UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934

 

Date of Report (Date of earliest event reported): April 16, 2021

 

LifeMD, INC.

(Exact name of Registrant as specified in its charter)

 

Delaware   001-39785   76-0238453

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

800 Third Avenue, Suite 2800

New York, NY 10022

(Address of principal executive offices, including zip code)

 

(866) 351-5907

(Registrant’s telephone number, including area code)

 

Check the appropriate box below if the 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:

 

[  ] Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
[  ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
[  ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
[  ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common Stock, par value $0.01 per share   LFMD   The Nasdaq Capital Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

 

Emerging growth company [  ]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]

 

 
 

 

 

 

Item 8.01 Other Events.

 

On April 16, 2021, LifeMD, Inc. (the “Company”) issued a press release announcing that it has released an open letter to its shareholders, dated April 16, 2021, in response to an error-ridden “research note” published by anonymous short-seller, Culper Research. A copy of the press release and the open letter to shareholders are being filed herewith as Exhibits 99.1 and 99.2, respectively, and are incorporated in this Item 8.01 in their entirety by reference.

 

Item 9.01. Exhibits.

 

(d) Exhibits

 

Exhibit No.   Exhibit
99.1   Press Release, dated April 16, 2021.
     
99.2   Open Letter to Shareholders, dated April 16, 2021.

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    LifeMD, INC.
       
Dated: April 16, 2021 By: /s/ Justin Schreiber
     

Justin Schreiber

Chief Executive Officer

 

 

 

 

 

 

Exhibit 99.1

 

 

Short-Seller’s Note is Short on Credibility, LifeMD Says

 

Company cites errors, distortions in anonymous “note” intended to hammer stock for quick profit

 

NEW YORK, April 16, 2021 LifeMD, Inc. (“the Company”) (NASDAQ: LFMD), a leading direct-to-patient telehealth company, released a letter to shareholders today in response to an error-ridden “research note” published by an entity called Culper Research. Culper is an anonymous short-seller that refuses to disclose the individuals or entities behind it.

 

“LifeMD uses technology to make health care more accessible to people from all walks of life. By directly providing telemedicine to patients, we help them confront the health issues that dramatically impact the quality of their lives,” said Justin Schreiber, LifeMD’s Chairman and CEO.

 

“We pursue this mission with transparency and integrity, so it is troubling that an anonymous short-seller would make reckless allegations about our company seemingly with the sole intent of causing a drop in our share price for his or her own personal gain. The author of this report is utterly lacking in credibility, as its numerous errors, distortions and half-truths show.”

 

Schreiber and the company’s CTO Stefan Galluppi jointly issued an open letter to shareholders on the company’s website (link here), in which they addressed Culper’s meritless allegations in detail. It identifies numerous errors and basic problems with the report’s credibility, including:

 

  Culper distorts Galluppi’s and Schreiber’s relationship with Redwood Scientific.  Schreiber held a passive investment and non-controlling interest in the company, and Galluppi left the company two and a half years before it was investigated by the Federal Trade Commission.
  Culper lies about LifeMD’s licensing practices. LifeMD takes the utmost care in creating an environment that fosters the highest standard of care for our patients. LifeMD’s physician network consists of nearly 90 board-certified and monitored doctors who legally dispense prescription medications; LifeMD has never allowed an unlicensed physician to perform a telehealth consult for any of its brands.  In the rare instance we discover that one of the doctors in our network has a regulatory issue, we remove that doctor immediately – as we did in the case of Dr. Badii. In the case of Dr. Kalter, he was mistakenly described as a California physician on our website. When we became aware of the web design error, we fixed it immediately. Dr. Kalter never wrote a single prescription for us in California.

 

 
 

 

  Culper misrepresents the facts about Veritas MD, the platform we used for  25% of all telehealth consults in Q1 and expect to be using for 100% of consults by the end of Q2. Apparently under the misimpression it was intended to be a consumer-facing app, Culper fails to understand it is our technological backbone, driving the complete and full lifecycle of patient engagement. This process extends from patient intake, patient queries and follow-ups, doctor engagement, and pharmacy services to billing. Everything we have disclosed about our LifeMD digital health platform, also known as VeritasMD, is accurate.

 

Schreiber took exception to the dishonest way in which Culper writes about LifeMD’s treatment of its shareholders. “LifeMD began as a start-up, financed through multiple rounds of venture capital funding. In doing so, some of the most sophisticated institutional investors and advisors in the world have conducted countless hours of extensive due diligence validating LifeMD prior to investing,” he said.

 

“The person who’s hurting our shareholders is the author of the Culper report, who spreads disinformation behind a cloak of anonymity,” Schreiber added. “For that, the author is culpable.”

 

About LifeMD

 

LifeMD, Inc. is a leading telehealth company that is transforming the healthcare landscape with direct-to-patient product and service offerings. 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 to LifeMD.com.

 

Cautionary Note Regarding Forward Looking Statements

 

This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended, regarding, among other things our plans, strategies and prospects — both business and financial. While we believe that our plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Many of the forward-looking statements contained in this news release may be identified by the use of forward-looking words such as “believe,” “expect,” “anticipate,” “should,” “planned,” “will,” “may,” “intend,” “estimated,” and “potential,” among others. Important factors that could cause actual results to differ materially from the forward-looking statements we make in this news release include market conditions and those set forth in reports or documents that we file from time to time with the United States Securities and Exchange Commission. All forward-looking statements attributable to LifeMD, Inc. or a person acting on its behalf are expressly qualified in their entirety by this cautionary language.

 

Company Contact

LifeMD, Inc.

Marc Benathen, CFO

Email Contact

 

Investor Relations Contacts

Ashley Robinson

LifeSci Advisors, LLC

arr@lifesciadvisors.com

 

 

 

 

Exhibit 99.2

 

April 16, 2021

 

Fellow Shareholders,

 

Transparency lies at the heart of effective communication and trust. At LifeMD, we believe in practicing full transparency among our team members and with our patients, our doctors and you, our shareholders. With that in mind, Stefan and I wanted to address the “note” about LifeMD recently published by an anonymous short-seller, under the name “Culper Research,” which contains numerous errors, distortions, and outright misstatements of fact. The irony of reckless authors purporting to prove concealment while concealing their own identities speaks for itself.

 

Our History – LifeMD has been repeatedly vetted by outside experts.

 

LifeMD began as a startup. After producing rapid growth, we met some of the world’s most sophisticated institutions and advisors, who conducted countless hours of due diligence before investing in the Company. We welcomed scrutiny from well-respected institutional investors, elite law firms, and seasoned auditors and from our current, Top 50 accounting firm, Friedman LLP. These consistent vettings – combined with the exceptional composition of our Board of Directors – demonstrate the long-term value we are committed to building for shareholders.

 

Our Physicians – Our physicians are fully licensed to dispense all prescription medications offered by LifeMD.

 

The anonymous “note” contains multiple falsehoods about our licensing and prescription practices. The facts: LifeMD has never allowed an unlicensed physician to perform a telehealth consult for any of its brands, and RexMD does not provide an OTC offering for erectile dysfunction (ED).

 

Our physician network consists of licensed providers and doctors who are board certified to treat patients and dispense prescription medications. We take the utmost care in creating an environment that fosters the highest standard of care for our patients. All physicians prescribing medications for our brands are regularly monitored for good standing by LegitScript, a third-party company that largely governs compliance for critical industries such as telehealth.

 

We hold our medical providers to the highest standards of licensure and conduct. Since our inception, we have twice identified physicians working for third-party medical groups who had regulatory issues. Because of our rigorous standards, we immediately removed the two doctors from our platform. We currently work with some 87 physicians, all licensed to prescribe in every state where they treat patients.

 

 
 

 

With regard to Dr. Badii, mentioned in the short-seller’s note, when the RexMD brand originally launched, Dr. Badii was providing consults for RexMD through a third-party physician network. When we learned of his regulatory issues, we immediately barred him from RexMD’s physician network, though he remained licensed to prescribe ED medication.

 

Culper Research’s use of the DEA’s notice of the revocation of Dr. Badii’s DEA registration on March 31, 2021 as supposed proof of his inability to prescribe medication for RexMD patients shows that this short-seller is poorly informed. None of the medications provided on RexMD are considered controlled substances, and Dr. Badii never prescribed controlled substances as a physician for LifeMD’s brands. Nevertheless, we have implemented more stringent oversight policies.

 

Feel free to peruse these linked documents regarding Dr. Badii’s licenses and ability to perform consultations in these respective states.

 

  Dr. Badii, NY license: Link
  Dr. Badii, Indiana License: Link (enter License #: 01076026A)
  Dr. Badii MI License: Link
  Dr. Badii, CA License: Link

 

Regarding Dr. Joshua Kalter, he is licensed in Massachusetts and actively treats Rex MD patients. The state (California) listed under Joshua Kalter on the archived page resulted from an error by one of our web developers. We corrected the mistake as soon as we learned of it, and we take full responsibility for it. We apologize for this oversight in quality control.

 

Nevertheless, we would point out that all consultations performed by Dr. Kalter were for Rex MD patients in Massachusetts. And while Dr. Kalter did not perform a single consult for a California resident, according to Executive Order N-43-20 signed by Governor Newsom, he was permitted by law to provide service to California patients for Rex MD.

 

In fact, regarding the points raised by Culper Research about doctors operating outside of their licensed state(s), this short-seller ignores that federal and state regulations changed to encourage telehealth in response to the COVID-19 pandemic. Forty-one states and three territories provided greater flexibility to physicians providing virtual care so that they could treat patients outside of states where they were licensed and shoulder the increased burden on the American healthcare system. More information concerning states waiving licensure requirements due to Covid-19 can be found on the Federation of State Medical Boards (FSMB) here.

 

 
 

 

The LifeMD digital health platform, formerly known as VeritasMD, is the Company’s proprietary technology stack that underpins our brands’ customer journeys.

 

Contrary to Culper Research’s misstatements, the LifeMD digital platform is one of the most important aspects of our technology stack. Everything we disclosed about our LifeMD digital health platform, formerly known as VeritasMD, is accurate. It drives the full lifecycle of patient engagement, extending from patient medical intake and queries to doctor engagement, pharmacy services, billing, and shipping.

 

Since exclusively licensing the initial codebase in May 2020 that ultimately led to our fully developed telehealth platform, we have continued to develop its capabilities, ensuring that it is able to provide the infrastructure for our rapidly growing and complex telehealth business. The LifeMD team works tirelessly on this technology platform. We are proud of its capabilities and scalability, which we believe will allow us to continue to further improve the quality of care that we currently provide.

 

Our Relationship with BV Global

 

In 2017, during a nascent stage of then Conversion Labs (now LifeMD), we realized we had many inefficiencies in our shipping and fulfillment logistics, which negatively impacted our delivery times and customer experience. We turned to Justin’s father, Brian Schreiber, who served as our consultant based on his experience in operations management and logistics. After months of collective frustration with our third-party logistics provider (shipping), Justin’s father offered to take over this component of our business.

 

This resulted in meaningful improvements in operations, deliverability, and a marked reduction in shipping costs and delivery time. Moreover, the rates we paid and still pay to BV Global, are in fact, lower than what many third party logistics providers would charge for comparable service. In addition to fulfillment services, Brian has assisted with managing various aspects of our supply chain and logistics infrastructure for the past several years, at no cost to the company. Regarding the “direct costs” mentioned in the short-seller’s note, as with all other third-party logistics providers, shipping costs are covered by the Company selling their product(s). We also note that our relationship with BV Global, prominently disclosed in all of the company’s filings, has never been flagged or mentioned as an issue in any audit or due diligence by institutions that have invested into LifeMD.

 

Our Marketing Performance - Amateur Analysis vs. Our Actual Results

 

Culper Research’s SimilarWeb “analysis” represents a juvenile attempt to comprehend the intricacies of direct-to-consumer marketing. To understand the Company’s performance, nothing speaks louder than actual, hard numbers. The numbers the unnamed Culper Research author misstates as “fact” do not reflect the actual performance of LifeMD. We ask our shareholders to stay tuned for our preliminary Q1 2021 figures, which we plan to release early next week.

 

 
 

 

Promotions notwithstanding, we do not pay or provide free products for positive reviews.

 

LifeMD does not pay for positive customer reviews. We don’t need to; the strong growth in the Company’s subscription telemedicine brands is a clear indicator of patient satisfaction and significant organic revenue potential. We maintain honest, responsive and transparent selling and cancellation policies. We remain readily accessible to all of our patients in a timely fashion by email or phone. In fact, our customer support line has an average hold time of roughly three minutes.

 

Stefan Galluppi left Redwood more than two and a half years before that company’s issues with the Federal Trade Commission (FTC). Justin Schreiber held a strictly passive investment with a non-controlling interest in the business.

 

Six years ago, Justin made an unfortunate investment in Redwood that he lost in its entirety. However, he regularly brings up Redwood when introducing the LifeMD story to new investors because it was how he met Stefan, the co-founder of LifeMD and partner in building the great company that they have today.

 

Stefan served as Redwood’s CTO, but he held no equity in the company and tendered his resignation in March of 2016, departing more than two and a half years prior to the FTC issues faced by Redwood. Moreover, Stefan’s name does not appear in a single case or proceeding involving Redwood. Stefan’s removal of Redwood references occurred in our 2017 yearly filing, before Redwood was even approached by the FTC. Other than Stefan’s short-term involvement as Redwood’s CTO, no current or former member of our management team had a management role or significant equity ownership in Redwood at any time.

 

In Closing

 

We want to thank the investment community; the outpouring of support has been nothing but inspirational. Since founding LifeMD, the Company has scaled at an incredible pace, growing rapidly to over 140 employees. We have accomplished this milestone in just a few years, achieving step changes across the Company’s corporate and development lifecycle.

 

In our most recent disclosure, we highlighted that full year revenues grew nearly 200% and we have surpassed 300,000 customers nationwide ― a testament to LifeMD’s disruption of the healthcare industry. LifeMD’s rapid growth is a clear and strong signal that the rising paradigm shift in patient point-of-care towards telehealth services is a long-term trend.

 

 
 

 

As a premier direct-to-patient telehealth company, we believe that we can build a smarter, more cost-effective, convenient way of accessing healthcare. We are actively challenging the conventions of healthcare and winning new patients in the process.

 

It has been an amazing journey; the Company’s rapid revenue growth has been completely organic, generated from brand launches like RexMD, ShapiroMD and most recently NavaMD. We are excited to bring to market more new brands, including a concierge medicine service, under the LifeMD brand.

 

We believe our success is also a direct result of the trust and service integrity we have built along the way. It begins with our network of fully licensed and monitored physicians and extends to our proprietary LifeMD technology platform. Our satisfaction ratings can be reviewed across numerous consumer advocate websites, including Trust Pilot, Amazon, and Site Jabber, where ShapiroMD has accumulated an extraordinary 28,000 reviews with an average of 4.5 out of 5 stars. We want to thank our employees and supporters for helping us build an amazing company and look forward to providing regular market updates in the future.

 

Sincerely,

 

Justin Schreiber, Chairman and CEO Stefan Galluppi, CTO

 

For more information about the Company, please view its disclosure documents as filed with the Securities and Exchange Commission. These filings are available online at www.sec.gov or in the Investors section of the Company’s website at www.LifeMD.com.

 

About LifeMD

 

LifeMD, Inc. is a leading telehealth company that is transforming the healthcare landscape with direct-to-patient product and service offerings. 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 to LifeMD.com.

 

Cautionary Note Regarding Forward Looking Statements

 

This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended, regarding, among other things our plans, strategies and prospects—both business and financial. While we believe that our plans, intentions, and expectations reflected in or suggested by these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions, or expectations. Forward-looking statements are inherently subject to risks, uncertainties, and assumptions. Many of the forward-looking statements contained in this news release may be identified by the use of forward-looking words such as “believe,” “expect,” “anticipate,” “should,” “planned,” “will,” “may,” “intend,” “estimated,” and “potential,” among others. Important factors that could cause actual results to differ materially from the forward-looking statements we make in this news release include market conditions and those set forth in reports or documents that we file from time to time with the United States Securities and Exchange Commission. All forward-looking statements attributable to LifeMD, Inc. or a person acting on its behalf are expressly qualified in their entirety by this cautionary language.