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 June 30, 2026

☐ 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 August 12, 2026, there were 53,834,658 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	1
Item 1	Financial Statements (unaudited)	1
	Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025	1
	Consolidated Statements of Operations for the three and six months ended June 30, 2026 and 2025	2
	Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended June 30, 2026 and 2025	3
	Consolidated Statements of Cash Flows for the six months ended June 30, 2026 and 2025	4
	Notes to Consolidated Financial Statements	5
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3	Quantitative and Qualitative Disclosures About Market Risk	45
Item 4	Controls and Procedures	45

	PART II. OTHER INFORMATION	46
Item 1	Legal Proceedings	46
Item 1A	Risk Factors	46
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	46
Item 3	Defaults Upon Senior Securities	46
Item 4	Mine Safety Disclosures	47
Item 5	Other Information	47
Item 6	Exhibits	50

Signatures		51

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 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 platform 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.

Consolidated Balance Sheets

(Unaudited)

	June 30, 2026		December 31, 2025
Assets
Current assets
Cash and cash equivalents	$	6,514,813	$	7,669,754
Accounts receivable, net		8,546,307		756,288
Loans receivable, net		847,993		815,995
Other receivables, net		3,392,082		3,467,814
Deferred offering costs		102,586		170,977
Prepaid expenses and other current assets		2,380,284		3,280,148
Total current assets		21,784,065		16,160,976
Non-current assets
Software		7,197,718		6,530,894
Operating lease – right of use assets		104,277		139,940
Long-term prepaid expenses		8,184		258,151
Deferred tax assets, net		540,436		—
Total non-current assets		7,850,615		6,928,985
Total assets	$	29,634,680	$	23,089,961

Liabilities and stockholders’ equity

Current liabilities
Accounts payable and accrued expenses	$	9,907,370	$	4,188,811
Operating lease liabilities – current		81,225		76,195
Other current liabilities		—		891,598
Total current liabilities		9,988,595		5,156,604
Non-current liabilities
Deferred tax liabilities		—		757,675
Operating lease liabilities – non-current		21,713		63,617
Total non-current liabilities		21,713		821,292
Total liabilities		10,010,308		5,977,896

Commitments and contingencies (Note 5)

Stockholders’ equity

Common stock, $0.001 par value; Class A Common stock 150,000,000 shares authorized, 53,858,083 and 46,006,000 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively		53,858		46,006
Common stock, $0.001 par value; Class B Common stock 50,000,000 shares authorized, 11,700,000 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively		11,700		11,700
Additional paid-in capital		18,365,473		11,834,121
Retained earnings		1,120,933		5,220,238
Noncontrolling interests		72,408		—
Total stockholders’ equity		19,624,372		17,112,065
Total liabilities and stockholders’ equity	$	29,634,680	$	23,089,961

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

Health In Tech, Inc.

Consolidated Statements of Operations

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2026			2025			2026			2025
Revenues
Revenues from underwriting modeling (ICE)	$	1,272,647		$	2,090,576		$	2,741,461		$	4,442,560
Revenues from fees (SMR)		6,783,973			7,223,273			14,086,805			12,886,273
Total revenues		8,056,620			9,313,849			16,828,266			17,328,833

Cost of revenues		4,134,127			3,003,979			8,396,374			5,663,564

Gross profit	$	3,922,493		$	6,309,870		$	8,431,892		$	11,665,269

Operating expenses
Sales and marketing expenses		2,215,889			1,226,738			4,507,490			2,316,993
General and administrative expenses		4,269,094			3,775,453			7,724,652			7,022,218
Research and development expenses		875,811			582,609			1,796,206			1,120,330
Total operating expenses		7,360,794			5,584,800			14,028,348			10,459,541

Other income (expense):
Interest income		69,568			108,198			137,039			193,564
Other income		100,000			—			122,334			118,399
Other expense		(52,341	)		—			(52,341	)		—
Total other income, net		117,227			108,198			207,032			311,963

(Loss) income before income tax expense	$	(3,321,074	)	$	833,268		$	(5,389,424	)	$	1,517,691

Income tax benefit (expense)		809,888			(202,637	)		1,289,957			(388,468	)

Net (loss) income	$	(2,511,186	)	$	630,631		$	(4,099,467	)	$	1,129,223

Net loss attributable to noncontrolling interests	$	(162	)	$	—		$	(162	)	$	—

Net (loss) income attributable to common stockholders	$	(2,511,024	)	$	630,631		$	(4,099,305	)	$	1,129,223

Net (loss) income per share:
Basic	$	(0.04	)	$	0.01		$	(0.07	)	$	0.02
Diluted	$	(0.04	)	$	0.01		$	(0.07	)	$	0.02

Weighted average common shares outstanding:
Basic		62,829,725			55,382,395			60,106,502			55,003,233
Diluted		62,829,725			55,632,357			60,106,502			57,004,070

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

Health In Tech, Inc.

Consolidated Statements of Changes in Stockholders’ Equity

For the Three and Six months ended June 30, 2026 and 2025

(Unaudited)

	Common Stock										Additional									Total
	Class A						Class B				Paid-in			Retained			Noncontrolling			Stockholders’
	Shares			Amount			Shares		Amount		Capital			Earnings			Interests			Equity
Balance as of December 31, 2025		46,006,000		$	46,006			11,700,000	$	11,700	$	11,834,121		$	5,220,238		$	—		$	17,112,065
Issuance of common stock in connection with private investment in public equity financing, net of offering costs and placement agent fees		5,600,000			5,600			—		—		5,922,520			—			—			5,928,120
Stock-based compensation		2,252,276			2,252			—		—		148,992			—			—			151,244
Net loss		—			—			—		—		—			(1,588,281	)		—			(1,588,281	)
Balance as of March 31, 2026		53,858,276		$	53,858			11,700,000	$	11,700	$	17,905,633		$	3,631,957		$	—		$	21,603,148
Shares surrendered for settlement of minimum statutory tax withholdings		(206,785	)		(207	)		—		—		(256,091	)		—			—			(256,298	)
Offering costs related to resale registration statement reclassified to additional paid-in capital		—			—			—		—		(75,030	)		—			—			(75,030	)
Stock-based compensation		206,592			207			—		—		790,961			—			1,142			792,310
Contributions from noncontrolling interests		—			—			—		—		—			—			71,428			71,428
Net loss		—			—			—		—		—			(2,511,024	)		(162	)		(2,511,186	)
Balance as of June 30, 2026		53,858,083		$	53,858			11,700,000	$	11,700	$	18,365,473		$	1,120,933		$	72,408		$	19,624,372

	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

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

Health In Tech, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

	Six Months Ended June 30,
	2026			2025
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$	(4,099,467	)	$	1,129,223
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Bad debt (recovery) expense		(2,954	)		5,990
Amortization expense		723,787			271,966
Provision for refund liability		108,402			955,743
Provision for credit losses on other receivables		739,773			—
Deferred tax benefit		(1,298,111	)		(66,547	)
Interest income		(31,998	)		(31,998	)
Stock-based compensation expense		1,325,882			1,201,134
Changes in operating assets and liabilities:
Accounts receivable		(7,787,065	)		359,982
Other receivables		(71,444	)		(3,354,582	)
Prepaid expenses and other assets		798,039			(561,907	)
Operating lease right-of-use assets and liabilities, net		(1,211	)		37
Accounts payable and accrued expenses		4,364,800			2,269,897
Income taxes payable		—			(170,309	)
Other current liabilities		(1,000,000	)		—
Net cash (used in) provided by operating activities		(6,231,567	)		2,008,629

CASH FLOWS FROM INVESTING ACTIVITIES:
Development of software		(959,123	)		(1,613,372	)
Net cash used in investing activities		(959,123	)		(1,613,372	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock in connection with private investment in public equity financing, net of placement agent fees and escrow agent fees		6,381,000			—
Payments of deferred offering costs		(243,608	)		(106,339	)
Contributions from noncontrolling interests		71,428			—
Taxes paid related to net share settlement of equity awards		(173,071	)		—
Net cash provided by (used in) financing activities		6,035,749			(106,339	)

(Decrease) increase in cash and cash equivalents		(1,154,941	)		288,918
Cash and cash equivalents, beginning of period		7,669,754			7,849,248
Cash and cash equivalents, end of period	$	6,514,813		$	8,138,166

Supplemental disclosures of cash flow information:
Cash paid for interest	$	—		$	—
Cash paid for income taxes	$	10,035		$	625,323

Summary of noncash investing and financing activities:
Accrued deferred offering costs included in accounts payable and accrued expenses	$	215,911		$	—
Accrued development of software included in accounts payable and accrued expenses	$	430,386		$	265,243
Reclassification of deferred offering costs to additional paid-in capital upon private investment in public equity financing	$	527,910		$	—
Stock-based compensation capitalized for software development	$	19,454		$	—

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

Health In Tech, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

1. Organization

Description of Business

Health in Tech, Inc. (collectively with SMR, Hi Card, ICE, and, beginning April 10, 2026, HITChain (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”).

HITChain Inc. (“HITChain”), was incorporated as a Delaware corporation on January 2, 2026, to develop a blockchain-enabled healthcare insurance claims processing platform. This platform aims to establish an immutable, transparent and efficient claims ecosystem to reduce administrative costs and improve trust across all stakeholders. HITChain completed its initial capitalization on April 10, 2026. The Company contributed $428,571 in exchange for Class A common stock, representing an 85.72% economic interest and 28.58% voting interest. The Company’s Chief Executive Officer and Chief Financial Officer each contributed $35,714 in exchange for Class B common stock, representing a 7.14% economic interest and 35.71% voting interest each. Each share of Class A common stock is entitled to one vote, while each share of Class B common stock is entitled to 15 votes. Except for the differences in voting rights, the Class A and Class B common stock have identical economic rights and other terms, including rights with respect to dividends and distributions and rights upon liquidation.

The Company’s unaudited consolidated financial statements include the accounts of HIT, its wholly owned subsidiaries, and HITChain beginning April 10, 2026, for which the Company has been deemed to be the primary beneficiary under ASC 810 (see Note 2).

2. Summary of Significant Accounting Policies

Basis of Presentation

The Company’s unaudited 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 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, 2025.

The consolidated balance sheet as of December 31, 2025 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 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, 2026.

Health In Tech, Inc.

Notes to 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 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 June 30, 2026 and December 31, 2025, the Company did not have a material balance of long-lived assets located outside of the United States.

Use of Estimates

The preparation of 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 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, allowance for credit losses, 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 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.

Variable Interest Entity (“VIE”)

The Financial Accounting Standards Board (“FASB”) provides guidance in ASC 810, Consolidation (“ASC 810”) for determining whether an entity is a VIE. VIE’s are defined as entities in which equity investors of the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support. A VIE is required to be consolidated by its primary beneficiary, which is the party that (i) has the power to control the activities that most significantly impact the VIE’s economic performance and (ii) has the obligation to absorb losses, or the right to receive benefits, of the VIE that could potentially be significant to the VIE.

The Company determined that HITChain is VIE because its equity investment at risk is not sufficient to finance its expected activities without additional subordinated financial support.

The Company also determined that it is the primary beneficiary of HITChain. This conclusion was based on the following:

●

The Company holds 85.72% of HITChain’s economic interest but 28.58% of its voting interest through Class A common stock. The Company’s Chief Executive Officer and Chief Financial Officer each hold 7.14% of HITChain’s economic interest and, together, 71.42% of its voting interest through Class B common stock. The Company, together with its related-party group, has the power to direct the activities that most significantly affect HITChain’s economic performance, such as software development strategy, commercialization decisions and financing activities.

●

The Company has the obligation to absorb losses or the right to receive benefits that could potentially be significant to HITChain.

●

Among the members of the related-party group, the Company is the party most closely associated with HITChain, as it holds the substantial majority of HITChain’s economic interest.

Health In Tech, Inc.

Notes to Consolidated Financial Statements

2. Summary of Significant Accounting Policies (cont.)

HITChain did not meet the definition of a business as of April 10, 2026. Upon initial consolidation of HITChain, the Company recognized a loss of $37,341, primarily attributable to formation-related liabilities incurred by HITChain prior to its initial capitalization.

By the end of May 2026, following an internal business review, the Company transferred certain in-development software assets with a carrying amount of $699,164 to HITChain. The transfer was recorded at carrying value, with no gain or loss recognized. HITChain recorded a corresponding intercompany payable to the Company, which was eliminated in consolidation. Subsequent to the transfer and through June 30, 2026, the Company continued to fund HITChain’s development activities. HITChain recorded the related amounts as an intercompany payable, which was eliminated in consolidation.

The following table summarizes the carrying amounts of the assets and liabilities of HITChain included in the Company’s unaudited consolidated financial statements as of June 30, 2026:

	June 30, 2026
Assets
Cash and cash equivalents	$	428,461
Software		753,485
Deferred tax assets, net		309
Total assets	$	1,182,255
Liabilities
Accounts payable and accrued expenses	$	43,764
Total liabilities	$	43,764

The assets of HITChain can only be used to settle the obligations of HITChain and are not available to satisfy the obligations of the Company. The creditors of HITChain have no recourse to the general credit of the Company.

The Company consolidated HITChain beginning April 10, 2026. The remaining 14.28% economic interest in HITChain is presented as noncontrolling interests in the accompanying unaudited consolidated financial statements.

Cash and Cash Equivalents

Cash and cash equivalents consist of demand deposit 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 June 30, 2026 and December 31, 2025. 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 six months ended June 30, 2026 and 2025, one stop-loss insurance carrier (“Carrier A”) individually represented greater than 10% of Company’s total gross revenues. Revenue from Carrier A accounted for 15.7% and 17.0% of the Company’s total gross revenues for the three and six months ended June 30, 2026, respectively. The amount due from Carrier A was approximately 20.6% of accounts receivable as of June 30, 2026. For the three and six months ended June 30, 2025, revenue from Carrier A accounted for 27.4% and 26.5% of the Company’s total gross revenues for the three and six months ended June 30, 2025, respectively. The amount due from Carrier A was approximately 32.8% of accounts receivable as of June 30, 2025. 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 Consolidated Financial Statements

2. Summary of Significant Accounting Policies (cont.)

Revenues from Business Employer Customers

The Company does not have significant concentration of revenues from any of its business employer customers. The Company has a diversified customer base and did not have any business employer that accounted for more than 2.5% or 1.5% of the Company’s total gross revenues for the three and six months ended June 30, 2026 and 2025, respectively. No individual business employer accounted for more than 4.0% of accounts receivable, net as of June 30, 2026 and 2025.

Concentration of Cost of Revenues Service Providers

For the three months ended June 30, 2026, the Company’s three primary service providers represented 28.3%, 17.5% and 14.7% of the Company’s cost of revenues, respectively. For the six months ended June 30, 2026, these three primary service providers accounted for 32.3%, 16.3% and 13.3% of the Company’s cost of revenues, respectively. As of June 30, 2026, they accounted for 40.3%, 4.7% and 9.7% of accounts payable balance, respectively. For the three months ended June 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 80.3%, 6.0% and 5.0% of the Company’s cost of revenues, respectively. For the six months ended June 30, 2025, these three primary service providers accounted for 78.8%, 6.4% and 5.2% of the Company’s cost of revenues, respectively. As of June 30, 2025, they accounted for 60.3%, 2.9% 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 provider. For the three and six months ended June 30, 2026, this provider accounted for 4.4% and 4.3% of the Company’s cost of revenues. As of June 30, 2026, this provider accounted for 1.6% of accounts payable balance. For the three and six months ended June 30, 2025 this provider accounted for 6.0% and 6.4% of the Company’s cost of revenues, respectively. As of June 30, 2025, this provider accounted for 2.9% of accounts payable balance. The Company previously utilized two AI data services companies, as pricing was more advantageous than utilizing other vendors within this sector. While the Company has historically utilized these AI data service companies, the Company believes that, if necessary, it 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 six months ended June 30, 2026 and 2025. 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, 2025, the Company entered into a 12-month short-term lease agreement with a monthly fixed rent payable, commencing in December of 2025. The Company had one lease classified as short-term leases as of December 31, 2025. During the three months ended March 31, 2026, the Company terminated the short-term lease agreement. The Company had no leases classified as short-term leases as of June 30, 2026.

Health In Tech, Inc.

Notes to 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. In accordance with ASC 326, Financial Instruments — 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 June 30, 2026 and December 31, 2025, 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, 2025, the Company’s monthly revenue provision was 1.3% of total revenues. The provision for customers ending their 12-month plan as of December 31, 2025 without completion of reconciliation was $143,251. The total provision amounted to $634,982 or 1.7% of total revenues for the year ended December 31, 2025. The balance of accounts receivable allowance for revenue billing adjustments related to current year enrollment adjustment was $287,651 as of December 31, 2025. In the first half year of 2026, the Company completed the reconciliation for customer policies that ended as of December 31, 2025. The balance of accounts receivable allowance for revenue billing adjustments related to prior year enrollment adjustment was $0 as of June 30, 2026. Starting from January 2026, the Company’s monthly revenue provision was 1.7% of total revenues, which was based on the full review of 2025 revenue adjustments. The balance of accounts receivable allowance for revenue billing adjustments related to current year enrollment adjustment was $202,671 as of June 30, 2026. 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 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 employer, known as “Deferred Administrative Surplus.” As the platform company, the Company tracks and processes claims for carriers. With 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”). Subsequent to the purchase, following the final review and net of inactive insurance policies, the face value of the 2025 Purchase was approximately $13.8 million. 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 Consolidated Financial Statements

2. Summary of Significant Accounting Policies (cont.)

When entering into a stop-loss insurance policy, a 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 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 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 business employers with a reconciliation of what amounts are specifically owed. This is based on the amount of funds in the 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 any contingencies other than the ability to collect from the 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 purchased the policies with related run-out periods that had lapsed and had positive claim 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 all the remaining policies with deferred administrative surplus as a product feature from the Carrier. Collectively, the Carrier and HIT platform stopped offering this feature in August 2024. Thus, 2025 purchased policies are in different periods and stages, including in the policy coverage period, in the run-out period and the out of run-out periods. For policies in the coverage period and in the run-out periods, the final Deferred Administrative Surplus cannot be determined until the policy completes the run-out period and finalizes the reconciliation. Following the purchase, the Deferred Administrative Surplus was transferred to the Company for collection. After the transfer, the Company performs the relevant reconciliations to demonstrate to the business employers the amount of the Deferred Administrative Surplus now owed to the Company from the claim fund balance. The Company asks the business owners to pay back the Deferred Administrative Surplus within 30 days of the collection requests sent.

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% the estimated face value of the 2023 Purchase and 20% of estimated face value of 2025 Purchase. This was due to the Carrier does not have the sufficient resources and procedures to collect the Deferred Administrative Surplus. Moreover, the 2025 Purchase was the final batch of policies with 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 June 30, 2026, the Company collected $1,272,413 for the 2023 Purchase and $290,283 for the 2025 Purchase. The lower collection amount related to the 2025 Purchase is a result of a substantial majority of the underlying policies remaining in the reconciliation process of the Deferred Administrative Surplus, for which the Company initiates collection requests to business employers only upon the completion of such reconciliations.

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 has 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 both as of June 30, 2026 and as of December 31, 2025. The Company collected $12,224 under the Deferred Administrative Surplus during the six months ended June 30, 2026. The Company collected $165,802 under the Deferred Administrative Surplus during the six months ended June 30, 2025. Payments made for purchases and collections from the Deferred Administrative Surplus are included in the “other receivables” line of operating activities in the Company’s Consolidated Statements of Cash Flows.

Health In Tech, Inc.

Notes to Consolidated Financial Statements

2. Summary of Significant Accounting Policies (cont.)

Set forth below is an illustrative roll-forward based on actual figures for the three and six months ended June 30, 2026.

	2023 Purchase			2025 Purchase			Total
Purchases	$	1,650,000		$	3,481,684		$	5,131,684
Accumulated Collections		(1,272,413	)		(278,059	)		(1,550,472	)
Provision and write-offs		(377,587	)		—			(377,587	)
Balance as of December 31, 2025, net	$	—		$	3,203,625		$	3,203,625
Purchases		—			—			—
Collections		—			(12,224	)		(12,224	)
Provision and write-offs		—			—			—
Balance as of March 31, 2026, net	$	—		$	3,191,401		$	3,191,401
Purchases		—			—			—
Collections		—			—			—
Provision and write-offs		—			(739,773	)		(739,773	)
Balance as of June 30, 2026, net	$	—		$	2,451,628		$	2,451,628

The Company separately assessed if an allowance for credit losses was necessary for this Other Receivables. In estimating the allowance, the Company considers factors including the aging and collection history of the receivables, the length of time amounts have remained outstanding, information obtained through the collection process, and other relevant facts and circumstances affecting expected collectability. Other Receivables are written off after all collection attempts have been exhausted. Credit loss expense recognized on Deferred Administrative Surplus, which is presented in General and administrative expenses in the Company’s Consolidated Statements of Operations, was $739,773 for the three and six months ended June 30, 2026 and $0 for the three and six months ended June 30, 2025. The credit loss expense of $739,773 relates to the 2025 Purchase and no credit loss expense was recognized for the three and six months ended June 30, 2026 associated with the 2023 Purchase. No income was recognized on the Deferred Administrative Surplus in any of the periods presented, as collections received did not exceed the carrying value of the receivable. Under the Company’s nonaccrual approach, income is recognized only upon actual cash receipt to the extent that amounts received exceed the carrying value of the receivable at the time of collection.

Loans Receivable, Net

On October 10, 2023, the Company entered into a Promissory Note Agreement with Kang Youle Limited, which constitutes an unsecured lending arrangement. 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 June 30, 2026 and December 31, 2025, respectively. The Company recorded this loan receivable at amortized cost on the 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. In accordance with ASC 350-40, Intangibles — Goodwill and Other: Internal-Use Software, the Company capitalizes certain costs associated with the development of its internal-use software after the preliminary project stage is complete and until the design, coding, installation, and testing of the software have 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 $320,320 and $723,787 of the capitalized costs associated with eDIYBS and other systems for the three and six months ended June 30, 2026, respectively, and $135,983 and $271,966 for the three and six months ended June 30, 2025, respectively, which is included in the cost of revenues line item of the Company’s Consolidated Statements of Operations. During the three and six months ended June 30, 2026, the Company capitalized $809,478 and $1,390,611, respectively, of software development costs, and $919,000 and $1,828,615 during the three and six months ended June 30, 2025, respectively.

Impairment of Long Lived Assets

In accordance with ASC 360, Property, Plant, and Equipment, 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 six months ended June 30, 2026 and 2025.

Health In Tech, Inc.

Notes to Consolidated Financial Statements

2. Summary of Significant Accounting Policies (cont.)

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.

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. 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 (SMR and ICE), as further described below.

SMR Specific Considerations

Program and Platform Management Services (Legacy)

Under SMR’s Program and platform management services, the Company’s insurance marketplace allows brokers to customize an 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 business employer, select which network they wish to use, what plan designs they want to offer to the business employer and then quickly obtain a bindable self-funded medically underwritten stop loss quote they can provide to their 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 employer. The 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 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 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 SCB 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 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 policies to 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 business employer at no cost. Brokers are paid by the 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 business employers to enter into service contracts with SMR on behalf of the 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 is not providing services to the TPAs, but instead, has 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 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 business and the cost of each. Only the business employer can start or terminate the relationship with SMR. The TPA cannot start or terminate the relationship with SMR. As such, the Company has concluded that the TPAs are not customers and that the business employers are the customers of SMR pursuant to ASC 606.

Effective January 1, 2026, the Company has pivoted its services to offer pre-designed self-funded plans to employers, leveraging years of experience in selecting and managing the vendors that are essential to the plan.

Self-funded Plan Administration Services (Effective January 1, 2026)

SMR develops pre-configured, self-funded health benefit plans that integrate full administrative services and then are bundled with stop-loss insurance for employer clients. SMR delivers a comprehensive, end-to-end self-funded health plan solution spanning plan design and ongoing administration.

SMR curates and onboards a network of specialized administrative vendors, contracting directly and tailoring service configurations based on deep operational experience and sector expertise. This enables consistent execution while maintaining flexibility to meet the specific needs of employers and distribution partners.

As of June 30, 2026, SMR includes more than 100 pre-designed plans that can be efficiently configured and bundled with stop-loss coverage, significantly streamlining implementation.

This model simplifies the complexity of self-funded plan administration, materially improves operational efficiency, and provides a differentiated, flexible solution for both employers and sales agents.

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:

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 employer. ICE continues to assess risks and may re-underwrite based on underwriting risk guidelines provided by carriers. Any enrollment changes in a 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 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, 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 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 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 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 business employers based on factors such as employee headcount and a specific employee’s geographic location. SMR will then design health plans, select networks, and sets up the benefits plan for the business employers. Licensed brokers log in to the marketplace to select and sell self-funded benefits plans to businesses. The Company throughout the contract period is actively working with the TPA to assist administration of the plan specifically due to headcount changes. The Company’s service offerings encompass reference-based pricing, group insurance captives, community health plans, and association health programs. This service is performed for employers to ensure that they have access to a customized health benefits program. For these Program and Platform Management Services, the Company acts as a facilitator and does not control the underlying services prior to transfer to customers. 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 Consolidated Statements of Operations.

Self-funded plan administration services: SMR delivers a comprehensive, end-to-end self-funded health plan solution to business employers, spanning plan design and ongoing administration. SMR establishes independent pricing for services, and acts as the primary party responsible for service fulfillment. The Company acts as the principal under ASC 606 for these Plan administration services, as it controls the services prior to transfer to employers and is primarily responsible for fulfillment. These services are accounted for 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. Revenue related to these services are included in the “Revenues from fees” within the 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. Services provided by SMR (either program and platform management or self-funded plan administration) and underwriting modeling and risk services provided by ICE (including eDIYBS) are interdependent, as they cannot function effectively without being combined.

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 of control to the customers is commensurate with its right to invoice given the fact that at the end of each reporting period, 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.

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 June 30,						Six Months Ended June 30,
	2026			2025			2026			2025
Revenues:
Revenues from underwriting modeling (ICE)	$	1,272,647			2,767,848		$	2,849,863			5,398,303
Revenues from fees (SMR)		6,831,192			6,814,122			14,070,261			13,116,994
Program and platform management fees		1,790,447			6,814,122			4,520,336			13,116,994
Self-funded plan administration fees		5,040,745			—			9,549,925			—
Subtotal		8,103,839			9,581,970			16,920,124			18,515,297
Contra revenue for billing adjustments		(47,219	)		(92,423	)		16,544			(230,721	)
Contra revenue for refund liability		—			(175,698	)		(108,402	)		(955,743	)
Total revenues	$	8,056,620			9,313,849		$	16,828,266			17,328,833

Health In Tech, Inc.

Notes to Consolidated Financial Statements

2. Summary of Significant Accounting Policies (cont.)

Variable Consideration

With the exception of its business relationship with one stop-loss insurance 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 paid by employers. The Company has reviewed all contracts with its customers and determined that, other than the contract described below, none include terms that could result in the Company refunding amounts to a carrier or receiving variable cash flows.

For this stop-loss insurance carrier, with which the Company’s new policy underwriting otherwise ended in 2024, ICE entered into a Program Manager Agreement (the “Agreement”), effective August 1, 2023. Under the Agreement, ICE provides underwriting modeling and risk program services in connection with self-funded stop-loss policies issued by the carrier and charges the carrier a Manager Fee of up to 12% of gross written premiums. Pursuant to Addendum 3 to the Agreement, the Manager Fee is subject to a Manager Fee Adjustment (the “Adjustment”) that may reduce the fee retained by ICE, ranging from $nil to the full Manager Fee of 12% of gross written premiums. The Manager Fee constitutes variable consideration in its entirety, as the amount ICE is ultimately entitled to retain depends on the Adjustment. The carrier pays ICE the Manager Fee monthly based on gross written premiums collected in the preceding month, with any Adjustment determined and settled separately.

The Agreement covers 11 consecutive policy batches from August 2023 through June 2024 (each group of policies sharing the same effective date month, a “policy batch”). Each policy batch passes through three stages: (i) a 12-month in-effect stage; (ii) a six-month run-out stage, during which claims are submitted — upon completion, claims data for that batch is substantially complete; and (iii) a six-month reconciliation stage, during which submitted claims are reviewed and finalized.

At agreement inception and through December 31, 2024, none of the policy batches had completed their run-out period. Based on the Company’s industry experience and ongoing monitoring of each policy batch’s performance, the performance of the underlying policies was favorable at each reporting date. Accordingly, the Company assessed the probability of any meaningful Adjustment as remote, and the estimated transaction price for each policy batch equaled the full Manager Fee of 12% of gross written premiums. No revenue reduction was recorded in 2023 or 2024.

During 2025, as each policy batch completed its run-out period, the claims data for that batch became substantially complete, providing the Company with updated information to reflect in its transaction price estimates. For policy batches where the updated information indicated adverse performance, the Company concluded that the probability of a meaningful Adjustment was no longer remote and reduced the estimated transaction price accordingly. The Company updates its transaction price estimates at each reporting date to reflect the information then available.

Health In Tech, Inc.

Notes to Consolidated Financial Statements

2. Summary of Significant Accounting Policies (cont.)

For the three and six months ended June 30, 2026, the Company estimated contra revenue of $0 and $108,402, respectively, and $175,698 and $955,743 for the three and six months ended June 30, 2025, respectively, related to the Adjustment. These amounts reduced revenue from underwriting modeling services provided to the carrier. The cumulative reduction in revenue recorded through June 30, 2026 was $4.0 million, comprising approximately $3.9 million in 2025 and approximately $0.1 million in the first quarter of 2026. As of June 30, 2026 and December 31, 2025, refund liabilities of $0 and $891,598 related to the Adjustment were recorded in other current liabilities, respectively. As of June 30, 2026, the Company has made interim payments of $4,000,000 to the carrier in connection with the Adjustment, subject to final reconciliation. The Company retains the right to recover any overpaid amounts. Subsequent to the completion of the interim payment schedule, the carrier asserted an additional claim of up to approximately $400,000 in connection with the Adjustment during the second quarter of 2026. The Company is currently evaluating the merits of the additional claim and the parties are engaged in ongoing negotiations. Given the early stage of negotiations, the amount of any additional obligation, if any, cannot be reasonably estimated at this time, and no additional provision has been recorded as of June 30, 2026. The Company will continue to update its estimates at each reporting date to reflect the information then available.

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 June 30, 2026 and December 31, 2025, 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 June 30, 2026 and December 31, 2025, there were no such capitalized costs. All eligible contract acquisition costs expensed by the Company have been included in sales and marketing expenses on the Company’s Consolidated Statements of Operations for the three and six months ended June 30, 2026 and 2025.

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 were no significant financing components during the three and six months ended June 30, 2026 and 2025, respectively.

Health In Tech, Inc.

Notes to Consolidated Financial Statements

2. Summary of Significant Accounting Policies (cont.)

Cost of Revenues

The Company’s cost of revenues primarily consists of direct costs attributable to operating its platform and delivering platform-enabled services, many of which vary with the volume of services delivered, (i) infrastructure costs to operate its platform, such as hosting fees, fees paid to various third-party partners for access to their technology and services, and amortization expenses of the Company’s capitalized internal-use software related to its platform, (ii) costs of plan administrative services provided by the TPA designated in each pre-designed plan and other vendors assigned to each TPA, and (iii) costs related to the captive management activities. 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 the risk associated with the Company’s service offerings is minimized. Personnel costs associated with underwriting oversight, claims management, enrollment support and other operational functions are classified as general and administrative expenses. These employees support the Company’s overall operating platform and service infrastructure across its portfolio of carrier and employer relationships, rather than performing activities that are directly identifiable to a specific revenue contract or separately priced service deliverable.

Stock-Based Compensation Expense

In accordance with ASC 718, Compensation — Stock Compensation, the Company’s share-based compensation program provides for the grant of stock options, restricted stock awards (“RSAs”) and unrestricted stock awards 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 Company’s initial public offering (the “initial public offering” or the “IPO”) was based on the fair value of the Company’s common stock on the date of the grant, using the discounted cash flow method and back-solve method, respectively. The fair value of unrestricted and restricted stock granted after the IPO is based on the closing market price on the date of the grant.

Effective April 10, 2026, following the consolidation of HITChain, the Company’s stock-based compensation expense also includes equity awards granted under HITChain’s equity incentive plan. HITChain’s share-based compensation program grant awards include stock options and RSAs to officers, directors and non-employees. The fair value of stock options granted was determined using the binomial option-pricing model. The fair value of RSAs granted was based on the fair value of HITChain’s common stock on the date of the grant. See Note 7 for further details.

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 (Loss) Per Share

Net income (loss) per share is provided in accordance with ASC 260, Earnings per Share. The Company computes basic net income (loss) per share by dividing net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. The Company’s Class A Common Stock and Class B common stock, $0.001 par value per share (“Class B Common Stock” and together with the Class A Common Stock, “common stock”), have identical dividend and liquidation rights and are therefore considered a single class for purposes of calculating earnings per share.

Health In Tech, Inc.

Notes to Consolidated Financial Statements

2. Summary of Significant Accounting Policies (cont.)

Diluted net income (loss) 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 (loss) 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 (loss) per share only once the performance condition is met, and only to the extent such RSAs and options are dilutive. For the three and six months ended June 30, 2026, no diluted shares attributable to RSAs or options were included in the calculation of net loss per share. For the three months ended June 30, 2025, diluted shares attributable to 249,962 RSAs were included in the calculation of net income per share. For the six months ended June 30, 2025, diluted shares attributable to 445,693 RSAs and 1,555,144 options were included in the calculation of net income per share.

The following table sets forth the computation of basic and diluted net income (loss) per share of common stock for the three and six months ended June 30, 2026 and 2025:

	Three Months Ended June 30,					Six Months Ended June 30,
	2026			2025		2026			2025
Net (loss) income attributable to common stockholders	$	(2,511,024	)	$	630,631	$	(4,099,305	)	$	1,129,223
Weighted average shares outstanding
Basic		62,829,725			55,382,395		60,106,502			55,003,233
Total dilutive effect of outstanding equity awards		—			249,962		—			2,000,837
Diluted		62,829,725			55,632,357		60,106,502			57,004,070
Net (loss) income per share attributable to common stockholders
Basic	$	(0.04	)	$	0.01	$	(0.07	)	$	0.02
Diluted	$	(0.04	)	$	0.01	$	(0.07	)	$	0.02

The following outstanding stock awards were not considered in the computation of diluted net income (loss) per share attributable to holders of common stock as they had antidilutive effects for the three and six months ended June 30, 2026 and 2025:

	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Restricted stock awards		2,690,457		934,327		2,690,457		934,327
Option awards		1,900,825		2,296,505		1,900,825		—
Total		4,591,282		3,230,832		4,591,282		934,327

Health In Tech, Inc.

Notes to Consolidated Financial Statements

2. Summary of Significant Accounting Policies (cont.)

Recently Issued Accounting Standards Not Yet Adopted

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 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 consolidated financial statement disclosures.

3. Loans Receivable, Net

On October 10, 2023, the Company entered into a Promissory Note Agreement with Kang Youle Limited, which constitutes an unsecured lending arrangement. 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 June 30, 2026 and December 31, 2025, the outstanding principal amount was $800,000. The Company accrued interest that is due and receivable in the amount of $47,993 and $15,995 as of June 30, 2026 and December 31, 2025, respectively. This amount is included within “Loans receivable, net” on the 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

The Company has three classes of stock: (1) Class A Common Stock; (2) Class B Common Stock, and (3) Series A Preferred Stock.

The total number of shares of stock that the Company has authority to issue is 220,000,000, consisting of 150,000,000 shares of Class A Common Stock, 50,000,000 shares of Class B Common Stock and 20,000,000 shares of Series A Preferred Stock, $0.001 par value per share (“Series A Preferred Stock”).

Holders of Class B Common Stock are entitled to ten votes per share while holders of Class A Common Stock are entitled to one vote per share. Both classes of common stock vote collectively with the holders of Series A Preferred Stock. Each share of Series A Preferred Stock is entitled to one vote. In addition, the affirmative vote of a majority of the outstanding Series A Preferred Stock is required to approve certain fundamental corporate actions, including mergers, liquidations, the issuance of senior or parity equity securities, and any amendments to the Company’s governing documents that would adversely affect the rights of holders of Series A Preferred Stock.

Holders of Class A Common Stock and Class B Common Stock are entitled to dividends when, and if, declared at the discretion of the Company. However, holders of Series A Preferred Stock are entitled to receive non-cumulative dividends prior and in priority to any dividends declared on the common stock. Accordingly, no dividends may be paid on common stock unless all declared dividends on the Series A Preferred Stock have been paid or set aside for payment.

On March 27, 2026, the Company completed a public equity financing (the “PIPE”) through which it issued and sold 5,600,000 shares of Class A Common Stock, at a price of $1.25 per share. The Company received net proceeds of $6,381,000 in the PIPE after deducting placement agent fees and escrow agent fees of $619,000.

On June 15, 2026, the Company issued 95,238 RSAs outside of its equity incentive plans to a consulting firm in reliance upon the exemption from the securities registration requirements of the Securities Act of 1933, as amended, afforded by the provisions of Section 4(a)(2) thereof and the rules and regulations promulgated thereunder, in exchange for consulting services. For further details regarding the related stock-based compensation, please refer to Note 7.

As of June 30, 2026 and December 31, 2025, 53,858,083 and 46,006,000 shares of Class A Common Stock were issued and outstanding, respectively. As of both June 30, 2026 and December 31, 2025, 11,700,000 shares of Class B Common Stock were issued and outstanding. As of both June 30, 2026 and December 31, 2025, no shares of Series A Preferred Stock were issued and outstanding.

From time to time, the Company issues shares of common stock in connection with the granting of RSAs and the exercise of stock options under its equity incentive plans. For a detailed summary of these issuances and related stock-based compensation, please refer to Note 7.

Health In Tech, Inc.

Notes to Consolidated Financial Statements

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 six months ended June 30, 2026 and 2025, the rent-related expenses for this lease were $20,812 and $41,624, respectively. The Company had no short-term leases as of June 30, 2026, and one short-term lease as of December 31, 2025.

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 six months ended June 30, 2026, the Company made cash payments of $21,417 and $42,834 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 Consolidated Balance Sheet as of June 30, 2026:

2026		43,477
2027		66,180
Total undiscounted lease liabilities	$	109,657
Less effects of discounting		(6,719	)
Total lease liabilities	$	102,938

The remaining lease term was 1.3 years and 1.8 years as of June 30, 2026 and December 31, 2025, respectively.