- Revenue increased to a record $24.9 million, up 127% from the same year-ago period
- 24% sequential improvement in Adjusted EBITDA versus prior quarter
- 93% of Q3 2021 revenue generated by subscriptions, up from 61% in the same year-ago period
- Total telehealth order volume grew 153% to 232,293
NEW YORK, Nov. 10, 2021 (GLOBE NEWSWIRE) -- LifeMD, Inc. (NASDAQ: LFMD), a leading direct-to-patient telehealth company, reported results for the third quarter ended September 30, 2021. All figure comparisons are to the same year-ago quarter unless otherwise noted. Management will host a conference call today at 5:00 p.m. Eastern time to discuss the results.
Q3 Financial Highlights
- Record revenue of $24.9 million, up 127%
- 93% of revenue generated by subscriptions, up from 61%
- Gross profit totaled $19.9 million, or 80% of net revenues, up 113%
- Adjusted EBITDA of $(9.0) million, a 24% sequential improvement versus the prior quarter (see definition of this non-GAAP financial measure and reconciliation to GAAP, below)
- Adjusted EPS of $(0.36), a 25% sequential improvement versus the prior quarter (see definition of this non-GAAP financial measure and reconciliation to GAAP, below)
Q3 Operational Highlights
- Achieved significant leverage improvement in marketing investment expenses, reducing marketing spend as a percentage of revenue to 81% versus 100% in the prior quarter, with continued leverage expected.
- Total unique patients and customers served nationwide surpassed 427,000 during the quarter, up from over 360,000 in the prior quarter.
- Telemedicine orders increased 153% to approximately 232,000.
- Appointed seasoned investor and private equity professional Naveen Bhatia to its Board of Directors. Most notably, Mr. Bhatia served as Senior Managing Director in the Tactical Opportunities group of Blackstone for nearly a decade and as director of numerous public and private companies.
Subsequent Events
- Completed a public offering of 3,833,334 shares of its common stock and 1,400,000 shares of its 8.875% Series A Cumulative Perpetual Preferred Stock raising approximately $55 million in net proceeds.
- Announced transformational launch of our 50-state Virtual Primary Care business, which we expect to drive increased satisfaction with our existing patients and open the door to many new treatment areas for LifeMD.
Key Performance Metrics
| ($ in 000s) | Three Months Ended September 30 | Y-o-Y | ||||||||
| Key Performance Metrics | 2021 | 2020 | % Growth | |||||||
| Revenue | ||||||||||
| Telehealth | $ | 18,541 | $ | 9,438 | 96 | % | ||||
| WorkSimpli | $ | 6,406 | $ | 1,568 | 309 | % | ||||
| Total Revenue | $ | 24,947 | $ | 11,006 | 127 | % | ||||
| Subscription Revenue as % of Total | 93 | % | 61 | % | 52 | % | ||||
| Platform Contribution | $ | 17,478 | $ | 8,136 | 115 | % | ||||
| Telehealth Volume | ||||||||||
| Total Telehealth Orders | 232,293 | 91,955 | 153 | % | ||||||
| WorkSimpli | ||||||||||
| Active Subscribers | 139,248 | 35,240 | 295 | % | ||||||
Management Commentary
“Q3 was an especially strong quarter for our business. Not only did we experience record revenue of $24.9 million supported by record demand for our telehealth products and services, but we demonstrated the early stages of our ability to enhance our profitability while growing our top-line aggressively. I am especially proud of our team’s ability to drive meaningful sequential improvement in our Adjusted EBITDA and expect these sequential improvements to continue as we push toward achieving our goal of Adjusted EBITDA break-even by the fourth quarter of 2022,” said Justin Schreiber, CEO of LifeMD. “Additionally, I, along with the entire team, am extremely excited about the recently announced launch of Virtual Primary Care which we believe is a game-changing step in the evolution of our company as we continue to become a disruptive force in healthcare. We expect this launch to not only diversify and strengthen our telehealth offering but also to drive meaningful long-term improvements in our already strong unit economics and retention, all while taking the holistic care we provide patient customers to an entirely new level.”
LifeMD CFO Marc Benathen, commented: “As we’ve committed to previously, we remain laser-focused on not only aggressively growing our top-line, but also scaling with gradually improving profitability. We began to demonstrate our ability to execute upon that commitment this quarter by delivering a 24% sequential improvement in Adjusted EBITDA driven by strong retention metrics in our telehealth business and further optimization of our media spend. At the same time, we grew our revenue by 127% versus prior year. Following the quarter end, we successfully completed an over-subscribed offering of Preferred and Common Stock which has put LifeMD in its strongest capital position ever and we believe can capitalize LifeMD through profitability while continuing to invest in our aggressive growth. We reiterate our expectation of achieving Adjusted EBITDA break-even by the fourth quarter of 2022.”
Q3 2021 Financial Summary
- Revenue increased 127% to a record $24.9 million from $11.0 million in the same year-ago quarter. The WorkSimpli subsidiary, which operates PDFSimpli, an online software-as-a-service (SaaS) platform, increased 309% to $6.4 million.
- Gross profit increased by 113% to $19.9 million, compared to $9.3 million in the same year-ago quarter. Gross margin was 80% as compared to 85% in the year-ago quarter, primarily due to product sales mix and one-time, non-cash write-off of legacy product deposits.
- Platform Contribution, a non-GAAP financial measure, totaled $17.5 million, compared to $8.1 million in the same year-ago period (see definition of this non-GAAP financial measure and reconciliation to GAAP, below).
- Operating expense in the third quarter of 2021 was $32.4 million, up from $29.9 million in the same year-ago quarter with operating leverage improved by 2,300 basis points versus the prior quarter due to significant leverage realized in selling and marketing expense, general and administrative expenses and strong retention metrics. The increase in expense versus prior year was primarily due to increases in selling and marketing expenses of $9.8 million in the quarter, other operating expenses of $272,000, customer services expenses of $275,000, and development costs of approximately $13,000. General and administrative expenses decreased $7.7 million during the quarter driven by a $13.3 million decrease in stock-based compensation expense and included non-cash expenses for stock-based compensation and amortization expenses of $4.8 million.
- Net loss attributable to common stockholders for the third quarter of 2021 was $14.4 million or $(0.54) per share, as compared to a net loss attributable to common stockholders of $24.2 million or $(1.65) per share in the third quarter of 2020.
- Excluding $3.1 million related to stock-based compensation expense, $1.6 million related to the non-cash amortization of debt discount, $0.1 million related to depreciation and amortization expense and $0.2 million related to financing transaction expense, Adjusted EPS, a non-GAAP basis, totaled a loss of $(0.36) per share as compared to a loss of $(0.52) in the same year-ago period. Adjusted EPS improved 25% sequentially versus the prior quarter (see definition of this non-GAAP financial measure and reconciliation to GAAP, below).
- Adjusted EBITDA, a non-GAAP financial measure, totaled a loss of $9.0 million, compared to an adjusted EBITDA loss of $3.8 million in the same year-ago period. Adjusted EBITDA improved 24% sequentially versus the prior quarter (see definition of this non-GAAP financial measure and reconciliation to GAAP, below).
2021 Financial Outlook
The company reiterates its expectation for revenue in the full year of 2021 to total between $90 million and $100 million, which would represent growth of between 141% and 168% over the prior year.
Conference Call
LifeMD’s management will host a conference call today, November 10, 2021 at 5:00 pm ET (2:00 pm PT) to discuss the company’s financial results and outlook, followed by a question-and-answer period. Details for the call are as follows:
Toll-free dial-in number: 1-877-705-6003
International dial-in number: 1-201-493-6725
Conference ID: 13723280
Webcast: Click here
The conference call will be webcast live and available for replay via a link provided in the Investors section of the company’s website at lifemd.com. Please call the conference telephone number five minutes prior to the start time. An operator will register your name and organization.
Listeners are encouraged to review the company's periodic reports filed with the U.S. Securities and Exchange Commission, including the discussion of risk factors, historical results of operations and financial condition as provided in these reports.
About LifeMD
LifeMD, Inc. is a rapidly growing direct-to-patient telehealth company that offers cash-pay virtual medical care across all 50 states. LifeMD's telemedicine platform enables virtual access to affordable and convenient medical treatment from licensed providers and, when appropriate, prescription medications and over-the-counter products delivered directly to the patient's home. To learn more, go to LifeMD.com.
Cautionary Note Regarding Forward Looking Statements
This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended; Section 21E of the Securities Exchange Act of 1934, as amended; and the safe harbor provision of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements contained in this news release may be identified by the use of words such as: “believe,” “expect,” “anticipate,” “project,” “should,” “plan,” “will,” “may,” “intend,” “estimate,” “predict,” “continue,” and “potential,” or, in each case, their negative or other variations or comparable terminology referencing future periods. Examples of forward-looking statements include, but are not limited to, statements regarding our financial outlook and guidance, short and long-term business performance and operations, future revenues and earnings, regulatory developments, legal events or outcomes, ability to comply with complex and evolving regulations, market conditions and trends, new or expanded products and offerings, growth strategies, underlying assumptions, and the effects of any of the foregoing on our future results of operations or financial condition.
Forward-looking statements are not historical facts and are not assurances of future performance. Rather, these statements are based on our current expectations, beliefs, and assumptions regarding future plans and strategies, projections, anticipated and unanticipated events and trends, the economy, and other future conditions, including the impact of any of the aforementioned on our future business. As forward-looking statements relate to the future, they are subject to inherent risk, uncertainties, and changes in circumstances and assumptions that are difficult to predict, including some of which are out of our control. Consequently, our actual results, performance, and financial condition may differ materially from those indicated in the forward-looking statements. These risks and uncertainties include, but are not limited to, “Risk Factors” identified in our filings with the Securities and Exchange Commission, including, but not limited to, our most recently filed Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and any amendments thereto. Even if our actual results, performance, or financial condition are consistent with forward-looking statements contained in such filings, they may not be indicative of our actual results, performance, or financial condition in subsequent periods.
Any forward-looking statement made in the news release is based on information currently available to us as of the date on which this release is made. We undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as may be required under applicable law or regulation.
Company Contact
LifeMD, Inc.
Marc Benathen, CFO
Email Contact
Investor Relations Contacts
Ashley Robinson
LifeSci Advisors, LLC
arr@lifesciadvisors.com
| LIFEMD, INC. | |||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
| September 30, 2021 | December 31, 2020 | ||||||
| ASSETS | |||||||
| Current Assets | |||||||
| Cash | $ | 9,446,973 | $ | 9,179,075 | |||
| Accounts receivable, net | 1,497,187 | 648,421 | |||||
| Product deposit | 911,948 | 816,765 | |||||
| Inventory, net | 1,587,094 | 1,264,258 | |||||
| Other current assets | 689,355 | 154,876 | |||||
| Total Current Assets | 14,132,557 | 12,063,395 | |||||
| Non-current Assets | |||||||
| Right of use asset, net | 200,670 | 274,437 | |||||
| Capitalized software, net | 1,929,564 | 375,983 | |||||
| Intangible assets, net | 21,614 | 339,840 | |||||
| Equipment, net | 67,240 | - | |||||
| Total Non-current Assets | 2,219,088 | 990,260 | |||||
| Total Assets | $ | 16,351,645 | $ | 13,053,655 | |||
| LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' DEFICIT | |||||||
| Current Liabilities | |||||||
| Accounts payable and accrued expenses | $ | 18,377,877 | $ | 11,794,084 | |||
| Notes payable, net | 63,400 | 779,132 | |||||
| Deferred revenue | 1,435,981 | 916,880 | |||||
| Total Current Liabilities | 19,877,258 | 13,490,096 | |||||
| Long-term Liabilities | |||||||
| Long-term debt, net | 10,819,527 | - | |||||
| Lease liability | 217,238 | 285,323 | |||||
| Contingent consideration on purchase of WorkSimpli | 100,000 | 100,000 | |||||
| Total Liabilities | 31,014,023 | 13,875,419 | |||||
| Commitments and Contingencies | |||||||
| Mezzanine Equity | |||||||
| Preferred Stock, $0.0001 par value; 5,000,000 shares authorized | |||||||
| Series B Preferred Stock, $0.0001 par value; 5,000 shares authorized, 3,500 and 3,500 shares issued and outstanding, liquidation value approximately, $1,142 and $1,045 per share as of September 30, 2021 and December 31, 2020, respectively | 3,996,137 | 3,655,822 | |||||
| Stockholders’ Deficit | |||||||
| Series A Preferred Stock, $0.0001 par value; 1,610,000 shares authorized, zero shares issued and outstanding as of September 30, 2021 and December 31, 2020 | - | - | |||||
| Common stock, $0.01 par value; 100,000,000 shares authorized, 26,862,975 and 23,433,663 shares issued, 26,759,935 and 23,330,623 outstanding as of September 30, 2021 and December 31, 2020, respectively | 268,630 | 234,337 | |||||
| Additional paid-in capital | 105,275,494 | 77,779,370 | |||||
| Accumulated deficit | (122,938,363 | ) | (80,151,905 | ) | |||
| (17,394,239 | ) | (2,138,198 | ) | ||||
| Treasury stock, 103,040 and 103,040 shares, at cost | (163,701 | ) | (163,701 | ) | |||
| Total LifeMD, Inc. Stockholders’ Deficit | (17,557,940 | ) | (2,301,899 | ) | |||
| Non-controlling interest | (1,100,575 | ) | (2,175,687 | ) | |||
| Total Stockholders’ Deficit | (18,658,515 | ) | (4,477,586 | ) | |||
| Total Liabilities, Mezzanine Equity and Stockholders’ Deficit | $ | 16,351,645 | $ | 13,053,655 | |||
| LIFEMD, INC. | |||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||
| Net Revenues | |||||||||||||||
| Teleheatlth revenue | $ | 18,540,897 | $ | 9,438,136 | $ | 47,623,822 | $ | 20,263,750 | |||||||
| WorkSimpli revenue | 6,406,302 | 1,567,627 | 17,835,100 | 4,136,608 | |||||||||||
| Total Revenues, net | 24,947,199 | 11,005,763 | 65,458,922 | 24,400,358 | |||||||||||
| Cost of Telehealth revenue | 4,969,306 | 1,601,920 | 12,113,336 | 4,718,143 | |||||||||||
| Cost of WorkSimpli revenue | 127,181 | 73,662 | 314,428 | 204,241 | |||||||||||
| Cost of revenues | 5,096,487 | 1,675,582 | 12,427,764 | 4,922,384 | |||||||||||
| Gross Profit | 19,850,712 | 9,330,181 | 53,031,158 | 19,477,974 | |||||||||||
| Expenses | |||||||||||||||
| Selling and marketing expenses | 20,293,935 | 10,528,833 | 61,372,815 | 21,669,046 | |||||||||||
| General and administrative expenses | 10,695,663 | 18,441,756 | 28,194,305 | 21,868,097 | |||||||||||
| Other operating expenses | 815,378 | 542,965 | 2,390,694 | 654,947 | |||||||||||
| Customer service expenses | 505,880 | 230,788 | 1,274,392 | 488,455 | |||||||||||
| Development costs | 131,160 | 118,346 | 435,356 | 288,813 | |||||||||||
| Total expenses | 32,442,016 | 29,862,688 | 93,667,562 | 44,969,358 | |||||||||||
| Operating Loss | (12,591,304 | ) | (20,532,507 | ) | (40,636,404 | ) | (25,491,384 | ) | |||||||
| Other Income (Expenses) | |||||||||||||||
| Interest expense, net | (1,824,777 | ) | (291,096 | ) | (2,866,150 | ) | (1,313,010 | ) | |||||||
| Gain on debt forgiveness | - | - | 184,914 | - | |||||||||||
| (1,824,777 | ) | (291,096 | ) | (2,681,236 | ) | (1,313,010 | ) | ||||||||
| Net Loss before provision for income taxes | (14,416,081 | ) | (20,823,603 | ) | (43,317,640 | ) | (26,804,394 | ) | |||||||
| Provision for income taxes | - | - | - | - | |||||||||||
| Net Loss | (14,416,081 | ) | (20,823,603 | ) | (43,317,640 | ) | (26,804,394 | ) | |||||||
| Net loss attributable to noncontrolling interests | (62,706 | ) | (201,233 | ) | (531,182 | ) | (408,180 | ) | |||||||
| Net loss attributable to LifeMD, Inc. | $ | (14,353,375 | ) | $ | (20,622,370 | ) | $ | (42,786,458 | ) | $ | (26,396,214 | ) | |||
| Deemed distribution to holders of common and Series B Preferred stock | - | (3,573,636 | ) | - | (4,716,021 | ) | |||||||||
| Net loss attributable to LifeMD, Inc. common stockholders | $ | (14,353,375 | ) | $ | (24,196,006 | ) | $ | (42,786,458 | ) | $ | (31,112,235 | ) | |||
| Basic loss per share attributable to LifeMD, Inc. common stockholders | $ | (0.54 | ) | $ | (1.65 | ) | $ | (1.66 | ) | $ | (2.47 | ) | |||
| Diluted loss per share attributable to LifeMD, Inc. common stockholders | $ | (0.54 | ) | $ | (1.65 | ) | $ | (1.66 | ) | $ | (2.47 | ) | |||
| Weighted average number of common shares outstanding: | |||||||||||||||
| Basic | 26,684,591 | 14,674,693 | 25,820,478 | 12,581,401 | |||||||||||
| Diluted | 26,684,591 | 14,674,693 | 25,820,478 | 12,581,401 | |||||||||||
| Adjusted EPS | $ | (0.36 | ) | $ | (0.52 | ) | $ | (1.20 | ) | $ | (1.04 | ) | |||
| LIFEMD, INC. | |||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||||||
| Net Loss | $ | (14,416,081 | ) | $ | (20,823,603 | ) | $ | (43,317,640 | ) | $ | (26,804,394 | ) | |||
| Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | |||||||||||||||
| Amortization of debt discount | 1,567,677 | 77,794 | 2,090,236 | 817,118 | |||||||||||
| Amortization of capitalized software | 114,062 | 24,416 | 177,926 | 36,001 | |||||||||||
| Amortization of intangibles | 617 | 83,903 | 340,457 | 251,709 | |||||||||||
| Write-down of inventory | - | - | 57,481 | - | |||||||||||
| Depreciation of fixed assets | 2,865 | - | 2,865 | - | |||||||||||
| Acceleration of debt discount | - | - | - | 500,145 | |||||||||||
| Bad debt expense | - | 58,470 | - | 58,470 | |||||||||||
| Sales return and allowances | - | 211,000 | - | 211,000 | |||||||||||
| Inventory reserves | - | 44,981 | - | 44,981 | |||||||||||
| Gain on forgiveness of debt | - | - | (184,914) | ) | - | ||||||||||
| Operating lease payments | 24,589 | 1,817 | 73,767 | 5,452 | |||||||||||
| Liability to issue shares for services | - | - | - | 32,500 | |||||||||||
| Stock issued for services | - | - | - | 35,200 | |||||||||||
| Stock compensation expense | 3,110,816 | 16,364,258 | 7,983,891 | 16,898,733 | |||||||||||
| Changes in Assets and Liabilities | - | ||||||||||||||
| Accounts receivable | 115,121 | (247,787 | ) | (848,766) | ) | (586,364 | ) | ||||||||
| Product deposit | 479,816 | (812,245 | ) | (95,183) | ) | (943,388 | ) | ||||||||
| Inventory | 27,023 | (1,094,680 | ) | (380,317) | ) | (953,467 | ) | ||||||||
| Other current assets | (242,122 | ) | (41,154) | (534,479) | ) | 72,893 | |||||||||
| Change in operating lease liability | (23,432 | ) | (676 | ) | (68,085) | ) | (1,737) | ||||||||
| Deferred revenue | 54,043 | 108,946 | 519,101 | 303,064 | |||||||||||
| Accounts payable and accrued expenses | 1,765,865 | 1,546,459 | 6,924,110 | 4,426,702 | |||||||||||
| Net cash used in operating activities | (7,419,141 | ) | (4,498,101 | ) | (27,259,550) | ) | (5,595,382) | ||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||||||
| Cash paid for capitalized software costs | (779,160 | ) | (330,586 | ) | (1,731,507) | ) | (330,586) | ||||||||
| Purchase of equipment | (51,989 | ) | - | (70,105) | ) | - | |||||||||
| Purchase of intangible assets | (22,231 | ) | - | (22,231) | ) | - | |||||||||
| Payment to seller for contingent consideration | - | 277,161 | - | - | |||||||||||
| Contingent consideration on business combination paid | - | - | - | (400,000 | ) | ||||||||||
| Net cash used in investing activities | (853,380 | ) | (53,425 | ) | (1,823,843) | ) | (730,586 | ) | |||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||||||
| Cash proceeds from private placement offering, net | - | - | 13,495,270 | - | |||||||||||
| Cash proceeds from Series B Preferred Stock | - | 2,892,500 | - | 2,892,500 | |||||||||||
| Proceeds from convertible notes payable | - | 600,000 | - | 2,350,000 | |||||||||||
| Proceeds from issuance of debt instruments | - | - | 15,000,000 | - | |||||||||||
| Cash proceeds from sale of common stock under ATM | 493,481 | 449,349 | 493,481 | 2,338,349 | |||||||||||
| Cash proceeds from exercise of warrants | 168,610 | 622,763 | 480,609 | 622,763 | |||||||||||
| Cash proceeds from exercise of options | 54,000 | 300,400 | 820,750 | 300,400 | |||||||||||
| Cash proceeds from sale of warrants | - | 25,000 | - | 25,000 | |||||||||||
| Purchase of membership interest of WorkSimpli | - | - | (300,000 | ) | - | ||||||||||
| Distributions to non-controlling interest | (36,000 | ) | - | (108,000 | ) | (121,223 | ) | ||||||||
| Proceeds from notes payable | - | 242,000 | 963,965 | 242,000 | |||||||||||
| Repayment of notes payable | (374,834 | ) | - | (1,494,784 | ) | (2,498,808 | ) | ||||||||
| Debt issuance costs | - | - | - | (15,000 | ) | ||||||||||
| Net cash provided by financing activities | 305,257 | 5,132,012 | 29,351,291 | 6,135,981 | |||||||||||
| Net (decrease) increase in cash | (7,967,264 | ) | 580,486 | 267,898 | (189,987 | ) | |||||||||
| Cash at beginning of period | 17,414,237 | 336,151 | 9,179,075 | 1,106,624 | |||||||||||
| Cash at end of period | $ | 9,446,973 | $ | 916,637 | $ | 9,446,973 | $ | 916,637 | |||||||
| Cash paid for interest | |||||||||||||||
| Cash paid during the period for interest | $ | (23,121 | ) | $ | 243,170 | $ | 120,062 | $ | 592,961 | ||||||
| Non-cash investing and financing activities: | |||||||||||||||
| Cashless exercise of options | $ | - | $ | - | $ | 8,730 | $ | - | |||||||
| Cashless exercise of warrants | $ | - | $ | 49,551 | $ | - | $ | 49,551 | |||||||
| Principal of Paycheck Protection Program loans forgiven | $ | - | $ | - | $ | 184,914 | $ | - | |||||||
| Additional purchase of membership interest in WorkSimpli issued in performance options | $ | - | $ | - | $ | 144,002 | $ | - | |||||||
| Deemed dividend from warrant price adjustments | $ | - | $ | 1,216,021 | $ | - | $ | 1,216,021 | |||||||
| Deemed distribution from warrants issued with Series B Preferred Stock | $ | - | $ | 3,500,000 | $ | - | $ | 3,500,000 | |||||||
| Warrants issued for debt instruments | $ | - | $ | - | $ | 6,270,710 | $ | - | |||||||
| Deemed distribution from down-round provision | $ | - | $ | (1,142,385 | ) | $ | - | $ | - | ||||||
| Stock yet to be issued for capitalized costs | $ | - | $ | - | $ | - | $ | 40,000 | |||||||
| Deemed distribution from down-round provision on unissued shares | $ | - | $ | - | $ | - | $ | 194,022 | |||||||
| Liability to issue common stock | $ | - | $ | 76,348 | $ | - | $ | 76,348 | |||||||
| Shares issued for share liability | $ | - | $ | 1,726,000 | $ | - | $ | - | |||||||
| Debt issuance costs for liability to issue shares | $ | - | $ | - | $ | - | $ | 219,450 | |||||||
| Conversion of convertible notes payable and interest for Series B Preferred Stock | $ | - | $ | 607,500 | $ | - | $ | 607,500 | |||||||
| Stock issued for capitalized costs | $ | - | $ | 12,675 | $ | - | $ | 12,675 | |||||||
About the Use of Non-GAAP Financial Measures:
To supplement our financial information presented in accordance with GAAP, we use Adjusted EBITDA, Adjusted EPS and Platform Contribution as non-GAAP financial measures to clarify and enhance an understanding of past performance. We believe that the presentation of these financial measures enhances an investor’s understanding of our financial performance. We further believe that these financial measures are useful financial metrics to assess our operating performance from period-to-period by excluding certain items that we believe are not representative of our core business and/or reflect discretionary investments. We use certain financial measures for business planning purposes and in measuring our performance relative to that of our competitors.
Adjusted EBITDA is defined as income (loss) attributable to common shareholders before interest, taxes, depreciation, amortization, financing transaction expense, acceleration/amortization of debt discount, inventory valuation, litigation costs and stock-based compensation expense. We have provided below a reconciliation of Adjusted EBITDA to Net (loss) attributable to common shareholders, its most directly comparable GAAP financial measure.
Adjusted EPS is defined as the diluted net loss attributable to LifeMD, Inc common shareholders before stock-based compensation expense, amortization of debt discount, amortization expense and financing transaction expense. We have provided below a reconciliation of Adjusted EPS to Diluted loss per share attributable to LifeMD, Inc common shareholders.
Platform Contribution is defined as operating income (loss) before general and administrative expenses (excluding Payment Processing Fees), selling and marketing expenses and other operating expenses. We consider Platform Contribution an important non-GAAP financial measure which monitors our performance based on the direct variable costs of delivering the products and services we sell across our brands. We believe Platform Contribution is useful to measure whether we are controlling our direct variable costs associated with our platform brands as well as how effectively we retain our providers' patient and customer subscribers.
We believe the above financial measures are commonly used by investors to evaluate our performance and that of our competitors. However, our use of the terms Adjusted EBITDA, Adjusted EPS and Platform Contribution may vary from that of others in our industry. None of Adjusted EBITDA, Adjusted EPS or Platform Contribution should be considered as an alternative to net loss before taxes, net loss, loss per share, operating loss or any other performance measures derived in accordance with GAAP as measures of performance.
| Reconciliation of GAAP Net Loss to Adjusted EBITDA | ||||||||||||||||
| (in whole numbers, unaudited) | ||||||||||||||||
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Net (loss) attributable to common shareholders | $ | (14,353,375 | ) | $ | (24,196,006 | ) | $ | (42,786,458 | ) | $ | (31,112,235 | ) | ||||
| Interest expense (excluding debt discount and acceleration of debt) | 142,415 | 291,096 | 435,598 | 1,313,010 | ||||||||||||
| Depreciation & Amortization Expense | 117,544 | 108,319 | 521,248 | 287,710 | ||||||||||||
| Amortization of debt discount | 1,567,677 | 77,794 | 2,090,236 | 817,118 | ||||||||||||
| Financing transactions expense | 186,682 | - | 1,259,072 | 62,012 | ||||||||||||
| Acceleration of debt discount | - | - | - | 500,145 | ||||||||||||
| Inventory valuation adjustment | - | - | - | 769,378 | ||||||||||||
| Litigation Costs | 64,541 | - | 279,666 | - | ||||||||||||
| Accrued interest on Series B Stock | 114,685 | - | 340,315 | - | ||||||||||||
| Deemed distribution to holders of Series B Preferred stock | - | 3,573,636 | - | 4,716,021 | ||||||||||||
| Stock-based compensation expense | 3,110,816 | 16,364,258 | 7,983,891 | 16,898,733 | ||||||||||||
| Adjusted EBITDA | $ | (9,049,016 | ) | $ | (3,780,903 | ) | $ | (29,876,433 | ) | $ | (5,748,108 | ) | ||||
| Reconciliation of GAAP Diluted Loss per Share Attributable to Common Shareholders to Adjusted EPS | ||||||||||||||||
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Diluted loss per share attributable to LifeMD, Inc. common shareholders | $ | (0.54 | ) | $ | (1.65 | ) | $ | (1.66 | ) | $ | (2.47 | ) | ||||
| Adjustments to Reconcile GAAP Diluted Loss Per Share to Adjusted EPS | ||||||||||||||||
| Stockholders Compensation Expense | 0.12 | 1.12 | 0.31 | 1.34 | ||||||||||||
| Financing Transaction Expense | 0.00 | - | 0.05 | 0.01 | ||||||||||||
| Depreciation & Amortization Expense | 0.00 | 0.01 | 0.02 | 0.02 | ||||||||||||
| Amortization of debt discount | 0.06 | 0.00 | 0.08 | 0.06 | ||||||||||||
| Adjusted EPS | $ | (0.36 | ) | $ | (0.52 | ) | $ | (1.20 | ) | $ | (1.04 | ) | ||||
| Reconciliation of Operating Loss to Platform Contribution | ||||||||||||||||
| (in whole numbers, unaudited) | ||||||||||||||||
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Operating loss | $ | (12,591,304 | ) | $ | (20,532,507 | ) | $ | (40,636,404 | ) | $ | (25,491,384 | ) | ||||
| Selling and marketing expenses | 20,293,935 | 10,528,833 | 61,372,815 | 21,669,046 | ||||||||||||
| General and administrative expenses | 10,695,663 | 18,441,756 | 28,194,305 | 21,868,097 | ||||||||||||
| Other operating expenses | 815,378 | 542,965 | 2,390,694 | 654,947 | ||||||||||||
| Payment Processing Fees | (1,735,205 | ) | (844,566 | ) | (4,225,953 | ) | (1,762,351 | ) | ||||||||
| Platform Contribution | $ | 17,478,467 | $ | 8,136,481 | $ | 47,095,458 | $ | 16,938,355 | ||||||||
