SCWorx Corp. reported a decline in financial performance for the fiscal year ending December 31, 2024, with revenues totaling $2.99 million, a decrease of approximately 21% from $3.80 million in 2023. The company also recorded a net loss of $1.14 million, significantly improved from a net loss of $3.98 million in the previous year. This reduction in losses was attributed to decreased operating expenses, which fell to $2.01 million from $2.72 million in 2023, primarily due to lower non-cash stock compensation and reduced salaries.
The company experienced a notable decrease in revenue due to the expiration and non-renewal of certain customer contracts. Despite this, SCWorx managed to reduce its cost of revenues to $2.24 million from $2.54 million, reflecting a decrease in labor costs. The overall gross profit for 2024 decreased by approximately 41% compared to the prior year, indicating that the loss of contracts had a more significant impact than the cost reductions achieved.
In terms of strategic developments, SCWorx is actively pursuing growth through a securities purchase agreement that aims to raise $1.5 million in early 2025. The company plans to utilize these funds to expand its sales force and enhance its product offerings. However, SCWorx faces challenges, including a working capital deficit of $1.33 million and an accumulated deficit of $30.98 million, raising concerns about its ability to continue as a going concern.
Operationally, SCWorx reported a total of seven employees as of December 31, 2024, with a reliance on independent contractors for software maintenance and customer installations. The company’s client base remains concentrated, with a few customers accounting for a significant portion of its revenue. This concentration poses risks, as the loss of any major client could adversely affect financial performance.
Looking ahead, SCWorx's management expressed cautious optimism about the potential for revenue growth, contingent on successfully acquiring new customers and expanding existing contracts. However, the company acknowledges the inherent risks and uncertainties in achieving these goals, particularly in a competitive market characterized by rapid technological changes and economic fluctuations.
About SCWorx Corp.
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