Health In Tech, Inc.
For the period ended Dec 31, 2025. Filed Mar 25, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 25, 2026
HIT$0.56-3.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-17.
0001213900-25-024561
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-25.
0001213900-26-034211
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 112 previous paragraphs and 113 current paragraphs.
61 unchanged; 25 reworded; 27 added; 26 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 19 previous and 19 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (27)
Current report
Engaged Amazon Web Services (AWS) Advanced Tier Services Partner Ciklum to accelerate development of Health In Tech’s AI-Driven InsurTech platform.
Current report
Appointed former SAP and IBM executive Sri Rajagopalan as Chief Technology Officer to advance AI-driven Enterprise-Grade platform growth.
Current report
Appointed five-time founder Zain Hasan as Chief Growth Officer to accelerate revenue growth and scale distribution.
Current report
Introduced 100+ Pre-Configured Stop-Loss Self-funded Healthcare plans for employers, streamlining the renewal process and reducing cycle times.
Current report
Hosted the inaugural independent hitDavos InsurTech Summit during World Economic Forum Week 2026, driving brand visibility and global leadership engagement across the government, technology, healthcare, and finance sectors.
Current report
As of December 31, 2025, the number of enrolled employees reached 22,515, representing a 23% increase from 18,348 in the same period of 2024. This growth reflects strong market demand and the expanded adoption of our self-funded health plan solutions facilitated by continued channel expansion through brokers, TPAs and agencies, and expansion to large employers market.*** ***
Current report
As of December 31, 2025, the balance of cash and cash equivalents was $7,669,754, remaining relatively stable compared to $7,849,248 as of December 31, 2024.
Current report
Other receivables, net
Current report
As of December 31, 2025, the net other receivables increased by $2,967,562 to $3,467,814, from $500,252 as of December 31, 2024. This increase was mainly attributable to the purchase of Deferred Administrative Surplus for $3,481,684 on March 18, 2025.
Current report
As of December 31, 2025, the balance of total liabilities increased by $3,378,435 to $5,977,896, from $2,599,461 as of December 31, 2024. This increase was driven by the higher accounts payable and accrued expenses reflecting the expansion of our business scale. Notably, we achieved revenue growth of 71% year over year from fiscal year 2024 to fiscal year 2025, which led to higher liabilities in line with operational growth.
Current report
Revenues increased by $13.8 million, or 71.0%, to $33.3 million for the year ended December 31, 2025, from $19.5 million for the year ended December 31, 2024. This growth was primarily driven by continued channel expansion through brokers, TPAs and agencies, and expansion to large employers market.
Current report
Total billable enrolled employees increased 23% year over year to 22,515 as of December 31, 2025, compared to 18,348 in the same prior last year.
Current report
As the services provided by SMR and ICE are delivered as an interdependent and integrated solution, we evaluate their performance based on the total revenues generated. Revenues from underwriting modeling generated from ICE increased 3.2% to $6.9 million, compared to $6.6 million for the same period in 2024, reflecting expanding adoption of our solutions. Revenues from fees generated from SMR increased 106.1% to $26.5 million, compared to $12.8 million for the same period in 2024. Revenues from fees continue to outpace revenues from underwriting modeling as more employers prioritize higher-quality coverage and enhanced service offerings.
Current report
No revenues were generated from HI Card, for the year ended December 31, 2025, compared to $2.99 million for the same period in 2024. The service provided by HI card is an optional. We made strategic decisions to temporarily pause HI Card beta testing and prioritize tech resource to enhance eDIYBS platform which offers integrated services by SMR and ICE and delivers greater financial and process impacts. This disciplined allocation of resources has strengthened our near-term growth trajectory while positioning HI Card for a more robust relaunch. We currently expect to resume HI Card development early in the first quarter of 2026.
Current report
The increase was primarily attributable to higher captive management fees related to the new products and new channels launched in July 2024, as we continued to expand our business scale.
Current report
General and administrative expenses increased by $5.2 million to $13.7 million for the year ended December 31, 2025, from $8.5 million for the year ended December 31, 2024. The overall increase in general and administrative expenses for the year ended December 31, 2025 was primarily attributable to the increased expenses associated with being a public company of $3.0 million, including D&O insurance, board compensation, investor relations, media outreach, etc. However, as a percentage of revenue, general and administrative expenses decreased to 41.0% for the year ended December 31, 2025, from 43.5% for the same period in 2024. This decrease was primarily attributable to the improved operating leverage in our operations division, which was partially offset by increased expenses associated with being a public company.
Current report
Research and development expenses that are not associated with software developments decreased by $1.2 million to $1.6 million for the year ended December 31, 2025, from $2.8 million for the year ended December 31, 2024. As a percentage of revenue, research and development expenses decreased to 4.7% for the year ended December 31, 2025, compared to 14.4% for the same period in 2024.
Current report
The costs associated with software developments that are capitalized increased by $1.7 million to $2.1 million for the year ended December 31, 2025, from $0.4 million for the same period in 2024. During 2025, our IT remained focused on developing new functionalities and features for this next-generation platform. The expansion of systems to serve large size employers was completed in September 2025.
Current report
Income before income tax expense
Current report
Income before income tax expense increased by $0.8 million to $1.7 million for the year ended December 31, 2025, from $0.9 million for the year ended December 31, 2024. This increase was primarily attributable to our strong revenue growth and disciplined cost management.
Current report
Provision for income taxes increased by $0.2 million to $0.4 million for the year ended December 31, 2025, from $0.2 million for the year ended December 31, 2024. The increase in provision for income taxes was attributable to the increased income before income taxes, primarily driven by our strong revenue growth and disciplined cost management.
Current report
Adjusted EBITDA increased by $1.8 million to $4.1 million for the year ended December 31, 2025, from $2.3 million for the year ended December 31, 2024. As a percentage of revenue, adjusted EBITDA was 12.3% for the year ended December 31, 2025, representing a modest increase compared to 11.7% for the same period in 2024. The increase in adjusted EBITDA was primarily attributable to robust revenue growth, driven by strong demand for our new product offerings facilitated by continued channel expansion through brokers, TPAs, and agencies.
Current report
Critical Accounting Policies and Estimates
Current report
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses during the reported periods. We also have other key accounting policies, none of these policies or estimates are considered critical accounting policies or critical accounting estimates.
Current report
In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The purpose of this guidance is to enhance the transparency and usefulness of income tax disclosures and provide comprehensive income tax information, particularly in relation to rate reconciliation and income taxes paid in the U.S. and foreign jurisdictions. The amendments are effective for fiscal years beginning after December 15, 2024. We have adopted this accounting pronouncement on the accompanying financial statements prospectively to the current annual period. Prior period disclosures have not been adjusted to reflect the new disclosure requirements.
Current report
In November 2024, the FASB issued ASU 2024-03 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This standard calls for enhanced disclosures about components of expense captions on the face of the income statement. This standard will be effective for fiscal years beginning after December 15, 2026, with the option to apply it retrospectively. Early adoption is allowed. Currently, we are assessing the potential impact of this guidance on our consolidated financial statement disclosures.
Current report
In September 2025, the FASB issued ASU 2025-06 Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which amends certain aspects of the accounting for and disclosure of software costs under ASC 350-40,Intangibles — Goodwill and Other: Internal-Use Software(“ASC 350-40”). The new standard is effective for annual periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is allowed. The new standard may be applied prospectively, retrospectively, or via a modified prospective transition method. Currently, we are assessing the potential impact of this guidance on our consolidated financial statement disclosures.
Removed paragraphs (26)
Previous report
Initial Public Offering
Previous report
On December 24, 2024, we completed our initial public offering (the “IPO”) of 2,300,000 shares of Class A common stock. The total gross proceeds received from the IPO was $9.2 million before deducting underwriting discounts and commissions.
Previous report
In 2024, we diversified the stop loss policies offering, by adding new carriers. By December 31, 2024, 11,937 EEs were covered by A-rated stop-loss policies, representing an increase of 5,563 EEs compared to 6,374 EEs that were covered by A-rated stop-loss policies as of December 31, 2023. Small businesses that preferred A-rated carriers generally demonstrated stronger performance and were willing to pay higher program fees for better medical network coverage and enhanced health benefits. Despite a temporary 14% reduction in employee counts, we achieved a 2% increase in revenues during the year ended December 31, 2024.
Previous report
Income from discontinued operations, net of income taxes
Previous report
At the end of May 2023 (the “Closing Date”), the Company’s Chief Executive Officer (“CEO”) completed the sale of the Carrier (Roscommon and Roscommon Captive Management Company) for $500,000. Subsequent to this date, we have had no significant involvement in the operations of Carrier, which is now controlled by an independent third-party. Beginning in June 2023, Carrier’s historical financial results for periods prior to the Closing Date have been reflected in our consolidated statements of operations, retrospectively, as discontinued operations. See “Note 3 — Discontinued Operations” to our consolidated financial statements included in this report for further detail.
Previous report
As of December 31, 2024, the balance of cash and cash equivalents increased by $5,432,898 to $7,849,248, from $2,416,350 as of December 31, 2023. This increase was mainly attributable to $4,093,444 provided by financing activities. On December 24, 2024, we completed our IPO of 2,300,000 shares of Class A common stock. Please refer to “Liquidity and Capital Resources” for additional information.
Previous report
Other receivables
Previous report
As of December 31, 2024, the balance of other receivables decreased by $1,180,848 to $500,252, from $1,681,100 as of December 31, 2023. This decrease was mainly attributable to the collection of $1,269,595 from Deferred Administrative Surplus for the year ended December 31, 2024.
Previous report
As of December 31, 2024, the balance of total liabilities decreased by $2,810,605 to $2,599,461, from $5,410,066 as of December 31, 2023. This decrease was mainly attributable to the reduction in accounts payable and accrued expenses, resulting from a $1,650,000 payment made in January 2024 for the purchase of Deferred Administrative Surplus, as well as the full repayment of notes payable with a $1,650,000 principal upon maturity in September 2024.
Previous report
Revenues increased by $0.3 million, or 1.8%, to $19.5 million for the year ended December 31, 2024, from $19.2 million for the year ended December 31, 2023. We took a strategic approach to moderating growth in order to achieve critical milestones.
Previous report
In the third quarter of 2024, we developed new healthcare plan products and established a partnership with a new carrier. We began developing AI-assisted underwriting solutions for mid-sized businesses with more than 150 employees. In the fourth quarter of 2024, we beta-tested these products for mid-sized employers, which unlocked a significant expansion in the addressable market.
Previous report
Revenues from underwriting modeling decreased by $1.6 million, or 19.2%, for the year ended December 31, 2024, compared to the same period in 2023. This temporary decline was primarily due to the increased offering of A-rated insurance policies, which resulted in lower underwriting fees.
Previous report
Despite this decline, revenues from fees increased by $1.9 million, or 17.5%, over the same period. The growth in revenues from fees was mainly attributable to the higher program fee payments for better medical network coverage and enhanced health benefits from businesses that purchased A-rated insurance policies, which more than offset the decline in underwriting revenues.
Previous report
The captive management activities involve third-party captive management companies that assist us in managing relationships with unrelated carriers, their regulators, and auditor firms to ensure that our service offerings carry minimal risk. Of the $1.4 million increase in captive management activity costs, $0.9 million was attributable to deconsolidation. Historically, these costs were incurred by our consolidated entity and reflected as discontinued operations. These five-month costs incurred and reflected in discontinued operations were approximately $0.9 million for the year ended December 31, 2023. The remaining increase was attributable to adding a new captive management partner related to the new products and new channels launched in July 2024.
Previous report
General and administrative expenses increased by $0.4 million to $8.5 million for the year ended December 31, 2024, from $8.1 million for the year ended December 31, 2023. As a percentage of revenue, general and administrative expenses increased to 43.5% for the year ended December 31, 2024, from 42.2% for the same period in 2023.
Previous report
Public company readiness costs not deemed capitalizable** **— The public company readiness costs not deemed capitalizable category relates to services provided by our services providers that while related to our pending initial public offering, are not directly attributable to such pending initial public offering.
Previous report
The increase in general and administrative expenses for the year ended December 31, 2024, were primarily attributable to the expansion of our administrative and operations divisions. The growth in personnel within our in-house operational, claims, and underwriting teams was essential to supporting our expanding customer base and the rising demand for A-rated insurance policies. Additionally, the expansion of our administrative division enabled us to handle more tasks internally, contributing to greater operational efficiency and long-term cost optimization.
Previous report
Offsetting these increases, public company readiness costs not deemed capitalizable decreased by approximate $1.1 million in 2024, as a significant portion of our public company preparation work was completed in 2023.
Previous report
Research and development expenses increased by $0.8 million to $2.8 million for the year ended December 31, 2024, from $2.0 million for the year ended December 31, 2023. As a percentage of revenue, research and development expenses increased to 14.4% for the year ended December 31, 2024, compared to 10.5% for the same period in 2023. This increase was primarily attributable to the increase in personnel-related costs related to IT compliance, IT information security and new product service research and development. We continue to prioritize investments in innovation, including developing customized features and optimizing our system and service platforms to enhance customer convenience.
Previous report
Provision for income taxes decreased by $0.7 million to $0.2 million for the year ended December 31, 2024, from $0.9 million for the year ended December 31, 2023. This decrease was primarily attributable to reduction in our income before tax, which resulted from higher operating expenses mainly driven by the increase in headcount to expand our in-house departments.
Previous report
Income from discontinued operations, net of income taxes
Previous report
Income from discontinued operations, net of income taxes, was $1.5 million for the year ended December 31, 2023. At the end of May 2023, our CEO, Tim Johnson, sold his ownership of a self-insurance carrier business to an unrelated third-party. As of that date, we had no continuing significant involvement in the operations of the carrier, and it was controlled by an independent third-party. Accordingly, the profit or loss of the self-insurance carrier business for the year ended December 31, 2023, is presented as discontinued operations.
Previous report
Adjusted EBITDA decreased by $2.5 million to $2.3 million for the year ended December 31, 2024, from $4.8 million for the year ended December 31, 2023. As a percentage of revenue, adjusted EBITDA decreased to 11.7% for the year ended December 31, 2024, from 25.1% for the same period in 2023. This decrease was primarily due to the higher operating expenses mainly driven by the increase in experienced high caliber managers.
Previous report
Cash used in investing activities for the year ended December 31, 2023 principally resulted from the development of our internal-use software of $1.1 million and funds issued pursuant to Promissory Note Agreement with Kang Youle Limited where HIT has entered into a lending agreement of $0.8 million.
Previous report
Net cash provided by financing activities for the year ended December 31, 2023 principally resulted from $1.7 million in proceeds from short-term loans and partially offset by $0.3 million in payments of deferred offering costs.
Previous report
In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. We adopted this standard effective January 1, 2024 using a retrospective method.
Reworded paragraphs (25)
Previous wording
Health in Tech (“HIT”) is an insurance technology platform company, which offers a marketplace that aims to improve processes in the healthcare industry through vertical integration, process simplification, and automation. By removing friction and complexities, we streamline the underwriting, sales and service process for insurance companies, licensed brokers, and TPAs.
Current wording
Health in Tech (“HIT”) is an insurance technology platform company, which offers a marketplace that aims to improve processes in the healthcare industry through vertical integration, process simplification, and automation. By removing friction and complexities, we streamline the underwriting, sales and service process for insurance companies, licensed brokers, Managing General Underwriters (MGUs) and TPAs.
Previous wording
Marketplace: We are a health insurance marketplace where insurance companies can list various stop-loss policy options for self-funded benefits plans. Licensed brokers registered on our platform can log in, upload certain required information, select policy plans, obtain a bindable quote and sell them to small businesses. In most cases, our technology enables us to medically underwrite insurance policies and produce bindable quotes within about two minutes, allowing us to deliver an integrated and seamless sales cycle.
Current wording
Marketplace: We are a health insurance marketplace where insurance companies can list various stop-loss policy options for self-funded benefits plans. Licensed brokers registered on our platform can log in, upload certain required information, select policy plans, obtain a bindable quote and sell them to businesses. In most cases, our technology enables us to medically underwrite insurance policies and produce bindable quotes within about two minutes for small employers (10-100 employees) and about two weeks for larger employers (exceeding 100 employees), allowing us to deliver an integrated and seamless sales cycle.
Previous wording
Accessibility and Savings: We make self-funded benefits plan and stop loss insurance accessible online for small businesses. We aim to deliver meaningful cost savings for low-risk, small employers with comparatively healthy employees through a digital medical underwriting process. We seek to deliver time savings for employers, brokers, TPAs, and carriers, by leveraging both external and internally developed technology.
Current wording
Accessibility and Savings: We make self-funded benefits plan and stop loss insurance accessible online for businesses. We aim to deliver meaningful cost savings for low-risk employers with comparatively healthy employees through a digital medical underwriting process. We seek to deliver time savings for employers, brokers, TPAs, and carriers, by leveraging both external and internally developed technology.
Previous wording
As of December 31, 2024, we had clients in 41 states, with our services and platforms actively utilized by 417 brokers, 11 Third-Party Administrators (TPAs), and 212 additional third-party agencies. Our stop loss insurance policies for self-funded benefits plans were sold to 890 business clients with 18,348 employees. In addition, we continued to maintain profitability while driving revenue growth of 2% year over year from fiscal year 2023 to fiscal year 2024.
Current wording
As of December 31, 2025, we had clients in 40 states, with our services and platforms actively utilized by 583 brokers, 12 Third-Party Administrators (TPAs), and 263 additional third-party agencies. Our stop loss insurance policies for self-funded benefits plans were sold to 795 business clients with 22,515 employees. In addition, we continued to maintain profitability while driving revenue growth of 71% year over year from fiscal year 2024 to fiscal year 2025.
Previous wording
We currently generate most of our revenue from service fees and underwriting fees, that are associated with customers who purchase self-funded benefits plans and stop loss insurance. These plans are facilitated through a network of brokers, TPAs, MGUs, carriers, and other third-party agents. These agencies either directly engage our services or provide valuable client referrals. Roscommon Insurance Company (“Roscommon”) and Roscommon Captive Management LLC, the self-insurance carrier business, previously owned by our Chief Executive Officer, Mr. Tim Johnson, was sold to an unrelated party at the end of May 2023. This move allows the CEO to dedicate his undivided attention to driving accelerated growth and continuing development within Health In Tech.
Current wording
We currently generate most of our revenue from service fees and underwriting fees, that are associated with customers who purchase self-funded benefits plans and stop loss insurance. These plans are facilitated through a network of brokers, TPAs, MGUs, carriers, and other third-party agents. These agencies either directly engage our services or provide valuable client referrals.
Previous wording
While we generate our revenue primarily from small employers and insurance carriers, we currently derive substantially all of our business through brokers, TPAs, and other third-party agents who provide referrals. As a result, the size of our network is critical to our success. We have experienced significant network growth since we commenced operations, and we believe we have the opportunity to continue to grow our network by providing superior innovation in automation, great client experience, competitive pricing, access to quality providers, and competitive insurance coverage relative to other insurers in the same geographic and insurance markets.
Current wording
While we generate our revenue primarily from employers and insurance carriers, we currently derive substantially all of our business through brokers, TPAs, and other third-party agents who provide referrals. As a result, the size of our network is critical to our success. We have experienced significant network growth since we commenced operations, and we believe we have the opportunity to continue to grow our network by providing superior innovation in automation, great client experience, competitive pricing, access to quality providers, and competitive insurance coverage relative to other insurers in the same geographic and insurance markets.
Previous wording
Our primary customers are small businesses, which can have anywhere from 5 to 150 employees. Our service fee is billed to such business customers on a per enrolled employee (EE) per month (PEPM) basis, which ranges from $2 to $35 based on selected services for each small business, and our underwriting revenue is a percentage of monthly premium paid on a PEPM basis. Accordingly, we use the number of EEs as a key indicator of our market penetration and growth, as compared to simply tracking the total number of our business customers, which can vary depending on the number of employees (and their family) enrolled at the business customer. The number of EEs is an employment based count, and not only would include a single employee, but also an employee’s family (spouse and/or children), if the family is also insured on the plan.
Current wording
Our primary customer base consists of small business with 10 to 100 employees, and we have expanded to include businesses with more than 100 employees. Our service fee is billed to such business customers on a per enrolled employee (EE) per month (PEPM) basis, which ranges from $2 to $50 based on selected services — and generates underwriting revenue as a percentage of the monthly premium paid on a PEPM basis. Accordingly, we use the number of EEs as a key indicator of our market penetration and growth, as compared to simply tracking the total number of our business customers, which can vary depending on the number of employees (and their family) enrolled at the business customer. The number of EEs is an employment based count, and not only would include a single employee, but also an employee’s family (spouse and/or children), if the family is also insured on the plan.
Previous wording
Adjusted EBITDA represents our earnings from continuing operations before net interest expense, taxes, and depreciation and amortization expense, adjusted to eliminate stock-based compensation expense and public company readiness costs not deemed capitalizable. Adjusted EBITDA is not a measure calculated in accordance with United States Generally Accepted Accounting Principles, or GAAP. Please refer to “*Summary Consolidated Financial Data — Adjusted EBITDA”*in this Report for a discussion of the limitations of adjusted EBITDA and reconciliations of adjusted EBITDA to income from continuing operations, net of income taxes, the most comparable GAAP measurements, respectively, for the years ended December 31, 2024 and 2023. We exclude certain non-recurring or non-cash items when calculating Adjusted EBITDA, and we believe this approach provides a more meaningful measure by offering a clearer view of our underlying operational performance.
Current wording
Adjusted EBITDA represents our net income before net interest expense, taxes and amortization expense, adjusted to eliminate stock-based compensation and provision for credit losses on other receivables. Adjusted EBITDA is not a measure calculated in accordance with United States Generally Accepted Accounting Principles, or GAAP. Please refer to “*Summary Consolidated Financial Data — Adjusted EBITDA”*in this Report for a discussion of the limitations of adjusted EBITDA and reconciliations of adjusted EBITDA to net income, the most comparable GAAP measurements, respectively, for the years ended December 31, 2025 and 2024. We exclude certain non-recurring or non-cash items when calculating Adjusted EBITDA, and we believe this approach provides a more meaningful measure by offering a clearer view of our underlying operational performance.
Previous wording
While we generate our revenue primarily from small employers and insurance carriers, we grow our business primarily from offering solutions that streamline sales processes, enhance service delivery, and reduce the sales cycle duration for TPAs, MGUs, and Brokers. We offer our services through our three subsidiaries. Program services provided by SMR and MGU activities provided by ICE (including eDIYBS) are interdependent, as they cannot function effectively without being combined. Services provided by HI Card is an optional add-on to our other services, and it cannot be offered on a standalone basis. Brokers that utilize the program services on behalf of the small employer provided by SMR and MGU activities provided by ICE, are not obligated to utilize our HI Card service. Currently ICE does not offer underwriting services as a standalone service. In the future, we may consider offering it as a standalone service.
Current wording
While we generate our revenue primarily from employers and insurance carriers, we grow our business primarily from offering solutions that streamline sales processes, enhance service delivery, and reduce the sales cycle duration for TPAs, MGUs, and Brokers. We offer our services through our three subsidiaries. Program services provided by SMR and MGU activities provided by ICE (including eDIYBS) are interdependent, as they cannot function effectively without being combined. Services provided by HI Card is an optional add-on to our other services, and it cannot be offered on a standalone basis. Brokers that utilize the program services on behalf of the employer provided by SMR and MGU activities provided by ICE, are not obligated to utilize our HI Card service. Currently ICE does not offer underwriting services as a standalone service. In the future, we may consider offering it as a standalone service.
Previous wording
Sales and marketing expenses primarily consist of personnel-related costs including salaries, benefits and commissions cost for our sales and marketing personnel. Sales and marketing expenses also include the costs for advertising, promotional and other marketing activities, as well as certain fees paid to various third-party for sales and customer acquisition.
Current wording
Sales and marketing expenses primarily consist of personnel-related costs including salaries, stock-based compensation expense, benefits and commissions cost for our sales and marketing personnel. Sales and marketing expenses also include the costs for advertising, promotional and other marketing activities, as well as certain fees paid to various third-party for sales and customer acquisition.
Previous wording
Research and development expenses primarily consist of personnel-related costs, including salaries and benefits for our research and development personnel. Additional expenses include costs related to the software development, quality assurance, and testing of new technology, and enhancement of our existing platform technology.
Current wording
Research and development expenses primarily consist of personnel-related costs, including salaries, stock-based compensation expense and benefits for our research and development personnel. Additional expenses include costs related to research, design, and preliminary planning of new technology, as well as routine maintenance of its existing platform.
Previous wording
As of December 31, 2024, the balance of accounts receivable decreased by $588,563 to $1,647,103, from $2,235,666 as of December 31, 2023. This decrease was mainly attributable to process improvements and the automation of our accounts receivable (AR) system. The accounts receivable turnover period for the year ended December 31, 2024 was 29 days, representing a 13-day reduction from 42 days for the year ended December 31, 2023.
Current wording
As of December 31, 2025, the net accounts receivable decreased by $890,815 to $756,288, from $1,647,103 as of December 31, 2024. This reduction mainly resulted from process enhancements and automation of our accounts receivable (AR) process. The accounts receivable turnover period for the year ended December 31, 2025 was 14 days, representing a 15-day reduction from 29 days for the year ended December 31, 2024.
Previous wording
As of December 31, 2024, the balance of software increased by $401,076 to $3,962,461, from $3,561,385 as of December 31, 2023. This increase was mainly attributable to a $927,868 investment in new software development and a $14,349 increase in completed existing software, partially offset by a $541,141 increase in accumulated amortization for the year ended December 31, 2024.
Current wording
As of December 31, 2025, the balance of software increased by $2,568,433 to $6,530,894, from $3,962,461 as of December 31, 2024. This increase was mainly attributable to a $3,469,010 investment in the expansion of eDIYBS systems and new software development, partially offset by a $900,577 increase in accumulated amortization for the year ended December 31, 2025. The expansion of eDIYBS systems to serve large size employers was completed in September 2025.
Previous wording
As of December 31, 2024, the balance of total stockholders’ equity increased by $7,075,802 to $13,169,028, from $6,093,226 as of December 31, 2023. This increase was mainly attributable to our net proceeds of $5,936,836 from our IPO, after deducting offering costs, underwriting discounts and commissions. Please refer to our Consolidated Statements of Changes in Stockholders’ Equity for additional information.
Current wording
As of December 31, 2025, the balance of total stockholders’ equity increased by $3,943,037 to $17,112,065, from $13,169,028 as of December 31, 2024. This increase was mainly attributable to our net income and stock-based compensation. Please refer to our Consolidated Statements of Changes in Stockholders’ Equity for additional information.
Previous wording
Comparison of Years Ended December 31, 2024 and 2023
Current wording
Comparison of the Years Ended December 31, 2025 and 2024
Previous wording
Cost of revenues increased by $1.7 million to $4.0 million for the year ended December 31, 2024, from $2.3 million for the year ended December 31, 2023. As a percentage of revenue, cost of revenues increased to 20.8% for the year ended December 31, 2024, from 12.0% for the same period in 2023. This increase was mainly attributable to $1.4 million in higher cost for channel partner and new captive management fee and a $0.2 million increase in amortization of software, most of which was completed in May 2023.
Current wording
Cost of revenues increased by $8.4 million to $12.4 million for the year ended December 31, 2025, from $4.0 million for the year ended December 31, 2024. As a percentage of revenue, cost of revenues increased to 37.2% for the year ended December 31, 2025, from 20.8% for the same period in 2024.
Previous wording
Sales and marketing expense decreased by 0.2 million to $3.2 million for the year ended December 31, 2024, compared to 3.4 million for the year ended December 31, 2023. As a percentage of revenue, sales and marketing expenses decreased to 16.2% for the year ended December 31, 2024, compared to 17.7% for the same period in 2023. This reduction was primarily due to a $0.2 million decrease in sales promotions for products originally designed for small employers, primarily driven by our strategic shift to diversify offerings by introducing new solutions for mid-sized employers during this period.
Current wording
Sales and marketing expenses increased by 1.0 million to $4.2 million for the year ended December 31, 2025, compared to $3.2 million for the year ended December 31, 2024. As a percentage of revenue, sales and marketing expenses decreased 3.6% from 16.2% for the year ended December 31, 2024 to 12.6% for the year ended December 31, 2025. This reduction was primarily due to our channel partnership model, which continues to drive revenue growth without the need for a large in-house sales force.
Previous wording
Operations division — The operations division mainly consists of payroll and benefits expenses incurred related to our underwriting, claims management, operations development, and enrollment personnel.
Current wording
Operations division — The operations division mainly consists of payroll, stock-based compensation expense and benefits expenses incurred related to our underwriting, claims management, operations development, enrollment, nursing and strategic program development personnel.
Previous wording
Administrative division — The administrative division mainly represents payroll and benefits expenses incurred related to Executives, Human Resources, Accounting, and Finance related personnel.
Current wording
Administrative division — The administrative division mainly represents payroll, stock-based compensation expense and benefits expenses incurred related to Executives, Human Resources, Accounting, and Finance related personnel.
Previous wording
To date, we have funded our operations primarily through cash from operating activities, short-term loans, our IPO completed in December 2024, and our issuance of Series A Convertible Preferred Stock for $2 million to an institutional investor, which was converted in to shares of Class A Common Stock in August 2023 on a one for one basis.
Current wording
To date, we have funded our operations primarily through cash from operating activities, short-term loans, our IPO completed in December 2024, and our issuance of Series A Convertible Preferred Stock for $2 million to an institutional investor, which was converted into shares of Class A Common Stock in August 2023 on a one for one basis.
Previous wording
Summary of Cash Flows — Continuing Business
Current wording
Summary of Cash Flows
Previous wording
Net cash provided by operating activities increased by $0.7 million to $2.2 million for the year ended December 31, 2024, compared to $1.5 million for the same period in 2023, primarily due to process improvements and the automation of our accounts receivable (AR) system. Cash provided by operating activities for the year ended December 31, 2024, principally resulted from our income from continuing operations, net of income taxes $0.7 million, $1.3 million in adjustments for non-cash items primarily related to amortization, amortization of debt discount and stock-based compensation expense, and $0.2 million of cash provided by changes in working capital, including a decrease in accounts receivable of$0.6 million, a decrease in other receivables of $1.2 million, an increase in prepaid expenses and other current assets of $0.5 million, a decrease in accounts payable and accrued expenses of $0.9 million and a decrease in income taxes payable of $0.2 million.
Current wording
Net cash provided by operating activities increased by $0.9 million to $3.1 million for the year ended December 31, 2025, compared to $2.2 million for the same period in 2024, primarily due to the growth in revenues, process improvements and the automation of our accounts receivable (AR) system. Cash provided by operating activities for the year ended December 31, 2025, principally resulted from our net income of $1.3 million, $7.0 million in adjustments for non-cash items primarily related to amortization, provision for refund liability and stock-based compensation expense, and offset by $5.2 million of cash used to fund changes in working capital, including a decrease in accounts receivable of $0.9 million, an increase in other receivables for Deferred Administrative Surplus of $3.3 million, an increase in prepaid expenses and other assets of $2.0 million, an increase in accounts payable and accrued expenses of $2.4 million, a decrease in income taxes payable of $0.2 million and a decrease in other current liabilities of $3.0 million.
Previous wording
Cash provided by operating activities for the year ended December 31, 2023 principally resulted from our income from continuing operations, net of income taxes $2.5 million, $0.5 million in adjustments for non-cash items primarily related to amortization and deferred tax expenses, and offset by $1.5 million of cash used to fund changes in working capital, including an increase in accounts receivable of $1.3 million, an increase in other receivables of $1.7 million, a decrease in due to discontinued operations of $0.7 million and an increase in accounts payable and accrued expenses of $2.1 million.
Current wording
Cash provided by operating activities for the year ended December 31, 2024, principally resulted from our net income of $0.7 million, $1.3 million in adjustments for non-cash items primarily related to amortization, amortization of debt discount and stock-based compensation expense, and $0.2 million of cash provided by changes in working capital, including a decrease in accounts receivable of $0.6 million, a decrease in other receivables of $1.2 million, an increase in prepaid expenses and other current assets of $0.5 million, a decrease in accounts payable and accrued expenses of $0.9 million and a decrease in income taxes payable of $0.2 million.
Previous wording
Cash used in investing activities decreased by $1.1 million to $0.8 million for the year ended December 31, 2024, compared to $1.9 million for the year ended December 31, 2023. The primary use of cash used in investing activities in 2024 were related to the development of our internal-use software, reflecting our continued investment in enhancing all our technology platforms.
Current wording
Cash used in investing activities increased by $2.3 million to $3.1 million for the year ended December 31, 2025, compared to $0.8 million for the year ended December 31, 2024. The primary use of cash used in investing activities in 2025 and 2024 was related to the development of our proprietary AI-enabled platform, reflecting our continued investment in enhancing all our technology platforms.
Previous wording
Net cash provided by financing activities was $4.1 million for the year ended December 31, 2024, compared to $1.4 million for the year ended December 31, 2023. The increase was primarily driven by $8.2 million in net proceeds from the issuance of Class A common stock in connection with our IPO. However, this was partially offset by $2.0 million in payments of deferred offering cost and $2.1 million in repayments of notes payable.
Current wording
Net cash used in financing activities was $0.2 million for the year ended December 31, 2025, compared to $4.1 million of net cash provided by financing activities for the year ended December 31, 2024. The decrease was primarily driven by $8.2 million in proceeds from the issuance of Class A common stock in connection with our IPO during 2024, net of underwriting discounts and commissions. Cash used in financing activities for the year ended December 31, 2025 consisted primarily of payments of deferred offering costs for our public offering. Cash used in financing activities for the year ended December 31, 2024 consisted primarily of $2.0 million payments of deferred offering costs and $2.1 million repayments of notes payable.