10-K/A: American Well Corporation Files Amended 10-K, Corrects Auditor Signing Date

American Well Corporation filed an amendment to its annual report to correct a typographical error in the signing date of the independent auditor's report.

Summary

• American Well Corporation filed an amendment to its original 10-K report to correct the signing date of the independent auditor's report by PricewaterhouseCoopers LLP.
• The amendment includes the corrected Item 8 (Financial Statements and Supplementary Data) and Item 9A (Controls and Procedures) from the original filing.
• The company's management has concluded that their disclosure controls and procedures were effective as of December 31, 2023.
• Management also concluded that the company's internal control over financial reporting was effective as of December 31, 2023.
• There were no material changes in internal control over financial reporting during the quarter ended December 31, 2023.
• The company's financial statements for the years ended December 31, 2023, 2022 and 2021 are included in the report.
• The company's total revenue for 2023 was $259.047 million, a decrease from $277.190 million in 2022.
• The company reported a net loss of $679.171 million for 2023, compared to a net loss of $272.072 million in 2022.
• The company's cash and cash equivalents decreased from $538.546 million in 2022 to $372.038 million in 2023.
• The company recorded a goodwill impairment of $436.479 million in 2023.

Sentiment

Score: 3

Explanation: The document reveals a significant increase in net loss and a substantial goodwill impairment, indicating a negative financial performance. While the company asserts effective controls, the overall financial picture is concerning.

Positives

• The company's management has certified the effectiveness of disclosure controls and internal controls over financial reporting.
• The company has provided detailed financial statements for the past three years.
• The company has a defined contribution savings plan for employees.

Negatives

• The company experienced a significant increase in net loss from $272.072 million in 2022 to $679.171 million in 2023.
• The company's revenue decreased from $277.190 million in 2022 to $259.047 million in 2023.
• The company's cash and cash equivalents decreased from $538.546 million in 2022 to $372.038 million in 2023.
• A substantial goodwill impairment of $436.479 million was recorded in 2023.

Risks

• The company has incurred recurring losses and expects to continue to generate operating losses for the foreseeable future.
• The company is subject to risks common to the high technology industry, including technological innovations and market acceptance of digital care.
• The company's ability to utilize net operating loss carryforwards and research and development credit carryforwards may be limited due to ownership changes.
• The company's financial performance is subject to the uncertainty of the global economy and financial markets.

Future Outlook

The company expects that its cash, cash equivalents and investments will be sufficient to fund its operating expenses and capital expenditure requirements for at least the next twelve months. The company expects to continue to generate operating losses for the foreseeable future.

Management Comments

• Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2023.
• Management also concluded that the company's internal control over financial reporting was effective as of December 31, 2023.

Industry Context

The company operates in the telehealth industry, which is subject to rapid technological advancements and changing market dynamics. The company's performance is influenced by the adoption of digital care solutions and competition within the industry.

Comparison to Industry Standards

• The company's significant net loss and goodwill impairment in 2023 are concerning when compared to industry leaders in the telehealth space, such as Teladoc Health, which while also experiencing losses, have not reported impairments of this magnitude.
• The decrease in revenue and cash position also indicates a potential struggle to maintain growth and profitability compared to other companies in the digital health sector.
• The company's reliance on platform subscriptions and visits for revenue is similar to other telehealth providers, but the decline in these areas suggests a need for strategic adjustments to remain competitive.

Related Party Transactions

• The company has related-party transactions with Cleveland Clinic and CCAW, JV LLC.
• The company recognized revenue from contracts with Cleveland Clinic and CCAW, JV LLC.
• The company has deferred revenue and amounts due from Cleveland Clinic and CCAW, JV LLC.

Stakeholder Impact

• Shareholders are negatively impacted by the significant net loss and goodwill impairment.
• Employees may be concerned about the company's financial performance and future stability.
• Customers may be affected by any potential changes in the company's services or operations.
• Creditors may be concerned about the company's ability to meet its financial obligations.

Next Steps

• The company intends to file a definitive proxy statement relating to the 2024 Annual Meeting of Stockholders within 120 days of the end of the fiscal year.

Key Dates

Keywords

financial statements, internal control, disclosure controls, goodwill impairment, net loss, revenue, auditor report, 10-K/A, American Well, telehealth