Company name SCWorx Corp.
Stock symbol WORX
Status Class Action Complaint Filed

NEW YORK, May 20, 2020–Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, announces that a class action lawsuit has been filed in the United States District Court for the Southern District of New York on behalf of investors that purchased SCWorx Corp. (NASDAQ: WORX) securities between April 13, 2020 and April 17, 2020 (the “Class Period”). Investors have until June 29, 2020 to apply to the Court to be appointed as lead plaintiff in the lawsuit.

On April 13, 2020, SCWorx announced that it had received a committed purchase order of two million COVID-19 rapid testing kits, “with provision for additional weekly orders of 2 million units for 23 weeks, valued at $35M per week.”

On this news, the Company’s share price increased by $9.77, to close at $12.02 per share on April 13, 2020.

On April 17, 2020, Hindenburg Research issued a report doubting the validity of the deal, calling it “completely bogus.” According to Hindenburg Research, the Covid-19 test supplier that SCWorx is buying from, Promedical, has a Chief Executive Officer “who formerly ran another business accused of defrauding its investors and customers” and “was also alleged to have falsified his medical credentials,” Promedical claimed to the FDA and regulators in Australia to be offering COVID-19 test kits manufactured by Wondfo, but “Wondfo put out a press release days ago stating that Promedical ‘fraudulently mispresented themselves’ as sellers of its Covid-19 tests and disavowed any relationship,” and the buyer that SCWorx claimed to have lined up does not appear to be “capable of handling hundreds of millions of dollars in orders.”

On this news, the Company’s share price fell $1.19, or more than 17%, over three consecutive trading sessions to close at $5.76 per share on April 21, 2020.

On April 22, 2020, the SEC halted trading of the Company’s stock. As of the filing of the complaint, trading remains halted.

The complaint, filed on April 29, 2020, alleges that throughout the Class Period defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, defendants failed to disclose to investors: (1) that SCWorx’s supplier for COVID-19 tests had previously misrepresented its operations; (2) that SCWorx’s buyer was a small company that was unlikely to adequately support the purported volume of orders for COVID-19 tests; (3) that, as a result, the Company’s purchase order for COVID-19 tests had been overstated or entirely fabricated; and (4) that, as a result of the foregoing, defendants’ positive statements about the Company’s business, operations, and prospects, were materially misleading and/or lacked a reasonable basis.

If you purchased SCWorx shares during the Class Period and suffered a loss, are a long-term stockholder, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Melissa Fortunato or Marion Passmore by email at investigations@bespc.com, telephone at (212) 355-4648, or by filling out the contact form below. There is no cost or obligation to you.

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The submission of this form does not create an attorney-client relationship, nor any obligation on the part of Bragar Eagel & Squire, P.C., or you to file a legal action. Any information you submit will be maintained as confidential. If Bragar Eagel & Squire, P.C., in its sole discretion, believes that you might be an appropriate class representative, Bragar Eagel & Squire, P.C., will contact you to discuss the matter and to determine whether to establish an attorney client relationship.