LifeMD Inc
For the period ended Sep 30, 2024. Filed Nov 7, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 7, 2024
LFMD$2.37+3.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-07.
0001493152-24-030564
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0001493152-24-044032
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 69 previous paragraphs and 72 current paragraphs.
44 unchanged; 25 reworded; 3 added; 0 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 12 previous and 12 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (3)
Current report
Manufacturing and Supply Chain
Current report
We use third parties to manufacture and package our OTC products according to the formulas and packaging guidelines we dictate. In order to minimize costs, we may elect to purchase raw or bulk materials directly from our suppliers and have them shipped to our manufacturers so that we may incur only tableting, encapsulating, and/or packaging costs and avoid the additional costs associated with purchasing the finished product.
Current report
FDA potential restrictions on compounding of GLP-1s, including removal of tirzepatide (marketed as Mounjaro® and Zepbound®) and/or semaglutide (marketed as Ozempic® and Wegovy®) from the drug shortage list, have the potential to disrupt patient treatment continuity, by limiting our ability to provide personalized treatment plans that meet individual patient needs, and could adversely impact our financial results. These restrictions may lead to decreased patient satisfaction, increased attrition rates, and potential legal challenges if patients are unable to access needed medications in a timely manner. Additionally, the inability to offer compounded options may drive patients who do not have insurance coverage, or who are unwilling to pay out-of-pocket, for branded GLP-1 medications to seek other medications and/or alternatives outside of telehealth, adversely impacting the growth and viability of the business.
Reworded paragraphs (25)
Previous wording
The LifeMD telehealth platform integrates best-in-class capabilities including a 50-state medical group, a nationwide pharmacy network, nationwide laboratory and diagnostic testing capabilities, a fully integrated electronic medical records (“EMR”) system and an internal patient care and service call center. These capabilities are integrated by an industry-leading, proprietary telehealth technology that supports a broad range of primary care, chronic disease and lifestyle healthcare needs. Currently, LifeMD treats approximately 254,000 active patient subscribers across a range of their medical needs including primary care, men’s sexual health, weight management, sleep, hair loss and hormonal therapy by providing telehealth clinical services and prescription and over-the-counter (“OTC”) treatments, as medically appropriate. Our virtual primary care services are primarily offered on a subscription basis. Since inception, we have helped approximately 996,000 customers and patients by providing them greater access to high-quality, convenient, and affordable care.
Current wording
The LifeMD telehealth platform integrates best-in-class capabilities including a 50-state medical group, a nationwide pharmacy network, nationwide laboratory and diagnostic testing capabilities, a fully integrated electronic medical records (“EMR”) system and an internal patient care and service call center. These capabilities are integrated by an industry-leading, proprietary telehealth technology that supports a broad range of primary care, chronic disease and lifestyle healthcare needs. Currently, LifeMD treats approximately 269,000 active patient subscribers across a range of their medical needs including primary care, men’s sexual health, weight management, sleep, hair loss and hormonal therapy by providing telehealth clinical services and prescription and over-the-counter (“OTC”) treatments, as medically appropriate. Our virtual primary care services are primarily offered on a subscription basis. Since inception, we have helped approximately 1,059,000 customers and patients by providing them greater access to high-quality, convenient, and affordable care.
Previous wording
Our mission is to empower people to live healthier lives by increasing access to high-quality and affordable virtual and in-home healthcare. We believe our success has been, and will continue to be, attributable to an amazing patient experience, made possible by attracting and retaining the highest-quality providers in the country, and our proprietary end-to-end technology platform. As we continue to pursue long-term growth, we plan to continue to introduce new telehealth product and service offerings that complement our already expansive treatment areas. During April 2023, we launched a highly successful and differentiated GLP-1 Weight Management offering driven by our existing primary care capabilities that already had more than 60,000 patient subscribers as of June 30, 2024. Patients receive a range of weight loss services including prescriptions for GLP-1 medications, as medically appropriate, lab work services, general primary care and holistic healthcare and coaching. The GLP-1 medically supported weight loss market is rapidly growing and is projected to increase from over $13 billion to over $100 billion by 2030, according to J.P. Morgan Research.
Current wording
Our mission is to empower people to live healthier lives by increasing access to high-quality and affordable virtual and in-home healthcare. We believe our success has been, and will continue to be, attributable to an amazing patient experience, made possible by attracting and retaining the highest-quality providers in the country, and our proprietary end-to-end technology platform. As we continue to pursue long-term growth, we plan to continue to introduce new telehealth product and service offerings that complement our already expansive treatment areas. During April 2023, we launched a highly successful and differentiated GLP-1 Weight Management offering driven by our existing primary care capabilities that already had more than 71,000 patient subscribers as of September 30, 2024. Patients receive a range of weight loss services including prescriptions for GLP-1 medications, as medically appropriate, lab work services, general primary care and holistic healthcare and coaching. The GLP-1 medically supported weight loss market is rapidly growing and is projected to increase from over $13 billion to over $100 billion by 2030, according to J.P. Morgan Research.
Previous wording
Our telehealth revenue increased 60% for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023. Total revenue from recurring subscriptions is approximately 97%. In addition to our telehealth business, we own 73.32% of WorkSimpli, which operates PDFSimpli, a rapidly growing software as a service platform for converting, signing, editing, and sharing PDF documents. WorkSimpli recurring revenue is 100%.
Current wording
Our telehealth revenue increased 62% for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023. Total revenue from recurring subscriptions is approximately 92%. In addition to our telehealth business, we own 73.32% of WorkSimpli, which operates PDFSimpli, a rapidly growing software as a service platform for converting, signing, editing, and sharing PDF documents. WorkSimpli revenue from recurring subscriptions is 100%.
Previous wording
Our offerings are sold to consumers on a subscription basis thus creating a relationship-driven patient experience to bolster retention rates and recurring revenue. Our offerings range from prescription medication and OTC products fulfilled on a recurring basis, to primary care and weight management clinical services and ongoing care from a team of dedicated medical providers. In general, our offerings seek to serve a patient throughout the lifecycle of both their general and chronic healthcare needs. As appropriate, prescription medications and OTC products are filled by pharmacy fulfillment partners, and are shipped directly to the patient. The number of patients and customers we serve across the nation continues to increase at a robust pace, with approximately 996,000 individuals having purchased our products and services to date.
Current wording
Our offerings are sold to consumers on a subscription basis thus creating a relationship-driven patient experience to bolster retention rates and recurring revenue. Our offerings range from prescription medication and OTC products fulfilled on a recurring basis, to primary care and weight management clinical services and ongoing care from a team of dedicated medical providers. In general, our offerings seek to serve a patient throughout the lifecycle of both their general and chronic healthcare needs. As appropriate, prescription medications and OTC products are filled by pharmacy fulfillment partners, and are shipped directly to the patient. The number of patients and customers we serve across the nation continues to increase at a robust pace, with approximately 1,059,000 individuals having purchased our products and services to date.
Previous wording
In April 2023, we launched our rapidly growing GLP-1 Weight Management program providing primary care, weight loss, holistic healthcare, lab work and prescription services, as appropriate, to patients seeking to access a medically supported weight loss solution. Since inception, our Weight Management program has grown exponentially to over 60,000 patient subscribers as of June 30, 2024. We remain at the forefront of the rapidly growing GLP-1 weight loss market, which is expected to exceed $100 billion by 2030, with our highly differentiated and comprehensive offering.
Current wording
In April 2023, we launched our rapidly growing GLP-1 Weight Management program providing primary care, weight loss, holistic healthcare, lab work and prescription services, as appropriate, to patients seeking to access a medically supported weight loss solution. Since inception, our Weight Management program has grown exponentially to over 71,000 patient subscribers as of September 30, 2024. We remain at the forefront of the rapidly growing GLP-1 weight loss market, which is expected to exceed $100 billion by 2030, with our highly differentiated and comprehensive offering. In September 2024, we expanded our Weight Management program with an alternative designed for patients who are unable or unwilling to use GLP-1 medications. This treatment plan consists of three oral medications – metformin, bupropion, and topiramate.
Previous wording
WorkSimpli was ranked in the top 25,000 websites globally, with more than 56 million registrants. Since its launch, WorkSimpli has converted or edited over 276 terabytes of documents for customers from the legal, financial, real-estate and academic sectors. WorkSimpli had over 158,000 active subscriptions as of June 30, 2024.
Current wording
WorkSimpli was ranked in the top 25,000 websites globally, with more than 56 million registrants. Since its launch, WorkSimpli has converted or edited over 276 terabytes of documents for customers from the legal, financial, real-estate and academic sectors. WorkSimpli had over 160,000 active subscriptions as of September 30, 2024.
Previous wording
Total revenue, net. Revenues for the three months ended June 30, 2024 were approximately $50.7 million, an increase of 41% compared to approximately $35.9 million for the three months ended June 30, 2023. The increase in revenues was attributable to an increase in telehealth revenue of 67%, partially offset by a decrease in WorkSimpli revenue of 3%. Telehealth revenue accounts for 74% of total revenue and has increased during the three months ended June 30, 2024 due to an increase in online sales demand primarily for LifeMD primary care which experienced an increase of approximately $13.4 million during the three months ended June 30, 2024 compared to the three months ended June 30, 2023 and Medifast Collaboration revenue. WorkSimpli revenue accounts for 26% of total revenue and has decreased slightly year over year due to a lower demand.
Current wording
Total revenue, net. Revenues for the three months ended September 30, 2024 were approximately $53.4 million, an increase of 38% compared to approximately $38.6 million for the three months ended September 30, 2023. The increase in revenues was attributable to an increase in telehealth revenue of 65%, partially offset by a decrease in WorkSimpli revenue of 8%. Telehealth revenue accounts for 75% of total revenue and has increased during the three months ended September 30, 2024 due to an increase in online sales demand primarily for LifeMD primary care which experienced an increase of approximately $18.1 million during the three months ended September 30, 2024 compared to the three months ended September 30, 2023. WorkSimpli revenue accounts for 25% of total revenue and has decreased slightly year over year due to a lower demand.
Previous wording
Total cost of revenue. Total cost of revenue consists of the cost of (1) telehealth revenues, which primarily include product costs, pharmacy fulfillment costs, physician consult fees, and shipping costs directly attributable to our prescription and OTC products and (2) the cost of WorkSimpli revenue consisting primarily of information technology fees related to providing the services made available on our online platform. Total cost of revenue increased by approximately 10% to approximately $5.0 million for the three months ended June 30, 2024 compared to approximately $4.5 million for the three months ended June 30, 2023. The combined cost of revenue increase was due to increased telehealth sales volume during the three months ended June 30, 2024 when compared to the three months ended June 30, 2023. Telehealth costs decreased to 12% of associated telehealth revenues experienced during the three months ended June 30, 2024, from 18% of associated telehealth revenues during the three months ended June 30, 2023 primarily due to improved pricing. WorkSimpli costs were 4% of associated WorkSimpli revenues for the three months ended June 30, 2024 as compared to 3% of associated WorkSimpli revenues for the three months ended June 30, 2023.
Current wording
Total cost of revenue. Total cost of revenue consists of the cost of (1) telehealth revenues, which primarily include product costs, pharmacy fulfillment costs, physician consult fees, and shipping costs directly attributable to our prescription and OTC products and (2) the cost of WorkSimpli revenue consisting primarily of information technology fees related to providing the services made available on our online platform. Total cost of revenue increased by approximately 5% to approximately $5.0 million for the three months ended September 30, 2024 compared to approximately $4.8 million for the three months ended September 30, 2023. The combined cost of revenue increase was due to increased telehealth sales volume during the three months ended September 30, 2024 when compared to the three months ended September 30, 2023. Telehealth costs decreased to 11% of associated telehealth revenues experienced during the three months ended September 30, 2024, from 18% of associated telehealth revenues during the three months ended September 30, 2023 primarily due to improved pricing. WorkSimpli costs were 5% of associated WorkSimpli revenues for the three months ended September 30, 2024 as compared to 2% of associated WorkSimpli revenues for the three months ended September 30, 2023.
Previous wording
Gross profit. Gross profit increased by approximately 45% to approximately $45.6 million for the three months ended June 30, 2024 compared to approximately $31.4 million for the three months ended June 30, 2023, as a result of increased combined sales. Gross profit as a percentage of revenues was 90% for the three months ended June 30, 2024 as compared to 87% for the three months ended June 30, 2023. Gross profit as a percentage of revenues for telehealth was 88% for the three months ended June 30, 2024 compared to 82% for the three months ended June 30, 2023, and for WorkSimpli was 96% for the three months ended June 30, 2024 compared to 97% for the three months ended June 30, 2023. The increase in sales volume and demand for LifeMD primary care, Medifast Collaboration revenue, and improved pricing have contributed to the increase in gross profit.
Current wording
Gross profit. Gross profit increased by approximately 43% to approximately $48.4 million for the three months ended September 30, 2024 compared to approximately $33.8 million for the three months ended September 30, 2023, as a result of increased telehealth revenue and improved pricing. Gross profit as a percentage of revenues was 91% for the three months ended September 30, 2024 as compared to 88% for the three months ended September 30, 2023. Gross profit as a percentage of revenues for telehealth was 89% for the three months ended September 30, 2024 compared to 82% for the three months ended September 30, 2023, and for WorkSimpli was 95% for the three months ended September 30, 2024 compared to 98% for the three months ended September 30, 2023. The increase in sales volume and demand for LifeMD primary care and improved pricing have contributed to the increase in gross profit.
Previous wording
Total expenses. Operating expenses for the three months ended June 30, 2024 were approximately $51.9 million, as compared to approximately $36.3 million for the three months ended June 30, 2023. This represents an increase of approximately 43%, or $15.6 million. The increase is primarily attributable to:
Current wording
Total expenses. Operating expenses for the three months ended September 30, 2024 were approximately $53.1 million, as compared to approximately $38.4 million for the three months ended September 30, 2023. This represents an increase of approximately 38%, or $14.7 million. The increase is primarily attributable to:
Previous wording
Interest expense, net. Interest expense, net consists of interest expense related to the Avenue Facility and notes payable, partially offset by interest income on the Company’s cash account balances for the three months ended June 30, 2024 and interest expense related to the Avenue Facility, notes payable and interest accrued on the Company’s Series B Convertible Preferred Stock for the three months ended June 30, 2023. Interest expense, net decreased by approximately $464 thousand during the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, primarily due to an increase in interest income on the Company’s cash account balances for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023.
Current wording
Interest expense, net. Interest expense, net consists of interest expense related to the Avenue Facility and notes payable, partially offset by interest income on the Company’s cash account balances for the three months ended September 30, 2024 and interest expense related to the Avenue Facility, notes payable and interest accrued on the Company’s Series B Convertible Preferred Stock for the three months ended September 30, 2023. Interest expense, net decreased by approximately $155 thousand during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, primarily due to an increase in interest income on the Company’s cash account balances for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023.
Previous wording
Comparison of the Six Months Ended June 30, 2024 to the Six Months Ended June 30, 2023
Current wording
Comparison of the Nine Months Ended September 30, 2024 to the Nine Months Ended September 30, 2023
Previous wording
Our financial results for the six months ended June 30, 2024 are summarized as follows in comparison to the six months ended June 30, 2023:
Current wording
Our financial results for the nine months ended September 30, 2024 are summarized as follows in comparison to the nine months ended September 30, 2023:
Previous wording
Total revenue, net. Revenues for the six months ended June 30, 2024 were approximately $94.8 million, an increase of 37% compared to approximately $69.1 million for the six months ended June 30, 2023. The increase in revenues was attributable to an increase in telehealth revenue of 60% and an in WorkSimpli revenue of 0.1%. Telehealth revenue accounts for 72% of total revenue and has increased during the six months ended June 30, 2024 due to an increase in online sales demand primarily for LifeMD primary care which experienced an increase of approximately $20.7 million during the six months ended June 30, 2024 compared to the six months ended June 30, 2023 and Medifast Collaboration revenue. WorkSimpli revenue accounts for 26% of total revenue and has remained steady year over year.
Current wording
Total revenue, net. Revenues for the nine months ended September 30, 2024 were approximately $148.2 million, an increase of 38% compared to approximately $107.7 million for the nine months ended September 30, 2023. The increase in revenues was attributable to an increase in telehealth revenue of 62%, partially offset by a decrease in WorkSimpli revenue of 3%. Telehealth revenue accounts for 73% of total revenue and has increased during the nine months ended September 30, 2024 due to an increase in online sales demand primarily for LifeMD primary care which experienced an increase of approximately $38.8 million during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 and Medifast Collaboration revenue. WorkSimpli revenue accounts for 27% of total revenue and has decreased slightly year over year due to a lower demand.
Previous wording
Total cost of revenue. Total cost of revenue consists of the cost of (1) telehealth revenues, which primarily include product costs, pharmacy fulfillment costs, physician consult fees, and shipping costs directly attributable to our prescription and OTC products and (2) the cost of WorkSimpli revenue consisting primarily of information technology fees related to providing the services made available on our online platform. Total cost of revenue increased by approximately 10% to approximately $9.6 million for the six months ended June 30, 2024 compared to approximately $8.8 million for the six months ended June 30, 2023. The combined cost of revenue increase was due to increased telehealth sales volume during the six months ended June 30, 2024 when compared to the six months ended June 30, 2023. Telehealth costs decreased to 13% of associated telehealth revenues experienced during the six months ended June 30, 2024, from 19% of associated telehealth revenues during the six months ended June 30, 2023 primarily due to improved pricing. WorkSimpli costs were 3% of associated WorkSimpli revenues for both the six months ended June 30, 2024 and 2023.
Current wording
Total cost of revenue. Total cost of revenue consists of the cost of (1) telehealth revenues, which primarily include product costs, pharmacy fulfillment costs, physician consult fees, and shipping costs directly attributable to our prescription and OTC products and (2) the cost of WorkSimpli revenue consisting primarily of information technology fees related to providing the services made available on our online platform. Total cost of revenue increased by approximately 8% to approximately $14.6 million for the nine months ended September 30, 2024 compared to approximately $13.5 million for the nine months ended September 30, 2023. The combined cost of revenue increase was due to increased telehealth sales volume during the nine months ended September 30, 2024 when compared to the nine months ended September 30, 2023. Telehealth costs decreased to 12% of associated telehealth revenues experienced during the nine months ended September 30, 2024, from 19% of associated telehealth revenues during the nine months ended September 30, 2023 primarily due to improved pricing. WorkSimpli costs increased to 4% of associated WorkSimpli revenues during the nine months ended September 30, 2024, compared to 3% of associated WorkSimpli revenues for the nine months ended September 30, 2023.
Previous wording
Gross profit. Gross profit increased by approximately 41% to approximately $85.2 million for the six months ended June 30, 2024 compared to approximately $60.3 million for the six months ended June 30, 2023, as a result of increased combined sales. Gross profit as a percentage of revenues was 90% for the six months ended June 30, 2024 as compared to 87% for the six months ended June 30, 2023. Gross profit as a percentage of revenues for telehealth was 87% for the six months ended June 30, 2024 compared to 81% for the six months ended June 30, 2023, and for WorkSimpli was 97% for both the six months ended June 30, 2024 and 2023. The increase in sales volume and demand for LifeMD primary care, Medifast Collaboration revenue, and improved pricing have contributed to the increase in gross profit.
Current wording
Gross profit. Gross profit increased by approximately 42% to approximately $133.6 million for the nine months ended September 30, 2024 compared to approximately $94.1 million for the nine months ended September 30, 2023, as a result of increased combined sales. Gross profit as a percentage of revenues was 90% for the nine months ended September 30, 2024 as compared to 87% for the nine months ended September 30, 2023. Gross profit as a percentage of revenues for telehealth was 88% for the nine months ended September 30, 2024 compared to 81% for the nine months ended September 30, 2023, and for WorkSimpli was 96% for the nine months ended September 30, 2024 as compared to 98% for the nine months ended September 30, 2023. The increase in sales volume and demand for LifeMD primary care, Medifast Collaboration revenue, and improved pricing have contributed to the increase in gross profit.
Previous wording
Total expenses. Operating expenses for the six months ended June 30, 2024 were approximately $97.7 million, as compared to approximately $68.1 million for the six months ended June 30, 2023. This represents an increase of 43%, or approximately $29.6 million. The increase is primarily attributable to:
Current wording
Total expenses. Operating expenses for the nine months ended September 30, 2024 were approximately $150.7 million, as compared to approximately $106.5 million for the nine months ended September 30, 2023. This represents an increase of 42%, or approximately $44.2 million. The increase is primarily attributable to:
Previous wording
Interest expense, net. Interest expense, net consists of interest expense related to the Avenue Facility and notes payable, partially offset by interest income on the Company’s cash account balances for the six months ended June 30, 2024 and interest expense related to the Avenue Facility, notes payable and interest accrued on the Company’s Series B Convertible Preferred Stock for the six months ended June 30, 2023. Interest expense, net decreased by approximately $251 thousand during the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, primarily due to an increase in interest income on the Company’s cash account balances for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023.
Current wording
Interest expense, net. Interest expense, net consists of interest expense related to the Avenue Facility and notes payable, partially offset by interest income on the Company’s cash account balances for the nine months ended September 30, 2024 and interest expense related to the Avenue Facility, notes payable and interest accrued on the Company’s Series B Convertible Preferred Stock for the nine months ended September 30, 2023. Interest expense, net decreased by approximately $406 thousand during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, primarily due to an increase in interest income on the Company’s cash account balances for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.
Previous wording
Loss on debt extinguishment. The Company recorded a $325 thousand loss on debt extinguishment related to the repayment of the CRG Financial loan during the six months ended June 30, 2023 due to a prepayment penalty and various fees associated with the CRG Financial loan.
Current wording
Loss on debt extinguishment. The Company recorded a $325 thousand loss on debt extinguishment related to the repayment of the CRG Financial loan during the nine months ended September 30, 2023 due to a prepayment penalty and various fees associated with the CRG Financial loan.
Previous wording
Working capital decreased by approximately $14.4 million during the six months ended June 30, 2024. The increase in current assets is primarily attributable to an increase in cash of approximately $2.6 million. Current liabilities increased by approximately $16.9 million, which was primarily attributable to an increase in deferred revenue of $6.3 million as a result of increased recurring telehealth subscription revenue, an increase in current portion of long-term debt of $6.3 million, and an increase in accounts payable and accrued expenses of $4.8 million as a result of timing of payments and the Company extending payables and credit terms with vendors.
Current wording
Working capital decreased by approximately $18.1 million during the nine months ended September 30, 2024. The increase in current assets is primarily attributable to an increase in cash of approximately $4.4 million. Current liabilities increased by approximately $24.2 million, which was primarily attributable to an increase in accounts payable and accrued expenses of $11.9 million as a result of timing of payments and the Company extending payables and credit terms with vendors, an increase in deferred revenue of $7.6 million as a result of increased recurring telehealth subscription revenue, and an increase in current portion of long-term debt of $5.3 million.
Previous wording
Net cash provided by operating activities was approximately $9.7 million for the six months ended June 30, 2024, as compared with approximately $2.0 million for the six months ended June 30, 2023. The significant factors contributing to the net cash provided by operating activities during the six months ended June 30, 2024, include: (1) $6.7 million in non-cash stock-based compensation charges, (2) an increase in deferred revenue of $6.3 million, (3) an increase in accounts payable and accrued expenses of $5.4 million and (4) $4.6 million in non-cash depreciation and amortization. These increases were partially offset by the Company’s net loss of $13.5 million for the six months ended June 30, 2024. Net cash provided by operating activities for the six months ended June 30, 2023, was driven primarily by the following: (1) $5.5 million in non-cash stock-based compensation charges, (2) $3.2 million in non-cash depreciation and amortization, (3) a net increase in accounts payable, accrued expenses and other operating activities of $3.1 million, (4) a $325 thousand loss on debt extinguishment and (5) an increase in deferred revenue of $120 thousand. These increases were partially offset by the Company’s net loss of $9.3 million for the six months ended June 30, 2023.
Current wording
Net cash provided by operating activities was approximately $15.9 million for the nine months ended September 30, 2024, as compared with approximately $3.1 million for the nine months ended September 30, 2023. The significant factors contributing to the net cash provided by operating activities during the nine months ended September 30, 2024, include: (1) an increase in accounts payable and accrued expenses of $12.5 million, (2) $9.1 million in non-cash stock-based compensation charges, (3) an increase in deferred revenue of $7.6 million, and (4) $7.3 million in non-cash depreciation and amortization. These increases were partially offset by the Company’s net loss of $19.0 million for the nine months ended September 30, 2024. Net cash provided by operating activities for the nine months ended September 30, 2023, was driven primarily by the following: (1) $8.8 million in non-cash stock-based compensation charges, (2) $5.0 million in non-cash depreciation and amortization, (3) a net increase in accounts payable, accrued expenses and other operating activities of $4.6 million, (4) a $325 thousand loss on debt extinguishment and (5) an increase in deferred revenue of $692 thousand. These increases were partially offset by the Company’s net loss of $14.6 million for the nine months ended September 30, 2023.
Previous wording
Net cash used in investing activities for the six months ended June 30, 2024 was approximately $5.3 million, as compared with approximately $4.1 million for the six months ended June 30, 2023. Net cash used in investing activities for the six months ended June 30, 2024, was due to cash paid for capitalized software costs of approximately $4.5 million, and cash paid for the purchase of equipment of approximately $818 thousand. Net cash used in investing activities for the six months ended June 30, 2023, was due to cash paid for capitalized software costs of approximately $3.9 million, cash paid for the purchase of intangible assets of $149 thousand and cash paid for the purchase of equipment of approximately $64 thousand.
Current wording
Net cash used in investing activities for the nine months ended September 30, 2024 was approximately $8.8 million, as compared with approximately $6.5 million for the nine months ended September 30, 2023. Net cash used in investing activities for the nine months ended September 30, 2024, was due to cash paid for capitalized software costs of approximately $7.5 million, and cash paid for the purchase of equipment of approximately $1.3 million. Net cash used in investing activities for the nine months ended September 30, 2023, was due to cash paid for capitalized software costs of approximately $6.3 million, cash paid for the purchase of intangible assets of $149 thousand and cash paid for the purchase of equipment of approximately $94 thousand.
Previous wording
Net cash used in financing activities for the six months ended June 30, 2024 was approximately $1.9 million as compared with approximately $10.0 million in net cash provided by financing activities for the six months ended June 30, 2023. Net cash used in financing activities for the six months ended June 30, 2024, consisted of: (1) preferred stock dividends of $1.6 million, (2) repayments of notes payable of approximately $315 thousand, (3) distributions to non-controlling interest of $72 thousand, and (4) the final contingent consideration payment made related to the ResumeBuild acquisition of approximately $31 thousand, partially offset by proceeds from the exercise of options of approximately $108 thousand. Net cash provided by financing activities for the six months ended June 30, 2023, consisted of: (1) $14.5 million in net proceeds received from the Avenue Facility and (2) $2.0 million in proceeds received from the CRG Financial loan. These factors contributing to net cash provided by financing activities were partially offset by repayments of notes payable of approximately $4.4 million net of a $325 thousand loss on debt extinguishment on the CRG Financial loan, preferred stock dividends of approximately $1.6 million, payments made to redeem 500 WorkSimpli membership interest units of approximately $307 thousand, contingent consideration payments made related to the ResumeBuild brand acquisition of approximately $125 thousand and distributions to non-controlling interest of $72 thousand.
Current wording
Net cash used in financing activities for the nine months ended September 30, 2024 was approximately $2.7 million as compared with approximately $14.7 million in net cash provided by financing activities for the nine months ended September 30, 2023. Net cash used in financing activities for the nine months ended September 30, 2024, consisted of: (1) preferred stock dividends of $2.3 million, (2) repayments of notes payable of approximately $328 thousand, (3) distributions to non-controlling interest of $108 thousand, and (4) the final contingent consideration payment made related to the ResumeBuild acquisition of approximately $31 thousand, partially offset by proceeds from the exercise of options of approximately $108 thousand. Net cash provided by financing activities for the nine months ended September 30, 2023, consisted of: (1) $19.5 million in net proceeds received from the Avenue Facility, (2) $2.3 million in proceeds received from notes payable and (3) $900 thousand in net proceeds received for the sale of common stock under the ATM Sales Agreement (as defined below). These factors contributing to net cash provided by financing activities were partially offset by repayments of notes payable of approximately $5 million net of a $325 thousand loss on debt extinguishment on the CRG Financial loan, preferred stock dividends of approximately $2.3 million, payments made to redeem 500 WorkSimpli membership interest units of approximately $306 thousand, contingent consideration payments made related to the ResumeBuild brand acquisition of approximately $188 thousand and distributions to non-controlling interest of $108 thousand.
Previous wording
On December 11, 2023, the Company entered into a collaboration with Medifast. Pursuant to certain agreements between the parties, Medifast has agreed to pay to the Company the amount of $10 million to support the collaboration, funding enhancements to the Company platform, operations and supporting infrastructure, of which $5 million was paid at the closing on December 12, 2023, $2.5 million was paid during the three months ended March 31, 2024, and the remainder $2.5 million was paid during the three months ended June 30, 2024.
Current wording
On December 11, 2023, the Company entered into a collaboration with Medifast. Pursuant to certain agreements between the parties, Medifast has agreed to pay to the Company the amount of $10 million to support the collaboration, funding enhancements to the Company platform, operations and supporting infrastructure, of which $5 million was paid at the closing on December 12, 2023, $2.5 million was paid during the three months ended March 31, 2024, and the remaining $2.5 million was paid during the three months ended June 30, 2024.
Previous wording
The Company reviewed its forecasted operating results and sources and uses of cash used in management’s assessment, which included the available financing and consideration of positive and negative evidence impacting management’s forecasts, market, and industry factors. Positive indicators that lead to the Company’s expectation that it will have sufficient cash over the next 12 months following the date of this report include: (1) the Company’s continued strengthening of the Company’s revenues and improvement of operational efficiencies across the business, (2) the expected improvement in its cash burn rate over the next 12 months and positive operating cash flows during the six months ended June 30, 2024, (3) cash on hand of $35.7 million as of June 30, 2024, (4) $53.3 million available under the ATM Sales Agreement, which is part of the $150.0 million available under the 2024 Shelf, (5) management’s ability to curtail expenses, if necessary, and (6) the overall market value of the telehealth industry, which it believes will continue to drive interest in the Company already evidenced by the Medifast Collaboration and Medifast Private Placement noted above.
Current wording
The Company reviewed its forecasted operating results and sources and uses of cash used in management’s assessment, which included the available financing and consideration of positive and negative evidence impacting management’s forecasts, market, and industry factors. Positive indicators that lead to the Company’s expectation that it will have sufficient cash over the next 12 months following the date of this report include: (1) the Company’s continued strengthening of the Company’s revenues and improvement of operational efficiencies across the business, (2) the expected improvement in its cash burn rate over the next 12 months and positive operating cash flows during the nine months ended September 30, 2024, (3) cash on hand of $37.6 million as of September 30, 2024, (4) $53.3 million available under the ATM Sales Agreement, which is part of the $150.0 million available under the 2024 Shelf, (5) management’s ability to curtail expenses, if necessary, and (6) the overall market value of the telehealth industry, which it believes will continue to drive interest in the Company already evidenced by the Medifast Collaboration and Medifast Private Placement noted above.