Overview of VSee Health, Inc.

Prior to June 24, 2024, VSee Health was a blank check company incorporated in Delaware. On June 24, 2024, the company completed a business combination with VSee Lab and iDoc. After the merger, VSee Health changed its name and the business of the acquired companies became its focus.

VSee Health provides telehealth software tools to enable clinicians to collaborate, coordinate patient care, conduct virtual visits, and manage their telehealth operations. Its subsidiary iDoc delivers high-acuity patient care solutions, specializing in neurocritical care through a proprietary technology platform. iDoc serves a range of customers from large hospital systems to smaller facilities.

The company aims to be a solutions provider for the shortage of intensivists across the care continuum, using sophisticated telehealth technology to bridge the care gap. VSee Health connects critically ill patients to high-quality specialists and helps improve outcomes, productivity, and reduce costs for healthcare systems.

Implications of Being an Emerging Growth Company

VSee Health qualifies as an “emerging growth company” under the JOBS Act. This allows the company to take advantage of certain exemptions, such as not being required to comply with the auditor attestation requirements of Sarbanes-Oxley or provide as much executive compensation disclosure. The company has also elected to adopt new accounting standards at the same time as private companies rather than public companies.

This may make it difficult to compare VSee Health’s financial statements to other public companies that are not emerging growth companies or have not made the same election. The company also qualifies as a “smaller reporting company” which allows for reduced disclosure requirements.

Key Performance Factors

Several factors are expected to influence VSee Health’s future performance:

1. Rapid Transformation of the Telehealth Market: The telehealth market is undergoing rapid change, with customers and competitors looking to build new capabilities. VSee Health believes its current offerings provide an attractive value proposition that will drive higher market share.

2. Ability to Expand Within the Market and Attract New Customers: Telehealth is still in the early stages of adoption and utilization, providing significant growth potential. VSee Health plans to leverage industry relationships to increase its customer base.

3. Innovation and New Product Offerings: Despite advancements, telehealth solutions have not fully penetrated the healthcare industry. VSee Health believes its technology meets performance and compliance standards and provides more comprehensive capabilities than competitors.

4. Significant Accounting Policies and Critical Estimates: Key areas include revenue recognition, fair value measurements, goodwill, asset impairment, and income taxes. The company’s estimates and judgments in these areas can significantly impact its financial statements.

Financial Performance

VSee Health’s revenue and profitability for the three and six months ended June 30, 2026 are summarized below:

Three Months Ended June 30:

Metric	2026	2025	Change
Revenue	$1,561,884	$1,055,191	+48%
Cost of Revenue	$1,355,731	$440,147	+208%
Gross Margin	13%	58%	-66%
Operating Expenses	$2,903,479	$2,171,111	+34%
Net Loss	$(3,080,442)	$(1,903,933)	+62%

Six Months Ended June 30:

Metric	2026	2025	Change
Revenue	$3,441,177	$2,252,805	+53%
Cost of Revenue	$2,507,612	$827,523	+203%
Gross Margin	27%	63%	-34%
Operating Expenses	$5,290,424	$4,528,415	+17%
Net Loss	$(4,344,228)	$(5,543,067)	-22%

Revenue Revenue increased 48% and 53% for the three and six month periods, respectively, driven by growth in telehealth fees and patient fees. Telehealth fees grew due to higher teleradiology revenue, partially offset by declines in Tele-ICU and hardware/software revenue. Patient fees increased from services provided to larger hospital networks.

Cost of Revenue and Gross Margin Cost of revenue increased significantly, up 208% and 203% for the three and six month periods, primarily due to higher independent contractor fees associated with the expansion of the teleradiology service line. As a result, gross margin declined from 58% to 13% in the three-month period and from 63% to 27% in the six-month period.

Operating Expenses Operating expenses increased 34% and 17% for the three and six month periods, respectively. This was driven by higher general and administrative costs, including increases in bad debt expense, business consulting, legal fees, and other professional services. Compensation and related benefits decreased slightly.

Other Income/Expense and Net Loss Other expense increased 16% in the three-month period but decreased 101% in the six-month period. The improvement was primarily due to lower interest expense following debt-to-equity conversions in late 2025 and the absence of certain non-recurring financing charges.

Net loss increased 62% in the three-month period due to lower gross profit, but decreased 22% in the six-month period due to the reduction in other expenses.

Cash Flows VSee Health used $2.5 million in operating cash flow in the first six months of 2026, compared to $1.2 million in the prior year period. This was primarily due to the net loss, partially offset by non-cash adjustments. Investing activities used $100,000 for long-term investments, while financing activities used $842,626, mainly for debt repayments.

The company had $454,151 in cash and cash equivalents as of June 30, 2026, down from $291,595 a year earlier. Future capital requirements will depend on the company’s growth rate, contract renewals, and market acceptance of telehealth.

Conclusion

VSee Health delivered strong revenue growth of 48-53% in the first half of 2026, driven by expansion in its telehealth and patient care services. However, the company’s profitability was impacted by higher costs associated with the teleradiology business, leading to a decline in gross margins.

While operating expenses increased, the company was able to significantly reduce its other expenses, resulting in a 22% decrease in net loss for the six-month period. The company’s cash position remains constrained, with continued cash outflows from operations.

Going forward, VSee Health’s ability to innovate, attract new customers, and control costs will be critical to improving its financial performance. The rapidly evolving telehealth market presents both opportunities and challenges, and the company’s success as an emerging growth player will depend on its ability to capitalize on industry trends while managing its operational and financial risks.