Digital Health Acquisition (DHAC) - 2024 Q2 - Quarterly Report

PART I — FINANCIAL INFORMATION Item 1. Financial Statements This section presents VSee Health, Inc.'s unaudited condensed consolidated financial statements for periods ended June 30, 2024, and December 31, 2023, including balance sheets, statements of operations, stockholders' equity, and cash flows, along with detailed notes on organization, accounting policies, and the iDoc business combination Condensed Consolidated Balance Sheets The condensed consolidated balance sheets show a significant increase in total assets and liabilities from December 31, 2023, to June 30, 2024, primarily due to the iDoc acquisition and related financing activities, with stockholders' equity also seeing a substantial increase Total Assets, Liabilities, and Equity | Metric | June 30, 2024 (Unaudited) | December 31, 2023 | |:---|:---|:---|\n| Total Assets | $78,987,750 | $830,791 |\n| Total Liabilities | $24,177,194 | $4,243,438 |\n| Total Stockholders' Equity (Deficit) | $54,810,556 | $(3,412,647) | - Cash increased significantly from $118,734 at December 31, 2023, to $1,105,971 at June 30, 2024[15] - Goodwill of $59,900,694 and Intangible assets of $12,100,000 were recorded as of June 30, 2024, which were not present at December 31, 2023, indicating a major business combination[15] Condensed Consolidated Statements of Operations The condensed consolidated statements of operations show increased revenue for both the three and six months ended June 30, 2024, compared to the prior year, but also higher operating expenses and other expenses, leading to a net loss Key Operating and Loss Metrics | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | |:---|:---|:---|:---|:---|\n| Total Revenue | $1,711,566 | $1,290,223 | $3,207,561 | $2,886,491 |\n| Gross Margin | $1,224,926 | $815,936 | $2,334,668 | $1,836,882 |\n| Total Operating Expenses | $2,408,268 | $1,427,063 | $3,479,531 | $3,085,154 |\n| Net Operating Loss | $(1,183,342) | $(611,127) | $(1,144,863) | $(1,248,272) |\n| Net Loss | $(361,961) | $(428,581) | $(332,792) | $(884,600) |\n| Basic and Diluted Loss Per Common Share | $(0.06) | $(0.09) | $(0.07) | $(0.19) | - Total revenue increased by 33% for the three months ended June 30, 2024, and by 11% for the six months ended June 30, 2024, compared to the respective prior periods[16] - Net loss decreased for both periods, from $(428,581) to $(361,961) for the three months and from $(884,600) to $(332,792) for the six months, primarily due to a significant benefit from income tax in 2024[16] Condensed Consolidated Statements of Stockholders' Equity (Deficit) The statements of stockholders' equity (deficit) reflect a substantial increase in total equity from a deficit of $(3,412,647) at December 31, 2023, to $54,810,556 at June 30, 2024, driven by the business combination and related share issuances Stockholders' Equity and Share Data | Metric | December 31, 2023 | June 30, 2024 | |:---|:---|:---|\n| Total Stockholders' Equity (Deficit) | $(3,412,647) | $54,810,556 |\n| Common Shares Outstanding | 4,639,643 | 14,806,820 |\n| Additional Paid-In Capital | $6,027,153 | $64,582,130 |\n| Accumulated Deficit | $(9,114,985) | $(9,773,056) | - The increase in equity is largely due to shares issued as consideration for the iDoc acquisition and conversion of debt, including 4,950,000 shares to iDoc shareholders and 592,500 shares for iDoc debt conversion[18] Condensed Consolidated Statements of Cash Flows The condensed consolidated statements of cash flows show a significant net increase in cash and cash equivalents for the six months ended June 30, 2024, primarily due to cash provided by financing activities, despite cash used in operating and investing activities Cash Flow Summary | Metric | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | |:---|:---|:---|\n| Net Cash Used in Operating Activities | $(2,594,214) | $(474,643) |\n| Net Cash Used in Investing Activities | $(16,390) | $(2,690) |\n| Net Cash Provided by Financing Activities | $3,597,841 | $320,000 |\n| Net Change in Cash and Cash Equivalents | $987,237 | $(157,333) |\n| Cash and Cash Equivalents, End of Period | $1,105,971 | $73,331 | - Financing activities provided $3,597,841 in cash for the six months ended June 30, 2024, including proceeds from the Quantum Convertible Note ($2,700,000) and reverse recapitalization with DHAC ($1,323,362)[21] Notes to Condensed Consolidated Financial Statements These notes provide detailed explanations of the accounting policies, business combinations, financial instruments, and other significant events impacting VSee Health's financial position and performance, including the reverse recapitalization with DHAC, the acquisition of iDoc, and the accounting for various debt and equity instruments - The condensed consolidated financial statements are prepared in accordance with U.S. GAAP and include VSee Health, Inc. and its 100% wholly-owned subsidiaries, VSee Lab, Inc. and iDoc Virtual Telehealth Solutions, Inc., along with Encompass Healthcare Billing, LLC and This American Doc, Inc. (TAD)[35][36] - The Company is an 'emerging growth company' and 'smaller reporting company,' allowing it to take advantage of certain exemptions from reporting requirements and extended transition periods for new accounting standards[38][39][40] - The Company has two consolidated operating segments: Healthcare Technology ('Technology') and Telehealth Services ('Telehealth'), with VSee Lab in Technology and iDoc in Telehealth[42] Note 1 Organization and Description of Business VSee Health, Inc. (formerly Digital Health Acquisition Corp. or DHAC) is a telehealth software platform solution that completed a business combination on June 24, 2024, involving DHAC, VSee Lab, Inc., and iDoc Virtual Telehealth Solutions, Inc., accounted for as a reverse recapitalization with VSee Lab as the accounting acquirer - VSee Health, Inc. operates a highly scalable, integrated, API-driven technology platform for virtual healthcare delivery, offering end-to-end encrypted video streaming and integration with medical device data and EMRs[22] - The Business Combination on June 24, 2024, resulted in DHAC changing its name to VSee Health, Inc., and was accounted for as a reverse recapitalization with VSee Lab as the accounting acquirer[23][31] - Immediately following the Closing, approximately 14,692,820 shares of Common Stock were outstanding, including shares issued to DHAC founders, DHAC stockholders, VSee Lab stockholders, iDoc stockholders, and certain lenders[29] Note 2 Summary of Significant Accounting Policies This note outlines the key accounting policies, including the basis of presentation, consolidation, emerging growth company status, segment reporting, use of estimates, income taxes, revenue recognition, and fair value measurements, highlighting the company's adoption of U.S. GAAP and specific ASC topics [Basis of Presentation and Consolidation](index