- FY2021 consolidated revenue of $92.9 million up 149% from the same year ago period; fourth quarter revenue of $27.4 million
- Fourth quarter Adjusted EPS of $(0.29), 19% sequential improvement versus the prior quarter
- Continued progress in reducing cash burn with a 21% sequential improvement in fourth quarter Operating Cash Flow versus prior quarter
- Record liquidity with over $41 million of cash as of year-end 2021 and no debt
- FY2022 revenue guidance of between $142 and $148 million; Company on track to achieve Adjusted EBITDA profitability by fourth quarter 2022
NEW YORK, March 07, 2022 (GLOBE NEWSWIRE) -- LifeMD, Inc. (NASDAQ: LFMD), a leading direct-to-patient telehealth company, reported results for the fourth quarter and year ended December 31, 2021. All figure comparisons are to the same year-ago quarter unless otherwise noted. Management will host a conference call today, March 7, 2022, at 4:30 p.m. Eastern time to discuss the results.
Q4 and FY2021 Financial Highlights
- Record fourth quarter revenue of $27.4 million, up 113%
- FY2021 consolidated revenue of $92.9 million, up 149%
- Record FY2021 Gross Margins of 81%, up from 76% in the same year-ago period
- 93% of revenue generated by subscriptions, up from 82%
- Gross profit for the fourth quarter totaled $21.8 million, up 144%
- $41.3 million of cash as of December 31, 2021 and no debt
- Adjusted EPS $(0.29) for the fourth quarter, a 19% sequential improvement versus the prior quarter (see definition of this non-GAAP financial measure and reconciliation to GAAP, below)
- Fourth quarter Operating Cash Flow of ($5.8) million, a 21% sequential improvement versus the prior quarter
Q4 and Recent Operational Highlights
- Continued leverage of Selling and Marketing expenses despite market headwinds, with fourth quarter expenses as a percentage of revenue reducing to 77%, a 400 basis point improvement versus the prior quarter and a 5,800 basis point improvement versus the same year-ago period.
- Completed a public offering of 3,833,334 shares of its common stock and 1,400,000 shares of its 8.875% Series A Cumulative Perpetual Preferred Stock raising approximately $55 million in net proceeds.
- Total patients and customers served nationwide surpassed 493,000 as of the quarter ending 12/31/2021, up from 250,000 as of 12/31/2020
- Telehealth orders increased 107% to approximately 242,000
- Announced appointment of seasoned Technology leader, Dennis Wijnker, as Chief Technology Officer and transition of Stefan Galluppi to Chief Innovation and Marketing Officer
Subsequent Events
- Announced full-scale national launch of the Company’s virtual primary care platform in February 2022 following a successful beta launch last November
- On January 18, 2022, the Company closed the acquisition of Cleared, a leading allergy, asthma and immunology telehealth platform. The Cleared platform offerings include prescription drug, FDA approved over-the-counter (OTC) treatments, diagnostics and a growing pipeline of pharmaceutical and biotech customer partners.
Key Performance Metrics
| ($ in 000s) | Three Months Ended December 31 | Y-o-Y | ||||||||
| Key Performance Metrics | 2021 | 2020 | % Growth | |||||||
| Revenue | ||||||||||
| Telehealth | $ | 20,573 | $ | 10,297 | 100 | % | ||||
| WorkSimpli | $ | 6,844 | $ | 2,596 | 164 | % | ||||
| Total Revenue | $ | 27,417 | $ | 12,894 | 113 | % | ||||
| Subscription Revenue as % of Total | 93 | % | 82 | % | 13 | % | ||||
| Telehealth Volume | ||||||||||
| Total Telehealth Orders | 241,881 | 116,674 | 107 | % | ||||||
| WorkSimpli | ||||||||||
| Active Subscribers | 102,023 | 57,271 | 78 | % | ||||||
Management Commentary
“2021 was an extraordinary year for us, with record growth in sales of our products and services driving revenues to increase by 149% versus 2020. Equally as important, we began to demonstrate significant progress this year in driving meaningful improvements in reducing LifeMD’s cash burn on our way to achieving Adjusted EBITDA profitability by the fourth quarter of 2022 and further diversifying our telehealth platform,” said Justin Schreiber, CEO of LifeMD. “Following quarter end, we announced two transformational initiatives for the Company, including the acquisition of Cleared, a leading telehealth platform for allergy, asthma and immunology and the nationwide launch of our Virtual Primary Care platform which we demonstrated at our recent February 22nd Analyst & Investor Day. The combination of these new business lines with our already successful platform brands and near-term pathway to profitability positions us uniquely well to continue our ascent as a leader in telehealth.”
LifeMD CFO Marc Benathen, commented: “During the fourth quarter we not only successfully capitalized the Company on a long-term basis, but continued to demonstrate our commitment to aggressively growing LifeMD with continued sequential improvement in quarterly profitability. We remain on track to achieve our stated goal of Adjusted EBITDA profitability by the fourth quarter of 2022, while at the same time investing in the growth of our Company.”
FY2021 Financial Summary
- Revenue for the year ended December 31, 2021 increased 149% to a record $92.9 million from $37.3 million in 2020. The increase in revenues was attributable to both the increase in telehealth revenue of 123% and an increase in WorkSimpli revenue of 267%.
- Gross profit increased by approximately 163% to $74.9 million, compared to $28.4 million in the prior year. Gross margin was 81% as compared to 76% in the prior year.
- Operating expenses in 2021 were $129.2 million, up from $86.3 million in the prior year. The increase was primarily due to increases in selling and marketing expenses of $43.5 million, customer service expenses of $2.1 million and other operating expenses of $2.4 million. General and Administrative expenses decreased $5.4 million during the year. General and Administrative expenses included $12.1 million of non-cash stock-based compensation expense.
- Net loss attributable to common stockholders for 2021 was $61.8 million or $(2.29) per share, as compared to a net loss attributable to common stockholders of $63.4 million or $(4.44) per share in the prior year.
- Excluding $12.1 million related to stock-based compensation expense, $6.1 million related to debt discounts/ extinguishments, $1.8 million of financing transaction expense, $0.9 million of depreciation and amortization expense, $0.9 million in preferred stock dividends and an income tax provision of $8 thousand, adjusted EPS, a non-GAAP measure, totaled a loss of $(1.48) per share as compared to a loss of $(1.74) in the same year-ago period (see definition of this non-GAAP financial measure and reconciliation to GAAP, below).
- Adjusted EBITDA, a non-GAAP financial measure, totaled a loss of $38.3 million, compared to an adjusted EBITDA loss of $14.9 million in the same year-ago period (see definition of this non-GAAP financial measure and reconciliation to GAAP, below).
- Cash totaled $41.3 million as of December 31, 2021.
Financial Guidance
For the First Quarter 2022, the Company expects:
- Revenue to total between $30 million and $32 million
- Adjusted EBITDA between $(6) million and $(7) million
For the Full Year 2022, the Company expects:
- Revenue to total between $142 million and $148 million
- Adjusted EBITDA between $(14) million and $(20) million
The Company remains on track to achieve Adjusted EBITDA profitability by the fourth quarter of 2022.
Conference Call
LifeMD’s management will host a conference call today, March 7, 2022 at 4:30 pm ET (1:30 pm PT) 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: | 1-877-705-6003 |
| International dial-in number: | 1-201-493-6725 |
| Conference ID: | 13727334 |
| Webcast: | Click here |
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 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
Investor Relations Contact
Ashley Robinson
LifeSci Advisors, LLC
arr@lifesciadvisors.com
Media Contact
Eric Herman
Kivvit
eherman@kivvit.com
Tables to Follow
| LIFEMD, INC. | |||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
| December 31, 2021 | December 31, 2020 | ||||||
| ASSETS | |||||||
| Current Assets | |||||||
| Cash | $ | 41,328,039 | $ | 9,179,075 | |||
| Accounts receivable, net | 980,055 | 997,757 | |||||
| Product deposit | 203,556 | 816,765 | |||||
| Inventory, net | 1,616,600 | 1,264,258 | |||||
| Other current assets | 793,190 | 154,876 | |||||
| Total Current Assets | 44,921,440 | 12,412,731 | |||||
| Non-current Assets | |||||||
| Equipment, net | 233,805 | - | |||||
| Right of use asset, net | 1,752,448 | 274,437 | |||||
| Capitalized software, net | 2,995,789 | 375,983 | |||||
| Intangible assets, net | 19,761 | 339,840 | |||||
| Total Non-current Assets | 5,001,803 | 990,260 | |||||
| Total Assets | $ | 49,923,243 | $ | 13,402,991 | |||
| LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY (DEFICIT) | |||||||
| Current Liabilities | |||||||
| Accounts payable and accrued expenses | $ | 20,654,819 | $ | 12,143,420 | |||
| Notes payable, net | 63,400 | 779,132 | |||||
| Current operating lease liabilities | 607,490 | 93,001 | |||||
| Deferred revenue | 1,499,880 | 916,880 | |||||
| Total Current Liabilities | 22,825,589 | 13,932,433 | |||||
| Long-term Liabilities | |||||||
| Noncurrent operating lease liabilities | 1,178,544 | 192,322 | |||||
| Contingent consideration on purchase of WorkSimpli | 100,000 | 100,000 | |||||
| Total Liabilities | 24,104,133 | 14,224,755 | |||||
| Commitments and Contingencies | |||||||
| Mezzanine Equity | |||||||
| Preferred Stock, $0.0001 par value; 5,000,000 shares authorized | |||||||
| Series B Convertible Preferred Stock, $0.0001 par value; 5,000 shares authorized, 3,500 and 3,500 shares issued and outstanding, liquidation value approximately, $1,175 and $1,045 per share as of December 31, 2021 and 2020, respectively | 4,110,822 | 3,655,822 | |||||
| Stockholders’ Equity (Deficit) | |||||||
| Series A Preferred Stock, $0.0001 par value; 1,610,000 shares authorized, 1,400,000 and zero shares issued, 1,400,000 and zero shares issued and outstanding, liquidation value approximately $25.62 and $0 per share as of December 31, 2021 and 2020, respectively | 140 | - | |||||
| Common Stock, $0.01 par value; 100,000,000 shares authorized, 30,704,434 and 23,433,663 shares issued, 30,601,394 and 23,330,623 outstanding as of December 31, 2021 and 2020, respectively | 307,045 | 234,337 | |||||
| Additional paid-in capital | 164,517,634 | 77,779,370 | |||||
| Accumulated deficit | (141,921,085 | ) | (80,151,905 | ) | |||
| Treasury stock, 103,040 and 103,040 shares, at cost | (163,701 | ) | (163,701 | ) | |||
| Total LifeMD, Inc. Stockholders’ Equity (Deficit) | 22,740,033 | (2,301,899 | ) | ||||
| Non-controlling interest | (1,031,745 | ) | (2,175,687 | ) | |||
| Total Stockholders’ Equity (Deficit) | 21,708,288 | (4,477,586 | ) | ||||
| Total Liabilities, Mezzanine Equity and Stockholders’ Equity (Deficit) | $ | 49,923,243 | $ | 13,402,991 | |||
| LIFEMD, INC. | |||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
| Fourth Quarter Ended December 31, | Year Ended December 31, | ||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||
| Revenues | |||||||||||||||
| Telehealth revenue, net | $ | 20,573,309 | $ | 10,297,413 | $ | 68,197,128 | $ | 30,561,163 | |||||||
| WorkSimpli revenue, net | 6,843,577 | 2,596,139 | 24,678,678 | 6,732,747 | |||||||||||
| Total revenues, net | 27,416,884 | 12,893,552 | 92,875,806 | 37,293,910 | |||||||||||
| Cost of telehealth revenue | 5,436,214 | 3,854,347 | 17,549,550 | 8,572,490 | |||||||||||
| Cost of WorkSimpli revenue | 131,416 | 84,455 | 445,844 | 288,696 | |||||||||||
| Total cost of revenues | 5,567,630 | 3,938,802 | 17,995,394 | 8,861,186 | |||||||||||
| Gross profit | 21,849,254 | 8,954,750 | 74,880,412 | 28,432,724 | |||||||||||
| Expenses | |||||||||||||||
| Selling and marketing expenses | 21,169,141 | 17,384,395 | 82,541,956 | 39,053,441 | |||||||||||
| General and administrative expenses | 11,375,433 | 23,090,902 | 39,569,738 | 44,958,999 | |||||||||||
| Other operating expenses | 1,061,502 | 421,716 | 3,452,196 | 1,076,663 | |||||||||||
| Customer service expenses | 1,564,439 | 227,870 | 2,838,831 | 716,325 | |||||||||||
| Development costs | 343,416 | 157,936 | 778,772 | 446,749 | |||||||||||
| Total expenses | 35,513,931 | 41,282,819 | 129,181,493 | 86,252,177 | |||||||||||
| Operating loss | (13,664,677 | ) | (32,328,069 | ) | (54,301,081 | ) | (57,819,453 | ) | |||||||
| Interest expense, net | (153,566 | ) | (354,526 | ) | (3,019,716 | ) | (1,667,536 | ) | |||||||
| Loss on debt extinguishment | (4,180,473 | ) | (914,862 | ) | (3,995,559 | ) | (914,862 | ) | |||||||
| Net loss before provision for income taxes | (17,998,716 | ) | (33,597,457 | ) | (61,316,356 | ) | (60,401,851 | ) | |||||||
| Provision for income taxes | (7,700 | ) | (122,500 | ) | (7,700 | ) | (122,500 | ) | |||||||
| Net loss | (18,006,416 | ) | (33,719,957 | ) | (61,324,056 | ) | - | (60,524,351 | ) | ||||||
| Net income (loss) attributable to noncontrolling interests | 104,830 | (1,469,228 | ) | (426,352 | ) | (1,877,408 | ) | ||||||||
| Net loss attributable to LifeMD, Inc. | $ | (18,111,246 | ) | $ | (32,250,729 | ) | $ | (60,897,704 | ) | $ | (58,646,943 | ) | |||
| Preferred dividends | (871,476 | ) | - | (871,476 | ) | - | |||||||||
| Deemed distribution to holders of common and Series B Preferred stock | - | - | - | (4,716,021 | ) | ||||||||||
| Net loss attributable to LifeMD, Inc. common stockholders | $ | (18,982,722 | ) | $ | (32,250,729 | ) | $ | (61,769,180 | ) | $ | (63,362,964 | ) | |||
| Basic loss per share attributable to LifeMD, Inc. common stockholders | $ | (0.62 | ) | $ | (2.56 | ) | $ | (2.29 | ) | $ | (4.44 | ) | |||
| Diluted loss per share attributable to LifeMD, Inc. common stockholders | $ | (0.62 | ) | $ | (2.56 | ) | $ | (2.29 | ) | $ | (4.44 | ) | |||
| Weighted average number of common shares outstanding: | |||||||||||||||
| Basic | 30,572,003 | 12,581,401 | 27,007,961 | 14,275,153 | |||||||||||
| Diluted | 30,572,003 | 12,581,401 | 27,007,961 | 14,275,153 | |||||||||||
| LIFEMD, INC. | |||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||||||
| Fourth Quarter Ended December 31, | Year Ended December 31, | ||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||||||||||
| Net loss | $ | (18,006,416 | ) | $ | (33,719,957 | ) | $ | (61,324,056 | ) | $ | (60,524,351 | ) | |||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||||||||||
| Amortization of debt discount | - | - | 2,090,236 | 817,118 | |||||||||||||||
| Amortization of capitalized software | 334,961 | 26,152 | 512,887 | 62,153 | |||||||||||||||
| Amortization of intangibles | 1,853 | 83,903 | 342,310 | 335,612 | |||||||||||||||
| Write-down of inventory | - | - | 57,481 | - | |||||||||||||||
| Depreciation of fixed assets | 10,695 | - | 13,560 | - | |||||||||||||||
| Acceleration of debt discount | - | - | - | 500,145 | |||||||||||||||
| Loss on debt extinguishment, net | 4,180,473 | 914,862 | 3,995,559 | 914,862 | |||||||||||||||
| Operating lease payments | 17,018 | 818 | 22,700 | 4,533 | |||||||||||||||
| Liability to issue shares for services | - | (32,500 | ) | - | - | ||||||||||||||
| Stock issued for services | - | 18,269,800 | - | 18,305,000 | |||||||||||||||
| Stock compensation expense | 4,087,768 | 1,757,408 | 12,071,659 | 18,656,141 | |||||||||||||||
| Deferred tax liability | - | (70,000 | ) | - | (70,000 | ) | |||||||||||||
| Changes in Assets and Liabilities | |||||||||||||||||||
| Accounts receivable | 986,755 | (289,033 | ) | 17,702 | (816,756 | ) | |||||||||||||
| Product deposit | 708,392 | 276,623 | 613,209 | (666,765 | ) | ||||||||||||||
| Inventory | (29,506 | ) | 594,287 | (409,823 | ) | (314,199 | ) | ||||||||||||
| Other current assets | (103,835 | ) | 22,702 | (638,314 | ) | 95,595 | |||||||||||||
| Deferred revenue | 63,899 | 504,264 | 583,000 | 807,328 | |||||||||||||||
| Accounts payable and accrued expenses | 1,922,004 | 5,266,439 | 8,966,401 | 9,761,970 | |||||||||||||||
| Net cash used in operating activities | (5,825,939 | ) | (6,394,232 | ) | (33,085,489 | ) | (12,131,614 | ) | |||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||||||||||
| Cash paid for capitalized software costs | (1,401,186 | ) | (67,550 | ) | (3,132,693 | ) | (398,136 | ) | |||||||||||
| Purchase of equipment | (177,260 | ) | - | (247,365 | ) | - | |||||||||||||
| Purchase of intangible assets | - | - | (22,231 | ) | - | ||||||||||||||
| Payment to seller for contingent consideration | - | - | - | (400,000 | ) | ||||||||||||||
| Net cash used in investing activities | (1,578,446 | ) | (67,550 | ) | (3,402,289 | ) | (798,136 | ) | |||||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||||||||||
| Cash proceeds from private placement offering, net | - | 14,900,220 | 13,495,270 | 14,900,220 | |||||||||||||||
| 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 | - | |||||||||||||||
| Cash proceeds from Series B Convertible Preferred Stock | - | - | - | 2,892,500 | |||||||||||||||
| Proceeds from convertible notes payable | - | - | - | 2,350,000 | |||||||||||||||
| Repayment of debt instruments | (15,000,000 | ) | - | (15,000,000 | ) | - | |||||||||||||
| Cash proceeds from sale of common stock | - | - | - | 2,338,349 | |||||||||||||||
| Cash proceeds from sale of common stock under ATM | - | - | 493,481 | - | |||||||||||||||
| Cash proceeds from exercise of warrants | - | - | 480,609 | 622,763 | |||||||||||||||
| Cash proceeds from exercise of options | (150,000 | ) | 2,000 | 670,750 | 302,400 | ||||||||||||||
| Cash proceeds from sale of warrants | - | - | - | 25,000 | |||||||||||||||
| Payment of debt issuance costs | - | - | - | (15,000 | ) | ||||||||||||||
| Preferred stock dividends | (871,476 | ) | - | (871,476 | ) | - | |||||||||||||
| Purchase of membership interest of WorkSimpli | - | - | (300,000 | ) | - | ||||||||||||||
| Distributions to non-controlling interest | (36,000 | ) | (36,000 | ) | (144,000 | ) | (157,223 | ) | |||||||||||
| Proceeds from notes payable | - | - | 963,965 | 242,000 | |||||||||||||||
| Repayment of notes payable | - | - | (1,494,784 | ) | (2,498,808 | ) | |||||||||||||
| Net cash provided by financing activities | 39,285,451 | 14,866,220 | 68,636,742 | 21,002,201 | |||||||||||||||
| Net increase in cash | 31,881,066 | 8,404,438 | 32,148,964 | 8,072,451 | |||||||||||||||
| Cash at beginning of period | 9,446,973 | 916,637 | 9,179,075 | 1,106,624 | |||||||||||||||
| Cash at end of period | $ | 41,328,039 | $ | 9,321,075 | $ | 41,328,039 | $ | 9,179,075 | |||||||||||
| Cash paid for interest | |||||||||||||||||||
| Cash paid during the period for interest | $ | 314,986 | $ | 1,072,210 | $ | 435,048 | $ | 1,665,171 | |||||||||||
| Non-cash investing and financing activities: | |||||||||||||||||||
| Cashless exercise of options | $ | - | $ | - | $ | 8,730 | $ | - | |||||||||||
| Cashless exercise of warrants | $ | - | $ | - | $ | - | $ | 49,551 | |||||||||||
| Principal of Paycheck Protection Program loans forgiven | $ | - | $ | - | $ | 184,914 | $ | - | |||||||||||
| Additional purchase of membership interest in WorkSimpli issued in performance options | $ | - | $ | - | $ | 144,002 | $ | - | |||||||||||
| Deemed dividend from warrant price adjustments | $ | - | $ | 73,636 | $ | - | $ | 1,289,657 | |||||||||||
| Deemed distribution from warrants issued with Series B Convertible Preferred Stock | $ | - | $ | - | $ | - | $ | 3,500,000 | |||||||||||
| Stock yet to be issued for capitalized costs | $ | - | $ | - | $ | - | $ | 40,000 | |||||||||||
| Deemed distribution from down-round provision on unissued shares | $ | - | $ | - | $ | - | $ | 194,022 | |||||||||||
| Liability to issue common stock | $ | - | $ | - | $ | - | $ | 76,348 | |||||||||||
| Debt issuance costs for liability to issue shares | $ | - | $ | - | $ | - | $ | 219,450 | |||||||||||
| Conversion of convertible notes payable and interest for Series B Convertible Preferred Stock | $ | - | $ | - | $ | - | $ | 607,500 | |||||||||||
| Stock issued for capitalized costs | $ | - | $ | - | $ | - | $ | 12,675 | |||||||||||
| Warrants issued for debt instruments | $ | - | $ | - | $ | 6,270,710 | $ | - | |||||||||||
| Common stock issued for conversion of debt | $ | - | $ | 1,119,408 | $ | - | $ | 1,119,408 | |||||||||||
| Debt exchange agreement | $ | - | $ | 25,000 | $ | - | $ | 25,000 | |||||||||||
| Right of use asset | $ | 1,752,448 | $ | 274,437 | $ | 1,752,448 | $ | 274,437 | |||||||||||
| Right of use lease liability | $ | 1,786,034 | $ | 285,323 | $ | 1,786,034 | $ | 285,323 | |||||||||||
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 loss attributable to common shareholders before interest, taxes, depreciation and amortization, financing transaction expense, acceleration/amortization of debt discount, debt extinguishment, inventory valuation/deposit write-off, litigation costs, preferred stock dividends 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 stock-based compensation expense, acceleration/amortization of debt discount, debt extinguishment, depreciation and amortization expense, preferred stock dividends financing transaction expense and taxes. We have provided below a reconciliation of Adjusted EPS to Diluted loss per share attributable to LifeMD, Inc common shareholders.
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, 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, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Net loss attributable to common shareholders | $ | (18,982,722 | ) | $ | (32,250,729 | ) | $ | (61,769,180 | ) | $ | (63,362,964 | ) | ||||
| Interest expense (excluding debt discount and acceleration of debt) | 38,882 | 239,841 | 474,480 | 1,552,851 | ||||||||||||
| Depreciation & amortization expense | 347,509 | 110,055 | 868,757 | 397,765 | ||||||||||||
| Amortization of debt discount | - | - | 2,090,236 | 817,118 | ||||||||||||
| Loss on debt extinguishment, net | 4,180,473 | - | 3,995,559 | - | ||||||||||||
| Warrant settlement | - | 914,862 | - | 914,862 | ||||||||||||
| Financing transactions expense | 543,398 | 175,000 | 1,802,469 | 237,012 | ||||||||||||
| Acceleration of debt discount | - | - | - | 500,145 | ||||||||||||
| Inventory valuation/deposit adjustment | 571,338 | 1,341,929 | 571,338 | 2,111,307 | ||||||||||||
| Litigation costs | - | - | 279,666 | - | ||||||||||||
| Accrued interest on Series B Convertible Preferred Stock | 114,685 | 114,685 | 455,000 | 114,685 | ||||||||||||
| Deemed distribution to holders of Series B Preferred stock | - | - | - | 4,716,021 | ||||||||||||
| Preferred dividends | 871,476 | - | 871,476 | - | ||||||||||||
| Stock-based compensation expense | 4,087,768 | 20,027,208 | 12,071,659 | 36,961,141 | ||||||||||||
| Income tax provision | 7,700 | 122,500 | 7,700 | 122,500 | ||||||||||||
| Adjusted EBITDA | $ | (8,219,493 | ) | $ | (9,204,649 | ) | $ | (38,280,840 | ) | $ | (14,917,557 | ) | ||||
| Reconciliation of GAAP Diluted Loss per Share Attributable to Common Shareholders to Adjusted EPS | |||||||||||||||||
| Fourth Quarter ended December 31, | Year ended December 31, | ||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||
| Diluted loss per share attributable to LifeMD, Inc. common shareholders | $ | (0.62 | ) | $ | (2.56 | ) | $ | (2.29 | ) | $ | (4.44 | ) | |||||
| Adjustments to Reconcile GAAP Diluted Loss Per Share to Adjusted EPS | |||||||||||||||||
| Stock-based compensation expense | 0.13 | 1.59 | 0.45 | 2.59 | |||||||||||||
| Financing transaction expense | 0.02 | 0.01 | 0.07 | 0.01 | |||||||||||||
| Depreciation & amortization expense | 0.01 | 0.01 | 0.03 | 0.03 | |||||||||||||
| Loss on debt extinguishment, net | 0.14 | - | 0.15 | - | |||||||||||||
| Preferred dividends | 0.03 | - | 0.03 | - | |||||||||||||
| Amortization of debt discount | - | - | 0.08 | 0.06 | |||||||||||||
| Income tax provision | 0.00 | 0.01 | 0.00 | 0.01 | |||||||||||||
| Adjusted EPS | $ | (0.29 | ) | $ | (0.94 | ) | $ | (1.48 | ) | $ | (1.74 | ) | |||||
