Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☒ No ☐☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒☒

As of July 31, ~~2021,~~2022, the number of shares of the registrant’s Class A common stock outstanding was ~~210,681,731,~~240,621,761, the number of shares of the registrant’s Class B common stock outstanding was ~~26,650,761~~27,390,397 and the number of shares of the registrant’s Class C common stock outstanding was ~~5,555,555.~~5,555,555.

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


	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020			2022			2021			2022			2021
Revenue
($1,462, $15,912, $3,089 and $29,160 from related parties, respectively)	$	60,217		$	68,568		$	117,816		$	122,282
( $1,163, $1,462, $2,377 and $3,089 from related parties, respectively)													$	64,516		$	60,217		$	128,748		$	117,816
Costs and operating expenses:
Costs of revenue, excluding depreciation and amortization of intangible assets		33,889			43,826			69,594			76,853			36,497			33,889		$	73,262		$	69,594
Research and development		22,378			17,637			45,418			32,573			37,067			22,378		$	74,548		$	45,418
Sales and marketing		14,789			12,346			28,521			26,220			18,721			14,789		$	39,875		$	28,521
General and administrative		24,212			80,082			45,566			95,424			34,911			24,212		$	67,627		$	45,566
Depreciation and amortization expense		2,484			2,509			4,990			4,795			6,724			2,484		$	13,322		$	4,990
Total costs and operating expenses		97,752			156,400			194,089			235,865			133,920			97,752			268,634			194,089
Loss from operations		(37,535	)		(87,832	)		(76,273	)		(113,583	)		(69,404	)		(37,535	)		(139,886	)		(76,273	)
Interest income and other income (expense), net		224			308			285			1,155
Interest income and other (expense) income, net														764			224		$	872		$	285
Loss before expense from income taxes and loss from equity method investment		(37,311	)		(87,524	)		(75,988	)		(112,428	)		(68,640	)		(37,311	)		(139,014	)		(75,988	)
Expense from income taxes		(103	)		(252	)		(412	)		(252	)
Benefit (Expense) from income taxes														(461	)		(103	)	$	(129	)	$	(412	)
Loss from equity method investment		(722	)		(444	)		(1,541	)		(764	)		(551	)		(722	)	$	(762	)	$	(1,541	)
Net loss		(38,136	)		(88,220	)		(77,941	)		(113,444	)		(69,652	)		(38,136	)		(139,905	)		(77,941	)
Net loss attributable to non-controlling interest		(277	)		(1,562	)		(894	)		(2,405	)		(507	)		(277	)	$	(723	)	$	(894	)
Net loss attributable to American Well Corporation	$	(37,859	)	$	(86,658	)	$	(77,047	)	$	(111,039	)	$	(69,145	)	$	(37,859	)	$	(139,182	)	$	(77,047	)
Net loss per share attributable to common stockholders, basic and diluted	$	(0.15	)	$	(1.99	)	$	(0.31	)	$	(2.66	)	$	(0.25	)	$	(0.15	)	$	(0.51	)	$	(0.31	)
Weighted-average common shares outstanding, basic and diluted		249,366,652			43,484,313			246,471,733			41,793,108			273,320,740			249,366,652			273,615,031			246,471,733
Net loss	$	(38,136	)	$	(88,220	)	$	(77,941	)	$	(113,444	)	$	(69,652	)	$	(38,136	)	$	(139,905	)	$	(77,941	)
Other comprehensive income (loss), net of tax:
Unrealized gain on available-for-sale investments		(119	)		(323	)		(85	)		(280	)
Unrealized (loss) gain on available-for-sale investments														(111	)		(119	)		(1,362	)		(85	)
Foreign currency translation		(20	)		349			(72	)		178			(10,179	)		(20	)		(13,130	)		(72	)
Comprehensive loss		(38,275	)		(88,194	)		(78,098	)		(113,546	)		(79,942	)		(38,275	)		(154,397	)		(78,098	)
Less: Comprehensive loss attributable to non-controlling interest		(277	)		(1,562	)		(894	)		(2,405	)		(507	)		(277	)		(723	)		(894	)
Comprehensive loss attributable to American Well Corporation	$	(37,998	)	$	(86,632	)	$	(77,204	)	$	(111,141	)	$	(79,435	)	$	(37,998	)	$	(153,674	)	$	(77,204	)

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

CONDENSED CONSOLIDATED STATEMENTS OF ~~CONVERTIBLE PREFERRED STOCK AND~~ STOCKHOLDERS’ EQUITY ~~(DEFICIT)~~

	Common Stock						Treasury			Additional Paid-In			Accumulated Other Comprehensive			Accumulated			American Well Corporation Stockholders’			Noncontrolling			Total Stockholders’
	Shares			Amount			Stock			Capital			Income (Loss)			Deficit			Equity			Interest			Equity			Common Stock				Additional Paid-In			Accumulated Other Comprehensive			Accumulated			American Well Corporation Stockholders’			Noncontrolling			Total Stockholders’
Balances as of December 31, 2020		235,604,105		$	2,357		$	(37,568	)	$	1,841,405		$	297		$	(582,359	)	$	1,224,132		$	22,065		$	1,246,197
																												Shares		Amount		Capital			Income (Loss)			Deficit			Equity			Interest			Equity
Balances as of January 1, 2022																													261,871,587	$	2,620	$	2,054,275		$	(6,353	)	$	(811,284	)	$	1,239,258		$	21,617		$	1,260,875
Exercise of common stock options		3,474,375			34			—			10,096			—			—			10,130			—			10,130			976,644		10		2,455			—			—			2,465			—			2,465
Vesting of restricted stock units		853,842			9			—			(9	)		—			—			—			—			—			1,398,305		14		(14	)		—			—			—			—			—
Retirement of treasury stock purchased in 2020		—			—			37,568			(15	)		—			(37,553	)		—			—			—
Shares withheld related to net share settlement and retired treasury stock in 2021		(402,060	)		(4	)		—			4			—			(9,771	)		(9,771	)		—			(9,771	)
Issuance of stock under employee stock purchase plan																													425,114		4		1,497			—			—			1,501			—			1,501
Issuance of common stock related to Conversa earn-out settlement																													1,020,964		10		4,288			—			—			4,298			—			4,298
Stock-based compensation expense		—			—			—			8,642			—			—			8,642			—			8,642			—		—		12,085			—			—			12,085			—			12,085
Capital contributed by selling shareholders of acquired businesses																													—		—		2,019			—			—			2,019			—			2,019
Currency translation adjustment		—			—			—			—			(52	)		—			(52	)		—			(52	)		—		—		—			(2,951	)		—			(2,951	)		—			(2,951	)
Unrealized gains on available-for-sale securities, net of tax		—			—			—			—			34			—			34			—			34
Unrealized losses on available-for-sale securities, net of tax																													—		—		—			(1,251	)		—			(1,251	)		—			(1,251	)
Net loss		—			—			—			—			—			(39,188	)		(39,188	)		(617	)		(39,805	)		—		—		—			—			(70,037	)		(70,037	)		(216	)		(70,253	)
Balances as of March 31, 2021		239,530,262			2,396			—			1,860,123			279			(668,871	)		1,193,927			21,448			1,215,375
Balances as of March 31, 2022																													265,692,614		2,658		2,076,605			(10,555	)		(881,321	)		1,187,387			21,401			1,208,788
Exercise of common stock options		1,812,491			18			—			6,656			—			—			6,674			—			6,674			1,083,571		10		1,916			—			—			1,926			—			1,926
Vesting of restricted stock units		844,900			9			—			(9	)		—			—			—			—			—			1,606,976		16		(16	)		—			—			—			—			—
Shares withheld related to net share settlement and retired treasury stock in 2021		(68,750	)		(1	)		—			1			—			(1,857	)		(1,857	)		—			(1,857	)
Issuance of common stock related to SilverCloud earn-out settlement																													4,959,856		50		12,895			—			—			12,945			—			12,945
Receipt of Section 16(b) disgorgement																													—		—		295			—			—			295			—			295
Stock-based compensation expense		—			—			—			10,726			—			—			10,726			—			10,726			—		—		14,907			—			—			14,907			—			14,907
Capital contributed by selling shareholders of acquired businesses																													—		—		1,974			—			—			1,974			—			1,974
Currency translation adjustment		—			—			—			—			(20	)		—			(20	)		—			(20	)		—		—		—			(10,179	)		—			(10,179	)		—			(10,179	)
Unrealized gains on available-for-sale securities, net of tax		—			—			—			—			(119	)		—			(119	)		—			(119	)
Unrealized losses on available-for-sale securities, net of tax																													—		—		—			(111	)		—			(111	)		—			(111	)
Net loss		—			—			—			—			—			(37,859	)		(37,859	)		(277	)		(38,136	)		—		—		—			—			(69,145	)		(69,145	)		(507	)		(69,652	)
Balances as of June 30, 2021		242,118,903		$	2,422		$	—		$	1,877,497		$	140		$	(708,587	)	$	1,171,472		$	21,171		$	1,192,643
Balances as of June 30, 2022																													273,343,017	$	2,734	$	2,108,576		$	(20,845	)	$	(950,466	)	$	1,139,999		$	20,894		$	1,160,893

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

CONDENSED CONSOLIDATED STATEMENTS OF ~~CONVERTIBLE PREFERRED STOCK AND~~ STOCKHOLDERS’ EQUITY ~~(DEFICIT)~~

	Convertible Preferred Stock				Common Stock					Treasury			Additional Paid-In			Accumulated Other Comprehensive			Accumulated			American Well Corporation Stockholders’			Noncontrolling			Total Stockholders’
	Shares		Amount		Shares			Amount		Stock			Capital			Income (Loss)			Deficit			Deficit			Interest			(Deficit)			Common Stock						Treasury			Additional Paid-In			Accumulated Other Comprehensive			Accumulated			American Well Corporation Stockholders’			Noncontrolling			Total Stockholders’
Balances as of January 1, 2020		14,012,935	$	655,799		42,302,845			423	$	(158	)		50,289		$	250		$	(357,927	)	$	(307,123	)	$	26,259		$	(280,864	)
Issuance of Series C convertible preferred stock, net of issuance costs of $261		170,000		12,489		—			—		—			—			—			—			—			—			—
																															Shares			Amount			Stock			Capital			Income (Loss)			Deficit			Equity			Interest			Equity
Balances as of January 1, 2021																																235,604,105			2,357		$	(37,568	)		1,841,405		$	297		$	(582,359	)	$	1,224,132		$	22,065		$	1,246,197
Exercise of common stock options		—		—		7,392			—		—			2			—			—			2			—			2			3,474,375			34			—			10,096			—			—			10,130			—			10,130
Vesting of restricted stock units		—		—		146,969			1		—			(1	)		—			—			—			—			—			853,842			9			—			(9	)		—			—			—			—			—
Retirement of treasury stock purchased in 2020																																—			—			37,568			(15	)		—			(37,553	)		—			—			—
Shares withheld related to net share settlement and retired treasury stock in 2021																																(402,060	)		(4	)		—			4			—			(9,771	)		(9,771	)		—			(9,771	)
Stock-based compensation expense		—		—		—			—		—			4,458			—			—			4,458			—			4,458			—			—			—			8,642			—			—			8,642			—			8,642
Retirement of treasury stock		—		—		—			—		158			(158	)		—			—			—			—			—
Currency translation adjustment		—		—		—			—		—			—			(171	)		—			(171	)		—			(171	)		—			—			—			—			(52	)		—			(52	)		—			(52	)
Unrealized gains on available-for -sale securities, net of tax		—		—		—			—		—			—			43			—			43			—			43
Unrealized gains on available-for-sale securities, net of tax																																—			—			—			—			34			—			34			—			34
Net loss		—		—		—			—		—			—			—			(24,381	)		(24,381	)		(843	)		(25,224	)		—			—			—			—			—			(39,188	)		(39,188	)		(617	)		(39,805	)
Balances as of March 31, 2020		14,182,935		668,288		42,457,206			424		—			54,590			122			(382,308	)		(327,172	)		25,416			(301,756	)
Issuance of Series C convertible preferred stock, net of issuance costs of $750		1,342,750		133,525		—			—		—			—			—			—			—			—			—
Treasury stock		—		—		(61,600	)				(163	)		—			—			—			(163	)		—			(163	)
Balances as of March 31, 2021																																239,530,262			2,396			—			1,860,123			279			(668,871	)		1,193,927			21,448			1,215,375
Exercise of common stock options		—		—		768,106			8		—			2,322			—			—			2,330			—			2,330			1,812,491			18			—			6,656			—			—			6,674			—			6,674
Vesting of restricted stock units		—		—		204,829			2		—			(2	)		—			—			—			—			—			844,900			9			—			(9	)		—			—			—			—			—
Shares withheld related to net share settlement and retired treasury stock in 2021																																(68,750	)		(1	)		—			1			—			(1,857	)		(1,857	)		—			(1,857	)
Stock-based compensation expense		—		—		—			—		—			67,638			—			—			67,638			—			67,638			—			—			—			10,726			—			—			10,726			—			10,726
Currency translation adjustment		—		—		—			—		—			—			349			—			349			—			349			—			—			—			—			(20	)		—			(20	)		—			(20	)
Unrealized gains on available-for -sale securities, net of tax		—		—		—			—		—			—			(323	)		—			(323	)		—			(323	)
Unrealized gains on available-for-sale securities, net of tax																																—			—			—			—			(119	)		—			(119	)		—			(119	)
Net loss		—		—		—			—		—			—			—			(86,658	)		(86,658	)		(1,562	)		(88,220	)		—			—			—			—			—			(37,859	)		(37,859	)		(277	)		(38,136	)
Balances as of June 30, 2020		15,525,685	$	801,813		43,368,541		$	434	$	(163	)	$	124,548		$	148		$	(468,966	)	$	(343,999	)	$	23,854		$	(320,145	)
Balances as of June 30, 2021																																242,118,903		$	2,422		$	-		$	1,877,497		$	140		$	(708,587	)	$	1,171,472		$	21,171		$	1,192,643

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


	Six Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2022			2021
Cash flows from operating activities:
Net loss	$	(77,941	)	$	(113,444	)	$	(139,905	)	$	(77,941	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense		4,990			4,795			13,132			4,990
Provisions for doubtful accounts		(57	)		640
Provisions for credit losses								(308	)		(57	)
Amortization of deferred contract acquisition costs		731			730			847			731
Amortization of deferred contract fulfillment costs		351			339			288			351
Noncash compensation costs incurred by selling shareholders								3,993			—
Stock-based compensation expense		19,368			72,096			27,598			19,368
Loss on equity method investment		1,541			764			762			1,541
Deferred income taxes								(1,164	)		—
Changes in operating assets and liabilities, net of acquisition:
Accounts receivable		9,809			(8,708	)		5,763			9,809
Inventories		199			(2,107	)		(391	)		199
Deferred contract acquisition costs		(618	)		(1,506	)		(1,135	)		(618	)
Prepaid expenses and other current assets		284			(3,004	)		(1,714	)		284
Other assets		184			229			489			184
Accounts payable		(624	)		(2,494	)		(6,525	)		(624	)
Accrued expenses and other current liabilities		(16,063	)		(687	)		(490	)		(16,063	)
Other long-term liabilities		(38	)		(195	)		(15	)		(38	)
Deferred revenue		(9,506	)		(5,270	)		(6,624	)		(9,506	)
Net cash used in operating activities		(67,390	)		(57,822	)		(105,399	)		(67,390	)
Cash flows from investing activities:
Purchases of property and equipment		(283	)		(2,304	)		(58	)		(283	)
Investment in less than majority owned joint venture		(2,548	)		(2,940	)		(1,960	)		(2,548	)
Purchases of investments		—			(29,777	)		(499,223	)		—
Proceeds from sales and maturities of investments		100,000			39,355			124,981			100,000
Net cash provided by investing activities		97,169			4,334
Net cash used in and provided by investing activities								(376,260	)		97,169
Cash flows from financing activities:
Proceeds from issuance of Series C convertible preferred stock, net of issuance costs		—			146,764
Proceeds from exercise of common stock options		16,733			2,232			4,465			16,733
Proceeds from employee stock purchase plan								1,501			—
Payments for the purchase of treasury stock		(11,628	)		(163	)		—			(11,628	)
Payment of deferred offering costs		(1,613	)		(371	)		—			(1,613	)
Net cash provided by financing activities		3,492			148,462
Proceeds from Section 16(b) disgorgement								295
Payment of contingent consideration								(11,790	)		—
Net cash used in and provided by financing activities								(5,529	)		3,492
Effect of exchange rates changes on cash, cash equivalents, and restricted cash								(2,039	)		—
Net decrease in cash, cash equivalents, and restricted cash		33,271			94,974			(489,227	)		33,271
Cash, cash equivalents, and restricted cash at beginning of period		942,711			138,816			747,211			942,711
Cash, cash equivalents, and restricted cash at end of period	$	975,982		$	233,790		$	257,984		$	975,982
Cash, cash equivalents, and restricted cash at end of period:
Cash and cash equivalents		975,187			232,695			257,189			975,187
Restricted cash		795			1,095			795			795
Total cash, cash equivalents, and restricted cash at end of period	$	975,982		$	233,790		$	257,984		$	975,982
Supplemental disclosure of cash flow information:
Cash paid for income taxes	$	955		$	138
Cash (refunded) paid for income taxes							$	13		$	955
Supplemental disclosure of non-cash investing and financing activities:
Additions to property and equipment included in accrued expenses and accounts payable	$	—		$	572
Common stock issuance costs	$	—		$	440
Preferred stock issuance costs	$	—		$	750
Issuance of common stock in settlement of earnout							$	17,243		$	—
Receivable related to exercise of common stock options	$	71		$	100		$	—		$	71

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

There have been no material changes to the significant accounting policies described in the Company’s Form 10-K for the fiscal year ended December 31, ~~2020,~~2021, that have had a material impact on the consolidated financial statements and related notes.

The Company evaluates its ownership, contractual and other interests in entities to determine if it has any variable interest in a variable interest entity (“VIE”). These evaluations are complex and involve judgment. If the Company determines that an entity in which it holds a contractual or ownership interest is a VIE and that the Company is the primary beneficiary, the Company consolidates such entity in its condensed consolidated financial statements. The primary beneficiary of a VIE is the party that meets both of the following criteria: (i) has the power to make decisions that most significantly affect the economic performance of the VIE; and (ii) has the obligation to absorb losses or the right to receive benefits that in either case could potentially be significant to the VIE. Management performs ongoing reassessments of whether changes in the facts and circumstances regarding the Company’s involvement with a VIE will cause the consolidation conclusion to change. Changes in consolidation status are applied prospectively.

The aggregate carrying value of total assets and total liabilities included on the condensed consolidated balance sheets for the PCs after elimination of intercompany transactions were ~~$30,207~~$26,879 and ~~$1,929,~~$1,508, respectively, as of June 30, ~~2021~~2022 and ~~$22,682~~$29,770 and ~~$1,998,~~$1,485, respectively as of December 31, ~~2020.~~2021.

Total revenue included on the condensed consolidated statements of operations and comprehensive loss for the PCs after elimination of intercompany transactions was ~~$17,585~~$17,400 and ~~$24,719~~$17,585 for the three ~~months~~ ended June 30, ~~2021~~2022 and ~~2020,~~2021, respectively. Net loss included on the condensed consolidated statements of operations and comprehensive loss was not material for the three months ended June 30, ~~2021~~2022 and ~~2020.~~2021. Total revenue included on the condensed consolidated statements of operations and comprehensive loss for the PCs after elimination of intercompany transactions was ~~$35,154~~$35,792 and ~~$43,389~~$35,154 for the six months ended June 30, ~~2021~~2022 and ~~2020,~~2021, respectively. Net loss included on the condensed consolidated statements of operations and comprehensive loss was not material for the ~~three and~~ six months ended June 30, ~~2021~~2022 and ~~2020.~~2021

As of June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the aggregate amount of the transaction price allocated to remaining performance obligations was ~~$190,413~~$192,836 and ~~$192,238,~~$219,893, respectively. The substantial majority of the unsatisfied performance obligations will be satisfied over the next three ~~years.~~years.

As it pertains to the June 30, ~~2021~~2022 amount, the Company expects to recognize ~~47%~~45% of the transaction price in the 12 month period ended June 30, ~~2022,~~2023, in its condensed consolidated statement of operations and comprehensive loss with the remainder recognized thereafter.

The Company’s cash equivalents were invested in money market funds and were valued based on Level 1 inputs. The Company’s investments consisted of U.S. government agency bonds and were valued based on Level 2 inputs. In determining the fair value of its U.S. government agency bonds, the Company relied on quoted prices for similar securities in active markets or other inputs that are observable or can be corroborated by observable market data.

The Company has classified its net liability for contingent earnout considerations relating to the Acquisitions within Level 3 of the fair value hierarchy because the fair value is determined using significant unobservable inputs, which included the Monte Carlo method that uses key assumptions to model future revenue and costs of goods sold projections. A description of the Acquisitions is included within Note 7. The contingent earnout payments for each acquisition are based on the achievement of certain revenue thresholds. During the six months ended June 30, ~~2021,~~2022 the fair value of the contingent earnout consideration decreased due to the Company signing an amendment to the agreement accelerating the determination of the Conversa revenue earn-out as of March 31, 2022 that resulted in the issuance of 1,020,964 shares of Class A Common Stock, and signing an amendment to the agreement accelerating the determination of the SilverCloud revenue earn-out as of May 11, 2022 that resulted in the issuance of 4,959,856 shares of Class A Common Stock, which resulted in a net accretion to the contingent considerations of $793.

During the six months ended June 30, 2022, there were 0 transfers between fair value measurement levels.

6. Investments

As of June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the fair value of the Company’s investments by type of security was as follows:


	June 30, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Assets:
U.S government securities	$	374,242		—	$	(1,362	)	$	372,880
	$	374,242	$	—	$	(1,362	)	$	372,880

~~June 30,~~December 31, 2021

Amortized

Cost

Gross

Unrealized

Gains

Gross

Unrealized

Losses

Fair Value

Assets:

U.S government securities

—

December 31, 2020

Amortized
Cost

Gross
Unrealized
Gains

Gross
Unrealized
Losses

Fair Value

Assets:

U.S government securities

$
99,854

$
109

$
—

$
99,963

$
99,854

$
109

$
—

$
99,963

7. Business Combinations

On August 27, 2021, the Company completed the acquisition of SilverCloud through a merger in which SilverCloud became a wholly-owned subsidiary of the Company. The cash consideration paid was $105,195 net of cash acquired of $12,239. The stock consideration was comprised of 8.1 million shares of the Company’s Class A common stock valued at $85,571, and escrow share consideration of $6,376. SilverCloud is a leading digital mental health platform. The Company is obligated to pay an earn-out of up to $40,000 contingent upon SilverCloud achieving certain revenue thresholds for the year ending December 31, 2022. The Company estimated the fair value of the contingent consideration as of the acquisition date to be $29,360. The contingent consideration is subject to remeasurement at each reporting date until December 31, 2022, with the remeasurement adjustment reported in the consolidated statement of operations and comprehensive loss. The Company signed an amendment to the agreement accelerating the determination of the SilverCloud revenue earn-out as of May 11, 2022, which resulted in the issuance of 4,959,856 shares of Class A Common Stock. The acquisition was considered a stock acquisition for tax purposes and accordingly, the goodwill resulting from this acquisition is not tax deductible. The total acquisition related costs were $4,854 which included transaction costs from financial and legal advisors and other transaction related fees and were recognized as incurred in the Company’s consolidated statement of operations and comprehensive loss in general and administrative expenses.

On August 9, 2021, the Company completed the acquisition of Conversa through a merger in which Conversa became a wholly-owned subsidiary of the Company. The cash consideration paid was $51,331 net of cash acquired of $9,735. The stock consideration was comprised of 4.7 million shares of the Company’s Class A common stock valued at $52,160. Conversa is a leader in automated virtual healthcare. The Company is obligated to pay an earn-out of up to $30,000 contingent upon Conversa achieving certain integration thresholds in the first quarter of 2022, and certain revenue thresholds for the year ending December 31, 2022. The Company estimated the fair value of the contingent consideration as of the acquisition date to be $15,230. The contingent consideration is subject to remeasurement at each reporting date until December 31, 2022, with the remeasurement adjustment reported in the consolidated statement of operations and comprehensive loss. The integration milestone was achieved in December 2021 and $15,000 was paid in January 2022. The Company signed an amendment to the agreement accelerating the determination of the Conversa revenue earn-out as of March 31, 2022, which resulted in the issuance of 1,020,964 shares of Class A Common Stock. The acquisition was considered a stock acquisition for tax purposes and accordingly, the goodwill resulting from this acquisition is not tax deductible. The total acquisition related costs were $2,435 which included transaction costs from financial and legal advisors and other transaction related fees and were recognized as incurred in the Company’s consolidated statement of operations and comprehensive loss in general and administrative expenses.

The Acquisitions were accounted for using the acquisition method of accounting, which requires, among other things, the assets acquired and the liabilities assumed be recognized at their fair values as of the acquisition date. The results of the Acquisitions were integrated within the consolidated financial statements commencing on the aforementioned acquisition dates. Actual revenue and losses of the Acquisitions since the acquisition date as well as pro forma combined results of operations for the Acquisitions have not been presented because the effect of the Acquisitions was not material to the Company’s consolidated financial results for the periods presented.

The following table summarizes the preliminary fair value estimates of the assets acquired and liabilities assumed for the SilverCloud and Conversa acquisitions at the respective acquisition dates. The Company, with the assistance of a third-party valuation expert, estimated the preliminary fair value of the acquired tangible and intangible assets with significant estimates such as revenue projections. The allocation of the consideration transferred to the assets acquired and the liabilities assumed for the Acquisitions remains preliminary, and therefore can be revised as a result of additional information obtained due to completing the assessment of the tax attributes of the business combination. Additional adjustments may be recorded within the measurement period, which will not exceed one year from the acquisition date.

Identifiable assets acquired and liabilities assumed:


	SilverCloud			Conversa Health
Purchase consideration:
Cash consideration, net of cash acquired	$	105,195		$	51,331
Stock consideration		85,571			52,160
Contingent consideration		29,360			15,230
Escrow share consideration		6,376
Working capital adjustment		(300	)		(127	)
Total consideration transferred	$	226,202		$	118,594

Allocation of consideration transferred:
Accounts receivable	$	2,630		$	3,651
Identifiable intangible assets		78,146			34,700
Other assets		491			4,604
Total assets acquired		81,267			42,955
Current liabilities		2,155			8,463
Deferred revenue		5,813			4,655
Other long-term liabilities		11,557			115
Total liabilities assumed		19,525			13,233
Goodwill	$	164,460		$	88,872
	$	226,202		$	118,594

The amount allocated to goodwill reflects the benefits the Company expects to realize from post-acquisition cross selling opportunities from integrating customer relationships and from the growth of the respective acquisitions’ operations.

7.The following are the identifiable intangible assets acquired in the Acquisitions and their respective weighted average useful lives, as determined based on initial valuations. The estimated fair value of the Technology and Tradename was determined using a relief from royalty method and the estimated fair value of the Customer relationships was determined using the excess earnings method:


	SilverCloud		Weighted Average Life (Years)		Conversa Health		Weighted Average Life (Years)
Technology	$	34,996		5.0	$	20,400		5.0
Tradename		10,800		7.0		4,200		5.0
Customer relationships		32,350		10.0		10,100		10.0
Total	$	78,146			$	34,700

8. Goodwill and Intangible Assets

Goodwill consisted of the following:


	Six Months Ended June 30,		Year Ended December 31, 2020		Six Months Ended June 30, 2022
Beginning Balance as of January 1	$	193,877	$	193,877	$	442,761
Goodwill acquired		—		—		—
Currency translation adjustments						(8,921	)
Ending Balance	$	193,877	$	193,877	$	433,840

Identified intangible assets consisted of the following:

	Gross Amount		Accumulated Amortization			Carrying Value		Weighted Average Remaining Life
June 30, 2021
										Gross Amount		Accumulated Amortization			Carrying Value		Weighted Average Remaining Life
June 30, 2022
Customer relationships	$	38,782	$	(13,363	)	$	25,419		6.5	$	80,201	$	(20,852	)	$	59,349		7.9
Contractor relationships		535		(226	)	$	309		7.5		535		(268	)		267		6.5
Tradename											13,688		(1,781	)		11,907		5.5
Technology		37,063		(11,119	)	$	25,944		7.0		88,575		(23,664	)		64,911		4.7
	$	76,380	$	(24,708	)	$	51,672			$	182,999	$	(46,565	)	$	136,434

	Gross Amount		Accumulated Amortization			Carrying Value		Weighted Average Remaining Life		Gross Amount		Accumulated Amortization			Carrying Value		Weighted Average Remaining Life
December 31, 2020
December 31, 2021
Customer relationships	$	38,782	$	(11,380	)	$	27,402		7.0	$	81,053	$	(16,842	)	$	64,211		8.2
Contractor relationships		535		(206	)		329		8.0		535		(247	)		288		7.0
Trade name		300		(300	)		—		—		14,435		(706	)		13,729		5.8
Technology		37,063		(9,266	)		27,797		7.5		90,464		(16,283	)		74,181		5.0
	$	76,680	$	(21,152	)	$	55,528			$	186,487	$	(34,078	)	$	152,409

Amortization expense related to intangible assets for the three months ended June 30, 2022 and 2021 was $6,328and ~~2020 was $1,928 and $1,938,~~$1,928, respectively. Amortization expense related to intangible assets for the six months ended June 30, 2022 and 2021 was $12,514and ~~2020 was $3,856 and $3,877,~~$3,856, respectively. Estimated future amortization expense of the identified intangible assets as of June 30, ~~2021,~~2022, is as follows:

2021

$
3,856

2022

7,712

2023

7,712

2024

7,712

2025

7,712

Thereafter

16,968

$
51,672


2022	$	12,205
2023		24,361
2024		24,377
2025		24,361
2026		20,102
Thereafter		31,028
	$	136,434

In January 2011, the Company entered into a credit agreement (the “Line of Credit”) with a financial institution that provides for maximum borrowings in one or more advances of an amount up to $5,000. Borrowings under the Line of Credit accrue interest at the London Interbank Offered Rate plus 1.25%. Borrowings are repayable immediately upon demand by the financial institution. In November 2017, the Line of Credit was amended to increase the maximum borrowings to $7,000. As of June 30, 2021 and December 31, 2020, the Company had 0 outstanding borrowings under the Line of Credit.

During any period that the Line of Credit is in effect, the Company can request the financial institution issue a letter of credit with a maximum maturity not to exceed twelve months. Any letters of credit issued by the financial institution reduce the maximum borrowings available under the Line of Credit. As of June 30, 2021, the maximum borrowing available to the Company is $6,205 based on the outstanding letters of credit of $795 that have been issued by the financial institution. As of December 31, 2020, the maximum borrowing available to the Company was $5,905 based on the outstanding letters of credit of $1,095 that have been issued by the financial institution.

10. Stockholders’ Equity

~~Convertible~~Undesignated Preferred Stock

The ~~authorized, issued and outstanding shares, liquidation preference, and carrying value of the~~ Company’s ~~convertible preferred stock as of December 31, 2019 were as follows:~~

Shares
Authorized

Shares
Issued

Shares
Outstanding

Liquidation
Preference

Carrying
Value

Series A

3,200,000

3,178,650

3,130,077

51,741

28,889

Series B

833,334

787,725

787,725

37,060

23,632

Series C

13,711,111

10,095,133

10,095,133

519,648

603,278

17,744,445

14,061,508

14,012,935

608,449

655,799

In February 2020, the Company issued and sold 170,000 shares of Series C preferred stock at a price of $75 per share for gross proceeds of $12,750. The Company incurred $261 of issuance costs in connection with the issuance of the Series C preferred stock

In May 2020, the Company issued and sold 1,342,750 shares of Series C preferred stock at a price of $100 per share for gross proceeds of $134,275. The Company incurred $750 of issuance costs in connection with the issuance of the Series C preferred stock.

In conjunction with the Company’s IPO in September 2020, all shares of convertible preferred stock then outstanding, totaling 15,525,685 shares (pre-split), were automatically converted into an equivalent number of shares of Class A common stock on an 8.8-to-1.0 basis pursuant to a stock split and their carrying value, totaling $801,813 was reclassified into stockholders’ equity on the condensed consolidated balance sheet.

~~In connection with the IPO, the Company filed an~~ Amended and Restated Certificate of Incorporation ~~which~~ authorizes the issuance of 100,000,000 shares of undesignated preferred stock, par value of ~~$0.01~~$0.01 per share, with rights and preferences, including voting rights, designated from time to time by the board of directors.NaN shares of preferred stock were issued or outstanding as of June 30, 2022 and December 31, 2021.

Common Stock

In September 2020, upon completion of the IPO, the Company sold 45,681,499 shares of Class A common stock at an offering price of $18.00 per share, including 4,459,277 shares of Class A common stock pursuant to the exercise in full of the underwriters’ option to purchase additional shares. The Company received net proceeds of $767,568, after deducting underwriting discounts and commissions of $49,336 and offering costs of approximately $4,906. In September 2020, the Company sold 5,555,555 shares of Class C common stock in connection with the stock purchase agreement with Google, LLC for net proceeds of $99,100, after deducting offering costs of $900.

Concurrently with the IPO, the Company used $24,157 of the proceeds from the IPO to repurchase 1,340,354 shares of Class A and Class B common stock from certain executive officers and other employees, to permit such executive officers and other employees to pay taxes owed in connection with the vesting of equity awards, including the repayment of third-party loans incurred to finance the payment of such taxes.

~~In connection with the IPO, the Company filed an~~Company’s Amended and Restated Certificate of Incorporation which authorizes capital stock of 1,000,000,000 shares of Class A common stock, par value ~~$0.01~~$0.01 per share, 100,000,000 shares of Class B common stock, par value ~~$0.01~~$0.01 per share, and 200,000,000 shares of Class C common stock, par value ~~$0.01~~$0.01 per share. Except for the rights noted below, each share of Class A, Class B and Class C common stock have the same rights, are equal in all respects and are treated by us as one class of shares. Each share of Class A and Class C common stock is entitled to one vote per share on all matters presented for a vote, except that Class C common stock does not have the right to vote for elections of directors. Subject to certain conditions, Class B common stock is collectively entitled to a number of votes equal to the product of (x) 1.0408163 and (y) the total number of votes that would be cast at such time by the holders of the Class A and Class C common stock and any other preferred stock entitled to vote under the certificate of incorporation at such time (resulting in the Class B common stock collectively holding 51% of the total outstanding voting power), and each share of Class B common stock will be entitled to a number of votes equal to the total number of votes held by all Class B common stock divided by the total number of then outstanding shares of Class B common stock. Shares of Class B and Class C common stock will be converted into shares of Class A common stock on a one-for-one basis upon the occurrence of certain events. Shares of Class B common stock will automatically convert on the first business day (i) after the date on which the outstanding shares of Class B common stock constitutes less than 5% of the aggregate number of shares of common stock then outstanding, (ii) after the date on which neither founder is serving as an executive officer or (iii) following seven years after the date the amended and restated certificate of incorporation becomes effective, provided that, such period may, to the extent permitted by law and applicable stock exchange rules, be extended for three years upon the affirmative vote of the holders of a majority of the voting power of the then-outstanding shares of Class A common stock entitled to vote thereon, voting separately as a class. Shares of Class C common stock will be convertible at the option of the holder upon determination that a Hart-Scott-Rodino Antitrust Improvements Act (“HSR”) filing is not necessary prior to the holder’s conversion of such shares or, if required, upon expiration or termination of the HSR waiting period.

In the three and six months ended June 30, ~~2021, 3,351,035~~2022, 0 shares of Class B common stock were converted to Class A common stock. As of June 30, ~~2021,~~2022, the par value of the Class A, Class B and Class C shares was ~~$2,099, $267,~~$2,403, $275, and ~~$56,~~$56, respectively.

Shares
Authorized

Shares
Issued

Shares
Outstanding

Class A

1,000,000,000

209,875,389

209,875,389

Class B

100,000,000

26,687,959

26,687,959

Class C

200,000,000

5,555,555

5,555,555

1,300,000,000

242,118,903

242,118,903


	Shares Authorized		Shares Issued		Shares Outstanding
Class A		1,000,000,000		240,397,065		240,397,065
Class B		100,000,000		27,390,397		27,390,397
Class C		200,000,000		5,555,555		5,555,555
		1,300,000,000		273,343,017		273,343,017

As of June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company had reserved ~~66,187,346~~74,437,861 and ~~61,392,747~~61,989,749 shares of common stock for the exercise of outstanding stock options, the vesting of restricted stock units and the number of shares remaining available for future grant, respectively.

Stock Plans and Stock Options

The Company maintains the 2006 Employee, Director and Consultant Stock Plan as amended and restated (the “2006 Plan”) and 2020 Equity Incentive Plan (the “2020 Plan” together, the “Plans”) under which it has granted incentive stock options, non-qualified stock options, and restricted stock units to employees, officers, and directors of the Company. In connection with the adoption of the 2020 Plan, the then-remaining shares of common stock reserved for grant or issuance under the 2006 Plan became available for issuance under the 2020 Plan, and no further grants will be made under the 2006 Plan. The 2020 Plan is administered by the board of directors with respect to awards to non-employee directors and by the compensation committee, with respect to other participants, are

collectively, referred to as the plan administrator. The exercise prices, vesting and other restrictions are determined at the discretion of the plan administrator.

Options issued under the Plans are exercisable for periods not to exceed ten years, and vest and contain such other terms and conditions as specified in the applicable award document. Options to buy common stock are issued under the Plans, with exercise prices equal to the closing price of shares of the Company’s common stock on the New York Stock Exchange on the date of award.

Activity under the Plans is as follows:

Number of
Shares

Weighted
Average
Exercise Price

Weighted Average
Remaining
Contractual
Term (Years)

Aggregate
Intrinsic Value

Outstanding as of January 1, 2021

23,167,514

$
4.37

6.2

$
487,758

Granted

—

$
—

Forfeited

(317,894
)

$
5.70

Expired

—

$
—

Exercised

(5,286,866
)

$
3.25

Outstanding as of June 30, 2021

17,562,754

4.68

6.2

$
140,880

Vested and expected to vest as of December 31, 2020

21,744,937

$
4.14

6.0

$
460,712

Vested and expected to vest as of June 30, 2021

16,685,854

$
4.46

6.1

$
135,479

Options exercisable as of December 31, 2020

17,640,827

$
3.71

5.5

$
381,511

Options exercisable as of June 30, 2021

13,809,991

$
4.13

5.7

$
116,756


	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding as of January 1, 2022		15,893,755		$	4.81		5.9	$	23,876
Granted		—		$	—
Forfeited		(953,627	)	$	6.64
Expired		(49,542	)	$	5.63
Exercised		(2,060,215	)	$	2.13
Outstanding as of June 30, 2022		12,830,371			4.81		5.8	$	6,198
Vested and expected to vest as of December 31, 2021		15,395,398		$	4.61		5.8	$	23,752
Vested and expected to vest as of June 30, 2022		12,630,154		$	4.91		5.7	$	6,194
Options exercisable as of December 31, 2021		13,407,882		$	4.38		5.5	$	23,120
Options exercisable as of June 30, 2022		11,634,556		$	4.82		5.6	$	6,198

NaN options were granted in the six months ended June 30, 2022 and 2021. ~~The weighted-average grant date fair value of common stock options granted during the six months ended June 30, 2020 was $3.88.~~

~~The weighted-average of assumptions that the Company used to determine the fair value of the common stock options granted to employees and directors were as follows:~~

Six Months Ended June 30,

2021

2020

Risk-free interest rate

N/A

1.32
%
Expected term (in years)

N/A

6.1

Expected volatility

N/A

51
%
Expected dividend yield

N/A

0
%

~~Executive Equity Awards~~

Each CEO has received restricted stock units, equaling 1.5% of the Company’s fully-diluted outstanding capital stock as a result of the IPO (“IPO RSUs”), 50% of the IPO RSUs (representing 0.75% of the Company’s fully diluted outstanding capital stock immediately prior to the IPO or 3,230,750 shares of Class A common stock) were granted on the closing date of the IPO based on the closing price per share on the IPO closing date, and 50% (representing 0.75% of the Company’s fully diluted outstanding capital stock immediately prior to the IPO or 3,230,750 shares of Class A common stock) was granted on the 180-day anniversary of the IPO, based on a specific range of the price per share of the Company’s publicly traded common stock prior March 16, 2021, and will vest over a three-year period, with one-third vesting on the first anniversary of the IPO’s closing date and the remaining vesting in equal quarterly installments thereafter. As the issuance of the second 50% tranche was based upon events that are probable the expense related to both tranches of the IPO RSUs was recognized in the three months ended September 30, 2020.

The grant-date fair value of each of the awards issued on the IPO closing date and issued on the 180-day anniversary of the IPO was estimated using a binomial lattice approach. The main inputs to valuing the IPO RSUs include the fair value of Class A common stock ($9.96 post-split), expected volatility (60%) and the expected date of the IPO (September 30, 2020). The Company recognized a total of $23,644 in stock-based compensation expense, which included both tranches of the IPO RSUs for each CEO, on the date of the IPO as the requisite future service of the awards is not substantive for accounting purposes.

Restricted Stock Units

During the year ended December 31, 2020, the Company granted 13,816,885 restricted stock units which vest over the service period of one to four years. During the six months ended June 30, 2021, the Company granted 6,409,182 restricted stock units which vest over the service period of one to four years.

Activity for the restricted stock units is as follows:

	Shares			Weighted Average Grant Date Fair Value
Unvested as of January 1, 2021		11,014,450		$	14.43
						Shares			Weighted Average Grant Date Fair Value
Unvested as of January 1, 2022							11,718,813		$	19.63
Granted		6,409,182			19.95		10,622,982			4.09
Vested		(1,698,742	)		9.56		(3,005,281	)		12.55
Forfeited		(108,946	)		15.75		(1,787,601	)		9.04
Unvested as of June 30, 2021		15,615,944		$	17.22
Unvested as of June 30, 2022							17,548,913		$	7.75

The total grant date fair value of RSU’s granted for the six months ended June 30, ~~2021~~2022 was ~~$127,834. During~~$43,456. Restricted stock units vest over the ~~six months ended June 30, 2020 the Company granted 2,616,345 restricted stock units.~~service period of one to four years. The aggregate intrinsic value of restricted stock units vested for the six months ended June 30, 2022 and 2021 was $13,180and ~~2020 was $35,223~~$35,223, respectively.

Restricted Stock Units with a Market Condition

In the six months ended June 30, 2022 the Company granted performance-based market condition share awards to certain members of the Company’s management team, which entitle these employees with the right to receive shares of common stock, upon achievement of certain market capitalization milestones measured over a rolling thirty day trading-period, subject to the satisfaction of the applicable service vesting conditions. The performance-based market condition share awards for management (other than the co-CEOs) consist of 6 tranches with six separate specified award values that become payable upon achievement of certain market capitalization milestones, which can result in a vesting range of up to 10,423,674 shares. Also in 2022 the Company granted performance-based market condition share awards to the co-CEOs, which entitle these employees with the right to receive shares of common stock, upon achievement of certain market capitalization milestones measured over a rolling thirty day trading-period, subject to the satisfaction of the applicable service vesting conditions. The performance-based market condition share awards for the co-CEOs consist of 8 tranches with eight separate specified award values that become payable upon achievement of certain market capitalization milestones (subject to specified vesting caps during each of the first two years of the performance period), which can result in a vesting range of up to 7,500,000 shares for each co-CEO. As of June 30, 2022, the performance-based market conditions for the awards to management and ~~$1,693, respectively.~~the co-CEOs have not been met. These performance-based market condition share awards have a performance period of three years.


	Shares			Weighted Average Grant Date Fair Value
Unvested as of January 1, 2022		—		$	—
Granted		25,423,674			2.21
Vested		—			—
Cancelled/Forfeited		(1,568,889	)		2.62
Unvested as of June 30, 2022		23,854,785		$	2.18

The total grant-date fair value of performance-based market condition share awards granted during the six months ended June 30, 2022 was $56,109 million and 0 performance-based market condition share awards were granted during the six months ended June 30, 2021.

The weighted average estimated fair value of the performance-based market condition share awards granted during the six months ended June 30, 2022 was determined using a Monte-Carlo valuation simulation, with the following most significant weighted-average assumptions:


	Six Months Ended June 30,
	2022
Risk-free rate		2.28	%
Term to end of performance period (yrs)	3 years
Valuation date stock price	$	3.43
Expected volatility		75	%
Expected dividend yield		0	%

2020 Employee Stock Purchase Plan

~~In July and August 2020,~~During the Company’s board of directors adopted, and the Company’s stockholders approved, the 2020 Employee Stock Purchase Plan (“ESPP”). A total of 3,084,218 shares of Class A common stock were reserved for issuance under the ESPP. The ESPP became effective March 1, 2021. Rights granted under the ESPP will be issued only with respect to shares of Class A common stock. The purchase price of the shares will not be less than 85% of the fair market value of Class A common stock on the lower of the purchase date, which will be the final trading day of the purchase period, or the enrollment date, which will be the first trading day of the offering period.

~~As of June 30, 2021, the Company had 0t issued any shares under the ESPP and the total 3,084,218 shares remained available for issuance.~~

~~For the three and~~ six months ended June 30, 2021, the Company ~~recorded stock-based compensation expense related to the ESPP of $281 and $384, respectively, based on elections made~~had 0t issued any shares under the ~~plan to-date. There was 0 expense for~~ESPP. During the ~~three and~~ six months ended June 30, ~~2020.~~2022, the Company issued 425,114 shares under the ESPP. As of June 30, 2022 4,779,994 shares remained available for issuance.

Stock-Based Compensation

Stock-based compensation expense was classified in the condensed consolidated statements of operations and comprehensive loss as follows:


	Three Months Ended June 30,				Six Months Ended June 30,				Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020		2022		2021		2022		2021
Cost of revenues	$	521	$	168	$	910	$	359	$	426	$	521	$	761	$	910
Research and development		2,171		988		3,678		1,436		2,699		2,171		4,881		3,678
Selling and marketing		2,100		756		3,989		1,546		1,304		2,100		3,099		3,989
General and administrative		5,934		65,726		10,791		68,755		10,478		5,934		18,251		10,791
Total	$	10,726	$	67,638	$	19,368	$	72,096	$	14,907	$	10,726	$	26,992	$	19,368

As of June 30, ~~2021,~~2022, the unrecognized stock-based compensation expense related to unvested common stock-based awards was ~~$88,396,~~$116,818, which is expected to be recognized over a weighted-average period of 32.6 years.

11. Commitments and Contingencies

Indemnification

The Company’s arrangements generally include certain provisions for indemnifying customers against third-party claims asserting infringement of certain intellectual property rights in the ordinary course of business. The Company also regularly indemnifies customers against third-party claims that the company’s products or services breach applicable law or regulation or from claims resulting from a breach of the business associate agreement in place with the customer. In addition, the Company indemnifies its officers, directors and certain key employees while they are serving in good faith in their capacities. Through June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, there have been 0 claims under any indemnification provisions.

~~Litigation~~

Litigation

From time to time, and in the ordinary course of business, the Company may be subject to various claims, charges, and litigation. On September 14, 2020, the Company received a letter from Teladoc Health, Inc. ("Teladoc") alleging that certain of the Company’s cart products and associated peripherals infringe upon their patents. On October 12, 2020, Teladoc ~~Health, Inc~~ filed a claim against the Company related to these allegations. ~~The Company believes that these claims lack merit and intends~~On June 30, 2022, the claim was dismissed pursuant to ~~defend against them vigorously.~~a confidential settlement between the parties. As of June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company did 0t0t have any pending claims, charges or litigation that it expects would have a material adverse effect on its consolidated financial position, results of operations or cash flows.

12. Income Taxes

As a result of the Company’s history of net operating losses (“NOL”), the Company ~~has provided for~~continues to maintain a full valuation allowance against its domestic net deferred tax assets. For the three and six months ended June 30, ~~2021,~~2022, the Company recognized an income tax expense of ~~$103~~$461 and ~~$412,~~$129, primarily due to ~~estimated~~ state and foreign income ~~taxes.~~tax. During the three and six months ended June 30, ~~2020,~~2021, the Company recorded income tax expense of ~~$252.~~$103 and $412, primarily due to estimated state and foreign income taxes.

13. Related-Party Transactions

~~Teva Pharmaceuticals, Industries Ltd~~Philips Holding USA, Inc.

~~Teva Pharmaceuticals, Industries Ltd~~Philips Holding USA, Inc. (“~~Teva”~~Philips”) iswas determined to be a related party through June 2021, because a member of the Company’s board of directors was the ~~President and CFO~~Business Leader of ~~Teva Pharmaceuticals’ North America Commercial.~~Philips Population Health Management. In addition, Teva is a shareholder of the Company. As of June 30, 2021 and December 31, 2020, short-term and long-term deferred revenue from this customer was 0t material. As of June 30, 2021 and December 31, 2020, amounts due from Teva were 0t material.

~~During~~ the three and six months ended June 30, 2021 ~~and 2020, revenues recognized from this customer were 0t material.~~

~~Philips Holding USA, Inc.~~

Philips Holding USA, Inc. (“Philips”) is a related party because a member of the Company’s board of directors is the Business Leader of Philips Population Health Management. In addition, Philips is a non-significant shareholder of the Company. As of June 30, 2021 and December 31, 2020, the Company ~~held short-term and long-term deferred~~recognized revenue of ~~$977~~$758 and ~~$2,549,~~1,658, respectively from contracts with this customer. ~~As of June 30, 2021 and December 31, 2020, amounts due from Philips were $547 and $763, respectively.~~

During the three months ended June 30, 2021 and 2020, the Company recognized revenue of $758 and $368, respectively from contracts with this customer. During the six months ended June 30, 2021 and 2020, the Company recognized revenue of $1,658 and $708, respectively from contracts with this customer.

Anthem Inc.

Anthem Inc. (“Anthem”) was determined to be a related party through February 2021, because a member of the Company’s board of directors served as the Vice President of Anthem through February 2021. In addition, Anthem is a non-significant shareholder of the Company. As of June 30, 2021 it was determined Anthem was no longer a related party. As of December 31, 2020, the Company held short-term and

~~long-term deferred revenue of $11,347, from contracts with this customer. As of December 31, 2020, amounts due from Anthem were $8,391.~~

Anthem. Prior to ~~the board member’s~~that director's departure from Anthem in February 2021 the Company recognized revenue of ~~$7,218~~$7,218 from contracts with this customer. ~~During the three and six months ended June 30, 2020 the Company recognized revenue of $14,848 and $27,155, respectively from contracts with this customer.~~

Cleveland Clinic

Cleveland Clinic is a related party because a member of the Company’s board of directors is an executive advisor to Cleveland Clinic. As of June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company held ~~short-term and long-term~~total deferred revenue of ~~$451~~$261 and ~~$606,~~$456, respectively from contracts with this customer. As of June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, amounts due from Cleveland Clinic were ~~$85~~$82 and ~~$1,020,~~$441, respectively.

During the three months ended June 30, ~~2021~~2022 and ~~2020,~~2021, the Company recognized revenue of ~~$279~~$694 and ~~$294,~~$279, respectively, from contracts with this customer. During the six months ended June 30, ~~2021~~2022 and ~~2020,~~2021, the Company recognized revenue of ~~$530~~$1,454 and ~~$490,~~$530, respectively, from contracts with this customer.

CCAW, JV LLC

CCAW, JV LLC is a related party because it is a joint venture formed between the Company and Cleveland Clinic for which the Company has a minority owned interest in. During the year ended December 31, 2020, the Company made an initial investment in CCAW, JV LLC of ~~$2,940~~$2,940 for its less than ~~50%~~50% interest in the joint venture. During the ~~six~~three months ended June 30, 2021, the Company made a capital ~~contributed~~contribution of ~~$2,548,~~$2,548, related to a portion of the phase one capital commitment. During the three months ended June 30, ~~2021~~2022 the Company made a capital contribution of $1,960 related to a portion of the phase one capital commitment.

During the three months ended June 30, 2022 and ~~2020~~2021 the Company recognized revenue of ~~$412~~$469 and ~~$393~~$412 from contracts with this customer, respectively. During the six months ended June 30, ~~2021~~2022 and ~~2020~~2021, the Company recognized revenue of ~~$874~~$923 and ~~$786~~$874 from contracts with this customer, ~~respectively,~~ respectively.

As of June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company held ~~short and long term~~total deferred revenue of ~~$840~~$622 and ~~$1,496,~~$1,426, respectively, from contracts with this customer. As of June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, amounts due from CCAW, JV LLC were ~~0t material.~~

~~Loans to Officers~~

~~During 2020, the Company entered into secured promissory notes with executive officers in the amount of $16,441. These loans were to fund the taxes associated with the restricted stock units~~0 and were collateralized by all of the capital stock of the Company that the employee owned or would own in the future and the employees’ personal assets. These loans are recorded within prepaids and other current assets in the Company’s condensed consolidated balance sheet. All outstanding loans with officers were repaid in August 2020 prior to the Company’s IPO.$1,613.

14. Net Loss per Share

Basic and diluted net loss per share attributable to common stockholders was calculated as follows:


	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020			2022			2021			2022			2021
Numerator:
Net loss	$	(38,136	)	$	(88,220	)	$	(77,941	)	$	(113,444	)	$	(69,652	)	$	(38,136	)	$	(139,905	)	$	(77,941	)
Net loss attributable to non-controlling interest		(277	)		(1,562	)		(894	)		(2,405	)		(507	)		(277	)		(723	)		(894	)
Net loss attributable to American Well Corporation	$	(37,859	)	$	(86,658	)	$	(77,047	)	$	(111,039	)	$	(69,145	)	$	(37,859	)	$	(139,182	)	$	(77,047	)
Denominator:
Weighted-average common shares outstanding —basic and diluted		249,366,652			43,484,313			246,471,733			41,793,108			273,320,740			249,366,652			273,615,031			246,471,733
Net loss per share attributable to common stockholders—basic and diluted	$	(0.15	)	$	(1.99	)	$	(0.31	)	$	(2.66	)	$	(0.25	)	$	(0.15	)	$	(0.51	)	$	(0.31	)

The Company’s potential dilutive securities, which include stock options, convertible preferred stock and unvested restricted stock units, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted-average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same. The Company excluded the following potential common shares equivalents presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect:


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Unvested restricted stock units		14,856,621		7,724,006		14,856,621		7,724,006
Unvested performance market-based stock units		23,854,785		—		23,854,785		—
Options to purchase shares of common stock		12,830,371		17,562,754		12,830,371		17,562,754
		51,541,777		25,286,760		51,541,777		25,286,760

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

Convertible preferred stock (as converted to common stock)

—

136,625,900

—

136,625,900

Unvested restricted stock units

7,724,006

2,028,461

7,724,006

2,028,461

Options to purchase shares of common stock

17,562,754

25,033,565

17,562,754

25,033,565

25,286,760

163,687,926

25,286,760

163,687,926

~~15. Subsequent Events~~

On July 27, 2021 and July 28, 2021 the Company entered into 2 separate purchase agreements to acquire Conversa Health Inc. (“Conversa”) and SilverCloud Health Holdings, Inc. (“SilverCloud”), respectively. Conversa is a leader in automated virtual healthcare. SilverCloud is a leading digital mental health platform. By adding the technology of these two companies to its virtual care platform, Amwell is enhancing the differentiated value it can bring to current and future clients. Under the terms of the agreement with Conversa, the aggregate purchase price of approximately $110,000 will consist of approximately $55,000 in cash and $55,000 in Amwell stock (4.7 million shares). Under the terms of the agreement with SilverCloud, the aggregate purchase price of approximately $210,000 will consist of approximately $110,000 in cash and $100,000 in Amwell stock (8.5 million shares). As this transaction has not yet closed, the mix of cash and stock consideration could change. The aggregate consideration for Conversa could increase by $30,000 subject to financial performance over a twelve-month period paid all in stock. The aggregate consideration for SilverCloud could increase by $40,000 subject to financial and operational performance over a twelve-month period paid all in stock. Conversa closed on August 10, 2021 and SilverCloud is expected to close by the end of the third quarter of 2021. The Company expects to determine the preliminary purchase allocation prior to the end of the third quarter of 2021.

On July 19, 2021, the Company entered into an Employment Agreement (the “Employment Agreement”) with Brendan O’Grady to become the Company’s Chief Commercial & Growth Officer, effective August 16, 2021. Pursuant to the Employment Agreement, Mr. O’Grady will receive an annual base salary of $485 and will be eligible for an annual target bonus of 200% of his annual base salary. In addition, Mr. O’Grady will receive a grant of restricted stock units with a grant date value of $8,000 that settle in shares of the Company’s Class A common stock, with 25% of the restricted stock units being vested on the grant date, and the remaining vesting ratably every 3 months thereafter over a ~~four-year~~ ~~period (beginning on the first calendar day of the month following the date that is three months following the grant date).~~

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements. All statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, including statements regarding our future results of operations, including descriptions of our business plan and strategies, are forward-looking statements. These statements often include words such as “anticipate,” “expect,” “suggests,” “plan,” “believe,” “intend,” “estimates,” “targets,” “projects,” “should,” “could,” “would,” “may,” “will,” “forecast,” or the negative of these terms, and other similar expressions, although not all forward-looking statements contain these words.

The forward-looking statements and projections are subject to and involve risks, uncertainties and assumptions and you should not place undue reliance on these forward-looking statements or projections. Although we believe that these forward-looking statements and projections are based on reasonable assumptions at the time they are made, you should be aware that many factors could affect our actual financial results or results of operations and could cause actual results to differ materially from those expressed in the forward-looking statements and projections.

Important factors that may materially affect such forward-looking statements and projections include the following:

•

weak growth and increased volatility in the telehealth market;

•

our history of losses and the risk we may not achieve profitability;

•

inability to adapt to rapid technological changes;

•

our ability to successfully launch our new Converge platform without significant cost overruns or disruptions to our business and our customers’ acceptance of this new platform;

•

our limited number of significant clients and the risk that we may lose their business;

•

increased competition from existing and potential new participants in the healthcare industry;

•

changes in healthcare laws, regulations or trends and our ability to operate in the heavily regulated healthcare industry;

•

compliance with regulations concerning personally identifiable information and personal health industry;

•

slower than expected growth in patient adoption of telehealth and in platform usage by either clients or patients;

•

inability to grow our base of affiliated and non-affiliated providers sufficient to serve patient demand;

•

our ability to comply with federal and state privacy regulations and the significant liability that could result from a cybersecurity breach or our failure to comply with such regulations;

•

our ability to establish and maintain strategic relationships with third parties;

•

our ability to complete, integrate and realize the anticipated benefits of strategic acquisitions;

•

the impact of the COVID-19 pandemic on our business or on our ability to forecast our business’s financial outlook; and

•

the risk that the insurance we maintain may not fully cover all potential exposures.

•

~~weak growth and increased volatility in the telehealth market;~~

•

~~our history of losses and the risk we may not achieve profitability;~~

•

~~inability to adapt to rapid technological changes;~~

•

~~our ability to successfully launch our new Converge telehealth platform without significant cost overruns or disruptions to our business and our customers’ acceptance of this new platform;~~

•

~~our limited number of significant clients and the risk that we may lose their business;~~

•

~~increased competition from existing and potential new participants in the healthcare industry;~~

•

~~changes in healthcare laws, regulations or trends and our ability to operate in the heavily regulated healthcare industry;~~

•

~~compliance with regulations concerning personally identifiable information and personal health industry;~~

•

~~slower than expected growth in patient adoption of telehealth and in platform usage by either clients or patients;~~

•

~~inability to grow our base of affiliated and non-affiliated providers sufficient to serve patient demand;~~

•

~~our ability to comply with federal and state privacy regulations and the significant liability that could result from a cybersecurity breach or our failure to comply with such regulations;~~

•

~~our ability to establish and maintain strategic relationships with third parties;~~

•

~~our ability to complete, integrate and realize the anticipated benefits of strategic acquisitions;~~

•

~~the impact of the COVID-19 pandemic on our business or on our ability to forecast our business’s financial outlook;~~

•

~~the risk that the insurance we maintain may not fully cover all potential exposures; and~~

•

~~inability to remediate material weaknesses or maintain effective internal control over financial reporting.~~

The foregoing list of factors is not exhaustive and does not necessarily include all of the important factors that could cause actual results to differ materially from those expressed in any of our forward-looking statements. The information in this Quarterly Report should be read carefully in conjunction with other uncertainties and potential events described in our Form 10-K filed with the SEC on ~~March 26, 2021~~February 28, 2022 (the “Form 10-K”).

The forward-looking statements included in this Quarterly Report on Form 10-Q are made only as of the date of this Quarterly Report. Except as required by law or regulation, we do not undertake any obligation to update any forward-looking statements to reflect subsequent events or circumstances

~~Overview~~22

Overview

We are a leading ~~telehealth~~enterprise software company enabling digital delivery of care for healthcare’s key stakeholders. We empower our clients ~~at the enterprise level~~ with the core technology and services necessary to successfully develop and distribute ~~telehealth~~virtual care programs that meet their strategic, operational, financial and ~~social~~clinical objectives under their own brands. The Amwell Platform is a complete

digital care delivery solution that equips our health system, health plan, government, and innovator ~~including government,~~ clients with the tools to enable new models of care for their patients and members. Our scalable technology ~~embeds~~integrates with our clients’ existing offerings and clinical workflows, spanning the continuum of care and enabling care delivery across a wide variety of clinical, retail, school and home settings. Our client-focused approach drives our success as one of the largest ~~telehealth~~global digital healthcare enterprise software companies. As of ~~June 30,~~December 31, 2021, we powered the digital care programs of over 55 health plans, which ~~support over 36,000 employers and~~ collectively represent more than 80 million covered lives, as well as ~~over~~approximately 150 of the nation’s largest health systems, encompassing more than 2,000 hospitals. Since inception, we have powered over 1117.7 million telehealth visits for our clients, including ~~2.9~~more than 3.3 million in the six months ended June 30, ~~2021.~~2022.

Healthcare today faces many challenges. Choice and access can be limited, care delivery is fragmented and inefficient, and costs continue to rise and shift to consumers while health outcomes have not improved. The healthcare industry is evolving to meet these challenges with innovative care models and new regulatory frameworks to promote more effective outcomes. As healthcare’s key stakeholders demand innovative technology solutions that streamline care delivery, lower costs, expand access and improve outcomes, we believe there is significant opportunity for transformation.

We believe Amwell makes this digital care transformation possible for the healthcare ecosystem. The Amwell ~~Platform~~telehealth platform ("Amwell Platform") enables virtual and automated care delivery across the full healthcare continuum – from primary and urgent care in the home to high acuity specialty consults, such as telestroke and telepsychiatry, in the hospital. We support both on-demand and scheduled consultations and offer 40 pre-packaged care modules and programs that power over 100 unique use cases today. ~~Our platform~~The Amwell Platform can be fully ~~embedded~~integrated into our clients’ patient/member portals and provider workflows. Providers can launch telehealth directly from their native EHRs, with seamless integration to their payer eligibility and claims systems. Providers, patients and members can access this care through a full range of Carepoints^™, including via mobile, web, phone and our proprietary ~~kiosks and~~ carts that support multi-way video, phone or secure messaging interactions. Through our recent acquisitions of Conversa Health, Inc. (“Conversa”) and SilverCloud Health Holdings, Inc (“SilverCloud”) (together, the “August 2021 Acquisitions”), we enable automated care touchpoints, support ongoing treatment and care through digital engagements, and escalate care when needed to a live clinician. As of June 30, ~~2021, over 70,000~~2022, approximately 100,000 of our ~~active~~clients’ providers use the Amwell Platform to serve their patients and members. When needed, we augment and extend our clients’ clinical capabilities with ~~AMG,~~Amwell Medical Group (“AMG”), a nationwide ~~clinical~~ network of clinical entities with over ~~5,000~~6,500 multi-disciplinary providers covering 50 states with 24/7/365 coverage.

Converge™ is the latest version of the Amwell ~~exists~~Platform and is designed to ~~empower healthcare’s leading players, who have earned~~be reliable, flexible, scalable, secure and fully integrated with other healthcare software systems. Converge offers state-of-the-art data architecture and video capabilities, flexibility and scalability, and a user experience focused on the ~~deep trust~~needs of ~~their~~ patients and ~~members over decades,~~providers. Converge has been designed from the ground up with the holistic understanding that the future care of any one patient will inevitably blend a mix of physical, digital, and ~~does not~~automated experiences. The virtual care of today has grown to encompass hybrid care models, asynchronous and automated care, remote patient monitoring, patient and provider engagement — and the flow of data that drives all of the above.

With Converge, the digital care capabilities that health systems and health plans care about — for example virtual primary care, post-discharge follow-up, chronic condition management, remote patient monitoring — are aligned into a single digital care operating system that aggregates all of the data from these care experiences to provide real-time insight. By providing a single platform for the digital distribution of care, Converge will accelerate innovation and interoperability for health system and health plan clients as well as other healthcare innovators, who aim ~~to compete with or replace them. We help our clients white-label and embed telehealth within their existing healthcare offerings for their patients and members. Thus, we enable our provider customers~~ to offer a seamless experience ~~that blends online convenience when needed with in-person care by known, trusted~~for providers, ~~as part of a complete care program that offers~~ patients ~~continuity of care. In this way, providers can use our telehealth platform as an effective augmentation~~ and ~~not a replacement of their traditional care delivery.~~members.

Our Business Model

The Amwell Platform is a complete digital care delivery solution that equips our health system, health plan and innovator partners with the tools to enable new models of care for their patients and members. We sell the Amwell Platform on a subscription basis, which with our modular platform architecture allows our clients to introduce innovative ~~telehealth~~digital health use cases over time, expanding our subscription revenue opportunity. To support the Amwell Platform, we offer professional services on a fee-for-service basis and a range of patient and provider access Carepoints that support hospital and home use cases and access to AMG, our affiliated medical group that provides clinical services on a fee-for-service basis. The combination of the ~~platform,~~Platform, services and Carepoints allows our clients to deploy telehealth solutions across their full enterprise, deepening their relationships with existing and new patients and members through improved care access and coordination, cost, and quality. Our contracts are typically three years in length but may be longer for our largest strategic customer partners.

Total subscription fees received ~~from Health System, Health Plan and Innovator clients~~ were ~~$26.8~~$29.6 million and ~~$24.5~~$26.8 million for the three months ended June 30, ~~2021~~2022 and ~~2020,~~2021, respectively, and ~~$51.4~~$58.3 million and ~~$46.2~~$51.4 million for the six months ended June 30, 2022 and 2021, ~~and 2020,~~ respectively.

Health Systems

For our health system customers, the Amwell Platform’s primary function is to facilitate consultations between patients and providers affiliated with the health system. Our typical contracts with health systems are mainly the platform subscription, but also include services delivered by AMG to complement the health system provider resources, services for technology integration, marketing and Carepoints. Subscription fees are recurring and are determined based on the initial forecasted number of overall consultations throughout the entire health system on the Amwell Platform and net patient revenue of the health system. Subscriptions include a maximum number of consultations that can be delivered on the platform and similar to a cellular phone plan, when consultations exceed the contractual maximum, overages result in higher subscription fees in the following annual period. As the

health system expands its use of the Amwell Platform through additional modules, there is a corresponding increase in subscription fees.

To supplement a health system’s own network of healthcare providers, health systems often choose to purchase clinical services from AMG to deliver care for certain specialties such as telepsychiatry, behavioral health therapy and general urgent care, or to simply operate as backup providers on nights and weekends. AMG services are provided on a fee-for-service basis.

Health Plans

For our health plan clients, the Amwell Platform ~~functions to provide~~provides better access to care, better coordination of care and the ability to direct care referrals to providers owned or affiliated with the respective health plan. All of these functions lower the overall cost of care for health plan clients: improved population access to needed services reduces unneeded EDEmergency Department usage and better coordination of care can improve outcomes and lower the overall cost of care.

Currently, our typical health plan contract includes a recurring subscription fee based on the number of members who have access to ~~our platform~~the Amwell Platform plus additional subscription fees associated with the various programs we offer the health plan.

Our health plan clients mainly purchase clinical services for their members through AMG. They may also maintain relationships with other in network provider organizations to deliver care on the Amwell Platform on their behalf. These visit consultations are charged on a fee-for-service basis and range in price based on the type of consultation and the specialty of the provider.

Innovators

Amwell has a number of unique customers that use our ~~platform~~Platform in various ways to support their products. For example, we support: (i) Philips’ sleep apnea products and programs, (ii) a joint-venture with Cleveland Clinic and Amwell, (iii) Meuhedet’s advanced, hybrid-virtual international health ~~plan.~~plan and (iv) in the future, we plan to deliver virtual care capabilities delivered through Converge to LG devices and peripheral technologies within the walls of hospitals.

Our contracts with our innovator customers vary from simple subscription fee-only contracts, where an innovator customer embeds our technology within their product, to broad subscription fee and services contracts that resemble a blend of our health system and health plan profile contracts.

Visits

Amwell’s clinical affiliate AMG has built a network of over ~~5,000~~6,500 providers who are registered and credentialed to deliver care on the Amwell Platform. This clinical network is designed and operated in a way that allows us to meet the aggregate visit demand requirements of our health plan and health system clients, spanning a broad mix of specialties including, for example, internal medicine, Family Medicine, Psychiatry, Gynecology, Anesthesiology, Nutritionist, Sleep Medicine, Pain Management, Psychology, Pulmonology, Urology, Health Coach, Orthopedic Surgery, Case Manager, Emergency Medicine, Gastroenterology, Nephrology, Pediatrician, Lactation Consultant, Social Worker, Vascular Surgery.

AMG earns fee-for-service revenue for each episode of care delivered on the Amwell Platform by its providers with fees varying by physician specialty or clinical program. These clinical fees vary significantly from $59 to more than $800 per consultation or case based on the specialty and may require an additional module subscription, as in the case of telepsychiatry.

Fees received from AMG-related visits were ~~$27.5~~$29.7 million and ~~$36.0~~$27.5 million for the three months ended June 30, 2022 and 2021, respectively, and ~~2020, respectively. Fees received from AMG-related visits were $55.4~~$60.5 million and ~~$62.5~~$55.4 million for the six months ended June 30, 2022 and 2021, ~~and 2020,~~ respectively.

Services & Carepoints

We offer a full suite of paid, supporting services to our clients to enable their telehealth offerings, including professional services to facilitate telehealth implementation, workflow design, systems integration and service expansion. To help our clients promote adoption and utilization, we offer patient and provider engagement services through our internal digital engagement agency.

Our customers often deploy telemedicine through a variety of our proprietary Carepoints, which are medical carts and kiosks designed for various clinical and community settings. These Carepoints enable providers to deliver digital care into clinical care locations, such as the ED and clinics, as well as into community settings such as retail stores, community centers, employer sites, skilled nursing facilities and schools. Carepoints consist of hardware integrated into our Platform but can also be deployed

independent of our software solution. Our Carepoints are designed by our product development teams and manufactured through partner and contract relationships.

Fees received from the provision of services and Carepoints were ~~$5.9~~$5.2 million and ~~$8.1~~$5.9 million for the three months ended June 30, 2022 and 2021, respectively, and ~~2020, respectively. Fees received from the provision of services and Carepoints were $11.1~~$10.0 million and ~~$13.6~~$11.1 million for the six months ended June 30, 2022 and 2021, respectively.

Acquisitions

We have expanded and ~~2020, respectively.~~intend to continue to expand our Platform through research and development as well as the pursuit of selective acquisitions. We have completed multiple acquisitions since our inception, which we believe have expanded the channels that we serve and our distribution capabilities as well as broadening our service offering. Our acquisitions of SilverCloud and Conversa add proven longitudinal care and behavioral healthcare capabilities to our digital care enablement platform. SilverCloud is a leading digital mental health platform. Conversa is a leader in automated virtual healthcare. Acquisition costs and integration costs are an additional one time cost incurred as part of the acquisitions and investment in the future growth of the business.

Key Factors Affecting Our Performance

We believe our future growth, success and performance are dependent on many factors, including those set forth below. While these factors present significant opportunities for us, they also represent the challenges that we must successfully address in order to grow our business and improve our results of operations.

Telehealth Utilization

Telehealth utilization is a key driver of our business. A client’s overall utilization of its telehealth platform provides an important measure of the value they derive. Telehealth utilization drives our business in three important ways. First, to the extent a client succeeds with its telehealth program and sees good usage, they are more likely to renew and potentially expand their contract with us. Second, our health systems agreements typically include a certain number of visits conducted by their own providers annually and provide that as certain volume thresholds are exceeded, its annual license fees will rise to reflect this growing value. Third, to the extent that clients utilize provider services from AMG, Amwell derives revenue from clinical fees. We expect that our future revenues will be driven by the growing adoption of telehealth and our ability to maintain and grow market share within that market.

COVID-19 has dramatically accelerated telehealth adoption seen in both overall volumes and embracement of delivering higher acuity care in a virtual medium. Peak COVID-19 pandemic visit growth reflected several factors. Many patients needed assessment for respiratory or other COVID-19-like symptoms and sought to be assessed for possible referral to hospital or testing facilities. In addition, many patients, especially those with health vulnerabilities, sought to avoid going into brick and mortar facilities – and indeed our health systems’ clients preferred wherever possible to treat patients remotely at home for non-COVID-19 related ongoing healthcare needs. Finally, we saw significant expansion of reimbursement for telehealth during the COVID-19 crisis, which made telehealth more affordable for many people.

We continue to experience these levels of telehealth adoption and usage of our ~~platform~~Platform and products. In ~~both~~ the six months ended June 30, ~~2021 and 2020,~~2022, our clients completed ~~2.9~~a total of 3.3 million visits on the Amwell ~~Platform. Visits in the six months ended June 30, 2020 were driven by the height of the COVID-19 pandemic~~Platform, while ~~visits~~ in the six months ended June 30, 2021 2.9 million visits were ~~driven by expanded utilization of the platform evident by a larger number of clients’ own~~completed. AMG providers ~~using the Amwell Platform. During the six months ended June 30, 2021 our clients’ own providers performed over 77% of the total visits performed on the Amwell Platform versus 70%~~accounted for 23% of total visits performed on the Amwell Platform during the six months ended June 30, ~~2020. Comparatively, throughout 2019~~2022 and 2021, respectively. We demonstrated that virtual care goes beyond urgent care pandemic needs through ~~February 2020, or pre-COVID-19, clients’ own providers delivering care represented 40% whereas AMG providers typically performed more than 60% of~~ the ~~total overall~~increase in scheduled visits. Scheduled visits onincreased to 2.4 million from 2.1 million during the ~~Amwell Platform.~~ six months ended June 30, 2022 and 2021, respectively.


Total Overall Quarterly Visits	Total Overall Quarterly Visits						Total Overall Quarterly Visits
Quarter Ended		Overall Visits		Performed by Customer Providers				Overall Visits		Performed by Customer Providers
June 30, 2022									1,525,000		76	%
March 31, 2022									1,775,000		78	%
December 31, 2021									1,525,000		75	%
September 30, 2021									1,425,000		75	%
June 30, 2021			1,300,000		75	%			1,300,000		75	%
March 31, 2021			1,575,000		80	%			1,575,000		80	%
December 31, 2020			1,550,000		75	%
September 30, 2020			1,400,000		75	%
June 30, 2020			2,200,000		75	%
March 31, 2020			725,000		50	%

Active Providers

An important indicator of the value of our Amwell Platform to our clients is the number of non-AMG providers that are active on the Amwell Platform. We define “Active Providers” as providers that have delivered a visit on the Amwell Platform at least once in the last 12 months. Active Providers demonstrate the prevalence of telehealth within our clients in both home and hospital

environments. We believe Active Providers is a measure of our success in delivering on our mission of enabling access to care. We expect that the overall number of Active Providers will increase over time as a result of several factors:

•

the ~~number of modules and use cases deployed within health systems~~

•

~~the adoption of telehealth by providers across the spectrum of care~~

•

~~the number of programs offered through health plans~~

•

~~the continued improvement in the regulatory environment for telehealth, including reimbursement for telehealth services~~

•

~~the ongoing consumerization of healthcare~~

~~A significant~~ number of modules and use cases deployed within health systems

We ~~continue~~continued to experience growth in core ~~active providers but are expecting a reset period~~Active Providers in the current quarter, in which approximately 12,000 Active Providers were added to the ~~core base in Q2~~Amwell Platform all coming from our Health System and ~~Q3 of 2021~~Health Plan customers.

Our operations are subject to comprehensive United States federal, state and local and international regulation in the jurisdictions in which we do business. Our ability to operate profitably will depend in part upon our ability, and that of our affiliated providers, to maintain all necessary licenses and to operate in compliance with applicable laws and rules. The COVID-19 pandemic has resulted in a reduction of regulatory and reimbursement barriers for telehealth, including removing the originating site restrictions for fee for service Medicare; the expansion of Medicare and commercial reimbursement for telehealth and an easing of state licensure policies for providers. However, it is uncertain how long the relaxed policies will remain in effect, and there can be no guarantee that once the COVID-19 pandemic is over that such restrictions will not be reinstated or changed in a way that adversely affects our business. ~~For additional discussion of this factor, see “Item 1A. Risk Factors—Risks Related to Government Regulation.”~~

Visit volumes typically follow the annual flu season, rising during quarter four and quarter one and falling in the summer months. COVID-19 has altered these historical trends as the precautions being taken to prevent the spread of COVID-19 have essentially flattened the spike traditionally experienced related to the flu season. The future impact of COVID-19 on seasonality is unknown as there could be additional surges and demand on telehealth visits. While we sell to and implement our solutions to clients year-round, we experience some seasonality in terms of when we enter into agreements with our clients and when we launch our solutions to members.

In addition to our financial results determined in accordance with GAAP, we believe adjusted EBITDA, a non-GAAP measure, is useful in evaluating our operating performance. We use adjusted EBITDA to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that this non-GAAP financial measure, when taken together with the corresponding GAAP financial measures, provides meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our business, results of operations or outlook. In particular, we believe that the use of adjusted EBITDA is helpful to our investors as it is a metric used by management in assessing the health of our business and our operating performance. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. In addition, other companies, including companies in our industry, may calculate similarly-titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measure as a tool for comparison. A reconciliation is provided below for our non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP. Investors are encouraged to review the related GAAP financial measure and the reconciliation of this non-GAAP financial measure to their most directly comparable GAAP financial measures, and not to rely on any single financial measure to evaluate our business.

Adjusted EBITDA is a key performance measure that our management uses to assess our operating performance. Because adjusted EBITDA facilitates internal comparisons of our historical operating performance on a more consistent basis, we use this measure for business planning purposes and in evaluating acquisition opportunities.

We calculate adjusted EBITDA as net loss adjusted to exclude (i) interest income and other income, net, (ii) tax benefit and expense, (iii) depreciation and amortization, (iv) stock-based compensation expense, (v) public offering expenses, (vi) acquisition-related ~~income and~~ expenses, (vii) litigation expenses related to the defense of our patents in the patent infringement claim filed by Teladoc and (viii) other items affecting our results that we do not view as representative of our ongoing operations, including ~~direct~~noncash compensation costs incurred by selling shareholders and ~~incremental expenses associated with~~adjustments made to the ~~COVID-19 pandemic. We had no such other items during the three and six months ended June 30, 2021 and 2020.~~contingent consideration.

The following table presents a reconciliation of adjusted EBITDA from the most comparable GAAP measure, net loss, for the three and six months ended June 30, ~~2021~~2022 and ~~2020:~~2021:

Some of the limitations of adjusted EBITDA include (i) adjusted EBITDA does not properly reflect capital commitments to be paid in the future, and (ii) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and adjusted EBITDA does not reflect these capital expenditures. Our public offering ~~and acquisition-related~~ expenses, including legal, accounting and other professional expenses, reflect cash expenditures and we expect such expenditures ~~for acquisitions~~ to recur from time to time. Our adjusted EBITDA may not be comparable to similarly titled measures of other companies because they may not calculate adjusted EBITDA in the same manner as we calculate the measure, limiting its usefulness as a comparative measure. In evaluating adjusted EBITDA, you should be aware that in the future we will incur expenses similar to the adjustments in this presentation. Our presentation of adjusted EBITDA should not be construed as an inference that our future results will be unaffected by these expenses or any unusual or non-recurring items. Adjusted EBITDA should not be considered as an alternative to loss before benefit from income taxes, net loss, earnings per share, or any other performance measures derived in accordance with U.S. GAAP. When evaluating our performance, you should consider adjusted EBITDA alongside other financial performance measures, including our net loss and other GAAP results.

The Company has demonstrated continued revenue growth as a direct result increasing acceptance of telehealth, our penetration of the market, and the successful launch of new ~~product enabling~~or expanded products that enable broadened applications of settings for care delivered virtually.

Revenue performance is reflective of the strong foundation that has been built, focused around health plans, health systems, our provider network and a consistently increasing visit base.

We generate revenues from the use of the Amwell Platform in the form of recurring subscription fees for use of our ~~platform,~~Platform, and related services and Carepoint sales. We also generate revenue from the performance of AMG patient visits.

Cost of revenue primarily consists of hosting fees paid to our hosting providers, costs incurred in connection with our professional services, technical and hosting support, and costs for running our affiliated provider network operations team. These costs primarily include employee-related expenses (including salaries, bonuses, benefits, stock-based compensation and travel).

Cost of revenues are primarily driven by the size of our provider network and the hosting and technical support required to service our ~~platform~~Platform customers. Our business models are designed to be scalable and to leverage fixed costs to generate higher revenues. While we currently expect increased investments to support accelerated growth, we also expect increased efficiencies and economies of scale. Our quarterly cost of revenues as a percentage of revenues is expected to fluctuate from period to period depending on the interplay of these aforementioned factors.

Operating expenses consist of research and development, sales and marketing, and general and administrative expenses.

Research and development expenses include personnel and related expenses for software and hardware engineering, information technology infrastructure, security and compliance and product development (inclusive of stock-based compensation for our research and development employees). Research and development expenses also include the periodic outsourcing of similar functions to third party specialists. Due to the quarantine and isolation strategies employed by governmental authorities, health systems and health plans to deal with the COVID-19 pandemic, a significant portion of healthcare was forced to be delivered virtually. Our health plan and health system customers believe that overall utilization of telemedicine and care delivered virtually will continue to increase during and after the COVID-19 crisis. By partnering with our customers during the crisis, we understand the increased volume and additional types of care they intend to deliver virtually on ~~our platform.~~the Amwell Platform. We originally expected this increase in volume, evolution and advancement of telemedicine usage to occur over the next few years but we have now adjusted our research and development strategies to match the views of our customer partners, thus accelerating the expansion of our ~~platform~~Platform volume capacity and the development of additional functionality through new programs and modules. We have also expanded the use of offshore resources to provide more efficient rates which are designed to offset the increased research and development spend. While an increase in the research and development expense is expected in the near-term future periods, the corresponding future revenue growth is expected to result in lower expenses as a percentage of revenue. Further, while we expect to see an increase in research and development expense during the next several quarters, this expense represents an investment in a more scalable and economically beneficial solution. We believe the temporary increase will properly position the Company to benefit in the long term.

Our research and development expenses may also fluctuate as a percentage of our total revenue from period to period due to the seasonality of our total revenue and the timing and extent of our research and development expenses. We are accelerating our multiyear technology investment ~~in 2021~~ to accommodate the anticipated significant growth in market demand for increasingly broad and sophisticated telehealth enablement infrastructure following COVID-19.

Sales expenses consist primarily of employee-related expenses, including salaries, benefits, commissions, travel and stock-based compensation costs for our employees engaged in sales. We expect our sales expenses to increase as we continue to invest in the expansion of our business. We expect to hire additional sales personnel and related account management and sales support personnel to properly service our growing client base and to identify and capitalize on new strategic market opportunities.

Marketing expenses consist primarily of personnel and related expenses (inclusive of stock-based compensation) for our marketing staff, including costs of communications materials that are produced to generate greater awareness and utilization of ~~our platform~~the Amwell Platform among our clients and their users. Marketing costs also include third-party independent research, participation in trade shows, brand messaging, and public relations costs.

Our sales and marketing expenses will fluctuate as a percentage of our total revenue from period to period due to the seasonality of our total revenue and the timing and extent of our advertising and marketing expenses.

General and administrative expenses include personnel and related expenses, and professional fees incurred by finance, legal, human resources, information technology, our executives, and executive administration staff. They also include stock-based compensation for employees in these departments and expenses related to auditing, consulting, legal, and corporate insurance.

We expect our general and administrative expenses to increase for the foreseeable future ~~due to costs that~~as we ~~incur as a new public company, as well as other costs associated with continuing~~continue to grow our business. However, we expect our general and administrative expenses to decrease as a percentage of our total revenue over the next several years. Our general and administrative expenses may fluctuate as a percentage of our total revenue from period to period due to the seasonality of our total revenue and the timing and extent of our general and administrative expenses.

Depreciation and amortization expense includes the amortization of intangible assets and depreciation related to our fixed assets. Amortization of intangible assets consists of the amortization of acquisition-related intangible assets, which are customer relationships, contractor relationships, technology and trade names.

The balance of interest income and other income (expense), net, consists predominantly of interest income on our money-market and short-term investments. We did not incur material interest expenses in the period as there were no outstanding debts or notes payables.

The income tax provision and benefit were primarily due to state and foreign income tax ~~expense.~~expense, and benefit related to release of the valuation allowance as a result of our acquisitions.

Deferred tax assets are reduced by a valuation allowance to the extent management believes it is not more likely than not to be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income. Management makes estimates and judgments about future taxable income based on assumptions that are consistent with our plans and estimates.

The following table sets forth our summarized condensed consolidated statement of operations data for the three and six months ended June 30, ~~2021,~~2022 and ~~2020~~2021 and the dollar and percentage change between the respective periods:


	Three Months Ended June 30,												Six Months Ended June 30,												Three Months Ended June 30,												Six Months Ended June 30,
(in thousands)	2021			2020			Change			%			2021			2020			Change			%			2022			2021			Change			%			2022			2021			Change			%
Revenue	$	60,217		$	68,568		$	(8,351	)		-12	%	$	117,816		$	122,282		$	(4,466	)		-4	%	$	64,516		$	60,217		$	4,299			7	%	$	128,748		$	117,816		$	10,932			9	%
Costs and operating expenses:
Costs of revenue, excluding depreciation and amortization of intangible assets		33,889			43,826			(9,937	)		(23	)%		69,594			76,853			(7,259	)		(9	)%		36,497			33,889			2,608			8	%		73,262			69,594			3,668			5	%
Research and development		22,378			17,637			4,741			27	%		45,418			32,573			12,845			39	%		37,067			22,378			14,689			66	%		74,548			45,418			29,130			64	%
Sales and marketing		14,789			12,346			2,443			20	%		28,521			26,220			2,301			9	%		18,721			14,789			3,932			27	%		39,875			28,521			11,354			40	%
General and administrative		24,212			80,082			(55,870	)		(70	)%		45,566			95,424			(49,858	)		(52	)%		34,911			24,212			10,699			44	%		67,627			45,566			22,061			48	%
Depreciation and amortization expense		2,484			2,509			(25	)		(1	)%		4,990			4,795			195			4	%		6,724			2,484			4,240			171	%		13,322			4,990			8,332			167	%
Total costs and operating expenses		97,752			156,400			(58,648	)		(37	)%		194,089			235,865			(41,776	)		(18	)%		133,920			97,752			36,168			37	%		268,634			194,089			74,545			38	%
Loss from operations		(37,535	)		(87,832	)		50,297			(57	)%		(76,273	)		(113,583	)		37,310			(33	)%		(69,404	)		(37,535	)		(31,869	)		85	%		(139,886	)		(76,273	)		(63,613	)		83	%
Interest income and other income (expense), net		224			308			(84	)		(27	)%		285			1,155			(870	)		(75	)%
Interest income and other (expense) income, net																										764			224			540			241	%		872			285			587			206	%
Loss before expense from income taxes and loss from equity method investment		(37,311	)		(87,524	)		50,213			(57	)%		(75,988	)		(112,428	)		36,440			(32	)%		(68,640	)		(37,311	)		(31,329	)		84	%		(139,014	)		(75,988	)		(63,026	)		83	%
Expense from income taxes		(103	)		(252	)		149		(N/A)				(412	)		(252	)		(160	)		63	%
Benefit (Expense) from income taxes																										(461	)		(103	)		(358	)		348	%		(129	)		(412	)		283			(69	)%
Loss from equity method investment		(722	)		(444	)		(278	)		63	%		(1,541	)		(764	)		(777	)	N/A				(551	)		(722	)		171			(24	)%		(762	)		(1,541	)		779			(51	)%
Net loss		(38,136	)		(88,220	)		50,084			(57	)%		(77,941	)		(113,444	)		35,503			(31	)%		(69,652	)		(38,136	)		(31,516	)		83	%		(139,905	)		(77,941	)		(61,964	)		80	%
Net loss attributable to non-controlling interest		(277	)		(1,562	)		1,285			(82	)%		(894	)		(2,405	)		1,511			(63	)%		(507	)		(277	)		(230	)		83	%		(723	)		(894	)		171			(19	)%
Net loss attributable to American Well Corporation	$	(37,859	)	$	(86,658	)	$	48,799			(56	)%	$	(77,047	)	$	(111,039	)	$	33,992			(31	)%	$	(69,145	)	$	(37,859	)	$	(31,286	)		83	%	$	(139,182	)	$	(77,047	)	$	(62,135	)		81	%

For the three months ended June 30, ~~2021, the decrease in~~2022, subscription revenue increased by $2.8 million. Subscription revenue increase was ~~substantially~~ driven by ~~a decrease~~the expanded use of the Amwell Platform by existing customers. In addition, visit revenue increased by $2.4 million due to increased visit volume in ~~visit revenue. Visit revenue earned from AMG patient visits decreased by $8.5 million, or 24%, from $36.0 million in~~urgent care, primarily associated with the ~~three~~Omicron variant.

For the six months ended June 30, 2020 to $27.5 million in the three months ended June 30, 2021. The decrease was primarily driven by reduced visit volume versus the height of the COVID-19 pandemic experienced in the second quarter of 2020, but was slightly offset by the overall increased utilization of telemedicine as a part of now normal delivery of healthcare. The decrease in visit revenue was offset by an increase in2022, subscription revenue ~~from $24.5 million for the three months ended June 30, 2020 to $26.8 million during the three months ended June 30, 2021, an increase of 2.3 million, or 9%. Subscription revenue grew as~~increased by $6.9 million. This was a result of new customers subscribing to the ~~platform~~Amwell Platform and existing customers expanding their use of the ~~platform through increasing the number of members they provided access~~Amwell Platform. In addition, visit revenue increased by $5.1 million due to ~~the platform,~~ increased ~~number of programs, increased modules and increased volume of care delivered on our platform by our customers’ own providers.~~

For the six months ended June 30, 2021, the decrease in revenue was substantially driven by a decrease in visit revenue. Visit revenue earned from AMG patient visits decreased by $7.1 million, or 11%, from $62.5 million in the six months ended June 30, 2020 to $55.4 million in the six months ended June 30, 2021. As stated above, the decrease was primarily driven by reduced visit volume ~~versus~~in urgent care, primarily associated with the height of the COVID-19 pandemic experienced in the second quarter of 2020, but was slightly offset by the overall increased utilization of telemedicine as a part of now normal delivery of healthcare. The decrease in visit revenue was offset by an increase in subscription revenue from $46.2 million for the six months ended June 30, 2020 to $51.4 million during the six months ended June 30, 2021, an increase of 5.2 million, or 11%. Subscription revenue grew as a result of new customers subscribing to the platform and existing customers expanding their use of the platform through increasing the number of members they provided access

Omicron variant.~~to the platform, increased number of programs, increased modules and increased volume of care delivered on our platform by our customers’ own providers.~~

For the three months ended June 30, ~~2021,~~2022, the ~~decrease~~increase in cost of revenue was primarily due to ~~a decrease~~an increase of ~~$6.5~~$1.3 million ~~in provider~~ related to employee-related costs due to ~~decreased visit volumes. The decrease~~increased headcount. There was also an increase in visit volume also resulted in the need to utilize a lower level of non-clinical contractor resources to properly service visit demand. The Company also experienced a $1.7 million and $2.0 million decrease in employee costs and hardware costs ~~respectively.~~ of $0.4 million.

For the six months ended June 30, ~~2021,~~2022, the ~~decrease~~increase in cost of revenue was primarily due to ~~a decrease~~an increase of ~~$5.5~~$2.2 million ~~in provider~~ related ~~costs, with some portion of these provider~~to employee-related costs due to ~~decreased visit volumes. The decrease~~increased headcount. There was also an increase in ~~visit volume also resulted in the need~~provider costs of $0.7 million due to ~~utilize a lower level of non-clinical contractor resources to properly service visit demand. The Company also experienced a $2.2 million decrease in hardware costs.~~increased visits.

For the three months ended June 30, ~~2021,~~2022, the increase in research and development expense was primarily driven by an increase of ~~$3.4~~$9.9 million in consulting services for Converge and $4.0 million in employee-related costs (inclusive of stock compensation expense)~~. The~~ due to increased headcount.

For the six months ended June 30, 2022, the increase in research and development expense was further driven by a $1.9 million increase in consulting services primarily driven by increased spend related to our new Converge telehealth platform. For the six months ended June 30, 2021, the increase was primarily driven by an increase of ~~$7.8~~$20.3 million in consulting services for Converge and $7.1 million in employee-related costs (inclusive of stock compensation expense)~~. The increase in research and development expense was further driven by a $5.6 million increase in consulting services primarily driven by~~ due to increased ~~spend related to our new Converge telehealth platform.~~headcount.

For the three months ended June 30, ~~2021,~~2022, the increase in sales and marketing expense primarily consisted of ~~$1.9~~$2.0 million in employee-related costs (inclusive of commissions and stock compensation expense). due to increased headcount. There was also an increase of $0.7 million related to company meetings that did not occur in the prior year and consulting expense of $0.8 million mainly related to marketing ~~expenses of $0.4 million.~~ campaigns and services for system integration.

For the six months ended June 30, ~~2021,~~2022, the increase in sales and marketing expense primarily consisted of ~~$3.9~~$5.2 million in employee-related costs (inclusive of commissions and stock compensation expense)~~. The~~ due to increased headcount. There was also an increase ~~was offset by reduced travel expenses of $0.6million and reduced~~in marketing expenses of ~~$0.4 million.~~$2.1 million related to conferences and an increase of $1.1 million related to company meetings that did not occur in the prior year. In addition there was an increase in consulting expense of $1.9 million mainly related to marketing campaigns and services for system integration.

For the three months ended June 30, ~~2021,~~2022, the ~~decrease~~increase in general and administrative expense was driven by ~~a decrease in stock-based compensation expense of $59.8million (predominantly~~an increase related to employee-related costs (inclusive of $4.5 million of stock compensation expense) of approximately $7.4million, due to additional equity awards granted in 2022 and headcount increase. There was also a $3.8million increase in legal costs mainly due to the ~~co-CEOs). The decrease~~fees paid for the Teladoc litigation.

For the six months ended June 30, 2022, the increase in general and administrative expense was ~~offset~~driven by an increase related to employee-related costs ~~(excluding~~(inclusive of $7.5 million of stock compensation expense) of approximately ~~$0.7~~$14.4 ~~million. The decrease~~million, due to additional equity awards granted in ~~general~~March and ~~administrative expenses~~May 2022 and headcount increase. There was ~~offset by~~also a ~~$1.9~~$3.5 million increase in ~~insurance~~legal costs mainly due to the fees paid for ~~our directors and officers and $0.9~~the Teladoc litigation. There was an increase of $1.8 million ~~in increased legal costs. The decrease in general and administrative expenses was further offset by a $1.2million increase~~ in system costs to enhance administrative processing. ~~For the six months ended June 30, 2021, the decrease~~In addition, there was ~~driven by a decrease~~an increase in ~~stock-based compensation expense~~contingent consideration adjustments recorded of ~~$58.0~~$1.0 million ~~(predominantly~~ related to ~~awards granted to~~ the ~~co-CEOs). The decrease was offset by increases related to employee-related costs (excluding stock compensation expense) of approximately $0.9million. The decrease in general~~Conversa and ~~administrative expenses was further offset by a $3.8~~SilverCloud revenue earnouts.~~million increase in insurance costs for our directors and officers and $2.2million in increased legal costs. The decrease in general and administrative expenses was further offset by a $1.6~~million increase in system costs to enhance administrative processing. General and administrative expenses are expected to continue to increase (in absolute dollars) in future periods as we continue to grow in size and complexity while at the same time recognizing the full year impact of the regulatory and compliance costs associated with being a publicly traded company.

Depreciation ~~expense and amortization~~ expense remained consistent for the three months ended June 30, ~~2021. Depreciation~~2022. Amortization expense increased by ~~$0.2~~$4.4 million ~~and~~for the three months ended June 30, 2022. The increase in amortization was related to the intangible assets acquired in 2021.

Depreciation expense remained consistent for the six months ended June 30, 2022. Amortization expense increased by $8.7million six months ended June 30, 2022. The increase in amortization was related to the intangible assets acquired in 2021.

For the three and six months ended June 30, ~~2021~~2022 and ~~2020,~~2021, interest income and other ~~expenses~~(expense) income, net consist entirely of interest income and gains from our cash equivalents and short-term investments.

Income tax expense was $0.5 million and $0.1 million for the three ~~months ended June 30, 2021, compared to $0.3 million for the three months ended June 30, 2020. Income tax expense was $0.4 million for the~~and six months ended June 30, ~~2021,~~2022, compared to ~~$0.3~~income tax expense of $0.1 million and $0.4 million for the three and six months ended June 30, ~~2020.~~2021.

The Company and Cleveland Clinic partnered to form a joint venture, under the name CCAW, JV LLC, to provide broad access to comprehensive and high acuity care services via telehealth. The Company does not have a controlling financial interest in CCAW, JV LLC, but it does have the ability to exercise significant influence over the operating and financial policies of CCAW, JV LLC. Therefore, the Company accounts for its investments in CCAW, JV LLC using the equity method of accounting.

During the three months ended June 30, ~~2021~~2022 and ~~2020,~~2021, the Company recognized a loss of ~~$0.7~~$0.6 million and ~~$0.4~~$0.7 million, respectively, as its proportionate share of the joint venture results of operations. During the six months ended June 30, ~~2021~~2022 and ~~2020,~~2021, the Company recognized a loss of ~~$1.5~~$0.8 million and ~~$0.8~~$1.5 million, respectively, as its proportionate share of the joint venture results of operations.

The following table presents a summary of our cash flow activity for the periods set forth below:

Our principal sources of liquidity were cash, cash equivalents and short-term investments totaling ~~$975.2~~$630.1 million and ~~$1,041.6~~$746.4 million as of June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively, which were held for a variety of growth initiatives and investments as well as working capital purposes. Our cash, cash equivalents and short-term investments are comprised of money market funds and marketable securities including U.S. Treasury bills.

In September 2020, we received net proceeds of $767.6 million associated with the issuance of 45,681,499 shares of Class A common stock from our IPO, after deducting underwriting discounts and commissions of $49.3 million and offering costs of approximately $4.9 million. In conjunction with the IPO, we closed on the Google LLC private placement and issued 5,555,555 shares of Class C common stock for proceeds of $99.1 million, net of offering costs of $0.9 million.

~~Prior to our IPO, the Company funded its operations primarily through private placements of its convertible preferred stock as well as through revenues generated through customer contracts.~~

As shown in the accompanying condensed consolidated financial statements, the Company incurred a loss from operations of ~~$76.3~~$139.9 million and a net loss of ~~$77.9~~$139.9 million for the six months ended June 30, ~~2021~~2022 and had an accumulated deficit of ~~$708.6~~$950.5 million as of June 30, ~~2021.~~2022.

The Company has no debt as of June 30, ~~2021~~2022 or December 31, ~~2020~~2021 and expects to generate operating losses in future years.

We believe that our existing cash and cash equivalents will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months from the issuance date of the financial statements. Our future capital requirements will depend on many factors including our growth rate, contract renewal activity, number of consultations on our ~~platform,~~Platform, the timing and extent of spending to support product development efforts, our expansion of sales and marketing activities, the introduction of new and enhanced services offerings, and the continuing market acceptance of telehealth services. We may in the future enter into arrangements to acquire or invest in complementary businesses, services and technologies and intellectual property rights. We may be required to seek additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, financial condition and results of operations would be adversely affected.

In January 2011, the Company entered into a credit agreement (the “Line of Credit”) with a financial institution that provides for maximum borrowings in one or more advances of an amount up to $5.0 million. Borrowings under the Line of Credit accrue interest at the London Interbank Offered Rate plus 1.25%. Borrowings are repayable immediately upon demand by the financial institution. In November 2017, the Line of Credit was amended to increase the maximum borrowings to $7.0 million. As of June 30, 2021 and December 31, 2020, the Company had no outstanding borrowings under the Line of Credit.

During any period that the Line of Credit is in effect, the Company can request the financial institution issue a letter of credit with a maximum maturity not to exceed twelve months. Any letters of credit issued by the financial instrument reduce the maximum borrowings available under the Line of Credit. As of June 30, 2021 and December 31, 2020, the maximum borrowing available to the Company was $6.2 million and $5.9 million based on the outstanding letters of credit of $0.8 million and $1.1 million that have been issued by the financial institution.

Six months ended June 30, ~~2021,~~2022, vs. six months ended June 30, ~~2020~~2021

For the six months ended June 30, 2022, cash used in operating activities was $105.4 million. The primary driver of this use of cash was our net loss of $139.9 million. The net loss was reflective of the investments made back into the Company (from a technology perspective), partially offset by the overall growth of our business including expansion of business with existing clients. The net loss was partially offset by non-cash expenses of $45.1 million (primarily stock-based compensation of $27.6 million and depreciation and amortization of $13.1 million).

For the six months ended June 30, 2021, cash used in operating activities was $67.4 million. The primary driver of this use of cash was our net loss of $77.9 million. The net loss for the year was reflective of the investments made back into the Company (from both a personnel and technology perspective), partially offset by the overall growth of our business including an increase in new clients and expansion of business with existing clients. The net loss was partially offset by non-cash expenses of $26.9 million (primarily stock-based compensation of $19.4 million and depreciation and amortization of $5.0 million).

Cash used in investing activities was $376.3 million for the six months ended June 30, ~~2020, cash~~2022. Cash used in ~~operating~~investing activities ~~was $57.8 million. The primary driver~~consisted of ~~this use~~$2.0 million investment in the less than majority owned joint venture, $0.1 million in the purchases of ~~cash was our net loss~~property and equipment and purchases of ~~$113.4 million. The net loss for the year was reflective~~short-term investments of ~~the expenses incurred with our response to COVID-19 and our continued investments made back into the Company’s infrastructure,~~$499.2 million, partially offset by ~~the revenue growth discussed above. The net loss was partially offset by non-cash expenses~~sales and maturities of ~~$79.4 million (primarily stock-based compensation~~investments of ~~$72.1 million and depreciation and amortization of $4.8 million).~~$125.0 million.

Cash provided by investing activities was $97.2 million for the six months ended June 30, 2021. Cash provided by investing activities consisted of proceeds from maturities of investments of $100.0 million, partially offset by a $2.5 million investment in the CCAW, JV LLC joint venture with Cleveland Clinic and $0.3 million in the purchases of property and equipment.

Cash used in financing activities ~~was $4.3 million~~ for the six months ended June 30, ~~2020.~~2022, was $5.5 million. Cash ~~provided by investing~~used in financing activities consisted of ~~$39.4~~$11.8 million inrelated to the payment of the Conversa integration earnout, partially offset by $6.0 million of proceeds from the ~~maturities~~exercise of ~~investments, offset by $29.8 million in purchases of investments. Further, cash used in investing activities included a $2.9 million investment in the CCAW, JV LLC joint venture with Cleveland Clinic~~employee stock options and ~~$2.3 million in the purchases of property and equipment.~~employee stock purchase plan.

Cash provided by financing activities for the six months ended June 30, 2021, was $3.5 million. Cash provided by financing activities consisted of $16.7 million of proceeds from the exercise of employee stock options. These proceeds were offset by cash payments primarily for the purchase of treasury stock of $11.6 million.

Cash provided by financing activities for the six months ended June 30, 2020, was $148.5 million. Cash provided by financing activities consisted of $146.8 million of cash proceeds from our issuance of Series C Convertible Preferred Stock, net of issuance costs.

During the periods presented, we did not have, nor do we currently have, any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. We are therefore not exposed to the financing, liquidity, market or credit risk that could arise if we had engaged in those types of relationships.

As of June 30, ~~2021,~~2022, there have been no material changes from the contractual obligations and commitments previously disclosed in our Form 10-K.

Our condensed consolidated financial statements and the related notes thereto are prepared in accordance with GAAP. The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. The Company bases its estimates on historical experience, current business factors, and various other assumptions that the Company believes are necessary to consider to form a basis for making judgments about the carrying values of assets and liabilities, the recorded amounts of revenue and expenses, and the disclosure of contingent assets and liabilities. The Company is subject to uncertainties such as the impact of future events, economic and political factors, and changes in the Company’s business environment; therefore, actual results could differ from these estimates. Accordingly, the accounting estimates used in the preparation of the Company’s condensed consolidated financial statements will change as new events occur, as more experience is acquired, as additional information is obtained, and as the Company’s operating environment evolves.

Our significant accounting policies are discussed in Note 2, Summary of Significant Accounting Policies, to our condensed consolidated financial statements in our Form 10-K and Note 2, Summary of Significant Accounting Policies to our condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q. There have been no significant changes to these policies during the six months ended June 30, ~~2021.~~2022.

For more information on recently issued accounting pronouncements, see Note 2 to our condensed consolidated financial statements covered under Part I, Item 1 of this Quarterly Report on Form 10-Q.

For more information on new accounting pronouncements not yet adopted, see Note 2 to our condensed consolidated financial statements covered under Part I, Item 1 in this Quarterly Report on Form 10-Q.

We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it is (i) no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

We had cash and cash equivalents totaling ~~$975.2~~$257.2 million, and ~~$941.6~~$746.4 million as of June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. The Company also held investments totaling ~~$0 million and $100.0~~$372.9 million as of June 30, ~~2021, and~~2022 . The Company held no investments as of December 31, ~~2020, respectively.~~2021. These amounts were primarily invested in money markets and U.S. Treasury bills. The cash and cash equivalents are held for a variety of growth and investments as well as working capital purposes. Our investments are made for capital preservation purposes. We do not enter into investments for trading or speculative purposes. All our investments are denominated in U.S. dollars.

We do not believe that an increase or decrease of 100 basis points in interest rates would have a material effect on our business, financial condition or results of operations. However, our cash equivalents are subject to market risk due to changes in interest rates. Fixed rate securities may have their market value adversely affected due to a rise in interest rates. Due in part to these factors, our future investment income may fall short of expectation due to changes in interest rates or we may suffer losses in principal if we are forced to sell securities that decline in market value due to changes in interest rates.

Fluctuations in the value of our money market funds caused by a change in interest rates (gains or losses on the carrying value) are recorded in other income and are realized only if we sell the underlying securities.

To date, a substantial majority of our revenue from customer arrangements has been denominated in U.S. dollars. We have limited operations outside the United States. As of June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, we had four foreign subsidiaries with functional currencies of the Euro, British pound, Australian dollars and New Israeli Shekel. As of June 30, 2021 the Company had one foreign ~~subsidiary. The~~subsidiary in Israel, the functional currency of ~~our foreign~~that subsidiary is the U.S. ~~dollar. The~~dollar, and Company ~~also has~~had a branch with a functional currency of the New Israeli ~~Shekel, however~~Shekel. The activity for these entities in the ~~New Israeli Shekel is~~six months ended June 30, 2022 and 2021 was not considered significant. Accordingly, we believe we do not have a material exposure to foreign currency risk. We may choose to focus on international expansion, which may increase our exposure to foreign currency exchange risk in the future.

We do not believe that inflation had a material effect on our business, financial condition or results of operations in the last two years. If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition or results of operations.

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of ~~Disclosure Controls~~achieving the desired control objectives and ~~Procedures~~management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Our management, with the participation of our principal executive officers and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our principal executive officers and principal financial officer concluded that as of June 30, 2022, our disclosure controls and procedures were effective. Disclosure controls and procedures ~~refer to~~are our controls and other procedures that are designed to ensurethat information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and to provide reasonable assurance that such information is accumulated and communicated to our management, including our principal executive officers and principal financial officer, as appropriate, to allow timely decisions regarding required ~~financial disclosure~~.disclosure.

Based on this evaluation, our principal executive officers and principal financial officer concluded that our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknessesThere have been no changes in our ~~internal control over financial reporting, as further described below:~~

We ~~concluded that certain material weaknesses in our internal control over financial reporting are still present as of June 30, 2021.~~ ~~The material weaknesses~~ ~~present~~ are as follows: We did not maintain an effective control environment as we did not maintain a sufficient complement of accounting and financial reporting resources commensurate with our financial reporting requirements. This material weakness contributed to the following material weaknesses:

These control deficiencies did not result in errors that were material to our annual or interim financial statements. However, these control deficiencies could result in a misstatement in our accounts or disclosures that would result in a material misstatement to the financial statements that would not be prevented or detected. Accordingly, we determined that these control deficiencies constitute material weaknesses.

We are in the process of implementing measures designed to improve our internal control over financial reporting and remediate the control deficiencies that led to the material weaknesses. As of June 30, 2021, we have completed the following remedial actions:

We have made significant progress towards remediating the material weaknesses and will continue to review, revise, and improve the effectiveness of our internal controls as appropriate Although we have made significant enhancements to our control procedures, these material weaknesses will not be considered remediated until our controls are operational for a sufficient period of time, tested, and management concludes that these controls are operating effectively.

~~The second quarter remediation activity described above is a change in~~ internal control over financial reporting during the quarter ended June 30, ~~2021,~~2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Our management, including our principal executive officers and principal financial officer, do not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Due to inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. We are not presently a party to any legal proceedings that, in the opinion of our management, would individually or taken together have a material adverse effect on our business, financial condition, results of operations or cash flows. Regardless of outcome, litigation can have an adverse impact on us due to defense and settlement costs, diversion of management resources, negative publicity, reputational harm and other factors.

On September 14, 2020, we received a letter from Teladoc Health, Inc. ("Teladoc") alleging that certain of our cart products and associated peripherals infringe upon their patents. On October 12, 2020, Teladoc ~~Health, Inc~~ filed a claim against the Company related to these allegations. ~~While we can provide no guarantees about~~On June 30, 2022, the ~~outcome of this dispute, we believe that these claims lack merit and we intend~~claim was dismissed pursuant to ~~defend against them vigorously. Moreover, even if we were found to infringe upon any valid claim of these patents, our revenues from~~a confidential settlement between the ~~Carepoints products approximated 6% of our revenues in 2020. See “Item 1A. Risk Factors—Risks Related to Intellectual Property—~~parties.Third parties may challenge the validity of our patents and trademarks, or oppose our patent and trademark applications. We may not be able to obtain and enforce additional patents to protect our proprietary rights from use by potential competitors. Companies with other patents could require us to stop using or pay to use required technology” ~~and “Item 1A. Risk Factors—Risks Related to Intellectual Property—We could incur substantial costs as a result of any claim of infringement of another party’s intellectual property rights”~~ ~~in our Form 10-K.~~

There have been no material changes to the risk factors previously disclosed in our Form 10-K. For a discussion of potential risks and uncertainties related to our Company see the information in our Form 10-K in the section entitled “Risk Factors.”

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in the “Special Note Regarding Forward-Looking Statements” section in Part I, Item 2, of this Quarterly Report on Form 10-Q.

There were no sales of unregistered equity securities during the quarter ended June 30, ~~2021.~~2022.

The following table provides information about the Company’s purchases of its common stock for each month during this quarterly period covered by this report:

* Shares withheld to cover tax withholding obligations under the net settlement provision upon vesting of restricted stock units and exercising of options.

The documents listed below are incorporated by reference or are filed with this Quarterly Report on Form 10-Q, in each case as indicated therein (numbered in accordance with Item 601 of Regulation S-K).

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Delaware	20-5009396
(State of incorporation)	(I.R.S. Employer Identification Number)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, par value of $0.01 per share	AMWL	The New York Stock Exchange


Large accelerated filer	☐☒	Accelerated filer	☐

Non-accelerated filer	☒☐	Smaller reporting company	☐

		Emerging growth company	☒☐

~~Title of each class~~		~~Trading Symbol(s)~~		~~Name of each exchange on which registered~~
~~Class A common stock,~~ ~~par value of $0.01 per share~~		~~AMWL~~		~~The New York Stock Exchange~~


		Page
PART I	Financial Information	3
Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheet as of June 30, ~~2021~~2022 (unaudited) and December 31, ~~2020~~2021	3
	Condensed Consolidated Statement of Operations and Comprehensive Loss (unaudited) for the three and six months ended June 30, ~~2021~~2022 and ~~2020~~2021	4
	Condensed Consolidated Statement of Stockholders’ Equity ~~(Deficit)~~ (unaudited) for the three and six months ended June 30, ~~2021~~2022 and ~~2020~~2021	5
	Condensed Consolidated Statement of Cash Flows (unaudited) for the six months ended June 30, ~~2021~~2022 and ~~2020~~2021	7
	Notes to the Unaudited Condensed Consolidated Financial Statements	8
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2322
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3534
Item 4.	Controls and Procedures	3635
PART II	Other Information	3836
Item 1.	Legal Proceedings	3836
Item 1A.	Risk Factors	3836
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3836
Item 3.	Defaults Upon Senior Securities	3937
Item 4.	Mine Safety Disclosures	3937
Item 5.	Other Information	3937
Item 6.	Exhibits	4037


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	June 30, 2022			December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	257,189		$	746,416
Investments		372,880			—
Accounts receivable ($82 and $2,054, from related parties and net of allowances of $1,452 and $1,809, respectively)		44,675			51,375
Inventories		7,921			7,530
Deferred contract acquisition costs		1,781			1,697
Prepaid expenses and other current assets		22,148			20,278
Total current assets		706,594			827,296
Restricted cash		795			795
Property and equipment, net		1,498			2,235
Goodwill		433,840			442,761
Intangible assets, net		136,434			152,409
Operating lease right-of-use asset		14,511			16,422
Deferred contract acquisition costs, net of current portion		2,202			2,028
Other assets		1,233			1,722
Investment in minority owned joint venture		1,366			168
Total assets	$	1,298,473		$	1,445,836
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	5,490		$	12,156
Accrued expenses and other current liabilities		43,649			58,711
Operating lease liability, current		3,174			1,918
Deferred revenue ($867 and $1,860 from related parties, respectively)		63,971			68,841
Total current liabilities		116,284			141,626
Other long-term liabilities		3,677			5,136
Contingent consideration liabilities, net of current portion		—			16,450
Operating lease liability, net of current portion		12,842			14,694
Deferred revenue, net of current portion ($16 and $22 from related parties, respectively)		4,777			7,055
Total liabilities		137,580			184,961
Commitments and contingencies (Note 11)
Stockholders’ equity:
Preferred stock, $0.01 par value; 100,000,000 shares authorized, 0 shares issued or outstanding as of June 30, 2022 and as of December 31, 2021		—			—
Common stock, $0.01 par value; 1,000,000,000 Class A shares authorized, 240,397,065 and 229,402,453 shares issued and outstanding, respectively; 100,000,000 Class B shares authorized, 27,390,397 and 26,913,579 shares issued and outstanding, respectively; 200,000,000 Class C shares authorized 5,555,555 issued and outstanding as of June 30, 2022 and as of December 31, 2021		2,734			2,620
Additional paid-in capital		2,108,576			2,054,275
Accumulated other comprehensive income		(20,845	)		(6,353	)
Accumulated deficit		(950,466	)		(811,284	)
Total American Well Corporation stockholders’ equity		1,139,999			1,239,258
Non-controlling interest		20,894			21,617
Total stockholders’ equity		1,160,893			1,260,875
Total liabilities and stockholders’ equity	$	1,298,473		$	1,445,836

	Six Months Ended June 30,			Year Ended December 31, 2020
Allowance for doubtful accounts, beginning of the period	$	1,556		$	686
							Six Months Ended June 30, 2022			Year Ended December 31, 2021
Allowance for credit losses, beginning of the period							$	1,809		$	1,556
Provisions		(57	)		1,646			(308	)		714
Write-offs		(460	)		(776	)		(49	)		(461	)
Allowance for doubtful accounts, end of the period	$	1,039		$	1,556
Allowance for credit losses, end of the period							$	1,452		$	1,809


	June 30, 2021								June 30, 2022
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Money market funds	$	814,087	$	—	$	—	$	814,087	$	167,560	$	—	$	—	$	167,560
Investments		—		—		—	$	—
	$	814,087	$	—	$	—	$	814,087
U.S government securities										—		372,880		—	$	372,880
Total financial assets:									$	167,560	$	372,880	$	—	$	540,440

2021	$	3,856
2022		7,712
2023		7,712
2024		7,712
2025		7,712
Thereafter		16,968
	$	51,672

Total Active Providers
Quarter Ended	Total Active Providers		Customer Providers		AMG
June 30, 2021		71,000		67,000		4,000
March 31, 2021		81,000		76,000		5,000
December 31, 2020		72,000		68,000		4,000
September 30, 2020		62,000		58,000		4,000
June 30, 2020		57,000		53,000		4,000
March 31, 2020		24,000		22,000		2,000

Period	(a) Total number of shares (or units) purchased*		(b) Average price paid per share (or unit)*		(c) Total number of shares (or units) purchased as part of publicly announced plans or programs		(d) Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs
April 1 to April 30		68,750	$	27.01		—		—
May 1 to May 31		—		—		—		—
June 1 to June 30		—		—		—		—
Total		68,750	$	27.01		—		—


~~31.1~~4.2*		Amendment No 1 to the Agreement and Plan of Merger by and among Parent, the Company, Shannon Merger Subsidiary, Inc., Shannon merger Sister Subsidiary, LLC, and the Fortis Advisors, LLC, as the Security Representative, dated July 28, 2021.

10.1#		Employment Agreement between American Well Corporation and Phyllis Gotlib, dated April 8, 2022 (incorporated by reference to the Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 14, 2022)

10.3#*		Performance Share Unit Agreement between American Well Corporation and Ido Schoenberg, dated May 11, 2022

10.4#*		Performance Share Unit Agreement between American Well Corporation and Roy Schoenberg, dated May 11, 2022

31.1*		Chief Executive Officers Certifications

~~31.2~~31.2*		Chief Financial Officer Certification

~~32.1~~32.1*		CEO Certification of Quarterly Report

~~32.2~~32.2*		CFO ~~Certification~~Certifications of Quarterly Report

101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (embedded within the Inline XBRL document)



			AMERICAN WELL CORPORATION

Date:	August ~~12, 2021~~ 5, 2022	By:	/s/ Ido Schoenberg, MD
			Co-Chief Executive Officer
			(Principal Executive Officer)

Date:	August ~~12, 2021~~ 5, 2022	By:	/s/ Roy Schoenberg, MD, MPH
			Co-Chief Executive Officer
			(Principal Executive Officer)

Date:	August ~~12, 2021~~ 5, 2022	By:	/s/ ~~Keith Anderson~~ Robert Shepardson
			Chief Financial Officer
			(Principal Financial Officer)

Date:	August ~~12, 2021~~ 5, 2022	By:	/s/ Paul McNeice
			Vice President of Accounting
			(Principal Accounting Officer)