NEW YORK, NY - (NewMediaWire) - June 12, 2020 - Faruqi & Faruqi, LLP, a leading national securities law firm, reminds investors in SCWorx Corp. (“SCWorx” or the “Company”) (NASDAQ:WORX) of the June 29, 2020 deadline to seek the role of lead plaintiff in a federal securities class action that has been filed against the Company.
If you invested in SCWorx stock or options between April 13, 2020 and April 17, 2020 and would like to discuss your legal rights, click here: www.faruqilaw.com/WORX. There is no cost or obligation to you.
You can also contact us by calling Richard Gonnello toll free at 877-247-4292 or at 212-983-9330 or by sending an e-mail to firstname.lastname@example.org.
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The lawsuit has been filed in the U.S. District Court for the Southern District of New York on behalf of all those who purchased SCWorx securities between April 13, 2020 and April 17, 2020 (the “Class Period”). The case, Yannes v. SCWorx Corp. et al. was filed on April 29, 2020.
The lawsuit focuses on whether the Company and its executives violated federal securities laws by making false and/or misleading statements and/or failing to disclose: (1) that SCWorx’s supplier for COVID-19 tests had previously misrepresented its operations; (2) that SCWorx’s buyer was a small company that was unlikely to adequately support the purported volume of orders for COVID-19 tests; (3) that, as a result, the Company’s purchase order for COVID-19 tests had been overstated or entirely fabricated; and (4) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects, were materially misleading and/or lacked a reasonable basis.
On 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 stock price fell, over the following three trading sessions, from $6.95 per share on April 16, 2020 to $5.76 on April 21, 2020: a $1.19 or 17.12% drop.
On April 22, 2020, the SEC halted trading of the Company’s stock.
The court-appointed lead plaintiff is the investor with the largest financial interest in the relief sought by the class who is adequate and typical of class members who directs and oversees the litigation on behalf of the putative class. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. Your ability to share in any recovery is not affected by the decision to serve as a lead plaintiff or not.
Faruqi & Faruqi, LLP also encourages anyone with information regarding SCWorx’s conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
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