SCHEDULE 13G/A: Schoenberg Brothers Maintain Significant Control Over American Well Corp Through Dual-Class Shares and Voting Pact

An amended Schedule 13G filing reveals that co-founders Ido and Roy Schoenberg collectively control 51% of American Well Corp's voting power through a voting agreement and super-voting Class B shares, following a 1-for-20 reverse stock split.

Summary

• Dr. Ido Schoenberg beneficially owns 831,642 shares of American Well Corp, representing 5.7% of the Class A Common Stock.
• Dr. Roy Schoenberg beneficially owns 892,499 shares of American Well Corp, representing 6.1% of the Class A Common Stock.
• The reported share amounts have been adjusted to reflect a 1-for-20 reverse stock split effected by American Well Corp on July 10, 2024.
• The beneficial ownership for both individuals includes Class A Common Stock, Class B Common Stock, restricted stock units (RSUs) vesting within 60 days, and exercisable options.
• Each share of Class B Common Stock is convertible into one share of Class A Common Stock at the holder's option.
• Dr. Ido Schoenberg and Dr. Roy Schoenberg are parties to a voting agreement, agreeing to vote their shares together as a group.
• Due to this voting agreement, they are deemed to beneficially own each other's stock with shared voting power, totaling 178,135 shares of Class A Common Stock and 1,546,006 shares of Class B Common Stock.
• Class B Common Stock collectively holds 51% of the total outstanding voting power of the Issuer, with each Dr. Schoenberg owning 25.5% individually, and 51% collectively through their voting agreement.

Sentiment

Score: 4

Explanation: The sentiment is slightly negative due to the reverse stock split, which often signals underlying issues, and the concentrated voting power, which can be a governance concern for minority shareholders. However, the founders' continued significant stake could be seen as a positive for long-term commitment.

Positives

• The co-founders, Dr. Ido Schoenberg and Dr. Roy Schoenberg, maintain a significant ownership stake and collective voting control (51%) in American Well Corp, which could indicate strong long-term commitment and alignment with the company's strategic direction.
• The continued involvement and substantial control by the founders may provide stability and consistent leadership for the company.

Negatives

• The company effected a 1-for-20 reverse stock split on July 10, 2024, which is often a measure taken by companies to increase their share price to meet listing requirements or improve market perception, potentially signaling underlying challenges.
• The dual-class share structure, where Class B Common Stock holds super-voting rights (51% of total voting power collectively for the Schoenbergs), concentrates control and may limit the influence of Class A shareholders on corporate decisions.

Risks

• Concentrated voting power: The voting agreement between Dr. Ido Schoenberg and Dr. Roy Schoenberg, combined with the super-voting rights of Class B Common Stock, gives them collective control of 51% of the total outstanding voting power, potentially allowing them to control outcomes of shareholder votes and corporate governance matters.
• Potential for conflicts of interest: With such concentrated control, decisions made by the controlling shareholders may not always align with the interests of all minority shareholders.
• Market perception of reverse stock split: A reverse stock split can sometimes be perceived negatively by the market, suggesting financial distress or an attempt to artificially inflate share price.

Future Outlook

The document does not contain any forward-looking statements or guidance regarding the company's future financial performance or strategic outlook.

Management Comments

• Dr. Ido Schoenberg and Dr. Roy Schoenberg have entered into a voting agreement to vote their shares together as a group, indicating a unified approach to their collective control over the company.

Industry Context

This filing is a routine ownership disclosure and does not provide specific industry context beyond the company's name, American Well Corp, which operates in the telehealth and digital healthcare sector. The reverse stock split, while not unique to this industry, can sometimes be a sign of challenges faced by growth companies in competitive or evolving markets.

Corporate Governance

Stakeholder Impact

• Shareholders: Minority shareholders, particularly those holding Class A Common Stock, may experience reduced influence over corporate governance and strategic decisions due to the concentrated voting power held by the Schoenberg brothers through their Class B shares and voting agreement.
• Management: The strong control by the co-founders ensures stability in leadership and strategic direction, potentially reducing external pressures on management.

Key Dates

Keywords

American Well Corporation, AMWL, Schedule 13G/A, beneficial ownership, reverse stock split, corporate governance, voting rights, dual-class shares, insider ownership, SEC filing