LifeMD Reports Q2 2021 Revenue Up 145% to Record $22.3 Million, Driven by Reduced Acquisition Costs and Strong Retention
2021-08-12 13:05 ET - News Release
- New patient Customer Acquisition Cost (CAC) decreased 8% sequentially, while new patient acquisitions per day for comparable brands increased 11%
- Revenue increased to a record $22.3 million, up 145% from the same year-ago period
- 93% of Q2 2021 revenue generated by subscriptions, up from 56% in the same year-ago period
- Platform Contribution of $16.5 million, 74% of net revenue, up 145% from the same year-ago period
- Total telehealth order volume grew 155% to 199,764
NEW YORK, Aug. 12, 2021 (GLOBE NEWSWIRE) -- LifeMD, Inc. (NASDAQ: LFMD), a leading direct-to-patient telehealth company, reported results for the second quarter ended June 30, 2021. All figure comparisons are to the same year-ago quarter unless otherwise noted. Management will host a conference call today at 4:30 p.m. Eastern time to discuss the results.
Q2 Financial Highlights
- Record revenue of $22.3 million, up 145%
- 93% of revenue generated by subscriptions, up from 56%
- Gross profit totaled $18.1 million, or 81% of net revenues, up 145%
- Platform Contribution of $16.5 million, up 145% (see definition of this non-GAAP financial measure and reconciliation to GAAP, below)
- $17.4 million in cash as of June 30, 2021, versus $9.2 million as of December 31, 2020
Q2 Operational Highlights
- Strong new patient acquisition followed the launch of Nava MD™ in the prior quarter, with favorable Nava MD unit economics showing support for a two- to four-month payback on CAC
- Drove an approximate 30% efficiency improvement in media spend resulting in Customer Acquisition Costs (CAC) that decreased 8% sequentially despite media rates in our core advertising channels rising by more than 20%.
- Daily rate of new patient acquisitions increased by 11% sequentially with improved cost efficiency
- Total patients and customers served nationwide surpassed 360,000 during the quarter
- Telemedicine orders increased 155% to approximately 200,000
- Appointed veteran pharmaceutical strategy and corporate development executive, Alexander Mironov, as president of LifeMD. The appointment reflects LifeMD’s focus on broadening its direct-to-patient pharmaceutical capabilities and further diversifying its telehealth portfolio with patented products.
- Made significant investments in technology and personnel to support the launch of our LifeMD branded primary care offering later this quarter.
Subsequent Events
- LifeMD launched transformational partnerships with a leading provider of laboratory diagnostic services and Axle Health, a leading national provider of in-home diagnostic services, to provide patients with preferred pricing on more than 150 of the most common laboratory diagnostic tests and a national network of more than 2,200 labs.
- Teamed with Particle Health, a leading provider of HIPAA-compliant electronic medical records, to enable LifeMD care providers to have a deeper understanding of their patients’ medical histories in a real-time, user-friendly HIPAA compliant format.
| | | | | |
| ($ in 000s) | | Three Months Ended June 30 | | Y-o-Y |
| Key Performance Metrics | | | 2021 | | | | 2020 | | | % Growth |
| Revenue | | | | | |
| Product (Telehealth) | | $ | 15,799 | | | $ | 7,870 | | | 101 | % |
| Software (LegalSimpli) | | $ | 6,514 | | | $ | 1,219 | | | 434 | % |
| Total Revenue | | $ | 22,313 | | | $ | 9,089 | | | 145 | % |
| | | | | | |
| Subscription Revenue as % of Total | | | 93 | % | | | 56 | % | | 37 | % |
| | | | | | |
| Platform Contribution | | $ | 16,484 | | | $ | 6,718 | | | 145 | % |
| | | | | | |
| Telehealth Volume | | | | | |
| Total Telehealth Orders | | | 199,674 | | | | 78,421 | | | 155 | % |
| | | | | | |
| LegalSimpli | | | | | |
| Active Subscribers | | | 127,344 | | | | 26,761 | | | 376 | % |
| | | | | | | | | | | | |
Management Commentary
“This quarter’s record topline performance was driven by increasing demand for our products and services, along with the support of strong industry tailwinds. Revenue from subscriptions rose to a record 93% reflecting continued high levels of patient acquisition and retention,” stated LifeMD CEO, Justin Schreiber. “Our results reflect the effectiveness of our marketing activities which drove record levels of new patient acquisitions with reduced customer acquisition costs despite a very challenging media market.”
“Despite the lifting of many covid pandemic restrictions and the rapid re-opening of the country, demand for our telehealth products and services has never been greater. Consumers have discovered the many benefits and conveniences of telehealth. As one of the early movers in this space, we’ve been one of the greatest beneficiaries of this permanent change in consumer behavior.”
“Looking ahead, we are excited about the accelerating growth of our brands and in particular, the upcoming launch of our LifeMD primary care platform that is on track for this Fall. The recent partnerships we established with a leading diagnostics provider, Axle Health and Particle Health make our telehealth offerings even more differentiated and competitive.”
LifeMD CFO Marc Benathen, commented: “A key factor driving our strong performance this quarter was our improving unit economics. About halfway through the quarter we were able to further optimize our media strategy. This resulted in an 8% sequential decrease in CAC for the quarter, which was a remarkable achievement given how at the same time digital media rates across our core advertising channels increased by more than 20% reflecting a nearly 30% cost optimization of our media.”
“While we consciously made the decision to increase our sales and marketing spend to capture market share, we were able to leverage these dollars at great efficiency, driving an 11% sequential increase in per day new patient acquisition rates across comparable brands. Unit economics from these new patients remain very strong with CAC paybacks of 3-4 months and gross margins of 80%+. In addition, this quarter we began reporting Platform Contribution, which we believe is a key non-GAAP financial measure to understand the direct profitability of our consolidated brands before G&A and marketing investment. We were very pleased with the profitability of this metric during the second quarter, finishing at $16.5 million, or nearly $10 million higher than the same year-ago quarter.”
“Given our continued momentum and strong performance across our portfolio of brands, we reiterate our revenue guidance of $90 million to $100 million for the full year 2021, or up 141% to 168%.”
Q2 2021 Financial Summary
- Revenue increased 145% to a record $22.3 million from $9.1 million in the same year-ago quarter. The LegalSimpli subsidiary, which operates PDFSimpli, an online software-as-a-service (SaaS) platform, increased 434% to $6.5 million.
- Gross profit increased by 145% to $18.1 million, compared to $7.4 million in the same year-ago quarter. Gross margin was 81.2% as compared to 81.4% in the year-ago quarter.
- Platform Contribution, a non-GAAP financial measure, totaled $16.5 million, compared to $6.7 million in the same year-ago period (see definition of this non-GAAP financial measure and reconciliation to GAAP, below).
- Operating expense in the second quarter of 2021 was $34.2 million, up from $10.6 million in the same year-ago quarter. The increase was primarily due to increases of selling and marketing expenses of $14.0 million in the quarter, as well as an increase in general and administrative expenses of $8.6 million, other operating expenses of $715,000, and customer services expenses of $384,000. Development costs decreased approximately $47,000. G&A expenses for the second quarter of 2021 also included non-cash expenses for stock-based compensation and amortization expenses of $3.3 million. The operating expense increase was primarily associated with investments made to bolster our infrastructure to support a diversified telehealth company that can treat a wide range of recurring indications and primary care. We expect to leverage these investments gradually throughout 2022 and reach EBITDA profitability by the end of 2022, exclusive of significant investments in new brands or verticals.
- Net loss attributable to common stockholders for the second quarter of 2021 was $16.8 million or $(0.64) per share, as compared to a net loss attributable to common stockholders of $3.4 million or $(0.27) per share in the second quarter of 2020.
- Excluding $2.5 million related to stock-based compensation expense and $0.9 million related to financing transaction expense, adjusted EPS, a non-GAAP basis, totaled a loss of $(0.51) per share as compared to a loss of $(0.24) 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 $12.0 million, compared to an adjusted EBITDA loss of $2.1 million in the same year-ago period (see definition of this non-GAAP financial measure and reconciliation to GAAP, below).
- Cash totaled $17.4 million as of June 30, 2021, as compared to $9.2 million as of December 31, 2020. The increase in cash was primary due to the completion of a $15 million debt financing with B. Riley Principal Investments in the second quarter of 2021.
2021 Financial Outlook
The company reiterates its expectation for revenue in the full year of 2021 to total between $90 million and $100 million, which would represent growth of 141% to 168% over the prior year.
Conference Call
LifeMD’s management will host a conference call to discuss the company’s financial results and outlook, followed by a question-and-answer period.
Date: Thursday, August 12, 2021
Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)
Toll-free dial-in number: 1-866-248-8441
International dial-in number: 1-720-452-9102
Conference ID: 6360880
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, Inc. is a rapidly growing direct-to-patient telehealth company that offers cash-pay virtual medical care across all 50 states. LifeMD's telemedicine platform enables virtual access to affordable and convenient medical treatment from licensed providers and, when appropriate, prescription medications and over-the-counter products delivered directly to the patient's home. To learn more, go toLifeMD.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
Email Contact
Investor Relations Contacts
Ashley Robinson
LifeSci Advisors, LLC
arr@lifesciadvisors.com
Tables to Follow
| |
| |
| LIFEMD, INC. |
| CONDENSED CONSOLIDATED BALANCE SHEETS |
| (Unaudited) |
| | | | | | |
| | June 30, 2021 | | December 31, 2020 |
| | | | | | |
| ASSETS |
| | | | | | |
| Current Assets | | | | | |
| Cash | $ | 17,414,237 | | | $ | 9,179,075 | |
| Accounts receivable, net | | 1,612,308 | | | | 648,421 | |
| Product deposit | | 1,391,764 | | | | 816,765 | |
| Inventory, net | | 1,614,117 | | | | 1,264,258 | |
| Other current assets | | 447,233 | | | | 154,876 | |
| Total Current Assets | | 22,479,659 | | | | 12,063,395 | |
| | | | | | |
| Non-current Assets | | | | | |
| Right of use asset, net | | 225,259 | | | | 274,437 | |
| Capitalized software, net | | 1,264,466 | | | | 375,983 | |
| Intangible assets, net | | - | | | | 339,840 | |
| Equipment, net | | 18,116 | | | | - | |
| Total Non-current Assets | | 1,507,841 | | | | 990,260 | |
| | | | | | |
| Total Assets | $ | 23,987,500 | | | $ | 13,053,655 | |
| | | | | | |
| LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' DEFICIT | | | | | |
| | | | | | |
| Current Liabilities | | | | | |
| Accounts payable and accrued expenses | $ | 16,726,698 | | | $ | 11,794,084 | |
| Notes payable, net | | 438,234 | | | | 779,132 | |
| Deferred revenue | | 1,381,938 | | | | 916,880 | |
| Total Current Liabilities | | 18,546,870 | | | | 13,490,096 | |
| | | | | | |
| Long-term Liabilities | | | | | |
| Long-term debt | | 9,251,849 | | | | - | |
| Lease liability | | 240,670 | | | | 285,323 | |
| Contingent consideration on purchase of LegalSimpli | | 100,000 | | | | 100,000 | |
| Total Liabilities | | 28,139,389 | | | | 13,875,419 | |
| | | | | | |
| Commitments and Contingencies | | | | | |
| Mezzanine Equity | | | | | |
| Preferred Stock, $0.0001 per value; 5,000,000 shares authorized | | | | | |
| | | | | | |
| Series B Preferred Stock, $0.0001 per value; 5,000 shares authorized, 3,500 and 3,500 shares issued and outstanding, liquidation value approximately, $1,109 and $1,045 per share as of June 30, 2021 and December 31, 2020, respectively | | 3,881,452 | | | | 3,655,822 | |
| | | | | | |
| Stockholders’ Deficit | | | | | |
| Common stock, $0.01 par value; 100,000,000 shares authorized, 26,635,840 and 23,433,663 shares issued, 26,532,800 and 23,330,623 outstanding as of June 30, 2021 and December 31, 2020, respectively | | 266,359 | | | | 234,337 | |
| | | | | | |
| Additional paid-in capital | | 101,450,858 | | | | 77,779,370 | |
| Accumulated deficit | | (108,584,988 | ) | | | (80,151,905 | ) |
| | | (6,867,771 | ) | | | (2,138,198 | ) |
| Treasury stock, 103,040 and 103,040 shares, at cost | | (163,701 | ) | | | (163,701 | ) |
| Total LifeMD, Inc. Stockholders’ Deficit | | (7,031,472 | ) | | | (2,301,899 | ) |
| | | | | | |
| Non-controlling interest | | (1,001,869 | ) | | | (2,175,687 | ) |
| | | | | | |
| Total Stockholders’ Deficit | | (8,033,341 | ) | | | (4,477,586 | ) |
| | | | | | |
| Total Liabilities, Mezzanine Equity and Stockholders’ Deficit | $ | 23,987,500 | | | $ | 13,053,655 | |
| | | | | | |
| LIFEMD, INC. |
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
| (Unaudited) |
| | | | | | | | | | | | |
| | Three Months Ended June 30, | | Six Months Ended June 30, |
| | 2021 | | | 2020 | | | 2021 | | | 2020 | |
| Net Revenues | | | | | | | | | | | |
| Product revenues, net | $ | | 15,799,610 | | | $ | | 7,869,813 | | | $ | | 29,082,925 | | | $ | | 10,825,614 | |
| Software revenues, net | | | 6,514,001 | | | | | 1,219,970 | | | | | 11,428,798 | | | | | 2,568,981 | |
| Service revenues, net | | | - | | | | | - | | | | | - | | | | | - | |
| Total Revenues, net | | | 22,313,611 | | | | | 9,089,783 | | | | | 40,511,723 | | | | | 13,394,595 | |
| | | | | | | | | | | | |
| Cost of product revenue | | | 4,044,981 | | | | | 1,622,214 | | | | | 7,168,006 | | | | | 2,544,376 | |
| Cost of software revenue | | | 155,027 | | | | | 72,207 | | | | | 295,255 | | | | | 487,686 | |
| Cost of revenues | | | 4,200,008 | | | | | 1,694,421 | | | | | 7,463,261 | | | | | 3,032,062 | |
| | | | | | | | | | | | |
| Gross Profit | | | 18,113,603 | | | | | 7,395,362 | | | | | 33,048,462 | | | | | 10,362,533 | |
| | | | | | | | | | | | |
| Expenses | | | | | | | | | | | |
| Selling and marketing expenses | | | 22,388,510 | | | | | 8,394,331 | | | | | 41,029,241 | | | | | 11,140,213 | |
| General and administrative expenses | | | 10,415,272 | | | | | 1,834,336 | | | | | 17,279,151 | | | | | 3,425,312 | |
| Other operating expenses | | | 917,936 | | | | | 203,260 | | | | | 1,779,017 | | | | | 327,751 | |
| Customer service expenses | | | 473,235 | | | | | 89,482 | | | | | 768,512 | | | | | 257,667 | |
| Development costs | | | 45,413 | | | | | 92,325 | | | | | 237,641 | | | | | 170,467 | |
| Total expenses | | | 34,240,366 | | | | | 10,613,734 | | | | | 61,093,562 | | | | | 15,321,410 | |
| | | | | | | | | | | | |
| Operating Loss | | | (16,126,763 | ) | | | | (3,218,372 | ) | | | | (28,045,100 | ) | | | | (4,958,877 | ) |
| | | | | | | | | | | | |
| Other Income (Expenses) | | | | | | | | | | | |
| Interest expense, net | | | (901,910 | ) | | | | (228,875 | ) | | | | (1,041,373 | ) | | | | (1,021,914 | ) |
| Gain on debt forgiveness | | | - | | | | | - | | | | | 184,914 | | | | | - | |
| | | | (901,910 | ) | | | | (228,875 | ) | | | | (856,459 | ) | | | | (1,021,914 | ) |
| | | | | | | | | | | | |
| Net Loss before provision for income taxes | | | (17,028,673 | ) | | | | (3,447,247 | ) | | | | (28,901,559 | ) | | | | (5,980,791 | ) |
| | | | | | | | | | | | |
| Provision for income taxes | | | - | | | | | - | | | | | - | | | | | - | |
| | | | | | | | | | | | |
| Net Loss | | | (17,028,673 | ) | | | | (3,447,247 | ) | | | | (28,901,559 | ) | | - | | (5,980,791 | ) |
| | | | | | | | | | | | |
| Net loss attributable to noncontrolling interests | | | (197,973 | ) | | | | (68,131 | ) | | | | (468,476 | ) | | | | (206,947 | ) |
| | | | | | | | | | | | |
| Net loss attributable to LifeMD, Inc. | $ | | (16,830,700 | ) | | $ | | (3,379,116 | ) | | $ | | (28,433,083 | ) | | $ | | (5,773,844 | ) |
| | | | | | | | | | | | |
| Deemed distribution to holders of common and Series B Preferred stock | | - | | | | | - | | | | | - | | | | | - | |
| | | | | | | | | | | | |
| Net loss attributable to LifeMD, Inc. common stockholders | $ | | (16,830,700 | ) | | $ | | (3,379,116 | ) | | $ | | (28,433,083 | ) | | $ | | (5,773,844 | ) |
| | | | | | | | | | | | |
| Basic loss per share attributable to LifeMD, Inc. common stockholders | $ | | (0.64 | ) | | $ | | (0.27 | ) | | $ | | (1.12 | ) | | $ | | (0.50 | ) |
| Diluted loss per share attributable to LifeMD, Inc. common stockholders | $ | | (0.64 | ) | | $ | | (0.27 | ) | | $ | | (1.12 | ) | | $ | | (0.50 | ) |
| | | | | | | | | | | | |
| Weighted average number of common shares outstanding: | | | | | | | | | | | |
| Basic | | | 26,289,678 | | | | | 12,348,739 | | | | | 25,381,530 | | | | | 11,523,253 | |
| Diluted | | | 26,289,678 | | | | | 12,348,739 | | | | | 25,381,530 | | | | | 11,523,253 | |
| | | | | | | | | | | | |
| Basic loss per share attributable to LifeMD, Inc. common stockholders - Excluding Stock based Comp & Financing Transaction Expense | | $ | (0.51 | ) | | | $ | (0.24 | ) | | | $ | (0.89 | ) | | | $ | (0.45 | ) |
| | | | | | | | | | | | |
| LIFEMD, INC. |
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (Unaudited) |
| | | | | | | | | | | | | | | |
| | Three Months Ended June 30, | | | Six Months Ended June 30, |
| | 2021 | | | | 2020 | | | | 2021 | | | | 2020 | |
| | | | | | | | | | | |
| CASH FLOWS FROM OPERATING ACTIVITIES | | | | | | | | | | | | | | |
| Net Loss | $ | (17,028,673 | ) | | | $ | (3,447,247 | ) | | | $ | (28,901,559 | ) | | | $ | (5,980,791 | ) |
| Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | | | | | | | | | | | | | | |
| Amortization of debt discount | | 522,559 | | | | | 548,077 | | | | | 522,559 | | | | | 739,324 | |
| Amortization of capitalized software | | 39,413 | | | | | 9,034 | | | | | 63,864 | | | | | 11,585 | |
| Amortization of intangibles | | 255,937 | | | | | 83,903 | | | | | 339,840 | | | | | 167,806 | |
| Write-down of inventory | | 57,481 | | | | | - | | | | | 57,481 | | | | | - | |
| Acceleration of debt discount | | - | | | | | - | | | | | - | | | | | 500,145 | |
| Gain on forgiveness of debt | | - | | | | | - | | | | | (184,914 | ) | | | | - | |
| Operating lease payments | | 24,589 | | | | | 1,817 | | | | | 49,178 | | | | | 3,635 | |
| Liability to issue shares for services | | - | | | | | (840,500 | ) | | | | - | | | | | 32,500 | |
| Stock issued for services | | - | | | | | 35,200 | | | | | - | | | | | 35,200 | |
| Stock compensation expense | | 2,547,300 | | | | | 438,575 | | | | | 4,873,075 | | | | | 534,475 | |
| Changes in Assets and Liabilities | | | | | | | | | | | | | | |
| Accounts receivable | | (260,865 | ) | | | | (153,543 | ) | | | | (963,887 | ) | | | | (338,577 | ) |
| Product deposit | | (91,521 | ) | | | | (220,311 | ) | | | | (574,999 | ) | | | | (131,143 | ) |
| Inventory | | 2,783 | | | | | (254,561 | ) | | | | (407,340 | ) | | | | 141,213 | |
| Other current assets | | (342,432 | ) | | | | (12,557 | ) | | | | (292,357 | ) | | | | 114,047 | |
| Change in operating lease liability | | (22,731 | ) | | | | (552 | ) | | | | (44,653 | ) | | | | (1,061 | ) |
| Deferred revenue | | 42,629 | | | | | 710 | | | | | 465,058 | | | | | 194,118 | |
| Accounts payable and accrued expenses | | 3,600,000 | | | | | 2,053,319 | | | | | 5,158,245 | | | | | 2,880,243 | |
| Net cash used in operating activities | | (10,653,531 | ) | | | | (1,758,636 | ) | | | | (19,840,409 | ) | | | | (1,097,281 | ) |
| | | | | | | | | | | | | | | |
| CASH FLOWS FROM INVESTING ACTIVITIES | | | | | | | | | | | | | | |
| Cash paid for capitalized software costs | | (903,487 | ) | | | | 68,400 | | | | | (952,347 | ) | | | | - | |
| Purchase of equipment | | (18,116 | ) | | | | - | | | | | (18,116 | ) | | | | - | |
| Payment to seller for contingent consideration | | - | | | | | 122,839 | | | | | - | | | | | (277,161 | ) |
| Contingent consideration on business combination paid | | - | | | | | (400,000 | ) | | | | - | | | | | (400,000 | ) |
| Net cash used in investing activities | | (921,603 | ) | | | | (208,761 | ) | | | | (970,463 | ) | | | | (677,161 | ) |
| | | | | | | | | | | | | | | |
| CASH FLOWS FROM FINANCING ACTIVITIES | | | | | | | | | | | | | | |
| Shares issued for cash | | - | | | | | 250,000 | | | | | - | | | | | 250,000 | |
| Cash receipts from investors for unissued shares | | - | | | | | 1,639,000 | | | | | - | | | | | 1,639,000 | |
| Cash proceeds from private placement offering, net | | - | | | | | - | | | | | 13,495,270 | | | | | - | |
| Proceeds from issuance of debt instruments | | 15,000,000 | | | | | - | | | | | 15,000,000 | | | | | - | |
| Cash proceeds from exercise of warrants | | 311,999 | | | | | - | | | | | 311,999 | | | | | - | |
| Cash proceeds from exercise of options | | 742,750 | | | | | - | | | | | 766,750 | | | | | - | |
| Purchase of membership interest of LSS | | (200,000 | ) | | | | - | | | | | (300,000 | ) | | | | - | |
| Distributions to non-controlling interest | | (36,000 | ) | | | | (85,223 | ) | | | | (72,000 | ) | | | | (121,223 | ) |
| Proceeds from note payable | | 363,965 | | | | | 1,000,000 | | | | | 963,965 | | | | | 1,750,000 | |
| Repayment of notes payable | | (600,000 | ) | | | | (858,106 | ) | | | | (1,119,950 | ) | | | | (2,498,808 | ) |
| Debt issuance costs | | - | | | | | - | | | | | - | | | | | (15,000 | ) |
| Net cash provided by financing activities | | 15,582,714 | | | | | 1,945,671 | | | | | 29,046,034 | | | | | 1,003,969 | |
| | | | | | | | | | | | | | | |
| Net increase (decrease) in cash | | 4,007,580 | | | | | (21,726 | ) | | | | 8,235,162 | | | | | (770,473 | ) |
| | | | | | | | | | | | | | | |
| Cash at beginning of period | | 13,406,657 | | | | | 357,877 | | | | | 9,179,075 | | | | | 1,106,624 | |
| | | | | | | | | | | | | | | |
| Cash at end of period | $ | 17,414,237 | | | | $ | 336,151 | | | | $ | 17,414,237 | | | | $ | 336,151 | |
| | | | | | | | | | | | | | | |
| Cash paid for interest | | | | | | | | | | | | | | |
| Cash paid during the period for interest | $ | 125,912 | | | | $ | 248,191 | | | | $ | 143,183 | | | | $ | 349,791 | |
| | | | | | | | | | | | | | | |
| Non-cash investing and financing activities: | | | | | | | | | | | | | | |
| Principal of Paycheck protection Program loans forgiven | $ | - | | | | $ | - | | | | $ | 184,914 | | | | $ | - | |
| Additional purchase of membership interest in LSS issued in performance options | $ | - | | | | $ | - | | | | $ | 144,002 | | | | $ | - | |
| Warrants issued for debt instruments | $ | 6,270,710 | | | | $ | - | | | | $ | 6,270,710 | | | | $ | - | |
| Deemed distribution from down-round provision | $ | - | | | | $ | 1,142,385 | | | | $ | - | | | | $ | 1,142,385 | |
| Stock yet to be issued for capitalized costs | $ | - | | | | $ | - | | | | $ | - | | | | $ | 40,000 | |
| Deemed distribution from down-round provision on unissued shares | $ | - | | | | $ | 87,500 | | | | $ | - | | | | $ | 194,022 | |
| Debt issuance costs for liability to issue shares | $ | - | | | | $ | 219,450 | | | | $ | - | | | | $ | 219,450 | |
| Shares issued for share liability | $ | - | | | | $ | (1,726,000 | ) | | | $ | - | | | | $ | (1,726,000 | ) |
| | | | | | | | | | | | | | | |
About the Use of Non-GAAP Financial Measures:
To supplement our financial information presented in accordance with GAAP, we use Adjusted EBITDA, Adjusted EPS and Platform Contribution which are 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 and/or reflect discretionary growth investments. 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, financing transaction expense, acceleration/ amortization of debt discount, inventory valuation, litigation costs 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 and financing transaction expense. We have provided below a reconciliation of Adjusted EPS to Diluted loss per share attributable to LifeMD, Inc common shareholders.
Platform Contribution is defined as operating income (loss) before general and administrative expenses (excluding Payment Processing Fees), selling and marketing expenses and other operating expenses. We consider Platform Contribution an important non-GAAP financial measure which monitors our performance based on the direct variable costs of delivering the products and services we sell across our brands. We believe Platform Contribution is useful to measure whether we are controlling our direct variable costs associated with our platform brands as well as how effectively we retain our providers' patient and customer subscribers.
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, Adjusted EPS and Platform Contribution may vary from that of others in our industry. None of Adjusted EBITDA, Adjusted EPS or Platform Contribution should 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) | | | | | | | |
| | | Three months ended June 30, | | Six months ended June 30, |
| | | | 2021 | | | | 2020 | | | | 2021 | | | | 2020 | |
| Net (loss) attributable to common shareholders | | $ | (16,830,700 | ) | | $ | (3,379,116 | ) | | $ | (28,433,083 | ) | | $ | (5,773,844 | ) |
| | | | | | | | | |
| Interest expense (excluding debt discount and acceleration of debt) | | | 275,912 | | | | 228,875 | | | | 293,183 | | | | 347,910 | |
| Depreciation & Amortization Expense | | | 250,961 | | | | 92,937 | | | | 403,704 | | | | 179,391 | |
| Amortization of debt discount | | | 522,559 | | | | 548,077 | | | | 522,559 | | | | 739,324 | |
| Financing transactions expense | | | 946,411 | | | | - | | | | 1,072,390 | | | | 62,012 | |
| Acceleration of debt discount | | | - | | | | - | | | | - | | | | 500,145 | |
| Inventory valuation adjustment | | | - | | | | - | | | | - | | | | 769,378 | |
| Litigation Costs | | | 215,125 | | | | - | | | | 215,125 | | | | - | |
| Accrued interest on Series B Stock | | | 103,438 | | | | - | | | | 225,630 | | | | - | |
| Stock-based compensation expense | | | 2,547,300 | | | | 439,275 | | | | 4,873,075 | | | | 534,475 | |
| | | | | | | | | |
| Adjusted EBITDA | | $ | (11,968,994 | ) | | $ | (2,069,952 | ) | | $ | (20,827,417 | ) | | $ | (2,641,209 | ) |
| | | | | | | | | |
| Reconciliation of GAAP Diluted Loss per Share Attributable to Common Shareholders to Adjusted EPS | | | | | | | |
| | Three months ended June 30, | | Six months ended June 30, |
| | | 2021 | | | | 2020 | | | | 2021 | | | | 2020 | |
| Diluted loss per share attributable to LifeMD, Inc. common shareholders | $ | (0.64 | ) | | $ | (0.27 | ) | | $ | (1.12 | ) | | $ | (0.50 | ) |
| | | | | | | | |
| Adjustments to Reconcile GAAP Diluted Loss Per Share to Adjusted EPS | | | | | | | |
| Stockholders Compensation Expense | | 0.10 | | | | 0.03 | | | | 0.19 | | | | 0.05 | |
| Financing Transaction Expense | | 0.03 | | | | - | | | | 0.04 | | | | - | |
| | | | | | | | |
| Adjusted EPS | $ | (0.51 | ) | | $ | (0.24 | ) | | $ | (0.89 | ) | | $ | (0.45 | ) |
| | | | | | | | |
| Reconciliation of Operating Loss to Platform Contribution | | | | | | | |
| (in whole numbers, unaudited) | | | | | | | |
| | | Three months ended June 30, | | Six months ended June 30, |
| | | | 2021 | | | | 2020 | | | | 2021 | | | | 2020 | |
| Operating loss | | $ | (16,126,763 | ) | | $ | (3,218,372 | ) | | $ | (28,045,100 | ) | | $ | (4,958,877 | ) |
| | | | | | | | | |
| Selling and marketing expenses | | | 22,388,510 | | | | 8,394,331 | | | | 41,029,241 | | | | 11,140,213 | |
| General and administrative expenses | | | 10,415,272 | | | | 1,834,336 | | | | 17,279,151 | | | | 3,425,312 | |
| Other operating expenses | | | 917,936 | | | | 203,260 | | | | 1,779,017 | | | | 327,751 | |
| Payment Processing Fees | | | (1,111,097 | ) | | | (495,787 | ) | | | (1,601,321 | ) | | | (917,785 | ) |
| | | | | | | | | |
| Platform Contribution | | $ | 16,483,858 | | | $ | 6,717,768 | | | $ | 30,440,989 | | | $ | 9,016,614 | |
| | | | | | | | | |
© 2021 Canjex Publishing Ltd. All rights reserved.