What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-08-09 compared with 2021-05-10 · 247 added, 133 removed, 515 unchanged (42% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

March 31, 2021 December 31, 2020

Assets (Unaudited)

(in thousands, unaudited)

June 30, 2021 December 31, 2020 *

Current assets:

13 unchanged sentences

Total assets $ 1,211,738 $ 1,040,022

Liabilities and stockholders’ equity

Liabilities, Series A preferred stock, and stockholders’ equity

Current liabilities:

6 unchanged sentences

Total current liabilities 53,009 84,408

Commitments and contingencies

Deferred income taxes – non-current 64,925 72,317

1 unchanged sentence

Other non-current liabilities 4,969 4,370

Total liabilities 161,480 202,464

Commitments and contingencies

Series A convertible preferred stock 218,504 —

Stockholders’ equity:

5 unchanged sentences

Total stockholders’ equity 831,754 837,558

Total liabilities and stockholders’ equity $ 1,017,795 $ 1,040,022

Total liabilities, Series A preferred stock, and stockholders’ equity $ 1,211,738 $ 1,040,022

* See Note 1 – Summary of Business and Significant Accounting Policies

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

(in thousands, except per share amounts, unaudited)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Commission $ 89,823 $ 80,773 $ 216,875 $ 180,442

10 unchanged sentences

Total operating costs and expenses 121,890 95,020 256,746 200,397

Income (loss) from operations ( 642 ) 1,031

Loss from operations ( 25,333 ) ( 6,254 ) ( 25,975 ) ( 5,223 )

Other income, net 172 452 322 825

Income (loss) before provision for (benefit from) income taxes ( 492 ) 1,404

Provision for (benefit from) income taxes 308 ( 2,048 )

Loss before benefit from income taxes ( 25,161 ) ( 5,802 ) ( 25,653 ) ( 4,398 )

Benefit from income taxes ( 6,752 ) ( 2,432 ) ( 6,444 ) ( 4,480 )

Net income (loss) ( 18,409 ) ( 3,370 ) ( 19,209 ) 82

Net income (loss) per share:

Paid-in-kind dividends for preferred stock ( 3,082 ) — ( 3,082 ) —

Change in preferred stock redemption value ( 1,397 ) — ( 1,397 ) —

Net income (loss) attributable to common stockholders $ ( 22,888 ) $ ( 3,370 ) $ ( 23,688 ) $ 82

Net income (loss) per share attributable to common stockholders:

Basic $ ( 0.86 ) $ ( 0.13 ) $ ( 0.89 ) $ —

12 unchanged sentences

(in thousands, unaudited)

Three Months Ended March 31, 2021

Three Months Ended June 30, 2021

Common Stock Additional Paid-in

1 unchanged sentence

Shares Amount Shares Amount

Balance as of December 31, 2020 37,755 $ 38 $ 721,013 11,831 $ ( 199,998 ) $ 316,155 $ 350 $ 837,558

Balance as of March 31, 2021 37,993 $ 38 $ 728,213 11,912 $ ( 199,998 ) $ 315,355 $ 317 $ 843,925

Issuance of common stock in connection with equity incentive plans 63 — 517 — — — — 517

Repurchase of shares to satisfy employee tax withholding obligations — — ( 870 ) 13 — — — ( 870 )

Changes in convertible preferred stock — — — — — ( 4,479 ) — ( 4,479 )

Issuance of common stock for employee stock purchase program 38 — 2,248 — — — — 2,248

Stock-based compensation — — 8,798 — — — — 8,798

1 unchanged sentence

Net loss — — — — — ( 18,409 ) — ( 18,409 )

Balance as of June 30, 2021 38,094 $ 38 $ 738,906 11,925 $ ( 199,998 ) $ 292,467 $ 341 $ 831,754

Three Months Ended June 30, 2020

Common Stock Additional Paid-in

Capital Treasury Stock Retained Earnings Accumulated Other Comprehensive Income Total Stockholders’ Equity

Shares Amount Shares Amount

Balance as of March 31, 2020 37,258 $ 37 $ 717,380 11,649 $ ( 199,998 ) $ 274,157 $ 110 $ 791,686

Three Months Ended March 31, 2020

Issuance of common stock in connection with equity incentive plans 115 — 223 — — — — 223

Repurchase of shares to satisfy employee tax withholding obligations — — ( 3,785 ) 49 — — — ( 3,785 )

Stock-based compensation — — 7,158 — — — — 7,158

Other comprehensive income, net of tax — — — — — — 143 143

Net loss — $ — $ — — $ — $ ( 3,370 ) $ — $ ( 3,370 )

Balance as of June 30, 2020 37,373 $ 37 $ 720,976 11,698 $ ( 199,998 ) $ 270,787 $ 253 $ 792,055

The accompanying notes are an integral part of these condensed consolidated financial statements.

EHEALTH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, unaudited)

Six Months Ended June 30, 2021

Common Stock Additional Paid-in

2 unchanged sentences

Balance as of December 31, 2020 37,755 $ 38 $ 721,013 11,831 $ ( 199,998 ) $ 316,155 $ 350 $ 837,558

Issuance of common stock in connection with equity incentive plans 301 — 802 — — — — 802

Repurchase of shares to satisfy employee tax withholding obligations — — ( 5,907 ) 94 — — — ( 5,907 )

Changes in convertible preferred stock — — — — — ( 4,479 ) — ( 4,479 )

Issuance of common stock for employee stock purchase program 38 — 2,248 — — — — 2,248

Stock-based compensation — — 20,750 — — — — 20,750

Other comprehensive income, net of tax — — — — — — ( 9 ) ( 9 )

Net loss — — — — — ( 19,209 ) — ( 19,209 )

Balance as of June 30, 2021 38,094 $ 38 $ 738,906 11,925 $ ( 199,998 ) $ 292,467 $ 341 $ 831,754

Six Months Ended June 30, 2020

Common Stock Additional Paid-in

Capital Treasury Stock Retained Earnings Accumulated Other Comprehensive Income Total Stockholders’ Equity

Shares Amount Shares Amount

Balance as of December 31, 2019 34,752 $ 35 $ 455,159 11,616 $ ( 199,998 ) $ 271,852 $ 116 $ 527,164

Cumulative effect from the adoption of ASU 2016-13 — — — — — ( 1,147 ) — ( 1,147 )

6 unchanged sentences

Net income — — — — — 82 — 82

Balance as of March 31, 2020 37,258 $ 37 $ 717,380 11,649 $ ( 199,998 ) $ 274,157 $ 110 $ 791,686

Balance as of June 30, 2020 37,373 $ 37 $ 720,976 11,698 $ ( 199,998 ) $ 270,787 $ 253 $ 792,055

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

(in thousands, unaudited)

Three Months Ended March 31,

Six Months Ended June 30,

Operating activities:

Net income (loss) $ ( 19,209 ) $ 82

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Depreciation and amortization 2,202 1,681

13 unchanged sentences

Accrued expenses and other liabilities 793 2,214

Net cash provided by operating activities 42,809 8,907

Net cash provided by (used in) operating activities 10,726 ( 12,398 )

Investing activities:

3 unchanged sentences

Proceeds from redemption and maturities of marketable securities 41,514 13,250

Net cash provided by (used in) investing activities 10,497 ( 64,136 )

Net cash used in investing activities ( 36,344 ) ( 146,569 )

Financing activities:

Proceeds from issuance of preferred stock, net of issuance costs 214,025 —

Proceeds from issuance of common stock, net of issuance costs — 228,024

Net proceeds from exercise of common stock options 285 1,091

Net proceeds from exercise of common stock options and employee stock purchases 3,051 1,314

Repurchase of shares to satisfy employee tax withholding obligations ( 5,907 ) ( 8,160 )

1 unchanged sentence

Principal payments in connection with leases ( 76 ) ( 83 )

Net cash provided by (used in) financing activities ( 4,790 ) 215,931

Net cash provided by financing activities

211,093 212,344

Effect of exchange rate changes on cash, cash equivalents and restricted cash 26 ( 1 )

10 unchanged sentences

Our platform integrates proprietary and third-party developed educational content regarding health insurance plans with decision support tools to aid consumers in what has traditionally been a confusing and opaque health insurance purchasing process, and to help them obtain the health insurance products that meet their individual health and economic needs.

Our omnichannel consumer engagement platform is designed to meet the consumer wherever they prefer to engage with us, and enables consumers to use our services online, through interactive chat, or by telephone with a licensed insurance agent.

Our omnichannel consumer engagement platform enables consumers to use our services online, through interactive chat, or by telephone with a licensed insurance agent.

We have created a marketplace that offers consumers a broad choice of insurance products that includes thousands of Medicare Advantage, Medicare Supplement, Medicare Part D prescription drug, individual and family, small business and other ancillary health insurance products from over 200 health insurance carriers across all fifty states and the District of Columbia.

Basis of Presentation – The accompanying condensed consolidated balance sheets as of March 31, 2021 and December 31, 2020 and the condensed consolidated statements of comprehensive income (loss), stockholders’ equity, and cash flows for the three months ended March 31, 2021 and 2020, respectively, are unaudited.

The condensed consolidated balance sheet data as of December 31, 2020 was derived from the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020, which was filed with the Securities and Exchange Commission on February 26, 2021.

Basis of Presentation – The accompanying condensed consolidated balance sheet as of June 30, 2021, the condensed consolidated statements of comprehensive income (loss) and stockholders’ equity for the three and six months ended June 30, 2021 and 2020, respectively, and the condensed consolidated statements of cash flows for the six months ended June 30, 2021 and 2020 are unaudited.

The accompanying financial statements and related notes should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K.

9 unchanged sentences

However, we believe that the disclosures made are adequate to make the information not misleading.

The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2020 and include all adjustments necessary for the fair presentation of our financial position as of March 31, 2021 and December 31, 2020, and our results of operations for the periods presented.

Our financial position as of March 31, 2021 and results of operations and cash flows for the three months ended March 31, 2021 were not materially impacted by the COVID-19 pandemic but the Company is continuously assessing the evolving situation related to the pandemic.

The results for the three months ended March 31, 2021 are not necessarily indicative of the results to be expected for any subsequent period or for the year ending December 31, 2021 and therefore should not be relied upon as an indicator of future results.

The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2020 and include all adjustments necessary for the fair presentation of our financial position as of June 30, 2021 and December 31, 2020, and our results of operations for the periods presented.

The results for the three and six months ended June 30, 2021 are not necessarily indicative of the results to be expected for any subsequent period or for the year ending December 31, 2021 and therefore should not be relied upon as an indicator of future results.

Subsequent to the issuance of our consolidated financial statements for the year ended December 31, 2020, we identified certain errors, including a $ 3.0 million under-recognition of stock-based compensation expense and a $ 1.5 million over-recognition of licensing costs for the year ended December 31, 2020.

We adjusted for these items in the first quarter of 2021 and the adjustments reduced our net income (loss) by approximately $ 1.5 million in our Condensed Consolidated Statement of Comprehensive Income (Loss) for the three months ended March 31, 2021.

We adjusted for these items in the first quarter of 2021 and the adjustments reduced our net loss by approximately $ 1.5 million, or $ 0.06 per basic and diluted share in our Condensed Consolidated Statement of Comprehensive Income (Loss) for the three months ended March 31, 2021.

These items also reduced our net loss by approximately $ 1.5 million, or $ 0.06 per basic and diluted share, on our Condensed Consolidated Statement of Comprehensive Income (Loss) for the six months ended June 30, 2021.

We evaluated the effects of these out-of-period adjustments, both qualitatively and quantitatively, and concluded that the errors and the correction thereof were immaterial both individually and in the aggregate to the current reporting period and the periods in which they originated, including quarterly reporting.

Significant Accounting Policies, Estimates and Judgments – The preparation of condensed consolidated financial statements and related disclosures in conformity with U.S.

GAAP requires management to make estimates, judgments and

EHEALTH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

assumptions that affect the amounts reported and disclosed in the condensed consolidated financial statements and accompanying notes.

Significant Accounting Policies, Estimates and Judgments – The preparation of condensed consolidated financial statements and related disclosures in conformity with U.S.

GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported and disclosed in the condensed consolidated financial statements and accompanying notes.

On an ongoing basis, we evaluate our estimates, including those related to, but not limited to, the useful lives of intangible assets, fair value of investments, recoverability of intangible assets, the commissions we expect to collect for each approved member cohort, valuation allowance for deferred income taxes, provision (benefit) for income taxes and the assumptions used in determining stock-based compensation.

5 unchanged sentences

As a result, our Medicare plan-related commission revenue is highest in our fourth quarter.

Our Medicare plan-related commission revenue is also elevated compared to the second and third quarters as a result of the reintroduction of the Medicare Advantage open enrollment period in the first quarter of 2019.

Any changes or additional enrollment periods may change the seasonality of our business.

For instance, due to the reintroduction of the Medicare Advantage open enrollment period that takes place in the first quarter of the year, our first quarter is generally the second-highest revenue generating quarter.

The majority of our individual and family health insurance plans are sold in the fourth quarter during the annual open enrollment period as defined under the federal Patient Protection and Affordable Care Act and related amendments in the Health Care and Education Reconciliation Act.

Individuals and families generally are not able to purchase individual and family health insurance outside of these open enrollment periods, unless they qualify for a special enrollment period as a result of certain qualifying events, such as losing employer-sponsored health insurance or moving to another state due to the recent COVID-19 pandemic.

Recently Adopted Accounting Pronouncement

Income Taxes (Topic 740) – In December 2019, the FASB issued ASU No.

In the states where the Federally Facilitated marketplace operates as the state health insurance exchange, individuals and families generally are not able to purchase individual and family health insurance outside of the annual enrollment period, unless they qualify for a special enrollment period as a result of certain qualifying events, such as losing employer-sponsored health insurance or moving to another state.

Recently Adopted Accounting Pronouncements

Income Taxes (Topic 740) – In December 2019, the Financial Accounting Standard Board (“FASB”) issued ASU No.

2019-12, Income Tax, Simplifying the Accounting for Income Taxes , which aims to simplify the accounting for income taxes.

3 unchanged sentences

ASU 2020-10 is intended to facilitate codification updates for technical corrections, such as conforming amendments, clarifications to guidance, simplifications to wording or structure of guidance, and other minor improvements.

It contains amendments that improve the consistency of the codification by including all disclosure guidance in the appropriate disclosure section and other updates that varies in nature.

It contains amendments that improve the consistency of the codification by including all disclosure guidance in the appropriate disclosure section and other updates that vary in nature.

We adopted this guidance in the first quarter of 2021 with no material impact on our condensed consolidated financial statements and disclosures.

8 unchanged sentences

Disaggregation of Revenue – The table below depicts the disaggregation of revenue by product and is consistent with how we evaluate our financial performance (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Medicare Advantage $ 69,142 $ 58,586 $ 172,667 $ 126,933

28 unchanged sentences

Commission revenue by segment is presented in the table below (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Commission Revenue from Members Approved During the Period (1)

1 unchanged sentence

Net Commission Revenue from Members Approved in Prior Periods (2)

( 11,543 ) 685 ( 11,529 ) 9,664

Total Medicare Segment Commission Revenue $ 67,055 $ 72,850 $ 181,747 $ 162,954

3 unchanged sentences

Commission Revenue from Renewals of Small Business Members During the Period (3)

1,723 1,487 4,410 3,883

Net Commission Revenue from Members Approved in Prior Periods (2)

15,837 2,074 19,115 3,447

Total IFP/SMB Segment Commission Revenue $ 22,768 $ 7,923 $ 35,128 $ 17,488

2 unchanged sentences

Commission Revenue from Renewals of Small Business Members During the Period (3)

1,723 1,487 4,410 3,883

Total Net Commission Revenue from Members Approved in Prior Periods (2)(4)

4,294 2,759 7,586 13,111

Total Commission Revenue $ 89,823 $ 80,773 $ 216,875 $ 180,442

4 unchanged sentences

(3) Commission revenue from renewals of small business members during the period was previously included in net commission revenue from members approved in prior periods.

However, starting in the first quarter of 2021, we enhanced our reporting by separately disclosing commission revenue from renewals of small business members during the period in a separate line item.

(4) The impacts of total net commission revenue from members approved in prior periods were $ 0.12 and $ 0.42 per basic share, respectively, or $ 0.12 and $ 0.40 per diluted share, respectively, for the three months ended March 31, 2021 and 2020, respectively.

The total reductions to revenue from members approved in prior periods were $ 0.9 million for the three months ended March 31, 2021 and immaterial for the three months ended March 31, 2020.

These reductions to revenue primarily related to the Individual, Family and Small Business segment.

However, beginning in the first quarter of 2021, we enhanced our reporting by separately disclosing commission revenue from renewals of small business members during the period in a separate line item.

(4) The impacts of total net commission revenue from members approved in prior periods were $ 0.16 and $ 0.10 per basic and diluted share for the three months ended June 30, 2021 and 2020, respectively.

The impacts of total net commission revenue from members approved in prior periods were $ 0.28 and $ 0.51 per basic share, or $ 0.28 and $ 0.49 per diluted share, for the six months ended June 30, 2021 and 2020, respectively.

The total reductions to revenue from members approved in prior periods were $ 18.5 million and $ 1.6 million for the three months ended June 30, 2021 and 2020, respectively, and $ 19.4 million and $ 1.6 million for the six months ended June 30, 2021 and 2020, respectively.

These reductions to revenue primarily related to the Medicare segment.

Note 3 – Supplemental Financial Statement Information

7 unchanged sentences

Our cash, cash equivalent and restricted cash balances are summarized as follows (in thousands):

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Cash $ 35,192 $ 39,552

3 unchanged sentences

Total cash, cash equivalents and restricted cash $ 232,614 $ 47,113

As of March 31, 2021 and December 31, 2020, we had $ 3.4 million of restricted cash which was classified as a non-current asset on our Condensed Consolidated Balance Sheets.

As of June 30, 2021 and December 31, 2020, we had $ 3.4 million of restricted cash which was classified as a non-current asset on our Condensed Consolidated Balance Sheets.

This amount collateralizes letters of credit related to certain lease commitments.

1 unchanged sentence

We do not require collateral or other security for our contract assets and accounts receivable.

We believe the potential for collection issues with any of our customers was minimal as of March 31, 2021.

We believe the potential for collection issues with any of our customers was minimal as of June 30, 2021.

We estimate an allowance for credit losses using relevant available information from internal and external sources, related to past events, current conditions, and reasonable and supportable forecasts.

4 unchanged sentences

Credit loss expenses are assessed quarterly and included in general and administrative expense on our Condensed Consolidated Statement of Comprehensive Income (Loss).

We considered the impact of recent events and global economic conditions when evaluating the appropriate adjustments to our allowance for credit losses as of March 31, 2021.

Determining the extent of these adjustments in the three months ended March 31, 2021 was especially challenging because we do not have any historical loss information for a period of similar economic uncertainty.

There were no write-offs during either the three or six months ended June 30, 2021.

We considered the impact of recent events and global economic conditions when evaluating the appropriate adjustments to our allowance for credit losses as of June 30, 2021.

We also considered the current and expected future economic and market conditions surrounding the COVID-19 pandemic.

The change in the allowance for credit losses for the three months ended March 31, 2021 is summarized as follows (in thousands):

Three Months Ended March 31, 2021

The change in the allowance for credit losses for the six months ended June 30, 2021 is summarized as follows (in thousands):

Beginning balance $ 2,026

4 unchanged sentences

Our contract assets – commission receivable activities, net of credit loss allowances are summarized as follows (in thousands):

Three Months Ended March 31, 2021

Six Months Ended June 30, 2021

Medicare Segment IFP/SMB Segment Total

1 unchanged sentence

Commission revenue from members approved during the period 193,276 11,603 204,879

Commission revenue from renewals of small business members during the period (1)

Commission revenue from renewals of small business members during the periods (1)

— 4,410 4,410

Net commission revenue adjustments from members approved in prior period 14 3,278 3,292

Net commission revenue adjustments from members approved in prior periods ( 11,529 ) 19,115 7,586

Cash receipts ( 230,446 ) ( 23,437 ) ( 253,883 )

1 unchanged sentence

Ending balance $ 691,144 $ 64,478 $ 755,622

Three Months Ended March 31, 2020

Six Months Ended June 30, 2020

Medicare Segment IFP/SMB Segment Total

1 unchanged sentence

Commission revenue from members approved during the period 153,290 10,158 163,448

Commission revenue from renewals of small business members during the period (1)

Commission revenue from renewals of small business members during the periods (1)

— 3,883 3,883

7 unchanged sentences

Our financial instruments that are exposed to concentrations of credit risk principally consist of cash, cash equivalents, marketable securities, contract assets – commissions receivable, and accounts receivable.

We invest our cash and cash equivalents with major banks and financial institutions and, at times, such investments are in excess of federally insured limits.

We invest our cash and cash equivalents with major banks and financial institutions and such investments are in excess of federally insured limits.

We also have deposits with major banks in China that are denominated in both U.S.

1 unchanged sentence

federal government.

The deposits in China were $ 3.5 million as of March 31, 2021.

The deposits in China were $ 0.4 million as of June 30, 2021.

See Note 4 – Fair Value Measurements for more information regarding our marketable securities.

3 unchanged sentences

Carriers that represented 10% or more of our total contract assets and accounts receivable balance are summarized as of the dates presented below:

March 31, 2021 December 31, 2020

UnitedHealthCare (1)

June 30, 2021 December 31, 2020

Humana 27 % 21 %

UnitedHealthCare (1)

Centene (1)(2)

2 unchanged sentences

(2) Centene Corporation acquired WellCare Health Plans, Inc.

in 2020, and the contract assets and accounts receivable of WellCare are included in the percentage calculation for March 31, 2021 and December 31, 2020.

in 2020, and the contract assets and accounts receivable of WellCare are included in the percentage calculation for June 30, 2021 and December 31, 2020.

Prepaid Expenses and Other Current Assets – Our prepaid expenses and other current assets are summarized as of the periods presented as follows (in thousands):

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Prepaid maintenance contracts $ 6,270 $ 7,715

Prepaid licenses 2,302 —

Prepaid expenses 2,149 6,628

14 unchanged sentences

Our financial assets measured at fair value on a recurring basis are summarized below by their classification within the fair value hierarchy as of the dates presented below (in thousands):

March 31, 2021

June 30, 2021

Carrying Value Level 1 Level 2 Level 3 Total

5 unchanged sentences

Commercial paper 62,003 — 62,003 — 62,003

Corporate bond 2,538 — 2,538 — 2,538

Total assets measured at fair value $ 269,898 $ 49,999 $ 219,899 $ — $ 269,898

7 unchanged sentences

Total assets measured at fair value $ 53,827 $ 4,207 $ 49,620 $ — $ 53,827

Our cash equivalents were invested in money market funds and commercial paper with original maturity of 90 days or less were classified as Level 1.

Our cash equivalents that were invested in money market funds and commercial paper with original maturity of 90 days or less were classified as Level 1.

We endeavor to utilize the best available information in measuring fair value.

We used observable prices in active markets in determining the classification of our money market funds as Level 1.

As of March 31, 2021, our Level 2 assets included our available for sale marketable securities, which consisted of commercial paper and agency bonds with maturity less than one year.

As of June 30, 2021, our Level 2 assets included our available for sale marketable securities, which consisted of commercial paper, agency bonds, and a corporate bond with maturities of less than one year.

We classify our marketable debt securities within Level 2 in the fair value hierarchy, because we use quoted market prices to the extent available or alternative pricing sources and models utilizing market observable inputs to determine fair value.

Our portfolio primarily consisted of financial instruments with a credit rating of AA or equivalent by S&P Rating and Moody's Investor Services.

There were no transfers between the hierarchy levels during the three months ended March 31, 2021 and year ended December 31, 2020.

There were no transfers between the hierarchy levels during either the six months ended June 30, 2021 or the year ended December 31, 2020.

The following table summarizes our cash equivalents and available-for-sale debt securities by contractual maturity (in thousands):

As of March 31, 2021

As of June 30, 2021

Amortized Cost Fair Value

2 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unrealized gains and losses on available-for-sale debt securities that are not credit related are included in accumulated other comprehensive income and summarized as follows as of March 31, 2021 (in thousands):

Amortized Cost Unrealized Gain Unrealized Loss Fair Value

5 unchanged sentences

Commercial paper 62,003 3 ( 3 ) 62,003

Corporate bond 2,538 — — 2,538

Total $ 269,895 $ 10 $ ( 7 ) $ 269,898

As of March 31, 2021, there were twelve securities in net loss positions and their unrealized losses were immaterial.

We did not record any credit losses regarding our available-for-sales debt securities during the three months ended March 31, 2021.

As of June 30, 2021, there were thirty-five securities in net loss positions and their unrealized losses were immaterial individually and in aggregate.

We did not record any credit losses regarding our available-for-sales debt securities during the six months ended June 30, 2021.

We do not intend to sell these securities and it is more likely than not that we will not be required to sell these securities before the recovery of their amortized cost basis.

Note 5 – Equity

Public Offering of Common Stock – Pursuant to an effective registration statement that was filed on December 17, 2018, and amended on January 22, 2019 and March 2, 2020, we entered into an underwriting agreement in March 2020 to issue a total of 2.1 million shares of common stock, which included the exercise in full of the underwriters’ option to purchase 0.3 million additional shares of common stock, at a price to the public of $ 115.00 per share in March 2020.

Net proceeds from the offering were approximately $ 228.0 million after deducting underwriting discounts, commissions and expenses of the offering.

Stock Repurchase Programs – We had no stock repurchase activity during the three months ended March 31, 2021.

In addition to 10.7 million shares repurchased under our previous repurchase programs, we have in treasury 1.2 million shares as of March 31, 2021 that were previously surrendered by employees to satisfy tax withholding due in connection with the vesting of certain restricted stock units.

As of March 31, 2021 and December 31, 2020, we had a total of 11.9 million shares and 11.8 million shares, respectively, held in treasury.

Stock Repurchase Programs – We had no stock repurchase activity during the three and six months ended June 30, 2021.

In addition to 10.7 million shares repurchased under our previous repurchase programs, we have in treasury 1.2 million shares as of June 30, 2021 that were previously surrendered by employees to satisfy tax withholding due in connection with the vesting of certain restricted stock units.

As of June 30, 2021 and December 31, 2020, we had a total of 11.9 million shares and 11.8 million shares, respectively, held in treasury.

For accounting purposes, common stock repurchased under our stock repurchase programs is recorded based upon the settlement date of the applicable trade.

1 unchanged sentence

Stock-Based Compensation Expense – Our stock-based compensation expense is summarized as follows by award types (in thousands):

Three Months Ended March 31,

Common stock options $ 180 $ 306

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Restricted stock units* $ 7,646 $ 6,369 $ 18,365 $ 14,777

Common stock options 140 307 320 613

Employee stock purchase plan 459 — 962 —

Total stock-based compensation expense $ 8,245 $ 6,676 $ 19,647 $ 15,390

3 unchanged sentences

The following table summarizes stock-based compensation expense by operating function for the periods presented below (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Marketing and advertising $ 2,140 $ 1,539 $ 4,625 $ 3,269

5 unchanged sentences

Total stock-based compensation $ 8,798 $ 7,158 $ 20,750 $ 16,120

Note 6 — Net Income (Loss) Per Share

Basic net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding for the period.

Diluted net income (loss) per share is computed by dividing the net income (loss) for the period by the weighted average number of common and common equivalent shares outstanding during the period.

Diluted net income (loss) per share is computed giving effect to all potential dilutive common stock equivalent shares, including options, restricted stock units and shares to be issued under our ESPP.

The dilutive effect of outstanding awards is reflected in diluted net income (loss) per share by application of the treasury stock method.

The following table sets forth the computation of basic and diluted net income (loss) per share (in thousands, except per share amounts):

Three Months Ended March 31,

Net income (loss) $ ( 800 ) $ 3,452

Note 6 — Convertible Preferred Stock

On April 30, 2021 (the “Closing Date”), we issued and sold to Echelon Health SPV, LP (“H.I.G.”), an investment vehicle of H.I.G.

Capital, in a private placement, 2,250,000 shares of our newly designated Series A convertible preferred stock (the “Series A preferred stock”), par value $ 0.001 per share, at an aggregate purchase price of $ 225.0 million.

We received $ 214.0 million in net proceeds from the private placement with H.I.G., net of sales commissions and certain transaction fees totaling $ 11.0 million.

The Series A preferred stock ranks senior to all other equity securities of the Company with respect to dividend rights and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company.

Dividends – Dividends initially accrue on the Series A preferred stock daily at 8 % per annum on the stated value of $ 100 per share (“Stated Value”) and compound semiannually, payable in kind (“PIK”) until the second anniversary of the Closing Date on June 30 and December 31 of each year (each, a “Dividend Payment Date”), beginning on June 30, 2021, and thereafter 6 % PIK and 2 % payable in cash in arrears on June 30 and December 31 of each year, beginning on June 30, 2023.

PIK dividends are cumulative and are added to the Accrued Value (as defined below).

“Accrued Value” means, as of any date, with respect to any share of Series A preferred stock, the sum of the Stated Value per share plus, on each Dividend Payment Date, on a cumulative basis, all accrued PIK dividends on such share that have not previously compounded and been added to the Accrued Value.

The Series A preferred stock participates, on an as-converted basis in all dividends paid to the holders of our common stock.

Conversion Rights – The Series A preferred stock is convertible, at any time after May 31, 2021, into common stock.

The Series A preferred stock is convertible at any time into common stock at a conversion rate equal to (i) the Accrued Value plus accrued PIK dividends that have not yet been added to the Accrued Value, (ii) divided by the conversion price as of the applicable conversion date (the “Conversion Price”).

As of the date of this report, the Conversion Price is equal to $ 79.5861 per share.

This Conversion Price is subject to further adjustment and the number of shares of common stock issuable upon conversion of the Series A preferred stock is subject to certain limitations, each as set forth in the Certificate of Designations of Series A preferred stock, as filed with the Secretary of State of the State of Delaware on April 30, 2021 (the “Certificate of Designations”).

Redemption Put Right – At any time on or after the sixth anniversary of the Closing Date, holders of the Series A preferred stock will have the right to cause the Company to redeem all or any portion of the Series A preferred stock in cash at an amount equal to the greater of (i) 135 % of the Accrued Value per share as of the redemption date, plus accrued PIK dividends that have not yet been added to the Accrued Value and (ii) the amount per share that would be payable on an as-converted basis on such Series A preferred stock at the then-current Accrued Value, plus accrued PIK dividends that have not yet been added to the Accrued Value, and in either case of (i) or (ii) plus any unpaid cash dividends that would have otherwise been settled in cash in connection with such conversion (the greater of (i) and (ii), the “Redemption Price”).

EHEALTH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Redemption Call Right – At any time on or after the sixth anniversary of the Closing Date, the Company will have the right (but not the obligation) to redeem out of legally available funds and for cash consideration all (but not less than all) of the Series A preferred stock upon at least 30 days prior written notice at an amount equal to the Redemption Price.

Board Nomination Rights – H.I.G.

is entitled to nominate one individual for election to the Company’s board of directors (the “Board”) so long as it continues to own at least 30 % of the common stock issuable or issued upon conversion of the Series A preferred stock originally issued to it in the private placement.

also has the right to nominate an additional individual to the Board if the Company fails to maintain certain levels of commissions receivable and liquidity.

As of the date of this report, H.I.G.

has conditionally waived its director nomination rights.

Voting Rights – The Series A preferred stock will vote together with the common stock as a single class on all matters submitted to a vote of the holders of the common stock (subject to certain voting limitations set forth in, and the terms and conditions of, the Certificate of Designations).

Each holder of Series A preferred stock shall be entitled to the number of votes, rounded down to the nearest whole number, equal to the product of (i) the aggregate Accrued Value of the issued and outstanding shares of Series A preferred stock divided by the Minimum Price (as defined below), multiplied by (ii) a fraction, the numerator of which is the number of shares of Series A preferred stock held by such holder and the denominator of which is the aggregate number of issued and outstanding shares of Series A preferred stock.

“Minimum Price” means the lower of:

(i) the Nasdaq Official Closing Price per share of common stock on the Closing Date;

or (ii) the average Nasdaq Official Closing Price per share of common stock for the five trading days immediately prior to the Closing Date.

Holders of Series A preferred stock will have one vote per share on any matter on which the holders of the Series A preferred stock are entitled to vote separately as a class (subject to certain voting limitations set forth in, and the terms and conditions of, the certificate of designations).

Mandatory Conversion of the Series A Preferred Stock – At any time on or after the third anniversary of the Closing Date, if the volume-weighted average price per share of our common stock is greater than 167.5 % of the then-current Conversion Price for 20 consecutive trading days in a 30 -day trading day period, the Company will have the right to convert all, but not less than all, of the Series A preferred stock into common stock at a conversion rate with respect to each share of Series A Preferred Stock of (i) the Accrued Value plus accrued PIK dividends that have not yet been added to the Accrued Value, (ii) divided by the then applicable Conversion Price.

Covenants and Liquidity Requirements – As long as H.I.G.

continues to own at least 30 % of the Series A preferred stock originally issued to it in the private placement, the consent of H.I.G.

will be required for the Company to incur certain indebtedness and to take certain other corporate actions as set forth in the Company's investment agreement with H.I.G.

entered into on February 17, 2021 (the “Investment Agreement”).

In addition, the Company is required to maintain an asset coverage ratio (as defined in the Investment Agreement) of at least 2 x, which increases to 2.5 x thirty months after the date of the Investment Agreement.

Additionally, the Investment Agreement requires the Company to maintain a minimum liquidity amount (as defined in the Investment Agreement) for certain periods that ranges from $ 65 million to $ 125 million.

If the Company fails to maintain the minimum asset coverage ratio or minimum liquidity amount as of a certain date or for a certain time period required by the Investment Agreement and H.I.G continues to own at least 30 % of the Series A preferred stock originally issued to it in the private placement, H.I.G will have the right to nominate an additional director to the Board, and the consent of H.I.G.

will be required to approve the Company's annual budget, hire or terminate certain key executives, and incur certain indebtedness as outlined in the Investment Agreement.

will no longer have these additional board nomination and consent rights if the Company is able to satisfy the minimum liquidity amount requirements in the Investment Agreement for any subsequent 12 consecutive months.

Our Series A preferred stock is considered temporary equity in our condensed consolidated financial statements.

We have determined there are no material embedded features that require recognition as a derivative asset or liability.

We recognized the Series A preferred stock at its stated amount less issuance costs of $ 11.0 million, or $ 214.0 million.

As of June 30, 2021, the estimated Series A preferred stock redemption value equals 135 % of the Accrued Value per share as of the redemption date, plus any accrued and unpaid dividends, which is significantly in excess of the fair value of the common stock into which the Series A preferred stock is convertible as of June 30, 2021.

We have elected to apply the accretion method to adjust the carrying value of the Series A preferred stock to its redemption value at the earliest date of redemption, April 30, 2027.

Amounts recognized to accrete the Series A preferred stock to its estimated redemption value are treated as a deemed dividend and are recorded as a reduction to retained earnings.

The estimated redemption value will vary in

EHEALTH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

subsequent periods due to the redemption put right described above and we have elected to recognize such changes prospectively.

No shares of Series A preferred stock have been converted and the Series A preferred stock was convertible into 2.9 million shares of common stock as of June 30, 2021.

The following table summarizes the proceeds and changes to our Series A preferred stock (in thousands):

Gross proceeds $ 225,000

issuance costs 10,975

Net proceeds $ 214,025

Balance as of Closing Date $ 214,025

Accrued paid-in-kind dividends 3,083

Change in preferred stock redemption value 1,396

Balance as of June 30, 2021 $ 218,504

Note 7 – Net Income (Loss) Per Share Attributable to Common Stockholders

Our Series A preferred stock is considered a participating security which requires the use of two-class method for the computation of basic and diluted per share amounts.

Under the two-class method, earnings available to common stockholders for the period are allocated between common stockholders and participating securities according to dividends accumulated and participation rights in undistributed earnings.

Net loss attributable to common stockholders is not allocated to the convertible preferred stock as the holder of the Series A preferred stock does not have a contractual obligation to share in losses.

Basic net income (loss) attributable to common stockholders per share is computed by dividing net income (loss) available to common stockholders by the weighted-average number of common stock outstanding for the period.

Diluted net income (loss) attributable to common stockholders per share is computed by dividing the net income (loss) available to common stockholders for the period by the weighted average number of common and common equivalent shares outstanding during the period.

Diluted net income (loss) attributable to common stockholders per share reflects all potential dilutive common stock equivalent shares, including conversion of preferred stock, stock options, restricted stock units and shares to be issued under our employee stock purchase program (“ESPP”).

The following table sets forth the computation of basic and diluted net income (loss) attributable to common stockholders per share (in thousands, except per share amounts):

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Net income (loss) attributable to common stockholders $ ( 22,888 ) $ ( 3,370 ) $ ( 23,688 ) $ 82

Shares used in per share calculation – basic 26,677 26,358 26,639 25,539

1 unchanged sentence

Shares used in diluted share calculation 26,677 26,358 26,639 26,758

Net income (loss) per share – basic $ ( 0.03 ) $ 0.14

Net income (loss) per share – diluted $ ( 0.03 ) $ 0.13

Net income (loss) attributable to common stockholders per share – basic $ ( 0.86 ) $ ( 0.13 ) $ ( 0.89 ) $ 0.00

Net income (loss) attributable to common stockholders per share – diluted $ ( 0.86 ) $ ( 0.13 ) $ ( 0.89 ) $ 0.00

EHEALTH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For each of the three months ended March 31, 2021 and 2020, we had securities outstanding that could potentially dilute per share amounts, but the shares from the assumed conversion or exercise of these securities were excluded in the computation of diluted net income (loss) per share as their effect would have been anti-dilutive.

For each of the three and six months ended June 30, 2021 and 2020, we had securities outstanding that could potentially dilute per share amounts, but the shares from the assumed conversion or exercise of these securities were excluded in the computation of diluted net income (loss) per share as their effect would have been anti-dilutive.

The number of outstanding anti-dilutive shares that were excluded from the computation of diluted net income (loss) per share consisted of the following (in thousands):

Three Months Ended March 31,

Common stock options 363 n/a

Restricted stock units 1,090 n/a

Total 1,460 n/a

* There were no antidilutive shares for this period.

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Convertible preferred stock 2,827 — 2,827 —

Restricted stock units 885 760 978 42

Common stock options 351 460 358 —

Total 4,064 1,220 4,165 42

Note 8 – Commitments and Contingencies

2 unchanged sentences

As the benefits of these agreements are experienced uniformly over the applicable contractual periods, we record the related service and licensing expenses on a straight-line basis, although actual cash payment obligations under certain of these agreements fluctuate over the terms of the agreements.

Our future minimum payments under non-cancellable contractual service and licensing obligations as of March 31, 2021 (in thousands):

Our future minimum payments under non-cancellable contractual service and licensing obligations as of June 30, 2021 (in thousands):

For the Years Ending December 31,

Remainder of 2021 $ 5,273

Thereafter 1,353

Total $ 19,016

5 unchanged sentences

An estimated loss contingency is accrued in the condensed consolidated financial statements if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

There was no material litigation-related accrual during the three months ended March 31, 2021.

There was no material litigation-related accrual during the three and six months ended June 30, 2021.

Legal proceedings or other contingencies could result in material costs, even if we ultimately prevail.

3 unchanged sentences

Securities Class Action – On April 8, 2020 and April 30, 2020, two purported class action lawsuits were filed against us, our chief executive officer, Scott N.

Flanders, our chief financial officer, Derek N.

Flanders, our then-chief financial officer, Derek N.

Yung, and our then-chief operating officer, David K.

5 unchanged sentences

eHealth, Inc.

et al., Case No.

4:20-cv-02967 (N.D.

11 unchanged sentences

Derivative Actions – On July 7, 2020 and October 13, 2020, two derivative lawsuits were filed against our chief executive officer, Mr.

Flanders, our chief financial officer, Mr.

Flanders, our then-chief financial officer, Mr.

Yung, our then-chief operating officer, Mr.

16 unchanged sentences

Co., in the Superior Court of the State of California for the County of Santa Clara (the “Le’Vias Complaint”).

Both complaints asserted claims under the California Private Attorney General Act (“PAGA”) on behalf of all current and former hourly-paid or non-exempt employees who work or have worked for us in California, based on alleged failures to comply with California wage and hour laws.

Both complaints asserted claims under the California Private Attorney General Act on behalf of all current and former hourly-paid or non-exempt employees who work or have worked for us in California, based on alleged failures to comply with California wage and hour laws.

The parties have entered into a court-approved settlement agreement that resolves both matters related to the Gonzalez and Le'Vias Complaints, and Plaintiffs Michael Le’Vias and Ramona Meadows have sought dismissal with prejudice of the Le’Vias Complaint.

11 unchanged sentences

The results of our operating segments are summarized for the periods presented below (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Medicare $ 73,231 $ 80,379 $ 194,252 $ 176,530

2 unchanged sentences

Segment profit:

Medicare segment profit (1)

Medicare segment profit (loss) (1)

$ ( 17,804 ) $ 14,996 $ 6,741 $ 38,132

Individual, Family and Small Business segment profit (1)

17,925 2,738 25,977 5,666

Total segment profit 121 17,734 32,718 43,798

6 unchanged sentences

Other income, net 172 452 322 825

Income (loss) before provision for (benefit from) income taxes $ ( 492 ) $ 1,404

Loss before benefit from income taxes $ ( 25,161 ) $ ( 5,802 ) $ ( 25,653 ) $ ( 4,398 )

_____________

(1) During the first quarter of 2021, we revised the calculation of segment profit by excluding amortization of capitalized software development costs to enhance comparability of our financial metrics with peer companies.

The amortization of capitalized software development costs were $ 2.8 million and $ 1.5 million for the first quarter of 2021 and 2020, respectively.

The amortization of capitalized software development costs were $ 2.9 million and $ 1.7 million for the three months ended June 30, 2021 and 2020, respectively, and $ 5.7 million and $ 3.2 million for the six months ended June 30, 2021 and 2020, respectively.

(2) Depreciation and amortization has been adjusted to include amortization of software development costs.

5 unchanged sentences

Long-lived assets by geographical area are summarized as follows (in thousands):

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

United States $ 43,519 $ 40,500

4 unchanged sentences

Significant Customers

Substantially all revenue for the three months ended March 31, 2021 and 2020 was generated from customers located in the United States.

Substantially all revenue for the three and six months ended June 30, 2021 and 2020 was generated from customers located in the United States.

Carriers representing 10% or more of our total revenue are summarized as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

22 % 15 % 22 % 15 %

UnitedHealthCare (1)

21 % 25 % 21 % 23 %

Humana 18 % 18 % 18 % 19 %

12 % 11 % 12 % 11 %

(1) Percentages include the carriers' subsidiaries.

(2) Centene Corporation acquired WellCare Health Plans, Inc.

in 2020, and the revenue of WellCare is included in the percentage calculation for March 31, 2021 and 2020.

in 2020, and the revenue of WellCare is included in the percentage calculation for the three and six months ended June 30, 2021 and 2020.

Note 10 – Leases

3 unchanged sentences

Most leases include options to renew, and the exercise of these options is at our discretion.

Total operating lease expenses were $ 2.0 million and $ 2.1 million for the three months ended March 31, 2021 and 2020, respectively and sublease income was immaterial for both periods.

Total operating lease expenses were $ 1.9 million and $ 2.2 million for the three months ended June 30, 2021 and 2020, $ 3.8 million and $ 4.3 million for the six months ended June 30, 2021 and 2020, respectively and sublease income was immaterial for both periods.

The following table summarizes the lease-related assets and liabilities recorded on the Condensed Consolidated Balance Sheets as of the dates presented below (in thousands):

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Operating lease right-of-use assets $ 39,996 $ 42,558

2 unchanged sentences

Total operating lease liabilities $ 44,020 $ 46,561

Supplemental information related to leases are as follows (in thousands):

March 31, 2021 December 31, 2020

Operating cash outflows from operating leases $ 1,900 $ 7,090

Supplemental information related to leases are as follows (dollars in thousands):

June 30, 2021 December 31, 2020

Weighted-average remaining lease term of operating leases 6.8 years 7.2 years

Weighted-average discount rate used to recognize operating lease right-of-use-assets 5.4 % 5.4 %

Six Months Ended June 30,

Operating lease expense $ 3,825 $ 4,272

Cash outflows related to operating leases 3,802 3,199

EHEALTH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of March 31, 2021, maturities of operating lease liabilities are as follows (in thousands):

As of June 30, 2021, maturities of operating lease liabilities are as follows (in thousands):

Year ending December 31,

7 unchanged sentences

In February 2021, we eliminated approximately 89 full-time positions, primarily in the United States, representing approximately 5 % of our workforce, primarily within our customer care and enrollment group, and to a lesser extent, in our marketing and advertising, technology and content, and general and administrative groups.

Total pre-tax restructuring charges for the three months ended March 31, 2021 were $ 2.4 million, which primarily related to employee termination benefits.

Total pre-tax restructuring charges for the six months ended June 30, 2021 were $ 2.4 million, which primarily related to employee termination benefits.

Substantially all of the restructuring charges resulted in cash expenditures.

The restructuring activities were completed by March 31, 2021.

Accrued restructuring charges balance was $ 0.3 million as of March 31, 2021.

Accrued restructuring charges were $ 0.1 million as of June 30, 2021.

Note 12 – Debt

7 unchanged sentences

Subject to availability under the Borrowing Base, amounts repaid may be reborrowed.

EHEALTH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Amounts not borrowed under the Credit Agreement will be subject to a commitment fee of 0.5 % per annum on the daily unused portion of the credit facility, to be paid in arrears on the first business day of each calendar quarter.

At the closing of the Credit Agreement, we paid a one-time facility fee of 1.75 % of the total commitments of $ 40.0 million.

We also paid a one-time closing fee of 0.5 % of the new commitment of $ 75.0 million in connection with the Amendment.

We also paid a

EHEALTH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

one-time closing fee of 0.5 % of the new commitment of $ 75.0 million in connection with the Amendment.

The Company is also obligated to pay other customary administration fees for a credit facility of this size and type.

7 unchanged sentences

The Amendment did not change the interest rate.

In connection with the Amendment, we incurred closing costs totaling $ 0.5 million, which were capitalized and recorded as other assets on our Condensed Consolidated Balance Sheet as of March 31, 2021.

The remaining balance of unamortized issuance costs was $ 0.7 million as of March 31, 2021 and December 31, 2020.

As of March 31, 2021, we had no outstanding borrowings under our revolving credit facility.

In connection with the Amendment, we incurred closing costs totaling $ 0.5 million, which were capitalized and recorded as other assets on our Consolidated Balance Sheet as of December 31, 2019.

The remaining balance of unamortized issuance costs was $ 0.6 million and $ 0.7 million as of June 30, 2021 and December 31, 2020, respectively.

As of June 30, 2021, we had no outstanding borrowings under our revolving credit facility.

Note 13 – Income Taxes

The following table summarizes our provision for (benefit from) income taxes and our effective tax rates for the periods presented below (in thousands, except effective tax rate):

Three Months Ended March 31,

Income (loss) before provision for (benefit from) income taxes $ ( 492 ) $ 1,404

Provision for (benefit from) income taxes 308 ( 2,048 )

The following table summarizes our benefit from income taxes and our effective tax rates for the periods presented below (in thousands, except effective tax rate):

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Loss before benefit from income taxes $ ( 25,161 ) $ ( 5,802 ) $ ( 25,653 ) $ ( 4,398 )

Benefit from income taxes ( 6,752 ) ( 2,432 ) ( 6,444 ) ( 4,480 )

Effective tax rate 26.8 % 41.9 % 25.1 % 101.9 %

For the three months ended March 31, 2021, we recognized a provision for income taxes of $ 0.3 million, representing an effective tax rate of ( 62.6 )%, which was lower than the statutory federal tax rate due primarily to one-time state tax adjustments.

For the three months ended March 31, 2020, we recognized a benefit from income taxes of $ 2.0 million, representing an effective tax rate of ( 145.9 )%, which was lower than the statutory federal tax rate due primarily to stock-based compensation windfalls.

For the three and six months ended June 30, 2021, we recognized a benefit from income taxes of $ 6.8 million and $ 6.4 million, representing an effective tax rate of 26.8 % and 25.1 %, respectively.

These effective tax rates are higher than the statutory federal tax rate due primarily to stock-based compensation adjustments, non-deductible lobbying expenses and state taxes, partially offset by research and development credits.

For the three and six months ended June 30, 2020, we recognized benefits from income taxes of $ 2.4 million and $ 4.5 million, representing an effective tax rate of 41.9 % and 101.9 %, respectively, which were higher than the statutory federal tax rate due primarily to stock-based compensation adjustments, non-deductible lobbying expenses and state taxes, partially offset by research and development credits.

Assessing the realizability of our deferred tax assets is dependent upon several factors, including the likelihood and amount, if any, of future taxable income in relevant jurisdictions during the periods in which those temporary differences become deductible.

2 unchanged sentences

As a result, the amount of deferred tax assets considered realizable is subject to adjustment in future periods if estimates of future taxable income change.

We continue to recognize our

We continue to recognize our deferred tax assets as of June 30, 2021, as we believe it is more likely than not that the net deferred tax assets will be realized,

EHEALTH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

deferred tax assets as of March 31, 2021, as we believe it is more likely than not that the net deferred tax assets will be realized, with the exception of certain net operating losses and credits that are expected to expire unutilized which have a valuation allowance.

Note 13 – Subsequent Event

On April 30, 2021, we issued and sold to Echelon Health SPV, LP ("H.I.G."), an investment vehicle of H.I.G.

Capital, in a private placement, 2,250,000 shares of our newly designated Series A convertible preferred stock, in par value of $ 0.001 per share (“Series A Preferred Stock”), at an aggregate purchase price of $ 225.0 million, at a price of $ 100 per share.

We received $ 216.2 million in proceeds from the private placement with H.I.G., net of sales commissions and certain transaction fees.

with the exception of certain net operating losses and credits that are expected to expire unutilized which have a valuation allowance.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements