1. Do you agree with eHealth's revenue recognition policies or do you share Muddy Waters' concerns that eHealth is using ASC 606 to run a stock promotions scheme?

2. Identify key risks and opportunities of eHealth's business?

120114 Muddy Waters vs. eHealth: The Debate of a "Lifetime" Exhibit 2 Results of Overations Source: efrealth Inc. FY2018-2019 10-K. Notey Financial data for 2017 and 2016 have been adjusted to neflect the impact of the adoption of ASC 606 . Exhibit 3 Balance Sheet uSS fhowemils Year ended Dexember 31 \begin{tabular}{|c|c|c|} \hline Fand7 & Frands & Drang \\ \hline 40,293 & 13,089 & 23,466 \\ \hline 1,475 & 3,601 & 2,332 \\ \hline 109,666 & 134,190 & 174,526 \\ \hline 4,306 & 5,288 & 7,822 \\ \hline 155,739 & 156,166 & 208,146 \\ \hline 169,751 & 211,668 & 414,696 \\ \hline \multirow[t]{3}{*}{4,706} & 7,684 & 10.518 \\ \hline & 0 & 36,621 \\ \hline & 0 & 3,354 \\ \hline 7,287 & 11,276 & 18,004 \\ \hline 7,540 & 12,249 & 10,062 \\ \hline 14,096 & 40,233 & 40,233 \\ \hline 359,118 & 439,278 & 741,634 \\ \hline 3,246 & 5,688 & 24,554 \\ \hline 15,498 & 20,763 & 29,578 \\ \hline 4,693 & 11,013 & 16,612 \\ \hline \multirow[t]{3}{*}{0} & 20,730 & 66,887 \\ \hline & 0 & 4,759 \\ \hline & 876 & 2.570 \\ \hline 2,008 & 1,549 & 2.210 \\ \hline 25,445 & 60,619 & 112,985 \\ \hline 0 & 5,000 & 0 \\ \hline 0 & 19,270 & 0 \\ \hline \multirow[t]{2}{*}{45,089} & 47,901 & 64,130 \\ \hline & 0 & 34,305 \\ \hline 1,920 & 3,339 & 3,050 \\ \hline \end{tabular} Assets Current assets: Cash and cash equivalents Accounts receivable Commissions mecivable - current Prepaid expenses and other current assets Total current assets Commissions receivable - non-current Property and equipment, net Operating lease right-of-use assets Restricted cash Other assets Intangible assets, net Goodwill Total assets Liabilities and stockholders' equity Current liabilities: Accounts payable Accrued compensation and benefits Accrued marketing expenses Earnout liability = current Lease liabilities - current Deferred revenue Other current liabilities Total current liabilities Drbt Earnout liability = non-current Deferred income taxes = non-current Lease liabilities = non-current Other non-current liabilities Stockholders' equity: Preferred stock: Common stock: Additional paid-in capital Treasury stock, at cost Retained eamings Accumulated other comprehensive income Total stockholders' equity Total liabilities and stockholders' equity \begin{tabular}{rrr} 0 & 0 & 0 \\ 30 & 31 & 35 \\ 281,706 & 298,024 & 455,159 \\ (199,998) & (199,998) & (199,998) \\ 204,724 & 204,965 & 271,852 \\ 202 & 127 & 116 \\ 286,664 & 303,149 & 527,164 \\ 359,118 & 439,278 & 741,634 \\ \hline \end{tabular} Source eflealth Inc. FY2018-2019 10-K 15 Pvhihit 5 Nicaooreoation of Rerremne Exhibit 6 Impact of ASC 606 Adoption on eHealth's Financials 120114 21- Exhibit 6 Impact of ASC 606 Adoption on eHealth's Financials, Continued \begin{tabular}{|c|c|c|c|c|c|c|} \hline \multicolumn{7}{|l|}{ Operating Segments } \\ \hline \multicolumn{7}{|l|}{ USS thousands } \\ \hline & \multicolumn{3}{|c|}{ Year Ended December 31, 2017} & \multicolumn{3}{|c|}{ Year Ended December 31, 2016} \\ \hline & \multicolumn{3}{|c|}{ ASC 606 Adoption } & \multicolumn{3}{|c|}{ ASC 606 Adoption } \\ \hline & As Reported & Adiustment & As Adiusted & As Reported & Actiustment & As Adiusted \\ \hline \multicolumn{7}{|l|}{ Revenue } \\ \hline Medicare segment revenue & 102,584 & 39,864 & 142,448 & 80,269 & 41,887 & 122,156 \\ \hline Individual, Family and Small Businesssegment revenue & 69,771 & (21,513) & 48,258 & 106,691 & (35,523) & 71,168 \\ \hline Total Revenue & 172,355 & 18,351 & 190,706 & 186,960 & 6,364 & 193,324 \\ \hline \multicolumn{7}{|l|}{ Segment profit (loss) } \\ \hline Medicare segment profit (loss) & (18,760) & 40,897 & 22,137 & (33,141) & 43,535 & 10,394 \\ \hline Individual, Family and Small Business segment profit & 30,427 & (20,854) & 9,573 & 67,905 & (34,855) & 33,050 \\ \hline Total segment profit & 11,667 & 20),043 & 31,710 & 34,764 & 8,680 & 43,444 \\ \hline Corporate & (26,969) & (1) & (26,970) & (29,071) & (2) & (29,073) \\ \hline Stock-based compensation expense & (9,694) & 0 & (9,694) & (7,266) & 0 & (7,266) \\ \hline Depreciation and amortization & (2,837) & 0 & (2,837) & (3,599) & 0 & (3,539) \\ \hline Acquisitioncosts & (621) & & (621) & 297 & 0 & 297 \\ \hline Amortization of intangible assets & (1,040) & 0 & (1,040) & (1,040) & 0 & (1,040) \\ \hline Other income, net & 327 & 855 & 1,182 & 102 & 1,047 & 1,149 \\ \hline Income (loss) before prov ision (benefit) for income & (29,167) & 20,897 & (8,270) & (5,753) & 9,725 & 3,972 \\ \hline \end{tabular} Source Fr2018 10-K, p. 120-121