SCWorx Corp. reported its financial results for the three months ended March 31, 2024, revealing a decline in revenue and ongoing challenges in achieving profitability. The company generated revenue of $812,099, a decrease of $185,350 from $997,449 in the same period of 2023. This decline was attributed to the expiration and non-renewal of certain customer contracts. Despite the drop in revenue, the cost of revenues also decreased to $603,465 from $689,462, primarily due to staffing reductions.
The company's gross profit for the quarter was $208,634, down from $307,987 in the prior year. Total operating expenses significantly decreased to $387,090 from $707,404, reflecting reductions in legal and professional fees, salaries, and stock-based compensation. As a result, SCWorx reported a loss from operations of $(178,456), an improvement from the $(399,417) loss recorded in the same quarter of 2023. The net loss before income taxes was $(178,659), compared to $(399,890) in the previous year, indicating a positive change of $221,231.
As of March 31, 2024, SCWorx's total assets increased to $6,343,246 from $6,278,215 at the end of 2023, while total stockholders' equity decreased to $3,704,275 from $3,853,449. Current liabilities related to deferred revenue rose to $410,333 from $378,583, reflecting ongoing obligations to customers.
Cash reserves saw a significant decline, with cash at the end of the quarter reported at $39,601, down from $91,436 at the end of 2023. The company experienced net cash used in operating activities of $(59,482), contrasting with cash provided of $19,346 in the same period last year. The net decrease in cash for the quarter was $(51,835), compared to a slight increase of $256 in the prior year.
Strategically, SCWorx has faced challenges, including the termination of a merger agreement with American Energy Partners, Inc. on March 26, 2024. The company is currently evaluating alternatives to reduce operating expenses and secure additional financing, as management has raised substantial doubt about its ability to continue as a going concern due to insufficient capital resources and historical operating losses. The company has not yet achieved profitability and continues to incur cash outflows from operations.
About SCWorx Corp.
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