OneMedNet Corporation — Q1 2024 Form 10-Q Summary
Reporting period: Three months ended March 31, 2024. The report was signed and issued December 5, 2024. Financial statement amounts below are in U.S. dollars; unless stated otherwise, amounts are in thousands.
Business context and results
OneMedNet provides software for digital medical image management, exchange, and sharing. Revenue comes from BEAM subscriptions and iRWD imaging and data services. The November 2023 business combination affects year-over-year comparability, including weighted-average shares and certain prior-year noncash expenses.
| Metric | Q1 2024 | Q1 2023 | Change |
|---|---|---|---|
| Revenue | $248 | $200 | +24% |
| Cost of revenue | $317 | $289 | +10% |
| Gross loss | $(69) | $(89) | Loss narrowed by $20 |
| Operating expenses | $2,032 | $1,380 | +47% |
| Operating loss | $(2,101) | $(1,469) | Loss widened by $632 |
| Net loss | $(2,109) | $(7,826) | Loss narrowed by $5,717 |
| Adjusted EBITDA (non-GAAP) | $(1,946) | $(1,103) | Loss widened by $843 |
| Net loss per share | $(0.09) | $(1.94) |
Revenue increased $48: BEAM subscription revenue rose 20% to $201, and iRWD web imaging revenue rose 42% to $47. Management attributed the subscription increase chiefly to revenue delivered to a significant customer, and the iRWD increase to deliveries shifted into Q1. Cost of revenue was 128% of revenue versus 145% a year earlier; management cited lower iRWD consulting costs. General and administrative expense rose $819, chiefly from public-company professional fees ($600), salaries and benefits ($100), and bad debt expense ($100). Sales and marketing fell $30; research and development fell $137, including lower stock compensation.
The lower GAAP net loss versus Q1 2023 largely reflects the absence of prior-year noncash fair-value and warrant expenses, including $4,414 of convertible-note fair-value expense and $1,935 of stock warrant expense in Q1 2023. Adjusted EBITDA, by contrast, deteriorated year over year.
Cash, liquidity, and obligations
| Metric at March 31, 2024 | Value |
|---|---|
| Cash and cash equivalents | $174 |
| Current assets | $656 |
| Current liabilities | $14,658 |
| Total liabilities | $16,451 |
| Accumulated deficit | $(93,549) |
| Stockholders’ deficit | $(15,701) |
Operating cash use was $1,547, compared with $1,002 in Q1 2023; investing cash use was $6. Financing provided $1,680, principally $1,300 of related-party loans and $410 from the line of credit. Cash increased from $47 at year-end 2023 to $174. Management and the notes state that available cash is insufficient for at least the next 12 months and that substantial doubt exists about the Company’s ability to continue as a going concern. Management intends to seek additional debt or equity financing, but says funding may not be available on acceptable terms or at all.
At quarter-end, current obligations included $5,875 of accounts payable and accrued expenses, $2,992 of loan extensions, $3,307 of deferred underwriter fees, $1,617 of PIPE Notes, and $411 drawn on a $1.0 million line of credit. The PIPE Notes were due November 7, 2024 and convertible at a price tied to the lower of $10.00 or 92.5% of a specified preceding trading-price measure. Related-party loans totaled $1,777, including a $1.0 million convertible loan; the filing’s contractual-obligations table places these loans in the one-to-three-year bucket. The $0.5 million EF Hutton promissory note was past maturity at March 31 and had triggered default interest. The Company also faced an EF Hutton underwriter-fee true-up described as either $2.8 million cash or 3,175,000 shares.
Outlook, risks, and notable events
- Funding and going concern: Recurring losses, limited cash, and substantial near-term obligations make additional capital a critical requirement. Equity financing could dilute existing holders; debt financing could add repayment and default risks.
- Subsequent financing and Bitcoin: After quarter-end, the Company disclosed approximately $4.6 million of gross proceeds from July private placements and approximately $1.7 million from a September placement. It used $2.8 million and $0.4 million, respectively, of net proceeds to purchase Bitcoin; the filing gives no guaranteed holding period. Remaining proceeds were intended for working capital and general corporate purposes.
- Yorkville arrangements and dispute: A June 2024 standby equity purchase agreement provided for up to $25 million of potential share sales, subject to conditions, including repayment of a Yorkville note and an effective resale registration statement. In October, Yorkville alleged registration-rights and filing-timing breaches and asserted events of default and amortization; discussions were ongoing as of the filing. The note terms provide for possible 18% default interest and amortization with a 10% premium under specified conditions.
- Other post-quarter changes: The $0.4 million bank line was repaid July 30, 2024 and later terminated. The Helena financing agreement was terminated before any funding; the Company issued Helena a 50,000-share warrant and agreed to reimburse certain expenses. The CFO resigned effective August 30 and an interim CFO was appointed. The filing reports additional board departures and appointments in October.
- Controls and reporting: Management concluded disclosure controls were ineffective at March 31 due to material weaknesses, including segregation-of-duties and user-access issues, inadequate formal controls and oversight, accounting for non-routine transactions, and recordkeeping. The cover page also marks “No” for having filed all required reports during the preceding 12 months. The filing reports no material legal proceedings and no material changes to previously disclosed risk factors.
Important facts for investors to verify
- Current cash, cash burn, and the Company’s ability to fund operations and meet obligations as they fall due.
- Status and terms of outstanding debt, including PIPE Notes, related-party loans, the EF Hutton amounts, and any remaining payment obligations.
- Resolution and current balance of the Yorkville dispute, including any default, amortization, registration, or share-issuance consequences.
- Current shares outstanding and potential dilution from financing securities, convertible instruments, warrants, and equity awards. The cover page reports 27,987,427 shares outstanding as of December 5, 2024.
- Bitcoin holdings, valuation and sale policy, and the amount of financing proceeds remaining for operations.
- Progress in remediating internal-control weaknesses and the Company’s filing compliance, including the late Q2 2024 report cited in Yorkville’s letter.
- Revenue concentration and repeatability of the significant-customer contribution and shifted iRWD deliveries that drove Q1 growth.