S-1 1 y80435sv1.htm FORM S-1
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As filed with the Securities and Exchange Commission on January 22, 2010
Registration No. 333-

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933




(Exact name of registrant as specified in its charter)






Delaware

7389

80-0036062
(State or other jurisdiction of
incorporation or organization)

(Primary Standard Industrial
Classification Code Number)

(I.R.S. Employer
Identification No.)




45 Main St., Suite 800
Brooklyn, NY 11201
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)




Benjamin Wolin
Chief Executive Officer
45 Main St., Suite 800
Brooklyn, NY 11201
(718) 797-0722
(Name, address, including zip code, and telephone number, including area code, of agent for service)




Copies to:






Babak Yaghmaie, Esq.
Stephane Levy, Esq.
Cooley Godward Kronish LLP
1114 Avenue of the Americas
New York, NY 10036-7798
(212) 479-6000

Alan Shapiro, Esq.
Executive Vice President
& General Counsel
Everyday Health, Inc.
45 Main St., Suite 800
Brooklyn, NY 11201
(718) 797-0722

Kirk A. Davenport, Esq.
Latham & Watkins LLP
885 Third Avenue
New York, NY 10022-4834
(212) 906-1200




Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check
the following box. o

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the
definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o
Accelerated filer o
Non-accelerated filer þ
Smaller reporting company o
(Do not check if a smaller reporting company)

CALCULATION OF REGISTRATION FEE













Proposed Maximum

Amount of
Title of Each Class of


Aggregate


Registration
Securities to be Registered

Offering Price(1)

Fee(2)
Common Stock, $0.01 par value per share

$100,000,000

$ 7,130










(1) Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.

(2) Calculated pursuant to Rule 457(o) based on an estimate of the proposed maximum aggregate offering price.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.

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The information in this preliminary prospectus is not complete and may be changed. We and the selling stockholders may not sell these securities until the
registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities
and we are not soliciting any offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion. Dated January 22, 2010.

Shares


Common Stock




This is an initial public offering of shares of common stock of Everyday Health, Inc.

Everyday Health is offering of the shares to be sold in the offering. The selling stockholders identified in this prospectus are
offering shares. Everyday Health will not receive any of the proceeds from the sale of the shares being sold by the selling stockholders.

Prior to this offering, there has been no public market for our common stock. It is currently estimated that the initial public offering price
per share will be between $ and $ . We intend to apply to have our common stock listed on The Nasdaq Global Market under the symbol
“EVDY.”

See “Risk Factors” on page 13 to read about factors you should consider before buying shares of our common stock.




Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these
securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal
offense.













Per Share

Total

Initial public offering price

$

$
Underwriting discounts and commissions

$


$

Proceeds, before expenses, to Everyday Health

$


$

Proceeds, before expenses, to the selling stockholders

$


$


















To the extent that the underwriters sell more than shares of common stock, the underwriters have the option to purchase up to an
additional shares from Everyday Health at the initial public offering price less underwriting discounts and commissions.




The underwriters expect to deliver the shares against payment in New York, New York on , 2010.

Goldman, Sachs & Co.
J.P. Morgan

Jefferies & Co.
Needham & Company, LLC





Prospectus dated , 2010.
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H el pi ng consum ers: Resear ch sym pt om s Fi nd t r eat m ent opt i ons Connect wi t h ot her s Eat heal t hi er Li ve bet t er H eal t h i s a j ourney. And Eve r yday Heal t h i s t her e t o l ea d t he way, pr ovi di ng consum er s wi t h t he exper t gui dance and advi ce t hey need t o m ake bet t er choi ces , act i vel y m anage t hei r condi t i ons and l i ve heal t hi er l i ves , ever y day. www. Ever ydayHeal t h. com

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Because ever y day count s . Condi t i on Managem ent Pr eve nt i on Car i ng Li f es t age

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Ever yday Heal t h i s a l eadi ng pr ovi der of onl i ne consum er heal t h sol ut i ons . Our br oad por t f ol i o of over 25 webs i t es span t he heal t h spect r um — f r om car egi vi ng and c ondi t i on m anagem ent t o f i t ness , nut r i t i on and per sonal car e, we o er user s t he t ool s , com m uni t y and exper t advi ce t hey need t o l i ve heal t hi er , ever y day. Tr eat m ent Opt i ons Connect i ng Per sonal Car e Fi t ness and Nut r i t i on

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TABLE OF CONTENTS

Prospectus








Page

Prospectus Summary


1
Summary Consolidated Financial Data


7
Risk Factors

13
Special Note Regarding Forward-Looking Statements

37
Industry and Market Data

37
Use of Proceeds

38
Dividend Policy

39
Capitalization

40
Dilution

42
Selected Consolidated Financial Data

44
Management’s Discussion and Analysis of Financial Condition and Results of Operations

47
Business

72
Management

93
Executive Compensation

101
Related Person Transactions

116
Principal and Selling Stockholders

119
Description of Capital Stock

122
Shares Available For Future Sale

127
Certain U.S. Federal Tax Consequences to Non-U.S. Holders

130
Underwriting

133
Legal Matters

137
Experts

137
Where You Can Find Additional Information

137
Index to Consolidated Financial Statements

F-1
EX-3.1
EX-3.2
EX-3.4
EX-4.2
EX-4.3
EX-4.4
EX-4.5
EX-4.6
EX-4.7
EX-10.1
EX-10.3
EX-10.4
EX-10.6
EX-10.7
EX-10.8
EX-10.9
EX-10.10
EX-21.1
EX-23.1
EX-23.2


Through and including , 2010 (the 25th day after the date of this prospectus), all dealers effecting transactions in
these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a
dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or
subscription.


No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this prospectus. You
must not rely on any unauthorized information or representations. This prospectus is an offer to sell only the shares offered hereby, but only under
circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date.


All website references in this prospectus are intended to be inactive textual references only. The content of such websites is not
incorporated by reference in this prospectus.
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PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus. You should read the following summary together with the
more detailed information appearing in this prospectus, including our consolidated financial statements and related notes, and the risk factors
beginning on page 13, before deciding whether to purchase shares of our common stock.

Everyday Health, Inc.

Overview

We are a leading provider of online consumer health solutions. We provide our consumers, advertisers and partners with content and
advertising-based services across a broad portfolio of websites that span the health spectrum — from lifestyle offerings in pregnancy, diet and
fitness to in-depth medical content for condition prevention and management.

The Internet has fundamentally altered the consumer health market by enabling consumers to readily access a wide variety of useful
information and decision-support tools. Historically, consumers accessed such information through general portals, and more recently search
engines, each of which serve as gateways to the Internet. The increased reliance on search engines has caused fragmentation of the consumer
audience online and has resulted in the growth in popularity of highly-specialized content websites. This is particularly true for the consumer health
vertical since consumers have a wide variety of individual health interests. We have designed the Everyday Health portfolio, which includes
websites that we operate and with which we partner, to take advantage of this fragmentation by providing multiple sources of trusted and highly-
personalized content to satisfy the diverse needs of our consumers and advertising customers. The Everyday Health portfolio consists of over 25
consumer health websites, including www.EverydayHealth.com, www.RevolutionHealth.com, www.WhattoExpect.com, www.JillianMichaels.com,
www.SouthBeachDiet.com, www.SparkPeople.com and www.Drugstore.com.

The depth, breadth and quality of the content across the Everyday Health portfolio, including our innovative and personalized tools and
community features, have enabled us to serve tens of millions of consumers each month. During 2009, the Everyday Health portfolio attracted an
average of 25 million unique visitors per month, according to comScore, Inc., a leading market research firm. Since our inception, over 38 million
consumers have registered on our websites to obtain personalized content and features, such as pregnancy calendars, calorie tracking tools or
newsletters on requested health topics, and over 1.7 million consumers have paid for a premium subscription service. During 2009, we averaged
over 16,000 registrations per day and sent over 410 million opt-in, content-based newsletters per month.

The unique composition of the Everyday Health portfolio, together with our large consumer audience, database of registered users and
customized content offerings, has created an attractive platform for national, regional and local advertisers. This aggregation of trusted websites
provides a diverse set of highly-targeted solutions for advertisers, including display advertising, integrated sponsorships, custom e-mail campaigns
and lead generation products. Our data-driven focus also allows us to provide detailed post-campaign reporting metrics that enable advertisers to
assess the effectiveness of their marketing expenditures. We believe this combination of targeted advertising and results-focused measurability
allows us to compete favorably in the consumer health vertical. Our advertisers consist primarily of pharmaceutical and medical device
companies, manufacturers and retailers of over-the-counter products and consumer-packaged-goods and healthcare providers. During 2009, we
featured over 470 brands on the Everyday Health portfolio and our customers included 24 of the top 25 global companies ranked by 2008
healthcare revenue as compiled by MedAdNews and 43 of the top “100 Leading National Advertisers in 2008” as compiled by Advertising Age.

We utilize an integrated approach to developing, operating and promoting the entire Everyday Health portfolio through shared resources.
This approach enables us to efficiently operate our own websites, in addition to those of our partners that are looking to expand and monetize
their consumer
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audience online. In addition, the Everyday Health portfolio allows providers of consumer health content with an existing online presence to
leverage our advertising platform to increase their revenues, while maintaining editorial and operational control over their content.

We generate revenues primarily from the sale of advertising and sponsorship services, as well as the sale and licensing of our premium
content, including subscriptions to certain websites in the Everyday Health portfolio. Our revenues have increased significantly in recent years as
we have launched new content and advertising-based services, acquired complementary businesses, expanded our consumer audience and
aggressively grown our advertising customer base.

Industry Background

The widespread adoption of the Internet as a preferred source for consumer information has resulted in the availability of a vast quantity of
content across a disparate array of websites. Historically, consumers accessed such information through general portals, which typically have
served as a gateway to the Internet and, more recently, search engines that allow consumers to search for information around topics of interest.
As a result, we believe that consumers are increasingly seeking websites that are dedicated to a specific vertical content category and provide
deeper and more tailored content offerings.

Prior to the widespread adoption of the Internet, quality consumer health information was not readily available, and consumers were
forced to rely on their physicians, friends and family, and hard-to-access resources to address their health questions and concerns. The Internet,
however, has made such information more accessible and the consumer health vertical has rapidly evolved as one of the largest and fastest
growing content categories on the Internet. We believe that the growth of the consumer health vertical will further accelerate due to current
legislative and regulatory trends underway in the U.S. that seek to place a greater degree of emphasis on wellness and preventive care as a
means of controlling and reducing healthcare costs.

Advertisers are increasingly migrating a greater portion of their spending online as more consumers turn to the Internet as a preferred
medium for accessing information and purchasing products and services. According to an August 2009 report by Veronis Suhler Stevenson, a
private equity firm, total online advertising represented 18.8% of the total U.S. advertising market in 2009. We believe that the shift to online
advertising in the consumer health vertical has not developed as rapidly as the overall online advertising market, and therefore represents a
significant opportunity for us.

In addition to providing consumers with free access to a variety of health information, the Internet also provides consumers with a broad
range of subscription-based, premium health-related content. We believe that consumer demand for authoritative and differentiated content from
trusted sources has contributed to, and will continue to drive, the growth of the subscription-based, premium services market online.

The Everyday Health Solution

We believe our success in becoming a leading provider of online consumer health solutions has been driven by our ability to address the
challenges faced by consumers, advertisers and partners. Our portfolio of over 25 websites is designed to enable:


• consumers to readily access a variety of valuable content, interactive tools and community features across numerous health categories
and empower them to better manage their health concerns;


• advertisers to reach a large and desirable base of consumers in a targeted and contextually-relevant manner; and


• partners to more effectively promote and monetize their content online.
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Benefits to Consumers

Premier Portfolio of Trusted Websites. We have built a portfolio of websites that provides consumers with reliable, informative and
trusted content. We have enhanced the value of our content offerings by featuring expert opinions from leading authorities on specific health and
wellness topics. We own and operate several health and wellness websites, including our flagship website, www.EverydayHealth.com, and we
partner with many well-recognized consumer health content providers. For example, we are the exclusive online partner with the author of the
What to Expect When You’re Expecting series of books, the best-selling pregnancy books ever published, to develop, operate and monetize
www.WhattoExpect.com. We have also partnered with recognized leaders in the health, diet and fitness categories, including the author and
publisher of The South Beach Diet (www.SouthBeachDiet.com), one of the best-selling diet books of all time, and Jillian Michaels
(www.JillianMichaels.com), from the NBC television show, The Biggest Loser.

Engaging Content, Extensive Personalization Tools and Community Features. Our engaging content, extensive personalization tools and
community features are critical components of our value proposition to consumers. We have dedicated significant resources to build a robust and
interactive portfolio of websites that allows consumers to readily access the health and wellness content they are seeking to manage their daily
lives and address specific issues and concerns. For example, consumers can research symptoms and create personalized tools such as
pregnancy calendars, calorie counters, meal plans and drug alerts. We utilize the information that our registered users voluntarily submit to
provide them with targeted content, features and tools that are intended to better meet their individual needs. We have also created a community
environment that empowers consumers to share information and interact with each other.

Benefits to Advertisers

High Quality and Trusted Platform. We believe that advertisers, particularly large pharmaceutical and medical device companies and
manufacturers of over-the-counter and consumer-packaged-goods, are highly sensitive to promoting their products and services in an environment
that will not diminish the value of their brand. The Everyday Health portfolio, which features many well-recognized providers of consumer health
content, provides advertisers with a trusted platform in which to promote their offerings.

Large Audience Scale. The Everyday Health portfolio attracts a large number of unique visitors, making it attractive to advertisers in light
of the highly-fragmented nature of the online consumer health market. We believe that the overall size, scale and composition of the Everyday
Health portfolio, as well as the discrete categories within the portfolio that engage the audience around specific consumer health topics, provide
advertisers with significant flexibility to undertake multiple advertising strategies through a single platform, whether focused on a national, regional
or local audience.

Targeted and Innovative Solutions. We believe that the Everyday Health portfolio provides advertisers with a compelling opportunity to
reach consumers in a contextually-relevant environment. Our focus on customized offerings, in addition to our engaged consumer base, allows
advertisers to effectively target their desired audience through highly immersive and interactive campaigns. Our suite of advertising solutions,
when combined with our extensive database of information voluntarily provided by millions of registered users, can facilitate advertising campaigns
that are directed at specific geographic areas, demographic groups, interests, issues or user communities. Moreover, our data-driven focus
enables us to provide detailed post-campaign reporting and metrics that allow advertisers to measure their results and evaluate the effectiveness
of their campaigns.

Benefits to Partners

Online Expertise and Portfolio Integration. A premier consumer health website requires timely and updated content, interactive tools and
applications and robust community features. We have expertise in developing content, integrating new websites and cross-promoting our content
offerings
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across the Everyday Health portfolio to our consumers. We believe that such cross-promotion activities, combined with our comprehensive user
database and experience in operating and promoting websites, make us well suited to promote our partners’ content and expand their consumer
audience online.

Monetization Opportunities. As consumers become more sophisticated in their use of the Internet and the use of search engines
continues to fragment the audience, the Everyday Health portfolio provides an attractive method for our partners to monetize their content and
create new revenue streams. The Everyday Health portfolio enables our partners to benefit from the large and targeted advertising platform that
we have created to increase their exposure to major advertisers, thereby increasing their revenues, without relinquishing editorial and operational
control over their content offerings.

Our Strategy

Our goal is to offer the best content, tools and community features across the health spectrum, while providing a compelling platform for
an increasing number of advertisers and partners seeking to engage with our large and growing consumer base. Key elements of our strategy
include:


• developing new and improved offerings to enhance the consumer experience;


• seeking to aggressively grow our advertiser and sponsorship base;


• continuing to build and enhance awareness of the Everyday Health brand;


• acquiring complementary businesses; and


• expanding into international markets.

Preferred Stock Conversion and Reverse Stock Split

Prior to the consummation of this offering, all of the outstanding shares of our redeemable convertible preferred stock will automatically
convert into shares of our common stock, which we refer to in this prospectus as the automatic preferred stock conversion. As a result,
after this offering, we will only have common stock outstanding. Prior to the consummation of this offering, we will also increase our total
authorized number of shares of capital stock, make certain changes to our charter documents and effect a to reverse stock split,
which we refer to in this prospectus as the reverse stock split.

Corporate History and Information

We were incorporated in Delaware in January 2002 as Agora Media Inc. We changed our name to Waterfront Media Inc. in January 2004.
In January 2010, to better align our corporate identity with the Everyday Health brand, we changed our name to Everyday Health, Inc.
References herein to “Everyday Health,” the “company,” “we,” “our” and “us” refer to the operations of Everyday Health, Inc. and its consolidated
subsidiaries, unless otherwise specified.

Our principal executive office is located at 45 Main Street, Suite 800, Brooklyn, NY 11201, and our telephone number is (718) 797-0722.
Our Internet website address is www.EverydayHealth.com. The information on, or that can be accessed through, any website in the Everyday
Health portfolio is not part of this prospectus, and you should not consider any information on, or that can be accessed through, any website in
the Everyday Health portfolio as part of this prospectus.


The names Everyday Health, Revolution Health, CarePages, Daily Glow and our logos are trademarks, service marks or trade names
owned by us. All other trademarks, service marks or trade names appearing in this prospectus are owned by their respective holders.
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The Offering

Common stock offered by Everyday Health
shares

Common stock offered by the selling stockholders
shares

Common stock to be outstanding immediately after
this offering
shares

Use of proceeds
We estimate that we will receive net proceeds from this offering of approximately
$ million, based on an assumed public offering price of $ per share, the midpoint of
the price range set forth on the cover of this prospectus, after deducting the estimated
underwriting discounts and commissions and offering expenses payable by us. We intend to
use the net proceeds from this offering for working capital and general corporate purposes,
which may include financing the development of new content and advertising-based
services, as well as funding capital expenditures and operating losses. We may also use a
portion of the net proceeds to repay borrowings under our credit facilities or acquire
complementary businesses, products or technologies. However, we do not have
agreements or commitments for any specific repayments or acquisitions at this time. We
will not receive any proceeds from the sale of shares by the selling stockholders in this
offering. See “Use of Proceeds.”

Proposed NASDAQ Global Market symbol
“EVDY”

Risk Factors
You should read the “Risk Factors” section beginning on page 13 and other information
included in this prospectus for a discussion of factors to consider carefully before deciding
to invest in shares of our common stock.

The number of shares of common stock that will be outstanding after this offering is based on 30,265,028 shares of common stock
outstanding as of September 30, 2009 after giving effect to the assumptions in the following paragraph, and excludes:


• 4,414,949 shares of common stock issuable upon exercise of outstanding options with a weighted-average exercise price of $4.65 per
share;


• 997,960 shares of common stock reserved for future issuance under our 2003 Stock Option Plan; provided, however, that following the
completion of this offering, no additional grants will be awarded under our 2003 Stock Option Plan and such shares will become
available for issuance under our 2010 Equity Incentive Plan, which we plan to adopt prior to the consummation of this offering;


• shares of common stock reserved for future issuance under our 2010 Equity Incentive Plan, which we plan to adopt prior to the
consummation of this offering; and
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• 157,303 shares of common stock issuable upon the exercise of outstanding warrants, which includes warrants to purchase our
redeemable convertible preferred stock that will become exercisable for common stock after this offering, at a weighted-average
exercise price of $4.58 per share.

Unless otherwise indicated, all information in this prospectus:


• gives effect to the completion of the reverse stock split;


• gives effect to the automatic preferred stock conversion;


• assumes no exercise by the underwriters of their option to purchase up to additional shares, consisting of shares to be purchased
from us; and


• gives effect to the adoption of our amended and restated certificate of incorporation and our amended and restated bylaws that will
occur immediately prior to the consummation of this offering.
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SUMMARY CONSOLIDATED FINANCIAL DATA

The following tables summarize our consolidated financial data for the periods presented. The consolidated statement of operations data
for the three years ended December 31, 2008 have been derived from our audited consolidated financial statements for the three years ended
December 31, 2008 included elsewhere in this prospectus. The consolidated statement of operations data for the nine months ended
September 30, 2008 and 2009 and the consolidated balance sheet data as of September 30, 2009 have been derived from our unaudited
consolidated financial statements included elsewhere in this prospectus. The consolidated statement of operations data for the three months
ended September 30, 2008 and 2009 have been derived from our unaudited consolidated financial statements, which are not included in this
prospectus. Our unaudited consolidated financial statements have been prepared on the same basis as the audited consolidated financial
statements and notes thereto and, in the opinion of our management, include all adjustments, consisting of normal recurring adjustments and
accruals, necessary for a fair statement of the information for the unaudited interim periods. Our historical results for prior interim periods are not
necessarily indicative of results to be expected for a full year or for any future period.

The pro forma balance sheet data as of September 30, 2009 give effect to the automatic preferred stock conversion. The pro forma as
adjusted balance sheet data as of September 30, 2009 give further effect to our issuance and sale of shares of common stock in this
offering at an assumed initial public offering price of $ per share, the midpoint of the estimated price range shown on the cover of this
prospectus, after deducting estimated underwriting discounts and commissions and offering expenses payable by us and the application of the net
proceeds therefrom as described in “Use of Proceeds.” The as adjusted information presented is illustrative only and will change based on the
actual initial public offering price and other terms of this offering determined at pricing.

On October 7, 2008, we acquired Revolution Health Group LLC and its subsidiaries, which we collectively refer to as RHG. Accordingly,
the following tables include RHG’s financial data from the closing date of the acquisition. Our operating expenses in the fourth quarter of 2008 and
the first and second quarters of 2009 included various transition-related expenses that we incurred following the closing of the RHG acquisition.
These transition-related expenses consisted of:


• compensation for product development, sales and marketing, and general and administrative personnel who were employed by us for a
short period of time following the RHG acquisition; and


• third-party product development expenses, such as content licensing fees, data center costs and other technology-related expenses.

We eliminated a majority of these redundant transition-related expenses by the beginning of the third quarter of 2009. As a result, the third
quarter of 2009 does not include any significant transition-related expenses resulting from the RHG acquisition. In the third quarter of 2009, our
sales and marketing, product development, and general and administrative expenses were reduced to 55% of our total revenues, as compared to
over 70% for the fourth quarter of 2008 and the first and second quarters of 2009, respectively.

You should read this information together with our consolidated financial statements and related notes included elsewhere in this
prospectus and the information under “Selected Consolidated Financial Data” and “Management’s Discussion and Analysis of Financial Condition
and Results of Operations.”

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Nine Months Ended

Three Months Ended



Year Ended December 31,

September 30,

September 30,



2006

2007

2008

2008

2009

2008

2009



(in thousands, except share and per share data)


Consolidated Statement of Operations Data:








Revenues
$
33,421 $
47,363 $
69,412 $
46,740 $
61,493 $
16,373 $
22,493





























Operating expenses:








Cost of revenue

21,830
30,111
35,229
26,787
30,757
7,756
9,265
Sales and marketing

4,108
7,425
14,503
8,444
14,567
3,441
4,180
Product development

8,534
10,753
14,874
9,308
15,077
3,372
3,971
General and administrative

4,318
6,859
12,906
7,418
12,558
2,616
4,131
Depreciation and amortization

1,029
2,030
4,340
2,360
7,333
875
2,442





























Total operating expenses

39,819
57,178
81,852
54,317
80,292
18,060
23,989





























Loss from operations

(6,398)
(9,815)
(12,440)
(7,577)
(18,799)
(1,687)
(1,496)
Interest (expense) income, net

196
(323)
(455)
(247)
(823)
(138)
(449)





























Loss before provision for income taxes

(6,202)
(10,138)
(12,895)
(7,824)
(19,622)
(1,825)
(1,945)
Provision for income taxes

—
—
(293)
—
(834)
—
(278)





























Net loss
$
(6,202) $
(10,138) $
(13,188) $
(7,824) $
(20,456) $
(1,825) $
(2,223)





























Net loss per common share:








Basic and diluted
$
(0.98) $
(1.57) $
(2.01) $
(1.19) $
(3.11) $
(0.28) $
(0.34)





























Pro forma basic and diluted (unaudited)(1)


$
(0.63)
$
(0.68)































Weighted-average common shares outstanding








Basic and diluted

6,347,745
6,444,696
6,559,614
6,557,915
6,569,850
6,564,246
6,580,644





























Pro forma basic and diluted (unaudited)(1)



20,955,330

30,217,684
































(1) Pro forma weighted average shares outstanding reflects the conversion of our redeemable convertible preferred stock (using the if-converted method) into
common stock as though the conversion had occurred on the original dates of issuance.


























Nine Months Ended Three Months Ended


Year Ended December 31,

September 30,

September 30,


2006

2007

2008


2008


2009


2008


2009



(in thousands)


Other Financial Data:















Adjusted EBITDA
$ (4,986) $ (6,795) $ (5,104) $
(3,246) $
(8,262) $
(78) $
1,671





























Stock-based compensation expense included in:















Sales and marketing
$
197 $
276 $
812 $
534 $
598 $
199 $
188
Product development


57

64

492

324

442

121

139
General and administrative


129

650

1,692

1,113

1,264

414

398





























Total stock-based compensation expense
$
383 $
990 $ 2,996 $
1,971 $
2,304 $
734 $
725






























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As of September 30, 2009









Pro Forma


Actual


Pro Forma


As Adjusted



(in thousands)


Consolidated Balance Sheet Data:







Cash and cash equivalents
$
12,281




Total assets


120,257




Deferred revenue


8,325




Long-term debt (including current portion)


12,000




Total liabilities


39,570




Redeemable convertible preferred stock


130,420




Total stockholders’ equity (deficit)


(49,733)





Definition and Discussion of Other Financial Data

Definition of Adjusted EBITDA

We define Adjusted EBITDA as net loss plus net interest (income) expense; income tax expense; non-cash charges including depreciation,
amortization and stock-based compensation expense; and compensation expense related to acquisition earnout arrangements.

Discussion of Adjusted EBITDA

Adjusted EBITDA is a measure of operating performance that is not calculated in accordance with generally accepted accounting
principles, or GAAP. The table below provides a reconciliation of Adjusted EBITDA to net loss, the most directly comparable financial measure
calculated and presented in accordance with GAAP. Adjusted EBITDA should not be considered as an alternative to net income, income from
operations or any other measure of financial performance calculated and presented in accordance with GAAP. Our Adjusted EBITDA may not be
comparable to similarly titled measures of other companies because other companies may not calculate similarly titled measures in the same
manner as we do. We prepare Adjusted EBITDA to eliminate the impact of items that we do not consider indicative of our core operating
performance. We encourage you to evaluate these adjustments and the reasons we consider them appropriate, as well as the material limitations
of non-GAAP measures and the manner in which we compensate for those limitations.

Our management uses Adjusted EBITDA:


• as a measure of operating performance;


• to allocate resources to enhance the financial performance of our business;


• to evaluate the effectiveness of our business strategies;


•
in communications with our board of directors concerning our financial performance;


• for planning purposes, including the preparation of our annual operating budget; and


• as a factor when determining management’s incentive compensation.

Management also uses Adjusted EBITDA to evaluate compliance with the debt covenants in one of our credit facilities, which includes an
EBITDA maintenance covenant. This credit facility’s definition of EBITDA is substantially similar to our definition of Adjusted EBITDA. See
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a description of our credit facilities.

Management believes that the use of Adjusted EBITDA provides consistency and comparability with our past financial performance,
facilitates period to period comparisons of operations, and also facilitates comparisons with other peer companies, many of which use similar
non-GAAP financial
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measures to supplement their GAAP results. Management believes that it is useful to exclude non-cash charges such as depreciation,
amortization and stock-based compensation from Adjusted EBITDA because:


• the amount of such non-cash expenses in any specific period may not directly correlate to the underlying performance of our business
operations; and


• such expenses can vary significantly between periods as a result of new acquisitions, or the timing of new stock-based awards, as the
case may be.

More specifically, we believe it is appropriate to exclude stock-based compensation expense from Adjusted EBITDA because non-cash
equity grants made at a certain price and point in time do not reflect how our business is performing at any particular time. While we believe that
stockholders should have information about any dilutive effect of outstanding options and the cost of that compensation, we also believe that
stockholders should have the ability to view the non-GAAP financial measure (which excludes these costs) that management uses to evaluate our
business. The determination of stock-based compensation expense is based on many subjective inputs, many of which are not necessarily directly
related to the performance of our business. Therefore, excluding this cost gives us a clearer view of the operating performance of our business.
Because of varying available valuation methodologies, subjective assumptions and the variety of award types that companies may use under the
authoritative accounting guidance for stock-based compensation, as well as the impact of non-operational factors such as our share price, on the
magnitude of this expense, management believes that providing a non-GAAP financial measure that excludes this stock-based compensation
expense allows investors and analysts to make meaningful comparisons between our operating results and those of other companies.
Stock-based compensation has been a significant non-cash recurring expense in our business and has been used as a key incentive offered to our
employees. We believe such compensation contributed to the revenues earned during the periods presented and also believe it will contribute to
the generation of future period revenues. Stock-based compensation expense will recur in future periods for GAAP purposes. There are material
limitations to our exclusion of stock-based compensation from Adjusted EBITDA, primarily that these expenses reduce our GAAP net income. See
below for a further discussion of these limitations on our use of Adjusted EBITDA as an analytical tool, as well as the manner in which
management compensates for these limitations.

We believe it is appropriate to exclude depreciation and amortization from Adjusted EBITDA because depreciation is a function of our
capital expenditures which are included in our statements of cash flows, while amortization reflects other asset acquisitions made at a point in
time and their associated costs. In analyzing the performance of our business currently, management believes it is helpful also to consider the
business without taking into account costs or benefits accruing from historical decisions on infrastructure and capacity. While these matters do
affect the overall financial health of our company, they are separately evaluated and relate to historic decisions that do not affect current
operations of our business on a cash flow basis. Further, depreciation and amortization do not result in ongoing cash expenditures. Investors
should note that the use of assets being depreciated or amortized contributed to revenues earned during the periods presented and will continue
to contribute to future period revenues. This depreciation and amortization expense will recur in future periods for GAAP purposes. There are
material limitations to our exclusion of depreciation and amortization from Adjusted EBITDA, primarily that these expenses reduce our GAAP net
income and the assets being depreciated or amortized will often have to be replaced in the future, resulting in future cash requirements. See
below for a further discussion of these limitations on our use of Adjusted EBITDA as an analytical tool, as well as the manner in which
management compensates for these limitations.

Management believes it is appropriate to exclude compensation expense associated with acquisition earnout arrangements because this
expense results from activities that are not part of our normal operations. There are material limitations to our exclusion from Adjusted EBITDA of
earnout expenses associated with acquisitions, primarily that these expenses reduce our GAAP net income.
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See below for a further discussion of these limitations on our use of Adjusted EBITDA as an analytical tool, as well as the manner in which
management compensates for these limitations.

We believe Adjusted EBITDA is useful to investors in evaluating our operating performance because securities analysts use Adjusted
EBITDA as a supplemental measure to evaluate the overall operating performance of companies. We anticipate that our investor and analyst
presentations after we are public will include Adjusted EBITDA.

Material limitations of non-GAAP measures

Although measures similar to Adjusted EBITDA are frequently used by investors and securities analysts in their evaluations of companies,
these measures, including Adjusted EBITDA, have limitations as an analytical tool, and you should not consider Adjusted EBITDA in isolation or as
a substitute for analysis of our results of operations as reported under GAAP.

Some of these limitations are:


• Adjusted EBITDA does not reflect our future requirements for contractual commitments or our cash expenditures or future requirements
for capital expenditures;


• Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital;


• Adjusted EBITDA does not reflect interest income or interest expense;


• Adjusted EBITDA does not reflect cash requirements for income taxes;


• Adjusted EBITDA does not reflect the non-cash component of employee compensation;


• although depreciation and amortization are non-cash charges, the assets being depreciated or amortized will often have to be replaced
in the future, and Adjusted EBITDA does not reflect any cash requirements for these replacements; and


• other companies in our industry may calculate similarly titled measures differently than we do, limiting their usefulness as comparative
measures.

Management compensates for the inherent limitations associated with using the Adjusted EBITDA measure through disclosure of such
limitations, presentation of our financial statements in accordance with GAAP and reconciliation of Adjusted EBITDA to the most directly
comparable GAAP measure, net loss. Further, management also reviews GAAP measures, and evaluates individual measures that are not
included in Adjusted EBITDA such as our level of capital expenditures, equity issuance and interest expense, among other measures.
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The following table presents a reconciliation of Adjusted EBITDA to net loss, the most comparable GAAP measure, for each of the periods
indicated:































Three Months





Nine Months Ended


Ended



Year Ended December 31,


September 30,


September 30,


2006


2007


2008


2008


2009


2008


2009



(in thousands)


Reconciliation of Adjusted EBITDA
to Net Loss:















Net loss
$ (6,202)
$ (10,138)
$ (13,188)
$ (7,824)
$ (20,456)
$ (1,825)
$ (2,223)
Interest (income) expense, net


(196)

323

455

247

823

138

449
Income tax expense


—

—

293

—

834

—

278
Depreciation and amortization
expense


1,029

2,030

4,340

2,360

7,333

875

2,442
Stock-based compensation


383

990

2,996

1,971

2,304

734

725
Compensation expense related to
acquisition earnout


—

—

—

—

900

—

—





























Adjusted EBITDA
$ (4,986)
$
(6,795)
$
(5,104)
$ (3,246)
$
(8,262)
$
(78)
$ 1,671





























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RISK FACTORS

Investing in our common stock involves a high degree of risk. You should carefully consider the following risk factors, as well as the
other information in this prospectus, before deciding whether to invest in our common stock. Our business, prospects, financial condition or
operating results could be materially adversely affected by any of these risks, as well as other risks not currently known to us or that we
currently consider immaterial. The trading price of our common stock could decline as a result of any of these risks, and you could lose part or
all of your investment in our common stock. When deciding whether to invest in our common stock, you should also refer to the other
information in this prospectus, including our consolidated financial statements and related notes and the “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” section of this prospectus. You should read the section entitled “Special Note
Regarding Forward-Looking Statements” immediately following these risk factors for a discussion of what types of statements are forward-
looking statements, as well as the significance of such statements in the context of this prospectus.

Risks Related to Our Business

We have a limited operating history.

Our company has been in existence since 2002. We have a limited operating history and participate in new markets that are changing
rapidly. Our limited operating history may make it difficult for you to evaluate our current business and our future prospects. Moreover, our
business has undergone significant changes during its short history as a result of:


• changes in our content and advertising-based service offerings;


• changes in the revenue mix derived from such offerings;


• acquisitions;


• technological changes; and


• changes in the markets in which we compete.

We expect our business to undergo further changes, making it difficult to forecast our future financial performance. Many companies
seeking to provide consumer health products and services through the Internet have failed to become profitable, and some have ceased
operations. We cannot assure you that our current strategy will be successful or that our business and revenues will continue to grow.

We have incurred significant losses since our inception and expect to incur losses in the future.

We have accumulated significant losses since our inception. We recorded net losses of $13.2 million and $20.5 million, respectively, in the
year ended December 31, 2008 and the nine months ended September 30, 2009. As of September 30, 2009, our accumulated deficit was
$59.7 million. We expect to continue to incur significant operating expenses and, as a result, we will need to generate significant revenues to
achieve or maintain profitability. We may not be able to achieve or sustain profitability on a quarterly or annual basis in the future.

Failure to maintain and enhance our brands could have a material adverse effect on our business.

We believe that our brand identity is critical to the success of our business and in helping us achieve recognition as a trusted source of
consumer health solutions. We also believe that maintaining and enhancing our brands are vital to expanding our consumer base and growing our
relationships with advertisers. We believe that the importance of brand recognition and consumer loyalty will only increase in light of increasing
competition in our markets. Some of our existing and potential
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competitors, including search engines, media companies and other online content providers, have well established brands with greater recognition
and market penetration. We have expended considerable resources on establishing and enhancing the Everyday Health brand and the other
brands in the Everyday Health portfolio. We have developed policies and procedures that are intended to preserve and enhance these brands,
including editorial procedures designed to control the quality of our content. We expect to continue to devote significant additional resources and
efforts to enhance our brands. However, we may not be able to successfully maintain or enhance awareness of our brands, and events outside of
our control may have a negative effect on our brands.

If we are unable to deliver content that attracts and retains consumers to websites in the Everyday Health portfolio, our ability to
attract advertisers will be adversely affected, which in turn will negatively impact our business.

We generate a significant percentage of our revenues from advertising fees. Our future success depends on our ability to deliver timely,
interesting, relevant and valuable content to attract and retain consumers to websites in the Everyday Health portfolio. Our ability to successfully
develop, produce and license highly-specialized consumer health content is subject to numerous uncertainties, including our ability to:


• successfully anticipate and respond to rapidly changing developments and preferences to ensure our content offerings remain appealing
to our consumers;


• attract and retain qualified editors, writers and technical personnel;


•
license quality content from third parties;


• fund new development projects to further broaden our content offerings; and


• successfully expand our content offerings and advertising-based services into new platforms and delivery mechanisms.

If the content on the Everyday Health portfolio is not perceived as sufficiently appealing or valuable to our consumers, we will be unable to
retain or grow our consumer base. If we cannot maintain and grow our consumer base, or if we experience a decline in traffic levels or the
number of page views by our consumers, our ability to retain and attract advertisers will be adversely affected. This would in turn negatively affect
our business and revenues.

Our inability to enter into new, or otherwise extend our existing, licensing arrangements for proprietary content or the decline in the
popularity of a public figure that is associated with our partners would adversely affect our ability to grow our business and revenues.

We are highly dependent on the proprietary content that we license from third parties to attract and retain consumers to the Everyday
Health portfolio. We believe that such proprietary content is an important element of our business and helps to differentiate us from our
competitors. Moreover, we have historically derived a portion of our revenues from subscriptions to certain websites in the Everyday Health
portfolio that are based on licensed proprietary content. We anticipate that a meaningful portion of our revenues in the foreseeable future will
continue to be derived from both advertising and subscription arrangements associated with these websites.

Our licensing arrangements have varying duration and renewal terms. As these arrangements expire, renewals on favorable terms may be
sought; however, third parties may outbid us for the rights to such content. In addition, owners of such content may elect to create their own
online presence in lieu of granting us a license. Furthermore, renewal costs could substantially exceed the original contract cost and reduce the
profitability of these agreements to us. Our inability to renew our existing licensing arrangements, or to otherwise enter into new licensing
arrangements, in each case on commercially favorable terms, could adversely affect the appeal of our content offerings to our consumers, which
in turn would negatively impact the traffic and page views of the Everyday Health
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portfolio and its attractiveness to our consumers, advertisers and partners. The loss of the licensing arrangements associated with
www.JillianMichaels.com or www.SouthBeachDiet.com, each of which accounted for more than 10% of our consolidated revenues for the nine
months ended September 30, 2009, may have a material adverse effect on our business and revenues. In addition, the loss of the licensing
arrangement associated with www.WhattoExpect.com may also have a material adverse effect on our business and revenues.

In addition, we rely on the popularity and credibility of public figures that are associated with certain websites in the Everyday Health
portfolio. These individuals may not retain their current appeal or may become subject to negative publicity. The popularity and credibility of the
websites associated with these public figures or content providers also depend on the quality and acceptance of competing content released into
the marketplace at or near the same time, the availability of alternative sources for the information, general economic conditions and other
tangible and intangible factors, all of which are difficult to predict. Consumer preferences change frequently and it is a challenge to anticipate what
offerings will be successful at a certain point in time. Any decline in the popularity of the content offerings, or any negative publicity, whether
individually or with respect to the content offerings associated with the websites associated with these public figures or content providers, may
have an adverse impact on our business and revenues.

Our failure to attract and retain consumers in a cost-effective manner could compromise our ability to grow our revenues and become
profitable.

Our continued success is highly dependent on our ability to attract and retain consumers in a cost-effective manner. In order to attract
consumers to the Everyday Health portfolio, we must expend considerable amounts of money and resources for online and offline advertising and
marketing. We use a diverse mix of marketing and advertising programs to promote the websites in our portfolio, and we have spent, and expect
to continue to spend, significant amounts of money on these initiatives. Significant increases in the pricing of one or more of these initiatives will
result in higher marketing costs. Our failure to attract and acquire new, and retain existing, consumers in a cost-effective manner would make it
more difficult to maintain and grow our revenues and ultimately to achieve profitability.

Our revenues are subject to fluctuations due to the timing and amount of expenditures by our advertising customers.

Advertising and sponsorship revenue comprises a significant and growing component of our revenues. Our advertising and sponsorship
revenue accounted for approximately 55.3% and 61.2% of our total revenues for the year ended December 31, 2008 and the nine months ended
September 30, 2009, respectively. Advertising spending in the markets in which we compete can fluctuate significantly as a result of a variety of
factors, many of which are outside of our control. These factors include:


• variations in expenditures by advertisers due to budgetary constraints;


• the cancellation, non-renewal or delay of campaigns;


• advertisers’ internal review process;


• the cyclical and discretionary nature of advertising spending;


• the timing of FDA approvals of prescription drugs and medical devices;


• seasonal factors relating to the prevalence of specific health conditions and other seasonal factors that affect the promotion of specific
products; and


• general economic conditions, including those specific to the Internet and media industry.
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Our advertising and sponsorship revenue is primarily derived from short-term contracts that may not be renewed.

Many of our advertising and sponsorship contracts are short-term commitments and are subject to termination by the customer at any
time. Despite the short-term nature of these commitments, we typically must expend significant resources over a lengthy sales cycle to obtain
these contracts. As of September 30, 2009, one advertising agency accounted for approximately 10% of our accounts receivable. Our current
customers may not fulfill their obligations under their existing contracts or continue to advertise with us beyond the terms of their existing
contracts. If a significant number of advertisers, or a few large advertisers, decide to reduce their expenditures with us or to discontinue
advertising with us, we could experience a material decline in our revenues.

Our quarterly operating results are subject to significant fluctuations, and these fluctuations may adversely affect the trading price of
our common stock.

We have experienced, and expect to continue to experience, significant fluctuations in our quarterly revenues and operating results. Our
quarterly revenues and operating results may fluctuate significantly due to a number of factors, many of which are outside of our control. These
factors include:


• traffic levels to the websites in our portfolio;


• our ability to introduce new and appealing content that will drive the growth of our consumer base;


• the spending priorities and advertising budget cycles of specific advertisers;


• the addition or loss of advertisers;


• the addition of new websites and services by us or our competitors;


• changes in our pricing policies or those of our competitors;


• costs relating to our ongoing efforts to improve our content and advertising-based service offerings; and


• seasonal fluctuations in advertising spending.

In addition, seasonal factors, including those relating to the prevalence of specific health conditions, can also affect our operating results.
For example, we have historically experienced an increase in new subscriptions in the first calendar quarter. This increase typically coincides with
the general trend towards making healthy lifestyle choices at the beginning of the new year.

As a result of these seasonal and quarterly fluctuations, we believe that comparisons of our quarterly results of operations are not
necessarily meaningful and that these comparisons are not reliable as indicators of our future performance. In addition, these fluctuations could
result in volatility in our operating results and may adversely affect our cash flows. As our business grows, these seasonal fluctuations may
become more pronounced. Any seasonal or quarterly fluctuations that we report in the future may differ from the expectations of securities
analysts and investors. This could cause the price of our common stock to decline.

Our inability to sustain or grow our advertising rates could adversely affect our operating results.

The rates charged for advertising on the Internet, particularly in the consumer health sector, have fluctuated over the past few years due
to a variety of factors, including the growth in use of search engines, general economic conditions and competitive offerings. We have committed
significant resources to delivering content and advertising-based services designed to appeal to our advertising customers by engaging
consumers in a more interactive and meaningful manner, therefore
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providing a higher return on our advertisers’ expenditures. However, our customers may not perceive our content offerings and advertising-based
services as sufficiently valuable to justify the payment of our rates. If we are unable to maintain our historical, or grow to anticipated, pricing levels
for advertising, we will experience difficulties in maintaining or growing our revenues.

We face significant competition in attracting both consumers and advertising customers.

In order to attract consumers to websites in our portfolio, we have to compete with a variety of sources that provide different forms of
consumer health information, including:


• websites that provide online health and/or medical information, such as www.webmd.com;


• websites that offer specific diet or fitness programs, such as www.weightwatchers.com and www.rodale.com, or that focus on a
specific medical condition, such as www.dlife.com for diabetes;


• broad-based public portals that offer health-related content, such as www.aol.com and www.yahoo.com;


• non-profit and governmental websites that provide consumer health information, such as www.fda.gov, www.cdc.gov and
www.health.nih.gov; and


• traditional offline media companies, such as magazine and book publishers, as well as distributors of television and video programming.

We believe that the depth and breadth of our content offerings and advertising-based services across the consumer health spectrum
differentiate us from our competitors. However, since there are no meaningful barriers to entry into the markets in which we participate, we
anticipate that competition for consumers will continue to intensify, particularly as our competitors broaden their product offerings. As we continue
to diversify the breadth of our content offerings and advertising-based services and expand internationally, we expect our competitors to further
expand as well. Our current and future competitors may offer new categories of content, products or services before we do, which may give them
a competitive advantage when trying to attract consumers or advertisers. Moreover, both existing and potential consumers may perceive our
competitors’ offerings to be superior to ours.

Recently, our industry has experienced consolidation which could increase competition in the future, particularly with respect to content
acquisition, exclusivity of content and pricing. To compete effectively, we may need to expend significant resources on content acquisition,
technology or marketing and advertising. We currently plan to distinguish ourselves from our competitors on the basis of the depth and breadth of
our content offerings across the health spectrum, the quality of our advertising-based services and technological leadership. These efforts may be
expensive and could reduce our margins.

We also compete for advertisers with the information sources mentioned above. Advertising customers seek to allocate expenditures in a
way that will enable them to reach the broadest audience in the most targeted and cost-efficient manner. Advertisers may choose to work with
our competitors due to a variety of factors, including:


• preference for our competitors’ online content and print offerings;


• desire to utilize other forms of advertising offered by our competitors that are not offered by us; and


• price and reach.

Many of our current and potential competitors have longer operating histories, larger customer bases, greater brand recognition and
significantly greater financial, marketing and other resources than we do. As a result, we could lose market share to our competitors, and our
revenues could decline.
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The market for Internet advertising is still developing, and if the Internet fails to gain further acceptance as a medium for advertising,
we would experience slower revenue growth or a decrease in revenue, and greater losses than expected.

Our future success depends, in part, on continued growth in the use of the Internet as an advertising and marketing platform. The Internet
advertising market is still developing, and we cannot compare this market with traditional advertising media to gauge its effectiveness. As a result,
demand for and market acceptance of Internet advertising solutions remain uncertain. Many of our current and potential customers have limited
experience with Internet advertising and have allocated only a relatively small portion of their aggregate advertising and marketing budgets to
Internet activities. The adoption of Internet advertising, particularly by entities that have historically relied on traditional methods of advertising and
marketing, requires the acceptance of new advertising and marketing methods. These customers may find Internet advertising to be less effective
for meeting their business needs than traditional advertising and marketing methods. Furthermore, there are software programs designed to limit
or prevent advertising from being delivered to a user’s computer. Widespread adoption of this software by users would significantly undermine the
commercial viability of Internet advertising.

We depend on Internet search engines to attract a significant portion of the traffic to the Everyday Health portfolio, and if we are
listed less prominently in search result listings, our business and operating results would be harmed.

We derive a significant portion of our traffic from consumers who search for consumer health information through Internet search engines,
such as those operated by Google, Microsoft and Yahoo! A critical factor in attracting consumers to our portfolio of websites is whether our
websites are prominently displayed in response to a relevant Internet search.

Search result listings are determined and displayed in accordance with a set of formulas or algorithms developed by the particular Internet
search engine. The algorithms determine the order of the results in response to the relevant Internet search. From time to time, search engines
revise these algorithms. In some instances, these modifications may cause websites within the Everyday Health portfolio to be listed less
prominently in unpaid search results, which would result in decreased traffic from search engines to our websites. One of the most cost-effective
efforts we employ to attract and acquire new, and retain existing, users is search engine optimization, or SEO. SEO involves developing websites
in a manner that will enhance the likelihood that they will rank well in search engine results. An effective SEO effort can significantly reduce our
marketing costs. Conversely, if our SEO efforts are ineffective, we could experience a substantial increase in our consumer acquisition costs and
a decrease of free traffic to the Everyday Health portfolio.

The websites in our portfolio may also become listed less prominently in unpaid search results for other reasons, such as search engine
technical difficulties, search engine technical changes and changes we make to our websites. In addition, search engines have deemed the
practices of some companies to be inconsistent with search engine guidelines and have decided not to list their websites in search result listings
at all. If listed less prominently or not at all in search result listings for any reason, the traffic to the websites in our portfolio would likely decline,
which could harm our operating results. If we decide to attempt to replace this traffic, we may be required to increase our marketing
expenditures, which could also harm our operating results. Any decrease in traffic would be costly to replace.

If we experience a decline in renewals from our premium subscription-based services, our revenues and business may decline.

Our premium services consist primarily of subscriptions sold to consumers who purchase access to one or more of the websites in our
portfolio or to a specific interactive service or application, including licensing our CarePages social media application to healthcare service
providers. We must
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continually add new subscribers and licensees, both to increase our subscriber and licensee base and to replace subscribers and licensees who
choose not to renew their subscriptions or licenses. Subscribers and licensees may choose not to renew their subscriptions or licenses for many
reasons at any time prior to the renewal date, including:


• a desire to reduce discretionary spending;


• a perception that they do not use the service sufficiently;


• a belief that the service is a poor value or that competitive services provide a better value or experience; or


• a feeling that subscriber service issues are not satisfactorily resolved.

Licensees may choose not to renew their licenses for many of the same reasons. If we are unable to attract new subscribers or licensees
to our premium services to counterbalance our non-renewal rates, our subscriber and licensee base will decrease. If our subscriber and licensee
non-renewal rate increases, we may be required to increase the rate at which we add new subscribers and licensees in order to maintain and
grow our revenues from our premium services and may have to incur significantly higher marketing and advertising expenses than we currently
anticipate.

Developing and implementing new and updated applications, features and services may be more difficult than expected, may take
longer and cost more than expected and may not result in sufficient increases in revenue to justify the costs.

Attracting and retaining consumers require us to continue to improve the technology underlying our content offerings and content-delivery
platform. Accordingly, we must continue to develop new and updated applications, features and services. If we are unable to do so on a timely
basis or if we are unable to implement new applications, features and services that enhance our consumers’ experience without disruption to our
existing ones, we may lose potential and existing consumers and advertising customers. We rely on a combination of internal development,
strategic relationships, licensing and acquisitions to develop our content offerings and advertising-based services. These efforts may:


• cost more than expected;


• take longer than originally expected;


• require more testing than originally anticipated;


• require additional advertising and marketing costs; and


• require the acquisition of additional personnel and other resources.

The revenue opportunities generated from these efforts may fail to justify the amounts spent.

Future acquisitions could disrupt our business and harm our financial condition and operating results.

We have acquired, and in the future may acquire or invest in, complementary businesses, products or technologies. Most recently, in
October 2008, we acquired Revolution Health Group LLC and its subsidiaries. Following the closing of this offering, we expect that as a result of
our access to the public markets, we will have enhanced opportunities to pursue acquisitions and investments in the future. Acquisitions and
investments involve numerous risks, including:


• potential negative impact on our financial results because they may require us to incur charges and substantial debt or liabilities, may
require us to amortize, write down or record impairment of amounts related to deferred compensation, goodwill and other intangible
assets, or may cause adverse tax consequences, substantial depreciation or deferred compensation charges;


• difficulty in assimilating the operations and personnel of acquired businesses;
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• potential disruption of our ongoing businesses and distraction of our management and the management of acquired companies;


• difficulty in incorporating acquired technology and rights into our content offerings and advertising-based services;


• difficulty entering geographic or business markets in which we have little or no prior experience;


• unanticipated expenses related to technology and other integration;


• potential failure to achieve additional sales and enhance our customer base through cross-marketing of the combined company’s
products and services to new and existing customers;


• unanticipated expenses relating to implementing or improving internal controls, procedures and policies appropriate for a public
company of a business that prior to the acquisition lacked these controls, procedures and policies;


• potential litigation resulting from our business combinations or acquisition activities; and


• potential unknown liabilities associated with the acquired businesses.

Our inability to integrate any acquired business successfully or the failure to achieve any expected synergies could result in increased
expenses and a reduction in expected revenues or revenue growth. In addition, we may not be able to identify or consummate any future
acquisition on favorable terms, or at all. If we do pursue an acquisition, it is possible that we may not realize the anticipated benefits from the
acquisition or that the financial markets or investors will negatively view the acquisition. As a result, our stock price could fluctuate or decline.

The costs associated with potential acquisitions or strategic partnerships could dilute your investment or adversely affect our results
of operations.

In order to finance acquisitions, investments or strategic partnerships, we may use equity securities, debt, cash or a combination of the
foregoing. Any issuance of equity securities or securities convertible into equity may result in substantial dilution to our existing stockholders,
reduce the market price of our common stock or both. Any debt financing is likely to increase our interest expense and include financial and other
covenants that could have an adverse impact on our business. In addition, an acquisition may involve non-recurring charges, including writedowns
of significant amounts of intangible assets or goodwill. The related increases in expenses could adversely affect our results of operations. Any
such acquisitions or strategic alliances may require us to obtain additional equity or debt financing, which may not be available on commercially
acceptable terms, if at all. We do not intend to seek security holder approval for any such acquisition or security issuance unless required by
applicable law, regulation or the terms of our existing securities.

There are a number of risks associated with expansion of our business internationally.

Expansion into international markets is one of the key elements of our growth strategy. In addition to facing many of the same challenges
we face domestically, there are additional risks and costs inherent in expanding our business in international markets. These include:


• strong local competitors that are better attuned to the local culture and preferences;


• the need to adapt our websites and advertising programs to meet local needs and to comply with local legal and regulatory
requirements;


• varied, unfamiliar and unclear legal and regulatory restrictions, as well as unforeseen changes in legal and regulatory requirements;


•
limitations on our activities in foreign countries;
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• more restrictive data protection regulation, which may vary by country;


• difficulties in staffing and managing multinational operations;


• difficulties in finding appropriate foreign licensees or joint venture partners;


• distance, language and cultural differences;


• foreign political and economic uncertainty;


•
less extensive adoption of the Internet as an information source and increased restriction on the content of websites;


• different and conflicting intellectual property laws;


• currency exchange-rate fluctuations; and


• potential adverse tax requirements.

We have limited experience in managing international operations. As a result, we may face difficulties and unforeseen expenses in
expanding our business internationally, and even if we attempt to do so, we may be unsuccessful.

Given the tenure and experience of our Chief Executive Officer and President, and their guiding roles in developing our business and
growth strategy since our inception, our growth may be inhibited, or our operations may be impaired, if we were to lose their services.

Our growth and success depends to a significant extent on our ability to retain Benjamin Wolin, our Chief Executive Officer, and Michael
Keriakos, our President, both of whom founded our company and have led the growth and operation of our business since its inception. The loss
of the services of either of these key executives could result in our inability to manage our operations effectively and to implement our business
strategy. This may cause our stock price to fluctuate or decline. Further, we cannot assure you that we would be able to successfully integrate
newly-hired executives or senior managers with our existing management team.

We may not be able to attract, hire and retain qualified personnel in a cost-effective manner, which could impact the quality of our
content offerings and advertising-based services and the effectiveness and efficiency of our management, resulting in increased costs
and losses in revenues.

Our success depends on our ability to attract, hire and retain, at commercially reasonable rates, qualified editorial and writing, sales and
marketing, customer support, technical, financial and accounting, legal and other managerial personnel. The competition for personnel in the
industries in which we operate is intense. Our personnel may terminate their employment at any time for any reason. Loss of personnel may result
in increased costs for replacement hiring and training. If we fail to attract and hire new personnel, or retain and motivate our current personnel, we
may not be able to operate our businesses effectively or efficiently, serve our consumers and customers properly or maintain the quality of our
content offerings and advertising-based services.

In particular, our success depends in significant part on maintaining and growing an effective sales force. This dependence involves a
number of challenges, including:


• the need to hire, integrate, motivate and retain additional sales and sales support personnel;


• the need to train new sales personnel, many of whom lack sales experience when they are hired; and


• competition from other companies in hiring and retaining sales personnel.
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Our growth could strain our personnel, technology and infrastructure resources. If we are unable to implement appropriate controls
and procedures to manage our growth, we may not be able to successfully implement our business plan.

Our growth in operations has placed a significant strain on our management, administrative, technological, operational and financial
infrastructure. Anticipated future growth, including growth related to the broadening of our content offerings and advertising-based services and
our expansion into new geographic areas, will continue to place similar strains on our personnel, technology and infrastructure. Our success will
depend in part upon our ability to manage our growth. To manage the expected growth of our operations, we will need to continue to improve our
operational, financial, technological and management controls and our reporting systems and procedures. The resulting additional capital
investments will increase our costs, which will make it more difficult for us to offset any future revenue shortfalls by offsetting cost reductions in
the short term.

As a creator and a distributor of content over the Internet, we face potential liability for legal claims based on the nature and content
of the materials that we create or distribute.

Consumers access health-related content through our portfolio of websites, including information regarding particular medical conditions,
diagnosis and treatment and possible adverse reactions or side effects from medications. If our content, or content we obtain from third parties,
contains inaccuracies, it is possible that consumers who rely on that content or others may sue us for various causes of action. Although the
websites in our portfolio contain terms and conditions, including disclaimers of liability, that are intended to reduce or eliminate our liability, the law
governing the validity and enforceability of online agreements is still evolving. Moreover, many of these terms and conditions relate to websites
that are operated by our partners and are not under our control. We could be subject to claims by third parties that these online agreements are
unenforceable. A finding by a court that these agreements are invalid and that we are subject to liability could harm our business and require us to
make costly changes.

We have editorial procedures in place to control the quality of our content offerings. However, our editorial and other quality control
procedures may not be sufficient to ensure that there are no errors or omissions in our content offerings or to prevent such errors and omissions
in content that is controlled by our partners. Even if potential claims do not result in liability to us, investigating and defending against these claims
could be expensive and time consuming and could divert management’s attention away from our operations.

In addition, we could be exposed to liability in connection with material posted to the websites in our portfolio by our consumers. Many of
these websites offer consumers an opportunity to post comments and opinions. Some of this user-generated content may infringe on third-party
intellectual property rights or privacy rights or may otherwise be subject to challenge under copyright laws. Moreover, we could face claims for
making such user-generated content available on the websites in our portfolio if consumers rely on such information to their detriment, particularly
if the information relates to medical diagnosis and treatment. Such claims could divert management’s time and attention away from our business
and result in significant costs to us, regardless of the merit of these claims.

If we become subject to these types of claims and are not successful in our defense, we may be forced to pay substantial damages. Our
insurance may not adequately protect us against these claims. The filing of these claims may result in negative publicity and also damage our
reputation as a high quality and trusted provider of consumer health content and services.

The effects of the recent global economic crisis may impact our business, operating results or financial condition.

The recent global economic crisis has caused disruptions and extreme volatility in global financial markets and increased rates of default
and bankruptcy, and has impacted levels of consumer spending. These macroeconomic developments have negatively affected, and may continue
to affect,
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our business, operating results or financial condition in a number of ways. For example, current or potential customers may delay or decrease
spending with us, may have difficulty paying us or may delay paying us for previously purchased products and services. This may also require us
to increase our bad debt reserve and may affect how we recognize accounts receivables. In addition, if consumer spending continues to
decrease, this may result in lower click through rates on advertisements displayed on our portfolio of websites. A slow or uneven pace of
economic recovery would negatively impact our business and operating results.

Risks Related to Our Intellectual Property and Technology Platform

If our intellectual property and technologies are not adequately protected to prevent use or misappropriation by our competitors, the
value of our brand and other intangible assets may be diminished, and our business may be adversely affected.

Our future success and competitive position depend in part on our ability to protect our proprietary technologies and intellectual property.
We rely, and expect to continue to rely, on a combination of confidentiality and licensing agreements with our employees, consultants and third
parties with whom we have relationships, along with trademark, copyright, patent and trade secret protection laws, to protect our proprietary
technologies and intellectual property. Many of our trademarks contain words or terms having a common usage and, as a result, may not be
protectable under applicable law. Competitors may adopt service marks or trademarks similar to ours or use identical or similar terms as
keywords in Internet search engine advertising programs, thereby impeding our ability to build brand identity and possibly leading to confusion by
our consumers and customers. We also possess intellectual property rights in aspects of our content, search technology, software products and
other processes. However, we do not register our copyrights in any of our content. Rather, this content is primarily protected by user agreements
that limit access to and use of our content. Compliance with use restrictions is difficult to monitor, and our proprietary rights may be more difficult
to enforce than other forms of intellectual property rights.

Although we rely on copyright laws to protect the works of authorship created by us, we do not register the copyrights in any of our
copyrightable works. Copyrights of U.S. origin must be registered before the copyright owner may bring an infringement suit in the
U.S. Furthermore, if a copyright of U.S. origin is not registered within three months of publication of the underlying work, the copyright owner is
precluded from seeking statutory damages or attorneys fees in any U.S. enforcement action, and is limited to seeking actual damages and lost
profits. Accordingly, if one of our unregistered copyrights of U.S. origin is infringed by a third party, we will need to register the copyright before
we can file an infringement suit in the U.S., and our remedies in any such infringement suit may be limited.

We cannot assure you that the steps we take will be adequate to protect our technologies and intellectual property, that our patent and
trademark applications will lead to issued patents and registered trademarks, that others will not develop or patent similar or superior
technologies, products or services, or that our patents, trademarks and other intellectual property will not be challenged, invalidated or
circumvented by others. Furthermore, the intellectual property laws of other countries where our websites are directed or can be accessed may
not protect our products and intellectual property rights to the same extent as the laws of the U.S. The legal standards relating to the validity,
enforceability and scope of protection of intellectual property rights in Internet-related industries are uncertain and still evolving, both in the
U.S. and in other countries. If the protection of our technologies and intellectual property is inadequate to prevent use or appropriation by third
parties, the value of our brand and other intangible assets may diminish.

In addition, third parties may knowingly or unknowingly infringe our patents, trademarks and other intellectual property rights, and litigation
may be necessary to protect and enforce our intellectual property rights. Any such litigation could be costly and divert management’s attention and
resources away from our business. We also expect that the more successful we are, the more likely that competitors will
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claim that we infringe on their intellectual property or proprietary rights. Even if these claims do not result in liability to us, we could incur significant
costs in investigating and defending against these claims. If we are unable to protect our proprietary rights or if third parties independently
develop or gain access to our or similar technologies, our business, revenue, reputation and competitive position could be harmed.

Confidentiality agreements with employees and others may not adequately prevent disclosure of trade secrets and other proprietary
information. Failure to protect our proprietary information could make it easier for third parties to compete with our products and
harm our business.

In order to protect our proprietary rights, we rely in part on security measures, as well as confidentiality agreements with our employees,
licensees, independent contractors and other advisors. These measures and agreements may not effectively prevent disclosure of confidential
information, including trade secrets, and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information.
We could potentially lose future trade secret protection if any unauthorized disclosure of such information occurs. In addition, others may
independently discover our trade secrets and proprietary information. In such cases we could not assert any trade secret rights against such
parties. Laws regarding trade secret rights in certain markets in which we operate may afford little or no protection to our trade secrets. The loss
of trade secret protection could make it easier for third parties to compete with our products by copying functionality. In addition, any changes in,
or unexpected interpretations of, the trade secret and other intellectual property laws in any country in which we operate may compromise our
ability to enforce our trade secret and intellectual property rights. Costly and time-consuming litigation could be necessary to enforce and
determine the scope of our proprietary rights. Failure to obtain or maintain trade secret protection could adversely affect our business, revenue,
reputation and competitive position.

Intellectual property claims against us could be costly and result in the loss of significant rights related to, among other things, our
websites and advertising and marketing activities.

Trademark, copyright, patent and other intellectual property rights are important to us and our business. Our intellectual property rights
extend to our technologies, applications and the content on our websites. We rely on intellectual property licensed from third parties. From time to
time, third parties may allege that we have violated their intellectual property rights. If we are forced to defend ourselves against intellectual
property infringement claims, regardless of the merit or ultimate result of such claims, we may face costly litigation, diversion of technical and
management personnel, limitations on our ability to use our current websites or inability to market or provide our content offerings or
advertising-based services. As a result of any such dispute, we may have to:


• develop non-infringing technology;


• pay damages;


• enter into royalty or licensing agreements;


• cease providing certain content or advertising-based services; or


• take other actions to resolve the claims.

These actions, if required, may be costly or unavailable on terms acceptable to us. In addition, many of our partnering agreements require
us to indemnify our partners for third-party intellectual property infringement claims, which could increase the cost to us of an adverse ruling in
such an action.

In addition, we face potential liability for negligence, copyright, patent or trademark infringement or other claims based on the nature of our
content. These claims could potentially arise with respect to both company-acquired content and user-generated content. Litigation to defend
these claims could be costly, and any other liabilities we incur in connection with the claims could be significant.
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Our possession and use of personal information presents risks and expenses that could harm our business. Unauthorized disclosure
or manipulation of such data, whether through breach of our network security or otherwise, could expose us to costly litigation and
damage our reputation.

Maintaining our network security is of critical importance because we use and store confidential registered user, employee and other
sensitive data, such as names, addresses, credit card numbers and other personal information, including information about a consumer’s health
interests. In particular, a substantial majority of our consumers who subscribe to a premium service use credit and debit cards to pay for those
subscriptions. If we or our processing vendors were to have problems with our billing software, our consumers could encounter difficulties in
accessing websites within our portfolio or otherwise have a dissatisfying experience. In addition, if our billing software fails to work properly and,
as a result, we do not automatically charge our consumers’ credit cards on a timely basis or at all, our ability to generate revenue would be
compromised.

We and our vendors use commercially available encryption technology to transmit personal information. We also use security and business
controls to limit access and use of personal information. Third parties may be able to circumvent these security and business measures by
developing and deploying viruses, worms and other malicious software programs that are designed to attack or infiltrate our systems and
networks. In addition, employee error, malfeasance or other errors in the storage, use or transmission of personal information could result in a
breach of registered user or employee privacy.

If third parties improperly obtain and use the personal information of our registered users or employees, we may be required to expend
significant resources to resolve these problems. A major breach of our network security and systems could have serious negative consequences
for our businesses, including:


• possible fines, penalties and damages;


• reduced demand for our content offerings and advertising-based services;


• an unwillingness of consumers to provide us with their credit card or payment information;


• an unwillingness of registered users to provide us with personal information;


• harm to our reputation and brand; and


• difficulty in processing subscriber credit card orders.

Similarly, if a well-publicized breach of data security at any other major consumer website were to occur, there could be a general public
loss of confidence in the use of the Internet for commercial transactions.

Finally, privacy concerns in general may cause visitors to avoid online websites that collect information and may indirectly inhibit market
acceptance of our products and services. In addition, if our privacy practices are deemed unacceptable by watchdog groups or privacy
advocates, such groups may attempt to block access to our websites or disparage our reputation and business.

We rely on Internet bandwidth and data center providers and other third parties for key aspects of the process of providing services to
our clients, and any failure or interruption in the services and products provided by these third parties could harm our business.

We rely on third-party vendors, including data center and Internet bandwidth providers. Any disruption in the network access or co-location
services provided by these third-party providers or any failure of these third-party providers to handle current or higher volumes of use could
significantly harm our business. Any financial or other difficulties our providers face may have negative effects on our business, the nature and
extent of which we cannot predict. We exercise little control over these third-party vendors, which increases our vulnerability to problems with the
services they provide. We
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