024 are as follows: Warrants Outstanding Warrants Exercisable Exercise Price Range Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price Intrinsic Value $0.86 – $60.00 8,915,798 4.55 $ 0.92 8,915,798 $ 0.95 $ 7,400,859 As of December 31, 2025 and 2024, there was no unrecognized expense for unvested stock options and restricted stock awards. For the years ended December 31, 2025 2024 Stock-based compensation expense $ 61,203 $ - Stock-based compensation expense categorized by the equity components for the years ended December 31, 2025 and 2024 is as follows: For the years ended December 31, 2025 2024 Common stock $ 61,203 $ - Total $ 61,203 $ - Stock compensation is included on the consolidated statements of operations. Note 10. Net Loss Per Share Basic net loss per share is computed by dividing net loss for the period by the weighted average shares of common stock outstanding during each period. Diluted net loss per share is computed by dividing net loss for the period by the weighted average shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. The Company uses the treasury stock method to determine whether there is a dilutive effect of outstanding option grants. The following securities were excluded from the computation of diluted net loss per share for the periods presented because including them would have been anti-dilutive: For the years ended December 31, 2025 2024 Stock options - - Warrants 54,055,187 8,915,798 Restricted stock units 122,274 122,274 Total common stock equivalents 54,177,461 9,038,072 F- 23 Note 11. Income Taxes The significant items comprising the Company’s net deferred taxes as of December 31, 2025 and 2024 are as follows: As of December 31, 2025 2024 Net operating loss $ 9,493,537 $ 9,042,902 Stock options and compensation 2,426,677 2,440,539 Deferred revenue 274,366 318,610 Other 1,185,473 576,224 Valuation allowance ( 13,380,053 ) ( 12,378,275 ) Total deferred tax asset - - Basis difference fixed assets - - Total deferred tax liability - - Net deferred tax asset (liability) $ - $ - The components of the provision for (benefit from) income taxes consist of the following: As of December 31, 2025 2024 Current tax: Federal $ - $ - State - - Total $ - $ - Deferred tax: Federal $ ( 928,450 ) $ ( 233,463 ) State ( 73,328 ) ( 18,344 ) Less: change in valuation allowance 1,001,778 251,807 - - Total $ - $ - The provision for (benefit from) income taxes varies from the amount computed by applying the statutory rate for reasons summarized below: As of December 31, 2025 As of December 31, 2024 Net loss before tax per financial statements $ ( 4,444,109 ) $ ( 1,136,225 ) Statutory rate ( 933,263 ) 21.00 % ( 238,607 ) 21.00 % State tax rate ( 73,328 ) 1.65 % ( 18,748 ) 1.65 % Permanent items 4,813 ( 0.11 )% 5,548 0.49 % Rate change - 0.00 % - 0.00 % Change in valuation allowance 1,001,778 ( 22.54 )% 251,807 ( 22.16 )% $ - 0.00 % $ - 0.00 % F- 24 As of December 31, 2025 and 2024, the Company had federal net operating loss carryforwards of approximately $ 41.9 million and $ 38.8 million, respectively, available to offset future taxable income. As of December 31, 2025 and 2024, the Company had state loss carry-forwards of approximately $ 20.3 million and $ 19.3 million, respectively. Future utilization of net operating losses may be limited due to potential ownership changes under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”). The federal net operating loss carryforwards can be carried forward indefinitely and state loss carryforwards begin to expire in 2039. The valuation allowance as of December 31, 2025 and 2024 was $ 13,380,053 and $ 12,378,275 , respectively. The net change in valuation allowance for the years ended December 31, 2025 and 2024 was an increase of $ 1,001,778 and $ 251,807 , respectively. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on consideration of these items, management has determined that enough uncertainty exists relative to the realization of the deferred income tax asset balances to warrant the application of a full valuation allowance as of December 31, 2025 and 2024. As of December 31, 2025, the Company has not filed federal or state tax returns for the years beginning 2020 through 2025. The Company plans to work with external tax advisors to prepare and submit these returns. The company has evaluated the potential tax exposure and believes there to be no liability due to the Company’s sustained losses. However, the final tax liability could differ from the amounts currently recorded. The Company does not believe the outcome will have a material adverse effect on its overall financial position. The Company had no unrecognized tax benefits during 2025 or 2024. By statute, all tax years are open to examination by the major taxing jurisdictions to which the Company is subject. Note 12. Segment Reporting In November 2023, the FASB issued ASU 2023-07 Segment Reporting (Topic 280): “Improvements to Reportable Segment Disclosures to enhance the reportable segment disclosures” . The guidance requires additional disclosures about significant segment expenses. As noted above, the Company is a provider of data content and services related to the repair, normalization and interoperability of information for healthcare providers and big data analytics for the healthcare industry. The Company has determined that it currently operates in a single segment - health information technology solutions and services, located in a single geographic location – the United States. The accounting policies of the segment are the same as those described in the summary of significant accounting policies. Since the Company operates in a single segment, the measure of segment total assets and loss from operations is the same as that reported on the accompanying consolidated balance sheets as total assets, and the accompanying consolidated statements of operations as loss from operations, respectively. The Company’s Chief Executive Officer is the Chief Operating Decision Maker (“CODM”). The CODM manages the Company’s business activities as a single operating and reportable segment. The CODM uses consolidated profit and loss to evaluate and measure performance against progress in its commercialization efforts and clinical trials. The following table sets forth significant segment assets and expenses. December 31, December 31, 2025 2024 Assets: Cash $ 1,644,439 $ 106,654 Accounts receivable, net 313,350 372,716 Prepaid expenses and other assets 65,627 24,008 Fixed assets 10,220 - Intangible assets 20,019 - Goodwill 5,842,433 5,842,433 Total Assets $ 7,896,088 $ 6,345,811 F- 25 For the Years Ended December 31, 2025 2024 Revenue $ 2,877,629 $ 2,989,599 Cost of revenue 1,957,923 2,243,614 Gross profit 919,706 745,985 Operating expenses: Legal and professional 510,951 980,897 Salaries and wages 513,727 268,399 General and administrative 853,343 756,115 Depreciation 404 - Total operating expenses 1,878,425 2,005,411 Other income (expense) Interest expense ( 2,985,597 ) ( 104,201 ) Warrant modification expense ( 565,277 ) - Forgiveness of accounts payable 143,588 227,402 Loss on shares issued for legal settlement ( 78,104 ) - Total other income (expense) ( 3,485,390 ) 123,201 Net loss $ ( 4,444,109 ) $ ( 1,136,225 ) Note 13. Subsequent Events The Company has evaluated all events that occurred after the consolidated balance sheet date through the date when the consolidated financial statements were issued to determine if they must be reported. Management has determined that except as disclosed below, there were no additional reportable subsequent events to be disclosed. Issuance of Shares for Note Conversions On February 18, 2026, the Company issued an aggregate 122,589 shares of common stock for the conversion of $ 42,857 in principal and accrued interest on its convertible loans. Issuance of Shares for Warrant Exercises On February 12, 2026, the Company issued an aggregate 50,000 shares of common stock for the exercise of warrants for which it received aggregate net of $ 15,502 . F- 26 EXHIBIT INDEX Pursuant to the rules and regulations of the SEC, the Company has filed certain agreements as exhibits to this Annual Report on Form 10-K. These agreements may contain representations and warranties by the parties. These representations and warranties have been made solely for the benefit of the other party or parties to such agreements and (i) may have been qualified by disclosures made to such other party or parties, (ii) were made only as of the date of such agreements or such other date(s) as may be specified in such agreements and are subject to more recent developments, which may not be fully reflected in the Company’s public disclosure, (iii) may reflect the allocation of risk among the parties to such agreements and (iv) may apply materiality standards different from what may be viewed as material to investors. Accordingly, these representations and warranties may not describe the Company’s actual state of affairs at the date hereof and should not be relied upon. Exhibit Exhibit Description 3.1 Certificate of Incorporation, as amended December 8, 2025 (incorporated by reference to Exhibit 3.1 to the Company’s S-1 filed with the SEC on January 8, 2026) 3.3 Amended and Restated By-laws (Incorporated by reference to Exhibit 3.3 to the Company’s Registration Statement on Form S-1 (File No. 333-213166) filed with the SEC on August 16, 2016) 4.1 2025 Equity Incentive Plan (incorporated by reference to Exhibit 4.2 to the Company’s S-1 filed with the SEC on January 8, 2026) 4.2 Form of Series A, Series B and Series C Warrant (incorporated by reference to Exhibit 4.1 to the Company’s 8-K filed with the SEC on January 23, 2025) 10.1 Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Company’s 8-K filed with the SEC on January 23, 2025) 10.2 Form of Senior Secured Convertible Note (incorporated by reference to Exhibit 10.2 to the Company’s 8-K filed with the SEC on January 23, 2025) 10.3 Amendment and Consent, Dated November 18, 2024 (incorporated by reference to Exhibit 10.5 to the Company’s 8-K filed with the SEC January 23, 2025) 10.4 Form of Guaranty and Security Agreement (incorporated by reference to Exhibit 10.4 to the Company’s 8-K filed with the SEC on January 23, 2025) 31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* 31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* 32.1 Section 1350 Certification of the Chief Executive Officer* 32.2 Section 1350 Certification of the Chief Financial Officer* 97.1 Clawback Policy of SCWorx Corp (Incorporated by reference to Exhibit 97.1 of the Company’s 10-K filed with the SEC on March 31, 2025) 101.INS* Inline XBRL Instance Document. 101.SCH* Inline XBRL Taxonomy Extension Schema Document. 101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document. 101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document. 101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document. 101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document. 104* Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). * Filed herewith 43