OneMedNet Corporation (NASDAQ:ONMD), a commercial physical and biological research services provider, has entered into a Standby Equity Purchase Agreement (SEPA) with investment firm Yorkville Advisors Global, LP, as disclosed in a recent SEC filing. The agreement, effective as of Monday, June 17, 2024, grants OneMedNet the option to sell up to $25 million of its common stock to Yorkville over a 24-month period, under certain conditions.
The agreement stipulates that each share sale under the SEPA will be at a price equal to 97% of the market price, with the company having the right to set a minimum acceptable price. However, Yorkville's purchases are capped at 4.99% of OneMedNet's outstanding voting power or common stock, and the total number of shares sold cannot exceed 4,767,616, representing 19.99% of the outstanding shares, unless shareholder approval is obtained for excess issuances.
Concurrent with the SEPA, OneMedNet has received a $1.5 million convertible promissory note from Yorkville, funded on Tuesday, June 18, 2024. The note carries a 0% interest rate, escalating to 18% upon default, and is convertible into common stock at the lower of a fixed or variable price, with a floor price of $0.28 per share. The note is due on June 18, 2025, and may be converted to fund further advances under the SEPA.
In addition to the SEPA, OneMedNet has agreed to a Registration Rights Agreement with Yorkville, committing to file a resale registration statement by August 30, 2024, and to maintain its effectiveness to facilitate the resale of shares issued under the SEPA.
Simultaneously, OneMedNet terminated a previous agreement with Helena Global Investment Opportunities 1 Ltd., which had provided for up to $4.54 million in funding. As part of the termination, a new warrant was issued to Helena Global to purchase 50,000 shares of common stock at $1.20 per share, and OneMedNet will reimburse Helena Global's legal fees related to the initial agreement.
This strategic financing move, as detailed in the SEC filing, enables OneMedNet to access additional capital while maintaining control over the timing and amount of equity sold. It reflects the company's efforts to manage its financial resources and support its growth initiatives.
In other recent news, OneMedNet Corporation has been active with significant developments. The company recently entered into a three-year Master Services Agreement with a U.S.-based medical technology firm. With the partnership, OneMedNet will use its iRWD™ platform to manage clinical data, potentially influencing the care of over 150 million patients worldwide each year.
On the financial front, OneMedNet has secured a private placement agreement with an institutional investor for up to $4.54 million. The funds are intended to accelerate the company's growth and advance the development of its AI-driven solutions. EF Hutton LLC and ARC Group Ltd. were involved in the transaction.
In leadership changes, Aaron Green has assumed the role of President and CEO, succeeding the retired Paul Casey. Green, known for his extensive healthcare IT experience, has already contributed to a significant increase in the company's clinical data network and year-over-year bookings. These are among the recent developments shaping the course of OneMedNet Corporation.
InvestingPro Insights
As OneMedNet Corporation (NASDAQ:ONMD) navigates its financial strategies with the recent Standby Equity Purchase Agreement, current InvestingPro data shows a market capitalization of $27.07 million and a notably high revenue growth rate of 29.18% for Q1 2023. Despite these encouraging signs, the company's gross profit margin remains negative at -12.52% for the same period, underscoring challenges in profitability.
InvestingPro Tips suggest that OneMedNet's stock has experienced a strong return over the last month, with a 154.17% increase, and over the last three months, showing a 52.29% gain. However, it is important to note that the stock has fallen significantly over the last year, with a -88.85% return. This volatility is a critical factor for investors to consider, especially in light of the recent financing arrangements. Investors seeking to delve deeper into OneMedNet's financial health can find over 9 additional InvestingPro Tips on InvestingPro. Moreover, those interested in a comprehensive analysis can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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