이번 보고서
2025 연차보고서
10-K · 기간 말 2025. 12. 31. · 제출 2026. 2. 23.
비교 기준
2024 연차보고서
10-K · 기간 말 2024. 12. 31.
10
새 리스크 항목
50
신규 문단
97
수정 문단
16
삭제
+17%
분량 변화
AI 한국어 요약
한 줄 요약
FDA가 회사를 직접 지목해 조제(compounded) GLP-1 원료를 제한하겠다고 밝혔고, HHS는 회사를 법무부(DOJ)에 수사 의뢰했어요. 회사는 이 내용을 별도 리스크로 새로 적었어요.
주목할 변화
- 신규미국 정부 기관의 공개 발언·조치2026년 2월 FDA가 회사를 직접 거명하며 조제 GLP-1 원료를 제한하겠다는 성명을 냈어요. 같은 달 HHS는 회사를 DOJ에 수사 의뢰했다고 X에 밝혔어요("referred us to the Department of Justice for investigation"). 2025년 9월에는 조제 세마글루타이드 관련 웹사이트 문구로 FDA 경고장을 받은 사실도 함께 적었어요.
- 신규노보 노디스크 특허 소송2026년 2월 9일 노보 노디스크가 델라웨어 연방법원에 특허 침해 소송을 냈어요. 대상은 회사 플랫폼에서 처방으로 제공되는 조제 세마글루타이드 제품이에요("patent infringement… compounded GLP-1 products containing semaglutide"). 소제목도 "may in the future be"에서 "We are, and may in the future be"로 바뀌었어요.
- 신규조제약에 대한 인식 리스크조제약은 FDA 승인 약보다 안전성·효능 우려가 크게 받아들여질 수 있다는 항목이 새로 생겼어요. 최근 FDA·HHS 발표 때문에 사업 파트너의 조사나 불리한 조치가 "have led and may continue to lead"라고, 이미 일어난 일로 적었어요.
- 강화조제 GLP-1 공급 방식 축소세마글루타이드 품귀가 끝난 뒤 지금은 503A 조제 약국만 쓴다고 밝혔어요. 이 때문에 수요를 다 맞추지 못할 수 있다고 적었어요("may constrain our ability to meet customer demand"). 2025년 12월에는 자회사 503B 시설이 부작용 보고 누락으로 FDA 경고장을 받았다는 내용도 추가됐어요.
- 신규유칼립투스 인수 관련 리스크호주 디지털 헬스 기업 유칼립투스 인수에 최대 11.5억 달러를 지급해야 해요("up to $1.15 billion of consideration"). 실적이 부진하면 일부 대금을 주식으로 줄 수 있고, 이 경우 기존 주주 지분이 희석된다고 적었어요. 거래가 무산될 위험도 별도로 다뤘어요.
- 강화해외 사업 규제해외 확장을 "element"가 아니라 "core pillar"로 표현을 높였어요. 영국·EU의 Zava, 캐나다의 Medici 인수로 진출국이 늘어난 사실을 적었어요. 이들 지역에서 인플루언서를 통한 처방약 홍보가 금지라는 점도 새로 썼어요("strictly prohibited"). 약국 규제와 GDPR·캐나다 개인정보 규제 설명도 추가됐어요.
- 신규검사(랩) 사업 규제2025년 11월 검사 서비스를 시작하면서 관련 항목이 여러 개 생겼어요. 가정용 채취 키트가 FDA 승인 대상 의료기기로 분류될 수 있고, 주(州)별 유통 면허가 필요할 수 있다는 내용이에요. LDT 규제가 불확실하다는 점도 담겼어요("legal framework governing LDTs remains in flux").
- 강화소송·주가 변동성증권 집단소송과 주주대표소송을 "have faced"라고, 이미 겪은 일로 적었어요. 주가 리스크 제목도 "may be volatile"에서 "has been and may continue to be volatile"로 바뀌었어요. FTC 비공개 조사는 아직 결론이 나오지 않았다고 해요.
참고
FDA는 2025년 2월 21일 세마글루타이드 품귀 해소를 발표했어요. 이 발표로 503B 시설을 통한 조제가 제한됐어요. 회사는 2025년 5월 10억 달러 규모의 0% 전환사채(2030년 만기)를 발행했어요.
원문 비교
- •Expansion into international markets is important for our growth, and as we expand internationally, we will face additional business, political, legal, regulatory, operational, financial, and economic risks, any of which could increase our costs and hinder such growth.
- •We have been, and in the future may be, subject to actions and public statements by U.S. federal and state government officials and agencies, which could materially and adversely affect our business, financial condition, results of operations and reputation.
- Promoting prescription medicines via influencers is strictly prohibited in the United Kingdom, the European Union, and Canada. Regulators have increased scrutiny of social media posts, sponsored content, and discount codes that illegally advertise prescription medicines to the public, particularly for high-profile prescription medicines such as weight-loss treatments. Influencer endorsements for prescription medicines constitute a breach of advertising law and can lead to investigations, compliance notices, and enforcement actions. While over-the-counter (OTC) medicines and medical devices may be promoted using influencers, this is only permitted under strict advertising and disclosure rules. The promotion of prescription medicines is restricted to communications directed at healthcare professionals, not the general public. Any failure to comply with applicable advertising, promotion, or disclosure laws in these jurisdictions could subject us to regulatory investigations, fines, reputational harm, and restrictions on our marketing activities.
- •perceived and actual product quality and safety;
- Acquisitions and investments could result in operating difficulties, dilution, and other harmful consequences that may adversely impact our business, financial condition, and results of operations. Additionally, if we are not able to identify and successfully acquire suitable businesses, our results of operations and prospects could be harmed.
- •developing and maintaining commercial relationships on favorable terms, or at all;
- In the United Kingdom, pharmacies, pharmacists, and pharmacy technicians are regulated by the GPhC, which sets standards for the safe and effective provision of pharmacy services, including those provided at a distance (such as online and mail-order pharmacies). Pharmacies must be registered with the GPhC and are subject to regular inspections to ensure compliance with pharmacy standards, including those relating to the storage, dispensing, labeling, and distribution of medicines, as well as patient counseling and record-keeping. UK pharmacies may promote their pharmacy services, including online services, but are strictly prohibited from promoting prescription-only medicines to the general public. Advertising of pharmacy services must comply with the GPhC’s guidance and the MHRA’s guidance. Any promotion of prescription medicines must be directed only to healthcare professionals.
- In Canada, pharmacies, pharmacists, and pharmacy technicians are regulated at the provincial and territorial level by pharmacy regulatory authorities. These authorities set standards for the safe and effective provision of pharmacy services, including services provided at a distance, such as online and mail‑order pharmacies. Pharmacies must be licensed or accredited by their provincial or territorial regulator and are subject to inspection to ensure compliance with applicable standards, including those relating to the storage, preparation, dispensing, labelling, distribution of medicines, patient counseling, and record‑keeping. Canadian pharmacies may promote their pharmacy services, including online services, but are prohibited from advertising prescription drugs to the general public. Any promotion of prescription medicines must be directed only to healthcare professionals and must comply with Health Canada’s advertising requirements and applicable provincial and territorial professional conduct rules.
- Risks Related to the Proposed Acquisition of Eucalyptus
- The planned acquisition of Eucalyptus is subject to conditions, some or all of which may not be satisfied or completed on a timely basis, if at all.
- Completion of the planned acquisition of Eucalyptus (the “Proposed Acquisition”) is subject to the satisfaction or waiver of customary and other closing conditions, including regulatory approvals. We cannot predict whether or when such approvals will be received or such conditions will be satisfied. The failure to satisfy all of the required conditions could delay the closing of the Proposed Acquisition for a significant period of time or at all. Any delay in completing the Proposed Acquisition could cause us not to realize some or all of the benefits of the Proposed Acquisition, or to realize them on a different timeline than expected. There can be no assurance that the closing conditions will be satisfied or (to the extent permitted) waived or that the Proposed Acquisition will be completed.
- If the Proposed Acquisition is not completed, our business may be materially adversely affected, without having realized any of the anticipated benefits of having completed the Proposed Acquisition, and we will be subject to a number of risks, including the following:
- •the market price of our Class A common stock could decline;
- •management’s time and focus to matters relating to the Proposed Acquisition, as well as financial resources, could otherwise have been devoted to pursuing other beneficial opportunities;
- •we may experience negative reactions from the financial markets or from customers, suppliers, regulators or employees;
- •we will be required to pay certain costs relating to the Proposed Acquisition, such as legal and accounting fees, whether or not the Proposed Acquisition is completed; and
- •we may experience reputational harm due to the adverse perception of any failure to successfully complete the Proposed Acquisition.
- Any of these risks could materially and adversely impact our financial condition and results of operations.
- Additionally, we will incur substantial expenses in connection with and as a result of completing the Proposed Acquisition, including legal and other transaction costs, and following the completion of the Proposed Acquisition, we expect to incur additional expenses in connection with integrating Eucalyptus into our operations. A portion of these costs have already been incurred or will be incurred regardless of whether the Proposed Acquisition is completed. Factors beyond our control could affect the total amount or timing of these expenses, many of which, by their nature, are difficult to estimate accurately. Although we expect that the realization of benefits related to the Proposed Acquisition will offset such costs and expenses over time, no assurances can be made that this net benefit will be achieved in the near term, or at all.
- Our plans for funding the Proposed Acquisition may be adversely affected to the extent there are lower-than-expected operating results or significant financial market disruptions.
- We are obligated to pay up to $1.15 billion of consideration, subject to certain adjustments, in connection with the Proposed Acquisition, which consists of upfront payments payable at closing, deferred payments payable through the eighteen-month anniversary of closing, and potential earn-out consideration payable through early 2029. In addition to funding the Proposed Acquisition with cash on hand, including cash from future operations, we may choose to obtain additional financing by accessing the capital markets, which may include the issuance of equity or convertible debt securities. We also have the ability, at our option, to satisfy some of our deferred and earn-out consideration obligations in equity issuances to certain Eucalyptus equityholders, rather than cash payments. If our operating results are lower than expected or significant market disruptions occur, our cash on hand and available liquidity under our Revolving Credit and Guaranty Agreement may be insufficient to fund the consideration in cash, or may limit our ability to issue debt or equity securities. In that case, we may choose to issue equity to certain Eucalyptus equityholders to satisfy some of our payment obligations, which would be dilutive to our existing shareholders. See the risk factors titled “Risks Related to Our Business—Acquisitions and investments could result in operating difficulties, dilution, and other harmful consequences that may adversely impact our business, financial condition, and results of operations. Additionally, if we are not able to identify and successfully acquire suitable businesses, our results of operations and prospects could be harmed” and “Risks Related to Our Business—We may require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all.”
- We may not realize the benefits, including growth opportunities, that are anticipated from the Proposed Acquisition.
- The benefits that are expected to result from the Proposed Acquisition will depend, in part, on our ability to realize the anticipated growth opportunities of the acquired business, comply with foreign regulations to which we have not previously been subject, successfully retain Eucalyptus’ historical customers on our platform, and successfully maintain Eucalyptus’ commercial relationships. Any failure to achieve these objectives could adversely affect the performance of the acquired business and reduce the expected returns from the Proposed Acquisition. In addition, realization of these benefits will depend on the successful integration of Eucalyptus with our current operations. There can be no assurance that we will successfully or cost-effectively integrate this business. Accordingly, we may not realize the anticipated benefits from the Proposed Acquisition, and these benefits may be offset by costs incurred to integrate, or delays in integrating, the businesses. These costs could have a material adverse effect on our results of operations, financial condition and cash flows.
- In February 2026, the FDA issued a statement indicating that the agency intends to restrict GLP-1 active pharmaceutical ingredients intended for use in non-FDA-approved compounded drugs that are being mass-marketed as similar alternatives to FDA-approved drugs. The Company was directly named in the FDA Statement. Also in February 2026, the General Counsel of HHS issued a statement on X indicating that HHS had referred the Company to the DOJ for investigation for potential violations of the Federal Food, Drug, and Cosmetic Act and applicable Title 18 provisions. At this time, it is unclear what actions the FDA, HHS, or DOJ may take; however, restrictions on compounding, or marketing of compounded, GLP-1 products may adversely impact our financial conditions and business operations. For example, such actions could require significant resources to address and may result in reputational harm, operational disruptions, or increased costs.
- In addition, in July 2025, we completed the acquisition of Zava, a digital health platform with operations in the United Kingdom and the European Union. The acquisition expanded our footprint within the United Kingdom and has enabled our entry into Germany, France, the Republic of Ireland, and Spain. In November 2025, we completed the acquisition of Medici, a digital health platform with operations in Canada, which established our entry into Canada. These jurisdictions impose varying legal and regulatory requirements relating to, among other things, the provision of telehealth services and pharmacy services, the advertising of prescription products, compounding, and data protection. Failure to appropriately manage compliance across these jurisdictions could result in consequences such as enforcement actions, reputational harm, or limitations on our ability to operate or expand in these markets, which could adversely affect our business, financial conditions or results of operations.
- FDA has issued warning letters related to specimen-collection kits, and similar enforcement activity directed at our products or suppliers could materially and adversely affect our business.
- The FDA has taken the position that many specimen-collection kits used for at-home collection of biological samples—such as dried blood-spot cards, saliva tubes, urine collection devices, and stool collection tools—are in vitro diagnostic (“IVD”) medical devices that require FDA clearance, approval, authorization, or compliance with other device requirements. FDA has issued warning letters alleging that companies distributed such specimen-collection kits without required marketing authorization. For example, in 2025, FDA issued two warning letters alleging that manufacturers were distributing specimen-collection kits without clearance or approval, including a warning letter to Blackfly Investments, LLC d/b/a Molecular Testing Labs, in which FDA stated that an HIV dried blood-spot self-collection kit was being offered without the necessary premarket authorization and rejected the company’s claims that the product was exempt from premarket review.
- Certain workflows offered through our platform rely on at-home sample collection kits, including kits used for the collection of blood specimens. Depending on their design, components, labeling, and intended use, these kits may be considered medical devices subject to FDA regulatory requirements, and in some circumstances may require 510(k) clearance, de novo classification, premarket approval, or other authorization. It may not always be clear whether a particular kit used by us or by third-party suppliers requires such authorization or is being used in a manner consistent with its cleared, exempt, or authorized intended use. If FDA were to determine that any sample-collection kits used in connection with our testing services require premarket review, or that we or our suppliers are distributing or using such kits without required authorization, FDA could issue warning letters, request corrective actions, or require us or our suppliers to seek clearance or approval, discontinue distribution, modify labeling or instructions for use, or undertake additional validation.
- Such FDA enforcement directed at any of the collection kits used by us or our suppliers could require us to identify and qualify alternative suppliers, update laboratory workflows, or modify instructions to customers. Suitable alternatives may not be immediately available, may require FDA review, or may be costly or operationally disruptive to implement.
- Any enforcement action relating to specimen-collection kits—whether directed at us or at our suppliers—could delay or limit our ability to offer certain diagnostic testing services, increase compliance costs, negatively affect customer experience, disrupt laboratory operations, or otherwise materially and adversely affect our business, financial condition, and results of operations.
- FDA regulation of laboratory developed tests (“LDTs”) and regulation by other countries of diagnostic offerings could materially and adversely affect our business.
- The operations of our recently launched laboratory business could subject us to additional and evolving regulatory requirements. The FDA has regulatory authority over instruments, test kits, reagents, sample-collection devices, and other articles used by clinical laboratories, and enforces laws governing the development, testing, manufacturing, performance, labeling, advertising, marketing, distribution, and post-market surveillance of diagnostics. The FDA also inspects and reviews the manufacturing processes and performance of such diagnostics.
- Historically, high-complexity clinical laboratories have offered LDTs under the CLIA regulatory framework administered by CMS without FDA premarket clearance or approval. On April 29, 2024, the FDA released a final rule seeking to phase out its long-standing enforcement discretion for LDTs over a multi-year period, asserting that LDTs are medical devices subject to the Federal Food, Drug, and Cosmetic Act’s premarket review and quality-system requirements. On March 31, 2025, the U.S.
- District Court for the Eastern District of Texas vacated the rule, concluding that LDTs developed and used within a single clinical laboratory fall outside FDA’s statutory authority. FDA did not appeal, and the final rule was rescinded on September 19, 2025. It remains uncertain whether and how FDA may seek to regulate LDTs that are developed across multiple laboratories, used outside traditional clinical settings, or offered through digital-health or direct-to-consumer channels.
- Additionally, the legal framework governing LDTs remains in flux. Legislative proposals—such as prior versions of the VALID Act—have sought to expressly grant FDA statutory authority over LDTs. If Congress were to enact legislation providing FDA with clear jurisdiction over LDTs, our laboratory operations could become subject to new premarket review requirements, manufacturing and quality-system obligations, adverse-event reporting rules, or other device-related controls. Such legislation could require us to obtain FDA authorization for tests currently offered as LDTs, modify or discontinue certain testing services, incur significant compliance costs, or adjust our diagnostic service offerings. Failure to comply with applicable or newly imposed requirements, or disruptions associated with required changes to our diagnostic products or laboratory workflows, could have a material adverse effect on our business, financial condition, and results of operations.
- Regulation of diagnostic offerings outside the United States may also affect our laboratory operations. For example, the European Union In Vitro Diagnostics Regulation (EU IVDR) establishes a new classification system and imposes enhanced conformity-assessment, quality-system, and post-market obligations for in vitro diagnostic devices. Where applicable to our services, these requirements may increase compliance costs, limit the types of diagnostic services we can provide, or result in administrative or legal actions.
- If any of the sample collection kits we use are considered prescription medical devices, we may be required to obtain additional state licenses to distribute such devices, and failure to obtain or maintain these licenses could adversely affect our operations.
- Certain sample collection kits used in connection with our laboratory testing services may be classified as prescription medical devices depending on their design, components, intended use, labeling, and claims. Many states regulate the distribution, shipment, or sale of prescription medical devices and require distributors, third-party logistics providers, manufacturers, or repackagers of such devices to obtain and maintain state-issued device distribution licenses, permits, or registrations. State requirements vary widely and may apply regardless of whether devices are dispensed directly to consumers, shipped to laboratories, or distributed through affiliated or third-party facilities.
- To the extent any of our sample collection kits are deemed prescription medical devices, we may be required to obtain state device-distribution licenses in multiple jurisdictions in order to lawfully store, ship, or distribute these kits to customers or to our laboratory. In addition, if our third-party manufacturers or suppliers are required to hold state device-distribution licenses, but fail to obtain or maintain them, we may be unable to continue sourcing certain kits from those suppliers without disruption. Licensing requirements may impose obligations relating to facility standards, recordkeeping, reporting, personnel qualifications, inspection preparedness, and ongoing compliance. Some states also require separate licenses for each physical location involved in device distribution activities.
- If we fail to obtain or maintain any required state device-distribution licenses, or if regulators determine that our distribution activities fall within licensing categories for which we are not registered, we could be subject to fines, penalties, cease-and-desist orders, or other enforcement actions. We may also be prohibited from distributing certain collection kits in specific states until the appropriate licenses are obtained. Additionally, delays or denials in licensure, or the need to establish new licensed distribution channels, may increase our operational costs, impede our ability to provide certain diagnostic testing services, or require changes to our fulfillment and logistics workflows. Any such developments could adversely affect our business, financial condition, and results of operations.
- Perceptions regarding the safety, efficacy, and quality of compounded drugs may significantly harm our business, financial condition, and results of operations.
- Compounded drug products, unlike FDA approved drugs, are exempt from certain FDA premarket review for safety, efficacy, or quality. As a result, healthcare professionals, patients, policymakers, and the media may perceive compounded drugs, including our products, as presenting greater safety or efficacy risks than FDA‑approved alternatives. These perceptions may arise from the inherent nature of compounding, from adverse events associated with compounded drugs generally, or from safety concerns involving us or other market participants, even if unrelated to our operations. In addition, negative perceptions can arise from other matters related to us or other developments in the industry, including recent communications issued by the FDA and HHS. See the risk factor titled “We may be subject to fines, penalties, and injunctions if we are determined to be promoting the use of products for unapproved uses, unapproved drugs, or in a false or misleading manner, or if the FDA determined that any of our compounded products do not meet the requirements for exemption under Section 503A or Section 503B of the FDCA, as applicable.” Heightened scrutiny of compounded drugs, which could stem from FDA safety alerts, adverse event reports, product recalls, contamination incidents at compounding facilities, or publicized enforcement actions, whether related to us, our products or otherwise, may lead to reduced physician and patient confidence in compounded products. This could decrease demand for our compounded offerings, including our GLP-1 products, or prompt customers to transition to FDA‑approved drugs.
- Negative perceptions regarding compounded drugs may also increase the likelihood of regulatory inquiries by the FDA or other federal or state government agencies, inspections, or enforcement actions, as well as civil product liability or consumer litigation. Perceptions regarding these or other matters, including the recent communications issued by the FDA and HHS, have led and may continue to lead to increased scrutiny, inquiries, or adverse action by our business partners or third-party service providers, even where no deficiency exists in our practices or the practices of a Partner Pharmacy, Pharmacy or other Facility, or Manufacturing Supplier. If negative perceptions regarding compounded drugs or the recent FDA and HHS communications persist or intensify, our ability to maintain existing customer relationships, acquire new customers, or expand our compounded drug portfolio could be materially impaired, which would significantly harm our business, financial condition, and results of operations.
- Additionally, the General Data Protection Regulation (“GDPR”) in the European Union imposes strict obligations on the ability to process health-related and other personal data, including in relation to security (which requires the adoption of administrative, physical and technical safeguards designed to protect such information), collection, use and transfer of personal data. These obligations include, without limitation, several transparency requirements relating to communications with data subjects regarding the processing of their personal data, ensuring an appropriate legal basis or condition applies to the processing of personal data, limitations on the retention of personal data, increased requirements pertaining to health data, notification of data processing obligations or security incidents to the competent national data protection authorities and/or data subjects, the security and confidentiality of the personal data, and various rights that data subjects may exercise with respect to their personal data.
- In Canada, the legal and regulatory framework governing privacy, including health information privacy, is evolving rapidly, particularly with respect to the use of artificial intelligence and digital health technologies. Federal and provincial regulators, as well as consumer advocacy groups, have called for new legislation and amendments to existing laws, increased regulatory oversight and enforcement, and have advanced differing interpretations of current requirements. The expanding and increasingly complex patchwork of Canadian privacy and health privacy laws may increase our compliance obligations and expose us to significant fines, penalties, regulatory investigations, and private rights of action in the event of actual or alleged noncompliance, including breaches or improper handling of personal health information. Compliance with these evolving requirements may require us to modify our business practices, systems, and controls, resulting in increased operational costs, potential limitations on our products and services, and adverse effects on demand for our offerings in Canada.
- We have been, and in the future may be, subject to actions and public statements by U.S. federal and state government officials and agencies, which could materially and adversely affect our business, financial condition, results of operations and reputation.
- We have recently, and in the future may be, the subject of public statements and actions by U.S. government officials and agencies. For instance, in September 2025 we received warning letters from the U.S. Food and Drug Administration with respect to statements on our websites regarding compounded semaglutide products and the statements’ compliance with the Federal Food, Drug, and Cosmetic Act, in February 2026 the U.S. Department of Health and Human Services ( “HHS”) issued a statement on X indicating that it had referred us to the Department of Justice for investigation for potential violations of the Federal Food, Drug, and Cosmetic Act and applicable Title 18 provisions, and in February 2026 the FDA issued a statement, directly naming our company, that the agency intends to restrict GLP-1 active pharmaceutical ingredients intended for use in non-FDA-approved compounded drugs that are being mass-marketed as similar alternatives to FDA-approved drugs.
- We cannot predict whether such public statements and actions may lead to investigations, enforcement actions or other proceedings, nor can we predict the timing, scope or outcomes thereof. Any such investigation, enforcement action or other proceeding would require significant management attention and resources, result in substantial legal fees and other costs, and divert attention from our business operations. In addition, the public nature of statements by U.S. government officials and agencies and the pendency of any investigation, enforcement action or other proceeding related thereto may prompt additional regulatory scrutiny, including investigations, enforcement actions, or other proceedings, by other governmental officials and agencies at the federal or state level. These investigations, enforcement actions, and other proceedings by other state and federal governmental officials and agencies could be broader in scope than public statements and actions currently suggest and impact other parts of our business and operations. Further, such public statements and the pendency of any investigation, enforcement action or other proceeding related thereto may negatively affect our public reputation and relationships with customers, healthcare providers, investors, and business partners. If any investigation, enforcement action, or proceeding results in findings adverse to us, we could be subject to civil or criminal penalties, fines, injunctions, consent decrees, restrictions on our ability to operate our business, exclusion from participation in certain programs, or other sanctions. Any such outcome could have a material adverse effect on our business, financial condition, and results of operations.
- Furthermore, the public nature of these government statements may encourage additional regulatory scrutiny of our business, inspire private litigation, or prompt negative media coverage, any of which could harm our reputation and adversely affect our stock price. Even if we are ultimately able to resolve these matters favorably, the uncertainty created by these government actions and statements may continue to have a negative impact on our business and stock price for an extended period.
- •successful expansion into international markets;
- •We operate in a highly regulated,
dynamic,dynamic environment and are subject to an increasing number of laws and regulations as a result of the various components of our existing business, including telehealth, pharmacy, and compounding,as well asour expansion into new areas such as peptide development andlablaboratory testing services andoperations.operations, and our expansion into new markets.•IfIf we fail to comply with applicablehealthcare and otherlawsandand/or governmental regulations, we could face substantial penalties, our business, financial condition, and results of operations could be materially and adversely affected, and we may be required to restructure our operations. - •From time to time we are subject to legal and regulatory proceedings and inquiries in the ordinary course of business, which can include intellectual property disputes or claims relating to our marketing or sale of products, any of which may be costly to defend and could materially harm our business and results of operations.
- •Disruption to our global supply chain, including as a result of evolving laws and regulations, can impact our operations in ways that may be difficult to predict or control, may require us to modify or discontinue certain supplier relationships, sourcing strategies, or operational processes, and may result in delays in product availability, increased costs for compliance or alternative sourcing, or the need to shift to different third-party partners. The breadth and scale of our
services andoperationsincreasesincrease the complexity and extent of our compliance and regulatory obligations. - •The market price of our Class A common stock has been and may continue to be volatile.
- We have
recentlyexperienced a period of rapid growth in our revenue, operations andheadcount.headcount in recent fiscal years. We grew our revenue from$526.9 million for the year ended December 31, 2022, to$872.0 million for the year ended December 31, 2023, to $1,476.5 million for the year ended December 31,2024.2024, to $2,347.6 million for the year ended December 31, 2025. Our number of employees has also increased significantly over the last few years, from6511,046 employees as of December 31,20222023 to1,6372,442 employees as of December 31,2024.2025. We have also completed multiple acquisitions, expanded into new specialties, geographies, and markets, and significantly increased the size of our customer base. - We anticipate that we will continue to significantly expand our operations and headcount in the
nearnear-to-medium term. This growth has placed, and future growth will place, a significant strain on our management, administrative, operational, and financial infrastructure. Our success will depend in part on our ability to continue to manage this growth effectively and execute our business plan. There can be no assurance that these efforts will be successful or that we will not encounter operational difficulties that may have a negative impact on growth and profitability. To manage the expected growth of our operations and personnel, we will need to continue to improve our operational, financial, and management controls and our reporting systems and procedures, and we will need to ensure that we maintain high levels of customer support. Failure to effectively manage growth and execute our business plan could result in difficulty or delays in increasing the size of our customer base, declines in quality of customer support or customer satisfaction, increases in costs, difficulties in introducing new products or services, or other operational difficulties, and any of these difficulties could adversely affect our business performance and results of operations. - We provide customers with access to non-prescription products, telehealth-based consultations with Providers, laboratory testing services, and certain prescription
medicationsproducts that may be prescribed by Providers in connection with telehealth consultations. In order for our business to continue growing, we need to maintain and continue expanding the scope of products and services we offer our customers, including telehealth consultations, prescription medication for additional conditions, and non-prescription health and wellness products and services. The introduction of new products, services, or technologies, including disruptive technologies by market participants, including us, can quickly make our products and services obsolete and unmarketable. Additionally, changes in laws and regulations (or interpretation or enforcement thereof) could impact the usefulness of our platform or offerings and could necessitate changes or modifications to our platform or offerings to accommodate such changes. Alternatively, the introduction of new products, services or technologies could expose us to new or increased regulatory risks, including with respect to healthcare, privacy, or consumer protection laws, either through the provision of such products, services, or technologies, or by virtue of the new or expanded personal and health information we acquire from customers to support such offerings. We invest substantial resources in researching and developing new offerings and enhancing our solutions by incorporating additional features, improving functionality, and adding other improvements to meet our customers’ evolving demands. The success of any enhancements or improvements to our services or any new offerings depends on a number of factors, including timely completion, competitive pricing, adequate quality testing, integration with new and existing technologies, regulatory compliance, and overall market acceptance. We may not succeed in developing, marketing, and delivering on a timely and cost-effective basis enhancements or improvements to our products or services or any new offerings that respond to continued changes in market demands or new customer requirements, and any enhancements or improvements to our products or services or any new offerings may not achieve market acceptance. Since developing enhancements to our products and services and the launch of new offerings can be complex, the timetable for the release of new offerings and enhancements to our existing products and services is difficult to predict, and we may not launch new offerings and updates as rapidly as our current or prospective customers require or expect. - For example, in May 2024, we began providing access to compounded injectable semaglutide, a
glucagon-like peptide-1 receptor agonist (GLP-1),GLP-1, on our platform as part of our weight loss specialty. GLP-1s are subject to elevated consumer demand,related global drug shortages,foreign, federal and state-specific regulatory limitations, limited manufacturing capacity and potential supply chain disruptions, all of which could affect our ability to provide continuing access to such GLP-1s. Increasing consumer demand could further increase prices and/or constrain supply. If regulatory or market conditions change, or we are unable to meet our customers’ demand for our offerings, or if they do not otherwise meet customer expectations, our brand, reputation and results of operations could be adversely affected. - The evolving regulatory landscape has also impacted our ability to continue offering access to such products.
Additionally,For example, in the United States, all doses of semaglutide branded under Ozempic and Wegovy became listed as available on the FDA’s shortage list as of October 30, 2024. On February 21, 2025, the FDA resolved the semaglutide shortage. Resolution of the shortage limits our ability to use 503B outsourcing facilities to provide access to compounded semaglutide on our platform.While we do not provide access to compounded tirzepatide, theThe regulatory landscape applicable to GLP-1s continues to rapidly evolve. In February 2026, the FDA issued a statement (the “FDA Statement”) indicating that the agency intends to restrict GLP-1 active pharmaceutical ingredients intended for use in non-FDA-approved compounded drugs that are being mass-marketed as similar alternatives to FDA-approved drugs. We were directly named in the FDA Statement. Also in February 2026, the General Counsel of HHS issued a statement on X indicating that HHS had referred the Company to the Department of Justice (the “DOJ”) for investigation for potential violations of the FDCA and applicable Title 18 provisions. At this time, it is unclear what actions the FDA, HHS, or DOJ may take; however, any such actions could require significant resources to address and may result in reputational harm, operational disruptions, or increased costs. Any restrictions on compounding, or marketing of compounded, GLP-1s may adversely impact our financial condition, cash flows and results of operations. - We generate revenue from our platform by selling non-prescription health and personal care products to consumers and offering consumers a
technology driventechnology-driven platform to access telehealth consultations with Providers, who may prescribe customers certain prescriptionmedications.medications or order laboratory tests. Unless we are able to attract new customers, retain existing customers, and maintain our wholesale partnerships, our business, financial condition, and results of operations may be harmed. - In order to attract new customers and incentivize existing customers to purchase our offerings, we use social media, emails, text messages,
celebrityinfluencers, television commercials, and other marketing strategies to reach potential and existing customers.StateForeign, federal andfederalstate laws and regulations governing the privacy and security of personal information, including healthcare data, are evolving rapidly and could impact our ability to identify and market to potential and existing customers. Similarly, certain foreign, federal and state laws regulate, and in some cases limit, the use of discounts, promotions, and other marketing strategies in the healthcare industry. If foreign, federal, state, or local laws or regulations governing our marketing activities become more restrictive or are interpreted by governmental authorities to prohibit or limit these activities, our ability to attract new customers and retain customers would be affected and our business could be materially harmed. In addition, any failure, or perceived failure, by us or other telehealth companies to comply with any foreign, federal, state, or local laws or regulations governing our marketing activities could adversely affect the perception of our industry, our reputation, brand, and business. We have received, and may in the future face, claims alleging violations of foreign, federal, state or local laws related to tracking technologies. While we do not expect any such claims of violations to have a material impact on our business, financial condition, or results of operations, any claims, proceedings, or actions against us by governmental entities, consumers, suppliers, competitors, or others, or other liabilities, may require us to change our operations and/or cease using certain marketing strategies. - Changes to social networking, advertising platforms’ or mobile device or other operating systems’ terms of use; terms of service or traffic algorithms that limit promotional communications or impose restrictions that would limit our ability or our customers’ ability to send communications through their platforms; disruptions or downtime experienced by these platforms; or reductions in the use of or engagement with social networking or advertising platforms by customers and potential customers could also harm our business. Additionally, changes in regulations or the business practices of
third-partiesthird parties could limit our ability, and the ability of search engines and social media platforms, to collect data from users and engage in targeted advertising, which could negatively impact the effectiveness of our digital marketing. For example, in2024,2025, Metaannouncedimplemented changes to the use of certain types of health-related data for ad targeting purposes. The regulation of the use of cookies and other current online tracking and advertising practices, or a loss in our ability to make effective use of services that employ such practices, could adversely affect our business if we are unable to adjust our marketing practices accordingly. As laws and regulations rapidly evolve to govern the use of these channels, the failure by us, our employees or third parties acting at our direction to abide by applicable laws and regulations in the use of these channels could adversely affect our reputation or subject us to fines or other penalties. In addition, our employees or third parties acting at our direction may knowingly or inadvertently make use of social media in ways that could lead to the loss or infringement of intellectual property, as well as the public disclosure of proprietary, confidential, or sensitive personal information of our business, employees, consumers or others. Any such inappropriate use of social media, emails, and text messages could also cause reputational damage and adversely affect our business. - We use third-party social media platforms as part of our marketing strategy. For example, our brands maintain Instagram, Facebook, YouTube and TikTok accounts. We also maintain relationships with many social media
and celebrityinfluencers and engage in sponsorship initiatives. As existing e-commerce and social media platforms continue to rapidly evolve and new platforms develop, we expect to maintain a presence on these existing platforms and an important part of our marketing strategy is to establish and maintain a presence on new or emerging popular social media platforms. If we are unable to cost-effectively use social media platforms as marketing tools, if the social media platforms we use change their policies or algorithms, or if evolving laws and regulations limit how we can market through these channels, if at all, we may not be able to fully optimize our use of such platforms and our ability to retain current customers and acquire new customers may suffer. Any such failure could adversely affect our reputation, revenue, and results of operations. - In addition, an increase in our use of social media for product promotion and marketing may increase the burden on us to monitor compliance of such materials, and increase the risk that such materials could contain problematic product or marketing claims in violation of applicable regulations. For example, in some cases, the Federal Trade Commission has sought enforcement action where an endorsement has failed to clearly and conspicuously disclose a financial relationship or material connection between an influencer and an advertiser. FDA may also bring enforcement actions for false or misleading advertising and promotion of prescription drugs, including compounded
drugs.drugs, and medical devices. In recent years, FDA has issued multiple untitled letters related to false or misleading promotion by influencers and/or using socialmedia.media and is increasingly focused on claims made in direct-to-consumer advertisements. Although we contract with and monitor our influencers’ posts on social media, they may fail to comply with our content-related requirements, and if we were held responsible for any false, misleading, or otherwise unlawful content of their posts or their actions, we could be fined or subjected to other monetary liabilities or required to alter our practices, which could have an adverse impact on our business and reputation. - A failure to accurately identify promising
celebrityinfluencers to use and endorse ourproductsofferings or a failure to enter into cost-effectivecelebrityinfluencer arrangements may have an adverse effect on our reputation or business. Moreover, the cost to enter into arrangements withcelebrityinfluencers may increase over time, which could have an adverse impact on our financial condition and results of operations. - In order to maintain and grow our business, we must maintain credibility and confidence among customers, analysts, investors, and other parties in our long-term financial viability and business prospects. In particular, our
products,offerings, business, results of operations, and statements and actions of our company and management are subject to significant amounts of commentary by a range of third parties. Negative commentary or publicity regarding our business, the industry in which we operate, our offerings, members of our management team, orcelebrityinfluencers who endorse our products and other third parties who are affiliated with or endorse us, may also be posted on social media platforms or appear in other media.Celebrity influencersInfluencers with whom we maintain endorsement arrangements could engage in behavior or use their platforms to communicate with our customers in a manner that reflects poorly on our brand and may be attributed to us or otherwise adversely affect our reputation. Any such commentary could impact our reputation or brand and affect our ability to attract and retain customers, which could have a material adverse effect on our business and results of operations. WeIn the United States, we derive a substantial majority of our revenue from customers’ subscription-based purchases of prescription products made available through our platform. We expect to continue to expand the conditions for which customers can seek treatment from Providers through our platform, and as a result, new customer acquisition is integral to our business. Our financial condition and results of operations are and will continue to be highly dependent on the ability of our marketing function to adequately promote, market, and attract customers to our platform and offerings in a manner that complies with applicable laws and regulations and at a cost that does not exceed our current budget allocated to marketing.- We believe that maintaining and enhancing our reputation and brand recognition is critical to our relationships with existing customers, Providers, strategic partners,
Pharmacies,Partner Pharmacies, and other suppliers, and to our ability to attract new customers, Providers, strategic partners,Pharmacies,Partner Pharmacies, and other suppliers. The promotion of our brandmay requirerequires us to make substantial investments, and we anticipate that, given the highly competitive nature of our market, these marketing initiatives may become more challenging to execute successfully and increasinglydifficult andexpensive. Brand promotion and marketing activities may not be successful or yield increased revenue, and to the extent that these activities yield increased revenue, the increased revenue may not offset the expenses we incur and our results of operations could be harmed. In addition, any factor that diminishes our reputation or that of our management, including failing to meet the expectations of our customers, Providers, or partners, could harm our reputation and brand and make it substantially more difficult for us to attract new customers, Providers, and partners. (See “–Use of social media andcelebrityinfluencers may materially and adversely affect our reputation or subject us to fines or other penalties”). Additionally, unexpected side effects or safety or efficacy concerns with our offerings, including compounded injectable semaglutide or GLP-1s as a class, significant changes in demand, litigation or regulatory proceedings and investigations, negative publicity, recalls, pressure from existing or new competitive products, or changes in labeling or pricing for these medications, could materially impact our reputation, which could negatively affect our business, stock price, prospects, and/or our results of operations. If we do not successfully maintain and enhance our reputation and brand recognition in a cost-effective manner, our business may not grow and we could lose our relationships with customers, Providers, and partners, which could harm our business, financial condition, and results of operations. - Our current business strategy is highly dependent on our platform and offerings achieving and maintaining market acceptance. Market acceptance and adoption of our business model and
the products and services we make availableour offerings may depend on educating potential customers who may find ourproducts and servicesofferings useful, as well as potential partners, suppliers, and Providers, as to the distinct features, ease-of-use, positive lifestyle impact, cost savings, and other perceived benefits of our offerings as compared to those of competitors. If we are not successful in demonstrating to existing and potential customers the benefits of ourservices,offerings, our revenue may decline or we may fail to increase our revenue in line with our forecasts. - Achieving and maintaining market acceptance of our model and our
servicesofferings could be negatively impacted by many factors,including, to the extent they arise from:including: - •perceived risks associated with compounded medications, including the prescribing, compounding, safety, efficacy, fulfillment, distribution, and marketing of such medications;
- In addition, our business model and the
products and servicesofferings we make available may be perceived by potential customers, Providers, suppliers, and partners to be less trustworthy or effective than traditional medical care or competitive telehealth options, and people may be unwilling to change their current health regimens or adopt our offerings. Consumers who have healthcare insurance coverage may not wish to use our platform to access healthcare services or products for which insurance reimbursement is not available. Moreover, we believe that Providers can be slow to change their treatment practices or approaches because of perceived liability risks or distrust of departures from traditional practice. Accordingly, we may face resistance to our offerings from brick-and-mortar Providers. - The market for our model and services is relatively new, rapidly evolving, and increasingly competitive, as the healthcare industry in the United States is undergoing significant structural change and consolidation, which makes it difficult to forecast demand for our
solutions.offerings. - The market for our model is relatively new, rapidly evolving and increasingly competitive. We are expanding our business by offering technology-driven access to consultation and treatment options for new conditions, including the utilization and integration of artificial intelligence in our offerings, but it is uncertain whether our offerings will achieve and sustain high levels of demand and market adoption. Our future financial performance depends in part on growth in this market, our ability to market effectively and in a cost-efficient manner, and our ability to adapt to emerging demands of existing and potential customers and the evolving regulatory landscape. It is difficult to predict the future growth rate and size of our target market. Negative publicity concerning telehealth generally, our
offerings,offerings (including compounded offerings), customer success on our platform, or our market as a whole could limit market acceptance of our business model andservices.offerings. If our customers do not perceive the benefits of our offerings, or if our offerings do not drive customer use and enrollment, then our market and our customer base may not continue to develop, or they may develop more slowly than we expect. Our success depends in part on the willingness of Providers and healthcare organizations to partner with us, increase their use of telehealth and pharmaceutical compounding, and our ability to demonstrate the value of our technology to Providers, as well as our existing and potential customers. If Providers, healthcare organizations or regulators work in opposition to us or if we are unable to reduce healthcare costs or drive positive health outcomes for our customers, then the market for ourservicesofferings may not continue to develop, or it might develop more slowly than we expect. Similarly, negative publicity regarding customer confidentiality and privacy in the context of telehealth and artificial intelligence could limit market acceptance of our business model andservices.offerings. - The healthcare industry in the United States is continually undergoing or threatened with significant structural change and is rapidly evolving. We believe demand for our offerings has been driven in part by rapidly growing costs in the traditional healthcare system, difficulties accessing the healthcare system, patient stigma associated with sensitive medical conditions, the movement toward patient-centricity and personalized healthcare, advances in technology, and general movement to telehealth. Widespread acceptance of personalized healthcare enabled by technology and pharmaceutical compounding is critical to our future growth and success. A reduction in the growth of technology-enabled personalized healthcare could reduce the demand for our services and result in a lower revenue growth rate or decreased revenue. Additionally, in the United States, the majority of our revenue is driven by products and services offered through our platform on a subscription basis, and the adoption of subscription business models is still relatively new, especially in the healthcare industry. If customers do not shift to subscription business models and subscription health management tools do not achieve widespread adoption, or if there is a reduction in demand for subscription products and services or subscription health management tools, our business, financial condition, and results of operations could be adversely affected.
- The introduction by competitors of solutions or offerings that are or claim to be superior to our platform or offerings may create market confusion, which may make it difficult for potential customers to differentiate between the benefits of our offerings and the benefits of other competitive solutions. In addition, the entry of multiple new products may lead some of our competitors to employ pricing strategies that could adversely affect the pricing of products and services we make available. If a competitor develops a product or business that competes with or is perceived to be superior to our offerings, or if a competitor employs strategies that place downward pressure on pricing within our industry, our revenue may decline significantly or may not increase in line with our forecasts, either of which could adversely affect our business, financial condition, and results of operations.
- The markets for healthcare and technology are intensely competitive, subject to rapid change, and significantly affected by new product and technological introductions and other market activities of industry participants. We compete directly not only with other established telehealth providers but also traditional healthcare providers, pharmacies, pharmaceutical companies, clinical laboratories, large retailers that sell non-prescription products, including, for example, over-the-counter medical devices, nutritional supplements, vitamins, and hair care treatments, as well as technology companies entering into the health and wellness industry. Our current competitors include traditional healthcare providers expanding into the telehealth market, incumbent telehealth providers, as well as new entrants into our market that are focused on direct-to-consumer healthcare or healthcare technology. Our competitors further include enterprise-focused companies that may enter the direct-to-consumer healthcare industry, pharmaceutical companies that have entered the direct-to-consumer healthcare industry, as well as direct-to-consumer healthcare providers and technology companies. We may also increasingly be viewed by pharmaceutical companies as competing with them as customers seek out personalized solutions. Many of our current and potential competitors may have greater name and brand recognition, longer operating histories, or significantly greater resources than we do, or may be able to offer products and services similar to those offered on our platform at more attractive prices than we can. Further, our current or potential competitors may be acquired by third parties with greater available resources, which has occurred and may continue to occur in our industry. In addition, our competitors have established, and may in the future establish, cooperative relationships with vendors of complementary products, technologies, or services to increase the availability of their solutions in the marketplace. As a result, our competitors may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards, or customer requirements and may have the ability to initiate or withstand substantial price competition.
- Our business entails the risk of professional liability claims against the Affiliated Medical Groups, the Providers they engage on our platform, our Partner Pharmacies, our
Facilities, Manufacturing Suppliers,Facilities (and associated personnel, including pharmacists), the third-party suppliers and manufacturers of certain products on our platform, including prescription pharmaceuticals, over-the-counter drugs, over-the-counter devices, cosmetics, and dietary supplements (collectively, “Manufacturing Suppliers”), and us. Although we carry insurance covering medical malpractice claims in amounts that we believe are appropriate in light of the risks attendant to our business, successful professional liability or other claims could result in substantial damage awards that exceed the limits of our insurance coverage. In addition, professional liability insurance is expensive and insurance premiums may increase significantly in the future, particularly as we expand the scope of our services and the number of conditions for which we provide access to treatment. As a result, adequate professional liability insurance may not be available to the Affiliated Medical Groups, the Providers, our Facilities, our Partner Pharmacies, Manufacturing Suppliers or to us in the future at acceptable costs or at all. - Any claims made against us, our Partner Pharmacies, our
Facilities,Facilities (and associated personnel, including pharmacists), Manufacturing Suppliers, the Affiliated Medical Groups, and/or the Providers that are not fully covered by insurance could be costly to defend against, result in substantial damage awards against us, and divert the attention of our management, our Partner Pharmacies, our Facilities, Manufacturing Suppliers, Affiliated Medical Groups, and/or Providers from their respective operations, which could have a material adverse effect on our business, financial condition, and results of operations. In addition, claims against us, even if covered by insurance, may adversely affect our business, brand, or reputation, and divert the attention of our management, our Partner Pharmacies, our Facilities, Manufacturing Suppliers, Affiliated Medical Groups, and/or Providers. If our customers have negative experiences on our platform as a result of the activities or quality of Providers, including any allegations of potentially unethical or illegal practices, such negative experiences could subject us to liability and negatively affect our brand, our ability to attract new customers, and our ability to retain existing customers. - The Affiliated Medical Groups typically engage Providers that perform services through our platform as independent contractors. The Affiliated Medical Groups believe that the Providers are independent contractors because, among other things, they can choose whether, when, and where to provide services on our platform and are free to provide services on our competitors’ platforms. Nevertheless, recent legislative and judicial activity have in some jurisdictions created more restrictive standards or enforcement uncertainty with respect to the classification of workers within certain industries. The Affiliated Medical Groups may not be successful in defending the independent contractor status of Providers in some or all jurisdictions in which we and/or they operate. Furthermore, the costs associated with defending, settling, or resolving pending and future lawsuits (including demands for arbitration) relating to the independent contractor status of Providers could be material to the
Affiliated Medical Groups. - Affiliated Medical Groups. Foreign, state, and local laws governing the definition or classification of independent contractors, or changes thereto, or judicial decisions regarding independent contractor classification, could require classification of Providers as employees (or workers or quasi-employees where those statuses exist) of the Affiliated Medical Groups. If the Affiliated Medical Groups are required to classify Providers as employees (or as workers or quasi-employees where applicable), it could result in significant additional expenses, potentially including expenses associated with the application of wage and hour laws (including minimum wage, overtime, and meal and rest period requirements), employee benefits, social security contributions, taxes, and penalties. Further, any such reclassification could add significant complexity to our business model and could force us to have to modify or renegotiate our relationships with the Affiliated Medical Groups, which may not be possible on mutually agreeable terms, and could have an adverse effect on our business, financial condition, and results of operations.
- We have made, and may in the future make,
acquisitionsacquisitions, potential strategic transactions and investments in the United States as well as in international markets, to add employees, complementary companies, operations, products, solutions, technologies, facilities, revenue, and/orrevenue.assets to our business. These transactions could be material to our results of operations and financial condition. The identification of suitable acquisition or investment candidates can be difficult, time-consuming, and costly, and we may not be able to complete acquisitions on favorable terms, if atall.all, and may not realize the expected benefits of any such acquisitions or investments. The process of integrating acquired companies, businesses, or technologies has created, and will continue to create, unforeseen operating difficulties and expenditures. The related areas where we face risks include, but are not limited to: - •diversion of management’s time and focus from operating our business to addressing acquisition negotiation and integration challenges;
- •failure to generate the expected financial results related to an acquisition
onin a timely manner or at all; and - Acquisitions can also result in expenditures of significant cash,
dilutiveissuances of equity or convertible securities (which can be dilutive to ourequity securities,existing stockholders), the incurrence of debt, restrictions on our business, contingent liabilities, amortization expenses, or impairments of goodwill, any of which could harm our financial condition. In addition, any acquisitionswe announceor investments could be viewed negatively by customers, Providers, partners, suppliers, or investors. - Additionally, competition within our industry for acquisitions of businesses, technologies and assets is and may
becomecontinue to be intense. Even if we are able to identify an acquisition or investment that we would like to consummate, we may not be able to complete theacquisitiontransaction on commercially reasonable terms or the target may be acquired by another company. We may enter into negotiations for acquisitions or investments that are not ultimately consummated. Those negotiations could result in diversion of management’s time and significant out-of-pocket costs. If we fail to evaluate, execute and integrate acquisitions successfully, including our recently completed or announced acquisitions, we may not be able to realize the benefits of these acquisitions, and our results of operations could be harmed. If we are unable to successfully address any of these risks, our business, financial condition, or results of operations could be harmed. - Expanding our business to attract customers, Providers, and suppliers in countries other than the United States is
an elementa core pillar of our long-termbusinessgrowth strategy. For instance, in July 2025, we completed the acquisition of Zava, a digital health platform with operations in the United Kingdom, Germany, Republic of Ireland, France, and Spain, and in November 2025, we completed the acquisition of Medici, a digital health platform with operations in Canada. In February 2026, we announced a definitive agreement to acquire Eucalyptus, an Australia-based digital health company that operates in Australia, the United Kingdom, Germany, Canada, and Japan. An important part of targeting international markets is increasing our brand awareness and establishing relationships with partners internationally. Conducting business internationally involves a number of risks, including: - •uncertain legal and regulatory requirements applicable to telehealth and prescription
medication;medication, including compounding; - •multiple, conflicting and changing laws and regulations such as healthcare laws, marketing and consumer protection laws, tax laws, privacy and data protection laws and regulations including the use of big data analytics and artificial intelligence, export and import restrictions, employment laws, regulatory requirements and other governmental approvals, permits and licenses;
- •logistics and regulations associated with prescribing medicine online and engaging with pharmacies and other suppliers to compound, distribute, dispense, and/or ship the prescribed medication;
- Our ability to continue to expand our business and to attract talented employees, customers, Providers, partners, and suppliers in various international markets will require considerable management attention and resources and is subject to the particular challenges of supporting a rapidly growing business in an environment of multiple languages, cultures, customs, legal systems, alternative dispute resolution systems, regulatory systems, and commercial infrastructures. Entering new international markets
will beis expensive, our ability to successfully gain market acceptance in any particular market is uncertain, and the distraction of our senior management team to focus on international expansion could harm our business, financial condition, and results of operations. - None of our call centers, Partner Pharmacies, shipping providers, contract manufacturers, AWS, nor
AWSother third-party service providers have an obligation to renew their agreements with us on commercially reasonable terms, or at all. If we are unable to renew our agreements with these third-party service providers on commercially reasonable terms, if our agreements with these providers are prematurely terminated, or if in the future we add additional data, call center, or pharmacy providers, we may experience costs or downtime in connection with the transfer to, or the addition of, such new providers. If these third-party service providers were to increase the cost of their services, we may have to increase the price of our offerings, and our results of operations may be adversely impacted. - We depend on the Affiliated Medical Groups and their Providers to deliver quality healthcare consultations and services through our
platform, and the Facilities and Partner Pharmacies to provide efficient fulfillment and distribution of prescription medication and other products and services.platform. We conduct fulfillment and distribution activities through a combination of our Facilities and Partner Pharmacies, and therefore depend on such Partner Pharmacies to provide efficient fulfillment and distribution of prescription medication and other products and services.We alsoFinally, we depend onour Outsourcing Facility andour relationships with Manufacturing Suppliers to supply and/or manufacture certain of our products or product ingredients, including compounded GLP-1s, to the Pharmacies. We cannot control the timing, or ensure the availability, of any such offerings. - Any interruption in the availability of a sufficient number of Providers or supply from our Partner Pharmacies, our Facilities or Manufacturing Suppliers could materially and adversely affect our ability to satisfy our customers and ensure they receive consultation services and any medication that they have been prescribed. If we were to lose our relationship with one of the Affiliated Medical Groups, we cannot guarantee that we will be able to ensure access to a sufficient network of Providers. Similarly, if we were to lose our relationship with one of our
Facilities,PartnerPharmacies,Pharmacies or Manufacturing Suppliers, are unable to obtain access for customers to low cost pharmaceutical products through our Partner Pharmacies, Facilities, or Manufacturing Suppliers, or one of our Partner Pharmacies, Facilities or Manufacturing Suppliers was subject to regulatory or legal enforcement, we cannot guarantee that we will be able to find, perform due diligence on, and engage with one or more replacement partners in a timely manner. Our ability to service customer requirements could be materially impaired or interrupted in the event that our relationship with an Affiliated Medical Group,Facility,Partner Pharmacy or Manufacturing Supplier is terminated, or any Affiliated Medical Group,Facility,Partner Pharmacy, or Manufacturing Supplier experiences a disruption in operations, including as the result of regulatory or legal enforcement. We also depend on cloud infrastructure providers, payment processors, suppliers of prescription and non-prescription products and packaging, shipping and delivery services, and various others that allow our platform to function effectively and serve the needs of our customers. Difficulties with our significant partners and suppliers, regardless of the reason, could have a material adverse effect on our business. - The products we sell on our platform and through retailers are sourced from a wide variety of domestic and international vendors, and any future disruption in our supply chain or inability to find qualified vendors and access products that meet requisite quality and safety standards in a timely and efficient manner could adversely impact our business. Our ability to offer access to branded GLP-1 offerings is subject to supply chain constraints, which we expect to continue for the foreseeable future. Our compounded GLP-1 offerings may also be subject to periodic supply chain constraints. Certain of our weight loss offerings are primarily fulfilled by one supplier. If this supplier stops fulfilling purchase orders, it could significantly slow our ability to fulfill these orders until new suppliers are identified and fully onboarded
andand/or our internal manufacturing capabilities are expanded, which could adversely impact our results of operations and business. While we have not experienced material supply chain issues to date, the loss or disruption of such supply arrangements for any reason, including as a result of ongoing conflict arising out of the Russian invasion of Ukraine and the hostilities and conflict in the Middle East, other acts of war or terrorism, trade sanctions, inflation, health epidemics or pandemics, labor disputes, loss or impairment of key manufacturing sites, inability to procure sufficient raw materials, quality control issues, ethical sourcing issues, a supplier’s financial distress, natural disasters, looting or other external factors over which we have no control, could interrupt product supply and, if not effectively managed and remedied, have a material adverse impact on our business, results of operations and financial condition. From time to time, our Facilities have also experienced batch failures. While these failures have not caused a material interruption to our supply arrangements to date, a future material interruption could cause reputational damage and have a material adverse impact on our business, results of operations and financial condition. - Additionally, any major changes in tax or trade policy, such as the imposition of additional tariffs or duties on imported products, or trade sanctions, between the U.S. and countries from which we source merchandise, directly or indirectly, could require us to take certain actions, such as raising prices on our offerings or seeking alternative sources of supply from vendors with whom we have less familiarity, which could adversely affect our reputation, revenue, and our results of operations. U.S.
- The operations of our Pharmacies, Partner Pharmacies and any affiliated pharmacies are subject to extensive regulation in the United States and internationally.
Pharmacies, pharmacists, and pharmacy technicians are subject to a variety of federal and state statutesSuch statues and regulationsgoverninggovern various aspects of the pharmacy business, including the distribution of drugs; operation of mail order pharmacies; licensure of facilities and professionals, including pharmacists, technicians, and other healthcare professionals; compounding of prescription medications; packaging, storing, distributing, shipping, and tracking of pharmaceuticals; repackaging of drug products; labeling, medication guides, and other consumer disclosures; interactions with prescribing professionals; counseling of patients; prescription transfers; advertisement of prescription products and pharmacy services; security; and reporting tothe FDA, state boards of pharmacy, the U.S. Consumer Product Safety Commission, and other statevarious enforcement or regulatoryagencies.authorities. - Many states in the United States have laws and regulations requiring out-of-state mail-order pharmacies to register with that state’s board of pharmacy. In addition, the FDA inspects facilities in connection with procedures to effect recalls of prescription drugs. The Federal Trade Commission also has requirements for mail-order sellers of goods. The U.S. Postal Service (the “USPS”) has statutory authority to restrict the transmission of drugs and medicines through the mail to a degree that may have an adverse effect on our mail-order operations. The USPS historically has exercised this statutory authority only with respect to controlled substances. However, if the USPS restricts our ability to deliver drugs through the mail, alternative means of delivery are available to us, though such alternative means of delivery could be significantly more expensive. The U.S. Department of Transportation has regulatory authority to impose restrictions on drugs inserted into the stream of commerce. These regulations generally do not apply to the USPS and its operations.
- Failure to successfully expand our capabilities, the loss, suspension or other limitation of any license held by a
Pharmacy or MedisourceRx,Pharmacy, or any failure or perceived failure by us or the Pharmaciesor MedisourceRxto comply with any applicable federal, state, or local law orregulationregulation, and equivalent foreign law, could have a material adverse effect on our business, financial condition, and results of operations and may expose us to civil and criminal penalties. - We have limited experience determining the optimal prices for certain of our offerings. As competitors introduce new solutions that compete with our offerings,
especially in the telehealth market where we face significant competition,we may be unable to attract new customers, Providers, or other partners at the same price or based on the same pricing models as we have used historically. Pricing decisions may also impact the mix of adoption among the products and services that we make available and negatively impact our overall revenue. As a result, in the future we may adjust our prices to offer more options for our customers or for other strategic reasons. Any pricing decisions including those mentioned above could adversely affect our financial position, including our revenue, gross profit, profitability, and cash flows. - A significant portion of our inventory is stored in our
Ohio facility, and we also hold inventory in our Arizona facilities, at MedisourceRx,Facilities, and from time to time with third party logistics providers, and any damage or disruption at anyfacilityFacility or with any third party logistics provider may harm our business. - Our
Ohio facility, our Arizona facilities, MedisourceRx,Facilities, and from time to time certainthird partythird-party logisticsprovidersproviders, collectively hold a significant portion of our inventory. From time to time, we order inventory with sufficient lead time in order to ensure our ability to fulfill anticipated customer demand for supply chain, seasonality, or other reasons. We store this inventory at some or all of the previously mentioned facilities, and we may have a significant level of inventory in storage during certain quarters. A natural disaster, fire, power interruption, work stoppage, or other calamity at any of these facilities would significantly disrupt our ability to deliver our products and operate our business, particularly if we had a significant level of inventory stored in a damaged or unusable facility. If a material amount of any facility, machinery, or inventory were damaged or unusable for any reason, we would be unable to meet our obligations to customers and wholesale partners, which could materially adversely affect our business, financial condition, and results of operations. - As an example, under our current business model, in most jurisdictions where we operate, we accept payments only from our customers, and not from any third-party payors, such as government healthcare programs or health insurers. Because of this approach, we are not currently subject to many of the laws and regulations that impact many other participants in the healthcare industry. However, if we begin accepting reimbursement from insurance providers or other third parties in these jurisdictions, or if the government asserts broader regulatory control over companies like ours, the complexity of our operations and our compliance obligations will materially increase. Failure to comply with any applicable foreign, federal, state and local laws and regulations could have a material adverse effect on our business, financial condition and results of operations.
- Additionally, in the United States, we rely
onon, or have relied on, exemptions from FDA’s premarket approval and certain labeling requirements to market our compounded products, which requires or has required us to comply with the conditions in the exemptions set forth in Sections 503A and 503B of the FDCA. In May 2024, we began offering access to GLP-1s as part of our weight loss offering, first in the form of compounded injectable semaglutide, and in September 2024, we acquired a licensed 503B outsourcing facility. Certain compounding pharmacies and 503B outsourcing facilities have experienced both facility and product quality issues and been the subject of negative media coverage as well as litigation in recent years, including with respect to compounded GLP-1s. In December 2025, our Outsourcing Facility received a warning letter noting the failure to submit an adverse event report and a deficiency with the Outsourcing Facility’s procedures for reporting adverse events in violation of Section 503B of the FDCA, to which we timely responded. While we do not expect this inquiry will have a material impact on our business or operations, there can be no assurance that the FDA will be satisfied with the adequacy of our responses. Compounding pharmacies and 503B outsourcing facilities have been subject to increased scrutiny of their compounding activities by the FDA and state governmental agencies. Governmental inquiries or actions or litigation brought against us, a Partner Pharmacy,Pharmacy,Pharmacy or other Facility, or Manufacturing Supplier relating to our compounding activities, including with respect to GLP-1 products, whether or not such inquiry, action or litigation ultimately results in penalties, changes to our business practices or other consequences, could have an adverse effect on our brand, reputation and business. - Additionally, certain of our compounded GLP-1 products were previously produced by 503B outsourcing facilities, which was permitted based on a previous shortage with respect to FDA-approved injectable semaglutide. On February 21, 2025, the FDA resolved the semaglutide shortage. Resolution of the shortage limits our ability to use 503B outsourcing facilities to provide access to compounded semaglutide on our platform. In particular, we currently only use 503A compounding pharmacies for the fulfillment and dispensing of compounded GLP-1 products, which limits our current use of 503B outsourcing facilities and may constrain our ability to meet customer demand, which could adversely affect our results of operations. While
FDA does not limit compoundingwe continue todrug shortages, and we believe there are paths to continue offeringoffer access to certain compounded GLP-1safter the shortage endsconsistent with the statutory exemptions from the new drug approval requirements, we cannot guarantee that we will be able to continue offering these products in the same manner, to the same extent, or at all, due to a variety of factors outside our control, including supply chain, intellectual property, and regulatoryand resource allocationmatters. - Further, in 2024, the manufacturers of certain FDA-approved GLP-1 products requested FDA add semaglutide and tirzepatide to its “Demonstrable Difficulties for Compounding List.” FDA has never finalized the Demonstrable Difficulties for Compounding List for any drug products, but if FDA were to add semaglutide to, and finalize, the list, we could no longer compound these products. If our ability to offer these products
iscontinues to be constrained in the future, supply may be limited, the price of these offerings may increase significantly and the margins on our sale of such products may decrease, which could decrease new customer demand, cause existing customers to cancel their subscriptions, and reduce our revenues and/or gross profit from sales of such products, which could harm our brand, reputation, results of operations and the market price of our Class A common stock.While we do not provide access to compounded tirzepatide, theThe regulatory landscape applicable to GLP-1s continues to rapidly evolve in ways that may be adverse to our business. - Many of
ourthe compounded drugs available through our Platform are produced by ourPharmacies or Outsourcing Facility, MedisourceRx,Pharmacies, and the promotion and advertising of these compounded drugs is subject to FDA regulation. In particular, FDA will object to any promotional activity that is false or misleading, including the failure to disclose material facts. For example, FDA will expect adequate substantiation for an efficacy claim and some information related to the product’s risks. Failure by us orourany third-party collaborators (including social media influencers) we contract with to comply with these requirements may result in enforcement by the FDA, such as warning letters requiring that remedial measures be taken, or state authorities. This could result in adverse publicity and may affect our ability to promote or sell our products, which could have material adverse impacts on our business. In addition, FDA findings of misleading promotional statements and practices can lead to private litigation under federal and state consumer protection and unfair trade practices laws, such as the Lanham Act or similar state laws. - Further, in February 2025, we acquired a peptide manufacturing facility (and related assets).
These are bothThis is an operationalareasarea where we have not operated previously as an organization.For example, with respect to the peptide manufacturing business,Once we have commenced commercial operations, we will be subject to new regulatory requirements, including provisions governing FDA-registered API manufacturers, as well as federal regulations regarding cGMP applicable to API manufacturers. We will also be subject to CDPH Food & Drug Branch oversight as a CDPH-registered drug manufacturer and will be required to comply with certain rules and regulations from the departments of health, boards of pharmacy, or other regulatory authorities of other states to which we ship or otherwise introduce API. - Additionally,
with respect to our expansion intowe began offering laboratory testingservices, we will be subjectservices in November 2025, which subjects us tonewlicensure and certification requirements and federal, state, and local laws and regulations applicable to laboratory testing, including the FDCA,theCLIA, and similar state laws. Thiswillalsoresultresults in additional oversight by various regulatory agencies, includingtheCMS and the FDA within HHS on the federal side, as well as state and local departments of health responsible for regulating clinical laboratory testing within the jurisdictions where we will conduct laboratorytesting.testing or from which we receive specimens. We may alsobebecome subject to additional state licensure requirements applicable to entities engaging in the distribution of prescription medical devices and products depending on how we integrate the laboratory testing services into our current customer offerings. - Furthermore, we may also become subject to certain FDA premarket review requirements relating to
the diagnosticlaboratory testingproductsproducts, including sample collection kits and related components, that are used in thenewly acquired LDTs,laboratory testing services, including but not limited to 510(k) clearance, de novo classification, premarket approval, and others. Certain sample collection kits may be regulated as medical devices, may be considered prescription devices, or may require 510(k) clearance, de novo classification, premarket approval, or other FDA authorization. In some cases, it may be unclear whether the kits we use—or kits sourced from third-party suppliers—require such authorization or are being used in a manner consistent with their cleared, exempt, or authorized intended use. If the FDA or state regulators determine that any such kits or components require premarket review or are being used outside the scope of an existing authorization, we could be required to seek new or supplemental marketing authorization, modify our workflows or labeling, suspend or discontinue use of certain kits, or identify and validate alternative suppliers. Replacement kits may not be readily available, may require their own FDA review, or may be difficult or costly to integrate into our testing operations. If we are unable to comply withour newthe regulatory regime, we may be subject to fines, enforcement actions, or other regulatory orders, which may adversely affect our business. TheIn the United States, the healthcare industry is subject to extensive federal and state regulation with respect to kickbacks, physician self-referral arrangements, false claims, and other fraud and abuse issues. For example, thefederal anti-kickback law (the “Anti-Kickback Law”)Anti-Kickback Law prohibits, among other things, knowingly and willfully offering, paying, soliciting, receiving, or providing remuneration, directly or indirectly, in exchange for or to induce or reward either the referral of an individual, or the furnishing, arranging for, or recommending of an item or service that is reimbursable, in whole or in part, by a federal healthcare program. “Remuneration” is broadly defined under the Anti-Kickback Law to include anything of value, such as, for example, cash payments, gifts or gift certificates, discounts, or the furnishing of services, supplies, or equipment. The Anti-Kickback Law is broad, and it prohibits many arrangements and practices that are lawful in businesses outside of the healthcare industry.- The penalties for violating the Anti-Kickback Law can be severe. Violations of the Anti-Kickback Law may be established without providing specific intent to violate the statute, and may be punishable by civil, criminal and administrative fines and penalties, damages, imprisonment, and exclusion from participation in federal healthcare programs. Many states have adopted laws similar to the Anti-Kickback Law, and some apply to items and services reimbursable by any payor, including private insurers.
- In addition, the federal ban on physician self-referrals, commonly known as the “Stark Law,” prohibits, subject to certain exceptions, physician referrals of Medicare patients to an entity providing certain “designated health services” if the physician or an immediate family member of the physician has any financial relationship with the entity. A “financial relationship” is created by an investment interest or a compensation arrangement. Penalties for violating the Stark Law include the return of funds received for all prohibited referrals, fines, civil monetary penalties, and
possibleexclusion fromtheparticipation in federal healthcare programs. In addition to the Stark Law, many states have their own self-referral bans, which may extend to all self-referrals, regardless of the payor. - The federal False Claims Act (the “False Claims Act”) generally prohibits anyone from knowingly and willingly presenting, or causing to be presented, a false or fraudulent claim for payment of federal funds, or knowingly making, or causing to be made, a false record or statement to get a false claim paid. A claim resulting from a violation of the Anti-Kickback Law constitutes a false or fraudulent claim. The False Claims Act also permits a private individual acting as a “whistleblower” to bring actions on behalf of themselves and the federal government alleging violations of the statute and to share in any monetary recovery. Penalties for violating the False Claims Act include substantial monetary penalties and fines, the imposition of a corporate integrity agreement and
possibleexclusion fromtheparticipation in federal healthcare programs. Many states have adopted laws similar to the False Claims Act. - In the United States, because we do not accept payments from third-party payors, our current operations are not subject to the Stark Law, the Anti-Kickback Law, or the False Claims Act. If the scope of any of the Anti-Kickback Law, the Stark Law, or the False Claims Act changes or a state analog of any of the Anti-Kickback Law, the Stark Law, or the False Claims Act includes a broader spectrum of activities than the respective federal statute, or if we change our business model to accept payments from third-party payors such as a government program, our failure to comply with such laws, or an allegation that we have not complied, could have a material adverse effect on our business, financial condition, and results of operations.
- Because these are developing areas of law and regulation, we monitor our compliance in every jurisdiction in which we operate. However, we cannot be assured that our or the Affiliated Medical Groups’, Providers’, or Pharmacies’ activities and arrangements, if challenged, will be found to be in compliance with the law or that a new or existing law will not be implemented, enforced, or changed in a manner that is unfavorable to our business model. We cannot predict the regulatory landscape for those jurisdictions in which we operate and any significant changes in law, policies, or standards, or the interpretation or enforcement thereof, could occur with little or no notice. The majority of the consultations provided through our platform are asynchronous consultations for customers located in jurisdictions that permit the use of asynchronous
telehealth.telehealth (noting that in the United Kingdom, asynchronous consultations are permissible, but additional safeguards are required when prescribing certain prescription medicines). If there is a change in laws or regulations related to our business, or the interpretation or enforcement thereof, that adversely affects our structure or operations, including greater restrictions on the use of asynchronous telehealth or remote supervision of nurse practitioners or physician assistants, or limitations on the ability to develop or distribute compounded pharmaceutical products, it could have a material adverse effect on our business, financial condition, and results of operations. - Due to uncertainty and other factors in the regulatory environment, certain states, federal agencies or other national regulatory agencies may determine that we are in violation of their laws and regulations. If we must remedy such violations, we may be required to modify our business and services in a manner that undermines our platform’s attractiveness to customers, we may become subject to fines or other penalties or, if we determine that the requirements to operate in compliance in certain states are overly burdensome, we may elect to terminate our operations in such states or eliminate certain products or services. In each case, our revenue may decline and our business, financial condition, and results of operations could be adversely affected.
- Additionally, the introduction of new products, services or solutions to our platform may require us to comply with additional, yet undetermined, laws and regulations. Compliance may require obtaining appropriate federal, state, or local or national licenses or certificates, increasing our security measures and expending additional resources to monitor developments in applicable rules and ensure compliance. The failure to adequately comply with these future laws and regulations may delay or possibly prevent our products or services from being offered to customers, which could have a material adverse effect on our business, financial condition, and results of operations.
- Changes in insurance and healthcare
laws,laws in the United States, as well as the potential for further healthcare reform legislation and regulation, have created uncertainty in the healthcare industry and could materially affect our business, financial condition, and results of operations. - The products available through our platform, and the third-party suppliers and manufacturers of these products, including our Manufacturing Suppliers, are subject to extensive regulation by the FDA and international, federal, state and local authorities, including prescription drug products, over-the-counter drugs, prescription medical devices, over-the-counter medical devices, cosmetics and dietary supplements. These authorities can enforce regulations related to methods and documentation of the testing, production, compounding, control, safety, quality assurance, labeling, packaging, sterilization, storage, shipping, marketing, and sale of products. Government regulations specific to pharmaceuticals and medical devices are wide ranging and govern, among other things: the ability to bring a pharmaceutical to market, the conditions under which it can be compounded, the conditions under which it can be sold, the conditions under which it must be manufactured, and permissible claims that may be made for such product. Failure to meet, or changes to any international, federal, state, or local requirements attendant to the testing, compounding, production, distribution, labeling, packaging, handling, sales and marketing, continued safety and/or other aspects of a regulated product, including any changes to the interpretation or enforcement of such requirements or any exemptions from such requirements, could result in enforcement actions, impede our ability to provide access to affected products, and have a material adverse effect on our business, financial condition, and operations.
- The prescription drug and medical device products available through our platform require approval or authorization by the FDA (and equivalent regulatory authorities in the United Kingdom, the European Union, and Canada) and are subject to the limitations placed by the FDA (or equivalent regulatory authorities in the United Kingdom, the European Union, and Canada) on the approved or authorized uses in the product prescribing information. FDA has the authority to impose significant restrictions on approved drug products and medical devices through regulations on advertising, promotional and distribution activities. Some of these products are prescribed by Providers on the platform for “off-label” uses. While
Providers are legally permitted to prescribe medications for off-label uses, and althoughwe believe our product promotion is conducted in material compliance with FDA and other regulations, if the FDA determines that our product promotion constitutes promotion of an unapproved use of an approved product or of an unapproved product, or is otherwise inconsistent with applicable FDA laws and regulations, the FDA could request that we modify our product promotion or subject us to regulatory and/or legal enforcement actions, including the issuance of a warning letter, injunction, seizure, civil fine, and criminal penalties. - It is also possible that other federal, state, or foreign enforcement authorities might take action if they consider the product promotion to constitute promotion of an unapproved use of an approved product or of an unapproved product,
whichor with respect to the United Kingdom, the European Union, and Canada, the promotion of prescription only medicines to the general public (which is prohibited), and could result in significant fines or penalties under other statutes, such as laws prohibiting false claims forreimbursement.reimbursement or local advertising requirements in the United Kingdom, the European Union, and Canada. In addition, certain of the products available through our platform are compounded drug products under Section 503A of the FDCA. While we believe the compounded drug products available through our platform meet the requirements for exemption under Section 503A of the FDCA, if the FDAwere to determinedetermines that such products do not meet the requirements for exemption, the FDA could subject us, our Facilities, Partner Pharmacies, Affiliated Medical Groups. Providers, or Manufacturing Suppliers to regulatory and/or legal enforcement actions,includingsuch as the issuance of a warning letter, injunction, seizure, civil fine, and criminal penalties. Our product offerings include proprietary product formulas that we market as cosmetic products. In recent years, the FDA has issued warning letters to several cosmetic companies alleging improper claims regarding their cosmetic products, and we could similarly be subject to enforcement action if we market our cosmetic products using drug claims or otherwise promote them for non-cosmetic purposes. Other federal, state, or foreign enforcement authorities might also take action against us or our Facilities, Partner Pharmacies, Affiliated Medical Groups, Providers or Manufacturing Suppliers if they determine that compounded drug products available through our platform do not meet applicable legal or regulatory requirements. In addition, Section 503A requires the pharmacy to obtain individual prescriptions establishing that the compounded drug is necessary for each drug prescribed for each of our customers, and also limits compounded drugs that are “essentially copies” of commercially available FDA-approved drugs, including those with the same route of administration. These restrictions create limitations on our ability to market compounded drugs that have the same active ingredients and route of administration as FDA-approved drugs. - Further, we previously sourced certain compounded GLP-1 products that we provided access to on our platform from 503B outsourcing facilities, which was permitted based on a previous shortage with respect to FDA-approved injectable semaglutide. A 503B outsourcing facility must meet certain conditions under Section 503B of the FDCA that are in some cases more stringent than under Section 503A of the FDCA. For example, the facility must register with FDA, and the drugs must be compounded by or under the direct supervision of a licensed pharmacist. The facility must also operate in compliance with FDA’s cGMP regulations and FDA’s requirements for outsourcing facilities addressing cGMP. On February 21, 2025, the FDA resolved the semaglutide shortages. Although we believe our products meet the applicable requirements
forof thestatutory exemptions in 503A and 503B,FDCA, additional changes to the regulatory requirements for compounding GLP-1 products may adversely impact our financial conditions and business operations, and we cannot predict such changes. - In addition, FDA regulates all labeling and advertisements for prescription and over-the-counter
drugs.drugs and medical devices. FDA prohibits false or misleading promotional statements and has broad authority to determine whether a communication is “false or misleading”, including taking into account whether a communication fails to disclose material facts in light of the representations made. These restrictions may be more limiting for compounded products as compared with FDA-approved products regarding efficacy and safety claims, which may impact our ability to compete against the sale of comparable FDA-approved products. If the FDA determines that our product promotion or a communication is “false or misleading”, or is otherwise inconsistent with applicable FDA laws and regulations, the FDA could request that we modify our product promotion or subject us to regulatory and/or legal enforcement actions, including the issuance of a warning letter, injunction, seizure, civil fine, and criminal penalties. While we believe our product promotion is in material compliance with FDA and other regulations, we have previously received warning letters from FDA related to promotion of our compounded products and could be subject to other actions by the FDA or other federal, state, or foreign enforcement authorities in the future. See the risk factor titled “—If we are unable to expand or maintain the scope of our offerings, including the number and type of products and services that we offer, the number and quality of Providers serving our customers, and the number and types of conditions capable of being treated through our platform, our business, financial condition, and results of operations may be materially and adversely affected.” - The GDPR has been implemented in the United Kingdom as the “UK GDPR” and sits alongside the UK Data Protection Act 2018 which implements certain United Kingdom-specific provisions and derogations
into the GDPR into UK law. Under the UK GDPR, companies not established in theUKUnited Kingdom but who process personal data in relation to the offering of goods or services to individuals in theUK,United Kingdom, or to monitor their behavior, are subject to the UKGDPR -GDPR, the requirements of which are (at this time) largely aligned with those under the GDPR and may lead to significant compliance and operational costs. - The EU GDPR and UK GDPR also impose strict rules on the transfer of personal data out of the European Economic Area (the “EEA”) and the United Kingdom, respectively, to other regions outside the EEA/UK, or third countries, that have not been deemed to offer “adequate” privacy protections by the competent data protection authorities, including the United States in certain circumstances, unless a derogation exists or adequate international transfer safeguards are put in place. In July 2023, the European Commission adopted an adequacy decision concluding that the United States ensures an adequate level of protection for personal data transferred from the EEA to the United States under the EU-U.S. Data Privacy Framework
(followed(which was followed in October 2023 with the adoption of an adequacy decision in theUKUnited Kingdom for the UK-United States Data Bridge). However, the adequacy decision does not foreclose, andis likelycontinues to face,futurelegal challenges, and the ongoing legal uncertainty may increase our costs and our ability to efficiently process personal data from the EEA or the UK.Additionally, underUnder theGeneral Data Protection Regulation (“GDPR”),EU GDPR and UK GDPR, data protection authorities inthe European Unionthese territories have the power to impose significant administrative fines for violations, which may also lead to damages claims by data controllers and data subjects. - In order to protect our intellectual property rights, we may be required to spend significant resources to monitor and protect these rights. We may not always detect infringement of our intellectual property rights, and defending or enforcing our intellectual property rights, even if successfully detected, prosecuted, enjoined, or remedied, could result in the expenditure of significant financial and managerial resources. Litigation may be necessary to enforce our intellectual property rights, protect our proprietary rights, or determine the validity and scope of proprietary rights claimed by others. Any litigation of this nature, regardless of outcome or merit, could result in substantial costs and diversion of management and technical resources, any of which could adversely affect our business and results of operations. We may also incur significant costs in enforcing our trademarks against those who attempt to imitate our brand and other valuable trademarks and service marks. Furthermore, our efforts to enforce our intellectual property rights may be met with defenses, counterclaims, countersuits, and adversarial proceedings such as oppositions, inter partes review, post-grant review, re-examination, or other post-issuance proceedings, that attack the validity and enforceability of our intellectual property rights. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential or sensitive information could be compromised by disclosure in the event of litigation. In addition, during the course of litigation, there could be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our Class A common stock.
- We are, and may in the future
bebe, subject to claims that we violated intellectual property rights of others, which are extremely costly to defend and could require us to pay significant damages and limit our ability to operate. - Companies in our industry, and other intellectual property rights holders seeking to profit from royalties in connection with grants of licenses, own large numbers of patents, copyrights, trademarks, and trade secrets, and frequently enter into litigation based on allegations of infringement or other violations of intellectual property rights. In addition, intellectual property rights, including use of an individual’s likeness and related trademarks, are a key asset of the
celebrityinfluencers we work with and any use by us of such assets is often heavily negotiated. Our future success depends in part on not infringing upon the intellectual property rights of others and being successful in overcoming any claims of infringement brought against us. We have in the past and may in the future receive notices or be subject to lawsuits that claim we have misappropriated, infringed, or otherwise misused other parties’ intellectual property rights. For example, on February 9, 2026, Novo Nordisk filed a lawsuit in the U.S. District Court for the District of Delaware asserting claims for patent infringement related to Novo Nordisk’s patent in connection with compounded GLP-1 products containing semaglutide available, based on a prescription, through our digital platform.We have in the past and may in the future receive notices that claim we have misappropriated, infringed, or otherwise misused other parties’ intellectual property rights, and theThe intellectual property disputes that we face may increase in number and/or materiality as a result of our expansion, product categories, and competitive dynamics.WeAdditionally, we may be unaware of the intellectual property rights of others that may cover some or all of our technology. Because patent applications can take years to issue and are often afforded confidentiality for some period of time, there may currently be pending applications, unknown to us, that later result in issued patents that could cover our technology. - From time to time, we are subject to legal and regulatory proceedings and inquiries in the ordinary course of business, which can include intellectual property disputes or claims related to our marketing or sale of products, any of which may be costly to defend and could materially harm our business and results of operations.
- From time to time, we are subject to legal proceedings in the ordinary course of business and
can facehave faced allegations, lawsuits, and regulatory inquiries, audits, and investigations regarding data privacy, security, labor and employment, consumer protection, investor protection, telehealth, pharmaceuticals, intellectual property infringement, including claims related to privacy, patents, publicity, trademarks, copyrights, and other rights, as well as other areas of law related to our business. Lawsuits, regulatory inquiries, audits, investigations and other legal proceedings can be expensive and disruptive to normal business operations. A portion of the technologies we use incorporates open-source software, and we may face claims claiming ownership of open-source software or patents related to that software, rights to our intellectual property, or breach of open-source license terms, including a demand to release material portions of our source code or otherwise seeking to enforce the terms of the applicable open-source license. We have faced and in the future mayalsofaceallegationsallegations, regulatory inquiries, or litigation related to our acquisitions, securities issuances, or business practices, including public disclosures about our business. We offer access to compounded pharmaceutical products that are in some cases compounded, fulfilled, and distributed through the Pharmacies, and we, as well as the Pharmacies, Affiliated Medical Groups, and Providers, have faced and in the future may face allegations, litigation, and regulatory investigations under foreign, federal or state laws related to the marketing, fulfillment, distribution, and/or sale of these products. Litigation and regulatory proceedings, and particularly the healthcare, pharmaceutical-related, consumer protection, data privacy and/or class action matters including securities class action and derivative lawsuits and regulatory inquiries that we have faced or we could face, may be protracted and expensive, and the results are difficult to predict. For example, in October 2023, theFederal Trade Commission (the “FTC”)FTC issued to us a Civil Investigative Demand requesting information as part of a non-public investigation.While the Company has responded to substantially allAs of theinformation requested by the FTC’s initial inquiry, asdate ofFebruary 24, 2025,this Annual Report on Form 10-K, the FTC has not communicated to us any potential conclusions or findings the FTC may make with respect to its investigation. We believe we have substantially completed providing responses to the FTC’s information requests. While we do not expect the outcome of this investigation to have a material impact on our business or operations, there can be no assurance that our expectations will prove correct. - Our systems are vulnerable to damage or interruption from the occurrence of any catastrophic event, including climate-related disasters or other extreme weather events such as earthquakes, fires, floods, hurricanes, snow or ice storms, tornadoes or tsunamis, power loss, telecommunications failure, software or hardware malfunction, cyber-attack, war, terrorist attack, or incident of mass violence, which could result in lengthy interruptions in access to our platform. If a climate-related disaster or other extreme weather event occurred in
Arizona (which is prone to extreme weather events including extreme heat, drought and wildfires) or Ohio (which is prone to extreme weather events including extreme temperatures, rain and snow storms, and flooding), which arethe locations of ourtwo facilities and the two Pharmacies,Facilities, we could experience fulfillment and distribution delays, among other things, that could have an adverse impact on our results of operations. In addition, acts of war or terrorism, including malicious internet-based activity and supply chain attacks, could cause disruptions to the internet or the economy as a whole. Further, even if our systems are not interrupted or ourfacilitiesFacilities are not affectedfromby a catastrophic event, catastrophic events have the potential to impact our employees’ and service providers’ abilities to commute to work(in Ohio or Arizona)or to stay connected effectively while working remotely. - Fiscal year 2024 represented our first full year of profitability on a net income basis. For the
twelve monthsyear ended December 31,2024,2025, we had net income of$126.0$128.4 million, and Adjusted EBITDA of$176.9$318.0 million, compared toanetlossincome of$23.5$126.0 million and Adjusted EBITDA of$49.5$176.9 million for thetwelve monthsyear ended December 31,2023.2024. There can be no assurance that we will be able to maintain our profitability in future fiscal periods. We have incurred more losses than profits since our inception, and have an accumulated deficit of$242.1$113.8 million as of December 31,2024.2025. We expect our costs will increase in the foreseeable future and we may not be able to maintain profitability as we expect to continue to invest significant additional funds towards growing our platform, growing our Provider network, growing the capabilities of the Pharmacies and enhancing our pharmacy fulfillment system, operating as a public company, increasing our customer base, hiring additional employees, and developing new products and technological capabilities to enhance our customers’ experience on our platform. These efforts may prove more expensive than we currently anticipate, and we may not succeed in increasing our revenue sufficiently to offset these higher expenses. To date, we have financed our operations principally from the sale ofour equity,equity and convertible debt instruments, revenue from our platform, and the incurrence of indebtedness. While we had positive cash flows from operations for the years ended December 31,20242025, 2024, and 2023, we may not generate positive cash flows from operations, or maintain profitability in any givenperiod, and our limited operating history may make it difficult to evaluate our current business and our future prospects.period. - •our ability to execute our plans to add treatment
optionsoptions, testing services, and Provider expertise for additional medical conditions; - •successful expansion of licensure and capabilities of the
PharmaciesPharmacies, our peptide manufacturing facility andMedisourceRx;our laboratory testing facility; - •costs and the diversion of management attention related to litigation, investigations, regulatory enforcement actions, or settlements;
- We rely significantly on revenue from customers purchasing subscription-based prescription products and services in the United States and may not be successful in expanding our offerings.
- To date, the vast majority of our revenue in the United States has been, and we expect it to continue to be, derived from customers who purchase subscription-based prescription products and services through our platform. In our subscription arrangements, customers select a cadence at which they wish to receive product shipments and services. Any material decline in the use of such offerings could have a pronounced impact on our future revenue and results of operations, particularly if we are unable to expand our offerings overall. The introduction of competing offerings with lower prices for consumers, fluctuations in prescription prices, changes in consumer purchasing habits, including an increase in the use of mail-order prescriptions, changes in the regulatory landscape, and other factors could result in changes to our contracts or a decline in our subscription revenue, which may have an adverse effect on our business, financial condition, and results of operations.
- We intend to continue to make investments to support our business growth and may require additional funds to respond to business challenges, including the need to develop new products or services, or enhance our existing platform and associated offerings, enhance our operating infrastructure and acquire complementary businesses and technologies. In order to achieve these objectives, we may make future commitments of capital resources. Accordingly, we may need to engage in equity or debt financings to secure additional funds. For example, in February 2025, we entered into a Revolving Credit and Guaranty Agreement with certain lenders and JPMorgan Chase Bank, N.A., as administrative and collateral agent, which provides for a three-year senior secured revolving line of credit in an amount up to $175.0 million. In May 2025, we issued $1.0 billion aggregate principal amount of 0% convertible senior notes due 2030, the total net proceeds from which were approximately $968.7 million. If we raise additional funds through further issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences, and privileges superior to those of holders of our Class A common stock. Any other debt financing secured by us in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters. In addition, we may not be able to obtain additional financing on terms favorable to us, if at all. The possibility of a significant economic downturn, increased interest rates, or disruptions in the global financial markets may make it more difficult to access available capital and may reduce our ability to secure financing on favorable terms. If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly limited.
- The preparation of financial statements in conformity with U.S. GAAP and our key metrics require management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes and amounts reported in our key metrics. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets, liabilities, and equity and the amount of revenue and expenses that are not readily apparent from other sources. Significant assumptions and estimates used in preparing our consolidated financial statements include those related to valuation
of inventory, valuationand recognition of stock-based compensation expense, initial and subsequent valuation of contingent consideration in businesscombinations,combinations or asset acquisitions, purchase price allocation for business combinations, valuation of assets acquired in an asset acquisition, estimates used in determining the useful lives of intangible assets, valuation of deferred tax assets, estimating the net realizable value of inventory, valuation of refund reserve, and estimates used in the capitalization of website development and internal-use softwarecosts, and judgments relating to impairment triggering events for long-lived assets.costs. Our results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors. - Currently, seven of our
nineten directors have been determined by our Board of Directors to be independent. We also have an independent compensation committee in addition to an independent audit committee. For as long as the “controlled company” exemption is available, our Board of Directors in the future may not consist of a majority of independent directors and may not have an independent nominating and corporate governance committee or compensation committee. As a result, you may not have the same protections afforded to stockholders of companies that are subject to all of the NYSE rules regarding corporate governance. - •advance notice procedures with which stockholders must comply to nominate candidates to our Board of Directors or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in our Board of
Directors, and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.Directors. - The market price of our Class A common stock has been and may continue to be volatile.
- The market price of our Class A common stock has fluctuated and may continue to fluctuate due to a variety of factors, including:
- •commencement of,
orinvolvement in, or public statements with respect to, litigation or governmental action involving us; - •negative publicity
andand/or short-seller reports that make allegations against us or our Facilities or Affiliated Medical Groups, or our Manufacturing Suppliers, even if unfounded; - Securities research analysts have and may continue to establish and publish their own periodic projections for us. These projections may vary widely and may not accurately predict the results we actually achieve.
OurThe share price of our Class A common stock may decline if our actual results do not match the projections of these securities research analysts. Similarly, if one or more of the analysts who write reports on us downgrades our stock or publishes inaccurate or unfavorable research about our business, our stock price could decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, the market price and volume for shares of our Class A common stock could be adversely affected. - Increasing consumer demand could further increase prices and/or constrain supply, and an evolving regulatory landscape could impact our ability to continue offering access to such products. For example, while we do not provide access to compounded tirzepatide, the FDA removed tirzepatide from its shortage list in October 2024, and then reconsidered that decision less than two weeks later, before finally removing tirzepatide from the shortage list on December 19, 2024. Additionally, all doses of semaglutide branded under Ozempic and Wegovy became listed as available on the FDA’s shortage list as of October 30, 2024. On February 21, 2025, the FDA resolved the semaglutide shortage, which could constrain our ability to continue providing access to compounded semaglutide on our platform once our current inventory has been sold.
- We also rely on selling our non-prescription products through wholesale partnerships.
- We first launched our services in 2017 and we have experienced rapid growth since that time. As a result, we have limited experience marketing our offerings and engaging customers at our current scale.
- We also expect to continue to evaluate and enter into discussions regarding a wide array of potential strategic transactions in the United States as well as in international markets.
- Additionally, these offerings on our platform are primarily manufactured by one supplier.
- A majority of the fulfillment and distribution of products available through our platform is done by the Pharmacies. While the Pharmacies operate exclusively in support of our business, we do not directly own XeCare or Apostrophe Pharmacy. We are in the process of transitioning both Pharmacies to wholly owned subsidiaries, which we expect to complete this year. Many states require advance notice and approval by the state’s board of pharmacy with respect to changes in ownership. These requirements could result in delays to a Pharmacy obtaining licensure in a given jurisdiction or disruptions to our business in the event of a change of control with respect to a Pharmacy, including in connection with ownership transitions described above, which could adversely affect our revenue or results of operations.
- The operations of the Pharmacies and MedisourceRx also subject us to extensive federal, state, and local regulation.
- In May 2024, we began offering access to GLP-1s, first in the form of compounded injectable semaglutide and in August 2024 in the form of branded (or FDA-approved) injectable semaglutide, as part of our weight loss specialty, and in September 2024, we completed our acquisition of MedisourceRx, a licensed 503B compounding outsourcing facility.
- Additionally, our compounded GLP-1 products are currently produced by 503B outsourcing facilities, which is permitted based on current shortages of FDA-approved GLP-1s, and we cannot predict when such shortages will be resolved. For example, while we do not provide access to compounded tirzepatide, the FDA removed tirzepatide from its shortage list in October 2024, and then reconsidered that decision less than two weeks later, after a compounding industry group filed a lawsuit against FDA. FDA ultimately reaffirmed its decision to remove tirzepatide from its shortage list in December 2024, but the lawsuit is ongoing as of February 24, 2025. On February 21, 2025, the FDA resolved the semaglutide shortage, which could constrain our ability to continue providing access to compounded semaglutide on our platform once our current inventory has been sold. Further, in 2024, the manufacturers of certain FDA-approved GLP-1 products requested FDA add semaglutide and tirzepatide to its “Demonstrable Difficulties for Compounding List”.
- Further, we recently announced two acquisitions: (i) a peptide manufacturing facility (and related assets) and (ii) a laboratory business. These operations will present risks and regulatory requirements to which we have not previously been subject once we have integrated the acquisitions and have commenced operations.
- These sanctions include criminal and civil penalties, imprisonment, and possible exclusion from the federal healthcare programs.
- The federal False Claims Act (the “False Claims Act”) generally prohibits anyone from knowingly and willingly presenting, or causing to be presented, any claims for payment for goods or services to third-party payors that are false or fraudulent and generally treat claims generated through kickbacks as false or fraudulent.
- Given our current operations and the current state of federal law, none of the Stark Law, the Anti-Kickback Law, or the False Claims Act should apply to our business.
- In the states in which we operate, we believe we are in material compliance with all applicable material regulations, but, due to the uncertain regulatory environment, certain states or federal agencies may determine that we are in violation of their laws and regulations.
- Further, we currently source the compounded GLP-1 products that we provide access to on our platform from our Outsourcing Facility and Manufacturing Suppliers that operate as 503B outsourcing facilities. If our Outsourcing Facility or any of the Manufacturing Suppliers that we use or any of our compounded products are found not to satisfy the criteria set forth in Section 503B by the FDA, we may be required to recall or stop offering such products, among other things, which could have an adverse effect on our business, reputation, and results of operations. Additionally, due to certain differences in the compounding requirements for pharmacies and 503B outsourcing facilities, following resolution of the shortage with respect to compounded semaglutide, compounding of GLP-1 products that we provide access to may need to take place in a 503A pharmacy capable of sterile compounding, instead of a 503B outsourcing facility, if at all, which could have an adverse effect on our operations.
- We do not have a nominating and corporate governance committee. The typical functions of this committee are addressed by our full Board of Directors.
- We have encountered and will continue to encounter significant risks and uncertainties frequently experienced by growing companies in rapidly changing and heavily regulated industries, such as attracting new customers and Providers to our platform, retaining our customers and encouraging them to utilize new offerings we make available, increasing the number of conditions that can be treated by Providers through our platform, operating our Facilities and the compounding and distribution of pharmaceutical products, competition from other companies, including online healthcare providers and traditional healthcare providers, hiring, integrating, training, and retaining skilled personnel, verifying the identity of customers and credentials of Providers serving our customers, developing new solutions, determining prices for our solutions, unforeseen expenses, challenges in forecasting accuracy, and new or adverse regulatory developments affecting the use of telehealth, pharmaceutical products or operations, including compounding, data privacy, use of artificial intelligence, peptide development, laboratory testing services or other aspects of the healthcare industry. Additional risks include our ability to effectively manage growth and process, store, protect, and use personal data in compliance with governmental regulation, contractual obligations, and other legal obligations related to privacy and security. If our assumptions regarding these and other similar risks and uncertainties that relate to our business, which we use to plan our business, are incorrect or change as we gain more experience operating our platform or continue to expand into the treatment of new conditions, or if we do not address these challenges successfully, our operating and financial results could differ materially from our expectations and our business could suffer.
- Any new offerings or product or service enhancements that we develop may not be introduced in a timely or cost-effective manner, may contain errors or defects, or may not achieve the market acceptance necessary to generate sufficient revenue. In addition, any failure, or perceived failure, by us to comply with any foreign, federal, state, or local laws or regulations with respect to any new offering or product or service enhancement could adversely affect our reputation, brand, and business, and may result in claims, proceedings, or actions against us by governmental entities, consumers, suppliers, competitors, or others or other liabilities that may require us to change our operations and/or cease offering certain products or services. Moreover, even if we introduce new offerings, we may experience a decline in revenue of our existing offerings that is not offset by revenue from the new offerings. In addition, we may lose existing customers who choose a competitor’s products and services. This could result in a temporary or permanent revenue shortfall and adversely affect our business.
- Additionally, we collect consumer data, including email addresses and phone numbers, to further our marketing efforts with such consumers. If we fail to adequately or accurately collect such data or if our data collection systems are breached or information therein is misused, our business, financial condition, and results of operations could be harmed. Further, any failure, or perceived failure, by us, or any third parties processing such data, to comply with privacy policies or with any foreign, federal or state healthcare, privacy or consumer protection-related laws, regulations, industry self-regulatory principles, industry standards or codes of conduct, regulatory guidance, orders to which we may be subject or other legal obligations relating to privacy, consumer consent, or consumer protection could adversely affect our reputation, brand, and business, and may result in claims, proceedings or actions against us by governmental entities, consumers, suppliers, or others, or other liabilities, or may require us to change our operations and/or cease using certain data sets.
- Use of social media and
celebrityinfluencers may materially and adversely affect our reputation or subject us to fines or other penalties. - If we are unable to continue to expand our marketing capabilities, we may not be able to effectively expand the scope of our platform to attract new customers and give our existing customers access to additional treatment options. Relatedly, if any of our marketing platforms significantly increase their advertising fees, our ability to expand our marketing reach will be greatly impeded. Any such failure could adversely affect our reputation, revenue, and results of operations.
- Our ability to achieve our strategic objectives will depend, among other things, on our ability to continue to enable fast and efficient telehealth consultations, maintain comprehensive and affordable offerings, ensure the successful operation of the Facilities, and deliver an accessible and reliable platform that is more appealing and user-friendly than available alternatives. Our competitors, as well as a number of other companies and providers, within and outside the healthcare industry, are pursuing new devices, delivery technologies, sensing technologies, procedures, treatments, drugs, and other therapies for the monitoring and treatment of medical conditions. Any technological breakthroughs in monitoring, treatment, or prevention of medical conditions, including through disruptive technologies such as artificial intelligence, that we are unable to similarly leverage could reduce the potential market for our offerings, which could significantly reduce our revenue and our potential to grow certain aspects of our business.
- Through our platform, our customers gain access to one or more licensed Providers, including physicians, physician assistants, nurse practitioners, and behavioral health providers for telehealth consultations conducted by video, phone, and/or store-and-forward technology. These Providers are employed by or contracted with Affiliated Medical Groups. We enter into certain contractual arrangements with the Affiliated Medical Groups and their provider owners, including an administrative services agreement with each Affiliated Medical Group for the exclusive provision by us of non-clinical services and support for the Affiliated Medical Groups. While we expect that these relationships with the Affiliated Medical Groups will continue, we cannot guarantee that they will. We believe that our arrangements with the Affiliated Medical Groups have been structured to comply with applicable law and allow the Providers the ability to maintain exclusive authority regarding the provision of clinical healthcare services (including consults that may lead to the writing of prescriptions), but there can be no assurance that government entities or courts would find our approach to be consistent with their interpretation of, and enforcement activities or initiatives related to, these laws and the corporate practice of medicine doctrine or similar prohibitions. If our arrangements are deemed to be inconsistent with any applicable government entity’s interpretation of a law or regulation prohibiting the corporate practice of medicine, a fee-splitting law, or similar regulatory prohibitions, we would need to restructure the arrangements with the Affiliated Medical Groups to create a compliant arrangement or terminate the arrangement, and we could face fines or other penalties in connection with such arrangements. A material change in our relationships with the Affiliated Medical Groups, whether resulting from a dispute, a change in government regulation or enforcement patterns, a determination of non-compliance, or the loss of these agreements or business relationships, could impair our ability to provide products and services to our customers and could have a material adverse effect on our business, financial condition and results of operations. Violations of the prohibition on corporate practice of medicine doctrine, fee-splitting, or similar laws may impose penalties (e.g., fines or license suspension) on Providers, which could discourage professionals from entering into arrangements with the Affiliated Medical Groups and using our platform and could result in lawsuits by Providers against the Affiliated Medical Groups and us. These laws and regulations are subject to change and enforcement based upon political, regulatory, and other influences, and have been the subject of a recent increase in focus and action by a number of state legislatures. More restrictive treatment of healthcare professionals’ relationships with non-professionals such as our company in the healthcare services delivery context could have a material adverse effect on our business, financial condition, and results of operations.
- Expansion into international markets is important for our
long-termgrowth, and as we expand internationally, we will face additional business, political, legal, regulatory, operational, financial, and economic risks, any of which could increase our costs and hinder such growth. U.S.trade policies continue to be in flux, and trade policies implemented by the second Trump administration, or the consequences of such policies, could have an adverse effect on our business.- As we continue to grow, we may be unable to continue to attract or retain the personnel we need to maintain our competitive position. In addition to hiring new employees, we must continue to focus on retaining our best talent. Competition for these resources, particularly for engineers with expertise in areas like
programming,machine learning and artificial intelligence, is intense. - The healthcare and technology industries are subject to changing political, economic and regulatory influences that may affect companies like ours. During the past several years, the industries in which we operate have been subject to an increase in governmental regulation as well as legislative attention and activity, and subject to potential disruption due to such regulation and legislative initiatives, as well as judicial interpretations thereof. While these regulations may not directly impact us or our offerings in every instance, they have and will affect these industries and may impact customer use of the services we offer on our platform. The healthcare industry in general is also subject to numerous foreign, federal, state, and local laws and regulations that carry substantial criminal and civil fines and penalties.
- Although we have adopted policies and procedures designed to comply with applicable laws and regulations and conduct internal reviews of our compliance with these laws, our compliance is also subject to governmental review. The growth of our business and sales organization and our
futurecontinued expansion outside of the United States may increase the potential of violating these laws or our internal policies and procedures. The risk of our being found in violation of these or other laws and regulations is further increased by the fact that many have not been fully interpreted by the regulatory authorities or the courts, and their provisions are open to a variety of interpretations. Any action brought against us for violation of these or other laws or regulations, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business. If our operations or those of the Pharmacies or Affiliated Medical Groups are found to be in violation of any of the federal, state, and foreign laws described above or any other current or future fraud and abuse or other healthcare laws and regulations that apply to us, we may be subject to penalties, including significant criminal, civil and administrative penalties, damages and fines, disgorgement, additional reporting requirements and oversight, imprisonment for individuals, and exclusion from the ability to participate in government healthcare programs, such as Medicare and Medicaid, as well as contractual damages and reputational harm. We could also be required to curtail or cease our operations. Any of the foregoing consequences could have a material adverse effect on our business and our financial condition. - Our use, disclosure, and other processing of personally identifiable information, including health information, is subject to federal, provincial, state, and foreign privacy and security regulations, and our failure to comply with those regulations or to adequately secure the information we hold could result in significant liability or reputational harm and, in turn, a material adverse effect on our customers, the Affiliated Medical Groups and/or their Providers, the Pharmacies, our revenue, our business, and/or our financial condition.