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UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Three Months Ended
March 31, 2024 and 2023
FOR THE THREE MONTHS ENDED MARCH 31, 2024
INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
| Condensed Financial Statements | ||||
| Condensed Consolidated Balance Sheets at March 31, 2024 (Unaudited) and December 31, 2023 | F-1 | |||
| Condensed Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023 (Unaudited) | F-2 | |||
| Condensed Consolidated Statements of Changes in Stockholders' Deficit for the three months ended March 31, 2024 and 2023 (Unaudited) | F-3 | |||
| Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023 (Unaudited) | F-5 | |||
| Notes to the Unaudited Condensed Consolidated Financial Statements | F-6 |
| VSEE LAB, INC. | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| March 31, | December 31, | |||||||
| 2024 | 2023 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 689,280 | $ | 118,734 | ||||
| Accounts receivable, net | 627,395 | 628,480 | ||||||
| Prepaids and other current assets | 102,325 | 79,920 | ||||||
| Total current assets | 1,419,000 | 827,134 | ||||||
| Fixed assets, net | 11,779 | 3,657 | ||||||
| Total assets | $ | 1,430,779 | $ | 830,791 | ||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | 1,819,512 | $ | 1,824,408 | ||||
| Deferred revenue | 1,371,527 | 802,524 | ||||||
| Due to related party | 338,218 | 338,506 | ||||||
| Due on share purchase | 135,000 | 135,000 | ||||||
| Contingent liability | 600,000 | 600,000 | ||||||
| Loan payable, related party, net of discount | 330,000 | 323,000 | ||||||
| Note payable, net of discount | 220,000 | 220,000 | ||||||
| Total liabilities | 4,814,257 | 4,243,438 | ||||||
| Commitments and contingencies (Note 4) | ||||||||
| Stockholders' deficit | ||||||||
| Preferred stock, $0.0001 par value, 1,701,715 shares authorized; | ||||||||
| Series A: 371,715 shares authorized, issued and outstanding | 37 | 37 | ||||||
| Series A-1: 1,330,000 shares authorized, and 1,228,492 issued and outstanding | 123 | 123 | ||||||
| Common stock, $0.0001 par value; 18,000,000 shares authorized 9,998,446 shares issued and outstanding | 1,000 | 1,000 | ||||||
| Additional paid in capital | 6,026,457 | 6,026,457 | ||||||
| Accumulated deficit | (9,117,796 | ) | (9,114,985 | ) | ||||
| Non-controlling interest | (293,299 | ) | (325,279 | ) | ||||
| Total stockholders' deficit | (3,383,478 | ) | (3,412,647 | ) | ||||
| Total liabilities and stockholders' deficit | $ | 1,430,779 | $ | 830,791 |
The accompanying notes are an integral part of
these unaudited condensed consolidated financial statements.
| VSEE LAB, INC. | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
| FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023 (UNAUDITED) | ||||||||
| For the Three Months Ended March 31, | ||||||||
| 2024 | 2023 | |||||||
| Revenues | ||||||||
| Subscription fees | $ | 1,005,202 | $ | 1,161,191 | ||||
| Professional services and other fees | 327,843 | 259,390 | ||||||
| Technical engineering Fees | 162,950 | 175,687 | ||||||
| Total Revenue | 1,495,995 | 1,596,268 | ||||||
| Cost of goods sold | 386,253 | 575,322 | ||||||
| Gross margin | 1,109,742 | 1,020,946 | ||||||
| Operating expenses | ||||||||
| Compensation and related benefits | 893,577 | 1,335,552 | ||||||
| General and administrative | 151,348 | 281,253 | ||||||
| Transaction expenses | 26,338 | 41,286 | ||||||
| Total operating expenses | 1,071,263 | 1,658,091 | ||||||
| Net operating profit (loss) | 38,479 | (637,145 | ) | |||||
| Other income (expenses): | ||||||||
| Interest expense | (9,310 | ) | (47,402 | ) | ||||
| Other income | - | 19,616 | ||||||
| Change in fair value on embedded derivative | - | 26,069 | ||||||
| Total other expenses | (9,310 | ) | (1,717 | ) | ||||
| Income (loss) before income taxes | 29,169 | (638,862 | ) | |||||
| Income tax benefit | - | 182,843 | ||||||
| Net income (loss) | 29,169 | (456,019 | ) | |||||
| Net income (loss) attributable to non-controlling interest | $ | 31,980 | $ | (4,767 | ) | |||
| Net loss attributable to stockholders | $ | (2,811 | ) | $ | (451,252 | ) | ||
| Basic and diluted loss per share | $ | (0.00 | ) | $ | (0.05 | ) | ||
| Weighted average number of shares outstanding, basic and diluted income | 9,998,446 | 9,998,446 |
The accompanying notes are an integral part of
these unaudited condensed consolidated financial statements.
| VSEE LAB, INC. | ||||||||||||||||||||||||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT (UNUADITED) | ||||||||||||||||||||||||||||||||||||||||
| FOR THE THREE MONTHS ENDED MARCH 31, 2024 | ||||||||||||||||||||||||||||||||||||||||
| Series A Preferred Stock | Series A-1 Preferred Stock | Common Stock | Additional Paid-In | Accumulated | Non: controlling | |||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Interest | Total | |||||||||||||||||||||||||||||||
| Balance, December 31, 2023 | 371,715 | $ | 37 | 1,228,492 | $ | 123 | 9,998,446 | $ | 1,000 | $ | 6,026,457 | $ | (9,114,985 | ) | $ | (325,279 | ) | $ | (3,412,647 | ) | ||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | (2,811 | ) | - | (2,811 | ) | ||||||||||||||||||||||||||||
| Non-controlling interest | - | - | - | - | - | - | - | - | 31,980 | 31,980 | ||||||||||||||||||||||||||||||
| Balance, March 31, 2024 | 371,715 | $ | 37 | 1,228,492 | $ | 123 | 9,998,446 | $ | 1,000 | $ | 6,026,457 | $ | (9,117,796 | ) | $ | (293,299 | ) | $ | (3,383,478 | ) |
The accompanying notes are an integral part of
these unaudited condensed consolidated financial statements.
| VSEE LAB, INC. | ||||||||||||||||||||||||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT (UNUADITED) | ||||||||||||||||||||||||||||||||||||||||
| FOR THE THREE MONTHS ENDED MARCH 31, 2023 | ||||||||||||||||||||||||||||||||||||||||
| Series A Preferred Stock | Series A-1 Preferred Stock | Common Stock | Additional Paid-In | Accumulated | Non - controlling | |||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Interest | Total | |||||||||||||||||||||||||||||||
| Balance, December 31, 2022 | 371,715 | $ | 37 | 1,228,492 | $ | 123 | 9,998,446 | $ | 1,000 | $ | 6,026,457 | $ | (5,666,895 | ) | $ | (362,755 | ) | $ | (2,033 | ) | ||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | (451,252 | ) | - | (451,252 | ) | ||||||||||||||||||||||||||||
| Non-controlling interest | - | - | - | - | - | - | - | - | (4,767 | ) | (4,767 | ) | ||||||||||||||||||||||||||||
| Balance, March 31, 2023 | 371,715 | $ | 37 | 1,228,492 | $ | 123 | 9,998,446 | $ | 1,000 | $ | 6,026,457 | $ | (6,118,147 | ) | $ | (367,522 | ) | $ | (458,052 | ) |
The accompanying notes are an integral part of
these unaudited condensed consolidated financial statements.
| VSEE LAB, INC. | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023 (UNAUDITED) | ||||||||
| For the Three Months Ended March 31, | ||||||||
| 2024 | 2023 | |||||||
| Net income (loss) | $ | 29,169 | $ | (456,019 | ) | |||
| Adjustments to reconcile net income (loss) to net cash used by operating activities: | ||||||||
| Amortization of discount on note payable | 7,000 | 25,386 | ||||||
| Change in fair value on embedded derivative | - | (26,069 | ) | |||||
| Provision for bad debt | 9,201 | 18,308 | ||||||
| Depreciation expense | 618 | 47 | ||||||
| Changes in working capital requirements: | ||||||||
| Accounts receivable | (8,116 | ) | (92,933 | ) | ||||
| Prepaids and other current assets | (22,405 | ) | 16,150 | |||||
| Deferred tax asset | - | (182,841 | ) | |||||
| Accounts payable and accrued liabilities | (4,896 | ) | 408,549 | |||||
| Deferred revenue | 569,003 | (129,418 | ) | |||||
| Due to related party | (288 | ) | 65,524 | |||||
| Net cash from operating activities | 579,286 | (353,316 | ) | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchase of fixed assets | (8,740 | ) | (1,690 | ) | ||||
| Net cash from financing activities | (8,740 | ) | (1,690 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from note payable | - | 200,000 | ||||||
| Proceeds from loan payable, related party | - | 120,000 | ||||||
| Net cash from financing activities | - | 320,000 | ||||||
| NET CHANGE IN CASH AND CASH EQUIVALENTS | 570,546 | (35,006 | ) | |||||
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 118,734 | 230,664 | ||||||
| CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 689,280 | $ | 195,658 | ||||
| Supplemental disclosure of cash flow information | ||||||||
| Cash paid for interest expense | $ | - | $ | - | ||||
| Cash paid for income taxes | $ | - | $ | - |
The accompanying notes are an integral part of
these unaudited condensed consolidated financial statements.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
VSee Lab, Inc. was incorporated
on December 23, 2010 under the laws of the State of Delaware. ThisAmericanDoc, Inc. ("TAD"), a majority owned subsidiary,
was incorporated on December 27, 2016, in the State of Delaware. VSee Lab, Inc. and TAD (collectively, the "Company",
"VSee") are one of the leading providers of virtual healthcare platform services with a focus on high quality, lower costs,
and improved outcomes around the world with its integrated platform. The Company is committed to creating a telemedicine experience that's
as simple and accessible as shopping online by providing an advanced, no code, low code telemedicine platform to integrate seamlessly
across channels, other existing platforms, and healthcare devices for any virtual care delivery model. The Company is a health services
technology company that is responding to the need for rapid, effective system integration within healthcare. The Company operates as a
single operating and reportable segment.
Basis of Presentation and Consolidation
The accompanying condensed
consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the
United States ("U.S. GAAP"). Certain information or footnote disclosures normally included in financial statements prepared
in accordance with U.S. GAAP have been condensed or omitted, pursuant to the rules and regulations of the Securities and Exchange
Commission ("SEC") for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary
for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying
unaudited condensed consolidated financial statements include all adjustments, consisting of a normal recurring nature, which are necessary
for a fair presentation of the financial position, operating results and cash flows for the periods presented.
The condensed consolidated
financial statements include the accounts of VSee Lab, Inc. and its 53.8% partially owned subsidiary, TAD. The accompanying condensed
consolidated financial statements reflect adjustments (including normal, recurring adjustments) necessary to present fairly the financial
position of the Company as of March 31, 2024, its results of operations, changes in stockholders' deficit, and statements of cash
flows for the three months ended March 31, 2024 and 2023, in conformity with U.S. GAAP.
The preparation of the Company's
condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect
the amounts stated in the condensed consolidated financial statements and accompanying notes. These judgments, estimates, and assumptions
are used for, but not limited to, the determination of revenue recognition, allowance for doubtful accounts, and income taxes.
The Company bases its estimates
and judgments on historical experience and on various other assumptions that it believes are reasonable under the circumstances. However,
future events are subject to change and best estimates and judgments routinely require adjustment. Actual results could differ from those
Income taxes are accounted
for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable
to differences between the financial statement carrying amounts of existing assets and liabilities and the respective tax basis and operating
loss, capital loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred
tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
The Company recognizes the
effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are
measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected
in the period in which the change in judgment occurs. The Company records interest and penalties related to unrecognized tax benefits
as a component of general and administrative expenses. The Company's federal tax return and any state tax returns are not currently
The Company has adopted Accounting
Standards Codification ("ASC") 740-10, Accounting for Income Taxes, which requires an asset and liability approach
to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually from differences
between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future
based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation
allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.
The Company recognizes revenue
in accordance with Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic
606) ("ASC 606"). ASC 606 establishes a principle for recognizing revenue upon the transfer of promised goods or services
to customers, in an amount that reflects the expected consideration received in exchange for those goods or services. The core principle
of ASC 606 is to recognize revenue to depict the transfer of promised goods or services to clients in an amount that reflects the consideration
the entity expects to be entitled in exchange for those goods or services.
The Company determines revenue
recognition in accordance with ASC 606, through the following five steps:
1) Identify the contract with a customer
The Company considers the
terms and conditions of its contracts and the Company's customary business practices in identifying its contracts under ASC 606.
The Company determines it has a contract with a customer when the contract has been approved by both parties, it can identify each party's
rights regarding the services to be transferred and the payment terms for the services, it has determined the customer to have the ability
and intent to pay, and the contract has commercial substance. The Company applies judgment in determining the customer's ability
and intent to pay, which is based on a variety of factors, including the customer's payment history or, in the case of a new customer,
credit and financial information pertaining to the customer.
Contractual terms for subscription
services are typically 12 months. Contracts are cancellable with a 30-day notice period and customers are billed in annual, quarterly,
or monthly installments in advance of the service period of the subscription. The Company is not required to refund any prorated prepayment
fees invoiced to cover services that were provided.
2) Identify the performance obligations in
Performance obligations promised
in a contract are identified based on the services that will be transferred to the customer that are both capable of being distinct, whereby
the customer can benefit from the service either on its own or together with other resources that are readily available, and are distinct
in the context of the contract, whereby the transfer of the services is separately identifiable from other promises in the contract. The
Company's contracts typically contain cancellation clauses with advance notice; therefore, the Company does not believe that they
have any material outstanding commitments for future revenues beyond one year from the end of a reporting period.
The Company treats each subscription
to a specific module as a distinct performance obligation because each module is capable of being distinct as the customer can benefit
from the subscription to each module on its own and each subscription can be sold standalone.