GoodRx Holdings, Inc. 10-K

Item 9A. Controls and Procedures. Limitations on effectiveness of controls and procedures In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs. Evaluation of disclosure controls and procedures Our management, with the participation of our co-principal executive officers and principal financial officer, evaluated, as of the end of the period covered by this Annual Report on Form 10-K, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, and as a result of the material weaknesses described below, our co-principal executive officers and principal financial officer concluded that, as of December 31, 2020, our disclosure controls and procedures were not effective at the reasonable assurance level. Material Weaknesses A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual and interim financial statements will not be detected or prevented on a timely basis. 98 In connection with the preparation of our financial statements for 2019, we identified certain control deficiencies in the design and operation of our internal control over financial reporting that constituted material weaknesses. The material weaknesses are: • We did not design or maintain an effective control environment commensurate with our financial reporting requirements. We lacked a sufficient number of professionals with an appropriate level of accounting knowledge, training and experience to appropriately analyze, record and disclose accounting matters timely and accurately. Additionally, the limited personnel resulted in an inability to consistently establish appropriate authorities and responsibilities in pursuit of our financial reporting objectives, as demonstrated by, amongst other things, insufficient segregation of duties in our finance and accounting functions. • We did not effectively design and maintain controls in response to the risks of material misstatement. Specifically, changes to existing controls or the implementation of new controls have not been sufficient to respond to changes to the risks of material misstatement to financial reporting, due in part to acquisitions and other changes to our business. These material weaknesses contributed to the following additional material weaknesses: • We did not design and maintain formal accounting policies, processes and controls to analyze, account for and disclose complex transactions. • We did not design and maintain formal accounting policies, procedures and controls to achieve complete, accurate and timely financial accounting, reporting and disclosures, including controls over the preparation and review of business performance reviews, account reconciliations and journal entries. Additionally, we did not design and maintain controls over the classification and presentation of accounts and disclosures in the financial statements. • We did not design and maintain effective controls over certain information technology (“IT”) general controls for information systems that are relevant to the preparation of our financial statements. Specifically, we did not design and maintain: (i) program change management controls to ensure that IT program and data changes affecting financial IT applications and underlying accounting records are identified, tested, authorized, and implemented appropriately; (ii) user access controls to ensure appropriate segregation of duties and that adequately restrict user and privileged access to certain financial applications, programs and data to appropriate company personnel; (iii) computer operations controls to ensure that critical batch jobs are monitored and data backups are authorized and monitored, and (iv) testing and approval controls for program development to ensure that new software development is aligned with business and IT requirements. These material weaknesses resulted in adjustments identified by our independent registered public accounting firm and recorded by us primarily related to goodwill, capitalized software, leases, debt extinguishment, revenue recognition and sales allowances. These material weaknesses could result in a misstatement of our accounts or disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected. Remediation Measures We are in the early stages of compiling the system and processing documentation necessary to perform the evaluation needed to comply with Section 404(a) of Sarbanes-Oxley Act and we are taking steps to remediate the material weaknesses. Management, with the participation of the audit committee and the board of directors, is engaged in remedial activities to address the material weaknesses described above. Those remediation measures are ongoing and include the following: • We have prepared a remediation plan for each of the material weaknesses and begun training process owners, developing new controls, enhancing existing controls, evaluating process adoption and monitoring results. 99 • We have engaged third party professionals to advise m anagement in connection with the remediation of each of the material weaknesses. • We have recently hired, and plan to continue to hire in 2021, additional accounting, human resources, payroll and IT personnel to bolster our technical reporting, transactional accounting and IT capabilities. We are implementing controls to formalize roles and review responsibilities to align with our team’s skills and experience and implement formal controls over segregation of duties. • We are implementing procedures to identify and evaluate changes in our business and the impact on our controls. • We are formally assessing complex accounting transactions and other technical accounting and financial reporting matters including controls over the preparation and review of accounting memoranda addressing these matters. During the third and fourth quarters of 2020, we implemented controls to identify complex accounting transactions and to require that the accounting implications of such transactions are formally assessed, documented and reviewed by a relevant senior member of our accounting team. In addition, we have engaged third party subject matter experts to advise us with respect to certain complex non-routine transactions in addition to management’s review of such transactions, where appropriate. • In the first quarter of 2020, we implemented a new enterprise resource planning (“ERP”) system. We are in the process of designing and implementing controls over this ERP system to, among other things, automate certain controls, enforce segregation of duties and facilitate the review of journal entries. • We are implementing formal processes, policies, and procedures supporting our financial close process, including creating standard balance sheet reconciliation templates, establishing and reviewing thresholds for business performance reviews, and formalizing procedures over the review of financial statements. In the fourth quarter of 2020, we began to implement an external financial reporting review function within our existing finance team to support our regulatory external financial reporting objectives. • We are enhancing IT governance processes, including automating components of our change management and logical access processes, enhancing role-based access and logging capabilities, implementing automated controls , enhancing testing and approval controls for program development, and implementing more robust IT policies and procedures over change management and computer operations. We believe we are making progress toward achieving the effectiveness of our internal control over financial reporting and disclosure controls and procedures. The actions that we are taking are subject to ongoing senior management review, as well as Audit Committee oversight. We will not be able to conclude whether the steps we are taking will fully remediate these material weaknesses in our internal control over financial reporting until we have completed our remediation efforts and subsequent evaluation of their effectiveness. We may also conclude that additional measures may be required to remediate the material weaknesses in our internal control over financial reporting, which may necessitate additional implementation and evaluation time. We will continue to assess the effectiveness of our internal control over financial reporting and take steps to remediate the known material weaknesses expeditiously. 100 Management’s annual report on internal control over financial reporting This Annual Report on Form 10-K does not include a report of management’s assessment regarding our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) or an attestation report of our independent registered accounting firm due to a transition period established by rules of the SEC for newly public companies. Additionally, our independent registered accounting firm will not be required to opine on the effectiveness of our internal control over financial reporting pursuant to Section 404 until we are no longer an “emerging growth company” as defined in the JOBS Act. Changes in internal control over financial reporting We are taking actions to remediate the material weaknesses relating to our internal control over financial reporting. Other than the changes to our internal control over financial reporting described in “Remediation Measures” above, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information. None. 101 PART III Item 10. Directors, Executive Officers and Corporate Governance. Information about our Directors The following table presents information concerning our board of directors. Name Age Position In Current Position Since Trevor Bezdek 43 Director & Co-Chief Executive Officer September 2011 Douglas Hirsch 50 Director & Co-Chief Executive Officer September 2011 Christopher Adams 41 Director October 2015 Julie Bradley 52 Director August 2020 Dipanjan Deb 51 Director October 2015 Adam Karol 45 Director October 2018 Jacqueline Kosecoff 71 Director May 2016 Stephen LeSieur 47 Director October 2015 Gregory Mondre 46 Director October 2018 Agnes Rey-Giraud 56 Director June 2016 The following are brief biographies describing the backgrounds of our directors. Trevor Bezdek Mr. Bezdek is one of our co-founders and has served as our Co-Chief Executive Officer since January 2015 and as a member of our board of directors since our founding in September 2011. Mr. Bezdek also serves as President and Chief Executive Officer of two of our wholly-owned subsidiaries. Previously, Mr. Bezdek served as Managing Partner at Tryarc, LLC, an information technology consulting firm from 2001 to 2007, and co-founded Bioware, a community for biologists and scientists. Mr. Bezdek holds a B.S. in Biological Sciences from Stanford University. We believe Mr. Bezdek is qualified to serve as a member of our board of directors because of his extensive experience in the healthcare, prescription medication and technology industries, in addition to the continuity he brings as one of our co-founders and Co-Chief Executive Officers. Douglas Hirsch Mr. Hirsch is one of our co-founders and has served as a Chief Executive Officer and as a member of our board of directors since our founding in September 2011. From January 2015, Mr. Hirsch served as our Co-Chief Executive Officer. Prior to our founding, Mr. Hirsch served as Chief Executive Officer at DailyStrength, Inc., a healthcare-focused social network centered on support groups, from March 2005 to November 2008, and previously held senior roles at Facebook, Inc., and Yahoo! Inc. Mr. Hirsch holds a B.A. in Political Science from Tufts University. We believe Mr. Hirsch is qualified to serve on our board of directors because of the historical knowledge, operational expertise, leadership, and continuity that he brings to our board of directors as our co-founder and Co-Chief Executive Officer. Christopher Adams Mr. Adams has served as a member of our board of directors since October 2015. Mr. Adams is a Partner at Francisco Partners Management, L.P. (“Francisco Partners”) a private equity firm, where he has served since August 2008. Prior to this, Mr. Adams was an associate at American Securities Capital Partners, a private equity firm, and a management consultant at Bain & Company. Mr. Adams also serves on the board of directors of several private companies. Mr. Adams holds a B.S. in Computer Engineering from the Georgia Institute of Technology and an M.B.A. from the Stanford Graduate School of Business. We believe that Mr. Adams is qualified to serve as a member of our board of directors because of his extensive experience in analyzing, investing in, and serving on the board of directors of several healthcare and technology companies from working in the private equity industry. 102 Julie Bradley Ms. Bradley has served as a member of our board of directors since August 2020. Ms. Bradley previously served as the Chief Financial Officer of Tripadvisor, Inc., a public company that operates an online travel planning website and mobile app, from October 2011 to November 2015. Currently, Ms. Bradley serves on the board of directors of Wayfair Inc., since September 2012, where she is the member of the Audit Committee and Nominating and Governance Committee, and Blue Apron Holdings, Inc., since September 2015, where she serves on the Audit Committee and Compensation Committee. Ms. Bradley previously served on the board of directors of Constant Contact, Inc. from June 2015 to February 2016, where she served on the Audit Committee, Compensation Committee and Merger and Acquisition Committee. Ms. Bradley additionally serves on the board of directors for a private company. Ms. Bradley received a B.A. in Economics from Wheaton College. We believe Ms. Bradley is qualified to serve on our board of directors due to her financial expertise and experience serving on the board of directors of numerous technology-based companies. Dipanjan Deb Mr. Deb has served as a member of our board of directors since October 2015. Mr. Deb is a founder of Francisco Partners and has served as the Managing Partner/Chief Executive Officer of Francisco Partners since September 2005. Mr. Deb has also served as a Partner of Francisco Partners since its founding in August 1999. Prior to founding Francisco Partners, Mr. Deb was a principal at TPG Capital, a private equity firm, a Director of Semiconductor Banking at Robertson, Stephens & Company and a management consultant at McKinsey & Company. Mr. Deb has served on the board of directors of numerous public companies including most recently Ichor Systems, Inc. from February 2012 to May 2018, and currently serves on the board of directors of several private companies. Mr. Deb holds a B.S. in Electrical Engineering and Computer Science from the University of California, Berkeley and an M.B.A. from the Stanford Graduate School of Business. We believe that Mr. Deb is qualified to serve as a member of our board of directors because of his experience in the private equity and venture capital industries analyzing, investing in and serving on the boards of directors of manufacturing and technology companies. Adam Karol Mr. Karol has served as a member of our board of directors since October 2018. Mr. Karol is a Managing Director at Silver Lake. He joined Silver Lake in 2009 as a Principal and then served as a Director from 2013 to December 2018. Prior to Silver Lake, Mr. Karol worked at Silver Point Capital, L.P., an asset management firm, and at Perry Capital, a multi-strategy investment firm. Mr. Karol serves on the board of directors for A Place for Mom, Inc. Mr. Karol holds a B.S. in Finance and Management Information Systems from Boston College and an M.B.A. from The Wharton School of the University of Pennsylvania. We believe Mr. Karol is qualified to serve on our board of directors because he has significant experience in private equity investing and expertise in technology investing. Jacqueline Kosecoff Dr. Kosecoff has served as a member of our board of directors since May 2016. Dr. Kosecoff is a Managing Partner at Moriah Partners, LLC, where she has served since 2012. Dr. Kosecoff has also served as a Senior Advisor at Warburg Pincus since March 2012. Dr. Kosecoff has had an extensive career in healthcare including serving as Executive Vice President of PacifiCare where she had responsibility for its PBM, Medicare Part D Drug Program, and Behavioral Health, Dental and Vision companies. At UnitedHealth Group, Dr. Kosecoff was CEO of OptumRx, with responsibility for UnitedHealth’s PBM, Specialty Pharmacy and Consumer Health Products. Currently, Dr. Kosecoff serves on the board of directors of Houlihan Lokey, where she also serves on Houlihan Lokey’s Audit Committee and Nominating and Governance Committee, Sealed Air Corporation where she chairs the Compensation Committee and also serves on the Nominating and Governance Committee, STERIS Corporation, where she chairs the Organization and Compensation Committee and also serves on the Nominating and Governance Committee, TriNet, and several private companies. Dr. Kosecoff holds a B.A. in Mathematics from the University of California, Los Angeles, an M.S. in Applied Mathematics from Brown University and a Ph.D. with a concentration in Research Methods from the University of California, Los Angeles, School of Education. We believe Dr. Kosecoff is qualified to serve on our board of directors because of her extensive experience serving on the board of directors of several public and private companies and her experience and knowledge in the healthcare sector, including healthcare services and technology. 103 Stephen LeSieur Mr. LeSieur has served as a member of our board of directors since October 2015. Mr. LeSieur is a Managing Director at Spectrum Equity, a growth stage private equity firm, where he has served since 2005 and co-leads the firm’s healthcare technology investing efforts. Prior to Spectrum, Mr. LeSieur was an associate at Trident Capital. Mr. LeSieur serves and has served on the board of directors of several private healthcare and software companies. Mr. LeSieur holds a B.A. in Economics from Princeton University and an M.B.A. from the Tuck School of Business at Dartmouth College. We believe Mr. LeSieur is qualified to serve on our board of directors because of his extensive experience in private equity investing and serving on the boards of directors of numerous healthcare and technology-based companies. Gregory Mondre Mr. Mondre has served as a member of our board of directors since October 2018. Mr. Mondre is Co-Chief Executive Officer at Silver Lake. He joined Silver Lake in 1999 and most recently served as a Managing Partner and Managing Director of the firm from January 2013 to December 2019. Mr. Mondre currently serves on the board of directors of Expedia Group, Inc., a position he has held since May 2020, and Motorola Solutions, a position he has held since August 2015 and where he also serves on the Audit and Governance and Nominating Committees. He previously served as a director of GoDaddy Inc. from May 2014 to February 2020, and of Sabre Corporation from March 2007 to December 2018. Mr. Mondre holds a B.S. degree in Economics from The Wharton School of the University of Pennsylvania. We believe Mr. Mondre is qualified to serve on our board of directors because of his significant experience in private equity investing and expertise in technology and technology-enabled industries. Agnes Rey-Giraud Ms. Rey-Giraud has served as a member of our board of directors since June 2016. Ms. Rey-Giraud is the Founder, Chairman and Chief Executive Officer of Acera Surgical Inc., a bioscience company, where she has served since its founding in January 2013. Ms. Rey-Giraud previously served as an Executive Vice President and the President of Operations at Express Scripts, a pharmacy benefit management organization, from May 1999 to May 2011. Ms. Rey-Giraud also serves on the board of directors for several private companies. Ms. Rey-Giraud holds a B.S. and M.S. in Mechanical Engineering from Ecole Nationale d’Ingenieurs de Saint Etienne (ENISE), France, a MMa in Operations Management from Ecole de Management de Lyon (EM Lyon), France and an M.B.A. from the University of Chicago. We believe Ms. Rey-Giraud is qualified to serve on our board of directors because of her experience and expertise in the PBM industry as an executive of a large publicly traded company and her experience serving on the board of directors of several companies. Information about our Executive Officers Name Age Position In Current Position Since Trevor Bezdek 43 Director & Co-Chief Executive Officer January 2015 Douglas Hirsch 50 Director & Co-Chief Executive Officer January 2015 Karsten Voermann 51 Chief Financial Officer March 2020 Andrew Slutsky 35 President, Consumer October 2019 Babak Azad 47 Chief Marketing Officer & SVP, Marketing & Communications October 2019 Bansi Nagji 56 President, Healthcare June 2020 The following are brief biographies describing the backgrounds of our executive officers. The biography for each of Mr. Bezdek and Mr. Hirsch appears above in the section titled “Information about our Directors”. 104 Karsten Voermann Mr. Voermann has served as our Chief Financial Officer since March 2020. From May 2018 to February 2020, Mr. Voermann served as Chief Financial Officer of Mercer Advisors, an investment advisory services firm, and from July 2015 to May 2018, Mr. Voermann served as Chief Financial Officer of Ibotta, an app-based provider of consumer discounts on consumer packaged goods and other items, and has over 20 years of financial experience with public and private companies. Mr. Voermann holds an H.B.A. in Business from the University of Western Ontario and an M.B.A. from Harvard Business School. Andrew Slutsky Mr. Slutsky has served as our President, Consumer since October 2019 and has been at the Company since February 2012 and was our third employee. From 2011 to 2012, Mr. Slutsky served as a Senior Marketing Manager at RentTheRunway, an internet clothing company, and from 2008 to 2011, Mr. Slutsky served as a Director of Loeb Enterprises, a venture capital company, where he launched digital marketing for Loeb Enterprises’ early pharmacy discount program. Mr. Slutsky holds a B.A. in Political Science from Amherst College. Babak Azad Mr. Azad has served as our Chief Marketing Officer and SVP, Marketing & Communications since October 2019. Mr. Azad is the Founder of Round 2 Ventures, LLC, a marketing consulting business, focused on marketing activities of various clients, including GoodRx from June 2017 to October 2019. Mr. Azad served as a Senior Vice President of Media and Customer Acquisition for Beachbody, LLC, a developer of health and fitness related products, from February 2007 to April 2015. Mr. Azad holds a B.S. in Mathematics from MIT and an M.B.A. from the Stanford Graduate School of Business. Bansi Nagji Mr. Nagji has served as our President, Healthcare since June 2020. Previously, Mr. Nagji served for more than 5 years as the Executive Vice President and Chief Strategy and Business Development Officer at McKesson Corporation, a global leader in healthcare supply chain management solutions and retail pharmacy. Prior to McKesson Corporation, Mr. Nagji served from January 2013 to February 2015 as a Principal of Deloitte Consulting, LLP, a consulting firm, and as the Global Leader of Monitor Deloitte. Mr. Nagji previously worked for almost 20 years at Monitor Group, a global strategy consulting firm, and served as a senior partner and President of the firm when it merged with Deloitte. Currently, Mr. Nagji serves on the board of directors of Change Healthcare, Inc., where he also sits on the Compensation Committee and Nominating and Corporate Governance Committee. He has previously served as a director of several private companies, including Deloitte LLP from 2013 to 2015. Mr. Nagji received B.A. and M.A. degrees from Cambridge University and an M.B.A. with Distinction from INSEAD. Family Relationships There are no family relationships among any of our executive officers or directors. Code of Business Conduct and Ethics The board of directors has adopted a written code of business conduct (the “Code of Business Conduct and Ethics”) that applies to all of our directors, officers and employees, including our principal executive officers and our principal financial and accounting officer. A copy of the code is available on our website at www.goodrx.com in the “Governance” section of the “Investors” page. In addition, we intend to post on our website all disclosures that are required by law concerning any amendments to, or waivers from, any provision of our Code of Business Conduct and Ethics. 105 Governance Documents We believe that good corporate governance is important to ensure that GoodRx is managed for the long-term benefit of our stockholders. Our Nominating and Governance Committee will periodically review and reassess our Governance Guidelines, other governance documents and overall governance structure. Complete copies of our current committee charters, our Corporate Governance Guidelines and our Code of Business Conduct and Ethics are available on our website under the “Governance” section at https://investors.goodrx.com/, or by writing to our secretary at our offices at 2701 Olympic Boulevard, Santa Monica, California 90404. Delinquent Section 16(a) Reports Section 16(a) of the Exchange Act requires our executive officers and directors, our principal accounting officer and persons who beneficially own more than 10% of our common stock to file with the SEC reports of their ownership and changes in their ownership of our common stock. To our knowledge, based solely on review of the copies of such reports and amendments to such reports with respect to the year ended December 31, 2020 filed with the SEC and on written representations by our directors and executive officers, all required Section 16 reports under the Exchange Act for our directors, executive officers, principal accounting officer and beneficial owners of greater than 10% of our common stock were filed on a timely basis during the year ended December 31, 2020 other than one Form 4 reporting three late transactions for Trevor Bezdek, one Form 4 reporting three late transactions for Douglas Hirsch, one Form 4 reporting two late transactions for Bansi Nagji, one Form 4 reporting two late transactions for Andrew Slutsky and one Form 4 reporting one late transaction for Silver Lake Group, LLC. Board Composition The current authorized number of directors is ten. Our amended and restated certificate of incorporation provides that the authorized number of directors may be changed only by resolution of our board of directors or as provided in the stockholders agreement. Our board of directors is divided into three classes of directors, with staggered terms of three years each and holding office until his or her successor is duly elected and qualified, or until his or her earlier death, resignation or removal. The term of one class expires at each annual meeting of the stockholders; thus, directors typically stand for election after three years, unless they are filling an unexpired term. Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. Board Committees Our board of directors has an audit committee, a compensation committee, nominating and corporate governance committee and a compliance committee. From time to time, special committees may be established under the direction of our board of directors when necessary to address specific issues. The charters of all four committees are available on our website under the “Governance” section at https://investors.goodrx.com/. Audit Committee and Audit Committee Financial Expert We have a separately-designated standing audit committee (“Audit Committee”) that consists of Julie Bradley, Adam Karol and Agnes Rey-Giraud. Ms. Bradley serves as the Chair of the Audit Committee. We currently rely on the phase-in rules of Rule 10A-3 under the Exchange Act and the Nasdaq Stock Market with respect to the requirement that the Audit Committee be composed entirely of members of our board of directors who satisfy the standards of independence established for independent directors under the Nasdaq Stock Market rules and the additional independence standards applicable to audit committee members established pursuant to Rule 10A-3 under the Exchange Act, as determined by our board of directors. Our board of directors has determined that each of Julie Bradley and Agnes Rey-Giraud are independent directors under the Nasdaq Stock Market rules and the additional independence standards applicable to audit committee members established pursuant to Rule 10A-3 under the Exchange Act. Our board of directors has also determined that each of Julie Bradley, Adam Karol and Agnes Rey-Giraud meets the “financial literacy” requirement for audit committee members under the Nasdaq Stock Market rules and Julie Bradley is an “audit committee financial expert” within the meaning of the SEC rules. No Audit Committee member currently serves on the audit committees of more than three public companies. 106 Our Audit Committee oversees our corporate accounting and financial reporting process and assists our board of directors in monitoring our financial systems. The primary responsibilities and functions of our Audit Committee are, among other things: • appointing, compensating, retaining, evaluating, terminating and overseeing our independent registered public accounting firm; • discussing with our independent registered public accounting firm their independence; • reviewing with our independent registered public accounting firm the scope and results of their audit; • approving all audit and permissible non-audit services to be performed by our independent registered public accounting firm; • overseeing the financial reporting process and discussing with management and our independent registered public accounting firm the interim and annual financial statements that we file with the SEC; • reviewing our policies on risk assessment and risk management; • reviewing related person transactions; • overseeing our financial and accounting controls and compliance with legal and regulatory requirements; and • establishing procedures for the confidential anonymous submission of concerns regarding questionable accounting, internal controls or auditing matters. Compensation Committee We have a separately-designated standing compensation committee (“Compensation Committee”) that consists of Dipanjan Deb, Jacqueline Kosecoff and Gregory Mondre . Mr. Mondre serves as the Chair of the Compensation Committee. The composition of our Compensation Committee meets the requirements for independence under the Nasdaq Stock Market rules and SEC rules and regulations. Our board of directors has also determined that Ms. Kosecoff is a non-employee director, as defined in Section 16b-3 of the Exchange Act. Our Compensation Committee oversees our compensation policies, plans and benefits programs. The primary responsibilities and functions of our Compensation Committee are, among other things: • reviewing and making recommendations to the Board regarding the compensation of our Co-Chief Executive Officers and other executive officers; • making recommendations to our board of directors regarding the compensation of our directors; • reviewing and approving or making recommendations to our board of directors regarding our incentive compensation and equity-based plans and arrangements; and • appointing and overseeing any compensation consultants. Nominating and Corporate Governance Committee We have a separately-designated nominating and corporate governance committee (“ Nominating and Corporate Governance Committee ”) that consists of Christopher Adams, Trevor Bezdek and Gregory Mondre. Mr. Adams serves as the chair of the Nominating and Corporate Governance Committee. The composition of our Nominating and Corporate Governance Committee meets the requirements for independence under the Nasdaq Stock Market rules and SEC rules and regulations, including the exemptions available to controlled companies. 107 Our Nominating and Corporate Governance Committee oversees and assists our board of directors in reviewing and recommending nominees for election as directors. The primary responsibilities and functions of our Nominating and Corporate Governance Committee are, among other things: • identifying individuals qualified to become members of our board of directors, consistent with criteria approved by our board of directors; • recommending to our board of directors the nominees for election to our board of directors at annual meetings of our stockholders; • overseeing an evaluation of our board of directors and its committees; and • developing and recommending to our board of directors a set of corporate governance guidelines. Compliance Committee We have a separately-designated compliance committee (“ Compliance Committee ”) that consists of Trevor Bezdek, Adam Karol, Stephen LeSieur and Agnes Rey-Giraud. Ms. Rey-Giraud serves as the chair of the Compliance Committee. Our Compliance Committee oversees and assists our board of directors in reviewing and providing general oversight of our compliance with federal and state laws and regulations relating to healthcare and in monitoring our performance with respect to such legal and regulatory requirements. Our Compliance Committee is responsible for, among other things, reviewing and overseeing our compliance program, ensuring proper communication of significant healthcare regulatory compliance issues to our board of directors and reviewing significant healthcare regulatory compliance risk areas and the steps taken by management to monitor, control and report such compliance risk exposures. Role of the Board in Risk Oversight Our board of directors has an active role, as a whole and also at the committee level, in overseeing the management of our risks. Our board of directors is responsible for general oversight of risks and regular review of information regarding our risks, including credit risks, liquidity risks and operational risks. The Compensation Committee is responsible for overseeing the management of risks relating to our executive compensation plans and arrangements. The Audit Committee is responsible for overseeing the management of financial and cybersecurity risks. The Nominating and Corporate Governance Committee is responsible for overseeing the management of risks associated with the independence of our board of directors and potential conflicts of interest. Although each committee is responsible for evaluating certain risks and overseeing the management of such risks, the entire board of directors is regularly informed through discussions from committee members about such risks. Our board of directors believes its administration of its risk oversight function has not negatively affected our board of directors’ leadership structure. Item 11. Executive Compensation. EXECUTIVE AND DIRECTOR COMPENSATION Executive Compensation This section discusses the material components of the executive compensation program for our executive officers who are named in the “Summary Compensation Table” below. In 2020, our co-chief executive officers and our two other highest-paid executive officers, or our named executive officers, were as follows: • Douglas Hirsch, Co-Chief Executive Officer; • Trevor Bezdek, Co-Chief Executive Officer; 108 • Andrew Slutsky, President, Consumer; and • Bansi Nagji, President, Healthcare. This discussion may contain forward-looking statements that are based on our current plans, considerations, expectations and determinations regarding future compensation programs. Actual compensation programs that we adopt in the future may differ materially from the currently planned programs summarized in this discussion. Summary Compensation Table The following table sets forth information concerning the compensation of our named executive officers: Name and Principal Position Year Salary ($) Bonus ($) (1) Stock Awards ($) (2) Option Awards ($) (2) Non-Equity Incentive Plan Compensation ($) All Other Compensation ($) (3) Total ($) Douglas Hirsch 2020 500,000 785 266,662,480 — 480,000 6,921 267,650,186 Co-Chief Executive Officer 2019 500,000 — — — 608,831 16,400 1,125,231 Trevor Bezdek 2020 500,000 451 266,662,480 — 480,000 9,511 267,652,442 Co-Chief Executive Officer 2019 500,000 — — — 608,831 39,850 1,148,681 Andrew Slutsky 2020 425,000 971 48,389,999 — 115,200 5,345 48,936,515 President, Consumer 2019 324,000 — — — 118,357 8,920 451,277 Bansi Nagji (4) 2020 278,525 952 — 4,808,997 259,200 23,331 5,371,005 President, Healthcare (1) Amounts reflect special bonuses. (2) Amounts reflect the aggregate grant date fair value of restricted stock units and stock options granted in 2020, computed in accordance with the provisions of Accounting Standards Codification (“ASC”) Topic 718, Stock Compensation . These amounts do not reflect the actual economic value that will be realized by the employee upon the vesting, settlement or exercise of the stock option and/or stock award. The assumptions that we used to calculate these amounts are discussed in Note 15 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K. (3) Amounts for 2020 include (i) Company-paid matching contributions to our 401(k) plan ($5,833, $8,708, $4,000 and $5,000 for Messrs. Hirsch, Bezdek, Slutsky and Nagji, respectively), (ii) Company reimbursement of cell phone expenses ($500, $500, $600 and $350 for Messrs. Hirsch, Bezdek, Slutsky and Nagji, respectively), (iii) tax gross-ups related to special bonuses ($588, $303, $745 and $487 for Messrs. Hirsch, Bezdek, Slutsky and Nagji, respectively), and (iv) Company reimbursement of legal fees ($17,494) for Mr. Nagji. (4) Mr. Nagji’s employment with us commenced on June 16, 2020; therefore, certain amounts for Mr. Nagji, such as salary, reflect a partial year of service. Narrative to Summary Compensation Table 2020 Salaries The named executive officers receive a base salary to compensate them for services rendered to our company. The base salary payable to each named executive officer is intended to provide a fixed component of compensation reflecting the executive’s skill set, experience, role and responsibilities. The base salaries for each of Messrs. Hirsch, Bezdek and Nagji for 2020 was $500,000; and our board of directors approved an increase to Mr. Slutsky’s annual base salary from $400,000 to $500,000, effective as of October 1, 2020. Because Mr. Nagji’s employment start date was June 16, 2020, his actual base salary received in 2020 reflected his partial year of service. The Summary Compensation Table above shows the actual base salaries paid to each named executive officer in 2020. 109 2020 Bonuses Each of Messrs. Hirsch, Bezdek, Slutsky, and Nagji was eligible to earn a cash incentive bonus based upon the achievement of pre‑determined revenue goals of the Company and its consolidated subsidiaries for 2020 (each such bonus, a Revenue Bonus). For 2020, the target Revenue Bonus for each of Messrs. Hirsch, Bezdek, and Nagji was 100% of his base salary for 2020. With respect to Mr. Slutsky, his target Revenue Bonus was blended to reflect (i) 50% of his base salary paid in 2020 through September, and (ii) an increased target of 100% of his base salary, effective as of October 1, 2020. Each named executive officer was eligible to receive a bonus expressed as a percentage of his applicable target bonus based on the actual achievement of revenue above 75% of the target revenue goal. During calendar year 2020, the Company and its consolidated subsidiaries achieved a consolidated revenue at a level that triggered the payments equal to 96% of the executive’s target bonus. The actual bonuses paid are set forth above in the Summary Compensation Table in the column entitled “Non-Equity Incentive Plan Compensation.” Because Mr. Nagji’s employment start date was June 16, 2020, he received a prorated Revenue Bonus in 2020 to reflect his partial year of service. Equity Compensation We typically grant equity awards to key new hires upon their commencing employment with us. We historically have used stock options as the primary incentive for long-term compensation to our named executive officers because they are able to profit from stock options only if our stock price increases relative to the stock option’s exercise price, which generally is set at or above the fair market value of our Class A common stock as of the applicable grant date. Generally, the stock options we grant vest in equal monthly installments over four years, either monthly during the four-year period or monthly following a one-year cliff, subject to the employee’s continued service with us on the vesting date. In connection with and following our IPO, we have also granted restricted stock unit awards to certain of our named executive officers. The equity awards granted to our named executive officers in 2020 are discussed below. Equity Compensation Plans Prior to our IPO, our Fifth Amended and Restated 2015 Equity Incentive Plan, or the 2015 Plan, was the primary compensation plan that we used to grant equity awards to our employees, including our executive officers. In connection with our IPO, our board of directors adopted, and our stockholders approved, the 2020 Incentive Award Plan, referred to below as the 2020 Plan, as the vehicle pursuant to which we may grant of cash and equity incentives. The 2015 Plan was terminated in connection with the effectiveness of the 2020 Plan, and no further awards have been since our IPO, or will be, granted under the 2015 Plan. 2020 Equity Grants Founders IPO Awards . In connection with our IPO, our board of directors approved the grant of restricted stock unit awards covering an aggregate of 12,316,533 shares of Class B common stock under the 2020 Plan to each of Messrs. Hirsch and Bezdek, which we refer to as the Founders Awards. The Founders Awards became effective upon the completion of the IPO, and each Founders Award consisted of (i) 8,211,022 restricted stock units that vest based on the achievement of performance goals, which we refer to as the Performance‑Vesting Founders Awards and (ii) 4,105,511 restricted stock units that vest based on the passage of time, which we refer to as the Time-Vesting Founders Awards. The Performance-Vesting Founders Awards were eligible to vest over a seven-year period following the grant date, based on the achievement of stock price goals ranging from $6.07 per share to $51.28 per share. Given our stock price for the post IPO period, all of the stock price goals with respect to the Performance-Vesting Founders Awards were achieved in October 2020; as a result, all 16,422,044 Performance-Vesting Founders Awards vested. Vested restricted stock units will be settled in shares of Class B common stock on the third anniversary of the applicable vesting date or, if earlier, upon a qualifying change in control event or to satisfy tax withholding requirements. 110 The Time-Vesting Founders Awards will vest in substantially equal quarterly installments over the four-year period beginning September 1, 2020, subject to the founder’s continued employment. The Time-Vesting Founders Awards are subject to the following vesting acceleration terms (with any acceleration upon a termination of employment subject to the timely execution and non-revocation of a general release of claims): • In the event of a change in control of the Company then up to 25% of the Time-Vesting Founders Award will vest and in the event that the Time-Vesting Founders Award is assumed in connection with a change in control, the vesting period of the award will shorten from four years to three years. • Upon a termination of an employment without cause by us or for good reason by the founder, up to 50% of the Time-Vesting Founders Award will accelerate and vest; but if either such termination occurs within 12 months following a Change in Control, then the Time-Vesting Founders Award will accelerate and vest in full. • Upon a termination of employment due to death or disability, the next quarterly vesting tranche of the Time-Vesting Founders Award will accelerate and vest. Slutsky Equity Award . On October 30, 2020, our board of directors approved the grant of a restricted stock unit award to Mr. Slutsky under the 2020 Plan in order to compensate Mr. Slutsky for his contributions to the Company and to retain and incentivize further superior performance. The restricted stock unit award covers 1,000,000 shares of the Company’s Class A common stock and will vest in substantially equal quarterly installments over the four-year period commencing on October 1, 2020, subject to Mr. Slutsky’s continued employment with the Company through the applicable vesting date. Nagji Equity Award . In connection with the commencement of Mr. Nagji’s employment with us in June 2020, our board of directors approved the grant of a nonqualified stock option award to Mr. Nagji under the 2015 Plan covering an aggregate of 1,500,000 shares of our common stock. This option vests and becomes exercisable as follows, subject to Mr. Nagji’s continued service with us through the applicable vesting date: • as to 700,000 of the shares underlying the option, with respect to 1/48 of such shares on each monthly anniversary of June 10, 2020 (the “Nagji Time-Vesting Schedule”); • as to 200,000 of the shares underlying the option, in accordance with the Nagji Time-Vesting Schedule, but if the applicable performance condition (as described below) has not yet been satisfied on any applicable vesting date, then the shares shall vest on the date the performance condition is achieved; • as to 400,000 of the shares underlying the option, (i) as to 50% of such shares, on January 1, 2022 and (ii) as to the remaining 50% of such shares, on the later of January 1, 2022 and the date of the achievement of a modified performance condition; and • as to 200,000 of the shares underlying the option, in accordance with the Nagji Time-Vesting Schedule, but if a second modified performance condition has not yet been satisfied on any applicable vesting date, then the shares shall vest on the date the performance condition is achieved. The performance condition and modified performance conditions related to the achievement of stock price goals in connection with our initial public offering. The performance condition and each of the modified performance conditions set forth in the option agreement were each satisfied in September 2020, such that 25,000 shares vested as of the closing date of our IPO and following such date, the option will vest and become exercisable as follows: (i) as to 1,100,000 of the shares underlying the option, to the extent not vested as of the IPO closing date, in accordance with the Nagji Time-Vesting Schedule; and (ii) as to 400,000 of the shares underlying the option, in full on January 1, 2022. If Mr. Nagji’s employment is terminated without “cause” or for “good reason” within 24 months after a “sale of the company” (each as defined in the option agreement), then all time-based vesting conditions that apply to the option will be waived and the option will vest and become exercisable in full as of the termination date. 111 Other Elements of Compensation Retirement Plans We currently maintain a 401(k) retirement savings plan for our employees, including our named executive officers, who satisfy certain eligibility requirements. Our named executive officers are eligible to participate in the 401(k) plan on the same terms as other full-time employees. The Code allows eligible employees to defer a portion of their compensation, within prescribed limits, on a pre‑tax basis through contributions to the 401(k) plan. Currently, we match contributions made by participants in the 401(k) plan up to a specified percentage of the employee contributions, and these matching contributions are fully vested as of the date on which the contribution is made. We believe that providing a vehicle for tax-deferred retirement savings through our 401(k) plan, and making fully vested matching contributions, adds to the overall desirability of our executive compensation package and further incentivizes our employees, including our named executive officers, in accordance with our compensation policies. Each named executive officer received Company-paid matching contributions under the 401(k) plan in 2020. Employee Benefits and Perquisites Health/Welfare Plans. All of our full-time employees, including our named executive officers, are eligible to participate in our health and welfare plans, including: • medical, dental and vision benefits; • medical and dependent care flexible spending accounts; • short-term and long-term disability insurance; and • life insurance. We believe the perquisites described above are necessary and appropriate to provide a competitive compensation package to our named executive officers. No Tax Gross-Ups Except as in limited circumstances with regard to the special bonuses, we have not made gross-up payments to cover our named executive officers’ personal income taxes that may pertain to any of the compensation paid or provided by our company. Outstanding Equity Awards at Year-End The following table summarizes the number of shares of Class A and Class B common stock underlying outstanding equity incentive plan awards for each named executive officer as of December 31, 2020. Unless otherwise specified, each equity award listed in the following table was granted under the 2020 Plan and covers Class A common stock. Option Awards Stock Awards Name Grant Date Number of Securities Underlying Unexercised Options (#) Exercisable Number of Securities Underlying Unexercised Options (#) Unexercisable Option Exercise Price ($) Option Expiration Date Number of Shares or Units of Stock That Have Not Vested (#) Market Value of Shares or Units of Stock That Have Not Vested ($) Douglas Hirsch 09/11/2020 (1) — — — — 3,848,917 155,265,312 Trevor Bezdek 09/11/2020 (1) — — — — 3,848,917 155,265,312 Andrew Slutsky 11/09/2017 (2) 25,000 66,667 2.18 11/08/2027 — — 10/30/2020 (3) — — — — 1,000,000 40,340,000 Bansi Nagji 06/16/2020 (4) 108,334 1,362,500 6.84 06/15/2030 — — (1) This restricted stock unit award covers Class B common stock, and vests with respect to 1/16 of the total number of restricted stock units on each quarterly anniversary of September 1, 2020. 112 (2) This option vests and becomes exercisable with respect to 1/48 of the total number of shares underlying the option on each monthly anniversary of August 1, 2017. This option was granted under the 2015 Plan. (3) This restricted stock unit award vests with respect to 1/16 of the award on each quarterly anniversary of October 1, 2020. (4) This option vests and becomes exercisable as follows: (i) as to 1,100,000 of the shares underlying the option, with respect to 1/48 of such shares on each monthly anniversary of June 10, 2020; and (ii) as to 400,000 of the shares underlying the option, on January 1, 2022. If Mr. Nagji’s employment is terminated without “cause” or for “good reason” within 24 months after a “sale of the company” (each as defined in the option agreement), then all time-based vesting conditions that apply to the option will be waived and the option will vest and become exercisable in full as of the termination date. This option was granted under the 2015 Plan. Executive Compensation Arrangements Douglas Hirsch and Trevor Bezdek 2015 Employment Agreements On October 7, 2015, GoodRx, Inc. entered into employment agreements with Messrs. Hirsch and Bezdek, which agreements were amended and restated effective in connection with our IPO, pursuant to which each serves as our Co-Chief Executive Officer. These employment agreements provide for at-will employment, an annual base salary, and eligibility to participate in the health and welfare benefit plans and programs maintained by GoodRx, Inc. for the benefit of its employees and certain other perquisites. In addition, each of Messrs. Hirsch and Bezdek is eligible to earn an annual cash incentive bonus targeted at 100% of his base salary, which bonus is payable upon the achievement of certain performance targets. Under the amended and restated employment agreements, if either Messrs. Hirsch or Bezdek is terminated without “cause” or due to his death, “disability” or resignation for “good reason” (each, as defined in his employment agreement), then, in addition to any accrued obligations and subject to his timely execution and non-revocation of a general release of claims, he will be eligible to receive (i) 12 months of continued payment of his base salary and (ii) 12 months of company-reimbursed COBRA continuation coverage premiums. The employment agreements also include a “best pay” provision under Section 280G of the Code, pursuant to which any “parachute payments” that become payable to Mr. Hirsch or Mr. Bezdek will either be paid in full or reduced so that such payments are not subject to the excise tax under Section 4999 of the Code, whichever results in the better after-tax treatment to Mr. Hirsch or Mr. Bezdek, as applicable. Andrew Slutsky 2015 Employment Agreement On October 7, 2015, GoodRx, Inc. entered into an employment agreement with Mr. Slutsky, which agreement was amended and restated in connection with our IPO, which provides for at-will employment, an annual base salary, and eligibility to participate in the health and welfare benefit plans and programs maintained by GoodRx, Inc. for the benefit of its employees. In addition, Mr. Slutsky is eligible to earn an annual cash incentive bonus expressed as a percentage of his base salary, which bonus is payable upon the achievement of certain performance targets. Under his amended and restated employment agreement, Mr. Slutsky was eligible to receive an annual incentive bonus equal to 50% of his base salary, which percentage was increased by our board of directors to 100% of his base salary as of October 1, 2020. Under the amended and restated employment agreement, if Mr. Slutsky is terminated without “cause” or due to his death, “disability” or resignation for “good reason” (each, as defined in his employment agreement), then, in addition to any accrued obligations and subject to his timely execution and non-revocation of a general release of claims, he will be eligible to receive (i) 12 months of continued payment of his base salary and (ii) 12 months of company-reimbursed COBRA continuation coverage premiums. The employment agreement also includes a “best pay” provision under Section 280G of the Code, pursuant to which any “parachute payments” that become payable to Mr. Slutsky will either be paid in full or reduced so that such payments are not subject to the excise tax under Section 4999 of the Code, whichever results in the better after-tax treatment to Mr. Slutsky. 113 Bansi Nagji 2020 Offer Letter On March 29, 2020, GoodRx, Inc. entered into an employment offer letter with Mr. Nagji, which provides for at-will employment, an annual base salary, and eligibility to participate in the health and welfare benefit plans and programs maintained by GoodRx, Inc. for the benefit of its employees. In addition, Mr. Nagji is eligible to earn an annual discretionary performance bonus equal to 100% of his base salary (pro-rated for 2020), subject to his continued employment through the end of the applicable performance year. Pursuant to the offer letter, in the event that the company requires via written notice that Mr. Nagji relocate to our Santa Monica, California, office, and Mr. Nagji relocates within three months of receiving such notice, the company will reimburse Mr. Nagji on a tax grossed-up basis for relocation costs up to $500,000, subject to any applicable tax withholding. If Mr. Nagji’s employment is terminated without “good reason” or for “cause” (each as defined in the offer letter) within one year following the relocation, 100% of the relocation reimbursement will be repayable to the company. Pursuant to the offer letter, Mr. Nagji was granted a nonqualified stock option covering 1,500,000 shares of our common stock under the 2015 Plan in June 2020. Each of the performance conditions set forth in the option agreement was satisfied in September 2020, such that 25,000 shares vested as of the closing date of our IPO and following such satisfaction, the option vests and becomes exercisable as follows: (i) as to 1,100,000 of the shares underlying the option, to the extent not vested as of the IPO closing date, in accordance with the Nagji Time-Vesting Schedule; and (ii) as to 400,000 of the shares underlying the option, in full on January 1, 2022. If Mr. Nagji’s employment is terminated without cause or for good reason within 24 months after a “sale of the company,” then all time-based vesting conditions that apply to the option will be waived and the option will vest and become exercisable in full as of the termination date, subject to his execution and non-revocation of a general release of claims. For additional discussion regarding this stock option award, please see “—Nagji Equity Award” above. Pursuant to the offer letter, if Mr. Nagji’s employment is terminated by the company without cause or by him for good reason, he will be eligible to receive 12 months of continued payment of his base salary (subject to his execution and non-revocation of a general release of claims) and any bonus amount that is earned but unpaid as of the termination date. The offer letter also includes a “best pay” provision under Section 280G of the Code, pursuant to which any “parachute payments” that become payable to Mr. Nagji will either be paid in full or reduced so that such payments are not subject to the excise tax under Section 4999 of the Code, whichever results in the better after-tax treatment to Mr. Nagji. Mr. Nagji was also required to execute the Company’s proprietary information and invention assignment agreement as a condition to his employment under the offer letter. 114 Director Compensation 2020 Director Compensation Program The following table sets forth information for 2020 regarding the compensation awarded to, earned by or paid to our non-employee directors who served on our board of directors during 2020. Messrs. Hirsch and Bezdek, who served as our Co-Chief Executive Officers during 2020, and continue to serve in that capacity, do not receive additional compensation for their service as directors, and therefore are not included in the Director Compensation table below. All compensation paid to Messrs. Hirsch and Bezdek is reported above in the “Summary Compensation Table.” Name Fees Earned or Paid in Cash ($) Stock Awards ($) (1) Option Awards ($) (1) Total ($) Christopher Adams — — — — Julie Bradley 5,707 742,500 — 748,207 Dipanjan Deb — — — — Adam Karol — — — — Jacqueline Kosecoff 25,242 — 96,600 121,842 Stephen LeSieur — — — — Gregory Mondre — — — — Agnes Rey-Giraud 21,359 — 97,242 118,601 (1) Amounts reflect the aggregate grant date fair value of restricted stock units and stock options granted in 2020, computed in accordance with the provisions of ASC Topic 718, Stock Compensation . These amounts do not reflect the actual economic value that will be realized by the director upon the vesting, settlement or exercise of the stock option and/or stock award. The assumptions that we used to calculate these amounts are discussed in Note 15 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K. The table below shows the aggregate numbers of shares of our Class A common stock subject to outstanding option awards (exercisable and unexercisable) and/or stock awards (unvested) held as of December 31, 2020 by each non-employee director who was serving as of December 31, 2020. Name Options Outstanding at Year End Stock Awards Outstanding at Year End Christopher Adams — — Julie Bradley — 18,334 Dipanjan Deb — — Adam Karol — — Jacqueline Kosecoff 263,371 — Stephen LeSieur — — Gregory Mondre — — Agnes Rey-Giraud 222,185 — Board Service Letter Agreements In April 2016 and June 2016, we entered into board service letter agreements with Dr. Kosecoff and Ms. Rey-Giraud, respectively, pursuant to which they receive $20,000 per year, payable quarterly, for their service as members of our board of directors. Pursuant to the offer letters, in connection with the commencement of their service, each of Ms. Rey-Giraud and Dr. Kosecoff also received a stock option grant covering 0.25% of the fully-diluted equity of the Company as of the date of grant. These options vest in equal monthly installments over the 48 months following the grant date and vest in full upon a “sale of the company” (as defined in the 2015 Plan), subject to the director’s continued service through the vesting date or sale of the company, as applicable. In June 2020, we entered into new board service letter agreements with each of Dr. Kosecoff and Ms. Rey-Giraud, pursuant to which they continue to serve on our board of directors and will receive $30,000 per year, paid quarterly, for their service. Additionally, if Dr. Kosecoff serves on the audit committee of the board of directors, she will receive an additional $8,000 per year, paid quarterly, for her service on this committee. All cash compensation will be pro-rated for any partial quarter of service. 115 Pursuant to the letter agreements, each of Dr. Kosecoff and Ms. Rey-Giraud was granted a non-statutory option to purchase 30,000 shares of our Class A common stock in June 2020. These options will vest in equal monthly installments over the 12 months following the director’s election date (for Dr. Kosecoff) or August 11, 2020 (for Ms. Rey-Giraud), subject to the director’s continued service through the vesting date. Dr. Kosecoff will also be eligible to receive annual equity grants for continued service as approved by the board of directors. In August 2020, we entered into a board service letter agreement with Ms. Bradley in connection with the commencement of her service as a member of our board of directors. Pursuant to the board service letter agreement, Ms. Bradley will receive $30,000 per year, paid quarterly, for her service as a member of the board, and an additional $20,000 per year, paid quarterly, for her service as chair of the audit committee of the board of directors. All cash compensation will be pro-rated for any partial quarter of service. Additionally, pursuant to the letter agreement, Ms. Bradley was granted two restricted stock unit awards in connection with the completion of our IPO: (i) an award of 15,000 restricted stock units corresponding to shares of our Class A common stock, which will vest in equal monthly installments over the three-year period following August 1, 2020, subject to Ms. Bradley’s continued service through the applicable vesting date; and (ii) an award of 7,500 restricted stock units corresponding to shares of our Class A common stock, which will vest in equal monthly installments over the one-year period following August 1, 2020, subject to Ms. Bradley’s continued service through the applicable vesting date. Post-IPO Director Compensation Program In connection with our IPO, our board of directors adopted and our stockholders approved a nonemployee director compensation program (the “Director Compensation Program”), which became effective in connection with the completion of our IPO. The Director Compensation Program provides for annual retainer fees and long-term equity awards for certain of our non-employee directors, which currently include Julie Bradley, Jacqueline Kosecoff and Agnes Rey-Giraud (each, an “Eligible Director”). The material terms of the Director Compensation Program are summarized below. The Director Compensation Program consists of the following components: Cash Compensation • Annual Retainer: $30,000 • Annual Committee Chair Retainer: • Audit: $20,000 • Compensation: $15,000 • Nominating and Corporate Governance: $9,000 • Compliance: $9,000 • Annual Committee Member (Non-Chair) Retainer: • Audit: $8,000 • Compensation: $7,000 • Nominating and Corporate Governance: $4,000 • Compliance: $4,000 Annual cash retainers will be paid in quarterly installments in arrears and will be pro-rated for any partial calendar quarter of service. 116 Equity Compensation • Initial Grant : Each Eligible Director who is initially elected or appointed to serve on the board of directors will be granted a restricted stock unit award with a value of approximately $420,000 on the date on which such Eligible Director is appointed or elected to serve on the board of directors. These initial grants will vest as to one-third of the shares underlying the grant on each of the first three anniversaries of the grant date, subject to such Eligible Director’s continued service through the applicable vesting date. • Annual Grant : An Eligible Director who is serving on the board of directors as of the date of the annual meeting of the Company’s stockholders each calendar year beginning with calendar year 2021 will be granted, on such annual meeting date, a restricted stock unit award with a value of approximately of $210,000. Each annual grant will vest in full on the earlier to occur of (i) the one-year anniversary of the applicable grant date and (ii) the date of the next annual meeting following the grant date, subject to such Eligible Director’s continued service through the applicable vesting date. In addition, each Initial Grant and Annual Grant will vest in full upon a change in control, other than a non-transactional change in control, of the Company (both as defined in the 2020 Plan). Compensation under our Director Compensation Program is subject to the annual limits on non-employee director compensation set forth in the 2020 Plan. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The information required by this Item is incorporated by reference to the definitive Proxy Statement for our 2021 Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after December 31, 2020. Securities Authorized For Issuance under Equity Compensation Plans (As of December 31, 2020) Plan category: Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants, and Rights Weighted-Average Exercise Price of Outstanding Options, Warrants, and Rights Number of Securities Available for Future Issuance Under Equity Compensation Plans (excludes securities reflected in first column) Equity compensation plans approved by security holders (1) 43,386,637 (2) Class A Restricted Stock Units 2,789,826 (3) — Class B Restricted Stock Units 23,388,556 (4) — Options to Purchase Class A Common Stock 21,527,886 (5) $ 6.22 (6) Equity compensation plans not approved by security holders — — — Total 47,706,268 $ 6.22 43,386,637 (1) Consists of the Fifth Amended and Restated 2015 Equity Incentive Plan (the “2015 Plan”), 2020 Incentive Award Plan (the “2020 Plan”), and 2020 Employee Stock Purchase Plan (the “ESPP”). (2) The number of shares authorized under our 2020 Incentive Award Plan will increase on the first day of each calendar year beginning on January 1, 2021 and ending on and including January 1, 2030, equal to the lesser of (A) 5% of the shares of Class A Common Stock and Class B Common Stock outstanding as of the last day of the immediately preceding fiscal year and (B) such lesser number of shares as determined by our board of directors, which may be issued as shares of Class A Common Stock or Class B Common Stock. The number of shares authorized under our ESPP will increase on the first day of each calendar year beginning on January 1, 2021 and ending on and including January 1, 2030, equal to the lesser of (A) 1% of the shares of Class A Common Stock and Class B Common Stock outstanding as of the last day of the immediately preceding fiscal year and (B) such lesser number of shares as determined by our board of directors. (3) Consists of 2,789,826 outstanding Class A restricted stock units under the 2020 Plan. 117 (4) Consists of 23,388,556 outstanding Class B restricted stock units under the 2020 Plan, inclusive of 15,690,722 of restricted stock units vested but not settled/issued in connection with the Performance-Vesting Founders Awards. (5) Consists of 20,646,636 outstanding options to purchase stock under the 2015 Plan and 881,250 outstanding options to purchase stock under the 2020 Plan. Following the effectiveness of the 2020 Plan, no further grants were permitted to be made under the 2015 Plan, though existing awards remain outstanding. (6) As of December 31, 2020, the weighted-average exercise price of outstanding options was $6.22. Item 13. Certain Relationships and Related Transactions, and Director Independence. Policies and Procedures for Approval of Related Person Transactions Our board of directors recognizes the fact that transactions with related persons present a heightened risk of conflicts of interests (or the perception thereof). We have a written policy on transactions with related persons that is in conformity with the requirements for issuers having publicly held common stock that is listed on Nasdaq. Under the policy, our legal team is primarily responsible for developing and implementing processes and procedures to obtain information regarding related persons with respect to potential related person transactions and then determining, based on the facts and circumstances, whether such potential related person transactions do, in fact, constitute related person transactions requiring compliance with the policy. In addition, any potential related person transaction that is proposed to be entered into by the Company must be reported to the Company’s General Counsel, by both the related person and the person at the Company responsible for such potential related person transaction. If our legal team determines that a transaction or relationship is a related person transaction requiring compliance with the policy, our General Counsel is required to present to the Audit Committee all relevant facts and circumstances relating to the related person transaction. Our Audit Committee must review the relevant facts and circumstances of each related person transaction, including if the transaction is on terms comparable to those that could be obtained in arm's length dealings with an unrelated third party and the extent of the related person's interest in the transaction, take into account the conflicts of interest and corporate opportunity provisions of our Code of Business Conduct and Ethics, and either approve or disapprove the related person transaction. If advance Audit Committee approval of a related person transaction requiring the Audit Committee's approval is not feasible, then the transaction may be preliminarily entered into by management upon prior approval of the transaction by the chair of the Audit Committee subject to ratification of the transaction by the Audit Committee at the Audit Committee's next regularly scheduled meeting; provided, that if ratification is not forthcoming, management will make all reasonable efforts to cancel or annul the transaction. If a transaction was not initially recognized as a related person transaction, then upon such recognition the transaction will be presented to the Audit Committee for ratification at the Audit Committee's next regularly scheduled meeting; provided, that if ratification is not forthcoming, management will make all reasonable efforts to cancel or annul the transaction. Our management will update the Audit Committee as to any material changes to any approved or ratified related person transaction and will provide a status report at least annually of all then current related person transactions. No director may participate in approval of a related person transaction for which he or she is a related person. Relationships and Transactions with Directors, Executive Officers and Significant Stockholders Preferred Stock Financing In August 2018, we entered into a purchase and recapitalization agreement with Silver Lake Partners V, L.P. In October 2018, the agreement was assigned by Silver Lake to its affiliate, SLP Geology Aggregator, L.P. Pursuant to the agreement, in October 2018, GoodRx Holdings, Inc. issued 126,045,531 shares of redeemable convertible preferred stock for an aggregate purchase price of approximately $748.8 million. In connection with the issuance of these redeemable convertible preferred stock, our existing shares of preferred stock of GoodRx Holdings, Inc. were converted into shares of common stock. As holders of our redeemable convertible preferred stock, SLP Geology Aggregator, L.P. is entitled to specified registration rights. 118 Investor Rights Agreement In October 2018, we entered into an amended and restated investor rights agreement with Francisco Partners IV, L.P., Francisco Partners IV-A, L.P., Spectrum Equity VII, L.P., Spectrum VII Investment Managers’ Fund, L.P., Spectrum VII Co-Investment Fund, L.P., Idea Men, LLC, and SLP Geology Aggregator, L.P. These stockholders are entitled to rights with respect to the registration of their shares following this offering. Silver Lake Purchase Agreement On September 13, 2020, we entered into a purchase agreement with Silver Lake, pursuant to which Silver Lake agreed to purchase, subject to customary closing conditions, $100.0 million of our Class A common stock in a private placement concurrent with or shortly after the completion of our IPO, at a purchase price per share equal to the IPO price per share at which our Class A common stock was sold to the public. The lock-up agreement that Silver Lake entered into with the underwriters in connection with our IPO prohibits the sale of any shares of Class A common stock Silver Lake purchased in the private placement for a period of 180 days after the date of the Prospectus, subject to certain exceptions. Stockholders Agreements In October 2018, we entered into an amended and restated stockholders agreement with Francisco Partners IV, L.P., Francisco Partners IV-A, L.P., Spectrum Equity VII, L.P., Spectrum VII Investment Managers’ Fund, L.P., Spectrum VII Co-Investment Fund, L.P., Idea Men, LLC, SLP Geology Aggregator, L.P., Douglas Hirsch, Trevor Bezdek, Scott Marlette and certain other stockholders. As a result of our IPO, most of the provisions set forth in the amended and restated stockholders agreement that apply to us were terminated, including rights regarding the nomination, appointment and designation of members of our board of directors and board committees, transfer restrictions, tag-along rights, drag-along rights, rights of first refusal and negative covenants. We continue to be required to maintain directors and officers indemnity insurance coverage reasonably satisfactory to the board of directors, indemnify and exculpate directors to the fullest extent permitted under applicable law and, at the request of Francisco Partners IV, L.P., Francisco Partners IV-A, L.P., Spectrum Equity VII, L.P., Spectrum VII Investment Managers’ Fund, L.P., Spectrum VII Co-Investment Fund, L.P., SLP Geology Aggregator, L.P. or Idea Men, LLC, enter into a voting agreement pursuant to which the parties will agree to vote in favor of any directors nominated by such parties, in each case pursuant to the amended and restated stockholders agreement. In connection with our IPO, we entered into a stockholders agreement (the “Stockholders Agreement”), with SLP Geology Aggregator, L.P., Francisco Partners IV, L.P., Francisco Partners IV-A, L.P., Spectrum Equity VII, L.P., Spectrum VII Investment Managers’ Fund, L.P., Spectrum VII Co-Investment Fund, L.P. and Idea Men, LLC, granting them certain board designation rights so long as they maintain a certain percentage of ownership of our outstanding common stock. The Stockholders Agreement requires us to, among other things, nominate a number of individuals for election as our directors at any meeting of our stockholders, designated by SLP Geology Aggregator, L.P. (each such individual a “Silver Lake Designee”), Francisco Partners IV, L.P. and Francisco Partners IV-A, L.P. (each such individual a “Francisco Partners Designee”), Spectrum Equity VII, L.P., Spectrum VII Investment Managers’ Fund, L.P., and Spectrum VII Co-Investment Fund, L.P. (each such individual a “Spectrum Designee”) and Idea Men, LLC (each such individual a “Idea Men Designee,” and together with the Silver Lake Designee, Francisco Partners Designee and Spectrum Designee, the “Stockholder Designees”), such that, upon the election of such individual and each other individual nominated by or at the direction of our board of directors or a duly-authorized committee of the board, as a director of our company, the number of: (A) Silver Lake Designees serving as directors will be equal to (i) three (3) directors, if certain affiliates of Silver Lake continue to beneficially own at least 20% of the aggregate number of shares of common stock outstanding immediately following our IPO and the private placement, (ii) two (2) directors, if certain affiliates of Silver Lake continue to beneficially own less than 20% but more than 10% of the aggregate number of shares of common stock outstanding immediately following our IPO and the private placement or (iii) one (1) director, if certain 119 affiliates of Silver Lake continue to beneficially own less than 10% but more than 5% of the aggregate number of shares of common stock outstanding immediately following our IPO and the private placement; (B) Francisco Partners Designees serving as directors will be equal to (i) two (2) directors, if certain affiliates of Francisco Partners continue to beneficially own at least 10% of the aggregate number of shares of common stock outstanding immediately following our IPO and the private placement, or (ii) one (1) director, if certain affiliates of Francisco Partners continue to beneficially own less than 10% but more than 5% of the aggregate number of shares of common stock outstanding immediately following our IPO and the private placement; (C) Spectrum Designees serving as directors will be equal to one (1) director, if certain affiliates of Spectrum continue to beneficially own at least 5% of the aggregate number of shares of common stock outstanding immediately following our IPO and the private placement; and (D) Idea Men Designees serving as directors will be equal to two (2) directors, if Idea Men, LLC continues to beneficially own at least 5% of the aggregate number of shares of common stock outstanding immediately following our IPO and the private placement provided that the Idea Men Designees shall be Trevor Bezdek, for so long as Trevor Bezdek serves as our Chief Executive Officer or Co-Chief Executive Officer, and Douglas Hirsch, for so long as Douglas Hirsch serves as our Chief Executive Officer or Co-Chief Executive Officer. Each party to our Stockholders Agreement has also agreed to vote, or cause to vote, all of their outstanding shares of our Class A common stock and Class B common stock at any annual or special meeting of stockholders in which directors are elected, so as to cause (i) the election of the Silver Lake Designees, Francisco Partners Designees, Spectrum Designee and Idea Men Designees and (ii) the election of two (2) directors who are not affiliated with any party to our Stockholders Agreement and who satisfy the standards of independence established for independent directors under the rules and the additional independence standards applicable to audit committee members established pursuant to Rule 10A-3 under the Exchange Act. In addition, pursuant to the Stockholders Agreement, if Idea Men, LLC continues to beneficially own at least 5% of the aggregate number of outstanding shares of common stock at any time that the number of Silver Lake Designees, Francisco Partners Designees or the Spectrum Designee is decreased pursuant to the terms above, then the number of Idea Men Designees serving as directors will be increased on a one to one basis. For so long as each of Silver Lake and Francisco Partners continue to maintain at least one (1) director as Silver Lake Designees and Francisco Partners Designees, respectively, Idea Men, LLC shall not nominate a director to fill a vacancy caused by a decrease in the number of Silver Lake Designees or Francisco Partners Designees, or by the removal of the Spectrum Designee, pursuant to the terms above without the consent of each of Silver Lake and Francisco Partners. If the number of individuals that Silver Lake, Francisco Partners, Spectrum or Idea Men, LLC have the right to designate is decreased because of the decrease in its in ownership, then the corresponding Silver Lake Designee, Francisco Partners Designee, Spectrum Designee or Idea Men Designee will immediately tender his or her resignation for consideration by our board of directors and, unless a majority of our board of directors agrees that such director shall not resign following the decrease, such director shall resign within thirty (30) days. The last remaining Silver Lake Designee, Francisco Partners Designee, Spectrum Designee or Idea Men Designee may remain on our board of directors through the end of his or her then current term; provided, that a director may resign at any time regardless of the period of time left in his or her then current term. Each party to our Stockholders Agreement has also agreed, subject to certain limited exceptions, to certain limitations on their ability to sell or transfer any shares of common stock during the three-year period following our IPO. For example, each party must generally provide written notice to the other parties prior to exercising registration rights or making any transfer of such party’s shares. Following such notice, each other party shall have the ability to participate in the contemplated transaction on a pro rata basis. These restrictions on transfer terminate with respect to each party on the earlier of the three-year period following the closing of our IPO or the time at which such party beneficially owns less than 5% of the shares of common stock outstanding and does not have a director designee on our board of directors. 120 Disposition Agreement In October 2018, we entered into an amended and restated disposition agreement with Francisco Partners IV, L.P., Spectrum Equity VII, L.P., SLP Geology Aggregator L.P., Idea Men, LLC, Douglas Hirsch, Trevor Bezdek and Scott Marlette. The agreement restricted the ability of Idea Men, LLC, Douglas Hirsch, Trevor Bezdek and Scott Marlette to sell and transfer their equity interests in us or issue equity or debt without first obtaining the written consent of certain of Francisco Partners IV, L.P., Spectrum Equity VII, L.P., SLP Geology Aggregator L.P. The amended and restated disposition agreement was terminated by its terms in connection with the completion of our IPO. Services Agreement In October 2018, we entered into a services agreement with Silver Lake Management Company V, L.L.C., or SLMC. Pursuant to the agreement, SLMC may render to us or any of our affiliates, by and through itself and its affiliates, each as an independent contractor, monitoring, advisory and consulting services, among others. Pursuant to the agreement, we also granted SLMC a non-exclusive license to use our trademarks and logos in connection with the describing SLMC’s relationship with us. No services have been rendered to us pursuant to this agreement, and we have not paid any management fees to SLMC to date. Other Transactions We have granted options to our executive officers and certain of our directors as more fully described in the section entitled “Executive and Director Compensation.” Directed Share Program At our request, the underwriters reserved for sale at the IPO price per share of $33.00 of up to 5% of the shares of Class A common stock offered by our Prospectus, to certain individuals through a directed share program, including our directors, employees and certain other individuals identified by management. Indemnification Agreements We have entered into, and plan on entering into, indemnification agreements with each of our directors and executive officers. Independence of the Board of Directors We are a “controlled company” under the rules of the Nasdaq Stock Market. As a result, we qualify for exemptions from, and have elected not to comply with, certain corporate governance requirements under the rules, including the requirements that within one year of the completion of our IPO, we have a board that is composed of majority of “independent directors,” as defined under the rules, and a compensation committee and a nominating and corporate governance committee that are composed entirely of independent directors. Even though we are a controlled company, we are required to comply with the rules of the SEC and the Nasdaq Stock Market relating to the membership, qualifications and operations of the audit committee. The rules of the Nasdaq Stock Market define a “controlled company” as a company of which more than 50% of the voting power for the election of directors is held by an individual, a group or another company. Pursuant to our Stockholders Agreement, the parties to that agreement beneficially own 94.8% of the combined voting power of our Class A and Class B common stock as of the date of this Annual Report on Form 10-K. Accordingly, we qualify as a “controlled company” and rely on the controlled company exemption from the director independence requirements of the Nasdaq Stock Market relating to the board of directors, compensation committee and nominating and corporate governance committee. If we cease to be a controlled company and the Class A common stock continues to be listed on the Nasdaq Global Select Market, we will be required to comply with these requirements by the date our status as a controlled company changes or within specified transition periods applicable to certain provisions, as the case may be. 121 In making its independence determinations, the b oard of directors reviewed and discussed information provided by the directors with regard to each director’s business and personal activities and any relationships they have with us and our management, including with respect to their ownership of our Class A common stock and Class B common stock. As a result of this review, our board of directors determined that Christopher Adams, Julie Bradley, Dipanjan Deb, Adam Karol, Jacqueline Kosecoff, Stephen LeSieur, Gregory Mondre and Agnes Rey-Giraud are “independent directors” as defined under the applicable rules and regulations of the SEC and the listing requirements and rules of The Nasdaq Stock Market, representing eight of our ten directors. Each of Mr. Bezdek and Mr. Hirsch is not an independent director due to his employment as Co-Chief Executive Officer of the Company. In addition, two members of the Audit Committee (Ms. Bradley and Ms. Rey-Giraud) meet the heightened independence standards required for audit committee members under the Nasdaq Stock Market rules and SEC rules. Mr. Karol does not meet the heightened independence standards under the Nasdaq Stock Market rules and SEC rules and the Company is relying on the phase in period provided in Rule 10A-3 available for newly public companies for one year from the date of effectiveness of the registration statement. Each member of the Compensation Committee (Mr. Deb, Ms. Kosecoff and Mr. Mondre) meets the heightened independence standards required for compensation committee members under the Nasdaq rules and SEC rules. Except for Mr. Bezdek, each member of the Nominating and Corporate Governance Committee (Mr. Adams and Mr. Mondre) is also independent under the Nasdaq rules. Item 14. Principal Accountant Fees and Services. The information required by this Item is incorporated by reference to the definitive Proxy Statement for our 2021 Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after December 31, 2020. 122 PART IV Item 15. Exhibits and Financial Statement Schedules (a)(1) Financial Statements Our consolidated financial statements are included in this Annual Report on Form 10-K beginning on page F-1. (a)(2) Financial Statement Schedules All financial statement schedules have been omitted because they are not applicable, not material or because the information required is already included in the consolidated financial statements or the notes thereto. (a)(3) Exhibits The exhibits listed below are filed as part of this Annual Report on Form 10-K or are incorporated herein by reference, in each case as indicated below. Incorporated by Reference Filed/ Exhibit Number Exhibit Description Form File No. Exhibit Filing Date Furnished Herewith 3.1 Amended and Restated Certificate of Incorporation 8-K 001-39549 3.1 9/28/20 3.2 Amended and Restated Bylaws 8-K 001-39549 3.2 9/28/20 4.1 Form of Certificate of Class A Common Stock S-1 333-248465 4.1 8/28/20 4.2 Form of Certificate of Class B Common Stock S-8 333-249069 4.4 9/25/20 4.3 Description of Capital Stock * 10.1† Form of Indemnification Agreement between GoodRx Holdings, Inc. and its directors and officers S-1/A 333-248465 10.1 9/14/20 10.2† Fifth Amended and Restated 2015 Equity Incentive Plan 10-Q 001-39549 10.2 11/12/20 10.3† 2020 Incentive Award Plan S-1/A 333-248465 10.3 9/14/20 10.3.1† Form of Option Agreement pursuant to 2020 Incentive Award Plan S-1/A 333-248465 10.3.1 9/14/20 10.3.2† Form of Restricted Stock Unit Agreement pursuant to 2020 Incentive Award Plan S-1/A 333-248465 10.3.2 9/14/20 10.3.3† Form of Time-Vesting Restricted Stock Unit Award Agreement (Founders) pursuant to 2020 Incentive Award Plan S-1/A 333-248465 10.3.3 9/14/20 10.3.4† Form of Performance-Vesting Restricted Stock United Award Agreement (Founders) pursuant to 2020 Incentive Award Plan S-1/A 333-248465 10.3.4 9/14/20 10.4† GoodRx Holdings, Inc. 2020 Employee Stock Purchase Plan S-1/A 333-248465 10.4 9/14/20 10.5† GoodRx Holdings, Inc. Director Compensation Program S-1/A 333-248465 10.5 9/14/20 10.6† Amended and Restated Employment Agreement by and between GoodRx, Inc. and Douglas Hirsch, dated September 19, 2020 S-1/A 333-248465 10.6 9/22/20 123 Incorporated by Reference Filed/ Exhibit Number Exhibit Description Form File No. Exhibit Filing Date Furnished Herewith 10.7† Amended and Restated Employment Agreement by and between GoodRx, Inc. and Trevor Bezdek, dated September 19, 2020 S-1/A 333-248465 10.7 9/22/20 10.8† Amended and Restated Employment Agreement by and between GoodRx, Inc. and Andrew Slutsky, dated September 20, 2020 S-1/A 333-248465 10.8 9/22/20 10.9† Offer of Employment Letter by and between GoodRx, Inc. and Babak Azad, dated October 3, 2019 S-1/A 333-248465 10.9 8/28/20 10.10† Offer Letter for Bansi Nagji, dated March 28, 2020 * 10.11† Offer Letter for Karsten Voermann, effective February 12, 2020 * 10.12 First Lien Credit Agreement by and among GoodRx, Inc., GoodRx Intermediate Holdings, LLC, the lenders party thereto, Barclays Bank PLC and the joint lead arrangers and joint lead bookrunners party thereto, dated October 12, 2018 S-1/A 333-248465 10.13 8/28/20 10.13 First Incremental Amendment to First Lien Credit Agreement by and between GoodRx, Inc., GoodRx Intermediate Holdings, LLC, Iodine, Inc., HeyDoctor, LLC, the lenders party thereto and Barclays Bank PLC, dated November 1, 2019 S-1/A 333-248465 10.14 8/28/20 10.14 Second Incremental Amendment to First Lien Credit Agreement by and between GoodRx, Inc., GoodRx Intermediate Holdings, LLC, Iodine, Inc., HeyDoctor, LLC, Lighthouse Acquisition Corp., the lenders party thereto and Barclays Bank PLC, dated May 12, 2020 S-1/A 333-248465 10.15 8/28/20 10.15 First Lien Security Agreement by and among GoodRx, Inc., GoodRx Intermediate Holdings, LLC., Iodine, Inc., and Barclays Bank PLC, dated October 12, 2018 S-1/A 333-248465 10.16 8/28/20 10.16 First Lien Guaranty by and among GoodRx, Inc., GoodRx Intermediate Holdings, LLC, Iodine, Inc. and Barclays Bank PLC, dated October 12, 2018 S-1/A 333-248465 10.17 8/28/20 10.17 Office Lease Agreement by and between GoodRx, Inc. and DE Pacific 233, LLC, dated January 29, 2016, as amended as of January 27, 2017, June 12, 2017, February 14, 2018, October 2, 2018, December 14, 2018, September 17, 2019, and March 2, 2020 S-1/A 333-248465 10.18 8/28/20 10.18 Office Lease Agreement by and between GoodRx, Inc. and CSHV Pen Factory, LLC, dated September 6, 2019 S-1/A 333-248465 10.19 8/28/20 124 Incorporated by Reference Filed/ Exhibit Number Exhibit Description Form File No. Exhibit Filing Date Furnished Herewith 10.19 Stockholders Agreement by and between GoodRx Holdings, Inc. and certain security holders of GoodRx Holdings, Inc., dated September 22, 2020 8-K 001-39549 10.1 9/28/20 21.1 List of Subsidiaries of GoodRx Holdings, Inc. * 23.1 Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm * 31.1 Rule 13a-14(a)/15d-14(a) Certification of Co-Chief Executive Officer * 31.2 Rule 13a-14(a)/15d-14(a) Certification of Co-Chief Executive Officer * 31.3 Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer * 32.1 Section 1350 Certification of Co-Chief Executive Officer ** 32.2 Section 1350 Certification of Co-Chief Executive Officer ** 32.3 Section 1350 Certification of Chief Financial Officer ** 101.INS XBRL Instance Document * 101.SCH XBRL Taxonomy Extension Schema Document * 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document * 101.LAB XBRL Taxonomy Extension Label Linkbase Document * 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document * 101.DEF XBRL Taxonomy Extension Definition Linkbase Document * * Filed herewith. ** Furnished herewith. † Indicates management contract or compensatory plan. Item 16. Form 10-K Summary. None. 125 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized . GOODRX HOLDINGS, INC. Date: March 11, 2021 By: /s/ Karsten Voermann Karsten Voermann Chief Financial Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated. Name Title Date /s/ Douglas Hirsch Co-Chief Executive Officer March 11, 2021 Douglas Hirsch (principal executive officer) /s/ Trevor Bezdek Co-Chief Executive Officer March 11, 2021 Trevor Bezdek (principal executive officer) /s/ Karsten Voermann Chief Financial Officer March 11, 2021 Karsten Voermann ( principal financial and accounting officer) /s/ Christopher Adams Director March 11, 2021 Christopher Adams /s/ Julie Bradley Director March 11, 2021 Julie Bradley /s/ Dipanjan Deb Director March 11, 2021 Dipanjan Deb /s/ Adam Karol Director March 11, 2021 Adam Karol /s/ Jacqueline Kosecoff Director March 11, 2021 Jacqueline Kosecoff /s/ Stephen LeSieur Director March 11, 2021 Stephen LeSieur /s/ Gregory Mondre Director March 11, 2021 Gregory Mondre /s/ Agnes Rey-Giraud Director March 11, 2021 Agnes Rey-Giraud 126 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firm F-2 Consolidated Balance Sheets F-3 Consolidated Statements of Operations F-4 Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders’ Equity ( Deficit) F-5 Consolidated Statements of Cash Flows F-6 Notes to Consolidated Financial Statements F-8 F-1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of GoodRx Holdings, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of GoodRx Holdings, Inc. and its subsidiaries (the “Company”) as of December 31, 2020 and 2019, and the related consolidated statements of operations, of changes in redeemable convertible preferred stock and stockholders’ equity (deficit), and of cash flows for each of the three years in the period ended December 31, 2020, including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020 in conformity with accounting principles generally accepted in the United States of America. Change in Accounting Principle As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it accounts for leases in 2019. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ PricewaterhouseCoopers LLP Los Angeles, California March 11, 2021 We have served as the Company's auditor since 2018. F-2 GoodRx Holdings, Inc. Consolidated Balance Sheets December 31, (in thousands, except par values) 2020 2019 Assets Current assets Cash and cash equivalents $ 968,691 $ 26,050 Restricted cash 2,900 — Accounts receivable, net 68,729 48,129 Prepaid expenses and other current assets 46,048 12,403 Total current assets 1,086,368 86,582 Property and equipment, net 23,057 1,860 Goodwill 261,116 236,225 Intangible assets, net 36,919 21,267 Capitalized software, net 19,800 5,178 Operating lease right-of-use assets 27,712 32,315 Deferred tax assets, net 13,117 2,207 Other assets 2,025 1,162 Total assets $ 1,470,114 $ 386,796 Liabilities, redeemable convertible preferred stock and stockholders' equity (deficit) Current liabilities Accounts payable $ 10,291 $ 7,851 Accrued expenses and other current liabilities 37,692 15,556 Current portion of debt 7,029 7,029 Operating lease liabilities, current 4,539 2,937 Total current liabilities 59,551 33,373 Debt, net 659,888 663,893 Operating lease liabilities, net of current portion 33,467 37,129 Other liabilities 5,849 2,974 Total liabilities 758,755 737,369 Commitments and contingencies (Note 13) Redeemable convertible preferred stock, $0.006 par value; zero and 130,000 shares authorized at December 31, 2020 and December 31, 2019, respectively; and zero and 126,046 shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively — 737,009 Stockholders' equity (deficit) Preferred stock, $0.0001 par value; 50,000 and zero shares authorized at December 31, 2020 and December 31, 2019, respectively; and zero shares issued and outstanding at December 31, 2020 and December 31, 2019 — — Common stock, $0.002 par value; zero and 380,000 shares authorized at December 31, 2020 and December 31, 2019, respectively; and zero and 229,750 shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively — 460 Common stock, $0.0001 par value; Class A: 2,000,000 and zero shares authorized, 63,071 and zero shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively; and Class B: 1,000,000 and zero shares authorized, 328,589 and zero shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively 39 — Additional paid-in capital 2,101,773 8,788 Accumulated deficit (1,390,453 ) (1,096,830 ) Total stockholders' equity (deficit) 711,359 (1,087,582 ) Total liabilities, redeemable convertible preferred stock and stockholders' equity (deficit) $ 1,470,114 $ 386,796 See accompanying Notes to Consolidated Financial Statements. F-3 GoodRx Holdings, Inc. Consolidated Statements of Operations Year Ended December 31, (in thousands, except per share amounts) 2020 2019 2018 Revenue $ 550,700 $ 388,224 $ 249,522 Costs and operating expenses: Cost of revenue, exclusive of depreciation and amortization presented separately below 29,587 14,016 6,035 Product development and technology 61,816 29,300 43,894 Sales and marketing 255,135 176,967 104,177 General and administrative 461,451 14,692 8,359 Depreciation and amortization 18,430 13,573 9,806 Total costs and operating expenses 826,419 248,548 172,271 Operating (loss) income (275,719 ) 139,676 77,251 Other (income) expense: Other (income) expense, net (22 ) 2,967 7 Loss on extinguishment of debt — 4,877 2,857 Interest income (160 ) (715 ) (154 ) Interest expense 27,913 49,569 22,193 Total other expense, net 27,731 56,698 24,903 (Loss) income before income taxes (303,450 ) 82,978 52,348 Income tax benefit (expense) 9,827 (16,930 ) (8,555 ) Net (loss) income $ (293,623 ) $ 66,048 $ 43,793 Net (loss) income attributable to common stockholders Basic $ (293,623 ) $ 42,441 $ 13,795 Diluted $ (293,623 ) $ 42,745 $ 14,226 (Loss) earnings per share: (Loss) earnings per share - basic $ (1.07 ) $ 0.19 $ 0.12 (Loss) earnings per share - diluted $ (1.07 ) $ 0.18 $ 0.12 Weighted average shares used in computing (loss) earnings per share: Basic 274,696 226,607 111,842 Diluted 274,696 231,209 118,344 Stock-based compensation included in costs and operating expenses: Cost of revenue $ 184 $ 28 $ — Product development and technology 10,937 1,775 1,048 Sales and marketing 8,789 1,268 544 General and administrative 377,375 676 170 See accompanying Notes to Consolidated Financial Statements. F-4 GoodRx Holdings, Inc. Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) Redeemable Convertible Preferred Stock Common Stock Class A and Class B Common Stock Additional Paid-in Accumulated Total Stockholders' (in thousands, except per share amounts) Shares Amount Shares Amount Shares Amount Capital Deficit Equity (Deficit) Balance at December 31, 2017 5,654 $ 166,777 78,483 $ 157 — $ — $ 54,281 $ (86,191 ) $ (31,753 ) Stock options exercised — — 5,285 11 — — 3,338 — 3,349 Vesting of restricted stock awards — — 94 — — — — — — Conversion of preferred stock to common stock (5,654 ) (166,777 ) 141,339 283 — — 166,494 — 166,777 Preferred stock issuance, net of issuance costs 126,046 737,009 — — — — — — — Stock-based compensation — — — — — — 1,762 — 1,762 Dividends paid ($152.25 per preferred share, $5.91 per common share) — — — — — — (225,875 ) (1,120,480 ) (1,346,355 ) Net income — — — — — — — 43,793 43,793 Balance at December 31, 2018 126,046 $ 737,009 225,201 $ 451 — $ — $ — $ (1,162,878 ) $ (1,162,427 ) Stock options exercised — — 2,397 5 — — 3,037 — 3,042 Common stock issuance — — 273 1 — — 1,622 — 1,623 Restricted stock issuance — 1,879 3 — — (3 ) — — Stock-based compensation — — — — — — 4,132 — 4,132 Net income — — — — — — — 66,048 66,048 Balance at December 31, 2019 126,046 $ 737,009 229,750 $ 460 — $ — $ 8,788 $ (1,096,830 ) $ (1,087,582 ) Stock options exercised — — 1,469 3 2,300 — 10,828 — 10,831 Stock-based compensation — — — — — — 399,722 — 399,722 Conversion of redeemable convertible preferred stock to common stock in connection with initial public offering (126,046 ) (737,009 ) 126,046 252 — — 736,757 — 737,009 Issuance of Class A common stock in connection with initial public offering, net of offering costs, underwriting discounts and commissions — — — — 28,615 3 886,853 — 886,856 Private placement of Class A common stock — — — — 3,030 — 100,000 — 100,000 Conversion of common stock into Class B common stock in connection with initial public offering — — (357,265 ) (715 ) 357,265 36 679 — — Common stock withheld for tax obligations and net settlement — — — — (1,877 ) — (83,575 ) — (83,575 ) Vesting of restricted stock units — — — — 1,252 — — — — Charitable stock donation — — — — 1,075 — 41,721 — 41,721 Net loss — — — — — — — (293,623 ) (293,623 ) Balance at December 31, 2020 — $ — — $ — 391,660 $ 39 $ 2,101,773 $ (1,390,453 ) $ 711,359 See accompanying Notes to Consolidated Financial Statements. F-5 GoodRx Holdings, Inc. Consolidated Statements of Cash Flows Year Ended December 31, (in thousands) 2020 2019 2018 Cash flows from operating activities Net (loss) income $ (293,623 ) $ 66,048 $ 43,793 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization 18,430 13,573 9,806 Loss on extinguishment of debt — 4,877 2,857 Amortization of debt issuance costs 3,390 3,381 1,239 Non-cash operating lease expense 4,478 2,150 — Stock-based compensation 397,285 3,747 1,762 Change in fair value of contingent consideration 2,068 — — Deferred income taxes (10,910 ) (5,674 ) (2,433 ) Loss on abandonment and impairment of operating lease assets 961 — — Charitable stock donation 41,721 — — Changes in operating assets and liabilities, net of effect of business acquisitions Accounts receivable (16,139 ) (14,517 ) (12,843 ) Prepaid expenses and other assets (40,935 ) 102 (2,627 ) Accounts payable 2,154 515 665 Accrued expenses and other current liabilities 15,010 11,225 77 Operating lease liabilities 4,576 (2,309 ) — Other liabilities 2,875 168 2,957 Net cash provided by operating activities 131,341 83,286 45,253 Cash flows from investing activities Purchase of property and equipment (20,553 ) (1,425 ) (804 ) Acquisitions, net of cash acquired (55,793 ) (31,306 ) — Capitalized software (15,271 ) (4,324 ) (2,654 ) Net cash used in investing activities (91,617 ) (37,055 ) (3,458 ) Cash flows from financing activities Proceeds from issuance of common stock in initial public offering, net of underwriting discounts and commissions 891,793 — — Proceeds from private placement with a related party 100,000 — — Proceeds from long-term debt 28,000 154,613 901,813 Payments on long-term debt (35,029 ) (211,845 ) (294,937 ) Payment of debt issuance costs and prepayment penalty (1,306 ) (2,214 ) (25,613 ) Issuance of preferred stock, net — — 737,009 Issuance of common stock — 1,623 — Dividends paid — — (1,346,355 ) Payments of initial public offering issuance costs (4,937 ) — — Proceeds from exercise of stock options 5,343 3,042 3,349 Proceeds from early exercise of stock options 667 — — Employee taxes paid related to net share settlement of equity awards (78,714 ) — — Net cash provided by (used in) financing activities 905,817 (54,781 ) (24,734 ) Net change in cash, cash equivalents and restricted cash 945,541 (8,550 ) 17,061 Cash, cash equivalents and restricted cash Beginning of year 26,050 34,600 17,539 End of year $ 971,591 $ 26,050 $ 34,600 Supplemental disclosure of cash flow information Cash paid during the year for Income taxes $ 29,228 $ 19,400 $ 11,700 Interest 24,517 48,443 18,658 Non cash investing and financing activities Purchase of property and equipment included in accounts payable and accrued expenses and other current liabilities $ 2,100 $ — $ — Right-of-use assets obtained in exchange for new operating lease liabilities 234 29,493 — Stock-based compensation included in capitalized software development costs 2,437 385 — Capitalized software development costs in accrued expenses and other current liabilities 1,273 — — Conversion of preferred stock to common stock 737,009 — 166,777 F-6 The following table presents a reconciliation of cash, cash equivalents and restricted cash in the Company’s Consolidated Balance Sheets to the total of the same such amounts shown above: December 31, (in thousands) 2020 2019 2018 Cash and cash equivalents $ 968,691 $ 26,050 $ 34,600 Restricted cash 2,900 — — Total cash, cash equivalents and restricted cash $ 971,591 $ 26,050 $ 34,600 See accompanying Notes to Consolidated Financial Statements. F-7 GoodRx Holdings, Inc. Notes to Consolidated Financial Statements 1. Description of Business GoodRx Holdings, Inc. (the “Company”) and its subsidiaries offer information and tools to help consumers compare prices and save on their prescription drug purchases. The Company operates a price comparison platform that provides consumers with curated, geographically relevant prescription pricing, and provides access to negotiated prices through GoodRx codes that can be used to save money on prescriptions across the United States (the “prescription offering”). The services are free to consumers and the Company primarily earns revenue from its core business from Pharmacy Benefit Managers (“PBMs”) that manage formularies and prescription transactions including establishing pricing between consumers and pharmacies. The Company also offers other healthcare products and services, including telehealth services. The Company was incorporated in September 2015. On October 7, 2015, the Company acquired 100% of the outstanding shares of GoodRx, Inc. (“GoodRx”). GoodRx was initially formed in September 2011 as GoodRx, Inc., a Delaware corporation. Initial Public Offering The Company’s registration statement on Form S-1 (“IPO Registration Statement”) related to its initial public offering (“IPO”) was declared effective on September 22, 2020, and the Company’s Class A common stock began trading on the Nasdaq Global Select Market on September 23, 2020. On September 25, 2020, the Company completed its IPO of 39,807,691 shares of the Company Class A common stock, $0.0001 par value per share (the “Class A Common Stock”) at an offering price of $33.00 per share, pursuant to the Company’s IPO Registration Statement. The Company sold 28,615,034 shares, including 5,192,307 shares that were sold pursuant to the full exercise of the underwriters’ option to purchase additional shares, and certain existing stockholders sold an aggregate of 11,192,657 shares. The Company received aggregate net proceeds of $886.9 million after deducting underwriting discounts and commissions of $52.5 million and other offering expenses of $4.9 million. Immediately prior to the completion of the IPO, 126,045,531 outstanding shares of redeemable convertible preferred stock with a carrying value of $737.0 million converted into an equivalent number of shares of common stock. Immediately prior to the completion of the IPO, the Company filed an Amended and Restated Certificate of Incorporation, which authorized a total of 2,000,000,000 shares of Class A Common Stock, 1,000,000,000 shares of Class B Common Stock, $0.0001 par value per share, and 50,000,000 shares of Preferred Stock, $0.0001 par value per share (the “Preferred Stock”). Upon the filing of the Amended and Restated Certificate of Incorporation, 357,265,256 shares of the Company’s common stock then outstanding were automatically reclassified into an equivalent number of shares of the Company’s Class B Common Stock. Immediately after the reclassification and prior to the completion of the IPO, a total of 10,098,121 shares of Class B Common Stock held by certain existing shareholders were exchanged for an equivalent number of shares of Class A Common Stock pursuant to terms of certain exchange agreements. As a result, following the completion of the IPO, the Company has two classes of authorized and outstanding common stock: Class A Common Stock and Class B Common Stock. The rights of the holders of the Class A and Class B Common Stock are identical except for voting and conversion rights. The holders of the Class A Common Stock are entitled to one vote per share and the holders of the Class B Common Stock are entitled to 10 votes per share. Each share of Class B Common Stock is convertible into one share of Class A Common Stock at any time at the option of the holder and will automatically convert to Class A Common Stock upon any transfer, except for certain permitted transfers. All Class B Common Stock will convert automatically into an equivalent number of Class A Common Stock upon the earlier of (i) September 25, 2027; and (ii) the first date the aggregate number of shares of Class B Common Stock cease to represent at least 10% of the aggregate outstanding shares of common stock. F-8 On September 13, 2020, the Company entered into a stock purchase agreement with a related party, that is a n existing investor , to issue $ 100.0 million worth of shares of Class A Common Stock, with the price per share to be equal to the per share price to the public in the Company’s initial public offering of Class A Common Stock. Closing of the investment was subject to certain customary conditions, including the closing of the initial public offering of Class A common stock. Concurrent with the completion of the IPO, the Company issued 3,030,303 shares of Class A Common Stock. 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”). Principles of Consolidation The consolidated financial statements include the financial statements of GoodRx Holdings, Inc., its wholly owned subsidiaries and variable interest entities (“VIEs”) for which the Company is the primary beneficiary. Intercompany balances and transactions have been eliminated in consolidation. Results of businesses acquired are included in the Company’s consolidated financial statements from their respective dates of acquisition. Consolidation of VIEs The Company evaluates whether an entity in which it has a variable interest is considered a variable interest entity (“VIE”). VIEs are generally entities that have either a total equity investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest (i.e., ability to make significant decisions through voting rights and a right to receive the expected residual returns of the entity or an obligation to absorb the expected losses of the entity). Under the provisions of Accounting Standards Codification (“ASC”) 810, Consolidation, an entity consolidates a VIE if it is determined to be the primary beneficiary of the VIE. The primary beneficiary has both (a) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance, and (b) the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company periodically reassesses whether it is the primary beneficiary of a VIE. On April 18, 2019, the Company acquired Sappira, Inc. d.b.a. GoodRx Care (formerly known as HeyDoctor). GoodRx Care provides management and other services to Professional Service Corporations (“PSCs”), which are owned by medical professionals in accordance with certain state laws which restrict the corporate practice of medicine and require medical practitioners to own such entities. The Company determined that the PSCs are VIEs. The Company also determined that it is able to direct the activities of the PSCs that most significantly impact their economic performance and it funds and absorbs all losses of these VIEs resulting in the Company being the primary beneficiary of the PSCs. Accordingly, the Company consolidates the VIEs. Total revenue of the VIEs were less than 2% of the Company’s total revenue for the year ended December 31, 2020 and less than 1 % of the Company’s total revenue for the period from April 18, 2019 to December 31, 2019. The net results of operations of the VIEs for the years ended December 31, 2020 and 2019 were not material. The VIEs’ total assets and liabilities were each approximately 1% of the Company’s total assets and liabilities at December 31, 2020 and 2019. F-9 Segment Reporting and Geographic Information Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker manages the Company on the basis of one operating segment. During the years ended December 31, 2020, 2019 and 2018, all of the Company’s revenue was from customers located in the United States. In addition, at December 31, 2020 and 2019, all of the Company’s right-of-use assets and property and equipment was in the United States. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements, including the accompanying notes. The Company bases its estimates on historical factors, current circumstances, and the experience and judgment of management. The Company evaluates its estimates and assumptions on an ongoing basis. Actual results could differ from those estimates. Significant estimates reflected in the consolidated financial statements include revenue recognition, valuation of intangible assets, and assumptions used for purpose of determining stock-based compensation. Certain Risks and Concentrations Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash, cash equivalents and accounts receivable. The Company maintains cash deposits with multiple financial institutions in the United States which, at times, may exceed federally insured limits. Cash may be withdrawn or redeemed on demand. The Company believes that the financial institutions that hold its cash are financially sound and, accordingly, minimal credit risk exists with respect to these balances. The Company has not experienced any losses in such accounts. The Company extends credit to its customers based on an evaluation of their ability to pay amounts due under contractual arrangements and generally does not obtain or require collateral. For the year ended December 31, 2020, three customers accounted for approximately 17%, 14% and 11% of the Company’s revenue. At December 31, 2020, one customer accounted for 12% of the Company’s accounts receivable balance. For the year ended December 31, 2019, two customers accounted for approximately 24% and 23% of the Company’s revenue. At December 31, 2019, two customers accounted for 17% and 16% of the Company’s accounts receivable balance. For the year ended December 31, 2018, three customers accounted for approximately 27%, 19%, and 15% of the Company’s revenue. In March 2020, the World Health Organization declared the outbreak of the novel coronavirus disease (“COVID–19”) a pandemic. The Company’s prescription offering initially experienced a decline in activity as many consumers avoided visiting healthcare professionals and pharmacies in-person, though beginning in the second half of 2020 activity in the Company’s prescription offering improved. In addition, the Company has experienced a significant increase in demand for the telehealth offerings. The Company only commenced its telehealth offerings following the acquisition of HeyDoctor (now rebranded to GoodRx Care) in April 2019. The full extent to which the outbreak of COVID-19 will impact the Company’s business, results of operations and financial condition is still unknown and will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, the duration and spread of the outbreak, its severity, the actions to contain the virus or treat its impact, and how quickly and to what extent normal economic and operating conditions can resume. F-10 In light of the currently unknown ultimate duration and severity of COVID-19, the Company faces a greater degree of uncertainty than normal in making certain judgments and estimates needed to apply significant accounting policies. The Company assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to the Company and the unknown future impacts COVID-19 as of December 31, 2020 and through the date of this report. The accounting matters assessed included, but were not limited to, the Company’s allowance for doubtful accounts, the carrying value of the goodwill and other long-lived assets, incentive-based compensation and income taxes. As of the date of these consolidated financial statements, management is not aware of any specific event or circumstance that would require an update to estimates or judgments or a revision to the carrying value of assets or liabilities. However, these estimates and judgments may change as new events occur and additional information is obtained, which may result in changes being recognized in the Company’s consolidated financial statements in future periods. Cash, Cash Equivalents and Restricted Cash The Company considers all short-term, highly liquid investments purchased with an original maturity of three months or less at the date of purchase to be cash equivalents. Cash deposits are all in financial institutions in the United States. Cash and cash equivalents consisted primarily of U.S. Treasury Securities money market funds held with an investment bank and cash on deposit. Cash equivalents, consisting of money market funds, of $932.5 million and zero at December 31, 2020 and December 31, 2019, respectively, were classified as Level 1 of the fair value hierarchy and valued using quoted market prices in active markets. Restricted cash as of December 31, 2020 represents cash held in an escrow pursuant to terms of the Scriptcycle business combination relating to contingent consideration. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded at the amounts due from various customers (primarily PBMs), net of an allowance for doubtful accounts. The allowance for doubtful accounts is determined by management based on historical losses, specific customer circumstances, and general economic conditions. Periodically, management reviews accounts receivable and adjusts the allowance based on circumstances and charges off uncollectible receivables when all attempts to collect have failed. As of December 31, 2020 and 2019, the allowance for doubtful accounts was not material. Property and Equipment Property and equipment is stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which are five years for furniture and fixtures and three years for computer equipment. Leasehold improvements are depreciated on the straight-line basis over the shorter of the life of the asset or the remaining lease term. Expenditures for repairs and maintenance are charged to general and administrative expenses as incurred. Business Combinations The results of businesses acquired in a business combination are included in the Company’s consolidated financial statements from the date of the acquisition. Purchase accounting results in assets and liabilities of an acquired business being recorded at their estimated fair values on the acquisition date. Any excess consideration over the fair value of assets acquired and liabilities assumed is recognized as goodwill. F-11 The Company performs valuations of assets acquired and liabilities assumed for an acquisition and allocates the purchase price to its respective net tangible and intangible assets. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates including the selection of valuation methodologies, estimates of future revenue, costs, cash flows, discount rates and selection of comparable companies. For material acquisitions, the Company may engage the assistance of valuation specialists in concluding on fair value measurements of certain assets acquired or liabilities assumed in a business combination. Transaction costs associated with business combinations are expensed as incurred and are included in general and administrative expenses in the consolidated statements of operations. Goodwill Goodwill represents the excess of the consideration transferred and the amount recognized for noncontrolling interest, if any, over the fair value of the identifiable assets acquired and liabilities assumed in a business combination. The Company has one reporting unit during 2020, 2019 and 2018. The Company reviews goodwill for impairment annually in the fourth quarter and whenever events or changes in circumstances indicate the carrying amount of goodwill may not be recoverable. When testing goodwill for impairment, the Company may first perform an optional qualitative assessment. If the Company determines it is not more likely than not the reporting unit’s fair value is less than its carrying value, then no further analysis is necessary. If the Company determines that it is more likely than not that the fair value of its reporting unit is less than its carrying amount, then the quantitative impairment test will be performed. Under the quantitative impairment test, if the carrying amount of the Company’s reporting unit exceeds its fair value, the Company will recognize an impairment loss in an amount equal to that excess but limited to the total amount of goodwill. No impairments were recorded in 2020, 2019 and 2018. Intangible Assets Intangible assets reflect the value of trademarks, customer relationships, developed technology, and backlog recorded in connection with the Company’s acquisitions. Purchased intangible assets are recorded at their acquisition date fair value, less accumulated amortization. The Company determines the appropriate useful life of intangible assets by performing an analysis of expected cash flows of the acquired assets. Intangible assets are amortized over their estimated useful lives on a straight-line basis, which approximates the pattern in which the economic benefits of the assets are consumed. Capitalized Software Costs The Company accounts for its internal-use software costs, including purchased software, in accordance with ASC 350-40, Internal-Use Software . Capitalization of internal-use costs begins when the preliminary project stage is complete, management with the relevant authority authorizes and commits to funding the project, it is probable that the project will be completed, and the software will be used for the function intended. Capitalization of these costs ceases once the project is substantially complete and the software is ready for its intended purpose. Costs incurred for post-configuration training, maintenance and minor modifications or enhancements are expensed to product development and technology costs in the consolidated statements of operations as incurred. Capitalized internal-use costs are amortized on a straight-line basis over their estimated useful life of three years. Impairment of Long-Lived Assets The Company accounts for the impairment of long-lived assets in accordance with ASC 360, Impairment or Disposal of Long-Lived Assets . In accordance with ASC 360, long-lived assets to be held and used are reviewed for impairment when events or changes in circumstances indicate that their carrying value may not be recoverable. The Company performs impairment testing at the asset group level that represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. An impairment loss is recognized when estimated undiscounted future cash F-12 flows expected to result from the use of the asset and its eventual disposition are less than its carrying value. If an asset is determined to be impaired, the impairment is measured by the amount that the carrying value of the asset exceeds its fair value. The Company recognized a loss of $ 1.0 million in the abandonment and impairment of operating lease assets during the year ended December 31, 2020 related to certain office space that w as abandoned or subleased , which is included in general and administrative expenses in the consolidated statement of operation s . There was no impairment of long-lived assets identified during the year s ended December 31, 2019 and 2018 . Leases On January 1, 2019, the Company adopted ASC 842, Leases , on a modified retrospective basis, and accordingly, the 2018 consolidated financial statements continue to reflect the application of the previous accounting standard (ASC 840). ASC 842 provided a number of optional practical expedients in transition. The Company elected the “package of practical expedients,” which permitted the Company not to reassess whether a contract is or contains a lease, lease classification and initial direct costs. The Company has elected to account for lease and non-lease components as a single lease component and also elected not to record operating lease right-of-use assets and operating lease liabilities for leases with an initial term of 12 months or less. Lease payments for short-term leases are recognized as lease expense on a straight-line basis over the lease term. The Company determines if a contract is, or contains, a lease at inception. All the Company’s leases are operating leases. Leases are included in operating lease right-of-use assets, operating lease liabilities, current and operating lease liabilities, net of current portion on the accompanying consolidated balance sheets. Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term discounted using the Company’s incremental borrowing rate. Lease payments include fixed payments and variable payments based on an index or rate, if any, and are recognized as lease expense on a straight-line basis over the term of the lease. The lease term includes options to extend or terminate the lease when it is reasonably certain they will be exercised. As none of the Company’s leases provide an implicit rate, the incremental borrowing rate used is estimated based on what the Company would be required to pay for a collateralized loan over a similar term as the lease. Variable lease payments not based on a rate or index are expensed as incurred. Debt Issuance Costs Costs incurred in connection with the issuance of long-term debt are capitalized and amortized to interest expense over the contractual life of the loan using the effective-interest method. These costs are recorded as a reduction of the related long-term debt balance on the accompanying consolidated balance sheets. Costs incurred in connection with the issuance of line of credit facilities are recorded in other assets and are amortized to interest expense on a straight-line basis over the term of the line of credit facility. Income Taxes Deferred income tax assets and liabilities are determined based upon the net tax effects of the differences between the Company’s consolidated financial statements carrying amounts and the tax basis of assets and liabilities and are measured using the enacted tax rate expected to apply to taxable income in the years in which the differences are expected to be reversed. A valuation allowance is used to reduce some or all of the deferred tax assets if, based upon the weight of available evidence, it is more likely than not that those deferred tax assets will not be realized. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized. The Company recognizes interest and penalties accrued related to its uncertain tax positions in income tax benefit (expense) in the accompanying consolidated statements of operations. F-13 Revenue The Company’s revenue is primarily derived from prescription transaction fees generated when pharmacies fill prescriptions for consumers. The Company also generates other revenue from subscription, pharmaceutical manufacturer solutions and telehealth services. On January 1, 2019, the Company adopted ASC 606, Revenue from contracts with customers , on a modified retrospective basis. The adoption of ASC 606 was applied to all contracts at the date of initial application and did not have a material impact on the Company’s revenue recognition. Prior to January 1, 2019, the Company applied ASC 605, Revenue recognition, and recognized revenue when the following criteria have been met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the price is fixed and determinable; and (4) collectability is reasonably assured. Under ASC 606, the Company recognizes revenue when control of the promised good or service is transferred to the customer in an amount that reflects the consideration for which the Company is expected to be entitled to in exchange for those services. For the years ended December 31, 2020, 2019 and 2018, revenue comprises the following: Year Ended December 31, (in thousands) 2020 2019 2018 Prescription transactions revenue $ 488,257 $ 364,582 $ 242,911 Other revenue 62,443 23,642 6,611 Total revenue $ 550,700 $ 388,224 $ 249,522 Prescription Transactions Revenue Prescription transactions revenue is primarily generated from PBMs, or customers, when a prescription is filled with a GoodRx code provided through the Company’s platform. In its contracts with customers, the nature of the Company’s promise is to direct prescription volume through its platform, which may include marketing through its mobile apps, websites, and GoodRx cards. These activities are not distinct from each other and are not separate performance obligations. The Company’s performance obligation is to connect consumers with pharmacies that are contracted with the Company’s customers. The Company has no performance obligation to fill prescriptions. Contracts with PBMs provide that the Company is entitled to either a percentage of fees the PBM charges the pharmacy or a fixed amount per type of drug prescription, when a consumer uses a GoodRx code. The Company’s performance obligation is satisfied upon the completion of pharmacies filling prescriptions. The Company recognizes revenues for its estimated fee due from the customers at a point in time when a prescription is filled. The Company receives reporting from the customers of the number of prescriptions and amount of consideration to which it is entitled at a prescription level. Certain arrangements with PBMs provide that the amount of consideration the Company is entitled to is based on the volume of prescription fills each month. In addition, the amount of consideration for which the Company is entitled may be adjusted in the event that a fill is determined ineligible, or based upon other adjustments allowed under the contracts with customers. The Company estimates the amount it expects to be entitled to using the expected value method based on historical experience of the number of prescriptions filled, ineligible fills and applicable rates. The Company generally receives payment within 30 days of the month end in which the prescriptions were filled. However, portions of payments may not be received for up to five months to the extent of adjustments for ineligible fills. F-14 Other Revenue Other revenue consists of subscription revenue, pharmaceutical manufacturer solutions revenue, and telehealth revenue. Subscription revenue consists of subscriptions to the GoodRx Gold plan (the “Gold plan”) and the Kroger Savings Club powered by GoodRx (the “Kroger plan”). Under the Gold plan, subscribers purchase a monthly subscription that provides access to lower prices for prescriptions and telehealth visits. Subscribers can cancel the Gold subscription at any time. The Company recognizes revenue for the Gold plan over the subscription period. Under the Kroger plan, subscribers pay an annual upfront fee for a subscription that provides access to lower prices on prescriptions at Kroger pharmacies. At the commencement of the subscription term, subscribers pay an annual fee to the Company which the Company shares with Kroger. Kroger plan subscription fees are generally nonrefundable to the subscriber after the first 30 days unless the Company cancels the subscription, in which case the subscriber is entitled to a pro rata refund. The Company recognizes revenue for the Kroger plan over the subscription period, net of the fee shared with Kroger. The amount of deferred revenue recorded related to these plans as of December 31, 2020 and 2019 is $5.3 million and $3.2 million, respectively. Substantially all of the deferred revenue included in the balance sheet at December 31, 2019 was recognized as revenue during 2020 and the Company expects substantially all of the deferred revenue at December 31, 2020 to be recognized as revenue in 2021. Pharmaceutical manufacturers may purchase advertisements for a fixed fee that appear on the Company’s apps and websites for a specified period of time, and revenue is recognized over the term of the arrangement. Customers may also purchase advertisements where the Company charges fees on a cost-per-click basis or they may purchase advertisements placed in the Company’s direct mailers. Revenue for these arrangements is recognized at a point in time when the advertisement is clicked or when the direct mailer is shipped. The amount of deferred revenue recorded related to these services as of December 31, 2020 and 2019 is $1.5 million and $0.3 million, respectively. Deferred revenue is included in accrued expenses and other current liabilities in the consolidated balance sheets. Telehealth revenue consists of revenues generated from consumers who complete a telehealth visit with a member of the Company’s network of qualified medical professionals. Consumers pay a fee per telehealth visit and the Company recognizes the fee as revenue at a point in time when the visit is complete. Cost of Revenue Cost of revenue consists primarily of costs related to outsourced consumer support, physician costs for the Company’s telehealth offering, personnel costs, including salaries, benefits, bonuses and stock-based compensation expense, for the Company’s consumer support employees, hosting and cloud costs, merchant account fees, and processing fees. Cost of revenue excludes depreciation and amortization of software development costs, developed technology, and other hosting and data infrastructure equipment used to operate the Company’s platforms, which are included in the depreciation and amortization line item in the consolidated statements of operations. Product Development and Technology Costs related to the development of products are charged to product development and technology expense as incurred. Product development and technology expense consists primarily of personnel costs, including salaries, benefits, bonuses and stock-based compensation expense, for employees involved in product development activities, third-party services and contractors related to product development, information technology and software-related costs, and allocated overhead. F-15 Sales and Marketing Sales and marketing costs consist primarily of advertising and marketing expenses that are expensed as incurred and production costs expensed as of the first date the advertisement takes place. Advertising costs were $222.4 million, $163.7 million and $89.3 million for the years ended December 31, 2020, 2019 and 2018, respectively. The Company does not have any significant minimum advertising or media commitments, other than those disclosed in “Note 13. Commitments and Contingencies”. Sales and marketing expenses also include personnel costs, including salaries, benefits, bonuses, stock-based compensation expense and sales commissions, for sales and marketing employees, third-party services and contractors, and allocated overhead. Sales commissions relate to contracts with a duration of one year or less and are expensed as incurred. General and Administrative General and administrative costs are expensed as incurred and include personnel costs, including salaries, benefits, bonuses and stock-based compensation expense, for executive, finance, accounting, legal, and human resources functions, as well as professional fees, occupancy costs, change in fair value of contingent consideration, charitable donations, and other general overhead costs. Depreciation and Amortization The Company’s depreciation and amortization expenses include depreciation of property and equipment, and amortization of capitalized internal-use software costs and intangible assets. Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The inputs used to measure fair value are classified into the following hierarchy: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities; Level 2 Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs that are derived principally from or corroborated by observable market data by correlation or other means, or inputs other than quoted prices that are observable for the asset or liability; and Level 3 Unobservable inputs for the asset or liability based on management’s assumptions. When determining the fair value measurements for assets and liabilities which are required to be measured at fair value, the Company considers the principal or most advantageous market in which to transact and the market-based risk. Goodwill, intangible assets, and other long-lived assets are measured at fair value on a nonrecurring basis, only if impaired. The carrying amounts reported in the consolidated financial statements approximate the fair value for cash equivalents, accounts receivable, accounts payable, and accrued liabilities, due to their short-term nature. The carrying value of the Company’s debt approximates fair value based on the borrowing rate currently available to the Company for financing with similar terms and were determined to be Level 2. F-16 Stock-Based Compensation Compensation cost is allocated to cost of revenue, product development and technology, sales and marketing, and general and administrative expense in the consolidated statements of operations for stock options, restricted stock awards (“RSAs”), and restricted stock units (“RSUs”) based on the fair value of these awards at the date of grant. For awards that vest based on continued service, stock-based compensation cost is recognized on a straight-line basis over the requisite service period, which is generally the vesting period of the awards. For awards with performance vesting conditions, stock-based compensation cost is recognized on a graded vesting basis over the requisite service period when it is probable the performance condition will be achieved. The grant date fair value of stock options that contain service or performance conditions is estimated using the Black-Scholes option-pricing model and the grant date fair value of RSAs and RSUs that contain service or performance conditions is estimated based on the fair value of the Company’s common stock. For awards with market vesting conditions, the fair value is estimated using a Monte Carlo simulation model that incorporates the likelihood of achieving the market condition. Stock-based compensation cost for awards that contain market vesting conditions is recognized on a graded vesting basis over the requisite service period, even if the market condition is not satisfied. The requisite service period for awards with service, performance and market conditions is the longer of the service period, the performance period or the derived service period from the Monte Carlo simulation model. For awards that contain service, performance and market vesting conditions, the Company commences recognition of stock-based compensation cost once it is probable that the performance condition will be achieved. If the performance condition is an initial public offering or a change in control event, the performance condition is not probable of being achieved for accounting purposes until the event occurs. Once it is probable that the performance condition will be achieved, the Company recognizes stock-based compensation cost over the remaining requisite service period under a graded vesting model, with a cumulative adjustment for the portion of the service period that occurred for the period prior to the performance condition becoming probable of being achieved. Thereafter, expense is recognized even if the market condition was not or is not achieved, provided the employee continues to satisfy the service condition. To the extent that the market vesting conditions are achieved earlier than the end of the requisite service period, then stock-based compensation cost is accelerated. Forfeitures are recognized when they occur. Determining the fair value of stock-based awards requires judgment. The Black-Scholes option-pricing model is used to estimate the fair value of stock options, while the fair value of the Company’s common stock at the date of grant is used to measure the fair value of RSAs and RSUs. The assumptions used in the Black-Scholes option-pricing model requires the input of subjective assumptions and are as follows: • For periods prior to the Company’s IPO, because there was no public market for the Company’s common stock, the fair value of the common stock underlying the Company’s stock-based awards was determined by the Company’s board of directors, with input from management. The Company’s board of directors determined the common stock fair value at the stock option grant date by considering several objective and subjective factors, including the price paid for its common and preferred stock, actual and forecasted operating and financial performance, market conditions and performance of comparable publicly traded companies, developments and milestones within the Company, the rights, preferences, and privileges of its common and preferred stock, and the likelihood of achieving a liquidity event. The fair value for periods prior to the Company’s IPO was determined in accordance with applicable elements of the practice aid issued by the American Institute of Certified Public Accountants, Valuation of Privately-Held-Company Equity Securities Issued as Compensation . Subsequent to the Company’s IPO, the fair value of common stock was determined on the grant date using the closing price of the Company’s common stock. • Expected volatility is based on historical volatilities of a publicly traded peer group based on daily price observations over a period equivalent to the expected term of the stock option grants. • The expected term is based on historical and estimates of future exercise behavior. F-17 • The risk-free interest rate is based on the U.S. Treasury yield of treasury bonds with a maturity that approximates the expected term of the options. • The dividend yield is based on the Company’s current expectations of dividend payouts. The assumptions used in the Company’s Black-Scholes option-pricing model represent management’s best estimates. These estimates involve inherent uncertainties and the application of management’s judgment. If factors change and different assumptions are used, the Company’s stock-based compensation could be materially different in the future. Comprehensive (Loss) Income During the years ended December 31, 2020, 2019 and 2018, other than net (loss) income, the Company did not have any other elements of comprehensive (loss) income. Basic and Diluted (Loss) Earnings Per Share The Company has two classes of common stock, Class A and Class B. Basic and diluted (loss) earnings per share attributable to common stockholders for Class A and Class B common stock were the same because they are entitled to the same liquidation and dividend rights. The Company computes (loss) earnings per share using the two-class method required for participating securities. The two-class method requires net income to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. In periods where the Company has net losses, losses are not allocated to participating securities as they are not required to fund the losses. The Company considers redeemable convertible preferred stock to be participating securities as preferred stockholders have rights to participate in dividends with the common stockholders. Basic (loss) earnings per share is computed by dividing net (loss) income attributable to common stockholders by the weighted average number of common shares outstanding during the period. Weighted average number of common shares outstanding includes contingently issuable shares where there is no circumstance under which those shares would not be issued. The Co-Chief Executives’ Performance-Vesting Founders Awards (see “Note 15. Stock-Based Compensation”) once vested are settled in shares of common stock on the third anniversary of the applicable vesting date or, if earlier, upon a qualifying change in control event or to satisfy tax withholding requirements. At the time of vesting, these shares are contingently issuable and included in the weighted average number of common shares outstanding for basic (loss) earnings per share. The Company computes diluted (loss) earnings per share under a two-class method where income is reallocated between common stock, potential common stock and participating securities. Stock-based awards that contain vesting provisions contingent on achievement of performance or market conditions are included in the computation of diluted (loss) earnings per share, if dilutive, from the beginning of the period or date of issuance if later, if all necessary conditions to vest have been satisfied during the period. If all conditions have not been met by the end of the period, dilutive (loss) earnings per share includes the number of shares that would be issuable if the end of the period were the end of the contingency period. Potential common stock includes stock options, RSAs, and RSUs computed using the treasury stock method. For periods where the Company has net losses, diluted (loss) earnings per share is the same as basic (loss) earnings per share, because potentially dilutive shares are excluded from the computation of (loss) earnings per share as their effect is anti-dilutive. F-18 Recent Accounting Pronouncements As an “emerging growth company,” the Jumpstart Our Business Startups Act, or the JOBS Act, allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to use the adoption dates applicable to private companies. As a result, the Company’s consolidated financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective date for new or revised accounting standards that are applicable to public companies. Recently adopted accounting pronouncements In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement . This ASU eliminates, modifies and adds disclosure requirements for fair value measurements. The Company adopted this guidance on January 1, 2020, and the adoption did not have any impact to the consolidated financial statements. Recently issued accounting pronouncements - not yet adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , to require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The ASU also amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. In February 2020, the FASB issued ASU 2020-02, Financial Instruments - Credit Losses (Topic 326) and Leases (Topic 842) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842) (SEC Update), which amends the language in Subtopic 326-20 and addresses questions primarily regarding documentation and company policies. The guidance in ASU 2016-13 and ASU 2020-02 related to credit losses is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract . ASU 2018-15 requires implementation costs incurred by customers in cloud computing arrangements to be deferred over the noncancelable term of the cloud-computing arrangements plus any optional renewal periods (1) that are reasonably certain to be exercised by the customer or (2) for which exercise of the renewal option is controlled by the cloud service provider. This guidance is effective for fiscal years beginning after December 15, 2020, and interim periods within annual periods beginning after December 15, 2021. Early adoption is permitted. This guidance can be adopted either using the prospective or retrospective transition approach. The Company will adopt this standard on January 1, 2021 and apply the changes prospectively. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements, however it does not expect the adoption of this standard to have a material impact on its consolidated financial statements. In October 2018, the FASB issued ASU 2018-17, Consolidation (Topic 810): Targeted Improvements to the Related Party Guidance for Variable Interest Entities . ASU 2018-17 changes how entities evaluate decision-making fees under the variable interest entity guidance. To determine whether decision-making fees represent a variable interest, an entity considers indirect interests held through related parties under common control on a proportional basis, rather than in their entirety. This guidance is effective for fiscal years, beginning after December 15, 2020 and interim periods within fiscal years beginning after December 15, 2021, with early adoption permitted. All entities are required to apply the amendments in this ASU retrospectively with a cumulative-effect adjustment to retained earnings at the beginning of the earliest period presented. The Company will adopt this standard on January 1, 2021 and is currently evaluating the impact of this accounting standard update on its consolidated financial statements, however it does not expect the adoption of this standard to have a material impact on its consolidated financial statements. F-19 In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes . The objective of the guidance is to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and to provide more consistent application to improve the comparability of financial statements. The guidance is effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The Company is currently evaluating the impact of this ASU on its consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . The ASU provides optional guidance for a limited period of time to ease the potential burden in accounting for or recognizing the effects of reference rate reform on financial reporting. The ASU applies only to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of the reference rate reform. The amendments in this ASU were effective upon issuance and may be applied through December 31, 2022. The Company is currently evaluating the impact of the adoption of this ASU on its consolidated financial statements. 3. Business Combinations Scriptcycle, LLC On August 31, 2020, the Company acquired all of the equity interests of Scriptcycle, LLC, (“Scriptcycle”). Scriptcycle specializes in managing prescription programs and primarily partners with regional retail pharmacy chains to provide discount offerings. The purpose of the acquisition is to help expand the Company’s business capabilities, particularly with respect to its prescription offering. The aggregate purchase consideration was $58.3 million, including the estimated fair value of contingent consideration of $0.8 million. The maximum amount of contingent consideration payable is $2.9 million subject to the achievement of certain revenue thresholds through January 2021. The fair value of the contingent consideration was measured using Level 3 inputs in the fair value hierarchy. The Company estimated the fair value of the acquisition related contingent consideration using a Monte-Carlo simulation model. The Company applied a discount rate of 5.4% at the acquisition date, which captures the risk associated with the contingent consideration. The significant unobservable input used in the fair value measurement of the contingent consideration was forecasted revenue as defined in the purchase agreement. As of December 31, 2020, the Company estimated the fair value of the contingent consideration to be $2.9 million, which represents the maximum amount of contingent consideration payable, based upon its assessment of the revenue thresholds to be achieved. The change in the fair value of the contingent consideration from the acquisition date through December 31, 2020 is recorded in general and administrative expenses in the accompanying consolidated statement of operations. Goodwill associated with this acquisition totaled $24.9 million and is primarily related to the expected long-term synergies and other benefits, including the acquired assembled workforce. The acquisition was considered an acquisition of assets for tax purposes and, accordingly, goodwill is expected to be deductible for tax purposes. Identifiable intangible assets related to this acquisition totaled $28.3 million, of which $25.3 million was attributable to a customer related intangible asset, with an estimated useful life of 11 years and $3.0 million was attributable to developed technology and a tradename with useful lives ranging from 1 to 9 years. In addition, the Company acquired current assets of $5.9 million and assumed liabilities of $1.1 million. Unaudited supplemental pro forma financial information for the Scriptcycle acquisition, and the revenue and earnings of Scriptcycle from the acquisition date through December 31, 2020, have not been presented because the effects were not material to the Company’s consolidated financial statements. F-20 Sappira Inc. (d.b.a GoodRx Care , formerly d.b.a. HeyDoctor) On April 18, 2019, the Company completed its acquisition of 100% of the equity interests in San Francisco, California-based Sappira Inc. (d.b.a GoodRx Care, formerly d.b.a. as HeyDoctor), a privately-held company offering an online application for consultation with physicians. GoodRx Care can be used by patients to obtain prescriptions for various medical afflictions. The Company uses GoodRx Care ’s technology and service offerings to increase the visits to the GoodRx online platform. The total purchase consideration for the acquisition of GoodRx Care was $14.3 million in cash, of which $1.4 million was placed in escrow for potential breaches of representations and warranties. The escrow amount, net of any claims for such indemnifiable matters, was released from escrow to stockholders of GoodRx Care in October 2020. Goodwill of $9.3 million recorded in connection with this acquisition primarily relating to the expected long-term synergies and other benefits, including the acquired assembled workforce, from the acquisition. The acquisition was considered a stock acquisition for tax purposes and, accordingly, goodwill is not expected to be deductible for tax purposes. Identifiable intangible assets related to this acquisition totaled $4.2 million, of which $3.1 million was attributable to developed technology, with an estimated useful life of 4 years and $1.1 million was attributable to trademarks and backlog with useful lives ranging from 1 to 7 years. In addition, the Company acquired current assets of $2.1 million and assumed current liabilities of $0.5 million. Unaudited supplemental pro forma financial information for the GoodRx Care acquisition, and the revenue and earnings of GoodRx Care from the acquisition date through December 31, 2019, have not been presented because the effects were not material to the Company’s consolidated financial statements. FocusScript LLC On August 30, 2019, the Company completed the acquisition of certain software assets and the assembled workforce of Creve Coeur, Missouri-based FocusScript LLC (“FocusScript”). The Company uses the acquired claim routing software to service its customers. The total purchase consideration consisted of $18.7 million in cash. Goodwill of $6.5 million recorded in connection with this acquisition primarily relating to the expected long-term synergies and other benefits, including the acquired assembled workforce, from the acquisition. Goodwill is deductible for tax purposes. Identifiable intangible assets related to this acquisition totaled $12.2 million, which was attributable to developed technology with an estimated useful life of 4 years. Disclosure of unaudited supplemental pro forma financial information for the FocusScript acquisition is not practicable given the Company purchased certain assets and assembled workforce for which historical information was not available. In addition, disclosure of revenues and earnings of FocusScript from the acquisition date through December 31, 2019 is not practicable as the FocusScript acquisition has been integrated into the Company’s operations. 4. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following: December 31, (in thousands) 2020 2019 Income taxes receivable $ 28,564 $ — Prepaid expenses 17,484 5,014 Lease incentive receivable — 7,389 Total prepaid expenses and other current assets $ 46,048 $ 12,403 F-21 5. Property and Equipment, Net Property and equipment, net consisted of the following: December 31, (in thousands) 2020 2019 Computer equipment $ 2,047 $ 1,338 Furniture and fixtures 8,371 556 Leasehold improvements 14,769 1,233 Total property and equipment 25,187 3,127 Less: Accumulated depreciation (2,130 ) (1,267 ) Total property and equipment, net $ 23,057 $ 1,860 For the years ended December 31, 2020, 2019 and 2018, depreciation expense was $1.4 million, $0.7 million and $0.3 million, respectively. During the fourth quarter of 2020, $21.8 million of capitalized costs, principally comprised of furniture and fixtures and leasehold improvements related to the Company’s new office facility in Santa Monica, California were ready for their intended use and were placed into service. 6. Goodwill The following table presents changes in the carrying amount of goodwill for the years ended December 31, 2020 and 2019: Year Ended December 31, (in thousands) 2020 2019 Balance at beginning of the year $ 236,225 $ 220,420 Add: Sappira Inc. and FocusScript acquisitions — 15,805 Add: Scriptcycle acquisition 24,891 — Balance at end of the year $ 261,116 $ 236,225 7. Intangible Assets, Net The following table presents details of the Company’s intangible assets, net at December 31, 2020: December 31, 2020 ($ amounts in thousands) Useful life (years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trademarks 5-9 $ 12,511 $ (11,716 ) $ 795 Customer relationships 5-11 27,900 (3,368 ) 24,532 Developed technology 1-5 49,098 (37,506 ) 11,592 Backlog 1 700 (700 ) — $ 90,209 $ (53,290 ) $ 36,919 F-22 The following table presents details of the Company’s intangible assets, net at December 31, 2019: December 31, 2019 ($ amounts in thousands) Useful life (years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trademarks 5-7 $ 12,000 $ (9,856 ) $ 2,144 Customer relationships 5 2,600 (2,210 ) 390 Developed technology 4-5 46,598 (28,075 ) 18,523 Backlog 1 700 (490 ) 210 $ 61,898 $ (40,631 ) $ 21,267 The weighted-average remaining life of intangible assets, net was 8.0 years and 4.4 years at December 31, 2020 and 2019, respectively. For the years ended December 31, 2020, 2019 and 2018, amortization expense was $12.7 million, $11.2 million and $9.1 million, respectively. At December 31, 2020, the expected amortization of intangible assets, net for future periods is as follows: (in thousands) Year Ending December 31, 2021 7,916 2022 6,240 2023 4,681 2024 2,415 2025 2,413 2026 and thereafter 13,254 $ 36,919 8. Capitalized Software, Net The following table presents details of the Company’s capitalized software, net as follows: December 31, (in thousands) 2020 2019 Capitalized software costs $ 26,344 $ 7,363 Less: Accumulated amortization (6,544 ) (2,185 ) Total capitalized software, net $ 19,800 $ 5,178 For the years ended December 31, 2020, 2019 and 2018, amortization expense was $4.4 million, $1.7 million and $0.4 million, respectively. Amortization has not started on $5.2 million of capitalized software costs that are not yet ready for intended use as of December 31, 2020. At December 31, 2020, the expected amortization of capitalized software, net that has been placed into service for future periods is as follows: (in thousands) Year Ending December 31, 2021 $ 6,622 2022 5,272 2023 2,670 $ 14,564 F-23 9. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following: December 31, (in thousands) 2020 2019 Accrued bonus and other payroll related $ 13,607 $ 3,037 Accrued marketing 10,045 5,820 Deferred revenue 6,852 3,453 Income taxes payable — 1,349 Other accrued expenses 7,188 1,897 Total accrued expenses and other current liabilities $ 37,692 $ 15,556 Substantially all of the deferred revenue balance included in the balance sheet at December 31, 2019 was recognized as revenue during the year ended December 31, 2020. The Company expects substantially all of the deferred revenue at December 31, 2020 will be recognized as revenue within the next twelve months. 10. Leases As a result of adopting ASC 842, Leases on January 1, 2019, the Company recorded $4.8 million of operating lease right-of-use assets and $5.2 million of operating lease liabilities on the consolidated balance sheet at January 1, 2019. The difference between the operating lease right-of-use asset and lease liability at the adoption date was deferred rent. The adoption of this guidance had no material impact on the Company’s consolidated statements of operations or consolidated statements of cash flows. The Company’s leases consist of office facilities under noncancellable operating lease arrangements that expire at various dates through 2031. Certain of the Company’s facility leases contain renewal options for periods of up to 10 years, at the Company’s election. The Company has not recognized any renewal options in its estimate of the lease term as they are not reasonably certain of exercise. None of the Company’s lease agreements contain any material residual value guarantees or material restrictive covenants. For the years ended December 31, 2020, 2019 and 2018, lease expense of $7.0 million, $3.0 million and $1.9 million, respectively, is included in operating expenses in the consolidated statements of operations. The Company did not have any material variable lease costs or short-term lease expenses for the years ended December 31, 2020, 2019 and 2018. The Company's facility leases do not contain material non-lease components. Cash paid for amounts affecting the measurement of the Company’s operating lease liabilities included in cash flows from operating activities was $3.0 million (net of $5.7 million of cash collected from lease incentive receivable) and $2.5 million for the years ended December 31, 2020 and 2019, respectively. As of December 31, 2020 and 2019, the weighted average remaining lease term was 9.2 years and 9.9 years, respectively, and the weighted average discount rate was 6.0% and 5.99%, respectively. F-24 The following table presents maturities of operating lease liabilities at December 31, 2020: (in thousands) Year Ending December 31, 2021 (1) $ 4,539 2022 5,343 2023 4,498 2024 4,583 2025 4,760 2026 and thereafter 27,796 Total operating lease payments 51,519 Less: Effects of discounting (13,513 ) Present value of operating lease liabilities $ 38,006 Operating lease liabilities, current $ 4,539 Operating lease liabilities, net of current portion $ 33,467 (1) net of lease incentives of $1.6 million to be received over the next twelve months. 11. Income Taxes The components of the Company’s income tax (benefit) expense are as follows: Year Ended December 31, (in thousands) 2020 2019 2018 Current Federal $ 235 $ 20,012 $ 10,368 State 848 2,592 620 1,083 22,604 10,988 Deferred Federal (7,472 ) (4,670 ) (1,789 ) State (3,438 ) (1,004 ) (644 ) (10,910 ) (5,674 ) (2,433 ) Total income tax (benefit) expense $ (9,827 ) $ 16,930 $ 8,555 The reconciliation of the income tax (benefit) expense computed at the U.S. Federal statutory rate of 21% to the Company's income tax (benefit) expense is as follows: Year Ended December 31, (in thousands) 2020 2019 2018 Income taxes computed at Federal statutory rate $ (63,725 ) $ 17,425 $ 10,993 State income taxes (2,768 ) 988 (154 ) Stock-based compensation 609 313 (99 ) Excess tax benefits related to stock- based compensation (19,961 ) (788 ) (1,276 ) Research and development credits (3,541 ) (1,661 ) (858 ) Nondeductible officers' compensation 79,046 — — (Decrease) increase in valuation allowance (293 ) 380 — Other 806 273 (51 ) Income tax (benefit) expense $ (9,827 ) $ 16,930 $ 8,555 Effective income tax rate 3.2 % 20.4 % 16.3 % F-25 The components of the net deferred tax assets are as follows: December 31, (in thousands) 2020 2019 Deferred tax assets Other assets $ 2,303 $ 3,108 Lease liabilities 8,747 9,111 Stock-based compensation 4,422 840 Research and development credits, net of reserves 4,146 1,845 Tax credit carryforward 296 — Charitable contribution carryforward 8,403 — Goodwill 9,329 2,524 Net operating losses 215 570 Total deferred tax assets 37,861 17,998 Valuation allowance (268 ) (561 ) Deferred tax assets, net of valuation allowance 37,593 17,437 Deferred tax liabilities Other liabilities (825 ) (214 ) Lease assets (6,377 ) (9,002 ) Property and equipment (4,621 ) (335 ) Capitalized software (4,557 ) (1,072 ) Intangible assets (8,096 ) (4,607 ) Total deferred tax liabilities (24,476 ) (15,230 ) Net deferred tax assets $ 13,117 $ 2,207 The Company regularly reviews its deferred tax assets for recoverability and establishes a valuation allowance when it is more likely that some portion, or all, of the deferred tax assets will not be realized. In making the assessment, the Company is required to consider all available positive and negative evidence to determine whether, based on such evidence, it is more likely than not that some portion or all of the net deferred tax assets will not be realized in future periods. At December 31, 2020, the Company has recorded a valuation allowance of $0.3 million for certain deferred tax assets, primarily related to U.S. net operating loss carryforwards ("NOLs") generated by the Professional Service Corporations (“PSCs”) as sufficient uncertainty exists regarding the future realization of these assets. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was signed into law, featuring significant tax provisions and other measures to assist individuals and businesses impacted by the economic effects of the COVID-19 pandemic. The CARES Act increased the Section 163(j) interest expense deduction limitation from 30% to 50% of adjusted taxable income, provided for the payment deferral of certain Social Security taxes, made a technical correction allowing Qualified Improvement Property to be treated as 15-year property, and included numerous other provisions. The CARES Act increased the Company’s interest expense deduction applicable to the 2019 tax year resulting in a reduction of deferred tax assets and a corresponding reduction in income taxes payable of approximately $2.3 million during the quarter ended March 31, 2020. At December 31, 2020, the Company had U.S. NOLs of $2.9 million available to reduce future federal income taxes. An immaterial portion of these federal NOLs expire in 2037 and the remaining NOLs may be carried over indefinitely. The Company had state NOLs of $1.3 million available to reduce future state income taxes which expire in varying amounts beginning 2029. In 2020, there was a change in ownership of the PSCs. Section 382 of the Internal Revenue Code (“IRC”) limits the utilization of U.S. NOLs following a change of control. As the 2020 change in ownership in the PSCs constitutes a change of control, the Company estimates that approximately $2.2 million of its U.S. NOLs carryforward generated by the PSCs are limited by Section 382. Any adjustment to the estimated Section 382 limitation would not be material to the consolidated financial statements as a full valuation allowance has been established against the NOLs from the PSCs due to uncertainty regarding their future realization. F-26 The Company had California Competes tax credit carryforwards in the amount of $ 0.4 million available to offset future California income taxes as of December 31, 2020. Under current California law, unused California Competes tax credits may be carried forward for up to six years . At December 31, 2020, the Company also had California research and development tax credit carryforwards in the amount of $ 7.8 million to offset future California income taxes. Unused California research credits may be carried forward indefinitely. Utilization of these tax credits may be subject to an annual limitation based on changes in ownership, as defined by Section 382/383 of the IRC, as amended. At December 31, 2020, the tax years 2017 and forward are subject to examination by the IRS, and the tax years 2016 and forward are subject to examination by the various state taxing jurisdictions in which the Company is subject to tax. Currently, income tax audits are occurring in the state of New York and Illinois. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows: (in thousands) Gross unrecognized tax benefits at December 31, 2017 $ 865 Increases related to prior year tax positions 458 Increases related to current year tax positions 3,186 Gross unrecognized tax benefits at December 31, 2018 4,509 Decreases related to prior year tax positions (879 ) Increases related to current year tax positions 744 Gross unrecognized tax benefits at December 31, 2019 4,374 Increases related to prior year tax positions 126 Increases related to current year tax positions 3,327 Settlements with taxing authorities (119 ) Lapse of statute of limitations (317 ) Gross unrecognized tax benefits at December 31, 2020 $ 7,391 As of December 31, 2020, the Company had unrecognized tax benefits of $7.4 million, $6.7 million of which, if recognized, would impact its effective tax rate. The Company estimates unrecognized tax benefits will decrease by $0.5 million in 2021 due to the expiration of statute of limitations. At December 31, 2020 and 2019, accrued interest and penalties related to uncertain tax positions were $0.2 million and $0.1 million, respectively. 12. Debt The Company's debt balances at December 31, 2020 and 2019 were as follows: December 31, (in thousands) 2020 2019 Principal balance under First Lien Credit Agreement $ 681,126 $ 688,155 Less: Unamortized debt issuance costs and discounts (14,209 ) (17,233 ) $ 666,917 $ 670,922 F-27 First Lien and Second Lien In October 2018, the Company entered into a First Lien Credit Agreement (“First Lien”) and a Second Lien Credit Agreement (“Second Lien”) with various lenders, for term loans of $545 million and $200 million, respectively. The Second Lien bore interest at a rate equal to the LIBO Screen Rate plus a margin of 7.50% per annum. In November 2019, the Company entered into an amendment of the First Lien to draw an additional term loan in the amount of $155 million. The additional term loan has the same maturity date and other terms as the original $545 million term loan. The proceeds from the amendment to the First Lien and existing cash resources were used to repay the Second Lien including prepayment penalties. The Company recognized a loss on extinguishment of the Second Lien of $4.9 million from unamortized debt issuance costs and discounts and prepayment penalties. The Company incurred third-party costs related to the amendment of the First Lien of $2.9 million which were expensed as incurred in other expense, net in the consolidated statements of operations. The First Lien accrues interest at a rate per annum equal to the LIBO Screen Rate plus a variable margin based on the Company’s most recently determined Net Leverage Ratio (as defined in the First Lien Credit Agreement), ranging from 2.75% to 3.00%. The effective interest rate on the First Lien for the years ended December 31, 2020 and 2019 was 3.97% and 5.90%, respectively. The First Lien requires quarterly principal payments from March 2019 through September 2025, with any remaining unpaid principal and any accrued and unpaid interest due on the maturity date of October 10, 2025. The Company may prepay the First Lien without penalty after April 2019. The First Lien is collateralized by substantially all of the assets of the Company and 100% of the equity interest of GoodRx. As of December 31, 2020, the Company is subject to a financial covenant requiring maintenance of a Net Leverage Ratio not to exceed 8.2 to 1.0 and other nonfinancial covenants under the First Lien. Additionally, GoodRx is restricted from making dividend payments, loans or advances to the Company. At December 31, 2020, the Company was in compliance with its covenants. The following table presents details of the future principal payments under the debt agreements at December 31, 2020: (in thousands) Year Ending December 31, 2021 $ 7,029 2022 7,029 2023 7,029 2024 7,029 2025 653,010 Total principal payments $ 681,126 In 2019, the Company incurred debt issuance costs and discounts of $0.6 million relating to the amendment of the First Lien and the issuance the Second Lien. Amortization of debt issuance costs and discounts of $3.0 million, $3.3 million and $0.8 million were recognized as interest expense in the consolidated statements of operations for the years ended December 31, 2020, 2019 and 2018, respectively. F-28 Line of Credit In October 2018, the Company also obtained a line of credit for up to $40.0 million. During the year ended December 31, 2019, the term of line of credit was extended by one year expiring on October 11, 2024. The line of credit bears interest at a rate equal to the LIBO Screen Rate plus a variable margin based on the Company’s most recently determined Net Leverage Ratio (as defined in the First Lien Credit Agreement), ranging from 2.50 to 3.00% on used amounts and 0.25 to 0.50% on unused amounts. In addition, the line of credit has a fixed fronting fee of 0.125% per annum of the Company’s aggregate undrawn and disbursed but unreimbursed letters of credit. There were no borrowings against the line of credit as of December 31, 2020 and 2019. There were outstanding letters of credit issued against the line of credit for $9.1 million as of December 31, 2020 and 2019, respectively, which reduces the Company’s available borrowings under the line of credit. In 2019, the Company was required to provide a $9.0 million letter of credit for the benefit of the landlord of a new facility lease which the landlord may draw upon in the event of the Company’s default of rent payment or damages to the building. The letter of credit will decrease by $0.9 million per year commencing in 2023. In May 2020, GoodRx, Inc., the Company’s wholly owned subsidiary, as borrower, and GoodRx Intermediate Holdings, LLC, entered into an amendment to increase the amount of the line of credit by $60.0 million to a total of $100.0 million. The Company incurred lender and third-party costs of $1.3 million related to the amendment which are recorded in other assets. The Company borrowed an aggregate of $28.0 million under its line of credit during the year ended December 31, 2020, of which all had been repaid as of December 31, 2020. Regulatory authorities that oversee financial markets have announced that after the end of 2021, they would no longer compel banks currently reporting information used to set the LIBO Screen Rate to continue to make rate submissions. As a result, it is possible that beginning in 2022, the LIBO Screen Rate will no longer be available as a reference rate. Under the terms of the Company's First Lien Credit Agreement and line of credit, in the event of the discontinuance of the LIBO Screen Rate, a mutually agreed-upon alternate benchmark rate will be established to replace the LIBO Screen Rate. The Company and lenders under its First Lien Credit Agreement and line of credit shall in good faith establish an alternate benchmark rate which places the lenders and the Company in the same economic position that existed immediately prior to the discontinuation of the LIBO Screen Rate. The Company does not anticipate that the discontinuance of the LIBO Screen Rate will materially impact its liquidity or financial position. 13. Commitments and Contingencies Refer to “Note 10. Leases” and “Note 12. Debt,” for details of contractual obligations for the Company's noncancellable operating leases and principal payments under its debt agreements, respectively. Contingent Consideration The Company is subject to a contingent consideration agreement entered into in connection with its acquisition of Scriptcycle, see "Note 3. Business Combinations – Scriptcycle, LLC". Purchase Commitments Effective from July 1, 2020, the Company entered into an addendum to its agreement with a third-party, pursuant to which the Company committed to spend an aggregate of $0.6 million in marketing for each of the twelve-month period after July 1, 2020 for the contract duration of three years plus one year of auto renewal. In December 2020, the Company amended its commercial agreement with another third-party, pursuant to which the Company committed to spend an aggregate of at least $3.3 million annually between January 2021 and December 2022 on cloud hosting services. F-29 Legal Contingencies On December 18, 2020, R. Brian Terenzini, individually and on behalf of all others similarly situated, filed a class action lawsuit against the Company and certain of its executive officers in the United States District Court for the Central District of California (Case No. 2:20-cv-11444). On January 8, 2021, Bryan Kearney, individually and on behalf of all others similarly situated, also filed a class action lawsuit against the Company and certain of its executive officers in the United States District Court for the Central District of California (Case No. 2:21-cv-00175). The plaintiffs seek compensatory damages as well as interest, fees and costs. The complaints allege violations of Section 10(b) of the 1934 Exchange Act, and assert that the Company failed to disclose to investors that Amazon.com, Inc. was developing its own mobile and online prescription medication ordering and fulfillment service that would compete directly with the Company. According to the complaint, when Amazon announced its competitor service, the Company’s stock price fell, causing investor losses. Lead plaintiff applications were due February 16, 2021. Once a lead plaintiff is appointed, the Company intends to file a motion to dismiss. The Company intends to vigorously defend against these claims. The Company believes it has meritorious defenses to the claims of the plaintiff and members of the class and any liability for the alleged claims is not currently probable and a loss or range of loss, if any, is not reasonably estimable. The pending proceedings described above involve complex questions of fact and law and may require the expenditure of significant funds and the diversion of other resources to defend. The results of legal proceedings are inherently uncertain, and material adverse outcomes are possible. In addition, during the normal course of business, the Company may become subject to, and is presently involved in, legal proceedings, claims and litigation. S uch matters are subject to many uncertainties and outcomes are not predictable with assurance. Accruals for loss contingencies are recorded when a loss is probable, and the amount of such loss can be reasonably estimated. The Company does not believe that the disposition of matters that are pending or asserted will have a material effect on its consolidated financial statements. Indemnifications The Company’s amended and restated bylaws provides that it will indemnify the Company’s directors and officers to the fullest extent permitted by the Delaware General Corporation Law. Certain of the Company’s officers and directors are also a party to indemnification agreements with the Company. Pursuant to the Company’s indemnification agreements and directors’ and officers’ liability insurance, certain of the Company’s officers and directors will be indemnified and insured against the cost of defense, settlement or payment of a judgment under certain circumstances. The maximum potential amount of future payments the Company could be required to make under these indemnification provisions is indeterminable. The Company has never paid a material claim, nor has the Company been involved in litigation, with respect to these indemnification arrangements. As of December 31, 2020 and 2019, the Company has not accrued a liability for these guarantees as, the likelihood of incurring a payment obligation, if any, in connection with these guarantees is not probable or reasonably estimable. 14. Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) The Company previously issued common stock and redeemable convertible preferred stock prior to the IPO. Immediately prior to the completion of the IPO, all outstanding shares of the Company’s common stock and redeemable convertible preferred stock converted into the Company’s Class A and Class B Common Stock (see “Note 1. Description of Business”). On October 12, 2018, the Company issued 126,045,531 shares of redeemable convertible preferred stock for gross proceeds of $748.8 million. The Company incurred $11.8 million of issuance costs. Concurrent with this investment, all then existing shares of preferred stock (the “old preferred stock”) were converted to common shares. F-30 The holders of old preferred stock were entitled to receive cumulative preferential dividends, if declared, at an annual rate of 10 % of the original issue price of each share of preferred stock. In May 2018, the Company used the proceeds from its debt financing and cash on hand to pay cumulative dividends in arrears on the old preferred stock of $ 18.6 million and also to pay a special dividend to preferred and common stockholders of $ 154.4 million. In October 2018, the Company used the proceeds from the First Lien and Second Lien, debt facilities, the proceeds from the issuance of preferred stock, and cash on hand to pay cumulative dividends in arrears on the old preferred stock of $6.4 million immediately prior to their conversion to common stock and to pay special dividends to preferred and common stockholders of approximately $1,167.1 million. A summary of the significant rights and preferences of the redeemable convertible preferred stock outstanding at December 31, 2019 is as follows: Conversion Each share of preferred stock was convertible, at the option of the holder, into shares of common stock by dividing the original issue price by the conversion price, subject to adjustments for certain events as defined by the Amended Certificate of Incorporation. Each redeemable convertible preferred share would automatically be converted into common stock upon the election by the majority of investors provided in writing to the Company at the rate of 1:1. The number of shares of common stock issuable upon conversion of each share of redeemable convertible preferred stock shall be appropriately adjusted to reflect any stock dividend, stock split or other similar event affecting the number of outstanding shares of common stock. Each share of preferred stock would automatically be converted into common stock, (i) immediately prior to the closing of a Qualified IPO, (ii) upon the election of the preferred majority provided in writing to the Company, which notice may be provided at any time, or (iii) immediately at such time as the liquidation preference had been reduced to zero. A Qualified IPO was defined as a sale of any class of shares of the Company, resulting in at least $200 million of net proceeds to the Company, in which the per share price of the shares of Common Stock being offered in such public offering was at least (i) prior to October 12, 2022, 1.25x the original issue price and (ii) on or following October 12, 2022, one times the original issue price. In addition, the Company shall not redeem any portion of the preferred stock, without majority written consent of the preferred stockholders. Dividends No dividends would have accrued or been payable with respect to the preferred stock unless declared by the board of directors. In the event a dividend to common stockholders was declared, the Company must also declare and pay to holders of the preferred stock at the same time and in the same amount that the preferred stockholders would have been paid had all outstanding preferred stock been converted immediately prior to the record date for such dividend, or if no record date was fixed, the date as of which record holders of common stock were entitled to such dividends. Liquidation In the event of any liquidation, dissolution, winding-up of the Company or deemed liquidation events (as defined), the holders of the preferred stock were entitled to receive for each outstanding share an amount equal to the original issuance price per share plus all declared but unpaid dividends. The original issuance price per share was $5.94. After payment of the liquidation preferences to the preferred stock, all remaining assets were to be distributed to the common stockholders. Any proceeds remaining after payment to the holders of redeemable convertible preferred stock were to be distributed ratably to the holders of common stock. F-31 The liquidation preference provisions of the preferred stock such as a change in control were considered contingent redemption provisions as there were certain elements that were not solely within the control of the Company. Accordingly, the preferred stock was presented in the mezzanine section of the consolidated balance sheet. Voting The holders of shares of preferred stock were entitled to vote as a separate class for certain matters. Unless otherwise provided by law or in the current charter, the preferred stockholders voted together with the common stockholders as a single class, on an as converted common stock basis for matters submitted to the stockholders for a vote. Charitable Stock Donation In the fourth quarter of 2020, the Company recorded a $41.7 million charge in general and administrative expenses in the accompanying consolidated statement of operations, related to the donation of 1,075,000 shares of Class A Common Stock at fair market value to a charitable organization to fund and support the Company’s philanthropic initiatives. The charitable organization welcomes recommendations from donors regarding distributions from the donations. However, all recommendations are advisory in nature, and the charitable organization will independently determine whether recommendations it receives are consistent with their charitable purposes and fiduciary obligations. The fair value of the donated shares was measured on the date of issuance to the charitable organization using the Company’s traded stock price on that date, and was discounted by 13.0% for a discount for lack of marketability (“DLOM”) as the stock is not freely tradeable. The Company utilized the Finnerty Model to calculate the DLOM using inputs, including length of holding period, volatility and dividend yield, with volatility considered as a significant Level 3 input in the fair value hierarchy. 15. Stock-Based Compensation 2015 Equity Incentive Plan The board of directors was authorized to grant stock-based awards under the 2015 Equity Incentive Plan (the “2015 Plan”). Following the effectiveness of the 2020 Plan (as defined below), the 2015 Plan was terminated. However, any outstanding awards granted under the 2015 Plan will remain outstanding, subject to the terms of the 2015 Plan and applicable award agreement. Shares of Class A common stock subject to awards granted under the 2015 Plan that expire unexercised or are cancelled, terminated or forfeited in any manner without issuance of shares thereunder following the effective date of the 2020 Plan, have or will become available for issuance under the 2020 Plan in accordance with its terms. 2020 Incentive Award Plan In connection with the Company’s IPO in 2020, its board of directors adopted, and its stockholders approved, the 2020 Incentive Award Plan (the “2020 Plan”), which provides for the grant of stock options, including incentive stock options, or ISOs, and nonqualified stock options, or NSOs, restricted stock, dividend equivalents, RSUs, stock appreciation rights (SARs), and other stock or cash based awards to its employees, consultants and directors, and employees, consultants and directors of its subsidiaries. The board of directors or its Compensation Committee is authorized to grant stock-based awards under the 2020 Plan. An aggregate of 60.7 million shares of Class A and Class B common stock initially were available for issuance under awards granted pursuant to the 2020 Plan, which shares may be authorized but unissued shares, treasury shares or shares purchased in the open market. Shares may be issued under the 2020 Plan as either Class A or Class B common stock. Notwithstanding anything to the contrary in the 2020 Plan, no more than 300.0 million shares of common stock (either Class A or Class B common stock) may be issued pursuant to the exercise of incentive stock options under the 2020 Plan. F-32 The number of shares available for issuance under the 2020 Plan will be increased by an annual increase on the first day of each calendar year beginning January 1, 2021 and ending on and including January 1, 2030, equal to the less e r of (A) 5% of the aggregate number of shares of Class A and Class B common stock outstanding on the final day of the immediately preceding calendar year and (B) such smaller number of shares as is determined by the Company’s b oard of d irectors. At December 31, 2020, 34.4 million shares were available for issuance under the 2020 Plan. 2020 Employee Stock Purchase Plan In connection with the Company’s IPO in 2020, its board of directors adopted, and its stockholders approved, the 2020 Employee Stock Purchase Plan (ESPP). A total of 9.0 million shares of Class A common stock were initially reserved for issuance under the ESPP. In addition, the number of shares available for issuance under the ESPP will be annually increased on January 1 of each calendar year beginning in 2021 and ending in 2030, by an amount equal to the lesser of: (i) 1% of the aggregate number of shares of Class A and Class B common stock outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares as is determined by the Company’s board of directors. In no event will more than 100.0 million shares of Class A common stock be available for issuance under the ESPP. The ESPP allows eligible employees to purchase common stock of the Company, through payroll deductions, at 85% of the lower of the fair market value of Class A common stock on the first trading day of the offering period or on the applicable purchase date, which will be the final trading day of the applicable purchase period. The ESPP is intended to qualify as an employee stock purchase plan under the Internal Revenue Service (“IRS”) Code Section 423. Eligible employees may contribute up to a certain percentage set by the plan administrator of their eligible earnings toward the purchase of the stock (subject to certain IRS limitations). At December 31, 2020, 9.0 million shares were available for issuance under the ESPP. There were no employee stock purchase offerings during 2020 and accordingly no eligible employees were enrolled in the ESPP during 2020. Stock Options Stock options granted generally vest 25% of the total award on the first anniversary of the vesting commencement date, and thereafter ratably monthly over the remaining three-year period. Stock options generally have a ten-year term. Stock options granted under the 2015 Plan and 2020 Plan do not include any forfeitable or non-forfeitable dividend equivalent rights. A summary of the stock option activity is as follows, in thousands, except per share amounts and term information: Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Intrinsic Shares Price Term Value Outstanding at December 31, 2019 16,850 $ 3.82 Granted 10,019 8.78 Exercised (3,769 ) 2.87 Expired / Cancelled / Forfeited (1,572 ) 4.93 Outstanding at December 31, 2020 21,528 $ 6.22 8.1 years $ 734,604 Exercisable at December 31, 2020 9,012 $ 3.73 7.1 years $ 329,945 F-33 The weighted-average grant date fair value per share of stock options granted for the years ended December 31, 2020, 2019 and 2018 was $4.23, $1.27 and $1.17, respectively. The aggregate intrinsic value of options exercised for the years ended December 31, 2020, 2019 and 2018 was $112.7 million, $11.1 million and $11.2 million, respectively. The fair value of stock options that vested during the years ended December 31, 2020, 2019 and 2018 was $10.2 million, $2.5 million and $1.6 million, respectively. All stock options outstanding at December 31, 2020 are options to purchase shares of Class A Common Stock. The fair value of option awards issued with service and performance vesting conditions are estimated on the grant date using the Black-Scholes option pricing model. The following table summarizes the assumptions used: Year Ended December 31, 2020 2019 2018 Risk-free interest rate 0.4% - 1.4% 1.4% - 2.4% 2.7% - 2.9% Expected term 5.3 - 6.3 years 5.6 - 6.3 years 5.7 - 6.1 years Expected stock price volatility 50% - 62% 50% 60% Dividend yield — — — Fair value of common stock per share $5.94 - $33.00 $2.75 - $5.88 $1.05 - $2.75 For the years ended December 31, 2020, 2019 and 2018, the stock-based compensation expense related to stock options was $13.0 million, $2.5 million and $1.8 million, respectively. At December 31, 2020, there was $36.8 million of total unrecognized stock-based compensation cost related to stock options, excluding stock options which contain performance and market conditions described below, which is expected to be recognized over a weighted-average remaining service period of 3.0 years. In June 2020, the Company granted stock options to purchase 0.6 million shares of common stock at an exercise price of $6.84 per share that vest upon continued service and the achievement of both performance and market conditions. For stock options to purchase 0.4 million shares of common stock, the service condition is satisfied monthly over a 4-year period and for stock options to purchase 0.2 million shares of common stock the service condition is satisfied on January 1, 2022. The performance condition is satisfied upon the closing of the Company’s IPO. The market condition is satisfied upon the Company’s common stock achieving a per share price threshold in the IPO, an average trading price of the Company’s stock for a period subsequent to the IPO, or a per share price in a change in control transaction. Both the market and performance conditions were met upon the closing of the Company’s IPO. The Company estimated the grant date fair value of these awards to be $1.4 million using a Monte Carlo simulation model. The Company recognized $0.6 million of stock-based compensation expense in the year ended December 31, 2020 related to these stock options. In June 2020, the Company modified the terms of a grant to purchase 0.4 million shares of common stock. The original award that would otherwise have been cancelled upon the employee’s departure from the Company was modified to permit the former employee to only exercise the award within 30 days after the completion of a performance condition, which are the Company completing its IPO or a change in control of the Company or a declaration of dividend payment, as defined. The fair value of this stock option of $2.4 million on the modification date was recognized as stock-based compensation expense on the effective date of the Company’s IPO. F-34 Restricted Stock Awards and Restricted Stock Units A summary of the Restricted Stock Awards and Restricted Stock Unit activity is as follows: Restricted Restricted Stock Units for Class A Restricted Stock Units for Class B Weighted Average Stock Common Common Grant Date (in thousands, except per share amounts) Awards Stock Stock Fair Value Nonvested restricted stock awards or restricted stock units at December 31, 2019 1,879 — — $ 3.88 Granted — 2,800 24,633 23.56 Vested (470 ) (8 ) (16,935 ) (1) 19.26 Forfeited — (2 ) — 49.05 Nonvested restricted stock awards or restricted stock units at December 31, 2020 1,409 2,790 7,698 $ 26.74 (1) Includes 15,691 of restricted stock units vested but not yet settled related to the Performance-Vesting Founders Awards. For the year ended December 31, 2020, the fair value of RSAs and RSUs that vested was $335.4 million. The fair value of RSAs that vested during 2019 and 2018 was not material. There were no RSUs granted or outstanding during the years ended December 31, 2019 and 2018. Restricted Stock Awards The weighted-average fair value per share of RSAs granted for the year ended December 31, 2019 was $3.88. For the years ended December 31, 2020 and 2019, total stock-based compensation expense related to RSAs was $1.8 million and $1.3 million, respectively. At December 31, 2020, there was $4.2 million of total unrecognized stock-based compensation cost related to these RSAs which is expected to be recognized over the remaining service period of 2.3 years. There were no RSAs granted during the year ended December 31, 2018. Restricted Stock Units for Class A Common Stock For the year ended December 31, 2020, the Company granted RSUs for Class A Common Stock. Substantially all of the RSUs granted vest upon continued service over a four-year period. For the year ended December 31, 2020, total stock-based compensation expense related to RSUs was $9.5 million. At December 31, 2020, there was $109.0 million of total unrecognized stock-based compensation cost related to these RSUs which is expected to be recognized over the weighted average remaining service period of 3.7 years. Restricted Stock Units for Class B Common Stock On September 11, 2020, the board of directors granted RSUs covering an aggregate of 24,633,066 shares of Class B Common Stock to the Company’s Co-Chief Executive Officers, subject to the completion of the Company’s initial public offering. Each of the Co-Chief Executive Officers received (i) 8,211,022 RSUs that vest based on the achievement of stock price goals ranging from $6.07 per share to $51.28 per share, subject to continued employment through the applicable vesting date (the “Performance-Vesting Founders Awards”) and (ii) 4,105,511 RSUs that vest in equal quarterly installments over four years, subject to continued employment through the applicable vesting date (the “Time-Vesting Founders Awards”). Any Performance-Vesting Founders Awards that vest will be settled in shares of common stock on the third anniversary of the applicable vesting date or, if earlier, upon a qualifying change in control event or to satisfy tax withholding requirements. The Performance-Vesting Founders Awards and Time-Vesting Founders Awards are subject to certain vesting acceleration terms. The grant date fair value of these awards was $533.3 million. The Company used a Monte Carlo simulation model to calculate the grant date fair value of the Performance-Vesting Founders Awards and the derived service period. The F-35 Monte Carlo simulation model incorporates the likelihood of achieving the market condition and requires the input of assumptions including the estimated fair value of common stock, expected volatility, expected term, risk-free rate and dividend yield. The primary inputs used in the Monte Carlo simulation model were volatility of 55 % and estimated cost of equity of 11 %. The Company then applied a 20 % DLOM to the value of the RSUs as the issuance of the shares for these awards is deferred by three-years from the applicable vesting date, or earlier, upon a qualifying change in control or to satisfy tax withholding requirements. The Company utilized the Finnerty Model to calculate the DLOM using inputs, including length of holding period, volatility and dividend yield, with volatility considered as a significant Level 3 input in the fair value hierarchy. All the stock price goals with respect to the Performance-Vesting Founders Awards were achieved as of October 22, 2020. As a result, all 16,422,044 Performance-Vesting Founders Awards vested, resulting in recognition of approximately $ 232.1 million of stock-based compensation expense during the fourth quarter of 2020 . The grant date fair value of the Time-Vesting Founders Awards w as estimated based on the fair value of the Company's common stock on the date of grant . As the Performance-Vesting Founders Awards vested in October 2020, the Company settled 0.7 million RSUs during the fourth quarter of 2020, sufficient to satisfy FICA tax withholding obligations due in the year of vesting. The remaining 15.7 million Performance-Vesting Founders Awards shares will not be issued until three years from the vesting date or, if earlier, a change in control event, as defined in the RSU agreements governing the Founders Awards. During the year ended December 31, 2020, the Company has recognized a cumulative $373.0 million of stock-based compensation expense, with $53.2 million related to the Time-Vesting Founders Awards and $319.8 million related to the Performance-Vesting Founders Awards. At December 31, 2020, there was $160.3 million of total unrecognized stock-based compensation cost related to the Time-Vesting Founders Awards, which is expected to be recognized over the weighted average remaining service period of 2.1 years. Excess Tax Benefits The Company recognized excess tax benefits of $21.7 million, $0.9 million and $1.3 million associated with equity award exercises and vesting in its income tax benefit (expense) for the years ended December 31, 2020, 2019 and 2018, respectively. Tax Withholdings To meet the related tax withholding requirements for the year ended December 31, 2020, the Company withheld 1.8 million shares of common stock, inclusive of the settlement of 0.7 million RSUs related to the Performance-Vesting Founders Awards, which were returned to the shares reserved for future issuance under the Company’s 2020 Plan. The Company anticipates expending substantial funds to satisfy tax withholding and remittance obligations as the equity awards vest over time. Bonus Expense for Options In connection with the dividend payments made to stockholders in May 2018 and October 2018, as further described in “Note 14. Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit),” the Company paid vested option holders cash bonuses totaling $38.8 million which are included in the following components of expenses on the accompanying consolidated statement of operations for the year ended December 31, 2018 as follows: Cost of revenue $ — Product development and technology 29,189 Sales and marketing 6,878 General and administrative 2,733 $ 38,800 F-36 The payment of cash bonuses to vested option holders was not required under terms of the options or the 2015 Plan, and did not result in a modification of the stock options. 16. Basic and D iluted (Loss) Earnings Per Share The computation of (loss) earnings per share for the years ended December 31, 2020, 2019 and 2018 is as follows: Year Ended December 31, (in thousands, except per share data) 2020 2019 2018 Numerator: Net (loss) income $ (293,623 ) $ 66,048 $ 43,793 Less: Accumulated dividends on convertible preferred stock — — (12,984 ) Less: Undistributed earnings allocated to convertible preferred stock — (23,607 ) (17,014 ) Net (loss) income attributable to common stockholders - basic $ (293,623 ) $ 42,441 $ 13,795 Add: Undistributed earnings reallocated to holders of common stock — 304 431 Net (loss) income attributable to common stockholders - diluted $ (293,623 ) $ 42,745 $ 14,226 Denominator: Weighted average shares - basic 274,696 226,607 111,842 Dilutive impact of stock options, restricted stock awards and restricted stock units — 4,602 6,502 Weighted average shares - diluted 274,696 231,209 118,344 (Loss) earnings per share Basic $ (1.07 ) $ 0.19 $ 0.12 Diluted $ (1.07 ) $ 0.18 $ 0.12 The following weighted-average potentially dilutive shares were excluded from the computation of diluted net (loss) earnings per share for the periods presented because including them would have been antidilutive: Year Ended December 31, (in thousands) 2020 2019 2018 Redeemable convertible preferred stock 92,479 126,046 137,946 Stock options, restricted stock awards and restricted stock units 27,374 7,304 2,539 17. Condensed Financial Information of Parent Company GoodRx Holdings Inc. has no material assets or standalone operations other than its ownership in its consolidated subsidiaries. Under the terms of debt agreements entered into by GoodRx, a wholly-owned subsidiary of GoodRx Intermediate Holdings, LLC, which itself is a wholly-owned subsidiary of GoodRx Holdings, Inc., GoodRx is restricted from making dividend payments, loans or advances to GoodRx Intermediate Holdings, LLC and GoodRx Holdings, Inc. These restrictions have resulted in the restricted net assets (as defined in Rule 1-02 of Regulation S-X) of GoodRx, Inc. and its subsidiaries to exceed 25% of the consolidated net assets of GoodRx Holdings, Inc. and its subsidiaries. The condensed financial information is presented on a “parent-only” basis, and GoodRx Holdings Inc.’s investment in its subsidiary is stated at cost plus equity in (loss) earnings of subsidiary less distributions received from subsidiary since the date of the October 7, 2015 acquisition. GoodRx Holdings. F-37 Inc.’s share of net (loss) income of its subsidiary is included in net income using the equity method of accounting. During 2020 and 2019, GoodRx Holdings, Inc. received no dividends from its subsidiary. During 2018, GoodRx Holdings, Inc. received dividends from its subsidiary of $606.0 million. The following table presents the parent-only balance sheets of GoodRx Holdings, Inc. as of December 31, 2020 and 2019: December 31, (in thousands, except par values) 2020 2019 Assets Cash $ 5 $ 110 Other asset 57 147 Investment in subsidiary, net of distributions 711,384 — Total assets $ 711,446 $ 257 Liabilities, redeemable convertible preferred stock and stockholders' equity (deficit) Investment in subsidiary, net of distributions $ - $ 350,830 Other current liabilities 87 — Total liabilities 87 350,830 Redeemable convertible preferred stock Redeemable convertible preferred stock, $0.006 par value; zero and 130,000 shares authorized at December 31, 2020 and December 31, 2019, respectively; and zero and 126,046 shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively — 737,009 Stockholders' equity (deficit) Common stock, $0.002 par value; zero and 380,000 shares authorized at December 31, 2020 and December 31, 2019, respectively; and zero and 229,750 shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively — 460 Common stock, $0.0001 par value; Class A: 2,000,000 and zero shares authorized, 63,071 and zero shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively; and Class B: 1,000,000 and zero shares authorized, 328,589 and zero shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively 39 — Additional paid-in capital 2,101,773 8,788 Accumulated deficit (1,390,453 ) (1,096,830 ) Total stockholders' equity (deficit) 711,359 (1,087,582 ) Total liabilities, redeemable convertible preferred stock, and stockholders' equity (deficit) $ 711,446 $ 257 The following table presents the parent-only statements of operations of GoodRx Holdings, Inc. for the years ended December 31, 2020, 2019 and 2018: Year Ended December 31, (in thousands) 2020 2019 2018 Equity in (loss) earnings of subsidiary $ (293,623 ) $ 66,048 $ 43,793 Net (loss) income $ (293,623 ) $ 66,048 $ 43,793 F-38 The following table presents the parent-only statements of cash flows of GoodRx Holdings, Inc. for the years ended December 31, 2020, 2019 and 2018: Year Ended December 31, (in thousands) 2020 2019 2018 Cash flows from operating activities Net (loss) income $ (293,623 ) $ 66,048 $ 43,793 Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: Equity in loss (earnings) of subsidiary 293,623 (66,048 ) (43,793 ) Changes in assets and liabilities: Other asset 90 (147 ) — Other current liabilities 87 — — Net cash provided by (used in) operating activities 177 (147 ) — Cash flows from investing activities Distribution from subsidiary — — 605,997 Investment in subsidiary (914,434 ) (4,908 ) — Net cash (used in) provided by investing activities (914,434 ) (4,908 ) 605,997 Cash flows from financing activities Issuance of preferred stock, net — — 737,009 Proceeds from issuance of common stock in initial public offering, net of underwriting discounts and commissions 891,793 — — Proceeds from private placement with a related party 100,000 — — Payments of initial public offering issuance costs (4,937 ) — — Issuance of common stock — 1,623 — Dividends paid — — (1,346,355 ) Proceeds from exercise of stock options 5,343 3,042 3,349 Proceeds from early exercise of stock options 667 — — Employee taxes paid related to net share settlement of equity awards (78,714 ) — — Net cash provided by (used in) financing activities 914,152 4,665 (605,997 ) Net change in cash (105 ) (390 ) — Cash Beginning of year 110 500 500 End of year $ 5 $ 110 $ 500 18. Subsequent Events In March 2021, the Company’s Board of Directors granted RSUs for 0.5 million shares of Class A Common Stock to employees, which will substantially vest over a four-year period. The Company estimates the grant date fair value of these RSUs is approximately $22.8 million, which will be recognized as stock-based compensation cost, net of forfeitures that occur, over approximately four years. F-39