Commitments and Contingencies
|9 Months Ended|
Sep. 30, 2023
|Commitments and Contingencies Disclosure [Abstract]|
|Commitments and Contingencies||
Note 5. Commitments and Contingencies
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 period reports filed with he 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 $190,000.00 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 $257,545.63. The Company received the final decision of the Arbitrator on October 16, 2023, awarding Core IR $461,856.15, including unpaid compensation, indemnification for legal fees and costs, prevailing party legal fees and interest (the “Award”). The payment is required to be made within thirty days of the Award. The Company is currently evaluating its legal options, including commencing legal action to set aside the Award. The Company may or may not be able to obtain a modification/reversal of the Award. If the Company is not able to obtain a modification/reversal, the Company will be obligated to pay the amount of the Award.
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 seeks $500,000 in damages. To date, the Complaint has not been served. 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 filed a Second Amended Complaint which the Company has answered. The Company and Plaintiffs have reached an agreement in principle to resolve this matter and are currently negotiating a settlement agreement. The agreement in principle calls for the Company to issue the Plaintiffs 30,000 shares of restricted common stock and make a cash payment of $20,000 upon the earlier of the closing of the planned business combination transaction previously disclosed and March 1, 2024.
Carole R. Bernstein, Esq. v. SCWorx Corp.
As previously disclosed in the Company’s Form 10-Q for the quarter ended June 30, 2023, on June 7, 2023, Carole R. Bernstein, Esq. filed a complaint in the United States District Court for the Southern District of New York against the Company. The complaint alleges that the Company breached its engagement agreement with Ms. Bernstein by failing to pay legal fees when due. Ms. Bernstein is seeking to recover $69,163.98 fees owing for services, plus interest, costs, including her attorney’s fees. At the request of the Plaintiff, the Clerk of the Court entered a default against the Company for failure to file responsive pleadings in a timely fashion. The Plaintiff has since moved the Court for entry of a default judgment. The Company has filed a motion to oppose Plaintiff’s motion for the entry of a default judgment and cross-moved for an order to vacate the default. These motions are currently pending before the Court.
The entire disclosure for commitments and contingencies.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef