10-K: VSee Health Faces Going Concern Doubt Amid Nasdaq Delisting Threat

VSee Health, Inc. reported a 40% revenue increase in 2025 but faces substantial doubt about its ability to continue as a going concern, coupled with Nasdaq minimum bid price non-compliance and material internal control weaknesses.

Summary

• Revenue for 2025 increased by 40% to $14,618,184, up from $10,421,352 in 2024, primarily driven by the iDoc acquisition.
• Net loss significantly improved by 74%, reducing to $(14,735,984) in 2025 from $(57,702,015) in 2024, mainly due to the absence of a large goodwill impairment charge from the prior year.
• The company reported an accumulated deficit of $82,416,723 as of December 31, 2025, and a working capital deficit of $7,879,201.
• Cash and cash equivalents increased to $5,266,286 in 2025 from $326,115 in 2024, but current cash is insufficient for operating needs over the next 12 months.
• Management has concluded that substantial doubt exists about the company's ability to continue as a going concern.
• VSee Health received a Nasdaq notification for non-compliance with the minimum $1.00 bid price rule and has until September 21, 2026, to regain compliance.
• Material weaknesses in internal control over financial reporting were identified, including insufficient accounting personnel, ineffective IT General Controls, and lack of formalized control environment.
• The company operates two segments: Healthcare Technology (VSee Lab) and Telehealth Services (iDoc), with iDoc contributing significantly to revenue growth in 2025.
• No active research and development spending is currently in place due to capital constraints, despite operating in a rapidly evolving industry.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a highly concerning filing. The explicit 'going concern' warning, coupled with Nasdaq non-compliance and identified material weaknesses in internal controls, indicates severe financial and operational instability, overshadowing any reported revenue growth.

Positives

• Revenue increased by 40% to $14,618,184 in 2025, demonstrating significant top-line growth.
• The iDoc acquisition contributed $5,084,931 to revenue, representing a 229% increase over the prior year, indicating successful integration and market traction in high-acuity patient care.
• Net loss improved by 74% to $(14,735,984) in 2025, largely due to the absence of a $56,675,210 goodwill impairment charge recorded in 2024.
• Cash and cash equivalents increased substantially to $5,266,286 in 2025 from $326,115 in 2024, improving liquidity.
• The company's telehealth platform offers 'no code/low code' configuration, empowering clinicians and potentially driving higher market share in a rapidly transforming market.
• Received Stockholder Approval on March 2, 2026, for the issuance of up to 19,672,130 shares related to the Armistice Private Placement Warrants, which could provide future capital.
• The iDoc business received an Employee Retention Credit (ERC), contributing to other income.

Negatives

• Substantial doubt exists about the company's ability to continue as a going concern due to recurring losses, an accumulated deficit of $82,416,723, and negative cash flows from operations.
• Current cash on hand is insufficient to meet operating cash needs for the next 12 months.
• The company is non-compliant with Nasdaq's minimum $1.00 bid price rule and faces potential delisting if compliance is not regained by September 21, 2026.
• Identified material weaknesses in internal control over financial reporting, including insufficient accounting personnel, ineffective IT General Controls, and lack of formalized control environment, which could impair financial reporting accuracy.
• Cost of revenues increased by 124% in 2025, outpacing gross margin growth.
• Subscription revenue declined by 22% and technical engineering services revenue decreased by 47% in 2025, indicating challenges in certain business segments.
• Other income decreased significantly by $7,867,460 (280%) in 2025, primarily due to losses on changes in fair value of debt and derivative financial instruments and increased interest expense.
• The current management team has no prior experience managing a public company, which poses risks related to regulatory compliance and investor relations.
• No formalized cybersecurity measures, dedicated team, or specific protocols are currently in place, leaving the company vulnerable to cyberattacks and data breaches.
• No cash dividends are anticipated in the foreseeable future, meaning capital appreciation is the sole source of gain for stockholders.
• The company relies heavily on a limited number of significant customers, with the top three accounting for 45% of total 2025 revenue, posing concentration risk.
• No active research and development spending is currently in place due to capital constraints, which could hinder long-term competitiveness in a technology-driven industry.

Risks

• Uncertainty regarding the ability to continue as a going concern.
• Operating in a rapidly evolving and highly competitive telemedicine industry.
• High degree of uncertainty regarding demand for and market utilization of software and solutions.
• Potential for future losses and inability to achieve or sustain profitability.
• Difficulty in evaluating the business due to its developing and rapidly evolving nature.
• Fluctuations in business, results of operations, and financial condition on a quarterly and annual basis.
• Long and unpredictable sales cycles requiring considerable time and expense.
• Adverse effects from developments impacting spending by the healthcare industry.
• Potential medical malpractice risks inherent in providing healthcare services.
• Disproportionate impact from economic uncertainties or prolonged downturns.
• Harm to business if existing clients do not continue or renew contracts, or renew at lower fee levels.
• Dependence on maintaining and expanding the network of hospital systems, telemedicine user bases, and board-certified physicians.
• Dependence on relationships with affiliated professional entities to provide medical services.
• Harm to business if new solutions, enhancements, or features are not developed and released successfully.
• Damage to client relationships and financial results from failure to offer high-quality technical support services.
• Inability to attract and retain highly skilled employees due to intense competition for qualified personnel.
• Risks associated with management's broad discretion in strategic decisions.
• Diversion of management's attention, dilution to stockholders, and operational disruption from potential acquisitions.
• Inability to manage future growth effectively, leading to increased expenses and unmet client requirements.
• Inaccurate estimates and assumptions used to determine the size of the total addressable market.
• Failure to grow at historical rates, adversely affecting common stock market price.
• Exposure to costly and time-consuming litigation.
• Potential for medical liability claims not fully covered by insurance.
• Successful assertion by taxing authorities that sales and use, value-added, or similar taxes should have been collected.
• Likely requirement for additional capital from equity or debt financings, which may not be available on acceptable terms or at all.
• Volatility in the price of Common Stock and Public Warrants.
• Failure to maintain an effective system of disclosure controls and internal control over financial reporting.
• Reduced disclosure requirements as an emerging growth company potentially making securities less attractive to investors.
• Lack of substantial combined operating history between VSee Lab and iDoc, posing integration challenges.
• Current management team's lack of experience managing a public company.
• Failure to meet Nasdaq continuing listing requirements, leading to potential delisting.
• Reduction in share price or dilution from the exercise of warrants, conversion of preferred stock, or vesting of equity grants.
• Risk of securities litigation.
• Difficulty trading shares if they become subject to penny stock rules.
• Significant costs and management time devoted to public company compliance programs.
• Amendment of public warrant terms in a manner adverse to holders.
• Public warrants may expire worthless.
• Substantial sales of shares by holders of convertible promissory notes, causing stock price decline.
• Significant dilution to stockholders from commitments to issue shares of Common Stock or convertible securities.
• Short sales by third parties exacerbating stock price decline.
• Operating in a heavily regulated healthcare environment (HIPAA, Anti-Kickback Statute, False Claims Act, Stark Law, state laws).
• Evolving government regulations and enforcement activities requiring increased costs.
• Increased expenses due to physician licensing and credentialing requirements.
• FDA regulatory review and oversight for certain software products related to telemedicine platforms.
• FTC oversight of advertising and promotion.
• Obsolescence of solutions due to failure to keep pace with advances in technology.
• Significant liabilities and reputational harm from security breaches of systems.
• Reliance on telecommunications and internet service providers, with risks of interruption or failure.
• Impairment of ability to protect internally developed technology and brand due to failure to protect or enforce intellectual property rights.
• Substantial costs from claims of infringement of another party's intellectual property rights.
• Damage to reputation and claims arising from software platforms not performing properly due to errors.

Future Outlook

Management anticipates continued operating losses and negative cash flows in the future, necessitating additional capital from equity or debt financings. The company plans to focus future research and development on new products and enhancing existing solutions. Efforts are underway to regain Nasdaq compliance, potentially through a reverse stock split. A new $25,000,000 Equity Line of Credit agreement is pending SEC approval, and the company recently entered a $2.0 million stock purchase agreement with GoMyRx, Inc. The Board of Directors will oversee the development of a formalized cybersecurity risk management framework.

Management Comments

• We put telehealth software tools in the hands of clinicians to enable them to make changes without programming so that they can achieve the best patient outcomes.
• We strive to be the solutions provider of access to the shortage of intensivists across the care continuum utilizing sophisticated telehealth solutions to bridge the care gap.
• In a post-Covid health care system, we aim to provide a solution to physician burnout and to a lack of patient access to quality intensive care.
• Management has concluded that substantial doubt exists about our ability to continue as a going concern for one year after the date our consolidated financial statements are issued.
• We believe that the rapid transformation of the telehealth market indicates strong future growth of the market, and our current offerings provide an attractive value proposition to health systems, medical groups, and individual medical practitioners, driving higher market share.
• We plan to continue to harness our scale to further grow the value proposition of our platform for all stakeholders.
• We plan to leverage our industry relationships with government, hospital systems and insurance providers to increase our customer base.
• We believe our ability to invest in new technology and develop new features, modules, and solutions will be critical to our long-term success.
• Our management believes that the consolidated financial statements included in this report fairly represent in all material respects our financial condition, results of operations and cash flows at and for the periods presented in accordance with U.S. GAAP.

Industry Context

StockSavvy.ai notes that VSee Health operates within a rapidly evolving and highly competitive telehealth market, characterized by significant trends in patient engagement and clinician staffing shortages. The increasing complexity of intensive care units drives demand for specialized intensivists, which VSee Health aims to address through its sophisticated telehealth solutions. While the overall telehealth market shows strong growth potential, it remains largely underpenetrated, representing less than 1% of total healthcare spending. The company faces intense competition from established telehealth providers like Teladoc and American Well, as well as large technology and retail giants entering the healthcare space, and electronic medical record (EMR) vendors integrating their own telehealth tools. VSee Health differentiates itself with a 'no code/low code' platform for flexible workflow configuration and specialized high-acuity care through iDoc, contrasting with competitors' often rigid or hardware-centric approaches.

Comparison to Industry Standards

• VSee Health competes with established telehealth providers such as MDLive (Cigna), American Well Corporation, Included Health, and Accolade, Inc., many of whom are well-financed with longer operating histories and greater resources.
• In the Neuro and/or ICU specialty segment, competitors include NeuroCall, Ceribell, and enVision teleICU (INOVA), with VSee Health's iDoc focusing on optimizing a network of board-certified physicians and configurable workflows, contrasting with some competitors' hardware-centric origins.
• VSee Health's 'no code/low code' platform offers greater flexibility in workflow changes compared to the more rigid, time-consuming software offered by EMRs' built-in telehealth tools.
• The company's solutions provide productivity and patient engagement features that extend beyond basic video conferencing offered by general platforms like Zoom and Microsoft Teams.
• Despite rapid advancements, the telehealth market, as a whole, has not fully penetrated medicine and hospital systems, representing less than 1% of total healthcare spending, according to Grandview Research, indicating significant untapped potential but also challenges in broader adoption.

Management Changes

Corporate Governance

Legal Proceedings

• A lawsuit was filed against the company on July 25, 2024, alleging breach of contract and unjust enrichment, to which the company filed a counterclaim.
• The Encompass Purchase liability, which was part of a prior acquisition, was fully settled on February 16, 2026, for an aggregate amount of $650,000, consisting of cash, company shares, and assignment of a loan liability.

Related Party Transactions

• Outstanding balance of $51,900 due to related parties as of December 31, 2025.
• Promissory notes from Milton Chen (Co-CEO) totaling $121,000, $132,000, and $70,000, all of which are currently in default.
• A balance of $304,614 due from Imoigele Aisiku (Co-CEO) as of December 31, 2025, which is unsecured and non-interest-bearing.
• A note receivable of $336,000 from Imoigele Aisiku was written off during 2024.
• A promissory note of $200,000 from a board member, with payments tied to monthly revenue generated from telepresence robots.
• SCS Capital Partners LLC, an affiliate of the company's Sponsor, owns approximately 40.74% of the Quantum Investor, which holds a significant convertible note.
• A Consulting Services Agreement with SCS, LLC (Sponsor affiliate) involves monthly payments for services and remote office space, along with stock issuances.
• Advances due to the Sponsor and certain Sponsor affiliates totaling $51,900 remain due and payable as of December 31, 2025.
• The Equity Line of Credit (ELOC) agreement was with the Bridge Investor, a related party, and was terminated on October 18, 2025.

Stakeholder Impact

• **Shareholders**: Face significant risks including potential loss of investment due to going concern doubt, substantial dilution from various convertible instruments and equity raises, and stock price volatility. The Nasdaq delisting threat further jeopardizes liquidity and market value. No cash dividends are expected.
• **Employees**: The company's ability to attract and retain highly skilled personnel, particularly physicians and software engineers, is critical for growth. Stock-based compensation plans are in place, but the overall financial instability could impact employee morale and retention.
• **Customers**: May benefit from the company's 'no code/low code' telehealth platform and specialized high-acuity care solutions. However, risks related to the company's financial stability, potential delays in new solution development, and cybersecurity vulnerabilities could impact service continuity and quality.
• **Suppliers/Creditors**: Face elevated credit risk due to the company's going concern doubt and history of defaults on certain notes. Recent settlement agreements indicate active management of liabilities, but future ability to meet obligations is uncertain.
• **Regulatory Bodies**: The company operates in a heavily regulated healthcare environment, requiring strict compliance with laws like HIPAA, Anti-Kickback Statute, and False Claims Act. Non-compliance could lead to significant penalties and operational restrictions.

Next Steps

• Raise additional working capital through public or private equity or debt financings or other sources.
• Implement disciplined cash spending to manage liquidity.
• Focus future research and development on delivering new products and enhancing solutions functionality, performance, and flexibility.
• Cure Nasdaq minimum bid price deficiency by effecting a reverse stock split, if necessary, by September 21, 2026.
• Develop appropriate measures to enhance cybersecurity posture, including engaging external experts, conducting vulnerability assessments, and developing an incident response strategy.
• The Board of Directors will oversee the cybersecurity risk management framework and approve related policies.
• File an S-1 registration statement with the 2025 audited financial statements for the new $25,000,000 ELOC agreement to become effective.
• Continue to monitor and analyze cash and the ability to generate sufficient cash flow to support operating and capital expenditure commitments.
• Proceed with the $2.0 million stock purchase agreement with GoMyRx, Inc. to acquire a 10% ownership interest.

Key Dates

Recommendation

The company's explicit 'going concern' warning, coupled with a substantial accumulated deficit, working capital deficit, and Nasdaq minimum bid price non-compliance, signals severe financial distress. While revenue growth is positive, it is overshadowed by fundamental instability and significant operational weaknesses, including material internal control deficiencies. The reliance on future capital raises, with no guarantee of favorable terms or success, and the risk of delisting, make this a highly speculative and precarious investment. A seasoned investor would likely view these factors as prohibitive and recommend divesting.

Keywords

Telehealth, Telemedicine, Healthcare Technology, SEC Filing, 10-K, Financial Reporting, Going Concern, Nasdaq Delisting, Internal Controls, Digital Health, iDoc, VSee Lab, Convertible Notes, Warrants, Patient Engagement, Clinician Staffing, Remote Patient Monitoring, AI in Healthcare, HIPAA Compliance, Risk Factors