LifeMD, Inc. (LFMD) Business

Business
Overview

LifeMD
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. We believe the traditional healthcare model requiring patients to visit a physician’s
office, travel to a retail pharmacy, and return for follow-up appointments or prescription refills is complex, inefficient, and costly
which can discourage individuals from seeking necessary medical care and medications. At the same time, the United States (“U.S.”)
continues to experience shortages in primary care key specialty areas.

Through
our vertically integrated care model, we combine proprietary technology, affiliated clinical services, pharmacy infrastructure, and artificial
intelligence (“AI”)-enabled operational systems to deliver longitudinal care at scale. Our mission is to empower individuals
to live healthier lives by expanding access to high-quality virtual and in-home healthcare services. We believe our success is driven
by an exceptional patient experience, our affiliated medical group comprised of high-quality and dedicated providers, and our vertically
integrated care platform

As
of December 31, 2025, LifeMD served approximately 328,000 active patient subscribers across a range of healthcare needs, including primary
care, men’s and women’s health, hormone health, weight management, insomnia, dermatology and cardiology. We provide virtual
clinical services as well as prescription and over-the-counter (“OTC”) treatments, when medically appropriate.

Our
virtual primary care services are primarily offered through a subscription model. Since inception, we have served approximately 1,387,000
patients and customers, expanding access to convenient, and high-quality healthcare.

Telehealth
revenue increased 25% for the year ended December 31, 2025 as compared to the year ended December 31, 2024. Approximately 95% of our
total revenue is derived from recurring subscriptions.

Our
End-to-End Telehealth Platform

LifeMD
has developed a proprietary, fully integrated telehealth and pharmacy platform designed to support diagnosis, treatment,
prescription fulfillment, and ongoing care management within a unified ecosystem. We believe this vertical integration
differentiates LifeMD from point-solution telehealth providers and enables us to deliver more cohesive patient experiences for
patients electing to utilize our affiliated pharmacy while maintaining clinical rigor and operational efficiency.

Our
telehealth technology platform is continually optimized to serve more patients, and this flexible infrastructure can be repurposed for
a variety of existing or future telehealth offerings. Further, this platform allows for rapid development and the scale up of new telehealth
offerings as we identify attractive opportunities. Our platform integrates core capabilities, including:

Through
our desktop and mobile applications, patients move seamlessly from onboarding and consultation to prescription fulfillment and longitudinal
care. We continue to augment our platform with new features selected to better serve our patients.

In
June 2024, we began accepting commercial and government health insurance for our virtual primary care services, including obesity-related
care for medically qualified patients. As of December 31, 2025, our network covered approximately 112 million lives, including approximately
30 million Medicare Fee-for-Service beneficiaries. By June 1, 2026, we expect to expand coverage to approximately 230 million lives,
representing approximately 80% of commercially insured lives in the U.S., 70% of Medicare Advantage beneficiaries, and Medicare Fee-for-Service
beneficiaries.

Affiliated
Provider Network

Care
delivery across the LifeMD platform is supported by an affiliated 50-state medical group composed of licensed physicians and nurse practitioners.
A significant portion of this network consists of full-time providers dedicated to LifeMD’s platform and clinical protocols. Our
providers deliver synchronous and asynchronous virtual consultations across primary care, chronic disease management, metabolic health,
hormone optimization, behavioral health, and other specialty programs. Clinical workflows are supported by our integrated EMR system,
case-load balancing algorithms, secure communications infrastructure, and prescription management tools. We believe that maintaining
a dedicated affiliated provider network, integrated directly into our proprietary systems, enables consistent clinical standards, operational
efficiency, and scalable care delivery across multiple specialty verticals.

Patient
Care Center

We
have an internal patient care center staffed by LifeMD employees to support clinical coordination and customer experience functions.
As of December 31, 2025, the patient care center included approximately 119 employees and is led by an experienced operations and customer
experience team. The patient care center provides hands-on support throughout the patient journey, including care coordination, onboarding
assistance, follow-up communication, and general support services. This infrastructure is designed to enhance accessibility, improve
continuity of care, and support retention within our subscription-based model. We believe the integration of our patient care center
with our technology platform strengthens patient engagement, supports adherence to prescribed therapies, and contributes to sustained
patient satisfaction as we scale.

Our
proprietary technology platform integrates:

These
features support longitudinal care relationships and subscription-based models.

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Pharmacy
and Fulfillment

To
support our telehealth brands, in November 2024 we announced the opening of a state-of-the-art wholly-owned affiliated commercial pharmacy,
marking an important milestone in creating a fully integrated, end-to-end telehealth platform. This 22,500-square-foot facility, located
in Lancaster, PA and designed to fill up to 5,000 daily prescriptions, allows us to offer patients a more cohesive care journey for relevant
conditions from initial consultation to prescription fulfillment within a single integrated ecosystem. In September 2025, we expanded
our pharmacy to include advanced non-sterile compounding capabilities for oral and topical medications, so that we could deliver tailored
therapies designed to meet evolving patient needs while improving efficiency and reducing reliance on third-party providers.

AI
and Data Infrastructure

We
have been an early adopter of AI and large language models (“LLMs”) to integrate and analyze data across the Company. These
technologies support clinical operations, product development, customer service, and internal workflows. We believe these capabilities
have the potential to significantly improve operational efficiency, reduce costs, and increase the agility of our technology, products,
operations, and medical teams, if we are able to mitigate accompanying risks addressed under “Risk Factors”.

Our
Brands and Specialty Care Programs

We
operate three consumer healthcare brands focused on largely unaddressed or underserved healthcare needs.

The
LifeMD brand is our flagship virtual primary care and specialty platform, having served over 679,000 customers and patients to date.
This brand provides patients with access to affiliated high-quality providers for their urgent care and chronic care needs. The LifeMD
brand is a mobile-first full-service destination that provides seamless access to comprehensive virtual medical care including on-demand
consultations and treatment, prescription medications, diagnostics and imaging, wellness coaching, integration with in-home tools and
more. This offering is also supported by partnerships that provide our patients with benefits such as substantial discounts on lab work
and direct integrations and collaborations with pharmaceutical manufacturers that offer patients convenient and affordable access to
important medications. The LifeMD brand addresses high-growth and historically underserved healthcare verticals through defined specialty
care programs as noted below.

Weight
Management

Our
Weight Management Program, launched in April 2023 with a focus on GLP-1 medications, provides 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 to offer personalized, non-GLP-1 treatment plan consisting of three oral medications –
metformin, bupropion, and topiramate – which is expected to grow the program’s addressable market. Since inception, our Weight
Management Program has grown exponentially to approximately 81,000 patient subscribers as of December 31, 2025.

As
part of our commitment to increasing access to branded prescription GLP-1 medications, we have developed an electronic benefits verification
program that allows patients to check pharmacy benefits verification upon enrolling in a LifeMD virtual care program. Secondly, we have
partnered with an AI-powered platform that optimizes prior authorization submissions and aims to improve approval rates for patients.
Thirdly, we have established direct integrations with branded manufacturers who are also committed to lower cost offerings. These enhancements
are designed to minimize delays in care, reduce barriers to accessing brand-name medications, and ensure that a broader range of patients
can benefit from the LifeMD brand’s offerings.

Women’s
Health

LifeMD’s
women’s health platform with a focus on perimenopause and menopause, bone health, and hormone optimization. Women’s health
conditions often require multi-year, longitudinal management. Our platform is designed to provide continuous, coordinated care across
a woman’s lifespan, supported by:

As
we expand this platform and shape our strategy, we are engaging with renowned specialists in their field, including a focus on menopause
and osteoporosis. We feel LifeMD is uniquely positioned to provide continuous support throughout a woman’s lifespan with our holistic,
personalized and accessible care philosophy.

Behavioral
Health

LifeMD’s
behavioral health program provides teletherapy, psychiatry, and medication management for common mental health conditions. Behavioral
health services are delivered through our affiliated provider network and are integrated into our longitudinal care framework. We are
focused on expanding insurance coverage across commercial and government payers to reduce financial barriers and improve access. We believe
behavioral health represents a significant opportunity to drive improved patient outcomes and deepen engagement within our subscription-based
model. According to the National Institute of Mental Health, approximately 59.3 million adults in the U.S. were living with a mental
illness in 2022, yet only 50.6% received treatment.

LifeMD+
Membership

LifeMD+
is our membership-based virtual primary care offering, providing 24/7 access to synchronous and asynchronous care for urgent care, urgent
prescriptions and refills, diagnostics and more. LifeMD+ is designed to serve as an entry point into the LifeMD ecosystem, expanding
customer access through both cash-pay and insurance reimbursement models. This membership forms the foundation of our subscription-based
model and supports cross-vertical expansion into our specialty care programs such as weight management.

Rex
MD is our men’s telehealth platform focused on conditions that are often underdiagnosed or undertreated due to stigma, inconvenience,
or limited access to specialized providers. Since launch, Rex MD has served approximately 691,000 customers and patients. The platform
delivers virtual diagnosis, treatment, and prescription medications for men’s health conditions including erectile dysfunction,
premature ejaculation, hair loss, insomnia, weight loss and performance anxiety. Services are provided through our affiliated licensed
medical providers, and prescription therapies are dispensed either through our wholly owned pharmacy or through partner pharmacies, as
clinically appropriate.

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Testosterone
Replacement Therapy (“TRT”)

TRT
represents a defined specialty care program within Rex MD and a growing focus area for the brand. Low testosterone is associated with
a range of clinical symptoms, including fatigue, decreased libido, reduced muscle mass, and mood changes, and often requires longitudinal
evaluation and management. Our TRT program is designed to provide comprehensive, ongoing care rather than episodic prescription access.

The
program includes:

Because
TRT typically requires continuous monitoring and long-term management, the TRT program aligns with our subscription-based care model
and supports recurring patient engagement. We believe the combination of diagnostic integration, prescription management, pharmacy infrastructure,
and longitudinal clinical oversight differentiates our approach from transactional telehealth offerings and positions Rex MD to address
a growing segment of men seeking accessible hormone health services.

ShapiroMD
is a legacy brand offering access to virtual medical treatment, prescription medications, patented doctor formulated OTC products, topical
compounded medications, and Food and Drug Administration (“FDA”) approved medical devices treating male and female hair loss
through our telehealth platform. ShapiroMD is a leading destination for hair loss treatment across the U.S. and has served approximately
261,000 customers and patients to date.

B2B
Telehealth Partnerships

Organizations
selling healthcare products face a challenging commercial landscape. Increased competition, shrinking market sizes, and challenges reaching
patients via the traditional brick-and-mortar physician offices are forcing pharmaceutical, medical device, and diagnostic companies
to rethink their commercial strategies and increase their focus on digital patient awareness and engagement initiatives. It is estimated
that spending on digital solutions to facilitate greater access to end markets accounts for one-third of the collective $30 billion commercial
spend by these companies in the U.S. We believe LifeMD’s unique telehealth technology platform and virtual care expertise is well-positioned
to address the unmet needs of healthcare product companies as they relate to digital patient awareness, access to care, adherence, and
compliance.

Our
Customers

Our
customer base includes men and women seeking access to virtual healthcare and pharmacy across a broad set of conditions. No single customer accounted for more than 10% of net sales for the years ended December
31, 2025 and 2024.

Our
Growth Strategy

We
have achieved rapid growth since our transformation into a healthcare focused company in 2018, with a compounded annual growth rate in
revenue of 39% since 2020 and revenue growth of 25% in 2025 as compared to 2024. We believe this validates our significant long-term
investments in developing our human capital, technology, brand awareness, omni-channel marketing, and operations infrastructure. We will
continue to make wise investments in differentiated telehealth service offerings and in initiatives that will enhance the experience
our patients have with our platform. As a result of this focused investment in the customer experience, including allocation of additional resources and
expertise, we expect customer repurchase rates and overall customer retention to strengthen.

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Competition

The
markets we serve are large and highly competitive. Numerous online brands compete with us for customers throughout the U.S. and internationally
in virtual primary care, weight loss, men’s and women’s health, and hair loss. The Presidential administration launched an
online platform in February 2026, designed to provide lower cash prices for prescription drugs, with a heavy focus on GLP-1 medications
for weight loss and diabetes. We also compete with traditional mass merchandisers, drug store chains, and independent pharmacies. Key
to retaining and growing our position in the market is taking a patient-centric approach to telehealth, with a strong emphasis on the
quality of care we deliver to our patients. Our human capital and know-how, proprietary technology platform, and unique product offerings
represent meaningful strengths that we believe will enable us to maintain and grow our market-leading position in the U.S.

Our
key competitive strengths include:

Discontinued Operations

On November 4, 2025, we sold our
majority ownership interest in WorkSimpli to Lion Buyer, LLC. This transaction represents a key milestone in the Company’s strategic
transformation, further positioning the Company as a pure-play healthcare company exclusively focused on expanding its virtual care and
pharmacy offerings. WorkSimpli is classified as discontinued operations for all periods presented
in these consolidated financial statements included in this Annual Report on Form 10-K. See Note 4—Discontinued Operations
to our consolidated financial statements included in this report.

Intellectual
Property

We
regard our trademarks, copyrights, domain names, trade dress, trade secrets, proprietary technologies, and similar intellectual property
as important to our success, and we rely on trademark and copyright law, trade-secret protection and confidentiality, patents, and/or
license agreements with our employees, customers, partners and others to protect our proprietary rights. We have licensed in the past,
and expect that we may license in the future, certain proprietary rights, technologies or copyrighted materials from third- parties,
and we rely on those third-parties to defend their proprietary rights, copyrights, and technologies.

From
time-to-time, we register our principal brand names in the U.S. and certain foreign countries. Our material trademarks include RexMD®,
LifeMD®, NavaMD®, ShapiroMD Hair Growth Experts® and Cleared®. Trademark
applications have been filed and are being prosecuted for IgniteRx and VITA. The steps we
take to protect our proprietary rights in our brand names may not be adequate to prevent the misappropriation of our brand names in the
U.S. or abroad. Existing trademark laws afford only limited practical protection for our product lines. The laws and the level of enforcement
of such laws in certain foreign countries where we market our products often do not protect our proprietary rights in our products to
the same extent as the laws of the U.S.

We
have two U.S. patents relating to our Shapiro MD products’ method for treatment of hair loss with a combination of natural ingredients
with one granted on March 24, 2015 and the other on January 3, 2017. In order to protect the confidentiality of our intellectual property,
including trade secrets, know-how and other proprietary technical and business information, it is our policy to limit access to such
information to those who require access in order to perform their functions and to enter into agreements with employees, consultants,
and vendors to contractually protect such information.

Manufacturing
and Supply Chain

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.

Government
Regulation

FDA,
Department of Health and Human Services (“HHS”) and Federal Trade Commission (“FTC”)

Our
business is heavily regulated by the FDA, HHS and the FTC.

In
early 2025, the FDA determined shortages for semaglutide (marketed as Ozempic® and Wegovy®) and tirzepatide (marketed as Mounjaro®
and Zepbound®) were resolved, effectively ending the legal basis for mass compounding, and as a result, we promptly shifted our Weight
Management Program to facilitating access for patients to branded medications through insurance navigation rather than relying solely
on compounded products. Since then, the FDA and HHS have shifted from passive monitoring to enforcement against “mass-marketed”
compounded drugs. In late 2025, the FDA issued over 100 warning letters to telehealth providers and compounders for “false and
misleading” advertising. In February 2026, the HHS General Counsel referred a competing telehealth firm to the Department of Justice
for potential criminal violations of the Food, Drug, and Cosmetic Act. Branded manufacturers like Novo Nordisk have filed lawsuits accusing
other telehealth firms of selling “unauthentic and untested knockoffs.” The Company continues to monitor these developments,
so that it may modify offerings under its Weight Management Program accordingly and reduce its exposure to legal and regulatory proceedings.

The
FDA enforces the Federal Food, Drug and Cosmetic Act (the “FDCA”) and Dietary Supplement Health and Education Act (“DSHEA”)
as they pertain to foods, food ingredients, cosmetics and dietary supplement production and marketing. Dietary supplements are regulated
as a category of food, not as drugs. We are not required to obtain FDA pre-market approval to sell our dietary supplement products in
the U.S. under current laws. Our OTC hair loss products are regulated as cosmetics under the FDCA.

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The
FDA imposes Good Manufacturing Practice (“GMP”) guidelines to ensure that prescription drugs and dietary supplements are
produced in a quality manner, do not contain contaminants or impurities, and are accurately labelled. GMP guidelines include
requirements for establishing quality control procedures, designing, and constructing manufacturing plants, testing ingredients and
finished products, record keeping, and handling of consumer product complaints. Some but not all prescription drug products that we
prescribe are subject to GMP guidelines. For compounded medications, our affiliated pharmacy and other traditional
state-licensed pharmacies are exempt from GMP guidelines but must follow U.S. Pharmacopeia (“USP”) standards and state
regulations. The FDA has broad authority to enforce the provisions of federal law applicable to prescription drugs, dietary
supplements and cosmetics, including the power to monitor claims made in product labelling, to seize adulterated or misbranded
products or unapproved new drugs, to request product recall, and to issue warning letters. FDA also may refer cases to the
Department of Justice to enjoin further manufacture or sale of a product, to issue warning letters, and to institute criminal
proceedings.

Advertising
and product claims regarding the efficacy of products are also regulated by the FTC. The FTC regulates the advertising of dietary supplements,
cosmetics and other health-related products to ensure that any advertising is truthful and not misleading, and that an advertiser maintains
adequate substantiation for all product claims. FTC-launched enforcement actions may result in consent decrees, cease and desist orders,
judicial injunctions and the payment of fines with respect to advertising claims that are found to be unsubstantiated.

Under
current U.S. regulations, our products must comply with certain labelling requirements enforced by the FDA and FTC, but otherwise generally
are not required to receive regulatory approval prior to introduction into the U.S. market. We believe we are in compliance with all
material government regulations applicable to our products.

In
addition to the foregoing, our operations and those of our partners are subject to federal, state and local government laws and regulations,
including those relating to the practice of medicine, telehealth and the prescribing of prescription medications. We believe we are in
substantial compliance with all material governmental regulations applicable to our operations.

Healthcare
Insurance Legislation

The
impact of the One Big Beautiful Bill Act (the “OBBBA”), which was enacted in July 2025, is expected to be far-reaching, with
significant implications for states, their healthcare programs and consumers. Key provisions, the most consequential of which are set
to take effect beginning in 2027, include caps on state-directed payments, limits on provider taxes, stricter eligibility checks, financial
incentives for accurate state administration and reforms to federal subsidies.

Once
the OBBBA is implemented, the Congressional Budget Office anticipates that millions of individuals could lose health insurance between
now and 2034. With respect to individuals who purchase Affordable Care Act coverage through state and federal marketplaces, these losses
may primarily be attributable to changes in pre-verification requirements and limits to tax credit eligibility. States are awaiting additional
guidance from federal agencies on several provisions and are likely to have variation in the details of how they will implement the provisions
of the law.

At
this time, we cannot estimate the OBBBA’s impact, nor can we predict the timing of that impact, on our future business, financial
condition or results of operations, however, we may experience decreased payments (including supplemental payments) from Medicare and
other government programs, as well as delays in the timing of payments.

Data
Privacy and Security Laws

The
data we collect and process is an integral part of our products and services, allowing us to ensure our prices are accurate and relevant,
and reach and advertise to consumers with savings information. We collect and may use personal information to help run our business (including
for analytical and marketing purposes) and to communicate and otherwise reach our consumers. In some instances, we may use third party
service providers to assist us in the above.

We
endeavor to treat our consumers’ data with respect and maintain consumer trust. We provide consumers options designed to allow
them to control the use and disclosure of their data, such as allowing consumers to opt out of any marketing requests, opt out of the
use of marketing cookies, pixels and technologies on our platform, and request deletion of their data.

Since
we receive, use, transmit, disclose and store personal information, including health-related information, we are subject to numerous
state and federal laws and regulations that address privacy, data protection and the collection, storing, sharing, use, transfer, disclosure
and protection of certain types of data. Such regulations include the CAN-SPAM Act, the Telephone Consumer Protection Act of 1991, the
criminal healthcare fraud provisions of the federal Health Insurance Portability and Accountability Act of 1996, as amended by the Health
Information Technology for Economic and Clinical Health Act, (“HITECH”), and their implementing regulations, which we collectively
refer to as HIPAA, Section 5(a) of the Federal Trade Commission Act, and the California Consumer Privacy Act (“CCPA”). The
CCPA requires, among other things, covered companies to provide certain disclosures to California consumers and afford such consumers
abilities to opt-out of certain sales or sharing of personal information. Comprehensive state privacy laws have been adopted in nineteen
other states, with more privacy and data security laws currently proposed in more than half of the states in the U.S. and various federal
legislative drafts in the U.S. Congress. Many new state privacy laws diverge from the CCPA, increasing the complexity of risk by requiring
companies to comply with unique state by state obligations.

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Several
states have also adopted or proposed consumer health data privacy legislation. For example, the Washington State My Health My Data Act
(“MHMDA”), creates new obligations with respect to companies’ processing consumer health data not subject to HIPAA
that limits, and in some cases, requires consumers to provide opt-in consent to the collection, processing, and sharing consumer health
information for certain purposes. The existence of myriad comprehensive privacy laws and consumer health data privacy laws in different
states in the country will make our compliance obligations more complex and costly and may increase the likelihood that we may be subject
to enforcement actions, litigation, or otherwise incur liability for noncompliance, and may limit our ability to process data for certain
purposes. Aspects of these comprehensive privacy laws and consumer health data privacy laws and regulations, as well as their enforcement,
remain unclear, and we may be required to modify our practices in an effort to comply with them.

Additionally,
the FTC, and many state attorneys general are interpreting existing federal and state consumer protection laws to impose evolving standards
for the online collection, use, dissemination and security of health-related and other personal information. Courts may also adopt the
standards for fair information practices promulgated by the FTC, which concern consumer notice, choice, security and access. Consumer
protection laws require us to publish statements that describe how we handle personal information and choices individuals may have about
the way we handle their personal information. If such information that we publish is considered untrue, we may be subject to government
claims of unfair or deceptive trade practices, which could lead to significant liabilities and consequences. Furthermore, according to
the FTC violating consumers’ privacy rights or failing to take appropriate steps to keep consumers’ personal information
secure may constitute unfair acts or practices in or affecting commerce in violation of Section 5(a) of the FTC Act.

HIPAA
imposes on entities within its jurisdiction, among other things, certain standards relating to the privacy, security, transmission and
breach reporting of individually identifiable health information. Entities that are found to be in violation of HIPAA as the result of
a breach of unsecured protected health information, a complaint about privacy practices or an audit by U.S. Department of Health and
Human Services (“HHS”), may be subject to significant civil, criminal and administrative fines and penalties and/or additional
reporting and oversight obligations if required to enter into a resolution agreement and corrective action plan with HHS to settle allegations
of HIPAA non-compliance.

Artificial
Intelligence Laws

We
leverage AI in certain aspects of our business operations. Over 20 states have adopted
legislation governing various aspects of AI systems, such as disclosures regarding the use and
application of AI systems, and the use of AI systems for high risk applications, including certain
health care services. These laws require developers and deployers of AI systems to satisfy numerous obligations, including without
limitation the completion of annual impact assessments, the provision of consumer facing disclosures, and taking measures to prevent
or report instances of algorithmic discrimination. Governmental authorities may investigate and take actions addressing allegations
of noncompliance with these laws. States including Colorado, Connecticut and Oregon have amended their privacy laws to broaden the scope, redefine
“sensitive” data and increase enforcement, with many new requirements taking effect in 2026. While Congress continues to discuss
federal frameworks, such as the American Privacy Rights Act, a comprehensive national law remains pending.

Healthcare
Fraud and Abuse Laws

We
may be subject to a number of federal and state healthcare regulatory laws that restrict business practices in the healthcare industry.
These laws include, but are not limited to, federal and state anti-kickback, false claims, and other healthcare fraud and abuse laws.

The
U.S. federal Anti-Kickback Statute prohibits, among other things, any person or entity from knowingly and willfully offering, paying,
soliciting, receiving or providing any remuneration, directly or indirectly, overtly or covertly, to induce or in return for purchasing,
leasing, ordering, or arranging for or recommending the purchase, lease, or order of any good, facility, item or service reimbursable,
in whole or in part, under Medicare, Medicaid or other federal healthcare programs. A person or entity does not need to have actual knowledge
of the statute or specific intent to violate it in order to have committed a violation. The majority of states also have anti-kickback
laws, which establish similar prohibitions, and in some cases may apply to items or services reimbursed by any third-party payor, including
commercial insurers and self-pay patients.

The
federal false claims laws, including the civil False Claims Act, prohibit, among other things, any person or entity from knowingly presenting,
or causing to be presented, a false, fictitious, or fraudulent claim for payment to, or approval by, the federal government, knowingly
making, using, or causing to be made or used a false record or statement material to a false or fraudulent claim to the federal government,
or knowingly making a false statement to avoid, decrease, or conceal an obligation to pay money to the U.S. federal government. A claim
includes “any request or demand” for money or property presented to the U.S. government. Actions under the civil False Claims
Act may be brought by the Attorney General or as a qui tam action by a private individual in the name of the government. Moreover, a
claim including items or services resulting from a violation of the U.S. federal Anti-Kickback Statute constitutes a false or fraudulent
claim for purposes of the federal civil False Claims Act.

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In
addition, the civil monetary penalties statute, subject to certain exceptions, prohibits, among other things, the offer or transfer of
remuneration, including waivers of copayments and deductible amounts (or any part thereof), to a Medicare or state healthcare program
beneficiary if the person knows or should know it is likely to influence the beneficiary’s selection of a particular provider,
practitioner, or supplier of services reimbursable by Medicare or a state healthcare program.

The
federal Health Insurance Portability and Accountability Act of 1996 created additional federal criminal statutes that prohibit, among
other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including
private third party payors, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a
criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up a material fact or
making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits,
items or services. Similar to the U.S. federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the
statute or specific intent to violate it in order to have committed a violation.

Violations
of fraud and abuse laws, including federal and state anti-kickback and false claims laws, may be punishable by criminal and civil sanctions,
including fines and civil monetary penalties, the possibility of exclusion from federal healthcare programs (including Medicare and Medicaid),
disgorgement and corporate integrity agreements, which impose, among other things, rigorous operational and monitoring requirements on
companies. Similar sanctions and penalties, as well as imprisonment, also can be imposed upon executive officers and employees of such
companies.

State
Licensing Requirements

Certain
states have enacted laws regulating companies that offer and market discount medical plans, including prescription drug plans, subscription
membership programs, or discount cards, such as our prescription offering. These state laws are intended to protect consumers from fraudulent,
unfair, or deceptive marketing, sales and enrollment practices by such plans. It is possible that other states may enact new requirements
or interpret existing requirements to include our programs. Failure to obtain the required licenses, certifications or registrations
to offer and market these subscription discount programs may result in civil penalties, receipt of cease-and-desist orders, or a restructuring
of our operations.

State
Corporate Practice of Medicine and Fee Splitting Laws

With
respect to our telehealth platform, we contract with our physician-owned professional corporation, LifeMD PC, to deliver our telehealth
offerings to its patients in the U.S. We entered into a management services agreement with LifeMD PC pursuant to which we provide them
with billing, scheduling and a wide range of other services, and they pay us for those services. In addition, our platform enables consumers
to opt in to use our prescription offering and/or fill their prescriptions through a third-party mail-order pharmacy. These relationships
are subject to various state laws, which are intended to prevent unlicensed persons from interfering with or influencing the physician’s
professional judgment and prohibiting the sharing of professional services income with non-professional or business interests. These
laws vary from state to state and are subject to broad interpretation and enforcement by state regulators. A determination of non-compliance
could lead to adverse judicial or administrative action against us and/or our providers, civil or criminal penalties, receipt of cease-and-desist
orders from state regulators, loss of provider licenses, or a restructuring of our arrangements with our affiliated professional entities.

Human
Capital

As
of December 31, 2025, we employed 389 employees, of which 347 were full-time, 5 were part-time, and 37 were temporary employees. Of our
total employees, 119 were based at our patient care center in Greenville, SC. We use the services of consultants and third-party service
providers, where needed. None of our employees are represented by a union or covered by a collective bargaining agreement. We have not
experienced any work stoppages, and we consider our relationship with our employees to be good.

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Corporate
History

LifeMD,
Inc. was formed in the State of Delaware on May 24, 1994, under our prior name, Immudyne, Inc. We changed our name to Conversion Labs,
Inc. on June 22, 2018 and then subsequently, on February 19, 2021, we changed our name to LifeMD, Inc. Further, in connection with changing
our name, we changed our trading symbol to LFMD.

Available
Information

Our
Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other reports and amendments to these reports
that we file with or furnish to the SEC at their website, www.sec.gov, are also available free of charge at our website, https://ir.lifemd.com/,
as soon as reasonably practicable after we electronically file these reports with, or furnish these reports to the SEC. The content of
this website is not part of this Annual Report.

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