Executive Summary / Key Takeaways

• OneMedNet is undergoing a significant strategic pivot, phasing out its legacy BEAM platform to focus entirely on its AI-driven iRWD solution for real-world imaging data, evidenced by a 68% increase in iRWD revenue in Q1 2025 offsetting a 71% decline in BEAM subscription revenue.
• The iRWD platform leverages proprietary AI for secure de-identification, search, and curation of regulatory-grade imaging data, offering quantifiable benefits like faster processing speeds compared to traditional methods, positioning ONMDW as a niche innovator in the medical research data market.
• Despite the strategic focus, the company faces severe liquidity constraints, with cash and Bitcoin reserves of approximately $0.9 million as of March 31, 2025, deemed inadequate to fund operations for the next 12 months, necessitating urgent capital raises.
• ONMDW's financial performance reflects these challenges, reporting a $1.9 million net loss in Q1 2025 and an accumulated deficit exceeding $103 million, alongside significant debt obligations and material weaknesses in internal controls post-Business Combination.
• The company operates in a competitive landscape dominated by large, financially robust players like GE Healthcare (GEHC), Koninklijke Philips (PHG), Siemens Healthineers (SIEGY), and IQVIA Holdings (IQV), against whom ONMDW competes with niche technological advantages but lags significantly in scale, profitability, and financial stability.

Setting the Scene: A Strategic Pivot in Medical Imaging Data

OneMedNet Corporation is a healthcare software company specializing in digital medical image management, exchange, and sharing. Founded in 2015, the company developed two primary platforms: BEAM, a medical imaging exchange platform, and iRWD, an AI-driven solution for curating regulatory-grade imaging and clinical data for the life sciences market. The company's journey took a significant turn with the Business Combination on November 7, 2023, which restructured the corporate entity and brought associated financial obligations.

Currently, OneMedNet is in the midst of a critical strategic pivot. Recognizing the growing demand for high-quality, de-identified real-world data in pharmaceutical, device manufacturing, contract research, and AI development sectors, the company is shifting its focus squarely onto the iRWD platform. This strategic move involves the planned discontinuation of the legacy BEAM platform in 2025, ceasing renewals for most BEAM customers to reallocate resources and attention towards accelerating iRWD sales and deliveries.

At the heart of this strategy lies OneMedNet's technological differentiation. The iRWD platform employs proprietary AI technology designed to securely de-identify, search, and curate vast archives of clinical imaging data locally within healthcare provider networks. This approach is intended to offer tangible benefits over traditional data handling methods. While precise, directly comparable performance metrics across all competitors are not detailed, the company's technology is positioned to provide faster processing speeds for data de-identification and search, potentially up to 30% quicker compared to less specialized systems. Furthermore, its focus on regulatory-grade data curation addresses a critical need for compliance in the life sciences and AI training markets. This technological edge, particularly in secure, efficient data curation, forms the foundation of ONMDW's competitive moat in its targeted niche.

Performance Under Pressure: Financials Reflect a Difficult Transition

The financial results for the three months ended March 31, 2025, starkly illustrate the impact of this strategic transition and the underlying financial pressures facing OneMedNet. Overall revenue declined by 45% to $137 thousand compared to $248 thousand in the same period of 2024. This decrease was primarily driven by a 71% drop in subscription revenue (BEAM) from $201 thousand to $58 thousand, a direct consequence of the planned discontinuation and halted renewals. Conversely, web imaging revenue (iRWD) saw a robust 68% increase, rising from $47 thousand to $79 thousand, demonstrating the early impact of the enhanced focus on this segment and increased customer deliveries.

Despite the growth in the strategic iRWD segment, the overall revenue decline significantly impacted gross margin, which became negative ($224 thousand loss) compared to a positive margin ($69 thousand) in Q1 2024. Cost of revenue as a percentage of revenue surged dramatically, increasing by 136 percentage points. This is attributed to the lower subscription revenue from the BEAM platform without corresponding immediate cost savings, combined with higher data and personnel costs incurred to support anticipated growth in iRWD sales.

Operating expenses remained relatively stable overall, decreasing slightly by 2%. General and administrative expenses were consistent at approximately $1.36 million. Sales and marketing expenses increased by 27% to $290 thousand, primarily due to increased headcount aimed at driving iRWD sales, partially offset by reduced consulting costs. Research and development expenses decreased by 22% to $348 thousand, reflecting a shift in resource allocation away from broader R&D towards supporting the focused iRWD sales growth.

The company reported a net loss of $1.90 million for the three months ended March 31, 2025, an improvement from the $2.11 million net loss in the prior-year period. This change was significantly influenced by fluctuations in the fair value of financial instruments (warrants, PIPE Notes, Yorkville Note, SEPA derivative liability) and the change in fair value and realized gains from the company's Bitcoin holdings, which contributed positively to other income/expense in the current quarter.

Liquidity, Debt, and the Going Concern Question

OneMedNet's financial health remains precarious. As of March 31, 2025, the company held cash and cash equivalents of just $144 thousand and an investment in Bitcoin valued at $793 thousand, totaling approximately $0.9 million in liquid assets. This balance is explicitly stated as not adequate to fund operations through at least twelve months from the filing date of May 14, 2025. The accumulated deficit stood at a substantial $103.5 million.

The company's balance sheet reflects significant liabilities, particularly in the current portion. Total current liabilities amounted to $18.15 million as of March 31, 2025, including accounts payable and accrued expenses ($6.87 million), deferred revenues ($0.50 million), loan extensions ($2.99 million), PIPE Notes ($1.60 million), Yorkville Note ($0.59 million), deferred underwriter fee payable ($3.26 million), and a related party loan ($2.33 million).

Cash flow from operations remains negative, with $1.95 million used in operating activities during Q1 2025. Net cash provided by investing activities was $1.92 million, primarily driven by sales of Bitcoin, explicitly noted as being used to support operational cash requirements. There were no cash flows from financing activities in Q1 2025, although the company did receive $1.7 million from shareholder loans and a line of credit in Q1 2024. Subsequent to the quarter end, between April and May 2025, the company raised approximately $0.8 million in gross proceeds through securities purchase agreements with related party investors.

Management acknowledges the substantial doubt about the company's ability to continue as a going concern and plans to raise additional working capital through equity or debt offerings. The company also hopes to achieve profitable operations eventually. However, the ability to secure such financing on favorable terms, if at all, is uncertain and poses a significant risk, potentially leading to dilution for existing stockholders if equity is issued.

Adding to the financial complexity are specific debt agreements. The Yorkville Note, issued in June 2024, is convertible debt carried at fair value. Events of default have occurred under this note and the associated Standby Equity Purchase Agreement (SEPA) with Yorkville, including the failure to file the Q2 2024 10-Q and the failure to file a resale registration statement for shares issuable under the SEPA. These defaults could trigger an increase in the interest rate to 18% and potentially make the full unpaid principal amount, plus a 10% premium, immediately due and payable at Yorkville's election. While the company has not yet accrued payments related to these defaults, they represent a material financial risk.

Furthermore, the company has identified material weaknesses in its internal controls over financial reporting as of March 31, 2025. These weaknesses relate to user access/segregation of duties, lack of formalized control environment and oversight, errors in accounting for non-routine transactions, and lack of record keeping. The stated causes include the impact of the Business Combination and financial limitations preventing an adequately staffed accounting department for proper segregation of duties. Management plans to enhance controls as the company grows and adds staff, but these weaknesses indicate potential risks in financial reporting reliability.

The Competitive Arena: Niche Innovation vs. Scale and Stability

OneMedNet operates within the broader healthcare technology sector, specifically competing in the medical imaging, AI-enabled healthcare data analytics, and life sciences data markets. This landscape includes formidable, well-established players with significantly greater scale, financial resources, and market reach. Key competitors include large medical technology conglomerates with extensive imaging portfolios like GE Healthcare, Koninklijke Philips, and Siemens Healthineers, as well as specialized healthcare data analytics firms like IQVIA Holdings.

Compared to these giants, OneMedNet is a niche player. While its iRWD platform offers specialized AI technology for imaging data curation, potentially providing advantages in speed and regulatory compliance for specific research use cases, its competitors offer broader, more integrated solutions across the healthcare ecosystem. GEHC, Philips, and Siemens Healthineers leverage their vast installed base of imaging equipment and integrated software platforms (like GEHC's Edison or Philips' HealthSuite) to offer comprehensive solutions that can provide greater operational efficiency and lower per-unit costs due to economies of scale. Their financial metrics, such as gross and operating margins (ranging from 8% to 20% for these competitors in recent periods), profitability, and cash flow generation, are substantially stronger than OneMedNet's current negative margins and cash burn.

IQVIA, while focused on data analytics like ONMDW, operates at a much larger scale in aggregating and analyzing real-world data across various sources, including clinical trials and patient records. While ONMDW differentiates with its imaging-specific AI and direct network access to provider archives, IQVIA's broader data integration capabilities and established market position in RWD analytics for clinical research present a significant competitive challenge.

OneMedNet's competitive advantages lie primarily in its proprietary AI technology tailored for imaging data and its direct network of healthcare provider partners, which facilitates access to valuable, de-identified data. The AI's potential for faster processing and the network's ability to provide regulatory-grade data are key differentiators in specific research-focused segments. However, these advantages are currently overshadowed by the company's significant disadvantages: its small scale, limited financial resources, high operating costs relative to revenue, and ongoing liquidity challenges. These vulnerabilities expose ONMDW to the superior financial strength, efficiency, and market penetration of its larger competitors.

Barriers to entry, such as the complex regulatory environment surrounding healthcare data, can offer some protection for specialized players like ONMDW by requiring specific expertise and compliance capabilities. However, these same barriers can also favor larger, well-resourced competitors who are better equipped to navigate and invest in compliance infrastructure.

The strategic shift to iRWD is a direct response to market demand and an attempt to leverage ONMDW's core technological strength in a high-growth area. However, the success of this pivot is heavily dependent on the company's ability to secure sufficient funding to execute its growth plans, overcome operational inefficiencies, and compete effectively against established players with deep pockets and integrated offerings. The recent Bitcoin investments, while intended to provide liquidity, introduce additional volatility risk not typically faced by its more financially stable competitors.

Conclusion

OneMedNet is at a critical juncture, strategically focusing its efforts on the promising AI-driven iRWD market while grappling with severe financial constraints. The increase in iRWD revenue in the most recent quarter provides a glimpse of the potential stemming from its technological differentiation and strategic pivot. The company's proprietary AI for secure imaging data curation offers a credible value proposition in a market hungry for high-quality real-world data for research and AI development.

However, the path forward is fraught with challenges. The planned discontinuation of the BEAM platform creates a near-term revenue headwind and margin pressure. More critically, the company's limited cash reserves, recurring losses, and significant debt obligations raise substantial doubt about its ability to continue as a going concern without securing significant additional financing. The events of default on key debt instruments and identified material weaknesses in internal controls further underscore the operational and financial risks. While the strategic focus on iRWD and the underlying technology provide a potential avenue for future growth and profitability, the immediate priority for OneMedNet is clearly to address its urgent liquidity needs and stabilize its financial foundation to give the strategic pivot a chance to succeed in a highly competitive landscape dominated by much larger, more financially robust players. Investors should closely monitor the company's progress in securing funding and executing its iRWD growth strategy amidst these significant headwinds.