by $85,664, or 30%, lower software and hosting costs from using a lower-cost provider and implementing scheduled server scaling, reducing service cost. The increase was also slightly offset by $2,018, or 8% of lower hardware related cost.
Cost of goods sold for the nine months ended September 30, 2024, increased $286,273, or 19%, over the same period last year. The increase was primarily driven by the acquisition of iDoc at the close of business on June 24, 2024, driving $448,713 or 100%, primarily from compensation expenses. This increase was slightly offset by $162,440, or 11%, reduction in VSee Lab’s cost. The decrease is primarily driven by lower hosting costs of $154,613, or 23% from using a lower-cost provider and implementing scheduled server scaling, reducing service costs. The decrease was also driven $91,871, or 43% lower software costs from lower client utilization. These decreases are slightly offset by higher hardware costs of $69,722, or 111%, driven by increased hardware sales and $14,322, or 2%, of higher compensation costs from higher resource reallocation to support a new client in the current quarter, and slightly offset by cost savings from headcount reduction during the first half of the year.
Operating Expenses
VSee Lab’s operating expenses include all operating costs not included in the cost of goods sold. These costs consist of general and administrative expenses composed primarily of all payroll and payroll-related expenses, professional fees, and other costs related to the administration of its business. iDoc’s operating expenses include all operating costs not included in cost of goods sold. These costs consist of compensation, general and administrative expenses composed primarily of all payroll and payroll- related expenses, professional fees, insurance, software costs, occupancy expenses related to iDoc’s operations, including utilities, depreciation and amortization, and other costs related to the administration of its business.
Operating expenses for the three months ended September 30, 2024, increased by $58,231,719, or 4,668%, over the same period last year. The increase was driven by goodwill impairment charges of $54,984,000, higher general and administrative expenses of $1,945,343 or 865%, resulting from amortization expense of $552,500 and acquisition of iDoc at the close of business on June 24, 2024, driving $673,302 increase, and $637,237 of transaction expenses from the recapitalization and acquisition of DHAC and iDoc, respectively, primarily for professional and advisory services fees.
Operating expenses for the nine months ended September 30, 2024, increased by $58,626,096, or 1,353%, over the same period last year. The increase was driven by goodwill impairment charges of $54,984,000, higher general and administrative expenses of $1,998,102 or 240%, resulting from amortization expense of $552,500 and acquisition of iDoc at the close of business on June 24, 2024, driving $701,067 increase, and $1,587,037 of transaction expenses from the recapitalization and acquisition of DHAC and iDoc, respectively, primarily for professional and advisory services fees.
Other Income (Expense)
Other income during the three months ended September 30, 2024, increased $4,822,484 or 8,323%. The increase was primarily driven by the gain on change in fair value of on the debt and derivative financial instruments of $5,759,235, offset by $195,770 of higher interest expense and loss on extinguishment of $740,979 related to note conversions and shares issued to vendors.
Other income during the nine months ended September 30, 2024, increased $3,386,913 or 6,576%. The increase was primarily driven by the gain on change in fair value of on the debt and derivative financial instruments of $6,193,258, offset by the $1,618,234 initial fair value loss on the Quantum Note, $427,513 of higher interest expense and loss on extinguishment of $740,979 related to note conversions and shares issued to vendors.
Net loss
Net loss for the three months ended September 30, 2024, compared to the three months ended September 30, 2023, increased by $51,652,944 or 52,396%. The increase in the Company’s net loss was driven by goodwill impairment charges of $54,984,000 and loss on extinguishment of $740,979, offset by gain on change in fair value of the debt and derivative financial instruments of $5,759,235.
Net loss for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, increased by $51,101,136 or 5,198%. The increase in the Company’s net loss was driven by goodwill impairment charges of $54,984,000, $1,618,234 initial fair value loss on the Quantum Note and loss on extinguishment of $740,979, offset by gain on change in fair value of the debt and derivative financial instruments of $6,193,258.
