Executive Summary / Key Takeaways

• Niche Technological Leadership Meets Critical Demand: VSee Health (VSEE) is strategically positioned at the intersection of advanced telehealth technology and the acute shortage of specialized medical professionals, particularly in intensive care. Its "no-code/low-code" platform and AI-powered solutions offer tangible efficiency gains and improved patient outcomes in high-acuity settings, addressing a critical market need.
• Rapid Revenue Growth Driven by Strategic Acquisition: The company demonstrated significant revenue growth of 81% in 2024, reaching $10.42 million, largely propelled by the strategic acquisition of iDoc and increased demand for its technical and professional services. This expansion highlights the market's appetite for VSee's specialized offerings.
• Severe Financial Instability and Going Concern Risk: Despite revenue growth, VSee faces profound financial challenges, including a substantial net loss of $57.70 million in 2024 (exacerbated by a $56.68 million goodwill impairment) and negative operating cash flow. The company's independent auditors have expressed "substantial doubt" about its ability to continue as a going concern, underscored by insufficient cash on hand and ongoing NASDAQ delisting concerns.
• Operational and Governance Weaknesses: Material weaknesses in internal control over financial reporting, including inadequate accounting personnel and control oversight, led to a significant financial restatement and late SEC filings. These issues raise concerns about operational execution and management's capacity to navigate public company requirements effectively.
• High-Risk, High-Reward Outlook: VSee's future hinges on its ability to secure significant additional capital to remediate internal control deficiencies, fund R&D, and execute its growth strategy, particularly in AI-powered solutions. While its technological differentiation offers a compelling long-term vision, immediate financial and operational hurdles present a formidable challenge for investors.

The Dual Promise: Specialized Telehealth and Acute Care Innovation

VSee Health, Inc. (VSEE) stands at a pivotal juncture, aiming to redefine virtual healthcare through its dual-pronged approach: VSee Lab's comprehensive telehealth platform and iDoc's specialized high-acuity patient care services. The company's core mission is to serve as a digital transformation tool for healthcare enterprises, addressing the twin mega-trends of enhancing patient engagement and alleviating the ever-growing shortage of clinicians across America. This strategic focus places VSee in a dynamic, $787 billion digital healthcare market, where telehealth solutions currently represent less than 1% of total healthcare spending, according to Grandview Research, signaling immense untapped potential.

The company's history is a testament to its evolving strategy. Founded in 2008 by Milton Chen, VSee Lab initially focused on developing a robust telehealth platform. In 2014, Imoigele Aisiku established iDoc, specializing in critical care. The pivotal moment arrived on June 24, 2024, when Digital Health Acquisition Corp. (DHAC) merged with VSee Lab and iDoc, rebranding as VSee Health, Inc. This combination was designed to integrate VSee Lab's extensive software capabilities with iDoc's specialized clinical expertise, particularly in neurointensive and cardiac intensive care, to bridge critical care gaps and combat physician burnout.

VSee's technological differentiation is central to its investment thesis. VSee Lab's platform offers "no-code/low-code" configurability, empowering clinicians to customize workflows rapidly—in minutes for "no-code" changes and days or weeks for "low-code" modifications—without extensive IT intervention. This contrasts sharply with traditional EMR-built telehealth tools or custom-built solutions that often require "dozens of engineers and often take many months or even years." The platform integrates seamlessly with major EMRs like EPIC and Cerner via HL7, FHIR, and sFTP, ensuring HIPAA, SOC2, and GDPR compliance. Key features include on-demand visits, scheduling, remote physical exams with live medical device streaming (otoscope, stethoscope), and remote patient monitoring.

Further innovation is evident in VSee's AI for telesitter and telenursing solutions, designed to augment bedside nursing staff and target a "3-5% Reduction in Hospital Nursing Costs." This AI monitors patient room events, such as fall prevention and stress detection, converting them into task queues for a two-layer telenursing coverage system. Internationally, VSee launched "Project MAMA" in the remote Philippines in May 2025, an AI-powered telehealth initiative aimed at reducing maternal mortality rates. The company is also powering an NIH-funded Phase 3 clinical trial for stroke recovery telerehabilitation, demonstrating its commitment to evidence-based, advanced healthcare solutions. These technological advancements are crucial for VSee's competitive moat, driving efficiency, improving patient outcomes, and addressing critical clinician shortages.

Competitive Landscape and Strategic Positioning

VSee operates in a fiercely competitive telehealth market, facing both established giants and nimble innovators. Its primary direct competitors include Teladoc Health (TDOC), Amwell (AMWL), and Zoom Video Communications (ZM), alongside EMR-built telehealth tools and custom-built hospital solutions. Many of these rivals are well-financed, possess longer operating histories, and have extensive resources, enabling them to respond swiftly to market shifts and engage in aggressive pricing strategies.

Comparing VSee to its direct competitors reveals distinct positioning:

• Against Teladoc Health (TDOC): TDOC, a leader in virtual healthcare, offers a broad range of general telehealth and chronic care management services. While TDOC boasts a wider user base and established brand recognition, VSee differentiates itself through its specialized focus on high-acuity intensive care. VSee's customizable platform aims for superior efficiency in complex critical care coordination, potentially fostering deeper loyalty in its niche segments. Financially, TDOC's larger scale generally translates to stronger cash flow generation and profitability margins (TDOC's Gross Profit Margin: 71% vs. VSEE's 68.87% TTM), giving it an advantage in R&D investment and market expansion. VSee must leverage its acute care specialization to maintain its competitive edge against TDOC's broader market penetration.
• Against Amwell (AMWL): AMWL provides integrated telehealth platforms, often partnering with hospitals. Amwell has experienced revenue growth but has faced challenges with profitability due to high operational costs (AMWL's Gross Profit Margin: 39% vs. VSEE's 68.87% TTM). VSee's focus on acute care and configurable workflows may offer greater efficiency in high-stakes medical scenarios compared to AMWL's broader, more accessible approach. While AMWL emphasizes ease of use and wider reach, VSee's niche strengths could lead to more resilient financial performance in its focused markets, especially if AMWL struggles with profitability.
• Against Zoom Video Communications (ZM): ZM offers robust video conferencing tools that can be adapted for telehealth, demonstrating strong profitability and cash flow (ZM's Gross Profit Margin: 76% vs. VSEE's 68.87% TTM). However, ZM's solutions are generic compared to VSee's healthcare-specific platform, which provides specialized features for medical coordination and real-time data sharing in critical conditions. VSee's advantage lies in its purpose-built clinical functionality, offering superior performance in regulated healthcare environments, though ZM leads in sheer scalability and user base.

Indirect competitors include traditional in-person healthcare, AI-driven diagnostic tools, and wearable health tech. These alternatives could impact VSee by offering more accessible or easier-to-implement solutions, potentially eroding market share in non-acute segments. VSee's competitive advantages, or "moats," include its proprietary "no-code/low-code" platform, which enhances coordination for acute patients and fosters customer loyalty, and its regulatory compliance (HIPAA, SOC2, GDPR). These factors help VSee defend its position by limiting new entrants and exploiting the scalability issues of some competitors. However, VSee's smaller scale and capital constraints represent vulnerabilities, potentially leading to higher customer acquisition costs and slower innovation compared to larger, well-funded rivals.

Financial Performance and Liquidity: A Precarious Path

VSee Health's financial performance in 2024 presents a mixed picture of significant growth alongside severe operational and liquidity challenges. The company reported total revenue of $10.42 million for the year ended December 31, 2024, an impressive 81% increase from $5.77 million in 2023. This growth was substantially driven by the acquisition of iDoc, which contributed $2.22 million to 2024 revenues, primarily from patient and telehealth fees. The Technology segment also saw robust growth, with technical and engineering fees surging by $1.32 million (201%) and professional and other fees increasing by $1.05 million (98%), reflecting strong demand for its customization and project management services.

Despite this top-line expansion, profitability remains elusive. Gross margin increased to $7.18 million in 2024 from $3.83 million in 2023, with a TTM Gross Profit Margin of 68.87%. However, operating expenses exploded by 1115% to $69.33 million in 2024, up from $5.71 million in 2023. This dramatic increase was largely due to a non-cash goodwill impairment charge of $56.68 million, primarily related to the Telehealth segment (iDoc). Other significant contributors to operating expenses included a $5.35 million (445%) rise in general and administrative expenses (driven by $759,782 in bad debt from iDoc and $2.14 million in professional fees related to the business combination) and $705,997 (813%) higher transaction expenses.

The net result was a deepening net loss of $57.70 million in 2024, a staggering 1449% increase from the $3.73 million net loss in 2023. The TTM Net Profit Margin stands at a concerning -562.95%. Cash flow from operations remained negative, with an outflow of $5.79 million in 2024. As of December 31, 2024, VSee's cash balance was a mere $326,115, which management explicitly stated is insufficient to cover operating cash needs for the subsequent 12 months. This precarious liquidity position, coupled with recurring losses and an accumulated deficit of $67.70 million, led the independent registered public accounting firm to express "substantial doubt" about the company's ability to continue as a going concern.

Adding to the financial turbulence, VSee Health announced in April and May 2025 that it received NASDAQ delisting notices due to delayed filings of its 2024 Annual Report on Form 10-K and Q1 2025 Form 10-Q. A suspension notice was issued in August 2025, which the company is appealing, with a hearing scheduled for September 9, 2025. These issues stem from identified material weaknesses in internal control over financial reporting, including insufficient accounting personnel, ineffective IT general controls, and a lack of formalized control oversight, which contributed to a restatement of prior financial statements.

To address these challenges, VSee is pursuing additional financing. It has an Equity Line of Credit (ELOC) agreement allowing it to raise up to $50 million over 36 months, with the investor having the option to purchase shares at a floor price of $1.25. Recent financing activities include securing $500,000 from a secured promissory note and $100,000 from a secured convertible promissory note in March 2025, and an additional $380,000 via an amendment to the Quantum Convertible Note in August 2025. The partial settlement of $405,000 in working capital advances from a related party (SCS) into common shares was treated as a troubled debt restructuring, highlighting the company's financial distress.

Outlook and Critical Risks

VSee Health's outlook is characterized by a compelling long-term vision for telehealth innovation, overshadowed by immediate and significant financial and operational risks. Management's strategic focus on leveraging its platform to address clinician shortages and enhance patient engagement remains pertinent, especially given the "overall leaning towards increased adoption of telehealth services compared to pre-COVID-19 era." The company's commitment to R&D, particularly in AI-powered solutions like the Telenursing Robotics, which targets a "3-5% Reduction in Hospital Nursing Costs," suggests a pathway to future value creation. However, current R&D spending is constrained by capital.

The most critical risk for VSee is its ability to secure sufficient additional capital to sustain operations and remediate its material weaknesses in internal controls. The "substantial doubt" regarding its going concern status and the ongoing NASDAQ delisting threat are existential. Failure to raise funds or successfully appeal the delisting could severely impact its ability to operate and access public markets. The lack of sufficient accounting personnel and formalized control environment, as identified in the 10-K, indicates fundamental governance issues that require urgent attention and investment.

Furthermore, customer and vendor concentration risks (two customers representing 50% of receivables, one customer 13% of revenue, one vendor 22% of payables) expose the company to significant dependency. The pending lawsuit alleging breach of contract and unjust enrichment also adds a layer of legal uncertainty, with an unquantifiable potential loss. The management team's lack of prior public company experience further amplifies the execution risk in navigating complex regulatory and financial reporting requirements.

Conclusion

VSee Health presents a high-risk, high-reward investment proposition. Its technological prowess, particularly the "no-code/low-code" telehealth platform and specialized high-acuity care solutions, addresses a burgeoning market need driven by clinician shortages and the ongoing digital transformation of healthcare. The company's recent revenue growth and innovative initiatives, such as AI-powered telenursing and participation in a NIH stroke recovery study, underscore its potential to capture significant market share in targeted segments.

However, the immediate financial reality is stark. The substantial net losses, negative cash flow, and the "going concern" warning from auditors, coupled with NASDAQ delisting proceedings and identified material weaknesses in internal controls, paint a picture of severe financial distress and operational fragility. For VSee to realize its technological promise, it must urgently secure substantial additional financing and rigorously address its internal control deficiencies. Investors considering VSee must weigh the compelling long-term narrative of specialized telehealth innovation against the immediate, critical challenges to its financial viability and operational stability. The path forward demands flawless execution on both strategic growth and fundamental corporate governance.