UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2024

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

FOR THE TRANSITION PERIOD FROM TO

Commission File Number 001-40386

ONEMEDNET CORPORATION

(Exact name of Registrant as specified in its Charter)

Delaware		86-2076743
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

6385 Old Shady Oak Road, Suite 250 Eden Prairie, Minnesota		55344
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (800) 918-7189

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.0001 per share	ONMD	The Nasdaq Stock Market LLC
Redeemable Warrants, each exercisable for one share of Common Stock at an exercise price of $11.50 per share	ONMDW	The Nasdaq Stock Market LLC

Indicate by check mark whether the Registrant: (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 ☒

Indicate by check mark whether the Registrant 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 ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of December 17, 2024, there were 27,987,427 shares of common stock, par value $0.0001 per share, issued and outstanding.

Table of Contents

		Page

	CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS	ii

PART I.	FINANCIAL INFORMATION	1

Item 1.	Condensed Consolidated Financial Statements	1
	Unaudited Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023	1
	Unaudited Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2024 and 2023	2
	Unaudited Condensed Consolidated Statements of Changes in Temporary Equity and Stockholders’ Deficit for the three and nine months ended September 30, 2024 and 2023	3
	Unaudited Condensed Consolidated Statements of Cash Flows for the nine months September 30, 2024 and 2023	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	24

PART II.	OTHER INFORMATION	25

Item 1.	Legal Proceedings	25
Item 1A.	Risk Factors	25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 3.	Defaults Upon Senior Securities	25
Item 4.	Mine Safety Disclosures	25
Item 5.	Other Information	25
Item 6.	Exhibits	25
Signatures		26

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements that we make from time to time, including statements contained in this Quarterly Report on Form 10-Q (“Form 10-Q”) constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, and of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts contained in this Form 10-Q are forward-looking statements. The forward-looking statements in this Form 10-Q are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition, and results of operations. In some cases, you can identify these forward-looking statements by terms such as “anticipate,” “believe,” “continue,” “could,” “depends,” “estimate,” “expects,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” or the negative of those terms or other similar expressions, although not all forward-looking statements contain those words. We have based these forward-looking statements on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, strategy, short- and long-term business operations and objectives, and financial needs.

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 Form 10-Q 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 Form 10-Q and other documents we file with the SEC. 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 projected financial position and estimated cash burn rate;

	●	our estimates regarding expenses, future revenues and capital requirements;

	●	our ability to continue as a going concern;

	●	our ability to raise substantial additional capital in sufficient amounts or on acceptable terms to fund our operations and our business plan;

	●	our ability to reverse the recent decline in our revenue and resume growing our revenue;

	●	our ability to obtain and maintain intellectual property protection for our current products and services;

	●	our ability to protect our intellectual property rights and the potential for us to incur substantial costs from lawsuits to enforce or protect our intellectual property rights;

	●	the possibility that a third party may claim we have infringed, misappropriated or otherwise violated their intellectual property rights and that we may incur substantial costs and be required to devote substantial time defending against these claims;

	●	our reliance on third-party suppliers;

	●	the success of competing products or services that are or become available;

	●	our ability to expand our organization to accommodate potential growth and our ability to retain and attract key personnel; and

	●	the potential for us to incur substantial costs resulting from lawsuits against us and the potential for these lawsuits to cause us to limit our commercialization of our products and services.

These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in “Risk Factors” in our Form 10-K/A and in other documents we file with the SEC. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this Form 10-Q may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, except as required by law, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Form 10-Q to conform these statements to actual results or to changes in our expectations.

You should read this Form 10-Q and the documents that we incorporate by reference in this Form 10-Q with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially different from what we expect. As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements including those described in this Form 10-Q and in the “Risk Factors” section of our Form 10-K/A and other documents we file with the SEC.

PART I—FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

ONEMEDNET CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

(Unaudited)

	September 30, 2024			December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	1,934		$	47
Bitcoin		2,156			-
Accounts receivable, net		63			152
Prepaid expenses and other current assets		151			166
Total current assets		4,304			365
Property and equipment, net		84			99
Total assets	$	4,388		$	464
Liabilities and stockholders’ deficit
Current liabilities:
Accounts payable and accrued expenses	$	6,161		$	4,965
Deferred revenues		428			254
Loan extensions		2,992			2,992
PIPE Notes		1,593			1,637
Yorkville Note		1,911			-
Deferred underwriter fee payable		3,237			3,525
Loan – related party		2,306			465
Total current liabilities		18,628			13,838
Other long-term liabilities		28			68
Total liabilities		18,656			13,906
Commitments and contingencies (Note 13)		-			-
Stockholders’ deficit:
Preferred Stock, par value $0.0001, 1,000,000 shares authorized at September 30, 2024 and December 31, 2023; no shares issued and outstanding at September 30, 2024 and December 31, 2023		-			-
Common Stock, par value $0.0001; 100,000,000 shares authorized, 28,175,172 shares issued and 27,987,427 shares outstanding at September 30, 2024, and 23,572,232 shares issued and outstanding as of December 31, 2023		2			2
Additional paid-in capital		85,455			77,996
Treasury stock, at cost, 187,745 and 0 shares at September 30, 2024 and December 31, 2023, respectively		(529	)		-
Accumulated deficit		(99,196	)		(91,440	)
Total stockholders’ deficit		(14,268	)		(13,442	)
Total liabilities and stockholders’ deficit	$	4,388		$	464

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

ONEMEDNET CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

(Unaudited)

	2024			2023			2024			2023
	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Revenue
Subscription revenue	$	102		$	256		$	443		$	595
Web imaging revenue		40			70			174			86
Total revenue		142			326			617			681
Cost of revenue		226			293			872			812
Gross margin		(84	)		33			(255	)		(131	)
Operating expenses
General and administrative		1,865			1,312			4,934			2,475
Sales and marketing		140			243			623			813
Research and development		298			405			1,127			1,566
Total operating expenses		2,303			1,960			6,684			4,854
Loss from operations		(2,387	)		(1,927	)		(6,939	)		(4,985	)
Other expense (income), net
Interest expense		36			-			120			-
Change in fair value of warrants		6			-			5			-
Change in fair value of PIPE Notes		(77	)		-			(44	)		-
Change in fair value of Yorkville Note		(262	)		-			561			-
Change in fair value of derivative liability		(160	)		-			-			-
Change in fair value of Bitcoin		124			-			124			-
Change in fair value of convertible promissory notes		-			7,621			-			17,872
Stock warrant expense		-			4,285			33			8,385
Other expense		4			7			17			42
Total other expense (income), net		(329	)		11,913			816			26,299
Net loss	$	(2,058	)	$	(13,840	)	$	(7,755	)	$	(31,284	)

Earnings per share:
Basic and diluted net loss per common share outstanding	$	(0.07	)	$	(3.23	)	$	(0.31	)	$	(7.56	)

Basic and diluted weighted average number of common shares outstanding		27,878,399			4,280,777			25,051,293			4,139,730

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

ONEMEDNET CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN TEMPORARY EQUITY AND

STOCKHOLDERS’ DEFICIT

(In thousands, except share data)

(Unaudited)

Three and Nine Months Ended September 30, 2024

				Shares		Amount		Shares			Amount			Capital		Deficit			Deficit
														Additional					Total
				Common Stock				Treasury Stock						Paid-in		Accumulated			Stockholders’
				Shares		Amount		Shares			Amount			Capital		Deficit			Deficit
Balances as of December 31, 2023	-	-	-		23,572,232	$	2		-		$	-		$	77,996	$	(91,440	)	$	(13,442	)
Issuance of common stock to settle deferred underwriter fee payable					277,778		-		-			-			242		-			242
Stock-based compensation expense					-		-		-			-			137		-			137
Repurchase of common stock					-		-		(187,745	)		(529	)		-		-			(529	)
Net loss	-	-	-		-		-		-			-			-		(2,109	)		(2,109	)
Balances as of March 31, 2024	-	-	-		23,850,010		2		(187,745	)		(529	)		78,375		(93,549	)		(15,701	)
Vesting of restricted stock units					200,000		-		-			-			-		-			-
Stock-based compensation expense					-		-		-			-			103		-			103
Net loss	-	-	-		-		-		-			-			-		(3,589	)		(3,589	)
Balances as of June 30, 2024	-	-	-		24,050,010	$	2		(187,745	)	$	(529	)	$	78,478	$	(97,138	)	$	(19,187	)
Issuance of common stock and pre-funded warrants in connection with private placements, net of issuance costs					3,598,850		-		-			-			6,270		-			6,270
Issuance of common stock to settle Yorkville commitment fee					526,312		-		-			-			500		-			500
Stock-based compensation expense					-		-		-			-			207		-			207
Net loss	-	-	-		-		-		-			-			-		(2,058	)		(2,058	)
Balances as of September 30, 2024	-	-	-		28,175,172	$	2		(187,745	)	$	(529	)	$	85,455	$	(99,196	)	$	(14,268	)

Three and Nine Months Ended September 30, 2023

Total

Series A-2

Series A-1

Temporary

Additional

Total

Preferred Stock

Equity

Common Stock

Paid-in

Accumulated

Stockholders’

Amount

Capital

Deficit

Balances as of December 31, 2022

3,415,923

9,634

2,839,957

8,010

17,644

SEC Form 10-Q filed by OneMedNet Corp