LifeMD, Inc. 10-Q

Item 1. Financial Statements LIFEMD, INC. CONDENSED CONSOLIDATED BALANCE SHEETS March 31, 2025 December 31, 2024 (Unaudited) ASSETS Current Assets Cash $ 34,393,410 $ 35,004,924 Accounts receivable, net 10,192,774 8,217,813 Product deposit 191,840 40,763 Inventory, net 2,967,697 2,797,358 Other current assets 2,227,200 2,672,231 Total Current Assets 49,972,921 48,733,089 Non-current Assets Equipment, net 1,438,829 1,479,184 Right of use assets 6,104,863 6,400,596 Capitalized software, net 14,311,592 13,816,501 Intangible assets, net 1,786,128 2,030,656 Total Non-current Assets 23,641,412 23,726,937 Total Assets $ 73,614,333 $ 72,460,026 LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ DEFICIT Current Liabilities Accounts payable $ 15,679,028 $ 16,009,484 Accrued expenses 18,503,380 20,811,763 Current operating lease liabilities 482,139 508,537 Current portion of long-term debt 11,611,111 8,444,444 Deferred revenue 14,625,902 14,480,917 Total Current Liabilities 60,901,560 60,255,145 Long-term Liabilities Long-term debt, net 6,818,835 9,885,057 Noncurrent operating lease liabilities 6,186,692 6,265,192 Contingent consideration 100,000 100,000 Total Liabilities 74,007,087 76,505,394 Commitments and contingencies (Note 9) - - Mezzanine Equity Preferred Stock, $ 0.0001 par value; 5,000,000 shares authorized Series B Convertible Preferred Stock, $ 0.0001 par value; 5,000 shares authorized, zero shares issued and outstanding, liquidation value, $ 0 per share as of March 31, 2025 and December 31, 2024 - - Stockholders’ Deficit Series A Preferred Stock, $ 0.0001 par value; 1,610,000 shares authorized, 1,400,000 shares issued and outstanding, liquidation value approximately, $ 25.55 per share as of March 31, 2025 and December 31, 2024 140 140 Common Stock, $ 0.01 par value; 100,000,000 shares authorized, 43,632,700 and 42,293,907 shares issued, 43,529,660 and 42,190,867 outstanding as of March 31, 2025 and December 31, 2024, respectively 436,327 422,939 Additional paid-in capital 233,043,479 230,508,339 Accumulated deficit ( 235,644,977 ) ( 236,253,218 ) Treasury stock, 103,040 , at cost, as of March 31, 2025 and December 31, 2024 ( 163,701 ) ( 163,701 ) Total LifeMD, Inc. Stockholders’ Deficit ( 2,328,732 ) ( 5,485,501 ) Non-controlling interest 1,935,978 1,440,133 Total Stockholders’ Deficit ( 392,754 ) ( 4,045,368 ) Total Liabilities, Mezzanine Equity and Stockholders’ Deficit $ 73,614,333 $ 72,460,026 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 3 LIFEMD, INC. CONDENSED Consolidated STATEMENTS OF OPERATIONS (Unaudited) 2025 2024 Three Months Ended March 31, 2025 2024 Revenues Telehealth revenue, net $ 52,456,481 $ 30,841,402 WorkSimpli revenue, net 13,241,275 13,302,862 Total revenues, net 65,697,756 44,144,264 Cost of revenues Cost of telehealth revenue 8,136,462 4,194,595 Cost of WorkSimpli revenue 507,254 405,582 Total cost of revenues 8,643,716 4,600,177 Gross profit 57,054,040 39,544,087 Expenses Selling and marketing expenses 29,194,061 24,173,880 General and administrative expenses 17,055,669 15,305,732 Customer service expenses 3,071,494 1,848,041 Development costs 2,675,134 2,087,232 Other operating expenses 2,514,758 2,300,447 Total expenses 54,511,116 45,715,332 Operating income (loss) 2,542,924 ( 6,171,245 ) Interest expense, net ( 626,275 ) ( 477,678 ) Net income (loss) 1,916,649 ( 6,648,923 ) Net income attributable to non-controlling interest 531,845 119,432 Net income (loss) attributable to LifeMD, Inc. 1,384,804 ( 6,768,355 ) Preferred stock dividends ( 776,563 ) ( 776,563 ) Net income (loss) attributable to LifeMD, Inc. common stockholders $ 608,241 $ ( 7,544,918 ) Basic earnings (loss) per share attributable to LifeMD, Inc. common stockholders $ 0.01 $ ( 0.19 ) Diluted earnings (loss) per share attributable to LifeMD, Inc. common stockholders $ 0.01 $ ( 0.19 ) Weighted average number of common shares outstanding: Basic 43,135,778 39,242,237 Diluted 45,580,311 39,242,237 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 4 LIFEMD, INC. CONDENSED Consolidated STATEMENTS of CHANGES IN STOCKHOLDERS’ EQUITY (Deficit) (Unaudited) Shares Amount Shares Amount Capital Deficit Stock Total Interest Total LifeMD, Inc. Series A Preferred Stock Common Stock Additional Paid-in Accumulated Treasury Non- controlling Shares Amount Shares Amount Capital Deficit Stock Total Interest Total Balance, January 1, 2024 1,400,000 $ 140 38,358,641 $ 383,586 $ 217,550,583 $ ( 214,265,236 ) $ ( 163,701 ) $ 3,505,372 $ 2,060,787 $ 5,566,159 Stock compensation expense - - 943,375 9,434 2,534,996 - - 2,544,430 - 2,544,430 Stock issued for noncontingent consideration payment - - 95,821 958 641,042 - - 642,000 - 642,000 Exercise of stock options - - 1,250 13 7,800 - - 7,813 7,813 Cashless exercise of warrants - - 1,268,476 12,685 ( 12,685 ) - - - - - Cashless exercise of options - - 64,113 641 ( 641 ) - - - - - Series A Preferred Stock Dividend - - - - - ( 776,563 ) - ( 776,563 ) - ( 776,563 ) Distribution to non-controlling interest - - - - - - - - ( 36,000 ( 36,000 ) Net (loss) income - - - - - ( 6,768,355 ) - ( 6,768,355 ) 119,432 ( 6,648,923 ) Balance, March 31, 2024 1,400,000 $ 140 40,731,676 $ 407,317 $ 220,721,095 $ ( 221,810,154 ) $ ( 163,701 ) $ ( 845,303 ) $ 2,144,219 $ 1,298,916 LifeMD, Inc. Series A Preferred Stock Common Stock Additional Paid-in Accumulated Treasury Non- controlling Shares Amount Shares Amount Capital Deficit Stock Total Interest Total Balance, January 1, 2025 1,400,000 $ 140 42,293,907 $ 422,939 $ 230,508,339 $ ( 236,253,218 ) $ ( 163,701 ) $ ( 5,485,501 ) $ 1,440,133 $ ( 4,045,368 ) Balance 1,400,000 $ 140 42,293,907 $ 422,939 $ 230,508,339 $ ( 236,253,218 ) $ ( 163,701 ) $ ( 5,485,501 ) $ 1,440,133 $ ( 4,045,368 ) Stock compensation expense - - 1,282,654 12,827 2,535,701 - - 2,548,528 - 2,548,528 Cashless exercise of options - - 56,139 561 ( 561 ) - - - - - Series A Preferred Stock Dividend - - - - - ( 776,563 ) - ( 776,563 ) - ( 776,563 ) Distribution to non-controlling interest - - - - - - - - ( 36,000 ) ( 36,000 ) Net income - - - - - 1,384,804 - 1,384,804 531,845 1,916,649 Net income (loss) - - - - - 1,384,804 - 1,384,804 531,845 1,916,649 Balance, March 31, 2025 1,400,000 $ 140 43,632,700 $ 436,327 $ 233,043,479 $ ( 235,644,977 ) $ ( 163,701 ) $ ( 2,328,732 ) $ 1,935,978 $ ( 392,754 ) Balance 1,400,000 $ 140 43,632,700 $ 436,327 $ 233,043,479 $ ( 235,644,977 ) $ ( 163,701 ) $ ( 2,328,732 ) $ 1,935,978 $ ( 392,754 ) The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 5 LIFEMD, INC. CONDENSED Consolidated STATEMENTS OF CASH FLOWS (Unaudited) 2025 2024 Three Months Ended March 31, 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $ 1,916,649 $ ( 6,648,923 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Amortization of debt discount 100,444 100,444 Amortization of capitalized software 2,250,036 1,787,404 Amortization of intangibles 244,528 245,966 Accretion of consideration payable - 13,644 Depreciation of fixed assets 162,566 65,915 Noncash operating lease expense 295,733 206,809 Stock compensation expense 2,548,528 2,544,430 Changes in Assets and Liabilities Accounts receivable ( 1,974,961 ) ( 59,241 ) Product deposit ( 151,077 ) 196,912 Inventory ( 170,339 ) 386,292 Other current assets 445,031 ( 364,227 ) Operating lease liabilities ( 104,897 ) ( 203,944 ) Deferred revenue 144,985 4,374,159 Accounts payable ( 330,456 ) 1,310,177 Accrued expenses ( 2,308,383 ) 1,246,342 Net cash provided by operating activities 3,068,387 5,202,159 CASH FLOWS FROM INVESTING ACTIVITIES Cash paid for capitalized software costs ( 2,745,127 ) ( 2,014,673 ) Purchase of equipment ( 122,211 ) ( 175,592 ) Net cash used in investing activities ( 2,867,338 ) ( 2,190,265 ) CASH FLOWS FROM FINANCING ACTIVITIES Repayment of notes payable, net of prepayment penalty - ( 211,690 ) Cash proceeds from exercise of options - 7,813 Preferred stock dividends ( 776,563 ) ( 776,563 ) Contingent consideration payments for ResumeBuild acquisition - ( 31,250 ) Distributions to non-controlling interest ( 36,000 ) ( 36,000 ) Net cash used in financing activities ( 812,563 ) ( 1,047,690 ) Net (decrease) increase in cash ( 611,514 ) 1,964,204 Cash at beginning of period 35,004,924 33,146,725 Cash at end of period $ 34,393,410 $ 35,110,929 Cash paid for interest Cash paid during the period for interest $ 593,750 $ 644,919 Non-cash investing and financing activities Cashless exercise of options $ 561 $ 641 Cashless exercise of warrants $ - $ 12,685 Stock issued for noncontingent consideration payment $ - $ 642,000 Right of use assets $ - $ 1,285,926 Operating lease liabilities $ - $ 1,285,926 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 6 LIFEMD, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 – NATURE OF THE ORGANIZATION AND BUSINESS Corporate History LifeMD, Inc. was formed in the State of Delaware on May 24, 1994, under its prior name, Immudyne, Inc. The Company changed its name to Conversion Labs, Inc. 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” to “LFMD”. On 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 %. Concurrent with the name change of the parent company to Conversion Labs, Inc., Immudyne PR was renamed to Conversion Labs PR LLC (“Conversion Labs PR”). 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. In 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. In addition to LegalSimpli Software, LLC’s growth business model, this acquisition added deep search engine optimization and search engine marketing expertise to the Company. 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 %. Unless 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. Nature of Business The Company is a direct-to-patient telehealth company providing a high-quality, cost-effective, and convenient way to access comprehensive, virtual and in-home healthcare. The Company believes the traditional model of visiting a doctor’s office, traveling to a retail pharmacy, and returning for follow-up care or prescription refills is complex, inefficient, and costly, which discourages many individuals from seeking medical care. The Company is improving the delivery of the healthcare experience through telehealth with our 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. The Company’s telehealth platform helps patients access their licensed providers for diagnoses, virtual care, and prescription medications, often delivered on a recurring basis. In addition to its telehealth prescription offerings, the Company sells over-the-counter (“OTC”) products. All products are available on a subscription or membership basis, where a patient can subscribe to receive regular shipments of prescribed medications or products. This creates convenience and often discounted pricing opportunities for patients and recurring revenue streams for the Company. With its first brand, ShapiroMD, the Company has built a full line of proprietary OTC products for male and female hair loss including Food and Drug Administration (“FDA”) approved OTC minoxidil and an FDA-cleared medical device and a personalized telehealth platform offering that gives consumers access to virtual medical treatment from their providers and, when appropriate, a full line of oral and topical prescription medications for hair loss. The Company’s men’s brand, RexMD, currently offers access to virtual medical treatment for a variety of men’s health needs, including erectile dysfunction, premature ejaculation and hair loss. In 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. In April 2023, we launched our rapidly growing 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. In September 2024, we expanded our Weight Management Program with a personalized, non-GLP-1 treatment plan consisting of three oral medications – metformin, bupropion, and topiramate. 7 Liquidity Evaluation As of March 31, 2025, the Company has an accumulated deficit approximating $ 235.6 million and has experienced significant losses from its operations. The Company is showing significant positive revenue trends and expects its burn rate of cash to continue to improve and to maintain positive operating cash flows for the next 12 months following the date of this report. To date, the Company has been funding operations primarily through the sales of its products, issuance of common and preferred stock, and through loans and advances. The Company’s continued operations are dependent upon obtaining an increase in its sale volumes or the issuance of additional shares of common stock. There can be no assurances that we will be successful in increasing revenues and improving operational efficiencies. On 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. and Avenue Venture Opportunities Fund, L.P. (collectively, “Avenue”). The Avenue 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 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 (the “Avenue Warrants”). In addition, Avenue may convert up to $ 2 million of the $ 15 million in term loans funded at closing into shares of the Company’s common stock at any time while the loans are outstanding, at a price per share equal to $ 1.49 . Proceeds from the Avenue Facility were used to repay the Company’s outstanding notes payable balances with CRG Financial and are expected to be used for general corporate purposes. The Company is subject to certain affirmative and negative covenants under the Avenue Facility, including the requirement, beginning on the closing date, to maintain at least $5 million of unrestricted cash to be tested at the end of each month, and beginning on the period ended September 30, 2023, and at the end of each quarter thereafter, a trailing six-month cash flow, subject to certain adjustments as provided by the Avenue Credit Agreement, of at least $2 million. As of March 31, 2025, there was $ 19 million outstanding under the Avenue Facility, and the Company was in compliance with the Avenue Facility covenants. Loans under the Avenue Facility accrue interest at a variable rate per annum equal to the greater of (i) the sum of 4.75% plus the Prime Rate (as defined in the Avenue Supplement) and (ii) 12.50%. Payments are interest only for up to 24 months and then fully amortized thereafter. The Avenue Facility matures on October 1, 2026 . The Company may prepay the loans, subject to a prepayment penalty of 1.00 % to 3.00 % of the principal amount prepaid, depending on the timing of the prepayment. The Company entered into an At Market Issuance Sales Agreement (the “ATM Sales Agreement”) with B. Riley Securities, Inc. and Cantor Fitzgerald & Co. relating to the sale of its common stock. In accordance with the terms of the ATM Sales Agreement, the Company may, but is not obligated to, offer and sell, from time to time, shares of common stock, through or to the Agents, acting as agent or principal. Sales of common stock, if any, will be made by any method permitted that is deemed an “at the market offering” as defined in Rule 415 under the Securities Act. On June 7, 2024, the Company filed a shelf registration statement on Form S-3 under the Securities Act, which was declared effective on July 18, 2024 (the “2024 Shelf”). Under the 2024 Shelf at the time of effectiveness, the Company had the ability to raise up to $ 150.0 million by selling common stock, preferred stock, debt securities, warrants, and units including $ 53.3 million of its common stock under the ATM Sales Agreement. As of March 31, 2025, the Company had $ 53.3 million available under the ATM Sales Agreement, which is part of the $ 150.0 million available under the 2024 Shelf. As of May 5, 2025, the Company has a current cash balance of approximately $ 24.5 million. The Company reviewed its forecasted operating results and sources and uses of cash used in management’s assessment, which included the available financing and consideration of positive and negative evidence impacting management’s forecasts, market, and industry factors. Positive indicators that lead to the Company’s expectation that it will have sufficient cash over the next 12 months following the date of this report include: (1) the Company’s continued strengthening of its revenues, reduction in losses and improvement of operational efficiencies across the business, (2) the expected improvement in its cash burn rate over the next 12 months and positive operating cash flows during the three months ended March 31, 2025, (3) cash on hand of $ 34.4 million as of March 31, 2025, (4) $ 53.3 million available under the ATM Sales Agreement, which is part of the $ 150.0 million available under the 2024 Shelf, (5) management’s ability to curtail expenses, if necessary, and (6) the overall market value of the telehealth industry, which the Company believes will continue to drive interest in the Company as evidenced by the collaboration with Medifast, Inc. (“Medifast”) during the year ended December 31, 2024. The Company received $ 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”). The Company also entered into a stock purchase agreement and registration rights agreement with Medifast’s wholly-owned subsidiary, Jason Pharmaceuticals, Inc., whereby the Company issued 1,224,425 shares of its common stock in a private placement (the “Medifast Private Placement”) at a purchase price of $ 8.1671 per share, for aggregate proceeds of approximately $ 10 million, which was paid at the closing on December 12, 2023. 8 NOTE 2 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The 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. 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 a fair presentation 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, 2025 are not necessarily indicative of the results for the year ending December 31, 2025 or for any future period. Principles of Consolidation The Company evaluates the need to consolidate affiliates based on standards set forth in Accounting Standards Codification (“ASC”) 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 significant intercompany transactions and balances have been eliminated in consolidation. Cash The 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. Variable Interest Entities In accordance with ASC 810, Consolidation , the Company determines whether any legal entity in which the Company becomes involved is a variable interest entity (a “VIE”) and subject to consolidation. This determination is based on whether an entity has sufficient equity at risk to finance their activities without additional subordinated financial support from other parties or whose equity investors lack any of the characteristics of a controlling financial interest and whether the interest will absorb portions of a VIE’s expected losses or receive portions of its expected residual returns and are contractual, ownership, or pecuniary in nature and that change with changes in the fair value of the entity’s net assets. A reporting entity is the primary beneficiary of a VIE and must consolidate it when that party has a variable interest, or combination of variable interests, that provides it with a controlling financial interest. A party is deemed to have a controlling financial interest if it meets both of the power and losses/benefits criteria. The power criterion is the ability to direct the activities of the VIE that most significantly impact its economic performance. The losses/benefits criterion is the obligation to absorb losses from, or right to receive benefits from, the VIE that could potentially be significant to the VIE. The Company determined that the LifeMD PC entity, the Company’s affiliated network of medical Professional Corporations and medical Professional Associations administratively led by LifeMD Southern Patient Medical Care, P.C., is a VIE and subject to consolidation. LifeMD PC and the Company do not have any stockholders in common. LifeMD PC is owned by licensed physicians, and the Company maintains a managed service agreement with LifeMD PC whereby we provide all non-clinical services to LifeMD PC. The Company determined that it is the primary beneficiary of LifeMD PC and must consolidate, as we have both the power to direct the activities of LifeMD PC that most significantly impact the economic performance of the entity and we have the obligation to absorb the losses. 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. There is no non-controlling interest upon consolidation of LifeMD PC. Total net loss for LifeMD PC was approximately $ 3.3 million and $ 2.4 million for the three months ended March 31, 2025 and 2024, respectively. Total assets and liabilities for the LifeMD PC were approximately $ 7 thousand and $ 201 thousand, respectively, as of March 31, 2025 and $ 8 thousand and $ 380 thousand, respectively, as of December 31, 2024. Use of Estimates The 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. 9 Revenue Recognition The Company records revenue under the adoption of ASC 606, Revenue from Contracts with Customers , by analyzing exchanges with its customers using a five-step analysis: 1. Identify the contract 2. Identify performance obligations 3. Determine the transaction price 4. Allocate the transaction price 5. Recognize revenue For the Company’s product-based contracts with customers, the Company has determined that there is one performance obligation, which is the delivery of the product; this performance obligation is transferred at a discrete point in time. The Company generally records sales of finished products once the customer places and pays for the order, with the product being simultaneously shipped by a third-party fulfillment service provider. In all cases, delivery is considered to have occurred when the customer obtains control, which is usually commensurate upon shipment of the product. In the case where product is not simultaneously shipped when the customer places and pays for the order, recognition of revenue is deferred until time of shipment. In the case of its product-based contracts, the Company provides a subscription sensitive service based on the recurring shipment of products. The Company records the related revenue at the time it fulfills the shipment obligation to the customer. For its product-based contracts with customers, the Company records an estimate for provisions of discounts, returns, allowances, customer rebates, and other adjustments for its product shipments and are reflected as contra revenues in arriving at reported net revenues. The Company’s discounts and customer rebates are known at the time of sale; correspondingly, the Company reduces gross product sales for such discounts and customer rebates. The Company estimates customer returns and allowances based on information derived from historical transaction detail and accounts for such provisions, as contra revenue, during the same period in which the related revenues are earned. The Company has determined that the population of its product-based contracts with customers are homogenous, supporting the ability to record estimates for returns and allowances to be applied to the entire product-based portfolio population. For its telehealth contracts with customers, the Company offers one-time and subscription-based access to the Company’s telehealth platform. 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 to access the telehealth platform for the time period of the subscription purchased. The majority of the Company’s subscriptions are recognized over time using the input method in which revenue is recognized on the basis of efforts or inputs toward satisfying a performance obligation relative to the total expected inputs to satisfy the performance obligation. The Company uses time elapsed as the input. The measure used provides a faithful depiction of the transfer of goods or services to the subscribers. The Company records the revenue over the customer’s subscription period for monthly and multi-month subscribers. The Company also offers bundled arrangements in which a subscriber receives subscription-based access to the Company’s telehealth platform as well as prescribed medication. The Company has determined that there are two performance obligations related to these bundles: (i) one performance obligation for the subscription-based service that is delivered over time and (ii) one performance obligation for the prescribed medication that is delivered as of a point in time. For contracts with multiple performance obligations, the transaction price is allocated to each performance obligation based on a relative stand-alone selling price basis. The stand-alone selling price is based on the prices at which the Company separately sells the products and services. Revenue related to contracts with multiple performance obligations was $ 3.9 million for the three months ended March 31, 2025. Additionally, to fulfill its promise to customers for contracts that include the sale of prescription products, the Company maintains relationships with certain third-party pharmacies, which are licensed mail order pharmacies providing prescription fulfillment to the Company’s customers. The third-party pharmacies fill prescription orders for customers who have received a prescription from a LifeMD PC provider. 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: (i) whether the Company has sole discretion in determining which pharmacy fills a customer’s prescription; (ii) whether the Company obtains control of the product; (iii) whether the Company is primarily responsible to the customer for the satisfactory fulfillment and acceptability of the order; (iv) whether the Company is responsible for refunds of the prescription medication after transfer of control to the customer; and (v) whether the Company sets all listed prices for the prescription products. 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. Customer discounts, returns and rebates on telehealth product revenues approximated $ 776 thousand and $ 991 thousand, respectively, during the three months ended March 31, 2025 and 2024, respectively. 10 The 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/user 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 has determined that there is one product and one performance obligation that is delivered over time, as the Company allows the subscriber to access the suite of services for the time period of the subscription purchased. The Company 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 records the revenue over the customer’s subscription period for monthly and multi-month subscribers or at the end of the initial 14-day service period for customers who purchased the initial 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 $ 1.1 million and $ 766 thousand, respectively, during the three months ended March 31, 2025 and 2024, respectively. As noted above, on December 11, 2023, the Company entered into the Medifast Collaboration. 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 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 31, 2023. The Company recognized approximately $ 2 million related to the second performance obligation during the three months ended March 31, 2024, and approximately $ 3 million related to the second and third performance obligations during the three months ended June 30, 2024. For the three months ended March 31, 2025 and 2024, the Company had the following disaggregated revenue: SCHEDULE OF DISAGGREGATED REVENUE Three Months Ended March 31, 2025 % 2024 % Telehealth subscription revenue $ 30,089,964 46 % $ 7,607,788 17 % Telehealth product revenue 22,366,517 34 % 21,264,864 48 % WorkSimpli revenue 13,241,275 20 % 13,302,862 30 % Medifast collaboration revenue - - % 1,968,750 5 % Total revenues, net $ 65,697,756 100 % $ 44,144,264 100 % Deferred Revenues The Company records deferred revenues when cash payments are received or due in advance of its performance. As of March 31, 2025 and December 31, 2024, the Company has accrued contract liabilities, as deferred revenue, of approximately $ 14.6 million and $ 14.5 million, respectively, which represent the following: (1) $ 10.1 million and $ 10.1 million as of March 31, 2025 and December 31, 2024, respectively, related to obligations on telehealth in-process monthly or multi-month contracts with customers, (2) $ 2.0 million and $ 1.9 million as of March 31, 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) $ 2.5 million and $ 2.5 million as of March 31, 2025 and December 31, 2024, respectively, related to obligations on WorkSimpli in-process monthly or multi-month contracts with customers. Deferred revenue was $ 14.6 million as of March 31, 2025 compared to $ 14.5 million as of December 31, 2024. The amount of revenue recognized during the three months ended March 31, 2025, that was included in the deferred revenue balance as of December 31, 2024, was $ 12.7 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, 2025 as revenue by March 31, 2026. The following table summarizes deferred revenue activities for the periods presented: SCHEDULE OF CONTRACT WITH CUSTOMER LIABILITY 2025 2024 Three Months Ended March 31, 2025 2024 Beginning of period $ 14,480,917 $ 8,828,598 Additions 64,668,542 17,773,373 Revenue recognized ( 64,523,557 ) ( 13,399,214 ) End of period $ 14,625,902 $ 13,202,757 11 Leases The Company determines if an arrangement is a lease at inception. Operating lease right-of-use (“ROU”) assets are included in right-of-use assets on the unaudited condensed 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. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. Certain leases may include options to extend or terminate the lease. 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. Accounts Receivable, net Accounts receivable principally consist of amounts due from third-party merchant processors, who process our subscription revenues; the merchant accounts balance receivable represents the charges processed by the merchants that have not yet been deposited with the Company. 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 March 31, 2025 and December 31, 2024, the reserve for sales returns and allowances was approximately $ 832 thousand and $ 894 thousand, respectively. For all periods presented, as noted above, the sales returns and allowances were recorded in accrued expenses on the unaudited condensed consolidated balance sheets. The Company’s accounts receivable balances are as follows for each of the periods presented: SCHEDULE OF ACCOUNTS RECEIVABLE March 31, December 31, 2025 2024 Beginning of period $ 8,217,813 $ 5,277,250 End of period $ 10,192,774 $ 8,217,813 Inventory As of March 31, 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 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. Inventory is valued at the lower of cost or net realizable value with cost determined on an average cost basis. Management compares the cost of inventory with the net realizable value and an allowance is made for writing down inventory to net realizable, if lower. As of March 31, 2025 and December 31, 2024, the Company recorded an inventory reserve of approximately $ 153 thousand and $ 263 thousand, respectively. As of March 31, 2025 and December 31, 2024, the Company’s inventory consisted of the following: SUMMARY OF INVENTORY March 31, December 31, 2025 2024 Finished goods $ 2,212,683 $ 1,554,600 Raw materials and packaging components 908,478 1,506,078 Inventory reserve ( 153,464 ) ( 263,320 ) Total inventory, net $ 2,967,697 $ 2,797,358 Product Deposit Many of our vendors require deposits when a purchase order is placed for goods or fulfillment services. These deposits typically range from 10 % to 33 % of the total purchased amount. Our vendors include a credit memo within their final invoice, recognizing the deposit amount previously paid. As of March 31, 2025 and December 31, 2024, the Company has approximately $ 192 thousand and $ 41 thousand, respectively, of product deposits with multiple vendors for the purchase of raw materials or finished goods. The Company’s history of product deposits with its inventory vendors, creates an implicit purchase commitment equaling the total expected product acceptance cost in excess of the product deposit. As of March 31, 2025, the Company approximates its implicit purchase commitments to be $ 279 thousand, of which the vast majority are with two vendors that manufacture the Company’s finished goods inventory for its RexMD product line. 12 Capitalized Software Costs The Company capitalizes certain internal payroll costs and third-party costs related to internally developed software and amortizes these costs using the straight-line method over the estimated useful life of the software, generally three years. The Company does not sell internally developed software other than through the use of subscription service. Certain development costs not meeting the criteria for capitalization, in accordance with ASC 350-40 , Internal-Use Software , are expensed as incurred. As of March 31, 2025 and December 31, 2024, the Company capitalized a net amount of $ 14.3 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. Intangible Assets Intangible 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 and (6) four purchased domain names. Intangible assets are amortized over their estimated lives using the straight-line method. Costs incurred to renew or extend the term of recognized intangible assets are capitalized and amortized over the useful life of the asset which typically range from one year to ten years . Impairment of Long-Lived Assets Long-lived assets include equipment and capitalized software. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If such assets are considered to be impaired, an impairment is recognized as the amount by which the carrying amount of the assets exceeds the estimated fair values of the assets. As of March 31, 2025 and December 31, 2024, the Company determined that no events or changes in circumstances existed that would indicate any impairment of its long-lived assets. Income Taxes The Company files corporate federal, state, and local tax returns. WorkSimpli files a tax return in Puerto Rico. The Company records current and deferred taxes in accordance with ASC 740, Accounting for Income Taxes. This ASC requires recognition of deferred tax assets and liabilities for temporary differences between tax basis of assets and liabilities and the amounts at which they are carried in the financial statements, based upon the enacted rates in effect for the year in which the differences are expected to reverse. The Company establishes a valuation allowance when necessary to reduce deferred tax assets to the amount expected to be realized. The Company periodically assesses the value of its deferred tax asset, a majority of which has been generated by a history of net operating losses and management 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 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. Stock-Based Compensation The 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. 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. Segment Data Our 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. 13 Fair Value of Financial Instruments The fair value of a financial instrument is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities subject to ongoing fair value measurement are categorized and disclosed into one of the three categories depending on observable or unobservable inputs employed in the measurement. Hierarchical levels, which are directly related to the amount of subjectivity associated with the inputs to the valuation of these assets or liabilities, are as follows: 1. Level 1: Inputs that are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. 2. Level 2: Inputs (other than quoted prices included in Level 1) that are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life. 3. Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities and that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement. 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. Concentrations of Risk We are dependent on certain third-party manufacturers and pharmacies for fulfillment services, prescription medications, packaging, and finished goods. We believe that other contract manufacturers or third-party pharmacies could be quickly secured if any of our current manufacturers or pharmacies cease to perform adequately. As of March 31, 2025, one of our vendors supplied 65 % of the Company’s total fulfillment services and one of our vendors supplied 20 % of the Company’s total prescription medications. As of December 31, 2024, one of our vendors supplied 80 % of the Company’s total fulfillment services. Recent Accounting Pronouncements In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, to improve its income tax disclosure requirements. Under ASU 2023-09, entities must annually: (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold. The amendments in this update are effective for annual periods beginning after December 15, 2024. The Company is currently evaluating the impact that ASU 2023-09 will have to its consolidated financial statements and related disclosures. In 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 15, 2027. Early adoption is permitted and the amendments in this update should be applied either prospectively or retrospectively. The Company is evaluating the impact this guidance will have on the disclosures in the consolidated financial statements. All 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. 14 NOTE 3 – INTANGIBLE ASSETS As of March 31, 2025 and December 31, 2024, the Company has the following amounts related to amortizable intangible assets: SCHEDULE OF INTANGIBLE ASSETS March 31, December 31, Amortizable 2025 2024 Life Amortizable Intangible Assets: ResumeBuild brand $ 4,500,000 $ 4,500,000 5 years Customer relationship asset 1,006,840 1,006,840 3 years Cleared trade name 133,339 133,339 5 years Cleared developed technology 12,920 12,920 1 year Purchased licenses 200,000 200,000 10 years Website domain names 175,397 175,397 3 years Amortizable intangible assets 175,397 175,397 3 years Less: accumulated amortization ( 4,242,368 ) ( 3,997,840 ) Total intangible assets, net $ 1,786,128 $ 2,030,656 The aggregate amortization expense of the Company’s intangible assets for the three months ended March 31, 2025 and 2024 was $ 245 thousand and $ 246 thousand, respectively. Total amortization expense for the remainder of 2025 is approximately $ 733 thousand, $ 940 thousand for 2026, and approximately $ 113 thousand for 2027. NOTE 4 – ACCRUED EXPENSES As of March 31, 2025 and December 31, 2024, the Company has the following amounts related to accrued expenses: SCHEDULE OF ACCRUED EXPENSES March 31, December 31, 2025 2024 Accrued selling and marketing expenses $ 10,206,590 $ 9,149,967 Accrued compensation 2,434,523 5,106,989 Sales tax payable 2,267,447 2,267,447 Accrued dividends payable 776,563 776,563 Other accrued expenses 2,818,257 3,510,797 Total accrued expenses $ 18,503,380 $ 20,811,763 NOTE 5 – LONG-TERM DEBT Avenue Capital Credit Facility As noted in Note 1 above, on March 21, 2023, the Company entered into the Avenue Credit Agreement and the Avenue Supplement. The Avenue 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. The Avenue Warrants have a term of five years. The relative fair value of the Avenue Warrants upon closing was $ 873 thousand. In addition, Avenue may convert up to $ 2 million of the $ 15 million in term loans funded at closing into shares of the Company’s common stock at any time while the loans are outstanding, at a price per share equal to $ 1.49 . As of March 31, 2025, there is $ 1 million in term loans remaining to be converted. The relative fair value of the Avenue Warrants was recorded as a debt discount and is included as a reduction to long-term debt on the unaudited condensed consolidated balance sheet as of March 31, 2025. The Company incurred other fees associated with the Avenue Facility including: (1) a $300 thousand financing fee, (2) a $200 thousand upfront commitment fee of 1% of the total $20 million in committed capital and (3) $27 thousand in legal fees. The total debt discount recorded of $1.4 million will be amortized over a forty-two-month period. Total amortization of debt discount was $ 100 thousand for both the three months ended March 31, 2025 and 2024. The Company received gross proceeds of $ 15.0 million at closing (net proceeds of $ 12.3 million after repayment of the $ 2 million outstanding CRG loan balance and various fees). The Avenue Facility matures on October 1, 2026 and interest is based on the greater of: (1) the Prime Rate (as defined in the Supplement) plus 4.75% and (2) 12.5%. As of March 31, 2025, the interest rate was 12.5%. Interest only payments were extended until May 2025. The Company may prepay the loans, subject to a prepayment penalty of 1.00 % to 3.00 % of the principal amount prepaid, depending on the timing of the prepayment. Proceeds from the Avenue Facility were used to repay the Company’s outstanding notes payable balances with CRG Financial and are expected to be utilized for general corporate purposes. 15 As of March 31, 2025, the Company will pay $ 8.4 million in 2025 and $ 10.6 million in 2026 in principal payments under the Avenue Facility. The Company is subject to certain affirmative and negative covenants under the Avenue Facility, including the requirement, beginning on the closing date, to maintain at least $ 5 million of unrestricted cash to be tested at the end of each month, and beginning on the period ended September 30, 2023, and at the end of each quarter thereafter, a trailing six-month cash flow, subject to certain adjustments as provided by the Avenue Credit Agreement, of at least $ 2 million. On 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. As of March 31, 2025, there was $ 19 million outstanding under the Avenue Facility and the Company was in compliance with the Avenue Facility covenants. Total interest expense on long-term debt, inclusive of amortization of debt discounts, amounted to approximately $ 632 thousand and $ 679 thousand for the three months ended March 31, 2025 and 2024, respectively. NOTE 6 – STOCKHOLDERS’ EQUITY (DEFICIT) The 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, $ 0.0001 par value, of which 5,000 shares are designated as Series B Convertible Preferred Stock, 1,610,000 are designated as Series A Preferred Stock and 3,385,000 shares of preferred stock remain undesignated. The Company entered into the ATM Sales Agreement whereby the Company may offer and sell, from time to time, shares of common stock. On June 7, 2024, the Company filed the 2024 Shelf. Under the 2024 Shelf at the time of effectiveness, the Company had the ability to raise up to $ 150.0 million by selling common stock, preferred stock, debt securities, warrants, and units including $ 53.3 million of its common stock under the ATM Sales Agreement. As of March 31, 2025, the Company had $ 53.3 million available under the ATM Sales Agreement, which is part of the $ 150.0 million available under the 2024 Shelf. Options and Warrants During the three months ended March 31, 2025, the Company issued an aggregate of 56,139 shares of common stock related to the cashless exercise of options. Common Stock Common Stock Transactions During the Three Months Ended March 31, 2025 During the three months ended March 31, 2025, the Company issued an aggregate of 1,282,654 shares of common stock for service, including vested restricted stock. Non-controlling Interest Net income attributed to non-controlling interest amounted to approximately $ 532 thousand and $ 119 thousand for the three months ended March 31, 2025 and 2024, respectively. During the three months ended March 31, 2025 and 2024, the Company paid distributions to non-controlling interest holders of $ 36 thousand and $ 36 thousand, respectively. Dividends The Company pays cumulative dividends on its Series A Preferred Stock, in the amount of $ 2.21875 per share each year, which is equivalent to 8.875 % of the $ 25.00 liquidation preference per share. Dividends on the Series A Preferred Stock are payable quarterly in arrears, on or about the 15th day of January, April, July, and October of each year. During the three months ended March 31, 2025, the Company declared the dividend on March 25, 2025 to holders of record as of April 4, 2025 which was paid on April 15, 2025. During the three months ended March 31, 2024, the Company declared the dividend on March 26, 2024 to holders of record as of April 5, 2024 which was paid on April 15, 2024. The dividends are included in the Company’s results of operations for the three months ended March 31, 2025 and 2024. Stock Options On January 8, 2021, the Company approved the Company’s 2020 Equity and Incentive Plan (the “2020 Plan”). Approval of the 2020 Plan was included as Proposal 1 in the Company’s definitive proxy statement for its Special Meeting of Stockholders filed with the Securities and Exchange Commission on December 7, 2020. The 2020 Plan is administered by the Compensation Committee of the Board of Directors (the “Board”) and initially provided for the issuance of up to 1,500,000 shares of Common Stock. The number of shares of Common Stock available for issuance under the 2020 Plan automatically increases by 150,000 shares of Common Stock on January 1st of each year, for a period of not more than ten years, commencing on January 1, 2021 and ending on (and including) January 1, 2030. 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. 16 On June 24, 2021, at the Annual Meeting of Stockholders, the stockholders of the Company approved the amendment and restatement to the 2020 Plan, which amended the 2020 Plan to increase the maximum number of shares of the Company’s common stock available for issuance under the 2020 Plan by 1,500,000 shares. On June 16, 2022, at the Annual Meeting of Stockholders, the stockholders of the Company approved the second amendment and restatement of the 2020 Plan, which amended the 2020 Plan to increase the maximum number of shares of the Company’s common stock available for issuance under the 2020 Plan by 1,500,000 shares. On June 14, 2024, at the Annual Meeting of Stockholders, the stockholders of the Company approved the third amendment and restatement to the 2020 Plan (the “Amended 2020 Plan”), which further amended the 2020 Plan by increasing the maximum number of shares of the Company’s common stock available for issuance under the Amended 2020 Plan by 3,000,000 shares. As of March 31, 2025, the Amended 2020 Plan provided for the issuance of up to 8,250,000 shares of Common Stock. Remaining authorization under the Amended 2020 Plan was 1,585,844 shares as of March 31, 2025. The forms of award agreements to be used in connection with awards made under the Amended 2020 Plan to the Company’s executive officers and non-employee directors are: ● Form of Non-Qualified Option Agreement (Non-Employee Director Awards) ● Form of Non-Qualified Option Agreement (Employee Awards); and ● Form of Restricted Stock Award Agreement. Previously, the Company had granted service-based stock options and performance-based stock options separate from the Amended 2020 Plan. The following is a summary of outstanding options activity under our Amended 2020 Plan for the three months ended March 31, 2025: SCHEDULE OF OPTION ACTIVITY Options Outstanding Number of Shares Exercise Price per Share Weighted Average Remaining Contractual Life Weighted Average Exercise Price per Share Balance, December 31, 2024 515,667 $ 1.84 – 13.74 4.81 years $ 8.28 Granted - - - - Exercised - - - - Cancelled/Forfeited/Expired ( 220,000 ) 7.07 – 10.93 6.34 years 9.18 Balance at March 31, 2025 295,667 $ 1.84 – 13.74 3.24 years $ 7.61 Exercisable at December 31, 2024 504,787 $ 1.84 – 13.74 4.84 years $ 8.39 Exercisable at March 31, 2025 291,235 $ 1.84 – 13.74 3.24 years $ 7.67 Total compensation expense under the Amended 2020 Plan options above was approximately $ 7 thousand and $ 669 thousand for the three months ended March 31, 2025 and 2024, respectively, with unamortized expense remaining of $ 22 thousand as of March 31, 2025. As of March 31, 2025, aggregate intrinsic value of vested service-based options outstanding was $ 265 thousand. The following is a summary of outstanding service-based options activity (prior to the establishment of our Amended 2020 Plan above) for the three months ended March 31, 2025: SCHEDULE OF OPTION ACTIVITY Options Outstanding Number of Shares Exercise Price per Share Weighted Average Remaining Contractual Life Weighted Average Exercise Price per Share Balance, December 31, 2024 682,333 $ 1.00 – 11.98 4.24 years $ 4.06 Granted 30,000 7.50 1.87 years 7.50 Exercised ( 95,000 ) 1.15 – 5.00 4.85 years 2.82 Cancelled/Forfeited/Expired ( 30,000 ) 7.50 5.12 years 7.50 Balance at March 31, 2025 587,333 $ 1.00 – 11.98 3.68 years $ 4.26 Exercisable December 31, 2024 682,333 $ 1.00 – 11.98 4.24 years $ 4.06 Exercisable at March 31, 2025 587,333 $ 1.00 – 11.98 3.68 years $ 4.26 The total fair value of the options granted during the three months ended March 31, 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 approximately $ 145 thousand and $ 192 thousand for the three months ended March 31, 2025 and 2024, respectively, with $ 0 unamortized expense remaining as of March 31, 2025. During the three months ended March 31, 2025, 95,000 options were exercised on a cashless basis, which resulted in 56,139 shares issued. As of March 31, 2025, aggregate intrinsic value of vested service-based options outstanding was $ 1.1 million. 17 The following is a summary of outstanding performance-based options activity for the three months ended March 31, 2025: SCHEDULE OF OPTION ACTIVITY Options Outstanding Number of Shares Exercise Price per Share Weighted Average Remaining Contractual Life Weighted Average Exercise Price per Share Balance at December 31, 2024 90,000 $ 1.25 – 2.50 2.30 years $ 1.69 Granted - - - - Cancelled/Forfeited/Expired ( 10,000 ) 2.50 2.50 Balance at March 31, 2025 80,000 $ 1.25 – 1.75 2.38 years $ 1.59 Exercisable December 31, 2024 25,000 $ 1.75 – 2.50 1.40 years $ 2.05 Exercisable at March 31, 2025 15,000 $ 1.75 2.25 years $ 1.75 No compensation expense was recognized on the performance-based options above for the three months ended March 31, 2025 and 2024, as the performance terms have not been met or are not probable. As of March 31, 2025, aggregate intrinsic value of vested performance options outstanding was $ 55 thousand. RSUs and RSAs (under our Amended 2020 Plan) The following is a summary of outstanding RSUs and RSAs activity under our Amended 2020 Plan for the three months ended March 31, 2025: SCHEDULE OF RESTRICTED STOCK UNIT ACTIVITY RSU Outstanding Number of Shares Balance at December 31, 2024 3,049,944 Granted 725,000 Vested ( 1,213,166 ) Cancelled/Forfeited - Balance at March 31, 2025 2,561,778 The total fair value of the 725,000 RSUs and RSAs granted was $ 3.8 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 $ 2.4 million and $ 1.4 million for the three months ended March 31, 2025 and 2024, respectively, with unamortized expense remaining of approximately $ 7.8 million as of March 31, 2025. During the three months ended March 31, 2025, 1,213,166 RSUs and RSAs vested, of which 1,120,154 RSUs and RSAs were issued. RSUs and RSAs (outside of our Amended 2020 Plan) The following is a summary of outstanding RSUs and RSAs activity (outside of our Amended 2020 Plan) for the three months ended March 31, 2025: SCHEDULE OF RESTRICTED STOCK UNIT ACTIVITY RSU Outstanding Number of Shares Balance at December 31, 2024 300,000 Granted - Vested ( 100,000 ) Balance at March 31, 2025 200,000 No compensation expense for RSUs and RSAs outside of the Amended 2020 Plan was recognized for the three months ended March 31, 2025 compared to $ 255 thousand for the three months ended March 31, 2024, with no unamortized expense remaining as of March 31, 2025. During the three months ended March 31, 2025, 162,500 RSUs and RSAs were issued, which included 100,000 RSUs and RSAs that vested during the three months ended March 31, 2025 and 62,500 RSUs and RSAs that vested previously. 18 Warrants The following is a summary of outstanding and exercisable warrants activity during the three months ended March 31, 2025: SCHEDULE OF WARRANT OUTSTANDING AND EXERCISABLE Warrants Outstanding Number of Shares Exercise Price per Share Weighted Average Remaining Contractual Life Weighted Average Exercise Price per Share Balance at December 31, 2024 1,743,730 $ 1.24 – 12.00 2.66 years $ 4.65 Exercised - - - - Cancelled/Forfeited/Expired - - - - Balance at March 31, 2025 1,743,730 $ 1.24 – 12.00 2.41 years $ 4.65 Exercisable December 31, 2024 1,743,730 $ 1.24 – 12.00 2.66 years $ 4.63 Exercisable March 31, 2025 1,743,730 $ 1.24 – 12.00 2.41 years $ 4.63 Total compensation expense on the above warrants for services was approximately $ 0 for both the three months ended March 31, 2025 and 2024, with no unamortized expense remaining as of March 31, 2025. Stock-based Compensation The total stock-based compensation expense related to common stock issued for services, service-based stock options, performance-based stock options, warrants, RSUs and RSAs amounted to approximately $ 2.5 million for both the three months ended March 31, 2025 and 2024. 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 $ 7.8 million as of March 31, 2025, which is expected to be recognized through 2028. NOTE 7 – EARNINGS PER SHARE Basic earnings (loss) per common share (“EPS”) is based on the weighted average number of common shares outstanding during each 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. The Company follows the provisions of ASC 260, Diluted Earnings per Share . In computing diluted EPS, basic EPS is adjusted for the assumed issuance of all potentially dilutive securities. The dilutive effect of call options, warrants and share-based payment awards is calculated using the “treasury stock method,” which assumes that the “proceeds” from the exercise of these instruments are used to purchase common shares at the average market price for the period. The dilutive effect of traditional convertible debt and convertible preferred stock is calculated using the “if-converted method.” Under the if-converted method, securities are assumed to be converted at the beginning of the period, and the resulting common shares are included in the denominator of the diluted EPS calculation for the entire period being presented. The following table sets forth the computation of basic and diluted earnings (loss) per share: SCHEDULE OF BASIC AND DILUTED EARNINGS (LOSS) PER SHARE 2025 2024 Three Months Ended March 31, 2025 2024 Numerator: Net income (loss) attributable to LifeMD, Inc. common stockholders - basic $ 608,241 $ ( 7,544,918 ) Adjustment - - Net income (loss) attributable to LifeMD, Inc. common stockholders - diluted $ 608,241 $ ( 7,544,918 ) Denominator: Weighted average number of common shares outstanding - basic 43,135,778 39,242,237 Adjustment for the potential dilutive common shares 2,444,533 - Weighted average number of common shares outstanding - diluted 45,580,311 39,242,237 Basic earnings (loss) per share of common stock $ 0.01 $ ( 0.19 ) Diluted earnings (loss) per share of common stock $ 0.01 $ ( 0.19 ) 19 Basic net income (loss) per share is the same as diluted net income (loss) per share attributable to common stockholders for the three months ended March 31, 2024, 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 2025 2024 Three Months Ended March 31, 2025 2024 RSUs and RSAs 81,707 2,312,500 Stock options 354,052 2,159,750 Warrants 557,548 2,393,107 Convertible long-term debt 671,141 671,141 Total 1,664,448 7,536,498 NOTE 8 – LEASES The Company leases office space domestically under operating leases including: (1) the Company’s headquarters in New York, New York for which the lease expires in 2028, (2) a marketing and sales center in Huntington Beach, California for which the lease expires in 2027, (3) a patient care center in Greenville, South Carolina for which the lease expires in 2032, with an additional five year option to extend, for which the Company expects to utilize, and (4) a warehouse and pharmacy operations center in Lancaster, Pennsylvania for which the lease expires in 2029, with an additional five year option to extend, for which the Company expects to utilize. WorkSimpli leases two office spaces in Puerto Rico for which the leases expire in 2026. The following is a summary of the Company’s operating right-of-use assets and operating lease liabilities as of March 31, 2025: SCHEDULE OF OPERATING RIGHT OF USE OF ASSETS Right-of-use assets $ 6,104,863 Current operating lease liabilities $ 482,139 Noncurrent operating lease liabilities $ 6,186,692 The 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 March 31, 2025: SCHEDULE OF MATURITY OF OPERATING LEASE LIABILITIES Fiscal year 2025 $ 815,001 Fiscal year 2026 1,336,326 Fiscal year 2027 1,228,388 Fiscal year 2028 928,515 Fiscal year 2029 769,335 Thereafter 5,767,770 Less: imputed interest ( 4,176,504 ) Present value of operating lease liabilities $ 6,668,831 Operating lease expenses were approximately $ 411 thousand and $ 226 thousand for the three months ended March 31, 2025 and 2024, respectively, and were included in other operating expenses in our unaudited condensed consolidated statement of operations. Supplemental cash flow information related to operating lease liabilities consisted of the following: SCHEDULE OF CASH FLOW INFORMATION RELATED TO OPERATING LEASE LIABILITIES March 31, 2025 2024 Cash paid for operating lease liabilities $ 216,554 $ 227,028 Supplemental balance sheet information related to operating lease liabilities consisted of the following: March 31, 2025 December 31, 2024 Weighted average remaining lease term in years 10.37 10.39 Weighted average discount rate 10.94 % 10.96 % Additionally, the Company utilizes office space in Puerto Rico on a month-to-month basis incurring rental expense of approximately $ 3 thousand per month. 20 NOTE 9 - COMMITMENTS AND CONTINGENCIES Purchase Commitments Many of the Company’s vendors require product deposits when a purchase order is placed for goods or fulfillment services related to inventory requirements. The Company’s history of product deposits with its inventory vendors, creates an implicit purchase commitment equaling the total expected product acceptance cost in excess of the product deposit. As of March 31, 2025, the Company approximates its implicit purchase commitments to be $ 279 thousand. Legal Matters In the normal course of business operations, the Company may become involved in various legal matters. As of March 31, 2025, other than as set forth below, the Company’s management does not believe that there are any potential legal matters that could have an adverse effect on the Company’s consolidated financial position. On 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 brand. The Marden Complaint alleges, inter alia, unauthorized disclosure of certain information of class members to third parties. On November 21, 2023, the plaintiffs amended the Marden Complaint. On March 4, 2024, the Company moved to dismiss the Marden Complaint, and that motion is pending. On 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. 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. The results of legal proceedings are inherently uncertain, and the best estimate of cost is reflected in the Company’s financial results. On 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. The Company 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. On April 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. NOTE 10 – RELATED PARTY TRANSACTIONS WorkSimpli Software During the three months ended March 31, 2025 and 2024, the Company utilized CloudBoson Technologies Pvt. Ltd. (“CloudBoson”), formerly LegalSubmit Pvt. Ltd. (“LegalSubmit”), a company owned by WorkSimpli’s Chief Software Engineer, to provide software development services. The Company paid CloudBoson a total of approximately $ 878 thousand and $ 1.1 million during the three months ended March 31, 2025 and 2024, respectively, for these services. The Company owed CloudBoson $ 58 thousand as of March 31, 2025 and $ 56 thousand as of December 31, 2024. Legal Services During the three months ended March 31, 2025 and 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. The Company paid King & Spalding a total of approximately $ 0 and $ 317 thousand during the three months ended March 31, 2025 and 2024, respectively. The Company owed King & Spalding $ 0 as of both March 31, 2025 and December 31, 2024. Consulting Agreements On May 30, 2023, Will Febbo, a member of the Board of the Company, 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 three months ended March 31, 2025. On June 14, 2023, Naveen Bhatia, a former member of the Board of the Company, entered into a consulting services agreement with the Company, pursuant to which Mr. 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. The Company issued 56,250 restricted shares of common stock, with a fair value of $ 168 thousand, related to this agreement during the three months ended March 31, 2025. 21 On January 24, 2025, Mr. Bhatia, a former member of the Board of Directors, entered into a third 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 three months ended March 31, 2025. Employment Agreement Effective May 1, 2024, Brian Schreiber, Logistics & Fulfillment Advisor, and a relative of the Company’s Chief Executive Officer, entered into an amended employment agreement. Mr. 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 three months ended March 31, 2025 and 2024, the Company paid Mr. Schreiber approximately $ 55 thousand and $ 28 thousand, respectively, in connection with his employment. NOTE 11 – SEGMENT DATA Our portfolio of brands are included within two operating segments: Telehealth and WorkSimpli. Our CODM is our Chief Executive Officer. The 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. Relevant segment data for the three months ended March 31, 2025 and 2024 is as follows: SCHEDULE OF RELEVANT SEGMENT DATA Telehealth WorkSimpli Consolidated Three Months Ended March 31, 2025 Telehealth WorkSimpli Consolidated Revenue, net $ 52,456,481 $ 13,241,275 $ 65,697,756 Cost of revenue 8,136,462 507,254 8,643,716 Gross profit 44,320,019 12,734,021 57,054,040 Significant Segment Expenses: Selling and marketing expenses 22,272,922 6,921,139 29,194,061 Payroll expenses 8,218,051 628,665 8,846,716 Merchant processing fees 2,011,448 785,998 2,797,446 Other general and administrative expenses 7,190,795 1,276,439 8,467,234 Other segment items (1) 4,239,938 965,721 5,205,659 Segment operating income $ 386,865 $ 2,156,059 $ 2,542,924 Interest expense, net ( 463,638 ) ( 162,637 ) ( 626,275 ) Net (loss) income $ ( 76,773 ) $ 1,993,422 $ 1,916,649 Telehealth WorkSimpli Consolidated Three Months Ended March 31, 2024 Telehealth WorkSimpli Consolidated Revenue, net $ 30,841,402 $ 13,302,862 $ 44,144,264 Cost of revenue 4,194,595 405,582 4,600,177 Gross profit 26,646,807 12,897,280 39,544,087 Significant Segment Expenses: Selling and marketing expenses 16,066,559 8,107,321 24,173,880 Payroll expenses 5,691,930 1,410,402 7,102,332 Merchant processing fees 1,279,126 828,715 2,107,841 Other general and administrative expenses 6,335,094 1,352,470 7,687,564 Other segment items (1) 3,893,861 749,854 4,643,715 Segment operating (loss) income $ ( 6,619,763 ) $ 448,518 $ ( 6,171,245 ) Interest expense, net ( 476,807 ) ( 871 ) ( 477,678 ) Net (loss) income $ ( 7,096,570 ) $ 447,647 $ ( 6,648,923 ) (1) Other segment items include stock-based compensation and depreciation and amortization. Stock-based compensation expense for our Telehealth segment was $ 2.5 million for both the three months ended March 31, 2025 and 2024. Depreciation and amortization for our Telehealth segment was $ 1.7 million and $ 1.3 million for the three months ended March 31, 2025 and 2024, respectively, and for our WorkSimpli segment was $ 966 thousand and $ 750 thousand for the three months ended March 31, 2025 and 2024, respectively. 22 Total Assets March 31, 2025 December 31, 2024 Telehealth $ 63,669,612 $ 62,340,390 WorkSimpli 9,944,721 10,119,636 Consolidated $ 73,614,333 $ 72,460,026 Total Assets $ 73,614,333 $ 72,460,026 Total 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 $ 2.0 million and $ 1.4 million for our Telehealth segment during the three months ended March 31, 2025 and 2024, respectively, and $ 863 thousand and $ 802 thousand for our WorkSimpli segment during the three months ended March 31, 2025 and 2024, respectively. International net revenues totaled $ 4.1 million and $ 3.5 million for the three months ending March 31, 2025 and 2024, respectively, and relate to our WorkSimpli segment. NOTE 12 – SUBSEQUENT EVENTS Stock Issued for Service In April 2025, the Company issued 335,750 shares of common stock related to vested restricted stock with a total fair value of $ 1.9 million. OHHMD Asset Purchase Agreement On April 25, 2025, the Company, entered into and closed on an Asset Purchase Agreement (the “OHHMD Purchase Agreement”), by and among the Company; OHHMD, PLLC (the “Seller”), a North Carolina professional limited liability company; Doug Lucas, DO, the sole member of OHHMD; and LifeMD PC. Pursuant to the OHHMD Purchase Agreement, the Company acquired key assets from Optimal Human Health MD, a nationwide women’s health virtual care provider, that are used in the operation of, or related to, a virtual clinical practice focusing on women’s health and hormone replacement therapies (the “OHHMD Business”). The Company acquired the assets in exchange for 100,000 shares of the Company’s common stock, with 50,000 of those shares issued at closing, and 50,000 of those shares issued on the first anniversary of closing, and other nominal consideration. In addition, pursuant to the OHHMD Purchase Agreement, the Company agreed to make payments to Seller, contingent upon the achievement of certain milestones through the second anniversary of closing, if and when the OHHMD Business reaches and maintains certain levels of active patients with accompanying quarterly revenue (the “OHHMD Earn Out Consideration”). The OHHMD Earn Out Consideration would consist of 100,000 shares of the Company’s common stock, issued on the second anniversary of closing, if the OHHMD Business reaches 2,500 active patients with an accompanying quarterly revenue of at least $2.5 million and maintains this level for at least six full and consecutive calendar months on or prior to the eighteen-month anniversary of closing; and (ii) 100,000 shares of the Company’s common stock, issued on the second anniversary of closing if the OHHMD Business reaches 5,000 active patients with an accompanying quarterly revenue of at least $4.5 million and maintains this level for at least six full and consecutive calendar months on or prior to the second anniversary of closing. In connection with the OHHMD Purchase Agreement, LifeMD PC entered into a three-year employment agreement with Dr. Lucas, who will serve as the Company’s Vice President, Female Health & Clinical Operations, with the third year of employment on an “at-will” basis. Employment offers were also accepted by at least 75% of Seller’s employees and independent contractors. In April 2025, the Company issued 50,000 shares of common stock in connection with the OHHMD Purchase Agreement with a total fair value of $ 305 thousand. The Company expects to complete our valuation of OHHMD acquired assets, assumed liabilities and valuation of the purchase consideration in the second quarter of 2025. 23