OneMedNet (ONMD) - 2025 Q2 - Quarterly Report

Cautionary Note Regarding Forward-Looking Statements This section highlights inherent risks and uncertainties that could cause actual results to differ materially from forward-looking statements - This report contains forward-looking statements based on current expectations and projections, which are subject to known and unknown risks and uncertainties that could cause actual results to differ materially[9][10][11] - Key risks include projected financial position, cash burn rate, ability to raise additional capital, Bitcoin investment volatility, ability to reverse revenue decline, intellectual property protection, reliance on third-party suppliers, competition, and geopolitical/macroeconomic conditions[11][12][15] Part I. Financial Information This part presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations Item 1. Condensed Consolidated Financial Statements This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, changes in stockholders' deficit, and cash flows, along with detailed notes explaining the company's business, accounting policies, financial instruments, and related party transactions Unaudited Condensed Consolidated Balance Sheets This section provides a snapshot of the company's financial position, detailing assets, liabilities, and stockholders' deficit at specific reporting dates Unaudited Condensed Consolidated Balance Sheets | (In thousands) | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :---------------- | | Assets | | | | Cash and cash equivalents | $122 | $172 | | Investment in crypto assets – Bitcoin | $1,598 | $2,849 | | Total current assets | $2,267 | $3,619 | | Total assets | $2,337 | $3,727 | | Liabilities and Stockholders' Deficit | | | | Accounts payable and accrued expenses | $5,247 | $6,654 | | Total current liabilities | $6,159 | $19,228 | | Total liabilities | $6,177 | $19,677 | | Total stockholders' deficit | $(3,840) | $(15,950) | - Total assets decreased by approximately 37% from $3.7 million at December 31, 2024, to $2.3 million at June 30, 2025, primarily due to a reduction in Bitcoin holdings and other current assets[18] - Total liabilities significantly decreased by approximately 69% from $19.7 million at December 31, 2024, to $6.2 million at June 30, 2025, largely driven by the conversion and repayment of various debt instruments (Loan extensions, PIPE Notes, Yorkville Note, Deferred underwriter fee payable, Loans – related parties)[18] - Stockholders' deficit improved from $(15.9) million at December 31, 2024, to $(3.8) million at June 30, 2025, reflecting net income and equity issuances[18] Unaudited Condensed Consolidated Statements of Operations This section outlines the company's financial performance over specific periods, including revenue, expenses, and net income or loss Unaudited Condensed Consolidated Statements of Operations | (In thousands, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenue | $155 | $227 | $292 | $476 | | Gross margin | $(241) | $(102) | $(445) | $(170) | | Total operating expenses | $1,822 | $2,352 | $3,906 | $4,384 | | Loss from operations | $(2,063) | $(2,454) | $(4,351) | $(4,554) | | Total other expense (income), net | $(5,045) | $1,135 | $(5,431) | $1,144 | | Net income (loss) | $2,982 | $(3,589) | $1,080 | $(5,698) | | Net income (loss) per share – basic | $0.07 | $(0.14) | $0.03 | $(0.23) | - The company reported a net income of $2.98 million for the three months ended June 30, 2025, a significant improvement from a net loss of $3.59 million in the prior-year period, primarily driven by a $3.71 million gain on troubled debt restructurings[20] - For the six months ended June 30, 2025, the company achieved a net income of $1.08 million, compared to a net loss of $5.70 million in the same period of 2024, also largely due to gains from debt restructurings[20] - Total revenue decreased by 32% for the three months and 39% for the six months ended June 30, 2025, primarily due to the decommissioning of the BEAM platform, partially offset by increased web imaging (iRWD) revenue[20] Unaudited Condensed Consolidated Statements of Changes in Stockholders' Deficit This section details changes in the company's equity over time, including common stock issuances, stock-based compensation, and net income or loss Unaudited Condensed Consolidated Statements of Changes in Stockholders' Deficit | (In thousands, except share data) | Common Stock Shares (000s) | Common Stock Amount | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders' Deficit | | :-------------------------------- | :------------------------- | :------------------ | :------------------------- | :------------------ | :-------------------------- | | Balance, Dec 31, 2024 | 28,175 | $2 | $86,146 | $(101,569) | $(15,950) | | Issuance of common stock (various) | 18,108 | $0 | $11,030 | $0 | $11,030 | | Stock-based compensation expense | 0 | $0 | $405 | $0 | $405 | | Net income (loss) | 0 | $0 | $0 | $1,080 | $1,080 | | Balance, June 30, 2025 | 46,283 | $2 | $97,176 | $(100,489) | $(3,840) | - The total number of common shares outstanding increased significantly from 28,175,172 at December 31, 2024, to 46,283,392 at June 30, 2025, primarily due to conversions of various debt instruments and new private placements[18][23] - Additional paid-in capital increased by $11.03 million during the six months ended June 30, 2025, reflecting proceeds from private placements and conversions of debt into equity[23] Unaudited Condensed Consolidated Statements of Cash Flows This section presents the company's cash inflows and outflows from operating, investing, and financing activities over specific periods Unaudited Condensed Consolidated Statements of Cash Flows | (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(4,232) | $(3,053) | | Net cash provided by (used in) investing activities | $1,250 | $(7) | | Net cash provided by financing activities | $2,932 | $3,720 | | Net (decrease) increase in cash and cash equivalents | $(50) | $660 | | Cash and cash equivalents at end of period | $122 | $707 | - Net cash used in operating activities increased to $4.23 million for the six months ended June 30, 2025, from $3.05 million in the prior-year period[28] - Investing activities provided $1.25 million in cash for the six months ended June 30, 2025, primarily from Bitcoin sales ($3.46 million) offsetting purchases ($2.20 million)[28] - Financing activities provided $2.93 million in cash, mainly from private placements and related party investments, partially offset by debt repayments[28] Notes to Unaudited Condensed Consolidated Financial Statements This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements, covering accounting policies, debt, and equity Note 1. Description of Business This note describes the company's core business, its operational context, and key risks related to its financial viability and crypto asset investments - OneMedNet Corporation is a healthcare software company focused on digital medical image management, exchange, and sharing, operating as a wholly-owned subsidiary of Data Knights Acquisition Corp. following a business combination on November 7, 2023[31][32] - The company has incurred recurring operating losses and has an accumulated deficit of $100.5 million as of June 30, 2025, raising substantial doubt about its ability to continue as a going concern[36] - The company's investment in Bitcoin exposes it to significant risks due to crypto asset volatility, lack of central regulation, and potential future regulatory actions that could reduce demand and value[39][40][41] Note 2. Summary of Significant Accounting Policies This note outlines the key accounting principles and methods used in preparing the financial statements, including EPS calculation and debt restructuring policies - The company calculates basic and diluted net income (loss) per share using the two-class method for participating securities, with pre-funded warrants considered outstanding shares in basic EPS calculation[44][45] - Debt modifications are evaluated under ASC 470-60 as troubled debt restructurings (TDR) if the borrower is in financial difficulty and the lender grants a concession, with gains recognized if the debt's carrying amount exceeds the fair value of transferred consideration[47][48] - As an 'emerging growth company,' the company has elected to use the extended transition period for complying with new or revised accounting standards[49] Note 3. Segment Information This note details the company's operating segments and geographical revenue breakdown, confirming its single-segment operation - The company operates and reports as a single segment, focusing on digital medical image management, exchange, and sharing, with the CEO reviewing operating results on an aggregate basis[52] Revenue by Geography (In thousands) | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Americas | $55 | $170 | $174 | $348 | | Europe and Middle East | $65 | $57 | $69 | $128 | | Asia Pacific | $35 | $- | $49 | $- | | Total | $155 | $227 | $292 | $476 | Note 4. Crypto Assets Held This note provides information on the company's Bitcoin holdings, including fair value measurement, additions, dispositions, and unrealized gains or losses - The company's crypto assets consist solely of Bitcoin, measured at fair value based on quoted end-of-day prices on River.com (Level 1 input)[54] Bitcoin Holdings (In thousands) | (In thousands) | Units | Cost Basis | Fair Value | | :------------- | :---- | :--------- | :--------- | | Bitcoin | 15 | $1,636 | $1,598 | Bitcoin Activity (In thousands) | (In thousands) | Bitcoin | | :------------- | :------ | | Balance, Dec 31, 2024 | $2,849 | | Additions | $2,200 | | Dispositions | $(2,614) | | Unrealized loss, net | $(837) | | Balance, June 30, 2025 | $1,598 | - During the six months ended June 30, 2025, the company acquired $2.2 million in Bitcoin and disposed of $2.6 million, resulting in a net unrealized loss of $0.84 million and a realized gain on sale of $0.84 million[55] Note 5. Accounts Payable and Accrued Expenses This note details the composition and changes in accounts payable and accrued expenses, including professional fees and the impact of debt restructurings Accounts Payable and Accrued Expenses (In thousands) | (In thousands) | As of June 30, 2025 | As of December 31, 2024 | | :-------------------------- | :------------------ | :---------------------- | | Professional fees | $3,579 | $4,965 | | Payroll liabilities | $621 | $621 | | Stock repurchase payable | $329 | $329 | | Data provider costs | $319 | $367 | | Other | $399 | $372 | | Total | $5,247 | $6,654 | - Accounts payable and accrued expenses decreased by $1.4 million, or 21%, from December 31, 2024, to June 30, 2025, primarily due to a reduction in professional fees[56] - The company settled $1.3 million of trade payables through troubled debt restructurings, resulting in a gain of $0.9 million, by transferring $0.2 million in cash and 250,000 shares of common stock valued at $0.1 million[56] Note 6. Debt This note provides a detailed breakdown of the company's debt instruments, including conversions, repayments, and troubled debt restructurings - PIPE Notes: $1.7 million of outstanding principal and accrued interest were converted into 1,453,174 shares of Common Stock in June 2025, resulting in no outstanding balance as of June 30, 2025[58] - Loan Extensions: $2.6 million of related party loan extensions were converted into 3,650,248 shares of Common Stock in June 2025, accounted for as a troubled debt restructuring with no gain/loss recognized; $0.4 million remains outstanding[61][62] - Shareholder Loans: $1.6 million in convertible shareholder loans and $0.7 million in non-convertible shareholder loans were converted into 2,123,424 and 1,043,051 shares of Common Stock, respectively, in June 2025, with the non-convertible conversion treated as a troubled debt restructuring[64][66] - Yorkville Note: The $1.5 million convertible promissory note matured in June 2025, with $1.25 million converted into 1,866,562 shares of Common Stock and the remaining $0.3 million repaid in cash, leaving no outstanding balance[68][75] Note 7. Stockholders' Deficit This note details changes in stockholders' deficit, including common stock issuances, private placements, and the settlement of deferred underwriter fees - The company issued 1,473,696 shares of Common Stock in January 2025 related to a September 2024 private placement[77] - In June 2025, the company completed a private placement, issuing 3,390,923 shares of Common Stock and pre-funded warrants for 2,561,457 shares, generating $2.5 million in net proceeds[78] - Related party subscription agreements in June 2025 resulted in the issuance of 2,857,142 shares of Common Stock for $1.2 million in gross proceeds through subscription agreements in June 2025[79] - A $3.3 million deferred underwriter fee payable was settled in June 2025 with a $0.5 million cash payment, resulting in a $2.8 million gain on troubled debt restructuring[81][83] - The Standby Equity Purchase Agreement (SEPA) with Yorkville allows the company to sell up to $25.0 million of Common Stock; however, due to recent financings, the company no longer expects to draw on the SEPA, and the related derivative liability was adjusted to $0[86][92] Note 8. Net Income (Loss) per Share This note presents the calculation of basic and diluted net income or loss per share, including the impact of anti-dilutive securities Net Income (Loss) per Share (In thousands, except per share data) | (In thousands, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) attributable to common shareholders – basic | $2,757 | $(3,589) | $1,000 | $(5,698) | | Weighted average shares outstanding – basic | 36,835,945 | 25,180,764 | 35,477,382 | 24,957,754 | | Net income (loss) per share – basic | $0.07 | $(0.14) | $0.03 | $(0.23) | | Weighted average shares outstanding – diluted | 38,405,921 | 25,180,764 | 37,127,798 | 24,957,754 | | Net income (loss) per share – diluted | $0.07 | $(0.14) | $0.03 | $(0.23) | - For periods of net loss (e.g., June 30, 2024), all potentially dilutive securities are excluded from diluted EPS calculation as they are anti-dilutive[94] Anti-Dilutive Securities | Anti-Dilutive Securities | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Warrants for Common Stock | 12,330,336 | 12,181,020 | 12,303,995 | 12,181,020 | | Convertible debt | - | 8,935,634 | - | 8,935,634 | | Total common stock equivalents | 13,074,243 | 29,140,859 | 12,993,803 | 29,140,859 | Note 9. Stock-Based Compensation This note details the stock-based compensation expense recognized across various functional areas for the reported periods Stock-Based Compensation Expense (In thousands) | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Cost of revenue | $4 | $4 | $7 | $8 | | General and administrative | $187 | $92 | $388 | $220 | | Sales and marketing | $1 | $2 | $2 | $3 | | Research and development | $5 | $5 | $8 | $9 | | Total stock-based compensation expense | $197 | $103 | $405 | $240 | - Total stock-based compensation expense increased by 91% to $197 thousand for the three months ended June 30, 2025, and by 69% to $405 thousand for the six months ended June 30, 2025, primarily driven by general and administrative expenses[97] Note 10. Stock Warrants This note provides a breakdown of outstanding stock warrants, distinguishing between liability and equity classified warrants and explaining changes Stock Warrants Outstanding | Warrant Type | As of June 30, 2025 | As of December 31, 2024 | | :------------------------ | :------------------ | :---------------------- | | Liability Classified Warrants | | | | Business Combination Warrants | 585,275 | 585,275 | | PIPE Warrants | 95,744 | 95,744 | | Subtotal | 681,019 | 681,019 | | Equity Classified Warrants | | | | Public Warrants | 11,500,000 | 11,500,000 | | Private Placement Warrants | 5,206,291 | 2,199,939 | | Helena Termination Warrants | 50,000 | 50,000 | | Subtotal | 16,756,291 | 13,749,939 | | Grand Total | 17,437,310 | 14,430,958 | - Total outstanding warrants increased from 14.4 million at December 31, 2024, to 17.4 million at June 30, 2025, primarily due to an increase in Private Placement Warrants by 3,006,352 shares[98] - The increase in Private Placement Warrants includes 444,895 shares from a warrant amendment in January 2025 and 2,561,457 June 2025 Pre-Funded Warrants issued in connection with a private placement[98] Note 11. Fair Value Measurements This note details the fair value measurements of the company's financial assets and liabilities, including crypto assets, warrants, and debt instruments Fair Value Measurements (In thousands) | (In thousands) | June 30, 2025 (Total) | December 31, 2024 (Total) | | :-------------------------- | :-------------------- | :------------------------ | | Assets: | | | | Investment in crypto assets – Bitcoin | $1,598 | $2,849 | | Liabilities: | | | | Business Combination Warrants | $15 | $12 | | PIPE Warrants | $3 | $3 | | PIPE Notes | $- | $1,734 | | Yorkville Note | $- | $1,718 | | SEPA derivative liability | $- | $434 | - The fair value of PIPE Notes and Yorkville Note decreased to $0 as of June 30, 2025, due to conversions into Common Stock and cash repayments[101] - The SEPA derivative liability was adjusted to a fair value of $0 as of June 30, 2025, as the company no longer expects to draw on the SEPA due to recent financings[103] - Fair values for Business Combination Warrants and PIPE Warrants are determined using the Black-Scholes option-pricing model, with key assumptions including stock price, exercise price, expected volatility, risk-free rate, and expected term[100] Note 12. Related Party Transactions This note discloses significant transactions with related parties, primarily involving debt conversions and equity issuances - Related party investors converted $1.0 million of PIPE Notes into 972,326 shares of Common Stock in June 2025[104] - Related party investors converted $1.6 million in convertible shareholder loans and $0.7 million in non-convertible shareholder loans into an aggregate of 3,166,476 shares of Common Stock in June 2025[106] - Two related party investors converted $2.6 million of loan extensions into 3,650,248 shares of Common Stock in June 2025[107] - The company issued 2,857,142 shares of Common Stock to two related party investors for $1.2 million in gross proceeds through subscription agreements in June 2025[108] Note 13. Commitments and Contingencies This note outlines the company's lease commitments and confirms the absence of material legal proceedings - The company has a month-to-month lease for a suite at $530 per month, incurring $2 thousand in rent expense for each of the three months ended June 30, 2025 and 2024, and $5 thousand for each of the six months[109] - The company is not currently party to any material legal proceedings that would have a material adverse effect on its business, operating results, financial condition, or cash flows[110] Note 14. Subsequent Events This note reports significant events occurring after the balance sheet date, including new legislation, vendor settlements, and amended loan agreements - On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted, which includes significant tax provisions that the company is currently assessing for impact on its financial statements[111] - On July 10, 2025, the company settled $1.9 million in outstanding balances with two vendors for an aggregate reduced fee of $50 thousand[112] - On July 11, 2025, an amended loan extension agreement for $0.1 million was entered into, bearing 6.0% interest and maturing June 15, 2027, with 24 monthly payments[113] - On July 15, 2025, an amended promissory note agreement for a $0.3 million stock repurchase commitment was entered into, bearing 7.0% interest (retroactive to March 1, 2024) and maturing June 15, 2028, with 36 monthly payments[114] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition, results of operations, liquidity, and capital resources, including a detailed comparison of financial performance for the three and six months ended June 30, 2025 and 2024 Company Overview This section provides a high-level description of OneMedNet's business, focusing on its solutions for digital medical image management and exchange - OneMedNet provides solutions (OneMedNet iRWD™ and BEAM) for digital medical image management, exchange, and sharing, focusing on unlocking value from clinical image archives for research and healthcare systems[118] Key Components of Consolidated Statements of Operations This section explains the primary revenue and expense categories within the consolidated statements of operations and their recognition policies - Revenue is generated from iRWD (fixed fee, recognized upon data delivery) and BEAM (subscription-based, recognized ratably over period)[119] - Cost of revenue includes hosting, labor, and data costs[121] - Other (income) expenses, net, primarily includes changes in fair value of PIPE Notes, Yorkville Note, warrants, Bitcoin holdings, derivative liabilities, and gains on troubled debt restructurings[126][127] Results of Operations This section analyzes the company's financial performance by comparing key financial metrics and trends across different reporting periods Comparison of the Three Months Ended June 30, 2025 and 2024 This section provides a detailed comparative analysis of the company's financial performance for the three-month periods ended June 30, 2025 and 2024 Results of Operations (In thousands) | (In thousands) | June 30, 2025 | June 30, 2024 | Change ($) | Change (%) | | :-------------------------- | :------------ | :------------ | :--------- | :--------- | | Total revenue | $155 | $227 | $(72) | -32% | | Cost of revenue | $396 | $329 | $67 | 20% | | Gross margin | $(241) | $(102) | $(139) | 136% | | General and administrative | $1,183 | $1,716 | $(533) | -31% | | Loss from operations | $(2,063) | $(2,454) | $391 | -16% | | Net income (loss) | $2,982 | $(3,589) | $6,571 | -183% | - Subscription revenue (BEAM) decreased by 67% due to the planned decommissioning of the platform, while web imaging revenue (iRWD) increased by 26% due to enhanced focus and increased customer deliveries[130] - Cost of revenue as a percentage of revenue increased by 110% due to the BEAM platform transition and higher iRWD data/personnel costs[133] - General and administrative expenses decreased by 31% due to a one-time commitment fee paid to Yorkville in the prior year[134] - A significant gain on troubled debt restructurings of $3.71 million was recorded, primarily from settling deferred underwriter fees ($2.7 million) and restructuring trade payables ($0.9 million)[146] Comparison of the Six Months Ended June 30, 2025 and 2024 This section provides a detailed comparative analysis of the company's financial performance for the six-month periods ended June 30, 2025 and 2024 Results of Operations (In thousands) | (In thousands) | June 30, 2025 | June 30, 2024 | Change ($) | Change (%) | | :-------------------------- | :------------ | :------------ | :--------- | :--------- | | Total revenue | $292 | $476 | $(184) | -39% | | Cost of revenue | $737 | $646 | $91 | 14% | | Gross margin | $(445) | $(170) | $(275) | 162% | | General and administrative | $2,615 | $3,073 | $(458) | -15% | | Loss from operations | $(4,351) | $(4,554) | $203 | -4% | | Net income (loss) | $1,080 | $(5,698) | $6,778 | -119% | - Subscription revenue decreased by 69% due to the BEAM platform decommissioning, while web imaging revenue increased by 40% due to increased focus on iRWD sales[149] - Cost of revenue as a percentage of revenue increased by 117% due to the BEAM platform transition and higher iRWD costs[150] - Sales and marketing expense increased by 12% due to higher personnel costs for iRWD sales growth, partially offset by reduced consulting expenses[152] - Research and development expense decreased by 10% due to less resources allocated to R&D efforts, focusing on iRWD sales growth[153] - Gain on troubled debt restructurings of $3.71 million was recorded, primarily from settling deferred underwriter fees ($2.7 million) and restructuring trade payables ($0.9 million)[163] Liquidity and Capital Resources This section assesses the company's ability to generate and manage cash, detailing cash flows from operating, investing, and financing activities Cash Flow Summary (In thousands) | (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(4,232) | $(3,053) | | Net cash provided by (used in) investing activities | $1,250 | $(7) | | Net cash provided by financing activities | $2,932 | $3,720 | - Net cash used in operating activities increased to $4.2 million in 2025, primarily due to non-cash charges and cash used in operating assets and liabilities, partially offset by net income[166] - Net cash provided by investing activities was $1.3 million in 2025, driven by Bitcoin sales offsetting purchases[168] - Net cash provided by financing activities was $2.9 million in 2025, from private placements and related party investments, offset by debt repayments[169] Contractual Obligations and Commitments and Going Concern Outlook This section outlines the company's financial obligations and assesses its ability to continue operations, highlighting liquidity challenges and the need for additional funding - Management believes current cash and cash equivalents are insufficient to meet foreseeable cash needs for the next 12 months, necessitating additional financing through debt and equity offerings[171] - The company's recurring operating losses and need for additional financing raise substantial doubt about its ability to continue as a going concern[171] Contractual Obligations (In thousands) | (In thousands) | Total | Less than 1 year | 1-3 years | | :------------- | :------- | :--------------- | :-------- | | Accounts payable & accrued expenses | $5,247 | $5,247 | $- | | Loan extensions | $400 | $400 | $- | | Total | $5,647 | $5,647 | $- | Critical Accounting Policies and Estimates This section discusses the accounting policies and estimates that require significant judgment and can materially impact the company's financial reporting - The company's financial statements are prepared in accordance with GAAP, involving estimates, assumptions, and judgments that can significantly impact reported financial results[174] - No material changes to critical accounting policies and estimates have occurred through June 30, 2025, from those discussed in the Form 10-K[175] Recently Issued and Adopted Accounting Pronouncements This section provides an overview of new accounting standards and their potential impact on the company's financial statements and disclosures - The company is evaluating the impact of ASU No. 2023-09 (Improvements to Income Tax Disclosures) and ASU 2024-03 (Expense Disaggregation Disclosures) on its financial statements and footnotes[50][51] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, OneMedNet Corporation is not required to provide quantitative and qualitative disclosures about market risk Item 4. Controls and Procedures Management concluded that the company's disclosure controls and procedures were ineffective as of June 30, 2025, due to material weaknesses in internal controls over financial reporting, including issues with user access/segregation of duties, formalized control environment, non-routine transactions, and record keeping - Disclosure controls and procedures were deemed ineffective as of June 30, 2025, due to material weaknesses in internal controls over financial reporting[178] - Material weaknesses include lack of proper segregation of duties, absence of a formalized control environment, errors in accounting for non-routine transactions, and inadequate record keeping, attributed to limited accounting department resources[179] - No changes in internal control over financial reporting materially affected, or are reasonably likely to materially affect, internal control during the three months ended June 30, 2025[180] Part II. Other Information This part provides additional information not covered in the financial statements, including legal proceedings, risk factors, and equity sales Item 1. Legal Proceedings The company is not currently involved in any legal proceedings that, in management's opinion, would have a material adverse effect on its business, operating results, financial condition, or cash flows Item 1A. Risk Factors There have been no material changes to the risk factors previously disclosed in the company's Form 10-K and other public filings Item 2. Unregistered Sales of Equity Securities and Use of Proceeds During the three months ended June 30, 2025, the company issued 250,000 shares of Common Stock to Slickage Studios LLC to settle $177,500 of trade accounts payable, relying on Section 4(a)(2) of the Securities Act for exemption from registration - 250,000 shares of Common Stock were issued to Slickage Studios LLC to settle $177,500 of trade accounts payable, at a conversion price of $0.71 per share[184] Item 3. Defaults Upon Senior Securities The company reported no defaults upon senior securities during the period Item 4. Mine Safety Disclosures This item is not applicable to the company Item 5. Other Information No director or officer of the company adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025 Item 6. Exhibits This section lists all documents filed as exhibits to the Quarterly Report on Form 10-Q, including organizational documents, warrant agreements, securities purchase agreements, subscription agreements, loan conversion agreements, and certifications Signatures This section formally certifies the accuracy and completeness of the financial report by authorized company officials - The report was duly signed on behalf of OneMedNet Corporation by Robert Golden, Chief Financial Officer, on August 13, 2025[193][194]