LifeMD, Inc. (LFMD) Earnings Call Transcript & Summary

Good afternoon, and welcome to the LifeMD First Annual Investor and Analyst Day. [Operator Instructions] As a reminder, this call is being recorded, and a replay will be made available on the website following the conclusion of the event. I'd now like to turn the call over to your host, Justin Schreiber, Chairman and Chief Executive Officer of LifeMD. Please go ahead, Justin.

Hi, everybody. I just want to say thank you to everybody for joining us for our first-ever analyst call. We're excited to have everybody here and excited to give you a thorough overview of what we think we can do for LifeMD this year. And my name is Justin Schreiber, I'm the Chairman and CEO of LifeMD. Also joined today by most of the senior level team. Just to give you a little bit of an overview of the agenda for the call, I'm going to start with a quick overview of the company. Those of you that have spoken to us and follow the company, I'll try to keep this brief, but we have some new people on the line today. So just want to give a very quick overview, then I'll turn the call over to Marc to talk about some of the financial goals. He'll be talking about some new KPIs as well. From there, we'll turn the call over to Alex Mironov, who's our President, who led the acquisition of Cleared, our allergy clinic. Alex will be giving everybody a detailed presentation of that transaction and why we're so excited for the business. We'll then come back at the end, and we'll talk about our Virtual Primary Care business, which is a really exciting part of the LifeMD story. And we saved the best for last, Dennis and Stefan, our CTO and Innovation Officer, will be giving everybody a demo of the Virtual Primary Care platform and our first native application launch, which native mobile app that we recently launched and -- so you all have to stick around in order to see that at the end of the presentation. During the presentation, we'll be making some forward-looking statements. Please read all of these cautions in detail and take note that these are forward-looking statements. To start, we'll go through -- I just want to give you a quick overview of what LifeMD is. We're a rapidly growing company in a very new space, which we call direct-to-patient telehealth. That means that we don't work through large insurance companies or with managed care or large employers, our business model is running an ad, going directly to a patient that we're running an ad for specific treatment or for primary care. That patient visits our website, they go through a comprehensive medical intake process. They're seen by one of our doctors. It's licensed in the state where they reside. If appropriate, as part of treatment of the patient, we can prescribe them prescription medications, offer them over-the-counter products, schedule follow-up care. But the important thing to note about our model is that we are part of a very small group of companies that are rapidly growing that goes directly to the patient and really is doing a lot to increase access to affordable health care. LifeMD has a 50-state digital pharmacy. We actually have 3 or 4 pharmacies now, 4 that we're partnered with, both mail order and compounding pharmacies. We've had over 500,000 patients and customers on the platform to date. We have a vertically integrated technology platform we've put a lot of work into over the last couple of years, and we'll talk more about that later. We have a 50-state affiliated medical group, which does all of our virtual consultations. Diversification is very important to the business. We now have 5 brands and multiple products across each brand, and that's something that you're going to see continue. And the business is at about a $100 million revenue run rate as of this quarter and still aggressively growing, and we'll talk more about those growth objectives in the presentation. Biggest question everybody wants to know about LifeMD is how we're different, especially from some of the other well-known players in the space. First and foremost, I mean, we take a lot of pride in our medical group, led by Dr. Puopolo and a team of physicians that's just incredible. I tell all my friends and a lot of investors, if you really want to know how great our company is and how great of health care -- how great the care is that we provide, download LifeMD app, go through a medical -- Virtual Physical with one of our providers, you'll be blown away. And that's kind of something that we want to see and we will see continue throughout many different indications and brands as the business grows. But this is some of the best intellectual property or the best intellectual property that LifeMD will have, and it will be a very big driver of lifetime value, which is something that many of you are focused on and so are we. We also have a lot of experience in direct response marketing. One of the things that Stefan and I always realized from day 1 of building LifeMD and even Conversion Labs before that is that if you don't control your patient acquisition and you don't have this mastered, you really don't -- you really can't build a business with long-term equity value. You can't do that relying on third parties. Sometimes you can fake it, if you raise enough money and you can just spend a lot of money on acquisition. But if you really want to be the best and you really want to control your unit economics, you have to own your media buying, you have to own your -- you have to understand direct-to-consumer advertising and you have to have technology that supports that. And we've been building this technology and acquiring this human capital since -- for years before we were even in the direct-to-patient telehealth space. And every single day, it's something that we continue to get better and better at, and it's a big part of why LifeMD has been able to build the size business that we have today with a much smaller amount of capital than many of our peers have had access to. Also, our technology stack, I mean, something -- this is something that we haven't really talked about a lot in the past. But our technology here is -- we've built a vertically integrated technology platform that starts with patient acquisition, goes all the way through to retention, ongoing care, connects with the pharmacy, a lot of new features for our primary care offering. But you can't build large and complex and diverse telehealth product offerings without technology. And there are very few companies in the world that have the technology platform that we have, and it's something that we'll continue to propel the growth of the business. Last point is our health care expertise. We will talk more about this in the presentation as well, but many of us have a deep experience in health care product world, especially Alex, who just joined as our President for [ Paolo ] company. And we really understand this and our long-term objectives for LifeMD as you're seeing with our acquisition of the allergy and asthma immunology business and you're seeing with our launch of primary care, and you're going to see with other partnerships and in-licensing initiatives of the business. We look at it as we proved out our business model with many of these -- in many of these lifestyle and dermatology indications, those businesses are great. They're going to continue to grow, but the future of LifeMD is going to be in the health care product world. And we think it's really important to communicate that like when you're investing in this management team, you're investing in a team that not only knows how to build brands like we've done with Rex and Shapiro and Nava, but we also understand health care. Quick overview. I touched on this in the first slide, but how our direct-to-patient experience works. It's very simple. We look at an indication, I'll take Rex for an example and treating erectile dysfunction. We run an ad. We run ads everywhere. Lots of different outlets online. We run offline on TV. We use direct mail. We have a call center that's extremely good with what they do and in prospecting and also in patient care. Patient -- we run an ad to treat somebody to offer health care for a particular indication or condition. A patient comes to our website. They go through a diagnosis and screening process where they'll complete a medical intake form that tends to be anywhere from 15 to 20 or 30 questions long, very thorough process. They upload an ID. They take a selfie. From there, our technology routes them to a physician that's licensed in their state, a synchronous or asynchronous consult will happen. And then following that, the physician will, of course, treat the patient, prescribe medications, if appropriate, recommend over-the-counter products, any follow-up care that's needed, and then those medications or over-the-counter products are shipped directly to the patient from our pharmacy. Focusing a little bit more on our technology platform. The biggest thing I want to emphasize here is we built this platform to handle a very big portfolio of unique direct-to-patient telehealth offerings. So it's a backbone essentially that can handle all of these different condition-specific brands that we've built like Rex and Nava and Shapiro, Cleared and a lot of others to all of our primary care indications and different clinical offerings through the LifeMD mobile and desktop platform. But that kind of flexibility is something that we built into the platform from Day 1. And it's an important part of what we can do with the company in the coming years. Of course, it's built for 50-state telehealth, also could be applied in international markets as well. We've had multiple inbound requests from credible groups in Asia and India and other parts of the world that are interested in licensing the platform and collaborating with us. We have some great partners, which will come back to the primary care side and we're integrated with Quest Diagnostics for lab. We're also going to be integrating with LabCorp. Axle Health is a technology partner that offers in-home phlebotomy. Particle Health is a platform that offers -- that enables us to pull up medical records for 250 million Americans. That's a database that's been created that helps our doctors treat patients better and also gives patients the ability to own their medical records on their app. And then Prescriptive is a pharmacy intelligence platform that we're also working on integrating into our platform which also includes a prescription discount card, which will give LifeMD patients even greater discounts on prescription medications at most pharmacies in America. Also, obviously, compliance is something that's very important, and we've thought that out and incorporated a lot of different monitoring tools and other mechanisms to ensure that our doctors are providing the right quality of care and everything that's happening in the platform is fully compliant. We currently have 5 brands in the portfolio. Rex is a digital health clinic for men. It's mostly -- currently, it's mostly offering treatment for erectile dysfunction, hair loss and some other sexual health issues. Shapiro is a telehealth offering for male and female hair loss, which also includes a patented line of over-the-counter products. Cleared I'll skip because Alex is going to tell you all about that. Next, Nava is a teledermatology offering. Super excited about Nava this year. We're days to a week or 2 away from really launching our patented over-the-counter product line in conjunction with prescription treatments for things like acne and anti-aging. And I'm very excited about this. That OTC product line that we in-licensed is extremely differentiating. It's very popular with patients and customers that have been on it. And I think it's going to be an awesome -- turn into a really awesome brand and a big part of our growth story. And then LifeMD, we'll talk about later, is our cash pay Virtual Primary Care offering, which we'll get back to in the next section of the presentation after Marc. Just to talk a little bit about our growth strategy for this year and beyond, the number that we really focus on internally is how can we build a $250 million to $300 million revenue business by 2025 or sooner with at least 25% plus adjusted EBITDA margins. And we do that kind of in 4 key areas that we see today, and these are also 4 areas that are very important to us for this year. The first big objective is growing our existing portfolio of brands and especially those that are condition-specific. So right now, that's Rex, Shapiro, Nava and Cleared. We want to obviously continue to see strong retention on these brands and as we've guided previously, we want to see at least this 1.5 to 2 LTV-CAC in year-1 and approaching at least a 3 or greater on a 3-year basis. And we think there's a big opportunity to just continue to like add new products into those brand new treatments and really perfect the cross-sell and something that we've seen some good progress on this quarter, but we can still do a lot more to grow a lot of our existing brands in the coming years. And I think that's something that really just want to put emphasis on. Like we're extremely confident internally that our existing, call them, condition-specific brands that are in these lifestyle and dermatological areas that will -- we expect very aggressive growth out of these brands this year and even in the next couple of years. Scaling Virtual Primary Care is probably the biggest priority, and I think one of the most important things that we need to do this year as a company, and we will do. I think Virtual Primary Care is some of the highest value revenue, if not, the highest value revenue in telehealth. And it's going to be the biggest driver of lifetime value, and that was where the -- my initial thinking was when we first started building this a year or 1.5 years ago was, we're acquiring so many patients every day through our condition-specific offerings. Many of these people, at least, 1/3 to half of these people don't have a great relationship with the primary care doctor or any relationship. Many of them tell us they don't have any relationship with the primary care doctor. So being able to offer them this amazing virtual physician as well as like this cash pay -- discounted cash pay pharmacy offerings and imaging and diagnostics. So it's a very big opportunity. And I think that once these patients interact with our physicians, they're not going to go anywhere. Another big priority is eliminating our non-core asset, WorkSimpli, which -- we love this asset, it's a great company. Sean Fitzpatrick who is the founder, has done an amazing job at just creating something very, very valuable over the last couple of years since we made the initial investment. But we understand that it's important to be focused as a company. And so our plan is to divest to that asset in the first half of the year. And then Marc will talk a little bit more about this in his section of the presentation, but really reinvest those proceeds into the telehealth business, which we still believe is just a very big opportunity -- the biggest economic opportunity for the company in the coming years. And then the last thing here is the B2B and pharma partnerships and executing on this strategy, similar to the several partnerships that came in through the acquisition of Cleared. This is a big opportunity for us. I also see a lot of other opportunities, especially with the LifeMD platform that we now have live, not only with pharma, but across the traditional like health care product world. So we're talking to -- we're in the middle of a very exciting opportunity in the diagnostic space that I think should come to fruition. And just to be honest, there's opportunities everywhere, right? I mean, the platform that we have now that combines diagnostics with physicians across all 50 states and pharmacy is really just the perfect platform for doing lots of different types of partnerships and other in-licensing types of opportunities in the health care product world. And so I think this is going to be also -- other than the Virtual Primary Care business scaling, I think some of the biggest catalysts for LifeMD are hopefully going to be some exciting deals that we do with health care product companies. Even in 2022, I'm confident that we can get some of these things done. With that being said, I'll turn it over to my colleague, Marc, to walk you through the financial section of the presentation.

Thanks, Justin. As many of you know and those that are new to the story, LifeMD remains one of the most consistent and significant growth companies in the telehealth industry. We've enjoyed over the last 3 years compounded annual growth rate exceeding 170%. We've also been extremely consistent in our growth with 11 consecutive quarters of sequential growth as of the third quarter, and that trend we expect to continue in the coming quarters and coming years. Additionally, we've done a lot of work as we built out the company's infrastructure to be able to handle a company with multi-hundred millions dollars of revenue, improving the company's gross margins and driving those to record levels, which we expect to continue to see improvement. For FY '21, we're estimating approximately an 81% gross margin with the potential to continue to increase those gross margins as we gain more scale, both from our pharmacy infrastructure, the vertical integration of our distribution capabilities and more scale from our physician network. So Justin talked a little bit before about WorkSimpli, which is the company's non-core subsidiary. For for those who are less familiar with WorkSimpli, LifeMD owns 85.6% of this asset. It's a rapidly growing direct-to-consumer work in document services company that historically has played mostly in the PDF market. More recently, the company has diversified and launched products in both the digital resume and digital signage market, which we expect to continue to be our growth drivers for WorkSimpli this year as well as a accretive to the valuation of the business as we look to solve them in 2022. They have over 100,000 subscribers worldwide and actually about half of those subscribers are global, also in very well diversified business with about $25 million of revenue as of FY '21, which was a 268% rate of growth versus the prior year. As we've mentioned before, while this is a phenomenal business, it is non-core, the company's telehealth focused and we believe is a meaningful source of not giving capital back to the company. We plan on executing a sale this year, and we're actually in discussions as we speak to hire a potential adviser to lead those -- that sale process. As far as the use of proceeds, we anticipate definitely reinvesting back into additional growth in telehealth, likely through either inorganic or launch of new verticals, which in telehealth and possibly additional investment for shareholder capital return initiatives, more of which will provide investors with update and as we look close at consummating the sale. So LifeMD has launched a company that went public in the fourth quarter of 2020 with very minimal capital to a company that we believe is more than adequately capitalized to reach adjusted EBITDA profitability by the fourth quarter of this year and become self -- being able to be self run without the need for any additional capital beyond that. So we expect to end 2021 with approximately $40 million of cash on the balance sheet, a little bit north of that. From an estimated potential proceeds from the WorkSimpli sales, we've done some initial preliminary work on it, interviewing potential advisers. We would expect LifeMD's portion to be in the range of $40 million to $80 million with probably around $40 million to $60 million to $70 million being the most likely outcomes. That would put us in a position of having $80 million to $120 million to weather a rapidly declining cash burn this year. And post sale, we believe the company will be in a position to have north of $50 million of cash on the balance sheet that will be available for additional investment back into telehealth as well as some potential shareholder return initiatives. So this is the first time we're sharing some of the companies' more forward-looking information. As Justin mentioned before, we have the goal to get to $250 million to $300 million of revenue with 25% to 30% adjusted EBITDA margins by 2025 or possibly sooner. For this year, in 2022, we've guided $142 million to $148 million of our revenue this year, of which about $115 million-ish would come in the form of telehealth revenue. That would translate to about a $14 million to $20 million loss for this year. However, we expect to reach adjusted EBITDA profitability by the fourth quarter of this year. And given the fact that over 90% of our revenue is recurring in nature and we have a highly leverageable business model with a lot of ability to scale profitably, we expect to turn to consistent full-year profit starting in 2023 with about a mid-single digit to possibly low double-digit adjusted EBITDA margin as a telehealth-only business doing in the range of $155 million to $175 million in revenue next year and then scaling over the next couple of years to $250 million to $300 million with adjusted EBITDA margins of 25-plus percent by 2025. And we also expect to achieve fully diluted EPS profitability by 2024 when factoring in noncash charges like stock-based compensation expense. As far as our cash flow model long term, what we have here is our projected cash flow model of 2022 through 2025. In doing so, we've also taken the midpoint of potential proceeds from the WorkSimpli sell as well as some continued scaling in the investment of the business through capital expenditures. The above chart does not include if we were to do an additional inorganic acquisition of new business during that time, but clearly demonstrates what we've been communicating and where we see the business going and that we are very well capitalized to get to profitability and then some -- and become a long-term self-funding cash flow model capable of reinvesting back into accelerating the growth of our core telehealth business. And where will a lot of this growth come from? So we've bridged out where we see a lot of the growth moving from the $93 million of consolidated revenue to finish 2021 with to the $250 million to $300 million of consolidated revenue by 2025. So as we've communicated before, we plan to divest WorkSimpli, which we take at current results about $25 million of revenue out of the company. However, our core lifestyle businesses, which are some of the oldest brands that we have, Rex, Nava and Shapiro, we expect to contribute more than $100 million of additional revenue between now and 2025 is they're all very consistent growers with a lot of potential market share gains ahead of them. Allergy asthma which comes from Cleared as well as new indications, we expect to contribute an additional $40 million to $60 million between now and 2025 with the potential for that number to be greater depending upon how aggressive we are in that expansion. And then Virtual Primary Care growth. While it's very early on, we expect this to become a meaningful business also on our way to achieving our goal of $250 million to $300 million by '25. And lastly, one of the things we've talked a lot about is continuing to diversify our telehealth revenue with very strong unit economics. Today, 73% of our revenue comes from the 4 lifestyle businesses and 27% as of 2021 came from non-core subsidiary that we'll be divesting. By 2025, we expect that balance to continue to become more and more balanced with more traditional health care, 60% being more towards some of the legacy lifestyle indications, which still have a lot of birth behind them and then 40% coming from the mix of Virtual Primary Care as well as more therapeutic forma-based indications. For those that are new to the story, we are very laser focused on our direct-to-consumer direction-to-patient economics. We average about 170 to 190 cost per acquisition across our telehealth portfolio, as we mentioned, 80-plus percent gross margins. First year ARPU, about $400, which gets you to a 1.5x to 2x return in the first year, which will translate to an approximate 3x or greater return on a 3-year basis. And as Alex will speak a little bit more in the Cleared section and Justin alluded to earlier, we see a lot of opportunity to work directly with pharma, some of which we're already doing through the Cleared acquisition. And these contracts carry with them pretty significant values that we think will be meaningful contributors to the company's revenue and profitability going forward. And with that, I will turn it over to our President, Alex Mironov.

Hi, everyone. This is Alex, as Marc mentioned, President for LifeMD. Very excited to talk to you about our recent acquisition, Cleared, which is what we think is very synergistic, both in strategy and capabilities. What is Cleared? It's the best destination for treatment of allergies and asthma starting from in-home testing, diagnosis by our Board certified physicians, ultimate recommendation and efficient delivery of medicines to the patient's homes or pharmacy of their choice. Cleared offers personalized treatments for patients based on their diagnostic results and needs and ultimately serves in a really big total addressable market. Allergy and asthma is quite robust at close to $14 billion if you round it up for a total addressable market. And we have acquired the company in January 2022. Just highlighting slightly on what Cleared's offerings are. It's a one-stop shop for allergy, asthma and immunology. The current portfolio as we see, has been some of it recently launched and evolved over the last 12 to 18 months, but it's rapidly changing. And quarter-to-quarter, you should expect to see rapidly changing portfolio and robustness of the portfolio overall in the same category. Now again, just -- again, highlighting the total addressable market population opportunity. Why do we like it? It's $75 million in American software from asthma and allergy. It's close to 1 in 3 Americans, a very large medicine spend $11 billion. And highlighting on the services side, annual visits equate to 24 million or close to 2.5 billion in annual spend on business by the allergies. That's a rapidly growing market, and then we think it's rapidly changing and ready for a digital transformation with acquisition like Cleared. Now highlighting some of the strategic rationale. Two companies, as you heard about LifeMD from Justin and Marc recently, Cleared in itself has been rapidly expanding since our initial launch with 15-plus thousand patients, operates a 50-state physician and pharmacy platform. And what we're really doing is highlighting the LifeMD platform from our strategies, our tech, our end-to-end capabilities that we can accelerate both companies together. Two independent companies have established a lot. But together, we're going to accelerate that growth and really accelerate the expansion of the allergy and asthma field with reaching more patients and with more medicines. Now the expansion and the additional into the allergy space, we have new team members, which we think are amazing that are well positioned to execute the incredible market opportunity. We have Dr. Payel Gupta, who is a top leader in allergy and asthma space. You can see our background here; James Taylor, he's got great experience and expertise in over 15 years with pharma, dealing with pharma clients; and Ryan Rockefeller, both on the venture investing as well as tech and media investing. And a quick highlight of my background, but I think you guys all know me from our prior presentations. Now let's talk about -- this is how we see the expansion and the value we're bringing in and 2 companies in itself have been very successful direct-to-patient approach. We've mastered it and hopefully accelerating with our end-to-end platform. And what we like about Cleared, Cleared has done a business case with a pharma partnership that we love. So what we're doing is bridging the B2B to DTC or direct-to-patient approach. We're going to highlight and bring more patients with more innovative therapies. We're going to in itself, right, also offer the opportunity for pharma companies to bring innovative therapies to those patients that would never be seen. That's kind of the biggest role in this Cleared as well as LifeMD opportunity. And again, the expertise, 1 plus 1 does not equal 2, it's really 3 plus, that's what we're creating here. The quality of life is also going to be approved by more patients being reached and by better therapies. Quickly touching on the deal structure. Well, we think we've put together a win-win opportunity for both as the numbers and they speak for themselves -- as the numbers are increasing in terms of revenue, and we're well positioned to execute on them and far beyond, it's both the management team from Cleared as well as their shareholders as well as LifeMD. The bigger the opportunity, the bigger the payout for them, and it's well-structured in a derisked fashion. And we welcome additional entrepreneurs, all the younger companies to partner with us in a similar fashion. With that, I'll turn it over to the next presenter.

Okay. Hi, everybody. I'm back again. This is Justin Schreiber. Can I just talk for a few minutes here before the demo about our objectives for the Virtual Primary Care offering and give more details on what we've built. And just to reiterate what I said earlier in the presentation, I truly believe that the Virtual Primary Care offering that we have in LifeMD is going to become the biggest part of the LifeMD story as we really execute on this, this year. I think many of you saw in the past, I think it was just last week, Teladoc started to talk about how they're spending more in the space. Google and Apple are also working on Virtual Primary Care offerings. Amazon, of course, everybody knows about. I think this is going to become the most talked about part of direct-to-patient telehealth. And I really love the way that Life MD is positioned in this space. We've put a lot of thought into it. It's really well aligned with our expertise as a company. So what is the offering? At launch, it's a -- we're doing this across all 50 states similar to our other telehealth offerings. It's going to be a cash pay subscription-based primary care offering. There are going to be 2 options at launch, a $15 per month kind of platform fee which gives you ala carte access to a doctor at $49 a visit, cash pay, no insurance needed. In my opinion, for the quality of care that we're offering and the quality of doctors that we have staffing this platform, this is the best value in health care in the United States. Nobody else is offering Virtual Primary Care at this price, especially the kind of quality of physician that we're offering. And then the second option is going to be a $99 a month unlimited primary care platform, which will include an annual virtual physical, your lab work and then really unlimited access to a doctor or a medical provider with obviously some reasonable limitations. We've staffed this offering. We have physician staff through our affiliated medical group from 8 a.m. Eastern to 11:00 p.m. Eastern Monday through Friday, and then we have weekend hours as well. So patients that are on the platform are going to have really access to a doctor almost any time. We have a 50-state nursing and triage group that's also going to be working from 11:00 p.m. at night until 8:00 a.m. So patients will be able to access the provider 24 hours a day, but our doctors are going to be available basically from 8 to 11 only. We'll talk more about this in the next couple of slides, but it's -- and I mentioned this earlier, but the platform is a very flexible platform and it doesn't just have to offer general primary care. And what you're going to see is a lot of different offerings and partnerships built around the LifeMD platform. And then to give you an idea of some of the things that we're offering, again, it's virtual care, physicians across all 50 states, Diagnostics, Quest, LabCorp, in-home diagnostics, prescription medications integrated with our pharmacy and then also a lot of other in-home tools and wellness solutions that we're currently working on. This is a bit more of a detailed overview on what we're treating and the platform overview. I think we have one of the most robust and broad virtual care offerings out there, again, that I've seen, haven't looked at all of the offerings. But certainly, when I compare what we treat to some of the bigger Virtual Primary Care providers, we have a much broader offering. It's worth pointing out that our -- we've put an enormous amount of work and thought internally into building out virtual protocols for treating hundreds of different conditions in a virtual environment. And I think that that's just -- it's very valuable, and it's something that anybody else is looking into the space really has to put a lot of time into. So current capabilities at launch, which you're about to see a demo of 50-state async, audio and video consults, all of the routing, all the different permissions for MAs, for nurses, for doctors, for administrators, like everything else, we've put a lot of thought into building this in a very robust way that will enable us to scale it. I mean, we don't want something that we can do 100 or 200 consults a day with. We want something that we can do 10,000 consults a day with. And we believe that -- I've asked Dennis, our CTO this in a million different ways and his response and Dennis comes from the pharma world and has built some successful applications that has been used by a lot of patients. And we feel really good about this platform being able to handle a lot of patient volume. We've integrated Diagnostics with Quest, and we have LabCorp also on the horizon there to integrate in the platform, it should be at some point this quarter or early second quarter. And then we have an e-prescribing capability right now that's built so that our physicians can, of course, send prescriptions to most pharmacies across the country. Plan capabilities, as I mentioned before, we really want to turn on the in-home phlebotomy offering. We think that's very, very helpful to patients and in demand by patients. We're going to be launching a prescription discount card program, which will give to all of our patients, whether they're on the $15 or the $99 per month offering in the coming, I would say, 30 to 60 days. We also are launching a symptom checker, which we'll see a demo of shortly, but very, very -- we actually licensed this from a third party to put a lot of work into building what is the best and most thorough way to triage patients for virtual care and to help people even without seeing a doctor to understand whether they have symptoms that require them to see a doctor. So that's something we're expecting to launch in the coming 30 to 60 days as well. We're looking at other discounted imaging programs as well as the mental health partnership, which are 2 other areas that we do plan -- 2 of the things that we plan to offer through the platform, but currently are not live. We've mentioned before, wearables. I'm a big believer that wearables are going to play a major role in health care and especially preventative health care in the future. And we are -- we have spoken to some of the top companies in the wearable space. That's something that we want to integrate or either integrate and partner with one company or just build the capability to basically enable any wearable to connect with the platform. And then we'll also be launching a family plan most likely in the second or third quarter so that it's easy for and obviously discounted for families to put their spouses on or their kids or even that kind of also ties in with the referral program. Look, I want to just highlight and this is something that I think we've talked a little bit about, but we believe that this offering that we've built just really kind of fits into like a lot of the macro conditions in the U.S. health care market. 53% of Americans are now on a high deductible health plan. The average deductible for an individual is $2,000. For a family, it's $4,000. It's -- there's a big need right now across 50% or 60% of Americans to have access to affordable health care that's transparent where they don't even need to take out their insurance card. And what we're doing at LifeMD is offering them an incredible doctor that they can use whenever they need to without having to worry about how much they're going to be charged or what surprise bills they're going to get, we're offering them discounted medications at their local pharmacy or through our pharmacy we're offering them. We have a really exciting partnership that we're working on, which is not done yet with a 38-state imaging provider that can offer extremely discounted prices on many different types of MRIs and x-rays and the most common imaging needs. We think our symptom checker and other in-home tools also just play into like helping people stay healthy in an affordable or even free way, telling them -- helping them to understand what health care they need and do they need to see a doctor. So we're really excited about this offering. We've done a lot of market research on it. And we think that depending on how much you access -- depending on how much you need a doctor or what chronic conditions you have, the $15 plan or the $99 plan might be appropriate for you. But these -- this offering is priced. It's a price that it's affordable for almost any American to access incredible health care. Talk a little bit more about the growth strategy for LifeMD. So 3 key areas we want to highlight: one, we're going to be a big opportunity in cross-sell. We have over 30,000 new patients a month typically and growing through our -- with our other brands. I expect this number to grow a lot this year. As I said, the majority of these people are underinsured or on highly deductible health plans, at least, 1/3 don't have a primary care provider. These people need and want what LifeMD is offering through our Virtual Primary Care business. And we're very confident that we're going to move some percentage of those patients from our, call them, condition-specific brands over to a long-term primary care relationship with a doctor. Obviously, this is our -- there's 0 acquisition cost on these patients. And guess what? Like there is no greater way for LifeMD to build loyalty among those patients and drive long-term lifetime value. That's why it goes back to the prior bullet plan. This revenue is the highest value revenue in telehealth, and that's why we've put so many resources into building this platform. And that's why we're committed to making sure that it's very, very successful. We're going to also run national direct-to-consumer campaigns around accessing this incredible affordable health care without needing to show an insurance card. It's a new way of doing things, and we're going to use influencers and we're going to use all of our marketing expertise and our technology platform to show Americans that there's a new way to access health care and its LifeMD. Also, like one thing I just really want to emphasize is the LifeMD platform doesn't just have to be used for virtual general primary care. There's also enormous -- there's enormous opportunity for the platform around treating different conditions whether there are things like weight loss, whether there are things like Cleared is doing in the allergy space, any condition and there are many of them where you require a physician, prescription medications if appropriate and a diagnostic or even just a diagnostic, right? There's countless ways to use this platform to help Americans access better health care at a more affordable price and very excited to watch the LifeMD platform be a part of that movement. The last thing I'll mention is there are a lot of other B2B and partnering opportunities that we're excited about with this platform. I think I mentioned this a couple of times in the presentation already. We also are in some -- we have some dialogue ongoing with small payers. I don't think we're talking to any employers yet, that's intentional, but there certainly are opportunities there for this platform. Nonprofits and disease foundations we're doing -- we're already doing some work with nonprofits that have an interest in using the platform and LifeMD is also looking at how we can kind of get back to the community using the platform. So that's something that you'll hear more about this year. And then there are a lot of media properties out there as well, which have a lot of inbound patient flow that are researching different clinical conditions and things to do with their health. And so we think there are some really interesting partnerships there. But just to say it one more time, this is a massive technology lift for LifeMD. I'm really proud of the tech team for what they were able to build and launch is very thoughtful. It was built for scale. And I'm really excited just to watch this to part of our business grow and you should be too. And it's going to be a great part of the story. And most importantly, like it's going to do a lot of great things for Americans that are currently struggling to access primary care. It's one of the biggest problems with our health care system, it's something that people don't talk about. And I'm really, really excited for LifeMD to be part of solving that problem. So that's it for me. To close, I'm going to -- we're going to -- we have a prerecorded demonstration from Stefan Galluppi, our Chief Innovation Officer; and Dennis Wijnker, our new Chief Technology Officer, that we will play, that will show up a lot of the features -- technology features of the BPC platform. And then following that, we will go to our analysts for questions and then open it up to anybody else that's on the call for questions.

I'm Stefan Galluppi, Chief Innovation and Marketing Officer, and I'm here alongside Dennis Wijnker, our Chief Technology Officer, to present our Virtual Care Platform and show off the technology that makes it really special. So when we were conceptualizing what we wanted to create with our virtual care platform, we wanted to build an incredible health care experience. And when we say an incredible health care experience, we mean, one, not only for our patients, but also for the amazing doctors who treat on our platform. So let's start with the patient experience. Our platform is accessible both as a web app for simple desktop access from the comfort of home or as a mobile app on both iOS and Android for easy on-the-go access to your doctor. As you can see, once you log in, you immediately see a lot of information you'd want to see when seeking medical help: messages from my doctor, access to the front desk, information about my doctor, information about upcoming appointments, even my labs and prescriptions. So let's go ahead and book an appointment with My Doctor, Bonita Segal. Our appointment process cuts out a ton of friction most people face when trying to see a doctor. With just a few clicks, not only have I booked my appointment with my personal doctor, I've already informed them of what I'm looking to achieve with my visit. Also, by the time of my visit, my doctor will already know who I am, thanks to our comprehensive patient onboarding experience and our technology platform, which automatically pulls in my medical records, which Dennis will touch on this shortly. This saves precious time for both our patients and our doctors. Let's take a tour of the dashboard real quick. We designed the LifeMD Virtual Primary Care platform under the core belief that health care should be simple and accessible. We've built a clinical care messaging system to allow patients easy, direct and organized communication with their doctor and clinical care team. Our front desk is a task management ticketing and triage system that connects patients to a dedicated support team and clinical care team for things such as support, lab follow-ups and technical support. Looks like I actually just received a notification from Dr. Segal that she's in the waiting room. So let's go ahead and jump over there.

Hi, Stefan.

Dr. Segal. How are you?

I'm good. How are you?

Doing great. Yes, I just wanted to reach out because I'd like to renew my prescription of Doxepin. It's worked great for me in the past and not a refill. So just wondering if I could get a renew on my prescription.

Absolutely. I'm glad it's been helping you. And I'm looking at your chart right now, and I see that you're due for your annual set of labs. Shall we order that for you?

Yes. I would love that.

I'm going to put a message right now for you to remind you to do your labs fasting, maybe within the next 5 days.

Okay. Great.

I'm going to put some labs in your chart right now. Okay. Everything seems to be all set on my end. Do you have any other questions for me?

No, all good. Thank you. Have a great one.

Take care. You, too. Bye.

With the LifeMD platform, managing prescription orders is a simple and straightforward process, allowing patients to easily meet with their doctor, synchronously through video or asynchronously with chat messaging within the platform when or if they need to refill a prescription. And we also handle post-visit follow-ups which are simpler than ever before as the LifeMD platform allows doctors the ability to create new channels of communication for well-defined and thorough follow-up communication. We also facilitate post-visit labs. Our labs are simple from start to finish. Once ordered by a physician, LifeMD patients can view their Quest lab orders and easily see their results once completed, all within the platform. And this is only the beginning. We'll soon be adding more capabilities such as in-home phlebotomist visits and at-home testing. With that, I think this is a good spot to pass it on to Dennis, our CTO.

All right. Stefan, thank you so much for taking us through the patient experience. I'm really excited to show you some of the doctors' experience because I think we've built something amazing, something that can help them do their job better, faster, smarter, ultimately spend more time, more quality time with their patients. Also, to protect our patients protected health information, you're looking at a demo instance that we've cloned with synthetic data. So let's take a look at what they see. It starts with the dashboard. They can easily see what's on the agenda, all the upcoming appointments, all the patient onboarding sessions. They can easily see and respond to new messages, do post and pre-concept follow-up, like, are there any new lab results that need to be ordered. And the lab results themselves coming back or imaging results, they can sign off and review them here. As I go through our clinical care platform, I'm going to be flipping through several views of the various clinical and app in roles from our medical systems, nurses, doctors and our patient care team. Now let's take a look at some of the robust patient care tools that doctors have access to in our platform. Clicking on the patient gives them a quick overview, shows them when the next visit is and then they can drill into the treatment history, look at the latest on the patient chart, review any staff notes that might be relevant for their next visit and then there's messaging. You'll notice the messaging is organized in separate channels because it might be challenging to discuss all of the patients' concerns in one channel. So any medical staff can easily create a new channel to address a patient's separate medical concerns. We can only do this because we built the robust and proprietary tech platform. Our engineering team built something that is configurable and scalable. So it can grow with our business, not just from the perspective of handling more loads or more data but also being able to pivot and change depending on the needs of our care teams and our direct marketing teams. We created the really powerful back ends. It's secure. It allows you to configure lots of different things like the different levels of people and medical care team, doctors, nurses, medical assistants, so we can triage and treat patients effectively. And medical care is more about than just about a consult or writing a prescription, there's many different facets to it. So if we wanted to branch out in a new treatment area, we already have the capabilities to do it. You can add a new appointment type and define what kind of diagnostics or consults or therapeutics are required. There's also automations. They're used to notify patients when their appointment is due, but also they can automatically complete tasks or sub-tasks or add notifications for our team. Again, saving the time, we can really dial in the operations efficiency and allow our team to spend more time with our patients. Let's give a well-deserved shout out to our amazing integration partners that give us access to incredible telehealth APIs like Elation Health. We can offer seamless EHR, electronic health record, for doctors and patients. Not only that, they're working on their API, always improving it. So soon, we'll have a true headless EHR that allows us to conduct any interaction or any kind of operation within our LifeMD platform. And then Particle Health gives us an edge because we can tap into the network of 270 million American patients and pull in their medical records so we can automatically populate in the Elation patient chart, vaccinations, conditions, any kind of drug allergies, existing allergies. By the time the doctor comes in, they have it all at their fingertips. These features are just the start of our platform, and we're excited to show you what we have cooking in our pipeline. To do so, let me turn it back over to Stefan to elaborate. Stefan?

Thanks, Dennis. Like Dennis said, this is just the beginning for our Virtual Primary Care and technology platform and the best is yet to come. We have a lot of new integrations and features slated to roll out this year. Most of the time, Googling symptoms is a nightmare. Personally, I put in coughing and tiredness only for the top result to tell me, I could potentially have lung cancer. This won't be the case anymore, thanks to our symptom checker. Now patients will be able to accurately describe the specific symptoms they are experiencing. With the symptom checkers AI-guided medical intake form, this will give doctors and clinical care team members on the LifeMD platform, even further enhanced patient insights alongside an AI-guided preliminary diagnosis and provide patients an incredible telehealth experience. This is a major breakthrough for both patients and doctors, allowing patients to feel comfortable describing the specific concerns they are feeling and providing doctors the most accurate details. We believe the symptom checker will provide us the most advanced triage platform in any telehealth company today. Beyond the symptom checker, we will soon have prescriptive health, which will enable our perception coupon program, Axle Health, for in-home phlebotomist visits and diagnostic lab work and the integration of health tech wearables for ongoing patient health monitoring and guidance. We are only scratching the surface of what's possible with telehealth, and we believe our technology will be the foundation that gives us the edge in building the most robust end-to-end destination for telehealth, one that supports all the parties involved in delivering incredible health care. Thank you.

[Operator Instructions] So our first question comes from David Larsen of BTIG.

I'm going to sort of get right to the heart of my question, Marc, 25% adjusted EBITDA margin by 2025, that looks great. It looks like around 500 basis points of expansion annually. In your mind -- in yours and Justin's mind, where do you hope or expect most of that revenue growth to come from? And the more specific you can be, the better.

This is Marc. As far as the revenue growth, one, the biggest piece has got to come from the existing brands today. We see a ton of growth ahead within some of the lifestyle category. Rex is already a very significant business, but it's in a massive addressable market and is consistent 15-plus sequential quarter-on-quarter growth rate in rebills. Nava, obviously, has a lot of room to run. Shapiro has been a pretty steady grower. So that's going to be one source. Secondly, the continued revenue coming from new businesses, like Cleared as well as some new indications that we'll likely launch over the next few years. But even without those, we still have a lot of growth ahead and obviously, Virtual Primary Care. As far as getting to those adjusted EBITDA margins, as we've said time and time again, we started to demonstrate in the third quarter call, and we expect to continue to demonstrate as we move forward. The company's advertising expense was almost 100% discretionary, and there's obviously being driven by us to continue to grow the business and the percentage of our revenue that comes from rebuilding the existing subscribers continues to grow pretty significantly as we move and get bigger and gain more scale. So we expect to continue to see meaningful leverage in the reduction of advertising spend as a percent of sales with relatively modest growth in the absolute dollars and that's been spread over, obviously, a much more significant growth in revenue. That's number one. Number two, most of the company's G&A costs are associated with people and some tech G&A. And those are very leverageable costs where we're going to continue to obviously invest in people and tech infrastructure as we grow the company. But the rate of that growth is going to be substantially less than what the rate of the company's revenue growth. So that too will contribute. And then lastly, we do expect some modest improvement in gross margin as we gain more scale. But the most meaningful improvement in the company's bottom line is going to be continued revenue growth with a lot coming from rebills and the significant reduction in sales and marketing spend as a percent of sales as well as general G&A as a percent of sales.

And I think I saw on one of your slides, 90% of the revenue is recurring. Did I see that correctly in -- and what does that mean? Does that mean once you have a patient, they tend to reorder every 90 days or every 180 days?

Yes. Yes, it's not even reorder. They're on a recurring subscription plan with us. So it's basically they continue to get their prescription of OTC product for as long as they're staying with us until they cancel and they are auto-billed and then order to ship that supply. Today, we're doing about half of our volume in multi-month orders, which we think is pretty good, and we've had a lot of success there. So that's one of the reasons why we've been in -- really, the overarching reason why we've been able to be so predictable that our revenue can continuously have sequential growth.

And then Alex or Justin, can you maybe talk about your expectations for the over-the-counter product line with Nava and also the primary care business? And then for Cleared, how much of those revenue items are included in the $115 million for health care product revenue for fiscal '22 since I think there are fairly recent launches -- and sort of what sort of traction -- any color on the traction you would expect to gain in the Nava OTC primary care Cleared line items in terms of revenue over 1 year, 2 years, 3 years?

I mean, David, this is Justin. I'd rather let Marc give you the actual numbers around how we're projecting these -- the growth of these brands. I could speak a bit more just fundamentally about how I feel about the opportunity, as I think I highlighted in the presentation. I mean, look, I'm very excited about -- I mean I'm very excited about Nava. I'm hoping to have data to share with everybody on Nava by our next earnings call, like coming up with -- the one coming up in about 30 days. So I'm really -- and then look, I mean, as far as putting a number on it, when we put out these forecasts, like, we did in this call, like, they're very conservative numbers, right? Like, we don't -- any of these brands could see the same growth that we saw with Rex or more, right? Cleared is a little bit different business model. It's going to be a lot more B2B revenue, which, I believe, Alex believes he can get a number of additional deals done this year. And we think these will be very sticky and we know we can -- we have the right expertise to deliver for these health care product company clients. But it's just -- it's really difficult. And then if you think about like the Virtual Primary Care business, I mean it's a massive. It is almost historical opportunity, right? What's going to happen? It's almost silly for me to sit here and say, like, we're going to do x, right, in revenue because -- so we test stuff until we really start to -- we're going to be spending marketing dollars in the next week or 2. And so maybe even as soon as the next call -- the next earnings call that we do, we might be able to provide some more color on this. But I mean, I think we're going to win. We're better on the acquisition side than anybody in the business, I believe. The technology is where it needs to be to support the business. And there's no question about that although there's demand for these things, and it's a big opportunity, right? I've been saying to people internally that in a year, I think instead of seeing ED and hair loss ads all over the TV, you're going to see Virtual Primary Care ads. And by the way, as opposed to LifeMD being a couple of years behind like we were in those other verticals, we're going to be the first one out there. So I'm excited about the opportunity. And again, I just want to reiterate, we're really conservative with the guidance, but we think some of these things are going to be very successful.

So for '22, if you look at Nava, Cleared, it's basically in that $60 million range combined is what's assumed in the guidance.

And then, Alex, I think on one of the slides you presented, you showed some of the revenue sharing or potential earnings that Cleared could generate in terms of an earnout, based on revenue that they could achieve. In your mind, Alex, 3 years from now, how much revenue would you hope to see coming from Cleared in the asthma business line?

Yes. No, that's a good question. I'd rather not predict kind of the targets. It's kind of a reiteration of the prior question, a little bit, but a couple of years out. We're excited about the opportunity. We think we're going to crush it, right? And by that means, hopefully, certain, if not all milestones could be achieved within a period of time. But rather not comment on that. We have our own projections, yes.

David, a good way to answer that question, I mean, which -- a good portion of the Cleared milestones expire within 3 or 4 years, right? So when you look at that slide, that's what -- those are the numbers that the Cleared team, which knows this business better than anybody at LifeMD, still, that's what they believe the opportunity is over the next 3 or 4 years. Otherwise, they certainly didn't do this deal with us just to get the upfront $3.5 million to $4 million, right, that we paid over the first 24 months. They believe they're going to hit -- they believe these -- some of these milestones, if not all of them, are reasonable, right, and they have to hit these within -- I think there's some variance there between 3 and 5 years, right? So we want them to hit them, right? As we said, if they can hit some or all these milestones, this will have been an amazing transaction for LifeMD shareholders, and we'll be really happy to pay them out in the transaction.

Okay. So $150 million in revenue is reasonable 3 to 5 years from now?

Absolutely. I'll update you should -- let's update the model.

Our next question comes from Marc Wiesenberger from B. Riley.

As we think about that incremental kind of $100 million revenue through calendar '25 from the lifestyle health care revenue, maybe you could talk about the breakdown of kind of new customer growth versus cross-selling? And additionally, how that dynamic impacts your expectations for your CAC going forward?

The majority of that growth comes from the acquisition and retention of new customers. So it's going to be in the range of about -- 75% or so of that growth would come from that. I mean, it's not just about acquiring those patients, it's more importantly about retaining those patients. So that assumes acquiring and then retaining at comparable rates to what we've been retaining to date. From the cross-sell opportunity, as I've mentioned before, we've actually recently seen some pretty meaningful traction, hence we've introduced some new cross-sell opportunities, particularly into our largest brand, Rex, where if you look back 6 months ago or even really 3 months ago, we were acquiring new patients with typically about a 9-year $95 AOB, more recently as we've introduced some new cross-sell opportunities, some upsell opportunities, some longer subscription lines, we've seen that number jump up to $135. So we expect to continue to see anniversarying some of those AOB numbers into the longer-term goals, which is what contributes to most of that 25%. And honestly, that's a place where there could potentially be some upside if we're able to have similar successes in some of our other brands with complementary products. And frankly, just putting in more complementary products into those existing lifestyle brands.

Understood. With regards to the Virtual Primary Care offering, how do you guys go about thinking -- about the trade-off between utilization and profitability? I understand it's probably less of an issue with the $15 per month plan, but potentially it could be more impactful in the $99 per month plan?

Yes, I mean, I'll take that one, Marc. I think we've done a lot of modeling. We have looked at some other businesses that had a very similar offering. So we have some understanding of where we think the utilization is going to be. But you never really know until you launch the offering, right, and you understand the demographics of the patient. And so we may -- we expect that we'll have to make some adjustments, right, as we scale this thing. But first and foremost, I mean, look, let's grow it. Let's put the first 5,000, 10,000, 20,000 patients on the platform, and we'll adjust it as necessary. But we think there's enough room there -- we think we know that there's enough room, given what a full-time doctor costs us, even like -- even paying above market like we do, relative to what we're charging patients and where the utilization should be. We're comfortable that the margins are going to be where they need to be. So we do expect we'll have to tweak some things, but that's -- I think that's to be expected, right, in any new venture stage rapid growth business, right?

Sure. And then turning to the road map for the B2B relationships, should we expect to see new indications on the platform prior to kind of these B2B pharma relationships taking off? And then also if you could provide more insight into the typical structure of what these relationships kind of currently look like and maybe how they could evolve going forward?

Yes. So we're working on these things in parallel. So initially -- I intentionally didn't want to get too deep into these strategies for competitive reasons, but we're working on both of these things in parallel. So we're going to be testing out condition-focused indications -- conditions-focused offerings, excuse me, like, just take weight loss for example, right? It's an area where we think is -- got a great example of like a massive opportunity. If we could use the LifeMD platform for it, we can find a doctor with a prescription medication for weight loss, if that's appropriate, with health coach, with over-the-counter products and with even diagnostics, right? So we think there are a lot of indications like that where the platform is relevant. We're going to -- we're already working on some of those flows just to start seeing what the data looks like and what the costs are to get patients into the funnel. And then, look, we have -- we're going to do deals with this platform, right? And how they look, I don't know, right? The easiest way to describe how I think they will look is that there will be revenue share types of transactions where LifeMD is able to say to a potential partner, "We can dramatically expand your market share, bring you significant numbers of new patients through our platform and our expertise. And we're going to -- in a compliant way, we're going to share in that revenue." I've said many times that we don't -- running an agency is not our model. So we think there are a number of different ways I think that LifeMD can enter into revenue shares for new products that are obviously existing products in the health care world that are FDA approved that are patented. I believe that some of these things, we can have national or even global exclusives on. And I think we get a couple of those deals done, Marc. The story -- LifeMD story starts to look a lot different, right? And again, I love the current business, but I think when you start to put these products on you that have real intellectual property around them and then you demonstrate that you can go acquire patients, maybe even cheaper, right, than what we're seeing right now with some of these very competitive verticals that we play in, that's -- it's exciting for us to think about how that could change the business. And by the way, those patented products, I also look at those as lead gen for the primary care platform, right? So it kind of really drives that old business, right? The more of those deals that we do and the more partnerships that Cleared enters into, all of these partnerships are lead gen and essentially patient flow with 0 acquisition cost for our primary care business. So that's how we think about it. I hope that's helpful.

And then just one final one for me. You've talked about kind of how you distinguish yourself from competitors and things. And lately, some other competitors have made a move to go into more brick-and-mortar channels. I'm wondering what your thought on that is? And would that ever be something that LifeMD would think about it? And just your thoughts on how that compares to your strategy? I appreciate it.

I don't want to speak about the things that our competitors are doing. I don't see LifeMD going -- doing anything brick-and-mortar. I believe that there's -- I don't believe -- I mean I'm happy that factually that there is a massive opportunity around delivering incredible Virtual Primary Care, and there's just -- there's enough of an opportunity there that I don't believe that LifeMD will ever have to set up any kind of brick-and-mortar infrastructure. And I just don't think like -- I think that if you saw us doing that, like, I'd be a little bit concerned, right? Because I don't think people invest in LifeMD for us to go spend money like a One Medical or some fancy clinics in high-end markets, right? That's certainly not why we run that company. And Marc, our CFO, has a lot of experience building a nationwide chain of brick-and-mortar businesses, but we just have 0 interest in that. We do some pop-up stuff, like, you may see like with the outlook like -- with our Cleared business, Marc, like they do these really cool like pop-up things in different cities and I think it's good for branding. So again, minimal, minimal, almost 0 investment, right, other than the doctor's time. You're never going to see LifeMD -- you're not going to see LifeMD making a big investment in brick-and-mortar infrastructure.

Sorry, maybe I didn't make it clear enough, but I was -- maybe some partnerships that will provide your access into brick-and-mortar?

I could speak about that. So yes, I think -- look, I think -- absolutely. Look, I think if we start to see -- as the patients -- as we continue to put more patients on the platform, there's no -- there's certainly a need for us to think about how we could partner with what would most likely be regional health care providers, maybe urgent care clinics, things like that, that could handle our need to in-person requirements of patients, right, when they need to go in for an actual doctor's visit. So that's certainly something of interest to us and will likely happen. And then the second thing is, there are some other companies out there, one of them actually, Dave Larsen covers a BTIG that kind of do the last mile of telemedicine. And I mean I think those kind of partners are really interesting, right? We're now you're seeing these companies that are literally just service providers that are building an infrastructure across the country that LifeMD can effectively -- companies like LifeMD can white label based on our demand from patients. So it's very scalable and really very minimal to no out-of-pocket cost for us. And we actually can -- it actually enables us to do a lot of like point-of-care testing, things like EKGs, deal with a lot of that stuff. I mean, you can even send a provider if you want to pay up for it to a patient's house. And so I think that's a longer-term part for sure of the LifeMD offering. But for this year, I mean, I just -- I really want to focus on proving out the VPC model, proving out that we can scale this. And then I think towards the end of the year, we start looking at some of those other partnerships.

Our next question comes from Scott Schoenhaus from Stephens.

Actually, most of my questions have been asked already. But back on Virtual Primary Care, just you kind of alluded to this, this was going to be one of my questions. That $40 million to $60 million revenue opportunity that bridge due to your long-term target in Virtual Primary Care, to me, it seems like the near-term opportunity is upselling your current membership base to that Virtual Primary Care offering. Is that right? What -- how do you acquire new customers? Is it more expensive than the traditional average cost to customer acquiring cost? And what -- how many -- if you could provide any kind of direction in terms of what your current installed base you guys are projecting that will be effectively able to be upsold to this primary care offering and then when the -- how much of that revenue stream is from new client wins?

Yes. I'd have to -- so I think the bulk of that revenue, I don't know that -- I don't know what the percentage breakdown is in the model, Marc, I don't know the answer to that. When we look at it, I mean, when I look at what would be successful at a minimum, Scott, I would say like if we take a couple of percent to 5% of those patients coming in and we can move them over to the LifeMD platform, like, I think that will be successful. I mean, could it be -- could it end up being 10%? Could we get creative with it and come up with other offers where maybe you combine like whatever subscription that patient is on with the virtual primary care platform, like, and then -- and actually see the number go up to like 20% or 30%. It's possible. But I think when we model this stuff out, we actually model it out -- we were very conservative with modeling our expectations for the cross-sell. And a lot of it, we model out just based on us going out there and spending money in an intelligent way to acquire the patient. Marc, do you want to add anything else to that?

We tend to factor in a very light cross-sell and kind of that low single-digit percentage range. Mind you, the cross-sell opportunity could end up being a lot larger than that because it's not just the 500,000 or so people. We have currently plus people have tapped in the past since the 1,000-plus new patients that we bring on per day, which that number continues to grow as the company grows. But we take a very conservative view there, sort of majority of the future revenue growth the way we have it modeled is from the same way that we've built a lot of the indication-specific businesses going out, marketing to the general public and acquiring and retaining those patients with their being basically a single-digit percentage coming from cross-sell. Obviously, if we execute that really well, there's the potential that, that number could be greater than what we had it modeled.

Our next question comes from Kayla Hostetler from Colliers.

I guess I'll start with primary care. I know you guys had your platform launched last week and running a successful beta version in these past few months. Can you give us any insight on the number of patients and doctors who are part of the beta version? And how you're planning to scale a platform now that it's launched?

Yes. I mean, we have right now probably around 20 full and part-time doctors that are on the platform. Again, we -- the first, most of what we did in the fourth quarter, which is a lot of testing with a very small patient population. And so we really -- we don't expect to see a lot -- like, we haven't even been cross-selling it to like our existing patients, that's something that we plan to start actually next week. And we're going to start running -- spending media dollars on it as well in the next week or 2. So the number of patients right now on the platform is insignificant. I think it's -- again, we expect it to start to grow this quarter, and it will be a number that will become more significant next quarter and the following.

And then where are you guys finding your doctors?

We use a combination -- most of them have come in through word-of-mouth, like, so that's our primary means of recruiting doctors. It's just people here that LifeMD is a great company to work for. Doctors that are -- many of our doctors are 50-state licensed and work in the telemedicine world, of course. And it's a small -- it's kind of a small community of doctors and many of them know each other. And so -- we take it as a compliment that doctors are kind of tell other doctors that LifeMD is a great company to work for and that we treat doctors really well. And then we -- like we just actually hired, this week, I think another two 50-state physicians for the platform that came into us, that was actually through a recruiter that one of our doctors was friends with. So we paid a small fee, but we don't actually -- like, we don't -- we haven't -- I don't think we've hired a single doctor yet through just like a cold advertisement, if that's what you're asking. It's all been through word-of-mouth. What's so important for us to find doctors is a lot easier. Licensing up doctors is very, very time consuming. And so finding like incredible 50-state doctors that are 50-state licensed is a -- it's not easy. And so it's something that we've put a lot of time and energy into. And I feel good, though, like I feel really good about our ability to scale the practice.

Okay. And then -- so looking at your portfolio of telehealth companies, I guess this has been touched on a little bit, but looking forward into '22, how are you thinking about M&A? And are there any specific indications that are super interesting to you?

There are a lot of indications that are very interesting to us. I'd rather not talk about specific indications that are of interest to us because it makes our job more difficult to launch, to exploit those areas of opportunity. I don't think you're going to see a whole lot of -- we are -- we always have active discussions with -- around M&A opportunities. But I don't think you're going to -- I think this is a year of growth of the primary care business. And hopefully, I think we'll get a couple more of these partnering deals done with health care product companies. That's what I think everybody should focus on.

So our next question comes from Kyle Bauser from Colliers.

I appreciate you squeezing me in here for a follow-up from Kayla's. Justin, you mentioned continuing to explore additional disease states and also the opportunity for wearables. To that end, any thought on how you can monetize the sort of the new basket of remote therapeutic monitoring codes? So -- they allow for patient-reported outcomes, self-reporting, seems pretty interesting, especially if you get into the wearable space. It seems like a pretty interesting opportunity to leverage your platform and generate additional high-margin revenue stream. Just kind of curious how you're thinking about that?

We haven't put a lot of thought into the actual clinical, remote, patient-monitoring space. I mean I actually am familiar with the space from just some other -- I've done a little bit of work in that space. But when I talk about wearables, like what excites me is this whole idea of being able to put a device on your arm or eventually maybe it's even becomes like very tiny and you could just put on your body anywhere and being able to share with your doctor every heartbeat, your respiratory rate, your skin temperature, your blood pressure, I mean, your blood oxygen levels, your -- how many steps you walk every day, whether you have a-fib, like, all that sort of stuff. I'm really talking more about the retail market because I think that -- I think, quite frankly, it's going to be very affordable and expensive, and it can dramatically impact outcomes for patients. As far as like the, I'll call like the reimbursed remote monitoring space, we haven't had any conversations with companies in the space, although it's something that would be of interest. One area -- it is something that we wouldn't mind having discussion. We just haven't. Cardiovascular health is one area where I expect LifeMD -- that's a great example actually of an area where Life MD will launch a kind of focused offering. And we actually have a very well-known cardiovascular, interventional cardiologist that's probably on this call, hopefully, on this call, that's going to be joining the advisory board and really, I think, been a face of that offering. And we're excited about like combining primary care docs that are trained in cardiology and then a wearable like because a lot of people are just -- a lot of people that have families with a history of heart failure or issues themselves, right, I mean I think just even a simple wearable even the ones that aren't reimbursed and a doctor that's well trained that they can access anytime they want, solves a lot of their problems, right? And so -- sorry, that's a long-winded answer to your question, but we're open to the reimbursed. We're open to the kind of adjudicated stuff as well. We just haven't had the conversations.

This concludes the verbal portion of our question-and-answer session. I'll now pass it to [indiscernible] to read the remaining questions.

We have a couple of questions from the audience here. The first one is from Karl Brewer, Cervical Investments. And it's -- what is the nature of the projected CapEx and investment spending in 2023 to '25?

One, based on the Cleared acquisition deal, we have a few tiers worth of earnouts baked in there based on the projected future revenue. And as we've mentioned before, obviously, the goal is to get to all of those tiers, which we think are significantly accretive to the business, but given the $40 million to $60 million projection from '25 in there that would trip for tiers. So that's one that's baked in there. Number two, continued investment into enhancement and development of new telehealth features, both on the primary care side as well as the implication specific side. I don't want to get too much into those details for competitive reasons. And then three, continued investment in the company's in-house development infrastructure and capitalized payroll associated with that. But I think the big overarching thing to take away, though, is that the CapEx is very largely discretionary and associated with continuing to grow scale of the business, and obviously, achievement of certain milestones.

Thanks, Marc. The next question is from Rob McGuire at Granite Research. Given what you have learned so far with Cleared, how should we be looking at the potential for B2B revenues within your telehealth business?

Marc, do you want to take that one or do you want me to?

Look, at the end of the day, a couple of partners certainly came with the Cleared acquisition. We expect to introduce a much more new partners, and it's not going to be an overnight thing. These agreements do take time. And look, we think it's portable. I don't want to obviously get too much in the details on that one. We aren't saying that we think it's a very viable business opportunity for us.

And the last question here from Katherine Grant at King Capital. When you speak about planned capabilities for VPC, what is the time frame?

So almost everything that's in that slide will be done by the second quarter. I think the one thing that Dennis requested could run into the third quarter would be supporting some of the family plans, but all of those other features are within the next quarter or so -- within the next quarter, like by the end of the second quarter, to be clear and probably more.

There are no further questions. And so I will turn it back over to you, Justin, for closing remarks.

Look, I think we covered enough. So no other remarks on LifeMD. But thanks -- I just want to say thank you again to all of our shareholders and analysts. Thanks for your time, and thanks for your interest in LifeMD, and we appreciate your support. And we want you to know that you're invested in something that's not only going to perform financially, but also do a lot of amazing things for a lot of Americans across the country that don't have access to high-quality health care. So thanks, and look forward to talking to you all in a few weeks on our earnings call.