Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with our consolidated financial statements and notes thereto that appear elsewhere in this Annual Report. See "Risk Factors" elsewhere in this Annual Report for a discussion of certain risks associated with our business. The following discussion contains forward-looking statements. Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. The use of words such as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. From time to time, we also may provide forward-looking statements in other materials we release to the public.

Company Overview

We provide innovative solutions that unlock the significant value contained within the clinical image archives of healthcare providers. Employing our OneMedNet iRWD™ solution, which securely de-identifies, searches, and curates a data archive locally, bringing a wealth of internal and third-party research opportunities to providers. By leveraging our extensive federated provider network, together with our technology and in-house clinical expertise, OneMedNet successfully meets the most rigorous Real World Data life science requirements.

Business Combination

On November 7, 2023, we completed the Business Combination, whereby a subsidiary of Data Knights merged with and into Legacy ONMD, with Legacy ONMD surviving as a wholly-owned subsidiary of Data Knights. Following the Business Combination, Data Knights changed its name to "OneMedNet Corporation".

The total consideration for the Business Combination and related transactions was approximately $200 million. In connection with the meeting of stockholders of Data Knights to approve the Business Combination (the "Special Meeting"), certain public holders (the "Redeeming Stockholders") holding 1,600,741 shares of Common Stock exercised their right to redeem such shares for a pro rata portion of the funds held by Continental Stock Transfer & Trust Company, as trustee ("Continental") in the trust account established in connection with Data Knights' initial public offering (the "Trust Account"). Effective November 7, 2023, Data Knights' common stock, warrants and units ceased trading, and effective November 8, 2023, our Common Stock began trading on the Nasdaq Global Market under the symbol "ONMD" and the Public Warrants began trading on the Nasdaq Global Market under the symbol "ONMDW."

As a result of the Business Combination, holders of Data Knights common stock automatically received common stock of OneMedNet, and holders of Data Knights warrants automatically received warrants of OneMedNet with substantively identical terms. At the closing of the Business Combination (the "Closing"), all shares of Data Knights owned by the Sponsor (consisting of shares of Common Stock and shares of Class B common stock, which we refer to as the founder shares), automatically converted into an equal number of shares of OneMedNet's Common Stock, and the Private Placement Warrants held by the Sponsor automatically converted into warrants to purchase one share of OneMedNet Common Stock with substantively identical terms.

Key Components of Consolidated Statements of Operations

Revenue

The Company generates revenue from two streams: (1) iRWD, which provides regulatory grade imaging and clinical data in the pharmaceutical, device manufacturing, contract research organizations, and AI markets and (2) BEAM, which is a medical imaging exchange platform between hospital/healthcare systems, imaging centers, physicians and patients. iRWD is sold on a fixed fee basis based on the number of data units and the cost per data unit committed to in the customer contract. Revenue is recognized when the data is delivered to the customer. BEAM revenue is subscription-based revenue that is recognized ratably over the subscription period committed to by the customer. The Company invoices its BEAM customers quarterly or annually in advance with the customer contracts automatically renewing unless the customer issues a cancellation notice. The BEAM platform was decommissioned in May 2025 and no revenue was generated from this platform thereafter.

The Company excludes from revenue taxes collected from a customer that are assessed by a governmental authority and imposed on and concurrent with a specific revenue-producing transaction. The transaction price for the products is the invoiced amount. Advanced billings from contracts are deferred and recognized as revenue when earned. Deferred revenue consists of payments received in advance of performance under the contract. Such amounts are generally recognized as revenue over the contractual period. The Company receives payments from customers based upon contractual billing schedules. Accounts receivable is recorded when the right to consideration becomes unconditional. Payment terms on invoiced amounts typically range from zero to 90 days, with typical terms of 30 days.

Cost of Revenue

Our cost of revenue is composed of our distinct performance obligations of hosting, labor, and data cost.

General and Administrative Expenses

General and administrative functions include finance, legal, operations, human resources, and information technology support. These functions include costs for items such as salaries and benefits and other personnel-related costs, maintenance and supplies, professional fees for external legal, accounting, and other consulting services, and depreciation expense.

Research and Development Expenses

Costs incurred in the research and development of our products are expensed as incurred. Research and development costs include personnel, contracted services, materials, and indirect costs involved in the design and development of new products and services, as well as hosting expense.

Sales and Marketing Expenses

Our sales and marketing costs consist of labor and tradeshow costs.

Other (Income) Expenses, Net

Interest Expense

Interest expense consists of interest incurred on our debt facilities, including loans with related parties, deferred underwriter fees, insurance premiums loans, loan extensions, stock repurchase loan and our line of credit.

Change in Fair Value of Warrants

We have outstanding warrants that were issued at the closing of the Business Combination, which are accounted for as liabilities at fair value. These warrants are subsequently re-measured at fair value on our consolidated balance sheets at the end of each reporting period and at settlement, as applicable, and changes in fair value are recognized in the consolidated statements of operations.

Change in Fair Value of Convertible Notes

We have elected the fair value option of accounting for the PIPE Notes issued in the Business Combination and the Yorkville Note (as defined below) issued with the SEPA. These instruments contained embedded derivatives that would require bifurcation and separate accounting; therefore, we made the election to measure the entire contingently convertible debt instruments, including accrued interest, at fair value. These instruments are subsequently re-measured at fair value on our consolidated balance sheets at the end of each reporting period and at settlement, as applicable, and changes in fair value are recognized in the consolidated statements of operations. The PIPE Notes and Yorkville Note were both settled in 2025 and were no longer outstanding at the end of the reporting period.

Change in Fair Value of Crypto Assets - Bitcoin

We have adopted a Bitcoin strategy on the balance sheets as a forward-looking approach to corporate treasury management that incorporates digital currencies. Our Bitcoin holdings are held at fair value on the consolidated balance sheets and are re-measured at the end of each reporting period based on the quoted end-of-day price provided by a reputable and liquid exchange.

Realized Gain on Sale of Crypto Assets - Bitcoin

As part of our Bitcoin strategy, we routinely sell quantities held as part of our corporate treasury strategy to fund operations as needed. We recognize a realized gain upon sale when the price of Bitcoin is higher than its initial purchase price.

Change in Fair Value of SEPA Derivative Liabilities

We entered into a SEPA arrangement with Yorkville during 2024 that gave us the right, but not the obligation, to require Yorkville to purchase shares over a two-year commitment period, subject to volume limits. The put option is recognized at inception and the forward option is recognized upon issuance of notice for the sale of the Company's Common Stock. The liabilities are subsequently re-measured at fair value on our consolidated balance sheets at the end of each reporting period, with changes in fair value recognized in the consolidated statements of operations.

Gain on Troubled Debt Restructurings

We settled our deferred underwriter fees payable and certain trade payables during 2025. These transactions were accounted for as troubled debt restructurings because there were concessions granted to us and due to substantial doubt regarding our ability to continue as a going concern. The gain represents the difference between the net carrying values and consideration transferred at the time of these settlements.

Loss on Extinguishment of Debt

We restructured a note payable to a former lender of the Company related to common shares that we repurchased in 2024. The amendment was accounted for as an extinguishment of debt because the change in cash flows before and after the amendment were substantially different. As a result, a loss was recorded representing the difference between the net carrying amount of the original note and the reacquisition price of the amended note.

Other Expense

Other expense primarily includes foreign exchange losses related to our operations and revenue outside of the United States. For the year ended December 31, 2024, other expense also includes the fair value of the warrants issued to terminate the Helena SPA.

Results of Operations

The following tables set forth our consolidated statements of operations data for the periods presented:

		Year Ended December 31,								Change 2025
		2025				2024				$				%
Revenue
Subscription revenue		$	105			$	351			$	(246	)			-70	%
Data delivery revenue			1,254				292				962				329	%
Total revenue			1,359				643				716				111	%
Cost of revenue			1,862				924				938				102	%
Gross margin			(503	)			(281	)			(222	)			79	%
Operating expenses
General and administrative			6,377				7,027				(650	)			-9	%
Sales and marketing			1,272				830				442				53	%
Research and development			1,515				1,467				48				3	%
Total operating expenses			9,164				9,324				(160	)			-2	%
Loss from operations			(9,667	)			(9,605	)			(62	)			-1	%
Other (income) expense, net
Interest expense			67				147				(80	)			-54	%
Change in fair value of warrants			56				(9	)			65				-722	%
Change in fair value of convertible notes			(1,285	)			808				(2,093	)			-259	%
Change in fair value of crypto assets - Bitcoin			945				(798	)			1,743				-218	%
Realized gain on sale of crypto assets - Bitcoin			(922	)			(120	)			(802	)			668	%
Change in fair value of SEPA derivative liabilities			(216	)			434				(650	)			-150	%
Gain on troubled debt restructurings			(5,569	)			-				(5,569	)			N/A
Loss on debt extinguishment			41				-				41				N/A
Other expense			16				60				(44	)			-73	%
Total other (income) expenses, net			(6,867	)			522				(7,389	)			-1416	%
Loss before income taxes		$	(2,800	)		$	(10,127	)		$	7,327				-72	%
Income tax expense			1				2				(1	)			-50	%
Net loss			(2,801	)			(10,129	)			7,328				-72	%

Revenue

		Year Ended December 31,								Change 2025
		2025				2024				$				%
Subscription revenue (BEAM)		$	105			$	351			$	(246	)			-70	%
Data delivery revenue (Real-World Data)			1,254				292				962				329	%
Total		$	1,359			$	643			$	716				111	%

Total revenue was $1.4 million for the year ended December 31, 2025, compared to $0.6 million for the year ended December 31, 2024, an increase of $0.8 million, or 111%. The increase was primarily due to a $1.0 million increase in data delivery revenue (iRWD), which is partially offset by lower subscription revenue (BEAM) as a direct result of decommissioning this platform in May 2025. The increase in data delivery revenue is a result of our strategic transition to a unified real-world data platform, which led to significant growth in our customer base and thus a higher volume of data deliveries during the year ended December 31, 2025.

Cost of Revenue

		Year Ended December 31,
		2025				2024
Cost of revenue			1,862				924
% of revenue			137	%			144	%

Cost of revenue was $1.9 million for the year ended December 31, 2025 compared to $0.9 million for the year ended December 31, 2024, an increase of $0.9 million, or 102%. The increase of $0.8 million was primarily due to an increase in data and curation charges to support the increase in data delivery revenue generated by our iRWD platform.

General and Administrative Expenses

General and administrative expenses were $6.4 million for the year ended December 31, 2025, compared to $7.0 million for the year ended December 31, 2024, a decrease of $0.7 million, or 9%. The decrease of $0.7 million was primarily due to a decrease of $1.4 million in professional fees, which is driven by higher accounting and audit fees that were required to file our Form 10-K during the year ended December 31, 2024. This is partially offset by an increase of $0.6 million in salary and related personnel costs, driven by share-based compensation expense as we made a significant number of RSU grants during the year ended December 31, 2025, and an increase of $0.1 million in other miscellaneous office expenses.

Sales and Marketing Expenses

Sales and marketing expenses were $1.3 million for the year ended December 31, 2025, compared to $0.8 million for the year ended December 31, 2024, an increase of $0.5 million, or 53%. The increase of $0.5 million was primarily due to an increase of $0.6 million in salary and related personnel costs, which is driven by increased headcount to support iRWD sales growth.

Research and Development Expenses

Research and development expenses for the year ended December 31, 2025, were generally consistent with research and development expenses for the year ended December 31, 2024.

Interest Expense

Interest expense was $67 thousand for the year ended December 31, 2025, compared to $147 thousand for the year ended December 31, 2024, a decrease of $80 thousand, or 54%. The decrease of $80 thousand was primarily due to us settling our related party loans and deferred underwriter fees during the year ended December 31, 2025.

Change in Fair Value of Warrants

The change in fair value of warrants is composed of the re-measurement adjustment for our liability-classified warrants that were issued in connection with the Business Combination. The change is mainly due to the resulting fluctuations in the market price of shares of Common Stock.

Change in Fair Value of Convertible Notes

The change in fair value of convertible notes is composed of the re-measurement adjustment for the PIPE Notes and Yorkville Note (each, as defined below) which are carried at fair value. The change is mainly due to the resulting fluctuations in the market price of shares of Common Stock. Both instruments were converted or repaid during the year ended December 31, 2025, and were no longer outstanding at the end of the reporting period.

Change in Fair Value of Crypto Assets - Bitcoin

The change in fair value of crypto assets - Bitcoin during the years ended December 31, 2025 and 2024 reflects the change in the price of Bitcoin.

Realized Gain on Sale of Crypto Assets - Bitcoin

The realized gain on sale of crypto assets - Bitcoin during the years ended December 31, 2025 and 2024 reflects the increase in the price of Bitcoin upon sale compared to its purchase price.

Change in Fair Value of SEPA Derivative Liabilities

The change in fair value of SEPA derivative liabilities is primarily driven by expected sales of our Common Stock to Yorkville and projections on the future path of the Company's stock price during the commitment period. The gain for the year ended December 31, 2025 is a result of us delivering advance notices under the SEPA leading to less availability at the end of the reporting period. During the year ended December 31, 2024, we did not make any draws on the SEPA facility.

Gain on Troubled Debt Restructurings

Gain on troubled debt restructurings during the year ended December 31, 2025 was primarily driven by our settlement of deferred underwriter fees which resulted in a gain of $2.8 million (See Note 8, Stockholders' Deficit to the accompanying consolidated financial statements included elsewhere in this Annual Report) and restructured trade payables with five separate vendors leading to an additional gain of $2.8 million (See Note 5, Accounts Payable and Accrued Expenses to the accompanying consolidated financial statements included elsewhere in this Annual Report). During the year ended December 31, 2024, we did not restructure any of our debt or trade payables.

Loss on Extinguishment of Debt

Loss on extinguishment of debt during the year ended December 31, 2025 relates to an amended promissory note agreement with a former lender to the Company with a $0.3 million stock repurchase commitment outstanding. The loss of $46 thousand represents the difference between the reacquisition price of the debt and the net carrying amount of the extinguished debt. During the year ended December 31, 2024, we did not have any debt extinguishments.

Other Expense

Other expense was $16 thousand for the year ended December 31, 2025, compared to $60 thousand for the year ended December 31, 2024, a decrease of $44 thousand, or 73%. The decrease of $44 thousand was primarily due to $35 thousand of stock warrant expense incurred to terminate the Helena SPA during the year ended December 31, 2024, with the remaining decrease attributable to lower foreign exchange losses from our operations and revenue outside of the United States.

Liquidity and Capital Resources

As of December 31, 2025, our principal sources of liquidity were net proceeds received related to debt and equity financings and cash received from customers.

The following table shows net cash and cash equivalents used in operating activities, net cash and cash equivalents used in investing activities, and net cash and cash equivalents provided by financing activities during the periods presented:

		Year Ended December 31,
		2025				2024
Net cash provided by (used in)
Operating activities		$	(7,503	)		$	(6,952	)
Investing activities			2,307				(1,982	)
Financing activities			5,609				9,059

Operating Activities

Our net cash and cash equivalents used in operating activities consists of net 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 obligation. 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.

During the year ended December 31, 2025, we used $7.5 million of cash in operating activities, primarily resulting from our net loss of $2.8 million and non-cash charges of $4.8 million, offset by changes in our operating assets and liabilities of $0.1 million.

During the year ended December 31, 2024, we used $7.0 million of cash in operating activities, primarily resulting from our net loss of $10.1 million, offset by non-cash charges of $1.6 million and cash provided by changes in our operating assets and liabilities of $1.5 million.

Investing Activities

Our investing activities have consisted primarily of property and equipment purchases and Bitcoin purchases and sales.

During the year ended December 31, 2025, net cash provided by investing activities was $2.3 million, primarily consisting of proceeds from Bitcoin sales of $5.1 million, offset by Bitcoin purchases of $2.8 million.

During the year ended December 31, 2024, net cash used in investing activities was $2.0 million, consisting of $2.9 million of Bitcoin purchases, offset by $1.0 million of Bitcoin sales and $0.1 million of property and equipment purchases.

Financing Activities

During the year ended December 31, 2025, net cash provided by financing activities was $5.6 million, consisting of $2.5 million in net proceeds from the private placement in June 2025, $1.7 million in net proceeds from related party subscription agreements, $2.5 million in net proceeds from the Yorkville SEPA, partially offset by $0.5 million paid to settle deferred underwriter fees, $0.3 million in repayment of the Yorkville Note and $0.4 million in repayments of other outstanding loans.

During the year ended December 31, 2024, net cash provided by financing activities was $9.1 million, consisting of $6.3 million in net proceeds from the private placements in July and September 2024, $1.8 million in net proceeds from shareholder loans, $1.4 million in net proceeds from the Yorkville Note, partially offset by $0.2 million paid for the repurchase of Common Stock and $0.1 million in repayment of deferred underwriter fees.

Contractual Obligations and Commitments and Going Concern Outlook

Currently, management does not believe that cash and cash equivalents are sufficient to meet our foreseeable cash needs for at least the next 12 months. Our foreseeable cash needs, in addition to our recurring operating expenses, include our expected capital expenditures to support the expansion of our infrastructure and workforce, interest expense and minimum contractual obligations. Management hopes to raise cash either through a public offering or private debt and equity offering. As a result of the Company's recurring loss from operations and the need for additional financing to fund its operating and capital requirements there is uncertainty regarding the Company's ability to maintain liquidity sufficient to operate its business effectively, which raises substantial doubt as to the Company's ability to continue as a going concern.

Our future capital requirements will depend on many factors, including our growth rate, the timing and extent of spending to support research and development efforts, the expansion of sales and marketing activities, the introduction of new and enhanced product and service offerings, and the cost of any future acquisitions of technology or businesses. In the event that additional financing is required from outside sources, we may be unable to raise the funds on acceptable terms, if at all.

The following table summarizes our current and long-term material cash requirements as of December 31, 2025:

						Payments due in:
		Total				Less than 1 year				1-3 years
Accounts payable & accrued expenses		$	3,496			$	3,496			$	-
Loans payable			974				754				220
		$	4,470			$	4,250			$	220

Critical Accounting Policies and Estimates

Our management's discussion and analysis of financial condition and results of operations is based on our consolidated financial statements which have been prepared in accordance with GAAP. In preparing our financial statements, we make estimates, assumptions, and judgments that can have a significant impact on our reported revenue, results of operations, and net income or loss, as well as on the value of certain assets and liabilities on our balance sheet during and as of the reporting periods. These estimates, assumptions, and judgments are necessary because future events and their effects on our results of operations and the value of our assets cannot be determined with certainty and are made based on our historical experience and on other assumptions that we believe to be reasonable under the circumstances. These estimates may change as new events occur or additional information is obtained, and we may periodically be faced with uncertainties, the outcomes of which are not within our control and may not be known for a prolonged period of time. Because the use of estimates is inherent in the financial reporting process, actual results could differ from those estimates.

We believe that the assumptions and estimates associated with the following critical accounting policies involve significant judgment and thus have the most significant potential impact on our Consolidated Financial Statements.

Revenue Recognition

Although most of our sales agreements contain standard terms and conditions, certain agreements contain multiple performance obligations. For customer contracts that contain more than one performance obligation, we allocate the total transaction consideration to each performance obligation based on the relative stand-alone selling price of each performance obligation within the contract.

Subscription Revenue

Subscription revenues are generated from the Company's data exchange (BEAM) product, which is a medical imaging exchange platform between hospital/healthcare systems, imaging centers, physicians and patients. Subscriptions to the BEAM platform offering are recognized over time as the customer consumes the benefits of the services as the Company stands ready to provide access to the programs throughout the subscription period. Subscription customers are invoiced either quarterly or annually in advance with the customer contracts automatically renewing unless the customer issues a cancellation notice. The timing of revenue recognition is based on a time-based measure of progress as the Company provides access to the programs evenly over the course of the subscription period.

Data Delivery Revenue

Data delivery revenues are generated from the Company's data broker (iRWD) product, which provides regulatory grade imaging and clinical data in the pharmaceutical, device manufacturing, clinical research organizations, and artificial intelligence markets. Data delivery customers are invoiced in installments as the related data is delivered. Revenue from the sale of iRWD products is recognized at a point in time using an output measure of progress, which is based on the number of data units delivered relative to the total data units committed by the customer.

Fair Value of Certain Debt and Liability Instruments, and the Fair Value Option of Accounting

When financial instruments contain various embedded derivatives which require bifurcation and separate accounting of those derivatives apart from the host instruments, if eligible, GAAP allows issuers to elect the fair value option ("FVO") of accounting for those instruments. The FVO allows the issuer to account for the entire financial instrument, including accrued interest, at fair value with subsequent remeasurements of that fair value recorded through the statements of operations. We elected the FVO of accounting for contingently convertible notes payable, including contingently issuable warrants and accrued interest, and certain term notes payable, including accrued interest, as further described below and as discussed in Note 2, Summary of Significant Accounting Policies in our accompanying consolidated financial statements included elsewhere in this Annual Report.

Convertible notes payable, the Yorkville Note and the PIPE Notes, which include the related contingently issuable warrants, contain embedded derivatives, which require bifurcation and separate accounting under GAAP, for which the Company elected the FVO for the convertible notes payable, Yorkville Note and PIPE Notes. In addition, certain term PIPE Notes were issued with separately exercisable and freestanding warrants to purchase Common Stock, were issued with substantial discounts at issuance and contained certain embedded derivatives to be bifurcated and accounted for separately for those term notes, unless the FVO is eligible and elected. Accordingly, the Company qualified for and elected the FVO for the entire PIPE Notes instruments. The convertible debt and accrued interest at their stated interest rates were initially recorded at fair value as liabilities on the consolidated balance sheets and were subsequently re-measured at fair value at the end of each reporting period presented within the consolidated financial statements. The changes in the fair value of the convertible notes payable and PIPE Notes are recorded in changes in fair value of convertible debt, included as a component of other income and expenses, net, in the consolidated statements of operations. The change in fair value related to the accrued interest components is also included within the single line of change in fair value of convertible debt on the consolidated statements of operations. See additional information on valuation methodologies and significant assumptions used in Note 7, Convertible Debt, and Note 13, Fair Value Measurement to the consolidated financial statements included elsewhere in this Annual Report.

The estimated fair values of the convertible promissory notes and PIPE Notes are each determined based on the aggregated, probability-weighted average of the outcomes of certain possible scenarios. The combined value of the probability-weighted average of those outcomes is then discounted back to each reporting period in which the convertible notes are outstanding, in each case, based on a risk-adjusted discount rate estimated based on the implied discount rate. The discount rate was held constant over the valuation periods given the fact pattern associated with the Company and the stage of development.

Recently Adopted Accounting Pronouncements

See Note 2, Summary of Significant Accounting Policies to the accompanying consolidated financial statements included elsewhere in this Annual Report for a description of recently adopted accounting standards.

Recently Issued Accounting Pronouncements

See Note 2, Summary of Significant Accounting Policies to the accompanying consolidated financial statements included elsewhere in this Annual Report for a description of certain recently issued accounting standards which may impact our financial statements in future reporting periods.