What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-08-07 compared with 2024-05-08 · 256 added, 159 removed, 384 unchanged (52% of the section changed)

116 unchanged sentences

supports a broad range of primary care, chronic disease and lifestyle healthcare needs.

Currently, LifeMD treats over 235,000 active

patient subscribers across a range of their medical needs including primary care, men’s sexual health, weight management, sleep,

hair loss and hormonal therapy by providing telehealth clinical services and prescription and over-the-counter (“OTC”) treatments,

as medically appropriate.

Currently, LifeMD treats approximately 254,000

active patient subscribers across a range of their medical needs including primary care, men’s sexual health, weight management,

sleep, hair loss and hormonal therapy by providing telehealth clinical services and prescription and over-the-counter (“OTC”)

treatments, as medically appropriate.

Our virtual primary care services are primarily offered on a subscription basis.

Since inception, we have helped

approximately 918,000 customers and patients by providing them greater access to high-quality, convenient, and affordable care.

Since inception,

we have helped approximately 996,000 customers and patients by providing them greater access to high-quality, convenient, and affordable

mission is to empower people to live healthier lives by increasing access to high-quality and affordable virtual and in-home healthcare.

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During April 2023, we launched a highly successful and differentiated GLP-1 Weight Management offering driven by our

existing primary care capabilities that already had more than 42,000 patient subscribers as of March 31, 2024.

existing primary care capabilities that already had more than 60,000 patient subscribers as of June 30, 2024.

Patients receive a range

4 unchanged sentences

Morgan Research.

telehealth revenue increased 53% for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023.

revenue from recurring subscriptions is approximately 97%.

In addition to our telehealth business, we own 73.32% of WorkSimpli, which

operates PDFSimpli, a rapidly growing software as a service platform for converting, signing, editing, and sharing PDF documents.

business experienced 3% year-over-year revenue growth, with recurring revenue of 100%, due to a combination of higher demand, increased

market awareness, enhanced digital capabilities, continued marketing campaign expansion and the addition of the ResumeBuild brand in

the first quarter of 2022.

telehealth revenue increased 60% for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023.

Total revenue

from recurring subscriptions is approximately 97%.

In addition to our telehealth business, we own 73.32% of WorkSimpli, which operates

PDFSimpli, a rapidly growing software as a service platform for converting, signing, editing, and sharing PDF documents.

WorkSimpli recurring

revenue is 100%.

Platform and Business Strategy

38 unchanged sentences

Since inception,

our Weight Management program has grown exponentially to over 42,000 patient subscribers as of March 31, 2024.

our Weight Management program has grown exponentially to over 60,000 patient subscribers as of June 30, 2024.

We remain at the forefront

47 unchanged sentences

December 11, 2023, the Company entered into a collaboration with Medifast, Inc.

through and with certain of its wholly-owned subsidiaries

(“Medifast”).

Medifast will utilize the Company’s virtual care technology platform to provide its clients access

to a clinically supported weight management program, including GLP-1 medications, which are a class of medications that mainly help

manage blood sugar (glucose) levels in people with Type 2 diabetes but can also treat obesity.

Pursuant to certain agreements between

the parties, Medifast has agreed to pay to the Company the amount of $10 million to support the collaboration, funding enhancements

to the Company platform, operations and supporting infrastructure, of which $5 million was paid at the closing on December 12, 2023,

$2.5 million was paid during the three months ended March 31, 2024, and the remainder $2.5 million is to be paid by June 30, 2024

(or earlier upon the Company’s achievement of certain program milestones) (the “Medifast Collaboration”).

with certain of its wholly-owned subsidiaries (“Medifast”).

Medifast will utilize

the Company’s virtual care technology platform to provide its clients access to a clinically

supported weight management program, including GLP-1 medications, which are a class of medications

that mainly help manage blood sugar (glucose) levels in people with Type 2 diabetes but can

also treat obesity.

Pursuant to certain agreements between the parties, Medifast has agreed

to pay to the Company the amount of $10 million to support the collaboration, funding enhancements

to the Company platform, operations and supporting infrastructure, of which $5 million was

paid at the closing on December 12, 2023, $2.5 million was paid during the three months ended

March 31, 2024, and the remainder $2.5 million was paid during the three months ended June

30, 2024 (the “Medifast Collaboration”).

addition, in connection with the Medifast Collaboration, the Company entered into a stock purchase agreement and registration rights

27 unchanged sentences

WorkSimpli had over

166,000 active subscriptions as of March 31, 2024.

158,000 active subscriptions as of June 30, 2024.

of Operations

financial results for the three months ended March 31, 2024 are summarized as follows in comparison to the three months ended March 31,

March 31, 2024

March 31, 2023

Telehealth revenue, net

of the Three Months Ended June 30, 2024 to the Three Months Ended June 30, 2023

financial results for the three months ended June 30, 2024 are summarized as follows in comparison to the three months ended June 30,

Telehealth revenue,

WorkSimpli revenue, net

Total revenue, net

Cost of telehealth revenue

Cost of WorkSimpli revenue

Total cost of revenue

cost of revenue

Selling and marketing expenses

General and administrative expenses

General and administrative

Customer service expenses

Other operating expenses

Development costs

Customer service expenses

Total expenses

Operating loss

Interest expense, net

Loss on debt extinguishment

Net income attributable to non-controlling interest

Net loss attributable to LifeMD, Inc.

attributable to non-controlling interest

Net loss attributable to LifeMD,

Preferred stock dividends

Net loss attributable to common shareholders

Net loss attributable to common

$ (7,652,202 )

1 unchanged sentence

revenue, net.

Revenues for the three months ended March 31, 2024 were approximately $44.1 million, an increase of 33% compared to approximately

$33.1 million for the three months ended March 31, 2023.

The increase in revenues was attributable to both the increase in telehealth

revenue of 53% and an increase in WorkSimpli revenue of 3%.

Telehealth revenue accounts for 70% of total revenue and has increased during

the three months ended March 31, 2024 due to an increase in online sales demand primarily for LifeMD primary care which experienced an

increase of approximately $7.3 million during the three months ended March 31, 2024 compared to the three months ended March 31, 2023

Revenues for the three months ended June 30, 2024 were approximately $50.7 million, an increase of 41% compared to approximately

$35.9 million for the three months ended June 30, 2023.

The increase in revenues was attributable to an increase in telehealth revenue

of 67%, partially offset by a decrease in WorkSimpli revenue of 3%.

Telehealth revenue accounts for 74% of total revenue and has increased

during the three months ended June 30, 2024 due to an increase in online sales demand primarily for LifeMD primary care which experienced

an increase of approximately $13.4 million during the three months ended June 30, 2024 compared to the three months ended June 30, 2023

and Medifast Collaboration revenue.

WorkSimpli revenue accounts for 30% of total revenue and has steadily increased year over year due

to a combination of higher demand, increased market awareness, enhanced digital capabilities, continued marketing campaign expansion

and the addition of the ResumeBuild brand in the first quarter of 2022.

WorkSimpli revenue accounts for 26% of total revenue and has decreased slightly year over year due

to a lower demand.

cost of revenue.

Total cost of revenue consists of the cost of (1) telehealth revenues, which primarily include product costs, pharmacy

fulfillment costs, physician consult fees, and shipping costs directly attributable to our prescription and OTC products and (2) WorkSimpli

revenue consisting primarily of information technology fees related to providing the services made available on our online platform.

Total cost of revenue increased by approximately 9% to approximately $4.6 million for the three months ended March 31, 2024 compared

to approximately $4.2 million for the three months ended March 31, 2023.

The combined cost of revenue increase was due to increased sales

volume during the three months ended March 31, 2024 when compared to the three months ended March 31, 2023.

Telehealth costs decreased

to 14% of associated telehealth revenues experienced during the three months ended March 31, 2024, from 19% of associated telehealth

revenues during the three months ended March 31, 2023.

WorkSimpli costs increased to 3% of associated WorkSimpli revenues for the three

months ended March 31, 2024 as compared to 2% of associated WorkSimpli revenues for the three months ended March 31, 2023.

Gross profit increased by approximately 37% to approximately $39.5 million for the three months ended March 31, 2024 compared

to approximately $28.9 million for the three months ended March 31, 2023.

Gross profit as a percentage of revenues was approximately

90% for the three months ended March 31, 2024 as compared to approximately 87% for the three months ended March 31, 2023.

as a percentage of revenues for telehealth was 86% for the three months ended March 31, 2024 compared to 81% for the three months ended

March 31, 2023, and for WorkSimpli was 97% for the three months ended March 31, 2024 compared to 98% for the three months ended March

The increase in sales volume and demand for LifeMD primary care, Medifast Collaboration revenue, and improved pricing have

contributed to the increase in gross profit.

Operating expenses for the three months ended March 31, 2024 were approximately $45.7 million, as compared to approximately

$31.8 million for the three months ended March 31, 2023.

This represents an increase of 44%, or approximately $14.0 million.

fulfillment costs, physician consult fees, and shipping costs directly attributable to our prescription and OTC products and (2) the

cost of WorkSimpli revenue consisting primarily of information technology fees related to providing the services made available on our

online platform.

Total cost of revenue increased by approximately 10% to approximately $5.0 million for the three months ended June 30,

2024 compared to approximately $4.5 million for the three months ended June 30, 2023.

The combined cost of revenue increase was due to

increased telehealth sales volume during the three months ended June 30, 2024 when compared to the three months ended June 30, 2023.

Telehealth costs decreased to 12% of associated telehealth revenues experienced during the three months ended June 30, 2024, from 18%

of associated telehealth revenues during the three months ended June 30, 2023 primarily due to improved pricing.

WorkSimpli costs were

4% of associated WorkSimpli revenues for the three months ended June 30, 2024 as compared to 3% of associated WorkSimpli revenues for

the three months ended June 30, 2023.

Gross profit increased by approximately 45% to approximately $45.6 million for the three months ended June 30, 2024 compared

to approximately $31.4 million for the three months ended June 30, 2023, as a result of increased combined sales.

Gross profit as a percentage

of revenues was 90% for the three months ended June 30, 2024 as compared to 87% for the three months ended June 30, 2023.

as a percentage of revenues for telehealth was 88% for the three months ended June 30, 2024 compared to 82% for the three months ended

June 30, 2023, and for WorkSimpli was 96% for the three months ended June 30, 2024 compared to 97% for the three months ended June 30,

The increase in sales volume and demand for LifeMD primary care, Medifast Collaboration revenue, and improved pricing have contributed

to the increase in gross profit.

Operating expenses for the three months ended June 30, 2024 were approximately $51.9 million, as compared to approximately

$36.3 million for the three months ended June 30, 2023.

This represents an increase of approximately 43%, or $15.6 million.

is primarily attributable to:

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This mainly consists of online marketing and advertising expenses.

During the three months ended March 31,

During the three months ended June 30,

2024, the Company had an increase of approximately $6.8 million, or 35% in selling and marketing costs resulting from additional

3 unchanged sentences

and administrative expenses:

During the three months ended March 31, 2024, stock-based compensation was $2.5 million, with the majority

related to stock compensation expense attributable to service-based stock options and restricted stock units, as compared to stock-based

compensation expense of $2.7 million for the three months ended March 31, 2023.

This category also consists of merchant processing

fees, payroll expenses for corporate employees, taxes and licenses, amortization expense and legal and professional fees.

the three months ended March 31, 2024, the Company had an increase of approximately $4.7 million in general and administrative expenses,

primarily related to increases in compensation costs of $1.9 million and legal and professional fees of $1.6 million.

operating expenses:

This consists of rent and lease expense, insurance, office supplies and software subscriptions, royalty expense

and bank charges.

During the three months ended March 31, 2024, the Company had an increase of approximately $596 thousand, or 35%,

primarily related to rent and lease expenses, office supplies and software subscriptions.

This mainly relates to third-party technology services for developing and maintaining our online platforms.

During the three

months ended March 31, 2024, the Company had an increase of approximately $904 thousand, or 76%, primarily resulting from technology

platform improvements and amortization expenses.

During the three months ended June 30, 2024, stock-based compensation was $4.2 million, with the majority

related to stock compensation expense attributable to restricted stock awards, as compared to stock-based compensation expense of

$2.9 million for the three months ended June 30, 2023.

This category also consists of merchant processing fees, payroll expenses

for corporate employees, taxes and licenses, amortization expense and legal and professional fees.

During the three months ended

June 30, 2024, the Company had an increase of approximately $6.4 million in general and administrative expenses, primarily related

to increases in compensation costs of $3.8 million, merchant processing fees of $1.0 million and legal and professional fees of $917

service expenses:

1 unchanged sentence

department located in South Carolina and Puerto Rico.

During the three months ended March 31, 2024, the Company had an increase of

During the three months ended June 30, 2024, the Company had an increase of

approximately $821 thousand, or 43%, primarily related to increases in infrastructure costs and headcount in the Company’s

customer service department.

operating expenses:

This consists of rent and lease expense, insurance, office supplies and software subscriptions, royalty expense

and bank charges.

During the three months ended June 30, 2024, the Company had an increase of approximately $592 thousand, or 45%,

primarily related to software subscriptions and a reduction in credit card rewards.

This mainly relates to third-party technology services for developing and maintaining

our online platforms.

During the three months ended June 30, 2024, the Company had an increase

of approximately $1.0 million or 74%, primarily resulting from technology platform improvements

and amortization expenses.

expense, net.

Interest expense, net consists of interest expense related to the Avenue Facility and notes payable, partially offset by

interest income on the Company’s cash account balances for the three months ended March 31, 2024 and interest expense related to

interest income on the Company’s cash account balances for the three months ended June 30, 2024 and interest expense related to

the Avenue Facility, notes payable and interest accrued on the Company’s Series B Convertible Preferred Stock for the three months

ended March 31, 2023.

Interest expense increased by approximately $213 thousand during the three months ended March 31, 2024 as compared

to the three months ended March 31, 2023, primarily due to an increase in interest expensed on the Avenue Facility during the three months

ended March 31, 2024.

March 31, 2024

December 31, 2023

ended June 30, 2023.

Interest expense, net decreased by approximately $464 thousand during the three months ended June 30, 2024 as compared

to the three months ended June 30, 2023, primarily due to an increase in interest income on the Company’s cash account balances

for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023.

of the Six Months Ended June 30, 2024 to the Six Months Ended June 30, 2023

financial results for the six months ended June 30, 2024 are summarized as follows in comparison to the six months ended June 30, 2023:

Telehealth revenue,

WorkSimpli revenue, net

Cost of telehealth revenue

Cost of WorkSimpli revenue

cost of revenue

Selling and marketing expenses

General and administrative

Customer service expenses

Other operating expenses

Development costs

Operating loss

(12,476,811 )

Interest expense, net

Loss on debt extinguishment

(13,485,957 )

attributable to non-controlling interest

Net loss attributable to LifeMD,

(13,643,995 )

(10,741,456 )

Preferred stock dividends

Net loss attributable to common

$ (15,197,120 )

$ (12,294,581 )

revenue, net.

Revenues for the six months ended June 30, 2024 were approximately $94.8 million, an increase of 37% compared to approximately

$69.1 million for the six months ended June 30, 2023.

The increase in revenues was attributable to an increase in telehealth revenue

of 60% and an in WorkSimpli revenue of 0.1%.

Telehealth revenue accounts for 72% of total revenue and has increased during the six months

ended June 30, 2024 due to an increase in online sales demand primarily for LifeMD primary care which experienced an increase of approximately

$20.7 million during the six months ended June 30, 2024 compared to the six months ended June 30, 2023 and Medifast Collaboration revenue.

WorkSimpli revenue accounts for 26% of total revenue and has remained steady year over year.

cost of revenue.

Total cost of revenue consists of the cost of (1) telehealth revenues, which primarily include product costs, pharmacy

fulfillment costs, physician consult fees, and shipping costs directly attributable to our prescription and OTC products and (2) the

cost of WorkSimpli revenue consisting primarily of information technology fees related to providing the services made available on our

online platform.

Total cost of revenue increased by approximately 10% to approximately $9.6 million for the six months ended June 30,

2024 compared to approximately $8.8 million for the six months ended June 30, 2023.

The combined cost of revenue increase was due to

increased telehealth sales volume during the six months ended June 30, 2024 when compared to the six months ended June 30, 2023.

costs decreased to 13% of associated telehealth revenues experienced during the six months ended June 30, 2024, from 19% of associated

telehealth revenues during the six months ended June 30, 2023 primarily due to improved pricing.

WorkSimpli costs were 3% of associated

WorkSimpli revenues for both the six months ended June 30, 2024 and 2023.

Gross profit increased by approximately 41% to approximately $85.2 million for the six months ended June 30, 2024 compared to

approximately $60.3 million for the six months ended June 30, 2023, as a result of increased combined sales.

Gross profit as a percentage

of revenues was 90% for the six months ended June 30, 2024 as compared to 87% for the six months ended June 30, 2023.

Gross profit as

a percentage of revenues for telehealth was 87% for the six months ended June 30, 2024 compared to 81% for the six months ended June

30, 2023, and for WorkSimpli was 97% for both the six months ended June 30, 2024 and 2023.

The increase in sales volume and demand for

LifeMD primary care, Medifast Collaboration revenue, and improved pricing have contributed to the increase in gross profit.

Operating expenses for the six months ended June 30, 2024 were approximately $97.7 million, as compared to approximately $68.1

million for the six months ended June 30, 2023.

This represents an increase of 43%, or approximately $29.6 million.

The increase is primarily

attributable to:

and marketing expenses:

This mainly consists of online marketing and advertising expenses.

During the six months ended June 30, 2024,

the Company had an increase of approximately $14.3 million, or 39% in selling and marketing costs resulting from additional sales

and marketing initiatives to drive the current period’s sales growth primarily for LifeMD primary care.

This ramp up is expected

to both increase and maintain sustained revenue growth in future years, based on the Company’s recurring revenue subscription-based

and administrative expenses:

During the six months ended June 30, 2024, stock-based compensation was $6.7 million, with the majority

related to stock compensation expense attributable to restricted stock awards, as compared to stock-based compensation expense of

$5.5 million for the six months ended June 30, 2023.

This category also consists of merchant processing fees, payroll expenses for

corporate employees, taxes and licenses, amortization expense and legal and professional fees.

During the six months ended June 30,

2024, the Company had an increase of approximately $11.1 million in general and administrative expenses, primarily related to increases

in compensation costs of $5.7 million, legal and professional fees of $2.6 million and merchant processing fees of $1.6 million.

service expenses:

This consists of rent, insurance, payroll and benefit expenses related to the Company’s customer service

department located in South Carolina and Puerto Rico.

During the six months ended June 30, 2024, the Company had an increase of approximately

$1.1 million, or 32%, primarily related to increases in infrastructure costs and headcount in the Company’s customer service

operating expenses:

This consists of rent and lease expense, insurance, office supplies and software subscriptions, royalty expense

and bank charges.

During the six months ended June 30, 2024, the Company had an increase of approximately $1.2 million, or 39%, primarily

related to software subscriptions and a reduction in credit card rewards.

This mainly relates to third-party technology services for developing and maintaining our online platforms.

During the six

months ended June 30, 2024, the Company had an increase of approximately $1.9 million, or 75%, primarily resulting from technology

platform improvements and amortization expenses.

expense, net.

Interest expense, net consists of interest expense related to the Avenue Facility and notes payable, partially offset by

interest income on the Company’s cash account balances for the six months ended June 30, 2024 and interest expense related to the

Avenue Facility, notes payable and interest accrued on the Company’s Series B Convertible Preferred Stock for the six months ended

June 30, 2023.

Interest expense, net decreased by approximately $251 thousand during the six months ended June 30, 2024 as compared to

the six months ended June 30, 2023, primarily due to an increase in interest income on the Company’s cash account balances for

the six months ended June 30, 2024 as compared to the six months ended June 30, 2023.

on debt extinguishment.

The Company recorded a $325 thousand loss on debt extinguishment related to the repayment of the CRG Financial

loan during the six months ended June 30, 2023 due to a prepayment penalty and various fees associated with the CRG Financial loan.

Current assets

1 unchanged sentence

Working capital

capital decreased by approximately $8.1 million during the three months ended March 31, 2024.

$ (6,579,088 )

capital decreased by approximately $14.4 million during the six months ended June 30, 2024.

The increase in current assets is primarily

attributable to an increase in cash of approximately $2.6 million.

Current liabilities increased by approximately $9.9 million, which was

primarily attributable to an increase in deferred revenue of $4.4 million, an increase in current portion of long-term debt of $4.0 million,

and in accounts payable and accrued expenses of $1.9 million as a result of the Company extending payables and credit terms with vendors.

Current liabilities increased by approximately $16.9 million, which

was primarily attributable to an increase in deferred revenue of $6.3 million as a result of increased recurring telehealth subscription

revenue, an increase in current portion of long-term debt of $6.3 million, and an increase in accounts payable and accrued expenses of

$4.8 million as a result of timing of payments and the Company extending payables and credit terms with vendors.

and Capital Resources

Three Months Ended March 31,

Net cash provided by (used in) operating activities

$ (2,613,938 )

Net cash used in investing activities

Net cash (used in) provided by financing activities

Months Ended June 30,

Net cash provided

by operating activities

Net cash used in investing

Net cash (used in) provided

by financing activities

Net increase in cash

cash provided by operating activities was approximately $5.2 million for the three months ended March 31, 2024, as compared with approximately

$2.6 million net cash used in operating activities for the three months ended March 31, 2023.

The significant factors contributing to

the net cash provided by operations during the three months ended March 31, 2024, include:

(1) an increase in deferred revenue of $4.4

million, (2) an increase in accounts payable and accrued expenses of $2.6 million, (3) $2.5 million in non-cash stock-based compensation

charges and (4) $2.2 million in non-cash depreciation and amortization, partially offset by the Company’s net loss of $6.6 million

for the three months ended March 31, 2024.

Net cash used in operating activities for the three months ended March 31, 2023, was driven

primarily by the net loss of approximately $3.4 million inclusive of the following:

(1) $2.7 million in non-cash stock-based compensation

charges, (2) $1.5 million in non-cash depreciation and amortization and (3) a $325 thousand loss on debt extinguishment.

Additionally,

a decrease in accounts payable and other operating activities of $3.8 million contributed to net cash used in operations for the three

months ended March 31, 2023.

These factors contributing to net cash used in operations were partially offset by an increase in deferred

revenue of $348 thousand and an increase in inventory of $321 thousand due to the timing of purchases.

cash used in investing activities for the three months ended March 31, 2024 was approximately $2.2 million, as compared with approximately

$1.8 million for the three months ended March 31, 2023.

Net cash used in investing activities for the three months ended March 31, 2024,

was due to cash paid for capitalized software costs of approximately $2.0 million, and cash paid for the purchase of equipment of approximately

cash provided by operating activities was approximately $9.7 million for the six months ended June 30, 2024, as compared with approximately

$2.0 million for the six months ended June 30, 2023.

The significant factors contributing to the net cash provided by operating activities

during the six months ended June 30, 2024, include:

(1) $6.7 million in non-cash stock-based compensation charges, (2) an increase in

deferred revenue of $6.3 million, (3) an increase in accounts payable and accrued expenses of $5.4 million and (4) $4.6 million in non-cash

depreciation and amortization.

These increases were partially offset by the Company’s net loss of $13.5 million for the six months

ended June 30, 2024.

Net cash provided by operating activities for the six months ended June 30, 2023, was driven primarily by the following:

(1) $5.5 million in non-cash stock-based compensation charges, (2) $3.2 million in non-cash depreciation and amortization, (3) a net

increase in accounts payable, accrued expenses and other operating activities of $3.1 million, (4) a $325 thousand loss on debt extinguishment

and (5) an increase in deferred revenue of $120 thousand.

These increases were partially offset by the Company’s net loss of $9.3

million for the six months ended June 30, 2023.

cash used in investing activities for the six months ended June 30, 2024 was approximately $5.3 million, as compared with approximately

$4.1 million for the six months ended June 30, 2023.

Net cash used in investing activities for the six months ended June 30, 2024, was

due to cash paid for capitalized software costs of approximately $4.5 million, and cash paid for the purchase of equipment of approximately

$818 thousand.

Net cash used in investing activities for the three months ended March 31, 2023, was due to cash paid for capitalized

software costs of approximately $1.8 million and cash paid for the purchase of equipment of approximately $32 thousand.

cash used in financing activities for the three months ended March 31, 2024 was approximately $1.0 million as compared with approximately

$12.0 million in net cash provided by financing activities for the three months ended March 31, 2023.

Net cash used in investing activities for the six months ended June 30, 2023, was due to cash paid for capitalized software

costs of approximately $3.9 million, cash paid for the purchase of intangible assets of $149 thousand and cash paid for the purchase

of equipment of approximately $64 thousand.

cash used in financing activities for the six months ended June 30, 2024 was approximately $1.9 million as compared with approximately

$10.0 million in net cash provided by financing activities for the six months ended June 30, 2023.

Net cash used in financing activities

for the three months ended March 31, 2024, consisted of:

(1) preferred stock dividends of $777 thousand, (2) repayments of notes payable

for the six months ended June 30, 2024, consisted of:

(1) preferred stock dividends of $1.6 million, (2) repayments of notes payable

of approximately $315 thousand, (3) distributions to non-controlling interest of $72 thousand, and (4) the final contingent consideration

1 unchanged sentence

options of approximately $108 thousand.

Net cash provided by financing activities for the three months ended March 31, 2023, consisted

Net cash provided by financing activities for the six months ended June 30, 2023, consisted of:

(1) $14.5 million in net proceeds received from the Avenue Facility and (2) $2.0 million in proceeds received from the CRG Financial

1 unchanged sentence

approximately $4.4 million net of a $325 thousand loss on debt extinguishment on the CRG Financial loan, preferred stock dividends of

approximately $777 thousand, payments made to redeem 500 WorkSimpli membership interest units of approximately $307 thousand, contingent

approximately $1.6 million, payments made to redeem 500 WorkSimpli membership interest units of approximately $307 thousand, contingent

consideration payments made related to the ResumeBuild brand acquisition of approximately $125 thousand and distributions to non-controlling

15 unchanged sentences

operations and supporting infrastructure, of which $5 million was paid at the closing on December 12, 2023, $2.5 million was paid during

the three months ended March 31, 2024, and the remainder $2.5 million is to be paid by June 30, 2024 (or earlier upon the Company’s

achievement of certain program milestones).

the three months ended March 31, 2024, and the remainder $2.5 million was paid during the three months ended June 30, 2024.

addition, in connection with the Medifast Collaboration, on December 11, 2023, the Company entered into a stock purchase agreement with

20 unchanged sentences

of the Avenue Warrants on a cashless basis resulting in 79,330 shares of the Company’s common stock issued.

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.

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

Riley Securities, Inc.

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 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.

As of March 31, 2024,

the Company had $53.3 million available under the ATM Sales Agreement and $32.0 million available under the 2021 Shelf.

The Company expects

to file a new shelf registration statement in 2024 (the “2024 Shelf”).

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.

On June 7, 2024, the Company

filed a shelf registration statement on Form S-3 under the Securities Act, which was declared effective on July 18, 2024 (the “2024

Under the 2024 Shelf at the time of effectiveness, the Company had the ability to raise up to $150.0 million by selling

common stock, preferred stock, debt securities, warrants, and units including $53.3 million of its common stock under the ATM Sales Agreement.

As of June 30, 2024, the Company had $53.3 million available under the ATM Sales Agreement, which is part of the $150.0 million available

under the 2024 Shelf.

Company reviewed its forecasted operating results and sources and uses of cash used in management’s assessment, which included

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efficiencies across the business, (2) the expected improvement in its cash burn rate over the next 12 months and positive operating cash

flows during the quarter ended March 31, 2024, (3) cash on hand of $35.1 million as of March 31, 2024, (4) $53.3 million available under

the ATM Sales Agreement and $32.0 million available under the 2021 Shelf, with the expectation of continued availability under the 2024

Shelf, (5) management’s ability to curtail expenses, if necessary, and (6) the overall market value of the telehealth industry,

which it believes will continue to drive interest in the Company already evidenced by the Medifast Collaboration and Medifast Private

Placement noted above.

flows during the six months ended June 30, 2024, (3) cash on hand of $35.7 million as of June 30, 2024, (4) $53.3 million available under

the ATM Sales Agreement, which is part of the $150.0 million available under the 2024 Shelf, (5) management’s ability to curtail

expenses, if necessary, and (6) the overall market value of the telehealth industry, which it believes will continue to drive interest

in the Company already evidenced by the Medifast Collaboration and Medifast Private Placement noted above.

Accounting Estimates

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other accounting standards updates that have been issued or proposed by the FASB that do not require adoption until a future date are

not expected to have a material impact on the consolidated financial statements upon adoption.

not expected to have a material impact on the unaudited condensed consolidated financial statements upon adoption.

Quantitative and Qualitative Disclosures about Market Risk

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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 2. Management’s Discussion and Analysis