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What changed in VSEE HEALTH, INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of VSEE HEALTH, INC.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+229 added−205 removedSource: 10-K (2026-03-31) vs 10-K (2025-08-28)

Top changes in VSEE HEALTH, INC.'s 2025 10-K

229 paragraphs added · 205 removed · 159 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

36 edited+3 added−2 removed146 unchanged
Biggest changeOur competitors may announce new products, services, or enhancements that better address changing industry standards or the needs of customers. Any such increased competition could cause pricing pressure, loss of market share or decreased client engagement, any of which could adversely affect our business and operating results.
Biggest changeAny such increased competition could cause pricing pressure, loss of market share or decreased client engagement, any of which could adversely affect our business and operating results. Internet search engines could also change their methodologies in ways that adversely affect our ability to optimize our page rankings within their search results.
Before the virtual visit, our telehealth platform allows healthcare providers to: ● Invite patients to your branded waiting room by email, SMS or website embedded button; ● Allow on-demand walk-ins and/or scheduled visits; ● Customize intake forms with logic such as calculating GAD7, etc.; ● Automate compliance with consent and provider state-matching, i.e., patient will only see providers with medical license in the patient’s state; ● Verify insurance eligibility; ● Collect online credit card payments; ● Lower wait times with wait queue tagging of specific clinician and hold my spot; ● Show educational videos or articles as patients wait; and 9 Table of Contents ● Live chat with the front desk.
Before the virtual visit, our telehealth platform allows healthcare providers to: ● Invite patients to your branded waiting room by email, SMS or website embedded button; ● Allow on-demand walk-ins and/or scheduled visits; ● Customize intake forms with logic such as calculating GAD7, etc.; ● Automate compliance with consent and provider state-matching, i.e., patient will only see providers with medical license in the patient’s state; ● Verify insurance eligibility; 2 Table of Contents ● Collect online credit card payments; ● Lower wait times with wait queue tagging of specific clinician and hold my spot; ● Show educational videos or articles as patients wait; and ● Live chat with the front desk.
Particularly, iDoc has an experienced team of board-certified neurointensivists, cardiac specialty trained intensivists, and medical intensivists that treat and coordinate care for acutely ill patients 24/7 in the neurointensive Care Unit (NICU), cardiac intensive care unit, and medical intensive care unit. None of our employees are represented by a labor union.
Particularly, iDoc has an experienced team of board-certified neurointensivists and radiologists, cardiac specialty trained intensivists, and medical intensivists that treat and coordinate care for acutely ill patients 24/7 in the neurointensive Care Unit (NICU), cardiac intensive care unit, and medical intensive care unit. None of our employees are represented by a labor union.
Setting up telehealth is often a complex experience, but our system allows fast setup and go live by which healthcare providers can: ● Set up a tailored online practice in as a fast as a few hours; ● Add logo, room description, provider profiles, legal documents; 10 Table of Contents ● Create or remove new providers, patients, and waiting rooms; ● Turn on/off options for 250+ points of configuration without doing programming (no code); ● Access asynchronous (eConsult) workflow; ● Manage walk-ins, appointments, group appointments; ● Process online payments, eligibility, claims submissions; ● Utilize flexible intake forms with logic and attachments; ● Connect with scheduled appointment interpreter service dispatch; and ● Integrate with electronic medical records (EMRs) such as EPIC, Cerner, etc.
Setting up telehealth is often a complex experience, but our system allows fast setup and go live by which healthcare providers can: ● Set up a tailored online practice in as a fast as a few hours; ● Add logo, room description, provider profiles, legal documents; ● Create or remove new providers, patients, and waiting rooms; ● Turn on/off options for 250+ points of configuration without doing programming (no code); ● Access asynchronous (eConsult) workflow; ● Manage walk-ins, appointments, group appointments; ● Process online payments, eligibility, claims submissions; ● Utilize flexible intake forms with logic and attachments; ● Connect with scheduled appointment interpreter service dispatch; and ● Integrate with electronic medical records (EMRs) such as EPIC, Cerner, etc.
VSee also supports security models such as strong encryption, single-sign-on (SSO), multi-factor-authentication (MFA), and VSee has passed the SOC2 audit. 11 Table of Contents iDoc’s Offering of Services and Technologies As a solutions company focused on inpatient specific disease areas with intentional purpose driven growth, and areas to provide access to general and specialty care to vulnerable patient populations, iDoc has a patient e-consultation service that is currently tailored to provide outpatient care to correctional facilities predominantly at the Federal level.
VSee also supports security models such as strong encryption, single-sign-on (SSO), multi-factor-authentication (MFA), and VSee has passed the SOC2 audit. iDoc’s Offering of Services and Technologies As a solutions company focused on inpatient specific disease areas with intentional purpose driven growth, and areas to provide access to general and specialty care to vulnerable patient populations, iDoc has a patient e-consultation service that is currently tailored to provide outpatient care to correctional facilities predominantly at the Federal level.
In addition, intensive care units have become increasingly complex environments, the dramatic increase in surgical therapeutic options for stroke, and the proliferation of the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) and Det Norske Veritas (DNV) stroke centers with the advent of multi-modal monitoring in the neurointensive 12 Table of Contents care unit, the need and use of electroencephalogram (EEG), the demand for intensivists with the knowledge to care for these patients has led to the growth of neurointensivists (critical care physicians with specialty training in neurosciences).
In addition, intensive care units have become increasingly complex environments, the dramatic increase in surgical therapeutic options for stroke, and the proliferation of the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) and Det Norske Veritas (DNV) stroke centers with the advent of multi-modal monitoring in the neurointensive care unit, the need and use of electroencephalogram (EEG), the demand for intensivists with the knowledge to care for these patients has led to the growth of neurointensivists (critical care physicians with specialty training in neurosciences).
The fee schedule basis for payment by the commercial insurance providers is determined with Medicare reimbursement fee structure guidelines and whether the Company is in network or out of network with the insurance carriers which varies based on state and insurer requirements. 19 Table of Contents COVID-19 Waivers and Limited Statutory Changes .
The fee schedule basis for payment by the commercial insurance providers is determined with Medicare reimbursement fee structure guidelines and whether the Company is in network or out of network with the insurance carriers which varies based on state and insurer requirements. COVID-19 Waivers and Limited Statutory Changes .
We believe we compete favorably based on the following key competitive factors for our industry: ● access to a broad network of established, board-certified physicians and other provider specialists; ● purpose-built acute care platform with highly configurable workflows and easy integration; ● demonstrated scalability; ● clinical and service quality; ● customer satisfaction; ● value; 14 Table of Contents ● reporting, analytics and benchmarking; ● experience; and ● flexibility.
We believe we compete favorably based on the following key competitive factors for our industry: ● access to a broad network of established, board-certified physicians and other provider specialists; ● purpose-built acute care platform with highly configurable workflows and easy integration; ● demonstrated scalability; ● clinical and service quality; ● customer satisfaction; ● value; ● reporting, analytics and benchmarking; ● experience; and ● flexibility.
In the context of performance claims for products such as VSee Lab and iDoc’s goods and 20 Table of Contents services, compliance with the FTC Act includes ensuring that there is scientific data to substantiate the claims being made, that the advertising is neither false nor misleading, and that any user testimonials or endorsements of the Company or its agents disseminate related to the goods or services comply with disclosure and other regulatory requirements.
In the context of performance claims for products such as VSee Lab and iDoc’s goods and services, compliance with the FTC Act includes ensuring that there is scientific data to substantiate the claims being made, that the advertising is neither false nor misleading, and that any user testimonials or endorsements of the Company or its agents disseminate related to the goods or services comply with disclosure and other regulatory requirements.
The Anti-Kickback Statute is broadly worded and prohibits the knowing and willful offer, payment, solicitation or receipt of any form of remuneration in return for, or to induce, (i) the referral of a person covered by Medicare, Medicaid or other governmental programs, 17 Table of Contents (ii) the furnishing or arranging for the furnishing of items or services reimbursable under Medicare, Medicaid or other governmental programs or (iii) the purchasing, leasing or ordering or arranging or recommending purchasing, leasing or ordering of any item or service reimbursable under Medicare, Medicaid or other governmental programs.
The Anti-Kickback Statute is broadly worded and prohibits the knowing and willful offer, payment, solicitation or receipt of any form of remuneration in return for, or to induce, (i) the referral of a person covered by Medicare, Medicaid or other governmental programs, (ii) the furnishing or arranging for the furnishing of items or services reimbursable under Medicare, Medicaid or other governmental programs or (iii) the purchasing, leasing or ordering or arranging or recommending purchasing, leasing or ordering of any item or service reimbursable under Medicare, Medicaid or other governmental programs.
Such projects require dozens of engineers and often take many months or even years. iDoc’s primary competitors include Hicuity Health, INTELEICU, and enVision teleICU (segment of INOVA), among others. While there are several competitors in this industry, many began from a hardware-centric focus, aiming to extend and integrate their devices into hospitals.
Such projects require dozens of engineers and often take many months or even years. 7 Table of Contents iDoc’s primary competitors include Hicuity Health, INTELEICU, and enVision teleICU (segment of INOVA), among others. While there are several competitors in this industry, many began from a hardware-centric focus, aiming to extend and integrate their devices into hospitals.
For additional information, see “Risk Factors - Risks Related to the Healthcare Industry.” In addition to HIPAA, state health information privacy and state health information privacy laws, we may be subject to other state and federal privacy laws, including laws that prohibit unfair privacy and security practices and deceptive statements about privacy and security and laws that place specific requirements on certain types of activities, such as data security and texting.
For additional information, see “Risk Factors - Risks Related to the Healthcare Industry.” 9 Table of Contents In addition to HIPAA, state health information privacy and state health information privacy laws, we may be subject to other state and federal privacy laws, including laws that prohibit unfair privacy and security practices and deceptive statements about privacy and security and laws that place specific requirements on certain types of activities, such as data security and texting.
The actual or perceived failure by us, our customers, partners, or vendors to comply with such obligations could harm our reputation, subject us to significant fines and liability, or otherwise adversely affect our business.” Data Collection and Protection We collect and use personal information for the purpose of clinical care on the behalf of our healthcare clients.
The actual or perceived failure by us, our customers, partners, or vendors to comply with such obligations could harm our reputation, subject us to significant fines and liability, or otherwise adversely affect our business.” 8 Table of Contents Data Collection and Protection We collect and use personal information for the purpose of clinical care on the behalf of our healthcare clients.
These include proceedings, claims, and investigations relating to, among other things, regulatory matters, commercial matters, intellectual property, competition, tax, employment, pricing, discrimination, consumer rights, personal injury, and property rights. Depending on the nature of the proceeding, claim, or investigation, we may be subject to settlement awards, monetary damage awards, fines, penalties, or injunctive orders.
These include proceedings, claims, and investigations relating to, among other things, regulatory matters, commercial matters, intellectual property, competition, tax, employment, pricing, discrimination, consumer rights, personal injury, and property rights. 13 Table of Contents Depending on the nature of the proceeding, claim, or investigation, we may be subject to settlement awards, monetary damage awards, fines, penalties, or injunctive orders.
Remuneration is defined under the CMPL as any transfer of items or services for free or for less than fair market value. There are certain exceptions to the definition of remuneration for offerings that meet the Financial Need, Preventative Care, or Promoting 18 Table of Contents Access to Care exceptions (as defined in the CMPL).
Remuneration is defined under the CMPL as any transfer of items or services for free or for less than fair market value. There are certain exceptions to the definition of remuneration for offerings that meet the Financial Need, Preventative Care, or Promoting Access to Care exceptions (as defined in the CMPL).
VSee supports efficient team coordination by allowing healthcare providers to: ● Set sound alerts and mobile notifications for when a patient is ready to be seen; ● Manage all patients from different waiting rooms in a single dashboard; ● Track patients throughout their visit — know exactly where they are at any point In the patient journey; and ● Coordinate among the Medical Administrative Specialists, nurses, physicians, schedulers with internal chats and customizable visit tags.
VSee supports efficient team coordination by allowing healthcare providers to: ● Set sound alerts and mobile notifications for when a patient is ready to be seen; ● Manage all patients from different waiting rooms in a single dashboard; ● Track patients throughout their visit — know exactly where they are at any point In the patient journey; and ● Coordinate among the Medical Administrative Specialists, nurses, physicians, schedulers with internal chats and customizable visit tags. 4 Table of Contents Our Administrative Features .
Sanctions for violations of the CMPL include civil monetary penalties and administrative penalties up to and including exclusion from participation in federal healthcare programs. FCPA and Other Anti-Bribery and Anti-Corruption Laws. The U.S.
Sanctions for violations of the CMPL include civil monetary penalties and administrative penalties up to and including exclusion from participation in federal healthcare programs. 11 Table of Contents FCPA and Other Anti-Bribery and Anti-Corruption Laws. The U.S.
A determination of liability under the Stark Law could harm our business. Federal Anti-Kickback Statute . We are also subject to the federal Anti-Kickback Statute.
A determination of liability under the Stark Law could harm our business. 10 Table of Contents Federal Anti-Kickback Statute . We are also subject to the federal Anti-Kickback Statute.
As of the filing of this Annual Report on Form 10-K, we were not a party to any material legal proceedings. Properties Our principal executive offices are located at 980 N Federal Hwy #304, Boca Raton, FL 33432, and our telephone number is (561) 672-7068. Our website can be found at https://vseehealth.com/.
As of the filing of this Annual Report on Form 10-K, we were not a party to any material legal proceedings. Properties Our principal executive offices are located at 980 N Federal Hwy #304, Boca Raton, FL 33432, and our telephone number is (561) 672-7068. Our website can be found at https://vseehealth.com/. Furthermore, iDoc has physical operations in Houston, Texas.
In addition to virtual visits, we also allow patients to engage their everyday wellness by: ● Setting personal health and wellness goals with their care team; ● Tracking their own progress with wellness device data from Fitbit, wireless scales, blood pressure cuffs, etc.; ● Sharing their food diary, mood chart, or other wellness charts; and ● Securely messaging questions to their provider or just share vacation photos.
In addition to virtual visits, we also allow patients to engage their everyday wellness by: ● Setting personal health and wellness goals with their care team; ● Tracking their own progress with wellness device data from Fitbit, wireless scales, blood pressure cuffs, etc.; ● Sharing their food diary, mood chart, or other wellness charts; and ● Securely messaging questions to their provider or just share vacation photos. 3 Table of Contents Our Productive Clinician Experience .
All human resources policies, practices and actions related to hiring, promotion, compensation, benefits and termination are administered in accordance with the principles of equal employment opportunity and other legitimate criteria without regard to race, color, religion, sex, sexual orientation, gender expression or identity, ethnicity, national origin, ancestry, age, mental or physical disability, genetic information, any veteran status, any military status or application for military service, or membership in any other category protected under applicable laws. 21 Table of Contents An effective approach to human capital management requires that we invest in talent, development, culture and employee engagement.
All human resources policies, practices and actions related to hiring, promotion, compensation, benefits and termination are administered in accordance with the principles of equal employment opportunity and other legitimate criteria without regard to race, color, religion, sex, sexual orientation, gender expression or identity, ethnicity, national origin, ancestry, age, mental or physical disability, genetic information, any veteran status, any military status or application for military service, or membership in any other category protected under applicable laws.
Market Opportunity We believe there are two significant trends and challenges facing healthcare in the United States: first, we believe that hospitals need a better method to engage with their patients, to make the patient’s experience dealing with healthcare easier; second, we believe that hospitals need better clinician staffing options since there is an ever growing shortage of nurses and physicians across America.
Our network physicians and other specialists are continuously trained and evaluated to appropriately integrate and utilize these updated practice standards. 5 Table of Contents Market Opportunity We believe there are two significant trends and challenges facing healthcare in the United States: first, we believe that hospitals need a better method to engage with their patients, to make the patient’s experience dealing with healthcare easier; second, we believe that hospitals need better clinician staffing options since there is an ever growing shortage of nurses and physicians across America.
As new practice standards are introduced, our network of board-certified physicians and other provider specialists review these standards and adapt them for national telemedicine practice. Our network physicians and other specialists are continuously trained and evaluated to appropriately integrate and utilize these updated practice standards.
As new practice standards are introduced, our network of board-certified physicians and other provider specialists review these standards and adapt them for national telemedicine practice.
Furthermore, iDoc has physical operations in Boston, Massachusetts and Houston, Texas. Such office locations for personnel are contracted via short-term leases. Employees and Human Capital Management We currently have approximately 154 full-time equivalent employees and contractors, of which approximately 24 are board certified practicing physicians.
Such office locations for personnel are contracted via short-term leases. Employees and Human Capital Management We currently have approximately 209 full-time equivalent employees and contractors, of which approximately 93 are board certified practicing physicians.
Each of VSee and iDoc also faces competition from large, well-financed health plans that in some cases have developed their own virtual care, expert medical service or in-house software platforms, as well as large technology and retail companies, such as Google, Microsoft, Amazon and Walmart, which have or may in the future develop or acquire their own virtual care solutions. 13 Table of Contents Many of our competitors are well financed, have been in business for substantially longer, have substantial financial resources and long standing contracts and relationships with major customers.
Each of VSee and iDoc also faces competition from large, well-financed health plans that in some cases have developed their own virtual care, expert medical service or in-house software platforms, as well as large technology and retail companies, such as Google, Microsoft, Amazon and Walmart, which have or may in the future develop or acquire their own virtual care solutions.
Our services that 16 Table of Contents allow members and other platform users to leverage such telephonic communications may be subject to these laws and regulations. Other Healthcare Laws and Regulations and Health Reform There are many laws that govern the activities of healthcare professionals, some of which may be applied to us because of our relationships with them.
Other Healthcare Laws and Regulations and Health Reform There are many laws that govern the activities of healthcare professionals, some of which may be applied to us because of our relationships with them.
We aim to create an environment where our employees are encouraged to make positive contributions and fulfill their potential. Our Board of Directors is also actively involved in reviewing and approving executive compensation, selections and succession plans so that we have leadership in place with the requisite skills and experience to deliver results the right way. ​
Our Board of Directors is also actively involved in reviewing and approving executive compensation, selections and succession plans so that we have leadership in place with the requisite skills and experience to deliver results the right way. 14 Table of Contents
Federal and State Telecommunications Laws There are a number of federal and state laws and regulations potentially applicable to communications by phone, text message, or facsimile, including the TCPA, and those laws and regulations are continuously evolving.
Federal and State Telecommunications Laws There are a number of federal and state laws and regulations potentially applicable to communications by phone, text message, or facsimile, including the TCPA, and those laws and regulations are continuously evolving. Our services that allow members and other platform users to leverage such telephonic communications may be subject to these laws and regulations.
Competition We view as competitors those companies that currently or in the future will develop and market virtual care technology (devices, software, and systems) or provide virtual care services, such as the delivery of on-demand access to healthcare and specialty disease state and care management and services.
Our customer success team supports customer retention by working directly with customers to produce higher engagement with our solutions, which in turn expands their use of the platform in the future. 6 Table of Contents Competition We view as competitors those companies that currently or in the future will develop and market virtual care technology (devices, software, and systems) or provide virtual care services, such as the delivery of on-demand access to healthcare and specialty disease state and care management and services.
Along with a dedicated in-house security team and contracted security researchers, we are SOC2 (Service Organization Control Type 2) audited by an external team. 15 Table of Contents U.S.
Along with a dedicated in-house security team and contracted security researchers, we are SOC2 (Service Organization Control Type 2) audited by an external team. U.S. State and Federal Health Information Privacy and Security Laws There are numerous U.S. federal and state laws and regulations related to the privacy and security of personally identifiable information, including health information.
VSee Lab Product Offerings The telehealth platform we have created provides a set of building blocks to solve clients’ urgent and growing needs. 8 Table of Contents Our “Patient Engagement Solutions” enable our health system customers to create a modern, warm, and productive experience, from scheduling an in-person appointment to conducting a virtual visit to reviewing the instructions from the physicians.
Our “Patient Engagement Solutions” enable our health system customers to create a modern, warm, and productive experience, from scheduling an in-person appointment to conducting a virtual visit to reviewing the instructions from the physicians.
As a result of the PHE expiration date of May 11, 2023, we have seen differing impacts to telehealth at the federal and state level but overall leaning towards increased adoption of telehealth services compared to pre-COVID-19 era.
As a result of the PHE expiration date of May 11, 2023, we have seen differing impacts to telehealth at the federal and state level but overall leaning towards increased adoption of telehealth services compared to pre-COVID-19 era. 12 Table of Contents FDA Regulation of Medical Devices Certain software products often used in telemedicine platforms and offerings could fall under the broad category of digital health products that may, in certain circumstances, require the U.S.
These programs target decision makers to provide information about our company and solutions through digital channels such as LinkedIn, our annual conference, online webinars, and tradeshows. Our customer success team supports customer retention by working directly with customers to produce higher engagement with our solutions, which in turn expands their use of the platform in the future.
These programs target decision makers to provide information about our company and solutions through digital channels such as LinkedIn, our annual conference, online webinars, and tradeshows.
Internet search engines could also change their methodologies in ways that adversely affect our ability to optimize our page rankings within their search results. If this occurs, our ability to successfully market our services to customers may be harmed and our business results may suffer.
If this occurs, our ability to successfully market our services to customers may be harmed and our business results may suffer.
Continuous process improvement and readjustment of target metrics with the ICU team to maximize patient safety and improve outcomes.
Continuous process improvement and readjustment of target metrics with the ICU team to maximize patient safety and improve outcomes. 1 Table of Contents VSee Lab Product Offerings The telehealth platform we have created provides a set of building blocks to solve clients’ urgent and growing needs.
Many of our competitors have public financial structures which enable them access to significant amounts of capital at a relatively low cost of capital. We have experienced, and expect to continue to experience, intense competition from a number of companies, and we expect such competition to increase as our industry evolves.
We have experienced, and expect to continue to experience, intense competition from a number of companies, and we expect such competition to increase as our industry evolves. Our competitors may announce new products, services, or enhancements that better address changing industry standards or the needs of customers.
Removed
State and Federal Health Information Privacy and Security Laws There are numerous U.S. federal and state laws and regulations related to the privacy and security of personally identifiable information, including health information.
Added
Many of our competitors are well financed, have been in business for substantially longer, have substantial financial resources and long standing contracts and relationships with major customers. Many of our competitors have public financial structures which enable them access to significant amounts of capital at a relatively low cost of capital.
Removed
FDA Regulation of Medical Devices Certain software products often used in telemedicine platforms and offerings could fall under the broad category of digital health products that may, in certain circumstances, require the U.S. Food and Drug Administration (the “FDA”) regulatory review prior to marketing.
Added
Food and Drug Administration (the “FDA”) regulatory review prior to marketing.
Added
An effective approach to human capital management requires that we invest in talent, development, culture and employee engagement. We aim to create an environment where our employees are encouraged to make positive contributions and fulfill their potential.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

64 edited+39 added−19 removed301 unchanged
Biggest changeIf our existing clients do not continue or renew their contracts with us, renew at lower fee levels or decline to purchase additional services from them, our business may be harmed. We expect to derive a significant portion of our revenues from renewal of existing client contracts and sales of additional services to existing clients.
Biggest changeIf the economic conditions of the general economy or the healthcare industry do not improve, or worsen from present levels, our business could be harmed. 18 Table of Contents If our existing clients do not continue or renew their contracts with us, renew at lower fee levels or decline to purchase additional services from them, our business may be harmed.
Further, our clients may seek contractual remedies and indemnification. Any investigation or proceeding related to these topics, even if unwarranted or without merit, could adversely affect demand for our services, could force us to expend significant capital, research and development and other resources to address the failure, and may harm our business.
Further, our clients may seek contractual remedies and indemnification. Any investigation or proceeding related to these topics, even if unwarranted or without merit, could adversely affect demand for our services, could force us to expend significant capital, research and development and other resources to address the failure, and may harm our business.
We also expect to invest significant additional funds towards enhancing our services and platform, growing our business and operating as a public company and as we continue to invest in increasing our hospital and healthcare system client base, expanding our operations, hiring additional employees, and developing future offerings.
We also expect to invest significant additional funds towards enhancing our services and platform, growing our business and operating as a public company and as we continue to invest in increasing our hospital and healthcare system client base, expanding our operations, hiring additional employees, and developing future offerings.
Achieving and maintaining market acceptance of our solutions could be negatively affected by many factors, including: ● the quality, popularity, pricing and timing of telemedicine consultation services utilized by us and our competitors; ● general economic conditions, particularly economic conditions adversely affecting discretionary and reimbursable healthcare spending; ● federal and state policy initiatives impacting the need for, fraud and abuse concerns regarding, and pricing of telemedicine services; ● changes in client needs and preferences; ● the development of specialty care practice standards or industry norms applicable to telemedicine consultation services; ● the availability of other forms of medical and telemedicine assistance; 23 Table of Contents ● lack of additional evidence or peer-reviewed publication of clinical evidence supporting the safety, ease-of-use, cost-savings or other perceived benefits of our solutions over competitive products or other currently available methodologies; ● perceived risks associated with the use of our solutions or similar products or technologies generally; and ● critical reviews and public tastes and preferences, all of which change rapidly and cannot be predicted.
Achieving and maintaining market acceptance of our solutions could be negatively affected by many factors, including: ● the quality, popularity, pricing and timing of telemedicine consultation services utilized by us and our competitors; ● general economic conditions, particularly economic conditions adversely affecting discretionary and reimbursable healthcare spending; ● federal and state policy initiatives impacting the need for, fraud and abuse concerns regarding, and pricing of telemedicine services; ● changes in client needs and preferences; ● the development of specialty care practice standards or industry norms applicable to telemedicine consultation services; ● the availability of other forms of medical and telemedicine assistance; ● lack of additional evidence or peer-reviewed publication of clinical evidence supporting the safety, ease-of-use, cost-savings or other perceived benefits of our solutions over competitive products or other currently available methodologies; ● perceived risks associated with the use of our solutions or similar products or technologies generally; and ● critical reviews and public tastes and preferences, all of which change rapidly and cannot be predicted.
Failure to secure additional funding may require us to modify, delay, or abandon some of our planned future expansion or development, or to otherwise enact operating cost reductions available to management, which could have a material adverse effect on our business, operating results, financial condition, and ability to achieve our intended business objectives. 45 Table of Contents We may amend the terms of the public warrants in a manner that may be adverse to holders of public warrants with the approval by the holders of at least 50% of the then outstanding public warrants.
Failure to secure additional funding may require us to modify, delay, or abandon some of our planned future expansion or development, or to otherwise enact operating cost reductions available to management, which could have a material adverse effect on our business, operating results, financial condition, and ability to achieve our intended business objectives. 35 Table of Contents We may amend the terms of the public warrants in a manner that may be adverse to holders of public warrants with the approval by the holders of at least 50% of the then outstanding public warrants.
Management’s failure to make strategic decisions that are ultimately accretive to our growth may result in unfavorable returns and uncertainty about its prospects, each of which could cause the price of our Common Stock to decline. 29 Table of Contents We may acquire other companies or technologies, which could divert our management’s attention, result in dilution to our stockholders, and otherwise disrupt our operations, and we may have difficulty integrating any such acquisitions successfully or realizing the anticipated benefits therefrom, any of which could harm our business.
Management’s failure to make strategic decisions that are ultimately accretive to our growth may result in unfavorable returns and uncertainty about its prospects, each of which could cause the price of our Common Stock to decline. 20 Table of Contents We may acquire other companies or technologies, which could divert our management’s attention, result in dilution to our stockholders, and otherwise disrupt our operations, and we may have difficulty integrating any such acquisitions successfully or realizing the anticipated benefits therefrom, any of which could harm our business.
The healthcare industry is required to comply with extensive and complex laws and regulations at the federal, and state government levels relating to, among other things: ● licensure of health providers, and enrollment with government reimbursement programs; ● necessity and adequacy of telehealth services; ● relationships with physicians and other referral sources and referral recipients; ● billing and coding for services; ● properly handling any overpayments; ● quality of medical equipment, devices and services we make available; ● qualifications of medical professionals and support personnel; ● confidentiality, maintenance, data breach, identity theft and security issues associated with health-related and personal information and medical records; and ● communications with patients and consumers.
The healthcare industry is required to comply with extensive and complex laws and regulations at the federal, and state government levels relating to, among other things: ● licensure of health providers, and enrollment with government reimbursement programs; ● necessity and adequacy of telehealth services; 25 Table of Contents ● relationships with physicians and other referral sources and referral recipients; ● billing and coding for services; ● properly handling any overpayments; ● quality of medical equipment, devices and services we make available; ● qualifications of medical professionals and support personnel; ● confidentiality, maintenance, data breach, identity theft and security issues associated with health-related and personal information and medical records; and ● communications with patients and consumers.
Our independent registered public accounting firm included an explanatory paragraph in its report on our consolidated financial statements as of and for the year ended December 31, 2024, which stated that management has concluded that substantial doubt exists about our ability to continue as a going concern for one year after the date our consolidated financial statements are issued.
Our independent registered public accounting firm included an explanatory paragraph in its report on our consolidated financial statements as of and for the year ended December 31, 2025, which stated that management has concluded that substantial doubt exists about our ability to continue as a going concern for one year after the date our consolidated financial statements are issued.
As discussed in Note 1 to our consolidated financial statements, we have an accumulated deficit at December 31, 2024 and continuing net losses and negative cash flows from operations and we expect to continue incurring operating losses and negative cash flows in the future. These matters raise substantial doubt about our ability to continue as a going concern.
As discussed in Note 1 to our consolidated financial statements, we have an accumulated deficit at December 31, 2025 and continuing net losses and negative cash flows from operations and we expect to continue incurring operating losses and negative cash flows in the future. These matters raise substantial doubt about our ability to continue as a going concern.
In addition, our existing clients may be slower to adopt our services than we currently anticipate, which could harm our business and growth prospects and adversely affect the market price of our common stock. 31 Table of Contents We may in the future become subject to litigation, which could be costly and time-consuming to defend.
In addition, our existing clients may be slower to adopt our services than we currently anticipate, which could harm our business and growth prospects and adversely affect the market price of our common stock. 22 Table of Contents We may in the future become subject to litigation, which could be costly and time-consuming to defend.
In connection with the audit of our financial statements as of and for the year ended December 31, 2024, our management identified material weaknesses in our internal control over financial reporting related to the lack of sufficient number of personnel within the accounting function to adequately segregate duties, we did not have a designed and implemented effective Information Technology General Controls (“ITGC”) related to access controls to financial accounting system, we did not have a formalized control environment and oversite of controls over financial reporting, and we lack proper accounting for significant or non-recurring transactions.
In connection with the audit of our consolidated financial statements as of and for the year ended December 31, 2025, our management identified material weaknesses in our internal control over financial reporting related to the lack of sufficient number of personnel within the accounting function to adequately segregate duties, we did not have a designed and implemented effective Information Technology General Controls (“ITGC”) related to access controls to financial accounting system, we did not have a formalized control environment and oversite of controls over financial reporting, and we lack proper accounting for significant or non-recurring transactions.
As an emerging growth company, we are not being required to comply with the auditor attestation requirements of section 404 of the Sarbanes-Oxley Act, we have reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and we are exempt from the requirements 42 Table of Contents of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
As an emerging growth company, we are not being required to comply with the auditor attestation requirements of section 404 of the Sarbanes-Oxley Act, we have reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and we are exempt from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Factors that may contribute to the variability of our operating results include: ● the addition or loss of large hospital and healthcare system clients, including through acquisitions or consolidations of such clients; ● seasonal and other variations in the timing of our sales and implementation cycles, especially in the case of our large clients; ● the timing of recognition of revenue, including possible delays in the recognition of revenue due to sometimes unpredictable implementation timelines; ● the amount and timing of operating expenses related to the maintenance and expansion of our business, operations and infrastructure; ● the timing and success of introductions of new products and services by us or our competitors or any other change in the competitive dynamics of our industry, including consolidation among competitors, hospital and healthcare system clients or strategic partners; ● hospital and healthcare system client renewal rates and the timing and terms of such renewals; ● the mix of services sold and utilization volume of our services during a period; ● the timing of expenses related to the development or acquisition of technologies or businesses and potential future charges for impairment of goodwill from acquired companies; ● technical difficulties or interruptions in our services; ● breaches of information security or privacy; ● our ability to hire and retain qualified personnel, including cross-licensing and privileging each of our physician networks; ● changes in the structure of healthcare provider and payment systems; ● changes in the legislative or regulatory environment, including with respect to healthcare, privacy, or data protection, or enforcement by government regulators, including fines, orders, or consent decrees; ● the cost and potential outcomes of ongoing or future regulatory investigations or examinations, or of future litigation; ● political, economic and social instability, including terrorist activities and health epidemics, and any disruption these events may cause to the global economy; and ● changes in business or macroeconomic conditions. 25 Table of Contents The impact of one or more of the foregoing and other factors may cause our operating results to vary significantly.
Factors that may contribute to the variability of our operating results include: ● the addition or loss of large hospital and healthcare system clients, including through acquisitions or consolidations of such clients; ● seasonal and other variations in the timing of our sales and implementation cycles, especially in the case of our large clients; ● the timing of recognition of revenue, including possible delays in the recognition of revenue due to sometimes unpredictable implementation timelines; ● the amount and timing of operating expenses related to the maintenance and expansion of our business, operations and infrastructure; ● the timing and success of introductions of new products and services by us or our competitors or any other change in the competitive dynamics of our industry, including consolidation among competitors, hospital and healthcare system clients or strategic partners; ● hospital and healthcare system client renewal rates and the timing and terms of such renewals; ● the mix of services sold and utilization volume of our services during a period; ● the timing of expenses related to the development or acquisition of technologies or businesses and potential future charges for impairment of goodwill from acquired companies; ● technical difficulties or interruptions in our services; ● breaches of information security or privacy; ● our ability to hire and retain qualified personnel, including cross-licensing and privileging each of our physician networks; ● changes in the structure of healthcare provider and payment systems; ● changes in the legislative or regulatory environment, including with respect to healthcare, privacy, or data protection, or enforcement by government regulators, including fines, orders, or consent decrees; ● the cost and potential outcomes of ongoing or future regulatory investigations or examinations, or of future litigation; ● political, economic and social instability, including terrorist activities and health epidemics, and any disruption these events may cause to the global economy; and ● changes in business or macroeconomic conditions.
Failure to adequately comply with the requirements of being a public company, including deficiencies in financial reporting or ineffective disclosure controls and procedures and internal control over financial reporting, could cause 43 Table of Contents investors to lose confidence in the our reported financial and other information and materially adversely affect our business, financial condition and results of operation, as well as severely negatively affect our stock price.
Failure to adequately comply with the requirements of being a public company, including deficiencies in financial reporting or ineffective disclosure controls and procedures and internal control over financial reporting, could cause investors to lose confidence in the our reported financial and other information and materially adversely affect our business, financial condition and results of operation, as well as severely negatively affect our stock price.
These claims, with or without merit, could cause them to incur substantial costs and could place a significant strain on our financial resources, divert the attention of management 26 Table of Contents from our core business, harm our reputation and adversely affect our ability to attract and retain clients, any of which could have a material adverse effect on our business, financial condition and results of operations.
These claims, with or without merit, could cause them to incur substantial costs and could place a significant strain on our financial resources, divert the attention of management from our core business, harm our reputation and adversely affect our ability to attract and retain clients, any of which could have a material adverse effect on our business, financial condition and results of operations.
Further, obtaining a license to practice medicine in a particular jurisdiction is at the discretion of the local state medical board, and, as such, timing to achieve licensure in certain jurisdictions may be outside our ability to accomplish within expected time frames. Certain software products related to telemedicine platforms may be subject to FDA regulatory review and oversight.
Further, obtaining a license to practice medicine in a particular jurisdiction is at the discretion of the local state medical board, and, as such, timing to achieve licensure in certain jurisdictions may be outside our ability to accomplish within expected time frames. 28 Table of Contents Certain software products related to telemedicine platforms may be subject to FDA regulatory review and oversight.
If we are unable to compete successfully in the telemedicine industry, our business, financial condition and results of operations will be harmed. Moreover, we expect that competition will continue to increase as a result of consolidation in the healthcare industry. Many healthcare industry participants are consolidating to create integrated healthcare delivery systems with greater market power.
If we are unable to compete successfully in the telemedicine industry, our business, financial condition and results of operations will be harmed. 15 Table of Contents Moreover, we expect that competition will continue to increase as a result of consolidation in the healthcare industry. Many healthcare industry participants are consolidating to create integrated healthcare delivery systems with greater market power.
A breach or failure of our security measures could result from a variety of circumstances and events, including third-party action, employee negligence or error, malfeasance, 39 Table of Contents computer viruses, cyber-attacks by computer hackers, failures during the process of upgrading or replacing software and databases, power outages, hardware failures, telecommunication failures, user errors or catastrophic events.
A breach or failure of our security measures could result from a variety of circumstances and events, including third-party action, employee negligence or error, malfeasance, computer viruses, cyber-attacks by computer hackers, failures during the process of upgrading or replacing software and databases, power outages, hardware failures, telecommunication failures, user errors or catastrophic events.
In addition, other similar legislation or regulations at the federal or state level may be adopted that could have a material adverse effect on our business, financial condition, results of operations and cash flows. 33 Table of Contents To enforce compliance with the federal laws, the U.S. Department of Justice and the U.S.
In addition, other similar legislation or regulations at the federal or state level may be adopted that could have a material adverse effect on our business, financial condition, results of operations and cash flows. To enforce compliance with the federal laws, the U.S. Department of Justice and the U.S.
Generally, among other requirements, we must maintain a minimum bid price of our common stock (generally, $1.00) minimum amount in stockholders’ equity (generally, $2,500,000), maintain a 47 Table of Contents minimum number of holders of our securities (generally, 300 public holders), and must timely file all required periodic financial reports with the SEC .
Generally, among other requirements, we must maintain a minimum bid price of our common stock (generally, $1.00) minimum amount in stockholders’ equity (generally, $2,500,000), maintain a minimum number of holders of our securities (generally, 300 public holders), and must timely file all required periodic financial reports with the SEC.
A material change in corporate practice of medicine interpretation could impact our operations and could impair our ability to provide services to our clients and harm our business. If we are not able to develop and release new solutions, or successful enhancements, new features and modifications to our existing solutions, our business could be harmed.
A material change in corporate practice of medicine interpretation could impact our operations and could impair our ability to provide services to our clients and harm our business. 19 Table of Contents If we are not able to develop and release new solutions, or successful enhancements, new features and modifications to our existing solutions, our business could be harmed.
Delays in launching new solutions may open windows of opportunity for new and existing competitors to erode our market share and may negatively impact our revenues and profitability. 28 Table of Contents Any failure to offer high-quality technical support services may harm our relationships with our clients and our financial results.
Delays in launching new solutions may open windows of opportunity for new and existing competitors to erode our market share and may negatively impact our revenues and profitability. Any failure to offer high-quality technical support services may harm our relationships with our clients and our financial results.
If this were to occur, we could face significant material adverse consequences, including: ● a limited availability of market quotations for our securities; ● reduced liquidity for our securities; ● a determination that our Common Stock is a “penny stock” which will require brokers trading in our Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; ● a limited amount of news and analyst coverage; and ● a decreased ability to issue additional securities or obtain additional financing in the future. ​ ​ Item 1B.
If this were to occur, we could face significant material adverse consequences, including: ● a limited availability of market quotations for our securities; ● reduced liquidity for our securities; 37 Table of Contents ● a determination that our Common Stock is a “penny stock” which will require brokers trading in our Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; ● a limited amount of news and analyst coverage; and ● a decreased ability to issue additional securities or obtain additional financing in the future.
As competition in our market grows, the possibility of patent infringement, trademark infringement and other intellectual 41 Table of Contents property claims against us increases. In a patent infringement claim against us, we may assert, as a defense, that we do not infringe the relevant patent claims, that the patent is invalid or both.
As competition in our market grows, the possibility of patent infringement, trademark infringement and other intellectual property claims against us increases. In a patent infringement claim against us, we may assert, as a defense, that we do not infringe the relevant patent claims, that the patent is invalid or both.
As such, we believe that quarter-to-quarter and year-to-year comparisons of our operating results may not be meaningful and should not be relied upon as an indication of future performance. Our sales cycles can be long and unpredictable and requires considerable time and expense.
As such, we believe that quarter-to-quarter and year-to-year comparisons of our operating results may not be meaningful and should not be relied upon as an indication of future performance. 17 Table of Contents Our sales cycles can be long and unpredictable and requires considerable time and expense.
This could damage tour reputation and impair our ability to attract or maintain clients. Moreover, complex software, such as ours, often contains defects and errors, some of which may remain undetected for a period of time.
This could damage tour reputation and impair our ability to attract or maintain clients. 31 Table of Contents Moreover, complex software, such as ours, often contains defects and errors, some of which may remain undetected for a period of time.
We have agreed 46 Table of Contents not to issue any shares of Common Stock upon conversion of the Ascent Note in excess of stock issuance cap required by the rules of Nasdaq (the “Exchange Cap”) unless we obtain stockholder approval for issuance of shares of Common Stock exceeding such Exchange Cap.
We have agreed not to issue any shares of Common Stock upon conversion of the Ascent Note in excess of stock issuance cap required by the rules of Nasdaq (the “Exchange Cap”) unless we obtain stockholder approval for issuance of shares of Common Stock exceeding such Exchange Cap.
We must also 30 Table of Contents attract, train and retain a significant number of board-certified physicians, sales and marketing personnel, client support personnel, professional services personnel, software engineers, technical personnel and management personnel, and the availability of such personnel, in particular physicians and software engineers, may be constrained.
We must also attract, train and retain a significant number of board-certified physicians, sales and marketing personnel, client support personnel, professional services personnel, software engineers, technical personnel and management personnel, and the availability of such personnel, in particular physicians and software engineers, may be constrained.
Breaches affecting 500 patients or more in the same state or 36 Table of Contents jurisdiction must also be reported to the local media. If a breach involves fewer than 500 people, the covered entity must record it in a log and notify HHS at least annually. This reporting obligation is in addition to any state notification requirements.
Breaches affecting 500 patients or more in the same state or jurisdiction must also be reported to the local media. If a breach involves fewer than 500 people, the covered entity must record it in a log and notify HHS at least annually. This reporting obligation is in addition to any state notification requirements.
We may also be subject to routine and targeted government audits and investigations. We believe that the regulatory environment surrounding most segments of 34 Table of Contents the healthcare industry remains intense. Responding to audits and inquiries may require us to incur significant expense.
We may also be subject to routine and targeted government audits and investigations. We believe that the regulatory environment surrounding most segments of the healthcare industry remains intense. Responding to audits and inquiries may require us to incur significant expense.
We intend to make investments to support our anticipated business growth and will likely require additional funds to respond to business challenges, including the need to develop new solutions or enhance our existing solutions, enhance 32 Table of Contents our operating infrastructure and acquire complementary businesses and technologies.
We intend to make investments to support our anticipated business growth and will likely require additional funds to respond to business challenges, including the need to develop new solutions or enhance our existing solutions, enhance our operating infrastructure and acquire complementary businesses and technologies.
These efforts may prove more expensive than we currently anticipate, and we may not succeed in increasing our revenues sufficiently to offset these higher expenses. Our current management team have no experience managing a public company.
These efforts may prove more expensive than we currently anticipate, and we may not succeed in increasing our revenues sufficiently to offset these higher expenses. 32 Table of Contents Our current management team have no experience managing a public company.
Our ability to manage and anticipate physician need and prioritize 38 Table of Contents licensing and credentialing could impact profit margins and expense management.
Our ability to manage and anticipate physician need and prioritize licensing and credentialing could impact profit margins and expense management.
If the interpretations, estimates or judgments we use to prepare our financial statements prove to be incorrect, we may be required to restate our financial results, which could have a number of material adverse effects on us. There is uncertainty regarding our ability to continue as a going concern.
If the interpretations, estimates or judgments we use to prepare our financial statements prove to be incorrect, we may be required to restate our financial results, which could have a number of material adverse effects on us.
In addition, other legislation or regulations at the federal or state level may be adopted that could harm our business. 35 Table of Contents Our collection, use and disclosure of personally identifiable information, including health information, is subject to federal and state privacy and security regulations, and our failure to comply with those regulations or to adequately secure the information we hold could result in significant liability or reputational harm to us and, in turn, harm our client base and our business.
Our collection, use and disclosure of personally identifiable information, including health information, is subject to federal and state privacy and security regulations, and our failure to comply with those regulations or to adequately secure the information we hold could result in significant liability or reputational harm to us and, in turn, harm our client base and our business.
The issuance of shares Common Stock upon the conversion of the Quantum Note and the Ascent Note and the exercise of the Ascent Warrants, would dilute the percentage ownership interest of holders of our Common Stock, dilute the book value per share of our Common Stock and increase the number of our publicly traded shares, which could depress the market price of our Common Stock.
In addition, shares of Common Stock are issuable upon exercise of the Ascent Warrants (as defined herein). 36 Table of Contents The issuance of shares Common Stock upon the conversion of the Quantum Note and the Ascent Note and the exercise of the Ascent Warrants, would dilute the percentage ownership interest of holders of our Common Stock, dilute the book value per share of our Common Stock and increase the number of our publicly traded shares, which could depress the market price of our Common Stock.
We intend to continue to take steps to enhance our internal controls, including implementing additional internal procedures and utilizing well-established external consulting resources with experience and expertise in U.S. GAAP and public company accounting and reporting requirements.
We intend to continue to take steps to enhance our internal controls, including implementing additional internal procedures and utilizing well-established external consulting resources with experience and expertise in accounting principles generally accepted in the United States (“U.S. GAAP”) and public company accounting and reporting requirements.
Our failure to achieve or maintain profitability or positive cash flow could negatively affect the value of our common stock. The developing and rapidly evolving nature of our business and the markets in which we operate may make it difficult to evaluate our business. We have been creating offerings for the developing and rapidly evolving market for telemedicine services.
Our failure to achieve or maintain profitability or positive cash flow could negatively affect the value of our common stock. 16 Table of Contents The developing and rapidly evolving nature of our business and the markets in which we operate may make it difficult to evaluate our business.
Further, our current or potential competitors may be acquired by third parties with greater available resources. As a result, our competitors may be able to respond more quickly and effectively than either can to new or changing opportunities, technologies, standards or client requirements and may have the ability to initiate or withstand substantial price competition.
As a result, our competitors may be able to respond more quickly and effectively than either can to new or changing opportunities, technologies, standards or client requirements and may have the ability to initiate or withstand substantial price competition.
Although we maintain insurance covering certain security and privacy damages and claim expenses, we may not carry insurance or maintain coverage sufficient to compensate for all liability and, in any event, insurance coverage would not address the reputational damage that could result from a security incident.
Although we maintain insurance covering certain security and privacy damages and claim expenses, we may not carry insurance or maintain coverage sufficient to compensate for all liability and, in any event, insurance coverage would not address the reputational damage that could result from a security incident. 29 Table of Contents We may experience cyber-security and other breach incidents that remain undetected for an extended period.
Risks Related to Governmental Regulation In the U.S., we conduct business in a heavily regulated environment and if we fail to comply with health care laws and regulations, we could incur fines and other penalties, be prohibited from participating in certain reimbursement programs or be required to make significant changes to our operations or experience adverse publicity, which could have a material adverse effect on our business, financial condition, and results of operations.
If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly limited. 23 Table of Contents Risks Related to Governmental Regulation In the U.S., we conduct business in a heavily regulated environment and if we fail to comply with health care laws and regulations, we could incur fines and other penalties, be prohibited from participating in certain reimbursement programs or be required to make significant changes to our operations or experience adverse publicity, which could have a material adverse effect on our business, financial condition, and results of operations.
A determination that we have violated these or other laws, or the public announcement that we are being investigated for possible violations of these or other laws, could harm our business, and our business reputation could suffer significantly.
A determination that we have violated these or other laws, or the public announcement that we are being investigated for possible violations of these or other laws, could harm our business, and our business reputation could suffer significantly. In addition, other legislation or regulations at the federal or state level may be adopted that could harm our business.
While we maintain insurance covering certain security and privacy damages and claim expenses, we may not carry insurance or maintain coverage sufficient to compensate for all liability and, in any event, insurance coverage would not address the reputational damage that could result from a security incident.
While we maintain insurance covering certain security and privacy damages and claim expenses, we may not carry insurance or maintain coverage sufficient to compensate for all liability and, in any event, insurance coverage would not address the reputational damage that could result from a security incident. 27 Table of Contents We also publish statements to our clients that describe how we handle and protect personal information.
Acquisitions could also result in dilutive issuances of equity securities or the incurrence of debt, which could adversely affect our results of operations or cause the market price of our common stock to decline. In addition, if an acquired business fails to meet our expectations, our business may be harmed.
Acquisitions could also result in dilutive issuances of equity securities or the incurrence of debt, which could adversely affect our results of operations or cause the market price of our common stock to decline.
We may experience cyber-security and other breach incidents that remain undetected for an extended period. Because techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not recognized until launched, we may be unable to anticipate these techniques or to implement adequate preventive measures.
Because techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not recognized until launched, we may be unable to anticipate these techniques or to implement adequate preventive measures.
If we are unable to maintain and expand our network, our future growth would be limited and our business would be harmed. Our success is dependent upon our continued ability to maintain a network of established health care systems providers and established, board-certified physicians and other provider specialists.
Our success is dependent upon our continued ability to maintain a network of established health care systems providers and established, board-certified physicians and other provider specialists.
While HIPAA does not create a private right of action allowing individuals to sue us in civil court for violations of HIPAA, its standards have been used as the basis for duty of care in state civil suits such as those for negligence or recklessness in the misuse or breach of PHI.
While HIPAA does not create a private right of action allowing individuals to sue us in civil court for violations of HIPAA, its standards have been used as the basis for duty of care in state civil suits such as those for negligence or recklessness in the misuse or breach of PHI. 26 Table of Contents In addition, HIPAA mandates that the Secretary of HHS conduct periodic compliance audits of HIPAA covered entities or business associates for compliance with the HIPAA Privacy and Security Standards.
Competition from specialized telemedicine services and software providers, healthcare providers and other parties will result in continued pricing pressures, which is likely to lead to price declines in certain of our services, which could negatively impact our sales, profitability and market share. 22 Table of Contents Some of our competitors may have greater name recognition, longer operating histories and significantly greater resources than we do.
Competition from specialized telemedicine services and software providers, healthcare providers and other parties will result in continued pricing pressures, which is likely to lead to price declines in certain of our services, which could negatively impact our sales, profitability and market share.
If we are unable to grow, or if we fail to manage future growth effectively, our revenues may not increase and we may be unable to implement our business strategy.
In addition, if an acquired business fails to meet our expectations, our business may be harmed. 21 Table of Contents If we are unable to grow, or if we fail to manage future growth effectively, our revenues may not increase and we may be unable to implement our business strategy.
Any errors, failures, interruptions or delays experienced in connection with our or our third parties’ systems could negatively impact our relationships with clients, adversely affect our brand and expose us to liabilities to third parties, all of which could harm our business. 40 Table of Contents Failure to protect or enforce our intellectual property rights could impair our ability to protect our internally developed technology and our brand and the costs involved in such enforcement could harm our business.
Any errors, failures, interruptions or delays experienced in connection with our or our third parties’ systems could negatively impact our relationships with clients, adversely affect our brand and expose us to liabilities to third parties, all of which could harm our business.
Our business, results of operations, and financial condition may fluctuate on a quarterly and annual basis, which may result in a decline in our stock price if such fluctuations result in a failure to meet any projections that we may provide or the expectations of securities analysts or investors. 24 Table of Contents Our operating results have in the past and could in the future vary significantly from quarter-to-quarter and year-to-year and may fail to match our past performance, our projections or the expectations of securities analysts because of a variety of factors, many of which are outside of our control.
Our business, results of operations, and financial condition may fluctuate on a quarterly and annual basis, which may result in a decline in our stock price if such fluctuations result in a failure to meet any projections that we may provide or the expectations of securities analysts or investors.
You should consider our business and prospects in light of the risks and difficulties either VSee Lab and/or iDoc encounter or may encounter.
It is difficult to evaluate trends that may affect our business and whether our expansion will be profitable. You should consider our business and prospects in light of the risks and difficulties either VSee Lab and/or iDoc encounter or may encounter.
Further, our contractual arrangements may not effectively prevent disclosure of our confidential information or provide an adequate remedy in the event of unauthorized disclosure of our confidential information, and we may be unable to detect the unauthorized use of, or take appropriate steps to enforce, our intellectual property rights.
Further, our contractual arrangements may not effectively prevent disclosure of our confidential information or provide an adequate remedy in the event of unauthorized disclosure of our confidential information, and we may be unable to detect the unauthorized use of, or take appropriate steps to enforce, our intellectual property rights. 30 Table of Contents We make business decisions about when to seek patent protection for a particular technology and when to rely upon trade secret protection, and the approach we select may ultimately prove to be inadequate.
If our clients fail to renew their contracts, renew our contracts upon less favorable terms or at lower fee levels or fail to purchase new solutions and services from them, our revenues may decline, or our future revenue growth may be constrained. 27 Table of Contents Our telemedicine business and growth strategy depends on our ability to maintain and expand our network of established hospital system and telemedicine user bases, board-certified physicians and other provider specialists.
If our clients fail to renew their contracts, renew our contracts upon less favorable terms or at lower fee levels or fail to purchase new solutions and services from them, our revenues may decline, or our future revenue growth may be constrained.
If federal or state regulatory authorities or private litigants consider any portion of these statements to be untrue, we may be subject to claims of deceptive practices, which could lead to significant liabilities and consequences, including, without limitation, costs of responding to investigations, defending against litigation, settling claims and complying with regulatory or court orders. 37 Table of Contents In March 2020, the Office of the National Coordinator for Health Information Technology (“ONC”) released a final rule implementing the information blocking prohibition of the 21st Century Cures Act, which went into effect on April 5, 2021.
If federal or state regulatory authorities or private litigants consider any portion of these statements to be untrue, we may be subject to claims of deceptive practices, which could lead to significant liabilities and consequences, including, without limitation, costs of responding to investigations, defending against litigation, settling claims and complying with regulatory or court orders.
We cannot predict the timing, strength or duration of any economic slowdown, instability or recovery, generally or within the healthcare industry, or the effect of political changes. If the economic conditions of the general economy or the healthcare industry do not improve, or worsen from present levels, our business could be harmed.
We cannot predict the timing, strength or duration of any economic slowdown, instability or recovery, generally or within the healthcare industry, or the effect of political changes.
State legislative and regulatory changes specific to the area of telehealth law may present the third party medical groups and independent physicians on our platform with additional requirements and state compliance costs, which may create additional operational complexity and increase costs.
We cannot assure you that a review of our business by judicial, law enforcement, regulatory or accreditation authorities will not result in a determination that could adversely affect our operations. 24 Table of Contents State legislative and regulatory changes specific to the area of telehealth law may present the third party medical groups and independent physicians on our platform with additional requirements and state compliance costs, which may create additional operational complexity and increase costs.
In connection with the preparation of our financial statements for the fiscal year ended December 31, 2024, we identified material weaknesses in our internal control over financial reporting and clinical trial expenses. If we fail to maintain an efective systemof internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud.
Item 1A. Risk Factors Risks Related to Our Operation of Business In connection with the preparation of our financial statements for the fiscal year ended December 31, 2024, we identified material weaknesses in our internal control over financial reporting and clinical trial expenses.
Any of these factors could adversely affect the demand for and market utilization of our solutions, which would harm its business. We may incur losses in the future, and thereafter may never achieve or sustain profitability. We expect our costs will increase in the foreseeable future and we may incur losses.
We may incur losses in the future, and thereafter may never achieve or sustain profitability. We expect our costs will increase in the foreseeable future and we may incur losses.
Our intellectual property includes our internally developed processes, methodologies, algorithms, applications, technology platform, software code, website content, user interfaces, graphics, trade dress, databases and domain names. We rely on a combination of trademark, trade secret and copyright laws and confidentiality procedures and contractual provisions to protect our intellectual property rights in our internally developed technology and content.
We rely on a combination of trademark, trade secret and copyright laws and confidentiality procedures and contractual provisions to protect our intellectual property rights in our internally developed technology and content. We believe that our intellectual property is an essential asset of our business.
As a result, stockholders could lose confidence in our financial and other public reporting, which would harmour business and the trading price of our Common Stock and listed Warrants.
If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud. As a result, stockholders could lose confidence in our financial and other public reporting, which would harm our business and the trading price of our Common Stock and listed Warrants.
Each of VSee Lab, iDoc and telemedicine overall has limited operating history with their current solutions and business model makes it difficult to evaluate their business and prospects. It is difficult to evaluate trends that may affect our business and whether our expansion will be profitable.
We have been creating offerings for the developing and rapidly evolving market for telemedicine services. Each of VSee Lab, iDoc and telemedicine overall has limited operating history with their current solutions and business model makes it difficult to evaluate their business and prospects.
We make business decisions about when to seek patent protection for a particular technology and when to rely upon trade secret protection, and the approach we select may ultimately prove to be inadequate. In particular, we do not currently hold a patent or other registered or applied for intellectual property protection for our software platform.
In particular, we do not currently hold a patent or other registered or applied for intellectual property protection for our software platform.
We are required to provide an annual management report on the effectiveness of our internal control over financial reporting commencing with this annual report on Form 10-K for the year ended December 31, 2024. 44 Table of Contents We reached a determination to restate certain of our previously issued consolidated financial statements as a result of the identification of errors in previously issued consolidated financial statements, which resulted in unanticipated costs and may affect investor confidence and raise reputational issues.
We are required to provide an annual management report on the effectiveness of our internal control over financial reporting commencing with this annual report on Form 10-K for the year ended December 31, 2025. 33 Table of Contents If our business’ benefits do not meet the expectations of financial or industry analysts, the market price of our securities may decline.
Removed
Item 1A. Risk Factors Risks Related to Our Operation of Business The restatement of our previously issued financial statements and associated analysis and ongoing remedial measures have been time consuming and expensive and could expose usto additional risksthatcould materially adversely af ect ourfinancial position,results of operations and cash flows.
Added
We have a history of losses, anticipate increasing our operating expenses in the future and may not achieve or maintain profitability in the future. We have a history of operating losses, including operating losses of $9,582,893 and $62,150,845 for the years ended December 31, 2025 and 2024, respectively.
Removed
If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly limited.
Added
We had an accumulated deficit of $82,416,723 at December 31, 2025, and there can be no assurance if or when we will produce sufficient revenue from our operations to support our costs.
Removed
We cannot assure you that a review of our business by judicial, law enforcement, regulatory or accreditation authorities will not result in a determination that could adversely affect our operations.
Added
We must generate and sustain higher revenue levels in future periods to become profitable, and, even if we do, we may not be able to maintain or increase our profitability.
Removed
In addition, HIPAA mandates that the Secretary of HHS conduct periodic compliance audits of HIPAA covered entities or business associates for compliance with the HIPAA Privacy and Security Standards.
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We expect to continue to incur losses for the foreseeable future as we expend substantial financial and other resources and these expenditures may not result in additional revenue or the growth of our business. Accordingly, we may not be able to generate sufficient revenue to offset our expected cost increases and achieve and sustain profitability.
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We also publish statements to our clients that describe how we handle and protect personal information.
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If we fail to achieve and sustain profitability, the market price of our Common Stock could decline. There is uncertainty regarding our ability to continue as a going concern.
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We believe that our intellectual property is an essential asset of our business.
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Some of our competitors may have greater name recognition, longer operating histories and significantly greater resources than we do. Further, our current or potential competitors may be acquired by third parties with greater available resources.
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In connection with the audit of our financial statements as of and for the year ended December 31, 2024, our management determined that the material weakness identified in connection with the 2024 audit had not been fully remediated, which resulted in the late filing of the 2024 Annual Report.
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Any of these factors could adversely affect the demand for and market utilization of our solutions, which would harm its business. We have in the past been, and may in the future be, dependent on a limited number of significant customers.
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As discussed in the Explanatory Note and in Note 2 of our consolidated financial statements, we reached a determination to restate certain of our historical consolidated financial statements and related disclosures for the periods disclosed in that note after identifying accounting errors with the recognition and measurement of accrued expenses.
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Due to the size and nature of our arrangements with customers, one or a few customers have in the past and may in the future represent a substantial portion of our consolidated revenues and gross profits in any one year or over a period of several consecutive years.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe are in the process of evaluating our cybersecurity needs and developing appropriate measures to enhance our cybersecurity posture. This includes considering the engagement of external cybersecurity experts to advise on best practices, conducting vulnerability assessments and developing an incident response strategy.
Biggest changeThis includes considering the engagement of external cybersecurity experts to advise on best practices, conducting vulnerability assessments and developing an incident response strategy. Our goal is to establish a cybersecurity framework that is commensurate with our size, complexity and the nature of our operations, thereby reducing our exposure to cybersecurity risks.
For a discussion of potential cybersecurity risks affecting us, please refer to the “Risk Factors” section. ​
For a discussion of potential cybersecurity risks affecting us, please refer to the “Risk Factors” section. 38 Table of Contents
Our goal is to establish a cybersecurity framework that is commensurate with our size, complexity and the nature of our operations, thereby reducing our exposure to cybersecurity risks. ​ In addition, our Board of Directors will oversee any cybersecurity risk management framework and a dedicated committee of our Board of Directors or an officer appointed by our Board of Directors will review and approve any cybersecurity policies, strategies and risk management practices.
In addition, our Board of Directors will oversee any cybersecurity risk management framework and a dedicated committee of our Board of Directors or an officer appointed by our Board of Directors will review and approve any cybersecurity policies, strategies and risk management practices.
However, we recognize that the absence of a formalized cybersecurity framework may leave us vulnerable to cyberattacks, data breaches and other cybersecurity incidents. Such events could potentially lead to unauthorized access to, or disclosure of, sensitive information, disrupt our business operations, result in regulatory fines or litigation costs and negatively impact our reputation among customers and partners.
Such events could potentially lead to unauthorized access to, or disclosure of, sensitive information, disrupt our business operations, result in regulatory fines or litigation costs and negatively impact our reputation among customers and partners. We are in the process of evaluating our cybersecurity needs and developing appropriate measures to enhance our cybersecurity posture.
Our approach to cybersecurity is in the developmental stage, and we have not yet conducted comprehensive risk assessments, established an incident response plan or engaged with external cybersecurity consultants for assessments or services. Given our current stage of cybersecurity development, we have not experienced any significant cybersecurity incidents to date.
As a smaller reporting company, we currently do not have formalized cybersecurity measures, a dedicated cybersecurity team or specific protocols in place to manage cybersecurity risks. Our approach to cybersecurity is in the developmental stage, and we have not yet conducted comprehensive risk assessments, established an incident response plan or engaged with external cybersecurity consultants for assessments or services.
Item 1C. Cybersecurity We acknowledge the increasing importance of cybersecurity in today’s digital and interconnected world.
Item 1C. Cybersecurity We acknowledge the increasing importance of cybersecurity in today’s digital and interconnected world. Cybersecurity threats pose significant risks to the integrity of our systems and data, potentially impacting our business operations, financial condition and reputation.
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Cybersecurity threats pose significant risks to the integrity of our systems and data, potentially impacting our business operations, financial condition and reputation. 48 Table of Contents As a smaller reporting company, we currently do not have formalized cybersecurity measures, a dedicated cybersecurity team or specific protocols in place to manage cybersecurity risks.
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Given our current stage of cybersecurity development, we have not experienced any significant cybersecurity incidents to date. However, we recognize that the absence of a formalized cybersecurity framework may leave us vulnerable to cyberattacks, data breaches and other cybersecurity incidents.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Our principal executive offices are located at 980 N Federal Hwy #304, Boca Raton, FL 33432, and our telephone number is (561) 672-7068. Our website can be found at https://vseehealth.com/. Furthermore, iDoc has physical operations in Boston, Massachusetts and Houston, Texas. Such office locations for personnel are contracted via short-term leases. ​
Biggest changeItem 2. Properties Our principal executive offices are located at 980 N Federal Hwy #304, Boca Raton, FL 33432, and our telephone number is (561) 672-7068. Our website can be found at https://vseehealth.com/. Furthermore, iDoc has physical operations in Houston, Texas. Such office location for personnel is contracted via short-term leases.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeRegardless of outcome, litigation can have an adverse impact on us because of defense costs, diversion of management resources and other factors. Currently, there is no litigation pending against our company that could materially affect our company. 49 Table of Contents ​ Item 4. Mine Safety Disclosures Not applicable. ​ PART II
Biggest changeRegardless of outcome, litigation can have an adverse impact on us because of defense costs, diversion of management resources and other factors. Currently, there is no litigation pending against our company that could materially affect our company.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeFurther, if we incur any indebtedness, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith. ​ Information about our equity compensation plans in Item 11 of Part III of this report is incorporated herein by reference. ​ Recent Sales of Unregistered Securities There were no unregistered securities sold by the registrant in the period covered by this report that were not previously included in a quarterly report on Form 10-Q or current report on Form 8-K filed by the Company with the SEC. ​ Item 6.
Biggest changeRecent Sales of Unregistered Securities There were no unregistered securities sold by the registrant in the period covered by this report that were not previously included in a quarterly report on Form 10-Q or current report on Form 8-K filed by the Company with the SEC.
Item 5. Market For Registrant’s Common Equity, Related Stockholder Matters And Issuer Purchases Of Equity Securities Market and Dividends Our Common Stock and public warrants are currently listed on the Nasdaq Capital Market under the symbol “VSEE” and “VSEEW”, respectively. On August 25, 2025, the closing sale price of our Class A Common Stock was $0.83 per share.
Item 5. Market For Registrant’s Common Equity, Related Stockholder Matters And Issuer Purchases Of Equity Securities Market and Dividends Our Common Stock and public warrants are currently listed on the Nasdaq Capital Market under the symbol “VSEE” and “VSEEW”, respectively. On March 30, 2026, the closing sale price of our Class A Common Stock was $0.24 per share.
We have not paid any cash dividends on our Common Stock to date. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of a business combination.
The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of a business combination. The payment of any cash dividends in the future will be within the discretion of our Board of Directors at such time.
The number of record holders was determined from the records of our transfer agent and does not include beneficial owners of our shares of Common Stock whose shares are held in the names of various security brokers, dealers and registered clearing agencies. ​ Our Board of Directors has not adopted a formal dividend policy for a recurring fixed dividend payment to shareholders.
As of March 30, 2026 , there were approximately 47,299,421 holders of record of our Common Stock. The number of record holders was determined from the records of our transfer agent and does not include beneficial owners of our shares of Common Stock whose shares are held in the names of various security brokers, dealers and registered clearing agencies.
The payment of any cash dividends in the future will be within the discretion of our Board of Directors at such time. In addition, our Board of Directors is not currently contemplating and does not anticipate declaring any stock dividends in the foreseeable future.
In addition, our Board of Directors is not currently contemplating and does not anticipate declaring any stock dividends in the foreseeable future. Further, if we incur any indebtedness, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.
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As of August 25, 2025 , there were approximately 80 holders of record of our Common Stock.
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Our Board of Directors has not adopted a formal dividend policy for a recurring fixed dividend payment to shareholders. We have not paid any cash dividends on our Common Stock to date.
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Information about our equity compensation plans in Item 11 of Part III of this report is incorporated herein by reference.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeValuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. 59 Table of Contents Financial Statement Components Years ended December 31, 2024 and 2023 Results of Operations ​ The following table presents VSee Health’s results of operations for the years ended December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ ​ 2024 2023 Change % ​ Revenue ​ $ 10,421,352 ​ $ 5,765,889 ​ $ 4,655,463 ​ 81 % ​ Cost of revenues ​ ​ 3,243,772 ​ ​ 1,933,195 ​ ​ 1,310,577 ​ 68 % ​ Gross margin ​ ​ 7,177,580 ​ ​ 3,832,694 ​ ​ 3,344,886 ​ 87 % ​ Operating expenses ​ ​ 69,328,425 ​ ​ 5,706,283 ​ ​ 63,622,142 ​ 1,115 % ​ Other income (expense), net ​ ​ 2,805,929 ​ ​ (13,375) ​ ​ 2,819,304 ​ (21,079) % ​ Net loss before taxes ​ ​ (59,344,916) ​ ​ (1,886,964) ​ ​ (57,457,952) ​ 3,045 % ​ Income tax benefit (provision) ​ ​ 1,642,901 ​ ​ (1,838,490) ​ ​ 3,481,391 ​ (189) % ​ Net loss ​ $ (57,702,015) ​ $ (3,725,454) ​ $ (53,976,561) ​ (1,449) % ​ ​ Revenue Through our wholly-owned subsidiary VSee Lab, the Company generates revenue from subscription services to its software platform.
Biggest changeFinancial Statement Components Years Ended December 31, 2025, and 2024 Results of Operations The following table presents VSee Health’s results of operations for the years ended December 31, 2025 and 2024: For the year ended December 31, 2025 2024 Change % Revenue $ 14,618,184 $ 10,421,352 $ 4,196,832 40 % Cost of revenues 7,262,219 3,243,772 4,018,447 124 % Gross margin 7,355,965 7,177,580 178,385 2 % Operating expenses 16,938,858 69,328,425 (52,389,567 ) (76 )% Other income (expense) (5,061,531 ) 2,805,929 (7,867,460 ) (280 )% Net loss before taxes (14,644,424 ) (59,344,916 ) 44,700,492 75 % Income tax benefit (provision) (91,560 ) 1,642,901 (1,734,461 ) (106 )% Net loss $ (14,735,984 ) $ (57,702,015 ) $ 42,966,031 74 % 48 Table of Contents Revenue Through our wholly-owned subsidiary VSee Lab, the Company generates revenue from subscription services to its software platform.
If a standalone selling price is not directly observable, the Company estimates the standalone selling price using the expected cost plus a margin approach. 5) Recognize revenue when or as the Company satisfies a performance obligation Revenue is recognized when or as control of the promised goods or service is transferred to the customer in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services.
If a standalone selling price is not directly observable, the Company estimates the standalone selling price using the expected cost plus a margin approach. 5) Recognize revenue when or as the Company satisfies a performance obligation Revenue is recognized when or as control of the promised goods or service are transferred to the customer in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services.
The Company’s current cash on hand is insufficient to satisfy its operating cash needs for the 12 months following the filing of this Annual Report on Form 10-K. These conditions raise substantial doubt regarding the Company’s ability to continue as a going concern for a period of one year after the date the financial statements are issued.
The Company’s current cash on hand is insufficient to satisfy its operating cash needs for the 12 months following the filing of this Annual Report on Form 10-K. These conditions raise substantial doubt regarding the Company’s ability to continue as a going concern for a period of one year after the date the consolidated financial statements are issued.
The preparation of consolidated financial statements also requires we make estimates and assumptions that affect the reported amounts of assets, liabilities, equity, revenue, costs and expenses and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances.
The preparation of consolidated financial statements also requires we make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances.
Cash Used in Investing Activities Cash used for investing activities for the year ended December 31, 2024, was $26,144, driven primarily by $55,267 for the purchase fixed assets and was slightly offset by $29,123 of cash acquired from the acquisition of iDoc.
Cash used for investing activities for the year ended December 31, 2024, was $26,144, driven primarily by $55,267 for the purchase fixed assets and was slightly offset by $29,123 of cash acquired from the acquisition of iDoc.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF VSEE HEALTH The following discussion and analysis provide information that VSee Health’s management believes is relevant to an assessment and understanding of the results of operations and financial performance of VSee Health, Inc.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis provide information that VSee Health’s management believes is relevant to an assessment and understanding of the results of operations and financial of VSee Health, Inc.
The Company provides administrative support for the tele-physician services and coordinates the services of its clinicians’ network through administrative support, hardware support, and software support and provider coverage availability. The Company provides coverage availability of its physician services ranging from 12 to 24 hours per day.
The Company provides administrative support for the tele-physician services and coordinates the services of its clinicians’ network through administrative support, hardware support, and software support and provider coverage availability. The Company provides coverage availability of its physician services ranging from 12-24 hours per day.
The contracts typically contain cancellation clauses with advance notice, and revenue for goods and services transferred prior to cancellation is not refundable or creditable. 2) Identify the performance obligations in the contract Performance obligations promised in a contract are identified based on the goods and services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available, and are distinct in the context of the contract, whereby the transfer of the services is separately identifiable from other promises in the contract. 54 Table of Contents 3) Determine the transaction price Total transaction price is based on the amount to which the Company is entitled to base on the contracts with its customers.
The contracts typically contain cancellation clauses with advance notice, and revenue for goods and services transferred prior to cancellation is not refundable or creditable. 2) Identify the performance obligations in the contract Performance obligations promised in a contract are identified based on the goods and services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available, and are distinct in the context of the contract, whereby the transfer of the services is separately identifiable from other promises in the contract. 3) Determine the transaction price Total transaction price is based on the amount to which the Company is entitled to base on the contracts with its customers.
In addition to the specialization of neuro critical care, iDoc provides general tele-critical care services, and specialty e-consults to large organizations such as 51 Table of Contents correctional facilities. iDoc has an experienced team of board-certified intensivists, neurointensivists, neurologists, and advanced practice providers that treat and coordinate care for acutely ill patients 24/7 in the Neurointensive Care Unit (“NICU”) and Intensive Care Unit (“ICU”) for stroke, brain trauma, spinal cord, and all other neurological conditions.
In addition to the specialization of neuro critical care, iDoc provides general tele-critical care services, and specialty e-consults to large organizations such as correctional facilities. iDoc has an experienced team of board-certified intensivists, neurointensivists, neurologists, and advanced practice providers that treat and coordinate care for acutely ill patients 24/7 in the Neurointensive Care Unit (“NICU”) and Intensive Care Unit (“ICU”) for stroke, brain trauma, spinal cord, and all other neurological conditions.
Contracts are generally cancellable with a 30-day notice period, and customers are billed in annual, quarterly, or monthly installments in advance of the service period of the subscription. The Company is not required to refund any prorated prepayment fees invoiced to cover services that were provided.
Contracts are generally cancellable with a 30-day notice period, and customers are billed in annual, quarterly, or monthly instalments in advance of the service period of the subscription. The Company is not required to refund any prorated prepayment fees invoiced to cover services that were provided.
See Note 16 Fair Value Measurements of the financial statements for additional information on assets and liabilities measured at fair value. Goodwill Goodwill represents the excess of purchase price in a business combination over the fair value of the net identifiable assets acquired.
See Note 15 Fair Value Measurements of the financial statements for additional information on assets and liabilities measured at fair value. Goodwill Goodwill represents the excess of purchase price in a business combination over the fair value of the net identifiable assets acquired.
In addition to standard interventions, our Neurocritical care experts will offer specific care including monitoring intracranial pressure, cerebral hemodynamics, advanced multimodal neuro monitoring (brain oximetry, cerebral microdialysis and continuous electroencephalography). We strive to be the solutions provider of access to the shortage of intensivists across the care continuum utilizing sophisticated telehealth solutions to bridge the care gap.
In addition to standard interventions, our Neurocritical care experts will offer specific care including monitoring intracranial pressure, cerebral hemodynamics, advanced multimodal neuro monitoring (brain oximetry, cerebral microdialysis and continuous electroencephalography). 41 Table of Contents We strive to be the solutions provider of access to the shortage of intensivists across the care continuum utilizing sophisticated telehealth solutions to bridge the care gap.
Operating Expenses VSee Lab’s operating expenses include all operating costs not included in the cost of revenues. These costs consist of general and administrative expenses composed primarily of all payroll and payroll-related expenses, professional fees, and other costs related to the administration of its business. iDoc’s operating expenses include all operating costs not included in cost of revenues.
These costs consist of general and administrative expenses composed primarily of all payroll and payroll-related expenses, professional fees, and other costs related to the administration of its business. iDoc’s operating expenses include all operating costs not included in cost of revenues.
The subscription to each module is treated as a series of distinct performance obligations because it is distinct and substantially the same, satisfied over time, and has the same measure of progress. 55 Table of Contents The transaction price is determined based on the consideration the Company expects to be entitled to in exchange for transferring services to the customer.
The subscription to each module is treated as a series of distinct performance obligations because it is distinct and substantially the same, satisfied over time, and has the same measure of progress. The transaction price is determined based on the consideration the Company expects to be entitled to in exchange for transferring services to the customer.
We also serves a diverse range of customers from large hospital systems to small/micro hospitals, to long-term acute care (LTAC) facilities to the federal prison system and others.
We also serve a diverse range of customers from large hospital systems to small/micro hospitals, to long-term acute care (LTAC) facilities to the federal prison system and others.
The Company monitors its revenue and receivables from third-party payors and records an estimated contractual allowance to properly account for the differences between billed and collected amounts. Revenue from third-party payors is presented net of an estimated provision for contractual adjustments. Patient revenues are net of service credits and service adjustments, and expected credit losses.
The Company monitors its revenue and receivables from third-party payors and records an estimated contractual allowance to properly account for the differences between billed and collected amounts. 45 Table of Contents Revenue from third-party payors is presented net of an estimated provision for contractual adjustments. Patient revenues are net of service credits and service adjustments, and expected credit losses .
The preparation of our consolidated financial statements in conformity with GAAP requires us to make estimates and judgments that affect the amounts reported in those consolidated financial statements and accompanying notes.
The preparation of our consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and judgments that affect the amounts reported in those consolidated financial statements and accompanying notes.
Actual results could differ significantly from the estimates made by our management. To the extent that there are differences between our estimates and actual results, our 53 Table of Contents future financial statement presentation, balance sheet, results of operations and cash flows will be affected.
Actual results could differ significantly from the estimates made by our management. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, balance sheet, results of operations and cash flows will be affected.
Although we believe that the estimates we use are reasonable, due to the inherent uncertainty involved in making those estimates, actual results reported in future periods could differ from those estimates. Our significant accounting policies are described in Note 3 to our consolidated financial statements for the year ended December 31, 2024 included elsewhere in this report.
Although we believe that the estimates we use are reasonable, due to the inherent uncertainty involved in making those estimates, actual results reported in future periods could differ from those estimates. Our significant accounting policies are described in Note 2 to our Consolidated Financial Statements for the year ended December 31, 2025, included elsewhere in this report.
(“VSee Health” and for purposes of this section only, referred to as the “Company”, “we,” “us” and “our”). The discussion and analysis should be read together with VSee Health’s consolidated financial statements as of and for the year ended December 31, 2024 and 2023, and the related respective notes thereto.
(“VSee Health” and for purposes of this section only, referred to as the “Company”, “we,” “us” and “our”). The discussion and analysis should be read together with VSee Health’s consolidated financial statements as of and for the years ended December 31, 2025 and 2024, and the related respective notes thereto.
The determination of the amount of revenue the Company can recognize each accounting period requires management to make estimates and judgments on the estimated expected customer life or expected performance period. 57 Table of Contents The Company commences revenue recognition when the Company satisfies its performance obligation to provide the contractual tele-physician hours services.
The determination of the amount of revenue the Company can recognize each accounting period requires management to make estimates and judgments on the estimated expected customer life or expected performance period. The Company commences revenue recognition when the Company satisfies its performance obligation to provide the contractual tele-physician hours services monthly.
We evaluate goodwill for impairment at the reporting unit level by assessing whether it is more likely than 58 Table of Contents not that the fair value of a reporting unit exceeds its carrying value.
We evaluate goodwill for impairment at the reporting unit level by assessing whether it is more likely than not that the fair value of a reporting unit exceeds its carrying value.
The change in operating activities presents changes for VSee Lab for the year ended December 31, 2024, and changes for iDoc and DHAC from the Business Combination date of June 24, 2024, to the end of the year, December 31, 2024.
The change in operating activities presents changes for VSee Lab for the year ending December 31, 2024, and changes for iDoc and DHAC from the Business Combination date of June 24, 2024, to the end of the quarter, December 31, 2024.
We believe our ability to invest in new technology and develop new features, modules, and solutions will be critical to our long-term success. Critical Accounting Estimates We prepare our consolidated financial statements in accordance with GAAP.
We believe our ability to invest in new technology and develop new features, modules, and solutions will be critical to our long-term success. Significant Accounting Policies and Critical Accounting Estimates We prepare our consolidated financial statements in accordance with U.S. GAAP.
VSee Health’s future capital requirements will depend on many factors, including our growth rate, contract renewal activity, number of subscription renewals, the continuing market acceptance of telehealth, and debt funding. Cash Used in Operating Activities Cash used in operating activities was $5,789,542 for the year ended December 31, 2024.
The Company’s future capital requirements will depend on many factors, including our growth rate, contract renewal activity, number of subscription renewals, the continuing market acceptance of telehealth, and debt funding. Cash Used in Operating Activities Cash used in operating activities was $3,445,733 for the year ended December 31, 2025.
The Company may take advantage of certain of the scaled disclosures available to smaller reporting companies. 52 Table of Contents Performance Factors We believe that our future performance will depend on many factors, including the following: The Rapid Transformation of the Telehealth Market The Telehealth market today is one characterized by rapid transformation, with major customers and hospital systems looking to build or add capabilities and major legacy competitors looking to shore up historical limitations.
Performance Factors We believe that our future performance will depend on many factors, including the following: The Rapid Transformation of the Telehealth Market The Telehealth market today is one characterized by rapid transformation, with major customers and hospital systems looking to build or add capabilities and major legacy competitors looking to shore up historical limitations.
Innovation and New Product Offerings Despite the rapid advancements in technology, growth in virtual healthcare delivery, and improvement in decision support algorithms and machine learning tools, Telehealth Technology Solutions have not fully penetrated medicine and hospital systems to become the standard methodology of care and represent less than 1% of total healthcare spending according to Grandview Research.
We plan to leverage our industry relationships with government, hospital systems and insurance providers to increase our customer base. 42 Table of Contents Innovation and New Product Offerings Despite the rapid advancements in technology, growth in virtual healthcare delivery, and improvement in decision support algorithms and machine learning tools, Telehealth Technology Solutions have not fully penetrated medicine and hospital systems to become the standard methodology of care and represent less than 1% of total healthcare spending according to Grandview Research.
Cash Provided by Financing Activities Cash provided by financing activities for the year ended December 31, 2024, was $6,023,067, primarily consisting of $2,700,000 proceeds from the Quantum Note, $2,000,000 proceeds from the December 2024 Convertible Note, $1,323,362 from the recapitalization with DHAC, and offset by $335,750, $180,397, $47,800, $38,200 and $52,680 for repayment on the Extension Note, factoring payable, advances from a related party, note payable, and Additional Bridge Financing, respectively. ​ Cash provided by financing activities for the year ended December 31, 2023, was $525,000 and consisted of $200,000, $190,000, and $135,000 proceeds from note payable, related party loan payable, and share repurchase liability , respectively .
Cash provided by financing activities for the year ended December 31, 2024, was $6,023,067, primarily consisting of $2,700,000 proceeds from the Quantum Note, $2,000,000 proceeds from the September 2024 Convertible Note, $1,323,362 cash from the recapitalization with DHAC, $760,000 proceeds from ELOC and offset by $47,800, $335,750, $61,429, $52,680, $38,889, $38,200, $180,397 and $5,150 for repayment on advances from a related party, Extension Note, exchange note, additional bridge financing, September 2024 Convertible Note, note payable, factoring payable and acquisition purchase, respectively.
As a result of these factors, management has concluded that there is substantial doubt about the Company’s ability to continue as a going concern for a period of one year after the date of the financial statements. The Company’s consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
As a result of these factors, management has concluded that there is substantial doubt about the Company’s ability to continue as a going concern for a period of one year after the date of the financial statements.
The net changes in operating assets and liabilities were primarily driven by increases in accounts payable and accrued liabilities and due to related party, partially offset by the increase in accounts receivable and the decrease in deferred revenue.
The decrease in net changes in operating assets was primarily driven by the decreases in accounts payable and accrued liabilities and due to related parties and slightly offset by the reduction in accounts receivable and the increase in deferred revenue.
Impairment of Long-lived and Intangible Assets Other than Goodwill In accordance with ASC 360-10, the Company, on a regular basis, reviews the carrying amount of long-lived assets, including fixed assets, right-of-use assets and intangible assets, for the existence of facts or circumstances, both internally and externally, that suggest impairment.
Based on the estimated fair value of the reporting unit, which exceeded its carrying amount, the Company concluded that no goodwill impairment was required for the year. 47 Table of Contents Impairment of Long-lived and Intangible Assets Other than Goodwill In accordance with ASC 360-10, the Company, on a regular basis, reviews the carrying amount of long-lived assets, including fixed assets, right-of-use assets and intangible assets, for the existence of facts or circumstances, both internally and externally, that suggest impairment.
The Company earns primarily from reimbursement from the following third-party payors: Medicare The Company’s affiliated provider network is reimbursed by the Medicare Part B and Part C programs for certain of the telemedicine services it provides to Medicare beneficiaries.
The revenue is determined based on the telemedicine billing code(s) associated with the respective professional service rendered to patients. The Company earns primarily from reimbursement from the following third-party payors: Medicare The Company’s affiliated provider network is reimbursed by the Medicare Part B and Part C programs for certain of the telemedicine services it provides to Medicare beneficiaries.
In assessing the Company’s ability to continue as a going concern, the Company monitors and analyzes its cash and its ability to generate sufficient cash flow in the future to support its operating and capital expenditure commitments. At December 31, 2024, the Company had cash of $326,115 and working capital deficit of $15,989,353.
In assessing the Company’s ability to continue as a going concern, the Company monitors and analyses its cash and its ability to generate sufficient cash flow in the future to support its operating and capital expenditure commitments. At December 31, 2025, the Company had cash of $5,266,286 and working capital deficit of $7,879,201.
As the start-up service primarily covers initial administrative services for which the Company’s clients can cancel future services upon completion, management considers it to be separable from the ongoing business services, and the Company records start-up fees as revenue when the start-up service is completed over time, using the input method to measure progress each financial period.
As the start-up service primarily covers initial administrative services for which the Company’s clients can cancel future services upon completion, management considers it to be separable from the ongoing business services, and the Company records start-up fees as revenue when the start-up service is completed over time, using the input method to measure progress each financial period. 46 Table of Contents Institutional Fees Service Contracts and Performance Obligation Contract For Electroencephalogram (“EEG”) Professional Interpretation Services Performance obligations in the contract for EEG professional interpretation services are based on the number of professional services EEG interpretation provides monthly.
As a result, the Company recorded non-cash goodwill impairment charges of $56,675,210 on the consolidated statement of operations for the year ended December 31, 2024.
As a result, the Company recorded non-cash goodwill impairment charges of $56,675,210 on the consolidated statement of operations for the year ended December 31, 2024. For the year ended December 31, 2025, the Company conducted a qualitative assessment of goodwill impairment, considering macroeconomic conditions, industry trends, Company performance, and the prior-year impairment.
ASC 606 establishes a principle for recognizing revenue upon the transfer of promised goods or services to customers in an amount that reflects the expected consideration received in exchange for those goods or services.
Our critical accounting policies are described below. Revenue Recognition The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). ASC 606 establishes a principle for recognizing revenue upon the transfer of promised goods or services to customers in an amount that reflects the expected consideration received in exchange for those goods or services.
Subscription Service Contracts and Performance Obligation Subscriptions Services Subscriptions represent a series of distinct goods or services because the performance obligations are satisfied over time as customers simultaneously receive and consume the benefits related to the services the Company performs.
The Company derives revenue from business services associated with direct tele-physician provider patient fee services, telehealth services, subscription services and institutional services provided to our clients. 44 Table of Contents Subscription Service Contracts and Performance Obligation Subscriptions Services Subscriptions represent a series of distinct goods or services because the performance obligations are satisfied over time as customers simultaneously receive and consume the benefits related to the services the Company performs.
Cash used in operating activities consists of a net loss of $57,702,015, adjusted for non-cash items of $(55,119,167), driven primarily by goodwill impairment charges of $56,675,210, loss on initial fair value loss on the Quantum Note of $2,513,234, and $645,979 loss on extinguishment of debt, offset by $6,176,097 in fair value changes, and a $3,206,694 decrease in net changes in operating assets and liabilities.
Cash used in operating activities consists of a net loss of $57,702,015 adjusted for non-cash items of $55,119,167 driven primarily by fair value changes, and a $3,206,694 decrease in net changes in operating assets and liabilities.
Cash used for investing activities for the year ended December 31, 2023 was $4,335 and was used to purchase fixed assets.
Cash Used in Investing Activities Cash used for investing activities for the year ended December 31, 2025, was $29,928, and was driven by the purchase of fixed assets.
These factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements.
For the year ended December 31, 2024, the Company had a loss from operations of $9,582,893. The Company’s operations have been funded principally through the issuance of debt and equity. These factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements.
The Company determines revenue recognition in accordance with ASC 606 through the following five steps: 1) Identify the contract with a customer The Company considers the terms and conditions of its contracts and the Company’s customary business practices in identifying its contracts under ASC 606.
The core principle of ASC 606 is to recognize revenue to depict the transfer of promised goods or services to clients in an amount that reflects the consideration the entity expects to be entitled in exchange for those goods or services. 43 Table of Contents The Company determines revenue recognition in accordance with ASC 606 through the following five steps: 1) Identify the contract with a customer The Company considers the terms and conditions of its contracts and the Company’s customary business practices in identifying its contracts under ASC 606.
Overview Prior to June 24, 2024, we were a blank check company incorporated in the State of Delaware organized for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses.
Actual results could differ materially from those anticipated in these forward-looking statements due to, among other considerations, the matters discussed under “Risk Factors” in this Annual Report and the section herein entitled “Cautionary Note on Forward-Looking Statements.” Overview Prior to June 24, 2024, we were a blank check company incorporated in the State of Delaware organized for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses.
Cash Flows The following table presents selected captions from VSee Health’s consolidated statements of cash flows for the years ended December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended December 31, ​ 2024 2023 Net cash used in operating activities ​ $ (5,789,542) ​ $ (632,595) Net cash used in investing activities ​ ​ (26,144) ​ ​ (4,335) Net cash provided by financing activities ​ ​ 6,023,067 ​ ​ 525,000 Change in cash ​ $ 207,381 ​ $ (111,930) ​ VSee Health’s principal sources of liquidity are cash totaling $326,115 and $118,734 as of December 31, 2024 and 2023, respectively.
The Company’s consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. 50 Table of Contents Cash Flows The following table presents selected captions from the Company’s consolidated statements of cash flows for the years ended December 31, 2025 and 2024: For the year ended December 31, 2025 2024 Net cash used in operating activities $ (3,445,733 ) $ (5,789,542 ) Net cash used in from investing activities $ (29,928 ) $ (26,144 ) Net cash provided by financing activities $ 8,415,832 $ 6,023,067 Change in cash $ 4,940,171 $ 207,381 The Company’s principal sources of liquidity are cash and cash equivalents, totalling $5,266,286 and $326,115 as of December 31, 2025 and 2024, respectively.
The patient benefits from the professional services when care is rendered by the Company’s medical professionals. The Company commences revenue recognition on patient services when the Company satisfies its performance obligation to provide professional medical services to patients. Patient Fee Contracts Involving Third-Party Payors The Company receives payments from patients, third-party payors and others for patient fee services.
The patient benefits from the professional services when care is rendered by the Company’s medical professionals. The Company commences revenue recognition on patient services when the Company satisfies its performance obligation to provide professional medical services to patients. The Company acts as the principal in these arrangements because it controls the medical services before they are transferred to the patient.
Revenue was $10,421,352 for the year ended December 31, 2024, compared to $5,765,889 for the year ended December 31, 2023, an increase of $4,655,463, or 81%. The increase was driven by $2,217,733, or 49% of revenue from the acquisition of iDoc during the 2nd quarter, primarily from $1,207,343 and $1,003,510 of patient and telehealth fees, respectively.
Revenue for the year ended December 31, 2025, was $14,618,184, an increase of $4,196,832, or 40%, compared to $10,421,352 for the year ended December 31, 2024. The increase was primarily driven by continued growth from the Company’s iDoc acquisition, completed in June 2024, which contributed $5,084,931, representing an increase of 229% over the prior-year.
We perform our goodwill impairment assessment whenever events or changes in facts or circumstances indicate that impairment may exist and during the fourth quarter each year. The cash flow estimates and discount rates incorporate management’s best estimates, using appropriate and customary assumptions and projections at the date of evaluation.
This process is designed to ensure that goodwill is stated at no more than its implied fair value at all reporting dates. .The cash flow estimates, and discount rates incorporate management’s best estimates, using appropriate and customary assumptions and projections at the date of evaluation.
Removed
Actual results could differ materially from those anticipated in these forward-looking statements due to, among other considerations, the matters discussed under “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements.” 50 Table of Contents This “Management’s Discussion and Analysis of Financial Condition and Results of Operations” has been impacted by the restatement described in the Explanatory Note to this Annual Report and in Note 2 to our consolidated financial statements entitled “Restatement of Previously Issued Financial Statements.” Certain of the financial and other information provided in this“Management’s Discussion and Analysis of Financial Condition and Results of Operations” has been amended to give effect to such restatement adjustments.
Added
The Company may take advantage of certain of the scaled disclosures available to smaller reporting companies.
Removed
We plan to leverage our industry relationships with government, hospital systems and insurance providers to increase our customer base.
Added
This control is evidenced by the Company’s primary responsibility for fulfilling the service and its direct authority over the affiliated physicians, including the right to direct their clinical activities and administrative protocols. Patient Fee Contracts Involving Third-Party Payors The Company receives payments from patients, third-party payors and others for patient fee services.
Removed
Our critical accounting policies and estimates are described below. Revenue Recognition The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”).
Added
The Company performs goodwill impairment test annually as of year-end at the reporting unit level in accordance with ASC 350 to assess whether the carrying amount of goodwill exceeds its fair value.
Removed
The core principle of ASC 606 is to recognize revenue to depict the transfer of promised goods or services to clients in an amount that reflects the consideration the entity expects to be entitled in exchange for those goods or services.
Added
Additionally, the Company monitors for triggering events on an ongoing basis and performs interim impairment testing when events or changes in circumstances indicate that it is more likely than not (i.e., greater than 50 percent likelihood) that the fair value of a reporting unit is below its carrying amount.
Removed
The Company derives revenue from business services associated with direct tele-physician provider patient fee services, telehealth services, subscription services and institutional services provided to our clients.
Added
These factors indicated potential impairment triggers, leading the Company to perform a quantitative Step 1 impairment test.
Removed
The revenue is determined based on the telemedicine 56 Table of Contents billing code(s) associated with the respective professional service rendered to patients.
Added
Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.
Removed
Institutional Fees Service Contracts and Performance Obligation Contract for Electroencephalogram (“EEG”) Professional Interpretation Services Performance obligations in the contract for EEG professional interpretation services are based on the number of professional services EEG interpretation the Company provides.
Added
This growth was fuelled by higher telehealth service volume and patient fees of $2,919,118 and $2,170,193, respectively. Professional services and other fees increased $934,381, or 44%, reflecting higher medical device sales and services rendered in connection with the Company’s HHS contract.
Removed
The increase was also driven by higher technical and engineering fees, and professional and other fees. Technical and engineering fees increased by $1,322,218, or 201%, due to a higher volume of engineering, customizations, and integration services provided to a recently signed significant client and existing customers.
Added
These increases were partially offset by a $884,887, or 22%, decline in subscription revenue attributable to a reduction in recurring enterprise-level subscriptions, and a $937,593, or 47%, decrease in technical engineering services revenue, reflecting lower client utilization during the current year.
Removed
Professional and other fees increased by $1,045,193, or 98% due to higher project management services on new and existing projects, higher patient visits and higher hardware purchases from new customers. Subscription revenue also increased modestly by $70,319, or 2%, due to the higher subscription levels in 4 th quarter offsetting the September year to date trend.
Added
Cost of revenues for the year ended December 31, 2025, was $7,262,219, representing an increase of $4,018,447, or 124%, as compared to $3,243,772 for the year ended December 31, 2024.
Removed
Cost of revenues for year ended December 31, 2024, increased $1,310,577, or 68%, over the same period last year. The increase was primarily driven by the acquisition of iDoc at the close of business on June 24, 2024, driving an increase of $933,055, or 75%, of total cost of revenues, primarily from compensation expenses, and higher cost for VSee Lab.
Added
The increase was primarily attributable to growth within the Company’s iDoc business unit, driven by a $1,883,533 increase in medical independent contractor costs reflecting higher telehealth service delivery volume, and a $476,189, or 48%, increase in salaries and wages supporting iDoc’s expanded operations.
Removed
VSee Lab’s cost increase was primarily driven by higher hardware and shipping costs of $327,513, or a 459% increase compared to the same period last year, from increased hardware sales and $200,539, or a 26% increase compared to the same period last year, of higher compensation costs from higher resources reallocation to support a new client in the second half of the year, and slightly offset by cost savings from headcount reduction during the first half of the year.
Added
Within the VSee Lab business unit, the increase was further driven by higher overseas payroll of $637,603, increased medical equipment and device costs of $387,449 associated with the Company’s HHS contract and $216,400 in physician labor costs incurred for the first time during the current year. 49 Table of Contents Operating Expenses VSee Lab’s operating expenses include all operating costs not included in the cost of revenues.
Removed
The increase was slightly offset by lower hosting costs of $128,490, or a 16% decrease compared to the same period last year, from using a lower- 60 Table of Contents cost provider and implementing scheduled server scaling, reducing service costs and a $91,661, or a 33% decrease compared to the same period last year, reduction in software costs from lower client utilization.
Added
Operating expenses for the year ended December 31, 2025, were $16,938,858, a decrease of $52,389,567 or 76% as compared to $69,328,425 for the year ended December 31, 2024. The decline was due to the absence of goodwill impairment charges during 2025, resulting in a reduction of $56,675,210 or 100%, compared to the prior year.
Removed
Operating expenses for the year ended December 31, 2024, increased by $63,622,142 or 1,115%, over the same period last year.
Added
The decrease was also due to the absence of transaction expenses during 2025, resulting in a reduction of $792,796 or 100%, compared to the prior year.
Removed
The increase was driven by goodwill impairment charges of $56,675,210, higher general and administrative expenses of $5,351,505, or a 445% increase compared to the same period last year, resulting from $759,782 of higher bad debt expenses primarily from the acquisition of iDoc, $2,140,736, or 355% increase in professional fees primarily from the recapitalization and acquisition of DHAC and iDoc, amortization expense of $1,105,000 from the acquisition of iDoc and $688,811, or 122% increase in other general and administrative expenses primarily from the business combination driving increases in lease and rental charges of $123,839, depreciation expense of $217,790 and insurance expense of $130,901.
Added
These decreases were offset by higher general and administrative expenses of $3,483,314, an increase of 53%, primarily from an increase in amortization expense of $1,105,000 reflecting a full year of iDoc intangible asset amortization, a $952,680 increase in audit fees, and a $556,673 increase in bad debt expense, partially offset by decreases in accounting, legal, and printing costs.
Removed
The increase in operating expenses was also driven by $705,997, or 813% of higher transaction expenses from the recapitalization and acquisition of DHAC and iDoc, respectively, primarily for professional and advisory services fees and $889,430 of higher compensation-related expenses primarily from the acquisition of iDoc. ​ Other Income (Expense), net Other income during the year ended December 31, 2024, increased $2,819,304, or 21,079% compared to the same period last year.
Added
The decline in operating expenses was also offset by $1,595,125 or 30% higher compensation-related expenses, driven by $1,825,684 in newly incurred research and development labor costs, a $1,291,454 increase in salaries and bonus expenses, and $364,493 of higher payroll and benefit related expenses, partially offset by a $1,886,505 decrease in G&A payroll reflecting the reallocation of certain labor costs to research and development functions.
Removed
The increase was primarily driven by the gain on change in fair value of on the debt and derivative financial instruments of $6,176,097, offset by the $2,513,234 initial fair value loss on the Quantum Note, loss on extinguishment of $645,979 related to note conversions and shares issued to vendors, $107,862 gain on forgiveness of debt in the prior year, and $90,200 change in the far value on embedded derivative.
Added
Other Income (Expense), net Other income during the year ended December 31, 2025, decreased $7,867,460 or 280% as compared to the prior year.
Removed
Net Loss Net loss for the year ended December 31, 2024, compared to the year ended December 31, 2023, increased by $53,976,561 or 1,449%.
Added
The decrease was primarily driven by the loss on change in fair value of the debt and derivative financial instruments of $7,626,368, and an increase in the interest expense of $2,600,402, primarily due to the conversion of the total interest due on the Quantum note, new loan agreements entered into in the current year, and default interest incurred during the current year.

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