American Well Corporation filed SEC Form 8-K: Entry into a Material Definitive Agreement, Completion of Acquisition or Disposition of Assets, Financial Statements and Exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
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Item 1.01 Entry into a Material Definitive Agreement.
On January 8, 2025, American Well Corporation (the “Company”), Aligned Telehealth, LLC, a wholly owned subsidiary of the Company (the “Seller”), and Avel eCare, LLC (the “Buyer”) entered into an asset purchase agreement (the “Agreement”) relating to the sale by the Seller, and the purchase by the Buyer, of all property and assets owned, leased or licensed by the Seller that are primarily used or held for use in connection with the Company’s business of providing telepsychiatry services to hospitals and correctional programs (the “Business”), subject to certain specified exclusions such as cash. In connection with such purchase and sale, the Buyer assumed specified contracts and the related accounts receivable and all accounts payable and accrued expenses of the Business. The purchase price is comprised of (i) an upfront cash payment of $20,714,459, which is equal to 1.1x the Business’ trailing twelve-month revenue, excluding on-site revenue attributable to certain of the Business’ contracts, subject to customary adjustments and (ii) an additional cash payment (the “Additional Payment”) equal to 0.4x the Buyer and its affiliates’ aggregate revenues arising from the provision of the Business to current customers and potential customers in the sales pipeline of the Company Group (as defined below) during the twelve-month period immediately following the closing, excluding revenues arising from the provision of on-site psychiatric services to certain of the Business’ contracts and other specified revenues, which Additional Payment is payable within ten days following the final determination of the Additional Payment amount. If the Buyer experiences certain change-of-control events during the twelve-month period immediately following the closing or if the Buyer fails to pay the Additional Payment (“Acceleration Event”), the Seller may elect to receive an amount equal to 0.4x the Buyer and its affiliates’ aggregate revenues arising from the provision of the Business to current customers and potential customers in the sales pipeline of the Company Group during the twelve-month period ending on the last day of the month immediately preceding the month in which the applicable Acceleration Event occurs. The Agreement includes a four-year non-competition covenant and a one-year non-solicitation covenant of the Company and the Seller, customary representations and warranties of the parties and customary indemnification provisions. The foregoing summary is qualified in its entirety by the Agreement, which is attached as Exhibit 10.1 hereto and incorporated by reference herein.
The closing of the purchase and sale transaction contemplated by the Agreement occurred, and the Company received the upfront payment, on January 8, 2025. In connection with the foregoing, Dr. Cynthia Horner transferred the ownership of Asana Integrated Medical Group (“Asana” and together with the Seller, the “Company Group”), the affiliated clinical partner of the Seller, to a doctor affiliated with the Buyer. In connection with the foregoing, the Company issued a press release, which is attached as Exhibit 99.2 hereto.
Item 2.01 Completion of Acquisition or Disposition of Assets.
The information contained in Item 1.01 of this Current Report on Form 8-K is incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
(b) Pro Forma Financial Information.
Pro forma financial information required pursuant to Article 11 of Regulation S-X is included in Exhibit 99.1 of this Current Report on Form 8-K and incorporated by reference herein.
(d) Exhibits.
99.1 Pro forma financial information
99.2 Press release dated January 9, 2025
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
† Exhibits and schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K and will be provided on a supplemental basis to the SEC upon request.
SIGNATURES
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 hereunto duly authorized.
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AMERICAN WELL CORPORATION |
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Date: |
January 10, 2025 |
By: |
/s/ Bradford Gay |
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Bradford Gay |