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Case Status:    SETTLED
On or around 06/29/2022 (Date of order of final judgment)

Filing Date: April 29, 2020

According to the Complaint, SCWorx Corp. provides data content and services related to the repair, normalization and interoperability of information for healthcare providers.

On April 13, 2020, before the market opened, 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 Company’s share price increased by $9.77, to close 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.” On this news, the Company’s share price fell $1.19, or more than 17%, over three consecutive trading sessions to close 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.

The Complaint alleges that 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 Complaint alleges 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 September 17, 2020, the Court issued an Order consolidating cases and appointing Lead Plaintiff and Counsel. All future docketing was ordered to be done in the lead case 20-CV-03349.

Lead Plaintiff filed a consolidated Complaint on October 19, 2020. Defendants filed a Motion to Dismiss the consolidated Complaint on November 18. On June 21, 2021, the Court issued an Order denying Defendants' Motion to Dismiss.

The parties entered into a Stipulation and Agreement of Settlement on February 11, 2022. On March 22, the Court granted preliminary approval of the Settlement. On June 29, the Court granted final approval of the Settlement, including an award of Attorneys’ Fees and Expenses, and entered Final Judgment.

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