LifeMD, Inc. Announces Closing of New $40 Million Credit Facility
March 22 2023 - 8:00AM
LifeMD, Inc. (NASDAQ: LFMD), a leading direct-to-patient telehealth
company, today announced that the Company closed on a new senior
secured credit facility with Avenue Capital. The credit agreement,
which matures on October 1, 2026, provides up to $40 million in
total term loan capital including a first tranche of $15 million
funded at closing, a second tranche of $5 million of committed
capital and an additional accordion option to upsize the credit
facility by an additional $20 million.
“We are very pleased to secure this financing and excited to
partner with a leading institutional investor, Avenue Capital, as
we continue to execute upon our strategic growth and profitability
plans,” said Justin Schreiber, Chairman & CEO, LifeMD. “This
financing strengthens our balance sheet and provides LifeMD with
what we believe to be more than sufficient capital to meet our
long-term needs. We believe Avenue’s decision to invest in LifeMD
is a testament to the strength of our current business and our
long-term outlook.”
LifeMD CFO Marc Benathen commented, “This financing provides
LifeMD with important, minimally dilutive capital to meet our
long-term needs. By combining this capital with the Company’s
expectation of a near-term elimination of our cash burn, we believe
LifeMD is now capitalized to execute against our strategic plans
with an enhanced level of financial flexibility. The investment
from a leading institution, Avenue Capital, further validates the
strength of our Company. Lastly, this investment affords LifeMD the
opportunity to retain its majority interest in WorkSimpli which we
believe to be substantially accretive to shareholder value and
expect WorkSimpli to generate 20%+ EBITDA margins in 2023.”
The term loans provide for an 18-month interest-only period,
which can be extended to 24 months upon satisfaction of certain
conditions. The second tranche will be available for draw at the
Company’s election in the fourth quarter 2023 provided the Company
is in compliance with the agreement. The additional accordion
option is available subject to mutual approval by the Company and
Avenue Capital. The credit facility bears interest at an annual
rate equal to the greater of (i) the sum of four and three-quarters
percent (4.75%) plus the Prime Rate, and (ii) twelve and one-half
percent (12.50%). The obligations under the Avenue Capital credit
facility are secured by a lien on substantially all of the assets
of the Company.
The Company also issued warrants with an exercise price of $1.24
per share to purchase up to 967,742 shares of its common stock to
Avenue Capital.
About LifeMDLifeMD is a 50-state
direct-to-patient telehealth company with a portfolio of brands
that offer virtual primary care, diagnostics, and specialized
treatment for men’s and women’s health, allergy & asthma, and
dermatological conditions. By leveraging its proprietary technology
platform, 50-state affiliated medical group, and nationwide
mail-order pharmacy network, LifeMD is increasing access to
top-notch healthcare that is affordable to anyone. To learn more,
go to LifeMD.com.
Cautionary Note Regarding Forward Looking
StatementsThis news release includes forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended; Section 21E of the Securities Exchange Act of
1934, as amended; and the safe harbor provision of the U.S. Private
Securities Litigation Reform Act of 1995. Forward-looking
statements contained in this news release may be identified by the
use of words such as: “believe,” “expect,” “anticipate,” “project,”
“should,” “plan,” “will,” “may,” “intend,” “estimate,” “predict,”
“continue,” and “potential,” or, in each case, their negative or
other variations or comparable terminology referencing future
periods. Examples of forward-looking statements include, but are
not limited to, statements regarding our financial outlook and
guidance, short and long-term business performance and operations,
future revenues and earnings, regulatory developments, legal events
or outcomes, ability to comply with complex and evolving
regulations, market conditions and trends, new or expanded products
and offerings, growth strategies, underlying assumptions, and the
effects of any of the foregoing on our future results of operations
or financial condition.
Forward-looking statements are not historical facts and are not
assurances of future performance. Rather, these statements are
based on our current expectations, beliefs, and assumptions
regarding future plans and strategies, projections, anticipated and
unanticipated events and trends, the economy, and other future
conditions, including the impact of any of the aforementioned on
our future business. As forward-looking statements relate to the
future, they are subject to inherent risk, uncertainties, and
changes in circumstances and assumptions that are difficult to
predict, including some of which are out of our control.
Consequently, our actual results, performance, and financial
condition may differ materially from those indicated in the
forward-looking statements. These risks and uncertainties include,
but are not limited to, “Risk Factors” identified in our filings
with the Securities and Exchange Commission, including, but not
limited to, our most recently filed Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q, and any amendments thereto. Even if
our actual results, performance, or financial condition are
consistent with forward-looking statements contained in such
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performance, or financial condition in subsequent periods.
Any forward-looking statement made in the news release is based
on information currently available to us as of the date on which
this release is made. We undertake no obligation to update or
revise any forward-looking statement, whether as a result of new
information, future events, or otherwise, except as may be required
under applicable law or regulation.
Company Contact LifeMD, Inc. Marc Benathen,
CFOmarc@lifemd.com
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