LifeMD, Inc. (NASDAQ:LFMD) Q2 2023 Earnings Call Transcript

LifeMD, Inc. (NASDAQ:LFMD) Q2 2023 Earnings Call Transcript August 9, 2023

LifeMD, Inc. misses on earnings expectations. Reported EPS is $-0.23 EPS, expectations were $-0.09.

Operator: Good afternoon. Thank you for joining us today to discuss the results for LifeMD’s Second Quarter ended June 30, 2023, Joining the call today are Justin Schreiber, Chairman and Chief Executive Officer; and Marc Benathen, Chief Financial Officer of LifeMD. Following management’s prepared remarks, we will open the call for a question-and-answer session. [Operator Instructions]. Before we begin, I would like to remind everyone to during this call the company will make a number of forward-looking statements, which are subject to numerous risks and uncertainties that may cause actual results to differ materially from those projected. Those risks and uncertainties are described in the company’s 10-K and 10-Q filings, and we’ve seen other filings that LikeMD may make with the SEC from time to time.

Forward-looking statements made during this call are based on current information available to the company as of today, August 9, 2023, the company assumes no obligation to update or revise any forward-looking statements after today’s call, except as required by law. Also, please note that the management will be discussing certain non-GAAP financial measures that the company believes are important in evaluating light in this performance. Details on the relationship between those non-GAAP measures to the most comparable GAAP measures and reconciliations thereof can be found in the press release issued earlier today. Finally, I would like to remind everyone that today’s call is being recorded and will be available for replay in the Investor Relations section of the company’s website.

Now I’d like to turn the call over to LifeMD’s, CEO, Justin Schreiber. Please go ahead.

Justin Schreiber: Thank you, and good afternoon, everyone. After the market closed, we issued a press release announcing our second quarter results and posted an updated corporate presentation on our website at ir.lifemd.com. Our second quarter performance was strong, continuing the momentum established in the first quarter. Our core telehealth business demonstrated double-digit sequential revenue growth once again and we achieved positive free cash flow ahead of schedule. Additionally, we successfully rolled out our weight management program, which helps patients access GLP-1 medications, such as Wegovy, Ozempic, and Mounjaro. The early results have far surpassed our expectations. I’ll speak more about this in a moment. Given the tremendous opportunity ahead of us in weight management and the continued strong performance of our existing telehealth business, we are raising our full-year 2023 revenue guidance to $146 million to $152 million, up from the previous $140 million to $150 million.

At the same time, we are modestly reducing our adjusted EBITDA guidance to account for the near-term investments in marketing and our clinical team, which are vital to rapidly scaling this business. We expect these investments to pay off quickly and foresee our weight management program being substantially accretive to both our top and bottom lines beginning in 2024. For the remainder of the year, LifeMD remains focused on four key initiatives that we believe will continue to drive meaningful value for our shareholders. First is the launch of our direct-to-consumer weight management program which we officially rolled out this past April. As I mentioned and while still early, the weight management business is off to an incredible start with the strongest unit economics of any of our telehealth offerings to date.

In a very short period, we’ve amassed over 5,000 active patient subscribers translating to an annual run rate of over $7 million in recurring revenue. We’re aiming to scale this offering rapidly with the goal of increasing our Q2 average of approximately 100 new patients per day to 400 patients to 500 patients per day by year-end. We believe our offering is truly differentiated from the competition. Our weight management program stands apart as it’s not just a vehicle for selling GLP-1 Therapeutics. Instead, it’s a comprehensive package that is fully integrated with our primary care services, offering a holistic blend of diagnostics, physician visits, lab work, lifestyle support and access to GLP-1 for eligible patients. For these services, LifeMD patients subscribed quarterly at approximately $129 per month.

Additionally, by requiring synchronous virtual visits with our physicians, we can provide comprehensive care to our patients and gain valuable data on coexisting conditions. Our preliminary forecast suggests that this program could significantly enhance our 2024 revenues and EBITDA. Second, during the quarter, we continued to make significant progress in securing high-value partnerships, building off the unique telemedicine driven capabilities LifeMD offers in weight management, we launched two exciting partnerships with national companies in the health, wellness, and weight management segments. We are very excited to be aligned with these premier partners to combine our tremendous telehealth capabilities with their unique nutritional and coaching core competencies to maximize patient outcomes.

We believe these initial pilot partnerships can serve as an extremely valuable jumping off point for future B2B partnerships in this area. Looking ahead, we see ample opportunity to expand upon these and other new partnerships leveraging the unique capabilities of LifeMD’s telehealth platform and our affiliated medical group. For the third key initiative, we’re making substantial progress towards accepting private insurance within our virtual primary care platform. Initially, we aim to accept insurance from private insurance providers within our top 10 states by the end of the year. Alongside a team of regulatory and compliance experts, we’ve also begun preliminary work on Medicare acceptance. We believe these efforts represent significant and valuable expansion opportunities for our primary care platform.

Finally, our existing lifestyle health-care businesses anchored by our Men’s Health brand, RexMD, and our WorkSimpli subsidiary continued to outperform. As we guided to last year, we spent considerable time in 2022 refining the unit economics and ad spend investment in RexMD to focus not only on high-growth areas, but also on highly profitable patient cohorts. While this required us to take a small step back in 2022 in terms of sequential revenue growth, we returned to such growth in the first quarter of 2023 and continue to deliver against that momentum. Second quarter revenue for RexMD was up 10% sequentially and represents the second consecutive quarter of double-digit sequential growth. We expect to deliver high single-digit sequential revenue growth on a go-forward basis with year-over-year growth for the balance of 2023 exceeding 20% for our existing lifestyle businesses.

Our WorkSimpli subsidiary continued to deliver strong results. with revenue growing 66% and subscribers growing 35% versus the prior year. These businesses remain incredibly profitable with both achieving net contribution margins in excess of 30% during the second quarter, including corporate costs. With that, I’ll turn the call over to our CFO, Marc Benathen, who will provide a summary of our financial results. Marc?

Marc Benathen : Thank you, Justin, and good afternoon, everyone. LifeMD this momentum continued with our strong financial performance in the second quarter. We not only grew consolidated net revenues to a record $35.9 million, exceeding guidance but we also achieved positive free in net cash flow for the first time in the company’s history and ahead of our expectations. At the same time, we launched our weight management program with significant success right out of the gate. Our early estimates to just this offering will be substantially accretive to our top and bottom lines beginning in 2024. Now turning to results for the second quarter of 2023. As I mentioned, revenue in the second quarter totaled $35.9 million, an increase of 18% compared with the same quarter a year ago and up 9% versus the first quarter.

Total telehealth net revenues grew 11% sequentially. Net revenues from LifeMD branded primary care products and services including wave management, increased 122% sequentially versus the first quarter and accounted for nearly 8% of total telehealth revenues in the second quarter, up from 4% of revenues in the first quarter. Subscriber growth remained very strong with the number of telehealth active subscribers increasing 15% to more than 192,000 and WorkSimpli active subscribers increasing 35% to over 171,000 both versus the year ago period. As Justin mentioned, WorkSimpli revenue was $13.6 million in the second quarter, an increase of 66% from the year ago period. The percentage of total revenue that came from recurring subscriptions increased to a record 95% of total net revenues.

Gross margin for the second quarter was 87%, up 200 basis points versus the prior year period. Gross profit for the quarter totaled $31.4 million, an increase of 22% from the year-ago period. Operating expenses for the second quarter totaled $36.3 million, a decrease of $2.4 million versus the year-ago period reflecting reductions in both selling and marketing expenses and in G&A expenses, driven by the slight rationalization of head count executed in 2022 and a $1.2 million decrease in stock-based compensation. Operating expenses in the second quarter included $5.2 million of noncash expenses associated with stock-based compensation, write-off, noncash interest, depreciation and amortization expenses. Our GAAP net loss attributable to common stockholders for the second quarter totaled $7.5 million or a loss of $0.23 per share.

This compares to a GAAP net loss attributable to common stockholders of $13.8 million or a loss of $0.45 per share in the second quarter of 2022. Adjusted EPS is a non-GAAP financial measure that excludes noncash expenses, dividends, insurance acceptance readiness, litigation expense, noncontrolling interest, M&A expenses, financing, transaction costs and foreign currency translation, reflecting those adjustments, non-GAAP diluted EPS for the second quarter of 2023 was $0.05 per share compared with a loss of $0.22 per share in the same year ago period. Adjusted EBITDA, a non-GAAP financial measure that excludes the same items I just noted for adjusted EPS, totaled a gain of $1.7 million in the second quarter of 2023. This compares with an adjusted EBITDA loss of $6.9 million in the same year ago quarter.

Adjusted EBITDA was lower than our quarterly guidance primarily due to the investments we made to support the growth of our weight management program and our performance in new patient acquisition for this business and our core lifestyle businesses. Cash and cash equivalents totaled $11.9 million as of June 30, 2023, and reflected positive free cash flow of $2.3 million during the second quarter. As a result of the very strong early results from the weight management program launch and continued strength in our existing businesses, we are raising our full year revenue guidance to $146 million to $152 million up from our previous guidance of $140 million to $150 million. We also are slightly lowering our adjusted EBITDA guidance to $10 million to $13 million versus $12 million to $18 million previously, reflecting near-term investments required to scale patient acquisition and the clinical team for our weight management program.

For the third quarter, we are guiding revenue to be between $37.5 million and $38.5 million, with adjusted EBITDA between $2.5 million and $3.5 million. We believe the strength of our balance sheet and profitability of our current operations will more than adequately allow us to fund the growth in our business. This wraps up our financial results. I’d now like to turn the call back over to Justin.

Justin Schreiber : Thanks, Marc. To summarize, LifeMD has delivered another strong quarter and made substantial strides towards our strategic goals. The launch of our weight management program within primary care provides another tremendous vehicle to accelerate top-line growth beyond our previous expectations and drive significant bottom line in 2024. Our core lifestyle healthcare businesses, along with our WorkSimpli subsidiary, continue to make robust contributions to our profits. Moreover, we’re witnessing a surge in interest from potential partners looking to harness our best-in-class telehealth platform to bolster their growth. In closing, I would like to thank the entire LifeMD team for their hard work and for continuing to drive our outstanding financial performance and sustained business momentum. With that, I would like to open the call for Q&A.

Q&A Session

Operator: [Operator Instructions]. Our first question comes from David Larsen with BTIG. Please go ahead.

David Larsen : Justin and Marc, congratulations on a very good quarter. Can you maybe talk a little bit more about the weight management program and GLP-1? I think you mentioned the total revenue contribution in the quarter, but can you please just repeat that? And then can you give any more color around which drugs are actually being prescribed and the process around that? Like are these prescriptions that are — the patients and the members are getting every quarter? Do they have to talk to the primary care physicians every quarter or every month? And then don’t they need a prior off or not? Are these cash pay? Just any more color around the nature of the drugs themselves would be very helpful. Thank you.

Justin Schreiber: Yes, David, this is Justin. I’ll start, and then Marc can comment as well on some of the revenue numbers attributed to that business segment. The way the program works is patients come in they’re typically paying for — or they’re always paying for the first quarter upfront. Sometimes they oftentimes will receive a discount on the first quarter. The three drugs that are most commonly being prescribed when it’s appropriate for the patient are Wegovy, Ozempic and Mounjaro. And patients are onboarded. We’re — once they’re onboarded, they’re seeing a physician within three days. We’ve dramatically scaled the medical group to accommodate the surge in demand that we’ve seen for these therapies. Once patients are onboarded prior to seeing it, well, they’re onboarded by our medical assistant team and our tech platform, one of the things that we will do is run electronic benefit verification for the patient on all of the drugs to see which drugs are covered for.

If necessary, a priority is done, we’re seeing we’re seeing between 20% and 30% of people — of patient insurance covering one of these drugs in some fashion. And we’re constantly looking for new technologies. We’re talking to a number of partners right now that we think can help us improve that. Another thing that I think is going to be a big long-term competitive advantage for LifeMD with getting patients covered for these therapies, is going to be having our physician network and our providers in network across initially the 10 largest states but eventually across all 50 states. That’s something that’s really going to set LifeMD kind of apart from the competition. And then also with our — as we mentioned in the call, we’re putting a lot of effort right now into building out a compliance infrastructure for helping Medicare patients access these therapies in 2024, which is something that we’re really excited about.

And we think this is going to be a big growth driver for us down the road.

Marc Benathen : This is Marc. Just on the revenue piece. So pure weight management, excluding any other virtual primary care or any products in Virtual Primary Care was about $500,000 of cash revenue in the quarter. We only started marketing it in late April and it’s typically a quarterly subscription that rebuilds after that initial quarter for subsequent three-month periods. So, with that, we ended up having to defer a lot of that revenue. We’re actually building up a pretty healthy deferred revenue balance, which is why the cash flow from this business was substantially better than the GAAP recognition. So, we only recognized a little bit over $100,000 of revenue in the quarter, deferred another $400 million. We came out of the quarter with just under 3,000 active patients on weight loss by.

[indiscernible] Sitting here today, we’re over 5,000 and that’s growing pretty rapidly. with the average person paying about $129 a month. So, we expect to see a pretty significant snowball effect financially from this business.

David Larsen : Okay. I think I heard you say that the primary care business was like 8% of revenue in 2Q, up from 4% in 1Q. Is that correct?

Marc Benathen : That is correct. That includes all the primary care business. So that’s Virtual Primary care plus weight loss essentially.

David Larsen : Okay. So, we’re talking about like maybe $2 million a quarter, which is actually, I think, very good, right, $8 million a year is what the state is right now?

Marc Benathen : For virtual primary care, including weight loss, that’s correct. Of that $2 million there was only about $150,000 in Q2 that was recognized for weight loss. But as I mentioned, the billings for weight loss were substantially higher. We deferred down to the day, so about $400,000 of deferred revenue, which will get recognized this quarter, and the billings are increasing pretty significantly as we acquire more subscribers.

David Larsen : Okay. And then what do you expect the annual run rate to be for weight loss or GLP-1 by 4Q, let’s call it, December of ’23. Any sense for that or guess for that?

Marc Benathen : Yes. I mean it’s probably in the range of just pull up that figure. I mean you’re probably looking at on a monthly basis around $1.5 million to $2 million per month, which if you multiply that out, $20 million, $20 million to $25 million.

David Larsen : Wow. Okay. So that’s very substantial. You’re talking about a 20% increase potentially in product revenue annually from weight management alone. Okay. And then have you disclosed pricing for these different products? I mean — or do they sort of vary based on like your negotiations? And if you’re not disclosing that publicly, I totally understand, and then are you…

Marc Benathen : We’re not closing publicly on the product, but we’re not charging our patients for the product. Basically, the $129 a month, so is a service. So, you’re paying for life on this weight management program you’re essentially paying for the physician services. As part of that, our physicians will attempt to get you approval for GLP-1, of which they have a good success rate. If there’s no insurance approval for that, you can obviously cash pay for those GLP-1s as well. But what we’re actually earning revenue on is the service that we are providing to our patients. providing access to GLP-1s as one of those services within wave management. There’s obviously a big draw from a lot of patients.

David Larsen : Okay. I want to be respectful of the other analysts on the call, and I don’t want to take up too much time. But are you providing access to compounded medications for these members? And what percentage of the mix would be compounded medications and is there a difference between the branded GLP-1 products and/or compounded medications.

Justin Schreiber: David, this is Justin. I’ll comment on that. I don’t want to — I don’t want to get into talking about the difference between the compounded therapies and the parade therapies. What’s important is that we always try put patients on a branded GLP-1 product. We put a lot of work into trying to make that happen for every single patient. In the event that patients are not covered for the therapy and can’t afford the therapy, we have a compounding pharmacy partner that does a great job as a very compliance-minded organization buys some of these — all their ingredients from FDA-approved wholesalers, and we are introducing patients to that compounding pharmacy when they’re rejected by their insurance company for coverage.

And look, I think that a majority of the patients that are not covered for these therapies are choosing the compounded route, which I [indiscernible] to you, we think that access and helping patients get on a therapy that clearly is creating amazing outcomes for them is most important. And so, we feel really good about doing this, and we’re really hoping the coverage expands for these therapies and then we can put more patients on a branded therapy moving forward. But I can tell you that our patents that are using the compounded therapy are very happy with it, and it’s going very well, and we’re really pleased with our partner there.

David Larsen : Okay. I’ll hop back in the queue. Congratulations on a great quarter.

Operator: Our next question comes from Sarah James of Cantor Fitzgerald. Please go ahead.

Sarah James : Thank you. And congrats on a great quarter. I was hoping you could help us understand what your longevity assumptions are for the 2023 guidance. And as you talked about sort of what the run rate could look like? How many months of subscription do you assume your weight management clinic members are staying with you?

Marc Benathen : Yes. So, we’re not publicly disclosing that information yet because it is very early on, and we prefer to speak to that the actual data. What I will say is we assume a very substantial falloff in our model from month one month to month 12, not because we believe that, that will actually happen because we underwrote this very conservatively. And even with the type of assumption — and we’re talking like retaining like in the model of 10% or less at the end of the first year, which again, we expect to retain way more than that. But that’s what we ran in our model. And even with that, we expect this business to add tens of millions of dollars on the top line next year and reasonably healthy EBITDA margin is probably low double digits.

Justin Schreiber: Sarah, I’ll just mention, too, that it’s Justin. We’re working on a lot — this is one of our biggest focuses internally and is also the reason for some of the partnerships that we mentioned. We’re working on developing custom food plans for patients that are transitioning off of therapy or starting therapy. So, we’re working on various coaching options. We think we don’t sit here and assume that you’re going to start somebody on one of these therapies, and they’re going to be on for years, right? Like we think this has got to be a comprehensive offering. It’s got to involve food, coaching, therapies, and primary care. And we’re really focused on doing that. And we think patients will come off the therapy and come back on therapy. And we want to make sure that we have a solution that can help them and with wherever they’re at in their way lost journey.

Sarah James : Sure. And is this a book that you look at as having a cross-sell opportunity or because primary care is fully integrated into the clinic, there would be no need to try to cross-sell on a traditional primary care

Justin Schreiber: Yes, I think — look, I think the cross-sell is one of the most important things of the thing cross-sell could be a down sell. I mean one of the things that LifeMD is doing that almost nobody is doing. Even our biggest competitors to the best of my knowledge, is forcing every single patient to have a 20-minute virtual consult, a video consult with one of our amazing providers. And so, these significantly increases the cost. Our cost goes up because of that. It’s — we’re having to scale the medical group dramatically because of that. But I think that’s going to pay off, right? And I think there are other offerings that we have in weight loss beyond even food that we can cross-sell — and I’m hopeful that — I know for a fact that we’re treating — these patients are building a great relationship with these doctors and nurse practitioners.

And I think there are a lot of other — a lot of other things that we could offer them. And I think they’ll want to continue to be part of LifeMD in some way.

Sarah James : And last question here. You talked about the insurance coverage of the GLP-1 in the context of coverage in some fashion. And I guess I had always just thought of it as a binary yes or no on coverage. Can you give a little bit of color by what you meant on that if it’s not binary?

Justin Schreiber : Can you give me a little bit more color on specifically what you’re asking? I’m not sure I follow the question.

Sarah James : Yes. So, you talked about the success rate that you’re getting with insurance coverage of some of the weight loss medications like Mounjaro, Wegovy, and he talked about it as coverage in some fashion. And I was just wondering what that meant because I typically think of the payers either covering it or not covering it, doing I guess no decision on whether they’re going to reimburse it.

Justin Schreiber : So, I’m speculating a little bit. And we talked — we’ve talked to all the big patient support hubs out there that are managers that are trying to help patients get covered for these therapies every day all day. And this landscape is constantly changing. And there are no like kind of clear — there’s not really a clear outlook on coverage, plans to cover today, don’t cover tomorrow. The one thing that I think though, Sarah, is that it’s going to help. It’s only going to help if our affiliated providers are in network with these plans. And going through the prior authorization process, I think that’s going to help patients get — I think that’s going to expand coverage. How much? I don’t really know. But I do think that will help with patients covering therapies.

I think that a lot of these — I think that some of these big providers are going to have some preference for in-network providers versus out-of-network providers. But that’s a little bit of speculation, right? I mean there’s just — there’s nobody really knows like how and when coverage is going to expand for these therapies right now.

Unidentified Analyst: All right, I got it thank you.

Operator: Our next question comes from Neil Chatterji with B. Riley Securities. Please go ahead.

Unidentified Analyst: Congratulations on a great quarter. This is William Wood on for Neil. Just a couple of questions from us. Curious about how do you see potential shortages for these GLP-1s impacting the launch on the continued progression of your weight management program.

Justin Schreiber : We expect there to be supply shortages of these drugs throughout 2024. That being said, we’re — we’ve got a — it’s got an army of medical assistance and customer service reps that are helping patients find these therapies. We’re going to continue to do everything possible to help patients find them. There is a lot of supply out there. And if in the event that we can’t find the branded therapies will help patients access a compounded solution until the branded therapies are available.

Unidentified Analyst: That makes sense. And then kind of on a follow-up. Obviously, just recently, Novo Select had their CVOT trial readout for VERGOVI indicating a reduction in major adverse cardiovascular events. So, if there is a potential label expansion following this Phase III, how do you see that impacting payer coverage overall for VERGOVI, and then potentially, how do you see that driving incremental adoption for the GLP-1 program and obviously, into the cardiovascular program?

Justin Schreiber : Payers will have no choice but to cover these drugs. I think there will be broad coverage for the drug I think there will be some discounting that’s going to have to happen as well. But I think payers and eventually Medicare and Medicaid will have no choice but to cover these drugs, given what we know about the safety profile and efficacy profile today. And that’s part of the reason why that’s a big part of the reason why LifeMD is putting so much effort into building out this extremely robust infrastructure right now for both private insurance and Medicare.

Unidentified Analyst: Got it. I appreciate that. And then one, if I may. Just thinking what competitive impact do you anticipate from the Amazon Clinic nationwide expansion? And then could LifeMD plug into that network as a potential partner? Would the platform be — platform, sorry, be competing?

Justin Schreiber : Amazon is always going to be there. it’s — I don’t give — based on what I know about the program, I don’t believe that given what Amazon is charging for one-off visits, LifeMD could make money participating in their offerings. So, I don’t think it would be in the interest of our shareholders to participate in Amazon’s program. Look, I think that without getting into too much of a long-winded response. I think that Amazon is an incredible business. People shop at Amazon because they can get almost any of these things, so many products delivered so quickly and conveniently at a great price to their doorstep. When it comes to health care, remember, LifeMD can essentially compete for head-on with Amazon and deliver better care immediately just as conveniently, and maybe not at the same price as Amazon, but we don’t want to deliver care at the same price as Amazon to deliver the kind of quality, comprehensive care that we’re offering at LifeMD, we can’t offer it at Amazon prices.

So, I think Amazon is going to take some percentage of the market like they do in everything else. But as you can see in the investor presentation we uploaded today, and everybody listening to this call knows, the TAM [ph] is massive here. And I think that Amazon being in the space probably only helps. I don’t see it as something that’s going to hurt us. And certainly, as Amazon has brought these programs online, we’ve seen absolutely no impact to our business.

Unidentified Analyst: Got it. That’s really helpful. I appreciate it. I’ll jump back in the queue and congratulations again on a really good quarter. Thanks.

Operator: Our next question comes from [indiscernible]. please go ahead.

Unidentified Analyst: Hi, Congrats on your progress. This is Chetan on behalf of [indiscernible]. Can I’m sorry if I missed this during your prepared remarks, but could you provide any breakdown on subscriber revenue growth for your individual lifestyle telehealth businesses? I heard Rex MD, but I just want to make sure.

Marc Benathen : Yes. This is Mark. So essentially, our lifestyle health care businesses, I mean the total telehealth is what we provided — we’re up to about 192,000 subscribers there. That was up roughly 15% year-on-year. We continue to have subscribers quarter-over-quarter pretty aggressively. So, yes, that’s — and a lot of that is obviously driven by the lifestyle businesses and then the virtual primary care business, which includes weight management has grown pretty significantly. That’s at this point. up about through the end of the second quarter, about 17,000 of those 192,000 total subscribers came from that, but that business actually to a 122% increase in revenue in the second quarter versus the first quarter before its 122% increase sequentially.

Unidentified Analyst: Great. Thank you. And any color on partnerships? I know you mentioned that in your prepared remarks about potential future partnerships either in your telehealth businesses or even with your weight management program. So, any comment on the kind of the nature of partnerships that you’re looking at? Is it something similar to what we saw with healthwarehouse.com?

Justin Schreiber : Look, both of the partnerships are large food and diet companies in the U.S., they’re both very, very big successful brands. They’re — we’re going to be talking more about these right now. They’re both — their pilot programs live with both of these potential partners. And we’re really excited about the results that we’ve seen so far. And we’re going to be talking more about these partnerships over the coming weeks and months. So, we’ll keep you posted on that.

Unidentified Analyst: Great. And lastly, a commentary on possible insurance coverage for the primary care business. If I’m not mistaken, you said you should have something in place by the end of this year, right?

Justin Schreiber : Yes. So, the plan is to have this infrastructure live by October. For private insurance. So, just let’s just assume in Q4, it’s a little bit difficult to say exactly when it’s going to go live. But sometime in Q4 and then Medicare is going to be — I think Q1 is probably a good estimate of when we’ll start testing some of the Medicare offerings. That could get pushed as well. If the weight management business continues to scale like we think it is, like we think it will, we could decide to push the Medicare coverage. It’s a significant compliance lift for us to just overall operational lift to start taking Medicare, and we’re going to make sure we do it right.

Unidentified Analyst: Great thank you congratulation.

Operator: There are no further questions at this time. I would like to turn the floor back over to Justin Schreiber for closing comments. Please go ahead, sir.

Justin Schreiber : Thank you for your questions and for your interest in LifeMD. We look forward to speaking with you once again when we report our third quarter financial results in November. Have a good evening.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.