LifeMD, Inc. Reports Fourth Quarter/ Full Year 2022 Results; Achieves Consolidated Adjusted EBITDA Profitability

• Achieved consolidated Adjusted EBITDA profitability for first-time in LifeMD history
• Full Year 2022 consolidated revenue of $119.0 million, up 28% from the same year-ago period.
• Fourth quarter 2022 consolidated revenue of $28.1 million up 3% from the same year-ago period. This figure was impacted by a $2.9 million deferral of telehealth shipments.
• Adjusted EPS of $0.02, 107% improvement versus the prior year.
• Subsequent to year end, executed debt financing transaction with Avenue Capital, providing for up to $40 million of total capital and strengthening LifeMD’s long-term capital position.
• Full Year 2023 guidance of $140-$150 million in consolidated revenue and $12-$18 million of consolidated Adjusted EBITDA.

NEW YORK, March 22, 2023 (GLOBE NEWSWIRE) -- LifeMD, Inc. (NASDAQ: LFMD), a leading direct-to-patient telehealth company, reported results for the fourth quarter and full year ended December 31, 2022. All figure comparisons are to the same year-ago quarter unless otherwise noted. Management will host a conference call today, March 22, 2023, at 4:30 p.m. Eastern Time to discuss the results. An updated corporate presentation and Q4 ’22 supplemental presentation were posted to https://ir.lifemd.com/#/ following the market close.

Fourth Quarter Financial Highlights

• Fourth quarter revenue of $28.1 million, up 3%. This figure was impacted by a $2.9 million deferral of telehealth shipments.
• Fourth quarter consolidated Gross Margin of 86%, up from 80% in the same year-ago period.
• Net loss attributable to common stockholders was $12.7 million or $(0.40) per share, as compared to a net loss attributable to common stockholders of $19.0 million or $(0.62) per share in the prior year.
• Achieved Consolidated Adjusted EBITDA profit in the fourth quarter for the first-time in LifeMD history totaling $631 thousand as compared to a loss of $(8.2) million in the same year-ago period (see definition of this non-GAAP financial measure and reconciliation to GAAP, below).
• Fourth quarter Adjusted EPS of $0.02, up 107% versus same year-ago period (see definition of this non-GAAP financial measure and reconciliation to GAAP, below).
  

Full Year 2022 Financial Highlights

• Consolidated revenue of $119.0 million, an increase of 28% over the prior year.
• Gross Margin of 84%, up from 81% in the prior year.
• Net loss attributable to common stockholders was $48.6 million or $(1.57) per share, as compared to a net loss attributable to common stockholders of $61.8 million or $(2.29) per share in the prior year.
• Consolidated Adjusted EBITDA of $(14.7) million, an improvement of 62% versus the same year-ago period.
• Consolidated Adjusted EPS $(0.47), as compared to $(1.42) in the same year-ago period.
  

Q4 and Recent Operational Highlights

• Improved leverage of Selling and Marketing expenses, with fourth quarter expenses as a percentage of revenue reducing to 62%, a 1,500-basis point improvement versus the same year-ago period.
• Finished FY 2022 with approximately 7,000 Virtual Primary Care (VPC) subscribers, ahead of previous guidance of 5,000 VPC subscribers.
• Telehealth active subscribers increased 22% to approximately 169,000.
• WorkSimpli active subscribers increased 64% to approximately 168,000.
• Reduced blended telehealth Customer Acquisition Costs (CAC) by 18% versus year-ago period.
• Following multiple WorkSimpli buyout bids in the previously guided range, LifeMD elected to retain our 73.6% ownership given the strong outperformance of the business versus our previous expectations, growth prospects and EBITDA contribution. We currently expect Full Year 2023 WorkSimpli EBITDA margins in 2023 of 20% or greater due to continued growth, differentiation and diversification in their workplace services platform. We expect that retaining this asset will allow for the creation of significantly more shareholder value than a 2022 divestiture would have.

Subsequent Events

• Executed a debt financing agreement with Avenue Capital for credit facilities totaling up to $40 million of funding capacity with $15 million funded at closing. Proceeds provide a significant source of long-term capital for LifeMD and allow us to maintain a strong balance sheet to execute against strategic growth and profitability plans.
• Hired Jessica Friedeman as Chief Marketing Officer of LifeMD, Inc. Jessica served as Chief Marketing Officer of Healthgrades, and brings twenty years of direct-to-consumer and business-to-business healthcare marketing experience. Jessica drove the end-to-identity creation of Mercury Healthcare in tandem with the divestiture of Healthgrades’ online marketplace division, and optimized sales execution with a focus on market fit that was integral in the subsequent acquisition of Mercury Healthcare by WebMD.  
• Appointed Dr. Joan LaRovere to LifeMD’s Board of Directors. Dr. LaRovere is a clinical leader, physician, cardiac expert and social entrepreneur who has spent the last 15 years in leadership roles at two of the top hospitals in the world, London’s Royal Brompton Hospital and Boston Children’s Hospital. She also is an operating partner at iSelect Fund and brings to LifeMD deep expertise in digital health, artificial intelligence and data analytics.
  

Key Performance Metrics

($ in 000s)		Three Months Ended December 31,								Y-o-Y
Key Performance Metrics			2022				2021			% Growth
Revenue
Telehealth		$	16,419			$	20,573			-20	%
WorkSimpli		$	11,701			$	6,844			71	%
Total Revenue		$	28,120			$	27,417			3	%
Subscription Revenue as % of Total			94	%			92	%		2	%
Active Subscribers
Telehealth Active Subscribers			169,195				138,252			22	%
WorkSimpli Active Subscribers			167,751				102,023			64	%
Total Active Subscribers			336,946				240,275			40	%

Management Commentary
“The fourth quarter of 2022 was encapsulated by the achievement of a significant milestone for the Company, our first-ever quarterly achievement of Consolidated Adjusted EBITDA profit. Through the hard work of our various employees and management, we continued to deliver the superior products, services and customer care that our 300,000+ customers across both our Telehealth and WorkSimpli segments, continue to choose us for. We have also remained highly focused on improving the efficiencies and economics of all our businesses during this challenging macro environment, as evidenced by improvements in Customer Acquisition Costs (CACs), an increase in Gross Margins to record levels, and a significant reduction in cash burn. We also continued to focus on our key strategic priorities of delivering comprehensive virtual primary care and building long-term partnerships with healthcare organizations seeking to streamline access to care for patients,” said Justin Schreiber, Chairman & CEO of LifeMD. “Additionally, we took an important step to shore up the Company’s long-term balance sheet by executing a significant institutional financing arrangement with Avenue Capital following our voluntary decision to retain WorkSimpli given its continued overperformance. This capital, combined with our strong operational performance, positions us well for the numerous growth opportunities ahead in both our legacy lifestyle healthcare businesses and our Virtual Primary Care business, which we launched in 2022 and is performing beyond our initial expectations. Looking ahead we believe 2023 will be a breakout year for LifeMD with a return to significant top-line growth and the achievement of consistent and growing profitability.”

LifeMD CFO Marc Benathen, commented: “We are pleased to have delivered upon our guidance to shareholders to achieve consolidated Adjusted EBITDA profitability in the fourth quarter 2022. We expect to meaningfully build on this profitability in 2023. The achievement of this goal is an extremely important financial milestone for the Company, driven by our continued laser-like focus on operational excellence as is evidenced by the significant reduction in our blended CAC’s, continued improvement in Gross Margins and Operating Expenses as shown through their reduction as a percentage of revenue. With the recent closing of the Avenue deal significantly bolstering our balance sheet, coupled with the attainment of profitability, and expected elimination of cash burn by middle of the year, we are well positioned to return LifeMD back to strong double-digit growth while growing the bottom line. This is particularly evident in Full Year 2023 guidance which calls for year-over-year revenue growth of approximately 20-25% and Adjusted EBITDA profitability of $12-$18 million.”

Financial Guidance
For the First Quarter 2023, the Company expects:

• Consolidated Revenue to total between $31.0 million and $32.0 million
• Consolidated Adjusted EBITDA between $1.0 and $1.5 million

For the Full Year 2023, the Company expects:

• Consolidated Revenue to total between $140.0 million and $150.0 million
• Consolidated Adjusted EBITDA between $12.0 and $18.0 million

Conference Call
LifeMD’s management will host a conference call today, March 22, 2023 at 4:30 pm Eastern Time to discuss the company’s financial results and outlook, followed by a question-and-answer period. Details for the call are as follows:

Toll-free dial-in number:	1-877-704-4453
International dial-in number:	1-201-389-0920
Conference ID:	13736906
Webcast:	https://viavid.webcasts.com/starthere.jsp?ei=1602716&tp_key=5d40c4c9f6

The conference call will be webcast live and available for replay via a link provided in the Investors section of the company’s website at ir.lifemd.com. Please call the conference telephone number five minutes prior to the start time. An operator will register your name and organization.

Listeners are encouraged to review the Company's periodic reports filed with the U.S. Securities and Exchange Commission, including the discussion of risk factors, historical results of operations and financial condition as provided in these reports.

About LifeMD
LifeMD is a 50-state direct-to-patient telehealth company with a portfolio of brands that offer virtual primary care, diagnostics, and specialized treatment for men’s and women’s health, allergy & asthma, and dermatological conditions. By leveraging its proprietary technology platform, 50-state affiliated medical group, and nationwide mail-order pharmacy network, LifeMD is increasing access to top-notch healthcare that is affordable to anyone. To learn more, go to LifeMD.com.

Cautionary Note Regarding Forward Looking Statements
This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended; Section 21E of the Securities Exchange Act of 1934, as amended; and the safe harbor provision of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements contained in this news release may be identified by the use of words such as: “believe,” “expect,” “anticipate,” “project,” “should,” “plan,” “will,” “may,” “intend,” “estimate,” “predict,” “continue,” and “potential,” or, in each case, their negative or other variations or comparable terminology referencing future periods. Examples of forward-looking statements include, but are not limited to, statements regarding our financial outlook and guidance, short and long-term business performance and operations, future revenues and earnings, regulatory developments, legal events or outcomes, ability to comply with complex and evolving regulations, market conditions and trends, new or expanded products and offerings, growth strategies, underlying assumptions, and the effects of any of the foregoing on our future results of operations or financial condition.

Forward-looking statements are not historical facts and are not assurances of future performance. Rather, these statements are based on our current expectations, beliefs, and assumptions regarding future plans and strategies, projections, anticipated and unanticipated events and trends, the economy, and other future conditions, including the impact of any of the aforementioned on our future business. As forward-looking statements relate to the future, they are subject to inherent risk, uncertainties, and changes in circumstances and assumptions that are difficult to predict, including some of which are out of our control. Consequently, our actual results, performance, and financial condition may differ materially from those indicated in the forward-looking statements. These risks and uncertainties include, but are not limited to, “Risk Factors” identified in our filings with the Securities and Exchange Commission, including, but not limited to, our most recently filed Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and any amendments thereto. Even if our actual results, performance, or financial condition are consistent with forward-looking statements contained in such filings, they may not be indicative of our actual results, performance, or financial condition in subsequent periods.

Any forward-looking statement made in the news release is based on information currently available to us as of the date on which this release is made. We undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as may be required under applicable law or regulation.

Company Contact
LifeMD, Inc.
Marc Benathen, CFO
marc@lifemd.com

 

LIFEMD, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
	December 31, 2022				December 31, 2021
ASSETS
Current Assets
Cash	$	3,958,957			$	41,328,039
Accounts receivable, net		2,834,750				980,055
Product deposit		127,265				203,556
Inventory, net		3,703,363				1,616,600
Other current assets		687,022				793,190
Total Current Assets		11,311,357				44,921,440
Non-current Assets
Equipment, net		476,441				233,805
Right of use asset, net		1,206,009				1,752,448
Capitalized software, net		8,840,187				2,995,789
Intangible assets, net		3,831,859				19,761
Total Non-current Assets		14,354,496				5,001,803
Total Assets	$	25,665,853			$	49,923,243
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' (DEFICIT) EQUITY
Current Liabilities
Accounts payable	$	10,106,793			$	9,059,214
Accrued expenses		12,166,509				11,595,605
Notes payable, net		2,797,250				63,400
Current operating lease liabilities		756,093				607,490
Deferred revenue		5,547,506				1,499,880
Total Current Liabilities		31,374,151				22,825,589
Long-term Liabilities
Noncurrent operating lease liabilities		574,136				1,178,544
Contingent consideration		443,750				100,000
Purchase price payable		579,319				-
Total Liabilities		32,971,356				24,104,133
Commitments and Contingencies
Mezzanine Equity
Preferred Stock, $0.0001 par value; 5,000,000 shares authorized
Series B Preferred Stock, $0.0001 par value; 5,000 shares authorized, 3,500 and 3,500 shares issued and outstanding, liquidation value approximately, $1,305 and $1,175 per share as of December 31, 2022 and 2021, respectively		4,565,822				4,110,822
Stockholders’ (Deficit) Equity
Series A Preferred Stock, $0.0001 par value; 1,610,000 shares authorized, 1,400,000 shares issued and outstanding, liquidation value approximately $27.84 and $25.62 per share as of December 31, 2022 and 2021, respectively		140				140
Common Stock, $0.01 par value; 100,000,000 shares authorized, 31,552,775 and 30,704,434 shares issued, 31,449,735 and 30,601,394 outstanding as of December 31, 2022 and 2021, respectively		315,528				307,045
Additional paid-in capital		179,015,250				164,517,634
Accumulated deficit		(190,562,994	)			(141,921,085	)
Treasury stock, 103,040 and 103,040 shares, at cost		(163,701	)			(163,701	)
Total LifeMD, Inc. Stockholders’ (Deficit) Equity		(11,395,777	)			22,740,033
Non-controlling interest		(475,548	)			(1,031,745	)
Total Stockholders’ (Deficit) Equity		(11,871,325	)			21,708,288
Total Liabilities, Mezzanine Equity and Stockholders’ (Deficit) Equity	$	25,665,853			$	49,923,243

 

LIFEMD, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
	Fourth Quarter Ended December 31,								Year Ended December 31,
	2022				2021				2022				2021
Revenues
Telehealth revenue, net	$	16,418,643			$	20,573,306			$	82,649,845			$	68,197,128
WorkSimpli revenue, net		11,701,073				6,843,578				36,383,675				24,678,678
Total revenues, net		28,119,716				27,416,884				119,033,520				92,875,806
Cost of revenues
Cost of telehealth revenue		3,801,642				5,436,214				17,843,754				17,549,550
Cost of WorkSimpli revenue		266,058				131,416				824,274				445,844
Total cost of revenues		4,067,700				5,567,630				18,668,028				17,995,394
Gross profit		24,052,016				21,849,254				100,365,492				74,880,412
Expenses
Selling and marketing expenses		17,440,781				21,169,141				78,369,430				82,541,956
General and administrative expenses		9,203,072				11,340,268				46,960,782				39,534,573
Goodwill and intangible asset impairment charges		6,127,596				-				8,862,596				-
Change in fair value of contingent consideration		(2,614,000	)			-				(5,101,000	)			-
Other operating expenses		1,640,975				1,053,719				6,717,795				3,317,976
Customer service expenses		1,605,370				1,564,439				5,033,468				2,838,831
Development costs		1,019,163				386,364				2,970,202				948,157
Total expenses		34,422,957				35,513,931				143,813,273				129,181,493
Operating loss		(10,370,941	)			(13,664,677	)			(43,447,781	)			(54,301,081	)
Interest expense, net		(843,541	)			(153,566	)			(1,275,946	)			(3,019,716	)
Gain (loss) on debt forgiveness		-				(4,180,473	)			63,400				(3,995,559	)
Net loss before provision for income taxes		(11,214,482	)			(17,998,716	)			(44,660,327	)			(61,316,356	)
Provision for income taxes		(360,700	)			(7,700	)			(360,700	)			(7,700	)
		(11,575,182	)			(18,006,416	)			(45,021,027	)			(61,324,056	)
Net loss
Net income (loss) attributable to noncontrolling interests		360,168				104,830				514,632				(426,352	)
Net loss attributable to LifeMD, Inc.		(11,935,350	)			(18,111,246	)			(45,535,659	)			(60,897,704	)
Preferred stock dividends		(776,562	)			(871,476	)			(3,106,250	)			(871,476	)
Net loss attributable to LifeMD, Inc. common stockholders	$	(12,711,912	)		$	(18,982,722	)		$	(48,641,909	)		$	(61,769,180	)
Basic loss per share attributable to LifeMD, Inc. common stockholders	$	(0.40	)		$	(0.62	)		$	(1.57	)		$	(2.29	)
Diluted loss per share attributable to LifeMD, Inc. common stockholders	$	(0.40	)		$	(0.62	)		$	(1.57	)		$	(2.29	)
Weighted average number of common shares outstanding:
Basic		31,410,065				30,572,003				30,976,455				27,007,961
Diluted		31,410,065				30,572,003				30,976,455				27,007,961

 

LIFEMD, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
	Fourth Quarter Ended December 31,								Year Ended December 31,
	2022				2021				2022				2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(11,575,182	)		$	(18,006,416	)		$	(45,021,027	)		$	(61,324,056	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of debt discount		-				-				-				2,090,236
Amortization of capitalized software		934,908				334,961				2,681,807				512,887
Amortization of intangibles		259,760				1,853				926,542				342,310
Accretion of consideration payable		101,081				-				273,822				-
Depreciation of fixed assets		44,877				10,695				161,885				13,560
Writedown of inventory		103,417				57,481				103,417				57,481
Sales return reserve		338,193				-				338,193				-
Loss (gain) on forgiveness of debt		-				4,180,473				(63,400	)			3,995,559
Change in fair value of contingent consideration		(2,614,000	)			-				(5,101,000	)			-
Goodwill and intangible asset impairment charges		6,127,596				-				8,862,596				-
Deferred income tax provision		354,000				-				354,000				-
Operating lease payments		83,241				17,017				546,439				22,700
Stock compensation expense		1,884,614				4,087,768				13,734,614				12,071,659
Stock issued for legal settlement		-				-				816,000				-
Changes in Assets and Liabilities
Accounts receivable		(634,825	)			986,755				(2,192,888	)			17,702
Product deposit		(19,214	)			708,392				76,291				613,209
Inventory		(130,649	)			(86,987	)			(2,183,012	)			(409,823	)
Other current assets		127,554				(103,835	)			106,168				(638,314	)
Change in operating lease liability		(77,710	)			-				(455,805	)			-
Deferred revenue		3,194,354				63,899				4,047,626				583,000
Accounts payable		(576,066	)			256,902				1,251,037				(893,956	)
Accrued expenses		993,497				1,665,103				(1,309,968	)			9,860,357
Other operating activity		(888,486	)			-				(888,486	)			-
Net cash used in operating activities		(1,969,039	)			(5,825,939	)			(22,935,149	)			(33,085,489	)
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for capitalized software costs		(1,783,259	)			(1,401,186	)			(8,526,205	)			(3,132,693	)
Purchase of equipment		12,244				(177,260	)			(366,633	)			(247,365	)
Purchase of intangible assets		-				-				(4,000,500	)			(22,231	)
Acquisition of business, net of cash acquired		-				-				(1,012,395	)			-
Net cash used in investing activities		(1,771,015	)			(1,578,446	)			(13,905,733	)			(3,402,289	)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash proceeds from private placement offering, net		-				-				-				13,495,270
Proceeds from issuance of debt instruments		-				-				-				15,000,000
Cash proceeds from Series A Preferred and Common Stock Offering		-				55,342,927				-				55,342,927
Repayment of debt instruments		-				(15,000,000	)			-				(15,000,000	)
Cash proceeds from sale of common stock under ATM		-				-				-				493,481
Cash proceeds from exercise of options		-				(150,000	)			90,400				670,750
Cash proceeds from exercise of warrants		-				-				38,500				480,609
Preferred stock dividends		(776,562	)			(871,476	)			(3,106,250	)			(871,476	)
Proceeds from notes payable		2,906,000				-				2,906,000				963,965
Repayment of notes payable		(168,750	)			-				(168,750	)			(1,494,784	)
Contingent consideration payment for ResumeBuild		(62,500	)			-				(156,250	)			-
Purchase of membership interest of WorkSimpli		-				-				-				(300,000	)
Reduction of membership interest of WorkSimpli		-				-				12,150				-
Distributions to non-controlling interest		(36,000	)			(36,000	)			(144,000	)			(144,000	)
Net cash (used in) provided by financing activities		1,862,188				39,285,451				(528,200	)			68,636,742
Net (decrease) increase in cash		(1,877,866	)			31,881,066				(37,369,082	)			32,148,964
Cash at beginning of period		5,836,823				9,446,973				41,328,039				9,179,075
Cash at end of period	$	3,958,957			$	41,328,039			$	3,958,957			$	41,328,039
Cash paid for interest
Cash paid during the period for interest	$	189,000			$	314,986			$	189,000			$	435,048
Non-cash investing and financing activities:
Cashless exercise of options	$	-			$	-			$	297			$	8,730
Consideration payable for Cleared acquisition	$	-			$	-			$	8,079,367			$	-
Consideration payable for ResumeBuild acquisition	$	-			$	-			$	500,000			$	-
Warrants issued for debt instruments	$	-			$	-			$	-			$	6,270,710
Principal of Paycheck Protection Program loans forgiven	$	-			$	-			$	63,400			$	184,914
Additional purchase of membership interest in WorkSimpli issued in performance options	$	-			$	-			$	-			$	144,002
Right of use asset	$	89,595			$	1,752,448			$	89,595			$	1,752,448
Right of use lease liability	$	94,168			$	1,178,544			$	94,168			$	1,178,544

About the Use of Non-GAAP Financial Measures:
To supplement our financial information presented in accordance with GAAP, we use Adjusted EBITDA and Adjusted EPS as non-GAAP financial measures to clarify and enhance an understanding of past performance. We believe that the presentation of these financial measures enhances an investor’s understanding of our financial performance. We further believe that these financial measures are useful financial metrics to assess our operating performance from period-to-period by excluding certain items that we believe are not representative of our core business. We use certain financial measures for business planning purposes and in measuring our performance relative to that of our competitors.

Adjusted EBITDA is defined as income (loss) attributable to common shareholders before interest, taxes, depreciation, amortization, accretion, financing transaction expense, foreign currency translation, inventory valuation, sales return reserves and deferred revenue adjustments, litigation costs, gain on debt forgiveness, preferred stock dividends, acquisition costs, severance expenses, goodwill impairment charges, change in fair value of contingent consideration and stock-based compensation expense. We have provided below a reconciliation of Adjusted EBITDA to Net loss attributable to common shareholders, its most directly comparable GAAP financial measure.

Adjusted EPS is defined as the diluted net loss attributable to LifeMD, Inc common shareholders before interest, taxes, depreciation, amortization, accretion, financing transaction expense, foreign currency translation, inventory valuation, sales return reserves and deferred revenue adjustments, litigation costs, preferred stock dividends, acquisition costs, severance expenses, goodwill impairment charges, change in fair value of contingent consideration and stock-based compensation expense. We have provided below a reconciliation of Adjusted EPS to Diluted loss per share attributable to LifeMD, Inc common shareholders, its most directly comparable GAAP financial measure.

We believe the above financial measures are commonly used by investors to evaluate our performance and that of our competitors. However, our use of the terms Adjusted EBITDA and Adjusted EPS may vary from that of others in our industry. Adjusted EBITDA and Adjusted EPS should not be considered as an alternative to net loss before taxes, net loss per share, operating loss or any other performance measures derived in accordance with GAAP as measures of performance.

Reconciliation of GAAP Net Loss to Adjusted EBITDA
(in whole numbers, unaudited)
	Fourth Quarter Ended December 31,								Year Ended December 31,
		2022				2021				2022				2021
Net loss attributable to common shareholders	$	(12,711,912	)		$	(18,982,722	)		$	(48,641,909	)		$	(61,769,180	)
Interest expense (excluding debt discount and acceleration of debt)		728,856				38,881				820,946				474,480
Depreciation, amortization and accretion expense		1,340,626				347,509				4,044,056				868,757
Amortization of debt discount		-				-				-				2,090,236
Gain on debt forgiveness		-				4,180,473				(63,400	)			3,995,559
Financing transactions expense		98,333				543,398				250,348				1,802,469
Litigation costs		168,162				-				1,685,521				279,666
Inventory valuation adjustment		176,000				571,338				406,661				571,338
Sales return reserve		523,057								523,057				-
Deferred revenue adjustment		2,918,942				-				2,918,942				-
Severance costs		181,824				-				360,914				-
Acquisitions expenses		127,539				-				392,692				-
Change in fair value of contingent consideration		(2,614,000	)			-				(5,101,000	)			-
Goodwill and intangible asset impairment charges		6,127,596				-				8,862,596				-
Accrued interest on Series B Convertible Preferred Stock		114,685				114,685				455,000				455,000
Foreign exchange (gain) loss		393,147				-				1,078,389				-
Dividends		812,562				871,476				3,250,250				871,476
Stock-based compensation expense		1,884,614				4,087,768				13,734,614				12,071,659
Provision for income taxes		360,700				7,700				360,700				7,700
Adjusted EBITDA	$	630,731			$	(8,219,494	)		$	(14,661,623	)		$	(38,280,840	)

Reconciliation of GAAP Diluted Loss per Share Attributable to Common Shareholders to Adjusted EPS
(unaudited)	Fourth Quarter Ended December 31,								Year Ended December 31,
		2022				2021				2022				2021
Diluted loss per share attributable to LifeMD, Inc. common shareholders	$	(0.40	)		$	(0.62	)		$	(1.57	)		$	(2.29	)
Adjustments to Reconcile GAAP Diluted Loss Per Share to Adjusted EPS
Interest expense (excluding debt discount and acceleration of debt)		0.02				-				0.03				0.02
Depreciation, amortization and accretion expense		0.04				0.01				0.13				0.03
Amortization of debt discount		-				-				-				0.08
Gain on debt forgiveness		-				0.14				-				0.15
Financing transactions expense		-				0.02				0.01				0.07
Litigation costs		0.01				-				0.06				0.01
Inventory valuation adjustment		0.01				0.02				0.01				0.01
Sales return reserve		0.02				-				0.02				-
Deferred revenue adjustment		0.09				-				0.09				-
Severance costs		0.01				-				0.01				-
Acquisitions expenses		-				-				0.01				-
Change in fair value of contingent consideration		(0.08	)			-				(0.16	)			-
Goodwill and intangible asset impairment charges		0.20				-				0.29				-
Accrued interest on Series B Convertible Preferred Stock		-				-				0.02				0.02
Foreign exchange (gain) loss		0.01				-				0.03				-
Preferred dividends		0.02				0.03				0.10				0.03
Stock-based compensation expense		0.06				0.13				0.44				0.45
Provision for income taxes		0.01				-				0.01				-
Adjusted EPS	$	0.02			$	(0.27	)		$	(0.47	)		$	(1.42	)