Health In Tech, Inc.

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 plans 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 plans 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 September 30, 2025, we had clients in 42 states, with our services and platforms actively utilized by 579 brokers, 12 Third-Party Administrators (TPAs), and 258 additional third-party agencies. Our stop loss insurance policies for self-funded benefits plans were sold to 910 business clients with 25,248 employees. Notably, in the first nine months of 2025, we achieved 77% year-over-year revenue growth compared to the same period in 2024, while maintaining healthy profitability.

Current wording

As of March 31, 2026, we had 507 business clients in 38 states, with our services and platforms actively utilized by 608 brokers, 11 Third-Party Administrators (TPAs), and 277 additional third-party agencies. In addition, we continued the revenue growth, with revenue up 9% year-over-year in the first quarter of 2026 compared to the same period in 2025.

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

Adjusted EBITDA represents our net income before net interest expense, taxes, and depreciation and amortization expense, adjusted to eliminate stock-based compensation expense. Adjusted EBITDA is not a measure calculated in accordance with United States Generally Accepted Accounting Principles, or GAAP. Please refer to “Results of Operations*”*in this item 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 three and nine months ended September 30, 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.

Current wording

Adjusted EBITDA represents our net income (loss) before net interest expense, taxes and amortization expense, adjusted to eliminate stock-based compensation expense, including employer payroll taxes related to stock-based awards. Adjusted EBITDA is not a measure calculated in accordance with United States Generally Accepted Accounting Principles, or GAAP. Please refer to “Results of Operations*”*in this item for a discussion of the limitations of adjusted EBITDA and reconciliations of adjusted EBITDA to net income (loss), the most comparable GAAP measurements, respectively, for the three months ended March 31, 2026 and 2025. 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.. We offer our services through our subsidiaries. Program and platform management services and self-funded plan administration services provided by SMR and MGU activities provided by ICE (including eDIYBS) are interdependent, as they cannot function effectively without being combined. Currently ICE does not offer underwriting services as a standalone service. In the future, we may consider offering standalone service based on different functionalities and technology deliveries.

Previous wording

Cost of revenues primarily consists of infrastructure costs to operate our platform such as hosting fees and fees paid to various third-party partners for access to their technology, services and amortization expenses of our capitalized internal-use software related to our platform. We mainly outsource captive management services and data services from the third-party companies. Our internal proprietary system seeks to consistently improve underwriting and services results through machine learning and data feeds. The captive management activities include introducing new carriers, conducting due diligence on carriers, conducting feasibility studies to determine the viability to be a stop-loss carrier on the platform, negotiating terms and contracts, coordinating audit requests, managing relationship with unrelated carriers and their regulators and auditor firms to ensure that our risk associated with our service offerings is minimized. See Part II,“Item 1A. Risk Factors — Risks Related to our Business and Industry” for additional information on the risks associated with our service offerings.

Current wording

Cost of revenues primarily consists of (i) infrastructure costs to operate our platform, such as hosting fees, fees paid to various third-party partners for access to their technology and services, and amortization expenses of our capitalized internal-use software related to the platform, (ii) costs of plan administrative services provided by the TPA designated in each pre-designed plan and other vendors assigned to each TPA, and (iii) costs related to the captive management activities. We mainly outsource captive management services and data services from the third-party companies. Our internal proprietary system seeks to consistently improve underwriting and services results through machine learning and data feeds. The captive management activities include introducing new carriers, conducting due diligence on carriers, conducting feasibility studies to determine the viability to be a stop-loss carrier on the platform, negotiating terms and contracts, coordinating audit requests, managing relationship with unrelated carriers and their regulators and auditor firms to ensure that our risk associated with our service offerings is minimized. See Part II,“Item 1A. Risk Factors — Risks Related to our Business and Industry” for additional information on the risks associated with our service offerings.

Previous 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.

Current wording

Sales and marketing expenses primarily consist of (i) costs associated with expanding the our distribution channels through third-party agents, which are variable and based on policies sold and fees collected, and (ii) costs related to the internal sales team responsible for onboarding agencies and agents onto the platform. These expenses include commissions, incentive compensation, salaries and benefits, and other related selling costs. 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, stock-based compensation expense 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

Provision for income taxes consists primarily of changes to our current and deferred federal and state tax assets and liabilities. Deferred income taxes are recognized for the tax consequences of temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities. Our deferred tax assets and liabilities are calculated by applying the current tax rates and laws to taxable years in which such differences are expected to reverse.

Current wording

Income tax benefit (expense) consists primarily of changes to our current and deferred federal and state tax assets and liabilities. Deferred income taxes are recognized for the tax consequences of temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities. Our deferred tax assets and liabilities are calculated by applying the current tax rates and laws to taxable years in which such differences are expected to reverse.

Previous wording

As of September 30, 2025, the balance of software increased by $2,220,230 to $6,182,691, from $3,962,461 as of December 31, 2024. This increase was mainly attributable to a $2,951,949 increase in the expansion of eDIYBS systems completed in September 2025, partially offset by a $489,947 increase in accumulated amortization for the nine months ended September 30, 2025.

Current wording

As of March 31, 2026, the balance of software increased by $177,667 to $6,708,561, from $6,530,894 as of December 31, 2025. This increase was mainly attributable to a $581,134 investment in software development, partially offset by a $403,467 increase in accumulated amortization for the three months ended March 31, 2026.

Previous wording

As of September 30, 2025, the balance of total stockholders’ equity increased by $3,989,935 to $17,158,963, 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 Condensed Consolidated Statements of Changes in Stockholders’ Equity for additional information.

Current wording

As of March 31, 2026, the balance of total stockholders’ equity increased by $4,491,083 to $21,603,148, from $17,112,065 as of December 31, 2025. This increase was mainly attributable to our net proceeds of $5,928,120 from our PIPE, after deducting offering costs and placement agent fees. Please refer to our Condensed Consolidated Statements of Changes in Stockholders’ Equity for additional information.

Previous wording

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. While revenues from underwriting modeling generated from ICE decreased by $0.1 million to $1.4 million, this decline was more than offset by a $4.8 million increase in revenues from fees generated from SMR, leading to a net increase in the revenues from the integrated solution. Revenues from fees continue to outpace revenues from underwriting modeling as more employers prioritize higher-quality coverage and enhanced service offerings.

Current wording

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. While revenues from underwriting modeling generated from ICE decreased by $0.9 million to $1.5 million, this decline was more than offset by a $1.6 million increase in revenues from fees generated from SMR, leading to a net increase in the revenues from the integrated solution.

Previous wording

Cost of revenues increased by $2.3 million to $3.3 million for the three months ended September 30, 2025, from $1.0 million for the three months ended September 30, 2024. As a percentage of revenue, cost of revenues increased to 39.4% for the three months ended September 30, 2025, from 22.0% for the same period in 2024.

Current wording

Cost of revenues increased by $1.6 million to $4.3 million for the three months ended March 31, 2026, from $2.7 million for the three months ended March 31, 2025. As a percentage of revenue, cost of revenues increased to 48.6% for the three months ended March 31, 2026, from 33.2% for the same period in 2025.

Previous wording

Sales and marketing expenses increased by $0.5 million to $1.0 million for the three months ended September 30, 2025, from $0.5 million for the three months ended September 30, 2024. As a percentage of revenue, sales and marketing expenses remained stable at 11.3% for the three months ended September 30, 2025, compared to 11.4% for the same period in 2024. Our channel-partnership model continues to drive revenue growth without the need for a large in-house sales force.

Current wording

Sales and marketing expenses were $2.3 million for the three months ended March 31, 2026, more than doubled compared to $1.1 million for the three months ended March 31, 2025. As a percentage of revenue, sales and marketing expenses increased to 26.1% for the three months ended March 31, 2026, compared to 13.6% for the same period in 2025, primarily due to the increase in sales distribution fees with agencies, which drives revenue growth without the need for a large in-house sales force.

Previous 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.

Current wording

Administrative division — The administrative division mainly represents payroll, stock-based compensation expense and benefits expenses incurred related to Executives, Human Resources, Accounting, Finance and Legal related personnel.

Previous wording

General and administrative expenses increased by $1.6 million to $3.4 million for the three months ended September 30, 2025, from $1.8 million for the three months ended September 30, 2024. The overall increase was primarily attributable to the expenses associated with being a public company of $1.1 million, including D&O insurance, board compensation, investor relations, etc. However, as a percentage of revenue, general and administrative expenses remained stable at 40.7% for the three months ended September 30, 2025, compared to the same period in 2024. This stability as a percentage of revenue was because the ratio impact of costs associated with being a public company were offset by improved operating leverage in our operations division.

Current wording

General and administrative expenses increased by $0.2 million to $3.5 million for the three months ended March 31, 2026, from $3.3 million for the three months ended March 31, 2025. The overall increase in general and administrative expenses was primarily attributable to the increased expenses associated with being a public company, including D&O insurance, board compensation, investor relations, media outreach, etc. As a percentage of revenue, general and administrative expenses decreased to 39.4% for the three months ended March 31, 2026, from 40.5% for the same period in 2025. 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.

Previous wording

Adjusted EBITDA increased by $0.3 million to $1.0 million for the three months ended September 30, 2025, from $0.7 million for the three months ended September 30, 2024. As a percentage of revenue, adjusted EBITDA decreased to 11.8% for the three months ended September 30, 2025, from 15.0% for the same period in 2024. The decrease in adjusted EBITDA was primarily due to the increase in cost of revenues, mainly driven by higher captive management fees related to the new products and new channels launched in July 2024.

Current wording

Adjusted EBITDA decreased by $2.5 million to negative $1.3 million for the three months ended March 31, 2026, from $1.2 million for the three months ended March 31, 2025. As a percentage of revenue, adjusted EBITDA decreased to negative 14.7% for the three months ended March 31, 2026, from 15.3% for the same period in 2025. The decrease in adjusted EBITDA was primarily attributable to the plan administrative service costs and distribution fees, which were not incurred in the same period in 2025.

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 into 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 generated from operating activities, our IPO completed in December 2024, and our PIPE financing completed in March 2026.

Previous wording

Our cash and cash equivalents as of September 30, 2025 were held in order to fund our working capital needs. We do not enter into investments for trading or speculative purposes. Our policy is to invest any cash in excess of our immediate requirements in investments designed to preserve the principal balance and provide liquidity. Accordingly, our cash and cash equivalents are invested primarily in demand deposit and money market accounts that are currently providing minimal returns. We believe that our cash generated from our operating activities will allow us to continue as a going concern at least twelve months from the date of this Quarterly Report on Form 10-Q.

Current wording

Accordingly, our cash and cash equivalents are invested primarily in demand deposit and money market accounts that are currently providing minimal returns. We believe our existing cash reserves, together with cash generated from our operating activities, will allow us to continue as a going concern at least twelve months from the date of this Quarterly Report on Form 10-Q.

Previous wording

Cash provided by operating activities for the nine months ended September 30, 2024, principally resulted from our net income of $0.8 million, $0.8 million in adjustments for non-cash items primarily related to amortization, deferred tax benefits, amortization of debt discount and interest income, and $1.1 million of cash provided by changes in working capital, including a decrease in accounts receivable of $1.3 million, a decrease in other receivables of $1.2 million, an increase in prepaid expenses and other current assets of $0.2 million, a decrease in accounts payable and accrued expenses of $1.1 million and a decrease in income taxes payable of $0.1 million.

Current wording

Net cash used in operating activities was $3.3 million for the three months ended March 31, 2026, compared to $0.5 million of net cash provided by operating activities for the same period in 2025. This shift was primarily due to the net loss in the three months ended March 31, 2026, compared to net income in the same period in 2025, along with increased working capital requirements. Cash used in operating activities for the three months ended March 31, 2026, principally resulted from net loss of $1.6 million, offset by $0.4 million in adjustments for non-cash items primarily related to amortization, deferred tax benefits and stock-based compensation expense. This also included $2.1 million of cash used to fund changes in working capital, including an increase in accounts receivable of $3.0 million, a decrease in prepaid expenses and other assets of $0.5 million, an increase in accounts payable and accrued expenses of $1.4 million, and a decrease in other current liabilities of $1.0 million.

Previous wording

Net cash provided by operating activities remained stable at $2.7 million for the nine months ended September 30, 2025, compared to the same period in 2024. Cash provided by operating activities for the nine months ended September 30, 2025, principally resulted from our net income of $1.6 million, $4.3 million in adjustments for non-cash items primarily related to amortization, provision for refund liability and stock-based compensation expense, and offset by $3.2 million of cash used to fund changes in working capital, including a decrease in accounts receivable of $0.8 million, an increase in other receivables of $3.4 million, an increase in prepaid expenses and other current assets of $0.7 million, an increase in long-term prepaid expenses of $0.2 million, an increase in accounts payable and accrued expenses of $2.0 million, a decrease in income taxes payable of $0.2 million and a decrease in other current liabilities of $1.5 million.

Current wording

Cash provided by operating activities for the three months ended March 31, 2025, principally resulted from net income of $0.5 million, $1.3 million in adjustments for non-cash items primarily related to amortization, provision for refund liability and stock-based compensation expense, and offset by $1.3 million of cash used to fund changes in working capital, including an increase in accounts receivable of $0.4 million, an increase in other receivables of $3.5 million, an increase in prepaid expenses and other assets of $1.0 million, an increase in accounts payable and accrued expenses of $3.4 million, and an increase in income taxes payable of $0.2 million.

Previous wording

Cash used in investing activities increased by $2.1 million to $2.4 million for the nine months ended September 30, 2025, compared to $0.3 million for the same period in 2024. The primary use of cash used in investing activities for the nine months ended September 30, 2025 and 2024 were both 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 decreased by $0.3 million to $0.4 million for the three months ended March 31, 2026, compared to $0.7 million for the same period in 2025. The primary use of cash in investing activities for the three months ended March 31, 2026 and 2025 were both related to the development of our proprietary AI-enabled platform, reflecting our continued investment in enhancing our technology platforms.

Previous wording

Cash used in financing activities decreased by $2.9 million to $0.2 million for the nine months ended September 30, 2025, compared to $3.1 million for the same period in 2024. The decrease was primarily driven by a $2.1 million repayment of notes payable during the 2024 period, which did not recur in 2025. Cash used in financing activities for the nine months ended September 30, 2025 consisted primarily of payments of deferred offering cost for our public offering.

Current wording

Net cash provided by financing activities was $6.3 million for the three months ended March 31, 2026, compared to $0.1 million of net cash used in financing activities for the same period in 2025. The increase was primarily attributable to proceeds from the issuance of Class A Common Stock in connection with our PIPE financing. For the three months ended March 31, 2025, the primary use of cash in financing activity was related to the payments of deferred offering cost for our IPO.