VSee Health Takes On Toxic $336K Convertible Note at a 75% Market Discount
VSEE is trading near its 52-week low of $0.067 (10% above the low) on elevated volume (15× avg).
Summary
VSee Health disclosed a new $336,000 convertible note with a 75% market discount conversion feature, adding to a string of distressed financings. The terms are highly dilutive and include mandatory cash sweep provisions, worsening the company's already precarious financial position.
Key Events · Financing and Capital Events · VSEE
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Toxic Convertible Note Issued
On June 30, 2026, VSee Health issued a $336,000 unsecured convertible note to Labrys Fund II, with net proceeds of ~$291,000 after OID and fees. The note carries a 12% one-time interest charge ($40,320) and converts at 75% of the lowest closing bid over the prior 10 trading days.
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Aggressive Conversion Terms
The conversion price floats at a 75% discount to market, with a floor at par value. A Dilutive Issuance clause resets the conversion price to any lower effective price in future financings, while an Exchange Cap limits conversions to 6M shares without shareholder approval.
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Mandatory Cash Sweep
The holder can demand immediate repayment of up to 50% of any cash proceeds the company receives from any source, including customer payments, equity or debt issuances, or asset sales.
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Amortization Schedule Adds Pressure
The note requires cash amortization payments starting December 30, 2026: $188,160, then five monthly payments of $31,360, with the balance due June 30, 2027. Total required payments equal $376,320.
Analysis · VSEE · Industrial Applications And Services
Already under a going-concern warning and facing a recent default notice, VSee Health has accepted a highly dilutive convertible note from Labrys Fund II. The note carries a 75% discount to the lowest 10-day closing bid, a 12% one-time interest charge, and an original issue discount, yielding net proceeds of only ~$291,000. Its conversion price can reset downward on any future dilutive issuance, and the holder can demand repayment from 50% of any cash the company receives. With the stock at $0.0734, conversion could massively dilute existing shareholders. The amortization schedule requires $188,160 by December 2026, adding immediate cash strain. This is desperation financing that signals severe liquidity distress and a willingness to accept deeply punitive terms.
At the time of this filing, VSEE was trading at $0.07 on NASDAQ in the Industrial Applications And Services sector, with a market capitalization of approximately $4.4M. The 52-week trading range was $0.07 to $2.52. This filing was assessed with negative market sentiment and an importance score of 9 out of 10.