Item 8.01 Other Events.
Due to the impact of the COVID-19 coronavirus pandemic on the business, employees, consultants and service providers of Scworx, Corp., a Delaware corporation (the “Company”), the Company is unable to file its quarterly report on Form 10-Q for the quarter ended March 31, 2020 (the “Quarterly Report”) by the normally prescribed deadline of May 15, 2020. The Company plans to file its Quarterly Report by no later than June 29, 2020, 45 days after the original due date of its Quarterly Report, in reliance upon the exemption set forth in the Securities and Exchange Commission’s March 4, 2020 Order (Release No. 34-88318) (the “Order”), which under certain conditions exempts reporting companies form making certain filings required under the Securities and Exchange Act of 1934, as amended, for up to 45 after the normally prescribed deadline.
The Company’s operations and business have experienced disruption due to the unprecedented conditions surrounding the COVID-19 pandemic spreading throughout the United States and the world. The New York and New Jersey area, where the Company and its independent auditor are headquartered, is currently at one of the epicenters of the coronavirus outbreak in the United States. The Company has been following the recommendations of local health authorities to minimize exposure risk for its team members for the past several weeks, including the temporary closures of its offices and having team members work remotely, and, as a result, the Quarterly Report will not be completed by the filing deadline, due to insufficient time to facilitate the internal and external review process.
In addition, the Company’s customers (hospitals) have also experienced extraordinary disruptions to their businesses and supply chains, while experiencing unprecedented demand for health care services related to COVID-19. As a result of these extraordinary disruptions to our customers’ business, our customers are currently focused on meeting the nation’s health care needs in response to the COVID-19 pandemic. As a result, there is a continuing risk that our customers will not be able to focus resources on expanding the utilization of our services, which could adversely impact our future growth prospects, at least until the adverse effects of the pandemic subside. In addition, the financial impact of COVID-19 on our hospital customers may cause delayed payments due to us for services, which could negatively impact our cash flows. We are endeavoring to mitigate these risks and effects through the sale of personal protective equipment (“PPE”) and Covid-19 test kits to the health care industry and others, including many of our hospital customers. This is a new business for us and there is no assurance that we will be able to complete any sales of PPE/test kits or that any such sales will be sufficient to offset the negative effects of the COVID-19 pandemic on our business.
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