Subject: Fwd: Am Well Thoughts
From: "Neil Callahan" <[email-masked]>
To: "Hunter Biden" <[email-masked]>
Date: Tue, 8 Apr 2014 14:49:39 -0400

Here are the pros and cons we came up with for AW.  LMK when you want to
talk.

I could get behind an investment, but we'd need to help them - they burn
money like it's going out of style, need to be way more analytical and not
just spend money on superficial ideas.

I could help them on the direct to consumer front, I had clients like AW in
a past life doing consumer marketing.  The key will be for them to this
efficiently and not blowing $50m on it which they could easily do.

---------- Forwarded message ----------
From: Neil Callahan (Rosemont Seneca) <[email-masked]>
Date: Fri, Mar 28, 2014 at 6:02 PM
Subject: Am Well Thoughts
To: John DeLoche <[email-masked]>, Sebastian Momtazi <
[email-masked]>
Cc: William Lee <[email-masked]>, [email-masked]

In prep for Monday, here are my thoughts:

Pros:

1.       Telehealth will become a common method for delivering health care
in the future, AW is an early market entrant with insurance relationships
and knowledge of how to deliver tele-medicine

2.       Well recognized founders who have had successful start ups and
exits - good track record

3.       Strong adoption of payers to make service available to their
covered lives

4.       Strong IP in process and technology in the telemedicine space

5.       $15m in revenue and growing

6.       Public markets like companies in this space

7.       Strategic buyers in this space have a tendency to pay a high price
for assets that don't have much value

Cons:

1.       In the middle of a business model pivot from enterprise software
to a director to consumer model as well as supplying the supply of
Doctors.  So a new skill set, need to a large brand development expense and
a large capital requirement to support the captive Doctor supply

2.       Poor stewards of capital:  $92.1M capital invested in last 6 years

3.       Losing money - massive annual loses and negative cash flow

4.       Investing in joint ventures that are capital intensive and masks
true revenue - $2-3m of annual management fees are coming from JVs they
have capitalized with balance sheet capital

5.       Capital plan is to raise an additional $25-50m in equity and then
immediately raise up to $100m in debt

6.       Poor market adoption in market where tele-medicine has been
approved, no clear evidence that adoption rates will go up in newly
approved States.

7.       Low market adoption, limited success in tele-medicine use cases

8.       Not clear is technology retains any value: tele-medicine can be
delivered on free apps like Skype, Google and Facebook

9.       Unclear how getting CMS to approve Medicare reimbursement helps in
the short term or ever.  Even is CMS approved it tomorrow, it would not
have an significant impact to revenue for 2-3 years before it's fully
implemented in  terms of processes and procedures.  Also, Medicare patients
are elderly and poor - they cannot afford to own smart phones ($500 apiece)
or afford to pay $50 a month for broadband internet access -so they would
not use tele-medicine via smart phone - maybe through a clinic, or retail
or kiosks environment where the computer hardware and internet access were
free of use for the patient.

10.   Price:  $500m pre-money, 33x next year's revenue is too high.  Maybe
10x next year's revenue would be more appealing, a 66%+ discount to last
round.

Neil Callahan

Rosemont Seneca Technology Partners

Carnegie Hall Tower

152 West 57th, 47th Floor

New York, NY 10019

212-933-9965 (o)

917-945-9516 (m)

866-749-8879 (f)

www.rstp.com

-- 
Neil Callahan
Rosemont Seneca Partners
917-945-951