OneMedNet Corp 10-K/A for FY2023

OneMedNet Corp (ONMD)

10-K/A 2024-11-05 For: 2023-12-31

Added on April 07, 2026

About this 10-K/A

OneMedNet Corp filed this 10-K/A on November 5, 2024, covering the fiscal year ended December 31, 2023 (FY2023).

Headline figures

Fiscal year ended December 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.02M; down 11.4% from $1.15M a year earlier
Net loss: $33.78M; compared with a net loss of $30.45M a year earlier
Diluted EPS: -$4.77; compared with -$7.66 a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.0001 per share	ONMD	The Nasdaq Stock Market LLC
Redeemable Warrants, each exercisable for one share of Common Stock at an exercise price of $11.50 per share	ONMDW	The Nasdaq Stock Market LLC

Large accelerated filer ☐		Accelerated filer ☐

Non-accelerated filer ☒		Smaller reporting company ☒

Emerging growth company ☒

		Page
PART I

Item 1.	Business	1

Item 1A.	Risk Factors	18

Item 1B.	Unresolved Staff Comments	32

Item 1C.	Cybersecurity	32

Item 2.	Properties	33

Item 3.	Legal Proceedings	33

Item 4.	Mine Safety Disclosures	33

PART II

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	34

Item 6.	[Reserved]	35

Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35

Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	44

Item 8.	Financial Statements and Supplementary Data	46

Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	47

Item 9A.	Controls and Procedures	47

Item 9B.	Other Information	47

Item 9C.	Disclosure Regarding Foreign Jurisdiction that Prevent Inspections.	47

PART III

Item 10.	Directors, Executive Officers and Corporate Governance	48

Item 11.	Executive Compensation	52

Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	54

Item 13.	Certain Relationships and Related Transactions, and Director Independence	56

Item 14.	Principal Accountant Fees and Services	57

PART IV

Item 15.	Exhibits and Financial Statement Schedules	59

Item 16.	Form 10-K Summary	61

Signatures		62

	●	our projected financial position and estimated cash burn rate;

	●	our estimates regarding expenses, future revenues and capital requirements;

	●	our ability to continue as a going concern;

	●	our ability to raise substantial additional capital in sufficient amounts or on acceptable terms to fund our operations and our business plan;

	●	our ability to reverse the recent decline in our revenue and resume growing our revenue;

	●	our ability to obtain and maintain intellectual property protection for our current products and services;

	●	our ability to protect our intellectual property rights and the potential for us to incur substantial costs from lawsuits to enforce or protect our intellectual property rights;

	●	the possibility that a third party may claim we have infringed, misappropriated or otherwise violated their intellectual property rights and that we may incur substantial costs and be required to devote substantial time defending against these claims;

	●	our reliance on third-party suppliers and manufacturers;

	●	the success of competing products or services that are or become available;

	●	our ability to expand our organization to accommodate potential growth and our ability to retain and attract key personnel; and

	●	the potential for us to incur substantial costs resulting from lawsuits against us and the potential for these lawsuits to cause us to limit our commercialization of our products and services.

	●	Compliance (HIPAA (as defined below), GDPR, 21 CFR Part11)

	●	Advanced privacy & security measures

	●	Clinical patient condition(s) and hospital processes

	●	Radiology interpretation

	●	AI/ML (Artificial Intelligence and Machine Learning) technology

	●	On Demand - Our powerful indexing platform accesses and harmonizes complete patient profiles across fragmented data silos, delivering images and records on-demand.

	●	Expertly Curated - We curate to the most stringent multi-level stratified requirements, providing unmatched data accuracy and completeness.

●	Access and harmonize complete patient profiles across fragmented data silos;

●	Provide unmatched data accuracy and completeness;

●	Ensure the security and privacy of patients’ PHI;

●	Imaging RWD is our singular passion and focus and no one does it better.

	●	Clinical Data - For example, clinical data from EHR and case report forms (“eCRF”) including biopsies and other pathology tests, diagnostic imaging, social determinants of health, cancer organoids, which provide patient demographics, family history, comorbidities, procedure and treatment history, and outcomes.

	●	Patient Generated Data - For example, patient-generated data from patient-reported outcome surveys, which data provide insights directly from the patient and help researchers understand what happens outside of clinic visits, procedures, and hospital stays.

	●	Cost and Utilization Data (Qualitative Studies) - For example, cost and utilization data from claims and public datasets, which data provides information regarding healthcare services utilization, population coverage, and prescribing patterns.

	●	Public Health Data - For example, public health data from various government data sources, which add critical information to enable stakeholders to best serve the needs of the populations they serve.

●	Guard against bias - evidence must align with the patient population being studied - expectations focus on the similar patient demographics, comorbidities, disease severity, etc.;

●	Traceability - confirm the chain of custody, the source of the data is known and can be validated if required; and

●	Go-forward basis - regulatory agencies seek evidence that aligns with the trial’s timeframe and, when possible, collect evidence that mirrors the clinical trial’s timeline.

	●	Data ingestion - publicly/historically available Real World Data

	●	Text extraction - NLP used to extract key entities from clinical trial documents

	●	Data transformation & standardization - data standardization using pre-built models

	●	AI model deployment - predicting trial design impacts on costs, feasibility, cycle times, and quality risk

	●	It gives life sciences companies insight into how their drugs are being used.
	●	It helps providers improve the delivery of care.
	●	It enables regulatory authorities to monitor post-market safety and adverse events.
	●	It helps payers assess outcomes from treatments.

1.	Defining a study protocol answering relevant clinical questions.

2.	Defining which data elements can be collected from which Real World Data sources.

3.	Establishing data capture arrangements and protocols with existing Real World Data sources.

4.	Blending disparate data sources through probabilistic record matching algorithms.

5.	Validating and supplementing blended data through editable eCRFs.

6.	Defining and calculating clinically relevant outcomes and measures.

7.	Appropriately assessing and controlling for variability in data quality, availability and confounding patient factors affecting measured outcomes.

8.	Real World Evidence can provide a holistic view of patients that in many cases cannot be studied through traditional clinical trials.

●	*Increase Global Reach to Meet Demand:* Our strategy is to continue growing our global footprint into areas where we expect high demand growth in the global Real World Evidence solutions market, which is projected to grow from $2.62 billion in 2024 to $4.55 billion by 2030, at a CAGR of 8.2%. There is a rise in emphasis on evidence-based medicine that relies on Real World Evidence, which comes from Real World Data. Market players in healthcare industries, including regulators, healthcare providers, and payers are becoming more aware of the importance of using Real World Data for making informed decisions regarding comparative effectiveness, treatment effectiveness, cost-effectiveness, and safety. As a result, the demand for Real World Data solutions is increasing rapidly, which is further driving the growth of the market. Regulatory agencies such as EMA and the FDA are making use of Real World Evidence in regulatory decision making processes. These regulatory authorities have frameworks and guidelines for using Real World Evidence and Real World Data in regulatory submissions, post-market surveillance, and drug approvals. As a result, the demand for Real World Data is rising, which in turn is expected to support growth of the market in the coming future.¹⁷The use of Real World Evidence derived from Real World Data demonstrates value and cost-effectiveness of medical devices and drugs for healthcare technology assessment agencies and payers. With this Real World Evidence, market access becomes easier, and it also enables reimbursement negotiations. This further facilitates the inclusion of new therapies in the coverage of healthcare, which in turn creates major opportunities in the global market.

●	*Innovate Our Commercial Approach to Drive Incremental Market Share:* We intend to expand our sales network across the globe, while simultaneously building out our sales infrastructure. We intend to focus on our target markets, which include (i) Imaging AI; (ii) medical device companies; and (iii) pharmaceutical companies, as summarized here:

	●	governance, frameworks, models and training to promote good decision making and accountability;

	●	a layered approach to privacy and security management to avoid a single point of failure;

	●	ongoing evaluation of privacy and security practices to promote continuous improvement;

	●	use of technical, administrative, physical and organizational safeguards and controls;

	●	collaboration with data suppliers and trusted third parties for our syndicated market research and analytics offerings to remove identifiable information or employ effective encryption or other techniques to render information non-identified before data is delivered to us; and

	●	work with leading researchers, policy makers, thought leaders and others in a variety of fields relevant to the application of effective privacy and security practices, including statistical, epidemiological and cryptographic sciences, legal, information security and compliance, and privacy.

●	Ongoing internal audits, policy reviews, and procedure testing to ensure validation, audit trails, legacy systems, and record handling and retention adhere to the latest regulatory guidelines and best practices; and

●	Regular third-party or client-initiated external audits to assess the compliance of OneMedNet to ensure operations are in accordance with the applicable regulations, standards, policies, and standard operating procedures.

	●	being permitted to present only two years of audited financial statements, in addition to any required unaudited interim financial statements, with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure;
	●	not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended (“Sarbanes-Oxley Act”);
	●	reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements; and
	●	exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

	●	our ability to obtain adequate capital resources to execute our growth plans;

	●	our ability to hire, train and retain skilled managers and personnel, including quality and production personnel, and marketing and commercial specialists;

	●	our ability to protect our existing and new services by registering and defending our intellectual property rights; and

	●	our ability to successfully add new customers.

	●	announcements by us or our competitors regarding technical developments and levels of performance achieved by our or their Real World Data and Real World Evidence offering;
	●	announcements by us regarding developments in our relationship with existing and future key customers;
	●	our ability to bring our products and technologies to market on a timely basis, or at all;
	●	our operating results or development efforts failing to meet the expectation of securities analysts or investors in a particular period;
	●	Actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us;
	●	changes in the market’s expectations about our operating results or the Real World Data and Real World Evidence industry;
	●	success of competitors’ actual or perceived development efforts;
	●	changes in financial estimates and recommendations by securities analysts concerning the Company or the Real World Data and Real World Evidence industry in general;
	●	operating and share price performance of other companies that investors deem comparable to the Company;
	●	disputes or other developments related to proprietary rights, including patents, litigation matters and our ability to obtain intellectual property protection for our technologies;
	●	changes in laws and regulations affecting our business;
	●	our ability to meet compliance requirements;
	●	commencement of, or involvement in, litigation involving the Company;
	●	changes in our capital structure, such as future issuances of securities or the incurrence of additional debt;
	●	the volume of shares of Common Stock available for public sale;
	●	the level of demand for our Common Stock, including the amount of short interest in our Common Stock;
	●	any major change in our Board of Directors or management;
	●	sales of substantial amounts of shares of our Common Stock by our directors, executive officers or significant stockholders or the perception that such sales could occur;
	●	the expiration of contractual lock-up agreements with our executive officers, directors and certain stockholders, which we have entered into and may enter into in the future from time to time; and
	●	general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations and acts of war or terrorism.

●	the liquidity of our Common Stock;

●	the market price of our Common Stock;

●	our ability to obtain financing for the continuation of our operations;

●	the number of institutional and general investors that will consider investing in our Common Stock;

●	the number of investors in general that will consider investing in our Common Stock;

●	the number of market makers in our Common Stock;

●	the availability of information concerning the trading prices and volume of our Common Stock; and

●	the number of broker-dealers willing to execute trades in shares of our Common Stock.

●	authorizing “blank check” preferred stock, which could be issued by our Board of Directors without stockholder approval and may contain voting, liquidation, dividend, and other rights superior to our Common Stock;

●	limiting the liability of, and providing indemnification to, our directors and officers;

●	limiting the ability of our stockholders to call and bring business before special meetings;

●	requiring advance notice of stockholder proposals for business to be conducted at meetings of our stockholders and for nominations of candidates for election to our Board of Directors;

●	controlling the procedures for the conduct and scheduling of Board of Directors and stockholder meetings; and

●	providing our Board of Directors with the express power to postpone previously scheduled annual meetings and to cancel previously scheduled special meetings.

	For the year ended December 31,						Change 2023
	2023			2022			$			%
Revenue
Subscription revenue	$	878		$	678		$	200			29	%
Web imaging revenue		143			475			(332	)		-70	%
Total revenue		1,021			1,153			(132	)		-11	%
Cost of revenue		1,150			1,513			(363	)		-24	%
Gross margin		(129	)		(360	)		231			-64	%
Operating expenses
General and administrative		3,544			4,806			(1,262	)		-26	%
Sales and marketing		1,115			958			157			16	%
Research and development		2,065			1,591			474			30	%
Total operating expenses		6,724			7,355			(631	)		-9	%
Loss from operations		(6,853	)		(7,715	)		862			-11	%
Other (income) expense, net
Interest expense		11			-			11			N/A
Stock warrant expense		9,207			8,073			1,134			14	%
Change in fair value of warrants		(129	)		-			(129	)		N/A
Change in fair value of PIPE notes		269			-			269			N/A
Change in fair value of convertible promissory notes		17,517			14,616			2,901			20	%
Other expense		34			30			4			13	%
Total other (income) expenses, net		26,909			22,719			4,190			18	%
Loss before income taxes	$	(33,762	)	$	(30,434	)	$	(3,328	)		11	%
Income tax expense		18			17			1			6	%
Net loss	$	(33,780	)	$	(30,451	)	$	(3,329	)		11	%

	●	Adjusted EBITDA does not reflect interest expense or the cash requirements necessary to service payments on our shareholder loans which is not a core form of financing for our business;

	●	Adjusted EBITDA does not reflect income tax expense, which relates to our foreign subsidiary, because we have suffered recurring consolidated operating losses since inception and expect that to continue in the future;

	●	Although depreciation and amortization are non-cash charges, the assets that we currently depreciate and amortize will likely have to be replaced in the future, and Adjusted EBITDA does not reflect the cash required to fund such replacements;

	●	Adjusted EBITDA excludes stock-based compensation expense which has been, and will continue to be for the foreseeable future, a significant recurring non-cash expense for our business and an important part of our compensation strategy;

	●	Adjusted EBITDA excludes transactions costs attributable to legal, advisory, and other professional service fees incurred in connection with the Business Combination because they are unrelated to our current operations and are not comparable to the prior period nor predicative of future results;

	●	Adjusted EBITDA does not reflect the effect of earnings or charges resulting from matters that our management does not consider to be indicative of our ongoing operations. However, some of these charges and gains (such as mark-to-market adjustments, stock warrant expense etc.) have recurred and may recur; and

	●	Other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure.

			Payments due in:
	Total		Less than 1 year		1-3 years
Accounts payable & accrued expenses	$	4,682	$	4,682	$	-
Loan extensions		2,992		2,992		-
Deferred underwriter fee payable		3,525		3,525		-
Loan, related party		465		-		465
PIPE Notes		1,637		1,637		-
	$	13,301	$	12,836	$	465

	Page
Report of Independent Registered Public Accounting Firm	F-1
Consolidated Balance Sheets	F-2
Consolidated Statements of Operations	F-3
Consolidated Statements of Changes in Temporary Equity and Stockholders’ Deficit	F-4
Consolidated Statements of Cash Flows	F-5
Notes to the Consolidated Financial Statements	F-6

	2023			2022
	As of December 31,
	2023			2022
	(As Restated)			(As Restated)
Assets
Current assets:
Cash and cash equivalents	$	47		$	271
Accounts receivable, net of allowance for credit losses of $0 and $125,233 at December 31, 2023 and December 31, 2022, respectively		152			19
Prepaid expenses and other current assets		166			101
Total current assets		365			391
Deferred transaction costs		-			815
Property and equipment, net		99			83
Total assets	$	464		$	1,289
Liabilities, temporary equity and stockholders’ deficit
Current liabilities:
Accounts payable & accrued expenses	$	4,682		$	1,177
Deferred revenues		254			184
Loan extensions		2,992			-
Convertible promissory notes		-			24,743
PIPE Notes		1,637			-
Deferred underwriter fee payable		3,525			-
Other current liabilities		283			-
Total current liabilities		13,373			26,104
Convertible promissory notes		-			1,500
Loan, related party		465			-
Other long-term liabilities		68			44
Total liabilities		13,906			27,648
Commitments and contingencies (Note 13)		-			-
Temporary equity:
Preferred Series A-2, par value $0.0001, 4,200,000 shares authorized, and 0 and 3,415,923 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively		-			9,634
Preferred Shares A-1, par value $0.0001, 4,400,000 shares authorized, and 0 and 2,839,957 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively		-			8,010
Total temporary equity		-			17,644
Stockholders’ (deficit) equity:
Preferred Stock, par value $0.0001, 1,000,000 and 0 shares authorized at December 31, 2023 and 2022, respectively; no shares issued and outstanding at December 31, 2023 and 2022		-			-
Common Stock, par value $0.0001, 100,000,000 shares authorized and 23,572,232 and 4,033,170 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively		2			-
Additional paid-in-capital		77,996			13,657
Accumulated deficit		(91,440	)		(57,660	)
Total stockholders’ deficit		(13,442	)		(26,359	)
Total liabilities, temporary equity, and stockholders’ deficit	$	464		$	1,289

	Shares			Amount			Shares			Amount			Amount			Shares			Amount		Capital			Deficit			Deficit
													Total
	Series A-2						Series A-1						Temporary								Additional						Total
	Preferred Stock						Preferred Stock						Equity			Common Stock					Paid-in			Accumulated			Stockholders’
	Shares			Amount			Shares			Amount			Amount			Shares			Amount		Capital			Deficit			Deficit
Balances as of December 31, 2021		3,853,797		$	9,634			3,204,000		$	8,010		$	17,644			4,342,666		$	-	$	2,513		$	(27,209	)	$	(7,052	)
Retroactive application of recapitalization due to the Business Combination		(437,874	)		-			(364,043	)		-			-			(493,420	)		-		-			-			-
Issuance of common shares in exchange for services		-			-			-			-			-			177,276			-		-			-			-
Exercise of stock options		-			-			-			-			-			6,648			-		8			-			8
Issuance of OMN warrants in conjunction with convertible promissory notes		-			-			-			-			-			-			-		8,073			-			8,073
Issuance of OMN warrants to board of directors		-			-			-			-			-			-					1,198			-			1,198
Stock-based compensation expense		-			-			-			-			-			-			-		1,865			-			1,865
Net loss		-			-			-			-			-			-			-		-			(30,451	)		(30,451	)
Balances as of December 31, 2022 (Restated)		3,415,923		$	9,634			2,839,957		$	8,010		$	17,644			4,033,170		$	-	$	13,657		$	(57,660	)	$	(26,359	)
Beginning balance		3,415,923		$	9,634			2,839,957		$	8,010		$	17,644			4,033,170		$	-	$	13,657		$	(57,660	)	$	(26,359	)
Issuance of common shares in exchange for services		-			-			-			-			-			265,914			-		-			-			-
Issuance of Series A-2 Preferred Stock		5,673			16			-			-			16			-			-		-			-			16
Issuance of OMN warrants in conjunction with convertible promissory notes		-			-			-			-			-			-			-		9,207			-			9,207
Exercise of OMN stock options upon Business Combination		-			-			-			-			-			543,056			-		-			-			-
Exercise of OMN warrants upon Business Combination		-			-			-			-			-			3,420,945			-		-			-			-
Conversion of OMN convertible promissory notes upon Business Combination		-			-			-			-			-			5,475,362			1		47,935			-			47,936
Conversion of preferred stock to common stock upon Business Combination		(3,421,596	)		(9,650	)		(2,839,957	)		(8,010	)		(17,660	)		6,261,553			1		17,659			-			-
Issuance of common stock upon Business Combination with Data Knights, net of liabilities assumed and transaction costs		-			-			-			-			-			3,572,232			-		(11,937	)		-			(11,937	)
Stock-based compensation expense		-			-			-			-			-			-			-		1,475			-			1,475
Net loss		-			-			-			-			-			-			-		-			(33,780	)		(33,780	)
Balances as of December 31, 2023 (Restated)		-		$	-			-		$	-		$	-			23,572,232		$	2	$	77,996		$	(91,440	)	$	(13,442	)
Ending balance		-		$	-			-		$	-		$	-			23,572,232		$	2	$	77,996		$	(91,440	)	$	(13,442	)


	As of December 31, 2023
	As Previously Reported			Restatement Adjustments			Reclassification Adjustments (1)			As Restated			Ref.
Assets
Current assets:
Cash and cash equivalents	$	47		$	-		$	-		$	47
Investments held in trust		-			-			-			-
Accounts receivable, net of allowance for credit losses of $0 and $125,233 at December 31, 2023 and December 31, 2022, respectively		152			-			-			152
Prepaid expenses and other current assets		166			-			-			166
Total current assets		365			-			-			365
Deferred transaction costs		-			-			-			-
Property and equipment, net		99			-			-			99
Total assets	$	464		$	-		$	-		$	464
Liabilities, temporary equity and stockholders’ deficit
Current liabilities:
Accounts payable & accrued expenses	$	4,184		$	498		$	-		$	4,682		2
Loan amount due to related parties		11			-			(11	)		-
Excise tax		113			-			(113	)		-
Deferred revenues		254			-			-			254
Convertible promissory notes		-			-			-			-
Loan extensions		2,992			-			-			2,992
Loan payable		39			-			(39	)		-
Canada Emergency Business Loan Act		45			-			(45	)		-
Income tax payable		120			-			(120	)		-
Deferred underwriter fee payable		3,525			-			-			3,525
PIPE notes		1,550			87			-			1,637		3
Other current liabilities		-			-			283			283
Franchise tax payable		-			-			-			-
Total current liabilities		12,833			585			(45	)		13,373
Convertible promissory notes		-			-						-
Canada Emergency Business Loan Act		-			-			-			-
Accrued interest
Loan, related party		465			-			-			465
Deferred underwriter fee payable		-			-			-			-
Working capital loan		-			-			-			-
Warrant liabilities		25			-			(25	)		-
Other long-term liabilities		-			(2	)		70			68		4
Total liabilities		13,323			583			-			13,906
Commitments and contingencies (Note 13)		-			-			-			-
Temporary equity:
Preferred Series A-2, par value $0.0001, 4,200,000 shares authorized, and 0 and 3,415,923 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively		-			-			-			-
Preferred Shares A-1, par value $0.0001, 4,400,000 shares authorized, and 0 and 2,839,957 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively		-			-			-			-
Total temporary equity		-			-			-			-
Stockholders’ (deficit) equity:
Preferred Stock, par value $0.0001, 1,000,000 and 0 shares authorized at December 31, 2023 and 2022, respectively; no shares issued and outstanding at December 31, 2023 and 2022, respectively		-			-			-			-
Common Stock, par value $0.0001, 100,000,000 shares authorized and 23,572,232 and 4,033,170 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively		3			(1	)		-			2
Additional paid-in-capital		42,221			35,775			-			77,996		5
Accumulated deficit		(55,083	)		(36,357	)		-			(91,440	)	6
Total stockholders’ deficit		(12,859	)		(583	)		-			(13,442	)
Total liabilities, temporary equity, and stockholders’ deficit	$	464		$	-		$	-		$	464

	1	Represents certain reclassification adjustments made to the consolidated balance sheet that are separate from the restatement but were included herein for completeness purposes.
	2	Impact of errors related to: (i) improper cutoff of miscellaneous vendor payables; and (ii) under-accruals related to the year-end bonus and taxes.
	3	Impact of errors related to the valuation of the PIPE notes containing certain embedded features that were not previously considered, which are now accounted for under the FVO.
	4	Impact of errors related to the valuation of liability-classified warrants.
	5	Impact of errors related to the accounting for the Business Combination. Management did not properly assess the Business Combination and associated recapitalization of the shares. Additionally, an impairment charge was erroneously included in the initial filed financial statements.
	6	Cumulative and current year impacts of corrections of errors to the consolidated statements of operations, primarily related to historical adjustments within fair value of convertible debt, warrants and stock-based compensation expense.

	As Previously Reported			Restatement Adjustments			Reclassification Adjustments ¹			As Restated			Ref.
	As of December 31, 2022
	As Previously Reported			Restatement Adjustments			Reclassification Adjustments (1)			As Restated			Ref.
Assets
Current assets:
Cash and cash equivalents	$	302		$	(31	)	$	-		$	271		2
Investments held in trust		29,029			(29,029	)		-			-		2
Accounts receivable, net of allowance of $0 and $125,233 at December 31, 2023 and December 31, 2022, respectively		19			-			-			19
Prepaid expenses and other current assets		101			-			-			101
Total current assets		29,451			(29,060	)		-			391
Deferred transaction costs		900			(85	)		-			815		3
Property and equipment, net		83			-			-			83
Total assets	$	30,434		$	(29,145	)	$	-		$	1,289
Liabilities, temporary equity and stockholders’ deficit
Current liabilities:
Accounts payable & accrued expenses	$	2,814			(1,637	)	$	-		$	1,177		4
Loan amount due to related parties		12			(12	)		-			-		2
Deferred revenues		184			-			-			184
Convertible promissory notes		8,490			16,253			-			24,743		5
Income tax payable		215			(215	)		-			-		2
Franchise tax payable		70			(70	)		-			-		2
Total current liabilities		11,785			14,319			-			26,104
Convertible promissory notes		1,500			-						1,500
Canada Emergency Business Loan Act		44			-			(44	)		-
Accrued interest		691			(691	)		-			-		5
Warrant liabilities		363			(363	)		-			-		2
Deferred underwriter fee payable		4,025			(4,025	)		-			-		2
Working capital loan		207			(207	)		-			-		2
Extension loans		2,546			(2,546	)		-			-		2
Other long-term liabilities		-			-			44			44
Total liabilities		21,161			6,488			-			27,648
Commitments and contingencies (Note 13)		28,750			(28,750	)		-			-
Temporary equity:
Preferred Series A-2, par value $0.0001, 4,200,000 shares authorized, and 0 and 3,415,923 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively		-			9,634			-			9,634		6
Preferred Shares A-1, par value $0.0001, 4,400,000 shares authorized, and 0 and 2,839,957 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively		-			8,010			-			8,010		6
Total temporary equity		-			17,644			-			17,644
Stockholders’ (deficit) equity:
Common Stock, par value $0.0001, 100,000,000 shares authorized and 23,572,232 and 4,033,170 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively		1			(1	)		-			-
Additional paid-in-capital		24,032			(10,375	)		-			13,657		7
Accumulated deficit		(43,510	)		(14,150	)		-			(57,660	)
Total stockholders’ deficit		9,273			(35,632	)		-			(26,359	)
Total liabilities, temporary equity, and stockholders’ deficit	$	30,434		$	(29,145	)	$	-		$	1,289

	1	Represents reclassification adjustment made to the consolidated balance sheet that are separate from the restatement but were included herein for completeness purposes.
	2	Impact of improper inclusion of Data Knights financial information prior to the closing of the Business Combination.
	3	Impact of: (i) improper capitalization of interim review expenses; and (ii) exclusion of certain transaction-related costs for the Business Combination.
	4	Impact of (i) under-accruals related to the year-end bonus and taxes; and (ii) improper inclusion of Data Knights accounts payable and accrued expenses.
	5	Impact of errors related to the valuation of the convertible promissory notes containing certain embedded features that were not previously considered, which are now accounted for under the FVO (including accrued interest).
	6	Impact of errors related to the accounting for historical preferred stock as temporary equity.
	7	Impact of errors related to: (i) valuation of stock compensation expense; (2) identification, classification and valuation of equity-classified warrants; and (3) improper inclusion of Data Knights APIC balances.
	8	Cumulative and current year impacts of corrections of errors to the consolidated statements of operations.

	1	Represents certain reclassification adjustments made to the consolidated income statement that are separate from the restatement but were included herein for completeness purposes.
	2	Impact of errors related to (i) improper valuation of stock compensation expense; (ii) improper capitalization of deferred transaction costs; and (iii) under-accrued bonus and taxes.
	3	Impact of improper recognition of impairment expense upon the closing of the Business Combination with Data Knights.
	4	Impact of errors related to the valuation of the convertible promissory notes containing certain embedded features that were not previously considered, which are now accounted for under the FVO with changes in fair value reflected in the consolidated statements of operations (including interest expense).
	5	Impact of errors related to the identification, classification and valuation of equity-classified warrants.
	6	Impact of errors related to valuation of liability classified warrant values and the corresponding changes in fair value reflected in the consolidated statements of operations.
	7	Impact of errors related to the valuation of the PIPE notes containing certain embedded features that were not previously considered, which are now accounted for under the FVO with changes in fair value reflected in the consolidated statements of operations (including interest expense).
	8	EPS impact of corrections of errors to the consolidated statements of operations.

	1	Represents certain reclassification adjustments made to the consolidated income statement that are separate from the restatement but were included herein for completeness purposes.
	2	Impact of errors related to (i) improper valuation of stock compensation expense; (ii) improper capitalization of deferred transaction costs; and (iii) under-accrued bonus and taxes.
	3	Impact of improper recognition of Data Knights income tax provision, liability classified warrants and unrealized gain/loss prior to the closing of the Business Combination.
	4	Impact of errors related to the valuation of the convertible promissory notes containing certain embedded features that were not previously considered, which are now accounted for under the FVO with changes in fair value reflected in the consolidated statements of operations (including interest expense).
	5	Impact of errors related to the identification, classification and valuation of equity-classified warrants.
	6	EPS impact of corrections of errors to the consolidated statements of operations.

	1	Accumulated effects of adjustments due to the restatement of the consolidated statement of operations for the year ended December 31, 2023.
	2	Includes impact of errors related to the accounting for the Business Combination. Management did not properly assess the Business Combination and associated recapitalization of the shares. Additionally, an impairment charge was erroneously included in the initial filed financial statements.
	3	Includes impact of improper inclusion of Data Knights financial information as of December 31, 2022 prior to the closing of the Business Combination.
	4	Impact of errors related to improper valuation of stock compensation expense.
	5	Impact of errors related to the identification, classification and valuation of equity-classified warrants.
	6	Impact of errors related to valuation of liability classified warrant values and the corresponding changes in fair value reflected in the consolidated statements of operations.
	7	Impact of errors related to the valuation of the PIPE notes containing certain embedded features that were not previously considered, which are now accounted for under the FVO.
	8	Impact of errors related to the valuation of the convertible promissory notes containing certain embedded features that were not previously considered, which are now accounted for under the FVO (including accrued interest).
	9	Includes current year and prior year impact of errors related to improper cutoff of accounts payable and accrued expenses. Refer to balance sheet restatement reconciliation for more information.
	10	Impact of improper presentation of non-cash interest expense in financing activities.

	1	Cumulative impact of corrections of errors to the prior year.
	2	Impact of errors related to the accounting and presentation of the recapitalization.
	3	Impact of errors related to identification, classification and valuation of equity-classified warrants.
	4	Includes impact of errors related to the accounting for the Business Combination. Management did not properly assess the Business Combination and associated recapitalization of the shares. Additionally, an impairment charge was erroneously included in the initial filed financial statements.
	5	Impact of errors related to improper valuation of stock compensation expense.
	6	Current year impact of corrections of errors to the consolidated statements of operations.