What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-11-17 compared with 2025-08-05 · 261 added, 250 removed, 324 unchanged (61% of the section changed)

97 unchanged sentences

Part B beneficiaries in 26 states, the Company expects to expand access to medically necessary services for more than 60 million Medicare

beneficiaries nationwide, with access to qualifying services across 49 states anticipated by the end of the second quarter of 2025.

telehealth revenue increased 48% for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024.

Total revenue

from recurring subscriptions is approximately 94%.

In addition to our telehealth business, we own 73.3% of WorkSimpli, which operates

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

WorkSimpli revenue from recurring

subscriptions is 100%.

beneficiaries nationwide, with access to qualifying services across 49 states.

telehealth revenue increased 34% for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024.

Total revenue from recurring subscriptions is approximately 95%.

In addition to our telehealth business, we owned 73.3% of WorkSimpli,

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

WorkSimpli revenue

from recurring subscriptions is 100%.

Platform and Business Strategy

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in their respective treatment verticals of virtual primary care and men’s health.

is a telehealth brand that offers access to virtual primary care and telehealth services, offering comprehensive healthcare solutions

across more than 200 conditions.

This brand provides patients with access to affiliated high-quality providers for their urgent care

and chronic care needs.

LifeMD’s offering is a mobile-first full-service destination that provides seamless access to comprehensive

virtual medical care including on-demand consultations and treatment, prescription medications, diagnostics and imaging, wellness

coaching, integration with in-home tools and more.

This offering is also supported by partnerships that provide our patients with

benefits such as substantial discounts on lab work and a prescription discount card.

LifeMD has served over 316,000 customers and

patients to date.

is a telehealth brand that offers access to virtual primary care and telehealth services,

offering comprehensive healthcare solutions across more than 200 conditions.

This brand provides

patients with access to affiliated high-quality providers for their urgent care and chronic

LifeMD’s offering is a mobile-first full-service destination that provides

seamless access to comprehensive virtual medical care including on-demand consultations and

treatment, prescription medications, diagnostics and imaging, wellness coaching, integration

with in-home tools and more.

This offering is also supported by partnerships that provide

our patients with benefits such as substantial discounts on lab work and a prescription discount

LifeMD has served over 596,000 customers and patients to date.

April 2023, we launched our rapidly growing GLP-1 Weight Management Program providing primary care, metabolic coaching, lab work

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Since inception,

our Weight Management Program has grown exponentially to approximately 84,000 patient subscribers as of June 30, 2025, remaining

our Weight Management Program has grown exponentially to approximately 82,000 patient subscribers as of September 30, 2025, remaining

at the forefront of the rapidly growing GLP-1 weight loss market, with our highly differentiated and comprehensive offering.

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Since Rex MD’s initial launch, it has expanded into additional indications including weight management and testosterone replacement

Rex MD has served approximately 659,000 customers and patients to date.

Rex MD has served more than 668,000 customers and patients to date.

is a legacy brand offering access to virtual medical treatment, prescription medications, patented doctor formulated OTC products,

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ShapiroMD is a leading destination for hair loss treatment across the United States (“U.S.”)

and has served more than 265,000 customers and patients to date.

and has served approximately 261,000 customers and patients to date.

support our telehealth brands, in November 2024 we announced the opening of a state-of-the-art wholly-owned affiliated commercial pharmacy,

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conditions from initial consultation to prescription fulfillment within a single integrated ecosystem.

In September 2025, we expanded

our pharmacy to include advanced non-sterile compounding capabilities for oral and topical medications, so that we could deliver tailored

therapies designed to meet evolving patient needs while improving efficiency and reducing reliance on third-party providers.

Telehealth Partnerships

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to address the unmet needs of healthcare product companies as they relate to digital patient awareness, access to care, adherence, and

the six months ended June 30, 2025, LifeMD executed its integration with LillyDirect’s (“Lilly”) pharmacy provider,

the nine months ended September 30, 2025, LifeMD executed its integration with LillyDirect’s (“Lilly”) pharmacy provider,

Gifthealth, to offer streamlined access of single-dose vials of Lilly’s prescription obesity treatment Zepbound® (tirzepatide)

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LifeMD also announced plans to offer a simplified pathway for cash-pay patients to access all

FDA-approved dose strengths of Wegovy® directly within LifeMD’s virtual care platform.

FDA-approved dose strengths of Wegovy® directly within LifeMD’s virtual care platform and an additional offering through its

collaboration with Novo Nordisk that provides access to Ozempic® for patients with type 2 diabetes.

Owned Subsidiary:

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As a result of a series of restructuring transactions, the

Company’s ownership interest in WorkSimpli is 73.3%.

WorkSimpli had approximately 149,500 active subscriptions as of June 30, 2025.

Company’s ownership interest in WorkSimpli was 73.3%.

WorkSimpli had approximately 141,000 active subscriptions as of September

November 4, 2025, we sold our majority ownership interest in WorkSimpli to Lion Buyer, LLC.

The sale positions the Company as a pure-play

telehealth technology company focused on scaling its virtual care and pharmacy operations.

For a description of the transaction, see

Note 15—Subsequent Events.

of Operations

of the Three Months Ended June 30, 2025 to the Three Months Ended June 30, 2024

financial results for the three months ended June 30, 2025 are summarized as follows in comparison to the three months ended June 30,

June 30, 2025

June 30, 2024

the three months ended September 30, 2025, the Company identified and corrected errors related to the recording of net revenue as agent

in certain arrangements with the Company’s third-party pharmacy providers as well as various

out-of-period amounts included in our previously issued financial statements that were deemed to be quantitatively and qualitatively

immaterial, individually and in the aggregate, to the financial statements in the periods recorded or to the relevant prior periods.

Information presented in the tables below for the three and nine months ended September 30, 2024 has been revised to reflect these corrections.

See Note 3—Revisions to Previously Issued Financial Statements.

of the Three Months Ended September 30, 2025 to the Three Months Ended September 30, 2024

financial results for the three months ended September 30, 2025 are summarized as follows in comparison to the three months ended September

Telehealth revenue, net

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

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Development costs

Total expenses

Operating loss

Interest expense, net

Net income attributable to non-controlling interest

Loss on debt extinguishment

Net loss before income taxes

Income tax expense

income (loss) attributable to non-controlling interest

Net loss attributable to LifeMD, Inc.

Preferred stock dividends

Net loss attributable to LifeMD, Inc.

Net loss attributable

to LifeMD, Inc.

common stockholders

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revenue, net.

Revenues for the three months ended June 30, 2025 were approximately $62.2 million, an increase of 23% compared to approximately

$50.7 million for the three months ended June 30, 2024.

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

Telehealth revenue accounts for 78% of total revenue and has increased during the three months ended June 30, 2025 due to an

increase in telehealth subscription revenue, primarily for LifeMD primary care which experienced an increase of approximately $15.3 million

during the three months ended June 30, 2025 compared to the three months ended June 30, 2024, partially offset by a decline in telehealth

product revenue of approximately $1.1 million during the three months ended June 30, 2025 compared to the three months ended June 30,

2024, primarily due to a reduction in online sales demand.

WorkSimpli revenue accounts for 22% of total revenue and has increased by

approximately $425 thousand, or 3%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, primarily

due to an increase in online sales demand.

Revenues for the three months ended September 30, 2025 were approximately $60.2 million, an increase of 13% compared

to approximately $53.3 million for the three months ended September 30, 2024.

The increase in revenues was attributable to an

increase in telehealth subscription revenue, primarily for LifeMD primary care which experienced an increase of approximately $6.4

million during the three months ended September 30, 2025 compared to the three months ended September 30, 2024 primarily due to an

increase in online sales demand.

Telehealth revenue accounts for 79% of total revenue.

WorkSimpli revenue accounts for 21% of total

revenue and has decreased by approximately $225 thousand, or 2%, for the three months ended September 30, 2025 compared to the three

months ended September 30, 2024, primarily due to a decrease in online sales demand.

cost of revenue.

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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 48% to approximately $7.4 million for the three months ended June 30, 2025 compared

to approximately $5.0 million for the three months ended June 30, 2024.

The combined cost of revenue increase was due to increased sales

volume during the three months ended June 30, 2025 when compared to the three months ended June 30, 2024.

Telehealth costs increased

to 14% of associated telehealth revenues experienced during the three months ended June 30, 2025, from 12% of associated telehealth revenues

during the three months ended June 30, 2024.

WorkSimpli costs were 4% of associated WorkSimpli revenues for the three months ended June

30, 2025 and for the three months ended June 30, 2024.

Gross profit increased by approximately 20% to approximately $54.8 million for the three months ended June 30, 2025 compared

to approximately $45.6 million for the three months ended June 30, 2024.

Gross profit as a percentage of revenues was approximately 88%

for the three months ended June 30, 2025 as compared to approximately 90% for the three months ended June 30, 2024.

Gross profit as a

percentage of revenues for telehealth was 86% for the three months ended June 30, 2025 compared to 88% for the three months ended June

30, 2024, and for WorkSimpli was 96% for the three months ended June 30, 2025 and for the three months ended June 30, 2024.

in sales volume and demand for LifeMD primary care partially offset by an increase in shipping and physician consult fees, contributed

Total cost of revenue increased by approximately 48% to approximately $7.4 million for the three months ended September 30, 2025 compared

to approximately $5.0 million for the three months ended September 30, 2024.

The combined cost of revenue increase was due to increased

sales volume during the three months ended September 30, 2025 when compared to the three months ended September 30, 2024.

costs increased to 14% of associated telehealth revenues experienced during the three months ended September 30, 2025, from 11% of associated

telehealth revenues during the three months ended September 30, 2024 due to increases in physician consult fees and product shipping

WorkSimpli costs stayed consistent at 5% of associated WorkSimpli revenues for both the three month periods ended September 30,

2025 and 2024.

Gross profit increased by 9% to approximately $52.8 million for the three months ended September 30, 2025 compared to approximately

$48.3 million for the three months ended September 30, 2024.

Gross profit as a percentage of revenues was approximately 88% for the three

months ended September 30, 2025 as compared to approximately 91% for the three months ended September 30, 2024.

Gross profit as a percentage

of revenues for telehealth was 86% for the three months ended September 30, 2025 compared to 89% for the three months ended September

30, 2024, and for WorkSimpli was 95% for both the three month periods ended September 30, 2025 and 2024.

The increase in sales volume

and demand for telehealth subscriptions, partially offset by the increase in physician consult fees and product shipping costs contributed

to the increase in gross profit.

The increase in shipping and physician consult fees also contributed to the decrease in gross profit

as a percentage of telehealth revenue.

Operating expenses for the three months ended June 30, 2025 were approximately $55.7 million, as compared to approximately

$51.9 million for the three months ended June 30, 2024.

The increase in physician consult fees and product shipping costs also contributed to the decrease in

gross profit as a percentage of telehealth revenue.

Operating expenses for the three months ended September 30, 2025 were approximately $54.7 million, as compared to approximately

$52.3 million for the three months ended September 30, 2024.

This represents an increase of 5%, or approximately $2.5 million.

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This mainly consists of online marketing and advertising expenses.

During the three months ended June 30,

During the three months ended September

30, 2025, the Company had an increase of approximately $2.9 million, or 11% in selling and marketing costs resulting from additional

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

sales and marketing initiatives to drive the current period’s sales growth primarily for telehealth subscription revenue.

ramp up is expected to both increase and maintain sustained revenue growth in future years, based on the Company’s recurring

revenue subscription-based sales model.

service expenses:

This consists of rent, insurance, payroll and benefit expenses related to the Company’s patient care center

in South Carolina.

During the three months ended June 30, 2025, the Company had an increase of approximately $497 thousand, or 18%,

primarily related to increases in infrastructure costs and compensation costs due to increased headcount to support the Company’s

operating expenses:

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and bank charges.

During the three months ended June 30, 2025, the Company had an increase of approximately $1.1 million, or 59%,

primarily related to increases in software subscriptions.

During the three months ended September 30, 2025, the Company had an increase of approximately $927 thousand, or

44%, primarily related to increases in software subscriptions to support the Company’s growth and compliance initiatives.

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

During the three

months ended June 30, 2025, the Company had an increase of approximately $342 thousand, or 14%, primarily resulting from technology

months ended September 30, 2025, the Company had an increase of approximately $235 thousand, or 9%, primarily resulting from technology

platform improvements and amortization expenses.

increases in operating expenses were partially offset by a decrease in general and administrative expenses.

This category mainly consists

of stock-based compensation expense, 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, 2025, the Company had a decrease of approximately $956

thousand in general and administrative expenses, primarily related to the decrease in stock-based compensation expense of $2.1 million,

partially offset by an increase in legal and professional fees of $965 thousand.

above increases in expenses were partially offset by the following decreases in expenses:

and administrative expenses:

This category mainly consists of stock-based compensation expense, merchant processing fees, payroll

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

During the three months

ended September 30, 2025, the Company had a decrease of approximately $1.5 million in general and administrative expenses, primarily

related to a decrease in legal and professional fees of $1.2 million, a decrease in sales tax accruals of $793 thousand and a decrease

in payroll costs of $446 thousand, partially offset by an increase in stock-based compensation expense of $804 thousand.

service expenses:

This consists of rent, insurance, payroll and benefit expenses related to the Company’s patient care center

in South Carolina.

During the three months ended September 30, 2025, the Company had a decrease of approximately $20 thousand, or

expense, net.

Interest expense, net consists of interest expense related to the Avenue Facility, partially offset by interest income

on the Company’s cash account balances for the three months ended June 30, 2025 and 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 June 30,

Interest expense increased by approximately $132 thousand during the three months ended June 30, 2025 as compared to the three

months ended June 30, 2024, primarily due to an increase in interest expensed on the Avenue Facility during the three months ended June

of the Six Months Ended June 30, 2025 to the Six Months Ended June 30, 2024

financial results for the six months ended June 30, 2025 are summarized as follows in comparison to the six months ended June 30, 2024:

June 30, 2025

June 30, 2024

on the Company’s cash account balances for the three months ended September 30, 2025 and 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

September 30, 2024.

Interest expense decreased by approximately $296 thousand during the three months ended September 30, 2025 as compared

to the three months ended September 30, 2024, primarily due to the repayment of the Avenue Facility on August 5, 2025.

on debt extinguishment.

The Company recorded a $1.2 million loss on debt extinguishment related to the repayment of the Avenue Facility

during the three months ended September 30, 2025 due to a prepayment penalty and various fees associated with the Avenue Facility.

of the Nine Months Ended September 30, 2025 to the Nine Months Ended September 30, 2024

financial results for the nine months ended September 30, 2025 are summarized as follows in comparison to the nine months ended September

Telehealth revenue, net

$ 147,186,714

$ 109,687,054

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

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Development costs

Total expenses

Operating income (loss)

Operating loss

(14,433,048 )

Interest expense, net

Net income (loss)

Loss on debt extinguishment

Net loss before income taxes

(16,000,791 )

Net income attributable to non-controlling interest

Income tax expense

(16,233,314 )

income (loss) attributable to non-controlling interest

Net loss attributable to LifeMD, Inc.

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Preferred stock dividends

Net loss attributable to LifeMD, Inc.

Net loss attributable

to LifeMD, Inc.

common stockholders

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revenue, net.

Revenues for the six months ended June 30, 2025 were approximately $127.9 million, an increase of 35% compared to approximately

$94.8 million for the six months ended June 30, 2024.

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

Telehealth revenue accounts for 79% of total revenue and has increased during the six months ended June 30, 2025 due to an increase

in telehealth subscription revenue, primarily for LifeMD primary care which experienced an increase of approximately $37.8 million during

the six months ended June 30, 2025 compared to the six months ended June 30, 2024, partially offset by a decline in telehealth product

revenue of approximately $25 thousand during the six months ended June 30, 2025 compared to the six months ended June 30, 2024, primarily

due to a reduction in online sales demand.

WorkSimpli revenue accounts for 21% of total revenue and has increased by approximately $363

thousand, or 1%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, primarily due to an increase

in online sales demand.

Revenues for the nine months ended September 30, 2025 were approximately $187.0 million, an increase of 25% compared to

approximately $149.3 million for the nine months ended September 30, 2024.

The increase in revenues was attributable to the increase

in telehealth revenue of 34%.

Telehealth revenue accounts for 79% of total revenue and has increased during the nine months ended September

30, 2025 due to an increase in telehealth subscription revenue, primarily for LifeMD primary care which experienced an increase of approximately

$41.2 million during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 due to increased demand.

WorkSimpli revenue accounts for 22% of total revenue and stayed consistent for both the nine month periods ended September 30, 2025 and

cost of revenue.

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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 67% to approximately $16.1 million for the six months ended June 30, 2025 compared to

approximately $9.6 million for the six months ended June 30, 2024.

The combined cost of revenue increase was due to increased sales volume

during the six months ended June 30, 2025 when compared to the six months ended June 30, 2024.

Telehealth costs increased to 15% of associated

telehealth revenues experienced during the six months ended June 30, 2025, from 13% of associated telehealth revenues during the six

months ended June 30, 2024.

WorkSimpli costs increased to 4% of associated WorkSimpli revenues for the six months ended June 30, 2025

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

Gross profit increased by approximately 31% to approximately $111.8 million for the six months ended June 30, 2025 compared to

approximately $85.2 million for the six months ended June 30, 2024.

Gross profit as a percentage of revenues was approximately 87% for

the six months ended June 30, 2025 as compared to approximately 90% for the six months ended June 30, 2024.

Gross profit as a percentage

of revenues for telehealth was 85% for the six months ended June 30, 2025 compared to 87% for the six months ended June 30, 2024, and

for WorkSimpli was 96% for the six months ended June 30, 2025 compared to 97% for the six months ended June 30, 2024.

The increase in

sales volume and demand for LifeMD primary care partially offset by an increase in shipping and physician consult fees have contributed

to the increase in gross profit.

The increase in shipping and physician consult fees for the six months ended June 30, 2025 as well as

the Medifast Collaboration revenue recognized during the six months ended June 30, 2024 contributed to the decrease in gross profit as

a percentage of telehealth revenue.

Operating expenses for the six months ended June 30, 2025 were approximately $110.2 million, as compared to approximately $97.7

million for the six months ended June 30, 2024.

Total cost of revenue increased by approximately 60% to approximately $23.5 million for the nine months ended September 30, 2025 compared

to approximately $14.6 million for the nine months ended September 30, 2024.

The combined cost of revenue increase was due to increased

sales volume during the nine months ended September 30, 2025 when compared to the nine months ended September 30, 2024.

Telehealth costs

increased to 15% of associated telehealth revenues experienced during the nine months ended September 30, 2025, from 12% of associated

telehealth revenues during the nine months ended September 30, 2024 primarily due to increases in physician consult fees and product

shipping costs.

WorkSimpli costs increased to 5% of associated WorkSimpli revenues for the nine months ended September 30, 2025 as compared

to 4% of associated WorkSimpli revenues for the nine months ended September 30, 2024.

Gross profit increased by approximately 21% to approximately $163.5 million for the nine months ended September 30, 2025 compared

to approximately $134.7 million for the nine months ended September 30, 2024.

Gross profit as a percentage of revenues was approximately

87% for the nine months ended September 30, 2025 as compared to approximately 90% for the nine months ended September 30, 2024.

profit as a percentage of revenues for telehealth was 85% for the nine months ended September 30, 2025 compared to 88% for the nine months

ended September 30, 2024, and for WorkSimpli was 95% for the nine months ended September 30, 2025 compared to 96% for the nine months

ended September 30, 2024.

The increase in sales volume and demand for telehealth subscriptions partially offset by an increase in physician

consult fees and product shipping costs, contributed to the increase in gross profit.

The increase in physician consult fees and product

shipping costs as well as the Medifast Collaboration revenue recognized during the nine months ended September 30, 2024 also contributed

to the decrease in gross profit as a percentage of telehealth revenue for the nine months ended September 30, 2025.

Operating expenses for the nine months ended September 30, 2025 were approximately $164.9 million, as compared to approximately

$149.1 million for the nine months ended September 30, 2024.

This represents an increase of 11%, or approximately $15.8 million.

The increase is primarily

attributable to:

increase is primarily attributable to:

and marketing expenses:

This mainly consists of online marketing and advertising expenses.

During the six months ended June 30, 2025,

the Company had an increase of approximately $7.8 million, or 15% in selling and marketing costs resulting from additional sales

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

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

subscription-based sales model.

During the nine months ended September

30, 2025, the Company had an increase of approximately $10.6 million, or 14% in selling and marketing costs resulting from additional

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

ramp up is expected to both increase and maintain sustained revenue growth in future years, based on the Company’s recurring

revenue subscription-based sales model.

and administrative expenses:

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

During the six months

ended June 30, 2025, the Company had an increase of approximately $794 thousand in general and administrative expenses, primarily

related to increases in compensation costs of $1.3 million, merchant processing fees of $1.1 million and legal and professional fees

of $965 thousand, partially offset by the decrease in stock-based compensation expense of $2.1 million.

During the nine months

ended September 30, 2025, the Company had an increase of approximately $0.1 million in general and administrative expenses, primarily

related to an increase in merchant processing fees of $864 thousand and an increase in payroll costs of $837 thousand partially offset

by a decrease in stock-based compensation expense of $1.3 million and a decrease in legal and professional fees of $305 thousand.

service expenses:

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in South Carolina.

During the six months ended June 30, 2025, the Company had an increase of approximately $1.7 million, or 38%,

During the nine months ended September 30, 2025, the Company had an increase of approximately $1.7 million, or

23%, primarily related to increases in infrastructure costs and compensation costs due to increased headcount to support the Company’s

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and bank charges.

During the six months ended June 30, 2025, the Company had an increase of approximately $1.3 million, or 32%, primarily

related to increases in software subscriptions.

During the nine months ended September 30, 2025, the Company had an increase of approximately $2.3 million, or

36%, primarily related to increases in software subscriptions.

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

During the six

months ended June 30, 2025, the Company had an increase of approximately $930 thousand, or 21%, primarily resulting from technology

During the nine

months ended September 30, 2025, the Company had an increase of approximately $1.2 million, or 16%, primarily resulting from technology

platform improvements and amortization expenses.

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Interest expense, net consists of interest expense related to the Avenue Facility, partially offset by interest income

on the Company’s cash account balances for the six months ended June 30, 2025 and 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,

Interest expense increased by approximately $280 thousand during the six months ended June 30, 2025 as compared to the six months

ended June 30, 2024, primarily due to an increase in interest expensed on the Avenue Facility during the six months ended June 30, 2025.

June 30, 2025

December 31, 2024

on the Company’s cash account balances for the nine months ended September 30, 2025 and interest expense related to the Avenue

Facility and notes payable, partially offset by interest income on the Company’s cash account balances for the nine months ended

September 30, 2024.

Interest expense stayed consistent for both the nine month periods ended September 30, 2025 and 2024.

on debt extinguishment.

The Company recorded a $1.2 million loss on debt extinguishment related to the repayment of the Avenue Facility

during the nine months ended September 30, 2025 due to a prepayment penalty and various fees associated with the Avenue Facility.

Current assets

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$ (15,030,808 )

capital decreased by approximately $3.0 million during the six months ended June 30, 2025.

The increase in current assets is primarily

attributable to an increase in cash of approximately $1.2 million and an increase in inventory of approximately $454 thousand, partially

offset by a decrease in accounts receivable of $888 thousand and a decrease other current assets of approximately $707 thousand.

liabilities increased by approximately $3.3 million, which was primarily attributable to an increase in current portion of long-term

debt of approximately $3.5 million and an increase in accounts payable and accrued expenses of approximately $2.4 million, partially

offset by a decrease in deferred revenue of approximately $2.7 million.

capital decreased by approximately $0.5 million during the nine months ended September 30, 2025.

The decrease in current assets is primarily

attributable to a decrease in cash of approximately $11.2 million due to the repayment of the Avenue Facility on August 5, 2025 and a

decrease in accounts receivable of approximately $1.6 million, partially offset by an increase in other current assets of approximately

$0.6 million.

Current liabilities decreased by approximately $10.7 million, which was primarily attributable to a decrease in current

portion of long-term debt of approximately $8.4 million due to the repayment of the Avenue Facility on August 5, 2025 and a decrease

in deferred revenue of $5.3 million, partially offset by an increase in accounts payable and accrued expenses of approximately $2.8 million.

and Capital Resources

Six Months Ended June 30,

Net cash provided by operating activities

Months Ended September 30,

Net cash provided by operating

Net cash used in investing activities

(10,161,401 )

Net cash used in financing activities

Net increase in cash

cash provided by operating activities was approximately $11.7 million for the six months ended June 30, 2025, as compared with approximately

$9.7 million for the six months ended June 30, 2024.

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

during the six months ended June 30, 2025, include:

(1) $5.7 million in non-cash depreciation and amortization, (2) $4.6 million in non-cash

stock-based compensation charges, (3) the Company’s net income of $347 thousand, (4) an increase in accounts payable and accrued

expenses of $2.4 million and (5) an increase in accounts receivable of $888 thousand, partially offset by a decrease in deferred revenue

of $2.7 million.

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.

cash used in investing activities for the six months ended June 30, 2025 was approximately $6.6 million, as compared with approximately

$5.3 million for the six months ended June 30, 2024.

Net cash used in investing activities for the six months ended June 30, 2025, was

due to cash paid for capitalized software costs of approximately $5.6 million, and cash paid for the purchase of equipment of approximately

$918 thousand.

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

cash used in financing activities for the six months ended June 30, 2025 was approximately $3.9 million as compared with approximately

$1.9 million for the six months ended June 30, 2024.

Net cash used in financing activities for the six months ended June 30, 2025, consisted

(1) principal repayments on the Avenue Credit Agreement as defined below of approximately $2.1 million, (2) preferred stock dividends

of $1.6 million, and (3) distributions to non-controlling interest of $312 thousand.

Net cash used in financing activities 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 payment made

related to the ResumeBuild acquisition of approximately $31 thousand, partially offset by proceeds from the exercise of options of approximately

$108 thousand.

(12,618,450 )

Net (decrease) increase in cash

(11,219,153 )

cash provided by operating activities was approximately $11.6 million for the nine months ended September 30, 2025, as compared with

approximately $16.4 million for the nine months ended September 30, 2024.

The significant factors contributing to the net cash provided

by operating activities during the nine months ended September 30, 2025, include:

(1) $8.7 million in non-cash depreciation and amortization,

(2) $7.8 million in non-cash stock-based compensation charges, (3) an increase in accounts payable and accrued expenses of $2.8 million

and (4) $1.2 million loss on debt extinguishment recorded related to the repayment of the Avenue Facility on August 5, 2025.

These increases

were partially offset by a decrease in deferred revenue of $5.3 million and the Company’s net loss of $4.3 million for the nine

months ended September 30, 2025.

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

months ended September 30, 2024, include:

(1) an increase in accounts payable and accrued expenses of $12.4 million, (2) an increase

in deferred revenue of $10.9 million, (3) $9.1 million in non-cash stock-based compensation charges, and (4) $7.3 million in non-cash

depreciation and amortization.

These increases were partially offset by:

(1) the Company’s net loss of $16.2 million for the nine

months ended September 30, 2024, (2) an increase in accounts receivable of $5.2 million and (3) an increase in other current assets of

$2.3 million.

cash used in investing activities for the nine months ended September 30, 2025 was approximately $10.2 million, as compared with approximately

$8.8 million for the nine months ended September 30, 2024.

Net cash used in investing activities for the nine months ended September

30, 2025, was due to cash paid for capitalized software costs of approximately $8.4 million, and cash paid for the purchase of equipment

of approximately $1.7 million.

Net cash used in investing activities for the nine months ended September 30, 2024, was due to cash paid

for capitalized software costs of approximately $7.5 million, and cash paid for the purchase of equipment of approximately $1.3 million.

cash used in financing activities for the nine months ended September 30, 2025 was approximately $12.6 million as compared with approximately

$3.2 million for the nine months ended September 30, 2024.

Net cash used in financing activities for the nine months ended September

30, 2025, consisted of:

(1) the repayment of the Avenue Facility on August 5, 2025 of approximately $18.7 million, (2) preferred stock

dividends of $2.3 million, and (3) distributions to non-controlling interest of $762 thousand partially offset by $8.7 million net proceeds

received related to sales of common stock under the ATM Sales Agreement and $471 thousand of cash proceeds received from the exercise

of options and warrants.

Net cash used in financing activities for the nine months ended September 30, 2024, consisted of:

(1) preferred

stock dividends of $2.3 million, (2) distributions to non-controlling interest of $603 thousand, (3) repayments of notes payable of approximately

$328 thousand, and (4) the final contingent consideration payment made related to the ResumeBuild acquisition of approximately $31 thousand,

partially offset by proceeds from the exercise of options of approximately $108 thousand.

and Capital Resources Outlook

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through loans and advances.

The Company’s continued operations are dependent upon obtaining an increase in its sale volumes and

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

Our primary short-term and long-term

requirements for liquidity and capital are for customer acquisitions, funding business acquisitions and investments we may make from

time to time, working capital including our noncancelable operating lease obligations, long-term debt obligations, capital expenditures

and general corporate purposes.

For more information on our operating lease obligations, see Note 9—Leases to our unaudited condensed

consolidated financial statements included in this report.

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

improving operational efficiencies, or that financing will be available or, if available, that such financing will be available under

favorable terms.

Our primary short-term and long-term requirements for liquidity and capital are for customer acquisitions,

funding business acquisitions and investments we may make from time to time, working capital including our noncancelable operating lease

obligations, long-term debt obligations, capital expenditures and general corporate purposes.

For more information on our operating lease

obligations, see Note 10—Leases to our unaudited condensed consolidated financial statements included in this report.

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

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(collectively, “Avenue”).

The Avenue Credit Agreement provides for a convertible senior

The Avenue Credit Agreement provided for a convertible senior

secured credit facility of up to an aggregate amount of $40 million, comprised of the following:

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referred to as the “Avenue Facility”.

The Avenue Facility matures on October 1, 2026.

The Company issued Avenue warrants

to purchase $1.2 million of the Company’s common stock at an exercise price of $1.24, subject to adjustments, of which $660 thousand

has been exercised.

In addition, Avenue has converted $2 million of the $15 million in term loans funded at closing into shares of the

Company’s common stock, at a price per share equal to $1.49.

Proceeds from the Avenue Facility were used to repay the Company’s

outstanding notes payable balances with CRG Financial and are expected to be used for general corporate purposes.

On August 5, 2025, the Company paid the remaining $14.0 million in outstanding principal payments on the Avenue Facility

and the prepayment penalty as noted in the Avenue Credit Agreement.

As of August 5, 2025, there are no remaining principal payments on

the Avenue Facility.

November 15, 2023, Avenue converted $1 million of the principal amount of the outstanding term loans into shares of the Company’s

common stock.

This resulted in 672,042 shares of common stock issued to Avenue.

Additionally on November 15, 2023, Avenue exercised 96,773

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

May 29, 2025, Avenue converted $1 million of the principal amount of the outstanding term loans into shares of the Company’s common

This resulted in 672,042 shares of common stock issued to Avenue.

Additionally on May 29, 2025, Avenue exercised 435,484 of the

Avenue Warrants on a cashless basis resulting in 388,650 shares of the Company’s common stock issued.

As of June 30, 2025, there

was $15.9 million in principal outstanding under the Avenue Facility.

The Company issued Avenue warrants to purchase $1.2 million of the Company’s

common stock at an exercise price of $1.24, subject to adjustments, of which $660 thousand have been exercised (the “Avenue Warrants”).

In addition, Avenue converted $2 million of the $15 million in term loans funded at closing into shares of the Company’s common

stock at a price per share equal to $1.49.

Proceeds from the Avenue Facility were used to repay the Company’s outstanding notes

payable balances with CRG Financial.

On August 5, 2025, the Company paid the remaining $14.0 million in outstanding principal payments

on the Avenue Facility and the prepayment penalty as noted in the Avenue Credit Agreement.

As of September 30, 2025, there are no principal

payments remaining on the Avenue Facility.

The Company recorded a loss on debt extinguishment of $1.2 million within its unaudited condensed

consolidated financial statements for the three and nine months ended September 30, 2025.

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

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and units including $53.3 million of its common stock under the ATM Sales Agreement.

As of June 30, 2025, 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.

Refer to Note 13-Subsequent

Events for sales of common stock under the ATM Sales Agreement subsequent to June 30, 2025.

of August 4, 2025, the Company has a current cash balance of approximately $36.5 million.

The Company reviewed its forecasted operating

results and sources and uses of cash used in management’s assessment, which included the available financing and consideration

of positive and negative evidence impacting management’s forecasts, market, and industry factors.

Positive indicators that lead

to the Company’s expectation that it will have sufficient cash over the next 12 months following the date of this report include:

(1) the Company’s continued strengthening of its revenues, reduction in losses 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, 2025, (3) cash on hand of $36.2 million as of June 30, 2025, (4) $44.6 million available under the ATM Sales

Agreement as of August 4, 2025, 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 the Company believes will continue

to drive interest in the Company as evidenced by the collaboration with Medifast, Inc.

during the year ended December 31, 2024.

During the three months ended September 30, 2025,

the Company sold 762,990 shares of common stock under the ATM Sales Agreement and net proceeds received were $8.7 million.

As of September

30, 2025, the Company had $44.6 million available under the ATM Sales Agreement.

Company expects that its existing cash as of September 30, 2025 of $23.8 million will be sufficient to fund our planned operating expenses

and capital expenditure requirements for at least the next 12 months from the issuance date of these unaudited condensed consolidated

financial statements.

Accounting Estimates

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The Company is currently

evaluating the impact that ASU 2023-09 will have to its consolidated financial statements and related disclosures.

evaluating the impact that ASU 2023-09 will have to its financial disclosures.

November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures

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Company is evaluating the impact this guidance will have on the disclosures in the consolidated financial statements.

September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Improvements to the Accounting for Internal-Use Software , to simplify and modernize the accounting for internal-use software costs.

The amendments remove references to prescriptive software development stages and clarify that capitalization of eligible software development

costs begins when management authorizes and commits to funding the project and it is probable the project will be completed, and the

software will be used as intended.

The amendments in this update are effective for annual reporting periods beginning after December

15, 2027, and interim reporting periods within those annual periods.

Early adoption is permitted, and the guidance may be applied prospectively,

retrospectively, or using a modified approach for in-process projects.

The Company is evaluating the impact this guidance will have on

the consolidated financial statements and related disclosures.

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

3 unchanged sentences

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