OneMedNet Corporation (NASDAQ:ONMD), a company specializing in commercial physical and biological research, has declared that its previously issued financial statements for the year ended December 31, 2023, should no longer be relied upon. This announcement was made following the discovery of errors in the financial documents and was reported on Monday (NASDAQ:MNDY).
The Eden Prairie, Minnesota-based company's Audit Committee determined that a restatement of the financial statements was necessary after identifying inaccuracies in the accounting for convertible notes, warrants, stock-based compensation expense, and transactions related to the de-SPAC process.
The decision was made in conjunction with the filing of an amended Annual Report on Form 10-K/A for the fiscal year ended December 31, 2023, on Tuesday.
The need for restatement arose after the Securities and Exchange Commission (SEC) settled charges on May 3, 2024, against the company's former independent registered public accounting firm, BF Borgers CPA PC. The charges were for failing to conduct audits under Public Company Accounting Oversight Board standards, leading to a permanent ban for BF Borgers from appearing or practicing before the SEC.
Following the dismissal of BF Borgers on May 6, OneMedNet appointed WithumSmith+Brown, PC (Withum) as its new auditor. A reaudit of the company's 2023 and 2022 financial statements by Withum revealed the need for adjustments in the company's financial records.
OneMedNet's management and the Audit Committee have discussed these issues with Withum, and the company has taken steps to correct the identified errors. The restatement is expected to provide more accurate financial information to investors and the market.
This filing is based on a press release statement and is provided for informational purposes.
In other recent news, OneMedNet Corporation faces potential Nasdaq delisting due to non-compliance with several listing requirements, including a shortfall in its Market Value of Listed Securities and net income from continuing operations. The company has been granted a 180-day period to regain compliance.
Simultaneously, OneMedNet is striving to rectify a minimum bid price deficiency, with a similar 180-day period allotted to raise its common stock's minimum bid price to the required $1.00.
During these challenges, OneMedNet has secured approximately $1.7 million in follow-on funding from a private placement with an affiliate of Off the Chain Capital. The funds are intended for working capital and general corporate purposes, with a portion allocated for the purchase of Bitcoin.
The company also faces potential delisting due to delayed financial reporting. To address this, OneMedNet is working closely with its new auditing firm, WithumSmith+Brown, PC, to complete the necessary filings.
Concurrently, OneMedNet has seen a significant leadership transition with the appointment of Bob Golden as Chief Financial Officer, who brings over four decades of financial management experience to the role. These are recent developments in the operations of OneMedNet.
InvestingPro Insights
Recent InvestingPro data provides additional context to OneMedNet Corporation's (NASDAQ:ONMD) financial situation. The company's market capitalization stands at $26.66 million, reflecting its current valuation in the market. This relatively small market cap aligns with the challenges the company is facing, including the need for financial restatements.
InvestingPro Tips highlight some concerning aspects of ONMD's financial health. The company is not profitable over the last twelve months, which is consistent with the reported operating income of -$8.37 million for the same period. Additionally, ONMD suffers from weak gross profit margins, with a negative gross profit of $0.13 million and a gross profit margin of -12.52% in the last twelve months.
The company's stock price has fallen significantly over the last year, with a one-year price total return of -86.03%. This substantial decline likely reflects investor concerns about the company's financial reporting issues and overall performance.
On a more positive note, ONMD has shown a strong return over the last month, with a 35.66% price increase. This recent uptick could indicate some market optimism following the company's efforts to address its financial reporting issues.
For investors seeking a more comprehensive analysis, InvestingPro offers 5 additional tips for ONMD, providing a deeper understanding of the company's financial position and market performance.
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