American Well Corp

NOTES TO CONDENSED CONSOLID ATED FINANCIAL STATEMENTS

1. Organization and Description of Business

American Well Corporation (the “Company”) was incorporated under the laws of the State of Delaware in June 2006. The Company is headquartered in Boston, Massachusetts. The Company is a leading enterprise software company enabling digital delivery of care for healthcare’s key stakeholders. The Company empowers our clients with the core technology and services necessary to successfully develop and distribute virtual care programs that meet their strategic, operational, financial and clinical objectives under their own brands.

Reverse Stock Split

On June 18, 2024, the Company’s stockholders approved a reverse stock split of its Class A common stock, Class B common stock and Class C common stock (collectively, the "common stock") at a ratio ranging from 1-for-10 to 1-for-20, with the exact ratio determined by the Company’s Board of Directors. On June 28, 2024, the Company's Board of Directors approved a 1-for-20 reverse stock split (Reverse Split) of its common stock that became effective on July 10, 2024. The Reverse Stock Split did not change the Company's authorized number of shares of common stock. The Reverse Stock Split did not change the par value of the common stock and, therefore the Company reclassified an amount equal to the reduction in the number of shares of common stock at par value to additional paid-in capital. No fractional shares were issued in connection with the Reverse Split, and stockholders who would otherwise have been entitled to receive a fractional share instead received a cash payment equal to the fraction of a share of common stock in lieu of such fractional share. Proportionate adjustments were made to the number of shares authorized under the Company’s equity incentive plans, the number of shares subject to any award or purchase right under the Company’s equity incentive plans, and the exercise price or purchase price with respect to any stock option award or purchase right under the Company’s equity incentive plans, see Note 8. All shares of the Company’s common stock, stock-based instruments and per-share data included in these condensed consolidated financial statements have been retroactively adjusted as though the Reverse Stock Split has been effected prior to all periods presented.

2. Summary of Significant Accounting Policies

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, 2024, that have had a material impact on the consolidated financial statements and related notes.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of normal recurring accruals and adjustments) necessary for the fair statement of the Company’s financial position, results of operations and cash flows at the dates and for the periods indicated. The interim results for the three and nine months ended September 30, 2025 are not necessarily indicative of results for the full 2025 calendar year or any other future interim periods. The information included in the interim financial statements should be read in conjunction with the annual consolidated financial statements and accompanying notes included in the Form 10-K.

The unaudited condensed consolidated financial statements include the accounts of American Well Corporation, its wholly-owned subsidiaries, those of professional corporations, which represent variable interest entities in which American Well has an interest and is the primary beneficiary (“PC”), and National Telehealth Network (“NTN”), an entity in which American Well controls fifty percent or more of the voting shares (see Note 5). Intercompany accounts and transactions have been eliminated in consolidation.

The Company’s reporting currency is the U.S. dollar. The Company determines the functional currency of each subsidiary based on the currency of the primary economic environment in which each subsidiary operates. Items included in the financial statements of such subsidiaries are measured using that functional currency. Foreign currency denominated monetary assets and liabilities are remeasured into U.S. dollars at current exchange rates and foreign currency denominated nonmonetary assets and liabilities are remeasured into U.S. dollars at historical exchange rates. Gains or losses from foreign currency remeasurement and settlements are included in interest income and other income (expense), net in the condensed consolidated statements of operations and comprehensive loss.

For consolidated entities where American Well owns or is exposed to less than 100% of the economics, the net loss attributable to noncontrolling interests is recorded in the condensed consolidated statements of operations and comprehensive loss equal to the percentage of the economic or ownership interest retained in each entity by the respective non-controlling party. The noncontrolling interests are presented as a separate component of stockholders’ deficit in the condensed consolidated balance sheets.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reported periods. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, revenue recognition, the estimated customer relationship period that is used in the amortization of deferred contract acquisition costs, the valuation of assets and liabilities acquired in business combinations, goodwill, the useful lives of intangible assets and property and equipment and the valuation of common stock awards. The Company bases its estimates on historical experience, known trends, and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates, as there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results may differ from those estimates or assumptions.

Segment Information

The Company’s chief operating decision maker (CODM), its Chief Executive Officer, is provided financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. The Company operates and manages its business asone reportable and operating segment. In addition, substantially all of the Company’s revenue and long-lived assets are attributable to operations in the United States for all periods presented.

Variable Interest Entities

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$15,238 and$209, respectively, as of September 30, 2025 and $34,050 and $2,053, respectively as of December 31,2024.

Total revenue included on the condensed consolidated statements of operations and comprehensive loss for the PCs after elimination of intercompany transactions was$6,599 and $14,447 for the three months ended September 30, 2025 and 2024, respectively. Net loss included on the condensed consolidated statements of operations and comprehensive loss was not material for the three months ended September 30, 2025 and 2024. Total revenue included on the condensed consolidated statements of operations and comprehensive loss for the PCs after elimination of intercompany transactions was$24,153 and $47,469 for thenine months ended September 30, 2025 and 2024, respectively. Net loss included on the condensed consolidated statements of operations and comprehensive loss was not material for the nine months ended September 30, 2025 and 2024.

Inventories

The Company values all of its inventories, which consist primarily of raw material hardware components, at the lower of cost or net realizable value on a first-in, first-out basis (“FIFO”). Write-offs of potentially slow moving or damaged inventory are recorded through specific identification of obsolete or damaged material.

Investment in Minority Owned Joint Venture

In 2019, 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 digital care delivery. During 2025, the companies determined that these care services could be provided through partnering between the two entities and that the joint venture was no longer necessary to achieve care delivery. During the quarter ended September 30, 2025, the companies entered into an agreement for the complete liquidation and dissolution of the joint venture. As part of this agreement the Company will continue to support virtual second opinion services that were previously provided by CCAW, JV LLC, though our existing relationship with Cleveland Clinic. Certain business activities will continue through the transition period which will end no later than March 31, 2026. 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 investment in CCAW, JV LLC using the equity method of accounting. The joint venture is considered a variable interest entity under ASC 810-10, but the Company is not the primary beneficiary as it does not have the power to direct the activities of the joint venture that most significantly impact its performance. The Company’s evaluation of ability to impact performance is based on Cleveland Clinic’s managing directors and Cleveland Clinic’s ability to appoint and remove the chairperson who has the ability to cast the tie breaking vote on the most significant activities.

In 2020, the Company contributed $2,940 as its initial investment for a 49% interest in CCAW, JV LLC. The agreement also required aggregate total capital contributions by the Company up to an additional $11,800 in two phases. During thenine months ended September 30, 2025, the Company didnot make any capital contributions. During thenine months ended September 30, 2024, the Company made a capital contribution of $1,715, of which $0 was contributed in the three months ended September 30, 2024.

For the three months ended September 30, 2025, the Company didnot recognize any loss or income as its proportionate share of the joint venture’s results of operations, as the investment balance was written down to zero. For the three months ended September 30, 2024, the Company recognized a loss of $702, as its proportionate share of the joint venture’s results of operations. For thenine months ended September 30, 2025 and 2024, the Company recognized a loss of$1,500 and $2,402 as its proportionate share of the joint venture’s results of operations, respectively. Accordingly, the carrying value of the equity method investment as of September 30, 2025 and December 31, 2024 waszero and $1,500, respectively.

Simple Agreement for Future Equity

On March 11, 2025, the Company made a minority investment of $1,000 in Aingelz, Inc. (“Aingelz”) utilizing a Simple Agreement for Future Equity ("SAFE"). The SAFE provides the Company with the right to participate in future equity financings of the entity and will automatically convert into shares of preferred stock at a discount price or conversion price as defined in the agreement. This investment is a minority investment, intended to support artificial intelligence development. The Company has no control in this entity.

The SAFE is accounted for under measurement alternative in accordance with Accounting Standards Codification ("ASC") 321, Investments — Equity Securities, which is cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Each period the Company assesses relevant transactions to identify observable price changes, and the Company regularly monitors these investments to evaluate whether there is an indication of impairment. The Company evaluates whether an investment’s fair value is less than its carrying value using an estimate of fair value, if such an estimate is available. For periods in which there is no estimate of fair value, the Company evaluates whether an event or change in circumstances has occurred that may have a significant adverse effect on the value of the investment. Changes in the fair value of the investment are recorded as net appreciation in fair value of investment in the Consolidated Statements of Operations. As of September 30, 2025, the investment in Aingelz was $1,000, and is included in Other Assets on the condensed consolidated balance sheet. The Company has not recognized any upward or downward adjustments resulting from observable price changes in identical or similar investments for the three and nine months ended September 30, 2025.

Concentrations of Credit Risk and Significant Clients

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents, investments and accounts receivable. The Company invests its excess cash with large financial institutions. Cash and cash equivalents are invested in highly rated money market funds. At times, the Company’s cash balances with individual banking institutions are in excess of federally insured limits. The Company’s investments are invested in U.S. government agency bonds. The Company has not experienced any losses on its deposits of cash, cash equivalents or investments. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

The Company performs ongoing assessments and credit evaluations of its clients to assess the collectability of the accounts based on a number of factors, including past transaction experience, age of the accounts receivable, review of the invoicing terms of the contracts, and recent communication with clients. The Company has not experienced significant credit losses from its accounts receivable. As of September 30, 2025, two clients accounted for 51% and 10% respectively, of outstanding accounts receivable, and as of December 31, 2024, two clients accounted for 47% and 13% of outstanding accounts receivable.

During the three months ended September 30, 2025, sales to two clients represented 32% and 21% of the Company’s total revenue. During the nine months ended September 30, 2025, sales to two clients represented 29% and 24% of the Company's total revenue. During the three and nine months ended September 30, 2024, sales to one client represented 27% and 28% of the Company's total revenue, respectively.

Intangible Assets

Intangible assets acquired in a business combination are recognized at fair value using generally accepted valuation methods deemed appropriate for the type of intangible asset acquired and reported net of accumulated amortization, separately from goodwill. Definite-lived intangible assets, which primarily consist of customer relationships, contractor relationships, technology and trade name, are stated at historical cost and amortized over the assets’ estimated useful lives. Intangible assets are re-evaluated whenever events or changes in circumstances indicate that their estimated useful lives may require revision and/or the carrying value of the related asset group may not be recoverable by its projected undiscounted cash flows. If the carrying value of the asset group is determined to be unrecoverable, an impairment charge would be recognized in an amount equal to the amount by which the carrying value of the asset group exceeds its fair value. The Company did not identify a triggering event in the nine months ended September 30, 2025 and 2024. No impairments were identified during thenine months ended September 30, 2025 and 2024.

Impairment of Long-Lived Assets

Long-lived assets consist primarily of property and equipment and intangible assets. Long-lived assets to be held and used are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends and significant changes or planned changes in the use of the assets, among others. When testing for asset impairment, the Company groups assets and liabilities at the lowest level for which cash flows are separately identifiable. If an impairment review is performed to evaluate a long-lived asset group for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset group to its carrying value. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset group are less than the asset’s carrying amount. The impairment loss would be based on the excess of the carrying value of the impaired asset group over its fair value. The Company did not identify a triggering event in the nine months ended September 30, 2025 and 2024. No impairments were identified during thenine months ended September 30, 2025 and 2024.

Recently Issued Accounting Pronouncements and Disclosure Rules

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures(“ASU 2023-09”), which includes amendments to improve income tax disclosures primarily related to the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. We are evaluating the effect that this guidance will have on our consolidated financial statement disclosures.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of income statement expenses(“ASU 2024-03”), which requires disaggregated information about certain income statement expense line items on an annual and interim basis. ASU 2024-03 is effective for annual periods beginning after December 15, 2026 and interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted and can be applied prospectively or retrospectively. We are evaluating the effect that this guidance will have on our consolidated financial statement disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Improvements to the Accounting for and Disclosure of Software Costs. The new guidance eliminates the prior stage-based model (e.g., preliminary, development, post-implementation) and introduces a principles-based approach. Software costs may be capitalized once (1) management commits to funding the project and (2) it is probable the software will be completed and used for its intended function. Entities must assess whether significant development uncertainty exists. The standard is effective for annual periods beginning after December 15, 2027 and interim reporting periods within those annual reporting periods, with early adoption permitted.

Transition options include prospective, modified prospective, or retrospective application. The Company is currently evaluating the impact of ASU 2025-06 on its financial statements and related disclosures.

3. Segment Information

The Company operates and manages its business asone reportable and operating segment. The Company’s enterprise platform and software as a service solutions enable hybrid care delivery for our customers. The measure of segment assets is reported on the balance sheet as total consolidated assets. In addition, the Company derives revenue primarily in the United States and manages the business activities on a consolidated basis.

The Company generates revenues from the use of our enterprise platform and software as a service in the form of recurring subscription fees for use. We also generate revenue from the performance of patient visits and other related professional services and hardware sales. The accounting policies are the same as those described in the summary of significant accounting policies.

The Company’s chief operating decision maker (CODM), its Chief Executive Officer, reviews financial information presented on a consolidated basis and decides how to allocate resources based on net loss. Consolidated net loss is used for evaluating financial performance. The monitoring of budgeted versus actual results are used in assessing performance of the Company and in establishing management’s compensation.

The significant expense categories and amounts align with information that is regularly provided to the CODM. Significant segment expenses, which represent the difference between revenue and net loss, consist of the following:

(1)Other segment expense items primarily include hosting, hardware, corporate compliance, severance, strategic transformation costs, amortization, depreciation and overhead expenses.

4. Revenue

The following table presents the Company’s revenues disaggregated by revenue source:

Accounts Receivable, Net

Accounts receivable primarily consist of amounts billed currently due from clients. Accounts receivable are presented net of an allowance for credit losses, which is an estimate of amounts that may not be collectible. In determining the amount of the allowance at each reporting date, the Company makes judgments about general economic conditions, historical write-off experience and any specific risks identified in client collection matters, including the aging of unpaid accounts receivable and changes in client financial conditions. Account balances are written off after all means of collection are exhausted and the potential for non-recovery is determined to be probable. Adjustments to the allowance for credit losses are recorded as general and administrative expenses in the condensed consolidated statements of operations and comprehensive loss.

Changes in the allowance for credit losses were as follows:

The Company has rights to consideration for services completed but not billed at the reporting date. Unbilled receivables are classified as receivables when the Company has the right to invoice the client. The amount of unbilled accounts receivable included within accounts receivable on the condensed consolidated balance sheet was$4,942 and $13,628 as of September 30, 2025 and December 31, 2024, respectively.

Deferred Revenue

Contract liabilities consist of deferred revenue and include billings in advance of performance under the contract. Such amounts are recognized as revenue over the contractual period. For the three months ended September 30, 2025 and 2024, the Company recognized revenue of$19,436 and $7,005, respectively, that was included in the corresponding contract liability balance at the beginning of the periods presented. For thenine months ended September 30, 2025 and 2024, the Company recognized revenue of$46,342 and $33,136, respectively, that was included in the corresponding contract liability balance at the beginning of the periods presented.

Changes in the Company’s deferred revenue balance for thenine months ended September 30, 2025 and year ended December 31, 2024 were as follows:

Transaction Price Allocated to Remaining Performance Obligations

As of September 30, 2025 and December 31, 2024, the aggregate amount of the transaction price allocated to remaining performance obligations was$106,268 and $143,529, respectively. The substantial majority of the unsatisfied performance obligations will be satisfied over the next three years.

As it pertains to the September 30, 2025 amount, the Company expects to recognize 63% of the transaction price in the 12 month period ended September 30, 2026, in its condensed consolidated statement of operations and comprehensive loss with the remainder recognized thereafter.

5. National Telehealth Network

In 2012, the Company and an affiliate of Elevance Health Inc. formed National Telehealth Network LLC ("NTN") to expand the availability and adoption of telemedicine. The Company did not have a controlling financial interest in NTN, but it had the ability to exercise significant influence over the operating and financial policies of NTN. Therefore, the Company accounted for its investment in NTN using the equity method of accounting through December 31, 2015.

On January 1, 2016, the Company made an additional investment in NTN, which increased its ownership percentage above 50%. The Company also obtained the right to elect the Chairman of NTN, who has the ability to cast the tie-breaking vote in all decisions. Therefore, on January 1, 2016, the Company obtained control over NTN and has the power to direct the activities that most significantly impact NTN’s economic performance. This step-acquisition was accounted for as a business combination and the results of the operations of NTN from January 1, 2016, have been included in the Company’s condensed consolidated financial statements. However, because the Company owns less than 100% of NTN, the Company recognizes net loss attributable to non-controlling interest in the condensed consolidated statements of operations and comprehensive loss equal to the percentage of the ownership interest retained in NTN by the respective non-controlling party.

The proportionate share of the income (loss) attributed to the non-controlling interest amounted to$467 and $(577) for the three months ended September 30, 2025 and 2024, respectively. The proportionate share of the income (loss) attributed to the non-controlling interest amounted to$980 and $(2,580) for thenine months ended September 30, 2025 and 2024.

The carrying value of the non-controlling interest was$12,452 as of September 30, 2025 and $11,472 as of December 31,2024.

6. Fair Value Measurements

Certain assets and liabilities of the Company are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

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Level 1—Quoted prices in active markets for identical assets or liabilities.

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Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

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Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

The following tables presents the Company’s fair value hierarchy for its assets and liabilities that are measured at fair value on a recurring basis and indicate the level within the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value:

The Company’s cash equivalents were invested in money market funds and were valued based on Level 1 inputs. During the nine months ended September 30, 2025, there wereno transfers between fair value measurement levels. Interest income for the three months ended September 30, 2025 and 2024 was$1,175 and $2,725, respectively. Interest income for thenine months ended September 30, 2025 and 2024 was$4,113 and $9,818, respectively.

Nonrecurring Fair Value Measurements

The Company measures the fair value of certain assets, including investments in privately held companies without readily determinable fair values, on a nonrecurring basis when events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.

7. Divestiture

On January 8, 2025 (the "Closing Date"), the Company and the Company's wholly owned subsidiary, Aligned Telehealth, LLC ("Aligned") entered into an asset purchase agreement relating to the sale of all property and assets owned, leased or licensed by Aligned 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 "APC 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 APC Business, and Dr. Cynthia Horner transferred the ownership of Asana Integrated Medical Group (“Asana” and together with Aligned, “APC”), the affiliated clinical partner of Aligned, to a doctor affiliated with the buyer.

The divestiture was completed on Closing Date, and the total consideration was comprised of (i) an upfront cash payment of $20,714, 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 APC Business to current customers and potential customers in the sales pipeline of APC during the twelve-month period immediately following the closing, subject to certain exclusions. The Additional Payment is considered seller contingent consideration and the Company has made an accounting policy election to account for the Additional Payment when realizable.

We divested the APC Business as it was determined the offering no longer fit our goals around profitability and growth. Streamlining our service offerings will enable us to focus our resources on the Converge platform, strategic customers, and our path to profitability. The divestiture of APC did not represent a strategic shift that would have a major effect on the Company's consolidated results of operations, and therefore, its results of operations were not reported as discontinued operations.

As of the Closing Date, the carrying amounts of the following major assets were derecognized from our condensed consolidated balance sheet:

APC generated revenues of $459 in 2025, through the Closing Date, and $5,509 and $17,958 during the three and nine months ended September 30, 2024, respectively. Given that we operate our business as a single reporting unit, we are unable to reasonably determine stand-alone costs and related earnings or loss before income taxes attributable to the APC business.

Upon completion of the divestiture of APC and after net working capital adjustments prior to the final contingent earnout payment, the Company recognized a gain of $8,713 during thenine months ended September 30, 2025. As the Company is in a loss position, no income tax expense related to the taxable gain was recognized during thenine months ended September 30, 2025.

8. Intangible Assets

Identified intangible assets consist of the following:

The Company capitalized nothing in the three and nine months ended September 30, 2025 and $4,718 and $12,690 in thethree and nine months ended September 30, 2024, related to internally developed software to be sold as a service incurred during the application development stage. The Company is amortizing these costs over the expected lives of the related services. Amortization expense related to intangible assets for the three months ended September 30, 2025 and 2024 was$9,394 and $8,228, respectively. Amortization expense related to intangible assets fornine months ended September 30, 2025 and 2024 was$25,320 and $24,505, respectively. In thethree and nine months ended September 30, 2025 the Company accelerated amortization of $720 related to a tradename intangible and wrote-off the asset. The life of the tradename was adjusted as it is no longer being used by the Company.

9. Accrued Expenses and other current liabilities

Accrued expenses and other current liabilities consist of the following:

10. Stockholders’ Equity

Undesignated Preferred Stock

The Company’s Amended and Restated Certificate of Incorporation authorizes the issuance of 100,000,000 shares of undesignated preferred stock, par value of $0.01 per share, with rights and preferences, including voting rights, designated from time to time by the board of directors. No shares of preferred stock were issued or outstanding as of September 30, 2025 and December 31, 2024.

Common Stock

In thethree and nine months ended September 30, 2025 and 2024, no shares of Class B common stock were converted to Class A common stock. As of September 30, 2025, the par value of the Class A, Class B and Class C shares was$147,$14, and$3, respectively. As of December 31, 2024 the par value of the Class A, Class B and Class C shares was $139, $14 and $3, respectively.

As of September 30, 2025 and December 31, 2024, the Company had reserved 4,750,527 and 4,622,750 shares of common stock for the exercise of outstanding stock options, the vesting of restricted stock units, the vesting of performance-based market condition share awards, and the number of shares remaining available for future grant, respectively.

Stock Plans

The Company maintains the 2006 Employee, Director and Consultant Stock Plan as amended and restated (the “2006 Plan”), the 2020 Equity Incentive Plan (the “2020 Plan”) and 2024 Inducement Plan (the “2024 Plan”), together, the “Plans,” under which it has granted incentive stock options, non-qualified stock options, cash based awards, restricted stock units and performance 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.

Stock Options

Activity under the Plans is as follows:

No options were granted in thenine months ended September 30, 2025 and 2024.

Restricted Stock Units

Activity for the restricted stock units is as follows:

The total grant date fair value of RSU’s granted for the nine months ended September 30, 2025 and 2024 was$9,996 and $34,594, respectively. Restricted stock units vest over the service period ofone tofour years. The aggregate intrinsic value of restricted stock units vested for thenine months ended September 30, 2025 and 2024 was$4,846 and $11,280, respectively.

Restricted Stock Units with a Performance or Market Condition

In the three months ended September 30, 2025, the Company granted performance-based share units ("PSUs") to the CEO and Executive Chairman, which provided the right to receive shares of common stock, upon achievement of certain performance milestones measured over athree year performance period ending December 31, 2027. A total of 300,000 PSUs were awarded with 50% designated as annual goal PSUs divided into three separate year tranches, with each tranche allocated to a fiscal year within the performance period, and the remaining 50% as operating cash flow PSUs that are divided into 6 tranches which can be earned over the performance period.

The annual performance goal targets are established at the beginning of each year. Therefore, in accordance with ASC 718, Compensation – Stock compensation, the grant date (and fair value measurement date) for each Tranche Year is the date at the beginning of each year when a mutual understanding of the key terms and conditions are reached.

At each reporting period, the amount of stock-based compensation is determined based on the probability of achievement against the pre-established performance measures and if necessary, a cumulative catch-up adjustment is recorded to reflect any revised estimates regarding the probability of achievement.

Activity for the restricted stock units with a performance or market condition is as follows:

The total grant-date fair value of performance-based share units granted during the nine months ended September 30, 2025 was$1,438. There wereno performance-based or market condition share awards granted during thenine months ended September 30, 2024.

Long-term Incentive Awards

As part of his employment agreement, the chief financial officer ("CFO") was granted a long term incentive award, under which a total of $5,000 can be earned. The award is eligible to vest infour equal annual tranches on the anniversary of the CFO's start date, subject to employment and certain performance and market conditions being met. The award will be paid out in cash unless the board of directors determines the amount should be paid out in shares. The Company accounted for these awards as liability-based awards

("Liability Awards"). The Liability Awards is recorded as deferred compensation in Accrued expenses and other current liabilities on the Condensed Consolidated Balance Sheet. Compensation expense was recognized on a straight-line basis over the performance period, with the amount recognized fluctuating as a result of the awards being remeasured to fair value at the end of each reporting period due to their liability-award classification. As of September 30, 2025 it was determined that all performance and market conditions have been met, the fair value was determined to be $1,250 for the first annual tranche. The Company recog nized $817 and $1,148 of compensation expense related to the bonus award for the three and nine months ended September 30, 2025, with the remaining fair value to be taken over the term to end of performance period.

In the three months ended September 30, 2025, the Company granted along term incentive awardto the CEO, under which a total of $2,000 can be earned, upon achievement of certain performance milestones measured over a three year performance period ending December 31, 2027. Fifty percent of the awards is designated as annual goal bonus divided into three separate year tranches, with each tranche allocated to a fiscal year within the performance period, and the remaining 50% as operating cash flow bonus that are divided into 6 tranches which can be earned over the performance period. At each reporting period, the amount of the awards is determined based on the probability of achievement against the pre-established performance measures and if necessary, a cumulative catch-up adjustment is recorded to reflect any revised estimates regarding the probability of achievement. As of September 30, 2025 it was determined that all performance conditions are expected to be met, the fair value was determined to be the full amount of the operating cash flow bonus and the full amount of the first annual goal bonus. The Company recog nized $500 and $500 of compensation expense related to the bonus award for the three and nine months ended September 30, 2025, with the remaining fair value to be taken over the term to end of performance period.

2020 Employee Stock Purchase Plan

During the nine months ended September 30, 2024, the Company issued 115,527 shares under the ESPP. During thenine months ended September 30, 2025, the Company issued 127,675 shares under the ESPP. As of September 30, 2025,301,148 shares remained available for issuance.

Stock-Based Compensation

Stock-based compensation expense, related to all of the Company's stock-based awards, was classified in the condensed consolidated statements of operations and comprehensive loss as follows:

As of September 30, 2025, the unrecognized stock-based compensation expense related to unvested common stock-based awards was$17,152, which is expected to be recognized over a weighted-average period of 1.9 years.

11. Commitments and Contingencies

Indemnification

The Company’s arrangements generally include certain provisions for indemnifying clients against third-party claims asserting infringement of certain intellectual property rights in the ordinary course of business. The Company also regularly indemnifies clients 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 client. In addition, the Company indemnifies its officers, directors and certain key employees while they are serving in good faith in their capacities. Through September 30, 2025 and December 31, 2024, there have beenno claims under any indemnification provisions.

Litigation

From time to time, and in the ordinary course of business, the Company may be subject to various claims, charges, and litigation. As of September 30, 2025 and December 31, 2024, the Company didnot 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 continues to maintain a full valuation allowance against its domestic net deferred tax assets. For the three and nine months ended September 30, 2025, the Company recognized an income tax benefit of$1,217 and$1,060, respectively, primarily due to federal, state and foreign income tax benefit. During the three and nine months ended September 30, 2024, the Company recorded income tax (benefit) expenseof $(149) and $1,223, respectively, primarily due to federal, state and foreign income tax expense.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States. The OBBBA includes significant changes to federal tax law and other regulatory provisions that may impact the Company. The legislation was signed into law in the Company’s third quarter of 2025, and did not have a material impact on the Company's operating results for the three and nine months ended September 30, 2025. The Company will continue to evaluate the impact of the newly enacted tax law and it's impact on the forecasted annual effective tax rate in future periods, taking into consideration the Company continues to forecast a large taxable loss with a corresponding full valuation allowance.

13. Related-Party Transactions

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 September 30, 2025 and December 31, 2024, the Company held current deferred revenue of$45 and $153, respectively from contracts with this client. As of September 30, 2025 and December 31, 2024, amounts due from Cleveland Clinic were$147 and $216, respectively.

During the three months ended September 30, 2025 and 2024, the Company recognized revenue of$177 and $336, respectively, from contracts with this client. During thenine months ended September 30, 2025 and 2024, the Company recognized revenue of$306 and $1,232, respectively, from contracts with this client.

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 2025, the companies determined that these care services could be provided through partnering between the two entities and that the joint venture was no longer necessary to achieve care delivery. During the quarter ended September 30, 2025, the companies entered into an agreement for the complete liquidation and dissolution of the joint venture. As part of this agreement the Company will continue to support virtual second opinion services that were previously provided by CCAW, JV LLC, though our existing relationship with Cleveland Clinic. Certain business activities will continue through the transition period which will end no later than March 31, 2026.

During the year ended December 31, 2020, the Company made an initial investment in CCAW, JV LLC of $2,940 for its less than 50% interest in the joint venture. During thenine months ended September 30, 2025, the Company made no capital contributions related to a portion of the phase one capital commitment.

As of September 30, 2025 the Company heldno current deferred revenue as of and December 31,2024, the Company held current deferred revenue of $55, from contracts with this client. As of September 30, 2025 and December 31, 2024, there was$1,038 and $400 due from CCAW, JV LLC, respectively.

During the three months ended September 30, 2025 and 2024, the Company recognized revenue of$567 and $406 from contracts with this client, respectively. During thenine months ended September 30, 2025 and 2024, the Company recognized revenue of$1,703 and $1,210, respectively, from contracts with this client.

14. Net Loss per Share

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

The Company’s potential dilutive securities, which include stock options, unvested restricted stock units and unvested performance market-based 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:

15. Severance and strategic transformation costs

In 2024 and 2025, the Company has executed a series of individual actions, referred to as strategic transformation actions. Strategic transformation costs include one-time employee termination benefits, strategic transformation consulting expenses, as well as other incremental costs resulting from these actions. Employee termination benefits are recorded in accordance with standard Company policy. Strategic transformation costs are recognized in the Company's condensed consolidated financial statements in accordance with GAAP. Charges are recorded when such actions are approved, communicated, and/or implemented. Amounts remaining to be paid for any strategic transformation costs are$4,033 and included in accrued expenses on the condensed consolidated balance sheet as of September 30, 2025.

In the three months ended September 30, 2025 and 2024, the Company recorded charges of$3,193 and $2,865, respectively, in connection with individual strategic transformation actions. For thethree months ended September 30, 2025 and 2024, these charges consist of$262 and $188 recorded as cost of sales,$2,594 and $387 recorded asresearch and development expense,$330 and $1,379 assales and marketing expense, and$7 and $911 asgeneral and administrative expenses, respectively. In thenine months ended September 30, 2025 and 2024, the Company recorded charges of$9,199 and $16,821, respectively, in connection with individual strategic transformation actions. For thenine months ended September 30, 2025 and 2024, these charges consist of$1,149 and $258 recorded ascost of sales,$4,517 and $2,155 recorded asresearch and development expense,$1,655 and $6,205 assales and marketing expense, and$1,878 and $8,203 asgeneral and administrative expenses, respectively.