SHARECARE, INC. MANAGEMENT REPORT AND ANALYSIS OF FINANCIAL POSITION AND OPERATING RESULTS (Form 10-Q)

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The following discussion and analysis of the financial condition and results of
operations of Sharecare, Inc. (for purposes of this section, "the Company,"
"Sharecare," "we," "us" and "our") should be read together with the Company's
audited financial statements as of and for the years ended December 31, 2021,
2020 and 2019, together with the related notes thereto, included in our Annual
Report on Form 10-K filed with the SEC on March 31, 2022, and Sharecare's
unaudited interim financial statements as of June 30, 2022 and for the three and
six months ended June 30, 2022 and 2021, together with the related notes
thereto, included elsewhere in this Quarterly Report on Form 10-Q. Actual
results may differ materially from those contained in any forward-looking
statements.

Caution Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements
regarding, among other things, the plans, strategies and prospects, both
business and financial, of Sharecare. These statements are based on the beliefs
and assumptions of our management. Although we believe that our plans,
intentions and expectations reflected in or suggested by these forward-looking
statements are reasonable, we cannot assure you that we will achieve or realize
these plans, intentions or expectations. Forward-looking statements are
inherently subject to risks, uncertainties and assumptions. Generally,
statements that are not historical facts, including statements concerning
possible or assumed future actions, business strategies, events or results of
operations, are forward-looking statements. These statements may be preceded by,
followed by or include the words "believes," "estimates," "expects,"
"forecasts," "may," "will," "should," "seeks," "plans," "scheduled,"
"anticipates," "possible," "continue," "might," "potential" or "intends" or
similar expressions. Forward-looking statements contained in this report
include, but are not limited to, statements regarding our expectations as to:

•our ability to realize the expected benefits of the Business Combination;

•our business, operations and financial performance, including:
•expectations with respect to our financial and business performance, including
financial projections and business metrics and any underlying assumptions
thereunder;
•future business plans and growth opportunities, including revenue opportunities
available from new or existing clients and expectations regarding the
enhancement of platform capabilities and addition of new solution offerings;
•developments and projections relating to our competitors and the digital
healthcare industry;
•the impact of the COVID-19 pandemic on our business and the actions we may take
in response thereto;
•our expectations regarding anticipated and future partnerships or other
relationships with third parties and future acquisitions, as well as potential
strategic reviews we may conduct;
•our future capital requirements and sources and uses of cash, including
potential share repurchases and our ability to obtain additional capital in the
future and fully access our Revolving Facility; and
•our ability to recognize performance-based revenue;

• our status as an EGC and our intention to take advantage of the accommodations available for EGCs under the JOBS law;

•our success in retaining or recruiting, or changes required in, our officers,
key employees, or directors, including our ability to increase our headcount as
we expand our business; and

•the other estimates and matters described in this Quarterly Report on Form 10-Q
under the caption "Management's Discussion and Analysis of Financial Condition
and Results of Operations."

These forward-looking statements are based on information available as of the
date of this report, and current expectations, forecasts and assumptions, and
involve a number of judgments, risks and uncertainties. Important factors could
cause actual results to differ materially from those indicated or implied by
forward-looking statements include, but are not limited to, those set forth in
this report and in the "Risk Factors" section of our Annual Report on Form 10-K
filed with the SEC on March 31, 2022. Accordingly, forward-looking statements
should not be relied upon as representing our views as of any subsequent date,
and we do not undertake any obligation to update forward-looking statements to
reflect events or circumstances after the date they were made, whether as a
result of new information, future events or otherwise, except as may be required
under applicable securities laws.

Should one or more of these risks or uncertainties materialize, or should any of
the underlying assumptions prove incorrect, actual results may vary in material
respects from those expressed or implied by these forward-looking statements.
You should not place undue reliance on these forward-looking statements.
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Insight

We are a leading digital healthcare platform company that helps members
consolidate and manage various components of their health in one place,
regardless of where they are on their health journey. Our comprehensive platform
is a health and well-being digital hub that unifies elements of individual and
community health into one experience in order to enable members to live better,
longer lives. We are driven by our philosophy that we are "All Together Better"
as well as our goal to turn individual progress into community transformation.
Given a unique blend of expertise across technology, media, and healthcare, we
have, through a number of strategic acquisitions and integration of key
technologies and capabilities over the last ten years, built our platform into
what we believe is the most comprehensive and seamless experience currently
available in the digital healthcare space.

Our business combines business-to-business and direct-to-consumer sales models
and functions on a more distinctive business-to-business-to-person model.
Focusing on the individual, we aim to provide a solution that we believe is more
comprehensive than other digital platforms by bringing together scientifically
validated clinical programs and engaging content to deliver a personalized
experience for our members, whether they come to us by way of the workplace, the
exam room, or the living room.

We derive net revenue from multiple stakeholders and while we are focused on the
individual's unique experience, our platform is purpose-built to seamlessly
connect stakeholders to the health management tools they need to drive
engagement, establish sustained participation, increase satisfaction, reduce
costs, and improve outcomes. As we expand our offerings and look to further
develop our technologies, we continue to consider the distinct needs of each
client channel as well as opportunities to better connect and cross-sell while
we grow and integrate our solutions into one seamless platform.

Our unique platform can be broken down into three customer channels:

•Enterprise: Our enterprise channel includes a range of clients - from large
employers and healthcare systems to government agencies and health plans - that
use our platform to engage with their populations, dynamically measure the
impact of that engagement, and efficiently deliver health and wellness services.

•Provider: Our suite of data- and information-driven solutions for healthcare
providers are tailored to improve productivity and efficiency and enhance
patient care and management while upholding the latest compliance, security, and
privacy standards.

•Life Sciences: Our robust platform and suite of digital products and medical
expert knowledge provides members with personalized information, programs, and
resources to improve their health and well-being, and affords sponsors the
opportunity to integrate their brands into Sharecare's consumer experience in a
highly contextual, relevant, and targeted environment.

Recent developments affecting comparability

Impact of COVID-19

We continue to closely monitor the impact of the COVID-19 pandemic on all
aspects of our business. With the emergence of COVID-19 variants and increased
vaccination rates, the status of ongoing measures varies widely depending on the
country and locality.

The pandemic has not had a material adverse impact on our consolidated financial position, results of operations and cash flows related to this matter. Due to the wider economic impact, clients may face liquidity issues and may be slower to pay or withdraw from their commitments altogether. However, the long-term financial impact related to the pandemic remains uncertain.

Given the volatility of the circumstances surrounding the pandemic, Sharecare
has evaluated potential risks to its business plan. Further economic slowdown
could delay Sharecare's sales objectives for new business for its digital
product. In addition, Sharecare may be impacted by currency fluctuations, as the
U.S. Dollar has gained strength during the pandemic, with the biggest impact
thus far being to the Brazilian Real.

Main factors and trends affecting our operating performance

Our financial condition and results of operations have been, and will continue
to be, affected by a number of factors, including our success with respect to
the following:
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•Expanding our Footprint.  We believe that our current client base represents a
small fraction of potential clients that could benefit from our highly
differentiated solutions. We will continue to invest in our sales and marketing
efforts and leverage our partner relationships to continue to acquire new
clients, including individuals, providers, employers, health plans, government
organizations, and communities.

• Develop our relationships with existing customers. We also believe there is significant opportunity to generate growth by maintaining and expanding our relationships with existing customers, including:

•increasing engagement and enrollment of eligible members with our existing
enterprise clients through continued sales and marketing efforts, including
targeted next-generation digital modeling and marketing, and capitalizing on
insights from claims ingestion (the process by which we receive and process
information from our clients), population risk stratification and incentives
management;

•promoting our marketplace of existing targeted digital therapeutics to close
gaps in care in high-cost areas (with incremental fee per enrollee), which we
believe represents a $1 billion revenue opportunity within our currently
contracted clients; and

•expanding our relationships with our top 25 supplier customers with the ability to extend our supplier products and services to over 7,000 additional healthcare sites.

•Offering Additional Solutions.  We believe there is significant opportunity to
cross-sell our provider solutions to existing accounts, including deploying our
value-based care and payment integrity solutions to approximately 6,000 health
system clients.

•Growing our Platform.  We are constantly evaluating the marketplace for ways to
broaden and enhance our client and member experience, improve clinical results,
and increase revenue through product innovation, partnerships, and acquisitions.
We intend to continue to leverage our expertise through adding digital
therapeutics partnerships as well as the acquisition of products and services
that are directly relevant to our existing clients. Additionally, we believe our
strong and embedded client relationships provide us with unique perspectives
into their evolving needs and the needs of their populations.

•Evolving our Products to Cater to an Evolving Industry.  As the digital
healthcare industry grows, we closely monitor evolving consumer trends and
organizations' needs so that we may adapt our platform to better suit our
clients' demands. Since March 2020, the COVID-19 pandemic greatly accelerated
the demand for virtual care solutions and resulted in rapid growth and increased
adoption of digital health technologies, which Sharecare was in a unique
position to undertake. By building on our deep expertise in handling and
managing mass health data, we launched a suite of distinct but complementary
digital tools and programs to address the evolving emotional, educational,
clinical, and operational challenges introduced by the pandemic. We intend to
continue to look for opportunities to leverage our platform and expertise to
provide first-mover solutions to evolving and future demands in the digital
healthcare industry.

•Acquisitions.  We believe that our proven track record of successful
acquisitions coupled with the flexibility and capabilities of our platform
positions us to continue opportunistically pursuing attractive M&A
opportunities. We believe this potential is further accentuated by our multiple
client channels and constantly expanding member base. Future acquisitions could
drive value and growth in a host of ways, including access to new customers and
potential cross-sell opportunities; unlocking new customer channels or
geographies; adding new solutions to serve our existing client base; and adding
new capabilities to enhance our existing solution offering or the efficiency of
our platform. In addition, we believe our acquisition track record demonstrates
our ability to realize synergies and optimize performance of potential M&A
partners.
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Components of our operating results

Revenue

The enterprise channel provides employers and health plans with health
management programs for large populations, including digital engagement,
telephonic coaching, incentives, biometrics, digital therapeutics, home health
offerings, and subscriptions to the Sharecare platform. Revenue is recognized on
a per member per month ("PMPM") basis or as services are provided. Provider
revenue is primarily based on health document requests filled in the health data
services business line, as well as subscription fees for various technology
related services that assist providers with performance and maximizing
reimbursement. Life sciences revenue is generated mostly through ad sponsorships
to Sharecare's extensive member database.

Revenue costs

Costs of revenue primarily consists of costs incurred in connection with
delivering our various revenue generating activities, including personnel
related expenses. Costs are primarily driven by volumes related to requests,
engagement, and incentive fulfillment. The major components that make up our
cost of revenue are personnel costs to support program delivery as well as
customer service along with share-based compensation for employees engaged in
delivering products and services to customers, data management fees related to
file processing, and variable fees to deliver specific services that may require
third party vendors, direct marketing, fulfillment, transaction fees, or other
costs that can be reduced to offset a decline in revenue. Because our growth
strategy includes substantial opportunity to scale low-personnel cost products,
we would anticipate future revenue to grow at a faster rate than cost of revenue
as those low-personnel cost products mature. Costs of revenue do not include
depreciation or amortization, which are accounted for separately.

Sales and marketing expenses

Sales and marketing expenses consist primarily of employee-related expenses,
including salaries, benefits, commissions, employment taxes, travel, and
share-based compensation costs for our employees engaged in sales, account
management, marketing, public relations and related support. In addition, these
expenses include marketing sponsorships and engagement marketing spend. These
expenses exclude any allocation of occupancy expense and depreciation and
amortization.

We expect our sales and marketing expenses to increase as we strategically
invest to expand our business. We expect to hire additional sales personnel and
related account management, marketing, public relations and related support
personnel to capture an increasing amount of our market opportunity and
upsell/cross-sell within our existing client base. As we scale our sales and
marketing personnel in the short- to medium-term, we expect these expenses to
increase in both absolute dollars and as a percentage of revenue.

Product and technology expenses

Product and technology expenses include personnel and related expenses for software engineering, information technology infrastructure, business intelligence, technical account management, project management, safety, product development and equity compensation. Product and technology expenses also include indirect hosting and related costs to support our technology, outsourced software and engineering services. Our technology and development costs exclude any allocation of occupancy costs and depreciation and amortization.

We expect our technology and development expenses to increase for the
foreseeable future as we continue to invest in the development of our technology
platform. Our technology and development expenses may fluctuate as a percentage
of our total revenue from period to period partially due to the timing and
extent of our technology and development expenses.

General and administrative expenses

General and administrative expenses include personnel and related expenses for
our executive, finance, legal, and human resources departments plus all indirect
staff in the divisions not attributable to service delivery, sales and
marketing, or product and technology. They also include professional fees,
share-based compensation, rent, utilities and maintenance related costs. Our
general and administrative expenses exclude any allocation of depreciation and
amortization.

We expect our general and administrative expenses to increase for the
foreseeable future following the completion of the Business Combination due to
the additional legal, accounting, insurance, investor relations, and other costs
that we will incur as a public company, as well as costs associated with
continuing to grow our business. Our general and administrative expenses may
fluctuate as a percentage of our total revenue from period to period partially
due to the timing and extent of our general and administrative expenses.
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Depreciation and amortization

Amortization mainly includes the amortization of fixed assets, the amortization of software, the amortization of capitalized software development costs and the amortization of intangible assets related to acquisitions.

Interest expense

Interest expense primarily relates to interest and fees incurred on our line of credit and amortization of debt issuance costs.

Other income (expenses)

Other income (expense) is mainly related to changes in the fair value of contingent consideration and liabilities related to warrants.

Operating results

Comparison of the three months ended June 30, 2022 and 2021

The following table presents our unaudited Consolidated Statement of Operations
for the three-months ended June 30, 2022 and 2021, and the percentage change
between the two periods:

                                                                      Three Months Ended June 30,
(in thousands)                                  2022                2021              $ Change               % Change
Revenue                                     $  103,823          $   98,459          $    5,364                         5  %
Costs and operating expenses:
Costs of revenue (exclusive of
amortization and depreciation below)            53,238              48,634               4,604                         9  %
Sales and marketing                             14,155              12,046               2,109                        18  %
Product and technology                          17,680              15,812               1,868                        12  %
General and administrative                      43,491              19,197              24,294                       127  %
Depreciation and amortization                   10,901               7,167               3,734                        52  %
Total costs and operating expenses             139,465             102,856              36,609                        36  %
Loss from operations                           (35,642)             (4,397)            (31,245)                      711  %
Other income (expense):
Interest income                                    102                  21                  81                       386  %
Interest expense                                  (539)             (7,095)              6,556                       (92) %
Other income (expense)                           6,827              (8,851)             15,678                       177  %
Total other income (expense)                     6,390             (15,925)             22,315                       140  %
Loss before income tax benefit
(expense)                                      (29,252)            (20,322)             (8,930)                       44  %
Income tax benefit (expense)                      (269)                 98                (367)                     (374) %
Net loss                                       (29,521)            (20,224)             (9,297)                       46  %
Net income (loss) attributable to
noncontrolling interest in
subsidiaries                                      (496)                 24                (520)                    (2167) %
Net loss attributable to Sharecare,
Inc.                                        $  (29,025)         $  (20,248)         $   (8,777)                       43  %


Revenue

Revenue increased $5.4 million, or 5%, from $98.5 million for the three months
ended June 30, 2021 to $103.8 million for the three months ended June 30, 2022.
Overall, we saw growth from recently acquired product lines as well as organic
growth in existing lines for an increase of $16.5 million. Offsetting this
growth were negative impacts related to suspended services from health security
products of $11.1 million.
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The channel revenue changed as follows: enterprise channel decreased by $0.1
million (from $60.0 million for 2021 to $59.9 million for 2022), the provider
channel increased by $4.3 million (from $22.1 million for 2021 to $26.4 million
for 2022) and the life sciences channel increased by $1.2 million (from $16.3
million for 2021 to $17.5 million for 2022). The enterprise channel was mostly
unchanged in total a decrease of 0.2% but included growth in our home health
care and AI businesses, offset by the impact of the suspension of health
security products. The provider channel increase of 19% was attributable to
increased volumes and new customers in the medical record audit product line.
The life sciences channel increased 8% from the growth in marketing spend by
pharma customers.

Costs of Revenue

Costs of revenue increased $4.6 million, or 9%, from $48.6 million for the three
months ended June 30, 2021 to $53.2 million for the three months ended June 30,
2022. The increase was due to increased sales. The percentage increase in costs
of revenue was higher than the percentage increase in revenue primarily from
shifts in product mix, with increases in home health care, medical record audits
and pharma marketing, offset by a decrease in health security.

Sales and Marketing

Sales and marketing expense increased $2.1 million, or 18%, from $12.0 million
for the three months ended June 30, 2021 to $14.2 million for the three months
ended June 30, 2022. The increase was attributable to staffing increases of $0.6
million, severance and reorganization costs of $0.4 million, additional
marketing sponsorships and advertising costs of $1.0 million, and share-based
compensation expense of $0.5 million. The increases were partially offset by
reduced external consultant expenses of $0.5 million incurred in 2021 to advance
engagement metrics across our client base and support ramping of new business.

Product and technology

Product and technology spending increased $1.9 millioni.e. 12%, of $15.8 million for the three months ended June 30, 2021 at $17.7 million for the three months ended June 30, 2022. The increase is attributable to the increase in severance and restructuring costs of $0.8 million and an increase in new resources related to the growth and acquisitions of $1.2 million.

General and administrative

General and administrative expense increased $24.3 million, or 127%, from $19.2
million for the three months ended June 30, 2021 to $43.5 million for the three
months ended June 30, 2022. Non-cash share-based compensation expense accounted
for $15.6 million of the increase. In addition, non-recurring, reorganization,
and severance fees increased by $4.1 million. The other increases are
attributable to additional and acquisition-related staffing costs of $1.5
million needed to support growth and public company compliance initiatives, cost
increases of $1.1 million tied to increased travel, technology spend and medical
claims, along with increased insurance and legal expense of $2.3 million tied to
being a public company. Offsetting these increases, was a reduction in facility
lease expense attributable to exiting facilities and lease expiration of $0.7
million.

Depreciation and amortization

Depreciation and amortization increased $3.7 million, or 52%, from $7.2 million
for the three months ended June 30, 2021 to $10.9 million for the three months
ended June 30, 2022. The increase was primarily related to acquisition-related
intangibles as well as placing platform-related developed software into service.

Interest charges

Interest expense decreased $6.6 million, from $7.1 million for the three months
ended June 30, 2021 to $0.5 million for the three months ended June 30, 2022.
The decrease is attributable to the retirement of debt in 2021 in connection
with the consummation of the Business Combination.

Other income (expenses)

Other income and expense fluctuated $15.7 million from $8.9 million of expense
for the three months ended June 30, 2021 to $6.8 million of income for the three
months ended June 30, 2022. This activity was mostly related to non-cash,
mark-to-market adjustments to contingent consideration and warrant liabilities
where the adjustment is tied to the change in the per
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trading price of the Company’s common shares. See Note 1 to Sharecare’s
consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Comparison of the six months ended June 30, 2022 and 2021

The following table presents our unaudited Consolidated Statement of Operations
for the six-months ended June 30, 2022 and 2021, and the percentage change
between the two periods:

                                                                       Six Months Ended June 30,
(in thousands)                                  2022                2021              $ Change               % Change
Revenue                                     $  204,533          $  188,661          $   15,872                         8  %
Costs and operating expenses:
Costs of revenue (exclusive of
amortization and depreciation below)           104,730              93,028              11,702                        13  %
Sales and marketing                             28,666              23,556               5,110                        22  %
Product and technology                          37,101              36,266                 835                         2  %
General and administrative                      99,489              38,752              60,737                       157  %
Depreciation and amortization                   20,778              13,850               6,928                        50  %
Total costs and operating expenses             290,764             205,452              85,312                        42  %
Loss from operations                           (86,231)            (16,791)            (69,440)                      414  %
Other income (expense)
Interest income                                    131                  29                 102                       352  %
Interest expense                                (1,031)            (14,105)             13,074                       (93) %
Other income (expense)                          19,672             (20,730)             40,402                       195  %
Total other income (expense)                    18,772             (34,806)             53,578                       154  %
Loss before income tax benefit
(expense)                                      (67,459)            (51,597)            (15,862)                       31  %
Income tax benefit (expense)                      (361)                 14                (375)                    (2679) %
Net loss                                       (67,820)            (51,583)            (16,237)                       31  %
Net loss attributable to
noncontrolling interest in
subsidiaries                                      (594)                (82)               (512)                      624  %
Net loss attributable to Sharecare,
Inc.                                        $  (67,226)         $  (51,501)         $  (15,725)                       31  %


Revenue

Revenue increased $15.9 million, or 8%, from $188.7 million for the six months
ended June 30, 2021 to $204.5 million for the six months ended June 30, 2022,
respectively. Overall, we saw growth from recently acquired product lines as
well as organic growth in existing lines for an increase of $36.5 million.
Offsetting this growth were negative impacts related to suspended services from
health security products of $20.6 million.

The channel revenue changed as follows: enterprise channel increased by $5.6
million (from $114.1 million for 2021 to $119.7 million for 2022), the provider
channel increased by $8.9 million (from $42.2 million for 2021 to $51.1 million
for 2022) and the life sciences channel increased by $1.4 million (from
$32.4 million for 2021 to $33.8 million for 2022). The enterprise channel
increased by 5%, including growth in our home health care and AI businesses,
offset by the impact of the suspension of health security products. The provider
channel increase of 21% was attributable to increased volumes and new customers
in both the medical record and audit product lines. The life sciences channel
increased 4% from the growth in marketing spend by pharma customers.

Revenue costs

Costs of revenue increased $11.7 million, or 13%, from $93.0 million for the six
months ended June 30, 2021 to $104.7 million for the six months ended June 30,
2022. The increase was primarily due to sales growth. The percentage increase in
costs of revenue was higher than the percentage increase in revenue primarily
from shifts in product mix, with increases in home health care, medical record
audits and pharma marketing, offset by a decrease in health security.
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Sales and Marketing

Sales and marketing expense increased $5.1 million, or 22%, from $23.6 million
for the six months ended June 30, 2021 to $28.7 million for the six months ended
June 30, 2022. The increase was attributable to staffing increases of $2.0
million, severance and reorganization costs of $0.9 million, additional
marketing sponsorships and advertising costs of $1.9 million, increased travel
and conference expenses of $0.6 million and share-based compensation expense of
$1.6 million. The increases were partially offset by reduced sales consultant
expenses of $1.8 million incurred in 2021 to advance engagement metrics across
our client base and support ramping of new business.

Product and technology

Product and technology expenses increased $0.8 million, or 2%, from
$36.3 million for the six months ended June 30, 2021 to $37.1 million for the
six months ended June 30, 2022. The continued investment in product and tech
staffing and outside contract services accounted for $5.1 million of the
increase, and platform fees increased by $1.6 million as we deploy new
technologies and volumes increase related to the revenue ramp. Severance and
reorganization expenses also increased by $2.3 million. Offsetting the increases
is a reduction in stock-based compensation expenses of $8.2 million related to
the prior year acquisition of doc.ai.

General and administrative

General and administrative expense increased $60.7 million, or 157%, from
$38.8 million for the six months ended June 30, 2021 to $99.5 million for the
six months ended June 30, 2022. Non-cash share-based compensation expense
accounted for $43.3 million of the increase. In addition, non-recurring,
reorganization and severance fees increased by $9.1 million. The other increases
are attributable to additional and acquisition-related staffing costs of $5.3
million needed to support growth and public company compliance initiatives, cost
increases of $0.9 million tied to increased travel, technology spend and medical
claims, along with increased insurance and legal expense of $4.3 million tied to
being a public company. Offsetting these increases, we reduced facility lease
expense by $1.1 million and outside consulting costs by $1.4 million.

Depreciation and amortization

Depreciation and amortization increased $6.9 million, or 50%, from $13.9 million
for the six months ended June 30, 2021 to $20.8 million for the six months ended
June 30, 2022. The increase was related to our continued investment in product
enhancements and new products, as well as amortization incurred on recently
acquired intangible assets.

Interest charges

Interest expense decreased $13.1 million, from $14.1 million for the six months
ended June 30, 2021 to $1.0 million for the six months ended June 30, 2022. The
decrease is attributable to the retirement of debt in 2021 in connection with
the consummation of the Business Combination.

Other income (expenses)

Other income and expense fluctuated $40.4 million, from $20.7 million of expense
for the six months ended June 30, 2021 to $19.7 million of income for the six
months ended June 30, 2022. This increase is comprised mostly of non-cash,
mark-to-market adjustments tied to the change in the per share price of the
Company's common stock.

Non-GAAP Financial Measures

In addition to our financial results determined in accordance with GAAP, we
believe the non-GAAP measures adjusted EBITDA, adjusted net income (loss), and
adjusted earnings (loss) per share ("adjusted EPS") are useful in evaluating our
operating performance. We use adjusted EBITDA, adjusted net income (loss), and
adjusted EPS to evaluate our ongoing operations and for internal planning and
forecasting purposes. We believe that these non-GAAP financial measures, when
taken together with the corresponding GAAP financial measures, provide
meaningful supplemental information regarding our performance by excluding
certain items that may not be indicative of our business, results of operations,
or outlook. In particular, we believe that the use of adjusted EBITDA, adjusted
net income (loss), and adjusted EPS is helpful to our investors as they are
metrics used by management in assessing the health of our business and our
operating performance. However, non-GAAP financial information is presented for
supplemental informational purposes only, has limitations as an analytical tool,
and should not be considered in isolation or as a substitute for financial
information presented in accordance with GAAP. In addition, other companies,
including companies in our industry, may calculate
similarly-titled non-GAAP measures differently or may use other measures to
evaluate their performance, all of which could reduce the usefulness of
our non-GAAP financial measures as a tool for comparison. The reconciliations of
adjusted EBITDA, adjusted net income (loss), and adjusted EPS to
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net income (loss), the most directly comparable financial measure stated in
accordance with GAAP, are provided below. Investors are encouraged to review the
reconciliations and not to rely on any single financial measure to evaluate our
business.

Adjusted EBITDA

Adjusted EBITDA is a key performance measure that management uses to assess our
operating performance. Because adjusted EBITDA facilitates internal comparisons
of our historical operating performance on a more consistent basis, we use this
measure for business planning purposes.

We calculate adjusted EBITDA as net income (loss) adjusted to exclude (i)
depreciation and amortization, (ii) interest income, (iii) interest expense,
(iv) income tax (benefit) expense, (v) other (income) expense (non-operating),
(vi) share-based compensation, (vii) severance, (viii) warrants issued with
revenue contracts, (ix) net costs associated with exiting contracts, and (x)
transaction and closing costs. We do not view the items excluded as
representative of our ongoing operations.

The following table presents a reconciliation of adjusted EBITDA from the most
comparable GAAP measure, net loss, for the three and six months ended June 30,
2022 and 2021 (in thousands):

                                                   Three Months Ended                     Six Months Ended
                                                        June 30,                              June 30,
                                                 2022               2021               2022               2021
Net loss                                     $ (29,521)         $ (20,224)         $ (67,820)         $ (51,583)
Add:
Depreciation and amortization                   10,901              7,167             20,778             13,850
Interest income                                   (102)               (21)              (131)               (29)
Interest expense                                   539              7,095              1,031             14,105
Income tax (benefit) expense                       269                (98)               361                (14)
Other (income) expense                          (6,827)             8,851            (19,672)            20,730
Share-based compensation                        18,177              2,360             51,287             14,386
Severance                                          411                200                770                265
Warrants issued with revenue contracts(a)           14                 (1)                34                 38
Net costs associated with exiting
contracts(b)                                     1,249                  -              2,923                  -
Transaction and closing costs(c)(d)              7,025              1,319             14,397              2,022
Adjusted EBITDA(e)                           $   2,135          $   6,648          $   3,958          $  13,770


____________

(a)Represents the non-cash value of warrants issued to clients for meeting
specific revenue thresholds.
(b)For the six months ended June 30, 2022, previously undisclosed first quarter
net costs were included for comparability purposes and to display trends
associated with exiting contracts during the period.
(c)For the three months ended June 30, 2022, represents costs related to the
Business Combination, transaction and post-closing costs related to
acquisitions, and other non-operating, non-recurring costs including $2.7
million of other non-operating, non-recurring costs, $3.1 million of
reorganizational costs, and $1.2 million of acquisition-related expense.
(d)For the six months ended June 30, 2022, represents costs related to the
Business Combination, transaction and post-closing costs related to
acquisitions, and other non-operating, non-recurring costs including $5.9
million of other non-operating, non-recurring costs, $5.3 million of
reorganizational costs, and $3.2 million of acquisition-related expense.
(e)Includes non-cash amortization associated with contract liabilities recorded
in connection with acquired businesses.

Adjusted net profit (loss)

Adjusted net income (loss) is a key performance measure that management uses to
assess our operating performance. Because adjusted net income (loss) facilitates
internal comparisons of our historical operating performance on a more
consistent basis, we use this measure for business planning purposes and to
evaluate our performance.

We calculate adjusted net income (loss) as net income (loss) attributable to
Sharecare, Inc. adjusted to exclude (i) amortization of acquired intangibles,
(ii) amortization of deferred financing fees, (iii) change in fair value of
warrant liability and contingent consideration, (iv) share-based compensation,
(v) severance, (vi) warrants issued with revenue contracts, (vii) net costs
associated with exiting contracts, (viii) transaction and closing costs, and
(ix) the related income tax adjustments. We do not view the items excluded as
representative of our ongoing operations.
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Adjusted EPS

Adjusted EPS is a key performance measure that management uses to assess our
operating performance. Because adjusted EPS facilitates internal comparisons of
our historical operating performance on a more consistent basis, we use this
measure for business planning purposes and to evaluate our performance.

We calculate Adjusted EPS as Adjusted net income, as defined above, divided by the weighted average number of common shares outstanding – basic and diluted. We do not consider the excluded items to be representative of our ongoing operations.

The following table presents a reconciliation of adjusted net loss and adjusted
EPS from the most comparable GAAP measure, net loss, for the three and six
months ended June 30, 2022 and 2021 (in thousands, except share numbers and per
share amounts):
                                                          Three Months Ended                             Six Months Ended
                                                               June 30,                                      June 30,
                                                      2022                   2021                   2022                   2021

Net loss attributable to Sharecare, Inc. ($29,025) $

(20,248) ($67,226) ($51,501)
Add: Amortization of acquired intangible assets(a)

                 1,631                  1,160                  3,263                  2,228
Amortization of deferred financing fees                    70                  1,656                    138                  3,331
Change in fair value of warrant liability and
contingent consideration                               (6,374)                 9,908                (18,742)                21,656
Share-based compensation                               18,177                  2,360                 51,287                 14,386
Severance                                                 411                    200                    770                    265
Warrants issued with revenue contracts(b)                  14                     (1)                    34                     38
Net costs associated with exiting contracts(c)          1,249                      -                  2,923                      -
Transaction and closing costs(d)(e)                     7,025                  1,319                 14,397                  2,022
Adjusted net loss(f)                            $      (6,822)         $    

(3,646) ($13,156) ($7,575)

Weighted-average common shares outstanding,
basic and diluted                                 347,334,401            228,721,591            346,122,333            225,493,435

Loss per share                                  $       (0.08)         $       (0.09)         $       (0.19)         $       (0.23)
Adjusted loss per share                         $       (0.02)         $       (0.02)         $       (0.04)         $       (0.03)


____________

(a)Represents non-cash expenses related to the amortization of intangibles in
connection with acquired businesses.
(b)Represents the non-cash value of warrants issued to clients for meeting
specific revenue thresholds.
(c)For the six months ended June 30, 2022, previously undisclosed first quarter
net costs were included for comparability purposes and to display trends
associated with exiting contracts during the period.
(d)For the three months ended June 30, 2022, represents costs related to the
Business Combination, transaction and post-closing costs related to
acquisitions, and other non-operating, non-recurring costs including $2.7
million of other non-operating, non-recurring costs, $3.1 million of
reorganizational costs, and $1.2 million of acquisition-related expense.
(e)For the six months ended June 30, 2022, represents costs related to the
Business Combination, transaction and post-closing costs related to
acquisitions, and other non-operating, non-recurring costs including $5.9
million of other non-operating, non-recurring costs, $5.3 million of
reorganizational costs, and $3.2 million of acquisition-related expense.
(f)The income tax effect of the Company's non-GAAP reconciling items are offset
by valuation allowance adjustments of the same amount given that the Company was
in a full valuation allowance position for the periods presented.

Cash and capital resources

We measure liquidity in terms of our ability to fund the cash requirements of
our business operations, including working capital and capital expenditure
needs, contractual obligations and other commitments, with cash flows from
operations and other sources of funding. Our ability to expand and grow our
business will depend on many factors, including our working capital needs and
the evolution of our operating cash flows.

We have had $211.6 million in cash and cash equivalents at June 30, 2022. Our main commitments to June 30, 2022, consist of operating leases and purchase commitments. The Company maintains its senior secured credit facility. From

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June 30, 2022there was $50.3 million available for borrowing under the revolving facility. See note 8 at Sharecare’s consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

We believe our operating cash flows, together with our cash on hand, which
includes the cash we obtained as a result of the Business Combination, will be
sufficient to meet our working capital and capital expenditure requirements in
the short-term, i.e., the 12 months from the date of this Quarterly Report on
Form 10-Q. Our long-term liquidity (i.e., more than 12 months from the date of
this Quarterly Report on Form 10-Q) needs include cash necessary to support our
business growth and contractual commitments. We believe that the potential
financing capital available to us in the future is sufficient to fund our
long-term liquidity needs, however, we are continually reviewing our capital
resources to determine whether we can meet our short- and long-term goals and we
may require additional capital to do so. We may also need additional cash
resources due to potential changes in business conditions or other developments,
including unanticipated regulatory developments, significant acquisitions, and
competitive pressures. We expect our capital expenditures and working capital
requirements to continue to increase in the immediate future as we seek to
expand our solution offerings. To the extent that our current resources are
insufficient to satisfy our cash requirements, we may need to seek additional
equity or debt financing. If the needed financing is not available, or if the
terms of financing are less desirable than we expect, we may be forced to
decrease our level of investment in new product offerings and related marketing
initiatives or to scale back our existing operations, which could have an
adverse impact on our business and financial prospects.

The following table summarizes our cash flow activities for the periods
presented:

                                                                        Six Months Ended June 30,
(in thousands)                                                          2022                   2021
Net cash provided by (used in) operating activities               $      (39,912)         $        80
Net cash used in investing activities                             $      (24,216)         $   (18,458)
Net cash provided by financing activities                         $        4,753          $    38,641


Operating Activities

Net cash used in operating activities for the six months ended June 30, 2022 was
$39.9 million, an increase of $40.0 million from $0.1 million of cash provided
by operating activities for the six months ended June 30, 2021. Cash used during
this period included the $67.8 million net loss for the six months ended
June 30, 2022, offset by non-cash items of $57.0 million, which were primarily
attributable to depreciation and amortization expense, amortization of contract
liabilities, lease right-of-use assets expense related to the adoption of ASU
2016-02, Leases, change in fair value of warrant liability and contingent
consideration, and share-based compensation. Changes in operating assets and
liabilities of $29.1 million resulted in net cash used. Uses of cash were
attributable to the pay down of accounts payable and accrued liabilities in the
ordinary course of business (including operating lease liabilities accounted for
under ASU 2016-02, Leases) and from the settlement of previously accrued legal
expenses, cyclical cash payments related to prepaid assets, and a reduction in
deferred revenue. These uses of cash were offset by cash provided by a decrease
in accounts receivable.

Investing Activities

Net cash used in investing activities for the six months ended June 30, 2022 was
$24.2 million compared to $18.5 million of net cash used in investing activities
for the six months ended June 30, 2021. The increase in cash outflows was
primarily due to an increase in connection with software development for new
products and current product enhancements and purchases of property and
equipment offset by prior period cash paid in the acquisition of doc.ai.

Fundraising activities

Net cash provided by financing activities for the six months ended June 30, 2022
has been $4.8 millionprimarily due to cash received from the proceeds of the exercise of common stock options of $5.0 million.

Net cash provided by financing activities for the six months ended June 30, 2021
was $38.6 million, primarily due to cash received from the issuance of 4,453,750
shares (retroactively restated for the Reverse Recapitalization) of Series D
redeemable convertible preferred stock in the amount of $50.0 million, proceeds
from the exercise of common stock options and warrants of $2.3 million offset by
the net repayment of our Senior Secured Credit Agreement of $13.3 million.
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Contractual obligations

No material changes have been made to contractual obligations since our Annual Report on Form 10-K was filed with the SECOND on March 31, 2022.

Financing modalities

Senior Secured Credit Agreement

In March 2017, we refinanced our existing debt through the execution of the
Senior Secured Credit Agreement. The Senior Secured Credit Agreement provides
for the Revolving Facility with total commitments of $60.0 million. Availability
under the Revolving Facility is generally subject to a borrowing base based on a
percentage of applicable eligible receivables. Borrowings under the Revolving
Facility generally bear interest at a rate equal to, at the applicable
Borrower's option, either (a) a base rate or (b) a rate based on LIBOR, in each
case, plus an applicable margin. The applicable margin is based on a fixed
charge coverage ratio and ranges from (i) 1.75% to 2.25% for U.S. base rate
loans and (ii) 2.75% to 3.25% for LIBOR. The Senior Secured Credit Agreement
matures on February 10, 2023.

On May 11, 2022, the Company and certain subsidiaries of the Company entered
into the Amendment pursuant to which the minimum EBITDA financial covenant
contained therein was amended for each fiscal quarter ending during the period
from March 31, 2022 through September 30, 2022 to account for the budgeted
phasing of 2022 interim quarterly budgets.

The Senior Secured Credit Agreement contains a number of customary affirmative and negative covenants and we were in compliance with those covenants as of
June 30, 2022. From June 30, 2022there was $0.8 million outstanding borrowings under the revolving facility.

Critical accounting estimates

Our financial statements are prepared in accordance with GAAP. The preparation
of the consolidated financial statements in conformity with GAAP requires
management to make a number of estimates and assumptions relating to the
reported amounts of assets and liabilities at the date of the consolidated
financial statements and the reported amounts of revenues and expenses during
the reporting period. We evaluate our significant estimates on an ongoing basis,
including, but not limited to, revenue recognition, the valuation of assets and
liabilities acquired in business combinations, the valuation of common stock
prior to the Business Combination, stock-based compensation, and income taxes.
We base our estimates on historical experience, known trends, and other
market-specific or other relevant factors that we believe to be reasonable under
the circumstances. Changes in estimates are recorded in the period in which they
become known. Actual results may differ from those estimates or assumptions.

We believe that the accounting policies described below involve a significant
degree of judgment and complexity. Accordingly, we believe these are the most
critical to aid in fully understanding and evaluating our consolidated financial
condition and results of operations. For further information, see Note 1, to
Sharecare's consolidated financial statements included elsewhere in this
Quarterly Report on Form 10-Q.

Revenue recognition

Revenue is recognized when control of the promised good or service is
transferred to the client, in an amount that reflects the consideration we
expect to be entitled to in exchange for that good or service. Sales and
usage-based taxes are excluded from revenue. We serve a diverse group of
clients. We are the principal in all outstanding revenue arrangements except for
CareLinx. CareLinx has B2C and B2B2C service lines for which CareLinx is the
agent and we recognize the commission revenue based on the amount billed using
the "as-invoiced" practical expedient.

business income

The enterprise channel provides employers and health plans with health
management programs for large populations, including digital engagement,
telephonic coaching, incentives, biometrics, digital therapeutics, home care
health offerings, and subscriptions to the Sharecare platform. Revenue is
recognized on a PMPM basis or as services are provided. Member participation
fees are generally determined by multiplying the contractually negotiated member
rate by the number of members eligible for services during the month. Member
participation rates are established during contract negotiations with clients,
often based on a portion of the value the programs are expected to create.
Contracts with health plans, health care systems and government organizations
generally range from three to five years with several comprehensive strategic
agreements extending for longer periods. Contracts with larger employer clients
typically have two to four year terms.

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Health management program contracts often include a fee for the subscription of
the Sharecare digital platform and various other platforms under doc.ai, which
may also be sold on a stand-alone basis. These services allow members to access
Sharecare's proprietary mobile application with a comprehensive suite of health
and wellness management programs, content, and tools. Revenue is recognized on a
per member or a fixed fee basis as the services are provided.

Sharecare's Blue Zones Project is a community well-being improvement initiative
designed to change the way people experience the world around them by
encouraging and promoting better lifestyle choices, such as commuting, eating,
and social habits. Because healthier environments naturally nudge people toward
healthier choices, Blue Zones Project focuses on influencing the Life Radius®,
the area close to home in which people spend 90% of their lives. Blue Zones
Project best practices use people, places, and policy as levers to transform
those surroundings. These contracts normally include two performance
obligations, the discovery period and the subsequent content delivery for each
year of engagement. The revenue is recognized based on the relative standalone
selling price of the performance obligations evenly over time. These contracts
do not include termination clauses and often have two to four year terms.

Sharecare's doc.ai unlocks the value of health data through licensing artificial
intelligence modules and through the creation of products for a portfolio of
clients including payors, pharma, and providers. These contracts generally
include two performance obligations. The software license and
maintenance/support are considered one series of distinct performance
obligations and professional services is considered a separate distinct
performance obligation. Revenue is recognized for all identified performance
obligations as services are delivered.

Sharecare's CareLinx is focused on connecting caregivers with facilities or
individuals that are in need of additional support. These services are generally
considered a series of distinct performance obligations. Revenue is recognized
for all identified performance obligations as billed using the "as-invoiced"
practical expedient.

Certain contracts place a portion of fees at risk based on achieving certain
performance metrics, such as cost savings, and/or clinical outcomes improvements
(performance-based). We use the most likely amount method to estimate variable
consideration for these performance guarantees. We include in the transaction
price some or all of an amount of variable consideration only to the extent that
it is probable that a significant reversal in the amount of cumulative revenue
recognized will not occur when the uncertainty associated with the variable
consideration is subsequently resolved. We utilize customer data in order to
measure performance.

If performance levels are not achieved by the end of the assessment period, usually one year, some or all of the performance-based fees must be refunded. During the settlement process under a contract, which typically takes place six to eight months after the end of a contract year, performance-based fees are reconciled and settled.

Clients are generally billed monthly for the entire amount of the fees
contractually due for the prior month's enrollment, which typically includes the
amount, if any, that is performance-based and may be subject to refund should
performance targets not be met. Fees for participation are typically billed in
the month after the services are provided. Deferred revenues arise from
contracts that permit upfront billing and collection of fees covering the entire
contractual service period, generally six months to a year. A limited number of
contracts provide for certain performance-based fees that cannot be billed until
after they are reconciled with the client.

Supplier revenue

Our provider channel revenue is primarily based on the volume of health document
requests fulfilled and recognized upon satisfactory delivery to the client. In
addition, provider revenue is derived from subscription fees for various
technology-related services that assist providers with efficiency and
productivity and enhanced patient care. Subscription fees are recognized ratably
over the contractual period.

Life Sciences Revenue

Our life sciences channel generates revenue mostly through ad sponsorships and
content delivery. Content delivery revenue is recognized when the content is
delivered to the client. Ad sponsorship revenue is recognized when the
contractual page views or impressions are delivered and the transaction has met
the criteria for revenue recognition.

Certain customer transactions may contain multiple performance obligations that
may include delivery of content, page views, and ad sponsorship over time. To
account for each of these elements separately, the delivered elements must be
capable of being distinct and must be distinct in the context of the contract.
Revenue is allocated based on the stand-alone or unbundled selling price for
each performance obligation as the services are provided.
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Business combinations

We account for business acquisitions in accordance with ASC Topic 805, Business
Combinations. We measure the cost of an acquisition as the aggregate of the
acquisition date fair values of the assets transferred and liabilities assumed
and equity instruments issued. Transaction costs directly attributable to the
acquisition are expensed as incurred. We record goodwill for the excess of
(i) the total costs of acquisition and fair value of any
noncontrolling interests over (ii) the fair value of the identifiable net assets
of the acquired business.

The acquisition method of accounting requires us to exercise judgment and make
estimates and assumptions based on available information regarding the fair
values of the elements of a business combination as of the date of acquisition,
including the fair values of identifiable intangible assets, deferred tax asset
valuation allowances, liabilities related to uncertain tax positions, and
contingencies. We must also refine these estimates within a one-year measurement
period, to reflect any new information obtained about facts and circumstances
that existed as of the acquisition date that, if known, would have affected the
measurement of the amounts recognized as of that date. Estimates and assumptions
that we must make in estimating the fair value of future acquired technology,
user lists, and other identifiable intangible assets include future cash flows
that we expect to generate from the acquired assets. If the subsequent actual
results and updated projections of the underlying business activity change
compared with the assumptions and projections used to develop these values, we
could record impairment charges. In addition, we have estimated the economic
lives of certain acquired assets and these lives are used to calculate
depreciation and amortization expense. If our estimates of the economic lives
change, depreciation or amortization expenses could be accelerated or slowed,
which could materially impact our results of operation.

New accounting statements

See Note 1, for Sharecare’s consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Accounting Election for Emerging Growth Companies

Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being
required to comply with new or revised financial accounting standards until
private companies are required to comply with the new or revised financial
accounting standards. The JOBS Act provides that a company can choose not to
take advantage of the extended transition period and comply with the
requirements that apply to non-emerging growth companies, and any such election
to not take advantage of the extended transition period is irrevocable.
Following the consummation of the Business Combination, we expect to remain an
emerging growth company at least through the end of the 2022 fiscal year and
expect to continue to take advantage of the benefits of the extended transition
period. This may make it difficult or impossible to compare our financial
results with the financial results of another public company that is either not
an emerging growth company or is an emerging growth company that has chosen not
to take advantage of the extended transition period exemptions for emerging
growth companies because of the potential differences in accounting standards
used.

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