SCWorx Corporation (WORX)

[cvinvestor]

8K filed:

On April 10, 2020, concurrently with its acceptance of the Purchase Order, the Company entered into a Supply Agreement (“Supply Agreement”) with ProMedical Equipment Pty Ltd. (“Supplier”) pursuant to which the Company agreed to purchase and the Supplier agreed to supply an aggregate of 52 million COVID-19 Rapid Testing Units over a six month period, comprised of 2 million units per week, at a per unit price of $13.00, commencing April 24, 2020. Pursuant to the Supply Agreement, the Company is required to pay 50% down at the time of order placement, with the remaining 50% due upon completion of order and prior to shipping.

2M units per week, 52M units total, being purchased at $13 and sold for $17.50 gives a $4.50/unit margin which seems like $234M initial profit margin for WORX less shipping and distribution costs over next 6 months.

Note: On recent conf call, the company explained that because the demand was so high from their client hospital and healthcare customers, they might not be able to ship all 2M units to per week initially to Rethink My Healthcare as they want to fill orders for first responders and others as well.

Don't know how vast the Rethink My Healthcare network is, but I assume it's large if they put in 2M units per week for potential 23 weeks.

With a 6 month potential outlook of 234M in extra revenue, what should this stock be trading at?

8K filing