What changed in this filing

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Item 1. Financial Statements

2024-11-06 compared with 2024-08-07 · 176 added, 127 removed, 613 unchanged (33% of the section changed)

3 unchanged sentences

(in thousands, unaudited)

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Current assets:

16 unchanged sentences

Accrued marketing expenses 9,208 20,340

Short term debt 68,662 —

Lease liabilities – current 7,429 7,070

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Retained earnings (accumulated deficit) ( 113,363 ) 7,284

Accumulated other comprehensive loss ( 91 ) ( 82 )

Accumulated other comprehensive income (loss) 126 ( 82 )

Total stockholders’ equity 499,346 606,031

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

37 unchanged sentences

Capital Treasury Stock Retained Earnings (Accumulated Deficit)

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Income (Loss)

Total Stockholders’ Equity

16 unchanged sentences

Balance as of June 30, 2024 42,415 $ 42 $ 808,314 13,115 $ ( 199,998 ) $ ( 59,415 ) $ ( 91 ) $ 548,852

Issuance of common stock in connection with equity incentive plans 347 1 — — — — — 1

Repurchase of shares to satisfy employee tax withholding obligations — — ( 451 ) 107 — — — ( 451 )

Dividends and accretion related to convertible preferred stock — — — — — ( 11,475 ) — ( 11,475 )

Stock-based compensation — — 4,675 — — — — 4,675

Other comprehensive income, net of tax

— — — — — — 217 217

Net loss — — — — — ( 42,473 ) — ( 42,473 )

Balance as of September 30, 2024 42,762 $ 43 $ 812,538 13,222 $ ( 199,998 ) $ ( 113,363 ) $ 126 $ 499,346

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

3 unchanged sentences

Common Stock Additional Paid-in

Capital Treasury Stock Retained Earnings

Capital Treasury Stock Retained Earnings (Accumulated Deficit)

Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity

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Balance as of June 30, 2023 40,533 $ 40 $ 788,222 12,542 $ ( 199,998 ) $ 12,836 $ ( 191 ) $ 600,909

Issuance of common stock in connection with equity incentive plans 343 — — — — — — —

Repurchase of shares to satisfy employee tax withholding obligations — — ( 884 ) 116 — — — ( 884 )

Dividends and accretion related to convertible preferred stock — — — — — ( 10,218 ) — ( 10,218 )

Stock-based compensation — — 6,797 — — — — 6,797

Other comprehensive income, net of tax

— — — — — — 58 58

Net loss — — — — — ( 37,025 ) — ( 37,025 )

Balance as of September 30, 2023 40,876 $ 40 $ 794,135 12,658 $ ( 199,998 ) $ ( 34,407 ) $ ( 133 ) $ 559,637

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

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(in thousands, unaudited)

Six Months Ended

Nine Months Ended

September 30,

Operating activities:

30 unchanged sentences

Effect of exchange rate changes on cash, cash equivalents and restricted cash 118 ( 58 )

Net increase in cash, cash equivalents and restricted cash 10,622 8,784

Net increase (decrease) in cash, cash equivalents and restricted cash ( 51,690 ) 7,568

Cash, cash equivalents and restricted cash at beginning of period 118,812 147,640

11 unchanged sentences

This tool is supported by a unified data platform and is available to our ecommerce customers and our benefit advisors.

We strive to be the most trusted partner to the consumer in their life’s journey through the health insurance market.

We strive to be the most trusted partner to consumers in their journeys through the health insurance market.

Unless otherwise specified or required by the context, references in this Quarterly Report on Form 10-Q to “eHealth,” “the Company,” “we,” “us” or “our” mean eHealth, Inc.

and its consolidated direct and indirect wholly-owned subsidiaries.

Basis of Presentation – The accompanying Condensed Consolidated Balance Sheet as of June 30, 2024 and other condensed consolidated financial statements for the three and six months ended June 30, 2024 and 2023 are unaudited.

Basis of Presentation – The accompanying Condensed Consolidated Balance Sheet as of September 30, 2024 and other condensed consolidated financial statements for the three and nine months ended September 30, 2024 and 2023 are unaudited.

The Condensed Consolidated Balance Sheet as of December 31, 2023 was derived from the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the Securities and Exchange Commission on February 29, 2024.

9 unchanged sentences

Certain prior period amounts have been reclassified to conform with our current period presentation.

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, 2023 and include all adjustments necessary for the fair presentation of our financial position as of June 30, 2024 and December 31, 2023 and our results of operations for the periods presented.

The results for the three and six months ended June 30, 2024 are not necessarily indicative of the results to be expected for any subsequent period or for the year ending December 31, 2024 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, 2023 and include all adjustments necessary for the fair presentation of our financial position as of September 30, 2024 and December 31, 2023 and our results of operations for the periods presented.

The results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results to be expected for any subsequent period or for the year ending December 31, 2024 and therefore, should not be relied upon as an indicator of future results.

Beginning in the first quarter of 2024, primarily as a result of vacating excess office space, we modified our methodology used in allocating certain expenses for the purpose of evaluating financial and segment performance and resource allocation.

Specifically, we no longer allocate our facilities-related expenses, and as a result, these costs are now reported within the “General and administrative” line in our Condensed Consolidated Statements of Comprehensive Loss and within Corporate for our segment profit (loss).

We have recast the Condensed

EHEALTH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statements of Comprehensive Loss and our segment profit (loss) for the prior periods presented to conform to our current methodology.

Comprehensive Loss and within Corporate for our segment profit (loss).

We have recast the Condensed Consolidated Statements of Comprehensive Loss and our segment profit (loss) for the prior periods presented to conform to our current methodology.

This resulted in a classification change of expenses from marketing and advertising, customer care and enrollment, and technology and content into general and administrative.

6 unchanged sentences

Actual results may differ from these estimates.

There have been no material changes for the six months ended June 30, 2024 to our significant accounting policies discussed in our Annual Report on Form 10-K for the year ended December 31, 2023.

There have been no material changes for the nine months ended September 30, 2024 to our significant accounting policies discussed in our Annual Report on Form 10-K for the year ended December 31, 2023.

Recently Adopted Accounting Pronouncements

We did not adopt any new accounting pronouncements during the six months ended June 30, 2024.

We did not adopt any new accounting pronouncements during the nine months ended September 30, 2024.

Recently Issued Accounting Pronouncements Not Yet Adopted

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We are currently evaluating the impact of adopting of this ASU on our consolidated financial statements and related disclosures.

Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40) — 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 ASU requires more detailed information about specified categories of expenses (purchases of inventory, employee compensation, depreciation, intangible asset amortization and depletion) included in certain expense captions presented on the face of the income statement.

The ASU is effective for fiscal years beginning after December 15, 2026 and for interim periods beginning after December 15, 2027.

The ASU may be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to all prior periods presented in the financial statements and early adoption is permitted.

EHEALTH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

are currently evaluating the impact of adopting this ASU on our consolidated financial statements and related disclosures.

Note 2 – Revenue

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

30 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

17 unchanged sentences

The net commission revenue from members approved in prior periods, or the net adjustment revenue, includes both increases as well as reductions in revenue for certain prior period cohorts.

(2) The after-tax impact of total net commission revenue from members approved in prior periods for the three months ended June 30, 2024 and 2023 was $ 0.30 and $ 0.51 per basic and diluted share, respectively.

The after-tax impact of total net commission revenue from members approved in prior periods for the six months ended June 30, 2024 and 2023 was $ 0.36 and $ 0.56 per basic and diluted share, respectively.

The total reductions to revenue from members approved in prior periods were $ 3.1 million and $ 2.9 million for the three months ended June 30, 2024 and 2023, respectively, and $ 3.6 million and $ 2.9 million for the six months ended June 30, 2024 and 2023, respectively.

(2) The after-tax impact of total net commission revenue from members approved in prior periods for the three months ended September 30, 2024 and 2023 was $ 0.03 and $ 0.33 per basic and diluted share, respectively.

The after-tax impact of total net commission revenue from members approved in prior periods for the nine months ended September 30, 2024 and 2023 was $ 0.39 and $ 0.89 per basic and diluted share, respectively.

The total reductions to revenue from members approved in prior periods were $ 0.9 million and $ 0.8 million for the three months ended September 30, 2024 and 2023, respectively, and $ 4.5 million and $ 3.7 million for the nine months ended September 30, 2024 and 2023, respectively.

These reductions to revenue primarily relate to the Medicare segment.

8 unchanged sentences

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

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Cash $ 7,446 $ 7,114

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Total cash, cash equivalents and restricted cash $ 67,122 $ 118,812

As of June 30, 2024 and December 31, 2023, we had $ 3.1 million of restricted cash which was classified as a non-current asset on our Condensed Consolidated Balance Sheets.

As of September 30, 2024 and December 31, 2023, we had $ 3.1 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.

6 unchanged sentences

Credit loss expenses are assessed quarterly and included in the “General and administrative” line in our Condensed Consolidated Statements of Comprehensive Loss.

There wer e no write-offs during the six months ended June 30, 2024 or for the year ended December 31, 2023.

There wer e no write-offs during the nine months ended September 30, 2024 or for the year ended December 31, 2023.

The change in the allowance for credit losses is summarized as follows (in thousands):

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Beginning balance $ 2,118 $ 2,398

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Net change in credit loss allowance 406 34 440

Ending balance at June 30, 2024

Ending balance at September 30, 2024

$ 751,403 $ 62,633 $ 814,036

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federal government.

The deposits in China were $ 2.8 million as of June 30, 2024.

The deposits in China were $ 3.4 million as of September 30, 2024.

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

1 unchanged sentence

Carriers that represented 10% or more of our total contract assets – commissions receivable and accounts receivable balances are summarized as follows:

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Humana 30 % 27 %

3 unchanged sentences

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

June 30, 2024 December 31, 2023

Prepaid software and maintenance contracts $ 4,251 $ 5,328

September 30, 2024 December 31, 2023

Prepaid expenses $ 9,754 $ 1,808

Prepaid software and maintenance contracts 5,936 5,328

Prepaid licenses 2,474 2,739

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 follows (in thousands):

June 30, 2024

September 30, 2024

Carrying Value Level 1 Level 2 Level 3 Total

2 unchanged sentences

Commercial paper 44,925 — 44,925 — 44,925

Agency bonds 10,988 — 10,988 — 10,988

Short-term marketable securities

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Our available for sale marketable securities, which include commercial paper and agency bonds with maturities of less than one year, are measured at fair value using quoted market prices to the extent available or alternative pricing sources and models utilizing market observable inputs and are classified as Level 2 within the fair value hierarchy.

There were no transfers between the hierarchy levels during either of the six months ended June 30, 2024 or the year ended December 31, 2023.

There were no transfers between the hierarchy levels during either the nine months ended September 30, 2024 or the year ended December 31, 2023.

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

As of June 30, 2024 As of December 31, 2023

As of September 30, 2024 As of December 31, 2023

Amortized Cost Fair Value Amortized Cost Fair Value

3 unchanged sentences

Unrealized gains and losses on available for sale debt securities that are not credit related are included in accumulated other comprehensive loss and summarized as follows (in thousands):

June 30, 2024

September 30, 2024

Amortized Cost Unrealized Gains Unrealized Losses Fair Value

2 unchanged sentences

Commercial paper 44,929 1 ( 5 ) 44,925

Agency bonds 10,988 — — 10,988

Short-term marketable securities

11 unchanged sentences

Total $ 114,577 $ 3 $ ( 42 ) $ 114,538

As of June 30, 2024 and December 31, 2023, we had 28 and 20 securities, respectively, in a net unrealized loss position that were immaterial individually and in aggregate.

We did not record any credit losses regarding our available for sale debt securities during the six months ended June 30, 2024 or the year ended December 31, 2023.

As of September 30, 2024 and December 31, 2023, we had 16 and 20 securities, respectively, in a net unrealized loss position that were immaterial individually and in aggregate.

We did not record any credit losses regarding our available for sale debt securities during the nine months ended September 30, 2024 or the year ended December 31, 2023.

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.

We recognized interest income of $ 2.1 million and $ 2.3 million for the three months ended June 30, 2024 and 2023, respectively, and $ 4.3 million and $ 4.2 million for the six months ended June 30, 2024 and 2023, respectively.

We recognized interest income of $ 1.7 million and $ 2.3 million for the three months ended September 30, 2024 and 2023, respectively, and $ 6.0 million and $ 6.5 million for the nine months ended September 30, 2024 and 2023, respectively.

Note 5 – Equity

2024 Equity Incentive Plan – On June 12, 2024, upon approval at our annual meeting of stockholders, we adopted our 2024 Equity Incentive Plan (the “2024 Equity Plan”), which replaced our 2014 Equity Incentive Plan.

Subject to applicable laws, we are permitted to grant awards of stock options, restricted stock units, stock appreciation rights, performance units and performance shares to eligible employees, directors and consultants of ours and any parent, subsidiary or affiliate of ours under the 2024 Equity Plan.

We have reserved for issuance under the 2024 Equity Plan a number of shares equal to the sum of (i) 1,350,000 shares, plus (ii) up to an additional 300,000 shares reserved for issuance under the 2014 Equity Incentive Plan that (A) were reserved but not issued or (B) are subject to equity awards that later expire or otherwise terminate without having been exercised or issued in full or are forfeited to or repurchased by the Company due to failure to vest.

The 2024 Equity Plan does not include an evergreen provision to automatically increase the number of shares available under the plan, and any increase in the number of shares authorized for issuance under the 2024 Equity Plan requires stockholder approval.

Additionally, while shares subject to awards granted under our 2024 Equity Plan which expire or become unexercisable or are forfeited to or repurchased by us due to failure to vest will return to the 2024 Equity Plan share reserve, the following shares will not return to the share reserve for future issuance:

(i) shares used in connection

EHEALTH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

with the exercise of an option and/or stock appreciation right to pay the exercise price or purchase price of such award or satisfy applicable tax withholding obligations;

and (ii) the gross number of shares subject to stock appreciation rights that are exercised.

As of September 30, 2024, 0.1 million shares were issued pursuant to equity awards under the 2024 Equity Plan.

2021 Inducement Plan – On September 22, 2021, the Company adopted an inducement plan (the “2021 Inducement Plan”), pursuant to which the Company reserved 0.4 million shares of its common stock (subject to customary adjustments in the event of a change in capital structure of the Company) to be used exclusively for grants of awards to individuals who were not previously employees or directors of the Company, other than following a bona fide period of non-employment, as an inducement material to the individual’s entry into employment with the Company within the meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules (“Nasdaq Rules”).

1 unchanged sentence

The 2021 Inducement Plan and its amendments were approved by our Board of Directors without stockholder approval pursuant to Rule 5635(c)(4) of the Nasdaq Rules, and the terms and conditions of the A&R 2021 Inducement Plan and awards to be granted thereunder are substantially similar to our stockholder-approved Amended and Restated 2014 Equity Incentive Plan.

As of June 30, 2024, 2.0 million shares were issued under the A&R 2021 Inducement Plan.

EHEALTH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Stock Repurchase Programs – We had no stock repurchase activity during the three and six months ended June 30, 2024 or 2023 except for the repurchase of shares to satisfy employee tax withholding obligations.

As of June 30, 2024 and 2023, we had a total o f 13.1 million and 12.5 million shares, respectively, held in treasury.

As of June 30, 2024 and 2023, we had 2.4 million and 1.8 million shares, respectively, in treasury that were previously surrendered by employees to satisfy tax withholding due in connection with the vesting of certain restricted stock units as well as 10.7 million shares previously repurchased under our past repurchase programs.

As of September 30, 2024, 2.0 million shares were issued under the A&R 2021 Inducement Plan.

Stock Repurchase Programs – We had no stock repurchase activity during the three and nine months ended September 30, 2024 or 2023 except for the repurchase of shares to satisfy employee tax withholding obligations.

As of September 30, 2024 and 2023, we had a total o f 13.2 million and 12.7 million shares, respectively, held in treasury.

As of September 30, 2024 and 2023, we had 2.5 million and 2.0 million shares, respectively, in treasury that were previously surrendered by employees to satisfy tax withholding due in connection with the vesting of certain restricted stock units as well as 10.7 million shares previously repurchased under our past repurchase programs.

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

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

6 unchanged sentences

Related tax benefit recognized $ 1,096 $ 1,543 $ 3,709 $ 4,162

EHEALTH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

12 unchanged sentences

Our Series A Preferred Stock is considered temporary equity in our Condensed Consolidated Balance Sheets and we have determined there are no material embedded features that require recognition as a derivative asset or liability.

The Series A Preferred Stock ranks senior to all other equity

EHEALTH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

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 accrued on the Series A Preferred Stock daily at 8 % per annum on the stated value of $ 100 per share (the “Stated Value”), and were payable in kind (“PIK”) beginning on June 30, 2021 through the second anniversary of the Closing Date.

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“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 PIK dividends that have accrued on such share but that have not previously been added to the Accrued Value.

During the second quarter of 2024 we made a cash dividend payment of $ 2.7 million.

During the second quarter of 2024 we made a cash dividend payment of $ 2.7 million, and as of September 30, 2024 we have accrued $ 1.4 million for cash dividends.

T he 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 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 June 30, 2024, the Conversion Price is equal to $ 79.5861 per share.

As of September 30, 2024, 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

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”).

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.

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(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

EHEALTH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

trading days immediately prior to 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 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.

Mandatory Conversion of the Series A Preferred Stock by the Company – 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.

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Investment Agreement, for 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, entitles H.I.G., subject to conditions and restrictions specified therein, to additional rights, including the right to nominate one additional member to the Company’s Board of Directors, the right to approve the Company’s annual budget, the right to approve hiring or termination of certain key executives and the right to approve the incurrence of certain indebtedness.

EHEALTH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

termination of certain key executives and the right to approve the incurrence of certain indebtedness.

As of September 30, 2023, we failed to maintain the Minimum Asset Coverage Ratio, which entitles H.I.G to the additional rights set forth above.

On March 13, 2024, the Nominating and Corporate Governance Committee of our Board of Directors approved the appointment of a board observer designated by H.I.G.

As of June 30, 2024, we were in compliance with the Minimum Liquidity Amount.

As of June 30, 2024, the estimated Series A Preferred Stock redemption value equals 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, 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, 2024.

As of September 30, 2024, we were in compliance with the Minimum Liquidity Amount.

As of September 30, 2024, the estimated Series A Preferred Stock redemption value equals 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, which is significantly in excess of the fair value of the common stock into which the Series A Preferred Stock is convertible as of September 30, 2024.

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.

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The estimated redemption value will vary in 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 3.5 million shares of common stock as of June 30, 2024.

No shares of Series A Preferred Stock have been converted, and the Series A Preferred Stock was convertible into 3.6 million shares of common stock as of September 30, 2024.

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

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Change in preferred stock redemption value 16,619

Balance as of June 30, 2024

EHEALTH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Balance as of September 30, 2024

Note 7 – Net Loss Per Share Attributable to Common Stockholders

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Diluted net 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.

EHEALTH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

6 unchanged sentences

$ ( 1.83 ) $ ( 1.68 ) $ ( 4.13 ) $ ( 3.88 )

For each of the three and six months ended June 30, 2024 and 2023, we had securities outstanding that could potentially dilute net loss per share, but the shares from the assumed conversion or exercise of these securities were excluded in the computation of diluted net loss per share as their effect would have been anti-dilutive.

For each of the three and nine months ended September 30, 2024 and 2023, we had securities outstanding that could potentially dilute net loss per share, but the shares from the assumed conversion or exercise of these securities were excluded in the computation of diluted net loss per share as their effect would have been anti-dilutive.

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

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

6 unchanged sentences

Total 6,801 6,554 5,907 6,170

EHEALTH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 8 – Commitments and Contingencies

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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 June 30, 2024 were as follows (in thousands):

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Our future minimum payments under non-cancellable contractual service and licensing obligations as of September 30, 2024 were as follows (in thousands):

Year ending December 31,

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Effective January 1, 2023, we began maintaining a substantial portion of our U.S.

employee health insurance benefits on a self-insured basis with up to $ 0.3 million per individual per year and the current maximum claim liability as of June 30, 2024 is $ 22.5 million.

employee health insurance benefits on a self-insured basis with up to $ 0.3 million per individual per year with the current maximum claim liability as of September 30, 2024 of $ 22.5 million.

As a result, we record a self-insurance liability based on claims filed and an estimate of claims incurred but not yet reported.

As of June 30, 2024 and December 31, 2023, we had a self-insurance liability balance of $ 2.0 million and $ 2.5 million, respectively, in the “Accrued compensation and benefits” line on our Condensed Consolidated Balance Sheets.

As of September 30, 2024 and December 31, 2023, we had a self-insurance liability balance of $ 2.0 million and $ 2.5 million, respectively, in the “Accrued compensation and benefits” line on our Condensed Consolidated Balance Sheets.

Contingencies

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Legal costs incurred in connection with the resolution of claims, lawsuits and other contingencies generally are expensed as incurred.

There were no material litigation-related accruals recorded during the three and six months ended June 30, 2024 or 2023.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

There were no material litigation-related accruals recorded during the three and nine months ended September 30, 2024 or 2023.

Note 9 – Segment and Geographic Information

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The performance measures of our segments include revenue and segment profit (loss).

Please refer to Note 1 – Summary of Business and Significant Accounting Policies of the Notes to Consolidated Financial Statements in Part II, Item 8 of the Annual Report on Form 10-K for the year ended December 31, 2023 for our accounting policies relating to operating segments.

Additionally, as indicated in Note 1 of this report, our results below reflect our updated methodology used in allocating certain expenses beginning in the first quarter of fiscal 2024, and results from the prior period presented have been recast to conform with the current period presentation.

Please refer to Note 1 – Summary of Business and Significant Accounting Policies in our Notes to Consolidated Financial Statements in Part II, Item 8 of the Annual Report on Form 10-K for the year ended December 31, 2023 for our accounting policies relating to operating segments.

Additionally, as indicated in Note 1 of this report, our results below reflect our updated methodology used in allocating certain expenses beginning in the first quarter of

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

fiscal 2024, and results from the prior period presented have been recast to conform with the current period presentation.

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

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

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Employer and Individual ( 799 ) 4,810 4,743 19,372

Segment profit 2,164 4,826 15,125 11,914

Segment profit (loss) ( 18,732 ) ( 10,521 ) ( 3,607 ) 1,393

Corporate ( 16,100 ) ( 17,576 ) ( 48,417 ) ( 56,953 )

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With the exception of contract assets – commissions receivable, which is presented by segment in Note 3 – Supplemental Financial Statement Information , our CODM does not separately evaluate assets by segment, and therefore, assets by segment are not presented.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Geographic Information

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

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

United States $ 26,909 $ 29,419

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Total $ 27,225 $ 29,700

EHEALTH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Significant Customers

Substantially all revenue for the three and six months ended June 30, 2024 and 2023 was generated from customers located in the United States.

Substantially all revenue for the three and nine months ended September 30, 2024 and 2023 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

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

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Note 10 – Leases

Our lease portfolio primarily consists of operating leases for office space and our leases have remaining lease terms of less than 2 years to 6 years .

Our lease portfolio primarily consists of operating leases for office space and our leases have remaining lease terms of 1 year to 5 years.

Certain of these leases have free or escalating rent payment provisions.

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The subleases run through the remaining term of the primary leases.

As of June 30, 2024, we expect to generate a total of $ 12.4 million in future sublease income through January 31, 2030.

As of September 30, 2024, we expect to generate a total of $ 12.9 million in future sublease income through January 31, 2030.

Sublease income is recorded on a straight-line basis as a reduction of lease expense in our Condensed Consolidated Statements of Comprehensive Loss.

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As part of our fiscal 2024 cost savings initiatives, we reassessed our occupied leased office space to identify excess space to vacate and potentially sublease.

We also reassessed current market conditions in our previously vacated leased office spaces which have not yet been subleased.

We also reassessed current market conditions in our previously vacated leased office spaces that have not yet been subleased.

As a result, we determined impairment indicators were present and we performed impairment testing of our right-of-use assets.

We utilized an income approach to value the asset groups by performing a discounted cash flow analysis and determined that the net carrying values exceeded the estimated discounted future cash flows expected to be derived from the properties based on Level 3 inputs, including current sublease market rent, future sublease market conditions and the discount rate.

This resulted in

This resulted in $ 7.4 million of impairment charges related to our operating lease right-of-use assets and property, plant and equipment, which was reflected in the “Impairment, restructuring and other charges” line in our Condensed Consolidated Statements of Comprehensive Loss for the nine months ended September 30, 2024.

There were no impairment charges related to our operating lease right-of-use assets and property, plant and equipment for the three months ended September 30, 2024.

See Note 11 – Impairment, Restructuring and Other Charges for further discussion about our asset impairment charges.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

$ 1.9 million and $ 7.4 million of impairment charges related to our operating lease right-of-use assets and property, plant and equipment, which was reflected in the “Impairment, restructuring and other charges” line in our Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2024, respectively.

See Note 11 – Impairment, Restructuring and Other Charges for further discussion about our asset impairment charges.

The components of operating lease costs for the three and six months ended June 30, 2024 and 2023 were as follows (in thousands):

The components of operating lease costs for the three and nine months ended September 30, 2024 and 2023 were as follows (in thousands):

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

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

Six Months Ended

Nine Months Ended

September 30,

Cash paid for amounts included in the measurement of operating lease liabilities $ 6,663 $ 6,533

June 30, 2024 December 31, 2023

Non-cash investing activities relating to operating lease right-of-use assets $ — $ 1,285

September 30, 2024 December 31, 2023

Weighted-average remaining lease term (in years) of operating leases 4.2 4.8

Weighted-average discount rate used to recognize operating lease right-of-use-assets 5.7 % 5.7 %

As of June 30, 2024, maturities of our operating lease liabilities are as follows (in thousands):

As of September 30, 2024, maturities of our operating lease liabilities are as follows (in thousands):

Year ending December 31,

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

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Restructuring and reorganization charges

1,114 — 1,935 —

Impairment, restructuring and other charges $ 61 $ — $ 9,409 $ —

Asset Impairment

For the three and six months ended June 30, 2024, we recognized non-cash, pre-tax asset impairment charges of $ 1.9 million and $ 7.4 million, respectively, related to several of our leased office spaces in the “Impairment, restructuring and other charges” line in our Condensed Consolidated Statements of Comprehensive Loss.

These charges were comprised of $ 1.8 million and $ 6.9 million of operating lease right-of-use asset impairments and $ 0.1 million and $ 0.5 million of property and equipment impairment for the three and six months ended June 30, 2024, respectively.

We did not incur any asset impairment charges for the three months ended September 30, 2024.

For the nine months ended September 30, 2024, we recognized non-cash, pre-tax asset impairment charges of $ 7.4 million , related to several of our leased office spaces in the “Impairment, restructuring and other charges” line in our Condensed Consolidated Statements of Comprehensive Loss.

These charges were comprised of $ 6.9 million of operating lease right-of-use asset impairments and $ 0.5 million of property and equipment impairment for the nine months ended September 30, 2024.

Refer to Note 10 – Leases for additional information related to our lease impairment charges.

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Payments ( 1,986 )

Balance at June 30, 2024 $ 150

During the three and six months ended June 30, 2024, we recognized $ 1.1 million and $ 1.9 million of pre-tax restructuring charges in the “Impairment, restructuring and other charges” line in our Condensed Consolidated Statements of Comprehensive Loss, primarily related to employee termination benefits as a result of our cost-reduction efforts.

Balance at September 30, 2024 $ 10

During the three and nine months ended September 30, 2024, we recognized $ 0.1 million and $ 2.0 million of pre-tax restructuring charges in the “Impairment, restructuring and other charges” line in our Condensed Consolidated Statements of Comprehensive Loss, primarily related to employee termination benefits as a result of our cost-reduction efforts.

Substantially all of the restructuring charges are expected to be settled in cash and no equity awards were modified.

As of June 30, 2024, we had a $ 0.2 million restructuring accrual on our Condensed Consolidated Balance Sheet.

As of September 30, 2024, we had an immaterial restructuring accrual on our Condensed Consolidated Balance Sheet.

Note 12 – Debt

On February 28, 2022, we entered into a term loan credit agreement with Blue Torch Finance LLC, as administrative agent and collateral agent, and other lenders party thereto (the “Original Credit Agreement”).

On August 16, 2022, we entered into an amendment (the “Amendment”) to the Original Credit Agreement (as amended by the Amendment, the “Credit Agreement”).

The Amendment replaced the LIBOR-based Adjusted Euro currency Rate (as defined in the Original Credit Agreement) with Adjusted Term SOFR (as defined in the Amendment) as a reference rate for loans under the Credit Agreement.

The proceeds of the loans under the Credit Agreement may be

On August 16, 2022, we entered into an amendment (the “First Amendment”) to the Original Credit Agreement (as amended by the First Amendment, the “Credit Agreement”).

The First Amendment replaced the LIBOR-based Adjusted Euro currency Rate (as defined in the Original Credit Agreement) with Adjusted Term SOFR (as defined in the First Amendment) as a reference rate for loans under the Credit Agreement.

The proceeds of the loans under the Credit Agreement may be used for working capital and general corporate purposes, to refinance our credit

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

used for working capital and general corporate purposes, to refinance our credit agreement with Royal Bank of Canada (“RBC”) and to pay fees and expenses in connection with the entry into the Credit Agreement.

agreement with Royal Bank of Canada (“RBC”) and to pay fees and expenses in connection with the entry into the Credit Agreement.

The Credit Agreement provides for a $ 70.0 million secured term loan credit facility.

We incurred closing costs totaling $ 5.1 million, which were recorded as a direct deduction from the face amount of the loan on our Condensed Consolidated Balance Sheets.

Total amortization of closing costs, or debt issuance costs, was $ 0.5 million and $ 0.9 million for the three and six months ended June 30, 2024, respectively, and $ 0.4 million and $ 0.8 million for the three and six months ended June 30, 2023, respectively, and is recorded in the “Interest expense” line in our Condensed Consolidated Statements of Comprehensive Loss.

There were $ 1.3 million of unamortized issuance costs as of June 30, 2024.

Total amortization of closing costs, or debt issuance costs, was $ 0.5 million and $ 1.4 million for the three and nine months ended September 30, 2024, respectively, and $ 0.4 million and $ 1.2 million for the three and nine months ended September 30, 2023, respectively, and is recorded in the “Interest expense” line in our Condensed Consolidated Statements of Comprehensive Loss.

There were $ 0.8 million of unamortized issuance costs as of September 30, 2024.

The carrying value of the term loan approximates the fair value, based on Level 2 inputs (observable market prices in less than active markets), as the interest rate is variable over the selected interest period and is similar to current rates at which we can borrow funds.

The carrying value of the loan was $ 68.7 million as of June 30, 2024.

The carrying value of the loan was $ 69.2 million as of September 30, 2024.

The Original Credit Agreement bore interest, at our option, at either a rate based on the LIBOR for the applicable interest period or a base rate, in each case plus a margin.

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The margin was 7.50 % for LIBOR loans and 6.50 % for base rate loans.

After the Amendment, the loans under the Credit Agreement bear interest, at our option, at either a rate based on the Adjusted Term SOFR or a base rate, in each case plus a margin.

After the First Amendment, the loans under the Credit Agreement bear interest, at our option, at either a rate based on the Adjusted Term SOFR or a base rate, in each case plus a margin.

The base rate is the highest of the prime rate, the federal funds rate plus 0.50 % and three-month Adjusted Term SOFR plus 1.00 %.

The margin is 7.50 % for Adjusted Term SOFR loans and 6.50 % for base rate loans.

As of June 30, 2024, the interest rate was 13.11 % .

For the three and six months ended June 30, 2024 we incurred interest expense of $ 2.3 million and $ 4.6 million, respectively.

For the three and six months ended June 30, 2023 we incurred interest expense of $ 2.2 million and $ 4.4 million , respectively.

As of September 30, 2024, the interest rate was 12.82 %.

For the three and nine months ended September 30, 2024 we incurred interest expense of $ 2.3 million and $ 6.9 million, respectively.

For the three and nine months ended September 30, 2023 we incurred interest expense of $ 2.4 million and $ 6.8 million , respectively.

Furthermore, as part of the Credit Agreement, we incur a $ 0.3 million fee per annum, payable annually.

The outstanding obligations under the Credit Agreement are payable in full on the maturity date.

The Credit Agreement matures in February 2025.

We have the right to prepay the loans under the Credit Agreement in whole or in part at any time, subject, in the case of certain mandatory prepayments or any voluntary prepayment of the loans under the Credit Agreement after February 28, 2023, to an exit fee, which right we did not exercise.

Our obligations under the Credit Agreement are guaranteed by certain of our material domestic subsidiaries and substantially all of our assets and the assets of such guarantors, in each case, subject to customary exclusion.

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The Credit Agreement also requires that the outstanding amount as of the last calendar day of any month be less than 50 % of our total contract assets - commissions receivable (i.e., both current and non-current commissions receivable).

As of June 30, 2024, we were in compliance with our loan covenants.

As of September 30, 2024, we were in compliance with our loan covenants.

On November 1, 2024, we entered into a second amendment (the "Second Amendment") to the Credit Agreement.

The Second Amendment amends the Credit Agreement to, among other things, (i) extend the maturity date of the Credit Agreement from February 2025 to February 2026, (ii) remove the "exit fee" contemplated by the Credit Agreement and replace it with an “applicable premium” that is payable in the event of any voluntary prepayment or certain mandatory prepayments of the loans under the Credit Agreement in an amount equal to 1.00 % of the loans being prepaid, plus, solely in the case of loans prepaid on or prior to March 1, 2025, an additional “make-whole” amount, and (iii) reduce the margin applicable to SOFR loans from 7.50 % to 7.00 % and the margin applicable to base rate loans from 6.50 % to 6.00 %.

Pursuant to the Second Amendment, we paid to the lenders under the Credit Agreement an extension fee in an amount equal to 1.50 % of the $ 70.0 million aggregate principal amount of loans outstanding thereunder.

All other material terms remain the same.

As a result of the Second Amendment, we have reclassified the carrying value of our short term debt to long term debt on the Condensed Consolidated Balance Sheet as of September 30, 2024, in accordance with ASC 470.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 13 – Income Taxes

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

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Effective tax rate 4.3 % 6.3 % 4.1 % 9.7 %

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Our provision for income taxes during interim reporting periods has historically been calculated by applying an estimate of the annual effective tax rate to income (loss) before income taxes for the reporting period.

Although we believe the use of the annual effective tax rate method to be appropriate for prior interim reporting periods, for the three and six months ended June 30, 2024, we applied the actual effective tax rate, which reflects the actual taxes attributable to year-to-date losses, as allowed by ASC 740-270 “Income Taxes, Interim Reporting.” We determined that since minor changes in estimated income or loss for fiscal 2024 would result in significant changes in the estimated annual effective tax rate, the actual effective tax rate method would provide a more reliable estimate for the three and six months ended June 30, 2024.

For the three and six months ended June 30, 2024, we recognized a benefit from income taxes of $ 0.5 million and $ 1.9 million, respectively, representing an effective tax rate of 1.8 % and 4.0 %, respectively, which was lower than the statutory federal tax rate primarily due to stock-based compensation adjustments, non-deductible lobbying expenses, and changes in our valuation allowance, partially offset by research and development credits and state taxes.

For the three and six months ended June 30, 2023, we recognized a benefit from income taxes of $ 2.5 million and $ 6.2 million, respectively, representing an effective tax rate of 9.8 % and 12.4 %, respectively, which was lower than the statutory federal tax rate primarily due to stock-based compensation adjustments and non-deductible lobbying expenses, partially offset by research and development credits and state taxes.

For the three and nine months ended September 30, 2024 and September 30, 2023, we calculated our provision for income taxes by applying the actual effective tax rate, which reflects the actual taxes attributable to year-to-date losses, as allowed by ASC 740-270 “Income Taxes, Interim Reporting.” We determined that since minor changes in estimated income or loss for fiscal 2024 and 2023 would result in significant changes in the estimated annual effective tax rate, the actual effective tax rate method would provide a more reliable estimate for the three and nine months ended September 30, 2024 and September 30, 2023.

For the three and nine months ended September 30, 2024, we recognized a benefit from income taxes of $ 1.9 million and $ 3.7 million, respectively, representing an effective tax rate of 4.3 % and 4.1 %, respectively, which was lower than the statutory federal tax rate primarily due to changes in our valuation allowance on certain U.S.

deferred tax assets, stock-based compensation adjustments and non-deductible lobbying expenses partially offset by research and development credits and state taxes.

For the three and nine months ended September 30, 2023, we recognized a benefit from income taxes of $ 2.5 million and $ 8.7 million, respectively, representing an effective tax rate of 6.3 % and 9.7 %, respectively, which was lower than the statutory federal tax rate primarily due to stock-based compensation adjustments, non-deductible lobbying expenses and changes in our valuation allowance, partially offset by research and development credits and state taxes.

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.

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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 deferred tax assets as of June 30, 2024, as we believe it is more likely than not that such deferred tax assets will be realized, with the exception of certain net operating losses and credits for which there is increased uncertainty regarding our future taxable income and a lack of other sources of taxable income, which have a valuation allowance.

We continue to recognize our deferred tax assets as of September 30, 2024, as we believe it is more likely than not that such deferred tax assets will be realized, with the exception of certain net operating losses and credits for which there is increased uncertainty regarding our future taxable income and a lack of other sources of taxable income, 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