| Related Party |
Note
10 Related Party
Related
Party Transactions by iDoc
For
accounting purposes, it was treated that the Company acquired and assumed the following related party transactions incurred by iDoc due
to acquisition of iDoc on June 24, 2024.
| (1) | A
related party balance due from the then CEO of iDoc, Imoigele Aisiku, for cash transferred through a company controlled by him. The balance
due from the related party on June 30, 2026, and December 31, 2025, were $315,473 and $304,614 respectively. The transactions and amounts
are unsecured and non-interest-bearing and are not necessarily what third parties would agree to. |
| | (2) | iDoc issued a promissory note on May 15, 2023, with a principal balance of $200,000 from a board member (“Holder”). The note bears no interest and was supposed to mature on May 15, 2026. iDoc shall use the funds solely for the purchase of telepresence robots. The Holder has security rights to eight (8) telepresence robots, from the 13th to 20th, that iDoc deployed. iDoc is required to make payments to the Holder based on eighty percent (80%) of the monthly revenue generated on the eight telepresence robots from the twelfth through the twentieth deployment of the telepresence robots. As of June 30, 2026, and December 31, 2025, the related party promissory note was $141,651, including a fair value adjustment of $58,349. The loan is included in the Related Party Loan Payable disclosure on the condensed consolidated balance sheets. No interest is recognized for the three and six months ending June 30, 2026. The note is currently in default and repayable on demand. | Related
Party Transactions by VSee Health (DHAC)
For
accounting purposes, it was treated that the Company acquired and assumed the following related party transactions incurred by DHAC due
to the reverse merger with DHAC on June 24, 2024 (See Note 13 – Equity).
| (1) | On
November 21, 2023, DHAC entered into a convertible note purchase agreement, pursuant to which an institutional and accredited investor,
the Quantum Investor, subscribed for and purchased, and the Company issued and sold to the Quantum Investor, after the Closing of the
Business Combination on June 25, 2024, and as further amended on July 3, 2024, a 7% original issue discount convertible promissory
note, the Quantum Convertible Note, in the aggregate principal amount of $3,000,000. SCS Capital Partners LLC, a Sponsor affiliate,
owns approximately 40.74% of the Quantum Investor. As of June 30, 2026, and December 31, 2025, $0 and $351,307, respectively
(inclusive of principal plus accrued interest on) of the Quantum Convertible Note was due and payable. |
| (2) | On
June 21, 2024, we entered into a Consulting Services Agreement with SCS, LLC (“SCS”), who is an affiliate of our Sponsor,
pursuant to which we shall pay SCS $12,500 per month for business consulting services and $2,500 per month for access to remote office
space in Boca Raton, Florida. In addition, the Consulting Services Agreement calls for the issuance of $25,000 worth of shares of common
stock at issuance and an additional $25,000 worth of common stock on or about each of the Company’s filings on Form 10-K or Form
10-Q. The agreement shall continue for twelve (12) months and shall automatically continue on a six-month term basis thereafter unless
terminated by either party. During the three months ended June 30, 2026, and 2025, the Company accrued expense amounting to $45,000,
and $60,000, respectively, pertaining to the above-said agreements. The Company has accrued an amount of $100,000 related to the
future common stock issuances as of June 30, 2026, and December 31, 2025. . |
| | (3) | On June 24, 2024, DHAC owed the Sponsor and certain Sponsor affiliates $504,659 in advance to cover working capital needs, which were non-interest bearing due on demand. On June 25, 2024, $47,800 of such advances were repaid in cash. On November 8, 2024, the Sponsor affiliate, SCS and the Company executed a securities purchase agreement whereby certain working capital funds advanced by SCS in the aggregate amount of $405,000 as of December 31, 2024, were converted into 202,500 shares of Common Stock. The Company determined that the partial settlement of the working capital advances represented a troubled debt restructuring, as the Company determined it was experiencing financial difficulties and the lender granted a concession through the exchange for shares of Common Stock. Under the troubled debt restructuring accounting, the Company reduced the carrying amount of the working capital funds advances by the fair value of the shares of Common Stock issued ($261,225) and then compared the future undiscounted cash flows associated with the working capital advances to the carrying value. The Company determined an additional $143,775 reduction in the carrying value was necessary to equate it to the future undiscounted cash flows, representing a gain on restructuring. As SCS is a related party to the Company, the restructuring gain was treated as a capital transaction and recorded to additional paid in capital along with the fair value of the shares of common stock issued in the settlement. As of June 30, 2026, and December 31, 2025, $51,900 of advances due to the Sponsor and certain Sponsor affiliates remain due and payable. The Sponsor has no further obligation to fund working capital needs. |
| | (4) | On May 31, 2026, the Company entered into and consummated a Stock Purchase Agreement with Milton Chen, the Company's then co-Chief Executive Officer, Chairman of the Board, and Chief Executive Officer of VSee Lab, pursuant to which the Company sold all of its equity interests in VSee Lab, to Milton Chen and Milton Chen transferred to the Company 2,870,069 shares of the Company's common stock owned by him. See Note 3 – Discontinued Operations for further details. |
*
Related Party Transactions by VSee Labs
As
VSee Lab was divested on May 31, 2026, the following related party transactions are presented solely for historical comparative purposes
and relate to VSee Lab prior to its divestiture. (See Note 3 – Discontinued Operations)
| (1) | During
the year ended December 31, 2022, employees subscribed $127,710 of cash for shares in VSee Lab representing 597,000 common
stock shares in VSee Lab. As a result of the closing of the Business Combination, the shares were issued to the subscribing employees
for total 239,424 shares of common stock in VSee Health, Inc. and as such the payable was reclassified to equity in additional paid in
capital as share were issued. In addition, $210,796 of the related party payable was eliminated at consolidation between iDoc and VSee
Lab. |
| (2) | During
the year ended December 31, 2022, VSee Lab received a loan of $110,000 from the then CEO, Milton Chen, for advanced cash and
paid operating expenses incurred by VSee Lab. On March 29, 2023, VSee Lab revised the terms of the loan to a 10.00% original issue
discount promissory note with a principal balance of $121,000 from Mr. Milton Chen for advanced cash and paid operating expenses on behalf
of VSee Lab. Notes payable issued with a face value higher than the proceeds received are recognized as a debt discount and is amortized
as interest expense via effective interest method over the life of the underlying note payable. The promissory note matured on June 27,
2023. Interest is accrued monthly at the annual fixed rate of 12.00%, with principal and interest due upon maturity. The note has
a default interest rate of 26% from the default date. As of December 31, 2025, the related party promissory note, net of unamortized
debt discount, was $121,000. The Company (as the successor of VSee Lab for accounting purposes) recognized interest expense of $0 and
$7,757 for the three and six months ended June 30, 2026. Accrued interest related to the promissory note was $80,850 as of December 31,
2025 and was included within accounts payable and accrued liabilities on the condensed consolidated balance sheets. On May 31, 2026,
the Company completed the divestiture of VSee Lab. As a result of the divestiture and deconsolidation of VSee Lab, the related party
promissory note and related accrued interest were eliminated from the Company's consolidated financial statements as of June 30, 2026. |
| (3) | On
March 29, 2023, VSee Lab received a 10.00% original issue discount promissory note with a principal balance of $132,000 from the
then CEO, Milton Chen, for advanced cash and paid operating expenses on behalf of VSee Lab. Notes payable issued with a face value
higher than the proceeds received are recognized as a debt discount and amortized via effective interest method as interest expense over
the life of the underlying note payable. The promissory note matured on June 27, 2023. Interest is accrued monthly at the annual
fixed rate of 12.00%, with principal and interest due upon maturity. The note has a default interest rate of 26% from the default date.
As of December 31, 2025, the related party promissory note net of unamortized debt discount was $132,000. The Company (as the successor
of VSee Lab for accounting purposes) recognized interest expense of $0 and $8,642 for the three and six months ended June 30, 2026. The
Company (as the successor of VSee Lab for accounting purposes) had accrued interest of $89,760 as of December 31, 2025, which was included
within accounts payable and accrued liabilities on the condensed consolidated balance sheets. On May 31, 2026, the Company completed
the divestiture of VSee Lab. As a result of the divestiture and deconsolidation of VSee Lab, the related party promissory note and related
accrued interest were eliminated from the Company's consolidated financial statements as of June 30, 2026. |
| (4) | On
December 26, 2023, VSee Lab received a 10.00% original issue discount promissory note with a principal balance of $77,000 from the
then CEO, Milton Chen, for advanced cash and paid operating expenses on behalf of the Company. Notes payable issued with a face
value higher than the proceeds received are recognized as a debt discount and amortized via effective interest method as interest expense
over the life of the underlying note payable. The promissory note matured on March 28, 2024. Interest is accrued monthly at
the annual fixed rate of 12.00%, with principal and interest due upon maturity. The note has a default interest rate of 26% from the
default date. As of December 31, 2025, the related party promissory note was $70,000. The Company (as the successor of VSee Lab for accounting
purposes) recognized interest expense of $0 and $4,936 for the three and six months ended June 30, 2026. The Company (as the successor
of VSee Lab for accounting purposes) had accrued interest of $37,345 as of December 31, 2025, which was included within accounts payable
and accrued liabilities on the condensed consolidated balance sheets. On May 31, 2026, the Company completed the divestiture of VSee
Lab. As a result of the divestiture and deconsolidation of VSee Lab, the related party promissory note and related accrued interest were
eliminated from the Company's consolidated financial statements as of June 30, 2026. |
|