Delaware | 6324 | 98-1515192 | |||||||||||
(State or Incorporation or | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification Number) |
Stephen Thau, Esq. William L. Hughes, Esq. Niki Fang, Esq. Orrick, Herrington & Sutcliffe LLP The Orrick Building 405 Howard San Francisco, California 94105 Tel: (415) 773-5700 | Gia Lee, Esq. General Counsel and Secretary Clover Health Investments, Corp. 3401 Mallory Lane, Suite 210 Franklin, Tennessee 37067 (201) 432-2133 | Brian J. Cuneo, Esq. Latham & 140 Scott Drive Menlo Park, California 94025 (650) |
Large accelerated filer | Accelerated filer | ||||||||||||
Non-accelerated filer | Smaller reporting company | ☐ | |||||||||||
Emerging growth company |
| | ||||||||||||||||||||||||
Title of Each Class of Security Being Registered | | | Amount Being Registered | | | Proposed Maximum Offering Price per Security(1) | | | Proposed Maximum Aggregate Offering Price(1) | | | Amount of Registration Fee | | ||||||||||||
Units, each consisting of one Class A ordinary share, $0.0001 par value per share, and one-quarter of one redeemable warrant(2) | | | | | 69,000,000 | | | | | $ | 10.00 | | | | | $ | 690,000,000 | | | | | $ | 89,562 | | |
Class A ordinary shares included as part of the units(3) | | | | | 69,000,000 | | | | | | — | | | | | | — | | | | | | —(4) | | |
Redeemable warrants included as part of the units(3) | | | | | 17,250,000 | | | | | | — | | | | | | — | | | | | | —(4) | | |
Total | | | | | | | | | | | | | | | | $ | 690,000,000 | | | | | $ | 89,562(5) | | |
Title of Each Class of Securities to be Registered | Proposed Maximum Aggregate Offering Price(1)(2) | Amount of Registration Fee(2) | ||||||
Class A common stock, par value $0.0001 per share | $288,190,000 | $26,716 |
Per Share | Total | ||||||||||
Public offering price | $ | $ | |||||||||
Underwriting discounts and commissions(1) | $ | $ | |||||||||
Proceeds, before expenses, to us | $ | $ |
| | | Price to Public | | | Underwriting Discounts and Commissions(1) | | | Proceeds, Before Expenses, to Us | | |||||||||
Per Unit | | | | $ | 10.00 | | | | | $ | 0.55 | | | | | $ | 9.45 | | |
Total | | | | $ | 600,000,000 | | | | | $ | 33,000,000 | | | | | $ | 567,000,000 | | |
Citigroup | Deutsche Bank Securities |
SVB Leerink | Canaccord Genuity |
Vivek Garipalli, Chief Executive Officer | Andrew Toy, President & Chief Technology Officer |
Class A common stock offered by us | 35,000,000shares (or 40,250,000 shares if the option to purchase additional shares is exercised in full). | |||||||
Class A common stock to be outstanding after this offering | 313,308,964 shares (or 318,558,964 shares if the option to purchase additional shares is exercised in full | |||||||
Shares of Class B common stock to be outstanding after this offering | 142,318,711 shares. | |||||||
Total common stock outstanding after this offering | 455,627,675 shares (or 460,877,675 shares if the option to purchase additional shares is exercised in full). | |||||||
Use of Proceeds | We estimate that the net proceeds from the sale of shares of our Class A common stock in this offering will be approximately $236.7 million (or approximately $272.4 million if the underwriters’ option to purchase additional shares of our common stock from us is exercised in full), based on an assumed public offering price of $7.16 per share, the last reported sale price of our Class A common stock on Nasdaq on November 12, 2021, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. | |||||||
We intend to use the net proceeds from this offering for working capital and general corporate purposes. See the section titled “Use of Proceeds” for additional information. | ||||||||
Indications of Interest | One or more entities affiliated with Social Capital, an affiliate of our predecessor legal entity’s sponsor and of controlling persons of a beneficial owner of more than 10% of our Class A common stock (the “Prospective Investors”), have indicated an interest in purchasing up to $10.0 million of our Class A common stock offered in this offering at the public offering price. Because this indication of interest is not a binding agreement or commitment to purchase, the Prospective Investors may determine to purchase more, fewer or no shares in this offering, or the underwriters may determine to sell more, fewer or no shares to the Prospective Investors. The underwriters would receive the same discount from any of our shares of Class A common stock purchased by the Prospective Investors as they would from any other shares of Class A common stock sold to the public in this offering. | |||||||
Risk Factors | Investing in our Class A common stock involves a high degree of risk. See “Risk Factors” in this prospectus. | |||||||
Nasdaq Stock Market Symbol | “CLOV.” |
Nine Months Ended September 30, | Years Ended December 31, | ||||||||||||||||||||||
2021 | 2020 | 2020 | 2019 | ||||||||||||||||||||
(in thousands, except per share data) | |||||||||||||||||||||||
Statement of Operations Data: | |||||||||||||||||||||||
Revenues | |||||||||||||||||||||||
Premiums earned, net (Net of ceded premiums: nine months ended 2021: $370; nine months ended 2020: $383; year ended 2020: $599; year ended 2019: $832 | $ | 598,390 | $ | 501,100 | $ | 665,698 | $ | 456,926 | |||||||||||||||
Direct Contracting revenue | 439,020 | — | — | — | |||||||||||||||||||
Other income (1) | 2,550 | 5,555 | 7,190 | 5,340 | |||||||||||||||||||
Total revenues | 1,039,960 | 506,655 | 672,888 | 462,266 | |||||||||||||||||||
Operating Expenses | |||||||||||||||||||||||
Net medical claims incurred | 1,109,375 | 410,540 | 590,468 | 450,645 | |||||||||||||||||||
Salaries and benefits | 201,555 | 57,339 | 71,256 | 91,626 | |||||||||||||||||||
General and administrative expense | 129,983 | 79,798 | 120,444 | 94,757 | |||||||||||||||||||
Premium deficiency reserve expense (benefit) | 48,661 | (16,357) | (17,128) | 7,523 | |||||||||||||||||||
Depreciation and amortization | 398 | 413 | 555 | 551 | |||||||||||||||||||
Other expense | 191 | — | — | 363 | |||||||||||||||||||
Total operating expenses | 1,490,163 | 531,733 | 765,595 | 645,465 | |||||||||||||||||||
Loss from operations | (450,203) | (25,078) | (92,707) | (183,199) | |||||||||||||||||||
Change in fair value of warrants payable | (66,146) | 31,903 | 80,328 | 2,909 | |||||||||||||||||||
Interest expense | 2,817 | 25,560 | 35,990 | 23,155 | |||||||||||||||||||
Amortization of notes and securities discount | 13,681 | 14,935 | 21,118 | 15,913 | |||||||||||||||||||
(Gain) loss on derivative | — | (87,475) | (93,751) | 138,561 | |||||||||||||||||||
Net loss | $ | (400,555) | $ | (10,001) | $ | (136,392) | $ | (363,737) | |||||||||||||||
Net loss per share attributable to common stockholders—basic and diluted, after reverse capitalization (2) | $ | (0.98) | $ | (0.11) | $ | (1.54) | $ | (4.14) | |||||||||||||||
Weighted average number of common shares outstanding: | |||||||||||||||||||||||
Basic and diluted weighted average number of common shares and common share equivalents outstanding , after reverse capitalization | 410,417,493 | 88,616,116 | 88,691,582 | 87,829,419 | |||||||||||||||||||
Unrealized (loss) gain on available-for-sale investments | (620) | $ | 718 | $ | (36) | $ | 46 | ||||||||||||||||
Comprehensive loss | $ | (401,175) | $ | (9,283) | $ | (136,428) | $ | (363,691) |
Nine Months Ended September 30, | Years Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | 2020 | 2019 | ||||||||||||||||||||||||||||||||||||||||||||
Total | PMPM(1) | Total | PMPM(1) | Total | PMPM(1) | Total | PMPM(1) | ||||||||||||||||||||||||||||||||||||||||
(Premium and expense amounts in thousands, except PMPM amounts) | |||||||||||||||||||||||||||||||||||||||||||||||
Medicare Advantage Data: | |||||||||||||||||||||||||||||||||||||||||||||||
Medicare Advantage members as of period end (#) | 67,281 | N/A | 57,503 | N/A | 58,056 | N/A | 42,592 | N/A | |||||||||||||||||||||||||||||||||||||||
Premiums earned, gross | $ | 598,760 | $ | 1,000 | $ | 501,483 | $ | 986 | $ | 666,297 | $ | 975 | $ | 457,758 | $ | 927 | |||||||||||||||||||||||||||||||
Premiums earned, net | 598,390 | 999 | 501,100 | 985 | 665,698 | 976 | 456,926 | 925 | |||||||||||||||||||||||||||||||||||||||
Medical claim expense incurred, gross | 641,300 | 1,071 | 411,243 | 808 | 590,951 | 867 | 452,261 | 916 | |||||||||||||||||||||||||||||||||||||||
Net medical claims incurred | 640,624 | 1,069 | 410,540 | 807 | 590,468 | 865 | 450,645 | 912 | |||||||||||||||||||||||||||||||||||||||
Medical care ratio, gross(2) | 107.1 | % | N/A | 82.0 | % | N/A | 88.7 | % | N/A | 98.8 | % | N/A | |||||||||||||||||||||||||||||||||||
Medical care ratio, net | 107.1 | N/A | 81.9 | N/A | 88.7 | N/A | 98.6 | N/A |
Nine Months Ended September 30, 2021 | ||||||||||||||
(Revenue and claims amounts in thousands, except per-beneficiary per-month (PBPM) amounts) | Total | PBPM | ||||||||||||
Direct Contracting Data (1) | ||||||||||||||
Beneficiaries as of period end (#) | 61,818 | N/A | ||||||||||||
Direct Contracting revenue | $ | 439,020 | $ | 1,175 | ||||||||||
Net medical claims incurred | 469,972 | $ | 1,258 | |||||||||||
Direct Contracting margin(2) | 107.1 | % | N/A |
September 30, | As of December 31, | ||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
(in thousands) | |||||||||||||||||
Balance Sheet Data: | |||||||||||||||||
Cash and cash equivalents | $ | 202,264 | $ | 92,348 | $ | 67,598 | |||||||||||
Working capital | 329,032 | 25,554 | 111,068 | ||||||||||||||
Total assets | 952,478 | 267,252 | 337,021 | ||||||||||||||
Notes and securities payable, net of discount and deferred issuance costs | 19,929 | 106,413 | 57,917 | ||||||||||||||
Derivative liabilities | — | 44,810 | 138,561 | ||||||||||||||
Warrants payable | — | 97,782 | 17,672 |
Convertible preferred stock | — | 447,747 | 447,747 | ||||||||||||||
Total stockholders’ equity (deficit) | 412,290 | (613,193) | (488,537) |
| | | Without Over-Allotment Option | | | Over-Allotment Option Exercised | | ||||||
Gross proceeds | | | | | | | | | | | | | |
Gross proceeds from units offered to public(1) | | | | $ | 600,000,000 | | | | | $ | 690,000,000 | | |
Gross proceeds from private placement warrants offered in the private placement | | | | | 14,000,000 | | | | | | 15,800,000 | | |
Total gross proceeds | | | | $ | 614,000,000 | | | | | $ | 705,800,000 | | |
Estimated offering expenses(2) | | | | | | | | | | | | | |
Underwriting commissions (excluding deferred portion)(3)(4) | | | | $ | 12,000,000 | | | | | $ | 13,800,000 | | |
Legal fees and expenses | | | | | 350,000 | | | | | | 350,000 | | |
Accounting fees and expenses | | | | | 40,000 | | | | | | 40,000 | | |
Printing and engraving expenses | | | | | 35,000 | | | | | | 35,000 | | |
SEC expenses | | | | | 89,562 | | | | | | 89,562 | | |
FINRA expenses | | | | | 104,000 | | | | | | 104,000 | | |
Travel and road show | | | | | 40,000 | | | | | | 40,000 | | |
Directors and officers insurance premiums | | | | | 250,000 | | | | | | 250,000 | | |
NYSE listing and filing fees | | | | | 85,000 | | | | | | 85,000 | | |
Miscellaneous expenses(5) | | | | | 6,438 | | | | | | 6,438 | | |
Total estimated offering expenses (other than underwriting commissions) | | | | $ | 1,000,000 | | | | | $ | 1,000,000 | | |
Proceeds after estimated offering expenses | | | | $ | 601,000,000 | | | | | $ | 691,000,000 | | |
Held in trust account(3) | | | | $ | 600,000,000 | | | | | $ | 690,000,000 | | |
% of public offering size | | | | | 100% | | | | | | 100% | | |
Not held in trust account(2) | | | | $ | 1,000,000 | | | | | $ | 1,000,000 | | |
| | | Amount | | | % of Total | | ||||||
Legal, accounting, due diligence, travel and other expenses in connection with any business combination(7) | | | | $ | 350,000 | | | | | | 35.0% | | |
Legal and accounting fees related to regulatory reporting obligations | | | | | 150,000 | | | | | | 15.0% | | |
Payment for office space, administrative and support services | | | | | 240,000 | | | | | | 24.0% | | |
Reserve for liquidation expenses | | | | | 100,000 | | | | | | 10.0% | | |
NYSE continued listing fees | | | | | 85,000 | | | | | | 8.5% | | |
Other miscellaneous expenses | | | | | 75,000 | | | | | | 7.5% | | |
Total | | | | $ | 1,000,000 | | | | | | 100.0% | | |
As of September 30, 2021 | |||||||||||
Actual | As Adjusted(1) | ||||||||||
(in thousands, except share amounts) | |||||||||||
Cash and cash equivalents | $ | 202,264 | $ | 438,934 | |||||||
Notes and securities payable, net of discounts and deferred issuance costs | 19,929 | 19,929 | |||||||||
Warrants payable | — | — | |||||||||
Stockholders’ equity: | |||||||||||
Preferred stock, $0.0001 par value; 25,000,000 shares authorized; no shares issued and outstanding, actual and as adjusted | — | — | |||||||||
Class A common stock, $0.0001 par value; 2,500,000,000 shares authorized; 278,308,964 issued and outstanding, actual and 313,308,964 issued and outstanding, as adjusted | 28 | 31 | |||||||||
Class B common stock, $0.0001 par value; 500,000,000 shares authorized; 142,318,711 shares issued and outstanding, actual and as adjusted | 14 | 14 | |||||||||
Additional paid-in capital | 1,838,639 | 2,075,306 | |||||||||
Accumulated other comprehensive loss | (610) | (610) | |||||||||
Accumulated deficit | (1,429,537) | (1,429,537) | |||||||||
Less: Treasury stock, at cost; 14,730 shares held, actual and as adjusted | (147) | (147) | |||||||||
Non-controlling interest | 3,903 | 3,903 | |||||||||
Total stockholders’ equity | 412,290 | 648,960 | |||||||||
Total capitalization | $ | 432,219 | $ | 668,889 |
Assumed public offering price per share | $7.16 | ||||||||||
Historical net tangible book value per share as of September 30, 2021 | $ 0.97 | ||||||||||
Increase in net tangible book value per share attributable to new investors purchasing shares in this offering | $0.44 | ||||||||||
As adjusted net tangible book value per share after this offering | $1.42 | ||||||||||
Dilution in net tangible book value per share to new investors in this offering | $ 5.74 |
| Public offering price | | | | | | | | | | $ | 10.00 | | |
| Pro forma net tangible book value before this offering (after giving effect to the Funding Transaction) | | | | $ | (0.01) | | | | | | | | |
| Increase attributable to public shareholders | | | | | 0.30 | | | | | | | | |
| Pro forma net tangible book value after this offering and the sale of the private placement warrants | | | | | | | | | | | 0.29 | | |
| Dilution to public shareholders | | | | | | | | | | $ | 9.71 | | |
| Percentage of dilution to new investors | | | | | 97.1% | | | | | | | | |
| | | Shares Purchased | | | Total Consideration | | | Average Price Per Share | | |||||||||||||||||||||
| | | Number | | | Percentage | | | Amount | | | Percentage | | ||||||||||||||||||
Initial Shareholders(1)(2) | | | | | 15,000,000 | | | | | | 20.00% | | | | | $ | 25,000 | | | | | | 0.004% | | | | | $ | 0.002 | | |
Public Shareholders | | | | | 60,000,000 | | | | | | 80.00% | | | | | $ | 600,000,000 | | | | | | 99.996% | | | | | $ | 10.00 | | |
| | | | | 75,000,000 | | | | | | 100.00% | | | | | $ | 600,025,000 | | | | | | 100.000% | | | | | | | | |
|
| Numerator: | | | | | | | |
| Pro forma net tangible book value before this offering (after giving effect to the Funding Transaction) | | | | $ | (92,977) | | |
| Proceeds from this offering and sale of the private placement warrants, net of expenses (including non-deferred underwriting commissions) | | | | | 601,000,000 | | |
| Offering costs accrued for and paid in advance, excluded from net tangible book value before this offering | | | | | 100,346 | | |
| Less: deferred underwriters’ commissions payable | | | | | (21,000,000) | | |
| Less: amount of Class A ordinary shares subject to redemption to maintain net tangible assets of $5,000,001 | | | | | (575,007,360) | | |
| | | | | $ | 5,000,009 | | |
| Denominator: | | | | | | | |
| Class B ordinary shares issued and outstanding prior to this offering (after giving effect to the Funding Transaction) | | | | | 17,250,000 | | |
| Shares forfeited if over-allotment is not exercised | | | | | (2,250,000) | | |
| Class A ordinary shares included in the units offered | | | | | 60,000,000 | | |
| Less: shares subject to redemption to maintain net tangible assets of $5,000,001 | | | | | (57,500,736) | | |
| | | | | | 17,499,264 | | |
| | | December 31, 2019 | | |||||||||||||||
| | | Actual | | | Pro Forma for the Funding Transaction | | | As Adjusted(2) for the Tansactions | | |||||||||
Promissory note(1) | | | | $ | — | | | | | $ | 300,000 | | | | | $ | — | | |
Deferred underwriting commissions | | | | | — | | | | | | — | | | | | | 21,000,000 | | |
Class A ordinary shares, subject to redemption; 0 shares actual and pro forma for the Funding Transaction and 57,500,736 shares as adjusted for the Transactions(3) | | | | | — | | | | | | — | | | | | | 575,007,360 | | |
Shareholders’ equity: | | | | | | | | | | | | | | | | | | | |
Preferred shares, $0.0001 par value, 5,000,000 shares authorized (actual, pro forma for the Funding Transaction and as adjusted for the Transactions); none issued or outstanding (actual, pro forma for the Funding Transaction and as adjusted for the Transactions) | | | | | | | | | | | | | | | | | | | |
Ordinary shares, $0.0001 par value, 550,000,000 shares authorized (actual, pro forma for the Funding Transaction and adjusted for the Transactions) | | | | | | | | | | | | | | | | | | | |
Class A ordinary shares, $0.0001 par value, 500,000,000 shares authorized (actual, pro forma for the Funding Transaction and as adjusted for the Transactions); no shares issued and outstanding (actual and pro forma for the Funding Transaction); 2,499,264 shares issued and outstanding (excluding 57,500,736 shares subject to redemption) (as adjusted for the Transactions) | | | | | — | | | | | | — | | | | | | 250 | | |
Class B ordinary shares, $0.0001 par value, 50,000,000 shares authorized (actual, pro forma for the Funding Transaction and as adjusted for the Transactions); 1 issued and outstanding (actual), 17,250,000 issued and outstanding (pro forma for the Funding Transaction) and 15,000,000 issued and outstanding (as adjusted for the Transactions)(4) | | | | | — | | | | | | 1,725 | | | | | | 1,500 | | |
Additional paid-in capital(5) | | | | | — | | | | | | 23,275 | | | | | | 5,015,890 | | |
Accumulated deficit | | | | | (17,631) | | | | | | (17,631) | | | | | | (17,631) | | |
Total shareholders’ (deficit) equity | | | | | (17,631) | | | | | | 7,369 | | | | | | 5,000,009 | | |
Total capitalization | | | | $ | (17,631) | | | | | | 307,369 | | | | | $ | 601,007,369 | | |
|
Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
September 30, 2021 | June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 | March 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | PMPM (1) | Total | PMPM (1) | Total | PMPM (1) | Total | PMPM (1) | Total | PMPM (1) | Total | PMPM (1) | Total | PMPM (1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(dollars in thousands, except PMPM amounts) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Premiums earned, net | $ | 203,657 | $ | 1,012 | $ | 195,357 | $ | 980 | $ | 199,376 | $ | 1,005 | $ | 164,598 | $ | 950 | $ | 167,075 | $ | 972 | $ | 170,315 | $ | 1,000 | $ | 163,710 | $ | 984 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net medical claims incurred (2) | 208,661 | 1,037 | 216,785 | 1,087 | 214,432 | 1,081 | 179,928 | 1,034 | 144,846 | 842 | 119,366 | 701 | 146,328 | 880 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Medical care ratio, net (MCR) (3) | 102.5 | % | — | % | 111.0 | % | — | 107.6 | % | — | 109.3 | % | — | 86.7 | % | — | 70.1 | % | — | 89.4 | % | — |
Three Months Ended September 30, 2021 | Three Months Ended September 30, 2020 | Nine Months Ended September 30, 2021 | Year Ended December 31, 2020 | |||||||||||
MA GAAP MCR | 102.5 | % | 86.7 | % | 107.1 | % | 88.7 | % | ||||||
Adjustments: | ||||||||||||||
Direct COVID costs | (3.1) | % | (2.3) | % | (7.3) | % | (8.6) | % | ||||||
Unrealized 2020 risk adjustment | (3.8) | % | — | % | (3.8) | % | — | % | ||||||
Prior period development and other | 2.9 | % | 5.0 | % | (1.6) | % | 2.1 | % | ||||||
Excess (reduced) utilization due to COVID | (3.7) | % | 7.0 | % | (0.2) | % | 14.3 | % | ||||||
MA Normalized MCR (Non-GAAP) | 94.8 | % | 96.4 | % | 94.2 | % | 96.6 | % |
Nine Months Ended September 30, | Years Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | 2020 | 2019 | ||||||||||||||||||||||||||||||||||||||||||||
Total | PMPM | Total | PMPM | Total | PMPM | Total | PMPM | ||||||||||||||||||||||||||||||||||||||||
(Premium and expense amounts in thousands, except PMPM amounts) | |||||||||||||||||||||||||||||||||||||||||||||||
Medicare Advantage Data: | |||||||||||||||||||||||||||||||||||||||||||||||
Members as of period end (#) | 67,281 | N/A | 57,503 | N/A | 58,056 | N/A | 42,592 | N/A | |||||||||||||||||||||||||||||||||||||||
Premiums earned, gross | $ | 598,760 | $ | 1,000 | $ | 501,483 | $ | 986 | $ | 666,297 | $ | 975 | $ | 457,758 | $ | 927 | |||||||||||||||||||||||||||||||
Premiums earned, net | 598,390 | 999 | 501,100 | 985 | 665,698 | 976 | 456,926 | 925 | |||||||||||||||||||||||||||||||||||||||
Medical claim expense incurred, gross | 641,300 | 1,071 | 411,243 | 808 | 590,951 | 867 | 452,261 | 916 | |||||||||||||||||||||||||||||||||||||||
Net medical claims incurred | 640,624 | 1,069 | 410,540 | 807 | 590,468 | 865 | 450,645 | 912 | |||||||||||||||||||||||||||||||||||||||
Medical care ratio, gross(1) | 107.1 | % | N/A | 82.0 | % | N/A | 88.7 | % | N/A | 98.8 | % | N/A | |||||||||||||||||||||||||||||||||||
Medical care ratio, net | 107.1 | N/A | 81.9 | N/A | 88.7 | N/A | 98.6 | N/A |
Nine Months Ended September 30, 2021 | |||||||||||
Total | PBPM | ||||||||||
Direct Contracting Data (1) | (Revenue and claims amounts in thousands, except PBPM amounts) | ||||||||||
Beneficiaries as of period end (#) | 61,818 | N/A | |||||||||
Direct Contracting revenue | 439,020 | $ | 1,175 | ||||||||
Net medical claims incurred | 469,972 | 1,258 | |||||||||
Direct Contracting margin(2) | 107.1 | % | N/A |
Three Months Ended September 30, | |||||||||||||||||||||||
2021 | 2020 | Change ($) | Change (%) | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Revenues | |||||||||||||||||||||||
Premiums earned, net (Net of ceded premiums of $120 and $126 for the three months ended September 30, 2021 and 2020, respectively) | $ | 203,657 | $ | 167,075 | $ | 36,582 | 21.9 | % | |||||||||||||||
Direct Contracting revenue | 222,647 | — | 222,647 | * | |||||||||||||||||||
Other income | 859 | 1,994 | (1,135) | (56.9) | |||||||||||||||||||
Total revenues | 427,163 | 169,069 | 258,094 | 152.7 | |||||||||||||||||||
Operating expenses | |||||||||||||||||||||||
Net medical claims incurred | 436,422 | 144,846 | 291,576 | 201.3 | |||||||||||||||||||
Salaries and benefits | 73,364 | 16,628 | 56,736 | 341.2 | |||||||||||||||||||
General and administrative expenses | 45,749 | 29,847 | 15,902 | 53.3 | |||||||||||||||||||
Premium deficiency reserve expense (benefit) | 20,761 | (772) | 21,533 | 2789.2 | |||||||||||||||||||
Depreciation and amortization | 120 | 138 | (18) | (13.0) | |||||||||||||||||||
Total operating expenses | 576,416 | 190,687 | 385,729 | 202.3 | |||||||||||||||||||
Loss from operations | (149,253) | (21,618) | (127,635) | 590.4 | |||||||||||||||||||
Change in fair value of warrants payable | (115,152) | 20,029 | (135,181) | (674.9) | |||||||||||||||||||
Interest expense | 413 | 9,268 | (8,855) | (95.5) | |||||||||||||||||||
Amortization of notes and securities discount | 13 | 4,408 | (4,395) | (99.7) | |||||||||||||||||||
Gain on derivative | — | (68,081) | 68,081 | (100.0) | |||||||||||||||||||
Net (loss) income | $ | (34,527) | $ | 12,758 | $ | (47,285) | (370.6) | % |
Nine Months Ended September 30, | |||||||||||||||||||||||
2021 | 2020 | Change ($) | Change (%) | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Revenues | |||||||||||||||||||||||
Premiums earned, net (Net of ceded premiums of $370 and $383 for the nine months ended September 30, 2021 and 2020, respectively | $ | 598,390 | $ | 501,100 | $ | 97,290 | 19.4 | % | |||||||||||||||
Direct Contracting revenue | 439,020 | — | 439,020 | * | |||||||||||||||||||
Other income | 2,550 | 5,555 | (3,005) | (54.1) | |||||||||||||||||||
Total revenues | 1,039,960 | 506,655 | 533,305 | 105.3 | |||||||||||||||||||
Operating expenses | |||||||||||||||||||||||
Net medical claims incurred | 1,109,375 | 410,540 | 698,835 | 170.2 | |||||||||||||||||||
Salaries and benefits | 201,555 | 57,339 | 144,216 | 251.5 | |||||||||||||||||||
General and administrative expenses | 129,983 | 79,798 | 50,185 | 62.9 | |||||||||||||||||||
Premium deficiency reserve expense (benefit) | 48,661 | (16,357) | 65,018 | 397.5 | |||||||||||||||||||
Depreciation and amortization | 398 | 413 | (15) | (3.6) | |||||||||||||||||||
Other expense | 191 | — | 191 | * | |||||||||||||||||||
Total operating expenses | 1,490,163 | 531,733 | 958,430 | 180.2 | |||||||||||||||||||
Loss from operations | (450,203) | (25,078) | (425,125) | 1,695.2 | |||||||||||||||||||
Change in fair value of warrants payable | (66,146) | 31,903 | (98,049) | (307.3) | |||||||||||||||||||
Interest expense | 2,817 | 25,560 | (22,743) | (89.0) | |||||||||||||||||||
Amortization of notes and securities discount | 13,681 | 14,935 | (1,254) | (8.4) | |||||||||||||||||||
Gain on derivative | — | (87,475) | 87,475 | (100.0) | |||||||||||||||||||
Net loss | $ | (400,555) | $ | (10,001) | $ | (390,554) | 3,905.1 | % |
Years Ended December 31, | Change | Change | ||||||||||||||||||||||||
2020 | 2019 | ($) | (%) | |||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||
Premiums earned, net (Net of ceded premiums: 2020: $599; 2019: $832) | $ | 665,698 | $ | 456,926 | $ | 208,772 | 46 | |||||||||||||||||||
Other income | 4,214 | 801 | 3,413 | N/M | ||||||||||||||||||||||
Investment income, net | 2,976 | 4,539 | (1,563) | (34) | ||||||||||||||||||||||
Total revenues | 672,888 | 462,266 | 210,622 | 46 | ||||||||||||||||||||||
Expenses | ||||||||||||||||||||||||||
Net medical claims incurred | 590,468 | 450,645 | 139,823 | 31 | ||||||||||||||||||||||
Salaries and benefits(1) | 71,256 | 91,626 | (20,370) | (22) | ||||||||||||||||||||||
General and administrative expenses | 120,444 | 94,757 | 25,687 | 27 | ||||||||||||||||||||||
Premium deficiency reserve (benefit) expense | (17,128) | 7,523 | (24,651) | N/M | ||||||||||||||||||||||
Depreciation and amortization | 555 | 551 | 4 | 1 | ||||||||||||||||||||||
Other expense | — | 363 | (363) | N/M | ||||||||||||||||||||||
Total expenses | 765,595 | 645,465 | 120,130 | 19 | ||||||||||||||||||||||
Loss from operations | (92,707) | (183,199) | 90,492 | 49 | ||||||||||||||||||||||
Change in fair value of warrants expense | 80,328 | 2,909 | 77,419 | N/M | ||||||||||||||||||||||
Interest expense | 35,990 | 23,155 | 12,835 | 55 | ||||||||||||||||||||||
Amortization of notes and securities discount | 21,118 | 15,913 | 5,205 | 33 | ||||||||||||||||||||||
(Gain) loss on derivative | (93,751) | 138,561 | (232,312) | N/M | ||||||||||||||||||||||
Net loss | $ | (136,392) | $ | (363,737) | $ | 227,345 | 63 |
Years Ended December 31 | |||||||||||
2020 | 2019 | ||||||||||
Totals as a % of Revenue | |||||||||||
Revenues | |||||||||||
Premiums earned, net (Net of ceded premiums: 2020: $599; 2019:$832) | 99 | % | 99 | % | |||||||
Other income | 1 | — | |||||||||
Investment income, net | — | 1 | |||||||||
Total revenues | 100 | 100 | |||||||||
Expenses | |||||||||||
Net medical claims incurred | 88 | 97 | |||||||||
Salaries and benefits | 11 | 20 | |||||||||
General and administrative expenses | 18 | 20 | |||||||||
Premium deficiency reserve (benefit) expense | (3) | 2 | |||||||||
Depreciation and amortization | — | — | |||||||||
Other expense | — | — | |||||||||
Total expenses | 114 | 139 | |||||||||
Loss from operations | (14) | (39) | |||||||||
Change in fair value of warrants expense | 12 | 1 | |||||||||
Interest expense | 5 | 5 | |||||||||
Amortization of notes and securities discounts | 3 | 3 | |||||||||
(Gain) loss on derivative | (14) | 30 | |||||||||
Net loss | (20) | (78) |
Nine Months Ended September 30, | Years Ended December 31, | ||||||||||||||||||||||
2021 | 2020 | 2020 | 2019 | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Consolidated Statements of Cash Flows Data: | |||||||||||||||||||||||
Net cash used in operating activities | $ | (202,150) | $ | (58,594) | $ (118,498) | $ (159,875) | |||||||||||||||||
Net cash (used in) provided by investing activities | (328,956) | 69,847 | 137,404 | (181,908) | |||||||||||||||||||
Net cash provided by financing activities | 641,022 | 10,881 | 5,844 | 333,978 |
Payments Due by Period | |||||||||||||||||||||||||||||
Total(2) | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | |||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||
Convertible Securities(1) | $ | 393,827 | $ | — | $ | 393,827 | $ | — | $ | — | |||||||||||||||||||
Term Loan Notes | 30,925 | — | 30,925 | — | — | ||||||||||||||||||||||||
Operating lease obligations | 14,031 | 5,017 | 4,155 | 2,210 | 2,649 | ||||||||||||||||||||||||
Total | $ | 438,783 | $ | 5,017 | $ | 428,907 | $ | 2,210 | $ | 2,649 |
Nine Months Ended September 30, | Years Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | 2020 | 2019 | ||||||||||||||||||||||||||||||||||||||||||||
Total | % | Total | % | Total | % | Total | % | ||||||||||||||||||||||||||||||||||||||||
(dollars in thousands) | (dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||
IBNR | $ | 121,870 | 90.5 | % | $ | 83,497 | 89.2 | % | $ | 93,553 | 90 | % | $ | 69,178 | 88 | % | |||||||||||||||||||||||||||||||
Other unpaid claims | 7,953 | 5.9 | 6,778 | 7.2 | 6,681 | 6 | 5,941 | 8 | |||||||||||||||||||||||||||||||||||||||
Claims adjustment expense | 4,875 | 3.6 | 3,340 | 3.6 | 3,742 | 4 | 2,767 | 4 | |||||||||||||||||||||||||||||||||||||||
Total unpaid claims and claims adjustment expense | $ | 134,698 | 100.0 | % | $ | 93,615 | 100.0 | % | $ | 103,976 | 100 | % | $ | 77,886 | 100 | % |
Nine Months Ended September 30, 2021 | |||||||||||
Total | % | ||||||||||
(dollars in thousands) | |||||||||||
IBNR | $ | 5,512 | 100.0 | % | |||||||
Other unpaid claims | — | — | |||||||||
Claims adjustment expense | — | — | |||||||||
Total unpaid claims and claims adjustment expense | $ | 5,512 | 100.0 | % |
Executive Officers | |||||||||||||||||
Vivek Garipalli | 43 | Chief Executive Officer and | |||||||||||||||
President, Chief Technology Officer and Director | |||||||||||||||||
Interim Chief Financial Officer | |||||||||||||||||
General Counsel and Corporate Secretary | |||||||||||||||||
Prabhdeep Singh | Chief Growth Officer | ||||||||||||||||
Key Employees | |||||||||||||||||
Dr. | |||||||||||||||||
Dr. Kumar Dharmarajan | 42 | Chief Scientific Officer | |||||||||||||||
Dr. Mark Spektor | 51 | Chief Medical Officer | |||||||||||||||
Non-Employee Directors | |||||||||||||||||
Chelsea Clinton(2)(3) | 41 | Director | |||||||||||||||
Demetrios Kouzoukas(1) | 46 | Director | |||||||||||||||
William G. Robinson, Jr.(1)(2) | 57 | Director | |||||||||||||||
Lee A. Shapiro(1)(3) | 65 | Director | |||||||||||||||
Nathaniel S. Turner | 35 | Director |
Name and Principal Position | Fiscal Year | Salary | Option Awards(2) | All Other Compensation | Total ($) | ||||||||||||||||||||||||||||||
Vivek Garipalli | 2020 | $ | — | (1) | $ | — | $ | — | $ | — | |||||||||||||||||||||||||
Chief Executive Officer | 2019 | $ | — | (1) | — | — | — | ||||||||||||||||||||||||||||
Andrew Toy | 2020 | 415,385 | 8,190,695 | 11,805 (3) | 8,617,885 | ||||||||||||||||||||||||||||||
President and Chief Technology Officer | 2019 | 400,000 | — | 23,593 (4) | 423,593 | ||||||||||||||||||||||||||||||
Gia Lee | 2020 | 415,385 | 978,250 | 10,577 (5) | 1,404,212 | ||||||||||||||||||||||||||||||
General Counsel and Secretary | 2019 | 331,731 | 346,500 | — | 678,231 |
Number of Securities | Option Awards | |||||||||||||||||||||||||||||||
Name | Grant Date | Exercisable | Unexercisable | Exercise Price | Expiration Date | |||||||||||||||||||||||||||
Vivek Garipalli | — | — | — | $ | — | — | ||||||||||||||||||||||||||
Andrew Toy | 07/22/2018(2) | 631,033 | — | 1.67 | 07/21/2028 | |||||||||||||||||||||||||||
07/22/2018(3) | 3,155,168 | — | 1.67 | 07/21/2028 | ||||||||||||||||||||||||||||
02/04/2020(4) | 5,344,515 | — | 2.23 | 02/03/2030 | ||||||||||||||||||||||||||||
02/04/2020(5) | 3,669,607 | — | 5.45 | 02/03/2030 | ||||||||||||||||||||||||||||
Gia Lee | 03/26/2019(6)(7) | 393,364 | 175,356 | 1.94 | 03/25/2029 | |||||||||||||||||||||||||||
02/04/2020(7)(8) | 232,441 | 103,261 | 2.23 | 02/03/2030 | ||||||||||||||||||||||||||||
02/04/2020(7)(9) | 504,093 | 504,093 | 2.23 | 02/03/2030 |
Tranche | Number of Shares of Class B Common Stock | Stock Price Hurdle | ||||||||||||
1 | 5,571,164 | $ | 25 | |||||||||||
2 | 5,571,164 | 30 |
Name of stockholder | Shares of Series D | Total Purchase Price | ||||||||||||
Entities affiliated with Greenoaks Capital(1) | 3,199,044 | $ | 29,999,994 |
Name of holder | Aggregate Principal Amount | |||||||
Entities affiliated with Greenoaks Capital(1) | $ | 10,000,000 | ||||||
Caesar Clover, LLC(2) | $ | 10,000,000 |
Name of stockholder | Principal Aggregate Amount | Amount outstanding as of the Closing Date | ||||||||||||
Entities affiliated with Greenoaks Capital(1) | $ | 338,898,890 | $ | 383,353,794 | ||||||||||
Caesar Clover, LLC(2) | $ | 10,138,889 | $ | 11,650,330 |
| | | Number of Shares Beneficially Owned(2) | | | Approximate Percentage of Issued and Outstanding Ordinary Shares | | ||||||||||||
Name and Address of Beneficial Owner(1) | | | Before Offering | | | After Offering(2) | | ||||||||||||
SCH Sponsor Corp. III (our sponsor)(3) | | | | | 17,050,000 | | | | | | 98.8% | | | | | | 19.8% | | |
Chamath Palihapitiya(3) | | | | | 17,050,000 | | | | | | 98.8% | | | | | | 19.8% | | |
Ian Osborne(3) | | | | | 17,050,000 | | | | | | 98.8% | | | | | | 19.8% | | |
Steven Trieu | | | | | — | | | | | | — | | | | | | — | | |
Simon Williams | | | | | — | | | | | | — | | | | | | — | | |
Jacqueline D. Reses | | | | | 100,000 | | | | | | * | | | | | | * | | |
Dr. James Ryans | | | | | 100,000 | | | | | | * | | | | | | * | | |
All directors, officers and director nominees as a group (6 individuals) | | | | | 17,250,000 | | | | | | 100.0% | | | | | | 20.0% | | |
Name and Address of Beneficial Owner | Number of Shares of Class A Common Stock | % of Class A Common Stock | Number of Shares of Class B Common Stock | % of Class B Common Stock | % of Total Voting Power** | |||||||||||||||||||||||||||
5% Holders | ||||||||||||||||||||||||||||||||
ChaChaCha SPAC C LLC(1) | 29,158,480 | 10.5% | — | — | 1.7% | |||||||||||||||||||||||||||
Entities affiliated with Vivek Garipalli(2) | — | — | 83,584,543 | 58.7% | 49.1% | |||||||||||||||||||||||||||
Greenoaks Capital and affiliated entities(3) | — | — | 49,695,247 | 34.9% | 29.2% | |||||||||||||||||||||||||||
Neil Mehta and affiliated entities(4) | 272,526 | * | 49,695,247 | 34.9% | 29.2% | |||||||||||||||||||||||||||
Peretz Family Trust (5) | 119,903 | * | 49,695,247 | 34.9% | 29.2% | |||||||||||||||||||||||||||
Executive Officers and Directors | ||||||||||||||||||||||||||||||||
Vivek Garipalli(2) | — | — | 83,584,543 | 58.7% | 49.1% | |||||||||||||||||||||||||||
Andrew Toy(6) | — | 12,790,323 | 8.2% | 7.0% | ||||||||||||||||||||||||||||
Gia Lee(6) | — | 1,212,837 | * | * | ||||||||||||||||||||||||||||
Chelsea Clinton(6) | — | — | 536,648 | * | * | |||||||||||||||||||||||||||
Demetrios Kouzoukas | — | — | — | — | — | |||||||||||||||||||||||||||
William G. Robinson, Jr. | — | — | — | — | — | |||||||||||||||||||||||||||
Lee Shapiro | — | — | — | — | — | |||||||||||||||||||||||||||
Nat Turner(7) | — | — | 2,565,954 | 1.8% | 1.5% | |||||||||||||||||||||||||||
All directors and executive officers as a group | ||||||||||||||||||||||||||||||||
(10 individuals) (8) | — | — | 101,207,322 | 64.3% | 54.6% |
Name and Address of Beneficial Owner | Number of Shares of Class A Common Stock | % of Class A Common Stock | Number of Shares of Class B Common Stock | % of Class B Common Stock | % of Total Voting Power** | |||||||||||||||||||||||||||
5% Holders | ||||||||||||||||||||||||||||||||
ChaChaCha SPAC C LLC(1) | 29,158,480 | 10.5% | — | — | 1.7% | |||||||||||||||||||||||||||
Entities affiliated with Vivek Garipalli(2) | — | — | 83,584,543 | 58.7% | 49.1% | |||||||||||||||||||||||||||
Greenoaks Capital and affiliated entities(3) | — | — | 49,695,247 | 34.9% | 29.2% | |||||||||||||||||||||||||||
Neil Mehta and affiliated entities(4) | 272,526 | * | 49,695,247 | 34.9% | 29.2% | |||||||||||||||||||||||||||
Peretz Family Trust (5) | 119,903 | * | 49,695,247 | 34.9% | 29.2% | |||||||||||||||||||||||||||
Executive Officers and Directors | ||||||||||||||||||||||||||||||||
Vivek Garipalli(2) | — | — | 83,584,543 | 58.7% | 49.1% | |||||||||||||||||||||||||||
Andrew Toy(6) | — | 12,790,323 | 8.2% | 7.0% | ||||||||||||||||||||||||||||
Gia Lee(6) | — | 1,212,837 | * | * | ||||||||||||||||||||||||||||
Chelsea Clinton(6) | — | — | 536,648 | * | * | |||||||||||||||||||||||||||
Demetrios Kouzoukas | — | — | — | — | — | |||||||||||||||||||||||||||
William G. Robinson, Jr. | — | — | — | — | — | |||||||||||||||||||||||||||
Lee Shapiro | — | — | — | — | — | |||||||||||||||||||||||||||
Nat Turner(7) | — | — | 2,565,954 | 1.8% | 1.5% | |||||||||||||||||||||||||||
All directors and executive officers as a group | ||||||||||||||||||||||||||||||||
(10 individuals) (8) | — | — | 101,207,322 | 64.3% | 54.6% |
Redemption Date | | | Fair Market Value of Class A Ordinary Shares | | |||||||||||||||||||||||||||||||||||||||||||||||||||
(period to expiration of warrants) | | | ≤10.00 | | | 11.00 | | | 12.00 | | | 13.00 | | | 14.00 | | | 15.00 | | | 16.00 | | | 17.00 | | | ≥18.00 | | |||||||||||||||||||||||||||
60 months | | | | | 0.261 | | | | | | 0.281 | | | | | | 0.297 | | | | | | 0.311 | | | | | | 0.324 | | | | | | 0.337 | | | | | | 0.348 | | | | | | 0.358 | | | | | | 0.361 | | |
57 months | | | | | 0.257 | | | | | | 0.277 | | | | | | 0.294 | | | | | | 0.310 | | | | | | 0.324 | | | | | | 0.337 | | | | | | 0.348 | | | | | | 0.358 | | | | | | 0.361 | | |
54 months | | | | | 0.252 | | | | | | 0.272 | | | | | | 0.291 | | | | | | 0.307 | | | | | | 0.322 | | | | | | 0.335 | | | | | | 0.347 | | | | | | 0.357 | | | | | | 0.361 | | |
51 months | | | | | 0.246 | | | | | | 0.268 | | | | | | 0.287 | | | | | | 0.304 | | | | | | 0.320 | | | | | | 0.333 | | | | | | 0.346 | | | | | | 0.357 | | | | | | 0.361 | | |
48 months | | | | | 0.241 | | | | | | 0.263 | | | | | | 0.283 | | | | | | 0.301 | | | | | | 0.317 | | | | | | 0.332 | | | | | | 0.344 | | | | | | 0.356 | | | | | | 0.361 | | |
45 months | | | | | 0.235 | | | | | | 0.258 | | | | | | 0.279 | | | | | | 0.298 | | | | | | 0.315 | | | | | | 0.330 | | | | | | 0.343 | | | | | | 0.356 | | | | | | 0.361 | | |
42 months | | | | | 0.228 | | | | | | 0.252 | | | | | | 0.274 | | | | | | 0.294 | | | | | | 0.312 | | | | | | 0.328 | | | | | | 0.342 | | | | | | 0.355 | | | | | | 0.361 | | |
39 months | | | | | 0.221 | | | | | | 0.246 | | | | | | 0.269 | | | | | | 0.290 | | | | | | 0.309 | | | | | | 0.325 | | | | | | 0.340 | | | | | | 0.354 | | | | | | 0.361 | | |
36 months | | | | | 0.213 | | | | | | 0.239 | | | | | | 0.263 | | | | | | 0.285 | | | | | | 0.305 | | | | | | 0.323 | | | | | | 0.339 | | | | | | 0.353 | | | | | | 0.361 | | |
33 months | | | | | 0.205 | | | | | | 0.232 | | | | | | 0.257 | | | | | | 0.280 | | | | | | 0.301 | | | | | | 0.320 | | | | | | 0.337 | | | | | | 0.352 | | | | | | 0.361 | | |
30 months | | | | | 0.196 | | | | | | 0.224 | | | | | | 0.250 | | | | | | 0.274 | | | | | | 0.297 | | | | | | 0.316 | | | | | | 0.335 | | | | | | 0.351 | | | | | | 0.361 | | |
27 months | | | | | 0.185 | | | | | | 0.214 | | | | | | 0.242 | | | | | | 0.268 | | | | | | 0.291 | | | | | | 0.313 | | | | | | 0.332 | | | | | | 0.350 | | | | | | 0.361 | | |
24 months | | | | | 0.173 | | | | | | 0.204 | | | | | | 0.233 | | | | | | 0.260 | | | | | | 0.285 | | | | | | 0.308 | | | | | | 0.329 | | | | | | 0.348 | | | | | | 0.361 | | |
21 months | | | | | 0.161 | | | | | | 0.193 | | | | | | 0.223 | | | | | | 0.252 | | | | | | 0.279 | | | | | | 0.304 | | | | | | 0.326 | | | | | | 0.347 | | | | | | 0.361 | | |
18 months | | | | | 0.146 | | | | | | 0.179 | | | | | | 0.211 | | | | | | 0.242 | | | | | | 0.271 | | | | | | 0.298 | | | | | | 0.322 | | | | | | 0.345 | | | | | | 0.361 | | |
15 months | | | | | 0.130 | | | | | | 0.164 | | | | | | 0.197 | | | | | | 0.230 | | | | | | 0.262 | | | | | | 0.291 | | | | | | 0.317 | | | | | | 0.342 | | | | | | 0.361 | | |
12 months | | | | | 0.111 | | | | | | 0.146 | | | | | | 0.181 | | | | | | 0.216 | | | | | | 0.250 | | | | | | 0.282 | | | | | | 0.312 | | | | | | 0.339 | | | | | | 0.361 | | |
9 months | | | | | 0.090 | | | | | | 0.125 | | | | | | 0.162 | | | | | | 0.199 | | | | | | 0.237 | | | | | | 0.272 | | | | | | 0.305 | | | | | | 0.336 | | | | | | 0.361 | | |
6 months | | | | | 0.065 | | | | | | 0.099 | | | | | | 0.137 | | | | | | 0.178 | | | | | | 0.219 | | | | | | 0.259 | | | | | | 0.296 | | | | | | 0.331 | | | | | | 0.361 | | |
3 months | | | | | 0.034 | | | | | | 0.065 | | | | | | 0.104 | | | | | | 0.150 | | | | | | 0.197 | | | | | | 0.243 | | | | | | 0.286 | | | | | | 0.326 | | | | | | 0.361 | | |
0 months | | | | | — | | | | | | — | | | | | | 0.042 | | | | | | 0.115 | | | | | | 0.179 | | | | | | 0.233 | | | | | | 0.281 | | | | | | 0.323 | | | | | | 0.361 | | |
Name and Address of Beneficial Owner | Number of Shares of Class A Common Stock | % of Class A Common Stock | Number of Shares of Class B Common Stock | % of Class B Common Stock | % of Total Voting Power** | |||||||||||||||||||||||||||
5% Holders | ||||||||||||||||||||||||||||||||
ChaChaCha SPAC C LLC(1) | 29,158,480 | 10.5% | — | — | 1.7% | |||||||||||||||||||||||||||
Entities affiliated with Vivek Garipalli(2) | — | — | 83,584,543 | 58.7% | 49.1% | |||||||||||||||||||||||||||
Greenoaks Capital and affiliated entities(3) | — | — | 49,695,247 | 34.9% | 29.2% | |||||||||||||||||||||||||||
Neil Mehta and affiliated entities(4) | 272,526 | * | 49,695,247 | 34.9% | 29.2% | |||||||||||||||||||||||||||
Peretz Family Trust (5) | 119,903 | * | 49,695,247 | 34.9% | 29.2% | |||||||||||||||||||||||||||
Executive Officers and Directors | ||||||||||||||||||||||||||||||||
Vivek Garipalli(2) | — | — | 83,584,543 | 58.7% | 49.1% | |||||||||||||||||||||||||||
Andrew Toy(6) | — | 12,790,323 | 8.2% | 7.0% | ||||||||||||||||||||||||||||
Gia Lee(6) | — | 1,212,837 | * | * | ||||||||||||||||||||||||||||
Chelsea Clinton(6) | — | — | 536,648 | * | * | |||||||||||||||||||||||||||
Demetrios Kouzoukas | — | — | — | — | — | |||||||||||||||||||||||||||
William G. Robinson, Jr. | — | — | — | — | — | |||||||||||||||||||||||||||
Lee Shapiro | — | — | — | — | — | |||||||||||||||||||||||||||
Nat Turner(7) | — | — | 2,565,954 | 1.8% | 1.5% | |||||||||||||||||||||||||||
All directors and executive officers as a group | ||||||||||||||||||||||||||||||||
(10 individuals) (8) | — | — | 101,207,322 | 64.3% | 54.6% |
Shares | |||||||||||||
Deutsche Bank Securities Inc. | |||||||||||||
SVB Leerink LLC | |||||||||||||
Canaccord Genuity LLC | |||||||||||||
Total | 35,000,000 |
| | | Per Unit(1) | | | Total(1) | | ||||||||||||||||||
| | | Without Over-allotment | | | With Over-allotment(2) | | | Without Over-allotment | | | With Over-allotment | | ||||||||||||
Underwriting Discounts and Commissions paid by us | | | | $ | 0.55 | | | | | $ | 0.55 | | | | | $ | 33,000,000 | | | | | $ | 37,950,000 | | |
Total Fees | |||||||||||
No Exercise | Full Exercise | ||||||||||
Per share | $ | $ | |||||||||
Total | $ | $ |
Consolidated Financial Statements (Audited) | ||||||||||||
Years ended December 31, 2020 and December 31, 2019 | ||||||||||||
Condensed Consolidated Financial Statements | ||||||||||||
As of September 30, 2021 (unaudited) and December 31, 2020 and for the three and nine months ended September 30, 2021 (unaudited) and September 30, 2020 (unaudited) | ||||||||||||
Condensed Consolidated Balance Sheets (unaudited) | ||||||||||||
Condensed Consolidated Statements of Cash Flows (unaudited) | ||||||||||||
December 31, | |||||||||||
2020 | 2019 | ||||||||||
Assets: | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | 92,348 | $ | 67,598 | |||||||
Short-term investments | 4,098 | 138,638 | |||||||||
Investment securities, held-to-maturity (Fair value: 2020: $266; 2019: $0) | 265 | — | |||||||||
Accrued retrospective premiums | 34,829 | 13,225 | |||||||||
Other receivables | 11,368 | 5,503 | |||||||||
Reinsurance recoverable | — | 481 | |||||||||
Healthcare receivables | 38,745 | 25,819 | |||||||||
Other assets, current | 8,129 | 1,692 | |||||||||
Total current assets | 189,782 | 252,956 | |||||||||
Investment securities, available-for-sale, at fair value (Amortized cost: 2020: $53,953; 2019: $56,382) | 53,963 | 56,428 | |||||||||
Investment securities, held-to-maturity (Fair value: 2020: $471; 2019: $685) | 429 | 663 | |||||||||
Other assets | 8,885 | 9,704 | |||||||||
Property and equipment, net | 2,078 | 1,940 | |||||||||
Operating lease right-of-use assets | 7,882 | 11,097 | |||||||||
Goodwill | 1,243 | 1,243 | |||||||||
Other intangible assets | 2,990 | 2,990 | |||||||||
Total assets | $ | 267,252 | $ | 337,021 | |||||||
Liabilities and stockholders’ deficit | |||||||||||
Liabilities: | |||||||||||
Current liabilities | |||||||||||
Unpaid claims | $ | 103,976 | $ | 77,886 | |||||||
Accounts payable and accrued expenses | 30,671 | 19,826 | |||||||||
Accrued salaries and benefits | 3,978 | 3,792 | |||||||||
Operating lease liabilities | 4,795 | 4,761 | |||||||||
Current portion of notes and securities payable | 20,803 | 18,481 | |||||||||
Premium deficiency reserve | — | 17,128 | |||||||||
Other liabilities, current | 5 | 14 | |||||||||
Total current liabilities | 164,228 | 141,888 | |||||||||
Other liabilities | 13,116 | 11,729 | |||||||||
Notes and securities payable, net of discount and deferred issuance costs | 106,413 | 57,917 | |||||||||
Derivative liabilities | 44,810 | 138,561 | |||||||||
Warrants payable | 97,782 | 17,672 | |||||||||
Long-term operating lease liabilities | 6,349 | 10,044 | |||||||||
Total liabilities | 432,698 | 377,811 | |||||||||
Commitments and contingencies (Note 22) | 0 | 0 | |||||||||
Convertible Preferred stock (Series Seed A, A-1, B, C, and D), $0.0001 par value; 155,387,025 shares authorized as of December 31, 2020 and 2019; 139,444,346 shares; after reverse capitalization, issued and outstanding as of December 31, 2020 and 2019; aggregate liquidation preference of $470,256 as of December 31, 2020 | 447,747 | 447,747 |
Stockholders’ deficit: | |||||||||||
Common stock, $0.0001 par value, 351,572,668 shares authorized; 89,972,184 and 88,674,206 issued; and 89,206,266 and 88,279,119 shares outstanding; after reverse capitalization as of December 31, 2020 and 2019, respectively | 9 | 9 | |||||||||
Additional paid-in capital | 411,867 | 403,041 | |||||||||
Accumulated other comprehensive income | 10 | 46 | |||||||||
Accumulated deficit | (1,028,982) | (891,633) | |||||||||
Clover shareholders’ deficit | (617,096) | (488,537) | |||||||||
Non-controlling interest | 3,903 | — | |||||||||
Total stockholders’ deficit | (613,193) | (488,537) | |||||||||
Total liabilities, convertible preferred stock and stockholders’ deficit | $ | 267,252 | $ | 337,021 |
For the years ended December 31, | |||||||||||
2020 | 2019 | ||||||||||
Revenues: | |||||||||||
Premiums earned, net (Net of ceded premiums: 2020: $599; 2019: $832) | $ | 665,698 | $ | 456,926 | |||||||
Other income | 4,214 | 801 | |||||||||
Investment income, net | 2,976 | 4,539 | |||||||||
Total revenues | 672,888 | 462,266 | |||||||||
Expenses: | |||||||||||
Net medical claims incurred | 590,468 | 450,645 | |||||||||
Salaries and benefits | 71,256 | 91,626 | |||||||||
General and administrative expenses | 120,444 | 94,757 | |||||||||
Premium deficiency reserve (benefit) expense | (17,128) | 7,523 | |||||||||
Depreciation and amortization | 555 | 551 | |||||||||
Other expense | — | 363 | |||||||||
Total expenses | 765,595 | 645,465 | |||||||||
Loss from operations | (92,707) | (183,199) | |||||||||
Change in fair value of warrants expense | 80,328 | 2,909 | |||||||||
Interest expense | 35,990 | 23,155 | |||||||||
Amortization of notes and securities discount | 21,118 | 15,913 | |||||||||
(Gain) loss on derivative | (93,751) | 138,561 | |||||||||
Net loss | $ | (136,392) | $ | (363,737) | |||||||
Per share data: | |||||||||||
Net loss per share attributable to common shareholders – basic and diluted, after reverse capitalization | $ | (1.54) | $ | (4.14) | |||||||
Weighted average number of common shares outstanding: | |||||||||||
Basic and diluted weighted average number of common shares and common share equivalents outstanding, after reverse capitalization | 88,691,582 | 87,829,419 | |||||||||
Unrealized (loss) gain on available-for-sale investments | $ | (36) | $ | 46 | |||||||
Comprehensive loss | $ | (136,428) | $ | (363,691) |
Convertible Preferred stock | Common stock | Additional paid-in capital | Accumulated deficit | Accumulated other comprehensive income (loss) | Noncontrolling interest | Total stockholders’ deficit | ||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2018 | 67,427,138 | $ | 447,747 | 42,243,445 | $ | 4 | $ | 25,318 | $ | (527,896) | $ | — | $ | — | $ | (502,574) | ||||||||||||||||||||||||||||||||||||||||
Retroactive application of reverse capitalization | 72,017,208 | — | 45,119,147 | 5 | (5) | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Adjusted balance, beginning of period | 139,444,346 | 447,747 | 87,362,592 | 9 | 25,313 | (527,896) | — | — | (502,574) | |||||||||||||||||||||||||||||||||||||||||||||||
Stock issuance for exercise of stock options, net of early exercise liability | — | — | 443,179 | — | 601 | — | — | — | 601 | |||||||||||||||||||||||||||||||||||||||||||||||
Retroactive application of reverse capitalization | — | — | 473,348 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | 3,301 | — | — | — | 3,301 | |||||||||||||||||||||||||||||||||||||||||||||||
Unrealized holdings gain on investments securities, available-for-sale | — | — | — | — | — | — | 46 | — | 46 | |||||||||||||||||||||||||||||||||||||||||||||||
Beneficial conversion feature | — | — | — | — | 373,826 | — | — | — | 373,826 | |||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | (363,737) | — | — | (363,737) | |||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2019 | 139,444,346 | $ | 447,747 | 88,279,119 | $ | 9 | $ | 403,041 | $ | (891,633) | $ | 46 | $ | — | $ | (488,537) | ||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2019 | 67,427,138 | $ | 447,747 | 42,686,624 | $ | 4 | $ | 403,046 | $ | (891,633) | $ | 46 | $ | — | $ | (488,537) | ||||||||||||||||||||||||||||||||||||||||
Retroactive application of reverse capitalization | 72,017,208 | — | 45,592,495 | 5 | (5) | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Adjusted balance, beginning of period | 139,444,346 | 447,747 | 88,279,119 | 9 | 403,041 | (891,633) | 46 | — | (488,537) | |||||||||||||||||||||||||||||||||||||||||||||||
Stock issuance for exercise of stock options, net of early exercise liability | — | — | 627,626 | — | 1,748 | — | — | — | 1,748 | |||||||||||||||||||||||||||||||||||||||||||||||
Retroactive application of reverse capitalization | — | — | 670,351 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | 7,078 | — | — | — | 7,078 | |||||||||||||||||||||||||||||||||||||||||||||||
Buyback and subsequent cancellation of common shares | — | — | (179,312) | — | — | (957) | — | — | (957) | |||||||||||||||||||||||||||||||||||||||||||||||
Retroactive application of reverse capitalization | — | — | (191,518) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Unrealized holdings loss on investment securities, available for sale | — | — | — | — | — | — | (36) | — | (36) | |||||||||||||||||||||||||||||||||||||||||||||||
Interests issued | — | — | — | — | — | — | — | 3,903 | 3,903 | |||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | (136,392) | — | — | (136,392) | |||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2020 | 139,444,346 | $ | 447,747 | 89,206,266 | $ | 9 | $ | 411,867 | $ | (1,028,982) | $ | 10 | $ | 3,903 | $ | (613,193) |
Years ended December 31, | |||||||||||
2020 | 2019 | ||||||||||
Cash flows from operating activities | |||||||||||
Net loss | $ | (136,392) | $ | (363,737) | |||||||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
Depreciation and amortization expense | 555 | 551 | |||||||||
Amortization of notes and securities discount | 21,084 | 15,807 | |||||||||
Loss on disposal of property and equipment | — | 23 | |||||||||
Stock-based compensation expense | 7,078 | 3,301 | |||||||||
Paid in kind interest | 28,334 | 11,633 | |||||||||
Change in fair value of warrants expense | 80,110 | 2,836 | |||||||||
Change in derivative liabilities | (93,751) | 138,561 | |||||||||
Accretion, net of amortization | (195) | (2,857) | |||||||||
Net realized gains on investment securities | (1,114) | (107) | |||||||||
Amortization of warrants | 218 | 73 | |||||||||
Amortization of debt issuance costs | 34 | 506 | |||||||||
Asset impairment charges | — | 1,632 | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Accrued retrospective premiums | (21,604) | 7,546 | |||||||||
Other receivables | (5,865) | 4,115 | |||||||||
Reinsurance recoverable | 481 | 63,610 | |||||||||
Other assets | (5,470) | (274) | |||||||||
Healthcare receivables | (12,926) | (14,511) | |||||||||
Operating lease right-of-use assets | 3,257 | (11,933) | |||||||||
Unpaid claims | 26,090 | 23,882 | |||||||||
Accounts payable and accrued expenses | 10,845 | 6,298 | |||||||||
Accrued salaries and benefits | 186 | (2,235) | |||||||||
Premium deficiency (benefit) reserve | (17,128) | 7,523 | |||||||||
Reinsurance premium payable | — | (64,414) | |||||||||
Deferred rent | — | (2,677) | |||||||||
Other liabilities | 1,378 | 168 | |||||||||
Operating lease liabilities | (3,703) | 14,805 | |||||||||
Net cash used in operating activities | (118,498) | (159,875) | |||||||||
Cash flows from investing activities | |||||||||||
Purchases of available-for-sale securities | (174,318) | (505,545) | |||||||||
Proceeds from sales of available-for-sale securities | 248,664 | 269,205 | |||||||||
Proceeds from maturities of available-for-sale securities | 63,751 | 46,415 | |||||||||
Proceeds from maturities of held-to-maturity securities | — | 9,220 | |||||||||
Acquisition of business, net of cash acquired | — | (1,180) | |||||||||
Purchases of property and equipment | (693) | (23) | |||||||||
Net cash provided by (used in) investing activities | 137,404 | (181,908) | |||||||||
Cash flows from financing activities | |||||||||||
Proceeds from issuance of convertible securities | 20,000 | 343,410 | |||||||||
Deferred financing costs | (98) | (363) | |||||||||
Payment of notes payable principal | (18,752) | (9,670) |
Issuance of common stock, net of early exercise liability | 1,748 | 601 | |||||||||
Buyback and subsequent cancellation of common stock | (957) | — | |||||||||
Issuance of noncontrolling interest | 3,903 | — | |||||||||
Net cash provided by financing activities | 5,844 | 333,978 | |||||||||
Net increase (decrease) in cash and cash equivalents | 24,750 | (7,805) | |||||||||
Cash and cash equivalents, beginning of year | 67,598 | 75,403 | |||||||||
Cash and cash equivalents, end of year | 92,348 | 67,598 | |||||||||
Supplemental cash flow disclosures | |||||||||||
Cash paid during the year for interest | $ | 4,578 | $ | 6,257 | |||||||
Cash paid during the year for health insurance industry fee | 8,022 | — | |||||||||
Supplemental disclosure of non-cash investing and financing activities | |||||||||||
Fair value of warrants issued in connection with notes payable | $ | — | $ | 17,672 | |||||||
Settlement of bridge loan in connection with convertible securities | — | 30,416 | |||||||||
Right-of-use assets obtained in exchange for lease liabilities | 42 | 459 |
Date | Description | As previously reported | 1/7/21 conversion ratio | Reverse capitalized shares | ||||||||||||||||||||||
12/31/2019 | Convertible preferred shares authorized | 75,136,086 | 2.0681 | 155,387,025 | ||||||||||||||||||||||
12/31/2019 | Convertible preferred shares issued and outstanding | 67,427,138 | 2.0681 | 139,444,346 | ||||||||||||||||||||||
12/31/2019 | Common shares authorized | 170,000,000 | 2.0681 | 351,572,668 | ||||||||||||||||||||||
12/31/2019 | Common shares issued | 42,877,665 | 2.0681 | 88,674,206 | ||||||||||||||||||||||
12/31/2019 | Common shares outstanding | 42,686,624 | 2.0681 | 88,279,119 | ||||||||||||||||||||||
12/31/2020 | Convertible preferred shares authorized | 75,136,086 | 2.0681 | 155,387,025 | ||||||||||||||||||||||
12/31/2020 | Convertible preferred shares issued and outstanding | 67,427,138 | 2.0681 | 139,444,346 | ||||||||||||||||||||||
12/31/2020 | Common shares authorized | 170,000,000 | 2.0681 | 351,572,668 | ||||||||||||||||||||||
12/31/2020 | Common shares issued | 43,505,291 | 2.0681 | 89,972,184 | ||||||||||||||||||||||
12/31/2020 | Common shares outstanding | 43,134,938 | 2.0681 | 89,206,266 |
Date | Description | As previously reported | 1/7/21 conversion ratio | Reverse capitalized amounts | ||||||||||||||||||||||
12/31/2019 | Net loss per share attributable to common shareholders - basic and diluted | $ | (8.56) | 2.0681 | $ | (4.14) | ||||||||||||||||||||
12/31/2019 | Basic and diluted weighted average number of common shares and common shares equivalents outstanding | 42,469,175 | 2.0681 | 87,829,419 | ||||||||||||||||||||||
12/31/2020 | Net loss per share attributable to common shareholders - basic and diluted | $ | (3.18) | 2.0681 | $ | (1.54) | ||||||||||||||||||||
12/31/2020 | Basic and diluted weighted average number of common shares and common shares equivalents outstanding | 42,886,067 | 2.0681 | 88,691,582 |
Date | Description | As previously reported | 1/7/21 conversion ratio | Reverse capitalized amounts | ||||||||||||||||||||||
12/31/2018 | Convertible preferred stock - shares | 67,427,138 | 2.0681 | 139,444,346 | ||||||||||||||||||||||
12/31/2018 | Common stock - shares | 42,243,445 | 2.0681 | 87,362,592 | ||||||||||||||||||||||
12/31/2018 | Common stock - amount | $ | 4 | 2.0681 | $ | 9 |
December 31, 2020 | Amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | ||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Investment securities, held-to-maturity: | ||||||||||||||||||||||||||
U.S. government and government agencies and authorities | $ | 694 | $ | 43 | $ | — | $ | 737 | ||||||||||||||||||
Investment securities, available-for-sale: | ||||||||||||||||||||||||||
U.S. government and government agencies and authorities | 53,953 | 51 | (41) | 53,963 | ||||||||||||||||||||||
Total investment securities | $ | 54,647 | $ | 94 | $ | (41) | $ | 54,700 |
December 31, 2019 | Amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | ||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Investment securities, held-to-maturity: | ||||||||||||||||||||||||||
U.S. government and government agencies and authorities | $ | 663 | $ | 22 | $ | — | $ | 685 | ||||||||||||||||||
Investment securities, available-for-sale: | ||||||||||||||||||||||||||
U.S. government and government agencies and authorities | 56,382 | 46 | — | 56,428 | ||||||||||||||||||||||
Total investment securities | $ | 57,045 | $ | 68 | $ | — | $ | 57,113 |
December 31, 2020 | Held-to-maturity | Available-for-sale | ||||||||||||||||||||||||
Amortized cost | Fair value | Amortized cost | Fair value | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Due within one year | $ | 265 | $ | 266 | $ | — | $ | — | ||||||||||||||||||
Due after one year through five years | 319 | 328 | 43,382 | 43,431 | ||||||||||||||||||||||
Due after five years through ten years | — | — | 10,571 | 10,532 | ||||||||||||||||||||||
Due after ten years | 110 | 143 | — | — | ||||||||||||||||||||||
Total | $ | 694 | $ | 737 | $ | 53,953 | $ | 53,963 |
December 31, | 2020 | 2019 | ||||||||||||
(in thousands) | ||||||||||||||
Cash and cash equivalents | $ | 108 | $ | 1,249 | ||||||||||
Short-term investments | 1,722 | 2,904 | ||||||||||||
Investment securities | 1,146 | 386 | ||||||||||||
Net investment income | $ | 2,976 | $ | 4,539 |
December 31, | 2020 | 2019 | ||||||||||||
(in thousands) | ||||||||||||||
Proceeds from sales of investment securities | $ | 248,664 | $ | 269,205 | ||||||||||
Proceeds from maturities of investment securities | 63,751 | 55,635 | ||||||||||||
Gross realized gains | 1,117 | 114 | ||||||||||||
Gross realized losses | (3) | (3) | ||||||||||||
Net realized gains (losses) | $ | 1,114 | $ | 111 |
December 31, 2020 | Level 1 | Level 2 | Level 3 | Total fair value | ||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
U.S. government and government agencies | $ | — | $ | 53,963 | $ | — | $ | 53,963 | ||||||||||||||||||
Total assets at fair value | $ | — | $ | 53,963 | $ | — | $ | 53,963 | ||||||||||||||||||
Derivative liabilities | — | — | 44,810 | 44,810 | ||||||||||||||||||||||
Warrants payable | — | — | 97,782 | 97,782 | ||||||||||||||||||||||
Total liabilities at fair value | $ | — | $ | — | $ | 142,592 | $ | 142,592 |
December 31, 2019 | Level 1 | Level 2 | Level 3 | Total fair value | ||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
U.S. government and government agencies | $ | — | $ | 56,428 | $ | — | $ | 56,428 | ||||||||||||||||||
Total assets at fair value | $ | — | $ | 56,428 | $ | — | $ | 56,428 | ||||||||||||||||||
Derivative liabilities | — | — | 138,561 | 138,561 | ||||||||||||||||||||||
Warrants payable | — | — | 17,672 | 17,672 | ||||||||||||||||||||||
Total liabilities at fair value | $ | — | $ | — | $ | 156,233 | $ | 156,233 |
| | | | | | | | |
| ASSETS | | | | | | | |
| Current asset – cash | | | | $ | — | | |
| Deferred offering costs | | | | | 100,346 | | |
| Total Assets | | | | $ | 100,346 | | |
| LIABILITIES AND SHAREHOLDER’S DEFICIT | | | | | | | |
| Current Liabilities | | | | | | | |
| Accrued offering costs | | | | $ | 100,346 | | |
| Advance from related party | | | | | 17,631 | | |
| Promissory note – related party | | | | | — | | |
| Total Current Liabilities | | | | | 117,977 | | |
| Commitments | | | | | | | |
| Shareholder’s Deficit | | | | | | | |
| Preferred shares, $0.0001 par value; 5,000,000 shares authorized; none outstanding as of December 31, 2019 | | | | | — | | |
| Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; none outstanding as of December 31, 2019 | | | | | — | | |
| Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 1 share issued and outstanding as of December 31, 2019 | | | | | — | | |
| Additional paid in capital | | | | | — | | |
| Accumulated deficit | | | | | (17,631) | | |
| Total Shareholder’s Deficit | | | | | (17,631) | | |
| TOTAL LIABILITIES AND SHAREHOLDER’S DEFICIT | | | | $ | 100,346 | | |
December 31, 2019 | Convertible securities | Derivative liabilities | ||||||||||||
Beginning stock price (total value) | $305,132 - $357,802 | $305,132 - $357,802 | ||||||||||||
Strike price (total value) | $462,012 - $531,315 | $462,012 - $965,184 | ||||||||||||
Expected volatility | 45% - 49% | 45% - 49% | ||||||||||||
Expected term | 2-3 years | 2-3 years | ||||||||||||
Risk-free interest rate | 1.58% -1.62% | 1.58% - 1.62% | ||||||||||||
Discount factor | 15 | % | 15 | % |
December 31, 2020 | Preferred stock purchase warrants | Common stock purchase warrants | ||||||||||||
Beginning stock price | N/A | $ | 30.14 | |||||||||||
Strike price | N/A | 1.04 | ||||||||||||
Expected volatility | N/A | 56.0 | % | |||||||||||
Expected term | N/A | 0.02 years | ||||||||||||
Risk-free interest rate | N/A | 0.09 | % | |||||||||||
Discount factor | N/A | 13 | % |
December 31, 2019 | Preferred stock purchase warrants | Common stock purchase warrants | ||||||||||||
Beginning stock price | $ | 10.27 | $ | 7.19 | ||||||||||
Strike price | 17.27 | 1.04 | ||||||||||||
Expected volatility | 45% - 49% | 81.1% - 84.6% | ||||||||||||
Expected term | 2 -3 years | 2-3 years | ||||||||||||
Risk-free interest rate | 1.58% - 1.62% | 1.58% - 1.62% | ||||||||||||
Discount factor | 15 | % | 15 | % |
December 31, 2020 | Convertible securities | Derivative liabilities | Warrants payable | Total | ||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Beginning balance | $ | 251,885 | $ | 138,561 | $ | 17,672 | $ | 408,118 | ||||||||||||||||||
Issuances | — | — | — | — | ||||||||||||||||||||||
Settlements | — | — | — | — | ||||||||||||||||||||||
Transfers in | — | — | — | — | ||||||||||||||||||||||
Transfers out | — | — | — | — | ||||||||||||||||||||||
Total recognized losses (gains) | 697,668 | (93,751) | 80,110 | 684,027 | ||||||||||||||||||||||
Ending balance | $ | 949,553 | $ | 44,810 | $ | 97,782 | $ | 1,092,145 |
December 31, 2019 | Convertible securities | Derivative liabilities | Warrants payable | Total | ||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Beginning balance | $ | — | $ | — | $ | 14,836 | $ | 14,836 | ||||||||||||||||||
Issuances | 237,362 | — | — | 237,362 | ||||||||||||||||||||||
Settlements | — | — | — | — | ||||||||||||||||||||||
Transfers in | — | — | — | — | ||||||||||||||||||||||
Transfers out | — | — | — | — | ||||||||||||||||||||||
Total recognized losses (gains) | 14,523 | 138,561 | 2,836 | 155,920 | ||||||||||||||||||||||
Ending balance | $ | 251,885 | $ | 138,561 | $ | 17,672 | $ | 408,118 |
As of December 31, | 2020 | 2019 | ||||||||||||
(in thousands) | ||||||||||||||
Capitalized software | $ | 693 | $ | — | ||||||||||
Leasehold improvements | 3,088 | 3,088 | ||||||||||||
Office furniture and fixtures | 29 | 29 | ||||||||||||
Equipment | 104 | 104 | ||||||||||||
Property and equipment, gross | 3,914 | 3,221 | ||||||||||||
Less: accumulated depreciation and amortization | (1,836) | (1,281) | ||||||||||||
Property and equipment, net | $ | 2,078 | $ | 1,940 |
Year ended December 31, | 2020 | 2019 | ||||||||||||
(in thousands) | ||||||||||||||
Gross balance, beginning of year | $ | 77,886 | $ | 54,004 | ||||||||||
Less: reinsurance recoverable, beginning of year | — | (12,344) | ||||||||||||
Net balance, beginning of year | 77,886 | 41,660 | ||||||||||||
Incurred related to: | ||||||||||||||
Current year | 604,183 | 453,423 | ||||||||||||
Prior years | (13,715) | (2,778) | ||||||||||||
Total incurred | 590,468 | 450,645 | ||||||||||||
Paid related to: | ||||||||||||||
Current year | 501,339 | 376,677 | ||||||||||||
Prior years | 63,039 | 37,742 | ||||||||||||
Total paid | 564,378 | 414,419 | ||||||||||||
Net balance, end of year | 103,976 | 77,886 | ||||||||||||
Plus: reinsurance recoverable, end of year | — | — | ||||||||||||
Gross balance, end of year | $ | 103,976 | $ | 77,886 |
Cumulative incurred claims for the years ended December 31, | ||||||||||||||||||||||||||||||||
Incurred year | 2018* | 2019* | 2020 | Total IBNR | Number of reported claims | |||||||||||||||||||||||||||
(in thousands) | (in thousands, except for number of reported claims) | |||||||||||||||||||||||||||||||
2018 and prior | $ | 552,456 | $ | 549,678 | $ | 549,649 | $ | 2 | 1,737,684 | |||||||||||||||||||||||
2019 | 412,695 | 399,009 | 1,130 | 1,188,472 | ||||||||||||||||||||||||||||
2020 | 604,183 | 102,844 | 1,433,049 | |||||||||||||||||||||||||||||
Total | $ | 552,456 | $ | 962,373 | $ | 1,552,841 | $ | 103,976 | 4,359,205 |
Cumulative net paid claims through December 31, | ||||||||||||||||||||
Paid year | 2018* | 2019* | 2020 | |||||||||||||||||
(in thousands) | ||||||||||||||||||||
Incurred year | ||||||||||||||||||||
2018 and prior | $ | 511,459 | $ | 550,974 | $ | 549,647 | ||||||||||||||
2019 | 343,903 | 397,879 | ||||||||||||||||||
2020 | 501,339 | |||||||||||||||||||
Total | $ | 511,459 | $ | 894,877 | $ | 1,448,865 |
December 31, 2020 | (in thousands) | |||||||
Cumulative incurred claims, net | $ | 1,552,841 | ||||||
Less: cumulative paid claims, net | 1,448,865 | |||||||
Net unpaid claims, including claims adjustment expenses | $ | 103,976 |
December 31, | 2020 | 2019 | ||||||||||||
(in thousands) | ||||||||||||||
Premiums earned, gross | $ | 666,297 | $ | 457,758 | ||||||||||
Premiums earned, ceded | (599) | (832) | ||||||||||||
Net premiums earned | $ | 665,698 | $ | 456,926 |
December 31, | 2020 | 2019 | ||||||||||||
(in thousands) | ||||||||||||||
Claims incurred, gross | $ | 590,951 | $ | 452,261 | ||||||||||
Claims incurred, ceded | (483) | (1,616) | ||||||||||||
Net claims incurred and claims adjustment expense | $ | 590,468 | $ | 450,645 |
December 31, | 2020 | 2019 | ||||||||||||
(in thousands) | ||||||||||||||
Reinsurance recoverable on paid claims | $ | — | $ | 481 | ||||||||||
Reinsurance recoverable on unpaid claims | — | — | ||||||||||||
Reinsurance premium payable | — | — | ||||||||||||
Reinsurance recoverable, net | $ | — | $ | 481 |
Year ended December 31, | |||||
(in thousands) | |||||
2021 | $ | 20,939 | |||
2022 | 9,986 | ||||
2023 | 393,827 | ||||
2024 | — | ||||
2025 | — | ||||
Total | $ | 424,752 |
Year ended December 31, 2020 | |||||
(in thousands) | |||||
Operating lease cost | $ | 4,533 | |||
Variable lease cost | 632 | ||||
Short-term lease cost | 20 | ||||
Sublease income | (3,098) | ||||
Total lease cost | $ | 2,087 | |||
Other information | |||||
Cash paid for amounts included in the measurement of lease liabilities | $ | 4,979 | |||
Weighted-average remaining lease term (in years) | 4.4 | ||||
Weighted-average discount rate | 10.17 | % |
Year ended December 31, 2019 | |||||
(in thousands) | |||||
Operating lease cost | $ | 4,552 | |||
Variable lease cost | 654 | ||||
Short-term lease cost | 58 | ||||
Sublease income | (989) | ||||
Total lease cost | $ | 4,275 | |||
Other information | |||||
Cash paid for amounts included in the measurement of lease liabilities | $ | 4,804 | |||
Weighted-average remaining lease term (in years) | 4.8 | ||||
Weighted-average discount rate | 10.05 | % |
Year ended December 31, 2020 | |||||
(in thousands) | |||||
2021 | $ | 5,017 | |||
2022 | 2,747 | ||||
2023 | 1,408 | ||||
2024 | 1,089 | ||||
2025 | 1,121 | ||||
Thereafter | 2,649 | ||||
Total lease payments | $ | 14,031 | |||
Less: imputed interest | (2,887) | ||||
Total | $ | 11,144 |
As of December 31, 2020 and 2019, after recapitalization | |||||||||||||||||||||||||||||
Preferred Stock Authorized (1) | Preferred Stock Issued and Outstanding (1) | Carrying Value | Liquidation Preference | Common Stock Issuable Upon Conversion (1) | |||||||||||||||||||||||||
Series A Preferred stock | 10,907,993 | 10,907,993 | $ | 5.5 | $ | 5.5 | 10,907,993 | ||||||||||||||||||||||
Series A-1 Preferred stock | 14,888,608 | 14,888,608 | 7.4 | 30.0 | 14,888,608 | ||||||||||||||||||||||||
Series B Preferred stock | 21,381,446 | 21,381,446 | 35.0 | 35.0 | 21,381,446 | ||||||||||||||||||||||||
Series C Preferred stock | 39,431,582 | 39,431,582 | 160.2 | 160.2 | 39,431,582 | ||||||||||||||||||||||||
Series D Preferred stock | 68,777,396 | 52,834,717 | 239.6 | 239.6 | 52,834,717 | ||||||||||||||||||||||||
155,387,025 | 139,444,346 | 447.7 | 470.3 | 139,444,346 |
Year ended December 31, | 2020 | 2019 | ||||||||||||
Weighted-average risk-free interest rate | 0.84 | % | 1.95 | % | ||||||||||
Expected term (in years) | 4.68 | 6.29 | ||||||||||||
Expected volatility | 34.66 | % | 28.37 | % | ||||||||||
Expected dividend yield | 0.00 | 0.00 |
Number of options(1) | Weighted-average exercise price(1) | ||||||||||
Outstanding, January 1, 2019 | 27,046,177 | $ | 1.31 | ||||||||
Granted during 2019 | 8,828,538 | 1.99 | |||||||||
Exercised | (916,527) | 0.74 | |||||||||
Forfeited | (6,768,713) | 1.57 | |||||||||
Outstanding, December 31, 2019 | 28,189,475 | 1.48 | |||||||||
Granted during 2020 | 14,386,426 | 3.59 | |||||||||
Exercised | (1,297,977) | 1.53 | |||||||||
Forfeited | (4,720,165) | 1.88 | |||||||||
Outstanding, December 31, 2020 | 36,557,759 | $ | 2.25 |
Number of warrants | Weighted-average exercise price | ||||||||||
Outstanding, January 1, 2019 | 261,681 | $ | 3.00 | ||||||||
Granted during 2019 | — | 0 | |||||||||
Exercised | — | 0 | |||||||||
Forfeited | — | 0 | |||||||||
Outstanding, December 31, 2019 | 261,681 | 3.00 | |||||||||
Granted during 2020 | — | 0 | |||||||||
Exercised | — | 0 | |||||||||
Forfeited | — | 0 | |||||||||
Outstanding, December 31, 2020 | 261,681 | $ | 3.00 |
Year ended December 31, | 2020 | 2019 | ||||||||||||
(in thousands) | ||||||||||||||
Current provision | $ | (2) | $ | (2) | ||||||||||
Deferred expense | 2 | 2 | ||||||||||||
Provision for income taxes | $ | — | $ | — |
Year ended December 31, | 2020 | 2019 | ||||||||||||
(in thousands) | ||||||||||||||
Income tax provision at federal statutory rate (21%) | $ | (28,642) | $ | (76,385) | ||||||||||
Interest on convertible securities | 6,537 | 3,505 | ||||||||||||
Interest on convertible securities discount | 4,423 | 3,257 | ||||||||||||
Debt issuance cost related to convertible securities | — | 76 | ||||||||||||
Derivative liability related to convertible securities | (19,688) | 29,098 | ||||||||||||
Warrant expense | 16,823 | 596 | ||||||||||||
Meals and entertainment | 13 | 210 | ||||||||||||
Health insurance industry fee | 2,715 | — | ||||||||||||
Other, net | (766) | — | ||||||||||||
Valuation allowance | 18,585 | 39,643 | ||||||||||||
Provision for income taxes | $ | — | $ | — |
Year ended December 31, | 2020 | 2019 | ||||||||||||
(in thousands) | ||||||||||||||
Deferred income tax assets: | ||||||||||||||
Net operating loss carryforward (NOL) | $ | 152,423 | $ | 133,564 | ||||||||||
Unpaid claim reserve discounting | 335 | 269 | ||||||||||||
Start-up costs amortization | 408 | 464 | ||||||||||||
Charitable contributions carryforward | 154 | 146 | ||||||||||||
Bonus accrual | 52 | 52 | ||||||||||||
Stock based compensation | 2,568 | 1,554 | ||||||||||||
Convertible securities issuance costs | 1 | 1 | ||||||||||||
Tax credits (AMT) | — | 2 | ||||||||||||
Prepaid and accrued expenses | 568 | 683 | ||||||||||||
Property and equipment | 1,318 | 1,779 | ||||||||||||
Capital loss carryforward | — | 49 | ||||||||||||
Operating lease liability | 2,340 | 3,109 | ||||||||||||
Premium deficiency reserve | — | 3,597 | ||||||||||||
Acquisition costs amortization | 60 | 66 | ||||||||||||
Interest expense carryforward | 2,318 | 1,675 | ||||||||||||
Bad debt reserves | 2,363 | — | ||||||||||||
Total deferred income tax assets | 164,908 | 147,010 | ||||||||||||
Less: valuation allowance | (163,204) | (144,619) | ||||||||||||
Total deferred income tax assets, net of valuation allowance | 1,704 | 2,391 | ||||||||||||
Deferred income tax liabilities: | ||||||||||||||
TCJA Transition Adj. IRC 846 | (49) | (58) | ||||||||||||
Market discount | — | (1) | ||||||||||||
Operating lease right of use asset | (1,655) | (2,330) | ||||||||||||
Total deferred income tax liabilities | (1,704) | (2,389) | ||||||||||||
Net deferred income tax asset | $ | — | $ | 2 |
Year ended December 31, | |||||||||||
2020 | 2019 | ||||||||||
Net loss | $ | (136,392) | $ | (363,737) | |||||||
Net loss attributable to common stockholders | (136,392) | (363,737) | |||||||||
Weighted average common shares outstanding—basic and diluted | 88,691,582 | 87,829,419 | |||||||||
Net loss per share attributable to common stockholders— basic and diluted | $ | (1.54) | $ | (4.14) |
Year ended December 31, | |||||||||||
2020 | 2019 | ||||||||||
Options to purchase common stock | 36,557,759 | 24,344,848 | |||||||||
Convertible preferred stock (as converted to common stock) | 139,444,346 | 139,444,346 | |||||||||
Warrants to purchase common stock (as converted to common stock) | 7,502,902 | 4,884,132 | |||||||||
Warrants to purchase convertible preferred stock (as converted to common stock) | — | 2,618,770 | |||||||||
183,505,007 | 171,292,096 |
As of December 31, | |||||||||||
2020 | 2019 | ||||||||||
Assets: | |||||||||||
Cash and cash equivalents | $ | 5,432 | $ | 4,569 | |||||||
Other assets | 102 | 342 | |||||||||
Intercompany interest receivable | 4,958 | 3,750 | |||||||||
Intercompany note receivable | 40,000 | 40,000 | |||||||||
Investments in consolidated subsidiaries | 77,212 | 158,159 | |||||||||
Total assets | $ | 127,704 | $ | 206,820 | |||||||
Liabilities and stockholders’ deficit | |||||||||||
Liabilities | |||||||||||
Accounts payable and accrued expenses | $ | 13,140 | $ | 5,471 | |||||||
Accrued salaries and benefits | 229 | — | |||||||||
Intercompany payable | 27,251 | 4,093 | |||||||||
Notes payable, net of discount and deferred issuance costs | 107,674 | 76,758 | |||||||||
Derivative liabilities | 44,810 | 138,561 | |||||||||
Warrants payable | 97,782 | 17,672 | |||||||||
Total liabilities | 290,886 | 242,555 | |||||||||
Convertible Preferred stock (Series Seed A, A-1, B, C, and D), $0.0001 par value; 155,387,025 shares authorized as of December 31, 2020 and 2019; 139,444,346 shares; after reverse capitalization, shares issued and outstanding as of December 31, 2020 and 2019; aggregate liquidation preference of$470,256 as of December 31, 2020 | 447,747 | 447,747 | |||||||||
Stockholders’ deficit: | |||||||||||
Common stock, $0.0001 par value,351,572,668 shares authorized; 89,972,184 and88,674,206 issued; and 89,206,266 and 88,279,119; after reverse capitalization, outstanding as of December 31, 2020 and 2019, respectively | 9 | 9 | |||||||||
Additional paid-in capital | 411,843 | 403,041 | |||||||||
Accumulated deficit | (1,022,781) | (886,532) | |||||||||
Total stockholders’ deficit | (610,929) | (483,482) | |||||||||
Total liabilities, convertible preferred stock, and stockholders’ deficit | $ | 127,704 | $ | 206,820 |
Years ended December 31, | |||||||||||
2020 | 2019 | ||||||||||
Revenues: | |||||||||||
Other income | $ | 3,685 | $ | 3,396 | |||||||
Investment income, net | — | 46 | |||||||||
Total revenues | 3,685 | 3,442 | |||||||||
Expenses: | |||||||||||
General and administrative expenses | 4,831 | 79 | |||||||||
Other expense | — | 363 | |||||||||
Total expenses | 4,831 | 442 | |||||||||
Loss from operations | (1,146) | 3,000 | |||||||||
Change in fair value of warrants expense | 80,328 | 2,909 | |||||||||
Interest expense | 35,556 | 23,155 | |||||||||
Amortization of notes discount | 21,118 | 15,913 | |||||||||
(Gain) loss on derivative | (93,751) | 138,561 | |||||||||
Equity in net losses of consolidated subsidiaries | 91,995 | 186,199 | |||||||||
Net loss | $ | (136,392) | $ | (363,737) |
Years ended December 31, | |||||||||||
2020 | 2019 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net loss | $ | (136,392) | $ | (363,737) | |||||||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
Amortization of notes discount | 21,084 | 15,807 | |||||||||
Stock-based compensation expense | 7,078 | 3,301 | |||||||||
Paid in kind interest | 28,334 | 11,633 | |||||||||
Change in fair value of warrants | 80,110 | 2,836 | |||||||||
Change in derivative liabilities | (93,751) | 138,561 | |||||||||
Amortization of warrants | 218 | 73 | |||||||||
Amortization of debt issuance costs | 34 | 506 | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Other assets | 214 | (391) | |||||||||
Accounts payable and accrued expenses | 7,669 | 5,728 | |||||||||
Accrued salaries and benefits | 229 | (169) | |||||||||
Intercompany interest receivable | (1,208) | (1,200) | |||||||||
Intercompany payable | 23,158 | (23,921) | |||||||||
Net cash used in operating activities | (63,223) | (210,973) | |||||||||
Cash flows from investing activities: | |||||||||||
Investments in consolidated subsidiaries | 82,047 | (154,469) | |||||||||
Net cash provided (used in) by investing activities | 82,047 | (154,469) | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from issuance of convertible securities | — | 343,410 | |||||||||
Deferred financing costs | — | (363) | |||||||||
Payment of notes payable principal | (18,752) | (9,670) | |||||||||
Issuance of common stock, net of early exercise liability | 1,748 | 601 | |||||||||
Buyback and subsequent cancellation of common stock | (957) | — | |||||||||
Net cash (used in) provided by financing activities | (17,961) | 333,978 | |||||||||
Net increase (decrease) in cash and cash equivalents | 863 | (31,464) | |||||||||
Cash and cash equivalents, beginning of year | 4,569 | 36,033 | |||||||||
Cash and cash equivalents, end of year | $ | 5,432 | $ | 4,569 |
Additions | ||||||||||||||||||||||||||||||||
(in thousands) | Balance at beginning of period | Charged to costs and expenses | Charge to other accounts | (Deductions) | Balance at end of period | |||||||||||||||||||||||||||
Year ended December 31, 2019 | ||||||||||||||||||||||||||||||||
Valuation allowance for deferred tax assets | $ | 104,976 | $ | 39,643 | $ | — | $ | — | $ | 144,619 | ||||||||||||||||||||||
Year ended December 31, 2020 | ||||||||||||||||||||||||||||||||
Valuation allowance for deferred tax assets | $ | 144,619 | $ | 18,585 | $ | — | $ | — | $ | 163,204 |
| Formation costs | | | | $ | 17,631 | | |
| Net Loss | | | | $ | (17,631) | | |
| Weighted average shares outstanding, basic and diluted | | | | | 1 | | |
| Basic and diluted net loss per ordinary share | | | | $ | (17,631) | | |
September 30, 2021 (Unaudited) | December 31, 2020 | ||||||||||
Assets | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | 202,264 | $ | 92,348 | |||||||
Short-term investments | 218,390 | 4,098 | |||||||||
Investment securities, available-for sale (Amortized cost: 2021: $21,139; 2020: $0) | 21,142 | — | |||||||||
Investment securities, held-to-maturity (Fair value: 2021: $308; 2020: $266) | 305 | 265 | |||||||||
Accrued retrospective premiums | 30,184 | 34,829 | |||||||||
Other receivables | 21,127 | 11,368 | |||||||||
Healthcare receivable | 34,656 | 38,745 | |||||||||
Surety bonds and deposits | 13,165 | — | |||||||||
Prepaid expenses | 12,177 | 7,830 | |||||||||
Other assets, current | 5,871 | 299 | |||||||||
Total current assets | 559,281 | 189,782 | |||||||||
Direct Contracting performance year receivable | 220,738 | — | |||||||||
Investment securities, available-for sale (Amortized cost: 2021: $146,796; 2020: $53,953) | 146,183 | 53,963 | |||||||||
Investment securities, held-to-maturity (Fair value: 2021: $419; 2020: $471) | 390 | 429 | |||||||||
Property and equipment, net | 2,172 | 2,078 | |||||||||
Operating lease right-of-use assets | 5,828 | 7,882 | |||||||||
Goodwill and other intangible assets | 4,233 | 4,233 | |||||||||
Other assets, non-current | 13,653 | 8,885 | |||||||||
Total assets | $ | 952,478 | $ | 267,252 |
September 30, 2021 (Unaudited) | December 31, 2020 | ||||||||||
Liabilities, Convertible Preferred Stock and Stockholders' Equity | |||||||||||
Liabilities | |||||||||||
Current liabilities | |||||||||||
Unpaid claims | $ | 140,210 | $ | 103,976 | |||||||
Accounts payable and accrued expenses | 24,208 | 30,671 | |||||||||
Accrued salaries and benefits | 13,436 | 3,978 | |||||||||
Operating lease liabilities | 3,729 | 4,795 | |||||||||
Current portion of notes and securities payable | — | 20,803 | |||||||||
Premium deficiency reserve | 48,661 | — | |||||||||
Other liabilities, current | 5 | 5 | |||||||||
Total current liabilities | 230,249 | 164,228 | |||||||||
Direct Contracting performance year obligation | 244,599 | — | |||||||||
Notes and securities payable, net of discounts and deferred issuance costs | 19,929 | 106,413 | |||||||||
Derivative liabilities | — | 44,810 | |||||||||
Warrants payable | — | 97,782 | |||||||||
Long-term operating lease liabilities | 4,818 | 6,349 | |||||||||
Other liabilities, non-current | 40,593 | 13,116 | |||||||||
Total liabilities | 540,188 | 432,698 | |||||||||
Commitments and Contingencies (Note 18) | 0 | 0 | |||||||||
Convertible Preferred stock (Series Seed A, A-1, B, C, and D), $0.0001 par value; 0 and 155,387,025 shares authorized as of September 30, 2021, and December 31, 2020, respectively; 0 and 139,444,346 shares issued and outstanding as of September 30, 2021, and December 31, 2020, respectively; aggregate liquidation preference of $0 and $470,256 as of September 30, 2021, and December 31, 2020, respectively (1) | — | 447,747 | |||||||||
Stockholders’ equity | |||||||||||
Class A Common Stock, $0.0001 par value; 2,500,000,000 and 0 shares authorized as of September 30, 2021, and December 31, 2020, respectively; 278,308,964 and 0 issued and outstanding as of September 30, 2021, and December 31, 2020, respectively | 28 | — | |||||||||
Class B Common Stock, $0.0001 par value; 500,000,000 and 351,572,668 shares authorized; 142,318,711 and 89,206,266 issued and outstanding as of September 30, 2021, and December 31, 2020, respectively (1) | 14 | 9 | |||||||||
Additional paid-in capital | 1,838,639 | 411,867 | |||||||||
Accumulated other comprehensive (loss) income | (610) | 10 | |||||||||
Accumulated deficit | (1,429,537) | (1,028,982) | |||||||||
Less: Treasury stock, at cost; 14,730 and 0 shares held as of September 30, 2021, and December 31, 2020, respectively | (147) | 0 | |||||||||
Clover stockholders’ equity (deficit) | 408,387 | (617,096) | |||||||||
Noncontrolling interest | 3,903 | 3,903 | |||||||||
Total stockholders’ equity (deficit) | 412,290 | (613,193) | |||||||||
Total liabilities, convertible preferred stock and stockholders’ equity | $ | 952,478 | $ | 267,252 |
| | | Class B Ordinary Shares | | | Additional Paid in Capital | | | Accumulated Deficit | | | Total Shareholder’s Deficit | | | | | ||||||||||||||||||||||||
| | | Shares | | | Amount | | | | | | | | | | | ||||||||||||||||||||||||
Balance – October 18, 2019 (inception) | | | | | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | | ||||||
Issuance of Class B ordinary share | | | | | 1 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | ||||||
Net loss | | | | | — | | | | | | — | | | | | | — | | | | | | (17,631) | | | | | | (17,631) | | | | | | ||||||
Balance – December 31, 2019 | | | | | 1 | | | | | | — | | | | | | — | | | | | | (17,631) | | | | | | (17,631) | | | | | |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Premiums earned, net (Net of ceded premiums of $120 and $126 for the three months ended September 30, 2021 and 2020, respectively; net of ceded premiums of $370 and $383 for the nine months ended September 30, 2021 and 2020, respectively) | $ | 203,657 | $ | 167,075 | $ | 598,390 | $ | 501,100 | |||||||||||||||
Direct Contracting revenue | 222,647 | — | 439,020 | — | |||||||||||||||||||
Other income | 859 | 1,994 | 2,550 | 5,555 | |||||||||||||||||||
Total revenues | 427,163 | 169,069 | 1,039,960 | 506,655 | |||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Net medical claims incurred | 436,422 | 144,846 | 1,109,375 | 410,540 | |||||||||||||||||||
Salaries and benefits | 73,364 | 16,628 | 201,555 | 57,339 | |||||||||||||||||||
General and administrative expenses | 45,749 | 29,847 | 129,983 | 79,798 | |||||||||||||||||||
Premium deficiency reserve expense (benefit) | 20,761 | (772) | 48,661 | (16,357) | |||||||||||||||||||
Depreciation and amortization | 120 | 138 | 398 | 413 | |||||||||||||||||||
Other expense | — | — | 191 | — | |||||||||||||||||||
Total operating expenses | 576,416 | 190,687 | 1,490,163 | 531,733 | |||||||||||||||||||
Loss from operations | (149,253) | (21,618) | (450,203) | (25,078) | |||||||||||||||||||
Change in fair value of warrants payable | (115,152) | 20,029 | (66,146) | 31,903 | |||||||||||||||||||
Interest expense | 413 | 9,268 | 2,817 | 25,560 | |||||||||||||||||||
Amortization of notes and securities discounts | 13 | 4,408 | 13,681 | 14,935 | |||||||||||||||||||
Gain on derivative | — | (68,081) | — | (87,475) | |||||||||||||||||||
Net (loss) income | $ | (34,527) | $ | 12,758 | $ | (400,555) | $ | (10,001) | |||||||||||||||
Per share data: | |||||||||||||||||||||||
Net (loss) income per share attributable to common stockholders – basic (1) | $ | (0.08) | $ | 0.06 | $ | (0.98) | $ | (0.11) | |||||||||||||||
Net (loss) income per share attributable to common stockholders – diluted (1) | (0.08) | 0.02 | (0.98) | (0.11) | |||||||||||||||||||
Weighted average number of common shares outstanding | |||||||||||||||||||||||
Basic weighted average number of common shares and common share equivalents outstanding (1) | 414,572,706 | 88,863,244 | 410,417,493 | 88,616,116 | |||||||||||||||||||
Diluted weighted average number of common shares and common share equivalents outstanding (1) | 414,572,706 | 248,133,335 | 410,417,493 | 88,616,116 | |||||||||||||||||||
Unrealized (loss) gain on available-for-sale investments | $ | (197) | $ | (611) | $ | (620) | $ | 718 | |||||||||||||||
Comprehensive (loss) income | $ | (34,724) | $ | 12,147 | $ | (401,175) | $ | (9,283) |
Convertible Preferred stock | Class A Common Stock | Class B Common Stock | Additional paid-in capital | Accumulated deficit | Treasury Stock | Accumulated other comprehensive income (loss) | Noncontrolling interest | Total stockholders’ equity (deficit) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares (1) | Amount | Shares | Amount | Shares (1) | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2020 | 139,444,346 | $ | 447,747 | — | $ | — | 88,786,712 | $ | 9 | $ | 407,115 | $ | (914,392) | $ | — | $ | 1,375 | $ | 3,903 | $ | (501,990) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock issuance for exercise of stock options, net of early exercise liability | — | — | — | — | 240,998 | — | 329 | — | — | — | — | 329 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | 1,500 | — | — | — | — | 1,500 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized holdings loss on investment securities, available-for-sale | — | — | — | — | — | — | — | — | — | (611) | — | (611) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | 12,758 | — | — | — | 12,758 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, September 30, 2020 | 139,444,346 | $ | 447,747 | — | $ | — | 89,027,710 | $ | 9 | $ | 408,944 | $ | (901,634) | $ | — | $ | 764 | $ | 3,903 | $ | (488,014) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2021 | — | — | 148,560,977 | $ | 15 | 259,744,474 | $ | 26 | $ | 1,706,334 | $ | (1,395,010) | — | $ | (413) | $ | 3,903 | $ | 314,855 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock issuance for exercise of stock options, net of early exercise liability | — | — | 2,893,802 | — | — | — | 3,830 | — | — | — | — | 3,830 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | 46,803 | — | — | — | — | 46,803 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vested restricted stock units | — | — | 20,158 | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized holdings gain on investment securities, available-for-sale | — | — | — | — | — | — | — | — | — | (197) | — | (197) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion from Class B Common Stock to Class A Common Stock | — | — | 117,425,763 | 12 | (117,425,763) | (12) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock related to exercises of Public and Private Placement Warrants | — | — | 9,408,264 | 1 | — | — | 81,672 | — | — | — | — | 81,673 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Treasury stock acquired | — | — | — | — | — | — | — | — | (147) | — | — | (147) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | (34,527) | — | — | — | (34,527) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, September 30, 2021 | — | $ | — | 278,308,964 | $ | 28 | 142,318,711 | $ | 14 | $ | 1,838,639 | $ | (1,429,537) | $ | (147) | $ | (610) | $ | 3,903 | $ | 412,290 |
| Cash Flows from Operating Activities: | | | | | | | |
| Net loss | | | | $ | (17,631) | | |
| Net cash used in operating activities | | | | | (17,631) | | |
| Cash Flows from Financing Activities: | | | | | | | |
| Proceeds from sale of Class B ordinary shares to Sponsor | | | | | — | | |
| Advances from related party | | | | | 17,631 | | |
| Proceeds from promissory note | | | | | — | | |
| Net cash provided by financing activities | | | | | 17,631 | | |
| Net Change in Cash | | | | | — | | |
| Cash – Beginning of period | | | | | — | | |
| Cash – End of period | | | | $ | — | | |
| Non-cash investing and financing activities: | | | | | | | |
| Deferred offering costs included in accrued offering costs | | | | $ | 100,346 | | |
Convertible Preferred stock | Class A Common Stock | Class B Common Stock | Additional paid-in capital | Accumulated deficit | Treasury Stock | Accumulated other comprehensive income (loss) | Noncontrolling interest | Total stockholders’ equity (deficit) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares (1) | Amount | Shares | Amount | Shares (1) | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2019 | 139,444,346 | $ | 447,747 | — | $ | — | 88,279,119 | $ | 9 | $ | 403,041 | $ | (891,633) | $ | — | $ | 46 | $ | — | $ | (488,537) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock issuance for exercise of stock options, net of early exercise liability | — | — | — | — | 748,591 | — | 954 | — | — | — | — | 954 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | 4,949 | — | — | — | — | 4,949 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized holdings gain on investment securities, available-for-sale | — | — | — | — | — | — | — | — | — | 718 | — | 718 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interests issued | — | — | — | — | — | — | — | — | — | — | 3,903 | 3,903 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | (10,001) | — | — | — | (10,001) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, September 30, 2020 | 139,444,346 | $ | 447,747 | — | $ | — | 89,027,710 | $ | 9 | $ | 408,944 | $ | (901,634) | $ | — | $ | 764 | $ | 3,903 | $ | (488,014) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2020 | 139,444,346 | $ | 447,747 | — | $ | — | 89,206,266 | $ | 9 | $ | 411,867 | $ | (1,028,982) | — | $ | 10 | $ | 3,903 | $ | (613,193) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock issuance for exercise of stock options, net of early exercise liability | — | — | 3,859,648 | — | — | — | 5,547 | — | — | — | — | 5,547 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | 132,542 | — | — | — | — | 132,542 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vested restricted stock units | — | — | 20,158 | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized holdings loss on investment securities, available-for-sale | — | — | — | — | — | — | — | — | — | (620) | — | (620) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred stock conversion | (139,444,346) | (447,747) | — | — | 139,444,346 | 14 | 447,733 | — | — | — | — | 447,747 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock related to exercises of legacy warrants | — | — | — | — | 7,205,490 | 1 | 97,781 | — | — | — | 97,782 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Convertible debt conversion and other issuances | — | — | — | — | 75,084,703 | 7 | 16,052 | — | — | — | — | 16,059 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock in connection with Business Combination and PIPE offering | — | — | 146,373,904 | 15 | (49,975,104) | (5) | 666,232 | — | — | — | — | 666,242 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion from Class B Common Stock to Class A Common Stock | — | — | 118,646,990 | 12 | (118,646,990) | (12) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital contribution for extinguishment of debt | — | — | — | — | — | — | 126,795 | — | — | — | — | 126,795 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition of Public and Private Placement Warrants | — | — | — | — | — | — | (147,582) | — | — | — | — | (147,582) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock related to exercises of Public and Private Placement Warrants | — | — | 9,408,264 | 1 | — | — | 81,672 | — | — | — | — | 81,673 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Treasury stock acquired | — | — | — | — | — | — | — | — | (147) | — | — | (147) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | (400,555) | — | — | — | (400,555) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, September 30, 2021 | — | $ | — | 278,308,964 | $ | 28 | 142,318,711 | $ | 14 | $ | 1,838,639 | $ | (1,429,537) | $ | (147) | $ | (610) | $ | 3,903 | $ | 412,290 |
Nine Months Ended September 30, | |||||||||||
2021 | 2020 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net loss | $ | (400,555) | $ | (10,001) | |||||||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
Depreciation and amortization expense | 398 | 413 | |||||||||
Amortization of notes and securities discounts and debt issuance costs | 13,681 | 14,935 | |||||||||
Stock-based compensation expense | 132,542 | 4,949 | |||||||||
Paid-in-kind interest | — | 18,769 | |||||||||
Change in fair value of warrants payable and amortization of warrants | (66,146) | 31,903 | |||||||||
Change in derivative liabilities | — | (87,475) | |||||||||
Accretion, net of amortization | 142 | (307) | |||||||||
Net realized gains (losses) on available-for-sale securities | 52 | (421) | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Accrued retrospective premiums | 4,645 | (14,653) | |||||||||
Other receivables | (9,759) | (9,838) | |||||||||
Reinsurance recoverable | — | 376 | |||||||||
Performance year receivable | (220,738) | — | |||||||||
Surety bonds and deposits | (13,165) | — | |||||||||
Prepaid expenses | (4,347) | (6,296) | |||||||||
Other assets | (10,261) | 496 | |||||||||
Healthcare receivables | 4,089 | (8,506) | |||||||||
Operating lease right-of-use assets | 2,636 | 2,437 | |||||||||
Unpaid claims | 36,234 | 15,729 | |||||||||
Accounts payable and accrued expenses | 1,386 | 5,937 | |||||||||
Accrued salaries and benefits | 9,458 | 662 | |||||||||
Premium deficiency reserve | 48,661 | (16,356) | |||||||||
Other liabilities | 27,477 | 1,414 | |||||||||
Performance year obligation | 244,599 | — | |||||||||
Operating lease liabilities | (3,179) | (2,761) | |||||||||
Net cash used in operating activities | (202,150) | (58,594) | |||||||||
Cash flows from investing activities: | |||||||||||
Purchases of short-term investments and available-for-sale securities | (705,598) | (152,248) | |||||||||
Proceeds from sales of short-term investments and available-for-sale securities | 126,862 | 166,024 | |||||||||
Proceeds from maturities of short-term investments and available-for-sale securities | 250,265 | 56,701 | |||||||||
Purchases of property and equipment | (485) | (630) | |||||||||
Net cash (used in) provided by investing activities | (328,956) | 69,847 | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from issuance of convertible notes | — | 20,000 | |||||||||
Deferred financing costs | — | (108) | |||||||||
Payment of notes payable principal | (30,925) | (13,868) | |||||||||
Issuance of common stock, net of early exercise liability | 5,547 | 954 | |||||||||
Proceeds from reverse recapitalization, net of transaction costs | 666,242 | — | |||||||||
Proceeds received for the exercise of Public and Private Warrants | 390 | — | |||||||||
Payment for the redemptions of Public Warrants | (85) | — | |||||||||
Treasury stock acquired | (147) | — | |||||||||
Acquisition of noncontrolling interest | — | 3,903 | |||||||||
Net cash provided by financing activities | 641,022 | 10,881 | |||||||||
Net increase in cash and cash equivalents | 109,916 | 22,134 | |||||||||
Cash and cash equivalents, beginning of period | 92,348 | 67,598 | |||||||||
Cash and cash equivalents, end of period | $ | 202,264 | $ | 89,732 | |||||||
Supplemental cash flow disclosures | |||||||||||
Cash paid during the period for interest | $ | — | $ | 3,524 | |||||||
Supplemental disclosure of non-cash investing and financing activities | |||||||||||
Conversion of preferred stock to common stock | $ | 447,747 | $ | — | |||||||
Issuance of common stock related to convertible debt | 16,059 | — | |||||||||
Capital contribution for extinguishment of debt | 126,795 | — | |||||||||
Issuance of common stock related to warrants exercised | 97,782 | — | |||||||||
Acquisition of Public and Private Warrants | 147,582 | — | |||||||||
Issuance of common stock related to the exercise of Public and Private Warrants | 81,283 | — | |||||||||
Right-of-use assets obtained in exchange for lease liabilities | 582 | — |
September 30, 2021 | Amortized cost | Accumulated unrealized gains | Accumulated unrealized losses | Fair value | ||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Investment securities, held-to-maturity | ||||||||||||||||||||||||||
U.S. government and government agencies and authorities | $ | 695 | $ | 42 | $ | (10) | $ | 727 | ||||||||||||||||||
Investment securities, available-for-sale | ||||||||||||||||||||||||||
U.S. government and government agencies and authorities | 167,935 | 37 | (647) | 167,325 | ||||||||||||||||||||||
Total investment securities | $ | 168,630 | $ | 79 | $ | (657) | $ | 168,052 |
December 31, 2020 | Amortized cost | Accumulated unrealized gains | Accumulated unrealized losses | Fair value | ||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Investment securities, held-to-maturity | ||||||||||||||||||||||||||
U.S. government and government agencies and authorities | $ | 694 | $ | 43 | $ | — | $ | 737 | ||||||||||||||||||
Investment securities, available-for-sale | ||||||||||||||||||||||||||
U.S. government and government agencies and authorities | 53,953 | 51 | (41) | 53,963 | ||||||||||||||||||||||
Total investment securities | $ | 54,647 | $ | 94 | $ | (41) | $ | 54,700 |
September 30, 2021 | Held-to-maturity | Available-for-sale | ||||||||||||||||||||||||
Amortized cost | Fair value | Amortized cost | Fair value | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Due within one year | $ | 305 | $ | 308 | $ | 21,139 | $ | 21,142 | ||||||||||||||||||
Due after one year through five years | 15 | 16 | 141,835 | 141,352 | ||||||||||||||||||||||
Due after five years through ten years | 265 | 256 | 4,961 | 4,831 | ||||||||||||||||||||||
Due after ten years | 110 | 147 | — | — | ||||||||||||||||||||||
Total | $ | 695 | $ | 727 | $ | 167,935 | $ | 167,325 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Cash and cash equivalents | $ | — | $ | 1 | $ | — | $ | 108 | |||||||||||||||
Short-term investments | 62 | 519 | 139 | 1,141 | |||||||||||||||||||
Investment securities | 117 | 303 | 201 | 977 | |||||||||||||||||||
Investment income, net | $ | 179 | $ | 823 | $ | 340 | $ | 2,226 |
September 30, 2021 | Less than 12 months | Greater than 12 months | Total | |||||||||||||||||||||||||||||||||||
Fair value | Unrealized loss | Fair value | Unrealized loss | Fair value | Unrealized loss | |||||||||||||||||||||||||||||||||
(in thousands, except number of positions) | ||||||||||||||||||||||||||||||||||||||
U.S. government and government agencies | $ | — | $ | — | $ | 71,620 | $ | (657) | $ | 71,620 | $ | (657) | ||||||||||||||||||||||||||
Total | $ | — | $ | — | $ | 71,620 | $ | (657) | $ | 71,620 | $ | (657) | ||||||||||||||||||||||||||
Number of positions | — | 14 | 14 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Proceeds from sales of investment securities | $ | 89,997 | $ | 71,049 | $ | 126,862 | $ | 166,024 | |||||||||||||||
Proceeds from maturities of investment securities | 50,000 | 9,600 | 250,265 | 56,701 | |||||||||||||||||||
Gross realized gains | 7 | 504 | 24 | 540 | |||||||||||||||||||
Gross realized losses | — | — | (77) | — | |||||||||||||||||||
Net realized gains (losses) | $ | 7 | $ | 504 | $ | (53) | $ | 540 |
September 30, 2021 | Level 1 | Level 2 | Level 3 | Total fair value | ||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
U.S. government and government agencies | $ | — | $ | 167,325 | $ | — | $ | 167,325 | ||||||||||||||||||
Total assets at fair value | $ | — | $ | 167,325 | $ | — | $ | 167,325 |
December 31, 2020 | Level 1 | Level 2 | Level 3 | Total fair value | ||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
U.S. government and government agencies | $ | — | $ | 53,963 | $ | — | $ | 53,963 | ||||||||||||||||||
Total assets at fair value | $ | — | $ | 53,963 | $ | — | $ | 53,963 | ||||||||||||||||||
Derivative liabilities | $ | — | $ | — | $ | 44,810 | $ | 44,810 | ||||||||||||||||||
Warrants payable | — | — | 97,782 | 97,782 | ||||||||||||||||||||||
Total liabilities at fair value | $ | — | $ | — | $ | 142,592 | $ | 142,592 |
December 31, 2020 | Preferred stock purchase warrants | Common stock purchase warrants | ||||||||||||
Beginning stock price | N/A | $ | 30.14 | |||||||||||
Strike price | N/A | 1.04 | ||||||||||||
Expected volatility | N/A | 56.0 | % | |||||||||||
Expected term | N/A | 0.02 years | ||||||||||||
Risk-free interest rate | N/A | 0.09 | % | |||||||||||
Discount factor | N/A | 13.0 |
Convertible securities | Derivative liabilities | Warrants payable | Total | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Balance, June 30, 2020 | $ | 285,166 | $ | 119,167 | $ | 29,424 | $ | 433,757 | |||||||||||||||
Issuances | — | — | — | — | |||||||||||||||||||
Settlements | — | — | — | — | |||||||||||||||||||
Transfers in | — | — | — | — | |||||||||||||||||||
Transfers out | — | — | — | — | |||||||||||||||||||
Total realized losses (gains) | 95,477 | (68,081) | 19,978 | 47,374 | |||||||||||||||||||
Balance, September 30, 2020 | $ | 380,643 | $ | 51,086 | $ | 49,402 | $ | 481,131 |
Convertible securities | Derivative liabilities | Warrants payable | Total | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Balance, December 31, 2020 | $ | 949,553 | $ | 44,810 | $ | 97,782 | $ | 1,092,145 | |||||||||||||||
Issuances | — | — | — | — | |||||||||||||||||||
Settlements | (949,553) | (44,810) | (97,782) | (1,092,145) | |||||||||||||||||||
Transfers in | — | — | — | — | |||||||||||||||||||
Transfers out | — | — | — | — | |||||||||||||||||||
Total realized losses (gains) | — | — | — | — | |||||||||||||||||||
Balance, September 30, 2021 | $ | — | $ | — | $ | — | $ | — |
Convertible securities | Derivative liabilities | Warrants payable | Total | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Balance, December 31, 2019 | $ | 251,885 | $ | 138,561 | $ | 17,672 | $ | 408,118 | |||||||||||||||
Issuances | — | — | — | — | |||||||||||||||||||
Settlements | — | — | — | — | |||||||||||||||||||
Transfers in | — | — | — | — | |||||||||||||||||||
Transfers out | — | — | — | — | |||||||||||||||||||
Total realized losses (gains) | 128,758 | (87,475) | 31,730 | 73,013 | |||||||||||||||||||
Balance, September 30, 2020 | $ | 380,643 | $ | 51,086 | $ | 49,402 | $ | 481,131 |
September 30, 2021 | Public and Private Placement Warrants | |||||||
(in thousands) | ||||||||
Initial measurement, January 7, 2021 | $ | 147,582 | ||||||
Mark-to-market adjustment | (66,214) | |||||||
Warrants exercised | (81,283) | |||||||
Warrants redeemed | (85) | |||||||
Warrants payable balance, September 30, 2021 | $ | — |
Nine Months Ended September 30, | 2021 | 2020 | ||||||||||||
(in thousands) | ||||||||||||||
Gross and net balance, beginning of period | $ | 103,976 | $ | 77,886 | ||||||||||
Incurred related to: | ||||||||||||||
Current year | 1,092,280 | 425,941 | ||||||||||||
Prior years | 17,095 | (15,401) | ||||||||||||
Total incurred | 1,109,375 | 410,540 | ||||||||||||
Paid related to: | ||||||||||||||
Current year | 963,779 | 339,252 | ||||||||||||
Prior years | 109,362 | 55,559 | ||||||||||||
Total paid | 1,073,141 | 394,811 | ||||||||||||
Gross and net balance, end of period | $ | 140,210 | $ | 93,615 |
Three Months Ended September 30, 2021 | |||||
(in thousands) | |||||
Operating lease cost | $ | 1,126 | |||
Variable lease cost | 123 | ||||
Short-term lease cost | 15 | ||||
Sublease income | (650) | ||||
Total lease cost | $ | 614 |
Nine Months Ended September 30, 2021 | |||||
(in thousands) | |||||
Operating lease cost | $ | 3,351 | |||
Variable lease cost | 391 | ||||
Short-term lease cost | 45 | ||||
Sublease income | (2,077) | ||||
Total lease cost | $ | 1,710 | |||
Other information | |||||
Cash paid for amounts included in the measurement of lease liabilities | $ | 3,894 | |||
Weighted-average remaining lease term | 4.4 years | ||||
Weighted-average discount rate | 10.26 | % |
(in thousands) | |||||
2021 | $ | 1,321 | |||
2022 | 3,001 | ||||
2023 | 1,493 | ||||
2024 | 1,157 | ||||
2025 | 1,149 | ||||
Thereafter | 2,639 | ||||
Total lease payments | 10,760 | ||||
Less: imputed interest | (2,213) | ||||
Total | $ | 8,547 |
September 30, 2021 | Shares Authorized Under Plans | Shares Outstanding Under Plans | Shares Remaining Under Plans | ||||||||||||||
2014 Plan | 54,402,264 | 42,441,719 | N/A | ||||||||||||||
2020 Plan | 30,641,401 | 1,782,986 | 28,858,415 | ||||||||||||||
2020 MIP | 33,426,983 | 33,426,983 | — |
December 31, 2020 | Shares Authorized Under Plan | Shares Outstanding Under Plan | Shares Remaining Under Plan | ||||||||||||||
2014 Plan | 54,402,264 | 36,557,759 | 17,844,505 |
Three Months Ended September 30, | 2021 | 2020 | |||||||||
(in thousands) | |||||||||||
Stock options | $ | 1,665 | $ | 1,500 | |||||||
RSUs | 17,396 | — | |||||||||
PRSUs | 27,675 | — | |||||||||
ESPP | 67 | — | |||||||||
Total compensation cost recognized for stock-based compensation plans | $ | 46,803 | $ | 1,500 |
Nine Months Ended September 30, | 2021 | 2020 | |||||||||
(in thousands) | |||||||||||
Stock options | $ | 6,734 | $ | 4,949 | |||||||
RSUs | 45,725 | — | |||||||||
PRSUs | 80,016 | — | |||||||||
ESPP | 67 | — | |||||||||
Total compensation cost recognized for stock-based compensation plans | $ | 132,542 | $ | 4,949 |
Nine Months Ended September 30, | 2021 | 2020 | |||||||||
Weighted-average risk-free interest rate | 1.06 | % | 0.84 | % | |||||||
Expected term (in years) | 6.06 | 4.66 | |||||||||
Expected volatility | 37.74 | % | 34.60 | % | |||||||
Expected dividend yield | — | — |
Number of options | Weighted-average exercise price | ||||||||||
Outstanding, January 1, 2021 | — | $ | — | ||||||||
Granted during 2021 | 1,937,968 | 8.88 | |||||||||
Exercised | — | — | |||||||||
Forfeited | (154,982) | 8.87 | |||||||||
Outstanding, September 30, 2021 | 1,782,986 | $ | 8.88 |
Number of options | Weighted-average exercise price | ||||||||||
Outstanding, January 1, 2021 | 36,513,193 | $ | 2.26 | ||||||||
Granted during 2021 | — | — | |||||||||
Exercised | (3,843,472) | 1.43 | |||||||||
Forfeited | (974,874) | 2.78 | |||||||||
Outstanding, September 30, 2021 | 31,694,847 | $ | 2.29 |
Nine Months Ended September 30, 2021 | |||||
Granted | 21,035,614 | ||||
Released | (131,766) | ||||
Forfeited | (35,935) | ||||
Outstanding, September 30, 2021 | 20,867,913 |
Nine Months Ended September 30, 2021 | |||||
Expected volatility(1) | 40.70 | % | |||
Risk-free interest rate(2) | 0.50 | ||||
Dividend yield(3) | — |
Nine Months Ended September 30, 2021 | |||||
Granted | 27,699,171 | ||||
Non-vested at September 30, 2021 | 27,699,171 |
Nine Months Ended September 30, 2021 | |||||
Weighted-average risk-free interest rate | 0.06 | % | |||
Expected term (in years) | 0.42 | ||||
Expected volatility | 147.42 | % |
Number of warrants | Weighted-average exercise price | ||||||||||
Outstanding, December 31, 2019 | 261,681 | $ | 3.00 | ||||||||
Granted during 2020 | — | — | |||||||||
Exercised | — | — | |||||||||
Forfeited | — | — | |||||||||
Outstanding, September 30, 2020 | 261,681 | $ | 3.00 | ||||||||
Outstanding, December 31, 2020 | 261,681 | $ | 3.00 | ||||||||
Granted during 2021 | — | — | |||||||||
Exercised | (261,681) | 3.00 | |||||||||
Forfeited | — | — | |||||||||
Outstanding, September 30, 2021 | — | $ | — |
Three Months Ended September 30, | |||||||||||
2021 | 2020 | ||||||||||
(in thousands, except per share data) | |||||||||||
Net (loss) income | $ | (34,527) | $ | 12,758 | |||||||
Net (loss) income attributable to common stockholders | (34,527) | 4,966 | |||||||||
Basic weighted average number of common shares and common share equivalents outstanding (1) | 414,572,706 | 88,863,244 | |||||||||
Diluted weighted average number of common shares and common share equivalents outstanding (1) | 414,572,706 | 248,133,335 | |||||||||
Net (loss) income per share attributable to common stockholders—basic | $ | (0.08) | $ | 0.06 | |||||||
Net (loss) income per share attributable to common stockholders—diluted | $ | (0.08) | $ | 0.02 |
Nine Months Ended September 30, | |||||||||||
2021 | 2020 | ||||||||||
(in thousands, except per share data) | |||||||||||
Net loss | $ | (400,555) | $ | (10,001) | |||||||
Net loss attributable to common stockholders | (400,555) | (10,001) | |||||||||
Basic and diluted weighted average number of common shares and common share equivalents outstanding(1) | 410,417,493 | 88,616,116 | |||||||||
Net loss per share attributable to common stockholders—basic and diluted | $ | (0.98) | $ | (0.11) |
Three Months Ended September 30, | |||||||||||
2021 | 2020 | ||||||||||
Options to purchase common stock (1) | 33,477,833 | 5,183,834 | |||||||||
RSUs | 21,106,720 | — | |||||||||
Warrants to purchase common stock (as converted to common stock) (1) | — | 4,342,956 | |||||||||
Warrants to purchase convertible preferred stock (as converted to common stock) (1) | — | 2,618,770 | |||||||||
Total anti-dilutive shares excluded from computation of earnings per share | 54,584,553 | 12,145,560 |
Nine Months Ended September 30, | |||||||||||
2021 | 2020 | ||||||||||
Options to purchase common stock (1) | 33,477,833 | 37,296,034 | |||||||||
RSUs | 21,106,720 | — | |||||||||
Convertible preferred stock (as converted to common stock) (1) | — | 139,444,346 | |||||||||
Warrants to purchase common stock (as converted to common stock) (1) | — | 4,884,132 | |||||||||
Warrants to purchase convertible preferred stock (as converted to common stock) (1) | — | 2,618,770 | |||||||||
Total anti-dilutive shares excluded from computation of earnings per share | 54,584,553 | 184,243,282 |
September 30, 2021 | |||||
(in thousands) | |||||
Direct Contracting performance year receivable | $ | 220,738 | |||
Direct Contracting performance year obligation(1) | 244,599 | ||||
Three Months Ended September 30, 2021 | Nine Months Ended September 30, 2021 | ||||||||||
(in thousands) | |||||||||||
Amortization of the Direct Contracting performance year receivable | $ | (223,309) | $ | (441,476) | |||||||
Amortization of the Direct Contracting performance year obligation | 223,309 | 441,476 | |||||||||
Direct Contracting revenue | 222,647 | 439,020 |
Medicare Advantage | Direct Contracting | Corporate/Other | Eliminations | Consolidated Total | |||||||||||||||||||||||||
Three Months Ended September 30, 2021 | (in thousands) | ||||||||||||||||||||||||||||
Premiums earned, net (Net of ceded premiums of $120) | $ | 203,657 | $ | — | $ | — | $ | — | $ | 203,657 | |||||||||||||||||||
Direct Contracting revenue | — | 222,647 | — | — | 222,647 | ||||||||||||||||||||||||
Other income | 80 | — | 24,967 | (24,188) | 859 | ||||||||||||||||||||||||
Intersegment revenues | — | — | 9,375 | (9,375) | — | ||||||||||||||||||||||||
Net medical claims incurred | 208,661 | 228,060 | 2,253 | (2,552) | 436,422 | ||||||||||||||||||||||||
Gross (loss) profit | $ | (4,924) | $ | (5,413) | $ | 32,089 | $ | (31,011) | $ | (9,259) | |||||||||||||||||||
Total assets | $ | 347,535 | $ | 260,142 | $ | 887,089 | $ | (542,288) | $ | 952,478 | |||||||||||||||||||
Medicare Advantage | Direct Contracting | Corporate/Other | Eliminations | Consolidated Total | |||||||||||||||||||||||||
Nine Months Ended September 30, 2021 | (in thousands) | ||||||||||||||||||||||||||||
Premiums earned, net (Net of ceded premiums of $370) | $ | 598,390 | $ | — | $ | — | $ | — | $ | 598,390 | |||||||||||||||||||
Direct Contracting revenue | — | 439,020 | — | — | 439,020 | ||||||||||||||||||||||||
Other income | 108 | — | 66,990 | (64,548) | 2,550 | ||||||||||||||||||||||||
Intersegment revenues | — | — | 33,130 | (33,130) | — | ||||||||||||||||||||||||
Net medical claims incurred | 640,624 | 469,972 | 5,273 | (6,494) | 1,109,375 | ||||||||||||||||||||||||
Gross (loss) profit | $ | (42,126) | $ | (30,952) | $ | 94,847 | $ | (91,184) | $ | (69,415) | |||||||||||||||||||
Total assets | $ | 347,535 | $ | 260,142 | $ | 887,089 | $ | (542,288) | $ | 952,478 |
Three Months Ended September 30, 2021 | Nine Months Ended September 30, 2021 | ||||||||||
(in thousands) | |||||||||||
Gross loss | $ | (9,259) | $ | (69,415) | |||||||
Salaries and benefits | 73,364 | 201,555 | |||||||||
General and administrative expenses | 45,749 | 129,983 | |||||||||
Premium deficiency reserve (benefit) | 20,761 | 48,661 | |||||||||
Depreciation and amortization | 120 | 398 | |||||||||
Other expense | — | 191 | |||||||||
Change in fair value of warrants payable | (115,152) | (66,146) | |||||||||
Interest expense | 413 | 2,817 | |||||||||
Amortization of notes and securities discounts | 13 | 13,681 | |||||||||
Net loss | $ | (34,527) | $ | (400,555) |
Citigroup | Deutsche Bank Securities |
SVB Leerink | Canaccord Genuity |
| Legal fees and expenses | | | | $ | 350,000 | | |
| Accounting fees and expenses | | | | | 40,000 | | |
| SEC expenses | | | | | 89,562 | | |
| FINRA expenses | | | | | 104,000 | | |
| Travel and road show | | | | | 40,000 | | |
| Directors and officers insurance premiums | | | | | 250,000 | | |
| NYSE listing and filing fees | | | | | 85,000 | | |
| Printing and engraving expenses | | | | | 35,000 | | |
| Miscellaneous expenses | | | | | 6,438 | | |
| Total offering expenses | | | | $ | 1,000,000 | | |
Amount to Be Paid | ||||||||
SEC registration fee | $ | 26,716 | ||||||
FINRA filing fee | 43,729 | |||||||
Nasdaq listing fee | 20,000 | |||||||
Financial printing | 221,825 | |||||||
Legal fees and expenses | 480,000 | |||||||
Accounting fees and expenses | 125,000 | |||||||
Miscellaneous expenses | 482,730 | |||||||
Total | $ | 1,400,000 |
Incorporated by reference | ||||||||||||||||||||||||||||||||||||||
Exhibit No. | Exhibit title | Form | File No. | Exhibit No. | Filing date | Filed or furnished herewith | ||||||||||||||||||||||||||||||||
1.1 | X | |||||||||||||||||||||||||||||||||||||
2.1† | 8-K | 001-39252 | 2.1 | 10/6/2020 | ||||||||||||||||||||||||||||||||||
2.1(a) | 8-K | 001-39252 | 2.1 | 12/10/2020 | ||||||||||||||||||||||||||||||||||
3.1 | 8-K | 001-39252 | 3.1 | 1/12/2021 | ||||||||||||||||||||||||||||||||||
3.2 | 8-K | 001-39252 | 3.2 | 1/12/2021 | ||||||||||||||||||||||||||||||||||
4.1 | 8-K | 001-39252 | 4.1 | 4/24/2020 | ||||||||||||||||||||||||||||||||||
4.3 | S-4/A | 333-249558 | 4.5 | 11/20/2020 | ||||||||||||||||||||||||||||||||||
4.4 | S-4/A | 333-249558 | 4.6 | 11/20/2020 | ||||||||||||||||||||||||||||||||||
5.1 | X | |||||||||||||||||||||||||||||||||||||
10.1 | 8-K | 001-39252 | 10.1 | 1/12/2021 | ||||||||||||||||||||||||||||||||||
10.2 | 8-K | 001-39252 | 10.2 | 1/12/2021 | ||||||||||||||||||||||||||||||||||
10.3 | S-4 | 333-249558 | 10.15 | 10/20/2020 | ||||||||||||||||||||||||||||||||||
10.4 | 8-K | 001-39252 | 10.4 | 1/12/2021 | ||||||||||||||||||||||||||||||||||
10.5 | 8-K | 001-39252 | 10.5 | 1/12/2021 | ||||||||||||||||||||||||||||||||||
10.6 | 8-K | 001-39252 | 10.6 | 1/12/2021 |
Incorporated by reference | ||||||||||||||||||||||||||||||||||||||
Exhibit No. | Exhibit title | Form | File No. | Exhibit No. | Filing date | Filed or furnished herewith | ||||||||||||||||||||||||||||||||
10.7 | 8-K | 001-39252 | 10.7 | 1/12/2021 | ||||||||||||||||||||||||||||||||||
10.8 | 8-K | 001-39252 | 10.8 | 1/12/2021 | ||||||||||||||||||||||||||||||||||
10.9 | 8-K | 001-39252 | 10.9 | 1/12/2021 | ||||||||||||||||||||||||||||||||||
10.10 | 8-K | 001-39252 | 10.10 | 1/12/2021 | ||||||||||||||||||||||||||||||||||
10.11 | 8-K | 001-39252 | 10.11 | 1/12/2021 | ||||||||||||||||||||||||||||||||||
10.12 | 10-Q | 001-39252 | 10.1 | 11/09/2021 | ||||||||||||||||||||||||||||||||||
10.13 | 10-Q | 001-39252 | 10.2 | 11/09/2021 | ||||||||||||||||||||||||||||||||||
21.1 | 8-K | 001-39252 | 21.1 | 1/12/2021 | ||||||||||||||||||||||||||||||||||
23.1 | X | |||||||||||||||||||||||||||||||||||||
23.2 | X | |||||||||||||||||||||||||||||||||||||
24.1 | X | |||||||||||||||||||||||||||||||||||||
101.INS | XBRL Instance Document | X | ||||||||||||||||||||||||||||||||||||
101.SCH | XBRL Taxonomy Extension Schema Document | X | ||||||||||||||||||||||||||||||||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | X | ||||||||||||||||||||||||||||||||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | X | ||||||||||||||||||||||||||||||||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | X | ||||||||||||||||||||||||||||||||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | X |
CLOVER HEALTH INVESTMENTS, CORP. | ||||||||
By: | /s/ Vivek Garipalli | |||||||
Vivek Garipalli | ||||||||
Chief Executive Officer |
Title | Date | |||||||||||||||
/s/ | Chief Executive Officer and | November 15, 2021 | ||||||||||||||
Vivek Garipalli | (Principal Executive Officer) | |||||||||||||||
/s/ | Interim Chief Financial Officer | November 15, 2021 | ||||||||||||||
Mark C. Herbers | (Principal Financial and Accounting Officer) | |||||||||||||||
/s/ Andrew Toy | President, Chief Technology Officer and Director | |||||||||||||||
/s/ | November 15, 2021 | |||||||||||||||
Chelsea Clinton | ||||||||||||||||
/s/ Demetrios Kouzoukas | Director | November 15, 2021 | ||||||||||||||
Demetrios Kouzoukas | ||||||||||||||||
/s/ William G. Robinson, Jr. | Director | November 15, 2021 | ||||||||||||||
William G. Robinson, Jr. | ||||||||||||||||
/s/ Lee A. Shapiro | Director | November 15, 2021 | ||||||||||||||
Lee A. Shapiro | ||||||||||||||||
/s/ Nathaniel S. Turner | Director | November 15, 2021 | ||||||||||||||
Nathaniel S. Turner |