VSee Health to restate prior financial statements due to identified errors

VSee Health, Inc. (NASDAQ:VSEE), a healthcare technology company with a market capitalization of $12.33 million, disclosed Thursday that it will restate previously issued financial statements after identifying multiple errors in financial reports for VSee Lab, Inc. and related entities. The company stated in a press release that these errors affect annual and interim financial statements as of and for the year ended December 31, 2023, as well as several quarterly periods in 2023 and 2024. InvestingPro data shows the company faces significant financial challenges, with a current ratio of 0.37 indicating liquidity concerns.

According to the company, management determined on July 17, in consultation with the board of directors and audit committee, that financial statements for these periods should no longer be relied upon. On August 22, management extended this conclusion to additional quarterly statements. The errors involve several accounting issues, including the failure to accrue for sales and use taxes, incorrect revenue cutoffs, misclassification and recognition of accrued expenses, compensation-related obligations, a commitment fee related to an equity line of credit, and classification of certain equity transactions. These issues emerge amid challenging financial performance, with the stock down 44% over the past six months and revenue of $8.06 million in the last twelve months.

Other errors cited include improper recognition of accrued interest on convertible notes, incorrect grant date fair value for certain options, recognition and measurement of accounts receivable, and errors in income tax-related balances.

The company said it will restate the affected financial statements in its upcoming annual report for the year ended December 31, 2024. Management also concluded that material weaknesses exist in the company’s internal control over financial reporting and that disclosure controls and procedures were not effective during the affected periods. These findings will be described in detail in the annual report.

VSee Health has discussed the matter with its independent registered public accounting firm, WithumSmith+Brown, PC.

This information is based on a statement released by VSee Health in a filing with the Securities and Exchange Commission.

In other recent news, VSee Health, Inc. is facing significant challenges and opportunities. The company has requested a hearing to appeal a Nasdaq decision to delist its common stock due to non-compliance with filing requirements, as it has not submitted its annual and quarterly reports for the periods ending December 31, 2024, and March 31, 2025, respectively. Despite this, VSee Health has also been selected to support a National Institutes of Health-funded Phase 3 clinical trial for stroke recovery telerehabilitation, involving 29 hospitals and 202 patients. Additionally, the company has launched an AI-powered doctor notes solution, which has reportedly reduced physician charting time by 93% at Tele911. However, the Nasdaq Listing Qualifications Department has denied VSee Health’s request to maintain its listing status, further complicating its financial standing. The company has been given a 60-day window to propose a plan to regain compliance, with the potential for an extension until October 13, 2025, if accepted.

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