SCWorx Reaches Agreement in Principle with SEC Staff to Resolve Previously Disclosed SEC Matter
SCWorx Corp (Nasdaq: WORX) announced a preliminary agreement to address an SEC investigation related to its April 2020 press release. Subject to SEC approval, the company will pay a civil penalty of $125,000 in four installments over one year. The settlement aims to resolve the SEC's enforcement action recommendation, which includes potential fines. SCWorx's CEO emphasizes the importance of focusing on future growth rather than past legal issues. The company continues to provide data management solutions for healthcare providers, ensuring operational efficiency and accurate reporting.
- Preliminary agreement to resolve SEC investigation demonstrates proactive management.
- Settlement amount of $125,000 is manageable and payable in installments, minimizing immediate financial impact.
- Focus on future growth and governance improvements may enhance investor confidence.
- Settlement is contingent on SEC approval, introducing uncertainty.
- Ongoing legal issues could distract from business operations and growth.
Agreement is Subject to Approval by the Securities and Exchange Commission
New York, NY, April 14, 2022 (GLOBE NEWSWIRE) -- SCWorx Corp (Nasdaq: WORX) today announced that the Company has reached an agreement in principle, subject to approval by the Securities and Exchange Commission (“SEC”), to resolve the SEC matter arising out of the Company’s April 13, 2020 press release and the events thereafter (first disclosed in the Company’s March 31, 2020 10-Q).
As disclosed in the SCWorx 10-K filed on March 31, 2022, the Company received a Wells Notice from the Staff of the SEC on December 8, 2021 (and an amended Wells Notice on December 10), in which the Staff made a preliminary determination to recommend that the SEC file an enforcement action against the Company and seek, among other things, an injunction, fines and disgorgement. Subject to approval by the SEC, the Company and the SEC Staff have agreed to resolve the matter through the Company’s payment of a civil monetary penalty of
In addition to final approval by the SEC, the settlement is subject to the negotiation and court approval of a consent judgment. The Company is hopeful that the agreement will be approved by the SEC, however, there is a possibility that the SEC Staff’s recommendation of this agreement may not be approved by the Commission or that the court may not approve the consent judgment. In the event the SEC does not approve the Staff’s recommendation, the Company will endeavor to resume settlement discussions with the SEC Staff. Upon final approval and subsequent entry of a consent judgment against the Company, the settlement will resolve the previously disclosed SEC investigation against the Company.
“Since I accepted the CEO role on June 1, 2021 it has been a top priority to resolve legal issues stemming from the April 13, 2020 press release. It is in the best interest of the Company and its shareholders and customers that all of our focus and funds be on our future growth and not prior legal issues or legal costs. In addition to adding a new CFO and three new Board members, the additional steps we have taken to improve governance should further strengthen our organization and internal controls. The SCWorx Officers and Directors look forward to putting this issue behind us and dedicating our full efforts towards growing our data management services for healthcare providers,” said Tim Hannibal, SCWorx Chief Executive Officer. Hannibal added, “The Company fully cooperated with the SEC's investigation and believes the settlement is in the best interest of the Company. SCWorx takes its regulatory obligations seriously, and the integrity of the Company, its management and Board of Directors is of paramount importance. SCWorx provides critical and high quality data and software solutions to hospitals and it is very important that these issues from 2020 are put behind us, as they do not in any way reflect on the quality of our product, integrity of our company or the hard work of our employees.”
About SCWorx Corp.
SCWorx has created an advanced attributed virtualized item data warehouse utilizing machine learning and artificial intelligence to offer a suite of software-as-a-service-based solutions for healthcare providers. The value proposition for customers revolves around the full integration of all solution modules with the company’s data platform for cost savings, operational efficiency and accurate benchmarking and reporting. The solution modules include Virtual Item Master, data cleanse and normalization, contract management and request for pricing (RFP) module, automated rebate management module, data interoperability (EMR, MMIS, finance) module, Automated Item Add Portal, Virtual General Ledger, and the data analytics module. SCWorx creates a single source for information for the healthcare provider’s data governance and analytics requirements.
Forward-Looking Statements
This press release contains “forward-looking statements” that involve substantial risks and uncertainties for purposes of the safe harbor provided by the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this press release regarding strategy, future operations, future contract renewals and terminations, future financial position, prospects, plans and objectives of management are forward-looking statements. You can identify many (but not all) such forward-looking statements by looking for words such as “assumes,” “approximates,” “believes,” “expects,” “anticipates,” “estimates,” “projects,” “seeks,” “intends,” “plans,” “could,” “would,” “may” or other similar expressions. You should not place undue reliance on these forward-looking statements. Such statements are based on management’s current expectations and involve risks and uncertainties. Actual results and performance could differ materially from those projected in the forward-looking statements as a result of many factors, including, without limitation, economic disruptions affecting our customers, unexpected contract terminations, securing future contracts and orders, future product sourcing, supply disruptions, containing costs, the ability to project future cash utilization and reserves needed for contingent future liabilities and business operations, the availability of sufficient resources of the company to meet its business objectives and operational requirements and other important factors that are detailed in filings with the Securities and Exchange Commission made from time to time by SCWorx, including its Annual Report on Form 10-K for the year ended December 31, 2020, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K. Matters described in forward-looking statements may also be affected by other known and unknown risks, trends, uncertainties and factors, many of which are beyond the company’s ability to control or predict. SCWorx undertakes no obligation to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
Contacts: ir@scworx.com
Source: SCWorx Corp.
Released April 14, 2022
FAQ
What is the SEC agreement with SCWorx Corp (WORX)?
What amount is SCWorx required to pay in the SEC settlement?
What does the SEC investigation involve for SCWorx Corp (WORX)?
How might the SEC settlement impact SCWorx Corp's stock performance?
