What changed in this filing

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Item 1. Financial Statements

2022-11-10 compared with 2022-08-11 · 700 added, 601 removed, 896 unchanged (59% of the section changed)

1 unchanged sentence

CONSOLIDATED BALANCE SHEETS

June 30, 2022

September 30, 2022

December 31, 2021

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Capitalized software, net

Goodwill and intangible assets, net

Intangible assets, net

Total Non-current Assets

LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY

LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ (DEFICIT) EQUITY

Current Liabilities

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Series B Preferred Stock, $ 0.0001 par value;

5,000 shares authorized, 3,500 and 3,500 shares issued and outstanding, liquidation value approximately $ 1,239 and $ 1,175 per share as of June 30, 2022 and December 31, 2021, respectively

Stockholders’ Equity

5,000 shares authorized, 3,500 and 3,500 shares issued and outstanding, liquidation value approximately $ 1,272 and $ 1,175 per share as of September 30, 2022 and December 31, 2021, respectively

Stockholders’ (Deficit) Equity

Series A Preferred Stock, $ 0.0001 par value;

1,610,000 shares authorized, 1,400,000 shares issued and outstanding, liquidation value approximately, $ 26.72 and $ 25.62 per share as of June 30, 2022 and December 31, 2021, respectively

1,610,000 shares authorized, 1,400,000 shares issued and outstanding, liquidation value approximately, $ 27.27 and $ 25.62 per share as of September 30, 2022 and December 31, 2021, respectively

Common stock, $ 0.01 par value;

100,000,000 shares authorized, 30,989,869 and 30,704,434 shares issued, 30,886,829 and 30,601,394 outstanding as of June 30, 2022 and December 31, 2021, respectively

100,000,000 shares authorized, 31,457,775 and 30,704,434 shares issued, 31,354,735 and 30,601,394 outstanding as of September 30, 2022 and December 31, 2021, respectively

Additional paid-in capital

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Total LifeMD, Inc.

Stockholders’ Equity

Stockholders’ (Deficit) Equity

Non-controlling interest

( 1,031,745 )

Total Stockholders’ (Deficit) Equity

( 1,368,196 )

Total Stockholders’ Equity

Total Liabilities, Mezzanine Equity and Stockholders’ Equity

Total Liabilities, Mezzanine Equity and Stockholders’ (Deficit) Equity

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Consolidated STATEMENTS OF OPERATIONS

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Telehealth revenue, net

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( 1,824,777 )

( 2,866,150 )

Change in fair value of contingent consideration

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accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Consolidated STATEMENTS of CHANGES IN STOCKHOLDERS’ EQUITY

Series A Preferred Stock

Additional Paid-in

Consolidated STATEMENTS of CHANGES IN STOCKHOLDERS’ (DEFICIT) EQUITY

A Preferred Stock

Non-controlling

Balance, January 1, 2021

January 1, 2021

$ ( 80,151,905 )

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$ ( 4,477,586 )

Stock issued for service

Cashless exercise of stock options

compensation expense

exercise of stock options

Sale of stock in private placement, net

Distribution to non-controlling interest

Purchase of additional membership interest of WSS

Adjustment of noncontrolling interest for additional investment

of stock options

of stock in private placement, net

to non-controlling interest

of additional membership interest of WSS

of noncontrolling interest for additional investment

( 1,636,875 )

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( 11,872,886 )

Balance, March 31, 2021

March 31, 2021

$ ( 91,754,288 )

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$ ( 841,427 )

Stock issued for service

compensation expense

of stock options

exercise of stock options

Cashless exercise of stock options

Exercise of warrants

Warrants issued for debt instruments

Distribution to non-controlling interest

issued for debt instruments

to non-controlling interest

( 16,830,700 )

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( 17,028,673 )

Balance, June 30, 2021

June 30, 2021

$ 101,450,858

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$ ( 8,033,341 )

Series A Preferred

Additional Paid-in

Non-controlling

Balance, January 1, 2022

compensation expense

of stock options

of common stock under ATM

to non-controlling interest

( 14,353,375 )

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( 14,416,081 )

September 30, 2021

$ 105,275,494

Stock issued for service

Cashless exercise of stock options

Exercise of warrants

Series A Preferred Stock Dividend

Distribution to non-controlling interest

Net (loss) income

$ ( 122,938,363 )

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$ ( 17,557,940 )

Balance, March 31, 2022

$ ( 1,100,575 )

$ ( 18,658,515 )

Non-controlling

January 1, 2022

$ 164,517,634

$ ( 141,921,085 )

Stock compensation

$ ( 163,701 )

$ ( 1,031,745 )

compensation expense

exercise of stock options

Series A Preferred Stock Dividend

Distribution to non-controlling interest

Net (loss) income

A Preferred Stock Dividend

to non-controlling interest

(loss) income

( 13,299,675 )

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( 13,274,949 )

Net income(loss)

March 31, 2022

$ 169,026,965

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$ ( 163,701 )

Balance, June 30, 2022

$ ( 1,043,019 )

compensation expense

of stock options

A Preferred Stock Dividend

to non-controlling interest

(loss) income

( 13,018,962 )

1 unchanged sentence

( 12,972,961 )

June 30, 2022

$ 173,157,467

$ ( 169,792,847 )

$ ( 163,701 )

$ ( 1,033,018 )

compensation expense

issued for legal settlement

exercise of stock options

A Preferred Stock Dividend

of membership interest in WorkSimpli

to non-controlling interest

(loss) income

( 7,281,673 )

( 7,197,936 )

September 30, 2022

$ 177,131,586

$ ( 177,851,083 )

$ ( 163,701 )

$ ( 568,480 )

$ ( 799,716 )

$ ( 1,368,196 )

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Consolidated STATEMENTS OF CASH FLOWS

Six Months Ended June 30,

Nine Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES

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Operating lease payments

Stock issued for legal settlement

Stock compensation expense

2 unchanged sentences

( 1,558,063 )

( 1,084,174 )

Product deposit

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Accounts payable

( 1,150,858 )

Accrued expenses

6 unchanged sentences

( 6,742,946 )

( 1,731,507 )

Purchase of equipment

5 unchanged sentences

( 12,134,718 )

( 1,823,843 )

CASH FLOWS FROM FINANCING ACTIVITIES

1 unchanged sentence

Proceeds from issuance of debt instruments

Cash proceeds from sale of common stock under ATM

Cash proceeds from exercise of options

2 unchanged sentences

( 2,329,688 )

Adjustment of membership interest in WorkSimpli

Contingent consideration payment for ResumeBuild acquisition

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the trading symbol for the Company’s common stock, par value $ 0.01 per share on The Nasdaq Stock Market LLC changed from “CVLB”

April 1, 2016, the original operating agreement of Immudyne PR LLC (“Immudyne PR”), a joint venture to market the Company’s

skincare products, was amended and restated and the Company increased its ownership and voting interest in Immudyne PR to 78.2 %.

with the name change of the parent company to Conversion Labs, Inc., Immudyne PR was renamed to Conversion Labs PR LLC.

2019, the operating agreement of Conversion Labs PR was amended and restated in its entirety to increase the Company’s ownership

and voting interest in Conversion Labs PR to 100 %.

On February 22, 2021, concurrent with the name of the parent company to LifeMD, Inc.,

Conversion Labs PR LLC was renamed to LifeMD PR LLC.

June 2018, the Company closed the strategic acquisition of 51 % of LegalSimpli Software, LLC, which operates a software as a service (“SaaS”)

application for converting, editing, signing, and sharing PDF documents called PDFSimpli.

In addition to LegalSimpli Software, LLC’s

growth business model, this acquisition added deep search engine optimization and search engine marketing expertise to the Company.

July 15, 2021, LegalSimpli Software, LLC, changed its name to WorkSimpli Software, LLC, (“WorkSimpli”).

April 1, 2016, the original operating agreement of Immudyne PR LLC (“Immudyne

PR”), a joint venture to market the Company’s immune support, skincare, and hair loss was amended and restated and the Company

increased its ownership and voting interest in Immudyne PR to 78.2 %.

Concurrent with the name change of the parent company to Conversion Labs, Inc., Immudyne PR was renamed to Conversion Labs PR LLC.

On April 25, 2019, the operating agreement of Conversion Labs PR was amended and restated in its entirety to increase the

Company’s ownership and voting interest in Conversion Labs PR to 100 %.

On February 22, 2021, concurrent with the name change of the parent company to LifeMD, Inc., Conversion Labs PR LLC was renamed to

LifeMD PR LLC.

June 2018, the Company closed the strategic acquisition of 51 % of LegalSimpli Software, LLC, which operates a software as a service application

for converting, editing, signing, and sharing PDF documents called PDFSimpli.

In addition to LegalSimpli Software, LLC’s growth

business model, this acquisition added deep search engine optimization and search engine marketing expertise to the Company.

15, 2021, LegalSimpli Software, LLC, changed its name to WorkSimpli Software, LLC, (“WorkSimpli”).

Effective January 22,

22, 2021, the Company consummated a transaction to restructure the ownership of WorkSimpli (the “WSS Restructuring”) (See

Note 7) and concurrently increased its ownership stake in WorkSimpli to 85.6 %.

2021, the Company consummated a transaction to restructure the ownership of WorkSimpli (the “WSS Restructuring”) (See Note

7) and concurrently increased its ownership interest in WorkSimpli to 85.6 %.

Effective September 30, 2022, two option agreements were

exercised which further restructured the ownership of WorkSimpli.

As a result, the Company’s ownership interest in WorkSimpli decreased

See Note 7 for additional information.

January 18, 2022, the Company acquired Cleared Technologies, PBC, a Delaware public benefit corporation (“Cleared”), a rapidly

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healthcare system is

undergoing a paradigm shift, thanks to new technologies and the emergence of direct-to-patient healthcare.

undergoing a paradigm shift, due to new technologies and the emergence of direct-to-patient healthcare.

Direct-to-patient telehealth

technology companies, like the Company, connect consumers to affiliated, licensed, healthcare professionals for care across numerous

indications, including concierge care, men’s sexual health, and dermatology, among others.

indications, including primary care, men’s sexual health, and dermatology.

Company’s telehealth platform helps patients access their licensed providers for diagnoses, virtual care, and prescription medications,

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revenue streams for the Company.

believes that brand innovation, customer acquisition, and service excellence form the heart of its business.

As is exemplified with its

first brand, Shapiro MD, it has built a full line of proprietary OTC products for male and female hair loss—including Food and Drug

Administration (“FDA”) approved OTC minoxidil and an FDA-cleared medical device—and now a personalized telehealth platform

offering that gives consumers access to virtual medical treatment from their providers and, when appropriate, a full line of oral and

topical prescription medications for hair loss.

The Company’s men’s brand, RexMD, currently offers access to provider-based

treatment for erectile dysfunction, as well as treatment for other common men’s health issues, including premature ejaculation and

In the first quarter of 2021, the Company launched its newest brand, NavaMD, a tele-dermatology and skincare brand for women.

The Company has built a platform that allows it to efficiently launch telehealth and wellness product lines wherever it determines there

is a market need.

Company believes that brand innovation, customer acquisition, and service excellence form the heart of its business.

As is exemplified

with its first brand, ShapiroMD, it has built a full line of proprietary OTC products for male and female hair loss—including

Food and Drug Administration (“FDA”) approved OTC minoxidil and an FDA-cleared medical device—and now a personalized

telehealth platform offering that gives consumers access to virtual medical treatment from their providers and, when appropriate, a full

line of oral and topical prescription medications for hair loss.

The Company’s men’s brand, RexMD, currently offers access

to provider-based treatment for erectile dysfunction, as well as treatment for other common men’s health issues, including premature

ejaculation and hair loss.

In the first quarter of 2021, the Company launched its newest brand, NavaMD, a tele-dermatology and skincare

brand for women.

The Company has built a platform that allows it to efficiently launch telehealth and wellness product lines wherever

it determines there is a market need.

and Subsidiary History

June 2018, Conversion Labs closed the strategic acquisition of 51 %

of WorkSimpli, which operates a SaaS application for converting, editing, signing, and sharing PDF documents called PDFSimpli.

addition to WorkSimpli’s growth business model, this acquisition added deep search engine optimization and search engine

marketing expertise to the Company.

The Company subsequently increased its ownership stake in WorkSimpli to its current 85.6 %.

In early 2019, the Company had

launched a service-based business under the name Conversion Labs Media LLC (“CVLB Media”), a Puerto Rico limited liability

company, which was to be used to run e-commerce marketing campaigns for other online businesses.

However, this business initiative was

terminated in early 2019 in order to focus on its core business, as well as the expansion of our telehealth opportunities.

Conversion Labs Rx, LLC (“CVLB Rx”), a Puerto Rico limited liability company, signed a strategic partnership agreement with

Specialty Medical Drugstore, Inc.

(doing business as “GoGoMeds”).

GoGoMeds is a nationwide pharmacy licensed to dispense prescription

medications directly to consumers in all 50 states and the District of Columbia.

However, since its inception, CVLB Rx did not conduct

any business and CVLB Rx was dissolved on August 7, 2020.

Additionally, Conversion Labs Asia Limited (“Conversion Labs Asia”),

a Hong Kong company, had no activity during the three months and six months ended June 30, 2022 and 2021.

January 18, 2022, the Company acquired Cleared, a rapidly growing nationwide allergy telehealth platform that provides personalized treatments

for allergy, asthma, and immunology.

Under the terms of the agreement, the Company acquired all outstanding shares of Cleared at closing

in exchange for a $ 460,000 upfront cash payment, and two non-contingent milestone payments for total of $ 3.46 million ($ 1.73 million

each on or before the first and second anniversaries of the closing date).

The Company purchased a convertible note from a strategic

pharmaceutical investor for $ 507,000 which was converted upon closing of the Cleared acquisition.

The Company also agreed to a performance-based

earnout based on Cleared’s future net sales, payable in cash or shares at the Company’s discretion (See Note 3).

June 2018, Conversion Labs closed the strategic acquisition of 51 % of WorkSimpli, which operates a software as a service application

for converting, editing, signing, and sharing PDF documents called PDFSimpli.

In addition to WorkSimpli’s growth business model,

this acquisition added deep search engine optimization and search engine marketing expertise to the Company.

The Company subsequently

increased its ownership interest in WorkSimpli to its current 85.6 %.

Effective September 30, 2022, two option agreements were exercised

which further restructured the ownership of WorkSimpli.

As a result, the Company’s ownership interest in WorkSimpli decreased to

See Note 7 for additional information.

early 2019, the Company launched a service-based business under the name

Conversion Labs Media LLC (“CVLB Media”), a Puerto Rico limited liability company, which was to be used to run e-commerce

marketing campaigns for other online businesses.

However, this business initiative was terminated in early 2019 in order to focus on the

core business, as well as on the expansion of telehealth opportunities.

In May 2019, Conversion Labs Rx, LLC (“CVLB Rx”),

a Puerto Rico limited liability company, signed a strategic partnership agreement with Specialty Medical Drugstore, Inc.

(doing business

as “GoGoMeds”).

GoGoMeds is a nationwide pharmacy licensed to dispense prescription medications directly to consumers in all

50 states and the District of Columbia.

However, since its inception, CVLB Rx did not conduct any business and CVLB Rx was dissolved on

August 7, 2020.

Additionally, Conversion Labs Asia Limited (“Conversion Labs Asia”), a Hong Kong company, had no activity

during the three months and nine months ended September 30, 2022 and 2021.

January 18, 2022, the Company acquired Cleared, a rapidly growing nationwide allergy telehealth platform that provides personalized

treatments for allergy, asthma, and immunology.

Under the terms of the agreement, the Company acquired all outstanding shares of

Cleared at closing in exchange for a $ 460,000

upfront cash payment, and two non-contingent milestone payments for a total of $ 3.46

million ($ 1.73

million each on or before the first and second anniversaries of the closing date).

The Company purchased a convertible note from a

strategic pharmaceutical investor for $ 507,000

which was converted upon closing of the Cleared acquisition.

The Company also agreed to a performance-based earnout based on

Cleared’s future net sales, payable in cash or shares at the Company’s discretion (See Note 3).

February 2022, WorkSimpli closed on an Asset Purchase Agreement (the “ResumeBuild APA”) with East Fusion FZCO, a Dubai,

UAE corporation (the “Seller”), whereby WorkSimpli acquired substantially all of the assets associated with the

Seller’s business, offering subscription-based resume building software through SaaS online platforms (the

Seller’s business, offering subscription-based resume building software through software as a service online platforms (the

“Acquisition”).

WorkSimpli paid to the Seller a purchase price $ 4,000,000 .

The Seller is also entitled to a minimum of $ 500,000 to be paid out in quarterly payments equal to the greater of 15 %

WorkSimpli paid $ 4.0 million to the Seller upon closing .

The Seller is also entitled to a minimum

of $ 500 thousand to be paid out in

quarterly payments equal to the greater of 15 %

of net profits (as defined in the ResumeBuild APA) or $ 62,500 ,

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WorkSimpli (See Note 3).

otherwise indicated, the terms “LifeMD,” “Company,” “we,” “us,” and

“our” refer to LifeMD, Inc.

(formerly known as Conversion Labs, Inc.), our wholly subsidiary LifeMD PR LLC (formerly

Immudyne PR LLC, and “Conversion Labs PR”), a Puerto Rico limited liability company (“Conversion Labs PR”,

or “CLPR”), our recent acquisition, Cleared, a Delaware public benefit corporation and our majority-owned subsidiary,

The affiliated network of medical Professional Corporations and medical Professional Associations administratively led

by LifeMD Southern Patient Medical Care, P.C., is the Company’s affiliated, variable interest entity in which we hold a

controlling financial interest (“LifeMD PC”).

Unless otherwise specified, all dollar amounts are expressed in United

States dollars.

otherwise indicated, the terms “LifeMD,” “Company,” “we,” “us,” and “our”

refer to LifeMD, Inc.

(formerly known as Conversion Labs, Inc.), our wholly subsidiary LifeMD PR LLC (formerly Immudyne PR LLC, and “Conversion

Labs PR”), a Puerto Rico limited liability company (“Conversion Labs PR”, or “CLPR”), Cleared, a Delaware

public benefit corporation and our majority-owned subsidiary, WorkSimpli.

The affiliated network of medical Professional Corporations

and medical Professional Associations administratively led by LifeMD Southern Patient Medical Care, P.C., (“LifeMD PC”) is

the Company’s affiliated, variable interest entity in which we hold a controlling financial interest.

Unless otherwise specified,

all dollar amounts are expressed in United States dollars.

July 13, 2021, the Company, on behalf of its customers, entered into an agreement to engage Quest Diagnostics Incorporated (“Quest

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their home or office, or at any one of Quest Diagnostics’ 2,000 facilities.

August 4, 2021, the Company entered into a partnership agreement with Particle Health, a state-of-the-art, digital health company

with a HIPAA-compliant technology platform that converts electronic medical records data into a user-friendly, Fast Healthcare

Interoperability Resource (“FHIR”) format.

Health enables healthcare companies by offering simple, secure access to vital medical data.

With Particle Health’s platform

and patient consent, licensed affiliated medical providers on the LifeMD primary care platform gain instant access to comprehensive

patient health records, therefore enabling best-in-class, personalized care through a deeper understanding of their patients’

medical histories .

August 4, 2021, the Company entered into a partnership agreement with Particle Health, a state-of-the-art, digital health company with

a HIPAA-compliant technology platform that converts electronic medical records data into a user-friendly, Fast Healthcare Interoperability

Resource (“FHIR”) format.

Particle Health enables healthcare companies by offering simple, secure access to vital medical

With Particle Health’s platform and patient consent, licensed affiliated medical providers on the LifeMD primary care platform

gain instant access to comprehensive patient health records, therefore enabling best-in-class, personalized care through a deeper understanding

of their patients’ medical histories.

Company has funded operations in the past through the sales of its products, issuance of common and preferred stock, and through loans

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There were no shares of common stock sold under the ATM Sales Agreement during the

six months ended June 30, 2022 and 2021.

Under the 2021 Shelf, the Company has the ability to raise up to $ 150 million, of which $ 58.5

million was utilized as of June 30, 2022.

The Company has approximately $ 59.5 million available under the ATM Sales Agreement and $ 32

million available under the 2021 Shelf as of June 30, 2022.

three and nine months ended September 30, 2022.

There were 70,786 shares of common stock sold under the ATM Sales Agreement during the

three and nine months ended September 30, 2021 and net proceeds received were $ 493,481 .

As of September 30, 2022, the Company has utilized

$ 58.5 million of the 2021 Shelf.

The Company has approximately $ 59.5 million available under the ATM Sales Agreement and $ 32 million

available under the 2021 Shelf as of September 30, 2022.

September 2021, the Company entered into two underwriting agreements (the “Preferred Underwriting Agreement” and “the

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The Company used a

portion of the net proceeds to pay the $ 15.0 million outstanding on the June 1, 2021 Purchase Agreement and intends to use the remaining

net proceeds to fund the segregated dividend account, for working capital and general corporate purposes including, but not limited to,

new patient customer acquisition expenses and capital expenditures.

portion of the net proceeds to pay the $ 15.0 million outstanding on the June 1, 2021 Purchase Agreement and is using the remaining net

proceeds to fund the segregated dividend account, for working capital and general corporate purposes including, but not limited to, new

patient customer acquisition expenses and capital expenditures.

Company will pay cumulative distributions on the Series A Preferred Stock, from the date of original issuance, in the amount of $ 2.21875

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Stock will be payable quarterly in arrears, on or about the 15th day of January, April, July, and October of each year.

The second quarterly

dividend on the Series A Preferred Stock was declared on March 25, 2022 to holders of record as of April 5, 2022 and was paid on April

Dividends declared

and paid on the Series A Preferred Stock during the nine months ended September 30, 2022 are as follows:

(1) the second quarterly dividend

on the Series A Preferred Stock was declared on March 25, 2022 to holders of record as of April 5, 2022 and was paid on April 15, 2022,

(2) the third quarterly dividend on the Series A Preferred Stock was declared on June 27, 2022 to holders of record as of July 5, 2022

5, 2022 and was paid on July 15, 2022.

The dividends are included in the Company’s results of operations for the three and six

months ended June 30, 2022.

and was paid on July 15, 2022, and (3) the fourth quarterly dividend on the Series A Preferred Stock was declared on September 27, 2022

to holders of record as of October 7, 2022 and was paid on October 17, 2022.

The dividends are included in the Company’s results

of operations for the three and nine months ended September 30, 2022.

Concern Evaluation

of June 30, 2022, the Company has an accumulated deficit approximating $ 170 million and has experienced significant losses from its operations.

Although the Company is showing significant positive revenue trends, the Company expects to incur further losses through the third quarter

To date, the Company has been funding operations primarily through the sale of equity in private placements and securities purchased

by a financial institution.

There can be no assurances that we will be successful in increasing revenues, improving operational efficiencies

or that financing will be available or, if available, that such financing will be available under favorable terms.

of September 30, 2022, the Company has an accumulated deficit approximating $ 178 million and has experienced significant losses from

its operations.

Although the Company is showing positive revenue trends, the Company expects to incur further losses through the fourth

quarter of 2022.

To date, the Company has been funding operations primarily through the sale of equity in private placements and securities

purchased by a financial institution.

There can be no assurances that we will be successful in increasing revenues, improving operational

efficiencies or that financing will be available or, if available, that such financing will be available under favorable terms.

Company has a current cash balance of approximately $ 3.4 million as of the filing date.

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The Company’s continuance

as a going concern is highly dependent on its future profitability and on the on-going support of its shareholders, affiliates, and creditors.

as a going concern is highly dependent on its future profitability and on the on-going support of its stockholders, affiliates, and creditors.

Based on these circumstances, management has determined that these conditions raise substantial doubt about the Company’s ability

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The results of operations

for the three and six months ended June 30, 2022 are not necessarily indicative of the results for the year ending December 31, 2022

for the three and nine months ended September 30, 2022 are not necessarily indicative of the results for the year ending December 31,

2022 or for any future period.

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810, Consolidation .

consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, LifeMD PR, its recent

acquisition, Cleared, its majority owned subsidiary, WorkSimpli, in addition to LifeMD PC, the Company’s affiliated, variable

interest entity in which we hold a controlling financial interest.

During the year ended December 31, 2021, the Company purchased an

additional 34.6 %

of WorkSimpli for a total equity interest of approximately 85.6 %

as of December 31, 2021 (See Note 7).

consolidated financial statements include the accounts of the Company, and its wholly owned subsidiary, LifeMD PR, Cleared, its majority

owned subsidiary, WorkSimpli, and LifeMD PC, the Company’s affiliated, variable interest entity in which we hold a controlling

financial interest.

During the year ended December 31, 2021, the Company purchased an additional 34.6 % of WorkSimpli for a total equity

interest of approximately 85.6 % as of December 31, 2021 (See Note 7).

Effective September 30, 2022, two option agreements were exercised

which further restructured the ownership of WorkSimpli.

As a result, the Company’s ownership interest in WorkSimpli decreased to

See Note 7 for additional information.

significant intercompany transactions and balances have been eliminated in consolidation.

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liquid investments with a maturity of three months or less when purchased are considered to be cash equivalents.

As of June 30, 2022

As of September 30,

2022 and December 31, 2021, there were no cash equivalents.

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balances may exceed federally insured limits.

We have never experienced any losses related to these balances.

We have not experienced any losses related to these balances.

Interest Entities

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consolidate it when that party has a variable interest, or combination of variable interests, that provides it with a controlling financial

A party is deemed to have a controlling financial interest if it meets both of the power and losses/benefits criteria.

power criterion is the ability to direct the activities of the VIE that most significantly impact its economic performance.

The losses/benefits

criterion is the obligation to absorb losses from, or right to receive benefits from, the VIE that could potentially be significant to

Company determined that the LifeMD PC entity, the Company’s affiliated network of medical Professional Corporations and

medical Professional Associations administratively led by LifeMD Southern Patient Medical Care, P.C., is a VIE and subject to

consolidation.

LifeMD PC and the Company do not have any shareholders in common.

LifeMD PC is owned by licensed physicians, and the

Company maintains a managed service agreement with LifeMD PC whereby we provide all non-clinical services to LifeMD PC.

determined that it is the primary beneficiary of LifeMD PC and must consolidate, as we have both the power to direct the activities

of LifeMD PC that most significantly impact the economic performance of the entity and we have the obligation to absorb the losses.

As a result, the Company presents the financial position, results of operations, and cash flows of LifeMD PC as part of the

consolidated financial statements of the Company.

A party is deemed to have a controlling financial interest if it has the ability to direct the activities of the VIE that most significantly impact its economic performance and has the obligation to absorb losses from, or right to receive benefits from, the VIE that could potentially be significant to

Company determined that the LifeMD PC entity, the Company’s affiliated network of medical Professional Corporations and medical

Professional Associations administratively led by LifeMD Southern Patient Medical Care, P.C., is a VIE and subject to consolidation.

LifeMD PC and the Company do not have any stockholders in common.

LifeMD PC is owned by licensed physicians, and the Company maintains

a managed service agreement with LifeMD PC whereby we provide all non-clinical services to LifeMD PC.

The Company determined that it

is the primary beneficiary of LifeMD PC and must consolidate, as we have both the power to direct the activities of LifeMD PC that most

significantly impact the economic performance of the entity and we have the obligation to absorb the losses.

As a result, the Company

presents the financial position, results of operations, and cash flows of LifeMD PC as part of the consolidated financial statements

of the Company.

There is no non-controlling interest upon consolidation of LifeMD PC.

net loss for LifeMD PC was approximately $ 1.4 million and $ 2.9 million for the three and six months ended June 30, 2022, respectively.

Company prepares its unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted

in the United States of America which requires management to make estimates and assumptions that affect the reported amounts of assets

and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Some of the more significant estimates required to be made by management include the determination of reserves for accounts receivable,

returns and allowances, the valuation of inventory, and stockholders’ equity-based transactions.

Actual results could differ from

those estimates.

revenue and net loss for LifeMD PC was approximately $ 124 thousand and $ 1.0 million for the three months ended September 30, 2022, respectively,

and $ 124 thousand and $ 3.9 million for the nine months ended September 30, 2022, respectively.

Company prepares its unaudited condensed consolidated financial statements in conformity with accounting principles generally

accepted in the United States of America (“U.S.

GAAP”) which requires management to make estimates and assumptions that

affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues

and expenses during the reporting period.

Some of the more significant estimates required to be made by management include the

determination of reserves for accounts receivable, returns and allowances, the valuation of inventory, and stockholders’

equity-based transactions.

Actual results could differ from those estimates.

Reclassifications

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it to the current periods’ presentation.

The reclassifications include:

(1) $ 34,914 and $ 41,452 of reimbursable expenses reclassified

from cost of revenues to other operating expenses, (2) $ 87,491 and $ 245,153 of taxes and licensing fees reclassified from other operating

expenses to general and administrative expenses, (3) $ 20,896 and $ 66,555 of software development costs reclassified from cost of revenues

to development costs, (4) $ 56,293 and $ 129,463 of development services costs reclassified from other operating expenses to development

costs, (5) $ 3,669 and $ 49,639 of investor relations costs reclassified from general and administrative expenses to selling and marketing

expenses and (6) $ 23,976 and $ 23,976 of regulatory costs reclassified from cost of telehealth revenue to general and administrative expenses

for the three and six months ended June 30, 2021, respectively.

The reclassifications include ($ 3,026 ) and $ 126,437 of development services costs reclassified

from other operating expenses to development costs, for the three and nine months ended September 30, 2021, respectively.

Company records revenue under the adoption of ASC 606, Revenue from Contracts with Customers , by analyzing exchanges with its

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fulfillment service provider;

in limited cases, title does not pass until the product reaches the customer’s delivery site;

in limited cases, the customer does not obtain control until the product reaches the customer’s delivery site;

these limited cases, recognition of revenue should be deferred until that time, however, the Company does not have a process to properly

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In all cases, delivery

is considered to have occurred when title and risk of loss have transferred to the customer, which is usually commensurate upon shipment

is considered to have occurred when the customer obtains control, which is usually commensurate upon shipment

of the product.

In the case of its product-based contracts, the Company provides a subscription sensitive service based on the recurring

shipment of products and records the related revenue under the subscription agreements subsequent to receiving the monthly product order,

shipment of products.

The Company records the related revenue under the subscription agreements subsequent to receiving the monthly product order,

recording the revenue at the time it fulfills the shipment obligation to the customer.

its product-based contracts with customers, the Company records an estimate for provisions of discounts, returns, allowances, customer

rebates, and other adjustments for its product shipments, and are reflected as contra revenues in arriving at reported net revenues.

Company’s discounts and customer rebates are known at the time of sale, correspondingly, the Company reduces gross product sales

for such discounts and customer rebates.

The Company estimates customer returns and allowances based on information derived from historical

transaction detail and accounts for such provisions as contra revenue during the same period in which the related revenues are earned.

The Company has determined that the population of its product-based contracts with customers are homogenous, supporting the ability to

record estimates for returns and allowances to be applied to the entire product-based portfolio population.

Customer discounts, returns,

and rebates on telehealth revenues approximated $ 1.6 million and $ 1.4 million for the three months ended June 30, 2022 and 2021, respectively.

Customer discounts, returns, and rebates on telehealth revenues approximated $ 3.1 million and $ 2.6 million for the six months ended June

its product-based contracts with customers, the Company records an estimate

for provisions of discounts, returns, allowances, customer rebates, and other adjustments for its product shipments;

this estimate is

reflected as contra revenues in arriving at reported net revenues.

The Company’s discounts and customer rebates are known at the

time of sale;

correspondingly, the Company reduces gross product sales for such discounts and customer rebates.

The Company estimates

customer returns and allowances based on information derived from historical transaction detail and accounts for such provisions as contra

revenue during the same period in which the related revenues are earned.

The Company has determined that the population of its product-based

contracts with customers are homogenous, supporting the ability to record estimates for returns and allowances to be applied to the entire

product-based portfolio population.

Customer discounts, returns, and rebates on telehealth revenues approximated $ 1.1 million and $ 871 thousand for the three months ended September 30, 2022

and 2021, respectively.

Customer discounts, returns, and rebates on telehealth revenues approximated $ 4.2 million and $ 3.5 million for

the nine months ended September 30, 2022 and 2021, respectively.

Company, through its majority-owned subsidiary WorkSimpli, offers a subscription-based service providing a suite of software applications

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for the service are recorded net of the Company’s known discount rates.

As of June 30, 2022 and December 31, 2021, the Company

As of September 30, 2022 and December 31, 2021, the Company

has accrued contract liabilities, as deferred revenue, of approximately $ 2.4 million and $ 1.5 million, respectively, which represent

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Customer discounts and allowances on WorkSimpli revenues approximated $ 710 thousand and $ 377 thousand for the

three months ended June 30, 2022 and 2021, respectively.

Customer discounts and allowances on WorkSimpli revenues approximated $ 1.0 million

and $ 1.2 million for the six months ended June 30, 2022 and 2021, respectively.

the three and six months ended June 30, 2022 and 2021, the Company had the following disaggregated revenue:

three months ended September 30, 2022 and 2021, respectively.

Customer discounts and allowances on WorkSimpli revenues approximated $ 1.7

million and $ 1.6 million for the nine months ended September 30, 2022 and 2021, respectively.

the three and nine months ended September 30, 2022 and 2021, the Company had the following disaggregated revenue:

SCHEDULE OF DISAGGREGATED REVENUE

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Telehealth revenue

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yet to be recognized initial 14-day trial period collections.

OF CONTRACT WITH CUSTOMER LIABILITY

Three Months Ended June 30,

Six Months Ended June 30,

SCHEDULE OF CONTRACT WITH CUSTOMER LIABILITY

Three Months Ended September 30,

Nine Months Ended September 30,

Beginning of period

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End of period

Company determines if an arrangement is a lease at inception.

Operating lease right-of-use (“ROU”) assets are included in

right-of-use assets, net on the unaudited condensed consolidated balance sheets.

The current and long-term components of operating lease

liabilities are included in the current operating lease liabilities and noncurrent operating lease liabilities, respectively, on the

unaudited condensed consolidated balance sheets.

lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over

the lease term.

As most of the Company’s leases do not provide an implicit rate, the Company uses an incremental borrowing rate based

on the information available at the commencement date in determining the present value of future payments.

Certain leases may include

options to extend or terminate the lease.

Lease expense for minimum lease payments is recognized on a straight-line basis over the lease

Leases with an initial term of 12 months or less are not recorded in the balance sheet.

receivable principally consist of amounts due from third-party merchant processors, who process our subscription revenues;

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and current economic conditions in its evaluation of an allowance for future refunds and chargebacks.

As of June 30, 2022 and December

As of September 30, 2022 and December

31, 2021, the reserve for sales returns and allowances was approximately $ 344 thousand and $ 477 thousand, respectively.

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balance sheets.

of June 30, 2022 and December 31, 2021, inventory primarily consisted of finished goods related to the Company’s OTC products included

in the telehealth revenue section of the table above.

Inventory is maintained at the Company’s third-party warehouse location in

Wyoming and at various Amazon fulfillment centers.

of September 30, 2022 and December 31, 2021, inventory primarily consisted of finished goods related to the Company’s OTC products

included in the telehealth revenue section of the table above.

Inventory is maintained at the Company’s third-party warehouse location

in Wyoming and at various Amazon fulfillment centers.

The Company also maintains inventory at a company owned warehouse in Pennsylvania.

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inventory with the net realizable value and an allowance is made for writing down inventory to net realizable, if lower.

As of both June

30, 2022 and December 31, 2021, the Company recorded an inventory reserve in the amount of $ 57 thousand.

of June 30, 2022 and December 31, 2021, the Company’s inventory consisted of the following:

As of September

30, 2022 and December 31, 2021, the Company recorded an inventory reserve in the amount of $ 44 thousand and $ 57 thousand, respectively.

of September 30, 2022 and December 31, 2021, the Company’s inventory consisted of the following:

SUMMARY OF INVENTORY

September 30,

Finished Goods - Products

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previously paid.

As of June 30, 2022 and December 31, 2021, the Company has approximately $ 441 thousand and $ 204 thousand, respectively,

As of September 30, 2022 and December 31, 2021, the Company has approximately $ 108 thousand and $ 204 thousand, respectively,

of product deposits with multiple vendors for the purchase of raw materials or finished goods.

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of the product deposit.

As of June 30, 2022 and December 31, 2021, the Company approximates its implicit purchase commitments to be $ 1.9

million and $ 511 thousand, respectively.

As of June 30, 2022 and December 31, 2021, the vast majority of these product deposits are with

one vendor that manufacturers the Company’s finished goods inventory for its Shapiro hair care product line.

As of September 30, 2022 and December 31, 2021, the Company approximates its implicit purchase commitments to

be $ 582 thousand and $ 511 thousand, respectively.

As of September 30, 2022 and December 31, 2021, the vast majority of these product

deposits are with two vendors that manufacture the Company’s finished goods inventory for its ShapiroMD and RexMD product lines.

Software Costs

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for capitalization, in accordance with ASC 350-40 , Internal-Use Software , are expensed as incurred.

As of June 30, 2022 and December

31, 2021, the Company capitalized $ 8.1 million and $ 3.6 million, respectively, related to internally developed software costs which are

amortized over the useful life and included in development costs on our statement of operations.

As of September 30, 2022 and

December 31, 2021, the Company capitalized $ 10.3 million and $ 3.6 million, respectively, related to internally developed software costs

which are amortized over the useful life and included in development costs on our statement of operations.

and Intangible Assets

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the asset may be impaired.

Goodwill in the amount of $ 9.5 million was acquired in conjunction with the Cleared acquisition during

the three months ended March 31, 2022, for which the purchase accounting is preliminary (see Note 3).

The Company recorded a $ 2.7

million goodwill impairment charge during the three months ended June 30, 2022 related to

a decline in the estimated fair value of Cleared as a result of a decline in the Cleared financial projections .

amortizable intangible assets include:

(1) intangible assets acquired related to the ResumeBuild brand (with original cost of approximately

$ 4.5 million) with an estimated useful life of five years, (2) a customer relationship asset (with original cost of approximately $ 1,007,000 )

with an estimated useful life of three years , (3) a purchased license (with original cost of $ 200,000 ), with an estimated useful life

of ten years and (4) purchased domain names (with original costs of $ 22,731 ) with estimated useful lives of three years .

Intangible assets

are amortized over their estimated lives using the straight-line method.

Costs incurred to renew or extend the term of recognized intangible

assets are capitalized and amortized over the useful life of the asset.

Goodwill in the amount of $ 8.4 million was acquired in conjunction with the Cleared acquisition during the

three months ended March 31, 2022 (see Note 3).

The Company recorded a $ 2.7 million goodwill impairment charge during the nine months

ended September 30, 2022 related to a decline in the estimated fair value of Cleared as a result

of a decline in the Cleared financial projections .

Other intangible assets are amortized over their estimated lives using the straight-line method.

Costs incurred

to renew or extend the term of recognized intangible assets are capitalized and amortized over the useful life of the asset.

of Long-Lived Assets

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fair values of the assets.

As of June 30, 2022 and December 31, 2021, the Company determined that no events or changes in circumstances

As of September 30, 2022 and December 31, 2021, the Company determined that no events or changes in circumstances

existed that would indicate any impairment of its long-lived assets.

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consistent with the PPP.

the six months ended June 30, 2022 and 2021, the Company had a total of $ 63,400 and $ 184,914 , respectively, of its PPP loans forgiven

the nine months ended September 30, 2022 and 2021, the Company had a total of $ 63,400 and $ 184,914 , respectively, of its PPP loans forgiven

Small Business Administration (“SBA”) (See Note 6).

As of June 30, 2022, the Company had no remaining PPP loan

As of September 30, 2022, the Company had no remaining PPP

loan balance.

As of December 31, 2021, the PPP loan balance was $ 63,400 and is reflected on the Company’s unaudited condensed consolidated

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LifeMD PR and WorkSimpli file tax returns in Puerto Rico.

are limited liability companies and file separate tax returns with any tax liabilities or benefits passing through to its members.

Both are limited

liability companies and file separate tax returns with any tax liabilities or benefits passing through to its members.

Company records current and deferred taxes in accordance with ASC 740, Accounting for Income Taxes .

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earnings (loss) per common share (“EPS”) is based on the weighted average number of shares outstanding during each period

Convertible securities, warrants, and options to purchase common stock are included as common stock equivalents only when dilutive.

Convertible securities, warrants, and options to purchase common stock are included as common stock equivalents only when

Potential common stock equivalents are excluded from dilutive earnings per share when the effects would be antidilutive.

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SCHEDULE OF POTENTIALLY DILUTIVE SECURITIES

June 30, 2022

June 30, 2021

June 30, 2022

June 30, 2021

September 30, 2022

September 30, 2021

September 30, 2022

September 30, 2021

September 30, 2022

September 30, 2021

September 30, 2022

September 30, 2021

Series B Preferred Stock

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current manufacturers or pharmacies cease to perform adequately.

As of June 30, 2022, we utilized four (4) suppliers for fulfillment

services, seven (7) suppliers for manufacturing finished goods, four (4) suppliers for packaging, bottling, and labeling, and two (2) suppliers

for prescription medications.

As of December 31, 2021, we utilized four (4) suppliers for fulfillment services, six (6) suppliers for

manufacturing finished goods and four (4) suppliers for packaging, bottling, and labeling.

As of September 30, 2022, we utilized four (4) suppliers for fulfillment

services, seven (7) suppliers for manufacturing finished goods, four (4) suppliers for packaging, bottling, and labeling, and three (3)

suppliers for prescription medications.

As of December 31, 2021, we utilized four (4) suppliers for fulfillment services, six (6) suppliers

for manufacturing finished goods and four (4) suppliers for packaging, bottling, and labeling.

Issued Accounting Pronouncements

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3 – ACQUISITIONS

January 18, 2022, the Company completed the acquisition of Cleared and accounted for the transaction using the acquisition method in

January 18, 2022, the Company completed the acquisition of Cleared.

Cleared is a transformational addition to the Company’s growing

portfolio of telehealth capabilities which moves us beyond treating lifestyle conditions into chronic conditions with large addressable

market demand.

The Company accounted for the transaction using the acquisition method in

accordance with ASC 805, Business Combinations , with the purchase price being allocated to tangible and identifiable intangible

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statements commencing on the acquisition date.

preliminary purchase price was approximately $ 9.1 million, including cash paid upfront of approximately $ 1.0 million and payable in the

future of approximately $ 3.0 million, and contingent consideration of $ 5.1 million.

The purchase agreement includes up to $ 72.8 million

of potential earn-out payable in cash or stock upon achievement of revenue targets, which is recognized as contingent consideration.

The Company, with the assistance of a third-party valuation

expert, estimated the fair value of the acquired tangible and identifiable intangible assets using significant estimates such as revenue

The allocation of the consideration transferred to the assets acquired and the liabilities assumed is preliminary.

can be revised as a result of additional information obtained due to the finalization of the valuation inputs and assumptions as well

as completing the assessment of the tax attributes of the business combination.

Additional adjustments that could have a material impact

on the Company’s results of operations and financial position may be recorded within the measurement period, which will not exceed

one year from the acquisition date.

following table summarizes the preliminary acquisition date fair values of assets acquired and liabilities assumed:

purchase price was approximately $ 9.1 million, including cash paid upfront of approximately $ 1.0 million and payable in the future of

approximately $ 3.0 million, and contingent consideration of $ 5.1 million.

The purchase agreement includes up to $ 72.8 million of potential

earn-out payable in cash or stock upon achievement of revenue targets, which is recognized as contingent consideration.

Company, with the assistance of a third-party valuation expert, estimated the fair value of the acquired tangible and identifiable intangible

assets using significant estimates such as revenue projections.

following table summarizes the acquisition date fair values of assets acquired and liabilities assumed:

SCHEDULE OF FAIR VALUE OF ASSETS AND LIABILITIES

Preliminary purchase price, net of cash acquired

Purchase price, net of cash acquired

Intangible assets

Accounts payable and other current liabilities

amount allocated to goodwill and intangible assets reflects the benefits the Company expects to realize from the growth of the acquisition’s

purchase price and purchase price allocation for Cleared was finalized as of September 30, 2022 with no significant changes to preliminary

Based on the final purchase price allocation, the aggregate goodwill recognized was $ 8.4 million, which is not expected to be

deductible for income tax purposes.

The amount allocated

to goodwill and intangible assets reflects the benefits the Company expects to realize from the growth of the acquisition’s operations.

The pro forma financial information, assuming the acquisition had taken place on January 1, 2021,

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and, accordingly, have not been presented.

the three months ended June 30, 2022, the Company recorded a reduction of $ 2.7 million to the Cleared contingent consideration as a result

of the remeasurement of the fair value.

The decline in the estimated fair value of the Cleared contingent consideration is a result of

a decline in the Cleared financial projections through the earnout period.

During the three months ended June 30, 2022, the Company also

recorded a $ 2.7 million goodwill impairment charge based on the decline in the Cleared financial projections (See Note 4).

the three and nine months ended September 30, 2022, the Company recorded an increase of $ 248 thousand and a decrease of $ 2.5 million,

respectively, to the Cleared contingent consideration as a result of the remeasurement of the fair value.

The decline in the estimated

fair value of the Cleared contingent consideration is a result of a decline in the Cleared financial projections through the earnout

During the nine months ended September 30, 2022, the Company also recorded a $ 2.7 million goodwill impairment charge based on

the decline in the Cleared financial projections (See Note 4).

February 2022, WorkSimpli closed on the ResumeBuild APA to purchase the related intangible assets associated with the ResumeBuild brand.

WorkSimpli paid to the Seller a purchase price of $ 4,500,000 ,

including cash paid upfront and contingent consideration of $ 500,000 .

In accordance with

ASC 805, Business Combinations , the Company accounted for the ResumeBuild APA as an acquisition of assets as substantially all

the fair value of the gross assets acquired is concentrated in a group of similar assets.

The Company has elected to group the complementary

intangible assets acquired as a single brand intangible asset.

Additionally, the Seller is entitled to quarterly payments equal to the

greater of 15 %

of net profits (as defined in the ResumeBuild APA) or $ 62,500 ,

The purchase price was $ 4.5 million, including cash paid upfront of $ 4.0 million and contingent

consideration of $ 50 0 thousand .

In accordance with ASC 805, Business Combinations , the Company accounted for the ResumeBuild

APA as an acquisition of assets as substantially all the fair value of the gross assets acquired is concentrated in a group of similar

The Company has elected to group the complementary intangible assets acquired as a single brand intangible asset.

Additionally,

the Seller is entitled to quarterly payments equal to the greater of 15 % of net profits (as defined in the ResumeBuild APA) or $ 62,500 ,

for a two-year period ending on the two-year anniversary of the closing of the Acquisition.

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4 – GOODWILL AND INTANGIBLE ASSETS

of June 30, 2022 and December 31, 2021, the Company has the following amounts related to goodwill and intangible assets:

of September 30, 2022 and December 31, 2021, the Company’s goodwill balance related to the Cleared acquisition was $ 5.7 million

and $ 0 , respectively.

During the nine months ended September 30, 2022, the Company recorded a $ 2.7 million goodwill impairment charge

related to a decline in the estimated fair value of Cleared as a result of a decline in the Cleared financial projections.

of September 30, 2022 and December 31, 2021, the Company has the following amounts related to amortizable intangible assets:

SCHEDULE OF GOODWILL AND INTANGIBLE ASSETS

Goodwill and Intangible Assets as at:

Goodwill – Cleared Acquisition

Other Amortizable Intangible Assets:

September 30,

Amortizable Intangible Assets:

ResumeBuild brand

Customer relationship asset

Cleared trade name

Cleared developed technology

Cleared customer relationships

Purchased licenses

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( 1,209,310 )

Total net goodwill and amortizable intangible assets

the three months ended June 30, 2022, the Company recorded a $ 2.7 million goodwill impairment charge related to a decline in the estimated

fair value of Cleared as a result of a decline in the Cleared financial projections.

aggregate amortization expense of the Company’s intangible assets for the three months ended June 30, 2022 and 2021 was approximately

Total net amortizable intangible assets

aggregate amortization expense of the Company’s intangible assets for the three months ended September 30, 2022 and 2021 was $ 325,495

and $ 617 , respectively.

The aggregate amortization expense of the Company’s intangible assets for the six months ended

June 30, 2022 and 2021 was approximately $ 341,287 and $ 339,840 , respectively.

The aggregate amortization expense of the Company’s intangible assets for the nine months ended September

30, 2022 and 2021 was $ 666,782 and $ 340,457 , respectively.

Total amortization expense for the remainder of 2022 is $ 259,762 .

Total amortization expense for 2023 through 2026 is approximately $ 900,000 per year and $ 112,500 for 2027.

Total amortization

expense for 2023 through 2026 is approximately $ 1.0 million per year, for 2027 is approximately $ 200,000 and for 2028 through 2031 is

approximately $ 92,000 per year.

5 – ACCRUED EXPENSES

of June 30, 2022 and December 31, 2021, the Company has the following amounts related to accrued expenses:

of September 30, 2022 and December 31, 2021, the Company has the following amounts related to accrued expenses:

SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES

September 30,

Accrued selling and marketing expenses

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lease payments on agreements entered into before February 15, 2020, and utility payments under lease agreements entered into before February

At least 60% of the proceeds must be used for payroll costs and certain other expenses, and no more than 40% may be used on non-payroll

Proceeds from the PPP Loan used by the Company for the approved expense categories may be fully forgiven by the SBA, if the

Company satisfies applicable employee headcount and compensation requirements.

During the six months ended June 30, 2022 and 2021, the

Company had a total of $ 63,400 and $ 184,914 , respectively, of its PPP loans forgiven by the SBA which is included in gain on debt forgiveness

on the accompanying unaudited condensed consolidated statement of operations.

As of June 30, 2022, the Company had no remaining PPP loan

As of December 31, 2021, the PPP loan balance was $ 63,400 and is reflected on the Company’s unaudited condensed consolidated

balance sheet as current liabilities, within notes payable, net.

interest expense on notes payable, inclusive of amortization of debt discounts, amounted to $ 0 and $ 229,351 for the three months ended

June 30, 2022 and 2021, respectively.

Total interest expense on notes payable, inclusive of amortization of debt discounts, amounted

to $ 0 and $ 368,814 for the six months ended June 30, 2022 and 2021, respectively.

At least 60% of the proceeds must be used for payroll costs and certain other expenses, and no more than 40% may be used on

non-payroll expenses .

Proceeds from the PPP Loan used by the Company for the approved expense categories may be fully forgiven by the

SBA, if the Company satisfies applicable employee headcount and compensation requirements.

During the nine months ended September 30,

2022 and 2021, the Company had a total of $ 63,400 and $ 184,914 , respectively, of its PPP loans forgiven by the SBA which is included

in gain on debt forgiveness on the accompanying unaudited condensed consolidated statement of operations.

As of September 30, 2022, the

Company had no remaining PPP loan balance.

As of December 31, 2021, the PPP loan balance was $ 63,400 and is reflected on the Company’s

condensed consolidated balance sheet as current liabilities, within notes payable, net.

interest expense on notes payable, inclusive of amortization of debt discounts, amounted to $ 0 for both the three months ended September

30, 2022 and 2021, respectively.

Total interest expense on notes payable, inclusive of amortization of debt discounts, amounted to $ 0

and $ 10,647 for the nine months ended September 30, 2022 and 2021, respectively.

7 – STOCKHOLDERS’ EQUITY

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having an aggregate offering price of up to $ 60 million .

Under the 2021 Shelf, the Company had the ability to raise up to $ 150 million.

The Company has approximately $ 59.5 million available under the ATM Sales Agreement and $ 32 million available under the 2021 Shelf as

of June 30, 2022.

the six months ended June 30, 2022, the Company issued an aggregate of 25,535 shares of common stock related to the cashless exercise

the six months ended June 30, 2022, the Company issued an aggregate of 90,400 shares of common stock related to the exercise of options

for gross proceeds of $ 90,400 .

the six months ended June 30, 2022, the Company issued an aggregate of 22,000 shares of common stock related to the exercise of warrants

for gross proceeds of $ 38,500 .

The Company has approximately $ 59.5 million available under the ATM Sales Agreement

and $ 32 million available under the 2021 Shelf as of September 30, 2022.

the nine months ended September 30, 2022, the Company issued an aggregate of 29,691 shares of common stock related to the cashless exercise

the nine months ended September 30, 2022, the Company issued an aggregate of 90,400 shares of common stock related to the exercise of

options for gross proceeds of $ 90,400 .

the nine months ended September 30, 2022, the Company issued an aggregate of 22,000 shares of common stock related to the exercise of

warrants for gross proceeds of $ 38,500 .

Interest Purchase Agreement

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Conversion Labs PR (now “LifeMD PR”), a majority owned subsidiary;

Taggart International Trust, an entity

controlled by the Company’s Chief Executive Officer, Mr.

Taggart International Trust, an entity controlled

by the Company’s Chief Executive Officer, Mr.

Justin Schreiber;

and American Nutra Tech LLC, a company controlled

by its Chief Innovation and Marketing Officer, Mr.

and American Nutra Tech LLC, a company controlled by its Chief

Innovation and Marketing Officer, Mr.

Stefan Galluppi (Mr.

Schreiber, Taggart International Trust, Mr.

and American Nutra Tech LLC each a “Related Party” and collectively, the “Related Parties”).

Pursuant to the

MIPA, the Company purchased 21.83333 %

of the membership interests (the “Remaining Interests”) of Conversion Labs PR from the Related Parties, bringing the

Company’s ownership of Conversion Labs PR to 100 % .

Galluppi, and American Nutra Tech

LLC each a “Related Party” and collectively, the “Related Parties”).

Pursuant to the MIPA, the Company purchased

21.83333 % of the membership interests (the “Remaining Interests”) of Conversion Labs PR from the Related Parties, bringing

the Company’s ownership of Conversion Labs PR to 100 %.

consideration for the Company’s purchase of the Remaining Interests from the Related Parties, Mr.

Schreiber and Mr.

agreed to cancel all potential issuances of restricted stock and or options related to their employment with the Company, in

exchange for the immediate issuance of 500,000

shares of the Company’s restricted common stock to each of Mr.

Galluppi agreed

to cancel all potential issuances of restricted stock and or options related to their employment with the Company, in exchange for the

immediate issuance of 500,000

shares of the Company’s restricted common

stock to each of Mr.

Schreiber and Mr.

Galluppi (the “Initial

Issuances”) (equal to 1,000,000

Galluppi (the “Initial Issuances”) (equal to 1,000,000

shares in the aggregate).

Schreiber and Mr.

Galluppi were also entitled to additional issuances pursuant to certain milestones

shares of the Company’s Common Stock to each of Mr.

Galluppi were also entitled to additional issuances pursuant to certain milestones as follows:

shares of the Company’s Common Stock to

Schreiber and Mr.

Galluppi ( 1,000,000

shares in the aggregate) on the business day following a consecutive ninety (90) day period, during which the Company’s Common

Stock shall have traded at an average price per share equal to or higher than $ 2.50

(the “First Milestone”), and (ii) an additional 500,000

shares of the Company’s Common Stock to each of Mr.

shares in the aggregate) on the business day

following a consecutive ninety (90) day period, during which the Company’s Common Stock shall have traded at an average price per

share equal to or higher than $ 2.50

(the “First Milestone”), and (ii)

an additional 500,000

shares of the Company’s Common Stock to

Schreiber and Mr.

Galluppi ( 1,000,000

shares in the aggregate) following a consecutive ninety (90) day period during which the Common Stock shall have traded at an

average price per share equal to or higher than $ 3.75

(the “Second Milestone” and, together with the First Milestones, the “Milestones”).

Having achieved the

Milestones, the Company, on December 9, 2020, issued an aggregate of 1,000,000

shares of the Company’s Common Stock to each of Mr.

shares in the aggregate) following a consecutive

ninety (90) day period during which the Common Stock shall have traded at an average price per share equal to or higher than $ 3.75

(the “Second Milestone” and, together

with the First Milestones, the “Milestones”).

Having achieved the Milestones, the Company, on December 9, 2020, issued an

aggregate of 1,000,000

shares of the Company’s Common Stock to

Schreiber and Mr.

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shares in the aggregate).

The Milestone Shares are subject to the previously disclosed 180-day Lock-Up Agreement, each of which Mr.

Schreiber and Mr.

Galluppi signed on November 3, 2020.

Company recorded an aggregate expense of $ 18,060,000 reflected in general and administrative expenses during the three months ended September

30, 2020 for the issuance of these 2,000,000 shares, of which 1,200,000 shares were issued during the three months ended March 31, 2021.

Stock Transactions During the Six Months Ended June 30, 2022

the six months ended June 30, 2022, the Company issued an aggregate of 147,500 shares of common stock for services expensed in prior

Stock Transactions During the Nine Months Ended September 30, 2022

the nine months ended September 30, 2022, the Company issued an aggregate of 211,250 shares of common stock for services expensed in

prior periods.

Noncontrolling

the three months ended June 30, 2022, net income attributed to the non-controlling interest amounted to $ 46,001 and for the three months

ended June 30, 2021, net loss attributed to the non-controlling interest amounted to $ 197,973 .

During both the three months ended June

30, 2022 and 2021, the Company paid distributions to non-controlling shareholders of $ 36,000 .

For the six months ended June 30, 2022,

net income attributed to the non-controlling interest amounted to $ 70,727 and for the six months ended June 30, 2021, net loss attributed

to the non-controlling interest amounted to $ 468,476 .

During both the six months ended June 30, 2022 and 2021, the Company paid distributions

to non-controlling shareholders of $ 72,000 .

the three months ended September 30, 2022, net income attributed to the non-controlling interest amounted to $ 83,737 and for the three

months ended September 30, 2021, net loss attributed to the non-controlling interest amounted to $ 62,706 .

During both the three months

ended September 30, 2022 and 2021, the Company paid distributions to non-controlling stockholders of $ 36,000 .

For the nine months ended

September 30, 2022, net income attributed to the non-controlling interest amounted to $ 154,464 and for the nine months ended September

30, 2021, net loss attributed to the non-controlling interest amounted to $ 531,182 .

During both the nine months ended September 30, 2022

and 2021, the Company paid distributions to non-controlling stockholders of $ 108,000 .

Software Restructuring Transaction

January 22, 2021 (the “WSS Effective Date”), the Company consummated the WSS Restructuring.

To effect the WSS

Restructuring the Company’s wholly-owned subsidiary Conversion Labs PR (now “LifeMD PR”), entered into a series of

membership interest exchange agreements, pursuant to which, Conversion Labs PR exchanged that certain promissory note, dated May 8,

2019 with an outstanding balance of $ 375,823

(the “CVLB PR Note”), issued by WSS in favor of Conversion Labs PR, for 37,531

newly issued membership interests of WSS (the “Exchange”).

Upon consummation of the Exchange the CVLB PR Note was

extinguished.

January 22, 2021 (the “WSS Effective Date”), the Company consummated a transaction to restructure the ownership of WorkSimpli

(the “WSS Restructuring”) and concurrently increased its ownership interest in WorkSimpli to 85.6%.

To effect the WSS Restructuring

the Company’s wholly-owned subsidiary Conversion Labs PR (now “LifeMD PR”), entered into a series of membership interest

exchange agreements, pursuant to which, Conversion Labs PR exchanged that certain promissory note, dated May 8, 2019 with an outstanding

balance of $ 375,823 (the “CVLB PR Note”), issued by WSS in favor of Conversion Labs PR, for 37,531 newly issued membership

interests of WSS (the “Exchange”).

Upon consummation of the Exchange the CVLB PR Note was extinguished.

Concurrently,

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with the WSS Restructuring, Conversion Labs PR entered into option agreements with Sean Fitzpatrick (the “Fitzpatrick Option Agreement”)

and Varun Pathak (the “Pathak Option Agreement” together with Fitzpatrick Option Agreement the “Option Agreements”),

and Varun Pathak (the “Pathak Option Agreement” and together with Fitzpatrick Option Agreement the “Option Agreements”),

pursuant to which Conversion Labs PR granted options to purchase membership interest units of WSS.

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net profit margin in any fiscal quarter .

Pathak Options shall vest in accordance with the following (i) 700 membership interests upon WSS achieving $ 2,500,000 of gross sales

in any fiscal quarter (ii) 700 membership interests upon WSS achieving $ 4,000,000 of gross sales in any fiscal quarter, and (iii) 700

membership interests upon WSS achieving $ 8,000,000 of gross sales with a ten percent (10%) net profit margin in any fiscal quarter.

first two tranches of performance options granted to Sean Fitzpatrick and Varun Pathak vested immediately after the consummation of the

restructuring transaction and therefore have been recorded as part of the acquisition through equity.

The third tranche is not deemed

probable and therefore has not been recognized to date.

Pathak Option Agreement grants Varun Pathak the option to purchase 2,100 membership interest units of WSS for an exercise price of $ 1.00

per membership interest unit.

The Pathak Options vest in accordance with the following (i) 700 membership interests upon WSS achieving

$ 2,500,000 of gross sales in any fiscal quarter (ii) 700 membership interests upon WSS achieving $ 4,000,000 of gross sales in any fiscal

quarter, and (iii) 700 membership interests upon WSS achieving $ 8,000,000 of gross sales with a ten percent (10%) net profit margin in

any fiscal quarter .

September 30, 2022, Sean Fitzpatrick and Varun Pathak exercised their options to purchase 10,300 and 2,100 membership interest units,

respectively, of WorkSimpli for an exercise price of $ 1.00 per membership interest unit under the Option Agreements.

Following the exercise

of the Option Agreements, Conversion Labs PR decreased its ownership interest in WorkSimpli from 85.58 % to 73.64 %.

Equity Incentive Plan (the “2020 Plan”)

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Approval of the 2020 Plan was included as Proposal 1 in the Company’s

definitive proxy statement for its Special Meeting of Shareholders filed with the Securities and Exchange Commission on December 7, 2020.

definitive proxy statement for its Special Meeting of Stockholders filed with the Securities and Exchange Commission on December 7, 2020.

The 2020 Plan is administered by the Compensation Committee of the Board of Directors (the “Board”) and initially provided

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the maximum number of shares of the Company’s common stock available for issuance under the 2020 Plan by 1,500,000 shares.

June 30, 2022, the Plan provided for the issuance of up to 4,800,000 shares of Common Stock.

Remaining authorization under the 2020 Plan

was 1,787,885 shares as of June 30, 2022.

September 30, 2022, the Plan provided for the issuance of up to 4,800,000 shares of Common Stock.

Remaining authorization under the 2020

Plan was 1,265,885 shares as of September 30, 2022.

forms of award agreements to be used in connection with awards made under the 2020 Plan to the Company’s executive officers and

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the Company had granted service-based stock options and performance-based stock options separate from the 2020 Plan.

the six months ended June 30, 2022, the Company issued an aggregate of 288,500 stock options to employees under the 2020 Plan and the

These stock options have a contractual term of 4 to 5 years and vest in increments, which fully vest the options over a two

to three-year period, dependent on the specific agreements’ terms.

following is a summary of outstanding options activity under our 2020 Plan for the six months ended June 30, 2022:

the nine months ended September 30, 2022, the Company issued an aggregate of 332,000 stock options to employees under the 2020 Plan and

the prior plan.

These stock options have a contractual term of 4 to 5 years and vest in increments, which fully vest the options over

a two to three-year period, dependent on the specific agreements’ terms.

following is a summary of outstanding options activity under our 2020 Plan for the nine months ended September 30, 2022:

OF OPTION ACTIVITY

Number of Shares

Exercise Price

Balance, December 31, 2021

Cancelled/Forfeited/Expired

Balance at June 30, 2022

Balance at September 30, 2022

Exercisable at December 31, 2021

Exercisable at June 30, 2022

Exercisable at September 30, 2022

total fair value of the options granted was $ 833,030 , which was determined by the Black-Scholes Pricing Model with the following assumptions:

dividend yield of 0 %, expected term of 4 years, volatility of 135.65 % – 691.48 %, and risk-free rate of 0.90 %– 3.60 %.

compensation expense under the 2020 Plan options above was $ 1,840,116 and $ 1,239,421 for the three months ended June 30, 2022 and 2021,

respectively, with unamortized expense remaining of $ 9,225,969 as of June 30, 2022.

Total compensation expense under the 2020 Plan options

above was $ 3,484,606 and $ 2,196,074 for the six months ended June 30, 2022 and 2021, respectively.

following is a summary of outstanding service-based options activity (prior to the establishment of our 2020 Plan above) for the six

months ended June 30, 2022:

compensation expense under the 2020 Plan options above was $ 1,402,130 and $ 1,638,354 for the three months ended September 30, 2022 and

2021, respectively, with unamortized expense remaining of $ 7,916,419 as of September 30, 2022.

Total compensation expense under the 2020

Plan options above was $ 4,886,737 and $ 3,834,429 for the nine months ended September 30, 2022 and 2021, respectively.

following is a summary of outstanding service-based options activity (prior to the establishment of our 2020 Plan above) for the nine

months ended September 30, 2022:

SCHEDULE OF OPTION ACTIVITY

Outstanding Number of Shares

Price per Share

Average Remaining Contractual Life

Average Exercise Price per Share

Options Outstanding Number of Shares

Exercise Price per Share

Weighted Average Remaining Contractual Life

Weighted Average Exercise Price per Share

Balance, December 31, 2021

Balance at June 30, 2022

Cancelled/Forfeited/Expired

Balance at September 30, 2022

Exercisable December 31, 2021

Exercisable at June 30, 2022

Exercisable at September 30, 2022

total fair value of the options granted was $ 205,995 , which was determined by the Black-Scholes Pricing Model with the following assumptions:

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Total compensation expense under the

above service-based option plan was $ 547,381 and $ 529,508 for the three months ended June 30, 2022 and 2021, respectively, with unamortized

expense remaining of $ 3,801,698 as of June 30, 2022.

Total compensation expense under the above service-based option plan was $ 1,097,781

and $ 936,493 for the six months ended June 30, 2022 and 2021, respectively.

Of the total service-based options exercised during the six

months ended June 30, 2022, 40,000 options were exercised on a cashless basis, which resulted in 25,535 shares issued and 90,400 options

were exercised for cash.

following is a summary of outstanding performance-based options activity for the six months ended June 30, 2022:

above service-based option plan was $ 493,097 and $ 635,220 for the three months ended September 30, 2022 and 2021, respectively, with

unamortized expense remaining of $ 3,102,607 as of September 30, 2022.

Total compensation expense under the above service-based option

plan was $ 1,590,878 and $ 1,571,712 for the nine months ended September 30, 2022 and 2021, respectively.

Of the total service-based options

exercised during the nine months ended September 30, 2022, 59,000 options were exercised on a cashless basis, which resulted in 29,691

shares issued and 90,400 options were exercised for cash.

following is a summary of outstanding performance-based options activity for the nine months ended September 30, 2022:

OF OPTION ACTIVITY

Outstanding Number of Shares

Price per Share

Average Remaining Contractual Life

Average Exercise Price per Share

Options Outstanding Number of Shares

Exercise Price per Share

Weighted Average Remaining Contractual Life

Weighted Average Exercise Price per Share

Balance at December 31, 2021

Balance at June 30, 2022

Cancelled/Forfeited/Expired

Balance at September 30, 2022

Exercisable December 31, 2021

Exercisable at June 30, 2022

Exercisable at September 30, 2022

total fair value of the options granted was $ 617,980 , which was determined by the Black-Scholes Pricing Model with the following assumptions:

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Total compensation expense under the

above performance-based option plan was $ 105,797 and $ 173,397 for the three months ended June 30, 2022 and 2021, respectively, with unamortized

above performance-based option plan was $ 105,797 and $ 0 for the three months ended September 30, 2022 and 2021, respectively, with unamortized

expense remaining of $ 105,797 .

Total compensation expense under the above performance-based option plan was $ 317,391 and $ 173,397 for

the six months ended June 30, 2022 and 2021, respectively.

the nine months ended September 30, 2022 and 2021, respectively.

Stock Units (RSUs) (under the 2020 Plan)

following is a summary of outstanding RSU activity under our 2020 Plan for the six months ended June 30, 2022:

following is a summary of outstanding RSU activity under our 2020 Plan for the nine months ended September 30, 2022:

OF WARRANT AND RESTRICTED STOCK OUTSTANDING AND EXERCISABLE

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Balance at December 31, 2021

Balance at June 30, 2022

total fair value of the 563,000 RSUs granted was $ 1,751,235 which was determined using the fair value of the quoted market price on the

date of grant.

Total compensation expense under the 2020 Plan RSUs above was $ 595,038 and $ 0 for the three months ended June 30, 2022

and 2021, respectively, with unamortized expense remaining of $ 4,243,941 as of June 30, 2022.

Total compensation expense under the 2020

Plan RSUs above was $ 1,571,158 and $ 357,163 for the six months ended June 30, 2022 and 2021, respectively.

During the six months ended

June 30, 2022, 87,625 RSUs vested, of which 47,500 RSUs were issued.

Balance at September 30, 2022

total fair value of the 1,047,500 RSUs granted was $ 3,071,940 which was determined using the fair value of the quoted market price on

the date of grant.

Total compensation expense under the 2020 Plan RSUs above was $ 702,598 and $ 232,268 for the three months ended September

30, 2022 and 2021, respectively, with unamortized expense remaining of $ 4,862,048 as of September 30, 2022.

Total compensation expense

under the 2020 Plan RSUs above was $ 2,273,756 and $ 589,431 for the nine months ended September 30, 2022 and 2021, respectively.

the nine months ended September 30, 2022, 172,125 RSUs vested, of which 111,250 RSUs were issued.

(outside of 2020 Plan)

following is a summary of outstanding RSU activity outside of the 2020 Plan for the six months ended June 30, 2022:

following is a summary of outstanding RSU activity outside of the 2020 Plan for the nine months ended September 30, 2022:

OF WARRANT AND RESTRICTED STOCK OUTSTANDING AND EXERCISABLE

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Balance at December 31, 2021

Balance at June 30, 2022

Balance at September 30, 2022

total fair value of the 60,000 RSUs granted was $ 215,400 which was determined using the fair value of the quoted market price on the

date of grant.

Total compensation expense for RSUs outside of the 2020 Plan was $ 347,700 and $ 0 for the three months ended June 30, 2022

and 2021, respectively, with unamortized expense remaining of $ 5,297,700 as of June 30, 2022.

Total compensation expense for RSUs outside

of the 2020 Plan was $ 938,700 and $ 0 for the six months ended June 30, 2022 and 2021, respectively.

During the six months ended June

30, 2022, 65,000 RSUs vested, of which 50,000 were issued.

following is a summary of outstanding and exercisable warrants activity during the six months ended June 30, 2022:

OF WARRANT AND RESTRICTED STOCK OUTSTANDING AND EXERCISABLE

Outstanding Number of Shares

Price per Share

Average Remaining Contractual Life

Average Exercise Price per Share

Total compensation expense for RSUs outside of the 2020 Plan was $ 225,279 and $ 0 for the three months ended September

30, 2022 and 2021, respectively, with unamortized expense remaining of $ 5,072,421 as of September 30, 2022.

Total compensation expense

for RSUs outside of the 2020 Plan was $ 1,163,978 and $ 0 for the nine months ended September 30, 2022 and 2021, respectively.

nine months ended September 30, 2022, 80,000 RSUs vested, of which 50,000 were issued.

following is a summary of outstanding and exercisable warrants activity during the nine months ended September 30, 2022:

OF WARRANT OUTSTANDING AND EXERCISABLE

Warrants Outstanding Number of Shares

Exercise Price per Share

Weighted Average Remaining Contractual Life

Weighted Average Exercise Price per Share

Balance at December 31, 2021

Cancelled/Forfeited/Expired

Balance at June 30, 2022

Balance at September 30, 2022

Exercisable December 31, 2021

Exercisable June 30, 2022

compensation expense on the above warrants for services was $ 604,974 for both the three months ended June 30, 2022 and 2021, with unamortized

expense remaining of $ 437,279 as of June 30, 2022.

Total compensation expense on the above warrants for services was $ 1,209,948 for both

the six months ended June 30, 2022 and 2021.

total stock-based compensation expense related to common stock issued for services, service-based stock options, performance-based stock

options, warrants and RSUs amounted to $ 4,041,006 and $ 2,547,300 for the three months ended June 30, 2022 and 2021, respectively.

Exercisable September 30, 2022

compensation expense on the above warrants for services was $ 407,312 and $ 604,974 for the three months ended September 30, 2022 and 2021,

respectively, with unamortized expense remaining of $ 29,968 as of September 30, 2022.

Total compensation expense on the above warrants

for services was $ 1,617,260 and $ 1,814,922 for the nine months ended September 30, 2022 and 2021, respectively.

total stock-based compensation expense related to common stock issued for services, service-based stock options, performance-based stock

options, warrants and RSUs amounted to $ 8,513,787 and $ 4,873,075 for the six months ended June 30, 2022 and 2021, respectively.

amounts are included in general and administrative expenses in the unaudited condensed consolidated statement of operations.

expense remaining related to service-based stock options, performance-based stock options, warrants and RSUs was $ 23,218,181 as of June

February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , which supersedes all existing guidance on accounting for leases

in ASC 840, Lease Accounting .

ASU 2016-02 is intended to provide enhanced transparency and comparability by requiring lessees

to record right-of-use assets and corresponding lease liabilities on the balance sheet.

ASU 2016-02 will continue to classify leases

as either finance or operating, with classification affecting the pattern of expense recognition in the statement of income.

options, warrants and RSUs amounted to $ 3,336,213 and $ 3,110,816 for the three months ended September 30, 2022 and 2021, respectively.

The total stock-based compensation expense related to common stock issued for services, service-based stock options, performance-based

stock options, warrants and RSUs amounted to $ 11,850,000 and $ 7,983,891 for the nine months ended September 30, 2022 and 2021, respectively.

Such amounts are included in general and administrative expenses in the unaudited condensed consolidated statement of operations.

expense remaining related to service-based stock options, performance-based stock options, warrants and RSUs was $ 21,089,260 as of September

Company leases office space domestically under operating leases.

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table below reconciles the undiscounted future minimum lease payments under the above noted operating leases to the total operating lease

liabilities recognized on the consolidated balance sheet as of June 30, 2022:

liabilities recognized on the consolidated balance sheet as of September 30, 2022:

SCHEDULE OF MATURITY OF OPERATING LEASE LIABILITIES

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Present value of operating lease liabilities

lease expenses were $ 201,279 and $ 97,093 for the three months ended June 30, 2022 and 2021, respectively, and $ 403,691 and $ 190,503 for

the six months ended June 30, 2022 and 2021, respectively, and were included in other operating expenses in our consolidated statement

of operations.

lease expenses were $ 199,584 and $ 95,791 for the three months ended September 30, 2022 and 2021, respectively, and $ 603,275 and $ 286,294

for the nine months ended September 30, 2022 and 2021, respectively, and were included in other operating expenses in our consolidated

statement of operations.

cash flow information related to operating lease liabilities consisted of the following:

SCHEDULE OF CASH FLOW RELATED TO OPERATING LEASE LIABILITIES

September 30,

Cash paid for operating lease liabilities

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SCHEDULE OF BALANCE SHEETS RELATED TO OPERATING LEASE LIABILITIES

June 30, 2022

September 30, 2022

December 31, 2021

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sold – advertising and operating expenses directly related to the marketing of the licensed products .

As of June 30, 2022 and December

31, 2021, no amount was included in accounts payable and accrued expenses in regard to this agreement.

As of September 30, 2022

and December 31, 2021, no amount was included in accounts payable and accrued expenses in regard to this agreement.

2018, the Company entered into a license agreement (the “Alphabet Agreement”) with M.ALPHABET, LLC (“Alphabet”),

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Alphabet a royalty equal to 13 % of Gross Receipts (as defined in the Agreement) realized from the sales of Licensed Products.

were earned or owed as of June 30, 2022.

were earned or owed as of September 30, 2022 .

execution of the Alphabet Agreement, Alphabet was granted a 10 -year stock option to purchase 20,000 shares of the Company’s common

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equaling the total expected product acceptance cost in excess of the product deposit.

As of June 30, 2022 and December 31, 2021, the

Company approximates its implicit purchase commitments to be $ 1.9 million and $ 511 thousand, respectively.

As of September 30, 2022 and December 31, 2021,

the Company approximates its implicit purchase commitments to be $ 582 thousand and $ 511 thousand, respectively.

the normal course of business operations, the Company may become involved in various legal matters.

As of June 30, 2022, other than as

set forth below, the Company’s management does not believe that there are any potential legal matters that could have an adverse

As of September 30, 2022, other than

as set forth below, the Company’s management does not believe that there are any potential legal matters that could have an adverse

effect on the Company’s consolidated financial position.

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and fraud lawsuit, captioned Harborside Advisors LLC v.

21-cv-10593, was filed in the United States District

Court for the Southern District of New York against the Company.

The Harborside Complaint alleges, among other things, that the Company

breached a Consulting Services Agreement dated as of June 5, 2019, and Harborside was entitled to 1 million shares ( i.e ., 200,000

shares post 5-for-1 reverse stock split) in the Company if the Conversion Labs Rx business achieved a topline revenue of $ 10 million

and an additional 1 million shares ( i.e ., 200,000 shares post 5-for-1 reverse stock split) for each additional $ 5 million in topline

revenue up to a maximum of 5 million shares ( i.e.

, 1,000,000 shares post 5-for-1 reverse stock split).

The Complaint further alleges

that the Company fraudulently induced Harborside to give up its ownership interest in Conversion Labs Rx and that it was a breach of

the duty of good faith and fair dealing and fraudulent for the Company to have dissolved Conversion Labs Rx.

Consequently, alleges Harborside,

the Company was unjustly enriched, and Harborside is entitled to recover from the Company for quantum meruit.

The Harborside Complaint

implies between $ 5,020,000 and $ 33,020,000 in alleged damages related to failure to award the aforementioned stock but only specifically

states that “Harborside has incurred damages in excess of $ 75,000 , with the exact amount to be determined with specificity at trial”

for each of the 5 counts.

On February 11, 2022, the Company filed a Motion to Dismiss the Harborside Complaint, which Harborside opposed.

The Company replied on April 4, 2022 and was awaiting a decision from the Court on whether the case will be fully or partially dismissed.

In the meantime, the parties agreed to mediate both cases ( Harborside Advisors LLC v.

21-cv-10593, and Specialty Medical Drugstore, LLC D/B/A GoGoMeds v.

21-cv-10599, noted below)

together (without prejudice that it will be one mediation nor used to support consolidation should mediation fail), with a target

completion date of on or before August 26, 2022.

The parties have discussed potential mediators.

The court granted a 60-day stay

in the Specialty Medical Drugstore, LLC D/B/A GoGoMeds v.

LifeMD, Inc., Case No.

21-cv-10599, and the parties were amenable in

the Harborside Advisors LLC v.

21-cv-10593, to the Court foregoing any decision on our motion to dismiss

until after mediation.

The Company intends to continue to vigorously defend against this action.

As of June 30, 2022, the Company

has accrued all amounts it deems appropriate for this matter.

21-cv-10593, was filed in the United States

District Court for the Southern District of New York against the Company.

The Harborside Complaint alleges, among other things, that

the Company breached a Consulting Services Agreement dated as of June 5, 2019, and Harborside was entitled to 1

million shares ( i.e ., 200,000

shares post 5-for-1

reverse stock split) in the Company if the Conversion Labs Rx business achieved a topline revenue of $ 10

million and an additional 1

million shares ( i.e ., 200,000

shares post 5-for-1

reverse stock split) for each additional $ 5

million in topline revenue up to a maximum of 5

million shares ( i.e.

shares post 5-for-1

reverse stock split).

The Complaint further alleges that the Company fraudulently induced Harborside to give up its ownership

interest in Conversion Labs Rx and that it was a breach of the duty of good faith and fair dealing and fraudulent for the Company to

have dissolved Conversion Labs Rx.

Consequently, alleges Harborside, the Company was unjustly enriched, and Harborside is entitled

to recover from the Company for quantum meruit.

The Harborside Complaint implies between $ 5,020,000

and $ 33,020,000

in alleged damages related to failure to award the aforementioned stock but only specifically states that “Harborside has

incurred damages in excess of $ 75,000 ,

with the exact amount to be determined with specificity at trial” for each of the 5 counts.

On February 11, 2022, the Company

filed a Motion to Dismiss the Harborside Complaint, which Harborside opposed.

The Company replied on April 4, 2022 and was awaiting

a decision from the Court on whether the case will be fully or partially dismissed.

In the meantime, the parties agreed to mediate

both cases ( Harborside Advisors LLC v.

21-cv-10593, and Specialty Medical Drugstore, LLC D/B/A

21-cv-10599, noted below) together.

On September 22, 2022, as a result of mediation, the

parties reached a settlement to resolve the matters in these cases.

The Company issued 400 thousand shares of common stock during

the three months ended September 30, 2022 and it is possible that the Company will issue 100 thousand additional shares of common

stock in the future related to this settlement.

The costs of this settlement are reflected in the Company’s financial

December 10, 2021, a purported breach of contract, unjust enrichment, quantum meruit, and account stated lawsuit, captioned Specialty

Medical Drugstore, LLC D/B/A GoGoMeds v.

21-cv-10599, was filed in the United States District Court for the

Southern District of New York against the Company.

The GoGoMeds Complaint alleges, among other things, that Conversion Labs Rx breached

a Strategic Partnership Agreement (dated May 27, 2019) (the “SPA”) by the Company not paying two invoices (#3269 and 3270)

totaling $ 273,859 ,

21-cv-10599, was filed in the United States District Court for

the Southern District of New York against the Company.

The GoGoMeds Complaint alleges, among other things, that Conversion Labs Rx

breached a Strategic Partnership Agreement (dated May 27, 2019) (the “SPA”) by the Company not paying two invoices

(#3269 and 3270) totaling $ 273,859 ,

and, therefore, “LifeMD has been unjustly enriched in an amount in excess of $ 273,859 ,

with the exact amount to be determined with specificity at trial.” Further, GoGoMeds alleges that “to the extent that the

SPA is inapplicable, GoGoMeds is entitled to recover from LifeMD from quantum meruit” because “GoGoMeds conferred a benefit

on LifeMD by fulfilling over 17,000 prescriptions and over the counter drug orders for LifeMD’s clients.” On February 11,

2022, the Company filed its Answer and Counterclaim to the GoGoMeds Complaint, pleading the affirmative defenses that the claims are

barred, in whole or in part:

with the exact amount to be determined with specificity at trial.” Further, GoGoMeds alleges that “to the extent that

the SPA is inapplicable, GoGoMeds is entitled to recover from LifeMD from quantum meruit” because “GoGoMeds conferred a

benefit on LifeMD by fulfilling over 17,000 prescriptions and over the counter drug orders for LifeMD’s clients.” On

February 11, 2022, the Company filed its Answer and Counterclaim to the GoGoMeds Complaint, pleading the affirmative defenses that

the claims are barred, in whole or in part:

(i) because they fail to state claims upon which relief can be granted;

(ii) by breach of contract by plaintiff;

(ii) by breach

of contract by plaintiff;

(iii) by offset, recoupment, and/or unjust enrichment to plaintiff;

(iv) by accord and satisfaction;

(v) for failure of condition precedent;

for failure of condition precedent;

(vi) because adequate remedies at law exist;

(vii) by failure to mitigate;

(viii) by the doctrine of unclean hands;

and (ix) by consent

ratification, waiver, excuse, and/or estoppel, (x) as well as that attorney fees and costs, as well as special, indirect, incidental,

and/or consequential damages are not recoverable.

Further, the Company counterclaimed against GoGoMeds for:

(a) breach of contract for

(i) provide adequate customer service and related pharmacy services;

(ii) charge LifeMD actual costs for prescription and

over the counter drugs (including shipping), as was contractually required;

and (iii) provide regular reports and allow audits for review

to establish adequate service and accurate costs;

(b) trade secret misappropriation of the LifeMD Information, Data, and Materials, as

defined therein;

benefit of the creation of the GoGoCare telehealth company;

(d) conversion by GoGoMeds by exercising unauthorized dominion and control

over the LifeMD Information, Data, and Materials;

(viii) by the

doctrine of unclean hands;

and (ix) by consent ratification, waiver, excuse, and/or estoppel, (x) as well as that attorney fees and

costs, as well as special, indirect, incidental, and/or consequential damages are not recoverable.

Further, the Company

counterclaimed against GoGoMeds for:

(a) breach of contract for failing to:

(i) provide adequate customer service and related

pharmacy services;

(ii) charge LifeMD actual costs for prescription and over the counter drugs (including shipping), as was

contractually required;

and (iii) provide regular reports and allow audits for review to establish adequate service and accurate

(b) trade secret misappropriation of the LifeMD Information, Data, and Materials, as defined therein;

of GoGoMeds through its retention of such LifeMD Information, Data, and Materials, and for the benefit of the creation of the

GoGoCare telehealth company;

(d) conversion by GoGoMeds by exercising unauthorized dominion and control over the LifeMD Information,

Data, and Materials;

and (f) an accounting.

GoGoMeds’ responded to the counterclaims

on March 4, 2022 and the parties have commenced fact discovery.

In the meantime, the parties agreed to mediate both cases ( Harborside

Advisors LLC v.

GoGoMeds’ responded to the counterclaims on March 4, 2022 and the

parties had commenced fact discovery.

In the meantime, the parties agreed to mediate both cases ( Harborside Advisors LLC v.

21-cv-10593, and Specialty Medical Drugstore, LLC D/B/A GoGoMeds v.

21-cv-10599) together (without prejudice that it will be one mediation nor used to support consolidation should mediation fail),

with a target completion date of on or before August 26, 2022.

The court granted a 60-day stay in the Specialty Medical Drugstore,

LLC D/B/A GoGoMeds v.

LifeMD, Inc., Case No.

21-cv-10599) together.

The court granted a 60-day stay in the Specialty Medical Drugstore, LLC D/B/A GoGoMeds v.

LifeMD, Inc., Case

21-cv-10599, and the parties were amenable in the Harborside Advisors LLC v.

21-cv-10593, to the court foregoing any decision on our motion to dismiss until after mediation.

The Company intends

to continue to vigorously defend against this action.

As this action is in its preliminary phase, a potential loss cannot yet be estimated.

February 28, 2022, a purported breach of contract lawsuit (with six counts of alleged breach, and indemnity reliance concerning

reasonable costs and expenses), captioned William Blair LLC v.

2022L001978, was filed in the Circuit

Court of Cook County, Illinois County Department, Law Division against the Company (the “Blair Complaint”).

Complaint alleges, among other things, that LifeMD breached an engagement letter agreement entered into on January 7, 2021 with

Blair that concerned potential debt financing.

In particular, Blair alleges that the Company breached its obligations by, inter

(i) failing to advise Blair of, and ultimately completing, a debt financing transaction with a different investment

banking firm on or about June 3, 2021;

(ii) reproducing several pages from a Confidential Information Brochure used in the

Company’s debt financing transaction with a different investment banking firm;

(iii) failing to provide Blair with a right of

first refusal to be its joint active bookrunning manager for a common stock sales agreement that it executed on or about June 3,

2021, through a different investment banking firm;

(iv) failing to provide Blair with a right of first refusal to be its joint

active bookrunning manager for a common stock sales agreement that it executed on or about September 28, 2021, through a different

investment banking firm (despite the Company having formally terminated the engagement letter with Blair on or about July 16, 2021);

(v) failing to provide Blair with a right of first refusal to be its joint active bookrunning manager for a preferred stock offering

that it executed on or about September 28, 2021, through two different investment banking firms as bookrunning co-managers (despite

the Company having formally terminated the engagement letter with Blair on or about July 16, 2021);

and (vi) purchasing a

convertible note from a pharmaceutical investor in connection with its acquisition of all outstanding shares of allergy telehealth

platform, Cleared.

21-cv-10593, to the

court foregoing any decision on our motion to dismiss until after mediation.

On September 22, 2022, as a result of mediation, the

parties reached a settlement to resolve the matters in these cases.

The Company issued 400 thousand shares of common stock during

the three months ended September 30, 2022 and it is possible that the Company will issue 100 thousand additional shares of common stock in the future related to this settlement.

costs of this settlement are reflected in the Company’s financial results.

February 28, 2022, a purported breach of contract lawsuit (with six counts of alleged breach, and indemnity reliance concerning reasonable

costs and expenses), captioned William Blair LLC v.

2022L001978, was filed in the Circuit Court of Cook

County, Illinois County Department, Law Division against the Company (the “Blair Complaint”).

The Blair Complaint alleges,

among other things, that LifeMD breached an engagement letter agreement entered into on January 7, 2021 with Blair that concerned potential

debt financing.

In particular, Blair alleges that the Company breached its obligations by, inter alia :

(i) failing to advise Blair

of, and ultimately completing, a debt financing transaction with a different investment banking firm on or about June 3, 2021;

(ii) reproducing

several pages from a Confidential Information Brochure used in the Company’s debt financing transaction with a different investment

banking firm;

(iii) failing to provide Blair with a right of first refusal to be its joint active bookrunning manager for a common stock

sales agreement that it executed on or about June 3, 2021, through a different investment banking firm;

(iv) failing to provide Blair

with a right of first refusal to be its joint active bookrunning manager for a common stock sales agreement that it executed on or about

September 28, 2021, through a different investment banking firm (despite the Company having formally terminated the engagement letter

with Blair on or about July 16, 2021);

(v) failing to provide Blair with a right of first refusal to be its joint active bookrunning

manager for a preferred stock offering that it executed on or about September 28, 2021, through two different investment banking firms

as bookrunning co-managers (despite the Company having formally terminated the engagement letter with Blair on or about July 16, 2021);

and (vi) purchasing a convertible note from a pharmaceutical investor in connection with its acquisition of all outstanding shares of

allergy telehealth platform, Cleared.

The Blair Complaint seeks damages adequate to compensate Blair for the aforementioned alleged breaches

, which implicitly meets or exceeds the purported $ 1,000,000 minimum

fee in the engagement letter), as well as reasonable costs and expenses incurred in this action.

June 28, 2022, Blair served its first set of document requests.

Per court order, the Company's responses are due August 31, 2022.

Further, the Company is required to provide initial written discovery requests on plaintiff by August 17, 2022.

management conference concerning the status of completion of written discovery and document production is scheduled for

October 6, 2022.

The court intends to enter a case management schedule and trial date at that conference.

The Company intends to

vigorously defend against this action.

As this action is in its preliminary phase, a potential loss cannot yet be

, which implicitly meets or exceeds the purported $ 1,000,000 minimum fee in the engagement letter), as well as reasonable

costs and expenses incurred in this action.

The parties have

exchanged written discovery requests and written responses.

The Court ordered the completion of production of responsive documents

by December 7, 2022 and scheduled a status hearing for December 14, 2022 to address discovery compliance and entry of a case management

The Company intends to vigorously defend against this action.

As this action is in its preliminary phase, a potential loss

cannot yet be estimated.

10 – RELATED PARTY TRANSACTIONS

4 unchanged sentences

(“CEO”), for rent on Conversion Labs PR’s Puerto Rico office space which was $ 0 and $ 15,000 for the three months ended

June 30, 2022 and 2021, respectively, and $ 0 and $ 45,000 for the six months ended June 30, 2022 and 2021, respectively.

September 30, 2022 and 2021, respectively, and $ 0 and $ 67,500 for the nine months ended September 30, 2022 and 2021, respectively.

Labs PR utilizes BV Global Fulfillment (“BV Global”), previously owned by a related person (the “Owner”) of the

4 unchanged sentences

direct costs associated with shipping the Company’s products.

The Company reimbursed BV Global a total of $ 319,444 and $ 418,526

during the three and six months ended June 30, 2021, respectively.

As of December 31, 2021, the Company owed BV Global $ 61,824 , which

is included in accounts payable on the accompanying unaudited condensed consolidated balance sheets.

the six months ended June 30, 2022 and 2021, WorkSimpli utilized LegalSubmit Pvt.

(“LegalSubmit”), a company owned by

WorkSimpli’s Chief Software Engineer, to provide software development services.

Company reimbursed BV Global a total of $ 660,877 and $ 1,079,403 during the three and nine months ended September 30, 2021, respectively.

As of December 31, 2021, the Company owed BV Global $ 61,824 , which is included in accounts payable on the accompanying unaudited condensed

consolidated balance sheets.

the nine months ended September 30, 2022 and 2021, WorkSimpli utilized LegalSubmit Pvt.

(“LegalSubmit”), a company owned

by WorkSimpli’s Chief Software Engineer, to provide software development services.

WorkSimpli paid LegalSubmit a total of $ 403,424

and $ 186,503 during the three months ended June 30, 2022 and 2021, respectively, and $ 651,323 and $ 359,340 during the six months ended

June 30, 2022 and 2021, respectively, for these services.

There were no amounts owed to LegalSubmit as of both June 30, 2022 and December

and $ 240,187 during the three months ended September 30, 2022 and 2021, respectively, and $ 1,054,747 and $ 599,527 during the nine months

ended September 30, 2022 and 2021, respectively, for these services.

There were no amounts owed to LegalSubmit as of both September 30,

2022 and December 31, 2021.

Officer Employment Agreements

13 unchanged sentences

January 27, 2022, the Company and Eric H.

Yecies, our General Counsel (“GC”) and Chief Compliance Officer

(“CCO”), entered into the First Amendment to his employment agreement to provide that our CCO receive 37,500

RSUs, with 12,500

of the RSUs vesting on the grant date and the first and second anniversaries of the grant date.

Additionally, the First Amendment to

his employment agreement provided that our CCO is eligible to receive up to 105,000

PSUs, which will vest subject to the Company achieving certain key revenue, EBITDA and share price appreciation

Yecies, our General Counsel (“GC”) and Chief Compliance Officer (“CCO”),

entered into the First Amendment to his employment agreement to provide that our CCO receive 37,500 RSUs, with 12,500 of the RSUs vesting

on the grant date and the first and second anniversaries of the grant date.

Additionally, the First Amendment to his employment agreement

provided that our CCO is eligible to receive up to 105,000 PSUs, which will vest subject to the Company achieving certain key revenue,

EBITDA and share price appreciation milestones.

February 4, 2022, Maria Stan was appointed as Controller and Principal Accounting Officer of the Company.

5 unchanged sentences

The PSUs vest upon the achievement of certain key revenue, EBITDA and share price appreciation

of Director Appointment

September 14, 2022, the Company appointed Robert Jindal as a member of the Board.

In connection with the appointment to the Board, the

Company and Mr.

Jindal entered into a director agreement (the “Director Agreement”), whereby, as compensation for his services

as a member of the Board, Mr.

Jindal received:

(i) a grant of 75,000 RSUs of the Company’s

common stock, with 37,500 RSUs vesting immediately and 37,500 RSUs vesting on the two-year anniversary of the Director Agreement, and

(ii) a stock option to purchase 37,500 shares of the Company’s common stock, vesting in four equal tranches on the 90, 180, 270

and 365-day anniversary of the Director Agreement .

Additionally, Mr.

Jindal shall be paid $ 6,000 per quarter, as compensation for his

services as a member of the Board.

11 – SEGMENT DATA

3 unchanged sentences

within our segments complement one another and position us well for future growth.

Relevant segment data for the three and six months

ended June 30, 2022 and 2021 is as follows:

Relevant segment data for the three and nine months

ended September 30, 2022 and 2021 is as follows:

SCHEDULE OF RELEVANT SEGMENT DATA

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Operating loss

11 unchanged sentences

$ ( 40,636,404 )

segment data as of June 30, 2022 and December 31, 2021 is as follows:

June 30, 2022

segment data as of September 30, 2022 and December 31, 2021 is as follows:

September 30, 2022

December 31, 2021

1 unchanged sentence

Company has evaluated subsequent events through the date these consolidated financial statements were issued and has identified the following:

August 2022, the Company issued an aggregate of 63,750 shares of common stock for services rendered.

November 2022, the Company issued an aggregate of 95,000 shares of common stock for services rendered.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements