What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-05 compared with 2025-05-06 · 530 added, 434 removed, 44 unchanged (96% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Note Regarding Forward-Looking Statements

The following discussion should

be read in conjunction with the financial statements and related notes contained elsewhere in this Quarterly Report on Form 10-Q.

statements made in this discussion are “forward-looking statements” within the meaning of 27A of the Securities Act of 1933,

as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange

These statements are based upon beliefs of, and information currently available to, the Company’s management as well

as estimates and assumptions made by the Company’s management.

Readers are cautioned not to place undue reliance on these forward-looking

statements, which are only predictions and speak only as of the date hereof.

When used herein, the words “anticipate,” “believe,”

“estimate,” “expect,” “forecast,” “future,” “intend,” “plan,”

“predict,” “project,” “target,” “potential,” “will,” “would,”

“could,” “should,” “continue” or the negative of these terms and similar expressions as they relate

to the Company or the Company’s management identify forward-looking statements.

Such statements reflect the current view of the

Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including the risks relating

to the Company’s business, industry, and the Company’s operations and results of operations.

Should one or more of these risks

or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ materially from those anticipated,

believed, estimated, expected, intended, or planned.

Although the Company believes

that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels

of activity, performance, or achievements.

Except as required by applicable law, including the securities laws of the United States, the

Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

Our unaudited condensed consolidated

financial statements are prepared in accordance with accounting principles generally accepted in the United States (“U.S.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Regarding Forward-Looking Statements

following discussion should be read in conjunction with the financial statements and related notes contained elsewhere in this Quarterly

Report on Form 10-Q.

Certain statements made in this discussion are “forward-looking statements” within the meaning of 27A

of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934,

as amended (the “Exchange Act”).

These statements are based upon beliefs of, and information currently available to, the

Company’s management as well as estimates and assumptions made by the Company’s management.

Readers are cautioned not to

place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof.

herein, the words “anticipate,” “believe,” “estimate,” “expect,” “forecast,”

“future,” “intend,” “plan,” “predict,” “project,” “target,” “potential,”

“will,” “would,” “could,” “should,” “continue” or the negative of these terms

and similar expressions as they relate to the Company or the Company’s management identify forward-looking statements.

Such statements

reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other

factors, including the risks relating to the Company’s business, industry, and the Company’s operations and results of operations.

Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results

may differ materially from those anticipated, believed, estimated, expected, intended, or planned.

the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future

results, levels of activity, performance, or achievements.

Except as required by applicable law, including the securities laws of the

United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the

United States (“U.S.

These accounting principles require us to make certain estimates, judgments and assumptions.

We believe that the estimates, judgments

and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and

assumptions are made.

These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date

of the unaudited condensed consolidated financial statements as well as the reported amounts of revenues and expenses during the periods

Our unaudited condensed consolidated financial statements would be affected to the extent there are material differences between

these estimates and actual results.

The following discussion should be read in conjunction with our financial statements and notes thereto

appearing elsewhere in this report.

Risk factors include, by way of

example and without limitation:

changes in the market acceptance of our products;

the impact of competitive products and pricing;

our ability to successfully commercialize our products on a large enough scale to generate profitable operations;

our ability to maintain and develop relationships with customers and suppliers;

our ability to respond to new technological developments quickly and effectively, including applications and risks of artificial intelligence (“AI”);

our ability to prevent, detect and remediate cybersecurity incidents;

our ability to protect our trade secrets or other proprietary rights, operate without infringing upon the proprietary rights of others and prevent others from infringing on our proprietary rights;

our ability to successfully acquire, develop or commercialize new products and equipment;

our ability to collaborate successfully with other businesses and to integrate acquired businesses or new brands;

supply chain constraints or difficulties;

current and potential material weaknesses in our internal control over financial reporting;

our need to raise additional funds in the future;

our ability to successfully recruit and retain qualified personnel;

the impact of industry regulation, including regulation of compounded medications, insurance claims, privacy and digital healthcare;

general economic and business conditions, including inflation, slower growth or recession;

changes in the political or regulatory conditions in the markets in which we operate;

business interruptions resulting from geo-political actions, including war, and terrorism or disease outbreaks.

Although we believe that the expectations

reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, or performance.

are urged to carefully review and consider the various disclosures made by us in this report and in our other reports filed with the Securities

and Exchange Commission (“SEC”).

We undertake no obligation to update or revise forward-looking statements to reflect changed

assumptions, the occurrence of unanticipated events or changes in the future operating results over time except as required by law.

believe that our assumptions are based upon reasonable data derived from and known about our business and operations.

No assurances are

made that actual results of operations or the results of our future activities will not differ materially from our assumptions.

Business Overview

We are a direct-to-patient telehealth

company providing a high-quality, cost-effective, and convenient way to access comprehensive, virtual and in-home healthcare.

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 much-needed medical care.

LifeMD 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.

The LifeMD telehealth platform

integrates best-in-class capabilities including a 50-state medical group, a nationwide pharmacy network, a wholly-owned affiliated commercial

pharmacy, nationwide laboratory and diagnostic testing capabilities, a fully integrated electronic medical records (“EMR”)

system and a patient care and service call center.

These capabilities are integrated by an industry-leading, proprietary telehealth technology

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

Currently, LifeMD treats approximately 291,000

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

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

treatments, as medically appropriate.

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

We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at

the time that these estimates, judgments and assumptions are made.

These estimates, judgments and assumptions can affect the reported

amounts of assets and liabilities as of the date of the unaudited condensed consolidated financial statements as well as the reported

amounts of revenues and expenses during the periods presented.

Our unaudited condensed consolidated financial statements would be affected

to the extent there are material differences between these estimates and actual results.

The following discussion should be read in conjunction

with our financial statements and notes thereto appearing elsewhere in this report.

factors include, by way of example and without limitation:

in the market acceptance of our products;

impact of competitive products and pricing;

ability to successfully commercialize our products on a large enough scale to generate profitable operations;

ability to maintain and develop relationships with customers and suppliers;

ability to respond to new technological developments quickly and effectively, including applications and risks of artificial intelligence

ability to prevent, detect and remediate cybersecurity incidents;

ability to protect our trade secrets or other proprietary rights, operate without infringing upon the proprietary rights of others

and prevent others from infringing on our proprietary rights;

ability to successfully acquire, develop or commercialize new products and equipment;

ability to collaborate successfully with other businesses and to integrate acquired businesses or new brands;

chain constraints or difficulties;

and potential material weaknesses in our internal control over financial reporting;

need to raise additional funds in the future;

ability to successfully recruit and retain qualified personnel;

impact of industry regulation, including regulation of compounded medications, insurance claims, privacy and digital healthcare;

economic and business conditions, including inflation, slower growth or recession;

in the political or regulatory conditions in the markets in which we operate;

interruptions resulting from geo-political actions, including war, and terrorism or disease outbreaks.

we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels

of activity, or performance.

Readers are urged to carefully review and consider the various disclosures made by us in this report and

in our other reports filed with the Securities and Exchange Commission (“SEC”).

We undertake no obligation to update or revise

forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in the future operating

results over time except as required by law.

We believe that our assumptions are based upon reasonable data derived from and known about

our business and operations.

No assurances are made that actual results of operations or the results of our future activities will not

differ materially from our assumptions.

are a direct-to-patient telehealth company providing a high-quality, cost-effective, and convenient way to access comprehensive, virtual

and in-home healthcare.

We believe 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 much-needed

medical care.

LifeMD 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.

LifeMD telehealth platform integrates best-in-class capabilities including a 50-state medical group, a nationwide pharmacy network, a

wholly-owned affiliated commercial pharmacy, nationwide laboratory and diagnostic testing capabilities, a fully integrated electronic

medical records (“EMR”) system and a patient care and service call center.

These capabilities are integrated by an industry-leading,

proprietary telehealth technology that supports a broad range of primary care, chronic disease and lifestyle healthcare needs.

LifeMD treats approximately 297,000 active patient subscribers across a range of their medical needs including primary care, men’s

sexual health, weight management, sleep, hair loss and hormonal therapy by providing telehealth clinical services and prescription and

over-the-counter (“OTC”) treatments, as medically appropriate.

Our virtual primary care services are primarily offered on

a subscription basis.

Since inception, we have helped approximately 1,261,000 customers and patients by providing them with greater access

to high-quality, convenient, and affordable care.

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

We believe our success has been, and will continue to be, attributable to an amazing patient experience, made possible by attracting

and retaining the highest-quality providers in the country, and our vertically integrated care platform.

As we continue to pursue long-term

growth, we plan to continue to introduce new telehealth product and service offerings that complement our already expansive treatment

June 2024, the Company launched the acceptance of private health insurance for its virtual primary care services, including weight management

for medically qualified patients.

Initially available in select states, the Company plans to continue enrollments with private payors

to facilitate access to medically necessary services, ultimately having broad coverage options across all 50 states.

In April 2025, the

Company expanded acceptance of insurance to Medicare beneficiaries for qualifying care.

Initially available to more than 21 million Medicare

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

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

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

Total revenue

from recurring subscriptions is approximately 94%.

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

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

WorkSimpli revenue from recurring

subscriptions is 100%.

Platform and Business Strategy

are a patient-centric telehealth company dedicated to delivering seamless end-to-end virtual healthcare directly to consumers and through

select enterprise (“B2B”) partnerships.

Our mission is facilitated by our robust technology platform that is purpose-built

to seamlessly connect the various touchpoints involved in delivering complex care, including scheduling for a national provider network,

an EMR system, secure synchronous and asynchronous communication, prescriptions, pharmacy and laboratory integrations, and more.

platform enables us to deliver modern personalized health experiences and offerings through our websites and mobile applications, spanning

customer discovery, purchase and connection with licensed providers, to pharmacy and OTC order fulfilment, through ongoing care.

that our seamless approach significantly reduces the complication, cost and time burden of healthcare, therefore incentivizing consumers

to stick with our brands.

offerings are sold to consumers on a primarily subscription basis, thus creating a relationship-driven patient experience to bolster

retention rates and recurring revenue.

Our offerings range from prescription medication and OTC products fulfilled on a recurring basis,

to primary care and weight management clinical services delivered by a team of dedicated medical providers.

In general, our offerings

seek to serve a patient throughout the lifecycle of their urgent, chronic, and lifestyle healthcare needs.

As appropriate, prescription

medications and OTC products are filled by our in-house mail order pharmacy or third-party pharmacy fulfilment partners, and are shipped

directly to patients.

platform also includes a robust customer relationship management (“CRM”) system, and performance marketing platform that

enables us to acquire and retain new patients and customers at scale by driving brand visibility through strategic media placements,

influencer partnerships, and direct response advertising methods across highly visible marketing channels ( i.e ., national TV,

streaming TV, streaming audio, YouTube, podcasts, Out of Home, print, magazines, online search, social media, and digital).

leverage our telehealth technology platform and services across the two core areas described below:

Direct-to-Patient

Telehealth Brands

leverage our telehealth platform’s affiliated provider network, pharmacy, and EMR capabilities across our direct-to-patient telehealth

Our core telehealth brands LifeMD and Rex MD target largely unaddressed or underserved healthcare needs and are leading destinations

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

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

across more than 200 conditions.

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

and chronic care needs.

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

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

coaching, integration with in-home tools and more.

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

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

LifeMD has served over 316,000 customers and

patients to date.

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.

Since inception,

we have helped more than 1,191,000 customers and patients by providing them with greater access to high-quality, convenient, and affordable

Our mission is to empower people

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

We believe our success has

been, and will continue to be, attributable to an amazing patient experience, made possible by attracting and retaining the highest-quality

providers in the country, and our vertically integrated care platform.

As we continue to pursue long-term growth, we plan to continue

to introduce new telehealth product and service offerings that complement our already expansive treatment areas.

In June 2024, the Company launched

the acceptance of private health insurance for its virtual primary care services, including weight management for medically qualified

Initially available in select states, the Company plans to continue enrollments with private payors to facilitate access to

medically necessary services, ultimately having broad coverage options across all 50 states.

In April 2025, the Company expanded acceptance

of insurance to Medicare beneficiaries for qualifying care.

Initially available to more than 21 million Medicare Part B beneficiaries

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

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

Our telehealth revenue increased

70% for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.

Total revenue from recurring subscriptions

is approximately 86%.

In addition to our telehealth business, we own 73.3% of WorkSimpli, which operates PDFSimpli, a software as a service

platform for converting, signing, editing, and sharing PDF documents.

WorkSimpli revenue from recurring subscriptions is 100%.

Our Platform and Business Strategy

We are a patient-centric telehealth

company dedicated to delivering seamless end-to-end virtual healthcare directly to consumers and through select enterprise (“B2B”)

partnerships.

Our mission is facilitated by our robust technology platform that is purpose-built to seamlessly connect the various touchpoints

involved in delivering complex care, including scheduling for a national provider network, an EMR system, secure synchronous and asynchronous

communication, prescriptions, pharmacy and laboratory integrations, and more.

Our platform enables us to deliver modern personalized health

experiences and offerings through our websites and mobile applications, spanning customer discovery, purchase and connection with licensed

providers, to pharmacy and OTC order fulfilment, through ongoing care.

We believe that our seamless approach significantly reduces the

complication, cost and time burden of healthcare, therefore incentivizing consumers to stick with our brands.

Our offerings are sold to consumers

on a primarily subscription basis, thus creating a relationship-driven patient experience to bolster retention rates and recurring revenue.

Our offerings range from prescription medication and OTC products fulfilled on a recurring basis, to primary care and weight management

clinical services delivered by a team of dedicated medical providers.

In general, our offerings seek to serve a patient throughout the

lifecycle of their urgent, chronic, and lifestyle healthcare needs.

As appropriate, prescription medications and OTC products are filled

by our in-house mail order pharmacy or third-party pharmacy fulfilment partners, and are shipped directly to patients.

The number of patients

and customers we serve across the nation continues to increase at a robust pace, with more than 1,191,000 individuals having purchased

our products and services to date.

Our platform also includes a robust

customer relationship management (“CRM”) system, and performance marketing platform that enables us to acquire and retain

new patients and customers at scale by driving brand visibility through strategic media placements, influencer partnerships, and direct

response advertising methods across highly visible marketing channels ( i.e ., national TV, streaming TV, streaming audio, YouTube,

podcasts, Out of Home, print, magazines, online search, social media, and digital).

our telehealth technology platform and services across the two core areas described below:

Direct-to-Patient Telehealth Brands

We leverage our telehealth platform’s

affiliated provider network, pharmacy, and EMR capabilities across our direct-to-patient telehealth brands.

Our core telehealth brands

LifeMD and Rex MD target largely unaddressed or underserved healthcare needs and are leading destinations in their respective treatment

verticals of virtual primary care and men’s health.

LifeMD is a telehealth brand that offers access

to virtual primary care and telehealth services, offering comprehensive healthcare solutions across more than 200 conditions.

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

LifeMD’s offering

is a mobile-first full-service destination that provides seamless access to comprehensive virtual medical care including on-demand consultations

and treatment, prescription medications, diagnostics and imaging, wellness coaching, integration with in-home tools and more.

This offering

is also supported by partnerships that provide our patients with benefits such as substantial discounts on lab work and a prescription

discount card.

LifeMD has served over 267,000 customers and patients to date.

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.

Since inception, our Weight Management Program has grown exponentially to

approximately 85,000 patient subscribers as of March 31, 2025, remaining at the forefront of the rapidly growing GLP-1 weight loss market,

with our highly differentiated and comprehensive offering.

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 - which is expected to grow

the program’s addressable market.

As part of its commitment to increasing access to branded prescription GLP-1 medications, we have developed an electronic benefits verification program that allows patients to check pharmacy benefits verification upon enrolling in a LifeMD virtual care program.

Secondly, we have partnered with an AI-powered platform that optimizes prior authorization submissions and appeals to improve approval rates for patients.

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

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

2024, we expanded our Weight Management Program with a personalized, non-GLP-1 treatment plan consisting of three oral medications

– metformin, bupropion, and topiramate - which is expected to grow the program’s addressable market.

part of its commitment to increasing access to branded prescription GLP-1 medications, we have developed an electronic benefits verification

program that allows patients to check pharmacy benefits verification upon enrolling in a LifeMD virtual care program.

have partnered with an AI-powered platform that optimizes prior authorization submissions and aims to improve approval rates for

Thirdly, we are establishing direct integrations with branded manufacturers who are also committed to lower cost offerings.

These enhancements are designed to minimize delays in care, reduce barriers to accessing brand-name medications, and ensure that a broader range of patients can benefit from LifeMD’s offerings.

Rex MD is a men’s telehealth platform brand that offers access to virtual medical treatment for a variety of men’s health needs, including erectile dysfunction, premature ejaculation and hair loss.

After treatment from an affiliated licensed physician, if appropriate, one of our partner pharmacies will dispense and ship prescription medications and OTC products directly to the customer.

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

Rex MD has served more than 638,000 customers and patients to date.

ShapiroMD is a legacy brand offering access to virtual medical treatment, prescription medications, patented doctor formulated OTC products, topical compounded medications, and Food and Drug Administration (“FDA”) approved medical devices treating male and female hair loss through our telehealth platform.

ShapiroMD is a leading destination for hair loss treatment across the United States (“U.S.”) and has served approximately 265,000 customers and patients to date.

To support our telehealth brands,

in November 2024 we announced the opening of a state-of-the-art wholly-owned affiliated commercial pharmacy, marking an important milestone

in creating a fully integrated, end-to-end telehealth platform.

This 22,500-square-foot facility, located in Lancaster, PA and designed

to fill up to 5,000 daily prescriptions, allows us to offer patients a more cohesive care journey for relevant conditions from initial

consultation to prescription fulfillment within a single integrated ecosystem.

B2B Telehealth Partnerships

Organizations selling healthcare

products face a challenging commercial landscape.

Increased competition, shrinking market sizes, and challenges reaching patients via

the traditional brick-and-mortar physician offices are forcing pharmaceutical, medical device, and diagnostic companies to rethink their

commercial strategies and increase their focus on digital patient awareness and engagement initiatives.

It is estimated that spending

on digital solutions to facilitate greater access to end markets accounts for one-third of the collective $30 billion commercial spend

by these companies in the U.S.

These enhancements are designed to minimize delays in care, reduce barriers to accessing brand-name medications, and ensure that

a broader range of patients can benefit from LifeMD’s offerings.

MD is a men’s telehealth platform brand that offers access to virtual medical treatment for a variety of men’s health

needs, including erectile dysfunction, premature ejaculation and hair loss.

After treatment from an affiliated licensed physician,

if appropriate, one of our partner pharmacies will dispense and ship prescription medications and OTC products directly to the customer.

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

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

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

topical compounded medications, and Food and Drug Administration (“FDA”) approved medical devices treating male and female

hair loss through our telehealth platform.

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

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

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

marking an important milestone in creating a fully integrated, end-to-end telehealth platform.

This 22,500-square-foot facility, located

in Lancaster, PA and designed to fill up to 5,000 daily prescriptions, allows us to offer patients a more cohesive care journey for relevant

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

Telehealth Partnerships

Organizations

selling healthcare products face a challenging commercial landscape.

Increased competition, shrinking market sizes, and challenges reaching

patients via the traditional brick-and-mortar physician offices are forcing pharmaceutical, medical device, and diagnostic companies

to rethink their commercial strategies and increase their focus on digital patient awareness and engagement initiatives.

It is estimated

that spending on digital solutions to facilitate greater access to end markets accounts for one-third of the collective $30 billion commercial

spend by these companies in the U.S.

We believe LifeMD’s unique telehealth technology platform and virtual care expertise is well-positioned

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

During the three months ended

March 31, 2025, LifeMD executed its integration with LillyDirect’s (“Lilly”) pharmacy provider, Gifthealth, to offer

streamlined access of single-dose vials of Lilly’s prescription obesity treatment Zepbound® (tirzepatide) to the Company’s

eligible patients.

Majority Owned Subsidiary:

WorkSimpli is a leading provider

of workplace and document services for consumers, gig workers, and small businesses.

WorkSimpli operates the following brands:

(1) PDFSimpli,

an online software as a service platform that allows users to create, edit, convert, sign, and share PDF documents, (2) ResumeBuild, a

leading provider of digital resume and cover letter services, (3) SignSimpli, a digital signature platform and (4) LegalSimpli, a provider

of legal forms for consumers and small businesses.

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

interest in WorkSimpli is 73.3%.

WorkSimpli had more than 158,000 active subscriptions as of March 31, 2025.

Results of Operations

Our financial results for the

three months ended March 31, 2025 are summarized as follows in comparison to the three months ended March 31, 2024:

March 31, 2025

March 31, 2024

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

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

to the Company’s eligible patients.

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

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

Owned Subsidiary:

is a leading provider of workplace and document services for consumers, gig workers, and small businesses.

WorkSimpli operates the following

(1) PDFSimpli, an online software as a service platform that allows users to create, edit, convert, sign, and share PDF documents,

(2) ResumeBuild, a leading provider of digital resume and cover letter services, (3) SignSimpli, a digital signature platform and (4)

LegalSimpli, a provider of legal forms for consumers and small businesses.

As a result of a series of restructuring transactions, the

Company’s ownership interest in WorkSimpli is 73.3%.

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

of Operations

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

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

June 30, 2025

June 30, 2024

Telehealth revenue, net

7 unchanged sentences

Customer service expenses

Development costs

Other operating expenses

Development costs

Total expenses

Operating income (loss)

Operating loss

Interest expense, net

Net income (loss)

Net income attributable to non-controlling interest

Net income (loss) attributable to LifeMD, Inc.

Net loss attributable to LifeMD, Inc.

Preferred stock dividends

Net income (loss) attributable to LifeMD, Inc.

Net loss attributable to LifeMD, Inc.

common stockholders

$ (2,851,436 )

$ (7,652,202 )

revenue, net.

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

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

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

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

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

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

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

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

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

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

due to an increase in online sales demand.

cost of revenue.

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

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

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

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

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

The combined cost of revenue increase was due to increased sales

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

Telehealth costs increased

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

during the three months ended June 30, 2024.

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

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

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

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

Gross profit as a percentage of revenues was approximately 88%

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

Gross profit as a

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

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

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

to the increase in gross profit.

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

as a percentage of telehealth revenue.

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

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

This represents an increase of 7%, or approximately $3.7 million.

is primarily attributable to:

and marketing expenses:

This mainly consists of online marketing and advertising expenses.

During the three months ended June 30,

2025, the Company had an increase of approximately $2.7 million, or 10% in selling and marketing costs resulting from additional

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

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

revenue subscription-based sales model.

service expenses:

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

in South Carolina.

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

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

operating expenses:

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

and bank charges.

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

primarily related to increases in software subscriptions.

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

During the three

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

platform improvements and amortization expenses.

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

This category mainly consists

of stock-based compensation expense, merchant processing fees, payroll expenses for corporate employees, taxes and licenses, amortization

expense and legal and professional fees.

During the three months ended June 30, 2025, the Company had a decrease of approximately $956

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

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

expense, net.

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

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

and notes payable, partially offset by interest income on the Company’s cash account balances for the three months ended June 30,

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

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

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

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

June 30, 2025

June 30, 2024

Telehealth revenue, net

$ 101,020,153

WorkSimpli revenue, net

Total revenue, net

the three months ended March 31, 2025 were approximately $65.7 million, an increase of 49% compared to approximately $44.1 million for

the three months ended March 31, 2024.

The increase in revenues was attributable to the increase in telehealth revenue of 70%.

revenue accounts for 80% of total revenue and has increased during the three months ended March 31, 2025 due to an increase in online

sales demand primarily for LifeMD primary care which experienced an increase of approximately $22.5 million during the three months ended

March 31, 2025 compared to the three months ended March 31, 2024.

WorkSimpli revenue accounts for 20% of total revenue and has stayed

consistent year over year.

Cost of telehealth revenue

Cost of WorkSimpli revenue

Total cost of revenue

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

consult fees, and shipping costs directly attributable to our prescription and OTC products and (2) WorkSimpli revenue consisting primarily

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

Total cost of revenue increased

by approximately 88% to approximately $8.6 million for the three months ended March 31, 2025 compared to approximately $4.6 million for

the three months ended March 31, 2024.

The combined cost of revenue increase was due to increased sales volume during the three months

ended March 31, 2025 when compared to the three months ended March 31, 2024.

Telehealth costs increased to 16% of associated telehealth

revenues experienced during the three months ended March 31, 2025, from 14% of associated telehealth revenues during the three months

ended March 31, 2024.

WorkSimpli costs increased to 4% of associated WorkSimpli revenues for the three months ended March 31, 2025 as

compared to 3% of associated WorkSimpli revenues for the three months ended March 31, 2024.

Gross profit.

Gross profit increased

by approximately 44% to approximately $57.1 million for the three months ended March 31, 2025 compared to approximately $39.5 million

for the three months ended March 31, 2024.

Gross profit as a percentage of revenues was approximately 87% for the three months ended March

31, 2025 as compared to approximately 90% for the three months ended March 31, 2024.

Gross profit as a percentage of revenues for telehealth

was 84% for the three months ended March 31, 2025 compared to 86% for the three months ended March 31, 2024, and for WorkSimpli was 96%

for the three months ended March 31, 2025 compared to 97% for the three months ended March 31, 2024.

The increase in sales volume and

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

in gross profit.

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

of telehealth revenue.

Total expenses.

Operating expenses

for the three months ended March 31, 2025 were approximately $54.5 million, as compared to approximately $45.7 million for the three months

ended March 31, 2024.

This represents an increase of 19%, or approximately $8.8 million.

The increase is primarily attributable to:

Selling and marketing expenses

This mainly consists of online marketing and advertising expenses.

During the three months ended March 31, 2025, the Company had an increase of approximately $5.0 million, or 21% in selling and marketing costs resulting from additional sales and marketing initiatives to drive the current period’s sales growth primarily for LifeMD virtual primary care.

This ramp up is expected to both increase and maintain sustained revenue growth in future years, based on the Company’s recurring revenue subscription-based sales model.

General and administrative expenses

This category mainly consists of stock-based compensation expense, merchant processing fees, payroll expenses for corporate employees, taxes and licenses, amortization expense and legal and professional fees.

During the three months ended March 31, 2025, the Company had an increase of approximately $1.7 million in general and administrative expenses, primarily related to increases in compensation costs of $1.7 million and merchant processing fees of $690 thousand, partially offset by a reduction in legal and professional fees of $626 thousand.

Customer service expenses

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

During the three months ended March 31, 2025, the Company had an increase of approximately $1.2 million, or 66%, primarily related to increases in infrastructure costs and compensation costs due to increased headcount to support the Company’s growth.

Development costs:

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

During the three months ended March 31, 2025, the Company had an increase of approximately $588 thousand, or 28%, primarily resulting from technology platform improvements and amortization expenses.

Other operating expenses

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

During the three months ended March 31, 2025, the Company had an increase of approximately $214 thousand, or 9%, primarily related to increases in software subscriptions.

Development costs

Total expenses

Operating income (loss)

(12,476,811 )

Interest expense, net

expense, net consists of interest expense related to the Avenue Facility, partially offset by interest income on the Company’s cash

account balances for the three months ended March 31, 2025 and interest expense related to the Avenue Facility and notes payable, partially

offset by interest income on the Company’s cash account balances for the three months ended March 31, 2024.

Interest expense increased

by approximately $149 thousand during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily

due to an increase in interest expensed on the Avenue Facility during the three months ended March 31, 2025.

Working Capital

March 31, 2025

Net income (loss)

(13,485,957 )

Net income attributable to non-controlling interest

Net loss attributable to LifeMD, Inc.

(13,643,995 )

Preferred stock dividends

Net loss attributable to LifeMD, Inc.

common stockholders

$ (2,243,195 )

$ (15,197,120 )

revenue, net.

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

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

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

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

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

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

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

due to a reduction in online sales demand.

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

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

in online sales demand.

cost of revenue.

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

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

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

Total cost of revenue increased by approximately 67% to approximately $16.1 million for the six months ended June 30, 2025 compared to

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

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

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

Telehealth costs increased to 15% of associated

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

months ended June 30, 2024.

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

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

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

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

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

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

Gross profit as a percentage

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

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

The increase in

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

to the increase in gross profit.

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

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

a percentage of telehealth revenue.

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

million for the six months ended June 30, 2024.

This represents an increase of 13%, or approximately $12.5 million.

The increase is primarily

attributable to:

and marketing expenses:

This mainly consists of online marketing and advertising expenses.

During the six months ended June 30, 2025,

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

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

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

subscription-based sales model.

and administrative expenses:

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

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

During the six months

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

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

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

service expenses:

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

in South Carolina.

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

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

operating expenses:

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

and bank charges.

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

related to increases in software subscriptions.

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

During the six

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

platform improvements and amortization expenses.

expense, net.

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

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

and notes payable, partially offset by interest income on the Company’s cash account balances for the six months ended June 30,

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

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

June 30, 2025

December 31, 2024

4 unchanged sentences

$ (11,522,056 )

Working capital increased by approximately

$593 thousand during the three months ended March 31, 2025.

The increase in current assets is primarily attributable to an increase in

accounts receivable of approximately $2 million, partially offset by a decrease in cash of approximately $611 thousand and a decrease

in other current assets of approximately $445 thousand.

Current liabilities increased by approximately $646 thousand, which was primarily

attributable to an increase in current portion of long-term debt of approximately $3.2 million and an increase in deferred revenue of

approximately $145 thousand, partially offset by a decrease in accounts payable and accrued expenses of approximately $2.6 million.

Liquidity and Capital Resources

Three Months Ended March 31,

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

The increase in current assets is primarily

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

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

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

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

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

and Capital Resources

Six Months Ended June 30,

Net cash provided by operating activities

1 unchanged sentence

Net cash used in financing activities

Net (decrease) increase in cash

Net cash provided by operating

activities was approximately $3.1 million for the three months ended March 31, 2025, as compared with approximately $5.2 million for the

three months ended March 31, 2024.

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

months ended March 31, 2025, include:

(1) the Company’s net income of $1.9 million, (2) $2.8 million in non-cash depreciation and

amortization and (3) $2.5 million in non-cash stock-based compensation charges, partially offset by a decrease in accounts payable and

accrued expenses of $2.6 million.

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

months ended March 31, 2024, include:

(1) an increase in deferred revenue of $4.4 million, (2) an increase in accounts payable and accrued

expenses of $2.6 million, (3) $2.5 million in non-cash stock-based compensation charges and (4) $2.2 million in non-cash depreciation

and amortization, partially offset by the Company’s net loss of $6.6 million.

used in investing activities for the three months ended March 31, 2025 was approximately $2.9 million, as compared with approximately

$2.2 million for the three months ended March 31, 2024.

Net cash used in investing activities for the three months ended March 31, 2025,

was due to cash paid for capitalized software costs of approximately $2.7 million, and cash paid for the purchase of equipment of approximately

Net increase in cash

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

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

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

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

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

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

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

of $2.7 million.

The significant factors contributing to the net cash provided by operating activities during the six months ended June

30, 2024, include:

(1) $6.7 million in non-cash stock-based compensation charges, (2) an increase in deferred revenue of $6.3 million,

(3) an increase in accounts payable and accrued expenses of $5.4 million and (4) $4.6 million in non-cash depreciation and amortization.

These increases were partially offset by the Company’s net loss of $13.5 million for the six months ended June 30, 2024.

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

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

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

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

$918 thousand.

Net cash used in investing activities for the three months ended March 31, 2024, was due to cash paid for capitalized software

costs of approximately $2.0 million, and cash paid for the purchase of equipment of approximately $176 thousand.

Net cash used in financing activities

for the three months ended March 31, 2025 was approximately $813 thousand as compared with approximately $1.0 million for the three months

ended March 31, 2024.

Net cash used in financing activities for the three months ended March 31, 2025, consisted of:

(1) preferred stock

dividends of $777 thousand, and (2) distributions to non-controlling interest of $36 thousand.

Net cash used in financing activities for

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

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

approximately $212 thousand, (3) distributions to non-controlling interest of $36 thousand, and (4) the final contingent consideration

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

of approximately $8 thousand.

Liquidity and Capital Resources Outlook

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 and obtaining funding from third-party

sources or the issuance of additional shares of common stock.

Our primary short-term and long-term requirements for liquidity and capital

are for customer acquisitions, funding business acquisitions and investments we may make from time to time, working capital including

our noncancelable operating lease obligations, long-term debt obligations, capital expenditures and general corporate purposes.

information on our operating lease obligations, see Note 8—Leases to our unaudited condensed consolidated financial statements included

in this report.

There can be no assurances that we will be successful in increasing revenues, improving operational efficiencies, or that

financing will be available or, if available, that such financing will be available under favorable terms.

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,

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”.

Net cash used in investing activities for the six months ended June 30, 2024, was primarily due to cash paid for capitalized

software costs of approximately $4.5 million, and cash paid for the purchase of equipment of approximately $818 thousand.

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

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

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

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

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

Net cash used in financing activities for the six

months ended June 30, 2024, consisted of:

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

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

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

$108 thousand.

and Capital Resources Outlook

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 and

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

Our primary short-term and long-term

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

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

and general corporate purposes.

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

consolidated financial statements included in this report.

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

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

favorable terms.

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 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 Avenue Facility matures on October 1, 2026.

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

stock at an exercise price of $1.24, subject to adjustments.

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.

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 $19.0 million outstanding

under the Avenue Facility.

The Company entered into an At

Market Issuance Sales Agreement (the “ATM Sales Agreement”) with B.

The Company issued Avenue warrants

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

has been exercised.

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

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

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

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

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

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

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

the Avenue Facility.

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

common stock.

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

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

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

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

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

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

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

As of June 30, 2025, there

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

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

Riley Securities, Inc.

and Cantor Fitzgerald & Co.

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.

May 5, 2025, the Company has a current cash balance of approximately $24.5 million.

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

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 June 30, 2025, the Company had $53.3 million

available under the ATM Sales Agreement, which is part of the $150.0 million available under the 2024 Shelf.

Refer to Note 13-Subsequent

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

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

The Company reviewed its forecasted operating

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

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

Positive indicators that lead to

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

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”).

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.

Critical Accounting Estimates

our unaudited condensed consolidated financial statements in accordance with U.S.

generally accepted accounting principles, which require

our management to make estimates that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities

at the balance sheet dates, as well as the reported amounts of revenues and expenses during the reporting periods.

To the extent that

there are material differences between these estimates and actual results, our financial condition or results of operations would be affected.

We base our estimates on our own historical experience and other assumptions that we believe are reasonable after taking into account

our circumstances and expectations for the future based on available information.

We evaluate these estimates on an ongoing basis.

an accounting estimate to be critical if:

(i) the accounting estimate requires us to make assumptions about matters that were highly uncertain

at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period

or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial

condition or results of operations.

There are items within our financial statements that require estimation but are not deemed critical,

as defined above.

Our significant accounting policies

are more fully described in Note 2—Basis of Presentation and Summary of Significant Accounting Policies to our unaudited condensed

consolidated financial statements included in this report.

We believe that these accounting policies are critical for one to fully understand

and evaluate our financial condition and results of operations.

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.

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

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

Positive indicators that lead

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

(1) the Company’s continued strengthening of its revenues, reduction in losses and improvement of operational efficiencies across

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

six months ended June 30, 2025, (3) cash on hand of $36.2 million as of June 30, 2025, (4) $44.6 million available under the ATM Sales

Agreement as of August 4, 2025, which is part of the $150.0 million available under the 2024 Shelf,, (5) management’s ability

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

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

during the year ended December 31, 2024.

Accounting Estimates

prepare our unaudited condensed consolidated financial statements in accordance with U.S.

generally accepted accounting principles, which

require our management to make estimates that affect the reported amounts of assets, liabilities and disclosures of contingent assets

and liabilities at the balance sheet dates, as well as the reported amounts of revenues and expenses during the reporting periods.

the extent that there are material differences between these estimates and actual results, our financial condition or results of operations

would be affected.

We base our estimates on our own historical experience and other assumptions that we believe are reasonable after

taking into account our circumstances and expectations for the future based on available information.

We evaluate these estimates on

an ongoing basis.

consider an accounting estimate to be critical if:

(i) the accounting estimate requires us to make assumptions about matters that were

highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from

period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact

on our financial condition or results of operations.

There are items within our financial statements that require estimation but are

not deemed critical, as defined above.

significant accounting policies are more fully described in Note 2—Basis of Presentation and Summary of Significant Accounting

Policies to our unaudited condensed consolidated financial statements included in this report.

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:

(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 consolidated financial statements upon adoption.

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

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

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

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

Quantitative and Qualitative Disclosures about Market Risk

As a smaller reporting company,

we are not required to provide the information required by this Item.

a smaller reporting company, we are not required to provide the information required by this Item.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis