UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

 Washington, DC 20549

 FORM 10-K

 ANNUAL REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the fiscal year ended December 31, 2024

 OR

 TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 Commission File Number: 001-37899

 SCWORX CORP.

 (Exact Name of Registrant as Specified in Its
Charter)

 Delaware

 47-5412331

 (State or Other Jurisdiction of

Incorporation or Organization)

 (I.R.S. Employer

Identification No.)

 100 S Ashley Dr, Suite 100

 Tampa, FL 33602

 (212) 739-7825

 (Address, including zip code, and telephone
number, including area code, of registrant's principal executive offices)

 Securities registered pursuant to Section 12(b)
of the Act:

 Title of each class

 Name of each exchange on which registered

 Common stock, par value $0.001 per share

 The Nasdaq Capital Market

 Securities registered pursuant to Section 12(g)
of the Act: None

 Indicate by check mark if the registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

 Indicate by check mark if the registrant is not
required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No

(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes No

has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes
 No

is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.
See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company,"
and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 Large accelerated filer

 Accelerated filer

 Non-accelerated filer

 Smaller reporting company

 Emerging growth company

 If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.

has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report.

 If securities are registered pursuant to Section
12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction
of an error to previously issued financial statements.

 Indicate by check mark whether any of those error
corrections are restatements that required a recovery analysis of incentive-based-compensation received by any of the registrant's
executive officers during the relevant recovery period pursuant to § 240.10D-1(b).

is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act). Yes No

 As of June 30, 2024, the aggregate market value
of the registrant's Common Stock held by non-affiliates of the registrant was approximately $ 2.3 million, based on the last reported
trading price of the Common Stock on that date, as reported on the Nasdaq Capital Market.

 The number of shares outstanding of the registrant's
common stock as of March 31, 2025 was 2,105,755.

 SCWORX CORP.

 ANNUAL

 REPORT ON FORM 10-K

 FOR THE YEAR ENDED DECEMBER 31, 2024

 Page no

 Item 1.

 Business

 Item 1A.

 Risk Factors

 Item 1B.

 Unresolved Staff Comments

 Item 2.

 Properties

 Item 3.

 Legal Proceedings

 Item 4.

 Mine Safety Disclosures

 Item 5.

 Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item 6.

 [Reserved]

 Item 7.

 Management's Discussion and Analysis of Financial Condition and Results of Operations

 Item 7A.

 Quantitative and Qualitative Disclosures About Market Risk

 Item 8.

 Financial Statements and Supplementary Data

 Item 9.

 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 Item 9A.

 Controls and Procedures

 Item 9B.

 Other Information

 Item 9C.

 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

 Item 10.

 Directors, Executive Officers and Corporate Governance

 Item 11.

 Executive Compensation

 Item 12.

 Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters

 Item 13.

 Certain Relationships and Related Transactions, and Director Independence

 Item 14.

 Principal Accountant Fees and Services

 Item 15.

 Exhibits and Financial Statement Schedules

 Signatures

 Index to Consolidated Financial Statements

 Index to Exhibits

 i

 Cautionary Statement Regarding Forward-Looking
Statements

 Certain statements that
we make from time to time, including statements contained in this Annual Report on Form 10-K constitute "forward-looking statements"
within the meaning Private Securities Litigation Reform Act of 1995, and of Section 27A of the Securities Act of 1933, as amended, or
the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than
statements of historical fact contained in this Annual Report on Form 10-K are forward-looking statements. These statements, among other
things, relate to our business strategy, goals and expectations concerning our services, future operations, prospects, plans and objectives
of management. The words "anticipate", "believe", "continue", "could", "estimate",
"expect", "intend", "may", "plan", "predict", "project", "will",
and similar terms and phrases are used to identify forward-looking statements in this presentation.

 Our operations involve risks
and uncertainties, many of which are outside our control, and any one of which, or a combination of which, could materially affect our
results of operations and whether the forward-looking statements ultimately prove to be correct. We have based these forward-looking statements
largely on our current expectations and projections about future events and trends that we believe may affect our financial condition,
results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. Forward-looking
statements in this Annual Report on Form 10-K include, without limitation, statements reflecting management's expectations for future
financial performance and operating expenditures (including our ability to continue as a going concern, to raise additional capital and
to succeed in our future operations), expected growth, profitability and business outlook, and operating expenses.

 Forward-looking statements
are only current predictions and are subject to known and unknown risks, uncertainties, and other factors that may cause our actual results,
levels of activity, performance, or achievements to be materially different from those anticipated by such statements. These factors include,
among other things, the unknown risks and uncertainties that we believe could cause actual results to differ from these forward looking
statements as set forth under the heading, "Risk Factors" and elsewhere in this Annual Report on Form 10-K. New risks and
uncertainties emerge from time to time, and it is not possible for us to predict all of the risks and uncertainties that could have an
impact on the forward-looking statements, including without limitation, risks and uncertainties relating to our ability to:

 reverse the recent decline in our revenue and resume growing our revenue;

 resolve the various litigation proceedings and investigations pending against us on favorable terms or at all;

 obtain additional financing in sufficient amounts or on acceptable terms so that we can fund our business plan;

 reduce our dependence on third-party subcontractors to perform some of the work on our contracts;

 mitigate the impact of new or changed laws, regulations or other industry standards that could adversely affect our ability to conduct our business;

 adopt and master new technologies and adjust certain fixed costs and expenses to adapt to our industry's and customers' evolving demands; and

 mitigate the impact of changes in general market, economic and political conditions in the United States and global economies or financial markets, including those resulting from natural or man-made disasters.

 Although we believe that
the expectations reflected in the forward-looking statements contained in this Annual Report on Form 10-K are reasonable, we cannot guarantee
future results, levels of activity, performance, or achievements. In light of inherent risks, uncertainties and assumptions, the future
events and trends discussed in this Annual Report on Form 10-K may not occur and actual results could differ materially and adversely
from those anticipated or implied in the forward-looking statements. Except as required by law, we are under no duty to update or revise
any of such forward-looking statements, whether as a result of new information, future events, or otherwise, after the date of this Annual
Report on Form 10-K.

 You should read this Annual
Report on Form 10-K with the understanding that our actual future results, levels of activity, performance and events and circumstances
may be materially different from what we expect.

 All references to "SCWorx,"
"we," "us," "our" or the "Company" mean SCWorx Corp., a Delaware corporation, and where
appropriate, its wholly owned subsidiaries.

 ii

 Item 1. Business

 Corporate Information

 SCWorx, LLC (n/k/a SCW FL
Corp.) ("SCW LLC") was a privately held limited liability company which was organized in Florida on November 17, 2016. On
December 31, 2017, SCW LLC acquired Primrose Solutions, LLC ("Primrose"), a Delaware limited liability company, which became
its wholly-owned subsidiary and focused on developing functionality for the software now used and sold by SCWorx Corp. (the "Company"
or "SCWorx"). The majority interest holders of Primrose were interest holders of SCW LLC and based upon Staff Accounting Bulletin
Topic 5G, the technology acquired has been accounted for at predecessor cost of $0. To facilitate the planned acquisition by Alliance
MMA, Inc., a Delaware corporation ("Alliance"), on June 27, 2018, SCW LLC merged with and into a newly-formed entity, SCWorx
Acquisition Corp., a Delaware corporation ("SCW Acquisition"), with SCW Acquisition being the surviving entity. Subsequently,
on August 17, 2018, SCW Acquisition changed its name to SCWorx Corp. In June 2018, the Company began to collect subscriptions for common
stock. From June to November 2018, the Company collected $1,250,000 in subscriptions and issued 3,125 shares of common stock to new third-party
investors. On November 30, 2018, the Company and certain of its stockholders agreed to cancel 6,510 shares of common stock. In addition,
on February 1, 2019, (i) SCWorx Corp. (f/k/a SCWorx Acquisition Corp.) changed its name to SCW FL Corp. (to allow Alliance to change its
name to SCWorx Corp.) and (ii) Alliance acquired SCWorx Corp. (n/k/a SCW FL Corp.) in a stock-for-stock exchange transaction and changed
Alliance's name to SCWorx Corp., which is the Company's current name, with SCW FL Corp. becoming the Company's subsidiary.

 We are a Delaware corporation.
Our principal executive offices are located at 100 S Ashley Dr, Suite 100 Tampa, FL 33602. Our phone number is (844) 472-9679 and our
website can be found at www.scworx.com.

 In this Annual Report, the
terms "SCWorx", "Alliance," "Alliance MMA," the "Company," "we," "us"
and "our" refer to SCWorx, Corp. (f/k/a Alliance MMA, Inc.). Unless specified otherwise, the historical financial results
in this Annual Report are those of SCWorx and its subsidiaries on a consolidated basis.

 Our Business

 SCWorx is a provider of data
content and services related to the repair, normalization and interoperability of information for healthcare providers, as well as big
data analytics for the healthcare industry.

 SCWorx has developed and markets
health care information technology solutions and associated services that improve healthcare processes and information flow within hospitals
and other healthcare facilities. SCWorx's software enables a healthcare provider to simplify and organize its data ("data
normalization"), allows the data to be utilized across multiple internal software applications ("interoperability")
and provides the basis for sophisticated data analytics ("big data"). Customers use our software to achieve multiple operational
benefits, such as supply chain cost reductions, decreased accounts receivables aging, accelerated and completed patient billing in less
than 72 hours, contract optimization, increased supply chain management and total cost visibility via dynamic AI connections that automatically
structures, repairs, synchronizes and maintains purchasing ("MMIS"), Clinical ("EMR") and finance ("CDM")
systems. SCWorx's customers include some of the most prestigious healthcare organizations in the United States. SCWorx offers an
advanced software solution for the management of health care providers' foundational business applications, empowering its customers
to significantly reduce costs, drive better clinical outcomes and enhance their revenue. SCWorx supports the interrelationship between
the three core healthcare provider systems: Supply Chain, Financial and Clinical. This solution integrates common keys within distinct
and variable databases that allows the repaired foundational data to move seamlessly from one application to another enabling our customers
to drive supply chain cost reductions, optimize contracts, increase supply chain management ("SCM"), cost visibility, control
rebates and contract administration fees.

 Currently, the business systems
of hospitals are frequently deficient and often unconnected from each other. These deficiencies in part result from the vast amount of
unstructured, manually created and managed data that proliferates within the hospital's supply chain, clinical and billing systems.
SCWorx's solutions are designed to improve the flow of information quickly and accurately between the buy-side (supply chain purchasing
systems), the consumption-side (clinical documentation systems like the electronic medical records ("EMR")) and billing and
collection systems (patient billing systems). The currently poor state of interoperability limits the potential value of each independent
system and requires significant expense and extensive human resource commitments from senior personnel to stay ahead of problems and complete
basic administrative tasks. SCWorx provides an information service that ultimately leads to safer, more cost effective and financially
efficient patient care.

 SCWorx has demonstrated that
in order for the core hospital systems to function properly there must be a Single Source of Truth ("SSOT") for all products
utilized and ultimately billed for. The Item Master File ("IMF"), which is a database of all known products used in hospital
and health care settings, must be accurate at all times and expanded upon to hold both clinical and financial attributes. An accurate
and expanded Item Master File supports interoperability between the supply chain, clinical and financial systems by delivering, on demand,
reports detailing the purchasing, utilization and revenue associated with each and every item used, allowing hospitals to better manage
their business. The Single Source of Truth establishes a common vernacular and syntax, while assigning a consistent meaning across the
healthcare provider's core systems and accurately migrating data from one application to another and removing disconnects between
critical business systems.

 SCWorx's Software Solutions/Services

 SCWorx empowers healthcare
providers to maintain comprehensive access and visibility to an advanced business intelligence that enables better decision-making and
reductions in product costs and utilization, ultimately leading to accelerated and accurate patient billing. SCWorx's software modules
perform separate functions as follows:

 Virtualized Item Master File repair, expansion and automation — The process begins with data normalization — data is put into a simplified and normalized structure and location for use throughout the enterprise. The SCWorx software normalizes, automates and builds interoperability via advanced attribution, vendor and contract mapping, product categorization, repairing the unit of measure and establishing revenue codes and flags. SCWorx improves the healthcare providers' business processes through the establishment of a clean and normalized Item Master File that improves efficiencies, eliminates cumbersome and error-prone manual processes, and provides an integrated cloud-based suite of services that enhances the productivity of operating room staff, supply chain margins and billing revenue through the seamless sharing and accuracy of critical business data.

 Electronic Medical Record Management — The Electronic Medical Record (EMR) module integrates the advanced data attributes created by SCWorx in the Item Master into the EMR. The EMR serves as the database that hospitals use to document all clinical procedures in terms of the products used and the costs that should be charged. What makes this module special is that prior to its creation there was no mechanism that tied product purchases to actual utilization. Hospitals, being mass consumption businesses, had no way to identify excess ordering that always accompanies mass consumption organizations. In addition, the automation and consistency of delivered attributes dramatically reduces the administrative burden as today these additional attributes are being created by expensive clinical resources manually — over and over again by each hospital. The SCWorx EMR management system creates one vernacular for each hospital so they see the data in a manner that suits them — and then creates a universal vernacular so they can see their performance against other like institutions.

 Charge Description Master Management — The Charge Description Master (CDM) Management module assists healthcare providers by integrating the CDM data into the workflow of the hospitals purchasing systems so that the latest costs can be automatically updated against the hospitals charging systems. The CDM data provided by SCWorx is made more accurate, and the resulting data is integrated to the Item Master for real-time delivery to the EMR — this data is the last remaining piece of information that is consumed by the EMR and passed ultimately to the patient billing systems. SCWorx provides real-time integration, automation and management of Item Master File, Clinical Information Systems and the Charge Description Master.

 Contract Management — SCWorx's Contract Management Module assists healthcare providers to establish an efficient contract management system and to provide first class care to patients, while reducing operating costs, assuring adherence to compliance requirements, and mitigating risk. By linking the Item Master File to the healthcare providers contract management system and procedures, SCWorx simplifies the way contracts are managed from start to finish by streamlining the processes of creating, routing, reviewing and approving contracts. SCWorx delivers a data warehouse platform which integrates item master management, spend analysis, and contract management. These solutions enable financial staff across the healthcare provider to drill down quickly and deeply into actionable and real-time financial data and key performance indicators to improve revenue realization and staff efficiency. This suite of solutions includes the ability to automatically push price changes to a contract, compliance for standard and non-standard products, contract compliance and optimization reporting, reliable cost data for current and alternate products, cost performance metrics, matching purchase order price to contract and contract repository.

 Request for Proposal ("RFP") Automation — With the reality of shrinking operating margins, increasing operating expenses and decreasing insurance reimbursements, hospitals must evaluate all major expenditures. In addition, requirements for provable quality of service supported by trackable metrics now frequently necessitate the search for better options available in the marketplace. Since hospital-based provider subsidies are often a major expense item and since there are often perceived opportunities for quality improvement, it is a reasonable practice for hospital leadership to carefully evaluate all of their current hospital-based services and associated financial support before each contract renegotiation. The proliferation of large regional and national providers, with their ability to derive benefits from economies of scale, have made RFPs much more of a competitive process. Hospital administrators, however, often rely on poor or conflicting data when creating an RFP. Through the integration and utilization of the SSOT SCWorx automates the RFP process and makes it more accurate. SCWorx automates the core sourcing processes with the intention to accelerate cycle times, surveys and confirms business preferred processes, designs and builds a flow chart for the current and desired workflows, cross references bid analysis, implements bid scoring, customizes software to support automation and customizes the report writer and output documents.

 Integration of Acquired Businesses — The agnostic design of the SCWorx solution enables rapid deployment of a virtual Item Master File to quickly and easily allow combining healthcare providers to share information and achieve cost synergies and interoperability without large and cumbersome upgrades or implementations. During the consolidation of healthcare providers, SCWorx cleans the data and makes the data available to the disparate systems. In addition, M&A activity requires in-depth reporting for comparison of Group Purchasing Organization ("GPO") contract overlap. When healthcare providers that use different GPOs merge, or are acquired, there is a lack of information to compare contracts. SCWorx provides information for comparative purposes to solve these issues rapidly.

 Rebate Management — Frequently, vendors use rebates and incentives as a key part of their pricing strategy and structure when selling to hospitals. This tactic makes pricing more attractive to healthcare providers. When tracked through Accounts Payable, and issued correctly, rebates can help healthcare organizations save money. At any large healthcare provider, vendor rebates can be difficult to manage since they require a multi-step process to track dollars earned, credits issued, and monies paid. Rebates frequently cause tracking challenges for Accounts Payable departments. Inconsistent tracking is the primary problem for loss of savings with vendor rebate programs. SCWorx's Rebate Management Module enables healthcare providers to correctly calculate and track rebates provided by healthcare provider vendors. Purchasing or Contracting departments monitor rebates by creating and maintaining a Rebates Master List which is provided to the Accounts Payable department. To assist in this cumbersome process, SCWorx provides information from the SSOT, such as historical data, frequent updates, advanced administrative fee reporting, purchase rebate tracking, early payment/discount management and Vendor Master Data alignment.

 Big Data Analytics Model — SCWorx provides an in-depth, easy-to-use web portal for display, reporting and analysis of the information contained within the SCWorx data warehouse. SCWorx's analytics solution enables healthcare providers to view benchmarking information, quickly add new items to the SSOT and identify cost savings through this real-time and on-demand solution. In addition to simplifying the item add process, SCWorx provides peer comparison reporting against similar healthcare providers and a list of informative reports for business measurement, such as spend trend analysis, contract gap analysis, market price comparison, etc. The SCWorx product line is a simplified user experience and visual display for the hospital employee which does not require access to the SCWorx application.

 Data Integration and Warehousing — Healthcare providers maintain a significant amount of data. In many cases the data is not useful for analytics since the data is held within an individual "silo." SCWorx establishes an expandable, data warehouse of items that have been normalized, repaired and enriched as the SSOT for useful benchmarking, interoperability and analytics. SCWorx's data warehouse allows healthcare providers to effectively use the data contained in their environment and efficiently establish the supply chain as a leading driver of revenue cycle management. The data warehouse is updated as frequently as every five minutes without intervention.

 SCWorx continues to provide
transformational data-driven solutions to some of the finest, most well-respected healthcare providers in the United States. Clients are
geographically dispersed throughout the country. The Company's focus is to assist healthcare providers with issues they have pertaining
to data interoperability. SCWorx provides these solutions through a combination of direct sales and relationships with strategic partners.

 SCWorx's software solutions
are delivered to clients within a fixed term period, typically a three-to-five-year contracted term, where such software is hosted in
SCWorx data centers (Amazon Web Service's "AWS" or RackSpace) and accessed by the client through a secure connection
in a software as a service ("SaaS") delivery method.

 SCWorx currently sells its
solutions and services in the United States to hospitals and health systems through its direct sales force and its distribution and reseller
partnerships.

 Clients and Strategic Partners

 SCWorx continues to provide
transformational data-driven solutions to some of the finest, most well-respected healthcare providers in the United States. Clients are
geographically dispersed throughout the country and the continued focus is to assist healthcare providers with issues they have pertaining
to data interoperability. SCWorx provides these solutions through a combination of direct sales and relationships with strategic partners.

 Competition

 SCWorx competes against a variety
of vendors and smaller companies which provide solutions in the specific markets we address. Our principal competitors include:

 purchasing departments that have limited budgets and may be attempting to manually repair the item master file;

 large companies with a long list of products and services and small companies which may provide item master normalization and data cleanse services; and

 software companies or service providers, as well as small, specialized vendors, that provide complementary or competitive solutions in benchmarking or data analytics and data warehousing that may compete with our offerings.

 Some of our actual and perceived
competitors have advantages over us, such as longer operating histories, greater financial, technical, marketing or other resources, stronger
brand and business user recognition, larger intellectual property portfolios, broader distribution and presence, and competitive pricing.
In addition, our industry is evolving rapidly and is becoming increasingly competitive.

 Barriers to entry to the data
management market include technological and application sophistication, the ability to offer a proven product, creating and utilizing
a well-established client base and distribution channels, brand recognition, the ability to provide agnostic interoperability and to operate
on a variety of MMIS, EMR and financial platforms, the ability to integrate with pre-existing systems and capital for sustained development
and marketing activities.

 SCWorx believes that these
obstacles taken together represent a moderate to high-level barrier to entry on the data management side of our business. The principal
competitive factors in our markets are product features, functionality and support, product depth and breadth (number of items in the
central data warehouse), flexibility, ease of deployment and use, total cost of ownership and time to value. We believe that we generally
compete favorably on the basis of these factors. For example, besides our agnostic interoperability, additional key strengths include
the SCWorx data warehouse, which exceeds 12 million items, SCWorx Big Data analytics and benchmarking.

 Contracts, License and Service Fees

 SCWorx enters into agreements
with its clients that specify the scope of the solution to be installed and/or services to be provided by SCWorx, as well as the agreed-upon
aggregate price, applicable duration and the timetable for the associated licenses and services.

 For clients purchasing software
to be installed locally or provided on a SaaS model, these are multi-element arrangements that include a term license granting the right
to access the applicable software functionality (whether installed locally at the client site or the right to use our company's
solutions as a part of SaaS services), terms regarding maintenance and support services, terms for any third-party components such as
infrastructure and software, and professional services for implementation, integration, process engineering, optimization and training,
as well as fees and payment terms for each of the foregoing. If the client purchases solutions on a long-term license model, the client
may be billed the license fee up front or on a monthly or quarterly basis. Maintenance and support are provided on a term basis for separate
fees, with an initial term of typically three to five years. The license, maintenance and support fees are charged annually in advance,
commencing either upon contract execution or deployment of the solution in live production. If the client purchases solutions on a term-based
model, the client is billed periodically a combined access fee for a specified term, typically three to five years in length.

 SCWorx also generally provides
software and SaaS client's professional services for implementation, integration, process engineering, and optimization and training.
These services and the associated fees are separate from the license, maintenance and access fees. Professional services are provided
on either a fixed-fee or hourly arrangements billable to clients based on agreed-to payment milestones (fixed fee) or monthly payment
structure on hours incurred (hourly). These services can either be included at the time the related SaaS solution is licensed as part
of the initial purchase agreement or added on afterward as an addendum to the existing agreement for services required after the initial
implementation.

 For one-time data normalization
services clients, these normalization services are provided either through a stand-alone services agreement or services addendum to an
existing master agreement with the client. These normalization services are available as either a one-time service or recurring monthly,
quarterly or annual review structure. These services are typically provided on a per item basis. Payment typically occurs upon completion
of the applicable normalization project. The commencement of revenue recognition varies depending on the size and complexity of the system
and/or services involved, the implementation or performance schedule requested by the client and usage by clients of SaaS for software-based
components. SCWorx's agreements are generally non-cancellable but provide that the client may terminate its agreement upon a material
breach by SCWorx and/or may delay certain aspects of the installation or associated payments in such events. SCWorx does allow for termination
for convenience in certain situations. SCWorx also includes trial or evaluation periods for certain clients, especially for new or modified
solutions. Therefore, it is difficult for SCWorx to accurately predict the revenue it expects to achieve in any particular period, and
a termination or installation delay of one or more phases of an agreement, or the failure of SCWorx to procure additional agreements,
could have a material adverse effect on SCWorx's business, financial condition, and results of operations. Historically, SCWorx
has not experienced a material amount of contract cancellations; however, SCWorx sometimes experiences delays during contract implementation,
and SCWorx accounts for them accordingly.

 Third Party License Fees

 SCWorx incorporates software
licensed from various third-party vendors into its proprietary software. Stand-alone third-party software is also required to operate
certain of SCWorx's proprietary software and/or SaaS services. SCWorx licenses these software products and pays the required license
fees when such software is delivered to clients.

 Government Regulation

 Management believes that governmental
regulation is not material to our current core data management business.

 Intellectual Property

 We protect our intellectual
property rights by relying on federal, state and common law rights, as well as contractual restrictions. We control access to our proprietary
technology by entering into confidentiality agreements, invention assignment agreements and work for hire agreements with our employees
and contractors, and confidentiality agreements with third parties. We further control the use of our proprietary technology and intellectual
property through provisions in our websites' terms of use. Agreements between the Company and end-users includes a license agreement
in which a non-transferable non-sublicensable, non-exclusive, limited use license to use the licensed products for the duration of the
service order. Customers may not modify, copy, translate, decompile, disassemble, reverse engineer, loan, rent, lease, sublicense, or
create derivative works of the licensed products, in whole or in part. Customer agrees to maintain software and data as Confidential Information.

 The Company currently hosts
our solution, serves our customers, and supports our operations in the United States through an agreement with a third-party hosting and
infrastructure provider, Rackspace. The Company incorporates standard IT security measures, including but not limited to; firewalls, disaster
recovery, backup, etc.

 Circumstances outside our control
could pose a threat to our intellectual property rights. For example, effective intellectual property protection may not be available
in the United States or other countries in which we seek protection of our marks or our copyrighted works. Also, the efforts we have taken
to protect our proprietary rights may not be sufficient or effective. Any significant impairment of our intellectual property rights may
harm our business or our ability to compete.

 Seasonality

 We do not believe that SCWorx's
revenues are impacted by seasonality.

 Employees

 As of December 31, 2024, we
had 7 employees, of which 2 were management and finance and the rest in operations. We primarily utilize independent contractors and third-party
vendors for software, maintenance of our database and customer software installation.

 Available Information

 Our website address is www. SCWorx.com.
Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant
to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (Exchange Act), are filed with the U.S. Securities and
Exchange Commission (SEC). We are subject to the informational requirements of the Exchange Act and file or furnish reports, proxy statements,
and other information with the SEC. Such reports and other information filed by us with the SEC are available free of charge on our website
at www. SCWorx.com when such reports become available on the SEC's website. The public may read and copy any materials filed by SCWorx
Corp. with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Room 1580, Washington, DC 20549 on official business
days during the hours of 10 a.m. to 3 p.m. The public may obtain information on the operation of the Public Reference Room by calling
the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the SEC at www.sec.gov. The contents of the websites referred to above are not incorporated
into this filing. Further, our references to the URLs for these websites are intended to be inactive textual references only.

 Item 1A. Risk Factors

 Certain factors could have
a material adverse effect on our business, financial condition, results of operations and prospects. You should carefully consider the
risks and uncertainties described below, in addition to other information contained in this Annual Report on Form 10-K, including our
consolidated financial statements and related notes. The risks and uncertainties described below are not the only ones we face. Additional
risks and uncertainties of which we are unaware, or that we currently believe are not material, may also become important factors that
adversely affect our business, financial condition, results of operations and prospects. If any of the following risks occurs, our business,
financial condition, results of operations and prospects could be materially and adversely affected. In that event, the trading price
of our common stock could decline, and you could lose part or all of your investment.

 Risks Related to Our Financial Results and
Financing Plans

 We have a history of losses and may continue
to incur losses in the future.

 We have a history of losses
and may continue to incur losses in the future, which could negatively impact the trading value of our common stock. For the year ended
December 31, 2024, our revenues were $2,989,599, and we had a net loss of $1,136,225. For the year ended December 31, 2023, our revenues
were $3,804,943, and we had a net loss of $3,981,144. At December 31, 2024, we had an accumulated deficit of $30,976,066.

 We incurred losses from operations
of $1,259,426 for the year ended December 31, 2024 and $1,450,662 for the year ended December 31, 2023. We may continue to incur operating
and net losses in future periods. These losses may increase, and we may never achieve profitability for a variety of reasons, including
increased competition, decreased growth in our target market and other factors described elsewhere in this "Risk Factors"
section. If we cannot achieve sustained profitability, our stockholders may lose all or a portion of their investment in our company.

 If we are unable to grow our revenue, we
may never achieve or sustain profitability.

 To become profitable, we must,
among other things, increase our revenues. Our total revenues declined approximately $815,000 (21%) to $2,989,599 in the year ended December
31, 2024 as compared to $3,804,943 in the year ended December 31, 2023. This decline in revenue may continue if we are unable to
develop and market new products, which could help us increase our sales to existing customers or develop new customers. Even if we are
able to grow our revenues, they may not be sufficient to exceed increases in our operating expenses or to enable us to achieve or sustain
profitability.

 Risks Related to Our Business

 There is substantial doubt about our ability
to continue as a going concern.

 Our auditors have indicated
in their report on our consolidated financial statements for the year ended December 31, 2024 that conditions exist that raise substantial
doubt about our ability to continue as a going concern since we may not have sufficient capital resources from operations and existing
financing arrangements to meet our operating expenses and working capital requirements.

 As of December 31, 2024, we
had only limited cash on hand, a working capital deficit of $1,333,171 and accumulated deficit of $30,976,066. During the year ended December
31, 2024, we had a net loss of $1,136,225 and used $1,084,292 of cash in operations. We have historically incurred operating losses and
may continue to incur operating losses for the foreseeable future. We believe that these conditions raise substantial doubt about our
ability to continue as a going concern. This may hinder our ability to obtain financing or may force us to obtain financing on less favorable
terms than would otherwise be available. If we are unable to develop sufficient revenues and additional customers for our products and
services, we may not generate enough revenue to sustain our business, and we may fail, in which case our stockholders would suffer a total
loss of their investment. There can be no assurance that we will be able to continue as a going concern.

 We may need additional capital. If we are
unable to obtain additional capital when required, we will not be able to implement our business strategy or successfully operate our
business; however, additional financing will subject our existing stockholders to dilution.

 To continue our growth path,
we may need to finance our future expansion plans through public or private equity offerings or debt financing. Additional funds may not
be available when we need them on terms that are acceptable to us, or at all. We have recently encountered difficulty in raising funds
from external sources. The Agreements related to the July and January Notes offerings restrict our ability to raise capital from third
parties and contain full ratchet anti-dilution provisions. Consequently, if we need to raise additional capital, we would need the consent
of the investors in the July and January Notes offerings. If we are unable to secure such consent, we would need to seek additional financing
from such investors. There can be no assurance that such investors would be willing to provide us with additional capital on acceptable
terms or at all.

 If adequate funds are not available,
we may be required to further delay or reduce the scope of our business plans. To the extent that we raise additional funds by issuing
equity securities, our stockholders will experience dilution. In addition, debt financing, if available, may involve restrictive covenants.
We may seek to access the public or private capital markets whenever conditions are favorable, even if we do not have an immediate need
for additional capital at that time. Our access to the financial markets and the pricing and terms we receive in the financial markets
could be adversely impacted by various factors, including changes in financial markets and interest rates.

 Our future funding requirements
will depend on many factors, including, but not limited to, the costs and timing of any future acquisitions.

 A failure to successfully execute our growth
strategy could adversely affect our business, financial condition, results of operations and prospects.

 Subject to the receipt of sufficient
funding, which we currently do not have, we intend to pursue growth through expanding our sales force, product offerings and project skill-sets
and capabilities, as well as increasing critical mass to enable us to bid on larger contracts.

 We may also consider potential
acquisitions if conditions permit. However, we may be unable to find suitable acquisition candidates or to complete acquisitions on favorable
terms, if at all. Moreover, any completed acquisition may not result in the intended benefits. For example, while the historical financial
and operating performance of an acquisition target are among the criteria we evaluate in determining which acquisition targets we will
pursue, there can be no assurance that any business or assets we acquire will continue to perform in accordance with past practices or
will achieve financial or operating results that are consistent with or exceed past results. Any such failure could adversely affect our
business, financial condition or results of operations. In addition, any completed acquisition may not result in the intended benefits
for other reasons and our acquisitions will involve a number of other risks, including:

 We may have difficulty integrating the acquired companies;

 Our ongoing business and management's attention may be disrupted or diverted by transition or integration issues and the complexity of managing geographically or culturally diverse enterprises;

 We may not realize the anticipated cost savings or other financial benefits we anticipated;

 We may have difficulty retaining or hiring key personnel, customers and suppliers to maintain expanded operations;

 Our internal resources may not be adequate to support our operations as we expand, particularly if we are awarded a significant number of contracts in a short time period;

 We may have difficulty retaining and obtaining any required regulatory approvals, licenses and permits;

 We may not be able to obtain additional equity or debt financing on terms acceptable to us or at all, and any such financing could result in dilution to our stockholders, impact our ability to service our debt within the scheduled repayment terms and include covenants or other restrictions that would impede our ability to manage our operations;

 We may have failed to, or be unable to, discover liabilities of the acquired companies during the course of performing our due diligence; and

 We may be required to record additional goodwill as a result of an acquisition, which will reduce our tangible net worth.

 Any of these risks could prevent
us from executing on any acquisition we might complete, which could adversely affect our business, financial condition, results of operations
and prospects. At this time, we are not considering any acquisition.

 Our contracts may require us to perform
extra or change order work, which can result in disputes and adversely affect our business, financial condition, results of operations
and prospects.

 Our contracts generally require
us to perform extra or change order work as directed by the customer, even if the customer has not agreed in advance on the scope or price
of the extra work to be performed. This process may result in disputes over whether the work performed is beyond the scope of the work
included in the original project plans and specifications or, if the customer agrees that the work performed qualifies as extra work,
the price that the customer is willing to pay for the extra work. Even when the customer agrees to pay for the extra work, we may be required
to fund the cost of such work for a lengthy period of time until the change order is approved by the customer and we are paid by the customer.

 To the extent that actual
recoveries with respect to change orders or amounts subject to contract disputes or claims are less than the estimates used in our consolidated
financial statements, the amount of any shortfall will reduce our future revenues and profits, and this could adversely affect our reported
working capital and results of operations. In addition, any delay caused by the extra work may adversely impact the timely scheduling
of other project work and our ability to meet specified contract milestone dates.

 We derive a significant portion of our revenue
from a few customers and the loss of one of these customers, or a reduction in their demand for our services, could adversely affect our
business, financial condition, results of operations and prospects.

 Our customer base is highly
concentrated. Due to the size and nature of our contracts, one or a few customers have during any given year, as well as over a period
of consecutive years, represented a substantial portion of our consolidated revenues and gross profits, see Note 3, Summary of Significant
Accounting Policies for further detail. Revenues under our contracts with significant customers may continue to vary from period to period
depending on the timing or volume of work that those customers contract from us. A limited number of customers may continue to comprise
a substantial portion of our revenue for the foreseeable future.

 A default or delay in payment
on a significant scale could adversely affect our business, financial condition, results of operations and prospects. We could lose business
from a significant customer for a variety of reasons, including:

 the consolidation, merger or acquisition of an existing customer, resulting in a change in procurement strategies employed by the surviving entity that could reduce the amount of work we receive;

 our performance on individual contracts or relationships with one or more significant customers could become impaired due to another reason, which may cause us to lose future business with such customers and, as a result, our ability to generate income would be adversely impacted;

 key customers could slow or stop spending on initiatives related to projects we are performing for them due to increased difficulty in the markets as a result of economic downturns or other reasons.

 Since many of our customer
contracts allow our customers to terminate the contract without cause, our customers may terminate their contracts with us at will, which
could impair our business, financial condition, results of operations and prospects.

 Our failure to adequately expand our direct
sales force will impede our growth.

 We will need to expand and
optimize our sales infrastructure in order to grow our customer base and our business. We plan to expand our account management/sales
force when and if we have sufficient capital to do so. Identifying and recruiting qualified personnel and training them requires significant
time, expense and attention. If we are unable to hire, develop and retain talented account management/sales personnel or if the personnel
are unable to achieve desired productivity levels in a reasonable period of time, we may not be able to realize the intended benefits
of this investment or increase our revenue.

 If we are unable to attract and retain qualified
executive officers and managers and consultants, we will be unable to operate efficiently, which could adversely affect our business,
financial condition, results of operations and prospects.

 We depend on the continued
efforts and abilities of our management and consultants, to establish and maintain our customer relationships and identify strategic opportunities.
The loss of any one of them could negatively affect our ability to execute our business strategy and adversely affect our business, financial
condition, results of operations and prospects. Competition for managerial talent with significant industry experience is high, and we
may lose access to executive officers/consultants for a variety of reasons, including more attractive compensation packages offered by
our competitors. Although we have entered into employment agreements with certain of our senior level management, we cannot guarantee
that any of them or other key management/consulting personnel will remain employed by us for any length of time.

 Fines, judgments and other consequences
resulting from our failure to comply with regulations or adverse outcomes in litigation proceedings could adversely affect our business,
financial condition, results of operations and prospects.

 From time to time, we may be
involved in lawsuits and regulatory actions, including class action lawsuits that are brought or threatened against us in the ordinary
course of business. These actions may seek, among other things, compensation for alleged personal injury, workers' compensation,
violations of the Fair Labor Standards Act and state wage and hour laws, employment discrimination, breach of contract, property damage,
punitive damages, civil penalties, and consequential damages or other losses, or injunctive or declaratory relief.

 Please refer to Item 3. Legal
Proceedings of this Annual Report on Form 10-K for a detailed description of the pending legal actions and investigations.

 Any defects or errors, or failures
to meet our customers' expectations could result in large damage claims against us. Claimants may seek large damage awards and,
due to the inherent uncertainties of litigation, we cannot accurately predict the ultimate outcome of any such proceedings. Any failure
to properly estimate or manage cost, or delay in the completion of projects, could subject us to penalties.

 The ultimate resolution of
these matters through settlement, mediation or court judgment could have a material adverse effect on our financial condition, results
of operations and cash flows. Regardless of the outcome of any litigation, these proceedings could result in substantial cost and may
require us to devote substantial resources to defend ourselves. When appropriate, we establish reserves for litigation and claims that
we believe to be adequate in light of current information, legal advice and professional indemnity insurance coverage, and we adjust such
reserves from time to time according to developments. If our reserves are inadequate or insurance coverage proves to be inadequate or
unavailable, our business, financial condition, results of operations and prospects may suffer.

 If we are required to reclassify independent
contractors as employees, we may incur additional costs and taxes which could adversely affect our business, financial condition, results
of operations and prospects.

 We use a significant number
of independent contractors in our operations for whom we do not pay or withhold any federal or state employment tax. There are a number
of different tests used in determining whether an individual is an employee or an independent contractor and such tests generally take
into account multiple factors. There can be no assurance that legislative, judicial or regulatory (including tax) authorities will not
introduce proposals or assert interpretations of existing rules and regulations that would change, or at least challenge, the classification
of our independent contractors. Although we believe we have properly classified our independent contractors, the U.S. Internal Revenue
Service or other U.S. federal or state authorities or similar authorities of a foreign government may determine that we have misclassified
our independent contractors for employment tax or other purposes and, as a result, seek additional taxes from us or attempt to impose
fines and penalties. If we are required to pay employer taxes or pay backup withholding with respect to prior periods with respect to
or on behalf of our independent contractors, our operating costs will increase, which could adversely impact our business, financial condition,
results of operations and prospects.

 Our dependence on subcontractors and suppliers
could increase our cost and impair our ability to complete contracts on a timely basis or at all.

 We rely on third-party subcontractors
to perform some of the work on our contracts. We also rely on third-party suppliers to provide materials needed to perform our obligations
under those contracts. We generally do not bid on contracts unless we have the necessary subcontractors and suppliers committed for the
anticipated scope of the contract and at prices that we have included in our bid. Therefore, to the extent that we cannot engage subcontractors
or suppliers, our ability to bid for contracts may be impaired. In addition, if a subcontractor or third-party supplier is unable to deliver
its goods or services according to the negotiated terms for any reason, we may suffer delays and be required to purchase the services
from another source at a higher price. We sometimes pay our subcontractors and suppliers before our customers pay us for the related services.
If customers fail to pay us and we choose, or are required, to pay our subcontractors for work performed or pay our suppliers for goods
received, we could suffer an adverse effect on our business, financial condition, results of operations and prospects.

 Our insurance coverage may be inadequate
to cover all significant risk exposures.

 We will be exposed to liabilities
that are unique to the services we provide. While we intend to maintain insurance for certain risks, the amount of our insurance coverage
may not be adequate to cover all claims or liabilities, and we may be forced to bear substantial costs resulting from risks and uncertainties
of our business. It is also not possible to obtain insurance to protect against all operational risks and liabilities. The failure to
obtain adequate insurance coverage on terms favorable to us, or at all, could have a material adverse effect on our business, financial
condition, results of operations and prospects.

 Risks Related to Our Industry

 Our industry is highly competitive, with
a variety of larger companies with greater resources competing with us, and our failure to compete effectively could reduce the number
of new contracts awarded to us or adversely affect our market share and harm our financial performance.

 The contracts on which we bid
are generally awarded through a competitive bid process, with awards generally being made to the lowest bidder, but sometimes based on
other factors, such as shorter contract schedules, larger scale to complete projects or prior experience with the customer. Within our
markets, we compete with many other service providers. Price is often the principal factor in determining which service provider is selected
by our customers, especially on smaller, less complex projects. As a result, any organization with adequate financial resources and access
to technical expertise may become a competitor. Smaller competitors are sometimes able to win bids for these projects based on price alone
because of their lower costs and financial return requirements. Additionally, our competitors may develop the expertise, experience and
resources to provide services that are equal or superior in price to our services, and we may not be able to maintain or enhance our competitive
position.

 Some of our competitors have
already achieved greater market penetration than we have in the markets in which we compete, and some have greater financial and other
resources than we do. A number of national companies in our industry are larger than we are and, if they so desire, could establish a
presence in our markets and compete with us for contracts. As a result of this competition, we may need to accept lower contract margins
in order to compete against competitors that have the ability to accept awards at lower prices or have a pre-existing relationship with
a customer. If we are unable to compete successfully in our markets, our business, financial condition, results of operations and prospects
could be adversely affected.

 Many of the customers we serve are subject
to consolidation and rapid technological and regulatory change, and our inability or failure to adjust to our customers' changing
needs could reduce demand for our services.

 We derive, and anticipate that
we will continue to derive, a substantial portion of our revenue from customers in the medical industry. This industry is subject to rapid
changes in technology and governmental regulation. Changes in technology may reduce the demand for the services we provide. Additionally,
the medical industry has been characterized by a high level of consolidation that may result in the loss of one or more of our customers.
Our failure to rapidly adopt and master new technologies as they are developed in any of the industries we serve or the consolidation
of one or more of our significant customers could adversely affect our business, financial condition, results of operations and prospects.

 Further, our customers are
regulated by the Department of Health and Human Services and other regulators. These regulators may interpret the application of their
regulations in a manner that is different than the way such regulations are currently interpreted and may impose additional regulations,
either of which could reduce demand for our services and adversely affect our business and results of operations.

 Economic downturns could cause capital expenditures
in the industries we serve to decrease, which may adversely affect our business, financial condition, results of operations and prospects.

 The demand for our services
has been and may be vulnerable to general downturns in the United States economy. Our customers are affected by economic changes that
decrease the need for, or the profitability of, their services. This can result in a decrease in the demand for our services and potentially
result in the delay or cancellation of projects by our customers. As a result, some of our customers may opt to defer or cancel pending
projects. A downturn in overall economic conditions also affects the priorities placed on various projects funded by governmental entities
and federal, state and local spending levels.

 In general, economic uncertainty
makes it difficult to estimate our customers' requirements for our services. Subject to receipt of sufficient funding, which we
currently do not have, we plan to expand our sales force to enable us to grow our revenues. If economic factors in any of the regions
in which we plan to expand are not favorable to the growth and development of the medical industry, we may not be able to carry out our
growth strategy, which could adversely affect our business, financial condition, results of operations and prospects.

 Other Risks Relating to Our Company and Results
of Operations

 Our operating results may fluctuate due
to factors that are difficult to forecast and not within our control.

 Our past operating results
may not be accurate indicators of future performance, and you should not rely on such results to predict our future performance.

 Our operating results have
fluctuated and could fluctuate in the future. Factors that may contribute to fluctuations include:

 our ability to effectively manage our working capital;

 our ability to satisfy customer demands in a timely and cost-effective manner; and

 pricing and availability of labor.

 Actual results could differ from the estimates
and assumptions that we use to prepare our financial statements.

 To prepare financial statements
in conformity with GAAP, management is required to make estimates and assumptions as of the date of the consolidated financial statements
that affect the reported values of assets and liabilities, revenues and expenses, and disclosures of contingent assets and liabilities.
Areas requiring significant estimates by our management include:

 contract costs and profits and revenue recognition of contract change order claims;

 provisions for uncollectible receivables and customer claims;

 recoveries of costs from subcontractors, suppliers and others;

 valuation of assets acquired and liabilities assumed in connection with business combinations;

 accruals for estimated liabilities, including litigation and insurance reserves; and

 goodwill and intangible asset impairment assessment.

 At the time the estimates and
assumptions are made, we believe they are accurate based on the information available. However, our actual results could differ from,
and could require adjustments to, those estimates.

 We exercise judgment in determining our
provision for taxes in the United States that are subject to tax authority audit review that could result in additional tax liability
and potential penalties that would negatively affect our net income.

 Our tax filings are subject
to review or audit by the U.S. Internal Revenue Service and state, local and foreign taxing authorities. We exercise judgment in determining
our worldwide provision for income and other taxes and, in the ordinary course of our business, there may be transactions and calculations
where the ultimate tax determination is uncertain. Examinations of our tax returns could result in significant proposed adjustments and
assessment of additional taxes that could adversely affect our tax provision and net income in the period or periods for which that determination
is made.

 Risks Related to our Common Stock

 Our common stock price has fluctuated substantially,
and the trading price of our common stock is likely to continue to be volatile, which could result in losses to investors and litigation.

 In addition to changes to market
prices based on our results of operations and the factors discussed elsewhere in this "Risk Factors" section, the market price
of and trading volume for our common stock may change for a variety of other reasons, not necessarily related to our actual operating
performance. The capital markets have experienced extreme volatility that has often been unrelated to the operating performance of particular
companies. These broad market fluctuations may adversely affect the trading price of our common stock. In addition, the average daily
trading volume of the securities of small companies can be very low, which may contribute to future volatility. Recently, the average
daily trading volume of our common stock has decreased. Factors that could cause the market price of our common stock to fluctuate significantly
include:

 the results of operating and financial performance and prospects of other companies in our industry;

 strategic actions by us or our competitors, such as acquisitions or restructurings;

 announcements of innovations, increased service capabilities, new or terminated customers or new, amended or terminated contracts by our competitors;

 the public's reaction to our press releases, media coverage and other public announcements, and filings with the SEC;

 market conditions for providers of services to the medical industry;

 lack of securities analyst coverage or speculation in the press or investment community about us or opportunities in the markets in which we compete;

 changes in government policies in the United States;

 changes in earnings estimates or recommendations by any securities or research analysts who track our common stock or failure of our actual results of operations to meet any such expectations;

 dilution caused by the conversion into common stock of convertible securities or by the exercise of outstanding warrants or options;

 market and industry perception of our success, or lack thereof, in pursuing our growth strategy;

 changes in accounting standards, policies, guidance, interpretations or principles;

 any lawsuit involving us, our services or our products;

 arrival and departure of key personnel;

 government investigations of our business activities;

 sales of common stock by us, our investors or members of our management team; and

 changes in general market, economic and political conditions in the United States and global economies or financial markets, including those resulting from natural or man-made disasters.

 Any of these factors, as well
as broader market and industry factors, may result in large and sudden changes in the trading volume of our common stock and could seriously
harm the market price of our common stock, regardless of our operating performance. This may prevent stockholders from being able to sell
their shares at or above the price they paid for shares of our common stock, if at all. In addition, following periods of volatility in
the market price of a company's securities, stockholders often institute securities class action litigation against that company.
Our involvement in any class action suit or other legal proceeding could divert our senior management's attention and could adversely
affect our business, financial condition, results of operations and prospects.

 The sale or availability for sale of substantial
amounts of our common stock could adversely affect the market price of our common stock.

 As of March 18, 2025, there
were an aggregate of 26,578,477 shares issuable under the July Notes and Warrants, the November Warrants, the January Notes and Warrants
and under the Settlement Agreement with Core IR (estimated). All of these shares are registered on the Registration Statement of which
this prospectus is a part.

 Sales of substantial amounts
of shares of our common stock, or the perception that these sales could occur, would likely adversely affect the market price of our common
stock and could impair our future ability to raise capital through common stock offerings.

 The market price of our common
stock also may be adversely affected by our issuance of shares of our capital stock or convertible securities in connection with future
acquisitions, or in connection with our financing efforts.

 We have never paid cash dividends on our
common stock and do not anticipate paying any cash dividends on our common stock.

 We have never paid cash dividends
and do not anticipate paying any cash dividends on our common stock in the foreseeable future. We currently intend to retain any earnings
to finance our operations and growth. As a result, any short-term return on your investment will depend on the market price of our common
stock, and only appreciation of the price of our common stock, which may never occur, will provide a return to stockholders. The decision
whether to pay dividends will be made by our board of directors in light of conditions then existing, including, but not limited to, factors
such as our financial condition, results of operations, capital requirements, business conditions, and covenants under any applicable
contractual arrangements. Investors seeking cash dividends should not invest in our common stock.

 If equity research analysts do not publish
research or reports about our business, or if they issue unfavorable commentary or downgrade our common stock, the market price of our
common stock will likely decline.

 The trading market for our
common stock will rely in part on the research and reports that equity research analysts, over whom we have no control, publish about
us and our business. We may never obtain research coverage by securities and industry analysts. If no securities or industry analysts
commence coverage of our company, the market price for price of our common stock could decline. In the event we obtain securities or industry
analyst coverage, the market analysts issue unfavorable commentary, even if it is inaccurate, or cease publishing reports about us or
our business.

 A failure by us to establish and maintain
effective internal control over financial reporting could have a material adverse effect on our business and operating results.

 Maintaining effective internal
control over financial reporting is necessary for us to produce accurate and complete financial reports and to help prevent financial
fraud. In addition, such control is required in order to maintain the listing of our common stock on the Nasdaq Capital Market. While
we have undertaken remedial steps to improve our financial reporting process, including the implementation of a firm-wide accounting information
system that collects, stores and processes financial and accounting data on a consolidated basis for use in meeting our reporting obligations,
our internal control over financial reporting has not been effective. For the year ended December 31, 2024, we did not have effective
controls over financial reporting. Our management has identified material weaknesses in our internal controls related to deficiency in
our ability to have proper segregation of duties.

 If we are unable to maintain
adequate internal controls or fail to correct material weaknesses in such controls noted by our management or our independent registered
public accounting firm, our business and operating results could be adversely affected, we could again fail to meet our obligations to
report our operating results accurately and completely and our continued listing on the Nasdaq Capital Market could be jeopardized. We
have implemented a policy whereby any external communications need to be reviewed and approved by a member of our Board of Directors,
as well as our outside legal counsel.

 Complying with the laws and regulations
affecting public companies will increase our costs and the demands on management and could harm our operating results.

 As a public company and particularly
after we cease to be an "emerging growth company," we will incur significant additional legal, accounting, and other expenses.
In addition, the Sarbanes-Oxley Act and rules subsequently implemented by the SEC and the Nasdaq Capital Market impose various requirements
on public companies, including requiring changes in corporate governance practices. Our management and other personnel devote a substantial
amount of time to these compliance initiatives. Moreover, these rules and regulations have increased and will continue to increase our
legal, accounting, and financial compliance costs and have made and will continue to make some activities more time-consuming and costly.
For example, these rules and regulations make it more difficult and more expensive for us to obtain director and officer liability insurance,
and we may be required to accept reduced policy limits and coverage or to incur substantial costs to maintain the same or similar coverage.
These rules and regulations could also make it more difficult for us to attract and retain qualified persons to serve on our board of
directors or board committees or as executive officers.

 If we do not manage our planned growth effectively,
our revenue, business and operating results may be harmed.

 Our future expansion strategy
could include possible acquisitions of other SaaS companies. We may not be able to identify, secure and manage future acquisitions successfully.
The acquisition of any future businesses may require a greater than anticipated investment of operational and financial resources as we
seek to institute uniform standards and controls across acquired businesses. Acquisitions may also result in the diversion of management
and resources, increases in administrative costs, including those relating to the assimilation of new employees, and costs associated
with any financings undertaken in connection with such acquisitions. We cannot assure you that any acquisition we undertake, including
those we have already made, will be successful. Future growth will also place additional demands on our management, sales, and marketing
resources, and may require us to hire and train additional employees. We will need to expand and upgrade our systems and infrastructure
to accommodate our growth, and we may not have the resources to do so in the time frames required. The failure to manage any future growth
effectively will materially and adversely affect our business, financial condition and results of operations.

 We may explore acquiring additional companies
and such acquisitions may subject us to additional unknown risks.

 We may make future acquisitions
of SaaS or other companies in markets that we do not serve now. In completing acquisitions, we will rely upon the representations and
warranties and indemnities made by the sellers with respect to each acquisition as well as our own due diligence investigation. We cannot
assure you that such representations and warranties will be true and correct or that our due diligence will uncover all materially adverse
facts relating to the operations and financial condition of the acquired companies or their businesses. To the extent that we are required
to pay for undisclosed obligations of an acquired company, or if material misrepresentations exist, we may not realize the expected economic
benefit from such acquisition and our ability to seek legal recourse from the seller may be limited.

 The value of our goodwill and other intangible
assets may decline.

 As of December 31, 2024,
the Company had goodwill of $5,842,433. We evaluate goodwill at least annually, and will do so more frequently if events or circumstances
indicate that impairment may have occurred. Many of the assumptions and estimates that we make in order to estimate the fair value of
our intangible assets directly impact the results of impairment testing, including an estimate of future expected revenues, earnings and
cash flows, and the discount rates applied to expected cash flows. We are able to influence the outcome and ultimate results based on
the assumptions and estimates we choose for testing. To avoid undue influence, we have set criteria that are followed in making assumptions
and estimates. The determination of whether goodwill or acquired intangible assets have become impaired involves a significant level of
judgment in the assumptions underlying the approach used to determine the value of our reporting unit. Changes in our strategy or market
conditions could significantly impact these judgments and require adjustments to recorded amounts of intangible assets.

 Any future acquisitions may result in potentially
dilutive issuances of equity securities, the incurrence of indebtedness and increased amortization expense.

 Any future acquisitions are
likely to result in issuances of equity securities, which will be dilutive to the equity interests of existing stockholders, and may involve
the incurrence of debt, which will require us to maintain cash flows sufficient to make payments of principal and interest, the assumption
of known and unknown liabilities, and the amortization of expenses related to intangible assets, all of which could have an adverse effect
on our business, financial condition and results of operations.

 We may become involved in litigation which
could harm the value of our business.

 Because of the nature of our
business and the exit from lines of business, there is a risk of litigation. Any litigation could cause us to incur substantial expenses
whether or not we prevail, which would reduce the capital available for our operations.

 Please refer to Item 3. Legal
Proceedings of this Annual Report on Form 10-K for a detailed description of the pending legal actions and investigations.

 Economic uncertainty impacts our business
and financial results, and a renewed recession could materially affect us in the future.

 Periods of economic slowdown
or recession could lead to a reduction in demand for our software and services, which in turn would reduce our revenues and adversely
affect our results of operations and our financial position. Our business will be dependent upon business discretionary spending and therefore
is affected by business confidence as well as the future performance of the United States and global economies. As a result, our results
of operations are susceptible to economic slowdowns and recessions.

 We depend on the services of key executives
and consultants, and the loss of these persons could materially harm our business and our strategic direction if we were unable to replace
them with persons of equal experience and capabilities.

 Our future success significantly
depends on the continued service and performance of our key management and other personnel. We cannot prevent members of senior management/consultants
from terminating their employment with us even if we have an employment or consulting agreement with them. Losing the services of members
of senior management/consultants could materially harm our business until a suitable replacement is found, and such replacement may not
have equal experience and capabilities. We have not purchased life insurance covering any members of our senior management.

 Our common stock may be affected by limited
trading volume and price fluctuations, which could adversely impact the value of our common stock and our ability to grow our business.

 There has been limited trading
in our common stock, and there can be no assurance that an active trading market in our common stock will either develop or be maintained.
Our common stock has experienced, and is likely to experience in the future, significant price and volume fluctuations, which could adversely
affect the market price of our common stock without regard to our operating performance. In addition, we believe that factors such as
quarterly fluctuations in our financial results and changes in the overall economy or the condition of the financial markets could cause
the price of our common stock to fluctuate substantially. These fluctuations may also cause short sellers to enter the market periodically
in the belief that we will have poor results in the future. We cannot predict the actions of market participants and, therefore, can offer
no assurances that the market for our common stock will be stable or that our share price will appreciate over time.

 Our stock price has been volatile.

 The market price of our common
stock has been highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control,
including the following:

 our ability to obtain working capital financing;

 additions or departures of key personnel;

 sales of our common stock;

 our ability to execute our business plan;

 operating results that fall below expectations;

 regulatory developments; and

 economic and other external factors.

 In addition, the securities
markets from time to time experience significant price and volume fluctuations that are unrelated to the operating performance of particular
companies. These market fluctuations may also materially and adversely affect the market price of our common stock.

 Offers or availability for sale of a substantial
number of shares of our common stock may cause the price of our common stock to decline.

 The periodic availability of
shares for sale upon the expiration of any statutory holding period or lockup agreements, could create a circumstance commonly referred
to as an "overhang", in anticipation of which the market price of our common stock could fall. The existence of an overhang,
whether or not sales have occurred or are occurring, also could make more difficult our ability to raise additional financing through
the sale of equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate.

 We may be unable to establish, protect or
enforce our intellectual property rights adequately.

 Our success will depend in
part on our ability to establish, protect and enforce our intellectual property and other proprietary rights. Our inability to protect
our tradenames, service marks and other intellectual property rights from infringement, piracy, counterfeiting or other unauthorized use
could negatively affect our business. If we fail to establish, protect or enforce our intellectual property rights, we may lose an important
advantage in the market in which we compete. Our intellectual property rights may not be sufficient to help us maintain our position in
the market and our competitive advantages. Monitoring unauthorized uses of and enforcing our intellectual property rights can be difficult
and costly. Legal intellectual property actions are inherently uncertain and may not be successful, and may require substantial resources
and management attention.

 We currently host our solution,
serve our customers, and support our operations in the United States through an agreement with a third party hosting and infrastructure
provider, Rackspace. We incorporate standard IT security measures, including but not limited to; firewalls, disaster recovery, backup,
etc.

 Circumstances outside our control
could pose a threat to our intellectual property rights. For example, effective intellectual property protection may not be available
in the United States or other countries in which we seek protection of our marks or our copyrighted works. Also, the efforts we have taken
to protect our proprietary rights may not be sufficient or effective. Any significant impairment of our intellectual property rights may
harm our business or our ability to compete.

 Changes in laws, regulations and other requirements
could adversely affect our business, results of operations or financial condition.

 We are subject to the laws,
regulations and other requirements of the jurisdictions in which we operate. Changes to these laws could have a material adverse impact
on the revenue, profit or the operation of our business.

 Disruptions in our information technology
systems or security breaches of confidential customer information or personal employee information could have an adverse impact on our
operations.

 Our operations are dependent
upon the integrity, security and consistent operation of various information technology systems and data centers that process transactions,
communication systems and various other software applications used throughout our operations. Disruptions in these systems could have
an adverse impact on our operations. We could encounter difficulties in developing new systems or maintaining and upgrading existing systems.
Such difficulties could lead to significant expenses or to losses due to disruption in our business operations.

 In addition, our information
technology systems are subject to the risk of infiltration or data theft. The techniques used to obtain unauthorized access, disable or
degrade service, or sabotage information technology systems change frequently and may be difficult to detect or prevent over long periods
of time. Moreover, the hardware, software or applications we develop or procure from third parties may contain defects in design or manufacture
or other problems that could unexpectedly compromise the security of our information systems. Unauthorized parties may also attempt to
gain access to our systems or facilities through fraud or deception aimed at our employees, contractors or temporary staff. In the event
that the security of our information systems is compromised, confidential information could be misappropriated, and system disruptions
could occur. Any such misappropriation or disruption could cause significant harm to our reputation, lead to a loss of sales or profits
or cause us to incur significant costs to reimburse third parties for damages.

 Our current insurance policies may not provide
adequate levels of coverage against all claims, and we may incur losses that are not covered by our insurance.

 We believe we maintain insurance
coverage that is customary for businesses of our size and type; however, we may be unable to insure against certain types of losses or
claims, or the cost of such insurance may be prohibitive. For example, although we carry insurance for breaches of our computer network
security, there can be no assurance that such insurance will cover all potential losses or claims or that the dollar limits of such insurance
will be sufficient to provide full coverage against all losses or claims. Uninsured losses or claims, if they occur, could have a material
adverse effect on our financial condition, business and results of operations. Our insurance policies may also be subject to substantial
deductibles/retentions.

 We may be required to pay for the defense
of our clients, officers, or directors in accordance with certain indemnification provisions.

 Our company provides indemnification
of varying scope to certain customers against claims of intellectual property infringement made by third parties arising from the use
of our services. In accordance with authoritative guidance for accounting for guarantees, we evaluate estimated losses for such indemnification.
Management considers such factors as the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate
of the amount of loss. To date, no such claims have been filed against our company and, as a result, no liability has been recorded in
our consolidated financial statements.

 As permitted under Delaware
law, our company has agreements whereby we indemnify our officers and directors for certain events or occurrences while the officer or
director is, or was, serving at our company's request in such capacity. The maximum potential amount of future payments we could
be required to make under these indemnification agreements is unlimited; however, we have directors' and officers' liability
insurance coverage that is intended to reduce our financial exposure and may enable us to recover a portion of any such payments.

 Please refer to Item 3. Legal
Proceedings of this Annual Report on Form 10-K for a detailed description of the various actions and investigations for which we are obligated
to indemnify our officers and directors.

 Item 1B. Unresolved Staff Comments

 None.

 Item 2. Properties

 The Company does not own any
real property. The principal executive offices are located at an office complex in Tampa, Florida, consisting of shared office space that
we are leasing. The lease is under a month-to-month lease agreement. The lease allows for the limited use of private offices, conference
rooms, mail handling, videoconferencing, and certain other business services.

 We believe that our facilities
are adequate for our current needs.

 Item 3. Legal Proceedings

 In conducting our business,
we may become involved in legal proceedings. We will accrue a liability for such matters when it is probable that a liability has been
incurred and the amount can be reasonably estimated. When only a range of possible loss can be established, the most probable amount in
the range is accrued. If no amount within this range is a better estimate than any other amount within the range, the minimum amount in
the range is accrued. The accrual for a litigation loss contingency might include, for example, estimates of potential damages, outside
legal fees and other directly related costs expected to be incurred.

 CorProminence d/b/a Core IR v. SCWorx

 AAA Arbitration Case 01-22-0001-5709

 As previously disclosed in
the Company's periodic reports filed with the SEC, on April 25, 2022, the Company received a Demand for Arbitration along with a
Statement of Claim filed by Core IR with the American Arbitration Association seeking damages in the amount of approximately $190,000. arising
out of a marketing and consulting agreement. The Company filed its answer, affirmative defenses and counterclaims on May 16, 2022. By
order of the arbitrator dated November 1, 2022, Core IR received permission to amend its Statement of Claim to increase its request for
damages to $257,546. The Company received the final decision of the Arbitrator on October 16, 2023, awarding Core IR $461,856 including
unpaid compensation, indemnification for legal fees and costs, prevailing party legal fees and interest (the "Award"). Core
IR has since obtained a judgement in the amount of approximately $502,000 (including interest) ("Judgement"). The Company
and Core IR entered into a settlement agreement dated July 12, 2024 under which the Company agreed to issue Core IR shares of its common
stock with a value of $502,000 (determined based on sales proceeds realized by Core IR), in full and complete satisfaction of the Judgement.
The settlement agreement is filed as exhibit 10.5 to our annual report on Form 10-K as filed with the SEC on September 24, 2024. On July,
18, 2024, the Company issued 159,776 shares of its common stock in the first tranche of payments under this agreement.

 In connection with the Settlement
Agreement, the Company and Core IR entered into a Registration Rights Agreement, pursuant to which the Company was required to file a
resale registration statement with the Commission to register for resale the shares issuable upon under the Settlement Agreement as described
above.

 Hadrian Equities Partners, LLC et ano. v.
SCWorx Corp,

 Case No. 22-cv-07096 (JLR) (S.D.N.Y)

 On August 19, 2022, Hadrian
Equities Partners, LLC and the Phillip W. Caprio, Jr. 2007 Irrevocable Trust filed a complaint in the United States District Court for
the Southern District of New York alleging that SCWorx was dilatory and did not comply with its alleged contractual duties to remove the
restrictions from Plaintiffs' converted AMMA stock to SCWorx stock until August 10 and August 11, 2020. Plaintiffs allege that as
a result, they were unable to sell their SCWorx stock when SCWorx was trading at its highest price on April 13, 2020. The Complaint sought
$500,000 in damages. Plaintiffs filed an Amended Complaint on November 28, 2022. On February 6, 2023, SCWorx filed its answer to
the Amended Complaint interposing numerous defenses. Plaintiff has since entered into a settlement agreement dated December 1, 2023 (effective
as of October 23, 2023) (as amended April 29, 2024), under which the Company agreed to pay Plaintiffs $20,000 and issue them 37,500 shares
of common stock, all in full settlement of the claims made in the lawsuit. The Company has accrued for this liability which is included
in accounts payable and accrued liabilities on the Company's consolidated balance sheet at December 31, 2023. The cash payment was
made in July 2024, and the shares were issued in May 2024.

 Item 4. Mine Safety Disclosures

 Not applicable.

 Item 5. Market for the Registrant's Common
Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Market Information for Common Stock

 Our common stock was listed
on the Nasdaq Capital Market under the symbol "AMMA" from October 6, 2016 through February 3, 2019. Our symbol was changed
to "WORX" on February 4, 2019 in connection with the closing of the SCWorx acquisition. The following table sets forth for
the indicated periods the high and low closing prices for SCWorx's common stock as reported on the NASDAQ Capital Market.

 On October 6, 2023, following
stockholder approval at the Company's annual meeting, the Company amended its certificate of incorporation to implement a 1 for
15 reverse split of its common stock. The effect of the reverse stock split was to combine every 15 shares of outstanding common stock
into one share of common stock. The reverse stock split was effective at the opening of the trading day on October 11, 2023.

 The effects of the reverse
stock split have been reflected in this Annual Report on Form 10-K for all periods presented.

 2024

 2023

 High

 Low

 High

 Low

 First Quarter

 $
 3.89

 $
 1.20

 $
 7.38

 $
 4.80

 Second Quarter

 $
 3.78

 $
 1.70

 $
 9.90

 $
 3.18

 Third Quarter

 $
 1.62

 $
 0.98

 $
 5.70

 $
 2.72

 Fourth Quarter

 $
 3.00

 $
 0.90

 $
 3.23

 $
 1.65

 Holders of Record

 As of March 31, 2025, there
were 2,105,755 outstanding shares of common stock held by 434 stockholders of record.

 Dividends

 We have never declared or paid
any cash dividends on our shares of common stock, and we do not expect to pay cash dividends in the foreseeable future. We anticipate
that we will retain any earnings to support operations and to finance the growth and development of our business. Any future determination
relating to our dividend policy will be made at the discretion of our Board of Directors and will depend on a number of factors, including
future earnings, capital requirements, financial conditions and future prospects and other factors the Board of Directors may deem relevant.
Furthermore, our ability to pay dividends is limited by the Delaware General Corporation Law, which provides that a corporation may pay
dividends only out of existing "surplus," which is defined as the amount by which a corporation's net assets exceeds
its stated capital.

 Item 6. [Reserved]

 Item 7. Management's Discussion and Analysis
of Financial Condition and Results of Operations

 This Management's
Discussion and Analysis of Financial Condition and Results of Operations includes a number of forward-looking statements that reflect
Management's current views with respect to future events and financial performance. You can identify these statements by forward-looking
words such as "may" "will," "expect," "anticipate," "believe," "estimate"
and "continue," or similar words. Those statements include statements regarding the intent, belief or current expectations
of us and members of our management team as well as the assumptions on which such statements are based. Prospective investors are cautioned
that any such forward-looking statements are not guarantees of future performance and involve risk and uncertainties, and that actual
results may differ materially from those contemplated by such forward-looking statements.

 Readers are urged to carefully
review and consider the various disclosures made by us in this report and in our other reports filed with the Securities and Exchange
Commission. Important factors known to us could cause actual results to differ materially from those in forward-looking statements. We
undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated
events or changes in the future operating results over time. We believe that its assumptions are based upon reasonable data derived from
and known about our business and operations and the business and operations of our company. No assurances are made that actual results
of operations or the results of our future activities will not differ materially from its assumptions. Factors that could cause differences
include, but are not limited to, expected market demand for our services, fluctuations in pricing for materials, and competition.

 Our Business

 SCWorx is a provider of data
content and services related to the repair, normalization and interoperability of information for healthcare providers and big data analytics
for the healthcare industry.

 SCWorx has developed and markets
health information technology solutions and associated services that improve healthcare processes and information flow within hospitals.
SCWorx's software platform enables healthcare providers to simplify, repair, and organize its data ("data normalization"),
allows the data to be utilized across multiple internal software applications ("interoperability") and provides the basis
for sophisticated data analytics ("big data"). SCWorx's solutions are designed to improve the flow of information quickly
and accurately between the existing supply chain, electronic medical records, clinical systems, and patient billing functions. The software
is designed to achieve multiple operational benefits such as supply chain cost reductions, decreased accounts receivables aging, accelerated
and more accurate billing, contract optimization, increased supply chain management and cost visibility, synchronous Charge Description
Master ("CDM") and control of vendor rebates and contract administration fees.

 SCWorx empowers healthcare
providers to maintain comprehensive access and visibility to an advanced business intelligence that enables better decision-making and
reductions in product costs and utilization, ultimately leading to accelerated and accurate patient billing. SCWorx's software modules
perform separate functions as follows:

 virtualized Item Master File repair, expansion and automation;

 CDM management;

 contract management;

 request for proposal automation;

 rebate management;

 big data analytics modeling; and

 data integration and warehousing.

 SCWorx continues to provide
transformational data-driven solutions to many healthcare providers in the United States. The Company's clients are geographically
dispersed throughout the country. The Company's focus is to assist healthcare providers with issues that they have pertaining to
data interoperability. SCWorx provides these solutions through a combination of direct sales and relationships with strategic partners.

 SCWorx's software solutions
are delivered to its clients within a fixed term period, typically a three-to-five-year contracted term, where such software is hosted
in SCWorx data centers (Amazon Web Service's "AWS" or RackSpace) and accessed by such clients through a secure connection
in a software as a service ("SaaS") delivery method.

 SCWorx currently sells its
solutions and services in the United States to hospitals and health systems through its direct sales force and its distribution and reseller
partnerships.

 We currently host our
solutions, serve our customers, and support our operations in the United States through an agreement with a third party hosting and infrastructure
provider, RackSpace. We incorporate standard IT security measures, including but not limited to; firewalls, disaster recovery, backup,
etc. Our operations are dependent upon the integrity, security and consistent operation of various information technology systems and
data centers that process transactions, communication systems and various other software applications used throughout our operations.
Disruptions in these systems could have an adverse impact on our operations. We could encounter difficulties in developing new systems
or maintaining and upgrading existing systems. Such difficulties could lead to significant expenses or to losses due to disruption in
our business operations.

 In addition, our information
technology systems are subject to the risk of infiltration or data theft. The techniques used to obtain unauthorized access, disable or
degrade service, or sabotage information technology systems change frequently and may be difficult to detect or prevent over long periods
of time. Moreover, the hardware, software or applications we develop or procure from third parties may contain defects in design or manufacture
or other problems that could unexpectedly compromise the security of our information systems. Unauthorized parties may also attempt to
gain access to our systems or facilities through fraud or deception aimed at our employees, contractors or temporary staff. In the event
that the security of our information systems is compromised, confidential information could be misappropriated, and system disruptions
could occur. Any such misappropriation or disruption could cause significant harm to our reputation, lead to a loss of sales or profits
or cause us to incur significant costs to reimburse third parties for damages.

 Critical Accounting Policies and Estimates

 Management's discussion
and analysis of our consolidated financial condition and results of operations are based upon our consolidated financial statements. These
consolidated financial statements have been prepared in conformity with generally accepted accounting principles ("GAAP")
in the United States which requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues
and expenses, and related disclosure of contingent assets and liabilities. By their nature, these estimates and judgments are subject
to an inherent degree of uncertainty. We evaluate our estimates based on our historical experience and various other assumptions that
are believed to be reasonable under the circumstances. These estimates relate to revenue recognition, the assessment of recoverability
of goodwill and intangible assets, the assessment of useful lives and the recoverability of property, plant and equipment, the allowances
for credit losses, the valuation and recognition of stock-based compensation expense, recognition and measurement of deferred income tax
assets and liabilities, the assessment of unrecognized tax benefits, equity of convertible debt, and others. Actual results could differ
from those estimates, and material effects on our consolidated operating results and consolidated financial position may result. Refer
to Note 3, Summary of Significant Accounting Policies, in the accompanying consolidated financial statements, for a full description of
our accounting policies.

 Basis of Presentation

financial statements have been prepared in accordance with GAAP and the rules and regulations of the U.S. Securities and Exchange Commission
("SEC"). The accompanying consolidated financial statements include the accounts of SCWorx and its wholly-owned subsidiaries.
All material intercompany balances and transactions have been eliminated in consolidation.

 Principles of Consolidation

financial statements include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany balances and transactions
have been eliminated in consolidation.

 Cash

 Cash is maintained with various
financial institutions. Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash
deposits. Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to $250,000.

 Fair Value of Financial Instruments

 Management applies fair value
accounting for significant financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed
at fair value in the consolidated financial statements. Management defines fair value as the price that would be received from selling
an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining
the fair value measurements for assets and liabilities, which are required to be recorded at fair value, management considers the principal
or most advantageous market in which we would transact and the market-based risk measurements or assumptions that market participants
would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair
value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and
bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:
Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Observable inputs other than quoted prices in
active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets,
or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or
liabilities. Level 3 - Inputs that are generally unobservable and typically reflect management's estimate of assumptions that market
participants would use in pricing the asset or liability.

 Concentration of Credit and Other Risks

 Financial instruments that
potentially subject our company to significant concentrations of credit risk consist principally of cash, accounts receivable and warrants.
We believe that any concentration of credit risk in its accounts receivable is substantially mitigated by our evaluation process, relatively
short collection terms and the high level of credit worthiness of its customers. We perform ongoing internal credit evaluations of its
customers' financial condition, obtain deposits and limit the amount of credit extended when deemed necessary but generally require
no collateral.

 Significant customers are those
which represent more than 10% of the Company's revenue for each period presented, or the Company's accounts receivable balance
as of each respective balance sheet date. For each significant customer, revenue as a percentage of total revenue and accounts receivable
as a percentage of total net accounts receivable are as follows:

 Revenue

 Accounts Receivable

 Customers

 2024

 2023

 2024

 2023

 Customer A

 %

 %

 %

 %

 Customer B

 %

 %

 %

 %

 Customer C

 %

 %

 %

 %

 Customer D

 %

 %

 -
 %

 %

 Customer E

 -
 %

 %

 -
 %

 %

 Customer F

 %

 %

 %

 -
 %

 Allowance for Credit Losses

 Accounts receivable are comprised
of amounts billed and currently due from customers. Accounts receivable are amounts related to any unconditional right the Company has
for receiving consideration and are presented as accounts receivable in the consolidated balance sheets. The Company maintains an allowance
for credit losses for estimated losses resulting from the inability of our customers to make required payments. The Company employs an
expected credit loss model utilizing historical loss rates and historical trends in credit quality indicators (e.g., delinquency, risk
ratings), adjusted to reflect current economic conditions and knowledge or customer relationships.

 Management considers the following
factors when determining the collectability of specific customer accounts: customer creditworthiness, past transaction history with the
customer, current industry trends, changes in customer payment terms, and specific customer situations. The Company's normal collection
cycle ranges between thirty and 60 days. Estimated uncollectible amounts are charged to earnings and a credit to a valuation allowance.
Balances which remain outstanding after reasonable collection efforts are written off through a charge to the valuation allowance and
a credit to accounts receivable The Company recorded an allowance for credit losses of $20,000 as of December 31, 2024. The Company has
assessed all receivables are collectable and did not record an allowance for credit losses as of December 31, 2023.

 Leases

 We determine if an arrangement
is a lease at inception. The current portion of lease obligations are included in accounts payable and accrued liabilities on the consolidated
balance sheets. Right-of-use ("ROU") assets represent our right to use an underlying asset for the lease term, and lease liabilities
represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement
date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our
incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.
Our lease terms may include options to extend or terminate the lease, which are included in the lease ROU asset when it is reasonably
certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
We have lease agreements with lease components only, none with non-lease components, which are generally accounted for separately.

 Goodwill and Identified Intangible Assets

 Goodwill

 Goodwill is recorded as the
difference between the aggregate consideration paid for an acquisition and the fair value of the net tangible and identified intangible
assets acquired under a business combination. Goodwill also includes acquired assembled workforce, which does not qualify as an identifiable
intangible asset. Management reviews impairment of goodwill annually in the fourth quarter, or more frequently if events or circumstances
indicate that the goodwill might be impaired. We first assess qualitative factors to determine whether it is necessary to perform the
quantitative goodwill impairment test. If, after assessing the totality of events or circumstances, we determine that it is not more likely
than not that the fair value of a reporting unit is less than its carrying amount, then the quantitative goodwill impairment test is unnecessary.

 For further discussion of goodwill,
refer to Note 5, Goodwill.

 Revenue Recognition

 We recognize revenue in accordance
with Topic 606 to depict the transfer of promised goods or services in an amount that reflects the consideration to which an entity expects
to be entitled in exchange for those goods or services. To determine revenue recognition for arrangements within the scope of Topic 606
we perform the following steps:

 Step 1: Identify the contract(s) with a customer

 Step 2: Identify the performance obligations in the contract

 Step 3: Determine the transaction price

 Step 4: Allocate the transaction price to the performance obligations in the contract

 Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation

 We follow the accounting revenue
guidance under Topic 606 to determine whether contracts contain more than one performance obligation. Performance obligations
are the unit of accounting for revenue recognition and generally represent the distinct goods or services that are promised to the customer.

 Management has identified the
following performance obligations in our contracts with customers:

 1.

 Data Normalization: which includes data preparation, product and vendor mapping, product categorization, data enrichment and other data related services,

 2.

 Software-as-a-service ("SaaS"): which is generated from clients' access of and usage of our hosted software solutions on a subscription basis for a specified contract term, which is usually annually. In SaaS arrangements, the client cannot take possession of the software during the term of the contract and generally has the right to access and use the software and receive any software upgrades published during the subscription period,

 3.

 Maintenance: which includes ongoing data cleansing and normalization, content enrichment, and optimization, and

 4.

 Professional Services: mainly related to specific customer projects to manage and/or analyze data and review for cost reduction opportunities.

 A contract will typically include
Data Normalization, SaaS and Maintenance, which are distinct performance obligations and are accounted for separately. The transaction
price is allocated to each separate performance obligation on a relative stand-alone selling price basis. Significant judgement is required
to determine the stand-alone selling price for each distinct performance obligation and is typically estimated based on observable transactions
when these services are sold on a stand-alone basis. At contract inception, an assessment of the goods and services promised in the contracts
with customers is performed and a performance obligation is identified for each distinct promise to transfer to the customer
a good or service (or bundle of goods or services). To identify the performance obligations, management considers all the goods or
services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. Revenue
is recognized when the performance obligation has been met. We consider control to have transferred upon delivery because we have
a present right to payment at that time, we have transferred use of the good or service, and the customer is able to direct the use of,
and obtain substantially all the remaining benefits from, the good or service.

 Our SaaS and Maintenance contracts
typically have termination for convenience without penalty clauses and accordingly, are generally accounted for as month-to-month agreements.
If it is determined that we have not satisfied a performance obligation, revenue recognition will be deferred until the performance obligation
is deemed to be satisfied.

 Revenue recognition for our
performance obligations are as follows:

 Data Normalization and Professional Services

 Our Data Normalization and
Professional Services are typically fixed fee. When these services are not combined with SaaS or Maintenance revenues as a single unit
of accounting, these revenues are recognized as the services are rendered and when contractual milestones are achieved and accepted by
the customer.

 SaaS and Maintenance

 SaaS and Maintenance revenues
are recognized ratably over the contract terms beginning on the commencement date of each contract, which is the date on which our service
is made available to customers.

 Some contracts have payment
terms that differ from the timing of revenue recognition, which requires us to assess whether the transaction price for those contracts
include a significant financing component. We have elected the practical expedient that permits an entity to not adjust for the effects
of a significant financing component if it expects that at the contract inception, the period between when the entity transfers a promised
good or service to a customer and when the customer pays for that good or service will be one year or less. We do not maintain contracts
in which the period between when the entity transfers a promised good or service to a customer and when the customer pays for that good
or service exceeds the one-year threshold.

 As of December 31, 2024, we
had $354,083 of remaining performance obligations recorded as deferred revenue. We expect to recognize sales relating to these existing
performance obligations of during 2025.

 Costs to Fulfill a Contract

 Costs to fulfill a contract
typically include costs related to satisfying performance obligations as well as general and administrative costs that are not explicitly
chargeable to customer contracts. These expenses are recognized and expensed when incurred in accordance with Accounting Standard Codification
("ASC") 340-40.

 Cost of Revenue

 Cost of revenues primarily
represent data center hosting costs, consulting services and maintenance of our large data array that were incurred in delivering professional
services and maintenance of our large data array during the periods presented.

 Contract Balances

 Contract assets arise when
the revenue associated prior to our unconditional right to receive a payment under a contract with a customer ( i.e., unbilled revenue)
and are derecognized when either it becomes a receivable or the cash is received. There were no contract assets as of December 31, 2024
and 2023.

 Contract liabilities arise
when customers remit contractual cash payments in advance of our company satisfying our performance obligations under the contract and
are derecognized when the revenue associated with the contract is recognized when the performance obligation is satisfied. Deferred revenue
for contract liabilities were $354,083 and $378,583 as of December 31, 2024 and 2023, respectively.

 Income Taxes

 Our company converted to a
corporation from a limited liability company during 2018.

 We use the asset and liability
method of accounting for income taxes in accordance with ASC Topic 740, "Income Taxes." Under this method, income tax expense
is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary
differences resulting from matters that have been recognized in an entity's financial statements or tax returns. Deferred tax assets
and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences
are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the
results of operations in the period that includes the enactment date.

 Valuation allowances are provided
if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
During the year ended December 31, 2024, we evaluated available evidence and concluded that we may not realize all the benefits of our
deferred tax assets; therefore, a valuation allowance was established for our deferred tax assets.

 ASC Topic 740-10-30 clarifies
the accounting for uncertainty in income taxes recognized in an enterprise's financial statements and prescribes a recognition threshold
and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a
tax return. ASC Topic 740-10-40 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods,
disclosure, and transition. We have no material uncertain tax positions for any of the reporting periods presented.

 On December 22, 2017, the Tax
Cuts and Jobs Act of 2017, (the "Tax Act") was enacted. The Tax Act significantly revised the U.S. corporate income tax regime
by, including but not limited to, lowering the U.S. corporate income tax rate from 34% to 21% effective January 1, 2018, implementing
a territorial tax system, imposing a one-time transition tax on previously untaxed accumulated earnings and profits of foreign subsidiaries,
and creating new taxes on foreign sourced earnings. During the years ended December 31, 2024 and 2023, we completed the accounting for
tax effects of the Tax Act under ASC 740. There were no impacts to the years ended December 31, 2024 and 2023.

 Stock-based Compensation Expense

 The Company accounts for stock-based
compensation expense in accordance with the authoritative guidance on share-based payments. Under the provisions of the guidance, stock-based
compensation expense is measured at the grant date based on the fair value of the option or warrant using a Black-Scholes option pricing
model and is recognized as expense on a straight-line basis over the requisite service period, which is generally the vesting period.

 The authoritative guidance
also requires that the Company measure and recognize stock-based compensation expense upon modification of the term of stock award. The
stock-based compensation expense for such modification is accounted for as a repurchase of the original award and the issuance of a new
award.

 Calculating stock-based compensation
expense requires the input of highly subjective assumptions, including the expected term of the stock-based awards, stock price volatility,
and the pre-vesting option forfeiture rate. The Company estimates the expected life of options granted based on historical exercise patterns,
which are believed to be representative of future behavior. The Company estimates the volatility of the Company's common stock on
the date of grant based on historical volatility. The assumptions used in calculating the fair value of stock-based awards represent the
Company's best estimates, but these estimates involve inherent uncertainties and the application of management's judgment.
As a result, if factors change and the Company uses different assumptions, its stock-based compensation expense could be materially different
in the future. In addition, the Company is required to estimate the expected forfeiture rate and only recognize expense for those shares
expected to vest. The Company estimates the forfeiture rate based on historical experience of its stock-based awards that are granted,
exercised and cancelled. If the actual forfeiture rate is materially different from the estimate, stock-based compensation expense could
be significantly different from what was recorded in the current period. The Company also grants performance based restricted stock awards
to employees and consultants. These awards will vest if certain employee\consultant-specific or company-designated performance targets
are achieved. If minimum performance thresholds are achieved, each award will convert into a designated number of the Company's
common stock. If minimum performance thresholds are not achieved, then no shares will be issued. Based upon the expected levels of achievement,
stock-based compensation is recognized on a straight-line basis over the requisite service period. The expected levels of achievement
are reassessed over the requisite service periods and, to the extent that the expected levels of achievement change, stock-based compensation
is adjusted in the period of change and recorded on the statements of operations and the remaining unrecognized stock-based compensation
is recorded over the remaining requisite service period. Refer to Note 9, Stockholders' Equity, for additional detail.

 Loss Per Share

 We compute earnings (loss)
per share in accordance with ASC 260, "Earnings per Share" which requires presentation of both basic and diluted earnings
(loss) per share ("EPS") on the face of the income statement. Basic EPS is computed by dividing the loss available to common
shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect
to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock
using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares
assumed to be purchased from the exercise of stock options and warrants and the exercise of fully vested restricted stock units. Diluted
EPS excludes all dilutive potential shares if their effect is anti-dilutive. As of December 31, 2024 and 2023, we had 9,048,072 and 180,390,
respectively, common stock equivalents outstanding.

 Indemnification

 We provide indemnification
of varying scope to certain customers against claims of intellectual property infringement made by third parties arising from the use
of our software. In accordance with authoritative guidance for accounting for guarantees, we evaluate estimated losses for such indemnification.
We consider such factors as the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount
of loss. To date, no such claims have been filed against our company and no liability has been recorded in our financial statements.

 As permitted under Delaware
law, we have agreements whereby we indemnify our officers and directors for certain events or occurrences while the officer or director
is, or was, serving at our company's request in such capacity. The maximum potential amount of future payments we could be required
to make under these indemnification agreements is unlimited. In addition, we have directors' and officers' liability
insurance coverage that is intended to reduce our financial exposure and may enable us to recover any payments above the applicable policy
retention.

 Contingencies

 From time to time, we may be
involved in legal and administrative proceedings and claims of various types. We record a liability in our consolidated financial statements
for these matters when a loss is known or considered probable and the amount can be reasonably estimated. Management reviews these estimates
in each accounting period as additional information becomes known and adjusts the loss provision when appropriate. If the loss is not
probable or cannot be reasonably estimated, a liability is not recorded in the consolidated financial statements. If a loss is probable
but the amount of loss cannot be reasonably estimated, we disclose the loss contingency and an estimate of possible loss or range of loss
(unless such an estimate cannot be made). We do not recognize gain contingencies until they are realized. Legal costs incurred in connection
with loss contingencies are expensed as incurred. Refer to Note 8, Commitments and Contingencies, for further information.

 Use of Estimates

 The preparation of consolidated
financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and
disclosed in the consolidated financial statements and accompanying notes. The Company regularly evaluates estimates and assumptions related
to allowance for credit losses, the estimated useful lives and recoverability of long-lived assets, equity component of convertible debt,
stock-based compensation, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current
facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are
not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company's
estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will
be affected.

 Recently Issued Accounting Pronouncements

 From time to time, new accounting
pronouncements are issued by FASB that are adopted by the Company as of the specified effective date. If not discussed, management believes
that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company's financial
statements upon adoption.

 Results of Operations

 Year Ended December 31, 2024 Compared to
Year Ended December 31, 2023

 The following summary of our
results of operations should be read in conjunction with our consolidated financial statements for the years ended December 31, 2024 and
2023.

 Our operating results for
the years ended December 31, 2024 and 2023 are summarized as follows:

 Years ended

 2024

 2023

 Difference

 Revenue

 $
 2,989,599

 $
 3,804,943

 $
 (815,344
)

 Cost of revenues

 2,243,614

 2,535,865

 (292,251
)

 Operating expenses

 2,005,411

 2,719,740

 (714,329
)

 Other income (expense)

 123,201

 (2,530,482
)

 2,653,683

 Provision for income taxes

 -

 -

 -

 $
 (1,136,225
)

 $
 (3,981,144
)

 $
 2,844,919

 Revenues

 Revenue for the year ended
December 31, 2024 was $2,989,599, compared to $3,804,943 in revenue for the year ended December 31, 2023. This decrease was primarily
due to the expiration and non-renewal of certain customer contracts.

 Cost of Revenues

 Cost of revenues for the year
ended December 31, 2024 was $2,243,614, compared to $2,535,865 for the year ended December 31, 2023. The $292,251 decrease is primarily
related to a decrease in labor costs during the current year. Overall gross profit for the year ended December 31, 2024 decreased by approximately
41% from the prior year due to non-renewals of contracts outpacing cost reductions.

 Operating Expenses

 Operating
expenses decreased $714,329 to $2,005,411 for the year ended December 31, 2024, as compared to $2,719,740 in the same period of 2023.
This decrease was primarily due to decreases in non-cash stock compensation expense of approximately $361,000, salaries and wages of $43,000,
and bad debt expense of approximately $23,000, partially offset by an increase in Accounting fees of approximately $89,000 and legal and
professional fees of approximately $53,000. Accounting fees increased
in the current year due to the Company's change of independent registered accounting firm. Legal fees increased during the current
year as the company strived to settle the remaining pending litigation matters. The Company expects neither of these increases will continue
into 2025

 Other income of $123,201 during
the year ended December 31, 2024 consisted of a gain on forgiveness of payables of $227,402, partially offset by interest expense of $104,201.
We had other losses of $2,530,482 during the year ended December 31, 2023 consisting of write-down of goodwill of $2,524,034 and interest
expense of $6,448.

 Liquidity and Capital Resources

 Going Concern

 As of December 31, 2024, we
had only limited cash on hand, a working capital deficit of $1,333,171 and accumulated deficit of $30,976,066. During the year ended December
31, 2024, we had a net loss of $1,136,225 and used $1,084,292 of cash in operations. We have historically incurred operating losses and
may continue to incur operating losses for the foreseeable future. We believe that these conditions raise substantial doubt about our
ability to continue as a going concern. This may hinder our ability to obtain financing or may force us to obtain financing on less favorable
terms than would otherwise be available. If we are unable to develop sufficient revenues and additional customers for our products and
services, we may not generate enough revenue to sustain our business, and we may fail, in which case our stockholders would suffer a total
loss of their investment. There can be no assurance that we will be able to continue as a going concern.

 Liquidity

 As of year-end, we experienced
a working capital deficiency, had limited cash on hand, and we are experiencing negative cash flows from operations. Consequently, we
had an immediate need for additional capital to fund our operations and the implementation of our business plan.

 Based on our current business
plan, if we had sufficient capital resources, we anticipate that our operating activities would use a net of approximately $70,000 in
cash per month over the next twelve months, or approximately $800,000.

 In order to remedy this liquidity
deficiency and fund the future growth of our business, we entered into a securities purchase agreement on January 17, 2025 for gross proceeds
of $1,500,000. We intend to utilize these funds to pursue growth through the expansion of our sales force, product offering and project
capabilities. However, there can be no guarantee of success, and any shortfall may impact our ability to raise additional funds if needed.

 Cash Flows

 Years ended

 2024

 2023

 Net cash used in operating activities

 $
 (1,084,292
)

 $
 (806,164
)

 Net cash provided by investing activities

 -

 Net cash provided by financing activities

 1,099,510

 483,138

 Change in cash

 $
 15,218

 $
 (158,026
)

 Our operations through December
31, 2024 have resulted in negative cash flows from operations of $1,084,292. We intend to use the additional capital raised during January
2025 to generate additional revenue through the acquisition of new customers, and believe we may begin to generate positive operating
cash flows by the end of 2025. However, there is no assurance we will be able to increase our revenue sufficiently so as to generate positive
operating cash flows within this time frame.

 Operating Activities

 Net cash used in operating
activities was approximately $1,084,000 for the year ended December 31, 2024, mainly related to the net loss of approximately $1,136,000,
a gain on forgiveness of accounts payable of $227,000, and a $93,000 increase in accounts receivable, partially offset by amortization
of discounts on debt agreements of $50,000, common stock issued for settlement of payables and legal settlements of $346,000, and a $39,000
decrease in accounts payable and accrued liabilities, and credit loss expense of $25,000.

 Net cash used in operating
activities was approximately $806,000 for the year ended December 31, 2023, mainly related to the net loss of $3,981,000, a decrease in
deferred revenue obligations of $201,000 and an increase in net accounts receivable of $17,000, partially offset by non-cash stock-based
compensation of $361,000 related to various equity awards to employees and non-employees, $48,000 in bad debt expense, a $26,000 decrease
in prepaid expenses and an increase of $434,000 in accounts payable and accrued liabilities.

 Investing Activities

 The Company did not have
any investing activities during the year ended December 31, 2024.

 The Company received $165,000
in investing activities during the year ended December 31, 2023 related to a potential reverse acquisition. Under the terms of the agreement,
all funds received by the Company were contributed upon the termination of the acquisition agreement.

 Financing Activities

 Net cash provided by financing
activities was approximately $1,100,000 for the year ended December 31, 2024, consisting of proceeds loans payable of $995,000, and the
sale of common stock of $168,000, partially offset by repayments of loans payable of $63,000.

 Net cash provided by financing
activities was $483,000 for the year ended December 31, 2023. This consisted of $573,000 in proceeds from a common stock placement and
$194,000 in proceeds from advances, partially offset by repayments of $194,000 in proceeds from advances, $57,000 in repayments on notes
payable and $32,000 in payments on shareholder advance.

 Contractual Cash Obligations

 Refer to Note 8, Commitments
and Contingencies, in the accompanying consolidated financial statements for additional detail.

 Off-Balance Sheet Arrangements

 As of December 31, 2024 and
2023, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.

 Item 7A. Quantitative and Qualitative Disclosures
About Market Risk

 We are a smaller reporting
company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

 Item 8. Financial Statements and Supplementary
Data

 The consolidated financial
statements are included in Part IV, Item 15 (a) (1) of this Report.

 Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure

 On May 3, 2024, the US Securities
and Exchange Commission ("Commission") entered an Order denying BF Borgers CPA PC ("BF Borgers") the privilege
of appearing or practicing before the Commission as an accountant. As a result, BF Borgers may not participate in or perform the audit
or review of financial information included in Commission filings, issue audit reports included in Commission filings, provide consents
with respect to audit reports, or otherwise appear or practice before the Commission. practicing before the SEC. As a result of the foregoing,
On May 7, 2024, the board of directors of the Company terminated BF Borgers as the Registrant's independent registered public accounting
firm. BF Borgers had audited the Company's financial statements since 2021.

 BF Borger's report on
the Company's consolidated financial statements for the fiscal year ended December 31, 2022 did not contain an adverse opinion or
disclaimer of opinion, nor was such report qualified or modified as to uncertainty, audit scope or accounting principle, except for an
explanatory paragraph relating to a substantial doubt regarding the Company's ability to continue as a going concern. During the
fiscal year ended December 31, 2022, and through May 7, 2024, there were no disagreements with BF Borgers on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to BF Borgers's satisfaction,
would have caused BF Borgers to make reference to the subject matter of the disagreement in connection with its report.

 During the fiscal year ended
December 31, 2022, and through May 7, 2024, there were no "reportable events" as defined under Item 304(a)(1)(v) of Regulation
S-K, except for material weaknesses in internal control over financial reporting.

 On May 16, 2024, the Company
appointed Astra Audit and Advisory, LLC ("Astra") as its new independent registered public accounting firm, effective immediately,
for the fiscal years ending December 31, 2023, and 2022. This appointment was authorized and approved by the Audit Committee of the Company's
Board of Directors.

 Item 9A. Controls and Procedures

 Management's Conclusions Regarding Effectiveness
of Disclosure Controls and Procedures

 Management conducted an evaluation
of the effectiveness of our "disclosure controls and procedures" ("Disclosure Controls"), as defined by Rules 13a-15(e) and
15d-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as of December 31, 2024, the
end of the period covered by this Annual Report on Form 10-K, as required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act. The
Disclosure Controls evaluation was done under the supervision and with the participation of management, including our Chief Executive
Officer and Chief Financial Officer, based on the 2013 framework and criteria established by the Committee of Sponsoring Organizations
of the Treadway Commission. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures. Accordingly,
even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based upon
this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, due to deficiencies caused by a lack of segregation
of duties, our Disclosure Controls were not effective as of December 31, 2024, such that the information required to be disclosed
by us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified
in the SEC's rules and forms and (ii) accumulated and communicated to our management, including our principal executive
and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding disclosure.

 Management Report on Internal Controls over
Financial Reporting

 Our management has identified
material weaknesses in our internal controls related to a lack of segregation of duties. Management continues to work with the Audit Committee
to discuss remediation efforts. Our management is currently considering looking for additional accounting and finance personnel to assist
in the remediation efforts.

 Notwithstanding the foregoing,
our management, including our Chief Executive Officer and Chief Financial Officer, have concluded that the consolidated financial statements
included in this Annual Report on Form 10-K present fairly, in all material respects, our financial position, results of operations and
cash flows for the periods presented in conformity with accounting principles generally accepted in the United States.

 We may in the future identify
other material weaknesses or significant deficiencies in connection with our internal control over financial reporting. Material weaknesses
and significant deficiencies that may be identified in the future will need to be addressed as part of our quarterly and annual evaluations
of our internal controls over financial reporting under Sections 302 and 404 of the Sarbanes-Oxley Act. Any future disclosures of
a material weakness, or errors as a result of a material weakness, could result in a negative reaction in the financial markets and a
decrease in the price of our common stock.

 Changes in Internal Control over Financial
Reporting.

 None

 Item 9B. Other Information

 None.

 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent
Inspections.

 Not applicable.

 Item 10. Directors, Executive Officers and
Corporate Governance

 The following table presents
information with respect to our officers, directors and significant employees as of the date of filing of this Report:

 Name

 Age

 Position(s)

 Timothy A. Hannibal

 President & Chief Executive Officer, Director

 Chief Financial Officer

 Michael Burke

 Troy Kirchenbauer

 Vincent Matozzo

 Background of Officers and Directors

 The following is a brief account
of the education and business experience during at least the past five years of our officers and directors, indicating each person's
principal occupation during that period, and the name and principal business of the organization in which such occupation and employment
were carried out.

 Timothy A. Hannibal

 Mr. Hannibal is a seasoned
technology executive and entrepreneur, with nearly 30 years' experience in SaaS and cloud technology, driving revenue, go-to-market strategies,
business development and mergers and acquisitions. Mr. Hannibal joined the Company in January 2019 and currently serves as its
Chief Executive Officer. Prior to joining the Company, Mr. Hannibal was an employee at Primrose Solutions (the predecessor to SCWorx) which
he joined in September of 2016. At Primrose, Mr. Hannibal was responsible for overseeing marketing, sales and operations, including
executing the Company's business plan. Mr. Hannibal has a successful track record of growth and management at both startup
and national companies.

 Prior to joining Primrose,
Mr. Hannibal was the President and CEO of VaultLogix for thirteen years, a company he founded. VaultLogix was a private equity
sponsored leading SaaS company in the cloud backup industry before being acquired by J2 Global, a publicly traded technology company ($3.2b
market cap) focused on cloud services and digital media.

 Mr. Kohler was appointed CFO
on November 1, 2020, at which time Mr. Hannibal resigned as Interim CFO. Mr. Kohler has over 15 years of experience serving in a wide
variety roles in the finance and accounting sectors. Mr. Kohler is the founder and CEO of Kohler Consulting, Inc., which he founded in
2012. The firm, through Mr. Kohler, provides outsourced CFO and advisory services to private and public companies, with a focus on small
cap and start-up businesses.

 Michael Burke

 Mr. Burke was formerly the
Executive Vice President and CFO of Prisma Health from 2018-2022. Prior to Prisma Health Mr. Burke served as CFO of NYU Langone Medical
Center from December 2008 to July 2018 and formerly served as CFO to Tufts New England Medical Center from 2004 to 2008 and was a practicing
CPA in New York through 2012. His experience with disaster recovery, large financial system integration projects, and mergers and acquisitions
at each institution provides valuable insights to clients as they manage in this ever-changing healthcare environment. Prior to Tufts,
Mr. Burke worked as the Chief Financial Officer of Duke University Hospital and was also a Senior Manager at KPMG. Mr. Burke graduated
from St. John Fisher University with a BS, Accounting.

 Troy Kirchenbauer

 Mr. Kirchenbauer is a seasoned
executive with over two decades of experience driving digital transformation, product innovation, and data-driven decision-making in the
healthcare industry. Throughout his career, he has been at the forefront of creating technology solutions that address complex challenges
in supply chain management, business intelligence, and advanced analytics. Mr. Kirchenbauer is the founder of TWK Ventures LLC, where
he leads a healthcare data and analytics consulting practice. From 2018 to July 2023, he served as Senior Vice President of Digital Supply
at Vizient Inc., where he played a key role in developing a digital ecosystem to advance supply chain automation and analytics solutions.

 As Senior Vice President of
Digital Supply Chain at Vizient, Mr. Kirchenbauer was instrumental in the development of a digital ecosystem designed to enhance supply
chain automation and provide advanced analytics solutions. His leadership played a pivotal role in managing over $230 billion in healthcare
supply spend, consolidating disparate data systems, and building e-commerce platforms that significantly improved operational efficiency
for healthcare organizations. Mr. Kirchenbauer's work at Aptitude, where he built a cutting-edge B2B marketplace, further showcases
his capability in using data and analytics to drive substantial business growth, delivering over $50 million in new revenue within a few
years.

 Mr. Kirchenbauer has a deep
understanding of the nuances in healthcare supply chains and expertise in building data management systems and analytics platforms. His
commitment to leveraging data for business transformation makes him an ideal leader for organizations focused on delivering innovative
analytics solutions that empower healthcare providers to make smarter, data-driven decisions.

 Mr. Kirchenbauer graduated
from Texas A&M University of Commerce and has an MBA from the University of Dallas.

 Vincent Matozzo

 Mr. Matozzo is an innovative
strategist and leader recognized for driving results through effective supply chain strategies and product innovation. He is a dynamic
leader who drives change and delivers results for clients, corporations, and consortiums. He is passionate about automating processes
and delivering a superior customer experience while enabling teams. Mr. Matozzo is a subject matter expert in Lean and Agile process modeling,
with experience in all aspects of pre-award modeling to post-award monitoring, requisitioning to reimbursement- including data visualization
and procurement. He has expertise in technical execution and supply chain innovation and enjoys deploying initiatives in technology development
to continuously improve interoperability and operations. Mr. Matozzo is a featured speaker and expert in supply chain organizational development
and business continuity. He is skilled in designing and implementing innovative business models that produce dramatic results. Mr. Matozzo
has served in various supply chain capacities across manufacturing, aerospace, and healthcare at organizations including Yale New Haven
Health, Vizient, and NYU Langone Health.

 Mr. Matozzo has served as the
CEO and Managing Partner of Paradigm Venture Group since 2020. Prior to that, he served as Director of Strategic Sourcing and Procurement
Operations for Yale New Haven Health from 2019 - 2021

 Code of Business Conduct and Ethics

 We have adopted a Code of Business
Conduct and Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller
or persons performing similar functions and also to other employees. Our Code of Business Conduct can be found on our website at www. SCWorx.com.

 Family Relationships

 There are no family relationships
between any of our directors, executive officers or significant employees.

 Involvement in Certain Legal Proceedings

 During the past ten years,
none of our current officers, directors, significant employees or control persons have been involved in any legal proceedings as described
in Item 401(f) of Regulation S-K.

 Board Composition

 The Board of Directors currently
consists of four directors. Each director will serve in office until the next annual meeting of stockholders or until their successors
have been duly elected and qualified, or until the earlier of their death, resignation or removal.

 Our certificate of incorporation
provides that that the number of authorized directors will be determined in accordance with our bylaws. Our bylaws provide that the number
of authorized directors shall be determined from time to time by a resolution of the Board of Directors, and any vacancies in our board
and newly created directorships may be filled only by our Board of Directors.

 Term of Office

 All of our directors are elected
on an annual basis to serve until the next annual meeting of shareholders or until the earlier of their death, resignation or removal.

 Committees of the Board of Directors

 Our Board of Directors has
established an audit committee, a compensation committee and a nominating and governance committee. Each of these committees operates
under a charter that has been approved by our Board of Directors.

 Audit Committee

 We have a separately-designated
standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The Audit Committee has authority to
review our financial records, engage with our independent auditors, recommend policies with respect to financial reporting to the Board
of Directors and investigate all aspects of our business. The current members of our Audit Committee are Mr. Burke, Mr. Kirchenbauer and
Mr. Matozzo. Mr. Burke is the Chairman of the Audit Committee, and our board of directors has determined that Mr. Burke is an "Audit
Committee financial expert" and that all members of the Audit Committee are "independent" as defined by the rules of
the SEC and the Nasdaq rules and regulations. The Audit Committee operates under a written charter that is posted on our website at www.scworx.com.

 Compensation Committee

 The Compensation Committee
oversees our executive compensation and recommends various incentives for key employees to encourage and reward increased corporate financial
performance, productivity and innovation. The current members of our Compensation Committee are Mr. Kirchenbauer, Mr. Burke and Mr. Matozzo.
Mr. Kirchenbauer is the current Chairman of the Compensation Committee and our board of directors has determined that all of the members
of the Compensation Committee are "independent" as defined by the rules of the SEC and Nasdaq rules and regulations. The Compensation
Committee operates under a written charter that is posted on our website at www.scworx.com.

 Nominating and Governance Committee

 The Nominating and Corporate
Governance Committee identifies and nominates candidates for membership on the Board of Directors, oversees Board of Directors'
committees, advises the Board of Directors on corporate governance matters and any related matters required by the federal securities
laws. The current members of our Nominating and Corporate Governance Committee are Mr. Matozzo, Mr. Burke, and Mr. Kirchenbauer. Mr. Matozzo
is the Chairman of the Nominating and Corporate Governance Committee. Our board of directors has determined that all of the members of
the Nominating and Corporate Governance Committee are "independent" as defined by Nasdaq rules and regulations.

 The Nominating and Governance
Committee will consider stockholder recommendations for candidates for the Board of Directors.

 Our bylaws provide that, in
order for a stockholder's nomination of a candidate for the board to be properly brought before an annual meeting of the stockholders,
the stockholder's nomination must be delivered to the Secretary of our company no later than 120 days prior to the one-year anniversary
date of the prior year's annual meeting.

 Charters for all three committees
are available on our website at www. SCWorx.com.

 Changes in Nominating Procedures

 None.

 Section 16(a) Beneficial Ownership Reporting
Compliance

 Section 16(a) of the Exchange
Act requires our executive officers and directors and persons who beneficially own more than 10% of a registered class of our equity securities
to file with the SEC initial statements of beneficial ownership, statements of changes in beneficial ownership and annual statements of
changes in beneficial ownership with respect to their ownership of our securities, on Forms 3, 4 and 5, respectively. Executive officers,
directors and greater than 10% shareholders are required by SEC regulations to furnish us with copies of all Section 16(a) reports they
file.

 Based solely on our review
of the copies of such reports received by us, and on written representations by our officers and directors regarding their compliance
with the applicable reporting requirements under Section 16(a) of the Exchange Act, and without conducting an independent investigation
of our own, we believe that with respect to the fiscal year ended December 31, 2024, our officers and directors, and all of the persons
known to us to beneficially own more than 10% of our common stock filed all required reports on a timely basis.

 Item 11. Executive Compensation

 The following summary compensation
table sets forth information concerning compensation for services rendered in all capacities during 2024 and 2023 awarded to, earned by
or paid to our executive officers.

 Non-Equity

 Stock

 Option

 Incentive
 Plan

 All Other

 Fiscal

 Salary

 Bonus

 Awards

 Awards

 Compensation

 Compensation

 Total

 Name and Principal Position

 Year

 $

 ($)

 ($)

 ($)

 ($)

 ($)

 ($)

 Timothy Hannibal (1)

 2024

 250,000

 -

 -

 -

 -

 51,200

 301,200

 President, Chief Executive Officer and Director

 2023

 250,000

 -

 -

 -

 -

 27,445

 277,445

 Chris Kohler (2)

 2024

 108,000

 -

 -

 -

 -

 -

 108,000

 Chief Financial Officer

 2023

 108,000

 -

 -

 -

 -

 4,000

 112,000

 (1)
 Mr.
Hannibal was hired as Chief Revenue Officer on February 1, 2019 and was appointed Interim Chief Financial Officer on June 10, 2020. On
August 10, 2020 Mr. Hannibal was appointed President and Chief Operating Officer. On May 28, 2021 Mr. Hannibal was appointed President
and Chief Executive Officer.

 (2)
 Mr.
Kohler has served as Chief Financial Officer since November 1, 2020.

 Directors' Compensation

 The following summary compensation
table sets forth information concerning compensation for services rendered in all capacities during 2024 and 2023 awarded to, earned by
or paid to our directors. The value attributable to any stock option awards reflects the grant date fair values of stock awards calculated
in accordance with ASC Topic 718.

 Fees

 Non-Equity

 Earned or

 Incentive

 Paid in

 Stock

 Option

 Plan

 All Other

 Fiscal

 Cash

 Bonus

 Awards

 Awards

 Compensation

 Compensation

 Total

 Name and Principal Position

 Year

 ($)

 ($)

 ($)

 ($)

 ($)

 ($)

 ($)

 Michael Burke (1)

 2024

 -

 -

 -

 -

 -

 -

 -

 Chairman and Director

 2023

 -

 -

 -

 -

 -

 -

 -

 Vincent Matozzo (2)

 2024

 -

 -

 -

 -

 -

 -

 -

 2023

 -

 -

 -

 -

 -

 -

 -

 Troy Kirchenbauer (3)

 2024

 -

 -

 -

 -

 -

 -

 -

 2023

 -

 -

 -

 -

 -

 -

 -

 Alton Irby (4)

 2024

 -

 -

 -

 -

 -

 -

 -

 Former Chairman and Director

 2023

 -

 -

 -

 -

 -

 -

 -

 Steven Horowitz (5)

 2024

 -

 -

 -

 -

 -

 -

 -

 Former Director

 2023

 -

 -

 -

 -

 -

 -

 -

 John Ferrara (6)

 2024

 -

 -

 -

 -

 -

 -

 -

 Former Director

 2023

 -

 -

 27,977

 -

 -

 -

 27,977

 (1)
 Michael
Burke was appointed as a Director on October 31, 2024.

 (2)
 Vincent
Matozzo was appointed as a Director on August 17, 2023. Effective May 15, 2024, Mr Matozzo returned all previously received stock grants
to the Company.

 (3)
 Troy
Kirchenbauer was appointed as a Director on October 31, 2024.

 (4)
 Alton
Irby was appointed as a Director on March 16, 2021. Effective May 15, 2024, Mr Irby returned all previously received stock grants to
the Company. Mr Irby resigned as a Director effective October 31, 2024.

 (5)
 Steven
Horowitz was appointed as a Director on August 11, 2021. Effective May 15, 2024, Mr Horowitz returned all previously received
stock grants to the Company. Mr Horowitz resigned as a Director effective October 31, 2024.

 (6)
 John
Ferrara was appointed as a Director on August 11, 2021. Mr Ferrera resigned as a Director effective August 18, 2023.

 Item 12. Security Ownership of Certain Beneficial
Owners and Management and Related Stockholder Matters

 The following table sets forth
certain information regarding beneficial ownership of our common stock as of March 31, 2025: (i) by each of our directors, (ii) by each
of the named executive officers, (iii) by all of our executive officers and directors as a group, and (iv) by each person or entity known
by us to beneficially own more than five percent (5%) of any class of our outstanding shares. As of March 31, 2025, there were 2,105,755
shares of our common stock outstanding.

 Amount and Nature of Beneficial Ownership as
of March 31, 2025 (1)

 Common

 Preferred

 Options/

 Percentage

 Named Executive Officers and Directors

 Stock

 Stock

 Warrants

 Total

 Ownership

 Current

 Timothy Hannibal

 54,788

 -

 -

 54,788

 2.5
 %

 6,983

 -

 -

 6,983

 *
 %

 Michael Burke

 -

 -

 -

 -

 *
 %

 Vincent Matozzo

 -

 -

 -

 -

 *
 %

 Troy Kirchenbauer

 -

 -

 -

 -

 *
 %

 Directors and Executive Officers as a Group (5 persons)

 61,771

 -

 -

 61,771

 2.5
 %

 Former

 Alton Irby

 -

 -

 -

 -

 *
 %

 Steven Horowitz

 -

 -

 -

 -

 *
 %

 John Ferrera

 13,055

 -

 -

 -

 *
 %

 *
 Represents
beneficial ownership of less than 1% of our outstanding stock.

 (1)
 In
determining beneficial ownership of our common stock as of a given date, the number of shares shown includes shares of common stock that
may be acquired upon the exercise of stock options within 60 days of March 31, 2025. In determining the percent of common stock
owned by a person or entity on March 31, 2025, (a) the numerator is the number of shares of the class beneficially owned by such
person or entity, including shares which may be acquired within 60 days of March 31, 2025 upon the exercise of stock options, and
(b) the denominator is the sum of (i) the total shares of common stock outstanding on March 31, 2025 and (ii) the total number
of shares that the beneficial owner may acquire upon exercise of stock options within 60 days March 31, 2025. Unless otherwise indicated,
the address of each of the individuals and entities named below is c/o SCWorx Corp., 100 S Ashley Dr, Suite 100 Tampa, FL 33602.

 Item 13. Certain Relationships and Related
Transactions, and Director Independence

 Certain Relationships and Related Transactions

 At December 31, 2024 and 2023
Company had aged payables that were due to officers in the amount of $149,838.

 During September 2021, the
Company's former CEO (also a significant shareholder) advanced $100,000 in cash to the Company for short term capital requirements.
This amount is non-interest bearing and payable upon demand. The Company had balances of $67,622 included in shareholder advance on the
Company's consolidated balance sheets as of December 31, 2024 and 2023.

 Between January 18, 2024 and
July 11, 2024, the Company's CFO advanced an aggregate $128,479 in cash to the Company for short term capital requirements. As of
December 31, 2024, all advanced amounts have been repaid.

 Director Independence

 The rules of the Nasdaq Capital
Market, or the Nasdaq Rules, require a majority of a listed company's board of directors to be composed of independent directors
within one year of listing. In addition, the Nasdaq Rules require that, subject to specified exceptions, each member of a listed company's
audit, compensation and nominating and governance committees be independent. Under the Nasdaq Rules, a director will qualify as an independent
director only if, in the opinion of our Board of Directors, that person does not have a relationship that would interfere with the exercise
of independent judgment in carrying out the responsibilities of a director. The Nasdaq Rules also require that audit committee members
satisfy independence criteria set forth in Rule 10A-3 under the Exchange Act, as amended. In order to be considered independent for purposes
of Rule 10A-3, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit
committee, the board of directors, or any other board committee, accept, directly or indirectly, any consulting, advisory, or other compensatory
fee from the listed company or any of its subsidiaries or otherwise be an affiliated person of the listed company or any of its subsidiaries.
In considering the independence of compensation committee members, the Nasdaq Rules require that our Board of Directors must consider
additional factors relevant to the duties of a compensation committee member, including the source of any compensation we pay to the director
and any affiliations with our company.

 Our Board of Directors undertook
a review of the composition of our Board of Directors and its committees and the independence of each director. Based upon information
requested from and provided by each director concerning his background, employment and affiliations, including family relationships, our
Board of Directors has determined that each of our directors other than Tim Hannibal, is independent based on the definition of independence
in the Nasdaq listing standards.

 Item 14. Principal Accountant Fees and Services

 The Audit Committee of the
Board of Directors has selected Astra Audit and Advisory, LLC ("Astra"), an independent registered public accounting firm,
to audit our consolidated financial statements for the years ended December 31, 2024 and 2023.

 BF Borgers CPA PC served as
our independent registered public accounting firm from April 2021 through May 2024 at which time the US Securities and Exchange Commission
("Commission") entered an Order denying BF Borgers CPA PC ("BF Borgers") the privilege of appearing or practicing
before the Commission as an accountant. The Company subsequently terminated BF Borgers as its independent registered public accounting
firm.

 Principal Accountant Fees and Services

 During 2024 and 2023, fees
for services provided by Astra Audit and Advisory, LLC were as follows:

 For the year ended

 2024

 2023

 Audit Fees

 $
 179,114

 $
 -

 Audit-Related Fees

 -

 -

 Tax Fees

 -

 -

 All Other Fees

 -

 -

 Total

 $
 179,114

 $
 -

 During 2024 and 2023, fees
for services provided by BF Borgers CPA PC were as follows:

 For the year ended

 2024

 2023

 Audit Fees

 $
 99,000

 $
 192,500

 Audit-Related Fees

 -

 -

 Tax Fees

 -

 -

 All Other Fees

 -

 -

 Total

 $
 99,000

 $
 192,500

 Audit Fees

 Audit fees for 2024 and 2023
include amounts related to the audit of our annual consolidated financial statements and quarterly review of the consolidated financial
statements included in our Quarterly Reports on Form 10-Q.

 Audit Related Fees

 Audit Related Fees include
amounts related to accounting consultations and services.

 Tax Fees

 Tax Fees include fees billed
for tax compliance, tax advice and tax planning services.

 All Other Fees

 The Audit Committee pre-approves
all audit and permissible non-audit services provided by our independent registered public accounting firm. These services may include
audit services, audit-related services, tax and other services. Pre-approval is generally provided for up to one year, and any pre-approval
is detailed as to the particular service or category of services. The independent registered public accounting firm and management are
required to periodically report to the Audit Committee regarding the extent of services provided by the independent registered public
accounting firm in accordance with this pre-approval, and the fees for the services performed to date. The Audit Committee may also pre-approve
particular services on a case-by-case basis.

 Item 15. Exhibits and Financial Statement Schedules

 (a)

 The following documents are filed as a part of this report:

 (1)

 Financial Statements. See Index to Consolidated Financial Statements, which appears on page F-1 hereof. The consolidated financial statements listed in the accompanying Index to Consolidated Financial Statements are filed herewith in response to this Item.

 (2)

 Financial Statement Schedules. Schedules are omitted because the required information is not present or is not present in amounts sufficient to require submission of the schedule or because the information required is given in the consolidated financial statements or the notes thereto.

 (3)

 Exhibits. The information required by this Item 15 is incorporated by reference to the Index to Exhibits accompanying this Annual Report on Form 10-K.

 SIGNATURES

 Pursuant to the requirements
of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

 By:

 /s/ Timothy Hannibal

 Timothy Hannibal

 President, Chief Executive Officer

 By:

 /s/ Chris Kohler

 Chief Financial Officer

 Pursuant to the requirements
of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant in the
capacities and on the dates indicated.

 /s/ Timothy Hannibal

 Timothy Hannibal

 President, Chief Executive Officer, Director

 /s/ Chris Kohler

 Chief Financial Officer

 /s/ Michael Burke

 Michael Burke,

Chairman

 /s/ Vincent Matazzo

 Vincent Matazzo

 /s/ Troy Kirchenbauer

 Trou Kirchenbauer

 Index to Consolidated Financial Statements

 Consolidated Financial Statements

 Page
 Number

 Report of Independent Registered Accounting Firm (PCAOB ID Number 6920)

 Consolidated balance sheets as of December 31, 2024 and 2023

 Consolidated statements of operations for the years ended December 31, 2024 and 2023

 Consolidated statements of changes in stockholders' equity for the years ended December 31, 2024 and 2023

 Consolidated statements of cash flows for the years ended December 31, 2024 and 2023

 Notes to consolidated financial statements

 F- 1

 Report
of Independent Registered Public Accounting Firm

 To the Board of Directors and

 Stockholders of SCWorx Corp.

 Opinion on the Financial Statements

 We have audited the accompanying consolidated
balance sheets of SCWorx Corp. (the Company) as of December 31, 2024 and 2023, and the related consolidated statements of operations,
changes in stockholders' equity, and cash flows for each of the years in the two-year period ended December 31, 2024, and the related
notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material
respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows
for each of the years in the two-year period ended December 31, 2024, in conformity with accounting principles generally accepted in the
United States of America.

 Substantial Doubt about the Company's
ability to Continue as a Going Concern

 The accompanying financial statements have been
prepared assuming that the Company will continue as a going concern. As discussed in Note 2, the Company has incurred net losses and working
capital deficits. These factors, and the need for additional financing in order for the Company to meet its business plans raises substantial
doubt about the Company's ability to continue as a going concern. Our opinion is not modified with respect to that matter.

 Basis for Opinion

 These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our
audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.

 We conducted our audits in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding
of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's
internal control over financial reporting. Accordingly, we express no such opinion.

 Our audits included performing procedures to assess
the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 F- 2

 Critical Audit Matters

 The critical audit matters communicated below
are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to
the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our
especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion
on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions
on the critical audit matters or on the accounts or disclosures to which they relate.

 Impairment of Goodwill

 As described in Note 3 to the Company's
financial statements, the Company evaluates Goodwill for impairment at least once annually or more frequently if events or circumstances
indicate that the goodwill might be impaired. The Company first assesses qualitative factors to determine whether it is necessary to perform
the quantitative analysis. If, after assessing the totality of events or circumstances, the Company determines that it is not more likely
than not that the fair value of a reporting unit is less than its carrying value then quantitative goodwill impairment test is unnecessary.
The goodwill balance was $5,842,433 related to the SaaS reporting unit. The Company uses the discounted cash flow model to estimate
the fair value of the SaaS reporting unit, which requires management to make subjective estimates and assumptions related to forecasts
of future revenues. Changes in these assumptions could have a significant impact on either the fair value, the amount of any impairment
charge, or both. The fair value of the SaaS reporting unit exceeded its carrying value as of the measurement date and, therefore, no impairment
was recognized.

 We identified the Company's calculation
of the fair value of the reporting unit to assess the need for impairment as a critical audit matter. The principal considerations
for our determination of this critical audit matter related to the high degree of subjectivity in the Company's judgments in determining
the qualitative and quantitative factors. Auditing these judgments and assumptions by the Company involves auditor judgment
due to the nature and extent of audit evidence and effort required to address these matters.

 The primary procedures we performed to address
these critical audit matters included the following:

 -
 We obtained Management's calculations, forecasts, and conclusion and performed the following procedures:

 o
 Reviewed calculations and forecasts, and evaluated the reasonableness of Management's calculation,
forecast, and significant assumptions used by the Company, specifically related to revenue growth.

 o
 Performed a sensitivity analysis on key inputs.

 o
 Recalculated management's fair value of the reporting unit.

 o
 Developed a range of independent estimates of the fair value of the reporting unit and compared to the
fair value determined by Management.

 We have served as the Company's auditor since 2024.

 Tampa, Florida

 F- 3

 Consolidated Balance Sheets

 ASSETS

 2024

 2023

 Current assets:

 Cash

 $
 106,654

 $
 91,436

 Accounts receivable, net

 372,716

 304,813

 Prepaid expenses and other assets

 24,008

 39,533

 Total current assets

 503,378

 435,782

 Goodwill

 5,842,433

 5,842,433

 Total assets

 $
 6,345,811

 $
 6,278,215

 LIABILITIES AND STOCKHOLDERS' EQUITY

 Current liabilities:

 Accounts payable and accrued liabilities

 $
 1,237,637

 $
 1,738,364

 Accounts payable and accrued liabilities - related party

 149,838

 149,838

 Shareholder advance

 67,622

 67,622

 Deferred revenue

 354,083

 378,583

 Loans payable

 27,369

 -

 Total current liabilities

 1,836,549

 2,334,407

 Long-term liabilities:

 Loans payable, net of current maturities

 -

 90,359

 Convertible loans payable, net of discounts

 19,660

 -

 Total long-term liabilities

 19,660

 90,359

 Total liabilities

 1,856,209

 2,424,766

 Commitments and contingencies (Note 8)

 Stockholders' equity:

 Series A Convertible Preferred stock, $ 0.001 par value; 900,000 shares authorized; 39,810 shares issued and outstanding at December 31, 2024 and 2023

 Common stock, $ 0.001 par value; 45,000,000 shares authorized; 1,859,525 and 1,232,333 shares issued and outstanding at December 31, 2024 and 2023, respectively

 1,859

 1,232

 Additional paid-in capital

 35,463,769

 33,692,018

 Accumulated deficit

 ( 30,976,066
)

 ( 29,839,841
)

 Total stockholders' equity

 4,489,602

 3,853,449

 Total liabilities and stockholders' equity

 $
 6,345,811

 $
 6,278,215

 The accompanying notes are an integral part
of these consolidated financial statements.

 F- 4

 Consolidated Statements of Operations

 2024

 2023

 Revenue

 $
 2,989,599

 $
 3,804,943

 Cost of revenue

 2,243,614

 2,535,865

 Gross profit

 745,985

 1,269,078

 Operating expenses:

 Legal and professional

 980,897

 839,183

 Salaries and wages

 268,399

 310,988

 Stock compensation

 -

 General and administrative

 756,115

 1,208,206

 Total operating expenses

 2,005,411

 2,719,740

 Loss from operations

 ( 1,259,426
)

 ( 1,450,662
)

 Other income (expense)

 Interest expense

 ( 104,201
)

 ( 6,448
)

 Gain on forgiveness of accounts payable

 227,402

 Impairment of goodwill

 -

 ( 2,524,034
)

 Total other income (expense)

 123,201

 ( 2,530,482
)

 Net loss before income taxes

)

)

 Provision for (benefit from) income taxes

 -

 -

 $
)

 $
)

 Net loss per share, basic and diluted

 $
 ( 0.78
)

 $
 ( 3.86
)

 Weighted average common shares outstanding, basic and diluted

 1,458,691

 1,032,666

 The accompanying notes are an integral part
of these consolidated financial statements.

 F- 5

 Consolidated Statements of Changes in Stockholders'
Equity

 Preferred Stock

 Common stock

 Additional paid-in

 Subscriptions

 Accumulated

 Year ended December 31, 2024

 Shares

 $

 Shares

 $

 capital

 payable

 deficit

 Total

 Balances, December 31, 2023

 39,810

 $

 1,232,333

 $
 1,232

 $
 33,692,018

 $
 -

 $
 ( 29,839,841
)

 $
 3,853,449

 Shares issued as settlement of accounts payable

 -

 -

 157,639

 271,673

 -

 -

 271,831

 Shares issued for legal settlement

 -

 -

 235,328

 359,112

 -

 -

 359,347

 Shares issued for vested restricted stock units

 -

 -

 1,667

 ( 2
)

 -

 -

 -

 Shares issued for common stock placement – net of offering costs of $ 32,000

 -

 -

 232,558

 167,768

 -

 -

 168,000

 Issuance of warrants in conjunction with convertible loans

 -

 -

 -

 -

 973,200

 973,200

 -

 -

 -

 -

 -

 -

)

)

 Ending balance, December 31, 2024

 39,810

 $

 1,859,525

 $
 1,859

 $
 35,463,769

 $
 -

 $
 ( 30,976,066
)

 $
 4,489,602

 Preferred Stock

 Common stock

 Additional
 paid-in

 Subscriptions

 Accumulated

 Year ended December 31, 2023

 Shares

 $

 Shares

 $

 capital

 payable

 deficit

 Total

 Balances, December 31, 2022

 39,810

 $

 867,574

 $

 $
 32,034,309

 $
 600,000

 $
 ( 25,858,697
)

 $
 6,776,520

 Shares issued as settlement of accounts payable

 -

 -

 69,072

 188,735

 -

 -

 188,804

 Shares issued under equity line of credit

 -

 -

 134,056

 342,772

 -

 -

 342,906

 Shares issued for vested restricted stock units

 -

 -

 16,935

 ( 17
)

 -

 -

 -

 Shares issued for settlement of class action

 -

 -

 129,458

 599,871

 ( 600,000
)

 -

 -

 Shares issued for cashless exercise of warrants

 -

 -

 15,238

 ( 15
)

 -

 Proceeds received from potential acquisition

 -

 -

 -

 -

 -

 -

 Stock based compensation

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

)

)

 Ending balance, December 31, 2023

 39,810

 $

 1,232,333

 $
 1,232

 $
 33,692,018

 $
 -

 $
 ( 29,839,841
)

 $
 3,853,449

 The accompanying notes are an integral part
of these consolidated financial statements.

 F- 6

 Consolidated Statements of Cash Flows

 2024

 2023

 Cash flows from operating activities:

 $
)

 $
)

 Adjustments to reconcile net loss to net cash used in operating activities:

 Impairment of goodwill

 -

 2,524,034

 Amortization of debt discount

 49,660

 -

 Stock-based compensation

 -

 Gain on forgiveness of accounts payable

 ( 227,402
)

 -

 Common stock issued for settlement of payables

 271,831

 -

 Common stock issued for legal settlements

 74,053

 -

 Credit loss expense

 25,500

 48,000

 Changes in operating assets and liabilities:

 Accounts receivable

 ( 93,403
)

 ( 16,780
)

 Prepaid expenses and other assets

 15,525

 25,647

 Accounts payable and accrued liabilities

 ( 39,331
)

 433,966

 Deferred revenue

 ( 24,500
)

 ( 201,250
)

 Net cash used in operating activities

 ( 1,084,292
)

 ( 806,164
)

 Net cash from investing activities:

 Proceeds from potential acquisition

 -

 Net cash provided by investing activities

 -

 Cash flows from financing activities:

 Proceeds from the sale of common stock

 168,000

 572,906

 Proceeds from loans payable

 994,500

 -

 Payments on loans payable

 ( 62,990
)

 ( 57,390
)

 Payments of shareholder advance

 -

 ( 32,378
)

 Proceeds from accounts payable and accrued liabilities - related party

 128,479

 193,558

 Payments on accounts payable and accrued liabilities - related party

 ( 128,479
)

 ( 193,558
)

 Net cash provided by financing activities

 1,099,510

 483,138

 Net increase (decrease) in cash

 15,218

 ( 158,026
)

 Cash, beginning of period

 91,436

 249,462

 Cash, end of period

 $
 106,654

 $
 91,436

 Supplemental disclosures of cash flow information:

 Cash paid for interest

 $
 30,591

 $
 6,448

 Cash paid for income taxes

 $
 -

 $
 -

 Non-cash investing and financing activities:

 Shares issued for vested restricted stock units

 $

 $

 Shares issued for settlement of class action

 $
 -

 $
 600,000

 Shares issued for cashless exercise of warrants

 $
 -

 $

 Shares issued for accrued legal settlement

 $
 285,294

 $
 -

 Warrants issued in conjunction with convertible loans

 $
 973,200

 $
 -

 The accompanying notes are an integral part
of these consolidated financial statements.

 F- 7

 Notes to Consolidated Financial Statements

 Note 1. Description of Business

 Nature of Business

 SCWorx, LLC (n/k/a SCW FL
Corp.) ("SCW LLC") was a privately held limited liability company which was organized in Florida on November 17, 2016.
On December 31, 2017, SCW LLC acquired Primrose Solutions, LLC ("Primrose"), a Delaware limited liability company, which
became its wholly-owned subsidiary and focused on developing functionality for the software now used and sold by SCWorx Corp. (the
"Company" or "SCWorx"). The majority interest holders of Primrose were interest holders of SCW LLC and based
upon Staff Accounting Bulletin Topic 5G, the technology acquired has been accounted for at predecessor cost of $ 0. To facilitate the
planned acquisition by Alliance MMA, Inc., a Delaware corporation ("Alliance"), on June 27, 2018, SCW LLC merged with
and into a newly-formed entity, SCWorx Acquisition Corp., a Delaware corporation ("SCW Acquisition"), with SCW
Acquisition being the surviving entity. Subsequently, on August 17, 2018, SCW Acquisition changed its name to SCWorx Corp. In June
2018, the Company began to collect subscriptions for common stock. From June to November 2018, the Company collected $ 1,250,000 in
subscriptions and issued 3,125 shares of common stock to new third-party investors. On November 30, 2018, the Company and certain of
its stockholders agreed to cancel 6,510 shares of common stock. In addition, on February 1, 2019, (i) SCWorx Corp. (f/k/a SCWorx
Acquisition Corp.) changed its name to SCW FL Corp. (to allow Alliance to change its name to SCWorx Corp.) and (ii) Alliance
acquired SCWorx Corp. (n/k/a SCW FL Corp.) in a stock-for-stock exchange transaction and changed Alliance's name to SCWorx
Corp., which is the Company's current name, with SCW FL Corp. becoming the Company's subsidiary.

 On October 6, 2023, following
stockholder approval at the Company's annual meeting, the Company amended its certificate of incorporation to implement a 1 for
15 reverse split of its common stock. The effect of the reverse stock split was to combine every 15 shares of outstanding common stock
into one share of common stock. The reverse stock split was effective at the opening of the trading day on October 11, 2023.

 The effects of the reverse
stock split have been reflected in this Annual Report on Form 10-K for all periods presented.

 Operations of the Business

 SCWorx is a provider of data
content and services related to the repair, normalization and interoperability of information for healthcare providers and big data analytics
for the healthcare industry.

 SCWorx has developed and markets
health information technology solutions and associated services that improve healthcare processes and information flow within hospitals.
SCWorx's software platform enables healthcare providers to simplify, repair, and organize its data ("data normalization"),
allows the data to be utilized across multiple internal software applications ("interoperability") and provides the basis
for sophisticated data analytics ("big data"). SCWorx's solutions are designed to improve the flow of information quickly
and accurately between the existing supply chain, electronic medical records, clinical systems, and patient billing functions. The software
is designed to achieve multiple operational benefits such as supply chain cost reductions, decreased accounts receivables aging, accelerated
and more accurate billing, contract optimization, increased supply chain management and cost visibility, synchronous Charge Description
Master ("CDM") and control of vendor rebates and contract administration fees.

 SCWorx empowers healthcare
providers to maintain comprehensive access and visibility to an advanced business intelligence that enables better decision-making and
reductions in product costs and utilization, ultimately leading to accelerated and accurate patient billing. SCWorx's software modules
perform separate functions as follows:

 virtualized Item Master File repair, expansion and automation;

 CDM management;

 contract management;

 F- 8

 request for proposal automation;

 rebate management;

 big data analytics modeling; and

 data integration and warehousing.

 SCWorx continues to provide
transformational data-driven solutions to some of the finest, most well-respected healthcare providers in the United States. Clients are
geographically dispersed throughout the country. The Company's focus is to assist healthcare providers with issues they have pertaining
to data interoperability. SCWorx provides these solutions through a combination of direct sales and relationships with strategic partners.

 SCWorx's software solutions
are delivered to clients within a fixed term period, typically a three-to-five-year contracted term, where such software is hosted in
SCWorx data centers (Amazon Web Service's "AWS" or RackSpace) and accessed by the client through a secure connection
in a software as a service ("SaaS") delivery method.

 SCWorx currently sells its
solutions and services in the United States to hospitals and health systems through its direct sales force and its distribution and reseller
partnerships.

 Note 2 – Liquidity and Going Concern

financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"), which
contemplates continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal
course of business. The consolidated financial statements do not include any adjustment that might become necessary should the Company
be unable to continue as a going concern.

 The Company has suffered recurring
losses from operations and incurred a net loss of $ 1,136,225 for the year ended December 31, 2024 and $ 3,981,144 for the year ended December
31, 2023. The accumulated deficit as of December 31, 2024 was $ 30,976,066. The Company has not yet achieved profitability and expects
to continue to incur cash outflows from operations. It is expected that its operating losses will continue and, as a result, the Company
will eventually need to generate significant increases in product revenues to achieve profitability. These conditions indicate that there
is substantial doubt about the Company's ability to continue as a going concern within one year after the consolidated financial
statement issuance date.

 Note 3. Summary of Significant Accounting Policies

 Basis of Presentation and Principles of
Consolidation

financial statements have been prepared in accordance with United States generally accepted accounting principles ("U.S. GAAP")
and the rules and regulations of the U.S. Securities and Exchange Commission ("SEC").

financial statements include the accounts of SCWorx and its wholly-owned subsidiaries. All material intercompany balances and transactions
have been eliminated in consolidation.

 Cash

 Cash is maintained with various
financial institutions. Financial instruments that potentially subject the Company to concentrations of credit risk consist principally
of cash deposits. Accounts at each institution are insured by the Federal Deposit Insurance Corporation ("FDIC") up to $ 250,000.
The Company did not have any amounts in excess of the FDIC insured limit for as of December 31, 2024 and 2023.

 F- 9

 Fair Value of Financial Instruments

 Management applies fair value
accounting for significant financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed
at fair value in the consolidated financial statements. Management defines fair value as the price that would be received from selling
an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining
the fair value measurements for assets and liabilities, which are required to be recorded at fair value, management considers the principal
or most advantageous market in which it would transact and the market-based risk measurements or assumptions that market participants
would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair
value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and
bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:
Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Observable inputs other than quoted prices in
active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets,
or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or
liabilities. Level 3 - Inputs that are generally unobservable and typically reflect management's estimate of assumptions that market
participants would use in pricing the asset or liability.

 Concentration of Credit and Other Risks

 Financial instruments that
potentially subject the Company to significant concentrations of credit risk consist principally of cash and accounts receivable. The
Company believes that any concentration of credit risk in its accounts receivable is substantially mitigated by the Company's evaluation
process, relatively short collection terms and the high level of credit worthiness of its customers. The Company performs ongoing internal
credit evaluations of its customers' financial condition, obtains deposits and limits the amount of credit extended when deemed
necessary but generally requires no collateral.

 Significant customers are
those which represent more than 10% of the Company's revenue for each period presented, or the Company's accounts receivable
balance as of each respective consolidated balance sheet date. For each significant customer, revenue as a percentage of total revenue
and accounts receivable as a percentage of total net accounts receivable are as follows:

 Revenue

 Accounts Receivable

 Customers

 2024

 2023

 2024

 2023

 Customer A

 %

 %

 %

 %

 Customer B

 %

 %

 %

 %

 Customer C

 %

 %

 %

 %

 Customer D

 %

 %

 -

 %

 %

 Customer E

 -

 %

 %

 -

 %

 %

 Customer F

 %

 %

 %

 -

 %

 Allowance for Credit Losses

 Accounts receivable are comprised
of amounts billed and currently due from customers. Accounts receivable are amounts related to any unconditional right the Company has
for receiving consideration and are presented as accounts receivable in the consolidated balance sheets. The Company maintains an allowance
for credit losses for estimated losses resulting from the inability of our customers to make required payments. The Company employs an
expected credit loss model utilizing historical loss rates and historical trends in credit quality indicators (e.g., delinquency, risk
ratings), adjusted to reflect current economic conditions and knowledge of customer relationships.

 F- 10

 Management considers the following
factors when determining the collectability of specific customer accounts: customer creditworthiness, past transaction history with the
customer, current industry trends, changes in customer payment terms, and specific customer situations. The Company's normal collection
cycle ranges between thirty and 60 days. Estimated uncollectible amounts are charged to earnings and a credit to a valuation allowance.
Balances which remain outstanding after reasonable collection efforts are written off through a charge to the valuation allowance and
a credit to accounts receivable. The Company recorded an allowance for credit losses of $ 20,000 as of December 31, 2024. The Company has
assessed all receivables are collectable and did not record an allowance for credit losses as of December 31, 2023.

 Leases

 The Company determines if an
arrangement is a lease at inception. The current portion of lease obligations are included in accounts payable and accrued liabilities
on the consolidated balance sheets. Right-of-use ("ROU") assets represent the Company's right to use an underlying asset
for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Operating
lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term.
As most of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information
available at commencement date in determining the present value of lease payments. The Company's lease terms may include options
to extend or terminate the lease, which are included in the lease ROU asset when it is reasonably certain that the Company will exercise
that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements
with lease components only, none with non-lease components, which are generally accounted for separately (refer to Note 7, Leases, for
additional detail).

 Goodwill and Impairment of Long Lived Assets

 Goodwill

 Goodwill is recorded as the
difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the net tangible and identified
intangible assets acquired under a business combination. Goodwill also includes acquired assembled workforce, which does not qualify as
an identifiable intangible asset. The Company reviews impairment of goodwill annually in the fourth quarter, or more frequently if events
or circumstances indicate that the goodwill might be impaired. The Company first assesses qualitative factors to determine whether it
is necessary to perform the quantitative goodwill impairment test. If, after assessing the totality of events or circumstances, the Company
determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then the quantitative
goodwill impairment test is unnecessary.

 For further discussion of goodwill,
refer to Note 5, Goodwill.

 Revenue Recognition

 The Company recognizes revenue
in accordance with Topic 606 to depict the transfer of promised goods or services in an amount that reflects the consideration to which
an entity expects to be entitled in exchange for those goods or services. To determine revenue recognition for arrangements within the
scope of Topic 606 the Company performs the following steps:

 Step 1: Identify the contract(s) with a customer

 Step 2: Identify the performance obligations in the contract

 Step 3: Determine the transaction price

 Step 4: Allocate the transaction price to the performance obligations in the contract

 Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation

 F- 11

 The Company follows the accounting
revenue guidance under Topic 606 to determine whether contracts contain more than one performance obligation. Performance obligations
are the unit of accounting for revenue recognition and generally represent the distinct goods or services that are promised to the customer.

 The Company has identified
the following performance obligations in its SaaS contracts with customers:

 1)

 Data Normalization: which includes data preparation, product and vendor mapping, product categorization, data enrichment and other data related services,

 2)

 Software-as-a-service ("SaaS"): which is generated from clients' access of and usage of the Company's hosted software solutions on a subscription basis for a specified contract term, which is usually annually. In SaaS arrangements, the client cannot take possession of the software during the term of the contract and generally has the right to access and use the software and receive any software upgrades published during the subscription period,

 3)

 Maintenance: which includes ongoing data cleansing and normalization, content enrichment, and optimization, and

 4)

 Professional Services: mainly related to specific customer projects to manage and/or analyze data and review for cost reduction opportunities.

 A contract will typically include
Data Normalization, SaaS and Maintenance, which are distinct performance obligations and are accounted for separately. The transaction
price is allocated to each separate performance obligation on a relative stand-alone selling price basis. Significant judgement is required
to determine the stand-alone selling price for each distinct performance obligation and is typically estimated based on observable transactions
when these services are sold on a stand-alone basis. At contract inception, an assessment of the goods and services promised in the contracts
with customers is performed and a performance obligation is identified for each distinct promise to transfer to the customer
a good or service (or bundle of goods or services). To identify the performance obligations, the Company considers all the goods
or services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices.
Revenue is recognized when the performance obligation has been met. The Company considers control to have transferred upon delivery
because the Company has a present right to payment at that time, the Company has transferred use of the good or service, and the customer
is able to direct the use of, and obtain substantially all the remaining benefits from, the good or service.

 The Company's SaaS and
Maintenance contracts typically have termination for convenience without penalty clauses and accordingly, are generally accounted for
as month-to-month agreements. If it is determined that the Company has not satisfied a performance obligation, revenue recognition will
be deferred until the performance obligation is deemed to be satisfied.

 Revenue recognition for the
Company's performance obligations are as follows:

 Data Normalization and Professional Services

 The Company's Data Normalization
and Professional Services are typically a fixed fee. When these services are not combined with SaaS or Maintenance revenues as a single
unit of accounting, these revenues are recognized as the services are rendered and when contractual milestones are achieved and accepted
by the customer. When these services are combined with SaaS or Maintenance revenues, revenues are recognized ratably over the period of
the contract.

 F- 12

 SaaS and Maintenance

 SaaS and Maintenance revenues
are recognized ratably over the contract terms beginning on the commencement date of each contract, which is the date on which the Company's
service is made available to customers.

 The Company does have some
contracts that have payment terms that differ from the timing of revenue recognition, which requires the Company to assess whether the
transaction price for those contracts include a significant financing component. The Company has elected the practical expedient that
permits an entity to not adjust for the effects of a significant financing component if it expects that at the contract inception, the
period between when the entity transfers a promised good or service to a customer and when the customer pays for that good or service
will be one year or less. The Company does not maintain contracts in which the period between when the entity transfers a promised good
or service to a customer and when the customer pays for that good or service exceeds the one-year threshold.

 The Company has one revenue
stream, from the SaaS business, and believes it has presented all varying factors that affect the nature, timing and uncertainty of revenues
and cash flows.

 Remaining Performance Obligations

 As of December 31, 2024, the
Company had $ 354,083 of remaining performance obligations recorded as deferred revenue. The Company expects to recognize sales relating
to these existing performance obligations of during 2025.

 As of December 31, 2023, the
Company had $ 378,583 of remaining performance obligations recorded as deferred revenue. The Company recognized sales relating to those
existing performance obligations of during 2024.

 Costs to Fulfill a Contract

 Costs to fulfill a contract
typically include costs related to satisfying performance obligations as well as general and administrative costs that are not explicitly
chargeable to customer contracts. These expenses are recognized and expensed when incurred in accordance with ASC 340-40, "Other
Assets and Deferred Costs—Contracts with Customers".

 Cost of Revenue

 Cost of revenues primarily
represent data center hosting costs, consulting services and maintenance of the Company's large data array that were incurred in
delivering professional services and maintenance of the Company's large data array during the periods presented.

 Convertible Debt and Amortization of Debt
Discounts

 The Company has issued various
debt instruments with warrants and conversion features for which total proceeds were allocated to individual instruments based on the
relative fair value of each instrument at the time of issuance. The relative fair value of the warrants and conversion was recorded as
discount on debt and amortized over the term of the respective debt. For the years ended December 31, 2024 and 2023, amortization of debt
discount was $ 19,660 $ 0, respectively.

 Contract Balances

 Contract assets arise when
the revenue associated prior to the Company's unconditional right to receive a payment under a contract with a customer ( i.e.,
unbilled revenue) and are derecognized when either it becomes a receivable or the cash is received. There were no contract assets as of
December 31, 2024 and 2023.

 Contract liabilities arise
when customers remit contractual cash payments in advance of the Company satisfying its performance obligations under the contract and
are derecognized when the revenue associated with the contract is recognized when the performance obligation is satisfied. Contract liabilities
were $ 354,083 and $ 378,583 as of December 31, 2024 and 2023, respectively.

 Income Taxes

 The Company uses the asset
and liability method of accounting for income taxes in accordance with ASC Topic 740, " Income Taxes." Under this method,
income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences
of temporary differences resulting from matters that have been recognized in an entity's financial statements or tax returns. Deferred
tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized
in the results of operations in the period that includes the enactment date.

 F- 13

 Valuation allowances are provided
if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
As of December 31, 2024 and 2023, the Company has evaluated available evidence and concluded that the Company may not realize all the
benefits of its deferred tax assets; therefore, a valuation allowance has been established for its deferred tax assets.

 ASC Topic 740-10-30 clarifies
the accounting for uncertainty in income taxes recognized in an enterprise's financial statements and prescribes a recognition threshold
and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a
tax return. ASC Topic 740-10-40 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods,
disclosure, and transition. The Company has no material uncertain tax positions for any of the reporting periods presented.

 Stock-Based Compensation

 The Company accounts for stock-based
compensation expense in accordance with the authoritative guidance on share-based payments. Under the provisions of the guidance, stock-based
compensation expense is measured at the grant date based on the fair value of the option or warrant using a Black-Scholes option pricing
model and is recognized as expense on a straight-line basis over the requisite service period, which is generally the vesting period.

 The authoritative guidance
also requires that the Company measures and recognizes stock-based compensation expense upon modification of the term of stock award.
The stock-based compensation expense for such modification is accounted for as a repurchase of the original award and the issuance of
a new award.

 Calculating stock-based compensation
expense requires the input of highly subjective assumptions, including the expected term of the stock-based awards, stock price volatility,
and the pre-vesting option forfeiture rate. The Company estimates the expected life of options granted based on historical exercise patterns,
which are believed to be representative of future behavior. The Company estimates the volatility of the Company's common stock on
the date of grant based on historical volatility. The assumptions used in calculating the fair value of stock-based awards represent the
Company's best estimates, but these estimates involve inherent uncertainties and the application of management's judgment.
As a result, if factors change and the Company uses different assumptions, its stock-based compensation expense could be materially different
in the future. In addition, the Company is required to estimate the expected forfeiture rate and only recognize expense for those shares
expected to vest. The Company estimates the forfeiture rate based on historical experience of its stock-based awards that are granted,
exercised and cancelled. If the actual forfeiture rate is materially different from the estimate, stock-based compensation expense could
be significantly different from what was recorded in the current period. The Company also grants performance based restricted stock awards
to employees and consultants. These awards will vest if certain employee\consultant-specific or company-designated performance targets
are achieved. If minimum performance thresholds are achieved, each award will convert into a designated number of the Company's
common stock. If minimum performance thresholds are not achieved, then no shares will be issued. Based upon the expected levels of achievement,
stock-based compensation is recognized on a straight-line basis over the requisite service period. The expected levels of achievement
are reassessed over the requisite service periods and, to the extent that the expected levels of achievement change, stock-based compensation
is adjusted in the period of change and recorded on the consolidated statements of operations and the remaining unrecognized stock-based
compensation is recorded over the remaining requisite service period. Refer to Note 9, Stockholders' Equity, for additional detail.

 Loss Per Share

 The Company computes earnings
(loss) per share in accordance with ASC 260, " Earnings per Share " which requires presentation of both basic and diluted
earnings (loss) per share ("EPS") on the face of the consolidated income statement. Basic EPS is computed by dividing the
loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period.
Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible
preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining
the number of shares assumed to be purchased from the exercise of stock options or warrants and the exercise of fully vested restricted
stock units. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. As of December 31, 2024 and 2023, the
Company had 9,048,072 and 180,390, respectively, common stock equivalents outstanding.

 F- 14

 Indemnification

 The Company provides indemnification
of varying scope to certain customers against claims of intellectual property infringement made by third parties arising from the use
of the Company's software. In accordance with authoritative guidance for accounting for guarantees, the Company evaluates estimated
losses for such indemnification. The Company considers such factors as the degree of probability of an unfavorable outcome and the ability
to make a reasonable estimate of the amount of loss. To date, no such claims have been filed against the Company and no liability has
been recorded in its consolidated financial statements.

 As permitted under Delaware
law, the Company has agreements whereby it indemnifies its officers and directors for certain events or occurrences while the officer
or director is, or was, serving at the Company's request in such capacity. The maximum potential amount of future payments the Company
could be required to make under these indemnification agreements is unlimited. In addition, the Company has directors' and
officers' liability insurance coverage that is intended to reduce its financial exposure and may enable it to recover any payments
above the applicable policy retention.

 Contingencies

 The Company records a liability
when the Company believes that it is both probable that a loss has been incurred, and the amount can be reasonably estimated. If the Company
determines that a loss is reasonably possible, and the loss or range of loss can be estimated, the Company discloses the possible loss
in the notes to the consolidated financial statements. The Company reviews the developments in its contingencies that could affect the
amount of the provisions that has been previously recorded, and the matters and related possible losses disclosed. The Company adjusts
provisions and changes to its disclosures accordingly to reflect the impact of negotiations, settlements, rulings, advice of legal counsel,
and updated information. Significant judgment is required to determine both the probability and the estimated amount.

 Legal costs associated with
loss contingencies are accrued based upon legal expenses incurred by the end of the reporting period.

 Use of Estimates

 The preparation of consolidated
financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported
and disclosed in the consolidated financial statements and accompanying notes. The Company regularly evaluates estimates and assumptions
related to the allowance for credit losses, the estimated useful lives and recoverability of long-lived assets, equity component of convertible
debt, stock-based compensation, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on
current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results
of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses
that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from
the Company's estimates. To the extent there are material differences between the estimates and the actual results, future results
of operations will be affected. Actual results could differ materially from those estimates.

 Recently Issued Accounting Pronouncements

 From time to time, new accounting pronouncements are issued by the
Financial Accounting Standards Board ("FASB") that are adopted by the Company as of the specified effective date. If not discussed,
management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the
Company's consolidated financial statements upon adoption.

 In November 2023, the FASB
issued ASU 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures to enhance the reportable segment disclosures.
The guidance requires additional disclosures about significant segment expenses. The guidance is effective for the public companies with
fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 with early adoption
permitted.

 F- 15

 Note 4. Related Party Transactions

 At December 31, 2024 and 2023,
the Company had amounts due to officers in the amount of $ 149,838.

 During September 2021, the
Company's former CEO (also a significant shareholder) advanced $ 100,000 in cash to the Company for short term capital requirements.
This amount is non-interest bearing and payable upon demand. The Company had balances of $ 67,622 included in stockholder advance on the
Company's consolidated balance sheets as of December 31, 2024 and 2023.

 Between January 18, 2024 and
July 11, 2024, the Company's CFO advanced an aggregate $ 128,479 in cash to the Company for short term capital requirements. As of
December 31, 2024, all advanced amounts have been repaid.

 The above amounts and terms
are not necessarily what third parties would agree to.

 Note 5. Goodwill

 During the year ended December
31, 2023, the Company determined that the fair value of its goodwill was less than its carrying value. The Company determined the carrying
value to be $ 5,842,433 as of December 31, 2023 and recognized impairment expense $ 2,524,034.

 There were no changes to the
carrying value of goodwill for the year ended December 31, 2024.

 Note 6. Debt

 Receipt of CARES funding

 On May 5, 2020, the Company
obtained a $ 293,972 unsecured loan payable through the Paycheck Protection Program ("PPP"), which was enacted as part of the
Coronavirus Aid, Relief and Economic Security Act (the "CARES ACT"). The funds were received from Bank of America through
a loan agreement pursuant to the CARES Act. The CARES Act was established in order to enable small businesses to pay employees during
the economic slowdown caused by COVID-19 by providing forgivable loans to qualifying businesses for up to 2.5 times their average monthly
payroll costs. The amount borrowed under the CARES Act and used for payroll costs, rent, mortgage interest, and utility costs during the
24 week period after the date of loan disbursement is eligible to be forgiven provided that (a) the Company uses the PPP Funds during
the eight week period after receipt thereof, and (b) the PPP Funds are only used to cover payroll costs (including benefits), rent, mortgage
interest, and utility costs. While the full loan amount may be forgiven, the amount of loan forgiveness will be reduced if, among other
reasons, the Company does not maintain staffing or payroll levels or less than 60 % of the loan proceeds are used for payroll costs. Principal
and interest payments on any unforgiven portion of the PPP Funds (the "PPP Loan") will be deferred to the date the SBA remits
the borrower's loan forgiveness amount to the lender or, if the borrower does not apply for loan forgiveness, 10 months after the
end of the borrower's loan forgiveness period for six months and will accrue interest at a fixed annual rate of 1.0 % and carry a
 two year maturity date. There is no prepayment penalty on the CARES Act Loan. In May 2022, the Company was granted an extension on the
maturity date of this note until March 5, 2025. The loan was partially forgiven in the amount of $ 139,596 in September 2022 with the balance
remaining due. At December 31, 2024 and 2023, the principal balances on the loan were $ 27,369 and 90,359, respectively and are included
in the Company's consolidated balance sheets.

 Short Term Loans

 On April 12, 2024, the Company
issued a secured promissory note in the face amount of $ 330,000, in exchange for which it received cash in the amount of $ 300,000. In
addition to the original issue discount of $ 30,000, the note bears interest at the rate of 5 % per annum, was originally due May 10,
2024 and subsequently extended until July 12, 2024 and is secured by all the Company assets. On July 15, 2024, the balance of the promissory
note was rolled into a new convertible loan offering.

 Convertible Loans

 On July 15, 2024, the Company
issued an aggregate $ 1,155,000 in convertible notes bearing interest at 10 % per annum. The notes mature on December 31,
2025 and is convertible, into the Company's common stock at a price of $ 1.43 per share, subject to certain adjustments,
at the holder's request. The noteholders and certain third parties were also granted detachable 5 year warrants
to purchase an aggregate of 4,887,118 shares of the Company's common stock at exercise prices ranging from $ 1.43 to
$ 1.692 per share. The Company valued the warrants at $ 6,163,572 using the Black-Scholes pricing model. The Company has
allocated the note proceeds based on relative fair value and has recorded the value of the warrants as a discount to the debt in the amount
of $ 973,200. At December 31, 2024, the principal balances were still outstanding and is included on the Company's consolidated
balance sheets net of discounts at $ 19,660. The Company has accrued interest for the notes in the amount of $ 53,950, which is included
in accounts payable and accrued liabilities on the Company's consolidated balance sheets. The Company recognized amortization expense
of $ 19,660 during the year ended December 31, 2024.

 F- 16

 Note 7. Leases

 Operating Leases

 The Company's principal
executive office in Tampa Florida is under a month-to-month arrangement with a base rent of $ 250 per month.

 The Company has operating leases
for corporate, business and technician offices. Leases with a probable term of 12 months or less, including month-to-month agreements,
are not recorded on the consolidated balance sheets, unless the arrangement includes an option to purchase the underlying asset, or an
option to renew the arrangement, that the Company is reasonably certain to exercise (short-term leases). The Company recognizes lease
expense for these leases on a straight-line bases over the lease term. The Company's only remaining lease is month-to-month. As
a practical expedient, the Company elected, for all office and facility leases, not to separate non-lease components (common-area maintenance
costs) from lease components (fixed payments including rent) and instead to account for each separate lease component and its associated
non-lease components as a single lease component.

 For the years ended December
31, 2024 and 2023, the components of lease expense were as follows:

 2024

 2023

 Operating lease cost

 $
 4,080

 $
 3,523

 Total lease cost

 $
 4,080

 $
 3,523

 As of December 31, 2024 and
2023, the Company has no additional operating leases, and no financing leases.

 Note 8. Commitments and Contingencies

 In conducting its business,
the Company may become involved in legal proceedings. The Company will accrue a liability for such matters when it is probable that a
liability has been incurred and the amount can be reasonably estimated. When only a range of possible loss can be established, the most
probable amount in the range is accrued. If no amount within this range is a better estimate than any other amount within the range, the
minimum amount in the range is accrued. The accrual for a litigation loss contingency might include, for example, estimates of potential
damages, outside legal fees and other directly related costs expected to be incurred.

 CorProminence d/b/a Core IR v. SCWorx

 AAA Arbitration Case 01-22-0001-5709

 As previously disclosed in
the Company's periodic reports filed with the SEC, on April 25, 2022, the Company received a Demand for Arbitration along with a
Statement of Claim filed by Core IR with the American Arbitration Association seeking damages in the amount of approximately $ 190,000. arising
out of a marketing and consulting agreement. The Company filed its answer, affirmative defenses and counterclaims on May 16, 2022. By
order of the arbitrator dated November 1, 2022, Core IR received permission to amend its Statement of Claim to increase its request for
damages to $ 257,546. The Company received the final decision of the Arbitrator on October 16, 2023, awarding Core IR $ 461,856 including
unpaid compensation, indemnification for legal fees and costs, prevailing party legal fees and interest (the "Award"). Core
IR has since obtained a judgement in the amount of approximately $ 502,000 (including interest) ("Judgement") which is included
in accounts payable and accrued liabilities on the Company's consolidated balance sheets at December 31, 2023. The Company and Core
IR entered into a settlement agreement dated July 12, 2024 under which the Company agreed to issue Core IR shares of its common stock
with a value of $ 502,000 (determined based on sales proceeds realized by Core IR), in full and complete satisfaction of the Judgement.
The settlement agreement is filed as exhibit 10.5 to the annual report on Form 10-K as filed with the SEC on September 24, 2024. On July,
18, 2024, the Company issued 159,776 shares of its common stock in the first tranche of payments under this agreement.

 In connection with the Settlement
Agreement, the Company and Core IR entered into a Registration Rights Agreement, pursuant to which the Company was required to file a
resale registration statement with the Commission to register for resale the shares issuable upon under the Settlement Agreement as described
above.

 Hadrian Equities Partners, LLC et ano. v.
SCWorx Corp,

 Case No. 22-cv-07096 (JLR) (S.D.N.Y)

 On August 19, 2022, Hadrian
Equities Partners, LLC and the Phillip W. Caprio, Jr. 2007 Irrevocable Trust filed a complaint in the United States District Court for
the Southern District of New York alleging that SCWorx was dilatory and did not comply with its alleged contractual duties to remove the
restrictions from Plaintiffs' converted AMMA stock to SCWorx stock until August 10 and August 11, 2020. Plaintiffs allege that as
a result, they were unable to sell their SCWorx stock when SCWorx was trading at its highest price on April 13, 2020. The Complaint sought
$ 500,000 in damages. Plaintiffs filed an Amended Complaint on November 28, 2022. On February 6, 2023, SCWorx filed its answer to
the Amended Complaint interposing numerous defenses. Plaintiff has since entered into a settlement agreement dated December 1, 2023 (effective
as of October 23, 2023) (as amended April 29, 2024), under which the Company agreed to pay Plaintiffs $ 20,000 and issue them 37,500 shares
of common stock, all in full settlement of the claims made in the lawsuit. The Company has accrued for this liability which is included
in accounts payable and accrued liabilities on the Company's consolidated balance sheet at December 31, 2023. The cash payment was
made in July 2024, and the shares were issued in May 2024.

 Contract Commitments

 On February 5, 2024, the
Company entered into a 120 day agreement with a registered broker in which it agreed to pay a 6 % commission to the broker for any capital
raised from parties introduced by the broker. Following the expiration of the first 120 days, the Company remains obligated to pay the
commission of all capital or debt proceeds received from parties introduced by the broker during the original term of the agreement for
a period of time. These obligations currently expire on or around July 17, 2025.

 Loan Commitments

 On July 15, 2024, the Company issued an aggregate $ 1,155,000 in
senior secured convertible notes. Under these notes, the Company has pledged all assets of the Company as collateral. See Note 6. Debt
for further details.

 F- 17

 Note 9. Stockholders' Equity

 Authorized Shares

 The Company has 45,000,000
Common shares authorized and 5,000,000 preferred shares, of which 900,000 have been designated Series A convertible preferred shares and
have been authorized with a par value of $ 0.001 per share.

 On October 6, 2023, following
stockholder approval at the Company's annual meeting, the Company amended its certificate of incorporation to implement a 1 for
15 reverse split of its common stock. The effect of the reverse stock split was to combine every 15 shares of outstanding common stock
into one share of common stock. The reverse stock split was effective at the opening of the trading day on October 11, 2023. The
effects of the reverse stock split have been reflected in this Annual report on form 10/K for all periods presented.

 Issuance of Shares for Vested Restricted Stock
Units

 March 27, 2024, the Company
issued 1,667 shares of common stock to a holder of fully vested restricted stock units.

 Issuance of Shares as Settlement of Accounts
Payable

 Between
February 6, 2024 and July 11, 2024, the Company issued an aggregate 130,039 shares of common stock in full settlement of $ 239,815 of
accounts payable. The shares had fair values ranging from $ 1.20 to $ 2.65 per share.

 On
October 24, 2024, the Company issued 27,600 shares of common stock in full settlement of $ 32,016 of accounts payable. The
shares had a fair value of $ 1.16 per share.

 Issuance of Shares for Legal Settlements

 On May 30, 2024, the Company
issued 37,500 shares of common stock valued at $ 87,600 or $ 2.34 per share to fulfill its obligation under a previous legal settlement.
See Note 8. Commitments and Contingencies for further information.

 On July 15, 2024, the Company
issued 38,052 shares of common stock valued at $ 53,653 or $ 1.41 per share to settle a potential legal claim.

 On July 18, 2024, the Company
issued 159,776 shares of common stock valued at $ 218,094 or $ 1.36 per share as partial fulfillment of its obligation under a previous
legal settlement. See Note 8. Commitments and Contingencies for further information.

 Issuance of Shares and Warrants for Stock Purchase
Agreements

 Between November 18, 2024
and November 19, 2024, SCWorx Corp. entered into a Securities Purchase Agreement (" SPA ") with certain accredited investors
(the " Investors "), and, pursuant to the SPA, sold to the Investors an aggregate 232,558 shares of its common stock
and warrants to acquire up to an aggregate 232,558 additional shares of the Company's common stock for gross proceeds of $ 200,000.
The exercise price of the warrants is $ 0.86 per share, subject to certain adjustments.

 F- 18

 Warrants issued in conjunction with loans payable

 On July 15, 2024, the Company
issued warrants to purchase an aggregate 4,887,118 shares of the Company's common stock at exercise prices ranging from $ 1.43 to
$ 1.573 per share in conjunction with a convertible note issuance, see Note 4. Loans Payable. The warrants were valued at $ 6,163,572 using
the Black-Scholes pricing model. The Company has recognized $ 973,200 of this value as a discount to the associated notes.

 The Company has classified
the warrants as having Level 2 inputs, and has used the Black-Scholes option-pricing model to value the warrants.

 The fair values at the commitment
date for the warrants were based upon the following management assumptions as of the date of issuance:

 Issuance
 date

 Risk-free interest rate

 1.93
 %

 Expected dividend yield

 -

 %

 Expected volatility

 %

 Term

 5 years

 Fair value of common stock

 $
 1.41

 Stock Incentive Plan

 The number of shares of the
Company's common stock that are issuable pursuant to warrant and stock option grants with time-based vesting as of and for the year
ended December 31, 2024 are:

 Warrant Grants

 Stock Option Grants

 Restricted

Stock Units

warrants

 Weighted-

average

exercise price per

share

options

 Weighted-

average

exercise price per

share

restricted

stock units

 Balance at December 31, 2023

 11,394

 $

 58.72

 3,333

 $

 39.60

 165,663

 Granted

 8,916,697

 0.86

 -

 -

 151,290

 Exercised

 -

 -

 -

 -

 ( 152,957

)

 Cancelled/Expired

 ( 2,293

)

 53.64

 ( 3,333

)

 39.60

 ( 41,722

)

 Balance at December 31, 2024

 $

 0.92

 -

 $

 -

 122,274

 Exercisable at December 31, 2024

 $

 0.92

 -

 $

 -

 122,274

 The number of shares of the
Company's common stock that are issuable pursuant to warrant and stock option grants with time-based vesting as of and for the year
ended December 31, 2023 are:

 Warrant Grants

 Stock Option Grants

 Restricted

 Stock Units

 warrants

 Weighted-

average

exercise price per

 share

 options

 Weighted-
 average

 exercise

 price per

 share

 restricted

 stock units

 Balance at December 31, 2022

 104,515

 $
 20.25

 7,891

 $
 48.75

 160,653

 Granted

 -

 -

 -

 -

 95,624

 Exercised

 ( 54,872
)

 9.75

 -

 -

 ( 86,003
)

 Cancelled/Expired

 ( 38,249
)

 23.73

 ( 4,558
)

 55.43

 ( 4,611
)

 Balance at December 31, 2023

 11,394

 $
 58.72

 3,333

 $
 39.60

 165,663

 Exercisable at December 31, 2023

 11,394

 $
 58.72

 3,333

 $
 39.60

 165,663

 F- 19

 The Company has classified
the warrant as having Level 2 inputs, and has used the Black-Scholes option-pricing model to value the warrant.

 The Company's outstanding
warrants at December 31, 2024 are as follows:

 Warrants Outstanding

 Warrants Exercisable

 Exercise Price Range

 Number Outstanding

 Weighted Average Remaining Contractual Life
 (in years)

 Weighted
 Average Exercise Price

 Number Exercisable

 Weighted Average Exercise Price

 Intrinsic Value

 $0.86– $60.00

 4.55

 $
 0.92

 $
 0.95

 $
 7,400,859

 As
of December 31, 2024 and 2023, there was no unrecognized expense for unvested stock options and restricted stock awards.

 Stock-based compensation expense
for the years ended December 31, 2024 and 2023 was as follows:

 2024

 2023

 Stock-based compensation expense

 $
 -

 $

 Stock-based compensation expense
categorized by the equity components for the years ended December 31, 2024 and 2023 is as follows:

 2024

 2023

 Common stock

 $
 -

 $

 Total

 $
 -

 $

 Stock
compensation is included on the consolidated statements of operations.

 Note 10. Net Loss Per Share

 Basic net loss per share is
computed by dividing net loss for the period by the weighted average shares of common stock outstanding during each period. Diluted net
loss per share is computed by dividing net loss for the period by the weighted average shares of common stock, common stock equivalents
and potentially dilutive securities outstanding during each period. The Company uses the treasury stock method to determine whether there
is a dilutive effect of outstanding option grants.

 The following securities were
excluded from the computation of diluted net loss per share for the periods presented because including them would have been anti-dilutive:

 2024

 2023

 Stock options

 -

 3,333

 Warrants

 11,394

 Restricted stock units

 122,274

 165,663

 Total common stock equivalents

 9,048,072

 180,390

 F- 20

 Note 11. Income Taxes

 By virtue of a merger of the
limited liability company into a corporation, the Company became a corporation during 2018.

 The significant items comprising
the Company's net deferred taxes as of December 31, 2024 and 2023 are as follows:

 As of December 31,

 2024

 2023

 Net operating loss

 $
 9,042,902

 $
 8,790,076

 Stock options and compensation

 2,440,539

 2,440,539

 Deferred revenue

 318,610

 324,159

 Other

 576,224

 571,694

 Valuation allowance

 ( 12,378,275
)

 ( 12,126,468
)

 Total deferred tax asset

 -

 -

 Basis difference fixed assets

 -

 -

 Total deferred tax liability

 -

 -

 Net deferred tax asset (liability)

 $
 -

 $
 -

 The components of the provision
for (benefit from) income taxes consist of the following:

 As of December 31,

 2024

 2023

 Current tax:

 Federal

 $
 -

 $
 -

 State

 -

 -

 Total

 $
 -

 $
 -

 Deferred tax:

 Federal

 $
 ( 233,463
)

 $
 ( 915,543
)

 State

 ( 18,344
)

 ( 71,935
)

 Less: change in valuation allowance

 251,807

 987,478

 -

 -

 Total

 $
 -

 $
 -

 The provision for (benefit
from) income taxes varies from the amount computed by applying the statutory rate for reasons summarized below:

 As of December 31,

 2024

 As of December 31,

 2023

 Net loss before tax per financial statements

 $
)

 $
)

 Statutory rate

 ( 238,607
)

 21.00
 %

 ( 836,040
)

 21.00
 %

 State tax rate

 ( 18,748
)

 1.65
 %

 ( 65,689
)

 1.65
 %

 Permanent items

 5,548

 ( 0.49
)%

 ( 85,749
)

 2.15
 %

 Rate change

 0.00
 %

 0.00
 %

 Change in valuation allowance

 251,807

 ( 22.16
)%

 987,478

 ( 24.80
)%

 $
 -

 0.00
 %

 $
 -

 0.00
 %

 As of December 31, 2024 and
2023, the Company had federal net operating loss carryforwards of approximately $ 39.9 million and $ 38.8 million, respectively, available
to offset future taxable income. As of December 31, 2024 and 2023, the Company had state loss carry-forwards of approximately $ 19.3 million
and $ 18.2 million, respectively. Future utilization of net operating losses may be limited due to potential ownership changes under Section
382 of the Internal Revenue Code of 1986, as amended (the "Code"). The federal net operating loss carryforwards can be carried
forward indefinitely and state loss carryforwards begin to expire in 2039.

 The valuation allowance as
of December 31, 2024 and 2023 was $ 12,378,275 and $ 12,126,468, respectively. The net change in valuation allowance for the years ended
December 31, 2024 and 2023 was an increase of $ 251,807 and $ 987,478, respectively. In assessing the realizability of deferred tax assets,
management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized.
The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in
which those temporary differences become deductible. Management considers the scheduled reversal of deferred income tax liabilities, projected
future taxable income, and tax planning strategies in making this assessment. Based on consideration of these items, management has determined
that enough uncertainty exists relative to the realization of the deferred income tax asset balances to warrant the application of a full
valuation allowance as of December 31, 2024 and 2023.

 F- 21

 The Company had no unrecognized
tax benefits during 2024 or 2023. By statute, all tax years are open to examination by the major taxing jurisdictions to which the Company
is subject.

 Note 12. Segment Reporting

 As noted above, the Company
is a provider of data content and services related to the repair, normalization and interoperability of information for healthcare providers
and big data analytics for the healthcare industry.

 The Company has determined
that it currently operates in a single segment - health information technology solutions and services, located in a single geographic
location – the United States. The accounting policies of the segment are the same as those described in the summary of significant
accounting policies. Since the Company operates in a single segment, the measure of segment total assets and loss from operations is the
same as that reported on the accompanying consolidated balance sheets as total assets, and the accompanying consolidated statements of
operations as loss from operations, respectively.

 The Company's Chief
Executive Officer is the Chief Operating Decision Maker ("CODM"). The CODM manages the Company's business activities
as a single operating and reportable segment. The CODM uses consolidated profit and loss to evaluate and measure performance against
progress in its commercialization efforts and clinical trials. The following table sets forth significant segment expenses.

 Year Ended December 31,

 2024

 2023

 Assets:

 Cash

 $
 106,654

 $
 91,436

 Accounts receivable, net

 372,716

 304,813

 Prepaid expenses and other assets

 24,008

 39,533

 Goodwill

 5,842,433

 5,842,433

 Total Assets

 6,345,811

 6,278,215

 Service revenue:

 2,989,599

 3,804,943

 Operating expenses:

 Legal and professional

 $
 980,897

 $
 839,183

 Salaries and wages

 268,399

 310,988

 Stock compensation

 -

 Other general and administrative

 765,115

 1,208,206

 Total operating expense

 $
 2,005,411

 $
 2,719,740

 Other income (expense)

 Interest expense

 ( 104,201
)

 ( 6,448
)

 Forgiveness of accounts payable

 227,402

 -

 Impairment of goodwill

 -

 ( 2,524,034
)

 Total other income (expense)

 $
 123,201

 $
 ( 2,530,482
)

 Net Loss

 $
)

 $
)

 Note 13. Subsequent Events

 The Company has evaluated
all events that occurred after the consolidated balance sheet date through the date when the consolidated financial statements were issued
to determine if they must be reported. Management has determined that except as disclosed below, there were no additional reportable subsequent
events to be disclosed.

 Financing Transaction

 On January 18, 2025, the Company
closed a Securities Purchase Agreement (the "SPA") with certain accredited investors. Under the SPA, the Company sold a series
of senior secured convertible notes with an aggregate principal amount of $ 1,500,000, that had an initial conversion price of $ 1.25 per
share, subject to certain adjustments and maturity date of December 31, 2025. The Company also issued five year warrants to acquire up
to an aggregate 7,256,364 additional shares of the Company's common stock with exercise prices ranging from $ 1.25 to $ 1.375 per
share.

 Issuance of Shares
for note conversions

 Between
February 3, 2025 and February 27, 2025, the company issued an aggregate 54,980 shares of common stock for the conversion of $ 47,283 in
principal and accrued interest on its convertible loans.

 Issuance of Shares as settlement of other obligations

 On March 14, 2025, the Company
issued 191,250 shares of common stock valued at $ 148,410 as part of a stock settlement agreement for payment of its obligation under its
judgement from Core IR.

 F- 22

 EXHIBIT INDEX

 Pursuant to the rules and regulations
of the SEC, the Company has filed certain agreements as exhibits to this Annual Report on Form 10-K. These agreements may contain representations
and warranties by the parties. These representations and warranties have been made solely for the benefit of the other party or parties
to such agreements and (i) may have been qualified by disclosures made to such other party or parties, (ii) were made only as of the date
of such agreements or such other date(s) as may be specified in such agreements and are subject to more recent developments, which may
not be fully reflected in the Company's public disclosure, (iii) may reflect the allocation of risk among the parties to such agreements
and (iv) may apply materiality standards different from what may be viewed as material to investors. Accordingly, these representations
and warranties may not describe the Company's actual state of affairs at the date hereof and should not be relied upon.

 Exhibit

 Exhibit Description

 3.1

 Certificate of Incorporation, as amended February 1, 2019 (incorporated by reference to Exhibit 3.1 to the Company's 10-K filed with the SEC on April 1, 2019)

 3.3

 Amended and Restated By-laws (Incorporated by reference to Exhibit 3.3 to the Company's Registration Statement on Form S-1 (File No. 333-213166) filed with the SEC on August 16, 2016)

 4.1

 Form of Series A, Series B and Series C Warrant (incorporated by reference to Exhibit 4.1 to the Company's 8-K filed with the SEC on January 23, 2025)

 10.1

 Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Company's 8-K filed with the SEC on January 23, 2025)

 10.2

 Form of Senior Secured Convertible Note (incorporated by reference to Exhibit 10.2 to the Company's 8-K filed with the SEC on January 23, 2025)

 10.3

 Amendment and Consent, Dated November 18, 2024 (incorporated by reference to Exhibit 10.5 to the Company's 8-K filed with the SEC January 23, 2025)

 10.4

 Form of Guaranty and Security Agreement (incorporated by reference to Exhibit 10.4 to the Company's 8-K filed with the SEC on January 23, 2025)

 10.5

 Settlement Agreement with CorProminence LLC, d/b/a Core IR (incorporated by reference to Exhibit 10.8 to the Company's 8-K filed with the SEC on July 15, 2024)

 31.1

 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

 31.2

 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

 32.1

 Section 1350 Certification of the Chief Executive Officer*

 32.2

 Section 1350 Certification of the Chief Financial Officer*

 97.1

 Clawback Policy of SCWorx Corp.*

 101.INS*

 101.SCH*

 101.CAL*

 101.DEF*

 101.LAB*

 101.PRE*

 104*

 *
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herewith

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