Executive Summary / Key Takeaways

• OneMedNet Corporation ($ONMDW) is undergoing a critical strategic shift, phasing out its legacy BEAM imaging exchange platform to focus entirely on its iRWD solution, which provides regulatory-grade AI-driven imaging and clinical data for the life sciences market.
• While this pivot led to a 45% overall revenue decline in Q1 2025 (to $137 thousand) due to the planned discontinuation of BEAM (revenue down 71%), the core iRWD business demonstrated strong growth (revenue up 68% to $79 thousand), indicating potential in the targeted market.
• The company's iRWD technology offers differentiated capabilities, including secure de-identification and faster AI-driven data curation (estimated 20-30% faster processing), positioning it as a niche innovator against larger, more diversified competitors like IQVIA (IQV) and Oracle Health (ORCL).
• Significant financial challenges persist, including recurring net losses ($1.9 million in Q1 2025), an accumulated deficit ($103.5 million), and insufficient cash ($0.1 million cash, $0.8 million Bitcoin as of March 31, 2025) to fund operations for the next 12 months, raising substantial doubt about its ability to continue as a going concern.
• Management's plan hinges on raising additional capital through equity or debt and achieving profitability, while navigating complex debt obligations (PIPE Notes, Yorkville Note) and identified material weaknesses in internal controls.

The Crucible of Healthcare Data: OneMedNet's Strategic Transformation

OneMedNet Corporation operates at the intersection of healthcare and technology, specializing in the complex world of digital medical image management and exchange. From its founding in 2015, the company has been dedicated to simplifying the flow of this critical data. Its business is built around two core solutions: the legacy BEAM platform, designed for direct image exchange between healthcare providers and patients, and the newer iRWD solution, focused on extracting and curating regulatory-grade imaging and clinical data for the burgeoning life sciences and AI markets.

The healthcare data landscape is vast and increasingly reliant on sophisticated technology for efficient, compliant, and secure handling of sensitive information. Within this environment, OneMedNet positions itself as a provider capable of unlocking the significant value contained within clinical image archives. Its iRWD platform, in particular, addresses a growing need for high-quality, de-identified real-world data (RWD) for drug discovery, device development, and AI model training. This focus places OneMedNet in direct competition with established giants and specialized players in the healthcare data, clinical research, and medical imaging sectors.

Competitors range from large, diversified corporations like IQVIA and Oracle Corporation, leveraging extensive networks and broad data ecosystems, to medical technology companies like Koninklijke Philips (PHG) with integrated hardware/software offerings, and clinical research organizations like ICON plc (ICLR) focused on trial data. While these larger players command significant market share (IQV estimated at 20-25% in healthcare data/analytics, ORCL Health at 15-20% in EHR/data management), OneMedNet seeks to carve out its niche through specialized technology.

The company's core technological differentiator lies in its iRWD solution's AI capabilities for secure de-identification and data curation. This technology is designed to process data faster than traditional methods, with estimates suggesting a 20-30% speed advantage in data curation. This speed is a tangible benefit for life science companies and researchers who require timely access to large datasets. Furthermore, the platform is built to meet rigorous regulatory requirements for RWD, offering enhanced data security features (estimated 25-30% better in advanced de-identification) compared to some broader platforms. While larger competitors like Oracle Health benefit from economies of scale and extensive cloud infrastructure, potentially offering lower operating costs per unit (20-25% lower through cloud efficiency), OneMedNet's specialized AI aims to provide a performance edge in its specific domain. The company's R&D efforts are now primarily allocated to supporting this iRWD sales growth, indicating a strategic commitment to enhancing its core technological advantage.

However, OneMedNet faces significant challenges stemming from its smaller scale. This often translates to higher operating costs (estimated 10-15% higher) compared to larger rivals, potentially limiting its pricing flexibility and profitability. The company's strategic response involves leveraging its proprietary AI and network effects from partnerships to build customer loyalty and recurring revenue, aiming to offset the scale disadvantage. The planned discontinuation of the BEAM platform, while impacting near-term revenue, is intended to streamline operations and eventually yield cost savings later in 2025, allowing for greater focus and resources on the higher-growth iRWD segment. The timing and extent of these savings are not precisely quantified.

Financial Performance Reflecting a Pivotal Shift

The financial results for the three months ended March 31, 2025, starkly illustrate the impact of OneMedNet's strategic pivot. Total revenue decreased by 45% year-over-year, falling from $248 thousand in Q1 2024 to $137 thousand in Q1 2025. This decline was primarily driven by a significant 71% drop in subscription revenue (BEAM), which fell from $201 thousand to $58 thousand as the company stopped renewing contracts ahead of the platform's planned discontinuation.

In contrast, web imaging revenue (iRWD) showed promising growth, increasing by 68% from $47 thousand in Q1 2024 to $79 thousand in Q1 2025. This growth is attributed to the company's enhanced focus on iRWD sales and increased customer deliveries, validating the strategic shift towards this market.

Despite the growth in iRWD, the overall revenue contraction and the fixed costs associated with the transition negatively impacted gross margin, which increased significantly as a percentage of revenue (264% in Q1 2025 vs. 128% in Q1 2024). This reflects lower BEAM revenue without immediate corresponding cost reductions, alongside higher data and personnel costs incurred to support anticipated iRWD sales growth.

Operating expenses saw a slight decrease overall (down 2% to $2.0 million), primarily due to a 22% reduction in research and development expenses (to $348 thousand) as resources were reallocated towards supporting iRWD sales rather than broad R&D efforts. Sales and marketing expenses, however, increased by 27% (to $290 thousand), driven by increased headcount aimed at driving iRWD growth. General and administrative expenses remained relatively consistent.

The company reported a net loss of $1.90 million for the three months ended March 31, 2025, an improvement from the $2.10 million net loss in the prior-year period. However, this improvement was significantly influenced by non-cash gains related to changes in the fair value of financial instruments and crypto assets, including a $662 thousand gain on the change in fair value of Bitcoin and a $531 thousand realized gain on Bitcoin sales. Excluding these volatile items and other fair value adjustments, the operational loss remains substantial.

Liquidity, Debt, and the Going Concern Question

OneMedNet's financial position remains precarious. As of March 31, 2025, the company held only $144 thousand in cash and cash equivalents and $793 thousand in Bitcoin. Management explicitly states that this balance is "not adequate to fund its operations through at least twelve months from the date these condensed consolidated financial statements were available for issuance" (May 14, 2025). This condition, coupled with recurring net losses and an accumulated deficit of $103.5 million, raises "substantial doubt about the Companys ability to continue as a going concern."

The company's liquidity is further constrained by a significant amount of current liabilities, totaling $18.15 million as of March 31, 2025. This includes various debt obligations assumed or entered into, such as:

• Accounts payable and accrued expenses ($6.87 million)
• Loan extensions ($2.99 million)
• PIPE Notes ($1.60 million)
• Yorkville Note ($0.59 million)
• Deferred underwriter fee payable ($3.26 million)
• Loan, related party ($2.33 million)

Notably, the Yorkville Note and the Standby Equity Purchase Agreement (SEPA) associated with it have specific risks. The company failed to file a required registration statement by August 30, 2024, which constitutes an event of default under both agreements. While the company had not accrued payments related to these defaults as of March 31, 2025, this default allows Yorkville, at its election, to increase the interest rate on the note to 18% and demand immediate payment of the full principal plus a 10% premium. The company has partially converted some of the Yorkville Note principal into common stock subsequent to December 31, 2024, reducing the outstanding balance, but the default condition remains a significant risk.

Management's plan to address the liquidity shortfall and going concern risk is to "raise additional working capital through an equity or debt offerings." They ultimately hope to achieve profitable operations. However, the ability to secure such financing "in a timely manner or on favorable terms, if at all" is uncertain. Subsequent to the quarter end, in April and May 2025, the company did secure approximately $0.8 million in gross proceeds by issuing 1.9 million shares of common stock to related party investors, highlighting the reliance on existing relationships for funding but also indicating potential for further dilution for existing shareholders.

Operational challenges also include identified material weaknesses in internal controls over financial reporting, stemming from the business combination and limited accounting staff. These weaknesses relate to segregation of duties, lack of formalized controls, errors in non-routine transactions, and record keeping. Management plans to enhance controls as the company grows and adds staff.

Outlook and Risks

The outlook for OneMedNet is heavily dependent on the successful execution of its strategic pivot to iRWD and its ability to secure necessary financing. The growth demonstrated by the iRWD segment in Q1 2025 is a positive signal, suggesting market traction for its specialized technology. Management is directing resources towards this area, anticipating continued growth. The planned discontinuation of BEAM is expected to streamline operations and eventually contribute to improved cost efficiency, although the timing and extent of these savings are not precisely quantified.

However, the path forward is fraught with significant risks. The most immediate is the going concern risk – without securing substantial additional funding, the company's ability to continue operations beyond the near term is in question. The terms and availability of future financing are uncertain and could result in significant dilution or unfavorable debt terms.

The competitive environment is intense. While OneMedNet's AI technology offers specific advantages in imaging data curation speed and security, larger competitors possess vastly greater resources, established customer bases, and broader service offerings. IQVIA's comprehensive RWD analytics and Oracle Health's integrated EHR and cloud platforms represent formidable competition that could limit OneMedNet's market penetration and pricing power despite its technological edge in a niche area. The failure to scale effectively could leave OneMedNet vulnerable.

Other risks include the volatility of Bitcoin investments, which the company has used to supplement cash, potential regulatory changes impacting crypto assets or healthcare data, dependence on key personnel, intellectual property protection challenges, and the potential costs and distractions of litigation. The unresolved events of default related to the Yorkville Note and SEPA also pose a material financial risk if Yorkville chooses to exercise its rights.

Conclusion

OneMedNet Corporation is at a critical juncture, strategically focusing its efforts and limited resources on the promising iRWD market, leveraging its differentiated AI technology for medical image data. The initial growth in iRWD revenue in Q1 2025, even amidst an overall revenue decline driven by the sunsetting BEAM platform, provides a glimpse of the potential in its chosen niche. The company's technology, offering advantages in data curation speed and security, could serve as a competitive moat in specific segments of the life sciences market.

However, the significant financial challenges cannot be overstated. The recurring losses, accumulated deficit, and explicit going concern warning highlight the urgent need for substantial external financing. The success of the iRWD strategy and the company's very survival are contingent upon its ability to raise capital on acceptable terms and execute flawlessly against larger, better-funded competitors. While the strategic direction towards iRWD appears sound given market trends, the financial reality presents a formidable hurdle that investors must carefully consider. The investment thesis for OneMedNet currently rests less on established financial stability and more on the potential of its core technology and the successful navigation of its critical funding requirements and operational challenges.