Washington, D.C. 20549
xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
¨TRANSITION REPORT PURSUANT TO SECTION 13 2024
| o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
________
| Delaware | 98-1515192 | ||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer
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3401 Mallory Lane, Suite 210 Franklin, Tennessee | 37067 | ||||
| (Address of | (Zip Code) | ||||
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | |||||||||||||
| CLOV | |||||||||||||||
| Large accelerated filer | Accelerated filer | x | |||||||||||||
| Smaller reporting company | o | ||||||||||||||
| o | |||||||||||||||
As
SOCIAL CAPITAL HEDOSOPHIA HOLDINGS CORP. III
FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2020
TABLE OF CONTENTS
| Page | |||||||||
| March 31, 2024 (Unaudited), and December 31, 2023 | |||||||||
Condensed | three months ended March 31, 2024 and 2023 | ||||||||
i
SOCIAL CAPITAL HEDOSOPHIA HOLDINGS CORP. III
March 31, 2020 | December 31, 2019 | |||||||
| (unaudited) | ||||||||
| ASSETS | | |||||||
| Current assets - cash | $ | 63,370 | $ | — | ||||
| Deferred offering costs | 587,515 | 100,346 | ||||||
| TOTAL ASSETS | $ | 650,885 | $ | 100,346 | ||||
| LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT) | | |||||||
| Current liabilities | | |||||||
| Accrued offering costs | $ | 343,516 | $ | 100,346 | ||||
| Advance from related party | — | 17,631 | ||||||
| Promissory note – related party | 300,000 | — | ||||||
| Total Current Liabilities | 643,516 | 117,977 | ||||||
| | ||||||||
| Commitments | ||||||||
| Shareholder’s Equity (Deficit) | | |||||||
| Preferred shares, $0.0001 par value; 5,000,000 shares authorized; none issued and outstanding | — | — | ||||||
| Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; none issued and outstanding | — | — | ||||||
| Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 20,700,000 shares issued and outstanding as of March 31, 2020(1) | 2,070 | — | ||||||
| Additional paid-in capital | 22,930 | — | ||||||
| Accumulated deficit | (17,631 | ) | (17,631 | ) | ||||
| Total Shareholder’s Equity (Deficit) | 7,369 | (17,631 | ) | |||||
| TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT) | $ | 650,885 | $ | 100,346 | ||||
The accompanying notes are an integral part of
SOCIAL CAPITAL HEDOSOPHIA HOLDINGS CORP. III
CONDENSED STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2020
(Unaudited)
| Formation and operating costs | $ | — | ||
| Net Loss | $ | — | ||
| Weighted average shares outstanding, basic and diluted | 14,043,956 | |||
| Basic and diluted net loss per ordinary share | $ | (0.00 | ) |
The accompanying notes are an integral part of the unaudited condensed financial statements.
SOCIAL CAPITAL HEDOSOPHIA HOLDINGS CORP. III
CONDENSED STATEMENT OF CHANGES IN SHAREHOLDER’S EQUITY (DEFICIT)
THREE MONTHS ENDED MARCH 31, 2020
(Unaudited)
| Class B Ordinary Shares | Additional Paid-in | Accumulated | Total Shareholder’s (Deficit) | |||||||||||||||||
| Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||
| Balance – January 1, 2020 | 1 | $ | — | $ | — | $ | (17,631 | ) | $ | (17,631 | ) | |||||||||
| Cancellation of Class B ordinary share | (1 | ) | — | — | — | — | ||||||||||||||
| Issuance of Class B ordinary shares to Sponsor(1) | 20,700,000 | 2,070 | 22,930 | — | 25,000 | |||||||||||||||
| Net loss | — | — | — | — | — | |||||||||||||||
| Balance – March 31, 2020 (unaudited) | 20,700,000 | $ | 2,070 | $ | 22,930 | $ | (17,631 | ) | $ | 7,369 | ||||||||||
The accompanying notes are an integral part of the unaudited condensed financial statements.
SOCIAL CAPITAL HEDOSOPHIA HOLDINGS CORP. II
CONDENSED STATEMENT OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2020
(Unaudited)
| Cash Flows from Financing Activities: | ||||
| Proceeds from issuance of Class B ordinary shares to Sponsor | 25,000 | |||
| Repayment of advances from related parties | (17,631 | ) | ||
| Proceeds from promissory note - related party | 300,000 | |||
| Payment of offering costs | (243,999 | ) | ||
| Net cash provided by financing activities | 63,370 | |||
| Net Change in Cash | 63,370 | |||
| Cash – Beginning | — | |||
| Cash – Ending | $ | 63,370 | ||
| Non-cash investing and financing activities: | ||||
| Deferred offering costs included in accrued offering costs | $ | 248,170 | ||
The accompanying notes are an integral part of the unaudited condensed financial statements.
4
SOCIAL CAPITAL HEDOSOPHIA HOLDINGS CORP. III
NOTES TO CONDENSED FINANCIAL
MARCH 31, 2020
(Unaudited)
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Social Capital Hedosophia Holdings Corp. III (the “Company”) is a blank check company incorporated as a Cayman Islands exempted company on October 18, 2019. The Company was formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (a “Business Combination”).
Although the Company is not limited to a particular industry or sector for purposes of consummating a Business Combination, the Company intends to focus on businesses in the technology industries primarily located in the United States. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
As of March 31, 2020, the Company had not commenced any operations. All activity for the period from October 18, 2019 (inception) through March 31, 2020 relates to the Company’s formation and the initial public offering (“Initial Public Offering”), which is described below. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering.
The registration
Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 10,933,333 warrants (the “Private Placement Warrants”) at a price of $1.50 per Private Placement Warrant in a private placement to SCH Sponsor III LLC (the “Sponsor”), generating gross proceeds of $16,400,000, which is described in Note 4.
Transaction costs amounted to $44,156,346 consisting of $14,400,000 of underwriting fees, $28,980,000 of deferred underwriting fees and $776,346 of other offering costs. In addition, $1,663,066 of cash was held outside of the Trust Account, as defined below, and is available for working capital purposes.
Following the closing of the Initial Public Offering on April 24, 2020, an amount of $828,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”) located in the United States and invested in U.S. government securities, within the meaning set forth inof Section 2(a)(16)27A of the Investment CompanySecurities Act of 1940,1933, as amended (the “Investment Company Act”), with a maturity of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the funds in the Trust Account to the Company’s shareholders, as described below.
The Company will provide the holders of the public shares (the “Public Shareholders”) with the opportunity to redeem all or a portion of their public shares upon the completion of the Business Combination, either (i) in connection with a shareholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public Shareholders will be entitled to redeem their shares for a pro rata portion of the amount held in the Trust Account, calculated as of two business days prior to the completion of a Business Combination, including any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations. The per-share amount to be distributed to the Public Shareholders who redeem their shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note 6). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants.
5
SOCIAL CAPITAL HEDOSOPHIA HOLDINGS CORP. III
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2020
(Unaudited)
The Company will proceed with a Business Combination only if the Company has net tangible assets, after payment of the deferred underwriting commission, of at least $5,000,001 upon such completion of a Business Combination and, if the Company seeks shareholder approval, it receives an ordinary resolution under Cayman Islands law approving a Business Combination, which requires the affirmative vote of a majority of the shareholders who attend and vote and a general meeting of the Company. If a shareholder vote is not required and the Company does not decide to hold a shareholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Memorandum and Articles of Association, conduct the redemptions pursuant to the tender offer rules of the Securities and Exchange Commission (“SEC”"Securities Act"), and file tender offer documents containing substantially the same information as would be included in a proxy statement with the SEC prior to completing a Business Combination. If the Company seeks shareholder approval in connection with a Business Combination, the Company’s Sponsor has agreed to vote its Founder Shares (as defined in Note 5) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination and to waive its redemption rights with respect to any such shares in connection with a shareholder vote to approve a Business Combination or seek to sell any shares to the Company in a tender offer in connection with a Business Combination. Additionally, subject to the immediately succeeding paragraph, each public shareholder may elect to redeem their Public Shares, without voting, and if they do vote, irrespective of whether they vote for or against a proposed Business Combination.
Notwithstanding the foregoing, if the Company seeks shareholder approval of the Business Combination and the Company does not conduct redemptions pursuant to the tender offer rules, a Public Shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 1321E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”"Exchange Act"). All statements contained in this document other than statements of historical fact, including statements regarding our future results of operations, financial position, market size and opportunity, our business strategy and plans, the factors affecting our performance and our objectives for future operations, are forward-looking statements. The words "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "could," "should," "would," "can," "expect," "project," "outlook," "forecast," "objective," "plan," "potential," "seek," "grow," "target," "if," and the negative or plural of these words and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including the risk factors described in our filings with the Securities and Exchange Commission (the "SEC"). Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this document may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Forward-looking statements contained in this document involve a number of judgments, risks and uncertainties, including, without limitation, risks related to:
March 31, 2024 (Unaudited) | December 31, 2023 | ||||||||||
| Assets | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | 208,255 | $ | 116,407 | |||||||
| Short-term investments | 9,120 | 12,218 | |||||||||
| Investment securities, available-for-sale (Amortized cost: 2024: $119,528; 2023: $101,412) | 118,056 | 100,702 | |||||||||
| Investment securities, held-to-maturity (Fair value: 2024: $6,853; 2023: $6,778) | 6,923 | 6,902 | |||||||||
| Accrued retrospective premiums | 70,607 | 22,076 | |||||||||
| Other receivables | 22,533 | 16,666 | |||||||||
| Healthcare receivables | 83,867 | 64,164 | |||||||||
| Surety bonds and deposits | 740 | 542 | |||||||||
| Prepaid expenses | 16,761 | 14,418 | |||||||||
| Other assets, current | 4,949 | 1,404 | |||||||||
| Assets related to discontinued operations (Note 17) | 10,926 | 72,471 | |||||||||
| Total current assets | 552,737 | 427,970 | |||||||||
| Investment securities, available-for-sale (Amortized cost: 2024: $98,221; 2023: $121,868) | 97,133 | 120,208 | |||||||||
| Investment securities, held-to-maturity (Fair value: 2024: $693; 2023: $692) | 792 | 793 | |||||||||
| Property and equipment, net | 5,209 | 5,082 | |||||||||
| Operating lease right-of-use assets | 3,124 | 3,382 | |||||||||
| Other intangible assets | 2,990 | 2,990 | |||||||||
| Other assets, non-current | 9,785 | 10,246 | |||||||||
| Total assets | $ | 671,770 | $ | 570,671 | |||||||
March 31, 2024 (Unaudited) | December 31, 2023 | ||||||||||
| Liabilities and Stockholders' Equity | |||||||||||
| Current liabilities | |||||||||||
| Unpaid claims | $ | 238,602 | $ | 135,737 | |||||||
| Due to related parties, net | 881 | 1,363 | |||||||||
| Accounts payable and accrued expenses | 35,408 | 37,184 | |||||||||
| Accrued salaries and benefits | 28,327 | 20,951 | |||||||||
| Deferred revenue | — | 3,099 | |||||||||
| Operating lease liabilities | 1,623 | 1,665 | |||||||||
| Other liabilities, current | 926 | 1,017 | |||||||||
| Liabilities related to discontinued operations (Note 17) | 50,622 | 60,099 | |||||||||
| Total current liabilities | 356,389 | 261,115 | |||||||||
| Long-term operating lease liabilities | 2,717 | 2,998 | |||||||||
| Other liabilities, non-current | 20,190 | 20,164 | |||||||||
| Total liabilities | 379,296 | 284,277 | |||||||||
| Commitments and Contingencies (Note 13) | |||||||||||
| Stockholders' equity | |||||||||||
| Class A Common Stock, $0.0001 par value; 2,500,000,000 shares authorized at March 31, 2024 and December 31, 2023; 406,155,332 and 401,183,882 issued and outstanding at March 31, 2024 and December 31, 2023, respectively | 41 | 40 | |||||||||
| Class B Common Stock, $0.0001 par value; 500,000,000 shares authorized at March 31, 2024 and December 31, 2023; 89,649,365 and 87,867,732 issued and outstanding at March 31, 2024 and December 31, 2023, respectively | 9 | 9 | |||||||||
| Additional paid-in capital | 2,490,036 | 2,461,238 | |||||||||
| Accumulated other comprehensive loss | (2,560) | (2,370) | |||||||||
| Accumulated deficit | (2,178,964) | (2,159,794) | |||||||||
| Less: Treasury stock, at cost; 11,613,745 and 7,912,750 shares held at March 31, 2024 and December 31, 2023, respectively | (16,088) | (12,729) | |||||||||
| Total stockholders' equity | 292,474 | 286,394 | |||||||||
| Total liabilities and stockholders' equity | $ | 671,770 | $ | 570,671 | |||||||
| Three Months Ended March 31, | ||||||||||||||||||||||||||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||||||||||||||
| Premiums earned, net (Net of ceded premiums of $101 and $122 for the three months ended March 31, 2024 and 2023, respectively) | $ | 341,722 | $ | 317,086 | ||||||||||||||||||||||||||||||||||
| Other income | 5,200 | 4,906 | ||||||||||||||||||||||||||||||||||||
| Total revenues | 346,922 | 321,992 | ||||||||||||||||||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||||||||||||||
| Net medical claims incurred | 265,162 | 274,789 | ||||||||||||||||||||||||||||||||||||
| Salaries and benefits | 59,223 | 68,981 | ||||||||||||||||||||||||||||||||||||
| General and administrative expenses | 44,569 | 57,644 | ||||||||||||||||||||||||||||||||||||
| Premium deficiency reserve benefit | — | (1,810) | ||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 318 | 279 | ||||||||||||||||||||||||||||||||||||
| Restructuring costs | 353 | 1,807 | ||||||||||||||||||||||||||||||||||||
| Total operating expenses | 369,625 | 401,690 | ||||||||||||||||||||||||||||||||||||
| Loss from continuing operations | (22,703) | (79,698) | ||||||||||||||||||||||||||||||||||||
| Loss on investment | 467 | — | ||||||||||||||||||||||||||||||||||||
| Net loss from continuing operations | (23,170) | (79,698) | ||||||||||||||||||||||||||||||||||||
| Net income from discontinued operations (Note 17) | 4,000 | 7,092 | ||||||||||||||||||||||||||||||||||||
| Net loss | $ | (19,170) | $ | (72,606) | ||||||||||||||||||||||||||||||||||
| Per share data: | ||||||||||||||||||||||||||||||||||||||
| Continuing Operations: | ||||||||||||||||||||||||||||||||||||||
| Basic and diluted weighted average number of Class A and Class B common shares and common share equivalents outstanding | 486,374,644 | 478,805,067 | ||||||||||||||||||||||||||||||||||||
| Basic and diluted net loss per share | $ | (0.05) | $ | (0.17) | ||||||||||||||||||||||||||||||||||
| Discontinued operations: | ||||||||||||||||||||||||||||||||||||||
| Basic weighted average number of Class A and Class B common shares and common share equivalents outstanding | 486,374,644 | 478,805,067 | ||||||||||||||||||||||||||||||||||||
| Diluted weighted average number of Class A and Class B common shares and common share equivalents outstanding | 567,451,166 | 566,629,082 | ||||||||||||||||||||||||||||||||||||
| Basic earnings per share | $ | 0.01 | $ | 0.01 | ||||||||||||||||||||||||||||||||||
| Diluted earnings per share | $ | 0.01 | $ | 0.01 | ||||||||||||||||||||||||||||||||||
| Net unrealized (loss) gain on available-for-sale investments | (190) | 2,343 | ||||||||||||||||||||||||||||||||||||
| Comprehensive loss | $ | (19,360) | $ | (70,263) | ||||||||||||||||||||||||||||||||||
| Class A Common Stock | Class B Common Stock | Treasury Stock | Additional paid-in capital | Accumulated deficit | Accumulated other comprehensive income (loss) | Total stockholders' equity (deficit) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2022 | 383,998,718 | $ | 37 | 94,394,852 | $ | 9 | 2,072,752 | $ | (6,509) | $ | 2,319,157 | $ | (1,955,582) | $ | (9,374) | $ | 347,738 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Change in accounting policy | — | — | — | — | — | — | — | 9,149 | — | 9,149 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted balance, beginning of period | 383,998,718 | $ | 37 | 94,394,852 | $ | 9 | 2,072,752 | $ | (6,509) | $ | 2,319,157 | $ | (1,946,433) | $ | (9,374) | $ | 356,887 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Stock issuance for exercise of stock options, net of early exercise liability | 1,240 | — | — | — | — | — | 848 | — | — | 848 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | 38,617 | — | — | 38,617 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Vested restricted stock units | 5,390,973 | — | 1,773,104 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Unrealized holdings gain on investment securities, available for sale | — | — | — | — | — | — | — | — | 2,343 | 2,343 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Conversion from Class B Common Stock to Class A Common Stock | 7,672,463 | — | (7,672,463) | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Treasury stock acquired | (2,933,721) | — | — | — | 2,933,721 | (2,982) | — | — | — | (2,982) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | — | — | (72,606) | — | (72,606) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2023 | 394,129,673 | $ | 37 | 88,495,493 | $ | 9 | 5,006,473 | $ | (9,491) | $ | 2,358,622 | $ | (2,019,039) | $ | (7,031) | $ | 323,107 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2023 | 401,183,882 | $ | 40 | 87,867,732 | $ | 9 | 7,912,750 | $ | (12,729) | $ | 2,461,238 | $ | (2,159,794) | $ | (2,370) | $ | 286,394 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Stock issuance for exercise of stock options, net of early exercise liability | 83 | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | 28,798 | — | — | 28,798 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Vested restricted stock units | 8,672,362 | 1 | 1,781,633 | — | — | — | — | — | — | 1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Unrealized holdings gain on investment securities, available for sale | — | — | — | — | — | — | — | — | (190) | (190) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Conversion from Class B Common Stock to Class A Common Stock | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Treasury stock acquired | (3,700,995) | — | — | — | 3,700,995 | (3,359) | — | — | — | (3,359) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of Common Stock under Employee Stock Purchase Plan | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | — | — | (19,170) | — | (19,170) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2024 | 406,155,332 | $ | 41 | 89,649,365 | $ | 9 | 11,613,745 | $ | (16,088) | $ | 2,490,036 | $ | (2,178,964) | $ | (2,560) | $ | 292,474 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended March 31, | |||||||||||||||||
| 2024 | 2023 | ||||||||||||||||
| Cash flows from operating activities: | |||||||||||||||||
| Net loss | $ | (19,170) | $ | (72,606) | |||||||||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||||||||
| Depreciation and amortization expense | 318 | 279 | |||||||||||||||
| Stock-based compensation expense | 28,798 | 38,617 | |||||||||||||||
| Accretion, net of amortization | (671) | (3,254) | |||||||||||||||
| Accrued interest earned | (153) | (12) | |||||||||||||||
| Net unrealized (losses) gains on investment securities | (190) | 2,343 | |||||||||||||||
| Gain on investment | 467 | — | |||||||||||||||
| Premium deficiency reserve | — | (1,810) | |||||||||||||||
| Changes in operating assets and liabilities: | |||||||||||||||||
| Accrued retrospective premiums | (48,531) | (49,798) | |||||||||||||||
| Other receivables | (5,867) | (695) | |||||||||||||||
| Surety bonds and deposits | (198) | — | |||||||||||||||
| Prepaid expenses | (2,343) | 1,248 | |||||||||||||||
| Other assets | (3,557) | 3,391 | |||||||||||||||
| Healthcare receivables | (19,703) | 13,664 | |||||||||||||||
| Operating lease right-of-use assets | 258 | (84) | |||||||||||||||
| Unpaid claims | 102,383 | 1,122 | |||||||||||||||
| Accounts payable and accrued expenses | (1,776) | 15,007 | |||||||||||||||
| Accrued salaries and benefits | 7,376 | 6,344 | |||||||||||||||
| Deferred revenue | (3,099) | 107,563 | |||||||||||||||
| Other liabilities | (65) | 694 | |||||||||||||||
| Operating lease liabilities | (323) | (90) | |||||||||||||||
| Discontinued operations (Note 17) | (8,019) | 17,109 | |||||||||||||||
| Net cash provided by operating activities | 25,935 | 79,032 | |||||||||||||||
| Cash flows from investing activities: | |||||||||||||||||
| Purchases of short-term investments, available-for-sale, and held-to-maturity securities | (24,105) | (67,893) | |||||||||||||||
| Proceeds from sales of short-term investments and available-for-sale securities | — | 15,001 | |||||||||||||||
| Proceeds from maturities of short-term investments, available-for-sale, and held-to-maturity securities | 33,735 | 63,324 | |||||||||||||||
| Purchases of property and equipment | (445) | (251) | |||||||||||||||
| Net cash provided by investing activities | 9,185 | 10,181 | |||||||||||||||
| Cash flows from financing activities: | |||||||||||||||||
| Issuance of common stock, net of early exercise liability | — | 848 | |||||||||||||||
| Treasury stock acquired | (3,359) | (2,982) | |||||||||||||||
| Net cash used in financing activities | (3,359) | (2,134) | |||||||||||||||
| Net increase in cash, cash equivalents, and restricted cash for discontinued and continuing operations | 31,761 | 87,079 | |||||||||||||||
| Cash, cash equivalents, and restricted cash, beginning of period for discontinued and continuing operations | 176,494 | 186,213 | |||||||||||||||
| Cash, cash equivalents, and restricted cash, end of period for discontinued and continuing operations | $ | 208,255 | $ | 273,292 | |||||||||||||
| Reconciliation of cash and cash equivalents and restricted cash for discontinued and continuing operations | |||||||||||||||||
| Cash and cash equivalents | $ | 208,255 | $ | 190,562 | |||||||||||||
| Restricted cash | — | 82,730 | |||||||||||||||
| Total cash, cash equivalents, and restricted cash for discontinued and continuing operations | $ | 208,255 | $ | 273,292 | |||||||||||||
| Supplemental disclosure of non-cash activities | |||||||||||||||||
| Performance year receivable | $ | — | $ | (552,620) | |||||||||||||
| Performance year obligation | — | 552,620 | |||||||||||||||
The Sponsor has agreed (a)exit from the ACO REACH Program follows its November 2022 announcement of a strategic reduction in the number of ACO REACH participating physicians in 2023, and was made after the Company determined that it is in the Company's best interest to waive its redemption rights with respect to any Founder Shares and Public Shares held by it in connectionfully exit the ACO REACH Program starting with the completion of a Business Combination (and not seek2024 performance year. The activity recognized during 2024 relates to sell its shares to the Company in any tender offer the Company undertakes in connectionprior performance years with its initial Business Combination)CMS and (b) not to propose an amendment to the Amended and Restated Memorandum of Articles of Association (i) to modify the substance or timing of the Company’s obligation to redeem 100% of the Public Shares if the Company does not complete a Business Combinationare presented within Combination Period (as defined below) or (ii) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity, unless the Company provides the public shareholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.
The Company will have until April 24, 2022 (the “Combination Period”) to consummate a Business Combination. However, if the Company has not completed a Business Combinationdiscontinued operations for all periods presented within the Combination Period,condensed consolidated financial statements. See Note 17 for further discussion of discontinued operations. Medical Service Professionals of NJ, LLC, houses Clover's employed physicians and the related support staff for Clover's in-home care program. Clover's administrative functions and insurance operations are primarily operated by its Clover Health, LLC and Clover Health Labs, LLC subsidiaries.
6
SOCIAL CAPITAL HEDOSOPHIA HOLDINGS CORP. III
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2020
(Unaudited)
In order to protect the amounts held in the Trust Account, the Sponsor has agreed that it will be liable to the Company, if and to the extent any claims by a third party (other than the Company’s independent auditors) for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (1) $10.00 per Public Share or (2) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of trust assets, in each case net of the interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). In the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (other than the Company’s independent auditors), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
presentation
The accompanying All material intercompany balances and transactions have been eliminated in consolidating these financial statements. Investments over which we exercise significant influence, but do not control, are accounted for using the applicable accounting treatment based on the nature of the investment. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s prospectus for its Initial Public Offering as filed with the SEC on April 23, 2020, as well as the Company’s Current Reports on Form 8-K, as filed with the SEC on April 24, 2020 and April 30, 2020. The interim results for the three months ended March 31, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020 or for any future periods.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxyaudited consolidated financial statements and exemptions fromrelated notes to the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of usingincluded in the extended transition period difficult or impossible because of the potential differences in accounting standards used.
7
SOCIAL CAPITAL HEDOSOPHIA HOLDINGS CORP. III
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2020
(Unaudited)
Use of Estimates
estimates
| March 31, 2024 | 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 | $ | 7,715 | $ | — | $ | (169) | $ | 7,546 | ||||||||||||||||||
| Investment securities, available-for-sale | ||||||||||||||||||||||||||
| U.S. government and government agencies and authorities | 137,911 | 235 | (2,782) | 135,364 | ||||||||||||||||||||||
| Corporate debt securities | 77,957 | 91 | (104) | 77,944 | ||||||||||||||||||||||
| Other | 1,881 | — | — | 1,881 | ||||||||||||||||||||||
| Total held-to-maturity and available-for-sale investment securities | $ | 225,464 | $ | 326 | $ | (3,055) | $ | 222,735 | ||||||||||||||||||
| December 31, 2023 | 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 | $ | 7,695 | $ | — | $ | (225) | $ | 7,470 | ||||||||||||||||||
| Investment securities, available-for-sale | ||||||||||||||||||||||||||
| U.S. government and government agencies and authorities | 126,071 | 713 | (3,070) | 123,714 | ||||||||||||||||||||||
| Corporate debt | 95,354 | 165 | (176) | 95,343 | ||||||||||||||||||||||
| Other | 1,855 | — | (2) | 1,853 | ||||||||||||||||||||||
| Total held-to-maturity and available-for-sale investment securities | $ | 230,975 | $ | 878 | $ | (3,473) | $ | 228,380 | ||||||||||||||||||
| March 31, 2024 | Held-to-maturity | Available-for-sale | ||||||||||||||||||||||||
| Amortized cost | Fair value | Amortized cost | Fair value | |||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||
| Due within one year | $ | 6,923 | $ | 6,853 | $ | 119,528 | $ | 118,056 | ||||||||||||||||||
| Due after one year through five years | 680 | 602 | 98,221 | 97,133 | ||||||||||||||||||||||
| Due after five years through ten years | — | — | — | — | ||||||||||||||||||||||
| Due after ten years | 112 | 91 | — | — | ||||||||||||||||||||||
| Total | $ | 7,715 | $ | 7,546 | $ | 217,749 | $ | 215,189 | ||||||||||||||||||
| Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2024 | 2023 | ||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 2,186 | $ | 1,629 | |||||||||||||||||||||||||||||||||||||||||||
| Short-term investments | 174 | 492 | |||||||||||||||||||||||||||||||||||||||||||||
| Investment securities | 2,108 | 1,814 | |||||||||||||||||||||||||||||||||||||||||||||
| Investment income, net | $ | 4,468 | $ | 3,935 | |||||||||||||||||||||||||||||||||||||||||||
| March 31, 2024 | 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 and authorities | $ | 33,908 | $ | (54) | $ | 61,799 | $ | (2,906) | $ | 95,707 | $ | (2,960) | ||||||||||||||||||||||||||
| Corporate debt securities | 38,850 | (75) | 6,691 | (20) | 45,541 | (95) | ||||||||||||||||||||||||||||||||
| Total | $ | 72,758 | $ | (129) | $ | 68,490 | $ | (2,926) | $ | 141,248 | $ | (3,055) | ||||||||||||||||||||||||||
| Number of positions | 55 | 29 | 84 | |||||||||||||||||||||||||||||||||||
| December 31, 2023 | 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 and authorities | $ | 12,584 | $ | (32) | $ | 61,628 | $ | (3,259) | $ | 74,212 | $ | (3,291) | ||||||||||||||||||||||||||
| Corporate debt securities | 61,007 | (175) | 5,017 | (7) | 66,024 | (182) | ||||||||||||||||||||||||||||||||
| Total | $ | 73,591 | $ | (207) | $ | 66,645 | $ | (3,266) | $ | 140,236 | $ | (3,473) | ||||||||||||||||||||||||||
| Number of positions | 69 | 27 | 96 | |||||||||||||||||||||||||||||||||||
| Three Months Ended March 31, | ||||||||||||||||||||||||||||||||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||||||||||||||||||||
| Proceeds from sales of investment securities | $ | — | $ | 15,001 | ||||||||||||||||||||||||||||||||||||||||
| Proceeds from maturities of investment securities | 33,735 | 63,324 | ||||||||||||||||||||||||||||||||||||||||||
| Gross realized gains | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Gross realized losses | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Net realized gains (losses) | $ | — | $ | — | ||||||||||||||||||||||||||||||||||||||||
| March 31, 2024 | Level 1 | Level 2 | Level 3 | Total fair value | ||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||
| U.S. government and government agencies | $ | — | $ | 135,364 | $ | — | $ | 135,364 | ||||||||||||||||||
| Corporate debt securities | — | 77,944 | — | 77,944 | ||||||||||||||||||||||
| Other | 1,881 | — | — | 1,881 | ||||||||||||||||||||||
| Warrants receivable | — | — | 814 | 814 | ||||||||||||||||||||||
| Total assets at fair value | $ | 1,881 | $ | 213,308 | $ | 814 | $ | 216,003 | ||||||||||||||||||
| December 31, 2023 | Level 1 | Level 2 | Level 3 | Total fair value | ||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||
| U.S. government and government agencies | $ | — | $ | 123,714 | $ | — | $ | 123,714 | ||||||||||||||||||
| Corporate debt securities | — | 95,343 | — | 95,343 | ||||||||||||||||||||||
| Other | 1,853 | — | — | 1,853 | ||||||||||||||||||||||
| Warrants receivable | — | — | 814 | 814 | ||||||||||||||||||||||
| Total assets at fair value | $ | 1,853 | $ | 219,057 | $ | 814 | $ | 221,724 | ||||||||||||||||||
| Warrants receivable | Total | |||||||||||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||||||||
| Balance, December 31, 2023 | $ | 814 | $ | 814 | ||||||||||||||||||||||||||||
| Receipts | — | — | ||||||||||||||||||||||||||||||
| Settlements | — | — | ||||||||||||||||||||||||||||||
| Transfers in | — | — | ||||||||||||||||||||||||||||||
| Transfers out | — | — | ||||||||||||||||||||||||||||||
Total unrealized losses (gains) | — | — | ||||||||||||||||||||||||||||||
| Balance, March 31, 2024 | $ | 814 | $ | 814 | ||||||||||||||||||||||||||||
| Three Months Ended March 31, | 2024 | 2023 | ||||||||||||
| (in thousands) | ||||||||||||||
Gross and net balance, beginning of period (1) | $ | 137,100 | $ | 137,395 | ||||||||||
| Incurred related to: | ||||||||||||||
| Current year | 277,871 | 272,258 | ||||||||||||
| Prior years | (17,647) | 804 | ||||||||||||
| Total incurred | 260,224 | 273,062 | ||||||||||||
| Paid related to: | ||||||||||||||
| Current year | 84,549 | 167,360 | ||||||||||||
| Prior years | 73,292 | 104,581 | ||||||||||||
| Total paid | 157,841 | 271,941 | ||||||||||||
Gross and net balance, end of period (1) | $ | 239,483 | $ | 138,516 | ||||||||||
| March 31, 2024 | Shares Authorized Under Plans | Shares Outstanding Under Plans | Shares Remaining Under Plans | |||||||||||||||||
| 2014 Plan | 54,402,264 | 23,977,273 | N/A | |||||||||||||||||
| 2020 Plan | 86,604,581 | 45,291,944 | 22,392,308 | |||||||||||||||||
| 2020 MIP | 33,426,983 | 23,398,889 | — | |||||||||||||||||
| Inducement Plan | 11,000,000 | 2,452,449 | 4,228,753 | |||||||||||||||||
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimateaverage closing price of a share of the effect ofCompany's Class A common stock over a condition, situation or set of circumstances that existed atspecified period through the date of grant. The total estimated grant date fair value is amortized over the financial statements, which management consideredrequisite service period.
| Three Months Ended March 31, | 2024 | 2023 | ||||||||||||||||||
| (in thousands) | ||||||||||||||||||||
| Stock options | $ | 618 | $ | 1,341 | ||||||||||||||||
| RSUs | 20,917 | 21,000 | ||||||||||||||||||
| PRSUs | 7,213 | 16,195 | ||||||||||||||||||
| ESPP | 50 | 81 | ||||||||||||||||||
| Total compensation cost recognized for stock-based compensation plans | $ | 28,798 | $ | 38,617 | ||||||||||||||||
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchasedESPP, estimated to be cash equivalents. recognized over a period of four years.
| Number of stock options | Weighted-average exercise price | ||||||||||
| Outstanding, January 1, 2024 | 952,900 | $ | 8.88 | ||||||||
| Granted | — | — | |||||||||
| Exercised | — | — | |||||||||
| Forfeited | (78,180) | 8.88 | |||||||||
| Outstanding, March 31, 2024 | 874,720 | $ | 8.88 | ||||||||
| Number of stock options | Weighted-average exercise price | ||||||||||
| Outstanding, January 1, 2024 | 24,041,753 | $ | 1.45 | ||||||||
| Granted | — | — | |||||||||
| Exercised | 83 | 0.84 | |||||||||
| Forfeited | (64,632) | 2.37 | |||||||||
| Outstanding, March 31, 2024 | 23,977,204 | $ | 1.45 | ||||||||
| Number of RSUs | Weighted-average grant date fair value per share | |||||||||||||
| Outstanding, January 1, 2024 | 56,928,405 | $ | 4.28 | |||||||||||
| Granted during 2024 | 7,124,716 | 0.92 | ||||||||||||
| Released | (10,371,186) | 6.45 | ||||||||||||
| Forfeited | (4,495,795) | 2.28 | ||||||||||||
| Outstanding, March 31, 2024 | 49,186,140 | $ | 3.52 | |||||||||||
| Year ended December 31, 2021 | ||||||||
Expected volatility (1) | 40.7 | % | ||||||
Risk-free interest rate (2) | 0.5 | |||||||
Dividend yield (3) | — | |||||||
| Number of PRSUs | Weighted-average grant date fair value per share | |||||||||||||
| Non-vested, January 1, 2024 | 32,131,532 | $ | 8.36 | |||||||||||
| Granted during 2024 | — | — | ||||||||||||
| Vested | (11,857) | 8.85 | ||||||||||||
| Forfeited | (290,381) | 1.59 | ||||||||||||
| Non-vested at March 31, 2024 | 31,829,294 | $ | 8.43 | |||||||||||
Deferred Offering Costs
Offering costs consistthe Company's stockholders approved the ESPP, which permits eligible employees and service providers of legal, accounting, underwriting feeseither the Company or designated related companies and other costs incurred throughaffiliates to contribute up to 15% of their eligible compensation during defined offering periods to purchase shares of the balance sheet dateCompany’s Class A common stock at a 15% discount from the fair market value of the common stock as determined on specific dates at specific intervals. Subject to adjustments provided in the ESPP that are directly relateddiscussed below, the maximum number of shares of common stock that may be purchased under the ESPP is 14,163,863 shares, and the maximum number of shares that may be purchased on any single purchase date by any one participant is 5,000 shares. At March 31, 2024, 13,078,532 shares of Class A common stock were available for issuance under the ESPP.
total number of shares of Class A common stock outstanding on the last day of the calendar month prior to the date of such automatic increase, and (ii) such number of shares of Class A common stock as determined by the Board; provided that the maximum number of shares of Class A common stock reserved under the ESPP shall not exceed 10.0% of the total outstanding capital stock of the Company (inclusive of the shares reserved under the ESPP) as of January 7, 2021, on an as-converted basis.
| Offering period from November 23, 2023 to May 21, 2024 | ||||||||
| Weighted-average risk-free interest rate | 5.5 | % | ||||||
| Expected term (in years) | 0.50 | |||||||
| Expected volatility | 82.3 | % | ||||||
ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities.zero. The Company recognizes accrued interestbelieves that at March 31, 2024, it had no material uncertain tax positions. Interest and penalties related to unrecognized tax benefits asexpense (benefits) are recognized in income tax expense. expense, when applicable.
| Three Months Ended March 31, | |||||||||||||||||
| 2024 | 2023 | ||||||||||||||||
(in thousands, except per share and share amounts) | |||||||||||||||||
| Net loss from continuing operations attributable to Common Stockholders | $ | (23,170) | $ | (79,698) | |||||||||||||
| Basic and diluted weighted average number of common shares and common share equivalents outstanding | 486,374,644 | 478,805,067 | |||||||||||||||
| Basic and diluted net loss per share | $ | (0.05) | $ | (0.17) | |||||||||||||
| Three Months Ended March 31, | |||||||||||||||||
| 2024 | 2023 | ||||||||||||||||
| Options to purchase common stock | 24,851,924 | 25,834,803 | |||||||||||||||
| RSUs | 49,186,140 | 57,742,605 | |||||||||||||||
| PRSUs | 31,829,294 | 29,945,235 | |||||||||||||||
| Total anti-dilutive shares excluded from computation of net loss per share | 105,867,358 | 113,522,643 | |||||||||||||||
| Three Months Ended March 31, | |||||||||||||||||
| 2024 | 2023 | ||||||||||||||||
(in thousands, except per share and share amounts) | |||||||||||||||||
| Net income from discontinued operations attributable to Common Stockholders | $ | 4,000 | $ | 7,092 | |||||||||||||
| Basic weighted average number of common shares and common share equivalents outstanding | 486,374,644 | 478,805,067 | |||||||||||||||
| Potential dilutive shares: | |||||||||||||||||
| RSU | 49,186,140 | 57,742,605 | |||||||||||||||
| PRSU | 31,829,294 | 29,945,235 | |||||||||||||||
| Stock Options | 61,088 | 136,175 | |||||||||||||||
| Weighted average shares used in computing net income per share of common stock, diluted | 567,451,166 | 566,629,082 | |||||||||||||||
| Basic earnings per share | $ | 0.01 | $ | 0.01 | |||||||||||||
| Diluted earnings per share | $ | 0.01 | $ | 0.01 | |||||||||||||
| Three Months Ended March 31, | |||||||||||||||||
| 2024 | 2023 | ||||||||||||||||
| Options to purchase common stock | 24,790,836 | 25,698,628 | |||||||||||||||
| Insurance | Corporate/Other | Eliminations | Consolidated Total | |||||||||||||||||||||||
| Three months ended March 31, 2024 | (in thousands) | |||||||||||||||||||||||||
| Premiums earned, net (net of ceded premiums of $101) | $ | 341,722 | $ | — | $ | — | $ | 341,722 | ||||||||||||||||||
| Other income | 3,727 | 15,681 | (14,208) | 5,200 | ||||||||||||||||||||||
| Intersegment revenues | — | 48,465 | (48,465) | — | ||||||||||||||||||||||
| Net medical claims incurred | 266,076 | 4,938 | (5,852) | 265,162 | ||||||||||||||||||||||
| Gross profit (loss) | $ | 79,373 | $ | 59,208 | $ | (56,821) | $ | 81,760 | ||||||||||||||||||
| Total assets | $ | 498,360 | $ | 838,045 | $ | (664,635) | $ | 671,770 | ||||||||||||||||||
| Insurance | Corporate/Other | Eliminations | Consolidated Total | |||||||||||||||||||||||
| Three months ended March 31, 2023 | (in thousands) | |||||||||||||||||||||||||
| Premiums earned, net (net of ceded premiums of $122) | $ | 317,086 | $ | — | $ | — | $ | 317,086 | ||||||||||||||||||
| Other income | 1,839 | 17,738 | (14,671) | 4,906 | ||||||||||||||||||||||
| Intersegment revenues | — | 23,231 | (23,231) | — | ||||||||||||||||||||||
| Net medical claims incurred | 274,504 | 3,448 | (3,163) | 274,789 | ||||||||||||||||||||||
| Gross profit (loss) | $ | 44,421 | $ | 37,521 | $ | (34,739) | $ | 47,203 | ||||||||||||||||||
| Total assets | $ | 467,392 | $ | 936,903 | $ | (666,810) | $ | 737,485 | ||||||||||||||||||
| Three Months Ended March 31, | 2024 | 2023 | ||||||||||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||||||||
| Gross profit | $ | 81,760 | $ | 47,203 | ||||||||||||||||||||||||||||
| Salaries and benefits | 59,223 | 68,981 | ||||||||||||||||||||||||||||||
| General and administrative expenses | 44,569 | 57,644 | ||||||||||||||||||||||||||||||
| Premium deficiency reserve benefit | — | (1,810) | ||||||||||||||||||||||||||||||
| Depreciation and amortization | 318 | 279 | ||||||||||||||||||||||||||||||
| Restructuring costs | 353 | 1,807 | ||||||||||||||||||||||||||||||
| Loss (gain) on investment | 467 | — | ||||||||||||||||||||||||||||||
| Net loss from continuing operations | $ | (23,170) | $ | (79,698) | ||||||||||||||||||||||||||||
| Three Months Ended March 31, | 2024 | 2023 | ||||||||||||
| (in thousands) | ||||||||||||||
| Employee termination benefits | $ | — | $ | 1,226 | ||||||||||
| Vendor related costs | 349 | 581 | ||||||||||||
| Other | 4 | — | ||||||||||||
| Total restructuring costs | $ | 353 | $ | 1,807 | ||||||||||
The Company is considered an exempted Cayman Islands CompanyAccounts payable and is presently not subject to income taxes or income tax filing requirementsaccrued expenses in the Cayman Islands orCondensed Consolidated Balance Sheets. The liability recorded reflects the United States. As such,Company's best estimate, which may be revised in subsequent periods as the Company’s tax provision was zerorestructuring progresses. The restructuring costs are recorded within the Corporate/Other operating segment. In addition, the Company incurred costs related to software impairment. These costs are recognized within Depreciation and amortization in the Condensed Consolidated Statements of Operations and Comprehensive Loss, and total $0.1 million for the period presented.
three months ended March 31, 2024.
| Employee Termination Benefits | Vendor related costs | Other | Total | |||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||
| Liability as of December 31, 2023 | $ | 1,781 | $ | 3,390 | $ | — | $ | 5,171 | ||||||||||||||||||
| Charges | — | 349 | 4 | 353 | ||||||||||||||||||||||
| Cash payments | (1,234) | (489) | (4) | (1,727) | ||||||||||||||||||||||
| Liability as of March 31, 2024 | $ | 547 | $ | 3,250 | $ | — | $ | 3,797 | ||||||||||||||||||
| Total cumulative costs incurred as of March 31, 2024 | $ | 4,795 | $ | 5,288 | $ | 91 | $ | 10,174 | ||||||||||||||||||
NetComprehensive Loss per Ordinary Share
Net loss per ordinary share is computed by dividing net loss by the weighted average number of ordinary shares outstanding during the period, excluding ordinary shares subject to forfeiture. Weighted average shares were reduced for the effect of an aggregate of 2,700,000 ordinary shares, that were subject to forfeiture if the over-allotment option was not exercised by the underwriters (see Note 7). At March 31, 2020 and December 31, 2019, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earningsfollows:
| Three Months Ended March 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| (in thousands) | |||||||||||
| Revenues: | |||||||||||
| Non-Insurance revenue | $ | 6,824 | $ | 205,783 | |||||||
| Total revenues | 6,824 | 205,783 | |||||||||
| Operating Expenses: | |||||||||||
| Net medical claims incurred | $ | 2,235 | $ | 197,701 | |||||||
| General and administrative expenses | 292 | 990 | |||||||||
| Restructuring costs | 297 | — | |||||||||
| Total operating expenses | $ | 2,824 | $ | 198,691 | |||||||
| Gain from operations | 4,000 | 7,092 | |||||||||
| Net income | $ | 4,000 | $ | 7,092 | |||||||
Concentrationcarrying amounts of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution which, at times may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.
8
SOCIAL CAPITAL HEDOSOPHIA HOLDINGS CORP. III
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2020
(Unaudited)
Fair Value of Financial Instruments
The fair value of the Company’smajor assets and liabilities, which qualifywere classified as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts representedheld for settlement in the accompanying condensed balance sheets, primarily due to their short-term nature.
Recent Accounting Standards
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effectCondensed Consolidated Balance Sheets, follows:
| March 31, 2024 | December 31, 2023 | ||||||||||
| (in thousands) | |||||||||||
Assets(1) | |||||||||||
| Cash and cash equivalents | $ | — | $ | 6,456 | |||||||
| Surety bond and deposits | — | 55,089 | |||||||||
| Non-Insurance receivable | 10,926 | 10,926 | |||||||||
| Total assets | $ | 10,926 | $ | 72,471 | |||||||
Liabilities(1) | |||||||||||
| Unpaid claims | $ | 858 | $ | 2,856 | |||||||
| Accounts payable and accrued expenses | 297 | — | |||||||||
| Accrued salaries and benefits | — | 110 | |||||||||
| Non-Insurance performance year obligation, current | 9,657 | 15,568 | |||||||||
| Non-Insurance payable | 39,810 | 41,565 | |||||||||
| Total liabilities | $ | 50,622 | $ | 60,099 | |||||||
NOTE 3. INITIAL PUBLIC OFFERING
PursuantMarch 31, 2024 Condensed Consolidated Balance Sheet as the settlement with CMS is expected to occur within one year.
| Three Months Ended March 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| (in thousands) | |||||||||||
| Net cash (used in) provided by operating activities | $ | (8,019) | $ | 17,109 | |||||||
NOTE 4. PRIVATE PLACEMENT
Simultaneously with the closing of the Initial Public Offering, the Sponsor purchased an aggregate of 10,933,333 Private Placement Warrants at a price of $1.50 per Private Placement Warrant, for an aggregate purchase price of $16,400,000. Each Private Placement Warrant is exercisable for one Class A Share at a price of $11.50 per share, subject to adjustment (see Note 7). The proceeds from the sale of the Private Placement Warrants were added to the net proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Warrants held in the Trust Account will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless.
NOTE 5. RELATED PARTY TRANSACTIONS
Founder Shares
In October 2019, the Company issued one ordinary share to the Sponsor for no consideration. On January 21, 2020, the Company cancelled the one share issued in October 2019 and the Sponsor purchased 17,250,000 Founder Shares for an aggregate purchase price of $25,000. On April 21, 2020, the Company effected a share capitalization, resulting in 20,700,000 Founder Shares issued and outstanding as of such date. All share and per-share amounts have been retroactively restated to reflect the share capitalization. The Founder Shares will automatically convert into Class A ordinary shares on the first business day following the completion of a Business Combination, or earlier at the option of the holder, on a one-for-one basis, subject to certain adjustments, as described in Note 7.
The Founder Shares included an aggregate of up to 2,700,000 shares subject to forfeiture by the Sponsor to the extent that the underwriters’ over-allotment was not exercised in full or in part, so that the number of Founder Shares would collectively represent 20% of the Company’s issued and outstanding shares upon the completion of the Initial Public Offering.CMS. As a result of the underwriters’ electionCompany's participation in the ACO REACH Model, the Company determined that it was making a performance guarantee with respect to fully exercise their over-allotment option, no Founder Shares are subjectproviders under the Non-Insurance arrangement that should be recognized in the financial statements. The performance guarantee identified relates to forfeiture.
The Sponsor has agreed, subject to limited exceptions, not to transfer, assign or sell any of its Class B ordinary shares or Class A ordinary shares received upon conversion thereof (together, “Founder Shares”) until the earlier of: (A) one year afterCompany guaranteeing the completion of a Business Combination and (B) subsequent to a Business Combination, (x) if the last reported sale priceperformance of the Class A ordinary shares equals or exceeds $12.00 per share (as adjustedthird-party medical providers. Thus, the contract with CMS is accounted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizationsas a performance guarantee under ASC 460-Guarantees. At the inception of the performance year, the Company measures and recognizes the performance guarantee receivable and obligation, issued in this standalone arm's length transaction, using the practical expedient to fair value as set forth in ASC 460-10-30-2(a). The Company estimates the annualized benchmark, which is the amount recognized in both the Non-Insurance performance year receivable and the like)Non-Insurance performance year obligation, current. This is consistent with ASC 460-10-25-4, which provides that a guarantor shall recognize in its statement of financial position a liability for any 20 trading days within any 30-trading daythat guarantee. In addition, when the guarantee is issued in a standalone transaction for a premium, the offsetting entry should be considered received (such as cash or a receivable) according to ASC 460-10-25-4. Thus the Company recognizes the Non-Insurance performance year receivable on its balance sheets.
9
SOCIAL CAPITAL HEDOSOPHIA HOLDINGS CORP. III
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2020
(Unaudited)
Advances – Related Party
The Sponsor advanced the Company an aggregate of $17,631 to cover expensessubsequent measurement related to the Initial Public Offering.Company's performance guarantee. Per ASC 460-10-35-2, depending on the nature of the guarantee, the guarantor's release from risk typically can be recognized over the term of the guarantee using one of three methods: (1) upon expiration or settlement, (2) by systematic or rational amortization, or (3) as the fair value of the guarantee changes. The advances were non-interest bearing andCompany has determined that method (2) is the appropriate method of recognition as discussed above.
Promissory Note — Related Party
On January 21, 2020,subsequent years following the performance year. The shared savings or loss is measured periodically and will be applied to the Non-Insurance performance obligation, current or Non-Insurance performance receivable if the Company issued an unsecured promissory note to the Sponsor, pursuant to which the Company borrowed an aggregate principal amount of $300,000, which amount was outstanding as of March 31, 2020.is in a probable loss position or probable savings position, respectively. The note was non-interest bearing and payable on the earlier of (i) June 30, 2020 and (ii) the completion of the Initial Public Offering. The borrowings outstanding under the note in the amount of $300,000 were repaid upon the consummation of the Initial Public Offering on April 24, 2020.
Administrative Support Agreement
The CompanyACO has entered into an agreement whereby, commencing onwith CMS and a third-party to cover the financial threshold determined by CMS.
Related Party Loans
In order to finance transaction costs in connection withno longer participate as a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes may be repaid upon completion of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of notes may be converted upon completion of a Business Combination into warrants at a price of $1.50 per warrant. Such warrants would be identical to the Private Placement Warrants. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans.
NOTE 6. COMMITMENTS
Registration Rights
Pursuant to a registration rights agreement entered into on April 21, 2020, the holders of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants or warrants issued upon conversion of the Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to the Company’s Class A ordinary shares). The holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that the Company will not be required to effect or permit any registration or cause any registration statement to become effective until termination of the applicable lock-up period. The Company will bear the expenses incurredREACH ACO in connection with the filing2024 performance year. The Company’s exit from the ACO REACH Program was made after the Company determined that it is in the Company's best interest to fully exit the ACO REACH Program, and follows its November 2022 announcement of any such registration statements.
Underwriting Agreement
a strategic reduction in the number of ACO REACH participating physicians in 2023.
| March 31, 2024 | December 31, 2023 | |||||||||||||
| (in thousands) | ||||||||||||||
Non-Insurance performance year obligation (1) | $ | 9,657 | $ | 15,568 | ||||||||||
(1) This obligation represents the consideration due to providers, net of the shared savings or loss for the period and amortization of the liability. | ||||||||||||||
| Three Months Ended March 31, | ||||||||||||||||||||
| 2024 | 2023 | |||||||||||||||||||
| (in thousands) | ||||||||||||||||||||
| Amortization of the Non-Insurance performance year receivable | $ | — | $ | (184,207) | ||||||||||||||||
| Amortization of the Non-Insurance performance year obligation | — | 184,207 | ||||||||||||||||||
| Non-Insurance revenue | $ | 6,824 | $ | 205,783 | ||||||||||||||||
Financial Advisory Fee
The underwriters agreedliability to reimburseensure the amount is still appropriate.
10
SOCIAL CAPITAL HEDOSOPHIA HOLDINGS CORP. III
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2020
(Unaudited)
NOTE 7. SHAREHOLDER’S EQUITY
Preferred Shares — The Company is authorized to issue 5,000,000 preference shares with a par value of $0.0001. The Company’s board of directors will be authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or other special rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. The board of directors will be able to, without shareholder approval, issue preferred shares with voting and other rights that could adversely affect the voting power and other rights of the holders of the ordinary shares and could have anti-takeover effects. At March 31, 20202024 and December 31, 2019, there2023, the liability for employee termination benefits was recorded in Accrued salaries and benefits and the liability for vendor related costs and other expenses were no preferencerecorded in Accounts payable and accrued expenses in the discontinued operations balance sheets. The liability recorded reflects the Company's best estimate, which may be revised in subsequent periods as the restructuring progresses.
| Employee Termination Benefits | Vendor related costs | Total | ||||||||||||||||||
| (in thousands) | ||||||||||||||||||||
| Liability as of December 31, 2023 | $ | 110 | $ | — | $ | 110 | ||||||||||||||
| Charges | — | 297 | 297 | |||||||||||||||||
| Cash payments | (110) | — | (110) | |||||||||||||||||
| Liability as of March 31, 2024 | $ | — | $ | 297 | $ | 297 | ||||||||||||||
| Total cumulative costs incurred as of March 31, 2024 | $ | 110 | $ | 297 | $ | 407 | ||||||||||||||
Common Stock
of the Company’s outstanding Class A Ordinary Shares —Common Stock over a two year period. The Company is authorized to issue 500,000,000 Class A ordinary shares, with a par valuetiming, manner, price and amount of $0.0001 per share. Holdersany repurchases are determined by the discretion of Class A ordinary shares are entitled to one vote for each share. At March 31, 2020management, depending on market conditions and December 31, 2019, there were no Class A ordinary shares issuedother factors. Repurchases may be made through open market purchases or outstanding.
Class B Ordinary Shares —accelerated share repurchases. The Company is authorized to issue 50,000,000 Class B ordinary shares, with a par value of $0.0001 per share. Holders of the Class B ordinary shares are entitled to one vote for each share. At March 31, 2020 and December 31, 2019, there were 20,700,000 Class B ordinary shares issued and outstanding.
Only holders of the Class B ordinary shares will have the right to vote on the election of directors prior to the Business Combination. Holders of Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class on all matters submitted to a vote of our shareholders except as otherwise required by law.
The Class B Shares will automatically convert into Class A ordinary shares on the first business day following the completion of the Business Combination, or earlier at the option of the holder, on a one-for-one basis, subject to adjustment. In the case that additional Class A ordinary shares, or equity-linked securities, are issued or deemed issued in excess of the amounts issued in the Initial Public Offering and related to the closing of a Business Combination, the ratio at which Founder Shares will convert into Class A ordinary shares will be adjusted (subject to waiver by holders of a majority of the Class B ordinary shares) so that theexact number of Class A ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of the ordinary shares issued and outstanding upon completion of the Initial Public Offering plus the number of Class A ordinary shares and equity-linked securities issued or deemed issued in connection with a Business Combination (net of redemptions), excluding any Class A ordinary shares or equity-linked securities issued, or to be issued, to any seller in a Business Combination and any Private Placement Warrants issued to the Sponsor.
Warrants — Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination and (b) 12 months from the closing of the Initial Public Offering. The Public Warrants will expire five years from the completion of a Business Combination or earlier upon redemption or liquidation.
The Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless a registration statement under the Securities Act covering the issuance of the Class A ordinary shares issuable upon exercise of the Public Warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration. No Public Warrant will be exercisable for cash or on a cashless basis, and the Company will not be obligated to issue any shares to holders seeking to exercise their Public Warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration is available.
11
SOCIAL CAPITAL HEDOSOPHIA HOLDINGS CORP. III
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2020
(Unaudited)
The Company has agreed that as soon as practicable, but in no event later than 15 business days, after the closing of a Business Combination, it will use its commercially reasonable efforts to file with the SEC a registration statement registering the issuance, under the Securities Act, of the Class A ordinary shares issuable upon exercise of the Public Warrants. The Company will use it commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of the Business Combination and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the Public Warrants in accordance with the provisions of the warrant agreement. Notwithstanding the above, if the Class A ordinary shares are, at the time of any exercise of a Public Warrant, not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their Public Warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, but will use its commercially reasonable efforts to qualify the shares under applicable blue sky laws to the extent an exemption is not available.
Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00. Once the Public Warrants become exercisable, the Company may redeem the Public Warrants:
Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00. Once the Public Warrants become exercisable, the Company may redeem the Public Warrants:
If and when the Public Warrants become redeemablerepurchased by the Company, the Company may exercise its redemption right even if itany, is unable to register or qualify the underlying securities for sale under all applicable state securities laws.
The exercise pricenot guaranteed. Depending on market conditions and number of ordinary shares issuable upon exercise of the Public Warrantsother factors, these repurchases may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividendcommenced or recapitalization, reorganization, mergersuspended at any time or consolidation. However, except as described below, the Public Warrants will not be adjusted for issuances of ordinary shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of Public Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless.
12
SOCIAL CAPITAL HEDOSOPHIA HOLDINGS CORP. III
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2020
(Unaudited)
In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors, and in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the completion of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates a Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the Public Warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger prices described above will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.
The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A ordinary shares issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable as described above so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
NOTE 8. SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. Other than as described in these financial statements, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.
6%, to $5.2 million for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. The increase was primarily attributable to a higher interest rate environment as compared to the prior period. payments of operating expenses. third party claims, including, but not limited to, negligence, recklessness, willful misconduct, fraud, or otherwise wrongful act or omission with respect to our obligations under the applicable agreements. Sheet ArrangementsITEMMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSReferences in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to Social Capital Hedosophia Holdings Corp. III. References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to SCH Sponsor III LLC. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.Special Note Regarding Forward-Looking StatementsThis Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Form 10-Q including, without limitation, statements in this “Management’sManagement's Discussion and Analysis of Financial Condition and Results of Operations” regardingOperationsCompany’sunaudited condensed consolidated financial position, business strategystatements and notes thereto for the three months ended March 31, 2024, contained in this Quarterly Report on Form 10-Q (the "Form 10-Q") and the plansaudited consolidated financial statements and objectives of managementnotes thereto for future operations, are forward-looking statements. Words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would”the year ended December 31, 2023, contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and variations thereof and similar words and expressions are intended to identify such forward-looking statements. SuchExchange Commission (the "SEC") on March 14, 2023 (the "2023 Form 10-K"). This discussion contains forward-looking statements relateand involves numerous risks and uncertainties, including, but not limited to, future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussedthose described in the forward-looking statements. For information identifying important factors that could cause actual"Risk Factors" section of the 2023 Form 10-K. Actual results tomay differ materially from those anticipatedcontained in any forward-looking statements. See "Cautionary Note Regarding Forward-Looking Statements" for additional information. Unless the context otherwise requires, references in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" to "we," "us," "our," "Clover," "Clover Health," and the "Company" mean the business and operations of Clover Health Investments, Corp. and its consolidated subsidiaries.forward-looking statements, pleaseCenters for Medicare and Medicaid Services ("CMS") Accountable Care Organization Realizing Equity, Access, and Community Health Model ("ACO REACH Model" or "ACO REACH"). On December 1, 2023, the Company notified CMS that it will no longer participate as a REACH ACO in connection with the 2024 performance year. The Company’s exit from the ACO REACH Program was made after the Company determined that it is in its best interest to fully exit the ACO REACH Program, and follows the Company's November 2022 announcement of a strategic reduction in the number of ACO REACH participating physicians in 2023. The remaining activity recognized during 2024 directly relates to prior performance years with CMS.Risk Factors sectionreportable segments are included within Corporate/Other.Three Months Ended March 31, 2024 2023 Total Total (Premium and expense amounts in thousands, except PMPM amounts) Insurance members at period end (#) 79,527 N/A 83,794 N/A Premiums earned, gross $ 341,823 $ 1,437 $ 317,208 $ 1,259 Premiums earned, net 341,722 1,437 317,086 1,258 Insurance medical claim expense incurred, gross 267,475 1,125 274,557 1,090 Insurance net medical claims incurred 266,076 1,119 274,504 1,089 78.2 % N/A 86.6 % N/A Medical care ratio, net 77.9 N/A 86.6 N/A Company’s final prospectusfollowing calendar year. We view our number of members and associated PMPM premiums earned and medical claim expenses, in the aggregate and on a PMPM basis, as useful metrics to assess our financial performance; Member growth and retention aligns with our mission, drives our Total revenues, expands brand awareness, deepens our market penetration, creates additional opportunities to inform our data-driven insights to improve care and decrease medical claim expenses, and generates additional data to continue to improve the functioning of Clover Assistant. Among other things, the longer a member is enrolled in one of our insurance plans, the more data we collect and synthesize and the more actionable insights we generate. We believe these data-driven insights lead to better care delivery as well as improved identification, documentation and management of members' chronic conditions, helping to lower PMPM medical claim expenses.its Initial Public Offering filedinsurance policies written by us during a specific period of time without reduction for premiums ceded to reinsurance. We believe premiums earned, gross provides useful insight into the gross economic benefit generated by our business operations and allows us to evaluate our underwriting performance without regard to changes in our underlying reinsurance structure. Premiums earned, gross excludes the effects of premiums ceded to reinsurers, and therefore should not be used as a substitute for Premiums earned, net, Total revenues, or any other measure presented in accordance with generally accepted accounting principles in the SECUnited States ("GAAP").April 29, 2020. The Company’s securities filings cana monthly basis based on our actuarial bid and the risk-adjustment model used by CMS. Premiums anticipated to be accessedreceived within twelve months based on the EDGAR sectiondocumented diagnostic criteria of our members are estimated and included in revenues for the period, including the member months for which the payment is designated by CMS.SEC’s website at www.sec.gov. Exceptclaims of another insurer, i.e., us, the "primary insurer," in return for a portion of their premium. Ceded earned premiums are earned over the reinsurance contract period in proportion to the period of risk covered. The volume of our ceded earned premium is impacted by the level of our premiums earned, gross and any decision we make to adjust our reinsurance agreements.expressly requireda substitute for Net claims incurred, Total operating expenses, or any other measure presented in accordance with GAAP.applicable securities law,dividing total Insurance medical claim expenses incurred by premiums earned, in each case on a gross or net basis, as the Company disclaims any intentioncase may be, in a given period. We believe our MCR is an indicator of our gross margin for our Insurance plans and the ability of our Clover Assistant platform to capture and analyze data over time to generate actionable insights for returning members to improve care and reduce medical expenses.Three Months Ended
March 31,2024 2023 ($) (%) (in thousands) Revenues Premiums earned, net (Net of ceded premiums of $101 and $122 for the three months ended March 31, 2024 and 2023, respectively) $ 341,722 $ 317,086 $ 24,636 7.8 % Other income 5,200 4,906 294 6.0 Total revenues 346,922 321,992 24,930 7.7 Operating expenses Net medical claims incurred 265,162 274,789 (9,627) (3.5) Salaries and benefits 59,223 68,981 (9,758) (14.1) General and administrative expenses 44,569 57,644 (13,075) (22.7) Premium deficiency reserve benefit — (1,810) 1,810 * Depreciation and amortization 318 279 39 14.0 Restructuring costs 353 1,807 (1,454) (80.5) Total operating expenses 369,625 401,690 (32,065) (8.0) Loss from continuing operations (22,703) (79,698) 56,995 (71.5) Loss on investment 467 — 467 * Net loss from continuing operations (23,170) (79,698) 56,528 (70.9) % Net income from discontinued operations (Note 17) 4,000 7,092 (3,092) (43.6) % Net loss $ (19,170) $ (72,606) $ 53,436 (73.6) % obligationprior period amount is zero or the amount for the line item changed from a gain to updatea loss (or vice versa) and thus yields a result that is not meaningful.revise any forward-looking statements whether8%, to $24.6 million for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. The increase was primarily due to an increase in our risk adjustment revenue driving favorability as a result of new information, future eventsthe Company focusing on member retention.otherwise.Overvieware a blank check company incorporatedmanage our liquidity and financial position in the Cayman Islands on October 18, 2019 formedcontext of our overall business strategy. We continually forecast and manage our cash, investments, working capital balances, and capital structure to meet the short-term and long-term obligations of our businesses while seeking to maintain liquidity and financial flexibility.purposenext 12 months based on our current plans. Our future capital requirements will depend on many factors, including our needs to support our business growth, to respond to business opportunities, challenges or unforeseen circumstances, or for other reasons. We may be required to seek additional equity or debt financing to provide the capital required to maintain or expand our operations. Any future equity financing may be dilutive to our existing investors, and any future debt financing may include debt service requirements and financial and other restrictive covenants that may constrain our operations and growth strategies. If additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us, or at all. If we are unable to raise additional capital when desired, our business, results of effectingoperations, and financial condition would be adversely affected.merger, share exchange, asset acquisition, share purchase, reorganization or similar Business Combination with one or more businesses.holding company in a highly regulated industry. As such, we may receive dividends and administrative expense reimbursements from our subsidiaries, two of which are subject to regulatory restrictions. We intendcontinue to effectuatemaintain significant levels of aggregate excess statutory capital and surplus in our Business Combination usingstate-regulated insurance subsidiaries. Cash, cash equivalents, and investments at the parent company were $127.9 million and $74.0 million at March 31, 2024 and December 31, 2023, respectively. Our unregulated subsidiaries held $4.7 million and $62.8 million of cash, cash equivalents, restricted cash, and investments at March 31, 2024 and December 31, 2023, respectively.proceedsparent, and applicable insurance laws restrict the ability of our regulated insurance subsidiary to declare and pay dividends to the parent. Insurance regulators have broad powers to prevent reduction of statutory surplus to inadequate levels, and there is no assurance that dividends of the Initial Public Offering andmaximum amounts calculated under any applicable formula would be permitted. State insurance regulatory authorities that have jurisdiction over the salepayment of the Private Placement Warrants,dividends by our shares, debt or a combination of cash, shares and debt.The issuance of additional ordinary shares or preferred shares in a business combination:●regulated insurance subsidiary may significantly dilute the equity interest of investors in this offering, which dilution would increase if the anti-dilution provisions in the Class B ordinary shares resulted in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares;●may subordinate the rights of holders of ordinary shares if preferred shares are issued with rights senior to those afforded our ordinary shares;●could cause a change of control if a substantial number of our ordinary shares is issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present directors and officers;●may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us;●may adversely affect prevailing market prices for our units, ordinary shares and/or warrants; and●may not result in adjustment to the exercise price of our warrants.Similarly, if we issue debt or otherwise incur significant indebtedness, it could result in:●default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;●acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;●our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;●our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding;●our inability to pay dividends on our ordinary shares;●using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;●limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;●increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and●limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.We expect to continue to incur significant costs in the pursuitfuture adopt statutory provisions more restrictive than those currently in effect.acquisition plans. We cannot assure you that our plans to complete a Business Combination will be successful.Results of OperationsWe have neither engaged in any operations nor generated any operating revenues to date. Our only activities from inception through March 31, 2020 were organizational activitiesregulatory requirements, including aggregate statutory capital and those necessary to prepare for the Initial Public Offering, described below. We do not expect to generate any operating revenues until after the completion of our initial Business Combination. We expect to generate non-operating income in the form of interest income on marketable securities held after the Initial Public Offering. We expect that we will incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance),surplus as well as dividends paid from the subsidiaries to the parent, please refer to Notes 22 (Dividend Restrictions), 24 (Statutory Equity), and 25 (Regulatory Matters) in the 2023 Form 10-K.due diligence expenses in connection with searchingthe three months ended March 31, 2024 and 2023.Three Months Ended March 31, 2024 2023 (in thousands) Cash Flows Data: Net cash used in operating activities $ 25,935 $ 79,032 Net cash provided by investing activities 9,185 10,181 Net cash (used in) provided by financing activities (3,359) (2,134) Decrease in cash, cash equivalents, and restricted cash $ 31,761 $ 87,079 completing, a Business Combination.2020, we had2024, Net cash provided by operating activities was $25.9 million, which reflects a Net loss of $19.2 million. Non-cash activities included a $28.8 million charge to Stock-based compensation expense and Unpaid claims increased by $102.4 million.activitymaterial changes to our financing arrangements at March 31, 2024, as compared to those disclosed in the statement of operations.Liquidity2023 Form 10-K.Capital ResourcesAs ofCommitments2020, we had cash2024 include: (1) the recognition of $63,370. Until the consummationa performance guarantee of the Initial Public Offering, our only source of liquidity was an initial purchase of ordinary shares by the Sponsor and loans from our Sponsor.Subsequent to the end of the quarterly period covered by this Quarterly Report, on April 24, 2020, we consummated the Initial Public Offering of 82,800,000 Units, inclusive of the underwriters’ election to fully exercise their option to purchase an additional 10,800,000 Units, at a price of $10.00 per Unit, generating gross proceeds of $828,000,000. Simultaneously with the closing of the Initial Public Offering, we consummated the sale of 10,933,333 Private Placement Warrants to the Sponsor at a price of $1.50 per Private Placement Warrant generating gross proceeds of $16,400,000.Following the Initial Public Offering, the exercise of the over-allotment option in full and the sale of the Private Placement Warrants, a total of $828,000,000 was placed in the Trust Account, and we had $1,663,066 of cash held outside of the Trust Account, after payment of costs related to the Initial Public Offering, and available for working capital purposes. We incurred $44,156,346 in transaction costs, including $14,400,000 of underwriting fees, $28,980,000 of deferred underwriting fees and $776,346 of other costs.We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account, excluding deferred underwriting commissions, to complete our Business Combination. We may withdraw interest from the Trust Account to pay taxes, if any. To the extent that our share capital or debt is used, in whole or in part, as consideration to complete a Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, structure, negotiate and complete a Business Combination.In order to fund working capital deficiencies or finance transaction costs$9.7 million in connection with a Business Combination,the Company's participation in the ACO REACH Model and (2) operating lease obligations of $4.3 million. These commitments are associated with contracts that were enforceable and legally binding at March 31, 2024, and that specified all significant terms, including fixed or minimum serves to be used, fixed, minimum, or variable price provisions, and the approximate timing of the actions under the contracts. There were no other material cash requirements from known contractual obligations and commitments at March 31, 2024. For additional information regarding our Sponsor or an affiliateremaining estimated contractual obligations and commitments, see Note 13 (Commitments and Contingencies) and Note 17 (Discontinued Operations).our Sponsor or certain of our officersbusiness, we enter into agreements, with various parties (providers, vendors, consultants, etc.), with varying scope and directors may, but are not obligatedterms, pursuant to loan us funds as may be required. If we complete a Business Combination,which we may repay such loaned amounts out ofagree to defend, indemnify, and hold harmless the proceeds of the Trust Account released to us. In the eventother parties from any claim, demand, loss, lawsuit, settlement, judgment, fine, or other liability, and all related expenses that a Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts, but no proceedsaccrue therefrom (including reasonable attorneys' fees), arising from our Trust Account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants, at a price of $1.50 per warrant, at the option of the lender. The warrants would be identical to the Private Placement Warrants.We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial Business Combination. Moreover, we may need to obtain additional financing either to complete our Business Combination or because we become obligated to redeem a significant number of our public shares upon completion of our Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination. sheet financing arrangementsWe have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of March 31, 2020. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.Contractual obligationslong-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay an affiliateoff-balance sheet arrangements, as defined by applicable regulations of the SponsorSEC, that are reasonably likely to have a monthly fee of $10,000 for office space, administrative and support services, provided to the Company. We began incurring these fees on April 22, 2020 and will continue to incur these fees monthly until the earlier of the completion of a Business Combination and the Company’s liquidation.The underwriters are entitled to a deferred fee of $0.35 per unit,current or $28,980,000 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that we complete a Business Combination, subject to the terms of the underwriting agreement.Critical Accounting PoliciesThe preparation of condensed financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have not identified any critical accounting policies.Recent accounting pronouncementsManagement does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have afuture material effect on our condensedfinancial condition, results of operations, liquidity, capital expenditures, or capital resources.
ITEMQUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKAsQuantitative and Qualitative Disclosures About Market RiskMarch 31, 2020, we were noteconomic losses due to adverse changes in the estimated fair value of a financial instrument as the result of changes in equity prices, interest rates, foreign currency exchange rates and commodity prices. Our Condensed Consolidated Balance Sheets include assets and liabilities with estimated fair values that are subject to any market orrisk. Our primary market risk has been interest rate risk. Following the consummation of our Initial Public Offering, the net proceeds of our Initial Public Offering, including amountsrisk associated with investments in the Trust Account,instruments with fixed maturities. We do not have been invested in certain U.S. government securities with a maturity of 185 days or less or in certain money market funds that invest solely in U.S. treasuries. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest ratecommodity risk.
We are also exposed to credit risk on our investment portfolio. We manage the exposure to credit risk in our portfolio by investing in high quality securities and diversifying our holdings.
Controls and Procedures all potential future conditions.ITEMCONTROLS AND PROCEDURESand procedures are controls and other procedures that are designed to ensurewith the objective of ensuring that information required to be disclosed in our reports filed or submitted under the Exchange Act, such as this report, is recorded, processed, summarized, and reported within the time periodsperiod specified in the SEC’sSEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and proceduresare also designed to ensurewith the objective of ensuring that such information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officerthe chief executive officer and Chief Financial Officer,chief financial officer, as appropriate to allow timely decisions regarding required disclosure.Evaluation Our management evaluated, with the participation of Disclosure Controlsour current chief executive officer and ProceduresAs required by Rules 13a-15 and 15d-15 underchief financial officer (our "Certifying Officers"), the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as ofat March 31, 2020.2024, pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Based upon theirthat evaluation, our Chief Executive OfficerCertifying Officers concluded that, at March 31, 2024, our disclosure controls and Chief Financial Officer concludedprocedures were effective.(as definedwill prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in Rules 13a-15 (e)all disclosure controls and 15d-15 (e)procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under the Exchange Act) were effective.Overover Financial ReportingDuring the most recently completed fiscal quarter, there has beenchangechanges in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that hashave materially affected, or isare reasonably likely to materially affect, our internal control over financial reporting. - OTHER INFORMATION
ITEMLEGAL PROCEEDINGS.None.
Risk FactorsITEMRISK FACTORS. that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in our final prospectus for our Initial Public Offering filed with the SEC on April 23, 2020. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. As of the date of this Quarterly Report,final prospectusfailure to comply with certain continued listing requirements and, if we are unable to regain compliance with all applicable continued listing requirements and standards of Nasdaq, our Class A common stock could be delisted from Nasdaq, which would have an adverse impact on the trading, liquidity, and market price of our Class A common stock.Initial Public Offering filedClass A common stock has fallen below $1.00 per share for 30 consecutive business days, we no longer comply with the SEC$1.00 Minimum Bid Price requirement set forth in Nasdaq Listing Rule 5450(a)(1) for continued listing on April 23, 2020. We may disclose changesThe Nasdaq Global Select Market (the "Minimum Bid Price Requirement"). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has a period of 180 calendar days, or until September 30, 2024, to such factors or disclose additional factors from time to time in our future filingsregain compliance with the SEC.Minimum Bid Price Requirement. To regain compliance, the closing bid price of the Company's Class A common stock must be at least $1.00 per share for a minimum of 10 consecutive business days as required under Nasdaq Listing Rule 5810(c)(3)(A) (unless the Nasdaq staff exercises its discretion to extend this 10-day period pursuant to Nasdaq Listing Rule 5810(c)(3)(H)) during the 180-day period ending September 30, 2024.
ITEMUNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.On April 24, 2020, we consummated our Initial Public OfferingUnregistered Sales of 82,800,000 Units, inclusiveEquity Securities and Use of 10,800,000 Units sold to the underwriters upon the election to fully exercise their over-allotment option, at a price of $10.00 per Unit, generating total gross proceeds of $828,000,000. Each Unit consists of one Class A ordinary share of the Company, par value $0.0001 per share, and one-third of one redeemable warrant of the Company. Each whole warrant entitles the holder thereof to purchase one Class A ordinary share Ordinary Share for $11.50 per share, subject to adjustment. Credit Suisse acted as the sole book-running manager. The securities sold in the offering were registered under the Securities Act on registration statements on Form S-1 (No. 333-236776 and 333-237777). The registration statements became effective on April 21, 2020.Simultaneously with the consummation of the Initial Public Offering, and the exercise of the over-allotment option in full and the sale of the Private Placement Warrants, we consummated a private placement of 10,933,333 Private Placement Warrants to our Sponsor at a price of $1.50 per Private Placement Warrant, generating total proceeds of $16,400,000. Such securities were issued pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.The Private Placement Warrants are identical to the warrants sold as part of the Units in the Initial Public Offering except that, so long as they are held by the Sponsor or its permitted transferees: (1) they will not be redeemable by us (except in certain redemption scenarios when the price per Class A ordinary share equals or exceeds $10.00 (as adjusted)); (2) they (including the Class A ordinary shares issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by the Sponsor until 30 days after the completion of our Business Combination; (3) they may be exercised by the holders on a cashless basis; and (4) they (including the Class A ordinary Shares issuable upon exercise of these warrants) are entitled to registration rights.Of the gross proceeds received from the Initial Public Offering and the full exercise of the option to purchase additional Units, $828,000,000 was placed in the Trust Account.We paid a total of $14,400,000 in underwriting discounts and commissions and $776,346 for other costs and expenses related to the Initial Public Offering. In addition, the underwriters agreed to defer $28,980,000 in underwriting discounts and commissions.For a description of the use of the proceeds generated in our Initial Public Offering, see Part I, Item 2 of this Form 10-Q.
Defaults Upon Senior SecuritiesITEMDEFAULTS UPON SENIOR SECURITIES.
Mine Safety DisclosuresITEMMINE SAFETY DISCLOSURES.
ITEMOTHER INFORMATION.None.18ITEMEXHIBITS.The followingExhibits and Financial Statement Schedulesare filed as part of, or incorporated by reference into,to this Quarterly Report on Form 10-Q.10-Q is set forth below:No.Description of Exhibit3.1Amended and Restated Memorandum and Articles of Association of the Company.(1)31.1*Exhibit
No.Description 10.1* 31.1* 31.2* 32.1**32.1†32.2**32.2†101.INS*101.INSInline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. 101.CAL*101.SCHInline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.SCH*101.DEFXBRL Taxonomy Extension Schema Document101.DEF*Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB*101.LABInline XBRL Taxonomy Extension LabelsLabel Linkbase Document101.PRE*101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document *Filed herewith.**104Furnished.(1)Cover Page Interactive Data File (embedded within the Inline XBRL document)Previously filed as an exhibit to our Current Report on Form 8-K filed on April 24, 2020 and incorporated by reference herein.
_____________SOCIAL CAPITAL HEDOSOPHIA HOLDINGSCLOVER HEALTH INVESTMENTS, CORP. IIIDate: May 7, 2024 By: /s/ Andrew Toy Date: June 4, 2020/s/ Chamath PalihapitiyaAndrew ToyName:Chamath PalihapitiyaTitle:Chief Executive Officer (Principal Executive Officer) Date: May 7, 2024 By: /s/ Terrence Ronan (Principal Executive Officer)Terrence RonanDate: June 4, 2020/s/ Steven TrieuName:Steven TrieuTitle:Interim Chief Financial Officer (Principal (Principal Financial Officer and Principal Accounting Officer)