8-K: Amwell Faces NYSE Delisting Notice Due to Low Share Price, Plans Reverse Stock Split

Amwell received a notice from the NYSE for not meeting the minimum share price requirement and plans to regain compliance through a reverse stock split.

Summary

• American Well Corporation (Amwell) received a notice from the New York Stock Exchange (NYSE) on April 2, 2024, stating that the company is not in compliance with the NYSE's continued listing minimum price criteria.
• The non-compliance is due to the average closing price of Amwell's Class A common stock being less than $1.00 per share over a consecutive 30 trading-day period.
• The notice does not immediately delist the stock, and Amwell has a six-month period to regain compliance.
• To regain compliance, Amwell's stock must have a closing price of at least $1.00 per share and an average closing price of at least $1.00 per share over the 30 trading-day period ending on the last trading day of any calendar month during the six-month cure period.
• Amwell intends to regain compliance, including by effecting a reverse stock split, subject to board and stockholder approval at its upcoming 2024 annual meeting.
• The notice does not affect Amwell's business operations or its reporting obligations with the Securities and Exchange Commission.

Sentiment

Score: 3

Explanation: The document indicates a significant negative event (delisting notice) and the need for a reverse stock split, which is generally viewed negatively by investors. While the company is taking steps to address the issue, the overall sentiment is bearish.

Positives

• The notice does not result in immediate delisting of Amwell's stock from the NYSE.
• Amwell has a six-month period to regain compliance with the minimum price criteria.
• The company has already confirmed its intent to cure the deficiency to the NYSE.
• The notice does not affect Amwell's business operations or reporting requirements with the SEC.

Negatives

• Amwell's stock price has fallen below the NYSE's minimum listing requirement of $1.00 per share.
• The company is at risk of being delisted if it does not regain compliance within six months.
• A reverse stock split may be required, which could negatively impact shareholder value.

Risks

• Amwell may not be able to regain compliance with the NYSE listing standards within the six-month cure period.
• The reverse stock split may not be sufficient to increase the stock price above $1.00 per share.
• The company faces risks related to transitioning clients to Converge, renewing client contracts, and competition in the telehealth market.
• There are risks associated with changes in healthcare laws, regulations, and cybersecurity breaches.

Future Outlook

Amwell intends to regain compliance with NYSE listing standards, including by effecting a reverse stock split, subject to board and stockholder approval. The company's stock will continue to trade on the NYSE during the six-month cure period, subject to compliance with other listing standards.

Management Comments

• Amwell has confirmed to the NYSE its intent to cure the deficiency.
• The company plans to effect a reverse stock split, subject to board and stockholder approval.

Industry Context

The telehealth industry is experiencing weak growth and increased volatility, which may be contributing to Amwell's stock price decline. The company also faces competition from existing and potential new participants in the healthcare industry.

Comparison to Industry Standards

• Many telehealth companies have experienced stock price volatility, but the specific issue of falling below the NYSE's minimum listing price is a significant concern for Amwell.
• Other companies in the telehealth space, such as Teladoc Health and Livongo, have faced similar challenges related to growth and profitability, but have not necessarily faced delisting notices.
• The need for a reverse stock split suggests that Amwell's stock performance is significantly below industry benchmarks for companies listed on major exchanges.

Stakeholder Impact

• Shareholders may experience a decrease in the value of their investment due to the low stock price and potential reverse stock split.
• Employees may be concerned about the company's financial stability and future prospects.
• Customers and partners may be concerned about the company's long-term viability.

Next Steps

• Amwell needs to regain compliance with the NYSE minimum price criteria within six months.
• The company will seek board and stockholder approval for a reverse stock split.
• Amwell will continue to operate and report to the SEC as usual.

Key Dates

Keywords

NYSE, delisting, minimum price, reverse stock split, compliance, share price, listing standards, telehealth, healthcare, Amwell