Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

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

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.

In addition to historical financial analysis, this discussion and analysis contains forward-looking statements based upon current expectations that involve risks, uncertainties, and assumptions, as described under the heading "Cautionary Note Regarding Forward-Looking Statements." Actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of various factors, risks and uncertainties, including those set forth under "Risk Factors" included elsewhere (or incorporated by reference) in this Report and in the Form 10-K. Unless the context otherwise requires, references in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" to "OneMedNet", "we", "us", "our," and "the Company" are intended to mean the business and operations of OneMedNet Corporation and its consolidated subsidiary following the completion of the business combination on November 7, 2023 involving OneMedNet Solutions Corporation (formerly named OneMedNet Corporation) ("Legacy ONMD"), with Legacy ONMD surviving as a wholly owned subsidiary of Data Knights Acquisition Corp. ("Data Knights") (the "Business Combination").

Company Overview

We provide innovative solutions that unlock the significant value contained within the clinical image archives of healthcare providers. We employ 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.

Nasdaq Compliance

On April 14, 2026, the Company received notice from Nasdaq indicating that the Company, based on the closing bid price of the shares of Common Stock for the last 30 consecutive business days, is not in compliance with the $1.00 minimum bid price requirement for continued listing on The Nasdaq Capital Market, as set forth in Nasdaq Listing Rule 5550(a)(2) (the "Bid Price Rule"). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has a period of 180 calendar days, or until October 12, 2026, to regain compliance with the Bid Price Rule. To regain compliance, the minimum bid price of the shares of Common Stock must meet or exceed $1.00 per share for a minimum of ten consecutive business days during this 180-calendar day grace period. In the event the Company does not regain compliance with the Bid Price Rule by October 12, 2026, the Company may be eligible for an additional 180-calendar day compliance period. The Company intends to continue to actively monitor the bid price of the shares of Common Stock and may, if appropriate, consider implementing available options to regain compliance with the Bid Price Rule.

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. Advance 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 are 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

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

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

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 outstanding debt facilities, including loans with related parties, deferred underwriter fees and insurance premiums paid in exchange for a note payable.

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 (as defined in the Form 10-K) issued in the Business Combination and the Yorkville Note (as defined in the Form 10-K) issued with the 2024 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 as of December 31, 2025.

Change in Fair Value of Crypto Assets - Bitcoin

We previously adopted a Bitcoin strategy on the balance sheets as a forward-looking approach to corporate treasury management that incorporates digital currencies. Our Bitcoin holdings were 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. As of June 30, 2026, we no longer hold Bitcoin or any other crypto assets.

Realized Loss (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 2024 SEPA Derivative Liabilities

We entered into the 2024 SEPA 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.

Results of Operations

Comparison of the Three Months Ended June 30, 2026 and 2025

The following table sets forth our condensed consolidated statements of operations data for the periods presented:

		Three Months Ended June 30,								Change
		2026				2025				$				%
Revenue
Subscription revenue		$	-			$	47			$	(47	)			-100	%
Data delivery revenue			292				108				184				170	%
Total revenue			292				155				137				88	%
Cost of revenue			857				396				461				116	%
Gross margin			(565	)			(241	)			(324	)			134	%
Operating expenses
General and administrative			982				1,183				(201	)			-17	%
Sales and marketing			391				257				134				52	%
Research and development			324				382				(58	)			-15	%
Total operating expenses			1,697				1,822				(125	)			-7	%
Loss from operations			(2,262	)			(2,063	)			(199	)			10	%
Other (income) expense, net
Interest expense			9				22				(13	)			-59	%
Change in fair value of warrants			(31	)			-				(31	)			100	%
Change in fair value of convertible notes			-				(1,122	)			1,122				-100	%
Change in fair value of crypto assets - Bitcoin			(45	)			174				(219	)			-126	%
Realized loss (gain) on sale of crypto assets - Bitcoin			46				(314	)			360				-115	%
Change in fair value of 2024 SEPA derivative liabilities			(66	)			(110	)			44				-40	%
Gain on troubled debt restructurings			-				(3,707	)			3,707				-100	%
Other (income) expense, net			(2	)			12				(14	)			-117	%
Total other income, net			(89	)			(5,045	)			4,956				-98	%
Net (loss) income		$	(2,173	)		$	2,982			$	(5,155	)			-173	%

Revenue

Total revenue increased by $0.1 million, or 88%, during the three months ended June 30, 2026, compared to the three months ended June 30, 2025. The increase was primarily attributable to a $0.2 million increase in data delivery revenue as the Company continued its transition to a unified RWD platform, driving increased customer adoption and higher data delivery volumes. This growth was partially offset by lower subscription revenue due to the decommissioning of the BEAM platform in May 2025.

Cost of Revenue

Cost of revenue was $0.9 million for the three months ended June 30, 2026, compared to $0.4 million for the three months ended June 30, 2025, representing an increase of $0.5 million, or 116%. The increase was primarily attributable to a $0.4 million increase in software costs as we continue to execute our strategy to advance our AI-enabled real-world data platform, and a $0.1 million increase in data acquisition and curation costs incurred to support increased data delivery revenue generated through our iRWD platform.

General and Administrative

General and administrative expenses were $1.0 million for the three months ended June 30, 2026, compared to $1.2 million for the three months ended June 30, 2025, a decrease of $0.2 million, or 17%. The decrease was primarily attributable to a $0.3 million decrease in professional fees, largely due to lower consulting and legal costs, and a $0.1 million decrease in other miscellaneous general and administrative expenses. These decreases were partially offset by a $0.2 million increase in share-based compensation expense related to equity awards granted during the second half of 2025 and 2026 and a $0.1 million increase in salaries and related personnel costs resulting from headcount growth.

Sales and Marketing

Sales and marketing expenses were $0.4 million for the three months ended June 30, 2026, compared to $0.3 million for the three months ended June 30, 2025, an increase of $0.1 million, or 52%. The increase was primarily attributable to a $0.1 million increase in salaries and related personnel costs resulting from headcount growth to support our sales and marketing activities and increased spending on trade shows, consultants, and other business development initiatives intended to support growth of our iRWD platform.

Research and Development

Research and development expenses were $0.3 million for the three months ended June 30, 2026, compared to $0.4 million for the three months ended June 30, 2025, a decrease of $0.1 million, or 15%. The decrease was primarily attributable to a $0.1 million decrease in contractor costs as certain development activities were transitioned from external resources to internal personnel.

Interest Expense

Interest expense for the three months ended June 30, 2026 was generally consistent with interest expense for the three months ended June 30, 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 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 in the second quarter of 2025; therefore, no re-measurement adjustment was required for the three months ended June 30, 2026

Change in Fair Value of Crypto Assets - Bitcoin

The change in fair value of crypto assets - Bitcoin during the three months ended June 30, 2026 and 2025 reflects the change in the price of Bitcoin.

Realized Loss (Gain) on Sale of Crypto Assets - Bitcoin

The realized loss (gain) on sale of crypto assets - Bitcoin during the three months ended June 30, 2026 and 2025 reflects the change in the market price of Bitcoin upon sale compared to its purchase price.

Change in Fair Value of 2024 SEPA Derivative Liabilities

The change in fair value of 2024 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.

Gain on Troubled Debt Restructurings

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. In addition, we restructured trade payables with three separate vendors leading to an additional gain of $0.9 million. During the three months ended June 30, 2026, we did not restructure any of our debt or trade payables.

Comparison of the Six Months Ended June 30, 2026 and 2025

The following table sets forth our condensed consolidated statements of operations data for the periods presented:

		Six Months Ended June 30,								Change
		2026				2025				$				%
Revenue
Subscription revenue		$	-			$	105			$	(105	)			-100	%
Data delivery revenue			388				187				201				107	%
Total revenue			388				292				96				33	%
Cost of revenue			1,542				737				805				109	%
Gross margin			(1,154	)			(445	)			(709	)			159	%
Operating expenses
General and administrative			2,254				2,615				(361	)			-14	%
Sales and marketing			769				542				227				42	%
Research and development			636				749				(113	)			-15	%
Total operating expenses			3,659				3,906				(247	)			-6	%
Loss from operations			(4,813	)			(4,351	)			(462	)			11	%
Other (income) expense, net
Interest expense			19				52				(33	)			-63	%
Change in fair value of warrants			(47	)			3				(50	)			-1667	%
Change in fair value of convertible notes			-				(1,285	)			1,285				-100	%
Change in fair value of crypto assets - Bitcoin			(147	)			837				(984	)			-118	%
Realized loss (gain) on sale of crypto assets - Bitcoin			234				(844	)			1,078				-128	%
Change in fair value of 2024 SEPA derivative liabilities			(245	)			(434	)			189				-44	%
Gain on troubled debt restructurings			-				(3,707	)			3,707				-100	%
Other (income) expense, net			(2	)			(53	)			51				-96	%
Total other income, net			(188	)			(5,431	)			5,243				-97	%
Net (loss) income		$	(4,625	)		$	1,080			$	(5,705	)			-528	%

Revenue

Total revenue increased by $0.1 million, or 33%, during the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The increase was primarily attributable to a $0.2 million increase in data delivery revenue as the Company continued its transition to a unified RWD platform, driving increased customer adoption and higher data delivery volumes. This growth was partially offset by lower subscription revenue due to the decommissioning of the BEAM platform in May 2025.

Cost of Revenue

Cost of revenue was $1.5 million for the six months ended June 30, 2026, compared to $0.7 million for the six months ended June 30, 2025, representing an increase of $0.8 million, or 109%. The increase was primarily attributable to a $0.6 million increase in software costs as we continued to execute our strategy to advance our AI-enabled real-world data platform, a $0.1 million increase in salary and related personnel costs driven by headcount growth and a $0.1 million increase in data acquisition and curation costs incurred to support increased data delivery revenue generated through our iRWD platform.

General and Administrative

General and administrative expenses were $2.3 million for the six months ended June 30, 2026, compared to $2.6 million for the six months ended June 30, 2025, representing a decrease of $0.4 million, or 14%. The decrease was primarily attributable to a $0.6 million reduction in professional fees, primarily due to lower legal, consulting, and other professional service costs, and a $0.1 million decrease in other general and administrative expenses. These decreases were partially offset by a $0.3 million increase in share-based compensation expense related to equity awards granted during 2025 and 2026 and a $0.1 million increase in salaries and related personnel costs resulting from headcount growth.

Sales and Marketing

Sales and marketing expenses were $0.8 million for the six months ended June 30, 2026, compared to $0.5 million for the six months ended June 30, 2025, representing an increase of $0.2 million, or 42%. The increase was primarily attributable to a $0.1 million increase in salaries and related personnel costs resulting from headcount growth to support the Company's sales and marketing activities and increased spending on trade shows, consultants, and other business development initiatives intended to support growth of the Company's iRWD platform.

Research and Development

Research and development expenses were $0.6 million for the six months ended June 30, 2026, compared to $0.7 million for the six months ended June 30, 2025, representing a decrease of $0.1 million, or 15%. The decrease was primarily attributable to a $0.2 million decrease in contractor costs, which is partially offset by a $0.1 million increase in share-based compensation expense associated with equity awards granted during 2025 and 2026.

Interest Expense

Interest expense for the six months ended June 30, 2026 was generally consistent with interest expense for the six months ended June 30, 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 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 in the second quarter of 2025; therefore, no re-measurement adjustment was required for the six months ended June 30, 2026.

Change in Fair Value of Crypto Assets - Bitcoin

The change in fair value of crypto assets - Bitcoin during the six months ended June 30, 2026 and 2025 reflects the change in the price of Bitcoin.

Realized Loss (Gain) on Sale of Crypto Assets - Bitcoin

The realized loss (gain) on sale of crypto assets - Bitcoin during the six months ended June 30, 2026 and 2025 reflects the change in the market price of Bitcoin upon sale compared to its purchase price.

Change in Fair Value of 2024 SEPA Derivative Liabilities

The change in fair value of 2024 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.

Gain on Troubled Debt Restructurings

Gain on troubled debt restructuring during the six months ended June 30, 2025 was primarily driven by our settlement of deferred underwriter fees which resulted in a gain of $2.7 million. In addition, we restructured trade payables with three separate vendors leading to an additional gain of $0.9 million. During the six months ended June 30, 2026, we did not restructure any of our debt or trade payables.

Liquidity and Capital Resources

As of June 30, 2026, our principal sources of liquidity were proceeds from related party investors, private placement transactions, investments in Bitcoin 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:

		Six Months Ended June 30,
		2026				2025
Net cash provided by (used in)
Operating activities		$	(3,417	)		$	(4,043	)
Investing activities			408				1,250
Financing activities			2,782				2,743

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 six months ended June 30, 2026, we used $3.4 million of cash in operating activities, primarily resulting from our net loss of $4.6 million, offset by non-cash charges of $0.7 million and cash provided by changes in our operating assets and liabilities of $0.5 million.

During the six months ended June 30, 2025, we used $4.0 million of cash in operating activities, primarily resulting from non-cash charges of $4.9 million and cash provided by changes in our operating assets and liabilities of $0.2 million, offset by our net income of $1.1 million.

Investing Activities

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

During the six months ended June 30, 2026, net cash provided by investing activities was $0.4 million, primarily consisting of proceeds from Bitcoin sales of $0.4 million.

During the six months ended June 30, 2025, net cash provided by investing activities was $1.2 million, primarily consisting of proceeds from Bitcoin sales of $3.5 million offset by Bitcoin purchases of $2.2 million.

Financing Activities

During the six months ended June 30, 2026, net cash provided by financing activities was $2.8 million, consisting of $2.1 million in net proceeds from related party subscription agreements and $1.0 million in net proceeds from the 2024 SEPA, partially offset by debt repayments of $0.3 million.

During the six months ended June 30, 2025, net cash provided by financing activities was $2.7 million, consisting of $1.2 million in net proceeds from related party subscription agreements and $2.5 million in net proceeds from private placements, partially offset by aggregate repayments of $1.0 million of debt and deferred underwriter fees.

Contractual Obligations and Commitments and Going Concern Outlook

Currently, management does not believe that our 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 intends to raise cash for operations through debt and equity offerings. 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 material cash requirements as of June 30, 2026:

						Payments due in:
		Total				Less than 1 year				1-3 years
Accounts payable & accrued expenses		$	3,474			$	3,474			$	-
Loans payable			701				569				132
		$	4,175			$	4,043			$	132

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.

For a discussion of our critical accounting estimates, see "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Form 10-K, the notes to our audited financial statements appearing in the Form 10-K, and the notes to the financial statements appearing elsewhere in this Report. Except as described in this Report, there have been no material changes to these critical accounting policies and estimates through June 30, 2026 from those discussed in the Form 10-K.

Recently Issued and Adopted Accounting Pronouncements

A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 to our condensed consolidated financial statements included elsewhere in this Report.