LOS ANGELES, May 21, 2020 (GLOBE NEWSWIRE) — The Law Offices of Frank R. Cruz reminds investors of the upcoming June 29, 2020 deadline to file a lead plaintiff motion in the class action filed on behalf of investors who acquired SCWorx Corp. (“SCWorx” or the “Company”) (NASDAQ: WORX) securities between April 13, 2020 and April 17, 2020, inclusive (the “Class Period”).
If you are a shareholder who suffered a loss, click here to participate.
On April 13, 2020, before the market opened, SCWorx announced that it had received a committed purchase order of two million COVID-19 rapid testing kits, “with provision for additional weekly orders of 2 million units for 23 weeks, valued at $35M per week.”
On this news, the Company’s share price increased by $9.77, to close at $12.02 per share on April 13, 2020.
On April 17, 2020, Hindenburg Research issued a report doubting the validity of the deal, calling it “completely bogus.” Hindenburg Research alleged that the COVID-19 test supplier that SCWorx is buying from, Promedical, has a Chief Executive Officer “who formerly ran another business accused of defrauding its investors and customers” and “was also alleged to have falsified his medical credentials.” According to the report, Promedical claimed to the FDA and regulators in Australia to be offering COVID-19 test kits manufactured by Wondfo, but Wondfo “disavowed any relationship” and the buyer that SCWorx claimed to have lined up does not appear to be “capable of handling hundreds of millions of dollars in orders.”
On this news, the Company’s share price fell $1.19, or more than 17%, over three consecutive trading sessions to close at $5.76 per share on April 21, 2020, on unusually heavy trading volume.
On April 22, 2020, the SEC halted trading of the Company’s stock.
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that SCWorx’s supplier for COVID-19 tests had previously misrepresented its operations; (2) that SCWorx’s buyer was a small company that was unlikely to adequately support the purported volume of orders for COVID-19 tests; (3) that, as a result, the Company’s purchase order for COVID-19 tests had been overstated or entirely fabricated; and (4) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects, were materially misleading and/or lacked a reasonable basis.
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If you purchased or otherwise acquired SCWorx securities during the Class Period, you may move the Court no later than June 29, 2020 to request appointment as lead plaintiff in this putative class action lawsuit. To be a member of the class action you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the class action. If you wish to learn more about this class action, or if you have any questions concerning this announcement or your rights or interests with respect to the pending class action lawsuit, please contact Frank R. Cruz, of The Law Offices of Frank R. Cruz, 1999 Avenue of the Stars, Suite 1100, Los Angeles, California 90067 at 310-914-5007, by email to [email protected]zlaw.com, or visit our website at www.frankcruzlaw.com. If you inquire by email please include your mailing address, telephone number, and number of shares purchased.
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