SCWorx Corp. Subject of Class Action Lawsuit On Behalf of Purchasers or Acquirers of SCWorx Corp Stock Between April 13, 2010 and April 17, 2020
Kehoe Law Firm, P.C. is investigating securities claims on behalf individuals and entities who purchased, or otherwise acquired, shares of SCWorx Corp. (“SCWorx” or the “Company”) (NASDAQ: WORX) between April 13, 2020 and April 17, 2020, both dates inclusive.
On April 29, 2020, a class action lawsuit was filed in United States District Court, Southern District of New York, against SCWorx on behalf of persons and entities that purchased, or otherwise acquired, SCWorx securities between April 13, 2020 and April 17, 2020, both dates inclusive (the “Class Period”). The lawsuit is pursuing claims against the SCWorx Defendants under the Securities Exchange Act of 1934.
According to the complaint, 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, the SCWorx 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.
On April 13, 2020, pre-market, 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 share price of ScWorx increased by $9.77, closing 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.” Hindenburg Research alleged that the COVID-19 test supplier that SCWorx is buying from, Promedical, has a CEO “who formerly ran another business accused of defrauding its investors and customers” and “was also alleged to have falsified his medical credentials.” According to the report, Promedical claimed to the FDA and regulators in Australia to be offering COVID-19 test kits manufactured by Wondfo, but Wondfo “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 share price of SCWorx fell $1.19, or more than 17%, over three consecutive trading sessions, closing at $5.76 per share on April 21, 2020, on unusually heavy trading volume.
On April 22, 2020, the SEC halted trading of the Company’s stock.
SCWorx investors who purchased, or otherwise acquired, WORX securities during the Class Period April 13, 2020-April 17, 2020, both dates inclusive, and suffered losses are encouraged to contact either Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected], [email protected], or John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected], to discuss the class action lawsuit or potential legal claims.