NOTE 1 – NATURE OF THE ORGANIZATION AND BUSINESS

Nature of Business

LifeMD, Inc. is a patient-centric, direct-to-patient healthcare company providing a high-quality, cost-effective, and convenient way for patients to access virtual medical care and pharmacy services. Through the Company’s vertically integrated care model, it combines proprietary technology, affiliated clinical services, pharmacy infrastructure, and artificial intelligence (“AI”)-enabled operational systems to deliver longitudinal care at scale. The Company’s mission is to empower individuals to live healthier lives by expanding access to high-quality virtual and in-home healthcare services.

The Company’s telehealth platform helps patients access their licensed providers for diagnoses, virtual care, and prescription medications, often delivered on a recurring basis. In addition to its telehealth prescription offerings, the Company sells over-the-counter (“OTC”) products. All products are available on a subscription or membership basis, where a patient can subscribe to receive regular shipments of prescribed medications or products. This creates convenience and often discounted pricing opportunities for patients and recurring revenue streams for the Company.

With its first brand, ShapiroMD, the Company has built a full line of proprietary OTC products for male and female hair loss including Food and Drug Administration (“FDA”) approved OTC minoxidil and an FDA-cleared medical device and a personalized telehealth platform offering that gives consumers access to virtual medical treatment from their providers and, when appropriate, a full line of oral and topical prescription medications for hair loss. The Company’s men’s brand, RexMD, currently offers access to virtual medical treatment for a variety of men’s health needs, including erectile dysfunction, premature ejaculation and hair loss.

In 2022, the Company launched our virtual primary care offering under the LifeMD brand, LifeMD Primary Care. This offering provides patients with access to affiliated high-quality providers for their urgent care and chronic care needs.

In 2023, we launched our GLP-1 Weight Management Program providing primary care, metabolic coaching, lab work, and prescription services (as appropriate) to patients seeking to access a medically supported weight loss solution. In September 2024, we expanded our Weight Management Program with a personalized, non-GLP-1 treatment plan consisting of three oral medications – metformin, bupropion, and topiramate.

On November 4, 2025, LifeMD, Inc. sold its majority ownership interest in WorkSimpli, LLC (“WorkSimpli”), which operates a software as a service application called PDF Simpli, to Lion Buyer, LLC. WorkSimpli is classified as discontinued operations for all periods presented in these unaudited consolidated financial statements. For a description of the transaction, see Note 4—Discontinued Operations.

During the third quarter of 2026, the Company entered into a new pharmaceutical supply agreement under which it acts as principal in the related revenue arrangement. Historically, the Company acted as an agent in its pharmacy-related revenue arrangements because it did not take ownership of the inventory. Under the new agreement, the Company purchases and holds the inventory and is primarily responsible for fulfilling patient orders, and it therefore recognizes revenue on a gross basis less vendor rebates. The arrangement resulted in a significant increase in the Company’s receivables, inventory and accounts payable balances.

Unless otherwise indicated, the terms “LifeMD,” “Company,” “we,” “us,” and “our” refer to LifeMD, Inc. (formerly known as Conversion Labs, Inc.) and LifeMD Pharmacy Holdings LLC, an affiliated limited liability company, (“LifeMD Pharmacy”). The affiliated network of medical Professional Corporations and medical Professional Associations administratively led by LifeMD Southern Patient Medical Care, P.C. (“LifeMD PC”) is the Company’s affiliated, variable interest entity in which we hold a controlling financial interest. Unless otherwise specified, all dollar amounts are expressed in United States dollars.

Liquidity Evaluation

As of September 30, 2026, the Company has an accumulated deficit of approximately $256.3 million and a negative working capital of approximately $12.4 million. The Company has incurred significant operating losses to date and has been funding operations primarily through the cash generated from operating activities, issuance of common and preferred stock, and through loans and advances.

On January 2, 2026, the Company entered into a Credit Agreement with Citizens Bank, N.A. (“Citizens”), which provided for a senior secured revolving credit facility in an aggregate principal amount of up to $30 million (the “Citizens Credit Facility”). As of September 30, 2026 and up to the date of termination, the Company did not draw any amounts under the Citizens Credit Facility. The Credit Agreement was terminated effective November 9, 2026, and the Company subsequently entered into a Loan and Security Agreement with affiliates of Avenue Capital Group (collectively, “Avenue”). See Note 16 – Subsequent Events.

The Company entered into an At Market Issuance Sales Agreement (the “ATM Sales Agreement”) with B. Riley Securities, Inc. and Cantor Fitzgerald & Co. relating to the sale of its common stock. In accordance with the terms of the ATM Sales Agreement, the Company may, but is not obligated to, offer and sell, from time to time, shares of common stock, through or to the Agents, acting as agent or principal. Sales of common stock, if any, will be made by any method permitted that is deemed an “at the market offering” as defined in Rule 415 under the Securities Act. On June 7, 2024, the Company filed a shelf registration statement on Form S-3 under the Securities Act, which was declared effective on July 18, 2024 (the “2024 Shelf”). Under the 2024 Shelf at the time of effectiveness, the Company had the ability to raise up to $150.0 million by selling common stock, preferred stock, debt securities, warrants, and units including $53.3 million of its common stock under the ATM Sales Agreement. As of September 30, 2026, the Company had $44.6 million available under the ATM Sales Agreement.

The Company expects that its existing cash as of September 30, 2026 of $21.9 million and its Loan and Security Agreement with Avenue will be sufficient to fund our planned operating expenses and capital expenditure requirements for at least the next 12 months from the issuance date of these unaudited consolidated financial statements.