Good afternoon, ladies and gentlemen, and welcome to Health in Tech's third quarter 2026 earnings conference call. All participants are currently in listen-only mode. After the prepared remarks, we will open the call for questions. As a reminder, today's conference call is being recorded. If you have any objections, you may disconnect at this time. I will now turn the call over to Lori Babcock, Chief of Staff. Lori, please go ahead.

Thank you, Operator, and good afternoon, everyone. Welcome to Health and Tech's Third Quarter 2026 Earnings Call. Joining us today are Tim Johnson, our Founder and Executive Chairman, Sanjay Chitra, our Chief Executive Officer, and Julia Qian, our Chief Financial Officer. The details of our results are in today's earnings release in our related Form 10-Q to be filed with the SEC. Both will be available on our investor relations website at healthintech.investorroom.com, where a replay of this call will also be posted. Before we continue, please note that today's discussion includes forward-looking statements under the safe harbor provision of the federal securities laws. These statements reflect our current expectations and involve risks and uncertainties that could cause actual results to differ materially. Please refer to our earnings release and SEC filings for the applicable risk factors. We undertake no obligation to update these statements except as required by law. We may also discuss non-GAAP measures including adjusted EBITDA. The relevant definitions and reconciliations to GAAP measures will be provided in our earnings release. With that, I turn the call over to Tim.

Thanks, Lori. Before we discuss our business performance and outlook, I would like to take a moment to highlight an important leadership transition at Health & Tech and formally introduce Sanjay Srishta as our new Chief Executive Officer. Since founding Health & Tech, my vision has been to transform the health insurance industry through technology, innovation, and vertical integration. Over the years, we have built a differentiated technology platform designed to simplify complex processes. Improve efficiency and create greater transparency across the health insurance marketplace. As we look towards the next chapter of our growth, I believe the company has reached an important stage in its evolution. While innovation and technology development will always remain central to our business, our next phase requires an even greater emphasis on commercial execution, operational scalability, business expansion, and the ability to capitalize on strategic growth opportunities. That is the rationale behind our leadership transition. By separating the roles of executive chairman and chief executive officer, we are creating a leadership structure that allows us to dedicate greater focus and resources to two equally important priorities, continuing to innovate and build for the future while accelerating execution and scaling the business we have established. My role as Executive Chairman, I will remain actively involved in shaping the company's long-term strategy, advancing technology innovation, and guiding product development. I will also continue to leverage my industry experience and relationships to identify emerging opportunities and help position health and tech for long-term success. Sanjay, as CEO, will lead our day-to-day operations and be responsible for driving commercial execution, Thank you for joining us. Sanjay brings extensive experience in public company leadership, capital markets, corporate strategy, and business development. Having previously served on our board and worked closely with our leadership team, he already has a strong understanding of our business, our technology, and the opportunities ahead. I believe his experience and capabilities complement my own, and that together we can strengthen health and tech's ability to translate our innovation and strategic vision in sustainable business growth. I also want to emphasize that my transition to executive chairman is not a step away from health and tech. My commitment to the company, our employees, our partners, and shareholders remains as strong as ever. This transition allows me to focus more on my time and energy on long-term strategy, innovation, and the next generation of products, opportunities, while Sanjay provides dedicated leadership to execute and scale our business. Ultimately, this is about building a stronger health and tech, one with leadership capacity to innovate, execute, expand, and pursue opportunities that enhance long-term shareholder value. I'm excited about this next chapter and confident in the leadership team we are building. With that, it is my pleasure to welcome Sanjay Sarista as Chief Executive Officer of Health and Tech.

Sanjay, I turn it over to you. Thank you, Tim, and good afternoon, everyone. It is a pleasure to join you today for my first earnings call as Chief Executive Officer of Health & Tech. I would like to use this opportunity to share my perspective on the business, the opportunities ahead of us, and importantly, the priorities I believe will be critical to translating those opportunities into sustainable growth and long-term shareholder value. Having served on Health & Tech's board and subsequently as a strategic advisor, I have had the opportunity to develop a strong understanding of the company's technology, business model, industry relationship and long-term potential. Stepping into the CEO role, however, provides an even closer perspective on our day-to-day operations, commercial execution and opportunity to strengthen our performance. and one thing that has become very clear to me, we believe health in tech has built a strong foundation. Our key focus and strategic priority now is to translate that foundation into scalable commercial growth and stronger financial performance. And then as it relates to 2026, this really is a year of investment and building for the future. Now let me begin by putting 2026 into perspective. Again, as I said, this has been an important year of investment and capability building for health and tech. We have invested in expanding our sales and distribution network, strengthening the relationship with brokers, carrier, managing general underwriter, MGUs, and strategic partners, and continuing to develop the underlying technology that supports our marketplace. At the same time, we have advanced several significant initiatives, including recently launched Hitrix, Hitchain, and our three-year rate stabilization program. Each of these initiatives address substantial market opportunities in the area of the healthcare insurance ecosystem, where we believe there has been relatively limited technological innovation. Our objective has not been solely to maximize near-term revenue. We have been building the technology, distribution relationship, financial infrastructure and product capabilities that we believe can support a much larger and more diversified business over time. That said, we recognize that certain initiatives frankly have taken longer than originally anticipated. Product commercialization has required more time. Bringing additional carrier capacity online has taken longer than expected. And coordinating the multiple participants required to launch some of our newer product has introduced additional complexity. As a result, The financial contribution from several important initiatives has been pushed beyond our original expectations. I want to be very clear. We are not satisfied with our current revenue performance. Investment is necessary, but investment alone does not create value for all stakeholders. Ultimately, those investments need to be translated into customer adoption, transaction volume, revenue growth, and improved financial performance. This is a standard by which we intend to measure our progress going forward. Throughout my career, I have been fortunate enough to have worked with businesses where the market opportunity was substantial, but realizing that opportunity required aligning commercial execution, operational discipline, organizational capabilities, and capital allocation. I have substantial operating experience scaling new product from incubation to meaningful commercial scale, building first of a kind large scale process plant and large scale renewable assets on a global basis. I share that experience not to suggest that health and tech will follow the same trajectory or the timeline. but because I've seen firsthand what becomes possible when a compelling business opportunity is supported by the right strategy, people, execution capabilities, and disciplined capital allocation. And based on that, my first priority is to be laser-focused on re-accelerating our core business to improve outcome for all stakeholders, which includes our carrier partners, MGUs, brokers, and more importantly, our clients who are looking for attractive and economical health coverage. We're focused on execution and re-accelerating this business as we look into 2027. Our existing platform and MGU-related solutions support the self-funded medical stop-loss market, including employer across small and large group segments. These offerings provide an established commercial foundation upon which we believe we can expand. Just to put some numbers in context, as of October 30, 2026, our platform had approximately $150 million in potential annualized revenue associated with coding activity for policy with anticipated effective dates in November of 26, December 26, and January 27. Approximately 70% of that pipeline was associated with January 1, 2027, anticipated policy effective date, and we expect coding activity for that period to continue developing. I want to emphasize that this pipeline represents potential business opportunities, not contracted or recognized revenue. Actual conversion will depend on underwriting. Thank you. That means working more proactively with brokers. Distribution Partners, Carriers, and MGUs to identify and resolve obstacles that may delay or prevent conversion. We're placing greater emphasis on active pipeline management, stronger follow-through, improved coordination and accountability throughout the coding and placement process. Thank you very much. Strengthening Partner Engagement and Improving the Overall Efficiency of Underwriting and Policy Placement. We also see opportunity to better integrate the products and capabilities within our broader ecosystem. Our existing eDIS and SMR platform, MGU-related solution, HITRX, and three-year rate stabilization program address complementary needs across the self-funded insurance marketplace. Together, they create opportunities to serve a broader range of employers, Our goal is to make it easier for our partners to conduct business through health in tech and to build a marketplace that becomes increasingly valuable as participation and transaction activity grow. This is where I believe disciplined commercial execution can have a meaningful impact on our near-term performance. Priority number two. is really focused on commercializing and accelerating our new growth initiatives. As we remain focused on driving our base business, we're equally excited about moving our newer product and strategic initiative from development into commercialization. We believe there are three of those strategic initiatives that have potential to meaningfully expand our addressable market and diversify and complement our future revenue opportunity. Our three-year rate stabilization program, Let me briefly walk you through each of them, their commercial potential, and where we are in the development cycle. Three-year rate stabilization program. I want to spend a little bit more time on our three-year rate stabilization program because it represents a particularly compelling opportunity and involves a sophisticated structure that requires careful coordination among multiple participants. Traditionally, employers face annual uncertainty, as many of you know, in the healthcare insurance cost. For a self-funded employer, this can create significant challenges in budgeting, financial planning, and managing healthcare expenditures. Our three-year stabilization program is designed to address that challenge through an innovative structure connecting employers, insurance carriers, capital market participants, financial institutions, trustees, and distribution partners. The objective is pretty straightforward, to provide employers with greater predictability in their healthcare insurance cost over a three-year period. For employers, this program is designed to deliver greater budget certainty and improve visibility into healthcare expenses. For a participating insurance carrier, it offers the opportunity to establish longer-term customer relationship and evaluate insurance exposure over a three-year horizon subject to defined underwriting parameters and risk management safeguards. For investors, the structure complements notes supported by credit enhancement from a financial institution with scheduled principal and interest payments governed by the transaction documents. Elkintech's role is to serve as a technology and administrative platform connecting these participants. We coordinate program administration, documentation, communication, collection, and integration with the financial and insurance underwriting process. Our distribution partners manage employer relationship and coordinate the insurance underwriting process. As you can appreciate, successfully launching a program of this complexity requires precise coordination across insurance underwriting, financial structuring, capital markets execution, regulatory requirements, and technology infrastructure. That complexity also illustrates the importance of disciplined implementation. We've already secured our client under a medical stop loss agreement and are working towards the capital market launch. The program financing associated with this initial client remains subject to final structuring and market condition. Beyond this transaction, we believe there is substantial market interest and opportunity in the program. Importantly, any program financing amount and pipeline value should not be confused with revenue to health and tech. Our immediate objective and our goal is to complete the first end-to-end program launch by the end of 2026. Thank you very much. Now the second initiative under our new product line, HITRIX, AI-powered large group insurance marketplace. Our second major initiative is this, an AI-powered platform designed to modernize the quoting, underwriting submission, and placement process for large employer health plans. Today, large group insurance placement remain highly fragmented and manually intensive. brokers routinely manage substantial volume of implied census data, historical claim information, plan documents, and supporting underwriting materials across multiple formats and systems. They must prepare submission for different insurance carrier and MGUs, track responses, compare proposals, and coordinate the placement process. This creates considerable administrative work, inefficiencies, and delays. HITRIX is designed to transform that workflow. Using AI-powered document intelligence, the platform can ingest, extract, normalize, and structure information from files brokers already receive, reducing the need for manual data entry and repetitive formatting. It then enables broker to manage submission across multiple carriers and MGUs, track market activity, Thank you for joining us. Rather than functioning simply as a document management or a submission tool, Hitrix is designed to connect data processing, market access, analytics, underwriting workflow, and transaction execution. We believe this position has to address a large existing market where billions of dollars in annual premium are supported by workflows that remain heavily dependent on manual processes. Equally important, we're not bringing this product to market without an established distribution foundation. As of September 30, 2026, our ecosystem included 984 brokers, and many more. As transaction activity increases, HITRX could also generate a growing base of structure underwriting and placement data. supporting future analytics, automation, and AI-enabled capabilities. Our current objective is to launch the minimum viable product in the first quarter of 2027 and progressively expand its capabilities and commercial adoption throughout the year. Now, let me touch on H-AIN, which we believe is transforming healthcare claims administration. This is our major third initiative as our new product launch. H-AIN addresses another significant source of inefficiency in the healthcare system, Thank you very much. Transparency and Efficiency of Certain Claims Administration Process. H-CHAIN is designed to connect healthcare providers, third-party administrator, employers, and other authorized participants through secure, verifiable data and transaction workflows. For hospitals, clinics, and other healthcare providers, the opportunity is to shorten payment cycles, reduce reconciliation requirements, and improve working capital efficiency. Our longer-term vision is to reduce certain payment processes that traditionally take weeks to a much shorter settlement period, potentially approaching next-day settlement where the necessary conditions are met. For the TPAs, the platform is intended to automate aspects of claims administration, improving processing efficiency, and reduce manual intervention. For employers, a chain could provide greater transparency into claims activity, more timely access to information, and opportunities to benefit from faster payment arrangements and improved cost management. We believe the combination of AI-driven processing and verifiable transaction infrastructure offers a meaningful opportunity to modernize part of the healthcare payment ecosystem. Our objective is to launch an initial minimum viable product during the second half of 2027. As with our other new initiatives, our focus is on validating the technology, establishing the necessary ecosystem relationship and creating a clear path towards commercialization. Taken together, these three initiatives illustrate the breadth of opportunity we see ahead of Health in Tech. But the most important point is we're moving from a period primarily focused on building new capabilities towards one increasingly focused on building those capabilities to market and generating measurable commercial results. And finally, my third and somewhat of an obvious priority is to strengthening operational discipline and financial performance. This is, you know, it's pretty critical how we operate the business and allocate capital. We have invested significantly in technology, product development, sales capabilities, and infrastructure. As a result, our operating cost structure reflects the investment we've made to support future growth. Going forward, we need to be increasingly disciplined about where we deploy resources and how we measure the returns on those investments. The questions I'll be asking are straightforward. What are we generating the greatest commercial return? which initiatives are positioned to contribute most meaningfully to revenue and profitability? Where do we need additional capabilities to accelerate execution? And where can we improve efficiency, simplify processes, or redeploy capital to higher value opportunities? This is not about cutting our way to growth. It is about building an organization where investment decisions, operating priorities, and financial outcomes are closely aligned. We will also be focused on strengthening our organizational capabilities, Thank you very much. As we commercialize our new products and expand our existing business, we will evaluate the appropriate level of investment, the timing of capital deployment, and the potential return associated with each opportunity. Thank you very much. and many more. Health in Tech established an innovative technology foundation, developed meaningful industry relationship, and invested in several initiatives that we believe address significant market opportunity. The next phase is all about execution. In the near term, that means improving conversion across our existing business, continuing to bring our three-year rate stabilization program to market, and maintaining disciplined operational and financial management. As we move into 2027, our priorities will include scaling HITREX, advancing HITChain, expanding our distribution capabilities, and evaluating strategic growth opportunity that can further strengthen the business while simultaneously remaining later focused on re-accelerating our existing base of business. We will measure our progress not simply by the size of the market we address or the opportunities in our pipeline, but by our ability to convert those opportunity into revenue operating performance, cash generation, and long-term shareholder value. I am very excited to work closely with Tim, our board, and the entire health and tech team as we move into the next chapter. Now, before I turn it over to Julia, let me just kind of talk about what should you all expect for the remainder of 2026 and how are we thinking about 2027. As you saw in our press release, we updated our full year 2026 revenue outlook to approximately $30 million. For the balance of 2026, our focus is really on execution ahead of the renewal and placement cycle. We want to get brokers using the products, expand participation from underwriting partners, work through the opportunities already in front of us, and be better positioned as those policy effective dates come around. As we move into 2027, we believe there is an opportunity for these initiatives to make a more and many more. Thank you very much. and many more. I look forward to working with the team and keeping you updated as that work progresses. With that, it's my pleasure to turn it over to Julia.

Thank you, Sanjay, Sudarsana, everyone. We believe our reported results in this quarter do not yet reflect the opportunity we are building towards. I want to help bridge the gap by starting with forward-looking metrics that show where the commercial activities on our platform actually stand today. and then talking through what sits underneath of the reported number. Let me begin with our forward revenue visibility. Contracted revenue, which represents revenue that is already contractually committed under active enforced policy, but that has not yet been fully recognized under GAAP accounting principles. That totaled $32.7 million for the first nine months of 2026, of that 24.4 million has already been recognized as GAAP revenue through September 30th, 26. Before the enrollment adjustment and the refund liability and with 6.1 million scheduled to be recognized in fourth quarter and the 2.2 million flow into 2027 for GAAP accounting, we have already secured 30.5 million of 2026 revenue with the remaining 2.2 million providing a visibility as a starting point for 2027. Beyond what is already contract, our pipeline revenue presents policy current encoding or bonding stage, plus policy has been contracted since quarter end, stood at 1556.4 million as of October 30, 2026. Those are the codings policy for the three months only. November, this year, December, this year, and January next year. Obviously, with January, it's about 17% of the total current pipeline, of which the $2.6 million is already contract in December. And the contract in October, excuse me. And the remaining $153.8 million carries expected conversion rate of 3% to 7%. meaning it would generate 9.3 million to 10.7 million revenue just for these three-month policies. And our platform placed the value or PPPV which matches the aggregate contract revenue, contract value of the plans on our platform including premium, client fund, and administrative fees stood at 91.8 million as of September 30th. I want to put this number in context. Our sales pipeline grew meaningfully, driven by full completion of onboarding new carrier and entering to the peak season of our sales cycle, which is December and January effective day policies. Now, the next step is laser focused to drive conversion rate of the pipeline revenue, turns out to the contractual revenue, as Sanjay mentioned. Our distribution channel rely on close collaboration between our internal sales team, and our network of the broker partners. As we introduce new product and expand our marketplace capability, make sure our brokers fully understand these solutions and how to bring them to the market become increasingly important. Following the recent launch of Heatrix, we are placing great emphasis on internal sales training and the broker education to strengthen the collaboration. Our goal is to equip our team to better support brokers throughout the submission and the placement process, helping move more opportunity towards to complete the placement. As we enter the year-end renewal season, we believe these efforts together with the broad carrier participation and the help to improve the conversion rate, our existing pipeline revenue to the contractor business and ultimately will be the revenue for us to recognize for the GAAP accounting. Our distribution footprint also continues to expand as we invest. We ended the quarter with 984 distribution partners, compared with 849 years ago. It is approximately a 15.9% year-over-year increase, which tells you the broker, TPA, and agency network that bring the business into our platform is continuing to grow. even though this transition period is a little bit slowed. Now, turn to reported gap revenue. Total revenue for third quarter was $6.6 million compared with $8.5 million a year ago. And for the first nine months of this year, revenue was $23.4 million compared with $25.8 million last year. Our SMR fee revenue, which is earned on the per-enrolled employee per month basis across our platform, was essentially unchanged year-over-year on the first nine-month basis at $20.04 million compared with $19.99 million in the prior year period. Our underwriting model revenue, which is our ICE subsidiary, as a certain percentage of our carrier premium declined more sharply to $3.37 million for the first nine months of 26 compared with $5.83 million a year ago. In other words, our largest revenue line, the in-road-based SMR fee, holds essentially steady year-over-year even through the carrier transition. The compression in the reported revenue was concentrated in the premium-based ICE fee rather than the broad weakness across the business. So the pressure on the reporting revenue reflects timing or recognize the carrier transition that is our view is now substantial behind us. Gross margin for the third quarter was 46.5% compared with 16.6% a year ago. And for the first nine months of 2026 was 49.1% compared with 65.1% of the prior year. As mentioned, the last quarter beginning in the January 26th, we introduced a pre-designed self-funded health plan that combines our platform capability with additional services including The plan administration provided by TPA and their vendors under this expanded service model, the related TPA and the vendor fees are including in our cost of revenue. As a result, we are now delivering a more comprehensive solution to our customer, but also incurring additional direct service costs, which has contributed to the year-over-year decline in the gross margin. Even though the underlying economics of the business have not been changed, and we see these as the trade-off as we expand our service offering and make it easier for broker and employee to access a more integrated solution. We believe our gross margin would maintain in the range of 45% to 50% in the coming quarters. Move to the operating expenses. Total operating expenses for the third quarter was $11.5 million compared with $4.7 million a year ago. This point, which is $6.8 million year-over-year increase, was mainly driven by a provision charge of $5.3 million in the higher sales and the marketing expenditure of the $1 million, with tech development expenses of $0.7 million partially offset by the saving of the G&A reduction of $0.3 million. Starting with sales and the marketing, sales and the marketing expenses were $2.1 million for the quarter compared with $1 million a year ago. The increase is mainly entirely the variable basis in nature. The larger driver is tied to our expanding distribution channels through the short-party agencies, which are variable-based payout. The fixed component of the sales and the marketing expenditure remains disinflamed, consistent, mainly flat. The part of the increase is mainly going to the variable base of the agency fee. General and administrative expenses were $3.1 million for the quarter, compared with $3.5 million a year ago, and $10.1 million for the first nine months of 26, compared with $10.5 million year-by-year. For the both quarter and the nine-month period, G and A are actually coming slightly below last year, which reflects the distancing the cost management costs our corporate function. With the mixed operating division expenses decreased year-over-year as a result of the workforce optimization initiative we have been implementing, partially offset by the higher division cost because of stock-based compensation. Taking all together, these demonstrate our commitment to manage our cost base. We will continue to invest what is matters for us for the long term. Now, the provision for the credit loss. was $5.3 million. Lease is very substantial. That's why you can look at the total expenses increase. So for the first, for this quarter, $5.3 million and $6.1 million for the first nine months. Compared to the last year, which is now, that's mainly the part of the increase. Lease presented the single bids to drivers. I want to talk about lease a little bit more in the detail. The provision reflects the management's update assessment on the credibility of our current book. So 2.4 million reflect deferred administration surplus receivables associated with a legacy arrangement, which we took full allowance. 1.9 million of the bad debt expenditure related to accounts receivable connecting to the carrier transition reconciliation still in progressing. and 0.9 million relative to the loan receivable write-off. As we take priority for focus on the U.S. market, we are no longer to focus on the overseas. With these limitations, we are taking these charge. As we looking at the future, this is the right discipline for us to heading to the leadership transition and the fresh strategy plan. Research and development expenses were $0.9 million compared with $0.2 million a year ago. This increase is a compensation shift rather than a step up in overall technology investment. If you look at our total technology spend, meaning expenditure of R&D plus capitalization of the software development together, the total is broadly consistent year over year. What changed is where sits on the financial statement. with its balance sheet on the P&L. Our development activity during 2026 has been weighted more towards gathering business requirements, identifying features, and evaluating alternatives as we scope our next generation platform and AI-empowered capabilities. On the GAAP accounting, these early stage planning and evaluations do not meet the criteria for capitalization and extend the flow through the income statement statement as R&D expenses. So the increase on R&D line reflect where the development cycle not an overall increase in the total technology spend. That brings me to the profitability adjusted EBITDA. For the quarter was negative 3.9 million compared with the positive 1 million a year ago. And for the first nine months of 26 was negative 6.6 million compared with positive 3.8 million in the prior year period. Net loss for the quarter was 7.1 million, which including 5.3 million one-time credit provision, as I just talked through. That means 0.11 cents per basic and diluted share compared with net income of 0.5 million or 0.01 per diluted share in the prior quarter. For the first nine months, the net loss was 11.2 million. which include $6.1 million of the one-time credit loss provision or $0.1 per basic and diluted share compared with net income of $1.6 million or $0.03 per diluted share in the prior year period. Excluding the one-time provision, the remaining year-over-year declining reflects lower revenue due to the timing of the policy effect when we have the carrier transitioning. The planned administration service cost is tied to our new self-funded planned administration service launched in January this year, and our continued investment in the sales, marketing, and distribution. All the investment we have to make in the lease year will support the long-term growth, and the financing-related charge tied to these capital rights were completed, we are completing in this quarter. Turning to cash flow, our operating cash flow has improved every single quarter of this year. We had a negative 3.3 million operating cash in the first quarter, then negative 2.9 million in the second quarter, and then the negative 1 million in the third quarter. As we continue to improve the operating cash flow burn quarter by quarter, representing approximately 68% reduction from the first quarter to the third quarter. The sequential improvement in the third quarter was driven by actual allocation of the accounts receivable, improvement of accounts receivable. In fact, accounts payable paid on through the third quarter also generating working capital improvement, not a cash provision preservation story. For the first nine months of 26 as a whole, operating cash flow was 7.3 million. We expected the further improvement in operating cash flow as we commercialize the new service and the product in 2027. We invested $1.8 million in software development during the first nine months of the 26th, reflecting our continued commitment in the platform investment. Heading to the balance sheet, we ended the quarter with $10.1 million in cash and the cash equivalent, compared with $7.7 million at the end of 25, after preserving the $7.3 million operating cash used and the $1.8 million of the software investment through the first nine months. Our cash position is approximately $2.5 million higher today than it was entering the beginning of the year. The headline message is that we built the capital base we need, and we are entering 2027 from a stronger balance sheet position than we entered 2026. With multiple new products that have completed major development and its target to be commercialized in 2027, We are confident that 2027 will be a very different year. To close, lease was a transitional quarter and a transitional year. And the reported number flat, the three things happened at the same time. The carrier timing dynamics. We described the last quarter and the lease call. A business mix shift that compressed gross margin without changing underlying economics. And the balance sheet We continuously monitor very close. So our distribution network expanded by approximately 15.9%. Our operating cash flow continuously improved by approximately 68% from the first quarter to the third quarter of the year. Our cash position entered the quarter higher than it was the starting of the year. We built the balance sheet capabilities to support our continued execution. As Sanjay mentioned, we are completing a comprehensive review of 2027 under his leadership. And we expect to come back to the market at the next quarter earnings call to provide a more detailed view of what 2027 will look for health in tech. With that, I now turn the call back to Sanjay.

Thank you, Julia. And again, before we open it up for Q&A, I just want to emphasize that We're not satisfied with weaker revenue and higher expenses. We believe in the opportunity ahead of us, but the responsibility to turn that opportunity into result is ours. We know the market will measure us by the progress we deliver in the coming quarters. We welcome that, and we look forward to updating you with our results. With that, let's turn it to the operator to start Q&A.

Thank you. We will now begin the question and answer session. To ask a question, you may press star, then 1 on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw the question, please press star, and then 2. At this time, we'll pause momentarily to assemble the roster. The first question will come from Alan Klee with Maxim Group. Please go ahead.

Oh, hi. So I just want to understand a little about the revenue being down year over year. I understand that some of your initiatives got pushed out, but in the core small market, how much of it is due to, would you say, just that your carrier was not available? Or is there a change in the competitive environment? for something to do with execution. Just a little more color on that would be helpful. Thank you.

So, Alan, I can take these questions. Julia is there for the company. Thank you. It's a great question. So we're adding on a new carrier this year, which results in a temporary delay of the implementing onboarding then because partially a lot of the setup in the system, the new carrier need to come in. that really slowed down, temporarily slowed down the intake of the business, including converting the business from the code to the contractual revenue. So as you can see, the pipeline, we have a very substantial pipeline building up. It's really, to us, it's really the timing. For us, when the new carrier come out, there will be the transition period, and all the service vendors take a much longer time than we anticipated, in the simple words, is. There are certain period time the cells is very, very slow because a lot of things systems should take care of it. We have to do additional manual process to make sure compensate the slowing implementation of adding on the carrier, putting on the system. Now with this substantially completed, we should look at at least come back to the expected trajectory of being processing through the system by our normal speed.

Thank you. Okay. And then this provision for credit losses, I think I just need to understand this a little bit. Your accounts receivable as of the end of June 26 was $8.5 million, and you took a write-down of $5.3 million, so over half of your receivables. What about it? Explain it again of why it was so big, and then Is there any reason, why is it going to change that we don't have to worry about this in the future? And then also, I don't know if it's due to taxes or what, but if I look at your add-backs in adjusted EBITDA, you're adding back lower amounts than the $5.3 million. Why is that? Thank you.

Thank you, Phil. When we look at the provision of the accounts receivable, we really took down the few things. It is the provision, total is $2.5 million, which including of the provision of the surplus admin and the receivables. So surplus admin is about $1.9 million. The rest is the receivables. So the receivable is aging-based, as I mentioned, because of adding on the new carrier and the old carrier pays a little bit slower. when we're looking at a massive reconciliation need to happen before the policy year end. So the agent's getting longer. From the GAAP accounting, very prudent perspective, we take that provision. Also the surplus at the main cost is the same thing. We are taking the provision. So total is 2.5. Then the other is the provision for the loan receivables roughly it's about 800,000, more than 800,000 we also took as provisions. That was the arrangement we had before the company went public and we also discussed with various documentation on the case and the cues. When we looking at that was advance to the agency help us to do the oversee market development, particularly in London and UK. and give the market dynamic condition and the economic change and we want to focus on our operations in the U.S. So instead of the banks being alone and we decided not pursue the opportunity despite there are opportunity being introduced. So we choose to take that as a write-off. So total the one-time write-off together is about $3.5 million.

Okay.

You know, some of these, my questions are minutiae, but for your three-year rate plan, is there a way to think on average how much higher a premium rate someone would pay than if they just did a one-year policy?

So let me jump in on that, right? So we'd love to come and talk to you about that in a little bit more detail when we report our Q4 numbers because as we touched on the call, we're literally knee-deep, if you would, right now. We already have a customer. We're working with a placement agent. So given that we're in the midst of all that, so give us at least a quarter here, and we'll be happy to share with you a lot more detail once we actually are able to get one of these products launched in the market with the bond investors.

Okay, maybe one other question.

Please.

With the new initiatives of the three you mentioned, do you think that business can be added with them throughout the year, or do you think it's going to be much more weighted on kind of enrollment seasons later in the year?

As I mentioned, we're really going through a deep dive of putting together our plan for 2027 right now. And we will obviously give you a lot more detail when we report our Q4 numbers. But just on a high level, as we touched on the call earlier, HITRIX is really probably Q2 opportunity at the earliest in terms of having some contribution, a new customer. and many more. and many more. Well, one thing I do want to emphasize here, though, right? I mean, these are things that are obviously going to re-energize the business, help with the re-acceleration of the growth. But our primary focus, frankly, is really how you get our base business back growing, given the pipeline we have. And we're spending a lot of time really thinking through how do you improve the conversion rate, how do you really grow that base business meaningfully as we go into 2027. But, again, give us one more quarter, and we can articulate some more specific on that.

Okay, thank you so much. Thank you.

The next question will come from George Sutton with Craig Hallam. Please go ahead.

Thank you. Welcome to Sanjay. Thank you, sir. So I've got 1,000 questions, but I'm going to limit it to three. First, on the three-year lock product, Can you just give us an update on the financing structure? Is that set yet? Are you still working through that? And when would we expect to have a full financing structure in place?

You want to take that one, Julia, first?

Yeah. So, Josh, I can take that one. I think for the three-year product, as we shared, we have the first con. There's two parts. One is medical insurance, which is already completed. and in terms turn to the notes on the capital market it's been progressing and probably the end of the year we are thinking it could be improved months or slip over the months because it's heading the holiday season. It's kind of very hard to predict. So you have to think about this as a bundled solution in terms of the insurance plus the capital market. Insurance part is already done and the capital market has been progressing. So we already substantially completed the insurance part. However, for the official launch, the capital markets need to be done. Then we can announce the official launch. So that's why we are later focused to push that product forward with very substantial pipelines about the three years. We want to make sure that gets done right.

Zain Hasan, Lori Babcock Placement is done right so that when we are actually launching even a larger, bigger product and opportunity in 2027, hopefully it becomes a little bit of a rinse and repeat kind of an approach. So if the first one takes a little longer, our approach right now is we've got to make sure that it gets done absolutely the right way because it's really, relatively speaking, it's a complex product, right? It hasn't been done before. So that's really why we're taking probably even a little bit more time and prioritizing better execution rather than just speed.

I understand. So relative to Hittrix, do you have an aid carrier that is providing a backstop on this yet?

I can take that one too. And Tim, please add if I miss anything here. So we are actively working on that, George, as you can imagine. and since I am now three weeks into the job, I would not want to give you the exact timeline of when we think we're going to get that done, but rest assured that's absolutely in the top three priority of what we want to accomplish here. But just to give you another sense, right, we're also trying to continue to grow our base business with or without even the A carrier, if you would. We're also trying to be very mindful of that. There's a lot of volume of business to be done, but look, getting an A carrier is obviously a very big focus for us. and not just for Hedrix, right, even to grow our large-scale business, even on our core business side. So I'm dying to give you a timeline, but give us a month or so here, and we're really working very diligently on making sure that this gets done the right way, because I know we've talked about this many times before, and the last thing I want to do on my first earnings call as a CEO of the company is give you a timeline and not meet that, but this is really a very top priority for us at this point in time. Jonathan, do you have anything to add?

Yes, George, I have to think about it. We're agnostic to the carriers because this is a complete transformation as to how brokers work with them. We will send and initiate new submission processes with any carrier. It's the carrier that the broker chooses. So the process that we use, that's what makes it so unique and special about it. We don't care which carrier they want to work with. We just improve the process and the entire timeline with which they can get it to the market, get the proposal back, compare it, and sell it. It's 100% automated. I understand.

Okay. Final question. Relative to the pipeline revenue, so... I like that Sanjay is coming in from the outside because an insider like Tim and Julia says, you know, historically we've had a 3% to 7% conversion rate. I would hope Sanjay comes in and says, well, that means we're not converting 93% to 97%. How do we have a dramatic change to that number? Okay.

Thank you very much. and many more. I just quickly asked Tim, using those historical 3% to 7% rates,

With the improvement in the technology, I assume there's room to meaningfully improve that over time. Is that a fair assessment, or is there something structural that maybe I'm missing in that equation?

No, we need to take a more active approach at looking at everything in the system. But the way I look at it, George, is the way I think I've explained it before is It is a system. Should we have more sales based upon the volume coming in? Sure. The three and seven, I used to complain to everybody about how low that was because that's the rest of the market. And what we're doing is making it way more convenient to make the sales happen. And since they're not happening, we have to get more aggressive with our brokers. Why are they not happening? We need to start better communication with them to make sure that we can get that number up there.

All right. Perfect. Thanks, guys. Thanks, George.

The next question will come from Marla Marin with Zax. Please go ahead.

Thank you. So following up on some of the conversation in the Q&A, you know, you talked about the goal is to convert, you know, a greater amount of opportunities into pipeline and then from pipeline into contracted revenue. I think a couple of the things you cited as ways you intend to do that is greater interaction with some of your distribution partners and brokers and deepening relationships with them. Do you think that you have an adequate in-house team at the moment in order to accomplish that, or should we expect to see continued or some uptick in investment in expanding the personnel?

Tim, I'll start and please add if I miss anything. So thank you for that question. So look, again, so we're going through strategic evaluation of everything, but as I sit here today and based on what I see, I think we've got some excellent folks in our organization that really know what they're doing. and I think we've had the year where there's been so many things that actually kind of frankly didn't play out as we had anticipated. So as we sit here right now, could we add more sales team if that actually is going to generate more revenue? Sure. That is a great return on our invested capital, right? But I don't think it is a whole set of change, if you would, in terms of what we need to do. It's really more about getting more organized, tracking things, making sure things are closing on time, right? and, frankly, pushing everybody, including myself and all the executive team, not just the people that are in the sales department or the underwriting department or managing the third-party administrator. It's really the entire team effort where we're going to really continue to push hard. But I really don't think at this point in time we need to do any kind of a wholesale change, if you would. And if we add a few more additional bodies that are going to be calling a lot more brokers and things like that, we will certainly evaluate that. And as a matter of fact, we're literally in the midst of evaluating some of those proposals and plans, how much that would help. Is that something we need to do? When do we do that? But again, it's not a wholesale change. It's probably more of a tweak and a few additional ads if that's what it takes for us to really be able to deliver on that.

Okay. I just wanted to add on one thing. I think this year, 2026, we have built a lot of functionality and the change of the systems. And Tim mentioned the factors average is 3.7% closing ratio. Ways the system should be doing much better, like we did before, is just a function of the training of the broker, training of the users, right? So once you have system push out, you also need to have people to really know what to use, how to use that. and that's always a little bit of curve. So the combination of the focus and the salespeople to get there, to communicate to the broker, to improve the training, just, you know, rocking in the tackling. Those are the disciplined, you know, execution rather than adding more people. It's more disciplined. Yeah, absolutely.

Okay. Hope that answers your question.

Yes, very comprehensive answer. Thank you. I appreciate it. So I'm switching topics here, and Sanjay, you've mentioned in your prepared remarks and in the Q&A that you've been in your current role now for all of 20-plus days. There's a lot going on. So you also mentioned, or the company mentioned in the prepared remarks that there's, you know, in addition to organic initiatives, there's a potential opportunity for some strategic M&A. to complement organic growth. But there's an awful lot going on right now in terms of focusing on executing against the existing opportunities. I'm just wondering if you have to give us a sense of is there already a bit of a pipeline of potential M&A opportunities? Are there early conversations at this point? Or are we talking about something, you know, further down the road?

It depends is how I'm going to respond to that probably, right? But look, if a really compelling opportunity comes along, we'll obviously evaluate that. But is that a part of my 30-, 60-, or a 90-day plan to immediately move on that? Probably not. For the next 90 days, it's really hunker down, focus on driving the core business, focus on ideally positioning all of our new initiatives, really spent a lot of time getting our three-year product launch, right? But look, I think given the lack of, frankly, disruption in the broader healthcare insurance space, if there are opportunities that comes our way, that makes a lot of sense, then we'll certainly evaluate that. But at this point in time, that's why I said it depends, right? If a compelling opportunity comes along, we'll certainly entertain, but we're not necessarily going out and saying, hey, gee, let's go see who we can buy here in the next 60 days.

Okay, great, thanks. And then my last question, it's a housekeeping one, and I completely understand your reluctance to give us any kind of, you know, to commit to any kind of timing or cadence for 2027 or, you know, revenue outlook. That makes total sense. But given that, you know, we're talking about really bringing some of these initiatives to market in 2027, Are you confident at this point that you will be in a position to meet what is generally the industry sales cycle in time in order to really benefit from some of the initiatives in 2017?

Well, that's the goal, right? And I think the goal is to obviously get back on the growth track. And the only thing that we just want to make sure when we articulate what that is going to be, that we're really spending a bit more time and digging a little deeper, if you would. We're already doing that. What I've seen so far, as you know, I used to be on the board, so I am familiar with all the great things that the company has done. I served as an advisor as well, so now coming in as a CEO of the company, and really focusing on a day-to-day, there's a lot of great things here, right? It's really more about blocking and tackling, getting the base business back on track and growth, all these new initiatives. So the goal is to get on the growth. The question really that we're trying to dissect here is what is that rate of growth that is gonna allow us to really get to that path of profitability, EBITDA positive, the whole nine yards, but that's why I'm really hesitating to sort of pin down the number or even give you a range So given, I think, a bit of a transitional year that we've gone through, but the goal is to obviously get back on the growth track in 2027 is the best I can give you at this point in time.

Okay. Thanks very much.

Thank you.

Thank you. Seeing no more questions in the queue, let me turn the call back to Lori Babcock for the closing statement.

Thank you all again for joining us today. This concludes the call. You may disconnect.