What changed in this filing

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Item 1. Financial Statements

2026-05-06 compared with 2025-11-17 · 731 added, 1136 removed, 543 unchanged (77% of the section changed)

Financial Statements

CONSOLIDATED BALANCE SHEETS

BALANCE SHEETS

March 31, 2026

December 31, 2025

Current Assets

1 unchanged sentence

Product deposit

current assets

Inventory, net

Other current assets

Total Current Assets

2 unchanged sentences

Right of use assets, net

software, net

Non-current Assets

LIABILITIES AND STOCKHOLDERS’

EQUITY (DEFICIT)

Capitalized software, net

Intangible assets, net

Total Non-current Assets

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities

1 unchanged sentence

Accrued expenses

Current operating lease

Current portion of convertible

long-term debt

Current operating lease liabilities

Deferred revenue

Total Current Liabilities

Long-term Liabilities

Convertible long-term debt,

Noncurrent operating lease

consideration

Noncurrent operating lease liabilities

Total Liabilities

Commitments and contingencies (Note 12)

Stockholders’ Equity (Deficit)

Stockholders’ Equity

Series A Preferred Stock, $ 0.0001 par value;

1,610,000 shares authorized, 1,400,000 shares issued and outstanding, liquidation value approximately, $ 35.8 million as of September

30, 2025 and December 31, 2024

1,610,000 shares authorized, 1,400,000 shares issued and outstanding, liquidation value approximately, $ 35.8 million as of March 31, 2026 and December 31, 2025

Common Stock, $ 0.01 par value;

shares authorized, 46,686,350 and 42,293,907 shares issued, 46,583,310 and 42,190,867 outstanding as of September 30, 2025 and December

31, 2024, respectively

100,000,000 shares authorized, 47,632,707 and 46,760,016 shares issued, 47,529,667 and 46,656,976 outstanding as of March 31, 2026 and December 31, 2025, respectively

Additional paid-in capital

2 unchanged sentences

( 228,603,075 )

Treasury stock, 103,040 ,

at cost, as of September 30, 2025 and December 31, 2024

Total LifeMD, Inc.

Stockholders’

Equity (Deficit)

( 9,083,214 )

Non-controlling interest

Stockholders’ Equity (Deficit)

( 7,554,120 )

Liabilities and Stockholders’ Equity (Deficit)

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

Consolidated STATEMENTS OF OPERATIONS

Treasury stock, 103,040 , at cost, as of March 31, 2026 and December 31, 2025

Total Stockholders’ Equity

Total Liabilities and Stockholders’ Equity

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

STATEMENTS OF OPERATIONS

Three Months Ended March 31,

Telehealth revenue, net

$ 147,186,714

$ 109,687,054

WorkSimpli revenue, net

revenues, net

Cost of revenues

Cost of telehealth revenue

Cost of WorkSimpli revenue

cost of revenues

Selling and marketing expenses

General and administrative expenses

Customer service expenses

Other operating expenses

Customer service expenses

Development costs

Operating loss

( 1,969,214 )

( 3,996,274 )

( 1,446,434 )

( 14,433,048 )

Interest expense, net

( 1,551,758 )

( 1,567,743 )

Loss on debt extinguishment

( 1,155,851 )

Net loss before income taxes

( 3,387,521 )

( 4,554,871 )

( 4,154,043 )

( 16,000,791 )

Income tax expense

Net income (loss)

Total expenses

Operating loss from continuing operations

( 8,929,072 )

( 1,181,717 )

Interest income (expense), net

Loss from continuing operations before income taxes

( 8,872,596 )

( 1,645,355 )

income (loss) attributable to non-controlling interest

Net loss attributable to

Income tax provision

Net loss from continuing operations

( 8,872,596 )

( 1,645,355 )

Net income from discontinued operations

Net (loss) income

( 8,872,596 )

Net income attributable to non-controlling interest of discontinued operations

Net loss attributable to LifeMD, Inc.

( 8,872,596 )

Preferred stock dividends

( 2,329,688 )

loss attributable to LifeMD, Inc.

Net loss attributable to LifeMD, Inc.

common stockholders

1 unchanged sentence

$ ( 960,341 )

$ ( 7,939,247 )

$ ( 18,800,039 )

Basic (loss) earnings per share attributable to LifeMD, Inc.

common stockholders:

Continuing operations

Discontinued operations

Basic loss per share

attributable to LifeMD, Inc.

Diluted (loss) earnings per share attributable to LifeMD, Inc.

common stockholders:

Continuing operations

Discontinued operations

Diluted loss per share

attributable to LifeMD, Inc.

common stockholders

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’ EQUITY (Deficit)

A Preferred Stock

Balance, January 1, 2024

$ 217,550,583

$ ( 215,335,665 )

$ ( 163,701 )

Stock compensation expense

Stock issued for noncontingent consideration

Exercise of stock options

Cashless exercise of warrants

Cashless exercise of options

Series A Preferred Stock Dividend

Distribution to non-controlling interest

Net (loss) income

( 4,135,750 )

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

STATEMENTS of CHANGES IN STOCKHOLDERS’ EQUITY (Deficit)

Non-controlling

Interest of Discontinued

January 1, 2025

$ 230,508,339

$ ( 239,850,931 )

Balance, March 31, 2024

$ ( 163,701 )

1 unchanged sentence

$ ( 7,554,120 )

Stock compensation expense

compensation expense

exercise of stock options

Cashless exercise of stock options

Cashless exercise of warrants

Series A Preferred Stock Dividend

Distribution to non-controlling interest

Net (loss) income

( 7,676,679 )

( 7,534,958 )

Balance, June 30, 2024

$ 225,001,991

$ ( 228,701,219 )

$ ( 163,701 )

$ ( 3,445,193 )

$ ( 1,891,625 )

Stock compensation expense

Series A Preferred Stock Dividend

Distribution to non-controlling interest

( 4,657,922 )

( 4,787,394 )

Balance, September

A Preferred Stock Dividend

to non-controlling interest of discontinued operations

(loss) income

March 31, 2025

$ 233,043,479

3 unchanged sentences

$ ( 5,470,088 )

A Preferred Stock

Series A Preferred

Balance, January 1, 2026

4 unchanged sentences

$ ( 228,603,075 )

Stock compensation expense

Cashless exercise of stock options

Series A Preferred Stock Dividend

Distribution to non-controlling interest

Balance, March 31, 2025

$ ( 163,701 )

$ ( 240,811,272 )

$ ( 163,701 )

$ ( 7,495,027 )

$ ( 5,470,088 )

Stock compensation expense

Cashless exercise of stock options

Cashless exercise of warrants

Stock issued for debt conversion

Stock issued for asset acquisition

Exercise of stock options

Series A Preferred Stock Dividend

Distribution to non-controlling interest

Net (loss) income

( 8,872,596 )

( 1,114,589 )

Balance, June 30, 2025

$ 236,426,008

$ ( 243,207,498 )

$ ( 163,701 )

$ ( 6,493,639 )

$ ( 4,239,744 )

$ 236,426,008

$ ( 243,207,498 )

$ ( 163,701 )

$ ( 6,493,639 )

$ ( 4,239,744 )

Stock compensation expense

Cashless exercise of stock options

Exercise of stock options

Exercise of warrants

Sale of common stock under ATM, net

Series A Preferred Stock Dividend

Distribution to non-controlling interest

Net (loss) income

1 unchanged sentence

( 8,872,596 )

Balance, March 31, 2026

$ 252,976,314

Balance, September

$ ( 238,252,234 )

3 unchanged sentences

$ ( 163,701 )

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

STATEMENTS OF CASH FLOWS

Three Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES

Net (loss) income

$ ( 8,872,596 )

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

Consolidated STATEMENTS OF CASH FLOWS

Months Ended September 30,

CASH FLOWS FROM OPERATING

Net income from discontinued operations

Net loss from continuing operations

( 8,872,596 )

( 1,645,355 )

Adjustments to reconcile net loss to net cash

provided by operating activities:

Adjustments to reconcile net loss from continuing operations to net cash provided by operating activities:

Amortization of debt discount

Amortization of capitalized

Amortization of capitalized software

Amortization of intangibles

Accretion of consideration

Loss on debt extinguishment

Depreciation of fixed assets

Noncash operating lease

Noncash operating lease expense

Stock compensation expense

1 unchanged sentence

Accounts receivable

( 5,222,534 )

Product deposit

3 unchanged sentences

Deferred revenue

( 5,270,408 )

Accounts payable

cash provided by operating activities

CASH FLOWS FROM INVESTING

Cash paid for capitalized

software costs (a)

Accrued expenses

( 2,259,106 )

Net cash provided by operating activities of continuing operations

Net cash provided by operating activities of discontinued operations

Net cash provided by operating activities

CASH FLOWS FROM INVESTING ACTIVITIES

Cash paid for capitalized software costs (a)

( 1,951,584 )

Purchase of equipment

( 1,886,815 )

Purchase of equipment

Net cash used in investing activities of continuing operations

( 2,056,762 )

Purchase of intangible

cash used in investing activities

( 2,004,360 )

Net cash used in investing activities of discontinued operations (a)

Net cash used in investing activities

( 2,056,762 )

CASH FLOWS FROM FINANCING

Repayment of debt instruments

( 2,867,338 )

Sale of common stock under ATM, net

CASH FLOWS FROM FINANCING ACTIVITIES

Preferred stock dividends

( 2,329,688 )

Repayment of notes payable, net of prepayment

Cash proceeds from exercise of warrants

Cash proceeds from exercise of options

Contingent consideration payments for ResumeBuild

Distributions to non-controlling

Net cash used in financing

( 12,618,450 )

( 3,183,770 )

Net (decrease) increase in cash

Net cash used in financing activities of continuing operations

Net cash used in financing activities of discontinued operations

Net cash used in financing activities

Net decrease in cash

( 2,308,181 )

1 unchanged sentence

Cash at end of period

Cash paid for interest

Cash paid during the

period for interest

Cash paid during the

period for taxes

Non-cash investing

and financing activities:

Cash of discontinued operations at end of period

Cash of continuing operations at end of period

Cash paid for interest and taxes

Cash paid during the period for interest

Cash paid during the period for taxes

Non-cash investing and financing activities

Cashless exercise of options

Cashless exercise of warrants

Stock issued for debt

Stock issued for asset

Stock issued for noncontingent

consideration payment

Right of use assets

Operating lease liabilities

(a) Approximately $ 2.9

million and $ 2.7

was paid to a related party for capitalized software costs during the nine months ended September

30, 2025 and 2024, respectively.

See Note 12—Related Party Transactions.

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

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Approximately

$ 878 thousand was paid to a related party for capitalized software costs during the three months ended March 31, 2025.

See Note 13—Related

Party Transactions.

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

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1 – NATURE OF THE ORGANIZATION AND BUSINESS

was formed in the State of Delaware on May 24, 1994, under its prior name, Immudyne, Inc.

The Company changed its name to Conversion

on June 22, 2018 and then subsequently, on February 22, 2021, it changed its name to LifeMD, Inc.

Effective February 22, 2021,

the trading symbol for the Company’s common stock, par value $ 0.01 per share on The Nasdaq Stock Market LLC changed from “CVLB”

April 1, 2016, the original operating agreement of Immudyne PR LLC (“Immudyne PR”), a joint venture to market the Company’s

skincare products, was amended and restated and the Company increased its ownership and voting interest in Immudyne PR to 78.2 %.

with the name change of the parent company to Conversion Labs, Inc., Immudyne PR was renamed to Conversion Labs PR LLC (“Conversion

On April 25, 2019, the operating agreement of Conversion Labs PR was amended and restated in its entirety to increase

the Company’s ownership and voting interest in Conversion Labs PR to 100 %.

On February 22, 2021, concurrent with the name of the

parent company to LifeMD, Inc., Conversion Labs PR was renamed to LifeMD PR, LLC.

June 2018, the Company closed the strategic acquisition of 51 % of LegalSimpli Software, LLC, which operates a software as a service application

for converting, editing, signing, and sharing PDF documents called PDFSimpli.

On July 15, 2021, LegalSimpli Software, LLC, changed its

name to WorkSimpli Software LLC, (“WorkSimpli”).

As a result of a series of restructuring transactions, the Company’s

ownership interest in WorkSimpli is 73.3 %.

On November 4, 2025, LifeMD, Inc.

sold its majority ownership interest in WorkSimpli to Lion

For a description of the transaction, see Note 15—Subsequent Events.

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

refer to LifeMD, Inc.

(formerly known as Conversion Labs, Inc.), LifeMD Pharmacy Holdings LLC, an affiliated limited liability company,

(“LifeMD Pharmacy”) and our majority-owned subsidiary, WorkSimpli.

The affiliated network of medical Professional Corporations

and medical Professional Associations administratively led by LifeMD Southern Patient Medical Care, P.C.

(“LifeMD PC”) is

the Company’s affiliated, variable interest entity in which we hold a controlling financial interest.

Unless otherwise specified,

all dollar amounts are expressed in United States dollars.

Company is a direct-to-patient telehealth company providing virtual and in-home healthcare.

The Company is improving the delivery of

the healthcare experience through telehealth with its proprietary technology platform, affiliated and dedicated provider network, broad

and expanding treatment capabilities, and the unique ability to nurture patient relationships.

Direct-to-patient telehealth technology

companies, like the Company, connect consumers to affiliated, licensed, healthcare professionals for care across numerous indications,

including virtual medical care, weight loss, sexual health, hormone replacement therapy, hair loss and other conditions.

is a patient-centric, direct-to-patient healthcare company providing a high-quality, cost-effective, and convenient way for patients

to access virtual medical care and pharmacy services.

Through the Company’s vertically integrated care model, it combines proprietary

technology, affiliated clinical services, pharmacy infrastructure, and artificial intelligence (“AI”)-enabled operational

systems to deliver longitudinal care at scale.

The Company’s mission is to empower individuals to live healthier lives by expanding

access to high-quality virtual and in-home healthcare services.

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

11 unchanged sentences

treatment for a variety of men’s health needs, including erectile dysfunction, premature ejaculation and hair loss.

the first quarter of 2022, the Company launched our virtual primary care offering under the LifeMD brand, LifeMD Primary Care.

This offering

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

April 2023, we launched our GLP-1 Weight Management Program providing primary care, metabolic coaching, lab work, and prescription services

2022, the Company launched our virtual primary care offering under the LifeMD brand, LifeMD Primary Care.

This offering provides patients

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

2023, we launched our GLP-1 Weight Management Program providing primary care, metabolic coaching, lab work, and prescription services

(as appropriate) to patients seeking to access a medically supported weight loss solution.

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Management Program with a personalized, non-GLP-1 treatment plan consisting of three oral medications – metformin, bupropion, and

of September 30, 2025, the Company has an accumulated deficit of approximately $ 247.8

million and a working capital deficit of approximately $ 15.6

The working capital deficit includes approximately $ 14.4

million of deferred revenue for which the Company expects to recognize into revenue within 12 months.

The Company has incurred

significant operating losses and to date, has been funding operations primarily through the sales of its products, issuance of

common and preferred stock, and through loans and advances.

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

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

Venture Opportunities Fund, L.P.

(collectively, “Avenue”).

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:

(1) $ 15 million in term loans funded

at closing, (2) $ 5 million of additional committed term loans which the Company received on September 26, 2023 under the First Amendment

to the Avenue Credit Agreement (the “Avenue First Amendment”) and (3) $ 20 million of additional uncommitted term loans, collectively

referred to as 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 approximately $ 1.2 million within its

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

June 2018, the Company closed the strategic acquisition of 51 % of LegalSimpli Software, LLC, which operates a software as a service application

for converting, editing, signing, and sharing PDF documents called PDFSimpli.

On July 15, 2021, LegalSimpli Software, LLC, changed its

name to WorkSimpli Software LLC, (“WorkSimpli”).

As a result of a series of restructuring transactions, the Company’s

ownership interest in WorkSimpli was 73.3 %.

On November 4, 2025, LifeMD, Inc.

sold its majority ownership interest in WorkSimpli to Lion

WorkSimpli is classified as discontinued operations for all periods presented in these unaudited consolidated financial statements.

For a description of the transaction, see Note 4—Discontinued Operations.

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

refer to LifeMD, Inc.

(formerly known as Conversion Labs, Inc.) and LifeMD Pharmacy Holdings LLC, an affiliated limited liability company

(“LifeMD Pharmacy”).

The affiliated network of medical Professional Corporations and medical Professional Associations administratively

led by LifeMD Southern Patient Medical Care, P.C.

(“LifeMD PC”) is the Company’s affiliated, variable interest entity

in which we hold a controlling financial interest.

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

of March 31, 2026, the Company has an accumulated deficit of approximately $238.3 million and a positive working capital of approximately

$ 2.1 million.

The Company has incurred significant operating losses to date and has been funding operations primarily through the cash

generated from operating activities, issuance of common and preferred stock, and through loans and advances.

January 2, 2026, the Company entered into a Credit Agreement (the “Credit Agreement”) with Citizens Bank, N.A.

(“Citizens”),

which provides for a senior secured revolving credit facility in an aggregate outstanding amount not exceeding $ 30

million (the “Credit Facility”) to support potential

corporate development and/or shareholder value creation initiatives.

The Credit Facility may be increased in the aggregate principal

amount of up to $ 20

million on the terms and subject to the conditions described

in the Credit Agreement.

In connection with the Credit Agreement, among other things, the Company issued a revolving loan note to Citizens

for any loans that may be made under the Credit Facility.

Additionally, among other things, the Company and its subsidiaries entered

into a pledge and security agreement and a guarantee agreement to provide credit support for the Credit Facility.

The Credit Facility

requires the Company to maintain (i) a Consolidated Leverage Ratio not to exceed 2.50 to 1.00 and (ii) a Consolidated Interest Coverage

Ratio of at least 3.00 to 1.00 .

As of March 31, 2026, the Company was in compliance with the Consolidated Leverage Ratio covenant and

was out of compliance with the Consolidated Interest Coverage Ratio covenant contained in the Credit Facility, which is the ratio of

(a) the Consolidated EBIT of the Company and its Subsidiaries for the most recently completed four consecutive fiscal quarters ended

March 31, 2026, to (b) Consolidated Interest Expense of the Company and its Subsidiaries for the most recently completed four consecutive

fiscal quarters ended March 31, 2026, as those capitalized terms are defined in the Credit Agreement.

Compliance with the Consolidated

Interest Coverage Ratio was adversely impacted by an increase of approximately $ 7.6 million, or 34%, in selling and marketing costs

during the three months ended March 31, 2026, resulting from additional sales and marketing initiatives to drive the current and future

periods’ sales growth.

Among its remedies, Citizens could determine that there has been an Event of Default, deny access to funds

under the Credit Facility, and/or it could terminate the Credit Facility.

Discussions on the terms of an amendment to the Credit Agreement

or waiver of compliance with the covenant are ongoing.

As of March 31, 2026 and to date, the Company had not drawn any amounts under

the Credit Facility.

Refer to Note 8—Indebtedness for additional information.

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.

During the three months ended September 30, 2025,

the Company sold 762,990 shares of common stock under the ATM Sales Agreement, with approximately $ 270 thousand in fees paid to the sales

agent and net proceeds of $ 8.7 million.

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

The 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.

As of March 31, 2026, the Company had $ 44.6 million

available under the ATM Sales Agreement.

Company expects that its existing cash as of March 31, 2026 of $ 34.5 million and net proceeds from the sale of common stock under the

ATM Sales Agreement 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 consolidated financial statements.

2 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

of Presentation

accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally

accepted in the United States of America for interim financial information and in accordance with the instructions to Form 10-Q and Article

8 of Regulation S-X.

Accordingly, they do not include all of the information and note disclosures required by accounting principles generally

accepted in the United States (“U.S.

accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted

in the United States of America for interim financial information and in accordance with the instructions to Form 10-Q.

they do not include all of the information and note disclosures required by accounting principles generally accepted in the United States

GAAP”) for complete audited financial statements.

The accompanying unaudited financial

information should be read in conjunction with the audited consolidated financial statements, including the notes thereto, as of and

for the year ended December 31, 2024, included in our 2024 Annual Report on Form 10-K filed with the SEC.

The information furnished in

this report reflects all adjustments (consisting of normal recurring adjustments), which are, in the opinion of management, necessary

for the fair statement of our financial position, results of operations and cash flows for each period presented.

The results of operations

for the three and nine months ended September 30, 2025 are not necessarily indicative of the results for the year ending December 31,

2025 or for any future period.

The accompanying unaudited financial information should be read

in conjunction with the audited consolidated financial statements, including the notes thereto, as of and for the year ended December

31, 2025, included in our 2025 Annual Report on Form 10-K filed with the SEC.

The information furnished in this report reflects all adjustments

(consisting of normal recurring adjustments), which are, in the opinion of management, necessary for the fair statement of our financial

position, results of operations and cash flows for each period presented.

The results of operations for the three months ended March

31, 2026 are not necessarily indicative of the results for the year ending December 31, 2026 or for any future period.

of Consolidation

1 unchanged sentence

810, Consolidation .

The unaudited condensed consolidated financial statements include the accounts of the Company, LifeMD Pharmacy,

its majority owned subsidiary, WorkSimpli, and LifeMD PC, the Company’s affiliated, variable interest entity in which we hold a

controlling financial interest.

All intercompany transactions and balances have been eliminated in consolidation.

unaudited consolidated financial statements include the accounts of the Company, LifeMD Pharmacy, and LifeMD PC, the Company’s

affiliated, variable interest entity in which we hold a controlling financial interest.

On November 4, 2025, the Company sold its interest

in our majority-owned subsidiary WorkSimpli to Lion Buyer, LLC.

WorkSimpli is classified as discontinued operations for all periods presented

in these unaudited consolidated financial statements.

intercompany transactions and balances have been eliminated in consolidation.

Company maintains deposits in financial institutions that may, at times, exceed amounts guaranteed by the Federal Deposit Insurance Corporation.

These balances could be impacted if one or more of the financial institutions in which we deposit

monies fails or is subject to other adverse conditions in the financial or credit markets.

We have never experienced any losses

related to these balances.

These balances could be impacted if one or more of the financial institutions in which we deposit monies fails or is subject to other

adverse conditions in the financial or credit markets.

We have never experienced any losses related to these balances.

Interest Entities

21 unchanged sentences

As a result, the Company

presents the financial position, results of operations, and cash flows of LifeMD PC as part of the unaudited condensed consolidated financial

statements of the Company.

presents the financial position, results of operations, and cash flows of LifeMD PC as part of the unaudited consolidated financial statements

of the Company.

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

net loss for LifeMD PC was approximately $ 3.8 million and $ 4.0 million for the three months ended September 30, 2025 and 2024, respectively,

and $ 10.5 million and $ 10.0 million for the nine months ended September 30, 2025 and 2024, respectively.

Total assets and liabilities

for the LifeMD PC were approximately $ 13 thousand and $ 649 thousand, respectively, as of September 30, 2025 and $ 8 thousand and $ 380

thousand, respectively, as of December 31, 2024.

Company prepares its unaudited condensed consolidated financial statements in conformity with U.S.

GAAP which requires management to

make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and

the reported amounts of revenues and expenses during the reporting period.

Actual results could differ from those estimates.

net loss for LifeMD PC was approximately $ 3.1 million and $ 3.3 million for the three months ended March 31, 2026 and 2025, respectively.

Total assets and liabilities for the LifeMD PC were approximately $ 331 thousand and $ 528 thousand, respectively, as of March 31, 2026

and $ 43 thousand and $ 360 thousand, respectively, as of December 31, 2025.

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

States of America which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities

at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Actual results

could differ from those estimates.

Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers , when control of the promised goods

13 unchanged sentences

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

has determined that there is one performance obligation that is delivered over time, as the Company allows the subscriber continuous

access to the telehealth platform for the time period of the subscription.

The telehealth platform access is a stand-ready obligation

that is satisfied over the subscription period.

consultations, the Company has determined that there is one performance obligation that is delivered as of a point in time.

For subscription-based

access, the Company has determined that there is one performance obligation that is delivered over time, as the Company allows the subscriber

continuous access to the telehealth platform for the time period of the subscription.

The telehealth platform access is a stand-ready

obligation that is satisfied over the subscription period.

Company also offers bundled arrangements in which a subscriber receives subscription-based access to the Company’s telehealth platform

7 unchanged sentences

Revenue related to contracts

with multiple performance obligations was approximately $ 2.5 million and $ 8.9 million for the three months ended September 30, 2025 and

2024, respectively, and $ 10.7 million and $ 22.6 million for the nine months ended September 30, 2025 and 2024, respectively.

with multiple performance obligations was approximately $ 4.1 million for both the three months ended March 31, 2026 and 2025.

Additionally,

3 unchanged sentences

The Company may account for prescription product revenue as the principal or agent in the arrangement with its customers depending on

the agreement with the related third-party pharmacy.

The following factors are evaluated to determine if the Company acts as principal

or agent in the arrangement:

the agreement with the third-party pharmacy.

The following factors are evaluated to determine if the Company acts as principal or agent

in the arrangement:

(i) whether the Company has sole discretion in determining which pharmacy fills a customer’s prescription;

6 unchanged sentences

Based on evaluation

of these factors, the Company accounts for prescription product revenue as the agent in the arrangement with its largest third-party

pharmacy provider.

of these factors, the Company accounts for prescription product revenue as either principal or agent in the arrangement depending on

the specific agreement terms with the third-party pharmacy.

Product Revenue

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Revenue is recognized at a point in time when control transfers to the customer, which occurs upon shipment.

The Company generally records sales of finished products when the customer places and pays for the order, with products fulfilled and

simultaneously shipped either by the Company or a third-party fulfillment provider.

When shipment does not occur concurrently with payment,

revenue recognition is deferred until the product is shipped.

Company also provides subscription-based arrangements involving recurring shipments of products.

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are based on historical data and applied consistently across the Company’s product portfolio.

discounts, returns and rebates on telehealth subscription and product revenues approximated $ 1.2 million and $ 1.0 million, during the

three months ended September 30, 2025 and 2024, respectively, and $ 3.6 million and $ 2.8 million, during the nine months ended September

returns and rebates on telehealth revenues approximated $ 1.6 million and $ 776 thousand, during the three months ended March

31, 2026 and 2025, respectively.

Company, through its majority-owned subsidiary WorkSimpli, offers a subscription-based service providing a suite of software applications

to its subscribers, principally on a monthly subscription basis.

The software suite allows the subscriber to convert almost any type

of document to another electronic form of editable document, providing ease of editing.

For these subscription-based contracts with customers,

the Company offers an initial 14-day trial period which is billed at $ 1.95 , followed by a monthly subscription, or a multi-month subscription

to the Company’s software suite dependent on the subscriber’s enrollment selection.

The Company offers monthly and multi-month

subscriptions dependent upon the subscriber’s enrollment selection.

The Company has determined that there is one performance obligation

that is delivered over time, as the Company allows the subscriber continuous access to the WorkSimpli platform for the time period of

the subscription.

The WorkSimpli platform access is a stand-ready obligation that is satisfied over the subscription period.

allows the customer to cancel at any point during the billing cycle, in which case the customer’s subscription will not be renewed

for the following month or year depending on the original subscription.

The Company offers a discount for the monthly or multi-month

subscriptions being purchased, which is deducted at the time of payment at the initiation of the contract term;

therefore the contract

price is fixed and determinable at the contract initiation.

Monthly and multi-month subscriptions for the service are recorded net of

the Company’s known discount rates.

Customer discounts and allowances on WorkSimpli revenues approximated $ 900 thousand and $ 1.1

million during the three months ended September 30, 2025 and 2024, respectively, and $ 2.9 million and $ 2.5 million during the nine months

ended September 30, 2025 and 2024, respectively.

Collaboration

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

through and with certain of its wholly-owned subsidiaries

(“Medifast”).

Pursuant to certain agreements between the parties, Medifast agreed to pay to the Company the amount of $ 10

million to support the collaboration, funding enhancements to the Company platform, operations and supporting infrastructure, of which

$ 5 million was paid at the closing on December 12, 2023, $ 2.5 million was paid during the three months ended March 31, 2024, and the

remaining $ 2.5 million was paid during the three months ended June 30, 2024 (the “Medifast Collaboration”).

Company determined the transaction price totaled $ 10 million, which was fully collected as of December 31, 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 as of December 31, 2023, the $ 5 million payment was fully recognized during the year ended December

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

the three and nine months ended September 30, 2025 and 2024, the Company had the following disaggregated revenue:

the three months ended March 31, 2026 and 2025, the Company had the following disaggregated revenue:

SCHEDULE OF DISAGGREGATED REVENUE

Months Ended September 30,

Three Months Ended March 31,

Telehealth subscription revenue

Telehealth product revenue

WorkSimpli revenue

Medifast collaboration

Total revenues, net

$ 186,975,039

$ 149,337,063

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

As of September 30, 2025 and

December 31, 2024, the Company has accrued contract liabilities, as deferred revenue, of approximately $ 14.4 million and $ 19.6 million,

respectively, which represent the following:

(1) $ 10.1 million and $ 14.7 million as of September 30, 2025 and December 31, 2024, respectively,

related to obligations on telehealth in-process monthly or multi-month contracts with customers, (2) $ 2.1 million and $ 2.4 million as

of September 30, 2025 and December 31, 2024, respectively, related to obligations for telehealth products which the customer has not

yet obtained control due to non-shipment of the product and (3) $ 2.2 million and $ 2.5 million as of September 30, 2025 and December 31,

2024, respectively, related to obligations on WorkSimpli in-process monthly or multi-month contracts with customers.

amount of revenue recognized during the nine months ended September 30, 2025, that was included in the deferred revenue balance as of

December 31, 2024, was $ 17.3 million.

The Company expects to recognize all of the deferred revenue related to future performance obligations

that are unsatisfied or partially unsatisfied as of September 30, 2025 as revenue by September 30, 2026.

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

As of March 31,

2026 and December 31, 2025, the Company has deferred revenue of approximately $ 12.0 million and $ 10.8 million, respectively, which have

been recorded as accrued contract liabilities and represent the following:

(1) $ 10.7 million and $ 9.2 million as of March 31, 2026 and

December 31, 2025, respectively, related to obligations on telehealth in-process monthly or yearly contracts with customers and (2) $ 1.3

million and $ 1.6 million as of March 31, 2026 and December 31, 2025, respectively, related to obligations for telehealth products which

the customer has not yet obtained control due to non-shipment of the product.

amount of revenue recognized during the three months ended March 31, 2026, that was included in the deferred revenue balance as of December

31, 2025, was $ 7.8 million.

The Company expects to recognize all of the deferred revenue related to future performance obligations that

are unsatisfied or partially unsatisfied as of March 31, 2026 as revenue by March 31, 2027.

following table summarizes deferred revenue activities for the periods presented:

SCHEDULE OF CONTRACT WITH CUSTOMER LIABILITY

Months Ended September 30,

Three Months Ended March 31,

Beginning of period

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( 50,849,157 )

( 183,783,756 )

( 141,438,159 )

End of period

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Operating lease right-of-use (“ROU”) assets are included in

right-of-use assets on the unaudited condensed consolidated balance sheets.

right-of-use assets on the unaudited consolidated balance sheets.

The current and long-term components of operating lease liabilities

are included in the current operating lease liabilities and noncurrent operating lease liabilities, respectively, on the unaudited condensed

consolidated balance sheets.

are included in the current operating lease liabilities and noncurrent operating lease liabilities, respectively, on the unaudited consolidated

balance sheets.

lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over

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options to extend or terminate the lease.

Lease expense for minimum lease payments is recognized on a straight-line basis over the lease

The Company only considers these options if the options to extend are reasonably certain of

being exercised and options to terminate are not reasonably certain not to exercise.

Lease expense for minimum lease payments is recognized

on a straight-line basis over the lease term.

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

Receivable, net

receivable principally consist of payments due from merchant processors for the settlement of credit card transactions with customers.

The merchant accounts receivable balance represents the charges processed by the merchants that have not yet been deposited with the

The unsettled merchant receivable amount normally represents processed sale transactions from the final one to three days of

the month, with collections being made by the Company within the first week of the following month.

Management determines the need, if

any, for an allowance for future credits to be granted to customers, by regularly evaluating aggregate customer refund activity, coupled

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

As of September

30, 2025 and December 31, 2024, the reserve for sales returns and allowances was approximately $ 739 thousand and $ 894 thousand, respectively.

For all periods presented, the sales returns and allowances were recorded in accrued expenses on the unaudited condensed consolidated

balance sheets.

Company’s accounts receivable balances are as follows for each of the periods presented:

SCHEDULE OF ACCOUNTS RECEIVABLE

Beginning of period

End of period

of September 30, 2025 and December 31, 2024, inventory primarily consisted of finished goods, raw materials and packaging related to

the Company’s OTC products included in the telehealth product 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.

receivable principally consist of amounts due from third-party merchant processors, who process our subscription revenues;

accounts balance receivable represents the charges processed by the merchants that have not yet been deposited with the Company.

unsettled merchant receivable amount normally represents processed sale transactions from the final one to three days of the month, with

collections being made by the Company within the first week of the following month.

Management determines the need, if any, for an allowance

for future credits to be granted to customers, by regularly evaluating aggregate customer refund activity, coupled with the consideration

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

As of March 31, 2026 and December

31, 2025, the reserve for sales returns and allowances was approximately $ 353 thousand.

For all periods presented, the sales returns

and allowances were recorded in accrued expenses on the unaudited consolidated balance sheets.

of March 31, 2026 and December 31, 2025, inventory primarily consisted of finished goods, raw materials and packaging related to the

Company’s OTC products included in the telehealth product 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

managed 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 September

30, 2025 and December 31, 2024, the Company recorded an inventory reserve of approximately $ 153 thousand and $ 263 thousand, respectively.

of September 30, 2025 and December 31, 2024, the Company’s inventory consisted of the following:

As of both March

31, 2026 and December 31, 2025, the Company recorded an inventory reserve of approximately $ 153 thousand.

of March 31, 2026 and December 31, 2025, the Company’s inventory consisted of the following:

SUMMARY OF INVENTORY

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Total inventory, net

is stated at cost, net of accumulated depreciation.

Depreciation expense is computed using the straight-line method over the estimated

useful lives of the related assets.

Estimated useful lives generally range from three to five years for computers, furniture, fixtures

and office equipment.

of March 31, 2026 and December 31, 2025, the Company has the following amounts related to depreciable assets:

SUMMARY OF DEPRECIABLE ASSETS

Furniture, fixtures and office equipment

Total equipment, at cost

Accumulated depreciation

( 1,997,284 )

( 1,707,826 )

Total equipment, net

expense was $ 289 thousand and $ 155 thousand for the three months ended March 31, 2026 and 2025, respectively.

of our vendors require deposits when a purchase order is placed for goods or fulfillment services.

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previously paid.

As of September 30, 2025 and December 31, 2024, the Company has approximately $ 371 thousand and $ 41 thousand, respectively,

As of March 31, 2026 and December 31, 2025, the Company has approximately $ 332 thousand and $ 320 thousand, respectively,

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

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of the product deposit.

As of September 30, 2025, the Company approximates its implicit purchase commitments to be $ 727 thousand, of

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

As of March 31, 2026, the Company approximates its implicit purchase commitments to be $ 592 thousand, of which

the majority are with two vendors that manufacture the Company’s finished goods inventory for its LifeMD brand.

Software Costs

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

As of September 30, 2025 and

December 31, 2024, the Company capitalized a net amount of $ 15.2 million and $ 13.8 million, respectively, related to internally developed

software costs which are amortized over the useful life and included in development costs on our unaudited condensed consolidated statement

of operations.

As of March 31, 2026 and December

31, 2025, the Company capitalized a net amount of $ 10.9 million and $ 10.6 million, respectively, related to internally developed software

costs which are amortized over the useful life and included in development costs on our unaudited consolidated statement of operations.

assets are comprised of:

(1) the ResumeBuild brand, (2) a customer relationship asset, (3) the Cleared Technologies, PBC (“Cleared”)

trade name, (4) Cleared developed technology, (5) a purchased license, (6) four purchased domain names and (7) the Optimal Human Health

MD (“OHHMD”) brand.

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 which typically

range from one year to ten years .

(1) a customer relationship asset, (2) the Cleared Technologies, PBC (“Cleared”) trade name, (3)

Cleared developed technology, (4) a purchased license, and (5) the Optimal Human Health MD (“OHHMD”) brand.

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 which typically range from one year to ten years .

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 September

As of March 31,

2026 and December 31, 2025, the Company determined that no events or changes in circumstances existed that would indicate any impairment

of its long-lived assets.

and Marketing Costs

and marketing costs are expensed as incurred and are included in selling and marketing expenses within the unaudited consolidated statement

of operations.

Advertising costs that relate to future advertising periods are recorded as prepaid expenses and amortized to selling

and marketing expenses over the period in which the related advertising occurs.

Advertising and marketing expenses were $ 29.9 million

and $ 22.3 million for the three months ended March 31, 2026 and 2025, respectively.

Company files corporate federal, state, and local tax returns.

WorkSimpli files a tax return in Puerto Rico.

WorkSimpli filed a tax return in Puerto Rico.

The Company records current

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determines the necessity for a valuation allowance.

ASC 740 also provides a recognition threshold and measurement attribute for the financial

statement recognition of a tax position taken or expected to be taken in a tax return.

Using this guidance, a company may recognize the

tax benefit from an uncertain tax position in its financial statements only if it is more likely-than-not (i.e., a likelihood of more

than 50%) that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.

The tax benefits recognized in the financial statements from such a position would be measured based on the largest benefit that has

a greater than 50% likelihood of being realized upon ultimate settlement.

The Company’s tax returns for all years since December

31, 2021, remain open to audit by all related taxing authorities.

The Company has net operating loss carryforwards for federal income

tax reporting purposes that may be applied against current and future taxable income.

All remaining net operating loss carryforwards

were generated after 2017 and can be carried forward indefinitely.

The Company has fully reserved the deferred tax asset resulting from

available net operating loss carryforwards.

In 2026 and 2025, the Company recorded a full valuation allowance for the deferred

tax assets based on the historical loss and the uncertainty regarding the ability to project future taxable income.

In future periods

if the Company is able to generate income, the Company may reduce or eliminate the valuation allowance.

ASC 740 also provides a recognition

threshold and measurement attribute for the financial statement recognition of a tax position taken or expected to be taken in a tax

Using this guidance, a company may recognize the tax benefit from an uncertain tax position in its financial statements only

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

authorities, based on the technical merits of the position.

No reserve for uncertain tax positions has been recorded.

The Company’s

policy is to recognize interest and/or penalties related to income tax matters in income tax expense.

The tax benefits recognized in

the financial statements from such a position would be measured based on the largest benefit that has a greater than 50% likelihood of

being realized upon ultimate settlement.

The Company’s tax returns for all years since December 31, 2022, remain open to audit

by all related taxing authorities.

Company follows the provisions of ASC 718, Share-Based Payment .

Under this guidance compensation cost generally is recognized

at fair value on the date of the grant and amortized over the respective vesting or service period.

The fair value of options at the

date of grant is estimated using the Black-Scholes option pricing model.

The expected option life is derived from assumed exercise rates

based upon historical exercise patterns and represents the period of time that options granted are expected to be outstanding.

volatility is based upon historical volatility of the Company’s common shares using daily price observations over an observation

period that approximates the expected life of the options.

Under this guidance compensation cost is recognized at fair value

on the date of the grant and amortized over the respective vesting or service period.

The fair value of options at the date of grant

is estimated using the Black-Scholes option pricing model.

The expected option life is derived from assumed exercise rates based upon

historical exercise patterns and represents the period of time that options granted are expected to be outstanding.

The expected volatility

is based upon historical volatility of the Company’s common shares using daily price observations over an observation period that

approximates the expected life of the options.

The risk-free interest rate approximates the U.S.

Treasury yield curve rate

in effect at the time of grant for periods similar to the expected option life.

Due to limited history of forfeitures, the Company has

elected to account for forfeitures as they occur.

portfolio of brands are included within two operating segments:

Telehealth and WorkSimpli.

We believe our current segments and brands

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

The Company’s Chief Executive Officer is the

chief operating decision maker (“CODM”) and is responsible for reviewing segment operating results to make determinations

about resources to be allocated and to assess performance.

Other factors, including type of business, revenue recognition and operating

results are reviewed in determining the Company’s operating segments.

Treasury yield curve rate in effect

at the time of grant for periods similar to the expected option life.

Due to limited history of forfeitures, the Company has elected

to account for forfeitures as they occur.

The fair value of restricted stock is calculated using the quoted market price on the date

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

WorkSimpli is classified as discontinued

operations for the three months period ended March 31, 2025 presented in these unaudited consolidated financial statements.

the Company’s portfolio of brands within continuing operations are managed as a single 1 operating segment on a consolidated basis.

The Company’s Chief Executive Officer is the chief operating decision maker (“CODM”) and is responsible for reviewing

segment operating results to make determinations about resources to be allocated and to assess performance.

Value of Financial Instruments

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that is significant to the fair value measurement.

fair value of the Company’s money market account is valued using Level 1 inputs.

The carrying value of the Company’s financial

instruments, including cash, accounts receivable, accounts payable, accrued expenses, and the face amount of notes payable and convertible

long-term debt approximate fair value for all periods presented.

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

approximate fair value for all periods presented.

The Company has no financial instruments that are valued using Level 3 inputs.

Concentrations

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manufacturers or pharmacies cease to perform adequately.

As of September 30, 2025, one third-party pharmacy supplied 75 % of the Company’s

As of March 31, 2026, three third-party pharmacies supplied 93 % of the Company’s

total fulfillment services.

As of December 31, 2024, three third-party pharmacies supplied 98 % of the Company’s total fulfillment

As of December 31, 2025, one third-party pharmacy supplied 71 % of the Company’s total fulfillment services.

Accounting Pronouncements

December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, Income Taxes (Topic 740):

to Income Tax Disclosures, to improve its income tax disclosure requirements.

Under ASU 2023-09, entities must annually:

specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative

The amendments in this update are effective for annual periods beginning after December 15, 2024.

The Company is currently

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

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

(Subtopic 220-40) to improve the disclosures about a public business entity’s expenses and provide more detailed information

about the types of expenses included in certain expense captions in the consolidated financial statements.

The amendments in this update

are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December

Early adoption is permitted and the amendments in this update should be applied either prospectively or retrospectively.

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

November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03,

Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) to improve the

disclosures about a public business entity’s expenses and provide more detailed information about the types of expenses included

in certain expense captions in the unaudited consolidated financial statements.

In January 2025, the FASB issued ASU 2025-01, which clarifies

the effective date of ASU 2024-03 for interim reporting periods.

The amendments in this update are effective for annual reporting periods

beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted and the

amendments in this update should be applied either prospectively or retrospectively.

The Company is currently evaluating the impact this

guidance will have on the disclosures in the unaudited consolidated financial statements.

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

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The Company is evaluating the impact this guidance will have on

the consolidated financial statements and related disclosures.

the unaudited 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

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

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

3 – REVISIONS TO PREVIOUSLY ISSUED FINANCIAL STATEMENTS

Company is revising its previously issued financial statements to correct for:

Company has revised its previously issued financial statements to correct for:

(1) errors identified associated with the calculation

of revenue, deferred revenue, accounts receivable and accrued expenses and (2) previously identified out-of-period adjustments.

The Company has evaluated these errors in

accordance with ASC 650-10-S99 and S55 (formerly Staff Accounting Bulletins (“SAB”) No.

108), Accounting

Changes and Error Corrections.

has evaluated these errors in accordance with ASC 650-10-S99 and S55 (formerly Staff Accounting Bulletins (“SAB”) No.

108), Accounting Changes and Error Corrections.

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

arrangements with the Company’s third-party pharmacy providers, which resulted in the misstatement of revenue in its

previously issued 2023, 2024 annual and interim financial statements and its previously issued 2025 interim financial statements.

Although the Company has determined such errors to be immaterial to its previously issued financial statements, the Company has

revised its previously issued financial statements to correct these errors.

The cumulative impact of such errors for periods prior

to 2024 of $ 106 thousand has been accounted for as an adjustment to retained earnings as of January 1, 2024.

addition, the Company previously identified various out-of-period amounts included in its 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.

Accordingly, the Company corrected these errors in its financial

statements in the periods that the errors were identified.

The Company is revising its previously issued financial statements to

correct for these errors in the appropriate prior periods.

immaterial errors consist of:

a $1.0 million understatement of an insurance receivable and corresponding liability related to a pending legal matter previously

recorded on a net basis, (2) a $1.0 million, $1.0 million and $1.5 million understatement of accounts receivable and corresponding

liability related to deferred costs associated with one of the Company’s net revenue arrangements with a third-party pharmacy

provider as of December 31, 2024, March 31, 2025 and June 30, 2025, respectively, (3) $1.5 million in voluntary disclosure sales tax expense that was overstated for the year ended December 31, 2024 and

understated by $1.5 million for the years ended December 31, 2023, 2022 and 2021 for the Company’s WorkSimpli operating

segment and (4) $0.5 million in WorkSimpli distributions that understated non-controlling interest during the three months ended

December 31, 2024 and overstated non-controlling interest for the first and second quarters of 2024.

The Company will effect such revisions to its consolidated

balance sheet as of December 31, 2024 and its consolidated statement of operations, consolidated statement of changes

in stockholders’ equity (deficit) and consolidated statement of cash flows for the year ended December 31, 2024 in connection

with the future filing of its 2025 Annual Report on Form 10-K, which contain this comparative period and will effect the revisions for

the three months ended March 31, 2025 and the three and six months ended June 30, 2025 in connection with the future filings of its Form

10-Q which contain these comparative periods.

following tables present the effect of the revisions on the financial statements previously issued as of and for the year ended

December 31, 2024, for the three months ended September 30, 2024, as of and for the nine months ended September 30, 2024, as of and

for the three months ended March 31, 2025, for the three months ended June 30, 2025 and as of and for the six months ended June 30,

2025 as a result of the error corrections described above:

arrangements with the Company’s third-party pharmacy providers, which resulted in the misstatement of revenue in its previously

issued 2023, 2024 annual and interim financial statements and its previously issued 2025 interim financial statements.

Although the Company

has determined such errors to be immaterial to its previously issued financial statements, the Company has revised its previously issued

financial statements to correct these errors.

The cumulative impact of such errors for periods prior to 2025 of $ 3.6 million has been

accounted for as an adjustment to retained earnings as of January 1, 2025.

addition, the Company previously identified various out-of-period amounts included in its 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.

Accordingly, the Company corrected these errors in its financial statements in the

periods that the errors were identified.

The Company revised its previously issued financial statements to correct for these errors in

the appropriate prior periods.

The immaterial errors consist of:

(1) a $1.0 million understatement of an insurance receivable and corresponding

liability related to a pending legal matter previously recorded on a net basis, (2) a $1.0 million, $1.0 million and $1.5 million understatement

of accounts receivable and corresponding liability related to deferred costs associated with one of the Company’s net revenue arrangements

with a third-party pharmacy provider as of December 31, 2024, March 31, 2025 and June 30, 2025, respectively, (3) $1.5 million in voluntary

disclosure sales tax expense that was overstated for the year ended December 31, 2024 and understated by $1.5 million for the years ended

December 31, 2023, 2022 and 2021 for the Company’s WorkSimpli business and (4) $0.5 million in WorkSimpli distributions that understated

non-controlling interest during the three months ended December 31, 2024 and overstated non-controlling interest for the first and second

quarters of 2024.

Company effected such revisions to its unaudited consolidated financial statements as of and for the three months ended March 31, 2025

in connection with this filing of our Quarterly Report on Form 10-Q.

following table presents the effect of the revisions on the unaudited consolidated financial statements previously issued as of and for

the three months ended March 31, 2025, as a result of the error corrections described above.

As discussed in Note 4—Discontinued

Operations, WorkSimpli has been treated as discontinued operations for all periods presented.

As a result, the “As Revised”

amounts reflect both the correction of errors and the recast for discontinued operations, consistent with the “As Reported”

amounts presented throughout these unaudited consolidated financial statements.

OF REVISION ON THE PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS

of and for the Year Ended December 31, 2024

Consolidated Balance

Accounts receivable

Other current assets

Total Current Assets

Accrued expenses

Deferred revenue

Total Current Liabilities

Total Liabilities

Accumulated deficit

$ 236,253,218

$ 239,850,931

Total LifeMD, Inc.

Stockholders’

Non-controlling interest

$ ( 1,440,133 )

$ ( 1,529,094 )

Total Stockholders’

Total Liabilities, Mezzanine

Equity and Stockholder’s Deficit

Consolidated Statement

of Operations:

As Previously

As of and for the Three Months Ended March 31, 2025

As Previously

Consolidated Statement of Operations:

Telehealth revenue, net

$ ( 1,568,582 )

$ ( 3,614,556 )

$ 154,824,075

Total revenues, net

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$ ( 1,568,582 )

$ 208,839,282

$ 188,385,359

$ ( 3,614,556 )

$ 184,770,803

General and administrative expenses

$ ( 1,482,913 )

Total expenses

$ 204,530,040

$ ( 1,482,913 )

$ 203,047,127

Operating loss

$ ( 16,144,681 )

$ ( 2,131,643 )

$ ( 18,276,324 )

Loss from operations before income taxes

$ ( 18,326,498 )

$ ( 2,131,643 )

$ ( 20,458,141 )

Operating income (loss)

$ ( 1,568,582 )

1 unchanged sentence

$ ( 1,568,582 )

Net income attributable to noncontrolling interests

Net loss attributable to LifeMD, Inc.

Net income (loss) attributable to LifeMD, Inc.

$ ( 1,568,582 )

1 unchanged sentence

$ ( 183,778 )

Net loss attributable to LifeMD, Inc.

Net income (loss) attributable to LifeMD, Inc.

common stockholders

$ ( 1,568,582 )

1 unchanged sentence

$ ( 960,341 )

Basic loss per share attributable to LifeMD,

Basic earnings (loss) per share attributable to LifeMD, Inc.

common stockholders

Diluted loss per share attributable to LifeMD,

Diluted earnings (loss) per share attributable to LifeMD, Inc.

common stockholders

3 unchanged sentences

$ 240,811,272

Non-controlling interest

$ 240,811,272

Non-controlling interest

$ ( 1,935,978 )

Consolidated Statement of Cash Flows:

$ ( 2,024,939 )

Consolidated Statement of Cash Flows:

$ ( 1,568,582 )

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$ ( 459,948 )

Other current assets

$ ( 1,737,721 )

$ ( 1,000,000 )

$ ( 2,737,721 )

Deferred revenue

Accrued expenses

Net cash provided by operating activities

the Three Months Ended September 30, 2024

Condensed Consolidated Statement of Operations:

Telehealth revenue, net

$ ( 120,863 )

Total revenues, net

$ ( 120,863 )

General and administrative expenses

$ ( 810,701 )

Total expenses

$ ( 810,701 )

Operating loss

$ ( 4,686,112 )

$ ( 3,996,274 )

Loss from operations before income taxes

$ ( 5,244,709 )

$ ( 4,554,871 )

$ ( 5,477,232 )

$ ( 4,787,394 )

Net loss attributable to non-controlling interests

$ ( 345,767 )

$ ( 129,472 )

Net loss attributable to LifeMD, Inc.

$ ( 5,131,465 )

$ ( 4,657,922 )

Net loss attributable to LifeMD, Inc.

$ ( 5,908,028 )

$ ( 5,434,485 )

Basic loss per share attributable to LifeMD,

common stockholders

Diluted loss per share attributable to LifeMD,

common stockholders

As of and for

the Nine Months Ended September 30, 2024

Condensed Consolidated Statement of Operations:

Telehealth revenue, net

$ 108,549,257

$ 109,687,054

Total revenues, net

$ 148,199,266

$ 149,337,063

$ 133,560,633

$ 134,698,430

accompanying notes to the unaudited consolidated financial statements reflect the impact of this revision.

4 – DISCONTINUED OPERATIONS

November 4, 2025, the Company entered into and simultaneously consummated the closing of a Stock Purchase Agreement (the “Purchase

Agreement”) by and among the Company, as a Seller and Seller Representative and the other seller parties thereto (collectively,

the “Sellers”), WorkSimpli and Lion Buyer, LLC, a Delaware limited liability company (the “Purchaser”), for the

sale by the Sellers of all of their right, title, and interest in WorkSimpli, representing 80 % of the outstanding units in WorkSimpli,

to the Purchaser (the “Transaction”).

aggregate purchase price for the units is based on an enterprise value of approximately $ 65.0 million, with 46.2 %, or $ 24.0 million,

paid at close as the base purchase price, subject to an adjustment holdback amount and post-closing adjustments for net working capital,

cash, closing date indebtedness, and Company transaction expenses, and 53.8 %, or $ 28.0 million, subject to future performance targets,

for an aggregate purchase consideration to the Sellers of up to $ 52.0 million.

The Company received 91.6% of the base purchase price,

or $22.0 million, based on its 73.3% ownership interest in the 80% units held that were sold by the Sellers.

The Company may receive

up to $25.6 million of the purchase price subject to future EBITDA and Adjusted EBITDA performance targets during a performance period

commencing on January 1, 2026 and ending on January 1, 2029.

The Company recorded a gain on sale of discontinued operations, net of tax,

of $ 21.3 million during the year ended December 31, 2025.

transaction represented a key milestone in the Company’s strategic transformation, further positioning the Company as a pure-play

healthcare company exclusively focused on expanding its virtual care and pharmacy offerings.

the period a component of an entity is classified as a discontinued operation, the results of operations for the periods presented are

reclassified into separate line items in the unaudited consolidated statements of operations and the unaudited consolidated statements

of cash flows.

For the three months ended March 31, 2025, the results of operations and cash flows of WorkSimpli are presented as discontinued

All amounts included in the notes to the unaudited consolidated financial statements relate to continuing operations unless

otherwise noted.

following table presents the financial results of the discontinued operations prior to the sale of WorkSimpli:

OF FINANCIAL RESULTS OF DISCONTINUED OPERATIONS

Three Months Ended

March 31, 2025

Worksimpli revenue, net

Cost of WorkSimpli revenue

Selling and marketing expenses

General and administrative expenses

$ ( 1,592,078 )

Other operating expenses

Development costs

Total expenses

$ 150,723,556

$ ( 1,592,078 )

$ 149,131,478

Operating loss

$ ( 17,162,923 )

$ ( 14,433,048 )

Loss from operations before income taxes

$ ( 18,730,666 )

$ ( 16,000,791 )

$ ( 18,963,189 )

$ ( 16,233,314 )

Net (loss) income attributable to noncontrolling

$ ( 187,729 )

Net loss attributable to LifeMD, Inc.

$ ( 18,775,460 )

$ ( 16,470,351 )

Net loss attributable to LifeMD, Inc.

$ ( 21,105,148 )

$ ( 18,800,039 )

Basic loss per share attributable to LifeMD,

common stockholders

Diluted loss per share attributable to LifeMD,

common stockholders

Condensed Consolidated Statement of Changes in Stockholders’ Equity (Deficit):

Accumulated deficit

$ 235,370,384

$ ( 1,234,680 )

$ 234,135,704

Non-controlling interest

$ ( 1,765,058 )

$ ( 1,388,096 )

Condensed Consolidated Statement

of Cash Flows:

$ ( 18,963,189 )

$ ( 16,233,314 )

Accounts receivable

$ ( 722,251 )

$ ( 4,450,283 )

$ ( 5,222,534 )

Other current assets

$ ( 1,303,495 )

$ ( 1,000,000 )

$ ( 2,303,495 )

Deferred revenue

Accrued expenses

Net cash provided by operating activities

Distributions to non-controlling interest

$ ( 108,000 )

$ ( 495,048 )

$ ( 603,048 )

Net cash used in financing activities

$ ( 2,688,722 )

$ ( 495,048 )

$ ( 3,183,770 )

As of and for

the Three Months Ended March 31, 2025

Condensed Consolidated Statement of Operations:

Telehealth revenue, net

$ ( 1,568,582 )

Total revenues, net

$ ( 1,568,582 )

Operating income

$ ( 1,568,582 )

Net income (loss) attributable to LifeMD,

$ ( 1,568,582 )

$ ( 183,778 )

Net income (loss) attributable to LifeMD, Inc.

common stockholders

$ ( 1,568,582 )

$ ( 960,341 )

Basic earnings (loss) per share attributable

to LifeMD, Inc.

common stockholders

Diluted earnings (loss) per share attributable

to LifeMD, Inc.

common stockholders

Condensed Consolidated Statement of Changes in Stockholders’ Equity (Deficit):

Accumulated deficit

$ 235,644,977

$ 240,811,272

Non-controlling interest

$ ( 1,935,978 )

$ ( 2,024,939 )

Condensed Consolidated Statement of Cash Flows:

$ ( 1,568,582 )

Accounts receivable

( 1,974,961 )

Deferred revenue

Net cash provided by operating activities

the Three Months Ended June 30, 2025

Condensed Consolidated Statement of Operations:

Telehealth revenue, net

Total revenues, net

Operating loss

$ ( 906,772 )

$ ( 451,562 )

$ ( 1,569,799 )

$ ( 1,114,589 )

Net loss attributable to LifeMD, Inc.

$ ( 2,074,874 )

$ ( 1,619,664 )

Net loss attributable to LifeMD, Inc.

$ ( 2,851,436 )

$ ( 2,396,226 )

Basic loss per share attributable to LifeMD,

common stockholders

Diluted loss per share attributable to LifeMD,

common stockholders

As of and for

the Six Months Ended June 30, 2025

Condensed Consolidated Statement of Operations:

Telehealth revenue, net

$ 101,020,153

$ ( 1,113,372 )

Total revenues, net

$ 127,915,941

$ ( 1,113,372 )

$ 126,802,569

$ 111,841,321

$ ( 1,113,372 )

$ 110,727,949

Operating income

$ ( 1,113,372 )

Operating income (loss)

( 1,113,372 )

Net income (loss)

$ ( 1,113,372 )

$ ( 766,522 )

Net loss attributable to LifeMD, Inc.

$ ( 690,070 )

$ ( 1,113,372 )

$ ( 1,803,442 )

Net loss attributable to LifeMD, Inc.

$ ( 2,243,195 )

$ ( 1,113,372 )

$ ( 3,356,567 )

Basic loss per share attributable to LifeMD,

common stockholders

Diluted loss per share attributable to LifeMD,

common stockholders

Condensed Consolidated Statement of Changes in Stockholders’ Equity (Deficit):

Accumulated deficit

$ 238,496,413

$ 243,207,498

Non-controlling interest

$ ( 2,164,934 )

$ ( 2,253,895 )

Condensed Consolidated Statement of Cash Flows:

Net income (loss)

$ ( 1,113,372 )

$ ( 766,522 )

Accounts receivable

Deferred revenue

$ ( 2,690,893 )

$ ( 2,723,205 )

Accrued expenses

$ ( 5,865,264 )

$ ( 5,365,264 )

Net cash provided by operating activities

accompanying notes to the unaudited condensed consolidated financial statements reflect the impact of this revision.

Operating income from discontinued operations

Interest expense

Net income from discontinued operations

Net income attributable to non-controlling interest of discontinued operations

Net income from discontinued operations attributable to LifeMD, Inc.

5 – ACQUISITIONS

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6 – INTANGIBLE ASSETS

of September 30, 2025 and December 31, 2024, the Company has the following amounts related to amortizable intangible assets:

of March 31, 2026 and December 31, 2025, the Company has the following amounts related to amortizable intangible assets:

SCHEDULE OF INTANGIBLE ASSETS

Amortizable intangible assets

Customer relationship asset

Cleared trade name

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Purchased licenses

Website domain names

intangible assets

accumulated amortization

Cleared trade name

$ ( 113,338 )

$ ( 106,671 )

intangible assets, net

aggregate amortization expense of the Company’s intangible assets for the three months ended September 30, 2025 and 2024 was $ 269

thousand and $ 246 thousand, respectively, and for the nine months ended September 30, 2025 and 2024 was $ 775 thousand and $ 738 thousand,

respectively.

Cleared developed technology

Purchased licenses

Accumulated amortization

$ ( 418,842 )

$ ( 386,925 )

Total net amortizable intangible assets

aggregate amortization expense of the Company’s intangible assets for the three months ended March 31, 2026 and 2025 was $ 32 thousand

and approximately $ 7 thousand, respectively.

7 – ACCRUED EXPENSES

of September 30, 2025 and December 31, 2024, the Company has the following amounts related to accrued expenses:

of March 31, 2026 and December 31, 2025, the Company has the following amounts related to accrued expenses:

SCHEDULE OF ACCRUED EXPENSES

6 unchanged sentences

Other accrued expenses

accrued expenses

7 – CONVERTIBLE LONG-TERM DEBT

Total accrued expenses

8 – INDEBTEDNESS

Capital Credit Facility

noted in Note 1 above, on March 21, 2023, the Company entered into the Avenue Credit Agreement and the Avenue Supplement.

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

the following:

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

26, 2023 in conjunction with the Avenue First Amendment and (3) $ 20 million of additional uncommitted term loans, collectively referred

to as 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 have a term of

The relative fair value of the Avenue Warrants upon closing was $ 873 thousand.

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 .

As of September 30, 2025, there is $ 0 in term loans remaining to be converted.

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.

March 21, 2023, the Company entered into the Avenue Credit Agreement and the Avenue Supplement.

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:

(1) $ 15 million

in term loans funded at closing, (2) $ 5 million of additional committed term loans received on September 26, 2023 in conjunction with

the Avenue First Amendment and (3) $ 20 million of additional uncommitted term loans, collectively referred to as 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 have a term of five years.

The relative fair value of

the Avenue Warrants upon closing was $ 873 thousand.

As of March 31, 2026, $ 540 thousand Avenue Warrants remain outstanding.

interest expense on long-term debt, inclusive of amortization of debt discounts, amounted to approximately $ 632 thousand for the three

months ended March 31, 2025.

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.

interest expense on convertible long-term debt, inclusive of amortization of debt discounts, amounted to approximately $ 241 thousand

and $ 681 thousand for the three months ended September 30, 2025 and 2024, respectively, and $ 1.5 million and $ 2.0 million for the nine

months ended September 30, 2025 and 2024, respectively.

8 – STOCKHOLDERS’ EQUITY (DEFICIT)

As of March 31, 2026, there is no outstanding balance on the Avenue Facility.

recorded a loss on debt extinguishment of approximately $ 1.2 million within its consolidated financial statements for the year ended

December 31, 2025.

Bank Credit Agreement

January 2, 2026, the Company entered into a Credit Agreement (the “Credit Agreement”) with Citizens Bank, N.A.

( “Citizens”),

which provides for a senior secured revolving credit facility in an aggregate principal amount of up to $ 30 million (the “Credit

The Credit Facility may be increased by up to an additional $ 20 million, subject to the terms and conditions set forth

in the Credit Agreement.

Credit Facility matures on January 2, 2029 and bears interest at a variable rate based on a benchmark interest rate selected by the Company,

plus an applicable margin.

The applicable margin ranges from 1.50 % to 2.25 % for borrowings based on Term SOFR and from 0.50 % to 1.25 %

for borrowings based on the Alternate Base Rate.

The Company is also required to pay a commitment fee ranging from 0.225 % to 0.30 % on

the unused portion of the Credit Facility, in each case depending on the Company’s Consolidated Leverage Ratio.

The Credit Facility

did not require an upfront fee.

Credit Agreement contains customary representations and warranties, affirmative and negative covenants, and events of default.

includes financial covenants requiring the Company to maintain (i) a Consolidated Leverage Ratio not to exceed 2.50

and (ii) a Consolidated Interest Coverage Ratio of at least

in each case measured as of the end of each fiscal quarter beginning with the quarter ending March 31, 2026.

As of March 31, 2026, the

Company was in compliance with the Consolidated Leverage Ratio covenant and was out of compliance with the Consolidated Interest Coverage

Ratio covenant contained in the Credit Facility, which is the ratio of (a) the Consolidated EBIT of the Company and its Subsidiaries

for the most recently completed four consecutive fiscal quarters ended March 31, 2026, to (b) Consolidated Interest Expense of the Company

and its Subsidiaries for the most recently completed four consecutive fiscal quarters ended March 31, 2026, as those capitalized terms

are defined in the Credit Agreement.

Compliance with the Consolidated Interest Coverage Ratio was

adversely impacted by an increase of approximately $ 7.6 million, or 34%, in selling and marketing costs during the three months

ended March 31, 2026, resulting from additional sales and marketing initiatives to drive the current and future periods’ sales

Among its remedies, Citizens could determine that there has been an Event of Default, deny access to funds under the Credit

Facility, and/or it could terminate the Credit Facility.

Discussions on the terms of an amendment to the Credit Agreement or waiver of

compliance with the covenant are ongoing.

As of March 31, 2026 and to date, the Company had not drawn any amounts under the Credit Facility.

9 – STOCKHOLDERS’ EQUITY

Company has authorized the issuance of up to 100,000,000 shares of common stock, $ 0.01 par value, and 5,000,000 shares of preferred stock,

6 unchanged sentences

stock under the ATM Sales Agreement.

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

the nine months ended September 30, 2025, the Company issued an aggregate of 131,531 shares of common stock related to the cashless exercise

the nine months ended September 30, 2025, the Company issued an aggregate of 390,115 shares of common stock related to the cashless exercise

the nine months ended September 30, 2025, the Company issued an aggregate of 100,000 shares of common stock related to the exercise of

warrants for total proceeds of approximately $ 465 thousand.

the nine months ended September 30, 2025, the Company issued an aggregate of 1,250 shares of common stock related to the exercise of

options for total proceeds of approximately $ 6 thousand.

the nine months ended September 30, 2025, the Company issued an aggregate of 2,284,515 shares of common stock for service, including

vested restricted stock.

the nine months ended September 30, 2025, the Company issued an aggregate of 50,000 shares of common stock related to the OHHMD APA.

the nine months ended September 30, 2025, the Company issued an aggregate of 762,990 shares of common stock related to the ATM

Sales Agreement and net proceeds received were $ 8.7 million .

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.

As of March 31, 2026, the Company had $ 44.6 million available under the ATM Sales Agreement.

the three months ended March 31, 2026, the Company issued an aggregate of 53,000 shares of common stock related to the exercise of options

for total proceeds of approximately $ 81 thousand.

the three months ended March 31, 2026, the Company issued an aggregate of 819,691 shares of common stock for service, including vested

restricted stock units (“RSUs”).

Non-controlling

income attributed to non-controlling interest amounted to approximately $ 249 thousand for the three months ended September 30, 2025 compared

to net loss of $ 129 thousand for the three months ended September 30, 2024.

During the three months ended September 30, 2025 and 2024,

the Company paid distributions to non-controlling interest holders of approximately $ 450 thousand and $ 36 thousand, respectively.

income attributed to the non-controlling interest amounted to $ 1.3 million and $ 237 thousand for the nine months ended September 30,

2025 and 2024, respectively.

During the nine months ended September 30, 2025 and 2024, the Company paid distributions to non-controlling

shareholders of $ 762 thousand and $ 603 thousand, respectively.

Interest of Discontinued Operations

income attributed to non-controlling interest of discontinued operations amounted to approximately $ 532 thousand for the three months

ended March 31, 2025.

During the three months ended March 31, 2025, the Company paid distributions to non-controlling interest holders

of discontinued operations of approximately $ 36 thousand.

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

3 unchanged sentences

The dividends are included in the Company’s results

of operations for the three and nine months ended September 30, 2025 and 2024.

Dividends declared and paid on the Series A Preferred

Stock during the nine months ended September 30, 2025 and 2024 are as follows:

SCHEDULE OF DIVIDENDS DECLARED AND PAID ON THE SERIES A PREFERRED STOCK

of operations for the three months ended March 31, 2026 and 2025.

Dividends declared and paid on the Series A Preferred Stock during

the three months ended March 31, 2026 and 2025 are as follows:

OF DIVIDENDS DECLARED AND PAID ON THE SERIES A PREFERRED STOCK

Declaration Date

March 24, 2026

April 3, 2026

April 15, 2026

March 25, 2025

April 4, 2025

April 15, 2025

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

7 unchanged sentences

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

restricted stock, and restricted stock units.

restricted stock awards (“RSAs”), and restricted stock units (“RSUs”).

June 24, 2021, at the Annual Meeting of Stockholders, the stockholders of the Company approved the amendment and restatement to the 2020

8 unchanged sentences

under the Amended 2020 Plan by 3,000,000 shares.

of September 30, 2025, the Amended 2020 Plan provided for the issuance of up to 8,250,000 shares of Common Stock.

of March 31, 2026, the Amended 2020 Plan provided for the issuance of up to 8,400,000 shares of Common Stock.

Remaining authorization

under the Amended 2020 Plan was 867,511 shares as of September 30, 2025.

under the Amended 2020 Plan was 996,818 shares as of March 31, 2026.

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

4 unchanged sentences

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

following is a summary of outstanding options activity under our Amended 2020 Plan for the nine months ended September 30, 2025:

SCHEDULE OF OPTION ACTIVITY

Balance, December 31, 2024

The following

is a summary of outstanding options activity under our Amended 2020 Plan for the three months ended March 31, 2026:

OF OPTION ACTIVITY

Exercise Price

Balance at December 31, 2025

$ 1.84 – 13.74

Cancelled/Forfeited/Expired

Balance at September

Balance at March 31, 2026

$ 1.89 – 13.74

Exercisable at December 31, 2025

Exercisable at September 30, 2025

compensation expense for the Amended 2020 Plan options above was approximately $ 1 thousand and $ 109 thousand for the three months ended

September 30, 2025 and 2024, respectively, with no unamortized expense remaining as of September 30, 2025.

Total compensation expense

under the Amended 2020 Plan options above was approximately $ 29 thousand and $ 1.2 million for the nine months ended September 30, 2025

and 2024, respectively.

During the nine months ended September 30, 2025, 30,500 options were exercised on a cashless basis, which resulted

in 17,613 shares issued, and 1,250 options were exercised for cash.

As of September 30, 2025, aggregate intrinsic value of vested service-based

options outstanding was $ 421 thousand.

$ 1.84 – 13.74

Exercisable at March 31, 2026

$ 1.89 – 13.74

compensation expense for the Amended 2020 Plan options above was approximately $ 0 and $ 7 thousand for the three months ended March 31,

2026 and 2025, respectively, with no unamortized expense remaining as of March 31, 2026.

During the three months ended March 31, 2026,

3,000 options were exercised and total proceeds received were approximately $ 6 thousand.

As of March 31, 2026, aggregate intrinsic value

of vested service-based options outstanding was $ 67 thousand.

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

the nine months ended September 30, 2025:

SCHEDULE OF OPTION ACTIVITY

Balance, December 31, 2024

the three months ended March 31, 2026:

OF OPTION ACTIVITY

Exercise Price

Balance at December 31, 2025

$ 1.00 – 11.98

Cancelled/Forfeited/Expired

Balance at September 30, 2025

Balance at March 31, 2026

$ 1.00 – 11.56

Exercisable December 31, 2025

Exercisable at September 30, 2025

total fair value of the options granted during the nine months ended September 30, 2025 was $ 163 thousand, which was determined using

the Black-Scholes Pricing Model with the following assumptions:

dividend yield of 0 %, expected term of 5 years, volatility of 108.5 %,

and risk-free rate of 4.34 %.

Total compensation expense under the above service-based option plan was $ 0 and $ 25 thousand for the three

months ended September 30, 2025 and 2024, respectively, with no unamortized expense remaining as of September 30, 2025.

Total compensation

expense under the above service-based option plan was $ 145 thousand and $ 266 thousand for the nine months ended September 30, 2025 and

2024, respectively.

During the nine months ended September 30, 2025, 197,000 options were exercised on a cashless basis, which resulted

in 113,918 shares issued.

As of September 30, 2025, aggregate intrinsic value of vested service-based options outstanding was $ 1.3 million.

following is a summary of outstanding performance-based options activity for the nine months ended September 30, 2025:

SCHEDULE OF OPTION ACTIVITY

$ 1.00 – 11.98

Exercisable at March 31, 2026

$ 1.00 – 11.56

compensation expense under the above service-based option plan was $ 0 and $ 145 thousand for the three months ended March 31, 2026 and

2025, respectively, with no unamortized expense remaining as of March 31, 2026.

As of March 31, 2026, aggregate intrinsic value of vested

service-based options outstanding was $ 430 thousand.

following is a summary of outstanding performance-based options activity for the three months ended March 31, 2026:

OF OPTION ACTIVITY

Exercise Price

Balance at December 31, 2025

Cancelled/Forfeited/Expired

Balance at September 30, 2025

$ 1.25 – 1.75

Balance at March 31, 2026

Exercisable December 31, 2025

Exercisable at September 30, 2025

compensation expense under the above performance-based options plan was $ 535 thousand for the three and nine months ended September 30,

No 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, 2025, aggregate intrinsic value of vested performance

options outstanding was $ 416 thousand.

$ 1.25 – 1.75

Exercisable at March 31, 2026

compensation expense under the above performance-based options plan was $ 0 for both the three months ended March 31, 2026 and 2025.

the three months ended March 31, 2026, 50,000 options were exercised and total proceeds received were approximately $ 75 thousand.

of March 31, 2026, aggregate intrinsic value of vested performance options outstanding was $ 56 thousand.

and RSAs (under our Amended 2020 Plan)

following is a summary of unvested RSUs and RSAs activity under our Amended 2020 Plan for the nine months ended September 30, 2025:

SCHEDULE OF RESTRICTED STOCK UNIT ACTIVITY

following is a summary of unvested RSUs and RSAs activity under our Amended 2020 Plan for the three months ended March 31, 2026:

OF RESTRICTED STOCK UNIT ACTIVITY

RSUs and RSAs

Number of Shares

Balance at December 31, 2025

( 1,890,277 )

Cancelled/Forfeited

Balance at September

total fair value of the 1,493,000 RSUs and RSAs granted was $ 10.5 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 approximately $ 2.7 million

and $ 2.1 million for the three months ended September 30, 2025 and 2024, respectively, with unamortized expense remaining of approximately

$ 9.6 million as of September 30, 2025.

Total compensation expense under the Amended 2020 Plan RSUs and RSAs above was $ 7.1 million and

$ 6.9 million for the nine months ended September 30, 2025 and 2024, respectively.

During the nine months ended September 30, 2025, 2,022,015

RSUs and RSAs were issued, which included 1,745,333 RSUs and RSAs that vested during the nine months ended September 30, 2025, and 276,682

RSUs and RSAs that vested previously.

Balance at March 31, 2026

total fair value of the

388,000 RSUs and RSAs granted was approximately $ 1.5

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 approximately $ 1.4

million and $ 2.4

million for the three months ended March 31, 2026 and 2025, respectively, with unamortized expense remaining of approximately $ 4.9

million as of March 31, 2026.

During the three months ended March 31, 2026, a total of 819,691

shares of common stock were issued in connection with RSUs and RSAs, including:

shares issued upon vesting of awards during the current period, and (ii) 253,691

shares issued upon settlement of awards that had vested in prior periods.

and RSAs (outside of our Amended 2020 Plan)

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

SCHEDULE OF RESTRICTED STOCK UNIT ACTIVITY

following is a summary of unvested RSUs and RSAs activity (outside of our Amended 2020 Plan) for the three months ended March 31, 2026:

OF RESTRICTED STOCK UNIT ACTIVITY

RSUs and RSAs

Number of Shares

Balance at December 31, 2025

Balance at September

compensation expense for RSUs and RSAs outside of the Amended 2020 Plan was $ 0 and $ 202 thousand for the three months ended September

30, 2025 and 2024, respectively, with no unamortized expense remaining as of September 30, 2025.

Total compensation expense for RSUs

and RSAs outside of the Amended 2020 Plan was $ 0 and $ 712 thousand for the nine months ended September 30, 2025 and 2024, respectively.

During the nine months ended September 30, 2025, 262,500 RSUs and RSAs were issued, which included 200,000 RSUs and RSAs that vested

during the nine months ended September 30, 2025 and 62,500 RSUs and RSAs that vested previously.

following is a summary of outstanding and exercisable warrants activity during the nine months ended September 30, 2025:

SCHEDULE OF WARRANT OUTSTANDING AND EXERCISABLE

Balance at March 31, 2026

compensation expense for RSUs and RSAs outside of the Amended 2020 Plan was $ 0 for both the three months ended March 31, 2026 and 2025,

with no unamortized expense remaining as of March 31, 2026.

following is a summary of outstanding and exercisable warrants activity during the three months ended March 31, 2026:

WARRANT OUTSTANDING AND EXERCISABLE

Exercise Price

at December 31, 2024

Exercise Price

Balance at December 31, 2025

$ 1.24 – 12.00

Cancelled/Forfeited/Expired

at September 30, 2025

December 31, 2024

September 30, 2025

compensation expense on the above warrants for services was $ 0 for both the three and nine months ended September 30, 2025 and 2024,

with no unamortized expense remaining as of September 30, 2025.

During the nine months ended September 30, 2025, 437,984 warrants were

exercised on a cashless basis, which resulted in 390,115 shares issued and 100,000 warrants were exercised for cash.

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

warrants, RSUs and RSAs amounted to approximately $ 3.2 million and $ 2.4 million for the three months ended September 30, 2025 and 2024,

respectively, and $ 7.8 million and $ 9.1 million for the nine months ended September 30, 2025 and 2024, respectively.

Such amounts are

included in general and administrative expenses in the unaudited condensed consolidated statement of operations.

Unamortized expense

remaining related to service-based stock options, performance-based stock options, warrants, RSUs and RSAs was approximately $ 9.6 million

as of September 30, 2025, which is expected to be recognized through 2028.

Balance at March 31, 2026

$ 1.24 – 12.00

Exercisable December 31, 2025

$ 1.24 – 12.00

Exercisable March 31, 2026

$ 1.24 – 12.00

compensation expense on the above warrants for services was $ 0 for both the three months ended March 31, 2026 and 2025, with no unamortized

expense remaining as of March 31, 2026.

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 $ 1.4 million and $ 2.5 million for the three months ended March 31, 2026 and 2025, respectively.

Such amounts are included in general and administrative expenses in the unaudited consolidated statements of operations.

expense remaining related to RSUs was $ 4.9 million as of March 31, 2026, which is expected to be recognized through 2029.

10 – EARNINGS (LOSS) PER SHARE

1 unchanged sentence

period presented.

Shares of unissued vested restricted stock units (“RSUs”) and restricted stock awards (“RSAs”)

are included in our calculation of basic weighted average common shares outstanding.

Unvested RSUs and RSAs, convertible securities,

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

Potential common stock equivalents

are excluded from diluted earnings per share when the effects would be antidilutive.

Shares of unissued vested RSUs and RSAs are included in our calculation of basic weighted average common shares outstanding.

Unvested RSUs and RSAs, convertible securities, warrants and options to purchase common stock are included as common stock equivalents

only when dilutive.

Potential common stock equivalents are excluded from diluted earnings per share when the effects would be antidilutive.

Company follows the provisions of ASC 260, Diluted Earnings per Share .

8 unchanged sentences

EPS calculation for the entire period being presented.

loss per share is the same as diluted net loss per share attributable to common stockholders for the three and nine months ended September

following table reconciles net income attributable to LifeMD, Inc.

common stockholders from continuing operations and discontinued operations

to basic and diluted earnings per share:

OF BASIC AND DILUTED EARNINGS PER SHARE

Net loss from continuing operations

$ ( 8,872,596 )

$ ( 1,645,355 )

Preferred stock dividends

Net loss from continuing operations attributable to LifeMD, Inc.

common stockholders

( 9,649,159 )

( 2,421,918 )

Net income from discontinued operations

Net income attributable to noncontrolling interests of discontinued operations

Net income from discontinued operations attributable to LifeMD, Inc.

common stockholders

Net loss attributable to LifeMD, Inc.

common stockholders

$ ( 9,649,159 )

$ ( 960,341 )

loss per share is the same as diluted net loss per share attributable to common stockholders for the three months ended March 31, 2026

and 2025, because the inclusion of potential shares of common stock would have been anti-dilutive.

The following table discloses

the securities that were not included in the computation of diluted net earnings (loss) per share as their inclusion would have been

anti-dilutive:

SCHEDULE OF POTENTIALLY DILUTIVE SECURITIES

Months Ended September 30,

The following table discloses the

securities that were not included in the computation of diluted net earnings (loss) per share as their inclusion would have been anti-dilutive:

OF POTENTIALLY DILUTIVE SECURITIES

Three Months Ended March 31,

RSUs and RSAs

Stock options

Convertible long-term

Convertible long-term debt

Company leases office spaces domestically under operating leases including:

4 unchanged sentences

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

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, 2025:

OF OPERATING RIGHT OF USE OF ASSETS

following is a summary of the Company’s operating right-of-use assets and operating lease liabilities as of March 31, 2026:

SCHEDULE OF OPERATING RIGHT OF USE OF ASSETS

Right-of-use assets

2 unchanged sentences

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 September 30, 2025:

liabilities recognized on the unaudited consolidated balance sheet as of March 31, 2026:

OF MATURITY OF OPERATING LEASE LIABILITIES

Fiscal year 2025

Remaining portion of fiscal year 2026

Fiscal year 2027

4 unchanged sentences

( 3,552,354 )

Present value of operating

lease liabilities

lease expenses were approximately $ 415 thousand and $ 289 thousand for the three months ended September 30, 2025 and 2024, respectively,

and $ 1.2 million and $ 747 thousand for the nine months ended September 30, 2025 and 2024, 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 approximately $ 372 thousand and $ 383 thousand for the three months ended March 31, 2026 and 2025, respectively, and

were included in other operating expenses in our unaudited 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

OF CASH FLOW AND BALANCE SHEET INFORMATION RELATED OF OPERATING LEASE LIABILITIES

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

Weighted average remaining lease term in years

Weighted average discount rate

Additionally,

the Company utilizes office space in Puerto Rico on a month-to-month basis incurring rental expense of approximately $ 3 thousand per

12 - COMMITMENTS AND CONTINGENCIES

3 unchanged sentences

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

As of September 30, 2025, the Company approximates

As of March 31, 2026, the Company approximates

its implicit purchase commitments to be $ 592 thousand.

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

As of September 30, 2025, other than

As of March 31, 2026, other than

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

2 unchanged sentences

District of New York (“EDNY”) against the Company, the Company’s Chief Executive Officer, Mr.

Schreiber, and the

Company’s Chief Financial Officer, Mr.

Schreiber, and the Company’s

former Chief Financial Officer, Mr.

Benathen, (collectively, the “Defendants”), captioned Johnston v.

LifeMD, Inc., et al.

LifeMD, Inc., et

25-cv-04761, alleging:

(i) violations of Section 10(b) of the Securities Exchange Act of 1934, as

amended (the “Exchange Act”) and Rule 10b-5 promulgated thereunder by the Defendants for making false and misleading

and (ii) violations of Section 20(a) of the Exchange Act by the individual officer defendants as alleged control

On October 24, 2025, the EDNY granted the joint motion to transfer the class action complaint from the EDNY to the

United States District Court for the Southern District of New York (“SDNY”).

On October 27, 2025, the plaintiffs filed motions

to be appointed lead plaintiff.

The Company intends to defend vigorously against the class action.

(i) violations of Section 10(b) of the Securities Exchange Act of 1934, as amended (the “Exchange

Act”) and Rule 10b-5 promulgated thereunder by the Defendants for making false and misleading statements;

and (ii) violations of

Section 20(a) of the Exchange Act by the individual officer defendants as alleged control persons.

On October 24, 2025, the EDNY granted

the joint motion to transfer the class action complaint from the EDNY to the United States District Court for the Southern District of

New York (“SDNY”).

On November 24, 2025, the SDNY appointed a Lead Plaintiff.

On January 30, 2026, the Lead Plaintiff filed

an amended complaint.

Defendants filed a motion to dismiss the amended complaint on March 27, 2026;

Lead Plaintiff’s opposition

is due on May 15, 2026;

and Defendants’ reply brief is due on June 12, 2026.

the months following filing of the class action complaint, four putative shareholder derivative complaints were filed, captioned:

(i) Greenberg v.

Schreiber et al ., Case No.

1 unchanged sentence

Schreiber et al ., Case No.

(EDNY), (iii) Shibata v.

25-cv-5197 (EDNY),

(iii) Shibata v.

Schreiber et al.

2 unchanged sentences

125-cv-09343 (SDNY).

These complaints alleged violations of Section 14(a) of the

Exchange Act, breach of fiduciary duties, aiding and abetting breaches of fiduciary duties, unjust enrichment, abuse of control,

gross mismanagement, waste of corporate assets, and violations of Exchange Act Sections 10(b) and 21D by the Company’s

officers and directors.

The shareholder derivative complaints are based primarily on the same alleged conduct underlying the class

action complaint described above, and seek damages in an unspecified amount and other relief.

While the Company does not believe

that any of the class action or shareholder derivative complaints will have a material adverse effect on the Company’s

business, results of operations and financial condition, failure to obtain a favorable resolution of these complaints could have

such a material adverse effect.

August 23, 2023, a purported putative class action complaint captioned Marden v.

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

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

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

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

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

On November 1, 2024, the plaintiffs filed a notice of voluntary dismissal of the

Southern District of New York case and on November 25, 2024, the plaintiffs refiled the case via a new complaint captioned W.M.F.

Matthew Marden v.

LifeMD, Inc., Case No.

A-24-906800-C, in the District Court of Clark County, Nevada.

On June 4, 2025, the Court approved

a preliminary class action settlement.

On September 30, 2025, the final approval hearing for the settlement was held, and the settlement

was formally approved by the Court, certifying the class for settlement purposes and dismissing the case with prejudice.

recorded approximately $ 1.1 million for the estimated settlement liability, which is reflected in accrued expenses within the Company’s

unaudited condensed consolidated financial statements as of September 30, 2025.

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

asserted an income tax deficiency of approximately $ 1.9 million for the Company’s tax year ending December 31, 2019.

timely filed a petition in the United States Tax Court disputing all of the proposed tax deficiency.

The case was subsequently transferred

to the Appeals Division of the IRS.

Upon review of the amended return, IRS Appeals agreed to accept the amended return as filed.

1, 2025, the United States Tax Court issued a decision that there was no deficiency in federal income tax due for the tax year ending

December 31, 2019.

All of the issues in the case were resolved in the Company’s favor.

These complaints alleged violations of Section 14(a) of the Exchange Act, breach of fiduciary duties, aiding and abetting breaches of

fiduciary duties, unjust enrichment, abuse of control, gross mismanagement, waste of corporate assets, and violations of Exchange Act

Sections 10(b) and 21D by the Company’s officers and directors.

The shareholder derivative complaints are based primarily on the

same alleged conduct underlying the class action complaint described above, and seek damages in an unspecified amount and other relief.

On December 11, 2025, the three derivative actions filed in the EDNY were consolidated and stayed pending a ruling on the motion to dismiss

in the securities class action, including any related appeals.

On December 17, 2025, the derivative action filed in the SDNY was stayed

on the same terms.

While the Company does not believe that any of the class action or shareholder derivative complaints will have a material

adverse effect on the Company’s business, results of operations and financial condition, failure to obtain a favorable resolution

of these complaints could have such a material adverse effect.

13 – RELATED PARTY TRANSACTIONS

the nine months ended September 30, 2025 and 2024, 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 approximately $ 1.1 million

and $ 838 thousand

during the three months ended September 30, 2025 and 2024, respectively, and $ 2.9

million and $ 2.7

million during the nine months ended September 30, 2025 and 2024, respectively, for these services.

The Company had no

outstanding payables to CloudBoson as of September 30, 2025 and owed CloudBoson $ 56

thousand as of December 31, 2024.

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

a large international law firm, for which an immediate family member of Robert Jindal, one of the Company’s former directors, is

the Company’s relationship partner, to provide legal services.

King & Spalding ceased to be a related party of the Company

on December 18, 2024.

The Company paid King & Spalding a total of approximately $ 140

thousand during the three months ended September 30, 2024,

thousand during the nine months ended September 30, 2024 for these services.

The Company had no

outstanding payables to King & Spalding as of December 31, 2024.

the three months ended March 31, 2025, the Company utilized CloudBoson Technologies Pvt.

(“CloudBoson”), formerly LegalSubmit

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

CloudBoson ceased to be a related party of the Company on November 4, 2025.

The Company paid CloudBoson a total of approximately

$ 878 thousand during the three months ended March 31, 2025 for these services.

The Company had no outstanding payables to CloudBoson

as of November 4, 2025.

May 30, 2023, Will Febbo, a member of the Board, entered into a consulting services agreement with the Company, pursuant to which he

provides certain investor relations and strategic business development services, in consideration for 375,000 restricted shares of the

Company’s common stock, which vested in quarterly installments from August 30, 2023 through November 30, 2024.

The Company issued

62,500 restricted shares of common stock, with a fair value of $ 131 thousand, related to this agreement during the nine months ended

September 30, 2025.

provides certain investor relations and strategic business development services, in consideration for 375,000 RSUs, which vested in quarterly

installments from August 30, 2023 through November 30, 2024.

The Company issued 62,500 RSUs, with a fair value of $ 131 thousand, related

to this agreement during the three months ended March 31, 2025.

The Company issued no RSUs related to this agreement during the three

months ended March 31, 2026.

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

Bhatia provided certain investor relations and strategic business development services, in consideration for 225,000 restricted

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

Company issued 56,250 restricted shares of common stock, with a fair value of $ 168 thousand, related to this agreement during the nine

months ended September 30, 2025.

Bhatia provided certain investor relations and strategic business development services, in consideration for 225,000 RSUs,

which vested in six-month installments from June 14, 2023 through December 31, 2024.

The Company issued 56,250 RSUs, with a fair value

of $ 168 thousand, related to this agreement during the three months ended March 31, 2025.

On January 24, 2025, Mr.

Bhatia entered into another consulting services agreement with the Company,

pursuant to which Mr.

Bhatia provides certain strategic business development services, in consideration for 100,000 restricted shares

of the Company’s common stock, of which 50,000 restricted shares vested on the execution of the agreement and 50,000 restricted

shares will vest on the one-year anniversary of the agreement.

The Company issued 50,000 restricted shares of common stock, with a fair

value of $ 257 thousand, related to this agreement during the nine months ended September 30, 2025.

Bhatia entered into

another consulting services agreement with the Company, pursuant to which Mr.

Bhatia provides certain strategic business development

services, in consideration for 100,000 RSUs, of which 50,000 RSUs vested on the execution of the agreement and 50,000 RSUs will vest

on the one-year anniversary of the agreement.

The Company issued 50,000 RSUs, with a fair value of $ 257 thousand, related to this agreement

during the three months ended March 31, 2026.

May 1, 2024, Brian Schreiber, Logistics & Fulfillment Advisor, and a relative of the Company’s Chief Executive Officer, entered

1 unchanged sentence

Schreiber’s compensation package was adjusted to reflect the increased scope of his responsibilities.

The compensation adjustment, approved by the Compensation Committee of the Board, includes an annual base salary increase to $ 240 thousand.

During the nine months ended September 30, 2025 and 2024, the Company paid Mr.

Schreiber approximately $ 175 thousand and $ 163 thousand,

respectively, in connection with his employment.

The compensation adjustment, approved by the Compensation Committee of the Board, included an annual base salary increase to $ 240 thousand.

During the three months ended March 31, 2026 and 2025, the Company paid Mr.

Schreiber approximately $ 63 thousand and $ 55 thousand, respectively,

in connection with his employment.

July 15, 2025, the Company entered into an amendment to the bonus agreement with Mr.

6 unchanged sentences

The Company recorded stock-based compensation expense related to this amendment of $ 535 thousand

during the nine months ended September 30, 2025.

during the year ended December 31, 2025, with no additional expense recognized during the three months ended March 31, 2026.

14 – INCOME TAXES

to the Company’s losses and full valuation allowance, a discrete calculation was prepared for the nine month period ended September

current income tax expense for the nine months ended September 30, 2025 was approximately $ 169

For the nine months ended September 30, 2024, the Company’s income tax expense was approximately $ 233

tax assets and liabilities are recognized for temporary differences between the financial reporting basis and tax basis of assets and

Management evaluates the realizability of deferred tax assets and maintains a valuation allowance as appropriate.

have been no significant changes in uncertain tax positions during the three and nine months ended September 30, 2025.

July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted in the United States.

The OBBBA includes several changes

to federal tax law that generally allow for more favorable deductibility of certain business expenses beginning in 2025, including the

restoration of immediate expensing of domestic R&D expenditures, reinstatement of 100% bonus depreciation, and more favorable rules

for determining the limitation on business interest expense.

The OBBBA also includes certain changes to the US taxation of foreign activity.

The Company has evaluated the provisions of the OBBBA and determined that the enactment of the legislation is not expected to have a material impact

on its income tax provision, net deferred tax assets or liabilities, or estimated annual effective tax rate for the three and nine months

ended September 30, 2025.

14 – SEGMENT DATA

portfolio of brands are included within two operating segments:

Telehealth and WorkSimpli.

Our CODM is our Chief Executive Officer.

CODM uses segment operating income or loss to determine segment profitability in order to assess performance and allocate resources for

the Company’s operating segments based on monitoring of budgeted versus actual results.

segment data for the three and nine months ended September 30, 2025 and 2024 is as follows:

SCHEDULE OF RELEVANT SEGMENT DATA

September 30,

$ 147,186,714

$ 109,687,054

Cost of revenue

Significant Segment Expenses:

Selling and marketing expenses

Payroll expenses

Merchant processing fees

Other general and administrative

segment items (1)

Segment operating loss

$ ( 3,043,374 )

$ ( 3,745,522 )

$ ( 6,571,978 )

$ ( 15,557,309 )

Cost of revenue

Company incurred a pre-tax loss for the three months ended March 31, 2026.

As such, the Company recorded no provision for income taxes.

Additionally, the Company expects to incur a pre-tax loss for the year ended December 31, 2026.

The Company maintains a full valuation

allowance against its deferred tax assets, as it is not more-likely-than-not that such assets will be realized.

Accordingly, no current

or deferred income tax expense or benefit was recorded for the three months ended March 31, 2026.

Company evaluates the realizability of its deferred tax assets on a quarterly basis.

Management assessed the need for a valuation allowance

as of March 31, 2026 and concluded that a full valuation allowance continues to be required based on cumulative losses and the forecasted

loss for the year ended December 31, 2026.

There were no discrete income tax items recorded during the three months ended March 31, 2026.

15 – SEGMENTS

Company’s portfolio of brands within continuing operations are managed as asingle 1 operating segment on a consolidated basis.

CODM is our Chief Executive Officer.

The CODM uses net income or loss to determine segment profitability in order to assess performance

and allocate resources.

segment data for the three months ended March 31, 2026 and 2025 is as follows:

OF RELEVANT SEGMENT DATA

Three Months Ended March 31,

Telehealth revenue, net

Significant Segment Expenses:

Cost of telehealth revenue

Selling and marketing expenses

1 unchanged sentence

Merchant processing fees

Other general and administrative

segment items (1)

Segment operating income

$ ( 250,752 )

$ 186,975,039

$ 149,337,063

Other general and administrative expenses

Other segment items (1)

Segment operating loss

1 unchanged sentence

( 1,181,717 )

$ ( 1,446,434 )

$ ( 14,433,048 )

Interest expense, net

( 1,551,758 )

( 1,567,743 )

Loss on debt extinguishment

( 1,155,851 )

Interest income (expense), net

Loss from continuing operations before income taxes

( 8,872,596 )

( 1,645,355 )

Income tax provision

Net loss from continuing operations

$ ( 8,872,596 )

$ ( 1,645,355 )

segment items include stock-based compensation and depreciation and amortization for our Telehealth segment and depreciation and

amortization for our WorkSimpli segment.

expenditures for purchases of capitalized software, equipment, and intangible assets, which are reported on the Company’s unaudited

condensed consolidated statements of cash flows totaled $ 7.6 million and $ 6.4 million for our Telehealth segment during the nine months

ended September 30, 2025 and 2024, respectively, and $ 2.6 million and $ 2.4 million for our WorkSimpli segment during the nine months

ended September 30, 2025 and 2024, respectively.

segment items include stock-based compensation and depreciation and amortization.

expenditures for purchases of capitalized software and equipment, which are reported on the Company’s unaudited consolidated statements

of cash flows totaled $ 2.0 million during both the three months ended March 31, 2026 and 2025.

16 – SUBSEQUENT EVENTS

Issued for Service

October 2025, the Company issued 68,000 shares of common stock related to vested restricted stock with a total fair value of $ 300 thousand.

November 4, 2025, the Company entered into and simultaneously consummated the closing of a Stock Purchase Agreement (the “Purchase

Agreement”) by and among the Company, as a Seller and Seller Representative and the other seller parties thereto (collectively,

the “Sellers”), WorkSimpli and Lion Buyer, LLC, a Delaware limited liability company (the “Purchaser”), for the

sale by the Sellers of all of their right, title, and interest in WorkSimpli, representing 80 % of the outstanding units in WorkSimpli,

to the Purchaser (the “Transaction”).

aggregate purchase price for the units is based on an enterprise value of approximately $ 65.0

million, with

46.2 %, or $ 24.0

million, paid at close as the base purchase price, subject to an adjustment holdback amount and post-closing adjustments for net

working capital, cash, closing date indebtedness, and company transaction expenses, and 53.8 %,

million, subject to future performance targets, for an aggregate purchase consideration to the Sellers of up to $ 52.0

Company received 91.6% of the base purchase price, or $22.0 million, based on its pro rata portion of the units held by the Sellers.

The Company would receive up to $25.6 million of the purchase price subject to future performance targets .

The assets and

liabilities and results of operations for WorkSimpli are classified in continuing operations for all periods presented in the

unaudited condensed consolidated financial statements.

April 2026, the Company issued 70,000 shares of common stock related to vested restricted stock with a total fair value of $ 373 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