LifeMD, Inc. 10-Q

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS The following disclosures set forth certain information with respect to all securities sold by the Company during the three months ended September 30, 2023 without registration under the Securities Act: On July 10, 2023, July 14, 2023, August 7, 2023 and August 29, 2023, the Company issued 12,500, 25,000, 75,000 and 25,000 shares, respectively, of common stock for services, including vested restricted stock units, to employees and consultants. On July 10, 2023, the Company issued 100,000 shares of common stock related to the settlement of the Harborside Advisors LLC v. LifeMD, Inc. , Case No. 21-cv-10593, and the Specialty Medical Drugstore, LLC D/B/A GoGoMeds v. LifeMD, Inc. , Case No. 21-cv-10599, matters. The shares issued were valued based on the closing price of the Company’s stock, or $5.32, on the date of settlement, July 10, 2023. 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 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 July 17, 2023, the Company issued 158,129 shares of common stock related to the third of five quarterly installment payments due to the sellers of Cleared under the First Amendment. On July 10, 2023 and August 14, 2023, PA001 Holdings, the holder of the Company’s Series B Preferred Stock elected to convert 2,275 and 1,225 shares, respectively, of the Company’s Series B Preferred Stock at a price of $3.25 per share of Series B Preferred Stock, pursuant to the terms of the Securities Purchase Agreement dated August 28, 2020. The conversion was calculated based on the original issuance price of the Series B Preferred Stock plus all accrued dividends to date. The conversion resulted in 1,010,170 and 550,694 shares of the Company’s common stock issued to PA001 Holdings on July 12, 2023 and August 15, 2023, respectively. The Company issued the shares of common stock pursuant to the exemption from registration provided by Section 4(a)(2) of the Securities Act because of the limited number of purchasers, size of the offering, manner of the offering and number of securities offered. In addition, PA001 Holdings had the necessary investment intent as required by Section 4(a)(2) of the Securities Act since PA001 Holdings agreed to, and received, the securities bearing a legend stating that such securities are restricted pursuant to Rule 144 of the Securities Act. This restriction ensures that these securities would not be immediately redistributed into the market and therefore not be part of a “public offering.” On September 28, 2023, the Company issued an aggregate of 57,901 shares of common stock related to the cashless exercise of options held by Kevin Veal, an employee of the Company, at an exercise price of $1.50 per share. The above transactions did not involve any underwriters, underwriting discounts or commissions, or any public offering. The Company relied upon the exemption from the registration requirements of the Securities Act by virtue of Section 4(a)(2) thereof and/or Regulation D promulgated by the SEC under the Securities Act. ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. ITEM 4. MINE SAFETY DISCLOSURES Not Applicable.