What changed in this filing

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Item 1. Financial Statements

2023-05-12 compared with 2022-11-10 · 775 added, 944 removed, 652 unchanged (73% of the section changed)

1 unchanged sentence

CONSOLIDATED BALANCE SHEETS

September 30, 2022

March 31, 2023

December 31, 2022

7 unchanged sentences

Equipment, net

Right of use asset, net

Right of use asset

Capitalized software, net

1 unchanged sentence

Total Non-current Assets

LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ (DEFICIT) EQUITY

LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ DEFICIT

Current Liabilities

6 unchanged sentences

Long-term Liabilities

Convertible long-term debt, net

Noncurrent operating lease liabilities

7 unchanged sentences

Series B Preferred Stock, $ 0.0001 par value;

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

Stockholders’ (Deficit) Equity

5,000 shares authorized, 3,500 and 3,500 shares issued and outstanding, liquidation value approximately, $ 1,337 and $ 1,305 per share as of March 31, 2023 and December 31, 2022, respectively

Stockholders’ Deficit

Series A Preferred Stock, $ 0.0001 par value;

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

1,610,000 shares authorized, 1,400,000 shares issued and outstanding, liquidation value approximately, $ 28.39 and $ 27.84 per share as of March 31, 2023 and December 31, 2022, respectively

Common stock, $ 0.01 par value;

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

100,000,000 shares authorized, 32,040,045 and 31,552,775 shares issued, 31,937,005 and 31,449,735 outstanding as of March 31, 2023 and December 31, 2022, respectively

Additional paid-in capital

2 unchanged sentences

( 190,562,994 )

Treasury stock, 103,040 and 103,040 shares, at cost

Treasury stock, 103,040 and 103,040 shares, at cost, as of March 31, 2023 and December 31, 2022, respectively

Total LifeMD, Inc.

Stockholders’ (Deficit) Equity

Stockholders’ Deficit

( 12,007,521 )

( 11,395,777 )

Non-controlling interest

Total Stockholders’ Deficit

( 12,039,018 )

Total Stockholders’ (Deficit) Equity

( 11,871,325 )

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

Total Liabilities, Mezzanine Equity and Stockholders’ Deficit

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

Consolidated STATEMENTS OF OPERATIONS

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Telehealth revenue, net

7 unchanged sentences

General and administrative expenses

Goodwill impairment charge

Other operating expenses

5 unchanged sentences

( 13,107,015 )

( 35,563,840 )

( 40,636,404 )

Interest expense, net

( 1,824,777 )

( 2,866,150 )

Change in fair value of contingent consideration

Gain on debt forgiveness

( 7,197,936 )

( 14,416,081 )

Loss on debt extinguishment

( 3,442,473 )

( 13,274,949 )

Net income (loss) attributable to non-controlling interest

Net income attributable to non-controlling interest

Net loss attributable to LifeMD, Inc.

1 unchanged sentence

( 13,299,675 )

( 33,600,309 )

( 42,786,458 )

Preferred stock dividends

( 2,329,688 )

Net loss attributable to LifeMD, Inc.

2 unchanged sentences

$ ( 14,076,238 )

$ ( 35,929,997 )

$ ( 42,786,458 )

Basic loss per share attributable to LifeMD, Inc.

4 unchanged sentences

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

Consolidated STATEMENTS of CHANGES IN STOCKHOLDERS’ (DEFICIT) EQUITY

A Preferred Stock

Non-controlling

January 1, 2021

$ ( 80,151,905 )

$ ( 163,701 )

$ ( 2,301,899 )

$ ( 2,175,687 )

$ ( 4,477,586 )

compensation expense

exercise of stock options

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 )

( 11,602,383 )

( 11,872,886 )

March 31, 2021

$ ( 91,754,288 )

$ ( 163,701 )

$ ( 767,896 )

$ ( 841,427 )

compensation expense

of stock options

exercise of stock options

issued for debt instruments

to non-controlling interest

( 16,830,700 )

( 17,028,673 )

June 30, 2021

$ 101,450,858

$ ( 108,584,988 )

$ ( 163,701 )

$ ( 7,031,472 )

$ ( 1,001,869 )

$ ( 8,033,341 )

compensation expense

of stock options

of common stock under ATM

to non-controlling interest

( 14,353,375 )

( 14,416,081 )

September 30, 2021

$ 105,275,494

$ ( 122,938,363 )

$ ( 163,701 )

$ ( 17,557,940 )

$ ( 1,100,575 )

$ ( 18,658,515 )

Non-controlling

January 1, 2022

$ 164,517,634

$ ( 141,921,085 )

Consolidated STATEMENTS of CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

Series A Preferred

Additional Paid-in

Balance, January 1, 2022

$ 164,517,634

$ ( 141,921,085 )

compensation expense

exercise of stock options

A Preferred Stock Dividend

to non-controlling interest

(loss) income

$ ( 163,701 )

$ ( 1,031,745 )

Stock compensation expense

Cashless exercise of stock options

Exercise of warrants

Series A Preferred Stock Dividend

Distribution to non-controlling interest

Net (loss) income

( 13,299,675 )

March 31, 2022

( 13,299,675 )

( 13,274,949 )

Balance, March 31, 2022

$ 169,026,965

$ ( 155,997,323 )

compensation expense

of stock options

A Preferred Stock Dividend

to non-controlling interest

(loss) income

$ ( 163,701 )

$ ( 1,043,019 )

Series A Preferred

Additional Paid-in

Balance, January 1, 2023

$ 179,015,250

June 30, 2022

$ ( 190,562,994 )

2 unchanged sentences

$ ( 475,548 )

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

$ ( 11,871,325 )

Stock compensation expense

Stock issued for noncontingent consideration payment

Warrants issued with convertible debt instrument

Series A Preferred Stock Dividend

Distribution to non-controlling interest

Adjustment of membership interest in WorkSimpli

Net (loss) income

( 4,008,456 )

September 30, 2022

( 3,442,473 )

Balance, March 31, 2023

$ 183,183,652

5 unchanged sentences

Consolidated STATEMENTS OF CASH FLOWS

Nine Months Ended September 30,

Three Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES

7 unchanged sentences

Depreciation of fixed assets

Gain on debt forgiveness

Change in fair value of contingent consideration

( 2,487,000 )

Goodwill impairment charge

Loss on debt extinguishment

Operating lease payments

Stock issued for legal settlement

Stock compensation expense

1 unchanged sentence

Accounts receivable

( 1,558,063 )

Product deposit

( 2,052,363 )

Other current assets

5 unchanged sentences

( 1,764,573 )

Other operating activity

Net cash used in operating activities

14 unchanged sentences

CASH FLOWS FROM FINANCING ACTIVITIES

Cash proceeds from private placement offering, net

Proceeds from issuance of debt instruments

Cash proceeds from sale of common stock under ATM

Cash proceeds from exercise of options

Proceeds from convertible long-term debt, net

Proceeds from notes payable

Repayment of notes payable, net of prepayment penalty

( 3,299,959 )

Cash proceeds from exercise of warrants

Preferred stock dividends

( 2,329,688 )

Adjustment of membership interest in WorkSimpli

Contingent consideration payment for ResumeBuild acquisition

Proceeds from notes payable

Repayment of notes payable

( 1,494,784 )

Purchase of membership interest of WSS

Adjustment of membership interest of WorkSimpli

Distributions to non-controlling interest

Net cash (used in) provided by financing activities

( 2,390,388 )

Net (decrease) increase in cash

Net cash provided by (used in) financing activities

Net increase (decrease) in cash

( 16,243,395 )

4 unchanged sentences

Non-cash investing and financing activities

Warrants issued for debt instruments

Cashless exercise of options

1 unchanged sentence

Consideration payable for ResumeBuild acquisition

Warrants issued for debt instruments

Principal of Paycheck protection Program loans forgiven

Additional purchase of membership interest in WSS issued in performance options

Stock issued for noncontingent consideration payment

Right of use asset

Right of use lease liability

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

6 unchanged sentences

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 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.

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 application

4 unchanged sentences

Effective January 22, 2021,

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

the Company consummated a transaction to restructure the ownership of WorkSimpli (the “WSS Restructuring”) concurrently increased

its ownership interest in WorkSimpli to 85.58 %.

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 73.64 %.

Effective March 31,

2023, the Company redeemed 500 membership interest units in WorkSimpli and, as a result, the Company’s ownership interest in WorkSimpli

increased to 74.06 %.

See Note 8 for additional information.

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

growing nationwide allergy telehealth platform that provides personalized treatments for allergy, asthma, and immunology (See Note 3).

Company is a direct-to-patient telehealth technology company that provides a smarter, cost-effective, and convenient way for patients

of its affiliated medical group to access healthcare.

The Company believes that the traditional model of visiting a doctor’s office,

receiving a physical prescription, visiting a local pharmacy, and returning to see a doctor for follow up care or prescription refills

is inefficient, costly to patients, and discourages many patients from seeking much needed medical care.

healthcare system is

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

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

allergy telehealth platform that provides personalized treatments for allergy, asthma, and immunology (See Note 3).

Company is a direct-to-patient telehealth company providing patients a high-quality, cost-effective, and convenient way of accessing

comprehensive, virtual healthcare.

The Company believes the traditional model of visiting a doctor’s office, traveling to a local

pharmacy, and returning for follow up care or prescription refills is complex, inefficient, and costly, and discourages many individuals

from seeking much needed medical care.

The Company is positioned to elevate the healthcare experience through telehealth with our proprietary

technology platform, affiliated provider network, broad treatment capabilities, and unique ability to nurture patient relationships.

Direct-to-patient telehealth technology companies, like the Company, connect consumers to affiliated, licensed, healthcare professionals

for care across numerous indications, including urgent and primary care, men’s and women’s health, and dermatology, chronic

care management and more.

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

5 unchanged sentences

revenue streams for the Company.

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

its first brand, ShapiroMD, the Company 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

4 unchanged sentences

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.

In the first quarter of 2021, the Company launched 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 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.

early 2019, the Company launched a service-based business under the name Conversion Labs Media LLC (“CVLB Media”), a Puerto

Rico limited liability company.

However, this business initiative was terminated in early 2019.

In May 2019, Conversion Labs Rx, LLC

(“CVLB Rx”), a Puerto Rico limited liability company, signed a strategic partnership agreement with Specialty Medical Drugstore,

(doing business as “GoGoMeds”).

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 software as a service online platforms (the

“Acquisition”).

during the three months ended March 31, 2023 and 2022.

January 18, 2022, the Company acquired Cleared, a 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 thousand 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 thousand 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.

On February 4, 2023,

the Company entered into the First Amendment to the Stock Purchase Agreement (the “First Amendment”) between the Company

and the sellers of Cleared.

The First Amendment was amended to, among other things:

(i) reduce the total purchase price by $ 250 thousand

to a total of $ 3.67 million;

(ii) change the timing of the payment of the purchase price to $ 460 thousand paid at closing (which has

already been paid by the Company), with the remaining amount to be paid in five quarterly installments beginning on or before February

6, 2023 and ending January 15, 2024;

(iii) removing all “earn-out” payments payable by the Company to the sellers;

remove certain representations and warranties of the Company and sellers in connection with the transaction (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 software as a service online platforms (the “Acquisition”).

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 ,

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

WorkSimpli borrowed the purchase price

from the Company pursuant to a promissory note with the obligation secured by an equity purchase guarantee agreement and a stock

option pledge agreement from Fitzpatrick Consulting, LLC and its sole member Sean Fitzpatrick, who is Co-Founder and President of

WorkSimpli (See Note 3).

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 approximately $ 63 thousand, for

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

As of March 31, 2023, WorkSimpli has paid the

Seller approximately $ 219 thousand in accordance with the ResumeBuild APA.

WorkSimpli borrowed the purchase price from the Company pursuant

to a promissory note with the obligation secured by an equity purchase guarantee agreement and a stock option pledge agreement from Fitzpatrick

Consulting, LLC and its sole member Sean Fitzpatrick, who is Co-Founder and President of 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”), 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

Diagnostics”) as the Company’s laboratory services provider to perform certain clinical laboratory diagnostic services based

on orders submitted to Quest Diagnostics by licensed health care providers who are under contract with the Company and are authorized

federal or state law to order laboratory tests.

Patients of LifeMD Inc.’s affiliated providers gain access to more than

150 of the most ordered laboratory tests at preferential prices, and which can be completed in the comfort, safety, and convenience of

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.

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.

(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.

& Going Concern Evaluation

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

2 unchanged sentences

from third-party sources or the issuance of additional shares of common stock.

February 11, 2021, the Company consummated the closing of a private placement offering (the “February 2021 Offering”), whereby

pursuant to the securities purchase agreement (the “February 2021 Purchase Agreement”) entered into by the Company and certain

accredited investors on February 11, 2021, the Investors purchased 608,696 shares of the Company’s common stock par value $ 0.01

per share at a purchase price of $ 23 .00 per share for aggregate gross proceeds of approximately $ 14.0 million (the “Purchase Price”).

The Purchase Price was funded on the closing date and resulted in net proceeds to the Company of approximately $ 13.5 million after deducting

fees payable to the placement agent and other estimated offering expenses payable by the Company.

The Company is using the net proceeds

to fund growth initiatives, as well as for general corporate purposes.

June 1, 2021, the Company entered into a securities purchase agreement (the “June 1, 2021 Purchase Agreement”) with a financial

institution (the “Purchaser”), pursuant to which the Company sold and issued:

(i) a senior secured redeemable debenture (the

“Debenture”) in the aggregate principal amount of $ 15.0 million (the “Aggregate Principal Amount”), and (ii)

warrants to purchase up to an aggregate of 1,500,000 shares of the Company’s common stock at an exercise price of $ 12.00 per share

(the “Warrant”) of which 500,000 warrants were issued to the Purchaser upon closing with the remaining 1,000,000 warrants

only issued to the Purchaser in increments of 500,000 if the Debenture remains outstanding for twelve and twenty four months, respectively,

following the closing date of the June 1, 2021 Purchase Agreement.

The Warrant has a term of three years, and the Debenture has a maturity

date of three years .

The Company received gross proceeds of $ 15.0 million.

In October 2021, the Company used a portion of the net proceeds

from the October 4, 2021 Offerings noted below to pay the $ 15.0 million outstanding on the June 1, 2021 Purchase Agreement.

June 8, 2021, the Company filed a shelf registration statement on Form S-3 under the Securities Act of 1933, as amended (the “Securities

Act”), which was declared effective on June 22, 2021 (the “2021 Shelf”).

Under the 2021 Shelf at the time of effectiveness,

the Company had the ability to raise up to $ 150 million by selling common stock, preferred stock, debt securities, warrants, and units.

In conjunction with the 2021 Shelf, the Company also entered into an At Market Issuance Sales Agreement (the “ATM Sales Agreement”)

Riley Securities, Inc.

Riley”) and Cantor Fitzgerald & Co.

(“Cantor”, and collectively the “Agents”)

relating to the sale of its common stock.

In accordance with the terms of the ATM Sales Agreement, the Company may, but is not obligated

to, offer and sell, from time to time, shares of common stock having an aggregate offering price of up to $ 60 million, through or to

the Agents, acting as agent or principal.

Sales of common stock, if any, will be made by any method permitted that is deemed an “at

the market offering” as defined in Rule 415 under the Securities Act.

The Company intends to use any net proceeds from the sale

of securities for our operations and for other general corporate purposes, including, but not limited to, capital expenditures, general

working capital, and possible future acquisitions.

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

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

Common Underwriting Agreement”) with B.

Pursuant to the Preferred Underwriting Agreement, the Company agreed to sell 1,400,000

shares of its 8.875 % Series A Cumulative Perpetual Preferred Stock, par value $ 0.0001 per share, (the “Series A Preferred Stock”)

at a public offering price of $ 25.00 per share, prior to deducting underwriting discounts and commissions and estimated offering expenses

(the “Preferred Stock Offering”).

In addition, the Company granted the underwriters an option to purchase up to an additional

210,000 shares of Series A Preferred Stock within 30 days.

The option was not exercised.

Under the Common Underwriting Agreement, the

Company agreed to sell to B.

Riley 3,833,334 shares of common stock (including 500,000 shares pursuant to B.

Riley’s option) (the

“Common Shares”), par value $ 0.01 per share, of the Company at a public offering price of $ 6.00 per share of common stock,

prior to deducting underwriting discounts and commissions and estimated offering expenses (the “Common Stock Offering”).

The Preferred Stock Offering and Common Stock Offering collectively referred to as the “October 4, 2021 Offerings”, closed

on October 4, 2021.

Net proceeds after deducting the underwriting discounts, and commissions, the structuring fee and estimated offering

expenses payable by the Company, but before repayment of debt, from the Offerings was approximately $ 55.3 million.

The Company used a

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

per share each year, which is equivalent to 8.875 % of the $ 25.00 liquidation preference per share.

Dividends on the Series A Preferred

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

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

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 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.

March 21, 2023, the Company entered into and closed on a loan and security agreement (the “Credit Agreement”), and a supplement

to the Credit Agreement (the “Supplement”), with Avenue Venture Opportunities Fund II, L.P.

and Avenue Venture Opportunities

(collectively, “Avenue”).

The Credit Agreement provides for a convertible senior secured credit facility of up

to an aggregate amount of $ 40 million, comprised of the following:

(1) $ 15 million in term loans funded at closing, (2) $ 5 million of

additional committed term loans available in the fourth quarter of 2023 and (3) $ 20 million of additional uncommitted term loans, collectively

referred to as the “Avenue Facility”.

The Avenue Facility matures on October 1, 2026 .

The Company issued Avenue warrants

to purchase $ 1.2 million of the Company’s common stock at an exercise price of $ 1.24 , subject to adjustments (the “Warrants”).

In addition, Avenue may convert up to $ 2 million of the $ 15 million in term loans funded at closing into shares of the Company’s

common stock at any time while the loans are outstanding, at a price per share equal to $ 1.49 .

Proceeds from the Avenue Facility were

used to repay the Company’s outstanding notes payable balances with CRG Financial and are expected to be used for general corporate

purposes and at the Company’s election, re-financing up to $ 5 million liquidation value plus accrued interest on the Series B Preferred

The Company is subject to certain affirmative and negative covenants under the Avenue Facility, including the requirement, beginning on the closing date, to maintain at least $5 million of unrestricted cash to be tested at the end of each month, and beginning on the period ended September 30, 2023, and at the end of each quarter thereafter, a trailing six-month cash flow of at least $2 million.

of March 31, 2023, the Company has an accumulated deficit approximating $ 195.3 million and has experienced significant losses from its

To date, the Company has been funding operations primarily through the sales of its products, 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

Company has a current cash balance of approximately $ 12.8 million as of the filing date.

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of this uncertainty.

order to mitigate the going concern issues, the Company has begun to implement strategies to strengthen revenues and improve operational

efficiencies across the business and is significantly curtailing expenses.

Additionally, the Company has $ 59.5 million available under

the ATM Sales Agreement and $ 32 million available under the 2021 Shelf.

Management believes that the overall market value of the telehealth

industry is positive and that it will continue to drive interest in the Company.

Company has begun to implement strategies to strengthen revenues and improve operational efficiencies across the business and is significantly

curtailing expenses, however, these strategies do not mitigate the substantial doubt about the Company’s ability to continue as

a going concern.

Additionally,

on June 8, 2021, the Company filed a shelf registration statement on Form S-3 under the Securities Act, which was declared effective

on June 22, 2021 (the “2021 Shelf”).

Under the 2021 Shelf at the time of effectiveness, the Company originally had the ability

to raise up to $ 150 million by selling common stock, preferred stock, debt securities, warrants, and units.

In conjunction with the 2021

Shelf, the Company also entered into an At Market Issuance Sales Agreement (the “ATM Sales Agreement”) with B.

Riley Securities,

and Cantor Fitzgerald & Co.

relating to the sale of its common stock.

In accordance with the terms of the ATM Sales Agreement,

the Company may, but is not obligated to, offer and sell, from time to time, shares of common stock, through or to the Agents, acting

as agent or principal.

Sales of common stock, if any, will be made by any method permitted that is deemed an “at the market offering”

as defined in Rule 415 under the Securities Act.

On March 22, 2023, the date the Company filed its Annual Report on Form 10-K for the

fiscal year ended December 31, 2022, the Company became subject to the offering limits in General Instruction I.B.6 of Form S-3 (i.e.,

the “baby shelf limitations”).

As a result of the baby shelf limitations, the Company may only offer and sell shares of common

stock having an aggregate offering price of up to $ 18.435 million pursuant to the ATM Sales Agreement, and it filed a prospectus supplement

with the SEC to that effect on March 27, 2023.

In the event that the Company’s public float increases above $ 75.0 million, the

Company will no longer be subject to the baby shelf limitations, in which case the Company will file another prospectus supplement with

the SEC prior to making sales pursuant to the ATM Sales Agreement in excess of $ 18.435 million.

As of March 31, 2023, the Company has

$ 18.435 million available under the ATM Sales Agreement.

believes that the overall market value of the telehealth industry is positive and that it will continue to drive interest in the Company.

2 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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The results of operations

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.

for the three months ended March 31, 2023 are not necessarily indicative of the results for the year ending December 31, 2023 or for

any future period.

of Consolidation

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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.

interest of approximately 85.58 % as of December 31, 2021.

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 73.64 %.

March 31, 2023, the Company redeemed 500 membership interest units in WorkSimpli and, as a result, the Company’s ownership interest

in WorkSimpli increased to 74.06 % .

See Note 8 for additional information.

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

As of September 30,

As of March 31, 2023

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

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balances may exceed federally insured limits.

We have not experienced any losses related to these balances.

These balances could be impacted if one or more of

the financial institutions in which we deposit monies fails or is subject to other adverse conditions in the financial or credit markets.

We have never 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 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

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

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

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.

revenue for LifeMD PC was approximately $ 358 thousand and $ 0 for the three months ended March 31, 2023 and 2022, respectively.

net loss for LifeMD PC was approximately $ 1.0 million and $ 1.5 million for the three months ended March 31, 2023 and 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.

Reclassifications

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effect on previously reported operating loss, stockholders’ deficit or cash flows.

Given the increase in the Company’s software

business and to conform the Company’s presentation of operating results to industry standards, the Company has changed their categories

for reporting operations and, as a result, the Company has made reclassifications to the prior year presentation in order to conform

it to the current periods’ presentation.

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.

The Company has changed their categories for

reporting operations and, as a result, the Company has made reclassifications to the prior year presentation in order to conform it to

the current periods’ presentation.

The reclassifications include $ 90 thousand of lease expenses reclassified from general and administrative

expenses to other operating expenses for the three months ended March 31, 2022.

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, 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

record the recognition of revenue if orders are not immediately shipped, and deems the impact to be immaterial.

In all cases, delivery

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.

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;

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

In some cases, the customer does not obtain control until the product reaches the customer’s delivery

in these cases, recognition of revenue is deferred until that time.

In all cases, delivery is considered to have occurred when

the customer obtains control, which is usually commensurate upon shipment of the product.

In the case where delivery is not commensurate

upon shipment of the product, recognition of revenue is deferred until that time.

In the case of its product-based contracts, the Company

provides a subscription sensitive service based on the recurring 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 $ 331 thousand and $ 1.5 million, respectively, during the three months ended March 31,

2023 and 2022, 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 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

obligations on in-process monthly or yearly contracts with customers and a portion attributable to the yet to be recognized initial 14-day

trial period collections.

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

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:

Customer discounts and allowances on WorkSimpli revenues

approximated $ 912 thousand and $ 448 thousand, respectively, during the three months ended March 31, 2023 and 2022, respectively.

the three months ended March 31, 2023 and 2022, the Company had the following disaggregated revenue:

SCHEDULE OF DISAGGREGATED REVENUE

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Telehealth revenue

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The Company’s deferred

revenues relate to payments received for the in-process monthly or yearly contracts with customers and a portion attributable to the

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

revenues relate to the following:

(1) obligations for products which the customer has not yet obtained control due to delivery not commensurate

upon shipment of the product, (2) obligations on WorkSimpli in-process monthly or yearly contracts with customers and (3) a portion attributable

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

SCHEDULE OF CONTRACT WITH CUSTOMER LIABILITY

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Beginning of period

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( 6,079,295 )

( 22,714,468 )

( 16,713,983 )

End of period

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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.

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

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

Receivable, net

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 September 30, 2022 and December

As of March 31, 2023 and December

31, 2022, the reserve for sales returns and allowances was approximately $ 624 thousand and $ 815 thousand, respectively.

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balance sheets.

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

of March 31, 2023 and December 31, 2022, inventory primarily consisted of finished goods related to the Company’s OTC products

included in the telehealth revenue section of the table above.

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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 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:

As of both March

31, 2023 and December 31, 2022, the Company recorded an inventory reserve of approximately $ 158 thousand and $ 161 thousand, respectively.

of March 31, 2023 and December 31, 2022, the Company’s inventory consisted of the following:

SUMMARY OF INVENTORY

September 30,

Finished goods - products

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previously paid.

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

As of March 31, 2023 and December 31, 2022, the Company has approximately $ 246 thousand and $ 127 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 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.

As of March 31, 2023, the Company approximates its implicit purchase commitments to be $ 586 thousand, of which

the vast majority are with two vendors that manufacture the Company’s finished goods inventory for its RexMD product line.

Software Costs

Company capitalizes certain internal payroll costs and third-party costs related to internally developed software and amortizes these

costs using the straight-line method over the estimated useful life of the software, generally three years.

The Company does not sell

internally developed software other than through the use of subscription service.

Certain development costs not meeting the criteria

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

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.

Company capitalizes certain internal payroll costs and third-party costs related to internally developed software and amortizes

these costs using the straight-line method over the estimated useful life of the software, generally three years.

The Company does

not sell internally developed software other than through the use of subscription service.

Certain development costs not meeting the

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

As of March 31,

2023 and December 31, 2022, the Company capitalized a net amount of $ 9.5

million and $ 8.8

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 $ 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.

Goodwill in the amount of $ 8.0 million was recognized in conjunction with the Cleared acquisition.

recorded an $ 8.0 million goodwill impairment charge and an $ 827 thousand intangible asset impairment charge during the year ended December

31, 2022 related to a decline in the estimated fair value of Cleared as a result of a decline in the Cleared financial projections (see

intangible assets are comprised of:

(1) a customer relationship asset, (2) the Cleared trade name, (3) Cleared developed technology,

(4) a purchased license and (5) a purchased domain name.

During the year ended December 31, 2022, the Company recorded an $ 827 thousand

impairment loss related to a decline in the estimated fair value of the Cleared customer relationship intangible asset with an original

cost of $ 919 thousand and accumulated amortization of $ 92 thousand.

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

assets include equipment, capitalized software, and intangible assets subject to amortization.

Long-lived assets are reviewed for impairment

whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

If such assets are

considered to be impaired, an impairment is recognized as the amount by which the carrying amount of the assets exceeds the estimated

fair values of the assets.

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.

Protection Program

the year ended December 31, 2020, the Company received aggregate loan proceeds in the amount of approximately $ 249,000 under the Paycheck

Protection Program (“PPP”).

The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES

Act”), provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying

The loans and accrued interest are forgivable after eight weeks as long as the borrower uses the loan proceeds for eligible

purposes, including payroll, benefits, rent, and utilities and maintains its payroll levels.

The amount of loan forgiveness will be reduced

if the borrower terminates employees or reduces salaries during the eight-week period.

The unforgiven portion of the PPP loan is payable

over two years at an interest rate of 1 %, with a deferral of payments for the first six months.

The Company used the proceeds for purposes

consistent with the PPP.

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 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

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

assets include equipment and capitalized software.

Long-lived assets are reviewed for impairment whenever events or changes in circumstances

indicate that the carrying amount of an asset may not be recoverable.

If such assets are considered to be impaired, an impairment is

recognized as the amount by which the carrying amount of the assets exceeds the estimated fair values of the assets.

As of March 31,

2023 and December 31, 2022, the Company determined that no events or changes in circumstances existed that would indicate any impairment

of its long-lived assets.

Company files corporate federal, state and local tax returns.

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this guidance, a company may recognize the tax benefit from an uncertain tax position in its financial statements only if it is more

likely-than-not ( i.e.

, a likelihood of more than 50%) that the tax position will be sustained on examination by the taxing authorities,

likely-than-not (i.e., a likelihood of more than 50%) that the tax position will be sustained on examination by the taxing authorities,

based on the technical merits of the position.

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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

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

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

September 30, 2022

September 30, 2021

September 30, 2022

September 30, 2021

September 30, 2022

September 30, 2021

September 30, 2022

September 30, 2021

Three Months Ended March 31,

Series B Preferred Stock

Restricted Stock Units (RSUs)

Restricted stock units

Stock options

Convertible long-term debt

Potentially dilutive securities

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Value of Financial Instruments

fair value of a financial instrument is based on the price that would be received to sell an asset or paid to transfer a liability in

an orderly transaction between market participants at the measurement date.

Assets and liabilities subject to ongoing fair value measurement

are categorized and disclosed into one of the three categories depending on observable or unobservable inputs employed in the measurement.

Hierarchical levels, which are directly related to the amount of subjectivity associated with the inputs to the valuation of these assets

or liabilities, are as follows:

Inputs that are

unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

Inputs (other

than quoted prices included in Level 1) that are either directly or indirectly observable for the asset or liability through correlation

with market data at the measurement date and for the duration of the instrument’s anticipated life.

Unobservable inputs

that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities and that

reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement

some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy.

those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input

that is significant to the fair value measurement.

carrying value of the Company’s financial instruments, including cash, accounts receivable, accounts payable, accrued expenses,

and the face amount of notes payable approximate fair value for all periods presented.

the face amount of notes payable and convertible long-term debt approximate fair value for all periods presented.

Concentrations

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current manufacturers or pharmacies cease to perform adequately.

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

October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

As of March 31, 2023, we utilized four suppliers for fulfillment services,

six suppliers for manufacturing finished goods, five suppliers for packaging, bottling, and labeling, and three suppliers for prescription

As of December 31, 2022, we utilized four suppliers for fulfillment services, six suppliers for manufacturing finished goods,

five suppliers for packaging, bottling, and labeling, and three suppliers for prescription medications.

Adopted Accounting Pronouncements

June 2016, the Financial Accounting Standards Board

(“FASB”) issued Accounting Standards Update (“ASU”) No.

2016-13, Financial

Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments , which requires an entity to utilize

the current expected credit loss (“CECL”) impairment model to estimate its lifetime “expected credit loss” and

record an allowance that is deducted from the amortized cost basis of the financial assets and certain other instruments, including but

not limited to available-for-sale debt securities.

Credit losses relating to available-for-sale debt securities are recorded through

an allowance for credit losses.

ASU 2016-13 requires a cumulative effect adjustment to the balance sheet as of the beginning of the first

reporting period in which the guidance is effective.

In November 2019, the FASB issued ASU 2019-10, Financial Instruments—Credit

Losses (Topic 326), Derivatives and Hedging (Topic 815) and Leases (Topic 842):

Effective Dates , which defers the effective date

of ASU 2016-13 to fiscal years beginning after December 15, 2022 for all entities except SEC reporting companies that are not smaller

reporting companies.

The Company adopted ASU 2016-13 as of January 1, 2023.

The adoption did not have a material impact on the

Company’s financial statements.

October 2021, the FASB issued ASU No.

2021-08, Business Combinations (Topic 805);

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers .

This new guidance affects all entities that enter into a business combination within the scope of ASC 805-10.

Under this new guidance,

the acquirer should determine what contract assets and/or liabilities it would have recorded under ASC 606, Revenue from Contracts

with Customers , as of the acquisition date, as if the acquirer had entered into the original contract at the same date and on the

same terms as the acquirer.

Accounting for Contract Assets and Contract Liabilities

from Contracts with Customers .

This new guidance affects all entities that enter into a business combination within the scope of

Under this new guidance, the acquirer should determine what contract assets and/or liabilities it would have recorded under

ASC 606, Revenue from Contracts with Customers , as of the acquisition date, as if the acquirer had entered into the original contract

at the same date and on the same terms as the acquirer.

Under current U.S.

GAAP, contract assets and contract liabilities acquired in a business combination are

recorded by the acquirer at fair value.

This update is effective for fiscal years beginning after December 15, 2022.

Early adoption is

The Company is currently evaluating the effects that the adoption of this guidance will have on our consolidated financial

statements and related disclosures.

GAAP, contract assets and contract liabilities acquired in

a business combination are recorded by the acquirer at fair value.

The Company adopted ASU 2021-08 as of January 1, 2023.

did not have a material impact on the Company’s financial statements.

Recent Accounting Pronouncements

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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

assets acquired and liabilities assumed based on their respective estimated fair values on the acquisition date.

Fair values were determined

using income approaches.

T he results of Cleared are included within the consolidated financial

statements commencing on the acquisition date.

The acquisition adds to the Company’s growing portfolio of

telehealth capabilities.

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 assets acquired and liabilities assumed

based on their respective estimated fair values on the acquisition date.

Fair values were determined using income approaches.

of Cleared are included within the consolidated financial statements commencing on the acquisition date.

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 purchase agreement included up to $ 72.8 million of potential

earn-out payable in cash or stock upon achievement of revenue targets, which was originally 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.

The fair value of the identified

intangible assets was based primarily on significant unobservable inputs and thus represent a Level 3 measurement as defined in ASC 820,

Fair Value Measurement .

The fair value of the trade name and developed technology were determined using the relief-from-royalty

method under the income approach.

The royalty rates used to determine the fair value of the trade name and developed technology were

0.10 % and 1.0 %, respectively.

The fair value of the customer relationships was determined using the multi-period excess earnings method

which involves forecasting the net earnings expected to be generated.

The customer attrition rate used to determine the fair value of

the customer relationships was 10.0 %.

The discount rate used to determine the fair value of the trade name, developed technology and

customer relationships was 70.5 %.

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

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Purchase price, net of cash acquired

Intangible assets

Customer relationship intangible asset

Trade name intangible asset

Developed technology intangible asset

Deferred taxes

Accounts payable and other current liabilities

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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,

as well as the revenue and earnings generated during the period after the acquisition date, were not material for separate disclosure

and, accordingly, have not been presented.

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).

The amount allocated to goodwill and intangible assets reflected the benefits the Company expected

to realize from the growth of the acquisition’s operations.

February 4, 2023, the Company entered into the First Amendment to the Stock Purchase Agreement (the “First Amendment”) between

the Company and the sellers of Cleared.

The First Amendment was amended to, among other things:

(i) reduce the total purchase price by

$ 250 thousand to a total of $ 3.67 million;

(ii) change the timing of the payment of the purchase price to $ 460 thousand paid at closing

(which has already been paid by the Company), with the remaining amount to be paid in five quarterly installments beginning on or before

February 6, 2023 and ending January 15, 2024;

(iii) remove all “earn-out” payments payable by the Company to the sellers;

and (iv) removing certain representations and warranties of the Company and sellers in connection with the transaction.

On February 6,

2023, the Company issued 337,895 shares of common stock related to the first of five quarterly installment payments due to the sellers

of Cleared under the First Amendment and on April 17, 2023, the Company issued 455,319 shares of common stock related to the second of

five quarterly installment payments due to the sellers of Cleared under the First Amendment.

the year ended December 31, 2022, the Company recorded a decrease of $ 5.1 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 and the removal of all earn-out payments payable by the Company from the terms of the

First Amendment.

During the year ended December 31, 2022, the Company also recorded an $ 8.0 million goodwill impairment charge and an

$ 827 thousand intangible asset impairment charge based on the decline in the Cleared financial projections (See Note 4).

pro forma financial information, assuming the acquisition had taken place on January 1, 2022, as well as the revenue and earnings generated

during the period after the acquisition date, were not material for separate disclosure and, accordingly, have not been presented.

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

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.

The Company estimated the fair value of the

contingent consideration using the income approach and will remeasure the fair value quarterly with changes accounted for through earnings.

a subscription-based resume building software.

The acquisition further adds to the capabilities of the WorkSimpli software as a service

The purchase price was $ 4.5 million, including cash paid upfront of $ 4.0 million and contingent consideration of $ 500 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 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 approximately $ 63 thousand, for a two-year

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

As of March 31, 2023, WorkSimpli has paid the Seller approximately

$ 219 thousand in accordance with the ResumeBuild APA.

The Company estimated the fair value of the contingent consideration using the

income approach and will remeasure the fair value quarterly with changes accounted for through earnings.

4 – 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:

Company’s goodwill balance related to the Cleared acquisition was $ 0 as of both March 31, 2023 and December 31, 2022.

year ended December 31, 2022, the Company recorded an $ 8.0 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 March 31, 2023 and December 31, 2022, the Company has the following amounts related to amortizable intangible assets:

SCHEDULE OF GOODWILL AND INTANGIBLE ASSETS

September 30,

Amortizable Intangible Assets:

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Cleared developed technology

Cleared customer relationships

Purchased licenses

Website domain name

Amortizable intangible assets

accumulated amortization

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

approximately $ 92,000 per year.

the year ended December 31, 2022, the Company recorded an $ 827 thousand impairment charge related to a decline in the estimated fair

value of the Cleared customer relationship intangible asset with an original cost of $ 919 thousand and accumulated amortization of $ 92

The aggregate amortization expense of the Company’s intangible assets for the three months ended March 31, 2023 and 2022

was $ 234 thousand and $ 114 thousand, respectively.

Total amortization expense for the remainder of 2023 is approximately $ 700 thousand,

2024 through 2026 is approximately $ 930 thousand per year and for 2027 is approximately $ 113 thousand.

5 – 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,

of March 31, 2023 and December 31, 2022, the Company has the following amounts related to accrued expenses:

SCHEDULE OF ACCRUED EXPENSES

Accrued selling and marketing expenses

Accrued compensation

Accrued dividends payable

Sales tax payable

Purchase price payable

Accrued dividends payable

Accrued compensation

Accrued interest

Other accrued expenses

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6 – NOTES PAYABLE

Loan and Forgiveness

June 2020, the Company and its subsidiaries received three loans in the aggregate amount of approximately $ 249 thousand (the “PPP

Loan”) under the Paycheck Protection Program legislation administered by the SBA.

These loans bear interest at one percent per

annum ( 1.0 %) and mature five years from the date of the first disbursement.

The proceeds of the PPP Loan must be used for payroll costs,

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 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.

Capital Loans

October 2022, the Company received proceeds of $ 976 thousand under a 12-month working capital loan with Amazon.

The terms of the loan

include interest in the amount of $ 62 thousand.

As of March 31, 2023 and December 31, 2022, the outstanding balance was $ 765 thousand

and $ 976 thousand, respectively, and is included in notes payable, net, on the accompanying unaudited condensed consolidated balance

November 2022, the Company received proceeds of $ 1.9 million under two 10-month working capital loans with Balanced Management.

of the loans include loan origination fees in the amount of $ 60 thousand and total interest of $ 840 thousand.

As of March 31, 2023 and

December 31, 2022, the outstanding balance was $ 1.058 million and $ 1.821 million, respectively, and is included in notes payable, net, on

the accompanying unaudited condensed consolidated balance sheet.

the three months ended March 31, 2023, the Company received proceeds of $ 2

million under a $ 2.5

million loan facility with CRG Financial, maturing on December

The loan facility includes interest of 12 %.

The Company repaid the $ 2

million outstanding loan balance on March 21, 2023 with the proceeds received from the Avenue Facility and recorded a $ 325

thousand loss on debt extinguishment related to the repayment of the CRG Financial loan due to a prepayment penalty and various fees.

As of both March 31, 2023 and December 31, 2022, the outstanding balance was $ 0

related to the CRG Financial loan.

interest expense on notes payable amounted to $ 21 thousand and $ 0 for the three months ended March 31, 2023 and 2022, respectively.

7 – CONVERTIBLE LONG-TERM DEBT

Capital Credit Facility

noted in Note 1 above, on March 21, 2023, the Company entered into and closed on a Credit Agreement, and a Supplement to the Credit Agreement

The Credit Agreement provides for a convertible senior secured credit facility of up to an aggregate amount of $ 40 million,

comprised of the following:

(1) $ 15 million in term loans funded at closing, (2) $ 5 million of additional committed term loans available

in the fourth quarter of 2023 and (3) $ 20 million of additional uncommitted term loans, collectively referred to as the “Avenue

The Company issued Avenue Warrants to purchase $ 1.2 million of the Company’s common stock at an exercise price

of $ 1.24 , subject to adjustments.

The Warrants have a term of five years .

The relative fair value of the Warrants issued to Avenue upon

closing was $ 1.1 million.

In addition, Avenue may convert up to $ 2 million of the $ 15 million in

term loans funded at closing into shares of the Company’s common stock at any time while the loans are outstanding, at a price

per share equal to $ 1.49 .

The relative fair value was recorded to debt discount and is included as a reduction to long-term debt

on the unaudited condensed consolidated balance sheet as of March 31, 2023.

The Company incurred other fees associated with the Avenue

Facility including:

(1) a $300 thousand financing fee, (2) a $200 thousand upfront commitment fee of 1% of the total $20 million in committed

capital and (3) $27 thousand in legal fees.

The total debt discount recorded of $1.6 million will be amortized over a forty-two-month

Total amortization of debt discount was $ 38 thousand for the three months ended March 31, 2023.

Avenue Facility matures on October

1, 2026 and interest

is based on the greater of:

(1) the Prime Rate (as defined in the Supplement) plus 4.75% and (2) 12.5%.

As of March 31, 2023, the interest

rate is 12.5%.

Payments are interest only until November 2024 .

The Company received gross proceeds of $ 15.0

million (net proceeds of $ 12.3

million after repayment of the $ 2

million outstanding CRG loan balance and various

Proceeds from the Avenue Facility were used to repay the Company’s outstanding notes payable balances with CRG Financial

and are expected to be utilized for general corporate purposes and at the Company’s election, re-financing up to $ 5

million liquidation value plus accrued interest

of the Series B Preferred Stock.

of the date of filing, there is $ 15 million outstanding under the Avenue Facility and the Company is in compliance with the Avenue Facility

interest expense on convertible long-term debt, inclusive of amortization of debt discounts, amounted to $ 96 thousand and $ 0 for the

three months ended March 31, 2023 and 2022, respectively.

8 – STOCKHOLDERS’ EQUITY

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June 8, 2021, the Company filed the 2021 Shelf.

Under the 2021 Shelf at the time of effectiveness, the Company had the ability to raise

up to $ 150 million by selling common stock, preferred stock, debt securities, warrants, and units.

In conjunction with the 2021 Shelf,

the Company also entered into the ATM Sales Agreement whereby the Company may offer and sell, from time to time, shares of common stock

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

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

July 31, 2019, the Company entered into a certain membership interest purchase agreement (the “MIPA”) by and between the

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

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.

Stefan Galluppi (Mr.

Schreiber, Taggart International Trust, Mr.

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.

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

shares in the aggregate).

Schreiber and 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

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

Schreiber and Mr.

Galluppi (the “Milestone Shares”) ( 2,000,000

shares in the aggregate).

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 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.

Under the 2021 Shelf at the time of effectiveness, the Company originally had the ability

to raise up to $ 150 million by selling common stock, preferred stock, debt securities, warrants and units.

In conjunction with the 2021

Shelf, the Company also entered into the ATM Sales Agreement whereby the Company may offer and sell, from time to time, shares of common

On March 22, 2023, the date the Company filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2022, the

Company became subject to the offering limits in General Instruction I.B.6 of Form S-3 (i.e., the “baby shelf limitations”).

As a result of the baby shelf limitations, the Company may only offer and sell shares of common stock having an aggregate offering price

of up to $ 18.435 million pursuant to the ATM Sales Agreement, and it filed a prospectus supplement with the SEC to that effect on March

In the event that the Company’s public float increases above $ 75.0 million, the Company will no longer be subject to

the baby shelf limitations, in which case the Company will file another prospectus supplement with the SEC prior to making sales pursuant

to the ATM Sales Agreement in excess of $ 18.435 million.

As of March 31, 2023, the Company has $ 18.435 million available under the ATM

Sales Agreement.

Stock Transactions During the Three Months Ended March 31, 2023

the three months ended March 31, 2023, the Company issued an aggregate of 149,375 shares of common stock for service, including vested

restricted stock units.

February 4, 2023, the Company entered into the First Amendment to the Stock Purchase Agreement (the “First Amendment”) between

the Company and the sellers of Cleared.

The First Amendment was amended to, among other things change the timing of the payment of the

purchase price to $ 460 thousand paid at closing (which has already been paid by the Company), with the remaining amount to be paid in

five quarterly installments beginning on or before February 6, 2023 and ending January 15, 2024.

On February 6, 2023, the Company issued

337,895 shares of common stock related to the first of five quarterly installment payments due to the sellers of Cleared under the First

March 21, 2023, in connection with the Company’s closing of a Credit Agreement with Avenue, the Company issued Avenue warrants

to purchase $ 1.2 million of the Company’s common stock at an exercise price of $ 1.24 , subject to adjustments.

In addition, Avenue

may convert up to $ 2 million of the $ 15 million in term loans funded at closing into shares of the Company’s common stock at any

time while the loans are outstanding, at a price per share equal to $ 1.49 .

Noncontrolling

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 .

income attributed to the non-controlling interest amounted to $ 566 thousand and $ 25 thousand for the three months ended March 31, 2023

and 2022, respectively.

During both the three months ended March 31, 2023 and 2022, the Company paid distributions to non-controlling

shareholders of $ 36 thousand.

Software Restructuring Transaction

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

January 22, 2021 (the “WSS Effective Date”), the Company consummated the WSS Restructuring, which is described in Note 1.

To effect the WSS Restructuring the Company’s wholly-owned subsidiary Conversion Labs 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

balance of $ 376 thousand (the “CVLBPR 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.

Upon consummation of the Exchange the CVLBPR Note was extinguished.

Concurrently,

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PR MIPA”), pursuant to which Conversion Labs PR purchased 12,000 membership interests of WSS for an aggregate purchase price of

The CVLB PR MIPA provides that the transaction may be completed in three (3) tranches, with a purchase price of $ 100,000 per

tranche to be made at the sole discretion of Conversion Labs PR.

Payment for the first tranche of $ 100,000 was made upon execution of

the CVLB PR MIPA in January 2021.

$ 300 thousand.

The CVLB PR MIPA provides that the transaction may be completed in three (3) tranches with a purchase price of $ 100 thousand

per tranche to be made at the sole discretion of Conversion Labs PR.

Payment for the first tranche of $ 100 thousand was made upon execution

of the CVLB PR MIPA in January 2021.

Payments for the second and third tranches were made on the 60-day anniversary and the 120-day anniversary

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

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

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

5 unchanged sentences

The Fitzpatrick Options vest in accordance with the following (i) 3,434 membership interests upon

WSS achieving $ 2,500,000 of gross sales in any fiscal quarter (ii) 3,434 membership interests upon WSS achieving $ 4,000,000 of gross

sales in any fiscal quarter, and (iii) 3,434 membership interests upon WSS achieving $ 8,000,000 of gross sales with a ten percent (10%)

WSS achieving $ 2.5 million of gross sales in any fiscal quarter (ii) 3,434 membership interests upon WSS achieving $ 4.0 million of gross

sales in any fiscal quarter, and (iii) 3,434 membership interests upon WSS achieving $ 8.0 million of gross sales with a ten percent (10%)

net profit margin in any fiscal quarter .

2 unchanged sentences

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 .

$ 2.5 million of gross sales in any fiscal quarter (ii) 700 membership interests upon WSS achieving $ 4.0 million of gross sales in any

fiscal quarter, and (iii) 700 membership interests upon WSS achieving $ 8.0 million 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,

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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”)

January 8, 2021, the Company approved the Company’s 2020 Plan.

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

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

for the issuance of up to 1,500,000 shares of Common Stock.

The number of shares of Common Stock available for issuance under the 2020

Plan automatically increases by 150,000 shares of Common Stock on January 1st of each year, for a period of not more than ten years,

commencing on January 1, 2021 and ending on (and including) January 1, 2030.

Awards under the 2020 Plan can be granted in the form of

stock options, non-qualified and incentive options, stock appreciation rights, restricted stock, and restricted stock units.

Effective March 31,

2023, the Company redeemed 500 membership interest units in WorkSimpli.

Following the retirement, Conversion Labs PR’s ownership

interest in WorkSimpli increased to 74.06 % .

January 8, 2021, the Company approved the Company’s 2020 Equity and Incentive Plan (the “2020 Plan”).

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.

The 2020 Plan is administered by the Compensation Committee of the Board

of Directors (the “Board”) and initially provided for the issuance of up to 1,500,000 shares of Common Stock.

of shares of Common Stock available for issuance under the 2020 Plan automatically increases by 150,000 shares of Common Stock on January

1st of each year, for a period of not more than ten years, commencing on January 1, 2021 and ending on (and including) January 1, 2030.

Awards under the 2020 Plan can be granted in the form of stock options, non-qualified and incentive options, stock appreciation rights,

restricted stock, and restricted stock units.

June 24, 2021, at the Annual Meeting of Stockholders, the stockholders of the Company approved an amendment to the 2020 Plan to increase

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

January 1, 2022, the Plan provided for the issuance of up to 3,300,000 shares of Common Stock.

June 16, 2022, at the Annual Meeting of Stockholders, the stockholders of the Company approved an amendment to the 2020 Plan to increase

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

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.

March 31, 2023, the 2020 Plan, as amended, provided for the issuance of up to 4,950,000 shares of Common Stock.

Remaining authorization

under the 2020 Plan, as amended, was 1,573,830 shares as of March 31, 2023.

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

7 unchanged sentences

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

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 three months ended March 31, 2023, the Company issued an aggregate of 180,500 stock options to employees under the 2020 Plan and

the prior plan.

1 unchanged sentence

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

following is a summary of outstanding options activity under our 2020 Plan for the three months ended March 31, 2023:

SCHEDULE OF OPTION ACTIVITY

Balance, December 31, 2022

Cancelled/Forfeited/Expired

Balance at September 30, 2022

Balance at March 31,

Exercisable at December 31, 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:

Exercisable at March 31, 2023

total fair value of the options granted was $ 76 thousand, which was determined by the Black-Scholes Pricing Model with the following

dividend yield of 0 % , expected term of 4 years, volatility of 123.7 % – 123.8 % and risk-free rate of 3.58 % –

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:

Total compensation expense under the 2020 Plan options above was $ 1.2 million and $ 1.6 million for the three months ended March

31, 2023 and 2022, respectively, with unamortized expense remaining of $ 4.4 million as of March 31, 2023.

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

months ended March 31, 2023:

SCHEDULE OF OPTION ACTIVITY

Options Outstanding Number of Shares

Exercise Price per Share

Weighted Average Remaining Contractual Life

Weighted Average Exercise Price per Share

Exercise Price

Balance, December 31, 2022

Cancelled/Forfeited/Expired

Balance at September 30, 2022

Balance at March 31,

Exercisable December 31, 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:

Exercisable at March 31, 2023

total fair value of the options granted was $ 142 thousand, which was determined by the Black-Scholes Pricing Model with the following

dividend yield of 0 % , expected term of 6.5 years, volatility of 187.76 % – 195.58 % and risk-free rate of 1.21 % –

Total compensation expense under the

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

Options Outstanding Number of Shares

Exercise Price per Share

Weighted Average Remaining Contractual Life

Weighted Average Exercise Price per Share

Total compensation expense under the above service-based option plan was $ 643 thousand and $ 550 thousand for the three months

ended March 31, 2023 and 2022, respectively, with unamortized expense remaining of $ 2.1 million as of March 31, 2023.

following is a summary of outstanding performance-based options activity (separate from the 2020 Plan) for the three months ended March

SCHEDULE OF OPTION ACTIVITY

Exercise Price

Balance at December 31, 2022

Cancelled/Forfeited/Expired

Balance at September 30, 2022

Balance at March 31,

Exercisable December 31, 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:

dividend yield of 0 %, expected term of 3.5 years, volatility of 444 % and risk-free rate of 1.37 %.

Total compensation expense under the

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 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 nine months ended September 30, 2022:

OF WARRANT AND RESTRICTED STOCK OUTSTANDING AND EXERCISABLE

RSUs Outstanding

Exercisable at March 31, 2023

compensation expense was recognized on the performance-based options above for the three months ended March 31, 2023, as the performance

terms have not been met or are not probable.

Total compensation expense under the above performance-based options was $ 106 thousand for

the three months ended March 31, 2022.

Stock Units (RSUs)

following is a summary of outstanding RSU activity under our 2020 Plan for the three months ended March 31, 2023:

OF RESTRICTED STOCK UNIT ACTIVITY

RSU Outstanding

Number of Shares

Balance at December 31, 2022

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

Cancelled/Forfeited

Balance at March 31, 2023

total fair value of the 412,000 RSUs granted was $ 809 thousand 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 nine months ended September 30, 2022:

OF WARRANT AND RESTRICTED STOCK OUTSTANDING AND EXERCISABLE

RSUs Outstanding

Total compensation expense under the 2020 Plan RSUs above was $ 543 thousand and $ 976 thousand for the three months

ended March 31, 2023 and 2022, respectively, with unamortized expense remaining of $ 4.0 million as of March 31, 2023.

During the three

months ended March 31 2023, 120,375 RSUs vested, of which 49,375 RSUs were issued.

following is a summary of outstanding RSU activity (outside of our 2020 Plan) for the three months ended March 31, 2023:

OF RESTRICTED STOCK UNIT ACTIVITY

RSU Outstanding

Number of Shares

Balance at December 31, 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 $ 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:

Balance at March 31, 2023

total fair value of the 50,000 RSUs granted was $ 73 thousand 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 $ 305 thousand and $ 591 thousand for the three months

ended March 31, 2023 and 2022, respectively, with unamortized expense remaining of $ 4.9 million as of March 31, 2023.

During the three

months ended March 31, 2023, 115,000 RSUs vested, of which 100,000 RSUs were issued.

following is a summary of outstanding and exercisable warrants activity during the three months ended March 31, 2023:

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

Exercise Price

Balance at December 31, 2022

Cancelled/Forfeited/Expired

Balance at September 30, 2022

Balance at March 31,

Exercisable December 31, 2022

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.

Exercisable March 31, 2023

total fair value of the warrants granted was $ 1.1 million, which was determined by the Black-Scholes Pricing Model with the following

dividend yield of 0 % , expected term of 4 years, volatility of 122.6 % and risk-free rate of 3.73 % .

Total compensation expense

on the above warrants was $ 12 thousand and $ 605 thousand for the three months ended March 31, 2023 and 2022, respectively, with unamortized

expense remaining of $ 6 thousand as of March 31, 2023.

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 $ 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.

options, warrants and RSUs amounted to $ 2.7 million and $ 4.5 million for the three months ended March 31, 2023 and 2022, 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

expense remaining related to service-based stock options, performance-based stock options, warrants and RSUs was $ 15.4 million as of

March 31, 2023, which is expected to be recognized through 2026.

Company leases office space domestically under operating leases.

4 unchanged sentences

in Columbia, Pennsylvania for which the lease expires in 2024.

WorkSimpli leases office space in Puerto Rico for which the lease expires

following is a summary of the Company’s operating right-of-use assets and operating lease liabilities as of March 31, 2023:

Operating right-of-use

Operating lease liabilities

Total accumulated amortization of the Company’s operating right-of-use assets was $1.5 million as of March

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 September 30, 2022:

SCHEDULE OF MATURITY OF OPERATING LEASE LIABILITIES

Remainder of fiscal year 2022

liabilities recognized on the unaudited condensed consolidated balance sheet as of March 31, 2023:

OF MATURITY OF OPERATING LEASE LIABILITIES

Fiscal year 2023

3 unchanged sentences

Present value of operating lease liabilities

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.

lease expenses were $ 223 thousand and $ 202 thousand for the three months ended March 31, 2023 and 2022, respectively, and were included

in other operating expenses in our unaudited condensed 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,

OF OTHER INFORMATION RELATED TO OPERATING LEASE LIABILITIES

Cash paid for operating lease liabilities

balance sheet information related to operating lease liabilities consisted of the following:

SCHEDULE OF BALANCE SHEETS RELATED TO OPERATING LEASE LIABILITIES

September 30, 2022

March 31, 2023

December 31, 2022

5 unchanged sentences

Straight-line

lease payments are $ 2,100 per month.

Additionally, Conversion Labs PR utilizes office space in Puerto Rico, which is subleased from Fried

LLC, on a month-to-month basis, incurring rental expense of approximately $ 3,000 per month.

lease payments are $ 3 thousand per month.

Additionally, Conversion Labs PR utilizes office space in Puerto Rico on a month-to-month basis

incurring rental expense of approximately $ 3 thousand per month.

10 - COMMITMENTS AND CONTINGENCIES

7 unchanged sentences

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

As of September 30, 2022

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

As of March 31, 2023 and

December 31, 2022, $ 0 and approximately $ 138 thousand, respectively, were included in accrued expenses in regard to this agreement.

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

10 unchanged sentences

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 September 30, 2022 .

were earned or owed as of March 31, 2023 .

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

stock at an exercise price of $ 2.50 .

Further, if Licensed Products have gross receipts of $ 7,500,000 in any calendar year, the Company

Further, if Licensed Products have gross receipts of $ 7.5 million in any calendar year, the Company

will grant Alphabet an option to purchase 20,000 shares of the Company’s common stock at an exercise price of $ 2.50 ;

(ii) if Licensed

Products have gross receipts of $ 10,000,000 in any calendar year, the Company will grant Alphabet an additional option to purchase 20,000

Products have gross receipts of $ 10.0 million in any calendar year, the Company will grant Alphabet an additional option to purchase

20,000 shares of the Company’s common stock at an exercise price of $ 2.50 and (iii) if Licensed Products have gross receipts of

in any calendar year, the Company will grant Alphabet an option to purchase 40,000 shares of the Company’s common stock at an exercise

price of $ 3.75 .

The likelihood of meeting these performance goals for the licensed products are remote and, therefore, the Company has

not recognized any compensation.

$ 20.0 million in any calendar year, the Company will grant Alphabet an option to purchase 40,000 shares of the Company’s common

stock at an exercise price of $ 3.75 .

The likelihood of meeting these performance goals for the licensed products are remote and, therefore,

the Company has not recognized any compensation.

of the Company’s vendors require product deposits when a purchase order is placed for goods or fulfillment services related to

2 unchanged sentences

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

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 March 31, 2023, the Company approximates

its implicit purchase commitments to be $ 586 thousand.

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

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

As of March 31, 2023, other than

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

effect on the Company’s consolidated financial position.

1 unchanged sentence

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.

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-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 $ 5.0 million and $ 33.0 million in alleged damages related to failure to award the aforementioned stock but only specifically

states that “Harborside has incurred damages in excess of $ 75 thousand, 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.

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

On September 22, 2022, as a result of mediation, the parties reached a settlement to resolve the matters in these cases.

issued 400,000 shares of common stock during the year ended December 31, 2022 and it is possible that the Company will issue 100,000

additional shares of common stock in the future related to this settlement.

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

financial results.

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 ,

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:

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 $ 274 thousand, and, therefore, “LifeMD has been unjustly enriched in an amount in excess of $ 274 thousand, 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;

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

(ii) by breach of contract by plaintiff;

(iii) by offset, recoupment,

and/or unjust enrichment to plaintiff;

(iv) by accord and satisfaction;

for failure of condition precedent;

(vi) because adequate remedies at law exist;

(v) 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:

(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

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;

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

GoGoCare telehealth company;

unjust enrichment 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,

1 unchanged sentence

and (f) an accounting.

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

parties had commenced fact discovery.

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.

1 unchanged sentence

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.

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.

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.

On September 22, 2022, as a result of mediation, the parties reached a settlement to

resolve the matters in these cases.

As noted above, the Company issued 400,000 shares of common stock during the year ended December

31, 2022 and it is possible that the Company will issue 100,000 additional shares of common stock in the future related to this settlement.

The 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

23 unchanged sentences

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

, which implicitly meets or exceeds the purported $ 1.0 million 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

On May 22, 2022, the Company filed its answer, affirmative defenses, and counterclaim, denying

the alleged breaches of its obligations under the engagement letter agreement.

Further, the Company asserted the following affirmative

(1) failure to state a claim on which relief can be granted;

(3) breach of the engagement letter agreement;

unclean hands;

(5) failure to mitigate;

(6) the doctrines of waiver, accord, and satisfaction, and res judicata;

(7) estoppel;

repudiation/anticipatory breach.

The Company also counterclaimed for a declaratory judgment that:

(i) Plaintiff breached, repudiated

and/or anticipatorily breached the engagement letter agreement;

(ii) as a result, the Company was not bound by the terms of the engagement

letter agreement from that time forward;

(iii) Plaintiff is not owed any amounts under the engagement letter agreement;

an award to the Company of any further relief that the Court deems just and proper.

Court conducted virtual case management conferences on June 30, 2022 and August 3, 2022, and fact discovery (i.e., written discovery

requests and responses) commenced thereafter.

On August 29, 2022, the plaintiff subpoenaed B.

Riley Financial, Inc.

for documents.

Court subsequently conducted several case management and status conferences, beginning in October 2022 and continuing through March 2023.

On April 5, 2023, the court granted the plaintiff’s motion to compel and ordered the Company to conduct certain additional searches

for documents and to produce responsive documents by April 26, 2023.

The Court further set a case management conference for May 17, 2023,

which will address a schedule for remaining discovery.

The Company intends to vigorously defend against this action.

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

cannot yet be estimated.

As this action is

in its preliminary phase, a potential loss cannot yet be estimated.

11 – RELATED PARTY TRANSACTIONS

Executive Officer

Labs PR utilizes office space in Puerto Rico, which is subleased from Fried LLC, a third party, and incurs expense of approximately $ 3,000

a month for this office space.

The Company previously made payments to JLS Ventures, an entity wholly owned by our Chief Executive Officer

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

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

Company’s CEO, to warehouse a portion of the Company’s finished goods inventory and for fulfillment services.

31, 2021, the Company entered into an Asset Purchase Agreement (the “APA”) with BV Global and the Owner, whereby BV Global

and the Owner agreed to sell to the Company certain purchased assets of BV Global in exchange for approximately $ 9 thousand.

entering into the APA, the Company paid a monthly fee of $ 13,000 to $ 16,000 for fulfillment services and reimbursed BV Global for their

direct costs associated with shipping the Company’s products.

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.

the three months ended March 31, 2023, the Company received proceeds of $ 2 million under a $ 2.5 million loan facility with CRG Financial,

maturing on December 15, 2023 .

The loan facility includes interest of 12 % .

The Company repaid the $ 2 million outstanding loan balance

on March 21, 2023 with the proceeds received from the Avenue Facility and recorded a $ 325 thousand loss on debt extinguishment related

to the repayment of the CRG Financial loan (see Note 6).

As of both March 31, 2023 and December 31, 2022, the outstanding balance was

$ 0 related to the CRG Financial loan.

Bhatia, a member of the Board of the Company, also serves on the Board of Directors of CRG

the three months ended March 31, 2023 and 2022, WorkSimpli utilized LegalSubmit Pvt.

(“LegalSubmit”), a company owned

1 unchanged sentence

WorkSimpli paid LegalSubmit a total of $ 623

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

April 1, 2022, Justin Schreiber, the Company’s CEO, entered into an Employment Agreement (the “Schreiber Employment Agreement”)

with the Company.

The Schreiber Employment Agreement is for an indefinite term and may be terminated with or without cause.

to the Schreiber Employment Agreement, Mr.

Schreiber will receive an annual base salary of $ 300,000 and shall be eligible to earn a performance

bonus in such amount, if any, as determined in the sole discretion of the Board, with a target amount of 75 % of the base salary.

January 27, 2022, the Company and Marc Benathen, our Chief Financial Officer (“CFO”), entered into the First Amendment to

his employment agreement to provide that Mr.

Benathen receive 75,000 RSUs, with 25,000 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 Mr.

is eligible to receive up to 250,000 Performance Stock Units (“PSUs”), which will vest subject to the Company achieving certain

key revenue, EBITDA and share price appreciation milestones.

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 milestones.

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

In connection with her appointment

as Principal Accounting Officer, Ms.

Stan entered into an amendment to her employment agreement with the Company, whereby the Company

granted her an additional long-term incentive award of 15,000 RSUs, with 5,000 units vesting on the grant date and the first and second

anniversaries of the grant date, and 50,000 PSUs.

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.

thousand and $ 299 thousand during the three months ended March 31, 2023 and 2022, respectively, for these services.

There were no amounts

owed to LegalSubmit as of both March 31, 2023 and December 31, 2022.

12 – 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 nine months

ended September 30, 2022 and 2021 is as follows:

Relevant segment data for the three months ended March

31, 2023 and 2022 is as follows:

SCHEDULE OF RELEVANT SEGMENT DATA

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Operating loss

1 unchanged sentence

$ ( 13,271,857 )

$ ( 36,668,305 )

$ ( 37,047,599 )

Operating income (loss)

$ ( 441,164 )

$ ( 3,588,805 )

Operating income

Operating loss

1 unchanged sentence

$ ( 13,107,015 )

$ ( 35,563,840 )

$ ( 40,636,404 )

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

September 30, 2022

segment data as of March 31, 2023 and December 31, 2022 is as follows:

March 31, 2023

December 31, 2022

1 unchanged sentence

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

November 2022, the Company issued an aggregate of 95,000 shares of common stock for services rendered.

Option Exercise

April 10, 2023, the Company issued 16,471

shares of common stock related to a cashless exercise of options.

Issued for Noncontingent Consideration Payment

April 17, 2023, the Company issued 455,319 shares of common stock related to the second of five quarterly installment payments due to

the sellers of Cleared under the First Amendment.

Stock Issued for Service

On May 1, 2023, the Company issued

3,000 shares of common stock related to vested restricted stock units.

April 2023, the parties in the case of LifeMD, Inc.

Lamarco, et al, Case No.

reached a settlement agreement and submitted a stipulation to the court.

The stipulation was so ordered on April 6, 2023,

and the case was closed.

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