LFMD 10-K & 10-Q changes, risk factors and insider trading

We have incurred net losses onfrom aninception annualthrough basis2025. since our inception. We incurred net losses of $18.7 million and $17.8 million inFor the years year ended December 31, 20242025, andwe 2023,incurred respectively.a net loss from continuing operations of $10.2 million, compared to $23.2 million for the year ended December 31, 2024. We expect our costs will increase in the foreseeable future and we expect our losses will continue as we expect to invest significant additional funds towards growing our platform, growing our provider network, enhancing our pharmacy fulfillment system, and operating as a public company and as we continue to invest in increasing our customer base, hiring additional employees, and developing new products and technological capabilities to enhance our customers’ experience on our platform. These efforts may prove more expensive than we currently anticipate, and we may not succeed in increasing our revenue sufficiently to offset these higher expenses. To date, we have financed our operations principally from the sale of our equity, revenue from our platform, and the incurrence of indebtedness.

We mayare expanding the use of AI in our business, and challenges with properly managing its use could result in reputational harm, competitive harm, and legal liability, and adversely affect our results of operations.

We may use technologies such as generative AI to help us develop and market new products.products and we may in the future integrate additional AI solutions into our offerings, products and services. The importance of these applications is increasing over time. Our competitors or other third parties may incorporate AI into their products and offerings more quickly or more successfully than us, which could impair our ability to compete effectively and adversely affect our results of operations. Additionally, AI may generate content that is not relevant or useful to our users and can subject us to risks related to inaccurate content, discrimination, intellectual property infringement or misappropriation, data privacy and cybersecurity breaches, among others. If the content, analyses, or recommendations that AI applications assist in producing are or are alleged to be inaccurate, deficient, or biased, our business, financial condition and results of operations may be adversely affected. The use of AI applications has resulted in, and may in the future result in, cybersecurity incidents that implicate the personal medical and genetic data of patients analyzed within such applications. Any such cybersecurity incidents related to our use of AI applications to analyze personal data could adversely affect our reputation and results of operations. AI also presents emerging ethical issues and if our use of AI becomes controversial, we may experience brand or reputational harm, competitive harm, or legal liability. The rapid evolution of AI, including potential government regulation of AI and its various uses, will require significant resources to help us implement AI ethically in order to minimize unintended, harmful impact.

The markets for healthcare are intensely competitive, subject to rapid change and significantly affected by new product and technological introductions and other market activities of industry participants. We compete directly not only with other established telehealth providers but also traditional drug manufacturers and healthcare providers, pharmacies, and large retailers that sell non-prescription products, including, for example, nutritional supplements, vitamins, and hair care treatments. Our current competitors include traditional drug manufacturers healthcare providers expanding into the telehealth market, incumbent telehealth providers, as well as new entrants into our market that are focused on direct-to-consumer healthcare. Our competitors include enterprise-focused companies who may enter the direct-to-consumer healthcare industry, as well as direct-to-consumer healthcare providers. ManyNew ofdevelopments, oursuch currentas cloud computing, AI, and potentialmachine competitors maylearning, have greatermade nameit easier for competition to enter our markets due to lower up-front technology costs. The Presidential administration launched an online platform in February 2026, designed to provide lower cash prices for prescription drugs, with a heavy focus on GLP-1 medications for weight loss and brand recognition, longer operating histories, significantly greater resources than we do, and may be able to offer products and services similar to those offered on our platform at more attractive prices than we can. Further, our current or potential competitors may be acquired by third parties with greater available resources, which has recently occurred in our industry. As a result, our competitors may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards, or customer requirements and may have the ability to initiate or withstand substantial price competition. In addition, our competitors have established, and may in the future establish, cooperative relationships with vendors of complementary products, technologies, or services to increase the availability of their solutions in the marketplace.diabetes.

New competitors or alliances may emerge that have greater market share, a larger customer base, more widely adopted proprietary technologies, greater marketing expertise, and greater financial resources, which could put us at a competitive disadvantage. For example, some state and federal regulatory authorities lowered certain barriers to the practice of telehealth in order to make remote healthcare services more accessible in response to the COVID-19 pandemic. Although it is unclear whether these regulatory changes will be permanent or that they will have a long-term impact on the adoption of telehealth services by the general public or legislative and regulatory authorities, these changes may result in greater competition for our business. The lower barriers to entry may allow various new competitors to enter the market more quickly and cost effectively than before the COVID-19 pandemic. Additionally, we believe that the COVID-19 pandemic has introduced many new users to telehealth and further reinforced its benefits to potential competitors. We believe this may drive additional industry consolidation or collaboration involving competitors that may create competitors with greater resources and access to potential customers. In addition, traditional healthcare providers may evaluate and eventually pursue telehealth options that can be paired with their in-person capabilities. These industry changes could better position our competitors to serve certain segments of our current or future markets, which could create additional price pressure. In light of these factors, even if our offerings are more effective than those of our competitors, current or potential customers may accept competitive solutions in lieu of purchasing from us. If we are unable to successfully compete with existing and potential competitors, our business, financial condition, and results of operations could be adversely affected.

Our success depends in large part on our ability to attract and retain high-quality managementpersonnel in marketing, engineering, operations, healthcare, healthcare, regulatory, legal, finance and support functions. Competition for qualified employees is intense in our industry, particularly for engineers with expertise in areas like programming, machine learning and theartificial intelligence. The loss of even a few qualified employees, or an inability to attract, retain and motivate additional highly skilled employees required for the planned expansion of our business could harm our results of operations and impair our ability to grow. To attract and retain key personnel, we use various measures, including an equity incentive program for key executive officers and other employees. These measures may not be enough to attract and retain the personnel we require to operate our business effectively. We permit most of our employees to work remotely should their particular positions allow. While we believe that most of our operations can be performed remotely, there is no guarantee that we will be as effective while working remotely because our team is dispersed and many employees may have additional personal needs to attend to or distractions in their remote work environment. To the extent our current or future remote work policies result in decreased productivity, harm our company culture, or otherwise negatively affect our business, our financial condition and results of operations could be adversely affected.

Our services involve the storage and transmission of customers’ and our vendors’ proprietary information, sensitive or confidential data, including valuable intellectual property and personal information of employees, consumers, customers, and others, as well as the personal information (including health information and other sensitive information as defined under applicable laws) of our customers. Because of the extreme sensitivity of the information we store and transmit, the security features of our computer, network, and communications systems infrastructure are critical to the success of our business. A breach or failure of our security measures could result from a variety of circumstances and events, including third-party action, employee negligence or error, malfeasance, computer viruses, cyber-attacks by computer hackers, failures during the process of upgrading or replacing software and databases, power outages, hardware failures, telecommunication failures, user errors, or catastrophic events. Information security risks have generally increased in recent years because of the proliferation of new technologies and the increased sophistication and activities of perpetrators of cyber-attacks. AsWe cyberalso threatsutilize continueAI to evolve,provide weservices, and this technology may be requiredsusceptible to expendcybersecurity additional resources to further enhance our information security measures and/or to investigate and remediate any information security vulnerabilities. If our security measures fail or are breached, it could result in unauthorized persons accessing sensitive consumer or partner data (including personal information), a loss of or damage to our data, an inability to access data sources, or process data or provide our services to our customers. Such failures or breaches of our security measures, or our inability to effectively resolve such failures or breaches in a timely manner, could severely damage our reputation, adversely affect customers, vendors, or investor confidence in us, and reduce the demand for our services from existing and potential customers. In addition, we could face litigation, damages for contract breach, monetary penalties, or regulatory actions for violation of applicable laws or regulations, and incur significant costs for remedial measures to prevent future occurrences and mitigate past violations. Although we maintain insurance covering certain security and privacy damages and claim expenses, we may not carry insurance or maintain coverage sufficient to compensate for all liability and in any event, insurance coverage would not address the reputational damage that could result from a security incident.threats.

The U.S. healthcare industry is heavily regulated and closely scrutinized by federal, state and local governments. Comprehensive statutes and regulations govern the manner in which we provide and bill for services and collect reimbursement from governmental programs and private payors; our contractual relationships with LifeMD PC, other third-party providers, vendors, and customers; our marketing activities; and other aspects of our operations. Of particular importance are:

The products we sell and our third-party suppliers are subject to FDA regulations and other state and local requirements, and if we or our third party suppliers fail to comply with federal, state, and local requirements, ourwe abilitymay toface fulfillenforcement customers’ orders through our platform could be impaired.actions.

The products available through our platform, and the third-party suppliers and manufacturers of these products, are subject to extensive regulation by the FDA and state and local authorities, including pharmaceuticals, OTC drugs, OTC devices, cosmetics, and dietary supplements. These authorities can enforce regulations related to methods and documentation of the testing, production, compounding, control, quality assurance, labeling,labelling, packaging, sterilization, storage, and shipping of products. Government regulations specific to pharmaceuticals are wide ranging and govern, among other things: the ability to bring a pharmaceutical to market, the conditions under which it can be sold, the conditions under which it must be manufactured, and permissible claims that may be made for such product. With the FDA declaring GLP-1 shortages resolved, telehealth firms relying on compounded semaglutide or tirzepatide face “mass-marketed” drug enforcement. Furthermore, the FDA and FTC are increasingly issuing warning letters for “false and misleading” claims that compounded drugs are “identical” to branded versions. Failure to meet—or significant changes to—any federal, state, or local requirements attendant to the sales and marketing of a regulated product could result in enforcement actions, impede our ability to provide access to affected products, and have a material adverse effect on our business, financial condition and results of operations.

In addition, the Trump administration issued an executive order on February 11, 2025, called “Implementing the President’s ‘Department of Government Efficiency’ Workforce Optimization Initiative.” This Workforce Optimization Initiative may significantly reducereduced the size of the federal government workforce, including FDA workforce. This initiative couldhas resultresulted in fewer FDA staff available to review and approve new drug products. It is possible that the Workforce Optimization Initiative could significantly lengthen the time it takes to obtain FDA approval of a new medical device or drug product, which could inhibit our ability to offer access to new products.

We collect and transmit healthcare-related information to and from our customers, providers, and partner pharmacies in connection with the telehealth consultations conducted by the providers and prescription medication fulfillment by our partner pharmacies.pharmacies, and these efforts may be assisted by AI applications in certain instances. If the data that we provide to our customers, providers, or partner pharmacies are incorrect or incomplete or if we make mistakes in the capture or input of these data, our reputation may suffer and we could be subject to claims of liability for resulting damages. While we maintain insurance coverage, this coverage may prove to be inadequate or could cease to be available to us on acceptable terms, if at all. Even unsuccessful claims could result in substantial costs and the diversion of management resources. A claim brought against us that is uninsured or under-insured could harm our business, financial condition, and results of operations.

InNumerous addition, numerous other federal, state,state and foreignfederal laws and regulations protectgovern the confidentiality,collection, dissemination, use, privacy, confidentiality, security, availability, integrity, integrity and securityother processing of health information and other types of PII,personal data or personally identifiable information (“PII”), including without limitation the California Confidentiality of Medical Information Act and Washington State’s MHMDA. These laws and regulations in many cases are more restrictive than, and may not be preempted pre-empted by, HIPAA and its implementing rules. These laws and regulations are often uncertain, contradictory, and subject to changed or differing interpretations, and we expect new laws, rules and regulations regarding privacy, data protection, and information security to be proposed proposed and enacted in the future. This complex, dynamic legal landscape regarding privacy, data protection, and information security and AI creates significant compliance issues for us, the LifeMD PC and the providers and potentially exposes us to additional expense, adverse publicity, and liability. While we have implemented data privacy and security measures in an effort to comply with applicable laws and regulations relating to privacy and data protection, some health information and other PII or confidential information is transmitted to us by third parties, who may not implement adequate security and privacy measures, and it is possible that laws, rules, and regulations relating to privacy, data protection, or information security may be interpreted and applied in a manner that is inconsistent with our practices or those of third parties who transmit health information and other PII or confidential information to us. If we or these third parties are found to have violated such laws, rules or regulations, it could result in government-imposed fines, orders requiring that we or these third parties change our or their practices, or criminal charges, which could adversely affect our business. Complying with these various laws and regulations could cause us to incur substantial costs or require us to change our business practices, systems, and compliance procedures in a manner adverse to our business.

The regulatory framework for privacy and security issues worldwide is evolving and is likely to remain in flux for the foreseeable future.future, including the intersection of such issues with the integration of AI. Various government and consumer agencies have also called for new regulation and changes in industry practices and multiple U.S. states have passed comprehensive consumer privacy laws and consumer health privacy laws over the last three years. Practices regarding the registration, collection, processing, storage, sharing, disclosure, use, and security of personal and other information by companies offering an online service like our platform have recently come under increased public and regulatory scrutiny.

For example, the CCPA and nineteen other state consumer privacy laws require, among other things, covered companies to provide certain disclosures to consumers and afford such consumers new abilities to opt-out or sharing of personal information and limit the use of sensitive information, including health information. Similar legislation has been proposed or adopted in other states. Furthermore, state consumer health data privacy laws including Washington State’s MHMDA creates new data processing requirements specifically for consumer health data that is not subject to HIPAA, limiting how organizations may use a wide range of consumers’ health-related data, and requiring changes to how impacted organizations obtain consent and authorization to collect, process, and share such information. Aspects of the CCPA, the MHMDA, other comprehensive privacy laws, consumer health data privacy laws, and regulations, as well as their enforcement, remain unclear, and we may be required to modify our internal compliance and data-use practices in an effort to comply with them.

The regulatory framework for AI is evolving and is likely to remain in flux for the foreseeable future. InOver the last year, various government and consumer agencies have called for new regulation and changes in industry practices, while Colorado and other20 states have passed or are considering laws applicable to the development or use of AI systems. The development and adoption of these new laws may create significant compliance burdens or inhibit our ability to develop products and services that incorporate AI or do so in a cost-effective manner. Our business, including our ability to operate and to expand internationally, could be adversely affected if AI laws or regulations are adopted, interpreted, or implemented in a manner that is inconsistent with our current business practices and that require changes to these practices, the design of our websites, mobile applications, solutions, or other features. Our use of AI may also result in a risk of investigations or fines relating to noncompliance with these laws or require us to modify our solution or require us to stop offering certain features, all of which could negatively impact our acquisition of customers and revenue growth.

We are subject to legal proceedings and litigation, including intellectual property disputes, which are costly to defend and could materially harm our business and results of operations.

FromLitigation time to time, we are party to lawsuits and legal proceedings in the normal course of business. These matters are often expensive and disruptive to normal business operations. We may face allegations, lawsuits, and regulatory inquiries, audits, and investigations regarding data privacy, security, labor and employment, consumer protection, practice of medicine, and intellectual property infringement, including claims related to privacy, patents, publicity, trademarks, copyrights, and other rights. A portion of the technologies we use incorporates open source software, and we may face claims claiming ownership of open source software or patents related to that software, rights to our intellectual property or breach of open source license terms, including a demand to release material portions of our source code or otherwise seeking to enforce the terms of the applicable open source license. We may also face allegations or litigation related to our acquisitions, securities issuances, or business practices, including public disclosures about our business. Litigation and regulatory proceedings, and particularly the healthcare regulatory and class action matters we could face, may be protracted and expensive, and the results are difficult to predict. Certain of these matters may include speculative claims for substantial or indeterminate amounts amounts of damages and include claims for injunctive relief. Additionally, our litigation costs could be significant. Adverse outcomes with respect to litigation or any of these legal proceedings may result in significant settlement costs or judgments, penalties and fines, or require us to modify our solution or require us to stop offering certain features, all of which could negatively impact our acquisition of customers and revenue growth. We may also become subject to periodic audits, which could likely increase our regulatory compliance costs and may require us to change our business practices, which could negatively impact our revenue growth. Managing legal proceedings, litigation litigation and audits, even if we achieve favorable outcomes, is time-consuming and diverts management’s attention from our business.

Our substantialexisting leverage could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to to changes in the economy or our industry, expose us to interest rate risk to the extent of our variable rate debt and prevent us from meeting meeting our obligations.

As of December 31, 2024,2025, the Company had total liabilities of $76.5$47.3 million. As of December 31, 2024,2025, we had availability of $53.3$44.6 million under the ATM Sales Agreement (as defined below) and $150 million available under the 2024 Shelf (as defined below), after giving effect to letters of credit and borrowing base limitations.. We and our subsidiaries have the ability to incur additional indebtedness in the future, future, subject to the restrictions contained in our credit facilities and the indentures governing our outstanding notes. If new indebtedness is added to our current debt levels, interest rates and the related risks that we now face could intensify. Our ability to make scheduled payments on or to refinance our debt obligations depends on our financial condition and operating performance, which are subject to prevailing economic and competitive conditions, and to certain financial, business and other factors beyond our control. We cannot assure you we will maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness.

The Sarbanes-Oxleyrules Actand requires,regulations of the SEC require, among other things, that we maintain effective internal control over financial reporting and effective disclosure controls and procedures. In particular, under Section 404 of the Sarbanes-Oxley Act, we are required to perform system and process evaluation and testing onevaluate the effectiveness of our internal control over financial reporting,reporting and ourdisclosure independent registered public accounting firm is required to report on the effectiveness of our internal control over financial reporting. In performing this evaluationcontrols and testing, bothprocedures. our management andAdditionally, our independent registered public accounting firm concludedis required thatto our internal control over financial reporting is not effective as of December 31, 2024 because of material weaknesses and our independent registered public accounting firm expressed an adverse opinion onaudit the effectiveness of our internal control over financial reporting as of December 31, 2024.2025. Our management and our independent registered public accounting firm concluded that our internal control over financial reporting is not effective as of December 31, 2025 because of material weaknesses. See Part II, Item 9A., “Controls and Procedures”. We are,are however,focused addressing this issue and on remediating our material weaknesses. CorrectingRemediating this issue,the andmaterial thereafter our continued compliance with Section 404weaknesses will require that we incur substantial accounting expenseexpenses and expect to expend significant management efforts. Moreover, if we are not able to correctremediate our material weaknesses in internal control issues and comply with the requirementsover of Section 404 in a timely manner, or if we or our independent registered public accounting firm continues to identify deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses,reporting, the market price of our stock could decline, and we could be subject to sanctions or investigations by the SEC or other regulatory authorities, which would require additional financial and management resources. It could adversely affect our ability to report our financial condition and results of operations in a timely and accurate manner, which could negatively affect investor confidence in our company, and, as a result, the value of our common stock could be adversely affected.

In 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. AsIn partApril 2025, the Company expanded acceptance of itsinsurance earlyto Medicare beneficiaries for qualifying care. Initially available to more than 21 million Medicare 2025Part roadmap,B beneficiaries in 26 states, the Company expectshas continued investing in its Medicare Part B offering and now has the infrastructure in place to begindeliver acceptingqualifying Medicare.services to Medicare Part B beneficiaries across 49 states. The One Big Beautiful Bill Act (the “OBBBA”), which was signed in July 2025, permanently extends the safe harbor for high-deductible health plans to cover telehealth services before the deductible is met, effective for plan years starting on or after January 1, 2025. This ensures employees with health savings accounts can access, and employers can offer, pre-deductible virtual care without losing tax-advantaged status.

TotalTelehealth revenue, net. RevenuesTelehealth revenues for the year ended December 31, 20242025 were approximately $212.4$194.1 million, an increase of 39%25% compared to approximately $152.5 $154.8 million for the year ended December 31, 2023.2024. The increase in telehealth revenues was attributable to thean increase in online sales demand primarily related to telehealth subscription revenue which experienced an increase in telehealth revenue of 61%approximately slightly$45.6 offset by the decrease in WorkSimpli revenue of 1%. Telehealth revenue accounts for 75% of total revenue and has increasedmillion during the year ended December 31, 2024 due to an increase in online sales demand primarily for LifeMD virtual primary care which experienced an increase in revenue of approximately $65.7 million during the year ended December 31, 20242025 compared to the year ended December 31, 2023. WorkSimpli revenue accounts for 25% of total revenue and has decreased year over year due to lower demand.2024.

TotalCost costof oftelehealth revenue. Total cost of revenue consists of (1) the costCost of telehealth revenues, which primarily include product costs, pharmacy fulfillment fulfilment costs, physician consult fees, and shipping costs directly attributable to our prescription and OTC products and (2) the cost of 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 27%29% to approximately $24.1 $27.7 million for the year ended December 31, 2024 2025 compared to approximately $18.9$21.4 million for the year ended December 31, 2023.2024. The combined cost of telehealth revenue increase was due to increased telehealth sales volume during the year ended December 31, 20242025 when compared to the year ended December 31, 2023.2024. Telehealth costs decreased tostayed consistent at 14% of associated telehealth revenues during the year ended December 31, 2024, from 18% of associated telehealth revenues during the year ended December 31, 2023 primarily due to improved pricing. WorkSimpli costs increased to 5% of associated WorkSimpli revenues during the year ended December 31, 2024, from 3% of associated WorkSimpli revenues duringboth the year ended December 31, 2023.2025 and 2024.

Interest expense, net. Interest expense, net consists of interest expense on the Avenue Facility and(as notesdefined payable,below), partially offset by interest income on the Company’s cash account balances for the year ended December 31, 20242025 and interest expensedexpense related to the Avenue Facility Facility,and notes payablepayable, andpartially offset by interest income on the SeriesCompany’s Bcash Preferredaccount Stockbalances for the year ended December 31, 2023. 2024. Interest expense decreased by approximately $415 $814 thousand during the year ended December 31, 20242025 as compared to the year ended December 31, 20232024 primarily due to anthe increaseextinguishment in interest income onof the Company’sAvenue cashFacility accountduring balances.the year ended December 31, 2025.

Loss on debt extinguishment. The Company recorded a $325$1.2 thousandmillion loss on debt extinguishment related to the repayment of the CRGAvenue FinancialFacility loan during the year ended December 31, 20232025 due to a prepayment penalty and various fees associated with the CRGAvenue FinancialFacility. loan.There were no similar losses on debt extinguishment recorded during the year ended December 31, 2024.

Working Capital (Deficit)

Working capital decreasedincreased by approximately $19.3$25.3 million during the year ended December 31, 2024.2025. TheCurrent increaseassets indecreased by approximately $538 thousand, which was primarily attributable to a decrease of $3.4 million related to the Company’s current assets isof discontinued primarily attributableoperations tothat anwere increasesold on November 4, 2025 and a decrease in accounts receivable of approximately $2.9$1.2 million, partially offset by an increase in cash of approximately $1.9 million, and an increase in other current assets of approximately $1.7$4.1 million. Current liabilities increaseddecreased by approximately $25.5$25.8 million, which was primarily attributable to ana increase in accounts payable and accrued expensesdecrease of $11.8$8.9 million asrelated to the Company’s current liabilities of discontinued operations that were sold on November 4, 2025, a result of the Company extending payables and credit terms with vendors, an increasedecrease in the current portion of long-term debt of $8.4 million, anda andecrease increase in deferred revenue of approximately $5.7$6.3 millionmillion, dueand toa increasednet recurringdecrease telehealthin subscriptionaccounts revenue.payable and accrued expenses of $2.5 million.

Net cash usedprovided inby investing activities for the year ended December 31, 20242025 was approximately $11.5$6.9 million, as compared with $8.7 million for the year ended December 31, 2023. Netnet cash used in investing activities of $11.5 million for the year ended December 31, 20242024. Net cash provided by investing activities for the year ended December 31, 2025 was primarily due to net cash provided by investing activities of discontinued operations, including the net proceeds received from the WorkSimpli sale of $19.4 million, partially offset by cash paid for capitalized software costs of approximately $10.0 $7.6 million, and cash paid for the purchase of equipment of approximately $1.5 $1.9 million. Net cash used in investing activities for the year ended December 31, 20232024 was primarily due to cash paid for capitalized software costs of approximately $8.4$6.7 million,million and cash paid for the purchase of equipment of $204$1.5 thousandmillion. andNet cash paidused forin theinvesting purchase of intangible assetsactivities of approximatelydiscontinued $149operations thousand.was $3.3 million for the year ended December 31, 2024.

To date, the Company has been funding operations primarily through thecash salesgenerated offrom itsoperating products,activities, 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 911—Leases to our 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, “Avenue”). The Avenue Credit Agreement providesprovided 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.adjustments, of which $660 thousand have been exercised (the “Avenue Warrants”). In addition, Avenue may convert up toconverted $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 FinancialFinancial. On August 5, 2025, the Company paid the remaining $14.0 million in outstanding principal payments on the Avenue Facility and arethe expectedprepayment topenalty beas usednoted in the Avenue Credit Agreement. As of December 31, 2025, there is no outstanding balance on the Avenue Facility. The Company recorded a loss on debt extinguishment of $1.2 million within its consolidated financial statements for generalthe corporateyear purposes.ended December 31, 2025. As of December 31, 2025, $540 thousand Avenue Warrants remain outstanding.

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. During the year ended December 31, 2025, the Company sold 762,990 shares of common stock under the ATM Sales Agreement and net proceeds received were $8.7 million. As of December 31, 2024, 2025, the Company had $53.3$44.6 million available under the ATM Sales Agreement, which is part of the $150.0 million available under the 2024 Shelf.Agreement.

Our significant accounting policies are more fully described in Note 2— Basis of Presentation and Summary of Significant Accounting Policies to our 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.

In NovemberDecember 2023, the Financial Accounting Standards Board (“FASB”) issued AccountingASU Standards2023-09, UpdateIncome (“ASU”) 2023-07, Segment ReportingTaxes (Topic 280740).: TheImprovements to amendmentsIncome Tax Disclosures, to improve its income tax disclosure requirements. Under ASU 2023-09, entities must annually: (1) disclose specific categories in thisthe updaterate improvereconciliation reportableand segment(2) disclosureprovide requirements,additional primarilyinformation throughfor reconciling items that meet a quantitative enhanced disclosures about significant segment expenses.threshold. ASU 2023-072023-09 became effective for the Company’s annual period beginning on January 1, 2024 and interim periods beginning after January 1, 2025. The Company adopted this guidance in the fourth quarter of 2024. 2025 on a prospective basis. Refer to Note 13-Segment14—Income DataTaxes for additional information.

As of MarchJune 31,30, 2026, LifeMD served overapproximately 365,000356,000 active patient subscribers across a range of healthcare needs, including primary care, care, men’s and women’s health, hormone health, weight management, insomnia, dermatology and cardiology. We provide virtual clinical clinical services as well as prescription and over-the-counter (“OTC”) treatments, when medically appropriate.

Our virtual primary care services are primarily offered through a subscription model. Since inception, we have served approximatelymore 1,492,000than 1,552,000 patients and customers, expanding access to convenient, and high-quality healthcare.

In June 2024, we began accepting commercial and government health insurance for our virtual primary care services, including obesity-related care for medically qualified patients. As of MarchJune 31,30, 2026, our network coveredcovers approximately 112175 million lives,lives including approximatelycommercially 30 million Medicare Fee-for-Service beneficiaries. By June 1, 2026, we expect to expand coverage to approximately 230 millioninsured lives, representing approximately 80% of commercially insured lives in the U.S., 70% of Medicare Advantage beneficiaries, and Medicare Fee-for-Service beneficiaries.

The LifeMD brand is our flagship virtual primary care and specialty platform, having served overapproximately 514,000559,000 customers and patients to date. This brand provides patients with access to affiliated high-quality providers for their urgent care and chronic care needs. The LifeMD brand is a mobile-first full-service destination that provides seamless access to comprehensive virtual medical care including on-demand 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 direct integrations and collaborations with pharmaceutical manufacturers that offer patients convenient and affordable access to important medications. The LifeMD brand addresses high-growth and historically underserved healthcare verticals through defined specialty specialty care programs as noted below.

Our Weight Management Program, launched in April 2023 with a focus on GLP-1 medications, provides 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 to offer 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. Since inception, our Weight Management Program has grown exponentially to overapproximately 98,000108,000 patient subscribers as of MarchJune 31,30, 2026.

During the three months ended September 30, 2025, the Company identified and corrected errors related to the recording of net revenue as agent in certain arrangements with the Company’s third-party pharmacy providers as well as various out-of-period amounts included in our previously issued financial statements that were deemed to be quantitatively and qualitatively immaterial, individually and in the aggregate, to the financial statements in the periods recorded or to the relevant prior periods. Information presented in the tables below for the three and six months ended MarchJune 31,30, 2025 has been revised to reflect these corrections. See Note 3—Revisions to Previously Issued Financial Statements for more details.

OurComparison financial results forof the threeThree monthsMonths endedEnded MarchJune 31,30, 2026 are summarized as follows in comparison to the threeThree monthsMonths endedEnded MarchJune 31, 30, 2025:

TelehealthTotal revenue, net. Telehealth revenuesRevenues for the three months ended MarchJune 31,30, 2026 decreased bywere approximately 1%$47.3 tomillion, approximatelya $50.2decrease million of 4% compared to approximately $50.9 $49.0 million for the three months ended MarchJune 31,30, 2025. The decrease in revenues was attributable to a decrease in telehealth product revenue of approximately $1.0$2.0 million during the three months ended June 30, 2026 compared to the three months ended June 30, 2025 primarily due to a decrease in online sales demand partially offset by an increase in telehealth subscription revenue which experienced an increase of approximately $280 thousand during the three months ended March 31, 2026 compared to the three months ended March 31, 2025 primarily due to an increase in online sales demand.

Cost of telehealth revenue. Cost of telehealth revenue, which primarily includeincludes product costs, pharmacy fulfilment costs, physician consult fees, and shipping costs directly attributable to our prescription and OTC products decreased by approximately 27%23% to approximately $5.9$5.3 million for the three months ended MarchJune 31,30, 2026 compared to approximately $8.1$6.8 million for the three months ended MarchJune 31,30, 2025. The cost of telehealth revenue decrease was due to product mix, decreased telehealth product sales volume and decreased shipping costs during the three months ended MarchJune 31,30, 2026 when compared to the three months ended MarchJune 31,30, 2025. Telehealth costs were 12%11% of associated telehealth telehealth revenues during the three months ended MarchJune 31,30, 2026 compared to 16%14% of associated telehealth revenues during the three months ended endedJune March 31,30, 2025.

Gross profit. Gross profit increaseddecreased by 3%0.4% to approximately $44.2$42.0 million for the three months ended MarchJune 31,30, 2026 compared to approximately $42.8$42.2 million for the three months ended MarchJune 31,30, 2025. Gross profit as a percentage of revenues was approximately 88%89% for the three months ended MarchJune 31,30, 2026 as compared to approximately 84%86% for the three months ended MarchJune 31,30, 2025. The increase in gross profit as as a percentage of revenues was primarily due to product mix and decreased shipping costs on telehealth product revenues in the three months months ended MarchJune 31,30, 2026.

Total expenses. Operating expenses for the three months ended MarchJune 31,30, 2026 were approximately $53.2$49.1 million, as compared to approximately $43.9$44.5 million for the three months ended MarchJune 31,30, 2025. This represents an increase of 21%,10%, or approximately $9.2$4.6 million. The increase is primarily attributable to:

The above increases in operating expenses were partially offset by the following decreasedecreases in operating expenses:

Interest income (expense), net. Interest income (expense), net consists of interest income on the Company’s cash account balances for the three months ended MarchJune 31,30, 2026 and interest expense on the Avenue Facility, partially offset by interest income on the Company’s cash account balances for the three months ended MarchJune 31,30, 2025. Interest income was approximately $56$46 thousand for the three months ended endedJune March 31,30, 2026 compared to interest expense of $464$661 thousand for the three months ended MarchJune 31,30, 2025. The Company extinguished the Avenue Facility on August 5, 2025.

Working capital decreased by approximately $8.1$14.8 million during the threesix months ended MarchJune 31,30, 2026. The decrease in current assets is primarily attributable to a decrease in cash of $2.3$11.6 million, partially offset by an increase in other current assets of $1.2 million and an increase in accounts receivable of $550$2.0 thousand.million. Current liabilities increased by $8.0$5.0 million, which was primarily attributable to an increase in accounts payable and accrued expenses of $6.8 million and an increase in deferred revenue of $1.2 $5.0 million.

Net cash used in investing activities for the threesix months ended MarchJune 31,30, 2026 was approximately $2.1$3.7 million, as compared with approximately $2.9$6.6 million for the threesix months ended MarchJune 31,30, 2025. Net cash used in investing activities for the threesix months ended MarchJune 31,30, 2026, was was due to cash paid for capitalized software costs of approximately $2.0$3.5 million, and cash paid for the purchase of equipment of approximately $105$173 thousand. Net cash used in investing activities for the threesix months ended MarchJune 31,30, 2025, was due to cash paid for capitalized software costs of approximately $1.9$3.9 million, and cash paid for the purchase of equipment of approximately $118$894 thousand. Net cash used in investing activities of discontinued operations was $863$1.7 thousandmillion for the threesix months ended MarchJune 31,30, 2025.

Net cash used in financing activities for the threesix months ended MarchJune 31,30, 2026 was approximately $696$1.5 thousandmillion as compared with approximately $813$3.9 thousandmillion for the threesix months ended MarchJune 31,30, 2025. Net cash used in financing activities for the threesix months ended MarchJune 31,30, 2026, consisted consisted of preferred stock dividends of $777$1.6 thousandmillion partially offset by $81 thousand of cash proceeds received from the exercise of options. Net cash used in financing activities for the threesix months ended MarchJune 31,30, 2025, consisted of: (1) principal repayments on the Avenue Credit Agreement of approximately $2.1 million and (2) preferred stock dividends of $777 thousand.$1.6 million. Net cash used in financing activities of discontinued operations was $36$312 thousand for the threesix months ended MarchJune 31, 30, 2025.

On January 2, 2026, the Company entered into a Credit Agreement (the “Credit Agreement”) with Citizens Bank, N.A. (“Citizens”), which provides for a senior secured revolving credit facility in an aggregate outstanding amount not exceeding $30 million (the “Credit Facility”) tofor support potentialgeneral corporate development and/or shareholder value creation initiatives.purposes. The Credit Facility may be increased in the aggregate principal amount of up to $20 million on the terms and subject to the conditions described in the Credit Agreement. In connection with the Credit Agreement, among other things, the Company issued a revolving loan note to Citizens for any loans that may be made under the Credit Facility. Additionally, among other things, the Company and its subsidiaries entered into a pledge and security agreement and a guarantee agreement to provide credit support for the Credit Facility. The Credit FacilityAgreement requiresrequired the Company to maintain (i) a Consolidated Leverage Ratio not to exceed 2.50 to 1.00 and (ii) a Consolidated Interest Coverage Ratio of at least 3.00 to 1.00.1.00, in each case commencing with the quarter ended March 31, 2026. As of March 31, 2026, the Company was in compliance with the Consolidated Leverage Ratio covenant and was out of compliance with the Consolidated Interest Coverage Ratio covenant contained in the Credit Facility,Agreement. On June 30, 2026, the Company entered into the Waiver and First Amendment to the Credit Agreement (“Credit Agreement Waiver and First Amendment”) with Citizens. Under the terms of the Credit Agreement Waiver and First Amendment, the Company received a waiver of any Event of Default which ishas occurred as a result of the ratioCompany’s ofnon-compliance (a)with the Consolidated EBITInterest Coverage Ratio covenant as of the Company and its Subsidiaries for the most recently completed four consecutive fiscal quarters ended March 31, 2026,2026. toAdditionally, the (b)Credit Agreement Waiver and First Amendment further amends the Credit Agreement by removing the Consolidated Interest ExpenseCoverage ofRatio test and requiring the Company to maintain (i) a Consolidated Leverage Ratio not to exceed 2.50 to 1.00, (ii) a Consolidated Fixed Charge Coverage Ratio of at least 1.25 to 1.00, and (iii) the sum of its SubsidiariesCash foron Hand and Unused Availability of at least $40 million, in each case, commencing with the most recently completed four consecutive fiscal quartersquarter ended MarchSeptember 31, 30, 2026, aswith those capitalized terms areas defined in the Credit Agreement.Agreement Compliance with the Consolidated Interest Coverage Ratio was adversely impacted by an increase of approximately $7.6 million, or 34%, in sellingWaiver and First marketing costs during the three months ended March 31, 2026, resulting from additional sales and marketing initiatives to drive the current and future periods’ sales growth. Among its remedies, Citizens could determine that there has been an Event of Default, deny access to funds under the Credit Facility, and/or it could terminate the Credit Facility. Discussions on the terms of an amendment to the Credit Agreement or waiver of compliance with the covenant are ongoing.Amendment. As of MarchJune 31,30, 2026 and to date, the Company had not drawn any amounts under the Credit Facility. Refer to Note 8—Indebtedness for additional information.

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 MarchJune 31,30, 2026, the Company had $44.6 million available under the ATM Sales Agreement.

The Company expects that its existing cash as of MarchJune 31,30, 2026 of $34.5$25.1 million and net proceeds from the sale of common stock under the ATM Sales Agreement will be sufficient to fund our planned operating expenses and capital expenditure requirements for at least the next 12 months from the issuance date of these unaudited consolidated financial statements.