What changed in this filing

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Item 1. Financial Statements

2024-11-07 compared with 2024-08-07 · 601 added, 427 removed, 865 unchanged (54% of the section changed)

1 unchanged sentence

CONSOLIDATED BALANCE SHEETS

receivable, net

current assets

September 30, 2024

December 31, 2023

Current Assets

of use assets

software, net

Accounts receivable, net

Product deposit

Inventory, net

Other current assets

Total Current Assets

Non-current Assets

MEZZANINE EQUITY AND STOCKHOLDERS’ (DEFICIT) EQUITY

operating lease liabilities

portion of long-term debt

Equipment, net

Right of use assets

Capitalized software, net

Intangible assets, net

Total Non-current Assets

LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ (DEFICIT) EQUITY

Current Liabilities

operating lease liabilities

consideration

and contingencies (Note 10)

Stock, $ 0.0001 par value;

Accounts payable

Accrued expenses

Notes payable, net

Current operating lease liabilities

Current portion of long-term debt

Deferred revenue

Total Current Liabilities

Long-term Liabilities

Long-term debt, net

Noncurrent operating lease liabilities

Contingent consideration

Total Liabilities

Commitments and contingencies (Note 10)

Mezzanine Equity

Preferred Stock, $ 0.0001 par value;

5,000,000 shares authorized

Series B Convertible Preferred Stock, $ 0.0001 par value;

authorized, zero shares issued and outstanding, liquidation value, $ 0 per share as of June 30, 2024 and December 31, 2023

Stockholders’

(Deficit) Equity

A Preferred Stock, $ 0.0001 par value;

1,610,000 shares authorized, 1,400,000 shares issued and outstanding, liquidation value approximately,

$ 25.55 per share as of June 30, 2024 and December 31, 2023

Stock, $ 0.01 par value;

100,000,000 shares authorized, 41,759,572 and 38,358,641 shares issued, 41,656,532 and 38,255,601 outstanding

as of June 30, 2024 and December 31, 2023, respectively

paid-in capital

5,000 shares authorized, zero shares issued and outstanding, liquidation value, $ 0 per share as of September 30, 2024 and December 31, 2023

Stockholders’ (Deficit) Equity

Series A Preferred Stock, $ 0.0001 par value;

1,610,000 shares authorized, 1,400,000 shares issued and outstanding, liquidation value approximately, $ 25.55 per share as of September 30, 2024 and December 31, 2023

Common Stock, $ 0.01 par value;

100,000,000 shares authorized, 41,909,572 and 38,358,641 shares issued, 41,806,532 and 38,255,601 outstanding as of September 30, 2024 and December 31, 2023, respectively

Additional paid-in capital

Accumulated deficit

( 235,370,384 )

( 214,265,236 )

stock, 103,040 , at cost, as of June 30, 2024 and December 31, 2023

Treasury stock, 103,040 , at cost, as of September 30, 2024 and December 31, 2023

Total LifeMD, Inc.

Stockholders’ (Deficit) Equity

( 7,720,122 )

Non-controlling

Stockholders’ (Deficit) Equity

Non-controlling interest

Total Stockholders’ (Deficit) Equity

( 5,955,064 )

Liabilities, Mezzanine Equity and Stockholders’ (Deficit) Equity

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

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

Consolidated STATEMENTS OF OPERATIONS

Months Ended June 30,

revenues, net

of telehealth revenue

of WorkSimpli revenue

Three Months Ended September 30,

Nine Months Ended September 30,

Telehealth revenue, net

$ 108,549,257

WorkSimpli revenue, net

Total revenues, net

Cost of revenues

and marketing expenses

and administrative expenses

service expenses

operating expenses

Cost of telehealth revenue

Cost of WorkSimpli revenue

Total cost of revenues

Selling and marketing expenses

General and administrative expenses

Customer service expenses

Other operating expenses

Development costs

Total expenses

Operating loss

( 4,686,112 )

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( 12,317,737 )

Interest expense, net

( 1,567,743 )

( 1,973,901 )

on debt extinguishment

Loss on debt extinguishment

Net loss before income taxes

Income tax expense

( 5,477,232 )

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( 14,616,836 )

income attributable to non-controlling interest

loss attributable to LifeMD, Inc.

Net (loss) income attributable to non-controlling interest

Net loss attributable to LifeMD, Inc.

( 5,131,465 )

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( 16,863,891 )

stock dividends

Preferred stock dividends

( 2,329,688 )

loss attributable to LifeMD, Inc.

Net loss attributable to LifeMD, Inc.

common stockholders

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$ ( 19,193,579 )

loss per share attributable to LifeMD, Inc.

Basic loss per share attributable to LifeMD, Inc.

common stockholders

loss per share attributable to LifeMD, Inc.

Diluted loss per share attributable to LifeMD, Inc.

common stockholders

average number of common shares outstanding:

Weighted average number of common shares outstanding:

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

Consolidated STATEMENTS of CHANGES IN STOCKHOLDERS’ (DEFICIT) EQUITY

January 1, 2023

Series A Preferred

Additional Paid-in

Balance, January 1, 2023

$ 179,015,250

compensation expense

issued for noncontingent consideration payment

issued for debt instruments

A Preferred Stock Dividend

to non-controlling interest

of membership interest in WorkSimpli

(loss) income

March 31, 2023

$ ( 190,562,994 )

compensation expense

issued for noncontingent consideration payment

$ ( 163,701 )

$ ( 11,395,777

$ ( 475,548 )

$ ( 11,871,325 )

Stock compensation expense

Stock issued for noncontingent consideration payment

Warrants issued for debt instruments

Series A Preferred Stock Dividend

Distribution to non-controlling interest

Adjustment of membership interest in WorkSimpli

Net (loss) income

( 4,008,456 )

( 3,442,473 )

Balance, March 31, 2023

$ 183,183,652

$ ( 195,348,013 )

$ ( 163,701 )

$ ( 12,007,521

$ ( 12,039,018 )

Stock compensation expense

Stock issued for noncontingent consideration payment

Cashless exercise of stock options

Series A Preferred Stock Dividend

Distribution to non-controlling interest

Adjustment of membership interest in WorkSimpli

Net (loss) income

( 6,733,000 )

( 5,891,216 )

Balance, June 30, 2023

$ 186,673,930

$ ( 202,857,575 )

$ ( 163,701 )

$ ( 16,021,557

$ ( 15,237,938 )

Stock compensation expense

Stock issued for noncontingent consideration payment

Stock issued for legal settlement

Cashless exercise of stock options

Sale of common stock under ATM, net

Series B Preferred Stock conversion

Warrants issued for debt instruments fair value adjustment

Series A Preferred Stock Dividend

Distribution to non-controlling interest

Net (loss) income

( 6,122,435 )

( 5,283,147 )

Balance, September 30, 2023

$ 196,901,377

$ ( 209,756,573 )

$ ( 163,701 )

$ ( 12,671,164

$ ( 11,084,257 )

Series A Preferred

Additional Paid-in

Balance, January 1, 2024

$ 217,550,583

$ ( 214,265,236 )

$ ( 163,701 )

Stock compensation expense

Stock issued for noncontingent consideration payment

Exercise of stock options

A Preferred Stock Dividend

to non-controlling interest

of membership interest in WorkSimpli

(loss) income

June 30, 2023

Cashless exercise of warrants

Cashless exercise of options

Series A Preferred Stock Dividend

Distribution to non-controlling interest

Net (loss) income

( 6,768,355 )

January 1, 2024

( 6,648,923 )

compensation expense

issued for noncontingent consideration payment

of stock options

exercise of warrants

exercise of options

A Preferred Stock Dividend

to non-controlling interest

(loss) income

March 31, 2024

Balance, March 31, 2024

$ 220,721,095

$ ( 221,810,154 )

compensation expense

of stock options

$ ( 163,701 )

$ ( 845,303 )

Stock compensation expense

Exercise of stock options

exercise of warrants

A Preferred Stock Dividend

to non-controlling interest

(loss) income

June 30, 2024

Cashless exercise of stock options

Cashless exercise of warrants

Series A Preferred Stock Dividend

Distribution to non-controlling interest

Net (loss) income

( 6,875,640 )

( 6,837,034 )

Balance, June 30, 2024

$ 225,001,992

$ ( 229,462,356 )

$ ( 163,701 )

$ ( 4,206,329 )

$ ( 2,059,504 )

$ 225,001,992

$ ( 229,462,356 )

$ ( 163,701 )

$ ( 4,206,329 )

$ ( 2,059,504 )

Stock compensation expense

Series A Preferred Stock Dividend

Distribution to non-controlling interest

( 5,131,465 )

( 5,477,232 )

Net (loss) income

( 5,131,465 )

( 5,477,232 )

Balance, September 30, 2024

$ 227,394,727

$ ( 235,370,384 )

$ ( 163,701 )

$ ( 7,720,122 )

( 5,955,064 )

$ 227,394,727

$ ( 235,370,384 )

$ ( 163,701 )

$ ( 7,720,122 )

( 5,955,064 )

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

Consolidated STATEMENTS OF CASH FLOWS

Months Ended June 30,

FLOWS FROM OPERATING ACTIVITIES

Nine Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES

$ ( 18,963,189 )

$ ( 14,616,836 )

to reconcile net loss to net cash provided by operating activities:

of debt discount

of capitalized software

of intangibles

of consideration payable

of fixed assets

on debt extinguishment

lease payments

compensation expense

in Assets and Liabilities

current assets

lease liabilities

operating activity

cash provided by operating activities

FLOWS FROM INVESTING ACTIVITIES

paid for capitalized software costs

Adjustments to reconcile net loss to net cash provided by operating activities:

Amortization of debt discount

Amortization of capitalized software

Amortization of intangibles

Accretion of consideration payable

Depreciation of fixed assets

Loss on debt extinguishment

Operating lease payments

Stock issued for legal settlement

Stock compensation expense

Changes in Assets and Liabilities

Accounts receivable

( 1,583,832 )

Product deposit

Other current assets

( 1,303,495 )

of intangible assets

cash used in investing activities

Operating lease liabilities

Deferred revenue

Accounts payable

Accrued expenses

Other operating activity

Net cash provided by operating activities

CASH FLOWS FROM INVESTING ACTIVITIES

Cash paid for capitalized software costs

( 7,546,346 )

( 6,273,295 )

FLOWS FROM FINANCING ACTIVITIES

from long-term debt, net

from notes payable

of notes payable, net of prepayment penalty

Purchase of equipment

( 1,265,447 )

proceeds from exercise of options

stock dividends

Purchase of intangible assets

Net cash used in investing activities

( 8,815,591 )

( 6,516,645 )

consideration payments for ResumeBuild acquisition

payments for membership interest in WorkSimpli

Distributions

to non-controlling interest

cash (used in) provided by financing activities

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from long-term debt, net

Proceeds from notes payable

Repayment of notes payable, net of prepayment penalty

( 5,043,916 )

increase in cash

at beginning of period

at end of period

paid for interest

paid during the period for interest

investing and financing activities

exercise of options

exercise of warrants

issued for noncontingent consideration payment

issued for debt instruments

lease liabilities

Cash proceeds from exercise of options

Sale of common stock under ATM, net

Preferred stock dividends

( 2,329,688 )

Contingent consideration payments for ResumeBuild acquisition

Net payments for membership interest in WorkSimpli

Distributions to non-controlling interest

Net cash (used in) provided by financing activities

( 2,688,722 )

Net increase in cash

Cash at beginning of period

Cash at end of period

Cash paid for interest

Cash paid during the period for interest

Non-cash investing and financing activities

Cashless exercise of options

Cashless exercise of warrants

Stock issued for noncontingent consideration payment

Series B Preferred Stock conversion

Warrants issued for debt instruments

Right of use asset

Operating lease liabilities

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

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services, as appropriate, to patients seeking to access a medically supported weight loss solution.

In September 2024, we expanded our

Weight Management program with an alternative designed for patients who are unable or unwilling to use GLP-1 medications.

This treatment

plan consists of three oral medications – metformin, bupropion, and topiramate.

and Subsidiary History

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

As of June 30, 2024, WorkSimpli has paid the

Seller $ 500 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).

As of June 30, 2024, there is no

remaining balance outstanding related to the promissory note.

As of September 30, 2024, WorkSimpli has paid

the Seller $ 500 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).

As of September 30,

2024, there is no remaining balance outstanding related to the promissory note.

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

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Unless otherwise specified, all dollar amounts are expressed in United States dollars.

of June 30, 2024, the Company has an accumulated deficit approximating $ 229.5 million and has experienced significant losses from its

of September 30, 2024, the Company has an accumulated deficit of approximately $ 235 million and has experienced significant losses from

its operations.

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

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subject to certain adjustments as provided by the Avenue Credit Agreement, of at least $2 million.

As of June 30, 2024, there was $ 19

As of September 30, 2024, there was

$ 19 million outstanding under the Avenue Facility, and the Company was in compliance with the Avenue Facility covenants.

Loans under the

Avenue Facility accrue interest at a variable rate per annum equal to the greater of (i) the sum of 4.75% plus the Prime Rate (as defined

in the Avenue Supplement) and (ii) 12.50%.

the Avenue Facility accrue interest at a variable rate per annum equal to the greater of (i) the sum of 4.75% plus the Prime Rate (as

defined in the Avenue Supplement) and (ii) 12.50%.

Payments are interest only for up to 24 months and then fully amortized thereafter.

Facility matures on October 1, 2026 .

The Company may prepay the loans, subject to a prepayment penalty of 1.00 % to 3.00 % of the principal

amount prepaid, depending on the timing of the prepayment.

The Avenue Facility matures on October 1, 2026 .

The Company may prepay the loans, subject to a prepayment penalty of 1.00 % to 3.00 % of

the principal amount prepaid, depending on the timing of the prepayment.

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

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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”).

the remaining $ 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

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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.

As of September 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 has a current cash balance of approximately $ 32.6 million as of the filing date.

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(1) the Company’s continued strengthening of its revenues and improvement of operational 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 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 that will continue to drive interest in the Company as already

evidenced by the Medifast Collaboration and Medifast Private Placement noted above.

the expected improvement in its cash burn rate over the next 12 months and positive operating cash flows during the nine months ended

September 30, 2024, (3) cash on hand of $ 37.6 million as of September 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 that will continue to drive interest in the Company as

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

2 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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The results of operations

for the three and six months ended June 30, 2024 are not necessarily indicative of the results for the year ending December 31, 2024

for the three and nine months ended September 30, 2024 are not necessarily indicative of the results for the year ending December 31,

2024 or for any future period.

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

As of June 30, 2024

As of September 30,

2024 and December 31, 2023, there were no cash equivalents.

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

revenue for LifeMD PC was approximately $ 13.9 million and $ 436 thousand for the three months ended June 30, 2024 and 2023, respectively,

and $ 21.5 million and $ 794 thousand for the six months ended June 30, 2024 and 2023, respectively.

Total net loss for LifeMD PC was approximately

$ 10.2 million and $ 600 thousand for the three months ended June 30, 2024 and 2023, respectively, and $ 15.4 million and $ 1.6 million for

the six months ended June 30, 2024 and 2023, respectively.

revenue for LifeMD PC was approximately $ 20.0 million and $ 1.9 million for the three months ended September 30, 2024 and 2023, respectively,

and $ 41.5 million and $ 2.7 million for the nine months ended September 30, 2024 and 2023, respectively.

Total net income for LifeMD PC

was approximately $ 6.2 million and $ 440 thousand for the three months ended September 30, 2024 and 2023, respectively.

Total net income

for LifeMD PC was approximately $ 3.4 million for the nine months ended September 30, 2024 and net loss for LifeMD PC was approximately

$ 1.1 million for the nine months ended September 30, 2023.

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

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its LifeMD PC contracts with customers, the Company offers one-time and subscription-based access to the Company’s telehealth platform.

The Company offers monthly and yearly subscriptions dependent upon the subscriber’s enrollment selection.

The Company has estimated

that there is one performance obligation that is delivered over time, as the Company allows the subscriber to access the telehealth platform

for the time period of the subscription purchased.

The Company records the revenue over the customer’s subscription period for

monthly and yearly subscribers.

discounts, returns and rebates on telehealth revenues approximated $ 1.8 million and $ 497 thousand during the three months ended June

The Company offers monthly and multi-month subscriptions dependent upon the subscriber’s enrollment selection.

The Company has

estimated that there is one performance obligation that is delivered over time, as the Company allows the subscriber to access the telehealth

platform for the time period of the subscription purchased.

The Company records the revenue over the customer’s subscription period

for monthly and multi-month subscribers.

discounts, returns and rebates on telehealth revenues approximated $ 1.7 million and $ 696 thousand during the three months ended September

30, 2024 and 2023, respectively.

Customer discounts, returns and rebates on telehealth revenues approximated $ 2.8 million and $ 828 thousand

during the six months ended June 30, 2024 and 2023, respectively.

Customer discounts, returns and rebates on telehealth revenues approximated $ 4.5 million and $ 1.5 million

during the nine months ended September 30, 2024 and 2023, respectively.

The increase in customer discounts, returns and rebates on telehealth

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Customer discounts and allowances on WorkSimpli revenues approximated $ 1.1

thousand and $ 788 thousand during the three months ended June 30, 2024 and 2023, respectively.

Customer discounts and allowances on WorkSimpli

revenues approximated $ 1.4 million and $ 1.7 million during the six months ended June 30, 2024 and 2023, respectively.

million and $ 865 thousand during the three months ended September 30, 2024 and 2023, respectively.

Customer discounts and allowances

on WorkSimpli revenues approximated $ 2.5 million and $ 2.6 million during the nine months ended September 30, 2024 and 2023, respectively.

noted above, on December 11, 2023, the Company entered into the Medifast Collaboration.

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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 $ 2.5 million was paid during the three months ended June 30, 2024.

The Company determined

the transaction price totaled $ 10 million, which was fully collected as of June 30, 2024.

The Company has allocated the total $ 10 million

initial transaction price to three distinct performance obligations.

As the Company completed its first performance obligation related

to this agreement, the $ 5 million payment was fully recognized during the year ended December 31, 2023.

The Company recognized approximately

$ 2 million related to the second performance obligation during the three months ended March 31, 2024, and approximately $ 3 million related

to the second and third performance obligations during the three months ended June 30, 2024.

the three and six months ended June 30, 2024 and 2023, the Company had the following disaggregated revenue:

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

determined the transaction price totaled $ 10 million, which was fully collected as of September 30, 2024.

The Company has allocated the

total $ 10 million initial transaction price to three distinct performance obligations.

As the Company completed its first performance

obligation related to this agreement, the $ 5 million payment was fully recognized during the year ended December 31, 2023.

recognized approximately $ 2 million related to the second performance obligation during the three months ended March 31, 2024, and approximately

$ 3 million related to the second and third performance obligations during the three months ended June 30, 2024.

the three and nine months ended September 30, 2024 and 2023, the Company had the following disaggregated revenue:

SCHEDULE OF DISAGGREGATED REVENUE

Months Ended June 30,

Telehealth revenue

Three Months Ended September 30,

Nine Months Ended September 30,

Telehealth product and subscription revenue

LifeMD PC subscription revenue

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Total net revenue

$ 148,199,266

$ 107,687,158

Company records deferred revenues when cash payments are received or due in advance of its performance.

As of June 30, 2024 and December

31, 2023, the Company has accrued contract liabilities, as deferred revenue, of approximately $ 15.2 million and $ 8.8 million, respectively,

which represent the following:

(1) $ 11.0 million and $ 4.2 million as of June 30, 2024 and December 31, 2023, respectively, related to

obligations on telehealth in-process monthly or yearly contracts with customers, (2) $ 1.7 million and $ 2.1 million as of June 30, 2024

and December 31, 2023, respectively, related to obligations for telehealth products which the customer has not yet obtained control due

to non-shipment of the product and (3) $ 2.5 million and $ 2.5 million as of June 30, 2024 and December 31, 2023, respectively, related

to obligations on WorkSimpli in-process monthly or yearly contracts with customers.

revenue increased by $ 6.4 million to $ 15.2 million as of June 30, 2024 compared to $ 8.8 million as of December 31, 2023.

is primarily due to the increase in monthly and yearly subscription revenue related to LifeMD PC of approximately $ 20.7 million during

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

The amount of revenue recognized during the six months

ended June 30, 2024, that was included in the deferred revenue balance prior to June 30,2024, was $ 40.3 million.

As of September 30, 2024 and

December 31, 2023, the Company has accrued contract liabilities, as deferred revenue, of approximately $ 16.4 million and $ 8.8 million,

respectively, which represent the following:

(1) $ 12.3 million and $ 4.2 million as of September 30, 2024 and December 31, 2023, respectively,

related to obligations on telehealth in-process monthly or yearly contracts with customers, (2) $ 1.6 million and $ 2.1 million as of September

30, 2024 and December 31, 2023, respectively, related to obligations for telehealth products which the customer has not yet obtained

control due to non-shipment of the product and (3) $ 2.5 million and $ 2.5 million as of September 30, 2024 and December 31, 2023, respectively,

related to obligations on WorkSimpli in-process monthly or yearly contracts with customers.

revenue increased by $ 7.6 million to $ 16.4 million as of September 30, 2024 compared to $ 8.8 million as of December 31, 2023.

is primarily due to the increase in monthly and multi-month subscription revenue related to LifeMD PC of approximately $ 38.8 million

during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

The amount of revenue recognized

during the three months ended September 30, 2024, that was included in the deferred revenue balance at the beginning of the period, was

$ 11.2 million.

The amount of revenue recognized during the nine months ended September 30, 2024, that was included in the deferred revenue

balance at the beginning of the period, was $ 7.4 million.

Company expects to recognize all of the deferred revenue related to future performance obligations that are unsatisfied or partially

unsatisfied as of June 30, 2024 as revenue by June 30, 2025.

unsatisfied as of September 30, 2024 as revenue by September 30, 2025.

following table summarizes deferred revenue activities for the periods presented:

SCHEDULE OF CONTRACT WITH CUSTOMER LIABILITY

Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Beginning of period

Revenue recognized

( 48,708,334 )

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

As of June 30, 2024 and December

As of September 30, 2024 and December

31, 2023, the reserve for sales returns and allowances was approximately $ 930 thousand and $ 528 thousand, respectively.

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balance sheets.

of June 30, 2024 and December 31, 2023, inventory primarily consisted of finished goods, raw materials and packaging related to the Company’s

OTC products included in the telehealth revenue section of the table above.

Inventory is maintained at the Company’s third-party

warehouse location in Wyoming and at various Amazon fulfillment centers.

The Company also maintains inventory at a company owned warehouse

in Pennsylvania.

of September 30, 2024 and December 31, 2023, inventory primarily consisted of finished goods, raw materials and packaging related to

the Company’s OTC products included in the telehealth revenue section of the table above.

Inventory is maintained at the Company’s

third-party warehouse location in Wyoming and at various Amazon fulfillment centers.

The Company also maintains inventory at a company

owned warehouse in Pennsylvania.

is valued at the lower of cost or net realizable value with cost determined on an average cost basis.

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

As of both June

As of September

30, 2024 and December 31, 2023, the Company recorded an inventory reserve of approximately $ 265 thousand and $ 356 thousand, respectively.

of June 30, 2024 and December 31, 2023, the Company’s inventory consisted of the following:

of September 30, 2024 and December 31, 2023, the Company’s inventory consisted of the following:

SUMMARY OF INVENTORY

September 30,

Finished goods

Raw materials and packaging

Raw materials and packaging components

Inventory reserve

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previously paid.

As of June 30, 2024 and December 31, 2023, the Company has approximately $ 116 thousand and $ 486 thousand, respectively,

As of September 30, 2024 and December 31, 2023, the Company has approximately $ 137 thousand and $ 486 thousand, respectively,

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

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of the product deposit.

As of June 30, 2024, the Company approximates its implicit purchase commitments to be $ 397 thousand, of which

As of September 30, 2024, the Company approximates its implicit purchase commitments to be $ 1.1 million, of which

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

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

As of June 30, 2024 and December

31, 2023, the Company capitalized a net amount of $ 12.6 million and $ 11.8 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.

As of September 30, 2024 and

December 31, 2023, the Company capitalized a net amount of $ 13.5 million and $ 11.8 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.

assets are comprised of:

(1) the ResumeBuild brand, (2) a customer relationship asset, (3) the Cleared trade name, (4) Cleared developed

technology, (5) a purchased license and (6) three purchased domain names.

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.

technology, (5) a purchased license and (6) four purchased domain names.

Intangible assets are amortized over their estimated lives using

the straight-line method.

Costs incurred to renew or extend the term of recognized intangible assets are capitalized and amortized over

the useful life of the asset.

of Long-Lived Assets

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

As of June 30, 2024

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

its long-lived assets.

As of September

30, 2024 and December 31, 2023, 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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SCHEDULE OF POTENTIALLY DILUTIVE SECURITIES

Months Ended June 30,

Series B Preferred

Three Months Ended September 30,

Nine Months Ended September 30,

Series B Preferred Stock

RSUs and RSAs

Stock options

long-term debt

dilutive securities

Convertible long-term debt

Potentially dilutive securities

portfolio of brands are included within two operating segments:

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or liabilities, are as follows:

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

Inputs that are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement

Inputs (other than quoted prices included in Level 1) that are either directly or indirectly observable for the asset or liability

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current manufacturers or pharmacies cease to perform adequately.

As of June 30, 2024, we utilized four (4) suppliers for fulfillment

services, ten (10) suppliers for manufacturing finished goods, seven (7) suppliers for packaging, bottling, and labeling, and seven (7)

As of September 30, 2024, we utilized four (4) suppliers for fulfillment

services, fifteen (15) suppliers for manufacturing finished goods, eight (8) suppliers for packaging, bottling, and labeling, and eight

(8) suppliers for prescription medications.

As of December 31, 2023, we utilized three (3) suppliers for fulfillment services, nine (9) suppliers

for manufacturing finished goods, seven (7) suppliers for packaging, bottling, and labeling, and five (5) suppliers for prescription

As of December 31, 2023, we utilized three (3) suppliers for fulfillment services, nine (9)

suppliers for manufacturing finished goods, seven (7) suppliers for packaging, bottling, and labeling, and five (5) suppliers for prescription

Accounting Pronouncements

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two-year anniversary of the closing of the Acquisition.

As of June 30, 2024, WorkSimpli has paid the Seller $ 500 thousand in accordance

As of September 30, 2024, WorkSimpli has paid the Seller $ 500 thousand in accordance

with the ResumeBuild APA.

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4 – INTANGIBLE ASSETS

of June 30, 2024 and December 31, 2023, the Company has the following amounts related to amortizable intangible assets:

of September 30, 2024 and December 31, 2023, the Company has the following amounts related to amortizable intangible assets:

OF INTANGIBLE ASSETS

Intangible Assets:

relationship asset

developed technology

September 30,

Amortizable Intangible Assets:

ResumeBuild brand

Customer relationship asset

Cleared trade name

Cleared developed technology

Purchased licenses

Website domain names

intangible assets

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( 3,015,435 )

intangible assets, net

aggregate amortization expense of the Company’s intangible assets for both the three months ended June 30, 2024 and 2023 was $ 246

The aggregate amortization expense of the Company’s intangible assets for the six months ended June 30, 2024 and 2023

was $ 492 thousand and $ 480 thousand, respectively.

Total amortization expense for the remainder of 2024 is approximately $ 491 thousand,

$ 977 thousand for 2025, $ 939 thousand for 2026, and approximately $ 113 thousand for 2027.

Total intangible assets, net

aggregate amortization expense of the Company’s intangible assets for both the three months ended September 30, 2024 and 2023 was

$ 246 thousand.

The aggregate amortization expense of the Company’s intangible assets for the nine months ended September 30, 2024

and 2023 was $ 738 thousand and $ 726 thousand, respectively.

Total amortization expense for the remainder of 2024 is approximately $ 245

thousand, $ 978 thousand for 2025, $ 940 thousand for 2026, and approximately $ 113 thousand for 2027.

5 – ACCRUED EXPENSES

of June 30, 2024 and December 31, 2023, the Company has the following amounts related to accrued expenses:

of September 30, 2024 and December 31, 2023, the Company has the following amounts related to accrued expenses:

OF ACCRUED EXPENSES

Accrued selling

and marketing expenses

September 30,

Accrued selling and marketing expenses

Accrued compensation

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Other accrued expenses

accrued expenses

Total accrued expenses

6 – NOTES PAYABLE

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include interest in the amount of $ 62 thousand.

As of June 30, 2024 and December 31, 2023, the outstanding balance was $ 0 and $ 111 thousand,

respectively, and is included in notes payable, net, on the accompanying unaudited condensed consolidated balance sheet.

As of September 30, 2024 and December 31, 2023, the outstanding balance was $ 0 and $ 111

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

January and February 2023, the Company received proceeds of $ 2 million under a $ 2.5 million loan facility with CRG Financial, maturing

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repayment of the CRG Financial loan due to a prepayment penalty and various fees.

As of both June 30, 2024 and December 31, 2023, the

outstanding balance was $ 0 related to the CRG Financial loan.

As of both September 30, 2024 and December 31, 2023,

the outstanding balance was $ 0 related to the CRG Financial loan.

the year ended December 31, 2023, the Company financed a $ 348 thousand prepaid insurance policy under a 10-month financing agreement

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The terms of the agreement include finance fees in the amount of $ 13 thousand.

As of June 30, 2024 and December 31, 2023, the outstanding balance was $ 13 thousand and $ 217 thousand, respectively, and is included

in notes payable, net, on the accompanying consolidated balance sheet.

interest expense on notes payable amounted to $ 2

thousand and $ 13

thousand for the three months ended June 30, 2024 and 2023, respectively.

Total interest expense on notes payable amounted to $ 7

thousand and $ 34

thousand for the six months ended June 30, 2024 and 2023, respectively.

As of September 30, 2024 and December 31, 2023, the outstanding balance was $ 0 and $ 217 thousand, respectively, and is included in notes

payable, net, on the accompanying consolidated balance sheet.

interest expense on notes payable amounted to $ 0 and $ 216 thousand for the three months ended September 30, 2024 and 2023, respectively.

Total interest expense on notes payable amounted to $ 7 thousand and $ 250 thousand for the nine months ended September 30, 2024 and 2023,

respectively.

7 – LONG-TERM DEBT

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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

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

on the unaudited condensed consolidated balance sheet as of June 30, 2024.

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 $1.4 million will be amortized over a forty-two-month

Total amortization of debt discount was $ 100 thousand and $ 115 thousand for the three months ended June 30, 2024 and 2023, respectively,

and $ 201 thousand and $ 154 thousand for the six months ended June 30, 2024 and 2023, respectively.

The Company received gross proceeds

of $ 15.0 million at closing (net proceeds of $ 12.3 million after repayment of the $ 2 million outstanding CRG loan balance and various

As of September 30, 2024, there is $ 1 million in term loans remaining to be converted.

The relative fair value of the Avenue Warrants

was recorded to debt discount and is included as a reduction to long-term debt on the unaudited condensed consolidated balance sheet

as of September 30, 2024.

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 $1.4 million will be amortized over a forty-two-month period.

Total amortization of debt discount

was $ 100 thousand and $ 80 thousand for the three months ended September 30, 2024 and 2023, respectively, and $ 301 thousand and $ 234 thousand

for the nine months ended September 30, 2024 and 2023, respectively.

The Company received gross proceeds of $ 15.0 million at closing

(net proceeds of $ 12.3 million after repayment of the $ 2 million outstanding CRG loan balance and various fees).

Avenue Facility matures on October 1, 2026 and interest is based on the greater of:

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plus 4.75% and (2) 12.5%.

As of June 30, 2024, the interest rate was 13.25%.

Payments are interest only until November 2024.

may prepay the loans, subject to a prepayment penalty of 1.00 % to 3.00 % of the principal amount prepaid, depending on the timing of the

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.

of June 30, 2024, the Company expects to pay $ 1.6 million in 2024, $ 9.5 million in 2025 and $ 7.9 million in 2026 in principal payments

under the Avenue Facility.

As of September 30, 2024, the interest rate was 13.25%.

As of September 30, 2024, interest only payments were

extended until May 2025.

The Company may prepay the loans, subject to a prepayment penalty of 1.00 % to 3.00 % of the principal amount

prepaid, depending on the timing of the prepayment.

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.

of September 30, 2024, the Company will pay $ 8.4 million in 2025 and $ 10.6 million in 2026 in principal payments under the Avenue Facility.

Company is subject to certain affirmative and negative covenants under the Avenue Facility, including the requirement, beginning on the

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provided by the Avenue Credit Agreement, of at least $ 2 million.

As of June 30, 2024, there was $ 19 million outstanding under the Avenue

Facility and the Company was in compliance with the Avenue Facility covenants.

As of September 30, 2024, there was $ 19 million outstanding under the

Avenue Facility and the Company was in compliance with the Avenue Facility covenants.

interest expense on long-term debt, inclusive of amortization of debt discounts, amounted to $ 681 thousand and $ 594 thousand for the

three months ended June 30, 2024 and 2023, respectively.

Total interest expense on long-term debt, inclusive of amortization of debt

discounts, amounted to $ 1.4 million and $ 694 thousand for the six months ended June 30, 2024 and 2023, respectively.

three months ended September 30, 2024 and 2023, respectively.

Total interest expense on long-term debt, inclusive of amortization of

debt discounts, amounted to $ 2.0 million and $ 1.3 million for the nine months ended September 30, 2024 and 2023, respectively.

8 – STOCKHOLDERS’ EQUITY

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Preferred Stock and 3,385,000 shares of preferred stock remain undesignated.

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

On June 7, 2024, the Company filed the 2024 Shelf.

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,

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

7, 2024, the Company filed the 2024 Shelf.

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 September 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.

the six months ended June 30, 2024, the Company issued an aggregate of 512,777 shares of common stock related to the cashless exercise

the six months ended June 30, 2024, the Company issued an aggregate of 1,630,458 shares of common stock related to the cashless exercise

the six months ended June 30, 2024, the Company issued an aggregate of 76,250 shares of common stock related to the exercise of options

for total proceeds of approximately $ 107 thousand.

Stock Transactions During the Six Months Ended June 30, 2024

the six months ended June 30, 2024, the Company issued an aggregate of 1,085,625 shares of common stock for service, including vested

restricted stock.

the nine months ended September 30, 2024, the Company issued an aggregate of 512,777 shares of common stock related to the cashless exercise

the nine months ended September 30, 2024, the Company issued an aggregate of 1,630,458 shares of common stock related to the cashless

exercise of warrants.

the nine months ended September 30, 2024, the Company issued an aggregate of 76,250 shares of common stock related to the exercise of

options for total proceeds of approximately $ 107 thousand.

Stock Transactions During the Nine Months Ended September 30, 2024

the nine months ended September 30, 2024, the Company issued an aggregate of 1,235,625 shares of common stock for service, including

vested restricted stock.

February 4, 2023, the Company entered into the Cleared First Amendment between the Company and the sellers of Cleared.

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Noncontrolling

income attributed to the non-controlling interest amounted to $ 39 thousand and $ 842 thousand for the three months ended June 30, 2024

and 2023, respectively.

During both the three months ended June 30, 2024 and 2023, the Company paid distributions to non-controlling

shareholders of $ 36 thousand.

Net income attributed to the non-controlling interest amounted to $ 158 thousand and $ 1.4 million for the

six months ended June 30, 2024 and 2023, respectively.

During both the six months ended June 30, 2024 and 2023, the Company paid distributions

to non-controlling shareholders of $ 72 thousand.

loss attributed to the non-controlling interest amounted to $ 346 thousand for the three months ended September 30, 2024 compared to net

income of $ 839 thousand for the three months ended September 30, 2023.

During both the three months ended September 30, 2024 and 2023,

the Company paid distributions to non-controlling shareholders of $ 36 thousand.

Net loss attributed to the non-controlling interest amounted

to $ 188 thousand for the nine months ended September 30, 2024 compared to net income of $ 2.2 million for the nine

months ended September 30, 2023.

During both the nine months ended September 30,

2024 and 2023, the Company paid distributions to non-controlling shareholders of $ 108 thousand.

Software Capitalization Update

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of record as of June 30, 2024 and was paid on July 1, 2024 .

The total dividends declared to noncontrolling interest holders was $ 228

thousand for the three months ended June 30, 2024 and $ 495 thousand for the six months ended June 30, 2024, and is included in the Company’s

results of operations for the three and six months ended June 30, 2024.

On June 30, 2023, WorkSimpli declared a cash dividend in the

amount of $ 22.40 per membership interest unit to all unit holders of record as of June 30, 2023 and was paid on July 3, 2023 .

dividend declared to noncontrolling interest holders was $ 534 thousand for the three and six months ended June 30, 2023 and is included

in the Company’s results of operations for the three and six months ended June 30, 2023.

The total dividends declared to noncontrolling interest holders was $ 0 and

$ 495 thousand for the three and nine months ended September 30, 2024, respectively, and is included in general and administrative expenses for the three and nine months ended September 30, 2024.

On June 30, 2023, WorkSimpli declared a cash dividend in the amount

of $ 22.40 per membership interest unit to all unit holders of record as of June 30, 2023 and was paid on July 3, 2023 .

On July 31, 2023,

WorkSimpli declared a cash dividend in the amount of $ 11.20 per membership interest unit to all unit holders of record as of July 28,

2023 and was paid on August 1, 2023.

On August 31, 2023, WorkSimpli declared a cash dividend in the amount of $ 16.80 per membership interest

unit to all unit holders of record as of August 30, 2023 and was paid on September 1, 2023.

On September 30, 2023, WorkSimpli declared

a cash dividend in the amount of $ 14.00 per membership interest unit to all unit holders of record as of September 30, 2023 and was paid

on October 5, 2023.

The total dividends declared to noncontrolling interest holders was $ 1.0 million and $ 1.5 million for the three and

nine months ended September 30, 2023, respectively, and is included in general and administrative expenses for the three and nine

months ended September 30, 2023.

Company pays cumulative dividends on its Series A Preferred Stock, in the amount of $ 2.21875 per share each year, which is equivalent

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Dividends declared and paid on the Series A Preferred Stock

during the six months ended June 30, 2024 are as follows:

(1) quarterly dividend declared on March 26, 2024 to holders of record as of

April 5, 2024, which was paid on April 15, 2024, and (2) quarterly dividend declared on June 25, 2024 to holders of record as of July

5, 2024 which was paid on July 15, 2024.

Dividends declared and paid on the Series A Preferred Stock during the six months ended June

30, 2023 are as follows:

(1) quarterly dividend declared on March 28, 2023 to holders of record as of April 7, 2023 and was paid on April

17, 2023 and (2) quarterly dividend declared on June 27, 2023 to holders of record as of July 7, 2023 and was paid on July 17, 2023.

The dividends are included in the Company’s results of operations for the three and six months ended June 30, 2024 and 2023.

Stock Options

during the nine months ended September 30, 2024 are as follows:

(1) quarterly dividend declared on March 26, 2024 to holders of record

as of April 5, 2024, which was paid on April 15, 2024, (2) quarterly dividend declared on June 25, 2024 to holders of record as of July

5, 2024 which was paid on July 15, 2024, and (3) quarterly dividend declared on September 24, 2024 to holders of record as of October

4, 2024 which was paid on October 15, 2024.

Dividends declared and paid on the Series A Preferred Stock during the nine months ended

September 30, 2023 are as follows:

(1) quarterly dividend declared on March 28, 2023 to holders of record as of April 7, 2023 and was

paid on April 17, 2023, (2) quarterly dividend declared on June 27, 2023 to holders of record as of July 7, 2023 and was paid on July

17, 2023 and (3) quarterly dividend declared on September 26, 2023 to holders of record as of October 6, 2023 and was paid on October

The dividends are included in the Company’s results of operations for the three and nine months ended September 30, 2024

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

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the maximum number of shares of the Company’s common stock available for issuance under the Amended 2020 Plan by 3,000,000 shares.

of June 30, 2024, the Amended 2020 Plan provided for the issuance of up to 8,100,000 shares of Common Stock.

of September 30, 2024, the Amended 2020 Plan provided for the issuance of up to 8,100,000 shares of Common Stock.

Remaining authorization

under the Amended 2020 Plan was 3,133,111 shares as of June 30, 2024.

under the Amended 2020 Plan was 2,753,276 shares as of September 30, 2024.

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

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The following

is a summary of outstanding options activity under our Amended 2020 Plan for the six months ended June 30, 2024:

is a summary of outstanding options activity under our Amended 2020 Plan for the nine months ended September 30, 2024:

OF OPTION ACTIVITY

Exercise Price

Balance, December 31, 2023

Balance at June 30, 2024

Balance at September 30, 2024

Exercisable at December 31, 2023

Exercisable at June 30, 2024

compensation expense under the Amended 2020 Plan options above was $ 397 thousand and $ 1.2 million for the three months ended June 30,

2024 and 2023, respectively, with unamortized expense remaining of $ 169 thousand as of June 30, 2024.

Total compensation expense under

the Amended 2020 Plan options above was $ 1.1 million and $ 2.3 million for the six months ended June 30, 2024 and 2023, respectively.

During the six months ended June 30, 2024, 172,222 options were exercised on a cashless basis, which resulted in 62,781 shares issued.

As of June 30, 2024, aggregate intrinsic value of vested service-based options outstanding was $ 475 thousand.

Exercisable at September 30, 2024

compensation expense under the Amended 2020 Plan options above was $ 109 thousand and $ 1.2 million for the three months ended September

30, 2024 and 2023, respectively, with unamortized expense remaining of $ 59 thousand as of September 30, 2024.

Total compensation expense

under the Amended 2020 Plan options above was $ 1.2 million and $ 3.5 million for the nine months ended September 30, 2024 and 2023, respectively.

During the nine months ended September 30, 2024, 172,222 options were exercised on a cashless basis, which resulted in 62,781 shares

As of September 30, 2024, aggregate intrinsic value of vested service-based options outstanding was $ 237 thousand.

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

the six months ended June 30, 2024:

the nine months ended September 30, 2024:

OF OPTION ACTIVITY

Balance, December 31, 2023

December 31, 2023

Cancelled/Forfeited/Expired

Balance at June 30, 2024

Exercisable December 31, 2023

Exercisable at June 30, 2024

compensation expense under the above service-based option plan was $ 49 thousand and $ 505 thousand for the three months ended June 30,

2024 and 2023, respectively, with unamortized expense remaining of $ 50 thousand as of June 30, 2024.

Total compensation expense under

the above service-based option plan was $ 241 thousand and $ 1.1 million for the six months ended June 30, 2024 and 2023, respectively.

As of June 30, 2024, aggregate intrinsic value of vested service-based options outstanding was $ 2.6 million.

at September 30, 2024

December 31, 2023

at September 30, 2024

compensation expense under the above service-based option plan was $ 25 thousand and $ 367 thousand for the three months ended September

30, 2024 and 2023, respectively, with unamortized expense remaining of $ 25 thousand as of September 30, 2024.

Total compensation expense

under the above service-based option plan was $ 266 thousand and $ 1.5 million for the nine months ended September 30, 2024 and 2023, respectively.

As of September 30, 2024, aggregate intrinsic value of vested service-based options outstanding was $ 1.4 million.

Of the total service-based

options exercised during the six months ended June 30, 2024, 170,750 options were exercised on a cashless basis, which resulted in 134,302

shares issued and 51,250 options were exercised for cash.

following is a summary of outstanding performance-based options activity for the six months ended June 30, 2024:

options exercised during the nine months ended September 30, 2024, 170,750 options were exercised on a cashless basis, which resulted

in 134,302 shares issued and 51,250 options were exercised for cash.

following is a summary of outstanding performance-based options activity for the nine months ended September 30, 2024:

OF OPTION ACTIVITY

Exercise Price

Balance at December 31, 2023

Balance at June 30, 2024

Balance at September 30, 2024

Exercisable December 31, 2023

Exercisable at June 30, 2024

compensation expense was recognized on the performance-based options above for the three and six months ended June 30, 2024, as the performance

terms have not been met or are not probable.

As of June 30, 2024, aggregate intrinsic value of vested performance options outstanding

was $ 120 thousand.

Of the total performance-based options exercised during the six months ended June 30, 2024, 370,000 options were exercised

on a cashless basis, which resulted in 315,694 shares issued and 25,000 options were exercised for cash.

Exercisable at September 30, 2024

compensation expense was recognized on the performance-based options above for the three and nine months ended September 30, 2024, as

the performance terms have not been met or are not probable.

As of September 30, 2024, the aggregate intrinsic value of vested performance

options outstanding was $ 80 thousand.

Of the total performance-based options exercised during the nine months ended September 30, 2024,

370,000 options were exercised on a cashless basis, which resulted in 315,694 shares issued and 25,000 options were exercised for cash.

and RSAs (under our Amended 2020 Plan)

following is a summary of outstanding RSUs and RSAs activity under our Amended 2020 Plan for the six months ended June 30, 2024:

following is a summary of outstanding RSUs and RSAs activity under our Amended 2020 Plan for the nine months ended September 30, 2024:

OF RESTRICTED STOCK UNIT ACTIVITY

RSU Outstanding

Number of Shares

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Cancelled/Forfeited

Balance at June 30, 2024

Balance at September 30, 2024

total fair value of the 908,335 RSUs and RSAs granted was $ 6.9 million which was determined using the fair value of the quoted market

price on the date of grant.

Total compensation expense under the Amended 2020 Plan RSUs and RSAs above was $ 3.5 million and $ 894 thousand

for the three months ended June 30, 2024 and 2023, respectively, with unamortized expense remaining of $ 4.5 million as of June 30, 2024.

Total compensation expense under the Amended 2020 Plan RSUs and RSAs above was $ 4.9 million and $ 1.4 million for the six months ended

June 30, 2024 and 2023, respectively.

During the six months ended June 30, 2024, 1,107,875 RSUs and RSAs vested, of which 960,625 shares

Total compensation expense under the Amended 2020 Plan RSUs and RSAs above was $ 2.1 million and $ 1.6 million

for the three months ended September 30, 2024 and 2023, respectively, with unamortized expense remaining of $ 4.1 million as of September

Total compensation expense under the Amended 2020 Plan RSUs and RSAs above was $ 6.9 million and $ 3.1 million for the nine months

ended September 30, 2024 and 2023, respectively.

During the nine months ended September 30, 2024, 1,285,210 RSUs and RSAs vested, of

which 1,110,625 shares were issued.

and RSAs (outside of our Amended 2020 Plan)

following is a summary of outstanding RSUs and RSAs activity (outside of our Amended 2020 Plan) for the six months ended June 30, 2024:

following is a summary of outstanding RSUs and RSAs activity (outside of our Amended 2020 Plan) for the nine months ended September 30,

OF RESTRICTED STOCK UNIT ACTIVITY

RSU Outstanding

Number of Shares

Balance at December 31, 2023

Balance at June 30, 2024

Balance at September 30, 2024

compensation expense for RSUs and RSAs outside of the Amended 2020 Plan was $ 202 thousand and $ 139 thousand for the three months ended

June 30, 2024 and 2023, respectively, with unamortized expense remaining of $ 300 thousand as of June 30, 2024.

Total compensation expense

for RSUs and RSAs outside of the Amended 2020 Plan was $ 510 thousand and $ 589 thousand for the six months ended June 30, 2024 and 2023,

respectively.

During the six months ended June 30, 2024, 125,000 RSUs and RSAs vested, of which 125,000 shares were issued.

following is a summary of outstanding and exercisable warrants activity during the six months ended June 30, 2024:

September 30, 2024 and 2023, respectively, with unamortized expense remaining of $ 97 thousand as of September 30, 2024.

Total compensation

expense for RSUs and RSAs outside of the Amended 2020 Plan was $ 712 thousand and $ 728 thousand for the nine months ended September 30,

2024 and 2023, respectively.

During the nine months ended September 30, 2024, 187,500 RSUs and RSAs vested, of which 125,000 shares were

following is a summary of outstanding and exercisable warrants activity during the nine months ended September 30, 2024:

OF WARRANT OUTSTANDING AND EXERCISABLE

Exercise Price

Balance at December 31, 2023

( 2,986,877 )

Balance at June 30, 2024

Balance at September 30, 2024

Exercisable December 31, 2023

Exercisable June 30, 2024

compensation expense on the above warrants was $ 0 and $ 6 thousand for the three months ended June 30, 2024 and 2023, respectively, with

no unamortized expense remaining as of June 30, 2024.

Total compensation expense on the above warrants was $ 0 and $ 18 thousand for the

six months ended June 30, 2024 and 2023, respectively.

Exercisable September 30, 2024

compensation expense on the above warrants was $ 0 thousand for both the three months ended September 30, 2024 and 2023, with no unamortized

expense remaining as of September 30, 2024.

Total compensation expense on the above warrants was $ 0 and $ 18 thousand for the nine months

ended September 30, 2024 and 2023, respectively.

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

options, warrants, RSUs, and RSAs amounted to approximately $ 4.2 million and $ 2.9 million for the three months ended June 30, 2024 and

2023, respectively.

options, warrants, RSUs, and RSAs amounted to approximately $ 2.4 million and $ 3.3 million for the three months ended September 30, 2024

and 2023, 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, and RSAs amounted to $ 6.7 million and $ 5.5 million for the six months ended June

performance-based stock options, warrants and RSUs, and RSAs amounted to $ 9.1 million and $ 8.8 million for the nine months ended September

30, 2024 and 2023, respectively.

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Unamortized expense remaining related to service-based stock options, performance-based stock options, warrants,

RSUs, and RSAs was $ 5 million as of June 30, 2024, which is expected to be recognized through 2026.

RSUs, and RSAs was $ 4.3 million as of September 30, 2024, which is expected to be recognized through 2026.

Company leases office space domestically under operating leases including:

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for which the lease expires in 2028, (2) a marketing and sales center in Huntington Beach, California for which the lease expires in

2024, (3) a patient care center in Greenville, South Carolina for which the lease expires in 2024, (4) warehouse and fulfillment centers

in Columbia, Pennsylvania and Lancaster, Pennsylvania for which the leases expire in 2024 and (5) a warehouse and pharmacy operations

center in Lancaster, Pennsylvania for which the lease expires in 2029, with an additional five year option to extend, for which the Company

expects to utilize.

WorkSimpli leases two office spaces in Puerto Rico for which the leases expire in 2024.

following is a summary of the Company’s operating right-of-use assets and operating lease liabilities as of June 30, 2024:

2027, (3) a patient care center in Greenville, South Carolina for which the lease expires in 2031, with an additional five year option

to extend, for which the Company expects to utilize, (4) warehouse and fulfillment centers in Columbia, Pennsylvania and Lancaster, Pennsylvania

for which the leases expired in 2024 and (5) a warehouse and pharmacy operations center in Lancaster, Pennsylvania for which the lease

expires in 2029, with an additional five year option to extend, for which the Company expects to utilize.

WorkSimpli leases two office

spaces in Puerto Rico for which the leases expire in 2026.

following is a summary of the Company’s operating right-of-use assets and operating lease liabilities as of September 30, 2024:

OF OPERATING RIGHT OF USE OF ASSETS

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Operating lease liabilities

accumulated amortization of the Company’s operating right-of-use assets was $ 2.5 million and $ 1.7 million as of June 30, 2024 and

2023, respectively.

accumulated amortization of the Company’s operating right-of-use assets was $ 2.7 million and $ 1.9 million as of September 30, 2024

and 2023, respectively.

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

liabilities recognized on the unaudited condensed consolidated balance sheet as of June 30, 2024:

liabilities recognized on the unaudited condensed consolidated balance sheet as of September 30, 2024:

OF MATURITY OF OPERATING LEASE LIABILITIES

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( 4,360,125 )

Present value of operating

lease liabilities

lease expenses were $ 232 thousand and $ 206 thousand for the three months ended June 30, 2024 and 2023, respectively, and $ 458 thousand

and $ 429 thousand for the six months ended June 30, 2024 and 2023, respectively, and were included in other operating expenses in our

unaudited condensed consolidated statement of operations.

Present value of operating lease liabilities

lease expenses were $ 289 thousand and $ 214 thousand for the three months ended September 30, 2024 and 2023, respectively, and $ 747 thousand

and $ 643 thousand for the nine months ended 30, 2024 and 2023, 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:

OF CASH FLOW INFORMATION RELATED TO OPERATING LEASE LIABILITIES

Cash paid for

operating lease liabilities

September 30,

Cash paid for operating lease liabilities

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

Weighted average

remaining lease term in years

September 30, 2024

December 31, 2023

Weighted average remaining lease term in years

Weighted average discount rate

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

As of June 30, 2024 and December

31, 2023, $ 0 and approximately $ 5 thousand, respectively, were included in accrued expenses in regard to this agreement.

paid Pilaris $ 5 thousand and $ 138 thousand during the six months ended June 30, 2024 and 2023, respectively, in regard to this agreement.

As of September 30, 2024

and December 31, 2023, $ 0 and approximately $ 5 thousand, respectively, were included in accrued expenses in regard to this agreement.

The Company paid Pilaris $ 5 thousand and $ 138 thousand during the nine months ended September 30, 2024 and 2023, respectively, in regard

to this agreement.

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

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

were earned or owed as of June 30, 2024.

were earned or owed as of September 30, 2024.

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

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

As of June 30, 2024, the Company approximates its

implicit purchase commitments to be $ 397 thousand.

As of September 30, 2024, the Company approximates

its implicit purchase commitments to be $ 1.1 million.

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

As of June 30, 2024, other than as

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

As of September 30, 2024, other than

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

effect on the Company’s consolidated financial position.

1 unchanged sentence

LifeMD, Inc., Case No.

23-cv-07469, was

filed in the United States District Court for the Southern District of New York (the “Marden Complaint”) against

the Company’s RexMD brand.

The Marden Complaint alleges, inter alia , unauthorized disclosure of certain information

of class members to third parties.

23-cv-07469, was filed

in the United States District Court for the Southern District of New York (the “Marden Complaint”) against the Company’s

The Marden Complaint alleges, inter alia , unauthorized disclosure of certain information of class members to third

On November 21, 2023, the plaintiffs amended the Marden Complaint.

On March 4, 2024, the Company moved

to dismiss the Marden Complaint, and that motion is pending.

On March 4, 2024, the Company moved to dismiss the Marden

Complaint, and that motion is pending.

On July 12, 2024, the parties attended a mediation.

of legal proceedings are inherently uncertain, and the best estimate of cost is reflected in the Company’s financial

The results of legal proceedings are inherently

uncertain, and the best estimate of cost is reflected in the Company’s financial results.

September 5, 2023, the Internal Revenue Service (the “IRS”) issued a notice of deficiency to the Company in which the IRS

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

As of both June 30, 2024 and December 31, 2023, the outstanding balance was $ 0 related

to the CRG Financial loan.

As of both September 30, 2024 and December 31, 2023, the outstanding balance was $ 0

related to the CRG Financial loan.

Bhatia, a member of the Board of the Company, is a 3% owner and also serves on the Board of Directors

of CRG Financial.

the six months ended June 30, 2024 and 2023, the Company utilized CloudBoson Technologies Pvt.

(“CloudBoson”), formerly

LegalSubmit Pvt.

(“LegalSubmit”), a company owned by WorkSimpli’s Chief Software Engineer, to provide software

development services.

The Company paid CloudBoson a total of $ 803 thousand and $ 570 thousand during the three months ended June 30, 2024

and 2023, respectively, and $ 1.9 million and $ 1.2 million during the six months ended June 30, 2024 and 2023, respectively, for these

The Company owed CloudBoson $ 56 thousand as of June 30, 2024 and $ 226 thousand as of December 31, 2023.

the six months ended June 30, 2024 and 2023, the Company utilized King & Spalding LLP (“King & Spalding”), a large

international law firm, for which one of the Company’s Board of Directors’ immediate family members is the Company’s

relationship partner, to provide legal services.

The Company paid King & Spalding a total of $ 135 thousand and $ 0 during the three

months ended June 30, 2024 and 2023, respectively, and $ 452 thousand and $ 0 during the six months ended June 30, 2024 and 2023, respectively,

the nine months ended September 30, 2024 and 2023, the Company utilized CloudBoson Technologies Pvt.

(“CloudBoson”),

formerly LegalSubmit Pvt.

(“LegalSubmit”), a company owned by WorkSimpli’s Chief Software Engineer, to provide

software development services.

The Company paid CloudBoson a total of $ 838 thousand and $ 611 thousand during the three months ended September

30, 2024 and 2023, respectively, and $ 2.7 million and $ 1.8 million during the nine months ended September 30, 2024 and 2023, respectively,

for these services.

The Company owed King & Spalding $ 92 thousand as of June 30, 2024 and $ 48 thousand as of December 31, 2023.

The Company owed CloudBoson $ 50 thousand as of September 30, 2024 and $ 226 thousand as of December 31, 2023.

the nine months ended September 30, 2024 and 2023, the Company utilized King & Spalding LLP (“King & Spalding”),

a large international law firm, for which one of the Company’s Board of Directors’ immediate family members is the Company’s

relationship partner, to provide legal services.

The Company paid King & Spalding a total of approximately $ 140 thousand and $ 0 during

the three months ended September 30, 2024 and 2023, respectively, and $ 591 thousand and $ 0 during the nine months ended September 30,

2024 and 2023, respectively, for these services.

The Company owed King & Spalding $ 98 thousand as of September 30, 2024 and $ 48 thousand

as of December 31, 2023.

Consulting Agreements

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shares of the Company’s common stock, which will vest in quarterly installments from August 30, 2023 through November 30, 2024.

The Company issued 125,000 restricted shares of common stock related to this agreement during the six months ended June 30, 2024.

June 14, 2023, Robert Jindal, a member of the Board of the Company, entered into a consulting services agreement with the Company, pursuant

Jindal provides certain investor relations and strategic business development services, in consideration for 225,000 restricted

shares of the Company’s common stock, which will vest in six-month installments from June 14, 2023 through December 31, 2024.

The Company issued 125,000 restricted shares of common stock related to this agreement during the nine months ended September 30, 2024.

June 14, 2023, Robert Jindal, a member of the Board of the Company, entered into a consulting services agreement (the “Jindal Consulting

Agreement”) with the Company, pursuant to which Mr.

Jindal provides certain investor relations and strategic business development

services, in consideration for 225,000 restricted shares of the Company’s common stock, which will vest in six-month installments

from June 14, 2023 through December 31, 2024.

On July 17, 2024, Mr.

Jindal entered into the First Amendment to the Jindal Consulting

Services Agreement with the Company (the “Jindal First Amendment”), pursuant to which the Company shall issue 24,835 restricted

shares of the Company’s common stock, all of which vested on September 14, 2024.

June 14, 2023, Naveen Bhatia, a member of the Board of the Company, entered into a consulting services agreement with the Company, pursuant

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

Relevant segment data for the three and six months

ended June 30, 2024 and 2023 is as follows:

Relevant segment data for the three and nine months

ended September 30, 2024 and 2023 is as follows:

SCHEDULE OF RELEVANT SEGMENT DATA

Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

$ 108,549,257

Operating loss

$ ( 3,624,659 )

2 unchanged sentences

$ ( 20,859,582 )

Operating (loss) income

$ ( 1,061,453 )

1 unchanged sentence

$ 148,199,266

$ 107,687,158

Operating loss

$ ( 4,686,112 )

$ ( 4,569,381 )

$ ( 17,162,923 )

$ ( 12,317,737 )

income (loss)

3 unchanged sentences

$ ( 12,317,737 )

segment data as of June 30, 2024 and December 31, 2023 is as follows:

segment data as of September 30, 2024 and December 31, 2023 is as follows:

September 30, 2024

December 31, 2023

13 – SUBSEQUENT EVENTS

Issued for Service

July 2024, the Company issued 100,000 shares of common stock related to vested restricted stock with a total fair value of $ 672 thousand.

October 2024, the Company issued 318,085 shares of common stock related to vested restricted stock with a total fair value of $ 950 thousand.

Option Exercise

In October 2024, the Company issued an aggregate of 10,000 shares of common

stock related to the exercise of options for total proceeds of approximately $ 13 thousand.

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