UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

☒ Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2025

☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _________to___________

Commission File Number: 001-42449

Health In Tech, Inc.
(Exact name of registrant as specified in its charter)

Nevada		87-3545722
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

701 S. Colorado Ave, Suite 1 Stuart, FL		34994
(Address of principal executive offices)		(Zip Code)

888-373-0333

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Class A common stock, par value $0.001 per share		HIT		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ☒ No

As of November 10, 2025, there were 45,208,808 shares of Class A common stock and 11,700,000 shares of Class B common stock, each with a par value of $0.001 per share, outstanding.

TABLE OF CONTENTS

		Page
	PART I. FINANCIAL INFORMATION
Item 1	Financial Statements (unaudited)	1
	Condensed Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024	1
	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and 2024	2
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2025 and 2024	3
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024	4
	Notes to Condensed Consolidated Financial Statements	5
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4	Controls and Procedures	37

	PART II. OTHER INFORMATION
Item 1	Legal Proceedings	38
Item 1A	Risk Factors	38
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3	Defaults Upon Senior Securities	38
Item 4	Mine Safety Disclosures	38
Item 5	Other Information	38
Item 6	Exhibits	39

Signatures		40

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This quarterly report, including, without limitation, statements under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements can be identified by the use of forward-looking terminology, including the words “believes,” “estimates,” “anticipates,” “expects,” “intends,” “plans,” “may,” “will,” “potential,” “projects,” “predicts,” “continue,” or “should,” or, in each case, their negative or other variations or comparable terminology.

We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy short-term and long-term business operations and objectives and financial needs. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions, including risks described in the section titled “Risk Factors” set forth in Part II, Item 1A of this Quarterly Report on Form 10-Q and in our other filings with the Securities and Exchange Commission (the “SEC”). It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this Quarterly Report on Form 10-Q may not occur, and actual results may differ materially and adversely from those anticipated or implied in the forward-looking statements. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

●

our financial performance;

●

our ability to obtain funding for our operations, including funding necessary to enhance our current systems as well as the development of additional functionalities of our systems and to expand our service offerings;

●

the success, cost and timing of our system offering development activities;

●

our plans and ability to establish sales, marketing and distribution infrastructure to commercialize any drug candidates for which we obtain approval;

●

our ability to attract and retain key personnel;

●

our ability to hire and retain necessary qualified employees to expand our operations;

●

our ability to attract new customers to utilize our platforms;

●

our ability to develop new and enhance products and services to attract and retain customers, and to successfully monetize them;

●

the impact of competition in our industry and innovation by our competitors;

●

risks related to cybersecurity incidents or other network disruptions;

●

risks related to the use of third-party artificial intelligence;

●

our ability to stay abreast of and comply with new or modified laws and regulations that currently apply or become applicable to our business, including with respect to the insurance services industry and data privacy requirements;

●

our ability to protect our intellectual property rights and maintain and build our brand;

●

the scope of protection we are able to establish and maintain for intellectual property rights covering our drug candidates and technology;

●

the future trading prices of our Class A common stock; and

●

potential claims relating to our intellectual property.

We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q. You should not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Except as required by law, we do not intend to update any of these forward-looking statements after the date of this Quarterly Report on Form 10-Q or to conform these statements to actual results or revised expectations.

Because some of these risks and uncertainties cannot be predicted or quantified and may be beyond our control, you should read this Quarterly Report on Form 10-Q with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially different from what we expect.

This Quarterly Report on Form 10-Q contains estimates, projections and other information concerning our industry, our business and the markets for our products and services. We obtained the industry, market and similar data set forth in this report from our own internal estimates and research and from academic and industry research, publications, surveys and studies conducted by third parties, including governmental agencies. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances that are assumed in this information. While we believe that the data we use from third parties are reliable, we have not separately verified these data. Further, while we believe our internal research is reliable, such research has not been verified by any third party. You are cautioned not to give undue weight to any such information, projections and estimates.

iii

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

Health In Tech, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

	September 30, 2025		December 31, 2024
Assets
Current assets
Cash and cash equivalents	$	8,023,613	$	7,849,248
Accounts receivable, net		868,628		1,647,103
Other receivables		3,871,106		500,252
Deferred offering costs		166,012		—
Prepaid expenses and other current assets		2,117,854		787,161
Total current assets		15,047,213		10,783,764
Non-current assets
Software		6,182,691		3,962,461
Loans receivable, net		863,996		815,995
Operating lease – right of use assets		157,122		206,269
Long-term prepaid expenses		504,822		—
Total non-current assets		7,708,631		4,984,725
Total assets	$	22,755,844	$	15,768,489

Liabilities and stockholders’ equity

Current liabilities
Accounts payable and accrued expenses	$	4,295,384	$	1,858,840
Income taxes payable		—		205,253
Operating lease liabilities – current		73,769		66,881
Other current liabilities		869,088		—
Total current liabilities		5,238,241		2,130,974
Non-current liabilities
Deferred tax liabilities		274,809		328,676
Operating lease liabilities – non-current		83,831		139,811
Total non-current liabilities		358,640		468,487
Total liabilities		5,596,881		2,599,461

Commitments and contingencies (Note 5)

Stockholders’ equity

Common stock, $0.001 par value; Class A Common stock 150,000,000 shares authorized, 44,785,771 and 42,914,870 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively*		44,785		42,915
Common stock, $0.001 par value; Class B Common stock 50,000,000 shares authorized, 11,700,000 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively*		11,700		11,700
Additional paid-in capital*		11,579,683		9,173,017
Retained earnings		5,522,795		3,941,396
Total stockholders’ equity		17,158,963		13,169,028
Total liabilities and stockholders’ equity	$	22,755,844	$	15,768,489

Shares, common stock amount and additional paid-in capital data are presented on a retroactive basis to reflect the effects of the stock split at a 1.5-for-1 ratio effected on June 4, 2024.

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

Health In Tech, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Revenues
Revenues from underwriting modeling (ICE)	$	1,389,604		$	1,528,451		$	5,832,164		$	4,952,191
Revenues from fees		7,100,489			2,930,470			19,986,762			9,634,151
SMR		7,100,489			2,250,549			19,986,762			7,379,016
HI Card		—			679,921			—			2,255,135
Total revenues		8,490,093			4,458,921			25,818,926			14,586,342

Cost of revenues		3,346,277			979,628			9,009,841			2,944,266

Gross profit	$	5,143,816		$	3,479,293		$	16,809,085		$	11,642,076

Operating expenses
Sales and marketing expenses		962,567			508,467			3,279,560			2,526,197
General and administrative expenses		3,451,907			1,813,520			10,474,125			5,629,393
Research and development expenses		235,819			718,424			1,356,149			2,180,246
Total operating expenses		4,650,293			3,040,411			15,109,834			10,335,836

Other income (expense):
Interest income		111,699			38,460			305,263			94,111
Interest expenses		—			(165,000	)		—			(495,000	)
Other income		—			157,156			118,399			157,156
Other expense		(5,000	)		(62,759	)		(5,000	)		(62,759	)
Total other income (expense), net		106,699			(32,143	)		418,662			(306,492	)

Income before income tax expense	$	600,222		$	406,739		$	2,117,913		$	999,748

Provision for income taxes		(148,046	)		(30,653	)		(536,514	)		(185,119	)

Net income	$	452,176		$	376,086		$	1,581,399		$	814,629

Net income per share*:
Basic	$	0.01		$	0.01		$	0.03		$	0.02
Diluted	$	0.01		$	0.01		$	0.03		$	0.02

Weighted average common stocks outstanding*:
Basic		56,432,407			51,769,358			55,484,860			51,769,358
Diluted		58,774,334			51,769,358			57,477,873			51,769,358

Shares and per share data are presented on a retroactive basis to reflect the effects of the stock split at a 1.5-for-1 ratio effected on June 4, 2024.

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

Health In Tech, Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

For the Three and Nine Months Ended September 30, 2025 and 2024

(Unaudited)

	Common Stock								Additional				Total
	Class A				Class B				Paid-in		Retained		Stockholders’
	Shares*		Amount*		Shares*		Amount*		Capital*		Earnings		Equity
Balance as of December 31, 2024		42,914,870	$	42,915		11,700,000	$	11,700	$	9,173,017	$	3,941,396	$	13,169,028
Stock-based compensation		58,334		58		—		—		493,113		—		493,171
Net income		—		—		—		—		—		498,592		498,592
Balance as of March 31, 2025		42,973,204	$	42,973		11,700,000	$	11,700	$	9,666,130	$	4,439,988	$	14,160,791
Stock-based compensation		1,706,460		1,706		—		—		1,630,475		—		1,632,181
Net income		—		—		—		—		—		630,631		630,631
Balance as of June 30, 2025		44,679,664	$	44,679		11,700,000	$	11,700	$	11,296,605	$	5,070,619	$	16,423,603
Stock-based compensation		106,107		106		—		—		283,078		—		283,184
Net income		—		—		—		—		—		452,176		452,176
Balance as of September 30, 2025		44,785,771	$	44,785		11,700,000	$	11,700	$	11,579,683	$	5,522,795	$	17,158,963

	Common Stock										Additional				Total
	Class A				Class B						Paid-in		Retained		Stockholders’
	Shares*		Amount*		Shares*			Amount*			Capital*		Earnings		Equity
Balance as of December 31, 2023		29,269,358	$	29,269		22,500,000		$	22,500		$	2,770,538	$	3,270,919	$	6,093,226
Net income		—		—		—			—			—		100,536		100,536
Balance as of March 31, 2024		29,269,358	$	29,269		22,500,000		$	22,500		$	2,770,538	$	3,371,455	$	6,193,762
Net income		—		—		—			—			—		338,007		338,007
Balance as of June 30, 2024		29,269,358	$	29,269		22,500,000		$	22,500		$	2,770,538	$	3,709,462	$	6,531,769
Conversion of Class B common stock to Class A common stock		10,800,000		10,800		(10,800,000	)		(10,800	)		—		—		—
Net income		—		—		—			—			—		376,086		376,086
Balance as of September 30, 2024		40,069,358	$	40,069		11,700,000		$	11,700		$	2,770,538	$	4,085,548	$	6,907,855

Shares, common stock amount and additional paid-in capital data are presented on a retroactive basis to reflect the effects of the stock split at a 1.5-for-1 ratio effected on June 4, 2024.

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

Health In Tech, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Nine Months Ended September 30,
	2025			2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	1,581,399		$	814,629
Adjustments to reconcile net income to net cash provided by operating activities:
Write-off of accounts receivable		1,901			—
Amortization expense		489,947			405,158
Provision for refund liability		2,369,088			—
Deferred tax benefits		(53,867	)		(86,992	)
Amortization of debt discount		—			495,000
Interest income		(48,001	)		(47,997	)
Stock-based compensation expense		1,493,686			—
Changes in operating assets and liabilities:
Accounts receivable		776,574			1,302,733
Other receivables		(3,370,854	)		1,166,017
Prepaid expenses and other current assets		(690,665	)		(209,841	)
Long-term prepaid expenses		(206,666	)		—
Operating lease right-of-use assets and liabilities, net		55			1,871
Accounts payable and accrued expenses		2,045,258			(1,064,527	)
Income taxes payable		(205,253	)		(68,675	)
Other current liabilities		(1,500,000	)		—
Net cash provided by operating activities		2,682,602			2,707,376

CASH FLOWS FROM INVESTING ACTIVITIES:
Development of software		(2,358,213	)		(294,634	)
Net cash used in investing activities		(2,358,213	)		(294,634	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of deferred offering costs		(150,024	)		(936,864	)
Repayments of notes payable		—			(2,145,000	)
Net cash used in financing activities		(150,024	)		(3,081,864	)

Increase (decrease) in cash and cash equivalents		174,365			(669,122	)
Cash and cash equivalents, beginning of period		7,849,248			2,416,350
Cash and cash equivalents, end of period		8,023,613			1,747,228

Supplemental disclosures of cash flow information:
Cash paid for interest	$	—		$	—
Cash paid for income taxes	$	823,323		$	340,787

Summary of noncash investing and financing activities:
Accrued deferred offering costs included in accounts payable and accrued expenses	$	55,827		$	137,325
Accrued development of software included in accounts payable and accrued expenses	$	401,964		$	126,977
Issuance of Class A common stock for future service	$	1,184,800		$	—

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

Health In Tech, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Organization

Description of Business

Health in Tech, Inc. (collectively with SMR, Hi Card, and ICE (defined below) “HIT” or the “Company”) through its subsidiaries, simplifies sales, service processes and reduces sales cycle time for third-party administrators and brokers. HIT was incorporated in November 2021 in the State of Nevada, and is based in Stuart, Florida. The Company was created with the intention of consolidating each of three standalone entities into a single organization: Stone Mountain Risk, LLC (“SMR”), Health Intelligence Card, LLC (“Hi Card”), and International Captive Exchange, LLC (“ICE”) (the “subsidiaries”).

On December 24, 2024, the Company completed its Initial Public Offering (the “IPO”) in which it issued and sold 2,300,000 shares of Class A common stock, at a public offering price of $4.00 per share. The Company received net proceeds of $8,214,000 after deducting underwriting discounts and commissions of $986,000.

The Company’s unaudited condensed consolidated financial statements include the accounts of HIT and its wholly owned subsidiaries.

2. Summary of Significant Accounting Policies

Basis of Presentation

The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial information. Certain information and note disclosures normally included in the consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in the Annual Report on Form 10-K for the year ended December 31, 2024.

The condensed consolidated balance sheet as of December 31, 2024 included herein was derived from the audited financial statements as of that date, but does not include all disclosures including notes required by GAAP.

The accompanying condensed consolidated financial statements reflect all normal recurring adjustments that are necessary to present fairly the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year ending December 31, 2025.

Health In Tech, Inc.

Notes to Condensed Consolidated Financial Statements

2. Summary of Significant Accounting Policies (cont.)

Segments

The Company’s chief operating decision maker (“CODM”), the Chief Executive Officer and executive committee, manages the Company’s business activities as a single operating and reportable segment from continuing operations at the consolidated level. Accordingly, the CODM uses consolidated net income to measure segment profit or loss, allocate resources and assess performance. Further, the CODM reviews and utilizes functional expenses (cost of revenues, sales and marketing, research and development, and general and administrative expenses) at the consolidated level to manage the Company’s operations. As of September 30, 2025 and December 31, 2024, the Company did not have a material balance of long-lived assets located outside of the United States.

Use of Estimates

The preparation of condensed financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. Significant items subject to such estimates and assumptions include, but are not limited to, accounts receivable allowance for revenue billing changes driven by headcount changes during the billable period, useful lives of software, variable consideration of revenues from underwriting modeling and stock-based compensation expense. It is at least reasonably possible that the estimates of the effect of conditions, situations or sets of circumstances that existed at the date of the condensed financial statements, which management considered in formulating its estimates, could change in the near term due to one or more future confirming events. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents consist of demand deposit and time deposits with original maturities less than three months, which are unrestricted as to withdrawal or use.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, accounts receivable and loans receivable for financial periods ended September 30, 2025 and December 31, 2024. The Company further manages its credit risk on liquid funds through diversification of investment type and credit exposures. For cash, the Company places cash deposits with large financial institutions. For accounts receivable, the credit risk is managed through the use of mitigating controls, including the use of credit checks and credit limits on customers. For loans receivable, the Company monitors the exposures and counterparty credit risk on a regular basis.

Concentration of customers

Revenues from Stop-Loss Insurance Carriers

For the three and nine months ended September 30, 2025, one stop-loss insurance carrier (“Carrier A”) individually represented greater than 10% of Company’s total revenues, accounting for 32.9% and 29.8% of total revenues, respectively. The Company began this relationship in August 2024. The amount due from Carrier A was approximately 39.6% of accounts receivable as of September 30, 2025. For the three and nine months ended September 30, 2024, a different stop-loss insurance carrier (“Carrier B”) individually represented greater than 10% of the Company’s total revenues, accounting for 33.0% and 28.3% of total revenues, respectively. The amount due from Carrier B was approximately 18.6% of accounts receivable as of September 30, 2024. While the Company is working to cooperate with more stop-loss insurance carriers, it may experience temporary service disruptions in the event the Company deems it necessary to cease use of a stop-loss insurance carrier.

Health In Tech, Inc.

Notes to Condensed Consolidated Financial Statements

2. Summary of Significant Accounting Policies (cont.)

Revenues from Small Business Employer Customers

The Company does not have significant concentrations of revenues from any of its small business employer customers. For both the three and nine months ended September 30, 2025 and 2024, no single small business employer accounted for more than 1.5% of the Company’s total revenues in the respective periods. No small business employers accounted for more than 5.0% or 2.5% of accounts receivable, net as of September 30, 2025 and 2024, respectively.

Concentration of Cost of Revenues Service Providers

For the three months ended September 30, 2025, the Company’s three primary service providers (including one data service provider, disclosed in “Concentration of Data Service Providers from Third Party Artificial Intelligence Providers”) accounted for 79.2%, 5.4% and 4.5% of the Company’s cost of revenues, respectively. For the nine months ended September 30, 2025, these three primary service providers accounted for 78.9%, 6.0% and 4.9% of the Company’s cost of revenues, respectively. As of September 30, 2025, they accounted for 74.4%, 0.0% and 0.0% of accounts payable balance, respectively. For the three months ended September 30, 2024, the Company’s three primary service providers (including two data service providers, disclosed in “Concentration of Data Service Providers from Third Party Artificial Intelligence Providers”) accounted for 60.1%, 5.4% and 5.0% of the Company’s cost of revenues, respectively. For the nine months ended September 30, 2024, these three primary service providers accounted for 68.3%, 5.3% and 5.0% of the Company’s cost of revenues, respectively. As of September 30, 2024, they accounted for 36.4%, 1.7% and 0.0% of accounts payable balance, respectively. The Company, if necessary, could utilize others as part of its service offerings with a limited impact on the Company’s operations.

Concentration of Data Service Providers from Third Party Artificial Intelligence Providers

The Company currently utilizes one third party Artificial Intelligence (“AI”) data service providers. For the three and nine months ended September 30, 2025, this provider accounted for 5.4% and 6.0% of the Company’s cost of revenues, respectively. As of September 30, 2025, this provider accounted for 0.0% of accounts payable balance. For the three months ended September 30, 2024, the Company’s two providers accounted for 5.4% and 5.0% of the Company’s cost of revenues, respectively. For the nine months ended September 30, 2024, the Company’s two providers accounted for 5.3% and 5.0% of the Company’s cost of revenues, respectively. As of September 30, 2024, these two providers accounted for 1.7% and 0.0% of accounts payable balance, respectively. The Company previously utilized these AI data services companies as the pricing in which to procure the services was more advantageous than utilizing other vendors within this sector. While the Company historically utilized these two AI data service companies, the Company, if necessary, could utilize others as part of its service offerings with a limited impact on the Company’s operations.

Leases

The Company accounts for its leases under the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) ASC 842, Leases (“ASC 842”).

The Company assesses its contracts at inception to determine whether the contract contains a lease, including evaluation of whether the contract conveys the right to control an explicitly or implicitly identified asset for a period of time. The Company recognizes right-of-use assets and lease liabilities that represent the net present value of future lease payments utilizing a discount rate corresponding to the Company’s incremental borrowing rate and amortizing over the remaining terms of the leases, which was determined to be 10% during the three and nine months ended September 30, 2025 and 2024. The Company accounts for the leases of less than twelve months as short-term leases and does not recognize right-of-use assets and corresponding lease liabilities. During the year ended December 31, 2024, the Company entered into a 12-month short-term lease agreement with a monthly fixed rent payable, commencing in December of 2024. The Company had one lease classified as short-term leases as of September 30, 2025 and December 31, 2024, respectively.

Health In Tech, Inc.

Notes to Condensed Consolidated Financial Statements

2. Summary of Significant Accounting Policies (cont.)

Accounts Receivable and Allowance for Credit Losses and for Revenue Billing Adjustments

Accounts receivable are carried at original invoice amount, less any estimate made for doubtful accounts or credit losses. The allowance for credit losses is the Company’s best estimate of the amount of expected credit losses in the Company’s existing receivables over the contractual term. The Company evaluates its exposure to credit loss on both a collective and individual basis. The Company evaluates such receivables on an individual customer basis and takes into account any relevant available information, which begins with historical credit loss experience and consideration of current and expected conditions and market trends (such as general economic conditions, other microeconomic and macroeconomic considerations, etc.) and reasonable and supportable forecasts that could impact the collectability of such receivables over the contractual term individually or in the aggregate. Changes in circumstances relating to these factors may result in the need to increase or decrease the allowance for credit losses in the future. The allowance for credit losses was $0 as of September 30, 2025 and December 31, 2024, respectively.

The Company also makes the allowance for revenue billing adjustments, under the consideration of the revenues associated with enrolled customers would have changed during the 12-month contractual term. The final reconciliation with the customers is on the 14^th month. During the year ended December 31, 2024, the Company made monthly contra revenue provision which was 0.8% of total revenues. The provision for customers ending their 12-month plan with balances of less than $10,000 as of December 31, 2024 without completion of reconciliation was $91,799. The total provision amounted to $249,285 or 1.3% of total revenues for the year ended December 31, 2024. The balance of accounts receivable allowance for revenue billing adjustments related to current year enrollment adjustment was $185,560 as of December 31, 2024. In the first nine months of 2025, the Company completed reconciliations for customer policies that ended as of December 31, 2024. The balance of accounts receivable allowance for revenue billing adjustments related to prior year enrollment adjustment was $114,012 as of September 30, 2025. Starting from January 2025, the Company’s monthly revenue provision was 1.3% of total revenues, which was based on the full review of 2024 revenue adjustments. The balance of accounts receivable allowance for revenue billing adjustments related to current year enrollment adjustment was $202,093 as of September 30, 2025. This incorporates three separate categories:

●

There is a revenue adjustment that is driven by enrollment changes. It is based upon the actual individuals enrolled in a plan throughout the term compared to the initial employees enrolled in the first month.

●

There is a revenue adjustment that is determined at the cancellation of a policy due to delayed payment. Specifically, a Carrier may cancel a plan when the customer does not remit payment in accordance with the respective agreement for a certain period of time (approximately three months). This may be adjusted if there is a slight delay in the completion and execution of required legal documents.

●

There is a revenue adjustment and change triggered by re-underwrite of stop loss insurance policy, as defined by the Carrier’s underwriting guideline.

Other Receivables

Certain small business customers elect to receive a discount on premiums payable to carriers. In return, carriers can collect and retain these customers’ positive claim fund balance amounts. The positive claim fund is maintained in a designated account specifically earmarked for claims, held by the small employer, known as “Deferred Administrative Surplus.” As the platform company, the Company tracks and processes claims for carriers. With all necessary information for collection available on our platform, the Company signed an agreement on December 28, 2023 with the third-party Roscommon Captive Management and Roscommon Insurance Company (collectively the “Carrier”), to purchase the rights, title, interest, and collection rights to fees totaling $3,100,000 in Deferred Administrative Surplus for $1,650,000, which is 53% of the total collection rights (the “2023 Purchase”). Additionally, the Company entered into a separate agreement with the Carrier on March 18, 2025, to purchase the final batch of Deferred Administrative Surplus totaling $17,408,421 for $3,481,684, which is 20% of the total collection rights (the “2025 Purchase”). This final batch includes stop-loss insurance policies unexpired as of the date of the 2025 Purchase (“active policies”), which were not present in the 2023 Purchase.

Health In Tech, Inc.

Notes to Condensed Consolidated Financial Statements

2. Summary of Significant Accounting Policies (cont.)

When entering into a stop-loss insurance policy, a small business employer can elect to purchase discounted stop-loss insurance policies premiums from the Carrier by agreeing to return any positive balance in claim fund. These claim funds are held in the name of the small business employer, and the Carrier has no claim to these funds until the policy and the policy run-out period ends, which is 18 months following commencement of the policy term (the “Policy End Date”). The “run-out period” refers to a six month period after the policy or plan has expired during which claims can still be submitted and processed. After the Policy End Date, any funds remaining in the claim fund belong to the Carrier. The Carrier will provide the small business employers with a reconciliation of what amounts are specifically owed. This is based on the amount of funds in the small business employers’ claim fund account, and the value of claims incurred during the policy and run-out period (the “Deferred Administrative Surplus”). The Deferred Administrative Surplus is owned by the Carrier and not subject to any contingencies other than the ability to collect from the small business employer.

As part of the Company’s services to the Carrier, ICE contracted with the Carrier to collect premium and process claims expense. Therefore, in its internal system, the Company can calculate the approximate amount of positive balance in the claims fund. The exact amount will be determined after full reconciliation of the claims fund after completion of the run-out period.

In the case of the 2023 Purchase, the Company only purchased the policies with related run-out periods that had lapsed and had positive claims fund balances according to the Company’s internal system. As such, the Company knows the value of the Deferred Administrative Surplus purchased. The 2025 Purchase includes both policies with related run-out periods that had lapsed and active policies. For active policies, the final Deferred Administrative Surplus cannot be determined until the Policy End Date. Following the purchase, the Deferred Administrative Surplus was assigned to the Company for collection. After the assignment, the Company performs the relevant reconciliations to demonstrate to the small business employers the amount of the Deferred Administrative Surplus now owed to the Company from the claims fund balance. The Company asks the small business owners to pay the Deferred Administrative Surplus within 30 days of the collection requests.

The key risks associated with the collection of the Deferred Administrative Surplus relate to the Company’s limited collections experience related to the Deferred Administrative Surplus at the time of purchase from the Carrier. To reduce the Company’s collection risk, the Company negotiated with the Carrier to purchase the Deferred Administrative Surplus at 53% and 20% of the estimated face value of the 2023 Purchase and 2025 Purchase, respectively. This was due to the Carrier not having the sufficient and proper headcount to spend the necessary time and effort to collect the Deferred Administrative Surplus. Moreover, the 2025 Purchase was the final batch of the Deferred Administrative Surplus. The Company would have to collect less than 53% of the Deferred Administrative Surplus balance for the 2023 Purchase to incur a loss, and less than 20% for the 2025 Purchase to incur a loss. As of September 30, 2025, for the 2023 Purchase, the Company completed reconciliations for approximately 52% of the total estimated face value ($3,100,000) of the acquired deferred administrative fund accounts, and the Company made the request to small business employers for collection. For the reconciliations that have been completed, the Company has collected 79% of the requested amount. As of September 30, 2025, for the 2025 Purchase, the Company completed reconciliations for approximately 3% of the total estimated face value ($17,408,421) of the acquired deferred administrative fund accounts, and the Company made the request to small business employers for collection. For the reconciliations that have been completed, the Company has collected 43% of the requested amount.

The purchase of the Deferred Administrative Surplus does not represent a purchase of a financial asset with credit deterioration as defined in accordance with ASC 326 — Financial Instruments, Credit Losses. Furthermore, the Company only had approximately three months of historical collection success rates at the time of entering into the 2023 Purchase contract. These collection success rates are based upon limited experience given the Company has only collected on these types of assets for a short period of time. Moreover, the historical collection success rates for the 2023 Purchase were not applicable for the 2025 Purchase at contract inception, due to the differing components of the two purchases, such as active policies in the 2025 Purchase. As such, the Company has accounted for these assets under a nonaccrual approach. The Company will continue to assess this policy as additional collection information is received and collection trends are identified. The Company recorded the consideration as other receivables as of September 30, 2025 and December 31, 2024. The Company collected $39,431 and $205,233 under the Deferred Administrative Surplus during the three and nine months ended September 30, 2025.

Health In Tech, Inc.

Notes to Condensed Consolidated Financial Statements

2. Summary of Significant Accounting Policies (cont.)

The Company separately assessed if an allowance for credit losses was necessary for this Other Receivables. Recent data indicates that its overall collection rate of Deferred Administrative Surplus has been significant. Given no major changes to the parties involved in collection, the Company assessed that the current conditions would remain in the foreseeable future and estimated that no allowance was required for receivables from Deferred Administrative Surplus as of September 30, 2025 and December 31, 2024, respectively. The Company will continue to assess its historical credit loss experience and consideration of current and expected conditions and market trends (such as general economic conditions, other microeconomic and macroeconomic considerations, etc.) and reasonable and supportable forecasts that could impact the collectability of such receivables over the contractual term individually or in the aggregate.

Loans Receivable, Net

On October 10, 2023, the Company entered into a Promissory Note Agreement with Kang Youle Limited, unsecured lending. Under this Promissory Note Agreement, the Company agreed to lend $800,000 in principal amount, which bears 8% interest per annum. The note’s maturity date is October 10, 2026. The Company has assessed this receivable for potential credit losses, noting none as of September 30, 2025 and December 31, 2024, respectively. The Company recorded this loan receivable at amortized cost on the condensed consolidated balance sheets. See Note 3.

Software Capitalization

The Company incurs certain costs associated with the development of its Hi-Card, eDIYBS systems and other systems. The Company capitalizes certain costs associated with the development of its internal-use software after the preliminary project stage is complete and until the completion of the design, coding, installation, and testing of the software has been completed. Upgrades and enhancements are capitalized if they will result in added functionality. Capitalized costs are amortized over an expected three-year period. In May of 2023, the Company determined that its eDIYBS system was ready for its intended use. In September 2025, an expansion of the eDIYBS system was also completed and placed into service. As such, the Company has entered the eDIYBS system in the post-implementation phase. The Company has amortized $217,981 and $489,947 of the capitalized costs associated with eDIYBS and other systems for the three and nine months ended September 30, 2025, respectively, and $135,584 and $405,158 for the three and nine months ended September 30, 2024, respectively. These amounts are included in the cost of revenues line item of the Company’s Condensed Consolidated Statements of Operations. The Company capitalized $881,562 and $2,710,177 of software development costs during the three and nine months ended September 30, 2025, respectively, and $67,278 and $294,634 during the three and nine months ended September 30, 2024, respectively.

Impairment of Long Lived Assets

The Company evaluates the recoverability of amortizable long-lived assets whenever events or changes in circumstances indicate the carrying value of such asset may not be recoverable. Should there be an indication of impairment, the Company tests recoverability by comparing the estimated undiscounted future cash flows expected to result from the use of the asset to the carrying amount of the asset or asset group. If the asset or asset group is determined to be impaired, any excess of the carrying value of the asset or asset group over its estimated fair value is recognized as an impairment loss. There were no impairment losses recognized on long-lived assets during the three and nine months ended September 30, 2025 and 2024.

Revenue Recognition

The objective of ASC 606 Revenue from Contracts with customers (“ASC 606”) is to establish the principles that an entity shall apply to report useful information to users of the financial statements about the nature, amount, timing, and uncertainty of revenue and cash flows arising from a contract with a customer. An entity shall recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services, as defined in ASC 606-10-10-1 and ASC 606-10-10-2.

Health In Tech, Inc.

Notes to Condensed Consolidated Financial Statements

2. Summary of Significant Accounting Policies (cont.)

This evaluation under ASC 606 follows a five-step model, including:

	Step 1:		Identify the contract(s) with a customer

	Step 2:		Identify the performance obligations in the contract

	Step 3:		Determine the transaction price

	Step 4:		Allocate the transaction price to the performance obligations in the contract

	Step 5:		Recognize revenue when (or as) the entity satisfies a performance obligation

In general, ASC 606’s core principle is to recognize revenue in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Required disclosures under ASC 606 include qualitative and quantitative information about contracts with customers and significant judgments and estimates as to the application of the 5-step revenue recognition analysis, among others.

The Company accounts for its revenue under the accounting guidance of ASC 606, Revenue from Contracts with customers (“ASC 606”). The Company’s contracts that are within the scope of ASC 606 specifically relate to the services that are associated with customers who purchase self-funded benefits plans. These plans are facilitated through a network of brokers, TPAs, MGUs, carriers, and other third-party agents.

Identification of the Performance Obligations

The Company analyzes each of the deliverables pursuant to its contracts with customers. For each of the deliverables, the Company performs a detailed analysis to determine whether the deliverables are separately identifiable. The Company notes that although the deliverables can vary from day to day, all specifically relate to one kind of service, representing one performance obligation that is provided by each of its subsidiaries (HI Card, SMR, and ICE), as further described below.

HI Card and SMR Specific Considerations

Generally, the Company’s insurance marketplace allows brokers to customize a small employer’s self-funded benefits plan and stop loss insurance policies. When licensed brokers log in to the Company’s platform, they upload an employee census representing the employee base of the small business employer, select which network they wish to use, what plan designs they want to offer to the small business employer and then quickly obtain a bindable self-funded medically underwritten stop loss quote they can provide to their small business customers. The chosen vendors provide benefit services as outlined on the platform. The fees that the Company and others charge for the service offerings within the quote are outlined and expressly agreed to by the small employer. The small employer customizes their health insurance plan and executes an annual agreement. This agreement includes a sold case breakdown (SCB) that outlines the individual stop loss insurance and benefits service offerings selected by the small employer and the cost of each, including any optional services offered by the Company or other vendors. Through this, the Company is aware of the services that the broker is offering to the small employer for the health insurance plan period, which is normally twelve (12) months. This includes each of the performance obligations provided by its subsidiaries as further outlined below. Subsequent to the execution of the initial bindable SBC with its customers, the Company may modify the health insurance plan during the plan period when a non qualified event occurs based on the definition provided by the carriers. For example, if there is a significant fluctuation or changes of enrolled employees (EEs) from the first month.

Health In Tech, Inc.

Notes to Condensed Consolidated Financial Statements

2. Summary of Significant Accounting Policies (cont.)

The Company has business relationships with licensed brokers, as licensed brokers register on the Company’s platform to select and sell benefits plans and stop loss polices to small employers as discussed above. However, there is no contractual relationship between the Company or any of its subsidiaries and the brokers. The Company’s platform provides credentialing for licensed brokers, allowing them to access its marketplace to select and sell self-funded benefits plans for the small business employer at no cost. Brokers are paid by the small businesses, with no contractual relationship between the Company and the brokers, only a credentialing process, and free access is provided.

TPAs are contracted and authorized by the small business employers to enter into service contracts with SMR and HI Card on behalf of the small business employers. ASC 606 defines a customer as a party that has contracted with an entity to obtain goods or services that are an output of the ordinary activities of the company in exchange for consideration. SMR and HI Card are not providing services to the TPAs, but instead, have contracts to collaborate with the TPAs to facilitate the administration of health benefit plans and stop-loss insurance policies to its customers, which are the small business employers. The TPA will administer the purchased health benefits plan and manage the multiple service providers associated with the health benefits plan and stop-loss insurance policy. Such service providers are listed on the bindable quotes via the bindable sold case breakdown, which outlines the individual stop loss insurance and benefits service offerings selected by the small business and the cost of each. Only the small business employer can start or terminate the relationship with SMR and HI Card. The TPA cannot start or terminate the relationship with the SMR or HI Card. As such, the Company has concluded that the TPA’s are not customers and that the small business employers are the customers of SMR and HI Card pursuant to ASC 606.

ICE Specific Considerations

ICE has contractual relationships with carriers. ICE underwrites a stop-loss insurance policy and processes claims per the respective carrier’s underwriting guideline and claims processing guideline. In these instances, the carrier is the Company’s customer.

The Company’s performance obligations related to its revenue can be summarized as follows:

Claims negotiation services: The claims negotiation services performance obligation is offered as a part of the Company’s overall marketplace service offering and is performed specifically by the Company’s HI Card subsidiary. These services require the Company to negotiate the cost and facilitate small employer’s claims negotiation process with hospitals and physician facilities on behalf of the small employer. This service is optional. Revenue related to these services are included in the “Revenues from fees” within the Condensed Consolidated Statements of Operations.

Access to medical claims data: Access to medical claims data performance obligations is offered as a part of the Company’s overall insurance marketplace offering and is performed specifically by the Company’s HI Card subsidiary. The access to medical claims data performance obligation is not required to be selected by a small employer, its customer, when selecting their health insurance plan, but it is provided as an option. Revenue related to these services are included in the “Revenues from fees” within the Condensed Consolidated Statements of Operations.

Underwriting modeling and risk services: As a part of the Company’s overall insurance marketplace, ICE provides underwriting modelling, machine learning-driven underwriting services, and risk services to its customers. Through its web-based SaaS quoting platform, eDIYBS (Enhance Do It Yourself Benefit System), brokers log in to eDIYBS, upload census, select plans and generate bindable quotes. eDIYBS medically underwrites each small employer. ICE continues to assess risks and may re-underwrite based on underwriting risk guidelines provided by carriers. Any enrollment changes in a small business can have large fluctuations during a policy period that may trigger a re-underwrite. ICE not only monitors and manages these activities but also facilitates insurance reporting. Revenue related to these services are included in the “Revenues from underwriting modeling” within the Condensed Consolidated Statements of Operations. These services are provided by ICE for carriers. Unlike the Company’s other performance obligations, the Company’s agreements for its underwriting modeling and risk performance obligations are with stop loss carriers. Under these agreements, the Company develops and maintains all underwriting models, designs risk criteria, assesses the risk to underwrite a policy, monitors claims activities, provides reinsurance reporting, and provides monthly reinsurance filings. The purpose of these services is to ensure that the stop loss carrier is assuming an appropriate amount of risk when taking on a new insurance policy, and further that the premiums being charged are appropriate based upon the population of the new insurance policy (age, demographic, etc.).

Health In Tech, Inc.

Notes to Condensed Consolidated Financial Statements

2. Summary of Significant Accounting Policies (cont.)

Program and platform management services: As a part of the Company’s overall insurance marketplace, SMR is a program manager specializing in customized self-funded benefits programs for small businesses. SMR’s expertise in health benefits enables the Company to analyze, review and select vendors that have sufficient experience, which is an essential component of a health plan that is constantly evolving with its small business employers based on factors such as employee headcount and a specific employee’s geographic location. SMR will then design health plans, select networks, manage vendors, and ultimately construct the benefits plans for the small business employers. Licensed brokers log in to the marketplace to select and sell self-funded benefits plans to small businesses. The Company throughout the contract period is actively working with the TPA to assist administration of the plan specifically due to headcount changes. SMR also serves as the total program manager coordinate between the Carrier, the TPA, the Broker, and the small business employer, the Company’s customer. The Company’s service offerings encompass reference-based pricing, group insurance captives, community health plans, and association health programs. This service is performed for small employers to ensure that they have access to a customized health benefits program. Throughout the term of the policy, SMR is ensuring all covered employees meet the requirements and guidelines of carriers to ensure such employees of the small business employer remain covered under the respective insurance policy. The Company accounts for these services under ASC 606-10-25-14(b) as a series of distinct services that are substantially the same per enrolled employee and have the same pattern of transfer as the delivery of the specified services is satisfied over time, and each service is substantially the same and has the same measure of progress. Revenue related to these services are included in the “Revenues from fees” within the Condensed Consolidated Statements of Operations.

Each of the services above allows for the customers to simultaneously receive and consume the benefits of the Company’s performance as it performs. Program services provided by SMR and underwriting activities provided by ICE (including eDIYBS) are interdependent, as they cannot function effectively without being combined. Services provided by HI Card are optional add-on to the Company’s services, and it cannot be offered on a standalone basis. Brokers are not obligated to utilize HI Card services for small employers.

As such, the Company has determined that it is appropriate to recognize revenue over a period of the defined contractual term. The Company has determined that the pattern of transfer control to the customers are commensurate with its right to invoice given the fact that at the end of each reporting period ended December 31, all performance obligations of the Company have been satisfied and provided to the Company’s customers, and as such, the Company records its revenue based on the sold policy enrollment, which is provided by the third-party administrator upon the execution of a policy and enrollment outlines the total breakdown of the fees remitted by the third-party administrator.

Payments required throughout the duration of the policy start once a policy has become effective, and are subsequently due on policy effective date of the month through the duration of the policy. Given the Company’s policy terms, there are no performance obligations that remain unperformed at the end of each reporting period.

Disaggregation of Revenue

A summary of the Company’s disaggregated revenues is as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Revenues:
Revenues from underwriting modeling (ICE)	$	2,802,949			1,528,451		$	8,201,252			4,952,191
Revenues from fees		7,122,602			2,933,681			20,239,596			9,581,186
SMR		7,122,602			2,253,760			20,239,596			7,326,051
HI Card		—			679,921			—			2,255,135
Subtotal		9,925,551			4,462,132			28,440,848			14,533,377
Contra revenue for billing adjustments		(22,113	)		(3,211	)		(252,834	)		52,965
Contra revenue for refund liability		(1,413,345	)		—			(2,369,088	)		—
Total revenues	$	8,490,093			4,458,921		$	25,818,926			14,586,342

Health In Tech, Inc.

Notes to Condensed Consolidated Financial Statements

2. Summary of Significant Accounting Policies (cont.)

Variable Consideration

With the exception of one carrier, the Company does not have variable consideration that would require constraint from the transaction price of its contracts with customers as the Company receives monthly payments either based on a fixed percentage of the monthly premiums paid by the carrier, or a fixed dollar amount based on the end users serviced during a given month.

For one particular carrier, the Company has an agreement that includes an unprecedented clause allowing for a potential adjustment to the Company’s underwriting modeling revenue, based on calculations to be provided by the carrier at the end of the reconciliation stage (the “Adjustment”). The agreement period consists of three stages: (i) the policy in-effect stage, covering the first 12 months from each policy effective date month (August 2023 to May 2025); (ii) the run-out stage, a six month period from the end of the policy term, covering the 13th to 18th months from each policy effective date month (August 2024 to November 2025); and (iii) the reconciliation stage, covering the 19th to 24th months from each policy effective date month (February 2025 to May 2026). The agreement covers stop-loss policies with 11 consecutive policy effective date months, and each policy is subject to all three stages. The Adjustment is assessed based on the carrier’s portfolio performance calculated at the end of the reconciliation stage in May 2026. This Adjustment represents variable consideration under ASC 606.

For the three and nine months ended September 30, 2024, all policies were in the policy in-effect stage. The Company did not make internal assessments of the Adjustment, as 50% to 70% of claims expenses are typically submitted during the run-out stage. The Company concluded that it was probable that there was no significant Adjustment for the period.

In February 2025, the stop-loss policies with the first effective date month ended their run-out stage and entered the reconciliation stage. The Company commenced internal assessments by policy effective date month and began including the Adjustment in the transaction price. This decision was based on updated information from the first stop-loss policies that had completed their six-month run-out stage. The Company has reasonable data to make preliminary estimates of the Adjustment by policy effective date month in lieu of the carrier’s calculation at portfolio level.

For the three and nine months ended September 30, 2025, the Company estimated contra revenue of $1,413,345 and $2,369,088, respectively, related to the Adjustment. These amounts reduced revenue from underwriting modeling services provided to the carrier. As of September 30, 2025, a refund liability of $869,088 related to the Adjustment was recorded in other current liabilities. No such liability existed as of December 31, 2024. The final amount is expected to be finalized upon the carrier’s calculation and verification in May 2026. The Company will update its estimate quarterly to reflect ongoing changes in circumstances until finalization.

Contract Assets and Contract Liabilities

Contract assets represent the Company’s right to consideration in exchange for goods or services that the entity has transferred to a customer when that right is conditioned on something other than the passage of time. Contract liabilities represent the Company’s obligation to transfer goods or services to a customer for which the entity has received consideration. As of September 30, 2025 and December 31, 2024, the Company did not have contract assets or liabilities.

Costs to Obtain a Contract

Under ASC 340-40, Other Assets and Deferred Costs — Contracts with Customers (“ASC 340”) incremental costs of obtaining a contract, such as sales commissions and bonus programs afforded to brokers, are capitalized if they are expected to be recovered. The Company elected the practical expedient under ASC 340 to expense the costs to obtain a contract as incurred when the expected amortization period is one year or less. As of September 30, 2025 and December 31, 2024, there were no such capitalized costs. The Company expensed $0 and $(229,998), during the three months ended September 30, 2025 and 2024, respectively, and $0 during the nine months ended September 30, 2025 and 2024, respectively, related to the Company’s broker bonus program as the expected amortization period of these costs was expected to be less than one year. These costs have been included in sales and marketing expenses on the Company’s Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and 2024.

Significant Financing Components

The Company elected the practical expedient that allows the Company to not assess a contract for a significant financing component if the period between the customer’s payment and the transfer of the goods or services is one year or less. There was no significant financing components during the three and nine months ended September 30, 2025 and 2024, respectively.

Cost of Revenues

The Company’s cost of revenues primarily consists of infrastructure costs to operate its platform such as hosting fees and fees paid to various third-party partners for access to their technology, services and amortization expenses of the Company’s capitalized internal-use software related to its platform.

Health In Tech, Inc.

Notes to Condensed Consolidated Financial Statements

2. Summary of Significant Accounting Policies (cont.)

Stock-Based Compensation Expense

The Company’s share-based compensation program grant awards include stock options, restricted stock awards (“RSAs”) and unrestricted stocks to officers, employees, directors and non-employees. The fair value of stock options granted in July 2023 and August 2024 was determined using the Binomial option-pricing model. The fair value of RSAs granted before the IPO was based on the fair value of the Company’s common stock on the date of the grant, using the DCF method and back-solve method, respectively. The fair value of unrestricted and restricted stocks granted after the IPO is based on the closing market price on the date of the grant.

The Company grants stock options and RSAs that are subject to either service or service and performance-based vesting conditions. Compensation expense for awards to officers, employees and directors with service-based vesting conditions is recognized using the straight-line method over the requisite service period, which is generally the vesting period of the respective award. Forfeitures are estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from those estimates. The Company uses historical data to estimate awards’ forfeitures and records stock-based compensation expense only for those awards that are expected to vest. Compensation expense for awards to non-employees with service-based vesting conditions is recognized in the same manner as if the Company had paid cash in exchange for services, which is generally over the vesting period of the award. Should the Company terminate any of its consulting agreements, the unvested options and RSAs underlying the agreements would be cancelled. Compensation expense for awards to officers, employees, directors and non-employees with service and performance-based vesting conditions is recognized based on the grant-date fair value over the requisite service period on a straight-line basis to the extent achievement of the performance condition is probable. The Company reassesses the probability of achieving the performance condition at each reporting date and begins recognizing expense only when it is probable that the condition will be met.

The Company’s expected stock price volatility assumption is based on the volatility of comparable public companies. The expected term of a stock option granted to employees and directors (including non-employee directors) is based on the average of the contractual term (generally 5 years) and the vesting period. For non-employee options, the expected term is the contractual term. The risk-free interest rate is based on the yield of U.S. Treasury securities consistent with the life of the option. The expected dividend yield was set to zero as the Company does not pay dividends on its common stock and there was no expectation of doing so as of the respective grant dates.

Net Income Per Share

The Company computes earnings per share using the two-class method. The two-class method of computing Net Income Per Share (“EPS”) is an earnings allocation formula that determines EPS for common stock and any participating securities according to dividends declared and participation rights in undistributed earnings. The Company has three classes of participating securities, common stock (Class A and Class B) and Series A Convertible Preferred Stock. The Series A Convertible Preferred Stock has the same rights and preferences as the Company’s common stock, other than being convertible into shares of Class A Common Stock on a 1-for-1 ratio. Under the two-class method, the Series A Convertible Preferred Stock is considered a separate class of stock for EPS purposes. During periods of loss, there is no allocation required under the two-class method due to there being no distributed earnings for the period coupled with the fact that the Company’s Series A Convertible Preferred Stock do not contain a contractual right to absorb losses. Thus, all undistributed losses should be allocated entirely to the Company’s outstanding Class A and Class B Common Stock.

Health In Tech, Inc.

Notes to Condensed Consolidated Financial Statements

2. Summary of Significant Accounting Policies (cont.)

EPS is computed by dividing the sum of distributed and undistributed earnings for each class of stock by the weighted average number of shares outstanding for each class of stock for each period presented in the Company’s Condensed Consolidated Statements of Operations. In applying the two-class method, undistributed earnings are allocated to common stock.

Diluted net income per share includes the potential dilutive effect of common stock equivalents as if such securities were converted or exercised during the period, when the effect is dilutive, including unvested RSAs and outstanding stock options. For the purpose of computing diluted net income per share, RSAs and options with a performance-based vesting condition are considered contingently issuable, and such contingent shares are included in the denominator for computing diluted net income per share only once the performance condition is met, and only to the extent such RSAs and options are dilutive. In the periods presented, income and losses are allocated to the participating security only if the security has not only the right to participate in earnings, but also a contractual obligation to share in the Company’s losses.

The following table sets forth the computation of basic and diluted net income per share of common stock for the three and nine months ended September 30, 2025 and 2024:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Net income	$	452,176	$	376,086	$	1,581,399	$	814,629
Weighted average shares outstanding*
Basic		56,432,407		51,769,358		55,484,860		51,769,358
Total dilutive effect of outstanding equity awards		2,341,927		—		1,993,013		—
Diluted		58,774,334		51,769,358		57,477,873		51,769,358
Net income per share*
Basic	$	0.01	$	0.01	$	0.03	$	0.02
Diluted	$	0.01	$	0.01	$	0.03	$	0.02

The following outstanding stock awards were not considered in the computation of diluted net income per share attributable to holders of common stock as they had antidilutive effects for the three and nine months ended September 30, 2025 and 2024:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Restricted stock awards		82,000		—		82,000		—

Shares and per share data are presented on a retroactive basis to reflect the effects of the stock split at a 1.5-for-1 ratio effected on June 4, 2024.

Recently Issued Accounting Standards Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The purpose of this guidance is to enhance the transparency and usefulness of income tax disclosures and provide comprehensive income tax information, particularly in relation to rate reconciliation and income taxes paid in the U.S. and foreign jurisdictions. This standard will be applicable for the Company’s Annual Report on Form 10-K for the year ending December 31, 2025 and annual periods thereafter. Currently, the Company is assessing the potential impact of this guidance on its consolidated financial statement disclosures.

Health In Tech, Inc.

Notes to Condensed Consolidated Financial Statements

2. Summary of Significant Accounting Policies (cont.)

In November 2024, the FASB issued ASU 2024-03 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This standard calls for enhanced disclosures about components of expense captions on the face of the income statement. This standard will be effective for fiscal years beginning after December 15, 2026, with the option to apply it retrospectively. Early adoption is allowed. Currently, the Company is assessing the potential impact of this guidance on its condensed consolidated financial statement disclosures.

In September 2025, the FASB issued ASU 2025-06 Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which amends certain aspects of the accounting for and disclosure of software costs under ASC 350-40. The new standard is effective for annual periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is allowed. The new standard may be applied prospectively, retrospectively, or via a modified prospective transition method. Currently, the Company is assessing the potential impact of this guidance on its condensed consolidated financial statement disclosures.

3. Loans Receivable, Net

On October 10, 2023, the Company entered into a Promissory Note Agreement with Kang Youle Limited, unsecured lending. Under this Promissory Note Agreement, the Company agreed to lend $800,000 in principal amount, which bears 8% interest per annum. The note’s maturity date is October 10, 2026. As of September 30, 2025 and December 31, 2024, the outstanding principal amount was $800,000. The Company accrued interest that is due and receivable in the amount of $63,996 and $15,995 as of September 30, 2025 and December 31, 2024, respectively. This amount is included within “Loans receivable, net” on the condensed consolidated balance sheets.

Although not part of HIT’s core business, the Company will strategically invest its assets in a manner to maximize risk-adjusted return and promote shareholder wealth. The Company provided the promissory note to Kang Youle Limited, an independent third party with access to a network of insurance sectors internationally.

4. Stockholders’ Equity

On June 4, 2024, the Company effected a 1.5-for-1 stock split of the common stock. All share, restricted stock, stock options and per share information throughout this quarterly report has been retroactively adjusted to reflect the stock split. The shares of common stock retain a par value of $0.001 per share.

On August 9, 2024, two holders of the Company’s Class B Common Stock converted 10,800,000 shares of Class B Common Stock on a one to one basis into Class A Common Stock.

On December 24, 2024, the Company completed its IPO in which it issued and sold 2,300,000 shares of Class A Common Stock, at a public offering price of $4.00 per share. The Company received net proceeds of $8,214,000 after deducting underwriting discounts and commissions of $986,000.

The RSAs granted to employees under the Company’s 2022 Equity Incentive Plan all contain a vesting condition that is associated with a successful IPO, with certain of these awards having vesting conditions that further require a certain duration of services from the grantee, or for the Company to meet certain performance metrics in order to vest. In connection with the IPO, the Company issued an aggregate of 545,512 shares of Class A Common Stock, par value $0.001 per share, to settle fully vested RSAs in December 2024. During the three and nine months ended September 30, 2025, the Company issued an aggregate of 18,027 and 485,194 shares of Class A Common Stock, respectively, par value $0.001 per share, to settle fully vested RSAs with vesting conditions based on service duration (see Note 7).

On March 25, 2025, the Company granted 14,000 shares of Class A Common Stock to the new executive officer, with a total fair value of $10,780 based on the closing market price on the grant date. The shares were fully vested as of the grant date, resulting in full recognition of the related compensation expense during the three months ended March 31, 2025.

On March 25, 2025, the Company granted 24,000 shares of Class A Common Stock to third-party American Trust Investment Services, Inc. in exchange for its 12-month consulting services commencing in March 2025. The total fair value of the shares was $15,734 determined based on the closing market price on March 21, 2025, as specified in the service agreement. The shares were fully vested as of the grant date, and related service expense is being recognized over the 12-month service period, with a portion recognized during the three and nine months ended September 30, 2025.

On May 9, 2025, the Company granted 1,250,000 shares of Class A Common Stock to third-party Forza Business Development, LLC, in exchange for its non-terminable 24-month consulting services commencing in May 2025. The total fair value was $1,022,250 based on the closing market price on the grant date. The shares were fully vested as of the grant date, and related service expense is being recognized over the 24-month service period, with a portion recognized during the three and nine months ended September 30, 2025.

The Company issues stock-based awards to its officers, employees, directors, consultants and advisers in the form of restricted stock awards under the 2024 Equity Incentive Plan, all of which have the potential to increase the issued and outstanding shares of common stock in the future (see Note 7).

Health In Tech, Inc.

Notes to Condensed Consolidated Financial Statements

4. Stockholders’ Equity (cont.)

As of September 30, 2025 and December 31, 2024, 44,785,771 and 42,914,870 shares of Class A Common Stock were issued and outstanding, respectively. As of September 30, 2025 and December 31, 2024, 11,700,000 shares of Class B Common Stock were issued and outstanding, respectively.

Holders of Class B Common Stock are entitled to ten votes per share with holders of Class A Common Stock are entitled to one vote per share. Both classes of Common Stock will vote collectively with the holders of Series A Convertible Preferred stock.

Holders of Class A and Class B Common Stock are entitled to dividends when, and if, declared at the discretion of the Company.

5. Commitments and Contingencies

Legal Proceedings

From time to time, the Company is party to various litigation matters incidental to the conduct of its business. The Company is not presently party to any legal proceedings the resolution of which it believes would have a material adverse effect on its business, prospects, financial condition, liquidity, results of operation, cash flows or capital levels.

Leases

The Company entered into a five-year lease for its corporate headquarters in Stuart, Florida, commencing in November of 2022. The Company’s real estate lease also includes executory costs such as common area maintenance (non-lease component) and real estate taxes (not considered a component of the Company’s lease). As a practical expedient permitted under ASC 842, the Company has elected to account for the lease and non-lease components as a single lease component. For the three and nine months ended September 30, 2025 and 2024, the rent-related expenses for this lease were $20,812 and $62,436, respectively. During the year ended December 31, 2024, the Company entered into a 12-month short-term lease agreement with fixed rent payable monthly, commencing in December of 2024.

The Company’s office lease is classified as an operating lease. At the inception date of the office lease, the Company recorded a right-of-use asset of $330,554 in operating lease right-of-use asset, as well as an operating lease liability of $324,021. This lease liability represented the net present value of future lease payments for the lease utilizing a discount rate of 10%, which corresponded to the Company’s incremental borrowing rate.

During the three and nine months ended September 30, 2025, the Company made cash payments of $20,794 and $ $62,381 for amounts included in the measurement of lease liabilities, respectively.

The following table reconciles the undiscounted lease liabilities to the total lease liabilities recognized on the Condensed Consolidated Balance Sheet as of September 30, 2025:

2025		21,417
2026		86,312
2027		66,180
Total undiscounted lease liabilities	$	173,909
Less effects of discounting		(16,309	)
Total lease liabilities	$	157,600

The remaining lease term was 2.1 years and 2.8 years as of September 30, 2025 and December 31, 2024, respectively.

The discount rate used to determine the operating lease liability was 10% as of September 30, 2025 and of December 31, 2024.

Health In Tech, Inc.

Notes to Condensed Consolidated Financial Statements

6. Income Taxes

During the three months ended September 30, 2025 and 2024, the Company incurred $148,046 and $30,653 income tax expense, respectively. During the nine months ended September 30, 2025 and 2024, the Company incurred $536,514 and $185,119 income tax expense, respectively.

The Company’s income tax provision consists of the following for the three and nine months ended September 30, 2025 and 2024:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2025		2024			2025			2024
Federal & State
Current	$	135,366		58,329		$	590,381			272,111
Deferred		12,680		(27,676	)		(53,867	)		(86,992	)
Income tax provision	$	148,046		30,653		$	536,514			185,119

The Company’s net deferred tax assets and liabilities consisted of the following as of September 30, 2025 and December 31, 2024:

	September 30,			December 31,
	2025			2024
Deferred tax assets:
Stock-based compensation		169,495			47,585
Valuation allowance		—			—
Total deferred tax assets, net of valuation allowance	$	169,495		$	47,585

Deferred tax liabilities:
Research & Development credits		(444,304	)		(376,261	)
Total Deferred Tax Liabilities	$	(444,304	)	$	(376,261	)

Total net deferred tax liabilities:	$	(274,809	)	$	(328,676	)

As of September 30, 2025 and December 31, 2024, the Company had no U.S. federal net operating loss carryforwards.

The income tax expense recognized in each period differs from the amount of income tax determined by applying the U.S. federal income tax rate to pretax income for the three and nine months ended September 30, 2025 and 2024 due to the following:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Statutory federal income tax rate		21.00	%		21.00	%		21.00	%		21.00	%
State taxes (net of federal benefit)		3.62			2.76			4.08			3.20
Permanent difference		0.05			—			0.25			(6.13	)
Tax account true up		—			(16.72	)		—			—
Other		—			0.50			—			0.45
Effective tax rate		24.67	%		7.54	%		25.33	%		18.52	%

The Company’s effective tax rate for the three months ended September 30, 2025 was 24.67%, which differs from the U.S. federal statutory rate of 21%, primarily due to state taxes, net of federal benefit and permanent difference.

The Company’s effective tax rate for the nine months ended September 30, 2025 was 25.33%, which differs from the U.S. federal statutory rate of 21%, primarily due to state taxes, net of federal benefit and permanent difference.

Health In Tech, Inc.

Notes to Condensed Consolidated Financial Statements

7. Stock-Based Compensation

2022 Equity Incentive Plan

On December 21, 2022, the Company adopted and approved the Health in Tech Equity Incentive Plan (the “2022 Plan”), which provides for the issuance of 4,501,683 shares of our Class A Common Stock for purposes of attracting, retaining, and motivating key employees, directors, and consultants. The 2022 Plan provides for the grant of incentive stock options, nonqualified stock options, restricted stock and restricted stock units. Upon the consummation of the Company’s initial public offering on December 24, 2024, the 2024 Equity Incentive Plan (the “2024 Plan”) went into effect. The terms of the 2022 Plan continue to govern the 1,145,182 shares of restricted stock and 2,320,505 options outstanding in the plan as of September 30, 2025 and December 31, 2024. There are no shares reserved for future issuance in the 2022 Plan.

2024 Equity Incentive Plan

On December 24, 2024, the Company adopted and approved the 2024 Plan. The 2024 Plan is a comprehensive incentive compensation plan under which the Company can grant 7,677,849 shares of equity-based and other incentive awards to officers, employees, directors, consultants and advisers. On October 3, 2025, the Company’s stockholders approved an amendment to the 2024 Plan to (i) increase the total number of shares of Class A common stock authorized for issuance pursuant to awards granted thereunder from 7,677,849 shares to 10,677,849 shares and (ii) to include the issuance of up to 2,000,000 shares of Class B common stock, and options convertible into Class B common stock to executive officers of the Company. The purpose of the 2024 Plan is to help the Company attract, motivate and retain such persons with awards under the 2024 Plan and thereby enhance shareholder value. The 2024 Plan provides for the grant of stock options, stock appreciation rights, performance share awards, performance unit awards, distribution equivalent right awards, restricted stock awards, restricted stock unit awards and unrestricted stock awards. Under the 2024 Plan, 1,288,000 shares of unrestricted stock awards and 1,293,554 shares of restricted stock awards were granted as of September 30, 2025, and no awards were granted as of December 31, 2024.

During the year ended December 31, 2022, the Company issued 361,650 RSAs (355,650 restricted stock awards remaining as of December 31, 2023 due to employee termination) under the 2022 Plan, which have a five-year contractual term. These RSAs vest upon a successful initial public offering. Additionally, on July 1, 2023, the Company issued 631,532 RSAs and 2,220,505 stock options under the 2022 Plan. During the year ended December 31, 2024, the Company issued 177,500 RSAs and 100,000 stock options under the 2022 Plan. These share-based awards all contain a vesting condition that is associated with a successful initial public offering, with certain of these awards having vesting conditions that further require a certain duration of services from the grantee, or for the Company to meet certain performance metrics in order to vest.

Given that all of the Company’s share-based compensation have a vesting condition that requires the Company to complete a successful IPO, the Company started to recognize the stock-based compensation expense upon the completion of its IPO on December 24, 2024.

The majority of the RSAs granted under the 2024 Plan have service-based vesting conditions and vest over a period from one to two years. Some RSAs granted under the 2024 Plan are subject to both service and performance-based vesting conditions. These awards vest upon the achievement of specified metrics. Depending on the award, these metrics are either measured over a concurrent service period, or act as a prerequisite that must be met to initiate a subsequent 12-month service-based vesting schedule, with the awards vesting in equal monthly installments. The assessment for this prerequisite may occur within a fixed period or be indefinite. Compensation expense for awards with service and performance-based vesting conditions is recognized based on the grant-date fair value over the requisite service period on a straight-line basis to the extent achievement of the performance condition is probable. As of each reporting date, the Company estimates the probability that specified performance criteria will be met and does not recognize compensation expense until it is probable that the performance-based vesting condition will be achieved.

Restricted Stock Awards

The table below identifies the RSAs activity under the 2022 Plan and 2024 Plan for the relevant periods presented:

	Numbers of RSAs			Weighted Average Fair Value Per RSA
Unvested as of December 31, 2024		599,670		$	0.94
Granted		1,293,554			1.38
Vested		(582,901	)		1.07
Canceled/Forfeited		(24,338	)		2.06
Unvested as of September 30, 2025		1,285,985		$	1.30

Health In Tech, Inc.

Notes to Condensed Consolidated Financial Statements

7. Stock-Based Compensation (cont.)

As of September 30, 2025, there was $302,266 of unrecognized compensation cost, adjusted for estimated forfeitures based on historical data, related to non-vested service-based RSAs. The RSAs are expected to be recognized over a weighted-average remaining requisite service period of 0.5 years, using the straight-line method. The total fair value of the RSAs vested was $173,089 and $0 during the nine months ended September 30, 2025 and 2024, respectively. The weighted-average grant-date fair value per share of RSAs granted was $0.79. No service-based RSAs were granted during the nine months ended September 30, 2024.

As of September 30, 2025, there was $341,380 of unrecognized compensation cost, adjusted for estimated forfeitures based on historical data, related to non-vested service and performance-based RSAs that were considered probable of achievement. The RSAs are expected to be recognized over a weighted-average remaining requisite service period of 0.7 years, using the straight-line method. The total fair value of the RSAs vested was $452,204 and $0 during the nine months ended September 30, 2025 and 2024, respectively. As of September 30, 2025, there was $757,568 of unrecognized compensation expense related to non-vested service and performance-based RSAs that were considered not probable of achievement. The weighted-average grant-date fair value per share of RSAs granted was $2.88 and $1.36 during the nine months ended September 30, 2025 and 2024, respectively.

Options

The table below identifies the stock options activity under the 2022 Plan for the relevant periods presented:

	Outstanding stock options			Weighted average exercise price		Weighted average remaining contractual life (years)		Aggregate intrinsic value
Balance as of December 31, 2024		2,320,505		$	0.76		3.5	$	10,669,746
Granted		—
Exercised		—
Canceled/Forfeited		(123,558	)		0.71
Balance as of September 30, 2025		2,196,947		$	0.76		2.8	$	5,383,368
Vested as of September 30, 2025		1,930,837		$	0.77		2.8	$	4,718,093
Vested and expected to vest as of September 30, 2025		2,196,629		$	0.76		2.8	$	5,382,573

The intrinsic value of a stock option is calculated as the difference between the per share exercise price of the underlying stock option award and the closing stock price on the last trading day in fiscal quarter. There were no stock options granted or exercised during the nine months ended September 30, 2025 and 2024. The total fair value of options vested during the nine months ended September 30, 2025 and 2024 was $500,091 and $0, respectively.

As of September 30, 2025, there was $83,343 of unrecognized compensation cost, adjusted for estimated forfeitures based on historical data, related to non-vested service and performance-based stock options, which is expected to be recognized over a weighted-average remaining requisite service period of 0.7 years, using the straight-line method.

8. Subsequent Events

On October 8, 2025, the Company granted an aggregate of 17,190 shares of RSAs to its three independent directors under the 2024 Plan, with a grant of 5,730 shares of RSAs to each independent director. These awards shall vest in full on the first quarterly anniversary of the grant date, subject to the director’s continued service through such vesting date.

On October 24, 2025, the Company issued 33,000 shares of Class A Common Stock upon the exercise of vested options by a former employee at an exercise price of $0.71 per share, marking the first exercise of stock options under the 2022 Plan.

On October 31, 2025, the Company appointed Michael Clarkson as Chief Information & Security Officer, effective as of November 1, 2025. In connection with his appointment, on November 5, 2025, the Company granted Mr. Clarkson 8,000 shares of RSAs under the 2024 Plan. These awards shall vest in equal monthly installments over a twelve-month period, commencing from November 1, 2025, subject to his continued service through each applicable vesting date.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion of our financial condition and results of operations in conjunction with our condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the Securities and Exchange Commission. In addition to our historical condensed consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Quarterly Report on Form 10-Q, particularly in Part II, Item 1A, “Risk Factors.”

Overview

Health in Tech (“HIT”) is an insurance technology platform company, which offers a marketplace that aims to improve processes in the healthcare industry through vertical integration, process simplification, and automation. By removing friction and complexities, we streamline the underwriting, sales and service process for insurance companies, licensed brokers, and TPAs.

Marketplace: We are a health insurance marketplace where insurance companies can list various stop-loss policy options for self-funded benefits plans. Licensed brokers registered on our platform can log in, upload certain required information, select policy plans, obtain a bindable quote and sell them to small businesses. In most cases, our technology enables us to medically underwrite insurance policies and produce bindable quotes within about two minutes, allowing us to deliver an integrated and seamless sales cycle.

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

Accessibility and Savings: We make self-funded benefits plans and stop loss insurance accessible online for small businesses. We aim to deliver meaningful cost savings for low-risk, small employers with comparatively healthy employees through a digital medical underwriting process. We seek to deliver time savings for employers, brokers, TPAs, and carriers, by leveraging both external and internally developed technology.

As of September 30, 2025, we had clients in 42 states, with our services and platforms actively utilized by 579 brokers, 12 Third-Party Administrators (TPAs), and 258 additional third-party agencies. Our stop loss insurance policies for self-funded benefits plans were sold to 910 business clients with 25,248 employees. Notably, in the first nine months of 2025, we achieved 77% year-over-year revenue growth compared to the same period in 2024, while maintaining healthy profitability.

We currently generate most of our revenue from service fees and underwriting fees, that are associated with customers who purchase self-funded benefits plans and stop loss insurance. These plans are facilitated through a network of brokers, TPAs, MGUs, carriers, and other third-party agents. These agencies either directly engage our services or provide valuable client referrals.

Recent Developments

Partnerships and Collaborations

eDIYBS Upgrade: Expanded HIT’s Enhanced Do-It-Yourself Benefit System to serve 150+ employee groups. This upgrade significantly increases HIT’s addressable market and accelerates large-group underwriting from months to about 2 weeks, extending the same speed and scalability that transformed small-business underwriting into the mid- and large-employer market. It marks a major step forward in how health plans are designed, quoted, and delivered at scale.

AlphaTON Capital: Signed a non-binding strategic Letter of Intent to co-develop HITChain, a blockchain-powered claims platform built on The Open Network (TON). The partnership positions HIT at the forefront of decentralized claims infrastructure, targeting efficiency gains in the $300B+ U.S. claims market.

2026 Davos Summit: Announced to host HIT’s first Independent InsurTech Summit during the World Economic Forum week in Davos. The event will convene global leaders across insurance, healthcare, and technology. The first panel, “AI and Institutional Resistance - CEOs Driving Change in Legacy Sectors,” will feature TIME CEO Jessica Sibley and HIT CEO Tim Johnson. Additional panels will be announced in the coming months, highlighting HIT’s expanding influence in shaping global industry dialogue.

SIIA 2025 Conference: Showcased upgraded eDIYBS to thousands of industry leaders. The event expanded broker engagement and reinforced HIT’s reputation as a leader in AI-powered self-funding solutions, demonstrating real-time quoting capabilities and platform flexibility.

Key Factors Affecting our Performance

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

While we generate our revenue primarily from small employers and insurance carriers, we currently derive substantially all of our business through brokers, TPAs, and other third-party agents who provide referrals. As a result, the size of our network is critical to our success. We have experienced significant network growth since we commenced operations, and we believe we have the opportunity to continue to grow our network by providing superior innovation in automation, great client experience, competitive pricing, access to quality providers, and competitive insurance coverage relative to other insurers in the same geographic and insurance markets.

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

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

Our ability to accurately perform underwriting procedures

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

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

Our ability to continue invest in technology and innovation

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

Seasonality

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

Key Financial and Operating Performance Metrics

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

Number of Enrolled Employees (EEs) Medical Health Plan Billed

Our primary customer base consists of small business with 5 to 150 employees, and we have expanded to include medium-sized enterprises with more than 150 employees. Our service fee is billed to such business customers on a per enrolled employee (EE) per month (PEPM) basis, which ranges from $2 to $35 depending on selected services – and generates underwriting revenue as a percentage of the monthly premium paid on a PEPM basis. Accordingly, we use the number of EEs as a key indicator of our market penetration and growth, as compared to simply tracking the total number of our business customers, which can vary depending on the number of employees (and their family) enrolled at the business customer. The number of EEs is an employment-based count, and not only would include a single employee, but also an employee’s family (spouse and/or children), if the family is also insured on the plan.

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

Nine months ended

September 30,

Period-to-Period
Change

2025

2024

EEs

Percentage

Number of EEs billed (End of period)

25,248

17,594

7,654

As of September 30, 2025, the number of enrolled employees reached 25,248, representing a 44% increase from 17,594 in the same period of 2024. This growth reflects strong market demand and the expanded adoption of our self-funded health plan solutions facilitated by continued channel expansion through brokers, TPAs, and agencies.

Adjusted EBITDA

Adjusted EBITDA represents our net income before net interest expense, taxes, and depreciation and amortization expense, adjusted to eliminate stock-based compensation expense. Adjusted EBITDA is not a measure calculated in accordance with United States Generally Accepted Accounting Principles, or GAAP. Please refer to “Results of Operations” in this item for a discussion of the limitations of adjusted EBITDA and reconciliations of adjusted EBITDA to net income, the most comparable GAAP measurements, respectively, for the three and nine months ended September 30, 2025 and 2024. We exclude certain non-recurring or non-cash items when calculating Adjusted EBITDA, and we believe this approach provides a more meaningful measure by offering a clearer view of our underlying operational performance.

Components of Operating Results

Revenues

While we generate our revenue primarily from small employers and insurance carriers, we grow our business primarily from offering solutions that streamline sales processes, enhance service delivery, and reduce the sales cycle duration for TPAs, MGUs, and Brokers. We offer our services through our three subsidiaries. Program services provided by SMR and MGU activities provided by ICE (including eDIYBS) are interdependent, as they cannot function effectively without being combined. Services provided by HI Card is an optional add-on to our other services, and it cannot be offered on a standalone basis. Brokers that utilize the program services on behalf of the small employer provided by SMR and MGU activities provided by ICE, are not obligated to utilize our HI Card service. Currently ICE does not offer underwriting services as a standalone service. In the future, we may consider offering it as a standalone service.

(i)

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

(ii)

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

(iii)

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

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

	Three Months Ended September 30,										Nine Months Ended September 30,
	2025		% of revenue			2024		% of revenue			2025		% of revenue			2024		% of revenue
Revenues
Revenues from underwriting modeling (ICE)	$	1,389,604		16.4	%	$	1,528,451		34.3	%	$	5,832,164		22.6	%	$	4,952,191		34.0	%
Revenues from fees		7,100,489		83.6	%		2,930,470		65.7	%		19,986,762		77.4	%		9,634,151		66.0	%
SMR		7,100,489		83.6	%		2,250,549		50.5	%		19,986,762		77.4	%		7,379,016		50.5	%
HI Card		—		—	%		679,921		15.2	%		—		—	%		2,255,135		15.5	%
Total revenues		8,490,093		100.0	%		4,458,921		100.0	%		25,818,926		100.0	%		14,586,342		100.0	%

Cost of revenues

Cost of revenues primarily consists of infrastructure costs to operate our platform such as hosting fees and fees paid to various third-party partners for access to their technology, services and amortization expenses of our capitalized internal-use software related to our platform. We mainly outsource captive management services and data services from the third-party companies. Our internal proprietary system seeks to consistently improve underwriting and services results through machine learning and data feeds. The captive management activities include introducing new carriers, conducting due diligence on carriers, conducting feasibility studies to determine the viability to be a stop-loss carrier on the platform, negotiating terms and contracts, coordinating audit requests, managing relationship with unrelated carriers and their regulators and auditor firms to ensure that our risk associated with our service offerings is minimized. See Part II, “Item 1A. Risk Factors — Risks Related to our Business and Industry” for additional information on the risks associated with our service offerings.

Sales and marketing expenses

Sales and marketing expenses primarily consist of personnel-related costs including salaries, stock-based compensation expense, benefits and commissions cost for our sales and marketing personnel. Sales and marketing expenses also include the costs for advertising, promotional and other marketing activities, as well as certain fees paid to various third-party for sales and customer acquisition.

General and administrative expenses

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

Research and development expenses

Research and development expenses primarily consist of personnel-related costs, including salaries, stock-based compensation expense and benefits for our research and development personnel. Additional expenses include costs related to the software development, quality assurance, and testing of new technology, and enhancement of our existing platform technology.

Provision for income taxes

Provision for income taxes consists primarily of changes to our current and deferred federal and state tax assets and liabilities. Deferred income taxes are recognized for the tax consequences of temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities. Our deferred tax assets and liabilities are calculated by applying the current tax rates and laws to taxable years in which such differences are expected to reverse.

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

Results of Operations

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

	Three Months Ended September 30,												Nine Months Ended September 30,
	2025			% of revenue			2024			% of revenue			2025			% of revenue			2024			% of revenue
Revenues
Revenues from underwriting modeling (ICE)	$	1,389,604			16.4	%	$	1,528,451			34.3	%	$	5,832,164			22.6	%	$	4,952,191			34.0	%
Revenues from fees		7,100,489			83.6	%		2,930,470			65.7	%		19,986,762			77.4	%		9,634,151			66.0	%
SMR		7,100,489			83.6	%		2,250,549			50.5	%		19,986,762			77.4	%		7,379,016			50.5	%
HI Card		—			—	%		679,921			15.2	%		—			—	%		2,255,135			15.5	%
Total revenues		8,490,093			100.0	%		4,458,921			100.0	%		25,818,926			100.0	%		14,586,342			100.0	%

Cost of revenues		3,346,277			39.4	%		979,628			22.0	%		9,009,841			34.9	%		2,944,266			20.2	%
Gross profit	$	5,143,816			60.6	%	$	3,479,293			78.0	%	$	16,809,085			65.1	%	$	11,642,076			79.8	%

Operating expenses
Sales and marketing expenses		962,567			11.3	%		508,467			11.4	%		3,279,560			12.7	%		2,526,197			17.3	%
General and administrative expenses		3,451,907			40.7	%		1,813,520			40.7	%		10,474,125			40.6	%		5,629,393			38.6	%
Research and development expenses		235,819			2.8	%		718,424			16.1	%		1,356,149			5.3	%		2,180,246			14.9	%
Total operating expenses		4,650,293			54.8	%		3,040,411			68.2	%		15,109,834			58.6	%		10,335,836			70.8	%

Other income (expense):
Interest income		111,699			1.3	%		38,460			0.9	%		305,263			1.2	%		94,111			0.6	%
Interest expenses		—			—	%		(165,000	)		(3.7	)%		—			—	%		(495,000	)		(3.4	)%
Other income		—			—	%		157,156			3.5	%		118,399			0.5	%		157,156			1.1	%
Other expense		(5,000	)		(0.1	)%		(62,759	)		(1.4	)%		(5,000	)		—	%		(62,759	)		(0.4	)%
Total other income (expense), net		106,699			1.2	%		(32,143	)		(0.7	)%		418,662			1.7	%		(306,492	)		(2.1	)%

Income before income tax expense	$	600,222			7.0	%	$	406,739			9.1	%	$	2,117,913			8.2	%	$	999,748			6.9	%
Provision for income taxes		(148,046	)		(1.7	)%		(30,653	)		(0.7	)%		(536,514	)		(2.1	)%		(185,119	)		(1.3	)%
Net income	$	452,176			5.3	%	$	376,086			8.4	%	$	1,581,399			6.1	%	$	814,629			5.6	%
Other Financial Data:
Adjusted EBITDA⁽¹⁾	$	999,056			11.8	%	$	668,863			15.0	%	$	3,796,283			14.7	%	$	1,805,795			12.4	%

(1)

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

Adjusted EBITDA

	Three Months Ended September 30,					Nine Months Ended September 30,
	2025			2024		2025			2024
Reconciliation from Net Income to Adjusted EBITDA:
Net income	$	452,176		$	376,086	$	1,581,399		$	814,629
Interest (income) expenses		(111,699	)		126,540		(305,263	)		400,889
Depreciation and amortization		217,981			135,584		489,947			405,158
Income tax expense		148,046			30,653		536,514			185,119
Stock-based compensation expense		292,552			—		1,493,686			—
Total net adjustments		546,880			292,777		2,214,884			991,166
Adjusted EBITDA	$	999,056		$	668,863	$	3,796,283		$	1,805,795

Condensed Consolidated Balance Sheet Data

	September 30, 2025		December 31, 2024
Cash and cash equivalents	$	8,023,613	$	7,849,248
Accounts receivable, net		868,628		1,647,103
Other receivables		3,871,106		500,252
Software		6,182,691		3,962,461
Total assets		22,755,844		15,768,489
Total liabilities		5,596,881		2,599,461
Total stockholders’ equity		17,158,963		13,169,028

Cash and cash equivalents

As of September 30, 2025, the balance of cash and cash equivalents was $8,023,613, representing a modest increase compared to $7,849,248 as of December 31, 2024.

Accounts receivable, net

As of September 30, 2025, net accounts receivable decreased by $778,475 to $868,628, from $1,647,103 as of December 31, 2024. This reduction mainly resulted from process enhancements and automation of our accounts receivable (AR) system.

Other receivables

As of September 30, 2025, the balance of other receivables increased by $3,370,854 to $3,871,106, from $500,252 as of December 31, 2024. This increase was mainly attributable to the purchase of Deferred Administrative Surplus for $3,481,684 on March 18, 2025.

Software

As of September 30, 2025, the balance of software increased by $2,220,230 to $6,182,691, from $3,962,461 as of December 31, 2024. This increase was mainly attributable to a $2,951,949 increase in the expansion of eDIYBS systems completed in September 2025, partially offset by a $489,947 increase in accumulated amortization for the nine months ended September 30, 2025.

Total liabilities

As of September 30, 2025, the balance of total liabilities increased by $2,997,420 to $5,596,881, from $2,599,461 as of December 31, 2024. This increase was driven by the higher accounts payable and accrued expenses reflecting the expansion of our business scale. Notably, the first nine months of 2025 revenues have reached approximately 132% of full-year 2024 revenues, which led to higher liabilities in line with operational growth.

Total stockholders’ equity

As of September 30, 2025, the balance of total stockholders’ equity increased by $3,989,935 to $17,158,963, from $13,169,028 as of December 31, 2024. This increase was mainly attributable to our net income and stock-based compensation. Please refer to our Condensed Consolidated Statements of Changes in Stockholders’ Equity for additional information.

Comparison of Three Months Ended September 30, 2025 and 2024

Revenues

	Three Months Ended September 30,
	2025					2024
			Percentage of					Percentage of			Period-to-Period Change
	Amount		Revenue			Amount		Revenue			Amount			Percentage
Revenues from underwriting modeling (ICE)		1,389,604		16.4	%		1,528,451		34.3	%		(138,847	)		(9.1	)%
Revenues from fees		7,100,489		83.6	%		2,930,470		65.7	%		4,170,019			142.3	%
SMR		7,100,489		83.6	%		2,250,549		50.5	%		4,849,940			215.5	%
HI Card		—		—	%		679,921		15.2	%		(679,921	)		(100.0	)%
Total revenues		8,490,093		100.0	%		4,458,921		100.0	%		4,031,172			90.4	%

Total revenues for the three months ended September 30, 2025 reached $8.5 million, up 90.4% from $4.5 million in the same period of 2024. This growth was primarily driven by strong demand for our new product offerings facilitated by continued channel expansion through brokers, TPAs, and agencies.

This growth was supported by a 44% increase in total billable enrolled employees, which rose to 25,248 as of September 30, 2025, compared to 17,594 for the same period in 2024.

As the services provided by SMR and ICE are delivered as an interdependent and integrated solution, we evaluate their performance based on the total revenues generated. While revenues from underwriting modeling generated from ICE decreased by $0.1 million to $1.4 million, this decline was more than offset by a $4.8 million increase in revenues from fees generated from SMR, leading to a net increase in the revenues from the integrated solution. Revenues from fees continue to outpace revenues from underwriting modeling as more employers prioritize higher-quality coverage and enhanced service offerings.

No revenues were generated from HI Card, provided as an optional service, for the three months ended September 30, 2025, compared to $0.7 million for the same period in 2024. We made strategic decisions to temporarily pause HI Card beta testing and prioritize tech resource toward enhancing eDIYBS that drives immediate higher revenue. This disciplined allocation of resources has strengthened our near-term growth trajectory while positioning HI Card for a more robust relaunch. We currently expect to resume HI Card development toward the end of 2025 or early in the first quarter of 2026.

Cost of revenues

	Three Months Ended September 30,
	2025					2024					Period-to-Period Change
	Amount		Percentage of Revenue			Amount		Percentage of Revenue			Amount		Percentage of Revenue
Cost of revenues		3,346,277		39.4	%		979,628		22.0	%		2,366,649		17.4	%

Cost of revenues increased by $2.3 million to $3.3 million for the three months ended September 30, 2025, from $1.0 million for the three months ended September 30, 2024. As a percentage of revenue, cost of revenues increased to 39.4% for the three months ended September 30, 2025, from 22.0% for the same period in 2024.

The increase was primarily attributable to higher captive management fees related to the new products and new channels launched in July 2024, as we continued to expand our business scale.

Sales and marketing expenses

	Three Months Ended September 30,
	2025					2024					Period-to-Period Change
	Amount		Percentage of Revenue			Amount		Percentage of Revenue			Amount		Percentage of Revenue
Sales and marketing expenses		962,567		11.3	%		508,467		11.4	%		454,100		(0.1	)%

Sales and marketing expenses increased by $0.5 million to $1.0 million for the three months ended September 30, 2025, from $0.5 million for the three months ended September 30, 2024. As a percentage of revenue, sales and marketing expenses remained stable at 11.3% for the three months ended September 30, 2025, compared to 11.4% for the same period in 2024. Our channel-partnership model continues to drive revenue growth without the need for a large in-house sales force.

General and administrative expenses

	Three Months Ended September 30,
	2025					2024					Period-to-Period Change
	Amount		Percentage of Revenue			Amount		Percentage of Revenue			Amount		Percentage of Revenue
General and administrative expenses:
Operations division		1,260,832		14.9	%		1,013,628		22.8	%		247,204		(7.9	)%
Administrative division		2,191,075

SEC Form 10-Q filed by Health In Tech Inc.