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Risks Related to Our Business
−Removed: The markets in which we participate are intensely competitive, and if we cannot compete effectively against current and future competitors, including government-run health insurance exchanges, our business, operating results and financial condition could suffer.
−Removed: The market for selling health insurance plans is characterized by intense competition, and we face challenges associated with evolving distribution models, industry and regulatory standards, customer price sensitivity and macro-economic conditions.
−Removed: To remain competitive against our current and future competitors, we need to continue to enhance the online and mobile health insurance shopping experience and functionalities of our website and advisor enrollment operations that our current and future customers may use to purchase health insurance products from us.
−Removed: We also need to work with the health insurance carriers to be able to offer a variety of quality health insurance plans on our platform from which our customers may choose.
+Added: The markets in which we participate are intensely competitive.
+Added: If we cannot compete effectively against current and future competitors, including government-run health insurance exchanges, our business, operating results and financial condition could suffer.
+Added: The market for selling health insurance plans is characterized by intense competition, and we face challenges associated with evolving distribution models, industry and regulatory standards, consumer price sensitivity and macro-economic conditions.
+Added: To remain competitive against our current and future competitors, we need to continue to enhance the online and mobile health insurance shopping experience and functionalities of our website and advisor enrollment operations that our current and future consumers may use to purchase health insurance products from us.
+Added: We also need to work with the health insurance carriers to be able to offer a variety of quality health insurance plans on our platform from which our consumers may choose.
We will also need to market our services effectively and drive a substantial number of consumers interested in purchasing health insurance to our website and advisor enrollment centers during the relevant enrollment periods in a cost-effective manner.
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As compared to us, our current and future competitors may be able to undertake more extensive marketing campaigns for their brands and services, devote more resources to website and systems development, negotiate more favorable commission rates and commission override payments and make more attractive offers to potential employees, marketing partners and third-party service providers.
−Removed: Competitive pressures from government-run health insurance exchanges and other competitors may result in our experiencing increased marketing costs, especially during the Medicare annual enrollment period, decreased demand and loss of market share, increased health insurance plan termination and member turnover, reduction in our membership or revenue and may otherwise harm our business, operating results and financial condition.
+Added: Competitive pressures from government-run health insurance exchanges and other competitors may result in our experiencing increased marketing costs, especially during the Medicare annual enrollment period which may harm our business, operating results and financial condition.
Our business may be harmed if we lose our relationship with health insurance carriers or our relationships with health insurance carriers are modified.
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Centers for Medicare & Medicaid Services (“CMS”), or applicable federal or state laws or regulations, health insurance carriers may terminate their relationship with us or require us to take corrective action if our Medicare product sales or marketing give rise to too many complaints.
−Removed: The termination of our relationship with a health insurance carrier, the reduction of commission rates, or the amendment of or change in our relationship with a carrier has in the past reduced, and may in the future reduce, the variety, quality and affordability of health insurance plans we offer, cause a loss of commission payments, including commissions for past and/or future sales, cause a reduction in the estimated constrained LTVs we use for revenue recognition purposes, result in a loss of existing and potential members, adversely impact our profitability or have other adverse impacts, which could harm our business, operating results and financial condition.
+Added: The termination of our relationship with a health insurance carrier, the reduction of commission rates, or the amendment of or change in our relationship with a carrier has in the past reduced, and may in the future reduce, the variety, quality and affordability of health insurance plans we offer, cause a loss of commissions, including commissions for past and/or future sales, cause a reduction in the estimated constrained LTVs we use for revenue recognition purposes, result in a loss of existing and potential members, adversely impact our profitability or have other adverse impacts.
+Added: Any of these could harm our business, operating results and financial condition.
Health insurance carriers may also determine to exit certain states or markets, change benefit offerings, or increase premiums to a significant degree, which could cause our members’ health insurance plans to be terminated or our members to purchase new health insurance plans or determine not to pay for health insurance at all.
If we lose these members, our business, operating results and financial condition could be harmed.
−Removed: We derive a significant portion of our revenue from a small number of health insurance carriers, and any impairment of our relationships with them or impairment of their businesses could adversely affect our business, operating results and financial condition.
−Removed: Our revenue has been concentrated in a small number of health insurance carriers and we expect that a small number of health insurance carriers will continue to account for a significant portion of our revenue for the foreseeable future.
−Removed: For example, Humana, Aetna and UnitedHealthcare accounted for 28%, 20%, and 17%, respectively, of our total revenue for the nine months ended September 30, 2024, and accounted for 28%, 7%, and 22%, respectively, of our total revenue for the nine months ended September 30, 2023.
+Added: We derive a significant portion of our revenue from a small number of health insurance carriers.
+Added: Any impairment of our relationships with them or impairment of their businesses could adversely affect our business, operating results and financial condition.
+Added: Our revenue has been concentrated in a small number of health insurance carriers and we expect that a small number of health insurance carriers will continue to account for a significant portion of our revenue for the
+Added: foreseeable future.
+Added: For example, Humana, Aetna and UnitedHealthcare accounted for 24%, 14%, and 24%, respectively, of our total revenue for the three months ended March 31, 2025, and accounted for 26%, 23%, and 15%, respectively, of our total revenue for the three months ended March 31, 2024.
As discussed elsewhere in this Risk Factors section, our contractual relationships with health insurance carriers are typically non-exclusive and terminable on short notice by either party for any reason.
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If we are unable to successfully attract and convert qualified prospects into members for whom we receive commissions, our business, operating results and financial condition would be harmed.
−Removed: We derive our revenues primarily from commission payments paid to us by health insurance carriers for Medicare-related health insurance and individual and family health insurance plans that have been purchased by members through our services.
+Added: We derive our revenues primarily from commissions paid to us by health insurance carriers for Medicare-related health insurance and individual and family health insurance plans that have been purchased by members through our services.
Our business success depends in large part on our ability to attract qualified prospects into our enrollment platform and provide a relevant and reliable experience in a cost-effective manner to convert such prospects into paying members for whom we receive commissions.
−Removed: We employ different marketing channels and may from time to time adjust our member acquisition strategy to attract visitors to our website and communicate with customers who contact our advisor enrollment centers.
+Added: We employ different marketing channels and may from time to time adjust our member acquisition strategy to attract visitors to our website and communicate with consumers who contact our advisor enrollment centers.
If our ability to market and sell Medicare-related health insurance and individual and family health insurance is constrained during the Medicare or individual and family health insurance enrollment periods for any reason, such as technology failures, interruptions in the operation of our ecommerce or telephony platforms, reduced allocation of resources, delayed, reduced, or ineffective delivery of our marketing efforts, or any inability to timely employ, license, train, certify and retain our benefit advisors to sell health insurance, we could acquire fewer members, suffer a reduction in our membership, and our business, operating results and financial condition could be harmed.
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If more consumers decide to delay enrollment or decrease or discontinue coverage under plans sold through us, our business, operating results and financial condition would be adversely affected.
−Removed: We have taken and may take additional actions to improve the customer experience, enhance accuracy of plan recommendations, reduce rapid disenrollment and beneficiary complaints and improve the quality of our enrollments and conversion rates.
+Added: We have taken and may take additional actions to improve the consumer experience, enhance accuracy of plan recommendations, reduce rapid disenrollment and beneficiary complaints, and improve the quality of our enrollments and conversion rates.
Although we have in the past invested, and may from time to time invest, in various areas of our business, including technology and content, customer care and enrollment, and marketing and advertising to improve the quantity and quality of our membership enrollment in advance of enrollment periods, such investment may not result in a significantly improved number of approved and paying members or may not be as cost-effective as we anticipated.
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In order to offer the qualified health plans that individuals and families must purchase to receive Affordable Care Act subsidies, we must meet certain conditions, such as receiving permission to do so from the applicable government health insurance exchange, entering into or maintaining an agreement with the health insurance exchange or a partner of the exchange, ensuring that the enrollment and subsidy application is completed through the health insurance exchange and complying with privacy, security and other standards.
−Removed: If Internet-based agents
−Removed: and brokers such as us use the Internet for completion of qualified health plan selection purposes, their websites may be required to meet certain additional requirements.
+Added: If Internet-based agents and brokers such as us use the Internet for completion of qualified health plan selection purposes, their websites may be required to meet certain additional requirements.
To help manage additional expenses and regulatory burdens associated with enrolling individuals and families into qualified health plans, we rely on a third-party vendor to help comply with certain aspects of the relevant requirements, and our qualified plan enrollments are made predominantly through the Federally Facilitated Marketplace (“FFM”), which currently runs all or part of the health insurance exchange in most states.
We may experience difficulty in satisfying the conditions and requirements to offer qualified health plans to our existing members and new potential members and in getting them enrolled through the FFM or any similar state-based exchange.
−Removed: The FFM may at any time cease allowing us or our third-party vendor to enroll individuals in qualified health plans or change the requirements for doing so, or relevant government regulations or agencies may prevent us from efficiently working with our third-party vendor, including timely receiving and using data from our third-party vendor.
+Added: The FFM may at any time cease allowing us or our third-party vendor to enroll individuals in qualified health plans or change the requirements for doing so.
+Added: Also, relevant government regulations or agencies may prevent us from efficiently working with our third-party vendor, including timely receiving and using data from our third-party vendor.
In addition, we may be unsuccessful in maintaining a relationship with our third-party vendor that is approved to use the process, and we may not be able to enroll individuals into qualified health plans through the FFM or could be required to use an inferior process to do so.
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We receive commissions from health insurance carriers for health insurance plans sold through us.
−Removed: When one of these plans is canceled, or if we otherwise do not remain the agent on the plan, we no longer receive the related commission payment.
+Added: When one of these plans is canceled, or if we otherwise do not remain the agent on the plan, we no longer receive the related commission.
Health insurance carriers may choose to discontinue their health insurance plans for a variety of reasons, and when members update their health insurance plan, they may also select a different plan that is not sold through us, or we are otherwise no longer the agent on the plan.
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Any decrease in the amount of time we retain our members on the health insurance plans that they purchased through us could adversely impact the estimated constrained LTVs we use for purposes of recognizing revenue, which would harm our business, operating results and financial condition.
−Removed: If we experience higher health insurance plan termination rates than we estimated when we
−Removed: recognized commission revenue, we may not collect all of the related commissions receivable, which could result in a reduction in LTV and a write-off of contract assets - commissions receivable, which would harm our business, operating results and financial condition.
+Added: If we experience higher health insurance plan termination rates than we estimated when we recognized commission revenue, we may not collect all of the related commissions receivable, which could result in a reduction in LTV and a write-off of contract assets - commissions receivable, which would harm our business, operating results and financial condition.
Our marketing efforts may not be successful or may become more expensive, either of which could adversely affect our business, operating results and financial condition.
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Any decrease in the amount or effectiveness of our marketing efforts could lead to lower revenue or growth and profitability of this business.
+Added: We have recently refreshed our brand identity and expect to continue to invest in maintaining our brand identity.
+Added: We believe our brand identity will strengthen our relationships with existing, and help attract, new members, marketing partners and health insurance carriers.
+Added: Some of our current and potential competitors have greater brand recognition and significantly greater financial, technical, marketing and other resources than we do, and they may try to replicate our efforts, competitively bid against our branded search terms to redirect traffic seeking our brand, or undertake more extensive marketing campaigns for their brands and services.
+Added: Our brand promotion activities may not be successful in maintaining or attracting new members, marketing partners or health insurance carriers, and as a result, may not yield increased revenue.
+Added: To the extent that these activities yield increased revenue, the increased revenue may not offset the expenses we incur, which could harm our business, operating results and financial condition.
+Added: It is critical to the success of our business that we reach out to consumers in our target audience through direct channels, including direct mail, television, internet search, social media and email.
+Added: We rely on media platforms that can effectively reach our target audience in a cost-efficient manner, and these media venue continue to be places where our consumer audience are active and receptive to our message.
+Added: We anticipate that, as our market becomes increasingly competitive, these media platforms may become increasingly expensive.
+Added: Our direct channel marketing activities may not be successful or yield increased revenue, and to the extent that these activities yield increased revenue, the increased revenue may not offset the expenses we incur, and our business, operating results and financial condition could be harmed.
+Added: We depend upon Internet search engines and social media platforms to attract a significant portion of the consumers who visit our website.
+Added: If we are unable to effectively advertise on search engines or social media platforms on a cost-effective basis, our business, operating results and financial condition could be harmed.
+Added: We derive a significant portion of our website traffic from consumers who search for health insurance through Internet search engines, such as Google, and through social media platforms, such as Facebook.
+Added: A critical factor in attracting consumers to our website is whether we are prominently displayed in response to an Internet search relating to health insurance or on a social media platform.
+Added: Search engines typically provide two types of search results:
+Added: algorithmic listings and paid advertisements.
+Added: We rely on both to attract consumers to our websites and otherwise generate demand for our services.
+Added: If we are listed less prominently in, or removed altogether from, search result listings or if Internet search engines become unavailable, the traffic to our websites would decline and we may not be able to replace this traffic, which would harm our business, operating results and financial condition.
+Added: The use of alternative marketing channels could cause us to increase our marketing expenditures, which would also increase our cost of member acquisition and harm our business, operating results and financial condition.
We depend on our marketing partners for referring potential consumers to our ecommerce platform and advisor enrollment centers.
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We compensate many of our marketing partners for their referrals on either a submitted health insurance application basis or a per-referral basis or, if they are licensed to sell health insurance, we may share a percentage of the commission we earn from the health insurance carrier for each member referred by the marketing partner.
−Removed: We also have relationships with marketing partners that utilize aspects of our platform and tools.
+Added: relationships with marketing partners that utilize aspects of our platform and tools.
Given our reliance on our marketing partners, our business, operating results and financial condition would be harmed if we are unable to maintain successful relationships with high volume marketing partners as a result of increased competition for referrals or less commercially favorable terms.
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If we lose marketing partner referrals during the Medicare or individual and family health insurance enrollment periods, the adverse impact on our business would be significant.
−Removed: We depend upon Internet search engines and social media platforms to attract a significant portion of the consumers who visit our website.
−Removed: If we are unable to effectively advertise on search engines or social media platforms on a cost-effective basis, our business, operating results and financial condition could be harmed.
−Removed: We derive a significant portion of our website traffic from consumers who search for health insurance through Internet search engines, such as Google, and through social media platforms, such as Facebook.
−Removed: A critical factor in attracting consumers to our website is whether we are prominently displayed in response to an Internet search relating to health insurance or on a social media platform.
−Removed: Search engines typically provide two types of search results:
−Removed: algorithmic listings and paid advertisements.
−Removed: We rely on both to attract consumers to our websites and otherwise generate demand for our services.
−Removed: If we are listed less prominently in, or removed altogether from, search result listings or if Internet search engines become unavailable, the traffic to our websites would decline and we may not be able to replace this traffic, which would harm our business, operating results and financial condition.
−Removed: The use of alternative marketing channels could cause us to increase our marketing expenditures, which would also increase our cost of member acquisition and harm our business, operating results and financial condition.
−Removed: We have recently refreshed our brand identity and expect to continue to invest in maintaining our brand identity.
−Removed: We believe our brand identity will strengthen our relationships with existing, and help attract new, members, marketing partners and health insurance carriers.
−Removed: Some of our current and potential competitors have greater brand recognition and significantly greater financial, technical, marketing and other resources than we do, and they may try to replicate our efforts, competitively bid against our branded search terms to redirect traffic seeking our brand, or undertake more extensive marketing campaigns for their brands and services.
−Removed: Our brand promotion activities may not be successful in maintaining or attracting new members, marketing partners or health insurance carriers, and as a result, may not yield increased revenue.
−Removed: To the extent that these activities yield increased revenue, the increased revenue may not offset the expenses we incur, which could harm our business, operating results and financial condition.
If our carrier advertising and sponsorship program is not successful, our business, operating results and financial condition could be harmed.
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In addition, since we maintain relationships with a limited number of health insurance carriers to sell their Medicare plans, our Medicare plan-related advertising revenue is concentrated in a small number of health insurance carriers, and our ability to generate Medicare plan-related advertising revenue would be harmed by the termination or non-renewal of any of these relationships as well as by a reduction in the amount a health insurance carrier is willing to pay for these services.
+Added: Our operations in China involve many risks that could increase expenses, expose us to increased liability and adversely affect our business, operating results and financial condition.
+Added: Our subsidiary in China conducts a portion of our operations, including the maintenance and update of our ecommerce platform and performance of specific tasks within our finance, customer care and enrollment functions.
+Added: We rely on third-party vendors to communicate with our subsidiary in China.
+Added: Our business would be harmed if our ability to communicate via these vendors with these employees failed, and we were prevented from promptly updating our software or implementing other changes to our database and systems, among other things.
+Added: From time to time, we receive inquiries from health insurance carriers relating to our operations in China and the security measures we have implemented to protect data that our employees in China may be able to access.
+Added: As a part of these inquiries, we have implemented additional security measures relating to our operations in China.
+Added: Still, we may be required to implement further security measures to continue aspects of our operations in China.
+Added: We may also be
+Added: required to bring aspects of our operations in China back to the United States, which could be time-consuming and expensive and harm our operating results and financial condition.
+Added: Health insurance carriers may also terminate our relationship due to concerns surrounding our China operations, which would harm our business, operating results and financial condition.
+Added: Our operations in China also expose us to different laws, rules and regulations, including different intellectual property laws, which are not as protective of our intellectual property as the laws in the United States.
+Added: United States and Chinese trade laws may also impose restrictions on the importation of programming or technology to or from the United States.
+Added: We are also subject to certain laws, rules and regulations in China and the United States, including those related to anti-bribery and anti-corruption, privacy, data transfer, data security, labor, tax, foreign exchange controls and cash repatriation.
+Added: In recent years, both China the United States have adopted and proposed laws regulating these areas.
+Added: Such laws, regulations and standards are complex, ambiguous and subject to change or interpretation, which create uncertainty regarding compliance and enforcement.
+Added: Compliance with these laws and regulations could cause us to incur substantial costs or require us to change our business operations in China.
+Added: Violation of applicable laws and regulations could adversely affect our brand, affect our relationship with our health insurance carriers, and could result in regulatory enforcement actions and the imposition of civil or criminal penalties and fines, any of which could harm our business, operating results and financial condition.
+Added: Our business may be adversely impacted by changes in China’s economic or political condition, the relationship between China and the United States or other countries, and our ability to continue to conduct our current operations in China.
+Added: Any such changes may be caused by geopolitical issues, natural disasters, war or other events or circumstances.
+Added: For example, President Trump has indicated that his administration would potentially impose greater restrictions on trade with China through significant increases in tariffs on goods imported into the United States.
+Added: Any deterioration in U.S.-China relations could increase tensions and create greater uncertainty in our business dealings in China and with Chinese companies and could require us to bring aspects of our operations in China back to the United States, which could be time-consuming, expensive and disruptive.
+Added: These risks could cause us to incur increased expenses and could harm our ability to manage our operations effectively and successfully in China.
+Added: Moreover, any significant or prolonged deterioration in the relationship between the United States and China could adversely affect our operations in China.
+Added: Certain risks and uncertainties of doing business in China are solely within the control of the Chinese government, and Chinese law regulates the scope of our foreign investments and business conducted within China.
+Added: The escalation of international tensions has increased the risk associated with our operations in China.
+Added: Either the U.S.
+Added: or the Chinese government may limit or sever our ability to communicate with our China operations or may take actions that force us to close our operations in China.
+Added: We employ many of our technology and content employees in China, and we have other employees in China that support our business.
+Added: Any disruption of our operations in China would adversely impact our business.
+Added: If we are required to move aspects of our operations out of China because of political or geopolitical issues, changes in laws, inquiries from health insurance carriers or for other reasons, we could incur increased expenses, and our business, operating results and financial condition could be harmed.
Our business is seasonal in nature, and if we are not successful in responding to changes in the seasonality of our business, our business, operating results and financial condition could be harmed.
Due to the timing of Medicare and individual and family health plan annual enrollment periods, which may be subject to change from time to time, our financial results fluctuate and are not comparable from quarter to quarter.
−Removed: The Medicare annual enrollment period occurs from October 15 to December 7 each year, the individual and family health insurance open enrollment period occurs from November 1 through December 15 each year for most states, and the Medicare Advantage open enrollment period, during which Medicare-eligible individuals enrolled in a Medicare Advantage plan can switch to the original Medicare program or switch to a different Medicare Advantage plan, runs from January 1 through March 31 of each year.
+Added: The Medicare annual enrollment period occurs from October 15 to December 7 each year, the individual and family health insurance open enrollment period typically occurs from November 1 through December or January 15 each year for most states, and the Medicare Advantage open enrollment period, during which Medicare-eligible individuals enrolled in a Medicare Advantage plan can switch to the Original Medicare program or switch to a different Medicare Advantage plan, runs from January 1 through March 31 of each year.
As a result, we have traditionally experienced an increase in the number of submitted Medicare-related applications and approved members during the fourth quarter and, to a lesser extent, in the first quarter, and an increase in Medicare plan-related expense, including marketing and advertising expenses, during the third and fourth quarters in connection with the open enrollment periods.
−Removed: However, because commissions from approved customers are paid to us over time, our operating results, and in particular, our operating cash flows, could be adversely impacted by a substantial increase in marketing and advertising expense.
+Added: However, because commissions from approved consumers are paid to us over
+Added: time, our operating results, and in particular, our operating cash flows, could be adversely impacted by a substantial increase in marketing and advertising expense.
Changes in timing of the Medicare or individual and family health plan enrollment periods, adoption of new or special enrollment periods, changes in eligibility and subsidies applicable to the purchase of health insurance, and changes in the laws and regulations that govern the sale of health insurance may occur from time to time, and we may not be able to timely adjust to changes in the seasonality of our business, which could harm our business, operating results and financial condition.
−Removed: Changes in our management or other key employees could affect our business, operating results and financial condition.
+Added: Changes in our senior management or other key employees could affect our business, operating results and financial condition.
Our success is dependent upon the performance of our senior management and other key employees, as well as our ability to attract and retain qualified personnel for all areas of our organization.
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In recent years, we have appointed several new executive officers and other senior leaders across multiple functions, and we may experience additional changes in the future.
+Added: For example, in 2024, we appointed a new chief revenue officer and a new chief financial officer.
+Added: In addition, in August 2024, our Chief Executive Officer notified the Company of his decision to retire from his position as the Company’s chief executive officer upon appointment of a successor, and we are currently engaged in a search process to identify his successor.
The transition and the departure of members of our senior management or other key employees could result in additional attrition.
−Removed: Any significant change in leadership over a short period of time could harm our business, operating results and financial condition.
+Added: Any significant change in leadership could be detrimental to our business, operating results and financial condition.
We also depend on a relatively small number of employees for certain key roles, and the loss of such key employees could harm our business.
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Our business success depends on our ability to timely recruit, train and retain qualified licensed insurance agents, or benefit advisors, and other personnel to provide superior customer service and support our strategic initiatives while also controlling our labor costs.
−Removed: Our omnichannel consumer engagement platform enables customers to discover, compare and purchase a health insurance plan using our proprietary online search engine as well as receive assistance of a licensed insurance agent, or benefit advisor, by telephone, online chat or through a hybrid online assisted interaction such as co-browsing.
+Added: Our omnichannel consumer engagement platform enables consumers to discover, compare and purchase a health insurance plan using our proprietary online search engine as well as receive assistance of a licensed insurance agent, or benefit advisor, by telephone, online chat or through a hybrid online assisted interaction such as co-browsing.
Our advisor enrollment center operations are critical to our success and dependent on our ability to recruit, train and effectively manage our licensed benefit advisors and other personnel who support the operation of our advisor enrollment centers.
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We may experience difficulties recruiting and retaining a sufficient number of benefit advisors and support staff during the year and especially for the Medicare annual enrollment period.
−Removed: Even if we are successful in recruiting licensed benefit advisors and support staff, failure to retain, train and ensure the productivity of our benefit advisors and other individuals that operate our advisor enrollment centers could result in lower-than-expected sold plans, conversion rates and revenue, higher costs of acquisition per member and higher plan termination rates, any of which could harm our business, operating results and financial condition.
+Added: Even if we are successful in recruiting licensed benefit advisors and support staff, failure to retain, train and ensure the productivity of our benefit advisors and other individuals that operate our advisor enrollment centers could result in lower-than-expected sold plans, conversion rates and revenue, higher costs of acquisition per
+Added: member and higher plan termination rates, any of which could harm our business, operating results and financial condition.
If our benefit advisors do not perform to the standards we expect of them or if we do not generate sufficient call volumes for our benefit advisors to remain productive, our sold plan volume, conversion and retention rates could be negatively impacted, and our business, operating results and financial condition would be harmed.
−Removed: If investments we make in our advisor enrollment center operations do not result in the returns we expected when
−Removed: making those investments, we could acquire fewer members, suffer a reduction in our membership, and our business, operating results and financial condition could be harmed.
+Added: If investments we make in our advisor enrollment center operations do not result in the returns we expected when making those investments, we could acquire fewer members, suffer a reduction in our membership, and our business, operating results and financial condition could be harmed.
Given that our business is seasonal in nature, if we are not successful in recruiting, training and retaining qualified benefit advisors and other workers, our benefit advisors or other workers do not perform to high standards or our investments in our advisor enrollment center operations do not result in expected returns, among other factors discussed in this risk factor, our ability to sell Medicare-related health insurance plans will be impaired during the Medicare annual enrollment period, which would harm our business, operating results and financial condition.
−Removed: Our business may be harmed if we are not successful in executing on our operational and strategic plans, including our growth strategies, and cost-saving and enrollment quality initiatives.
+Added: Our business could be harmed if we are not successful in executing on our operational and strategic plans.
Our future performance depends in large part upon our ability to execute our operational and strategic plans.
−Removed: Our success depends in large part on our ability to develop and improve products and services.
+Added: Our success depends in large part on our ability to diversify our revenue and scale our business.
We have in the past made, and may in the future, make, significant investments in marketing and advertising, technology and content, customer care and enrollment.
−Removed: Our growth strategy also involves investment in the development of new offerings and initiatives that differentiate us from our competitors, including those aimed at increasing the effectiveness of our sales and marketing organizations.
+Added: Our growth strategy also involves continued investment to expand our brand awareness across all products and channels and investment in improving our member retention efforts and conversion rates while continuing to invest in our telesales organization.
We may also enter into strategic transactions or partnerships aligned with our business and growth objectives.
−Removed: Pursuing and investing in these initiatives may increase our expenses and our organizational complexity, divert management’s attention from other business concerns and also involve risks and uncertainties described elsewhere in this Risk Factors section, including the failure of our initiatives to achieve our retention, cost-savings, growth or profitability targets, inadequate return of capital on our investments, legal and regulatory compliance risks, potential changes in laws and regulations and other issues that could cause us to fail to realize the anticipated benefits of our investments and incur unanticipated liabilities.
+Added: Pursuing and investing in these initiatives may increase our expenses and our organizational complexity, divert management’s attention from other business concerns and also involve risks and uncertainties described elsewhere in this Risk Factors section, including the failure of our initiatives to achieve our revenue diversification, member retention, growth or profitability targets, inadequate conversion and telesales organization improvements, failure to evolve our brand, our inability to strengthen and expand our health insurance carrier partnerships, our inadequate return of capital on our investments, legal and regulatory compliance risks, potential changes in laws and regulations and other issues that could cause us to fail to realize the anticipated benefits of our investments and incur unanticipated liabilities.
If we are not successful in executing on our operational and strategic plans or if we do not realize the expected benefits of our investments, our business, operating results and financial condition would be harmed.
−Removed: In addition, from time to time, we may initiate restructuring plans to implement cost savings initiatives or programs including, among other things, reductions in workforce, and rationalizing our cost structure and other fixed and variable expenses.
−Removed: While these initiatives are intended to improve our operations through re-engineering, reorganizing, and better deployment of marketing expenses and other operating expenses, we may not successfully realize the expected benefits of the actions that we have or may in the future take in connection with these restructuring plans.
−Removed: A variety of risks could cause us not to realize some or all of the expected benefits of these or any other restructuring plans that we may undertake, including, among others, higher than anticipated costs in implementing such restructuring plans, management distraction from ongoing business activities, damage to our reputation and brand image, including negative publicity, workforce attrition beyond planned reductions and risks and uncertainties described elsewhere in this Risk Factors section.
−Removed: Even if we do implement and administer these plans in the manner contemplated, our estimated cost savings resulting from them are based on several assumptions that may prove to be inaccurate and, as a result, we cannot assure you that we will realize these cost savings.
−Removed: Our failure to effectively manage our operations and maintain our company culture as our business evolves and our work practices change could harm us.
−Removed: Our future operating results will depend on our ability to manage our operations.
−Removed: It is also important to our success that we recruit qualified personnel and properly train and manage them, all while maintaining our corporate culture and spirit of innovation.
−Removed: If we are not successful in these efforts, our growth and operations could be adversely affected.
−Removed: In the third quarter of 2022, we adopted a remote first workplace model in the United States, meaning that, except for those employees whose job responsibilities require in-office work, none of our employees are required to work at the office.
−Removed: While we believe allowing employees to work remotely will help us attract and retain talent, transitioning to and operating as a remote first company could negatively impact employee productivity and morale, sales and marketing efforts, customer success efforts, and revenue growth rates or other financial metrics, or create operational or other challenges, any of which could adversely impact our business, financial
−Removed: condition and operating results in any given period, especially if such disruption occurs during or in our preparation for the Medicare annual enrollment period or individual and family health insurance enrollment periods.
−Removed: Technologies in our employees’ homes may also be more limited or less reliable than those provided in our offices.
−Removed: We may also be exposed to risks associated with the various locations of our remote employees, including compliance with local laws and regulations, and if employees fail to inform us of changes in their work location, we may be exposed to additional risks without our knowledge.
−Removed: If our key personnel or a significant portion of our employees are unable to work effectively in a remote setting or our business operations are otherwise disrupted during the Medicare annual enrollment period or individual and family health insurance enrollment periods, the adverse impact on our business would be particularly pronounced.
−Removed: It may also be difficult for us to preserve our corporate culture, and our employees may have less opportunities to collaborate in meaningful ways, which could harm our ability to retain and recruit employees, innovate and operate our business effectively.
−Removed: Our operations in China involve many risks that could increase expenses, expose us to increased liability and adversely affect our business, operating results and financial condition.
−Removed: Our subsidiary in China conducts a portion of our operations, including the maintenance and update of our ecommerce platform and performance of specific tasks within our finance, customer care and enrollment functions.
−Removed: We rely on third-party vendors to communicate with our subsidiary in China.
−Removed: Our business would be harmed if our ability to communicate via these vendors with these employees failed, and we were prevented from promptly updating our software or implementing other changes to our database and systems, among other things.
−Removed: From time to time, we receive inquiries from health insurance carriers relating to our operations in China and the security measures we have implemented to protect data that our employees in China may be able to access.
−Removed: As a part of these inquiries, we have implemented additional security measures relating to our operations in China.
−Removed: Still, we may be required to implement further security measures to continue aspects of our operations in China.
−Removed: We may also be required to bring aspects of our operations in China back to the United States, which could be time-consuming and expensive and harm our operating results and financial condition.
−Removed: Health insurance carriers may also terminate our relationship due to concerns surrounding our China operations, which would harm our business, operating results and financial condition.
−Removed: Our operations in China also expose us to different laws, rules and regulations, including different intellectual property laws, which are not as protective of our intellectual property as the laws in the United States.
−Removed: United States and Chinese trade laws may also impose restrictions on the importation of programming or technology to or from the United States.
−Removed: We are also subject to anti-bribery and anti-corruption laws, privacy and data security laws, labor laws, tax laws, foreign exchange controls and cash repatriation restrictions in China.
−Removed: In recent years, China has adopted laws regulating cybersecurity and data protection.
−Removed: For example, a data security law in China that became effective on September 1, 2021 applies to the usage, collection and protection of data within China and imposes data security obligations and restrictions on transfers of certain data outside of China, including a prohibition on providing any data stored in China to law enforcement authorities or judicial bodies outside of China without prior Chinese government approval.
−Removed: There remains considerable uncertainty as to how the data security law is applied, and the regulatory environment continues to evolve.
−Removed: Such laws, regulations and standards are complex, ambiguous and subject to change or interpretation, which create uncertainty regarding compliance.
−Removed: Compliance with these laws and regulations could cause us to incur substantial costs or require us to change our business operations in China.
−Removed: Violation of applicable laws and regulations could adversely affect our brand, affect our relationship with our health insurance carriers, and could result in regulatory enforcement actions and the imposition of civil or criminal penalties and fines, any of which could harm our business, operating results and financial condition.
−Removed: Our business may be adversely impacted by changes in China’s economic or political condition, the relationship between China and the United States or other countries, and our ability to continue to conduct our current operations in China.
−Removed: Any such changes may be caused by geopolitical issues, natural disasters, war or other events or circumstances.
−Removed: These risks could cause us to incur increased expenses and could harm our ability to manage our operations effectively and successfully in China.
−Removed: Moreover, any significant or prolonged deterioration in the relationship between the United States and China could adversely affect our operations in China.
−Removed: Certain risks and uncertainties of doing business in China are solely within the control of the Chinese government, and Chinese law regulates the scope of our foreign investments and business conducted within China.
−Removed: The escalation of
−Removed: international tensions has increased the risk associated with our operations in China.
−Removed: Either the U.S.
−Removed: or the Chinese government may limit or sever our ability to communicate with our China operations or may take actions that force us to close our operations in China.
−Removed: We employ many of our technology and content employees in China, and we have other employees in China that support our business.
−Removed: Any disruption of our operations in China would adversely impact our business.
−Removed: If we are required to move aspects of our operations out of China because of political or geopolitical issues, changes in laws, inquiries from health insurance carriers or for other reasons, we could incur increased expenses, and our business, operating results and financial condition could be harmed.
+Added: In addition, we implemented a number of transformation initiatives and programs throughout 2022 and 2023 aimed at increasing the effectiveness of our sales and marketing organizations and rationalizing our cost structure and we may initiate more such plans from time to time in the future.
+Added: While these initiatives were and are expected to be intended to improve our operations, we may not successfully realize the expected benefits of any such restructuring plans or initiatives that we may undertake, due to a number of factors, including, among others, higher than anticipated costs in implementing such restructuring plans, management distraction from ongoing business activities, damage to our reputation and brand image, including negative publicity, workforce attrition beyond planned reductions and risks and uncertainties described elsewhere in this Risk Factors section.
+Added: Even if we do implement and administer these plans and initiatives in the manner contemplated, our estimated cost savings resulting from them are based on several assumptions that may prove to be inaccurate and, as a result, we cannot assure you that we will realize these cost savings.
Our self-insurance programs may expose us to significant and unexpected costs and losses.
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claims incurred but unpaid as of each balance sheet date.
−Removed: Our estimated liability is based on assumptions we believe to be reasonable under the current circumstances and will be adjusted as warranted based on changing circumstances.
+Added: Our estimated liability is based on assumptions we believe to be reasonable
+Added: under the current circumstances and will be adjusted as warranted based on changing circumstances.
It is possible, however, that our actual liabilities may exceed our estimates of losses.
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Risks Related to Laws and Regulations
−Removed: The marketing and sale of health insurance plans, including Medicare plans, are subject to numerous, complex and frequently changing laws, regulations and guidelines, and non-compliance with or changes in laws, regulations and guidelines, or changes in their interpretation or the manner in which they are enforced could harm our business, operating results and financial condition.
−Removed: The marketing and sale of health insurance plans, including Medicare plans, are subject to numerous, complex, and frequently changing laws, regulations and guidelines at the federal and state level.
+Added: Changes and developments in the health insurance industry or system, including changes in laws and regulations, could harm our business, operating results and financial condition.
+Added: The success of our business depends upon the private sector of the U.S.
+Added: health insurance system, including the Medicare program, which is subject to a changing regulatory environment at both the federal and state level.
+Added: Changes and developments in the health insurance system and Medicare program in the United States could reduce demand for our services and harm our business.
+Added: Ongoing health care reform efforts and measures may expand the role of government-sponsored coverage, including proposals for single payer or so called “Medicare-for-All” or other proposals that may have the effect of reducing or eliminating the market for our current range of health insurance products.
+Added: This could have far-reaching implications for the health insurance industry if enacted.
+Added: Some proposals would seek to eliminate the private marketplace while others would expand a government-sponsored option to a larger population or otherwise increase government oversight or competition in the sector or reduce the fees or commissions payable to brokers under the Medicare program.
+Added: Alternatively, other proposals may increase the role of the private sector in health care but be implemented in ways that reduce eHealth’s role in helping consumers select and enroll in insurance plans.
+Added: We are unable to predict the full impact of health care reform initiatives or other regulatory changes on our operations in light of the uncertainty of whether initiatives will be successful and the uncertainty regarding the terms and timing of any provisions enacted and the impact of any of those provisions on various healthcare and insurance industry participants.
+Added: In the event that laws, regulations or rules that eliminate or reduce private sources of health insurance or Medicare are adopted, or otherwise act to reduce eHealth’s role in connecting consumers with insurance plans, the demand for our products could be adversely impacted, and our business, operating results and financial condition would be harmed.
+Added: In recent years, the Medicare sector underwent a number of changes, including a gradual shift towards market consolidation and rationalization, with greater focuses on enrollment quality, profitability and longer-term member relationships.
+Added: These changes were prompted in part by regulatory changes, higher cost of care and other industry developments such as STAR’s methodology changes.
+Added: For example, certain new CMS rules that were scheduled to become effective October 2024 (“CY 2025 Final Rules”) were set to reduce agent and broker payment amounts and regulate contractual terms with Medicare Advantage and Medicare Part D prescription drug plans and dual eligible special needs plans enrollments.
+Added: While CMS partially reversed the CY 2025 Final Rules in response to preliminary injunction orders in third-party lawsuits, the pending litigation challenging the CY 2025 Final Rules remains ongoing, and therefore significant uncertainty remains as to how the CY 2025 Final Rules may impact our operations and our business.
+Added: Each year, CMS publishes reimbursement rates for the Medicare Advantage program, and even if such rates are deemed more favorable, there remains significant uncertainty as to whether such rates would be sufficient for carriers will be able to cover margins or maintain their plan strategies to avoid further disruptions in their benefit offerings, premiums and geographic business goals and coverage.
+Added: We expect the Medicare market to remain fluid for the foreseeable future.
+Added: The election of President Trump and Republican control of both houses of Congress may result in significant changes in, and have resulted in uncertainty with respect to, legislation, regulation, implementation and/or repeal of laws and rules related to government health programs, including Medicare, Medicaid and Affordable Care Act.
+Added: For example, President Trump has issued various executive orders reversing several Biden administration healthcare policies, and additional executive orders may be forthcoming.
+Added: Members of the U.S.
+Added: House of Representatives have also began considering a series of legislative proposals targeting Medicaid, Medicare and other entitlement programs, and we expect there will be continued proposals targeting reimbursement methodologies and the number of individuals eligible for government healthcare programs.
+Added: In addition, the staff of the Department of Government Efficiency (the "DOGE")
+Added: have been provided access to key payment and contracting systems at CMS in connection with DOGE’s efforts to identify opportunities for improving efficiency and identifying fraud and ineffective use of government resources.
+Added: While we cannot predict the actions of the DOGE, there is a possibility that changes will be made to CMS spending, which could ultimately affect our financial condition and results of operation.
+Added: The marketing and sale of health insurance plans, including Medicare plans, are subject to numerous, complex and frequently changing laws, regulations and guidelines.
+Added: Non-compliance with or changes in laws, regulations and guidelines, or changes in their interpretation or the manner in which they are enforced could harm our business, operating results and financial condition.
+Added: healthcare industry is highly regulated and subject to numerous, complex, and frequently changing laws, regulations and guidelines at the federal and state level.
Compliance with these evolving laws and regulations may involve significant costs, cause significant delays in our ability to go to market with new marketing and product initiatives and strategies or require us to change our business practices, which could have an adverse impact on our business, operating results and financial condition.
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CMS, state departments of insurance or health insurance carriers may decide to object to or not to approve aspects of our online platforms, sales function or marketing materials and processes and may determine that certain existing aspects of our Medicare-related business are not in compliance with legal requirements.
−Removed: CMS scrutinizes health insurance carriers whose Medicare plans we sell, and those health insurance carriers may be held responsible for actions that we, our agents and our partners take, including our marketing materials and actions that
−Removed: lead to complaints or disenrollment.
−Removed: Health insurance carriers are increasingly evaluating broker performance based on the quality of their enrollments, including complaints, retention rates, customer satisfaction and volumes.
+Added: CMS scrutinizes health insurance carriers whose Medicare plans we sell, and those health insurance carriers may be held responsible for actions that we, our agents and our partners take, including our marketing materials and actions that lead to complaints or disenrollment.
+Added: Health insurance carriers are increasingly evaluating broker performance based on the quality of their enrollments, including complaints, retention rates, consumer satisfaction and volumes.
As a result, health insurance carriers may terminate their relationships with us, or they may require us to take other corrective action if our Medicare product sales, marketing and operations are not in compliance or give rise to too many complaints.
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Inquiries and proceedings initiated by the government could adversely impact our health insurance licenses, require us to pay fines, require us to modify marketing and business practices, result in litigation and otherwise harm our business, operating results and financial condition.
−Removed: In April 2023, CMS released final versions of certain rules initially proposed in December 2022.
−Removed: The finalized rules, among other things, require us and our partners to provide to consumers additional disclaimers that may direct them away from our enrollment platform and towards government owned or operated enrollment channels or other platforms, add complications to the Medicare marketing material filing and review process, increase CMS and insurance carrier monitoring of third party marketing organizations (“TPMOs”) such as us, add requirements on agents enrolling beneficiaries in Medicare plans, limit marketing of plan benefits and cost savings, require lengthy new disclosures that make certain forms of marketing infeasible, potentially require a 48-hour waiting period between initial contact with a beneficiary and enrolling that beneficiary in certain circumstances, and limit the time we may contact beneficiaries about Medicare plan options to six months after the beneficiary gives us permission for such contact.
−Removed: These additional requirements could impede or otherwise harm our business, operating results and financial condition.
−Removed: There may be further potential impact on the business upon the release of any new guidance and sub-regulatory guidance or changes in their interpretation or the manner in which the guidance is enforced.
−Removed: Certain new CMS rules were scheduled to become effective October 2024 (“CY 2025 Final Rules”) which, among other things, were set to reduce agent and broker payment amounts and regulate contractual terms with Medicare Advantage and Medicare Part D prescription drug plans and dual eligible special needs plans enrollments.
−Removed: The CY 2025 Final Rules also finalized provisions requiring certain documentation and consent regarding the collection and sharing of personal data with other TPMOs.
−Removed: On July 18, 2024, CMS partially reverted the CY 2025 Final Rules to the rules previously in effect in response to preliminary injunction orders in third-party lawsuits challenging the provisions noted above.
−Removed: The pending litigation challenging the CY 2025 Final Rules remains ongoing, and therefore the CY 2025 Final Rules may still have an adverse effect on our operations, our business, operating results and financial condition.
−Removed: A new Federal Communications Commission (“FCC”) regulation is scheduled to become effective in January 2025, which would require “one-to-one” consent under the Telephone Consumer Protection Act (“TCPA”), allow blocking of “red flagged” robotexting numbers, codify do-not-call rules for texting, make revocation of TCPA consent easier and encourage an opt-in approach for delivering email-to-text messages.
−Removed: These additional requirements may impact the viability of partnerships that we use for marketing efforts and could impede or otherwise harm our business, operating results and financial condition.
−Removed: Changes and developments in the health insurance industry or system, including changes in laws and regulations, could harm our business, operating results and financial condition.
−Removed: Our business depends upon the private sector of the U.S.
−Removed: health insurance system, including the Medicare program, which is subject to a changing regulatory environment at both the federal and state level.
−Removed: Changes and developments in the health insurance system and Medicare program in the United States could reduce demand for our services and harm our business.
−Removed: Ongoing health care reform efforts and measures may expand the role of
−Removed: government-sponsored coverage, including proposals for single payer or so called “Medicare-for-All” or other proposals that may have the effect of reducing or eliminating the market for our current range of health insurance products, which could have far-reaching implications for the health insurance industry if enacted.
−Removed: Some proposals would seek to eliminate the private marketplace while others would expand a government-sponsored option to a larger population or otherwise increase government oversight or competition in the sector or reduce the fees or commissions payable to brokers under the Medicare program.
−Removed: We are unable to predict the full impact of health care reform initiatives or other regulatory changes on our operations in light of the uncertainty of whether initiatives will be successful and the uncertainty regarding the terms and timing of any provisions enacted and the impact of any of those provisions on various healthcare and insurance industry participants.
−Removed: Changes to the Medicare program or the broader health insurance system as a result of elections or political developments could harm our business, operating results and financial condition.
−Removed: In the event that laws, regulations or rules that eliminate or reduce private sources of health insurance or Medicare are adopted, the demand for our products could be adversely impacted, and our business, operating results and financial condition would be harmed.
+Added: Each year, CMS releases new rules relating to Medicare plans, which can have a material effect on our operations, our business, operating results and financial condition.
+Added: For example, CMS has proposed new rules scheduled to become effective in late 2025 (“CY 2026 Proposed Rules”) which, among other things, would increase the scope and complexity for required reviews and filing of marketing and communications, and require brokers and
+Added: agents to make additional statements or disclosures on calls that will increase the time required to assist beneficiaries and may limit the ability of eHealth to timely assist all beneficiaries.
+Added: CMS subsequently announced that it is deferring taking actions on certain marketing provisions but may evaluate them for future rule making.
+Added: These additional requirements, if enacted, may impact the viability of partnerships that we use for marketing efforts, may increase the chance of related litigation, and could impede or otherwise harm our business, operating results and financial condition.
In addition, each state regulates its insurance market, including by regulating the ability of insurance companies to set premiums and prohibiting brokers and agents such as eHealth from competing in certain ways, such as offering price reductions and rebates or marketing in certain ways.
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Our business, operating results and financial condition may be materially and adversely affected if we are unable to adapt to regulatory changes.
−Removed: From time to time we are subject to various legal proceedings, which could adversely affect our business, operating results and financial condition.
−Removed: We are, and may in the future become, involved in various legal proceedings and governmental inquiries, including labor and employment-related claims, claims relating to our marketing or sale of health insurance, intellectual property claims and claims relating to our compliance with securities laws.
+Added: We have been and may in the future be subject to various legal proceedings, including litigation or government enforcement actions, which could adversely affect our business, operating results and financial condition.
+Added: We are, and may in the future become, involved in various legal proceedings, litigation, governmental inquiries and enforcement actions, including labor and employment-related claims, claims relating to our marketing or sale of health insurance, intellectual property claims and claims relating to our compliance with securities laws.
For example, in January 2022, we received a subpoena from the U.S.
−Removed: Attorney’s Office for the District of Massachusetts, seeking, among other things, information regarding our arrangements with insurance carriers, and we may receive similar inquiries in the future.
−Removed: Such inquiries and any other claims asserted against us, with or without merit, may be time-consuming, may be expensive to address and may divert management’s attention and other resources.
+Added: Attorney’s Office for the District of Massachusetts, seeking, among other things, information regarding our arrangements with insurance carriers, and on May 1, 2025, a qui tam action previously filed against us alleging the violation of the Federal False Claims Act in connection with our marketing activities was unsealed and the U.S.
+Added: Attorney’s Office for the District of Massachusetts filed a complaint intervening in part in the qui tam action.
+Added: We may receive similar inquiries or be subject to similar enforcement actions in the future.
+Added: Such inquiries, enforcement actions, litigation, and any other claims asserted against us, with or without merit, may be time-consuming, may be expensive to address and may divert management’s attention and other resources.
These claims also could subject us to significant liability for damages, jeopardize our licenses to operate and harm our reputation.
−Removed: Our insurance and indemnities may not cover all claims that may be asserted against us.
+Added: Our insurance and indemnities may not cover all claims that have been or that may be asserted against us.
If we are unsuccessful in our defense in these legal proceedings, we may be forced to pay damages or fines, enter into consent decrees, stop offering our services or change our business practices, any of which would harm our business, operating results and financial condition.
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In addition, each employee who transacts health insurance business on our behalf must maintain a valid license in one or more states.
−Removed: Because we maintain health insurance licenses to do business in all 50 states and the District of Columbia, compliance with health insurance-related laws, rules and regulations is difficult and
−Removed: imposes significant costs on our business.
+Added: Because we maintain health insurance licenses to do business in all 50 states and the District of Columbia, compliance with health insurance-related laws, rules and regulations is difficult and imposes significant costs on our business.
Each jurisdiction’s insurance department typically has the power, among other things, to:
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Due to the complexity, periodic modification and differing interpretations of insurance laws and regulations, we may not have always been, and we may not always be, in compliance with them.
−Removed: New laws, regulations and guidelines also may not be compatible with the sale of health insurance over the Internet or with various aspects of our platform or manner of marketing or selling health insurance plans.
+Added: New laws, regulations and guidelines also may not be compatible with the sale of health insurance over the Internet, with modern technologies such as artificial intelligence, or with various aspects of our platform or manner of marketing or selling health insurance plans.
Failure to comply with insurance laws, regulations and guidelines or other laws and regulations applicable to our business could result in significant liability, additional department of insurance licensing requirements, required modification of our advertising and business practices, changes to our existing technology or platforms, the limitation, suspension and/or revocation of our licenses to sell health insurance, termination of our relationship with health insurance carriers and loss of commissions and/or our inability to sell health insurance plans, which would harm our business, operating results and financial condition.
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As a result, we are subject to various state and federal laws and contractual requirements regarding the access, use and disclosure of personal information.
−Removed: Compliance with state and federal privacy-related laws, particularly new state legislation such as the California Consumer Privacy Act and its recent amendments, and increasingly robust industry standard security frameworks will result in cost increases due to an increased need for privacy compliance, oversight and monitoring, and the development of new processes to effectuate and demonstrate compliance.
+Added: Compliance with state and federal privacy-related laws, particularly state legislation such as the California Consumer Privacy Act and its recent amendments, and increasingly robust industry standard security frameworks will result in cost increases due to an increased need for privacy compliance, oversight and monitoring, and the development of new processes to effectuate and demonstrate compliance.
The effects of potential non-compliance by us or third-party service providers, and enforcement actions, may result in increased costs to our business and reputational harm.
The privacy and cybersecurity legislative landscape is rapidly evolving on the state and federal level.
−Removed: Such changes create challenges for businesses to comply with the
−Removed: new legal obligations in a systematic fashion.
+Added: Such changes create challenges for businesses to comply with the new legal obligations in a systematic fashion.
These new legal requirements may change the way we conduct our business and may harm our business, operating results and financial condition.
Any perception that our practices, products or services violate individual privacy or data protection rights may subject us to public criticism, class action lawsuits, reputational harm, or investigations or claims by regulators, industry groups or other third parties, any of which could disrupt or adversely impact our business and expose us to increased liability.
−Removed: In the event that additional data privacy or data security laws are implemented, or our health insurance carrier or other partners determine to impose requirements on us relating to data privacy security, we may not be able to timely comply with such requirements or such requirements may not be compatible with our current processes.
+Added: If additional data privacy or data security laws are implemented, or our health insurance carrier or other partners determine to impose requirements on us relating to data privacy security, we may not be able to timely comply with such requirements or such requirements may not be compatible with our current processes.
Changing our processes could be time-consuming and expensive, and failure to timely implement required changes could result in our inability to sell health insurance plans in a particular jurisdiction or for a particular health insurance carrier or subject us to liability for non-compliance, any of which would damage our business, operating results and financial condition.
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If we are not in compliance, we may not be able to accept information from consumers, and our relationship with health insurance carriers could be adversely impacted or terminated, which would harm our business, operating results and financial condition.
+Added: Our business could be harmed if we are unable to contact our consumers or market the availability of our products through specific channels.
+Added: We use email, telephone and SMS text, among other channels, to market our services to potential members and as the primary means of communicating with our existing members, and some of these communications may be subject to the TCPA and other telemarketing laws, including state laws, that restrict our ability to market using the telephone or SMS text in certain respects.
+Added: The laws and regulations governing the use of email, telephone calls and SMS text for marketing purposes continue to evolve, and changes in technology, the marketplace or consumer preferences may lead to the adoption of additional laws or regulations or changes in interpretation of existing laws or regulations.
+Added: If new laws or regulations are adopted, or existing laws and regulations are interpreted or enforced, to impose additional restrictions on our ability to send email, telephone calls or SMS text messages to our members or potential members, we may not be able to communicate with them in a cost-effective manner.
+Added: While we have policies in place to comply with the TCPA and other telemarketing laws, we have been in the past, and may in the future become, subject to claims that we have violated the TCPA.
+Added: If we were found to have violated the TCPA, our business, operating results and financial condition could be harmed.
+Added: The TCPA and other laws and regulations relating to telemarketing are also subject to periodic updates and changes in enforcement and litigation risks.
+Added: In addition to legal restrictions on the use of email, Internet service providers, email service providers and others attempt to block the transmission of unsolicited email, commonly known as “spam.” Many Internet and email service providers have relationships with organizations whose purpose is to detect and notify the Internet and email service providers of entities that the organization believes are sending unsolicited email.
+Added: If an Internet or email service provider identifies email from us as “spam” as a result of reports from these organizations or otherwise, we can be placed on a restricted list that will block our email to members or potential members.
+Added: Similarly, telephone carriers may block or put consumer warnings on calls or SMS text messages originating from call centers.
+Added: Consumers increasingly screen their incoming emails, telephone calls and SMS text messages, including by using screening tools and warnings;
+Added: therefore, our members or potential members may not reliably receive our messages, whether or not such messages constitute marketing.
+Added: If we are unable to communicate effectively by email, telephone or SMS text with our members and potential members as a result of legislation, legal or regulatory actions, blockage, screening technologies or otherwise, our business, operating results and financial condition would be harmed.
Any legal liability, regulatory penalties, complaints or negative publicity related to us or our services could harm our business, operating results and financial condition.
2 unchanged sentences
We also use the information provided on our website and otherwise collected by us to publish reports designed to educate consumers, facilitate public debate, and facilitate reform at the state and federal level.
−Removed: If the information we provide on our website, through our advisor enrollment centers, in our marketing materials or otherwise is not accurate or is construed as misleading, or if we do not properly assist individuals and businesses in purchasing health insurance, members, health insurance carriers and others could attempt to hold us liable for damages or require us to take corrective actions, our relationships with health insurance carriers could be terminated or impaired and regulators could attempt to subject us to penalties, force us to stop using our websites, marketing material or certain aspects of them, revoke our licenses to transact health insurance business in a particular jurisdiction, and/or compromise the status of our licenses to transact health insurance business in other jurisdictions, which could result in our loss of our commission revenue and harm our business, operating results and financial condition.
+Added: If the information we provide on our website, through our advisor enrollment centers, in our marketing materials or otherwise is not accurate or is construed as misleading, or if we do not properly assist individuals and businesses in purchasing health insurance, members, health insurance carriers and others could attempt to hold us liable for damages or require us to take corrective actions.
+Added: In addition, our relationships with health insurance carriers could be terminated or impaired and
+Added: regulators could attempt to subject us to penalties, force us to stop using our websites, marketing material or certain aspects of them, revoke our licenses to transact health insurance business in a particular jurisdiction, and/or compromise the status of our licenses to transact health insurance business in other jurisdictions.
+Added: Any of these occurrences could result in our loss of our commission revenue and harm our business, operating results and financial condition.
In the ordinary course of operating our business, we and our health insurance carrier partners have received complaints that the information we provided was not accurate or was misleading.
1 unchanged sentence
We typically respond to these inquiries by explaining how we believe we are in compliance with relevant regulations, or we may modify our practices in connection with the inquiry.
−Removed: For example, we received a letter from the Committee on Finance of the United States Senate in January 2024 requesting information about our business practices related to lead generation, marketing and enrollment in Medicare Advantage health plans.
−Removed: These types of inquiries and associated claims could be time-consuming and expensive to address, could divert our management’s attention and other resources, could impact our relationships with health insurance carriers and could cause a loss of confidence in our services.
+Added: For example, in 2024 we received requests from the Committee on Finance of the United States Senate seeking information about our business practices related to lead generation, marketing and enrollment in Medicare Advantage health plans.
+Added: These types of inquiries and associated claims can be time-consuming and expensive to address, can divert our management’s attention and other resources, can impact our relationships with health insurance carriers and can cause a loss of confidence in our services.
As a result, whether or not we are able to successfully resolve these claims, they could harm our business, operating results and financial condition.
−Removed: Our business could be harmed if we are unable to contact our consumers or market the availability of our products through specific channels.
−Removed: We use email and telephone, among other channels, to market our services to potential members and as the primary means of communicating with our existing members.
−Removed: The laws and regulations governing the use of email and telephone calls for marketing purposes continue to evolve, and changes in technology, the marketplace or consumer preferences may lead to the adoption of additional laws or regulations or changes in interpretation of existing laws or regulations.
−Removed: If new laws or regulations are adopted, or existing laws and regulations are interpreted or enforced, to impose additional restrictions on our ability to send email or telephone calls or SMS text messages to our members or potential members, we may not be able to communicate with them in a cost-effective manner.
−Removed: For example, we use telephones to communicate with customers and prospective customers, and some of these communications may be subject to the TCPA and other telemarketing laws, including state laws, that restrict our ability to market using the telephone in certain respects.
−Removed: The TCPA prohibits us from using an automatic telephone dialing system or prerecorded or artificial voices to make certain telephone calls to consumers without their prior express written consent and provides for statutory damages of $500 for each violation and $1,500 for each willful violation.
−Removed: While we have policies in place to comply with the TCPA and other telemarketing laws, we have been in the past, and may in the future become, subject to claims that we have violated the TCPA.
−Removed: In the event that we were found to have violated the TCPA, our business, operating results and financial condition could be harmed.
−Removed: The TCPA and other laws and regulations relating to telemarketing are also subject to periodic updates and changes in enforcement and litigation risks.
−Removed: In addition to legal restrictions on the use of email, Internet service providers, email service providers and others attempt to block the transmission of unsolicited email, commonly known as “spam.” Many Internet and email service providers have relationships with organizations whose purpose is to detect and notify the Internet and email service providers of entities that the organization believes are sending unsolicited email.
−Removed: If an Internet or email service provider identifies email from us as “spam” as a result of reports from these organizations or otherwise, we can be placed on a restricted list that will block our email to members or potential members.
−Removed: Similarly, telephone carriers may block or put consumer warnings on calls or SMS text messages originating from call centers.
−Removed: Consumers increasingly screen their incoming emails and telephone calls and SMS text messages, including by using screening tools and warnings, and therefore our members or potential members may not reliably receive our messages, whether or not such messages constitute marketing.
−Removed: If we are unable to communicate effectively by email or telephone with our members and potential members as a result of legislation, legal or regulatory actions, blockage, screening technologies or otherwise, our business, operating results and financial condition would be harmed.
Risks Related to Finance, Accounting and Tax Matters
Our commission revenue could be negatively impacted by changes in our estimated conversion rate of an approved member to a paying member, our forecast of average plan duration or our forecast of likely commission amounts.
−Removed: Our commission revenue, which is primarily comprised of commissions from health insurance carriers, is computed using the estimated LTVs of commission payments that we expect to receive, and we re-compute LTVs for all outstanding cohorts on a quarterly basis.
+Added: Our commission revenue, which is primarily comprised of commissions from health insurance carriers, is computed using the estimated LTVs of commissions that we expect to receive.
+Added: We re-compute LTVs for all outstanding cohorts on a quarterly basis.
As a result, the rate at which consumers visiting our ecommerce platforms and advisor enrollment centers seeking to purchase health insurance are converted into approved members directly impacts our revenue.
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These factors include, but are not limited to:
−Removed: • changes in consumer shopping behavior due to circumstances outside of our control, such as economic conditions, inflation, public health crises or illnesses, consumers’ ability or willingness to pay for health insurance, adverse events or perceptions affecting the U.S.
+Added: • changes in consumer shopping behavior due to circumstances outside of our control, such as economic conditions, recession, inflation, public health crises or illnesses, consumers’ ability or willingness to pay for health insurance, adverse events or perceptions affecting the U.S.
or international financial systems, adverse weather conditions or natural disasters, unemployment rates, availability of unemployment benefits or proposed or enacted legislative or regulatory changes impacting our business, including health care reform;
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As a result, negative changes in the factors upon which we estimate constrained LTVs, such as reduced conversion of approved members to paying members, increased health insurance plan terminations or a reduction in the lifetime commission amounts we expect to receive for selling the plan to a member or other changes could harm our business, operating results and financial condition.
−Removed: Changes in LTV may result in an increase or a decrease to revenue and a corresponding increase or decrease to commissions receivable.
+Added: Changes in LTV may result in an increase or a decrease in revenue and a corresponding increase or decrease in commissions receivable.
In addition, if we ultimately receive commission payments that are less than the amount we estimated when we recognized commission revenue, we would need to write off the remaining commissions receivable balance, which would adversely impact our business, operating results and financial condition.
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The forecasted average plan duration is another important factor in our estimation of constrained LTV.
−Removed: When a plan is canceled, or if we otherwise do not remain the agent on the policy, we no longer receive the related commission payment.
+Added: When a plan is canceled, or if we otherwise do not remain the agent on the policy, we no longer receive the related commission.
Our forecasted average plan duration and health insurance plan termination rate are calculated based on our historical data by plan type.
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The commission rates we receive are impacted by a variety of factors, including the particular health insurance plans chosen by our members, the carriers offering those plans, our members’ states of residence, the laws and regulations in those jurisdictions, the average premiums of plans purchased through us and health care reform.
−Removed: Our commission revenue per member has in the past decreased, and could in the future decrease, as a result of reductions in contractual commission rates, a change in the mix of carriers whose products we sell during a given period and increased health insurance plan termination rates, all of which are beyond our control and may occur on short notice.
+Added: Our commission revenue per member has in the past decreased, and could in the future decrease, as a result of reductions in contractual commission rates, a change in the mix of carriers whose products we sell during a given period and increased health insurance plan termination rates, all of which are beyond our control and may occur on short
To the extent these and other factors cause our commission revenue per member to decline, our revenue may decline, and our business, operating results and financial condition would be harmed.
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We also analyze whether circumstances have changed and consider any known or potential modifications to the inputs into LTV in light of the factors that can impact the amount of cash expected to be collected in future periods including but not limited to commission rates, carrier mix, plan duration, changes in laws and regulations and cancellations of insurance plans offered by health insurance carriers with which we have a relationship.
−Removed: We evaluate the appropriateness of our constraints on an ongoing basis, and we update our assumptions when we observe a sufficient amount of evidence that would suggest that the long-term expectation underlying the assumptions has changed.
+Added: We evaluate the appropriateness of our constraints on an annual basis, and we update our assumptions when we observe a sufficient amount of evidence that would suggest that the long-term expectation underlying the assumptions has changed.
While we have recognized positive net adjustment revenue in the recent past, there can be no assurance that we will continue to recognize positive net adjustment revenue.
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If commission reports we receive from carriers are inaccurate or not sent to us in a timely manner, our business and operating results could be harmed, and we may not recognize trends in our membership.
−Removed: We rely on health insurance carriers to timely and accurately report the amount of commissions earned by us, and we calculate our commission revenue, prepare our financial reports, projections and budgets and direct our marketing and other operating efforts based on the reports we receive from health insurance carriers.
+Added: We rely on health insurance carriers to timely and accurately report the commissions earned by us, and we calculate our commission revenue, prepare our financial reports, projections and budgets and direct our marketing and other operating efforts based on the reports we receive from health insurance carriers.
There have been instances where we have determined that plan cancellation data reported to us by a health insurance carrier has not been accurate.
The extent to which health insurance carriers are inaccurate in their reporting of plan cancellations could cause us to change our cancellation estimates, which could adversely impact our revenue.
−Removed: We have designed controls to assess the completeness and accuracy of the data received, whereby we apply judgment and make estimates based on historical data and current trends to independently determine whether or not carriers
−Removed: are accurately reporting commissions due to us.
+Added: We have designed controls to assess the completeness and accuracy of the data received, whereby we apply judgment and make estimates based on historical data and current trends to independently determine whether or not carriers are accurately reporting commissions due to us.
We also operate procedures with carriers on an ongoing basis whereby potential under or over reporting is reconciled and discrepancies are resolved.
For instance, when we reconcile information health insurance carriers provide to us, we may determine that we were not historically paid commissions owed to us, which would cause us to have underestimated our membership.
−Removed: Conversely, health insurance carriers may require us to return commission payments paid in a prior period due to plan cancellations for members we previously estimated as being active.
−Removed: To the extent that health insurance carriers understate or fail to accurately report the amount of commissions due to us in a timely manner or at all, our estimates of constrained LTV may be adversely impacted, which would harm our business, operating results and financial condition.
+Added: Conversely, health insurance carriers may require us to return commissions paid in a prior period due to plan cancellations for members we previously estimated as being active.
+Added: To the extent that health insurance carriers understate or fail to accurately report the commissions due to us in a timely manner or at all, our estimates of constrained LTV may be adversely impacted, which would harm our business, operating results and financial condition.
In addition, any inaccuracies in the reporting from and reconciliations with insurance carriers may also impact our estimates of constrained LTV or our estimates of commission revenue for future periods which is based on historical trends, including trends relating to contracted commission rates and expected health insurance plan cancellation.
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For instance, with respect to health insurance plans, health insurance carriers do not directly report member cancellations to us.
−Removed: Other than small business health insurance, we infer cancellations from payment data that carriers provide by analyzing whether payments from members have ceased for a period of time, and we may not learn of a cancellation for several months.
+Added: than small business health insurance, we infer cancellations from payment data that carriers provide by analyzing whether payments from members have ceased for a period of time, and we may not learn of a cancellation for several months.
The majority of our members who terminate their plans do so by discontinuing their insurance premium payments to the carrier or notifying the carrier, and do not inform us of the cancellation.
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We may receive commission payments or other information that indicates that a member who was not included in our estimates for a prior period was in fact an active member at that time, or that a member who was included in our estimates was in fact not an active member.
−Removed: As a result of the Medicare annual enrollment and other open enrollment periods, we may not receive information from our carriers on as timely a basis due to the significant increase in health insurance transaction volume and for other reasons, which could impair the accuracy of our membership estimates.
−Removed: For these and other reasons, including if current trends in membership cancellation are inconsistent with past cancellation trends that we use to estimate our membership or if carriers subsequently report changes to the commission payments that they previously reported to us, our actual membership could be different from our estimates, perhaps materially.
+Added: As a result of the Medicare annual enrollment and other open enrollment periods, we may not receive information from our carriers on a timely basis due to the significant increase in health insurance transaction volume and for other reasons, which could impair the accuracy of our membership estimates.
+Added: For these and other reasons, including if current trends in membership cancellation are inconsistent with past cancellation trends that we use to estimate our membership or if carriers subsequently report changes to the commission payments that they previously reported to us, our actual membership could be materially different from our estimates.
If our actual membership is different from our estimates, the constrained LTV component of our revenue recognition could also be inaccurate, including as a result of an inaccurate estimate of the average amount of time our members maintain their health insurance plans.
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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, which was amended on August 16, 2022 and again on November 1, 2024 (as amended, the “Credit Agreement”).
−Removed: The Credit Agreement provides us with $70 million in term loans, the proceeds from which transaction were used to terminate our then-existing $75 million revolving credit facility with Royal Bank of Canada.
+Added: The Credit Agreement provides us with $70 million in term loans.
The Credit Agreement contains certain mandatory prepayment triggers and imposes certain covenants and restrictions on our business and our ability to obtain additional financing.
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Further, the Credit Agreement contains financial covenants requiring us to (x) maintain a minimum level of liquidity as of the end of each month and (y) maintain a ratio such that the outstanding amount of obligations under the Credit Agreement at the end of any month does not exceed 50% of the value of certain commissions receivable as of the end of such month.
−Removed: The events of default under the Credit Agreement include, among other things and subject to grace periods in certain instances, payment defaults, cross defaults with certain other material indebtedness, breaches of covenants or representations and warranties, changes in control of our company, certain bankruptcy and insolvency events with respect to us and our subsidiaries, a restriction on all or a material portion of our business and the indictment of us or any subsidiary (or any senior officer thereof), or criminal proceedings against the same, which could result in a forfeiture of a material portion of our and our subsidiaries properties.
+Added: The events of default under the Credit Agreement include, among other things and subject to grace periods in certain instances, payment defaults, cross defaults with certain other material indebtedness, breaches of covenants or representations and warranties, changes in control of our company, certain bankruptcy and insolvency events with respect to us and our subsidiaries, a restriction on all or a material portion of
+Added: our business and the indictment of us or any subsidiary (or any senior officer thereof), or criminal proceedings against the same, which could result in a forfeiture of a material portion of our and our subsidiaries properties.
If we experience a decline in cash flow due to any of the factors described in this Risk Factors section or otherwise, we could have difficulty paying interest and principal amounts due on our indebtedness and meeting the financial covenants set forth in our Credit Agreement.
If we are unable to generate sufficient cash flow or otherwise obtain the funds necessary to make required payments under the Credit Agreement, or if we fail to comply with the requirements of our indebtedness, we could default under our Credit Agreement.
−Removed: Any default that is not waived could result in the acceleration of the obligations under the Credit Agreement, an increase in the applicable interest rate under the credit facility, and would permit our lender to exercise rights and remedies with respect to all of the collateral that is securing the Credit Agreement, which includes substantially all of our assets.
+Added: Any default that is not waived by the lender could result in the acceleration of the obligations under the Credit Agreement and an increase in the applicable interest rate under the credit facility.
+Added: It would also permit our lender to exercise rights and remedies with respect to all of the collateral that is securing the Credit Agreement, which includes substantially all of our assets.
Any such default could materially adversely affect our liquidity and financial condition.
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continues to own at least 30% of the shares of Series A Preferred Stock originally issued to it.
−Removed: the Company is required to maintain an Asset Coverage Ratio (as defined in the H.I.G.
−Removed: Investment Agreement) of at least 2.0x, calculated on a quarterly basis, which increased to 2.5x in August of 2023 (the “Minimum Asset Coverage Ratio”).
−Removed: The first measurement date of the 2.5x Minimum Asset Coverage Ratio was September 30, 2023.
−Removed: Additionally, the H.I.G.
−Removed: Investment Agreement requires the Company to maintain a Minimum Liquidity Amount (as defined in the H.I.G.
−Removed: Investment Agreement) for certain periods that ranges from $65.0 million to $125.0 million.
−Removed: As of December 31, 2023, we were in compliance with the Minimum Liquidity Amount.
−Removed: However, we have not met the Minimum Asset Coverage Ratio since the September 30, 2023 measurement date.
+Added: The Company is required to maintain an Asset Coverage Ratio and a Minimum Liquidity Amount (in each case, as defined in the H.I.G.
+Added: Investment Agreement).
Failure to maintain the Minimum Asset Coverage Ratio or the Minimum Liquidity Amount as of the date or the time period required by the H.I.G.
Investment Agreement, for as long as H.I.G.
−Removed: 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 our Board of Directors, the right to approve our annual budget, the right to approve the hiring or termination of certain key executives and the right to approve the
−Removed: incurrence of certain indebtedness.
−Removed: 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.
+Added: 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 our Board of Directors, the right to approve our annual budget, the right to approve the hiring or termination of certain key executives and the right to approve the incurrence of certain indebtedness.
+Added: We have not met the Minimum Asset Coverage Ratio since the September 30, 2023 measurement date and as of November 30, 2024, we were no longer in compliance with the Minimum Liquidity Amount.
+Added: As of March 31, 2025, H.I.G.
+Added: continued to own at least 30% of the shares.
These restrictions on the conduct of our business imposed by our lender or H.I.G.
−Removed: could materially adversely affect our business by, among other things, limiting our ability to take advantage of financings, mergers, acquisitions and other corporate opportunities that may be beneficial to the business.
+Added: could materially adversely affect our business by, among other things, limiting our ability to take advantage of financings, mergers, acquisitions and other corporate opportunities that may be beneficial to the business and other stockholders.
Even if the Credit Agreement were terminated, additional debt we could incur in the future may subject us to similar or additional covenants, which could place restrictions on the operation of our business.
Similarly, our investment or financing arrangement with any future investors may subject us to similar or additional covenants.
−Removed: Operating and growing our business is likely to require additional capital, and if capital is not available to us, our business, operating results and financial condition may suffer.
+Added: Operating and growing our business is likely to require additional capital.
+Added: If capital is not available to us, our business, operating results and financial condition may suffer.
Operating and growing our business is expected to require further investments in our business.
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in order to incur certain indebtedness, which could limit our ability to obtain additional financing.
−Removed: If we are unable to refinance our existing or future indebtedness, obtain adequate financing or obtain financing on terms satisfactory to us when we require it, we may default on our existing or future indebtedness, and our ability to continue to pursue our business objectives and to respond to business opportunities or challenges could be harmed, and our business, operating results and financial condition could be materially and adversely affected.
+Added: If we are unable to refinance our existing or future indebtedness, obtain adequate financing or obtain
+Added: financing on terms satisfactory to us when we require it, we may default on our existing or future indebtedness, and our ability to continue to pursue our business objectives and to respond to business opportunities or challenges could be harmed, and our business, operating results and financial condition could be materially and adversely affected.
If we fail to maintain proper and effective internal controls, our ability to produce accurate financial statements could be impaired, which could adversely affect our operating results, our ability to operate our business and our stock price.
We have a complex business organization.
−Removed: Ensuring that we have adequate internal financial and accounting controls and procedures in place to help ensure that we can produce accurate financial statements on a timely basis is a costly and time-consuming effort that needs to be re-evaluated frequently and is complicated by the expansion of our business operations and changing accounting requirements.
+Added: Ensuring that we have adequate internal control over financial reporting and adequate accounting controls and procedures in place to help ensure that we can produce accurate financial statements on a timely basis is a costly and time-consuming effort that needs to be re-evaluated frequently.
+Added: This process is complicated by the expansion of our business operations and changing accounting requirements.
Our management, including our chief executive officer and chief financial officer, does not expect that our internal control over financial reporting will prevent all errors or all fraud.
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Any failure to maintain or implement required new or improved controls, or any difficulties we encounter in their implementation, could result in significant deficiencies or material weaknesses, cause us to fail to timely meet our periodic reporting obligations or result in material misstatements in our financial statements.
−Removed: Any such failure could also adversely affect the results of periodic management
−Removed: evaluations and annual auditor attestation reports regarding disclosure controls and the effectiveness of our internal control over financial reporting required under Section 404 of the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder.
+Added: Any such failure could also adversely affect the results of periodic management evaluations and annual auditor attestation reports regarding disclosure controls and the effectiveness of our internal control over financial reporting required under Section 404 of the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder.
The existence of a material weakness could cause errors in our financial statements that could result in a restatement of financial statements, cause us to fail to timely meet our reporting obligations and cause investors to lose confidence in our reported financial information, leading to a decline in our stock price and potential lawsuits against us.
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To the extent that our provision for income taxes is subject to volatility or adverse outcomes as a result of tax examinations, our operating results could be harmed.
−Removed: Significant judgment is required to determine the recognition and measurement attribute prescribed in U.S.
+Added: Significant judgment is required to determine the recognition and measurement attributes prescribed in U.S.
generally accepted accounting principles relating to accounting for income taxes.
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A lack of future taxable income would adversely affect our ability to utilize these net operating loss carryforwards.
−Removed: In addition, utilization of the net operating loss carryforwards may be subject to a substantial annual limitation due to ownership changes that may have occurred or that could occur in the future, as required by Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), and similar state provisions.
+Added: In addition, utilization of the net operating loss carryforwards may be subject to a substantial annual
+Added: limitation due to ownership changes that may have occurred or that could occur in the future, as required by Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), and similar state provisions.
These ownership change limitations may limit the amount of net operating loss carryforwards and other tax attributes that can be utilized annually to offset future taxable income and tax, respectively.
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We rely in part upon third-party vendors, including cloud infrastructure and bandwidth providers, to operate our ecommerce platform and advisor enrollment centers.
−Removed: Consumers using our website and accessing our services
−Removed: depend upon online, mobile and other service providers for access to our website and services.
+Added: Consumers using our website and accessing our services depend upon online, mobile and other service providers for access to our website and services.
Our remote employees rely on third-party service providers to access our systems and other agent productivity tools.
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The effectiveness and stability of our advisor enrollment center systems and technology are critical to our ability to sell health insurance plans, particularly during key times, such as the Medicare enrollment periods, and the failure or interruption of any of these systems and technology or any inability to handle increased volume would harm our business, operating results and financial condition.
−Removed: Our business is subject to security risks, and if we experience a successful cyberattack or a security breach or are otherwise unable to safeguard the confidentiality and integrity of the data we hold, including sensitive personal information, our business will be harmed.
+Added: Issues relating to the use of new and evolving technologies, such as AI, in our business operations could result in liability, reputational harm and an adverse impact on our operating results and financial condition.
+Added: We plan to utilize our artificial intelligence (“AI”) Center of Excellence to help guide and prioritize our AI and technology initiatives for 2025.
+Added: However, social, ethical and operational issues relating to the use of AI in our business operations could result in liability, reputational harm and additional costs.
+Added: If our AI implementation, deployment or governance is ineffective or inadequate, it could result in incidents that impair the public acceptance of AI use or cause harm to individuals, customers or society, or result in our operations not working as intended or producing unexpected outcomes.
+Added: Also, use of third party models can pose security and privacy risks.
+Added: Jurisdictions around the world are developing and passing new regulations that apply specifically to the use of AI.
+Added: These regulations and the evolving AI regulatory environment could, among other impacts, result in inconsistencies among AI regulations and frameworks across jurisdictions, increase our compliance, governance and research and development costs and increase our exposure to claims related to our use of AI.
+Added: Our business is subject to security risks.
+Added: If we experience a successful cyberattack or a security breach or are otherwise unable to safeguard the confidentiality and integrity of the data we hold, including sensitive personal information, our business will be harmed.
Maintaining the security of our products and services is critical for us, our consumers, and the health insurance carriers we work with.
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We cannot assure that our preventative efforts, or those of our vendors or service providers, will be successful.
−Removed: These actual and potential breaches of our security measures and the accidental loss, inadvertent disclosure, or unauthorized dissemination of proprietary information or sensitive, personal, or confidential data about us, our employees, our customers, or their end users, including the potential loss or disclosure of such information or data as a result of hacking, fraud, trickery or other forms of deception, could expose us, our employees, our
−Removed: customers or the individuals affected to a risk of loss or misuse of this information.
+Added: These actual and potential breaches of our security measures and the accidental loss, inadvertent disclosure, or unauthorized dissemination of proprietary information or sensitive, personal, or confidential data about us, our employees, our customers, or their end users, including the potential loss or disclosure of such information or data as a result of hacking, fraud, trickery or other forms of deception, could expose us, our employees, our customers or the individuals affected to a risk of loss or misuse of this information.
This may result in litigation and liability or fines, our compliance with costly and time-intensive notice requirements, governmental inquiry or oversight, or a loss of customer confidence, any of which could harm our business or damage our brand and reputation, thereby requiring time and resources to mitigate these impacts.
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Our efforts to protect our intellectual property may need to be revised or more effective, and our trademarks or patents may be held invalid or unenforceable.
−Removed: Moreover, the law relating to intellectual property is not as developed in China, and our intellectual property rights may not be as respected in China as they are in the United States.
+Added: Moreover, the law relating to intellectual property is not as developed
+Added: in China, and our intellectual property rights may not be as respected in China as they are in the United States.
We may not be effective in policing unauthorized use of our intellectual property, trade secrets and other confidential information, and even if we do detect violations, litigation may be necessary to enforce our intellectual property rights.
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Our operating results are likely to fluctuate as a result of a variety of factors, including the factors described elsewhere in this Risk Factors section, many of which are outside of our control.
−Removed: For example, and among these factors, the assumptions underlying our estimates of commission revenue as required by ASC 606 may vary significantly over time.
+Added: For example, and among these factors, the assumptions underlying our estimates of commission revenue as required by Accounting Standards Codification (“ASC”) 606 may vary significantly over time.
As a result, comparing our operating results on a period-to-period basis may not be meaningful and you should not rely on our past results as an indication of our future performance, particularly in light of the fact that our business and industry are undergoing substantial change as a result of health care reform, competition, shifts in carrier and regulator priorities and initiatives we determine to pursue.
+Added: The guidance that we release from time to time contains forward-looking statements and is based on projections prepared by our management.
+Added: These projections are necessarily speculative in nature, and it can be expected that some or all of the assumptions underlying the guidance furnished by us will not materialize or will vary significantly from actual results.
+Added: Our actual results have, and may in the future, vary from our guidance and the variations may be material.
If our revenue or operating results differ from our guidance or fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially.
In the past, when our revenue and operating results differed from our guidance and the expectations of investors or securities analysts, the price of our common stock was impacted.
−Removed: Our actual operating results may differ significantly from our guidance.
−Removed: From time to time, we have released, and may continue to release, guidance in earnings conference calls, earnings releases, or otherwise, regarding our future performance that represents our management’s estimates as of the date of release.
−Removed: This guidance, which includes forward-looking statements, has been, and will be, based on projections prepared by our management.
−Removed: Guidance is necessarily speculative in nature, and it can be expected that some or all of the assumptions underlying the guidance furnished by us will not materialize or will vary significantly from actual results.
−Removed: Accordingly, our guidance is only an estimate of what management believes is realizable as of the date of release.
−Removed: Our actual results have, and may in the future, vary from our guidance and the variations may be material.
−Removed: In light of the foregoing, investors are urged not to rely upon our guidance in making an investment decision regarding our common stock.
−Removed: Projections are based upon a number of assumptions and estimates that, while presented with numerical specificity, are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and are based upon specific assumptions with respect to future business decisions, some of which will change.
−Removed: Among these factors, the assumptions underlying our estimates of commission revenue as required by ASC 606 , may vary significantly over time.
−Removed: We may state possible outcomes as
−Removed: high and low ranges.
−Removed: Any range we provide is not intended to imply that actual results could not fall outside of the suggested ranges.
−Removed: Any failure to successfully implement our operating strategy or the occurrence of any of the events or circumstances set forth in this Risk Factors section could result in the actual operating results being different from our guidance, and the differences may be adverse and material.
−Removed: The principal reason that we release guidance is to provide a basis for our management to discuss our business outlook with analysts and investors and we may decide to suspend guidance at any time.
−Removed: We do not accept any responsibility for any projections or reports published by any such third parties.
The price of our common stock has been and may continue to be volatile, and the value of your investment could decline.
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Factors that could cause fluctuations in the trading price of our common stock include the following:
−Removed: • price and volume fluctuations in the overall stock market from time to time, including as a result of inflation, or political or geopolitical instability;
+Added: • price and volume fluctuations in the overall stock market from time to time, including as a result of inflation, or political or geopolitical instability and public or market reaction thereto;
• volatility in the market prices and trading volumes of our competitors’ shares, including high technology stocks, which have historically experienced high levels of volatility;
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or international financial systems;
+Added: • the imposition of tariffs or other significant changes in relations between the United States and other countries in which we operate our business;
• general economic conditions, political instability and slow or negative growth of our markets.
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We have been, and may in the future be, subject to such legal actions.
−Removed: The value of our investments is subject to significant capital markets risk related to changes in interest rates and credit spreads as well as other investment risks, which may adversely affect our business, operating results and financial condition.
+Added: The value of our investments is subject to significant capital markets risk related to changes in interest rates and credit spreads as well as other investment risks.
+Added: These factors may adversely affect our business, operating results and financial condition.
Our financial condition and operating results are affected by the performance of our investment portfolio.
−Removed: Our excess cash is invested by an external investment management service provider, under the direction of our management in accordance with our corporate cash management and investment policy.
−Removed: The policy defines constraints and guidelines that restrict the asset classes that we may invest in by type, duration, quality and value.
−Removed: Our investments are subject to market-wide risks, and fluctuations, as well as to risks inherent in particular securities.
−Removed: The failure of any of the investment risk strategies that we employ could have a material adverse effect on our business, operating results and financial condition.
−Removed: The value of our investments is exposed to capital markets risks, and our results of operations, liquidity, financial condition or cash flows could be adversely affected by realized losses, impairments and changes in unrealized positions as a result of:
+Added: The value of our investments is exposed to capital markets risks, and our operating results, liquidity, financial condition or cash flows could be adversely affected by realized losses, impairments and changes in unrealized positions as a result of:
significant market volatility, changes in interest rates, changes in credit spreads and defaults, a lack of pricing transparency, a reduction in market liquidity, declines in equity prices, changes in national, state/provincial or local laws and the strengthening or weakening of foreign currencies against the U.S.
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The issuance of shares of common stock underlying our convertible preferred stock would dilute the ownership and relative voting power of holders of our common stock and may adversely affect the market price of our common stock.
−Removed: The Series A Preferred Stock is convertible at the option of the holders at any time into shares of common stock based on the then applicable conversion rate as determined in the certificate of designations for the Series A Preferred Stock, which conversion would dilute the ownership interest of existing holders of our common stock.
−Removed: In addition, because holders of our Series A Preferred Stock are entitled to vote, on an as-converted basis (subject to certain voting limitations and conversion calculations set forth in the certificate of designations for the Series A Preferred Stock), together with holders of our common stock on all matters submitted to a vote of the holders of our common stock, the issuance of the Series A Preferred Stock effectively reduces the relative voting power of the holders of our common stock.
+Added: The Series A Preferred Stock is convertible at the option of the holders at any time into shares of common stock based on the then-applicable conversion rate as determined in the certificate of designations for the Series A Preferred Stock.
+Added: Such conversion would dilute the ownership interest of existing holders of our common stock.
+Added: In addition, because holders of our Series A Preferred Stock are entitled to vote, on an as-converted basis (subject to certain voting limitations and conversion calculations set forth in the certificate of designations for the Series A Preferred Stock), together with holders of our common stock on all matters submitted to a vote of the holders of our
+Added: common stock, the issuance of the Series A Preferred Stock effectively reduces the relative voting power of the holders of our common stock.
Any sales in the public market of the common stock issuable upon conversion of the Series A Preferred Stock could adversely affect prevailing market prices of our common stock.
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Investment Agreement, holders of our Series A Preferred Stock have customary resale registration rights for common stock issued upon conversion of the Series A Preferred Stock upon closing.
−Removed: Any resale of our common stock would increase the number of shares of our common stock available for public trading, and resales of a substantial
−Removed: number of shares of our common stock in the public market, or the perception that such sales might occur, could have a material adverse effect on the price of our common stock.
−Removed: Our convertible preferred stock investor has rights, preferences and privileges that are not held by, and are preferential to, the rights of our common stockholders, which could adversely affect our liquidity and financial condition, result in the interests of our convertible preferred stock investor differing from those of our common stockholders and make an acquisition of us more difficult.
+Added: Any resale of our common stock would increase the number of shares of our common stock available for public trading.
+Added: Resales of a substantial number of shares of our common stock in the public market, or the perception that such sales might occur, could have a material adverse effect on the price of our common stock.
+Added: Our convertible preferred stock investor has rights, preferences and privileges that are not held by, and are preferential to, the rights of our common stockholders and may exercise influence over us.
+Added: This could adversely affect our liquidity and financial condition, result in the interests of our convertible preferred stock investor differing from those of our common stockholders and make an acquisition of us more difficult.
H.I.G., the initial purchaser and the current holder of our Series A Preferred Stock, has (i) a liquidation preference, (ii) rights to dividends, which are senior to all of our other equity securities, (iii) redemption rights beginning on April 30, 2027, (iv) the right to require us to repurchase any or all of their Series A Preferred Stock in connection with certain change of control events and (v) conversion price adjustments in connection with certain corporate transactions, each subject to the terms, conditions and exceptions contained in the certificate of designations for the Series A Preferred Stock.
These dividend and share repurchase and redemption obligations could impact our liquidity and reduce the amount of cash flows available for working capital, capital expenditures, growth opportunities, acquisitions, and other general corporate purposes.
−Removed: The terms of the H.I.G.
−Removed: Investment Agreement could also limit our ability to obtain additional financing or increase our borrowing costs, which could have an adverse effect on our financial condition.
−Removed: As of the date of this report, pursuant to the terms of the H.I.G.
−Removed: Investment Agreement, we must obtain the consent of H.I.G.
−Removed: in order to incur any indebtedness, which could limit our ability to obtain additional financing.
−Removed: The preferential rights could also result in divergent interests between H.I.G.
−Removed: and holders of our common stock.
−Removed: Furthermore, a sale of our company, as a change of control event, may require us to repurchase Series A Preferred Stock, which could have the effect of making an acquisition of our company more expensive and potentially deterring proposed transactions that may otherwise be beneficial to our stockholders.
−Removed: Our convertible preferred stock investor may exercise influence over us, including through its ability to designate up to two directors on our Board of Directors.
Investment Agreement entitles H.I.G.
5 unchanged sentences
Tolson was appointed to our Board of Directors as a Class I director on August 30, 2021, and as of the date of this report serves as a member of the compensation committee, nominating and corporate governance committee and government and regulatory affairs committee of the Board of Directors.
−Removed: In addition, as discussed elsewhere in this Risk Factors section, failure to maintain the Minimum Asset Coverage Ratio or the Minimum Liquidity Amount as of the date or the time period required by the H.I.G.
+Added: In addition, failure to maintain the Minimum Asset Coverage Ratio or the Minimum Liquidity Amount as of the date or the time period required by the H.I.G.
Investment Agreement, for as long as H.I.G.
3 unchanged sentences
If the additional rights are used by H.I.G., it could be distracting to our management and disruptive to our operations or hinder our ability to execute our operational and strategic plans.
+Added: The terms of the H.I.G.
+Added: Investment Agreement could also limit our ability to obtain additional financing or increase our borrowing costs, which could have an adverse effect on our financial condition.
+Added: As of the date of this report, pursuant to the terms of the H.I.G.
+Added: Investment Agreement, we must obtain the consent of H.I.G.
+Added: in order to incur any indebtedness, which could limit our ability to obtain additional financing.
+Added: The preferential rights could also result in divergent interests between H.I.G.
+Added: and holders of our common stock.
+Added: Furthermore, a sale of our company, as a change of control event, may require us to repurchase Series A Preferred Stock, which could have the effect of making an acquisition of our company more expensive and potentially deterring proposed transactions that may otherwise be beneficial to our stockholders.
Anti-takeover provisions contained in our certificate of incorporation and bylaws, as well as provisions of Delaware law, could impair a takeover attempt.
11 unchanged sentences
Any provision of our certificate of incorporation, bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock and could also affect the price that some investors are willing to pay for our common stock.
−Removed: Our bylaws designate a state or federal court located within the State of Delaware as the exclusive forum for substantially all disputes between us and our stockholders and also provide that the federal district courts will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, each of which could limit our stockholders’ ability to choose the judicial forum for disputes with us or our directors, officers, stockholders or employees.
+Added: Our bylaws designate a state or federal court located within the State of Delaware as the exclusive forum for substantially all disputes between us and our stockholders and also provide that the federal district courts will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.
+Added: These provisions could limit our stockholders’ ability to choose the judicial forum for disputes with us or our directors, officers, stockholders or employees.
Our bylaws provide that, unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum for (1) any derivative action or proceeding brought on our behalf, (2) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, stockholders, officers or other employees to us or our stockholders, (3) any action arising pursuant to any provision of the Delaware General Corporation Law, our certificate of incorporation or our bylaws or (4) any other action asserting a claim that is governed by the internal affairs doctrine shall be the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, another State court in Delaware or the federal district court for the District of Delaware), except for any claim as to which such court determines that there is an indispensable party not subject to the jurisdiction of such court (and the indispensable party does not consent to the personal jurisdiction of such court within ten days following such determination), which is vested in the exclusive jurisdiction of a court or forum other than such court or for which such court does not have subject matter jurisdiction.
2 unchanged sentences
Accordingly, both state and federal courts have jurisdiction to hear such claims.
−Removed: To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our bylaws also provide that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States will be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act and against any person in connection with an offering of our securities.
+Added: To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our bylaws also provide that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States will be the sole and exclusive forum for resolving
+Added: any complaint asserting a cause of action arising under the Securities Act and against any person in connection with an offering of our securities.
Any person or entity purchasing or otherwise acquiring or holding or owning (or continuing to hold or own) any interest in any of our securities shall be deemed to have notice of and consented to the foregoing bylaw provisions.
3 unchanged sentences
If a court were to find either exclusive forum provision contained in our bylaws to be inapplicable or unenforceable in an action, we may incur significant additional costs associated with resolving such action in other jurisdictions, all of which could harm our business, operating results and financial condition.
−Removed: General Risk Factors
−Removed: We are subject to risks associated with public health crises, pandemics, natural disasters, changing climate conditions and other extreme events, including legal, regulatory and social responses thereto, which have had, and could have, an adverse effect on our business, operating results and financial condition.
−Removed: Large-scale medical emergencies, pandemics (such as COVID-19) and other extreme events could result in public health crises or otherwise have a material adverse effect on our business, operating results and, financial condition.
−Removed: For example, we had to adjust our operations in response to the COVID-19 pandemic and resulting disruptions in public and private infrastructure.
−Removed: Global climate change has added, and will continue to add, to the unpredictability, frequency and severity of natural disasters, including but not limited to hurricanes, tornadoes, freezes, droughts, other storms and fires in certain parts of the world.
−Removed: In response, a number of legal and regulatory measures and social initiatives have been introduced in an effort to reduce greenhouse gas and other carbon emissions that are chief contributors to global climate change.
−Removed: We cannot predict the impact that changing climate conditions will have on our business;
−Removed: however, we recognize that there are inherent climate-related risks wherever business is conducted.
−Removed: Climate-related events, including extreme weather events could impact our critical infrastructure, technological assets, business continuity and reputation.
−Removed: The increasing frequency of extreme weather events also has the potential to disrupt the business of our third-party vendors, partners and our customers.
−Removed: The legal, regulatory and social responses to climate change could also adversely affect our results of business, operating results and financial condition.
−Removed: We face risks related to heightened inflation, recession, financial and credit market disruptions and other economic conditions.
−Removed: Customer and consumer demand for health insurance plans may be impacted by weak economic conditions, recession, market volatility or other negative economic factors in the United States or other nations.
−Removed: For example, in 2022, the United States experienced significantly heightened inflationary pressures which continued into 2023.
−Removed: Some of our members may delay signing up for an insurance plan or opt into a plan with lower insurance premiums as a result of such negative economic factors, and we may also experience potential delays in customer premium payments or an increase in plan termination rates, any of which could harm our business.
−Removed: In addition, limited liquidity, defaults, non-performance or other adverse developments affecting financial institutions, or perceptions regarding these or similar risks, have in the past and may in the future lead to market-wide liquidity problems, and such adverse developments may impact parties with which we do business and their liquidity.
+Added: Macroeconomic and Industry Risks
+Added: Our business, operating results and financial condition can be impacted by political events, political instability, trade and other international disputes, geopolitical tensions or natural disasters.
+Added: Political events, political instability, trade and other international disputes, geopolitical tensions, conflict, natural disasters, public health issues and other extreme events can have a material adverse effect on the Company and its customers, consumers and other channel partners.
+Added: For example, the United States has recently enacted and proposed to enact significant new tariffs.
+Added: Additionally, President Trump has directed various federal agencies to further evaluate key aspects of U.S.
+Added: trade policy and there has been ongoing discussion and commentary regarding potential significant changes to U.S.
+Added: trade policies, treaties and tariffs.
+Added: While certain of these tariffs have been delayed or rescinded, there continues to exist significant uncertainty about the future relationship between the U.S.
+Added: and other countries with respect to such trade policies, treaties and tariffs.
+Added: These developments, or the perception that any of them could occur, could result in the worsening of current global economic conditions and the stability of global financial markets, and may significantly escalate trade tensions and reduce global trade and, in particular, trade between the impacted nations and the U.S.
+Added: As discussed elsewhere in this Risk Factors section, our subsidiary in China provides supports for certain aspects of our operations and face risk related to trade and other international disputes and geopolitical tensions.
+Added: Any new or changes in restrictions can be announced with little or no advance notice, which can create uncertainty.
+Added: Any of these factors could depress economic activity, restrict our access to our operations in China, and have a material adverse effect on our business, operating results and financial condition.
+Added: Adverse economic conditions including slow growth, recession, high unemployment, inflation, financial and credit market disruptions, could materially adversely affect our business, operating results and financial condition.
+Added: Customer and consumer demand for our health insurance plan offerings may be impacted by adverse macroeconomic conditions, including slow growth or recession, high unemployment, inflation, market volatility or other negative economic factors.
+Added: Weak economic condition can adversely impact consumer confidence and spending and materially adversely affect demand for our products and services.
+Added: In addition, consumer confidence and spending can be materially adversely affected in response to changes in fiscal and monetary policy, financial market volatility, declines in income or asset values, and other economic factors.
+Added: In addition, limited liquidity, defaults, non-performance or other adverse developments affecting financial institutions, or perceptions regarding these or similar risks, have in the past and may in the future lead to market-wide liquidity problems.
+Added: Such adverse developments may impact parties with which we do business and their liquidity.
These macroeconomic factors could materially and adversely affect our business, operating results and financial condition.
−Removed: For example, the closures of Silicon Valley Bank (“SVB”), Signature Bank and First Republic Bank in the first half of 2023 resulted in broader financial institution liquidity risk and concerns.
−Removed: Although we were able to access all of the
−Removed: funds we had on deposit with SVB, the failure of any bank in which we deposit our funds could reduce the amount of cash we have available for our operations or delay our ability to access such funds.
−Removed: We continue to assess our banking relationships as we believe necessary or appropriate;
−Removed: however, disruptions in financial institutions, credit markets and/or the broader financial services industry may lead to market-wide liquidity shortages, may limit our access to preferred sources of liquidity when needed or on terms we find acceptable, and our borrowing costs could increase.
+Added: Any disruptions in financial institutions, credit markets and/or the broader financial services industry may lead to market-wide liquidity shortages, may limit our access to preferred sources of liquidity when needed or on terms we find acceptable, and our borrowing costs could increase.
An economic or credit crisis could occur and impair credit availability and our ability to raise capital when needed.
+Added: Large-scale health issues, including pandemics (such as COVID-19), have also had and could in the future have a material adverse effect on our business, operating results and financial condition.
+Added: For example, we had to adjust our operations in response to the COVID-19 pandemic and resulting disruptions in public and private infrastructure.
+Added: Changing our business practices in accordance with new or changed restrictions and challenges could be expensive, time-consuming and disruptive to the Company’s operations, and the Company may not be able to effectively mitigate all adverse impacts from such events.
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.