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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________________________
FORM 10-Q
_____________________________________________
xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2022
OR
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from     to
Commission file number 001-39535
SHARECARE, INC.
(Exact name of registrant as specified in its charter)
Delaware 85-1365053
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer Identification No.)
255 East Paces Ferry Road NE, Suite 700
Atlanta, Georgia
30305
(Address of Principal Executive Offices)(Zip Code)
(404) 671-4000
(Registrant's telephone number, including area code)

N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.0001 per shareSHCRThe Nasdaq Stock Market LLC
Warrants, each warrant exercisable for one share of common stock, each at an exercise price of $11.50 per shareSHCRWThe Nasdaq Stock Market LLC
    Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated fileroAccelerated filero
Non-accelerated filerxSmaller reporting companyx
Emerging growth companyx
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x
As of August 8, 2022, there were 352,395,894 shares of the registrant’s common stock, par value $0.0001 per share, outstanding.


Sharecare, Inc.
Table of Contents
Page
i

Part I - Financial Information
ITEM 1. FINANCIAL STATEMENTS
SHARECARE, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share and per share amounts)
As of June 30,
2022
As of December 31,
2021
Assets
Current assets:
Cash and cash equivalents$211,574 $271,105 
Accounts receivable, net (net of allowance for doubtful accounts of $7,812 and $6,212, respectively)
98,717 103,256 
Other receivables 2,810 5,327 
Prepaid expenses12,330 8,819 
Other current assets2,472 2,459 
Total current assets327,903 390,966 
Property and equipment, net4,924 4,534 
Other long-term assets20,433 12,173 
Intangible assets, net156,509 155,086 
Goodwill191,294 192,442 
Total assets$701,063 $755,201 
Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Equity
Current liabilities:
Accounts payable$21,203 $27,155 
Accrued expenses and other current liabilities (Note 4)41,054 51,653 
Deferred revenue11,209 11,655 
Contract liabilities, current2,518 4,597 
Debt, current (Note 8)774  
Total current liabilities76,758 95,060 
Contract liabilities, noncurrent768 1,745 
Warrant liabilities3,330 10,820 
Long-term debt (Note 8) 419 
Other long-term liabilities9,353 24,116 
Total liabilities90,209 132,160 
Commitments and contingencies (Note 11)
Series A redeemable convertible preferred stock, $0.0001 par value; 5,000,000 shares authorized; 5,000,000 shares issued and outstanding, aggregate liquidation preference of $50,000 as of June 30, 2022 and December 31, 2021
58,205 58,205 
Stockholders’ equity:
Common stock $0.0001 par value; 600,000,000 and 600,000,000 shares authorized; 351,926,366 and 345,788,707 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively
35 35 
Additional paid-in capital1,098,772 1,042,164 
Accumulated other comprehensive loss(3,170)(2,061)
Accumulated deficit(544,339)(477,113)
Total Sharecare stockholders’ equity551,298 563,025 
Noncontrolling interest in subsidiaries1,351 1,811 
Total stockholders’ equity552,649 564,836 
Total liabilities, redeemable convertible preferred stock and stockholders’ equity$701,063 $755,201 

The accompanying notes are an integral part of these consolidated financial statements.
1

SHARECARE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
(In thousands, except share and per share amounts)

Three Months Ended
June 30,
Six Months Ended
June 30,
2022202120222021
Revenue$103,823 $98,459 $204,533 $188,661 
Costs and operating expenses:
Costs of revenue (exclusive of depreciation and amortization below)53,238 48,634 104,730 93,028 
Sales and marketing14,155 12,046 28,666 23,556 
Product and technology17,680 15,812 37,101 36,266 
General and administrative43,491 19,197 99,489 38,752 
Depreciation and amortization10,901 7,167 20,778 13,850 
Total costs and operating expenses139,465 102,856 290,764 205,452 
Loss from operations(35,642)(4,397)(86,231)(16,791)
Other income (expense):
Interest income102 21 131 29 
Interest expense(539)(7,095)(1,031)(14,105)
Other income (expense)6,827 (8,851)19,672 (20,730)
Total other income (expense)6,390 (15,925)18,772 (34,806)
Loss before income tax benefit (expense)(29,252)(20,322)(67,459)(51,597)
Income tax benefit (expense)(269)98 (361)14 
Net loss(29,521)(20,224)(67,820)(51,583)
Net (loss) income attributable to noncontrolling interest in subsidiaries(496)24 (594)(82)
Net loss attributable to Sharecare, Inc.$(29,025)$(20,248)$(67,226)$(51,501)
Net loss per share attributable to common stockholders, basic and diluted (1)
$(0.08)$(0.09)$(0.19)$(0.23)
Weighted-average common shares outstanding, basic and diluted (1)
347,334,401 228,721,591 346,122,333 225,493,435 
Net loss$(29,521)$(20,224)$(67,820)$(51,583)
Other comprehensive loss adjustments:
Foreign currency translation(1,206)589 (975)(371)
Comprehensive loss(30,727)(19,635)(68,795)(51,954)
Comprehensive (loss) income attributable to noncontrolling interest in subsidiaries(662)260 (460)3 
Comprehensive loss attributable to Sharecare, Inc.$(30,065)$(19,895)$(68,335)$(51,957)
(1) Retroactively restated for the Reverse Recapitalization as a result of the Business Combination as described in Notes 1 and 2.

The accompanying notes are an integral part of these consolidated financial statements.
2

SHARECARE, INC.
CONSOLIDATED STATEMENTS OF REDEEMABLE NONCONTROLLING INTEREST, REDEEMABLE CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS’ EQUITY (DEFICIT)
(Unaudited)
(In thousands, except share amounts)

Redeemable
Noncontrolling
Interest
Redeemable Convertible
Preferred Stock
Common Stock
Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
Loss
Accumulated
Deficit
Noncontrolling
Interest
Total
Stockholders’ Equity
(Deficit)
SharesAmountSharesAmount
Balance at December 31. 2021$ 5,000,000 $58,205 345,788,707$35$1,042,164 $(2,061)$(477,113)$1,811 $564,836 
Stock options exercised— — — 2,414,9862,337 — — — 2,337 
Common stock issued upon vesting of restricted stock units— — — 73,617— — — — — 
Issuance of warrants in connection with debt and revenue arrangements— — — 19 — — — 19 
Issuance of stock for WhitehatAI earnout— — — 132,587— — — — — 
Issuance of stock for doc.ai escrow shares— — — 677,680— — — — — 
Share-based compensation— — — 33,681 — — — 33,681 
Net income (loss) attributable to noncontrolling interest in subsidiaries— — — — — — (98)(98)
Currency translation adjustment— — — — (69)— 300 231 
Net income (loss) attributable to Sharecare, Inc.— — — — — (38,201)— (38,201)
Other— — — (5,097)— — — — — — 
Balance at March 31. 2022$ 5,000,000 $58,205 349,082,480 $35 $1,078,201 $(2,130)$(515,314)$2,013 $562,805 
Stock options exercised— — — 2,497,1882,658 — — — 2,658 
Common stock issued upon vesting of restricted stock units— — — 346,698— — — — — 
Issuance of warrants in connection with debt and revenue arrangements— — — 14 — — — 14 
Share-based compensation— — — 18,558 — — — 18,558 
Net income (loss) attributable to noncontrolling interest in subsidiaries— — — — — — (496)(496)
Currency translation adjustment— — — — (1,040)— (166)(1,206)
Net income (loss) attributable to Sharecare, Inc.— — — — — (29,025)— (29,025)
CareLinx working capital adjustment— — — (659)— — — (659)
Balance at June 30, 2022$ 5,000,000 $58,205 351,926,366 $35 $1,098,772 $(3,170)$(544,339)$1,351 $552,649 

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




3


SHARECARE, INC.
CONSOLIDATED STATEMENTS OF REDEEMABLE NONCONTROLLING INTEREST, REDEEMABLE CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS’ EQUITY (DEFICIT)
(Unaudited)
(In thousands, except share amounts)

Redeemable
Noncontrolling
Interest
Redeemable Convertible
Preferred Stock
Common Stock
Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
Loss
Accumulated
Deficit
Noncontrolling
Interest
Total
Stockholders’ Equity
(Deficit)
SharesAmountSharesAmount
Balance at December 31. 2020$4,000  $ 217,106,957 $22 $377,134 $(702)$(392,113)$2,203 $(13,456)
Stock options exercised— — — 1,425,1001,375 — — — 1,375 
Issuance of common stock for doc.ai acquisition— — — 8,435,301181,292 — — — 81,293 
Issuance of warrants in connection with debt and revenue arrangements— — — 39 — — — 39 
Conversion of warrants to common shares— — — 672,324645 — — — 645 
Share-based compensation— — — 12,026 — — — 12,026 
Net income (loss) attributable to noncontrolling interest in subsidiaries— — — — (18)— (88)(106)
Currency translation adjustment— — — — (791)— (169)(960)
Net income (loss) attributable to Sharecare, Inc.— — — — — (31,252)— (31,252)
Other— — — — — (988)— — — (988)
Balance at March 31. 2021$4,000  $ 227,639,682 $23 $471,523 $(1,511)$(423,365)$1,946 $48,616 
Stock options exercised— — — 233,372 — 255 — — — 255 
Conversion of Convertible Warrants to common shares— — — 53,658 — 75 — — — 75 
Common stock issued to settle contingent consideration from acquisitions in prior years— — — 1,078,213 — — — — — — 
Share-based compensation— — — — — 2,360 — — — 2,360 
Dissolution of Redeemable NCI for Visualize Health(4,000)— — 895,435 — 4,136 — — (136)4,000 
Issuance of Series D redeemable convertible preferred stock, net of issuance costs and antidilution provisions— 4,453,659 51,754 — — — — — — — 
Net income (loss) attributable to non-controlling interest in subsidiaries— — — — — — — — 24 24 
Currency translation adjustment— — — — — — 353 — 236 589 
Net income (loss) attributable to Sharecare, Inc.       (20,248) (20,248)
Balance at June 30, 2021$ 4,453,659 $51,754 229,900,360 $23 $478,349 $(1,158)$(443,613)$2,070 $35,671 

The accompanying notes are an integral part of these consolidated financial statements.
4

SHARECARE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands, except share and per share amounts)
Six Months Ended
June 30,
20222021
Cash flows from operating activities:
Net loss$(67,820)$(51,583)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization expense20,778 13,850 
Non-cash interest expense493 4,141 
Amortization of contract liabilities(2,190)(2,802)
Accretion of contract liabilities440 780 
Lease right-of-use assets expense3,017  
Change in fair value of warrant liability and contingent consideration(18,742)21,656 
Share-based compensation51,287 14,386 
Deferred income taxes(592)291 
Other2,467 (498)
Changes in operating assets and liabilities:
Accounts receivable, net and other receivables3,406 (10,865)
Prepaid expenses and other assets(4,786)(10,827)
Accounts payable and accrued expense(27,421)3,323 
Operating lease liabilities197  
Deferred revenue(446)18,228 
Net cash provided by (used in) operating activities(39,912)80 
Cash flows from investing activities:
Acquisition of doc.ai (2,784)
Purchases of property and equipment(1,066)(244)
Capitalized internal-use software costs(23,150)(15,430)
Net cash used in investing activities(24,216)(18,458)
Cash flows from financing activities:
Proceeds from issuance of redeemable convertible preferred stock 50,000 
Proceeds from issuance of debt 20,000 
Repayment of debt (33,293)
Proceeds from exercise of common stock options4,996 2,351 
Payments on financing lease obligations(243)(416)
Financing costs in conjunction with the issuance of debt (1)
Net cash provided by financing activities4,753 38,641 
Effect of exchange rates on cash and cash equivalents(156)(24)
Net (decrease) increase in cash and cash equivalents(59,531)20,239 
Cash and cash equivalents at beginning of period271,105 22,603 
Cash and cash equivalents at end of period$211,574 $42,842 
Supplemental disclosure of cash flow information:
Cash paid for interest$532 $6,947 
Cash paid for income taxes$23 $42 
Non-cash investing and financing activities:
CareLinx working capital adjustment $659 $ 
The accompanying notes are an integral part of these consolidated financial statements.
5

Sharecare, Inc.
Notes to Unaudited Consolidated Financial Statements
(Unaudited)

1.Nature of Business and Significant Accounting Policies
Nature of Business
Sharecare, Inc. (“Sharecare” or the “Company”) was founded in 2009 to develop an interactive health and wellness platform and began operations in October 2010. Sharecare’s virtual health platform is designed to help people, patients, providers, employers, health plans, government organizations, and communities optimize individual and population-wide well-being by driving positive behavior change. The platform is designed to connect each stakeholder to the health management tools they need to drive engagement, establish sustained participation, increase satisfaction, reduce costs, and improve outcomes. Sharecare bridges scientifically validated clinical programs with content to deliver a personalized experience for its members, beginning with the RealAge® test, Sharecare’s health risk assessment that shows members the true age of their body, capitalizing on people’s innate curiosity of how “young” they are to draw them into the platform. The Sharecare platform provides members with a personalized action plan to guide and educate them on the habits and behaviors making the biggest impact, both positive and negative, on their RealAge. Sharecare provides the resources members need to manage their health through lifestyle or disease management and coaching programs, such as diabetes management and smoking cessation, well-being solutions, such as financial health and anxiety management; care navigation tools such as find-a-doctor, prescription savings, clinical decision support, medical records, home care, and more. Additionally, Sharecare, through its subsidiary Sharecare Health Data Services, LLC (“HDS”), provides secure, automated release of information, audit and business consulting services to streamline the medical records process for medical facilities. Sharecare delivers value via its provider, enterprise, and life sciences channels.
SPAC Transaction
On July 1, 2021, Falcon Capital Acquisition Corp., the Company’s predecessor and a Delaware corporation (“FCAC”), consummated the business combination (the “Business Combination”) pursuant to the terms of the Agreement and Plan of Merger, dated February 12, 2021 (the “Merger Agreement”), with Sharecare, Inc., a Delaware corporation (“Legacy Sharecare”), FCAC Merger Sub Inc., a Delaware corporation and a wholly-owned subsidiary of FCAC (“Merger Sub”), and the stockholder representative. Immediately upon the completion of the Business Combination and the other transactions contemplated by the Merger Agreement (the “Transactions”), Merger Sub merged with and into Legacy Sharecare with Legacy Sharecare surviving the merger as a wholly-owned subsidiary of the Company (as successor to FCAC). In addition, in connection with the consummation of the Business Combination, the Company changed its name to “Sharecare, Inc.” and Legacy Sharecare changed its name to “Sharecare Operating Company, Inc.” The Business Combination is further described in Note 2.
Basis of Presentation and Consolidation Policy
The Company’s consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) as determined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and pursuant to the regulations of the U.S. Securities and Exchange Commission (“SEC”).
Pursuant to the Merger Agreement, the merger between Merger Sub and Legacy Sharecare was accounted for as a reverse recapitalization in accordance with GAAP (the “Reverse Recapitalization”). Under this method of accounting, FCAC was treated as the “acquired” company and Legacy Sharecare was treated as the acquirer for financial reporting purposes.
Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of Legacy Sharecare issuing stock for the net assets of FCAC, accompanied by a recapitalization. The net assets of FCAC are stated at historical cost, with no goodwill or other intangible assets recorded.
Legacy Sharecare was determined to be the accounting acquirer in the Business Combination based on the following predominant factors at the time of the Transactions:
Legacy Sharecare’s existing stockholders have the greatest voting interest in the Company;
The largest individual minority stockholder in the Company was a stockholder of Legacy Sharecare;
6

Sharecare, Inc.
Notes to Unaudited Consolidated Financial Statements
(Unaudited)

Legacy Sharecare’s directors represent the majority of the new board of directors of the Company;
Legacy Sharecare’s senior management is the senior management of the Company; and
Legacy Sharecare is the larger entity based on historical revenue and has the larger employee base.
The consolidated assets, liabilities and results of operations prior to the Reverse Recapitalization are those of Legacy Sharecare. The shares and corresponding capital amounts and losses per share, prior to the Reverse Recapitalization, have been retroactively restated based on shares reflecting the exchange ratio of 71.26 (the “Exchange Ratio”) established in the Business Combination.
The consolidated financial statements include the accounts of Sharecare, Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Segment Information
The Company operates as a single operating segment. The Company’s chief operating decision maker is its chief executive officer, who reviews financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance and allocating resources for the entire company.

Unaudited Interim Financial Information
The accompanying interim Consolidated Balance Sheet as of June 30, 2022, the Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2022 and 2021, Consolidated Statements of Redeemable Noncontrolling Interest, Redeemable Convertible Preferred Stock, and Stockholders’ Equity (Deficit) for each of the three periods within the six months ended June 30, 2022 and 2021, and Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021 are unaudited. These unaudited interim consolidated financial statements are presented in accordance with the rules and regulations of the SEC and do not include all disclosures normally required in annual consolidated financial statements prepared in accordance with GAAP. In management’s opinion, the unaudited interim consolidated financial statements have been prepared on the same basis as the annual financial statements and include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of June 30, 2022, the Company’s consolidated results of operations for the three and six months ended June 30, 2022 and 2021, and cash flows for the six months ended June 30, 2022 and 2021. The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results to be expected for the full fiscal year or any other future interim or annual periods. The information contained within the unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s annual financial statements for the year ended December 31, 2021.
Use of Estimates
The preparation of these unaudited interim consolidated financial statements in conformity with GAAP requires the use of management estimates and assumptions that affect 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. Significant estimates and assumptions reflected in these consolidated financial statements are 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. The Company bases its estimates on historical experience, known trends, and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates, as there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results may differ from those estimates or assumptions.
Business Combinations
The Company accounts for business acquisitions in accordance with ASC Topic 805, Business Combinations. The Company measures the cost of an acquisition as the aggregate of the acquisition date fair values of the assets transferred by the acquirer, the liabilities incurred by the acquirer to former owners of the acquiree, the liabilities assumed by the acquirer from the acquiree, and the equity instruments issued by the acquirer. Transaction costs directly attributable to the acquisition are
7

Sharecare, Inc.
Notes to Unaudited Consolidated Financial Statements
(Unaudited)

expensed as incurred. The Company records 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.
Contract Liabilities
In connection with certain acquisitions, the Company has recognized current and noncurrent contract liabilities, representing off-market values associated with certain wellness program royalty agreements (amortization will continue through 2023). Additionally, the balance as of June 30, 2021 included certain office lease agreements prior to the adoption of ASC 842. Amortization of these contract liabilities for the three months ended June 30, 2022 and 2021, was $1.1 million and $1.4 million, respectively, of which $0.4 million and $0.4 million was included within cost of revenues and $0.7 million and $1.0 million was included in general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss, respectively. Amortization of these contract liabilities for the six months ended June 30, 2022 and 2021 was $2.2 million and $2.8 million, respectively, of which $0.9 million and $0.9 million was included within cost of revenues and $1.3 million and $1.9 million was included in general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss, respectively.
Deferred Revenue
The Company records contract liabilities pursuant to ASC 606 which consist of deferred revenue and contract billings in excess of earned revenue.
Deferred revenues arise from contracts that permit upfront billing and the collection of fees covering the entire contractual service period, which is generally six to twelve months and in advance of the satisfaction of the performance obligations identified within the related contract. As of June 30, 2022 and December 31, 2021, such fees were $11.2 million and $11.7 million, respectively. The Company recognized $1.7 million of revenue during the three months ended June 30, 2022 that was included in deferred revenue at December 31, 2021. The Company recognized $5.2 million of revenue during the six months ended June 30, 2022 that was included in deferred revenue at December 31, 2021.
Revenue Recognition
Performance-Based Revenue
Certain contracts place a portion of fees at risk based on achieving certain performance metrics, such as customer cost savings, and/or clinical outcomes improvements (performance-based). The Company uses the most likely amount method to estimate variable consideration for these performance guarantees. The Company includes 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. The Company utilizes customer data in order to measure performance. Performance-based fees subject to refund that the Company has not recognized as revenues are generally due to either: (1) data from the customer is insufficient or incomplete to measure performance; or (2) interim performance measures indicate that it is not probable that the Company will meet the relevant performance target(s). As of June 30, 2022 and December 31, 2021, such fees included within deferred revenue were $3.7 million and $3.9 million, respectively.
In the event performance measures are not met by the end of the measurement period, typically one year, some or all of the performance-based fees are required to be refunded. During the settlement process under a contract, which generally occurs six to eight months after the end of a contract year, performance-based fees are reconciled and settled. Approximately $2.5 million and $3.7 million of revenues recognized during the three months ended June 30, 2022 and 2021, respectively, were performance-based. During the three months ended June 30, 2022, $0.9 million was recognized in revenue that related to services provided prior to December 31, 2021.
Approximately $4.4 million and $5.3 million of revenues recognized during the six months ended June 30, 2022 and 2021, respectively, were performance-based. During the six months ended June 30, 2022, $1.2 million was recognized in revenue that related to services provided prior to December 31, 2021. As of June 30, 2022 and 2021, the cumulative amount of performance-based revenues that had met the criteria for recognition and had been recognized but had not yet been settled with customers, totaled $5.1 million and $3.3 million, respectively.
8

Sharecare, Inc.
Notes to Unaudited Consolidated Financial Statements
(Unaudited)

Remaining Performance Obligations
Remaining performance obligations represent contracted revenues that are non-cancellable and have not yet been recognized due to unsatisfied or partially satisfied performance obligations. This includes deferred revenues and amounts that will be invoiced and recognized as revenues in future periods. As of June 30, 2022, future estimated revenue related to performance obligations with terms of more than one year that are unsatisfied or partially unsatisfied at the end of the reporting period was approximately $116.0 million. As of June 30, 2022, the Company expects to recognize revenue on approximately 63% of these unsatisfied performance obligations over the following 24 months and the remainder thereafter.
Disaggregated Revenue
The following table presents the Company’s revenues disaggregated by revenue source (in thousands):
Three Months Ended
June 30,
Six Months Ended
June 30,
2022202120222021
Enterprise$59,889 $60,008 $119,660 $114,143 
Provider26,402 22,146 51,118 42,155 
Life Sciences 17,532 16,305 33,755 32,363 
Total Revenue$103,823 $98,459 $204,533 $188,661 

Other Expenses
For the three and six months ended June 30, 2022 and 2021, other income (expenses) consisted of the following (in thousands):
Three Months Ended
June 30,
Six Months Ended
June 30,
2022202120222021
Re-measurement of contingent consideration$4,475 $(8,522)$11,252 $(15,499)
Re-measurement of warrant liabilities1,899 (1,386)7,490 (6,157)
Other453 1,057 930 926 
Total other income (expenses)$6,827 $(8,851)$19,672 $(20,730)

Accounting Standards Not Yet Adopted
As an emerging growth company (“EGC”), the Jumpstart Our Business Startups Act (“JOBS Act”) allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are applicable to private companies (that is, those that have not had a registration statement declared effective under the Securities Act of 1933, as amended (the “Securities Act”), or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). The Company has elected to use this extended transition period under the JOBS Act until such time as the Company is no longer considered to be an EGC. The adoption dates discussed below reflect this election.
Credit Losses. In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which is intended to improve the timing, and enhance the accounting and disclosure, of credit losses on financial assets. This update modified the existing accounting guidance related to the impairment evaluation for available-for-sale debt securities, reinsurance recoverables, and accounts receivables and could result in the creation of an allowance for credit losses as a contra asset account. The ASU requires a cumulative-effect change to retained earnings in the period of adoption, to the extent applicable. The amendments in ASU 2016-13 are effective for fiscal years beginning after December 15, 2022, including interim periods within the fiscal year. The Company is currently evaluating this new standard and the impact it will have on its consolidated financial statements.

9

Sharecare, Inc.
Notes to Unaudited Consolidated Financial Statements
(Unaudited)

Recently Adopted Accounting Standards
Leases. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). Lessees are required to recognize most leases on their balance sheet as a right-of-use (“ROU”) asset and a lease liability. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating leases or finance leases. Classification is based on criteria that are largely similar to those applied in prior lease accounting, but without explicit bright lines. Lessor accounting is similar to the current model but updated to align with certain changes to the lessee model and the revenue recognition guidance in ASC 606.
In July 2018, the FASB approved an additional optional transition method by allowing entities to initially apply the new leases standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. As of January 1, 2022, the Company adopted the standard using this optional transition method. The accounting for capital leases remained substantially unchanged. The Company has applied the available package of practical expedients, as well as the election not to apply recognition and measurement requirements to short-term leases. See Note 6 for further details.

2. Business Combination
As discussed in Note 1, on June 29, 2021, FCAC held a special meeting of stockholders (the “Special Meeting”) at which the FCAC stockholders considered and adopted, among other matters, the Merger Agreement. On July 1, 2021, the parties to the Merger Agreement consummated the Transactions, with Legacy Sharecare surviving the merger as a wholly owned subsidiary of the Company.
Shares of Legacy Sharecare common stock issued and outstanding were canceled and converted into the right to receive 71.26 shares of common stock. Unless otherwise stated, the Exchange Ratio has been applied to the number of shares and share prices of Legacy Sharecare throughout these consolidated financial statements.
Prior to the Special Meeting, holders of 19,864,030 shares of FCAC’s Class A common stock sold in FCAC’s initial public offering exercised their right to redeem those shares for cash at a price of approximately $10.00 per share, for an aggregate redemption price of approximately $198.6 million. Immediately after giving effect to the Business Combination (including as a result of the redemptions described above), there were 333,875,179 issued and outstanding shares of the Company’s common stock (excluding the Earnout Shares, as defined herein). In addition, at the closing of the Business Combination, the Company issued 5,000,000 shares of Series A Convertible Preferred Stock (the “Series A Preferred Stock”) upon exchange of the shares of Legacy Sharecare Series D redeemable convertible preferred stock held by one investor in accordance with the terms of the Merger Agreement.
Pursuant to the Merger Agreement, 1,713,000 shares of common stock are held in escrow and shall be released to the sponsor of FCAC (the “Sponsor Earnout Shares”). In addition, 1,500,000 shares of common stock are held in escrow and shall be released to Legacy Sharecare stockholders and option holders (the “Sharecare Earnout Shares” and, together with the Sponsor Earnout Shares, the “Earnout Shares”). The Earnout Shares are subject to release upon achieving certain triggering events as defined in the Merger Agreement. The earnout conditions have not been satisfied as of June 30, 2022. The Earnout Shares allocated to Legacy Sharecare stockholders are accounted for as liability instruments and classified as level 3 instruments that are marked-to-market each reporting period (see Note 3). The Earnout Shares allocated to the Legacy Sharecare option holders are classified as equity instruments and accounted for under ASC 718.
The Business Combination was accounted for as a Reverse Recapitalization, with no goodwill or other intangible assets recorded, in accordance with GAAP. Under this method of accounting, FCAC was treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of Legacy Sharecare issuing stock for the net assets of FCAC, accompanied by a recapitalization. The cash of $146.4 million, which included cash previously held in the FCAC trust (net of redemptions), and working capital accounts of FCAC were recorded at historical cost, which approximates fair value. The Company also assumed the private placement warrants and public warrants (each as defined herein) from FCAC, which were recorded based on the acquisition date fair value (see Note 3). Cash paid for issuance costs and advisory fees were approximately $54.0 million. Additionally, in connection with the Business Combination, the Company made one-time bonus payments of $11.6 million to certain executives which has been recorded in General and Administrative expense, and resulted in a reduction in operating cash flows.
10

Sharecare, Inc.
Notes to Unaudited Consolidated Financial Statements
(Unaudited)
Upon the closing of the Business Combination, the Company’s certificate of incorporation was amended and restated to, among other things, increase the total number of authorized shares of all classes of capital stock to 615,000,000 shares, of which 600,000,000 shares are designated as common stock, par value of $0.0001 per share, and 15,000,000 shares are designated as preferred stock, par value of $0.0001 per share, including 5,000,000 shares of Series A Preferred Stock.
In connection with the Business Combination, FCAC entered into subscription agreements, each dated as of February 12, 2021, with certain investors (the “Investors”), pursuant to which, among other things, FCAC issued and sold, in private placements, an aggregate of 42,560,000 shares of FCAC Class A common stock for $10.00 per share (the “Private Placement”). The Private Placement closed immediately prior to the Business Combination. The shares of FCAC Class A common stock issued to the Investors became shares of the Company’s common stock upon consummation of the Business Combination.
3. Fair Value Measurements
The Company’s financial instruments consist of cash equivalents, accounts receivable, accounts payable, accrued liabilities, warrant liabilities, and contingent consideration. Cash equivalents are comprised of money market funds stated at amortized cost, which approximates fair value at the balance sheet dates, due to the short period of time to maturity. Accounts receivable, accounts payable, and accrued liabilities are stated at their carrying value, which approximates fair value due to the short time to the expected settlement date. The warrant liabilities and contingent consideration liabilities relate to previous acquisitions and the Business Combination.
The following tables present the fair value hierarchy for assets and liabilities measured at fair value as of June 30, 2022 (in thousands):
June 30, 2022
Level 1Level 2Level 3Total Fair Value
Cash equivalents
Money market funds$10,650 $ $ $10,650 
Total cash equivalents at fair value$10,650 $ $ $10,650 
Liabilities
  Warrant liabilities $3,330 $ $ $3,330 
  Contingent consideration – other liabilities  740 740 
Total liabilities at fair value$3,330 $ $740 $4,070 
The warrants included in the units issued in FCAC’s initial public offering (the “public warrants”) and the warrants issued by FCAC simultaneously with its initial public offering in a private placement (the “private placement warrants”), were both classified within Level 1 as they are publicly traded and have observable market prices in an active market. The public warrants and private placement warrants are both exercisable for one share of common stock at an exercise price of $11.50.
Contingent consideration was classified within Level 3 as it was valued using certain unobservable inputs. The fair value of the contingent consideration was estimated based on the Company’s stock price and number of shares expected to be issued related to acquisitions in prior years. The fair value of the Earnout Shares allocated to Legacy Sharecare stockholders and FCAC Sponsors are included in contingent consideration and are estimated using a Monte Carlo simulation with inputs for the Company’s stock price, expected volatility, risk-free rate, first and second earnout hurdles and expected term.
The following is a schedule of changes to the contingent consideration — other current liabilities classified as Level 3 for the periods presented (in thousands):
December 31, 2021$13,897 
Settlement of contingent consideration for HDS retained shares(1,905)
Re-measurement of contingent consideration(11,252)
June 30, 2022$740 
11

Sharecare, Inc.
Notes to Unaudited Consolidated Financial Statements
(Unaudited)
4. Balance Sheet Components
Accrued Expenses and Other Current Liabilities
As of June 30, 2022 and December 31, 2021, accrued expenses and other current liabilities consisted of the following (in thousands):
June 30,
2022
December 31,
2021
Accrued expenses$14,891 $27,050 
Accrued compensation15,285 16,428 
Accrued media costs2,585 4,816 
Accrued taxes1,227 1,396 
Operating lease liabilities, current4,768  
Accrued other2,298 1,963 
Total accrued expenses and other current liabilities$41,054 $51,653 
5. Acquisitions
CareLinx
On August 11, 2021, the Company acquired all outstanding equity interests of CareLinx Inc. (“CareLinx”). The total preliminary purchase price in connection with the acquisition is $64.9 million, consisting of $55.2 million of cash and $9.7 million equity-based consideration, comprised of 1,169,980 shares of common stock and 295,758 stock options. The preliminary fair value of the assets acquired and liabilities assumed in connection with the acquisition are as follows (in thousands):
Cash$445 
Accounts receivable4,528 
Other receivables59 
Prepaid expenses234 
Other current assets300 
Developed technology14,800 
Customer relationships13,300 
Trade name2,600 
Other long-term assets1,789 
Goodwill31,018 
Accrued expenses(1,371)
Contract liabilities - current(45)
Noncurrent contract liabilities(53)
Other long-term liabilities(2,693)
Total$64,911 
The fair value assigned to the developed technology was determined using the relief from royalty method. The fair value of customer relationships was determined using the multi-period excess earnings method, which estimates the direct cash flow expected to be generated from the existing customers acquired. The Company incurred transaction-related expenses of $1.1 million which were recorded under general and administrative expenses in the Consolidated Statement of Operations and Comprehensive Loss. Goodwill represents the excess of the purchase consideration over the estimated acquisition date fair value of the net tangible and identifiable intangible assets acquired and liabilities assumed. Goodwill also represents the future
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Sharecare, Inc.
Notes to Unaudited Consolidated Financial Statements
(Unaudited)
benefits as a result of the acquisition that will enhance the Company’s services available to both new and existing customers and increase the Company’s competitive position. The goodwill resulting from this acquisition is not tax deductible.
The purchase accounting for the CareLinx business combination remains preliminary, with respect to working capital assets and liabilities assumed, and any related goodwill adjustments as management continues to gather and evaluate information about circumstances that existed as of the acquisition date. Additionally, the assessment of the related income tax attributes of the transaction is still in process. The Company will update its disclosures in subsequent financial statements as additional progress is made to account for the transaction.

6. Leases
On January 1, 2022, the Company adopted ASU 2016-02, Leases (Topic 842) using the optional transition method resulting in a cumulative-effect adjustment to the Consolidated Balance Sheet at the adoption date. Comparative financial statements of prior periods have not been adjusted to apply the new accounting standard retrospectively. The new method of accounting was applied only to leases that have ongoing minimum lease commitments after January 1, 2022, excluding short-term leases. As of the adoption date, the Company recognized total ROU assets of $8.1 million, with corresponding lease liabilities of $9.2 million on the Consolidated Balance Sheet. The adoption did not impact the beginning accumulated deficit, or prior year Consolidated Statements of Operations and Comprehensive Loss and Statements of Cash Flows. Finance leases are immaterial.
The effect of the January 1, 2022 adoption on key financial statement line items as of June 30, 2022 is as follows (in thousands):
June 30, 2022
Balance Sheet:Financial position if ASU 2016-02 had not been adopted on January 1, 2022As reported under ASU 2016-02 adoption$ Change% Change
Prepaid expenses$12,760 $12,330 (430)(3)%
Other long-term assets$11,932 $20,433 8,501 71 %
Total assets$692,992 $701,063 8,071 1 %
Accrued expenses and other current liabilities$36,280 $41,054 4,774 13 %
Contract liabilities, current$3,066 $2,518 (548)(18)%
Contract liabilities, noncurrent$977 $768 (209)(21)%
Other long-term liabilities$4,992 $9,353 4,361 87 %
Total liabilities$81,831 $90,209 8,378 10 %
Under Topic 842, the Company determines if an arrangement is a lease at contract inception. Operating lease ROU assets and liabilities are included in other long-term assets, accrued expenses and other current liabilities, and other long-term liabilities in the Consolidated Balance Sheets. Finance lease ROU assets and liabilities are included in property and equipment, accounts payable, and other long-term liabilities in the Consolidated Balance Sheets.
Operating ROU assets and lease liabilities are recognized based on the present value of the future fixed lease payments over the lease term at the commencement date. As most of the Company’s leases do not provide an implicit rate, the Company used its quarterly incremental borrowing rate based on the information available that corresponds to each lease commencement date and lease term when determining the present value of future payments for operating leases.
The Company’s operating leases principally involve office space. The Company leases office space in Sao Paulo, Brazil and Berlin, Germany; and the following states: Arizona, California, Florida, Georgia, Maryland, Massachusetts, New York, North Carolina, Oklahoma, Pennsylvania, Tennessee, and Washington under noncancellable operating leases expiring at various dates through November 2027.
These leases may contain variable non-lease components consisting of common area maintenance, operating expenses, insurance, and similar costs of the office space that we occupy. The Company has adopted the practical expedient to not
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Sharecare, Inc.
Notes to Unaudited Consolidated Financial Statements
(Unaudited)
separate these non-lease components from the lease components and instead account for them as a single lease component for all of the leases. The operating lease ROU assets include future fixed lease payments made as well as any initial direct costs incurred and exclude lease incentives. Variable lease payments are not included within the operating lease ROU assets or lease liabilities and are expensed in the period in which they are incurred. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for minimum lease payments on operating leases is recognized on a straight-line basis over the lease term. The Company has elected to not record operating lease ROU assets and liabilities for short-term leases that have a term of twelve months or less. Lease expense includes short-term lease cost which is not material to the Consolidated Financial Statements.
The components of operating lease costs, lease term and discount rate for the three and six months ended June 30, 2022 are as follows (in thousands, except lease term and discount):
Three Months Ended
June 30, 2022
Six Months Ended
June 30, 2022
Operating lease costs$1,613 $3,217 
Variable lease costs536 1,067 
Short-term lease expense59 101 
Total operating lease costs$2,208 $4,385 
Weighted-average remaining lease term (years):
   Operating leases2.91
Weighted-average discount rate: