- Total revenues increased 38% year-over-year to $53.4 million with telehealth revenue up 65%
- Record gross margin of 90.6%, up 300 basis points from the year-ago period
- Adjusted EBITDA increased 33% to $3.7 million
- Telehealth adjusted EBITDA of $2.5 million, a 200% sequential increase versus the second quarter
- Cash of $37.6 million as of September 30, 2024
- Generated $6.2 million of cash flow from operations in the third quarter and positive net cash flow in each of the last four quarters
Conference call begins at 4:30 p.m. Eastern time today
NEW YORK, Nov. 07, 2024 (GLOBE NEWSWIRE) -- LifeMD, Inc. (Nasdaq: LFMD), a leading provider of virtual primary care services, today reported financial results for the three and nine months ended September 30, 2024.
Management Commentary
“LifeMD’s core telehealth business had another very strong quarter, led by outperformance in both our Rex® MD and virtual primary care verticals. We not only are very pleased with our tremendous growth rate, but also with the exponential increase in sequential profitability of our telehealth business,” said Justin Schreiber, Chairman and CEO of LifeMD. “As we pursue our vision to become the leading provider of direct-to-consumer virtual healthcare services, we continue to make significant investments in our technology platform, affiliated medical group and differentiated products that help patients live healthier and happier lives. In the third quarter, we launched in-home laboratory services, a safe and efficacious non-GLP-1 weight management therapy, and our men’s hormonal therapy offering under our Rex MD brand. We also made progress with our 6S Framework wellness program, including the launch of a 50-state nutrition counseling program. I am particularly excited about the recent opening of our national, vertically integrated pharmacy, which will be accretive in 2025 and enables LifeMD to become a fully integrated, end-to-end provider of virtual healthcare services. These advancements continue to underscore our commitment to virtual healthcare market leadership across a range of categories and capabilities.”
“LifeMD had a strong quarter with top- and bottom-line growth led by our core telehealth business. Not only did this business achieve 65% year-over-year growth on a standalone basis and patient subscriber base grew to approximately 269,000 at quarter-end, but telehealth adjusted EBITDA increased 200% sequentially to $2.5 million. Although WorkSimpli’s financial results continued to be pressured, the business returned to sequential subscriber growth and is still forecasted to reach peak monthly profitability by year-end,” commented Marc Benathen, Chief Financial Officer of LifeMD. “Cash flow continued to increase and remained exceptionally strong. For the third quarter, LifeMD generated over $6 million of operating cash flow and bolstered its cash balance by approximately $2 million to $37.6 million as of September 30th. Our strong unit economics, consistent cash flow generation and strengthened balance sheet continue to support our ability to optimize our corporate investment needs.”
Third Quarter Financial Highlights
All comparisons are with the third quarter of 2023.
- Total revenues increased 38% to $53.4 million with telehealth revenue up 65%.
- Telehealth active subscribers increased 30% to approximately 269,000 at quarter-end.
- WorkSimpli active subscribers decreased 6% to approximately 161,000 at quarter-end but grew sequentially by approximately 2,000 subscribers.
- Gross margin expanded to 90.6%, up from 87.6%.
- GAAP net loss was $5.9 million or $0.14 per share, compared with $6.9 million or $0.20 per share.
- Adjusted EBITDA was $3.7 million compared with $2.8 million (see definition below of this non-GAAP financial measure and reconciliation to GAAP).
- The telehealth business achieved adjusted EBITDA profitability of $2.5 million compared with a loss of $2.3 million (see definition below of this non-GAAP financial measure and reconciliation to GAAP).
- Adjusted diluted EPS was $0.09 compared with $0.08 (see definition below of this non-GAAP financial measure and reconciliation to GAAP).
- Cash and cash equivalents were $37.6 million as of September 30, 2024.
Third Quarter Key Performance Metrics
| ($ in 000s) | Three Months Ended Sept 30, | Y-o-Y | |||||
| Key Performance Metrics | 2024 | 2023 | % Growth | ||||
| Revenue | |||||||
| Telehealth | $ | 40,276 | $ | 24,343 | 65% | ||
| WorkSimpli | $ | 13,118 | $ | 14,271 | -8% | ||
| Total Revenue | $ | 53,393 | $ | 38,614 | 38% | ||
| Active Subscribers | |||||||
| Telehealth Active Subscribers | 268,739 | 206,536 | 30% | ||||
| WorkSimpli Active Subscribers | 160,864 | 170,388 | -6% | ||||
| Total Active Subscribers | 429,603 | 376,924 | 14% | ||||
Financial Guidance
For the fourth quarter of 2024, the Company expects:
- Total revenues in the range of $57 million to $58 million, with telehealth revenue in the range of $43 million to $44 million and WorkSimpli revenue of approximately $14 million.
- Adjusted EBITDA in the range of $6.5 million to $7.0 million, with telehealth adjusted EBITDA in the range of $4.0 million to $4.5 million.
For the full year 2024, the Company expects:
- Total revenues of at least $205 million, unchanged from previous guidance, with telehealth revenue guidance increased to a range of $151 million to $152 million, from $150 million previously, and WorkSimpli revenue guidance decreased to $54 million, from $55 million previously.
- Adjusted EBITDA narrowed to a range of $13 million to $14 million, from $13 million to $15 million previously, with telehealth adjusted EBITDA guidance increased to a range of $6 million to $7 million, from $3 million to $4 million previously.
Conference Call
LifeMD’s management will host a conference call today at 4:30 p.m. Eastern time to discuss the Company’s financial results and outlook, and answer questions. Details for the call are as follows:
| Toll-free dial-in number: | 800-717-1738 |
| International dial-in number: | 646-307-1865 |
| Conference ID: | 73461 |
A live and archived webcast will be available in the Investors section of the Company’s website at ir.lifemd.com.
About LifeMD
LifeMD® is a leading provider of virtual primary care. LifeMD offers telemedicine, access to laboratory and pharmacy services, and specialized treatment across more than 200 conditions, including primary care, men’s and women's health, weight management, and hormone therapy. The Company leverages a vertically integrated, proprietary digital care platform, a 50-state affiliated medical group, a 22,500-square-foot affiliated pharmacy, and a U.S.-based patient care center to increase access to high-quality and affordable care. For more information, please visit 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.
Investor Contact
LifeMD, Inc.
Marc Benathen, Chief Financial Officer
marc@lifemd.com
Media Contact
Jessica Friedeman, Chief Marketing Officer
press@lifemd.com
Tables to Follow
| LIFEMD, INC. | |||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
| September 30, 2024 | December 31, 2023 | ||||||
| (Unaudited) | |||||||
| ASSETS | |||||||
| Current Assets | |||||||
| Cash | $ | 37,587,253 | $ | 33,146,725 | |||
| Accounts receivable, net | 6,049,501 | 5,277,250 | |||||
| Product deposit | 136,755 | 485,850 | |||||
| Inventory, net | 2,645,443 | 2,759,932 | |||||
| Other current assets | 2,238,005 | 934,510 | |||||
| Total Current Assets | 48,656,957 | 42,604,267 | |||||
| Non-current Assets | |||||||
| Equipment, net | 1,420,052 | 476,303 | |||||
| Right of use assets | 6,750,256 | 594,897 | |||||
| Capitalized software, net | 13,457,432 | 11,795,979 | |||||
| Intangible assets, net | 2,275,225 | 3,009,263 | |||||
| Total Non-current Assets | 23,902,965 | 15,876,442 | |||||
| Total Assets | $ | 72,559,922 | $ | 58,480,709 | |||
| LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY (DEFICIT) | |||||||
| Current Liabilities | |||||||
| Accounts payable | $ | 15,867,469 | $ | 11,084,855 | |||
| Accrued expenses | 21,013,174 | 13,937,494 | |||||
| Notes payable, net | - | 327,597 | |||||
| Current operating lease liabilities | 403,319 | 603,180 | |||||
| Current portion of long-term debt | 5,277,778 | - | |||||
| Deferred revenue | 16,390,541 | 8,828,598 | |||||
| Total Current Liabilities | 58,952,281 | 34,781,724 | |||||
| Long-term Liabilities | |||||||
| Long-term debt, net | 12,951,280 | 17,927,727 | |||||
| Noncurrent operating lease liabilities | 6,511,425 | 73,849 | |||||
| Contingent consideration | 100,000 | 131,250 | |||||
| Total Liabilities | 78,514,986 | 52,914,550 | |||||
| Commitments and Contingencies | |||||||
| Mezzanine Equity | |||||||
| Preferred Stock, $0.0001 par value; 5,000,000 shares authorized Series B Convertible Preferred Stock, $0.0001 par value; 5,000 shares authorized, zero shares issued and outstanding, liquidation value, $0 per share as of September 30, 2024 and December 31, 2023 | - | - | |||||
| Stockholders’ Equity (Deficit) | |||||||
| Series A Preferred Stock, $0.0001 par value; 1,610,000 shares authorized, 1,400,000 shares issued and outstanding, liquidation value approximately $25.55 per share as of September 30, 2024 and December 31, 2023 | 140 | 140 | |||||
| Common Stock, $0.01 par value; 100,000,000 shares authorized, 41,909,572 and 38,358,641 shares issued, 41,806,532 and 38,255,601 outstanding as of September 30, 2024 and December 31, 2023, respectively | 419,096 | 383,586 | |||||
| Additional paid-in capital | 227,394,727 | 217,550,583 | |||||
| Accumulated deficit | (235,370,384 | ) | (214,265,236 | ) | |||
| Treasury stock, 103,040 shares, at cost, as of September 30, 2024 and December 31, 2023 | (163,701 | ) | (163,701 | ) | |||
| Total LifeMD, Inc. Stockholders’ (Deficit) Equity | (7,720,122 | ) | 3,505,372 | ||||
| Non-controlling interest | 1,765,058 | 2,060,787 | |||||
| Total Stockholders’ (Deficit) Equity | (5,955,064 | ) | 5,566,159 | ||||
| Total Liabilities, Mezzanine Equity and Stockholders’ Equity (Deficit) | $ | 72,559,922 | $ | 58,480,709 | |||
| LIFEMD, INC. | |||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
| (Unaudited) | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Revenues | |||||||||||||||
| Telehealth revenue, net | $ | 40,275,546 | $ | 24,342,789 | $ | 108,549,257 | $ | 66,896,719 | |||||||
| WorkSimpli revenue, net | 13,117,611 | 14,271,122 | 39,650,009 | 40,790,439 | |||||||||||
| Total revenues, net | 53,393,157 | 38,613,911 | 148,199,266 | 107,687,158 | |||||||||||
| Cost of revenues | |||||||||||||||
| Cost of telehealth revenue | 4,300,877 | 4,479,760 | 13,049,315 | 12,525,887 | |||||||||||
| Cost of WorkSimpli revenue | 712,664 | 301,746 | 1,589,318 | 1,019,018 | |||||||||||
| Total cost of revenues | 5,013,541 | 4,781,506 | 14,638,633 | 13,544,905 | |||||||||||
| Gross profit | 48,379,616 | 33,832,405 | 133,560,633 | 94,142,253 | |||||||||||
| Expenses | |||||||||||||||
| Selling and marketing expenses | 26,611,672 | 19,776,797 | 77,164,480 | 56,062,345 | |||||||||||
| General and administrative expenses | 18,925,844 | 13,398,387 | 52,752,961 | 36,120,723 | |||||||||||
| Customer service expenses | 2,804,210 | 2,106,252 | 7,385,669 | 5,573,734 | |||||||||||
| Other operating expenses | 2,112,169 | 1,622,137 | 6,318,791 | 4,640,690 | |||||||||||
| Development costs | 2,611,833 | 1,498,213 | 7,101,655 | 4,062,498 | |||||||||||
| Total expenses | 53,065,728 | 38,401,786 | 150,723,556 | 106,459,990 | |||||||||||
| Operating loss | (4,686,112 | ) | (4,569,381 | ) | (17,162,923 | ) | (12,317,737 | ) | |||||||
| Other expenses | |||||||||||||||
| Interest expense, net | (558,597 | ) | (713,766 | ) | (1,567,743 | ) | (1,973,901 | ) | |||||||
| Loss on debt extinguishment | - | - | - | (325,198 | ) | ||||||||||
| Net loss before income taxes | (5,244,709 | ) | (5,283,147 | ) | (18,730,666 | ) | (14,616,836 | ) | |||||||
| Income tax expense | (232,523 | ) | - | (232,523 | ) | - | |||||||||
| Net loss | (5,477,232 | ) | (5,283,147 | ) | (18,963,189 | ) | (14,616,836 | ) | |||||||
| Net (loss) income attributable to noncontrolling interests | (345,767 | ) | 839,288 | (187,729 | ) | 2,247,055 | |||||||||
| Net loss attributable to LifeMD, Inc. | (5,131,465 | ) | (6,122,435 | ) | (18,775,460 | ) | (16,863,891 | ) | |||||||
| Preferred stock dividends | (776,563 | ) | (776,563 | ) | (2,329,688 | ) | (2,329,688 | ) | |||||||
| Net loss attributable to LifeMD, Inc. common stockholders | $ | (5,908,028 | ) | $ | (6,898,998 | ) | $ | (21,105,148 | ) | $ | (19,193,579 | ) | |||
| Basic loss per share attributable to LifeMD, Inc. common stockholders | $ | (0.14 | ) | $ | (0.20 | ) | $ | (0.52 | ) | $ | (0.58 | ) | |||
| Diluted loss per share attributable to LifeMD, Inc. common stockholders | $ | (0.14 | ) | $ | (0.20 | ) | $ | (0.52 | ) | $ | (0.58 | ) | |||
| Weighted average number of common shares outstanding: | |||||||||||||||
| Basic | 42,020,965 | 34,472,904 | 40,857,344 | 32,959,665 | |||||||||||
| Diluted | 42,020,965 | 34,472,904 | 40,857,344 | 32,959,665 | |||||||||||
| LIFEMD, INC. | |||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||
| (Unaudited) | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||||||
| Net loss | $ | (5,477,232 | ) | $ | (5,283,147 | ) | $ | (18,963,189 | ) | $ | (14,616,836 | ) | |||
| Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||||||
| Amortization of debt discount | 100,443 | 79,653 | 301,331 | 233,495 | |||||||||||
| Amortization of capitalized software | 2,159,781 | 1,439,049 | 5,884,893 | 3,787,716 | |||||||||||
| Amortization of intangibles | 245,804 | 245,968 | 737,836 | 725,496 | |||||||||||
| Accretion of consideration payable | - | 34,265 | 13,644 | 148,481 | |||||||||||
| Depreciation of fixed assets | 151,332 | 49,852 | 321,698 | 146,286 | |||||||||||
| Loss on debt extinguishment | - | - | - | 325,198 | |||||||||||
| Operating lease payments | 137,641 | 191,645 | 529,038 | 562,073 | |||||||||||
| Stock issued for legal settlement | - | 532,000 | - | 532,000 | |||||||||||
| Stock compensation expense | 2,394,235 | 3,318,253 | 9,129,841 | 8,843,736 | |||||||||||
| Changes in Assets and Liabilities | |||||||||||||||
| Accounts receivable | (381,559 | ) | (750,039 | ) | (772,251 | ) | (1,583,832 | ) | |||||||
| Product deposit | (20,621 | ) | 150,347 | 349,095 | 42,497 | ||||||||||
| Inventory | (584,724 | ) | (92,344 | ) | 114,489 | (87,283 | ) | ||||||||
| Other current assets | (716,585 | ) | (631,765 | ) | (1,303,495 | ) | (616,938 | ) | |||||||
| Operating lease liabilities | (111,892 | ) | (201,667 | ) | (446,682 | ) | (589,744 | ) | |||||||
| Deferred revenue | 1,228,882 | 571,144 | 7,561,943 | 691,848 | |||||||||||
| Accounts payable | 815,740 | 44,011 | 4,782,614 | (469,403 | ) | ||||||||||
| Accrued expenses | 6,261,674 | 1,378,992 | 7,704,036 | 5,611,131 | |||||||||||
| Other operating activity | - | - | - | (579,319 | ) | ||||||||||
| Net cash provided by operating activities | 6,202,919 | 1,076,217 | 15,944,841 | 3,106,602 | |||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||||||
| Cash paid for capitalized software costs | (3,043,634 | ) | (2,373,443 | ) | (7,546,346 | ) | (6,273,295 | ) | |||||||
| Purchase of equipment | (447,802 | ) | (30,263 | ) | (1,265,447 | ) | (94,482 | ) | |||||||
| Purchase of intangible assets | (1,862 | ) | - | (3,798 | ) | (148,868 | ) | ||||||||
| Net cash used in investing activities | (3,493,298 | ) | (2,403,706 | ) | (8,815,591 | ) | (6,516,645 | ) | |||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||||||
| Proceeds from long-term debt, net | - | 4,993,885 | - | 19,466,887 | |||||||||||
| Proceeds from notes payable | - | 347,691 | - | 2,347,691 | |||||||||||
| Sale of common stock under ATM, net | - | 899,567 | - | 899,567 | |||||||||||
| Repayment of notes payable, net of prepayment penalty | (13,020 | ) | (657,002 | ) | (327,597 | ) | (5,043,916) | ||||||||
| Cash proceeds from exercise of options | - | - | 107,813 | - | |||||||||||
| Preferred stock dividends | (776,563 | ) | (776,563 | ) | (2,329,688 | ) | (2,329,688 | ) | |||||||
| Contingent consideration payment for ResumeBuild | - | (62,500 | ) | (31,250 | ) | (187,500 | ) | ||||||||
| Net payments for membership interest of WorkSimpli | - | - | - | (305,625 | ) | ||||||||||
| Distributions to non-controlling interest | (36,000 | ) | (36,000 | ) | (108,000 | ) | (108,000 | ) | |||||||
| Net cash (used in) provided by financing activities | (825,583 | ) | 4,709,078 | (2,688,722 | ) | 14,739,416 | |||||||||
| Net increase in cash | 1,884,038 | 3,381,589 | 4,440,528 | 11,329,373 | |||||||||||
| Cash at beginning of period | 35,703,215 | 11,906,741 | 33,146,725 | 3,958,957 | |||||||||||
| Cash at end of period | $ | 37,587,253 | $ | 15,288,330 | $ | 37,587,253 | $ | 15,288,330 | |||||||
| Cash paid for interest | |||||||||||||||
| Cash paid during the period for interest | $ | 630,342 | $ | 717,054 | $ | 1,913,049 | $ | 1,485,242 | |||||||
| Non-cash investing and financing activities: | |||||||||||||||
| Cashless exercise of options | $ | - | $ | 579 | $ | 5,127 | $ | 744 | |||||||
| Cashless exercise of warrants | $ | - | $ | - | $ | 16,305 | $ | - | |||||||
| Stock issued for noncontingent consideration payments | $ | - | $ | 642,000 | $ | 642,000 | $ | 1,926,000 | |||||||
| Series B Preferred Stock conversion | $ | - | $ | 5,072,814 | $ | - | 5,072,814 | ||||||||
| Warrants issued for debt instruments | $ | - | $ | (215,243 | ) | $ | - | $ | 873,100 | ||||||
| Right of use asset | $ | 4,353,166 | $ | 62,053 | $ | 6,684,397 | $ | 155,168 | |||||||
| Right of use lease liability | $ | 4,353,166 | $ | 62,053 | $ | 6,684,397 | $ | 155,168 | |||||||
About the Use of Non-GAAP Financial Measures:
To supplement our financial information presented in accordance with GAAP, we use adjusted EBITDA and adjusted EPS as non-GAAP financial measures to clarify and enhance an understanding of past performance. Additionally, we report telehealth adjusted EBITDA as a non-GAAP financial measure to clarify the financial performance of our core telehealth business excluding WorkSimpli. 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. 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, accretion, financing transaction expense, non-controlling interests, foreign currency translation, inventory and reserve adjustments on discontinued products, extraordinary litigation costs, loss on debt extinguishment, dividends, insurance acceptance and Sarbanes-Oxley readiness, acquisition costs, severance expenses 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 interest, taxes, depreciation, amortization, accretion, financing transaction expense, non-controlling interests, foreign currency translation, inventory and reserve adjustments on discontinued products, extraordinary litigation costs, loss on debt extinguishment, dividends, insurance acceptance and Sarbanes-Oxley readiness, acquisition costs, severance expenses and stock-based compensation expense. We have provided below a reconciliation of adjusted EPS to Diluted loss per share attributable to LifeMD, Inc common shareholders, its most directly comparable GAAP financial measure.
Telehealth adjusted EBITDA is defined as adjusted EBITDA for the telehealth business excluding WorkSimpli. We have provided below a reconciliation of telehealth adjusted EBITDA to net loss attributable to common shareholders solely related to the Company’s core telehealth business excluding WorkSimpli, LifeMD’s majority owned subsidiary. WorkSimpli does not have any overlap of revenues nor expenses with LifeMD’s telehealth business.
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 and adjusted EPS may vary from that of others in our industry. Telehealth adjusted EBITDA is specifically relevant to LifeMD to provide shareholders a comparable measure of profitability for our core telehealth business without the impact of our majority owned, but separately managed non-core subsidiary, WorkSimpli. Adjusted EBITDA, telehealth adjusted EBITDA and adjusted EPS should not be considered as an alternative to net loss before taxes, net loss per share, operating loss or any other performance measures derived in accordance with GAAP as measures of performance.
| Reconciliation of Consolidated GAAP Net Loss to Consolidated Adjusted EBITDA | |||||||||||||||
| (in whole numbers, unaudited) | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Net loss attributable to common shareholders | $ | (5,908,028 | ) | $ | (6,898,998 | ) | $ | (21,105,148 | ) | $ | (19,193,579 | ) | |||
| Interest expense (excluding amortization of debt discount) | 458,154 | 594,229 | 1,266,412 | 1,233,415 | |||||||||||
| Depreciation, amortization and accretion expense | 2,556,917 | 1,769,134 | 6,958,071 | 4,807,979 | |||||||||||
| Amortization of debt discount | 100,443 | 79,653 | 301,331 | 233,495 | |||||||||||
| Loss on debt extinguishment | - | - | - | 325,198 | |||||||||||
| Financing transactions expense | - | 305,424 | 323,372 | 735,501 | |||||||||||
| Litigation costs (a) | 644,170 | 420,404 | 1,322,501 | 1,426,330 | |||||||||||
| Inventory and reserve adjustments on discontinued products | 85,000 | - | 651,142 | 232,630 | |||||||||||
| Severance costs | 621,391 | 7,692 | 1,142,068 | 7,692 | |||||||||||
| Acquisitions expenses | - | 86,942 | - | 127,138 | |||||||||||
| Insurance acceptance readiness | 391,803 | 8,094 | 1,361,637 | 66,634 | |||||||||||
| Sarbanes Oxley readiness | 203,342 | 48,576 | 386,470 | 48,576 | |||||||||||
| Accrued interest on Series B Convertible Preferred Stock | - | 39,884 | - | 506,991 | |||||||||||
| Foreign exchange loss | 429,695 | 272,899 | 908,416 | 796,619 | |||||||||||
| Taxes | 1,258,553 | 70,378 | 1,261,553 | 70,378 | |||||||||||
| Dividends | 799,929 | 1,813,130 | 2,920,102 | 3,971,890 | |||||||||||
| Stock-based compensation expense | 2,394,235 | 3,318,253 | 9,129,841 | 8,843,736 | |||||||||||
| Net loss attributable to noncontrolling interests | (345,767 | ) | 839,288 | (187,729 | ) | 2,247,055 | |||||||||
| Adjusted EBITDA | $ | 3,689,838 | $ | 2,774,982 | $ | 6,640,039 | $ | 6,487,678 | |||||||
| (a) For the three and nine months ended September 30, 2024, the Company included litigation costs related to a class action complaint alleging, inter alia, unauthorized disclosure of certain information of class members to third parties (the Marden v. LifeMD, Inc. case), as disclosed in the Company’s Form 10-Q for the third quarter ended September 30, 2024 and a heavily negotiated executive separation agreement. For the three and nine months ended September 30, 2023, the Company included litigation costs related to a purported breach of an investment bank engagement concerning potential debt financing (the William Blair LLC v. LifeMD, Inc. case) and a purported breach of a consulting services agreement for strategic and corporate development services (the Harborside Advisors LLC v. LifeMD, Inc. case), as disclosed in the Company’s Form 10-K for the fiscal year ended December 31, 2023 and filed on March 11, 2024. | |||||||||||||||
| Reconciliation of GAAP Diluted Loss per Share Attributable to Common Shareholders to Adjusted EPS | |||||||||||||||
| (unaudited) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Diluted loss per share attributable to LifeMD, Inc. common shareholders | $ | (0.14 | ) | $ | (0.20 | ) | $ | (0.52 | ) | $ | (0.58 | ) | |||
| Adjustments to Reconcile GAAP Diluted Loss Per Share to Adjusted EPS | |||||||||||||||
| Interest expense (excluding amortization of debt discount) | 0.01 | 0.02 | 0.03 | 0.04 | |||||||||||
| Depreciation, amortization and accretion expense | 0.06 | 0.05 | 0.17 | 0.15 | |||||||||||
| Amortization of debt discount | - | - | 0.01 | 0.01 | |||||||||||
| Loss on debt extinguishment | - | - | - | 0.01 | |||||||||||
| Financing transactions expense | - | 0.01 | 0.01 | 0.02 | |||||||||||
| Litigation costs | 0.02 | 0.01 | 0.03 | 0.04 | |||||||||||
| Inventory and reserve adjustments on discontinued products | - | - | 0.02 | 0.01 | |||||||||||
| Severance costs | 0.01 | - | 0.03 | - | |||||||||||
| Acquisitions expenses | - | - | - | - | |||||||||||
| Insurance acceptance readiness | 0.01 | - | 0.03 | - | |||||||||||
| Sarbanes Oxley readiness | - | - | 0.01 | - | |||||||||||
| Accrued interest on Series B Convertible Preferred Stock | - | - | - | 0.02 | |||||||||||
| Foreign exchange (gain) loss | 0.01 | 0.01 | 0.02 | 0.02 | |||||||||||
| Taxes | 0.03 | - | 0.03 | - | |||||||||||
| Dividends | 0.02 | 0.05 | 0.07 | 0.12 | |||||||||||
| Stock-based compensation expense | 0.06 | 0.10 | 0.22 | 0.27 | |||||||||||
| Net loss attributable to noncontrolling interests | - | 0.03 | - | 0.07 | |||||||||||
| Adjusted EPS | $ | 0.09 | $ | 0.08 | $ | 0.16 | $ | 0.20 | |||||||
| Reconciliation of Telehealth GAAP Net Loss to Telehealth Adjusted EBITDA | |||||||||||||||
| (in whole numbers, unaudited) | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
| Net loss attributable to common shareholders | $ | (4,612,049 | ) | $ | (10,044,756 | ) | $ | (20,401,514 | ) | $ | (27,731,584 | ) | |||
| Interest expense (excluding amortization of debt discount) | 456,151 | 593,013 | 1,263,120 | 1,229,576 | |||||||||||
| Depreciation, amortization and accretion expense | 1,707,151 | 1,150,718 | 4,555,921 | 3,176,361 | |||||||||||
| Amortization of debt discount | 100,443 | 79,653 | 301,331 | 233,495 | |||||||||||
| Loss on debt extinguishment | - | - | - | 325,198 | |||||||||||
| Financing transactions expense | - | 305,424 | 323,372 | 735,501 | |||||||||||
| Litigation costs (a) | 644,170 | 420,404 | 1,322,501 | 1,426,330 | |||||||||||
| Inventory and reserve adjustments on discontinued products | 85,000 | - | 651,142 | 232,630 | |||||||||||
| Severance costs | 621,391 | 7,692 | 1,142,068 | 7,692 | |||||||||||
| Acquisitions expenses | - | 86,942 | - | 127,138 | |||||||||||
| Insurance acceptance readiness | 391,803 | 8,094 | 1,361,637 | 66,634 | |||||||||||
| Sarbanes Oxley readiness | 203,342 | 48,576 | 386,470 | 48,576 | |||||||||||
| Accrued interest on Series B Convertible Preferred Stock | - | 39,884 | - | 506,991 | |||||||||||
| Foreign exchange (gain) loss | - | - | - | - | |||||||||||
| Taxes | - | - | - | - | |||||||||||
| Dividends | 812,562 | 812,563 | 2,437,687 | 2,437,688 | |||||||||||
| Stock-based compensation expense | 2,394,235 | 3,318,253 | 9,129,841 | 8,843,736 | |||||||||||
| Net loss attributable to noncontrolling interests | (345,767 | ) | 839,288 | (187,729 | ) | 2,247,055 | |||||||||
| Telehealth Adjusted EBITDA | $ | 2,458,433 | $ | (2,334,252 | ) | $ | 2,285,847 | $ | (6,086,983 | ) | |||||
| (a) For the three and nine months ended September 30, 2024, the Company included litigation costs related to a class action complaint alleging, inter alia, unauthorized disclosure of certain information of class members to third parties (the Marden v. LifeMD, Inc. case), as disclosed in the Company’s Form 10-Q for the third quarter ended September 30, 2024 and a heavily negotiated executive separation agreement. For the three and nine months ended September 30, 2023, the Company included litigation costs related to a purported breach of an investment bank engagement concerning potential debt financing (the William Blair LLC v. LifeMD, Inc. case) and a purported breach of a consulting services agreement for strategic and corporate development services (the Harborside Advisors LLC v. LifeMD, Inc. case), as disclosed in the Company’s Form 10-K for the fiscal year ended December 31, 2023 and filed on March 11, 2024. | |||||||||||||||
