American Well (AMWL) risk factors, FY2024 10-K

Risks Related to Our Financial Position

1. 01We have a history of losses, which we expect to continue, and we may never achieve or sustain profitability
2. 02A significant portion of our revenue comes from a limited number of clients and we may be unable to retain our key clients
3. 03We may need additional capital to support the growth of our business, which may not be available to us on acceptable terms or at all
4. 04We have incurred and may in the future incur non-cash impairment charges

Risks Related to Our Business and Industry

1. 05The digital care market is still developing and volatile and may develop slower than we expect and be subject to negative publicity
2. 06Rapid technological change in our industry presents us with significant risks and challenges
3. 07We operate in a competitive industry and may not able to compete effectively
4. 08Healthcare reform legislation and other changes in the healthcare industry and in healthcare spending could adversely affect our business, financial condition and results of operations
5. 09If growth in the number of individuals covered by our health systems and health plans decreases, or the number of products or services that we are able to sell to our clients decreases due to legal, economic or business developments, our revenue will likely decrease
6. 10the business environment of our clients and, in particular, headcount reductions by our clients
7. 11A decline in the prevalence of employer-sponsored healthcare or the emergence of new technologies may render our digital care solution obsolete or require us to expend significant resources in order to remain competitive
8. 12Our new digital care offerings may not be adopted by our clients and we may fail to innovate and develop new software offerings that are adopted by our clients
9. 13If we fail to develop widespread brand awareness cost-effectively, our business may suffer
10. 14If AMG providers or experts or American Well Corporation experts are characterized as employees, AMG and American Well Corporation, as applicable, would be subject to employment and withholding liabilities
11. 15Our business could be adversely affected by health epidemics, pandemics and other public health emergencies
12. 16Our senior management team and workforce are crucial for executing our business strategy
13. 17Our growth depends in part on the success of our strategic relationships with third parties
14. 18Our digital care strategy depends on the ability of our affiliated medical group to maintain and expand its network of skilled qualified providers. If it is unable to do so, our future growth would be limited and our business, financial condition and results of operations would be harmed
15. 19We may not grow at the rates we historically have achieved or at all, even if our key metrics may indicate growth
16. 20We may be unable to successfully execute on our growth initiatives, business strategies or operating plans
17. 21We may not be able to quickly scale our capabilities when needed
18. 22The estimates of market opportunity and forecasts of market growth included in this Annual Report may prove to be inaccurate, and even if the market in which we compete achieves the forecasted growth, our business could fail to grow at similar rates, if at all
19. 23Our quarterly results may fluctuate significantly
20. 24the timing of expenses related to the development or acquisition of technologies or businesses and potential future charges for impairment of goodwill from acquired companies
21. 25We incur significant upfront costs in our client relationships, and if we are unable to maintain and grow these client relationships over time, we are likely to fail to recover these costs
22. 26Our sales cycle can be long and unpredictable and requires considerable time and expense, which may cause our results of operations to fluctuate
23. 27Economic uncertainties or downturns in the general economy or the industries in which our clients operate could disproportionately affect the demand for our solution and negatively impact our results of operations
24. 28With respect to our international operations, we face political, legal and compliance, operational, regulatory, economic and other risks that we do not face or that are more significant than in our domestic operations
25. 29political unrest, war, terrorism or regional natural disasters, particularly in areas in which we have facilities

Risks Related to Information Technology

1. 30addition, any financial difficulties, such as bankruptcy faced by our third-party data centers operators or any of the service providers with whom we or they contract may have negative effects on our business, the nature and extent of which are difficult to predict
2. 31other potential interruptions
3. 32If our or our vendors’ security measures fail or are breached and unauthorized access to a client’s data or information systems is obtained, our services may be perceived as insecure, we may incur significant liabilities, our reputation may be harmed, and we could lose sales and clients
4. 33Our proprietary software may not operate properly, which could damage our reputation, give rise to claims against us or divert application of our resources from other purposes
5. 34If we cannot implement our solution for clients or resolve any technical issues in a timely manner, we may lose clients and our reputation may be harmed
6. 35We may be subject to claims for technology integration problems and warranties

Risks Related to Intellectual Property

1. 36Any failure to protect, enforce or defend our intellectual property rights could impair our ability to protect our technology and our brand
2. 37We could incur substantial costs as a result of any claim of infringement of another party’s intellectual property rights
3. 38extremely costly to defend, divert our management’s time, attention and resources, damage our reputation and brand and substantially harm our business
4. 39redesign technology to avoid infringement

Risks Related to Litigation and Liability

1. 40We may become subject to medical liability claims, which could cause us to incur significant expenses and may require us to pay significant damages if not covered by insurance
2. 41We could experience losses or liability not covered by insurance
3. 42Any future litigation against us could be costly and time-consuming to defend

Risks Related to Taxation

1. 43Recent changes in U.S. tax laws could adversely affect our operating results and financial condition
2. 44We may not be permitted to file as a consolidated group for U.S. federal income tax and certain state tax purposes
3. 45Certain U.S. state and local tax authorities may assert that we have a nexus with such states or localities and may seek to impose state and local income taxes on our income allocated to such state and localities
4. 46Taxing authorities may successfully assert that we should have collected or in the future should collect sales and use or similar taxes for digital care services which could adversely affect our results of operations
5. 47Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations

Risks Related to Strategic Initiatives

1. 48We may acquire other companies or technologies, which could divert our management’s attention, result in dilution to our stockholders and otherwise disrupt our operations and we may have difficulty integrating any such acquisitions successfully or realizing the anticipated benefits therefrom
2. 49use of substantial portions of our available cash to consummate the acquisition
3. 50We may enter into collaborations, in-licensing arrangements, joint ventures, strategic alliances or partnerships with third-parties that may not result in the development of commercially viable solutions or the generation of significant future revenues

Risks Related to Government Regulation

1. 51Our failure to comply with the anti-corruption, trade compliance and economic sanctions laws and regulations of the United States and applicable international jurisdictions could materially adversely affect our reputation and results of operations
2. 52Our business could be adversely affected by legal challenges to our business model or by actions restricting our ability to provide the full range of our services in certain jurisdictions
3. 53We are dependent on our relationships with affiliated professional entities, which we do not own, to provide physician services, and our business would be adversely affected if those relationships were disrupted
4. 54Evolving government regulations may result in increased costs or adversely affect our results of operations
5. 55State, federal and foreign privacy and security laws and regulations are constantly evolving and our failure to comply with such changes could result in significant liability or reputational harm and, in turn, a material adverse effect on our client base, patient and members bases and revenue
6. 56Security breaches, loss of data and other disruptions could compromise sensitive information related to our business or prevent us from accessing critical information and expose us to liability, which could adversely affect our business and our reputation

Risks Related to Ownership of Our Class A Common Stock

1. 57The multiple class structure of our common stock and the ownership of Class B common stock by our Founders will have the effect of concentrating voting control with our Founders for the foreseeable future, which will limit or preclude your ability to influence corporate matters
2. 58Our multiple class structure may depress the trading price or liquidity of our Class A common stock
3. 59Provisions in our amended and restated certificate of incorporation and amended and restated by-laws and Delaware law could discourage, delay or prevent a change of control of our company and may affect the trading price of our Class A common stock
4. 60We are a “controlled company” within the meaning of NYSE rules and, as a result, we qualify for, and rely on, exemptions from certain corporate governance requirements. You will not have the same protections afforded to stockholders of companies that are subject to such requirements
5. 61the requirement that our compensation committee and nominating and corporate governance committee be composed entirely of independent directors
6. 62The provision of our amended and restated certificate of incorporation requiring exclusive forum in certain courts in the State of Delaware or the federal district courts of the United States for certain types of lawsuits may have the effect of discouraging lawsuits against our directors and officers
7. 63Additionally, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act
8. 64The price of our Class A common stock has been and may continue to be volatile and fluctuate substantially
9. 65Sales of a substantial number of shares of our Class A common stock in the public market, or the perception in the market that the holders of a large number of shares intend to sell shares, could cause the market price of our Class A common stock to drop significantly, even if our business is doing well
10. 66If securities or industry analysts do not continue to publish research or reports about our business, or if they issue an adverse or misleading opinion regarding our stock, our stock price and trading volume could decline
11. 67Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation will be your sole source of gain, if any