EX-99.1 3 amwl-ex99_1.htm EX-99.1 EX-99.1

Exhibit 99.1

AMERICAN WELL CORPORATION

UNAUDITED PRO FORMA FINANCIAL INFORMATION

(In thousands, except share and per share amounts)

 

On January 8, 2025, American Well Corporation (“Amwell” or the “Company”) completed the sale of all property and assets of its wholly owned subsidiary, Aligned TeleHealth, LLC, for an upfront cash consideration of $20,714,459 and additional consideration equal to 0.4x Avel eCare, LLC (the “Buyer”) and its affiliates’ aggregate revenues arising from the provision of telepsychiatry services to hospitals and correctional programs to current customers and potential customers in the sales pipeline of Aligned TeleHealth, LLC and Asana Integrated Medical Group (collectively, the “Business” or “APC business”) during the twelve-month period immediately following the closing, excluding revenues arising from the provision of on-site psychiatric services to certain of the Business’ contracts and other specified revenues (“Additional Payment”). Under generally accepted accounting principles, this Additional Payment is considered seller contingent consideration. The Company has made an accounting policy election to account for the seller contingent consideration when realizable. In connection with the sale, the Buyer assumed specified contracts and the related accounts receivable and all accounts payable and accrued expenses of the Business.

 

The unaudited pro forma consolidated financial information has been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses”. The following unaudited pro forma condensed consolidated financial information consist of an unaudited pro forma condensed consolidated balance sheet as of September 30, 2024 and unaudited pro forma condensed consolidated statements of operations and comprehensive loss for the year ended December 31, 2023 and for the nine months ended September 30, 2024. The unaudited pro forma condensed consolidated balance sheet assumes that the sale had occurred on September 30, 2024, and the unaudited pro forma condensed consolidated statements of operations and comprehensive loss assume that the sale had occurred on January 1, 2023.

 

The transaction accounting adjustments for the sale consist of those necessary to account for the sale. The unaudited pro forma condensed consolidated financial information do not include any management’s adjustments that include forward-looking information.

 

The unaudited pro forma condensed consolidated financial information have been prepared based upon available information and management estimates and are subject to assumptions and adjustments described below and in the accompanying notes to those financial statements. The unaudited pro forma condensed consolidated financial information are not intended to represent or be indicative of the financial condition or results of operations that might have occurred had the sale occurred as of the dates stated above, and further should not be taken as representative of future financial condition or results of operations of the remaining business. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors. Management believes these assumptions and adjustments are reasonable under the circumstances, given the information available at the filing date.

 

The unaudited pro forma condensed consolidated financial information and the accompanying notes should be read in conjunction with:

 

–

the audited consolidated financial statements and accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Amwell’s Form 10-K for the fiscal year ended December 31, 2023 and

 

–

the unaudited condensed consolidated financial statements and accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Amwell’s Form 10-Q for the quarter ended September 30, 2024.

 

The historical column in the unaudited pro forma condensed consolidated financial statements reflects Amwell’s historical financial statements for the periods presented and does not reflect any adjustments related to the sale.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AMERICAN WELL CORPORATION

PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

(In thousands, except share and per share amounts)

 

 

 

 

As of September 30, 2024

 

 

 

Historical

American Well Corporation

(A)

 

 

Transaction Accounting

Adjustments

(B)

 

 

 

Notes

Pro forma

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

244,647

 

 

$20,075

(1)

$

264,722

 

Accounts receivable ($749 from related parties and net of
   allowances of $1,056)

 

 

89,264

 

 

                    (7,331)

 

(2)

 

81,933

 

Inventories

 

 

4,761

 

 

-

 

 

4,761

 

Deferred contract acquisition costs

 

 

2,391

 

 

-

 

 

2,391

 

Prepaid expenses and other current assets

 

 

15,814

 

 

-

 

 

15,814

 

Total current assets

 

 

356,877

 

 

12,744

 

 

369,621

 

Restricted cash

 

 

795

 

 

-

 

 

795

 

Property and equipment, net

 

 

424

 

 

-

 

 

424

 

Goodwill

 

 

—

 

 

-

 

 

-

 

Intangibles assets, net

 

 

108,875

 

 

(4,215)

(3)

 

104,660

 

Operating lease right-of-use asset

 

 

8,012

 

 

-

 

 

8,012

 

Deferred contract acquisition costs, net of current portion

 

 

5,198

 

 

-

 

 

5,198

 

Other assets

 

 

2,312

 

 

-

 

 

2,312

 

Investment in minority owned joint venture

 

 

493

 

 

-

 

 

493

 

Total assets

 

$

482,986

 

 

$8,529

 

$

491,515

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

8,150

 

 

$(56)

(4)

$

8,094

 

Accrued expenses and other current liabilities

 

 

47,908

 

 

(1,537)

(5)

 

46,371

 

Operating lease liability, current

 

 

3,658

 

 

-

 

 

3,658

 

Deferred revenue ($61 from related parties)

 

 

62,457

 

 

-

 

 

62,457

 

Total current liabilities

 

 

122,173

 

 

(1,593)

 

 

120,580

 

Other long-term liabilities

 

 

1,500

 

 

-

 

 

1,500

 

Operating lease liability, net of current portion

 

 

5,440

 

 

-

 

 

5,440

 

Deferred revenue, net of current portion

 

 

3,823

 

 

-

 

 

3,823

 

Total liabilities

 

 

132,936

 

 

(1,593)

 

 

131,343

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Preferred stock, $0.01 par value; 100,000,000 shares authorized, no

   shares issued or outstanding as of December 31, 2023 and as of

   December 31, 2022

 

 

—

 

 

                                      -

 

 

—

 

Common stock, $0.01 par value; 1,000,000,000 Class A shares

   authorized, 255,542,545 and 244,193,727 shares issued and

   outstanding, respectively; 100,000,000 Class B shares
   authorized, 27,390,397 shares issued and outstanding,

   respectively; 200,000,000 Class C shares authorized 5,555,555

   issued and outstanding as of December 31, 2023 and as of

   December 31, 2022

 

 

153

 

 

 

 

 

153

 

Additional paid-in capital

 

 

2,275,543

 

 

-

 

 

2,275,543

 

Accumulated other comprehensive income (loss)

 

 

(15,765

)

 

-

 

 

(15,765

)

Accumulated deficit

 

 

(1,923,268

)

 

10,122

(10) (13)

 

(1,913,146

)

Total American Well Corporation stockholders’ equity

 

 

336,663

 

 

10,122

 

 

346,785

 

Non-controlling interest

 

 

13,387

 

 

-

 

 

13,387

 

Total stockholders’ equity

 

 

350,050

 

 

10,122

 

 

360,172

 

Total liabilities and stockholders’ equity

 

$

482,986

 

 

$8,529

 

$

491,515

 

 

 

 

 

AMERICAN WELL CORPORATION

PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except share and per share amounts)

 

 

 

Year Ended December 31, 2023

 

 

 

Historical

American Well Corporation

(A)

 

 

Transaction

Accounting

Adjustments

(B)

 

Notes

Pro forma

 

Revenue

 

 

 

 

 

 

 

 

 

($3,859 from related parties)

 

$

259,047

 

 

$

(23,968)

(6)

 

$

235,079

 

Costs and operating expenses:

 

 

 

 

 

 

 

 

 

Costs of revenue, excluding depreciation and amortization

   of intangible assets

 

 

164,287

 

 

 

(23,694)

(7)

 

 

140,593

 

Research and development

 

 

105,827

 

 

 

-

 

 

 

105,827

 

Sales and marketing

 

 

86,460

 

 

 

-

 

 

 

86,460

 

General and administrative

 

 

126,645

 

 

 

(345)

(8)

 

 

125,929

 

 

 

 

 

 

 

 

(371)

(13)

 

 

 

 

Depreciation and amortization expense

 

 

31,492

 

 

 

(1,965)

(9)

 

 

29,527

 

Goodwill impairment

 

 

436,479

 

 

 

—

 

 

 

436,479

 

Total costs and operating expenses

 

 

951,190

 

 

 

(26,375)

 

 

 

924,815

 

(Loss) Income from operations

 

 

(692,143

)

 

 

2,407

 

 

 

(689,736

)

Interest income and other income (expense), net

 

 

19,422

 

 

 

 

 

 

 

19,422

 

Gain on sale

 

 

-

 

 

 

10,447

(10)

 

 

10,447

 

(Loss) Income before benefit (expense) from income taxes and loss from equity method investment

 

 

(672,721

)

 

 

12,854

 

 

 

(659,867

)

(Expense) benefit from income taxes

 

 

(3,860

)

 

 

-

(11)

 

 

(3,860

)

Loss from equity method investment

 

 

(2,590

)

 

 

-

 

 

 

(2,590

)

Net (loss) income

 

 

(679,171

)

 

 

12,854

 

 

 

(666,317

)

Net loss attributable to non-controlling interest

 

 

(4,007

)

 

 

-

 

 

 

(4,007

)

Net (loss) income attributable to American Well Corporation

 

$

(675,164

)

 

$

12,854

 

 

$

(662,310

)

Net (loss) income per share attributable to common

   stockholders, basic and diluted

 

$

(2.38

)

 

$

0.05

(12)

 

$

(2.33

)

Weighted-average common shares outstanding, basic and

   diluted

 

 

284,256,743

 

 

 

284,256,743

 

 

 

284,256,743

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AMERICAN WELL CORPORATION

PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except share and per share amounts)

 

 

 

Nine Months Ended September 30, 2024

 

 

 

Historical

American Well Corporation

(A)

 

 

Transaction

Accounting

Adjustments

(B)

 

Notes

Pro forma

 

Revenue

 

 

 

 

 

 

 

 

 

($2,442 from related parties)

 

$

183,358

 

 

$

(17,958)

(6)

 

$

165,400

 

Costs and operating expenses:

 

 

 

 

 

 

 

 

 

Costs of revenue, excluding depreciation and amortization

   of intangible assets

 

 

118,799

 

 

 

(17,716)

(7)

 

 

101,083

 

Research and development

 

 

67,283

 

 

 

-

 

 

 

67,283

 

Sales and marketing

 

 

60,883

 

 

 

-

 

 

 

60,883

 

General and administrative

 

 

86,404

 

 

 

(259)

(8)

 

 

86,145

 

Depreciation and amortization expense

 

 

24,767

 

 

 

(1,459)

(9)

 

 

23,308

 

Goodwill impairment

 

 

-

 

 

 

—

 

 

 

-

 

Total costs and operating expenses

 

 

358,136

 

 

 

(19,434)

 

 

 

338,702

 

(Loss) income from operations

 

 

(174,778

)

 

 

1,476

 

 

 

(173,302

)

Interest income and other income (expense), net

 

 

10,334

 

 

 

-

 

 

 

10,334

 

(Loss) income before benefit (expense) from income taxes and loss from equity method investment

 

 

(164,444

)

 

 

1,476

 

 

 

(162,968

)

(Expense) benefit from income taxes

 

 

(1,223

)

 

 

-

(11)

 

 

(1,223

)

Loss from equity method investment

 

 

(2,402

)

 

 

-

 

 

 

(2,402

)

Net (loss) income

 

 

(168,069

)

 

 

1,476

 

 

 

(166,593

)

Net loss attributable to non-controlling interest

 

 

(2,580

)

 

 

-

 

 

 

(2,580

)

Net (loss) income attributable to American Well Corporation

 

$

(165,489

)

 

$

1,476

 

 

$

(164,013

)

Net (loss) income per share attributable to common

   stockholders, basic and diluted

 

$

(11.13

)

 

$

0.10

(12)

 

$

(11.03

)

Weighted-average common shares outstanding, basic and

   diluted

 

 

14,864,967

 

 

 

14,864,967

 

 

 

14,864,967

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes to Unaudited Pro Forma Condensed Consolidated Financial Information

 

A) Derived from the consolidated balance sheet as of September 30, 2024, and consolidated statement of operations for the year ended December 31, 2023 and the nine months ended September 30, 2024, reported in our Form 10-K filed on March 1, 2024 and Form 10-Q filed on October 30, 2024.

 

B) Reflects the sale of the assets and liabilities of the APC business pursuant to the asset purchase agreement.

 

Transaction Accounting Adjustments:

 

1)
To record the estimated upfront cash consideration expected to be received in connection with the sale of the APC business, subject to certain adjustments for the working capital of the APC business and net of estimated transaction expenses of $371 and preliminary working capital adjustment of $268. The Company has made an accounting policy election to account for the Additional Payment, which under generally accepted accounting principles was determined to be contingent consideration, when realizable.
2)
Reflects the removal of all trade accounts receivable related to the APC business, which were assumed by the Buyer.
3)
Reflects the removal of the intangible assets (customer relationships) associated with the APC business.
4)
Reflects the removal of all accounts payable associated with the APC business, which were assumed by the Buyer.
5)
Reflects the removal of all accrued expenses (payroll and payroll related) associated with the APC business, as this is a liability being assumed by the Buyer.
6)
Reflects the elimination of visit revenue related to the APC business. Visit fees are recognized when the visits are completed, and the Company has delivered on its stand-ready obligation to provide access to the medical professional.
7)
Reflects the elimination of the costs associated with contracted medical providers directly related to the performance of patient visits associated with the APC business.
8)
Reflects the elimination of the costs associated with support personnel providing administrative support to the APC business.
9)
Reflects the elimination of the amortization associated with intangible assets that were part of the APC business.
10)
Reflects the estimated gain on sale of the APC business. The sale of the APC business was determined to be a business, and the Company has made an accounting policy election to reflect this gain in other income.
11)
The Company’s tax expense historically has resulted primarily from its international operations. The Company’s US operations (including the APC business) has a history of generating net operating losses and maintains a full valuation allowance against its net deferred tax assets. Accordingly, no income taxes will be recognized as a result of this sale, as the gain will be offset by existing net operating losses.
12)
Reflects the impact to the Company’s earnings per share as a result of the sale of the APC business.
13)
Reflects the estimated transaction costs of $371 incurred after September 30, 2024 in connection with the sale of the APC business.