SCWorx Announces Final Approval of Previously Disclosed Securities Class Action and Derivative Action Lawsuits
July 06 2022 - 12:22PM
SCWorx Corp. (Nasdaq: WORX) today announced that it has received
final court approval to settle both the securities class action and
derivative action lawsuits which were commenced in 2020.
The class action was consolidated under the
caption Yannes v. SCWorx Corp. (1:20-cv-03349). The
settlement resolves all claims asserted against SCWorx and the
other named defendant without any admission of liability or
wrongdoing by the Company or any defendant. Under the terms of the
class action agreement, (i) the insurers for the Company and Marc
Schessel (former CEO) will make a cash payment to the class
plaintiffs and (ii) the Company will issue $600,000 worth
of common stock to the class Plaintiffs, in exchange for which all
parties will be released from all claims related to the securities
class action litigation.
In addition, the Company and the Director
Defendants (Marc Schessel, Steven Wallitt, Charles Miller and
Robert Christie) entered into a settlement with the shareholder
derivative plaintiffs to settle the derivative litigation in which
SCWorx was a nominal defendant. Under the terms of this agreement,
(i) the insurers for the Director Defendants will make a cash
payment to legal counsel for the shareholder derivative Plaintiffs
to cover their legal fees and (ii) the Company will adopt certain
corporate governance reforms, including adopting resolutions to
address corporate transparency, further enhancing board
independence, further enhancement of the CFO position, amendment of
the audit committee charters, revisions to nominating committee and
compensation committee charter and other similar enhancements, and
addressing company policies, within 60 days of court approval of
the settlement. In exchange for which all parties will be released
from all claims related to the derivative class action litigation.
Some of these enhancements have already been achieved.
“This settlement represents the progress we have
made as a company,” said SCWorx President and Chief Executive
Officer Tim Hannibal. “With the support of our Board and the
dedicated employees of SCWorx , the Company put another issue from
the past behind us.”
"Over the past two years, SCWorx has
successfully negotiated a number of significant legal obstacles
resulting from a press release in April 2020," said Hannibal. "The
final court approval of the class and derivative settlements --
together with our final agreement with the Securities and Exchange
Commission in 2022 -- will put the legal issues relating to press
release behind us and allow us to move forward. We look forward to
continuing to deliver our SaaS service offerings to help hospitals
solve the challenges they experience within their supply
chain.”
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, 2021, 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
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Source: SCWorx Corp.
Released July 6, 2022
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