OneMedNet Corp

Previous wording

The following discussion and analysis are intended to help you understand our business, financial condition, results of operations, liquidity, and capital resources. You should read this discussion in conjunction with the Company’s consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q (this “Report”) and in the Form 10-K.

Current wording

The following discussion and analysis are intended to help you understand our business, financial condition, results of operations, liquidity, and capital resources. You should read this discussion in conjunction with the Company’s consolidated financial statements and related notes included elsewhere in this Report and in the Form 10-K.

Previous wording

Our revenue is comprised of sales made from our subscription revenue (BEAM) and from our web imaging (iRWD). For the six months ended June 30, 2025, overall revenue decreased by 39%. The primary driver for the decrease in subscription revenue was due to the planned decommissioning of the BEAM platform, which occurred on May 31, 2025. When we made the decision to move away from the BEAM platform to focus on iRWD sales, we stopped renewals for our customers leading to a $0.2 million decrease for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024. The primary driver for the increase in web imaging revenue was due to our enhanced focus on iRWD sales leading to increased customer deliveries during the six months ended June 30, 2025, as compared to the three months ended June 30, 2024.

Current wording

Our revenue is comprised of sales made from our subscription revenue (BEAM) and from our web imaging (iRWD). For the three months ended September 30, 2025, overall revenue increased by 25% compared to the prior year period. The 100% decrease in subscription revenue was due to the decommissioning of the BEAM platform on May 31, 2025, resulting in no revenue during the three months ended September 30, 2025, as compared to $0.1 million for the three months ended September 30, 2024. The primary driver for the increase in web imaging revenue was due to our enhanced focus on iRWD sales leading to increased customer deliveries during the three months ended September 30, 2025, as compared to the three months September 30, 2024.

Previous wording

For the six months ended June 30, 2025, our cost of revenue as a percentage of revenue increased by 117% compared to the prior year period. The increase is primarily driven by the transition away from the BEAM platform, which was decommissioned in May 2025. This has resulted in lower subscription revenue without the benefit of cost savings for the entire comparative period. The increase is also driven by higher iRWD data and personnel costs to support anticipated iRWD sales growth.

Current wording

For the three months ended September 30, 2025, our cost of revenue as a percentage of revenue increased by 66% compared to the prior year period. The increase is primarily driven by the transition away from the BEAM platform, which was decommissioned in May 2025, resulting in no subscription revenue for the three months ended September 30, 2025. The increase is also driven by higher iRWD data and personnel costs to support iRWD sales growth.

Previous wording

Our interest expense decreased $19 thousand, or 46%, to $22 thousand for the three months ended June 30, 2025, from $41 thousand during the three months ended June 30, 2024. The decrease is primarily due to lower interest expense on (i) loans made by related parties (Management and Directors) which got converted into shares of our Common Stock in June 2025 (see Note 6), (ii) the portion of deferred underwriter fees relating to the Business Combination that was payable in cash which got settled in June 2025 (see Note 7) and (iii) our line of credit borrowing which was fully paid off in the fourth quarter of 2024.

Current wording

Our interest expense decreased $30 thousand, or 83%, to $6 thousand for the three months ended September 30, 2025, from $36 thousand during the three months ended September 30, 2024. The decrease is primarily due to lower interest expense on (i) loans made by related parties (Management and Directors) which got converted into shares of our Common Stock in June 2025 (see Note 6), (ii) the portion of deferred underwriter fees relating to the Business Combination that was payable in cash which got settled in June 2025 (see Note 7) and (iii) our line of credit borrowing which was not outstanding during the three months ended September 30, 2025.

Previous wording

At the closing of the Business Combination in 2023, we issued PIPE Notes that are convertible into shares of Common Stock and carried at fair value. The change in fair value is mainly due to the resulting fluctuations in the market price of shares of our Common Stock*.*During the six months ended June 30, 2025, all holders of PIPE Notes provided notice to convert all outstanding principal and accrued interest outstanding into shares of our Common Stock. As such, the decrease in fair value of PIPE Notes during the six months ended June 30, 2025 represents the final mark-to-market adjustment prior to conversion of the PIPE Notes.

Current wording

At the closing of the Business Combination in 2023, we issued PIPE Notes that are convertible into shares of Common Stock and carried at fair value. The change in fair value was mainly due to the resulting fluctuations in the market price of shares of our Common Stock*.*In June 2025, all outstanding principal and accrued interest got converted into shares of our Common Stock. As such, there was no balance outstanding during the three months ended September 30, 2025 and, therefore, no mark-to-market adjustment was required.

Previous wording

In June 2024, we issued the Yorkville Note which is convertible into shares of Common Stock and carried at fair value. The change in fair value is mainly due to the resulting fluctuations in the market price of shares of our Common Stock*.* During the six months ended June 30, 2025, the Yorkville Note matured, and the outstanding principal balance was either converted into shares of our Common Stock or repaid in cash. As such, the decrease in fair value of Yorkville Note during the six months ended June 30, 2025 represents the final mark-to-market adjustments prior to maturity of the Yorkville Note.

Current wording

In June 2024, we issued the Yorkville Note which is convertible into shares of Common Stock and carried at fair value. The decrease in fair value of Yorkville Note is mainly due to the resulting fluctuations in the market price of shares of our Common Stock. In June 2025, the Yorkville Note matured, and the outstanding principal balance was either converted into shares of our Common Stock or repaid in cash. As such, there was no balance outstanding during the three months ended September 30, 2025, and, therefore, no mark-to-market adjustment was required.

Previous wording

The realized gain on sale of crypto assets – Bitcoin during the six months ended June 30, 2025 reflects the increase in the price of Bitcoin upon sale compared to its purchase price. As of June 30, 2024, we did not have any Bitcoin holdings.

Current wording

The realized (gain) loss on sale of crypto assets – Bitcoin reflects the change in the market price of Bitcoin upon sale compared to its purchase price.

Previous wording

During the three months ended June 30, 2024, we had recently entered into the SEPA arrangement and expected to draw on the facility to fund operations as needed. As such, the change in fair value of $0.2 million represents the issuance date fair value of the SEPA, which was driven by expected draws on the facility during the commitment period.

Current wording

During the three months ended September 30, 2025, we had reasonable expectations of making draws on the SEPA facility to fund operations as needed based on our cash position at the end of the period. As such, the change in fair value of $0.4 million is driven by expected draws on the facility during the remaining commitment period.

Previous wording

During the three months ended June 30, 2025, we received gross cash proceeds of $3.7 million in connection with private placements with institutional investors and investments from related parties. As such, we no longer expect to draw on the SEPA and the liability was adjusted to a fair value of $0 leading to a change in fair value of $(0.1) million during the three months ended June 30, 2025.

Current wording

During the three months ended September 30, 2024, we received gross cash proceeds of $6.3 million in connection with private placements with institutional investors. As such, we did not expect to draw on the SEPA and the liability was adjusted to a fair value of $0 leading to a change in fair value of $(0.2) million during the three months ended September 30, 2024.

Previous wording

Our revenue is comprised of sales made from our subscription revenue (BEAM) and from our web imaging (iRWD). For the three months ended June 30, 2025, overall revenue decreased by 32%. The primary driver for the decrease in subscription revenue was due to the planned decommissioning of the BEAM platform, which occurred on May 31, 2025. When we made the decision to move away from the BEAM platform to focus on iRWD sales, we stopped renewals for our customers leading to a $0.1 million decrease for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024. The primary driver for the increase in web imaging revenue was due to our enhanced focus on iRWD sales leading to increased customer deliveries during the three months ended June 30, 2025, as compared to the three months ended June 30, 2024.

Current wording

Our revenue is comprised of sales made from our subscription revenue (BEAM) and from our web imaging (iRWD). For the nine months ended September 30, 2025, overall revenue decreased by 24% compared to the prior year period. The primary driver for the decrease in subscription revenue was due to the planned decommissioning of the BEAM platform, which occurred on May 31, 2025. When we made the decision to move away from the BEAM platform to focus on iRWD sales, we stopped renewals for our customers leading to a $0.3 million decrease for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. The primary driver for the increase in web imaging revenue was due to our enhanced focus on iRWD sales leading to increased customer deliveries during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024.

Previous wording

For the three months ended June 30, 2025, our cost of revenue as a percentage of revenue increased by 110% compared to the prior year period. The increase is primarily driven by the transition away from the BEAM platform, which was decommissioned in May 2025. This has resulted in lower subscription revenue without the benefit of cost savings for the entire comparative period. The increase is also driven by higher iRWD data and personnel costs to support anticipated iRWD sales growth.

Current wording

For the nine months ended September 30, 2025, our cost of revenue as a percentage of revenue increased by 101% compared to the prior year period. The increase is primarily driven by the transition away from the BEAM platform, which was decommissioned in May 2025. This has resulted in lower subscription revenue without the benefit of cost savings for the entire comparative period. The increase is also driven by higher iRWD data and personnel costs to support iRWD sales growth.

Previous wording

Our general and administrative expenses decreased $0.5 million, or 31%, to $1.2 million for the three months ended June 30, 2025, from $1.7 million for the three months ended June 30, 2024. The decrease is primarily due to a one-time commitment fee of $0.5 million paid to Yorkville for the SEPA during the three months ended June 30, 2024.

Current wording

Our general and administrative expenses decreased $0.9 million, or 18%, to $4.0 million for the nine months ended September 30, 2025, from $4.9 million for the nine months ended September 30, 2024. The decrease is primarily due to a decrease in professional fees of $0.4 million and a decrease resulting from a one-time commitment fee of $0.5 million paid to Yorkville for the SEPA. The decrease in professional fees is attributable to higher accounting and audit fees required to file our amended Form 10-K for fiscal years 2023 and 2022, which was not applicable for the nine months ended September 30, 2025.

Previous wording

Our sales and marketing expense increased $59 thousand, or 12%, to $542 thousand for the six months ended June 30, 2025, from $483 thousand for the six months ended June 30, 2024. The increase is primarily due to an increase in personnel costs of $187 thousand which is driven by increased headcount to support iRWD sales growth. This increase is partially offset by a decrease of $83 thousand in consulting expenses as we bring sales and marketing personnel in-house, and a decrease of $46 thousand in trade shows and other miscellaneous expenses.

Current wording

Our sales and marketing expense increased $0.2 million, or 36%, to $0.8 million for the nine months ended September 30, 2025, from $0.6 million for the nine months ended September 30, 2024. The increase is primarily due to an increase in personnel costs of $0.4 million which is driven by increased headcount to support iRWD sales growth, partially offset by a decrease of $0.1 million in consulting expenses as we bring more sales and marketing resources in-house.

Previous wording

Sales and marketing expenses for the three months ended June 30, 2025 were generally consistent with sales and marketing expenses for the three months ended June 30, 2024.

Current wording

Research and development expenses for the nine months ended September 30, 2025, were generally consistent with research and development expenses for the nine months ended September 30, 2024.

Previous wording

Our interest expense decreased $31 thousand, or 37%, to $52 thousand for the three months ended June 30, 2025, from $83 thousand during the three months ended June 30, 2024. The decrease is primarily due to lower interest expense on (i) loans made by related parties (Management and Directors) which got converted into shares of our Common Stock in June 2025 (see Note 6), (ii) the portion of deferred underwriter fees relating to the Business Combination that was payable in cash which got settled in June 2025 (see Note 7) and (iii) our line of credit borrowing which was fully paid off in the fourth quarter of 2024.

Current wording

Our interest expense decreased $61 thousand, or 51%, to $59 thousand for the nine months ended September 30, 2025, from $120 thousand during the nine months ended September 30, 2024. The decrease is primarily due to lower interest expense on (i) loans made by related parties (Management and Directors) which got converted into shares of our Common Stock in June 2025 (see Note 6), (ii) the portion of deferred underwriter fees relating to the Business Combination that was payable in cash which got settled in June 2025 (see Note 7) and (iii) our line of credit borrowing which was not outstanding during the nine months ended September 30, 2025.

Previous wording

At the closing of the Business Combination in 2023, we issued warrants in connection with the PIPE financing and separately assumed certain private warrants from Data Knights. We determined that these warrants should be accounted for as liabilities, which are adjusted to fair value at the end of each reporting period. The increase in fair value of warrants for the six months ended June 30, 2025, compared to the prior period, was mainly due to the resulting fluctuations in the market price of shares of our Common Stock*.*

Current wording

At the closing of the Business Combination in 2023, we issued warrants in connection with the PIPE financing and separately assumed certain private warrants from Data Knights. We determined that these warrants should be accounted for as liabilities, which are adjusted to fair value at the end of each reporting period. The increase in fair value of warrants for the nine months ended September 30, 2025, compared to the prior period, was mainly due to the resulting fluctuations in the market price of shares of our Common Stock*.*

Previous wording

At the closing of the Business Combination in 2023, we issued PIPE Notes that are convertible into shares of Common Stock and carried at fair value. The change in fair value is mainly due to the resulting fluctuations in the market price of shares of our Common Stock*.*During the three months ended June 30, 2025, all holders of PIPE Notes provided notice to convert all outstanding principal and accrued interest outstanding into shares of our Common Stock. As such, the decrease in fair value of PIPE Notes during the three months ended June 30, 2025 represents the final mark-to-market adjustment prior to conversion of the PIPE Notes.

Current wording

At the closing of the Business Combination in 2023, we issued PIPE Notes that are convertible into shares of Common Stock and carried at fair value. The change in fair value is mainly due to the resulting fluctuations in the market price of shares of our Common Stock*.*During the nine months ended September 30, 2025, all holders of PIPE Notes provided notice to convert all outstanding principal and accrued interest outstanding into shares of our Common Stock. As such, the decrease in fair value of PIPE Notes during the nine months ended September 30, 2025 represents the final mark-to-market adjustment prior to conversion of the PIPE Notes.

Previous wording

In June 2024, we issued the Yorkville Note which is convertible into shares of Common Stock and carried at fair value. The decrease in fair value of Yorkville Note is mainly due to the resulting fluctuations in the market price of shares of our Common Stock. During the three months ended June 30, 2025, the Yorkville Note matured, and the outstanding principal balance was either converted into shares of our Common Stock or repaid in cash. As such, the change in fair value during the three months ended June 30, 2025 represents the final mark-to-market adjustments prior to maturity of the Yorkville Note.

Current wording

In June 2024, we issued the Yorkville Note which is convertible into shares of Common Stock and carried at fair value. The change in fair value is mainly due to the resulting fluctuations in the market price of shares of our Common Stock*.* During the nine months ended September 30, 2025, the Yorkville Note matured, and the outstanding principal balance was either converted into shares of our Common Stock or repaid in cash. As such, the decrease in fair value of Yorkville Note during the nine months ended September 30, 2025 represents the final mark-to-market adjustments prior to maturity of the Yorkville Note.

Previous wording

The realized gain on sale of crypto assets – Bitcoin during the three months ended June 30, 2025 reflects the increase in the price of Bitcoin upon sale compared to its purchase price. As of June 30, 2024, we did not have any Bitcoin holdings.

Current wording

The realized (gain) loss on sale of crypto assets – Bitcoin reflects the increase or decrease in the market price of Bitcoin upon sale compared to its purchase price.

Previous wording

During the six months ended June 30, 2025, we received gross cash proceeds of $3.7 million in connection with private placements with institutional investors and investments from related parties. As such, we no longer expect to draw on the SEPA and the liability was adjusted to a fair value of $0, leading to a change in fair value of $(0.4) million during the six months ended June 30, 2025.

Current wording

During the nine months ended September 30, 2024, we received gross cash proceeds of $6.3 million in connection with private placements with institutional investors. As such, we did not expect to draw on the SEPA and the liability was ascribed a fair value of $0 leading to no change in fair value during the three months ended September 30, 2024.

Previous wording

Gain on troubled debt restructuring during the three months ended June 30, 2025 was primarily driven by our settlement of deferred underwriter fees which resulted in a gain of $2.7 million (see Note 7). In addition, we restructured trade payables with three separate vendors leading to an additional gain of $0.9 million (see Note 5). During the three months ended June 30, 2024, we did not restructure any of our debt or trade payables.

Current wording

Gain on troubled debt restructuring during the nine months ended September 30, 2025 was primarily driven by our settlement of deferred underwriter fees which resulted in a gain of $2.8 million (see Note 7) and restructured trade payables with five separate vendors leading to an additional gain of $2.8 million (see Note 5). During the nine months ended September 30, 2024, we did not restructure any of our debt or trade payables.

Previous wording

As of June 30, 2025, our principal sources of liquidity were proceeds from related party investors and private placement transactions and cash received from customers.

Current wording

As of September 30, 2025, our principal sources of liquidity were proceeds from related party investors, private placement transactions, investments in Bitcoin and cash received from customers.

Previous wording

Our net cash and cash equivalents used in operating activities consists of net income (loss) adjusted for certain non-cash items, including depreciation and amortization, stock-based compensation expense, changes in fair value of liability classified financial instruments, as well as changes in operating assets and liabilities. The primary changes in working capital items, such as the changes in accounts receivable and deferred revenue, result from the difference in timing of payments from our customers related to contract performance obligations. This may result in an operating cash flow source or use for the period, depending on the timing of payments received as compared to the fulfillment of the performance obligation.

Current wording

Our net cash and cash equivalents used in operating activities consists of net income (loss) adjusted for certain non-cash items, including depreciation and amortization, stock-based compensation expense, changes in fair value of financial instruments, as well as changes in operating assets and liabilities. The primary changes in working capital items, such as the changes in accounts receivable and deferred revenue, result from the difference in timing of payments from our customers related to contract performance obligations. This may result in an operating cash flow source or use for the period, depending on the timing of payments received as compared to the fulfillment of the performance obligation.

Previous wording

During the six months ended June 30, 2025, we used $4.2 million of cash in operating activities, primarily resulting from non-cash charges of $4.9 million and cash used in our operating assets and liabilities of $0.4 million, offset by our net income of $1.1 million.

Current wording

During the nine months ended September 30, 2025, we used $5.8 million of cash in operating activities, primarily resulting from non-cash charges of $6.3 million, offset by cash provided by changes in our operating assets and liabilities of $0.1 million and our net income of $0.4 million.

Previous wording

During the six months ended June 30, 2024, we used $3.1 million of cash in operating activities, primarily resulting from our net loss of $5.7 million, offset by non-cash charges of $1.4 million and cash provided by changes in our operating assets and liabilities of $1.3 million.

Current wording

During the nine months ended September 30, 2024, we used $5.0 million of cash in operating activities, primarily resulting from our net loss of $7.8 million, offset by non-cash charges of $1.3 million and cash provided by changes in our operating assets and liabilities of $1.5 million.

Previous wording

During the six months ended June 30, 2025, net cash provided by investing activities was $1.3 million, which primarily consisted of Bitcoin activity comprised of $3.5 million in sales, offset by $2.2 million of purchases.

Current wording

During the nine months ended September 30, 2025, net cash provided by investing activities was $2.4 million, which primarily consisted of Bitcoin activity comprised of $4.8 million in sales, offset by $2.4 million of purchases.

Previous wording

During the six months ended June 30, 2025, net cash provided by financing activities was $2.9 million, which consisted of $2.5 million and $1.2 million of proceeds from a private placement and related party investments, respectively, offset by $0.8 million of repayments on outstanding debt facilities.

Current wording

During the nine months ended September 30, 2025, net cash provided by financing activities was $3.4 million, which consisted of $2.5 million and $1.7 million of proceeds from a private placement and related party investments, respectively, offset by $0.8 million of repayments on outstanding debt facilities.

Previous wording

During the six months ended June 30, 2024, net cash provided by financing activities was $3.7 million, which primarily consisted $1.9 million of net proceeds from shareholder loans, $1.4 million of net proceeds under the Yorkville Note and $0.5 million of proceeds under our line of credit borrowing.

Current wording

During the nine months ended September 30, 2024, net cash provided by financing activities was $9.2 million, which primarily consisted of $6.3 million of proceeds from private placements, $1.8 million of net proceeds from shareholder loans and $1.4 million of net proceeds under the Yorkville Note, partially offset by $0.2 million of payments for deferred underwriter fees and common stock repurchase.

Previous wording

The following table summarizes our current and long-term material cash requirements as of June 30, 2025:

Current wording

The following table summarizes our material cash requirements as of September 30, 2025: