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Conversion Labs Closes $3.5 Million Equity Investment, Submits Application for Nasdaq Capital Market Up-Listing

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Conversion Labs, Inc., a direct-to-consumer telemedicine and wellness company, has completed its previously announced equity investment by a select group of private investors and family offices, including investors David Blitzer and Wes Edens, for $3.5 million. Conversion Labs also submitted this week its application to list the company’s common stock on the Nasdaq Capital Market.

“In addition to the tremendous affirmation of our business strategy and growth prospects these investors represent, their capital contribution advances us toward satisfying the listing requirements for Nasdaq,” commented Conversion Labs CEO, Justin Schreiber. “As the world’s top exchange for emerging growth stocks, we expect a Nasdaq listing to increase our corporate visibility and broaden awareness of our success in the financial community.”

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“We anticipate a Nasdaq listing will open the door to a larger pool of investors, particularly institutional and retail, and help drive greater shareholder value,” continued Schreiber. “These multiple benefits will be timely, as we expect to soon announce a number of new telemedicine products that will leverage our record customer growth and the vast market opportunities that continue to emerge in telehealth.”

Over the last year, Conversion Labs has made great strides in strengthening its operational and financial performance which have positioned it for future growth and profitability. The company’s new cloud-based, video-powered telemedicine platform, Veritas MD, has been designed to support the continued rapid scale up and market expansion of the company’s telehealth brands, while providing easier, more convenient and affordable access for patients seeking personalized treatment by board-certified physicians.

The company annualized revenue run-rate recently exceeded $44.0 million compared to $12.5 million for all of 2019—a more than three-fold increase. The growth in revenue has been largely driven by the company’s increasingly popular proprietary brands and formulas that include Rex MD and Shapiro MD.

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Subscriptions to these products increased the company’s annual recurring revenue (ARR) to $17.2 million by the end of August, which was up by $14.0 million or 437% compared to August of last year. The month-to-month increase from July had jumped by a record $2.4 million.

“Our accelerating performance with subscription revenue reflects how we are attracting loyal customers who value the convenience and security that our telehealth platform provides,” added Schreiber. “As we launch additional telemedicine offerings and products, we expect our growth to continue its upward trajectory as improving economies of scale drive greater margin expansion.”

In addition to delivering highly-effective products and services, the company has been benefiting from the growing adoption of telemedicine across the healthcare industry. According to Forrester Research, telehealth has “shifted into hyper-drive,” with virtual health care visits on pace to top 1 billion by year-end. The telemedicine market is expected to grow at 19.3% CAGR, reaching $175 billion by 2026.

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