Company: AMWL
Filing Date: 2025-02-12
Form Type: 10-K
Source: 0000950170-25-019024
Chunk: 167

Company: American Well Corp
Filing Date: 2025-02-12
Form: 10-K
Item: Item 1B
Chunk 167
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-Free Interest Rate—The risk-free interest rate is calculated using the average of the published interest rates of U.S. Treasury zero-coupon issues with maturities that are commensurate with the expected term. 

•Dividend Yield—The dividend yield assumption is zero, as we have no history of, or plans to make, dividend payments. 

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The fair value of the PSUs is estimated using a Monte-Carlo valuation simulation. Similar to stock options, the Company estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded stock price. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. The expected dividend yield is based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.

Recently Issued and Adopted Accounting Pronouncements 

Refer to Note 2 of our consolidated financial statements included elsewhere in this Annual Report for recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted as of the date of this Annual Report. 

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk 

We had cash and cash equivalents totaling $228.3 million, $372.0 million, and $538.5 million as of December 31, 2024, 2023 and 2022, respectively. As of December 31, 2024, 2023 and 2022 the Company held no investments. The cash and cash equivalents are held for investment in our business operations and 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. Interest rates rose some in early 2024 but have started to decline may continue to decline in 2025. Due in part to these factors, our future investment income may fall short of expectation due to