By Stephen Nakrosis


SCWorx Corp. said Wednesday it has received final court approval to settle a securities class action and derivative action lawsuits, both of which were commenced in 2020.

The class action 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," SCWorx said.

Under the terms of the class action agreement deal, insurers for SCWorx and former Chief Executive Marc Schessel will make a payment to class plaintiffs and SCWorx will issue $600,000 of common stock to class plaintiffs, the company said.

The agreement to settle the derivative action lawsuit will see the company adopt corporate governance reforms, SCWorx said, adding an insurer for the director defendants will make a cash payment to legal counsel for the plaintiffs to cover legal fees.

In May, the U.S. Securities and Exchange Commission said it charged SCWorx Corp. and its former CEO and Chairman Marc S. Schessel "with making false and misleading statements about SCWorx's plans to distribute Covid-19 rapid test kits in April 2020." The SEC said SCWorx agreed to settle the charges and pay a $125,000 civil penalty. Last month, SCWorx said it received final court approval to settle the SEC matter.

Tim Hannibal, the company's president and chief executive, said "over the past two years, SCWorx has successfully negotiated a number of significant legal obstacles resulting from a press release in April 2020." He added "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."

At 12:05 p.m. ET, the company's stock climbed 24.21% to 77 cents per share. Volume topped 27.2 million shares, above the stock's 65-day average volume of 216,263.


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(END) Dow Jones Newswires

July 06, 2022 13:14 ET (17:14 GMT)

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