SCWorx signs LOI to acquire American Environmental Partners

SCWorx announced that on October 20, 2023 it entered into a letter of intent to acquire American Environmental Partners. The LOI sets forth the proposed terms and conditions pursuant to which the Company and American Environmental intend to effect a business combination, as a result of which American Environmental and the Company’s healthcare data management business will each be conducted through wholly-owned subsidiaries of the Company. The Company anticipates that Proposed Transaction will be structured as a share-for-share exchange with SCWorx shareholders retaining 17% of the combined Company, after giving effect to a $6 million capital raise by American Environmental, which is a condition to completion of the Proposed Transaction. The LOI has binding and non-binding components. The binding components require among other things that American Environmental Partners provide the Company $150,000 of working capital, as well as cover its costs to complete the transaction. In addition, both parties are restricted from engaging in discussions with other parties about an acquisition or similar transaction. Upon execution of a definitive agreement, the Company intends to issue a subsequent news release with more details regarding the Proposed Transaction, including the proposed capitalization of the Company upon the closing of the Proposed Transaction. The Company previously engaged Stanton Park, a boutique investment bank, to advise it in connection with the process of reviewing strategic opportunities available to the Company, including the Proposed Transaction. The Proposed Transaction has been approved by the Boards of Directors of both SCWorx and American Environmental and is expected to close in the first quarter of CY 2024. The Transaction will be considered a “reverse merger” because the shareholders of American Environmental will own more than a majority of the outstanding common stock of the Company following completion of the Proposed Transaction. As such, the Proposed Transaction is subject to NASDAQ approving a listing application based on initial inclusion standards. In addition, the closing of the Proposed Transaction is subject to satisfaction of the following conditions: satisfactory completion of due diligence review by both parties, the negotiation, execution and delivery of definitive agreements, American Environmental raising $6 Million of equity, concurrently with the closing, satisfactory completion of an audit of American Environmental’s financial statements, approval by both SCWorx and American Environmental shareholders, as well as other customary closing conditions. There can be no assurance that the Proposed Transaction will be completed as currently contemplated, or at all.