Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto included in this annual report. The following discussion contains forward-looking statements. Actual results could differ materially from the results discussed in the forward-looking statements. See "Item 1A. Risk Factors" and "Special Note Regarding Forward-Looking Statements".

Overview

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.

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.

Customizable Solutions: Beyond policy underwriting and sales, our marketplace offers customization of health benefits plans, vendors, claims, and network services. Brokers can select customized plans that suit their customers.

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.

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.

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.

Recent Developments

Engaged Amazon Web Services (AWS) Advanced Tier Services Partner Ciklum to accelerate development of Health In Tech's AI-Driven InsurTech platform.

Appointed former SAP and IBM executive Sri Rajagopalan as Chief Technology Officer to advance AI-driven Enterprise-Grade platform growth.

Appointed five-time founder Zain Hasan as Chief Growth Officer to accelerate revenue growth and scale distribution.

Introduced 100+ Pre-Configured Stop-Loss Self-funded Healthcare plans for employers, streamlining the renewal process and reducing cycle times.

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.

Key Factors Affecting our Performance

Our ability to retain and expand our network of brokers, TPAs, MGUs and other third-party agents.

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.

Our ability to enter into more collaborations with insurance carriers and offer new products and plans

Our business growth will depend on our ability to collaborate with a diverse range of insurance carriers to service the excess coverage needs of our clients. These collaborations are essential for expanding our portfolio of products and services. Our growth strategy is heavily reliant on our capability to introduce innovative insurance products and plans. By collaborating with multiple insurance carriers, we can leverage their expertise and resources to develop a broader range of offerings. This not only enables us to meet the specific requirements of our clients but also helps in staying competitive in a rapidly changing market.

Our ability to accurately perform underwriting procedures

Our growth is significantly dependent on our ability to accurately perform underwriting procedures and maintain strong relationships with brokers, TPAs, carriers, MGUs, and other third-party agents who utilize our platforms. A failure to conduct precise underwriting actuarial reviews and adjustments to our underwriting tools could result in increased costs and pricing for health plans.

While we are not bound by any agreements that would necessitate paying fees exceeding estimated insurance costs, nor do we have agreements that require indemnification of the carrier, such a failure could cause reputational harm to our eDIYBS platform. This could lead to increased premiums for plans accessed through our platform, potentially affecting our financial standing and market competitiveness.

Our ability to continue invest in technology and innovation

Our ongoing commitment to investing in technology is crucial for driving advancements in automation and enhancing operational efficiency across all aspects of our business. We are dedicated to regularly updating and developing new technology. This continuous investment in technology and innovation will position us at the forefront of the insurance technology.

Seasonality

Our business is generally affected by the seasonal patterns of our enrollment and medical expenses. Usage of our underwriting and quoting platform is seasonal, primarily due to the common renewal of health plan policies in December and January. While we believe we have visibility into the seasonality of our business, our rapid growth rate over the last couple years may have made seasonal fluctuations more difficult to detect. If our rate of growth slows over time, seasonal or cyclical variations in our operations may become more pronounced, and our business, results of operations and financial position may be adversely affected.

Key Financial and Operating Performance Metrics

We regularly monitor a number of financial and operating metrics in order to measure our current performance and project our future performance. These metrics help us develop and refine our growth strategies and make strategic decisions. We discuss revenues, cost of revenues, and the components of operating expenses. We utilize other key metrics as described below.

Number of Enrolled Employees (EEs) Medical Health Plan Billed

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.

The following table sets forth the number of EEs billed for the periods indicated:

		Fiscal Year Ended December 31,								Period-to-Period Change
		2025				2024				EEs				Percentage
Number of EEs billed (End of period)			22,515				18,348				4,167				23	%

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.

Adjusted EBITDA

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.

Components of Operating Results

Revenues

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.

(i)

SMR is a program manager specializing in customized self-funded benefits programs for businesses. It creates health plans, selects networks and manages vendors, and sets up benefits plans on the marketplace, including benefits structures, coverage options, and provider networks. Licensed brokers log in to the marketplace to select and sell self-funded benefits plans to businesses. Our offerings encompass reference-based pricing, group insurance captives, community health plans, and association health programs. SMR collaborates with TPAs and licensed brokers to design health plans that meet the specific needs of employers. The revenue from SMR is derived from a set fee charged per enrolled employee (EE) per month (PEPM). The fee varies depending on the type of program selected by the broker. SMR's fees are paid by employers.

(ii)

ICE develops and maintains all underwriting models. It defines risk criteria based on risk guidelines provided by carriers, manages underwriting of risk, manages claims activity, ensures reinsurance reporting, and handles monthly reinsurance filings. The revenue from ICE is derived as a specific percentage from the premium received, in our capacity as the Managing General Underwriter (MGU) of insurance companies (Carriers). ICE's fees are paid by carriers.

(iii)

HI Card provides medical claims access data and claims negotiation for SMR's program members who select such services and provides 24/7 accessibility to all incurred medical data for employees who enroll in the HI Card service. Accordingly, all of the revenue we generate from HI Card is from SMR's program members, which are enrolled employees of the employer. The revenue generated from HI Card is derived from a set fee charged per enrolled employee (EE) per month (PEPM). The fee may vary depending on services or the network selected by the broker. Brokers are not obligated to utilize the HI Card service for the employers. HI Card's fees are paid by employers.

The following table sets forth the components of our revenues by subsidiaries and percentages of our total revenues for the periods presented:

		Fiscal Year Ended December 31,
		2025				% of revenue				2024				% of revenue
Revenues
Revenues from underwriting modeling (ICE)		$	6,864,545				20.6	%		$	6,649,271				34.1	%
Revenues from fees			26,462,966				79.4	%			12,841,635				65.9	%
SMR			26,462,966				79.4	%			9,849,300				50.5	%
HI Card			-				-	%			2,992,335				15.4	%
Total revenues			33,327,511				100.0	%			19,490,906				100.0	%

Cost of revenues

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 "Item 1A. Risk Factors - Risks Related to our Business and Industry" for additional information on the risks associated with our service offerings.

Sales and marketing expenses

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.

General and administrative expenses

General and administrative expenses primarily consist of personnel-related costs and related expenses for our executives, finance, legal, human resources, technical support, and administrative personnel as well as the costs associated with professional fees for external legal, accounting, and other consulting services, insurance premiums.

Research and development expenses

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.

Provision for income taxes

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.

We continually review the need for, and the adequacy of, valuation allowances, and recognize benefits from our deferred tax assets only when an analysis of both positive and negative factors indicates that it is more likely than not such benefits will be realized.

Results of Operations

The following table sets forth our consolidated statements of operations for the periods presented, both in absolute amount and as a percentage of our total revenues for the periods presented:

		Fiscal Year Ended December 31,
		2025				% of revenue				2024				% of revenue
Revenues
Revenues from underwriting modeling (ICE)		$	6,864,545				20.6	%		$	6,649,271				34.1	%
Revenues from fees			26,462,966				79.4	%			12,841,635				65.9	%
SMR			26,462,966				79.4	%			9,849,300				50.5	%
HI Card			-				-	%			2,992,335				15.4	%
Total revenues			33,327,511				100.0	%			19,490,906				100.0	%
Cost of revenues			12,389,783				37.2	%			4,051,439				20.8	%
Gross profit		$	20,937,728				62.8	%		$	15,439,467				79.2	%
Operating expenses
Sales and marketing expenses			4,185,766				12.6	%			3,158,257				16.2	%
General and administrative expenses			13,654,262				41.0	%			8,477,407				43.5	%
Research and development expenses			1,569,262				4.7	%			2,813,899				14.4	%
Total operating expenses			19,409,290				58.3	%			14,449,563				74.1	%
Other income (expense):
Interest income			409,922				1.2	%			122,885				0.6	%
Interest expenses			-				-	%			(495,000	)			(2.5	)%
Other income			118,399				0.4	%			271,211				1.4	%
Other expense			(382,587	)			(1.1	)%			-				-	%
Total other income (expense), net			145,734				0.5	%			(100,904	)			(0.5	)%
Income before income tax expense		$	1,674,172				5.0	%		$	889,000				4.6	%
Provision for income taxes			(395,330	)			(1.2	)%			(218,523	)			(1.1	)%
Net income		$	1,278,842				3.8	%		$	670,477				3.5	%
Other Financial Data:
Adjusted EBITDA(1)		$	4,112,833				12.3	%		$	2,270,745				11.7	%

(1)

We define adjusted EBITDA as net income before net interest expense, taxes and amortization expense, adjusted to eliminate stock-based compensation expense and provision for credit losses on other receivables. See "Adjusted EBITDA" below for more information and for a reconciliation of adjusted EBITDA to net income, the most directly comparable financial measure calculated and presented in accordance with GAAP.

Adjusted EBITDA

		Fiscal Year Ended December 31,
		2025				2024
Reconciliation from Net Income to Adjusted EBITDA:
Net income		$	1,278,842			$	670,477
Interest (income) expenses			(409,922	)			372,115
Amortization expense			900,577				541,141
Income tax expense			395,330				218,523
Stock-based compensation expense			1,570,419				468,489
Provision for credit losses on other receivables			377,587				-
Total net adjustments			2,833,991				1,600,268
Adjusted EBITDA		$	4,112,833			$	2,270,745

Consolidated Balance Sheet Data

		December 31,
		2025				2024
Cash and cash equivalents		$	7,669,754			$	7,849,248
Accounts receivable, net			756,288				1,647,103
Other receivables, net			3,467,814				500,252
Software			6,530,894				3,962,461
Total assets			23,089,961				15,768,489
Total liabilities			5,977,896				2,599,461
Total stockholders' equity			17,112,065				13,169,028

Cash and cash equivalents

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.

Accounts receivable, net

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.

Other receivables, net

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.

Software

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.

Total liabilities

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.

Total stockholders' equity

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.

Comparison of the Years Ended December 31, 2025 and 2024

Revenues

		Fiscal Year Ended December 31,
		2025								2024								Period-to-Period Change
		Amount				Percentage of Revenue				Amount				Percentage of Revenue				Amount				Percentage
Revenues from underwriting modeling (ICE)			6,864,545				20.6	%			6,649,271				34.1	%			215,274				3.2	%
Revenues from fees			26,462,966				79.4	%			12,841,635				65.9	%			13,621,331				106.1	%
SMR			26,462,966				79.4	%			9,849,300				50.5	%			16,613,666				168.7	%
HI Card			-				-	%			2,992,335				15.4	%			(2,992,335	)			(100.0	)%
Total revenues			33,327,511				100.0	%			19,490,906				100.0	%			13,836,605				71.0	%

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.

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.

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.

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.

Cost of revenues

		Fiscal Year Ended December 31,
		2025								2024								Period-to-Period Change
		Amount				Percentage of Revenue				Amount				Percentage of Revenue				Amount				Percentage of Revenue
Cost of revenues			12,389,783				37.2	%			4,051,439				20.8	%			8,338,344				16.4	%

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.

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.

Sales and marketing expenses

		Fiscal Year Ended December 31,
		2025								2024								Period-to-Period Change
		Amount				Percentage of Revenue				Amount				Percentage of Revenue				Amount				Percentage of Revenue
Sales and marketing expenses			4,185,766				12.6	%			3,158,257				16.2	%			1,027,509				(3.6	)%

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.

General and administrative expenses

		Fiscal Year Ended December 31,
		2025								2024								Period-to-Period Change
		Amount				Percentage of Revenue				Amount				Percentage of Revenue				Amount				Percentage of Revenue
General and administrative expenses:
Operations division			5,253,471				15.8	%			4,380,589				22.5	%			872,882				(6.7	)%
Administrative division			8,400,791				25.2	%			4,096,818				21.0	%			4,303,973				4.2	%
Total General and administrative expenses			13,654,262				41.0	%			8,477,407				43.5	%			5,176,855				(2.5	)%

We bifurcate general and administrative expenses as follows:

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.

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.

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.

Research and development expenses

		Fiscal Year Ended December 31,
		2025								2024								Period-to-Period Change
		Amount				Percentage of Revenue				Amount				Percentage of Revenue				Amount				Percentage of Revenue
Research and development expenses			1,569,262				4.7	%			2,813,899				14.4	%			(1,244,637	)			(9.7	)%

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.

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.

Income before income tax expense

		Fiscal Year Ended December 31,
		2025								2024								Period-to-Period Change
		Amount				Percentage of Revenue				Amount				Percentage of Revenue				Amount				Percentage of Revenue
Income before income tax expense			1,674,172				5.0	%			889,000				4.6	%			785,172				0.4	%

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.

Provision for income taxes

		Fiscal Year Ended December 31,
		2025								2024								Period-to-Period Change
		Amount				Percentage of Revenue				Amount				Percentage of Revenue				Amount				Percentage of Revenue
Provision for income taxes			(395,330	)			(1.2	)%			(218,523	)			(1.1	)%			(176,807	)			(0.1	)%

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.

Adjusted EBITDA

		Fiscal Year Ended December 31,
		2025								2024								Period-to-Period Change
		Amount				Percentage of Revenue				Amount				Percentage of Revenue				Amount				Percentage of Revenue
Adjusted EBITDA			4,112,833				12.3	%			2,270,745				11.7	%			1,842,088				0.6	%

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.

Liquidity and Capital Resources

Sources of Liquidity

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.

Our cash and cash equivalents as of December 31, 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 for us to continue as a going concern at least twelve months from the date of this Annual Report on Form 10-K.

Summary of Cash Flows

		Fiscal Year Ended December 31,
		2025				2024
Cash provided by (used in):
Operating activities		$	3,133,813			$	2,176,209
Investing activities			(3,125,921	)			(836,755	)
Financing activities			(187,386	)			4,093,444
Increase (Decrease) in cash and cash equivalents		$	(179,494	)		$	5,432,898

Operating Activities

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.

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.

Investing Activities

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.

Financing Activities

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.

Contractual Obligations and Commitments

Our principal commitments consist of obligations under our non-cancellable lease for our office. The following table summarizes the contractual obligation as of December 31, 2025. Future events could cause actual payments to differ from these estimates.

		Payment due by period
		Total				Less than 1 year				1 - 3 years				3 - 5 years				More than 5 years
Operating lease obligation			152,492				86,312				66,180				-				-

Critical Accounting Policies and Estimates

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.

Recent Accounting Pronouncements

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.

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.

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.

We do not believe that any other recently issued but not yet effective accounting pronouncements are expected to have a material effect on our consolidated financial statements.

JOBS Act

We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. We have elected to early adopt certain new accounting standards, as disclosed herein. As a result, these financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of our initial public offering, (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A Common Stock that is held by non-affiliates exceeds $700 million as of the prior June 30, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. References herein to emerging growth company will have the meaning associated with it in the JOBS Act.