VSee Health, Inc.(VSEE) - 2024 Q3 - Quarterly Results

Company Overview and Highlights VSee Health reported significant revenue growth for Q3 and the nine months ended September 30, 2024, driven by strategic acquisitions and expanded service offerings, alongside key business developments Financial & Business Highlights VSee Health reported significant revenue growth for Q3 and the nine months ended September 30, 2024, driven by strategic acquisitions and expanded service offerings. Key business developments include new partnerships, product launches, and initiatives aimed at addressing healthcare disparities and expanding access Financial & Business Highlights Table | 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] - 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 GLP-1 telehealth program to address obesity and chronic diseases, integrating prescription medication, personalized care plans, and behavioral interventions[4] Management Commentary Management highlighted the third quarter as a transformative period, marking the first full quarter post-merger of VSee Lab and iDoc Virtual Telehealth Solutions, emphasizing its strengthened position in delivering scalable, tailored telehealth solutions and commitment to addressing critical healthcare challenges - The third quarter marks a transformative moment, completing the first full quarter post-merger of VSee Lab and iDoc Virtual Telehealth Solutions, solidifying the company's position in scalable 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] - Strategic initiatives and partnerships, such as programs addressing obesity, maternal health disparities, and veteran care, exemplify the commitment to delivering scalable solutions that improve lives and create long-term stakeholder value[5] Unaudited Financial Performance This section details VSee Health's unaudited financial results for Q3 and the nine months ended September 30, 2024, highlighting revenue growth, significant net losses due to goodwill impairment, and cash position Third Quarter 2024 Financial Results VSee Health experienced substantial revenue growth in Q3 2024, primarily due to the iDoc acquisition and increased service fees, but recorded a significant net loss driven by one-time goodwill impairment charges Revenue Analysis Q3 2024 revenue saw a 131% increase, primarily driven by the iDoc acquisition and significant growth in technical and engineering fees Revenue Analysis Table | Metric | Q3 2024 (USD) | Q3 2023 (USD) | Change (%) | | :--------------- | :------------ | :------------ | :--------- | | Total Revenue | $3.4 million | $1.5 million | 131% | | iDoc Acquisition | $1.1 million | N/A | 100% | | Tech & Eng Fees | N/A | N/A | 267% | | Prof & Other Fees| N/A | N/A | 40% | | Subscription Rev | N/A | N/A | 9% | - The increase in technical and engineering fees was due to a higher volume of engineering, customizations, and integration services provided to the U.S. Department of Health and Human Services and existing customers[7] Operating Expenses and Net Loss Q3 2024 operating expenses surged due to a $55.0 million goodwill impairment charge, leading to a substantial net loss partially offset by gains on financial instruments Operating Expenses and Net Loss Table | Metric | Q3 2024 (USD) | Q3 2023 (USD) | Change (USD) | | :----------------- | :------------ | :------------ | :----------- | | Operating Expenses | N/A | N/A | +$58.2 million | | Net Loss | $51.8 million | $0.1 million | +$51.7 million | | Goodwill Impairment| $55.0 million | N/A | N/A | - The increase in operating expenses was primarily driven by one-time goodwill impairment charges of $55.0 million, higher general and administrative expenses (including amortization and iDoc acquisition-related expenses), and transaction-related expenses[8] - The net loss was partially offset by a $5.7 million gain on the change in fair value of debt and derivative financial instruments[9] Nine Months Ended September 30, 2024 Financial Results For the nine months ended September 30, 2024, VSee Health reported a 51% increase in revenue, largely due to the iDoc acquisition and growth in technical and professional services, but incurred a substantial net loss primarily from goodwill impairment charges and other one-time losses Revenue Analysis Total revenue for the nine months ended September 30, 2024, increased by 51%, driven by the iDoc acquisition and growth in technical and professional fees, despite a slight decline in subscription revenue Revenue Analysis Table | Metric | 9M 2024 (USD) | 9M 2023 (USD) | Change (USD) | Change (%) | | :--------------- | :------------ | :------------ | :----------- | :--------- | | Total Revenue | $6.6 million | $4.3 million | +$2.2 million| 51% | | iDoc Acquisition | 100% of revenue | N/A | N/A | N/A | | Tech & Eng Fees | N/A | N/A | N/A | 161% | | Prof & Other Fees| N/A | N/A | N/A | 50% | | Subscription Rev | N/A | N/A | N/A | -2% | - Subscription revenue declined by 2% due to churned enterprise customers in 2024, as some clients shifted back to face-to-face consultations[10] Operating Expenses and Net Loss Operating expenses for the nine months ended September 30, 2024, significantly increased due to a $55.0 million goodwill impairment charge and other transaction-related costs, resulting in a substantial net loss Operating Expenses and Net Loss Table | Metric | 9M 2024 (USD) | 9M 2023 (USD) | Change (USD) | | :----------------- | :------------ | :------------ | :----------- | | Operating Expenses | $63.0 million | N/A | +$58.6 million | | Net Loss | $52.1 million | $1.0 million | +$51.1 million | | Goodwill Impairment| $55.0 million | N/A | N/A | | Quantum Note Loss | $1.6 million | N/A | N/A | | Loss on Extinguishment | $0.7 million | N/A | N/A | - The increase in operating expenses was primarily driven by one-time goodwill impairment charges of $55.0 million, higher general and administrative expenses, and transaction expenses from recapitalization and acquisitions[11] - The net loss was 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 Table | Metric | As of Sep 30, 2024 (USD) | | :----- | :----------------------- | | Cash | $2.3 million | Pro Forma Financial Information This section presents pro forma financial results, assuming the iDoc acquisition occurred at the beginning of 2023, to provide a comparable view of the company's performance Pro Forma Financial Summary Pro forma financial results, assuming the iDoc acquisition occurred at the beginning of 2023, show a slight increase in Q3 2024 revenue and a decrease in net loss for both Q3 and the nine-month period compared to the prior year Pro Forma Financial Summary Table | Metric | Q3 2024 (USD) | Q3 2023 (USD) | 9M 2024 (USD) | 9M 2023 (USD) | | :----------------- | :------------ | :------------ | :------------ | :------------ | | Total Revenues | $3,354,437 | $3,076,235 | $9,191,682 | $9,390,435 | | Net Loss | $(368,063) | $(1,322,199) | $(2,436,877) | $(3,435,940) | | Net Loss Per Share | $(0.02) | $(0.09) | $(0.16) | $(0.24) | - Pro forma total revenues for the nine months ended September 30, 2024, were $9.2 million, a slight decrease from $9.4 million for the same period in 2023[15] - The pro forma net loss for Q3 2024 significantly improved to $0.4 million (EPS $(0.02)) from $1.3 million (EPS $(0.09)) in Q3 2023[16] About the Company This section provides an overview of VSee Health's AI telehealth platform, its global reach, client base, and commitment to improving healthcare access, along with a cautionary note on forward-looking statements VSee Health Profile VSee Health provides an AI telehealth platform designed for rapid enterprise deployment, offering customizable, secure, and scalable solutions, with a global presence serving diverse clients and focusing on improving healthcare access and reducing workforce shortages - VSee Health's AI telehealth platform enables enterprises to quickly go from ideation to market, with customizable building blocks meeting stringent security standards[18] - The platform is field-hardened on over 1.5 million HIPAA-compliant video encounters monthly and has deployed services in over 50 countries[18] - Clients include NASA Space Station, US Department of Health and Human Services, McKesson, Magellan, DaVita, GE, and the entire country of Qatar[18] - VSee Health is committed to empowering high-quality healthcare access and reducing physician burnout and workforce shortages through its telehealth technology[19] Forward-Looking Statements This section serves as a cautionary note regarding forward-looking statements, indicating that future performance may differ materially from historical results due to various known and unknown risks and uncertainties, and the company disclaims any obligation to update them - Statements in the news release that are not historical facts are considered 'forward-looking statements' under the Private Securities Litigation Reform Act of 1995[20] - Forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual performance or achievements to differ materially from those expressed or implied[20] - VSee Health undertakes no obligation to publicly update or revise any forward-looking statements after their date of issuance[20] Condensed Consolidated Financial Statements This section presents VSee Health's condensed consolidated balance sheets, statements of operations, and cash flows, providing a detailed view of the company's financial position and performance Condensed Consolidated Balance Sheets The balance sheet as of September 30, 2024, reflects a significant increase in total assets and liabilities compared to December 31, 2023, primarily driven by the iDoc acquisition and related financing activities, alongside a substantial increase in cash balances Condensed Consolidated Balance Sheets Table | Metric | Sep 30, 2024 (Unaudited) | Dec 31, 2023 | | :------------------------- | :----------------------- | :----------- | | Cash | $2,327,337 | $118,734 | | Total current assets | $7,107,513 | $827,134 | | Intangible assets, net | $11,547,500 | - | | Goodwill | $4,916,694 | - | | 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 (deficit) | $4,759,012 | $(3,412,647) | - The significant increase in intangible assets and goodwill reflects the impact of the iDoc acquisition[22] - Stockholders' equity shifted from a deficit of $(3,412,647) at December 31, 2023, to a positive $4,759,012 as of September 30, 2024[22] Condensed Consolidated Statements of Operations The statements of operations show a substantial increase in total revenues for both the three and nine months ended September 30, 2024, compared to the prior year, but this was overshadowed by a significant rise in operating expenses, primarily due to goodwill impairment charges, leading to a much larger net loss Condensed Consolidated Statements of Operations Table | 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 | | Goodwill Impairment Charges| $54,984,000 | - | $54,984,000 | - | | 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) | - The significant increase in total operating expenses for both periods is primarily attributable to the $54,984,000 goodwill impairment charges[24] - Despite revenue growth, the net loss per common share increased substantially due to the impairment charges and other one-time expenses[24] Condensed Consolidated Statements of Cash Flows For the nine months ended September 30, 2024, VSee Health experienced a net cash outflow from operating activities, largely influenced by the net loss and non-cash adjustments, but significant cash inflows from financing activities led to a positive net change in cash and cash equivalents Condensed Consolidated Statements of Cash Flows Table | 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 | - Key non-cash adjustments reconciling net loss to operating cash flow include $54,984,000 in goodwill impairment charges and a $(6,285,706) change in fair value of financial instruments[25] - Significant financing activities include proceeds from Quantum Convertible Note ($2,700,000), September 2024 Convertible Note ($2,000,000), and reverse recapitalization with DHAC ($1,323,362)[25] - Non-cash investing and financing activities include net liabilities acquired in reverse merger ($18,704,806) and fair value of shares issued in iDoc acquisition ($68,907,052)[25][26]