Digital Health Acquisition (DHAC) - 2024 Q3 - Quarterly Results

Executive Summary & Highlights VSee Health reported strong Q3 and 9M 2024 revenue growth from acquisitions and expanded services, with management highlighting post-merger integration Business & Financial Highlights VSee Health reported significant revenue growth in Q3 and the first nine months of 2024, driven by strategic acquisitions and expanded service offerings. The company also announced several key partnerships and new product launches aimed at enhancing patient care and expanding market reach Business & Financial Highlights | Metric | Q3 2024 (USD) | Q3 2023 (USD) | Change (%) | 9M 2024 (USD) | 9M 2023 (USD) | Change (%) | | :---------------------- | :------------ | :------------ | :--------- | :------------ | :------------ | :--------- | | Revenue | $3.4 million | $1.5 million | 131% | $6.6 million | $4.3 million | 51% | - Contracted with Seven Corners Correctional Health to provide specialty care to inmates in 24 federal prisons[4] - Expanded telehealth and billing services to major healthcare clients, including nonprofit, hospital, and Fortune 20 corporate clients, through a partnership with SkywardRx[4] - Partnered with Ava Robotics to develop a VSee Health-powered robot for remote personalized care in hospital ICUs[4] - Launched Aimee, a virtual healthcare, labs, and prescription drug service providing low-cost access to quality healthcare for insured and uninsured patients[4] - Introduced a sea ambulance telehealth initiative using Starlink satellite technology for US veterans and remote residents[4] - Launched a GLP-1 telehealth program to address obesity and chronic diseases, integrating medication, personalized care, and behavioral interventions[4] - Partnered with BabyLiveAdvice to launch a virtual maternal care model addressing maternal care disparities in underserved communities[4] Management Commentary Management highlighted Q3 2024 as a transformative period, marking the first full quarter post-merger of VSee Lab and iDoc Virtual Telehealth Solutions. The integration has strengthened the company's position in delivering scalable, tailored telehealth solutions, addressing critical healthcare challenges, and expanding access in underserved communities while optimizing workflows for enterprise clients - Q3 2024 marks a transformative moment, completing the first full quarter post-merger of VSee Lab and iDoc Virtual Telehealth Solutions[5] - The combined company is uniquely positioned to address critical challenges in healthcare, including expanding access in underserved communities and optimizing workflows for enterprise-level clients[5] - The company's ability to combine fast customization, enterprise scalability, and robust security differentiates it in the telehealth market[5] - Strategic initiatives and partnerships launched this quarter exemplify commitment to delivering scalable solutions that improve lives and create long-term stakeholder value[5] Financial Results Overview VSee Health reported strong Q3 and 9M 2024 revenue growth from the iDoc acquisition, offset by significant net losses from a goodwill impairment Third Quarter 2024 Financial Results VSee Health reported a significant increase in Q3 2024 revenue, primarily driven by the iDoc acquisition and growth in technical and professional services. However, the quarter saw a substantial net loss due to a one-time goodwill impairment charge Third Quarter 2024 Key Financials | Metric | Q3 2024 (USD) | Q3 2023 (USD) | Change (YoY) | | :----------------- | :------------ | :------------ | :----------- | | Revenue | $3.4 million | $1.5 million | 131% | | Operating Expenses | $59.5 million | $1.2 million | 4670% | | Net Loss | $51.8 million | $0.1 million | 51700% | - Revenue increase was primarily driven by $1.1 million from the iDoc acquisition, a 267% increase in technical and engineering fees, and a 40% increase in professional and other fees; subscription revenue also increased by 9%[7] - Operating expenses increased by $58.2 million, mainly due to a one-time goodwill impairment charge of $55.0 million, higher general and administrative expenses (including amortization and iDoc acquisition-related costs), and transaction expenses[8] - Net loss was primarily driven by the $55.0 million goodwill impairment charge and a $0.7 million loss on extinguishment, partially offset by a $5.7 million gain on the change in fair value of debt and derivative financial instruments[9] Nine Month 2024 Financial Results For the nine months ended September 30, 2024, VSee Health experienced substantial revenue growth, largely due to the iDoc acquisition and increased service fees. Similar to the quarterly results, the period was marked by a significant net loss, primarily attributable to a one-time goodwill impairment charge Nine Month 2024 Key Financials | Metric | 9M 2024 (USD) | 9M 2023 (USD) | Change (YoY) | | :----------------- | :------------ | :------------ | :----------- | | Revenue | $6.6 million | $4.3 million | 51% | | Operating Expenses | $63.0 million | $4.3 million | 1365% | | Net Loss | $52.1 million | $1.0 million | 5110% | - Revenue increase was primarily driven by the iDoc acquisition, a 161% increase in technical and engineering fees, and a 50% increase in professional and other fees; these increases were partially offset by a 2% decline in subscription revenue due to enterprise customer churn[10] - Operating expenses increased by $58.6 million to $63.0 million, mainly due to a one-time goodwill impairment charge of $55.0 million, higher general and administrative expenses (including amortization and iDoc acquisition-related costs), and transaction expenses[11] - Net loss was primarily driven by the $55.0 million goodwill impairment charge, a $1.6 million initial fair value loss on the Quantum Note, and a $0.7 million loss on extinguishment, partially offset by a $6.3 million gain on the change in fair value of debt and derivative financial instruments[12] Cash Position As of September 30, 2024, VSee Health reported a cash balance of $2.3 million Cash Position | Metric | As of Sep 30, 2024 (USD) | | :----- | :----------------------- | | Cash | $2.3 million | Pro Forma Financial Information Pro forma financials, assuming early 2023 iDoc acquisition, show increased Q3 2024 revenue and reduced net loss per share for both periods Pro Forma Summary Pro forma financial results, assuming the iDoc acquisition was completed at the beginning of 2023, show a slight increase in Q3 2024 revenue and a reduction in net loss per share for both the third quarter and nine-month periods compared to the prior year Pro Forma Financial Information | Metric | Q3 2024 (USD) | Q3 2023 (USD) | 9M 2024 (USD) | 9M 2023 (USD) | | :---------------------- | :------------ | :------------ | :------------ | :------------ | | Total Revenues | $3.4 million | $3.1 million | $9.2 million | $9.4 million | | Net Loss | $(0.4) million | $(1.3) million | $(2.4) million | $(3.4) million | | Weighted Average Shares | 15.1 million | 14.8 million | 14.8 million | 14.6 million | | Net Loss Per Share | $(0.02) | $(0.09) | $(0.16) | $(0.24) | - Proforma total revenues for Q3 2024 were $3.4 million, up from $3.1 million in Q3 2023[15] - Proforma total revenues for the nine months ended September 30, 2024, were $9.2 million, slightly down from $9.4 million for the same period in 2023[15] - Proforma net loss for Q3 2024 was $0.4 million (or $(0.02) per share), an improvement from a net loss of $1.3 million (or $(0.09) per share) in Q3 2023[16] - Proforma net loss for the nine months ended September 30, 2024, was $2.4 million (or $(0.16) per share), an improvement from a net loss of $3.4 million (or $(0.24) per share) for the same period in 2023[16] Company Overview VSee Health provides an AI telehealth platform for rapid enterprise deployment, offering customizable, secure, and HIPAA-compliant solutions globally About VSee Health VSee Health provides an AI telehealth platform designed for rapid enterprise deployment, offering customizable, HIPAA-compliant, and secure telehealth solutions. The company has a global presence, serving diverse clients including government agencies and major corporations, and is committed to improving healthcare access and reducing physician burnout - VSee Health's AI telehealth platform enables rapid ideation-to-market deployment for enterprises[18] - The platform handles over 1.5 million HIPAA-compliant video encounters monthly and offers customizable, secure, and scalable telehealth building blocks[18] - Services have been deployed in over 50 countries, with clients including NASA Space Station, US Department of Health and Human Services, McKesson, Magellan, DaVita, GE, and the entire country of Qatar[18] - The company provides tailored solutions for critical shortage areas like critical care and teleradiology, aiming to empower high-quality healthcare access and reduce physician burnout and workforce shortages[19] Financial Statements This section presents VSee Health's condensed consolidated balance sheets, statements of operations, and cash flows, detailing financial position, performance, and liquidity Condensed Consolidated Balance Sheets The condensed consolidated balance sheets provide a snapshot of VSee Health's financial position as of September 30, 2024, compared to December 31, 2023, detailing assets, liabilities, and stockholders' equity Condensed Consolidated Balance Sheets (Selected Items) | Metric | Sep 30, 2024 (Unaudited) (USD) | Dec 31, 2023 (USD) | | :-------------------------- | :----------------------- | :----------- | | Total Current Assets | $7,107,513 | $827,134 | | Total Assets | $25,029,730 | $830,791 | | Total Current Liabilities | $19,206,202 | $4,243,438 | | Total Liabilities | $20,270,718 | $4,243,438 | | Total Stockholders' Equity | $4,759,012 | $(3,412,647) | Condensed Consolidated Statements of Operations The condensed consolidated statements of operations present VSee Health's revenues, costs, and expenses, leading to net loss for the three and nine months ended September 30, 2024, and 2023 Condensed Consolidated Statements of Operations (Selected Items) | Metric | Q3 2024 (USD) | Q3 2023 (USD) | 9M 2024 (USD) | 9M 2023 (USD) | | :-------------------------------------- | :------------- | :------------ | :------------- | :------------ | | Total Revenues | $3,354,437 | $1,451,471 | $6,561,998 | $4,337,962 | | Gross Margin | $2,413,049 | $973,072 | $4,747,717 | $2,809,954 | | Total Operating Expenses | $59,479,147 | $1,247,428 | $62,958,678 | $4,332,582 | | Net Operating Loss | $(57,066,098) | $(274,356) | $(58,210,961) | $(1,522,628) | | Net Loss | $(51,751,525) | $(98,581) | $(52,084,317) | $(983,181) | | Basic and Diluted Loss Per Common Share | $(3.43) | $(0.01) | $(6.24) | $(0.10) | Condensed Consolidated Statements of Cash Flows The condensed consolidated statements of cash flows detail the cash generated from or used in operating, investing, and financing activities for the nine months ended September 30, 2024, and 2023, showing a significant increase in cash and cash equivalents by the end of the period Condensed Consolidated Statements of Cash Flows (Selected Items) | Metric | 9M 2024 (USD) | 9M 2023 (USD) | | :-------------------------------------- | :------------- | :------------ | | Net Cash Used in Operating Activities | $(2,815,248) | $(523,436) | | Net Cash Used in Investing Activities | $(21,384) | $(2,690) | | Net Cash Provided by Financing Activities | $5,045,235 | $455,000 | | Net Change in Cash and Cash Equivalents | $2,208,603 | $(71,126) | | Cash and Cash Equivalents, End of Period | $2,327,337 | $159,538 | - Non-cash investing and financing activities included net liabilities acquired in reverse merger of $(18,704,806) and fair value of shares issued in iDoc acquisition of $68,907,052[25][26] Additional Information This section includes disclosures on forward-looking statements, cautioning readers about inherent risks, and provides investor relations contact details Forward-Looking Statements This section contains forward-looking statements regarding VSee Health's future performance and ability to improve healthcare access and provider efficiencies. These statements are subject to known and unknown risks and uncertainties, and readers are cautioned not to place undue reliance on them. The company does not undertake to update any forward-looking statements - Statements not of historical fact are forward-looking and involve known and unknown risks and uncertainties[20] - Readers should not place undue reliance on forward-looking statements, which speak only as of their date[20] - VSee Health undertakes no obligation to publicly update or revise any forward-looking statements[20] Contacts Contact information for investor relations is provided - Investor Relations Contact: Dave Gentry, RedChip Companies, Inc., 1-407-644-4256, VSEE@redchip.com[26]