MediaAlpha, Inc.

Previous wording

Our mission is to help insurance carriers and distributors target and acquire consumers more efficiently and at greater scale through technology and data science. Our technology platform brings together leading insurance carriers and high-intent consumers through a real-time, programmatic, transparent, and results-driven ecosystem. We believe we are the largest online customer acquisition platform in our core verticals of property & casualty ("P&C") insurance, health insurance, and life insurance, supporting $1.7 billion in Transaction Value across our platform from these verticals over the twelve-month period ended March 31, 2025.

Current wording

Our mission is to help insurance carriers and distributors target and acquire consumers more efficiently and at greater scale through technology and data science. Our technology platform brings together leading insurance carriers and high-intent consumers through a real-time, programmatic, transparent, and results-driven ecosystem. We believe we are the largest online customer acquisition platform in our core verticals of property & casualty ("P&C") insurance, health insurance, and life insurance, supporting $1.9 billion in Transaction Value across our platform from these verticals over the twelve-month period ended June 30, 2025.

Previous wording

We have multi-faceted relationships with top-tier insurance carriers and distributors. A buyer or a Demand Partner within our ecosystem is generally an insurance carrier or distributor seeking to reach high-intent insurance consumers. A seller or a Supply Partner is typically an insurance carrier looking to maximize the value of non-converting or low expected LTV consumers, or an insurance-focused research destination or other financial website looking to monetize high-intent users on their websites. For the twelve-month period ended March 31, 2025, consumers shopped for insurance products through the websites of our diversified group of Supply Partners and our proprietary websites each month, driving an average of 10.6 million Consumer Referrals on our platform each month.

Current wording

We have multi-faceted relationships with top-tier insurance carriers and distributors. A buyer or a Demand Partner within our ecosystem is generally an insurance carrier or distributor seeking to reach high-intent insurance consumers. A seller or a Supply Partner is typically an insurance carrier looking to maximize the value of non-converting or low expected LTV consumers, or an insurance-focused research destination or other financial website looking to monetize high-intent users on their websites. For the twelve-month period ended June 30, 2025, consumers shopped for insurance products through the websites of our diversified group of Supply Partners and our proprietary websites each month, driving an average of 11.2 million Consumer Referrals on our platform each month.

Previous wording

For the three months ended March 31, 2025, we generated $264.3 million of revenue and $473.1 million of Transaction Value, representing increases of 108.7% and 115.9%, respectively, compared with the three months ended March 31, 2024, driven primarily by significant increases in customer acquisition spending by P&C carrier partners as they continue to focus on growth and improving market share in response to improving underwriting profitability, offset in part by a decline in revenue from our Health insurance vertical, in both under 65 health and Medicare.

Current wording

For the three months ended June 30, 2025, we generated $251.6 million of revenue and $480.8 million of Transaction Value, representing increases of 41.1% and 49.4%, respectively, compared with the three months ended June 30, 2024, driven primarily by significant increases in customer acquisition spending by P&C carrier partners as they continue to focus on growth and increasing market share in response to improving underwriting profitability, offset in part by a decline in revenue from our Health insurance vertical, in both under-65 health and Medicare.

Previous wording

Contribution, which generally represents revenue less revenue share payments and online advertising costs, was $44.0 million for the three months ended March 31, 2025, a year-over-year increase of 58.9%, driven primarily by the higher revenue. Contribution Margin was 16.6% in the three months ended March 31, 2025, compared with 21.9% in the three months ended March 31, 2024.

Current wording

Contribution, which generally represents revenue less revenue share payments and online advertising costs, was $39.8 million for the three months ended June 30, 2025, a year-over-year increase of 18.1%, driven primarily by the higher revenue. Contribution Margin was 15.8% in the three months ended June 30, 2025, compared with 18.9% in the three months ended June 30, 2024.

Previous wording

Adjusted EBITDA for the three months ended March 31, 2025 was $29.4 million, a year-over-year increase of 103.7%, due primarily to higher gross profit.

Current wording

Adjusted EBITDA for the three months ended June 30, 2025 was $24.5 million, a year-over-year increase of 30.7%, due primarily to higher gross profit.

Previous wording

We define “Transaction Value” as the total gross dollars transacted by our partners on our platform. Transaction Value is an operating metric not presented in accordance with GAAP, and is a driver of revenue based on the economic relationships we have with our partners. Transaction Value from Open Marketplace transactions is a direct driver of our revenue, while Transaction Value from Private Marketplace transactions is an indirect driver of our revenue (see “Key business and operating metrics” below). Transaction Value on our platform increased to $473.1 million for the three months ended March 31, 2025, from $219.1 million for the three months ended March 31, 2024, due primarily to an increase in customer acquisition spending by P&C insurance carriers in response to improvements in their underwriting profitability. We have developed multi-faceted, deeply integrated partnerships with insurance carriers and distributors, who may be both Demand Partners and Supply Partners on our platform. We believe the versatility and breadth of our offerings, coupled with our focus on high-quality products, provide significant value to insurance carriers and distributors, leading many of them to use our platform as their central hub for broadly managing digital customer acquisition and monetization, resulting in strong retention rates. For the three months ended March 31, 2025, 99% of total insurance Transaction Value executed on our platform came from Demand Partner relationships in existence during 2024.

Current wording

We define “Transaction Value” as the total gross dollars transacted by our partners on our platform. Transaction Value is an operating metric not presented in accordance with GAAP, and is a driver of revenue based on the economic relationships we have with our partners. Transaction Value from Open Marketplace transactions is a direct driver of our revenue, while Transaction Value from Private Marketplace transactions is an indirect driver of our revenue (see “Key business and operating metrics” below). Transaction Value on our platform increased to $480.8 million and $953.9 million for the three and six months ended June 30, 2025, respectively, from $321.8 million and $540.9 million for the three and six months ended June 30, 2024, respectively, due primarily to an increase in customer acquisition spending by P&C insurance carriers in response to improvements in their underwriting profitability. We have developed multi-faceted, deeply integrated partnerships with insurance carriers and distributors, who may be both Demand Partners and Supply Partners on our platform. We believe the versatility and breadth of our offerings, coupled with our focus on high-quality products, provide significant value to insurance carriers and distributors, leading many of them to use our platform as their central hub for broadly managing digital customer acquisition and monetization, resulting in strong retention rates. For the three and six months ended June 30, 2025, 98% and 99% of total insurance Transaction Value executed on our platform came from Demand Partner relationships in existence during 2024, respectively.

Previous wording

Our success depends on our ability to retain and grow the number of high-quality Demand and Supply Partners on our platform. We retain and attract Demand Partners by finding high-quality sources of Consumer Referrals to make available to our Demand Partners. We obtain these Consumer Referrals from our diverse network of Supply Partners as well as from our proprietary properties. We seek to develop, acquire and retain relationships with high-quality Supply Partners by developing flexible platforms to enable our Supply Partners to maximize their revenue, manage their demand side relationships in scalable and flexible ways and focus on long-term sustainable economics with respect to revenue share. Our relationships with our partners are deep and long standing and involve most of the top-tier insurance carriers in the industry. In terms of Demand Partners, during the three months ended March 31, 2025, 15 of the top 20 largest auto insurance carriers by customer acquisition spend were on our platform.

Current wording

Our success depends on our ability to retain and grow the number of high-quality Demand and Supply Partners on our platform. We retain and attract Demand Partners by finding high-quality sources of Consumer Referrals to make available to our Demand Partners. We obtain these Consumer Referrals from our diverse network of Supply Partners as well as from our proprietary properties. We seek to develop, acquire and retain relationships with high-quality Supply Partners by developing flexible platforms to enable our Supply Partners to maximize their revenue, manage their demand side relationships in scalable and flexible ways and focus on long-term sustainable economics with respect to revenue share. Our relationships with our partners are deep and long standing and involve most of the top-tier insurance carriers in the industry. In terms of Demand Partners, during the six months ended June 30, 2025, 15 of the top 20 largest auto insurance carriers by customer acquisition spend were on our platform.

Previous wording

Our results depend in large part on the number of Consumer Referrals purchased on our platform and the pricing of such Consumer Referrals. The aggregate number of consumer clicks, calls, and leads purchased by insurance buyers on our platform increased to 35.0 million for the three months ended March 31, 2025, from 26.6 million for the three months ended March 31, 2024. We seek to increase the number and scale of our supply relationships and drive consumers to our proprietary properties through a variety of paid traffic acquisition sources. We continuously look to diversify our paid media sources to extend beyond search engine marketing, which has historically represented the bulk of our paid media spend.

Current wording

Our results depend in large part on the number of Consumer Referrals purchased on our platform and the pricing of such Consumer Referrals. The aggregate number of consumer clicks, calls, and leads purchased by insurance buyers on our platform increased to 34.0 million and 69.0 million for the three and six months ended June 30, 2025, respectively, from 26.2 million and 52.8 million for the three and six months ended June 30, 2024, respectively. We seek to increase the number and scale of our supply relationships and drive consumers to our proprietary properties through a variety of paid traffic acquisition sources. We continuously look to diversify our paid media sources to extend beyond search engine marketing, which has historically represented the bulk of our paid media spend.

Previous wording

Our results are subject to fluctuations as a result of seasonality. In particular, our P&C insurance vertical is typically characterized by seasonal strength in our quarters ending March 31 due to a greater supply of Consumer Referrals and higher customer acquisition budgets during the start of the year, and by seasonal weakness in our quarters ending December 31 due to a lower supply of Consumer Referrals available on a cost-effective basis and lower customer acquisition budgets from some buyers during those quarters. During the fourth quarter of 2024 our revenue from the P&C insurance vertical was significantly higher than the normal seasonal trend due to heightened shopping activity and the auto industry’s renewed focus on increasing market share. As a result, the sequential increase in our revenue for the first quarter of 2025 was lower than our normal seasonal pattern. Our health insurance vertical is typically characterized by seasonal strength in our quarters ending December 31 due to open enrollment periods for health insurance and annual enrollment for Medicare during those quarters, with a material increase in consumer search volume for health products and a related increase in buyer customer acquisition budgets.

Current wording

Our results are subject to fluctuations as a result of seasonality. In particular, our P&C insurance vertical is typically characterized by seasonal strength in our quarters ending March 31 due to a greater supply of Consumer Referrals and higher customer acquisition budgets during the start of the year, and by seasonal weakness in our quarters ending December 31 due to a lower supply of Consumer Referrals available on a cost-effective basis and lower customer acquisition budgets from some buyers during those quarters. Our health insurance vertical is typically characterized by seasonal strength in our quarters ending December 31 due to open enrollment periods for health insurance and annual enrollment for Medicare during those quarters, with a material increase in consumer search volume for health products and a related increase in buyer customer acquisition budgets.

Previous wording

MediaAlpha, Inc. is taxed as a corporation and pays corporate federal, state and local taxes on income allocated to it from QLH based upon MediaAlpha, Inc.’s economic interest held in QLH. QLH is treated as a pass-through partnership for income tax reporting purposes and is not subject to federal income tax. Instead, QLH’s taxable income or loss is passed through to its members, including MediaAlpha, Inc., pro-rata to their ownership interest in QLH. Accordingly, as our ownership interest in QLH increases, our share of the taxable income (loss) of QLH also increases. As of March 31, 2025, our ownership interest in QLH was 82.8%.

Current wording

MediaAlpha, Inc. is taxed as a corporation and pays corporate federal, state and local taxes on income allocated to it from QLH based upon MediaAlpha, Inc.’s economic interest held in QLH. QLH is treated as a pass-through partnership for income tax reporting purposes and is not subject to federal income tax. Instead, QLH’s taxable income or loss is passed through to its members, including MediaAlpha, Inc., pro-rata to their ownership interest in QLH. Accordingly, as our ownership interest in QLH increases, our share of the taxable income (loss) of QLH also increases. As of June 30, 2025, our ownership interest in QLH was 82.9%.

Previous wording

The increase in P&C insurance revenue for the three months ended March 31, 2025, compared with the three months ended March 31, 2024, was due to an increase in customer acquisition spending by P&C insurance carrier partners as they refocus on growth in response to the significant improvement in their underwriting profitability. While we expect that automotive tariff developments may put upward pressure on claims costs as the year progresses, we anticipate continued strong near-term momentum, as many carriers currently maintain margins above target levels and competition for market share remains robust.

Current wording

The increase in P&C insurance revenue for the three months ended June 30, 2025, compared with the three months ended June 30, 2024, was due to an increase in customer acquisition spending by P&C insurance carrier partners as they refocus on growth in response to the significant improvement in their underwriting profitability as well as to an increase in supply of Consumer Referrals due to the addition of new Supply Partners. While automotive tariff developments may put upward pressure on claims costs and carrier profitability as the year progresses, we anticipate continued strong near-term momentum, as the profit margins of many carriers are currently above target levels and competition for market share remains robust.

Previous wording

The decrease in life insurance revenue for the three months ended March 31, 2025, compared with the three months ended March 31, 2024, was due primarily to a reduced supply of Consumer Referrals resulting from one of our Supply Partners ceasing operations during the three months ended June 30, 2024, offset in part by a higher mix of transactions through our Open Marketplace, which have a greater impact on revenue.

Current wording

The decrease in life insurance revenue for the three months ended June 30, 2025, compared with the three months ended June 30, 2024, was due primarily to a reduced supply of Consumer Referrals resulting from one of our Supply Partners ceasing operations during the three months ended June 30, 2024.

Previous wording

The decrease in other revenue for the three months ended March 31, 2025, compared with the three months ended March 31, 2024, was driven primarily by lower revenue from our travel vertical due to a reduced supply of consumer referrals resulting from higher traffic acquisition costs. As revenue from the Travel vertical has continued to decline, we decided to exit the Travel vertical during the second quarter of 2025 and concentrate resources on our core insurance verticals. Revenue from the Travel vertical was $1.0 million and $2.0 million during the three months ended March 31, 2025 and 2024, respectively, and was not considered material.

Current wording

The decrease in other revenue for the three months ended June 30, 2025, compared with the three months ended June 30, 2024, was driven primarily by lower revenue from our travel vertical as we have fully exited the vertical during the second quarter of 2025. Revenue from the Travel vertical was $0.7 million and $2.0 million during the three months ended June 30, 2025 and 2024, respectively, and was not considered material.

Previous wording

The increase in cost of revenue for the three months ended March 31, 2025, compared with the three months ended March 31, 2024, was driven primarily by higher revenue share payments to suppliers due to the overall increase in revenue and lower take rates, offset in part by higher transactions in our Private Marketplaces, which have a lower impact on cost of revenue.

Current wording

The increase in cost of revenue for the three months ended June 30, 2025, compared with the three months ended June 30, 2024, was driven primarily by higher revenue share payments to Supply Partners due to the overall increase in revenue and lower take rates, offset in part by higher transactions in our Private Marketplaces, which have a lower impact on cost of revenue.

Previous wording

The decrease in sales and marketing expenses for the three months ended March 31, 2025, compared with the three months ended March 31, 2024, was immaterial.

Current wording

The decrease in sales and marketing expenses for the three months ended June 30, 2025, compared with the three months ended June 30, 2024, was due primarily to a decrease in amortization expense of $0.9 million and a decrease in equity-based compensation expense of $0.6 million.

Previous wording

The increase in product development expenses for the three months ended March 31, 2025, compared with the three months ended March 31, 2024, was due primarily to an increase in personnel-related costs of $0.7 million resulting primarily from the hiring of additional employees.

Current wording

The increase in product development expenses for the three months ended June 30, 2025, compared with the three months ended June 30, 2024, was due primarily to an increase in personnel-related costs of $0.6 million resulting primarily from the hiring of additional employees.

Previous wording

The decrease in amortization expense for the three months ended March 31, 2025, compared with the three months ended March 31, 2024, was immaterial.

Current wording

The decrease in amortization expense for the three months ended June 30, 2025, compared with the three months ended June 30, 2024, was due primarily to the write-off of intangible assets acquired as part of the Customer Helper Team, LLC acquisition during the three months ended March 31, 2025.

Previous wording

The increase in other (income), net for the three months ended March 31, 2025, compared with the three months ended March 31, 2024, was due to an increase in interest income resulting primarily from higher cash balances.

Current wording

The decrease in other (income), net for the three months ended June 30, 2025, compared with the three months ended June 30, 2024, was driven primarily by a one-time contract termination fee of $1.7 million received from one of our partners in the Health and Life vertical that ceased operations during the three months ended June 30, 2024, offset in part by an increase in interest income resulting primarily from higher cash balances during the three months ended June 30, 2025.

Previous wording

The decrease in interest expense for the three months ended March 31, 2025, compared with the three months ended March 31, 2024, was driven by the impact of lower interest rates as well as lower outstanding balances during the 2025 period.

Current wording

The decrease in interest expense for the three months ended June 30, 2025, compared with the three months ended June 30, 2024, was driven by the impact of lower interest rates as well as lower outstanding balances during 2025.

Previous wording

The following table presents our income tax (benefit) expense for the three months ended March 31, 2025 and 2024, and the dollar and percentage changes between the two periods:

Current wording

The following table presents our income tax expense for the three months ended June 30, 2025 and 2024, and the dollar and percentage changes between the two periods:

Previous wording

For the three months ended March 31, 2025, we recorded an income tax benefit of $49 thousand resulting from our effective tax rate of 2.1%, which differed from the U.S. federal statutory tax rate of 21%, due primarily to the tax impacts of changes in our valuation allowance. For the three months ended March 31, 2024, we recorded an income tax expense of $27 thousand resulting from our effective tax rate of (1.8)%, which differed from the U.S. federal statutory tax rate of 21%.

Current wording

For the three months ended June 30, 2025, we recorded income tax expense of $0.3 million resulting from our effective tax rate of (1.4)%, which differed from the U.S. federal statutory tax rate of 21%, due primarily to the tax impacts of changes in our valuation allowance. For the three months ended June 30, 2024, we recorded income tax expense of $0.1 million resulting from our effective tax rate of 2.9%, which differed from the U.S. federal statutory tax rate of 21%.

Previous wording

The increase in general and administrative expenses for the three months ended March 31, 2025, compared with the three months ended March 31, 2024, was due primarily to a $5.2 million increase in legal costs, driven by higher legal fees and a charge of $5.0 million to increase the reserve relating to the FTC Matter, an increase in equity-based compensation expense of $0.6 million, and an increase in personnel-related costs of $0.5 million.

Current wording

The increase in general and administrative expenses for the six months ended June 30, 2025, compared with the six months ended June 30, 2024, was due primarily to a $39.2 million increase in legal costs, driven by higher legal fees and charges of $38.0 million to increase the reserve relating to the FTC Matter, an increase in personnel-related costs of $1.1 million, and an increase in equity-based compensation expense of $0.5 million.

Previous wording

The following table presents our write-off of intangible assets for the three months ended March 31, 2025 and 2024, and the dollar and percentage changes between the two periods:

Current wording

The following table presents our write-off of intangible assets for the six months ended June 30, 2025 and 2024, and the dollar and percentage changes between the two periods:

Previous wording

The increase in write-off of intangible assets for the three months ended March 31, 2025, compared with the three months ended March 31, 2024, was due to a write-off of $13.4 million of customer relationships and trademarks, trade names, and domain names acquired as part of the Customer Helper Team, LLC acquisition as we do not expect any future cash inflows from these assets.

Current wording

During the six months ended June 30, 2025, we wrote off $13.4 million of customer relationships and trademarks, trade names, and domain names acquired as part of the Customer Helper Team, LLC acquisition as we did not expect any future cash inflows from these assets.

Previous wording

The decrease in equity-based compensation expense for the three months ended March 31, 2025, compared with the three months ended March 31, 2024, was due primarily to acceleration of the vesting of certain RSUs held by employees during the three months ended March 31, 2024 in connection with the termination of their employment and certain RSUs granted to employees being fully vested prior to December 31, 2024, offset in part by higher expenses related to annual awards of RSUs granted to employees and higher employee headcount.

Current wording

The decrease in equity-based compensation expense for the six months ended June 30, 2025, compared with the six months ended June 30, 2024, was due primarily to acceleration of the vesting of certain RSUs held by employees during the three months ended March 31, 2024 in connection with the termination of their employment and certain RSUs granted to employees being fully vested during the three months ended March 31, 2024, offset in part by higher expenses related to annual awards of RSUs granted to employees and higher employee headcount.

Previous wording

The following table reconciles Adjusted EBITDA with net (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, for the three months ended March 31, 2025 and 2024:

Current wording

The following table reconciles Adjusted EBITDA with net (loss) income, the most directly comparable financial measure calculated and presented in accordance with GAAP, for the three and six months ended June 30, 2025 and 2024:

Previous wording

(1)Transaction expenses consist of $0.7 million of legal and accounting fees incurred by us for the three months ended March 31, 2024 in connection with resale registration statements filed with the SEC.

Current wording

(1)Transaction expenses consist of $0.6 million and $1.2 million of legal and accounting fees incurred by us for the three and six months ended June 30, 2024, respectively, in connection with resale registration statements filed with the SEC.

Previous wording

(2)Write-off of intangible assets for the three months ended March 31, 2025 consist of a charge of $13.4 million related to the write-off of customer relationships and trademarks, trade names, and domain names intangible assets acquired as part of the acquisition of Customer Helper Team, LLC.

Current wording

(2)Write-off of intangible assets for the six months ended June 30, 2025 consist of a charge of $13.4 million related to the write-off of customer relationships and trademarks, trade names, and domain names intangible assets acquired as part of the acquisition of Customer Helper Team, LLC.

Previous wording

(3)Legal expenses of $6.9 million for the three months ended March 31, 2025, consist of a $5.0 million increase to the loss reserve established in connection with the FTC Matter and legal fees and costs incurred in connection with such matter. Legal expenses of $1.1 million for the three months ended March 31, 2024, consist of legal fees incurred in connection with the FTC Matter.

Current wording

(4)Legal expenses of $35.3 million and $42.1 million for the three and six months ended June 30, 2025, respectively, consist of increases of $33.0 million and $38.0 million, respectively, to the loss reserve established in connection with the FTC Matter and legal fees and costs incurred in connection with such matter. Legal expenses of $0.7 million and $1.8 million for the three and six months ended June 30, 2024, consist of legal fees and costs incurred in connection with the FTC Matter.

Previous wording

The following table reconciles Contribution with gross profit, the most directly comparable financial measure calculated and presented in accordance with GAAP, for the three months ended March 31, 2025 and 2024:

Current wording

The following table reconciles Contribution with gross profit, the most directly comparable financial measure calculated and presented in accordance with GAAP, for the three and six months ended June 30, 2025 and 2024:

Previous wording

The following table presents Transaction Value by platform model for the three months ended March 31, 2025 and 2024:

Current wording

The following table presents Transaction Value by platform model for the three and six months ended June 30, 2025 and 2024:

Previous wording

The following table presents Transaction Value by vertical for the three months ended March 31, 2025 and 2024:

Current wording

The following table presents Transaction Value by vertical for the three and six months ended June 30, 2025 and 2024:

Previous wording

The following table presents the percentages of total Transaction Value generated from clicks, calls and leads for the three months ended March 31, 2025 and 2024:

Current wording

The following table presents the percentages of total Transaction Value generated from clicks, calls and leads for the three and six months ended June 30, 2025 and 2024:

Previous wording

Our principal sources of liquidity are our cash flows generated from operations and cash and funds available under the 2021 Revolving Credit Facility. Our principal uses of cash include funding of our operations, interest payments, and mandatory principal payments on our long-term debt. As of March 31, 2025 and December 31, 2024, our cash and cash equivalents totaled $63.6 million and $43.3 million, respectively. As of March 31, 2025, the aggregate principal amount outstanding under the 2021 Term Loan Facility was $156.1 million and our borrowing capacity available under the 2021 Revolving Credit Facility was $45.0 million.

Current wording

Our principal sources of liquidity are our cash flows generated from operations and cash and funds available under the 2021 Revolving Credit Facility. Our principal uses of cash include funding of our operations, interest payments, and mandatory principal payments on our long-term debt. As of June 30, 2025 and December 31, 2024, our cash and cash equivalents totaled $85.4 million and $43.3 million, respectively. As of June 30, 2025, the aggregate principal amount outstanding under the 2021 Term Loan Facility was $153.7 million and our borrowing capacity available under the 2021 Revolving Credit Facility was $45.0 million. On August 4, 2025 ("Effective Date"), we agreed with lenders representing $138.1 million of the principal amount outstanding as of the Effective Date under the 2021 Term Loan Facility to extend the maturity date of their portion of the 2021 Term Loan Facility by one year, to July 29, 2027. The remaining lenders, representing $13.3 million of the principal amount outstanding as of the Effective Date under the 2021 Term Loan Facility, did not agree to extend the maturity date of their loans, and so such amounts are considered to be current liabilities as their maturity falls within twelve months from the date of the issue of these consolidated financial statements. In additions, the lenders representing $45.6 million in aggregate amount of revolving commitments and related loans under the 2021 Revolver Credit Facility ($4.6 million in aggregate principal amount of which are drawn as of the Effective Date) agreed to extend the maturity by one year to July 29, 2027. The remaining $4.4 million in aggregate amount of revolving commitments and related loans under the 2021 Revolver Credit Facility ($0.4 million in aggregate principal amount of which are drawn as of the Effective Date) will mature on July 29, 2026.

Previous wording

On February 21, 2023, we received a civil investigative demand from the Federal Trade Commission (the “FTC”) regarding compliance with the FTC Act and the TSR, as they relate to the advertising, marketing, promotion, offering for sale, or sale of healthcare-related products, the collection, sale, transfer or provision to third parties of consumer data, telemarketing practices, and/or consumer privacy or data security. We have cooperated fully with the FTC investigation. On October 30, 2024, we received an initial settlement demand from the staff of the FTC (the “FTC Staff”) stating that the FTC Staff is prepared to recommend that the FTC approve the filing of a complaint against the Company for violations of Section 5(a) of the FTC Act, the TSR and the Government and Business Impersonation Rule (the “Impersonation Rule”). The FTC Staff proposes to seek injunctive and monetary relief and civil penalties. If obtained in whole or in part, the monetary relief and penalties proposed by the FTC Staff would have an adverse, and potentially material, effect on the Company’s liquidity, financial condition and results of operations. The total amount of the monetary relief and penalties proposed by the FTC Staff significantly exceeds our existing liquidity and financial resources. Any such costs above the existing liquidity and financial resources would require us to seek additional capital, incur debt or otherwise take significant actions in order to satisfy the claims and there can be no assurances that such financing could be obtained on acceptable terms, or at all. In addition, the proposed injunctive terms, if obtained in whole or in part, could materially and adversely affect our ability to operate our business in the Health insurance vertical, including how we conduct our marketing activities and endeavors to ensure compliance with consumer protection laws by itself and third parties with which we do business. We strongly disagree with the allegations and believe we have substantial and meritorious defenses to the claims. Among other things, we believe that our conduct does not rise to the legal standard required for the FTC to obtain the proposed monetary relief and penalties. We continue to engage in good faith with the FTC and seek to resolve this matter prior to litigation, but we are prepared to defend ourselves vigorously if a complaint is filed.

Current wording

On February 21, 2023, we received a civil investigative demand from the Federal Trade Commission (the “FTC”) regarding compliance with the FTC Act and the TSR, as they relate to the advertising, marketing, promotion, offering for sale, or sale of healthcare-related products, the collection, sale, transfer or provision to third parties of consumer data, telemarketing practices, and/or consumer privacy or data security. We have cooperated fully with the FTC investigation. On October 30, 2024, we received an initial settlement demand from the staff of the FTC (the “FTC Staff”) stating that the FTC Staff was prepared to recommend that the FTC approve the filing of a complaint against the Company for violations of Section 5(a) of the FTC Act, the TSR and the Government and Business Impersonation Rule (the “Impersonation Rule”). The FTC Staff proposed to seek injunctive and monetary relief and civil penalties. On July 3, 2025, the Company reached agreement with the FTC Staff on the terms of a Consent Order that the Staff was prepared to recommend to the Commissioners of the FTC to fully resolve the FTC’s claims. On August 6, 2025, the Staff notified the Company that the Commissioners had approved the Consent Order. Under the terms of the Consent Order, which includes no admission or denial of wrongdoing or to the FTC’s allegations, the Company has agreed to pay $45.0 million as monetary relief, with $33.5 million payable within seven days of entry of the Consent Order by the court and the remaining $11.5 million within 90 days of entry of the Consent Order. We expect to pay such settlement payments from our cash on hand. In addition, we agreed to certain other provisions, primarily implementing additional compliance procedures to further strengthen the existing safeguards in under-65 Health vertical.

Previous wording

We believe that our expected near-term revenue, cash on hand and availability to access cash available under the 2021 Credit Facilities will be sufficient to meet our projected operating and debt service requirements, and we expect that we will continue to comply with our financial covenants under the 2021 Credit Facilities, for at least the next twelve months. To the extent that our current liquidity is insufficient to fund future activities or any amounts we agree to pay in settlement of the FTC's claims, or our financial results are below our expectations due to cyclical conditions in our primary vertical markets or other factors and we do not remain in compliance with our financial covenants under the 2021 Credit Facilities, we may need to take additional actions to reduce operating costs, negotiate amendments to or waivers of the terms of such credit facilities, refinance our debt, or raise additional capital. We have historically not used funds available under our credit facilities to fund our operations or to make payments required under our credit facilities.

Current wording

We believe that our expected near-term revenue, cash on hand and availability to access cash available under the 2021 Credit Facilities will be sufficient to meet our projected operating, debt service requirements, and settlement amount due to the FTC and we expect that we will continue to comply with our financial covenants under the 2021 Credit Facilities, for at least the next twelve months. To the extent that our current liquidity is insufficient to fund future activities, or our financial results are below our expectations due to cyclical conditions in our primary vertical markets, or we are unable to refinance or extend the 2021 Credit Facilities upon maturity, or other factors and we do not remain in compliance with our financial covenants under the 2021 Credit Facilities, we may need to take additional actions to reduce operating costs, negotiate amendments to or waivers of the terms of such credit facilities, or raise additional capital. We have historically not used funds available under our credit facilities to fund our operations or to make payments required under our credit facilities.

Previous wording

We may in the future engage in merger and acquisition or other activities, including share repurchases, that could require us to draw on our existing credit facilities or raise additional capital through the sale of equity securities or through debt financing arrangements. If we raise additional funds by issuing equity securities, the ownership of our existing stockholders will be diluted. The incurrence of additional debt financing would result in debt service obligations, and any future instruments governing such debt could provide for operating and financing covenants that could restrict our operations. Our material cash requirements include our long-term debt, operating lease obligations, and any payments under the TRA. In addition, we may require material cash to fund our defense costs and/or any amounts that we may agree to pay to resolve the FTC Matter.

Current wording

We may in the future engage in merger and acquisition or other activities, including share repurchases, that could require us to draw on our existing credit facilities or raise additional capital through the sale of equity securities or through debt financing arrangements. If we raise additional funds by issuing equity securities, the ownership of our existing stockholders will be diluted. The incurrence of additional debt financing would result in debt service obligations, and any future instruments governing such debt could provide for operating and financing covenants that could restrict our operations. Our material cash requirements include our long-term debt, operating lease obligations, and any payments under the TRA.

Previous wording

The following table presents a summary of our cash flows for the three months ended March 31, 2025 and 2024, and the dollar and percentage changes between the periods:

Current wording

The following table presents a summary of our cash flows for the six months ended June 30, 2025 and 2024, and the dollar and percentage changes between the periods:

Previous wording

Cash flows provided by operating activities were $23.7 million for the three months ended March 31, 2025, compared with $1.7 million for the three months ended March 31, 2024. The increase was due primarily to an increase in net income, after excluding the impact of non-cash items and increase in net working capital due to the favorable changes in accounts receivable on account of higher revenues partially offset by unfavorable changes in accounts payable due to the timing of payments .

Current wording

Cash flows provided by operating activities were $49.4 million for the six months ended June 30, 2025, compared with $23.3 million for the six months ended June 30, 2024. The increase was due primarily to an increase in net working capital resulting from an increase in in accounts receivable due to higher revenues and accrued expenses due to increasing the reserve related to the FTC Matter, offset in part by a decrease in accounts payable due to the timing of payments and an increase in net loss.

Previous wording

Cash flows used in investing activities were immaterial for the three months ended March 31, 2025 and 2024.

Current wording

Cash flows used in investing activities were immaterial for the six months ended June 30, 2025 and 2024.