VSee Health's Q1 Revenue Jumps 105%, But Net Loss Widens to $3.96M

TL;DR

**VSEEW is burning cash at an alarming rate, making it a high-risk bet despite revenue growth; steer clear until they prove profitability.**

AI Summary

VSee Health, Inc. (VSEEW) reported a significant increase in total revenues to $3,321,485 for the three months ended March 31, 2025, up from $1,620,995 in the prior-year period, primarily driven by new revenue streams like patient fees ($711,264) and telehealth fees ($483,850). Despite this revenue growth, the company posted a net loss of $3,959,440 for the quarter, a sharp decline from a net income of $94,750 in Q1 2024. This loss was largely due to a substantial increase in operating expenses, with general and administrative costs soaring to $2,032,291 from $210,767, and compensation and related benefits rising to $1,658,998 from $893,577. Furthermore, interest expense dramatically increased to $730,665 from $9,310, and a change in fair value of financial instruments resulted in a $1,261,471 loss. The company's total liabilities surged to $22,892,683 as of March 31, 2025, from $20,010,976 at December 31, 2024, contributing to a stockholders' deficit of $3,496,997. Management acknowledged substantial doubt about its ability to continue as a going concern due to persistent operating losses and deteriorating liquidity, despite efforts like the iDoc acquisition and ongoing financing negotiations.

Why It Matters

VSee Health's substantial net loss of $3.96 million, despite doubling revenue, signals significant operational challenges and raises red flags for investors. The company's acknowledged 'going concern' risk, coupled with soaring general and administrative expenses and interest costs, suggests a precarious financial position. For employees, this could imply job insecurity or delayed growth opportunities. Customers might face uncertainty regarding the long-term viability of VSee Health's telehealth platform, potentially impacting service continuity. In the competitive telehealth market, VSee Health's struggles could allow more financially stable rivals to gain market share, affecting broader industry dynamics.

Risk Assessment

Risk Level: high — VSee Health explicitly states 'substantial doubt about its ability to continue as a going concern' due to 'persistent operating losses' and 'deteriorating liquidity position.' The company reported a net loss of $3,959,440 for Q1 2025, a significant increase from a $94,750 net income in Q1 2024, and its total stockholders' deficit grew to $3,496,997 from $18,488 in just three months.

Analyst Insight

Investors should exercise extreme caution and consider avoiding VSEEW shares given the explicit 'going concern' warning and rapidly deteriorating financial metrics. Monitor future filings closely for concrete evidence of successful financing, significant cost reductions, and a clear path to profitability before considering any investment.

Financial Highlights

debt To Equity

N/A

revenue

$3.32M

operating Margin

N/A

total Assets

$19.40M

total Debt

$22.89M

net Income

($3.96M)

eps

($0.24)

gross Margin

N/A

cash Position

$410,122

revenue Growth

+105%

Revenue Breakdown

Key Numbers

• $3.32M — Total Revenues (Increased by 105% from $1.62M in Q1 2024 to $3.32M in Q1 2025)
• ($3.96M) — Net Loss (Widened significantly from a $94,750 net income in Q1 2024 to a $3.96M net loss in Q1 2025)
• $2.03M — General and Administrative Expenses (Increased dramatically from $210,767 in Q1 2024 to $2.03M in Q1 2025)
• $730,665 — Interest Expense (Soared from $9,310 in Q1 2024 to $730,665 in Q1 2025)
• ($3.50M) — Total Stockholders' Deficit (Deteriorated from ($18,488) at Dec 31, 2024, to ($3.50M) at Mar 31, 2025)
• $22.89M — Total Liabilities (Increased from $20.01M at Dec 31, 2024, to $22.89M at Mar 31, 2025)
• $410,122 — Cash (Cash balance as of March 31, 2025, indicating limited liquidity)
• ($0.24) — Basic Loss Per Common Share (Reflects the net loss for Q1 2025, compared to $0.01 income per share in Q1 2024)

Key Players & Entities

• VSee Health, Inc. (company) — Registrant and telehealth software company
• VSee Lab, Inc. (company) — Accounting acquirer in the business combination
• iDoc Virtual Telehealth Solutions, Inc. (company) — Acquired company in the business combination
• Digital Health Acquisition Corp. (company) — Former name of VSee Health, Inc.
• Nasdaq Stock Market LLC (regulator) — Exchange where VSEE and VSEEW are registered
• SEC (regulator) — Securities and Exchange Commission
• $3,321,485 (dollar_amount) — Total revenues for Q1 2025
• $1,620,995 (dollar_amount) — Total revenues for Q1 2024
• $3,959,440 (dollar_amount) — Net loss for Q1 2025
• $94,750 (dollar_amount) — Net income for Q1 2024

FAQ

Risk Factors

• Going Concern Uncertainty [high — financial]: Management has substantial doubt about the company's ability to continue as a going concern due to persistent operating losses and deteriorating liquidity. This is exacerbated by a significant increase in liabilities to $22,892,683 as of March 31, 2025, and a substantial stockholders' deficit of $3,496,997.
• Deteriorating Liquidity [high — financial]: The company's cash balance decreased to $410,122 as of March 31, 2025, from $326,115 at December 31, 2024, while total liabilities increased. This limited liquidity raises concerns about the company's ability to meet its short-term obligations.
• Surge in Operating Expenses [high — financial]: General and administrative costs increased dramatically from $210,767 in Q1 2024 to $2,032,291 in Q1 2025. Compensation and related benefits also rose significantly to $1,658,998 from $893,577, contributing to the net loss.
• Increased Interest Expense [high — financial]: Interest expense has soared from $9,310 in Q1 2024 to $730,665 in Q1 2025, significantly impacting profitability. This increase is likely due to higher debt levels and potentially unfavorable financing terms.
• Fair Value Losses on Financial Instruments [medium — financial]: A change in the fair value of financial instruments resulted in a $1,261,471 loss for the quarter. This volatility can significantly impact net income and is a direct reflection of market conditions or changes in the company's financial obligations.
• Integration of iDoc Acquisition [medium — operational]: While the iDoc acquisition is mentioned as an effort to improve the financial situation, its successful integration and contribution to future profitability remain a key operational risk. The current financial performance suggests challenges in realizing synergies.
• Healthcare Regulatory Environment [medium — regulatory]: As a healthcare company, VSEE Health is subject to evolving healthcare regulations, including those related to telehealth and data privacy. Non-compliance can lead to significant penalties and operational disruptions.
• Competition in Telehealth [medium — market]: The telehealth market is increasingly competitive. VSEE Health faces challenges in differentiating its services and maintaining market share against established and emerging players.

Industry Context

The telehealth and digital health sector is experiencing rapid growth, driven by increased patient adoption and technological advancements. However, it is also a highly competitive landscape with evolving regulatory frameworks. Companies are focusing on expanding service offerings, improving patient engagement, and integrating AI and data analytics to gain a competitive edge.

Regulatory Implications

VSEE Health operates within a heavily regulated healthcare industry. Changes in telehealth reimbursement policies, data privacy laws (like HIPAA), and state-specific licensing requirements pose significant compliance risks. Failure to adhere to these regulations could result in substantial fines and operational disruptions.

What Investors Should Do

1. Monitor cash burn rate and liquidity closely.
2. Evaluate the sustainability of revenue growth.
3. Assess the impact of increased debt and interest expense.
4. Analyze management's going concern disclosures and financing plans.

Key Dates

• 2025-03-31: End of Q1 2025 — Reported total revenues of $3,321,485 and a net loss of $3,959,440, with total liabilities reaching $22,892,683 and a stockholders' deficit of $3,496,997.
• 2024-03-31: End of Q1 2024 — Reported total revenues of $1,620,995 and a net income of $94,750, indicating a significant deterioration in financial performance year-over-year.
• 2024-12-31: End of Q4 2024 — Total liabilities stood at $20,010,976 and stockholders' deficit was $18,488, showing an increase in liabilities and a worsening deficit by Q1 2025.

Glossary

Stockholders' Deficit

A situation where a company's total liabilities exceed the total value of its assets, resulting in a negative equity position. (VSEE Health reported a significant stockholders' deficit of $3,496,997 as of March 31, 2025, highlighting its precarious financial condition.)

Going Concern

An assumption that a company will continue to operate for the foreseeable future, typically at least the next 12 months. (Management has expressed substantial doubt about VSEE Health's ability to continue as a going concern, indicating serious financial distress.)

Fair Value of Financial Instruments

The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. (A loss of $1,261,471 from changes in the fair value of financial instruments significantly impacted VSEE Health's net loss for the quarter.)

Accumulated Deficit

The cumulative net losses of a company since its inception, less any net income. (VSEE Health's accumulated deficit was $71,663,313 as of March 31, 2025, reflecting a history of unprofitability.)

Convertible Note

A type of debt that can be converted into equity (stock) of the issuing company under certain conditions. (The company has several convertible notes, including 'Quantum Convertible Note' and 'September 2024 Convertible Note', which are recorded at fair value and contribute to its liabilities.)

Right-of-use assets

Assets that represent a lessee's right to use an underlying asset for the lease term, typically related to operating leases. (These assets, valued at $359,061 as of March 31, 2025, are part of VSEE Health's long-term assets, related to its lease obligations.)

Year-Over-Year Comparison

Compared to the prior year's Q1 2024, VSEE Health has seen a dramatic shift in its financial performance. Total revenues have more than doubled, increasing by 105% from $1.62M to $3.32M, driven by new patient and telehealth fees. However, this revenue growth has been overshadowed by a significant increase in operating expenses, particularly general and administrative costs which surged by over 860%. This has led to a substantial net loss of $3.96M in Q1 2025, a stark contrast to the $94,750 net income in Q1 2024. Liabilities have also grown, and the company now faces a considerable stockholders' deficit, raising serious going concern issues not present in the prior period.

Key Financial Figures

• $0.0001 — ich registered Common Stock, par value $0.0001 per share VSEE The Nasdaq Stock Market
• $11.50 — (1) share of common stock at a price of $11.50 per whole share VSEEW The Nasdaq Stock

Filing Documents

• vsee10q033125.htm (10-Q) — 1448KB
• vseeex31-1.htm (EX-31.1) — 12KB
• vseeex31-2.htm (EX-31.2) — 12KB
• vseeex32-1.htm (EX-32.1) — 6KB
• 0001185185-25-001448.txt ( ) — 10720KB
• vsee-20250331.xsd (EX-101.SCH) — 109KB
• vsee-20250331_cal.xml (EX-101.CAL) — 45KB
• vsee-20250331_def.xml (EX-101.DEF) — 544KB
• vsee-20250331_lab.xml (EX-101.LAB) — 899KB
• vsee-20250331_pre.xml (EX-101.PRE) — 545KB
• vsee10q033125_htm.xml (XML) — 1440KB

Financial Statements

Financial Statements 1 Condensed Consolidated Balance Sheets as of March 31, 2025 (Unaudited) and December 31, 2024 1 Condensed Consolidated Statements of Operations for the three months ended March 31, 2025 and 2024 (Unaudited) 2 Condensed Consolidated Statements of Stockholders' Deficit for the three months ended March 31, 2025 and 2024 (Unaudited) 3 Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2025 and 2024 (Unaudited) 4 Notes to Condensed Consolidated Financial Statements (Unaudited) 5 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 42 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 50 Item 4.

Controls and Procedures

Controls and Procedures 50 Part II Other Information Item 1.

Legal Proceedings

Legal Proceedings 52 Item 1A.

Risk Factors

Risk Factors 52 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 52 Item 3. Defaults Upon Senior Securities 52 Item 4. Mine Safety Disclosures 52 Item 5. Other Information 52 Item 6. Exhibits 53 Exhibit Index 53

Signatures

Signatures 54 i Table of Contents As used in this Quarterly Report on Form 10-Q, unless otherwise indicated, VSee Health, Inc., together with its consolidated subsidiaries, is hereinafter referred to as "VSee Health," the "Registrant," "us," "we," "our" or the "Company." Cautionary Note on Forward-Looking Statements This Quarterly Report on Form 10-Q contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements appear in a number of places in this Form 10-Q including, without limitation, in the section titled " Management's Discussion and Analysis of Financial Condition and Results of Operations ". In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Forward-looking statements are typically identified by words such as "plan," "believe," "expect," "anticipate," "intend," "outlook," "estimate," "forecast," "project," "continue," "could," "may," "might," "possible," "potential," "predict," "should," "would" and other similar words and expressions, but the absence of these words does not mean that a statement is not forward-looking. The forward-looking statements are based on the current expectations of our management and are inherently subject to uncertainties and changes in circumstances and their potential effects and speak only as of the date of such statement. There can be no assurance that future developments will be those that have been anticipated. These forward-looking different from those expressed or implied by these forward-looking statements. These risks and uncertainties include,

—FINANCIAL

PART I —FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements VSEE HEALTH, INC. (FKA DIGITAL HEALTH ACQUISITION CORP.) CONDENSED CONSOLIDATED BALANCE SHEETS March 31, December 31, 2025 2024 (Unaudited) ASSETS Current assets Cash $ 410,122 $ 326,115 Accounts receivable, net of allowance for credit losses of $ 2,513,952 and $ 2,393,033 as of March 31, 2025, and December 31, 2024, respectively 1,850,581 1,716,370 Due from related party 289,156 531,656 Prepaids and other current assets 529,994 446,826 Total current assets 3,079,853 3,020,967 Right-of-use assets, net 359,061 379,585 Intangible assets, net 10,442,500 10,995,000 Goodwill 4,916,694 4,916,694 Fixed assets, net 597,578 680,242 Total assets $ 19,395,686 $ 19,992,488 LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities Accounts payable and accrued liabilities 9,458,045 9,343,659 Deferred revenue 846,674 417,815 Due to related party 51,900 51,900 Operating lease liabilities 76,892 72,836 Financing lease liabilities 282,877 328,833 Factoring payable 150,380 179,007 Encompass Purchase liability 263,918 263,918 Equity Line of Credit 44,953 80,000 Quantum Convertible Note, related party, at fair value 3,691,806 3,248,000 September 2024 Convertible Note, at fair value 2,572,734 2,094,000 Loan payable, related party, net of discount 471,651 471,651 Line of credit 456,097 456,097 Notes payable, net of discount 1,090,606 433,983 Exchange Note, at fair value 2,462,897 1,499,000 Common stock issuance obligation 61,430 69,621 Total current liabilities $ 21,982,860 $ 19,010,320 Notes payable, less current portion, net of discount 593,941 593,941 Operating lease liabilities, less current portion 248,504 269,338 Deferred revenue, net of current portion — 69,999 Deferred tax liability 67,378 67,378 Total liabilities $ 22,892,683 $ 20,010,976 Commitments, Contingencies, and Concentration Risk (Note 10) Stockholder

View Full Filing

View this 10-Q filing on SEC EDGAR